Apparently, RMDs are a problem now

[NomDeER]

Apparently, you just surfed in and are unaware of the other videos that I and others have linked from Sean.

Nope. Didn't just surf in. I was responding to your specific post about a specific video.

He covers the 'to Roth or not' in other videos and if that's not enough covers it very, very specifically in his excellent book. However, the tax calculations in all his videos are quite helpful as they carry through to all proper analysis. And when things aren't 'no-brainers, ' proper calculations and their application are crucial.

I have no idea what he says in his book or anywhere else, and it had nothing to do with your post and the video you posted.

You think he did "all the proper analysis" in that video because he concluded that a woman with over $300k per year would be "fine" and would pay taxes ($79k at about 25% effective rate) that he concluded were good. I disagree. I don't think he did ALL the proper analysis because most people with over $5 million dollars aren't worried about whether they will be fine or if they can manage to live on over $300k per year (though some of them might be a bit surprised to learn that they are paying $79k in taxes for the first time).

I think "all the proper analysis" would have included what would have happened if they had started planning and converting when they were younger and comparing it to the scenario the widow ended up in. Of course, a variety of factors would need to be discussed for a proper analysis, but he didn't even attempt it.

 

[Koolau]

I watched the most recently linked video.
Sean was purposefully trying to examine the worst case scenario for Blanche by not having her do QCDs or other significant contributions. I sort of understand that.

What was annoying was his fascination with her $249k gross income, which is apparently so big that it will be hard to spend it all.

A better approach is to be planning to be Good Custodians of your financial assets and income streams from start of retirement on, by doing proper financial planning. Too broad a topic to elaborate further here...

All true, but I learned too late and now have to make do with what's available to limit taxes and set DW for what I hope is a long and financially secure life. If I could go back 40+ years and change how I set things up, I'd definitely be better off. But that's simply saying that hindsight is 20:20.

BUT it's excellent advice to the young'uns here. Please take heed.

 

[big-papa]

I haven't even done a back-of-the-envelope calculation for DW's situation (or, mine I suppose) for when we are no longer a couple - but a single. I'm just thinking that DW's income will take a hit. She'll get my SS but only 1/4 of my modest pension. Plus she will face the loss of her SS, whereupon she will be "hit" with higher taxes as she continues to drain the 401(k) at an ever increasing percentage. Will she survive? Of course. But she just might be in that danger zone of significant loss of income per (the remaining) person.

Now, the way I've set things up, she will have significant back-up with our Roth IRAs. So I should forget about it. Still, it bothers me thinking about a sudden increase in taxes just when income shrinks significantly. I fear that may throw her somehow. YMMV

+1 Similar situation, but without the pension. I set things up for my (mostly disinterested) spouse such that we receive pretty much automatic income from TIPS ladders, SS, and dividends. But if she becomes single, and depending on when that happens, she'll need to tap into some combination of Roth, whatever stock is left in our TIRA, and stock in our taxable account. Because doing isn't nearly as hands-off as what we're doing today, I remain concerned about her ability to pick that up and run with it. I probably need to revisit the details of this "Plan B" at some point.

Cheers.