After many years of coaxing, my mid-late 70's parents have finally agreed to move to a retirement facility close to my brother and myself.
This has introduced some issues that, as an accumulator, I haven't had to deal with before, namely which pots of money should the rent come from?
The needs:
$15-$20K beyond current required IRA withdrawals and SS
The assets:
IRA - $275K
Taxable CD's (0.5-2 year maturities) - $100K
Prudential Stock - $15K
Potential House Sale (at least a year away) - $120K
The issues:
1) They are right at the edge of the income limits for having their SS taxed. I was unaware that this taxability existed. Any increase in AGI (e.g. increased IRA W/D's) will cause a significant increase in taxes. (They had 0 taxable income this past year).
2) They are in the tax bracket where they will get 0% tax for capital gains this year (sell Prudential stock?). The CG's will still be figured into the AGI and consequently increased SS taxability.
3) To delay increase in taxability, could use CD's as they mature, but their emergency money needs to come from this until house sells.
So you see, there are a number of conflicting issues here.
Any opinions for a strategy would be appreciated.
This has introduced some issues that, as an accumulator, I haven't had to deal with before, namely which pots of money should the rent come from?
The needs:
$15-$20K beyond current required IRA withdrawals and SS
The assets:
IRA - $275K
Taxable CD's (0.5-2 year maturities) - $100K
Prudential Stock - $15K
Potential House Sale (at least a year away) - $120K
The issues:
1) They are right at the edge of the income limits for having their SS taxed. I was unaware that this taxability existed. Any increase in AGI (e.g. increased IRA W/D's) will cause a significant increase in taxes. (They had 0 taxable income this past year).
2) They are in the tax bracket where they will get 0% tax for capital gains this year (sell Prudential stock?). The CG's will still be figured into the AGI and consequently increased SS taxability.
3) To delay increase in taxability, could use CD's as they mature, but their emergency money needs to come from this until house sells.
So you see, there are a number of conflicting issues here.
Any opinions for a strategy would be appreciated.