Thank you. Confirms my current thoughts. Yes, my income should be only what my accounts throw off after 2025. I don’t need the income for a while.1. Yes.I retired in April and I am starting to think about the next 15 years.
Details: 56 years old. Married.
I will pay 37% fed and about 5% state taxes this year.
Maxed my retirement and HSA this year
Sitting on about 3 years of cash currently in a high yield MM fund. (~5% or so yield)
I have a pretty good understanding of my expenses and in the event of SORR scenarios I can easily cut by 50%.
Will claim social security when it makes sense. Same with Wife.
Have about $3M in pre-tax IRAs all invested in (VOO) or (VTI)- S&P 500 index fund or Total Market index fund respectively.
I will make about $130K next year due to deferred compensation and I anticipate another $50K in dividends and interest. After that I anticipate about $50-$60K a year in div and interest.
QUESTIONS:
1. Should I plan to move money into a roth IRA between now and RMDs?
2. What specific steps should I take to move pre-tax money into a Roth?
3. Should I wait until 59.5 or should I consider a 72T distro? (currently 56)?
4. What would you folks do to minimize the tax burden and maximize growth?
3. Probably wait to 59.5.
Is next year's [age 57] income $190k? $130k deferred + $60k dividends?
Does your income drop off after that? I.e. is your income $60k at age 58?
I didn't like locking in the required 5-yr distribution with 72T. If I took a consulting job after retirement (I did get offers), those 72T distributions would have looked like a bad decision tax-wise.
You don't have to decide now. You certainly shouldn't do a 72T distribution this year [assuming you don't need the income]. Wait and see what your income [and job offers?] look like next year.
4. Put your highest growth investments in the Roth.
Appreciate the response.
Bampf
Statistics: Posted by bampf — Sat May 25, 2024 12:51 am