You’ve worked hard your whole life, invested and saved. Now you are retired and hoping to relax and live off those savings. Did you factor in taxes when preparing your nest egg? While many people assume their taxes will be lower in retirement years – that is not always the case.
A recent Kiplinger article “Avoid Getting Entangled by Taxes in Retirement
,” warns against underestimating the potential for taxes to affect your retirement lifestyle.
How can you avoid being caught off-guard? Kiplinger
writer Don Ross stresses the need to prepare and plan ahead. A big misconception is that Social Security benefits are not taxed. In fact, Social Security is taxable based on your earned income during the year. Not factoring this into your planning could impact the amount of money available to you.
Investing using retirement accounts such as a 401(k), Traditional IRA and Roth IRA is another way to boost savings, but each has its own tax impact that you should be aware of.
In addition to different tax consequences, you have options when it comes to the type of investments you choose. It’s possible to invest in assets beyond the stock market with self-directed IRAs.
Want to discover more self-directed IRAs and what’s possible? Schedule a free consultation
to learn more.