Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Need some advice on Diversification
Old 07-17-2014, 01:33 AM   #1
Dryer sheet aficionado
Join Date: Mar 2014
Posts: 29
Need some advice on Diversification

Greetings all, DW and I will be retiring at the end of 2015 and will have a COLA'd pension plus funds from a Deferred plan to supplement income. I would like to over time reduce my taxable income to help with the ACA. Pension will be right up to the 399% level so I really need to figure something out as I would like to spend an additional 30k annually from other sources and the subsidy is sizable. I will have

600k from deferred plan
100k Roth from Deferred plan
100k in Cash

What would be a good strategy to position myself into to help reduce my tax liabilities.


FireCat is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-17-2014, 08:21 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 24,751
There is no such thing as a free lunch.

If you need an additional $30k a year above your pension, you might get a few years by utilizing your taxable funds ($100k in cash) and another few years utilizing your Roth.

Are you sure you will be under 400% FPL after considering income from your taxable accounts? You can get a good idea by taking your 2013 AGI, subtracting your wage income, adding in your pension and making any other appropriate adjustments. I was thinking I would keep my income under 400% FPL for subsidies but later decided that I was better off to forgo the subsidies and do Roth conversions to the top of the 15% tax bracket to reduce the time I'll spend in the 25% tax bracket in my 70s.

If you select a HSA eligible plan and make HSA contributions that will reduce your income but it doesn't help out on the cash flow.

If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 65/35/0 AA
pb4uski is online now   Reply With Quote
Old 07-17-2014, 09:46 AM   #3
Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,073
Dividends and capital gains from the taxable accounts may be a big problem. You may need to make sure any big dividend shares or active funds are in retirement accounts.

If you are just too close to the limit, you may have to consider at least one year with big capital gains over the limit. Then use the cash from that year to fund the following year or two while staying under the limit.
Animorph is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
No need to overdo diversification Focus FIRE and Money 11 08-28-2011 12:45 PM
Need Some Advice cube_rat FIRE and Money 20 08-24-2005 12:30 PM
How much diversification is over-diversification? Olav23 FIRE and Money 15 07-26-2005 09:39 PM
need some advice Jeffrey Bergman Young Dreamers 20 12-09-2004 07:23 PM
Need Some advice otako Young Dreamers 12 07-17-2004 06:32 AM

» Quick Links

All times are GMT -6. The time now is 12:44 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.