Wanted: A software company to put these rules into a turn-key program we can buy. The software would ask us questions about each of our assets, our age, marital status, etc. It would then list what savings we could get from each set of actions for our specific situation. I am thinking many others would like such software as well to help lower money-leaks to taxes.
Unlikely that those who complain that taxes are too complicated would agree to rollback the specific special cases that benefit themselves. Our complicated tax code is the logical end result of our form of representative democracy, each subgroup (special interest?) lobbies for clauses to be added that benefit them.
This is great stuff. I was able to follow it because I had watched some of your previous related videos. If this was all new to me, then the combination of the speed at which you talk and the density of the information would probably have resulted in me becomming lost.
Excellent explanations! I am seriously considering writing a program to optimize all of this. I am in this tax planning stage, and things are indeed quite complex.
Really enjoy the wealth of information presented in these videos. Thank you for taking the time to educate all of us. Have to see them more than once as the speed is a little fast for me but well worth the time investment. Writing now because, maybe we are wrong, but in this video, the chart that first shows around 9:24 seems to have an error. The bottom or last entry in both the Individual Filer and Joint Filer columns seems to have the arrow pointing the wrong way. As it is currently showing, if your income is less than $500,000 for individual and less than $750,000 for joint then you pay the premium to the right.
The entries just above cover the ranges $170,000 to $500,000 and $340,001 to $750000 respectively. So if your income is $400,000 for an individual your income would fall in both of the bottom two buckets. It is between 170K and $500K and it is also less than $500K. You probably have already been made aware of this but just in case. Of course not expecting you to correct but people do pay attention and having an error like this lessens our confidence in the accuracy of the presentations. Thank you!
Thank you for sharing your knowledge! Great video. Easy to understand and contains lots of useful information! I will be retiring in a few years so the timing of the video is perfect for me.
Good content. Having diversified savings between IRA, Roth and brokerage accounts provides more flexibility and ability to strategically pull funds from in order to minimize taxes and IRMAA surcharges.
As a 56yo with good math and finance skills, I say this will give me nightmares. As I age I see obvious deterioration of my mental capacity and I forsee an additional tax torpeedo which will be the $s needed on services to guide me through this haunted house the IRS has built in honor of retirees.
Can you share some of the interactive graphs and charts you used in the presentation. It would be interesting to hover over different income levels to see all the different taxes and how that apply.
Would love to but not exactly sure how we can, at least in interactive form. We are actually looking into creating some different resources for the community available for either download or purchase. More to come on this in the future!
looking at taxing capital gains- Don't we just pay 15% on the money that isn't cost basis money? So if we took 30K out with 80% cost basis, don't we pay 15% of 6K?
The best way to look at it, if you live in the USA above the poverty line, is that ALl your SS income is regular taxable income and if you get 15% of to be un taxed, consider yourself lucky. Period.
Can you clarify: at time-stamp 11:40 on the graph, you say "at around $66k this person will cross into the first IRMAA zone and will have to pay have a 965/yr. However, the chart at time 10:10 shows different crossover points???
Thanks for including American opportunity act and ETIC credits. That’s exactly where I’m at. Don’t for get about retirement savers credit. MFJ 2000 credit also....Retired early due to workers comp injury, which is tax free income. Have Two children’ in college. If you look at FAFSA we will qualify for 2 pell grants which are worth around 6400 each child because our income MFJ will be around 26,000 for the year. I’m trying to be the master of opportunity when it comes to my work injury. Poor on paper, no debt.=$$
Considered including the savers credit but ended up leaving it off. I suppose with including the ETIC, I should have also added in savers credit. Always trying to find a balance of content vs. length of video!
Thanks. Keep the videos coming. Would love some content on early retirement with kids in college. There is tremendous opportunity and the FAFSA is changing in the next year. Juggling pell grants, using Roth withdrawals to keep under the ACA, retirement savers credit, opportunity act. Would believe you can pay no taxes for the year and get money back. Pell grants 2 kids 13,000 Amer. Opportunity. 5,000 (2 kids) Retired sav. Credit 2,000 Paying no taxes getting 20,000 back! Keep income low, look poor on paper. You don’t need to show retirement accounts and your primary home when it comes to FAFSA. Kids can go to colleges for next to nothing with low income. I’ve gone down this rabbit hole and it has been well worth it.
Since there's a benefit to rolling over assets from qualified but taxable retirement accounts to Roth type accounts, and doing that before the tax sunset of 2025, wouldn't it make sense to simply accumulate some after-tax money in a bank account (ie. save your money) and then when retiring (before 2025), simply use your after tax savings to both live off of and pay the taxes on a massive roll-over to the Roth? But only do that maneuver for one year. That way your only taxable "income" will be whatever you roll over rather than the sum of a high income plus a high roll-over amount. Presumably at a lower tax bracket than would otherwise be the case. After you rebalanced your qualified retirement account with your Roth, then go back to work the next year and retire when you want to (with SS) knowing most of your money is now in a Roth. The little you accumulate thereafter in some work 401K prior to retirement would likely not produce a high RMD, since the qualified account was already zeroed out.
I have a question on IRMAA cliff mentioned around 12:15 of video. Looks like cliff kicks in at $66k, but chart with surcharge starts at $91k for individual. What trips the IRMAA cliff for someone with $66k income?
Setting income thresholds and "forgetting" about inflation adjustment is the definition of criminal can-kicking at the highest level of government. Classic Obama legislation.
I think it is a little misleading to say that a tax placed on SS is really a higher tax on other income sources. The additional IRMAA “fee“ is more genuine as it really is a higher tax and not untaxed income that then becomes subject to tax.
Wanted: A software company to put these rules into a turn-key program we can buy. The software would ask us questions about each of our assets, our age, marital status, etc. It would then list what savings we could get from each set of actions for our specific situation. I am thinking many others would like such software as well to help lower money-leaks to taxes.
Agree!
Irs would buy it and find the leaks lol
excellent idea
I am disappointed in our government. So many taxes for those who worked all their lives. This is so complicated average citizens have no idea.
We agree wholeheartedly. Can't imagine the productivity and time cost to the US economy just spend in trying to navigate this convoluted system
Unlikely that those who complain that taxes are too complicated would agree to rollback the specific special cases that benefit themselves. Our complicated tax code is the logical end result of our form of representative democracy, each subgroup (special interest?) lobbies for clauses to be added that benefit them.
This is great stuff. I was able to follow it because I had watched some of your previous related videos. If this was all new to me, then the combination of the speed at which you talk and the density of the information would probably have resulted in me becomming lost.
Thank you, appreciate the feedback!
Excellent explanations! I am seriously considering writing a program to optimize all of this.
I am in this tax planning stage, and things are indeed quite complex.
Always the best from the best. Thanks, Eric!
FYI - Starting in 2022, Colorado no longer taxes Social Security payments.
Ah, thank you for the correction!
Really enjoy the wealth of information presented in these videos. Thank you for taking the time to educate all of us. Have to see them more than once as the speed is a little fast for me but well worth the time investment.
Writing now because, maybe we are wrong, but in this video, the chart that first shows around 9:24 seems to have an error. The bottom or last entry in both the Individual Filer and Joint Filer columns seems to have the arrow pointing the wrong way. As it is currently showing, if your income is less than $500,000 for individual and less than $750,000 for joint then you pay the premium to the right.
The entries just above cover the ranges $170,000 to $500,000 and $340,001 to $750000 respectively. So if your income is $400,000 for an individual your income would fall in both of the bottom two buckets. It is between 170K and $500K and it is also less than $500K.
You probably have already been made aware of this but just in case. Of course not expecting you to correct but people do pay attention and having an error like this lessens our confidence in the accuracy of the presentations. Thank you!
Thank you for sharing your knowledge! Great video. Easy to understand and contains lots of useful information! I will be retiring in a few years so the timing of the video is perfect for me.
Glad it was helpful! Thank you for watching!
Good content. Having diversified savings between IRA, Roth and brokerage accounts provides more flexibility and ability to strategically pull funds from in order to minimize taxes and IRMAA surcharges.
Awesome video!!!!! THANK YOU! No Widow's Tax Trap?
Thanks Slim! Considered it but then 10 tax hikes was just too round of a number... 😉
As a 56yo with good math and finance skills, I say this will give me nightmares. As I age I see obvious deterioration of my mental capacity and I forsee an additional tax torpeedo which will be the $s needed on services to guide me through this haunted house the IRS has built in honor of retirees.
Can you share some of the interactive graphs and charts you used in the presentation. It would be interesting to hover over different income levels to see all the different taxes and how that apply.
Would love to but not exactly sure how we can, at least in interactive form. We are actually looking into creating some different resources for the community available for either download or purchase. More to come on this in the future!
@@SafeguardWealthManagement Thanks download would be great but purchase not so good.
Thank you for all the info you share.
Our pleasure Bill!
What software are you using in your demonstration? It looks really interesting.
Where can we use an tool like this? Great video.
looking at taxing capital gains- Don't we just pay 15% on the money that isn't cost basis money? So if we took 30K out with 80% cost basis, don't we pay 15% of 6K?
The best way to look at it, if you live in the USA above the poverty line, is that ALl your SS income is regular taxable income and if you get 15% of to be un taxed, consider yourself lucky. Period.
Can you clarify: at time-stamp 11:40 on the graph, you say "at around $66k this person will cross into the first IRMAA zone and will have to pay have a 965/yr. However, the chart at time 10:10 shows different crossover points???
I didn’t understand the Roth conversion one.I thought we were supposed to do that. 🤷♀️ 😭
Thanks for including American opportunity act and ETIC credits. That’s exactly where I’m at. Don’t for get about retirement savers credit. MFJ 2000 credit also....Retired early due to workers comp injury, which is tax free income. Have Two children’ in college. If you look at FAFSA we will qualify for 2 pell grants which are worth around 6400 each child because our income MFJ will be around 26,000 for the year. I’m trying to be the master of opportunity when it comes to my work injury. Poor on paper, no debt.=$$
Considered including the savers credit but ended up leaving it off. I suppose with including the ETIC, I should have also added in savers credit. Always trying to find a balance of content vs. length of video!
Thanks. Keep the videos coming. Would love some content on early retirement with kids in college. There is tremendous opportunity and the FAFSA is changing in the next year. Juggling pell grants, using Roth withdrawals to keep under the ACA, retirement savers credit, opportunity act. Would believe you can pay no taxes for the year and get money back.
Pell grants 2 kids 13,000
Amer. Opportunity. 5,000 (2 kids)
Retired sav. Credit 2,000
Paying no taxes getting 20,000 back!
Keep income low, look poor on paper. You don’t need to show retirement accounts and your primary home when it comes to FAFSA. Kids can go to colleges for next to nothing with low income.
I’ve gone down this rabbit hole and it has been well worth it.
Since there's a benefit to rolling over assets from qualified but taxable retirement accounts to Roth type accounts, and doing that before the tax sunset of 2025, wouldn't it make sense to simply accumulate some after-tax money in a bank account (ie. save your money) and then when retiring (before 2025), simply use your after tax savings to both live off of and pay the taxes on a massive roll-over to the Roth? But only do that maneuver for one year. That way your only taxable "income" will be whatever you roll over rather than the sum of a high income plus a high roll-over amount. Presumably at a lower tax bracket than would otherwise be the case. After you rebalanced your qualified retirement account with your Roth, then go back to work the next year and retire when you want to (with SS) knowing most of your money is now in a Roth. The little you accumulate thereafter in some work 401K prior to retirement would likely not produce a high RMD, since the qualified account was already zeroed out.
Why would you say double ? It’s not double it’s more like it spills into another zone .?
I have a question on IRMAA cliff mentioned around 12:15 of video. Looks like cliff kicks in at $66k, but chart with surcharge starts at $91k for individual. What trips the IRMAA cliff for someone with $66k income?
It was due to the income I had uploaded 'behind the scenes'. I had a Social Security benefit uploaded in the background. Sorry for the confusion!
What if you file as Head of Household?
What's the interactive tax graph site you're using? Thanks.
Almost seems like retirement is not worth it.
You keep on saying double taxation, income tax is one, what is the other one? This is not the right way to label it. Sorry.
Setting income thresholds and "forgetting" about inflation adjustment is the definition of criminal can-kicking at the highest level of government. Classic Obama legislation.
I think it is a little misleading to say that a tax placed on SS is really a higher tax on other income sources.
The additional IRMAA “fee“ is more genuine as it really is a higher tax and not untaxed income that then becomes subject to tax.