Anthony Bardi photo

Anthony J. Bardi

Registered Representative

Enrolled Agent, LTC# 454

 

Tax and Financial Solutions, Inc.

151 SE 223rd Avenue

Gresham, OR 97030

 

Phone:  503-666-7909

January/February 2020

Tax-Smart Retirement Distributions

Tax-Smart Retirement Distributions

Before you retire, consider planning for your required minimum distributions (RMDs). This can be more complicated than you imagine if you have significant retirement assets in qualified plans, such as 401(k) accounts and IRAs, but you can achieve a tax-friendly result with a little planning.


Know the Rules
Generally, you must begin taking RMDs by April 1 of the year after you reach age 70 ½ and by December 31 of each subsequent year. Your tax professional can help you determine your RMD amount, which typically is calculated by dividing the balance subject to RMDs by your life expectancy.


Different rules apply if your spouse is the sole beneficiary and at least 10 years younger than you. There are stiff tax penalties that apply on RMD amounts not taken.


Easing the Bite
Use the years before age 70 ½ to help ease the potential size and subsequent tax bite on eventual RMDs. For example, consider converting some traditional IRA assets to a tax-free Roth IRA during lower-income years, to limit the future income tax bite (you’ll pay ordinary income tax upon conversion). Or invest some IRA money in a Qualified Longevity Annuity Contract (QLAC), which can delay required payments for several more years.


Deducting up to 60% of your adjusted income annually for charitable contributions can also help reduce the tax bite.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

Tax and Financial Solutions, Inc. and LTM Client Marketing are unrelated companies. This newsletter was created by LTM Client Marketing and was not written or created by the named financial professional and does not necessarily represent the views and opinions of Avantax Wealth Management® or its subsidiaries.
Avantax affiliated advisors may only conduct business with residents of the states for which they are properly licensed and registered. Securities offered through Avantax Investment Services, Member FINRA, SIPC, Investment advisory services offered through Avantax Advisory Services, Insurance services offered through an Avantax affiliated insurance agency. Not all products and services are offered by all financial professionals. Products and services listed may only be offered by properly licensed individuals.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.