When you think of yourself in the future, at the retirement
age, how do you imagine yourself? If you’re like most people, then you probably
see yourself sitting on a beach somewhere sipping a cool drink or maybe traveling
the world. In any case, you probably do not like to imagine yourself paying
through the nose for taxes.
Sadly, though, paying a lot of taxes in retirement is a
reality for many people. Fortunately, however,, if you plan properly and
adequately for retirement, you can avoid having this become your reality.
Some tips for not getting drowned by taxes in retirement
include:
l
Have diversity in your retirement accounts. Aim
to have both tax-deferred accounts (think 401(k)s and IRAs), as well as after-tax
savings accounts in order to receive maximum tax breaks where applicable and
benefits in general.
l
Vary your itemized deductions each year or even
every other year.
l
Vary your income regularly
Plan Ahead
In addition to following the useful tips listed above, be
sure to do some ahead-of-time tax planning where you can. Ideally, this should
include both long range tax planning and annual tax planning.
With long range tax planning, you can easily come up with a
plan as to how much you can withdraw from various accounts over the years, as
well as what you can expect from benefits.
Annual tax planning should be focused on just the upcoming
year but will give you a chance to factor ever-changing tax rates, deductions,
and other variable information into your long range planning for improved
accuracy.
Get Help from a Pro
In addition to following the tips presented here, bear in
mind that absolutely nothing compares to getting expert professional help from
a financial adviser, planner, or other finance professional. These pros will
know all the ins and outs of the industry and will be able to use their
knowledge, coupled with your own and your own efforts, to help you pay as few
taxes as possible in the “golden years” of your life.