5 Tax SECRETS Every Retiree Should Know

There’s only so much you can do during your working years to reduce your taxable income. But in retirement, this changes drastically. James explores these lesser-known strategies and how they can help you save substantial money.

Tax strategies extend beyond business owners and wealthy individuals. Retirees can benefit significantly from tax planning, enhancing their financial security.

👉 Foundation - Standard Deductions: As you age, standard deductions evolve. Turning 65 increases your deduction—$13,850 for those under 65 and $15,350 for those over 65. Although this isn’t a tax strategy of its own, the reduction in taxable income forms the basis for other strategies.

👉 Tax Loss Harvesting and Tax Gain Harvesting: Leverage tax loss and gain harvesting to manage investments and cut tax liabilities. Selling underperforming assets offsets gains, reducing taxable income. Selling strategically at lower tax rates, even 0% rates, lowers the tax burden based on your income.

👉 Tax Arbitrage: Manage investments to minimize tax impact. Roth conversions exemplify tax arbitrage—shifting traditional IRA funds to Roth IRA. Despite upfront taxes, long-term savings result from potential tax rate hikes.

👉 Donor-Advised Funds: Bundle multiple years' charitable donations into one to exceed standard deduction using donor-advised funds. Maximize impact and tax efficiency.

👉 Qualified Charitable Distributions: On top of donor-advised funds, you can start donating directly from your IRA at the age of 70 and a half. The benefit of this is that those donations count against what your required minimum distribution would have been.

👉 Social Security Optimization: Understanding tax implications on Social Security benefits is crucial. Up to 85% of benefits can be taxable. Make informed choices on benefit claiming and retirement income strategy.
Retirement offers unique avenues for tax efficiency. Start early to secure financial prosperity in your golden years.



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⏱Timestamps:⏱
0:00 intro
0:56 Standard Deductions
2:14 Tax Loss Harvesting and Tax Gain Harvesting
8:12 Tax Arbitrage
10:07 Donor-Advised Funds
13:07 Qualified Charitable Distributions
14:06 Social Security Optimization
15:05 Outro


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Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.

The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.

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