CD transferred in-kind as you mentioned. It will transfer after today's trading. I'm WH from the tIRA settlement fund at 12% of CD value. I was able to mimic the 2024 tax return in the Taxslayer training section. The benefit of being an AARP tax aide volunteer. We should get a small refund next year.
Rethinking my yearly Roth conversions
- Thread starter FREE866
- Start date
CD transferred in-kind as you mentioned. It will transfer after today's trading. I'm WH from the tIRA settlement fund at 12% of CD value. I was able to mimic the 2024 tax return in the Taxslayer training section. The benefit of being an AARP tax aide volunteer. We should get a small refund next year.
It was a very rough patch.....and a very rare one. and even if we go through that exact same one, I'm fine.
Eucerin
Recycles dryer sheets
- Joined
- Oct 10, 2018
- Messages
- 246
That's a good number. I am only eligible for 10kish this couple of years as income increased due to interest rate booming
Posting from my iphone is a disaster for some reason...
here is the article I mentioned:
https://www.linkedin.com/pulse/lost-decade-forecasts-bunk-cheer-fear-ken-fisher/
SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I see differences between the following market return patterns:
1. A square-shaped "U" / a square with the top horizontal part missing:
1/1/N $X
1/2/N $X * 50%
12/30/N+10 $X * 50%
12/31/N+10 $X
2. A "V" shape:
1/1/N $X
7/1/N+5 $X * 50%
12/31/N+10 $X
3. A pattern where a linear average has a negative slope:
(The above referenced market period from 2000 to 2009)
These all seem different to me. I think @FREE866 is correct that a pattern like #1 hasn't happened, and I think @Al18 and @pb4uski are also correct in that #3 has happened (and several times IIRC). But pattern #1 and pattern #3 are different patterns and so could have different survivability characteristics based on the portfolio AA and withdrawal pattern.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Nah you are there with me. Full disclosure - the 23k is for my brother and I (grown dependent). Divide in half.......
Then it sounds like you’ve over saved, or are underspending.
Protect a portion.
The drawdowns during the bear markets are amplified by withdrawals. Even a 25% drawdown, combined with withdrawals, can easily exceed 40% over a few years in a stagnant market.
I’ll post if I can find this, but I read a recent article based upon a portfoliocharts.com simulation that shows a 1999 retirement year is likely to fail the 4% rule over 30yrs.
The U shaped market is a killer for retirees.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It would be nice to find that article, as I have heard that the 1999 (beginning of 2000) retiree is possibly in the top 10 or 15 currently for starting retirees and could move up to the top 5 with the remaining wrong sequence of returns.
Ummm....In my view I've done quite well with my approach. I retired at 50 over 7 years ago. The average withdraw rate has been 3.3% and including withdrawals my portfolio is up over 70%. I've paid zero in commissions and fees over that time frame. If that constitutes "over saving " or "underspending" then fine because I'm thrilled with the position I'm in right now.
I'm doing Roth conversions to the top of our current 12% for two reasons.
1. I don't think the rate will ever get lower and is much more likely to increase.
2. We are married filing jointly. If and/or when one of us passes away, the survivor will inherit the other's IRA and thus the surviving spouse will have double the amount in their taxable IRA accounts. The RMD's amounts and taxes required for a single flyer will be brutal.
1. I don't think the rate will ever get lower and is much more likely to increase.
2. We are married filing jointly. If and/or when one of us passes away, the survivor will inherit the other's IRA and thus the surviving spouse will have double the amount in their taxable IRA accounts. The RMD's amounts and taxes required for a single flyer will be brutal.
found it. It's 2000 retirees.
https://portfoliocharts.com/2024/03...eXr8XQG2ZweGSOW1ZzriH_5xj0n1DChkaZA0ExsUM5K6P
yes, that's exactly what it means. A 3.3% w/d rate is historically way too low.
Simply using a 30yr TIPS ladder, one can achieve a 4.6% SWR with practically zero risk! protecting a portfolio from the epic drawdowns is what can increase one's SWR.
https://www.tipsladder.com/build?in...ap=NearestBond&bondChoiceWithinYear=BestYield
I'm also in complete agreement with you that you should be proud of what you've accomplished. Few do it. Now it's your job not to screw it up.
I first heard of FIRE around age 49 or 50. Retired at 52. So, I'm nearly the same case study. Surviving to age 92 (or whatever) with money left over shouldn't be that hard. Maintaining a set standard of living is harder. Lowering expectations is an option too.
You gotta do you though. Good luck.
RMDs at 75? Isn't that only for pre-1987 contributions to a 403(b)?
https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
SevenUp
Full time employment: Posting here.
- Joined
- Jul 3, 2014
- Messages
- 882
That document covers only current RMDs.
The Applicable age for future RMDs is described there. Note that those with a 1959 birthday fall into both the age 73 and age 75 slots. Presumably that will be clarified in the next 7 years or so.
I don't think I've ever had less interest in a recommendation
It wasn’t a recommendation. It was an example of how to increase your WR by 39% with practically no risk and a one-time minimal effort.
I am curious though, why aim so high for performance when the WR is so low?
No need to answer.
Us too. DW insurance is changing next year and may go with hers and be able to start moving some. But then I'm also waiting for the disability shoe to drop... then its a whole new ballgame...
TheWizard
Thinks s/he gets paid by the post
Better to look at Total Return than simply the market price...
This conversation probably deserves it's own thread, but as of now I'm only withdrawing from my taxable account so right off the bat putting a tax inefficient asset ( bonds) into that account isnt wise IMO. Secondly , in my studying all this bonds are good for mitigating volatility, but I'm fine with volatility so it's really a mental thing. Thirdly, my need is cash flow, not "income". People get caught up in the mindset of "I need income" which is a mistake IMO. I can generate tax advantaged cash flow through selling of equities.
Again, I think stocks scare people and the notion of having bonds gives them psychological "comfort". As I said before I'm a believer stock returns will mirror the past, many people don't feel that way and thats fine.
I think it's an interesting discussion.
If you have 5 minutes, watch this...I really agree with everything he says..
this one is actually 10 years:
https://www.officialdata.org/us/stocks/s-p-500/2000?amount=1000000&endYear=2009
Same here... the ACA subsidy is considerable for us right now. Should that change due to legislation then I may reconsider ROTH conversions. Currently planning to evaluate some conversions in the years between Medicare and taking SS (planning for 70 but could be earlier if health situation were to change).
I don't know that there is a one-size-fits-all recommendation for the order of spending. In our case, future possible 24/32% brackets make our best plan to spend down taxable and do Roth Conversions, paying taxes from taxable.
For us, spending down taxable reduced annual tax drag. Doing Roth Conversions and paying taxes from taxable drives down both the IRA and the taxable balances, so that can be more tax efficient than just spending from the IRA.
A trade-off is that the Roth Conversion strategy may require asset sales from taxable and that may generate new lifetime taxes if you otherwise never would have spent taxable down. In our case, we have enough assets with small unrealized gains in taxable that the Roth strategy wins easily.
It required time and effort to understand the trade-offs and their relative magnitudes, and will require re-planning as things change. But for us, Roth Conversions will likely make a mid six figure difference.
It seems strange to me that folks would think that optimization would drive one bonkers, I about the same amount of bonkers as ever.
almost there
Thinks s/he gets paid by the post
- Joined
- Sep 24, 2008
- Messages
- 1,017
Same boat. Did the same. Did conv's from the 12% into the 20% realm. Am now mid 62 and taking SS. 1/2 my 401k/IRA is now Roth. Plan to do 30k a year to 75 in Roth conversions while staying more or less in the 12% married bracket. Solid plan as tax rates will be going up over the next 10-40 years. Not sure how they can not with what's been happening. So I say stick to the plan. In 13 yrs my Roth to IRA % will be about a 85/15 Mix/ Min. Not a bad place to be. Thinking the IRA will only have around 150k in it at 75 (with a 4% return) So RMD's are of no concern at all. And it grows tax free. Best deal going..
orbops
Recycles dryer sheets
I'm also 57 with an 18 year time frame and do Roth conversions in the 12% bracket. I am definitely trying to put more bonds/t-bills/cds into my IRA so it doesn't grow as fast as my Roth. My view is that with a larger Roth base to work from by the time I'm using SS at 70, I can use my Roth to essentially stay in 10/12/15% bracket.
Our current allocation is around 70/30, and used to be 85/15 before I retired. So my 30% bond/T-bills is being allocated more in my tIRA.
Other advantages of a larger Roth are:
* having to make unexpected expenses (like buying a new car, or medical emergencies) and not paying any taxes on it
* keeping ACA premiums minimized by withdrawing from Roth instead of tIRA or taxable accounts
* the ability to control your tax bracket from 59.5 to 75 when SS kicks in
