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  • #16


    You can’t possibly have a bunch of clients who you have gone through this cycle with since you aren’t a vampire and thus are aging as they age.
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    lol, that is really funny. What I said was that few people have the discipline to fund the taxes for later drawdown. That is my experience bwah ha ha ha haaaa


    fear of tax changes is a bad method.
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    I agree. That is not my method, either. We all must base our advice and decisions upon current knowns and make our best guesses about future unknowns. I'm not even sure we can call them educated guesses. I base my recommendations upon the following:

    • Roth IRAs, imo, will not be available in the future, at least in the current form

    • Few people segregate and invest the tax savings from 401k and other tax-deductible contributions to pay future tax liabilities on said deductions and the growth thereon

    • Too many unknowns affecting any one individual's future tax rates at drawdown. I prefer to be conservative and overestimate rather than underestimate tax liability.


    I happen to believe that savings in Roth IRAs up to a certain point will never be taxed i.e. that the government will notify taxpayers and their advisers that taxation will be phased in over a certain period beginning at x date in the future for x taxpayers (based on certain parameters) but obviously that is my personal speculation. Only time will tell.

    Of course, our clients are free to disagree and we have this discussion - how much to fund pre-tax and how much to fill the Roth portion of their 401k when we are fleshing out tax planning. I am not the dictator, merely the advisor.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #17


      And if the ACA replacement allows untaxed transference of RMDs to HSAs, coupled with inherited HSAs it will be the mother of all tax shelters, drastically reducing the benefit of Roth conversions and early Roth 401k contributions.
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      Let's not forget that the money still must be used for qualified healthcare expenses or distributions are taxable. Same for inherited HSAs by spouse. Any other beneficiary and distributions are taxable regardless. Inheritance before age 65 if used for anything besides healthcare gets a 20% penalty on top.

      Roth IRAs have no such restrictions.
      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #18
        All true, but health care costs make up a large component of retirement costs.

        Worse case scenario, you find you don't need all your HSA funds for health expenses (and the rumored definition of eligible expenses is also dramatically expanded):

        1). You pay the tax, same as you would have with you RMD, just delayed via an interest free loan from Uncle Sam or...

        2). You pass on to your heirs. We will soon see the details of the new plan, but it might very well allow tax free qualified distributions for heirs as well. Again, worst case is years of delaying paying the taxes based on the stretch rules that apply. We shall see. If these become popular (similar to 401ks), it may be politically difficult to roll back any of these changes.

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        • #19
          Sure, I was just pointing out that the Roth would still be the mother. Could the new, improved HSA be the step-mother?
          Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #20




            Sure, I was just pointing out that the Roth would still be the mother. Could the new, improved HSA be the step-mother?
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            Yes.  Why buy the Roth cow now, when you can wait and possibly get the milk for free.

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            • #21







              Sure, I was just pointing out that the Roth would still be the mother. Could the new, improved HSA be the step-mother?
              Click to expand…


              Yes.  Why buy the Roth cow now, when you can wait and possibly get the milk for free.
              Click to expand...


              MOOOOOOOOOOOOOOOOOOOOOOOO
              Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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