Should have used a scenario retired at 55 and on ACA insurance. This is where most people are situated. That would change many strategies. Good content though but using ACA changes everything.
His example and reasoning can also actually apply to ACA, as you usually may need the brokerage account first to keep your MAGI low to get the subsidy. This competes with Roth conversions so, depending on your situation, you will either forego Roth conversions while on ACA or it might make sense to forego the ACA subsidy now to protect you from much higher taxes due to RMDs in the future, or even alternate each year. You need to have a long term projection rather than making a decision only on what will help you for this year or the next three. It is also not an all or nothing decision, since you can convert some, harvest some, and use some cash, while still keeping your MAGI low enough for ACA, if you can produce this way enough funds for your expenses by pulling from different accounts.
Very true but there are so many different situations (no cookie cutter) as he always says. I retired at 61 but had Roth and Roth 401k along with Brokerage and pretax 401k. Split it up through the years to allow for different tax situations. Moved the Roth401k to Roth and use dividends and interest from that and brokerage and never touch principle or the pre tax 401k. Allows for lowered MAGI.
I picked up on the comment around 7:30. My wife and I own 2 rentals, both paid off (worth 1.1m combined), we also rent half of our primary residence (duplex) our duplex will cover 100% of home expenses. We constantly debate whether to sell 2 of those properties and put it in a taxable account yielding around 7-9% to use as income or keep the rental income stream and form an llc to be able to write off more travel and ‘business’ expenses. The former would help us bridge the 57-62 years till SS kicks in but would kick our butt in taxes I’m sure. Definitely living your videos, I’m finding out how deep the rabbit hike goes.
Good video but I totally disagree with your answer regarding pulling from the brokerage account first. I want to leave my heirs as much tax free money as possible so I plan on living off my tax deferred money plus SS and even doing that I will end up with more RMDs than I will need.
Im in this situation but on a 600k scale! Only 100 k in an ira. 58. It has been my mission 8k a yr conversion to Roth for 6yrs now. I hope it paid off. 59 1/2 next April. 🎉 Cash helps!
Great video Ari! Super helpful information. I've been watching all of your videos and signed up for new newsletter recently. Everything is awesome but if possible, I'd love to see more scenarios for single, unmarried people like myself as it relates to taxes and retirement. Thank U!!!
So if I'm pulling money from my Brokerage account, I pay 0% tax on gains up to 94K, correct? And when it comes down to Federal Taxes on a MFJ return, I can have an additional ~23k income and interest combined and remain in the 12% bracket. Did I understand this correctly?
If you don’t have a brokerage acct but have 400k in Roth, would it make sense to live on some Roth in order to do Roth conversions (of 1m ira). Everyone says spend Roth last but I never see examples where it gets spent!
New subscriber and I am sharing my story. My age is 55 and I have zero debt, 110k in the bank, 35k NVDA shares, 401k $270k, IRA 145K and 2 houses in Bay Area with zero mortgages. Just got a Mercedes SUV as my 3rd car. I started saving after marriage only after marriage but will all this be enough to retire?
This is such a weird non-explanation. Ok so I fill the 0% LTCG bracket with tax gains from the taxable account - great. Then how do I do Roth conversion? If I do that - that would be taxable income, so I'm stacking it underneath my LTCG, correct? So now it's taxable? What are we doing exactly?
Hi Ari. When building a 3-5 year bond ladder (war chest) to de-risk the need to potentially pull from our stock positions in a market downturn and recovery period, in what account should the bond ladder exist - in the IRA side or the after-tax brokerage side?
Good info. However, how about a podcast on the mechanics. For example, if you have $1 million in the IRAs and lets say 70% is in multiple equities such as mutual funds, ETFs and individual stocks and 30% in fixed between individual bonds, CD and Bond funds. So when you need to sell to generate income. Do you sell equal amounts of each individual holding, or do you only sell the holdings that are up or are down, or does it matter?
I think I want to pull from my 403b and 457 first, because I want to not leave anything to heirs that would have a full tax basis. If I have some left in that account, I’d leave that to charity, and other accounts to family who won’t have to worry about taxes.
What about couple 65/66 with $2M IRAs, pensions, and small brokerage ($100k)? I’m thinking pulling from IRAs unavoidable plus conversions aren’t appealing due to our fixed annual income of around $120k.
Age based and income based decision. My goal is to set myself/wife up so if one of us passes we are not hammered by the widow tax issue. You have to make do for yourself because if you both survive to the same ripe old age, you just gave Biden money.
For 2024 if your AGI is less than 94k and you are MFJ the LT capital gains tax is 0%. Therefore you can have ~30K of ordinary income and 94K of LTCG. The 30K gets a deduction and the remaining LTCG gets 0% tax. Therefore- the total tax is 0%.
So you are saying withdraw from tax free money so you can then withdraw from tax deferred and pay tax to convert to Roth? That makes zero sense. You get to the same answer if you just withdraw from the IRA to live on and pay the same tax and your heirs inherit the brokerage account with the step up in basis which provides them the same tax free benefit of the Roth without the need to roll it into an inherited IRA and empty it in 10 years. As a bonus, you can harvest losses in the brokerage account during your lifetime.
Great Video. Planning ahead can really make a big difference, especially when it comes to minimizing taxes. I’ve been exploring the crypto and stock markets for about six months now, and it’s been a game changer for me. I decided to reinvest my RMD strategically, and that decision has really paid off-I’m now pulling in around $25k a week with very little trading on my end. It’s been a great way to create a cushion and relieve a lot of financial stress. Best of luck with your RMD decisions-I hope you find the same peace of mind!
After the advantage we got in letting our money grow tax free, why not proudly pay the taxes that are due instead of trying every trick to pay as little as possible. It’s the least we can do for our country’s prosperity
![This Is What A Real $5M Portfolio Looks Like In Retirement [Case Study] ᴴᴰ](/img/n.gif)
Should have used a scenario retired at 55 and on ACA insurance. This is where most people are situated. That would change many strategies. Good content though but using ACA changes everything.
Me!!
His example and reasoning can also actually apply to ACA, as you usually may need the brokerage account first to keep your MAGI low to get the subsidy. This competes with Roth conversions so, depending on your situation, you will either forego Roth conversions while on ACA or it might make sense to forego the ACA subsidy now to protect you from much higher taxes due to RMDs in the future, or even alternate each year. You need to have a long term projection rather than making a decision only on what will help you for this year or the next three. It is also not an all or nothing decision, since you can convert some, harvest some, and use some cash, while still keeping your MAGI low enough for ACA, if you can produce this way enough funds for your expenses by pulling from different accounts.
@Jl-620 good explanation.
@@J-2024-v8i exactly! Well explained! Excellent!
Very true but there are so many different situations (no cookie cutter) as he always says. I retired at 61 but had Roth and Roth 401k along with Brokerage and pretax 401k. Split it up through the years to allow for different tax situations. Moved the Roth401k to Roth and use dividends and interest from that and brokerage and never touch principle or the pre tax 401k. Allows for lowered MAGI.
I picked up on the comment around 7:30. My wife and I own 2 rentals, both paid off (worth 1.1m combined), we also rent half of our primary residence (duplex) our duplex will cover 100% of home expenses. We constantly debate whether to sell 2 of those properties and put it in a taxable account yielding around 7-9% to use as income or keep the rental income stream and form an llc to be able to write off more travel and ‘business’ expenses. The former would help us bridge the 57-62 years till SS kicks in but would kick our butt in taxes I’m sure.
Definitely living your videos, I’m finding out how deep the rabbit hike goes.
Glad it helps!
Nice job on this video. Basically, it comes down to, "it depends". Each situation must be worked out. Thanks.
Good topic. Thank you. Followed the commentary but this is where a chart could be useful.
Good video but I totally disagree with your answer regarding pulling from the brokerage account first. I want to leave my heirs as much tax free money as possible so I plan on living off my tax deferred money plus SS and even doing that I will end up with more RMDs than I will need.
@earlyretirementari congrats on hitting 30k subscribers!
Im in this situation but on a 600k scale! Only 100 k in an ira. 58. It has been my mission 8k a yr conversion to Roth for 6yrs now. I hope it paid off. 59 1/2 next April. 🎉 Cash helps!
Great video Ari! Super helpful information. I've been watching all of your videos and signed up for new newsletter recently. Everything is awesome but if possible, I'd love to see more scenarios for single, unmarried people like myself as it relates to taxes and retirement. Thank U!!!
Thanks! You may like this one: th-cam.com/video/Qlpvp6jQbjA/w-d-xo.htmlsi=3MGh3xbMMCRSN6z5
Thanks for the video this is our exact situation! Very helpful
Glad it was helpful!
So if I'm pulling money from my Brokerage account, I pay 0% tax on gains up to 94K, correct? And when it comes down to Federal Taxes on a MFJ return, I can have an additional ~23k income and interest combined and remain in the 12% bracket. Did I understand this correctly?
If you don’t have a brokerage acct but have 400k in Roth, would it make sense to live on some Roth in order to do Roth conversions (of 1m ira). Everyone says spend Roth last but I never see examples where it gets spent!
New subscriber and I am sharing my story. My age is 55 and I have zero debt, 110k in the bank, 35k NVDA shares, 401k $270k, IRA 145K and 2 houses in Bay Area with zero mortgages. Just got a Mercedes SUV as my 3rd car. I started saving after marriage only after marriage but will all this be enough to retire?
Excellent educational information-thanks 👍
This is such a weird non-explanation. Ok so I fill the 0% LTCG bracket with tax gains from the taxable account - great. Then how do I do Roth conversion? If I do that - that would be taxable income, so I'm stacking it underneath my LTCG, correct? So now it's taxable? What are we doing exactly?
Any videos on finding health care . Between retiring and medicare
Here you go! th-cam.com/video/BykvoxJEWGo/w-d-xo.htmlsi=f02mz-VOG_dUxgGn
Thanks Ari, this was a very informative vidoe!
Hi Ari. When building a 3-5 year bond ladder (war chest) to de-risk the need to potentially pull from our stock positions in a market downturn and recovery period, in what account should the bond ladder exist - in the IRA side or the after-tax brokerage side?
Good info. However, how about a podcast on the mechanics. For example, if you have $1 million in the IRAs and lets say 70% is in multiple equities such as mutual funds, ETFs and individual stocks and 30% in fixed between individual bonds, CD and Bond funds. So when you need to sell to generate income. Do you sell equal amounts of each individual holding, or do you only sell the holdings that are up or are down, or does it matter?
I think I want to pull from my 403b and 457 first, because I want to not leave anything to heirs that would have a full tax basis. If I have some left in that account, I’d leave that to charity, and other accounts to family who won’t have to worry about taxes.
What is your tax rate and what is their tax rate?
Ours are 22 and 15. Our daughters is 15 and 0.
They can get their tax money after we are gone. Lol.
This was a helpful video!
Glad it was helpful!
What about couple 65/66 with $2M IRAs, pensions, and small brokerage ($100k)? I’m thinking pulling from IRAs unavoidable plus conversions aren’t appealing due to our fixed annual income of around $120k.
Do Roth conversions still make sense if you are a widow or widower?
Age based and income based decision. My goal is to set myself/wife up so if one of us passes we are not hammered by the widow tax issue. You have to make do for yourself because if you both survive to the same ripe old age, you just gave Biden money.
I’ve never heard of tax free capital gains. Where is this rule documented?
Required distributions are now 73 yrs, not 75. And at 59-1/2 can start drawing down IRA w/o penalty.
They are going to be 75 years old in 2025 I believe.
Fyi, the RMD age is 75 right now, for anyone born after 1957.
Federal Employees with TSP but no Traditional IRA: Move from Traditional TSP to new Traditional IRA and then to Roth IRA.
I don’t understand how u say the first 94k is tax free? Why ?
For 2024 if your AGI is less than 94k and you are MFJ the LT capital gains tax is 0%. Therefore you can have ~30K of ordinary income and 94K of LTCG. The 30K gets a deduction and the remaining LTCG gets 0% tax. Therefore- the total tax is 0%.
So you are saying withdraw from tax free money so you can then withdraw from tax deferred and pay tax to convert to Roth? That makes zero sense. You get to the same answer if you just withdraw from the IRA to live on and pay the same tax and your heirs inherit the brokerage account with the step up in basis which provides them the same tax free benefit of the Roth without the need to roll it into an inherited IRA and empty it in 10 years. As a bonus, you can harvest losses in the brokerage account during your lifetime.
Great Video. Planning ahead can really make a big difference, especially when it comes to minimizing taxes. I’ve been exploring the crypto and stock markets for about six months now, and it’s been a game changer for me. I decided to reinvest my RMD strategically, and that decision has really paid off-I’m now pulling in around $25k a week with very little trading on my end. It’s been a great way to create a cushion and relieve a lot of financial stress. Best of luck with your RMD decisions-I hope you find the same peace of mind!
25k a week? Amazing! how did you get started?
I signed up for a 1-on-1 trading session. It's like copy trading, but with personalized guidance.
It's a secure and supportive way to improve your trading skills while earning, the best part is there's no upfront payment required
the session was secure and a supportive way to improve your trading skills while earning, the best part is there's no upfront payment required at all
I suggest consulting with Dave for guidance, This way you can get strategies designed to address your unique long/short-term goals
After the advantage we got in letting our money grow tax free, why not proudly pay the taxes that are due instead of trying every trick to pay as little as possible. It’s the least we can do for our country’s prosperity
You can’t be serious
Wow
If you want to be taken serious, you really need a shirt and a tie, not a T-shirt.
If you think that matters in terms of advice quality, I’ll be happy to put on a suit and talk to you about a great Timeshare opportunity.
@@dforrest4503 Yes it matters! Help yourself
@@dforrest4503 Yes it matters! Help yourself
Nobody under 45 gives a crap what somebody wears. In fact I don’t trust most tie wearing people.
It does not matter what he is wearing.
You are a kid. Bye
Don't be jealous that Ari knows way more than you
@@holdencawffle626 Don't worry... Victor Dasilva will over convert his IRAs to roth. Let him.