Tax Gain Harvesting

[ncroft602]

I am going to retire this year at 44 years old (my wife is going to continue to work and makes a high income). I am lucky enough to get a pension. The pension will give me about 36,000 a year before being taxed and goes up each year based on the CPI. We have maxed out our 401k's and my 457. We are unable to contribute to a tax deductible IRA and have a taxable investment account.

My question is if I am still able to do the tax gain harvesting (I know probably now right now while my wife is still working)? Any advice given would be great. I listened to your interview on ChooseFI and what you said blew my mind. I have started to read your blog as well. Thanks.

[gocurrycracker]

Using 2018 numbers, if total income from all sources is less than $101,200 then you can harvest gains at 0% federal tax rate.
If income is higher than that, then you will pay 15%+. State taxes and ACA subsidy reduction may also apply.

Why is your pension not taxed?

[prognastat]

It would depend on how much your wife makes. As GCC mentioned if the combined before tax amount of your pension + your wife's income and any other sources of income is under $101,200 then you should be eligible for the 0% rate. Otherwise it'll be 15% or more.

In case you haven't read the article which goes in to more detail regarding tax-gain harvesting:
https://www.madfientist.com/tax-gain-harvesting/