What to leave behind: Choosing Assets

[target2019]

Individual and Joint perspectives abound!

We did not retire young enough to use up taxable. So there's that difference for us.

As I look at the stocks and funds in taxable today, there is more than enough. So we're transferring some of that in limited gifts each year.

The IRAs will probably be limited to RMD withdrawals only.

The Roths will remain for last, and it's not possible to predict if they'll be used in our lifetimes.

As someone mentioned, we pick from a pile which makes sense or has to happen in any particular year.

 

[HI Bill]

...spreading out IRA withdrawals over a longer period (i.e., BEFORE RMDs) might lower your taxes in the long run.

This is exactly what I'm doing...taking IRA withdrawals according to the Rule of 55, up to the standard deduction, then selling taxable equities to maximize the LTCGs 0% tax bracket each year before I hit 59.5. Then I'll be able to withdraw from all of my tax-deferred accounts except one, and can balance the withdrawals to minimize tax torpedoes once SS hits. Everyone's situation is different, and you really need to consider your age, accessibility of funds, current tax rates, future likely tax rates, etc. I'm using the LTCGs exclusion [0% tax rate] to the maximum [$89,250, MFJ for 2023] each year as long as they're available.

 

[RetiredAt49]

I am not worried for myself but I do worry about the kids/grandkids.

In what way do you “worry” about your kids/grandkids? I’m asking because a majority of the issues I personally see are kids who are spoiled, entitled, etc. but perhaps I have a jaded view because I earned everything I have. My parents gave me nothing. I grew up on a farm. Put myself through college. And I retired at age 49.

A majority (almost all) of the people I know whose mommy/daddy paid for everything have turned out to be… how to say this politically correct… lazy, entitled, selfish, non appreciative, etc.

I personally hope to “die with zero”… hope that my last check I write bounces…

 

[SecondCor521]

This is exactly what I'm doing...taking IRA withdrawals according to the Rule of 55

IRAs are not subject to the Rule of 55 AFAIK. Only employer plans like 401(k)s.

 

[Slim11]

I dont have a roth, and converting now will probably cost too much. I plan on taking out of my 457, the intrest stating at 60 and if I dont need it all, invest it. If I need it, then Ill spend it. Unfortunately, not everyone has the same investments. This plan works for me on paper.

 

[Jeffman52]

In what way do you “worry” about your kids/grandkids? I’m asking because a majority of the issues I personally see are kids who are spoiled, entitled, etc. but perhaps I have a jaded view because I earned everything I have. My parents gave me nothing. I grew up on a farm. Put myself through college. And I retired at age 49.

A majority (almost all) of the people I know whose mommy/daddy paid for everything have turned out to be… how to say this politically correct… lazy, entitled, selfish, non appreciative, etc.

I personally hope to “die with zero”… hope that my last check I write bounces…

Funny enough that is what DW and I tell our kids (they are 30 years old and 32 years old). We plan to bounce our last check as we both pass away together.

Granted that wont happen but its just making sure our kids know that we aren't specifically saving for them to inherit it.

As far as our spend down, we will retire very soon. We will be spending down our 401K to live on and also doing Roth Conversions. But when we start SS we will decrease the amount we are taking from our 401K. I haven't started a spreadsheet to figure out the math on the conversions and tax implications but its on my list to do.

We do have some money in cash and CD's, so if the market goes off a cliff we can live on that for a few years without touching our investments.

 

[Koolau]

"What to leave behind: Choosing Assets"

I thought that when I croak, I will have to leave everything behind.

About what to spend first, I think I will try to draw down my 401k/IRA.

Yes. I'm trying to keep my 401(k) from becoming unmanageable as my RMD % increases. No tIRAs - all converted to Roth.