I am still currently a high earner (self-employed) with plans to significantly downshift starting in 2020 (expect income to start dropping significantly). While I have reached FI (DW and I are 55), I enjoy most of what I do and am able to effectively work part time at this point so plan on letting the market (my industry) dictate when I truly hang up the spurs. My guess is the market could keep me in the game another 1 - 3 yrs before I need to tap my assets. I am in the top tax bracket so my focus has been maximizing all my tools to minimize current taxes.
Here is my first world dilemma as I look forward to the days I start living off my assets... currently my investments are split +/- 50/50 in taxable and tax deferred accounts. My plan is to withdrawal $300K+/yr (highly discretionary). While I have followed many of the Roth conversion discussions, I am not sure how practical that is in my case as my current income is significantly above my planned withdrawal amounts. As someone who subscribes to the Total Return approach, I figure my RE income will come from interest and dividends first followed by capital gains and/or some combination of partial tax differed account withdrawals up to a specific marginal tax bracket. Frankly, that's as far as I have really strategized at this point. Candidly, I have also just thought about pulling only from the taxable account until it is dry and then facing the Tax Reaper with my tax deferred withdrawals at that time.
For those of you who are withdrawing higher amounts, what, if any, tax strategies have you employed to keep the Tax Reaper away?
Here is my first world dilemma as I look forward to the days I start living off my assets... currently my investments are split +/- 50/50 in taxable and tax deferred accounts. My plan is to withdrawal $300K+/yr (highly discretionary). While I have followed many of the Roth conversion discussions, I am not sure how practical that is in my case as my current income is significantly above my planned withdrawal amounts. As someone who subscribes to the Total Return approach, I figure my RE income will come from interest and dividends first followed by capital gains and/or some combination of partial tax differed account withdrawals up to a specific marginal tax bracket. Frankly, that's as far as I have really strategized at this point. Candidly, I have also just thought about pulling only from the taxable account until it is dry and then facing the Tax Reaper with my tax deferred withdrawals at that time.
For those of you who are withdrawing higher amounts, what, if any, tax strategies have you employed to keep the Tax Reaper away?