The Importance of IRA & Tax Planning in Maryland


Retirement only seems far away, or maybe it doesn’t. If you have acted responsibly, then you hopefully began saving for your retirement from a relatively young age. But saving and picking the right investments is only part of the process. Are you putting those retirement assets in a scenario where they receive the best possible tax treatment? Your retirement funds are supposed to grow over time and serve you later in life. Therefore, the federal government allows you to treat these assets differently for tax purposes. But you can only take advantage of special tax treatment if you know what tools are at your disposal and how to utilize them.

IRAs or individual retirement accounts are, as the name indicates, accounts which are designed for an individual’s retirement. The IRS allows these accounts so that you can save for your retirement. Traditional IRAs allow you to place untaxed income into the account, and the defer taxes until you retire. Roth IRAs allow you to place taxed income into the account, where it grows tax free. In either case, the driving principle is that your assets grow in an IRA so that your “nest egg” in the IRA is available to support you when you retire.

But there are annual contribution limits to IRAs, and many people fail to understand that your direct income and IRA contributions are not the only assets which the IRS can tax over time. Tax planning and retirement planning covers a significant amount of assets. Think of your home, vehicles, collectibles, real estate holdings, funds, business interests, or really anything else of value that you may own. As you near retirement, you may think of selling these assets or receiving income from them through some other means. Have you thought about what kind of tax implications are involved with such actions? Have you thought about what will happen under your estate plan if these assets realize their value?

Addressing these questions and issues is just as important as setting aside money for your retirement. Every person’s situation is unique, and their estate plan and retirement plan must reflect that. Depending on your level of existing wealth and income, you may need to consider additional accounts or special trusts in order to maximize the value of your retirement assets. It is often advisable for your retirement and estate planning attorney to work with your accountant so that both you and the important professionals in your life can fully understand your unique financial and tax situation. With higher taxes on capital gains and ever-changing IRS rules, your retirement, IRA, and tax planning require regular attention. You would never leave the stocks and securities portfolio in your retirement account unchecked and unchanged for years on end. So why not frequently assess your IRA and tax planning?

Making your estate plan a priority is always a good idea. Understanding the importance of your IRA and tax planning structure is critical to your estate plan and retirement plan. The experienced attorneys at Altman & Associates, including founder and Certified Financial Planner™ Gary Altman, will help you understand IRA and tax planning as it applies to your unique situation. We suggest that you meet with a knowledgeable estate and retirement planning attorney at least once a year, and always surrounding a major life event like the death of a loved one, the birth of a child, marriage, or divorce. You should not have to endeavor to understand the complex relationship between your income, assets, estate, and IRA and tax planning on your own. By understanding the importance of IRA and tax planning, and relying on the expertise of the Maryland tax planning attorneys at Altman & Associates, you will gain the assistance you need to ensure a positive retirement. Please visit the Maryland IRA and tax planning attorneys at Altman & Associates at one of our convenient office locations in Columbia and Rockville. Contact us by phone at (301) 468-3220 or online to schedule a consultation.

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