Posted 2/9/2019 20:27 (#7309950 - in reply to #7308709) Subject: RE: Investing
Open an account now. Put money in it. I would do a SEP if your farm is profitable. Best part about it is you get to deduct it from your taxes, both state and federal. So maybe save 40% right from the beginning. Best part is when you take it and if you never make the move out of IL, it is tax free income in IL. It gets better, lets say you invested outside of a SEP, then all gains that you realized would get taxed as they occur, like dividends and gains from actual sales. The earnings inside a SEP like an IRA do not get taxed until you take them out, and then again free from IL tax. Don't worry if IL decides to tax retirement income we will all move out. In real life I have been doing this since 1987, is has accrued at an average of over 10% per year and will be another 15 years until I have to take anything out at age 70.5. If you die it is a nice payment for your kids or wife since they only have to take out a small amount based on their life expectancy. You can put in 25% of your self employed earnings up to 55K each year. I think the stock market eventually corrects, however I have lost more in my history thinking that than if I would have just always stayed 100% invested and closed my eyes. Now where to invest. Many of those mutual funds have high fees. Make your life simple and just open an E-Trade (my favorite) or Ameritrade or some internet discount brokerage service and set up a SEP account if you qualify, and invest it in the SPY. It is an index fund of the S&P and runs at almost no cost. Believe me you will never miss the money on the farm, because you will make it work, and in the end you will have a really nice saving for your family. Remember you can still put the money on your balance sheet, so your equity may actually look better than those measly returns you get on farm ground, so just borrow the money for the farm ground, and fund a retirement account with something. It really is a good deal.