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March 17, 2015


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Retired To Win

Oh, I know it's tax season. Starting March 10th, I started putting in 1 to 2 hours a day compiling, organizing and calculating to complete our multi-form 1040 tax return. This way, I can make steady progress towards timely completion without getting myself in a stress tizzy.

And, apropos of one of your WSJ posts, here's a new thing for me starting this year: withdrawals from my traditional IRA calculated to be subject to the lowest (10%) tax bracket. I'm going to have to pay something, so better to work it to pay as little as possible. Ergo, the withdrawals -- even though the money is not actually needed. It will go right into a "regular" investment account.

Happy tax season!

Fervent Finance

Out of college I worked for a smaller regional CPA firm for a couple of years. And let me tell you, I don't miss "tax season." But I do appreciate the things I learned then which I have applied to my personal finances now. I've thought about setting up a small 1040 shop once I decide it's time to retire early.


Thanks so much for the article on earlier withdrawals from IRAs, Sydney! Very helpful. It gives me and my husband some good ideas and strategies for our future retirement. Thanks again.


Two months ago, I got my cell phone ever. I gave my cell number to about 6 people, all close friends and relatives who might need to get in touch with me if I am out. But for every call or text I have gotten from them, I have gotten about 25 calls or text from unknown people. All the scammers and stock tips and other nonsense and garbage (although none from the IRS - that junk comes to my landline). Two days after I got the cell phone, I got a few calls from some scammer wanting my name and SSN because there was some unspecified legal action being taken against me and it was "important and urgent" that I call them back. Yeah right! Barely worth it to get a cell phone.

I prepare tax returns for myself, my best (male) friend, and my ladyfriend. Hers is easy no, his has become more complicated since his remaining parent died in 2012 and he inherited a big brokerage account and an IRA. Mine have become more complicated with the ACA and its new forms. But I began "bunching" my itemized expenses to save on taxes so next year's return will be easier. Still, I have to juggle 3 returns so they keep me busy this time of year.

Tom Sightings

Yikes! I would have called back. Thanks for the tip!

Caree Risover

It is appalling that so many telephone scams are in existence. Here in the UK most come from individuals operating from abroad and deliberately target those retirees who are really elderly. I always feel so sorry for those who are tricked into parting with cash by falling for the ruse.


WRT IRA withdrawals, I do much the same as you suggest. My goal is to have my conventional IRAs empty by the time I am 70. If I don't need all the money to live on I just convert some of it to my Roth IRA.

When I first retired young, I also used my IRAs to live on using SEPP: Substantially Equal Periodic Payments. That allowed me to take money from my IRAs long before age 59½ without penalty. It was the SEPP amortization rule that allowed me to retire early and because I could take enough money from my IRAs to live on.

On a related note, I get annoyed at the assumption by most financial advisers, and articles on the subject, that one must take Social Security when one retires. And that to delay doing that one must keep working. As we few early retirees have learned, it is ok to retire early, live off of savings, including 401(k)s/IRAs, and delay drawing Social Security until much later.

I plan to wait until age 70 to start SS because I want the much higher payments as "insurance" against the possibility I will live to an old age. My parents have made it to 88 and 90, thus far, so I may well make it to my 90s as well. And if I croak early, what difference does it make how much money I got out of Social Security? You can't take it with you!

So, thumbs up to your suggestion that it is ok to tap IRAs well before the mandatory distribution age of 70½. Especially if you can do so in the 10% tax bracket as you and I have been doing.

Retired Syd

DPG: I know! That is a huge pet peeve of mine too, equating the term "retirement" with the action of taking social security. Every day I read another retirement article that says "Don't retire yet," and lists the reasons--one being that you should put off taking Social Security until later. Yes you should wait to take SSI, it grows really fast if you do. (And I totally agree with your attitude--if you wind up dying before the breakeven, who cares--you'll be dead!) But that should be an argument for taking from your various IRA withdrawals first, or taxable accounts. Why does it have to mean retirement?

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