Ncc1701
Recycles dryer sheets
Hi All,
Just looking for some opinions on what you would do if you were me in order to minimize the tax impact if inherited IRA withdrawals.
I have about $300K in an inherited IRA that I have to take RMDs from and fully withdraw by the end of 2033. The allocation currently is about 80% Equities/20% Cash. I plan on retiring one year from now and my wife will retire six months later so our earned income will drop. At the same time we plan to move to a state that does not have state income taxes. So just given those two factors I think it makes sense to wait about two years before withdrawing major money.
The "problem" is the account keeps growing so the longer I wait, I'll be paying more in Federal income tax down the road rather than Capital gains tax should I move the securities into my taxable account. So its a catch 22. Move more out of the IRA now to lower the future tax liability but be susceptible to a higher tax bracket now or wait to take advantage of a lower tax bracket in the future but with a potentially higher amount of withdrawals.
Not sure what to do. Thanks for your input!
Just looking for some opinions on what you would do if you were me in order to minimize the tax impact if inherited IRA withdrawals.
I have about $300K in an inherited IRA that I have to take RMDs from and fully withdraw by the end of 2033. The allocation currently is about 80% Equities/20% Cash. I plan on retiring one year from now and my wife will retire six months later so our earned income will drop. At the same time we plan to move to a state that does not have state income taxes. So just given those two factors I think it makes sense to wait about two years before withdrawing major money.
The "problem" is the account keeps growing so the longer I wait, I'll be paying more in Federal income tax down the road rather than Capital gains tax should I move the securities into my taxable account. So its a catch 22. Move more out of the IRA now to lower the future tax liability but be susceptible to a higher tax bracket now or wait to take advantage of a lower tax bracket in the future but with a potentially higher amount of withdrawals.
Not sure what to do. Thanks for your input!