I need this forum's help in figuring out the timing of IRA withdrawals for the older spouse while the younger one is still employed and also medical strategy for the couple.
Withdrawals:
Guy A is 62 and Guy B is 42. Both in good health and both currently employed.
Married filing jointly - Fed tax 25%, State tax 5%
Even if Guy A stops working today and does not have any other income or SS, the tax bracket will not change based only on Guy B's income.
Guy A has about $200K in Trad 401k+Trad IRA.
They can live off of Guy B's income only if needed.
When should Guy A start withdrawing from his Trad 401k+Trad IRA? Would it be prudent to just to wait and take RMDs when required to do so?
Because of the 20 yr difference, RMD percentage is lower per IRS tables.
i-orp was not of help as it couldn't handle 20 year difference. If I made up a smaller age difference of 10 years, it assumes the older spouse drives the retirement which not the case.
Medical:
Currently, Guy A has health insurance through his own employer and Guy B through is own employer - Different employers, different health insurance companies. Both are HDHP + HSA with individual coverage. Employer for each one is a megacorp.
Guy A intends to retire at 65 and start social security at age 70.
Upon retirement, Guy A will switch to health insurance under Guy B as spouse.
Addition of a spouse, results in $1200/yr increase in employee contribution of health insurance. Employer of Guy B will add $600 additional to the HSA for Guy A as spouse.
Fed tax 25%, State tax 5% and FICA 7.65%. So post-tax additional cost will be $1200*(1-0.25-0.05-0.0765) = about $750
Less the $600 received in HSA, the net cost becomes $150.
As such this is a great deal. Or seems so far.
GuyA's medicare Part A will start upon receiving SS at Age 70.
Guy A can delay enrolling in Medicare Part B and D as long as he is covered on Guy B's employer health insurance.
Given this, would it be prudent skip medicare part B for Guy A till Guy B retires?
Say Guy B retires at age 67, then Guy A will be 87. There is a small chance that Guy A is not in best health - may be nursing care etc. Would there be problem in signing up Guy A this late?
Thank you.
Withdrawals:
Guy A is 62 and Guy B is 42. Both in good health and both currently employed.
Married filing jointly - Fed tax 25%, State tax 5%
Even if Guy A stops working today and does not have any other income or SS, the tax bracket will not change based only on Guy B's income.
Guy A has about $200K in Trad 401k+Trad IRA.
They can live off of Guy B's income only if needed.
When should Guy A start withdrawing from his Trad 401k+Trad IRA? Would it be prudent to just to wait and take RMDs when required to do so?
Because of the 20 yr difference, RMD percentage is lower per IRS tables.
i-orp was not of help as it couldn't handle 20 year difference. If I made up a smaller age difference of 10 years, it assumes the older spouse drives the retirement which not the case.
Medical:
Currently, Guy A has health insurance through his own employer and Guy B through is own employer - Different employers, different health insurance companies. Both are HDHP + HSA with individual coverage. Employer for each one is a megacorp.
Guy A intends to retire at 65 and start social security at age 70.
Upon retirement, Guy A will switch to health insurance under Guy B as spouse.
Addition of a spouse, results in $1200/yr increase in employee contribution of health insurance. Employer of Guy B will add $600 additional to the HSA for Guy A as spouse.
Fed tax 25%, State tax 5% and FICA 7.65%. So post-tax additional cost will be $1200*(1-0.25-0.05-0.0765) = about $750
Less the $600 received in HSA, the net cost becomes $150.
As such this is a great deal. Or seems so far.
GuyA's medicare Part A will start upon receiving SS at Age 70.
Guy A can delay enrolling in Medicare Part B and D as long as he is covered on Guy B's employer health insurance.
Given this, would it be prudent skip medicare part B for Guy A till Guy B retires?
Say Guy B retires at age 67, then Guy A will be 87. There is a small chance that Guy A is not in best health - may be nursing care etc. Would there be problem in signing up Guy A this late?
Thank you.