pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This is an interesting idea!
Question: At what point is my income "low"? Do I have to wait until the end the year when taxes are due to prove I have no income? Because for the next four months I'll have no income at all. After that, I'll have the pension, and 14 months after that, I'll have social security. But those four months of no income - is that enough to have "low" taxes? How is this figured?
I'm sorry to bother you all what are probably really basic questions, and you folks have been so patient with me! Thank you!
If it were me I would begin with your last year's tax return, then replace your 2018 earnings from working with your 2019 earnings from working and see if there are any other adjustments that need to be made to estimate what your 2019 income will be.... similarly if you used the standard deduction then it will be $12,200 for 2019. So essentially you're doing an estimate of what your 2019 tax return will show for taxable income without any 403b withdrawals or Roth conversions.
The top of the 12% tax bracket for 2019 is $39,475 for a single. Your withdrawal or Roth conversions would be the excess of $39,475 over the amount you calculated in the prior paragraph. Since you worked for 2/3 or so of this year, you my already be in the 22% tax bracket.... in which case there may not be any benefit.
If you have a tax preparer you may want to talk with them about your calculations for 2019, 2020 and beyond and see what tax bracket you are in.
If your pension benefit grows if you defer taking it you might consider deferring your pension and SS for a couple years and use those years to do some low tax-cost withdrawals and/or Roth conversions. So for example, if you lived off savings in 2020 and deferred your pension and SS, your income would be really low and you could do a significant amount of withdrawals or conversions and pay very little tax.
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