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Should Suzanne in Michigan do Roth conversions in 2025 and 2026 since she’s widowed and won’t be married filing jointly? How should she pay the tax on her conversions? Jennifer in Washington state is 55 and her husband is 70. Should she retire now and do aggressive Roth conversions before her husband passes? We’re talking about the widow’s tax, today on Your Money, Your Wealth® podcast number 501. Plus, answers to questions from our YouTube viewers: what’s a brokerage account? What’s a good way to pay RMD taxes? How does the 10 year rule work on inherited IRAs? What are extended market index funds? The fellas also spitball on the 4% rule for retirement withdrawals.
Joe and Big Al discuss LIRPs, or life insurance retirement plans, they spitball whether to take full pension survivor benefits or buy a life insurance policy, and whether to sell losing stocks for even bigger losers to take advantage of the 0% capital gains tax bracket. Plus, zero coupon municipal bonds and the de minimis rule, and target date funds as part of Paul Merriman’s Two Funds for Life strategy. Finally, how do dividends figure into the 4% rule for retirement withdrawals, and should that 4% come from stocks or bonds?
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How do you determine how much you need in retirement when you factor in taxes, and how does the 4% rule apply? Has one YMYW listener spitballed retirement well enough to convince his wife that they can afford a new luxury truck? Can another YMYW listener take advantage of what seems to be a big opportunity to sell company stock, pay no capital gains tax, and do Roth conversions? Can Big Al’s high school friend do a 1031 exchange to buy a rental property, make it his primary residence in 5 or 10 years, and pay no tax when selling? Is earned income from stock trading still taxable for Social Security if your LLC is in a trust? Finally, a compliment comes in, and Joe and Big Al assume it’s for them.
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