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Old 07-03-2025, 09:28 PM
CoachKandSportsguy CoachKandSportsguy is offline
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Quote:
Originally Posted by GWilliams View Post
With RMD their income will increase and the IRMAA will cost them extra premiums for Medicare for the same service as others. Why pay more for the same service?
Not disputing that, nor the tax consequences. Not disagreeing at all.

First, to wake up one day and say, "Oh NO, I have RMDs and a big tax bill coming" means that you you haven't done any financial planning to minimize the taxes, and so at the last minute, you don't have alot of options.

Second, to then want to invest in real estate as a landlord, with apparently no experience, just for the income deduction for passive losses, which comes primarily from the larger portion of depreciation, that is a risky venture.

Why? because there is alot of work, especially people as they get older, and there can be "high risk" tenants, which may cost you more in cash than in passive loss write offs. . .

So the answer is to figure out how much to convert to a ROTH or just cash out of the IRA, and pay a one time tax, albeit at the higher incremental rate, and then you don't have to worry about IRMMA, and NIT, etc. . but you still have to pay taxes to avoid the future taxes.

So if you do the math, as a married couple just collecting SS at the max amount, one doesn't have to worry about IRMMA NIT, etc unless your IRA is greater than about $3 M, based upon the current 2024 tax schedules, and growth and withdrawal rates

So is someone just waking up to the RMDs, and panicking unnecessarily because one hasn't done the financial planning out 20 years by year? although he may have to pay increased taxes, but not increased increased taxes?

See a tax professional to do some basic financial planning. . . and yes, capital gains tax may be lower than one's income tax rate, or it may be higher, uncertain for now