Hi. I used Turbo Tax TaxCaster calculator in order to estimate my effective tax rate in retirement. I am 43 and I plan to have a 60 % bond and 40% stock allocation. So I used 60 % of my total retirement income as interest, based on the bond allocation, and I used 40 % of my retirement income as dividend and long term capital gain, based on the stock allocation. Of the 40 % I used about 12% as dividends and 88% as long term capital gain.
I used about 5,000 as mortgage interest and 5,500 as property tax as deductions because I will continue the mortgage into my retirement and I do not intend to relocate to an area with lower property taxes in the near future.
So I ended with approximately 5.5% as my effective tax rate as my estimate. Based on my situation, does this sound about right? What is your effective tax rate in retirement?
I used about 5,000 as mortgage interest and 5,500 as property tax as deductions because I will continue the mortgage into my retirement and I do not intend to relocate to an area with lower property taxes in the near future.
So I ended with approximately 5.5% as my effective tax rate as my estimate. Based on my situation, does this sound about right? What is your effective tax rate in retirement?