Mr Gadget
Dryer sheet aficionado
- Joined
- Jul 17, 2009
- Messages
- 27
Trying to figure out two confusing tax issues. Acknowledge that we're lucky to have them. Our current financial advisor is still vauge on solutions, so I thought I'd query the group here and see if anyone else had navigated these issues before.
Been FIRE'd and living fine on a modest military pension for the last decade, still got another decade until I'm even Medicare and SS eligible. Haven't been able to add to IRA's in the meantime because I don't have eligible 'income.'
Just got married again. Spouse works for the FED and can retire at 57 in about 6 years. So now I can add to a spousal ROTH IRA for the next few years and plan on maxing it. Due to an eventual inheritance income, ROTH is smarter than traditional. I also am considering selling a small amount of inherited stock this year as well, but our combined income will probably push us into at least the 15% capital gains tax on it. Not sure if we can claim married filing seperately to avoid this, as my pension income is 1/3 hers and seperately I would avoid the capital gains threshold. We'll do the tax prep software work both ways for our specific situation, but wanted to know if anyone had done something similar before.
Also need to do some planning for converting both of our individual TSP's into ROTH's, after she retires (and our income drops to just my pension or both of our pensions when she turns 60/62) and before we have to start taking RMD's. My eventual inheritance will push us up several tax brackets, so converting to ROTH seems like the smartest decision to keep 'our saved money' from paying the eventual inheritances tax rates.
And as always, no inheritance is guaranteed, but I want to start planning, as I'm a trustee on parents estate (Alzheimer's sucks, wish my parents were traveling on their money, not in memory care), and while it may be nice to eventually get a large inheritance, it's going to require more planning than I expected to deal with, and potentially will screw up my modest income retirement plans.
Been FIRE'd and living fine on a modest military pension for the last decade, still got another decade until I'm even Medicare and SS eligible. Haven't been able to add to IRA's in the meantime because I don't have eligible 'income.'
Just got married again. Spouse works for the FED and can retire at 57 in about 6 years. So now I can add to a spousal ROTH IRA for the next few years and plan on maxing it. Due to an eventual inheritance income, ROTH is smarter than traditional. I also am considering selling a small amount of inherited stock this year as well, but our combined income will probably push us into at least the 15% capital gains tax on it. Not sure if we can claim married filing seperately to avoid this, as my pension income is 1/3 hers and seperately I would avoid the capital gains threshold. We'll do the tax prep software work both ways for our specific situation, but wanted to know if anyone had done something similar before.
Also need to do some planning for converting both of our individual TSP's into ROTH's, after she retires (and our income drops to just my pension or both of our pensions when she turns 60/62) and before we have to start taking RMD's. My eventual inheritance will push us up several tax brackets, so converting to ROTH seems like the smartest decision to keep 'our saved money' from paying the eventual inheritances tax rates.
And as always, no inheritance is guaranteed, but I want to start planning, as I'm a trustee on parents estate (Alzheimer's sucks, wish my parents were traveling on their money, not in memory care), and while it may be nice to eventually get a large inheritance, it's going to require more planning than I expected to deal with, and potentially will screw up my modest income retirement plans.
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