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Tax Strategies for Retirement

| December 16, 2019
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When it comes to maximizing retirement savings, having savvy tax strategies can play a critical role in ensuring you’re able to optimize your accounts. The last thing retirees want to face is a large tax bill when they should be enjoying their retirement years.

To avoid unforeseen tax obligations, potential retirees have numerous tax strategies at their disposal. And just like how your assets, allocation to stocks, and risk tolerance needs to be adjusted as you near retirement age, so will your tax strategies.

 During the start and peak of your earning career is when your tax strategies should be allocated to lower your taxable income by maximizing retirement plan contributions. As retirement nears, potential retirees will then have to decide how their income will be pulled from, which will have major tax implications.

With more than 75% of the ‘Baby Boomer’ generation lacking the confidence in their finances to last through their retirement, according to the Insured Retirement Institute, talking with a financial advisor can help alleviate financial worry by crafting the best retirement strategies.

When you compare retirement savings for retirees with a financial advisor vs. a self-directed account, using a financial advisor has netted significantly better results.

To ensure you have the best retirement strategies, check out our best tips for developing tax strategies suited for your needs.

Tips to Implementing the Best Retirement Strategies 

Retirement plans are not a one-size-fits-all for every retiree, but there are proven tax strategies and tips to help you maneuver through any tax situation.

  • Don’t let procrastination set in: Along with waiting until April to develop a tax strategy, waiting for retirement age to craft a retirement plan is much too late. The earlier you can speak with a financial advisor on your retirement strategy, the better off you’ll be when you need to optimize investment and tax contributions.
  • Rebalance your portfolio: To help protect your assets before retirement, it’s vital to reassess your investments and rebalance your portfolio to a more stable investment plan. Being flexible with your income will help ensure you can make adjustments when financial situations change.
  • Determine your social security taxes: The amount of your provisional income level also determines if you’ll need to pay taxes on your income from social security. Once you determine your tax bracket for social security, you can then take steps to lessen your tax obligations.
  • Know when to withdrawal and convert your IRAs: With Individual Retirement Accounts (IRAS) an extremely popular retirement account, more retirees will need to decide on the most opportune time to begin withdrawing. Converting to a Roth IRA can be either done in large sums or in slow increments and the tax implications could be costly if not done properly.
  • Don’t neglect the benefits of cash: One of the best and most common tax strategies is to keep your taxable income low. By having liquidated assets with little appreciation also allows you to withdraw income with a lesser tax obligation.

With the majority of retirees needing at least $35,000 in annual income during retirement, speaking with a financial advisor can help lessen tax burdens and diversify investments.

Regardless of your financial situation, there are plenty of avenues and strategies to enhance your retirement savings while protecting your assets from volatile markets. If you’re unsure of how to craft your retirement strategy, consulting with a financial advisor can guide your retirement goals down a sustainable path. 

Matt Logan is experienced with working with his clients to develop the best retirement strategies for any financial need. He can help you implement your retirement plan, find tax savings, and set future financial goals to strive for. Don’t hesitate to reach out to Matt Logan to see how he can help your retirement strategy. Give a call today at 336-540-9700.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

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