25 Ways We Help Clients Build Better Relationships with Their Money
17.) We evaluate tax planning opportunities both before and after retirement.
When clients first come to us at least 5 years before they retire, we are often able to take advantage of a variety of tax planning strategies to save our clients’ money. There are a multitude of useful financial tools Arrivity financial planners have at their disposal when clients come to us before the biggest tax-planning window in each person’s life. This window of “golden opportunity” occurs when clients have years of ‘low’ or ‘no’ forced income. This most often occurs in the years between when a client stops receiving income and when they start receiving their social security benefit or must begin taking Required Minimum Distributions (RMDs). Any year with low or no income provides a potential opportunity to use proactive tax planning to decrease future taxes.
Before Retirement: we can help clients identify which accounts are best to invest in between traditional IRAs, Roth IRAs, employer retirement accounts, taxable brokerage accounts, nondeductible IRAs/401(k)s or alternative investments. We can guide clients on ensuring they have the right mix of taxable, tax-deferred, and tax-free investment accounts so they will have maximum flexibility on their withdrawal strategies once they stop working. We can review summary plan descriptions to see if mega backdoor Roth is a potential option, or advise on whether a backdoor Roth IRA can be safely completed without having to pay extra or double taxes under the pro-rata rule.
After Retirement: we can analyze and strategize which types of accounts it is optimal to withdraw from first (e.g. withdraw from your taxable, then tax-deferred, then tax-free accounts, in that order). We also advise our clients on whether it is preferrable to perform IRA distributions, Roth IRA conversions, or harvest capital gains and losses in any given year to minimize their lifetime taxes and ultimately save a significant amount of money.
Please contact us at: Contact Arrivity or 206.217.2583 or info@arrivity.com if we can assist you or someone you know with financial planning.
Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.