INCOME GENERATION

Once your focus shifts from accumulating wealth to incorporating retirement savings into your income flow, you may want to revisit and recalibrate how you’re using that income. Something to remember is that retirement goals are not just financial. You’ll want to check that you’re living the retirement you want.  

Tax strategies require careful professional help to calculate, set up and convert, but more importantly to understand contribution limits, income limits, pro-rata pre-tax versus after-tax contributions, and changes for every tax year. Managing income sources to avoid triggering a higher tax bracket is paramount to how we plan and invest for you.

Depending on the source, the IRS treats income differently.

Tax-free income 

Bonds issued by state and local municipality are often granted a tax-free status. These bonds usually pay a lower interest rate than taxable bonds. Depending on your tax bracket these lower yielding bonds may provide more after-tax income than higher yielding taxable bonds.

Income taxed at capital gains rate 

Most stock dividends qualify to be taxed at the capital gains rate. Capital gains tax rates are generally lower than the tax rates on ordinary income.

Income taxed at ordinary income rates 

Interest income and IRA withdrawals, in most cases, get taxed as ordinary income. 

We will recommend how you blend your income from your various IRAs. We help you weigh the tax impact not only on your current income, but on future income tax considerations as well. Not only can this be more tax efficient, but it could help stretch your assets out for a longer period.