One of the biggest expenses people have during retirement is taxes. Learn that you do have control over your retirement taxes and learn how to minimize those taxes.

Main Questions Asked:

What do you think will be your biggest expense in retirement? Why wouldn’t you want to spend some time learning how to save on taxes?

Key Lessons Learned:

The 5 Retirement Tax Traps

• Social Security: For most people, social security is a critical foundation in their retirement planning. The value overtime of a working couple’s combined social security could be $800,000 or more. The amount of taxes you pay on social security income is affected by how your money is invested in other places. Restructuring your income and deferring taxes can make a lot of sense.
• Not having tax diversification: We are not talking about investment diversification. You can pick and choose how your taxes are diversified each year according to changes in the tax laws. There is always taxed money, tax deferred money, and never or rarely taxed. Each individual is different, so an individual plan can help you allocate your income in these tax categories.
• Withdrawing money from your IRA or 401k: This can be a trap if not planned properly. You need a strategy for taking your money out. When you take money out, you have to pay the IRS. You can pay less by being smart and savvy with a good financial advisor by managing your sequence of withdrawal. Each situation is unique, so it is key to get a customized plan for you.
• Not switching to a Roth IRA: This is a great tax saving strategy, and you don’t want to miss your opportunity to convert to a Roth IRA. With a Roth IRA, you don’t have to take minimum required withdrawals and the money you take out is tax free. Whether you should convert to a Roth IRA depends on what your retirement tax bracket will be. The wealthier you are the more sense it makes to convert to a Roth IRA.
• Not having an estate plan: This covers more than accounts. If you don’t have an estate plan everything that you own can be tied up in court for years plus probate taxes and fees. Why throw your money at the government? When through good planning, you can reduce or eliminate these taxes.

Links To Resources Mentioned

Money Map Retirement Review

1-800-757-0436

Thank you for listening!