Based on the numbers I am looking at, Tax Rate of 24% vs 37% this is a no brainer.I'll be surprised if you don't change your plan somewhat as you learn more and run the numbers. Sure, the IRAs can't go in the trust, but they can still be inherited. And depending on the type of trust, you'll be losing the step up in basis on those taxable assets at your death.
1) I have decided to 1 year worth of Withdrawls in cash and spend that down. I will replenish it annually via AA rebalancing.
2) Still leaning to using SEPP to avoid RMD's that will be huge as well as be under the 37% tax bracket. It is a good problem to have but prefer to address it while I have time.
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3) Thanks for the recommendation. I will definitely read "Retire Secure" by James Lange. It looks like he has a free series on Aubible. I also just bought his book on Kindle. You just hit the nail on the head. I plan to leave the Taxable untouched and let it grow and either donate via DAF or it will stay in the Trust for later distributions. IRA's can't go in the Trust so using the SEPP to fund Retirement. However, this may change depending on what I learn from "Retire Secure".
People use SEPP when all or nearly all their money is in IRAs, not as some sort of RMD management technique. If it was all in a Roth IRA would you raid it first?
If I do SEPP now, I will pay 24% for up to $383,900 (I plan on $319k). If I wait, I will be paying 37% assuming I live that long. So given the choice, I will spend down IRA first.
I know that is the reverse of traditional thinking, but based on the #'s, I will have ~$28m in IRA when RMD's kickin'. If that is passed on to a non-spouse, they will have 10 years to take full dispersion. On a Brokerage Account, they will get the step-up, plus no requirement for a withdrawal.
Still reading but haven't come across anything that changes my mind. This may contrary to the norm of leaving tax deferred savings until last, but this is unique because the my Tax rate @ 72 (37% tax rate) will be higher than my Tax rate @ 50 (24% tax rate). Thus I should withdraw now while I am 50.
Statistics: Posted by roguewarrior0 — Tue Oct 15, 2024 10:01 pm — Replies 46 — Views 4118