What Tax Consequences Should You Be Aware Of?

More than just simply filing your taxes by April 15 each year, what tax consequences do you need to keep in mind with your various investment accounts? On today’s episode of the Retirement Elevated podcast, Sean shares the pros and cons of different investment accounts.

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The View From The Pinnacle

Depending on your investment accounts, what tax consequences are coming your way? What are the pros and cons of the different investment account options?

Click the timestamps below to fast forward to certain points of the episode.

 

Thing’s You’ll Learn Along Today’s Journey

More than just simply filing your taxes by April 15 each year, what tax consequences do you need to keep in mind with your various investment accounts? On today’s episode of the Retirement Elevated podcast, Sean shares the pros and cons of different investment accounts.

What are tax-deferred accounts? How should they work in your plan? Whether you have a 401(k), 403(b), TSP, or IRA, you get a tax deduction upfront. But when you take the money out, you will have taxed on that income. What other rules do you need to know about this? What benefits do you need to keep in mind?

No one wants to throw away free money. So, if there’s an employer match available, make sure to take it. But before you put all of your retirement savings into one account, consider the other options available.

With a Roth IRA, you pay taxes upfront. Why does that sound like a good idea? You know the tax rate is low now, then the money would grow tax-free. Some companies even offer a Roth 401(k) which can provide a lot of advantages, especially if you’re younger.

What are after-tax or taxable accounts? Depending on what kind of investment you buy will determine the kind of tax liability you have. These are investments purchased with after tax dollars that could be sold tomorrow, even though you’re under retirement age.

What other investment accounts are included in your plan? Are CDs worth using? Will you or your heirs have to pay taxes on life insurance? Make sure to speak with your advisor to get the right variety of accounts and products as well as the information you need about the tax consequences or benefits they result in.

Listen to the entire episode or click on the timestamps below to skip ahead.

1:00 – What are the favorite activities right now with Sean’s kids?

3:05 – Different accounts have different tax consequences. 

6:27 – Should you take the employer match?

9:17 – What are taxable accounts?

10:21 – What about CDs?

11:19 – What do you need to know about tax and life insurance?

13:28 – Fun fact: How long ago did the iPhone first come out?

 

Looking Back From The Mountaintop

Putting money into that Roth 401(k) option, in a lot of cases–especially if you’re younger–could make a lot of sense.

-Sean Lee

 

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MEET YOUR HOST...

For over a decade, Sean Lee has helped families reach and maintain their financial goals. As a trusted advisor, he coaches and assists his clients with their financial goals by focusing on the fundamentals and takes a practical and personal approach when working with them.

As a trusted professional in Utah, Sean has been featured in The Wall Street Journal’s Market Watch, The Deseret News, The Salt Lake Tribune and USA Today. He has also been featured as a local financial advisor on Utah’s NBC station, KSL 5.

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