Thanks for pointing that out. My exact amount of SS in my calculations is $58,459. I computed that I am past the hump at other income greater than $66,171. So, taxable income = .85 * 58459 + 66171 = $115861 which is greater than the 12% tax bracket. Depending upon my RMD alone, however, I am not out of the 12% bracket and therefore still in the hump portion.
Got a little lost here. Looking at the charts in the wiki, I thought the worst case of a 40.7% hump is only in the single case (not the MFJ case). I have some of the calculations from those charts in my spreadsheet, but not all of them. So, wasn't sure. Probably need to play around with the total taxation part to understand it better. I have just been focusing on the SS part.vtMaps wrote: ↑Fri May 22, 2020 4:17 amWith SS = $58k, the worst of the hump (40.7%) is so narrow that it is not much of a consideration. Your non SS income above about $20k will be taxed at about 22%. Non SS income up to about $20k is untaxed. If you can do enough Roth conversion to get your RMD down to $20k, you may never pay taxes on any income again.
I am still trying to figure this all out. I think these options could make sense. Note that I am currently contributing to my 401K (not Roth 401K) because I have a state tax and don't think I will when I retire) :vtMaps wrote: ↑Fri May 22, 2020 4:17 amI think you should convert up to the top of the 22% bracket. That means converting now at 22% to avoid paying 22% later. The reason to do this is because you are married. Look what happens to the tax hump after one of you dies, and the single survivor, with just a survivor SS benefit, has a RMD of $50k. There's a lot of unavoidable 40.7% marginal bracket!
1) Take spouse SS at 62 and convert to the top of the 12% bracket for 10 years (age 60-70).
2) Don't take spouse SS at 62 and convert to the top of the 12% bracket for 10 years (age 60-70).
3) Don't take spouse SS at 62 and convert to the top of the 22% bracket for 10 years (age 60-70). This makes sense to me if not taking spouse SS at this time because would avoid any hump on her SS and could get the RMD down to zero.
I really appreciate all the help here.