Tax Reduction Strategies

Tax Preparation VS Tax Planning, Major Differences.

Gathering all of your documents and hoping you come out with an April tax refund, is tax preparation. But when is the last time your taxes were proactively planned for with a professional? When was the last time you planned for tax reductions for future years of your retirement?

Tax preparation is a historical recap and rarely provides preparation for your future. Lost tax money is seldom retrievable, unlike with market cycles where you may rebound from a market loss.

Understanding Taxes In Retirement

Understanding the tax consequences of your investments and savings becomes even more critical during retirement for a few reasons:

  • Most savings are accrued in tax-deferred retirement accounts (such as 401(k)s, IRAs, 403(b)s and similar) that will be subject to future income tax rates
  • Social Security and Medicare rates can be impacted by the amount of income you take from your taxable savings and investments
  • Expensive penalties and fees can easily occur when handling these tax-deferred retirement accounts, whether rolling over, inheriting, or taking income distributions


How Can I Reduce My Tax Bill In Retirement?

At Advisory Group West, our goal is to help maximize your income and minimize your taxes through proactive financial planning, working with your tax professionals as needed as part of your comprehensive plan. This likely includes:

Implementing tax-efficient asset allocation, tax-managed portfolio design and tax-favored investment vehicles
Strategizing how to develop reliable cash flow that accesses taxable, tax-deductible, tax-deferred and tax-free savings throughout retirement, while mitigating tax consequences and managing your tax bracket
Strategizing for managing capital gains taxes
Using tax management tactics for taxable investment accounts such as tax lot accounting, tax-loss harvesting and tax-aware trading
As a standard part of our Complimentary Cornerstone Vissions™ Strategy Session process, we help answer your critical tax questions, such as:

In what order should I take money from different accounts in retirement?
How can I reduce my taxes on my investments to increase my after-tax returns?
How will required minimum distributions (RMDs) from retirement accounts impact my future income and tax bills?
Are there any charitable gifting and legacy strategies that can increase my tax benefits?
If these few questions are not currently being addressed in your financial plans, it’s time to start a new conversation!

*AGW does not provide tax preparation services. Please contact your tax professional for your assistance.

Ready to maximize your income and minimize your taxes?

Request a call to speak to a financial professional

Need the resources to help organize, prioritize and optimize all the pieces in your financial life—including the tax implications of your investments? You’ve come to the right place.

Complete the form to request a 15-minute complimentary strategy call to learn if we can be of help.

Thank you!