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I wonder what my fair share of taxes should be. I cannot even determine how much I pay in taxes, direct and indirect. Let's see: 8 something percent sales tax, $13k property taxes, a bunch in federal and state income taxes. Should I include all extra money for healthcare that years of deductions for Medicare do not cover. Like $6000/year for supplemental insurance, the thousands my wife paid for donut hole or drugs needed but otherwise not covered? The one that galls me is tax on social security. I paid the equivalent of taxes year after year. Now that I am getting some of it back, I get taxed again.
my fair share is the lowest i can get it down to using the tools and laws legally available to me .
new thinking is if conditions are right spend the deferred money first.
That's currently my plan. Pull out most or even all of the deferred money before SS starts. Married joint return can have nearly $100K in gross income before exceeding the 15% bracket.
Then during the next phase of retiremetn live primarily off SS + qualified dividends + LTCG. These all play pretty nicely together. Married joint return can have in excess of $100K gross and pay zero federal tax. I haven't "run the numbers" yet, but I'd guess this is even friendlier (as compared to pulling deferred money last) for a surviving spouse who then files single.
Sure, if both have max SS and defer until 70, that's almost $90k right there. Plus the standard deduction and amount to get to 15% bracket, then $100k is easy. But two earner couples rarely only have SS and LTCG income.
I consider us retired since our plan is pretty much set in stone doing what we do now...for as long as possible. Never stop working.
For 2017
My $26K earned income at work (two p/t jobs)
His $21K being self employed Contractor
19K profit for recent land sale (after all the fees)
------------
66K
This seems very do-abe for each year, or to hit that average in the end per yr
Dental & Medical for me is covered via work for $8 mo.
Accident/LTC/Life insurance policy for both of us via work -$11 mo.
Medicaid was the plan for him for 2018 but it seems we won't qualify
Healthcare Sharing Ministry for $80 a mo. for him (essentially it's catastrophic) may work instead
2018...on I will contribute about $2300 yr to my HSA to offset the automatic $1 per hr raise
& Stash much of the real estate profits in a safe.. playing catch up regarding retirement.
Employers 401k is a rip off so cannot use it but with the minimal match contribution would be about $650 per yr. Maybe it can be an emergency fund
We will be within the 10% bracket
I think we'll also pay SS & Medicare tax on the land sale (Long Term Cap Gains) not sure yet.
I sell online at ebay and amazon making about $300 a mo. Not factored in above b/c it feels unpredictable and I don't claim it
SS is not figured above b/c timing isn't set in stone yet. He'll probably take SS at age 62 at about $1100 mo and stop being a Contractor. Just work on houses, buying and selling every few yrs. Me, who knows. I may never sign up myself until hubby passes on
By then, I'd reduce work to just the one p/t job and work on getting a new husband
Live in California
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Last edited by NancyDrew1; 05-13-2017 at 02:45 AM..
Actually got a $200 refund from IRS last year (apparently from paying too much for Obamacare despite a huge subsidy attained by relying on mostly cash account for living expenses to keep taxable income low). We are both taking SS (I just started at 65 to allow DW to start spousal benefits) and hoping that covers all living expenses.
Doing Roth conversions of $40,000/year until RMDs begin in 6 years. This will hopefully keep tax rate of SS at 50%, and reduce tIRA by $240,000, lowering our tax rate after age 70 1/2.
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