Search found 16667 matches

by celia
Wed Mar 27, 2024 9:46 pm
Forum: Personal Investments
Topic: Help | 85 Year Old about to Lose Home
Replies: 25
Views: 1776

Re: Help | 85 Year Old about to Lose Home

How do you see an irrevocable trust as helping anything? She still needs to pay back her debts since she was spending more than her income.
by celia
Tue Mar 26, 2024 8:24 am
Forum: Personal Finance (Not Investing)
Topic: Medicare question with no work history
Replies: 28
Views: 2229

Re: Medicare question with no work history

Question 2: Assume husband is 70 and is entitled to social security retirement benefits. When the never-worked spouse turns 65, she can get Medicare. Part A will be free for the wife. All the rest of the Medicare stuff applies for Part B, Part D, Part C, IRMAA, Supplemental. You can apply for Medicare and Social Security at separate times and at different times than when the spouse applies. Most people start Medicare at 65 unless they are still on an employer's insurance (from either their employer or their spouse's employer). The Medicare premiums depend on what plans you select and only the Medigap premium (ie, supplemental plan to Part B) will also be based on your age that year). Social Security benefits are based on the employee's (or...
by celia
Sun Mar 24, 2024 8:21 pm
Forum: Personal Investments
Topic: Dilemma of sorts…[asset allocation to reduce RMDs]
Replies: 16
Views: 2173

Re: Dilemma of sorts…[asset allocation to reduce RMDs]

I am 82. My RMDs are increasing. I did not convert money from the Traditional IRA to the Roth. That's the way things are supposed to work if you don't do Roth conversions. The RMD will keep growing as long as the yearly growth is more than the yearly withdrawal. But this usually changes direction in a person's late 80's as the growth rate starts to be less than the withdrawal rate. Of course, your age increases each year too and the divisor that goes with the year-end value decreases. (If/when you are 120, the divisor is two, meaning you have to withdraw half the year-end balance.) I suggest that after you withdraw the RMD, do Roth conversions (of stock funds) to the top of your current marginal tax bracket (and pay the taxes that you will...
by celia
Sun Mar 24, 2024 8:00 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard Tax Forms Missing Entire Funds?
Replies: 26
Views: 1435

Re: Vanguard Tax Forms Missing Entire Funds?

OP, Did you compare your documents to those found online? Maybe you were issued an amended form. Your case sounds different than most of us because you changed "platforms" in the middle of the year, thus incurring a tax form for each platform.
by celia
Sun Mar 24, 2024 2:42 am
Forum: Investing - Theory, News & General
Topic: direct roth ira contribution over MAGI limit
Replies: 5
Views: 530

Re: direct roth ira contribution over MAGI limit

If I recharacterize my 2023 direct Roth IRA contributions to traditional, and then convert it back to my Roth IRA by tax day, wouldn't it still be considered a 2023 backdoor roth IRA contribution and go on my 2023 8606? Both of you would ask your custodian to "recharacterize" ONLY your 2023 contributions. The custodian will calculate the gains or loss on those contributions and move that adjusted amount to your own traditional IRAs. (I assume your IRAs are empty now and will remain so at the end of this year.) Then you will file Form 8606 with your 2023 tax return with a note in the data file that on (date) you recharacterized your 2023 ($xxxx) Roth contribution to your traditional IRA when it was then worth ($yyyy--with gains/lo...
by celia
Sat Mar 23, 2024 11:38 pm
Forum: Personal Finance (Not Investing)
Topic: Can I really really afford a 3 million mortgage?
Replies: 104
Views: 9007

Re: Can I really really afford a 3 million mortgage?

I don't know if you can get a mortgage like that, which could be doubtful since a lender would rather spread the risks around and lend a million to each of 3 homebuyers instead.

But the big risk is what happens when you want to sell? There will be very few buyers eligible to even buy that house.

And are you prepared to pay property tax starting at over $40k each year with yearly increases? This is in addition to landscaping and pool maintenance and whatever monthly expenses there are.

Does any of this "make sense" to you? (meant to help you see the other side of your assumptions)
by celia
Sat Mar 23, 2024 11:15 pm
Forum: Personal Finance (Not Investing)
Topic: Use RMD to pay taxes
Replies: 30
Views: 2594

Re: Use RMD to pay taxes

My wife is a co-owner of her banking accounts and they have $300k in them. The bank account is irrelevant to any RMD except that the remaining RMD (not withheld for taxes) may not pass smoothly from an IRA held by one person into a checking account held by another person (DW would then be sole owner of the checking account, unless you mean a trust owns the checking account). This is even more reason to take the RMD early. And she is the sole trustee on the trust. So I think we're ok there. Being a trustee for MIL's trust is also irrelevant. The trustee is just the person authorized to take actions on behalf of the trust. It is the beneficiaries that will end up with the trust assets. (The same person can be a trustee and a beneficiary.) [a...
by celia
Sat Mar 23, 2024 10:52 pm
Forum: Personal Investments
Topic: Shares in Private Medical Group and Asset Allocation
Replies: 8
Views: 936

Re: Shares in Private Medical Group and Asset Allocation

I'd leave them out of your asset allocation just like I would your practice, your house etc. Thanks! That’s how I’ve got it, or plan to have it, in my investment spreadsheet. Maybe what I was really thinking was do I need to adjust my AA given the level of risk involved in this opportunity. I’m thinking the answer to that is probably ‘No’. I wouldn't include it in my AA either, just like I wouldn't include a small apartment building I might own. I know the renters could come and go just like other doctors come and go in your situation. I would be putting effort into both projects so that my future sale would make the business worth more. Think of this as a future asset that can have years of gains or losses along the way that are outside y...
by celia
Tue Mar 19, 2024 10:20 am
Forum: Personal Consumer Issues
Topic: Pretty set financially, but considering relocation to VHCOL (Bay Area) for the career/adventure
Replies: 49
Views: 5282

Re: Pretty set financially, but considering relocation to VHCOL (Bay Area) for the career/adventure

I think you should try it. If you've been thinking about moving there (here) for awhile and already have a guaranteed job, what's there to lose? If I were you, I would hate to look back in retirement thinking I should have moved and now regret it. You won't know for sure unless you give it a shot.

To put silicon valley into perspective, houses there have also doubled in value over recent years. In the future, would you have wished you had a million dollar house that doubled in value or a $300k house that doubled? And not every one in silicon valley is in tech. They have a range of all kinds of salaries and occupations. It's just that tech gets all the attention.
by celia
Tue Mar 19, 2024 8:16 am
Forum: Personal Finance (Not Investing)
Topic: Use RMD to pay taxes
Replies: 30
Views: 2594

Re: Use RMD to pay taxes

As to the when part, since withholding is seen as "timely" (IRS speak) you could do it at anytime, but I suspect most would wait until Nov. or Dec. Since she is elderly, I would take it EARLY in the year. If you wait and she dies that year, there may not be enough time to have the beneficiaries recognized by the custodian in order to transfer the assets. The beneficiaries might then have to take the RMD and increase their own taxes. The custodians are also very busy in December with year-end activities and clients who wait until the last minute. They might not get to her accounts until the following year and the account would be frozen during that time. While you are at it, make sure her beneficiaries are listed correctly on all ...
by celia
Tue Mar 19, 2024 3:30 am
Forum: Personal Finance (Not Investing)
Topic: When did you retire? Simple questions
Replies: 45
Views: 7370

Re: When did you retire? Simple questions

4) what is you annual spend? Right now with a paid off house and being on Medicare my core retirement budget is about $60K a year($5K a month) which is enough for a comfortable middle class lifestyle where I live. Without a paid off house that would be a lot higher. . . One advantage of having a paid off house is that with a $60K budget a couple will pay very little if any income taxes. We also spend around $60k a year which is about half of what we spent when the kids were living with us. We no longer have K-12 or college tuition to pay, the house is paid off, and we had "enough" saved for retirement. Our retirement income is more than we need due to two SS and two pensions, so we will always be in the "accumulating" s...
by celia
Sun Mar 17, 2024 4:09 pm
Forum: Personal Finance (Not Investing)
Topic: Reevaluating social security
Replies: 49
Views: 4598

Re: Reevaluating social security

Our cash on hand is extremely low. We just had another expense come up that will put it down to 10K. I would really like to start contributing money to it and get it back up. I would love to have about $100K on hand. With not that much in taxable (or not wanting to sell anything), maybe you've tax-deferred too much(???). If you have over a million in tax-deferred and over half of your portfolio is tax-deferred, there's a good chance that's what happened. To "fix" that, stop tax-deferring so much. The best account to keep tax-deferring going forward is an employer plan that gives you "free" money through an employer match. If this sounds like your situation, you are just deferring taxes now in exchange for larger taxes i...
by celia
Sun Mar 17, 2024 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: Reevaluating social security
Replies: 49
Views: 4598

Re: Reevaluating social security

geocache59 wrote: Sat Mar 16, 2024 5:27 pm I'm looking into Roth Conversions myself. I have to gather more information before I decide to do that. Husband definitely waiting until 70. I'm still undecided. I may have to wait until that age too depending on how much I am making.
If married, these decisions should be agreed on beforehand as you should want what is best for both the couple and the last survivor. The decisions should not be made individually, in my opinion.

Also, anyone can retire and not start SS immediately.
by celia
Sun Mar 17, 2024 11:08 am
Forum: Personal Finance (Not Investing)
Topic: RMDs On A Combined IRA With RMD/Non-RMD Age Gap
Replies: 6
Views: 468

Re: RMDs On A Combined IRA With RMD/Non-RMD Age Gap

It makes no difference if you both have the same custodian or not. Some couples (and Singles) intentionally have multiple custodians to "diversify" and use the best features of each. In an extreme emergency, the website of one could be down for several days, and they could withdraw some money from the other custodian. A big advantage of having different custodians, in my opinion, is if you each want your own assets to be inherited by your own relatives when you die. You could have some joint assets at a third custodian that you want each other to inherit, but your assets at the current custodian could go to your own relatives (as the accounts are currently set). I would think this would be a big decision at this point (and should ...
by celia
Sun Mar 17, 2024 12:47 am
Forum: Personal Finance (Not Investing)
Topic: tIRA to Roth IRA conversion and tax form
Replies: 8
Views: 1355

Re: tIRA to Roth IRA conversion and tax form

I started filling out entries in turbotax. But I notice that in the form 1099-R, in box-1 there is an entry of $6500.00 and in box 2a (taxable amount) there is also an entry of $6500.00 How can this be? The IRA was funded with my after tax dollars and I immediately transferred the amount to Roth IRA. Don't worry about box 2a. The custodian doesn't know (or care) if the contribution was deducted or not on your taxes. That is just between you and the IRS. When you entered the tIRA contribution in your software, it appears you didn't answer the interview questions properly. That's when you have a chance to say the contribution was not deductible. No tax form needs to be referred to at this point. And in some/most tax software systems, you nee...
by celia
Sun Mar 17, 2024 12:11 am
Forum: Personal Finance (Not Investing)
Topic: Estimating RMD Taxes for Retirement Planning
Replies: 15
Views: 1884

Re: Estimating RMD Taxes for Retirement Planning

RMDs are taxed as ordinary income, assuming you don't give them to charity using QCDs. It is the same as if your wages were increased by the same amount as the RMD is. If you have many years of preparing your own tax return, you likely already understand how your taxes basically increase as your Taxable Income (a line on the 1040) increases. Qualified Dividends and Long Term Capital Gains are still taxed at a more favorable rate just like before you retired. One change you need to expect is that your SS may or may not be taxed. For those with low Taxable Income, their SS may not be taxed at all, but as your Taxable Income increases, the SS starts to be taxed until 85% of your SS becomes taxed. That is one reason many Bogleheads don't start ...
by celia
Sat Mar 16, 2024 2:19 am
Forum: Investing - Theory, News & General
Topic: Bonuses from Brokerages tax implications
Replies: 19
Views: 1247

Re: Bonuses from Brokerages tax implications

I consider a bonus the same as growth in the account that received it. If it went into an tIRA, you will pay tax on it when it is eventually withdrawn. If it went into a Roth IRA, it can be withdrawn tax-free after you are 59.5 and a Roth IRA of yours has been open 5 years.

If it went onto a taxable account, there are no favorable tax rates such as Long Term Capital Gains or Qualified Dividends get. Instead, the bonus is fully taxed as interest or regular income. Tax forms will only be issued for bonuses going into a taxable account.
by celia
Mon Mar 11, 2024 11:07 pm
Forum: Personal Finance (Not Investing)
Topic: perfect credit rating, can’t use my credit
Replies: 18
Views: 2374

Re: perfect credit rating, can’t use my credit

OP, What do you mean when you say you "can't use my credit"? Don't those newer cards still work? If you need more credit, maybe you could ask 1 or 2 of them to raise your credit limit.
by celia
Mon Mar 11, 2024 8:20 am
Forum: Personal Finance (Not Investing)
Topic: Feeling stuck with the mortgage
Replies: 34
Views: 3463

Re: Feeling stuck with the mortgage

If you decide to live with the parents, wait until their construction is done. That will make it easier for the little ones and everyone else.
by celia
Mon Mar 11, 2024 3:22 am
Forum: Personal Finance (Not Investing)
Topic: Feeling stuck with the mortgage
Replies: 34
Views: 3463

Re: Feeling stuck with the mortgage

OP, I noticed a huge "clue" hidden in the middle of your post:
eyedrop wrote: Sun Mar 10, 2024 11:44 pm . . . 2 new babies and high risk medical bills, . . .
This sounds like you had twins (and medical bills) recently and your family has changed. I wouldn't be surprised if that is what is really bothering you.

Why don't you focus on your family for now and help out as needed. The house is changeable as needed, but the people are not. Focus for now on what is important--family.
by celia
Mon Mar 11, 2024 1:00 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contributions - how to enter earnings on taxes
Replies: 13
Views: 912

Re: Roth IRA Excess Contributions - how to enter earnings on taxes

We made Roth IRA contributions in 2023 that were in excess. What makes you think you made an excess contribution, unless you contributed to IRAs at more than one custodian? Was your income just too high that you weren't eligible or was it something else? I removed the excess + earnings on my account on 12/28/23. DH removed his excess + earnings on 1/2/24. We are both over 60 so withdrawals are penalty-free. According to TaxAct's page here (https://www.taxact.com/support/1280/2023/ira-or-roth-ira-excess-contributions), I do NOT enter the contributions as having been made (since they were removed in a timely manner), but I DO enter the EARNINGS as income in 2023. But where and how?! It looks like this should go on our 1040 on line 4b, IRA Di...
by celia
Sun Mar 10, 2024 7:19 pm
Forum: Personal Investments
Topic: Sharing why we went with Vanguard PAS
Replies: 69
Views: 6944

Re: Sharing why we went with Vanguard PAS

Just wanted to share with those searching for a financial advisor the reasons why my wife/I went with Vanguard PAS for management of our ira’s and non-ira portfolios (about $4 million). We are both retired and in our early 70’s. Fortunately, our Social Security and pensions more than cover any conceivable current or future event so we will never have to draw on our PAS portfolio except for the minimum RMD’s thus hopefully growing the portfolio in revocable living trusts for our kids and grandkids over a number of years. Boomer , Did they ever talk to you about your need (or not) to do Roth Conversions? Can you tell us what per cent of your portfolio was originally in traditional IRAs and Roth IRAs when you started with them? And what are t...
by celia
Sun Mar 10, 2024 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: How Much Cash Do You Keep In Your Home?
Replies: 207
Views: 15480

Re: How Much Cash Do You Keep In Your Home?

We have about $500 split in two locations. It is meant for natural disasters like earthquakes and fires when electricity / internet may not be available at local stores (thus leaving stores to only accept cash).
by celia
Sat Mar 09, 2024 10:49 pm
Forum: Personal Consumer Issues
Topic: How much do you spend a month on food?
Replies: 336
Views: 30418

Re: What's normal for grocery costs for a family?

madbrain wrote: Sat Mar 09, 2024 10:09 pm
celia wrote: Sat Mar 09, 2024 9:53 pm Save the receipts for a month to analyze them.
Costco saves the receipts for us, for much longer than 1 month. 2 years worth can be consulted online through the app or costco.com for analysis.
And they keep records much longer. I returned a watch last year that I had bought before the pandemic.
I think you missed my point which was to separate the food from everything else.

Even at a traditional supermarket, it is easy to spend money on pet food, meds, toilet paper,
and gift cards. Sometimes there are also Christmas trees and beach or BBQ accessories, none of which are "food".
by celia
Sat Mar 09, 2024 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: tIRA to Roth IRA conversion and tax form
Replies: 8
Views: 1355

Re: tIRA to Roth IRA conversion and tax form

Now we each have 3 papers from the brokerage - 1) Form 1099-R : this contains entries in box a and b ($6501.XX), 2) Form 5498 : this contains 3 entries 1. IRA contributions : 6500.00 5. Fair market value: 0.01 7. IRA type: IRA 3) Another form 5498 3. Roth IRA conversion amount: 6501 5. Fair market value: 7341.45 7. IRA type: Roth IRA I don't understand this. The Form 5498 shows your contributions for a year and the 1099-R is for the IRA withdrawal. [The Form 5498 is just filed away for your tax records.] If these are for the same person and all at the same custodian, is the last 5498 for a Roth contribution FOR the year 2022 but you contributed it between January 1, 2023 and April 15, 2023? If so, that should be a 2022 tax form that arrive...
by celia
Sat Mar 09, 2024 9:53 pm
Forum: Personal Consumer Issues
Topic: How much do you spend a month on food?
Replies: 336
Views: 30418

Re: What's normal for grocery costs for a family?

Costco is our primary source of groceries but we buy other household items there too which may be driving up my perception that we are spending too much on groceries. I don't want to shop at multiple places because I plan a higher value on my time. Tip #1. On the next few times you load your groceries on the conveyor belt, put all the edibles on first, then a bar indicating the next order. Follow that with your other items. When the checker comes to the bar, have them give you the total so far. They can even print it on the receipt. Then continue to the rest of the order. Save the receipts for a month to analyze them. Tip #2. Shop at a supermarket instead. Costco intentionally sells things in large quantities so that you buy (and eat) more...
by celia
Sat Mar 09, 2024 6:14 pm
Forum: Personal Finance (Not Investing)
Topic: QCDs before age 73?
Replies: 30
Views: 2493

Re: QCDs before age 73?

When withdrawing from tax deferred retirement accounts, QCDs get deducted from your taxable income on page 1 of the 1040, so they do have an impact on MAGI even before you reach the RMD age. Can you clarify what you mean here? QCDs are not part of your adjusted gross income at all, so what would they be reducing prior to RMD age? QCDs are IRA withdrawals that are given directly to charity (ie, can only be cashed by the charity, not the taxpayer). On Form 1040, the IRA withdrawal is reported on line 4a. Then the software asks what you did with the withdrawal (ie, where it went). When you say it was all given to charity, then it is backed out on line 4b. This all happens before the total income , Adjusted Gross Income (AGI) , (or MAGI) is ca...
by celia
Sat Mar 09, 2024 5:46 pm
Forum: Personal Finance (Not Investing)
Topic: QCDs before age 73?
Replies: 30
Views: 2493

Re: QCDs before age 73?

We started QCDs as soon as possible after we had converted all we needed to. That got rid of two accounts that we no longer had to think about. And when one of us dies and the survivor has cognitive issues, we won't be able to mess up our RMDs!

That's one less thing to think about in old age.
by celia
Sat Mar 09, 2024 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: How much Roth Conversion should I plan on?
Replies: 18
Views: 2571

Re: How much Roth Conversion should I plan on?

Current investments 3.6MM Trad/401K 1.9MM ... Taxable 450K (plus add sale of DW's business this year (~ 400-450K--no idea how much after taxes)) 529 plans ~70K but all all of that is earmarked for two kids (college need or eventual Roth conversion) SS expected--start at 70/68. ~95% of max for me, ~85% of max for DW ...Expected spend for first 6-11 years (175-200K/yr (including health care, taxes) Where is your income going to come from in order to spend this much? Do you have to sell something and get capital gains or withdraw from tax-deferred and pay taxes on every dollar withdrawn? My plan it to convert Trad to Roth up to the 12% or 15% tax bracket for the first 6 years (until I'm 65). Good luck with that. In order to get the income you...
by celia
Sat Mar 09, 2024 2:09 pm
Forum: Personal Consumer Issues
Topic: How could I have known dental claim would be denied?
Replies: 43
Views: 4595

Re: How could I have known dental claim would be denied?

If you were an insurance company, wouldn't it seem suspicious to you that a new enrollee had an expensive procedure soon after enrolling and will probably cancel the insurance as soon as s/he no longer needs it?

You can always call your state's department of insurance to see what they think. They might suggest you submit lots of info so they can look into it.
by celia
Sat Mar 09, 2024 2:49 am
Forum: Personal Finance (Not Investing)
Topic: UBS Won't Issue a Corrected 1099
Replies: 14
Views: 1429

Re: UBS Won't Issue a Corrected 1099

I agree there is nothing to worry about. In the worst case, in a year or two she might get a letter from the IRS, if they are confused. After BIL sends in a copy of the account statement showing the return of the money into the same account, they will understand what happened.

Have him save the statement with her copy of the tax return.
by celia
Sat Mar 09, 2024 2:36 am
Forum: Personal Finance (Not Investing)
Topic: [Impacted by] pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it?
Replies: 50
Views: 4306

Re: Fidelity misinformed me about pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it

To be more precise, I think this is what you meant to say (terminology is important here): For 2023 I did the backdoor-Roth contribution of 6.5k in Sep-2023 by transferring making a non-deductible contribution of 6.5k into a "Traditional IRA" (that had almost 0 dollars) and then transferring converting those 6.5k to a Roth-IRA, just as Fidelity had told me to do it when I contacted them over phone just before doing the transaction. The rep never mentioned the tax-issue related to pro-rata rule considering I already had 200k in rollover-IRA. The rep doesn't have any idea if some of the money in the IRA is post-tax or not. That is just between you and the IRS. How is any custodian supposed to know what you put on your tax form or if...
by celia
Tue Mar 05, 2024 6:36 am
Forum: Personal Consumer Issues
Topic: Experiences with special orders with Home Depot and Lowes
Replies: 16
Views: 1881

Re: Experiences with special orders with Home Depot and Lowes

I needed to order a new bed and mattress for a disabled relative on the other side of the country who was moving. I needed a wooden bed with storage drawers underneath and a headboard, so I ordered both the bed and mattress from HD and paid for someone to assemble it, but ended up with a bad service. The assembly wouldn't even be scheduled until a week after delivery (and the relative had moved to the new address). So I had to scramble to find someone local to put everything together. Then I found out the mattress was too skimpy (didn't look like the online photo). So I ordered a new one through HD and HD said I would get my money back for the first one if it was returned. (They would eat the cost since mattresses can't be re-sold.) So a ne...
by celia
Sun Mar 03, 2024 3:15 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion during retirement question
Replies: 51
Views: 5850

Re: Roth conversion during retirement question

Just because your mom is eligible for Medicare, she isn't required to start it yet. She can start as late as age 70 and for each year she waits past her Full Retirement Age (close to 77 for her), her monthly benefit will be increased by 8% for each year she waits and it will continue for the rest of her life. Where else can you get such a guaranteed rate? (Note that if your Father's benefit is a lot more than hers, if he dies first, she could take his instead. And starting hers before 67 will reduce how much of his she will get.) Uh, there is no advantage in waiting to take Medicare in terms of increased benefits . . . It's pretty clear from context that "Medicare" is a typo & celia meant to write "Social Security" ...
by celia
Sun Mar 03, 2024 2:50 pm
Forum: Personal Investments
Topic: Backdoor Roth Contribution Clarification
Replies: 8
Views: 750

Re: Backdoor Roth Contribution Clarification

Before we do this do you have a workplace plan like a 401k that might accept the pretax tira amounts to clear the way? My plan is through ML, don't think I've seen anything like that. Speaking with a VG advisor tomorrow to finalize the plan, currently thinking I'm just going to proceed with the conversion and pay the tax this calendar year and then be clean moving forward. There is nothing to "see" except past tax returns where you didn't take a deduction for an IRA contribution. That is tracked over the years by looking at your past Form 8606s (which you haven't yet needed to file). For example, if you had two IRA accounts at V and F and all the IRA contributions at V were deducted but none of the contributions going into the IR...
by celia
Sun Mar 03, 2024 2:24 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion during retirement question
Replies: 51
Views: 5850

Re: Roth conversion during retirement question

delamer wrote: Sun Mar 03, 2024 12:30 pm Uh, there is no advantage in waiting to take Medicare in terms of increased benefits . . .
Uummmm...

There certainly is or everyone would start SS on the day they turn 62.

The calculations are mathematically neutral at around age 87 in that you can take discounted benefits for more months or increased benefits for fewer months. In any case, you would end up with about the same cumulative payout at around 87.

Waiting until 70 to start collecting will give you more if you live past the break-even point and give you more room in your tax bracket between retirement to age 70 to do Roth conversions or make other major changes.
by celia
Sun Mar 03, 2024 11:33 am
Forum: Personal Finance (Not Investing)
Topic: Roth conversion during retirement question
Replies: 51
Views: 5850

Re: Roth conversion during retirement question

I'm not understanding unless you're referring to other taxes in the year of a conversion and not IRMAA. I thought the income for each year determines IRMAA for two years later only. Of course for the year you do the conversion the extra income affects your tax bracket and NIIT, but that's not IRMAA. +1 How can an ~120k 401k be an ~6k RMD? Does it seem to high or low to you? That's what the RMD calculator resulted. Rough math says about right. First RMD divide account by ~4. Assuming starting around 72. Huh? 120k/4 = 30k RMDs starting at about 72 or 73 start at roughly 4%. 120,000 x 0.04 = $4,800 Close enough to $6k for me, especially since it is an annuity which is probably calculating the same amount for each year going forward.
by celia
Sun Mar 03, 2024 10:55 am
Forum: Personal Finance (Not Investing)
Topic: Roth conversion during retirement question
Replies: 51
Views: 5850

Re: Roth conversion during retirement question

..,My father is already on medicare and my mother will be eligible for medicare later this year... Just because your mom is eligible for Medicare, she isn't required to start it yet. She can start as late as age 70 and for each year she waits past her Full Retirement Age (close to 77 for her), her monthly benefit will be increased by 8% for each year she waits and it will continue for the rest of her life. Where else can you get such a guaranteed rate? (Note that if your Father's benefit is a lot more than hers, if he dies first, she could take his instead. And starting hers before 67 will reduce how much of his she will get.) Then, while not taking SS, there is more room in their tax bracket to convert! My father will be forced to take ou...
by celia
Sun Mar 03, 2024 8:55 am
Forum: Personal Finance (Not Investing)
Topic: Not understanding taxes and why I owe money
Replies: 50
Views: 4914

Re: Not understanding taxes and why I owe money

You probably understand taxes. at least for the parts that apply to you, but not the W-4 you file with the employer. There can be several reasons for this: your income could be vastly different each year, such as in having huge dividends or capital gains in some years but not others, your exemptions could vary, or a dependent is no longer a dependent. Maybe you and your spouse have multiple jobs. In which case none of the employers know (or care) about your other sources of income. I used to put down 99 dependants and then split the expected tax that was owed into 12 monthly withholdings since I was paid monthly. My withheld taxes came out very close to my tax liability each year. One year I was within $100 of what our liability was. Then o...
by celia
Sat Mar 02, 2024 9:07 pm
Forum: Personal Investments
Topic: Convert $1M+ to Roth while in high tax bracket?
Replies: 33
Views: 4365

Re: Convert $1M+ to Roth while in high tax bracket?

Currently, I work and am in the highest tax bracket. Spouse does not work. We are both 38 years of age. Ongoing annual retirement contributions are currently $83K comprised of $14K in Backdoor Roth, $23K Pre-tax 401K, $11.5K Employer match Pre-tax, and $34.5K aftertax which has ongoing in-service conversion to ROTH. I expect to continue to contribute to our 401K balances for at least another 10 years. Combined 401K balances are as follows: Pre-Tax: $1,148,133 After Tax (Basis only): $223,765 Roth: $52,906 Totals: $1,424,804 I'm not sure I understand your balance(s), but it seems like there is more than one 401K here, either your spouse's or from more than one employer. I see it much like you do, GolfnCycle , but wouldn't convert everything...
by celia
Sat Mar 02, 2024 7:32 pm
Forum: Personal Finance (Not Investing)
Topic: Questions on 1099-Rs from Fidelity for Backdoor Roth Conversion
Replies: 22
Views: 1385

Re: Questions on 1099-Rs from Fidelity for Backdoor Roth Conversion

careerdata wrote: Sat Mar 02, 2024 6:25 pm Entering the information is somewhat counter-intuitive in that you need to enter the conversion information before entering the TIRA contribution.
I believe that some software packages allow you to report the conversion before the non-deducible contribution. But, that seems confusing to me. How will the Roth conversion step even know you previously made an tIRA contribution (and the amount) AND that it was not deductible if you haven't yet told the software? I would report the contribution first and review every line of Form 8606 before filing.
by celia
Sat Mar 02, 2024 7:17 pm
Forum: Personal Finance (Not Investing)
Topic: Questions on 1099-Rs from Fidelity for Backdoor Roth Conversion
Replies: 22
Views: 1385

Re: Questions on 1099-Rs from Fidelity for Backdoor Roth Conversion

The Form 5498s for 2023 won't arrive until May since we can still contribute for 2023 up until April 15, 2024.

The Form 5498s that you are looking at must be from past years and you should file them away with your copy of the tax returns for those years. Look at the year shown at the top of each form.
by celia
Thu Feb 29, 2024 10:45 pm
Forum: Personal Investments
Topic: Separate Vanguard Broker Account for each Mutual Fund
Replies: 8
Views: 1330

Re: Separate Vanguard Broker Account for each Mutual Fund

Therefore, here's my plan . . . • Create a separate broker account for each non-retirement fund held by Vanguard. That will give me greater flexibility. Based upon the value of each separate account, I can be more creative in assigning beneficiaries. Is that a reasonable plan? I'm not sure that will work at Vanguard as you intend. Have you talked to them about having multiple Taxable accounts, each having a different beneficiary or group of beneficiaries? I say this because there have been discussions here about having multiple IRAs with different beneficiaries on each one. Vanguard is different than other custodians in that they see each type of account as one big account that can be broken up into smaller pieces, thus having the same ben...
by celia
Thu Feb 29, 2024 8:59 pm
Forum: Investing - Theory, News & General
Topic: What good is tax deferred?
Replies: 122
Views: 15670

Re: What good is tax deferred?

cooperdog wrote: Wed Feb 28, 2024 5:39 pm I'd like to have a better understanding, so I can tell my 30-something children how much tax deferred to have. Is there a rule of thumb for young people?
In general, your early years of working are your lowest-paid years and thus your lowest tax bracket years. As you work and gain more experience, your pay tends to increase more than just for inflation. So, it is good to contribute to Roth accounts when you are young and just let that money grow for 20, 30, or 40 years.

After you've worked for about 10 years and see your tax bracket increase, that is when you should contribute to tax-deferred instead.
by celia
Thu Feb 29, 2024 2:10 am
Forum: Personal Investments
Topic: Portfolio Review Request for Young Adult and Recent Graduate Starting First Job
Replies: 12
Views: 1556

Re: Portfolio Review Request for Young Adult and Recent Graduate Starting First Job

Tax Rate: [*] Federal: 12% (after deductions, I think), 22% before deductions. [*] State: 4.75% A lot of people, especially newbies, don't calculate their 'marginal tax bracket' correctly. That tells you how much more in federal taxes you would pay if you had an additional $100 in taxed income that year. (Example: If you added another $100 to your wages and your federal tax went up $22, then you are in the 22% tax bracket.) I'm reviewing this not only for Swallowtail, who already seems to know how to calculate it (by possibly using software), but for other newbies too. Let's assume for a minute that your only income that was subject to federal taxation was your wages of $60,000. Using the tables on this page and assuming you are Single, th...
by celia
Wed Feb 28, 2024 12:18 pm
Forum: Personal Investments
Topic: Roth Conversion or not?
Replies: 13
Views: 1085

Re: Roth Conversion or not?

Jack FFR1846 wrote: Wed Feb 28, 2024 11:02 am It does help, of course that RMD ages have gone up to 73 or 75 depending on your birth date, so more time to Roth convert.
. . . and more time for the tax-deferred balances and RMDs to grow . . .
by celia
Wed Feb 28, 2024 10:18 am
Forum: Personal Investments
Topic: Roth Conversion or not?
Replies: 13
Views: 1085

Re: Roth Conversion or not?

Welcome to Bogleheads! We're glad to see newbies post here. Will you have to take Required Minimum Distributions from the TSP at some point and how many years from now is that? This looks like a potential tax problem could be ahead. Once we retire, many of us find that it is better to keep our taxes (and Taxable Income--a line on the tax form) level over our remaining years rather than have a few years of low taxes (in our early retirement years) followed by many more years in high tax brackets later on (once RMDs start). A major way to do this is to do enough Roth conversions in early retirement to lower the future RMD. I hope this helps answer your question, at least partly. Of course, we don't know your entire situation but if you care t...
by celia
Mon Feb 26, 2024 11:43 pm
Forum: Personal Finance (Not Investing)
Topic: Medicare: Medicare Advantage to Medicare Original
Replies: 9
Views: 1471

Re: Medicare: Medicare Advantage to Medicare Original

I wouldn't wait until October's open enrollment. That is primarily for changing your Medicare Advantage plan and Drug plan for the following year. (Your state may also have a variation of rules, such as California lets you change supplemental plans in your birth month, but not if you are on a Medicare Advantage plan.

But since your birthday is in May, you can sign up for Medicare in the three months BEFORE May and the three months AFTER. So go ahead and have your surgery as soon as possible, recuperate, then choose any plan you want until May + 3 months (August).

I suggest you confirm this with Medicare and your state's SHIP office, in case things have changed and I'm out of date.
:beer
by celia
Sun Feb 25, 2024 10:00 pm
Forum: Personal Investments
Topic: Finances in retirement
Replies: 30
Views: 5100

Re: Finances in retirement

Mildot wrote: Sun Feb 25, 2024 8:32 pm My plan is to plug along until the end and leave the remainder to my two nephews, I am sure they will go through it 8-)
I was going to ask if you've done estate planning, but you must have read my mind...

I would delay SS until age 70 and do some Roth conversions during that time since your future RMDs will increase your yearly Taxable Income. But if you were going to leave the tax-deferred accounts to charity, it wouldn't make as much sense to convert since the charity wouldn't have to pay taxes on the withdrawal.

One thing you do need (if you haven't signed them yet) are Durable Powers of Attorney for finances and for Health Care decisions, in case you become unable pay your bills or to speak for yourself.