Age 60 with $2,000,000 - How do we reduce our taxes in retirement? (5 Ways Explained!)

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So you’re 60 years old and have been able to save $2 million for retirement, but you’re wondering how much of that money you’ll be able to keep after taxes. People ask us all the time how they can reduce the amount they’ll have to pay to the IRS over their lifetime.
In this episode, we’ll take you through a sample case with a hypothetical couple in a similar position and show five ways in which they could potentially reduce taxes in retirement. This will allow them to keep more of their hard-earned money in their pockets, which will give them more flexibility in retirement.
Here’s some of what we discuss in this episode:
0:00 - Intro
0:42 - Sample case details
5:40 - Tax projections
13:20 - Strategy #1 - Contribute to a Roth
14:38 - Strategy #2 - Roth Conversions
18:08 - Strategy #3 - Asset Location
20:51 - Strategy #4 - Delay Social Security
22:23 - Strategy #5 - Donor Advised Fund
#taxplanning #retirementplanning
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Опубликовано:

7 авг 2024

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Комментарии : 5

@SierensFinancialGroup 3 месяца назад

PLEASE NOTE: Required Minimum Distribution (RMD) Age mentioned was incorrect. Their RMD age would be Age 75 based on their date of birth and current rules (2024).

@MB-M-zr7vr 4 дня назад

Thanks for the advice and info. Just wondering whether rental income would be considered as taxable income after retirement? 🙏 Thanks

@PorscheSpeedster-kz6nc 3 месяца назад

Another item I think is missed, understated, or just not clearly shown is interest, dividend and capital gain income (especially when 65-70). I would be interested in what this will be when taking from the taxable account to support their living costs. I agree that starting to contribute to Roth 401k now is important. Overall, nice job on the content and explanation of these principles.

@thadpolk3953 3 месяца назад

Super helpful video, thanks so much! One question: Your analysis assumed that this couple would need to start taking RMDs when they turn 72 or 73, but didn't the Secure Act 2.0 raise the age that this couple would need to take RMDs? In particular, I believe for someone born in 1964, RMDs would not start until age 75. Correct? Thanks again for the very helpful information.

@jerrylabat550 3 месяца назад

You got several items incorrect in your video... Their RMD age is 75, they were born in 1964. You focused on marginal tax rate during retirement instead of effective tax rate, it should be effective tax rate. So your first point about paying the tax now at 22% and not doing a 401k contribution because their future marginal rate would be 25% is wrong. Their effective tax rate will still be below 22%. When you pay into a 401k you use marginal tax rate because it is deducted at basically your top rate, when you take it out it as at your effective tax rate. You also showed their top marginal tax rates, but if you were solving this for least amount of taxes paid, you would use effective tax rate focused on the lowest average effective tax rate over their lifetime. If that line was flat, you achieved your goal. There is no question Roth conversions would be an integral part of this.