AN IMPORTANT STEP:
WHY TAX-PLANNING IS CRUCIAL
The Internal Revenue Code contains a maze of complex rules that can apply to the typical retiree’s retirement assets and income sources. For example, exceeding certain income thresholds can increase the amount of social security that is subject to tax, as well as increase Medicare premiums. There are also new surtaxes tied to net investment income, phaseouts for itemized deductions and a graduated capital gains tax bracket that imposes higher capital gains tax rates depending on what tax bracket you’re in. Each of these can serve to dramatically increase a retiree’s effective income tax rate. They also serve as excellent planning opportunities. Over time, this can have a dramatic impact on how long your money lasts.