How To Pay $0 Tax on Six-Figure Retirement Income [Without Using Roth!]
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- čas přidán 7. 08. 2024
- One of the biggest advantages retirees have is controlling where their income comes from and how it is taxed as a result.
In this video, Jake explains how you can live on a healthy $8500/month in retirement without paying a single dollar in income taxes... all without using a Roth account (that would be too easy).
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0:00 Tax Control In Retirement
0:53 Overview of Clients
1:50 Retirement Income ($8500/mo)
2:30 Calculating Portfolio Need
3:18 Preliminary Tax Report
3:45 Provisional Income
5:00 Reaching $102K with $0 Tax
5:40 Why Taxes are $0
5:50 Additional Opportunities
6:45 Recap & Big Picture of Tax Planning
Visit our website to see if we're a good fit to work together:
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*This content is educational and not tax, legal, or investment advice*
Are taxes a concern for you when you retire?
When you do the Roth conversion at that point, if you stay under that $94,000, I'm assuming you don't need to come up with any cash to pay taxes on the conversion because its zero tax rate. Is that correct?
Remember the $94,050 is the 0% long-term capital gains tax bracket. Meaning, with no other income (social security, interest, etc.) you can realize $94,050 in long-term capital gains and pay no taxes (really more if you include standard deduction.)
Converting to Roth is ordinary income which is taxed separately, so you could still owe taxes if your AGI is within the $94,050, since that bracket applies only to capital gains.
But, to answer your question, if your projected tax liability on a Roth conversion is 0, then you are correct in assuming you would not need to pay out of pocket for taxes.
Sorry if I didn't explain this well in the video - let me know if that makes sense!
@@SparkWealthAdvisors You explained it perfectly, I guess that 94k is really for capital gains harvesting from my brokerage account. And the conversion is ordinary income that I want to keep below that 22% tax rate, for me personally. Just trying to optimize. Thanks for the feedback, I just subscribed 👍
@@dlipp23 Exactly! Thank you for subscribing!
Talks fast- couldn’t follow
Sorry about that!