I'm 57 and she is 59.
Here are our details:
tIRA $1,286,000 (45% ETFs 55% brokered CDs)
Wife's tIRA $ 895,000 (45% ETFs 55% brokered CDs)
Taxable Brokerage Account $826,000 (50% ETFs 50% brokered CDs)
Wife's Roth $50,000 100% ETF
Checking Acct $100,000
I Bonds $20,000
My wife plans to take SS at 62 or 63 and I will take it at 67. We have no debt, just "regular" bills. We'd like to have $11,500 per month to take care of essential and discretionary as well as taxes.
I was hoping to stay in the 12% tax bracket but I don't think this is likely.
We will need health insurance and will likely get a plan from the marketplace (ACA).
My questions are: Should I look into doing any Roth conversions? If yes, how much per year? What's the best way to withdraw from all of our accounts to minimize our tax liability? Should we only hold equity ETFs in our brokerage account or is a combination of ETFs, CDs and CEFs okay?
Your situation is very similar to my situation. I'm 57, and my wife is 61. Our account balances are also similar, ($3.6M vs your $3.17M and my wife will take SS at 67 while I'll take it at 70. We take out about $75K/year and stay within the 12% tax bracket to keep our Marketplace monthly premium at $50. (Once you get over $55K in AGI, the Marketplace premiums really start to increase).
We sold our I-bonds this year since Fidelity sweep pays better interest. We keep about only $5-10K in our checking account to take advantage of Fidelity's sweep account earning 5% annually.
Our strategy is to take all the money from taxable brokerage account until it is depleted, and then start taking distributions from my tIRA, and lastly from our Roth IRAs.
For our tIRA, I'm trying to convert some into T-bills or CDs and then convert the same amount in our Roth to ETFs/mutual funds. I want to try to increase the CD/T-bill holdings in tIRA, while increasing the ETF/mutual funds in our Roth.
I take a Roth conversion each December of about $30-40K. With that yearly conversion and assume the portfolio doubles in 10 years, I estimate that our RMD will start at around $25K/year when I'm 75.
With our brokerage account, 75% is in mutual funds and AMZN stock, so I won't pay any taxes on capital gains but it will contribute to AGI. I am trying to put the rest into a sweep or T-bill or CD that pays the 5% annual. The reason is that I want to minimize any dividends that are treated as ordinary income.
You might want to consider having your wife delay SS until she is 67, so that for 8 years, you can make a larger Roth conversion since SS counts as ordinary income.