You have worked all your life and now nearing your retirement. Now is the time to enjoy the later inning of your life with a steady flow of income without the burden of taxes so that you can have a great leisure time ahead without having to toil hard.
As soon as you reach the retirement age, you realise that you won’t be able to count on deductions that helped you lower your deductions during your working days. So, this is the time plan ahead and plan right to enjoy steady income that is tax-free. But how can you achieve that? Here, we provide you some key tips on tax free planning strategies for your retirement income that you must start acting on early in your life:
• Health-Saving
A health-saving account could provide you with several benefits once you retire. If your employer offers such account facilitation, then you should definitely look into this. Create the account and start investing in it that will provide you with long-term gains. As HAS contributions are pre-tax money. What you do not use for medical purposes, becomes an IRA at the end of the year.
• Roth IRA
One of the most popular retirement investment option, Roth IRA contributions offer you tax free income stream. You pay the taxes and let the money grow for five years. Then it is tax free. There is no impact the Social Security taxes and your beneficiaries also get tax-free inheritance. You can contribute annually if you are under the income threshold. There is no limit to how much you can convert.
Roth 401(k)
While 401(k) plans are highly popular, these are not free from tax conditions. However, some employers started introducing Roth option in their 401(k) plans, which means that the money is put into these after-tax and you can withdraw from them after age of 59 years and half tax-free. The 401(k)s can also be converted to tax free income by Be Your Own Beneficiary Life Insurance.
Apart from these plans, there are several others you can consider like After-Tax 401(k) Contribution, Cash Value Life Insurance and more. All of these carry certain conditions which must be checked accordingly with the employer and with a professional financial consultant when looking for tax-free planning strategies.
As soon as you reach the retirement age, you realise that you won’t be able to count on deductions that helped you lower your deductions during your working days. So, this is the time plan ahead and plan right to enjoy steady income that is tax-free. But how can you achieve that? Here, we provide you some key tips on tax free planning strategies for your retirement income that you must start acting on early in your life:
• Health-Saving
A health-saving account could provide you with several benefits once you retire. If your employer offers such account facilitation, then you should definitely look into this. Create the account and start investing in it that will provide you with long-term gains. As HAS contributions are pre-tax money. What you do not use for medical purposes, becomes an IRA at the end of the year.
• Roth IRA
One of the most popular retirement investment option, Roth IRA contributions offer you tax free income stream. You pay the taxes and let the money grow for five years. Then it is tax free. There is no impact the Social Security taxes and your beneficiaries also get tax-free inheritance. You can contribute annually if you are under the income threshold. There is no limit to how much you can convert.
Roth 401(k)
While 401(k) plans are highly popular, these are not free from tax conditions. However, some employers started introducing Roth option in their 401(k) plans, which means that the money is put into these after-tax and you can withdraw from them after age of 59 years and half tax-free. The 401(k)s can also be converted to tax free income by Be Your Own Beneficiary Life Insurance.
Apart from these plans, there are several others you can consider like After-Tax 401(k) Contribution, Cash Value Life Insurance and more. All of these carry certain conditions which must be checked accordingly with the employer and with a professional financial consultant when looking for tax-free planning strategies.
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