Hi Vainerb, good day, glad to provide some general guideline. The strategy is to minimize the income tax consequence. Depending on your age and filing status, you should withdraw from the taxable account(s) to take advantage of standard deduction.
For example, Single filing status, under age 65, 2021 standard deduction is $12,550. Once this is filled up, then you can consider withdraw from account such as Roth IRA, if qualify, tax free.
Of course, you should consider the impact of Social Security . More other type of income would make social security taxable.
A portion of Social Security retirement and disability benefits may be taxable when income exceeds a taxpayer’s base amount. Certain amounts that are nontaxable for regular income tax purposes are added back to determine taxable Social Security benefits. The base amount is determined by the taxpayer’s filing status.
MFJ $32,000
Single, HOH, QW, MFS (lived apart from spouse all year) $25,000
MFS (lived with spouse at any time during the year) $0
Rate of taxation. Income above a taxpayer’s base amount will result in an inclusion of up to 50% (85% for higher incomes) of the taxpayer’s Social Security benefits on line 6b, Form 1040. If a taxpayer’s income is above the base amount, use the Social Security Benefits Worksheet:
Page 16 of IRS Pub 925 - Worksheet 1
https://www.irs.gov/pub/irs-pdf/p915.pdf
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
