In this episode of 'Retire with Style', Wade and Alex discuss the complexities of tax-efficient retirement planning, focusing on understanding preferential income, tax brackets, and the implications of additional income on tax rates. They explore the net investment income tax, strategic Roth conversions, and the significance of timing in retirement income planning. The conversation emphasizes the need for careful management of social security and Medicare surcharges, particularly during the fragile decade of financial planning leading up to and following retirement. Listen now to learn more!

Takeaways

• Preferential income includes long-term capital gains and qualified dividends.


• Understanding how income stacking affects tax rates is crucial.


• The net investment income tax can increase effective tax rates significantly.


• Roth conversions should be timed carefully to avoid higher tax brackets.


• Social security decisions can influence tax planning strategies.

Chapters

00:00 Introduction to Tax-Efficient Retirement Planning

02:46 Understanding Preferential Income and Tax Brackets

06:01 The Impact of Additional Income on Tax Rates

09:02 Navigating the Net Investment Income Tax

11:53 Strategic Roth Conversions and Tax Planning

14:55 The Importance of Timing in Retirement Income Planning

18:08 Managing Social Security and Medicare Surcharges

20:58 The Fragile Decade of Financial Planning

24:04 Conclusion and Future Planning Strategies

Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”