Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Strategies For All Taxable Income
Old 12-28-2011, 07:14 PM   #1
Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,717
Strategies For All Taxable Income

Unlike some folks who have large collections of Roth funds, cash or taxable funds, rental properties, privately owned businesses; almost all the income my wife & I have is taxable. We have taxable pensions, mine Federal my wife was a teacher, my wife could take SS for the years she taught in parochial schools but it is a small amount, maybe $200 a month because of her state teachers pension. We have IRAs which are taxable on withdrawal. About 10% of our assets are in cash (credit union) and 10% in a taxable investment account which is actually growing a bit. We have started to draw down our IRAs to bolster our pensions and converted a small amount ($5K) into a Roth, but not go into the next tax bracket. I am not sure when RMDs come in 6 years that they will be significant, we would naturally be drawing down at the RMD level at least in the first few years.
So all the discussions about delaying SS, converting traditional IRAs to Roth for those with 0% or 15% tax rates, drawing down taxable funds to delay IRA withdrawals, all seem to not apply to our situation. No matter what we do pretty much everything will be taxable now and forever.

Wonder if I missed anything and looking for ideas about optimal approaches to retirement funding for this situation.

T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-28-2011, 07:38 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 8,944
10% in a taxable account means that you should not have much income on Schedule B and Schedule D.

To wit: use tax-efficient investments, tax-loss harvest, have no interest income, no bond income, only unrealized cap gains and realized cap losses, as well as only qualified dividends.

Perhaps put your int'l index fund in taxable in order to get the Foreign Tax Credit. The FTC will offset any taxes due to income listed on Schedule B and Schedule D should always show at least a $3000 loss.

LOL! is offline   Reply With Quote
Old 12-28-2011, 08:11 PM   #3
Full time employment: Posting here.
Lakedog's Avatar
Join Date: May 2007
Posts: 662
Similar situation for me since well into the 25% tax bracket.

Although not a large impact since limited to $3,000 annually against ordinary income, I try to book tax losses whenever possible (have a carryover balance to last a few years). Starting in January, I am switching to a HDHP so I can contribute to a HSA until I am 65 (10 yrs). These two together will reduce my fed taxes a bit over $1500 a year -- not a huge amount but helps a bit.
Lakedog is offline   Reply With Quote
Old 12-28-2011, 08:23 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,807
We are not too far from Yaker's situation. We will always be in 25% brackets due to taxable income (yeah, that is not actually a bad situations to be in) so most of what we read about Roth conversions, delays, etc don't work for us. We pull annual withdrawals from taxable for now but eventually that will run out and everything will be "income" from a FIT perspective.
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 12-28-2011, 09:38 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,943
Many people are in this situation . Tax efficient index funds might help.
The worst decisions are usually made in times of anger and impatience.
Chuckanut is online now   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Question re: Income stream preferences Lisa99 FIRE and Money 39 12-14-2011 08:35 PM
Income Investment Strategies During Retirement easysurfer FIRE and Money 22 09-01-2011 09:29 AM
GAO Report on Retirement Income Purron FIRE and Money 5 07-17-2011 02:27 PM
What percent of my income should I be saving in order to FIRE? nico08 FIRE and Money 23 07-06-2011 11:03 AM
State Income Tax Strategy - CA and WA Da Nag FIRE and Money 8 07-05-2011 04:29 PM


All times are GMT -6. The time now is 01:48 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.