7 tax traps hidden in your ira or 401k accounts
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There are many potential problems lurking in the future for all Americans. Whether you’re 35 or 65 years old, we believe that one of your largest risks is the risk of rising income tax rates. No one wants to pass on a large tax bill to their heirs or pay more in taxes than their fair share. But the hidden taxes that are in most people’s IRA’s create a set of unusual challenges and corresponding opportunities that can prove stressful. Find the Solutions Here: http://7taxtraps.com/a-guide-to-a-tax-free-income/TRANSCRIPT
7 Tax Traps Hidden in your IRA and 401k.
(and how to avoid them)
Little or NO control of timing of taxation
1
We like to be in control ofour own lives and assetsbut when you reach age 701/2 your options disappear.You must take taxableincome whether you need itat the time or not.
Forced Taxation through required minimum distribution
2
These forced taxableevents are called"Required MinimumDistribution". The IRSprovides standard tablesthat dictate how much ofyour prior year endingbalance must be takenout in the current year.The determining factorfrom the table increasesyour distribution eachyear.
Risk of Rising Income Tax Rates
3
In 1954 the highest tax rates were 90%.The 1970’s saw the top rate at 70%,
Click here to see how rising income taxrates will effect your future.
and since about 1990 the top income taxrates have been between 30 and 40%.
70 Year Lows in the Tax Rates We're Paying
70-90%
30-40%
Risk of large tax bill passed to your heirs
4
When it’s time for your heirs to receivethe balance of your IRA’s they must beginpaying taxes. Depending on the number ofheirs, it’s actually possible that taxes willbe greater than the amount left for anyone of the individual beneficiaries.
Click the image to the right tocalculate how much yourbeneficiaries will really
receive.
Hidden Tax on Medical Expenses
5
When you need money for medical expenses, where will it come from?
Most often it has to some from your IRA’s which is additional taxable income for that year
Higher Tax on Social Security and Medicare Plan B
6
Social Security benefits become taxable based on how much othertaxable income you receive. This includes income from distributions
from your IRA’s too. In addition, your Medicare Plan B premiumsincrease dramatically based on your taxable income.
Hidden Taxes on Large Purchases or Expenses
7
When all of your savings isin your IRA or 401k, everyfinancial decision carries atax decision with it. Thisfact makes everything more expensive for therest of your retirement
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