{"id":51427,"date":"2023-08-22T04:22:15","date_gmt":"2023-08-22T08:22:15","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/my-husband-and-i-have-6-million-in-retirement-and-zero-debt-what-do-you-recommend-for-the-couple-who-has-everything\/"},"modified":"2023-08-22T04:22:17","modified_gmt":"2023-08-22T08:22:17","slug":"my-husband-and-i-have-6-million-in-retirement-and-zero-debt-what-do-you-recommend-for-the-couple-who-has-everything","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=51427","title":{"rendered":"My husband and I have $6 million in retirement and zero debt. What do you recommend for the couple who has everything?"},"content":{"rendered":"
We are 64 and 66, married 40-plus years and live in Maryland. We are healthy, blessed, and have no debt. We worked hard to maximize our retirement savings, and we now have $3 million, and $2.5 million in stocks, cash and CDs outside of retirement. We have not applied for Social Security, and have an annual income of $250,000 annually for the next 15 years from the sale of a business. Our home is in a family trust, paid for and valued at $650,000.\u00a0<\/p>\n
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We have two adult kids married with stable jobs, and one grandchild. We do not have long-term care insurance, and plan to self-insure if needed. We are generous to our church and local non-profits, and enjoy regular travel and hobbies. We do not spend extravagantly on stuff. Both of us will be retired in a few months, and we will be updating our estate plan, which currently is pretty simple with medical and durable power of attorney.\u00a0\u00a0<\/p>\n
What tips do you have to minimize taxes, maximize our holdings and leave a healthy nest egg for future generations? What should I be asking a financial-planning attorney? What types of trusts should be in place?<\/p>\n
Happily Retiring<\/p>\n
Dear Happily,<\/strong><\/h2>\n
Firstly, I\u2019d like to apologize for the headline. But you certainly are the couple who has everything or, put another way, went out and got it. You have savings, a home that is paid off, you like yourselves, and you are ready for the next chapter of your life. Nice work, if you can get it. The Moneyist should be asking you for advice! Congratulations, and many happy returns. Your story will inspire some and, let\u2019s face it, may irritate others. But you can\u2019t please everyone.<\/p>\n
There comes a time when you need to bite the bullet, and ask an adviser. Open-ended questions are as a good place to start with an adviser (\u201chow can you help me?\u201d) as they are a bad place to start at a dinner party (\u201cso tell me about yourself?\u201d). Do they know everything? No. Will they give you some guidance? Probably. Will they be secretly grinding their fingernails into their notepad as they find ways to advise you? Perhaps. They\u2019re only human, after all.\u00a0<\/p>\n
Everyone can use tips, and the more money you have saved, the more tax advice you will need. Cary Carbonaro, senior vice president and director of women and wealth at Advisors Capital Management in Winter Garden, Fla. says you should make sure all cash, certificates of deposit and dividend-paying stocks are paying enough to justify not<\/em> using municipal bonds. \u201cDefer Social Security and retirement account distributions as long as you can,\u201d she adds.<\/p>\n
With a lot of money comes a lot of responsibility. Review your beneficiaries, and perhaps set up tax-advantaged college plans for your grandchildren. Analyze your individual holdings annually for realizing capital losses where possible, to carry forward tax losses. \u201cYou may use those tax losses towards your installment sale income, assuming its tax treatment is long-term capital gains,\u201d she adds. \u201cLimit portfolio distributions to 3% to 4% of fair market value, annually.\u201d<\/p>\n
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\n \u201c<\/span>Spend time with your friends and family. You can buy yourself many things, but the one thing that a $6 million retirement will give you is freedom to choose where you want to be and with whom.\u00a0\u201d<\/span>\n <\/p>\n<\/p><\/div>\n<\/p><\/div>\n
Probate is the financial equivalent of hanging out your washing to dry for all the neighbors to see. So consider transfer-on-death instructions, or a revocable trust, Carbonaro adds. \u201cIf you wish to have your home avoid probate, consider re-registering your home to a revocable trust,\u201d she says. Alternatively, a qualified personal residence trust (QPRT) is a specific type of irrevocable trust that will allow you to remove your home from your estate for tax purposes.<\/p>\n
Tim Speiss, partner at Eisner Advisory Group, suggests you think about annual gifts for your family to avoid paying more taxes when you die. For 2023, the gift and estate tax exemption are $12.92 million per single person or $25.84 million per married couple. (As my MarketWatch retirement reporter Beth Pinsker points out, those rates will sunset at the end of 2025 without congressional action, and revert to levels prior to the 2018 Tax Cuts and Jobs Act.)<\/p>\n
\u201cThere is no mention of life insurance in place,\u201d Speiss says. \u201cContemplate obtaining life insurance, and utilizing a trust to own the policy. The trust will help safeguard the proceeds, and if structured properly, keep the proceeds outside of your estate, while allowing the trust to invest in income-producing investments, and for growth. Lifetime gifts that don\u2019t qualify for the annual exclusion will reduce the amount of gift and estate tax exemption.\u201d<\/p>\n
Of course, we can\u2019t complete your estate planning on these pages. That\u2019s why you should consult an estate-planning attorney. Each state has a different set of rules, so Carbonaro further suggests asking your estate-planning attorney if there are any specific estate-planning vehicles unique to Maryland law. You\u2019ve put in the time, patience and hard work. This is the fun part: enjoy your retirement and plan ahead to reduce your tax bill after you\u2019ve gone.<\/p>\n
Most importantly, you should enjoy the years ahead. Play tennis or bridge \u2014 or whatever floats your boat \u2014 and visit those places on your bucket list \u2014 Japan? Australia? Easter Island? Ireland? (I\u2019m putting in an honorable mention for the Moneyist\u2019s birthplace.) Spend time with your friends and family. You can buy yourself many things, but the one thing that a $6 million retirement will give you is freedom to choose where you want to be and with whom.\u00a0<\/p>\n
And that \u2014 whether you have $6 million or less \u2014 is the biggest luxury of all.<\/p>\n
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Readers write to me with all sorts of dilemmas.\u00a0<\/em><\/strong><\/p>\n
By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties<\/em><\/strong>.<\/p>\n
The Moneyist regrets he cannot reply to questions individually.<\/em><\/strong><\/p>\n
More from Quentin Fottrell:<\/strong><\/p>\n
Do children get 529 accounts in a divorce? My in-laws opened two plans for our kids, but their marriage is on the rocks.\u00a0<\/p>\n
I\u2019m only interested in zero risk\u2019: I\u2019m inheriting $100,000. Is a 5.5% CD a good rate? Where else should I invest?<\/p>\n
My sister squandered our parents\u2019 millions, asked me to give her $10,000, then made me a tempting offer. Should I take it?<\/p>\n<\/p><\/div>\n