Yesterday, 11:37 AM | #2 |
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I think you are better to read, learn and do it yourself.
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Unless the IRA is your only source of living expenses, I think a better way to accelerate that deferred income in your IRA to your low tax rate years between now and when SS and pensions start is to simply do annual Roth conversions. It is more flexible than a 72t because you can do as little or as much as you want each year and if you accidentally overdo it you can even recharacterize it and reverse it. I'm currently converting amounts as needed to the top of the 15% tax bracket. My federal tax on last year's Roth conversions was about 5% as I recall which I consider to be a deal given my marginal rate when I deferred that income was 25% or more.
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Yesterday, 11:45 AM | #3 |
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Thanks, I had no idea a Roth conversion could be done at such a low rate. 5% sounds like a deal.
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Yesterday, 11:48 AM | #4 |
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Do you need the money? If not, how about Roth conversions?
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"To be a man means that you are brave, loyal and true. When you are in the wrong, you own up and take your punishment. You don't take advantage of women. As a husband, you support and protect your wife and children. You are gracious in victory and a good sport in defeat. Your word is your bond. Your handshake is as good as your word... When the ship goes down, you put the women and children into the lifeboats and wave good-bye with a smile." C Murray |
Yesterday, 12:00 PM | #5 |
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If something cannot endure laughter.... it cannot endure. Patience is the art of concealing your impatience. |
Yesterday, 02:05 PM | #6 |
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No, I do not need the money now. Just thinking ahead. Plus with a
Roth, if I did need some cash in the next 7 yrs. its easier to access
penalty free than a IRA I seem to recall. You can access contributions
but not gains after 3 years or something like that. And yes, I do not
plan on ever going over the 15% bracket ever again. Got killed last year
with the 1 yr's severance check on top of 7 months working ....... So
this looks like a better way to go. I was in shock they tax a severance
like a bonus rather than retirement $$. 45% as I recall........ Ouch!
Then I thought I would be getting a lot back at the end of the year. No
dice, it put me firmly into the 33% tax bracket. And there was nothing I
could do about it except max out my 2013 401k + catch up contributions
before I left. I did feel semi bright for doing that though. It was just
tough seeing 60k go out the window when I was to venture off
unemployed...
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Yesterday, 02:14 PM | #7 |
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You probably didn't have any control over the timing of your
severance, but those are the reasons that I ended work in December, but
stayed on payroll "on vacation" for the following January and February.
It allowed me to take all my pay and defer it and max out my 401k.
If I had instead quit in December and received a check for my unused vacation the taxes on it would have been painful because I had already maxed out my 401k for the year.
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Yesterday, 02:24 PM | #8 | |
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Quote:
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Yesterday, 02:53 PM | #9 |
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"You probably didn't have any control over the timing of your severance"
Nope, no real control on the timing. .......... I made it thru the 1st and 2nd voluntary and non voluntary cuts. (They call them wave's now) Sounds so nice....... I took off on the 3rd voluntary wave. I could have stayed as I took a "voluntary package". Then 50 % got the same thing but non voluntary the next month...I will call that the outside clean up set. Again I might have made that cut and still been there as 10% are still there and are said to get the same deal. (But you cant say when, I was told it could be 6 months or 6 years) But after 30 yrs I did get the 80% medical and a years pay. That was good enough for me. Did loose a years sick pay by not using it for 30 yrs. If I was 55 I would have got 20% of it. That was my goal. But again, it seemed like a good idea to walk out on my own terms rather than possibly being showed the door. If I could have had a choice, it would have been last Jan. as It would have saved me about 30k in Tax's. But that's just how it goes. No regrets or complaints. The folks that stayed are miserable....... Like being on death row IMO. I was just happy to walk out with my dignity and their cash. That I used to pay off a 4 bedroom rental. $2k / mo. It may not have been the best plan ever, but it works for me.
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Today, 06:39 AM | #10 |
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Retired at 51 in 2012 and DW last year in May. Our 2013 AGI was $85 K
of which $20K was earned income about 10K in Dividends and interest the
balance was Long Term capital gains. Fed tax bill $352 and we did not
itemize. We took the gains this year because or Earned Income and
dividends was low enough to have ZERO capital gains tax and we did not
have a subsidized HCA plan . Going forward we need to watch AGI due to
HCA Health Policy that is subsidized. Our plan is to roll over IRA to
Roth to amount that maximizes HCA Subsidy and minimizes income tax. My
estimate is we will roll from IRA to Roth around 29K per year. We have
this year a fully funded HSA savings account which is tax deductible as
our health policy is HSA compatible. Be sure to look at Health
Insurance cost subsidy if buying from The new Govt marketplace as part
of your strategy.
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