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Old 06-14-2015, 05:04 AM   #21
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Thanks for the advice, I guess it is a good problem to have. Was planning to retire in 2014 but lost a great son who was going to take over the business. Yes the cost of living in Georgia is rather low.

I am so sorry for your loss. I cannot imagine how painful that must have been.


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Old 06-14-2015, 12:18 PM   #22
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I am still stuck on the $140,000 in CD interest. I can't even wrap my mind around having $7,000,000 in CDs.
+1. $7MM is @ 2%. It could be as high as $10MM or $14MM considering rates over the past 8 years or so.

Even at 3.5% this would be almost $4MM in CDs.

Having trouble making the words go with the music.

If there's that much cash in CD's, you need more help than this forum can give. You need a good accountant. IMHO.
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Old 06-14-2015, 12:28 PM   #23
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+1. $7MM is @ 2%. It could be as high as $10MM or $14MM considering rates over the past 8 years or so.

Even at 3.5% this would be almost $4MM in CDs.

Having trouble making the words go with the music.

If there's that much cash in CD's, you need more help than this forum can give. You need a good accountant. IMHO.
I don't see anything wrong with having that much in Cds. He's getting $140K/yr to live off of without touching principle. Sounds like a great retirement to me and he doesn't have to worry about losing 40% with the next market crash. Sure, over 20+ years he'd probably be better off with a balanced portfolio of stocks and bonds but it's not necessary. He may lose a small amount of purchasing power over the years due to inflation but if he invests in 5 years or longer CDs then they should stay close to the inflation rate so shouldn't be a big deal.
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Old 06-14-2015, 12:39 PM   #24
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I don't see anything wrong with having that much in Cds. He's getting $140K/yr to live off of without touching principle. Sounds like a great retirement to me and he doesn't have to worry about losing 40% with the next market crash. Sure, over 20+ years he'd probably be better off with a balanced portfolio of stocks and bonds but it's not necessary. He may lose a small amount of purchasing power over the years due to inflation but if he invests in 5 years or longer CDs then they should stay close to the inflation rate so shouldn't be a big deal.
+1. I like the idea of CD ladders myself for those reasons. I know my grandfather did quite well with CD ladders during high inflation years. I also agree with Marko. With that much in CDs, if it were me I'd diversify (if you are not already), get help from a fee only planner and pay for expert tax help and possibly a custom retirement plan for your business.

Here is an article from Forbes on a household with $200K in income and no federal income taxes for some ideas:

http://www.forbes.com/sites/baldwin/...ay-zero-taxes/

"Our model portfolio for the Bostonians includes $2.5 million in U.S. stocks yielding 2%, $1 million in foreign stocks yielding 3.3% in cash plus 0.33% in foreign tax credits, $1.25 million in Massachusetts bonds, $1 million in tax-exempt bonds from other states, $750,000 in 20-year Treasurys yielding 2.8% and $500,000 in partnerships yielding 5%."

Sorry to hear about the loss of your son, pletal.
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Old 06-14-2015, 01:25 PM   #25
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Thanks for the advice, I guess it is a good problem to have. Was planning to retire in 2014 but lost a great son who was going to take over the business. Yes the cost of living in Georgia is rather low.

I am so very sorry for your loss. I can only imagine how tough this must be on your family.
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Old 06-14-2015, 01:40 PM   #26
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Pletal,
Given your circumstances, it is understandable why so much in CDs. You might look into municipal bonds to side step some taxation.
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Old 06-14-2015, 02:30 PM   #27
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Pletal, I, too am very sorry for your loss.

Back to your original question. You could hire an expensive tax attorney who could help you create some tax shelters. Just be sure you don't spend more money creating these shelters than you would save on taxes.
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