In this session of Building Your Financial Future, we focus on the importance of maintaining financial health through strategic planning, with an emphasis on tax efficiency and retirement savings.
Like physical health, financial wellness requires attention, and tax efficiency plays a key role in maximizing retirement income. We highlight strategies like utilizing tax-advantaged accounts (IRAs, 401(k)s) to minimize taxes.
The session also covers effective withdrawal strategies, stressing the need for a coordinated approach as retirement nears. We discuss the tax implications of retirement accounts, including mandatory 20% withholding on 401(k) withdrawals, and the flexibility of IRA withdrawals.
We dive into tax planning, explaining the U.S. progressive tax system and how to manage withdrawals to avoid unnecessary penalties. The conversation also covers required minimum distributions (RMDs) and Roth conversions, emphasizing their long-term benefits.
Lastly, we discuss Health Savings Accounts (HSAs) and their triple tax advantage, encouraging individuals to maximize contributions as part of their retirement plan. This session reinforces the need for proactive financial reviews and planning to enhance tax efficiency and financial wellness for retirement.