Our client was moving from full-time to part-time work as he transitioned into retirement.
With the client’s income reduced by part-time work, he fell into a lower tax bracket, which positioned us for strategic tax planning. Before, he needed the full pretax deductions in his 401(k) for tax liability purposes, but he could now begin building out his Roth bucket. He was also able to start selling highly appreciated company stock at a lower capital gains rate.
Our first action was to move all deferrals to Roth from what was previously a large pretax bucket. We set up a rollover of pretax to IRA to enable more control, and Donor Advised Funds accounts for tax loss harvesting.
