STRESS LESS. LIVE MORE.
It's never too early to start tax planning for retirement. By using savvy tax strategies, you can minimize the amount of taxes you'll pay in retirement and maximize the value of your nest egg. We'll look at the taxable nature of your current assets and potential ways to include tax-deferred or tax-free money in your financial plan.
One key tax planning strategy is to time your Social Security benefits to coincide with other income sources, such as pension payments or withdrawals from a 401(k). By doing so, you can keep your overall tax liability lower.
We'll also discuss strategies for withdrawing money from your retirement accounts in a tax-efficient manner. By taking a holistic approach to retirement planning, we can help you develop a plan that meets your financial goals while minimizing the tax burden.
TAXATION OF INVESTMENTS.
There are 3 types of accounts that you can invest your money in from a retirement standpoint which are classified by how and when they are taxed. Understanding the different rules that apply to these types of accounts will allow you to develop a retirement plan commensurate with the desired level of risk you are comfortable with the undertaking.
Tax-Deferred: Tax-deferred accounts such as IRAs, 401(k)s and other pensions plans allow you to save for retirement without paying taxes on the money until it's withdrawn. The current federal tax rates will largely determine your future taxable income upon reaching age 65 if most of these savings are held in a Tax Deferment Account (TEA).
Taxable: Taxable accounts provide a great way for investors to diversify their investment portfolios. The best thing about these types of investments is that they’re liquid - meaning you can withdraw funds at any time without penalty or charge. This makes them perfect if there's only one stock in your portfolio worth owning, as it will still be easy enough access all those other shares by selling off some from this account first before making another purchase decision.
Tax-Advantaged: Some examples of tax advantageous accounts include Roth IRAs, 401(k)s, and investment life insurance policies. Money in these accounts will grow without being taxed while you're working, which means it can also remain there if withdrawn at retirement time with no taxes due on its earnings up until that point.