Yes. We are in the process of updating our estate plans and our attorney had us sign a document specifically for that.
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You can always switch back to traditional Medicare. However, there is a 20% copay, among other costs ā¦ all costs that are covered by a Medigap (Supplement) plan. The problem in most states is that underwriting is required for the switch to the Supplement, and this may be an issue.
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Got it. We have the Medigap Plan as I figured that the Medicare HMOs were likely to become problematic.
I will say that there is greater complexity in the choices for folks over the age of 65 (Medicare supplement, HMO vs regular, drug treatment plan, what the drugs will cost - sometimes they are cheaper under insurance and often cheaper under goodrx or costcoās plan, etc.). How do they expect 82 year olds to compare the alternatives?
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I canāt tell you how many times Iāve said that!! When FIL passed, we were thrilled that MIL didnāt lose the retiree healthcare that they had ā¦ she couldnāt have navigated any changes from what she was used to, and thankfully the plan she has is awesome.
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My mom was a proud union member. They have a wonderful department that goes over all the changes with her and help her select the right plan for her.
A couple of years ago, when prices were going up, she thought of going to an advantage plan instead of the supplement that sheās always had. They helped her through all of her choices and told her that the plan she had was the best option.
No trying to get her to change to an advantage plan.
One of the ways her union is still working to help her.
My husbandās former employer gives him a stipend to buy his Medicare healthcare. He must use their preferred broker to get the money. If he goes on his own, he will lose the money.
It remains to be determined how this is going to work because our transition this year has been very rocky! 
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Interesting perspective on whether to wait until 70 to claim SS.
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āFinancial advisors talk about the ābreak-even pointā ā thatās the age when the total benefits you get from waiting outweigh what you wouldāve gotten by claiming earlier.ā
And that is just bad Finance. Itās simple math, but just the wrong way to look at it.
Moreover, the article doesnāt address Timās Wifeās claiming year. My guess is that she should have claimed at her FRA, but could have started at 62. Both waiting until 70 is not a good rule of thumb. So, missing a key piece.
And finally, should have mentioned the best free source, https://opensocialsecurity.com
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Alright, what do the great minds of cc think ā¦
We sold my momās house, and there is a bit in savings. All told, I will likely net about $100k after I gift some to the kids. We meet with our FA next month to calculate Roth conversions and other stuff, but Iām curious what yāall think. Know that we are in fine shape according to the FA and Monte Carlo analysis, etc. We both will receive a pension and SS by the time we are 70 so we arenāt even sure weāll ever need to touch the regular or Roth IRAs down the road. We have started doing Roth conversions, but because the stock market has gone bonkers, we are not even treading water in terms of reducing that IRA. The regular IRA is bigger now than it was before last yearās Roth conversion. I know ā¦ good problem to have.
What would you do with this cash infusion?
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Let it all sit in the brokerage account to pay for expenses down the road and keep us more liquid. Our brokerage account is VMFXX as we treat it as our emergency savings so want to keep it low-risk.
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Fund our Roths for the year and use a big chunk to pay taxes on a much-larger Roth conversion. Leave the rest in the brokerage.
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Forget funding our Roths (is there a reason to keep funding Roths after age 60?) and still use a big chunk to pay taxes on a large Roth conversion.
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Do a CD ladder. Is that preferable to letting it sit in the brokerage account for some reason?
Know that we are in the 12% right now. If you say fund a larger Roth conversion, how much larger? So that our overall tax rate is 15%? 18%? 20%
TIA
When you sum your pensions, Social Security payments, and RMDs from that growing IRA balance, will the total place you in a higher marginal tax bracket than you are now?
Is 12% your current marginal or effective rate?
I recognize that no one can predict future tax rates, but find it impossible to believe that they can remain at their existing levels given the magnitude of the debt.
What happens to the pension of the first spouse to die? I assume that you are both claiming on your own SS record, but does one spouse have a higher projected SS benefit?
I am trying to determine/have you think about total income and tax rates once one spouse dies.
Do you care about leaving your heirs a more tax-advantaged account? Are your heirs in higher tax brackets than you are?
To answer the fourth question: It depends on CD rates vs Treasury rates and if you live in a state that exempts T-bill interest from state income tax. You could create a T-bill/T-note ladder instead of a CD ladder, or a combo of the two, based on after-tax effective yield at different points along the yield curve of T-bills & CDs.
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I say keep the money fairly liquid. Either in a high yielding money market/ brokerage account or in CDs. We have a similar problem where we have too much in IRAās and are dreading the minimum required distributions we will have to do in a few years. For this reason, any new influx of money we get we are not putting into retirement savings. Last year, we put the proceeds of our home sale into CDs.
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Vanguardās projections of stock market returns for the next decade are pretty dire (3.2%-5.2% nominal per year, which is comparable to the peak of the dotcom bubble) and Buffett has been cashing in his investments at an unprecedented rate (though some of this may be because he expects to retire soon).
Doing a large Roth conversion (and keeping the converted funds in the same equity investments) is upping your bet on the stock market considerably and if it causes you to pay significantly more taxes than you will be doing on withdrawals then its only a good idea if it allows you to recover that money elsewhere (e.g. passing on a tax-free inheritance to kids who will be in a much higher tax bracket, or limiting future mandatory IRA withdrawals to reduce your Medicare premiums).
However, thereās no reason not to fund a Roth, especially as you can keep the money in the money market account inside that tax-free wrapper if you want. And you could even move some converted funds to a money market account to reduce risk - just beware of paying extra taxes to achieve this.
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I vote for option #2. Iām really big on max to Roths, without triggering a high tax rate, at any age you can do it, it is such a great deal. Personally we plan on either doing conversions or pulling out of 401Kās every year up to the 24% tax rate. That rate sounds good to us, because for many years weāve been paying 37% federal, so 24% is fine. I think you pick whatever tax rate youāre willing to pay up to and convert to that rate.
Weāve been retired for three years, and I always had the idea that you utilize your Roth only as last resort, when everything else is gone, but I definitely had a change of heart on that. It is REALLY nice to have a separate non taxable pot of money to utilize, if you need some cash but donāt want to jump into a higher tax bracket. Our kids will be fine, how important is it really to hang onto that Roth so they donāt have to pay taxes (plus, maybe the laws will change).
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Ditto. We fund Rothās for 2 reasons: 1) reduce RMDās.; 2) kidās inheritances.
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Another element that is rarely discussed is if the individual is divorced. If the marriage was 10+ years, and if the individual did not remarry, they may select either their own SS benefit or 1/2 the benefit of the ex-spouse, whichever is greater.
*Note: this does not affect the ex-spouseās benefit, nor are they notified if a former spouse is linked to their SS benefit.
A tricky issue however, is accessing that information for planning purposes. One needs their marriage certificate and divorce decree in order to show 10 years of marriage, and an appointment with the SS office to look up their ex-spouses benefits. Youāll receive a snapshot, of how things appear at that moment, but without knowing the ex-spouseās employment plans (e.g. will they quit or lose their job in their 50s, go part-time, etc.) that number will be in flux.
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Iām way too down any rabbit hole for social security.
You always get your social security amount, if one half of your husbandās (or ex if married for 10 years minimum) is more than your full amount, then you would receive what is called a top up. So yours plus an amount to make it one half of a spouse or ex spouse.
Thatās if you file at your full retirement age, which for me will be 67 years. If I retire before then, there is a permanent reduction in my benefits. So it would be one half minus any deduction in benefits for filing before full retirement age. Which could be a 30% permanent reduction.
Also only if you are divorced, your ex spouse does not need to be retired to receive what is called a top up. If you are married, you cannot get that top up until the spouse retires.
So confusing!
Also the correct term may not be top up but google is failing me today
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@Youdon_tsay - Another thought. If you are in need of a new car or a home renovation, perhaps that would be a good way to spend some of the money.
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Iām afraid of using the tax rate terms incorrectly. 
Previously, we didnāt convert beyond the top of the 12% bracket ā for instance, no money beyond $94,300 after deductions. I am willing to go into the 22% bracket, but Iām not sure how much. Thatās what that last question was asking. Iām sure there are calculators to figure out my tax hit at various percentages (and obvs the FA can).
The only one taking a pension is dh, and I get 100% if he dies. His doesnāt have a set COLA, but he does get occasional bumps. I donāt plan on taking my non-COLA pension until 70 or maybe 72, and then I can decide whether to do any survivor benefits. But the longer I wait, the more the monthly amount increases. The plan now is for him to take SS at 70 and me taking at 67. Our SS will be comparable so, yes, we are taking on our own records. And, yes, with those four income streams we will be in a higher tax bracket, which is why we want to reduce RMDs. Thatās, of course, based on current income thresholds.
OK, I havenāt even thought about tax rates if one of us dies. Itās a great consideration, but thatās the one variable that I feel is the least in our control. I will say that both my parents lived until their 90s and his until their 80s, and I am in better shape (though he is reasonably healthy) so we plan on me living longer.
Dh is pretty obsessed with leaving money in the Roth to the kids and never touching it, which is one reason he always votes for moving money into the Roth. Iām fine with that, if it makes current-day sense, too. Both children already are in a higher tax bracket. But, to answer your question, leaving a more tax-advantaged account to the kids absolutely is our plan.
Oh, and we donāt have a state income tax here, although there is state income tax if we move near ds1. That wonāt happen anytime soon, but itās out there.
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We already have money set aside for some home improvements, but, yes, a chunk of that money is going to sit in the brokerage and pay for our next car.
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Todayās example on Roth rollover probably has only taxation factors. So no IRMAA factorsā¦. which start to kick in for married/jointly when income > $212K, IF taxpayer(s) within about 2 years of age 65.
But it is something to keep in mind for long term planning for Roth rollover. In other words, youād probably not want to retire at age 64 and do total roll over of a $300K IRA to Roth.
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Do you have TurboTax? If so, you could model various Roth conversion amounts to see the tax effect. The 2023 version would be off by a bit, but you could eyeball that difference.
OK, so you need to add your RMD to those four income streams. I am going to assume that you & your spouse are 60, and therefore the accounts will grow for fifteen years before your first RMDs. Assuming a 4%/year growth, every $100K will be worth $173K by age 75. This does not contemplate ongoing contributions while you continue to work. So, every million in your combined IRA accounts today could require a distribution of $70K. (I am not 100% confident of that figure, and it will be higher since you will continue to contribute to the existing account.)
Since you said the pensions & SS combined will place you in a higher tax bracket than you are presently, then the decision of converting to Roth is not as much of a debate. However, you would be converting at an all time high today, so if you convert at the same marginal rate that you will be paying once you are taking RMDs, you might not be ahead of the game to convert.
Lots of tradeoffs and no easy answer, but since it is a priority to leave tax-advantaged money to your children, and since it is hard to imagine tax rates not being higher in fifteen years, it seems that you could convert now. Keep an eye on IRMAA income brackets starting at age 63 so that you donāt trigger parts B&D surcharges. On the flip side, you may trigger IRMAA surcharges in retirement once you are taking RMDs.
My bias is toward Roth, but really impossible to determine w/o knowing the figures.
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