Bullitt Mustang - $50k - How the Duck do people afford crap?

[DoubleApex]

Ummm.... some of you are INCREDIBLY misinformed about how tax brackets work...

For those saying pay more into 401k to drop tax brackets, I hope you’re aware that you hit tax brackets AS YOU EARN. This means you pay 10% until you earn 15k, 20% until 50k, 25% until 75k, etc (just throwing out numbers for example. Putting money into 401k just takes away from your take home (pretax if non IRA) and can cause you to not hit a higher tax bracket. If you do hit a higher tax bracket, it’s not like you’re taxed X% higher because you hit a certain threshold.... you’re only taxed that higher rate on earnings once you hit that threshold....

Also I hope someone said this earlier, but I CBF’d reading all these replies.

The goal is to pay less tax now to be in a lower tax bracket in retirement. Say you make $100k now and you only need to take home $40k a year in retirement. You won't be paying as much tax on that money in retirement as long as the taxes don't change dramatically by the time we do retire.

 

[Blown 89]

If you look at the average home price vs the average income it's completely out of whack. 8 year car loans, 30 year mortgages, rising credit card debt, shrinking retirement.... that's how people can afford it.

In 2013 I looked at buying a $125k house. That house just sold for $390k two weeks ago. Groceries price hikes are a lot higher than inflation, so are the increase in cars. The 2018 Mustang GT is $10k higher than it should be based on inflation. Gas, electricity, health care.....all have exceeded inflation. Name one essential living cost and it's exceeded inflation, most often times by a very large amount. It's a fact, we are headed for a world of hurt soon.

 

[Hunter98SVT]

BINGO!

I know people with my income with brand new cars and a modded 03 Cobra or newer 5.0 with a whipple, etc.

Meanwhile I'm saving as much as possible driving a 16 year old civic and wrenching on a foxbody.

Foxbody FTW!

I have friends that make less than me with kids and they buy new cars/pick-ups every two years.

Before my F-150 I had an 03 Ranger with 412,xxx miles on it. I'd rather have no debt than a new vehicle.

 

[gimmie11s]

Ummm.... some of you are INCREDIBLY misinformed about how tax brackets work...

For those saying pay more into 401k to drop tax brackets, I hope you’re aware that you hit tax brackets AS YOU EARN. This means you pay 10% until you earn 15k, 20% until 50k, 25% until 75k, etc (just throwing out numbers for example. Putting money into 401k just takes away from your take home (pretax if non IRA) and can cause you to not hit a higher tax bracket. If you do hit a higher tax bracket, it’s not like you’re taxed X% higher because you hit a certain threshold.... you’re only taxed that higher rate on earnings once you hit that threshold....

Also I hope someone said this earlier, but I CBF’d reading all these replies.

Right.

And how is that any different than what anyone has said thus far?

Eager to hear...

 

[BladeX10]

Just a matter of time before we start seeing 10-15 year auto loans. Thats the direction we are heading. We live in a debt slave world now. Hell i went to home depot today and seen all these "Finance this washing machine/Refrigerator/Shed $99 down today" signs.

I just cant do it. I refuse to live like that.

 

[_Snake_]

Ummm.... some of you are INCREDIBLY misinformed about how tax brackets work...

For those saying pay more into 401k to drop tax brackets, I hope you’re aware that you hit tax brackets AS YOU EARN. This means you pay 10% until you earn 15k, 20% until 50k, 25% until 75k, etc (just throwing out numbers for example. Putting money into 401k just takes away from your take home (pretax if non IRA) and can cause you to not hit a higher tax bracket. If you do hit a higher tax bracket, it’s not like you’re taxed X% higher because you hit a certain threshold.... you’re only taxed that higher rate on earnings once you hit that threshold....

Also I hope someone said this earlier, but I CBF’d reading all these replies.

The goal is to pay less tax now to be in a lower tax bracket in retirement. Say you make $100k now and you only need to take home $40k a year in retirement. You won't be paying as much tax on that money in retirement as long as the taxes don't change dramatically by the time we do retire.

The goal is to contribute as much pre-tax money to your 401k and whatever else in the hopes it drops your taxable income to a lower bracket. Then your take-home pay is impacted less.

For example, I recently increased my 401k contributions by $250/month. My taxable income dropped to the next bracket and my take home pay was only $100 less each month. That's $150 free money.

Right.

And how is that any different than what anyone has said thus far?

Eager to hear...

I had the same thoughts.

 

[mcaligiuri]

Also the rising car prices besides inflation is due to the technological advancements that the government mandates. A car in 96 didn’t have blind spot monitoring, tpms systems, black box monitoring. These things costs a lot and the car companies aren’t going to eat the cost so it goes to the consumer. Last I heard they wanted to make backup cameras mandatory in some vehicles. That’s an easy $2000 option when you factor in the screen and the camera. So that stuff has an effect on price as well.

 

[ATX5.0]

I’m poor.. I drive my paid off 6yr old 5.0 and a galant wife drives until we save enough for a new vehicle. We try to put at least half down on vehicles. A lot of people really do over extend on their vehicle purchases, it’s not even funny. I work in the banking industry and see it All too often.

 

[Silverstrike]

Also the rising car prices besides inflation is due to the technological advancements that the government mandates. A car in 96 didn’t have blind spot monitoring, tpms systems, black box monitoring. These things costs a lot and the car companies aren’t going to eat the cost so it goes to the consumer. Last I heard they wanted to make backup cameras mandatory in some vehicles. That’s an easy $2000 option when you factor in the screen and the camera. So that stuff has an effect on price as well.

Hate to tell you backup cameras are mandatory for all new 2018+ US vehicles. But yeah I think you might actually start seeing companies start making just vehicles with the minimum required systems, instead of the load it to the gills so as to get the max profit out of them like today, as people will not be able to easily afford it.

 

[jmsa540]

The goal is to pay less tax now to be in a lower tax bracket in retirement. Say you make $100k now and you only need to take home $40k a year in retirement. You won't be paying as much tax on that money in retirement as long as the taxes don't change dramatically by the time we do retire.

Exactly!

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[JJackson515]

You mod a leased vehicle?

My truck is leased. my 18' mustang has a loan out on it, but will be paid off by the end of the year. this is what is the business mod money go towards.

 

[jeffh81]

 

[03cobra#694]

Stop bypassing the profanity filter damn it. I’m going full retard on this again.

 

[Twisted2v]

I bought a new ecoboost mustang (A plan and 5k rebate) because my '00 Gt had repairs that were more expensive than new car payments.

 

[Coiled03]

The goal is to pay less tax now to be in a lower tax bracket in retirement. Say you make $100k now and you only need to take home $40k a year in retirement. You won't be paying as much tax on that money in retirement as long as the taxes don't change dramatically by the time we do retire.

The problem is, I don't think there's any question taxes are going to change dramatically, and not for the better. It's just a question of when, not if. I'd estimate the change will come the next time a Democratic president is in office.

 

[coposrv]

Ummm.... some of you are INCREDIBLY misinformed about how tax brackets work...

For those saying pay more into 401k to drop tax brackets, I hope you’re aware that you hit tax brackets AS YOU EARN. This means you pay 10% until you earn 15k, 20% until 50k, 25% until 75k, etc (just throwing out numbers for example. Putting money into 401k just takes away from your take home (pretax if non IRA) and can cause you to not hit a higher tax bracket. If you do hit a higher tax bracket, it’s not like you’re taxed X% higher because you hit a certain threshold.... you’re only taxed that higher rate on earnings once you hit that threshold....

Also I hope someone said this earlier, but I CBF’d reading all these replies.

So many people I know don’t understand this concept. I’ve had guys constantly decline OT because “it puts me in another bracket”.


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[Bdubbs]

Leasing a vehicle is a ridiculous idea. You are throwing money away. There is no advantage that benefits the " long term renter".

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Leasing a vehicle has it's place. My wife is leasing a 2018 explorer. Buying new isn't good for her, she gets bored with vehicles after 2-3 years. She would take a bigger hit buying new and trading it in every few years. Plus leasing you always have full warranty. Not having warranty alone can add up.

It's not for everyone, but I'm considering it on a f150. I bought a 2003 one owner f150 about 18 months ago. It's nickel and dime we quite a bit. Only has 44k miles on it now.

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[CompOrange04GT]

So many people I know don’t understand this concept. I’ve had guys constantly decline OT because “it puts me in another bracket”.


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Wait it doesnt? Again I'm clueless on this stuff... But over the last couple months I Was averaging 160 hours every 2 weeks.. and I was told with that much OT I go into another bracket

 

[Coiled03]

Wait it doesnt? Again I'm clueless on this stuff... But over the last couple months I Was averaging 160 hours every 2 weeks.. and I was told with that much OT I go into another bracket

It may or may not. The point is, you only get taxed at the higher rate on the amount that's above the threshold. For example, if the tax rate were to go from 24% to 25% at 25K, and you make 26K, you'd pay 25% on 1K dollars of you income. That's just making up numbers, but it illustrates the point.

 

[CompOrange04GT]

It may or may not. The point is, you only get taxed at the higher rate on the amount that's above the threshold. For example, if the tax rate were to go from 24% to 25% at 25K, and you make 26K, you'd pay 25% on 1K dollars of you income. That's just making up numbers, but it illustrates the point.

I kind of get what you're saying..

So if say.. someone made 95k, and paid say 30%, and worked a lot of overtime and say like 100k pushed it up to 35%.. then on the over time that pushed them over is where they would pay 35% instead of 30% on the entire gross check?