Why is Retirement Tax Planning Important?
Retirement tax planning is essential for anyone who wants to maximize tax benefits of saving for retirement and who wants to keep his tax burden as low as possible during his golden years. You also need to make smart choices about how to avoid estate tax after you have passed away, since you do not want your hard-earned wealth to be lost to the government.
Zimmer Law Firm can provide you with advice on retirement tax planning. We assist you in exploring different kinds of investments that provide you with tax breaks for retirement savings. We also help with making a comprehensive estate planning to avoid or reduces taxes that could be triggered by your death. Call today to find out more.
What is Involved in Retirement Tax Planning?
Retirement tax planning should begin when you are young and starting to save for retirement. There are certain accounts that provide you with tax benefits for investing. You can, for example, invest with pre-tax funds in a traditional IRA, or in a 401(K) offered through your workplace. You could also invest with after-tax money in a Roth IRA, which would make it possible for you to take out money tax free as a senior.
You should talk with an experienced attorney about your current tax situation as you save for retirement and what you expect your tax situation to be as a senior so you can make the choice to invest in the type of account that is going to maximize your tax benefits.
There are also many retirement tax planning issues to address as a senior. States treat pension income differently for tax purposes, so your lawyer can help you to evaluate the rules in the place where you plan to live when you have retired. While some seniors may decide to stay in Ohio, others may prefer to move to lower tax locations like Florida, where you won’t pay state income tax on the income that you have coming in.
The manner in which you withdraw money from retirement accounts is also going to affect how you are taxed on both the federal and state level. Many types of retirement accounts, including 401(K)s and IRAs will begin requiring you to take out funds as you get older, so you need to make certain that you know these rules. You also need to understand how taking money out of retirement accounts will affect your income and tax bracket, as taking money out could affect whether your Social Security benefits are taxed and in what amount.
Why is Retirement Tax Planning Important?
Making smart moves when it comes to retirement savings, and withdrawing from retirement accounts, is very important. It is also important to make informed choices about where you want to live based on how you will be taxed. The amount you pay or save in taxes can have a big impact on how much of your overall retirement savings you end up spending. As a result, tax rules can affect whether you have enough money to live on comfortably until the end of your life or not.
A retirement tax planning lawyer helps you to make strategic investment and withdrawal decisions, assists you in taking advantage of any and all tax breaks available to you, and helps you to craft a strategy to make your money last by lowering taxes.
Zimmer Law Firm will also help you to determine if estate tax is likely to be assessed after you pass away, based on the size of your estate. If your estate is going to be hit with estate tax, our legal team will assist you in trying to avoid this tax or reduce the amount that is owed so you can protect your legacy and provide more financial security for your loved ones.
Getting Help from An Ohio Retirement Tax Planning Lawyer
Tax policy can always make a big impact on your financial situation, and paying a lot of taxes can undermine your financial security as a senior. You need to make sure you are in full compliance with tax rules, but also that you take advantage of any tax breaks or strategic tax planning tools so you can make your retirement savings last.
To find out more about how retirement tax planning fits into your overall retirement plan and estate plan, download our estate planning checklist. You can also give us a call at 513.721.1513 to speak with a member of our legal team and learn how our Ohio retirement tax planning lawyers can help you.