@ginacardozawea1th: Think of your retirement money as sitting in different buckets. The bucket it’s in can affect when you pay taxes, so it’s worth knowing what’s in each one. 🪣 🔵 Taxable: Think bank and brokerage accounts. Interest and dividends may be taxed along the way, and selling an investment for a gain can create a tax bill. Because this money is accessible, some people use it to help pay the taxes on a Roth conversion. 🟢 Tax-deferred: Traditional IRAs and 401(k)s often let you put off taxes while you save. When you withdraw money that hasn’t been taxed yet, it’s generally taxed as income. That’s why the timing of withdrawals or Roth conversions can matter. ⚪ Tax-free: Roth IRAs and Roth 401(k)s are funded with after-tax dollars. When the rules for a qualified withdrawal are met, that money can come out tax-free. ⭐️ And then there’s the fourth bucket. 👀 It’s another way to think about what you may leave behind for the people you love. Curious how life insurance can fit into that part of the conversation? Message me “FOURTH BUCKET” and we’ll walk through it together.
