TIL that the ACA tax is even within the 15% bracket. I’m very aware of the ACA tax (if that’s referring to the IRMA tax effects), but am in a higher bracket than that, primarily due to Roth conversions. That said, I remain in favor of graduated income taxes, including IRMA, and would prefer even steeper graduation. (But count me opposed to the “cliff” nature of the IRMA breakpoints, would prefer % taxes, with graduated marginal rates.)
For qualified dividends and long-term capital gains the 15% tax rate extends above half a million dollars of total income.
Look into an irrevocable trust to place that money in with you and your sister listed as trustees.
This has the benefit of protecting your mother’s assets from a lot of things . . . and without a lot of tax implications (there are some, but they’re far easier to deal with, IMO, than gift taxes).
An estate planning attorney can help you get one set up . . . and IMO, they’re not that expensive to do (compared to some other solutions).
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Also if you or your sister has a prepaid legal plan available through work and you’re still in open enrollment, maybe sign up for that.
I should mention that I have one set up for my wife (she has cerebral palsy) and it’s listed as the beneficiary of several of my benefits (including life insurance).
I’m torn about that (not that I have close to that much income from those sources). I do favor lower rates on qualified dividends and long-term capital gains than on ordinary income, but maybe not that much lower.
They would pay a little more than 15% due to the investment income tax, wouldn’t they? 1.8% or 2.8% more, maybe. I forget the exact rate.
3.8% more if you are single or head of household and your MAGI exceeds $200,000. $250,000 if married filing jointly.
If the investment income pushes you over the threshold then you only pay it on the bit that exceeds the threshold.
“You really have to see it yourself, pictures don’t do it justice” definitely applies to many of the views in Arizona.
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OK. I do get hit with that, due to Roth conversions. Not opposed to that tax, or that there is a large 0% bracket for it.
I’m not trying to beat the S&P, my retirement goals are just based on hitting an annual 6% return on average. I’m also not really comfortable investing on my own, and a Vanguard target date fund is pretty easy and low-cost, right? What do other people invest in instead, I’m curious?
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Our biggest holding is Vanguard Index 500. At my wife’s urging we moved all of my IRA assets to Edward Jones. Higher management fees, unnecessary in my opinion, but the biggest motivation was greater transparency to her over the asset position. (Nothing was being hidden from her, but now easier for her to see, especially since EJ reports can include the Vanguard assets.) Also more formalized asset allocation and rebalancing, with lower risk tolerance targets. Even when I had most of the assets with Vanguard, there was a significant proportion in fixed income. Not 50%, and still not 50% with EJ, but fixed income percentage now is higher. EJ considers the Vanguard assets in determining the asset mix for the EJ assets.
I don’t think I ever used a Target fund. Considered I could do OK with a mix of individual funds, probably with slightly lower cost. Almost all my Vanguard funds were index funds, and I don’t think (not sure) that the Target funds are 100% blends of index funds.
I won’t discount the merits of the simplicity of a single fund. Much of the complication in our case is that we have large unrealized gains in the Index 500, which would be taxed right away on any assets moved to a different fund.
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All of my Ira money is with vanguard index funds . It was allocated a small percentage to small caps and the rest in SP500.
I’m closer to retirement (using “traditional ages”) than you are (by about a decade I believe ) and got really nervous about the current price to earnings ratio …and then there was the incredible bump in the markets after Election Day, so I’ve completely bailed right now…
If I were at your age, I’d be all in on vanguard’s sp500 fund and small caps…because I have a healthy risk tolerance when combined with a long time period….I can’t stress enough that this is not what I think you should do, it’s what I would do.
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A Vanguard Target Date Fund!
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Cash to take my wife to an “upscale version of Walmart”!!
interviewing someone this week for an entry level job. realized we had some people in common and then further realized that the candidate’s parent got a job I had interviewed for like 15 years ago. (the parent was a better fit than I was and i realized that at the time too). i doubt it comes up in our brief chat!
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It would be cruel to act like you’re still salty after all these years and the current interview was just a chance to rub the kid’s face in the fact they won’t be getting the job.
Not salty at all. Just a random thought/coincidence. I hope the kid does great bc at least insusoect they are prepared for the interview and industry
i suspect??
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Oh yeah, you didn’t seem so, but that would be a tv movie quality set up right there.
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I suspect.
working fast without copy editors over here!
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