Reducing taxes is an essential piece in preserving your retirement plan. Tax laws can be confusing, and little mistakes lead to larger tax issues. Each year millions of people overpay in taxes without even knowing it, leading to a lower retirement income. Our financial planners offer retirement tax consulting that pays critical attention to tax liability during every step of your financial planning process to minimize problems and maximize tax deductions.

Tax Diversification

There are several ways to develop a tax efficient investment strategy in order to create more flexibility in managing your taxes now and when you are ready to retire. Your money can be held in three different types of accounts and they are all taxed differently. Our tax advisory services include asset diversification into these three accounts in order to create the highest after-tax net retirement income.

Roth Conversion Strategies

Most individuals have the majority of their retirement assets in tax-deferred accounts that are subject to ordinary income tax. Our financial planners offer tax consulting as part of the retirement planning and recommend strategies to shift assets from the tax-deferred accounts to tax free accounts using Roth conversions. This strategy is important because Roth individual retirement account holders have more control over taxes in retirement. With a Roth conversion, you simply “prepay” the taxes on the amount you convert, which allows you to capture all future growth and income as tax free. Our wealth management team and CPA’s use meticulous strategies to project how much money you should convert to a Roth IRA over a period of time in order to control your tax bracket long-term and get the most value from your investments.

Tax-Loss Harvesting

Tax-Loss Harvesting is a strategy our financial planners use to turn money lost from an investment into a profitable opportunity. Our tax planners use the capital losses that inevitably occur to reduce your tax bill. You don’t truly have a gain or a loss on any asset until you sell it. When the asset is sold we are able to use that capital loss to offset your capital gains and income tax. The investment can then be replaced, or harvested, with a similar investment in order to maintain proper balance and diversification within your portfolio.

Additional Comprehensive Strategies

Our financial advisors utilize comprehensive tax preparation strategies when planning the how to maximize your retirement accounts. All retirement plans include investment strategies that are tax-efficient and follow Internal Revenue Service (IRS) guidelines. Some additional financial services include asset location, donor-advised funds, defined contribution plans and defined benefit plans, tax-efficient portfolio rebalancing, charitable gifting, and strategies for reducing taxes on real estate transactions. With careful tax planning, our retiree clients can pay a 15% tax rate even if they’re living a 25% bracket lifestyle.