I’m 60 with $5 Million Saved for Retirement - How to avoid a $13 Million Tax Nightmare
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- Опубликовано: 8 сен 2024
- If you’re approaching retirement and have a high net worth, you could also have a staggering potential tax bill if conventional wisdom is followed.
We’re going to break down the intricate strategies and solutions that can help you save millions in taxes, ensuring your hard-earned wealth remains in your family's hands. From optimizing your distribution strategy to understanding the nuances of Roth conversions, we provide valuable insights to safeguard your financial future.
Don't let taxes erode your savings-empower yourself with the knowledge and strategies to secure your financial future.
🏃🏻 Jump right in:
00:53 Significant Tax Challenges You Should Know About
01:16 The Base Parameters of this Scenario
01:59 The First and Second Steps When Planning for Retirement
03:38 The First $6 Million in Taxes Due: Income Taxes
05:59 Questions to Work Through to Estimate Potential Costs
08:37 How The Composition of Your Accounts Can Create More Tax Problems
12:09 The Next $4 Million in Taxes Due: Estate Taxes
13:41 Another $3.6 Million in Taxes Due: The Secure Act 2.0 on Inherited IRAs within 10 Years of the Original Owner’s Death
15:20 A Few Key Strategies to Avoid Owing $13.6 Million in Taxes
20:26 Final Numbers on How Much You Can Potentially Save in Taxes, and Leave to Children With These Strategies
Livestream mentioned: ruclips.net/user/li...
#taxplanning #retirementstrategies #rothconversions
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Disclaimer:
This video discusses fixed-income investing and utilizes the 10-year U.S. treasury as a general representative fixed-income investment. Conclusions reached, opinions stated, and downside risks and potential returns presented should not be construed as applying to other types of bonds or fixed-income assets. Other types of fixed-income products carry different levels of risk and return potential and should be evaluated as an element of a diversified portfolio with your specific risk tolerance, investment objectives, and timeline in mind. Nothing in this video is investment advice, an investment recommendation, or an offer to buy or sell any security. Investing involves risk.
Inflation is not taken into account here. Your 120k will have to be at least 200k in 10 years. All financial planners assume tax rates will be higher, maybe they will, maybe they won't. And the emphasis is always on tax avoidance rather than actual growth of your retirement accounts.
Good video. Can you really make a meaningful dent in $4m? If it’s growing at 10% a year, even converting $400k per year which puts you firmly into the 35% bracket plus state tax and IRMAA does not even start to reduce the principal balance. If instead you just let it double to $8m, RMD in year one will be less than $400k and you will be paying the tax on that with future dollars adjusted for inflation. If you move to Florida in retirement you save state tax as well. Yes, RMDs will increase but so will the standard deduction and tax brackets. With this large an account you are likely never going to fully pay tax on the entire balance and if your heirs are in a lower bracket, that is a benefit as well.
I do see a benefit if you might be close to the estate tax limit as paying the tax while alive reduces the size of the estate while not reducing the after tax value being inherited. I also appreciate the benefit of converting as it relates to the widow trap. Otherwise I don’t see a benefit taking into consideration the time value of money, inflation adjustment to the tax brackets and ability to pay tax slowly over many years. Remember one goal is to ensure you have enough money to last as long as you live. When you are 85 years old vs 65 years old there is less time left which means less chance of failure so paying more tax at that point is not impacting the outcome as it could be paying in at 65 and then having a major downturn and investment losses.
Your videos are mind boggling!!! Thanks!
We are relocating from CO to PA to be near our kids & grandkids. I need to find a good financial firm near Altoona - so looking for recommendations.
Lol, thanks Steve! We're glad you enjoy them! And congrats on your move to be closer to family - we hope you enjoy it! We utilize technology so we can work with people all over the country - if you're interested, we'd love to help. You can set up a complimentary appointment with Frank here, and he'll get you hooked up with the right financial advisor on our team for your situation. They'll go through where you're at, what your goals are, offer some solutions, and you can decide if you'd like to hire us. Looking forward to hearing from you! click2retire.com/60-with-5-million
It would be nice to see a video with these amounts and trying to maximize withdrawal strategy. My wife and I have no children, and while we do have nieces and nephews we prefer to spend all our money as much as we can and then let them have the physical assets (properties and the like) that they can work to sell. I have zero intention of having 18 million and then having all the taxes paid up front for those children :) With 5 million saved you could easily withdraw 200,000 per year using the 4% rule and more than that when SS and pensions kick in. So I'm not understanding why the video has a 120,000 per year with a 50k add on for just 10 years.
Great comment! We appreciate the feedback and can add your idea to our future topic list. If anything, your comment helps to illustrate that a retirees’ goals often vary widely. Like yourself, some retirees want the ‘last check thy write to bounce’ as they plan to spend everything they have saved. For while others, leaving a legacy is their preference. For the latter, estate and tax concerns can become considerations. Feel free to call our office to see if you may be missing considerations in you and your wife’s retirement plan. Again, thanks for the comment and for watching our channel.
New Hampshire and Washington state also no income tax
Thanks for sharing!!
The truth is you need to master understanding material items you thought you needed, you absolutely do not need before retirement. You can be target up to 6000 times a day for ads. Cancel them all out slowly and you will be healthier and happier.
Hey there Drew, thanks for watching and sharing your perspective!
What is your fee structure?