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Old 07-11-2014, 05:43 AM
 
71,763 posts, read 71,853,273 times
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can you imagine blowing taking 22k out of your ira tax free every year for 8 years if your structure was such that allowed that by delaying ss.

you got to deduct the taxes at a high rate while working and pay zero on the way out. what could be better then that.


I would have loved to be able to pull 22k tax free from my ira's , 60k from my roths and another 20k from my taxable accounts which had most of the taxes paid to get my total retirement income while waiting for ss down the road. , but I wasn't knowledgeable enough to set it up that way years in advance .

compare that to leaving your tax DEFERRED stuff alone and maybe 8 years later it will be worth more , or maybe not. you will also have rmds on that money you could have gotten out tax free totally.

good tax planning in advance is far more complex then most figure asking themselves the age old question , "but what if I die"
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Old 07-11-2014, 08:36 AM
 
Location: High Cotton
6,131 posts, read 6,447,015 times
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Quote:
Originally Posted by DaveinMtAiry View Post
I'm continuing to decide between filing at 62 or FRA of 66/10 in my case. First off let's stop posting that the benefits increase by 8% per year. That is from FRA to age 70, from 62-FRA it is more like 5%.

So the option is file early or withdraw from my retirement account. Seeing as my retirement account probably will generate more than 5% why would I not strongly consider filing at 62 while allowing my retirement account to continue to grow?
Quote:
Originally Posted by lenora View Post
If you are willing to take the "probable" generation of more than 5% versus the "guaranteed" generation of 5% that also provides you with an option of generating 8% post FRA, then go for it.

OTOH, if your FRA is 66 and 10 months, you're wasting your time trying to figure out at what age you should apply for your retirement benefits. By the time you reach 62, you and your spouse will have a better picture, albeit imperfect, of your health, your finances and the inevitable changes that will impact both Social Security and Medicare benefits.

Excellent advice Lenora! Some people can't see the forest for the trees. They can't see the whole situation because they are more focused on less important near-term details, and simply unable to recognize the overall situation so they can consider and evaluate everything.
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Old 07-11-2014, 12:11 PM
 
2,043 posts, read 1,951,967 times
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Quote:
Originally Posted by mathjak107 View Post
can you imagine blowing taking 22k out of your ira tax free every year for 8 years if your structure was such that allowed that by delaying ss.

you got to deduct the taxes at a high rate while working and pay zero on the way out. what could be better then that.


I would have loved to be able to pull 22k tax free from my ira's , 60k from my roths and another 20k from my taxable accounts which had most of the taxes paid to get my total retirement income while waiting for ss down the road. , but I wasn't knowledgeable enough to set it up that way years in advance .
I also wasn't knowledgeable about this but realizing this now is very helpful since I am still a few years away from 62. I was originally on the conventional thinking road of taking SS early at 62 and letting the IRA grow and grow and grow but now realizing that in that case my future IRA distributions might be taxed at high marginal rates, that it might be better if I can get my IRA money that had no taxes paid on it before, out at very low tax rates if I don't take SS, which is a "new to me" idea that is just hitting me as a possibly better option than what I was originally intending to do.
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Old 07-11-2014, 12:38 PM
 
Location: So. of Rosarito, Baja, Mexico
6,654 posts, read 18,693,708 times
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I was 60 and self employed. New a man 5 yrs younger then me who was also in the same trade that had a stroke and later died. Working long hrs made me stop and see the roses staring me in the mirror. I then decided to draw SS at 62 and cut my working hrs in half until reaching 65 and retired full time.......will be 83 in less then one month....did I go wrong?

According to the SS pamphlet it takes 12-1/2 yrs to catch up to the difference in SS money.

Of course every ones health is different so the end results in time period will vary.
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Old 07-11-2014, 01:25 PM
 
Location: Los Angeles area
14,018 posts, read 17,754,097 times
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Quote:
Originally Posted by Steve Bagu View Post
I was 60 and self employed. New a man 5 yrs younger then me who was also in the same trade that had a stroke and later died. Working long hrs made me stop and see the roses staring me in the mirror. I then decided to draw SS at 62 and cut my working hrs in half until reaching 65 and retired full time.......will be 83 in less then one month....did I go wrong?

According to the SS pamphlet it takes 12-1/2 yrs to catch up to the difference in SS money.

Of course every ones health is different so the end results in time period will vary.
Sounds like you had a good plan which worked out well. Of course you did not go wrong, assuming that you are not currently living under a bridge and dumpster diving for food. Congratulations!
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Old 07-11-2014, 02:23 PM
 
Location: SoCal desert
8,093 posts, read 13,242,460 times
Reputation: 14870
Quote:
Originally Posted by DaveinMtAiry View Post
I'm continuing to decide between filing at 62 or FRA of 66/10 in my case. First off let's stop posting that the benefits increase by 8% per year. That is from FRA to age 70, from 62-FRA it is more like 5%.
For someone who's FRA is 66, age 62 to 63 is 5%, then it jumps to 6%+
From the SS website
(Just click on your year of birth and it will give you a month to month percentage)
Age 66 100.00%
Age 65 93.30%
Age 64 86.70%
Age 63 80.00%
Age 62 75.00%
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Old 07-11-2014, 05:24 PM
 
Location: Baltimore, MD
3,745 posts, read 4,222,137 times
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Quote:
Originally Posted by Gandalara View Post
For someone who's FRA is 66, age 62 to 63 is 5%, then it jumps to 6%+
From the SS website
(Just click on your year of birth and it will give you a month to month percentage)
Age 66 100.00%
Age 65 93.30%
Age 64 86.70%
Age 63 80.00%
Age 62 75.00%
If I understood Dave correctly, his FRA is 66 years and 10 months. The following linked chart covers all FRAs. Early or delayed retirement
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Old 07-11-2014, 05:40 PM
 
71,763 posts, read 71,853,273 times
Reputation: 49311
Quote:
Originally Posted by fumbling View Post
I also wasn't knowledgeable about this but realizing this now is very helpful since I am still a few years away from 62. I was originally on the conventional thinking road of taking SS early at 62 and letting the IRA grow and grow and grow but now realizing that in that case my future IRA distributions might be taxed at high marginal rates, that it might be better if I can get my IRA money that had no taxes paid on it before, out at very low tax rates if I don't take SS, which is a "new to me" idea that is just hitting me as a possibly better option than what I was originally intending to do.
many times conventional thinking just is not the best way.

boy if i had to do it all over again i would have structured things very differently . in our day we had no roths so it wasn't an option. the thought of having just about tax free income while delaying ss is an attractive goal. i would have split the money between roths and traditionals .
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Old 07-11-2014, 05:53 PM
 
Location: SoCal desert
8,093 posts, read 13,242,460 times
Reputation: 14870
Quote:
Originally Posted by lenora View Post
If I understood Dave correctly, his FRA is 66 years and 10 months. The following linked chart covers all FRAs. Early or delayed retirement
Yes, I know he's at 66+10.

That's why I said "(Just click on your year of birth and it will give you a month to month percentage"
They have links for
1937 and earlier
1938
1939
1940
1941
1942
1943-1954
1955
1956
1957
1958
1959 (Dave's)
1960 and later

Each one gives a month to month percentage from age 62 to whatever their FRA is.
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Old 07-11-2014, 05:53 PM
 
Location: Great State of Texas
86,093 posts, read 72,556,082 times
Reputation: 27566
Quote:
Originally Posted by mathjak107 View Post
many times conventional thinking just is not the best way.

boy if i had to do it all over again i would have structured things very differently . in our day we had no roths so it wasn't an option. the thought of having just about tax free income while delaying ss is an attractive goal. i would have split the money between roths and traditionals .
You already paid tax on the principal you invest though so it's not completely tax free.


Uncle Sam is going to get his taxes..either up front, when you withdraw or when you die.
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