PKF JND PC logo

75 State Street, Suite 2105

Boston, MA 02109

617-753-9985

 

400 Crown Colony Drive, Suite 102

Quincy, MA 02169

617-422-0007

 

Website: www.pkfjnd.com

2022 Tax Planning Guide

Plan for Retirement

Senior couple walking on the beach holding hands at sunrise, plan life insurance at retirement concept.

Ask anyone nearing or in retirement and they’ll tell you the future is closer than you think. That’s why the steps you take many years before retirement will shape your financial picture in retirement.

There are a variety of retirement savings vehicles to which you can contribute, depending on your employment situation, including traditional and Roth IRAs, Simplified Employee Pensions (SEPs), SIMPLE plans, and 401(k), 403(b), and 457 plans. Many of these plans enable you to reduce your taxable income by contributing before-tax funds.


Making tax-deductible contributions to a qualified retirement plan means that you don't have to pay tax on any interest or other gains the account earns until you withdraw the money. At minimum, if your employer offers matching contributions in a 401(k) contribute enough to receive the maximum match.


ROTH IRAS
Roth IRAs require after-tax contributions, but qualified distributions are tax-free and there are no required minimum distributions during your lifetime, unlike most other retirement accounts. However, if a withdrawal is made within five years of the first contribution it is not considered a qualified distribution in most cases.

Contributing to a Roth IRA makes sense if you do not need the tax deduction now. Roth IRAs can provide tax-free income before RMDs kick in, requiring you to take distributions from qualified retirement accounts.

This year, due to the lower tax rates, many people have rolled over their traditional IRAs to a Roth IRA to avoid paying higher tax rates in the future. This only makes sense for people with the liquidity to pay the tax bill due in April without tapping retirement funds. If you are in a higher tax bracket now and planning to retire soon, a rollover may not make sense for you.


When changing jobs, rollover any retirement funds directly into an IRA to avoid tax and potential early withdrawal penalties.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online tax guide so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

PKF, P.C. and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.