ls99
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- May 2, 2008
- Messages
- 6,509
The short answer is: set and forget about ten years ago.
I agree. It's so easy to get hung up on tax avoidance. Don't touch that Roth, but rather let it grow tax free. Only withdraw the required minimum from your tIRA. Hoard those taxable account holdings that have a large unrealized gain so that your heirs can get stepped up basis and nobody pays tax on the gains. Don't go over the ACA subsidy cliff or into the next IRMAA tier.Huh? If you sell high you get more dough even if you have more taxes.
Me too. That's been my biggest shortcoming re: investing. I almost never "rebalanced" because I was continually plowing large amounts of new savings into investing I could rebalance without selling anything. As a result I am sitting on large capital gains and I delayed Roth conversions for longer than I should have. I've gotten better in my old age and ignoring taxes isn't the answer, but I still have to force myself to not let the tax tail wag the dog...I agree. It's so easy to get hung up on tax avoidance. Don't touch that Roth, but rather let it grow tax free. Only withdraw the required minimum from your tIRA. Hoard those taxable account holdings that have a large unrealized gain so that your heirs can get stepped up basis and nobody pays tax on the gains. Don't go over the ACA subsidy cliff or into the next IRMAA tier.
Some of us, including me, need to stop obsessing about all this and enjoy what that money can do for us. In most cases the taxes are only a small cut out of the money we take out of investments. Sure, watch out for the ACA cliff (if it comes back) and IRMAA tiers where a few $ too many can cost you more in taxes. Don't barely exceed those levels, but instead, when going over those barriers, blow through them enough so that again the taxes are only a portion of the money.
ER Eddie said:I wish the growth was grounded in economic fundamentals, not based on massive increases in federal debt.
I share your wish. When I think about the Buffett Indicator (Aggregate US Stock Values/GDP) standing at an historic all-time high at the end of 2021 I get nervous.
https://www.currentmarketvaluation.com/models/buffett-indicator.php
I've made more in 2020-2021 than the rest of my life combined. And I started with enough to retire, so I wound up with too much to ever spend.
OP - if selling your business will incur taxes, consider charitable donations in this final high income year. I donated ETF shares to a donor advised fund, so I didn't owe taxes on selling - and then got a tax deduction for the value of the shares. That would be my advice: contribute to a DAF in your highest income years.
Totally agree with OP. Spent a lifetime investing in 401k, IRA, bought investment properties, built my business. We raised our kids to be good people and hard workers. If you asked them "would you like to win a million dollars or earn a million dollars" 10 times out of 10 they would say earn. There is no substitute the things you learn on your journey. Fast forward to 2021 and we're selling the business for eight figures and talking about giving the kids money. Life can be strange.
Yeah, I find it kind of baffling. I retired two years ago, and my portfolio has grown considerably since then, despite my withdrawals. I never made six figures in my career, but I'm making a lot more than that in retirement -- by doing nothing.
I know a lot of the growth is because the government keeps goosing the economy like a dirty old man who's had too much Viagra, though. That part I'm not happy about. I wish the growth was grounded in economic fundamentals, not based on massive increases in federal debt.
DF starting "giving" me money in the form of my yearly roth contribution. He can't take it with him. He realizes he has more than he will spend, and will be leaving me with a tax torpedo. Best to enjoy it on the topside before you are 6 feet under.