ER before 59.5 and 72t

[nun]

My planning shows that I can ER and can live off my taxable accounts until I can withdraw from my IRAs at 59.5. I'll be spending them down a bit, but I don't need to 72t to survive. However, my taxable income will be quite small, so should I 72t anyway up to say the 15% tax limit?

 

[Texas Proud]

My planning shows that I can ER and can live off my taxable accounts until I can withdraw from my IRAs at 59.5. I'll be spending them down a bit, but I don't need to 72t to survive. However, my taxable income will be quite small, so should I 72t anyway up to say the 15% tax limit?

Or you could convert to a roth an amount to the 15% bracket... no reason to pay taxes on any gains going forward...

 

[MasterBlaster]

take a look at the ORP (Optimal Retirement Calculator)

http://www.i-orp.com/

They do a tax-optimal withdrawal scheme based on a constant growth model. They may have you doing some Roth IRA conversions also.

But to answer your question directly, yes you probably should take money out at the 15% rate. Just verify that with ORP though.

 

[frayne]

Remember if you start a 72T you have to stick with it for five years or until you are 59.5 years of age, whichever is longest. What I am trying to say is before starting a 72T, do your homework. As far as your situation, depends on your spending habits and expenses.

 

[nun]

Or you could convert to a roth an amount to the 15% bracket... no reason to pay taxes on any gains going forward...

yep that's the way to go

 

[Alan]

Or you could convert to a roth an amount to the 15% bracket... no reason to pay taxes on any gains going forward...

This is what I decided to do.