Before or after?

Using the right tax strategy to make the most of your retirement

Key takeaways

  • Understanding how retirement accounts are taxed can help you maximize your retirement savings
  • You have three options when it comes to taxation planning and retirement savings
    • Taxable accounts
    • Tax-deferred accounts
    • Tax-exempt accounts

Saving, withdrawing and how to decide where and when... Subtle differences in creating your retirement strategy can make a big difference in the growth of your after-tax wealth. A number of factors, including current tax rates, future tax rates, your current income, future levels of income, the order in which you begin to draw from your accounts, and more, come into play.

When considering which accounts to save in, you need to make sure your tax choices sync up with your goals and their timeframes. Taxable accounts are often used for near-term saving and spending and for needs such as developing an emergency fund or for an expected major expense prior to retirement, while tax-deferred and tax-exempt accounts are often used for long-term savings. If you have begun to withdraw retirement funds, or are about to, explore our tax-efficient approaches in the new Modern Retirement Monthly.

To get even more perspective on building and drawing from retirement funds, talk to your UBS Financial Advisor or find one