ncbill
Thinks s/he gets paid by the post
The answer is to retire early enough to be able instead to do years of $50k conversions, as we do, remaining within the 12% (MFJ) federal bracket.
Roth convert 500k - tax only 125k
- Thread starter JoeWras
- Start date
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Hear, Hear!
The extra time before IRMAA and RMDs, etc. was well used by us. We converted every tIRA to Roth and moved some 401(k) money to tIRAs to convert.
Make hay while the sun shines.
HaveEnough
Dryer sheet aficionado
Keep the funds in the traditional.
Form a foundation.
Donate to the foundation tax free as your RMD or more.
Use the funds for charity you like AND administration costs... 5% of the value in the foundation every year. Add minors to the staff, it is allowed to train the next generation. Have annual meetings that the staff costs are paid as admin...
Form a foundation.
Donate to the foundation tax free as your RMD or more.
Use the funds for charity you like AND administration costs... 5% of the value in the foundation every year. Add minors to the staff, it is allowed to train the next generation. Have annual meetings that the staff costs are paid as admin...
fishfactory
Recycles dryer sheets
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- May 9, 2017
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- 84
As already stated, the IRS is now all over this easement write-off. They also try the same thing with buying a partnership in an oil well. If it's too good to be true......run.
ychuck46
Recycles dryer sheets
Makes Sense
Sounds like he honed his pitch while he was selling timeshare units. Now he has become the "world's most successful financial advisor". Run away.
Sounds like he honed his pitch while he was selling timeshare units. Now he has become the "world's most successful financial advisor". Run away.
ychuck46
Recycles dryer sheets
Spot on
Agree completely. Should have started young(er) when doing this since when I got around 60 and tried it I found the taxes too onerous. Didn't do it again and will now be staring RMDs in the face in a few years with a decent tax bill as well.
Agree completely. Should have started young(er) when doing this since when I got around 60 and tried it I found the taxes too onerous. Didn't do it again and will now be staring RMDs in the face in a few years with a decent tax bill as well.
OP
OP
JoeWras
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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- Sep 18, 2012
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- 11,715
One of the great things about this board is we discuss Roth conversions all the time. I was clueless about it when I started lurking in 2010 or so when I got the itch to ER. The strategy immediately changed my perspective.
If I had just ignored everything and retired, I could be one of these unfortunate souls who has to play catch up games like this guy tries to sell.
Catch up is never good in any aspect of life.
Maybe someone else new that is lurking ends up on this thread for some reason and learns that:
- Slow and steady Roth conversions are the best way to be tax efficient
- Use the time between early retirement and obtaining new income sources such as social security or pensions
- This gives you extra headroom at lower tax rates
- Ignore the advisors with exotic schemes such as land conservancy easements, MLPs and all that nonsense
- Keep it simple. Really, it is easy as long as you prepare early and have a simple plan
If I had just ignored everything and retired, I could be one of these unfortunate souls who has to play catch up games like this guy tries to sell.
Catch up is never good in any aspect of life.
Maybe someone else new that is lurking ends up on this thread for some reason and learns that:
- Slow and steady Roth conversions are the best way to be tax efficient
- Use the time between early retirement and obtaining new income sources such as social security or pensions
- This gives you extra headroom at lower tax rates
- Ignore the advisors with exotic schemes such as land conservancy easements, MLPs and all that nonsense
- Keep it simple. Really, it is easy as long as you prepare early and have a simple plan
Last edited:
Winemaker
Thinks s/he gets paid by the post
This is the warning for the Conservation Easement Stategy.
OP
OP
JoeWras
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
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- Messages
- 11,715
Well done. Clear, short and concise. He also discusses penalties should your deduction be disallowed.
He also mentions that this is usually done through a "syndicate," and not independently on your own land. The syndicate has a cost that is lost too. This cost goes to appraiser, lawyer and management. And I'm going to just go out on a limb here (ha ha) and assume that some of that cost is seller kickbacks to the "advisor" pushing you into this scheme.
ychuck46
Recycles dryer sheets
Similar "Costs" for other deductions
His point in the video about spending $100K to get a $25K deduction is true for many things "advisors" tell clients to save on taxes with. For example, the wife and I give a goodly amount to charity each year. But when people tell me to give even more for a tax deduction, I have to scratch my head since it still COSTS me $1 for each, say, 25 cents in charitable writeoff I receive. Just doesn't make sense unless the intent was to give even more that year than originally intended. The same is true for starting a conservation easement from scratch if you did not already own the property, as the gentleman in the video stated.
His point in the video about spending $100K to get a $25K deduction is true for many things "advisors" tell clients to save on taxes with. For example, the wife and I give a goodly amount to charity each year. But when people tell me to give even more for a tax deduction, I have to scratch my head since it still COSTS me $1 for each, say, 25 cents in charitable writeoff I receive. Just doesn't make sense unless the intent was to give even more that year than originally intended. The same is true for starting a conservation easement from scratch if you did not already own the property, as the gentleman in the video stated.
mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Radio finance guys/gals are trolling for live clients, not unlike the "free lunch" bunch. Fuzzy math on Sunday AM should probably be avoided.
CardsFan
Thinks s/he gets paid by the post
I watched this one, and another (I think it was 8 tips to reduce taxes in retirement).
This guy is pretty good. I think I have seen him before thru a link on this site.
Straight forward, to the point, and no sales pitch (at least not in the videos I watched).
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It took me a while to figure out the "Roth thing" but once I did, I was able to convert every tIRA to Roth. What a great move I made - that I could have missed out on! I'm not smart, but I'm teachable.
An acquaintance put a not-small amount of $$ into one of these deals a few years ago. I looked at a summary of the transaction and thought it didn't make sense.
The IRS shut down the promoter a while back, then rolled through their client list. My acquaintance is now trying to negotiate down a nearly 7 figure bill from the IRS
I had a relative that got caught up in one of these types of schemes and he certainly regretted it. I don't know how it all ended up but he spent a bunch of money on attorney fees and time in court not to mention the stress. As the saying goes if it sounds too good to be true it probably is.
