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  • Originally posted by Tangler View Post
    Ok, sorry for my ignorance, but what exactly does IRMAA stand for and when does it bite you in the rump?

    I googled and it says:

    income-Related Monthly Adjustment Amount

    The Medicare Income-Related Monthly Adjustment Amount (IRMAA) is an amount you may pay in addition to your Part B or Part D premium if your income is above a certain level.

    Is this something you only pay when you are on medicare? What if you do Roth conversions prior to medicare?

    I am trying to get a little less stupid when it comes to taxes. I purchased the 2022 edition of taxes for dummies by Eric Tyson et al.

    Like fertilizing the concrete but I am trying to educate myself.
    https://www.fiphysician.com/irmaa-2021/

    Comment


    • Originally posted by Tangler View Post
      Ok, sorry for my ignorance, but what exactly does IRMAA stand for and when does it bite you in the rump?

      I googled and it says:

      income-Related Monthly Adjustment Amount

      The Medicare Income-Related Monthly Adjustment Amount (IRMAA) is an amount you may pay in addition to your Part B or Part D premium if your income is above a certain level.

      Is this something you only pay when you are on medicare? What if you do Roth conversions prior to medicare?

      I am trying to get a little less stupid when it comes to taxes. I purchased the 2022 edition of taxes for dummies by Eric Tyson et al.

      Like fertilizing the concrete but I am trying to educate myself.
      Look at Vagabond's link to the FiPhysician article. Medicare has a secret tax called IRMAA. Your premiums jump significantly based on income from 2 years ago. This effects Part B and D. The rates really jump up a lot. I am currently paying around $650/month for hospital COBRA. I expect when I go onto Medicare my premium will be higher than this due to IRMAA, part B and D with traditional Medicare.

      Comment


      • Great article. Thanks for the link.

        So adding to me plan for IRMAA and RMD and SECURE ...

        0. Build cash fund five years prior to retirement to access to support cash burn and Roth conversion plans.

        1. Pensions elect to have contingent survivors of next gen and defer to max time allowed.

        2. Roth conversions per 65. Maximize to 24% income bracket to minimize RMD

        3. Donate RMD directly via QCD -- up to 100k a year - need to directly donate - Counts toward RMD and no AGI affected!

        4. QLAC to kick RMD down the road and IRMAA cliffs - up to 20% of IRA and can name beneficiaries.



        Boy this is getting fun and far away from KISS at age 60 retirement pull all levers.
        Last edited by StarTrekDoc; 12-30-2021, 09:08 PM.

        Comment


        • Originally posted by StarTrekDoc View Post
          Great article. Thanks for the link.

          So adding to me plan for IRMAA and RMD and SECURE ...

          0. Build cash fund five years prior to retirement to access to support cash burn and Roth conversion plans.

          1. Pensions elect to have contingent survivors of next gen and defer to max time allowed.

          2. Roth conversions per 65. Maximize to 24% income bracket to minimize RMD

          3. Donate RMD directly via QCD -- up to 100k a year - need to directly donate - Counts toward RMD and no AGI affected!

          4. QLAC to kick RMD down the road and IRMAA cliffs - up to 20% of IRA and can name beneficiaries.



          Boy this is getting fun and far away from KISS at age 60 retirement pull all levers.


          Good points:

          Lots of abbreviations here. Just to make sure I follow you and understand this stuff (at least a little).

          IRMAA = The Medicare Income-Related Monthly Adjustment Amount (good article, Another reason to minimize AGI. thanks!)

          RMD = required minimum distributions from IRA (individual retirement account).

          SECURE = SECURE act = Setting Every Community Up for Retirement Enhancement act (I will need to read about this) ( summary?)

          AGI = adjusted gross income

          QCD = qualified charitable contributions.

          You can donate (QCD) your RMD instead of taking as income to decrease AGI so you don't have to pay IRMAA!

          QLACs = qualified longevity annuity contract.

          A qualified longevity annuity contract (QLAC) is a type of deferred annuity funded with an investment from a qualified retirement plan or an individual retirement account (IRA).

          A QLAC annuity provides guaranteed monthly payments until death and is shielded from downturns in the stock market.

          A QLAC allows for a transfer of IRA funds to be used to purchase the annuity.

          Since a QLAC is a deferred annuity, the product allows distributions to be delayed until a future date but no later than the person's 85th birthday.

          In other words, the amount that has been transferred to buy the QLAC doesn't have any required minimum distributions until the predetermined payout date for the annuity

          HSA = health savings account; also good to decrease AGI.
          Last edited by Tangler; 12-31-2021, 07:23 AM.

          Comment


          • Wow! Lots of stock heavy portfolios. Love it!
            I’m mid-50s, late to medicine (3rd career), my AA is approx 80/5/15 - stocks/bonds/REITs.
            Stocks mostly invested in small and mid-cap value index funds and water index funds, and lesser amounts of CRSPR stocks and a few other oddballs.
            Saving aggressively (~45%) as i really didn’t start saving for retirement until about 4 years ago.
            Still have a LOT of federal student debt and am on track to get PSLF in about 3 - 4 years, which is also about when I plan to semi-retire and go half-time. Should squeak by, per usual. 😬

            Comment


            • My number one rule when doing taxes is don’t go over the cliffs. My second rule is steer clear of the phase outs if at all possible since they usually mean you’re stuck with a pretty massive marginal tax rate. This is what I try to do with the Sec 199A deduction - go Roth as much as possible but take enough pretax deductions to stay under the phase out range if at all possible. You really have to track everything.

              Comment


              • For those of you doing Roth Conversions, do you wish that you used a Roth 401K (if that were an option)?
                I know the math works out the same, if the tax brackets are the same... (and usually you will be lower by retirement...) but if they do away with Roth Conversions... and if they do away with BD Roth or MBD Roth... should we be thinking about Roth 401Ks?

                Comment


                • Originally posted by SLC OB View Post
                  For those of you doing Roth Conversions, do you wish that you used a Roth 401K (if that were an option)?
                  I know the math works out the same, if the tax brackets are the same... (and usually you will be lower by retirement...) but if they do away with Roth Conversions... and if they do away with BD Roth or MBD Roth... should we be thinking about Roth 401Ks?
                  As I’ve mentioned in previous posts I’ve been working part-time since 2012 and began contributing to a Roth 401k soon after. 2018 was a banner year for me as I amended my 401k to a custom plan that let me use the MBDR and also started Roth converting my pre-tax account. Also the 199A deduction became a reality making this process more beneficial. I am probably one of the few here whose Roth is actually > than my pre-tax. While I would have a larger portfolio if all retirement $ were pre-tax except for the BDR, my taxable: Roth: pre-tax ratio is now roughly 40:35:25 which gives me a tremendous amount of flexibility in how I meet expenses in retirement. Even with the aggressive Roth contributions/conversions I still have more than enough and consider myself fat if not obese FI. I am happy with my choices and am a big fan of Roth accounts.

                  Comment


                  • Originally posted by SpacemanSpiff View Post
                    Wow! Lots of stock heavy portfolios. Love it!
                    I’m mid-50s, late to medicine (3rd career), my AA is approx 80/5/15 - stocks/bonds/REITs.
                    Stocks mostly invested in small and mid-cap value index funds and water index funds, and lesser amounts of CRSPR stocks and a few other oddballs.
                    Saving aggressively (~45%) as i really didn’t start saving for retirement until about 4 years ago.
                    Still have a LOT of federal student debt and am on track to get PSLF in about 3 - 4 years, which is also about when I plan to semi-retire and go half-time. Should squeak by, per usual. 😬
                    Why no total market funds ? Large cap?
                    I would consider diversification / simplification by adding a total market fund & total international market index fund. Do you have any international?
                    Many “predict” (Vanguard etc) International will do well over the next 10 years and they recommended 30-50% international. I keep waiting for international to be worth it but i would not have zero.
                    Also, I would start building some cash (cash bucket for SORR) or have some other plan for SORR if 3-4 years out.
                    Water index funds? Single stocks? Late start & 3-4 years until retirement? Sounds a little risky (i could be wrong), and i would consider adding some VTI (VTSAX) & VXUS (VTIAX).
                    Last edited by Tangler; 01-02-2022, 03:35 AM.

                    Comment


                    • Originally posted by SLC OB View Post
                      For those of you doing Roth Conversions, do you wish that you used a Roth 401K (if that were an option)?
                      I know the math works out the same, if the tax brackets are the same... (and usually you will be lower by retirement...) but if they do away with Roth Conversions... and if they do away with BD Roth or MBD Roth... should we be thinking about Roth 401Ks?
                      I did a Roth 401k the year I worked for my local hospital prior to total retirement. I actually managed to max it out for 2 years with catch up working there for 11 months because I started August and retired the following July. I think it makes sense to diversify the retirement accounts while you work.

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                      • Listened to a lecture by David Swensen that was just brilliant. what an educator!!!
                        Its on YouTube. 1 hour and 11 minutes
                        maybe someone can post it

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                        • Comment


                          • THANKS. KAM. PLEASE LISTEN TO David Swensen. A Real EDUCATION

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                            • Originally posted by Tangler View Post
                              Why no total market funds ? Large cap?
                              I would consider diversification / simplification by adding a total market fund & total international market index fund. Do you have any international?
                              Many “predict” (Vanguard etc) International will do well over the next 10 years and they recommended 30-50% international. I keep waiting for international to be worth it but i would not have zero.
                              Also, I would start building some cash (cash bucket for SORR) or have some other plan for SORR if 3-4 years out.
                              Water index funds? Single stocks? Late start & 3-4 years until retirement? Sounds a little risky (i could be wrong), and i would consider adding some VTI (VTSAX) & VXUS (VTIAX).

                              Sound advice, thanks. I am being somewhat aggressive due to starting late, unfortunately. I also have a high risk tolerance and don’t mind letting it ride during downturns. I’ll probably put a lot of my new taxable investment into a total market fund, like the ones you mention. The water funds have been some of my most consistent returns. It’s somewhat a play on climate change impacts on water supplies, which are going to increase in severity over the near and long term. I invest in CGW and PHO, and in an individual company I like, CWT.

                              With regards to international funds, I’ve never seen the appeal and their performance has never been that great. The way I see it, if the US economy is doing well, then US returns will exceed international returns. And if the US market is doing poorly, then all markets are likely to be doing poorly. Maybe I’m missing something, but have never seen a really convincing argument for international. Also, a lot of US companies in the indexes have international interests, and actually, the water funds have some portion of their assets in European and Asian companies, so I guess I am still getting a small bit of international exposure.

                              Also, was 100% stocks until recently. Wrote up my financial plan recently and have been rebalancing to include bonds and REITs. Trying to diversify a little.

                              I’m definitely trying to stockpile a bit of cash too.

                              What is “SORR”? Thx!

                              Comment


                              • Originally posted by SpacemanSpiff View Post

                                What is “SORR”? Thx!
                                SORR=Sequence of return risk in reference to market crashes near a retirement date. It affects longevity of funds. Here is a link with more detail than you may want. https://earlyretirementnow.com/2017/...f-return-risk/

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