Poll

What baby step are you up to?

$1,000 Rainy day fund
Pay off all debt using the debt snowball
3 to 6 months of expenses in savings
Invest 15% of household income into Roth IRAs and pre-tax retirement (401k Etc.)
College /Simcha fund for children
Pay off home early (prepay mortgage)
Build wealth and give!

Author Topic: Dave Ramsey Plan  (Read 106405 times)

Offline zh cohen

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Re: Dave Ramsey Plan
« Reply #340 on: July 30, 2020, 01:18:41 PM »
I think it's fair to say @zh cohen is an intelligent person.

Thanks for the compliment

I think the problem is we never know beforehand how it (CC game) effects an individual.

Even someone who manages well for many years, can get in trouble when their life circumstances change (as was in @Yehuda57 and my case).

Offline Dan

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Re: Dave Ramsey Plan
« Reply #341 on: July 30, 2020, 01:21:05 PM »
I haven't been following this thread at all, but thanks for the tag and thanks for sharing @Yehuda57.

LMK if you want to write a post for DDMS of the steps you took to climb out of debt and what (if anything?) you could have done differently when falling into debt.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #342 on: July 30, 2020, 01:24:16 PM »
LMK if you want to write a post for DDMS of the steps you took to climb out of debt and what (if anything?) you could have done differently when falling into debt.
The pitfalls to look out for would be helpful.
Only on DDF does 24/6 mean 24/5/half/half

Online Yehuda57

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Re: Dave Ramsey Plan
« Reply #343 on: July 30, 2020, 02:01:11 PM »
If anything I said has come off as mocking or scolding I apologize in advance.
My beef is with the person (DR) and some of the financial part of his course, not any member taking his course. Your story and others will/would help.
I think the problem is we never know beforehand how it (CC game) effects an individual.

Great to see you posting again even if it is short lived.

I didn't have you in mind with the mocking and scolding, and it wasn't in this thread.

I did have you in mind with my comments about DR. I think your "beef" stems from a fundamental misunderstanding of it being an emotional/behavioral answer to what you see as a mathematical problem.

I haven't been following this thread at all, but thanks for the tag and thanks for sharing @Yehuda57.

LMK if you want to write a post for DDMS of the steps you took to climb out of debt and what (if anything?) you could have done differently when falling into debt.

I'll try put something together, bl"n.

One thing I think is commendable is that you have always posted warnings about the pitfalls of credit cards, even though it's something you make money off.

Offline Dan

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Re: Dave Ramsey Plan
« Reply #344 on: July 30, 2020, 02:11:08 PM »
One thing I think is commendable is that you have always posted warnings about the pitfalls of credit cards, even though it's something you make money off.
I never saw that as mutually exclusive.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline Joe4007

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Re: Dave Ramsey Plan
« Reply #345 on: August 02, 2020, 03:03:59 AM »
IRA limit increased to 6k, or 12k per couple.

Many people in this situation have access to a 401k, with a contribution limit of 19.5k. You can lower income by up to 31.5k, that should be more than enough to get off of programs.
CMIIW, but I believe NY State of Health uses MAGI which includes IRA contributions.

Offline gozalim

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Re: Dave Ramsey Plan
« Reply #346 on: August 02, 2020, 09:53:09 AM »
CMIIW, but I believe NY State of Health uses MAGI which includes IRA contributions.
IINM IRA (not Roth) deducts from MAGI

Offline avromie7

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Re: Dave Ramsey Plan
« Reply #347 on: August 02, 2020, 10:11:53 AM »
IINM IRA (not Roth) deducts from MAGI
I thought so too, but it looks like not. 401k deductions do lower MAGI.

Not all programs use MAGI, for example EITC is based on AGI. Health insurance tax credits are based on MAGI, but you don't take out IRA deductions.
I wonder what people who type "u" instead of "you" do with all their free time.

Online ExGingi

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Re: Dave Ramsey Plan
« Reply #348 on: August 02, 2020, 10:43:29 AM »
I thought so too, but it looks like not. 401k deductions do lower MAGI.

Not all programs use MAGI, for example EITC is based on AGI. Health insurance tax credits are based on MAGI, but you don't take out IRA deductions.

Based on https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/

IRA contributions do not get added back to AGI to arrive at MAGI for ACA.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Joe4007

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Re: Dave Ramsey Plan
« Reply #349 on: August 02, 2020, 10:57:49 AM »


Based on https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/

IRA contributions do not get added back to AGI to arrive at MAGI for ACA.

That seems to be a fairly basic description of MAGI. If you dig a little deeper, you get to https://www.healthcare.gov/reporting-deductions/ which suggests you do have to include IRA contributions as income.

Offline avromie7

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Re: Dave Ramsey Plan
« Reply #350 on: August 02, 2020, 11:07:21 AM »

That seems to be a fairly basic description of MAGI. If you dig a little deeper, you get to https://www.healthcare.gov/reporting-deductions/ which suggests you do have to include IRA contributions as income.
The healthcare.gov website is really confusing, I believe it's saying 2 things
1) Report IRA deductions
2) Don't report child or dependant care expenses.
I wonder what people who type "u" instead of "you" do with all their free time.

Offline gozalim

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Re: Dave Ramsey Plan
« Reply #351 on: August 02, 2020, 11:41:55 AM »
To simplify:
Which line in the tax return do they ask for?
And how does turbo tax compute that line ?
« Last Edit: August 02, 2020, 02:23:43 PM by gozalim »

Online ExGingi

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Re: Dave Ramsey Plan
« Reply #352 on: August 02, 2020, 01:52:51 PM »
The healthcare.gov website is really confusing, I believe it's saying 2 things
1) Report IRA deductions
2) Don't report child or dependant care expenses.

It looks somewhat confusing when viewing on a mobile browser, but looking at it on a desktop browser there is no confusion whatsoever in my mind.

And

Based on https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/

IRA contributions do not get added back to AGI to arrive at MAGI for ACA.

is accurate.

https://www.healthcare.gov/reporting-deductions/



Also see:
http://laborcenter.berkeley.edu/pdf/2019/magi.pdf (attached to this post)
« Last Edit: August 02, 2020, 01:56:19 PM by ExGingi »
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Joe4007

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Re: Dave Ramsey Plan
« Reply #353 on: August 02, 2020, 06:28:57 PM »
It looks somewhat confusing when viewing on a mobile browser, but looking at it on a desktop browser there is no confusion whatsoever in my mind.

And

is accurate.

https://www.healthcare.gov/reporting-deductions/



Also see:
http://laborcenter.berkeley.edu/pdf/2019/magi.pdf (attached to this post)
According to what you highlighted, you can only deduct IRA contributions if you don't have a work retirement account, so again no 401k AND IRA.

Online ExGingi

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Re: Dave Ramsey Plan
« Reply #354 on: August 02, 2020, 06:36:34 PM »
According to what you highlighted, you can only deduct IRA contributions if you don't have a work retirement account, so again no 401k AND IRA.

That's pretty obvious. That is also how it works on the taxation end.
I've been waiting over 5 years with bated breath for someone to say that!
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Online ExGingi

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Re: Dave Ramsey Plan
« Reply #355 on: August 02, 2020, 06:41:32 PM »
According to what you highlighted, you can only deduct IRA contributions if you don't have a work retirement account, so again no 401k AND IRA.

I just now went back to the post that triggered the current discussion, and it is obviously mistaken.

IRA limit increased to 6k, or 12k per couple.

Many people in this situation have access to a 401k, with a contribution limit of 19.5k. You can lower income by up to 31.5k, that should be more than enough to get off of programs.

If contributing 19.5k to a 401k one cannot contribute an additional deductible 12k per couple into IRAs, except if total household income for married filing jointly is under $104,000
« Last Edit: August 02, 2020, 06:56:48 PM by ExGingi »
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Joe4007

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Re: Dave Ramsey Plan
« Reply #356 on: August 02, 2020, 06:42:07 PM »
That's pretty obvious. That is also how it works on the taxation end.
That depends on your income. You could do both up to a certain threshold.

Offline avromie7

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Re: Dave Ramsey Plan
« Reply #357 on: August 02, 2020, 06:44:54 PM »
I just now went back to the post that triggered the current discussion, and it is obviously mistaken.

If contributing 19.5k to a 401k one cannot contribute an additional deductible 12k per couple into IRAs.
You're correct, I made a mistake. The second spouse can still contribute $6k to an IRA.
I wonder what people who type "u" instead of "you" do with all their free time.

Online ExGingi

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Re: Dave Ramsey Plan
« Reply #358 on: August 02, 2020, 06:45:24 PM »
That depends on your income. You could do both up to a certain threshold.

Not as far as I can recall, unless things changed.

Source?
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Joe4007

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Re: Dave Ramsey Plan
« Reply #359 on: August 02, 2020, 06:46:20 PM »