A question were commonly asked is: Is it possible to drastically reduce taxes in retirement or even eliminate them.
It is possible but you must start planning before you retire. Many people don’t realize that traditional IRAs and 401ks are fully taxed upon withdrawal, so the key is to diversify your retirement income.
You can do that by saving and investing in tax advantaged and non-taxable accounts such as a roth IRA while you’re still working. Once you retired, its all about monitoring your adjusted gross income to control your tax bracket.
You can limit the amount of taxable income you need to withdraw by pulling income from your tax-free accounts.
Also, by withdrawing from non-taxable accounts instead of selling investments that trigger taxable income, you reduce the amount of your social security benefits subject to income tax.
To find out how you can reduce your taxes in your retirement years, call us or visit our website today.
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