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.

 

[alldodge]

Agree start as soon as you can, even $10 a month will add up over 30 to 40 years

The issue I'm running into now is who to trust to execute our wishes. Can do a firm but they can charge up to 10% of the total. Getting family involved they see the money and next thing you know they are at each others throats.

Have a dear friend you trust fully but they do not have the gray matter to understand what your asking them to do.

 

[nola mike]

Agree start as soon as you can, even $10 a month will add up over 30 to 40 years

The issue I'm running into now is who to trust to execute our wishes. Can do a firm but they can charge up to 10% of the total. Getting family involved they see the money and next thing you know they are at each others throats.

Have a dear friend you trust fully but they do not have the gray matter to understand what your asking them to do.

I tell my children every day that my inheritance is only going to one of them. So we have a contest every day as to who the favorite child is. (And if either of the children die under suspicious circumstances, that's a disqualification). My mother is appalled. As far as actual financial advice, it's incredible how much saving early helps you later on. The amount of money I've saved over the last 30 years by buying older stuff, and fixing it myself is close to a million dollars.

 

[alldodge]

I'm not leaving to kids, only grand and great grands