What a great question!!
When you take money out of a retirement account, it will be subject to taxes. The only account that would not be subject to taxes would be a Roth 401K or Roth IRA. If you have Roths, then it might be best to take the money out of these accounts. If you own a home, it might be best to sell that home and use the proceeds to pay for the retirement community.
Having exhausted all of those other possibilities, when taking the money out of your 401k or IRA, that are not ROTH, you might consider taking half in 2023 and half in 2023 so that you spread it over two years. This way you would maybe stay in a lower tax bracket.
| Tax Rate |
Single filers |
Married filing
jointly or qualifying
surviving spouse |
Married filing
separately |
Head of household |
| 10% |
$0 to $10,275 |
$0 to $20,550 |
$0 to $10,275 |
$0 to $14,650 |
| 12% |
$10,276 to $41,775 |
$20,551 to $83,550 |
$10,276 to $41,775 |
$14,651 to $55,900 |
| 22% |
$41,776 to $89,075 |
$83,551 to $178,150 |
$41,776 to $89,075 |
$55,901 to $89,050 |
| 24% |
$89,076 to $170,050 |
$178,151 to $340,100 |
$89,076 to $170,050 |
$89,051 to $170,050 |
| 32% |
$170,051 to $215,950 |
$340,101 to $431,900 |
$170,051 to $215,950 |
$170,051 to $215,950 |
| 35% |
$215,951 to $539,900 |
$431,901 to $647,850 |
$215,951 to $323,925 |
$215,951 to $539,900 |
| 37% |
$539,901 or more |
$647,851 or more |
$323,926 or more |
$539,901 or more |
Hopefully this graph looks okay when I click reply but if it does not, you can get it at this link: https://turbotax.intuit.com/tax-tools/calculators/tax-bracket/
You can click on it or copy and paste it into a browser.
Let me know if you need more assistance,
Katie S.
Katherine S 63
