Ep 26. How Taxes Can Impact Your Retirement Planning
Ep 26. How Taxes Can Impact Your Retirement Planning
In this episode we discuss how considering your tax bracket can impact your financial planning and help you minimize taxes going into retirement starting now.
In the example I share, I talk about a married couple with income of $400,000 and tax deductions of $30,000. With a taxable income of $370,000 they are in the 32% marginal tax bracket, but their effective tax rate is just over 20%. You can see that in the below example.
| 2023 Federal Income Tax Brackets | ||||
| Tax Rate | Married Filing Joint | Income | Tax | Effective Rate |
| 10% | $0 to $22,000 | $ 22,000 | $ 2,200 | |
| 12% | $22,000 to $89,450 | $ 67,450 | $ 8,094 | |
| 22% | $89,450 to $190,750 | $ 101,300 | $ 22,286 | |
| 24% | $190,750 to $364,200 | $ 173,450 | $ 41,628 | |
| 32% | $364,200 to $462,500 | $ 5,800 | $ 1,856 | |
| 35% | $462,500 to $693,750 | $ - | $ - | |
| 37% | $693,750 or more | $ - | $ - | |
| Totals | $ 370,000 | $ 76,064 | 20.6% | |
Disclaimer: This podcast is for information purposes only and does not constitute tax, legal or investment advice. Consult a financial advisor with your questions.
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