Why Taxes in Retirement Matter

 

Many retirees are surprised to learn that their biggest expense in retirement isn’t healthcare or travel—it’s taxes.

 

Without proper planning, you could:

• Pay higher income taxes than expected.
• Trigger costly Medicare premium surcharges.
• Face Required Minimum Distributions (RMDs) that force you to withdraw more than you need.
• Leave your heirs with a large, taxable inheritance.

That’s why tax-efficient retirement planning is a cornerstone of everything we do at Protection Plus.

 

Strategies We Use to Reduce Your Tax Burden

 

Our advisors integrate tax-smart strategies into every retirement income and estate plan we build. Here are a few of the most common—and most powerful—tactics we use with clients:

 

🔹 1. Roth IRA Conversions

Gradually converting funds from a traditional IRA or 401(k) into a Roth IRA allows you to pay taxes now—when rates may be lower—and enjoy tax-free withdrawals later. Roth IRAs are also not subject to RMDs, making them a powerful estate tool.

 

🔹 2. Sequencing Income Wisely

By drawing income in a specific order (e.g., from taxable accounts before tax-deferred ones), we help reduce your adjusted gross income (AGI), avoid Medicare surcharges, and preserve lower tax brackets.

 

🔹 3. Annuities for Tax Deferral + Guaranteed Income

Certain annuities can defer taxes while generating guaranteed lifetime income, creating both predictability and efficiency. We often integrate these into a broader plan to replace bonds or CDs while minimizing ongoing taxes.

 

🔹 4. Qualified Charitable Distributions (QCDs)

If you’re over age 70½, you can donate directly from your IRA to charity—satisfying your RMD and excluding the amount from taxable income. This is especially helpful for retirees who are philanthropically inclined and tax-conscious.

 

🔹 5. Tax-Efficient Legacy Planning

We work with you to ensure that your estate is structured to avoid unnecessary taxes and probate fees. This may include using life insurance, trusts, Roth IRAs, and gifting strategies to preserve wealth for future generations.

 

Real Example: Strategic Tax Planning for a San Diego Couple

 

Cynthia and Michael, both retired educators from Oceanside, had over $1 million in combined 403(b) and 457 savings. They were concerned about future RMDs and rising taxes.

 

We developed a 5-year Roth conversion strategy, allowing them to:

• Reduce their taxable income before age 73.
• Lower their long-term Medicare costs.
• Create a pool of tax-free income they can access anytime.

Now, they have more flexibility—and their heirs will inherit a cleaner, more tax-advantaged estate.

 

How Protection Plus Guides You Through Tax-Smart Retirement Planning

 

We bring together decades of experience in tax, insurance, income planning, and estate strategy to design integrated financial plans tailored to your life.

 

Here’s what you can expect:

• A comprehensive tax assessment of your retirement assets.
• Customized strategies to reduce short- and long-term taxes.
• Integration with protected income and estate planning solutions.
• Ongoing updates as tax laws change or your needs evolve.

Take the First Step Toward Tax-Efficient Retirement

 

Every day you delay planning could cost you more in taxes later. Let’s fix that—together.

 

Schedule your complimentary Retirement Income + Tax Strategy Review and discover how much more of your money you can keep. Call us at (858) 352-6535 or send an email to glenn@protectionplusins.com to schedule your appointment.

 

Smart income. Low taxes. Lasting peace of mind.

 

Related Services:

• Guaranteed Lifetime Income
• Understanding Retirement Rollovers
• Estate Planning Strategies