Avoiding Tax Bombs During Retirement

Many people utilize retirement accounts and funds that grow tax-free, avoiding tax on income or capital gains, but are you prepared for the Required Minimum Distributions you may have to take and the taxes associated with them? In this video, we offer solutions to defuse potential retirement account tax bombs.

00:00 What is the Retirement Account Tax Bomb & RMDs?
01:53 What Can be Done to Help?
02:44 Converting All or Some of Your IRA to a Roth IRA
03:41 Qualified Charitable Distributions
04:35 Working With a Wealth Advisor to Guide You Through This Process

#retirement #tax #capitalgains

The retirement problem you've never heard of is called the retirement account tax bomb. And it will likely affect thousands of individuals and families in the coming decades as the Baby Boomer generation with massive amounts of their wealth tied up in IRAs and other retirement accounts. Again, taking distributions from those accounts to support their lifestyle in retirement. It's common knowledge that it's important to save for your future in retirement. The idea is that after saving enough, you'll be able to live on those savings when you're no longer working to build up your retirement paycheck. Many people utilize tax-advantaged accounts, whether that's through a 401(k) or pension contribution with your employer, or simply depositing and investing funds with your personal IRA. Funds deposited into a tax-advantaged retirement account can be invested and grow tax-free over time, thereby avoiding any kind of tax on income generated by those investments or capital gains incurred when they are sold within the account.

Once you retire and roll over your employer accounts to an IRA, it's not uncommon for your IRA and your home to be the two largest portions of your overall net worth the issue arises. When you start making withdraws, you’re taxed on each dollar you take out, just like your paycheck while working. When you reach the age of what the IRS refers to as your required beginning date, basically the year after you turn 72, after your required beginning date, the IRS forces you to withdraw a minimum percentage of your IRA each year, what's known as a Required Minimum Distribution.

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These videos are limited to the dissemination of general information and are not intended to be legal or investment advice. Nothing herein should be relied upon as such. The views expressed are for informational purposes only and do not take into account any individual personal, financial, or tax considerations. There is no guarantee that any claims made will come to pass.