Lsbcal
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I ran the Optimal Retirement Planner (ORP, Optimal Retirement Calculator and Retirement Decision Support System) recently with our numbers. It seems to suggest taking income with the following priorities:
1) after tax
2) Roth
3) IRA
So as an example it means withdrawals by age could be:
I don't really like the idea of totally spending the Roth money so that you cannot blend SS + Roth + IRA to get a better marginal tax rate throughout your retirement years. ORP seems to want to reduce taxes to close to zero in the age 65-70 period example above.
What do you think? Should one spend so much of the Roth money in the early years to extremely reduce taxes right away?
1) after tax
2) Roth
3) IRA
So as an example it means withdrawals by age could be:
In my example above, I would think the age 65-70 line should be: take SS + Roth + IRA. You would take the IRA distribution up to some reasonable marginal tax rate and then fill up your income needs with Roth money. This would help to avoid Roth money running out in the later years. It does mean paying more taxes and also taxing the SS money more fully perhaps.age 63-64: take SS + after tax
age 65-70: take SS + Roth (after tax all used up in this example)
age 70-84: take SS + Roth + IRA (RMD's only)
age 85-94: take SS + IRA (Roth all used up in this example)
I don't really like the idea of totally spending the Roth money so that you cannot blend SS + Roth + IRA to get a better marginal tax rate throughout your retirement years. ORP seems to want to reduce taxes to close to zero in the age 65-70 period example above.
What do you think? Should one spend so much of the Roth money in the early years to extremely reduce taxes right away?
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