You'll pay a large amount of additional income tax to do that. I think it's a suboptimal idea, generally, to convert all of a substantial tax deferred portfolio to Roth by age 70. That's the only way you can subscribe to it.
I don't see the incremental value to me over MaxiFi alone and the latter is cheaper on an annual basis. I'll continue to play with Income Strategy for the rest of this subscription month but probably won't extend after that. Starting hers early allows us to preserve her assets, makes for much smoother cash flow, and significantly reduces the amount of term insurance required to assure financial security to her if I die early. In our case, that provides only a nominal difference over the life of our plan. I know benefits increase 8% per year deferred. In it, I set benefits to drop 25% in 2035, and for DW to start benefits at age 62.
(I prefer to include the Trustee's forecast of the trust fund drying up in 2035.) MaxiFi allows both. I have less than a couple of hours experience with Income Strategy but, so far, find no way to control the SS benefit strategy, nor to edit the benefit forecast. Both allow you to specify irregular spending events such as weddings, big vacations and long-term care. Instead of defining a desired spending level, as required by Income Strategy, MaxiFi maximizes your spending based on your desired terminal wealth. I have a lot of experience with MaxiFi (primarily through its predecessor, ESPlanner Plus) and find its theoretical basis more appealing to my way of thinking. Being able to cancel at any time makes that a low ante. Prompted by this thread, I subscribed to the basic plan. I hope that others might give this a try and post their feedback. I think that the recommended strategy that is generated may be contrary to conventional wisdom however, I am unaware of any other software, including i-ORP, that can forecast the most tax-efficient strategy at the end-game like this one. I have been very pleased with each session I’ve had and plan to have a few more to tweak it to perfection. Due to complexities of our various sources of income, I’ve already had a few sessions with them to refine our plan for optimum results. In my case, I felt $125/hr was reasonable for expert help. or several thousands of dollars for a plan, (I am opposed to an AUM based plan). Before I found the Income Strategy website, I had considered using other financial planners who either charge up to $450/hr. If you’d like to get additional help with your plan, it’s available for $125/hour. Continuing the subscription allows your details to be constantly updated, if you’ve linked your accounts with the software. Subscription can be terminated at any time, so for $20, you can come up with some pretty sophisticated retirement drawdown plans. Changing/revising inputted info will generate new details of the different strategies. It is up to you to choose which strategy suits your needs best.
I must say that this strategy appears to be a bit painful in the beginning due to a higher tax bracket than other strategies however, by doing so, it lowers the tax brackets for later remaining years of the plan which results with less overall taxes paid.Īgain, there are several strategies generated from the info inputted.
This would eliminate RMD’s from the picture.Īt age 70 and beyond, I would start living off of SS & PBGC pension with the previously converted tax-free Roth funds not needed. My wife, who is already retired and a year younger, would convert her IRA to Roth in year six of my retirement. The process for me involves using my first five years of retirement, (ages 65-69) to live off of and convert all of my tax-deferred accounts to Roth IRA. In my case, I liked the recommended strategy with the idea of having the highest account balance at the end for my heirs. Plan details of the different strategies can be reviewed and you can decide which plan works best for you. The recommended strategy is the one which is the most tax-efficient allowing for the highest account balance at the end period of your planned lifespan. Since there was no feedback from my original post on this and since Fidelity, (holder of all of our tax deferred funds), has told me that their retirement drawdown analysis planning is no longer a service they provide, I decided to try the $20/month subscription service.Īfter inputting personal information, several strategies are generated.
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