Many retirees are learning all too late that taxes are the highest unanticipated expense after they stop working.
Why Pre-Tax Retirement Accounts Create a Tax Trap
Many individuals save for their retirement in pre-tax vehicles. This means that the money being saved for retirement has not been taxed yet.
In retirement, the income withdrawn from these types of accounts will be entirely taxable. This creates the perfect storm for taxation in retirement. The tax law is poised to potentially minimize the income you are planning to sustain your lifestyle. If you want to prevent the government from doing so, reassessing your financial plan now is probably crucial. Our comprehensive tax planning guide breaks down exactly how these accounts get taxed and what you can do about it.
How Taxes Impact Your Social Security Benefits
Something else many people don’t realize is that when the majority of your income is taxable, your Social Security can also be taxed up to 85%, according to IRS guidelines on Social Security taxation. This being the case, it’s probable you will get shorted by the Social Security system, which you have been contributing to your entire working life. Learn more about how Social Security is taxed and what you can do to minimize the impact
The Case for Tax-Free Retirement Savings
A reasonable goal would be to have about half of your income tax-free in retirement, which will also reduce the impact of taxation on your Social Security income. To potentially avoid all of these potential disasters, consider converting some of your pre-tax savings strategically into tax-free savings. I’d be happy to discuss with you personally how this can be possible for you, at no obligation. Explore our tax minimization strategies to see how a customized plan could work for you.
Getting a Second Opinion on Your Retirement Tax Plan
People will often get a second opinion from another physician to arrive at the best medical plan of action. In the same light, getting a second opinion for your retirement plan could potentially be just as important. It could mean the difference between keeping more of your money and giving it away.
If you are interested in receiving a second opinion on your retirement income and taxation plan, you can contact me via email at info@TheIvyAG.com or call our office at 866-360-2724 and ask for me, Brandon.
