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Really? How do you figure that? Because if you're going to end up paying 25% of that in taxes, you're in a really really high tax bracket.
If you take out a reasonable amount to supplement pension and other earnings, you shouldn't be in a tax bracket that high.
Doesn't that depend on what the pension and other earnings are? Isn't it a retirement goal to have as much income as possible and the higher the tax bracket the higher your taxable income? What about a couple of high earners each with bringing good resources to the retirement table? Doesn't reasonable relate to what the person wants out of retirement and the resources they have to provide it with? Areas with high COLA's and related working income are going to probably have more retirees in the 25th tax bracket or higher. Also the 401 drawdown is really the discretionary income on top as you note pensions and fixed income. In theory isn't it the last income in that is taxed the highest?
Really? How do you figure that? Because if you're going to end up paying 25% of that in taxes, you're in a really really high tax bracket.
If you take out a reasonable amount to supplement pension and other earnings, you shouldn't be in a tax bracket that high.
The OP article and the thread deal mostly with people who are still working who have accumulated $1 million in their 401Ks. That's pre-tax money. A head-of-household only has to be pulling in 50k to be in the 25% bracket; a married couple jointly only 74K.
And as TuborgP points out, many retired couples hit those brackets. But even those that don't fall into the 15% bracket so that leaves them with $1 million on paper but $850k in reality. When dealing with finances, retirees should always be looking at real after-tax dollars.
Ask any tax or financial planner to tell you about their clients who seem to grasp in theory the idea of pretax savings but yet are shocked and angry to discover that means yes, have to pay 15-25% tax on their 401K withdrawals. They (these clients) are legion.
This often hits hard those (working or retired) who pull, say $20-30k, out to pay off bills or finance a dream, then discover the following spring that they owe taxes on that amount.
Doesn't that depend on what the pension and other earnings are? Isn't it a retirement goal to have as much income as possible and the higher the tax bracket the higher your taxable income? What about a couple of high earners each with bringing good resources to the retirement table? Doesn't reasonable relate to what the person wants out of retirement and the resources they have to provide it with? Areas with high COLA's and related working income are going to probably have more retirees in the 25th tax bracket or higher. Also the 401 drawdown is really the discretionary income on top as you note pensions and fixed income. In theory isn't it the last income in that is taxed the highest?
Then I would guess that if you're making THAT much money after retirement, you should be grateful for all the income that puts you in such a high tax bracket rather than complaining because you have to pay the taxes on your $1,000,000 401k.
The OP article and the thread deal mostly with people who are still working who have accumulated $1 million in their 401Ks. That's pre-tax money. A head-of-household only has to be pulling in 50k to be in the 25% bracket; a married couple jointly only 74K.
And as TuborgP points out, many retired couples hit those brackets. But even those that don't fall into the 15% bracket so that leaves them with $1 million on paper but $850k in reality. When dealing with finances, retirees should always be looking at real after-tax dollars.
Ask any tax or financial planner to tell you about their clients who seem to grasp in theory the idea of pretax savings but yet are shocked and angry to discover that means yes, have to pay 15-25% tax on their 401K withdrawals. They (these clients) are legion.
This often hits hard those (working or retired) who pull, say $20-30k, out to pay off bills or finance a dream, then discover the following spring that they owe taxes on that amount.
That's not quite right. You don't pay 25% on the full 50k - only part of it. I don't remember the tax brackets for this year and I don't feel like looking them up - but you have to make something in the area of 85k before you pay 25% of the total in taxes.
Seems like some people want to have their cake and eat it too, I guess, LOL!
Then I would guess that if you're making THAT much money after retirement, you should be grateful for all the income that puts you in such a high tax bracket rather than complaining because you have to pay the taxes on your $1,000,000 401k.
Say what? your guess couldn't be further off.
I've never once, here or in any internet or online forum, complained.
Not to mention that you've gone bizarrely far astray from the topic here. Take two aspirin and call us in the morning.
That's not quite right. You don't pay 25% on the full 50k - only part of it. I don't remember the tax brackets for this year and I don't feel like looking them up - but you have to make something in the area of 85k before you pay 25% of the total in taxes.
Seems like some people want to have their cake and eat it too, I guess, LOL!
huh??????????
unless you are on the amt tax you are never taxed the same rate from dollar one.
you also are not taking into consideration the fact ithat taxable incomea and pretax income are quite different. . your example of earning 85k has little to do with the taxable income of 85k earned.
taxable income which is after exemptions,deductions and credits:
a couple pays only 10% up to 18,150 then up to 73,800 it is 15% 25% is only on that above 73,801.00. a single is about 1/2.
even a single filer gets about 37k through at 15%.
Last edited by mathjak107; 04-03-2014 at 03:33 AM..
Then I would guess that if you're making THAT much money after retirement, you should be grateful for all the income that puts you in such a high tax bracket rather than complaining because you have to pay the taxes on your $1,000,000 401k.
Isn't that what I said? I am grateful and blessed. I have never complained about being in the bracket, it is the rate of taxation that many challenge.
That's not quite right. You don't pay 25% on the full 50k - only part of it. I don't remember the tax brackets for this year and I don't feel like looking them up - but you have to make something in the area of 85k before you pay 25% of the total in taxes.
Seems like some people want to have their cake and eat it too, I guess, LOL!
Sure that's why they have their cake they know how to bake!
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