How much in taxes will I pay?


Confused about dryer sheets
Dec 22, 2002
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?

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.
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.

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.
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. ;)
SteveR said:
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... :LOL:

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

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