Bichon Frise wrote:
are you sure we are talking about the same thing here? Since the discussion above was about eventually having to pay taxes, and we were discussing cashing in a 401k, my point is there is some value in the 401k growth, vs growth outside of the 401k, specifically, in a taxable account.
Yes, we're talking about the same thing. Assuming everything else was equal, there isn't any difference. i.e. assuming a 25% rate $1,000 pretax is $750 after tax. If it doubles, you have $2,000 in the pretax account and $1,500 in the after tax account. Pay the tax on the pretax account, and you are left with $1,500.
Now, of course, not everything is equal, the after tax account would still be subject to capital gains taxes, and if it is earning dividends or interest tax on those.
My original assertion, posed in the form a question, is there's value in the tax deferred growth over money invested in vehicles not offering that. Regardless of how you want to slice and dice it and based on the end result
, if you were to invest $10k today, do you agree or disagree that there is greater value in the growth of that $10k in tax deferred growth or being subject to taxes along the way (under current the current laws)? If you think they are the same or there is greater value to be subject to taxes along the way, I would be curious to what your thoughts are on the advantages of a 401k is vs a taxable account (if there are any)?
BTW, in the last 3 years, I have sold 2 homes and bought 2 homes. I have never paid any fees, commissions or taxes of any kind.
Your state/county/city doesn't have any transfer taxes? Or property taxes? Nor did you have to pay for title insurance for the buyer? No closing costs, appraisal fees, etc. on your loans (maybe you paid cash)? No fees for document preparation/processing? Must be nice. Pray tell, how did you accomplish that?
Of course I paid property taxes, as that is a tax one pays for owning a property, not a tax someone pays for making a transaction on a property. I paid no other taxes for selling or buying these homes. I didn't pay closing costs, title insurance, realtor fees, appraisals, surveys, fees to the title company etc. That isn't to say there weren't part of the transaction, just that I didn't pay them.