Your only real risk factor is divorce.
There are many people on this board (and many more in "real life") who have been totally blindsided when their spouse files for divorce.
Other than that, I second previous suggestions for Roth transfers after you retire.
Ralph
High-level early retirement plan - What do y'all think?
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Re: High-level early retirement plan - What do y'all think?
How do you end up with just $2 in interest income? I know the obvious answer is you don't have any of your taxable dollars in anything that earns interest, but where do you keep your emergency funds? And if you keep your money all in accounts that earn dividends then when you need it wouldn't you have capital gains?livesoft wrote: ↑Mon May 17, 2021 5:50 amI think you can be more tax-efficient. We just did our Federal tax return and had $2 in interest income which is taxed at our full marginal rate. For tax-efficiency we avoid interest income and would rather have qualified dividends which are taxed at a lower rate of 0% for us.
I'm just trying to learn here because we're recently retired and most (about 75%) of our money is in joint taxable accounts.
Re: High-level early retirement plan - What do y'all think?
See this thread for starters: viewtopic.php?t=87471calliecake47 wrote: ↑Tue May 18, 2021 1:56 pmHow do you end up with just $2 in interest income? I know the obvious answer is you don't have any of your taxable dollars in anything that earns interest, but where do you keep your emergency funds? And if you keep your money all in accounts that earn dividends then when you need it wouldn't you have capital gains?
I'm just trying to learn here because we're recently retired and most (about 75%) of our money is in joint taxable accounts.
Folks who fill out their tax returns may have learned that qualified dividend income is taxed at a rate as low as 0%. Folks will also know that long-term capital gains are taxed at a rate as low as 0% or those gains are offset by previous tax-loss harvesting, so they do not even appear on page 1 of Form 1040.
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Re: High-level early retirement plan - What do y'all think?
Thanks for the reference, it is very interesting. So in its simplest terms, if someone doesn’t have any capital losses left from TLH to carry over currently they would need to stay under $80,800 in QDI and LTCG and under $25,100 in income for married filing jointly, anything over that would be taxed. Given that scenario it seems as long as you have $4,000,000 or less in invested taxable accounts then you’d be able to stay under the $80K capital gains tax, assuming 2% QDI each year? (more or less)livesoft wrote: ↑Tue May 18, 2021 2:01 pmSee this thread for starters: viewtopic.php?t=87471calliecake47 wrote: ↑Tue May 18, 2021 1:56 pmHow do you end up with just $2 in interest income? I know the obvious answer is you don't have any of your taxable dollars in anything that earns interest, but where do you keep your emergency funds? And if you keep your money all in accounts that earn dividends then when you need it wouldn't you have capital gains?
I'm just trying to learn here because we're recently retired and most (about 75%) of our money is in joint taxable accounts.
Folks who fill out their tax returns may have learned that qualified dividend income is taxed at a rate as low as 0%. Folks will also know that long-term capital gains are taxed at a rate as low as 0% or those gains are offset by previous tax-loss harvesting, so they do not even appear on page 1 of Form 1040.