Last time I purchased new car I researched new and used and the average % the manufacturer’s model typically sold below MSRP. If I recall at the time that particular model new sold 6% below MSRP. I visited dealer and test drove 3-4 days before end of quarter and we were also closing in on the end of model year. I made an offer which was not accepted by the dealer and I left on friendly terms to “let me think about it”. I left my phone number and received a call on the last day of the month and advised my offer was now accepted. I assume they had their quotas/numbers to meet. I was not in a particular hurry and had time on my side which provides a little leverage when timed correctly.
Agree IRMAA threshold is a careful consideration, as is taking distributions before 59.5 yrs of age which will under most circumstances also incur penalties. The above comment was purely addressing the tax penalty situation associated with a large end of year conversion and treating tax payment on the Roth conversion as a witholding, rather than incurring a penalty for underpayment if estimated taxes were paid instead and not reported correctly to the IRS. The multi step process illustrated pays taxes from a brokerage account which is widely regarded as more tax efficient than paying from an IRA when performing the conversion. When performing Roth conversions the impact on gross income and IRMAA premiums from the age 63 onwards as you mentioned are an important consideration. One dollar too much can move you up a bracket and be quite costly. No matter whether the tax is paid from brokerage or from the IRA the amount of tax paid dollar for dollar is the same. Paying taxes from brokerage allows more to be transferred into the Roth ‘tax free’ envelope.
I asked Gemini to develop a strategy for a large 4th quarter roth conversion and desire to treat taxes as a withholding and to take taxes from a brokerage account. After some back and forth arrived at the following. I would be interested if the tax gurus on HD see any fatal flaws? There is one unique loophole if you absolutely want the payment to be classified by the IRS as a withholding rather than an estimated payment.
The IRS treats all retirement account tax withholdings as if they were paid evenly throughout the entire year, regardless of the actual date the withholding took place.
If you want to exploit this rule to completely bypass the need for filing Form 2210 Schedule AI at tax time, you can do a two-part transaction using both your retirement and brokerage accounts:
1. The Pure Conversion: Convert the desired amount from your Traditional IRA to your Roth IRA, selecting 0% withholding so the entire balance moves safely into the Roth.
2. The Tax-Withholding Distribution: Take a separate, deliberate distribution from your Traditional IRA directly to the IRS as a 100% tax withholding to cover the tax bill.
3. The Brokerage Backfill: Immediately use cash from your Schwab brokerage account to execute a 60-day rollover contribution to your Roth IRA to replace the amount you just distributed for taxes from your traditional IRA.
Why this works:
Because the IRS views the tax withheld in Step 2 as having been paid equally across Q1, Q2, Q3, and Q4, it automatically erases any underpayment penalties for the earlier quarters. By backfilling the Roth IRA with cash from your brokerage account within 60 days, you ensure that the total money distributed from your traditional IRA is converted to your Roth IRA, taxes are a withholding and in effect funded from your brokerage account. Warning on the Loophole: You are only allowed one 60-day indirect rollover per 12-month period. If you have already executed an indirect rollover recently, you cannot use this method.
Some interesting YTD (June 22, 2026) stats on S&P 500, Mag 7 and diversification: Mag 7 +1.34% YTD
S&P 500 +9.16% YTD
S&P 493 +14.76% YTD The 493 have been doing the heavy lifting. Mag 7 stocks off their highs: Microsoft -32.23%
Meta -28.63%
Netflix -45.58%
Alphabet -12.60%
Amazon -15.35%
Tesla -17.32%
Nvidia -11.39% The rotation out of Mag 7 has been going on for about a year and the market is still near all time highs. Diversification is doing what we hope it will do and is being achieved with index funds.Where is the money going? Some examples YTD: Russell 2000 (IWM) +21.67% YTD
Small cap value (AVUV) +20.87% YTD
Vanguard Value (VTV) +15.1% YTD
Vanguard mid cap (VO) +11.30%
MSCI Emerging Markets (EEM) +30.78% YTD It is possible to have a diversified portfolio which keeps the overweight of the Mag 7 in the S&P 500 in balance.
I agree that there are other places to keep keep liquid funds other than bank savings accounts. For the last few years I have used Apple savings which is easy to use and funds available at the click of a button (takes a day or two to show up in bank account), current interest rate is 3.4%. An additional consideration is whether or not to keep treasuries, which are intended for the longer view / asset allocation purposes, in tax deferred accounts to avoid the tax drag as dividends are considered ordinary income in a taxable account. Another option is municipal bond etfs in taxable accounts. The dividends are not subject to federal income tax but the income does count towards modified adjusted gross income (MAGI) for IRMAA income bracket calculation which is a consideration from 63 years old and beyond.
It’s been a minute but my early forays performing financial analyses with Chat GPT were very frustrating and seemed more focused on the CYA small print. But things change. Subsequently, I found Gemini to be more useful, but it is ‘eager to please’ and it is easy to go down the rabbit hole. Additionally, I frequently find myself reminding it of meaningful facts from earlier in the dialogue. I have not yet spent much time using Claude. Next on the list. Most recently I started evaluating Roth conversions, customized to my specific portfolio construction and tax situation. With Gemini I arrived at what seems to be a good plan. Before acting on this, I plan on testing this two ways. Firstly, utilizing Claude and if that checks out, then subscribing to Boldin (formerly known as NewRetirement) which is financial modeling and projection platform to triple check the analysis. Which will have to wait for summer travels to be completed 😊
I remember visiting Ireland with my father as a teenager. A local in my father’s hometown referred to someone “having more tricks than a lorry load of monkeys” which as stuck with me nearly 50 years later.
We have a little over 200 units / 18 story building and the associations insurance covers the building shell and structure. I assume because of the $$$ involved this is a commercial policy. I was advised by one of the board members of the 20 year requirement. I am not sure if this is a Florida thing for hurricane resilience or a way to keep the premiums manageable?
Comments
Last time I purchased new car I researched new and used and the average % the manufacturer’s model typically sold below MSRP. If I recall at the time that particular model new sold 6% below MSRP. I visited dealer and test drove 3-4 days before end of quarter and we were also closing in on the end of model year. I made an offer which was not accepted by the dealer and I left on friendly terms to “let me think about it”. I left my phone number and received a call on the last day of the month and advised my offer was now accepted. I assume they had their quotas/numbers to meet. I was not in a particular hurry and had time on my side which provides a little leverage when timed correctly.
Post: Buying a car in retirement
Link to comment from July 15, 2026
Agree IRMAA threshold is a careful consideration, as is taking distributions before 59.5 yrs of age which will under most circumstances also incur penalties. The above comment was purely addressing the tax penalty situation associated with a large end of year conversion and treating tax payment on the Roth conversion as a witholding, rather than incurring a penalty for underpayment if estimated taxes were paid instead and not reported correctly to the IRS. The multi step process illustrated pays taxes from a brokerage account which is widely regarded as more tax efficient than paying from an IRA when performing the conversion. When performing Roth conversions the impact on gross income and IRMAA premiums from the age 63 onwards as you mentioned are an important consideration. One dollar too much can move you up a bracket and be quite costly. No matter whether the tax is paid from brokerage or from the IRA the amount of tax paid dollar for dollar is the same. Paying taxes from brokerage allows more to be transferred into the Roth ‘tax free’ envelope.
Post: Don’t Let a Roth Conversion Trigger a Penalty
Link to comment from July 13, 2026
I asked Gemini to develop a strategy for a large 4th quarter roth conversion and desire to treat taxes as a withholding and to take taxes from a brokerage account. After some back and forth arrived at the following. I would be interested if the tax gurus on HD see any fatal flaws? There is one unique loophole if you absolutely want the payment to be classified by the IRS as a withholding rather than an estimated payment. The IRS treats all retirement account tax withholdings as if they were paid evenly throughout the entire year, regardless of the actual date the withholding took place. If you want to exploit this rule to completely bypass the need for filing Form 2210 Schedule AI at tax time, you can do a two-part transaction using both your retirement and brokerage accounts: 1. The Pure Conversion: Convert the desired amount from your Traditional IRA to your Roth IRA, selecting 0% withholding so the entire balance moves safely into the Roth. 2. The Tax-Withholding Distribution: Take a separate, deliberate distribution from your Traditional IRA directly to the IRS as a 100% tax withholding to cover the tax bill. 3. The Brokerage Backfill: Immediately use cash from your Schwab brokerage account to execute a 60-day rollover contribution to your Roth IRA to replace the amount you just distributed for taxes from your traditional IRA. Why this works: Because the IRS views the tax withheld in Step 2 as having been paid equally across Q1, Q2, Q3, and Q4, it automatically erases any underpayment penalties for the earlier quarters. By backfilling the Roth IRA with cash from your brokerage account within 60 days, you ensure that the total money distributed from your traditional IRA is converted to your Roth IRA, taxes are a withholding and in effect funded from your brokerage account. Warning on the Loophole: You are only allowed one 60-day indirect rollover per 12-month period. If you have already executed an indirect rollover recently, you cannot use this method.
Post: Don’t Let a Roth Conversion Trigger a Penalty
Link to comment from July 12, 2026
Some interesting YTD (June 22, 2026) stats on S&P 500, Mag 7 and diversification: Mag 7 +1.34% YTD S&P 500 +9.16% YTD S&P 493 +14.76% YTD The 493 have been doing the heavy lifting. Mag 7 stocks off their highs: Microsoft -32.23% Meta -28.63% Netflix -45.58% Alphabet -12.60% Amazon -15.35% Tesla -17.32% Nvidia -11.39% The rotation out of Mag 7 has been going on for about a year and the market is still near all time highs. Diversification is doing what we hope it will do and is being achieved with index funds. Where is the money going? Some examples YTD: Russell 2000 (IWM) +21.67% YTD Small cap value (AVUV) +20.87% YTD Vanguard Value (VTV) +15.1% YTD Vanguard mid cap (VO) +11.30% MSCI Emerging Markets (EEM) +30.78% YTD It is possible to have a diversified portfolio which keeps the overweight of the Mag 7 in the S&P 500 in balance.
Post: Billy’s Certificate – 1937
Link to comment from June 25, 2026
I agree that there are other places to keep keep liquid funds other than bank savings accounts. For the last few years I have used Apple savings which is easy to use and funds available at the click of a button (takes a day or two to show up in bank account), current interest rate is 3.4%. An additional consideration is whether or not to keep treasuries, which are intended for the longer view / asset allocation purposes, in tax deferred accounts to avoid the tax drag as dividends are considered ordinary income in a taxable account. Another option is municipal bond etfs in taxable accounts. The dividends are not subject to federal income tax but the income does count towards modified adjusted gross income (MAGI) for IRMAA income bracket calculation which is a consideration from 63 years old and beyond.
Post: Beyond Bank Accounts
Link to comment from June 13, 2026
It’s been a minute but my early forays performing financial analyses with Chat GPT were very frustrating and seemed more focused on the CYA small print. But things change. Subsequently, I found Gemini to be more useful, but it is ‘eager to please’ and it is easy to go down the rabbit hole. Additionally, I frequently find myself reminding it of meaningful facts from earlier in the dialogue. I have not yet spent much time using Claude. Next on the list. Most recently I started evaluating Roth conversions, customized to my specific portfolio construction and tax situation. With Gemini I arrived at what seems to be a good plan. Before acting on this, I plan on testing this two ways. Firstly, utilizing Claude and if that checks out, then subscribing to Boldin (formerly known as NewRetirement) which is financial modeling and projection platform to triple check the analysis. Which will have to wait for summer travels to be completed 😊
Post: ChatGPT’s Portfolio Advice
Link to comment from June 7, 2026
Look after the pennies and the pounds of coffee will look after themselves? Sorry!
Post: Dickie and his magic beans
Link to comment from May 10, 2026
I remember visiting Ireland with my father as a teenager. A local in my father’s hometown referred to someone “having more tricks than a lorry load of monkeys” which as stuck with me nearly 50 years later.
Post: Living On Autopilot
Link to comment from May 9, 2026
It’s hard turning off the “reinvest dividends” button 😊
Post: Slow on the Draw
Link to comment from May 9, 2026
We have a little over 200 units / 18 story building and the associations insurance covers the building shell and structure. I assume because of the $$$ involved this is a commercial policy. I was advised by one of the board members of the 20 year requirement. I am not sure if this is a Florida thing for hurricane resilience or a way to keep the premiums manageable?
Post: The condo, HOA, senior citizen conundrum
Link to comment from April 20, 2026