Did you take into consideration that their SS income is going to be significantly higher than any projection shows today because they have over 25 years of COLA’s before they draw SS that no one can predict how much those will be???
Yes, that's a good question. COLA and inflation can cause miseading results when projecting far into the future.
In this case, I did take that into account by putting everything in today's dollars. So it does take into account the impact of future COLAs and inflation as much as it's possible.
I tried that as I got closer to retirement and wasn’t even close to what the actual SS payment was as the massive COLA in 2022 or 2023 I forget which year threw me off. I had been using the avg cola from the last 20 years as my assumption
Couldn't agree more — the whole industry answers the median saver's question and leaves the $1.5M crowd with the harder problem: a 401(k) that big basically becomes a tax time bomb at 73. I built a free calculator that models exactly this — how much of your RMD you can defuse with conversions in the low-income years: https://runwayretirement.com/tools/roth-conversion-calculator.html
Way too much scare tactics surrounding RMDs. Even If I am in the 37 percent tax bracket starting at age 75, who in the hell cares? You are alive and not in a cemetery or a pile of ashes in a crematory. Taxes are simply a sign that you are doing well financially. Stop worrying about something that most people will never live to see.
I agree that there are too many scare tactics around RMDs.
As I mentioned in the post, it only really matters if you have significant wealth - over roughtly $1.5M in a traditional account. That is a pretty good problem to have!
For those who are getting close to that age and have that problem, if they prefer to use their money for other things, like giving to charity or passing it on to their family, it can be worth spending a little time thinking about.
Did you take into consideration that their SS income is going to be significantly higher than any projection shows today because they have over 25 years of COLA’s before they draw SS that no one can predict how much those will be???
Yes, that's a good question. COLA and inflation can cause miseading results when projecting far into the future.
In this case, I did take that into account by putting everything in today's dollars. So it does take into account the impact of future COLAs and inflation as much as it's possible.
I tried that as I got closer to retirement and wasn’t even close to what the actual SS payment was as the massive COLA in 2022 or 2023 I forget which year threw me off. I had been using the avg cola from the last 20 years as my assumption
Couldn't agree more — the whole industry answers the median saver's question and leaves the $1.5M crowd with the harder problem: a 401(k) that big basically becomes a tax time bomb at 73. I built a free calculator that models exactly this — how much of your RMD you can defuse with conversions in the low-income years: https://runwayretirement.com/tools/roth-conversion-calculator.html
Way too much scare tactics surrounding RMDs. Even If I am in the 37 percent tax bracket starting at age 75, who in the hell cares? You are alive and not in a cemetery or a pile of ashes in a crematory. Taxes are simply a sign that you are doing well financially. Stop worrying about something that most people will never live to see.
I agree that there are too many scare tactics around RMDs.
As I mentioned in the post, it only really matters if you have significant wealth - over roughtly $1.5M in a traditional account. That is a pretty good problem to have!
For those who are getting close to that age and have that problem, if they prefer to use their money for other things, like giving to charity or passing it on to their family, it can be worth spending a little time thinking about.