Wednesday, March 5, 2014
High tax rates faced by wealthy individuals create the need for keeping tax minimization in mind when planning for retirement. The benefits of tax-advantaged retirement accounts are limited, and deductible IRA contributions and Roth IRA accounts are not an option. For those in the income bracket facing taxes equaling close to half their income, three strategies that can help include:
- Opening a traditional IRA and converting it into a Roth IRA
- Checking if a 401(k) account allows after-tax contributions when the contribution limit has been reached
- Creating a defined benefit plan if self-employed
See Rob Berger, 3 Stealth Retirement Savings Moves For The Wealthy, Forbes, Feb. 24, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.