About this episode
David has a question about taxes in retirement: When you’re retired and no longer getting a regular paycheck from which your employer withheld tax payments on your behalf, how do you estimate the taxes you’ll owe? To answer this question, it’s important to understand where income in retirement will be coming from and how that income is taxed. Once you have an idea of what you’ll owe, you need to make estimated tax payments throughout the year. James explains how Social Security, withdrawals from pre-tax accounts, pensions, and brokerage accounts are taxed, and he explains how and when to make estimated tax payments to the IRS. Questions answered: What is the Safe Harbor Rule and how is it relevant to estimated taxes? Is all income in retirement taxed the same? Timestamps: 0:00 - David’s question 2:09 - Estimated tax payment options 5:28 - Back to David’s question 7:48 - Types of income – SS 11:02 - Pre-tax retirement accounts 13:53 - Average vs marginal tax rate 15:50 - Pensions 17:26 - Brokerage accounts 21:20 - How to make estimated tax payments 23:23 - Other considerations Create Your Custom Strategy ⬇️ Get Started Here. Join the new Root Collective HERE!