This is an important topic. I have run the numbers using the American Academy of Actuaries 2012 IAM Basic Table for the joint mortality of a couple who are both 62 years old. The average length of time that the surviving spouse outlives the first spouse to die is 10 years.
Kevin, you do something that is really smart and that separates your brand from others who offer retirement advice. You have a defined "elevator speech" and it is excellent!!. Short, easy to understand and memorabe: "This channel is dedicated to help one million people retire without worry." That precisely captures what your target audience wants to know. I know Phil and Clare are proud of you. 🙂 Thsnk you for what you do!
Doesn’t account for the taxes paid on Roth conversions and lost investment returns from the amount paid in taxes on the conversions. It’s not a complete offset by any means, but something that needs to be factored in.
Ive been single since 1996 and haven had any deduction since 2010...im well prepared for this and its common sense that people should think about as they get older.
Got the sense that whoever wrote the letter was not being very nice ... I appreciate you putting together these educational videos for free and think that if we like to learn more about a certain situation, we should ask nicely. For example, according to a 2022 Pew survey, 30% of the people over age 50 are single. We did not get nasty because most of your examples are for married couples.
You’d be surprised at some of the nasty notes and comments. It always catches me by surprise. I should do more single content though! And thanks for the nice note.
I have looked at Roth conversions several times in the last 5 years. Mostly I am too late as I see it. I retired at 54 and am 74 now with a defined benefit pension. I get social security but with WEP it's pretty trivial. The only way I see is to use withdrawals from my IRA but I would have to make excess withdrawals over my RMD to backdoor into a Roth. I also have a beneficiary IRA that I am on a 10 year distribution plan. I was hoping to convert it was told that I cannot. Gross income 133k and with RMDs 164k, not including my wife's income.
Whilst I don't disagree that there is a widows penalty some planners say spend half your money by age 75. After this age most people spend their time closer to home and spend less.
I plan to retire or reduce my work hours in five years, and I'm interested in how others allocate their income between savings, spending, and investments. I currently earn about $175K annually but haven't built up much in savings so far
There are numerous strategies to achieve high yields during a financial crisis, but it is crucial to undertake such trades with the guidance and supervision of a professional financial advisor to ensure informed decision-making and risk management
The other reason to delay one check to 70, is that you can spend down the IRA and have potentially smaller RMDs! A win win, that requires no extra tax payments and increases the income that is taxed less, since the max of SS that is taxed is 85%. There are very few scenarios where a couple should not try for one large check.
@BlueSkiesDay If you are single your point makes some sense, if married none. Your spouse will get your PIA at age 67 as a survivor check. If you took early, she will get your small check for the rest of her life. Banking on dying early makes a lot of sense? Only if you are clearly unhealthy.
In my opinion the math doesn't make sense. You have them converting all $1.5M to get to zero RMD. That means converting $150,000/year for years 62-71 or ten years, paying an extra $9,800/year for the first five years, then taking SS, the next five years cost an extra $26,900/year. Total extra tax paid to convert is $183,000. All that to avoid paying $20,000/year at 80. Got to live to 90 for the math to work, and that's not considering the growth on the $183,000.
Do you have a website or a phone number where you could be reached at.? I feel that me and my spouse are in a fairly different situation, but this conversion is probably the route that we should be going.
Did you consider the widow's penalty? (Quick Note: I had to re-release this video to fix an error -- if you feel like you're having Déjà vu.)
This is an important topic. I have run the numbers using the American Academy of Actuaries 2012 IAM Basic Table for the joint mortality of a couple who are both 62 years old. The average length of time that the surviving spouse outlives the first spouse to die is 10 years.
Kevin, you do something that is really smart and that separates your brand from others who offer retirement advice. You have a defined "elevator speech" and it is excellent!!. Short, easy to understand and memorabe: "This channel is dedicated to help one million people retire without worry." That precisely captures what your target audience wants to know. I know Phil and Clare are proud of you. 🙂 Thsnk you for what you do!
Haha. Thanks so much!
Doesn’t account for the taxes paid on Roth conversions and lost investment returns from the amount paid in taxes on the conversions.
It’s not a complete offset by any means, but something that needs to be factored in.
Of course. But it’s something that should be calculated.
I am doing QCD's when the time comes, yet I still have financial planners trying to get me to convert to a Roth.
Ive been single since 1996 and haven had any deduction since 2010...im well prepared for this and its common sense that people should think about as they get older.
Got the sense that whoever wrote the letter was not being very nice ... I appreciate you putting together these educational videos for free and think that if we like to learn more about a certain situation, we should ask nicely. For example, according to a 2022 Pew survey, 30% of the people over age 50 are single. We did not get nasty because most of your examples are for married couples.
You’d be surprised at some of the nasty notes and comments. It always catches me by surprise. I should do more single content though! And thanks for the nice note.
I'm so sorry you receive the negative feedback. I think your content is very valuable. Thank you.
So sorry about the negative and hate comments
How much did they have to pay in taxes to fed and state when they did the Roth conversion?
This is a very helpful tip! Thanks!
Can you do a Roth conversion if you only have SS and pension, without earned income from employment.
I have looked at Roth conversions several times in the last 5 years. Mostly I am too late as I see it. I retired at 54 and am 74 now with a defined benefit pension. I get social security but with WEP it's pretty trivial. The only way I see is to use withdrawals from my IRA but I would have to make excess withdrawals over my RMD to backdoor into a Roth. I also have a beneficiary IRA that I am on a 10 year distribution plan. I was hoping to convert it was told that I cannot. Gross income 133k and with RMDs 164k, not including my wife's income.
Whilst I don't disagree that there is a widows penalty some planners say spend half your money by age 75. After this age most people spend their time closer to home and spend less.
Thanks! Could you confirm if spouse passed away, survival spouse could use married filing jointly for total three years on filing taxes?
I plan to retire or reduce my work hours in five years, and I'm interested in how others allocate their income between savings, spending, and investments. I currently earn about $175K annually but haven't built up much in savings so far
There are numerous strategies to achieve high yields during a financial crisis, but it is crucial to undertake such trades with the guidance and supervision of a professional financial advisor to ensure informed decision-making and risk management
That's quite impressive! Can you share more information about your financial advisor?
The other reason to delay one check to 70, is that you can spend down the IRA and have potentially smaller RMDs! A win win, that requires no extra tax payments and increases the income that is taxed less, since the max of SS that is taxed is 85%.
There are very few scenarios where a couple should not try for one large check.
@BlueSkiesDay If you are single your point makes some sense, if married none. Your spouse will get your PIA at age 67 as a survivor check. If you took early, she will get your small check for the rest of her life.
Banking on dying early makes a lot of sense? Only if you are clearly unhealthy.
@BlueSkiesDay If both spouses have earnings records, then one early and one later, is usually a hedge, and just smarter.
In my opinion the math doesn't make sense. You have them converting all $1.5M to get to zero RMD. That means converting $150,000/year for years 62-71 or ten years, paying an extra $9,800/year for the first five years, then taking SS, the next five years cost an extra $26,900/year. Total extra tax paid to convert is $183,000. All that to avoid paying $20,000/year at 80. Got to live to 90 for the math to work, and that's not considering the growth on the $183,000.
Watch my video on Roth conversions to get a fuller picture. This is just one small sliver.
Do you have a website or a phone number where you could be reached at.? I feel that me and my spouse are in a fairly different situation, but this conversion is probably the route that we should be going.
You can make an appointment on our firm website: foundryfinancial.org
I am lol