Insightful. Makes so much more sense to give the money to a charity that will deploy the capital to do good in a meaningful purposeful way. It's not that taxes are bad but they sure are not aligned with one's desired choices on where they end up getting spent...
Thanks for unpacking a complicated issue. I too have started to spreadsheet my future years to avoid getting boxed into a tax penalty and giving back hard earned savings. My current spreadsheet shows me contributing to a taxable accounts from 53-56 ( currently in a 24% tax bracket), retire early in my mid 50's drop down to a 12% tax bracket - do Roth conversions up to a 22% tax bracket until SS kicks in. I loose the income from mid 50's on but my ultimate goal is to retire early , my second goal is to optimize taxes in retirement( avoid torpedo tax, not have RMD pushing me when I don't financially need to withdraw funds only to trigger taxes, and ultimately leaving generational wealth if possible to family tax free). All worthly goals - a seven figure IRA makes it possible, I have maxed out contributions for 30 years. I wish it was not so complicated but what it is is what it is, worth optimizing- thanks for the timely article. In my case these tax rules point to early retirement to avoid overpaying later in life. Some might say I am dodging taxes - I would argue I am avoiding double taxation on money I have previously saved by working hard and living below my means.
Comments
Insightful. Makes so much more sense to give the money to a charity that will deploy the capital to do good in a meaningful purposeful way. It's not that taxes are bad but they sure are not aligned with one's desired choices on where they end up getting spent...
Post: Sharing the Excess
Link to comment from December 27, 2023
Thanks for unpacking a complicated issue. I too have started to spreadsheet my future years to avoid getting boxed into a tax penalty and giving back hard earned savings. My current spreadsheet shows me contributing to a taxable accounts from 53-56 ( currently in a 24% tax bracket), retire early in my mid 50's drop down to a 12% tax bracket - do Roth conversions up to a 22% tax bracket until SS kicks in. I loose the income from mid 50's on but my ultimate goal is to retire early , my second goal is to optimize taxes in retirement( avoid torpedo tax, not have RMD pushing me when I don't financially need to withdraw funds only to trigger taxes, and ultimately leaving generational wealth if possible to family tax free). All worthly goals - a seven figure IRA makes it possible, I have maxed out contributions for 30 years. I wish it was not so complicated but what it is is what it is, worth optimizing- thanks for the timely article. In my case these tax rules point to early retirement to avoid overpaying later in life. Some might say I am dodging taxes - I would argue I am avoiding double taxation on money I have previously saved by working hard and living below my means.
Post: Juggling for Retirees
Link to comment from January 21, 2023