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Helping You Make the Most of Your Retirement & Taxes

We often get asked many questions about retirement planning and taxes, so we thought we’d share a bit about how SMB can work closely with your financial advisor to ensure the best outcome for you.

“We want to try to get our clients into a plan that is going to meet their long term needs but will also be the most tax efficient route.”

— Jacob Sanders, SMB Managing Partner

No one retirement plan fits everybody equally. Different people have different retirement goals, spending habits, costs of living, and overall plans for their retirement years. For retirement planning it’s always best to start as early as possible due to the simple concept of Time Value of Money. In other words, a dollar invested today is worth more than a dollar invested 10 years from now. You will need to allow for enough time for your investment to grow prior to when you will need to start withdrawing it. There are a myriad of retirement options available for individuals. The type of retirement account you use will be based off of several factors, such as employment type, contribution goals, income level, etc. For example, there are plans available for self-employed individuals that aren’t available to those individuals that are employees and they may allow for larger annual contributions than other plans. 

There are a number of factors to consider when choosing or updating a retirement plan. Taxation is certainly one of those. We want to try to get our clients into a plan that is going to meet their long term needs but will also be the most tax efficient route. This could mean choosing a plan that will maximize deductions today or one that will minimize income tax when you start drawing out that retirement income. For example, if faced with the choice of a traditional IRA vs a ROTH IRA, the taxation on these plans work very differently. With a traditional IRA, the taxpayer gets a deduction at the time of the retirement contribution and grows tax deferred until retirement age. However, all money taken out of a traditional IRA will then be taxable. Conversely, there is no deduction for ROTH IRA’s but all money taken out is tax free upon retirement age. These types of distinctions become important depending on the individual and their particular circumstances.

SMB doesn’t sell or manage retirement accounts, however, we will often work closely with our clients and their financial advisors to help select the best plan for them from both a growth and a tax standpoint. This also allows us to stay connected and involved in this processes so we can ensure that all related income and deductions are appropriately accounted for on their tax returns. For those clients that do not currently work with a financial advisor, we are always happy to make an introduction to one of our contacts.

Have questions or want to talk about how SMB can help you and your financial advisor make the best decisions for you? Give us a call or fill out our contact form to schedule an appointment. We look forward to meeting with you!