U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-13-2016, 05:55 PM
 
Location: Close to an earthquake
890 posts, read 679,554 times
Reputation: 2390

Advertisements

Quote:
Originally Posted by luv4horses View Post
My situation is that while my retirement income is modest, I had part of my retirement funds "stored" in a piece of property, and needed to sell it. When you do that, whammo, you lose 30% through capital gains taxes, then you have at least a year (if not forever) of higher medicare costs. It's not as if you can sell a few square feet of land every year from the tract you bought, so as to stay in a lower tax bracket. I guess the same would be true if you collected art or classic cars or anything tangible that can only be sold in its entirety, thus throwing you into a high bracket with all of these additional surcharges. This is another example of how retirement planning is hard to do, since the tax processes keep changing. And once you are retired, you might not be on the lookout for this information, so thanks to all the posters with this info.
Note for education purposes - while difficult to structure because the buyer's needs may not be compatible, there is the time-tested installment sale method whereby your gain is taxed as you receive principal payments. It's one way to spread the tax bite out over several years. Again, difficult to structure if the buyer's needs are incompatible with yours.
Reply With Quote Quick reply to this message

 
Old 01-13-2016, 07:31 PM
 
30,183 posts, read 47,410,509 times
Reputation: 16119
Quote:
Originally Posted by HappyTexan View Post
Get it all moved over to the Roth by 62.
Then pray no new laws happen from 62 to 65
Easier said than done when you have income that puts your tax rate very high--
We did that with three IRAs--two of his into one Roth and only one I had--but income dictates when that is really feasible...
Just because you see the value of future Roth doesn't mean you can do it whenever you want
Reply With Quote Quick reply to this message
 
Old 01-14-2016, 06:27 AM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,956,950 times
Reputation: 6718
Quote:
Originally Posted by loves2read View Post
Easier said than done when you have income that puts your tax rate very high--
We did that with three IRAs--two of his into one Roth and only one I had--but income dictates when that is really feasible...
Just because you see the value of future Roth doesn't mean you can do it whenever you want
Even if you're not in a very high tax bracket - sizable Roth IRA conversions can get you there pretty fast. Not only because of progressive tax rates - but because of phaseouts of exemptions and deductions - and limitations of deductions like medical expenses to a % of one's income.

Like you - we converted 2 smaller IRAs into Roths when Roths first came into existence in 1997 (got the benefit of spreading the taxes over a 2 year period) - but left one large rollover IRA (from an old pension plan) untouched. I check and see whether it makes sense to do a partial conversion every year - and it doesn't (except for very small amounts of money which pretty much wouldn't make a dime's worth of difference). I'll be taking RMDs in a couple of years - and have pretty much structured our taxable accounts so that the RMD income will be just about our only taxable income (except for Social Security). So it's not going to hurt significantly.

When it comes to the Medicare surcharge - married couples have it much better than singles because of the higher income limits. My father - a single - has had to pay surcharges for quite a while now. Because of taxable annuity income over which he has no control. He is in the "medium" surcharge bracket. And his surcharges for Parts B and D went up a total of about $45/month this year (to a total of $243.60 for Part B and $32.80 for Part D - note that the latter is all surcharge - not premium - which is separate). It's honestly not a bad problem to have - as far as problems go. Robyn
Reply With Quote Quick reply to this message
 
Old 01-14-2016, 06:39 AM
 
71,873 posts, read 71,942,576 times
Reputation: 49418
in our case we just wish the sale went through one year sooner , in which case it would have had no effect on medicare since it was a one time event . but we had no control over that so it is what it is .

they still owe us some money to be paid in full in 2017 but no where near the initial sale so while we may get hit a little in surcharges it won't be at the highest level . .
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top