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Re: 401K withdrawls - taxes
Old 02-13-2006, 07:16 AM   #21
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Re: 401K withdrawls - taxes

For 2006, the married filing jointly 15% tax bracket tops out at $61,300. With a standard deduction of $10,000 plus personal exemptions for $3200 each, the 15% bracket is pretty generous. But as CFB says, you have to keep all of your taxable income within that bracket, including the IRA amount you are converting, or you will jump into the 25% bracket. So if you are at $100,000 income, even though you are eligible to convert, you might not want to because of the tax hit.


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Re: 401K withdrawls - taxes
Old 02-13-2006, 07:20 AM   #22
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Re: 401K withdrawls - taxes

Wow that is a generous number.

In my case, our tax level is so low a conversion wouldnt make sense at all. I've run the calculators and we'd actualy come up with about 25k less if we converted and paid taxes now on the conversion, earned the same rate, and started withdrawal at the same time, and took all of the money.

Plus I *know* the little SOB's will put in a flat tax or national sales tax a month before I start withdrawals

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