@AlmostThere2018 I would not count on the inheritance. End-of-life care can be really, really expensive. Of course you want him to have a long and healthy life, slipping away quickly and painlessly but, alas, it doesn’t necessarily work out that way.
@Iglooo
There are many similar sites, but you can read the following:
https://www.mysolo401k.net
The cap on the mortgage interest deduction is that you are limited to the interest on $750k of principal, unless you are grandfathered in with an old mortgage of up to $1 mil.
You may not be able to use the deduction if you can’t come up with more itemized deductions than the standard deduction amount, but it is not capped in the way that SALT are limited.
"How do you keep real estates in an IRA? I thought if you do, you couldn’t manage it on your own since that is equivalent to contributing cash equal value of your labor to IRA. "
It’s not always that tax-advantageous to have real estate in an IRA, because you can’t deduct things like depreciation, you can’t use leverage ( no mortgage), there’s no advantageous capital gains rate when you sell, etc. Doing it on a Roth fixes some of this if you can swing it.
And you theoretically can’t work on your own properties or manage them yourself, but this is very difficult to enforce of course because you don’t file any tax forms
SF Chronical review of Solo 401K Trust
http://www.solo401kexperts.com/wp/san-francisco-chronicle-reviews-ira-financial-group-solo-401k-press-release/
“there’s no advantageous capital gains rate when you sell”
Yes, but there is no tax due for capital gain either. The advantage is that if you flip properties multiple times, you need not pay any tax. If the property is outside of the 401K trust, IRS will tax you ordinary income if you flip houses frequent enough, at the minimum, you need to pay multiple capital gain tax.
In addition, there is no 1031 exchange requirements, you can hold on to the sales proceeds as long as you wish.
The real kick is that you cannot have a mortgage, that means you need to have enough funds. Well, you could have a mortgage, but the high interest rate and the IRS panelties really take off all the advantages of being “tax free”.
The hard part is for those of us who have kids with chronic conditions that may worsen or at the very least are likely lifelong (no “cures” in sight). If the individual can manage funds AND you can leave him/her “enough,” it needs to be protected from creditors and possibly a significant other in the future.
For folks who have offspring who AREN’T good with handling their money, that’s a much larger problem. We have a relative whose adult son is such an person and I’ve mentioned to him that he needs to speak with an estate planning attorney about options. It will likely create further ill-will between his S and D if the D gets any inheritance outright and the S gets any tied to a trust or other oversight because he has a very hard time handling and stretching money.
Luckily, most of the folks who are posting on this thread don’t appear to have these problems. I guess the people who do are mainly lurkers or sticking with the parents of disabled kids thread. These are issues that plague many in the world I live in.
Congratulations @musicmom! I am 2 months away from my retirement date, and so much has changed since this thread began. Time moves only one way, we won’t alway be young… (quoting a favorite song).
Thanks @anxiousmom.
Great that you’re following soon.
I had alot of “just one more year” internal battles. More money will always feel safer to me. But I had tracked our expenses using bank statements and credit cards for several years. At some point I had to trust our planning.
Day one of retirement felt great!
I’m looking forward to waking up Monday morning a few hours too late for work.
Congratulations, @musicmom! Enjoy your well earned “time off.” 
We are in that boat, but thankfully there is no ill-will between the siblings. We are in the process of setting up wills, and more importantly, trusts that will address these differences between the kids. We feel very strongly that allowing for individual differences is not “favoring” one child over the other. One is artistic and the other can’t draw a stick figure; if I needed a sketch of something (I also can’t draw a stick figure), would I be wrong in asking the one who is an artist to do it for me?
We are “gifting” to the kids to the limit of the annual gift exclusion amounts ($30k currently) in order to minimize estate taxes (which in MA kick in at $1M estate size). We will be using a Crummey trust for the spendthrift child, and if it’s inexpensive to do so, will also use it for the frugal child. Probably once we have one Crummey trust figured out, we can use it for the other child.
It is our hope that the spendthrift child will mature out of it. As they say, “35 is the new 21.”
PS I have been trying to follow this thread, but the newly “upgraded” format makes it difficult for me.
Well…we didn’t convert to Roth…so there you go. In a little over a year, I will be required to take my RMD, and I’ll just do it…and pay the taxes as I go.
“We are “gifting” to the kids to the limit of the annual gift exclusion amounts ($30k currently) in order to minimize estate taxes (which in MA kick in at $1M estate size).”
@IxnayBob I know you love your newish home but have you and your wife thought about moving to a more tax friendly state at some point?
@doschicos , we have thought about it. New Hampshire is a possibility. I don’t care for many of the other possibilities (FL, TX).
That said, I am resigned to DW working another 5 years in MA, so we will be here for that long if that prediction comes true. I’d hate to leave just as we’re getting the house as we like it (geothermal live now, solar and batteries scheduled over next 6 weeks, ground floor has walls and rough mechanicals already, etc).
Give me your thoughts:
Family member is switching from one nonprofit employer to another.
Old employer had 4% matching 403(b) so family member did participate. They also had equity index funds which is what I suggested as investments. On top of that, family member maxed out a Roth IRA annually.
New employer offers a 403(b) - no matching, no index funds, just actively managed funds with expense ratios of 1.5-2%.
Family member will continue to max out a Roth. Trying to decide whether to recommend still investing in the 403(b) or go another route. Curious to hear what others would recommend.
@doschicos , that’s difficult to say without knowing more about their tax status, expenses, age, and current amount of tax deferred assets. I think going to limit of match is a no brainer; without a match, there might be better avenues, especially if RMDs will be a PITA later.
@IxnayBob Young, mid-20s, not in a high tax bracket (the joys of non-profit salaries ). For their age, a very respectful amount of savings but not a lot compared to folks our age.
It’s hard for me to get jazzed up about funding the 403(b) given the no matching and the limited investment options in the plan but I don’t want to be stubborn about it if I’m missing some angle.
We have a child with several lifelong health problems. The main one being she will need a kidney transplant sometime within the next 10 years according to her doctor. She is 22. We have talked to both D1 and D2 about their inheritance regarding this. D1 is 100% willing to give D2 what she needs. What we wonder about is should we just split everything 50/50 knowing that D1 is going to help in case of a financial need, do we give D2 more at the outset, or do we put x amount of $ in a trust designated specifically for medical use. Whatever we do I am grateful both are good with finances and that whatever lies ahead for either daughter they will both be there for each other.
@doschicos , I vote with you on this. Shame on the employer. There’s nothing wrong with taxable savings.
@IxnayBob To the employer’s defense, it is a small employer (less than 75 staff members) that provides pretty generous benefits overall - free dental, good healthcare less than $60 /month, free LT & ST disability, generous time off. They do fall short on the matching but salary was negotiated to compensate for that loss vs. the old employer. Thanks for your feedback. It’s helpful to have a sounding board to make sure I’m not missing anything in my analysis.
@doschicos The risk is that they won’t save that money, or will be tempted to spend it on something. Unless they are saving for a house or something.
Is there a 403b Roth option?