The giant tax loophole for seniors continues. For 2024, we had an income of $84,000. $58k of Social Security and $26k of IRA withdrawal.
The federal tax on the $84,000 was $121. That's right, 0.1% tax rate.
We did feel the effects of inflation just a bit this year. We did contemplate pulling more money out for 2025, but haven't done it. We make the IRA withdrawal once at the beginning of the year and use it up over the next 12 months. So far, the SS increases each year have kept up nicely with inflation for our needs.
Just to give you an idea of our situation, we have no debt, the wife continues to tuck money away into different accounts for emergencies each month from the SS payments, which really makes no sense, but it makes her happy and I don't have to bother with the finances or bill paying. So we are actually living on less than the $84k in a relatively expensive place to live (Sonoma County).
Meanwhile, our IRA savings continue to grow at a crazy fast rate as the amount of money keeps ballooning. It was somewhat anticipated, but the rate at which the kitty is growing is remarkable and comforting. And that is with only about 50% of the money in the market. Even if we both became nursing home patients, I can't see running out of money.
I won't be taking RMDs for another 2 years. But I've done a simulated return for RMDs and it's really not an issue.
The federal tax on the $84,000 was $121. That's right, 0.1% tax rate.
We did feel the effects of inflation just a bit this year. We did contemplate pulling more money out for 2025, but haven't done it. We make the IRA withdrawal once at the beginning of the year and use it up over the next 12 months. So far, the SS increases each year have kept up nicely with inflation for our needs.
Just to give you an idea of our situation, we have no debt, the wife continues to tuck money away into different accounts for emergencies each month from the SS payments, which really makes no sense, but it makes her happy and I don't have to bother with the finances or bill paying. So we are actually living on less than the $84k in a relatively expensive place to live (Sonoma County).
Meanwhile, our IRA savings continue to grow at a crazy fast rate as the amount of money keeps ballooning. It was somewhat anticipated, but the rate at which the kitty is growing is remarkable and comforting. And that is with only about 50% of the money in the market. Even if we both became nursing home patients, I can't see running out of money.
I won't be taking RMDs for another 2 years. But I've done a simulated return for RMDs and it's really not an issue.
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glad to hear you're cruising and can afford to keep your squirrel feeding habbit!
