Even though you may be retired, the tax man is ready to take a slice of your Social Security and retirement fund payouts. How can you minimize his cut? Stephen Nelson, a wealth manager at Aldrich Wealth in Carlsbad, Calif., has some very good advice here:
Larry Light: With boomers retiring every single day, how can they minimize their tax bill in retirement to keep more money in their pocket?
Stephen Nelson: Some people in retirement find out that they actually pay more in taxes than they did when they were working. This is because they’ve begun to collect Social Security, have more interest and dividends being paid to them from their portfolios due to their allocation being more conservative, and are also required to take RMDs or required minimum distributions from their 401(k) or IRA, which will subsequently be taxed. With a little bit of planning, you can save yourself potentially thousands of dollars in taxes.
Light: What’s a really simple way to decrease taxes as it relates to Social Security?
Nelson: Conventional wisdom states that retirement and Social Security go hand in hand. As a result, some people automatically file to take Social Security even though they have retirement income from other sources, be it a pension, annuity or real estate. A very simple way to decrease your taxes is to delay paying Social Security for as long as you can….Read more>>