Don’t Get Stuck in a Higher Tax Bracket in Retirement

By Brendan Hughes0 Comments

Retirement dreams usually involve a house in a nice-weather location, travel, and the freedom to do what you want, when you want. But as a retiree, your income tax bracket could have a big impact on your ability to live out those retirement dreams.

The recent Forbes article “Avoid Being Pushed into Higher Tax Brackets in Retirement” by Phil DeMuth addresses a somewhat unknown factor in retirement planning – year-to-year tax bracket fluctuations. A number of factors including: amount of Social Security claimed, IRA distributions, capital gains, dividends, pensions, annuities, etc., can impact your tax bracket.

DeMuth mentions a few tactics that could help mitigate tax consequences when in retirement – including partial Roth IRA conversions. While DeMuth provides ideas for mitigating taxes in retirement, self-directed IRAs can help generate wealth to get to retirement.

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