It is pretty easy to model these types of scenarios with either the RPM or Pralana calculators. We prefer Pralana for this but would suggest people run both to make sure. There is no way to reasonably assess your situation now as you do not have specific enough goals to optimize. These are a few of goals which need to be clear to input for any modeling and review:OP here.
I will try to answer some of the questions asked.
We do QCDs to the extent that we are charitably inclined. ALL donations come from IRAs. Our approach to charity is that it is the donors responsibility to determine ONE charity that is most deserving of OUR money, and only donate to that charity.
I acknowledge that there are many deserving charities, but nobody has enough money to support all of them, and every different one that you donate to will forever after have you on their mailing list.
We have no children or other close relatives. We will pay for my wife's three godchildren, including graduate degrees, in any colleges they can get into, but not for something that will not lead to a job that cannot support a family (a relative has a degree in Medieval Art History. This is a fine degree if your family owns museums, but not for someone that needs to earn a living).
My state does not (currently) tax retirement income such as SS, pension, IRA withdrawals (including Roth conversions) or annuities. So they only get to tax my taxable interest and dividends, and the earnings from my wife's company.
The $2M that we are leaving in tax deferred should cover any deductible medical or LTC needs.
On the second person's death, the remainder in tax deferred accounts will go to charity. Roth and taxable is something that we are still trying to figure out.
One of the reasons that we are contemplating a one time large hit is to take the IRMAA hit for one year only, then drop back to second tier IRMAA. We may not be able to reduce to second tier IRMAA, but certainly no higher than third tier.
Were there any more questions?
- amounts to charity (if any)
- amounts to heirs (if any)
- spending level (for draw and to calculate taxes)
- if your state has estate or inheritance taxes
FWIW in general:
- charitable early and larger will less likely favor converting
- drawing larger %'s to spend early will less likely favor conversions
- drawing less % and heirs will more likely favor conversions
- if your draw is low and you are aiming for heirs the IRMMA level is not nearly the only component at work
Conversions which are smaller and cover portions (fractions) of the current tax-deferred accounts over longer periods of time are typically preferred but very dependent upon your goals above.
Statistics: Posted by smitcat — Mon Dec 16, 2024 9:06 am — Replies 32 — Views 2564