Personal Finance (Not Investing) • Tax planning for 2025

When you retire and stop earning income will you be in the 0% to 12% tax bracket like a lot of retirees?

I have not done the computation since if is an unknown to me at this time. Retiring at 65 is the earliest for me, as I like my job. Being a college professor, I do not plan to work in the summer starting next year. So this will help me ease into retirement. Most of my colleagues retired after 70. (I am afraid I would be bored to tears after retirement. So I will see how next few summers go.)

What is that $11,000 of interest doing there? I would do something to get that to zero such as taking the entire principal and buying VTI.

Since I have access to 403b and 457b, my plan is to contribute both in the Roth option to the max at $62,000 total. After taxes and deductions, my take home pay will be very small but hopefully not negative, especially when the one-time $32k pay goes away. The pot of money generating the interest is for me to live on in the next few years.

With $23K+ of dividends I will guess you have at least 7-figures in your taxable account, so that's a plenty big emergency fund for it to all be invested tax-efficiently. Any tax-loss harvesting happening in your taxable portfolio?

Anywyays, I would do all traditional and use the future to do Roth conversions when in a much lower tax bracket.

Thanks for the insights. In any case, is my computation correct? When I play with various software under different retirement timelines, it seems that filling up the 22%/24% bracket is a good strategy. I also think that tax rate will go up in the future but may be not the next 4 years.

Thank you.

Statistics: Posted by student — Sun Jan 05, 2025 4:09 pm — Replies 2 — Views 276

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