IRA Help for a Professional Poker Player

[LearnedfromTV]

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I make between 150-250k per year.

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I'm 21 and worked for near minimum wage until about March of this year when I went pro. From march to about June, I was a low limit donk. From July to November I made $120,000.

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I made 10K in a week once, I guess my yearly is ~500K.

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Yeah but I make an easy 20k a month now, with 10k of that being income that is fixed and won't go away for at least a year, if not longer. So my $150k a year estimate for next year is conservative. The reason I've only made $150k or so this year is because the vast bulk of that earn was the last 6 months when I've actually been playing 10/20 and 20/40 short.

It's not like a ran good for a week and extrapolated from that. I've extended my earn for the last 6 months to one year and gone with the low end. Try not to be a dick from now on.

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Clearly I was exaggerating to make a point. But as a 21 year-old who hasn't done any financial planning and has only *actually* made 150K+ in a year once, you should probably consider the possibility that extrapolating four months into a yearly salary that you'll draw indefinitely isn't the best way to handle your finances. Four months may be enough time to be sure you are a winner in current game conditions. It's a bit of a stretch to assume things will be the same for five or ten years.

In other words, for as long as you continue winning at this pace, save. A lot.

And congrats. Seriously.

[Scotty O]

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Out of that, I've saved $48,000 for taxes and have another $40,000 in my bankroll/savings. Did you really want me to live on less than $32,000? I had to buy a new car, move into a new place, furnish it, etc during the time as well. I don't think I've done so bad though I do admittedly travel too much. But I wouldn't have it any other way.

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Put in the most you can. If you are unsure of it, get yourself a finacial planner, I have one it is the best thing in the world for me. My fees for the planner are made up and a whole lot more throughout the year in returns.

Scotty O

[TheMetetron]

Got an appointment to talk to a professional this week. I'll report back.

[AceHigh]

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Also, why wouldn't I want to just take the money and invest it on my own. Then I don't have to worry about some stupid 10% early withdrawal fee in case I need the money?

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Cuz IRA profits are protected from taxes until you withdraw the money. So you can make tons of money in stocks, money you have no intention of touching and watch it grow, safe from Uncle Sam greedy IRS people. If you really are going to be making 250k, how likely is it you will need to grab some of your IRA money? Hopefully it is very unlikely.

[TheMetetron]

The reason to grab it is to buy a house. Or if this whole thing goes bust in 10 years and I have to get a real job or start a new business.

[AceHigh]

The question is, do you want to avoiding paying taxes on some of your investment money in return for not having convienent access to it or not? The higher the tax bracket, the better that deal is.

But it's still up to you. Realize if you don't pay social security taxes you won't get much/any social security benefits.

[TheMetetron]

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But it's still up to you. Realize if you don't pay social security taxes you won't get much/any social security benefits.

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You do realize social security tax caps at 90k in AGI?

I pay the full social security tax every year and still won't see any of it. Life is a bitch.

[MrBlue]

If we all keep saying we'll never see any SS benefits, it'll become a self fullfilling prophecy! It gives the impression to the politicians that since we're not expecting any money anyway, why bother saving SS?

[AceHigh]

I wasn't sure how pro players paid taxes and the SS tax. I thought you guys might not have to contribute.

[Shoe]

SS will fix itself eventually... it's just going to be broke for a few years if nothing changes. For Generation X'ers, there are more people in Generation Y and peopel being born today that will be able to support us. The problem is for the baby boomers and those immediately after.