https://www.retirementplanningscottsdale.com/2020/02/18/anil-vazirani-scottsdale-investment-advisor-shares-how-to-beat-the-ira-tax-burden-for-heirs/ Anil Vazirani Scottsdale Investment Advisor shares Why life insurance is the new stretch IRA
Anil Vazirani Scottsdale Investment Advisor shares How to Beat the IRA Tax Burden for Heirs, per an article in CNBC on February 12, 2020: https://www.cnbc.com/2020/02/11/heres-a-way-to-beat-the-tax-burden-for-ira-heirs.html “With the stretch IRA strategy no longer available to non-spouse beneficiaries, you may be able to mitigate the tax impact on your heirs by converting regular IRA assets into a Roth, writes David Robinson in the article. You could consider doing the conversion in the years you move to a lower tax bracket, as the converted amount will be subject to federal taxation, he writes. “A Roth conversion might be a good option, not only to minimize heirs’ tax burden, but also to sustain the growth of your retirement savings.
“How to get both post-retirement income and save on taxes:
A non-qualified deferred compensation plan is an option for employers to provide post-retirement payments to their workers in a tax-effective manner, says an attorney in this Forbes article: https://www.forbes.com/sites/lawrencelight/2020/02/12/a-smart-way-to-get-post-retirement-income-and-save–on-taxes/#19356f23919b A non-qualified deferred compensation plan is given upon retirement or other employment termination and is different from a conventional qualified retirement plan, he says. For example, “the employer and the beneficiary are taxed on deferred compensation benefits when these are promised, not when payments are actually received.”
This tool to be a part of your retirement plans: The rising cost of health care could prompt you to consider making an HSA a part of your retirement plan, according to this Motley Fool article: https://www.fool.com/retirement/2020/02/12/why-this-1-important-tool-needs-to-be-part-of-your.aspx Compared with the 401(k) and other retirement savings plans, an HSA offers greater tax benefits, according to the article. Contributions are made on a pretax basis, the savings grow tax-free and clients will owe no income taxes on withdrawals used for qualified medical expenses.
Ways you can avoid getting hit with these common IRS tax penalties: Taxpayers should ensure that they meet the deadlines set by the IRS to avoid hefty penalties, according to this Fox Business article: https://www.foxbusiness.com/money/tax-season-2020-irs-penalties Those who owe the IRS should make the payment by April 15, while those who need to make estimated tax payments should settle the bill on time. Retirees who turned 70 1/2 last year have until April 1 to take the first required minimum distribution from their traditional 401(k)s and IRAs, and have to take another RMD withdrawal by Dec. 31, according to the article.
Read more: https://www.financial-planning.com/news/how-clients-can-beat-the-ira-tax-burden-for-their-heirs
Anil Vazirani is president of Secured Financial Solutions, independent insurance advisor investment advisor rep with a fiduciary obligation and in the financial services industry since 1994. A+ rating with the Better Business Bureau for over a decade and a half, members in good standing with the National Association of Insurance and Financial Advisors.
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