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I found the following post at morningstar in Sue Stevens area of personal finance.

My question: if you changed the age to 66 years, assumed max SS income for 2004 (1) and married filing joint, what is the taxable income and AGI one could have and still remain in 15% bracket?

Related question: does realized capital gains have an impact on the tax bracket? Or does the amount of IRA distribution control the bracket? IOW, does one need to find a porportional withdrawal amount from IRAs vs taxable to maximize income in the 15% bracket?

<<<I'm a 60-year-old retiree who is an experienced investor with over $1 million in a 401(k) and IRAs and $400,000 in taxable accounts. This is just as background.

I want to say "amen" in particular to your suggestions in "Smart Ways to Tap Your Retirement Accounts" about withdrawing enough from deferred accounts to stay within the 15% tax bracket. I'm not sure many seniors realize that a couple married filing jointly in 2004 can have taxable income of $58,100 and still be in the 15% bracket. With the standard deduction of $9,700 (2004) and $6,200 (2004) in exemptions, they can have $74,000 in adjusted gross income. Of course, this bracket allows such a couple to pay only 5% on capital gains and dividends for the next few years. Such a deal!

My personal strategy for now is to take distributions and use aftertax funds as needed to remain in the 15% bracket as long as I can. I plan especially to be in the 15% bracket in 2008 so I can take all the capital gains possible when they will not be taxable. I also am planning to convert as much as I can from traditional IRAs to my Roth IRA, as long as I can keep taxable income below $58,100. (I'm not positive these small conversions to Roth are the right strategy, but it seems to make sense to me.) Of course, when I hit age 70½ I'll have to start taking required miniumum distributions and may then be in a higher tax bracket, but perhaps I can stay in the 15% bracket until then.>>>

I tried entering what-ifs into a 2003 trial version of Turbo Tax. I think I got roughly $60K from IRA, $5K LT gain, max SS $22K(?) still maintained 15% bracket. 66 years is a few years into the future and I'm not sure 2003 TT liked some of my entries. (birthdate, SS)

IOW, I tried but I think I butchered TT.

Thanks for any help with adjusting the "original post" to 66 years with max SS and remaining in 15% bracket.


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