How the hell are we supposed to retire?

Patrick said:
yeah, don't under-live.
don't be worth more dead than alive.
those medical Dr University bills gotta get paid by someone!

Jim's plan does account for having money in an emergency, and I can vouch that he is not underliving.....
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Definitely, do not plan to under-live. If there is money left over great for the kids if not too bad for them 😀
 
I thought I had more in Roth than my Pre tax. Anyways I'm a little sad to see it 70% pre tax 30% Roth. I think it's because I started retirement account pre tax a couple decades ago and that money just grew and it substantial part of my account before I switched to Roth.
I'm having a hard time digesting the conversion options. Any resources?

Should I convert pre tax to Roth sooner rather than later nearing retirement? Shit I have many years still but taxes are sad. Shit I hope I'm not working by 60 and can get by until full SS. Shit life is short. It's kind of scaring me. A little context - I'm not working right now (not by choice). Does converting now have any financial benefit while I'm/we're definitely in a lower tax bracket?

I need to check on Mrs retirement too.

I have always preached Roth. Just keep it simple, cash out and enjoy
 
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THATmanMANNY said:
I thought I had more in Roth than my Pre tax. Anyways I'm a little sad to see it 70% pre tax 30% Roth. I think it's because I started retirement account pre tax a couple decades ago and that money just grew and it substantial part of my account before I switched to Roth.
I'm having a hard time digesting the conversion options. Any resources?

Should I convert pre tax to Roth sooner rather than later nearing retirement? Shit I have many years still but taxes are sad. Shit I hope I'm not working by 60 and can get by until full SS. Shit life is short. It's kind of scaring me. A little context - I'm not working right now (not by choice). Does converting now have any financial benefit while I'm/we're definitely in a lower tax bracket?

I need to check on Mrs retirement too.

I have always preached Roth. Just keep it simple, cash out and enjoy
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I'm not a tax expert but that seems to be the case. If you're out of work in a low tax bracket to do the conversion then. Even better if the market is down and you benefit from transferring while the value is down.

Big concern is being out of work, doing the conversion and then getting a job knocking you into a higher bracket during the year.
 
dvaidya said:
Yeah, that was the reason why some of the recommendation does not make sense to me. The scenario that I am struggling with:

Convert set amount from IRA/401K --> Roth
Pay for conversion taxes, LTCG and living expenses from brokerage account. With the first likely to come from cash saving if that makes sense.
Brokerage account likely to run dry after 5/6 years (very rough estimate)
I am going back and forth on where the taxes and living expenses are coming from after brokerage runs dry. Right now I am leaning towards letting Roth continue to grow tax free and live off SS and conversion/withdrawal which pays for taxes and expenses.

I am hoping whichever advisor that we pick will help provide clarity.
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Have you cranked through what your RMDs will look like? How much tax you are facing? I think you need a pretty big IRA or §401k to justify a big Roth conversion. I like annual Roth conversions that keep you in a low tax bracket. I question doing a Roth conversion that puts you into a higher bracket than you might face with an RMD.
 
THATmanMANNY said:
Should I convert pre tax to Roth sooner rather than later nearing retirement? Shit I have many years still but taxes are sad. Shit I hope I'm not working by 60 and can get by until full SS. Shit life is short. It's kind of scaring me. A little context - I'm not working right now (not by choice). Does converting now have any financial benefit while I'm/we're definitely in a lower tax bracket?
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I would say yes. Sooner better than later so it will continue to grow tax free. If you're not employed and in a lower bracket you might as well get some benefit from that because hopefully you won't be in a lower bracket again. Good Luck.
 
Fire Lord Jim said:
Have you cranked through what your RMDs will look like? How much tax you are facing? I think you need a pretty big IRA or §401k to justify a big Roth conversion. I like annual Roth conversions that keep you in a low tax bracket. I question doing a Roth conversion that puts you into a higher bracket than you might face with an RMD.
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Still need to crank through the RMD portion.
 
Yeah the conversion may be something you want to do towards the end of the year. The best thing is you get an awesome paying job and you don't convert, 2nd best is you don't convert as much to stay in the lower tax bracket.
 
THATmanMANNY said:
I thought I had more in Roth than my Pre tax. Anyways I'm a little sad to see it 70% pre tax 30% Roth. I think it's because I started retirement account pre tax a couple decades ago and that money just grew and it substantial part of my account before I switched to Roth.
I'm having a hard time digesting the conversion options. Any resources?

Should I convert pre tax to Roth sooner rather than later nearing retirement? Shit I have many years still but taxes are sad. Shit I hope I'm not working by 60 and can get by until full SS. Shit life is short. It's kind of scaring me. A little context - I'm not working right now (not by choice). Does converting now have any financial benefit while I'm/we're definitely in a lower tax bracket?

I need to check on Mrs retirement too.

I have always preached Roth. Just keep it simple, cash out and enjoy
Click to expand...
It really depends and there are no hard-fast rules. You pay the tax now (Roth) or you pay the tax later (pre-tax).

The idea behind pre-tax is you withdraw $X amount during retirement to stay within a certain tax bracket. Usually, this tax bracket is lower than during your earning years.

This is all stuff a CFP looking at your actual numbers is better for than spit-balling on an internet forum...
 
We have little $$$ in Roth accounts.

All of basic calculations I did, predict that converting to Roth is a wash and savings in future do not warrant this. (very little gain)

Will use Roth to live on for 4-5 years before Medicare to get all of the discounts.

I think taxes are unavoidable and once Federal Government gets serious about Deficit, they will tax everything, no matter what it is.
 
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