Just got this little booger via email from TRP. Their findings show that 7 of 10 in retirement are still possessed of a saver's mentality----- willing to adjust their withdrawals if needed in order to be prudent. (I suppose what's unstated here is that most retirees are not wealthy. If they were rich, they'd not worry about this stuff at all, eh?) TRP offers a little test. Where do YOU fall on the continuum?
https://www.troweprice.com/personal-investing/resources/insights/spenders-vs-savers-how-to-determine-your-retirement-spending-personality.html?cid=PI_Single_Topic_NonSubscriber_RET_EM_202210&bid=1099700455&PlacementGUID=em_PI_PI_Single_Topic_EM_NonSubscriber_202210-PI_Single_Topic_NonSubscriber_RET_EM_202210_20221006&b2c-uber=u.C70CEE71-16A5-E6FF-FF67-9E86F48AE56B

MAGI calculation for IRMAA includes only the taxable portion of Social Security. The entire amount of SS is included in other MAGI calculations, e.g. for Medicaid. Below is the major part (but not all) of a table from a Congressional Research Report showing MAGI calculations for IRMAA and other health related programs.

https://sgp.fas.org/crs/misc/R43861.pdf
Reducing income to just what one needs is letting the tail wag the dog. If I have $1M in cash, which is better:
- Buying 3 month T-bills generating $30K (annualized) in taxable income and increasing my Medicare Part B premium by less than $1K, or
- reducing this unneeded income to zero (and saving with lower income taxes and lower Medicare premiums) by keeping that cash in a non-interest-bearing checking account?
Note that I've taken risk out of the equation by using short term Treasuries.
Just as one optimizes taxes by smoothing income before retirement (e.g. by shifting deductions such as contributions and property taxes from one year to the subsequent or previous year), the idea in retirement is to smooth income in retirement, rather than reduce it. That's where incremental Roth conversions help.
Optimal in many circumstances can be putting money, to the extent allowed, into HSAs. Unlike Roth contributions, HSA contributions are not taxable. With the exception of a few states, earnings while in HSA accounts are not taxed.
SS income is included for IRMMA calc. So, if a surviving spouse claims SS based on higher benefits earned by deceased spouse, that could increase Part B premiums.
The effect is the same regardless of whether the higher benefits come from the deceased spouse or from the surviving spouse. Pre-death, the taxes don't depend on which spouse had the higher benefits (assuming MFJ - income is combined). Post death, the surviving spouse receives the higher benefit regardless of whether that comes from the deceased spouse or the surviving spouse.
Moving from a higher State income tax to a no to low State income tax State in retirement is another good way to keep more of what you worked so hard for during your working life.
Often not. There's much more to the calculation than state income tax rates. An excellent, very long piece on the Kitces site (I've read much but not all of it) discusses several different factors and how the situation depends not only on income tax rates, but on the mix of income sources, on the level of income, etc.
https://www.kitces.com/blog/state-income-tax-retirees-top-marginal-rates-social-security-pension-income-age-exemptions/
One example from that page to illustrate this:

Example 4: James and Dolly Madison anticipate that they will each receive $18,000 of Social Security income and $19,500 of qualified-plan income during retirement, for a combined total income of $75,000 each year.
With their retirement income mix, the Madisons would have an estimated $0 state tax bill in 24 states! Notably, this list includes Illinois, New Jersey, and New York, states commonly thought of as high-tax states.

Seems like in retirement one should not (1) generate (SS income, RMD, + investment income, cap gains, etc.) more income than one needs and (2) take investment risks that could result in generating more than (1). Also, is it reasonable to say that take equity risk (e.g., equity ETFs) in taxable accounts and put fixed income (e.g., Treasuries) in the IRAs, relatively speaking?
The above does not apply to Roth accounts. Seems like having almost all your assets in Roth accounts could be the most ideal, provided you meet the penalty free withdrawal requirements so you can access the money but have least obligation to the government. (BTW, I have insignificant amounts in Roth accounts.)
SS income is included for IRMMA calc. So, if a surviving spouse claims SS based on higher benefits earned by deceased spouse, that could increase Part B premiums. Moving from a higher State income tax to a no to low State income tax State in retirement is another good way to keep more of what you worked so hard for during your working life.
Finally, seems like one should try to keep built in gain (net of transaction costs) in their primary residence within the exemption amounts to avoid income tax and additional Part B premiums. So, sell your primary residence (i.e, move) more often than you otherwise would without this exemption amount.
Congratulations to those who plan their lives well.

@bee
Thanks for a re-do of Roth conversions. These have been discussed here for many years; but a good reminder for those who may not be familiar and new to this investment area.
@davidrmoran
I presume you're referencing, in part; a non-spousal inheritance of your Roth's, that Secure Act provisions require non-spousal inheritance amounts be withdrawn within a 10 year period, but will not be taxed upon withdrawal. As long as the Roth has been in place for 5 years. Yes?
@msf
Good reminders for everyone regarding charity and IRMAA.
et al Keep in mind that tax rates will become "different" after the Trump era tax changes expire in 2025. Whatever the rates become, could impact some of your taxable income, which would include RMD's. Yup, not that far away for planning purposes.
Below links do not require a log-in.
Fidelity Roth conversion Q & A
Fidelity Roth conversion calculator
Lastly, relative to the thread topic; everyone's monetary needs and asset base are different.
Remain curious,
Catch

smartest estate move I ever did, almost all Roth now in retirement

@BenWP,
… Starting SWR prior to RMD may actually help lower RMD. Roth conversions early in retirement might also help lower RMDs. If SWRs come from tax deferred accounts they are a component of RMD. If SWR withdrawals are lower than RMDs, the remaining RMD dollars (after taxes are paid) could be contributed to a Roth IRA (if you or your spouse have work income).

This has been a point of friction in my household. I want to do Roth conversions while my wife thinks it is crazy to pay taxes today that will otherwise be due in 12 years. I tell her the tax will be higher then. She is unfazed.

@bee : You said , "Starting SWR prior to RMD may actually help lower RMD ." So true !
When I retired I took what I thought I needed to live thru the year from IRA. Why, because I didn't start SS until 70. Also ran a few "Montys" to see some what ifs. Also the 15 or 20 times income to long term saving came into play.
For those that can't control their spending in Retirement, will probably see a sharp drop in their accounts. Inheritance would also help the heavy spenders or winning the lottery. No such luck here !
As said before, different strokes for different folks, Derf
P.S. Good luck to all with your
withdrawals, most here won't
have a problem.

@BenWP,
RMD are taken for tax purposes. The government wants to collect deferred taxes on the deferred arrangement of certain retirement accounts. Our budget should budget for these tax payments. Starting SWR prior to RMD may actually help lower RMD. Roth conversions early in retirement might also help lower RMDs. If SWRs come from tax deferred accounts they are a component of RMD. If SWR withdrawals are lower than RMDs, the remaining RMD dollars (after taxes are paid) could be contributed to a Roth IRA (if you or your spouse have work income).
I Do Not Need My IRA RMD. Can I Put It in a Roth IRA?

It seems to me that the fundamental concept of an SWR is to establish a constant rate that will be used during retirement, come what may.
If we're going to be adjusting the SWR up and down depending on market conditions (which makes perfect sense to me), then we don't actually have an "SWR", but rather a "DSWR", as bee suggests.
Which takes us back to the original Market Watch article, which as far as I'm concerned, is mostly baloney. As I said above, various actors, needing to fill up the space required for their commentary, pick and choose whatever they need to "prove" whatever point that they're trying to make. As long as the required space is filled, all is OK. These guys don't get paid to be right- they get paid to fill up space.

Whatever he did with his stake, I think he still has enough to live comfortably after retirement by withdrawing only 2.26% each year. Such incredible sums blur my vision and affect my thinking.

"SWR (which is type of payout...that hopefully last a lifetime) should have in it's SWR methodology considerations for performance ( in both up and down markets)."
I'm surely not math gifted but how could that could be done? How could a Safe Withdrawal Rate methodology possibly predict what types of market conditions, either good or bad, might exist in any given time span?
Yes, one can construct a bracket of simulations that cover a range of overall market conditions in a given number-of-years time frame, and in fact I did exactly that over a span of fifty years prior to retirement. That helps one to see what range of asset mixes would be required to insure a decent retirement over a given length of time.
But that's a different animal than a projection that yields a number that guarantees an optimal withdrawal percentage over an entire retirement time span. If such a projection erred substantially in predicting poor market conditions, the retirement pot would be underfunded. If it erred substantially in predicting unusually good market conditions, then the retirement scheme would provide significantly less income than possible. "Safe", yes, but not terribly efficient.
Seems to me that there's no such thing as "one ring to rule them all" in financial projections over a long period of time.

I was trying to understand how the seemingly open-end funds listed in this month's Commentary article are not for sale in the same way that close-end funds do trade on equity markets. The following explanation on Schwab's website cleared things up for me:
"Interval funds are not available for purchase by individual investors.
Interval funds are closed-end funds that offer daily purchases and redeem shares by periodically offering to repurchase a certain portion of shares from shareholders (“tenders” or “redemptions”). Rules and regulations related to interval funds enable fund companies to create portfolios with less capital volatility while holding a greater percentage of less-liquid, longer-term investments, often with higher risk-return opportunities than may be readily achieved in open-end mutual funds or exchange-traded funds (ETFs).
Although interval fund purchases resemble open-end mutual funds in that their shares are typically continuously offered and priced daily, they differ from traditional closed-end funds in that their shares are not sold on a secondary market. Instead, periodic repurchase offers are made to shareholders by the fund. The fund will specify a date by which shareholders must accept the repurchase offer. The actual repurchase will occur at a later, specified date. If repurchase requests exceed the number of shares that a fund offers to repurchase during the repurchase period, repurchases are prorated (reduced by the same percentage across all trades) prior to processing. In such event, shareholders may not be able to sell their expected amount, and would potentially experience increased illiquidity and market exposure, which could increase the potential for investment loss."
FWIIW, I own QREARX in my retirement account at TIAA. It's up about 12% YTD, offering nice ballast.

How many of those Vanguard defined contribution accounts are held by people who have only worked for their employer a few years? How many of those participants have other DC accounts at former employers or have additional retirement savings in IRAs?

Vanguard estimates that a typical participant should target a total contribution rate of 12% to 15%, including both employee and employer contributions. Forty-seven percent of participants had total employee and employer contribution rates that met those thresholds or reached the statutory contribution limit.

https://institutional.vanguard.com/content/dam/inst/vanguard-has/insights-pdfs/22_TL_HAS_FullReport_2022.pdf
If one were to include IRA contributions, the percentage of participating employees meeting the recommended thresholds would be higher.
------
Hulbert grossly misread the BC study, or I did. That study contains only a single graph with a 12% figure in it. That is the rate of coverage by both defined contribution and defined benefit plans. The study says that 73% of workers were covered by DC plans alone in 2019.
As far as actually participating (having accounts) in DC plans is concerned, the BLS reports that in private industry (in 2021), 68% of workers had access to retirement plans. 75% of those participated. In other words, a majority of workers in private industry had retirement accounts.
Government workers? Even better. 92% had access to retirement plans, and 89% of those participated. over 4/5 of government workers had retirement accounts.
https://www.bls.gov/opub/ted/2021/68-percent-of-private-industry-workers-had-access-to-retirement-plans-in-2021.htm
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A statistic from the Vanguard plan that I find informative is that only 2-3% of participating employees with wages under $100K max out (Figure 49). The figure would be even lower if we included the 1/3 of employees who aren't offered a plan, or the 1/4 of those who have that option but don't participate.
For all the consternation about limitations on contribution amounts, it's almost exclusively the higher salaried employees who would benefit from increasing the limit.

"...And that’s assuming you have a $1 million retirement portfolio. According to the most recent analysis by Vanguard, only 15% of retirement accounts at Vanguard are worth even $250,000. And according to an analysis of Federal Reserve data by the Boston College Center for Retirement Research, only 12% of workers have any retirement account in the first place..."
frightening.

The 1.9% safe withdrawal rate (SWR) referenced in the article is much lower than some others suggest.
M* suggested a 3.3% SWR for a 50% stock/50% bond portfolio.
Bill Bengen believes retirees can safely withdraw 4%-plus from their portfolios
unless we get in a severe inflationary environment.
Michael Kitces replicated Bill Bengen's original 1994 study with a broader dataset
and concluded that a 4% - 4.5% SWR was feasible.

The problem with the 4% rule is that what sticks in most people mind is the 4% and not the 50% equity allocation it is based on. Lots of retirees, myself included, do not allocate 50% to stocks and as my 4th year of retirement grinds to an end I have not regrets that I don’t qualify for the 4% plan. Just my opinion.

@Baseball_Fan -
What is your advice for a 25 year old working individual who has a 401-K tax deferred option available at work and who does not expect to need to withdraw any funds for at least 40 years and who likely will not need all the funds for at least 50 years, assuming you would not advise investing a large portion, if any, in equities?
Where are you going with the lengthy diatribe directed towards equities? Would you advise such an individual to invest his or her retirement money instead in cash? In bonds? Divide it into cash, bonds and equities? Or to seek to time the markets? Would that all of us at 25 were so blessed with those market timing skills that we might glide easily in and out of the most “profitable” investments of the day over the next half century.
For some reference - 50 years ago the DJI was around 750. The hand held calculator hadn’t yet appeared on store shelves. Most of us watched black and white TV and the cassette player was about to replace the 8-track as state of the art music. A gallon of gas cost 25 cents. $3500 bought you an upscale sedan off a new car lot. A modest home in many areas sold for $20,000 - $25,000. Computers were the size of a room and generated immense heat - yet were less powerful than an iphone today. Your 1970s dollar’s buying power today? One shudders to think.

From JohnN’s above post:
“ … long term investors absolutely need dca /buy now.”
I suppose it depends on your definition of “long term investors” - among other things.
- If 25 years or more from retirement / needing the money one might ask why they are not already 100% in good equity funds.
- If we shorten the definition to mean 7-10 years from needing the money, I’d still argue for adding some equities at today’s levels, the degree of which dependent on the individual’s risk tolerance.
- Some folks consider only 3-5 years “long term”. With that short a time horizon the prospect of adding equities at today’s (still arguably elevated) valuations becomes much dicier. I probably would, but it’s far from a done deal.
(Not intended as advice)