Risks

Taxes & Government

You want to turn your assets into retirement income, but without the hefty tax bill. If this is you, it’s time to develop the perfect drawdown strategy. It’s just as important to outline how you’ll take money out of your accounts as it is to decide how you’ll save it. Our in-house experts show you how to stay in control of what you pay, so you can enjoy your wealth without the stress of surprise tax bills.

You should never have to worry about using the money you’ve saved because of the threat of a looming tax bill. Remember, the more you plan, the better you’ll feel. Many retirees misunderstand how they’ll be taxed and incorrectly assume they’ll be in a lower tax bracket. They use up their taxable accounts first, saving their tax-free Roth accounts for later. It seems like a good idea to handle your tax responsibilities first and enjoy those tax free benefits later, but sometimes we get in a pattern of deferring all the benefits of retirement because we’re scared of what might happen if we use them up.

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 This method of cautiously depleting your accounts one by one, however, can actually increase what you pay in taxes, accelerating the devaluation of your accounts - two things you don’t want to do if you’re planning for longevity. We love making your money work for you, because it should. Ready2Retire helps determine the right tax bracket for you, devising a plan to sequence your withdrawals while maintaining growth for a stress free, healthy relationship with your assets. Here are four aspects we’ll analyze when determining your drawdown strategy.

See examples below of government and taxes we can help you with.

  • Love Where You Live

    Certain states have tax codes that are more welcoming to retirees. Know how your state compares and whether a move makes sense.

  • Embrace Diversification

    Retirement accounts each come with their own tax benefits/drawbacks. The more diverse your accounts, the better you can sequence them.

  • Welcome New Deductions

    Though you may lose some of the deductions you relied on when working, you can expect a little boost in your standard deduction after you reach age 65.

  • Cash Accounts

    Plan for Change

    Taxes are subject to change, and could be higher when you retire than they are now. This goes against conventional wisdom about retirement planning, and that’s why we are here.

TOP ADVICE:

The way you withdraw your savings is just as important as how much you have saved. With a personalized strategy, you can boost the longevity of your retirement finances.

  • Up to 85% of your Social Security benefits are taxable, depending on how much you earn. Withdrawals from annuities are taxed as income.

  • Remember, diversification is key. Ask us about how Roth accounts and Whole Life policies can mitigate your tax burden.

  • Diverse income streams allow you to withdraw intelligently from your accounts according to market fluctuations. Ask us how we manage your financial portfolios so that they continue to grow in retirement.

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