[USER]

I have a question regarding preparing myself for taxes once I retire. I think I’m already FI but still working to cash flow some big ticket items before retiring (home remodel, new car, daughter’s wedding). I make about 150K annually.

I’m in a second marriage and we keep our finances predominantly separate. So we file married separately.

My husband has no heirs and I would like to leave most of my assets to my 2 children as he is financially independent (we have a prenup).

He is 61 with a significant pension and will be filing for Social Security next year at 62.

We share expenses in my home. I’m 59 but plan to retire at 62 and start collecting Social Security at 62 (30K approximately) and use the 4% withdrawal rule from my IRA.

I want to minimize the tax that I have to pay during retirement and try to determine if I can retire sooner.

I would also like to become more knowledgeable about how much taxes I’ll have to pay from my SS, my withdrawals from IRA and annuity when I retire.

I would like to be strategic about this and it’ll help me determine when I can stop working.

Would it make sense to pay an accountant for a couple of hours to understand all the tax implications or is there some book I can read that can help me out in this regard? Below is my net worth, no debt.

I would like to have 95K a year in retirement to maintain my current standard of living. I net about 25k in rental income annually:

-2.8 Million in real estate includes primary residence, rental condo and farm land
-550K in Fidelity brokerage
-940K in IRA
-178K inherited fixed annuity

[Elizabeth]

You didn’t mention what your plans are for insurance until Medicare age but I wanted to toss this out for others reading this that might be considering ACA with subsidies.

You cannot get subsidies if filing “Married, filing separate” on your federal tax return.

[Jeremy]

I think it would be absolutely worth it to pay for a few hours with a CPA to develop a plan on how to best structure your withdrawals.

You’ll want to consider things like your RMD timeline, how much longer you have to draw down your inherited IRA, how much you should be taking from your taxable account (and when) vs how much (and when) from your IRA.

I think it would be money well spent to sit down with a CPA.

[Cari]

You probably shouldn’t be filing married filing separately even if you do have separate finances. One does not follow from the other.

So yes, consult a tax professional to minimize your taxes in retirement.

[Alicia]

With that level of income, you’ll pay federal taxes on 85% of your social security.

Whether you pay anything at the state level depends on your state.

[Author]

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