Cheryl Low

Comments:

• Initially, the Secure 2.0 Act only allowed participants in an employer plan who hold an annuity to aggregate the annuity’s value with non-annuity assets to calculate their RMD. However, the July 18, 2024 Final Regulations extend the treatment to IRAs as well. The IRS released the new Final Regulations for Required Minimum Distributions on July 18, 2024. Here’s the link on Kitces.com that explains the clarification of the Secure 2.0 Act. You’ll have to scroll down to the section titled, “Treatment Of Annuities Within Retirement Accounts And Other Rules Under The New Regulations”. https://www.kitces.com/blog/secure-act-2-0-irs-regulations-rmd-required-minimum-distributions-10-year-rule-eligible-designated-beneficiary-see-through-conduit-trust/ “Individuals who own annuities within IRAs can aggregate their annuity and non-annuity IRA assets together to calculate their RMD and count the entire amount of their annuity payments against that RMD total.” (This is different from the QLAC annuity where the QLAC amount is excluded from the calculation of the RMD.)

  Post: Sequence of Return Risk

  Link to comment from September 29, 2024

• We cover monthly expenses with social security, a pension, dividends (portfolio of Dividend Kings/Aristocrat stocks), and an annuity that counts toward RMDs (starts at age 73). So far, we haven't used the dividends so those have been reinvested over the last 2 years. We paid off the house several years ago.

  Post: Sequence of Return Risk

  Link to comment from September 28, 2024

• Nice article! Thanks for sharing!

  Post: How might early retirement at say age 55 affect your FRA SS benefits?

  Link to comment from September 28, 2024

• The IRS released the long-awaited, much-anticipated new Final Regulations for Required Minimum Distributions on July 18, 2024. Here's the link that explains the clarification of the Secure 2.0 Act. You'll have to scroll down to the section titled, "Treatment Of Annuities Within Retirement Accounts And Other Rules Under The New Regulations". https://www.kitces.com/blog/secure-act-2-0-irs-regulations-rmd-required-minimum-distributions-10-year-rule-eligible-designated-beneficiary-see-through-conduit-trust/ Initially, the Secure 2.0 Act only allowed participants in an employer plan who hold an annuity to aggregate the annuity's value with non-annuity assets to calculate their RMD. However, the July 18, 2024 Final Regulations extend the treatment to IRAs as well. "Individuals who own annuities within IRAs can aggregate their annuity and non-annuity IRA assets together to calculate their RMD and count the entire amount of their annuity payments against that RMD total." Note: QLACs are handled different as noted in the comments below.

  Post: Can annuity income be used to offset RMD obligations from other accounts?

  Link to comment from September 19, 2024

• On the spur of the moment, my husband and I went to an auction with my dad. As we were leaving, my dad remarked, "It amazes me what some people would rather have than money."

  Post: Matters of Motivation

  Link to comment from September 14, 2024

• 1) Have an attitude of gratitude 2) Discover your own idea of happiness whether that’s pursuing your interests and passions, trying new things…or dolce far niente, the sweetness of doing nothing. 3) Give with a generous heart 4) Prioritize your physical health by maintaining a healthy diet, taking care of your teeth, staying active through regular exercise, and ensuring you get adequate sleep. 5) Nurture your mental and emotional health by fostering and building relationships, embracing challenges, and staying curious. 6) Strengthen your spirituality thru reflection and connecting with nature 7) Celebrate your wins

  Post: Everything About Retirement on a 3×5 card

  Link to comment from August 20, 2024

• When the tax laws changed in 2017, we determined the standard deduction was best for our situation (SALT cap at $10K), so we paid off the mortgage balance. I discussed it with a couple of older coworkers and they had done the same. We would have paid it off before retiring anyway (to have zero debt in retirement).

  Post: Should you prepay a mortgage?

  Link to comment from July 28, 2024

• Couldn't have said it better! I had a boss that told me to build an income stream that matched my salary. Unfortunately, I didn't take it to heart until a decade later and never came close to matching my salary. He had rental units which for me were a hassle. So, I used Dividend King/Aristocrat stocks in a taxable account and Roth account. The dividends help alleviate market risk and cover the bumps of everyday life.

  Post: Quinn relents. Apparently you can live on 66% of pre-retirement income. 😉😉

  Link to comment from July 27, 2024

• The 4% rule works good as a back-of-the-envelope estimate. We paid off our mortgage (2017 tax cut) before retiring, i.e., no debt going into retirement. However, 5 years before my estimated retirement date, I needed more clarity, so we wrote a withdrawal strategy. It would take 2 articles to go through the details, but in summary, we did the following: Identified current and future spending and divided it into major buckets such as "Emergency Fund", "Essential & Discretionary", "Home Maintenance", "Aging in Place (Home Services)", and "Healthcare/LTC". Most people underestimate the cost of healthcare & aging. It was an eye-opener for me. Our hobbies aren't expensive: hiking, biking, golfing, gardening/yard work, cards w/friends. We traveled extensively when we were younger and are homebodies now.Identified a funding source for each bucket. For example, the Emergency Fund is funded by a no-penalty CD/Hi Yield CD. The Essential & Discretionary spending is funded by our pension and SS, and Aristocrat stock dividends that cover our semi-annual RE taxes and home insurance. And so on.We review our funding sources holistically to make sure we are diversified. We also go thru the exercise to see if we can mitigate some risk such as inflation, market risk, longevity risk, etc. Lastly, we are doing Roth conversions until age 73.

  Post: Quinn relents. Apparently you can live on 66% of pre-retirement income. 😉😉

  Link to comment from July 27, 2024

• Maybe a better question is what were you spending while working (less taxes, mortgage payments and savings) vs what are you spending in retirement. My income less federal & state taxes and SS & medicare tax was $123K. Now reduce that by 401K & IRA contributions, savings, and mortgage pymts to get $65K. To keep it apples to apples, I reduced my SS/pension for taxes. The result is my spending is 92% of my spending while working.

  Post: Quinn relents. Apparently you can live on 66% of pre-retirement income. 😉😉

  Link to comment from July 21, 2024