At this point this is just a thought experiment, but I am curious what our tax burden will be if we manage to retire early.
For a very simple scenario, say we have one million invested in large stable companies paying an average dividend of 3.5%. Say we also had $200k in cash in CDs and treasuries paying 4% (hopefully in 8 years they will be at least back to this return).
So we would have an annual income of $35,000 from the dividends and $8,000 from the CDs and treasuries, or a total annual income of $43,000 without drawing down the principal.
With today's tax laws for a married couple without children, what might our tax burden look like? This would be our only income, no W2 wages. Would we owe any SS or medicare? (I am pretty sure the answer is no) Could we actually come close to paying zero taxes even though we would have over 1.2 million in assets?
For a very simple scenario, say we have one million invested in large stable companies paying an average dividend of 3.5%. Say we also had $200k in cash in CDs and treasuries paying 4% (hopefully in 8 years they will be at least back to this return).
So we would have an annual income of $35,000 from the dividends and $8,000 from the CDs and treasuries, or a total annual income of $43,000 without drawing down the principal.
With today's tax laws for a married couple without children, what might our tax burden look like? This would be our only income, no W2 wages. Would we owe any SS or medicare? (I am pretty sure the answer is no) Could we actually come close to paying zero taxes even though we would have over 1.2 million in assets?
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