Retirement Tax Bill

Many people approaching retirement or already retired have invested in qualified plans, such as 401ks or traditional IRAs, throughout their careers. However, many clients are unaware of how much of their retirement savings should be earmarked for taxes. Planning for tax costs is challenging because tax rates and laws are subject to change. In fact, tax rates are currently at overall historic lows, which means relying solely on current annual tax liability calculations may result in underestimating future tax obligations.

For instance, a married couple filing federal taxes in 1982 on an income of $29,900 would be in the 33% tax bracket. Adjusting for inflation to 2023 currency, this amount would equal $108,558. However, the same married couple with the same income level in 2023 would be in the 22% bracket. This demonstrates that tax rates can and do change, impacting retirement tax liabilities.

Many of our clients frequently ask

At Sunstone, we diligently help our clients avoid unnecessary tax liabilities by addressing questions such as:

What strategies can I employ to minimize my tax obligations during retirement?
How do these tax minimization strategies interact with other income sources, such as Social Security or pensions?
In the event of a major illness or financial complication for my spouse or myself, how will our tax liabilities be affected?
How can our ever growing national debt effect my future tax bill?

We aim to provide comprehensive guidance and support, helping clients navigate the complexities of retirement tax planning and ensuring they have a clear understanding of their potential tax liabilities in various scenarios.