Lately my Facebook feed has been inundated with ads from various financial advisors, claiming there are strategies to legally reduce the tax hit from Roth conversions or other methods of reducing taxes over the course of my retirement.
Anyone ever talked to any of these guys or have any idea what these “strategies” might be?
I’ve scheduled some “consultations” just for kicks, but I’ll be disappointed if it turns out they’re just selling annuities or life insurance.
I smell a rat. 
There are a number of financial advisors that always want to gain clients. If you are happy with the services you receive (or if you choose not to have a FA), I think you would be wasting your time.
I want to make sure that I undertand what you’re saying …
The first number is how much things have rebounded since Liberation Day, and the second is YTD?
If one does a deep dive and researches stocks/companies thoroughly, they can typically do a better job in the market when purchasing a stock than a “50/50” chance of the stock going up or down.
Liberation Day? Was there really one? Tarriffs up, tarriffs down, up, down, sort of up, maybe down - looks like market manipulation to me. I would not rest on the current market rise.. Wealth disparity allows a handful (comparitively speaking) of individuals to move markets with a tweet or a rumor or a side bar comment to the press, and not all of us are “in the know” so we may not feel those uninspired gains or losses. Like most of you, I stay the course because no one knows how to time the market. You used to be able to follow normal course of business logic that allowed for a bit of confidence in a buy or sell - that does not seem to make the same sense today as it did when fat fingers were not in the money pot, at least not to this extent.
Well in general you’d not want to do a jumbo Roth conversions in one year. It would put you in a higher tax bracket. And if you are on Medicare (or within a few years of it), there will be IRMAA surcharge (extra amount tagged on to your Medicare payment).
Adding to above, and not disagreeing…
One could convert a lot (keeping Fed & state tax brackets in mind), knowing there would be IRMAA surcharge but only trip IRMAA one year, with the knowledge that the surcharge would fall off the following year. As you point out, it’s still another tax to consider.
It’s not a 50/50 chance for individual stocks, in most sectors. For example, the chart below shows a median return of -70% (lost majority of value) on Russell 3000 individual stocks. The average gets pulled up by the small minority that are big >2000% return winners at the far right, that are circled in red. It’s a similar idea for VCs investing in start-ups. They hope for a few big winners that will cover the vast majority of their investments that fail.
Picking out which stocks are going to be the big winners and which stocks are the more typical losers is not practical for typical amateurs doing a “deep dive and researches thoroughly.” Even typical professionals can’t do this well. For example, the chart above shows the portion of actively managed funds that beat index fund benchmarks over time is negligible. The numbers above include fees, without fees performance is similar to a simulated random distribution, suggesting winners/losers among typical professionals is primarily based on luck, rather than skill.
I’m not saying that it’s impossible to outperform indexes over time. There are many examples of specific organizations that have done so successfully over decades. However, doing so generally requires being more knowledgeable or faster than organizations investing large enough magnitudes to correct mispricings, such as successful hedge funds. It’s more likely to happen for a small company for which you have special information that is not available to the general market.
Yes
My point is, its not simply “they go either up or down so its 50/50”. That doesn’t make sense to me. This is not my skill base, but from being a casual observer of those who are way better at it than I could ever dream to be, reading and researching can be rewarding and successful. As can buying and holding in some cases too:
From Morningstar:
When one buys a stock, it goes up or down (or could stay flat I suppose). Last week I bought STZ and CPB. Both are down. One could be up. Two could be up. But in the end, a stock will go one way or the other. I did research but stocks move on emotion as much as fundamentals.
Individuals don’t beat the markets. Professionals don’t beat the markets. I’m talking the vast majority.
That’s why Vanguard exists.
The S&P might be near the all time high - but that’s based on the growth of few, highly weighted stocks. Pickers typically don’t win. Experts will justify why they don’t win based on volatility or other things.
Funny typo! Some stocks are duds.
Even if one follows the “buy and hold” approach, they are generally going to make money. Maybe not as much as if they had taken a different approach, but I remember once someone asked my late FIL how he knew when to sell a stock. He looked at the person and said “you sell?” 
Was it John Bogle who talked up index funds by saying that you don’t have to find the needle in the haystack when you can buy the whole haystack? I can’t imagine buying individual stocks.
Thanks, @Data10, for the response.
There’s a significant difference between those who inherit millions and those who earn them. Someone who grew up with wealth—like the guy with a Rolls-Royce parked in front of the dorm—likely saw it as normal. But for someone who built their fortune from the ground up, every dollar reflects effort and sacrifice, and the memory of having to save for it never really fades.
I agree that there is a difference between inheriting and self-made. However, I highly doubt a college reunion attendee thinks taking a Rolls Royce and having it wait in front of the college dorm is normal. Far more likely is he’s trying to project a particular appearance to others attending the reunion. He expects the car is going to get comments / looks from others attending the reunion, and is glad to receive them.
I know the person who had the Rolls. This was very in character for him! He is into that lifestyle. Quite the opposite of another friend/classmate who is very understated and who privately provided a generous matching gift to one of our class gift campaigns (that one particular campaign raised $110K), and another good friend/classmate, a very low key person who was not able to make it to the big reunion and who did not submit an update to the reunion “yearbook”, but who quietly (well its not quiet anymore- its now big news) donated $28M to the college and is having a building named after him and his late mother, who was also a college alum. Quite different personalities, for sure.
Persons 1 and 3 inherited their money. Person 2 is I believe self made. She also did not submit anything to the reunion yearbook. Interesting .
Yes, but I doubt the guy with the Rolls Royce has any insecurities about his wealth, as you suggested.(Cross posted with jym626)
My son was in the same year (though she was a transfer and he started as a freshman)at the same school with Ivanka Trump and had several classes with her, as well as some social interactions through after-school activities. He didn’t find her particularly remarkable—no hangers on, and she was treated like any other student. But he wasn’t in her social orbit.
yes, that was one of John’s pearls of wisdom, as was ‘stay the course’ which I stole upthread.
I’m with you @maya54. I have a lot of flexibility in my work – I’m traveling for a couple of weeks in Asia. I will have to take several calls at 11 PM and maybe one at 1 PM and respond to emails. But I can get my haircut whenever I want and consider my pro bono work as part of my work – going to London for a pro bono thing after I get back from Asia. The maybe to SF to see ShawSon and DIL and new puppy.
I just love what I do and don’t feel encumbered by the work.
On another note, I arranged for ShawWife to meet with our second financial advisor. They did a presentation of our financial plan and she said “I didn’t realize we had that much money. Why am I being so frugual?” She has always been frugal and I explained that it was being frugal (relative to our very well-to-do colleagues that enabled us to save as much as we have – we got a very modest inheritance from my parents and may get something from her parents but I have always assumed that we would not. Her mother is 93 and still going strong at least physically (some mental decline showing). We are still relatively careful but a lot less frugal than we used to be.
We do want to help the kids in the future but also now to a lesser extent. ShawD traveled in Asia for two weeks before we got her and now is traveling with us and we are picking up the tab, including some luxury as well as hostel life. We are having a lot of fun.
