tax question

[FLA]

I am allowed to access my retirement accts because I am on SSDI. I understand when you take money out (not Roths), you pay the taxes based on the tax bracket you're in. Right now I pay nothing in taxes because my earnings are so low. Does that mean I won't owe tax on the money or will I still owe, especially if I take out a large amt?

[corn18]

The withdrawal will be treated as ordinary income and taxed as such.

[disneysteve]

The withdrawal will be treated as ordinary income and taxed as such.

Exactly. So if the amount you take out bumps you into the next tax bracket, it will be taxed accordingly. If it doesn't go over the threshold for the next bracket, you might still have no tax. It all depends on the amounts involved.

[FLA]

thanks, guys

[MonkeyMama]

SSDI is not taxed if your total income is below a certain threshold. So taking money out of your IRA could make the SSDI become taxable, in addition to having to pay taxes on the IRA withdrawal.

You would want to tread carefully. Better to spread out versus a lump sum, if at all possible.

Here is some more info:

https://www.bogleheads.org/wiki/Taxation_of_Social_Security_benefits

P.S. I don't recommend getting tax advice online. (Most people don't even know that social security income is taxed, much less *how* it is taxed). I do recommend Boglehead forums, since their tax advice tends to be pretty sound. Their wiki just happened to pop up when I googled SS income limits.

[FLA]

thank you, Monkey Mama