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Retired end of last year at 62 with severance etc behind me. Looking to draw funds in the most tax efficient manner going forward.
Yearly Income:
Pension: $55,000 no adjustment for inflation
Deferred income: $70,000 first payout, nine more annual distributions to come
Part time jobs: $13,000
Holding off on SS until FRA or possibly 70.
No debt but we expect to enjoy retirement which means travel expenses.
So we are looking at the above income every year for the next eight years.
Have three buckets to tap: savings, IRA and Roth all with >$500,000 in them. Want to tap up to the next tax bracket. Know to leave the Roth till last but unsure on which of the other two to hit.
We are married filing jointly and as I said income up to the top of the current bracket should be adequate to cover our needs.
That's a pretty strange answer. Two of your buckets don't impact tax brackets so that only one bucket if you want to top off. You can take 35800 or so out of the IRA to top off if you take the standard deduction or you can take more if itemize. Topping off will eat up 25% of the IRA withdrawals
It sounds like you are trying to say, "Hey look a how good I'm doing" - rather than to ask a real financial question. What type of deferred account do you have that pays out nine $70K payments? -- Is this a fixed term, immediate annuity or ? Otherwise, the question of what bucket to tap 'after your SS kicks-in at age 70 may not ultimately matter because you will be forced to tap your deferred accounts for RMD's starting at 70-1/2 unless you deplete them before then and pay the taxes earlier..
The rmd most likely wouldn't exceed the deferred comp even if you didn't touch the IRA until
70k, there isn't really a great route to limit taxes here as the deferred comp mucks up the timeframe
The "deferred account" in an accumulation of income and bonuses that the company had allowed me to defer tax free over the last 25 years. This is above my 401k account. Those funds and the investment return totals $700,000 which years ago I had elected to receive evenly over the 10 years after my retirement. I cannot change that distribution of funds. The funds are invested in the market. These funds are also "at risk" if the company goes Chapter 11 and I would be in line with the rest of the creditors.
No bragging, just the facts. I realize this is a unique situation but felt the diversity at CD might help.
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