Relative to the discussion about taxes, required minimum distributions, etc. there are a couple of ideas many are not aware of.
Since most of us make charitable contributions, you can use a charitable contribution fund to reduce your taxes on IRA/401K distributions and capital gains on other investments. You can also use it to reduce taxes if you have unusual income in a single year. Most financial firms will set up a personally directed charitable fund for no charge. You transfer assets into the fund and then, whenever you want, you disburse them to qualified charities. If you transfer conventional IRA/401K assets, you don't have to pay the income tax. On other investments, you don't have to pay the capital gains. However, you can take the full value as as a deduction on your income taxes. As a result, more goes to the charity and less to the government.
You take the deduction in the year you transfer the assets to your fund, not the year you disburse them. Therefore, if you have a windfall year, you can transfer a large amount, and then disburse it over a number of years.
I should have been doing this for years before I retired, but I didn't learn about it until a few years ago.
Another issue is inheritance (or estate) tax. Currently this seems like a minor issue since it only applies to estates over about $11 million ($22 million for married couples if handled correctly) but this item keeps coming up in tax discussions in congress. The problem is we have to plan for our estates over a lifetime and legislators can change it overnight. This is a favorite topic for our more liberal representatives and this year I have heard proposals to change the exemption to $3.5 M, to $1.0 M, and to do away with it completely. As a result each year I make a maximum non-taxable gift to my adult children as a minor effort to keep my total estate lower.
