Mutual fund switching can create short-term capital gains.
Usually, an investment start up account is nonqualified funds. This
means that all net gains realized each year will show up in
your tax calculations. While this slows the net growth
rate from the table below you can still see the advantage over
buy and hold or asset allocation returns. Furthermore,
with the annual use of a retirement plans like 401K and especially
the ROTH IRA nonqualified investment monies can be converted
to tax advantaged on a yearly basis. The masking of yearly
gains makes tax-deferred accounts the ideal candidate for the
Guerilla Tactics program.
As of the end of 1999 the tax law allows long-term gains
be tax at a maximum rate of 20%. Short-term gains are
tax at ordinary income rates and could be taxed somewhere between
20 and 45% of adjusted growth income.
Click here to see how to get One Million even after taxes:
Here the table shows the accumulation at 20%. Even after
paying your with short-term capital gains you can have your
million within 25 years. Furthermore, if the market crashes
the year you retire you’ll know how to protect it.
Year |
Deposit |
Non
Ira 20% Growth |
Taxes
@ 30% |
Non-Roth
Net after tax |
To
Roth Ira |
Roth
IRA 20% Growth |
Roth
End of Year Value |
Combined
value |
1 |
10,000 |
2,000 |
-600 |
11,400 |
2,000 |
400 |
2,400 |
13,800 |
2 |
10,000 |
4,280 |
-1,284 |
24,396 |
2,000 |
880 |
5,280 |
29,676 |
3 |
10,000 |
6,879 |
-2,064 |
39,211 |
2,000 |
1,456 |
8,736 |
47,947 |
4 |
10,000 |
9,842 |
-2,953 |
56,101 |
2,000 |
2,147 |
12,883 |
68,984 |
5 |
10,000 |
13,220 |
-3,966 |
75,355 |
2,000 |
2,977 |
17,860 |
93,215 |
6 |
|
15,071 |
-4,521 |
85,905 |
2,000 |
3,972 |
23,832 |
109,737 |
7 |
|
17,181 |
-5,154 |
97,932 |
2,000 |
5,166 |
30,998 |
128,930 |
8 |
|
19,586 |
-5,876 |
111,642 |
2,000 |
6,600 |
39,598 |
151,240 |
9 |
|
22,328 |
-6,699 |
127,272 |
2,000 |
8,320 |
49,917 |
177,189 |
10 |
|
25,454 |
-7,636 |
145,090 |
2,000 |
10,383 |
62,301 |
207,391 |
11 |
|
29,018 |
-8,705 |
165,403 |
2,000 |
12,860 |
77,161 |
242,564 |
12 |
|
33,081 |
-9,924 |
188,559 |
2,000 |
15,832 |
94,993 |
283,552 |
13 |
|
37,712 |
-11,314 |
214,957 |
2,000 |
19,399 |
116,392 |
331,349 |
14 |
|
42,991 |
-12,897 |
245,051 |
2,000 |
23,678 |
142,070 |
387,121 |
15 |
|
49,010 |
-14,703 |
279,358 |
2,000 |
28,814 |
172,884 |
452,243 |
16 |
|
55,872 |
-16,762 |
318,469 |
2,000 |
34,977 |
209,861 |
528,330 |
17 |
|
63,694 |
-19,108 |
363,054 |
2,000 |
42,372 |
254,233 |
617,287 |
18 |
|
72,611 |
-21,783 |
413,882 |
2,000 |
51,247 |
307,480 |
721,362 |
19 |
|
82,776 |
-24,833 |
471,825 |
2,000 |
61,896 |
371,376 |
843,201 |
20 |
|
94,365 |
-28,310 |
537,881 |
2,000 |
74,675 |
448,051 |
985,932 |
21 |
|
107,576 |
-32,273 |
613,184 |
2,000 |
90,010 |
540,061 |
1,153,245 |
22 |
|
122,637 |
-36,791 |
699,030 |
2,000 |
108,412 |
650,474 |
1,349,503 |
23 |
|
139,806 |
-41,942 |
796,894 |
2,000 |
130,495 |
782,968 |
1,579,862 |
24 |
|
159,379 |
-47,814 |
908,459 |
2,000 |
156,994 |
941,962 |
1,850,421 |
25 |
|
181,692 |
-54,508 |
1,035,643 |
2,000 |
188,792 |
1,132,755 |
2,168,398 |
|
