How much in taxes will I pay?

[buzz]

I'm a Florida resident (no state income tax). I'm going to retire in a year. If I withdraw $120,000 per year from a traditional IRA, have a 30 year $305,000 mortgage at 5 3/4% (RE taxes about $3800), no other writeoffs, and am married filing jointly, how much do I pay Uncle Sam? Tax experts?

Thanks,
Buzz

 

[Mr._johngalt]

I don't have the answer as my brain is frazzled
working out my own tax strategies. Is your situation really that simple? If so, I envy you.

 

[dory36]

Be sure to look at http://www.i-orp.com/ for minimizing taxes in retirement...

Dory36

 

[blanston]

Buzz, I think that is great question. Unfortunately, not too many people interested in the topic. Tax liability in retirment is obviously an important. Bob Clatt, the author of Work Less/Live More used a genral figure of 3% for federal and state. Guess you would be less since no state tax.

 

[youbet]

Buzz,

If you use TurboTax or one of the similar programs to do your taxes, just use the 2005 edition and plug in your retirement scenario for a good approximation. If you don't do your own taxes, I'm sure whoever did them for you will be glad to do a pro-forma estimate for a minimal fee since it will only take a few minutes.

In either case, the 3% figure mentioned in one of the other replies is too low. Your $120k annual IRA withdrawal, net of mortgage interest and property tax deductions, will be taxed as ordinary income.

 

[SteveR]

Ummmm,
Did you guys notice that the thread you are answering is from 2002? It is very unlikely the OP has checked this thread recently. I admire your desire to address a poster's questions but perhaps a new thread would be in order to better discuss this topic with more current members.

 

[dory36]

Ummmm,
Did you guys notice that the thread you are answering is from 2002? 

One of the first things to go away in retirement is a sense of urgency...

 

[Martha]

I wonder how Buzz is doing and if $120,000 fit a 4% SWR.

 

[unclemick]

Single

60% of income now coming from trad IRA with RMD in 7 years.

My my - how time flys.

heh heh heh heh heh - it was more fun when I was a 'cheap bastard' the first 10-12 yrs with a modest pension and dividends. Oh well - time to pay the piper.

 

[Jarhead*]

I wonder how Buzz is doing and if $120,000 fit a 4% SWR. 

Buzz got discouraged, waiting 3 and a half years for an answer to his question, and gave up his dream of early retirement.

The last I heard, he is working in Tampa Bay as a Tax Attorney.

 

[Spanky]

Let's suppose Buzz's question is current, the federal tax rate would be 25%.
http://finance.yahoo.com/taxes/rates

 

[cute fuzzy bunny]

If he's withdrawing 120k a year and living in a half million dollar house, buzz can go hire a tax attorney!