It’s rare that your financial professional ever looks at your tax return or your CPA knows how much money you have in your retirement accounts. Why is that? Prior to age 70 1/2, shouldn’t your CPA know your retirement account balance (even if you aren’t taking distributions) so they can calculate your future Required Minimum Distribution? Knowing this could provide insight into your investment strategy. Shouldn’t your Broker know how much of your Social Security benefits will be taxed so they can provide you with a tax efficient retirement income plan?

It’s important to note the difference between tax preparation and tax strategy. We are not CPAs and do not give legal tax advice or tax preparation. We recommend our clients confirm tax strategies with a legal tax professional.

What about taking retirement distributions, should it be from qualified accounts or non qualified accounts? Who will help you answer that question, your CPA or your Broker? What will happen to your tax return when a spouse dies? Do you have a strategy to minimize the tax consequences upon the death of a spouse or to your estate? These are critical questions that you deserve to have answers to. A great retirement plan includes a great tax strategy.

Unfortunately, the single biggest missing piece in pre-retirees and retirees is an efficient tax strategy.

More often than not people have no tax strategy at all.

We Believe An Efficient Tax Strategy Is Critical.

puzzleWe work with our clients to build a comprehensive overall retirement income plan, that includes an efficient tax strategy. Often people get caught up in interest rates and returns on investments, while these are important, the most important issue for our clients is what ends up in their pockets. Proper tax planning is a critical piece of a great retirement plan. We owned a tax practice for 5 years and hired CPA’s to do our clients tax returns. We have experience understanding and implementing great tax strategies. Along with Investments, Insurance, and Estate Issues – Taxes can not be left out!

When people come into our office and we ask about their tax strategy, they often don’t have one at all! They aren’t getting tax advice from their CPA or Broker and that is a big problem. That’s why we look at each of our clients’ tax returns, not to catch any mistakes, but rather to project forward and start planning how they can be in the most favorable position to minimize their taxes.

Have You Thought About How Your Social Security Benefits Will Be Taxed?

This video is a great example of the impact taxes have on your social security benefits. In the video, we highlight how making the proper social security election decision can have large consequences on your tax bill! Check it out – you might be surprised!

Social Security Taxation Is Just One Example Of The Need For A Tax Strategy.

Obviously, your investments play a a huge role in your tax strategy as well. Is your money qualified, non-qualified, long term capital gains, dividends, tax-free municipal bonds (by the way, these cause your social security benefits to be taxed!), do you have a pension, distributions, RMD? All of these elements go into creating an efficient tax strategy.

Take a look at the video below where we give two different examples of tax returns that have the same taxable income but very different tax bills!

I’m Not Confident In My Tax Strategy. What Should I Do?