Frontload a 529 Plan
If you have grandchildren, you should definitely be aware of this new law change. Starting 2018, besides college costs, you can also use up to $10,000 every year per child tax-free for private elementary and high school costs. While there’s no federal tax deduction for 529 contributions, there are many state offering a state tax break!
You can frontload a 529 account with five years’ worth of gifts protected by the annual $15,000 gift tax exclusion. So a grandparent could gift $75,000 to a grandchild’s 529 account in one fell swoop.
2 thoughts on “7 Clever Tax Strategies Every Retiree Should Know”
I’m 72 1/2 I cant retire because of credit card debt I hav good credit but 33k in credit card total What do you suggest? I have never been late on my payments
I have concerns with the advice given.
1) According to IRS Publication 590B, you must be 70 1/2 to make such a contribution, not 70. Also, the limit is $100,000 not 4100,000, as your article suggests.
2) The advice to rollover to a Roth as soon as possible may cost tax money. Had one done it in 2017 the rates would have been higher than they will be in 2018. The issue of one’s personal marginal tax rate is not even mentioned. If one is in a 25% marginal tax bracket this year because of unusually high income, but expects to be in a 15% marginal tax bracket next year, your advice to do it as soon as possible will cost the tax payer money.