But the rates are going up 2025 so I am just beginning to do a Roth and want to start before the end of the year so it will be at the end of the year but at least I’m getting in on this year because there’s only two more years before our rates go up Automatically. (tax cut and job acts reform is coming to an end! Plus our deductible is going to be going way down, especially if the Democrats come in! so I can’t lose starting at the end of this year!) then maybe I should start again at the beginning of next year I have no idea, but I’m just saying I want to get in on this year. Let me know if Im wrong
I started my 401K (not IRA) when I was 24. I am 64 now. It provides me a monthly check each month. Or buy you a very nice car or stay in a very nose assisted living. Live it up!
one non financial goal i have since retiring at 55 has been to participate in doing a bicycle century ride yearly. i have always wanted to participate but never had the time to properly condition for it. so far i have done the ride for 2 yrs and will do so again next month and have increased my ride time preparing for it. did 4.5 hour ride yesterday with 57.5 mile ride with climbing. also trying to preserve muscle mass with pushups. continuing learning for the sake of learning with reading stuff online and books. 1-2 trips per year. financially i am selling off taxable brokerage equities to fund early retirement while leaving the retirement funds untouched, doing yearly roth conversions and computing and paying my quarterly estimated tax payments. yes too much screentime computer, phone and tv watching a lot of YT videos a lot about retirement and investing/personal finance.
This is the kind of content I need know to cut the tether. I'm in a paralysis by analysis loop, finding it easiest to luck the can down the road. One issue though is that though I am 65, my wife is 53 and when I stop working we'll both stop working. Therefore our plan is for a much longer time horizon than other 65 year olds. Eric, ALL of your videos are incredibly helpful. The ones about 5 drawdown strategies are especially revealing. I've shared them widely, and our plan is built as a customized asset liability model. Thanks for the examples on those options.
Thanks for your great videos, Pat. They provide insights on how things can work together, while still addressing finances quantitatively. Sometimes we need to step back and see the larger picture.
62 with most monies in deferred 401k accounts. if i do roth conversions and live off cash for 3 years, i have no cash to pay taxes. How detrimental is paying conversion out of converted funds?
The best part of your channel is that you consistently make content that really doesn't inform investors of important information that actually matters. Telling a person to make a Robinhood account and then invest in spy is better advice than anything I've seen from brokers that supposedly have plans that can help people retire. Seems like a cash grab rather than a financial planning channel imo. Not to mention the brokers charge for what a simple SPY ETF can outperform in every way. Lastly, most brokerages are so focused on saving money tax wise that it leaves the investor with a retirement plan that is slower and gets less gains than if they just sold options on Robinhood.
I converted my 401k to a Roth IRA to avoid higher taxes in the future. I'd rather pay taxes now than be stuck paying taxes on my retirement income when I'm 59 and living off my savings.
Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retiremen
Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual invstment account or employing the services of a retirement planner/invstment advsr.
With retirement on the horizon, I'm grateful to hve amassed $1.4 million in assets beyond my retirement funds, thanks in large part to hr exprt guidance, which hs substantially boosted my prtfolio's value nd performance.
I looked up her full name online and found her page. I emailed and made an appointment to talk with her; hopefully, she gets back to me.thanks for the share
Even if your numbers are correct, 4.5 hours watching tv is better than 8 hours at work with 2.0 hrs commute (etc.) ... 4.5 hrs (wasted time) vs 10 hrs (wasted time) ... not to mention a bunch of YAHOOS are the ones in charge at work ...
Of course, some of us might be able to choose simplicity, even if it costs more. Like many areas of life, sometimes paying more is worth it for quality of life.
Great video and discussion Eric. I have been retired for 12+ years and retired at 62. I had pride in my work and what I did, but not fulfillment per se. I agree 100% on the importance of the mental side of the retirement challenge and feel it is at least as important as the financial aspects. I always had a plan and was diciplined working toward it so was confident in my ability to retire and meet the financial challenges. About 5 years before making the decision, I focused mostly on what my plan would be after I retired. I decided I wanted to work doing things I enjoyed or always had an interest in but never did it for a job - income was never the motive other than simply provide a small amount I could spend totally guilt free on whatever I wanted. Additionally, I decided on the purpose and use of my time. Since retiring, I've done 2 total resorations on classic cars, built a high performance race car with my son, built a large automotive shop at my son's house for his automotive interest and side hustle work, established great relationships and activity with friends and enjoy being able to offer financial gifting within the family when it's needed. I am doing much more and enjoying it more now than when I was working. I retired a few years earlier than some maybe, but sometimes wish I would have even 5 years earlier 😉. Larry, Central Valley, Ca.
Texas will tax the hell out of you on property tax, they are not as tax friendly as everyone makes them out to be......BUT the property tax bill includes school tax, county tax, fire tax, breathing the air tax and everything else......taxes on my brick home, nothing fancy in the year I left 2017 were 6200.00 I moved to AZ and my taxes were 1/3 that, insurance was 1/2 and many other savings.
The market trend can turn around very quickly. In fact, the indexes often switch from a bear market to a bull market when the news is at its worst and the mood of investors is at its lowest point. I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?
In particular, amid inflation, investors should exercise caution when it comes to their exposure and new purchases. It is only feasible to get such high yields during a recession with the guidance of a qualified specialist or reliable counsel.
True, initially I wasn't quite impressed with my gains, opposed to my previous performances, I was doing so badly, figured I needed to diverssify into better assets, I touched base with a portfolio-advisor and that same year, I pulled a net gain of 550k...that's like 7times more than I average on my own.
NICOLE ANASTASIA PLUMLEE’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I came across your channel through this video-case studies are incredibly valuable, and I'm eager to see more in the future! Building wealth involves establishing routines, like consistently setting aside funds at regular intervals for smart investments.
You're correct. I think the smartest way to go is to spread out your investments. By putting your money into different asset classes like bonds, real estate, and stocks from other countries, you can lower the risk if one part of the market goes bad.
That sounds like a good plan. In the past two years, working closely with a financial market specialist, I've built a six-figure diversified stock portfolio. Now, I aim to diversify even more this year.
NICOLE ANASTASIA PLUMLEE’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Inflation indexed bonds principal works in a similar manner. (I used to be in IT for a brokerage that trade & cleared them.) This sounds way more complicated than it actually is, once one does an actual example.
The little tax bump zone(s) don't matter much if one is way over the bump zone. It only matters if one is *just* into or barely over the bump zone. So if one really wants to thread the needle, suppose one lives on $x per year. One can take $x + $y one year, and $x - $y the next year to mitigate this & get just under that bump in year 2, and live off the excess $y the 2nd year -- as long as $y doesn't put one too far into the next tax bracket in year 1. Always the balancing act, but little 2-year adjustments can make small differences... until of course, they inevitably change the tax laws again. :-/
Always good Eric - thanks. But what if the market tanks 40 % early in retirement, for a couple years, convert into a much higher tax bracket? A good 'hedge' against a downturn? Cheers
always take it as soon as possible because you have no idea how long your going to live the goverment is counting on this so give them the finger and live your best life.
Your Forward Looking Tax Plan and your Marginal Rate Tax layout(?) are two very important documents. If you aren't aware of your future taxes then filling out a 22% bracket may not be the best thing or it could be sliced bread for you. Then you need to have a Roth conversion plan to fill in any voids of a FLTP and to keep down any excursions into unnecessarily high tax brackets.
Good video but I disagree with trying to time conversions for a market decline. It all has to do with the tax rate paid. If anything you could argue that after a market decline your RMDs are lower so future tax rates may be lower.
12:15. I think this is the key objection. The big number shows $54k more. But in the small print, I assume the $10k savings is the 20% taxes on the extra 54k left in your IRA. Yes, you got $54k more in a type of account. But getting money into an account should not be the end goal. Spendable, after-tax money should be. If I just take it all out of my IRA, the actual benefit is $10,694, not $53,474, no?
Thank you for the video. I made my own spreadsheet based on what you said, and it matches perfectly with your graph of marginal tax rate. Note that the horizontal axis is the non-ss income, and therefore, the income after tax is higher. The total tax is the area under the graph, so I am not going to worry about the purple bump. I hope I can do aggressive Roth conversion so that I stay under 22%(25%) bracket.
I fell unexpectedly into the widow trap in 2021. That (now filing single starting 2022) and Secure Act 10 year rule started my Roth conversion process. So I am trying to minimize the total tax bill of mine and my beneficiaries. I have two adult children one of whom is not married. I recently reduced the married child’s share and named my 2 month old granddaughter the amount I reduced her parent. For the next 20 years her income should be minuscule. Trying to cut the IRS out wherever possible.
Exactly. I’ve been going back and forth about whether to convert part of my IRA to a Roth now or wait. The idea of paying taxes now to avoid higher taxes later makes sense, but I don’t want to make a mistake.
Can’t I do a 62,400 conversion at the beginning of the year, with no tax payments, then a 17,600 conversion at the end of the year, marking it as 100% withholding? IRS treats withholding as distributed through the entire year, so unlike a Q4 ES for the year, which has timing issues, it’s considered to have covered the added AGI?
