minnesotapaintlady
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Post by minnesotapaintlady on Mar 21, 2022 14:08:23 GMT -5
And that's one of the reasons I hang out on bulletin boards with perfect strangers. I once asked my brother, a retired tax CPA, if it was possible to get someone who could just go through my investments and tax returns and make suggestions for tax-reduction strategies. The one I did consult wanted to run a fancy-schmancy Monet Carlo simulation of my finances into the future and charge $1,000 for it. I get that already form another source. Brother said that kind of advice is hard to come by and expensive. So, I'm mostly picking up advice and insights along the way. (Mutual finds with low turnover, ETFs even better, in taxable accounts, stocks such as Berkshire in taxable accounts, high-turnover finds and anything else with potential short-term gains in IRAs, etc.) The Bogleheads one is really clever. It wouldn't have helped me since my birthday is in February. Yep, that's why I am on Bogleheads and read all sorts of threads about situations we'll probably never reach - but you never know what little tidbits might get mentioned, or trigger a brainstorm. I've gotten fascinated by McQ's threads. He seems to be an older professor who enjoys researching retirement issues and writing papers on his theories. Once he discovered Bogleheads, he started posting his early concepts there for tons of feedback and critique - it really gets into the weeds on fine details. Generally he's trying to figure out whether Roth converting is worth the tax cost, and when you should optimally touch the Roth balances (never), and if there's truly a surviving spouse tax torpedo. Never? What good does that do me?
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plugginaway22
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Post by plugginaway22 on Mar 21, 2022 16:45:37 GMT -5
Yeah, we always read about leaving the Roth balances alone so you can leave to heirs tax free...BS.
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minnesotapaintlady
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Post by minnesotapaintlady on Mar 21, 2022 18:07:56 GMT -5
Yeah, we always read about leaving the Roth balances alone so you can leave to heirs tax free...BS. BS is right. The only way it makes sense to me is if you already have so much that it doesn't matter and you're just trying to figure out which accounts you're leaving behind.
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haapai
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Post by haapai on Mar 21, 2022 18:56:28 GMT -5
Yeah, we always read about leaving the Roth balances alone so you can leave to heirs tax free...BS. BS is right. The only way it makes sense to me is if you already have so much that it doesn't matter and you're just trying to figure out which accounts you're leaving behind. Hey MSP, you aren't the only one who gets dizzy and loses focus when retirement planning starts talking about leaving a legacy. It baffles me too. I just want to be independent until I die or shortly before that. Leaving a legacy is really low on my list of goals and given the financial horror of what happens when you can no longer take care of yourself, not something that I'm interested in pursuing.
I also have difficulty reading stuff that was written for folks who have more everything than me. And it ain't just spite and envy talking. It is absolutely amazing how much personal finance boilerplate out there just does not apply to folks who have less income or fewer assets and just may be 180 degrees from the direction that they should be aiming at.
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CCL
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Post by CCL on Mar 21, 2022 19:39:16 GMT -5
Yeah, we always read about leaving the Roth balances alone so you can leave to heirs tax free...BS. BS is right. The only way it makes sense to me is if you already have so much that it doesn't matter and you're just trying to figure out which accounts you're leaving behind. I was thinking that, too. Why would I want to pay more taxes on my own money just so my kids can get even more of my money?
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teen persuasion
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Post by teen persuasion on Mar 21, 2022 20:35:52 GMT -5
Yeah, we always read about leaving the Roth balances alone so you can leave to heirs tax free...BS. BS is right. The only way it makes sense to me is if you already have so much that it doesn't matter and you're just trying to figure out which accounts you're leaving behind. Bingo! Yeah, a bunch of us pushed back on the "never", and McQ replied that he always uses a baseline scenario that was "normal" to him - which is high salaried professor in California. Huh. He'd set up these elaborate spreadsheet comparisons, base conditions, looking to prove/disprove some retirement finance belief. But to be able to quantify proof/disproof he'd define endpoints and ranges and ... to the point that anything outside his rules didn't count, err, exist. Ya know, like middle class income levels. Or people that don't have large pensions plus SS so need IRA withdrawals/RMDs for normal spending in retirement. Everything was about the optimal treatment of completely unneeded IRA funds and RMDs as they grow exponentially -heaven forbid! I still found his ideas fascinating, he explored a thought right out to every corner looking for a niche to exploit - but it was always every corner of his circle of experience. If he had no experience of something (EITC phaseout rate creating high marginal rates at low incomes), he didn't see it. But there are enough of us examining every aspect from our own POV that discussion was interesting and thorough - I'd learn new bits and have a better view of the whole scope of parts.
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Deleted
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Post by Deleted on Mar 22, 2022 6:20:56 GMT -5
BS is right. The only way it makes sense to me is if you already have so much that it doesn't matter and you're just trying to figure out which accounts you're leaving behind. Hey MSP, you aren't the only one who gets dizzy and loses focus when retirement planning starts talking about leaving a legacy. It baffles me too. I just want to be independent until I die or shortly before that. Leaving a legacy is really low on my list of goals and given the financial horror of what happens when you can no longer take care of yourself, not something that I'm interested in pursuing.
I also have difficulty reading stuff that was written for folks who have more everything than me. And it ain't just spite and envy talking. It is absolutely amazing how much personal finance boilerplate out there just does not apply to folks who have less income or fewer assets and just may be 180 degrees from the direction that they should be aiming at.
I remember back when I couldn't bear to read Money Magazine. I was married to the Ex, he was unemployed, we had a big mortgage, and he was spending money faster than I could make it although I DID max out my 401(k) and managed to stay out of credit card debt myself. It was all I could manage. Money Magazine would feature some smug-looking 30-something couple on its cover and you'd read that they had a paid-off house with a pool, she was a SAHM and they'd already fully funded future college expenses for their 5-year old and 7-year old and had $500,000 in retirement funds. I could not relate. As for leaving a legacy- in my case it's extremely likely that I WILL leave one if I don't spend 10 years in LTC. Even if you're on a track to spend down to zero, it's important to think about what accounts you draw from first. One interesting thing I learned recently is that if you want to leave $$ to charity its better to make THEM the beneficiary of your HSA rather than a person- a person will have to liquidate it and pay taxes on it. That way you can leave more tax-free to your heirs.
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tallguy
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Post by tallguy on Mar 22, 2022 8:17:34 GMT -5
Yeah, we always read about leaving the Roth balances alone so you can leave to heirs tax free...BS. BS is right. The only way it makes sense to me is if you already have so much that it doesn't matter and you're just trying to figure out which accounts you're leaving behind. I am almost certain to leave a significant amount, not because I "have so much" but because I don't spend a lot. I have never been one to spend money just because I can. There are some things that I plan to do like travel and home projects, but if I do them smartly over time I can cash-flow them out of the small ($10,000 or so) tax-free withdrawals from my IRA each year and the leftover day-to-day money from SS. I can leave my Roths for bigger things. I keep cars for a long time so should only need one more eventually. That may come from my Roth. Other than that (or perhaps LTC if it becomes necessary), a large unexpected home repair may be the only thing I'd have to do that way. If no LTC then a large Roth balance left. Not a bad thing. Do I think about the tax efficiency of different strategies? Absolutely. Who will pay less, myself or my heirs? I can sell from my taxable account and maybe pay capital gains tax while also making my SS taxable, or leave it to my son with a stepped-up basis so no tax due. Easy choice. Leaving an IRA balance would push him into a higher tax bracket when distributing the account. Leaving a Roth balance won't. Preference to the Roth. The likelihood is that there will be money left from all three types of account. If that's the case, great. I'm not going to deny myself anything that I really want, but there just isn't that much that I really want but don't already have or can't do with my current plan.
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minnesotapaintlady
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Post by minnesotapaintlady on Mar 22, 2022 8:57:00 GMT -5
BS is right. The only way it makes sense to me is if you already have so much that it doesn't matter and you're just trying to figure out which accounts you're leaving behind. I am almost certain to leave a significant amount, not because I "have so much" but because I don't spend a lot. I have never been one to spend money just because I can. There are some things that I plan to do like travel and home projects, but if I do them smartly over time I can cash-flow them out of the small ($10,000 or so) tax-free withdrawals from my IRA each year and the leftover day-to-day money from SS. I can leave my Roths for bigger things. I keep cars for a long time so should only need one more eventually. That may come from my Roth. Other than that (or perhaps LTC if it becomes necessary), a large unexpected home repair may be the only thing I'd have to do that way. If no LTC then a large Roth balance left. Not a bad thing. Do I think about the tax efficiency of different strategies? Absolutely. Who will pay less, myself or my heirs? I can sell from my taxable account and maybe pay capital gains tax while also making my SS taxable, or leave it to my son with a stepped-up basis so no tax due. Easy choice. Leaving an IRA balance would push him into a higher tax bracket when distributing the account. Leaving a Roth balance won't. Preference to the Roth. The likelihood is that there will be money left from all three types of account. If that's the case, great. I'm not going to deny myself anything that I really want, but there just isn't that much that I really want but don't already have or can't do with my current plan. There are lots of things I would love to have/do that I deny myself because I want to make sure I have enough to take care of myself. I imagine that retirement in my 60's I will be a lot more careful, but retirement in my 80's if there is a surplus not so much. At that point I want to be a blessing to people while I'm still alive rather than die with a big pot of money. Maybe it's selfish or control-freakish, but I want to be able to see that I made a difference, not just know that "when I die" this money will go to this charity or this person. To be able to gift things like a house down payment or a college education? That would make me really happy. Also, I really do not want to live off of SS and 10K/year in retirement. I've been living like that my whole life and it's nice to know I CAN if I have to and be fine, but man...I sure would love to be able to buy the toys and hire out the work and sit in first class for once.
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tallguy
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Post by tallguy on Mar 22, 2022 10:14:39 GMT -5
I am almost certain to leave a significant amount, not because I "have so much" but because I don't spend a lot. I have never been one to spend money just because I can. There are some things that I plan to do like travel and home projects, but if I do them smartly over time I can cash-flow them out of the small ($10,000 or so) tax-free withdrawals from my IRA each year and the leftover day-to-day money from SS. I can leave my Roths for bigger things. I keep cars for a long time so should only need one more eventually. That may come from my Roth. Other than that (or perhaps LTC if it becomes necessary), a large unexpected home repair may be the only thing I'd have to do that way. If no LTC then a large Roth balance left. Not a bad thing. Do I think about the tax efficiency of different strategies? Absolutely. Who will pay less, myself or my heirs? I can sell from my taxable account and maybe pay capital gains tax while also making my SS taxable, or leave it to my son with a stepped-up basis so no tax due. Easy choice. Leaving an IRA balance would push him into a higher tax bracket when distributing the account. Leaving a Roth balance won't. Preference to the Roth. The likelihood is that there will be money left from all three types of account. If that's the case, great. I'm not going to deny myself anything that I really want, but there just isn't that much that I really want but don't already have or can't do with my current plan. There are lots of things I would love to have/do that I deny myself because I want to make sure I have enough to take care of myself. I imagine that retirement in my 60's I will be a lot more careful, but retirement in my 80's if there is a surplus not so much. At that point I want to be a blessing to people while I'm still alive rather than die with a big pot of money. Maybe it's selfish or control-freakish, but I want to be able to see that I made a difference, not just know that "when I die" this money will go to this charity or this person. To be able to gift things like a house down payment or a college education? That would make me really happy. Also, I really do not want to live off of SS and 10K/year in retirement. I've been living like that my whole life and it's nice to know I CAN if I have to and be fine, but man...I sure would love to be able to buy the toys and hire out the work and sit in first class for once. Yeah, but I don't have to if I don't want to. There is plenty of money available if I identify something worth spending it on. I am still learning how to spend, but I will never learn how to waste. It is simply not in me. Increased travel? Check. Fix up my house the way I want it and so I can pass it on in good shape? Check. New vehicle? Check. Not much else I need and don't have.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Mar 22, 2022 14:16:57 GMT -5
I am almost certain to leave a significant amount, not because I "have so much" but because I don't spend a lot. I have never been one to spend money just because I can. There are some things that I plan to do like travel and home projects, but if I do them smartly over time I can cash-flow them out of the small ($10,000 or so) tax-free withdrawals from my IRA each year and the leftover day-to-day money from SS. I can leave my Roths for bigger things. I keep cars for a long time so should only need one more eventually. That may come from my Roth. Other than that (or perhaps LTC if it becomes necessary), a large unexpected home repair may be the only thing I'd have to do that way. If no LTC then a large Roth balance left. Not a bad thing. Do I think about the tax efficiency of different strategies? Absolutely. Who will pay less, myself or my heirs? I can sell from my taxable account and maybe pay capital gains tax while also making my SS taxable, or leave it to my son with a stepped-up basis so no tax due. Easy choice. Leaving an IRA balance would push him into a higher tax bracket when distributing the account. Leaving a Roth balance won't. Preference to the Roth. The likelihood is that there will be money left from all three types of account. If that's the case, great. I'm not going to deny myself anything that I really want, but there just isn't that much that I really want but don't already have or can't do with my current plan. There are lots of things I would love to have/do that I deny myself because I want to make sure I have enough to take care of myself. I imagine that retirement in my 60's I will be a lot more careful, but retirement in my 80's if there is a surplus not so much. At that point I want to be a blessing to people while I'm still alive rather than die with a big pot of money. Maybe it's selfish or control-freakish, but I want to be able to see that I made a difference, not just know that "when I die" this money will go to this charity or this person. To be able to gift things like a house down payment or a college education? That would make me really happy. Also, I really do not want to live off of SS and 10K/year in retirement. I've been living like that my whole life and it's nice to know I CAN if I have to and be fine, but man...I sure would love to be able to buy the toys and hire out the work and sit in first class for once. definitely I want to do those things too! I want to quit now, live large (-ish - at least occasionally), give impactful gifts, and leave a legacy..... not sure how far I will work to get all the last 3 in place. Market is up last 3/4 days, so blowing a bit of wind into the ole sails....
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Rukh O'Rorke
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Post by Rukh O'Rorke on Mar 22, 2022 14:18:16 GMT -5
just checked, tsla up 8%.....hold the phone.....
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pulmonarymd
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Post by pulmonarymd on Mar 27, 2022 12:32:55 GMT -5
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