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Old 06-04-2014, 12:02 AM   #21
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urn2befree.............excellent point......I was so focused on trying to translate OP's question (which I may have misinterpreted) into a tax answer that I myopically forgot to take the higher level view that you did. Except for a minor math error in your final calculation, I agree with you.

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Old 06-04-2014, 02:31 AM   #22
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one area most folks screw up is in going by rules of thumb and not their own situation.

common wisdom says spend tax deferred money last and let it grow and taxable accounts first. but for many that is poor advice.

uncle sam gives a 65 year old couple the ability to not only take over 20k a year in tax free income every year but the ability to take almost 42k and pay as little as 1800 bucks tax on it.

folks let that ability go unused year after year by spending money they already paid taxes on or the little bit of distribution income they get in taxable accounts while letting that tax free money ability go unused.

someone delaying ss to 70 can actually pull 320k out of retirement money and pay very very little tax on it.

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Old 06-04-2014, 04:57 AM   #23
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Originally Posted by urn2bfree View Post
I am confused. Why take the dividends from the tax deferred account? As long as they stay in the tax deferred account they are not subject to taxes.

Why not take the $44 in dividends from the taxable side and sell $106k from the taxable account? (87% is return of principle and not taxable) making
Sorry for the lack of clarity. That is exactly my intention. At my current allocation of 70/30, I feel it prudent to scale down the equity portion of my portfolio. My anticipated draw of 150 on the taxable portion of the portfolio should accomplish this. I just mentioned the dividends from the deferred account from a standpoint of the tax question.
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Old 06-04-2014, 05:07 AM   #24
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BTW, Great suggestions from all. I have already ordered a copy of the 2013 TurboTax as well as started playing around with those online calculators. I already feel that I have a better understanding of what I will be dealing with. I am amazed at the small amount of tax that I should have to pay! This will be a refreshing change from those giant checks that I have been writing each year! Thanks to all.

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