Some would call me poor. My income is $31K/yr. I spend about $10K/yr. So my wealth increases by about $20K+/yr. I live simply with no debt. I'm a 74 year old veteran. My only pre-tax account has about $100K balance with RMD about $4K/yr. That $4K goes into another account, I don't spent it. I pay no income tax at all and my property tax is $0/yr also. I could spend 3 times as much and still be stable financially in the current economic climate. I'm OK. My total wealth is slightly greater than $500K. If everything crashes, I would still be OK because I have actually been really poor in the past and I know how to do that too.
Thanks Eric, this is the best planning that I have seen.The examples of the ACA planning and the catchup zone helped me. I would love to see more examples.
This was very well done and aligns with my research into this topic. Some of my friends thought it was nuts for me to say I was delaying social security until 70. When I explained to them it was about tax planning, medical coverage pre age 65, and an overall decumulation strategy they started to get it.
I am not sure I will wait until 70 for SS but watching this video and other ones by Eric has convinced me to delay SS for several years in order to at least convert a large portion of my 401K and IRAs to Roth. I knew I had a tax time bomb with the deferred accounts but I see the reality that converting a large portion now to take the tax hit without SS makes the most sense. Its especially important to convert now knowing that the tax brackets revert back in 2026 so its a definite tax increase at that time.
@@robdupree5687No, the amount you are referring to is the CONTRIBUTION limit to your Roth - not what you can convert into it. There are no limits to how much you can convert into it, but you have to pay taxes on whatever amount you choose to convert.
This is basically the vidio I have looked for vor years. I have always thought about taxes in this way. Not a tax planner ut accumulated enough knowledge over the years to basically force myself to maximize every year possible into roths from close to when they started. I will be sharing this link with a bunch of people that I hope will watch because you explain it better than I ever could.
The section at 37:22 on ACA planning for age 62-65 is very interesting. I was wondering if you have any videos that cover ACA planning and tax strategies for early retirement from, say, age 50 to 62 ?
This was a terrific presentation. I now understand the WHY behind my financial planner’s recommendations. He says that things will be preferable tax moves, but now I really get it. Thank you so much. I have a lot more confidence in the plan he provided.
This was awesome! Everyone who wants to DIY their early retirement needs to watch, study and understand every aspect of this. Sadly, most people are looking for the "one size fits all" answer and won't take the time to comprehend all the moving parts involved.
My father was responsible for running a profitable sawmill for many years. It was his job to get the most lumber yield from every saw log. That wall paper behind you… You don’t need more timber. You need a better plan
You r amazingly excellent on your financial planning. I should have known you before I turned 65, now I’m delaying my SS to offset my Medicare IRMMA payment and planning to convert to Roth this year 2023 though very limited. Thanks a lot.
Eric, excellent work. Thank you for sharing this like a teacher. The more you do this the better you get at it, and subsequently so too do those fortunate enough to watch and learn. Well done and well worth the time for your team to invest in. There is a tipping point that is reached (no one quite knows when) where all of these videos and presentations will begin to compound in returns. Keep up the work and stay the course.
Special Thanks for the ACA section! My wife is retiring at 62 and we will lose her coverage. We are looking to tip toe thru this ACA zone by paying the ACA HSA high deductible premuims thru my S-corp business and still do some targeted roth conversions especially if the market tanks as in 2020. Traditional IRA's are $1 mil so we have only 10 years to convert before taking SS at 70.
Excellent segment! Knowledge is power! Especially, since I have 2 government pensions, government 401K, and social security. Fortunately, I also have tax free VA service-connected disability compensation.
You covered exactly what I plan to do. 65 in 6 months. Filing single for the first time in a long time. Starting over. Fixed pension, convert as much to Roth as possible from 401 and willing to take the irmaa hit if it makes sense. Delay ss until forced to take it etc. lots of room left for 2023 to stay under the second irmaa tier, still room under first tier.
Always good content. I just retired and looked into Roth conversions but now thinking differently. If I divide my assets into 2 buckets, (which are about equal in total) tax deferred where either I or my heirs will pay tax and tax free or step up in basis where heirs pay no tax, which includes stocks, cash equivalents and life insurance. My tax deferred combined with SS and a pension is enough for me to live on even after paying tax for 30 years. So I will treat it like a salary as if I am still working and pay tax as I go. This will allow the non taxed bucket to grow so it becomes a higher % of the total so my heirs collect more tax free.
Great video once again! Full explanation of the obstacles we will be facing. Fortunately, we have a modest Traditional IRA, good size Taxable account and small Roth. Gives us options to pay minimal taxes. Love your videos
Great point on SS. I am delaying until 70 for the reason you mentioned. At least 15% will not be taxed for federal and zero in my state. So in the 25% bracket instead of 31% with state I only pay 21% for a 10% savings, thus I want to maximize that income and COLA.
We are retiring at 54 (year we turn 55) plan is to utilize 401k and brokerage until 59.5, balancing each to keep taxes in 12% bracket and qualifying for ACA. From 59.5 until will gradually move income from IRA and 401k avoiding using Roth and Brokerage unless needed to keep tax bracket in 12%. From 70 on, will use both SS and spouse SS and Roth/brokerage to keep taxes close to 0.
I really enjoyed this ... ACA and Roth conversions are interesting ... I hope you cover singles more. Note that having a larger taxable account can mean a substantial forced dividends income source.
Excellent. Thank you; just what I needed to learn (take some gains while I'm in lower income during low fed tax time and before taking social security). I think you referred to it as "cleanup time." I only have 2 years to do this before RFA so this may mean I might want to take ss later so I can do some more clean up before ss. Liked and subbed!
Nice presentation. A couple of times you emphasized "tax savings" but the real criteria to optimize is 'after tax' account value or utility. Working on converting my IRA to Roth prior to SS.
Hi Eric: This is very informative and very clean. Is there an Excel template you have where in one can enter the tax bracket one will be in and have suggested pull for a given income from Roth, vs Taxable vs Tax deferred...etc., including social security
Good advice in the catch up zone ..by delaying social security and using less recorded income more taxable income I went from $1550 dollars a month cobra health insurance to $0 monthly $0 deductible ACA /Medicaid insurance.Have to be careful how much of Ira tax deferred account are withdrawn.
This was FANTASTIC. It cleared up a number of things for me, and I had to go make a couple of changes to the Excel chart I’m using to estimate future taxes. I especially liked the list of considerations when tax planning, which helps make sure I’m not leaving anything out of my plan and that I’m watching for all the potential trigger points. Also the slide showing what considerations should generally rank higher in weighing alternatives. THANK YOU!
Excellent presentation. I like the framework you provided in this presentation. A lot of good food for thought. I was hoping you guys have a SaaS online to use for a reasonable fee of course. Thank you again!
Great video! we are in the withdrawal phase ages 74-77 puzzling about which buckets to use each year; any suggestions on software, videos or books would be appreciated.
Eric I really enjoy your style of confering this information. Delaying SS to 70 isn't in the cards when your at 62 but still have 2 minor children at home thru to your 70th birthday. The children are eligible for SS checks if you claim at 62. I would love to see a video on this scenario because most older parents don't know about it.
I waited until I was 66 y/o but it was wonderful to get a monthly check that went directly into their 529. Also there is always the assumption that your health will hold out.
This is a very comprehensive overview, and a great video - thanks. I’m curious - how many years out from retirement does it makes sense to start planning this? It seems like we’re all guessing at future lax laws right now, but if retirement is farther away, it’s more of a guess. Is it best >7 years out to just focus on balancing the tax allocation buckets as much as possible? New rules will be there when you get there…
Great video! I project out our assets, income, expenses and taxes for life. I am inflating the standard deduction and tax brackets with inflation. Do most tax advisors’ software do this? This makes RMDs look not as bad as I would have thought.
Wow. Eric. Full of info. Actually understand everything. unfortunately , I have to do massive Roth conversions before 2026. And balance inherited Ira withdraws. It’s massive. Sigh.
@@SafeguardWealthManagement yes. It’s grown substantially, it went from $340k last year to 1 million now. I have 9 years to take out. All Tesla. Ha ha.
you said to plan for what is going to happen in 25 years of retirement. How do you know what the tax laws/parameters are going to be in 5 years much less 25? Really interested in how you plan for that.
Most deductables on aca are more than 5000 per person. Bronze plans are 9000 per person max out of pocket. If you get the 5000 deductable plans are hundreds per person on premiums
Hi there! Great video. Just recently learned about roth conversions with your videos we watched. How does the job & tax cut apply when trying to convert our 401k to roth ira while employed? We called Fidelity & asked if we can convert and they said we couldn’t but We weren’t sure if the representative knew what she was talking about. Thank you soo much for all your great videos!!!
Great! And very thorough and well explained. Might mention in marriage QDRO (with younger spous) and QLACS and one off HSA payment as additional ways to reduce RMDs. Cheers Jef
Eric, can you show a forward looking tax plan with forced income (pension) and more detail on incorporating SS? Most pensions range from $70-150k per year for state and fed employees.
@Giselle. Social security benefits are cut via 2/3 of pension. Most high pension earners plus spouse won’t be able to get SS. Just Google Pension and social security offset
Thanks, great video. Seems like with a larger tax deferred account and need large ROTH conversion, you probably can forget about the ACA subsidy, subject to larger IRMAA penalties and better to delay S.S till 70. Would be nice to see a video for large accounts like $5M (maybe $2.8M in tax deferred, $1.9M in taxable (let says $0.9M LT gain), $0.3M Roth and 12 years to RMD. What will be the best tax efficient withdrawal to reduce taxes? I am sure married couple will do better than a single person since they can convert more in the same tax bracket.
Great suggestion Allan. I am planning on doing some case study withdrawal strategy videos in the future. Something similar to this situation will certainly be on the case study list.
have similar situation 2.8 M taxable, 1.4 Deferred ( IRA/401k ), .3 Roth... Thinking of building Self managed Annuity from Fidelity and move large portion of 2.8M Taxable to Annuity to control the income 2.8 M taxable is generating due to dividends. This video is great. I was planning to use 60-70 10 years to move 1.4 Deferred to Roth at 100K each year ( keeping net under 80K after standard deduction ), while realizing Capital gains in Taxable at zero rate ( however Dividend income really throws it off the track ). Let next generation deal with Annuity related Taxes much later on in case they do not get high income. Its good problem to have to be in position to pay taxes.... :) ... Any other ideas...
NIce presentation. However, it would be nice to see more examples and your recommended action plan. Including an explanation as to why they should follow that specific strategy. Nice job!
My plan has always been to convert part of my tax deferred 401k into a Roth IRA, live off money from my pensions and what is left of my t401k, let the Roth grow over the next 10 years on my conversions. I would then draw from Social Security at age 70, and live off my pensions, Roth, and Social Security, and hope that my t401k has minimal distributions at 72.
Thanks Eric, very comprehensive!! Are there any conditions for single filers over 60 to commit Roth Conversions up to 32% (within Catch-Up Zone) and forego some ACA benefits to avoid SS Tax Torpedo and IRMAA penalties in the future?
Waiting on SS is a gamble on if you live long enough for not. Are you willing to take that gamble? People seem to be passing much young in my generation that previous so it doesn't appear to me we are actually living longer. Maybe one could take SS at 62 and invest it and then if they die early, at least the heirs will get some of it that the deceased has worked all their life paying into. If you need it, then you at least can take less from your retirement savings since you are getting SS and still leave a bit to the kidos. Everyone preaches delaying and the government hopes you do because they figure you will pass away before breaking even since Life Expectancy is 78 for a male and break even will likely be more like 81.
We only have two years before starting rmd,s and both of us are getting ss so I feel trapped!!! I wish I would have known about this clean up zone before I started social security
This video just came up on my YT feed, playing in the background. While your points about withdrawal optionality and cleanup zones are well-considered, two obvious gaps in your presentation were: 1. The prevent value of paying a tax now vs. 10 years in the future. This is even more relevant now with the higher discount rates. 2. You assume people have no income from their taxable portfolios. This will tend to blow up the zero percent LTCG space. Without that 0% space and accounting for PV, how does your presentation change?
Excellant presentation. Isn't it true that money you convert to Ruth IRA can not be touched for 5 years (both converted amount plus subsequent earnings)? If that were true, how do you have optionality by "pulling money out of Ruth"? Are you assuming we have a large enough non-converted money in the Ruth account to cover the amount you need to pull? Thank you.
Nicely done. I'm not understanding what "life expectancy factor" I would use if withdrawing IRA at age 65? The table I'm using starts at age 70 or I guess in 2022 72. Do I use the first year for each year until I reach my withdrawal year?
Does it ever make sense for someone that is retired in their 50's and taking ACA, to forgo subsidies to convert IRA to roth and make up the tax loss on growth of the roth? Or is it always better to wait for the "cleanup zone', when medicare kicks in, to do conversions?
It depends on a person's situation. If someone has huge tax deferred balances and estimate RMDs are going to be large and destructive, it may make sense to prioritize conversions vs. a subsidy. It all depends on the situation.
Excellent presentation! It’s so unfair that taxes get more complicated in retirement! My head is spinning….and I have a B.S. in Accounting.
Some would call me poor. My income is $31K/yr. I spend about $10K/yr. So my wealth increases by about $20K+/yr. I live simply with no debt. I'm a 74 year old veteran. My only pre-tax account has about $100K balance with RMD about $4K/yr. That $4K goes into another account, I don't spent it. I pay no income tax at all and my property tax is $0/yr also. I could spend 3 times as much and still be stable financially in the current economic climate. I'm OK. My total wealth is slightly greater than $500K. If everything crashes, I would still be OK because I have actually been really poor in the past and I know how to do that too.
Thanks Eric, this is the best planning that I have seen.The examples of the ACA planning and the catchup zone helped me. I would love to see more examples.
This was very well done and aligns with my research into this topic. Some of my friends thought it was nuts for me to say I was delaying social security until 70. When I explained to them it was about tax planning, medical coverage pre age 65, and an overall decumulation strategy they started to get it.
The caveat is - we don't know when we will "go"
@@ecs1749 You are correct. There are no guarantees in life. I can only plan based on what I know and what I’m comfortable with.
I am not sure I will wait until 70 for SS but watching this video and other ones by Eric has convinced me to delay SS for several years in order to at least convert a large portion of my 401K and IRAs to Roth. I knew I had a tax time bomb with the deferred accounts but I see the reality that converting a large portion now to take the tax hit without SS makes the most sense. Its especially important to convert now knowing that the tax brackets revert back in 2026 so its a definite tax increase at that time.
@@samc9156But aren't Roth conversions limited to $7500 for 2023? I don't consider that a large amount compared to the whole account value.
@@robdupree5687No, the amount you are referring to is the CONTRIBUTION limit to your Roth - not what you can convert into it. There are no limits to how much you can convert into it, but you have to pay taxes on whatever amount you choose to convert.
The best illustration I ever saw. Thank you🎉
This is basically the vidio I have looked for vor years. I have always thought about taxes in this way. Not a tax planner ut accumulated enough knowledge over the years to basically force myself to maximize every year possible into roths from close to when they started. I will be sharing this link with a bunch of people that I hope will watch because you explain it better than I ever could.
The section at 37:22 on ACA planning for age 62-65 is very interesting. I was wondering if you have any videos that cover ACA planning and tax strategies for early retirement from, say, age 50 to 62 ?
It’s raining knowledge….and it’s free. All you have to do is put a bucket outside and let Eric and Tony fill it.
Hahaha, thanks Stuart. You're the man!
Fantastic! Extremely useful, intelligent and well thought-out. You’re the best source I’ve found on TH-cam.
WOW! This is very eye opening. I wish I had seen this ten years ago (71 years old).
This was a terrific presentation. I now understand the WHY behind my financial planner’s recommendations. He says that things will be preferable tax moves, but now I really get it. Thank you so much. I have a lot more confidence in the plan he provided.
Thanks Eric. This is one of the best videos out there that I have watched. It has cleared out a few clouds over me. Really appreciate it.
This is the BEST withdrawal strategy video! Thank you. I think you saved me a lot of taxes from RMD.
Your well-designed slides massively help.
One of the best videos on this topic I have seen. Thanks!
Wow Eric, drop the mic! Well thought out video on this topic!
Thank you John! I really appreciate it!
This was awesome! Everyone who wants to DIY their early retirement needs to watch, study and understand every aspect of this. Sadly, most people are looking for the "one size fits all" answer and won't take the time to comprehend all the moving parts involved.
Thanks Eric!
Yes! All connected and make tangled web tax trap! Cascade into tax Nitemare !
Thanks Eric, I ditto the comments directly below. Very very well explained. Excellent!
Just found your channel. Fantastic presentation. Appreciate your information on retirement tax planing and strategies. subscribed!
You are phenomenal in this one! Usually I can’t keep up with you. Thanks !
4 months to A62, this “clear zone planning” is exactly I need to work on. Thank you!
My father was responsible for running a profitable sawmill for many years. It was his job to get the most lumber yield from every saw log. That wall paper behind you… You don’t need more timber. You need a better plan
This was extremely helpful. Thank you!
You r amazingly excellent on your financial planning. I should have known you before I turned 65, now I’m delaying my SS to offset my Medicare IRMMA payment and planning to convert to Roth this year 2023 though very limited. Thanks a lot.
So glad I'm a subscriber. I learn something every time. I made notes for my planning. 🙂
Thank-You! Such good information.
Eric, excellent work. Thank you for sharing this like a teacher. The more you do this the better you get at it, and subsequently so too do those fortunate enough to watch and learn. Well done and well worth the time for your team to invest in. There is a tipping point that is reached (no one quite knows when) where all of these videos and presentations will begin to compound in returns. Keep up the work and stay the course.
I really appreciate the kind words Jeffery. We won't be slowing down :)
Thanks for taking the extra time for this comment. Means a lot
Special Thanks for the ACA section! My wife is retiring at 62 and we will lose her coverage. We are looking to tip toe thru this ACA zone by paying the ACA HSA high deductible premuims thru my S-corp business and still do some targeted roth conversions especially if the market tanks as in 2020. Traditional IRA's are $1 mil so we have only 10 years to convert before taking SS at 70.
Excellent segment! Knowledge is power! Especially, since I have 2 government pensions, government 401K, and social security. Fortunately, I also have tax free VA service-connected disability compensation.
Very thought provoking presentation.
Well done sir. Thank you for your time and efforts.
You covered exactly what I plan to do. 65 in 6 months. Filing single for the first time in a long time. Starting over. Fixed pension, convert as much to Roth as possible from 401 and willing to take the irmaa hit if it makes sense. Delay ss until forced to take it etc. lots of room left for 2023 to stay under the second irmaa tier, still room under first tier.
So glad to have found your channel! Thanks so much for what you do.❤❤t
Always good content. I just retired and looked into Roth conversions but now thinking differently. If I divide my assets into 2 buckets, (which are about equal in total) tax deferred where either I or my heirs will pay tax and tax free or step up in basis where heirs pay no tax, which includes stocks, cash equivalents and life insurance. My tax deferred combined with SS and a pension is enough for me to live on even after paying tax for 30 years. So I will treat it like a salary as if I am still working and pay tax as I go. This will allow the non taxed bucket to grow so it becomes a higher % of the total so my heirs collect more tax free.
Great presentation! Glad to see the ACA benefit being integrated in planning. Most (including myself) don't see this one coming. Ouch!
Great video once again! Full explanation of the obstacles we will be facing. Fortunately, we have a modest Traditional IRA, good size Taxable account and small Roth. Gives us options to pay minimal taxes. Love your videos
Great point on SS. I am delaying until 70 for the reason you mentioned. At least 15% will not be taxed for federal and zero in my state. So in the 25% bracket instead of 31% with state I only pay 21% for a 10% savings, thus I want to maximize that income and COLA.
Great Information!!! thanks. Now I have an idea of what to do to plan my tax strategy for each year.
We are retiring at 54 (year we turn 55) plan is to utilize 401k and brokerage until 59.5, balancing each to keep taxes in 12% bracket and qualifying for ACA. From 59.5 until will gradually move income from IRA and 401k avoiding using Roth and Brokerage unless needed to keep tax bracket in 12%. From 70 on, will use both SS and spouse SS and Roth/brokerage to keep taxes close to 0.
Like your plan.. I was going to utilize almost a similar plan 401k and pension.
aca strategy was extremely useful. Great information!
I really enjoyed this ... ACA and Roth conversions are interesting ... I hope you cover singles more. Note that having a larger taxable account can mean a substantial forced dividends income source.
Excellent review - thanks!
Thanks for the info on the clean up zone. Useful!
I have watched many of your videos. This is the best.
Excellent. Thank you; just what I needed to learn (take some gains while I'm in lower income during low fed tax time and before taking social security). I think you referred to it as "cleanup time." I only have 2 years to do this before RFA so this may mean I might want to take ss later so I can do some more clean up before ss. Liked and subbed!
Excellent analysis and explanation.
Thank you Thomas!
Thank you for another great video! I wish you would offer paid consultations for those who manage their retirement plans themselves.
Nice presentation. A couple of times you emphasized "tax savings" but the real criteria to optimize is 'after tax' account value or utility. Working on converting my IRA to Roth prior to SS.
Thank you Ralph! I mean them synonymously. Understand the distinction but know that we care about after tax wealth and distributions ultimately.
Hi Eric: This is very informative and very clean. Is there an Excel template you have where in one can enter the tax bracket one will be in and have suggested pull for a given income from Roth, vs Taxable vs Tax deferred...etc., including social security
Good advice in the catch up zone ..by delaying social security and using less recorded income more taxable income I went from $1550 dollars a month cobra health insurance to $0 monthly $0 deductible ACA /Medicaid insurance.Have to be careful how much of Ira tax deferred account are withdrawn.
This was FANTASTIC. It cleared up a number of things for me, and I had to go make a couple of changes to the Excel chart I’m using to estimate future taxes. I especially liked the list of considerations when tax planning, which helps make sure I’m not leaving anything out of my plan and that I’m watching for all the potential trigger points. Also the slide showing what considerations should generally rank higher in weighing alternatives. THANK YOU!
Thank you so much for the kind words Margaret!
Excellent presentation. I like the framework you provided in this presentation. A lot of good food for thought. I was hoping you guys have a SaaS online to use for a reasonable fee of course. Thank you again!
Great video! we are in the withdrawal phase ages 74-77 puzzling about which buckets to use each year; any suggestions on software, videos or books would be appreciated.
This is great stuff. Very helpful and educational
Eric I really enjoy your style of confering this information. Delaying SS to 70 isn't in the cards when your at 62 but still have 2 minor children at home thru to your 70th birthday. The children are eligible for SS checks if you claim at 62. I would love to see a video on this scenario because most older parents don't know about it.
I waited until I was 66 y/o but it was wonderful to get a monthly check that went directly into their 529. Also there is always the assumption that your health will hold out.
This is a very comprehensive overview, and a great video - thanks. I’m curious - how many years out from retirement does it makes sense to start planning this? It seems like we’re all guessing at future lax laws right now, but if retirement is farther away, it’s more of a guess. Is it best >7 years out to just focus on balancing the tax allocation buckets as much as possible? New rules will be there when you get there…
Wow! So much good information. You're site is my go to retirement tax planning channel. Keep up the great work and thank you.
Thank you Scott!
thank you for not talking so fast:)
Very informative, I think a series of videos breaking this down a bit.
Great video! I project out our assets, income, expenses and taxes for life. I am inflating the standard deduction and tax brackets with inflation. Do most tax advisors’ software do this? This makes RMDs look not as bad as I would have thought.
Excellent information. I may have to hire your firm in the near future.
Fantastic work Eric
Tnks for you the heck explanition
Could you provide a link to your "Putting the Right Assets in the Right Accounts" video you mention at 28:05 please?
Wow. Eric. Full of info. Actually understand everything. unfortunately , I have to do massive Roth conversions before 2026. And balance inherited Ira withdraws. It’s massive. Sigh.
Thank you! Agreed that inheritances can really throw a wrench in a tax plan.
@@SafeguardWealthManagement yes. It’s grown substantially, it went from $340k last year to 1 million now. I have 9 years to take out. All Tesla. Ha ha.
What is so unfortunate about a large inheritance?
Awesome overview, thanks!
Very informative thank you!!
you said to plan for what is going to happen in 25 years of retirement. How do you know what the tax laws/parameters are going to be in 5 years much less 25? Really interested in how you plan for that.
Outstanding presentation! Thanks for the information. I look forward to watching your other videos.
Thanks Mike!
I’ve got taxable, pretax, and Roth accounts. Which account should I take my “fun money” from? (fun money can be used any time…)
So so awesome. Thank you so much.
Most deductables on aca are more than 5000 per person. Bronze plans are 9000 per person max out of pocket. If you get the 5000 deductable plans are hundreds per person on premiums
Hi there! Great video. Just recently learned about roth conversions with your videos we watched. How does the job & tax cut apply when trying to convert our 401k to roth ira while employed? We called Fidelity & asked if we can convert and they said we couldn’t but We weren’t sure if the representative knew what she was talking about. Thank you soo much for all your great videos!!!
Great job explaining complex topics.
Thank you!
Great information. Could you create another that includes 20% declines in stocks and bonds that occurs on average every 10 years.
Great video! Thanks Eric!
You bet! Thanks Terry!
Good explanation and advice!
Great! And very thorough and well explained. Might mention in marriage QDRO (with younger spous) and QLACS and one off HSA payment as additional ways to reduce RMDs.
Cheers
Jef
cannyou add a video like this if you must take social security disability (based on different ages, what accounts you should draw from and when)?
Excellent video. Very clear explanations.
Thank you Mr. J!
Eric, can you show a forward looking tax plan with forced income (pension) and more detail on incorporating SS? Most pensions range from $70-150k per year for state and fed employees.
@Giselle. Social security benefits are cut via 2/3 of pension.
Most high pension earners plus spouse won’t be able to get SS.
Just Google Pension and social security offset
Please do some for peep w smaller amounts? So many are for >$1million what about those w
Thanks, great video. Seems like with a larger tax deferred account and need large ROTH conversion, you probably can forget about the ACA subsidy, subject to larger IRMAA penalties and better to delay S.S till 70. Would be nice to see a video for large accounts like $5M (maybe $2.8M in tax deferred, $1.9M in taxable (let says $0.9M LT gain), $0.3M Roth and 12 years to RMD. What will be the best tax efficient withdrawal to reduce taxes? I am sure married couple will do better than a single person since they can convert more in the same tax bracket.
Great suggestion Allan. I am planning on doing some case study withdrawal strategy videos in the future. Something similar to this situation will certainly be on the case study list.
Great video, I have the similar concern.
How to decide the IRMAA level a single taxpayer with large tax deferred accounts should convert to? Thanks.
have similar situation 2.8 M taxable, 1.4 Deferred ( IRA/401k ), .3 Roth... Thinking of building Self managed Annuity from Fidelity and move large portion of 2.8M Taxable to Annuity to control the income 2.8 M taxable is generating due to dividends. This video is great. I was planning to use 60-70 10 years to move 1.4 Deferred to Roth at 100K each year ( keeping net under 80K after standard deduction ), while realizing Capital gains in Taxable at zero rate ( however Dividend income really throws it off the track ). Let next generation deal with Annuity related Taxes much later on in case they do not get high income. Its good problem to have to be in position to pay taxes.... :) ... Any other ideas...
Would love to see a forward tax strategies with forced income above $70k
Will do in future videos!
NIce presentation. However, it would be nice to see more examples and your recommended action plan. Including an explanation as to why they should follow that specific strategy. Nice job!
Fair point. I was trying to avoid making this a 3 hour presentation. I am planning on recording case studies in terms of optimal withdrawal strategies
Awesome presentation
Thank you Joseph!
Thank you, well done.
My plan has always been to convert part of my tax deferred 401k into a Roth IRA, live off money from my pensions and what is left of my t401k, let the Roth grow over the next 10 years on my conversions. I would then draw from Social Security at age 70, and live off my pensions, Roth, and Social Security, and hope that my t401k has minimal distributions at 72.
Thanks Eric, very comprehensive!! Are there any conditions for single filers over 60 to commit Roth Conversions up to 32% (within Catch-Up Zone) and forego some ACA benefits to avoid SS Tax Torpedo and IRMAA penalties in the future?
Waiting on SS is a gamble on if you live long enough for not. Are you willing to take that gamble? People seem to be passing much young in my generation that previous so it doesn't appear to me we are actually living longer. Maybe one could take SS at 62 and invest it and then if they die early, at least the heirs will get some of it that the deceased has worked all their life paying into. If you need it, then you at least can take less from your retirement savings since you are getting SS and still leave a bit to the kidos. Everyone preaches delaying and the government hopes you do because they figure you will pass away before breaking even since Life Expectancy is 78 for a male and break even will likely be more like 81.
We only have two years before starting rmd,s and both of us are getting ss so I feel trapped!!! I wish I would have known about this clean up zone before I started social security
This video just came up on my YT feed, playing in the background. While your points about withdrawal optionality and cleanup zones are well-considered, two obvious gaps in your presentation were:
1. The prevent value of paying a tax now vs. 10 years in the future. This is even more relevant now with the higher discount rates.
2. You assume people have no income from their taxable portfolios. This will tend to blow up the zero percent LTCG space.
Without that 0% space and accounting for PV, how does your presentation change?
Good info. Been thinking about this now thay middle age.
Excellant presentation. Isn't it true that money you convert to Ruth IRA can not be touched for 5 years (both converted amount plus subsequent earnings)? If that were true, how do you have optionality by "pulling money out of Ruth"? Are you assuming we have a large enough non-converted money in the Ruth account to cover the amount you need to pull? Thank you.
Can one do Roth conversions prior to retiring ? Wonderful how you present this information.
Of course! You can perform a conversion at any time
Nicely done. I'm not understanding what "life expectancy factor" I would use if withdrawing IRA at age 65? The table I'm using starts at age 70 or I guess in 2022 72. Do I use the first year for each year until I reach my withdrawal year?
Excellent presentation, I appreciate you covering areas for early retirement folks on ACA.
Of course. Glad you found it helpful. Thanks!
i did as well. awesome video
Excellent
Thanks I am about to retire/ spouse is retire - list in jungle of taxes, needs help
Does it ever make sense for someone that is retired in their 50's and taking ACA, to forgo subsidies to convert IRA to roth and make up the tax loss on growth of the roth? Or is it always better to wait for the "cleanup zone', when medicare kicks in, to do conversions?
It depends on a person's situation. If someone has huge tax deferred balances and estimate RMDs are going to be large and destructive, it may make sense to prioritize conversions vs. a subsidy. It all depends on the situation.
Great info, clearly explained. Thank you!
Glad it was helpful. Thanks!