Whether you're mid-career or nearing retirement, it's important to know where you're investing — and how those accounts could impact future taxes, experts say.
Many workers are heavily concentrated in tax-deferred savings via a pretax 401(k) plan or traditional individual retirement accounts, which incur regular income taxes on future withdrawals, based on federal tax brackets.
However, many advisors push for using a mix of pretax, after-tax Roth and taxable brokerage accounts for more flexibility in retirement.
The right mix can provide "a lot of different levers to pull to manage your adjusted gross income," explained certified financial planner Judy Brown at SC&H Group in the Washington, D.C., and Baltimore area.
Medicare Part B and Part D premiums are based on so-called modified adjusted gross income, which is your adjusted gross income plus tax-exempt interest, from two years prior.
Persons:
Roth, Judy Brown, Brown
Organizations:
SC, H, D.C, Finance, Medicare
Locations:
Washington, Baltimore