7. Run your retirement numbers
A question Scott Bishop of STA Wealth Management in Houston, Texas, is hearing is whether the tax law does anything good or bad for a client’s retirement strategy. For those retiring before age 70 ½, the age when withdrawals from tax-deferred retirement savings plans such as 401(k)s become mandatory and thus raise your taxable income, lower tax rates could present a reason to convert a standard pre-tax IRA into a Roth IRA, which consists of after-tax money. Or clients may consider taking distributions from standard IRAs, which they can tap without penalty starting at age 59 ½, to take advantage of lower tax brackets and avoid a “tax time bomb” of having to take large required minimum distributions (RMDs) while in retirement. Those bombs can bump you up into a higher tax bracket.
8. Finally, just breathe
“You can get your knickers in a knot and worry about something no one knows enough about yet, or you can chill and prepare your questions and concerns for when the answers surface,” said Jon Ten Haagen, of Ten Haagen Financial Group in Huntington, New York. “Breathe in, breathe out, and repeat as necessary until your heart rate is back down to normal.”
This article was provided by Bloomberg News.