One Wrong Fact
Aug. 16th, 2013 05:13 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
livingdebI really hate when a so-called expert doesn't get one of the big, important facts right in a presentation.
Last week, some guy told an audience that you end up with a lot more money in the end by contributing after-tax money rather than pre-tax money to a retirement account (i.e., you make more money with an IRA than a Roth IRA). I had done the calculations before and knew this was wrong (based on the assumptions he was making), but everything else he had said made sense and he had a graph and I started doubting myself. So I did the calculations again and no, it's the same either way (assuming you lose the same money from your paycheck doing it and tax rates are constant).
This week some guy told an audience that your insurance's out-of-pocket maximum does not include the deductible. This was not what I had thought, so I looked it up when I got home. In all sources I could find where the answer was clear except one, they said the deductible was included. That one source said that (like co-pays) sometimes the deductible is included and sometimes it is not. (FYI, the co-pays used to count but are less and less likely to, co-insurance counts, and premiums don't count.) I don't feel I can trust anything he said that I didn't already know now.
I suppose I should never trust a single source completely anyway, and these guys have actually done me a favor by reminding me of that. Still, I wish I could have learned all the stuff I heard the easy way.
Quote of the Day - 'I think Freud got it wrong. He saw women staring longingly at men's pants and didn't realize we were thinking, "Dang! I wish *I* had pockets!"' - Miser Mom
Research Article of the Day - ABC News's Tidy or Messy Environment Can Impact Decisions and Behavior, Study Says - A study implies that an orderly environment makes you more likely to do the right thing, more likely to be generous, and less likely to be creative than a messy environment. The cool thing about the experiment is they didn't just look at people's natural environments--they stuck people into random environments for the tests.
Since my superpower is rationalization, I have a guess on why this is true or rather how this could be true. My guess is that being in a neat environment feels like everything is going well and you have time to do things right. And being in a messy environment feels like doing things the normal way obviously isn't working, so you better try something else.
Disaster Article of the Day - the Orlando Sentinel's Disney-area resort collapses into 100-feet wide sinkhole - The obvious amazing thing in this story is that half a building collapsed into a pile of rubble in a matter of minutes. But to me, the most amazing thing is that someone was able to make a guess at what the weird cracking sounds might be in time to get everyone out of the building--there were no deaths and no injuries. How do you guess a thing like that? (Yes, I also was amazed at how many people got out of the twin towers.)
Video of the Day - Upworthy's The Most Honest And Heartbreaking Reason To Leave Your Front Door Unlocked I've Ever Heard - A poem that can teach you more about what it's like to have severe obsessive-compulsive disorder and even hints on dealing with this in your loved ones. Also good if you need to cry for some reason.
Last week, some guy told an audience that you end up with a lot more money in the end by contributing after-tax money rather than pre-tax money to a retirement account (i.e., you make more money with an IRA than a Roth IRA). I had done the calculations before and knew this was wrong (based on the assumptions he was making), but everything else he had said made sense and he had a graph and I started doubting myself. So I did the calculations again and no, it's the same either way (assuming you lose the same money from your paycheck doing it and tax rates are constant).
This week some guy told an audience that your insurance's out-of-pocket maximum does not include the deductible. This was not what I had thought, so I looked it up when I got home. In all sources I could find where the answer was clear except one, they said the deductible was included. That one source said that (like co-pays) sometimes the deductible is included and sometimes it is not. (FYI, the co-pays used to count but are less and less likely to, co-insurance counts, and premiums don't count.) I don't feel I can trust anything he said that I didn't already know now.
I suppose I should never trust a single source completely anyway, and these guys have actually done me a favor by reminding me of that. Still, I wish I could have learned all the stuff I heard the easy way.
Quote of the Day - 'I think Freud got it wrong. He saw women staring longingly at men's pants and didn't realize we were thinking, "Dang! I wish *I* had pockets!"' - Miser Mom
Research Article of the Day - ABC News's Tidy or Messy Environment Can Impact Decisions and Behavior, Study Says - A study implies that an orderly environment makes you more likely to do the right thing, more likely to be generous, and less likely to be creative than a messy environment. The cool thing about the experiment is they didn't just look at people's natural environments--they stuck people into random environments for the tests.
Since my superpower is rationalization, I have a guess on why this is true or rather how this could be true. My guess is that being in a neat environment feels like everything is going well and you have time to do things right. And being in a messy environment feels like doing things the normal way obviously isn't working, so you better try something else.
Disaster Article of the Day - the Orlando Sentinel's Disney-area resort collapses into 100-feet wide sinkhole - The obvious amazing thing in this story is that half a building collapsed into a pile of rubble in a matter of minutes. But to me, the most amazing thing is that someone was able to make a guess at what the weird cracking sounds might be in time to get everyone out of the building--there were no deaths and no injuries. How do you guess a thing like that? (Yes, I also was amazed at how many people got out of the twin towers.)
Video of the Day - Upworthy's The Most Honest And Heartbreaking Reason To Leave Your Front Door Unlocked I've Ever Heard - A poem that can teach you more about what it's like to have severe obsessive-compulsive disorder and even hints on dealing with this in your loved ones. Also good if you need to cry for some reason.
no subject
on 2013-08-21 02:23 am (UTC)-N&M
no subject
on 2013-08-21 03:58 am (UTC)I was also surprised when I heard that people feared that. I don't. It's quite possible there will come a day when you can no longer add money to them. But I don't see them being double-taxed directly. Instead they can just make a national sales tax to nab retiree money--regardless of what kind of IRA (or other source) that money comes from. They might even reduce income tax (at least at first) to make that pill go down more easily.
I think the only real difference is that if you're just going to max out your IRA, the Roth lets you put more money in. They both technically allow $5500/year, but that's after-tax money for the Roth. Another way to look at it is that you lose more from your paycheck contributing the max to the Roth than to the traditional.
Well, the other difference, obviously, is if your marginal tax rate changes. Mine is 15%--I don't see it going anywhere but up. I used to hope I would make more one day--I no longer have that hope. I might still marry someone richer. My pension will be taxed but will not be so low that it will drop me into a lower bracket. And tax rates themselves are pretty dang low compared to the 1970s--and with us refusing to let in massive immigrants to get jobs and pay taxes, because instead we are tossing our jobs overseas, it's quite easy to imagine tax rates going up.