taxfree | Common News Update

Aug182019 by adminNo Comments

How to get the most from this tax-free source of retirement income

Finance

Glenn Daily, a fee-only insurance consultant, owns a whole life insurance policy.Glenn DailyRoth IRAs and Roth 401(k) plans aren't your only sources of tax-free income in retirement.Say hello to so-called permanent life insurance — a policy with an interest-bearing account that's known as cash value.This cash value accumulates without being subject to capital gains taxes, and the interest rate it accumulates can beat what you'll get in a traditional savings account. "It's been one of my best fixed income investments because the cash value grows at more than 4% a year consistently," said Glenn Daily, a fee-only insurance consultant in New York. It's "a low-risk and tax-deferred fixed income investment with easy access to policy loans."The 66-year-old has a whole life insurance contract tha...

Trump's budget could open this tax-free savings account to people on Medicare

Finance

President Donald Trump's proposed budget might make it easier for seniors to save for health-care costs on a tax-free basis. The proposal calls for allowing Medicare beneficiaries to make tax-deductible contributions to health savings accounts "associated with high-deductible health plans offered by their employers or a Medicare Advantage plan." That's a change from current law, as people enrolled in the retiree health-care program cannot fund an HSA. Though it's uncertain whether this measure would be supported in Congress, this isn't the first time ...

These two accounts will ramp up your tax-free income in retirement

Finance

Shave down your tax bill in the future by funding these two savings accounts in the present. Employees are likely familiar with the traditional 401(k), an account that allows you to put away pretax dollars and have them grow on a tax-deferred basis. Once you begin drawing down income in retirement, you will pay taxes on your withdrawals. But not all retirement accounts are the same More from Fixed Income Strategies:Investors avoid emerging markets due to currency volatilityWhat to do with an ...