Three Possibilities for Your Taxes in Retirement
Jeff Martin is a financial advisor at Cornerstone based in Reno, NV. Jeff has earned the Life and Health Insurance Licensure and has passed the Series 65 examination. He enjoys being able to help clients create customized strategies for their portfolios based on their unique financial goals.
THREE POSSIBILITIES FOR YOUR TAXES IN RETIREMENT
As one approaches retirement, understanding the implications of your taxes becomes increasingly vital. Being well-prepared can help you make the most of your hard-earned savings. Here are three key possibilities to consider:
TAXATION OF SOCIAL SECURITY BENEFITS
Upon reaching retirement, a portion of your Social Security benefits may be taxable depending on your combined income. For individuals with substantial additional sources of income, up to 85% of these benefits may be subject to federal taxation.
REQUIRED MINIMUM DISTRIBUTIONS (RMDS)
From the age of 73, retirees are mandated to begin taking Required Minimum Distributions from certain retirement accounts, such as traditional IRAs and 401(k)s. These distributions are treated as taxable income and must be factored into your overall tax planning strategy. Failing to withdraw the requisite amount can result in substantial penalties.
TAX-ADVANTAGED ACCOUNTS
Maximizing the use of tax-advantaged accounts, such as Roth IRAs, can be beneficial. Contributions to Roth IRAs are made with after-tax dollars, and Roth IRA withdrawals during retirement are generally tax-free. This can provide a valuable source of income that does not increase your taxable income.
WHERE TO GO FROM HERE
Proactive planning and consultation with financial advisors can help navigate these complexities, allowing you to focus on enjoying your retirement. If you would like to discuss your options, please don’t hesitate to reach out to our team at Cornerstone to schedule a meeting. Call us today at 775.853.9033 or click here if you’d like to see how one of our financial advisors could help you.
Based in Reno, NV, Cornerstone is for individuals and families looking to grow wealth, protect and preserve their life savings, and plan for the distribution of their estate in a tax-efficient manner through a tailored strategy. Schedule a time to discuss your financial goals with us.
This information does not constitute legal or tax advice. PCIA and its associates do not provide legal or tax advice. Individuals should consult with an attorney or professional specializing in the fields of legal, tax, or accounting regarding the applicability of this information for their situations.
Advisory products and services offered by Investment Adviser Representative through Prime Capital Investment Advisors, LLC ("PCIA"), a federally registered investment advisor. PCIA: 6201 College Blvd., Suite #150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management ("PCWM") and Qualified Plan Advisors ("QPA"). ©2023 Cornerstone Retirement Group, Inc. - All Rights Reserved.