Blog

Thoughts and musings from my desk to you.

Roth Conversions

Roth Conversions

IRAs, Tax Strategy

Roth conversions remain one of the most underutilized tax planning strategies around.

Imagine the limited benefits of continued tax deferral for a 90-year-old retiree with a $500,000 IRA and an income of $100,000 a year. That income is comprised of pension distributions, IRA required minimum distributions (RMD), and some dividend income. Let’s say she has two grown children in their 60s, each earning $600,000 a year in a 41% tax bracket. Since Mom’s tax bracket peaks at 24% (up to around $170,000 worth of annual income), it would make perfect sense for her to do annual $70,000 Roth conversions, whittling down her $500,000 IRA and avoiding that next bracket of 32% above $170,000 in gross income.

Read More
Estate Taxes & IRAs – Collision Course

Estate Taxes & IRAs – Collision Course

IRAs, Tax Strategy

There are very few tax issues more complicated than the intersection of estate taxes, income taxes, and IRAs. Very few couples exceed the $24million exemption amount to begin with, and even fewer get this part of their planning correct. If not navigated well, this confluence of factors can conspire to cause 80% of an IRA or 401k to be lost to taxes. There are solutions, including going back three years to amend returns if this causes an aha moment.

Read More

Gil's Musings

Learn about the world of investing from a 36-year industry veteran. Gil's Musings are inspired by Gil's thoughts on timely finance topics, stock market trends and the psychology behind smart investments.

Sign up to receive Gil's Musings directly to your inbox.

This field is for validation purposes and should be left unchanged.