Tag: Tax Savings

Achieve a Purpose-Driven Retirement

Posted on | by debrabrede

If someone could convey in a few hundred or even a thousand words what constitutes—and then, how to plan toward—one’s vision of a purpose-driven retirement, they’ve have done it a long time ago. There is so much involved; so much to accommodate. Not least, what “purpose” means to the reader.

It may have taken me 40,000 words (more or less), but put it on your nightstand or side table for a few days, and I sincerely believe you’ll agree that “You’re Retired. Now What?” comes pretty close to the mark.

As you surely know, Rule Number One of success in business is knowing who you serve best, and then catering to that market segment’s needs. I have spent over 30 years building a practice that best serves high-net-worth individuals. I apply an absolute single-mindedness of focus to the goal of protecting and growing my clients’ wealth—which, if they aim to remain high-net-worth individuals (and leave a lasting legacy behind), should be their topmost objective. Especially in the years approaching and during retirement.

It’s the subtitle of “You’re Retired. Now What?” that captures what I actually provide: “Strategic Wealth Management for Purpose-Driven Retirees.”

Successful people succeed for a reason: They always have a purpose to fulfill.

If you think retirement will be endless days of golf or fishing or travel or all those other things you love doing so much on the weekends and while on vacation, let me disabuse you of that notion quickly. Without a purpose, you’ll be bored in a year, max. A couple of my clients have gone maybe 18 months. But the old pangs for actually getting something meaningful done inevitably return. “You’re Retired, Now What?” can help you find and fulfill your true purpose for retirement.

I have worked hard to make “You’re Retired, Now What?” a valuable, down-to-earth resource for purpose-driven people who want to leave something meaningful in their wake. 

Tax

Five Tax Advantages of Retirement

Posted on | by debrabrede

Careful tax planning can provide retirees with significant opportunities for keeping more of their money. Here are five examples. (Consult a tax advisor to determine your best options.)

#1: Retirement Plan Contributions

People over 50 enjoy higher contribution limits for traditional and Roth IRAs, and 401(k)s. If you’re married, own an IRA, and your spouse is still working, he or she can contribute to your plan, in addition to their own.

#2: Business Expenses

Whether you consult for your old company in retirement or start a new one, remember: businesses, both full- and part-time, are great sources of tax deductions. You can reduce your business’s income by the reasonable expenses that come with running it, including business travel, equipment (like computers), and office space. If your venture loses money, you can often deduct the loss from other sources of income.

#3: Use RMDs for Tax Payments

Assuming your post-career business is profitable, you’ll have to pay tax on that income.

Instead of calculating and sending estimated tax payments to the IRS during the year—a requirement for the vast majority of the self-employed—people who are taking required minimum distributions (RMDs) from traditional IRAs can wait until December to take the distribution and ask their IRA administrator to hold back extra funds for taxes.

Tax money withheld from IRA distributions is considered “paid tax” throughout the year, even if done at year-end. This allows you to dodge the requirement (punishable with penalties if broken) to make estimated tax payments on self-employment income throughout the year—provided your RMD covers your total tax liability.

Of course, be sure you won’t need the RMD to meet living expenses during the year!

#4: A Vacation Home

If you sold recently your empty nest and moved to a vacation home, you might qualify for two windfalls within a few short years.

If you lived in the old homestead for at least two of the last five years you owned it, your profits on its sale were tax-free (up to some generous limits).

When you move into a vacation home you’ve owned for 25 years or more, and designate it your principal residence for at least two years, you can keep some of the profit on its sale as well, under IRS rules. (Consult your tax advisor to see if you qualify.)

#5: Give It Away

Many retirees use the gift tax exemption to help keep their tax hit as low as possible, especially those likely to owe estate taxes when they die. The gift tax exemption allows you to give up to $15,000 per year (at this writing) to as many individuals as you like—up to a lifetime total of $11.4 million. Married couples can give twice that amount.

Don’t let your generosity end with family and friends. By gifting items to a qualified charity—a car, boat, or plane, for example (cash donations are treated differently)—you can deduct the gross proceeds realized by the charity upon its sale of the item (provided you valued it at $500 or more when signing over the title). Note that such contributions are only deductible (under IRS rules) when you itemize. Remember, grouping contributions within a calendar year might help you reach the itemization threshold.