EXCELLENCE FINANCIAL CONSULTING
WHAT DOES YOUR FINANCIAL FREEDOM LOOK LIKE?
TAX FREE RETIREMENT
WHAT TYPE OF MONEY DO YOU WANT WHEN YOU RETIRE?
TAXABLE OR TAX FREE?
When you retire, you will have available to you only two types of money. The first type is taxable and the second type is tax-free.
The Retirement Solution – Rules of Money
Are you certain your current retirement plan will last as long as you need it and keep you in a comfortable lifestyle? Have your retirement funds been diminished by losses in the stock market? Well, what if you could enjoy:
* The gains of the stock market without the risk
* The tax-deferred benefits of a qualified plan
* The flexibility to fund and withdraw your money tax free regardless of age and income
* Guaranteed lifetime income
* Provide a tax-free income for your heirs
Let’s look at TAX FREE RETIREMENT. There are three common places to accumulate tax – free income. Only two in my opinion, are viable enough to use as retirement savings vehicles. The three accumulation vehicles associated with tax free income are:
1) Municipal Bonds,
2) The Roth IRA
3) Life Insurance if structured and managed properly.
On the taxable side, you have two different types of taxation.
The first kind is called capital – gains tax. This is the tax you pay for profit on investments such as stocks, mutual funds, and real estate. There are two different tax levels within the capital gains structure. One is short-term capital – gains tax, which is applied to investments held less than one year. This is usually taxed at the individual’s marginal income-tax rate.
The second tax level is for long-term capital – gains tax, for investments held longer than one year. The current capital gains tax (2018) on long – term holdings is generally 15%. But of course, this is subject to change based on changes in the tax law.
On the other taxable side, you have income tax – the tax you are used to paying on the income you currently earn. These types of investments consists of all forms of tax – qualified plans (retirement plans) and any other sources of earned income (W-2 income, 1099 MISC, 1099 INT, 1099 DIV). This tax can be as high as 35% in 2018, but can easily go up in the future and probably will.