The chart above shows the differences in Robert’s and James' withdrawal strategies and their effective tax rates.
Robert will have to withdraw $79,000 from his traditional accounts to meet his $70,000 spending need and the $9,000 he’ll owe for taxes on the withdrawal. Robert’s effective tax rate is 11.4%.
James withdraws $63,500 from his traditional accounts and $12,100 from his Roth accounts to meet his $70,000 spending need and the $5,600 he’ll owe for taxes on the traditional account withdrawal. James' effective tax rate is 8.8%.
The chart above shows the differences in Robert’s and James' withdrawal strategies and their effective tax rates.
Robert will have to withdraw $79,000 from his traditional accounts to meet his $70,000 spending need and the $9,000 he’ll owe for taxes on the withdrawal. Robert’s effective tax rate is 11.4%.
James withdraws $63,500 from his traditional accounts and $12,100 from his Roth accounts to meet his $70,000 spending need and the $5,600 he’ll owe for taxes on the traditional account withdrawal. James' effective tax rate is 8.8%.
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