The “I want to retire soon” thread (3 Viewers)

[Sand]

You manage your own portfolio heading into retirement. You can have 3-4 funds/ETF’s max. Go

IVV - 50%
IJR - 20%
IEV - 15%
JAAA - 15%

 

[Sand]

And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 5.7% SWR

Yeah - I don't believe this one. Call it selection bias, overfitting, etc. Golden Butterfly - same thing.

 

[-OZ-]

I know we've done this in here before, but I ran Monte Carlo analysis on Portfolio Visualizer on simplified versions of the first couple I suggested above based not on specific ETFs but on asset classes. Scenario is based on a 5.5% withdrawal rate (to push it a little) adjusted for inflation and 30 year timeframe, to show why just a little less simple should be appealing to someone looking to maximize SWR.

80% Total Stock/20% Total Bond: 81% survived all scenarios
60% Total Stock/40% Total Bond: 79% success rate
40% Large Cap Growth, 20% Small Cap Value, 20% LT Treasuries, 20% ST Treasuries: 89% success rate
And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 93% success

What success rate are you okay with?
I’d be good with all those, anything above 70% works imo if you’re flexible.

 

[Judge Smails]

You manage your own portfolio heading into retirement. You can have 3-4 funds/ETF’s max. Go

Why limit yourself to 3-4 funds?

If that's the rule we're going by, the Simple Path to Wealth folks would have you go VTI and BND in some version of 70/30 or 80/20.

I don't love that, particularly the BND fund as it includes 26% corporate bonds which are going to be more closely correlated to equities. It also has 22% mortgage bonds. I prefer Treasuries as less-correlated to equities. Also VTI has hardly any small cap value as it's cap weighted. So with just two more funds you could go with something like:
VTI - 40%
AVUV - 20%
TLT - 20%
SPTI - 20%

But I'm building in my primary IRA (65% of my retirement funds) towards a risk parity style portfolio, something more like:

65% Equities (trying to diversify as much as possible within this allocation without going too crazy):

• VUG (large cap growth) - 25%
• AVUV (small cap value)- 20%
• REET (REITs) - 5%
• KBWP (Property/casualty) - 5%
• AVDV (Developed Value) - 5%
• AVES (Emerging Value) - 5%

15% Fixed Income (acts more like 22% when compared to TLT because of the extended duration) :

• EDV (25+ year Treasury strips fund) - 15%

15% - Alts

• IAUM (gold) - 10%
• DBMF (managed futures) - 5%

5% Cash

But because this is fun for me I have slightly different allocations in smaller accounts that I'm still actively contributing to, taking on a little more risk with allocations like:

HSA: 24% AVGV, 16% UPRO (2x S&P), 18% IAUM, 18% DBMF, 24% EDV
ROTH 401K: 39% VBR, 39% VUG, 10% EDV, 8% UPRO, 4% FBTC

I wouldn't necessarily recommend my approach to others, as most people do want to simplify (let alone sprinkling in leveraged ETFs or Crypto). But I'll be rebalancing via withdrawals (sell high!), and I have re-balancing bands in place as well that may trigger above and beyond that. But that doesn't seem difficult to manage, especially as I will eventually consolidate the handful of rollover IRAs, 401Ks, Roths, and HSAs I have now into just three accounts.

There is definitely something to the Bond Tent/Rising Equity Glidepath approach that @Desert_Power just mentioned and we've talked about in here before. I may find myself feeling much more conservative in a few years as I get to 2-3 years out from 59 1/2 (I'm only a few months into 52 now) and decide to shift toward a higher fixed income allocation in line with that. I'd shift that from the equity allocation, with the goal of rebalancing/withdrawing my way back to 75/25 over 10 years or so.

Just was looking for simplicity if possible. Maybe not Boglehead but not too complicated. I’m open

 

[Judge Smails]

I know we've done this in here before, but I ran Monte Carlo analysis on Portfolio Visualizer on simplified versions of the first couple I suggested above based not on specific ETFs but on asset classes. Scenario is based on a 5.5% withdrawal rate (to push it a little) adjusted for inflation and 30 year timeframe, to show why just a little less simple should be appealing to someone looking to maximize SWR.

80% Total Stock/20% Total Bond: 81% survived all scenarios
60% Total Stock/40% Total Bond: 79% success rate
40% Large Cap Growth, 20% Small Cap Value, 20% LT Treasuries, 20% ST Treasuries: 89% success rate
And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 93% success

What success rate are you okay with?
I’d be good with all those, anything above 70% works imo if you’re flexible.

Man 70% seems low. But maybe these financial planners have 98+% ingrained in our temporal a lobes so we keep pouring money in

 

[SFBayDuck]

And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 5.7% SWR

Yeah - I don't believe this one. Call it selection bias, overfitting, etc. Golden Butterfly - same thing.

And that’s based on what? I didn’t look for a sweet spot to match the data, just plugged in a basic portfolio. The data is the data. If you believe the 4% rule based on the data, why wouldn’t you believe optimizing portfolios based on that same data could produce higher SWR, like the actual inventor of the thing now believes.

I’m all about challenging these things, and I think the biggest hole in these types of portfolios could be the SCV premium/outperformance. But the data in the data. So we’d need something to definitively prove that the historical premium, that comes from betting on smaller less-proven companies that have more inherent risk therefore should demand a higher reward, is no longer valid. Which just isn’t what we typically see.

 

[SFBayDuck]

I know we've done this in here before, but I ran Monte Carlo analysis on Portfolio Visualizer on simplified versions of the first couple I suggested above based not on specific ETFs but on asset classes. Scenario is based on a 5.5% withdrawal rate (to push it a little) adjusted for inflation and 30 year timeframe, to show why just a little less simple should be appealing to someone looking to maximize SWR.

80% Total Stock/20% Total Bond: 81% survived all scenarios
60% Total Stock/40% Total Bond: 79% success rate
40% Large Cap Growth, 20% Small Cap Value, 20% LT Treasuries, 20% ST Treasuries: 89% success rate
And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 93% success

What success rate are you okay with?
I’d be good with all those, anything above 70% works imo if you’re flexible.

Totally agree. There are those that believe a 50% success rate, with guardrails built in, is sufficient. 75ish with guardrails feels right to me, but I’m not smart enough to back that with math.

 

[SFBayDuck]

I know we've done this in here before, but I ran Monte Carlo analysis on Portfolio Visualizer on simplified versions of the first couple I suggested above based not on specific ETFs but on asset classes. Scenario is based on a 5.5% withdrawal rate (to push it a little) adjusted for inflation and 30 year timeframe, to show why just a little less simple should be appealing to someone looking to maximize SWR.

80% Total Stock/20% Total Bond: 81% survived all scenarios
60% Total Stock/40% Total Bond: 79% success rate
40% Large Cap Growth, 20% Small Cap Value, 20% LT Treasuries, 20% ST Treasuries: 89% success rate
And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 93% success

What success rate are you okay with?
I’d be good with all those, anything above 70% works imo if you’re flexible.

Man 70% seems low. But maybe these financial planners have 98+% ingrained in our temporal a lobes so we keep pouring money in

Ding ding ding. Follow the money. Traditional financial planning , “we do better when you do better” is based on maximizing assets under management. That’s not a horrible thing, it leads to you ending up with a bunch of money when you die which is obviously better than running out. But it also leads to you leaving lots of life/experiences/gifts/charity/whatever on the table. Let alone the tens of thousands in AUM fees and the missing compounding in your investments it costs you.

 

[-OZ-]

Man 70% seems low. But maybe these financial planners have 98+% ingrained in our temporal a lobes so we keep pouring money in

“Failure” means needing to adjust. If you get on the highway, do you set cruise control at a speed you’re 98% likely to not need to adjust? Or do you drive a speed you’re comfortable with and slow down if needed?

 

[Sand]

And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 5.7% SWR

Yeah - I don't believe this one. Call it selection bias, overfitting, etc. Golden Butterfly - same thing.

And that’s based on what? I didn’t look for a sweet spot to match the data, just plugged in a basic portfolio. The data is the data. If you believe the 4% rule based on the data, why wouldn’t you believe optimizing portfolios based on that same data could produce higher SWR, like the actual inventor of the thing now believes.

I’m all about challenging these things, and I think the biggest hole in these types of portfolios could be the SCV premium/outperformance. But the data in the data. So we’d need something to definitively prove that the historical premium, that comes from betting on smaller less-proven companies that have more inherent risk therefore should demand a higher reward, is no longer valid. Which just isn’t what we typically see.

I just think these macro tends will shift. I don't think SCV will perform as previous, in particular. Just my personal opinion.

That said for your first two using a dynamic strategy gets you likely into the 5% withdrawal regime easily. That ain't bad.

 

[SFBayDuck]

And a simplified risk parity style with 35% LCG, 35% SCV, 20% LT Treasuries, 10% Gold: 5.7% SWR

Yeah - I don't believe this one. Call it selection bias, overfitting, etc. Golden Butterfly - same thing.

And that’s based on what? I didn’t look for a sweet spot to match the data, just plugged in a basic portfolio. The data is the data. If you believe the 4% rule based on the data, why wouldn’t you believe optimizing portfolios based on that same data could produce higher SWR, like the actual inventor of the thing now believes.

I’m all about challenging these things, and I think the biggest hole in these types of portfolios could be the SCV premium/outperformance. But the data in the data. So we’d need something to definitively prove that the historical premium, that comes from betting on smaller less-proven companies that have more inherent risk therefore should demand a higher reward, is no longer valid. Which just isn’t what we typically see.

I just think these macro tends will shift. I don't think SCV will perform as previous, in particular. Just my personal opinion.

That said for your first two using a dynamic strategy gets you likely into the 5% withdrawal regime easily. That ain't bad.

Yeah I think the key to this is 1) a diversified portfolio (we have more available to us than Total Market indexes) and 2) flexible withdrawal strategy. If you have those, it seems highly likely you can support a 5.5% initial SWR. I know some look to "bucket" their spending into needs/wants/wishes, and then tie withdrawals to that. So, for example, a 4% withdrawal rate supports your needs, 4.5% your wants, and 5% your wishes, something along those lines. Others combine those first two into a "Base Great Life" concept and tie that to the conservative withdrawal strategy and adjust from there.

Then comes the decision on how to build the flexibility into the plan. Is it guardrails? Lower the annual inflation adjustment? Monte Carlo it every single year and adjust from there? Lots of ideas out there. But like most things in life, the more flexibility and optionality built into the plan, the better off you're likely to be.

 

[Sand]

Then comes the decision on how to build the flexibility into the plan. Is it guardrails? Lower the annual inflation adjustment? Monte Carlo it every single year and adjust from there? Lots of ideas out there. But like most things in life, the more flexibility and optionality built into the plan, the better off you're likely to be.

For me, at least, will be VPW as the guideline. It's pretty straightforward and implementable. They calculate a max and conservative min - we'll be aiming for expenditures inside that band.

 

[jamny]

Need book recommendations.

Ones I've read recently:
All About Asset Allocation
Boglehead's Guide to Retirement Planning
All About Index Funds
The Psychology of Money
One Up on Wall Street
The Simple Path to Wealth
Quit Like a Millionaire
Die With Zero

Up Next:
The Millionaire Next Door

Is Rich Day Poor Dad any good? Seems like some like it and some hate it.

More accumulation focused than for you on the precipice of retirement, but Just Keep Buying by Maggiulli was pretty good.

How Much Money Do I Need to Retire by Tresidder and Retirement Planning Guidebook by Pfau are in my Amazon cart right now. Can't remember where I saw those recs, but dropped them in there when I did. Anybody read either of those?

I also have How to Retire Happy, Wild, and Free by Zelinski and The Algebra of Wealth by Galloway on Audible, haven't started either of those yet. Same with Simple Path to Wealth.

I need to retire so I have time to read/listen to all of these books......

Have you had a chance to listen to the bolded?
I have an Audible credit coming up and was looking for something like this. I'm pretty much set financially and wanted something more about how to prepare mentally for retirement beyond the usual checklist of "exercise, eat right, get sleep, volunteer, etc."
I was looking at How to Retire by Christine Benz but the reviews of the narration are really bad so I'll probably read the book.

 

[SFBayDuck]

Need book recommendations.

Ones I've read recently:
All About Asset Allocation
Boglehead's Guide to Retirement Planning
All About Index Funds
The Psychology of Money
One Up on Wall Street
The Simple Path to Wealth
Quit Like a Millionaire
Die With Zero

Up Next:
The Millionaire Next Door

Is Rich Day Poor Dad any good? Seems like some like it and some hate it.

More accumulation focused than for you on the precipice of retirement, but Just Keep Buying by Maggiulli was pretty good.

How Much Money Do I Need to Retire by Tresidder and Retirement Planning Guidebook by Pfau are in my Amazon cart right now. Can't remember where I saw those recs, but dropped them in there when I did. Anybody read either of those?

I also have How to Retire Happy, Wild, and Free by Zelinski and The Algebra of Wealth by Galloway on Audible, haven't started either of those yet. Same with Simple Path to Wealth.

I need to retire so I have time to read/listen to all of these books......

Have you had a chance to listen to the bolded?
I have an Audible credit coming up and was looking for something like this. I'm pretty much set financially and wanted something more about how to prepare mentally for retirement beyond the usual checklist of "exercise, eat right, get sleep, volunteer, etc."
I was looking at How to Retire by Christine Benz but the reviews of the narration are really bad so I'll probably read the book.

I haven't yet, no. Funny I was at a work event yesterday in Seattle and talking to somebody from Audible about how many books and unused credits I have sitting in there!

I am reading How to Retire, about half way through. Good book so far, worth the read.

 

[IvanKaramazov]

I was looking at How to Retire by Christine Benz but the reviews of the narration are really bad so I'll probably read the book.

Huh. I listened to this on Audible and I thought the narration was unremarkable. They used one male narrator and one female narrator as stand-ins for each author, so everyone sounded the same, but that didn't bother me.

If anybody has any other Audible titles on this topic to recommend, I have a bunch of credits just sitting there.

 

[Ministry of Pain]

Have a meeting tomorrow to sit down with a professional, Mrs and I have always done it on our own and we do OK but we need some professional guidance

-The saddest part of investing over a long period of time and I'll just say it, being the first in your family to shoot for a comfortable retirement/7 figures is that once you accumulate all this money and assets, you're likely on the back 9 and perhaps even the last 3-4 holes if you're lucky

It's just kind of sad we work our entire lives to make this little pile of money in the hopes of having a much better end of life than we have seen others go thru
I feel the health side of retirement is almost as important as the financial side and some ways even more important.

-We're both 50, we plan on doing a pivot towards our mid to late 50s, have a small business to operate under and not have to dip into retirement quite yet.
Example: Mrs-Realtor, MOP-Mtg Broker). Another is going in together to run a small bar/nightclub(no food!) and play the music we want to hear

I have a good friend that just turned 75 and he still owns a company and works pretty diligent M-F and especially early in the morning from like 7am-early afternoon
He runs a small shipping company. He tells me how he has to start draining the investments or move them into other things. i don't understand it all but it's almost like he's forced to not allow continued growth on his money. I guess all 401Ks must be drained over time?

Like I said, we're going to get some professional help to clear up some of these mysteries and also try and limit the damage taxes will have later in our lives.
We likely would have enough money to retire on already if I went back in time but we also made some conscious decisions to have a little less invested but more in our hands to enjoy
To live in the moment and not just work and invest and never have any fun or wait until your 60 years old to take your first real vacation, we still spend too much and should likely be putting even more away than we do, I'm sure we're gonna hear about it tomorrow

Lot of factors and individual choice/preference plays into a lot of the decisions folks make about when to retire or transition away from being company property

 

[IvanKaramazov]

Have a meeting tomorrow to sit down with a professional, Mrs and I have always done it on our own and we do OK but we need some professional guidance

-The saddest part of investing over a long period of time and I'll just say it, being the first in your family to shoot for a comfortable retirement/7 figures is that once you accumulate all this money and assets, you're likely on the back 9 and perhaps even the last 3-4 holes if you're lucky

It's just kind of sad we work our entire lives to make this little pile of money in the hopes of having a much better end of life than we have seen others go thru
I feel the health side of retirement is almost as important as the financial side and some ways even more important.

-We're both 50, we plan on doing a pivot towards our mid to late 50s, have a small business to operate under and not have to dip into retirement quite yet.
Example: Mrs-Realtor, MOP-Mtg Broker). Another is going in together to run a small bar/nightclub(no food!) and play the music we want to hear

I have a good friend that just turned 75 and he still owns a company and works pretty diligent M-F and especially early in the morning from like 7am-early afternoon
He runs a small shipping company. He tells me how he has to start draining the investments or move them into other things. i don't understand it all but it's almost like he's forced to not allow continued growth on his money. I guess all 401Ks must be drained over time?

Like I said, we're going to get some professional help to clear some of these mysteries and also try and limit the damage taxes will have later in our lives.
We likely would have enough money to retire on already if I went back in time but we also made some conscious decisions to have a little less invested but more in our hands to enjoy
To live in the moment and not just work and invest and never have any fun or wait until your 60 years old to take your first real vacation, we still spend too much and should likely be putting even more away than we do, I'm sure we're gonna hear about it tomorrow

Lot of factors and individual choice/preference plays into a lot of the decisions folks make abut when they would like to retire or transition away from being company property

Sounds like Required Minimum Distributions from a traditional IRA. Just a guess but that would be very common for people in their 70s.

 

[Ministry of Pain]

Have a meeting tomorrow to sit down with a professional, Mrs and I have always done it on our own and we do OK but we need some professional guidance

-The saddest part of investing over a long period of time and I'll just say it, being the first in your family to shoot for a comfortable retirement/7 figures is that once you accumulate all this money and assets, you're likely on the back 9 and perhaps even the last 3-4 holes if you're lucky

It's just kind of sad we work our entire lives to make this little pile of money in the hopes of having a much better end of life than we have seen others go thru
I feel the health side of retirement is almost as important as the financial side and some ways even more important.

-We're both 50, we plan on doing a pivot towards our mid to late 50s, have a small business to operate under and not have to dip into retirement quite yet.
Example: Mrs-Realtor, MOP-Mtg Broker). Another is going in together to run a small bar/nightclub(no food!) and play the music we want to hear

I have a good friend that just turned 75 and he still owns a company and works pretty diligent M-F and especially early in the morning from like 7am-early afternoon
He runs a small shipping company. He tells me how he has to start draining the investments or move them into other things. i don't understand it all but it's almost like he's forced to not allow continued growth on his money. I guess all 401Ks must be drained over time?

Like I said, we're going to get some professional help to clear some of these mysteries and also try and limit the damage taxes will have later in our lives.
We likely would have enough money to retire on already if I went back in time but we also made some conscious decisions to have a little less invested but more in our hands to enjoy
To live in the moment and not just work and invest and never have any fun or wait until your 60 years old to take your first real vacation, we still spend too much and should likely be putting even more away than we do, I'm sure we're gonna hear about it tomorrow

Lot of factors and individual choice/preference plays into a lot of the decisions folks make abut when they would like to retire or transition away from being company property

Sounds like Required Minimum Distributions from a traditional IRA. Just a guess but that would be very common for people in their 70s.

That's it, sounds like what he talks about

 

[Brunell4MVP]

RMDs are there because the govt eventually wants their tax money. There's a well intended reason it starts just beyond full Soc Sec age too.

 

[SFBayDuck]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

I haven't fleshed out my full plan yet, but as I also want to retire in my early-mid 50s (tomorrow would be nice) it'll be living off of a little income from something, already taxed money from normal brokerage accounts and paying long-term capital gains taxes (likely 15% but it could be zero depending), and converting Trad to Roth while income is low to keep it in the first tax bracket or three.

It's a juggling act trying to have enough income to get up out of Medicaid with not too much to bump up into higher LTCG and income tax brackets while still having access to ACA subsidies (assuming they still exist). If you can thread that needle you could end up paying very, very little in taxes, stretching those retirement dollars. And pretty sure you need software, or a professional (I'm working on it!), to pull that off.

 

[Mookie]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

I haven't fleshed out my full plan yet, but as I also want to retire in my early-mid 50s (tomorrow would be nice) it'll be living off of a little income from something, already taxed money from normal brokerage accounts and paying long-term capital gains taxes (likely 15% but it could be zero depending), and converting Trad to Roth while income is low to keep it in the first tax bracket or three.

It's a juggling act trying to have enough income to get up out of Medicaid with not too much to bump up into higher LTCG and income tax brackets while still having access to ACA subsidies (assuming they still exist). If you can thread that needle you could end up paying very, very little in taxes, stretching those retirement dollars. And pretty sure you need software, or a professional (I'm working on it!), to pull that off.

I struggle with overthinking this, and don't want to find myself turning down part time income opportunities because I'm worrying too much about my income going over some threshold (I will have a pension that doesn't give me a lot of room). I'm leaning towards doing whatever it is that makes me happy and then leaving it in the hands of my advisor to sort out the best tax strategy. If I pay extra in taxes, that's OK, it won't break me.

 

[Sand]

It's a juggling act trying to have enough income to get up out of Medicaid with not too much to bump up into higher LTCG and income tax brackets while still having access to ACA subsidies (assuming they still exist). If you can thread that needle you could end up paying very, very little in taxes, stretching those retirement dollars. And pretty sure you need software, or a professional (I'm working on it!), to pull that off.

Why? Unless you're under 55 and have everything in retirement accounts you should be good. If under 55 and you have taxable account monies just sell appreciated stock. If you're 55-59.5 do that and maybe a 72t distribution. If over 59.5 do taxable sales and tax deferred withdrawals. Boom, done.

 

[SFBayDuck]

If under 55 and you have taxable account monies just sell appreciated stock.

Just did a little more digging, and you're right - capital gains are included in MAGI, which is what Medicaid and the ACA subsidies are each based on. So it's a little simpler than I was thinking. Sell some stock to live on, pay the LTCG (but not income) tax, but your LTCG do count as part of your MAGI.

I struggle with overthinking this, and don't want to find myself turning down part time income opportunities because I'm worrying too much about my income going over some threshold (I will have a pension that doesn't give me a lot of room). I'm leaning towards doing whatever it is that makes me happy and then leaving it in the hands of my advisor to sort out the best tax strategy. If I pay extra in taxes, that's OK, it won't break me.

As you 100% should! And this is where an advisor can come into play, let them worry about it for you. Just make sure they are an advisor that specializes or at least is very well-versed n retirement/decumulation, many are much more focused on asset accumulation - both theirs and their clients'.

 

[-OZ-]

It's just kind of sad we work our entire lives to make this little pile of money in the hopes of having a much better end of life than we have seen others go thru
I feel the health side of retirement is almost as important as the financial side and some ways even more important.

Yep.
my boss is in her 70s and won’t stop working despite being able to financially.
The guy who does the same job I do at our higher headquarters is retiring in January. I talked a bit with him yesterday about his plans, he doesn’t really have any but figured it was time to go in his late 60s. He’s fine financially too but doesn’t have that spark for the next thing.
That seems to be an even bigger hurdle for many than the money. I’m doing my damndest to have something to retire to. Although I do like my job enough, for now.

 

[matttyl]

The talk above with RMDs - I've never viewed them as being a real potential issue (for me). Firstly, at my age (in my 40s) they won’t hit till I’m 75+. Of course we have no idea what tax rates/brackets will be at that time - but we have a progressive tax system. You fill up the lower tax brackets, which (with inflation) could be huge numbers 30+ years from now. And I don’t plan on working past 65 (or 60 if plans work out), so something needs to provide me income for the 10-15 years before they are a thing.

 

[Sand]

If under 55 and you have taxable account monies just sell appreciated stock.

Just did a little more digging, and you're right - capital gains are included in MAGI, which is what Medicaid and the ACA subsidies are each based on. So it's a little simpler than I was thinking. Sell some stock to live on, pay the LTCG (but not income) tax, but your LTCG do count as part of your MAGI.

Dividends and interest also count, so that has to be managed.

 

[Peggy]

If under 55 and you have taxable account monies just sell appreciated stock.

Just did a little more digging, and you're right - capital gains are included in MAGI, which is what Medicaid and the ACA subsidies are each based on. So it's a little simpler than I was thinking. Sell some stock to live on, pay the LTCG (but not income) tax, but your LTCG do count as part of your MAGI.

Dividends and interest also count, so that has to be managed.

You can't roll over enough 401k to Roth without messing up the MAGI and ACA. And the cliff is back starting next year. 10 years and I still can't get it all rolled over.

 

[Peggy]

Can anyone explain what the safe harbor rule is in a situation where I'm going to have large capital gains in 2025? To avoid under payment penalty?

Is all I have to do is make one early payment to equal over 100% of the tax I paid in 2024 and then keep the rest invested until April 15th 2026?

 

[FairWarning]

Now that our closing date has moved up six weeks to the end of the year, my retirement plan has shifted to winning the lottery. Not a good feeling at 60.

 

[NutterButter]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

 

[SFBayDuck]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

 

[jamny]

I'm gonna have to read back the past few pages to get a better handle on RMD's and such. We'll be meeting with our financial advisor next year so it'll be good to be up on it to ask questions.

 

[NutterButter]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

Ah, nm then. My thinking was that my marginal rate would be 22% either post 65 or when taking rmds so it didn't matter if i just waited until 73 to do the conversion. If i can't convert the rmd and am just stuck with contributing the max from the rmd, then forget it. I guess the key if am at the 22% marginal rate is to convert just enough to keep me from getting hit with rmds.

re: using brokerage early on, i thought that's considered when determining aca qualification?

 

[-OZ-]

contributing the max from the rmd,

RMDs aren’t earned income. If you want to contribute to the IRA, you’ll need to work. Edit - I think I was wrong about rentals unless you’re paying yourself from an LLC or something for managing it. I think…

 

[NutterButter]

contributing the max from the rmd,

RMDs aren’t earned income. If you want to contribute to the IRA, you’ll need to work. Edit - I think I was wrong about rentals unless you’re paying yourself from an LLC or something for managing it. I think…

More reason that my original idea was terrible

 

[SFBayDuck]

re: using brokerage early on, i thought that's considered when determining aca qualification?

The capital gains are included in MAGI, not the entire amount you sell. Say you need $50K to live so you sell $50K of stock. But if $25K of that is cost basis and $25K is capital gains, only that $25K of cap gains is considered part of MAGI. So sell the stuff you've bought in the past few years, not the Apple stock you bought 25 years ago that's 95% cap gains at this point.

I'm starting to actually think through how I would execute "early retirement" in the next 3-6 months, whether it was by my choice to leave my job or not. I'm in tech sales and a new VP just joined, so you never know! While I'm sure I could get another gig in my industry I just don't know if I'd want to. I'd probably do COBRA for awhile as my daughter is still on my insurance, but (fingers crossed) she finds a job after graduation in June and has her own health insurance at least by the end of the year. ACA would then come into play at that point, or after the 18 months I could have COBRA.

I've spent the last few years obsessing over growing my retirement accounts, 30-40% savings rates with most of that going into 401K, HSA, and mega backdoor Roth. Thanks to that and a strong market, those accounts have almost doubled in the last 3 years. Based on several projections I've run I'm pretty much at Coast FI, meaning I can stop contributing now and even with below-average returns the next 7 years, by 59 1/2 when I would start accessing them I should have enough to carry me from there. So now I'm hyperfocused on how I can get more money into my taxable accounts so I can live off of those along with generating a little income doing something else in the next handful of years.

 

[NutterButter]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

You ever play around with one of these RMD calculators? According to one on the schwab site, if I was 73 now with a 2M trad balance, I'm only looking at an rmd of 75k. That's less than a 4% withdrawal rate. So filing as married, that's just in the 12% bracket. I know that balance is arbitrary but that doesn't seem like something to be too concerned about.

 

[Sand]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

You ever play around with one of these RMD calculators? According to one on the schwab site, if I was 73 now with a 2M trad balance, I'm only looking at an rmd of 75k. That's less than a 4% withdrawal rate. So filing as married, that's just in the 12% bracket. I know that balance is arbitrary but that doesn't seem like something to be too concerned about.

It goes up exponentially from there, though.

 

[NutterButter]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

You ever play around with one of these RMD calculators? According to one on the schwab site, if I was 73 now with a 2M trad balance, I'm only looking at an rmd of 75k. That's less than a 4% withdrawal rate. So filing as married, that's just in the 12% bracket. I know that balance is arbitrary but that doesn't seem like something to be too concerned about.

It goes up exponentially from there, though.

Ok, but even 2M at 83, its 112k. Still doesn't seem like a big deal. Probably more than I'd need considering my traveling days are most likely behind me and provided I didn't need some in home care, but at that point, I'd just donate some of it. I'd think in theory your balance should be going down too, no? So say you're down to 1.5M at 83 and then 1M at 93 if you live that long, that makes the RMDs 85k and 99k respectively.

 

[matttyl]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

You ever play around with one of these RMD calculators? According to one on the schwab site, if I was 73 now with a 2M trad balance, I'm only looking at an rmd of 75k. That's less than a 4% withdrawal rate. So filing as married, that's just in the 12% bracket. I know that balance is arbitrary but that doesn't seem like something to be too concerned about.

It goes up exponentially from there, though.

Ok, but even 2M at 83, its 112k. Still doesn't seem like a big deal. Probably more than I'd need considering my traveling days are most likely behind me and provided I didn't need some in home care, but at that point, I'd just donate some of it. I'd think in theory your balance should be going down too, no? So say you're down to 1.5M at 83 and then 1M at 93 if you live that long, that makes the RMDs 85k and 99k respectively.

Moreover we have to think of how large the 10/12% brackets will be that far in the future. I mean go back 20 years and look at how small the lower brackets were compared to today, then project that out 20 years in the future. I mean it could be $250k for a married couple (after whatever the standard deduction grows to at that point) before getting to a 20+% bracket.

 

[SFBayDuck]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

You ever play around with one of these RMD calculators? According to one on the schwab site, if I was 73 now with a 2M trad balance, I'm only looking at an rmd of 75k. That's less than a 4% withdrawal rate. So filing as married, that's just in the 12% bracket. I know that balance is arbitrary but that doesn't seem like something to be too concerned about.

It goes up exponentially from there, though.

Ok, but even 2M at 83, its 112k. Still doesn't seem like a big deal. Probably more than I'd need considering my traveling days are most likely behind me and provided I didn't need some in home care, but at that point, I'd just donate some of it. I'd think in theory your balance should be going down too, no? So say you're down to 1.5M at 83 and then 1M at 93 if you live that long, that makes the RMDs 85k and 99k respectively.

Moreover we have to think of how large the 10/12% brackets will be that far in the future. I mean go back 20 years and look at how small the lower brackets were compared to today, then project that out 20 years in the future. I mean it could be $250k for a married couple (after whatever the standard deduction grows to at that point) before getting to a 20+% bracket.

Are you building in potential portfolio growth between now and 73? But in general I agree, for most people worrying about things like RMDs and IRMMA is probably not going to be worth the trouble.

But for FBGs that have saved aggressively, it's worth looking into and, potentially, doing some planning. For the average American, not an issue at all (unfortunately).

And all we can do is plan using today's regulations. I'm 52, much of this stuff is 20+ years in the future, who the hell knows what the regulations will be at that time.

 

[djmich]

All you guys geeking out on 401’s and magi’s, what’s the approx net worth range to live comfortably and retire at 57 in 5 yrs?

 

[Peggy]

All you guys geeking out on 401’s and magi’s, what’s the approx net worth range to live comfortably and retire at 57 in 5 yrs?

The very first thing you need to know is your spend.

 

[matttyl]

All you guys geeking out on 401’s and magi’s, what’s the approx net worth range to live comfortably and retire at 57 in 5 yrs?

So many factors. First is what you’ll need to spend each month to determine how big of a nest egg you’ll need to produce it. Next would be changes in that spend (finally paying off the house, kids no longer dependents, SS starting up). Then is where that net worth is located - Roth or traditional or after tax. Could be anywhere from $1m to $10m.

 

[NutterButter]

All you guys geeking out on 401’s and magi’s, what’s the approx net worth range to live comfortably and retire at 57 in 5 yrs?

So many factors. First is what you’ll need to spend each month to determine how big of a nest egg you’ll need to produce it. Next would be changes in that spend (finally paying off the house, kids no longer dependents, SS starting up). Then is where that net worth is located - Roth or traditional or after tax. Could be anywhere from $1m to $10m.

Another factor I don't see mentioned much is how long you financially plan to live. It take a lot less money to plan to live to 80 than it does to live to 100. I personally plan for the latter b/c i never want to run out of money.

 

[-OZ-]

think in theory your balance should be going down too, no?

Possibly. But if average returns are 10%, your RMD doesn’t exceed 10% until you’re 94. Which is good, with some bonds and sequence of returns risk you don’t want to have to take 10% every year, but on average your account will grow into your 90s if you’re just taking RMDs.

nother factor I don't see mentioned much is how long you financially plan to live. It take a lot less money to plan to live to 80 than it does to live to 100. I personally plan for the latter b/c i never want to run out of money.

Yep. And it’s even harder when you’re a couple, the lifetime of the oldest / last to die will almost always be at least a few years after the first.

 

[matttyl]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

You ever play around with one of these RMD calculators? According to one on the schwab site, if I was 73 now with a 2M trad balance, I'm only looking at an rmd of 75k. That's less than a 4% withdrawal rate. So filing as married, that's just in the 12% bracket. I know that balance is arbitrary but that doesn't seem like something to be too concerned about.

It goes up exponentially from there, though.

Ok, but even 2M at 83, its 112k. Still doesn't seem like a big deal. Probably more than I'd need considering my traveling days are most likely behind me and provided I didn't need some in home care, but at that point, I'd just donate some of it. I'd think in theory your balance should be going down too, no? So say you're down to 1.5M at 83 and then 1M at 93 if you live that long, that makes the RMDs 85k and 99k respectively.

Moreover we have to think of how large the 10/12% brackets will be that far in the future. I mean go back 20 years and look at how small the lower brackets were compared to today, then project that out 20 years in the future. I mean it could be $250k for a married couple (after whatever the standard deduction grows to at that point) before getting to a 20+% bracket.

Are you building in potential portfolio growth between now and 73? But in general I agree, for most people worrying about things like RMDs and IRMMA is probably not going to be worth the trouble.

But for FBGs that have saved aggressively, it's worth looking into and, potentially, doing some planning. For the average American, not an issue at all (unfortunately).

And all we can do is plan using today's regulations. I'm 52, much of this stuff is 20+ years in the future, who the hell knows what the regulations will be at that time.

73? Probably not. And rmds for me is 75+. At least not aggressive growth. 59.5? Yes, for sure. Growth after that will be mainly from portfolio growth, not contributions. Plan is to live off IRA/401 from then on - filling up standard deduction and all brackets under 20%. Anything more that I need will be from HSA (for medical expenses and Medicare premiums) and Roth and brokerage.

My back of the napkin math is that rmds will only be an issue in this situation if I have over $2m pretax by then (possible), or huge growth markets after age 60 - either of which being a good problem to have.

 

[Steve Tasker]

Can anyone explain what the safe harbor rule is in a situation where I'm going to have large capital gains in 2025? To avoid under payment penalty?

Is all I have to do is make one early payment to equal over 100% of the tax I paid in 2024 and then keep the rest invested until April 15th 2026?

Essentially yes.

In order to have a protective estimate, you will need to pay in either 100% of your 2024 tax liability, or 110% of your 2024 tax liability (depending on your AGI and your marital filing status), in equal installments. You need to pay at least 25% of that projected liability by each of the 4 quarterly estimate dates. You can pay more than the 25% if you'd like, but you need to make sure you have 25/50/75/100 paid-in by the 4 quarterly estimate due dates.

If you want to do a one-shot payment to cover the full protective 100%, you'd need to make the full payment before April 15, 2025.

Hope this helps.

 

[Sand]

Yup, RMDs are why the traditional advice of burn through taxable accounts first, then traditional 401k/IRAs, then Roth isn't always best. Sometimes it's better to spend down the traditional accounts in your 60s or convert to Roth in your early retirement years so that you don't end up with RMDs much bigger than you need to fund your life, and the taxes that come with that.

Was just thinking about this. For me as it stands now, I'm gonna chew through most of my roth pre-65 to get obamacare subsidies. So come 65 and up until rmd time, I'm looking at mostly taxable income. This will certainly put me into the 22% bracket. I'll need to revisit what would be the rmd amount, but unless it puts me in the 24% bracket, I see no reason not just to wait until rmd time to do that conversion. You see a flaw in my thought process?

I don't believe you can use RMDs as the source for Roth conversions, if that's what you're asking. So you'd have to take out your RMD AND whatever you'd be converting, so that's definitely going to bump up your taxes.

The time to do conversions is when taxable income is lowest. Stuff the 12/22/24% bracket to the top, depending on where you are sitting. Ideally before you start taking SS.

Do you have already taxed/brokerage funds to use early on, at least in conjunction with Roth to keep you in the ACA sweet spot? I know a lot of people, and I'd still put myself in this category but I've been trying to address it, have most of their funds tied up in Trad/Roth accounts and not much in taxable.

You ever play around with one of these RMD calculators? According to one on the schwab site, if I was 73 now with a 2M trad balance, I'm only looking at an rmd of 75k. That's less than a 4% withdrawal rate. So filing as married, that's just in the 12% bracket. I know that balance is arbitrary but that doesn't seem like something to be too concerned about.

It goes up exponentially from there, though.

Ok, but even 2M at 83, its 112k.

Yeah, but when you're 102 it really starts to sting.

 

[NutterButter]

think in theory your balance should be going down too, no?

Possibly. But if average returns are 10%, your RMD doesn’t exceed 10% until you’re 94. Which is good, with some bonds and sequence of returns risk you don’t want to have to take 10% every year, but on average your account will grow into your 90s if you’re just taking RMDs.

Ok, if you're just taking the RMD it will keep going up. So I'd probably be taking than that and just donate it. Or just pay what I think would be the 22% rate. Seems like a good problem to have. Do you think a 10% return rate is something you'd be seeking in your 80's in beyond? I'd think something considerably more conservative as long as I can make it to that 100 mark comfortably. Its just kind of funny to me the idea of reducing taxes so that you have even more money that you don't need.

nother factor I don't see mentioned much is how long you financially plan to live. It take a lot less money to plan to live to 80 than it does to live to 100. I personally plan for the latter b/c i never want to run out of money.

Yep. And it’s even harder when you’re a couple, the lifetime of the oldest / last to die will almost always be at least a few years after the first.

My girlfriend is 3 years older than me so hopefully that condenses the male/female mortality gap a bit. It does complicate things. The easy plan for me was always to just use my house as LTC payment, but not the same option if there's someone else living there.