A Clever Way To Cut Client's Heirs' Income Taxes

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Retirees can consider a Roth IRA if they want to leave assets that would not be taxed once inherited, according to Motley Fool. Roth IRA money is not subject to federal income taxes if the account was opened at least five years before the death of the owner. The Roth IRA beneficiary will be required to take distributions computed on his predicted lifespan and the money left in the account would grow tax-free.

I want to retire early. Where should I invest?
There are some people who want to retire early and have the financial capacity to do so, but don't want to get penalized for withdrawing their savings too early. This article in CNN Money shares three ways a person who wants to retire early can become financially independent even before they begin claiming their Social Security checks. The first step involves making sure a potential retiree has enough income streams and assets to retire early, while the second is selecting a flexible retirement plan such as a Roth IRA, and finally, keep extra savings invested in brokerage accounts, which allow you to put in as much money as you want and let you make withdrawals anytime.

How to fill the income gap if you delay Social Security
Clients can enjoy long-term benefits from making small changes in their near-term retirement spending plan, instead of delaying Social Security retirement benefits, according to this article on Forbes. They may extend their work for a few more years to bring in larger benefits, spend some of their retirement assets in the early years to stretch their savings or convert a part of their portfolio to an income annuity by the time they retire to reduce their future income’s unpredictability. Clients are also advised to take caution when taking out a reverse mortgage loan as doing so could lead to a significant reduction in available home equity.


Avoid mistakes and penalties with the ABCs of RMDs
Retirees should carefully consider their taxes when it comes to when they will take required minimum distributions, according to Kiplinger. Each tax-deferred retirement account will require RMDs for the year the owner turns 70.5, however, for one's first time they can choose to wait until April 1 of the following year. Retirees can also convert some funds into a Roth IRA so future withdrawals and gains would be tax free, or purchase life insurance and be paid out to heirs free of federal income tax.


3 big mistakes that can screw up even the best retirement plan
Understanding one's life expectancy is among three common big mistakes that people make during retirement planning, according to Money, and the consequences of making these mistakes are disastrous. Seventy-five percent of people surveyed didn’t know that a 65-year-old man can expect to survive another 20 years. Other big mistakes are failing to know how much one should save and not postponing Social Security claims to increase benefits.


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Taxpayers deemed to have had indirect control over assets.