G' Day, y'all!
My wife and I plan on retiring early next year and start drawing SS retirement benefits. At the same time we will have to substitute our income by drawing money from our investment accounts and I have a question regarding taxes and IRA contributions.
To keep this simple, let's assume we get $30K annually from SS in retirement benefits.
We will substitute this by drawing another $30K annually from our Traditional IRA.
Thus, income of $30K + $30K = $60K would be subject to income taxes . . . me thinks.
Now . . . until age 70 we can still contribute to an IRA. The limit is raised from $7,5K to $10K for 2025, so the wife and I could just transfer 2 x $10K = $20K from our taxable brokerage account into our Traditional IRAs.
Does that work, in that our taxable income would be reduced by that amount?
$30K + $30K = $60K - $20K = $40K?
Your expert opinion and feedback is most appreciated.
Thank you!
My wife and I plan on retiring early next year and start drawing SS retirement benefits. At the same time we will have to substitute our income by drawing money from our investment accounts and I have a question regarding taxes and IRA contributions.
To keep this simple, let's assume we get $30K annually from SS in retirement benefits.
We will substitute this by drawing another $30K annually from our Traditional IRA.
Thus, income of $30K + $30K = $60K would be subject to income taxes . . . me thinks.
Now . . . until age 70 we can still contribute to an IRA. The limit is raised from $7,5K to $10K for 2025, so the wife and I could just transfer 2 x $10K = $20K from our taxable brokerage account into our Traditional IRAs.
Does that work, in that our taxable income would be reduced by that amount?
$30K + $30K = $60K - $20K = $40K?
Your expert opinion and feedback is most appreciated.
Thank you!
Statistics: Posted by Bernard — Thu Sep 05, 2024 10:21 am — Replies 13 — Views 544
