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The Sunday Best (08/06/2023)

The Sunday Best is a collection of articles I’ve curated from the furthest reaches of the internet for your reading pleasure.

Every week, I scan hundreds of headlines, read dozens of posts, and bring you the best of the best to save you time and mental energy.

Financial Independence (FI) is a primary focus, but it’s an awfully broad topic. I tend to approach FI and early retirement from a fatFIRE perspective and through the lens of a physician, so expect to see those biases in the selected articles.

Related topics that have become recurrent themes include early retirement, selective frugalitytax issuestravelphysician issues, and of course, investing.

For more great articles, take a peek at The Sunday Best Archives. Now let’s get to the best… The Sunday Best!

Jorge Sanchez, MD, curated this week’s articles.

 

Talking about money with your kids can be an uncomfortable and sometimes painful experience. But what if it doesn’t have to be? The College Financial Lady discusses how to talk to kids about important things like student loans and saving for college. Talking to Your Kids About Money

 

 

Morningstar lists important financial tasks that are frequently ignored but don’t take a lot of time to rectify. 4 Financial Tasks You Shouldn’t Put Off .

 

Should You Invest in a SEP IRA or Solo 401(k)? This week we reviewed the differences between these two retirement plans to help you decide which one works best for you.

 

Inflation went over 9% in 2022, and, in the end, many investors are finding out that their “inflation hedges” didn’t work. In this post from White Coat Investor, Dr. Jim Dahle outlines why: You Can’t Hedge Against Inflation in the Short Term

 

Having insurance helps us sleep at night, but cash is the ultimate portfolio insurance.  Discipline Funds explains why. Is Cash the Best Insurance Asset?

 

This week, we examined the qualifications for receiving Social Security spousal benefits and the strategies for maximizing them in our Guide to Social Security Spousal Benefits.

 

Are collectible assets investments? Investment News highlights why they don’t think so. Investing lessons from the Beanie Babies bubble.

 

MarketWatch lists their top Investment red flags, including funds with high operating expenses. This is the worst investment advice I know — and you may be taking it

 

Herb Greenberg explains why good investing requires creativity. On Empathy, Money, Fame, Creativity, and Patience

 

Getting to FIRE may require an ascetic lifestyle for a meaningful length of time. But how do you transition from diligently saving for retirement to spending well once you’re there? Savant Wealth  tells us How to Confidently Spend in Retirement.

 

Inherited IRAs have experienced legislative changes, making them more complex and intimidating for many. Savant Wealth outlines key rules you should be aware of to help avoid any unintended consequences in How to Manage an Inherited IRA: What Beneficiaries Need to Know.

 

A Whole New Physician On Fire Experience is on Its Way!

 

Guess what? We’ve been busy behind the scenes jazzing things up a bit! Because who said finance had to be all numbers and no fun, right?

We’re super stoked to unveil our fresh new look to you in just a few weeks. Not only will it be a visual treat, but navigating our content will feel like a breeze!

 



 

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4 thoughts on “The Sunday Best (08/06/2023)”

  1. I am in year 2 of 10 for an inherited IRA of about $250,000. I placed it in VTSAX (according to my total portfolio asset allocation). My plan was to place it in VTSAX in my taxable after I take it out of my inherited IRA (I was thinking year 10). Is there any reason you see for me to take it out any earlier than year 10 and then place into taxable? I figure if the market is up, I’ll pay more in taxes and if it’s down, I’ll pay less. Are there any other considerations I should consider?

    Reply
    • I’m in year 3 of 10 for my inherited IRA from my mother. Have you been following the articles about the confusion concerning RMDs? Kiplinger recently published an article saying IRS is going to forgive us for not taking the RMD for 2023, just as they did for 2021 and 2022. It seems that no one knows for sure what the final word is about whether or not an RMD applies to an inherired IRA where original owner had already started their own RMD and beneficiary is a non spouse person lacking any of the special characteristics where special rules apply.

      Personally in your case, I would think you would be better off taking some of this money out annually and reinvesting in a brokerage account, simply because taking a lump sum in year 10 could cost you more in taxes, depending on your total income. Remember also that the current individual tax breaks expire after 2025, and the IRA is taxed at regular rates, whereas brokerage sales profits are taxed at the more favorable capital gains rates. You could basically hedge your bets by dollar cost averaging a portion of the IRA over to the brokerage every year.

      Reply
      • Lynne-

        Thank you for the help and comments.

        My parent was in their mid-50’s so RMDs don’t affect my situation.

        My total income is around $550-600k so I was thinking the lump sum probably wouldn’t affect my taxes too much. I was more wondering if I should market time or not with some of it going into Money Market but have ultimately refrained mostly because the plan was for it to go into vtsax. It seems like there is pretty minimal information and guidance on this topic in general (or at least my impression).

        Reply
        • None of us can accurately time the market, but you can hedge your bets by taking basically equal amounts annually and reinvesting in your brokerage account in VTSAX. If you don’t plan on needing this money anytime soon then I don’t know why you would want to drop it in a savings account, since historically, long term, the market gains far exceed savings account rates. Now if you have any debts that have a substantial interest rate, then paying those off is prudent.

          Current tax rates expire after 2025. In your bracket, your inherited IRA distributions could be at the top tier. There’s a 2.6% difference between that old rate and new in 2026 and beyond. Capital gains rates are still far lower than regular income rates. You may want to consult with a tax pro to strategize the cash out of your inherited IRA.

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