Altfest advisor tackles frequently asked retirement tax questions
To paraphrase a line from “Hamlet”: To itemize or to take the standard deduction? That is the question.
Okay, maybe it’s not exactly Shakespeare, but it is a question frequently posed by clients to their financial advisors. A greatest hit, right up there with: “When should I take my required minimum distribution?”
While such questions are quite common, in many cases there is a tax element involved that can be tricky for advisors, often sending them for the input of an external CPA. Having that tax expertise in-house is a boon for any wealth management firm.
It’s even better if your financial advisor has a CPA license along with that CFP designation.
To answer some of these oft-repeated questions, InvestmentNews caught up with Jessica Nelson, who was a senior tax accountant at Deloitte and Ernst & Young before joining Altfest Personal Wealth Management as a financial advisor in 2021.
InvestmentNews: What’s the best way for clients to defer taxes or max out their retirement plans during pre-retirement?
Jessica Nelson: For those years leading up to retirement, clients usually have two things on their mind: wealth accumulation and saving on taxes. The great thing is by contributing as much as you can into those pretax retirement accounts, you solve both of those issues. Also, something I like to remind advisors about is that SECURE Act 2.0 is really going to change the way clients can do that. Soon they’ll be able to do a lot more with those cash contributions.
IN: And then when they finally get to put their feet up in retirement, how should they adjust their spending?
JN: The way I like to think about it is, where are we getting the funds from? They have a lot of different options, including Social Security, taxable
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