Taxes after FIREd

[OBXretire]

I'm trying to get a handle on tax liability after retirement. Using both the Intuit and H&R Block tax estimators I come up with what looks like ridiculously low looking taxes. How accurate are they? Approximately 79k income of which 43,250 is SS produces a total Fed and State tax of around 5400 to 6000 (of course after deductions, mort., prop. tax, etc).

Also the DW has the State pension where I can get my health ins.(497 @mo.), will they take that out of her check before taxes? If so, that reduces the tax burden even lower (about 1700). Am I missing something?

I'm still trying to find the flaws in our plan to retire 7/15. Given the above, after taxes, covers our existing budget nearly 100% including the additional HI expense, it looks like we are currently just working to provide tax revenue.

 

[pb4uski]

Lower taxes in ER is common. You got the right approach - do a pro forma tax return based on your future circumstances. Magnitude sounds about right.

 

[rothlev]

I do taxes for HR Block. It is probably correct.

The way I run this is by using the same tax program I filed my taxes with and adjust the numbers to match what your income will be in retirement.

Your numbers are perfectly reasonable for 79k of income. When I put your numbers in Block's software, I am up with a federal tax bill of around 4000. Obviously, I do not have enough information to make an accurate estimate.

 

[rothlev]

Also, it appears that your social security income will only be about 50% taxable. ( that helps a lot)

 

[rothlev]

Normally health insurance premiums are no longer pre tax in retirement.

 

[martyb]

Normally health insurance premiums are no longer pre tax in retirement.

That is the case with my fed govt. retirement, starting in July this year.

 

[OBXretire]

Thanks for all the responses, this is fortifying my resolve to stay on this course. I've initiated a process at work that will allow me to bow out gracefully and leave everyone in a good situation, but it most likely will become an irreversible process in the next couple of months. So, I've got to get this right the first time.