For those of you hoping to continue ...
Friday, April 13, 2007 5:41 PM
For those of you hoping to continue clubbing after you retire, be advised that the IRS really screws retired people. If you're planning to supplement your income with your 401k, think again. The marginal tax rate on 401k withdrawals can be as high as 50%, even if your income is fairly modest. How can that be? When you make a 401k withdrawal, you not only get taxed on it (unless its' a Roth IRA) but the additional income (yes it's considered additional income even thought it's supposedly already yours) increases the amount of your Social Security that gets taxed. So in effect it gets taxed twice. And your marginal tax rate is higher than a working person whose income is much greater than yours. Now that's what I call fair. And do you think it's going to get better once Hillary takes over? Now you know one major reason why I don't go clubbing anymore.
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