<p>^That is assuming the current law stays as is. That could change and paying a huge tax upfront could be risky if the future is uncertain after kids inherit. </p>
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<p>Good point. This may be where applying effective tax rate makes more sense. If so, it’s less.</p>
<p>I found an RMD calculator. Now I need to know my SS benefit to calculate my retirement income.</p>
<p><a href=“https://web.fidelity.com/mrd/application/MRDCalculator[/url]”>https://web.fidelity.com/mrd/application/MRDCalculator</a></p>
<p>I think that many of us posting here are old enough to remember when the top federal income tax rate was around 70% (pre-1981 reforms.) It was common for my parents’ friends to have serious discussions about whether they should accept a new job or promotion if it would put them in a higher tax bracket. Some retired early when they realized how little of their earnings they were able to keep. They recalled when the top rate was much higher in the 1940s to pay for WW II and didn’t expect it to be significantly reduced.</p>
<p>Dh and I don’t expect tax rates to become that high again, but we have assumed that they’ll increase from current levels. We took advantage of the ability to convert and think we’ll be glad in the long run.</p>
<p>I know my SS benefit now. I wonder my retirement tax rate also depends on my wife’s SS benefit?</p>
<p>“I think that many of us posting here are old enough to remember when the top federal income tax rate was around 70% (pre-1981 reforms.) It was common for my parents’ friends to have serious discussions about whether they should accept a new job or promotion if it would put them in a higher tax bracket. Some retired early when they realized how little of their earnings they were able to keep. They recalled when the top rate was much higher in the 1940s to pay for WW II and didn’t expect it to be significantly reduced”</p>
<p>Your parents must have had some extremely well paid friends. A miniscule number of people actually paid the top tax rates, seeing as just about everything was deductible.</p>
<p>That RMD calculator is useful. My dad is 87, and he says the account value goes up by roughly the amount of the RMD and he is really not depleting his IRA. The RMD percentages really go up after 87.</p>
<p>Yea, H is taking RMDs but because the market has been doing so well (even with conservative index funds), the principal has been increasing and he has NOT been depleting his tax-deferred accounts so far. 
We hope to have them around for a long time. ;)</p>
<p>I copied the RMD table to my excel spreadsheet and divide the 401K amount to the ratio and then see how long takes to deplete it. I have very conservative interest rate, I think it was 2% at one time, not sure if I changed it or not.</p>
<p>We just use the RMD calculator on the brokerage firms, for the traditional and inherited IRAs, which seems to match up with the IRS tables. I believe there is a different RMD for the IRAs from his government deferred comp 401K, based on different life expectancies.</p>
<p>I used the one from the IRS so there is no confusion.</p>
<p>Do you really calculate your own RMD? I have an inherited account from my mom. Because she was taking the RMD, I am required to do so as well. TIAA-CREF figures out the amount and sends it to me annually. It is about the same amount that the account earns in interest per year…just under 5% or so. The principal is exactly the same as it was in 2003 when I inherited it. </p>
<p>I have a second account that I am actually converting to a different account next month. I don’t plan to draw on it yet, but can, if needed. </p>
<p>I have a third account which is my main TSA. I’ll draw on that at age 70.</p>
<p>And I have my pension (I know I’m lucky).</p>
<p>And my $166 SS check…which will actually go towards Medicare when the time comes.</p>
<p>I think for planning but also you need to get RMD for all accounts I believe. Not the inherited IRA.</p>
<p>I know, Dr. Google. But when I reach the age when I have to take a RMD, they will calculate it for me!</p>
<p>Here are the tax rates</p>
<p><a href=“http://web.stanford.edu/class/polisci120a/immigration/Federal%20Tax%20Brackets.pdf”>http://web.stanford.edu/class/polisci120a/immigration/Federal%20Tax%20Brackets.pdf</a></p>
<p>If you earned over $50,OO every dollar above that amount was taxed above 50%
Top earners (those over $180). lost 3/4 of every dollar earned.</p>
<p>thumper, if you have one account then maybe, if you have multiple accounts. I think it’s your responsibility.
I don’t know if there are any IRS form that asking for it when we take RMD. What I want to know is what date of the year to take the value, the end of the year or the beginning or what?</p>
<p>Take a look at the tax rates in 1980 compared to today.<br>
Here is the inflation adjusted tax rate table using 2012 dollars:<br>
<a href=“http://taxfoundation.org/sites/taxfoundation.org/files/docs/fed_individual_rate_history_adjusted.pdf”>http://taxfoundation.org/sites/taxfoundation.org/files/docs/fed_individual_rate_history_adjusted.pdf</a></p>
<p>1980 70% was the top bracket - that’s insane! (Today’s top bracket is 39.6%). Thank goodness Reagan came along and lowered the taxes. I hope they don’t go back up.</p>
<p>^And that’s when the gap between the haves and the havenots began to widen. I’d rather pay forward if that will prevent our society from turing into astrocracy. It’s worth the price imo.</p>
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<p>I don’t know if having multiple accounts makes any difference. You divide the balance in each account with the number on the table to get the RMD. Brokerage firms can do that independent of each other. The distribution has to take place any time before the end of the year except the first year when you turn 70.5. You have until April of the following year.</p>
<p>Today’s 39.6% bracket doesn’t include the 3.8% Medicare surtax on investment income, or increases due to phaseouts of itemized deductions or personal exemptions, and there’s probably other phaseouts as well. So the to rate can be higher.</p>
<p>How much income was excluded or exempted back when the top bracket was 50 or 70%? Without knowing that it is hard to say how bad those rates really were.</p>
<p>I love Ronald Reagan. I was a poor student on financial aid and now I don’t need financial aid for my kids. So the gap is not widen for some people as led to believe. I doubt that I was the exception in my family or among my immigrant friends. I had one good friend from Georgia whose father left her a nice inheritance and mom married a rich lawyer in Pasadena. I’ve lost touch with her so I can’t compare but I wonder if her wealth have exceeded when I last saw her. I think the media likes to exaggerate these rich/poor divide in the news.</p>
<p>Regarding RMD, that works too if you take RMD from all the accounts at the same time but it didn’t seem to be the case in question.</p>
<p>In the old days, interest on personal loans (such as car loans) was tax deductible, as was interest on credit cards.</p>
<p>No limits on the size of a mortgage loan or home equity loans.</p>
<p>All medical expenses and casualty losses were deductible (no 10% floors) and no floor on miscellaneous deductions.</p>
<p>No “kiddie tax” on interest and dividends earned by children, teenagers, and young adults.</p>