Cash or Mortgage

[aj485]

@MarkR

Wouldn’t it be SS+pensions+RMD = ~$200k for that bracket edge?

Yeah - I guess I read it that the RMD alone was pushing the 24% bracket, but adjusting for pensions and SS to be a part of the income to get to the top of the 24% bracket would decrease the RMD, and therefore the IRA balance lower.

That said, even with an RMD of, say $100k, the IRA balance would be north of $2.5MM. 1/10 of that would still easily put a single filer into at least the 32% bracket, and depending on other income, possibly into the 35% bracket. So it still could be that it will still result in a lower tax bill on the overall IRA if @RHinCT were to take some distributions in the 32% bracket.

@MarkR

Does that exemption have a cliff eligibility, or does it phase out?

It phases out. For single filers, the phase out range starts at $75k and tops out at $175k. For MFJ filers, the phase out range is $150k to $250k.

AJ

[RHinCT]

Thanks again.

@aj485

presuming an RMD of $200k

Actually a good bit less. I delayed SS until it stopped growing, and have two small pensions. They give me a head start on the way to the top of 24%; RMD on top leaves about $20k headroom. Last year, pre-RMD, there was more like $85k to feed the rollover.

[RHinCT]

Well, the house purchase will be going ahead, though details not important to my question here turned out to be quite different. I’ll be going back over all the discussion here, and play with some spreadsheets. Thanks everyone for your insights!