I am in the early stages of planning for FIRE. I understand the basic concept of the 4% withdrawal rate and am currently tracking our spending since May 1 this year. Of course spending is after tax $ while money withdrawn from investments is subject to taxes.
I am sure this is more complex than I think, but how do I estimate what my tax burden will be on that gross 4% withdrawal number? I have 401K, IRA, CD, I-Bonds that will be drawn from in the gap between RE and SS. To offset taxes during the gap period the only tax deductions I will likely have are property taxes. I will also have to pay for 100% of my medical insurance which has always been 100% paid by my employer, but that will disappear when I leave. Is medical insurance tax deductible, or are only actual medical expenses in excess of a certain level?
Sorry for such naïve questions, but I don’t know where to start.
I am sure this is more complex than I think, but how do I estimate what my tax burden will be on that gross 4% withdrawal number? I have 401K, IRA, CD, I-Bonds that will be drawn from in the gap between RE and SS. To offset taxes during the gap period the only tax deductions I will likely have are property taxes. I will also have to pay for 100% of my medical insurance which has always been 100% paid by my employer, but that will disappear when I leave. Is medical insurance tax deductible, or are only actual medical expenses in excess of a certain level?
Sorry for such naïve questions, but I don’t know where to start.