Why You Might Have to Wait Until Retirement to Position Yourself for a Tax-free Retirement

(don’t forget to checkout the video too)

In an ideal world, every dollar we have would be completely tax-free in retirement.

However, that’s just not the reality for most people.

Most people have to reposition some of their taxable retirement assets so that they can create a tax-free retirement.

But repositioning assets into tax-free buckets is a “taxable” event.

So a lot of soon-to-be retirees simply make too much money to even consider doing a Roth conversion during their working years.

I work with a lot of people who want to start the process, but it simply doesn’t make sense if you’re in the highest tax bracket. 😕

For people like that, they actually have to wait until they retire to start this process.

But wait, why⁉️

Because that’s when their income drops to a level where a conversion makes sense. 🫣

Right now, for married couples, you can do a conversion with up to $363,000 per year at a 24% marginal tax bracket (which ends up being about an 18% overall effective rate).

This is why it’s very valuable to work with a sharp CPA or tax strategist who can help you reduce your taxable income, find additional tax deductions, AND can help increase your capacity to reposition money into a tax-free bucket in retirement.

When you are executing this “repositioning of money”, it helps a LOT if have another asset that you can take tax-free withdrawals from while you do this…

This might be an investment account or even a life insurance contract with significant cash value.

Either way, it helps to have accessible money that you can draw on that is not considered “income”…

…this allows you to move more money into a tax-free environment effectively. 😎

And remember, if this is all done correctly, you can even prevent your social security from being taxed as well. 😏

Let’s Chat 💬😎