Taxes are a big expense in retirement and the sooner you plan for taxes, the better off you'll be when it comes time to retire. Experts recommend saving in a Roth account in addition to 401(k) and IRA accounts for tax diversification purposes.
Key Takeaways:
- Income tax is due on retirement account withdrawals for a 401(k) or IRA account.
- Some believe that they will pay lower taxes in retirement but tax code could be completely different decades from now, and it is possible tax rates will rise.
- Try converting your traditional IRA to a Roth account to pay taxes sooner rather than later. Taxes will be applied to the converted amount.
Read more about retirement taxes here: goo.gl/mCdfVS
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