Tax Planning in Midland, TX.

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Tax Planning Advice

You may leave behind a lot of things when you retire, but your tax burden isn’t one of them. In fact, without proper income tax reduction strategies, they can potentially be an even bigger burden in retirement. As tax and financial advisors, we’ve found that the keys to avoiding that problem are awareness and planning.

First, let’s talk about how different sources of retirement income are taxed, starting with the good news. If your only source of retirement income is Social Security, you probably won’t pay any taxes. That’s because Social Security income – by itself – is tax exempt.

Now for the bad news. If you’re like most people, Social Security won’t be enough. You’ll need other sources of income, which means a portion of your Social Security income probably will be taxed. As for how much will be taxed, it varies, but it can run as high as 85%.

For example, you’ll probably pay that 85% if you get large monthly income payments from a pension. With the pension itself, most are funded with pre-tax income. If that’s the case, it means all of your pension income is taxable each year. However, if a portion of your pension was funded with after-tax dollars, then only a portion of the income will be taxed.

For investment income from interest, dividends, or capital gains, naturally you’ll have to continue paying taxes on that just like you did before you retired.

Now, what if your strategy is to systematically sell investment shares to generate retirement income? In that case, each sale would also generate a long- or short-term capital gain or loss, which you would need to report on your tax return. In most cases, this is a bad strategy.

Tax Planning for Individuals and Families

In our years of serving as retirement tax advisors, we’ve seen that the main source of retirement income for most, besides Social Security, is the money they have in their 401(k)s and IRAs. Those accounts are tax-deferred until you start taking withdrawals, which the IRS forces you to do starting at age 72 to satisfy your required minimum distributions (RMDs). Your RMDs are unavoidable even if you have plenty of income from other sources.

Through our retirement tax planning services, we can help you implement tax saving strategies and income tax reduction strategies that can help to minimize the amount of taxes you pay when the time comes to start taking withdrawals from your retirement accounts.

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Carter Financial Group is a full-service financial firm dedicated to helping those in the Texas area meet their long-term financial goals. Our team of financial advisors and wealth managers are experienced in helping clients preserve their savings, so they can use it as a source of steady income in retirement.

All written content on this site is for informational purposes only. Opinions expressed herein are solely those of Carter Financial Group and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. Investing involves risk. There is always the potential of losing money when you invest in securities. Asset allocation, diversification and rebalancing do not ensure a profit or help protect against loss in declining markets. All information and ideas should be discussed in detail with your individual advisor prior to implementation. The presence of this website, and the material contained within, shall in no way be construed or interpreted as a solicitation or recommendation for the purchase or sale of any security or investment strategy. In addition, the presence of this website should not be interpreted as a solicitation for Investment Advisory Services to any residents of states where otherwise legally permitted to conduct business. Fee-based financial planning and Investment Advisory Services are offered by Sound Income Strategies, LLC, an SEC Registered Investment Advisory firm. Carter Financial Group and Sound Income Strategies LLC are not associated entities. Carter Financial Group is a franchisee of Retirement Income Source. Retirement Income Source and Sound Income Strategies LLC are associated entities. © 2023 Sound Income Strategies A franchise of Retirement Income Source
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Learn More About Mandee

In preparation for her continuing the family business and taking over full time once Dee retires, Mandee Carter, the Vice President and Associate Advisor of the Carter Financial Group, has been working alongside her father running the day-to-day business and learning the ropes, so to speak, since 2017.

Mandee received her BS in Psychology in 2016 and started her career in the Financial Industry in 2010 when she started helping in the office. After acquiring her degree, she came on full-time in March 2017 as Dee’s business partner and Main Associate Advisor helping clients navigate the intricacies of investing for retirement and overall successful financial planning.

In 2021, she was named an Elite Producer with American Equity amongst other accolades.

In Mandee’s spare time, she likes to go to the gym, spend time with her boyfriend, friends and family. She is an animal lover and rescuer. She has 2 German Shepherds that she rescued from the shelter 6 years ago. She still enjoys almost all things Psychology related and is constantly researching something. She enjoys meeting new client prospects and likes speaking with her current clients. She loves helping people.

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