I'm 80 And Retired With $900,000 In My 401(k) Should I Convert To A Roth IRA

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Would a Roth Conversion improve my tax efficiency? What happens if I run out of income before I run out of life? Will my spouse be ok? In this study, we'll take a look at being 80 and retired with $900,000 in your 401(k). Should you convert to a Roth IRA?
0:14 Introduction
1:04 Disclaimer
1:31 Case Study
2:06 Plan for Everything
2:39 Current Situation
3:53 Roth Conversions
6:30 Tax Brackets
8:29 401(k) vs Roth IRA
13:48 Starting Distribution Tax
14:14 How Much to Convert?
15:09 Medicare Part B
16:55 Conclusion
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#incomeplanning #retirementplanning #retirementincome #retirewith900k #retirementat80 #retiredandmarried
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Investment advisory services offered through Blue Ridge Wealth Planners, an SEC Registered Investment Advisor. This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Past performance does not guarantee future results.
Blue Ridge Wealth Planners does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.
Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Actual results will fluctuate with market conditions and will vary over time.
Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.
Blue Ridge Wealth Planners is an investment advisory firm, and not an accounting firm. Viewers are encouraged to consult with a tax professional to assist them with their specific tax situation. This video is for informational purposes only and should not be considered as tailored financial or tax advice. Viewers should consult with a financial services professional to assist them with their investment and financial planning questions.
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Опубликовано:

29 сен 2024

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Комментарии : 8

@pamelawalker9056 Месяц назад

Thank you

@blueridgewealth Месяц назад

You’re welcome! Let us know if you need help with anything!

@davidfolts5893 Год назад

Interesting content! Thanks much!!!

@blueridgewealth Год назад

Thank you so much! Glad you enjoyed it!

@Erginartesia Год назад

You didn’t cover what is probably the most important tax risk/advantage… and that is their risk of one spouse passing away.. then being subject to the widow tax bomb. Each year this risk goes up a LOT for this couple in this age group. What’s worse … if one person passes, their current income floor will likely drop and the remaining person may have to take out the RMD or even more. RMDs will not go down if one person passes, but SS and maybe pension will. What will the taxes be, taking the same amount of money out, for the single person remaining vs their current situation? It’s HUGE! You’ve GOT to show that risk, or you’re only evaluating half the picture.

@blueridgewealth Год назад

Ergin, you are exactly right. This gives even more reason as to why this type of conversion makes sense. As you mention, even if the first spouse passes, income could still be high with keeping the larger of the two Social Security checks and possibly a full survivor benefit on a pension and the same amount of RMD if both spouses are the same age. Based on the structure of this video we were looking at the impacts of taxes with both spouses living, but it would be a good thing to take a similar scenario to this and talk about the impacts of a spouse passing away. Thanks for the feedback!

@blueridgewealth Год назад

Hello again, Ergin. We recently released a video that addresses a situation in which one spouse passes away. You can find it here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-rBNUvndOxhI.html I hope this is able to provide some insight and value to you. Thanks again for the feedback and your viewership!

@randolphh8005 Год назад

They are 80 and 81, so life expectancy is about 10 years for one or the other. He said they don’t need the money. When one dies fixed income goes down, taxes go up, but now the RMD is likely replacing necessary income. So let’s admit the survivor will be fine, even if they pay more taxes. They clearly should have converted earlier. Converting now is “maybe” better for the heirs. Converting now is not cheap, since it has to go on top of RMD’s. I might have missed it, but at what rate did they contribute to 401k? We contributed almost all our 401k money in 30% brackets. Contributed to Roths in teens. Now retired and no where near 30% brackets. We are converting smaller amounts in the teens when able. Let’s be honest, we won’t see our brackets go back to 30%, unless our portfolio is gaining 10% plus over the next decade, in which case we are fine either way. On the other hand, paying 20% rates on conversions may not get us anywhere, since our invested money takes a big haircut.