Lux Investing
what is the best way to start taking out from the 401k savings?
i retired early,due to lay off situation,by the age of 64,in 2007.i have my ira acct,which was roughly $42000/-now it is $35000/- due to market fluctuation,it is invested in a very conservative fixed income portfolio.once it was down to $26000/-but now it goes few thousand down and then few thousand up,since i can not afford to contribute,it will be very slow growth but next year i want to start taking out,what will be the best way and how much i should take out to be the lowest tax braket for the tax return.my yearly total income is $8136 only.can it be ok to take out 10 to 12 thousand yearly till finish from the ira account.so with $8136+12000=almost $20,000 yearlywill be estimated incomefor the tax purpose,how much tax i have to pay if my total income from all source will be only $20,000/-. i wanted to take out all but ,heard that i will loose too much in tax because the income will be higher.please give me the exact and solid answer only from the income tax profetionals.no guess. yes i am single (widow).this year my total income from jan/2007 to dec/2007 will be only $8136/-no cd no other income or dividen.may be a check of $600/-, i heard we all are going to get soon,by mail.do i have to pay the incometax on that. remember the money i have in my ira is pretaxed.what ever i contributed during my job,was not taxed and then whatever employer contributed ,that got acumulated which i rolled over to ira by trowe price.does it make any differance in your answer to my previously answer by you.
Public Comments
- First, I am going to assume that you are single and that the $8,136 is Social Security. You will not be taxed on your Social Security as long as you take out no more than about $20,000. It would be great if you could manage that. To avoid income tax entirely, you would need to withdraw no more than $10,300. At this level, you would not be required to file a tax return and would owe no tax. If you took out an extra $2,000 for example (total $12,300), you tax would be $200. If your circumstances do not meet my assumptions, you need to give your filing status and other sources of income to get the correct answers. But the reasoning is the same.
