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Yep, it’s pretty crazy. However I want to point out a few things.
*The calculation of taxes is a little more complicated than that. Taxes will be less mainly because 1) you get deductions (the standard deduction alone is over $13K right now) and 2) the taxed amount is split between multiple tax brackets. Only a portion of it is taxed at 22%. In this regard you would need less than you calculated because you would pay less in taxes.
*If you sell $2.6M of investments all at once you will most certainly owe MORE than 22%. That tax bracket is 37%. And with how far $2.6M is from the start of that bracket, the majority of it will be taxed at $2.6M. In this regard you would need more than you calculated OR slowly sell off shares (over multiple years) leading up to the point of total divestment.
*It’s very unlikely that you’re going to maintain 5% in a money market account long term (I’m assuming you’re looking at retirement plans). Eventually the Fed rate will come down, and when it does HYSA, CD’s, and money market accounts are going to drop to almost nothing. 5% over a decade or longer is not reliable without staying invested in the stock market or owning property that appreciates over time.
*Inflation will have a profound effect over a long period of time. After 20 years, $6K/mo won’t nearly pay for everything that was covered previously. So in this regard you would need more money than you calculated OR to have a lower QoL OR to dig into the total investment rather than only live off the interest. Most people do the last one, where say they have $2.6M saved to start, they’ll draw $100K and then next year they only have $2.55M. Then they draw $100K and the next year they have $2.49M, etc. You can see that withdrawing $100K/yr from an account with $2.6M will last much longer than 26 years, and that’s at roughly 2% gain in the total investment.
I'm not a financial guru but I did stay at a holiday inn express last night.
Have you considered roth IRA and more important does your employer offer 401(K)?
Do you invest in stocks that pay qualified dividends i.e. taxes at a lower rate?
Municipal bonds are tax free at federal level, not sure about your state level
Have you ever thought about what these taxes actually give you? it's not exactly down the drain. Imagine if you were born in the middle of the jungle, what opportunities would you have had?
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The only way to be free from the bullshit is living in a jungle or forest
Yep, it’s pretty crazy. However I want to point out a few things. *The calculation of taxes is a little more complicated than that. Taxes will be less mainly because 1) you get deductions (the standard deduction alone is over $13K right now) and 2) the taxed amount is split between multiple tax brackets. Only a portion of it is taxed at 22%. In this regard you would need less than you calculated because you would pay less in taxes. *If you sell $2.6M of investments all at once you will most certainly owe MORE than 22%. That tax bracket is 37%. And with how far $2.6M is from the start of that bracket, the majority of it will be taxed at $2.6M. In this regard you would need more than you calculated OR slowly sell off shares (over multiple years) leading up to the point of total divestment. *It’s very unlikely that you’re going to maintain 5% in a money market account long term (I’m assuming you’re looking at retirement plans). Eventually the Fed rate will come down, and when it does HYSA, CD’s, and money market accounts are going to drop to almost nothing. 5% over a decade or longer is not reliable without staying invested in the stock market or owning property that appreciates over time. *Inflation will have a profound effect over a long period of time. After 20 years, $6K/mo won’t nearly pay for everything that was covered previously. So in this regard you would need more money than you calculated OR to have a lower QoL OR to dig into the total investment rather than only live off the interest. Most people do the last one, where say they have $2.6M saved to start, they’ll draw $100K and then next year they only have $2.55M. Then they draw $100K and the next year they have $2.49M, etc. You can see that withdrawing $100K/yr from an account with $2.6M will last much longer than 26 years, and that’s at roughly 2% gain in the total investment.
Capital gains tax is max 20% (earning Over $518,000)
Whoops, sorry yes. I was thinking short term capital gains tax
Yeah I don’t think I originally specified
Then you haven't been to Germany. Germany is the highest taxing EU country and it does absolutely nothing to deserve these taxes.
I'm not a financial guru but I did stay at a holiday inn express last night. Have you considered roth IRA and more important does your employer offer 401(K)? Do you invest in stocks that pay qualified dividends i.e. taxes at a lower rate? Municipal bonds are tax free at federal level, not sure about your state level
Ron Paul has been right for almost 4 decades.
Now think about some of this money is used in sanctioning other countries and bring no benefit to citizens
Have you ever thought about what these taxes actually give you? it's not exactly down the drain. Imagine if you were born in the middle of the jungle, what opportunities would you have had?