Many people who welcomed in the Tax Cuts and Jobs Act in 2017 felt that they would reap the benefits of reduced income taxes through 2025. However, some people are wondering about what will happen when that expires and how this could potentially influence their retirement.
Those most at risk of having to go through significant changes are those people who have savings in tax deferred accounts, such as 401(k)s or traditional IRAs. Some people could face major retirement challenges if they overly rely on their IRA or their 401(k).
There is a strong chance that in the coming years tax policy will increase the income tax rates and there is now a window of opportunity prior to 2025 when those plans could possibly be adjusted to minimize negative impacts. The passage of the recent SECURE Act highlights the importance of addressing your retirement account tax structure if these are part of a legacy you intend to leave behind for your loved ones.
If you are looking for the best way to analyze all of your assets and debts and to discuss how these should be incorporated into your overall estate plan, a knowledgeable attorney should be part of your process of determining how will you structure your estate plan for today, tomorrow, and well into the future.
An estate plan is not a set of documents that you complete and store away forever. Instead, these are living tools that need to be updated as circumstances change. You might find that your documents are accurate for a few years or that they need to be updated more regularly. To make sure you haven’t missed anything, add a calendar event once a year to review your documents and beneficiary forms.
Our knowledgeable Pasadena estate planning lawyers stay abreast of all updates in state and federal tax changes so that we can assist our clients with adapting their estate plans as needed.