Summary

The text discusses the importance of managing taxable retirement accounts before reaching age 73 to avoid being forced into a higher tax bracket due to required minimum distributions (RMDs).

Abstract

Before reaching age 73, retirees have the freedom to choose their tax bracket by managing their taxable retirement accounts. However, once RMDs start, retirees are forced to take systematic, increasing withdrawals every year. This can potentially push them into a higher tax bracket and trigger unnecessary taxes on social security. The text suggests strategically spending down taxable assets before collecting social security and RMDs, and considering Roth conversions to prevent additional income from forcing one into higher tax brackets.

Opinions

The author believes that retirees have a lot of freedom in retirement before age 73 as they can choose their tax bracket.
The author warns that mismanaging taxable retirement accounts can force retirees into a higher tax bracket in the later years of their retirement.
The author suggests that the best way to prevent RMDs from forcing one into a higher tax bracket and triggering unnecessary taxes on social security is to strategically spend down taxable assets before collecting social security and RMDs.
The author also recommends Roth conversions to eliminate the risk of additional income forcing one into higher tax brackets.
The author emphasizes the importance of planning ahead as one knows how much they will have to withdraw due to RMDs.
The author believes that Roth conversions will not be considered provisional income and will not affect the taxes on social security.
The author encourages readers to connect with them and access their resources for more information.

Choosing Your Tax Bracket in Retirement Versus Being Forced

(don’t forget to checkout the video too)

Before age 73 you have a lot of freedom in retirement.

That’s because you have the ability to CHOOSE which tax bracket you are in…😎

However, there is a point where that choice is taken from you.

That’s when your required minimum distributions (RMDs) kick in…

If these are managed correctly, you can still achieve a completely tax-free retirement.

But, if mismanaged, you could force yourself into a much higher tax bracket in the later years of your retirement!

The problem that many people create is that they have too large of a balance in their taxable retirement accounts at age 73.

This is the point where you are FORCED to start taking systematic, increasing withdrawals, every year…

But, why⁉️

So the government can collect the tax money that you owe them…

But, since we know how much how much we are going to have to withdrawal, we can plan accordingly…

And our goal is simple:

Prevent our RMDs from forcing us into a higher tax bracket AND….

Prevent our RMDs from triggering an unnecessary tax on our social security.

The best way to do this is to strategically spend down your taxable assets before collecting social security and before RMDs start.

You can also be doing Roth conversions which will completely eliminate the risk of additional income forcing you into higher tax brackets as well.

It also will not be considered provisional income and will therefore not effect the taxes on social security…

Let’s chat 💬😎

Connect With Me & Access All My Resources Here

Enjoy this blog? You’ll probably enjoy this one as well: 4 Reasons to Have Some Tax-free (Roth) Money in Retirement

To your success,

Matt