I agree with everything you said. I just recently retired. Had 5.7 million pre tax , did a one time Roth conversion. I had to do it all at once since I have a $700 k inherited ira I must deplete in 7 years. I’m 59 now. I have pension , So now I have $3.5 million in Roth. $4.5 million in stocks taxable. Now starting gift to my kids like you mentioned to help with a home eventually. I’m free from rmd. Kids get it tax free. Only thing my wife has $600 k in pre tax that I might have to convert eventually. Trying to avoid Medicare cost, but looks like I’m going to have a pay for a while. Your right. I can’t even spend down my pension every month. Let alone the rest my investments. Everything you said is correct.
Thanks for watching and providing feedback! It sounds like you have been strategic about your retirement planning and that you are in a place of freedom. It is nice to not have a partner (IRS) looming when RMD time comes. We wish you the best!
Excellent! I'm 61 and aren't at your level but plan on retiring within 1-1.5 years. What you are doing converting to ROTH is what I am also doing. I don't have nearly the amount pre-tax you have saved but I still will be able to live comfortably. Trying to reduce IRMAA as much as possible so I can get a subsidy. Trying to create an income stream through the ROTH of $8-10K a month. Have pension of about $5500/month. SS at 67 will be +$3300/month. The pension and SS should get things done for the most part. No debt.
Thanks for watching, Christina! We are glad to hear that you and your husband have been diligent savers and are working with a trusted financial professional. Don't forget to subscribe to see more content just like this!
Great video Joe. The widow(er) tax penalty is a great point to possibly reconsider adding a survivor benefit to pension. Instead of taking a lesser amount for the pension to continue paying the surviving spouse, why not take out a term life insurance policy on the pensioner? If they do pass away early the surviving spouse will get a lump sum from the insurance payout instead of a lifelong widow(er) tax penalty. My wife will have qualified for a 3% pension for every year of service starting at the age of 50. She will have worked her government job for 25 years at that point. As an older spouse I am thinking we skip a permanent pension reduction with addon survivor benefit and instead addon a 20-year term life insurance policy once she retires.
I’m retiring next April at 59 and have a $6900 government pension that is free from state tax. I also have a $1100 private pension that is also state tax free(up to $20K a year). I have $650K in a 403b that has a guaranteed 7% rate of return for life. I also have $180K in a 401K. I plan on taking my SS at 62 which is estimated at $2600. I’m thinking of taking $30K - $40K a year out just for trips, new car etc. to lower my RMD when I hit 73. Do you think that’s a good idea? I know I’m going to pay taxes but it really doesn’t bother me since I get that guaranteed money coming in. My healthcare is picked up by my union and costs me $1200 a year and I only pay co-payments.
Nice dude. I’ll have a pension at about that in 10 years but I won’t have that much in my 457, but I plan to have some in Roth since a have that option. I would delay SS and use that tax window to convert to Roth a little every year. Use your cash or sell some to pay for it. That would solve your RMD problem.
@@Hoog.23 Of course I wouldn’t convert. I have a deal that most people wish they had. I’m talking just spending money on lifestyle and toys so I have less when the RMD kicks in.
@@briandawson1082 Maybe, but my union through NYC has guaranteed to pick up any costs…for life. We’re in court now trying to block the city from trying to weasel out. They have lost all 9 cases so far.
I retired at 50 with a pension, rental incomes and $1.2 million in tax/tax advantaged accounts. I plan to start Roth conversions at 59.5. Start SS at 62 and invest for future generations and charity.
Thanks for the video. It was really, really helpful. I've seen a couple others from your channel, and I appreciate the help. I retired at the end of 2023 with a pension and quite a bit of money in a 457 plan. I'm 61 years old. I'm going to beworking on Roth conversions, but I need help with how to allocate the investments in my 457 plan and eventual Roth IRA. Right now I'm pretty conservatively invested in the 457, with about 50% stocks and the other 50% in bonds and Stable Value/Cash Management. I'm up about 10% so far this year. I think that I could be a lot more aggressively invested, with a lot more in stocks, since it seems like I should be able to essentially consider my pension to be the bonds and cash part of my portfolio. This obviously isn't the point of the video I'm making this comment in, but do you have a video or link that addresses this sort of question? Thanks again for the great educational topics.
Thanks for watching, Bob! It sounds like you have been a diligent saver over the years and congrats on retiring 😁! Attached below is a link to schedule a session with one of our advisors that would begin the conversation of making sure your whole plan works cohesively. peakretirementplanning.com/schedule-a-meeting/ Thanks!
Thanks for watching! We are glad to hear that retirement has been what it was expected to be if not better. Don't forget to subscribe to see more content just like this!
Thanks for watching, Brian! We are glad to hear you have a plan. We would encourage you to seek out a trusted financial professional to assist with the Roth conversions so that you can be extremely strategic when doing them. Don't forget to subscribe to see more content just like this!
I will be retiring with a state pension at the end of the year. I've been talking to a financial planning firm that is recommending I stop ROTH conversions (I have no heirs and have approx $1.7M in pretax). They're suggesting I do a Charitable Remainder Trust instead. Can you talk about the difference between the 3 charity type? DAF, QCD, and CRT?
Thanks for watching! Great question and great video suggestion. On a high level the DAF would initied with non-retirement assets so no pre-tax dollars into a DAF. QCD's are a great option since the current limit on yearly QCD's once you are $105k per year per individual and this allows you to give out of pre-tax dollars, tax-free to the 501c3 of your choice. The CRT will put your assets into a new entity (Trust) and would pay you an income and donate the remainder once you pass away. We hope this helps. Feel free to schedule a time with one of our advisors at the link below to talk through the different options you mentioned further. peakretirementplanning.com/schedule-a-meeting/
Thank you for watching! We are glad you are looking to implement the strategies discussed in the video. Don't forget to subscribe to see more content just like this!
Great question. In most cases, your spouse's Social Security benefits will not be affected since WEP typically only affects the original pension owner.
This really is a great video and I hope to retire at around 52 (5 years from now) with a $12-15K a month pension. With that in mind at what point should I start to make plans like you talk about in this video??
Thanks for watching, Danny! It sounds like you are in a great situation leading into retirement. Typically the best time to start planning is the present. Please see the link below to speak with one of our advisors about what this planning may look like for your situation. Have a great day! peakretirementplanning.com/schedule-a-meeting/
FANTASTIC Video! I'm a 45-year-old, retired military vet and an avid investor who's been confused on what to do about taxes during retirement. Bottom line, I need to make friends with a knowledgeable CFP
Potentially, this depends on if your Social Security benefit and rental property income are sufficient for you to live on. Being able to retire is far away from being cookie-cutter and has everything to do with an individual's unique situation and needs.
Great question. If you think you will be in a high tax rate in retirement, then more than likely, yes, Roth would be a great idea. It all comes down to whether you will pay more taxes in retirement or lower taxes.
Thanks for watching! Having a lump sum option oftentimes provides greater planning flexibility than taking the monthly payment. The pros and cons will come down to an individuals specific situation and will include things like income needs, tax planning needed, legacy goals, etc. Don't forget to subscribe to see more content just like this!
I have a question when you withdraw your money from your TSP now I know your going to have to pay 20 % Federal taxes but do you also have to pay taxes again when putting it in a roth and how much taxes would that be because it seems that your going to pay two taxes at one time? Is that true.
Great question. You won't pay the taxes twice, only once. One strategy would be to rollover your TSP to a traditional IRA and do Roth conversion from the IRA.
Our friends did that, saved nothing when they both worked but both have pensions and SS. There is not much you can do except to go back to work and do some saving. If you are physically able, stop collect the SS if you started collecting, dont collect your pension, then go back to work and save. Or if you collect the pension, still go back to work and save until age 70 then retire and start collecting your SS. What do you expect him to say? Saving money does not come from the air....but your saved money, invested properly will make money for you later on.
In that scenario, the next question would be to ask if there are any current opportunities to save to add income flexibility or if (adjusted for inflation) the pension and SSA will be sufficient to cover income needs in retirement.
![Tax Planning with Pensions [Joe Knows Retirement, Episode 17]](/img/n.gif)
I agree with everything you said.
I just recently retired. Had 5.7 million pre tax , did a one time Roth conversion. I had to do it all at once since I have a $700 k inherited ira I must deplete in 7 years. I’m 59 now. I have pension , So now I have $3.5 million in Roth. $4.5 million in stocks taxable. Now starting gift to my kids like you mentioned to help with a home eventually.
I’m free from rmd. Kids get it tax free. Only thing my wife has $600 k in pre tax that I might have to convert eventually. Trying to avoid Medicare cost, but looks like I’m going to have a pay for a while.
Your right. I can’t even spend down my pension every month. Let alone the rest my investments. Everything you said is correct.
Thanks for watching and providing feedback! It sounds like you have been strategic about your retirement planning and that you are in a place of freedom. It is nice to not have a partner (IRS) looming when RMD time comes. We wish you the best!
Lucky!
Excellent! I'm 61 and aren't at your level but plan on retiring within 1-1.5 years. What you are doing converting to ROTH is what I am also doing. I don't have nearly the amount pre-tax you have saved but I still will be able to live comfortably. Trying to reduce IRMAA as much as possible so I can get a subsidy. Trying to create an income stream through the ROTH of $8-10K a month. Have pension of about $5500/month. SS at 67 will be +$3300/month. The pension and SS should get things done for the most part. No debt.
My husband and I both have pensions and $1.6M mostly in pre-tax. 56 and 58. Working with a CFP to see when is the best time to convert. Great video!
Thanks for watching, Christina! We are glad to hear that you and your husband have been diligent savers and are working with a trusted financial professional. Don't forget to subscribe to see more content just like this!
Great video Joe. The widow(er) tax penalty is a great point to possibly reconsider adding a survivor benefit to pension. Instead of taking a lesser amount for the pension to continue paying the surviving spouse, why not take out a term life insurance policy on the pensioner? If they do pass away early the surviving spouse will get a lump sum from the insurance payout instead of a lifelong widow(er) tax penalty.
My wife will have qualified for a 3% pension for every year of service starting at the age of 50. She will have worked her government job for 25 years at that point. As an older spouse I am thinking we skip a permanent pension reduction with addon survivor benefit and instead addon a 20-year term life insurance policy once she retires.
I’m retiring next April at 59 and have a $6900 government pension that is free from state tax. I also have a $1100 private pension that is also state tax free(up to $20K a year). I have $650K in a 403b that has a guaranteed 7% rate of return for life. I also have $180K in a 401K. I plan on taking my SS at 62 which is estimated at $2600. I’m thinking of taking $30K - $40K a year out just for trips, new car etc. to lower my RMD when I hit 73. Do you think that’s a good idea? I know I’m going to pay taxes but it really doesn’t bother me since I get that guaranteed money coming in. My healthcare is picked up by my union and costs me $1200 a year and I only pay co-payments.
Nice dude. I’ll have a pension at about that in 10 years but I won’t have that much in my 457, but I plan to have some in Roth since a have that option. I would delay SS and use that tax window to convert to Roth a little every year. Use your cash or sell some to pay for it. That would solve your RMD problem.
I'm going to get hit with the Windfall Elimination Provision. WEP on my SS. Is this your case as well?
NYS? I wouldn’t convert the 403b as you’d give up the 7%.
@@Hoog.23 Of course I wouldn’t convert. I have a deal that most people wish they had. I’m talking just spending money on lifestyle and toys so I have less when the RMD kicks in.
@@briandawson1082 Maybe, but my union through NYC has guaranteed to pick up any costs…for life. We’re in court now trying to block the city from trying to weasel out. They have lost all 9 cases so far.
I retired at 50 with a pension, rental incomes and $1.2 million in tax/tax advantaged accounts. I plan to start Roth conversions at 59.5. Start SS at 62 and invest for future generations and charity.
Thanks for watching! It sounds like you have saved well and have a defined plan going forward.
Thanks for the video. It was really, really helpful. I've seen a couple others from your channel, and I appreciate the help. I retired at the end of 2023 with a pension and quite a bit of money in a 457 plan. I'm 61 years old. I'm going to beworking on Roth conversions, but I need help with how to allocate the investments in my 457 plan and eventual Roth IRA. Right now I'm pretty conservatively invested in the 457, with about 50% stocks and the other 50% in bonds and Stable Value/Cash Management. I'm up about 10% so far this year. I think that I could be a lot more aggressively invested, with a lot more in stocks, since it seems like I should be able to essentially consider my pension to be the bonds and cash part of my portfolio. This obviously isn't the point of the video I'm making this comment in, but do you have a video or link that addresses this sort of question? Thanks again for the great educational topics.
Thanks for watching, Bob! It sounds like you have been a diligent saver over the years and congrats on retiring 😁! Attached below is a link to schedule a session with one of our advisors that would begin the conversation of making sure your whole plan works cohesively.
peakretirementplanning.com/schedule-a-meeting/
Thanks!
I did under an identical circumstance took SS at 62 and my assets are still growing and I’m living as well or better than when I was working.
Thanks for watching! We are glad to hear that retirement has been what it was expected to be if not better. Don't forget to subscribe to see more content just like this!
Great video, sir. I would kill for those eyebrows. 😊
Thank you for the positive feedback! They are definitely at their PEAK🤪
Great video thanks!
Thanks for watching!
I plan to do Roth conversions in my late 50s for three years. Plan to retire 55. My situation is close to the example you gave.
Thanks for watching, Brian! We are glad to hear you have a plan. We would encourage you to seek out a trusted financial professional to assist with the Roth conversions so that you can be extremely strategic when doing them. Don't forget to subscribe to see more content just like this!
Great content! Thanks for the information!
Thanks for watching and providing feedback!
I will be retiring with a state pension at the end of the year. I've been talking to a financial planning firm that is recommending I stop ROTH conversions (I have no heirs and have approx $1.7M in pretax). They're suggesting I do a Charitable Remainder Trust instead. Can you talk about the difference between the 3 charity type? DAF, QCD, and CRT?
Thanks for watching! Great question and great video suggestion. On a high level the DAF would initied with non-retirement assets so no pre-tax dollars into a DAF. QCD's are a great option since the current limit on yearly QCD's once you are $105k per year per individual and this allows you to give out of pre-tax dollars, tax-free to the 501c3 of your choice. The CRT will put your assets into a new entity (Trust) and would pay you an income and donate the remainder once you pass away. We hope this helps. Feel free to schedule a time with one of our advisors at the link below to talk through the different options you mentioned further.
peakretirementplanning.com/schedule-a-meeting/
Appreciate the info! I realize I have too much in my pretax 401k and should instead contribute to my Roth 401k before retiring.
Thank you for watching! We are glad you are looking to implement the strategies discussed in the video. Don't forget to subscribe to see more content just like this!
My spouse has 100% survivor benefit on my pension. When I die will her Social security benefit be affected by WEP?
Great question. In most cases, your spouse's Social Security benefits will not be affected since WEP typically only affects the original pension owner.
Thank you for the video doing some Roth conversion this year and next year.
Thanks for watching we appreciate the positive feedback!
This really is a great video and I hope to retire at around 52 (5 years from now) with a $12-15K a month pension. With that in mind at what point should I start to make plans like you talk about in this video??
Thanks for watching, Danny! It sounds like you are in a great situation leading into retirement. Typically the best time to start planning is the present. Please see the link below to speak with one of our advisors about what this planning may look like for your situation. Have a great day!
peakretirementplanning.com/schedule-a-meeting/
FANTASTIC Video! I'm a 45-year-old, retired military vet and an avid investor who's been confused on what to do about taxes during retirement. Bottom line, I need to make friends with a knowledgeable CFP
Excellent video. Thank you
Thanks for watching and providing feedback, Sheila! Don't forget to subscribe to see more content just like this!
@@peakretirementplanninginc. I am subscribed Thanks
I’m 64 no pension k$3000 SS and a rental property
Am I okay to retire
Potentially, this depends on if your Social Security benefit and rental property income are sufficient for you to live on. Being able to retire is far away from being cookie-cutter and has everything to do with an individual's unique situation and needs.
Have 3 pensions but they only total $1500 per month. 😐
Thanks for watching! In some cases, something is better than nothing 😁
I have money in a 457 and Roth beside a pension, should I lower my 457 and put more in Roth? I have 10 years before I retire at 65
Great question. If you think you will be in a high tax rate in retirement, then more than likely, yes, Roth would be a great idea. It all comes down to whether you will pay more taxes in retirement or lower taxes.
Any thoughts on those who have the option to take their pension as a lump sum instead of monthly and how you might calculate the pros and cons?
Thanks for watching! Having a lump sum option oftentimes provides greater planning flexibility than taking the monthly payment. The pros and cons will come down to an individuals specific situation and will include things like income needs, tax planning needed, legacy goals, etc. Don't forget to subscribe to see more content just like this!
I have a question when you withdraw your money from your TSP now I know your going to have to pay 20 % Federal taxes but do you also have to pay taxes again when putting it in a roth and how much taxes would that be because it seems that your going to pay two taxes at one time? Is that true.
Great question. You won't pay the taxes twice, only once. One strategy would be to rollover your TSP to a traditional IRA and do Roth conversion from the IRA.
How about pension, SSA, but NO savings?
Sounds like my parents, who have managed just fine by living in lower cost of living areas.
Yeah how about the rest of us
I guess the only tax strategy would be to max out both by continuing to work.
Our friends did that, saved nothing when they both worked but both have pensions and SS. There is not much you can do except to go back to work and do some saving. If you are physically able, stop collect the SS if you started collecting, dont collect your pension, then go back to work and save. Or if you collect the pension, still go back to work and save until age 70 then retire and start collecting your SS. What do you expect him to say? Saving money does not come from the air....but your saved money, invested properly will make money for you later on.
In that scenario, the next question would be to ask if there are any current opportunities to save to add income flexibility or if (adjusted for inflation) the pension and SSA will be sufficient to cover income needs in retirement.
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