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We are expecting to retire next year with DH in his mid 50's. We had thought to draw down on our 401K and savings, converting a large amount of TIRAs to Roth at our lower tax rate in retirement, taking SS when DH hits 70 and I am full retirement age, (FRA.) Our reasons for this approach is to minimize RMDs at 70, and to max out the death benefit for me should DH predecease me. If we do not reduce our TIRA exposure, RMDs will cause significant taxation in retirement. We also have a couple of moderate pensions that should come into play, though for the most part we have not factored them into our calculations as we have a hard time understanding what they will amount to.

Or we could simply do SEPP withdrawals and keep our non-retirement funds invested with an eye to tax minimization. This would draw down our TIRAs and further build our non-retirement funds.

Further complicating this is that we will have a senior and a freshman in college at retirement. Because of the amount of cash we have on hand, we do not qualify for financial aid. But retirement funds do not count towards your EFC, or effective family contribution...the amount you are expected to pay before being considered for aid. So perhaps it makes sense to buy a deferred payout annuity with our non-retirement funds, taking funds from the 401K or Sepp TIRA as needed. This might have the benefit of discounting our college costs, providing a "guaranteed" income stream down the road, (assuming the insurer stays solvent,) and allowing us to reduce the impact of TIRA RMDs.

An idea worth considering?

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