Potential international banking scandal that will go absolutely nowhere. Maybe a fine here and there.
Markets letting off a little steam this morning?
Potential international banking scandal that will go absolutely nowhere. Maybe a fine here and there.
IMO, it was definitely an international banking scandal. As usual, the common stockholders paid the fines while the criminals made and kept serious money.
The person or people who leaked the SARs and CTRs also performed criminal acts. There are many privacy violations.
I’m somewhat surprised which US banks were involved. If you had told me the scenario and asked me to guess the major US bank, then I would have guessed Citi. They still have a much larger international presence with substantially weaker technology and internal auditing systems.
Lots of smart folks here. Hope it's OK to ask for input about one's personal situation. I haven't really crunched the numbers yet but thought I'd throw this out:
After decades in the corporate world I now find myself co-founder of a two person software company. Things are going well. We're not interested in world domination: slow and steady growth with two employees is fine. We're both likely to want to retire in the next 5-15 years and at that time would consider selling, or adding a third employee to do daily admin and support. So that's the set up.
We've recently established a solo 401k plan. In addition to company contributions it allows individual contributions. Individual contributions can be tax deferred (traditional IRA) or after tax (Roth IRA). I'm contemplating going Roth, based on the assumption that taxes are likely to increase in the future and my tax bracket post age 70 should be lower than it is now.
Has anyone else worked through this, found any good online calculators, or have any sage advice? Thanks!
A couple opinions/questions...
1. Never make isolated financial decisions. All of your money should be considered when making a decision on how to handle this piece. For example... How is your other money invested? What percentage of your aggregate net worth is in each type of account?
2. The money you amassed after decades in the corporate world is a key component in this decision.
3. Social Security may also be an important consideration.
4. If tax rates increase, then are you certain yours will decrease, from current rates, when you retire?
My point is there is a lot of different components to consider and an online calculator, which does not consider all the components, may generate an inappropriate response.
Inventing an idea out of thin air, but how about doing both - and alternating year over year?
Some totally unsubstantiated assumptions go into my idea:
1) You wrote IRA in your post, but I'm presuming you meant... "tax deferred (traditional 401K) or after tax (Roth 401K)".
2) your role in the business allows you to set your own compensation and then vary it each year
3) you can create a whopper of a company match (which nicely ducks taxation)
For example, let's say you currently live on $150K per year. In year one, pay yourself $275K, maximize your Traditional 401K (plus match) while deferring the taxes. For year two, pay yourself $25k, pay income taxes at the associated low marginal tax rate, and fully fund the year into a Roth 401K (plus match). Of course, in year two, you need to live off your savings.
Tada! Genius! And I expect somehow illegal - but I had fun thinking about it.
Thanks for the feedback. It's hard to convey just the right amount of detail on a forum like this. Jeffrey, I appreciate that one must consider the whole enchilada and not make isolated decisions. As it happens, most (75%) of existing retirement savings is in tax deferred accounts, so the Roth option got my attention, but I'm unsure if having this kind of balance in retirement savings is valuable. I'm pretty sure I can contribute to both trad and Roth (BlueTeuf, I did mean 401k not IRA) in a given year, so there's flexibility there. The solo 401k is nice: the company can contribute up to 25% of our "salary" as profit sharing (up to a limit) plus we can make individual contributions. And budworm, we're a piddly outfit at this point -- no company stock.
I will be eligible to collect a small pension from a former employer when I turn 65 in approximately 15 years. The pension is not adjusted for inflation, so I expect that it will be barely enough to cover a few minor monthly bills by 2035 and beyond. As a result, my wife and I are relying on our 401Ks and other investments - not the small pension - to support our retirement.
My former employer has given me the option to convert the pension into a lump sum which I can deposit into my 401K. Does anybody have any suggestions for the types of things I should consider when deciding whether to keep the pension or take the lump sum for my 401K?
For example, is there a rule of thumb which estimates the relative value of a pension and 401K at age 65? In other words, if my yearly pension in $X, approximately how much would I need to have in a 401K to generate approximately the same yearly income?
A couple of additional points:
- The offer is a lump sum of $8.13 for every $1 in year pension benefit. In other words, if my yearly pension benefit is $1000, then the lump sum offer would be for $8130.
- The lump sum letter mentions that the company “is considering purchasing an insured annuity to administer and pay your benefits in the future”. Would this have any impact on how much I should be concerned about the stability of the pension in the future? One of my fears about keeping the pension is that the pension fund somehow disappears and I don’t end up receiving the full value of the pension.
- I have been offered a lump sum in the past and have chosen to keep the pension in part because it provides a small bit of diversification vs my 401K.
IMO, it’s not prudent to publicly share the amount of personal information required to get an informed opinion. If you would like to send me a confidential PM, then I’d be glad to tell you what I would do in your situation. Free advice, worth every penny!
OTOH, if you would be more comfortable having others review my advice, then I’d ask personal questions and respond on this thread. Not my recommendation, but your choice.
Large scale layoffs continue:
Disney to lay off 28,000 employees as coronavirus slams theme park business
https://www.cnbc.com/2020/09/29/disn...ndroidappshare
KEY POINTS
- Disney will lay off 28,000 employees across its parks, experiences and consumer products segment.
- The company blamed prolonged closures and capacity limits at open parks for the layoffs.
- While Disney’s theme parks in Florida, Paris, Shanghai, Japan and Hong Kong have been able to reopen with limited capacity, both California theme parks
Conceptually, very interesting- “copytrading”.
https://www.bloomberg.com/news/artic...rket-investing
While I’ve not shared actual dollar amounts, shares or trade activity (which for me, is limited), it would be pretty neat to track financial progress against different investors and investment managent strategies directly.
The Ts&Cs behind this must be pretty fascinating to read, assuming there’s lots of investor assumes all risk and no liability to anyone you choose to follow/imitate.
I wonder what Motley Fool thinks of this as it is almost an unpaid(?) version of what they offer investors.
Interesting. Thanks for sharing. I’m not sure investing should be more “gamefied” than it is for the average person, particularly those that can’t limit their short term trading to discretionary funds. That said, I’d enjoy keeping an eye on this and potentially throwing a few bucks at it.
Sort of like twitch for investing?
I strongly prefer buying individual regional banks due to the very substantial differences in balance sheet compositions, revenue sources, operating expense management, interest rate risk, liquidity risk, etc. IMO, the difference in senior management competency and purpose is very substantial. It’s a very different world, than January 2020, and some banks can and will adjust much more quickly, efficiently, and effectively. For example, last week, I started buying shares in a regional bank well suited to earn in this almost zero interest rate environment.