We believe rising taxes may be a concern for anyone — especially for individuals approaching retirement. Having an appropriate strategy in place for how you will pay taxes on your retirement income can be an important component to living on a fixed income and minimizing surprises come tax time.

Establishing a tax-deferred account means your money can compound interest, without paying current income taxes, potentially allowing it to grow at a faster rate. Tax-deferred vehicles only allow you to defer paying income taxes until the money is withdrawn — presumably during retirement when you may be in a lower tax bracket. However, few financial account types avoid taxes altogether.

Because tax-deferred accounts are generally designed to help individuals work toward specific long-term goals, there may be restrictions on when money can be withdrawn without penalty. Early withdrawals may be subject to charges and fees. Withdrawals prior to age 59 ½ may be subject to an additional 10 percent federal tax.

Our firm is not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. You should consult a legal or tax professional on any such matters.