A Connecticut retirement planning lawyer provides advice to seniors who want to achieve financial security during their senior years. Saving enough money to retire is really hard, and many people don’t have enough set aside, The sooner you begin to work with a retirement planning lawyer, the easier it will be for you to build up a nest egg so you can enjoy your golden years without money worries.
Nirenstein, Horowitz & Associates knows the ins-and-outs of retirement planning and we can help you to make your plans for how to save and what types of accounts to invest in. In addition to deciding how much money to put aside, however, there are also other important considerations when making your retirement plan.
One of the issues that you need to take into account also involves what the tax situation will be when you begin to draw from your retirement fund. Recently, Courant.com published an article about retirement taxes in Connecticut, discussing a proposal to exempt retirement income from state income tax.
A Connecticut retirement planning lawyer can help you to understand how your retirement income will be treated by state law, what your tax burden is likely to be as a senior, and what changes to the law may affect your taxes in the future.
Exempting Retirement Income from Income Tax
The article published in the Courant was based on a letter suggesting that retirement income within the state of Connecticut should not be subject to income taxes. In particular, the letter proposed that the state should not tax Social Security or private pensions.
The state already does not tax pensions that are provided to local teachers, nor does it tax tier 1 Railroad pensions. If the proposal to scrap the taxes on private pension income and social security benefits were to move forward, the new rules would simply be adding to the class of seniors who are protected.
The proposal suggests that the economy of Connecticut could benefit from eliminating taxes on retirement income for all seniors. As an example, the letter writer pointed to the impact of tax policies in the 1970s and in the 1980s. During that time, New York passed higher taxes and people flocked to Connecticut from New York in order to take advantage of the more favorable tax climate. Now, however, the reverse might be happening. Since New York does not tax Social Security benefits and provides partial tax relief for at least some income from pensions, New York may be a more attractive option for retirees and seniors from Connecticut may decide they are better off spending their golden years on the other side of the state line.
If Connecticut lawmakers heeded this advice, they would join numerous other states which don’t tax pensions and Social Security, as New York is not the only jurisdiction to offer special protections from taxation to seniors. Seniors live on fixed incomes, they must make their investments last, and many seniors cannot work or do not wish to do so. As a result, favorable tax treatment is very important because not having to pay a large tax bill can make their money last longer and go farther.
Tax Planning for Retirement
It remains to be seen if Connecticut will ever make a shift towards protecting more seniors from income taxes on their pensions and social security. Monitoring any developments to state laws on income taxes is very important for seniors so they can make smart choices about where they would like to live and how they plan to invest.
For example, there are some types of IRAs that will allow tax-free investments, while others require investing with after-tax funds and don’t assess taxes on growth. If you consider what your tax situation is likely to be like as a senior citizen, you can decide what kind of investment accounts you wish to take advantage of.
Getting Help from A Connecticut Retirement Planning Lawyer
Nirenstein, Horowitz & Associates is here to help with your retirement planning. Our Connecticut retirement planning lawyers have assisted many clients throughout the state to make solid, strategic plans for a secure retirement. Whether it is assessing the impact of taxes on your nest egg, helping you to set savings goals, protecting your assets, or more, our legal team has what it takes to help you achieve financial security during your senior years.
To find out more, join us for a free seminar to get detailed info about tax implications of estate planning. You can also give us a call at 860-548-1000 or contact us online to speak with a Connecticut retirement planning lawyer.