Mandatory Withdrawals - What to do with the money if you don't need it? (70+, move)
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Keep in mind extended care can cost upwards of $4000/month/each at some point.
If you feel really wild dump it in to mutual funds and hope for the best. Don't give it away now, invest it and designate charities to benefit after you are gone. They will be much happier to get lots more money later and you have a shot at better adult living facility care.
here in ny it cost 120k a year for the cheapest skilled nursing facility and that is today .
Keep the money. Unless you have $10+ million, you never know when you're going to need it. Stuff happens. Also, your kids, if you have any, will be very appreciative.
Of course, giving a prudent amount to charity is always a good idea too.
Mathjack, I believe you've posted about QLACs before....do you have a link handy for more info for the OP. Thanks
OP, this is not a new question on the board, I'm sure there are previous threads and posts discussing this.
So, perhaps you can go back and find those.
it is a tax issue . rmd's can really get you bumped in to not only nasty tax brackets , but get your social security taxed and your medicare premiums bumped up a lot .
so some people want to keep them lower until an age they feel they may just already be dead .
however the qlacs can turn nasty at 85. they use an accelerated rmd schedule that can really hurt you if you do live that long . plus the odds of getting out what you put in are pretty slim at 85. don't forget at 85 you may even be filing single now because of the loss of a spouse .
i am not a fan of qlacs for those reasons . it can be a poor use of the money if you first get it at 85 and it can have severe tax implications down the road if you wait until older ages .
OP, my plan is to just get as much into a Roth as I can.
Once it's too late for that, years from now when RMDs kick in, I'll just put the money into a taxable account.
Unless a person is willing to get more involved in accounts and investment vehicles that are more complicated and intricate than I'm interested in (or think I'll understand) -- a taxable account is the only -- or at least simplest place to put RMDs once a person is retired and not working anymore.
Personally, I figure if I can keep the money or the growth on it -- tax free until 70 1/2 -- I'm good with that.
IF, IF I've done due diligence over the years until then (with other planning), perhaps paying taxes at that point won't be so bad -- or negatively affect me in too onerous a way.
Again, I think it's pretty clear the OP was looking for ideas of what kind of tax deferred or tax-free accounts he could put RMDs into -- NOT just general ideas -- like give them to charity -- about what to do with them.
it is a tax issue . rmd's can really get you bumped in to not only nasty tax brackets , but get your social security taxed and your medicare premiums bumped up a lot .
SS is taxable once combined income is over $25k. That's a low bar to try to avoid. Medicare premiums are relatively low taking into account that the people involved in this scenario (i.e. rich people) can easily afford the premium without blinking.
You and a spouse each give 14K to a son or daughter and their spouse. That makes it 64K.
It does? I don't think the IRS would agree with you. But then again, I don't think an elementary school child would agree with you either.
But what do I know; I went to school and learned arithmetic in Florida and we have horrible schools down here (along with everything else you don't like about the state).
BTW, that annual exemption (which only applies to whether you tap into the estate's lifetime exemption) has gone up to $15k beginning this year, rather than $14k. That still doesn't bring you up to $64k in your example above, but at least it brings you closer, lol.
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