Do Americans have a tax-free way of withdrawing savings? As an Australian, we have no tax-free withdrawals before age 60, so any income that you rely on before that age has to be taxed like normal income (top rate 47%) or normal capital gains (same, or top rate 23.5% if you held the asset for more than one year). Therefore anywhere from 20-30% of all passive income will be gone to income taxes alone - then throw in yearly land taxes/rates of around $10k and the min passive income required to sustain a retirement is very high.
Conversely, after age 60, you get tax-free withdrawals, and after 67 you get a government pension (if you're poor or middle class), health care is free if you earn under $90k AUD so the difference in taxation between FatFIRE at 45 and normal retirement at 65 is massive, even on the same income.
Conversely, after age 60, you get tax-free withdrawals, and after 67 you get a government pension (if you're poor or middle class), health care is free if you earn under $90k AUD so the difference in taxation between FatFIRE at 45 and normal retirement at 65 is massive, even on the same income.
Statistics: Posted by justworld — Sat Jul 06, 2024 3:36 am — Replies 79 — Views 5378