No pension tax in Penn? (pensions, move, social security, federal)
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Yes, as I understand it you get a pass on state tax. Have seen some that want to stay in that part of the country move there just to duck state tax on 401 distributions.
Yes, as I understand it you get a pass on state tax. Have seen some that want to stay in that part of the country move there just to duck state tax on 401 distributions.
Thanks for the tip cdelena, I took a big pension buyout deal from a previous employer almost 10 years ago and rolled it into an IRA, which has gone up nicely in value over time. That is going to be a big chunk of my retirement income after age 60. I would guess that in the future more retirement income will come from IRA and 401K distributions than traditional pension payments from companies. Good to know that some states won't grab onto that money for taxes. That's a big reason why I'll leave CA in a few years when I decide to retire.
Thanks for the tip cdelena, I took a big pension buyout deal from a previous employer almost 10 years ago and rolled it into an IRA, which has gone up nicely in value over time. That is going to be a big chunk of my retirement income after age 60. I would guess that in the future more retirement income will come from IRA and 401K distributions than traditional pension payments from companies. Good to know that some states won't grab onto that money for taxes. That's a big reason why I'll leave CA in a few years when I decide to retire.
There are other states that do not tax distributions.
A strategy used by many that retire early is to use the period after full employment and before drawing social security to convert IRAs to Roth accounts. Since IRA and 401K accounts are subject to Minimum Required Distributions at age 70.5 you can be forced into a higher tax bracket in retirement with social security and required distributions.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by cdelena
...A strategy used by many that retire early is to use the period after full employment and before drawing social security to convert IRAs to Roth accounts. Since IRA and 401K accounts are subject to Minimum Required Distributions at age 70.5 you can be forced into a higher tax bracket in retirement with social security and required distributions.
then there is the 'rumor / threat' that the tax free withdrawals of Roths will be 'withdrawn'... I hope not, but we can see how well the gov manages $$
It is nice there is now a provision to do tax-exempt contributions from your 'qualified' funds, I hope that stays, but it would have been nice to know 10yrs ago when we set up our family foundation.
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