Retirement Financial Planing

[alldodge]

Maybe a discussion on things folks have learned about planning.

I'm turning 70 this year and have looked into converting some of our IRA funds into Roth funds. Things I'll be doing;

• Conversion can only be done once you reach age 70.5
• Required Minimum Distribution (RMD) starts at age 73
• If you have individual stocks they can be cashed out and placed into a Donor Advised Fund (DAF)
• Using a DAF with cash stocks, it can carry over every year (30% of gross) until it is used up, and your not taxed on the capitol gains and there is no cost basis
• The DAF funds are locked into giving all to charity, if any are not used for charity there are large penalties
• Once you reach 70.5 no longer give any charity funds by writing a check, always send funds direct from your IRA because this comes direct off your gross and the standard deduction does not apply
• Watch the Medicare Adjusted Gross Income (AGI) when doing this because if you go $1 over it you will pay the next level for the next year. This is not the same as the IRS tax bracket
• When converting from IRA to Roth IRA paying the taxes with your bank savings is better because all the IRA funds go into the Roth. If you use the IRA conversion funds to pay the taxes means there is less funds in the Roth
• You have to keep the converted Roth funds in the Roth for 5 yr and each transfer starts a new clock for those funds

Have others done any research?

 

[alldodge]

I'm with Schwab and finding setup a DAF is best done with Daffy because this is all straight stocks, no bit coin or other things. Need to do an In-Kind transfer to Daffy. Setup DAF at Daffy and then do transfer.

Schwab and Vanguard charge higher fees and Daffy

 

[Jeff J]

Probably the most important thing is to start early. I know I wish I had started 40-45 years ago.