We are both in our mid-70s and retired. We’re collecting Social Security and pensions — meaning we can live comfortably. We are in fairly good health and keeping active. Our house is worth around $725,000 with no mortgage. We have no debt as we pay off credit bills each month.
I have $600,000 in my IRA, while my wife has $300,000 in hers. We have approximately $6 million in stock investments, all of which are long-term. Some of the stocks pay dividends totaling around $90,000 annually. Our son is well off in his job but works from home.
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‘It kind of takes the joy out of cruising.’ Some Norwegian Cruise Line passengers balk at new food-and-drink policies.
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‘We have been married for 10 years’: My children will get my estate — not my husband, who has $1.3 million. Is that fair?
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We’re in our 70s. How do we withdraw $6 million from our retirement fund without getting killed on taxes?
I know that selling my stocks will incur substantial capital gains, but I also don’t want to lose the substantial gains I’ve made. I know that I can contribute to a charity and reduce my tax liability but not that much. What’s my best move to minimize capital gains?
Buy another property or an island?
Comfortably Retired
Related: My mother has dementia. If I force her into memory care without a conservatorship, would that be considered kidnapping?
You are in the third stage of your retirement planning. Accumulation. Tick! Preservation and diversification. Tick! And now — drum roll — distribution. The 20% long-term capital gains cap for 2025 is $533,401 for a single person or $600,051 for a married couple filing jointly. Be aware of a net investment income tax that kicks in if your income exceeds $250,000 for married people, filing jointly.
You are, to employ a cliche, a victim of your own retirement success. You have invested so prodigiously that you have left yourself with a whopper of a tax bill if you were to withdraw large sums now. Your $6 million will never run out. But you’ve made it to your 70s in relatively good health, I assume, and you will now be planning your financial legacy. That may include setting up a trust for your son.
If you predecease your wife or if she predeceases you, you/she will receive a step-up in basis on some/all of your investments, meaning that their appreciation will be calculated on the date of death. If you live in a community-property state (Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin) you receive a step-up in basis on both of your respective portions.
