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Old 02-23-2016, 03:09 AM
 
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for the amount of money i would give up from 62 to 70 i could never buy an inflation adjusted annuity that would provide the cash flow ss does for that price ..

so while i am more dependent on markets and interest rates for only a few years while delaying ,we can be less dependent for what could be decades.

that to me is worth the longevity risk .

when it comes to where to pull from first , complex questions that get short simple answers are usually the wrong answers .

if your tax situation warrants it delaying ss and pulling from your retirement accounts first can be a gift from the tax gods .

a retired couple can pull 22k from their ira's tax free every year , just having the standard deductions and exemptions offset it . that is money you never ever will pay tax on . in fact you can pull up to 40k and pay as little as 1800 bucks tax on it .

it would be a shame to have that tax gift from the irs go to waste while you lived off already taxed money which you can use at anytime in your life and not pay
tax. . so to use that already taxed money from your taxable account early on when you can draw up to 8 years of never taxed money that will end up being taxed anyway when ss kicks in would be the wrong thing to do .

but if you need more income then that and have no other tax free sources like roths or muni interest then you can't really benefit from the gift of the tax gods .

also if the combo of the bigger ss check by delaying and rmd's will be at a higher bracket then yep spend those ira's first .

each one of us will likely be in a different situation when it comes to how and where we pull income from .

Last edited by mathjak107; 02-23-2016 at 03:47 AM..
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Old 02-23-2016, 07:03 AM
 
Location: Gilbert, AZ
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The tax code is frustratingly complex, and SS interacts in strange and unexpected ways with other income. If we (and here I mean myself and my spouse, not the collective "we") push RMDs out as far as possible, much of those distributions will likely be taxed at an effective rates of 18.5% and 27.75% (and possibly some at the so-called torpedo rate).

It's definitely worth learning about this before retirement, as it may affect the decision of how much savings to put into trad vs. Roth vs. taxable accounts, and also which assets to put in which accounts.
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Old 02-23-2016, 08:34 AM
 
Location: Gilbert, AZ
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Here's an article that explains it better than others I've seen...

The Social Security Tax Torpedo - Go Curry Cracker!Go Curry Cracker!
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Old 02-23-2016, 09:43 AM
 
Location: rhode island
33 posts, read 22,765 times
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Quote:
Originally Posted by Robyn55 View Post
Just pick up a copy of Turbotax for 2015 taxes and plug in your new income numbers (plus things like deductions based on 2015 numbers - unless they were somehow out of the ordinary). 2016 will probably be different than 2015 in terms of actual tax brackets and the like - but in all likelihood - not much. That will show you how much extra you'll owe. If you already use Turbotax - just create a second "dummy" return with the 2016 numbers.

Depending on your particular circumstances - how much in the way of extra taxes you might owe - you might have to/want to make an estimated tax payment or 2 or 3 or 4 in 2016. You can print out those 2016 estimated tax forms on Turbotax.

Note that there are rules in terms of how much you get from Social Security if you're still working and below a certain age. They are summarized here:

https://faq.ssa.gov/link/portal/3401...ement-benefits

Don't know if they apply in your case. Robyn
the link that you sent me says that pensions and annuities don't count as income if I am full retirement age which I am so do they count withdrawl's from a 401k as income?
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Old 02-23-2016, 09:46 AM
 
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i think you are confusing 2 issues unless i am missing something here . if you work pre fra you have a limit to what you can actively earn before you have to give money back . pensions , annuity's and passively earned income does not count towards that figure , only earned income .

that has nothing to do with getting your ss taxed at fra . all income counts for that .
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Old 02-23-2016, 09:46 AM
 
Location: SoCal
13,202 posts, read 6,308,074 times
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Quote:
Originally Posted by daves 57 View Post
the link that you sent me says that pensions and annuities don't count as income if I am full retirement age which I am so do they count withdrawl's from a 401k as income?
I think pensions and 401k count.
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Old 02-23-2016, 09:48 AM
 
71,490 posts, read 71,674,131 times
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it depends what he is asking about . see my post above .

it sounds like he is confusing having to give money back by working pre fra with having your ss taxed and what counts towards that number .
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Old 02-23-2016, 09:51 AM
 
Location: SoCal
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I've been saying, just run Taxcaster. It's free download.
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Old 02-23-2016, 10:10 AM
 
Location: rhode island
33 posts, read 22,765 times
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Quote:
Originally Posted by mathjak107 View Post
i think you are confusing 2 issues unless i am missing something here . if you work pre fra you have a limit to what you can actively earn before you have to give money back . pensions , annuity's and passively earned income does not count towards that figure , only earned income .

that has nothing to do with getting your ss taxed at fra . all income counts for that .

let me try and get this right, I am full retirement age and started collecting ss at the rate of 30,000 per year. I am still working until august and will earn approx. 50,000 when I quit. my limit is 44000 then ill be taxed at 85%, so I will owe taxes but am thinking about having more taxes taken out of my pay before I quit.im trying to figure approx. how much I will owe , thank you
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Old 02-23-2016, 10:36 AM
 
Location: Gilbert, AZ
3,178 posts, read 1,955,676 times
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Just go here and put in your numbers. It takes a few minutes. No need to download anything...

https://turbotax.intuit.com/tax-tool...ors/taxcaster/
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