The Retirement Tax Bomb 💣

The calculation the IRS uses to determine how you pay taxes on retirement income creates a danger zone where taxes can be SIGNIFICANTLY amplified. If you fall into this danger zone, you could pay a MUCH higher tax rate on your retirement income. In today's video, I'll talk about how to avoid the pitfall of paying way too much in taxes.
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🎤 If you're preparing for retirement or already enjoying it, you'll definitely want to catch my podcast, Big Picture Retirement. Your retirement's success hinges on seeing the "big picture" and tying together your legal, tax, and financial strategies. On the show, we dive deep to offer insights on effective planning, and I'm joined by my co-hosts - attorney John Ross and yours truly, financial planner Devin Carroll. www.bigpicture...
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Don’t miss my free online workshop, “How to Choose the RIGHT Age to File for Social Security.” In this workshop you’ll learn:
✔The Most Important Factors to Consider BEFORE You File for Benefits
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✔Why This Is The Biggest Decision of Your Retirement
Access the workshop today at this link
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📜 HEAR YE HEAR YE: Some of my videos contain links to third party products, apps, and services. If you click through, I may receive a small referral fee to my media company (Carroll Media Properties) through their referral program. Rest assured, I only recommend products or services that I believe will be helpful and informative to my audience.
⭐⚠️⭐Please read this⭐⚠️⭐
⚠️I am not an attorney, SSDI advocate, or affiliated with the Social Security Administration or any other entity of the US Federal Government. I am a practicing financial planner, but I’m not YOUR financial planner and since I don’t really know you, I can’t give you advice. So please don’t take this video as specific advice for your specific situation. Consult your own tax, legal and financial advisors. 🙇🙇🙇🙇🙇
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[@DevinCarroll]

Want confidence in the tax efficiency of your retirement strategy? Get started on your own retirement plan here www.devincarroll.com/roadmap

[@Chris_at_Home]

Our SS between us is over $40,000 and we draw only about $25,000 from other income sources a year. This keeps our tax liability pretty low because most of the income is SS. We take a standard deduction because the only deductions are property taxes and they are low because of senior exemption. I made a spreadsheet that has all the formulas for that SS income sheet. The sample you ran is pretty close to ours. Before we retired we bought a truck that had low miles at retirement.

[@williambeatty7781]

Social Security should not be taxed at all. It is pure evil to be taxing seniors who are just trying to get by.

[@fraherfarms]

They should raise the Combined Income amounts from $32k and $44k to much higher, say $65k and $80k. It seems to be getting harder and harder for us middle class to get ahead.

[@direwolf6234]

by the time you are retired it's not about 'getting ahead' ..

[@globalfamily8172]

@@direwolf6234 Staying ahead, er staying alive.

[@alansach8437]

Even staying even is hard.

[@trudy6132]

We shouldn’t be taxed at all! It’s double taxation 😡🤬😡🤬🤬

[@July.4.1776]

Sounds like they should have bought the truck using payments with low % interest financing. The savings on the taxes would most likely make the payment.

[@tonyruba3175]

I remember the days when I paid zero FICA taxes starting in late November, just in time for Christmas. Now? I never stop paying FICA with no end in sight. I dare any of the corrupt DC politicians to tell me with a straight face that wages have kept up with inflation, let alone the FICA curve…

[@globalfamily8172]

I noticed that this year, it went up more than inflation. They are money grubbers who can't pay their own bills.

[@HolySchmidt]

This is a great video on how to think about retirement taxes.

[@DevinCarroll]

Thanks Geoff!

[@johnmillersr6816]

This is really crazy. You pay taxes all the years you worked, on top of saving for retirement. Than when you retire, you’re still paying taxes on your retirement income, while the wealthy get away with paying little to no taxes at all. This is not right at all.

[@kf5hcr176]

The wealthy pay lots of taxes. Owning a business allows expending before tax money and tax paid on the remainer-profit. We need to start businesses.

[@dancasey9660]

When I was younger and itemizing deductions, saving into a 401k along with mortgage interest, real estate taxes, and family dependent deduction sure did lower the amount of federal tax we owed. Now the trick becomes how to lower taxes on 401k's and IRA'S going into retirement. Taking a distribution from an 401k/IRA and performing Roth conversions while delaying Social Security as Devin mentions might be a good way to keep the tax bill at a minimum in future years.

[@chi4life61]

Roth ira

[@eptunes3616]

I have done my taxes and I have to payback a large amount. This sucks! Maybe the best to do is get all my funds in cash, pay taxes and bury it.😅.

[@edhcb9359]

@@kf5hcr176 Thank you. I get so sick of the whole “wealthy people pay no taxes” nonsense.

[@RaymondKeen.]

Great video. We are all seeking for financial independence and a better way of life. This is not difficult to achieve with savvy investing, a frugal lifestyle, and cautious budgeting. I'm glad I learned early on to work hard for financial independence. As Warren Buffet said, he has seen this happen many times in his life. Not an investor, My husband and i never earned more than a middle class salary. We plan to get retired at 58 with a stock portfolio worth $1.7M. We have never sold so much as one share of stock.

[@nicolasbenson009]

I totally agree; I am 66 years old, recently retired, with approximately $1.2 million in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, I didn't do all this alone, but with the help of a financial advisor. Having one is currently the best way to trade in the stock market, especially for people nearing retirement.

[@Mathew-zs3nz]

This is exactly how i wish to get my finances coordinated ahead or retirement. Can you recommend the financial advisor you used to get ahead?

[@nicolasbenson009]

Finding financial advisors like Margaret Johnson Arndt who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@alleneverhart4141]

Devin - would it be better for Wayne and Lisa to buy the truck with a vehicle loan? That way they don't have to take all of the 40K in a single tax year. That seems easier than doing all of these complicated roth conversions. 40K/5 years is about 8k per year.

[@DevinCarroll]

You've raised an excellent point. A vehicle loan could spread the financial burden over several years and potentially avoid a large tax hit in a single year. However, this is something that would have to be assessed at the time of purchase, considering current cash flow, interest rates, and debt tolerance.In many cases, my clients will simply not accept the idea of getting a loan even when the numbers work on paper. For many, once they are free and can say, "I owe no one" they don't want to go back. This is why I say that financial planning is 50% data and 50% how you feel about that data.

[@gjones5153]

there should be a way to put the cash for a car into a escrow account that say 1/5 of the value of the car can be taken out each year without interest being paid and any interest that is made on the money in the account would go to the car company. That way you lower your taxes without taking out a loan.@@DevinCarroll

[@arnoldjohnson3317]

Increases in retirement income not only affects income taxes, but many other tax payments. My real estate taxes can be frozen at 65 so long as my income is less than $61k, Medicare premiums are based on income as well. My first letter from Medicare said my premium would be over $500 a month based on my income from 2 years ago. Yes I did form 44 but it says they’re going to verify with IRS. The tax bomb does a lot of collateral damage of the innocent especially if you are a widower.

[@garydemille6103]

Yes one of the big timebomb is when a married couple has one pass away and all of their retirement accounts are in traditional IRA's/401k and the age is approaching or already has met for required minimum disbursements. What might have been a very doable rmd for a married couple can be very costly when filing taxes as a single filer. Another benefit of doing Roth conversions. My accounts are now 85% Roth and 15% Traditional and rmd's begin in 2 years.

[@Zuckerpuppekopf]

So basically, aside from the Roth option, the best policy for making larger purchases during retirement is NOT to simply withdraw big ticket amounts, but to plan ahead and SAVE up for them using surplus retirement distributions on a yearly basis. So if the featured couple's retirement AGI 70K something, then save as much as possible living frugally for a few years to save up for the truck.

[@globalfamily8172]

Why does the government want you to liquidate your savings / 401k into poverty?

[@DevinCarroll]

The best strategy is to retire with savings in more than one bucket. Although they are often overlooked, there is a lot of value in taxable accounts (joint, trust, etc.).

[@alphamale2363]

Having a big chunk of after tax money built up opens all kinds of savings opportunities. Wish I had thought about this more when I was younger.

[@DevinCarroll]

Amen to this! An after-tax account gives you massive flexibility.

[@davidpowell3347]

Meaning Roth or taxable account? Roth didn't become available to me until many of my working years were over. Certainly agree that Roth is usually better than the other. Especially if you don't make a lot of annual/hourly income rate and the associated high tax brackets. "Roth conversions" after the fact I think might not be as good as if the original contributions had been Roth.

[@alphamale2363]

​@@davidpowell3347 As long as it does not count as AGI it's good from a tax planning perspective.

[@davidpowell3347]

Also is it possible that qualified dividend income and capital gains(long term) distribution "income" might actually cost you less if going into a taxable account as compared to going into a tax deferred (meaning Tax Bomb) account? @@DevinCarroll

[@pauly1959]

The taxation of Social Security began in 1984 following passage of a set of Amendments in 1983, which were signed into law by President Reagan in April 1983. These amendments passed the Congress in 1983 on an overwhelmingly bi-partisan vote.

[@mrsmith1339]

Our income consists of 2X Soc Sec, 2 small pensions, and a small VA disability payment, plus RMD's and Qualified dividends. Dividends are more than 1/2 of our income and taxes at 0%. I hope that never ends.

[@BillGreenAZ]

Social Security benefits should never be taxed. The fund was being fed by after tax dollars and taxing benefits adds another tax. This is why the entire Social Security system is bad. This doesn't even address how much benefits are lowered compared to if a person were to save and invest using that money instead.

[@Satjr35031]

It’s not so much that the SS is taxed it’s your provisional income that is the main driver

[@georgesigala2613]

I just retired last month. I’m 57 now. Living on my union pension for now. I have a 401k, but I cannot touch it until I’m 59 1/2. As far as social security, I won’t touch that until I’m 65. I could just imagine all the taxes 😮that are going to be involved when that time comes 😮.

[@freddieh5539]

Another option....draw down the 401k starting age 65 and delay taking SS til age 70. That way, you collect a higher SS monthly benefit, and the 401k balance is lower when you have to start RMDs. I wish I'd done that when I retired 7 years ago.

[@jeffb.2469]

Does the Rule of 55 apply to you in order to withdraw from your 401K plan early?

[@jimm1738]

At 59 1/2, convert some funds in the traditional 401K to a roth IRA each year, and fill up the 12% (soon to be15%) tax bracket. Each conversion will have its own 5 year clock for the tax free earnings in each roth IRA. Do this before turning on your social security. You may not get it all converted, but some is better than none.

[@Thisishard2333]

Just retired. Biggest problems are getting all your savings in one place.Oh someone will contact you.(Never). You can download the forms and fax them in.(emailing to find out if they received them). No one responds.

[@MountainMan.]

I clearly need a financial advisor but am always afraid I can't afford one.

[@skslone9450]

This is why you do gradual amounts each year and do Roth conversions to plan for future withdrawals

[@g.t.richardson6311]

I’ve done that as much as I could last 2 years but that’s all I had as now pension kicked

[@johngill2853]

​@@g.t.richardson6311 if you knew you had a pension why did you contribute so much to traditional??

[@toreckman8899]

Same. But I’ve been doing this for 9 years and will continue for 3 more and I’m barely going to make it, plus or minus a few hundred in taxes. That said I kept my marginal tax rate @ 12. Effective even lower with kids in college. I wouldn’t recommend it but having “zero” income for the past decade has had its advantages 🙂😉

[@skslone9450]

@@johngill2853 because my employer didn’t provide any other option and my income wouldn’t allow that much to be put into a Roth while working

[@johngill2853]

@@skslone9450 you could have chosen taxable if you are going to pay more taxes in retirement because of pension.

[@tomr9074]

I was looking at converting $50,00 from my traditional plan to a roth IRA. Because of a small pension and a small part time job, it was going to cost me $22,000 in taxes.

[@gjones5153]

I make way to much money with dividends in a taxable account so I guess Im screwed as I will pay tax on 85percent of my SS so I probably won't take SS until I'm 70 as I don't need it anyways. Its just ashamed that I have saved all my life and now will be taxed while others have spent everything and now can not pay any taxes. SS will do nothing for me unless I give all my money away.

[@donorajohnson8549]

Thank you, you explained someth8ng I was confused about. Working one more year messed me up, at least I know for sure what my retirement date will be.

[@vince8436]

Another thing could be to sell winning stocks in a non retirement account and take advantage of the long term gain rate discount. You could sell then rebuy. Now you have less capital gains to report under social security than if you did not do this. Of course it is better to do this if you can pay the taxes from other sources so you can instantly rebuy. Should you have some long term capitol loss carry over just use that to your advantage.

[@mcarlo52]

Great information and presented in an easy to understand way, thanks. Won't help me much though since I'll be 71 this year and once RMDs start my SS will be taxed at 85%. A little too late to do much about that now.

[@g.t.richardson6311]

True and for some people there is no way to avoid no matter what you do That’s me and my wife

[@DevinCarroll]

Thanks for watching!

[@Detached_AZ]

I hope you know that you don't have to start RMDs until you reach 72

[@mcarlo52]

@@Detached_AZ It’s 73 for me. I’m currently living on just Social Security.

[@toreckman8899]

@@Detached_AZ it changed again. Keep up. In fact it’s 75 for people born after 1960

[@alfredoalequin]

How did you arrive to the taxable social security amount of 12,715 in 6:08?

[@DevinCarroll]

100% software output. I'd have to go back to the example case to examine the numbers more closely.

[@alfredoalequin]

@@DevinCarroll Thank you! After asking the question, I watched another video where it is explained.

[@rjones2000r]

I'm collecting SSA now and I decided to do Roth conversions over several years. There's no way for me to avoid the tax hit and medicare increases being single. I'm doing it for my heirs who make over 6 figures. With the new 10 year inherited IRA rule over half of the money would get taxed because we live in a high tax state as well..

[@Diego-fb5fq]

That be one expensive truck! Good explanation.

[@kimberlyjweinert2422]

Thank you I love your videos!!

[@DevinCarroll]

Thanks!

[@rodneylw10]

I am a teacher and am still working one more year. We have no options at work. I am 62 in March and will have a pension and Soc Sec. that put me in the pay 85% range.

[@DevinCarroll]

Pensions are wonderful, but they don't leave you with a lot of income structuring flexibility.

[@bikeny]

Two rules to follow: 6P's: Prior Planning Prevents *iss-Poor Performance. And: No Plan Survives First Contact.

[@tomm.8892]

Interesting, but Require Tax $ / AGI $ is still under 10%. This comes down to if you think SS should be taxed (ever), or not. While I don't love paying taxes, I don't find paying less than 10 cent on the dollar overwhelming! I understand some do!

[@kennykuhns9843]

So the government taxes my income for social security my entire working life then taxes me again when I get my money back from them..... And people demand that this program continues. Please tell me if I'm wrong.

[@damiangrouse4564]

One thing I didn’t hear as an option…get a loan for that truck.

[@francisebbecke2727]

I think we have Ronald Reagan to thank for the taxation of Social Security benefits. Wasn't he the guy who ran on getting the federal gov. out of ordinary people's lives? My uncle turned 21 in 1916 and voted for Woodrow Wilson because his campaign promise was "He kept us out of war." The ink wasn't dry on Wilson's second inauguration address when he went to congress on April 6th, 1917 and asked for a declaration of war on Germany. My uncle celebrated the end of World War I on Nov. 11th, 1918 while in a trench in France. I voted for Jimmy Carter in 1976 because he said the federal income tax was a "disgrace to the human race." I had just taken a tax class at college. Carter made it worse. My uncle had a sh_t eating grin on his face when I told him about this. You can really trust these people.

[@SandfordSmythe]

Reagan signed a bi-partisan bill

[@Zuckerpuppekopf]

Would there be an advantage for a retired couple to simply cohabit, unmarried, if they are both drawing SS and retirement distributions separately? Would there be any greater ability to balance those withdrawals using the individual levers of single recipient limits?

[@Chris_at_Home]

It depends how balanced the SS payments between the couple. If one person makes close to max and the other about 25% of that it doesn’t work out to be single.

[@gjones5153]

most of the time even if both spouses worked and there contribution was high and low the person that was the low contributor would still get 1/2 of the SS as the high earner@@Chris_at_Home

[@kennykuhns9843]

Thanks for the advice .

[@gregbellamy4144]

Excellent information, great video's!

[@DevinCarroll]

Glad it was helpful!

[@patd2765]

In your Podcast you mentioned a tax software where you could put in "what if" numbers for future income distribution. Could you remind me of what that software is?

[@DevinCarroll]

In the past I have mentioned the Tax Act tool www.taxact.com/tools/tax-calculator

[@stevemlejnek7073]

It sure would be nice if those combined income limits would increase off the levels they were assigned so many years ago! COLA would be fantastic.

[@paulc1352]

Because of my pension I get taxed on 85% of my social security. CPA told me there is nothing I can do....Just pay Uncle Sam....

[@DevinCarroll]

Pensions certainly reduce flexibility. But I'd rather have one than not.

[@gjones5153]

can you start a company and lose money on paper to lower your retirement income! ask your CPA

[@GrandpasPlace]

I was reading the SSI website and thought they said that the definition of "Income" was wages paid on a W2. It did not even mention anything about distributions. That is kind of beside the point, My real question is a bit different. Lets say I can pull 300k a year from investments not in a retirement account. Can I donate 100% of the roth distribution AND 100% of the SSI distribution to a charity and use those donations as a write off on my taxes?

[@yazminmojica4458]

Excellent explanation 👍💯❤️

[@johnhutnick1232]

Understand those are the current laws for Roth accounts. Politicians can change the laws whenever they want.

[@garydemille6103]

I hear this frequently, specifically about the tax-free earnings that might get changed to being taxed. Yes there have been some significant changes in recent years, some good and some very limiting. So far every change has been changes going forward, meaning I have not seen any Roth rules that went back retroactively. Some of the changes are implemented within hours or just days after a bill is signed into law by the president. Thus it is crucial to stay informed and act efficiently. The issue of the back-door conversions have been heavily discussed as an example of possible change possibly coming down the pike. For us, I probably over-saved for retirement and have not found a good reason to not open and for the time being, fund Roth IRA's for our adult children just recently for a part-time employed grandson, too. I can't say at this time how many years I can manage to do this, but I also try to keep up on the tax laws. By having their own Roth accounts, I believe it effectively deals with the 10-year timetable for most inherited IRA's. Doing away with the Roth 401k rmd's was a good change in my opinion.

[@DevinCarroll]

I plan to do a video on this soon. For now, I have an article titled "Will Roth IRAs Become Taxable?" www.carrolladvisory.com/will-roth-iras-eventually-become-taxable/

[@chieftd9340]

So, it’s safe to assume if I have a military retirement in excess of $45K annually there is no getting around having 85% of my social security taxed? Thanks for the videos and good information. Cheers

[@sarahann530]

You had the benefit of living your life paid by the US taxpayer . Why should you not pay your share into the system that benefitted you .

[@chieftd9340]

@@sarahann530 hey thanks for the wise a$$ comment as I was serving to protect your right to be rude. I have paid taxes for over 50 years and have no qualms about paying whatever taxes are due in retirement, just wanted clarification about the level of taxes to expect.

[@sarahann530]

@chief td You paid income taxes like everybody else . What did you save me from exactly . Despite costing billions the US military has not won a war since it was on the winning side in Ww2 . Piss poor results considering the equipment you were given .

[@chieftd9340]

@@sarahann530 you are right, just like you want to be. It’s your world. Have a nice day.

[@sarahann530]

@chief td It's everybody's World ,I have no more right to it than anybody else. Sit back draw your retirement and pay your dues the younger generation of tax funded military rely on our taxes to pay them a living . They are "heros " saving us from the bogeyman now that you are too old .

[@DanielRMcCune]

The timing of this video could not be better for me. The numbers almost match what I'm doing this year. Now I know what my tax liability is going to be. But, I was wondering what tool you used to estimate the tax change 8:05 . But, instead of buying a a vehicle I'm converting regular IRA funds to Roth IRAs in the amount of $50k each year until I get to RMDs. And as long as the Trump tax rates hold up. Have you done a video on Roth IRA conversion? I'll search your channel but if you need a topic I would be interested in what you have to say.

[@DevinCarroll]

I haven't covered Roth conversions as deeply as I plan to, but this video gets into some details "3 Reasons to Convert to a Roth IRA" kzbin.info/www/bejne/m3fOlXmqh5WDqrssi=gGdc-LQoEWSKuTHf

[@toreckman8899]

Thanks for validating my plan Devin.

[@DevinCarroll]

Thanks for watching!

[@July.4.1776]

Nice job Devin!

[@DevinCarroll]

Thanks for watching!

[@lp4418]

If you have a robust RMD it's all over but the shouting. The system is rigged against you.

[@freedomwillring6749]

Yes, it's rigged against the working class taxpayers, not against the burdens to society.

[@direwolf6234]

if you have a $20,000 pension + $15000 (50% of $30k SSA) = $35k .. you are over the limit >> pay on 85%

[@July.4.1776]

Some fool ahead of this advertising gold.🤣

[@freedomwillring6749]

I just hope that Social Security will still be around when I retire, so I can worry about this.

[@bernardposluszny5587]

It better be I have been putting into ss all my life 65 now . I guess that's why they want to disarm senior citizens haha

[@WyomingGuy876]

Take an equity loan out on your house to pay for the truck.

[@puravida5683]

Question? I am currently drawing from my government TSP, in a monthly distribution. In one year, I'll apply for social security to net the delayed credits. To reduce my taxable income for social security purposes, when should I cancel my TSP distributions? Does social security look at your, 1 year, 2 year etc, tax returns to calculate SSN tax?

[@jimm1738]

The 1 year 2 year is for your Medicare Part B premiums. For 2023 for a single person, the premiums go up after a modified adjusted gross income above $97,000. For married joint, it is above $194,000. The SSN tax is for that current year only. I assume you are retired, over 59 1/2, and you will be 70 in 1 year . Be sure to withdraw or (convert to roth IRA) funds from TSP traditional, before you start your social security, in order to fill up the IRS 12% tax bracket for that year. With a pension and social security, your traditional IRA/TSP withdrawals will probably be taxed at 12% + 12%X0.85 ss tax = 22.2% once social security kicks in. The monthly amount you receive from SS after age 70 will not increase, except for COLAs.

[@Fantazier1]

So how much do you guys know about Railroad Retirement (RRB)?

[@direwolf6234]

and don't forget than if your income is above $98k you pay more for medicare ...

[@jeffb.2469]

So, I have a clarifying question to make things simple. If I want to stay inside the 50% taxable rate of my Social Security, married filing jointly, can I just use the max $44,000 rule, and then add $27,700 (2023 Standard Deduction)? This would allow me to basically earn/withdraw/receive around a total of $71,700 per year and pay no more than 50% tax on my SS, correct?

[@Satjr35031]

No not correct Take what you receive in SS Then take half of that and take that half and add that to any provisional income you have IRA pension 401K Then you use the SS formula

[@globalfamily8172]

The contribution is progressive on the front end and progressive on the back end.

[@sandyl332]

It's all such a "rip off!"😮

[@Wild1BillS]

The whole system of having to pay taxes on my SS is Bull. As it stands now the government will send me the check I will end up just giving it All back to them to cover the taxes on my retirement income

[@anniesshenanigans3815]

be thankful you don't have to rely on SS as you ONLY income... but otherwise pressure your politician of choice.. they are the ones setting all this up.

[@g00glechr0me8]

Ronald Reagan signed the SS tax into law. He loved more big government involvement.

[@jimk59]

If you do a little research, it’s not as simple as that.

[@toreckman8899]

@@g00glechr0me8idiot

[@toreckman8899]

@@anniesshenanigans3815that sounds like your problem.

[@suespony]

I am over 50, I put 7 k of after-tax money into a traditional IRA. Not employer funded, my own money. Am I correct that I will only have to pay tax on the dividend portion of this when I withdraw?

[@wernerdaghofer4056]

Why would you put after tax money into a traditional IRA??? You should put it int a Roth IRA so you don't pay any tax on withdrawals.

[@jeffb.2469]

@@wernerdaghofer4056 Maybe he means Roth IRA.

[@DevinCarroll]

If this is a contribution into a traditional IRA, which you deduct, the distribution would be fully taxable.

[@suespony]

@@DevinCarroll yes, I did it for the tax deduction, but realistically wasn't worth doing, get the tax deduction now, then pay it back later I guess

[@lamarcarter6699]

It won’t matter anyway when the cbd comes in

[@howardfriedman7077]

CBDC will not change anything, except income that you illegally hide from the government, which you will not be forced to pay taxes on.

[@GottaSayIt]

In the sample family, you calculated taxable social security at about 23%. I thought 50% SSI was taxable?

[@DevinCarroll]

The tax is progressive in that it slowly pulls your SS income through until eventually 85% is taxable.

[@myscorebig]

All accounts are roth. Lets gooooo

[@steves3234]

This seems to me to pysh the idea of Roth conversion

[@direwolf6234]

the explanation at 5:45 about the $12715 of 'taxable' ssa is not very clear .. please clarify ...

[@DevinCarroll]

That is the amount of their SS benefits that would be taxable.

[@falcorthewonderdog2758]

I'm retired. Just filed my taxes. Didn't pay a dime. It's not at all like this video explains. You just need to know the facts.

[@DevinCarroll]

While that may not have been your experience, I can assure you that many retirees are paying more in taxes than they expected.

[@steverunswithscissors]

Instead of taking the 40k for a truck all in one year they could possibly split it. Taking 20k in December and the balance in January..

[@ButcherBird-FW190D]

Yes.

[@johnc2438]

Good tactics!

[@ButcherBird-FW190D]

@@johnc2438 Right. You always want to do a "pro forma" tax return for the upcoming year. With knowing your marginal federal and state brackets. Then, make you decisions based on that; along with common sense and regular financial acumen.

[@clydewray1260]

Will Social Security withhold federal tax from your monthly benefit if you want? I'll file for social security in 2025.

[@LittleBurchie]

Yes. Complete IRS Form W-4V and hand it to the customer service representative at the Social Security office when you apply for benefits. But you may want (or need) to make adjustments to the federal withholding in your 2nd year of retirement after you see how the withholding affected your first year tax return. If so, complete another W-4V and turn it in to your Social Security office. (That's what happened to me.)

[@simul8guy75]

What do you mean the "bottom" of the 3rd category? If you're in the 3rd category then your other retirement income is enough that a minimum of 85% of your SS income will be taxed. That's the real "tax torpedo"...

[@Dumbluck14]

And NO update for inflation in 52 years.

[@mfgparts]

Has anyone else had a problem accessing the Social Security Cheat Sheet?

[@canislupus5]

Does interest income during retirement count towards the total income that increases the % of SS that is taxable? Or is it only distribution from an IRA, true wages/earnings, etc.

[@davidpowell3347]

Yes,interest income adds to your taxable income and also liability for IRMAA penalties even though the interest income probably only partially compensated for the loss of the purchasing power of the bank deposits (Credit Union!) due to inflation also might tend to phase out the portion of your Qualified Dividend and/or "Capital Gain Distributions" that were subject to a 0% tax bracket

[@canislupus5]

​@davidpowell3347 Actually, it doesn't. Wages from job or profit of self employed are what matters (including bonuses, commissions, vacation pay). Interest, pensions, annuities, investment income, or govt benefits don't count against you in the early retirement social security benefit penalty calculations. I got this from the SSA website.

[@davidpowell3347]

Social Security: 85% taxed>elimination of the 0% bracket for qualified dividend plus cap gains distribution and also IRMAA penalty.

[@arymniak1]

This is a moving target, assume you will pay tax on 85% of you SSI. Then just work to improve on it using numerous strategies. The communists tax system sux

[@howardfriedman7077]

Not SSI.

[@Satjr35031]

It’s not so much as the tax on SS It’s the provisional income you have that gets added to the equation

[@globalfamily8172]

73k is not a lot of money for a family these days.

[@jerrywiniarski1176]

Thanks!

[@DevinCarroll]

Wow!!! Thanks so much!

[@CalmerThanYouAre1]

How are qualified dividends from a taxable brokerage account treated in conjunction with SS if you’re in the 22% tax bracket? Let’s say $50K of SS and $100K of QDI for tax year 2023, MFJ.

[@Detached_AZ]

Fividends get added to come to your AGI

[@CalmerThanYouAre1]

@@Detached_AZ yeah it appears they bump up the amount of your SS that’s taxable, even though the dividends are still tax free. Good reason to take SS early and let your dividends grow as much as possible.

[@Detached_AZ]

@@CalmerThanYouAre1 DIV sre not tax free...ONLY Qualified Div are....Regular DIV get added to your income.

[@CalmerThanYouAre1]

@@Detached_AZ yes I know. I’m referring to qualified dividends of course. LTCG work the same way.

[@randallmadison9910]

Really like your Variabl Annuity video. Now, the Retirement Tax Bomb??? Your money grew and compounded for 25 years without any tax burden. Now the IRS is bombing your nest egg?! Stop it. This country is insane.

[@lamarcarter6699]

Man that’s crazy

[@jackiebutler2788]

What if ss and a distribution from an annuity from inheritance?

[@DevinCarroll]

Depends on the type of annuity

[@jdgolf499]

I caught something that I didn't understand. Why can a roth conversion impact medicare if you are 63, if medicare doesn't start until 65? I have never heard about that one!!!!

[@DevinCarroll]

It’s because they use your income from two years prior to determine your current year Part B and D premium.

[@terryfeathers4060]

@@DevinCarroll That is combined income for husband and wife or just the one applying for medicare?

[@jdgolf499]

​@@DevinCarroll OK. Thank you!

[@jimk59]

AGI threshold is 194k for joint filing. Then Medicare goes up. So both spouses income.

[@randolphh8005]

Your examples look correct, but the effective tax rate on your example is still less than 9%! So doing Roth Conversions at 22% may not get you anywhere. 100% agree on doing conversions in the 12 or 15% brackets. Obviously doing conversions before starting SS makes more sense than after. Also highly recommend people NOT contribute to pre-tax accounts when they are in the teen brackets, and instead CONTRIBUTE to Roth, and put the rest in Brokerage account.(Only exception would be to go for max employer match). Also if using ACA insurance, watch out! We received $16,000 in tax credits last year. That would have been wiped out with a significant conversion.

[@keithfaccone8124]

I think everybody’s being kind of greedy you should be happy to pay the taxes. How do you think we are going to pay for Ukraine and all the foreign aid?

[@carrottop7802]

Greedy? How is the word "greed" and "money earned" appropriate in the same sentence? Nobody should be paying taxes on SS benefits. Nobody!

[@gjones5153]

how bout you pay triple your taxes so I can pay none

[@timothysiler5722]

I'm screwed!

[@kdix55]

If I don’t work at all, and only collect SS, will I not owe any taxes?

[@55points]

No. This is about collecting from 401K or IRA

[@55points]

No Kathy this is about what you are getting from a 401K or Individual retirement account. I work part time and earn about $12000.00 a year over my SSI and do not pay any taxes on SSI. Not only that but I get an extra $450.00 a year for working, I live in Michigan your state may be different. IF you only collect social security I do not believe you even have to file a tax return. My older siblings that retired do not even have to file any state or federal tax forms.

[@kdix55]

@@55points thank you!!

[@55points]

@@kdix55 You can call your local SS office to make sure anytime. I do not know how other states do this but Michigan does not tax Social Security. income. God Bless you. hope you have a happy retirement. By the way my employer does not tax my income as i am over 65 so they only take out a small amount for medicare from my earnings. But you do have to file state and federal taxes for earned income if you work and are on SSI but its more than worth it.

[@Spork123able]

Social security should not be taxed, what a joke!

[@rgarri6396]

I think this video is for homeless people! What about us who gets pensions, SS, interest, with incomes of 100k plus?

[@jeffb.2469]

Guess I'm one of the homeless.

[@gjones5153]

yes we are screwed probably be in a super high tax bracket and the more the government prints the less our money is worth. The government won't be happy until you own nothing

[@ephraimgarrett4727]

You didn't really think that the Government was going to let you keep all of that tax-deferred money, did you? 😄😄😄

[@sstt9732]

You meant Dec 2023, not 2024

[@lamarcarter6699]

Seems like they would just take the hit with taxes and pull that money out and buy gold

[@everettcalhoun8197]

Good plan. Gold is worth less than it was 12 years ago.

[@sobhitakhatun1059]

Sir ❤🙏

[@marygarcia1145]

That is fucking highway robbery

[@Nnguyendavid]

I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly.Thanks Patricia Annie Brooks

[@Anne-qj6xo]

I have no clue how you come up with your numbers

[@wernerdaghofer4056]

Just get some tax software (Turbotax or HR Block), create a "planning" tax return and enter the numbers. The program will calculate the taxes.

[@Anne-qj6xo]

@@wernerdaghofer4056 Thanks. I did find one at AARP website. Crunched some numbers. Very helpful. Now I understand.

[@garrysinger9704]

We have Sir Ronald Reagan to thank for imposing taxes on Social Security. Also, the brackets haven’t been adjusted for inflation either.

[@toreckman8899]

Does your sphincter itch or tickle when you articulate thought into speech?

[@jdeang3531]

I believe there were 535 other people, mostly democrats including your dear leader Biden in on that

[@toreckman8899]

There’s a reply that I can’t see. I hope it yours. Leave it to a democrat to whine about something that happened 40 years ago. So rather than doing something productive about it, you’d prefer to still whine about it. 😘

[@Satjr35031]

@@toreckman8899 Leave it to a Republican to whine about Biden creating tax on SS

[@ephraimgarrett4727]

Should SS have been saved or let go insolvent? It's going to need to be saved again before 2035.

[@hilarymcvay9505]

Devin, the real world now is not always the husband having a higher benefit than the wife. It seems all videos on this subject always put the husband as the higher wage earner. And now we have same sex marriages. It is what it is, so maybe be more generalized by saying a married couple, spouse 1 spouse 2; etc. Take names out. Your videos are very educational and this would make you one step ahead of other like videos. Thank you so much for all your help!

[@DevinCarroll]

Hi Hilary...thanks so much for watching! I agree that the benefit amount and savings aren't always specific to gender.

[@jeffb.2469]

@@DevinCarroll It's the world we live in today. You have to watch what you say, or someone will be offended. We all know you meant no disrespect with regards to names and gender. It was just a general example.

[@wharrison7131]

Not to worry. China Joe’s effect on the market has reduced the RMD since our balance has fallen 30%. Let’s go Brandon!

[@davidgeorge2666]

so you need be in poverty income level to not pay any taxes - instead of listening to all this BS, set up a cash business for life

[@MH-gg9fz]

All of your examples are for poverty tax bills. Basically, anyone with a decent income is going to pay taxes. You spend so much time on talking about how to avoid paying taxes when you’re retired. Only the destitute can get anything out of your videos.

[@DevinCarroll]

And then some say I only talk about examples of rich people...

[@user-oj4gh7sp5q]

Stop this nonsense. Taxes aren’t any higher in retirement than they are during your working life. Income is income. You make less, you pay less. Make more , you pay more. And for you woefully misinformed that say the rich don’t pay their fair share: my wife and I payed the maximum SS and Medicare taxes for decades. But, what is our benefit? Thousands less than two single people with the same income. All the low income folks are getting way more than they ever paid for. My wife and I are getting royally screwed. So, stop your complaining. You don’t know what you’re talking about.

[@DevinCarroll]

To a point, I agree with you. The tax rates certainly are no different based on age. However, when you are working just about everything coming in is taxed as ordinary income. Once you retire, the income comes in from a variety of sources which could each carry different tax consequences.

[@timothythompson4036]

This guy is doing this all wrong. If you had cash value life insurance you can take a 40k loan for the truck and not pay any taxes. This guy dies not have a good grasp of this.

[@everettcalhoun8197]

You do not have a good grasp of the term "if". Just sayin'.

[@DevinCarroll]

At least that's what the life insurance hypothetical illustration says... 😬

[@everettcalhoun8197]

@@DevinCarroll Hindsight is 20/20 my friend.