6 Powerful Ways to Use Your Taxable Account in Retirement

Just as good second time of watching, thanks. I like the leaky bucket for long term capital gains (so not leaking much), and tax loss and gain harvesting - very powerful, and yiu cannit do that in a retirement account.

Love your videos. The best quality on the internet for retirement financial planning. I have a new question that I hope you can address. Once you have maxed out your 401k or IRA, would it make any sense to fully fund a child's 529 plan, even if you thought there was a good chance you might not be able to use it for education. In other words, would it ever make any sense to fully fund a 529 plan with the INTENTION of paying the 10% penalty and tax to use it on non educational expenses some day, as compared to a taxable brokerage account, just to get the tax deferred capital gains ????????

I think MANY major savers miss or greatly underestimate tax efficient taxable accounts.

A fund like a broad based Vanguard Index fund, which rarely has ANY capital gains is generally VERY tax efficient. Since all you pay income taxes on is any dividends, and the dividends in, say, a S&P 500 or similar index fund can average 2 percent or less (let's call it 2 percent for illustration), then at a 25% income tax rate, that's ONLY 0.5 percent of the fund subject to tax annually.

Meanwhile there are NO limits to what you can save into that fund, unlike with IRA's, 401-K's, etc. And there are no big fees, unlike with annuities.

Now, at some point, if you take money from such a fund, much of that will be capital gains. Much like a tax deferred account. But there are no RMD's. YOU can choose when to take such gains, like if you have losses to offset that. Or you can choose to just hold onto the assets and let the basis step-up eliminate those taxes.

Thanks for the video and seem to cover a broadband for the taxable account. How is taxable account will help for FRA case or post retirement?. If you already discussed in previous video then please direct me to that video. Thanks

Id have to watch this video like 7x to understand half of what he just said

Tuned out as soon as you called ObamaCare "great insurance."

A word of caution about the health care market place. You are bound to the state that you purchase insurance in. If you get an exotic cancer and there is basic cancer care in your state you can not travel out of state to a specialist and have it covered. I was going to by insurance through the market place for 5 years until I learned this.

I didn’t hear you mention RMD. This is a huge factor for legacy planning. There is no RMD on Roth accounts. A huge reason for me to go Roth over traditional.

Note that you can use up your entire 0%bracket by harvesting cap gains as well.

What are you saying? Curtail saving once you have completely funded your tax deferred/free accounts? That’s ludicrous. I have more than triple in my savings “taxable “ accounts than in my tax advantaged accounts . Over 35 years I saved way more in my taxable brokerage and individual stock accounts. Should I just give this away? Also a regular 401k or IRA is smoke and mirrors and an IOU to the government.

So you are going to retire with some work income this year. You have to consider IRA to Roth Conversions, ACA Healthcare subsidies, when to take Social Security, IRMMA Penalties, future RMDs, how much to convert, where to pay taxes from, expenses, etc. Is there a software package that will take all this into account and provide best case scenario's for you?

Thank you. I really don’t understand#3. Do you have a video that specifically explains this?

By the way, calling any of the affordable care act health insurance plans “great insurance “ demonstrates that you’re not knowledgeable as to what these plans actually offer you. I am deep in the health care industry and would never have one of those plans if I didn’t have a death wish.

Thanks for your content.

my taxable accounts is what allowed me to retire at 55 after 25 yrs of investing for retirement. you can only put so much in retirement plans per year even if you have 401K plus backdoor roths. you also can't access it before 59.5( yes there is the rule of 55). the taxable takes up the slack. i retired with 50% taxable and 50% retirement funds/HSA for my networth. i am living on my taxable brokerage with plans to do roth conversions for the first 7 yrs in retirement( so far 2 yrs worth done). i pay roth conversion taxes out of it. i can decide which investments to liquidate (do i liquidate one that has only a 25% LTCGs and leave the multibagger alone for now or sell one that has a loss and harvest the tax loss to offset some generated gains) . it has lower ltcgs rates over regular or tax deferred income. it has the step up basis for legacy. since my retirement plans are mainly in index funds and my taxable account also had index funds from the early 2000s i was able to take more risk with individual stocks( as my core positions were in index funds) during the great recession which worked out for me. one thing that i am aware of and have not taken advantage of is exploiting the 0% bracket of LTCGs since i am doing conversions. i will likely do so at 63 y/o ( the year of the irmaa lookback).

A well funded taxable brokerage account is a huge superpower for any early retirees!

It's extremely unlikely that in a taxable account that only 25% would be taxable if it has been in there for any real length of time. I have positions that are only a few years old and 50% are gains. A person could be looking at 90%+ being gains on investments if it has been in there for decades.

graphics dont align with your speech. Confusing

Are ETFs less leaky than mutual funds from a forced income effect ? Specifically for a taxable brokerage account. Thanks

Great video! Started saving in taxable account 3 years ago before retirement. Now retired age 59 on ACA insurance with a HSA . We pay Zero for health insurance ! We pull around 35k from IRA and 25k from taxable account. Our MAGI is reported 30k for a 2k month subsidy for health insurance. With standard deduction and HSA contributions, we pay no income tax. Learned this from all your amazing videos Eric. Keep rockin!

Is the $50,000 reported income
Gross or AGI or Taxable income?

Also is the $50k amount adjusted yearly or does it stay the same year after year?

I thought I had a pretty good grasp on this level of finance. Still got a lot of new information to me.

Great as always, thanks Eric

All. My funds are in a roth so no taxes for me after next year when I retire

Almost 50K Subs! Grew up in Wisconsin -- now live in Texas. How do you guys offer consulting services - hourly, fee on assets, ?

Too bad 401k was drilled into all my life so I have 90% of my retirement in 401k/IRA. Kinda late for me on brokerage accounts as not much time horizon for gains.

Another great video. This channel is the consistently one of the most thoughtful and well presented sources of retirement planning across all mediums.

I’m not using my taxable account for Roth conversion. I use IRA money instead. The reason is because I over saved in IRAs and don’t want to get hit with RMDs later.

Another excellent video and discussion Eric. This will certainly be useful to your listeners as their personal situations might fit in the discussion. Great job!! Larry, Central Valley, Ca.

2nd !

First! 🙂