Planning for retirement gets more complicated as you get older. Before leaving the workforce, you need answers to many questions about how much you should have saved, from a yearly income to a nest egg for emergencies and paying taxes. One of the most critical aspects of your retirement strategy should be your tax planning. An expert financial advisor can help you take advantage of tax law to achieve benefits after leaving your job. Here are some of the most common tax planning strategies we offer to our clients.
Convert your traditional IRA into a Roth IRA.
If you anticipate entering a higher tax bracket during retirement, consider converting your traditional IRA into a Roth IRA. Doing so means avoiding the Required Minimum Distributions and achieving a lower tax rate. The growth of a Roth IRA isn’t taxed, meaning you can generate future income without worrying about creating an additional tax burden.
The Roth IRA also protects your beneficiaries by enabling them to avoid future taxes on withdrawals from the account since you’ll pay at today’s current tax bracket. You should carry several retirement accounts into the future, and for individuals on track to retire at a higher tax bracket, converting into a Roth IRA provides several advantages.
Use a self-directed IRA.
Many people haven’t heard of self-directed IRAs because they don’t provide compensation for account custodians like Merrill Lynch or Charles Schwab. Traditional real estate investments include residential homes, condos, and even foreclosures. A self-directed IRA takes advantage of alternative real estate investments, such as tax liens, hard money loans, peer-to-peer lending, and many more.
Using a self-directed IRA allows you to invest while deferring capital gains taxes and dividend taxation, the same as a traditional IRA.
Purchase tax-exempt municipal bonds.
The federal tax advantages of municipal bonds are well known. Still, there may be additional municipal and state tax advantages based on where you live and your income. Within your portfolio of assets for retirement, municipal bonds often provide extra peace of mind.
They’re a fixed-income investment, which may feel safer than traditional investments. The interest you generate from your municipal bonds is also tax-free. You also contribute to the betterment of your community, as municipal bonds are used for building schools and infrastructure.
Use a Maltese pension plan.
Miser Wealth Partners provides clients with access to the premier tax law and asset protection attorneys in the United States. We can craft retirement strategies that maximize the use of lesser-known tax advantages.
Many individuals planning retirement are frustrated by the stringent limitations placed on contributions to traditional IRAs. However, in 2010, a new option became possible, with the ability to make unlimited contributions to a Malta pension plan.
Working with Miser Wealth Partners, you can develop a strategy for limitless contributions to a pension plan. You’ll be able to make withdrawals throughout your retirement without triggering tax obligations either in Malta or the United States.
Miser Wealth Partners provides retirement strategies with optimized tax planning in Knoxville, Tennessee.
Miser Wealth Partners is devoted to helping our clients achieve lives of abundance. Studies show that retirees who have guaranteed sources of income after they leave the workforce are happier. We want our clients to live their best lives after retirement.
Our goal is to eliminate concerns over whether your money will last. You can focus on your retirement dreams, from second homes to travel or providing college funds for grandchildren. We’re an experienced team bringing together every quadrant of your financial life to ensure lifelong wellbeing.
If you’re building a retirement strategy and are wondering about the advantages of tax planning in Knoxville, TN, contact Miser Wealth Partners.