Carstens Financial Group
  • Home
  • About Us
    • Pro-Am
  • Services
    • Retirement Income Strategies
    • Tax-Efficient Solutions
    • Investment Planning
    • Long-Term Care
    • Estate Preservation
    • Securities
  • Resources
  • Blog
  • Contact

Blog

Learn the Basics of Retirement Income Taxes

6/22/2015

0 Comments

 
Picture
As you prepare for retirement, it is normal to worry about your income. Will it be enough to sustain your lifestyle in retirement? But aside from your anxiety about the money coming into your budget, have you prepared for the money that will go out? In particular, how much do you know about retirement income taxes? This is a complicated issue to discuss with your financial advisor or tax professional, but the following basics should give you a good overview of how retirement income is taxed.
​
Distributions from IRAs, 401(k) funds, and most pension plans are taxed as regular income. This income is treated the same as income from a salary, and is taxed based upon your regular tax bracket.

Withdrawals from a Roth IRA are not subject to federal income taxes. In order to qualify as tax-free income, the Roth account must be at least five years old and you must be at least 59 ½ years old.

If you sell an investment that you have held for a year or less, this will be referred to as a short- term capital gain. The profit from this sale will be taxed as regular income, according to your tax bracket.

If you have held an investment for more than a year, the profit from its sale will be counted as a long-term capital gain. Long-term capital gains are taxed at a different rate from your regular income. If you’re in the top income tax bracket, these gains are currently taxed at 20 percent. This is something to keep in mind when you sell long-term investments like real estate property or stocks.

While many types of retirement plan distributions are not regarded as net investment income, some will be subject to a 3.8 percent investment income surtax. Your tax professional and financial advisor can explain this surtax, and help you devise strategies to shelter some of your income from excessive taxation.

In some cases, depending upon your income, up to 85 percent of your Social Security payments may be taxed.The formula used to calculate this tax is complicated, and best explained by a tax professional. Consult with your accountant if you have any questions about federal or state income taxes, and make sure you know what to expect before you retire.

14569 - 2015/6/5
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Kirt Carstens

    Carstens Financial Group focuses on providing comprehensive asset management, estate planning and life insurance solutions. Allow us to help you secure your financial future.

    Archives

    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014

    Categories

    All
    2020
    CARES Act
    COVID
    Economic Update
    Election
    Employer Plans
    Estate Planning
    Fed Chairman
    Financial Planning
    Fourth Quarter
    FRA
    Full Retirement Age
    Funding
    GDP
    Health Care
    Health Savings Account
    HSA
    Income
    Inflation
    Insurance
    Managing Medical Expenses
    Medicare
    Planning
    Portfolio
    Retirement
    Retirement Home
    Retirement Planning
    Retirement Strategy
    Risk
    Risk Tolerance
    Say Yes
    Social Security
    Stimulus
    Stock Market
    Supplemental Retirement Income
    Tax Planning
    The Market
    Working In Retirement
    Working Part Time
    Yes

    RSS Feed

Kirt Carstens, CLU, ChFC
Investment Advisor Representative
P: (712) 332-5960
F: (712) 332-5391

605 Hwy 71 S
Arnolds Park, IA 51331
Get Directions

Home     About Us     Services     Resources     Blog     Contact

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation.

Securities and Advisory Services offered through CreativeOne Securities, LLC Member FINRA/SIPC and an Investment Advisor.  Carstens Financial Group and CreativeOne Securities, LLC are not affiliated.
​
This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional.  The statements and opinions expressed are those of the author and are subject to change at any time.  All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only.  It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 

Check the background of an investment professional.  |  Privacy Policy
  • Home
  • About Us
    • Pro-Am
  • Services
    • Retirement Income Strategies
    • Tax-Efficient Solutions
    • Investment Planning
    • Long-Term Care
    • Estate Preservation
    • Securities
  • Resources
  • Blog
  • Contact