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Old 07-07-2021, 05:12 AM   #21
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@CindyBlue speak on the telephone with your close friends and your relatives. Ask them if they know anyone who is trustworthy and who offers financial advisory services for a fee. Emails won’t get you very far, very fast. Speak with other humans.

Your tax professional is not giving you what it seems like you are looking for. I interpret from your comments that you are looking for the best tax strategy for you and DH. Ask your tax professional for his/her advice for a tax optimization strategy. If you hear static on the phone, or you get the deer in the headlights look from him/her, find a new tax professional.
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Old 07-07-2021, 06:36 AM   #22
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@CindyBlue speak on the telephone with your close friends and your relatives. Ask them if they know anyone who is trustworthy and who offers financial advisory services for a fee. Emails won’t get you very far, very fast. Speak with other humans.

Your tax professional is not giving you what it seems like you are looking for. I interpret from your comments that you are looking for the best tax strategy for you and DH. Ask your tax professional for his/her advice for a tax optimization strategy. If you hear static on the phone, or you get the deer in the headlights look from him/her, find a new tax professional.
Thank you!
We have actually asked many friends for their recommendations for a fee based financial advisor, but so far, no one knew anyone who gives financial advice such as we are looking for for a fee - they all need you to deposit your money with them first. We've actually gone to speak to three of the companies that were recommended, for a preliminary interview, hoping to get some help, but they want the money and didn't give out any really useful information. Finding a fee based advisor is tough around here - we don't know why, since it's a relatively prosperous area.

But now I'll research and ask friends for a "tax professional" recommendation!

Seriously, I've gotten more help here than anywhere. I now have a direction to go and some questions to ask - I didn't even know what questions to ask before this!
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Old 07-07-2021, 06:55 AM   #23
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Ok, I've been doing some researching while waiting for the time I can start calling. I may have found a tax professional in my own town that has a good reputation (yay!)

I still don't understand one thing - if we roll our Vanguard 403b into a Roth, is it the same plan (the VANGUARD INSTL TARGET RET 2020 FUND) with the same growth rate and risk rate, just with different tax implications? I can't seem to find an answer for this question. I've looked around the Vanguard site, too, but if the answer is there, I can't find it.

I feel pretty safe with this Vanguard account that we have, and am cautious about changing it.
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Old 07-07-2021, 07:05 AM   #24
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Google "registered fiduciary near me". Scroll past the hits marked Ad down to the "People also ask" questions. That's where you will learn worthwhile things, besides here, of course. The section expands with more questions and answers the more you click on them. I think the SEC has a tool to find advisers and fiduciaries.
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Old 07-07-2021, 07:08 AM   #25
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Originally Posted by CindyBlue View Post

I still don't understand one thing - if we roll our Vanguard 403b into a Roth, is it the same plan (the VANGUARD INSTL TARGET RET 2020 FUND) with the same growth rate and risk rate, just with different tax implications? I can't seem to find an answer for this question. I've looked around the Vanguard site, too, but if the answer is there, I can't find it.
Normally I'd say yes, but for your own Roth I don't know that you can roll an "Institutional" fund over. It might get changed to "Vanguard Target Retirement 2020 Fund (VTWNX)", which is essentially the same but with a slightly higher internal fee.
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Old 07-07-2021, 07:09 AM   #26
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Ok, I've been doing some researching while waiting for the time I can start calling. I may have found a tax professional in my own town that has a good reputation (yay!)

I still don't understand one thing - if we roll our Vanguard 403b into a Roth, is it the same plan (the VANGUARD INSTL TARGET RET 2020 FUND) with the same growth rate and risk rate, just with different tax implications? I can't seem to find an answer for this question. I've looked around the Vanguard site, too, but if the answer is there, I can't find it.

I feel pretty safe with this Vanguard account that we have, and am cautious about changing it.
The "INSTL" in "VANGUARD INSTL TARGET RET 2020 FUND" is short for "Institutional", meaning you can only own it in an employer's plan. If you roll the account over to a Traditional or Roth IRA, then they will probably* liquidate this fund and you would then reinvest in a similar fund that's open to individual investors. "Vanguard Target Retirement 2020 Fund (VTWNX)" should be pretty much the same fund, but for individuals.

* If both accounts are held at Vanguard, then it's possible they might allow you to keep the institutional shares. You'd have to ask them.
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Old 07-07-2021, 07:10 AM   #27
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Normally I'd say yes, but for your own Roth I don't know that you can roll an "Institutional" fund over. It might get changed to "Vanguard Target Retirement 2020 Fund (VTWNX)", which is essentially the same but with a slightly higher internal fee.
Thank you!

I've sent a message to Vanguard asking them this question, too - hoping they will answer!
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Old 07-07-2021, 07:15 AM   #28
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The "INSTL" in "VANGUARD INSTL TARGET RET 2020 FUND" is short for "Institutional", meaning you can only own it in an employer's plan. If you roll the account over to a Traditional or Roth IRA, then they will probably* liquidate this fund and you would then reinvest in a similar fund that's open to individual investors. "Vanguard Target Retirement 2020 Fund (VTWNX)" should be pretty much the same fund, but for individuals.

* If both accounts are held at Vanguard, then it's possible they might allow you to keep the institutional shares. You'd have to ask them.
Thank you!

Both accounts are at Vanguard.

When you say "you would then invest in a similar fund?" does that meant that Vanguard will do this (invest in a similar (Roth) fund) for us? Do I have to tell them exactly what to do? Because I don't think I know enough to tell them what to do - as you can see, I know nothing about this!

And...is this the kind of question that a financial advisor would be able to anwer? Or a tax advisor? Can I pay a financial advisor or tax advisor to do this rollover for us so we don't screw it up?
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Old 07-07-2021, 07:17 AM   #29
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Google "registered fiduciary near me". Scroll past the hits marked Ad down to the "People also ask" questions. That's where you will learn worthwhile things, besides here, of course. The section expands with more questions and answers the more you click on them. I think the SEC has a tool to find advisers and fiduciaries.
Thank you!

Off to do this now!
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Old 07-07-2021, 08:37 AM   #30
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Thank you!
I have tried to find a fee-based financial advisor for years, and they just seem to be in hiding. How does one find one? We really don't know anyone to ask.

Our tax lady (obviously) knows our income sources. She suggested this year that, since my Soc Sec was added to our income just this past April, that we each submit a form to have 7% taken out of each of our Soc Sec checks each month. Is that what you meant about the kind of information/advice that a tax professional can give us?
It is a pay now or pay later question. Run hypothetical withdrawals with your tax lady. All pre tax money 401k, and 403b withdrawals are taxed at ordinary income rates. Once RMD's kick in and you have social security income , not much you can do about it.
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Old 07-07-2021, 09:12 AM   #31
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@CindyBlue, let me offer a caution: A single goal to minimize taxes is actually relatively easy to achieve. Convert everything to cash and store it in a buried can in the back yard. The problem, of course, is that this also minimizes income.

Do not let the tax tail wag the investment dog. Your DH's goal and yours should be to maximize your net worth after taxes are paid. If you end up with more money and also end up paying some taxes along the way, so what? The important goal is more money, not minimum taxes.
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Old 07-07-2021, 09:23 AM   #32
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Thank you!
Edited to add: All of these are 40 or more miles away in lousy traffic...sigh... We don't really want to have to drive that far, but understand that we might have to...



You're not going to get what you need from us while sitting in front of your computer. I don't think you or your DH have any idea of the scope of knowledge you need here to "try and lower your taxes" .


There are too many pitfalls and areas where you can hurt yourself. For example if you were serious about saving taxes you would have let your own SS continue to grow risk free and done Roth conversion(if possible) until you turned 70.



Find a fee per hour based guy, tell him your main area of concern and get together all the paperwork he tells you bring along. That's your first step, until then you are just spinning your wheels.



Don't get discouraged I can tell you are a smart lady, but people don't know what they don't know. Maybe the comment about taxes was just a one off by your DH and it won't go any farther.



Good luck
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Old 07-07-2021, 09:24 AM   #33
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Cindy

You may want to expand your search area for a Financial planner. I would bet they could do a Zoom call. Send them your info & they can share the screen with you. And email back action items
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Old 07-07-2021, 09:26 AM   #34
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It is a pay now or pay later question. Run hypothetical withdrawals with your tax lady. All pre tax money 401k, and 403b withdrawals are taxed at ordinary income rates. Once RMD's kick in and you have social security income , not much you can do about it.

Exactly, the OP taking SS this April, is a hindrance in trying to reduce taxes. These aren't last minute spur of the moments decisions.
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Old 07-07-2021, 09:29 AM   #35
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Thank you!

Both accounts are at Vanguard.

When you say "you would then invest in a similar fund?" does that meant that Vanguard will do this (invest in a similar (Roth) fund) for us? Do I have to tell them exactly what to do? Because I don't think I know enough to tell them what to do - as you can see, I know nothing about this!

And...is this the kind of question that a financial advisor would be able to anwer? Or a tax advisor? Can I pay a financial advisor or tax advisor to do this rollover for us so we don't screw it up?

This is your best comment so far, you free admit you don't know this and from what you say your DH knows even less.


Just cool your jets until you BOTH know more. You are nowhere near ready to be asking someone to do a rollover.
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Old 07-07-2021, 10:35 AM   #36
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I don't see specific numbers from the OP.
General procedure for minimizing income taxes is to avoid large variations in Adjusted Gross Income from the years before and then after age 70-72.

I call this Levelizing your AGI; use Roth conversions in your years prior to 72 to do this. With proper planning, you should be able to keep annual increases in AGI to less than 5% per year, no big jumps.

And for couples with a healthy investment portfolio, another idea is to set up any pensions or payout annuities to be single life, not joint.
This tends to keep the eventual surviving spouse from getting into a much higher tax bracket.

Edit: it appears that the OP and spouse are late to the game of learning financial and tax details for retirement money management; time to do this is maybe five years prior to retirement of the first spouse, if not sooner.
So I would connect with a proper financial planner, but also take OldShooter's advice to focus on net income, not letting taxes wag the dog...
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Old 07-07-2021, 10:36 AM   #37
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Just a comment on looking for a "fee based" advisor. A year or two ago I used one of the links someone gave to look for one, mostly out of curiosity. The ones around me all had their fee based on assets under management, not hourly.
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Old 07-07-2021, 10:52 AM   #38
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Just a comment on looking for a "fee based" advisor. A year or two ago I used one of the links someone gave to look for one, mostly out of curiosity. The ones around me all had their fee based on assets under management, not hourly.
Right.
And we do NOT want the OP to put any of their combined assets under management of someone like that...
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Old 07-07-2021, 10:58 AM   #39
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Just a comment on looking for a "fee based" advisor. A year or two ago I used one of the links someone gave to look for one, mostly out of curiosity. The ones around me all had their fee based on assets under management, not hourly.



A great point and I went and edited my comment to the OP to include hourly fee based planner...the difference is crucial and we don't want her confusing the two types.
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Old 07-07-2021, 11:00 AM   #40
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....we won't have to pay as much taxes later when we are older (not sure I quite understand this but that's what he said.)

I told him I'd ask you folks.
What specifically makes him thnk that you'll have to pay more taxes later?
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