How to Reduce Your Taxes as you Prepare for Retirement

Joseph Grund pic

Joseph Grund

The recipient of the Diamond Ring Award from Ameriprise Financial Services, Inc. in 2013 in recognition for his achievements as a financial advisor, Joseph Grund has been working with the company since 2011. A graduate of Yale University, where he studied biology, Joseph Grund works with individuals to help them attain financial confidence through holistic planning. Grund and his colleagues often work with individuals near retirement to help them manage income and tax strategies.
Here are some things you can do as you prepare for retirement to help reduce your income taxes.

1. Those who itemize can potentially use donations to qualifying charities as deductibles.

2. Consider a Roth IRA account over a traditional IRA, as the Roth requires contributions to be made after tax has already been taken, generating a tax-free income when you make withdrawals, if you meet all conditions. Withdrawals from IRAs, conversely, are generally taxable and mandatory withdrawals begin at age 70 1/2. If you have an IRA, you can spread out withdrawals to limit the amount of tax you pay on each.

3. Those in higher tax brackets can invest in municipal bonds, which are debt securities issued against municipal projects like highway and school construction that produce income that is generally exempt from federal income tax and usually exempt from state income tax.

Ameriprise Financial and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.  A ROTH IRA is tax free as long as you leave the money in the account for at least 5 years and are 59 1/2 or older when you take distributions or meet another qualifying event, such as death, disability or purchase of a first home. Interest income from municipal bonds is federally tax-free, though the alternative minimum tax may apply. Interest income from municipal bonds is also generally state tax-free to residents of the state in which the municipal bond is issued, and generally taxable to residents of other states, depending on individual state rules. Sales of municipal bonds can result in federal and state capital gains or losses.
Investment advisory services and products are made available through Ameriprise Financial Services, Inc., a registered investment adviser. Ameriprise Financial Services, Inc., Member FINRA and SIPC. © 2018 Ameriprise Financial, Inc., All rights reserved. 1995144ACMR0118

Joseph Grund & Associates
A private wealth  advisory practice of Ameriprise Financial Services, Inc.
11300 US Highway 1, Ste. 600 & 501, Palm Beach Gardens, FL 33408-3293


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