The key to influencing your tax burden is to diversify your income sources. That’s because ordinary income (W2, 1099, etc.) is taxed at a higher rate than any other source—and it’s why most Americans, regardless of their net worth, generally have a higher tax rate than most billionaires. Their wealth is generated through things like capital gains, dividends, and real estate interest, which all have lower tax implications than ordinary income; and they have an intentional tax plan that adjusts where they invest.
Diversifying money based on the way it will be taxed is a critical step in developing an effective tax strategy. That’s why with our clients, we’re focused on how to better take control over the taxes they pay on that income—specifically by help creating streams of income that are tax-free.
We’ll discuss this in detail in our virtual Creating Tax-Free Retirement Income workshop, including:
• Investments that may provide recession-proof income
• 3 vehicles that may provide Tax-Free Retirement Income
• While Roth IRAs have contribution limits of $7,500/year, learn which other vehicles have no limits