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William Perry

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    Do Farmers get to retire? Article recommended by Bill Perry

    4 replies

    AUTHOR: William Perry on 12/19/2024
    FIRST: Ben Rodriguez on 12/19/2024   |   RECENT: Mom & Dad Schneider on 12/20/2024

    The 2024 Bogleheads Conference videos are now available online

    1 reply

    AUTHOR: William Perry on 12/4/2024
    FIRST: David Lancaster on 12/5/2024   |   RECENT: David Lancaster on 12/5/2024

    John Rekenthaler's Farwell, For Now - by Bill Perry

    4 replies

    AUTHOR: William Perry on 11/15/2024
    FIRST: Olin on 11/15/2024   |   RECENT: G W on 11/15/2024

    Do you know about community property trusts? By Bill Perry

    3 replies

    AUTHOR: William Perry on 9/24/2024
    FIRST: Jonathan Clements on 9/25/2024   |   RECENT: William Perry on 9/25/2024

    David Enna's Tipswatch.com tribute to Bob Brinker

    11 replies

    AUTHOR: William Perry on 9/4/2024
    FIRST: Jonathan Clements on 9/4/2024   |   RECENT: William Perry on 9/5/2024

    New Inherited IRA RMD final rules

    9 replies

    AUTHOR: William Perry on 7/19/2024
    FIRST: William Perry on 7/19/2024   |   RECENT: KitchenPoet on 8/10/2024

    Trust - The reason I read Humble Dollar

    1 reply

    AUTHOR: William Perry on 7/28/2024
    FIRST: Dan Smith on 7/28/2024   |   RECENT: Dan Smith on 7/28/2024

    Comments

    • The Congressional Research Service on 9/23/2024 issued a summary report on this topic titled Social Security Benefit Taxation Highlights - https://crsreports.congress.gov/product/pdf/IF/IF11397 I have never seen in my reading information on how the IRS determines the amount of income tax that they attribute to the taxable amount of social security benefit on a particular 1040 that goes to the SSA trust funds. I would guess they are using simple linear math calculation and not the actual marginal taxes which could understate the amount of tax on social security benefits that should go to the trust. As far as taxation I think the defunct pension rules where what you have received in benefits are tax free until you get back all you have paid in and then amounts above that are taxable would be an objective way to determine the taxation of your benefits. I have 0% expectation that would ever happen.

      Post: Should Social Security benefits be income tax free?

      Link to comment from January 27, 2025

    • I expect we will not see comprehensive tax reform or reasonable levels of national deficit or debt control during my lifetime. With those beliefs I am planning accordingly to minimize our tax costs and maximize the inflation protection of our investments.

      Post: Whither Taxes?

      Link to comment from January 26, 2025

    • During my working years I favored paying for my disability insurance with post tax monies so that if I was unfortunate to have to claim a benefit under a disability policy that I would not have to include the benefit in taxable income. Insurance is best if you never have a need to make a claim. Per the IRS- You must report as income any amount you receive for your disability through an accident or health insurance plan paid for by your employer:

      • If both you and your employer have paid the premiums for the plan, only the amount you receive for your disability that's due to your employer's payments is reported as income.
      • If you pay the entire cost of a health or accident insurance plan, don't include any amounts you receive for your disability as income on your tax return.
      • If you pay the premiums of a health or accident insurance plan through a cafeteria plan, and you didn't include the amount of the premium as taxable income to you, the premiums are considered paid by your employer, and the disability benefits are fully taxable.

      Post: Taking Center Stage

      Link to comment from January 25, 2025

    • For those IRA owners with a required minimum distribution who are in poor health I would encourage them to consider a early in the year RMD. A common tax headache for a surviving spouse or other beneficiaries can occur when the IRA owner dies before taking their RMD and then in the year of death the decedent's un-taken RMD is also not taken timely by the beneficiary(s). The result is often needless correspondence with the tax authorities at a minimum or a possible tax penalty for a failure to take a timely RMD. For poor health and late in life IRA owners I put taking a early in the year RMD in the bucket of the things to do to make life easier for your beneficiaries.

      Post: Is there a best time to take an RMD? Does matter when?

      Link to comment from January 21, 2025

    • Thank you Patrick for the reference to the podcast. A classic Clements on life that I enjoyed listening to.

      Post: Money Grows Up

      Link to comment from January 18, 2025

    • Hi Jan, The passage of the SSFA appears to upend your planning on when you will claim your SS benefit and also allow a spousal benefit for your husband. I noted an extended article dated 1/15/2025 on the Kitces website that may have information that could be useful to you. https://www.kitces.com/blog/social-security-fairness-act-windfall-elimination-provision-government-pension-offset-spousal-benefits-government-pension-wep-gpo-repeal-retirement-latest-industry-news/ My thinking is that as it will take the Social Security Administration months at a minimum to put the SSFA provisions into effect and also the proposed changing the taxation of SS benefits are factors that you may want to consider in your decision to continue delaying your SS claiming or claiming now. You may want to wait to claim until you have better information available. I do not see in your comment if you are still working. As you are under your FRA your current SS benefit could be limited by your earned income until you reach your FRA which also could be an key item in your claiming decision. I waited until age 70 to claim my SS benefit based on my earning record but my wife is almost four years younger than me so our spousal situation was very different than yours. For me, waiting to claim during the time period from my FRA to age 70 was top of my mind for those four years. I am happy with my decision to wait to claim but like you I sure could have used a crystal ball. I hope my thoughts help. Best, Bill

      Post: Open Social Security – interesting finding on optimization and mortality tables

      Link to comment from January 17, 2025

    • Thanks! Your article reinforces my decision to keep my asset allocation generally the same. I have chosen re-balancing annually and have already completed doing so in 2025 based on my 12/31/2024 balances. I do have a home equity line of credit (HELOC) that I use to help hit my taxable income target by controlling the amount of tax deferred account withdraws and I treat that end of year HELOC balance as a negative amount in the cash/bond portion of my asset allocation. I would appreciate any thoughts if doing so is how other HD readers think about their asset allocation.

      Post: Limits of Power by Jonathan Clements

      Link to comment from January 17, 2025

    • Hi Ken, I like your list of ten actions that you have taken. A couple of comments from my experiences - #5 - Replaced our gas heating system - Our old natural gas central system heating failed in late 2008 and we also replaced with a more expensive but higher efficiency replacement option - a hybrid heat pump and gas system. The utility bill savings by themself over the next decade paid the cost for our new efficient system. Bonus for us was the unit qualified for a federal tax credit. Our unit manufacture (Trane) maintains a web site which advises if a credit is available for the model I purchased. I would expect most manufactures have a similar website. Doing a search for your model may be time well spent if a tax credit is available for your HVAC purchase. #7 - Funded Roth IRAs in retirement - I stopped full time work in 2022 at age 72 and a year after stopping full time work began working a seasonal part time job at a local CPA firm. As I continue to have earned income like you I am eligible to make make IRA contributions (either traditional or Roth) after year end for my wife and/or myself to hit my taxable income target after everything else is known. Also, some part time work may allow you to be in a company plan where you could make an elective 401(k) Roth contribution to the company plan which could effectively allow you to stash up to twice your earned income between the Roth 401(k) and/or IRA Roths. #10 - Fixed a date to begin taking Social Security - Our personal factors in deciding when to claim are about the opposite of each other. My wife is about 3 and 1/2 years younger than me, she had her own lower earning record and the traditional decision for the higher earning spouse to wait until 70 to claim made financial sense for us. As I was born in 1950 we had some restrictive SS claiming options that are now longer available to you. Your preliminary decision to claim at your wife's FRA appears to be a well considered one based on current SSA laws and rules. To me that is the rub given the TCJA tax law currently expires at the end of 2025 and there are incoming administration proposals that propose making SS benefits not taxable. My crystal ball on future tax rules has been broken for decades but given the current tax uncertainty I think if I were planning a 2026 SS claiming decision I would delay executing my final claiming decision until I had greater certainty of the future tax impacts of the decision. You currently have the option to make your claiming decision retroactive 6 months and the even after the six month window I would expect the difference in optimal lifetime benefits by delaying additional months may be nominal. Best, Bill

      Post: Retirement Realignment by Ken Cutler

      Link to comment from January 15, 2025

    • Today, 1/10/2025, the IRS issued IR-2025-07 regarding the proposed final catch-up regulations will be published in the federal register 1/13/2025 which starts the 60 day comment period clock on these regulations moving to becoming final. https://www.federalregister.gov/public-inspection/2025-00350/catch-up-contributions

      Post: Under the Tree?

      Link to comment from January 10, 2025

    • FQHC - Federally Qualified Health Center My primary care physician retired about two years ago. In 2010 I was his first patient since he had returned from serving as a medical volunteer in Haiti after a terrible earthquake. He shared that he had done more amputations in the month serving in Haiti than his previous decades as a primary care physician. We are are indeed fortunate for the medical doctors who chose a career path less traveled.

      Post: Why We Struggle

      Link to comment from January 4, 2025

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