Hiring a retirement planner

[pb4uski]

Quote:

Originally Posted by MrSmee ... The planner gave me a viable option vs Roth conversions which is more tax advantageous. ....

Can you elaborate on this ?

[MrSmee]

Quote:

Originally Posted by Lstansbury Good to know! Congrats on getting support that you appreciate. Would you mind sharing what type of planner? Was it someone at Fidelity or Vangaurd? A local CFP? A CPA maybe? An independent person with Fisher Investments?

I hired a CFP who specializes in retirement plan modelling. I requested models for various SS filing ages and a withdrawal strategy. I have a fairly complicated scenario in that I have Mega stock with a high NUA, my own ROTH and trad accounts, and inherited Roth and trad accounts which have RMDs.

The planner modeled these and ran a Monte Carlo simulation which I did not ask for but was reassuring. They also added some long term care for me and DW though my own plan is to engage in increasingly risky activities

Results:
- Yes, I can retire.
- I can spend more money than I thought but less than DW wants.
- Best option is to file at FRA.
- Roth conversions will result in higher lifetime taxes so they recommended moving the inherited RMDs into a regular brokerage account. I need to dig deeper on this to understand why and how much. I may opt for the Roth anyway.
- I got a better understanding of how low my balances might go in a high early spending profile. I will use the model to decide if we are ahead or behind plan before we make big spending decisions.
- I need to buy a retirement house and will have a mortgage. I have a better idea of what is affordable.
- Got some input on whether to retire at the beginning of the calendar year vs mid-year.

Net, I paid for anxiety reduction and education. I will have to work an extra week to pay for it but it was worth it for me.

[MrSmee]

Oh, and Mega offers me a free financial advisor who will look over the plan and give me a second opinion. That was a pleasant surprise.

[N02L84ER]

"Roth conversions will result in higher lifetime taxes so they recommended moving the inherited RMDs into a regular brokerage account. I need to dig deeper on this to understand why and how much. I may opt for the Roth anyway."


Although you may convert your own traditional IRAs and 401ks to Roth IRAs, I do not believe you are ever allowed to convert an inherited IRA or 401k into a Roth.

[Exchme]

Quote:

Originally Posted by N02L84ER "Roth conversions will result in higher lifetime taxes so they recommended moving the inherited RMDs into a regular brokerage account. I need to dig deeper on this to understand why and how much. I may opt for the Roth anyway." Although you may convert your own traditional IRAs and 401ks to Roth IRAs, I do not believe you are ever allowed to convert an inherited IRA or 401k into a Roth.

You are correct. MrSmee has mixed up a couple of concepts. It is required that IRA RMDs (inherited or not) go to the taxable account. He can do Roth Conversions from his own 401K or traditional IRA. He could pay taxes on Roth Conversions either from taxable (replenished by those Inherited IRA RMDs) or by making additional withdrawals from the traditional IRA. If doing Roth Conversions, it's generally preferable to pay taxes from taxable. That allows more money to end up in the Roth and it reduces the taxable balance, so reduces the tax drag.

[bmcgonig]

Quote:

Originally Posted by MrSmee Got lots of helpful input in response to this question. So I just wanted to update with my experience. I did go ahead and pay for a retirement plan. So glad that I did. - Value: it would have taken me a lot of effort to replicate. Definitely worth it. - Peace of mind: I now have a base plan that I feel has been vetted and I can use it on my own with more confidence. - Quality: there were a lot of nuances I would not have thought about. The planner gave me a viable option vs Roth conversions which is more tax advantageous. Thanks, all, for the advice.

Who did you use?