Are we all forgetting our taxable accounts?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
livesoft
Posts: 61944
Joined: Thu Mar 01, 2007 8:00 pm

Re: Are we all forgetting our taxable accounts?

Post by livesoft » Mon May 01, 2017 4:41 pm

Econberkeley wrote:..., so you pay taxes twice income plus capital gains taxes. am i wrong?
Return of capital is tax-free, so your cost basis in a taxable account investment is not taxed again.

Realized capital losses in a taxable account are not taxed, but give one a tax break.

Realized capital gains in a taxable account are taxed at the going rate, which could be as low as 0%.

It is not clear what your definition of "pay taxes twice" means. It is certainly true that if you don't fill out your tax return correctly that the IRS will happily let you pay taxes twice when you don't have to.
Wiki This signature message sponsored by sscritic: Learn to fish.

Church Lady
Posts: 430
Joined: Sat Jun 28, 2014 7:49 pm

Re: Are we all forgetting our taxable accounts?

Post by Church Lady » Mon May 01, 2017 4:55 pm

when you invest in taxable, you pay income taxes before you get your wages and then invest that money and pay capital gains this times. so you pay taxes twice income plus capital gains taxes. am i wrong?
You pay income tax once. Then you invest. If you get a dividend, you pay taxes on the dividends but the dividends are new money. You pay cap gains taxes on the gain, but the gain is new money. So no, you pay income tax exactly once. It may happen that your dividends and capital gains are taxed at your ordinary income rate, but the tax is on money you wouldn't have if you stuffed the investment amount into your mattress.

Make sense?
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity. Ecclesiastes 1:8

User avatar
triceratop
Moderator
Posts: 5452
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: Are we all forgetting our taxable accounts?

Post by triceratop » Mon May 01, 2017 4:57 pm

"Are we all forgetting our taxable accounts?"

I don't know about you or others, but I have certainly not. My asset allocation spreadsheet shows that I have 91% of my net worth in my taxable account and about 7% in a Roth IRA. I doubt people have "forgotten" taxable accounts; they simply do not have enough to save a substantial amount in them. But if they had substantial savings after 401k/IRA limits then they'd quickly start using them. When one has no 401k or IRA-eligible income then one saves in a taxable account. As livesoft says, even a bank account is a taxable account!

Oh, I pay 0% federal tax on capital gains. Almost like a Roth except for those pesky state taxes and nonqualified dividends!
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

User avatar
flamesabers
Posts: 1728
Joined: Fri Mar 03, 2017 12:05 pm
Location: Rochester, MN

Re: Are we all forgetting our taxable accounts?

Post by flamesabers » Mon May 01, 2017 4:59 pm

simplesauce wrote:Quick thought. Every investing book I read talks about retirement. They advise on building an IRA or 401k, etc.

Very rarely do they discuss taxable accounts.

I think if someone is saving $5,000 per year in their late 20's for example, maybe 2/3 can go into retirement accounts, and 1/3 can go into a taxable account. This way, perhaps there will be some nice gains to enjoy during one's working life.

I understand that those gains will be taxed. But life is short. And for someone's entire savings to be locked away until retirement doesn't make complete sense to me. I think a small allocation of savings could be put in a taxable account. You can certainly build a nice chunk of cash, and at 45 years old, enjoy some comfort.

I make this point because I don't know that I've seen this discussed by any of my favorite passive investing authors.
OP,

I suspect you may be thinking too deeply on this. I highly doubt investments books are suggesting people become present-day misers to fund their retirement. Instead, I think the focus on retirement accounts is a matter of priority and simplicity. IRAs and 401(k)s are tax-advantaged, easy to setup, and have an effective "forced savings incentive" with the use-or-lose it space. You can always get a windfall and dump more money into a taxable account, but you only have until April of 2018 to make that $5.5k contribution to an IRA for fiscal year 2017. It's harder for people to rationalize spending more now and saving more later with the annual contribution caps. It also sets a goal for people as to how much to save each year as opposed to the virtually unlimited amount you can contribute to a taxable account. So long as you have a decent emergency fund, I don't see the need to invest in taxable accounts when you still have tax-advantaged space remaining.

Visitor
Posts: 245
Joined: Wed Apr 02, 2008 4:08 pm

Re: Are we all forgetting our taxable accounts?

Post by Visitor » Tue May 02, 2017 2:56 am

Chip wrote:
simplesauce wrote:Glad to read this response. That's how I'm thinking. Obviously retirement is a huge part of my savings, but a nice 1/3 invested in taxable will really be a nice surprise in my 40's and 50's.
You may like that response because it confirms your thinking, but I think it's dead wrong at $5,000 per year of saving. Unless it is for a defined, known need in the near future, as others have mentioned.

Look at it this way: any savings are for future consumption, whether you ultimately choose to spend them during retirement or while you're still working. Over a 20-40 year timespan the drag that taxes have on your returns can be very significant. That's why people here recommend investing in tIRAs or Roth IRAs - to avoid that tax drag.

At 5,000 a year for 30 years, with a real (inflation-adjusted) return of 4%, you'd have 280k if you had NO tax drag. That would support about 11,000/year of spending for 30 years. Not much of a retirement.

You'd have even less if you put 1/3 of the 5,000 into a taxable account.

The answer is to save more. Put it all into tax-advantaged accounts until you reach the limits. THEN save in taxable accounts.
I remember when I started off in the military about 30 years ago there was no Roth IRA and the traditional IRA contribution was capped at a very small amount of $2000 per year. I contributed the max amount every year in the IRA then invested the rest in a taxable investment.

There may have been a tax drag as you say but I'm very happy I did it. Today my taxable investment is 1/3 of my total investment net worth.

SGM
Posts: 2680
Joined: Wed Mar 23, 2011 4:46 am

Re: Are we all forgetting our taxable accounts?

Post by SGM » Tue May 02, 2017 4:09 am

Early limits for tax deferred accounts were quite low when I started investing. I have always maximized tax preferred accounts.

My taxable accounts have always been important. This is where I tax loss harvest or take capital gains for a large expense and get hit with yearly dividend taxes. I also use it to make donations and gifts. We used the account for paying the taxes on Roth conversions and to pay all expenses in retirement while delaying SS until age 70.

Given the income from the taxable accounts and other taxable income streams the RMDs from tax deferred accounts would have increased our tax burden after age 70 1/2. So I eliminated the deferred accounts through conversions prior to taking SS.

Large medical bills will likely be decades away so I do not regret not leaving anything in tax deferred accounts. The untaxed growth of the Roth accounts will likely outpace any later tax benefits we would have had left to use against high medical expenses in traditional accounts after decades of RMDs.

I am sure some BHs will find fault with this plan, but I have tailored this for our situation alone. :D

TX_Man
Posts: 96
Joined: Mon Jan 19, 2015 5:53 pm

Re: Are we all forgetting our taxable accounts?

Post by TX_Man » Tue May 02, 2017 4:58 am

I contributed to taxable accounts long before retirement accounts. I liked the idea of having investments and having access to it before the age of 59 1/2. My taxable is still larger than my retirement even though I am now playing "catch up" so to speak by contributing like a crazy to the retirement accounts. At younger ages I was ignorant regarding capital gains tax treatment.
Last edited by TX_Man on Sun May 07, 2017 6:35 pm, edited 1 time in total.

MnD
Posts: 3567
Joined: Mon Jan 14, 2008 12:41 pm

Re: Are we all forgetting our taxable accounts?

Post by MnD » Tue May 02, 2017 8:01 am

Between our mid to late 20's (double-income pre-kids period) we accumulated a high 5-figure taxable account, 100% in equities.
It has served as our emergency fund for about 30 years. We have not added to it in about 25 years and 100% equity all the way.

Out of gains from it we have purchased 2 or 3 new cars, a couple years of college costs for one child, part of a house down-payment and covered numerous smaller expenses. In nominal terms it is much larger now than it was 25 years ago and in real terms about the same size.

After 30 years of retirement savings it's now a small part of our investment net worth, but as far as where it ranks on the gain to pain ratio, I consider it one of the best investment decisions we ever made. Write a check for a nice safe brand new car for your stay-at-home spouse caring for two little kids at home and one income - Priceless! :beer
Last edited by MnD on Tue May 02, 2017 10:25 pm, edited 1 time in total.

User avatar
shum
Posts: 75
Joined: Mon Dec 30, 2013 5:50 pm

Re: Are we all forgetting our taxable accounts?

Post by shum » Tue May 02, 2017 8:32 am

Think 70.5+. My friends have RMDs draging their taxable income too high to avoid capital gains. I don't pay capital gains. I don't pay tax on dividends. I have tax-free income set up using taxable investments through charitable gift annuities and municipal bonds. Taxable investment accounts allow me to still manage to minimize taxes, year by year, even after 70.5+, as my RMDs are not so large. OK, in 2038 my gift annuity payments become fully taxable, so at age 97, my RMDs start getting in the way. Even so, my friends, at least those that are still left, we be able to say, finally you understand our problems at 70.5+. Of course if I'm gone, my children get to restart the basis.

Having taxable investments give you flexibility, all through your life, even when you are really old.
-shum

aristotelian
Posts: 4366
Joined: Wed Jan 11, 2017 8:05 pm

Re: Are we all forgetting our taxable accounts?

Post by aristotelian » Tue May 02, 2017 8:36 am

My sense is that very few people actually max their IRA's and employer plans. The thought of saving beyond tax-advantaged options is beyond most people, whether because they really can't afford to save more or because they just don't know any better. For 99% of people, the advice to max their employer plan and IRA is good advice.

User avatar
Johnnie
Posts: 502
Joined: Sat May 28, 2016 3:18 pm
Location: Michigan

Re: Are we all forgetting our taxable accounts?

Post by Johnnie » Tue May 02, 2017 9:31 am

I've been maxing roths and 401ks for a long time, which has meant not accumulating all that much in after-tax savings.

I hope to stop working at 66 and not take social security until age 70. During those four years I'll have a low tax rate and want pile as much tax-deferred into Roth rollovers as I can at that lower rate.

Here's the challenge: Any distributions from tax deferred accounts during that period just to live on are taxable, which crowds out the low tax rate space available for Roth conversions.

So to max-out Roth rollovers at a lower tax rate it's necessary to have enough after-tax money to live on.
Last edited by Johnnie on Tue May 02, 2017 10:08 pm, edited 1 time in total.
"I know nothing."

User avatar
Ged
Posts: 3555
Joined: Mon May 13, 2013 1:48 pm
Location: Roke

Re: Are we all forgetting our taxable accounts?

Post by Ged » Tue May 02, 2017 10:52 am

Jags4186 wrote:
I am of the feeling that heirs should be happy to get anything and I really couldn't give a second thought to the tax treatment of free money they're getting.

Unless you are seriously wealthy (IMO that is $5 million+, but probably should be the amount of money you couldn't spend in your life if you tried) you should be structuring your finances in a way which makes your money most beneficial to you and your spouse in your own lifetime.
I think you are very presumptuous to tell me what goals I should be setting for my finances.

User avatar
Clever_Username
Posts: 1040
Joined: Sun Jul 15, 2012 12:24 am
Location: Southern California

Re: Are we all forgetting our taxable accounts?

Post by Clever_Username » Wed May 03, 2017 9:52 am

I agree with the view that the money I put into tax-advantaged accounts when I'm younger can be used to shift money to when I'm older, as it eliminates the need to contribute to the account at those ages.

I currently have approx. $240K in tax-advantaged savings earmarked and am 33 years old. If that grows at an average of 3% real for the next 30 years, it will be the equivalent of $582K in today's dollars. A 4% withdrawal rate from that money alone would overfund what I currently have for non-housing expenditures, and that's without contributing another dime (and I'll be contributing many more dimes over the coming years).

But this to me is better than a taxable account -- I can easily reduce contributions if I want to bump up my take-home for newer expenditures. It happens that I don't need to do that either.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

Econberkeley
Posts: 41
Joined: Thu Jan 16, 2014 6:51 pm

Re: Are we all forgetting our taxable accounts?

Post by Econberkeley » Thu May 04, 2017 1:54 pm

if you dont invest in 401k through your payroll deduction, your employer will withold taxes for that amount. fir example if you only invest $2000 to get the match the other 16k would be taxed. then you put that money into taxable account and buy stocks. when you sell you will pay capital gains tax. so first income tax and then capital gains taxes on the profits.

however if you invest to the 18k max, you will not pay the tax. you will pay it whenever you sell your investments after the retirement age. basically you are paying taxes only once and it is income tax.

401k looks much better from tax point of view. you dont pay taxes right away so your investments grow much faster. plus you pay less taxes overall.

Rainmaker41
Posts: 453
Joined: Tue Apr 26, 2016 11:34 am

Re: Are we all forgetting our taxable accounts?

Post by Rainmaker41 » Thu May 04, 2017 2:07 pm

We are contributing to tax-advantaged retirement accounts to the extent we can afford now (age 26), understanding that with this savings rate our retirements might be over-funded under optimistic scenarios. If we want to "withdraw" from retirement accounts later pre-retirement, we would do so indirectly by reducing future contributions so as to cash-flow the new expense.

We maintain cash reserves in FDIC insured savings vehicles for simplicity. The tax drag is negligible, and we neither want to rely on making trades in my finicky 403b nor waste space in our Roth IRAs to 'exchange' cash to a taxable brokerage for a stock fund. Because we do not max out all tax-advantaged space, there is no particular appeal to a taxable investment account.
My username is not about money, but is my old online gaming username. I can't say that I make a great deal of money; I just hate spending it. Married the most loving woman in the world October 2017.

dabblingeconomist
Posts: 115
Joined: Wed Jul 13, 2016 8:42 pm

Re: Are we all forgetting our taxable accounts?

Post by dabblingeconomist » Fri May 05, 2017 1:04 pm

Rainmaker41 wrote:If we want to "withdraw" from retirement accounts later pre-retirement, we would do so indirectly by reducing future contributions so as to cash-flow the new expense.
Exactly. This is the key insight: if the business-as-usual plan would be to keep contributing in your 40s or 50s, then if you contribute too much today you can simply contribute less (or zero) then. Effectively, in this case, you are shifting resources from the present to your 40s or 50s, even if the account is labeled "retirement".

lairdb
Posts: 35
Joined: Mon Nov 04, 2013 11:16 am

Re: Are we all forgetting our taxable accounts?

Post by lairdb » Fri May 05, 2017 4:09 pm

This thread has gone a few different directions, but it caught my eye because I struggled to understand some of the conventional wisdom/customary guidance/wiki advice -- until I understood that much of it is aimed at people who are not maxing their tax-advantaged, or are, but don't have much existing or incremental to add to non-tax-advantaged.
aristotelian wrote:My sense is that very few people actually max their IRA's and employer plans. The thought of saving beyond tax-advantaged options is beyond most people, whether because they really can't afford to save more or because they just don't know any better.
That's what was beyond me for some time -- it was honestly a big cognitive reboot for me to understand that those people existed (at least, among this community.) A lot of the wiki and common advice now makes more sense to me if I footnote with with "this may not apply to you if your tax-advantaged space is a small portion of your investable assets."

Garthilk
Posts: 49
Joined: Wed Oct 09, 2013 10:59 pm

Re: Are we all forgetting our taxable accounts?

Post by Garthilk » Fri May 05, 2017 11:14 pm

Hmm,

I haven't forgotten my taxable account. In fact, 66% of my retirement savings goes to a taxable account. I max out my 401k. I'm ineligible for an IRA and then 20% of my AGI goes into a taxable account. I wish there was a way to avoid paying taxes on that savings, but I don't know what else to do.

MrsRoos
Posts: 81
Joined: Thu Sep 15, 2016 4:14 pm

Re: Are we all forgetting our taxable accounts?

Post by MrsRoos » Sat May 06, 2017 12:21 am

We just started to be able to max out our tax advantaged space last year and now at 33, I've just opened my first taxable account with a small $3,000 (and growing), invested in a total stock market index fund. We have anemergency fund, so we're not planning on selling anything in our taxable unless something unexpected comes up.
“Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.” - Kenneth Boulding

mega317
Posts: 2450
Joined: Tue Apr 19, 2016 10:55 am

Re: Are we all forgetting our taxable accounts?

Post by mega317 » Sat May 06, 2017 1:42 am

Garthilk wrote:Hmm,

I haven't forgotten my taxable account. In fact, 66% of my retirement savings goes to a taxable account. I max out my 401k. I'm ineligible for an IRA and then 20% of my AGI goes into a taxable account. I wish there was a way to avoid paying taxes on that savings, but I don't know what else to do.
This is a tangent: what makes one ineligible for an IRA? It seems like you have earned income. Are you above age limit? Are there other exclusions?

User avatar
CyclingDuo
Posts: 1589
Joined: Fri Jan 06, 2017 9:07 am

Re: Are we all forgetting our taxable accounts?

Post by CyclingDuo » Sat May 06, 2017 4:33 am

mega317 wrote:
Garthilk wrote:Hmm,

I haven't forgotten my taxable account. In fact, 66% of my retirement savings goes to a taxable account. I max out my 401k. I'm ineligible for an IRA and then 20% of my AGI goes into a taxable account. I wish there was a way to avoid paying taxes on that savings, but I don't know what else to do.
This is a tangent: what makes one ineligible for an IRA? It seems like you have earned income. Are you above age limit? Are there other exclusions?
This explains who is not eligible.

https://www.irs.gov/retirement-plans/pl ... ion-limits

https://www.nerdwallet.com/blog/investi ... on-limits/

Sounds like Garthilk's amount of retirement plan coverage at work, plus his income for his filing status exceeds the IRS limit for modified AGI which in turn prevents him from qualifying for an IRA.

That leaves the backdoor IRA potential as a technique.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

MnD
Posts: 3567
Joined: Mon Jan 14, 2008 12:41 pm

Re: Are we all forgetting our taxable accounts?

Post by MnD » Sat May 06, 2017 3:12 pm

dabblingeconomist wrote:
Rainmaker41 wrote:If we want to "withdraw" from retirement accounts later pre-retirement, we would do so indirectly by reducing future contributions so as to cash-flow the new expense.
Exactly. This is the key insight: if the business-as-usual plan would be to keep contributing in your 40s or 50s, then if you contribute too much today you can simply contribute less (or zero) then. Effectively, in this case, you are shifting resources from the present to your 40s or 50s, even if the account is labeled "retirement".
But your marginal tax rate in your 40's and 50's including state income tax (typically peak earnings years) could be something like 33%-50%.
Every dollar one choses to not defer during peak earnings years carries a high tax cost.
in contrast, savings made to a taxable account very early in ones work life when typically in lower brackets has little cost in terms of foregone tax benefit. And the tax rate coming out of taxable assuming LTCG is likely going to be some fraction of 15%, depending on the cost basis of shares.

dabblingeconomist
Posts: 115
Joined: Wed Jul 13, 2016 8:42 pm

Re: Are we all forgetting our taxable accounts?

Post by dabblingeconomist » Sat May 06, 2017 4:01 pm

MnD wrote:But your marginal tax rate in your 40's and 50's including state income tax (typically peak earnings years) could be something like 33%-50%.
Every dollar one choses to not defer during peak earnings years carries a high tax cost.
in contrast, savings made to a taxable account very early in ones work life when typically in lower brackets has little cost in terms of foregone tax benefit. And the tax rate coming out of taxable assuming LTCG is likely going to be some fraction of 15%, depending on the cost basis of shares.
If you're expecting your bracket to rise substantially, then save in a Roth rather than pretax. The same logic goes through.

(Also, if stocks are held for a couple decades, then the cumulative tax drag in a taxable account is likely to be at least 15%: most of the nominal value by that point is likely to be (nominal) capital gains, and there is also tax drag from dividends.)

NiceUnparticularMan
Posts: 1740
Joined: Sat Mar 11, 2017 7:51 am

Re: Are we all forgetting our taxable accounts?

Post by NiceUnparticularMan » Sun May 07, 2017 6:08 am

MnD wrote:in contrast, savings made to a taxable account very early in ones work life when typically in lower brackets has little cost in terms of foregone tax benefit. And the tax rate coming out of taxable assuming LTCG is likely going to be some fraction of 15%, depending on the cost basis of shares.
Note if you use a Roth early then your tax rate at the time is immaterial.

MnD
Posts: 3567
Joined: Mon Jan 14, 2008 12:41 pm

Re: Are we all forgetting our taxable accounts?

Post by MnD » Sun May 07, 2017 3:10 pm

NiceUnparticularMan wrote:Note if you use a Roth early then your tax rate at the time is immaterial.
Annual Roth IRA space is very limited and requires a two-step process to fund if over the income limit. You can only withdraw principal from your Roth IRA. Roth 401-K space (if you even have access to such as account) is more generous but is harder to extract. From a bracket perspective Roth anything has never made sense for us. Putting away a high 5-figure taxable account 1986-1990 100% in equity and spending a few hundred thousand from it along the way, while also serving as our emergency fund has been a huge benefit. Funding it in 1986-1990 (2-incomes, no kids) did not hinder us from saving in tax-deferred accounts. After it was funded (1991-date) it was/is hugely beneficial in protecting our ability to always fully fund retirement accounts. Today in real terms it is the same size as in 1990 and will continue to serve us late-career and throughout retirement. Cutting back on tax-preferenced savings when at peak earnings and peak tax bracket later when funds are needed is a costly proposition and the annually available tax-preferenced space cannot be recovered. No complex parlor games are required to access taxable account funds when and if needed or desired in whatever amount and the tax treatment of gains is very favorable, especially for those in higher tax brackets.

I do agree with the OP that equity-heavy taxable investing accounts are overlooked. Most people I know use all-cash emergency funds, debt and even withdrawal and spending of funds from retirement accounts when the road gets rocky pre-retirement or simply when additional spending is desired. The amount of "retirement" savings that are spent prior to retirement is staggering and given that the median household retirement savings stands at essentially zero (http://www.epi.org/publication/retirement-in-america/) I don't think socking away some funds in taxable early in the game is some grave miscarriage of financial planning. After 31 years of savings, 90% of our investment net worth is in retirement accounts of various types - but the taxable account money tree has been a nice addition to the landscape.

NiceUnparticularMan
Posts: 1740
Joined: Sat Mar 11, 2017 7:51 am

Re: Are we all forgetting our taxable accounts?

Post by NiceUnparticularMan » Sun May 07, 2017 3:41 pm

MnD wrote:
NiceUnparticularMan wrote:Note if you use a Roth early then your tax rate at the time is immaterial.
Annual Roth IRA space is very limited and requires a two-step process to fund if over the income limit.
Right, but we were talking about someone early in their career with a (by hypothesis) lower income bracket.
You can only withdraw principal from your Roth IRA.
You can also transfer in traditional funds, then withdraw those too in 5 years. That's quite handy if you go into early retirement.

mortfree
Posts: 1127
Joined: Mon Sep 12, 2016 7:06 pm

Re: Are we all forgetting our taxable accounts?

Post by mortfree » Sun May 07, 2017 4:32 pm

Not here... I just opened my 2nd taxable investing account on Friday... with Vanguard this time.

Getting ready to load up on VTI (yes, the evil ETF) - figuring 20 shares every 2-3 months is a decent amount/frequency to buy... then when the market crashes I can watch it all go down the drain... and keep buying.

hoping the combination of taxable investments, roth investments, and 401k investments will be good for me in the future.

MnD
Posts: 3567
Joined: Mon Jan 14, 2008 12:41 pm

Re: Are we all forgetting our taxable accounts?

Post by MnD » Sun May 07, 2017 5:06 pm

mortfree wrote:hoping the combination of taxable investments, roth investments, and 401k investments will be good for me in the future.
That's what my daughter does - funds all 3.
We were in high brackets by the time the Roth IRA was legislated and Roth 401K access lagged even further, so we are all traditional and taxable.
Conversions would all be at high bracket cost now and 25% even after early retirement due to a pension.
Oh well - we have lived well to date thanks in part to taxable and have plenty for later.

acanthurus
Posts: 367
Joined: Sun Aug 04, 2013 8:02 am

Re: Are we all forgetting our taxable accounts?

Post by acanthurus » Sun May 07, 2017 5:28 pm

Removed
Last edited by acanthurus on Tue Oct 31, 2017 5:27 pm, edited 1 time in total.

User avatar
shum
Posts: 75
Joined: Mon Dec 30, 2013 5:50 pm

Re: Are we all forgetting our taxable accounts?

Post by shum » Sun May 07, 2017 5:57 pm

Right on:
e:acanthurus

You lose lots of such flexibility after 70.5 because RMDs reduce and/or eliminate what you are doing. Even at 75, my RMDs leave me enough space to do 35K of capital gains harvesting to increase our basis and pay no capital gains tax doing so.
-shum

Post Reply