Investing -- 529s

Locator: 47070INV.

I'm starting a new series on investing that I can share with my extended family members, most of whom have Schwab accounts but little understanding about investing.

Anything I write here is meant only for my extended family members and no other readers. It is a starting point for discussion among the family members. Nothing is written in stone. These posts will be updated as conditions change. They will eventually be collected and linked under the "Personal Investing" tab at the top of the blog.

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Lessons in Investing

I'm the last one anyone should listen to with regard to investing. However, having said that, I think I've learned a few things along the way.

About two years ago I started planning the transition from personal investing and growing my portfolio to the next and final stage: moving my investments assets in an orderly manner from my portfolio to my two daughters, their husbands, and five grandchildren.

My wife has been taking distributions from her IRAs for the past several years, starting before RMDs were required, and despite taking those distributions, her IRAs have continued to grow. At age 73 years this summer, I will start taking RMDs this year. Between the two of us, in dollar amounts, the RMDs will be huge. All things considered, it could be 25% to 50% of my annual income. Again, just RMDs -- trending toward 50% of my annual income. There may be some hyperbole there, but not much. 

When I take out those RMDs, I will pay taxes on them -- federal taxes only; we live in a state with no state income taxes.

All these years I had planned to re-invest those RMDs into the stock market ... which, of course, would result in more dividends, more capital gains, more taxes. So, the RMDs taken this year would continue to be taxed year-after-year when they are reinvested in the market. 

I was looking for a "vehicle" that would re-invest my RMDs into the US stock market and would grow tax-free forever. 

I cannot open new retirement accounts or add to current retirement accounts because I no longer have W-2 (earned) income. I have no interest in tax-free municipal bonds.

But there is a vehicle in which investments grow tax-free, never result in taxes when withdrawn, and eventually convert to a Roth IRA. And contributions are not capped for 99% of folks using this vehicle.

Sounds too good to be true?

529s.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.

See disclaimer. This is not an investment site.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.