Tax Free Retirement Income

Where will tax rates be when you retire?  Will you retire within the next 10 years? Are you retired now?  These are all questions you will need to keep in mind as you read through this posting.

We know Bush’s tax cuts are expiring and there will no doubt be new taxes on the horizon to pay for the various bailouts.  It is certainly time for people with retirement savings to reevaluate their plan.  Looking for strategies to protect against these tax changes is critical.

Free Booklet

Before we go any further, you may like to have our free booklet – which touches on Avoiding Common IRA distribution mistakes, including Roth Conversion.

In 2011 the maximum capital gains tax rates rise to 20% from 15%, the tax break for dividends will also end, which means they will revert to ordinary income.  Did you know tax rates are set to revert to pre-2001 levels?  The lowest level is 10% and will increase to 15%, and currently the highest is 35% and will rise to 39.6%.

Congress is considering creating a surtax on couples earning at least $350,000 to pay for health-care reform. This surtax will make the top jump to around 45% – the highest income tax rate the nation has seen since 1986, when the top levy was 50%.  OUCH!

Tax free retirement income

Maybe tax free retirement money makes sense for you.  With taxes set to increase, financial planners are rethinking the mantra of putting every penny into tax deferred vehicles.  Enter Roth IRA.

There are many advantageous to Roth IRA, one that comes to the top is that when you turn 70 ½ you won’t be forced to take Required Minimum Distributions.

Do you have a traditional IRA or another retirement plan such as a 401(k), 403(b) or 457?  You should evaluate if it is appropriate for you to convert your retirement money to tax free retirement money.

Report – seven steps to evaluate Roth Conversion

Seven steps to evaluate if you should convert your retirement money to tax free money.