Planning for income in retirement/tax questions
DH will likely retire Sept. 1st. We will both be 59 1/2 at that point. We are in the 15% tax bracket. Income (50K per year) will be a combination of:
Pen Fed CD interest
Distributions from taxable Wellington account
tax free cash on hand (from inheritance)
Withdrawl from a traditional IRA
I am trying to massage the income for both tax efficiency and to qualify for a silver plan in Covered Calif (ACA). Re: the trad IRA withdrawl, I called Vanguard to see if they are required to withhold taxes, and they said, no, it's optional, but if they do withhold, the minimum is 10% of the withdrawl. I am thinking it might be wise to have them do this, so that we will avoid having to make quarterly tax payments. Does this seem reasonable?
Secondly, I am trying to find info online about how traditional IRAs are taxed after we reach 59 1/2. Do the cap gains and div distributions suddenly become taxable, or do they continue to be tax differred as long as they are reinvested in the fund? I know if we sell shares in a trad ira, we pay ordinary income taxes on that money, right?
Sorry if these are dumb questions, and thanks in advance for any links for info, personal experience in this area, etc.