We received a couple of questions on our recent post “How to Increase Retirement Wealth With the Right Withdrawal Order” and will address the first one here. (Note: as we mentioned earlier this year, we will be making an effort to address more reader questions on the blog this year, so, if you have questions send them in.)
The question has to do with the issue of taxes. Specifically, is taking IRA distributions before you are required smart given a potential increase in taxes paid on Social Security income or is it better to delay Social Security in the first place. Here’s the question:
What about the effect of taxable income on SS taxes? Or delay SS with additional withdraws from retirement accounts to cover delay in SS?
This question breaks down into a couple of parts: First, how social security income is taxed and second when to start taking it.