Legal Ways to Get a Tax-Free Retirement

You can contribute to a tax-deferred retirement plan, such as an IRA or 401(k), and it will be considered to have been made on your behalf. This means that you don’t need to pay taxes on the amount of money you contribute until you take it out (provided it’s used for qualified expenses).

The contributions grow tax-free in these accounts until withdrawn from the account at age 59½.* If this sounds like too much of a good thing for someone who wants their money now rather than later, don’t worry: You’ll still have access to that money when needed—but only after paying income taxes on any interest earned within those years.

A Roth IRA is a type of retirement account that allows you to make tax-free contributions. You may also opt to contribute funds into a traditional IRA, which allows you to defer taxes on your contributions until they are withdrawn in retirement.

Both options allow you to use after-tax dollars for retirement planning, but the way they work can vary greatly depending on whether or not you’re eligible for a deduction or credit when filing your return. If so, it could help save more money down the road!

• A SEP is a retirement plan that you set up with your employer. It’s considered more complex than a SIMPLE IRA, but it can help you save more tax-free money if you qualify for the maximum contribution of $13,000 per year.
• A SIMPLE IRA is another type of retirement account that’s easy to set up on your own and offers no required minimum distribution (RMD) rules—but only if you make less than $120,000 or use the account within five years after opening it (if earlier, then RMD begins).
• You can contribute up to $5,500 per year into either type of IRA; however, once your balance exceeds this amount at age 70½ (or age 50 if disabled), then all earnings count toward required distributions over time until they’re spent completely.*

A power of attorney is a legal document that allows another person or organization to make decisions on your behalf. It’s like having an appointed representative take care of your finances, even if you don’t live with that person anymore.

If it’s been more than two years since you established a will and passed away, then any IRA accounts left in your name may be subject to estate tax if they exceed the $5.43 million exemption amount for individuals ($6 million for married couples). You can avoid this by designating someone else as the trustee of those assets—and there are two ways of doing so: either through writing out a new power-of-attorney document (which must be signed by both parties) or through revoking an existing one altogether; whichever way works best for each individual situation will depend on whether or not you have already made any changes based off these guidelines set forth above!

• Be sure to consult a professional tax advisor.
• Be sure to consult a professional financial advisor.

We hope this article has helped you learn about the many different ways to fund your retirement plan. As you can see, there are many options available to you, so it is important that you do your research before making any decisions on how much to contribute or saving in retirement accounts.