Tax, Social Security and IRA Mistakes You Should Avoid When Planning for Retirement

There are certain retirement planning mistakes which can be costly to correct. However, there are some which can be correctable. Let’s look at 2 of them which can be fixed.

  • Using an Inappropriate Bucket

Did you start the year without planning adequately on how to save for retirement? Are you saving your money in the right buckets or are you only focused on reducing your taxable income?

Bajalia who is the founder of a woman worths say that some people who are above 50 years make the mistake of making unnecessary contributions to their tax-deferred accounts instead of putting extra cash away to their Roth or taxable accounts for retirement.

A Roth account allows a person to withdraw money tax-free. A taxable account may allow the account owner to withdraw cash at impressive tax rates for dividend income and capital gains.

  • Not Enquiring from Your Financial Advisor

If you are almost retiring and you want to claim social security fund now would be the best time to consult with your financial advisor. Not talking to your financial advisor is a costly mistake which can be avoided.

Bajalia also says that social security benefits are usually amplified by a certain fraction depending on the date of birth. That is if you delay retiring and you have gone over your retirement age. Withdrawing money from your IRA now could reduce future bills on your RMDs which begin at the age of 70 years and a half.

Lacey Tooley

Writing comes naturally to me. From writing fantasy fiction in school to taking it up professionally as an economics and financial markets writer in 2010, I have come a long way. I write tax and budget blogs for TaxVox. My areas of interest include business, law, finance etc.

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