The Tax Cuts and Jobs Act represents a relatively significant tax cut for most middle-income retirees, but the bill did nothing to change the interactions between different income sources in retirement, which means that retirees will need to pay close attention to which accounts they withdraw from at which points in time.

A case study: old vs. new 

To illustrate the interactions between ordinary income, such as IRA withdrawals, Social Security benefits, and long-term capital gains, Joe contributed this article to Financial Advisor, "Tax Cuts Eliminate Social Security Tax Torpedo, Retirement Income Juggling Act."

Let Covisum help you and your clients

Advisors and financial institutions rely on us to help them guide their clients to make the best financial decisions. With our proven process, advisors are able to streamline their practices, offer actionable insights, and utilize successful marketing tactics. 

Clients often don’t understand the relationship between ordinary and capital incomes, leading to potentially significant tax inefficiency in their retirement strategy. With all of the chatter about tax in the news, clients are even more confused. With Tax Clarity, you can provide tax alpha and quickly identify sub-optimal situations, showing clients how to make retirement decisions in the most tax-efficient way. Additionally, when you subscribe to the software you get an entire support team to help you answer client and software questions.

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