After paying another huge tax bill & pondering more cash in tax advantaged accounts, the problem was the chance of capital gains tax actually being higher than regular income tax. The 12% tax bracket when counting standard deduction is now up to $63k. The 1st $12k are only 10%.
If the stonks are in a after tax account, interest rates or the cash balance is 0 by the time the stonks are sold, lions could pay 15% instead of 12% on the capital gains.
Most of the IRA funds are currently in dividend paying stonks, which would be taxed at 24% in Calif*. The dividend is less than what cash is earning, though, for now.
The amount of cash which could be moved to the IRA's would still be paltry, despite every effort to decrease the tax burden. A lot of cash is going to be needed for housing & transitioning. It could cost 15% capital gains instead of 12% income tax to raise it from stonk sales in the after tax account.
On the other paw, if interest rates stay above water, the compounding of taxes on interest could be huge compared to a single capital gain's tax. Positive interest rates are the only reason for having cash in an IRA & for most of the lion kingdom's career, they didn't exist. So for years, lions & most of generation X put all their negative interest earning cash in taxable accounts & positive growth stonk in IRA's to beat taxes.
The 1st positive interest rates in a generation really flipped the favor to having cash in IRA's.
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It's not printed money. It's AI datacenter demand.
Water leak alert.
Find someone who looks at you the way a bald eagle looks at Iran.
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