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5 tricky retirement taxes boomers should watch out for
Old 12-15-2019, 06:12 AM   #1
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5 tricky retirement taxes boomers should watch out for

Interesting story on Market Watch, very superfical but might be useful starting points for those that have not spent much thought on how finances can change in retirement.
There was a time not so long ago that I had not considered some of these topics.



Opinion: 5 tricky retirement taxes boomers should watch out for
At: https://www.marketwatch.com/story/5-...=yahoo&ref=yfp

5 items noted are:

1) Required Minimum Distributions or RMDs - I think most here understand them and the 50% penality if you don't take one.
2) State Taxes - Story talks about some states no income taxes, some tax IRA draws and 13 states that tax SS.
3) Social Security and part-time retirement income - Earnings may reduce your SS in short term
4) Claim back your Medicare surcharge - Talks about IRMAA, doesn't mention the big change in income table for a surviving spouse who must claim single.
5) The hidden savings in account sequencing - talks about different goals for your pile and levers you can pull to reach one goal or another (longevity of your savings or inheritance).
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Old 12-15-2019, 07:08 AM   #2
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Thanks. I've done a lot of research on 1-3, but #4 is newly on my radar.
And I have to add, thank you for your service - Go Navy!
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Old 12-16-2019, 10:26 AM   #3
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After I was forced onto my pension, we returned stateside and settled in Maine.

Maine does not tax military pensions.

Which sounds great, sort of.

You see on my pension, our annual gross income is not high enough to be taxed anyway. So the thing here about not taxing military pensions is more of a gimmick than actual savings.
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Old 12-16-2019, 11:20 AM   #4
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Quote:
Originally Posted by Offgrid Organic Farmer View Post
After I was forced onto my pension, we returned stateside and settled in Maine.

Maine does not tax military pensions.

Which sounds great, sort of.

You see on my pension, our annual gross income is not high enough to be taxed anyway. So the thing here about not taxing military pensions is more of a gimmick than actual savings.
Organics aren't the only thing you be harvesting! Tax Free, COLA's Pension, is gravy train baby. Talk about watching the seeds grow while harvesting your taxes efficiently Call you Offgrid Tax Farmer Nicely done.
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Old 12-16-2019, 11:28 AM   #5
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We have never made over $1000/year from our farming efforts. So I am a 'farmer' though my military pension serves as our primary source of income. As a farmer, nearly everything I own is a tax deduction.
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Old 12-16-2019, 01:31 PM   #6
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Quote:
Originally Posted by Offgrid Organic Farmer View Post
After I was forced onto my pension, we returned stateside and settled in Maine.

Maine does not tax military pensions.

Which sounds great, sort of.

You see on my pension, our annual gross income is not high enough to be taxed anyway. So the thing here about not taxing military pensions is more of a gimmick than actual savings.
It certainly isn't a gimmick for my mil pension. My state exempts a large portion of it and this will save me close to $2,000 in state tax.
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Old 12-16-2019, 01:54 PM   #7
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In PA, pensions, tax deferred account withdrawals, and SS are not taxed. My rental income comes to just below the $13,000 limit for a couple. Local income tax is based on Earned Income, but I gladly pay my property tax on my own home, which is reduced because of the shale gas subsidy paid for by user fees. We still have the 1936 10% tax on booze from the Johnstown Flood, on top of the 8% tax, but I found away around that. Also, grapes are food, and and exempt from sales tax.
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Old 12-16-2019, 02:55 PM   #8
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In Alabama, all defined pensions, governmental retirements and social security income is not subject to the 5% State Income Tax. And those that are disabled pay no property taxes either.

It's been great for my disabled wife and I. But they're going to get me next year when I'm required to take RMD's that I really don't need at this point in life.
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Old 12-16-2019, 04:49 PM   #9
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Originally Posted by ExFlyBoy5 View Post
It certainly isn't a gimmick for my mil pension. My state exempts a large portion of it and this will save me close to $2,000 in state tax.
I did not mean it was a gimmick for you or me. Our previous governor was a Repub and he pushed the military pension exemption through, by saying how it was going to help the military retirees.

Maine already has the oldest average age, and has the highest percentage of retirees among all states.

Taking a group of people, who already do not pay income taxes, and declaring their pensions to be tax-exempt does not really affect anything.

People [like me] who do not pay income taxes would continue to not pay income taxes. That is what I am saying was a gimmick

It sounded good to the civilians.
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Old 12-16-2019, 05:08 PM   #10
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RMD's aren't a tax but a required income.
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