You know that taxes are a crucial element of any retirement strategy that can't and shouldn't be ignored. However, taxes are rarely straightforward, especially taxes on retirement income. That's where you come in. Registered investment advisors can deliver significant value through different tax strategies. Help your clients keep more of their hard-earned retirement dollars by identifying tax traps and opportunities.

Retirement Tax Strategies

Roth Conversions

Converting dollars from a traditional IRA to a Roth IRA is one of the most advantageous tax strategies available to retirees. Clients pay taxes at the time of the Roth conversion, but they can avoid more significant taxes in the future if they move their money to a Roth IRA. 

Learn more about our Roth conversion software.

Net Unrealized Appreciation

When a client withdraws from a retirement account with employer stock, the stock is taxed as ordinary income, and they cannot take advantage of long-term capital gains rates. However, employees have an option to distribute appreciated employer stock out of an employer retirement plan. The Net Unrealized Appreciation (NUA) is taxed outside of the account at capital gains rates, but there are specific requirements to take advantage of NUA rules.  

Capital gain harvesting

In certain situations, harvesting capital gains can be a smart tax move, especially for clients between early retirement and age 70. If you can keep all of the other ordinary income off the table, harvesting up to $100,000 in capital gains can make sense.

Tax-Loss Harvesting

Capital losses can be carried forward into the future, either short-term or long-term, based on their original status. For married clients and filing jointly, a maximum of $3,000 in capital losses can be used against non-capital gains income on an annual basis. 

Social Security Taxation

Social Security benefits alone aren't taxable. However, when combined with other types of retirement income, Social Security benefits can become taxable by exceeding the $25,000 threshold for singles and the $32,000 threshold for married couples. Encouraging clients to delay claiming Social Security benefits for as long as possible is an excellent way to help keep taxes lower. 

Webinar Details

On Thursday, May 26, 2022, at 1 p.m. Central Time, Covisum® Founder and President Joe Elsasser, CFP®, will host a webinar about retirement tax strategies. In this live 45-minute presentation, Joe will offer a closer look at each of the above strategies and how and when to implement them. There will be 10-15 minutes following the presentation for questions. All registrants will receive a copy of the recording. Help your clients make smart decisions about taxes in retirement. Save your spot.