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Re: maxing a 401k
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Your 15% capital gains will be taxed every year, preventing you from reinvesting this money, which would have worked to compound a lot over 40 years. [/ QUOTE ] No, it's only applied when you sell the stocks. Only realized capital gains are taxed, not unrealized/paper gains. Also, it's normally a bad idea to try and predict the future, but the odds of future capital gains rates increasing is very high IMO. Democrats have about a 99% (JK, but it's very high) chance of controlling WH & Congress in 2009 and increasing the capital gains rates is going to be one of the first ways they look to raise revenue. Note: I am not making a political statement in favor or against, just sayin that 15% is a very low rate on gains historically and a regression to the mean seems likely. Something like 20% or 25% but that's just a guess. |
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