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Tax Planning For A Financially Secure Retirement

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Saturday, July 31, 2010 | Posted in Featured

Tax Planning For A Financially Secure Retirement

The one thing that is likely to be important, but overlooked, during the entire process of your pre-retirement planning, is tax-planning for a financially secure retirement. It is easy to save on the taxes and to enhance your total retirement income, simply by keeping informed, doing a little judicious research, and taking the right steps.

  • Consider a rollover of retirement funds from an IRA to a Roth IRA
  • Defer income or accelerate deductions to qualify for the Roth IRA conversion
  • Consider a rollover employer stocks and bonds to IRA
  • Calculate the tax payable on lump sum distribution from the retirement plan
  • Maximize tax deferral through various distribution methods for your IRA and annuities
  • Take the required minimum distributions from your IRA in lowest tax years
  • Avoid penalty tax on the distributions from your IRAs
  • Use disability insurance premiums to maximize the non-taxable part of disability benefits
  • Create separate IRA accounts for beneficiaries to maximize tax deferrals
  • Reduces or eliminate federal estate taxes on IRA benefits
  • Use charitable beneficiary designations to eliminate taxes on IRA benefits

The various strategies for tax-planning for a financially secure retirement, some of which are explored below, are fairly simple, and can make a substantial difference to your finances in your retirement. For example:

You can avail quite a solid long-term tax saving if you transfer funds from a traditional IRA to a Roth IRA. You can save on taxes because you are in a lower tax bracket while making the transfer than the point where you would withdraw the funds. You can also transfer high-income assets to the Roth IRA, or pass your IRA funds to your heirs if there is a lot remaining after you die.

In addition, you can gain long-term tax savings due to tax rate differential. Consider making the transfer from IRA to Roth IRA in the particular year when you have a tax loss or fit into a low tax bracket, for some reason. Although the amount transferred, or a part of it, is taxable income, it can be offset against your tax losses.

Alternatively, you may have to pay taxes on the funds you transfer at lower tax rates than those that will apply to future distributions from the IRA, giving you substantial long-term tax savings using the tax rate differential and the tax-free distribution of earnings from the Roth IRA.

Long-term tax savings can also be accumulated by transferring high income assets. Regular IRAs generally have assets that may have a high income potential. Transfer those assets to the Roth IRAs. Even if you have to borrow money to pay the tax on the transfer, the rate of earnings from the transferred assets is higher, than the interest rate on your loan, so there will be a substantial long-term tax saving.

Borrowing from a home equity line of credit can add to your savings, since it qualifies for deductions on the interest you pay on the loan.

You can also use low-yielding liquid funds for paying the tax on the transfer to the Roth IRA.

If you don’t use your IRA funds during retirement, transfer them to a Roth IRA, before your heirs inherit it. The advantage would come from the fact that Roth IRAs do not have to make distributions during your lifetime, while traditional IRAs make minimum distributions when you reach the age of 70 ½. Transferring to a Roth IRA avoids the tax you would pay on distributions.

Do some research, get some help, and take the right steps for tax-planning for a financially secure retirement.

For your free consultation, contact Mike Habib at 1-877-95-IRAMD (877-954-7263)

Tax planning, IRA Help, retirement planning, financial planning in LOS ANGELES COUNTY:

Acton - Agoura Hills - Alhambra - Altadena - Arcadia - Artesia - Avalon - Azusa - Baldwin Park - Bell - Bellflower - Beverly Hills - Burbank - Calabasas - Canoga Park - Canyon Country - Carson - Castaic - Cerritos - Chatsworth – City of Industry -Claremont - Compton - Covina - Culver City - Diamond Bar - Downey - Duarte - El Monte – South, - El Segundo - Encino - Gardena - Glendale - Granada Hills - Hacienda Heights – Harbor City - Hawaiian Gardens - Hawthorne - Hermosa Beach - Huntington Park - Inglewood - LA Los Angeles - La Canada Flintridge - La Crescenta - La Habra Heights - La Mirada - La Puente – La Verne - Lawndale – Long Beach – Lynwood - Malibu - Manhattan Beach - Marina del Rey - Maywood - Mission Hills - Monrovia - Montebello – Monterey Park - Montrose - Newhall - North Hills - North Hollywood - Northridge - Norwalk - Pacific Palisades – Pacoima - Palmdale - Palos Verdes - Panorama City - Paramount - Pasadena - Pearblossom - Pico Rivera - Playa del Rey – Playa Vista - Pomona - Rancho P.V. - Redondo Beach - Reseda - Rosemead - Rowland Heights - San Dimas - San Fernando – San Gabriel - San Marino - San Pedro - Santa Clarita - Santa Fe Springs - Santa Monica - Sherman Oaks - Sierra Madre – Signal Hill - South Gate - South Pasadena - Stevenson Ranch - Studio City - Sun Valley - Sunland - Sylmar - Tarzana – Temple City - Topanga - Torrance - Valencia - Valley Village - Van Nuys - Venice - Walnut - West Covina - West Hills – West Hollywood/LA Los Angeles - Westlake Village - Whittier - Wilmington - Winnetka - Woodland Hills .

Tax planning, IRA Help, retirement planning, financial planning in ORANGE COUNTY:

Aliso Viejo – Anaheim – Anaheim Hills – Balboa Island – Brea – Buena Park - Capistrano Beach – Corona del Mar – Costa Mesa – Cypress – Dana Point – Foothill Ranch - Fountain Valley – Fullerton – Garden Grove – Huntington Beach – Irvine – La Habra – La Palma - Ladera Ranch – Laguna Beach – Laguna Hills – Laguna Niguel – Laguna Woods – Lake Forest - Los Alamitos – Midway City – Mission Viejo – Newport Beach – Newport Coast – Orange – Placentia – Rancho St. Margarita – San Clemente – San Juan Capistrano – Santa Ana – Seal Beach – Silverado – Stanton – Sunset Beach – Surfside – Trabuco Canyon – Tustin – Villa Park – Westminster – Yorba Linda .

Tax planning, IRA Help, retirement planning, financial planning in RIVERSIDE COUNTY :

Aguanga – Anza – Banning – Beaumont – Blythe – Cabazon – Calimesa – Canyon Lake – Cathedral City – Coachella – Corona – Desert Center – Desert Hot Springs – Hemet – Homeland – Idyllwild, Indian Wells – Indio – La Quinta – Lake Elsinore – Mecca – Menifee – Mira Loma – Moreno Valley, Mountain Center – Murrieta – Norco – North Palm Springs – Nuevo, Palm Desert – Palm Springs, Perris – Rancho Mirage – Riverside – San Jacinto – Sun City – Temecula – Thermal - Thousand Palms – White Water – Wildomar – Winchester .

Tax planning, IRA Help, retirement planning, financial planning in SAN BERNARDINO COUNTY :

Adelanto – Angeles Oaks – Apple Valley – Barstow – Big Bear City – Big Bear Lake – Bloomington, Blue Jay – Cedar Glen – Cedarpines Park – Chino – Chino Hills – Colton – Crest Park – Crestline, Daggett – Fawnskin – Fontana – Forest Falls – Grand Terrace – Green Valley Lake – Helendale – Hesperia – Highlands – Hinkley – Joshua Tree – Lake Arrowhead – Landers – Loma Linda - Lucerne Valley – Lytle Creek – Mentone – Montclair – Morongo Valley – Needles - Newberry Springs – Ontario – Oro Grande – Phelan – Pinon Hills – Pioneertown - Rancho Cucamonga – Redlands – Redlands – Rialto – Rim Forest – Running Springs - San Bernardino – Sky Forest – Sugarloaf – Trona – Twentynine Palms – Twin Peaks – Upland, Victorville – Wrightwood – Yermo – Yucaipa – Yucca Valley .

Tax planning, IRA Help, retirement planning, financial planning in SAN DIEGO COUNTY :

Alpine – Bay Park – Bonita – Bonsall – Borrego Springs – Boulevard – Campo – Carlsbad - Chula Vista – Clairemont – College Grove – Coronado - Del Mar – Descanso – Downtown – Dulzura, East San Diego – El Cajon – Encanto – Encinitas – Escondido – Fallbrook – Grantville – Hillcrest, Imperial Beach – Jacumba – Jamul – Julian – La Jolla – La Mesa – Lakeside – Lemon Grove - Linda Vista – Logan Heights – Mission Village – National City – Normal Heights – North City West, North Park – Ocean Beach – Oceanside – Pacific Beach – Palomar Mtn – Paradise Hills - Pauma Valley – Pine Valley – Point Loma – Potrero – Poway – Ramona – Ranchita - Rancho Bernardo – Rancho Penasquitos – Rancho Santa Fe - San Carlos – San Diego - San Marcos – San Ysidro – Santa Ysabel – Santee – Scripps Ranch – Solana Beach - South San Diego – Spring Valley - Spring Valley – Tierrasanta – University City – Valley Center, Vista – Warner Springs .

Tax planning, IRA Help, retirement planning, financial planning in VENTURA COUNTY :

Bell Canyon – Camarillo – Fillmore – Moorpark – Newbury Park – Oak Park – Oak View – Ojai Oxnard – Piru – Port Hueneme – Santa Paula – Simi Valley – Somis – Thousand Oaks – Ventura Westlake Village .

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