If you don’t know your current tax bracket and the basics of how tax brackets work, you could make major tax mistakes during retirement. Tax brackets can impact which retirement accounts to withdraw from for income. Strategies that can potentially reduce taxes during retirement like a Roth IRA conversion also utilize knowledge of your current tax bracket.
TAX BRACKET BASICS
The fundamentals of tax brackets
Brackets use a progressive tax
How your 401(k) and IRAs will be taxed during retirement
TAX RETURN BASICS
Gross income
Adjusted gross income, above the line deductions, and below the line deductions
Itemizing vs the standard deduction
Taxable income
APPLYING THE TAX BRACKET BASICS
Maxing out a tax bracket
The next dollar earned
Roth Conversion - An example of a married couple maxing out a 12% bracket
RMDS AND TAXES
RMD basics at 72
Opportunities to do Roth conversions
ACTION STEPS
If you’re within 10 years of retirement and looking to create strategies around replacing your paycheck, deciding when to take Social Security, and invest during retirement, I’d invite you to set up an appointment with us at Thrive Retirement Planning, either in person or virtually, where we can get to know each other. Simply call 801-810-8434 or go to thriverp.com and click on get started to learn more.
Do you have questions about when to take Social Security and how to maximize your benefit? Take our free online Social Security Masterclass by going to thriverp.com/ss.
