Liquidating assets before who dating josh groban
As a retirement saver, you may have accumulated tax-deferred money in an IRA, a 401(k) or 403(b), or an annuity.You also may have earmarked certain taxable money for retirement, such as stock you inherited from a deceased relative.Because these decisions can be complex, it is wise to seek qualified tax and legal advice.The Income Tax Perspective From an income tax perspective, you want to create the most tax-efficient income you can from the various resources you have.There’s no major tax advantage or disadvantage to taking withdrawals from a traditional IRA or a 401(k) account first; they are treated the same for income tax purposes.However, investment performance will be a major deciding factor.
Essentially that means your beneficiary potentially can sell an inherited asset and owe little or no income tax on it whatsoever.Doing so means you pay less tax now and you allow any other retirement savings you have to keep growing.Once you’ve used up most of your taxable account retirement savings, as well as tax-free accounts such as municipal bonds or muni bond funds, move on to your tax-deferred money, such as IRAs, 401(k)s and annuities.Finally, if you have Roth IRA money, you may be wise to save that for last, since qualified withdrawals are completely free from income tax.(A qualified withdrawal means you’ve owned the account for at least five years and are past age 59 ½.) The Estate Tax Perspective From an estate tax perspective, you need to consider any inheritance plans for your retirement resources.
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Capital gain rates apply to assets that have appreciated in value over time.