If you are planning on retirement income over $100,000 per year taxes could be one of your biggest expenses.
The top 10% of Americans pay 70% of all federal taxes and most likely taxes will not go down in the future.
On a $500,000 IRA you could end up paying over $250,000 in taxes!
So getting money into a tax free position can help you increase your wealth and potentially save you six figures or more in taxes.
When you reach age 70½, you’re required to withdraw a certain amount of money from your retirement accounts each year. That amount is called a required minimum distribution, or RMD.
RMD’s are forced distributions by the IRS on your retirement accounts. This can cause you to pay a lot more in taxes in retirement than you may have planned for.
RMD rules apply to tax-deferred retirement accounts:
Traditional IRAs
Rollover IRAs
SIMPLE IRAs
SEP IRAs
Most small-business accounts
Most 401(k) and 403(b) plans
Defined Benefit Plans
This money comes out taxed as ordinary income. Just like it is while you are working.
These distributions can put you in a higher tax bracket. Plus you are not only paying taxes on the money you put in, but taxes on all the compound growth as well.
By creating different tax buckets, taxable, tax deferred and tax free you can avoid the excess taxation trap and have more money to spend.
You can learn about Tax Free Strategies in the Retirement Planning Success Course
Please let us know if you have any questions! Ask your questions HERE.
