Jay Winestein discusses how to mitigate and lower taxes as much as possible to prepare for retirement.
Listen to the interview on the Business Innovators Radio Network:
The level of a retiree’s post-tax liabilities can have a large effect on the quality of retirement.
Utilizing pre-tax 401ks, 403b, Deferred comp plans, IRAs, etc. while working are good for tax deductibility and for those looking to lower their current taxable income and taxes.
Moving forward, however, the resultant future tax liabilities at retirement can be relatively quite large. Distributions from the pre-tax accounts will likely appear on the tax return as earned income and may also affect the taxability of Social Security benefits negatively.
The taxes rates will be the current rates at the time of distribution, whether higher or lower – compared to the time deposits were made and deductions were received.