3 Ways to Maximize Your Retirement Income and Minimize Your Tax Bill

If you don’t have a tax plan, you don’t have a retirement plan. In retirement, you not only want to maximize your income, but you also want to minimize your tax liability. In this video, @Nick Royer with @Group 10 Financial and TV News Anchor @erinkennedy break down three strategies that will help you keep more money in your pocket, including:

1. #Roth Conversions: take advantage of today’s historically low tax rate
2. Have an #RMD Strategy: consider earlier distributions or Qualified Charitable Distributions
3. Explore Health Savings Accounts: the only triple tax advantaged retirement account that can help with what’s often your biggest expense in retirement, #healthcare

To talk through these strategies to see if they’re right for you, please feel free to reach out to Nick and the Team at Group 10 Financial, who can run a detailed analysis, specific to your unique financial goals, by calling 407-960-4052 or by setting up a 15-minute Virtual Strategy Session at www.Group10Financial.com

#TaxRate #RothConversions #Taxes #HSA #retirement #WealthManagement #QCDs…(read more)

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As you approach retirement, it’s important to maximize your income and minimize your tax bill to ensure that your golden years are as comfortable and financially secure as possible. Here are three ways to achieve these goals and make the most of your retirement.

1. Delay Social Security Benefits

One of the biggest decisions you’ll need to make as you approach retirement is when to start collecting Social Security benefits. While you can start receiving benefits as early as age 62, your monthly benefit amount will be reduced if you choose to claim early. Conversely, if you delay benefits until after your full retirement age (which ranges from 66 to 67, depending on when you were born), your monthly benefit amount will increase by 8% per year until age 70.

By waiting until age 70 to claim benefits, you can maximize your monthly income and potentially receive thousands of dollars more in lifetime benefits. Plus, because Social Security benefits are taxed based on your income, delaying benefits can also help you minimize your tax bill by reducing your overall taxable income.

2. Diversify Your Retirement Portfolio

Another way to maximize your retirement income is to diversify your portfolio and invest in a mix of stocks, bonds, and other assets. By spreading your investments across different types of assets, you can reduce your exposure to risk and potentially generate higher returns.

It’s also important to consider the tax implications of your investments. For example, investments held in a traditional IRA or 401(k) are taxed as income when you withdraw funds, while Roth IRA and Roth 401(k) accounts are funded with after-tax dollars and offer tax-free withdrawals in retirement. By diversifying your investments in both traditional and Roth accounts, you can take advantage of tax-free withdrawals while also minimizing your tax bill.

3. Manage Your Withdrawals Wisely

Once you’re retired and no longer earning a steady paycheck, it’s important to manage your withdrawals from your retirement accounts carefully. If you withdraw too much too soon, you may run out of money later in retirement. On the other hand, if you withdraw too little or not at all, you could end up facing a higher tax bill in the future.

One popular rule of thumb is to withdraw no more than 4% of your portfolio value each year in retirement. This approach is known as the “4% rule” and is designed to help ensure that your money lasts throughout your retirement. It’s also important to consider your tax situation when making withdrawals. For example, you may want to withdraw funds from your traditional IRA or 401(k) during years when your taxable income is low to minimize your tax bill.

In conclusion, maximizing your retirement income and minimizing your tax bill requires careful planning and smart financial decisions. By delaying Social Security benefits, diversifying your retirement portfolio, and managing your withdrawals wisely, you can help ensure that you’ll have the financial resources you need to enjoy a comfortable retirement.