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Craig Lundquist, MBA, ChFC®, CRPC®
VP of Wealth Management
651-773-2757
Kristin Becker
Senior Administrative Assistant
651-773-2821
Ideal Wealth Advisors
Located at Ideal Credit Union
8499 Tamarack Road
Woodbury, MN 55125
CRPC conferred by College for Financial Planning
July/August 2022
Consider Taxes When Planning for Retirement
When it comes to planning for retirement, there’s a lot to think about. How should you save for it? Where will the money come from? How much will you need for a comfortable lifestyle? But one important element that people often overlook is planning for taxes. Failing to take taxes into account can be an expensive mistake.
Your Tax Bracket
You may think you’ll be in a lower tax bracket once you’re retired, but that won’t necessarily be true. While you may no longer be earning a steady income from your job, your tax bracket may stay the same. Keep in mind that you may not have some tax deductions in the future that you may have now. These could include deductions for dependent children and retirement plan contributions, as well as the mortgage interest deduction once you’ve paid off your home.Your Social Security Benefits
If you have income in retirement, up to 85% of your Social Security benefit may be taxable by the federal—and sometimes state—government. Other income might come from investments, retirement plan distributions, or a job.Your Retirement Savings
Remember how the contributions to your company’s qualified retirement plan reduced your taxable income while you were working? Once you retire, it’s time to pay up. Withdrawals from 401(k) plans, traditional IRAs, and annuities are taxable as ordinary income.A Tax Break from TIPS
Treasury Inflation-Protected Securities, or TIPS, provide protection against inflation and offer tax benefits. TIPS’ principal increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, you’re paid the adjusted principal or the original principal, whichever is greater. Interest income and principal growth are exempt from state and local income taxes.Tax Planning with a Roth IRA
Opening a Roth IRA can provide you with tax-free income when you retire. Although contributions to a Roth IRA are made with after-tax dollars, withdrawals of earnings generally are tax free after age 59½, if the account has been open for five years. Consult your financial professional, who understands the requirements regarding these investments.1-05268965
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Ideal Credit Union and Ideal Wealth Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Ideal Wealth Advisors, and may also be employees of Ideal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Ideal Credit Union or Ideal Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
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