Ari, you're the second CFP that I've seen point out that (for some folks) simply spending more can solve the whole future RMD potential issue. very well-done, sir.
It's helpful to remind the client they did well when faced with an RMD dilemma. I don't know of anyone that is thrilled to pay taxes, but the fact that you are paying taxes implies that you are, at a minimum, earning above the standard deduction amount. Each video you share with your audience has a life lesson take-a-way, and a bit of humor to make the cauliflower a bit more palatable.
Good video! Let's say my plan is to retire at 60 and take Social Security at 70. Would it be best to pull money from my Pre-tax accounts (403b and Traditional IRAs) to live on (lets assume annual expenses of $70,000 per year) from age 60-70 or use my brokerage account for my expenses? I see the advantage of using my pre-tax due to it resulting in lower RMDs at age 75 and lowering the amount of my SS being taxed. Do you have a video explaining a similar scenario?
What do you think about investing the traditional pre- tax in lower risk bond investments, while keeping the Roth portions more stock heavy. This will allow you to better predict the size of the traditional accounts to make tax planning easier. With a more aggressive stock allocation in the Roth accounts, the bulk of the growth will come out tax free...
One question, lets say they spend more now out of their traditional ira/401K. Its true that it will decrease RMD's later because there is less in the account, but it will also increase their taxes now. perhaps at a higher tax rate if they are still working. So maybe more of a wash from a strictly financial perspective? But I guess the bottom line is withdraw it now, pay tax & have a good time. Versus, withdraw later & be forced to pay tax when you might not have a good use for it.
You have to also consider the opportunity cost if the stock market crashes and say 25% their 401k balance evaporates. Better to consume some of it (and pay tax on it) in the scenario that the stock market crashes.
I think the bottom line is to live life to its fullest while you can and figure out what you NEED to have saved for later. It's tempting to keep the nest egg growing and growing and growing, but if there is no target for those funds at the end of your life (family legacy, charity), you will have a very expensive casket or urn.
If you are working and taking social security before the full retirement age, you do not get the full benefit amount. Penalties start after $22,320 of earned income. I am not sure why anyone would do that instead of delaying social security until 67.
Ari, you state that if a person does a conversion they can save $X in taxes and have $X million more (per the software) , however you aren’t qualifying that statement that these numbers are only if they live to the end of their plan. Can you do a video or add in your future videos something about this fact. Maybe a future video on the break even age… you must live beyond X years old to actually save taxes and make more money then not converting. Thanks.
Ari, you state that if a person does a conversion they can save $X in taxes and have $X million more (per the software) , however you aren’t qualifying that statement that these numbers are only if they live to the end of their plan. Can you do a video or add in your future videos something about this fact. Maybe a future video on the break even age… you must live beyond X years old to actually save taxes and make more money then not converting. Thanks.
Ari, you're the second CFP that I've seen point out that (for some folks) simply spending more can solve the whole future RMD potential issue. very well-done, sir.
Thank you :)
It's helpful to remind the client they did well when faced with an RMD dilemma. I don't know of anyone that is thrilled to pay taxes, but the fact that you are paying taxes implies that you are, at a minimum, earning above the standard deduction amount. Each video you share with your audience has a life lesson take-a-way, and a bit of humor to make the cauliflower a bit more palatable.
RMD = you did good!!!
Good video! Let's say my plan is to retire at 60 and take Social Security at 70. Would it be best to pull money from my Pre-tax accounts (403b and Traditional IRAs) to live on (lets assume annual expenses of $70,000 per year) from age 60-70 or use my brokerage account for my expenses? I see the advantage of using my pre-tax due to it resulting in lower RMDs at age 75 and lowering the amount of my SS being taxed. Do you have a video explaining a similar scenario?
What do you think about investing the traditional pre- tax in lower risk bond investments, while keeping the Roth portions more stock heavy. This will allow you to better predict the size of the traditional accounts to make tax planning easier. With a more aggressive stock allocation in the Roth accounts, the bulk of the growth will come out tax free...
Asset location my friend
One question, lets say they spend more now out of their traditional ira/401K. Its true that it will decrease RMD's later because there is less in the account, but it will also increase their taxes now. perhaps at a higher tax rate if they are still working. So maybe more of a wash from a strictly financial perspective? But I guess the bottom line is withdraw it now, pay tax & have a good time. Versus, withdraw later & be forced to pay tax when you might not have a good use for it.
You have to also consider the opportunity cost if the stock market crashes and say 25% their 401k balance evaporates. Better to consume some of it (and pay tax on it) in the scenario that the stock market crashes.
I think the bottom line is to live life to its fullest while you can and figure out what you NEED to have saved for later. It's tempting to keep the nest egg growing and growing and growing, but if there is no target for those funds at the end of your life (family legacy, charity), you will have a very expensive casket or urn.
In the example shown at 5:13, How does social security go down for 3 years? It drops from 20k to 15k then goes up from there?
If you are working and taking social security before the full retirement age, you do not get the full benefit amount. Penalties start after $22,320 of earned income. I am not sure why anyone would do that instead of delaying social security until 67.
@@vchap01 thanks!
Interested in using the Retirement Tool, can it do everything you are showing us on your videos...ty
Yes. See here: ari-taublieb.mykajabi.com/early-retirement-academy
Yes, I bought the software, it's an excellent tool with access to everything shown here.
@@sjwoz ty very much for your response!
@@earlyretirementari do you offer any coupon codes now or in the near future...ty
Just want to make sure, will the Tool we buy show you Roth conversions and the best time to do them if it's a good idea or not...
Ari, you state that if a person does a conversion they can save $X in taxes and have $X million more (per the software) , however you aren’t qualifying that statement that these numbers are only if they live to the end of their plan. Can you do a video or add in your future videos something about this fact. Maybe a future video on the break even age… you must live beyond X years old to actually save taxes and make more money then not converting. Thanks.
As someone likes to say: “don’t let the tax tail wag the life dog.”
you take your minimum and just dump what you don't need into another brokerage account.
I sell all my stocks every year - It turns all my money into roth-buy back at higher prices. It's logic and not rocket science.
Ari, you state that if a person does a conversion they can save $X in taxes and have $X million more (per the software) , however you aren’t qualifying that statement that these numbers are only if they live to the end of their plan. Can you do a video or add in your future videos something about this fact. Maybe a future video on the break even age… you must live beyond X years old to actually save taxes and make more money then not converting. Thanks.
Done :) - th-cam.com/video/EaRx7GO-hQk/w-d-xo.htmlsi=UpgadgnCKh5me2yt