Retirement Planning/taxes, pension, ira


I am 60, single, no dependents, I do not exceed my standard deduction with taxes.
I just took early retirement, took my lump sum pension and recieved a payout.
My 71k pension had 20% federal taxes withheld, my 60k payout had around 30% withheld.
Now I am freaking out because I will be in a much higher tax bracket next year....maybe 150k.
Can you give me a ballpark figure of what I can expect to owe in taxes next year taking into consideration that my company already taxed the payments that I mentioned?
I also wonder if I put money in an IRA that has already been taxed, will I have to pay more taxes on it when I withdraw it?
I appreciate any expertise and guidance that you may provide.

Richard E. Reyes, CFP
Richard E. Reyes, CFP  
Thanks for your question and I hope I can give you some insight that might help.

What you did is a common mistake many people do that is why its very important to get good advice when you are dealing with taking money from pensions and IRA's/401k's/403b's. Quite often these issues can't be undone. With that said, I feel that in your particular case (without knowing your exact situation) you might be OK with taxes owed since the custodian of the money took out the taxes before sending you the check. I might probably expect a refund. However, I would definitely not take my word on this since only your tax preparer would be able to provide you with the most accurate information after they prepare your taxes.

If you still have this money and are within 60 days from the time you received it you can consider a roll-over of some or all of this money into an Traditional IRA. However, if you want to rollover all of it in order to not pay the tax on the distribution due to your mistake then you would have to come up with the entire original amount to deposit into the IRA, complete your tax return for 2014, and then wait for the refund. So in essence you must have out side money to make up the difference from what you received.

There is a few different scenarios that are available to help you mitigate the taxes owed which I would recommend that you visit with a Certified Financial Planner in your area to help you understand your options better.  

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Richard E. Reyes, CFP


I can provide answers to questions relating to retirement especially relating to; income distribution, tax efficiency, long-term care insurance, life insurance, estate planning, asset protection, variable and fixed annuities, alternative investments and prudent portfolio design.


Through the years Richard has built a reputation as one of Central Florida's expert on retirement income distribution by providing sound, unbiased wealth coaching. We believe that Financial Planning is the problem and Wealth Coaching is the solution. The Wealth Coaching process gives you Peace of Mind, so you can stop worrying about your future. It helps you find happiness as it guides you in the TRUTH of investing, by teaching you how to make wise choices as you journey through your life’s stages. It is all about your relationships and what you value, not your net worth.

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B.S. University of Florida, Gainesville, FL
CFP Certificate, University of Central Florida, Orlando, FL

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