Retirement And Tax Game Plan

Time it wisely
By choosing the right time to start taking your money out, and the right amount to take out, you can escape racking up those huge tax bills, plus penalties, which stem from withdrawing too little, too early, or too late.

Insure It
With a properly set up life insurance policy, you can make sure the funds are there for your beneficiaries to pay any taxes on your retirement distribution so that assets will stay intact and growing. You’ll have to spend a few bucks for the premiums, but it will be worth it. Spending the money now not only prevents your life savings from being virtually wiped out, but can help keep those assets compounding into a fortune.

Stretch It
Keep your assets intact and growing for decades by selecting the right beneficiary- a child or grandchild with 40 or more years of life expectancy ahead. Beneficiaries with long life expectancies can stretch distributions out for decades; by withdrawing the minimum each year, your bequest can build and build. Your choices must be documented on beneficiary forms that your beneficiaries must actually be able to find. Scan all important documents onto a disk and keep them in a safe place with your advisor, CPA, or attorney, or all of them.

Roth It
Contribute or convert your current traditional IRA to a Roth IRA, if you’re able; it’s the deal of the century that allows you to stockpile cash in your retirement account income-tax-free for the benefit of generations in your family. Thanks to a change in the tax law, 2010 everyone qualifies to convert all or part of their traditional IRA to a Roth IRA, since all restrictions are eliminated permanently.

Avoid the Death Tax Trap
Create a perfect IRA/estate plan that will curb the taxman’s appetite; then save your beneficiaries even more with a little publicized item called the IRD (income respect of a decedent) deduction. Nothing is certain but death and taxes, neither of which is particularly pleasant, although these steps will diminish the latter at least where your retirement savings are concerned.

GAMEPLAN DOWNLOADS
-Addressing Tax Changes
-Five most important estate planning documents
-Understanding beneficiary designations