Had a question from a subscriber about the taxes he’ll owe on his three sources of retirement income: TSP distributions, Social Security and his USPS pension.
So, I figured it’d be fun to go over this step by step. Weird, no?
Before we get started though Let me ask you my friends, if you are in a 22% tax bracket what would your tax be on a $20,400 TSP Distribution?
Did you take your trusty calculator and times $20,400 by .08 as most people do to get $4488?
Guess what, that’d be WRONG!!!!
That TSP distribution will actually cause you to pay 30% in income taxes, JUST TO THE FEDS and yet you’re still knee deep in the 22% tax bracket.
HOW CAN THIS BE???? Watch the video and I show you the ugliness that is the US Tax Code. ?…(read more)
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The answer is sally will have 3 oranges left…
(My brain is mush now…. I just wanted to know how much money to put In my TSP to be rich in 23 more years)
12:01 12% tax bracket
1:45 "less astute tax preparers would say that you're in the 22% tax bracket"; wrong bc theyre not using marginal tax rates and use the standard deduction.
2:30 "Both these are wrong bc they're not figuring in your marginal tax rate" and he then comes up w/ a $9000 bc that's "at 10%"?
2:50 "Im not going to give you the whole calculation" which is what Im looking for I believe
2:55 And then he brings in a $38,000 from out of no where.. "not too specific but roughly"?? Then why do the video?
-The "38,000" should be 36,730 I believe.. (58628-12898-9000)
3:17 That's wrong bc he subtracts the 9000 from 38000 to get 26318?? What a ridiculous video
3:00 Why take the time to post this video if you know that youre not properly explaining the main calculations? I dont get that. I get not wanting to put out the info but why make the vid? For 15k views? Is that worth it?
4:10 only 85% of ssi is subject to taxation
4:20 we need to figure out our "provisional income"
6:35 his 9000 & .85 figures are coming from the SSI IRS worksheet form for calculating taxable income
6:28 "there's a method to my madness" and the method is to not clearly explain things..
6:00 He's working from form 915 for SS income; thats where hes getting the 25k & the 9000 *.5
7:30 "20593"?? Here he goes again not explaining things. Why go thru the motions like you are
10:30 12000/2?? There's no way that anyone is following this
11:10 "madness" maddening..
I'm Dual Status Technician, so I get a Mil and FERS Pension, along with SS at some later point. Just take all the pension money and treat it as one lump sum/year? TSP, from what you have explained here needs to be just beat down into the dust by the time I apply for the SS annuity.
So how do I ever get my TSP money out?? I don't have a reverse mortgage or a Roth!
I get a pension from p o under old system I’m going to work 15 years consecutive how much will I get from social security any idea
So no matter what, the most you will be taxed on SS is 85% of it?
I get $30,000 Teacher Retirement
$25,000 SS
$5,000 part time work
Wife still works $60,000
LOVE YOUR VIDEOS. Dam your good at this.
I have alot of things that I am going through and I just can't get this clear in my mind. I am single, retired at 62, now I am 65, and I have a small 401k that I don't draw on. My pension is $11,204 and social security is $17,460, I show my provisional income to be $19,934, do I have to have taxes withheld on both? Also here is my stupid question, my pension is considered income, since taxes was already taken out of social security what I get now is considered income as well? My mind is swimming.
I'm over here starting investing at 27 and plan to retire fers and going to continually put in 15% (roth) not including my wife's… so I'm like uhhhh… what if I pull 100k a year with a 6.5 million balance at a 3-5% return on my continued investing balance?
I need some sense of direction. I still work at 70 years old, make about $130,000 a year, started social security at about $3,000 a month and do about $750.00 every two weeks on traditional tsp and $250.00 on Roth TSP. I’m thinking I’m going to get bombarded in taxes or do you think I should just retire cause if it.
Why do I feel like I’m buying a car?
Thanks for the great info!
My trusty calculator says 2000 plus 1700 plus 2019 equals 5719.
I am a postal carrier. Thanks for this video! Question … I am putting all my personal contributions to TSP into Roth, but the match is always in traditional TSP. When I retire in 10 years (at 67), I read that if I start taking out traditional TSP, no matter how little, it triggers a portion of my social security to be taxable. So here's the question: Can I do a roth IRA conversion of trad TSP funds to avoid the SS tax trigger if I keep the annual conversion amounts low? We plan to have the mtg paid off, and plan to avoid taking SS for a year or 2 after I retire. We should have about $175K each in two roth IRAs (wife's and mine). I am in Texas and at age 65 we can stop paying our property taxes (they will be settled when we or estate sells the house; it's Comal County). We will have virtually no expenses other than utilities, and our goal will be to only take out enough funds so we don't trigger any federal taxes on our income. Thanks!
Holy crap! Ok Carry on! Looking for my rubix cube
Does 'nt the social security get reduced because of a teachers pension?
Not impress, to much back and forth loose the slow audience. teach don't preach.
Thank you this is very informative….I'm a postal employee…..thanks!!!!
It's not 58, its 56 but it doesnt really matter for the overall message
I recently applied for my social security benefit. I am 66 yrs old and get 100% of ss benefit which is: $2,684 per month. In addition, I am still working full time for a large organization and my annual income averages around $80,000. I also receive a pension from my previous employer of $2,500 per month gross income. I am not taking any 401K or Roth IRA distributions. I am currently contributing my max deduction amount from my current payroll income or ($25,000) per year into my 401K and Roth IRA. What will be my tax implication? Note: I do not itemize at year's end.
Fica and med is taken out of $ deferred into 457b acct thru county I work at. Will I pay fica and med again when I withdrawal?
what about purchasing a QLAC on some of the traditional part of the TSP and recharacterizing the rest in your own Roth Ira account to avoid higher tax bracket.
How do figure magi if I get lumpsum pension?
Josh excellent video! Very informative and I am sure Postal employees across the USA will benefit from the information shared in this video. Thanks for providing straightforward and easy to understand information.
Have you ever done a video on TIPS? Low returns but seems a like safe alternative for preserving part of your capital and leaving part in higher yield equity funds.
Thank you, getting ready to get my taxes done soon.. 😉
Hey, I really love what you're doing on this channel. I'm somewhat young and don't have the typical career progression, however I really love listening to your non-BS approach on here!
I smell some TSP to Roth conversions coming as we hold off on social security. Say no to RMD's. Good stuff!!
Keep them coming, love your videos!
Excellent video! Alot of useful information here. Glad I have been contributing to Roth TSP for almost 5 years now, 3 to go. Passed this on to 7 co-workers, hope they take time to absorb. Thanks again