MasterBlaster
Thinks s/he gets paid by the post
- Joined
- Jun 23, 2005
- Messages
- 4,391
No problem. All my investments are in IRA's so any withdrawal is a taxable event. If I take SS I do not use IRA money. If I take SS equivalent from IRA fed tax is $2,850. In my case this would also trigger $1,431 in state taxes for a total of $4,281. By taking SS my tax is $900 fed and no state income. So $4,281- $900 = $3,381 in tax savings plus interest earned on IRA assets @ 4% = $760 for a total saved of $4,141.
SS of $19,000 x 8% = $1,520.
So in the first year you beat em'. I suspect you intend to live longer than just one year though. That $1,520 (plus COLA) comes every year until your demise. If you live to say 82 that's 20 years of COLA'd payouts with a net present value (pick your own discount rate here) of maybe $25k.