Your Selling Strategies (if you have one - Talking Taxable accounts)

[Like2Plan]

Added to all the above cliffs is that in the accumulation phase you are most likely planning a retirement horizon of 30-45 years for Two. But, actuary tables are not in favor of both spouses surviving the entire time horizon--A filing status of single would further lower the cliff thresholds.

[disneysteve]

[quote=corn18]Some important cliffs:

$68,000 MAGI - ACA cliff for MFJ in Ohio (varies by state)
$32,000 AGI - Social Security cliff for MFJ (when it starts getting taxed)
$174,001 AGI - IRMAA (Medicare) cliff for MFJ
$80,000 AGI - 0% capital gains cliff for MFJ
$80,250 - top of 12% tax bracket for MFJ (changes to 15% in 2025)

If you are just covering expenses in retirement then the chance of you hitting any cliffs are very low

I'd say 4 out of 5 of the things corn18 posted could be hit. Only the 174K Medicare one wouldn't be an issue for us.

[Like2Plan]

I'd say 4 out of 5 of the things corn18 posted could be hit. Only the 174K Medicare one wouldn't be an issue for us.

And IRMAA drops down to (above) $87K for a survivor filing single status:

https://www.medicare.gov/your-medica...s/part-b-costs

If you have a bunch of money in pretax--RMDs could put a single person into IRMAA territory where it might not have happened with MFJ status.

https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf (Note: this is the old tables with the 70.5 RMD age--I still don't know if they are going to update the RMD tables with the age 72 RMD change).

https://www.bogleheads.org/wiki/MAGI

[LivingAlmostLarge]

So we try to only sell losers. Currently we are in accumulation phase. So it doesn't make sense. We really need to wait until DH has a decrease in income (coming in March 2021). Or until we retire. If we continue on our trajectory selling crap is painful for us. Let's assume we have retirement income of $200k that's still for us a HUGE savings on taxes. So it does matter.

The question will be will we have enough to generate $200k or more a year like Singuy is suggesting that I don't care where we sell from? Answer is I don't know. I'll know more the closer we get to retirement because I don't know what our spending will be like until we get there.

We live a rather extravagent lifestyle. It's expensive wehere we've lived and I don't know if we'll stick around. We make a lot of money. How long will DH keep working? Will he always make that much? In the next 3 years if his startup takes off and we make even more money will we even be having this conversation? No.

We are in the bracket that Joe Biden wants to tax a lot. I'm okay with paying more. I'd rather be earning what we earn than earn less to pay less taxes. Something people don't get. Sure you pay a lot but boy it's hella nice to earn a lot of $$$. We paid 6 figures in federal taxes these past few years even after the TCJA. So yes I do feel it. Right now every paycheck I'm paying an extra $3k to the IRS so our bill next year isn't so outrageous. When DH's stock vests in November I'll get a better idea since we sell everything. We don't hang onto it because tying ourselves to the stock and job is crazy. We have paid more in taxes than we spend annually.

[disneysteve]

We have paid more in taxes than we spend annually.

This comment made me curious.

YTD taxes: $49,333
YTD spending: about $51,300 (I don't have the exact numbers in front of me)

So spending is higher than taxes paid but barely.

[LivingAlmostLarge]

This comment made me curious.

YTD taxes: $49,333
YTD spending: about $51,300 (I don't have the exact numbers in front of me)

So spending is higher than taxes paid but barely.

Do you know where you will end up tax wise and spending wise?

[disneysteve]

Do you know where you will end up tax wise and spending wise?

Not specifically regarding taxes. That spending figure is for 9 months so it should be 3 more months at that same monthly rate. I don't anticipate any big spending changes between now and the end of the year. We'll probably eat out even less than we do now since outdoor dining will become less likely as it gets colder.

[Singuy]

[QUOTE=disneysteve;n716097]

Some important cliffs:

$68,000 MAGI - ACA cliff for MFJ in Ohio (varies by state)
$32,000 AGI - Social Security cliff for MFJ (when it starts getting taxed)
$174,001 AGI - IRMAA (Medicare) cliff for MFJ
$80,000 AGI - 0% capital gains cliff for MFJ
$80,250 - top of 12% tax bracket for MFJ (changes to 15% in 2025)



I'd say 4 out of 5 of the things corn18 posted could be hit. Only the 174K Medicare one wouldn't be an issue for us.

Interesting, we would only hit 1/5 with our current expenses and that's with kids to feed, day care to put them in.

[corn18]

[QUOTE=Singuy;n716133]

Interesting, we would only hit 1/5 with our current expenses and that's with kids to feed, day care to put them in.

We will hit all of them but IRMAA if I manage my Roth conversions and RMDs. If I don't do any Roth conversions at all, I will hit IRMAA limits when I start collecting SS @ age 70. With Roth conversions, my "income" stays pretty constant at $108k from age 55 until I die.

[Singuy]

[QUOTE=corn18;n716134]

We will hit all of them but IRMAA if I manage my Roth conversions and RMDs. If I don't do any Roth conversions at all, I will hit IRMAA limits when I start collecting SS @ age 70. With Roth conversions, my "income" stays pretty constant at $108k from age 55 until I die.

Sorry I know you will hit them. I was referring to Disneysteve. But mainly I was referring to just living expenses vs RMDs. If RMD leave you hitting all the cliffs then I wouldn't say that's something to complain about. It's a good problem to have.

[disneysteve]

[QUOTE=Singuy;n716135]

Sorry I know you will hit them. I was referring to Disneysteve. But mainly I was referring to just living expenses vs RMDs. If RMD leave you hitting all the cliffs then I wouldn't say that's something to complain about. It's a good problem to have.

Sorry, I totally screwed up earlier. No, I don't expect our AGI in retirement to hit those numbers except the SS one. I have no idea what the ACA one is here in NJ so I can't comment on that one.

And RMDs won't be a huge problem for us because most of our money is in accounts that won't have RMDs.

[Like2Plan]

Sorry I know you will hit them. I was referring to Disneysteve. But mainly I was referring to just living expenses vs RMDs. If RMD leave you hitting all the cliffs then I wouldn't say that's something to complain about. It's a good problem to have.

Of course, if you could even out your income so that you don't hit any cliffs--that would be better.

[Like2Plan]

Interesting, we would only hit 1/5 with our current expenses and that's with kids to feed, day care to put them in.

I'm surprised you would only hit 1 out of 5. I would expect your portfolio would through off a lot of dividends and possibly capital gains even without selling anything.

[disneysteve]

I would expect your portfolio would through off a lot of dividends and possibly capital gains even without selling anything.

Capital gains is where we often get nailed in our taxable mutual fund accounts. Some years have been awful.

[kork13]

I'm surprised you would only hit 1 out of 5. I would expect your portfolio would through off a lot of dividends and possibly capital gains even without selling anything.

Individual stocks are not subject to taxes on dividends/CG so long as the shares aren't sold, no?