Bogleheads.org

If you are doing the Backdoor Roth, there is zero chance your wife is eligible for a deductible Trad IRA contribution since the MAGI limits are substantially lower. Instead of making a non-deductible IRA contribution, she should either contribute the $6.5k to her new SIMPLE IRA to help max it out ($15.5k limit for 2023, plus $6.5k catch-up >50)) or put the $6.5k contribution into a taxable brokerage account. If you have the funds available, do both. BH Wiki on non-deductible IRA- https://www.bogleheads.org/wiki/Non-deductible_traditional_IRA Note- Putting money into taxable presumes your own employer plan is already maxed, if it is not, you should put the $6.5k into your employer plan rather than taxable. Generally, taxable contributions sh...

I am not sure I understand how IRMAA works. For 2023 the IRMAA threshold MAGI is 194,000 for a married couple filing a joint return meaning if our 2021 income was over 194,000 we would be subject to the penalty (higher premium for Part B). It wasn't. We are doing Roth conversions potentially up to the top of the 22% bracket which is 190,750 for 2023. If for example I made a mistake and our 2023 income was 195,000 the relevant lookback would be from 2025. Are IRMAAs inflation adjusted? They weren't and they currently are but I don't know if that is written into law. If the IRMAA for 2025 was adjusted for inflation up to 200,000 then my look back to 2023 of 195,000 would not subject us to the IRMAA penalty? Is that how it works? I hope that ...

If my relative were to gift the ETFs to someone else in a few years would my cost basis be transferred to that third person? Yes. Edited to add- unless the shares still had a loss, then the basis that transferred would be the fair market value on the day of the original gift, per the complex gifting losses rules. That's my understanding, but I am happy to be corrected. And what if the shares are worth more than I paid for them originally when my relative transfers them to someone else several years from now? My understanding is that, once the share price rises above what you paid, the loss is wiped out & your original basis is what the donee would use if he gifted the shares. At that point, your original purchase date also becomes the ...

I would second the option of direct payment to the college as the best route. Obviously, this will require cash, not stock, so the tax consequences of selling shares, if required, will fall on your shoulders. "Can you gift tuition expenses for the grandkids to the university directly? Yes—in fact, that’s by far the best way. As of 2023, the educational expense gift tax exclusion limit per year to any single individual, including a child, is just $17,000. However, if you’re making a tuition payment directly to an accredited educational institution, you should have unlimited gift tax exclusion for educational expenses. " https://www.cunninghamlegal.com/education-gifting/ https://www.elderlawanswers.com/you-can-avoid-the-gift-tax-by-...

6d1v7x3 wrote: ↑Thu Mar 23, 2023 6:20 pm If my relative were to gift the ETFs to someone else in a few years would my cost basis be transferred to that third person?

Yes. Edited to add- unless the shares still had a loss, then the basis that transferred would be the fair market value on the day of the original gift, per the complex gifting losses rules. That's my understanding, but I am happy to be corrected.

Just so everyone knows I bought these shares back when they were worth more than they are now. So that means I'd be gifting unrealized capitol losses? Sorry for my ignorance. Does the fact that my family member won't be selling matter? Thank you again for your help. Why not sell them and gift the cash? 6d1v7x3- You should take this advice. The capital loss gets banked by you, for use in future either deducting from income $3k per year or deducted from capital gains you incur. Your relative gets cash, which has no cost basis that needs tracking- he invests how he sees fit. It's simple, everybody wins. You might want to read the tax loss harvesting (TLH) wiki- https://www.bogleheads.org/wiki/Tax_loss_harvesting Your relative can even buy bac...

I was able to lock a rate last night at 6.125% for a 30 year fixed rate. Lender credits ~1500 then was offered an additional 1,000 to quickly complete tasks last night. So, credits will offset loan costs. Putting 20% down which, after closing costs, should leave us about 35k from the sell of our current home. Some of that will go to touching up paint at our current house and paint at the new house. The only furniture we plan to purchase soon is a bed for the guest room. Loan estimate showing monthly payment of $3440 so right around my initial estimate. Our taxes and insurance are only $367 combined per month so that helps. The appraisal was waived so hoping this confirms what we think which is we got this house at a good price. Going throu...

Just so everyone knows I bought these shares back when they were worth more than they are now. So that means I'd be gifting unrealized capital losses? Sorry for my ignorance. Does the fact that my family member won't be selling matter? Thank you again for your help. If your family member never sells, one would think that eventually the losses will become gains as, over time, the ETFs recover what they lost. This may make some time, depending on the particular ETFs & when they were bought, etc., but the principle is sound. Once the share price goes above your cost basis, your basis becomes the donee's basis as well. If your relative literally never sells the shares & holds them until death, the shares will be passed to his heir with...

I am considering Tsp life cycle 2065 60 percent. And Tsp G fund 40 percent To roughly achieve vanguard life strategy moderate growth for simple asset allocation during retirement This is for tax deferred account. I appreciate any opinion. It's fine, just be aware that your exposure to international stocks will be somewhat less than what you wanted when you posted in 2021. L 2065 is 34.65% I Fund, whereas your 2021 AA had international at 40% of stocks, with stock AA of 60% overall. It's not a huge change, probably won't matter. If anything, you'll probably have slightly higher gains with a larger bias towards US stocks. L 2065 has the same AA as L 2055, about 99% stocks, so don't expect much of a glidepath towards more fixed income for the...

6d1v7x3 wrote: ↑Thu Mar 23, 2023 1:57 pm

livesoft wrote: ↑Thu Mar 23, 2023 4:50 am A lot of the comments assume there are unrealized capital gains, but there could be unrealized capital losses. The rules are a little different if one gifts shares that have unrealized losses.

Can you please tell me what the rules are for unrealized losses? Thank you.

Try this article- https://www.schwab.com/learn/story/how- ... r-receiver

Gifting losses is quite a bit more complex than gifting shares with gains. Good record keeping is key.

Yes, you can contribute to a 401k & a SIMPLE IRA in the same year, as long as your two employers are unrelated. IRS- "The amount of salary deferrals you can contribute to retirement plans is your individual limit each calendar year no matter how many plans you're in. This limit must be aggregated for these plan types: 401(k) 403(b) SIMPLE plans (SIMPLE IRA and SIMPLE 401(k) plans) SARSEP" As you mentioned, the 2023 limit across all these types of employer plan is $22.5k. If you're 50 or over, add $7.5k to the limit. https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-one-retirement-plan Edit- Obviously, if your new job has an employer match, you want to contribute enough to max th...

Thanks for the feedback and tool tips. I'm not following the ACA considerations since I was planning on using my company's retiree medical. ACA seems pretty expensive relatively speaking. Even next year, I'll have a pension, my wife's pension and SS (unless we delay SS a bit), and probably $20-$30K in bank interest and bond income. I could move all my bond fund investments to my IRA but if I did that my AA would be out of whack for my comfort level. My point is, I think our lowest level of taxable income will be the next two years but our MAGI is still around $90K (I have to look deeper at this number to be sure). 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 med...

If you turned 72 in 2022 or if you will turn 72 in 2023, this article could clarify whether you need to take a 2023 RMD from your IRA.
Article talks about IRS Notice 2023-23 (https://www.irs.gov/pub/irs-drop/n-23-23.pdf edit- fixed bad link) that clarifies SECURE ACT vs SECURE ACT 2.0 confusion on RMD ages.
https://www.thinkadvisor.com/2023/03/20 ... 2023-rmds/

TL; DR version-
If you turned 72 in 2022, you have until 01 April, 2023 to take last year's RMD. You also have a 2023 RMD.

If you turn 72 in 2023 (1951 birth year), no RMD is due for 2023, your required beginning date (RBD) is now April 1, 2025.

I would keep the two accounts separate. This marginally increases paperwork, but may greatly increase your options going forward.

If you ever get to the point where a Backdoor Roth process is the only way to contribute to a Roth IRA, you will need to rollover your IRA to your 401k (or similar) to minimize the pro rata issue that retiredjg mentioned.
Many employers plans won't take a incoming rollover from an IRA with commingled contributary & rollover money. They are allowed to under federal law, but many just don't want the hassle.
Here's an Ed Slott article that is right up your alley- https://www.irahelp.com/forum-post/1395 ... llover-ira

If your annual RMDs are about 2% now, it's hard to fathom that you're going to drain the IRA by having RMDs in a down year. The years where the market is up 6%-12% should be more common & the IRA will grow rapidly in those years. Just mimic your 95/5 AA in the IRA & don't worry about it. Your RMDs are being re-invested- either in taxable or else you're putting the money in checking & increasing your TDA/Roth 401k deferrals from salary, right? You're pulling depressed shares out of the IRA & putting them in taxable- aside from taxes, you haven't lost anything, the market will rise again. If the IRA was worth $100k last DEC, RMD is $2k (2%). Say the market drops 40% & your IRA is worth $60k. $2k is a 3.33% withdrawal, no b...

Investopedia says: "You have the right to continue receiving your Social Security benefits in India for as long as you are eligible under your own earnings or are a dependent/survivor. This means: You earned a minimum of 40 credits under the Social Security system or worked in the U.S. for at least 10 years" https://www.investopedia.com/articles/personal-finance/120215/going-back-india-retire-howto-guide.asp I am just guessing, but I think the wording - "worked in the U.S. for at least 10 years" is another way of saying "earned 40 quarters of SS work credit," since the two periods are equivalent. I'm no SS expert, but I think the 40 quarters of work/SS credits is non-negotiable to be eligible for worker's benef...

Really appreciate all the comments. The neighborhood is definitely a big difference in terms of what we are looking for long term. However we are close with some of the other young families on our current street so that is hard for me to leave. New house is only 5 minutes from our current house and also has young families but would need to meet people in the new neighborhood. We have placed an offer. There are multiple offers and we are not interested in a bidding war. The house came on the market yesterday and is very competitively priced. We will see what happens. Will update. Good luck on your bid, although it seems as if a bidding war is likely if there are multiple offers 24 hours into the listing. If you miss out on this house, just ...

I think you can afford but I would still counsel against it. A 3300 sq ft house on 0.8 of an acre for 4, maybe 5 people? You're not going to own that house- that house is going to own you! Think of all the extra consumption that the new house brings with it- HVAC costs triple, mandatory riding lawn mower, wife gets tired of cleaning a big house & hires a maid, repairs/painting/furnishing are $$$, etc, etc. What are you going to do with all the extra space? Is there no house in the neighborhood that's a reasonable upgrade for a reasonable price, say 2200-2400 sq ft for $450k-$500k? Why buy a McMansion just because you can? Over the life of your 30 year mortgage, you could end up paying an over $100k extra for each additional 500 sq ft- h...

I bought the 2021 version of Wade Pfau's 'Retirement Planning Guidebook.' I think he has an updated version out this year. It's good, but I haven't been too diligent about reading cover to cover- too many distractions in life.

I learn more on the BH boards & on the BH wiki than anyplace else. https://www.kitces.com/ is another site that's super informative.

I'm sure you'll get plenty of folks chiming in with other recommendations.

general question: if she kept taking it, would SSA adjust her monthly amount later? That depends on how much she's going to be making at her new job. Up until the age of 60, your earlier earnings are inflation-adjusted for PIA calculations. After 60, they are frozen in time so any year where you make more than a previous year's adjusted amount (there would usually be the 35 highest years counted), the higher year will bump the lower year out. When that occurs, your PIA is recalculated. OP should have her friend get her SS earnings record from: https://www.ssa.gov/myaccount/ and then input that record into: https://ssa.tools/# There's a nifty feature in the calculator that clearly shows which years are "Highest 35" years & the...

Are you still contributing to tax-deferred accounts? Yes - 25% of my gross income. But I'm not contributing to Roth at the moment, due to an issue with my wife and my tax situation (filing Married Filing Separately). 2023 should be the first year we can resume Married Filing Jointly. I have a Roth, just have not been contributing for the past six years or so. Do you have an idea of your 2023 Modified Adjusted Gross Income? If you resume filing MFJ for 2023 & your MAGI is below $218k, your & your wife would each be eligible to contribute $7,500 to your Roth IRAs. This would be a nice $15k start to building up your Roth accounts as you wait to retire & begin converting Trad. IRA funds to Roth IRA. Is your wife about the same age?...

I read the Wiki and a few other resources and wanted to check my understanding of the rules to inheriting and IRA to make sure it is correct. If I am a non-spouse beneficiary and do not qualify as an "eligible designated beneficiary", and the original owner has started taking RMD's, then I must take RMD over a 10 year period. Furthermore, if the original owner already made a RMD for 2023, then I must start my RMD in 2024. I am not interested in taking a lump-sum. Sound correct? <snip> Yes, traditional IRA. Thank you for the information, it is very helpful indeed. It still wasn't clear from reading the Schwab link if I can take withdrawals over the 10 years as I see fit, or if I needed to take the same amount each year. Both optio...

I recently became classified as a HCE at my company due to a raise last year that put me over $135,000 in annual salary. The only implication of this is that my pretax/roth 401k contributions are limited to 17% as opposed to the 35% limit of all employees. 17% of $135,000 = $22,950 which is more than the annual limit, after tax contributions remain limited by a fixed 9% for all employees. 1. Does this really impact me in any way as someone under the age of 50 who can't make catchup contributions besides having to keep my contribution at 17% year-round rather than bumping it up and down. You don't mention whether you are using the after-tax 401k option, but I think after-tax & pre-tax are both included in the 17% HCE contribution limit....

Silk McCue wrote: ↑Mon Mar 20, 2023 1:05 am

Navillus1968 wrote: ↑Sun Mar 19, 2023 11:04 pm

OP's friend is forgoing $1350/month for 15 months= $20,250.

At 70, her benefit will be $1350 x 1.1= $1485/month.

Breakeven number of months after 70: $20,250/1485= 13.6 months.

The break even analysis you performed is fatally flawed.

Your numbers only show how long it takes to earn what they would have earned up until age 70. It then ignores that they would have continued to earn that in the 13.6 months that you claim achieves break even.

The real break even is 12.5 years (150 months) . $20,250 / ($1485- $1350) = 150 months.

Cheers

Oops- that's why posting after midnight is a bad idea! Appreciate the correction. It did seem too good to be true.

123 wrote: ↑Sun Mar 19, 2023 10:38 pm

Navillus1968 wrote: ↑Sun Mar 19, 2023 9:49 pm ...A 10% raise that lasts forever sounds pretty good...

It would depend on how long her "forever" turns out to be.

Edit- feel free to ignore this post, bad math to follow! Mea culpa.
OP's friend is forgoing $1350/month for 15 months= $20,250.

At 70, her benefit will be $1350 x 1.1= $1485/month.

Breakeven number of months after 70: $20,250/1485= 13.6 months. Note- this doesn't factor in the taxes owed on the 15 months of SS while she is working full-time, which reduces the numerator.
People get hit by buses, but OP's friend has a decent chance of making it to 71 if she's fit enough to work 40 hours a week at age 68 and counting.

I read the Wiki and a few other resources and wanted to check my understanding of the rules to inheriting and IRA to make sure it is correct. If I am a non-spouse beneficiary and do not qualify as an "eligible designated beneficiary", and the original owner has started taking RMD's, then I must take RMD over a 10 year period. Furthermore, if the original owner already made a RMD for 2023, then I must start my RMD in 2024. I am not interested in taking a lump-sum. Sound correct? You mention the IRA owner taking a 2023 RMD, so it's clear you inherited a Traditional IRA, yes? You are correct that the IRA owner having started RMDs means you must continue RMDs. As you note, you must also liquidate the inherited IRA by 31 DEC of the 10...

Have your friend plug her numbers into https://opensocialsecurity.com/

If suspending benefits makes sense, the calculator will recommend it. I would bet money that suspending her SS is the way to go- build DRC & avoid taxes on her SS benefit, it's a win-win.

A 10% raise that lasts forever sounds pretty good.

SSA will restart her benefits automatically at 70, but she also has the option to restart them by contacting SSA at any time prior to 70. https://www.ssa.gov/benefits/retirement ... spend.html

PS- Your friend will have to pay her Medicare bill separately, since withholding it from a suspended SS benefit is not a thing.

Your golfing buddies are correct if they were referring to SS spousal benefits, not survivor (widow/er) benefits". Spousal benefits based on a spouse's yet to be claimed benefits are zero because spouse's benefits have not started. That only leaves the survivor benefit. OP here. What is the value of a "spousal benefit" versus a "survivor benefit"? Your wife has the possibility of up to three SS benefits, depending on her work history. 1. Her own SS retirement benefit. For this to be available, your wife has to accumulate 40 quarters of employment & be at least 62. 2. A spousal benefit that is based on your SS retirement benefit. For this to be available, the worker (you) has to have begun taking his retirement ...

some additional info based on above comments my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA) $150k in Roth conversions will put you in the middle of the 22% marginal tax rate, adding $24k of SS benefit ($20.4k taxable income) won't change that. taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit T-IRA ~$3m AA 55/45 R-IRA - $160k AA 100% equities current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.) - from taxable we will sell mutuals or stocks and pay capital gains if/...

some additional info based on above comments my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA) $150k in Roth conversions will put you in the middle of the 22% marginal tax rate, adding $24k of SS benefit ($20.4k taxable income) won't change that. taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit T-IRA ~$3m AA 55/45 R-IRA - $160k AA 100% equities current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.) - from taxable we will sell mutuals or stocks and pay capital gains if/...

Can I give the contents of my Fidelity brokerage account to someone else who also has a Fidelity account? My account is composed of ETF's and they will not be sold by either myself nor the person who will receive them. Is this going to be a taxable event for either one of us? Thank you very much for any help. Neither the donor (you) nor the donee (recipient of the gift) will pay taxes on your gift when the gift is made. However, the EFTs you gift carry with them your cost basis, so that if the donee ever were to sell the shares, their capital gains would be calculated on the price you paid & taxes would be due at that point. There are some exceptions (donations to charity, death of the donee), but that's the gist. If your gift exceeds ...

This may be a repetitive or redundant question but I am wondering how others in similar situations feel - My current plan is to defer my SS till age 70 (will be 67 in June 2023), do moderate Roth conversions up thru 2025 ($100k to $150K) What size are your tax-deferrred accounts today & how large do you expect your RMDs to be in 6 years? https://www.schwab.com/ira/ira-calculators/rmd Any particular reason you plan to stop Roth conversions after 2025? RMDs shouldn't begin until 2029, yes? Why not continue the conversions at a lower level once the TCJA brackets revert? In general, you want to avoid a low-tax trough in your 60s income followed by a permanent spike in marginal tax rates in your mid/late 70s caused by RMDs & SS. Better ...

Hello! I'm a new federal government employee and am considering allocating the entirety of my bond allocation to the G Fund. My rationale is that the G fund is zero risk and so this would let me tweak the remainder of my portfolio towards riskier investments, while keeping my overall risk the same. Both my spouse and I are in our mid 40s and we have one child in elementary school. The total portfolio amount is mid six figures. Some questions: 1. Is this plan reasonable or do you think that there is a better way to proceed? 2. My existing allocation is 60/40. How far can I modify this while keeping the overall risk the same - 65/35, 70/30, 75/25? I'm not sure how I would go about calculating this. I did search the forum - although there is ...

I searched this forum yet did not find the definitive answer to my question, which is: "What happens to a deceased person's unclaimed Social Security benefits with respect to a surviving spouse?" Yes, it is a personal scenario. I am 68 years old, my wife is 59 years old. I plan to draw my Social Security when I reach 70 years old. My golf buddies (who are typically knowledgeable on these susbjects), state that my wife will not receive any of my SS benefits if I die before I begin withdrawing my SS. 1. Your golf buddies are full of beans. 2. SS Survivor benefits exist separately from your wife's own SS retirement benefit (if she has one) & there is an optimal claiming strategy for any given mix of the two benefit amounts &...

I searched this forum yet did not find the definitive answer to my question, which is: "What happens to a deceased person's unclaimed Social Security benefits with respect to a surviving spouse?" Yes, it is a personal scenario. I am 68 years old, my wife is 59 years old. I plan to draw my Social Security when I reach 70 years old. My golf buddies (who are typically knowledgeable on these susbjects), state that my wife will not receive any of my SS benefits if I die before I begin withdrawing my SS. 1. Your golf buddies are full of beans. 2. SS Survivor benefits exist separately from your wife's own SS retirement benefit (if she has one) & there is an optimal claiming strategy for any given mix of the two benefit amounts &...

Depending on your age at retirement, you could easily do a rollover of your 401k to an IRA at Schwab, Fidelity, Vanguard (or a host of other discount brokers), begin withdrawing money and never pay an annual fee again. This option requires you to reach age 59.5, although there are other ways to access IRA money before 59.5 penalty-free.

If you retire after 55 but before 59.5, your last employer's 401k offers penalty-free withdrawals. This option is not a feature of any type of IRA. If you retire after 59.5, this point is moot.

Do Roth IRA Contributions Count Toward Your 401(k) Limit? Investopedia is clear enough on this question--or seems to be: "No, Roth IRA contributions do not count toward your 401(k) limit. However, Roth IRA contributions do count toward your total IRA limit. So, if you contribute to both a Roth and a traditional IRA, then the combined amounts can’t exceed the annual contribution limit." Just checking, though: A friend of mine has worked thus far this year on a 1099 basis and contributed the max $6,500 to her self-directed Roth IRA. In April, though, she will begin working for the federal government, where she would like to max out her TSP with the limit of $22,500. My reading of Investopedia suggests that this is fine. Do you agre...

Although I don’t know what tax rate we’ll be in in retirement, I assume it will be lower. I say this because our biggest expenses (besides tax) will be gone. Mortgage, student loans, childcare. These things alone are nearly 40% of our income, so my assumption is we won’t need our full income in retirement. Maybe only half, or 60%. Maybe that’s a wrong assumption. There are many wealthy people on this forum. But most retired Americans are not wealthy. Once you're a bit older and have saved a nice pile, you can start worrying about RMDs. For you, today, Roth is not a good choice, IMO, and even more so because (based on your other post) you're trying to find ways to save money. Deferring taxes saves a lot of money. I’ve been doing a deep dive...

Anyone have an idea how the IRS would treat this situation? - Someone makes a $2M gift in 2010. - Then, during 2018-2025, while the Tax Cuts and Jobs Act increased lifetime exemption is in effect, this person gifts another $8M. - In 2026, this person passes away. Per the latest guidance from the IRS, the 2018-2025 gifts will be immune to clawback after the TCJA sunsets. But will the 2010 gift be immune too? This article is by a tax nerd for a tax nerd audience- https://esapllc.com/clawbackpropreg/, but I think the gist is that the 2010 gift is in the clear since the 2010 gift tax/estate exclusion of $5M was more than $2M gift. "Determine hypothetical gift tax (a gift tax reduced, but not to below zero, by the credit amounts allowable ...

OP here. Sorry for any confusion. Account Titles at EJ are as follows. Statements for all three are mailed as one portfolio listed as "Portfolio for dead son's name" at top and addressed to dead son c/o 90 year old's name. Individual Retirement Account Select--dead son's name $331K (later called in EJ Documents Traditional IRA and Edwards Jones Trust Co As Cust/FBO dead son IRA C/O 90 year old) Single Account Select--90 year old's name $171K (later called in EJ documents "Single, TOD-Select") Individual Retirement Account Select-90 year old's name 19K (later called in EJ Documents Traditional IRA and "Edwards Jones Trust Co As Cust/FBO 90 year old's name IRA) At the top of each page under account holder dead son is...

Regarding home/mortgage: Mortgage is 30 year, 608k at 3.6%, 27 years left. When I objectively look at our numbers, this is the big one for me. It’s 18.5% of gross and approximately 25% of take home. I really thought everyone would be all over that number, which isn’t that helpful because that’s really the one line item we won’t change. We have 55 acres which was farmed by my great grandfather, eventually sold, and I’ll be damned if it didn’t go for foreclosure 5 years ago after changing hands a few times. We built a home on it 2 years ago. I’ve wanted this land since I was a boy. Do the numbers necessarily make sense especially when considering the big elephant of the student loans? No. But there’s more to it than numbers. It’s a visceral ...

Hi All, I looked all around the internet and this forum but couldn't find a clear answer. I know for taxable accounts that treasuries are exempt from state and local tax. However, when buying a treasury with a tax advantaged IRA account will the withdrawals of that accrued interest/dividends be exempt from state and local tax as well? I'm with Schwab so if it is then is Schwab tracking how much treasury interest that are state/local tax exempt? Right now CDs are about 50 basis point higher so if not I would probably go with CDs but if they are exempt I might go with treasuries when I withdraw them at retirement. Trad IRAs are great for tax-deferred growth & not-so-great for ordinary income taxation of withdrawals. Short answer is no- a...

It sounds like your relative has done well with his 90% stock/10% cash AA. With about $100-120K in cash, he has about 3 years of living expenses isolated from the swings of the stock market. Instead of fundamentally changing his investment strategy, you might just QA a few things- Verify that his cash is earning a decent amount of interest in a HYSA or CDs, etc., rather than just sitting in a sweep account or checking account. Do you know his taxable/tax-deferred/Roth percentage? You might ask him if he has considered what his RMDs will be at 73? Perhaps partial Roth conversions post-retirement would make sense to bring down RMDs, especially if one of the couple predeceases the other & has to file Single? Has he considered his SS claimi...

Allan wrote: ↑Tue Mar 14, 2023 6:20 pm I posted this question on another thread and decided to re-ask the question here. I am re-marrying in a few months, both of us are over 70. I didn't start my Soc Sec until 70, therefore my benefit is higher than my soon-to-be spouse. If I should pass away would my wife be able to take my higher benefits?

The marriage has to last nine months for the new wife to qualify for survivor benefits. AARP- "In most cases, a widow or widower qualifies for survivor benefits if he or she is at least 60 and had been married to the deceased for at least nine months at the time of death." https://www.aarp.org/retirement/social- ... -dies.html

I'd put off the sky-diving lessons for a while...

This thread sounds like you are on the young side and trying to max out tax-deferred options. I think you should max out your Roth options while you are young. As time goes on and your joint income grows more than the tax brackets grow and your tax burden grows, then you can change to more tax-deferred in your later working years. If you read some of the threads by older Bogleheads about doing Roth conversions before their RMDs start, you will soon realize there is such a thing as “too much” in tax deferred. Even if you die with a lot left in tax-deferred, your heirs will be stuck with emptying it out over 10 years (assuming they will have have to roll the plan into a Rollover [traditional] IRA). We are in early to mid 30s with a late star...

Hey, thanks for another clue! If I assume the net permitted contribution of c. $12k included all of my catch-up $, that should give me an idea of what the (then-) permitted max was... Maybe. ADP has always allowed anything in the range [1,90]% of paycheck. Haha, great. I would inform ADP ASAP that you have likely already over-contributed for 2023. They will figure it out soon enough, but better to get the ball rolling. The sooner they cut you a check, you'll avoid shifting income to 2024. If $12k was the limit for 2022, I wouldn't expect a big difference this year. PS- I wasn't kidding about telling your co-workers to get on the 401k train, especially the two guys who put in zero! In a company with only 12 workers, two zeroes looms large i...

Does your 401k have a 4% employer match? If not, chances are its not a 'safe harbor 401k' & has failed annual testing required by IRS designed to prevent highly compensated employees (HCE) from contributing too much to the plan vs their non-HCE brethren. Going forward, HCE will have their contributions throttled to non-HCE level plus 2%. I've been throttled at 5% of salary before- 0/10, do not recommend! Ok, I believe the throttling is real, so a follow-up q: How can I know how much I'm permitted to contribute under current conditions? Just keep deferring & accept the refund checks as they come in (which I assume may be only annually)? So far this year, I've set aside $16841. I tried to reduce my rate on January 30th and am still w...

Thank you all. Still wanting to double check my understanding that the $77K is taxable. The mom was 89 when 63 old son died, she'll be 91 in April. Do you know if EJ knows this is an inherited IRA? Customs differ between custodians, but my understanding is that most custodians will title an Inherited IRA something close to - “[Original account owner's name], deceased [date of death], IRA FBO (For Benefit Of) [heir's name], Beneficiary” In your OP you wrote- "The money went to Edward Jones into an 'Individual Retirement Account Select'," which doesn't have any of the expected verbiage. Also, do you know if the decedent's Mom has designated her own beneficiary(ies) on her inherited IRA? Whoever that beneficiary is will be locked in...

In either case, is a 457 available with strictly employee contributions? Putting a lot in there would likely reduce AGI. Would also be helpful to know the fees & investment options in the 457 plan in order to compare with an brokerage IRA. Here is the fine print on fees that I am finding. Administrative fee of $30 year. And whatever all this means... Transfers will first be made into a cash sweep vehicle with TD Ameritrade. Then, you can purchase other investments. Also, when moving money back to your Plan’s core investment options, the TD Ameritrade assets will be liquidated and moved to the cash sweep vehicle first, and then moved to the core investment options. Transfers into each Plan’s SDBA will be subject to a minimum amount of $...

If she moved the money properly (within a 60 day window) from the decedent's 401(k) into an inherited IRA, then you're correct. The rollover would not be taxable and she would only be taxed when she takes distributions. The Empower 1099-R is probably because they don't know what she did with the money. There should be a way in your tax software to indicate that the full amount was rolled over. This should then have the effect or reducing to zero the amount of the distribution that is taxable. If she missed the 60 day window, then there may be circumstances where the IRS would grant a waiver (and treat it as a qualified rollover). See IRS Revenue Procedure 2020-46 for more details. And yes, generally she has 10 years to empty the IRA. I don...