One of the major concerns of retirement is healthcare. The cost of healthcare during retirement can be significant, primarily due to inflation and the ever-increasing associated with medical services. Early planning will help you better cope with your healthcare expenses during retirement.
In the current economy, healthcare-related expenses constitute one of the largest costs in every household. In fact, they often surpass the cost of housing and recreation combined.
Many consumers are at a crossroad when determining the proper amount to spend on healthcare and other budgetary needs. Many do not realize that medical premiums are often influenced by the annual income of an individual. By moving your tax bracket to a lower threshold, you can save a lot of money for healthcare.
It is important to reduce your taxable income. You can achieve this by securing non-qualified annuities, permanent life insurance, a health savings account, reverse mortgages, or ROTH IRAs.
Required Minimum Distributions happens when an individual is forced to take withdrawals from their IRA when they turn 70.5-years-old. Taking RMDs at this point may increase your taxable income. To avoid this dilemma, utilize techniques that will enable you to reduce IRA balances earlier in retirement. These techniques can include early withdrawals, ROTH conversions and QLACs.
Health Savings Accounts are also very effective when it comes to avoiding taxation. If implemented early, they can help create a tax-free fund pool that can be used later in life for healthcare expenses.
To summarize the points above, nvestment planning and tax planning go hand-in-hand and by combining both, you can create a solid savings plan that will help you in the future. Remember that retirement is primarily about income, not growth.
If you have questions about your retirement, do not hesitate to contact the experienced Twin Cities financial advisors at Assured Retirement Group. Call us today at 952-657-7470.
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