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CHK is going back to 2006 and going all in on gas and getting out of liquids. If your company hasn’t stated the same I wouldn’t be as concerned.
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Do you FIRE? Financial Independence, Retire Early
Archer replied to UTGrad98's topic in 6th Street Journal
This is pretty much me minus the kids . Other than the early mornings the job isn’t too bad so I’ll try to get another 5-10 years out of it and really get a good safety cushion built up. I have started spending a little more freely with a good nest egg in place. -
Not 100% this but this. You are correct in the base assumption that withdrawals at full marginal rate should be equivalent What is different is the first $647,850 you withdrew for the year will be taxed at 10-35% and not 37%. The income deductions for a pretax 401k removes income from your top marginal tax bracket, when you are withdrawing money you are starting to pay at the lowest marginal bracket Big pension or SS checks can change the decisions on pre tax or Roth because it will give you a floor of which tax bracket you start in and the rates that your pretax will be taxed at. I haven’t done the math but I could see where someone with a really good pension (say 80% income replacement) would want to do Roth because they will be in or very close to the same tax brackets from the pension incomes.
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So full disclosure I am not a financial pro, just a guy who likes personal finance and hopes to retire someday so everything I say could be full of shit… I would argue it all still comes down to tax brackets; I’ll show my work… I’ll use 2022/2023 401K and taxes Let’s assume a MFJ couple earning $200k per year which puts them in the 32% marginal tax bracket. They invest $22,500 in their 401k earning 8% yearly for 20 years they will have $104,872. That $22,500 has 32% taken out of it before it can be invested as a Roth which leaves $15,300 to invest. Again growing 8% for 20 years the Roth is now $71,313. In 20 years the tax man comes due. Let’s assume they withdraw the entire amount to live on that year. The Roth is easy its taxes free so they have the full $71,313. The pretax 401k isn’t so lucky, using 2022 taxes they will owe $19,004 in income taxes. Taking these taxes out the 401k is left at $85,868 approximately 20% higher than the Roth. If this couple isn’t high earners but are just super savers and are in the 22% bracket the Roth ends up worth $81,800 so approaching the 401k. The tiered tax brackets really help the 401k because you are only taxed 12% on the first $40k coming out of the account where your investments were assumed to go in at your full marginal rate.
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Once you are past the company match 401k contributions are a bet on your future tax rates and your ability to be a diligent saver. If you expect to be in a lower tax bracket in retirement (most people are) put everything into your 401k now and pay lower taxes on it in the future. If you are not disciplined in moving money to investments investing extra in your 401k forces you to save. If you expect a big inheritance or other income that will increase your tax rate in the future or just expect tax rates to go up (they will in 2026) investing in a Roth or normal Brokerage account could be better than your 401k.
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Yup. The IRS considers the funds blended and does not recognize that you can move just the $6,000 after tax that you just contributed. You will owe taxes on whatever percentage of pretax all of your IRAs represent. All of your IRA accounts are considered one big account by the IRS even if they are at different brokerages. If you have the ability to transfer from an IRA into your 401k that is one way to get rid of the old pretax funds so that you can transfer to a Roth without additional taxes.
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Since you are fully funding your 401k I assume you do, but do you exceed the Roth income limits where you have to use the backdoor Roth? One downside to the backdoor is the pro rata rule. Since you mentioned an existing IRA you will have to pay proportional taxes on the funds you move to your Roth. Let’s say you have $54,000 pretax in your IRA and invest another $6,000 after tax and move the $6,000 to a Roth. You’ll have to pay taxes on $5,400 on the conversion as pretax funds represent 90% of your total IRA balance.
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5.5 Magnitude earthquake in Pecos just now
Archer replied to High Plains Drifter's topic in Daily Texan
There was a big 2016 earthquake in Pawnee, Ok one company settled earlier this year for damages and several others are still being sued. https://www.stwnewspress.com/news/oil-company-settles-class-action-suit-stemming-from-2016-pawnee-earthquake/article_bad03f7e-11e8-11ed-8c55-8ba9de8a1986.html -
Why is Fogel mentioned so rarely in these discussions? It’s been Griner and Whelan in the headlines.
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5.5 Magnitude earthquake in Pecos just now
Archer replied to High Plains Drifter's topic in Daily Texan
Tough to discuss technical subjects with delayed text communications, plus you are delaying with a glorified caveman. IF I understand correctly: You are correct if you are producing the same reservoir fraced and unfraced you should expect to see the same water cut after the frac load is recovered. So both wells will give you X barrels of water per barrel of oil. This ratio should remain fairly constant between the wells. The difference is the fraced well will be able to produce multiple times more oil and thus more water. The frac doesn’t change what is in the reservoir just the volumes of it that can be delivered to the surface. -
5.5 Magnitude earthquake in Pecos just now
Archer replied to High Plains Drifter's topic in Daily Texan
I’ve answered it a couple times directly and then expanded on it why it’s necessary, I wasn’t trying dance around any question Again The purpose of fracing is to produce more fluids. You can not produce just more oil or gas you get everything in one big commingled mess. By producing more oil you will produce more water. As I mentioned up thread you will produce anywhere from 1 barrel of water per barrel of oil to 9 barrels of water per barrel of oil. If a frac increases your oil production from 500 barrels per day to 1,000 barrels per day you will also double your water production.
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