Hello all,
I am a single 53 year old male. I retired 3 months ago. Due to bonuses and severance I will report over $200K for this year so my 2016 tax bracket will be ~33%.
My question is, what is the best way to get a handle on minimizing my tax liability for the next 18-40 years? I have read quite a few posts about withdrawal strategies but I'm afraid I will get off track trying to navigate through this on my own.
My financial situation is this.
1) $1 million in MLP stock awards granted through my previous employers incentive program.
2) $800K in a Fidelity IRA created when my tax deferred 401K was rolled over to it 10 weeks ago.
I live very modestly and have zero debt, and about $3000 per year property and school taxes. No state income tax here in Texas. I am getting 4.5% annual dividend from the energy MLP or about $45,000, which is more than enough to live comfortably on.
I have evenly divided the IRA funds among 12 divested large cap non-energy stocks.
My problem is Capitol gains on the MLP. I have accumulated those shares over 10 years and some of them will generate 50% Capitol gains. Overall I estimate $300K will be taxed at 15% unless I can do something to prevent it.
Am I correct in that if I am in a 15% tax bracket I will pay zero Capitol gains? That means I need to keep my income below $37K right? Some (<10%) of the MLP stock will actually sell at a loss due to oil prices, so I could pair it with sale of some gain share lots to cancel each other out and reduce my share count, thereby reducing my dividend payments and convert those funds to CDs or MMs without generating any Capitol gains in the process. Mostly I need to figure out how to liquidate these shares and pay the minimum taxes possible. I love the stock and I'll probably turn around and buy it right back, setting a new base cost in the process.
I also hold out hope for managing to get some benefit from ACA enrollment next year without paying a fortune for it. I'm in perfect health at the moment.
Maybe this is a job for a financial advisor, but one guy quoted me $1800 to develop a plan. This is complicated for me but it seems like someone familiar with the rules should be able to figure it out with a spreadsheet.
Then I will need to deal with the intricacies of managing the IRA, when to start withdrawing it, and when to start social security.
I don't know what I don't know.
Thanks!
Allen
I am a single 53 year old male. I retired 3 months ago. Due to bonuses and severance I will report over $200K for this year so my 2016 tax bracket will be ~33%.
My question is, what is the best way to get a handle on minimizing my tax liability for the next 18-40 years? I have read quite a few posts about withdrawal strategies but I'm afraid I will get off track trying to navigate through this on my own.
My financial situation is this.
1) $1 million in MLP stock awards granted through my previous employers incentive program.
2) $800K in a Fidelity IRA created when my tax deferred 401K was rolled over to it 10 weeks ago.
I live very modestly and have zero debt, and about $3000 per year property and school taxes. No state income tax here in Texas. I am getting 4.5% annual dividend from the energy MLP or about $45,000, which is more than enough to live comfortably on.
I have evenly divided the IRA funds among 12 divested large cap non-energy stocks.
My problem is Capitol gains on the MLP. I have accumulated those shares over 10 years and some of them will generate 50% Capitol gains. Overall I estimate $300K will be taxed at 15% unless I can do something to prevent it.
Am I correct in that if I am in a 15% tax bracket I will pay zero Capitol gains? That means I need to keep my income below $37K right? Some (<10%) of the MLP stock will actually sell at a loss due to oil prices, so I could pair it with sale of some gain share lots to cancel each other out and reduce my share count, thereby reducing my dividend payments and convert those funds to CDs or MMs without generating any Capitol gains in the process. Mostly I need to figure out how to liquidate these shares and pay the minimum taxes possible. I love the stock and I'll probably turn around and buy it right back, setting a new base cost in the process.
I also hold out hope for managing to get some benefit from ACA enrollment next year without paying a fortune for it. I'm in perfect health at the moment.
Maybe this is a job for a financial advisor, but one guy quoted me $1800 to develop a plan. This is complicated for me but it seems like someone familiar with the rules should be able to figure it out with a spreadsheet.
Then I will need to deal with the intricacies of managing the IRA, when to start withdrawing it, and when to start social security.
I don't know what I don't know.
Thanks!
Allen