New answers tagged

1

Adding my own answer as I've thought about it more and adding a piece that probably should have been included in the question. First off, I think it is correct (in agreement with the other nice answers) that the actual dollar amount in the nest egg must be related to your actual expenses in the year of retirement. So you must use inflation adjusted spending ...


3

You are correct. Better explanations of the 4% rule don't say "current expenses," rather they say expenses needed in retirement, expenses right before retirement, or some other wording to help address the issue you just highlighted. Simply applying the inflation rate for the number of years until retirement is probably a pretty good approach to keeping ...


4

Spreadsheets are really handy for this!! I calculated my hypothetical initial retirement budget based on my current budget adjusted for: what my father currently pays for Medicare Advantage (we're in the US), what expenses I think might disappear, what new expenses I think might appear, how taxes are calculated, years until retirement, and estimated ...


1

Justin's answer is absolutely correct. I'd like to focus on the aspect of 'withheld tax' vs 'tax due'. Say I retired early. 55, so no penalty to withdraw from 401(k), and no social security income yet. At $100K withdrawn, and a standard deduction of $24,400, (married filing joint), I'd have a taxable $75,600 and a tax due of $8684, ($1940 + 12% of amount ...


9

That seems reasonable given the facts presented. Normally, a 401(k) is a tax deferred account (you can have after tax money in there but that is less common so I ignore that possibility). The money wasn't taxed when it went in so it has to be taxed as regular income on the way out. If federal taxes were $989, that's 19.78%. If your father is single, ...


-1

I would keep personal and business separate. LLC allows you to be tax ones maybe a little higher, but you are allowed to claim your deductions which hopefully will compensate and lower it. Now, if you become a CORPORATION you will be tax double because corporations paid about 15% of taxes on profits less than $50,000 but, if you paid yourself, you would ...


1

CVR failed means Card Verification Request Failed. The Bank manager said it is due to some internal update, it will go away in a few days


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