Airline Pilot Central Forums - RHA VEBA Vacation email

Airline Pilot Central Forums (https://www.airlinepilotforums.com/)

- United (https://www.airlinepilotforums.com/united/)

- - RHA VEBA Vacation email (https://www.airlinepilotforums.com/united/109800-rha-veba-vacation-email.html)

Quote:

OK, just to be clear. That's recharacterization, not conversion that's being done away with.

Roth conversion: Converting Traditional IRA/401k money to a Roth IRA/401k.

Recharacterization: Changing one's mind after a Roth conversion and undoing it.

Andy, thanks for pointing that out.

You guys are making my brain hurt.

Quote:

Originally Posted by APC225 (Post 2484833)

Andy, thanks for pointing that out.

No worries; I figured that you knew the difference but I can see where it's easy to get confused on the subject.

Quote:

Originally Posted by oldmako (Post 2484877)

You guys are making my brain hurt.

:) Pilots are good at two things:
1) making money, and
2) urinating away money.

Money strategy/management/investing isn't for everyone. If your brain's hurting, I'd suggest that you find a trustworthy team to manage this kind of stuff.

I can unequivocally state that not stressing about my finances (or concern over whether or not my heirs burn through everything I've saved) is priceless.

Quote:

Originally Posted by Andy (Post 2484736)

If you're planning on leave a decent sized estate, I highly recommend setting up a trust; I really like the dynasty trust (established in either SD or NV - you don't need to be a resident of either state). The trust allows you to avoid any estate taxes and also allows you to specify how the funds will be used/distributed and has a number of protections against being wiped out by lawsuits against your heirs. You can specify distribution of the funds to make sure that your heirs don't urinate it all away. A further feature of the dynasty trust is that if established in NV, it has a duration up to 365 years; in SD, it can run in perpetuity.

I've thought about doing something like that, especially for creating a charitable organization. Take $1,000,000 and let it compound for 50 years and your family name will be famous. Allow the trust to withdrawal 2% a year, and only in up years, and you could live on forever.

My only concern is family tree dilution and my heirs urinating the money, to use your term.

http://www.bankrate.com/finance/smart-spending/wealthy-families-who-lost-their-fortune-1.aspx

Quote:

Originally Posted by jumppilot (Post 2485031)

You can put a lot of restrictions on trust distributions to keep future generations from squandering everything. Including drug testing. Drug Testing Your Heirs From the Grave | Drug Testing Insider

Quote:

Originally Posted by Andy (Post 2484991)

No worries; I figured that you knew the difference but I can see where it's easy to get confused on the subject.

Your Christmas spirit is commendable! I did not know.

Quote:

Originally Posted by 757Driver (Post 2482280)

Any chance you could provide a link or post something that spells out what is allowed using VEBA money? I'm getting way more than I'd like to in my account but was under the false impression that it was strictly for deductibles and/or medical bills.

Thanks

Assuming a person lives to start on Medicare, the VEBA money can be used to pay the monthly premiums of medicare part B and D, or part C, as well as copays and non deductibles. In retirement, Medicare Expenses (premiums and copays) are currently about $7000/year, per person. The only part of Medicare that's premium free is part A, which is for hospital stays. Doctor visits (Part B) and Prescription Benefits (Part D) have a monthly premium.

Assuming you live to 95, you're looking at about $200,000 in medicare expenditure. Since the VEBA money is tax free going in AND coming out, it's really a great retirement asset.

Quote:

Originally Posted by gettinbumped (Post 2481063)

RHA is fantastic. Tax free in, tax free growth, tax free withdrawals. I would think MOST people will spend enough on health care post retirement to make this a great place to stash money.

However... if you are not married and/or don’t have kids, you cannot designate a beneficiary. So if you die, that money goes back into the pilot pool. Just FYI

If you want to get a good picture of how the different sources spill to the RHA, I posted my calculator updated for 2018 IRS limits.

Hitting the back arrow on your browser after getting the results lets you change inputs and re calculate

RHACalculator.com