No one likes paying taxes. But when you’re retired and planning to live off your savings and Social Security, every deduction is money you won’t be able to earn back. However, your tax obligation—and burden—is very dependent on your retirement plan.
Many people mistakenly believe they’ll pay less in taxes after they’ve retired. After all, since you’re no longer earning a wage or drawing a salary, you won’t be subject to payroll taxes or FICA levies.
However, the Internal Revenue Service still treats your post-retirement earnings as income—regardless of whether you’re receiving disbursements through Social Security, an investment retirement account, or a pension.
Why Planning Is Still Important
You can’t know how much or how little you’ll have to pay in tax unless and until you total your expected post-retirement earnings.
If you’re not already retired, you need to strategize, not only to ensure that your nest egg is sufficient to sustain your golden years but also to ensure that you’re taking advantage of the savings programs that best suit your budget, income, and post-retirement aspirations.
People who have invested heavily in their retirement, for instance, may fall into a higher tax bracket after retirement than they did before. They might benefit from a Roth conversion or another wealth management strategy intended to reduce their eventual tax obligation.
How an Expert Can Help
Retirement planning doesn’t have to be difficult, especially when you have an expert’s help.
A wealth management expert can help you evaluate your assets, investments, and income to determine the best strategy for maximizing your retirement savings and minimizing your post-retirement tax obligation. We can advise you on which federal programs and investment options make the most sense for someone in your financial position and even provide guidance on the benefits and disadvantages of retiring at one age over another!
Contact Us Today
If you want to learn more about how your post-retirement income will be taxed and what you can do to save as much money as possible, send Quraishi Law a message today to schedule your initial consultation.