Financial stability is every retiree’s goal. But just because you are not taking home a paycheck doesn’t mean that you are free from paying your taxes. With smart planning, strategic money moves, and timing, you can avoid huge tax bills. In retirement, the crucial steps for financial preparation should be taken a couple of years before the ‘long holiday.’ Here are some steps to take:
 |
| Image source: usnews.com |
1. Consider opening a Roth IRA account, besides 401(k) or IRA. Here, your money grows tax-free and there are no levies on qualified withdrawals. Married couples who earn less than $193,000 qualify for a Roth IRA.
2. Use your health savings account as your retirement account. This is especially true if you are investing more in your health savings. In this case, your money grows tax free, same as the Roth account. Also, withdrawals aren’t taxed as long as they’re used for qualified health expenses.
3. Donate to your favorite charity. This is the largest and most common tax deduction strategy most financial planners suggest. While legally cutting on your levies, you are also making a difference in the world by supporting the cause of your charity.
As soon as you retire, the most crucial aspect to look into is making a solid withdrawal plan. You can start making withdrawals from your tax-deferred accounts early in retirement. This means that you are paying less taxes because you are in a lower tax bracket. You can also make your Roth account as a contingency fund.
 |
| Image source: usnews.com |
Springer Financial Advisors help retirees equip themselves with the best retirement plan that will help them live conveniently despite the ever-changing economic situation. For more information, visit this website.
