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You should subtract capital gains. Unless you know of a way to put $84k/year into a roth account.
by isthis129283 5y ago
You should subtract capital gains.
Unless you know of a way to put $84k/year into a roth account.
- flowerlad 5y agoIf you invest in S&P 500 index fund you don't need to sell until after retirement.
- isthis129283 5y agoI agree. But a material chunk of the $14M belongs to the government (not available for the individual to spend). If someone takes out a $2M loan at the age of 58, and retires at 59 (before any of it is paid back), do you think that should be money considered in a retirement calculation?
- flowerlad 5y agoAny growth in the "government's portion" is yours until you sell. Also, if you sell after retirement the tax rate is going to be low if you don't have much non-investment income.
- isthis129283 5y agoI agree it's yours until you sell. We are just debating semantics (does retiring with $14M mean retiring with $14M you can spend, or $14M minus taxes that you can spend). Also, Capital gains is treated differently than ordinary income. Your income tax bracket is irrelevant in determining your capital gains rate (at least for now).
- neogodless 5y agohttps://www.nerdwallet.com/article/taxes/capital-gains-tax-rates https://www.nerdwallet.com/article/taxes/capital-gains-tax-r... Income tax bracket doesn't directly correspond with capital gains brackets, but total income affects the capital gains tax rate.
- ryandrake 5y agoDisclaimer: I am not a CPA or tax attorney. As of 2021, a very high income married one-earner household can potentially put away $19.5k/yr pre-tax into a traditional 401(k), $38.5k/yr into a after-tax Roth 401(k) which can be optionally converted to a Roth IRA, plus $6k/yr for both the worker and the spouse into Roth IRAs, plus $7,200/yr into a family HSA (if it's available thru your employer). That's $19.5k + 38.5k + 6k + 6k + 7.2k = 77.2k tax advantaged. $57.7k of that is not subject to income tax or capital gains upon distribution, as long as you are following the rules. Not too bad.
- burntsushi 5y agoIf your retirement income comes entirely from long term capital gains, then the first $80K you sell per year is tax free.
- trashface 5y ago80K is for married, for single filers its 40K.