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How much in taxes will I pay?
12-26-2002, 03:03 PM
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#1
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Confused about dryer sheets
Join Date: Dec 2002
Posts: 1
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How much in taxes will I pay?
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
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Re: How much in taxes will I pay?
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12-27-2002, 01:58 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Dec 2002
Posts: 3,875
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Re: How much in taxes will I pay?
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.
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Re: How much in taxes will I pay?
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12-28-2002, 04:30 PM
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#3
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Early-Retirement.org Founder Developer of FIRECalc
Join Date: Jun 2002
Posts: 1,841
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Re: How much in taxes will I pay?
Be sure to look at http://www.i-orp.com/ for minimizing taxes in retirement...
Dory36
__________________
Often uninformed, seldom undecided.
Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain
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Re: How much in taxes will I pay?
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07-03-2006, 10:25 PM
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#4
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Dryer sheet aficionado
Join Date: May 2006
Posts: 48
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Re: How much in taxes will I pay?
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.
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Re: How much in taxes will I pay?
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07-03-2006, 10:50 PM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,186
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Re: How much in taxes will I pay?
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.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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Re: How much in taxes will I pay?
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07-03-2006, 11:16 PM
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#6
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Moderator Emeritus
Join Date: Jul 2005
Posts: 2,811
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Re: How much in taxes will I pay?
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. 
__________________
Work? I don't have time to work....I'm retired.
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Re: How much in taxes will I pay?
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07-04-2006, 04:27 AM
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#7
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Early-Retirement.org Founder Developer of FIRECalc
Join Date: Jun 2002
Posts: 1,841
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Re: How much in taxes will I pay?
 Quote:
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Originally Posted by SteveR
Ummmm,
Did you guys notice that the thread you are answering is from 2002?*
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One of the first things to go away in retirement is a sense of urgency... 
__________________
Often uninformed, seldom undecided.
Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain
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Re: How much in taxes will I pay?
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07-04-2006, 06:40 AM
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#8
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: How much in taxes will I pay?
I wonder how Buzz is doing and if $120,000 fit a 4% SWR. 
__________________
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No more lawyer stuff, no more political stuff, so no more CYA
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Re: How much in taxes will I pay?
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07-04-2006, 07:08 AM
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#9
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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Re: How much in taxes will I pay?
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.
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Re: How much in taxes will I pay?
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07-04-2006, 07:28 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Dec 2003
Posts: 1,375
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Re: How much in taxes will I pay?
Quote:
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Originally Posted by Martha
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. 
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Re: How much in taxes will I pay?
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07-04-2006, 08:36 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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Re: How much in taxes will I pay?
Let's suppose Buzz's question is current, the federal tax rate would be 25%.
http://finance.yahoo.com/taxes/rates
__________________
May we live in peace and harmony and be free from all human sufferings.
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Re: How much in taxes will I pay?
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07-04-2006, 09:11 AM
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#12
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: How much in taxes will I pay?
If he's withdrawing 120k a year and living in a half million dollar house, buzz can go hire a tax attorney!
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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