Whether you’re just easing out of the workforce or you’ve been in retirement for a few years now, making the right financial moves is critical. If you’re working with an advisor or taking a look at your finances yourself, one central goal during retirement is protecting your wealth from unnecessary taxes.
In many cases, there are ways to avoid owing more taxes - but usually, this requires proactive action beyond tax season. Below we’ll explain four tips you can utilize throughout the year to help minimize your tax obligations in retirement.
By Roy Larsen, CFP®, AAMS®
Still time for a 2018 IRA: Since we are talking about deductions, let's look at the income limits first. If you are covered by a retirement plan at work and have Modified Adjusted Gross Income of $63,000 or less as a single filer, or $101,000 or less, filing jointly, it is fully deductible. Up to $73,000 MAGI for singles and $121,000 for joint filers you can still claim a partial deduction. You must at least have enough earned income to support your contribution up to the limits of $5500 for an individual and $11,000 per couple. If you are age 50 or older, add another $1,000 to your maximum.
Roy Larsen is a Certified Financial Planner™ practitioner and Fee Only Wealth Manager who resides outside of Atlanta, Georgia.
Roy's Financial Blog contains articles on the multiple and complex issues of living successfully in Retirement.