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I am 66 and filed for social security. keep working making about 70k . remove all my Roth and 401K . how much tax owed?

Oct 09, 2016 by mike in  |  Flag
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Peter Cacioppo Level 16

What are you saying when you said "remove all my Roth and 401k" Do you do your own taxes as some tax programs can calculate what you are asking, possibly. If you are in San Diego, CA, we can meet and go over your situation.

Comment   |  Flag   |  Oct 10, 2016 from La Jolla, CA

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Mike,

Congrats on taking the time to ask a question and to plan your retirement years. Based on your limited amount of information, I can only share some general insights that you might find helpful.

  1. Roth IRA accounts grow tax free and Roth distributions are tax free in the year you receive them.
  2. 401-k and Traditional IRA distributions are 100% taxable in the year you receive them
  3. 401-k and IRA account distributions have to begin their Required Minimum Distributions (RMD) starting the year the taxpayer reaches age 70.5. Taxpayers can delay the receipt of this first RMD until April 1 of the year following the year they turned 70.5 years old. Note, you then need to take your second RMD by December 31st of the same year. This RMD will continue annually for the rest of your life.

Since it sounds like you are retiring soon, you probably will be better off taking taxable IRA distributions sooner and paying a smaller amount of incremental income taxes over time. Leave your Roth IRA distributions for last since they grow tax free and are tax free distributions.

Also, review your asset allocations for these account sand make sure they are risk appropriate. I also recommend that you use a fee-based fiduciary adviser when managing your wealth. Starting in April 2017, this will become a law that all advisers to retirement accounts must be a fiduciary.

Take care.

Comment   |  Flag   |  Oct 10, 2016 from Milwaukee, WI

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Larry R Frank Sr Level 20

HI Mike, Taxes depend on other factors you haven't mentioned, such as exemptions and deductions too. Your State also has their tax laws to consider unless you live in a no-income-tax State. The only real way to estimate your taxes would be to: 1) do it yourself (and risk not completely considering everything, or not fully understanding what the tax software is asking). Or, 2) seek out an enrolled agent (EA) ( http://taxexperts.naea.org/ ) near you. Or, 3) you could seek out a fee-ONLY tax expert from NAPFA (the are fiduciaries to be members) near you (they don't sell products) who could answer your tax question(s) and if you have investment questions they could answer those too (members are also CFPs) ( http://findanadvisor.napfa.org/Home.aspx - and check the "Tax Planning" box in the lower right and they may also be an EA too).

Best wishes as you zero in on the answers - taxes are only easy for those who work in the field and keep up with everything as tax laws change.

Comment   |  Flag   |  Oct 10, 2016 from Roseville, CA

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