Quote:
Originally Posted by DAB
some advisors will harp on your taxes, and how they will chew up lots of your savings/income.
well, you will not be paying FICA tax in retirement. if you are in the lower tax brackets, then all capital gains taxes are taxed at 0%! woot. so if you have some investments outside your IRA/ROTH/401k, and they have some capital gains (like you would get in most mutual funds), then you can simply reinvest the gains each year, and pay zero taxes on those gains.
if you simply take money out of savings and pay your bills, then that money too is largely tax free, as you've already paid income taxes on it long ago.
income from SS is taxed by the Feds and most states, as is pension income.
several years ago, we had a lot of medical deductions, so we took those on Sch. A, and the net effect was to greatly lower our income. to the point that the refund check from the state (NM) that year included a flyer advising us that we may qualify for food stamps. 
remember, you are taxed on your income, not on your wealth. |
Good stuff DAB! We will not take SS until later (yes I know it may not be there for us) but will likely need to tap the retirement accounts. Fact is that we could transfer all to savings, go by the 4% rule, and be good.
However, I'm looking for something that does somewhat better than just drawing down on our savings.
So, should we just sink it in "safe" investments, buy a crap load of money products like short/mid/long term CD's, or continue on some other investment strategy?