Understanding tax buckets can help you maximize your retirement savings by strategically managing withdrawals. Learn how tax buckets work and how they can give you more control over your tax bill in retirement.

To learn more about the steps to help save taxes over your lifetime, visit elevate-wealth.com and click "Let's Talk!"

🔗 Website: https://elevate-wealth.com

🔗 Facebook: / elevatewealthadvisory

🔗 Instagram: / elevatewealthadvisory

Subscribe to our channel and hit that notification bell 🔔 to stay updated on the latest investment strategies and financial planning tips!

#StockReturns #InvestmentStrategies #FinancialPlanning #WealthBuilding #wealthadviceforyourbestlife #election #politics #financialmarkets #financialplanning #yearendgiving #rmds #taxdeadlines #rothira #charity #charitablegiving #charitysupport #taxdeduction

What are tax buckets and how can they help in retirement planning? Learn today on Elevate Wealth. Hi, I'm Brian Rosso and I'm joined here today with our president and CEO Deanne Rosso. Hey, Deanne! Hey, Brian! So we describe these tax buckets a lot with clients, and a lot of people don't really understand what we mean by tax buckets. So what do we mean when we talk about these various tax buckets? You're right, I do throw around this tax buckets term a lot and sometimes just assume people know what I mean, but what I mean or what we mean when we describe tax buckets to our clients is different types of accounts get different tax treatment and those tend to fall in three buckets. So if we think about the first bucket, and the reason we use buckets is we think about money pouring into the bucket when you add it into an account and then how it comes out like a little spout at the bottom that we turn on and how those dollars flow out of the bucket. So if we think about the first bucket we call that the taxable bucket, and when money flows into that, that is money that goes in pre-tax, and those are accounts like IRAs, 401ks, 403bs, annuities, anything that gives you tax deferral. And no taxes on the front end, it goes in that taxable bucket, and then in retirement when you turn that spout to turn on that income stream from that bucket, every dollar, every drop that comes out of that bucket is fully taxable at ordinary rates. So then we flip to what I'll say this the third bucket, which is tax-free, and that money that pours in that those are accounts like ROTHs, Roth IRA, Roth 401k, and those dollars that go in go in pre without tax or I'm sorry after-tax. So you've already paid tax on those dollars that flow in there and then in retirement when you turn on that spout all those dollars and the growth come out completely tax-free. And then there's this middle bucket that we call tax advantaged and that one is account types like joint or individual investment accounts, your mutual funds, stocks, bonds that generate capital gains, your home could be considered in that bucket, your savings accounts... but things that generate capital gains and dividends that are taxed lower than ordinary income tax rates. So when you pour the money in it's after-tax it's allowed to grow inside, and you pay tax on the growth along the way at capital gains rates typically and then when you turn on that spout in retirement and those dollars flow out, those dollars are typically taxed at a tax advantaged rate, which is why we call the bucket tax advantaged. Okay, so when we're thinking about these different spouts and levers we can really have some control over how much we turn on each spout and pull each lever. That's exactly right. So that can really benefit you and help maximize your tax savings over time. Absolutely. I really like to use that example a lot with clients, and we're here to help. So if you're still wondering how these tax buckets and levers and spouts can apply to you, visit us at elevate-wealth.com and click, "Let's Talk!"