Have you ever wondered what happens to your retirement account once you retire? On today’s episode, we’ll discuss this along with how you can avoid unnecessary penalties and not get killed in taxes.
2 problems to avoid with retirement accounts:
- Getting killed in taxes
Know the rules:
- Before age 59.5 (10% early withdraw penalty, Rule of 55, 72t Distribution (Substantially Equal Periodic Payments))
- After 59.5 (RMDs at 72)
Getting killed in taxes:
- Withdrawals from pre-tax retirement accounts, get taxed at highest rates
- Could push you into higher tax brackets
- Could increase your Medicare premiums
Have a strategy:
- Have you planned through your different income streams, so that you don’t get hit with a big tax bill come April 15th?
- Maybe you delay taking social security and only take distribution from your retirement account?
- Maybe you take social security and delay distributions?
- Do you plan to do Roth conversions now so your forced RMD amounts aren’t as much, saving you in taxes?
- Do you watch out for the limits on the Medicare premiums so you don’t get slapped with a bigger monthly expense?
Listen on Apple, Google, or Spotify.