You’ve spent your working years diligently saving the maximum you could on a tax-deferred basis for your retirement. At first glance these retirement accounts, along with your regular investment accounts and Social Security benefits, seem sufficient enough to get you through your retirement years.

  

When the time comes to liquidate these investments, money can be lost unnecessary to taxes if done incorrectly. These taxes can have a significant effect on the retirement projections you’ve forecasted and the lifestyle you planned for.

  

If you’re fortunate enough to have accumulated significant amounts of wealth in IRA’s, annuities and retirement plans, it’s important to understand these assets are different in many ways then other assets you may own.

 

 Some of the ways IRA’s differ from other assets are:

  

IRA’s can’t be gifted or transferred to Trust or anyone else during your life. Upon death they are NOT controlled by the terms of your Will and are transferred to the designated beneficiary on EACH account. If done incorrectly, this will not only complicate retirement for a surviving spouses but can also unravel any finely crafted estate plan.

 

Except for ROTH IRA’s, most assets held within qualified retirement accounts are treated as income upon distribution. In addition, you are required to start withdrawals in the year after you turn 70½ or face significant penalties. These withdrawals, combined with your other income, can not only increase the taxable portion of your Social Security but also increase your’ Medicare costs.

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The tax implications of how, when, and where you take money from are complex and subject to change. Even if the rules stay the same, your personal tax situation may change from year to year based on how much and what kind of income and deductions you have. We provide ongoing income tax planning to understand the tax implications of our choices before you make them and seeking to minimize the overall impact of withdrawals over time.