Very good article, thank you. We both retired last year, just prior to 65 and 64 and are navigating through these steps. We opted for low taxable income in year 1 to preserve premium tax credit and will likely move to fill the 12% bracket going forward, we’ll see. Although well publicized, I can speak from first hand experience that completing the SSA-44 form, “life changing event”(retired), eliminated the IRMAA premium charge for Medicare with little fanfare. So, if you’re planning to work up to age 65 and concerned about IRMAA, based on my experience, you needn’t worry.
All good points to consider. I’ve found since recently retiring, many “rules” may not be the best path in all cases. E.G. #3 Asset location. Conventional wisdom calls for fixed income investments to be in tax deferred accounts and therefore only equities in after-tax. This certainly makes sense during accumulation phase. However, for retirees managing the “gap period” to SS, generating fixed income in after-tax accounts (to the top of a desired tax bracket) to be a comfortable way to generate predictable income. Thank you for the article, You covered a number of broad areas to consider.
Nice, very timely article. Thanks Howard.
The pace and magnitude of the rate increases during the last 6 months has inevitably resulted in buyers remorse. In May a 2 yr Treasury at 2.5% looked very strong. A 2yr CD at 2.9%, even better. Today, a 2yr CD (call protected) is available at 4.85%. What’s worked best for me has been to keep some powder dry and take what the (Fixed income) market gives you. In some cases a CD may be the best offering, in others a CD. The current money market yield at Fidelity, 3.78% (FZDXX), is not a bad yield if you’re trying to figure out next rung on the ladder.
Comments
Very good article, thank you. We both retired last year, just prior to 65 and 64 and are navigating through these steps. We opted for low taxable income in year 1 to preserve premium tax credit and will likely move to fill the 12% bracket going forward, we’ll see. Although well publicized, I can speak from first hand experience that completing the SSA-44 form, “life changing event”(retired), eliminated the IRMAA premium charge for Medicare with little fanfare. So, if you’re planning to work up to age 65 and concerned about IRMAA, based on my experience, you needn’t worry.
Post: Juggling for Retirees
Link to comment from January 21, 2023
All good points to consider. I’ve found since recently retiring, many “rules” may not be the best path in all cases. E.G. #3 Asset location. Conventional wisdom calls for fixed income investments to be in tax deferred accounts and therefore only equities in after-tax. This certainly makes sense during accumulation phase. However, for retirees managing the “gap period” to SS, generating fixed income in after-tax accounts (to the top of a desired tax bracket) to be a comfortable way to generate predictable income. Thank you for the article, You covered a number of broad areas to consider.
Post: New Rules for Success
Link to comment from November 26, 2022
Nice, very timely article. Thanks Howard. The pace and magnitude of the rate increases during the last 6 months has inevitably resulted in buyers remorse. In May a 2 yr Treasury at 2.5% looked very strong. A 2yr CD at 2.9%, even better. Today, a 2yr CD (call protected) is available at 4.85%. What’s worked best for me has been to keep some powder dry and take what the (Fixed income) market gives you. In some cases a CD may be the best offering, in others a CD. The current money market yield at Fidelity, 3.78% (FZDXX), is not a bad yield if you’re trying to figure out next rung on the ladder.
Post: Rebuilding My Ladder
Link to comment from November 16, 2022