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Mountain Peak Financial, Inc

At Mountain Peak Financial, Inc., we are dedicated to informing our clients and working closely with them to help develop the best financial strategies for their long-term goals. Our goal is to be the trusted lifetime advisor that helps our clients achieve the confidence they deserve for their financial futures.

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Mountain Peak Financial, Inc.  |  1425 W. Foothill Blvd., Ste 115, Upland, CA 91786 MAP  |  Tel: 909.982.2277

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Mountain Peak Financial, Inc. are not affiliated companies.

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. None of the information contained on this website shall constitute an offer to sell or solicit any offer to buy a security or any insurance product. Charles Ragonese CA LIC #0B02155, Firm LIC #0I088569

Any references to protection benefits, safety  or steady and reliable income streams on this website refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured.

The information and opinions contained in any of the material requested from this website are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. They are given for informational purposes only and are not a solicitation to buy or sell any of the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation.

Neither the firm nor its agents or representatives may give tax or legal advice.  Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Mountain Peak Financial is not affiliated with the US government or any governmental agency. 615813

© 2018 by Mountain Peak Financial, Inc.

5 Facts About Taxes that are Important for Your Retirement Plan

October 4, 2016

 

When planning your retirement income, it’s important to consider how you may be affected by taxes. Here are just a few examples of the role taxes play in the many components of a retirement plan. 

 

 

1. Your Social Security benefits are taxable.

All your working life you’ve paid taxes to contribute to the Social Security fund so that you could benefit from this social program in your retirement. Just when you thought you were done paying social security taxes, surprise! Your benefits are taxable too. 

*Combined income = your adjusted gross income + non-taxable interest + half of your social security benefits 

 

Data from Social Security Administration www.ssa.gov 

 

2. Your Roth IRA is not really tax-free.

It’s simply positioned that way because your contribution is different than the ones you make to other types of IRAs. Money you contribute to a Roth IRA is money that you’ve already paid taxes on. So while you won’t have to pay taxes on future distributions, you’ve already paid the tax anyway. But with that said, many retirees do prefer to get the tax out of the way so they don’t have to factor it into their planned income distributions later. 

 

3. Failing to meet your Required Minimum Distribution amount for your retirement accounts will result in more taxes.

If you have an IRA, SIMPLE IRA, SEP IRA, or retirement plan account, you will need to start taking withdrawals when you reach age 70.5. Unless you’ve previously paid taxes on the money, your withdrawals are included in taxable income and if those withdrawals are too small, you may have to pay an 50% excise tax on the amount not properly distributed. If you want to avoid this, make sure you know what your RMD is. Use the calculators the IRS provides or talk to your financial advisor.

 

4. Kiplinger rates California as one of the top 10 least tax-friendly states for retirees. According to Kiplinger, “California residents pay the highest income taxes in the U.S.” The highest income tax in California is 13.3% - and don’t forget this is in addition to the federal tax. Your retirement accounts such as IRAs and 401k's are taxed at normal income tax rates. But at least the good news is that your Social Security benefits aren’t subject to California State tax. 

 

Use Kiplinger’s Retiree Tax Map to learn more about retirement taxes in your state.

 

5. Health Insurance premiums are tax deductible.

Retirees have a long list of medical expenses that can be deducted, and many of those are things you might not expect. A recent study from Fidelity Investments estimates medical expenses in retirement to be almost $250,000 for a couple. Check the IRS Tax Guide for Seniors to make sure you know which of your medical expenses are deductible.  

 

 

 

This material is for informational purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Please consult a qualified professional before making decisions about your financial situation. 

 

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