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Avraham "AY" Rappaport, CLTC
President, Financial Professional
Yaniv "Jay" Natanov
President, Financial Planner
Eli Rappaport
Vice President, Financial Planner
Shlomo Rosenstein
Financial Professional
Ozzie Marizan
Financial Planner
Joseph Greer
Employee Benefits Administrator
Dylan Pinsky
Client Relations Manager
Premier Financial
6395 Dobbin Road, Suite 102
Columbia, MD 21045
Phone: 240-309-6001
Email: dylan.pinsky@prudential.com
Website: premierfinancial1.com
January/February 2024
High Earners: Pay Attention to Your Financial Well-being
Everyone should closely monitor their finances, but higher-income individuals may need to take extra measures to keep more of their money. While goals should always be the driving force behind financial decisions, knowing your options for preserving income can be a valuable resource.
Tax-advantaged Accounts
Maximizing contributions to taxadvantaged accounts lowers your tax bill by reducing your annual taxable income. Consider contributing the maximum allowable amounts to 401(k) or other workplace plans, traditional or self-employed IRAs, and health savings accounts. Additionally, you can make catch-up contributions to retirement accounts starting at age 50 and to health savings accounts beginning at age 55.Roth Conversions
High earners may not be eligible to make contributions to a Roth individual retirement account. However, they can convert assets in a traditional IRA to a Roth IRA and pay taxes on the conversion. Your savings will have the potential to accumulate tax-free. Qualified withdrawals from your Roth IRA will also be tax-free, and you’ll avoid having to take required distributions.Asset Allocation Adjustments
Where you hold investments can have a big impact on earnings. Consider keeping tax-efficient mutual funds and exchange-traded funds in taxable accounts. Funds that generate higher taxes should be reserved for your 401(k) or IRA, where they’ll remain tax deferred until withdrawal.Charitable Contributions
Contributing to charity may help you save on taxes. You could donate appreciated assets, such as stocks, to a charity and avoid paying capital gains tax; establish a charitable trust and take a tax deduction when the trust is created; or set up a donor-advised fund to manage your charitable donations and deduct your contribution on your income taxes.Deferred Annuities
A deferred annuity is a contract with a life insurance company that is set to pay you a regular income or a lump sum of money at a future date. You won’t pay taxes on the money used to purchase the annuity until you begin making withdrawals, thereby reducing your current taxable income. Annuities are complex products, so consult your financial professional before investing.** Annuity products are not FDIC-insured, and their guarantees are backed solely by the claims-paying ability of the issuing life insurance company. Distributions from annuities are taxed as ordinary income and, if taken prior to reaching age 59 1/2, may be subject to a 10% additional tax.
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Premier Financial is not affiliated with Prudential Financial. Premier Financial sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Premier Financial is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Premier Financial and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Dylan Pinsky is employed by Eli Rappaport and not The Prudential Insurance Company of America or its subsidiaries.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
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