Different savings plans are taxed at different rates. We can help you plan your withdrawals from accounts in a way that reduces your taxes.
Organize accounts and invest based upon time horizon and income needed
As you move through retirement, your needs will change. Your Withdrawal Plan can change with your needs
*Assumptions for this case study: They maintain a 50% stocks-50% bonds after-tax asset allocation with stocks earning 9% per year including 2% dividend yield and bonds earning 3% interest per year. For the stocks, 20% of capital gains are realized each year with all gains being long term. The original cost basis of assets held in the taxable account is set at the market value. His Primary Insurance Amount for Social Security is $2,500 a month and hers is $1,500 a month. They both have Full Retirement Ages of 66, begin Social Security benefits at 66, and receive their Primary Insurance Amounts. We assume one partner dies in 16 years at age 78 and the survivor lives on 75% of the real amount they lived on when both were alive. Both Strategies locate stocks and bonds in the accounts (i.e., taxable account and 401(k)s) in a tax-efficient manner, while maintaining the 50% stocks-50% bonds after-tax asset allocation. We can help clients with this asset location decision, which may further extend the portfolio’s longevity. Based on today’s Tax Code, they will usually be in the 25% tax bracket in retirement. They take the standard deduction each year. Inflation is 3% per year with all tax brackets, standard deduction, over 65 tax exemption, and personal exemption amount rising with inflation. This information is provided for general informational purposes. The securities and strategies referred to in the information may not be suitable for you; therefore, it is important that you consider the information in the context of your own investment needs and objectives, including risk tolerance, investment goals and time horizon. This information is not intended to be a substitute for specific individualized investment planning advice.