Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

Save Over $1 Million in Taxes

8 Dec 2024 · 1 min

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This short transcript excerpt from Craig Wear, CFP® (video "Save Over $1 Million in Taxes") explains that multiple interacting factors can greatly increase lifetime taxes. Specifically, he notes that required minimum distributions (RMDs) can interact with Social Security income to increase the portion of Social Security that is taxable — shifting from 50% taxable up to 85% taxable — and that this cascading effect can cause substantial additional taxation for some retirees.

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So a lot of people ask, well, how can you save people over $1 million in taxes? And the reason is we got all these things that are kind of cascading down to be a big deal. Some people you're going to have a potential impact on your RMDs because of your Social Security income. The RMD may cause your Social Security be from instead of 50% to 85% taxable. Now, there are going to be a lot of people on this that you already are going to have to suffer through that the rest of your life. And congratulations, you got enough income where that happens. But for others, it's going to cause an extra taxation.