There are generally three categories of tax treatment for your retirement savings.

Taxable, where you pay taxes every year on your earnings.
Tax-deferred, meaning you don't pay taxes until you withdraw money.
Tax-free, where you do not pay taxes on your earnings at distribution.

Each category has different rules, different tax treatment, and different advantages and disadvantages.

But all too often, many people have all their retirement savings in just one or maybe two categories and when tax rates or rules change, you might be unable to make adjustments to your retirement income.

That is why a retirement strategy that includes a strategy of tax allocation can be important.

Much like you may use asset allocation to diversify your investments, tax allocation diversifies your retirement plan components into vehicles that are taxed differently.

That way should tax rates or rules change for one part of your retirement strategy, you could shift to using retirement funds from another area.

The Annuity Expert can help you understand how various insurance products can help you achieve a tax allocation strategy and how different retirement savings vehicles can work together to benefit your income needs in retirement.

Learn More: https://www.annuityexpertadvice.com/reducing-taxes-when-you-retire/