To minimize the tax bite, receive your retirement income in a way that will
stretch out your tax liability for as many years as possible. “The Basics of
Tax Planning” shows you tax planning strategies. For example, unless you
absolutely need the capital to live on, do not take distributions from your IRA
or Keogh until you reach age 701/2. This strategy allows the maximum amount of
time for your assets to accumulate tax deferred.

If you withdraw funds from an insurance contract, first take out your original
principal, which is not taxable, then receive distributions from investment
earnings, which are subject to taxation. If you are in the top tax bracket, you
may want to sell investments producing taxable income, such as Treasury or
corporate bonds, and buy municipal bonds paying tax-free income. If you live in
a high-tax state, buy bonds issued by that state to sidestep both federal and
state taxes.

Take full advantage of the many provisions in the tax code aimed at senior
citizens. If you are age 65 or older, the following provisions apply:

• You must file a return only if you report a gross income of $8,300 or more for a single person, or $14,650 for a married couple filing jointly.
• If you do not itemize, you qualify for a higher standard deduction of as much as $1,100.
• You may qualify for a tax credit if you do not receive Social Security or railroad retirement benefits.
• All income you receive from Social Security is tax free if your provisional income is $44,000 or less and you are married, filing jointly, or if your income is $34,000 or less and you file singly, as the head of a household, or as a widow or widower.
• If your income is between $32,001 and $44,000 as a married couple filing jointly, or between $25,001 and $34,000 filing singly, you are taxed on as much as 50 percent of your Social Security benefits. If your provisional income is $44,000 or more and you are married, filing jointly, or if your provisional income is $34,000 or more and you file singly, you will have to pay income tax on up to 85 percent of your benefits.
• If you move into a continuing-care or life-care community, the portion of your monthly fees allocated to health care services is deductible as an itemized medical expense.

^^^^^^^^^^^^^^^^^^^^^^^^^
RESOURCE | RESOURCE | RESOURCE
^^^^^^^^^^^^^^^^^^^^^^^^^
You work hard for your money.
But do you maximize the money you earn?

Everyone’s Money Book shows you how to proceed confidently into
your future. In this completely revised and updated bestseller,
Jordan Goodman covers all of the options available for managing
your money wisely in friendly, easy-to-understand language.

Packed with worksheets, step-by-step instructions, charts, graphs,
application forms, quizzes, and more than 6,000 resources to help
you turn concepts into actions, Everyone’s Money Book is the most
comprehensive, accessible, and easy-to-use book available.

Over 200,000 copies sold.

Order Everyone’s Money Book (970 pages) today for only $30.
www.moneyanswers.com/bookstore/

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
ACTION STEP | ACTION STEP | ACTION STEP
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Payoff All of your Debts
in 5-7 Years using the
money you ALREADY make!
DebtIntoWealth