U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-08-2019, 09:31 AM
 
Location: SoCal
13,226 posts, read 6,326,744 times
Reputation: 9839

Advertisements

Quote:
Originally Posted by Lizap View Post
Federal tax rates are likely to go higher in the future, so it make sense to at least have part of your IRAs in Roth accounts.
I agree with your post, this is why I bite the bullet here and keep converting.
I also play around with TurboTax with different future streams of income at different ages and I know at least I can shave off a few percentage in state tax. Maybe that’s where it’s going to gain me.
Reply With Quote Quick reply to this message

 
Old 06-08-2019, 02:57 PM
 
Location: Myrtle Creek, Oregon
12,248 posts, read 12,499,482 times
Reputation: 19393
Quote:
Originally Posted by HeelaMonster View Post
Why does that ....mess you up?

[ETA: turns out I can't use your term wihout getting bleeped by censors!]
My pension is high enough to make 85% of my SS taxable, so there is no way for me to avoid that bite.
Reply With Quote Quick reply to this message
 
Old 06-08-2019, 04:47 PM
 
Location: RVA
2,165 posts, read 1,265,978 times
Reputation: 4456
Yes, it’s a nice problem to have (pay more taxes for too much income) but it is aggravating in that a lot of the strategies for tax reduction are significantly reduced, when every year you automatically start at the 22/25% bracket just by waking up. But since my pension was non contributing, it is real hard to make a case to be unhappy about it! Plus, I just found out that about 30% of my pension is COLA, as are the Medigap supplemental stipends we get for life. Retirement is starting off with a bang!
Reply With Quote Quick reply to this message
 
Old 06-09-2019, 04:06 AM
 
Location: the Permian Basin
4,196 posts, read 3,083,574 times
Reputation: 5892
Quote:
Originally Posted by Deuce88 View Post
You don't pay taxes on the contributions.

Not at the time of contribution, but I would be paying taxes on both the contributions and the growth when withdrawing from a traditional IRA.
Reply With Quote Quick reply to this message
 
Old 06-09-2019, 04:24 AM
 
71,535 posts, read 71,712,424 times
Reputation: 49120
either way if rates are the same and gains are the same balances are the same
Reply With Quote Quick reply to this message
 
Old 06-10-2019, 03:28 PM
 
476 posts, read 94,654 times
Reputation: 333
Quote:
Originally Posted by mathjak107 View Post
for someone who does some tax planning and is delaying ss until 70 , just using the standard federal deduction , a couple can pull 192k of deferred ira money out tax free and 384k at less then 5% in taxes ,. that can be a gift from the tax gods compared to what you may have deducted it at while working .... that can make a big difference alone compared to converting at higher rates. so there is a lot to consider here on an individual basis .
Quote:
Originally Posted by mathjak107 View Post
the rmd's are a whole other factor ... remember you can draw out 24k a year from a traditional if you are delaying ss and have no other taxable income and pay zero tax for 8 years using the standard deduction if a couple ... or you can take 48k and pay under 5% tax ...so depending on situation having deducted that traditional money at working tax levels and never paying taxes beats a roth .... so individual situation is very important. 48k year at just a 4-5% tax over 8 years can spend down 384k in ira money and have no rmd's on it while growing ss .
Mathjak, thank you for providing this info. I thought I was familiar with most "tricks of the trade" around retirement planning, but will admit that I had not considered this approach... namely, pulling out taxable IRA money between age 62-70, in order to decrease the RMDs that will come later. I am just edging into to retirement (end of this year), so the tip is very timely.

One question in follow up: Am I correct that investment income (e.g., dividends, interest, capital gains) would still count against that $24k standard deduction? Point being, we wouldn't have that full amount to draw down money from the traditional IRA, depending on how much investment income we have coming in from non-IRA sources.... even if we no longer had work-related income. Correct?

Last edited by HeelaMonster; 06-10-2019 at 03:38 PM..
Reply With Quote Quick reply to this message
 
Old 06-10-2019, 03:30 PM
 
71,535 posts, read 71,712,424 times
Reputation: 49120
yes they would count ....
Reply With Quote Quick reply to this message
 
Old 06-10-2019, 03:49 PM
 
476 posts, read 94,654 times
Reputation: 333
Quote:
Originally Posted by mathjak107 View Post
yes they would count ....
Thanks, that was obvious I suppose, and what I assumed ("income is still income")... but was secretly hoping you knew some crafty way around that, as well!?
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top