Hi Nicole, I'm assuming from what you said that these transfers will move a lot from bonds or cash to stocks? If that's the case, yes you may want to stretch the purchases out over time (we call this "dollar cost averaging") so there's less risk buying a lot of stocks just before a market drop.
Nicole - I'm glad you are reviewing and making allocation changes. If you are concerned about the timing, you may consider "averging in" your changes over a few months. In other words, instead of moving 50% today - move 20%/15%/15% over the next three months.
Karen - This depends on her income level. If she uses an accountant, they would be the best person to ask. If she prepares her own taxes, then look at the tax tables available on line and choose a percentage that closely matches her income.
Hi Gary Z., thanks for the question, but I think you would need to consult with a tax professional (which we are not here). Sorry!
Nicole - There is an argument within our industry about the benefits of dollar cost averaging vs. fully funding a well-diversified portfolio (wade vs. plunge.) If you will be investing in a very well - diversified portfolio, then doing so all at once may make sense. If you are not so diversified, then dollar cost averaging over a period may benefit you.
Nicole, this movement appears in your retirement accounts and has no tax consequence. In addition, you mentioned this is as per recommendation. I am assuming you are following a professional financial advice. I hope I am right on that. If so, what is the 'risk' you are worried about? Sorry I am missing on that
Nicole, my opinion is that you are thinking about it correctly. If it were me, I would probably plan to move it in over 6 months (so about $24,000 per month, or over 10% of your portfolio). If we get a big market drop and you are comfortable taking the risk, you could always speed up the schedule or put in a bigger chunk.
Elaine - FICA taxes are due on payments from non-qualified retirement plans. Some companies take care of these taxes when the money is deferred (which is usually better tax wise for you), some allow you to pay these taxes when you get the payments. I'd contact the company or deferred compensation provider to find out how they've handled this plan. You obviously don't want to pay these taxes twice.
Hi Readytoretire, can we get an idea of your current annual expenses? And would you expect those to be roughly the same if you retired, or would the nomad lifestyle increase them?
Readytoretire - First, I wish your husband the very best. Assuming favorable tax implications, I would treat the family property money as an annuity and go be a nomad. (Note, this is more of a lifestyle answer than a financial one.) There is a general rule that if funds are to be used within 2-3 years, they should not be invested.
Readyto retire, while we are addressing other questions, one quick point I want to make is: Cash in excess of emergency fund could be a drag. So, keeping the entire 90K family property proceeds as cash appears not the right decision. Of course, it depends the answer you give to Russel regarding your 'expenses'.
Dr. Steve - You could ask both SS and whoever is sending you your RMD to withhold the appropriate taxes to avoid estimated taxes. If you use an accountant, ask for their opinion on the amount to withhold.
Reatytoretire - I want to live as an international nomad as well! Keep what you need to take care of yourselves and travel and invest any excess. You have long lives ahead of you (30+ years) so I'd be looking to invest for the longer term. You may choose to invest the excesses a little more conservatively to get your overall asset mix towards 60/40 or 50/50 depending on your long-term spending needs.
Hi SH, in most cases we tell people to open a Rollover IRA (probably at the same place you have your Roth IRA) and roll over the 401k there. There are no tax consequences for a rollover (*edit* - but you want to make sure that it's done properly - either moved directly from one company to another, or if you receive a check for the 401k proceeds, make sure to deposit it immediately).
Hi SH - You have the option to roll the 401k over to an IRA or keep it where it is. You, most often, will have greater investment options (and maybe less expensive options) by rolling it over to an IRA. If you roll to an IRA, there are no tax implications.
Joe - As a "live advisor" I'm not sure I have an impartial view, but I think many robo advisors do a fine job in any economic environment. My biggest question is whether robos will be able to hold hands and keep clients on track through normal (and extreme) market fluctuations.
Hi Joe W, in my humble view, robot advisors are not 'listeners'. Thus, could compete in 'executing a plan' to some extent. However, planning for your unique situation, you are better off approaching a human advisor, who listens to you and possibly customizes the plan to your unique needs.
Hi Joe W., my personal concern with robo advisors is that there is no one for an investor to turn to during a market drop to keep them on the course (and keep them from making decisions they may regret later). It's not the robo advisors themselves, I think, but the behavior of investors that use them.
Joyce - This is a good question for your tax professional, but I think you'll be able to find a solid resource online if you look around.
Sis - An LLC is a limited liability corporation and is one of the easier corporate structures to establish. All income reported to an LLC passes through to your personal tax return (with no corporate tax) and there is no need to file separately for your taxes. An LLC also provides some legal liability but I'm not sure to what extent.
Sis, this is the kind of thing you want to review with a CPA. But know that you can file for an LLC online. I often use 4inc.com but nolo.com and other sites will work. When you are a 1 person LLC, you can be treated as a sole proprietor (default) which means you can include the business on Schedule C on your personal return. Or, you can elect a Subchapter S corporation for tax purposes (this has to be actively elected). If you go Sub S, you will have to have a official payroll and file quarterly reports and make regular tax deposits AND you will have to file a separate tax return Form 1120S.
Hi Sis, I will answer first question: LLC comes in two flavored: 1) Single member (a.k.a. Disregarded) and 2) multiple member. As a single member LLC, you can continue to file joint tax returns and for his LLC, he will just file a Schedule D. I am not a tax professional, so please do verify this information with you accountant.
Sis, also remember that while an LLC does provide some liability protection, the best protection is good business liability insurance.
Harry - I believe you're on the right track. By maximizing the husband's benefit you not only pick up the delayed retirement credits, but also create a higher survivor benefit for the wife if she survives the husband. In the meantime, by taking the spousal benefits under the wife's benefit, you also get some cash flow for four years until the higher "own" benefit kicks in.
I would visit a financial planner who uses detailed Social Security Analysis software. This is still a very complex decision and depends on each individual situation. Maximize My Social Security and Social Security Solutions are two software providers that assist with this analysis.
Harry - Every case is different and the "optimal" plan depends on a number of factors. We use software for our clients and run a number of scenarios to determine a recommendation. You may want to check out Maximize My Social Security's tools ($40). That being said, I think you are on the right track and filing for a restricted claim might be your best bet.