- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: 401k - Putting in more than the company match pros and cons
Posted on 6/26/22 at 11:48 pm to notsince98
Posted on 6/26/22 at 11:48 pm to notsince98
quote:
The top end of 12% is around $84k/yr. Add on the Standard deduction of $25k and that puts the yearly income around $109k/yr. That is way more income that I would need at this point, so we may not go that high but it is my worst case scenario. So at $109k/yr i'd have an effective tax rate of 11%.
And if you supplement your income with taxable brokerage LTCG it's even less.
I feel like a lot of people don't realize that. If you are MFJ you don't pay a dime on the first 81k of LTCG.
So if you have a fat brokerage account that you've built over the years you can take out 106k before paying any federal taxes.
3
Posted on 6/27/22 at 1:42 am to JohnnyKilroy
The zero LTCG bracket seems to be overlooked by most. Everyone I ever mention that strategy to looks at me like I'm making shite up and it can't be true.
Even better, since only the gains are taxed you can actually pull much more including basis out without paying a dime of LTCG.
And if you dont need the $ that year you can harvest LTCG and reinvest to establish higher basis.
Drawing from Roth IRA contributions that dont count towards income will give more room to take advantage of zero LTCG on taxable.
Even better, since only the gains are taxed you can actually pull much more including basis out without paying a dime of LTCG.
And if you dont need the $ that year you can harvest LTCG and reinvest to establish higher basis.
Drawing from Roth IRA contributions that dont count towards income will give more room to take advantage of zero LTCG on taxable.
Posted on 6/27/22 at 7:17 am to JohnnyKilroy
quote:
So if you have a fat brokerage account that you've built over the years you can take out 106k before paying any federal taxes.
The majority of my clients have a federal and state effective tax rate that is sub 10%.
It is quite difficult for the average person to have a higher effective rate in retirement than they do while working. We do try to aggressively wind down pretax accounts, but mainly for estate purposes.
Posted on 6/27/22 at 7:39 am to JohnnyKilroy
quote:
I feel like a lot of people don't realize that. If you are MFJ you don't pay a dime on the first 81k of LTCG.
One thing to clarify is that assumes you have literally $0 income from anything other than long term capital gains.
If you have income from job/side hustle, a pension, take pre-tax 401k/IRA distributions, SS, capital distributions from an ETF/MF, dividends, etc, that eats into your $80k limit for no tax on LTCG.
There is a good chance if your brokerage account is big enough to utilize it as your primary source of income for the majority of your retirement timeline, then it will be spinning off some serious dividends as well.
Page 1 of 1
Back to top
Follow TigerDroppings for LSU Football News