txtig
Full time employment: Posting here.
I’d like to get some comments on a withdrawal strategy regarding which accounts we should tap first once we retire. First of all, here’s our stats:
I’m 60. DW is 57.
We are planning to retire in 4 years.
We are planning to take SS at FRA. (66 for me and 66 years +2 months for DW)
I’m forecasting balances of about $3.1 million in IRA accounts and about $500K to $600K in our taxable accounts at our retirement date. No pension.
I’d like to initially be able to spend about $10,000 per month in retirement and want to figure out the most tax efficient way to withdraw our money. Certainly, withdrawing from the taxable accounts first would minimize our tax bill in the first few years of retirement, but once those funds were depleted, we would be subject to a 25% marginal rate on our IRA withdrawals.
I’m thinking the best strategy would be to tap both IRA and taxable accounts such that the withdrawal from the IRA accounts is no more than the top of the 15% tax bracket (currently $72,500 for a joint return). This would stretch out the period where I’d be withdrawing from my taxable account and delay any exposure to the 25% bracket.
Thanks in advance for your comments.
I’m 60. DW is 57.
We are planning to retire in 4 years.
We are planning to take SS at FRA. (66 for me and 66 years +2 months for DW)
I’m forecasting balances of about $3.1 million in IRA accounts and about $500K to $600K in our taxable accounts at our retirement date. No pension.
I’d like to initially be able to spend about $10,000 per month in retirement and want to figure out the most tax efficient way to withdraw our money. Certainly, withdrawing from the taxable accounts first would minimize our tax bill in the first few years of retirement, but once those funds were depleted, we would be subject to a 25% marginal rate on our IRA withdrawals.
I’m thinking the best strategy would be to tap both IRA and taxable accounts such that the withdrawal from the IRA accounts is no more than the top of the 15% tax bracket (currently $72,500 for a joint return). This would stretch out the period where I’d be withdrawing from my taxable account and delay any exposure to the 25% bracket.
Thanks in advance for your comments.