I have had this idea myself, and revisited it several times over the last year, just couldn't pull the trigger and do it. It seems like a no brainer, I don't know what my hang-up is.

https://www.forbes.com/advisor/retirement/rule-of-55-retirement/

Anyone around here a CPA? I have a question about gains calculations and how it relates to taxable income. I'm getting conflicting information from two accountants I've spoke with about this question.

https://www.irs.gov/taxtopics/tc409

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Capital Gain Tax Rates

The tax rate on most net capital gain is no higher than 15% for most individuals. Some or all net capital gain may be taxed at 0% if your taxable income is less than $80,000.

A capital gain rate of 15% applies if your taxable income is $80,000 or more but less than $441,450 for single; $496,600 for married filing jointly or qualifying widow(er); $469,050 for head of household, or $248,300 for married filing separately.

However, a net capital gain tax rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate.

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So lets say that you're married and your taxable income is $60,000 which is $20,000 less than $80,000 threshold. If that couple disposes of $50,000 in stocks that fall under long term capital gains, how is that taxed.

One accountant told me that the entire $50,000 is taxed at 15% since it throws you over the $80,000 cap. The other said that the first $20,000 is taxed at 0% and then the remaining $30,000 is taxed at 15%.

Anyone know who's right?

just a laugh on paying off the mortgage - mine has been paid off forever - but my taxes are so high living in the northeast that it's like a mortgage payment - i have my main house and vacation house paid off, but the taxes for them are still over 1300 per month - so basically i still have a mortgage.

It matters whether it is long term or short term gains. Long term gains (more than a year owned before selling) is 15%. Short term gains tax is wherever the money falls in your tax bracket.
see this article:
https://www.investopedia.com/terms/c/capital_gains_tax.asp
"Capital Gains Tax Rates 2020
The profit on an asset sold when owned for less than a year is generally treated for tax purposes as if it were wages or salary. Such gains are added to your earned income or ordinary income.1

You're taxed on the short-term capital gain at the same rate as for your regular earnings. An exception is when the amount of the gain happens to push you into a higher marginal tax bracket.

The same applies to dividends paid by an asset, which aren't capital gains but do represent a profit. In the U.S., dividends are taxed as ordinary income for taxpayers who are in the 15% and higher tax brackets.2

A different system applies, however, for long-term capital gains. The tax you pay on assets held for more than a year and sold at a profit varies according to a rate schedule based on income thresholds. For 2020, those rates are shown in the table below"

It would be long term.

15% of the profits then for most people.

Just for calculations sake let's assume the investment only cost $1, so the gain was $49,999. You're saying that the entire $49,999 would be subject to the 15% tax and there would be a $7,500 tax liability?

Normally yes, 15% of the profits would be taxable. But if you fall below that income threshold it appears that you would get a break for the amount up to the threshold. The profit amount is what matters (the selling proceeds minus the original cost). I am not a tax expert though.

After reading the IRS link again, it appears that if the total income exceeds $80,000 then the 15% applies to the whole amount of the capital gains.

Normally, US income taxes are progressive meaning that portions of your income are taxed differently as you get higher (you pay a lower percentage on the first $20000 than you do on the range from $ 180000 to $200000), but long term capital gains are much more like a flat tax rate with a couple of exceptions for lower and higher incomes.

Problem with living in the Toronto area, most houses are $1.5 million plus. Hard to not have a mortgage in my area We have relatives in Fort Wayne, Indiana, houses that cost $300k in their area would be $2 million in Toronto. I guess it is a good problem as they do appreciate more.

Ok I am lost. I ran a sample on turbotax of income including capital gains of less than 80000 and it seems to be taxing the long term capital gains.

This is also eventually an actual thing that will happen with QYLD. Some of your dividends are Return of Capital, which lowers the cost basis/what you paid. Over long enough time you could have $0 cost basis so everything is now 15% like your $1 vs $49,999 example.

I'm sorry, I don't know what QYLD is and a google search returns at least 3 pages about a covered call EFT.

Yeah, I'm not really sure how it works. These guys are saying it's only on the $30,000 (in my example) over the $80,000 cap. The $20,000 is at 0%.

https://erwealth.com/podcastblog/will-capital-gains-push-me-into-a-higher-tax-bracket

An example showing how capital gains are taxed

Let me give you an example. Ignoring any credits or deductions, let’s say you are married and have a combined income of $60,000 and you have long-term capital gains of $40,000. Of this $40,000, $20,800 (80,800-60,000) would be taxed at the 0% long-term capital gains rate, and $19,200 (40,000-20,800) would be taxed at the 15% capital gains rate.

This is when I wish Iceman44 was still here.

Agreed - you never know when your number is up so at some point it's time to stop squirreling away. When I worked, we contributed 21% to investment, now I think we are around 4% to keep my wife's match. Once the house is paid, the pension will cover all the bills and then some, so all the stuff we stuck away I figure we can pull around 40K a year as extra money - hopefully inflation won't eat is all away. but in reality once you hit 75 - 80, spending will decrease sharply anyway.

I know the mistake I made in my practice turbotax file. I did it as if it were a single person rather than a married filing jointly that gets you the sub $80000 zero percent rate.

Counter argument in three words: long term care

I have priority for VA nursing home so only have to worry about the wife. Almost all my heath care is covered due to military retirement.

Not bad, my mortgage is 3000 a month, (taxes are included which is approaching 7k a yr, Insurance is 6k a yr). I need almost another 1000 for utilities and maintenance costs.

I refinanced last year for 2.5% that's way too low of a rate to pay it off early

Did you exit your RIOT plays or are still hodl hodl hodl?

Concerned at all about the analyst note ripping into it?

that depends on the person, I am a saver by nature and have always lived well below my means

also with a mortgage the first few years go mostly to interest and the later years pay off the principal
I agree with both of you, a house is really the last debt you should pay off - but boy does it feel good to be debt free

Having no mortgage definitely can bring a person peace of mind, especially if they aren't a professional investor. Had no mortgage for awhile after racking up big debt(downgraded to a place that was less than half as expensive... in a cheaper area). Went from super stressed to calm. I have since upgraded to a bigger home with the new wife, I have a pretty small mortgage, and really only invest in the stock market what I am comfortable with. The next time I take money out of the house it will likely be to buy a investment home as I live in a place where real estate has consistently been a great investment.

I will only add to my stock trading fund from stock trading profits, no plans to putting in anything extra even if I think a stock is the opportunity of a lifetime.

Those are expensive utilities! My power/light is about $150 a month in the fall and winter, $75 in the spring and summer. Water/sewer/garbage $150 a month. Gas heat/stove is $100 a month in fall and winter, $35 a month in spring and summer. My utilities average out to less than $500 a month in peak times, half that between April-September.

Seattle has a pretty mild climate though. I'd guess kvan pays a tidy sum for A/C in Miami. He also included "maintenance" so maybe he just throws kick-ass parties.

Well. it's a big old leaky house too, I pay about 400-500 in electric in the summer. I have 2 A/C units, one 5 ton, the other 2 ton they run pretty much all day and night. I pay almost 200 for internet and tv, then there is lawn and pool care, water and sewer, alarm...3 cell phones. I'm probably forgetting a couple of things.

Yeah, we also have cheap hydroelectric power. I read a lot of those Marketwatch articles on where should I retire to if I want this sort of town and have this much money, it's interesting that they never factor in utility costs, when they factor in taxes and median home prices. I figured utility costs were pretty similar around the states, give or take an air conditioning system, but was amazed this Winter to see how expensive heating costs were in Texas when they had those issues there. What you save in property taxes there, it seems you lose in paying 2-3 times what some states pay in utility costs.

Down day in the market... what's still climbing for you? Apple and Pfizer are about my only stocks in green today.

I've only got two up a fraction today.

All downhill rides for me too.

Thinking about putting some last minute $$ down on BDRY - holding it's own today and has jumped above the 20 day MA. May be a bit late, but this won't be a long term hold more than likely. Wish me luck.

WOOF, LIT, and SABR are the only holdings I have that are up anything more than a fraction of a percent today. 80% of my stuff is down, however.

For me, nothing down nor up. Technically all green, but, hardly.

Are you following me on SABR and LIT

I do believe I bought those based on your recs.

VIAC has been drawing me in like a moth to a flame. I have been holding out till now, but couldn’t help but start nibbling today.

Old habits die hard.

On mortgage cash, you will never find a cheaper source of cash ever that also allows you to leverage higher over longer term.

In Canada you can borrow up to 80% of your home’s value. My current rate is 1.79%. If you’re leaving that money unused then you’re missing out on massive gains.

It’s 4/20. Good luck to all of you weed stock holders.

What's everyone buying today?

Added some Boeing and Facebook...not convinced either will move up in the short term . But they're long term keepers no matter which way the market goes.

Depends on your investments, you may lose big nothing is guaranteed

This talk of win big in the market is fueled by the last 12 years of gains where the S&P500 has gained average of 15% a year. This is not always the case and in fact the big gains of the past 12 years point to much smaller gains going forward (and possibly big negative years).

The years from 2000 to 2008 (which were following a massive build up in PE ratio and stock prices) contained 4 years where the S&P returned double digit negative returns, -10%, -13%, -23% (2000-2002) -38% (2008).

Right on. Over the long haul you're unlikely to lose money if you borrow against your house at 1.8% and park the money in an index fund. But the stock market isn't one-way up, and being leveraged to that extent would create stress for many people, which has its own cost (including longer-term health impacts). And of course if you're actively investing your re-mortgage cash in a less diversified way, the risks go up along with the potential rewards.

I bought some Paypal about a month ago and it's 4% up already, I think it's a solid long term investment.

Along that line of thought:

Bank loan rates are also low
Why not take out a nice bank loan at 2.5% and put it in the market ??

Nice! Today is nothing but a head fake, everything is down about 5%... which tells me it's an orderly sell off. I'm not worried...yet

Yeah, now you're talking.... C'mon kids, let it all ride on bitcoin or GME!

Last signature loan I took out to buy pins when I was short on cash was 6.5% - I'm sure the back was pissed when I paid it back in 3 months.

I used to work there. Am absolutely kicking myself for leaving, had a pretty good annual stock award. Their stock was at $15 when I left