Thinking About Withdrawing TSP to Avoid State Taxes
Moderator: Aitrus
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Re: Thinking About Withdrawing TSP to Avoid State Taxes
Have you been able to maintain your health since your operation?
Re: Thinking About Withdrawing TSP to Avoid State Taxes
You are correct, only earned income can be put into any IRA. You can still do conversions (Traditional to Roth), but this wouldn't make sense If you are trying avoid taxes since you have to pay the taxes on any conversion. Depending on your balance, RoR and current tax rate it may make sense long term to avoid future taxes but that can get complicated.MakeMe$$$$ wrote:I don't think I can do a Roth since I no longer work.
I'm certainly looking at how to take my money out to minimize federal tax along with perhaps timing it to avoid state income tax in any state we could settle down to.
- MakeMe$$$$
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Re: Thinking About Withdrawing TSP to Avoid State Taxes
Things are going well. I did have to go on meds to treat Afib but that has worked out well.crondanet5 wrote:Have you been able to maintain your health since your operation?
Don
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
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- Posts: 4330
- Joined: Tue Aug 19, 2008 8:51 pm
Re: Thinking About Withdrawing TSP to Avoid State Taxes
Do you have a long term care health policy for you and your wife?
- MakeMe$$$$
- Posts: 772
- Joined: Tue Aug 23, 2011 10:12 pm
Re: Thinking About Withdrawing TSP to Avoid State Taxes
Yes for her. No for me...not counting Sandee. LOLcrondanet5 wrote:Do you have a long term care health policy for you and your wife?
Because of previous health issues LTC was prohibitive for me.
Our plans to be debt free have been realized. We are planning for a car payment and small(ish) mortgage in the future. We are tossing over 4K a month into savings/investments.
We would like to have more total cash/saving/investments than we have but we aren't in bad shape either. Working on that!
Don
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
Rolled over to Fidelity 2/24/18.
Fantasy still playing with Daily Strategy 12767.
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- Posts: 4330
- Joined: Tue Aug 19, 2008 8:51 pm
Re: Thinking About Withdrawing TSP to Avoid State Taxes
Your ytd return shows that. I suggest you stash away everything you can to cover future health care costs for you. Men tend to think they will die quick but the reality is your body won't let you. What if you were in a nursing home for 10 years? Can you afford it? That was what the TSP/401k/IRA program was intended to be used for when the program was set up. Unfortunately the financial companies twisted it into a retirement program most Americans simply cannot afford.
I suggest you look for a place with good health care facilities rather then pretty sunsets. You need good heart doctors and facilities. You need a young physician who orders beaucoup blood work. Is your afib causing fatigue? Can you still ride a bike 60 miles? Anybody have ideas on best health care places to retire?
I suggest you look for a place with good health care facilities rather then pretty sunsets. You need good heart doctors and facilities. You need a young physician who orders beaucoup blood work. Is your afib causing fatigue? Can you still ride a bike 60 miles? Anybody have ideas on best health care places to retire?
Re: Thinking About Withdrawing TSP to Avoid State Taxes
I have a question regarding Roth TSP. I currently live in Washington (no state tax) If you built up your Roth TSP and when you retired decided to move to a state with state tax for whatever reason; Would your withdrawals from the Roth be taxed by the state?
From my understanding of the Roth TSP it at least exempts you from federal tax, but what about state tax?
From my understanding of the Roth TSP it at least exempts you from federal tax, but what about state tax?
Allocation = 100% S (11/17/2017)
Daily Seasonal Strategy since 23 Aug 17
Following Strategy #16292
Current 12 Month PIP 27.38 %
Maxing 100% Roth TSP
Daily Seasonal Strategy since 23 Aug 17
Following Strategy #16292
Current 12 Month PIP 27.38 %
Maxing 100% Roth TSP
Re: Thinking About Withdrawing TSP to Avoid State Taxes
Typically States that have income tax rely on the Federal Return amounts in determining taxable income for the state returns. Since Federal exclude, Roth distributions should nob be taxed; but I recommend that if you check your specific state's tax code to verify if your state taxes any retirement income and if so, specifically if Roth distributions would be subject to any tax. Make sure to check age requirements, type and dollar limits for excluded retirement income as it varies quite a bit by state.
Conversions would be taxable in states with income tax since they would be included in federal income tax.
Conversions would be taxable in states with income tax since they would be included in federal income tax.
Re: Thinking About Withdrawing TSP to Avoid State Taxes
I don't have much advice for retirement plan other than it sounds very likely you can maintain your "residency" in SD easily enough, so regardless of buying a home in AZ I would just make a trip back to SD once every 5 years to maintain your current zero state tax. As far as AZ sites, I really like Tempe which is right next to Chandler and Gilbert but there are more college kids on every sidewalk - so Chandler/Gilbert/CG are all good choices but if you don't want to beat the heat in southern Arizona check out Prescott and Flagstaff. They are both more temperate with "seasons" - I was only in Prescott for a day and I'm only 34, but after a couple hours I told my wife "I'd like to retire somewhere like this." Now if you want a busier city but don't want the 115-120 Fahrenheit summer days of the Pheonix area, I would definitely opt for Flagstaff - it reminds me of Asheville and NC mountains without the humidity of the south east (which is where I have lived for about 33 years). Sorry I know this is an investment forum, but when I saw the AZ choices, I wanted to volunteer my opinion having just lived out there for a year (I would not recommend living on a reservation like I did unless you have to....like I did)
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