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Asset Manager Jonathane Ricci Discusses the Best Tax Strategies for Retirement

Tuesday, 02 November 2021 12:50 PM


Careful tax planning is one of the easiest ways to preserve your retirement income plan.

TORONTO, ON / ACCESSWIRE / November 2, 2021 / Use these strategies from asset/wealth manager Jonathane Ricci to help you hold onto the money you worked so many years for.

INTERNATIONAL CONSIGLIERE, Tuesday, November 2, 2021, Press release picture

The lower your taxable income, the lower the tax bill you'll pay. This is an especially effective strategy if you're on the low end of the income requirement for a certain tax bracket. If you can donate or save enough money to bump you down to a lower tax bracket, you may be able to save yourself thousands in taxes.

You can build your retirement funds and reduce your taxable income at the same time by maxing out your 401(k), traditional IRA, RRSP, and or equivalent tax program every year, Jonathane Ricci says. Money goes into traditional retirement accounts pre-tax, so you can lower your income level and possibly even your tax bracket while you're also investing in your future! As a bonus, when you put money in qualified retirement funds, it should grow tax-free until you withdraw it.

As an example, you can invest $19,500 in a 401(k) and $6,000 in a traditional IRA. If you're at least 50 years old, the limits increase to $26,000 and $7,000, respectively.

Note that a Roth IRA is taxed now rather than when you withdraw it, so it does not have the same effect, Jonathane Ricci warns.

Even though the standard deduction nearly doubled as a result of the Tax Cuts and Jobs Act, there are still options to donate in a way that helps preserve your money, says Jonathane Ricci. Giving to donor-advised funds, for example, allows you to invest your money and watch it grow tax-free until it's donated to the charity of your choice. If you invest enough to exceed the standard deduction, you'll be able to itemize your tax deductions.

You can also choose to save up the funds earmarked for donation and give a doubled amount every other year. Donating $20,000 would allow you to itemize your deductions and save money in a way that donating $10,000 would not, for example. This strategy may not work for all retirees--it's largely dependent on how much you usually donate and how close you are to the limit for itemizing your standard deduction.

Jonathane Ricci is a Management

Consultant in Toronto specializing in managing businesses, tax optimization, and wealth protection.


Jonathane Ricci


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