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The conventional wisdom when I was socking money away in an IRA and a 401k was that tax rate in retirement would be lower than when working. What I never considered was that withdrawals from those accounts are taxed at a lower rate than I paid while working, but they also make more of my SS benefit taxable. So while my overall tax rate is very low, my marginal rate on IRA/401k withdrawals beyond what I need to live on would be 27.24%.

Even so I'm considering beginning to take a little extra each year to build a fund for big purchases like autos and home improvements. I could take an extra $9K and I would still be in the 15% bracket so my modest capital gains would not be taxed. My state doesn't tax SS or retirement plan withdrawals so no impact there. My overall tax rate would go up to 8.33% of total income from current 4.38%.

I have to start RMD in 2016. Am I crazy to take extra from the retirement plans now?
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