4 FOR HOME OFFICE AND ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
Strategic goal funding
• Take advantage of lower tax years by making early qualified withdrawals
• Reduce future RMDs
• Lower the tax bracket now versus waiting until the future
ĵ Often at the beginning of retirement before RMDs and Social Security begin
ĵ Use financial plan to determine years of lower brackets
ĵ Consider delaying Social Security to further push tax bracket down in earlier years
ĵ Uncertainty about future changes to tax rates
Retirement Timeline
2025
65
2026
66
2027
67
2028
68
2029
69
2030
70
2031
71
2032
72
2033
73
RMDs not starting
Year
Delay Social Security QCDs
Age
Retire
There are a number of
factors that may cause
tax brackets for clients to
be lower in earlier years
of retirement.
With RMD age pushed from 70.5 to 73-75 by the
Secure Act, a client's taxable income will likely be lower
than in later years.
Finally, if Social Security is delayed, not only will the
client receive a higher annual benefit due to Delayed
Retirement Credits, they may also be able to take
further advantage of lower tax brackets.
These factors can over-lap and create an ideal tax
planning opportunity.
