RMD questions (not about taxes)

[CCL]

Apr 21, 2022 14:53:47 GMT -5 countrygirl2 said:

Just pay taxes as you go along, do the match of the employer and won't face all that. I tried to tell hubs but I missed stuff too. Unless you are below $25k of other income, figure your SS is 85% taxable.

This year with no capital gains and less rental income we got below the 85% taxable and only paid on $16k, what a difference, so we paid on $25k less of SS benefits, ours are $51k a year. There are so many parts to all of this stuff, good luck on projections. If your income is pretty steady from the same sources, will be easier to figure out.

I need to get a tax package and do "what ifs", because I need to know how much tax on capital gains if we start selling. Hubs, now is thinking of backing out on selling.

We don't want to end up with little income.

I'm not understanding what you are saying here. If you are putting money in 401k with a match, it's still going to be subject to RMDs. Most plans offer pretax contributions, so you won't be paying the taxes as you go along. You'll pay them when the money is withdrawn.

You can sell your rentals and still get income from the cash proceeds. You could also increase that by taking out some of the principal.

[countrygirl2]

I'm saying pay taxes on all EXCEPT the match amount. If you just invest the other tax paid income you won't be having to take out as much RMD's. The other will just be in stock or drawing interest, whatever you decide to invest it in.

Yes, but it is nice to have the income from the rentals instead of using up the investment. I know we can invest the money but my husband just wants to put it in CD's and we are losing ground there. 

[Rukh O'Rorke]

Apr 21, 2022 11:04:30 GMT -5 minnesotapaintlady said:

Apr 21, 2022 7:02:39 GMT -5 scgal said:

I'm not at FRA yet, but i am trying to figure out taxes with SS. If you are at FRA how much money can you take from a 401k without SS being taxed. From what i've read it's something like 18k. Am i understanding this correctly

Currently the rule is, if 1/2 your SS + all other income is less than 25K then SS is not taxable.

Everything is so complicated!

I may need to rethink my entire approach. On the otherhand, most steps to reduce income/taxes also impede longterm growth (house payoff). But it does build in a certain amount of security not found with a big morgage, higher income, higher taxes, etc. It's hard for me to think through all this and come up with a determination of which is the best course and then taxation changes all the time, so even if you figure it out and follow the "best" path - changes at any time could change what was "best"

So there is growth, safety, taxes to all balance out somehow. I'm already at over 1.6m in 401k/ira rollovers and still saving in them. At the current balance, and the life expectancy from the IRS and say we go back to mandatory withdrawals at 70 (even not counting growth and contributions from now til then) that is 60k/year. 

So is it too late for me to be tax-smart? I think there is a lot of taxes in my future, but better than not having the money!

[susana1954]

Apr 22, 2022 19:41:33 GMT -5 Rukh O'Rorke said:

Apr 21, 2022 11:04:30 GMT -5 minnesotapaintlady said:

Currently the rule is, if 1/2 your SS + all other income is less than 25K then SS is not taxable.

Everything is so complicated!

I may need to rethink my entire approach. On the otherhand, most steps to reduce income/taxes also impede longterm growth (house payoff). But it does build in a certain amount of security not found with a big morgage, higher income, higher taxes, etc. It's hard for me to think through all this and come up with a determination of which is the best course and then taxation changes all the time, so even if you figure it out and follow the "best" path - changes at any time could change what was "best"

So there is growth, safety, taxes to all balance out somehow. I'm already at over 1.6m in 401k/ira rollovers and still saving in them. At the current balance, and the life expectancy from the IRS and say we go back to mandatory withdrawals at 70 (even not counting growth and contributions from now til then) that is 60k/year. 

So is it too late for me to be tax-smart? I think there is a lot of taxes in my future, but better than not having the money!

You are thinking in terms of today's money.  Stop that!  .