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When in doubt, assume poverty
Sep. 13th, 2014 12:20 pmSomeone was telling me he was having a hard time deciding on when to roll over his 401K into a Roth IRA. He's at a crossroads in his life and really has no idea what his income will be like next year. It could be much, much lower than this year (thus, the perfect time to roll over the funds and pay very little in taxes) or much, much higher (putting him in a high tax bracket).
I recommended doing what he'd do if he knew he'd be poor next year: wait until next year to rollover the account. If he's wrong, he'll be rich enough to afford the cost of that mistake.
There are probably a lot of other bad financial decisions that are easier to recover from if you've assumed too much future poverty rather than too much future wealth.
**
In other news, it went from being horribly hot to uncomfortably chilly (if you're wearing shorts or hanging out in the pool) in ONE DAY. Directly from hellfires to autumn with no good summer in between. Fortunately, I think we've got some good summer days in the future.
I recommended doing what he'd do if he knew he'd be poor next year: wait until next year to rollover the account. If he's wrong, he'll be rich enough to afford the cost of that mistake.
There are probably a lot of other bad financial decisions that are easier to recover from if you've assumed too much future poverty rather than too much future wealth.
**
In other news, it went from being horribly hot to uncomfortably chilly (if you're wearing shorts or hanging out in the pool) in ONE DAY. Directly from hellfires to autumn with no good summer in between. Fortunately, I think we've got some good summer days in the future.