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all we need is our wills and our beneficiaries on all the accounts . we need no trusts ... we do have a specialized trust we can activate left over from the days when we needed to get around new yorks lower exclusion on estate taxes .
the wild card is healthcare costs which always have exceeded inflation adjustments..energy costs can shift on a dime . taxes can suddenly sky rocket . we saw that in the poconos when we were there, so the point is thinking the cpi will match any ones personal inflation rate is going to be a mistake assuming that . sequence risk never goes away anytime there is a negative real return .
We have almost contain that cost through two insurances. Maybe prescription drugs have gone up slightly. That plus vitamins, we take more vitamins. But not 5.5% or 7.5% inflation. Maybe much later but not now what key were both youngish retirees.
My sister doesn’t have a will even, but she told me she puts all siblings as beneficiaries for her retirement account. Her houses are even more troubling. I’ve talked to her about a case when she’s incapacitated and some one has to access money to pay bills but she seems to count on dying as the best solution, either that or she’s in denial. Anyway, I tried, won’t feel guilty if something like that happens and my hands are tied.
We have enough pretty safe dividend stocks right now (some are aristocrats, but not all) to generate about $3,200 a month in dividends that are currently being reinvested.
Hopefully we can continue to generate AT LEAST $2,000 a month in the future from that group of stocks even if their average dividend rate would drop to about 2.5% in the future. Most run from 3% to 6% right now, probably averaging around 4%, and about 30% are in a Roth accounts so no taxes to pay on those withdrawals once we start to use that money. I don't plan on using any of that money until age 70.5 when the stocks that are in traditional IRA's will require RMDs at that time. So the dividends will be reinvested another 7 years (around another $200,000+).
We have looked into LTC for both of us, unfortunately I do not think my wife will be eligible and I am a recent cancer patient myself so it may be iffy for me at least in the near term.
A few random thoughts. One unsettling thing we all have to face is the reality of our declining mental faculties and money management. Unfortunately multiple studies have confirmed one of the first things to go is the ability to handle finance.s In that regard you may wish to review this article:
The insidious thing is, there may be no clues that your ability to deal with financial matters has declined as the decline does not happen evenly across all are of cognitive functioning.
Given the above I certainly would look of divesting myself of individual holding in tax privileged accounts and rolling those proceeds into a low cost etf. There are many dividend centric offerings out there, if you wish to maintain that strategy. But this is certainly a much safer way to play the dividend strategy game.
Naturally what you do is up to you, but given. at present you seem to have excess cash flow I would look strongly at converting some of the traditional IRA to Roth. This is more a play on inheritance than anything. With a Roth your heirs will not have to pay taxes on the withdraw, but moreover they can take the RMDs on the inherited Roth based on their life expectancy, and once again those RMDs are tax free.
I would also look at gifting to my children while I can see them enjoy the money. I know a few people who actively worked at liquidating their estates in their own lifetime and mentioned it was one of the best decisions they ever made. The strategy they used was buying a annuity to fund play money and then annually gifted the remainder each year.
He has no children of his own, that’s what I meant by no direct heirs. They are probably nephews and nieces, maybe cousins. I wouldn’t pay tax money ahead for that kind of heirs, if they get any, let them pay tax. I would only prepay tax for my own children.
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. My hobby is expensive because I often incur losses
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