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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

November/December 2023

Distribution Planning For Near-Retirees

Portrait of healthy active senior couple driving golf car and enjoying free time outdoors.

We constantly hear about the importance of saving for retirement and put a lot of effort into it during our working years. Yet, the final element of any retirement strategy is often neglected: distribution planning. This tax season, as you begin collecting the information you need to file, consider how you’ll take tax-efficient distributions in retirement.


Consider the Roth*
While this time of year focuses on deadlines to minimize taxes, they should play only a part in how you take eventual retirement distributions. From a later required minimum distribution (RMD) age to Roth IRAs and more, there are a variety of ways you can maximize what you receive in retirement and how much you pass on to future generations.


Roth IRA accounts might be appropriate if you expect to have the same or higher income in retirement. In 2023, joint filers can contribute up to $6,500 — plus an extra $1,000 if age 50 or older and have an adjusted gross income of $218,000 or less ($138,000 or less if filing single). Make a partial contribution if your income is less than $228,000 (or $153,000, respectively).


Roth IRAs have no RMD rules during the life of the account owner, but Roth 401(k)s do through 2023.** There are no income restrictions if you have a Roth 401(k) so consider contributing the maximum the plan allows. Withdrawals for both types of Roth accounts are tax-free, subject to restrictions.


Orderly Withdrawals
Beyond the Roth, consider this distribution order for a potentially more tax-efficient withdrawal strategy:
  1. Cash in taxable income;

  2. Delay RMDs until penalties apply for not taking them;

  3. Take Roth distributions.


Make sure to contact your financial and tax professionals to help ensure you have a retirement distribution strategy that meets your unique needs.

*To qualify for tax and penalty-free withdrawals of earnings, a Roth IRA or 401(k) must be in place for at least five tax-years and the distribution generally must take place after age 59-1/2, with a few exceptions.

**Starting in 2024, Roth 401(k) accounts will be exempt from RMDs during the account owner's lifetime.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

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