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Reed Reed is offline
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Default OT How much IRA to take out?

On 10/25/11 8:37 PM, Metspitzer wrote:
Anyone know of a rough way to figure out what is the right amount of
money to take out of retirement without paying too much tax that year?

My income will be the same this year is it was the last, but I want to
withdraw some of my retirement. How do you figure out what percent
tax you will have to pay?

If you can recommend an "active" group where this would be on topic I
would appreciate it.


This concept for IRA withdrawals is called "topping up the bracket".
It's basically fairly simple to figure. Look at your 2010 tax return
at the line for TAXABLE INCOME (Line 27 on 1040A). Then look at the
bracket ranges (ie $0-$8375 = 10% for Single filers)

The difference between Line 27, and the $8375 (in this example) is how
much room you have left to stay in the 10% bracket (again this an
example). Your Taxable Income, equivalent Bracket, and File Status may
vary.

This also assumes you are the correct age, etc to not having an "early
withdrawal" penalties, etc. Also IIRC, you must make the withdrawal
before DEC 31 to apply to that years return. So you need to do a rough
"what-if" return before the end of the year to get a good idea of how
much you can "top up the bracket.

in addition to NG misc.taxes.moderated
the forum at http://www.city-data.com/forum/retirement/
has good discussions

I have been doing this since age 59.5, now 67.

BTW, is your Vanguard MF account specifically a Traditional or
Rollover IRA account ?? If it's a Roth IRA, or a non-IRA account, then
none of this applies.