Taxes may be your largest expense during your retirement years. Exploring methods to reduce Uncle Sam’s share of your wallet should be part of your annual planning.
When incomes rise above certain levels, in addition to placing you into a higher marginal tax bracket, you may find you’re paying additional taxes in other areas of your income tax return.
Without realizing, many people are now paying the Net Investment Income Tax, higher income tax on Social Security benefits, higher premiums for their Medicare Health Care and more.
Additionally, your annual Charitable contributions may not be affording you a tax benefit because your itemized deductions must be greater than your standard deduction.
The benefit of tax planning is you can truly see what to expect for the year ahead and down the road. Forecasting various techniques proactively can place you in a position to make educated decisions, save income taxes today and tomorrow. For those of you who are Charitable minded, forecasting your contributions based on the specifics of your situation is of tremendous value.
Keep in mind, the current tax code is set to expire (sunset) at the end of year 2025. If congress does not act, taxes will increase for most taxpayers beginning in 2026.
We assist with proactive tax planning for both clients preparing for retirement and those in the distribution phase of retirement. We model annual tax projections looking throughout your lifetime to identify the tax challenges that lie ahead. From there we design your portfolio, while considering various tax-savings strategies which include distribution planning for your retirement accounts and tactical Roth conversions.
The potential life-time tax savings can be significant. The lower Uncle Sam’s share of your wallet, the greater you keep of your hard earned dollars.
