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How do retirement planning tax services help create a strategic plan?
August 16, 2022 at 7:00 AM
How do retirement planning tax services help create a strategic plan?

It’s not uncommon to take a year-by-year approach when it comes to your taxes. The tax laws are subject to change each year, and it can be a large sum of money to deal with. The task of having your taxes in order every year is a large enough task; it makes sense if you don’t want to deal with anything further down the line. This is where retirement planning tax services come in.

Our team at OWLFI can help you put together a long-term tax plan as a part of your retirement plan. If you’ve never considered this aspect of your retirement plan, we have a few ways it can help.

Planners understand the current tax landscape.

The tax code is complicated. It’s normal to hire someone to interpret tax laws and explain how they’re applicable to you. Why wouldn’t you want to have an understanding of tax laws with your retirement plan? Retirement planning tax services can help you understand how the current tax landscape works and what it will do to your retirement fund contributions.

Planners can estimate the future tax implications of your finances.

Nobody knows exactly what the tax laws will be involving retirement funds 10 or 20 years from now. However, retirement planning experts can certainly look at trends, evaluate the political climate, and provide an estimate of what it might be like when it’s time for you to retire. Understanding what could happen with taxes and your retirement fund can help to either put your mind at ease that you have enough money set aside or need more to account for taxes when taking dispersals.

You have an idea of how much you’ll pay in taxes during retirement.

If you’re currently contributing to a 401(k), you’re not paying taxes on any of that money. It’s paid into your retirement savings account and helps to reduce your taxable income. While this is helpful, you’re not off the hook. You’re going to have to pay taxes on that money eventually and it’s when you take dispersals during retirement. Retirement planning tax services help to predict how much of your money will be taxed when that time comes, so you’re not short on funds each month.

You’ll learn about strategic asset allocation.

It’s never a good idea to put all your eggs in one basket, so to speak. Allocating all of your designated money for investments into one place can easily backfire and leave you completely broke. Your retirement planner can help decide how you can best distribute your money through multiple investments to protect it and possibly help it to grow faster.

Planners can identify the benefits of continuing to pay taxes.

There are tremendous benefits to deferring taxes on the money you're putting into your 401(k). Not only will you lower your taxable income, but you can also bring home more money every month. Although, paying your taxes now and contributing to an IRA can pay off down the road. By paying taxes now, you won’t have to worry about paying them during retirement. Your planner can identify more benefits of paying taxes now rather than deferring.

Contact us to get started.

Learn more about strategic tax planning for retirement by getting in touch with our team at OWLFI. We offer retirement planning tax services to help you put together a plan to ensure you can retire when the day comes. Give us a call at our location nearest you to book an appointment with a member of our team.