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How to cash out retirement plans?

How to cash out retirement plans?# Investment - 投资

K*D2009-03-16 07:03

1 楼

Say you are 65 years old and just retired. No other income, but your house
is paid off and you have a couple of fat retirement accounts:
$500k in Roth IRA.
$500k in other IRA.
$1M in 401k.
What's the good strategy to cash out these accounts gradually, so that
you may have a happy retirement life and triggers the least amount of
taxes?

k*t2009-03-16 07:03

2 楼

if you have 2m and you are 65 probably you won't use it up unless there is a
huge medical bill.
leave roth to your offsprings.

K*D2009-03-16 07:03

3 楼

So your idea would be cashing out normal IRA + 401k gradually for living
expenses; do not touch Roth until the other accounts are depleted.
How much tax do you or your children pay if you give them a $1M Roth
IRA account?

a

【在 k****t 的大作中提到】

: if you have 2m and you are 65 probably you won't use it up unless there is a
: huge medical bill.
: leave roth to your offsprings.

s*d2009-03-16 07:03

4 楼

I think to optimally cash out retirement plan is a very difficult problem.
The difficulty aligns with the fact that it is often a person choice and
that different optimization criterion requires different approaches. To some
people, paying less taxes is important; to others, having the money last
longer is important; or to maintain a steady and worry-free monthly payout,
or to keep the income on pace with inflation.
or think of it this way. Suppose that you have these 2M dollars and you will
die

【在 K****D 的大作中提到】

: Say you are 65 years old and just retired. No other income, but your house
: is paid off and you have a couple of fat retirement accounts:
: $500k in Roth IRA.
: $500k in other IRA.
: $1M in 401k.
: What's the good strategy to cash out these accounts gradually, so that
: you may have a happy retirement life and triggers the least amount of
: taxes?

s*d2009-03-16 07:03

5 楼

Roth IRA inheritance is not completely tax-free. You might want to google
this to make sure. For one thing, it might be counted as part of taxable
estate (federal estate tax applies somehow), and as to income tax, your kids
don't pay income tax on withdraws (there might be a 5-year requirement,
like the money has to be in the account for longer than 5 years, which
shouldn't be a problem in many cases, especially if your kids let the money
grow tax-free for a very long time).

【在 K****D 的大作中提到】

: So your idea would be cashing out normal IRA + 401k gradually for living
: expenses; do not touch Roth until the other accounts are depleted.
: How much tax do you or your children pay if you give them a $1M Roth
: IRA account?
:
: a

K*D2009-03-16 07:03

6 楼

Well, I assumed option (2) in the question -- spend less than 2M before
death. A person with 2M retirement balance is likely a person that likes
to save and plan, and thus his/her preference would be not to run into
situations that's short of cash.
Therefore, let's imagine by conservative planning, this guy has come up
with a plan to spend only $50k/yr on average, which is about $1.25M in 25
years (when he is 90). This should most likely take care of the
"uncertainty" to use up the retirement pl

【在 s*******d 的大作中提到】

: I think to optimally cash out retirement plan is a very difficult problem.
: The difficulty aligns with the fact that it is often a person choice and
: that different optimization criterion requires different approaches. To some
: people, paying less taxes is important; to others, having the money last
: longer is important; or to maintain a steady and worry-free monthly payout,
: or to keep the income on pace with inflation.
: or think of it this way. Suppose that you have these 2M dollars and you will
: die

s*d2009-03-16 07:03

7 楼

There is an age limit on taking distributions from tax-deffered accounts,
such as 401k or traditional IRA. The age usually is 70 1/2, and you have to
take out 4+% each year (I am not entirely sure of the number, but it should
be in the neighborhood of it). If you don't meet the distribution reqirement
, the government levels a 50% (yes, 50%) penalty on what you should have
taken out. In other words, with 1.5M in taxable accounts, you have to take
out 60,000 dollars a year. And you don't have to

【在 K****D 的大作中提到】

: Well, I assumed option (2) in the question -- spend less than 2M before
: death. A person with 2M retirement balance is likely a person that likes
: to save and plan, and thus his/her preference would be not to run into
: situations that's short of cash.
: Therefore, let's imagine by conservative planning, this guy has come up
: with a plan to spend only $50k/yr on average, which is about $1.25M in 25
: years (when he is 90). This should most likely take care of the
: "uncertainty" to use up the retirement pl