Another outstanding video...thanks Erin! Basically, to lower the tax burden with taxable retirement income (Social Security, Traditional Retirement Accounts, Pensions, etc), it's almost definitively best to do careful Roth conversions starting in the year after retiring (since no taxable income from employment anymore)?

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Great! According to the regular Social Security calculator, my benefits are going to go up a whopping $49/mo vs what it was going to be under the WEP. And I'm sure Congress will come back at a later date and "fix" this so that I'll get even less than what I was going to get under the WEP.

How does tax free investments affect the strategy. Example: you get income from double tax free municipal bond funds?

Agreed about comprehensive financial education. The focus seems to be investing for the sake of investing, which is only one part of building wealth. Business Insider posted a YT video a day ago, "Money Lessons From Older Americans Who Learned The Hard Way | Business Insider," which is a sobering take on the lack of comprehensive personal finance education, even for those who invested and saved.

Many folks, even the Congressmem and Senators I contacted, do not seem to realise that those of us who came to USA with foreign employment related pensions, and are entitled to less than 30 years based US SS, are being subjected to WEP deductions on foreign income too. Although in my case my UK Social Security and USA Security are subject to a UK-US Reciprocal Agreement. This allows both entitlements and has its own, (pre-WEP dated) ceiling already built in. Nevertheless my US SS is today subject to WEP. This is because I also have an employment pension earned in UK, from when, strangely enough, I did not pay any US SS contributions! - Was it really the ever the intention of the US Legislation to penalize immigrants who arrive in this country with their own resources for their retirement in this way? - Is this really double dipping? - Did US SS interprete the WEP law correctly for foreign incomes? On reflection I actually think it is very important for WEP & GPO to be repealed now, because of the impending US SS crisis. If it is not repealed, those of us already subjected to WEP & GPO could suffer even more from any subsequent "across the board" flat reductions in entitlement. This is because we would already have been subject to WEP & GPO deductions. The result would have been to compound the injustices here. Now we can at least all head into this crisis on a fairer, more level, playing field..

Thanks for this. I will not make it to full retirement age. I paid into Social Security during my entire / only [mil] career. What does the survivor benefit look like for my spouse? Thanks again. & great tip for SSA account.

HELP! My wife was a teacher for many years. As a survivor will the fairness act increse her benifits I currently receive?

Thank You Erin. As always, great job explaining an extremely complicated topic. My wife and I, both plan to bow out this year. So much to consider. I will be re-watching this. Happy New Year.

Thank you, Erin. I’ve not seen a video like this on KZbin before. Very helpful! I will likely get an accountant to help me with my withdrawal strategy. Two years or less for me!

Hi I have a very different situation where all of my retirement savings are 401. I wonder how I could talk to you. I just retired today and I feel I am okay.

Sometimes you may want to fill the lower marginal tax brackets to draw down the taxable IRA. If you leave too much in there, the RMD's may drive you into a higher tax bracket when you're older.

If you don’t have 10 times your income saved, just get a job that pays much less and recalculate.

Im thinking A person who is spending less than total passive income is disciplined. Does not mean they are not compromising/ Sacrificing to achieve that. Being well off is having the lifestyle you want to have while still being able to set aside savings.

Wow. My employer does something slightly better than normal. I am shocked!

what's new .......take from the people who work and give it to the people who don't want to

I'm 54 years old should I start planning today😮

I'm not retiring until another 12 years but thanks for the information😊

Great explanation.

I won't deny it. I like watching the blooper takes at the end because I would flub things up trying to put together a video like this too.

This is a great video for folks that are trying to stay under Federal Tax level, referencing year 2024. Just for additional data reference point, for folks that have (one or more of the following): RMDs + Dividends + Qualified Dividends + Social Security + Long term cap gains + others (eg side hustles) that results in, for example, > 100k AGI: - Short Term (ST) gains + Long Term (LT) gains ~ AGI, where ST gains are taxed first, then LT are taxed on TOP of that. If you are in this scenario (and most of us probably are), then taking some from ROTH might be appropriate to stay at the minimal federal tax level. - Sorry for being over complicated, but I know this is a FAQ, how gains are taxed if one has a combination of LT + ST + RMDs + others.

A perfect example of how to make a great video with understandable content. This was very useful.

rolling over to 666 comment : )

The only thing I would do differently in the first example would be to take as large a capital gain that they could in the 0% tax bracket as possible and repurchase the stock to up your cost basis for the future.

This really was beneficial, turning 70 this year with a younger wife. Looking for a way to show lower income so we can qualify for subsided health care. Your information is always appreciated, thank you Erin!

My problem with the case studies is the amounts of SS never rings true with the assets. How did this couple end up with $1million in retirement savings yet they only have $1500/month each in SS? That low a monthly benefit means they never made much more than 24K per year in wages. No way they could have saved $1million. Can't these planners use more realistic asset saved/Social Security benefits ratios? As well, anyone under 60 today who had long and decent earning history is going to have $5K-6K SS benefits in the 2030's and beyond just due to inflation so good luck with a spouse SS benefit staying under having full 85% of your SS benefits taxable. Half your combined SS will alone be approaching the 44K limit (this limit was set in 1993 and is not adjusted for inflation) even without any other taxable income.

As everyone else, I want to pay as little tax in retirement as possible, but there's one additional factor I use for withdrawls. I don't always use my brokerage account to reduce my taxes. If my EFFECTIVE tax rate will be lower than what my brokerage is returning, I will pull 100% from my taxable IRA, and continue to let the brokerage grow.

I think a true retirement position is the money left over after subtracting all normal yearly expenses and paid taxes etc. We have earned interest but it is in cds etc that are not touchable until a 5 year maturity. Useable gross income is different from total gross income.

What does "up to" and "could be" mean.? Generally income "is" taxed, period.

1st, when do you withdraw from the Roth? 2nd, ppl with $1M+ saved portfolios generally will make a lot more than $1500 a month each from SS.....max is $4018/ea in 2025.

Take it early if needed. The government plans for you to die early from cancer or heart disease from shit food so they won't have to pay you. Keep your health and make a game day decision.

Don’t let the tax tail wag the dog. Taxes are only one consideration of financial planning. 12:17

What happens if you gift large but not maximum amounts to relatives and they gift it back to you or buy something for you?

Wow your best video of the year!!! More of this type of content, I truly love this one!!

Great information. This is a complex topic but you presented it very well. Thank you!

I think this video points out there are things each of us should consider about our specific situation if we want to reduce taxes in retirement. It is a bit complicated at first but once you work you specific situation it just needs a yearly checkup. Your examples video and its examples are helpful. Thank you, and Happy New Year.

In my retirement years living in CA should the Roth account always be preserved? If I use my Roth toward buying a new house now instead of selling highly appreciated stocks in my taxible accounts I will save/postpone ~30% combined taxes by not selling them. When I die my heirs will get the house value stepped up, just as they would get the Roth tax free. Also, I can do future Roth conversions in years that make sense such as when I have room in lower brackets.

The government finds trillions to send to Ukraine - no problem. They have no concerns about to run out of money in this case. However, they r concerned about running out of money bc of pensions.

My wife and I are both 68. We both retired at 62. Currently both drawing SS, and my wife receives a monthly pension from being a banker for 25 years. The house is owned F/C. It’s not necessary for either of us to draw from our retirement accounts, our monthly income far exceeds our expenses. Life is good.😊

But it seems that if half your working years are paid in and the other half is a pension, it’s not actually double dipping, because you get a reduced amount because of the years you did not pay in. But the fact remains , you did pay in!

Thanks - Retiring this April (2025) - You explained the strategy very accurately.

Love your videos, they really do make it simpler to understand. However, I’d say go with “I suggest monthly withdrawals” to “I prefer monthly withdrawals” at your age😂

Happy new year Erin I have a question about 401 k

Since 80% is near the top end of the article's range why not shoot for that? At worse, you have too much money available for retirement. And that is not a bad problem to have.

Whats your thought of filling up more of the 12% tax bracket from your taxable 401Ks instead of staying at $0 taxes for the current year? This strategy will help for long term lower taxes especially if a spouse dies and you get thrown out of MFJ into single tax bracket.

Hi Erin. Thank you for a very informative video channel! You may have covered this in other videos, but are there rule of thumb target percentages for how much one should have in each type of account (401k, roth ira & brokerage accounts) to maximize withdrawal options which minimize taxes?

Thanks for all your helpful videos in 2024 and looking forward to more in 2025!

Wonderful video, as always. Thank you for your insight, Erin!!!!

Thanks Erin, I needed this explained to me in simple terms. RMD's are coming soon and monthly distributions sound just fine. Be well!

Thank you for all you do! What you do makes sense to me. Turning 71 this year and this helps a lot. I just subscribed!