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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

September/October 2023

Planning for Retirement? Keep Taxes in Mind

Miniature people : Couple oldman standing with Calculator,business,tax concept.

Do you have big plans for retirement? The IRS has some big plans, too, namely to collect the taxes you didn’t pay on the tax-deferred savings in your employer’s qualified retirement plan or traditional IRA. As you contemplate life after work, think about how the money you’ve invested for retirement will be taxed. Your tax advisor and financial professional can help.


401(k), 403(b) Plan/Traditional IRA —
Contributions and earnings are tax deferred until withdrawal. Starting in 2023, required minimum distributions (RMDs) start at age 73. For 401(k) and 403(b) plans, RMDs can be delayed if you’re still working and don’t own more than five percent of the company. For traditional IRAs, RMDs must start at age 73 even if you’re still working. Withdrawals are taxed at your ordinary income tax rate. Withdrawals before age 59½ generally incur a 10% penalty.


Roth IRA and Roth 401(k) —
Contributions are made with after-tax dollars, but withdrawals of earnings are tax free. Account owners can make penalty free withdrawals of earnings after age 59½ once the account has been open for at least five years.


Pensions —
Withdrawals are taxable at ordinary income tax rates, assuming no after-tax contributions were made.


Social Security —
Benefits aren’t taxed if provisional income is less than $25,000 for single filers and $32,000 for married joint filers. With income between $25,000 - $34,000 single and $32,000 - $44,000 joint, up to 50% of benefits may be taxed. If provisional income exceeds $34,000 single and $44,000 joint, up to 85% of benefits may be taxed. Provisional income equals your income and any tax-exempt interest, plus 50% of your Social Security benefit.


Annuities —
If annuities are purchased with pretax dollars, such as in a qualified retirement account, payments are taxable as ordinary income.


Stocks, Bonds, Mutual Funds —
Proceeds from the sale of investments held longer than one year are taxed at long-term capital gains rates. Gains on investments held less than one year are taxed at ordinary income tax rates.

Municipal Bonds —
Interest is exempt from federal, and sometimes state, tax. Capital gains rates apply to the sale of municipal and corporate bonds.


Dividends —
Qualified dividends are taxed at capital gains rates. Nonqualified dividends are taxed at ordinary income tax rates.


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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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