This week there are two articles on lower taxes in retirement that I will link to…
Lower Taxes with Simplicity
The first addresses a topic that is often overlooked when families invest their money…that topic is simplicity. In this article, financial blogger Ben Carlson, addresses the desire – or need – to make investing complex specifically for families with higher net worths.
What I like about the article is that the author encourages simplicity in investing vehicles.
Adding my own two cents — It is easy to feel as if more (funds, efts, securities) will yield better results for the investor…quite often however, the opposite is true if for no other reason than the forced realization of gains when rebalancing in taxable accounts. I would have liked to see the author touch on the inefficiencies, from a tax perspective, of rebalancing and the opportunity that global or core funds provide the investor to minimize potential capital gains.
For the tax savvy investor, when fewer and broader funds are used, the rebalancing happens within a tax advantaged wrapper and realized capital gains are minimized.
Click here to see the full article: http://awealthofcommonsense.com/2018/06/too-big-to-be-simple/
Lower Taxes on Your Social Security Benefits
The second article this week also touches on taxes and specifically how they can increase from a percentage perspective for investors in retirement…even if their income has reduced.
Tax awareness is something that all investors should focus on as after-tax, realized returns are the only thing that really matters to a family – as they are the only thing that you can eat!
While the author focuses on the taxability of Social Security benefits, that is just one aspect of reducing taxes as you spend-down your assets in your retirement years. In reality, many of your best financial planning opportunities are between the year you retire, and the year you are forced to start taking distributions from qualified retirement accounts. A few simple adjustments can reduce a family’s taxes significantly over the duration of their retirement years.
Click here to read the entire article: https://blogs.wsj.com/experts/2018/05/07/how-retirees-can-reduce-their-marginal-tax-rates/
Have a good week!