Is there a calculator for my situation?

[Carol1862]

We’re in our early 60’s, retired 4 years now. No pensions, not taking SS yet, Firecalc and Fidelity say we’ll be fine. We get subsidy for HC. We have most of our money in tIRA. We haven’t moved it to Roth because we’re nervous about getting hit with higher subsidy. SS can start next year. Not sure if we should put it off because of subsidy. I also have some bonds that were given to me years ago ($5000 and $10,000) and the tax ramifications on those make them very unattractive, so we haven’t touched them.

In case you’re going to suggest a fee only planner, I tried to find one within a 70 mile radius of where we live. I just want to sit down with a professional and get a check up, and have them review these issues. So far, either they don’t call back or they admit they can do what I wish, but predominantly manage their clients money. We do not need that

I heard I-Orp is a good calculator but it didn’t quite give me what I was looking for. Perhaps I’m looking at it incorrectly. After all, a calculator is only as good as the info you put in.

any suggestions? Thank you.

 

[street]

I wish I had the answer for you. I really believe each case is different but will be following your post to se what the experts have to say.

 

[SevenUp]

A tax calculator that may handle all your concerns (e.g., IRMAA, SS, tIRA withdrawal, etc.) and give graphical output is Case Study Spreadsheet updates hosted on the MMM forum.


That is a one year look only - does that suffice or are you looking for multi-year plans?

 

[Carol1862]

I would need a multi year plan but thank you for that link. I’ll check it out

 

[Midpack]

It's unfortunate that professionals are farther away than you'd like, but you're probably going to have to make the drive. Sounds worth it to me.

And even then there will be some crucial assumptions you'll have to agree to (future tax rates, future HC subsidies, future Soc Sec, etc.) - there's no way to get a 100% guaranteed answer, only a best answer given the assumptions you choose. I've never seen a calculator that can handle that many variables at the level of confidence I'd put much trust in, and with some you don't know even what assumptions were built in. i-ORP (now called ORP) is a good axe, but it's not a scalpel.

Good luck, we're all in the same boat playing probabilities and using the assumptions we're most comfortable with.

 

[Jerry1]

Yeah, I’m guessing this is something that has to be done on your own. When talking to my Fidelity rep, the plan for withdrawing money to create the lowest possible tax payment, their eyes glazed over. To me, that is a critical question. I pretty much know how to invest, asset allocate and preserve my money, but drawing it down, given the number of variables can be very complex. I’m going to meet with someone in August to see if they can help. Problem is, they’re one of those money managers that charge based on your portfolio at about .75% per year. Ugh! Still, a tax screw up or a threshold screw up for healthcare, could cost a lot too. Let us know how it goes as you review the link.

 

[pb4uski]

What I would suggest is to start with a pro forma 2018 tax calculation with no Roth conversions.

Then add $10,000 of Roth conversions and look at the reduction in your subsidy and any increase in income taxes. The sum of those two items is your economic cost of the $10,000 Roth conversion and divided by $10,000 is your effective cost.

The repeat with an additional $10,000 ($20,000 in total). Rinse and repeat until the effective cost is more than you care to pay and more than your expected marginal tax rate once you start SS.

Update the analysis annually.

 

[joeea]

In case you’re going to suggest a fee only planner, I tried to find one within a 70 mile radius of where we live. I just want to sit down with a professional and get a check up, and have them review these issues. So far, either they don’t call back or they admit they can do what I wish, but predominantly manage their clients money. We do not need that

Where are you located that is so adviser sparse?
What did you use to try to find one?

Have you tried this: http://www.letsmakeaplan.org/ ?

 

[Carol1862]

Where are you located that is so adviser sparse?
What did you use to try to find one?

Have you tried this: Financial Advisors & Planning Professionals | CFP - Let's Make a Plan ?

I look at NAPFA financial planners. The link you sent (thank you for sending it) all show planners that work for a financial group (Merrill Lynch,etc) and want to invest your money. That’s not what I need.

I live 2 hours from Charleston SC and 1.5 hours from Wilmington NC. Traveling to these cities is not a problem for us to get a good planner

There is a planner many people in my area like, but he wants to manage our money as well as advise. We don’t need that.

 

[pb4uski]

If you insist on using a planner, thne you may want to look for a CPA with a Personal Financial Specialist (PFS) designation.

See https://account.aicpa.org/eWeb/dynamicpage.aspx?webcode=referralwebsearch

But to be honest, unless numbers are really hard for you, I think you are better off to DIY using an approach that I outlined in post#7.

 

[Carol1862]

If you insist on using a planner, thne you may want to look for a CPA with a Personal Financial Specialist (PFS) designation.

See https://account.aicpa.org/eWeb/dynamicpage.aspx?webcode=referralwebsearch

But to be honest, unless numbers are really hard for you, I think you are better off to DIY using an approach that I outlined in post#7.

I plan on doing exactly what you suggested and appreciate your advice. I’ll will let you know how it goes!

 

[Hyper]

In the past, I've tried several times to find a competent planner to talk to in our area. I was told the same that they would gladly take our money and manage it, charge us 5% up front but didn't really do sit downs for advice..?? Most times I found their attitudes lacking so didn't pursue it further. We have however used the same CPA for our taxes for many years and he's been our best advice for the most part. He's not really the typical CPA as one might be accustomed to.

 

[Cobra9777]

I've had some success just bouncing ideas off our Fidelity PCG rep. They are usually the more senior reps and it's free. A lot depends on which rep you get and their level of experience with your specific question or scenario. I think most of the major brokerages have a similar service. Sometimes you get lucky. In general, they seem to be more comfortable with questions about investments, risk, AA, and general retirement planning. They are less comfortable with (or perhaps less trained to handle) optimization questions, like developing a 30-year withdrawal plan to minimize taxes.

Still, a couple years ago, I had a long discussion with our rep about Roth conversions, when to take SS, RMDs, etc. She was quite helpful and gave me some new variables and what-if's to think about and incorporate into RIP and my own Excel planning models. In the end, I'm only really comfortable with my own models and of course, my own assumptions... imperfect as they undoubtedly are.

I use FIRECalc, i-ORP, RIP, and others, but mainly just to stress-test my own deterministic model with some actual history and/or Monte Carlo simulations. They all have different stuff going on "under the hood" that I can't see or calibrate to my liking. So I'm really just looking for a general consistency in the results.

Beyond that, I just try to read this forum and a couple others regularly. I like to learn about how other people approach these problems for their specific scenario. This was especially helpful about one year prior to ER and one year after. I'm now pretty comfortable with our plan and don't "run the numbers" as frequently as I did back then. But I still like reading and learning about how real people try to balance Roth conversions, when to take SS, ACA subsidies, and other issues related to withdrawal strategy. No universally-accepted answers; just a lot of interesting perspectives on an extremely complex problem.

 

[VanWinkle]

We’re in our early 60’s, retired 4 years now. No pensions, not taking SS yet, Firecalc and Fidelity say we’ll be fine. We get subsidy for HC. We have most of our money in tIRA. We haven’t moved it to Roth because we’re nervous about getting hit with higher subsidy. SS can start next year. Not sure if we should put it off because of subsidy. I also have some bonds that were given to me years ago ($5000 and $10,000) and the tax ramifications on those make them very unattractive, so we haven’t touched them.

In case you’re going to suggest a fee only planner, I tried to find one within a 70 mile radius of where we live. I just want to sit down with a professional and get a check up, and have them review these issues. So far, either they don’t call back or they admit they can do what I wish, but predominantly manage their clients money. We do not need that

I heard I-Orp is a good calculator but it didn’t quite give me what I was looking for. Perhaps I’m looking at it incorrectly. After all, a calculator is only as good as the info you put in.

any suggestions? Thank you.

This planning is exactly what I am currently doing for my own retirement plan. It is easy to get onto heathcare.gov and see the effects of additional income on your subsidies. Are you getting premium subsidies only, or both premium and cost subsidies(lower ded and out of pocket max). I use Tax caster from intuit to do a free calculation for taxes. You can go to about 64000 income before subsidies phase out for a married couple. I am also
putting off Social Security due to HC subsidies. Chances are if we took the SS, we would be paying all of it for HC at this time.

Roth conversion will affect your income, but I was able to do a 8500 conversion last year with 0 tax paid to bump my income up high enough to disqualify for medicaid.

The advantage for me is that I have a considerable taxable account to draw from that will not affect my income for HC.

I agree with pb on an cpa resource.

 

[joeea]

I look at NAPFA financial planners. The link you sent (thank you for sending it) all show planners that work for a financial group (Merrill Lynch,etc) and want to invest your money. That’s not what I need.

I live 2 hours from Charleston SC and 1.5 hours from Wilmington NC. Traveling to these cities is not a problem for us to get a good planner

There is a planner many people in my area like, but he wants to manage our money as well as advise. We don’t need that.

It wasn't hard to find fee-only planners in Charleston, SC and Wilmington, NC. And none worked at those big-name financial groups.

I used the Advanced Search feature.