Thanks for another nice read over morning coffee, Mark.
Reading this took me back to the early 1970's when the oil embargo contributed to heating oil prices skyrocketing and the availability of the oil spotty at times in New England. The wood stove in our house became the primary source of heat during that time and for years after the crisis had abated. We were blessed with virtually unlimited access to firewood on the property and adjoining properties. I have great memories of both sitting in front of the stove (sometimes open like a fireplace or closed to run for hours on a armload of wood) and of the many hours working in the woods with my dad cutting, splitting and stacking wood for the coming seasons.
Well done Rick.
While the IRA /401K spectrum is no less complicated with both Traditional and Roth, it is always nice to have multiple "tools in the tool box". Your hands on approach and sharing of your experience based insights set a good example for younger readers in particular. That's important since we were among the first cohort to wield these tools en masse and we all had our share of success and errors along the way. Helping those who follow in learning how to pick up the right tool at various times in their financial lives while considering both shorter and long term horizons pays big dividends....literally. Again, well done.
XOM had been on my sell list for a couple years as part of my ongoing effort to whittle our individual equity holdings down to just a handful of stocks. This is all part of the long term and nearly completed goal of being (almost) purely invested in low cost index funds. The rise in XOM's price this year offered a reasonably nice exit to an otherwise mundane holding.
I sympathize. I could not do it any more and moved out of the poorly run state I was in some years ago. Just in time as it worked out...as it has since entered the fiscal proximity of Illinois and N.J.
I sat next to a person on a flight not long ago out of O'Hare who was moving from Illinois after over 50 years there and was on his last flight out. He was in a very jovial mood. He quipped that it might be easier for private sector employees/tax payers in poorly run states to just adopt a state worker family and pay part of their retirement etc.directly. He added "at least I might have gotten a Christmas card and invited to dinner once in awhile after I sent them a check each month." :)
We are in complete agreement that folks in those positions should receive Social Security.
In the event my spouse and I ever are eligible at ages 67 and 70 respectively to receive S.S.; every dollar will be donated to Veterans' and First Responder related causes.
BTW: Thank you for your service. I had a solemn stroll along the traveling Vietnam Memorial Wall recently and have visited the one in D.C. twice. It brings me to tears every time.
100% spot on in your interpretation Dick. Look on the bright side, with a reduced or eliminated Social Security benefit you won't care how it is taxed-nothing to tax.
I'm all about financial simplicity particularly in retirement.
Toward that end, all this talk of Roths whetted my appetite for another sizable Roth conversion yesterday.
Investing in a simplified future tax situation always gives me a dose of dopamine. I'll get another dopamine hit when I make the associated sizeable tax pre-payment next month. That payment in effect gives Uncle Sam that tax revenue over 10 years prior to the beginning of my RMDs when he'd just begin to otherwise incrementally see this revenue. Once and done, no more tax calculations on that money after this year and Uncle Sam can spend it next month.. Win, Win. See, I have no aversion to taxes, I even like to pay them early.
I know you'll never agree with my view on true independence from government dole but I do put my money where my mouth is on the topic of never relying on S.S. nor wanting anything to do with it. I will do it again next quarter with another Roth conversion.
Oh Marilyn, I apologize for starting your morning like this but it gets so much worse.
Imagine a non- working spouse who was astute enough back in 1998 in their 30's to open and contribute to a Roth account and contribute each year since. They have amassed approaching 3/4 of a million dollars in that account by trusting that the U.S. Equity Market is a wealth building engine. Presently, they are still a few years from collecting Social Security. By the time their spousal S.S. payments commence who knows, it may be approaching a million dollars in the account. Thanks to the largess of the Social Security program, that spouse will be able to leave much more invested for longer tax free in the Roth AND probably pass some down to the next generation who can leave it invested tax free for 10 years.
All very wonderful for the spouse and their family.
You can't make this stuff up. Only a government program mired in the past could operate this way.
The good news though Marilyn, not everyone lined up on the receiving end of this largess feels entitled to it nor wants others taxed more to sustain it.
I leave you on that positive note. Enjoy your morning.
"Roth is for upper income people not the bulk of American workers": This is simply inaccurate particularly with the advent of Roth 401Ks. You must have a very different definition of "upper income" to include anyone with a 401K or IRA account evidently. If anything Roth participation should be encouraged and fostered not discouraged with taxation etc. "You say SS pays benefits to independently wealthy individuals and yet you don’t want those benefits taxed for individuals whose independent wealth comes from a Roth account. I do get that at all". You are fixated on taxation vs prudent spending. There is also prudent taxation that does not induce disincentives in the wrong areas. Taxing Roths is a disincentive to a rare positive note in our economic universe."It simply is not fair that a person with retirement income of say $40,000 has their SS benefits deemed taxable while a person with Roth income of $100,000 does not".Again, step outside the echo chamber. Taxation is not the only solution. What is not fair is that you and I are even eligible to collect. By eliminating/reducing S.S. benefits for people like you and I, we are making a much bigger contribution to the solution. Expanding taxation on S.S. benefits is indeed minor in the scheme of things for people like you and I but to tax Roth in any manner has broader deleterious implications. Roth is an incremental solution not a problem.
Dick,
I’ll politely reel you back into the conversation at hand from your self-imposed, tangential echo chamber on this topic.
At no time did I indicate that those in need of Social Security should not continue to receive it now or in the future. That notion originated in your response.
I’ll be more explicit to help you along.
The shrinking of Social Security should happen in the upper income thresholds which based on your rather detailed disclosures of your situation, includes you and while I would never disclose my situation in detail, includes me as well. The fact that you or I and anyone in our economic demographic or above collects or is about to collect S.S. is thenonsense. If there is going to be a hit to benefits, it needs to start at the top. My closing statement specifically stated as much if you read that far.
With that basis (re)set; if you re-read my comments, it is directed at the notion that Roth IRA’s should not be used to help fix or perpetuate the current S.S. mess. I gather you are not a participant in the Roth IRA universe. If that is the case then frankly you are not in a position to have personally experienced how much progress toward financial independence has been and continues to be facilitated for so many with Roth IRA’s as a powerful element in their portfolios. I’ll skip over the politically charged rhetoric in your response and only address the items that are relevant to my original post. · I don’t see employer benefits (be they public or private) germane to self-reliance in this context. Benefits are part of compensation that we all work for and consider when opting to accept or reject employment as we work toward financial security and ideally true independence in retirement. So, this is out of context, no comment necessary. I’ll skip further down a few paragraphs as they are solely within your own echo chamber. I made my point above that the shrinking of Social Security needs to be at the upper end of the economic strata not the lower or even mid. Enough said. · Regarding your paragraph on the ability to achieve greater results by investing a dollar vs paying S.S. tax. From a sheer return perspective, I’ll bet on the U.S. equity market over time vs S.S. It’s unfortunate that the S.S. program itself does not have a market-based component to aid in long term liquidity. That said, before you place any more words in my mouth from your echo chamber, I believe strongly that virtually everyone should have to pay into the system to support those who NEED Social Security. I’ll also add that I’ll continue to side with the Warren Buffets of the world who have faith in the U.S. equity markets to create true wealth and financial independence. In closing, the solution to the Social Security morass need not be to solely address the revenue/tax side of the equation. There needs to be a reduction in spend and it needs to start at the top with people like you and me. Roth IRA’s are one vehicle to lift people out of the lower and indeed mid economic levels; some percentage of whom could be (and are) in a position to live entirely without S.S. one day. This is a worthy goal for society and the individual. Back to my original point in all this: Why sully a solid, successful, win-win program such as Roth IRAs to fund the failings of a runaway Social Security program …and to add…that is so poorly administrated that it pays benefits to independently wealthy individuals.
Comments
Thanks for another nice read over morning coffee, Mark. Reading this took me back to the early 1970's when the oil embargo contributed to heating oil prices skyrocketing and the availability of the oil spotty at times in New England. The wood stove in our house became the primary source of heat during that time and for years after the crisis had abated. We were blessed with virtually unlimited access to firewood on the property and adjoining properties. I have great memories of both sitting in front of the stove (sometimes open like a fireplace or closed to run for hours on a armload of wood) and of the many hours working in the woods with my dad cutting, splitting and stacking wood for the coming seasons.
Post: Bad Maths, Good Fire.
Link to comment from August 29, 2026
Well done Rick. While the IRA /401K spectrum is no less complicated with both Traditional and Roth, it is always nice to have multiple "tools in the tool box". Your hands on approach and sharing of your experience based insights set a good example for younger readers in particular. That's important since we were among the first cohort to wield these tools en masse and we all had our share of success and errors along the way. Helping those who follow in learning how to pick up the right tool at various times in their financial lives while considering both shorter and long term horizons pays big dividends....literally. Again, well done.
Post: Traditional or Roth
Link to comment from August 29, 2026
XOM had been on my sell list for a couple years as part of my ongoing effort to whittle our individual equity holdings down to just a handful of stocks. This is all part of the long term and nearly completed goal of being (almost) purely invested in low cost index funds. The rise in XOM's price this year offered a reasonably nice exit to an otherwise mundane holding.
Post: Blood Money
Link to comment from August 27, 2026
This would be a great posting on a web site with the name “HaughtyDollar”.
Post: Americans and their credit cards
Link to comment from August 25, 2026
I sympathize. I could not do it any more and moved out of the poorly run state I was in some years ago. Just in time as it worked out...as it has since entered the fiscal proximity of Illinois and N.J. I sat next to a person on a flight not long ago out of O'Hare who was moving from Illinois after over 50 years there and was on his last flight out. He was in a very jovial mood. He quipped that it might be easier for private sector employees/tax payers in poorly run states to just adopt a state worker family and pay part of their retirement etc.directly. He added "at least I might have gotten a Christmas card and invited to dinner once in awhile after I sent them a check each month." :)
Post: The Federal Debt and Social Security Payments
Link to comment from August 20, 2026
We are in complete agreement that folks in those positions should receive Social Security. In the event my spouse and I ever are eligible at ages 67 and 70 respectively to receive S.S.; every dollar will be donated to Veterans' and First Responder related causes. BTW: Thank you for your service. I had a solemn stroll along the traveling Vietnam Memorial Wall recently and have visited the one in D.C. twice. It brings me to tears every time.
Post: Income taxes on retirees with Social Security
Link to comment from August 19, 2026
100% spot on in your interpretation Dick. Look on the bright side, with a reduced or eliminated Social Security benefit you won't care how it is taxed-nothing to tax. I'm all about financial simplicity particularly in retirement. Toward that end, all this talk of Roths whetted my appetite for another sizable Roth conversion yesterday. Investing in a simplified future tax situation always gives me a dose of dopamine. I'll get another dopamine hit when I make the associated sizeable tax pre-payment next month. That payment in effect gives Uncle Sam that tax revenue over 10 years prior to the beginning of my RMDs when he'd just begin to otherwise incrementally see this revenue. Once and done, no more tax calculations on that money after this year and Uncle Sam can spend it next month.. Win, Win. See, I have no aversion to taxes, I even like to pay them early. I know you'll never agree with my view on true independence from government dole but I do put my money where my mouth is on the topic of never relying on S.S. nor wanting anything to do with it. I will do it again next quarter with another Roth conversion.
Post: Income taxes on retirees with Social Security
Link to comment from August 19, 2026
Oh Marilyn, I apologize for starting your morning like this but it gets so much worse. Imagine a non- working spouse who was astute enough back in 1998 in their 30's to open and contribute to a Roth account and contribute each year since. They have amassed approaching 3/4 of a million dollars in that account by trusting that the U.S. Equity Market is a wealth building engine. Presently, they are still a few years from collecting Social Security. By the time their spousal S.S. payments commence who knows, it may be approaching a million dollars in the account. Thanks to the largess of the Social Security program, that spouse will be able to leave much more invested for longer tax free in the Roth AND probably pass some down to the next generation who can leave it invested tax free for 10 years. All very wonderful for the spouse and their family. You can't make this stuff up. Only a government program mired in the past could operate this way. The good news though Marilyn, not everyone lined up on the receiving end of this largess feels entitled to it nor wants others taxed more to sustain it. I leave you on that positive note. Enjoy your morning.
Post: Income taxes on retirees with Social Security
Link to comment from August 18, 2026
"Roth is for upper income people not the bulk of American workers": This is simply inaccurate particularly with the advent of Roth 401Ks. You must have a very different definition of "upper income" to include anyone with a 401K or IRA account evidently. If anything Roth participation should be encouraged and fostered not discouraged with taxation etc. "You say SS pays benefits to independently wealthy individuals and yet you don’t want those benefits taxed for individuals whose independent wealth comes from a Roth account. I do get that at all". You are fixated on taxation vs prudent spending. There is also prudent taxation that does not induce disincentives in the wrong areas. Taxing Roths is a disincentive to a rare positive note in our economic universe. "It simply is not fair that a person with retirement income of say $40,000 has their SS benefits deemed taxable while a person with Roth income of $100,000 does not". Again, step outside the echo chamber. Taxation is not the only solution. What is not fair is that you and I are even eligible to collect. By eliminating/reducing S.S. benefits for people like you and I, we are making a much bigger contribution to the solution. Expanding taxation on S.S. benefits is indeed minor in the scheme of things for people like you and I but to tax Roth in any manner has broader deleterious implications. Roth is an incremental solution not a problem.
Post: Income taxes on retirees with Social Security
Link to comment from August 17, 2026
Dick, I’ll politely reel you back into the conversation at hand from your self-imposed, tangential echo chamber on this topic. At no time did I indicate that those in need of Social Security should not continue to receive it now or in the future. That notion originated in your response. I’ll be more explicit to help you along. The shrinking of Social Security should happen in the upper income thresholds which based on your rather detailed disclosures of your situation, includes you and while I would never disclose my situation in detail, includes me as well. The fact that you or I and anyone in our economic demographic or above collects or is about to collect S.S. is the nonsense. If there is going to be a hit to benefits, it needs to start at the top. My closing statement specifically stated as much if you read that far. With that basis (re)set; if you re-read my comments, it is directed at the notion that Roth IRA’s should not be used to help fix or perpetuate the current S.S. mess. I gather you are not a participant in the Roth IRA universe. If that is the case then frankly you are not in a position to have personally experienced how much progress toward financial independence has been and continues to be facilitated for so many with Roth IRA’s as a powerful element in their portfolios. I’ll skip over the politically charged rhetoric in your response and only address the items that are relevant to my original post. · I don’t see employer benefits (be they public or private) germane to self-reliance in this context. Benefits are part of compensation that we all work for and consider when opting to accept or reject employment as we work toward financial security and ideally true independence in retirement. So, this is out of context, no comment necessary. I’ll skip further down a few paragraphs as they are solely within your own echo chamber. I made my point above that the shrinking of Social Security needs to be at the upper end of the economic strata not the lower or even mid. Enough said. · Regarding your paragraph on the ability to achieve greater results by investing a dollar vs paying S.S. tax. From a sheer return perspective, I’ll bet on the U.S. equity market over time vs S.S. It’s unfortunate that the S.S. program itself does not have a market-based component to aid in long term liquidity. That said, before you place any more words in my mouth from your echo chamber, I believe strongly that virtually everyone should have to pay into the system to support those who NEED Social Security. I’ll also add that I’ll continue to side with the Warren Buffets of the world who have faith in the U.S. equity markets to create true wealth and financial independence. In closing, the solution to the Social Security morass need not be to solely address the revenue/tax side of the equation. There needs to be a reduction in spend and it needs to start at the top with people like you and me. Roth IRA’s are one vehicle to lift people out of the lower and indeed mid economic levels; some percentage of whom could be (and are) in a position to live entirely without S.S. one day. This is a worthy goal for society and the individual. Back to my original point in all this: Why sully a solid, successful, win-win program such as Roth IRAs to fund the failings of a runaway Social Security program …and to add…that is so poorly administrated that it pays benefits to independently wealthy individuals.
Post: Income taxes on retirees with Social Security
Link to comment from August 17, 2026