I’m 60 with $1.5 Million for Retirement: How a Roth Conversion Ladder Can Save Up to $600k in Taxes

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Roth IRA Conversion Strategy: Join me as I break down one decision that could potentially result in $1 million more in ending account balances and a remarkable $600,000 less in taxes paid for someone who is 60 with $1.5 million saved for retirement. You’ll learn the basics of income distribution planning, tax strategy, and Social Security optimization so you can navigate your own retirement planning with heightened financial visibility and potential savings.
🏃🏻 Jump right in:
00:42 Key Parameters and Account Composition of the Hypothetical Case Study
01:28 Retirement Planning Software Reveals Two Potential Outcomes
02:46 Upcoming Tax Law Changes to Know
03:26 Roth Conversion Ladder - What is it?
04:07 Challenging Conventional Wisdom: The Cost of Deferring Retirement Accounts
06:04 Income Distribution Strategy Over Time: A Multilayered Approach
08:44 Understanding Sequenced Phases and Multi-Account Distribution
09:28 Withdrawing More than 4%: Balancing Risk and Security
11:05 Comparative Analysis: Roth Conversion vs. Conventional Wisdom
15:12 Required Minimum Distributions (RMDs): Managing Tax Risk
16:45 Optimizing Social Security: Maximizing Benefits
18:14 Final Analysis: The Roth Conversion Ladder's Impact on Taxes and Wealth
19:02 Conclusion: Gaining Visibility into a Secure Financial Future
#rothconversions #taxplanning #retirementincome
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Disclaimer:
This video discusses fixed-income investing and utilizes the 10-year U.S. treasury as a general representative fixed-income investment. Conclusions reached, opinions stated, and downside risks and potential returns presented should not be construed as applying to other types of bonds or fixed-income assets. Other types of fixed-income products carry different levels of risk and return potential and should be evaluated as an element of a diversified portfolio with your specific risk tolerance, investment objectives, and timeline in mind. Nothing in this video is investment advice, an investment recommendation, or an offer to buy or sell any security. Investing involves risk.

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6 авг 2024

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Комментарии : 100

@diane.moore- 7 месяцев назад

The utilization of after-tax money and tax-free growth makes opening a Roth IRA very advantageous. Through a careful guidance of my FA, I did not pay taxes on my withdrawals of $2.86 million when I retired.

@benjamindavidson22 7 месяцев назад

I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement, I'm 55.

@BillMaass 7 месяцев назад

A suggestion for your follow-up video…now that you have established the benefit of this Roth Conversion strategy with different Social Security claiming ages…you could show what happens to both scenarios if one spouse dies much earlier than expected. Say, the higher SS benefit spouse dies at 75. Alternatively, you could also then show the lower SS benefit spouse dying at 75. That may further illustrate both the potential advantage of claiming at age 70 for the higher earner in addition to executing the Roth conversions while filing as Married Joint taxpayers. Love your videos as they are always clear and detailed. Merry Christmas!

@rzhang3039 7 месяцев назад

Good information and comparison. Thank you!

@tompGA 7 месяцев назад

The issue is that the ending amount shown and promoted is both living to 95. For a couple at age 60 today, they have just under a 5% of both living to age 95. Pretty small odds. Based on the glide path, both would need to live to at least 85 before breaking even, and that has about a 20% chance of happening. Also, pulling that much from IRA before age 65 affects ACA benefits which impact overall savings of the plan. This was not discussed. Finally, what is the estimated investment return and what impact does brokered fees have on this return. Again, it takes a loooooong time to make up the initial tax hit in the early years so this couple better stay healthy.

@RBzee112 5 месяцев назад

If you don't live to 85, does it really matter how much money you had? But, what if you DO live past 85?

@scooter5940 4 месяца назад

Excellent post.

@scooter5940 4 месяца назад

@@RBzee112not sure wha this is supposed to even mean. If you don’t live to 85, money doesn’t matter? Further, it’s well documented older retirees (85 certainly qualifies) on average spend considerably less than younger retirees, so that extra money won’t matter (at least to you).

@russellmm 7 месяцев назад

Great video. I have a very detailed spreadsheet that has almost the identical plan built into it. Unfortuately, I cannot start doing conversations until 2026 (due to income reasons). A couple of important points. 1) if you are buying health insurance and getting subsidies pulling more money out will reduce those subsidies. But you can look it up and estimate the impact. I believe you cannot withdrawl from a ROTH IRA until that account has been established for 5 years. Lastly, if you are younger and watching this, please consider getting an HSA based medical plan (especially if you are healthy). Max out contributions to these HSA but never use those funds (just invest them). Once you retire, you will have "tax free" money that you can use for a wide range of medical expenses. It's even better than a ROTH because you are putting money into HSA pretax.

@TheDjcarter1966 5 месяцев назад

True about the five year rule but you would always draw from your IRA first and let the Roth growth

@sethfowers448 7 месяцев назад

Nice explanation and software screen shots. Much easier to wrap my head around the big picture after seeing this

@jorgevelasquez9955 2 месяца назад

I have a Roth established over 5 years ago. Can I continue to add to that same account and not worry about the 5 year rule?

@user-iy6qu7dj7v 7 месяцев назад

Very clear and well thought-out, as usual. It would be helpful to also show how the conventional strategy (Option B in this case) drags you into increasing tax brackets, IIRMA thresholds and possibly NIIT.

@MyHockeyVideos 7 месяцев назад

Wonderful video!! Helped confirm I am on the right road for Roth conversion. I did have to replay because I could not process the info as quickly as you spoke. Speaking just a bit slower would help my 63 year old brain. Also, I feel a big advantage to plan B is as Iam older I want to keep things simple. I have taken care of three seniors and the SS and taxes become overwhelming for some. If my funds are in a Roth I think my taxes will generally be simpler. Thank you for this video! I sent it to some of my friends who have their head in the sand about financial planning.

@OakHarvestFinancialGroup 7 месяцев назад

Hi Lynn! Thank you so much! These are definitely complex topics for sure - We're glad you were able to go back as much as you needed to get a handle on the info and that you found it helpful! Thank you so much for commenting and sharing with your friends! We'll be here if you ever need help with your plan.

@nicholasrunowich371 7 месяцев назад

Hi. Good video !! Can you discuss in a follow-on video/discussion how if you are not done with Roth Conversations by age 65, how you protect your clients when doing Roth Conversions after age 65 from hitting the IRMAA cliff and going over by that One Dollar. Since the IRMAA bracket is a two-year look back, how do you "guess" the future of IRMAA to avoid the cliff. I once spoke to a CFP about me being a potential client of his and he admitted that he messed this IRMAA cliff up with his predictions and for that one year - his client has to pay the next higher premium for going over the IRMAA cliff. Predicting that future IRMAA cliff and tying that into the Federal Tax Brackets is a tricky thing to do. How do you do it. And how successful are you with your clients at keeping them from going over the IRMAA cliff on Roth Conversations. I have never seen that I recall in any of your videos how you predict IRMMA thresholds before they are even known and how you check against your predicted thresholds - none of your columns in your software that you show us on the videos have that information on it. Thanks , I am looking forward to you discussing this topic.

@jerrylabat550 7 месяцев назад

Relatively speaking that IRMAA cliff is more of a speedbump. You are talking about less than $1K for a single filer. Yes it could be considered wasting $1K, but for someone with over $100K of income it isn't a very big percentage.

@greenteajiang1037 7 месяцев назад

Base on what you stated a smaller account (after conversion to Roth) is more efficient than a larger account, I am wondering if you assume this method is only desirable for those whose tax bracket is higher after retirement? Also how many years it takes on your chart for the blue line and the green line to meet (and then change direction)? I am 77 and plan to retire in 79, and I am not qualified for SS but I do have Medicare. I think I should not convert my pre-tax savings to Roth due to (1) my age and (2) my expectation that tax bracket on my RMD is lower than what I am in now. I would appreciate so much if you may help to clarify.

@kameokid528 7 месяцев назад

How’s come you never show your fee’s ? At what? 1.5% of managed funds per month that’s adds up to a lot of $$$,$$$ for you too. So base line saved is less than showed by you? So you pocket what was saved?? Over the 30yrs planned how much is saved then?

@mackieboy9973 7 месяцев назад

Troy, would you specifically hone in on the 12 to 22 percent change ($89,450 for 2023) and how this 10% federal increase factors into a roth conversion strategy. Presently, I try to keep our adjust gross income just over $90k to minimize fed and state taxes but it also limits the amount of the roth conversions I do annually. Thanks loads, as John Bogle provided guidance to the small investor, you too provide that tax guidance that most of us seldom consider. Steve & Kathy

@katec4096 7 месяцев назад

Hi. Great informative video. My FRA for SS is 66.8 years. I have been retired and living on my pension. I really do not need my SS at this point. I have been putting off Roth Conversations because I plan on moving to Florida next year. I am single. I have over 1.2 million in 403B. I just escaped Irmaa since turning 65. What is the general amount I should aim for converting to Roth. I will not need any of that money for the minimum 5 years. I should not take SS to maximize my conversions. I think that is the basic takeaway from this video. To minimize taxes. Thanks

@pcash4088 7 месяцев назад

Thank you for the thoughtful analysis. Do you know under what circumstances would it pay to continue the ladder until everything is converted to Roth. Is it a large taxable account you can live off of, a pension or other income. What if you won’t need the RMDs based to live on. Thank you.

@5metoo 6 месяцев назад

If you don't need the money you'll be converting to live off of, the converted money can sit in the Roth for a long time and appreciate tax free. That's great and makes a conversion worth it at a higher tax rate than otherwise, though the acceptable rate is a matter of personal judgment. It doesn't matter what enables you to leave that money to grow. Consider yourself lucky.

@user-qp5to9ct7g 28 дней назад

At the outset when you provided the ending greater balance and overall less taxes paid, knew you were talking about a married couple. Most on RU-vid that provide similar examples do the same. Your scenario simply does not work for single individuals with similar age and starting balances.

@user-lz4cf9pm6j 6 месяцев назад

My wife and I have a specific future scenario starting in 2026, which is when we plan to start social security. Our total projected income needs will be 90K annually. Projected social security for me and my wife should be close to 60K annually, so the remainder of 30K will be drawn from traditional IRA(20K) and a Roth IRA(10K). So in our calculation of provisional income, half of SS(30K) + traditional IRA(20K), or 50K, should leave us nearly zero in federal income taxes, given that standard deductions will continue to increase by 2026. Thoughts?

@user-ci6fi4se6i 7 месяцев назад

Appreciate the amazing videos that have so many nuggets of wisdom! Just turned 51 and looking to retire soon:) We'll definitely be implementing the strategies you have shared. Hope to pass on this knowledge to son: plan early. Much mahalo!!

@diannekocer2058 6 месяцев назад

If someone is over 75 does a rolling Roth conversion still make sense? My mom is needing a helpful answer.

@justinssebanenya1329 7 месяцев назад

I very much appreciate your content! However, I wish you would liaise with RU-vid to figure out a way of preventing your videos from being used as lengthy ads to cut into other RU-vidrs' videos we happen to listen to as well. I hope you don't allow your good content to be hated by many as mere inconvenient ads. Thank you!

@brooklyner1 7 месяцев назад

What rate of return are you assuming for the investments? Also - and maybe this is another video - how would this be navigated if one was still employed? Roth conversions seem to work best when they aren’t stacked on top of other income.

@5metoo 6 месяцев назад

Good question. I suppose he's assuming some sort of average or an "all things equal" scenario. I'm doing small conversions while working. IMO it comes down what you think your expected returns might be, and how long you'll be able to let the money sit. If you can let the money sit for a few decades it would mean you could probably give up some more taxes and it still be worth a conversion. If you need the money soon anyway, then you'd want to make sure you only converted at the lowest tax rates.

@johnessency9467 7 месяцев назад

It would be interesting to see how this approach works for single people.

@PrincesSoulmate 7 месяцев назад

Yes, please do a similar video for single people!

@jefftaylor4744 6 месяцев назад

I am 69, retired for 3 years and have some Roth withdrawal questions regarding the order of precedence for the funds used ; 1, my current Roth was opened over 10 years ago by a transfer from a different existing Roth, is that classified as a contribution? 2, a couple of the assets in my Roth had a 1:10 split, does that all get classified aa earnings or 90% of it? 3, if I make a withdrawal that exceeds the amount of my contributions will the next "bucket" of funds be my conversions? Even if those were made less than the minimum waiting period of 5 years ago and I will need to pay the penalty?

@jennifercroke5175 7 месяцев назад

1. How do you decide how much to convert? In the example it looks like apx. 540,000 is converted. How was that amount chosen? 2. Which account are the taxes paid? 3. For yearly withdrawals is it $84,000 + taxes for Roth conversion? Is this correct, during Roth conversion years they will be withdrawing more than 4%.

@Bill-vk7fh 7 месяцев назад

He said it was more than 4% during the Roth conversion years.

@nateCA 7 месяцев назад

When doing Roth Conversions, are you able to pay those taxes from the IRA accounts? Can you explain that a bit ? Great video and very well done.

@swright5690 7 месяцев назад

Yes. Estimate the tax due and tell Ira holder to withhold that amount as tax. Or you convert the entire amount and send a cheque to uncle Sam or do a electronic payment of estimated taxes due.I think the taxes are due in the same quarter as the conversion. You can't do it in January and pay tax in December.

@robertm3730 7 месяцев назад

if you are asking this question, I highly recommend you consult a financial planner to help you. Not someone being paid taking a percentage of your asset growth, but someone who will consult you on an hourly basis. There are a lot of issues involved in whether or not this conversion is going to serve you in retirement years. First, when you take out the money out of your Traditional IRA and moved to your ROTH, it's going to be taxed as ordinary income, like your salary. Right now, it's growing tax deferred if you don't touch it. So, as swright5690 said, you have to take out the amount you want to put into the ROTH PLUS the taxes due on the withdrawal So, let's say you make $100,000 salary. And you convert $150,000 out of your Traditional IRA into your ROTH IRA. If you do that in the same year, you are now paying taxes that year in the $250,000 federal tax bracket versus the $100,000 you were in. Obviously, you will in a higher tax bracket that year and your tax bill is higher. So, when you withdrawal the $150,000, only the post-tax value goes into the ROTH. Tax man gets some of the $150,000 due to the fact you are now in the $250k tax bracket. This is all a mathematical calculation that unfortunately is not easy for non-financial experts to figure out because the tax code is very difficult to understand. Plus, there are variables related to your personal situation that cannot be assumed and need to be considered, such as your marital status, children, health situation, retirement age, etc. I am not a financial planner and have no horse in this race, but I would take pause before moving to a ROTH IRA until you understand the financial impact for you in 2023 versus 2033, all things considered.

@nateCA 7 месяцев назад

@@swright5690thank you!

@rocketlasr1158 7 месяцев назад

Am I to assume that you have cash in a bank account to pay the taxes on the Roth Conversion? Where is that cash to pay for the Roth Conversion coming from?

@tpolerex7282 6 месяцев назад

You are assuming 2024 tax brackets for 2040 tax outlays, as if the amounts in inflation adjusted brackets won’t substantially rise - you will likely stay in future lower brackets even with the substantially higher distribution amounts in the future.

@jpgsf1978 3 месяца назад

What about the five year penalty for taking Roth distributions ?

@JA-zh6ew 7 месяцев назад

Great information!! Thanks so much!! What are your thoughts on doing larger conversions over a shorter period of time and landing in the 24% bracket (we’d already be in the 22% bracket), and maximizing the 2nd IRMAA penalty bracket (2x premium)? We’re comfortable with that for a few years. Any thoughts would be greatly appreciated. Thanks. Happy holidays.

@andrewrivera4029 7 месяцев назад

Yea, hopefully President Trump gets re-elected in 2025 and makes those rate permanent. The current government both elected and unelected doesn’t seem to give 2 hoots about spending…

@bobt.1341 7 месяцев назад

My thinking exactly... 22% vs 24% is so close I want to max out 2023,24,25 conv. Last wk did this for 2023. Im 64 now... once SS starts ~67 we will reduce conv some. Don't trust what the future TAX brackets will look like + if I passed early my wife's brackets would be painful for her.

@5metoo 6 месяцев назад

If you're comfortable with the 24% bracket given your circumstances is what matters. There is no right or wrong answer, but the longer you can let the money sit in a Roth after conversion the easier a decision it would be. On the other hand, if you'll need to use that money soon then you need to be careful not to pay any extra in taxes since it won't have much time to appreciate.

@user-md8uc7ii5q 7 месяцев назад

I am 65 in March already collect SS and have a modest pension. All my savings of approximately 1 Mill. Is in an IRA. I live off the dividends from my stock investments with SS and pension. I do not use the 4% rule. I generate approximately 85K from the combined pension SS and dividend. Does it make any sense to do a conversation since I do not have any non IRA funds other than the pension and SS. Thanks look forward to your reply.

@DunRovinRanch-1969 3 месяца назад

Good question. Sadly, no response.

@bjmorgan3092 7 месяцев назад

I have $690k in preTax IRA. I am 61, retired, and my RMD will start at 75. I did a $45k conversion today(12/27/2023) but had the taxes withheld which I know is suppose to be a no-no. But all converted funds cannot be touched for 5 years without penalty regardless of age so I couldn't make myself pull $10k from my savings to give to Uncle Sam. I am in the 22% tax bracket and the $45k was the max before I fell into the next tax bracket. My stomach fell strange right before I hit submit. I plan to convert over 13 years so when RMD hit, I should have very little left. I currently have a pension and will start S.S. at 67. My husband plans to retire in 3 years.

@5metoo 6 месяцев назад

"all converted funds cannot be touched for 5 years without penalty regardless of age" - This is not correct. When you fund the 1st Roth IRA it starts the 5 year timer. If you've owned a Roth for 5 years and you are over 59.5 years of age there is no 5 year period or penalty that applies to you.

@bjmorgan3092 5 месяцев назад

@@5metoo Back door Roth/ Conversions timing is different than regular contributions to a Roth. If I convert for 10 years, Each Conversion will have it's own 5 year timing starting in the year of Conversions.

@marantz747 2 месяца назад

where is the response video?

@jonrico7937 5 месяцев назад

Graphs are difficult to read. Please change the color of the font. Great videos!!

@OakHarvestFinancialGroup 4 месяца назад

Thanks for the feedback, Jon! We're working on a solution for this.

@mikespangler98 7 месяцев назад

If you are on an ACA (Obamacare) insurance policy remember that can act as an 8.5% surtax on your income until you have paid back the entire subsidy.

@dcerar9559 7 месяцев назад

My circumstances are somewhat similar. However, I’m nearing 61 and am retired on a pension of $120,000 + $11,000 for medical both with a 2% COLA. I don’t qualify for SS, but I am eligible for Medicare when the time comes. I’m single and don’t care about leaving money to anyone at the end of life. Not that I won’t, but that is not important to me. I have about $900,000 in investments outside of my $1,600,000 in a traditional IRA. Though I see the tax advantages. I don’t think they are as important as the couple you profiled. I live well within my means and have no need to touch my savings for quite sometime. Based upon what I profiled I don’t see as big an advantage and quite frankly paying a step up in taxes of approximately $300,000 to do a complete Roth conversion seems painful. What about a partial conversion instead of the whole IRA conversion? Say a 50/50 ratio of Roth to Conventional IRA? That’s a little easier to digest.

@andrewrivera4029 7 месяцев назад

He clearly said IF you adopt this strategy you can’t be half in half out for it to work, your IRA will continue to grow tax deferred til you hit 70 when mandatory withdrawals occur meaning you have no choice about how much you want to withdraw. You have to ask yourself can you live with the temporary dip in your overall account balance up front and while tax rates are low currently so that you can benefit from the tax free income at the end and not have to worry about how much the tax rates will be.

@keithmachado-pp6fv 3 месяца назад

I am not going to challenge your math for that specific case study. I can tell you I have run many simulations on my specific situation and in none of them does the increase in ending value exceed the tax savings. In some cases, paying double the tax by not converting still ends up with a similar ending point. I do notice on many of these conversion videos that the % of income outside of tax deferred accounts is very low. With a six figure pension and SS, I am at the top of the 12% bracket before any IRA withdrawals. Any conversions will put me into the 22% bracket with IRMAA surcharges. Yes that still may be better than the future if not converting, but I ran the numbers to age 90 and even in the 28% tax bracket in the future, there is considerable tax savings but the impact on after tax net worth is a fraction of the tax savings. Given the present value of $1 paid in tax today is more valuable than $1 paid 20 years from now and the uncertainty of lifespan and investment gains, the benefit at age 90 is only attained if you live that long and at that point who needs the money. I will enjoy it now vs sending it to Uncle Sam.

@margie6534 7 месяцев назад

How does this approach work if I expect to be in a lower tax bracket than in my earning years?

@robertm3730 7 месяцев назад

You bring up the fact I have never understood by people advancing Roth conversions out of tax deferred accounts. The only mathematical way the conversion makes sense is that the person is in a HIGHER bracket after retirement. I am sure such people exist, but I don't think they are the norm.

@bjmorgan3092 7 месяцев назад

@@robertm3730 what you are saying makes sense. I did a tax planning on me and my spouse and we will be in the same tax bracket. So the conversion works for us, so all future income from the investment will not be taxed. Most people getting pension, S.S., and have retirement accounts, I think the tax bracket will be the same if not a little higher due to no dependents, home paid off, etc. Just my opinion but this is my scenario.

@5metoo 6 месяцев назад

@@robertm3730 - But you're forgetting that people with no income at all can convert at 0% rates. Pretty sure 0% makes mathematical sense.

@gauravipal9518 7 месяцев назад

Thanks for a wonderful video. 1. What impact would the Roth conversion ladder have on the ACA subsidy? Has that been factored into the final balances? 2. I am 58 years and 9 months old (less than 59.5 years). Retired since June 1, 2021, at age 56 years and 2 months (beyond 55 years). Am I eligible to implement the Roth conversion strategy right away to take advantage of the years I have before 2026? 3. People always talk about taking from either Roth or 401 K accounts since I came to USA when i was 37 and brought assets with me but had fewer years ro cobtribute to 401 K. My regular brokerage account has ($900 K) which is more than my 401 K ($700 K). My Roth is a negligible $50 K. It would be great if, in one of your future videos, you could take a case with substantial brokerage balance instead of only looking at Roth and 401 K accounts. Thanks a lot again for all that you ate doing.

@garrettsuhm1647 7 месяцев назад

If you’re taking the ACA subsidy I think a Roth conversion would never be worth it. That is 10k/ year just for the subsidy.

@pathkris2984 7 месяцев назад

Do you intend to spend the next 10 years or so deferring social security and using the 4% rule to draw funds from the brokerage and IRA above? That works out to about 64K per year.

@davidparker7156 7 месяцев назад

What about the impact to medical cost? I did not see that in the plan with Roth conversions?

@bradley244ify 7 месяцев назад

And the age when you begin. I am 73 and discussing doing larger conversions but the crossover for net worth does not come until the late 80s for 19:55 me. I am thinking I may need a nursing home by that time.

@davidparker7156 7 месяцев назад

@bradley244ify I think once rmds start can't convert anyway. Enjoy what you have now and don't worry about taxes

@robertm3730 7 месяцев назад

You bring up an excellent point about needing money in your 60-70's for a catastrophic heath issue versus a big gain from the Roth conversions when you are 80. Handing that money to the tax man means that you can't use it to pay for health care costs.

@robertm3730 7 месяцев назад

@@bradley244ify Exactly. Why would you pay the tax man now to get some extra money in your 80's (assuming you make it there) when you may need the money in 2024 for heath care, a downturn in the markets, or some other activity you love at 73 that you can no longer do at 89?

@METVWETV 7 месяцев назад

@davidparker7156 You think wrong. Of course you can do a Roth conversion after 72.

@M22Research 7 месяцев назад

This scenario walk thru is my favorite format for retirement planning videos and nobody does this format better than Troy. Please evaluate different smart screen colors since even on a large TV, reading the columns of numbers can be very difficult. I don’t recall earlier videos having this low contrast issue. New/different smart screen?

@ibrahimseth8646 7 месяцев назад

Debt=100T Loan=200T Yield(30 Year)=1000% Loan(30 Year)=200T*1000% Loan(30 Year)=2000T Balance=Loan-Debt Balance=200T-100T Balance=100T Payout(30 Year)=10,000T { Loan(30 Year)=2000T Income(30 Year)=8000T } Insurans: Premium=? Yield=18% Year=30 Premium=10,000T/1.18^30 Premium=70T(Cash=30T) { Balance=100T } Yield(30 Year)=1.08^30=10=1000% Thank you.

@Markazoid6041 6 месяцев назад

Love your videos, but don't like the blue screen. Hard to see.

@leeward1717 7 месяцев назад

Single scenario, similar total assets. age and timeframe, but minimal taxable account, With goal of reducing future taxes at age of SSA election at 70? Is much more of a mind bender due to lower tax, irmAa and provisional income thresholds. How did the exemplar couple address health insurance from 60-65?

@robertm3730 7 месяцев назад

Mathematically, if you give the tax man thousands of tax dollars, you have less left for emergencies in the short term, such as health care, buying a car, major repair to your home, etc. His model does not consider unexpected short-term disruptions to traditional IRA withdrawals which real life tends to fall upon us. After the tax man has the cash, you have to wait years and years to get access back from growth in your Roth IRA when you are 80. By then, odds are that the extra cash in the Roth account won't matter to your quality of life.

@5metoo 6 месяцев назад

@@robertm3730 - If you can't let the money sit in a Roth for years and years, or if it will be invested in fixed income funds with low returns, conversions are much less likely to be worth it. It is strange how few that promote Roth conversions emphasize this fact, though it explains why they see it as a matter of pure tax rate comparison.

@jerrylabat550 7 месяцев назад

So why don't you funnel all distributions (other than RMDs) through the Roth account? My thinking here is the yearly spending needs aren't exact, so any extra money pulled from the normal IRA would end up in the Roth and be tax free.

@mR-dc4oq 7 месяцев назад

It’s taxed when you convert to a ROTH- it’s considered income so can knock you into a higher tax bracket. These conversions take that into consideration.

@leeward1717 7 месяцев назад

IRS would not permit -

@jerrylabat550 7 месяцев назад

@@leeward1717 Sure they do, these conversions would be no different than the ones being done in the first 4 years, the only difference would be where the taxes were paid from. Since their post tax savings were exhausted, they would have to be taken out of the conversion.

@jerrylabat550 7 месяцев назад

@@mR-dc4oq But whether it is done as withdrawal or conversion, the same amount will have the same tax impact.

@swright5690 7 месяцев назад

One of my complaints with him and Oak Harvest. Just list your fees on your website. I met with one the cfps a few months ago and it was something like 1.25% of AUM. No thanks. I think that industry is overpriced, but people keep paying.

@anthonymaida8667 7 месяцев назад

Math off true again

@happyappy19931 Месяц назад

What I see is that the government is the biggest problem for retirement. Taxes, inflation, spending, SS insolvency. Sigh…

@OakHarvestFinancialGroup Месяц назад

Hi @happyappy19931! These are definitely some of the biggest and hardest things to work around but we make it our business to offer the best solutions for each situation to try and reach your retirement goals.

@Dcopeland62 7 месяцев назад

Wouldn’t her social security actually be $1,800/month not $1,500? For a spouse it’s the greater of actual or 1/2 their spouses.

@jermelpurse3018 7 месяцев назад

This information isn’t quite correct. You should be approaching this ladder if you are a high income individual in retirement if not, you should stick with the traditional method. I don’t know what this financial advisor is talking about but you need to listen to someone else.

@墨紫月 7 месяцев назад

Agreed

@rocketlasr1158 7 месяцев назад

What do you consider high income individuals? Is this couple in the example a high income individuals?

@ibrahimseth8646 7 месяцев назад

Loan(30 Year)=1000M Loan=? Yield=5% Year=30 Loan=1000M/1.05^30 Loan=231M=100% Payout(30 Year)=1100M { Loan(30 Year)=1000M Income(30 Year)=10,000M } Insurans: Premium? Yield=18% Year=30 Premium=11,000M/1.18^30 Premium=80M(Cash=151M) { Loan=231M=100% } Cash=151M { PettyCash=1M Invest=150M Dividen=6%=9M Reinvest=3% Expenses=4.5M Expenses(30 Year)=1.03^30*4.5M Expenses(30 Year)=10M } Thank you.

@ibrahimseth8646 7 месяцев назад

Capital=1.5M { Expenses(10 Year)=1,000,000 Yearly=1,000,000/10 Year Yearly=100,000 insurans: Premium=500K Yield(10 Year)=1000% Payout(10 Year)=500K*1000% Payout(10 Year)=5,000,000 } After 10 Year Payout=5,000,0000 { Expenses(10 Year)=2,000,000 Yearly=2,000K/10 Year Yearly=200K Insurance: Premium=3M Yield(10 Year)=1000% Payout(10 Year)=3M*1000% Payout(10 Year)=30M } After 10 Year { Payout=30M Expenses(10 Year)=10M Yearly=10M/10 Year Yearly=1,000,000=1M Insurance: Premium=20M Yield(10 Year)=1000% Payout(10 Year)=20M*1000% Payout(10 Year)=200M } Note:20 Years needed. Thank you.

@markdavis1116 7 месяцев назад

NO WAY!!!!!! Someone with $1500 in social security benefits could have saved $1.5 mil. More BS tax assumptions.

@benjamindavidson22 6 месяцев назад

@OakHarvestFinancialGroup 6 месяцев назад

Hi Christopher! Thanks for watching and for sharing your goals - we'd be able to help with more information, so if you'd like, you can give us a call to set up a complimentary appointment with one of our financial advisors. You can schedule that here: click2retire.com/schedule. Take care!