• Text Size: A A A

Tax Efficient Saving Strategies

Check the background of this financial professional on FINRA's BrokerCheck

Taxes are best managed in relation to a life-long plan. Would you rather pay more today while you’re earning more, or do you want to possibly pay more in the future when retired? The answer to this question is a driving factor towards the allocation of your assets between three major tax “buckets”:

  • Tax Deferred—401(k), Traditional IRA, 403(b), 457, Annuities
  • Tax Free at Withdrawal—529 college savings plans, Roth 401(k), Roth IRA, and death benefit proceeds from some types of life insurance
  • Taxable Accounts—Can yield earnings taxed as income, long-term capital gains or dividends.

Many people save consistently into the tax deferred “bucket” through their company 401(k) during their careers only to find that during retirement, their withdrawals from their IRA are taxed at their prevailing income tax rate.

Instead of putting all of your nest eggs in one basket, you can consider strategically distributing between the three categories. This could allow you to utilize the benefits of a graduated tax system for income and the benefits of lower tax rates for capital gains and dividends combined with the potential for tax-free income. The result can help you address your effective tax rate in retirement and provide the opportunity to “Build Your Own Paycheck”.

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.

AXA Advisors and AXA Network do not provide tax or legal advice.

Check the background of this financial professional on FINRA's BrokerCheck

Contact Info

Appointment Signup