RunningBum
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jun 18, 2007
- Messages
- 13,262
Too many factors to give an accurate answer, #1 being how long you will live.So if leaving an inheritance is important to me, does that mean a better approach would be to take SS earlier so I'm not drawing down from IRAs? I have 25% in taxable and 75% in tIRA. I am 62 now and maximizing ACA subsidies. Was planning to take SS at 65 when I can get Medicare. Then was going to do Roth conversions up to 12% as long as I could. My husband is 4 years younger and gets nominal SSDI. Feedback appreciated.
The way I see it, if I die early, I'll likely have left a lot of investment money untouched, and my heirs will be fine even though I did use more of my investment money from 62 to 70. If I die past the breakeven, the excess SS money can go to my heirs. So for me, deferring to 70 is probably better. Also, if somehow I do outlive my money, a higher SS will make me less of a burden to them. Of course if your health makes it unlikely for you to reach SS breakeven, taking it early probably makes sense.
Next factor is their tax bracket when they inherit vs. yours now. If you can convert your IRA at a lower rate than they would be paying if they have to liquidate your IRA in 10 years, your Roth conversions leave them better off. Better to receive Roth money already taxed (and reduced) by 12% tax than tIRA money yet to be taxed.
Those are the main things I see. There are no guarantees, but you can prioritize or offset conflicting factors.