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Tax deferred part of portfolio
Old 08-06-2014, 04:03 PM   #1
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Tax deferred part of portfolio

I am sure I am missing something or doing it wrong, but either way, I need your help.

When using FireCalc, you put Portfolio on the first page, I was putting my real numbers, but it dawned on me that almost 70% of my money is tax deferred. Would you be putting in a different numbers for Portfolio if all you had was after tax money? How much should I be putting tfor Portfolio (say, if I had 1M and 70% of that was tax deferred)?

Thank you.
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Old 08-06-2014, 04:42 PM   #2
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Some people do so-called "tax adjusting", but I do not. I am not going to be paying much in the way of taxes when I withdraw from my tax-deferred accounts because I have figured out a legal way of not paying taxes on that.

FIRECalc users should include taxes in their annual expenses which will then cover all possible scenarios. That way, they don't need to tax-adjust their portfolios. So if your portfolio is $1M and 70% tax-deferred, put in $1M for your portfolio.
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Old 08-06-2014, 04:50 PM   #3
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The spending should include the expected taxes. Even taxable accounts incur *some* taxes - depending on what you're invested in... Cap gains, dividends, etc.
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Old 08-06-2014, 05:00 PM   #4
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Some people do so-called "tax adjusting", but I do not. I am not going to be paying much in the way of taxes when I withdraw from my tax-deferred accounts because I have figured out a legal way of not paying taxes on that.
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Old 08-06-2014, 05:18 PM   #5
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Sure. I have $25M in tax-exempt bonds in my taxable account that I will use the tax-free dividends to live off of. Then I will convert a small amount tax-deferred account assets each year to a Roth IRA. I will only convert enough to keep me in the 0% tax bracket. Eventually, I will not have any tax-deferred money because it will have all been converted to a tax-free Roth IRA without paying any taxes.
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Old 08-06-2014, 06:01 PM   #6
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Sure. I have $25M in tax-exempt bonds in my taxable account that I will use the tax-free dividends to live off of.
Is that $25,000,000? Like 25 Million?
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Old 08-06-2014, 06:12 PM   #7
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Maybe. Maybe not.
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Old 08-06-2014, 06:20 PM   #8
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Maybe. Maybe not.
Well if it's $25k you're living off $60 a month. If it's $25 million it's $60,000.00 a month. Quite a spread.
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Old 08-06-2014, 08:21 PM   #9
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One of the nice things about these forums is that everybody is so down to earth and transparent. . . . and every now and then, a comment comes along and makes one just want to Laugh Out Loud!
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Old 08-06-2014, 09:38 PM   #10
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One doesn't need $25M in tax-exempt bonds to do Roth conversions at 0% tax. One could have $1M in a money market fund paying nothing while spending down that $1M because return of capital is tax-free.

There are a number of threads where people are not paying any taxes on their Roth conversions because the 0% tax bracket is so large. During a recent presidential election, we heard that 47% of Americans do not pay federal income tax, so that's a lot of taxes not paid.
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Old 08-07-2014, 10:02 AM   #11
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Bogleheads • View topic - How to pay ZERO taxes in retirement with 6-figure expenses
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Old 08-07-2014, 09:33 PM   #12
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Maybe. Maybe not.
Why do you waste your time with us peons. Have you been rejected by the wealthy elite. I find it hard to believe you have this money from living below your means like most people here. Maybe you won the lottery.
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Old 08-07-2014, 09:47 PM   #13
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Why do you waste your time with us peons. Have you been rejected by the wealthy elite. I find it hard to believe you have this money from living below your means like most people here. Maybe you won the lottery.
What can you say about such folks but "NEW MONEY"!
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Old 08-08-2014, 06:33 PM   #14
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No way in hell i would put 25mil in munis , assuming that was just about all of my egg.


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Old 08-08-2014, 09:25 PM   #15
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No way in hell i would put 25mil in munis , assuming that was just about all of my egg.


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Old 08-09-2014, 10:10 AM   #16
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That's not an egg, it's a very large chicken farm.
Free range munis.
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Old 08-09-2014, 10:16 AM   #17
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I figure my income needs assuming I will be paying taxes on all of my pension, SS and withdrawals at the current rates. Since some of my IRA money and SS will probably be tax free, that's bonus money for use in an unexpected emergency or if the travel bug bites again.
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