I’m 60 with $5 Million Saved for Retirement - How to avoid a $13 Million Tax Nightmare

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Күн бұрын

Пікірлер: 16

@Bondbeer 8 ай бұрын

Good video. Can you really make a meaningful dent in $4m? If it’s growing at 10% a year, even converting $400k per year which puts you firmly into the 35% bracket plus state tax and IRMAA does not even start to reduce the principal balance. If instead you just let it double to $8m, RMD in year one will be less than $400k and you will be paying the tax on that with future dollars adjusted for inflation. If you move to Florida in retirement you save state tax as well. Yes, RMDs will increase but so will the standard deduction and tax brackets. With this large an account you are likely never going to fully pay tax on the entire balance and if your heirs are in a lower bracket, that is a benefit as well.

@Bondbeer 4 ай бұрын

I don’t come up with the same tax amount if not converting but not letting the account grow. $5m balance. 5% growth withdrawn each year for 12 years or $250k per year. Top of the 22% bracket for 7 years then 5 years in the 24% bracket once SS kicks in. RMDs will be similar but can increase to account for inflation and start to draw down the $5m principal. At age 90 maybe $3m still left divided by 3 kids is $100k per year plus gains for each over 10 years which is rounding for what they will be inheriting tax free from other assets. Will revisit plan if estate taxes change in future.

@Bondbeer 4 ай бұрын

Good video. I plan on living off my IRA and SS and let everything else grow and go to my heirs tax free. I won’t wait for RMDs but not going to convert either as I don’t need more tax free money for my lifetime. Will my heirs pay more tax if I pass away earlier than expected. Yes. For that I have life insurance and they still get all the tax free as planned with the only difference being I died before spending down the tax deferred. So they pay more tax on a higher balance than planned. All good.

@robklein1981 15 күн бұрын

With the 4% rule why are you planning on drawing $120,000/year with an additional $50,000K for travel. With $5M draw $200,000 and add an additional travel allowance. Leaving $18M to family is incredibly generous. You and your spouse worked hard, enjoy retirement and leave a realistic amount to your heirs.

@stevemueller7358 Жыл бұрын

Your videos are mind boggling!!! Thanks! We are relocating from CO to PA to be near our kids & grandkids. I need to find a good financial firm near Altoona - so looking for recommendations.

@OakHarvestFinancialGroup Жыл бұрын

Lol, thanks Steve! We're glad you enjoy them! And congrats on your move to be closer to family - we hope you enjoy it! We utilize technology so we can work with people all over the country - if you're interested, we'd love to help. You can set up a complimentary appointment with Frank here, and he'll get you hooked up with the right financial advisor on our team for your situation. They'll go through where you're at, what your goals are, offer some solutions, and you can decide if you'd like to hire us. Looking forward to hearing from you! click2retire.com/60-with-5-million

@rdspam 3 ай бұрын

3:21 PA does not tax retirement plan withdrawals nor Roth conversions, no?

@Bondbeer 8 ай бұрын

I do see a benefit if you might be close to the estate tax limit as paying the tax while alive reduces the size of the estate while not reducing the after tax value being inherited. I also appreciate the benefit of converting as it relates to the widow trap. Otherwise I don’t see a benefit taking into consideration the time value of money, inflation adjustment to the tax brackets and ability to pay tax slowly over many years. Remember one goal is to ensure you have enough money to last as long as you live. When you are 85 years old vs 65 years old there is less time left which means less chance of failure so paying more tax at that point is not impacting the outcome as it could be paying in at 65 and then having a major downturn and investment losses.

@darrellhay Жыл бұрын

New Hampshire and Washington state also no income tax

@OakHarvestFinancialGroup Жыл бұрын

Thanks for sharing!!

@rdspam 3 ай бұрын

Better assumption would be the actual $12-14M exemption, 40% rate, indexed to inflation, that is in the law. Assuming much lower exemptions, much higher estate tax rates, higher marginal tax rates, an not indexing for inflation can make a big number. But not really reasonable.

@donb1183 5 ай бұрын

Inflation is not taken into account here. Your 120k will have to be at least 200k in 10 years. All financial planners assume tax rates will be higher, maybe they will, maybe they won't. And the emphasis is always on tax avoidance rather than actual growth of your retirement accounts.

@stephenholcomb9278 7 ай бұрын

It would be nice to see a video with these amounts and trying to maximize withdrawal strategy. My wife and I have no children, and while we do have nieces and nephews we prefer to spend all our money as much as we can and then let them have the physical assets (properties and the like) that they can work to sell. I have zero intention of having 18 million and then having all the taxes paid up front for those children :) With 5 million saved you could easily withdraw 200,000 per year using the 4% rule and more than that when SS and pensions kick in. So I'm not understanding why the video has a 120,000 per year with a 50k add on for just 10 years.

@OakHarvestFinancialGroup 6 ай бұрын

Great comment! We appreciate the feedback and can add your idea to our future topic list. If anything, your comment helps to illustrate that a retirees’ goals often vary widely. Like yourself, some retirees want the ‘last check thy write to bounce’ as they plan to spend everything they have saved. For while others, leaving a legacy is their preference. For the latter, estate and tax concerns can become considerations. Feel free to call our office to see if you may be missing considerations in you and your wife’s retirement plan. Again, thanks for the comment and for watching our channel.