A young Elizabeth-Warren-supporting hedge fund friend (yes, she has at least one seven-figure-earning hedge fund supporter) finally caved to eight years of my nagging and agreed to give the DNC $35,500. (That’s a round number in political fundraising. Don’t ask.)
But then, as we were mulling details — credit card? check? wire transfer? — he texted: “I just don’t want to change my mind. I want to do this but it seems insane but I just am forcing myself to!”
“It’s hardly insane,” I texted. “It’s one of the best things you’ve ever done. Would it have been insane to fight back after the Japanese sneak attack in 1941? Here, you are fighting back against the Russian sneak attack — but not having to leave home for four years and risk your life to do it. You’re just decrementing your bonus by 5%.”
Jim Burt: “Saturday, we note the 78th anniversary of the ‘Date Which Will Live in Infamy,’ a day on which a foreign power attacked America and caused great harm. On September 11, we commemorate another day of infamy on which a foreign power (though not a state) attacked America and caused great harm. I suggest that when the history of our times is written, November 8, 2016 will likewise be described as a day of infamy on which a foreign power attacked America and caused great harm. Other than the choice of weapons, the big difference in the most recent day of infamy from the earlier ones is that in the earlier ones the United States defended itself and counterattacked.”
. . . Mr. Trump’s “Art of the Deal” approach to the world is the opposite of what made America great. It replaces trust with suspicion and turns partners into skeptics. It is a global version of the Sicilian world order I encountered in that parking lot — everyone, even the smallest con, using whatever they have to advance their interests. Is that what America wants? If not, it needs to put more trust in what used to be its greatest quality: creating trust.
And now (switching gears just a little):
Allan Siegert: “It’s been since 2016 when you last updated your book … are you planning to update The Only? If you do update, please give your latest advice on IRA conversions to a Roth. Or, maybe tell us about an app that could help us figure it out.”
→ After the election?
My general rule would be, simply: convert as much each year as you can comfortably afford — if any. Because paying the tax now and switching from a traditional IRA to a Roth IRA in effect allows you to increase the size of your IRA (and increases your withdrawal flexibility).
The question is similar to: “If I were allowed to put more into a retirement plan, should I?” The answer, I think, is almost is always, “Yes, if you comfortably can.”
You are unlikely ever to regret having more after-tax cash available during retirement than you otherwise would have had.
Of course: don’t BORROW to make the conversion. And I would say, don’t use the cash in your traditional IRA to pay the tax on making the conversion. And don’t necessarily defer an amazing vacation or the addition to your home that you’ve been dreaming of building — or the big contribution to saving the world you feel compelled to make.
But you get the idea.
Click here for more . . . and a calculator that can help you decide.
Have a great weekend!