OT: IRA RMD

It could happen if all your money was in the stock market and it crashed right after you died. Taxes are due on value when you died. It has happened to widows in the past that by the time they were ready to collect taxes were more than inheritance.

Are they still advising that considering the new Inherited IRA rules?

That also assumes that there actually are non-qualified assets to spend down. Many *many* people spend/spent what they need to live on and put the rest of their income into qualified accounts. When they retire/retired, those qualified accounts are all they have.

I guess that would depend on what your overall income is. If you can keep your LTCG taxes in the 0% bracket, sure. But if you end up in the 15% LTCG tax bracket, you might pay more than if you just took the IRA money as income.

Of course, you might be able to offset some gains by selling assets that have a taxable loss. Like I said, it depends. I don't think that there is one strategy that fits all.

How rich were those widows and when did it happen to them?

Currently, if the estate is less than $11.7MM there is no estate tax.

I don't know how it would work tax wise, but most everything in IRA and stock market accounts are in my name with the wife listed as joint ownership with right of survivorship. Or some such wording. That lets us avoid some of the county and state fees and taxes. Should simplify the paper work.

If the estate limit is 11.7 million then they should have advisors as to how to handle things so they don't pay much tax. Seems that if one has lots of money there are often ways around things.

While my dad did not have much money and mother had already passed, I spent about an hour with a lawyer on what to do with dad as dementia had started to set in and I was going to have to handle things. At that time there were many things that could be done to keep the majority of the money. As dad was a WW2 veteran and there is a large VA hospital in town I was able to get him in it.

On Fri, 6 Aug 2021 22:55:07 -0400, Ed Pawlowski posted for all of us to digest...

You can send it to my 501c3

My guess is that the IRA's are in your name only and she is listed as the Primary beneficiary at 100%.

The first part isn't a guess, it's a fact. IRA's, 401(k)'s, and other retirement accounts are based on a single SS# because of the tax structure.

Your spouse is probably listed as the only Primary beneficiary, set at 100%. If she is still alive when you die, she gets 100% of the assets. But while you are alive, they are not in her name and she would have to be listed as a Power Of Attorney to have any sort of control over the assets.

The non-IRA accounts could be Joint with rights of survivorship. If you say that they are, I have no reason to doubt you. ;-) Unlike the IRA's, she has as much control of those assets as you do.

However, I'm a tad confused by your use of the words "stock market accounts". Stocks (and bonds and all sorts of assets) can be held in IRA accounts, joint accounts, trust account, single accounts, etc. What is it that you are calling a "stock market account"?

That's where a POA would have helped. Many people don't realize how important it is to have POA assigned to their retirement accounts. Sure, if you die, your wife gets your assets almost instantly. But what if you just get really sick, like coma sick, and your wife needs funds for your care or her living expenses? If no one is assigned as the POA, those assets can't be touched by anyone else but you while you are alive or until a court ordered POA is assigned. That takes time, effort and money during an already stressful period.

My wife is assigned as the POA for my retirement accounts and I am her POA. Technically, she could wipe me out as soon as my advisor's office opens on Monday, but I have faith that my advisor wouldn't just issue a check. His first responsibility is to me as his client and he should (will) take the effort to find out if I really want her to withdraw all my assets, even though she is technically allowed to. After all, I signed the POA, giving her permission.

I don't understand all the tax and IRA rules that well. My wife has her name on the IRA as what ever it takes to get it directly to her if I die. I do most everyting with the money as my wife does not understand how it all works. I just show her the statements at the end of the month so she knows about how much we have.

For the stock market, I have a seperate stock market account with Ameritrade that is not connected to the IRA. It is about 7 % of what we have in an IRA. Just a small amount that I like to play the market with to see if I can do any good. Sofar I am doing ok with it. Sort of day trading even though I may trade only once a week or maybe even go a month before trading. Sometimes it has been about every other day. Mainly on one to 3 stocks I follow that make 2 to 5 % jumps almost every day up and down.

Yes, I tried to put everything in both our names in a way that if either passes away the account will go directly to the other. I realise that either of us could take all the money and run, but at our ages (over 70) I doubt it would hapen. We do have all the POA on each other for medical and financial dealings.

I bet most people only have one 401k and they have little control or even knowledge of how it is invested. I think the treatment of tax deferred money will only get worse so that is not my main investment vehicle.

I wouldn't mind if I bounced that check at the undertaker. Without sounding cruel it is very likely I will outlive my wife.

The reality is the medical establishment will get it I suppose but I will try to avoid that. I have seen a lot of "dying of old age" and I want no part of it. If I find myself alone, looking at the end, I am pissing all my money away on hookers and blow ;) I hope the paramedics pronounce me at the scene.

That is when you will see a real insurrection, not fat people with signs and face paint.

That is what most of those "medical bankruptcies" that the left talks about are all about. In order to get Medicaid to pay for your nursing home, people divest themselves of most of their assets and give the rest to their nursing home bill. There are lawyers on TV around here telling you they can get around the "5 year rule" and "10 year rule" so you can convey some of your stuff before you declare yourself broke enough for Medicaid.

I am punching out before I do all of that.

The problem is there are huge jumps when you cross some of those thresholds. A prime example would be Obamacare (before the last tweak). There was a pretty narrow range of income variance that decided whether you got free Obamacare or if it cost you over $1000 a month, per person. The tax code also has cliffs like that like when you are exempt from Cap Gains taxes. When SS gets taxed etc.

Not true. It is true that the tax itself is only on the overage but you also lose tax breaks on other income.

Hard to say about "most people". Both my husband's and my 401k can be invested in anything from individual stocks, mutual funds, annuities, all the way to a portfolio selected by the outfit that manages my 401k. I do that last thing, because their picks generally beat the market.

Cindy Hamilton

Not a good investment strategy to have a tax-deferred vehicle (annuity) inside another tax-deferred account (401k).

As with many things in life, "it depends". There is more than just tax-deferral to consider, specifically, retirement income.

There are pros and cons for holding an annuity in a 401(k). Granted it's rare for a company to offer them and even rarer for people to actually use them if offered. However, it can be a good strategy in certain situations.

Although if your AGI is over $441,450 (single), $496,600 (married) _all_ of your long-term capital gains will be taxed at 23.5% instead of

You would lose that bet. Most people don't have a 401k at all.

Where I worked there was a 401k and only about 45 % of the workers had it. The company would match a certain ammount. This is a plant that had about 2000 people in it at the time. About 1700 of them were just ordinary factory workers with probably high school education.

We had about 5 choices of where to put the money. Could be in a money market type or several kinds of stock mutual funds type, or could be split among the funds . The money could be shifted from one type of fund to another if you wanted to at most any time.

The company also had a good pension fund for a good number of years , but another company bought it out and for those not vested the people got an average of $ 10,000 pay out each depending on how long they had been working and no pension .