IRA to ROTH and taxes on SS

IRA to ROTH and taxes on SS

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  #41  
Old 07-20-2017, 12:40 PM
JoelJohnson JoelJohnson is offline
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Location: Lady Lake, FL
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Your chart shows 1933 thru 1987 as being much higher

Best Answer: Partial History of
U.S. Federal Income Tax Rates
Since 1913
Applicable
Year Income
brackets First
bracket Top
bracket Source
1913-1915 - 1% 7% Census
1916 - 2% 15% Census
1917 - 2% 67% Census
1918 - 6% 73% Census
1919-1920 - 4% 73% Census
1921 - 4% 73% Census
1922 - 4% 56% Census
1923 - 3% 56% Census
1924 - 1.5% 46% Census
1925-1928 - 1.5% 25% Census
1929 - 0.375% 24% Census
1930-1931 - 1.125% 25% Census
1932-1933 - 4% 63% Census
1934-1935 - 4% 63% Census
1936-1939 - 4% 79% Census
1940 - 4.4% 81.1% Census
1941 - 10% 81% Census

1942-1943 - 19% 88% Census
1944-1945 - 23% 94% Census
1946-1947 - 19% 86.45% Census
1948-1949 - 16.6% 82.13% Census
1950 - 17.4% 84.36% Census
1951 - 20.4% 91% Census
1952-1953 - 22.2% 92% Census
1954-1963 - 20% 91% Census
1964 - 16% 77% Census
1965-1967 - 14% 70% Census
1968 - 14% 75.25% Census
1969 - 14% 77% Census
1970 - 14% 71.75% Census
1971-1981 15 brackets 14% 70% IRS
1982-1986 12 brackets 12% 50% IRS
1987 5 brackets 11% 33% IRS
1988-1990 3 brackets 15% 28% IRS
1991-1992 3 brackets 15% 31% IRS
1993-2000 5 brackets 15% 39.6% IRS
2001 5 brackets 15% 39.1% IRS
2002 6 brackets 10% 38.6% IRS
2003-2008 6 brackets 10% 35% IRS

The lowest rate between 1936 and 1980 was 70%. Today, the top tax rate now is 35% of earnings in excess of $357,701.
In the earlier period, budget deficits were minimal, in the latter, they have been a huge problem.

More about RMD
  #42  
Old 07-21-2017, 10:51 AM
tcxr750 tcxr750 is offline
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Default More about RMD

Quote:
Originally Posted by justjim View Post
Here is a thought. Most of us have worked hard, sacrificed, saved for our retirement and you just might want to take that RMD and do something "extravagant" with it. Life is uncertain and short at best. Just a thought........
My RMD thoughts. Assuming you had to take some $$$ from IRA to meet your expenses and that was added to a pot of money including pension and social security. Let's say you only want or need 5k a year from your IRA. Suddenly, your 71 and you have to start withdrawals on your $500k IRA based on the RMD. That will be $18,867. This percentage calculator increases each year.
ROTH IRA you still take out $5k.
Vanguard and FINRA websites, among others, have an RMD calculator.
It's good to be aware of ROTH IRA vs Conventional differences early in your working and saving career.
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  #43  
Old 07-21-2017, 12:32 PM
dewilson58's Avatar
dewilson58 dewilson58 is offline
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Quote:
Originally Posted by JoelJohnson View Post

The lowest rate between 1936 and 1980 was 70%. Today, the top tax rate now is 35% of earnings in excess of $357,701.
In the earlier period, budget deficits were minimal, in the latter, they have been a huge problem.


Top bracket is 39.6%
  #44  
Old 07-22-2017, 08:41 AM
JoelJohnson JoelJohnson is offline
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Quote:
Originally Posted by dewilson58 View Post
Top bracket is 39.6%
True, but very few get to this. At one time the top rate was 90%!!! But, there were deductions and such that really reduced the tax bite.

The average family pays less in taxes (percentage wise) than in the 80s.

My point is that if you are going to do an IRA to ROTH conversion, you are better off now since taxes will probably increase,

To be sure, all you need to know is 3 things:
1) How long you are going to live
2) What Washington is going to do
3) What inflation will be

Good luck with any of those.
As in my original reply
  #45  
Old 07-22-2017, 12:00 PM
suesiegel suesiegel is offline
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Default As in my original reply

Quote:
Originally Posted by Steve9930 View Post
Also cash flow out of a Roth is not used in the calculation on how much of your Social Security is taxable. It is possible if your income consisted of SS and a Roth you woul pay 0 Federal Tax.
It is impossible to answer the question without knowing net worth, age, expenses etc etc etc etc.

What is interesting is assuming that Trumps tax plan passes, it will shake up any calculations you will do today.
Will it happen? Frankly, I doubt it. But, we will get some sort of plan. The TALK is they must pass if by Thanksgiving so they can make it apply to this entire year.
FASTEN YOUR SEAT BELTS IT IS GOING TO BE A WILD RIDE.

Government is like a dog drooling over a steak. Few know or want to know that 42% of our now TWENTY TRILLION DOLLAR national debt is held by Social Security with no payback term or rate of interest. I expect the next steak they will grab will be retirement savings. Actually, while few see it for what it is that is one of the reasons why the government wants to fuel inflation is to devalue our currency. When, they devalue our currency it reduces what your savings, what your social security check, what your pension-if you have one, will buy.
  #46  
Old 07-22-2017, 05:54 PM
JoelJohnson JoelJohnson is offline
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The full tax program may not pass, but, that doesn't mean they can agree on some sort of tax increase. They will not touch the ROTH tax free system, that would be political suicide plus they get the tax money upfront. I'm pretty sure they will take away they hiers to take the inherited IRA/ROTH over their lifetime. They may make it a 5 year withdrawal time frame. That way you will have to tax the money out of the ROTH and invest what you don't need in a taxable account.
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