Dividends

[riser]

http://www.smartmoney.com/invest/strategies/preparing-for-taxes-on-dividends-to-increase-1332723167618/?mg=com-sm

Well, there goes a big chunk of making money work for you. I'll have to look forward to see what/how Dave Ramsey advises on how to handle this change. With such a high tax on it, is the risk still worth it or should money be invested elsewhere or in other sources to maintain a revenue stream?

 

[riser]

My dividend tax rate will go from 15% to 36% if not extended. This puts a huge dent into my financial retirement should we see the higher tax rate actually hit. A quick check on my 401k site shows that it adds many more years before I can retire where I want, or I would need to start investing more into an IRA/Roth IRA now to offset the decreased income. Ultimately, this means less money in my hands today so I can pay for my retirement later. This needs to be extended, otherwise middle class people will have to put retirement out further, or have less disposable income today to supplement their retirement plan.

 

[johnsonma]

My dividend tax rate will go from 15% to 36% if not extended. This puts a huge dent into my financial retirement should we see the higher tax rate actually hit. A quick check on my 401k site shows that it adds many more years before I can retire where I want, or I would need to start investing more into an IRA/Roth IRA now to offset the decreased income. Ultimately, this means less money in my hands today so I can pay for my retirement later. This needs to be extended, otherwise middle class people will have to put retirement out further, or have less disposable income today to supplement their retirement plan.

Damn riser, you make 86k-179k a year and your having trouble planning for retirement? Must of given your wife your credit card too many times. I do think that 36% is too high though, good luck getting congress to do anything but lay an egg on this one though.

If the hike did take effect though I would think that there would be a transition to growth stocks and maybe even a trend of discontinuing dividends to provide value for stock holders through self investment and growth. Maybe companies would also raise their dividends to try and mitigate some of the decreased value as well.

I will admit that this affects you a lot more than me, however my immediate family has been making a killing in the stock market since it bottomed out. Something like a yearly average of over 100% return on investment. What did they do with it? Well their building a new house that will probably decrease in value the second its completed.