Earlier this month, I was included in a Financial Planning magazine article, written by reporter Martha White, which detailed how working part-time in retirement can alter a client’s overall financial plan. The piece covered elements such as Social Security, health care costs, portfolio changes, and the impact that working in retirement can have on taxes.
Upon entering retirement, it is typical that an individual or couple drops down one tax bracket. However, I explain that for those that choose to work during their golden years, if their income is higher, the taxes they pay will therefore be higher.
So, what strategies can you use to lessen your tax hit if you choose to work during retirement?
To read the full article for more insight, click here—Financial Planning, November 2013 Issue.
Upon entering retirement, it is typical that an individual or couple drops down one tax bracket. However, I explain that for those that choose to work during their golden years, if their income is higher, the taxes they pay will therefore be higher.
So, what strategies can you use to lessen your tax hit if you choose to work during retirement?
- Take advantage of all qualified plans:
- Maximize 401(k) contributions
- Check to see if you qualify to get a tax reduction on an IRA
- Don’t convert to a Roth IRA if you are close to retirement and/or in a tax bracket which is 25 percent or higher
- Consider an annuity
To read the full article for more insight, click here—Financial Planning, November 2013 Issue.
