A $5 million nest egg is a significant amount of money, but it’s important to remember that taxes can take a big bite out of your savings. If you’re in the highest tax bracket, your $5 million nest egg could be taxed up to 37%.
That means you could lose nearly $2 million to taxes alone.
Here’s a breakdown of how taxes can impact your retirement savings:
- Traditional IRAs and 401(k)s: Withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income. It means you’ll pay taxes on the full withdrawal amount, even if you contributed to the account with pre-tax dollars.
- Roth IRAs: Withdrawals from Roth IRAs are tax-free, provided that you’ve met certain requirements, such as having held the account for at least five years and being at least age 59½.
- Capital gains: If you sell investments outside of your retirement accounts, you’ll need to pay taxes on the capital gains. Capital gains taxes are typically lower than ordinary income taxes, but they can still add up over time.
But what if you could do more with your $5 million? With proper tax strategies exclusively for your situation, you can retain more of your hard-earned money, enabling the kind of retirement you’ve dreamed of.
!Book your Tax Assessment Today and see how much more you can keep of your retirement savings!