Are you "lucky"if you have a secure retirement?

[randy41]

Oh, much more than just that. HS

please enlighten me

 

[Parkanzky]

And Don't forget, with the "self-funding" option, if you kick off all of a sudden, your heirs get to keep the money, whereas the insurance company will say "got away with another one."

An excellent point. That is why I always lean toward being self-insured.

 

[Parkanzky]

While on the subject of taxes, several members who have contributed to this thread have a case for waiting until your full retirement age to collect Social Security. One of the things to consider about that is how a higher SS monthly benefit will affect your Federal tax liability if you have other retirement income sources. 2014 was the first year I was able to draw a full 12 months of benefits, and by planning ahead I saw that collecting the full 12 months was going to push about one third of my adjusted gross income into the 25% tax bracket, so I stopped skimming off about $8,000 in interest a year from my 457 plan investments and reduce my AGI to keep the bracket creep amount lower.

Can anybody advise me of the best way to reduce my future tax liability when I have to begin drawing from my 457 plan again? Thanks for any input.

You can talk to a tax adviser, but remember that that money is there for you to spend in your retirement.

Your only goal shouldn't be avoiding paying taxes, because all you'll end up doing is leave a bigger estate.

Make sure that you're doing what you want to do (within your means), regardless of whether it costs you a bit more in taxes.

 

[RedNeckGeek]

Can anybody advise me of the best way to reduce my future tax liability when I have to begin drawing from my 457 plan again? Thanks for any input.

I'm not familiar with the 457. Do you have any flexibility in how the money is invested? If so, you might consider tax free Munis or government bond funds. Having said that, though, bond fund share prices will continue to trend down as the Fed tightens interest rates into the future. But if you can find a decent rate on an actual bond (not a fund of bonds) and don't mind keeping it to maturity, you can avoid a bad surprise. What I've found, though, is that tax advantaged investments usually have the tax savings discounted by their lower returns. And many are lower risk as well, which also tends to reduce returns. I'm not suggesting you ignore tax implications, but I wouldn't let that be your only criteria in selecting a strategy, either.

 

[randy41]

While on the subject of taxes, several members who have contributed to this thread have a case for waiting until your full retirement age to collect Social Security. One of the things to consider about that is how a higher SS monthly benefit will affect your Federal tax liability if you have other retirement income sources. 2014 was the first year I was able to draw a full 12 months of benefits, and by planning ahead I saw that collecting the full 12 months was going to push about one third of my adjusted gross income into the 25% tax bracket, so I stopped skimming off about $8,000 in interest a year from my 457 plan investments and reduce my AGI to keep the bracket creep amount lower.

Can anybody advise me of the best way to reduce my future tax liability when I have to begin drawing from my 457 plan again? Thanks for any input.

at some point you just run out of tax deferment options. you are there.

 

[RedNeckGeek]

at some point you just run out of tax deferment options. you are there.

If that's the case, there may be some solace in knowing you're making enough money to have to pay taxes. I can think of many worse problems.

 

[JDgreen227]

RedNeckGeek...yes I have complete flexibility as to how it's invested. Thanks for your input.

 

[KennyG]

trusts are about avoiding taxes.

Trusts don't really provide tax benefits or unfairly qualify people for government benefits in most cases. If you put assets in trust but don't legally transfer them, they are still yours while you are alive. We have our assets in trust simply to clarify the path to pass them through to the children and minimize any legal complications in settling the estates.

Things do happen. There was a case a few years ago where a Senator from Illinois was found to have quietly taken title to her mothers assets to qualify her mother for Medicaid.

 

[ovrszd]

There are a few trolls on every internet discussion group, and the sad truth is while some are quite intelligent, their viewpoints do little except create dissent, meaning they appear to be outright morons to those who actually contribute positively to a thread. Such cretins are so obvious it's almost laughable.

Not sure about you, you can judge that. But for me, I've been one of those before. At least that's what I've heard.

 

[randy41]

most trusts are formed to take assets out of the estate to save on estate taxes.