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If your mom is contributing $600/month to a Taxable savings account, she should instead contribute to a Roth IRA, which will grow tax free. Or to a deductible Traditional IRA, if eligible, as it looks like her marginal tax rate in retirement may be lower than her current rate.

Welcome to the forum! Good move to get a higher rate on her savings. What is your mom’s profit sharing invested in? I’d move all the money invested by an advisor to low ER funds to save a bit in investment costs. Also I’d verify there really isn’t any advisor fee. If your mom nets $60k after tax and saves $7.2k/year to get savings account, is she spending the remainder of $53k? If yes, it would be helpful if she analyzes her spending to look for possible cost savings that she can, in turn, contribute to her savings. If her annual gross retirement spending will continue to be $53k plus taxes (let’s say $60k), if not working after age 70 she will have to fund net annual expenses (after SS) of $29k. At a 4%-5% withdrawal rate, she needs a reti...

As your state offers a 529 state tax deduction, at a minimum do fund/immediately withdraw (if allowed) the $3500/year for education cost (if qualified) through a 529 account.

Welcome to the forum! If you have additional questions about your portfolio, for best advice post using the template found in “Asking Portfolio Questions” here: https://www.bogleheads.org/wiki/Asking_portfolio_questions This way we have the information needed to give you the best advice. For example, in answering your questions it would be helpful to know your Federal and state marginal tax rates and what type of IRA you mention in your post. 1. … I'm in high tax bracket so I don't know what's best for me Roth or Traditional 401k? … Read the BH wiki page linked by lakpr , above. The Traditional v. Roth decision starts with comparing your actual marginal tax rate at contribution to your projected rate at withdrawal in retirement. If your rat...

Have you read the match language in your 401k plan document? Matching contribution % may not apply to income from tips and commissions.

Vanguard’s i401k does not allow in-plan Roth rollovers. E*TRADE’s i401k is the only mainstream plan that I am aware of that allows it. You can amend your plan from Vanguard to E*TRADE.

Welcome to the forum! +1 to retired@50 ’s advice to post your portfolio in the “Asking Portfolio Questions” for best feedback. In the meantime, in your Taxable account turn off automatic reinvestment of dividends and capital gain distributions so you don’t buy more of funds that you may not want. Reinvest in a low cost S&P 500 or total stock market index fund. The BH wiki is a great source of info. The page, linked below, about tax-efficient fund placement may be helpful. It discusses where best to place your holdings in your various accounts. https://www.bogleheads.org/wiki/Tax-efficient_fund_placement Either convert the $4k rollover IRA to Roth IRA (this is taxable) or roll it over into your ADP 401k (if allowed; this is not taxable) ...

tl24 wrote: ↑Fri Mar 24, 2023 11:52 pm … Which of the following, if any, will count towards your MAGI for Roth IRA contribution income limits?
- Pretax 401k to Roth 401k in-plan conversions (i think YES?)
- After tax 401k to Roth 401k in-plan conversions, although this amount should be minimal if promptly converted (I think YES?)
- Traditional IRA to Roth IRA conversions (I think NO?) …

You are correct - yes, yes (just the converted pretax earnings, if any), and no.

… They sent a form to "remove excess contribution"... In addition to SuzBanyan ’s comments, it doesn’t seem appropriate that Vanguard is advising you to remove this as an “excess contribution”. You technically have not made an IRS-defined excess 401k deferral as you are eligible to make the contribution. Rather, you are trying to recharacterize it from pre-tax to Roth. Also, if you did not make a written 2022 employee elective deferral by 12/31/22, you aren’t able to make a tax year 2022 Solo 401k employee elective deferral in calendar year 2023. HomeStretch, are you certain that the following statement is true? "Also, if you did not make a written 2022 employee elective deferral by 12/31/22, you aren’t able to make a tax ye...

Caliscotsman wrote: ↑Mon Mar 20, 2023 12:30 pm … Does the profit share amount need to be contributed by tax day this year? (Tall order)

If cash flow is an issue, you are allowed to make the 401k employer contribution after you file your return. So if you file an extension, you can file your return now but make the contribution afterwards up to the extension deadline. This can be handy for someone who, for example, needs their tax refund to make the contribution.

Patzer wrote: ↑Fri Mar 24, 2023 1:04 pm … At 80, I could get a reverse mortgage, buy a SPIA (Single Premium Immediate Annuity) with the proceeds. That SPIA would pay 14.7K/yr, for a total of 49.7K/yr with Social Security. Most likely, I will still have investments to cover the remaining 4.3K, but even if I don't that won't matter, because I will easily be able to live on 49.7K/yr (Inflation Adjusted).

If you don’t have any assets remaining at age 80, I don’t believe an insurance company will allow you to buy a SPIA with 100% of your reverse mortgage proceeds. You may be limited to 50%. At least that’s what I recall from when I purchased a SPIA for a parent last year.

lucha wrote: ↑Fri Mar 24, 2023 1:21 pm … They sent a form to "remove excess contribution"...

In addition to SuzBanyan’s comments, it doesn’t seem appropriate that Vanguard is advising you to remove this as an “excess contribution”. You technically have not made an IRS-defined excess 401k deferral as you are eligible to make the contribution. Rather, you are trying to recharacterize it from pre-tax to Roth.

Also, if you did not make a written 2022 employee elective deferral by 12/31/22, you aren’t able to make a tax year 2022 Solo 401k employee elective deferral in calendar year 2023.

Edit - for a $1k annual donation, likely not worth using a DAF unless you want to give anonymously. Some DAFs have minimum donation amounts (I think Fidelity is $25). But utilizing a DAF might be part of your estate planning.

In addition to the tax and anonymous giving mentioned by others, above, my/spouse’s plan is to leave any charitable bequests to be directed through our DAF rather than name any charities directly in our Wills.

In the event of a dementia diagnosis for one spouse, consult with an experienced elder law attorney in your state. At a minimum, both of your durable powers of attorney and Will may need to be updated in case Medicaid LTC is ever needed. In my parents state, the home and one car was transferred to the well spouse with no possibility of Medicaid clawback. The point of the planning was to leave sufficient assets for the well spouse.

Long-term care either in-home or in-facility is expensive. If I were in your situation, my focus would not be on the potential care costs depleting an inheritance. Rather my focus would be on insuring one spouse’s cost of care, if needed, did not drain the couple’s joint assets to the point where the well/community spouse is left impoverished without enough to live on or for their own long-term care. Edit - after our parents’ situations, spouse and I have discussed that if either of us are diagnosed with dementia, we will consider putting a portion of our assets in an irrevocable trust for the benefit of the “well” spouse. But the substantial portion of our assets will go to the care of the spouse with dementia (at a minimum, enough to fund...

In my parent’s state, the in-home care my parent received and privately paid for during the 5-year look back period does not matter to Medicaid during their review. No doctor’s certification of the level of care was needed for the Medicaid review (but it was needed for tax purposes as I noted, above). During the ongoing review of my parent’s finances for the 5-year look back period, Medicaid is primarily verifying my parent’s health need is eligible for assistance, income and countable assets as of the requested benefit start date as well as reviewing all transactions in all accounts for the 5-year look back period. They are mainly looking for undisclosed assets/income and gifting/asset transfers during the 5-year look back period which are...

Medicaid varies by state. You need to check what home care your state’s program will cover and whether your dad is eligible for long term care benefits. Eligibility is usually based on your dad’s needs (dementia or assistance with multiple defined daily living activities) and your dad’s level of assets/income. While you are private paying, it is up to you to determine how much aide time your dad needs and can afford. Medicaid in my parent’s state will give a monthly set amount towards home care, if eligible, but I don’t know how that works. In my parent’s state, home healthcare aides through an agency are $30-$35/hour with a minimum of 4 hours per day. The availability and quality of aides is low so be sure to carefully screen the candidate...

I’ll start by saying that if your parent or you do not fully understand these complicated arrangements that you need to set up a consultation with the attorney to review them again. I don’t understand your parent’s set up (but I am not an expert) especially if the attorney is saying their income is too high to qualify for Medicaid LTC benefits in the future. Medicaid and estate planning vary by state. I can only give you my (long) version of events in my parent’s state (not NY) which may or may not help you make sense of your parent’s Trust arrangement. My parent did not have a LTC policy. An irrevocable trust for Medicaid purposes usually involves moving the title of some or all Taxable assets to a properly-constructed trust to avoid the a...

It’s not unusual for IRS correspondence to arrive separately and at a different time than a tax refund or bill.

Before calling the IRS, have you logged into your IRS.gov account to review your 2022 tax transcript and to compare it to your tax return as filed? You will probably be able to see if any line items were adjusted by the IRS that changed the amount of tax due. You may still need to call for an explanation but at least you can direct the agent to the adjusted line which may shorten your call.

For an objective view on your portfolio and whether there are any tax red flags, consider posting using the “Asking Portfolio Questions” template found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions

Is it possible your dad received two checks that total to the amount on the Form 1099-R?

Asking the issuer to explain the amounts and to correct, if necessary, the Form 1099-R is the appropriate first step. If you believe it is incorrect and the issuer does not issue a timely corrected Form, read this IRS Tax Tip for guidance:
https://www.irs.gov/newsroom/what-to-do ... x%20Return.

I don't want to derail my own topic too much but I am wondering - I'll be on Medicare this time next year, is the ACA even relevant at that point? My wife will just use my company's retiree medical for 2-3 years until she can start Medicare. I revisit the Roth conversion decision every year as variables (such as my ACA subsidies) in my analysis change from year to year. So just revisit your Roth conversion analysis annually. You/your spouse have such a short window until Medicare eligibility that likely ACA subsidies will not factor into your Roth conversion decisions for each of the next 2-3 years. If, worst case, the retiree health coverage was discontinued or the cost was higher than subsidized ACA coverage, then you might choose to tak...

Most of the cafeteria benefit plans that I have seen have boilerplate language that says in the event of conflicting language in agreements, the benefit plan agreement language prevails. One reason for this is to keep the cafeteria plan from jeopardizing it’s qualified tax status by not allowing special one-offs in a cafeteria plan that is meant to be applied to all employees consistently. If you really want the legal answer, you need to send both agreements to an experienced employment practices attorney. My non-legal opinion is that if the 401k plan says former employees receive the true-up even if not employed as of the date the true-up is made, you are fine. But learn from my example, below… My spouse and I (not attorneys) almost got bu...

What I don’t understand is how I am not named fiduciary with the state plan but will need to be named fiduciary with my own plan through a provider. I don’t see what the difference is on its face. The plan provider has liability if they function as the named Plan Trustee and/or Plan Administrator. There used to be third-parties that would take on the fiduciary Trustee function for small plans if the plan provider would not assume these functions. When I priced the third-party option about 10 years ago, the fee was $10k for a plan with 35 participants. If you use Vanguard for the higher fee, do they act as the Plan fiduciary? If you take on the fiduciary function, look into whether your business liability coverage covers you as the 401k fid...

Is this a revocable trust or an irrevocable trust? If an irrevocable Trust, was part of the purpose for establishing the Trust to remove assets from the reach of Medicaid if needed in 5+ years for your parent’s care costs? In addition to the house, were all Taxable accounts retitled into the name of the Trust and is the Trust the primary beneficiary on all retirement accounts? Are the long-term care benefits per the LTC policy good if your parent needs them? Or is it’s primary purpose to pay a death benefit to you and your brother if the Estate is depleted? If the latter, if your parent receives Medicaid LTC benefits in the future, will Medicaid allow your parent to keep the policy in order to be eligible for benefits or for you/sibling to ...

Besides yourself, you have three people dependent on your salary and portfolio. If you decide to take a break or retire from work, at least secure your financial future by diversifying out of the volatile single stock. In the meantime, don’t hang your hopes on leaving only if they pay you severance. Consider telling your boss you will be in the office only 1 or 2 days per week, wfh the rest, keep your hours to a reasonable # no matter how many former employer jobs they try to shift to you and your co-worker. The worst they can do is fire you. Polish your résumé and see what else is out there regardless of whether you receive severance or not. Another job for a couple years will give you time to beef up your portfolio and unwind your single ...

Is the $7k just legal fees or does it also include some pass thru expenses paid by the attorney on the estate’s behalf such as court/probate fees, newspaper notices, etc.?

BashDash wrote: ↑Wed Mar 22, 2023 9:28 am Homestretch.....that has me thinking.....the loud bangs aren't sounding like they are literally coming from the laundry machine but nearby in the laundry room where there are a lot of pipes in the ceiling by the furnace etc.

It’s a process of elimination. The arrestors are inexpensive so I’d try those first and it may completely solve your issue.

If not, check the the nearby pipes. They may need to strapped on to a nearby joist/beam to reduce the jumping /hammering. You can check any visible pipes near the furnace when you hear the hammering to see if you can see any big movement in the pipes.

… I'm not following the ACA considerations since I was planning on using my company's retiree medical. … If I'm reading the ACA information correctly, I'll get some subsidy but even with a subsidy it's ~3X higher than my retiree medical. … If company retiree coverage is better/less expensive than a subsidized ACA plan, certainly go with the company plan. With a MAGI of $90k, for a household of 2 you likely won’t qualify for an ACA subsidy in future years if the 400% FPL subsidy cliff is reinstated as scheduled in 2026. Your retiree plan may also not allow you to enroll later if needed, if declined when first eligible. Without the ACA subsidy factor, you will have one less consideration when deciding about Roth conversions. In my case, as I...

Stainless burst-free hoses are a good idea.

If a plumber installs the arrestors, have them wait while you start a laundry cycle to be sure the hammer sound is eliminated.

I was going to try the arrestors but turns out my loud
water hammer was due to a pex water line (near other pipes in a chase) leading into the laundry room that was jumping/hammering when my new high efficiency washer first started a wash cycle.

Going forward, consider taking screenshots of brokerage transactions just in case.

A few years ago, Vanguard had issues with trade confirmations incorrectly using average cost rather than specific ID. I was affected. Luckily I screenshot all brokerage transactions entered so it was easy to prove their error and have Vanguard correct the issue (not all posters were so lucky).

To add to the above good feedback…
If your state has mandatory tax withholding on retirement distributions, you may be able to waive the withholding by submitting a form to the brokerage when requesting the distribution.

No. At your mom’s age, preservation of capital is a high priority. Owner financing is riskier than getting the cash in full upfront. Your mom’s well off friends with great jobs should be able to secure a bank loan.

Has your mom listed the property? Does she have any other offers?

Welcome to the forum! … Tax Rate: 22% Federal (12% after deductions I believe); 6.5% State … It is helpful to know whether your Federal marginal tax rate is 12% or 22%. What is the $ amount on your 2022 Form 1040 Line 15, taxable income? If it is between $20,550 and $83,550, your 2022 rate was 12%. If it is between $83,550 and $178,150, your rate was 22%. You can edit your original post to show the correct rate. … Contributions: New annual contributions for 2023 $~23,000 to his roth 401(k) (total from my 10% contribution and resultant employer match) $6500 to his Roth IRA… $7750 to his Health Savings Account ($1250 from employer)… Excluding your employer’s 401k and HSA contributions, are you saving at least 15% of your gross income annually...

Welcome to the forum! For best feedback, post your full financial picture using the “Asking Portfolio Questions” template found here: https://www.bogleheads.org/wiki/Asking_portfolio_questions Sounds like you are taking advantage of most options available to you to defer income/taxes: 1) 10-year payout on your business sale 2) 401k 3) defined benefit plan I-Bonds (see link, below) offer the ability to defer taxes but annual purchase limits are low. https://www.bogleheads.org/wiki/I_savings_bonds With a workplace 401k, your income is too high to make a deductible IRA contribution or a direct Roth contribution. But you likely can do a backdoor Roth (see link, below) for the years you have eligible compensation via W-2 or 1099 self-employment ...

+1 to Treasuries and no substantial gifting to family as safe choices.

Is this $300k your parents total nest egg?

While your parents’ current income covers all expenses now, it’s possible their care costs may increase substantially. Do your parents have a long-term care policy?

vanguarded wrote: ↑Tue Mar 21, 2023 11:34 am So medigap is no longer available for someone hitting 65 in August 2023? Does this mean they only really have to use those medicare advantage plans now? Was advised a few years ago to look at medigap and steer clear of the all in one advantage plans...

No, Medigap is still available. This thread is about just a couple of the Medigap plans that were closed to new enrollees which is not uncommon.

Is there a concern that the Plan F yearly premium increase will be higher then the normal since no younger and healthier people can purchase Plan F? If so, have you looked at other Medigap plans and are your concerned you live in a state that requires medical underwriting if you switch Medigap plans and may not be able to switch plans? It’s a concern. My parents’ Supplement Plan J was discontinued for new enrollees after 6/1/2010. My elderly parents didn’t look at alternatives as they were heavy healthcare users and subject to underwriting so they remained in the plan for another 12-13 years. Their supplement through United Healthcare had annual increases but no idea if the increases were more or less than other supplement plans. The premi...

seanbaby wrote: ↑Mon Mar 20, 2023 10:52 pm … It is wise to rollover to an IRA …

Another option is to rollover the two old 401k account balances to your current employer’s 401k, assuming it allows rollovers in and has good funds/low costs.

Spouse 2 should consider consulting with an experienced elder law attorney in her state.

Before using the proceeds from Spouse 2’s primary residence… Has Spouse 2 looked into whether Spouse 1 is eligible for Medicaid LTC benefits and if Spouse 1’s facility accepts Medicaid assignment?

… And I'm not sure how frequently those involved realize that a regular POA may actually cease at incompentency, when it might be needed more than ever. … RM, under what circumstances will a durable (I think this is what you meant by “regular”) power of attorney cease at incompetency of the grantor? I guess there is always the possibility where someone not named in the DPOA applies for a conservatorship. Sorry that I wasn't more clear. No, a "regular" POA is not a Durable POA. I don't know a more specific name for what I call a "regular" POA. That's one that is in effect "right now". It ceases at death, and, importantly, it also ceases at incompentency, which is when it would often be most wanted. The DPOA (Du...

ResearchMed wrote: ↑Mon Mar 20, 2023 6:37 am … And I'm not sure how frequently those involved realize that a regular POA may actually cease at incompentency, when it might be needed more than ever. …

RM, under what circumstances will a durable (I think this is what you meant by “regular”) power of attorney cease at incompetency of the grantor?

I guess there is always the possibility where someone not named in the DPOA applies for a conservatorship.

HomeStretch, thanks for your comments. Being totally new to this, I didn't understand that Medicaid would have any part in this, so I appreciate you bringing that issue to my attention. We did recently have a meeting with their estate attorney, who feels that everything is in order– they have a trust, everything is properly titled, etc.– but neither Medicaid nor dementia care was discussed. It sounds as though there is some strategy there, which we would do well to think about sooner rather than later. … The estate attorney and the elder law attorney often have functional overlaps but also different areas of expertise. For example, my parents’ estate attorney used the state statutory form for their durable power of attorneys (DPOA). But wh...

#4 seems like the simplest.

She can likely earn 5% in T-Bills or a bit less in a money market fund. If she moves the bulk of the $, she could be earning an extra $8k-$9k/year in investment income.

Edit - wherever your mom has $, be sure to get your mom’s POA on file or agent access set up so that the financial institution recognizes you as her legal representative.

I’m seriously considering picking a future date certain and getting our adult children involved more intimately in our finances at that point. That date would he well before we’d be likely to actually need significant help. But I’m also concerned about “being the last one in the room” to know that I/we are no longer capable of managing our finances. … I think this is a very good plan and one I intend to use too. My mom asked me to take care of their investments and taxes in her mid-70s. When my dad was diagnosed with dementia a couple years later, she asked me to take over bill pay, insurance renewals, etc. I was glad she did this early before my dad became fully incapacitated. By the time they later needed more help with healthcare and ca...

I like BoA’s Bill Pay and statements better than the Fidelity CMA. Try out the Fidelity CMA for a couple months before deciding whether to switch. Consider holding excess cash in your Fidelity brokerage or CMA where it can be invested in higher-yield fixed income investments like a money market fund or T-Bills. Set up a bank link at Fidelity do you can transfer $ between the two accounts. Keep enough at BoA to pay 1-2 months of bills and avoid account fees. Alternatively, invest at least $100k of the excess funds at Merrill Edge to earn higher returns and retain your BoA preferred rewards status. With $400k at BoA know you should be a Platinum member which earns you higher BoA credit card reward % as described in this BH thread: https://www...

Silk McCue wrote: ↑Sat Mar 18, 2023 5:17 pm As I understand it and from the Social Security site…

Thanks, you are correct. I will correct my prior post.

beyou wrote: ↑Sat Mar 18, 2023 8:00 pm So how does one gather 5 years worth of statements.
Most banks show last year of statements maybe. Do people pay banks to retrieve from archives ?

It took a couple months to gather everything. I downloaded account and credit card statements monthly for my parents as their POA for the last 7 years. So I had some of the documents. For any that were missing, I contacted the issuer.

I went through my parents files to get copies of the personal documents - birth certificates, insurance cards, etc. plus asset titles and receipts for large purchases. I had to contact a few places (car and stairlift dealers) to get duplicate receipts.

Question, is it really necessary to keep 5 years of bank/broker statements to qualify for Medicaid LT care ? Meaning can Medicaid just contact your bank/broker and get the records with your permission, or just you save all bank/broker statements essentially forever to have the latest 5 year rolling statements ? I understand the purpose of a look back, just wondering about the logistics. We are just now moving my MIL $ to a trust, and wondering if we must now start keeping her personal non-trust statements every month and produce them all in 5+ years ? Your state website will tell you the paper document support that must be submitted as part of the application. I am in the middle of a state review of my parent’s Medicaid LTC benefit applica...

Edit - It is odd that your spouse’s parent was owed a SS benefit at the time of death that was then paid to the heirs rather than the Estate. Often it is the opposite situation - the Estate needs to repay the SS benefit received in the month of death.