Income Tax Buckets

Have you ever wondered how your different assets are taxed? Some of your assets are taxed now, like your salary, bonuses, and unearned income like interest from savings accounts or stocks. Some investments, like 401(k)s, accumulate tax-deferred, so you don’t pay the tax until you receive the distribution later. For these types of assets, you’ll pay the tax rate that applies whenever you receive the money, rather than the tax rate at the time you accumulated the money. Then some strategies, like Roth accounts, allow you to accumulate wealth tax-free. Watch this short video to learn more about your various “tax buckets.”

So how do you ensure you have the right amount of money in the right buckets? Talk to an expert—we’d love to help you identify the best strategies to prepare for a future that maximizes your hard work and creates stability for you and your family. If you’d like to know more, just give us a call!