WC -- DW and I have similar income/investments, The modeling I've done says the tax bill for the survivor will more than double in $. This jump for us will be approx $5K/year. Irritating, but I agree not not poverty creating. Our survivor will go from IRMAA base to at least the top of IRMMA step-1 and might end up in step-2.I agree there's a penalty there, but what is it, $1-2K? Doesn't seem like all that much for a millionaire.I think I should have been more careful with my words initially - maybe I should have called it a "widows penalty" rather than "tax bomb"?
The spirit of my post was more about the realization that RMDs are going to hit mom sooner than she anticipated (due to now being a widow), that they will occur under a new filing status, and what if anything should be done about it. From my mom's perspective, this "feels" like a bomb since she wasn't expecting to be doing this at all right now.
I've learned a lot about post retirement concerns this last month and I hope this thread also helps others in similar situations down the road. I know it'll help me with planning my retirement in about 25 years. Mom and Dad didn't have a plan for these types of situations, unfortunately, but maybe I can learn from that.
I have realized just in this short thread alone that indeed, there is probably nothing to worry about and just to go ahead and move forward with ownership and not try to over optimize. And given that likely the majority of her income will go to medical expenses, taxes will likely be moot anyway.
Statistics: Posted by RetiredAL — Wed Mar 27, 2024 1:38 am