Most people focus on how much money they have saved for retirement.
But where that money lives can be just as important.
A dollar in a checking account is different from a dollar in a traditional retirement
account. A dollar in a Roth account is different from a dollar in a taxable investment
account. Each may be taxed differently and each may play a different role in retirement
income planning.
This is called tax diversification.
At G Wealth Strategies, we believe tax diversification is one of the most overlooked
parts of retirement planning.
Many people spend decades saving into retirement accounts without thinking about how
withdrawals will be taxed later. Then retirement arrives and they realize that every dollar
withdrawn may not be a dollar they get to spend.
Taxes can affect monthly income, investment decisions, estate planning and even how
long assets last.
A strong retirement plan should consider three general types of money.
The first is taxable money. This may include bank accounts, brokerage accounts and
other assets where taxes may be due on interest, dividends or gains.
The second is tax-deferred money. This often includes traditional retirement accounts
where contributions may have received favorable tax treatment, but withdrawals are
generally taxable later.
The third is tax-free or potentially tax-advantaged money. This may include Roth
accounts or certain properly structured strategies that can provide more flexibility later.
No single bucket is automatically best.
The right mix depends on income needs, tax brackets, age, estate goals, charitable
intentions and family circumstances.
The key is flexibility.
If most of your retirement savings are in one tax category, you may have fewer options
when income is needed. If your money is spread across different tax categories, you
may have more control over how and when to take withdrawals.
That flexibility can become especially important when tax laws change, expenses rise or
family needs shift.
Tax planning should not wait until April.
It should be part of the retirement income conversation all year long.
This is why coordination matters. Your financial advisor, CPA and estate planning
attorney should not work in separate silos. They should communicate so that
investment decisions, tax decisions and estate decisions support one another.
In Jewish tradition, wisdom includes looking ahead and preparing responsibly.
Tax diversification is part of that preparation.
A final thought:
The question is not only, “How much have I saved?”
It is also, “How will my savings be taxed when I need them?”
Because in retirement, what you keep matters just as much as what you have.
About the Author
Glen R. Golish is the Founder and CEO of G Wealth Strategies and a Forbes-recognized Top
Financial Security Professional. He works closely with families on comprehensive financial and
estate planning, including cross-border considerations for those navigating U.S. and Israeli
planning needs.
Important Disclaimer
Please seek qualified legal and tax advice before implementing any planning strategies, in
conjunction with guidance from G Wealth Strategies.
Contact Information
3010 N. Military Trail, Suite 318, Boca Raton, FL 33431
Office: 561-869-4600 | Cell: 561-239-9400
www.gwealthstrategies.com
Investment Advisory Contact
Yosef Benson
yosef@gwealthstrategies.com
786-376-3548
Property & Casualty Insurance Contact
Rafi Benzaquen
rafi@gwealthstrategies.com
