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I'm guessing you're doing this to keep RMDs manageable, i.e. not growing so large that they kick you into a higher tax bracket.
I have a few personal strategy for dealing with RMDs. Consider strategically spending down these taxable IRA dollars first rather than raiding taxable accounts, Roth accounts or Health Savings Accounts, especially between the years of 59.5 and 70.5.
You're get an income reduction for the HSA contribution regardless of what's generating the income. That taxable income could be coming from taxable investments or from IRA distributions, or even from a Roth conversion. What matters is that you've got a fixed size "deduction" (the HSA contribution). So the IRA distribution is tax-free (due to the HSA) only to the extent that you have no other ordinary (taxable) income.Fund an H.S.A:
-Between the age of 59.5 and 65 (when you become medicare eligible) distribute a portion of your tax deferred IRA yearly equal to your maximum H.S.A contribution. This will provide a funding source for my H.S.A as well as make these IRA distributions tax free since there tax liability will be offset by the H.S.A contribution (income tax credit) for that same year.
You can use medical expenses as itemized deductions (subject to a floor of 7.5% or 10% of AGI). To do that, you're right, you can't pay them out of an HSA. This works for some people, but only if they've got really high expenses (relative to their AGI), and if they've got enough other itemized deductions to get them above the standardized deduction. At least I think that's what you're writing about here.Fund Itemize Medical Expenses:
- Between ages (65 -70.5) track medical expenses that are eligible as an itemized tax deduction. Do not use your H.S.A dollars during this time frame to pay for these medical costs. Instead, pay all of these medical expenses with yearly IRA distributions. Using IRA distributions as the funding source for medical related expenses may potentially lowering your taxes on these taxable distributions.
state-market-5-charts-august-2017The summer is rapidly closing and a new season will shortly be upon us. The seasonality of the markets this time of year has always been a tricky proposition as well. With that in mind, I’m going to outline my current thoughts on some of the big picture charts.
"The seasonal trend is for stocks to go soft during the summer ... especially, August."
Just off-the-cuff (without further research) I'd tend to agree. Some of the worst stock market sell-offs seem to have occurred in late summer or early fall. The '29 crash, the '07-'09 debacle, and a one-day drop of more than 20% in '87. However, unlike some, I would never risk being substantially underweight equities or largely absent from the markets out of some kind of observance of this historical pattern. To me there's just too big a risk of making an incorrect call and missing out on big gains.
Isn't investing interesting?
I'd agree Ol'Skeet. I consider that's a good reason to follow the postings at MFO and indulge in other
financial print/electronic media. As you well know, however, there are some (well ... 1 in particular here) who profess to find the ebb and flow of markets of little no interest and who are content to "peek" at their investments only once or twice a year. Different strokes for different folks.
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