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Discuss Latest POF Blog Post: Everyone is Using The 4% Rule Wrong

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  • TheDangerZone
    replied
    Originally posted by Zaphod View Post

    Apparently is a state level rule, says Oregon, all retirement is taxable, which...there are better options and a big giant "it depends" goes here really.
    The author states he is withdrawing from a cash balance plan and an IRA, with no taxable brokerage account. So Dusn’s scenario still holds true for federal tax.

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  • VagabondMD
    replied
    I long ago came to the same conclusion. The higher the earner and bigger the saver, the larger the balance in tax-deferred retirement accounts, the greater the embedded capital gains in taxable accounts, the more money in employer deferred comp accounts, and if you are lucky enough to throw in a pension, the bigger the bite taxes will take on the distribution side.

    If you are counting on spending $30,000 per year from a $750,00 portfolio, the tax bite will be very small, maybe negligible or zero. If you are counting on spending $300,000 per year from a $7.5M portfolio, well, be prepared to spend $200,000.

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  • Zaphod
    replied
    Originally posted by Dusn View Post
    I thought that because the standard deduction for a married couple is $24,400 in 2019 (if both are under 65 years old) and the top of the no-tax bracket for capital gains is $78,750. Most married couples can make a total of $103,150 per year without paying federal taxes? In addition there may be a child tax credit.

    So why are federal taxes so high in the example in the post?
    Apparently is a state level rule, says Oregon, all retirement is taxable, which...there are better options and a big giant "it depends" goes here really.

    Leave a comment:


  • Dusn
    replied
    I thought that because the standard deduction for a married couple is $24,400 based on online data from 2019 (if both are under 65 years old) and the top of the no-tax bracket for capital gains is $78,750. Most married couples can make a total of $103,150 per year without paying federal taxes? In addition there may be a child tax credit.

    So why are federal taxes so high in the example in the post?
    Last edited by Dusn; 03-12-2021, 11:14 AM.

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  • TheDangerZone
    replied
    “Everyone”

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  • Peds
    replied
    this is a sherlock post....

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  • Hatton
    replied
    Always remember taxes in your planning.

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  • Discuss Latest POF Blog Post: Everyone is Using The 4% Rule Wrong

    Calculating your FIRE figure is easy. Just apply the 4% and sail off into the sunset with nary a care ... Read more

    Click here to view the article!
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