Thread: Maricar19 Account Talk

Originally Posted by dannyboy

Thanks, I am right there please expand this. More?

Not sure about your question?

Originally Posted by evilanne

...I'm still working on a way to minimize taxes, but not sure that is going to be possible with pension & other income (especially when I start monthly payments from TSP)--still trying to wrap my head around things based on current tax code, which could change with new administration. Retirement distributions are treated as ordinary income as are conversions to ROTH IRA. I've got a long time before I'm eligible for SS, but your modified AGI impacts how much of your SS income is taxable (50 or 85%), see https://www.ssa.gov/planners/taxes.html. There are lots of factors to consider.

Hi- have you found the "magic" formula on minimizing taxes at retirement?

Originally Posted by Maricar19

http://www.firstchoicefinancialwebsi...44-secrets.pdf

TSP Withdrawal -I spoke to a TSP representative yesterday and I was told that once I start a monthly withdrawal, I cannot stop it. And the only option I have is to deplete the account and withdraw the balance in full, although I can only change the amount once a year.

This is not true anymore since the TSP changes. You can "Stop""Start" withdrawals anytime and you can choose whether to withdraw them from Traditional or Roth.

How much and when did you buy the following stocks?

AAPL	$ 113.81	2016
TSLA	$ 78.75	2019
AMD	$ 43.74	2020
MRNA	$63.95;$71.3	2020
ALGN	$ 152.00	2020
PLUG	$ 4.30	2020
WMT	$ 57.60	2008
GOOGL A	$ 1,660.00	2020

Which TSP option/s did or will you choose upon Retirement? Other

I am hoping to retire at MRA (57) with 30 yrs and looking at initially moving small amounts from TSP to a Roth IRA, trying to keep in lower tax bracket, at least until 62. Want more money in tax free bucket growing. Not sure what will happen at 62 when my and spouse SS income will bump it up to next bracket? Moving some into an IRA and leaving some in L-income fund to use for monthly payments. At least that is the current plan if it will work.

Originally Posted by Maricar19

How much and when did you buy the following stocks

My cost basis in WMT is $60.25. It's been a core holding for over a decade.

Originally Posted by flalaw97

Which TSP option/s did or will you choose upon Retirement? Other



I am hoping to retire at MRA (57) with 30 yrs and looking at initially moving small amounts from TSP to a Roth IRA, trying to keep in lower tax bracket, at least until 62. Want more money in tax free bucket growing. Not sure what will happen at 62 when my and spouse SS income will bump it up to next bracket? Moving some into an IRA and leaving some in L-income fund to use for monthly payments. At least that is the current plan if it will work.

We planned to do that, too, during our retirement...move small amounts from Traditional TSP to a Roth IRA.

Unfortunately, we found out the expensive way that no matter what, taxes will always be a killer.
If you can start (NOW) your Roth IRA, the better. We underestimated our tax situation.
When we were in pre-retirement, majority were saying that we will be in the lower tax bracket when we retire.
So far, it's not true. Almost a third to a half of our income is on the 22% tax bracket and a few in the 24% bracket.
We have two FERS pension (taxable), one SS pension(85%taxable), 1 military pension (taxable), and SS disability pension (taxable).
That's why we can't even touch our TSP(mostly in traditional) because of taxes- good thing that we don't need it (yet).
Contribute directly now to Roth or be sorry later.

PS. Don't forget that conversion from TRAD TSP to Roth IRA is a 2 step process (Trad TSP to Trad IRA and then Roth IRA).
If you convert your TSP during retirement and still stay in the 12% bracket, that is good.

Having to pay more in taxes is sometimes a good problem to have. Hope you get to spend that 401k you've saved for all these years because the RMD's could be painful too if you haven't spent any of it yet. Who knows, maybe we'll look back two years and wish 22% was all we were paying in taxes.

What % of your income have you replaced?

Originally Posted by Maricar19

We planned to do that, too, during our retirement...move small amounts from Traditional TSP to a Roth IRA.

Unfortunately, we found out the expensive way that no matter what, taxes will always be a killer.
If you can start (NOW) your Roth IRA, the better. We underestimated our tax situation.
When we were in pre-retirement, majority were saying that we will be in the lower tax bracket when we retire.
So far, it's not true. Almost a third to a half of our income is on the 22% tax bracket and a few in the 24% bracket.
We have two FERS pension (taxable), one SS pension(85%taxable), 1 military pension (taxable), and SS disability pension (taxable).
That's why we can't even touch our TSP(mostly in traditional) because of taxes- good thing that we don't need it (yet).
Contribute directly now to Roth or be sorry later.

PS. Don't forget that conversion from TRAD TSP to Roth IRA is a 2 step process (Trad TSP to Trad IRA and then Roth IRA).
If you convert your TSP during retirement and still stay in the 12% bracket, that is good.

Yes taxes are higher than I expected. A lot of that was that FEHP and FEDVIP premiums used to come from pretax income. Now I pay income tax on that amount. About $6200/year. So moving small amounts to a ROTH for later turned out to be not easy.

Originally Posted by Bullitt

Having to pay more in taxes is sometimes a good problem to have. Hope you get to spend that 401k you've saved for all these years because the RMD's could be painful too if you haven't spent any of it yet. Who knows, maybe we'll look back two years and wish 22% was all we were paying in taxes.

What % of your income have you replaced?

I suppose Bullitt. I should be grateful. I hope you are not right about that tax rate but…

In answer to the %, about 2/3 based on prior take home pay. Which had health insurance premiums taken pre tax.

PO

Originally Posted by Bullitt

...
What % of your income have you replaced?

Almost 90%. We didn't expect my spouse to be disabled (due to previous military injuries) prior to retirement. So the SSDI and Military Disability were a big plus to our income.
Without the military disability pay, approximately 75%-80%, close to PO's estimate.
The only difference is we don't pay as much medical insurance due to our military service. I only pay $30 a month (Tricare).
From this website (TSP Talk), we learned that we can suspend our medical insurance and re start it again if Tricare doesn't work for us.

Originally Posted by Bullitt

Hope you get to spend that 401k you've saved for all these years because the RMD's could be painful too if you haven't spent any of it yet. Who knows, maybe we'll look back two years and wish 22% was all we were paying in taxes.

We already planned for the RMDs. We still have 10 years to slowly work on it. We expect our RMD to be 25% or 27% when we turn 72 (per RMD2021Table). There is a so called qualified charitable contribution also that we are looking into. It takes a lot of planning..