Wow!

- All kinds of free dinners and
outings.
- Support lots of local
charities.
- "... they paid us!"

And "no fees ever".

SMH

:bigbow:

Fiduciary: A Salesperson who Promises Not to Steal Your Moneyhh
 

Everyone in the Financial Community these days is a fiduciary. It has become a meaningless term. Sure, it's necessary condition - but far from sufficient. CFPs are not far behind.

Good financial planning is spending your last dime with your last breath.

Because you have been handling your own investment decisions, it could be that it will not be easy for you to turn over those decisions to someone else. And it does not sound like you want to do that anyway. I understand. (I speak from experience.)

As I am sure you well know, the bull market has been running since 2009, with a short dip in 2020. Therefore, any advisor should be able to claim terrific returns over time. But if you have been in the market for decades — which you probably have — you know that no matter that the famous philosopher Mick Jagger says, “Time Is On My Side” — well, at this point in life -- it most certainly is not -- so if you have been trusting your own investment decisions for a long time, you might want to continue doing just that — with a backup plan, just in case.

BUT, for the advice you need on what to take, from where, and when to do it, I would suggest a good CPA, perhaps one who is also approaching retirement.

That is what we did. He advised spending taxable money first and letting tax-deferred accounts continue to grow. We also went ahead and took SS earlier rather than later — and that also protected the tax-deferred accounts. (*We have never regretted that decision but that does not mean others should do the same thing. The SS decision has to be completely individual.)

Eventually though, the time comes to pay the piper with the RMD. If the retirement accounts have grown enough to throw Medicare costs over the threshold into IRMAA, then you need to do more math to see what it’s worth to cross that threshold. It could be that it is worth it to understand what using a QCD for part of your RMD can do to keep your Medicare premium down.

IRMAA can sneak up on you. As I understand it (and I am not an accountant) a really aggravating thing about IRMAA is that if you cross that AGI threshold by even a few dollars, IRMAA shows up and takes a big gulp. It is not like tax brackets.

The IRMAA threshold is high and not a lot of retirees will be concerned about it, but with more than a decade’s growth of the market, people might find themselves sitting on a big RMD — year after year. For some, there might be no way around IRMAA, but I include it here because long-time, successful investors, in particular, need to be aware.

After retirement but before the RMD, we put our employee retirement accounts into IRAs. We also began doing conversions to Roth when the tax bracket made it sensible to work those in. There are times when it can make sense to go ahead and take a tax hit before you have to.

I had a wonderful accountant through those decision-making years, but he is no longer with us. I miss him. He used to talk about “trying to free your money from its prison” when we commiserated about the eventual tax hits on retirement accounts and how to best navigate those.

After all these paragraphs I just wrote — (sigh) — I should have just said sit down with a CPA who is about your age. (The reason I say the age thing is because our last two CPAs were in the same boat as us, but now a whippersnapper has taken over the business and I have had to teach him a couple of things — like how the methods of doing a QCD can vary depending on where the accounts are held.)

Boomer

We were where you are
 

We were not sure we were making the best choices. We met Samantha at Fidelity and she walked us through every facet of the transition from working and saving to using and preserving those savings. We had talked to other advisors but they always charged for nothing or wanted to sell us something. Fidelity does not do that. The process should be something that you are comfortable with. Anyone who says "don't worry about it, we will handle everything" is the one to walk away from!!!

This is all great advice and I will look for a good CPA. I'm very grateful that you took the time to write the full post - I learned some new acronyms and I think the better educated I am the more productive a meeting with a professional will be. Thank you Boomer!

And don't forget: Fly first class -- or your kids will.


Seriously,
Boomer

And use up your frequent flier miles!

1st class both ways and a private driver from the airport to my Village home!