Make the Most of Retirement Income With Smart Tax Strategies
One of the most critical aspects of Dallas retirement planning that gets overlooked is using smart tax strategies to make the most of your retirement income. This should be something that you and your Dallas retirement financial advisor should be planning for from the very beginning. Spending just a few hours of planning in the present will pay off handsomely in the reduction of your taxes in retirement. Here are just a few basic tax strategies for retirement that your Dallas financial advisor and your friends at Retire Guides would like you to know.
Dallas Retirement Planning Tax Strategies For Before Your Retirement
Your Dallas financial advisor will be the first to tell you to make the most out of whatever tax-deferred accounts you have available to you. This can be a traditional 401(k) or traditional IRA, where any contributions you make reduce your taxable income for the year you make the contribution. Additionally, pretax contributions and gains aren't usually taxed until you retire, at which point withdrawals are subject to income tax rates. On the other hand, any contributions you make to a Roth 401(k) or Roth IRA are made with after-tax dollars. While they won't reduce your current taxable income for that year, you won't owe any taxes on appreciation, income, or withdrawals.
Dallas Retirement Planning Tax Strategies For After Your Retirement
There are also some tax-saving moves your Dallas financial advisor can advise you to do upon reaching retirement age. One of the first things you should plan for is moving to a tax-friendly state. There is no income tax in the states of Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming, while New Hampshire and Tennessee tax only interest and dividends. Even if you earned most of your retirement income in another tax-heavy state such as New York or California, federal law bars states from taxing you on benefits earned in a different state. This way, upon moving to a tax-friendly state like Florida or Texas upon retirement, you avoid taxes on your pension income. Ask your Dallas retirement financial advisor about other ways you can reduce your taxes in retirement.
Begin Your Dallas Retirement Planning To Reap Lower Taxes Tomorrow
When it comes to taxes in retirement, it’s best to hire a professional to help you make the best choices for your money. After all, there’s no such thing as beginning your Dallas retirement planning too early in life. An experienced and highly qualified Dallas retirement financial advisor from Retire Guides offers tax efficiency services that will help you make the best long-term plans to secure your wealth for your golden years. If you want to make the most of your retirement, our Dallas financial advisors are only an appointment away. Give us a call and let’s begin your Dallas retirement planning today!