I said that my Federal tax rates are irrelevant for your application.I’m confused, you said that federal tax rates are irrelevant, but now you acknowledge that ordinary income tax rates for future heirs are relevant.
"If an individual inherits a tIRA don't they have 10 years to withdraw the IRA as ordinary income and pay federal income taxes?"
Yes Federal and state - and you need to model what happens in those 10 years when their salaries are added to the tax deferred imcomes along with any other inherited parts of the portfolio - taxable, home, car, boat, life insurance, etc.
Changing an age of demise for one or both spouses and comparing scenarios to a base case is extremely quick with the calculators I posted above.
The articles speaks about the potential tax drag when comparing conversions which may have longer duration in Roth accounts before they require draining. That is not the same as taxes on a taxable account.
It seems that you don’t know what federal income tax rate is used to discount future tIRA values because the model you use is too complex to answer the question. Am I wrong?
Trying to model my daughters future income and tax rates only adds unknowable variables so no, I don’t “need to model” those when simply changing an ordinary tax rate shows me low sensitivity to that variable.
I also said I use the metric of total spendable portfolio value adjusted for inflation over the entire lifetime of the entire portfolio through the complete cycle with heirs/charity.
No, I know how the calculations work. I can also review them line by line on each of the calculators printout for each calculator.
I guess modeling your daughter tax rates are less complex - ours is on top of their earnings, includes10 years after transfer, plus any other portfolio assetts, plus estate taxes.
Statistics: Posted by smitcat — Thu Nov 21, 2024 7:21 am — Replies 37 — Views 2435