Since her household income is more than $44,000, chances are her SS will be taxed at 85%. Not 100% of her SS is taxable.
Therefore your formula would be (401K withdrawal + 85% of SS + other income) < $109450
Of course only the income above $109450 would be taxed at 22%, e.g. if income is $100,000, only $550 (100,000-109450) would be taxed at 22%. So she's free to experiment on how much 401K withdraw she could make to optimize her number for the future years.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) became law on December 20, 2019. The Secure Act made major changes to the RMD rules. If you reached the age of 70½ in 2019 the prior rule applies, and you must take your first RMD by April 1, 2020. If you reach age 70 ½ in 2020 or later you must take your first RMD by April 1 of the year after you reach 72.
For defined contribution plan participants, or Individual Retirement Account (IRA) owners, who die after December 31, 2019, (with a delayed effective date for certain collectively bargained plans), the SECURE Act requires the entire balance of the participant's account be distributed within ten years. There is an exception for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person or a person not more than ten years younger than the employee or IRA account owner. The new 10-year rule applies regardless of whether the participant dies before, on, or after, the required beginning date, now age 72.
Your required minimum distribution is the minimum amount you must withdraw from your account each year. You generally have to start taking withdrawals from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account when you reach age 72 (70 ½ if you reach 70 ½ before January 1, 2020). Roth IRAs do not require withdrawals until after the death of the owner.
You can withdraw more than the minimum required amount. Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).
Per this table, the life expectancy of a 30 year old would be 55 years, so he/she expected to live until 85 years old.
However at the same time, a 65 year old's life expectancy would be 22.9, that is, he/she is expected to live until 87 years old. When the RMD starts for IRA at 70 1/2, it is assumed the 70 year old would live for noather 18.8, and when RMD starts for 401K at 72, it is assumed the 72 year old would live until 89.2.
The longer you live, the longer you are expected to live because the "weaker" ones already died off.
Your friend probably thought the marginal tax bracket applies to all income.
Marginal tax bracket is useful for plan tax because any "additional income" (e.g. rent income, part time income) are taxed at that rate because other fixed income (salary, SS, 401K withdraw) already filled the bulk of the bracket, the 10%, 12% etc.
朋友退休准备提取401K, 她想躲避22％ 的税率，所以只想取出少量资金。问题是，tax bracket 是deduction 之后的值，也就是说，2022年的standard deduction 是两人25900，她的所有的income减去25900之后，不超过，83550 就在12％ 范畴。这样的理解对不对？再具体些就是她的SS , 股票收入，银行利息等等加一起不超过83550+25900=109450。这个理解对吗？
https://www.irs.gov/pub/irs-pdf/f1040.pdf
line 15 taxable income = line 11 (adjusted gross income) - line 14 (deductions)
And the taxable income is what's used in tax bracket calculation.
Your required minimum distribution is the minimum amount you must withdraw from your account each year.
https://smartasset.com/retirement/is-social-security-income-taxable
Since her household income is more than $44,000, chances are her SS will be taxed at 85%. Not 100% of her SS is taxable.
Therefore your formula would be (401K withdrawal + 85% of SS + other income) < $109450
Of course only the income above $109450 would be taxed at 22%, e.g. if income is $100,000, only $550 (100,000-109450) would be taxed at 22%. So she's free to experiment on how much 401K withdraw she could make to optimize her number for the future years.
taxed at 22%". 你的意思是，如果income $110000 吧？
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) became law on December 20, 2019. The Secure Act made major changes to the RMD rules. If you reached the age of 70½ in 2019 the prior rule applies, and you must take your first RMD by April 1, 2020. If you reach age 70 ½ in 2020 or later you must take your first RMD by April 1 of the year after you reach 72.
For defined contribution plan participants, or Individual Retirement Account (IRA) owners, who die after December 31, 2019, (with a delayed effective date for certain collectively bargained plans), the SECURE Act requires the entire balance of the participant's account be distributed within ten years. There is an exception for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person or a person not more than ten years younger than the employee or IRA account owner. The new 10-year rule applies regardless of whether the participant dies before, on, or after, the required beginning date, now age 72.
Your required minimum distribution is the minimum amount you must withdraw from your account each year. You generally have to start taking withdrawals from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account when you reach age 72 (70 ½ if you reach 70 ½ before January 1, 2020). Roth IRAs do not require withdrawals until after the death of the owner.
You can withdraw more than the minimum required amount. Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).1. Life expectancy Table
The longer you live, the longer you are expected to live. https://www.irs.gov/publications/p590b#en_US_2021_publink100089977
Per this table, the life expectancy of a 30 year old would be 55 years, so he/she expected to live until 85 years old.
However at the same time, a 65 year old's life expectancy would be 22.9, that is, he/she is expected to live until 87 years old. When the RMD starts for IRA at 70 1/2, it is assumed the 70 year old would live for noather 18.8, and when RMD starts for 401K at 72, it is assumed the 72 year old would live until 89.2.
The longer you live, the longer you are expected to live because the "weaker" ones already died off.
2. RMD calculation
https://www.irs.gov/publications/p590b#en_US_2021_publink100090444
It is basically RMD = total account value / (life expectancy - current age).
Remember for 401K the minimal age for RMD is 72, for Traditional IRA it is 70 1/2. ROTH IRA has no RMD.
Your friend probably thought the marginal tax bracket applies to all income.
Marginal tax bracket is useful for plan tax because any "additional income" (e.g. rent income, part time income) are taxed at that rate because other fixed income (salary, SS, 401K withdraw) already filled the bulk of the bracket, the 10%, 12% etc.
https://www.bankrate.com/investing/long-term-capital-gains-tax/
要把長期投資利得收入分出來，因為前八萬（約）是零稅率。其他的才是普通收入