Retirement Taxes

Retirement Taxes
0.0 0.0 0.0 0.0 0.0 0

#1

Hello all!

Our income sources in retirement will be:

Social security
Qualified dividends and interest from taxable and Roth accounts
Pensions (didn’t pay into the pensions ourselves)
Rolling over a 401k to a Roth during the early years (staying in the 12% bracket)
Possibly an annuity

Q1. I know the Roth withdrawals are not considered when calculating whether 50% or 85% of SS will be taxed. What else above will be considered?

Q2. Which of the above incomes will be used to calculate our tax bracket? We want to stay in the 12% bracket or lower.

Thank you so much!


#2

Hi and welcome to the community, @laurasonnier! The answers are the same – all of the above! Provisional income (the term the IRS uses) that’s used to determine taxation of Social Security benefits includes:

  • wages
  • taxable and nontaxable interest
  • dividends
  • pensions
  • self-employment and
  • any other taxable income

If you haven’t started Social Security already, it can make sense to delay and tap other income to avoid the “tax torpedo” I wrote about here. Having the higher earner delay is usually advisable anyway.

Do you have a good tax pro or financial advisor? It’s really important to get good advice about what to tap when you’re trying to manage tax bills in retirement with so many moving parts.

Hope that helps – please feel to ask any follow-up questions.


#3

Thank you! Would you happen to know the answer to the second question? Thanks!


#4

All the income sources you listed would be part of your taxable income, which determines your tax bracket.