How to calculate your modified adjusted gross income (MAGI) for Medicare IRMAA, calculating your Social Security benefit when you’re planning to FIRE (that is, reach Financial Independence and Retire Early), calculating family Social Security benefits when you have minor children, and devising a strategy to qualify for the Obamacare Affordable...
Asset allocation is the delicate balance of stocks, bonds, and other assets in an investment portfolio. What allocation is best for your retirement needs? What’s a good mix of domestic and international stocks? Is it crazy to have a 90/10 allocation of equities to fixed income in a $10 million...
Buying and selling real estate, whether investment property or your primary residence: how do you estimate net investment income tax when selling your house? Is the all-in-one mortgage a temporary solution when buying a new home before selling your current home? How do prop 13 and prop 19 factor into...
Questions answered on retiring overseas and foreign earned income exclusion eligibility, using your tax refund thanks to the foreign earned income exclusion for a back door Roth conversion, and working abroad and contributing to a health savings account (HSA). Plus, should you contribute to Roth accounts, pre-tax accounts, or a brokerage account when nearing early retirement? Are substantially equal periodic payments (SEPP) from your retirement savings a good idea to bridge the gap between retiring early and age 59 and a half? And finally, is it ever a good time to time the market?
Joe and Big Al outline the House Ways and Means Committee’s sweeping tax proposal that would impact Roth contributions, Roth conversions, RMDs, the backdoor Roth IRA and mega backdoor Roth (Megatron), marginal and capital gains tax rates, wash sale rules, and more. Plus, they answer your questions on safe retirement income and withdrawal strategies, current wash sale rules, when NOT to do a Roth IRA conversion, and solo 401(k) retirement savings for self-employed small business owners.
How do you calculate Roth conversions to reduce taxes when you reach required minimum distribution age? What are the rules for RMDs from a Roth 401(k)? How does the 5 year Roth clock factor into a decision to leave money in an old Roth 401(k) or roll it to a new Roth IRA? Do reinvested dividends count as Roth contributions? Do capital gains count towards the capital gains income bracket? Plus, IRA contributions for minors and the unemployed. Finally, how would Joe, Big Al, and Andi spend lottery winnings?
You’ve had enough of the 9 to 5 and are ready to punch early. Are you financially prepared for a long and early retirement? Joe and Big Al provide a spitball analysis. And of course, the ever-popular Roth IRA conversions: how much to convert to Roth, when and how to pay the tax on a Roth conversion, and why not pay Roth conversion taxes out of the retirement account you’re converting from?
Asset location: how to position assets to pay less tax without sacrificing investment growth? Should young folks contribute all of their retirement savings to Roth accounts? Also, conversations (not advice) on a self-employed defined benefit plan vs. pass-through profits, gifting tuition for education, making Roth conversions with a special needs child in mind, a correction on inherited Roth IRAs, and plenty of entertaining listener comments and Derails.
Joe and Big Al answer several versions of what is probably the most common question we get here on YMYW: should we convert money from tax-deferred retirement accounts to Roth, with tax-free growth on our investments for life? Should we do Roth conversions before we get married? Should we do a 403(b) to Roth conversion? When and how much should we convert to Roth if we want to keep our ACA subsidy? Should we do Roth conversions with more aggressive funds first? If we use our cash to pay the tax on Roth conversions, will we run out of money for our early retirement? And to cap it off, something completely different: can you sell without selling your house? What do the fellas think of Ric Edelman’s answer to the question, “should you pay off your mortgage?”
If your portfolio is overweighted in one or two individual stocks, here are some ways to diversify those concentrated stock positions. Is using a donor-advised fund a good choice? Plus, how does the IRS know if a required minimum distribution is a qualified charitable distribution? From which pool of money should you pull extra retirement income? Also, structured notes, and paying Grandma for daycare without impacting taxes on her pension – lump sum or monthly payments? Finally, the fellas provide their thoughts on starting a career in financial planning.
Is it better to pay tax on $5 million than on $1 million, or is that crazy talk? Also, an asset location strategy to lower RMDs and taxes but still maintain portfolio growth, and an argument against Roth IRAs. Is it a valid one? Plus, what counts as contributions if you withdraw from your Roth IRA after 5 years? Why not pay the tax on a Roth conversion out of your IRA? Roth conversions vs. the medical insurance ACA subsidy, and what? Joe, arrogant?!
Which states are best for retirement taxes? When moving to a state with a lower cost of living, is it wise to take on mortgage debt to invest in the market? Does it make a difference if you do a Roth conversion before or after moving to another state? Plus, is it better to do Roth conversions with ETFs or mutual funds? Is zero percent long-term capital gains “a hoax”? Also, ABLE accounts for those with disabilities, and healthcare costs vs. taxes as they relate to medical debt, health savings accounts (HSA), and high deductible health plans (HDHP).