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https://vanguardblog.com/2020/04/13/3-tax-tips-to-consider-in-the-current-market/

3 tax tips to consider in the current market

2020-04-13 00:00:00, Lauren WybarJessica McBrideMatthew BarrovecchioJackie YoussefRich PowersAndy ClarkeJoe Davis, Vanguard Blog

Content Categorization
/Finance/Financial Planning & Management/Retirement & Pension

Word Count:
1427

Words/Sentence:
30

Reading Time:
9.51 min

Reading Quality:
Adept

Readability:
13th to 15th

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Taking distributions during a down market could mean locking in those market losses.

New retirees are often surprised at the tax implications of RMDs, which can affect taxes on benefits like Social Security and Medicare parts B & D premiums.

However, since future tax laws can always change, I recommend diversifying your portfolio with a mix of tax-deferred and Roth accounts in addition to taxable accounts.

3.

If you anticipate earning more and paying higher income taxes in the future, you may want to consider a Roth.

Many people will face higher taxes after the TCJA of 2018 (Tax Cuts and Jobs Act) sunsets at the end of 2025.

In the meantime, I'm looking for investment opportunities in the current market, using the information I have, to make the best of a challenging situation.

*If you cancel an automatic distribution this year, you'll have to reactivate it in 2021 to help ensure you take your full RMD for next year.

It's hard to keep perspective in the middle of a crisis, especially when there are so many unknowns.

At the same time, the current situation has created several potential tax-planning opportunities.

Keywords
rmds, market volatility, taxes, tax-planning

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