How to Maximize Post-Retirement Assets

Now that you have reached retirement age, it is important to maximize all those assets that you have worked all of your life to accumulate.  You want to be wise with your post-retirement spending and earning, so as not to find yourself in any sort of financial difficulty during retirement.

If you own investments such as stocks, bonds, or mutual funds in taxable accounts, they will generate taxable income, interest, and dividends.  These earnings are taxable at your current income tax rate, so it makes sense to draw first upon funds from which you pay taxes.

When drawing from taxable income sources, it is best to progress from the items taking the biggest tax chunk out of you to the more tax efficient assets down the line.

Wealth grows more quickly in accounts where the taxes are deferred for as long as possible.  IRA accounts and 401 K plans can remained deferred until minimal distribution is required by law, at age 70 ½.  Principal and income drawn from these accounts is taxable as ordinary income.  The longer you hang on to these assets the better.  At the time you finally withdraw them, you will likely be in a lower tax bracket than when you began your retirement.  Just be sure to empty these accounts according to the required IRS timeline, or you could face stiff penalties for not doing so.

Roth IRAs should be the last accounts from which you withdraw funds.  If the funds have been in your account for at least five years and you are age 59 ½, all of your withdrawals are free from taxation.  Unlike traditional IRAs, Roth IRAs have no required withdrawal age.  You can keep the money in a Roth IRA, generating, wealth, for as long as you like.  You can even pass them on to your heirs and assigns, free of income tax.

All of these scenarios are subject to any multitude of variables that can affect the outcome of your personal post-retirement situation.  If you have chosen good investment plans and tax deferred income, you need to take into account every asset you own, including real property when determining how to maintain your income, lower your tax liability, and build your wealth during retirement.  This is the time to make all that you earned pay off for you.

It would be advisable to consult a financial advisor and seek his or her input on how to best manage all of your assets at this time of your life.  Having a clear, definitive plan is the best option for enjoying life and your post-retirement assets.



MP3 Player Accessories