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22% tax bracket
Old 11-03-2019, 10:09 AM   #1
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22% tax bracket

Wife and I in our mid 60's will next year not be able to stay in the 12% bracket. Have been drawing from our tax privileged and taxable accounts to supplement our lifestyle. Considering just drawing now from our taxable accounts only. Some money may be hit by capital gain tax but is only 15%. Thoughts? Thanks
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Old 11-03-2019, 10:17 AM   #2
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Do you expect to be in the 22% tax bracket for the rest of time?

IOW, if between pensions, taxable SS, taxable account income less the standard deduction you'll be in the 22% tax bracket in the future no matter what then I would continue drawing from tax-deferred accounts since it is a pay me now/pay me later type of thing.

OTOH, if you expect to be in the 12% tax bracket later on then I would probably use taxable account money.
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Old 11-03-2019, 10:23 AM   #3
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You say you are mid 60's so I assume ACA is not a consideration. In that case I would take from tax advantaged accounts first. Taxes will likely be higher in the future, they won't be any lower.
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Old 11-03-2019, 10:44 AM   #4
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Doing a back of the envelope scenario it looks like I can stay in the lower bracket by taking less from tax privileged. I had been taking from both because my thinking was when I reached RMD status my withdrawals wouldn't have to be so much.....if that makes sense.
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Old 11-03-2019, 11:16 AM   #5
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OP - Are you collecting SS right now ? ,
If not then RMD time will be a big jump in income.

Also by taking money from taxable, you are giving up on the step up in basis of capital gain upon death, which could be huge over the next 20 years.
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