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URL:  http://boards.fool.com/pauleckler-the-op-is-very-wise-to-look-hard-at-30663054.aspx

Subject:  Re: include taxes when figuring withdrawal needs Date:  5/1/2013  8:43 PM
Author:  RetiredVermonter Number:  72144 of 75797

Pauleckler:

The OP is very wise to look hard at expenses vs expected income. Too few people bother to do that!

However:

"As to taxes on distributions from like IRA or 401K, yes, there is little hope of avoiding them. You can do charitable contributions with them if you decide the funds are surplus. Otherwise, you can use your recent tax rates as a guide. I would reduce value by abt 20%, but in some income brackets rates can be lower or higher. Don't forget state and local income taxes."

Dunno the person's age, but I assume a young person (relatively).

When it comes to taxes on withdrawals from a 401k or IRA, a lot depends on your age (better be older than 59-1/2, of course, or you get hit with a special penalty) and what your total income is. In our case, we've not had to pay ANY tax on withdrawal of several thousand a year from my IRA for several years because our total income is low enough.

At our age now, by the way, according to IRS 1040 tables, we no longer needed to pay ANY taxes -- and we don't even have to file -- because our income other than SS income was less than $21,800 for 2012. Feels weird, but what the heck.

By the way, our Medicare Part B payments this year are LESS than the $103. indicated by another poster. We pay about just $96 apiece. We also pay another $340 total (for two of us) for Medigap with United Healthcare.

Very happy with Medicare and Medigap, BTW. Have had two surgeries in the last 3 years, and paid nary a nickel between those!

GL to all retirees.

Vermonter
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