Educational Materials when planning income and taxes before retirement
Can you direct me to books/sites/materials so that I might plan efficiently? I feel I need a plan before reaching age 65 when there might not be time to react. I am 63. IIRMA at 65 is calculated on this year’s return. I just learned this. Reading about IIRMA and the impact of just $1 over the threshold is an eye-opener. Hence my decision to work on planning. The detail below is so you know my situation and can provide better guidance.
My portfolio is 58% in retirement savings and 39% non-retirement. I converted some $ into Roth two years ago. (3%) My wife has an Irrevocable Trust (23% of the 39% non-retirement) and an inherited IRA (16% of the 401k/IRA value). At 72 we’ll need to take RMDs. For taxes, the non-retirement $ are predominantly in equities. When sold will be taxed at 15%. My HSA is growing and worth $45k at the moment. Where can I find the formulas and planning tools to help me make the best decisions when withdrawing funds? Especially in years when we might have a large expenditure? In that scenario, perhaps we want to blow by IIRMA’s $194K in a big way (but not to the next bracket) taking $ out of IRAs and moving them to non-retirement accounts. I have a financial advisor and a CPA. The financial advisor team is very good. But they don’t optimize. Their focus is on hitting the objective. The CPA, although I told her that the strategy is more valuable than filling out tax forms does the urgent but not the important tasks. Three tax returns, 5500 forms, and quarterly estimates were all done but little on the planning side. My advisor says he finds that is predominantly the case with CPAs. And i think she’s terrific but perhaps too successful.
As my dad says, “no one cares about your money like you do.” So here we are.
It’s a complex issue and will have many dependencies and ‘what if’ scenarios. However, I need to at least attempt some level of understanding. Last year I had a low-income year, by choice. My advisor did not take money out of IRAs (probably because of taxes but should we have?) and my CPA never mentioned another Roth conversion. (should that have occurred?) I was busy having fun and asked too late. The value of the portfolio currently sits at $5M. my wife and I will both receive Social Security. I’m maxed out. She is about 55% of mine.
I’m trying to hold annual household spend to $150K. But it’s looking more like $160k given a number of factors. We were paying too much for CPA services so now I’m taking that on.
I’m looking to work at least part time for the next 2-3 years. I started my own consulting firm (wireless communications. LTE/5G) in 2015.
If this is not clear, or you need more detail I’m happy to send more info. And I know, the tax laws are bound to change which means planning can only be what we know today. All my life we saved and put away. I thought that was the hard part. However, the good news is we have it so much better than so many. So regardless of what happens, we’re lucky and all will be well. But I’m one who has never liked going to the Dr. and having them say, “what you should have been doing….”.
Thank you very much. I know you’re very busy so as time permits…
Terry Says
OK, you have an “investment advisor” –to focus on your investments and a CPA to do your returns — but you don’t have an overall Certified Financial Planner, whose job is to come up with answers to all the issues you raised. In fact, it would be his/her job to RAISE those issues to your attention.
Unless you want to take the full course, I suggest a much easier solution. Use this link and get matched with a FIDUCIARY financial advisor who is trained to do this for you — for an annual fee — and who does not SELL anything to you, but puts your interests first.
Penny wise, pound foolish. Since you are so aware of these issues, its worth paying someone to work with you on the overall picture.
