No matter the amount of your retirement assets, proactive planning is critical because of the sometimes confiscatory taxes these assets are subject to – up to 70% or more in certain circumstances. As you may know, traditional retirement assets are not subject to income tax until withdrawal – and because the withdrawals consitute income, the larger the withdrawal, the higher the tax rate. If you’re like many of our clients, you want these assets to grow to the maximum extent possible, since assets not taxed until withdrawal grow much faster than assets that are taxed every year.
There are several strategies that can help you defer and perhaps eliminate the tax liability of these hard-earned assets, while at the same time legally protecting them from the creditors of your loved ones. These strategies can also help you coordinate your retirement plans with your overall estate and financial planning objectives to ensure that those objectives are met.
Retirement Plan Trust Planning can hep ensure maximum stretchouts but must be done carefully to avoid a requirement of early distributions.
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