The 3 Best Ways to Fully Leverage Your Taxable Retirement Dollars

(don’t forget to checkout the video of this blog too)

Your taxable retirement dollars aren’t often thought of as your most valuable dollars in retirement…

But they can be‼️

Here are the 3 best ways to fully leverage these taxable retirement dollars:

✅ Use Taxable Dollars As Your Primary* Source of Retirement Income

*It’s very likely Social Security will be your “real” primary source of retirement income…

But supplemental retirement income should primarily come from your TAXABLE retirement accounts (accounts like 401k’s, IRA’s, 403b’s, etc.)

The main advantage of these accounts is a tax-deduction you receive in your peak earning years (this reduces your tax liability in the years that you need it most)!

But, money inside of your taxable retirement accounts also grows tax-deferred until you start taking retirement income.

These dollars can be very advantageous for creating sources of guaranteed, lifetime income to supplement your Social Security income.

That’s because you can control your tax bracket in retirement by strategically withdrawal money in the lowest tax brackets that make sense for you.

And you can likely take out a LOT more income at a lower tax rate than you think (especially since not all Social Security income will be considered taxable income in retirement)!

✅ Start Taking Withdrawals Early

While leaving money in your 401k’s & IRA’s prevents a tax bill now…

It can create a BIG tax problem LATER.

That’s why it usually makes sense to start withdrawing at least some income (from your taxable assets) as early as possible.

This can significantly reduce the risk of a large, unexpected tax bill showing up in the later years of retirement.

✅ Spend This Money Entirely and/or Reposition for a Favorable Tax-free Transfer

The IRS has changed the rules on how inherited retirement accounts are treated.

And it’s not good for anyone who inherits this type of money.

Now, an inheritor is forced to liquidate these accounts completely in 10 years…

AND pay all the taxes.⚠️

That’s why this tends to be the WORST money to leave to your loved ones.

To combat transferring a large tax bill to your loved ones you can prioritize the spending of your taxable money entirely (in retirement)….

OR you can slowly (or quickly) begin positioning this money effectively for a tax-free wealth transfer.

This can be done by either executing Roth Conversions or by funneling money into a life insurance contract.

Both of which ensure a 100% tax-free transfer of wealth when you pass.👏

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