Retirees should consider tax implications

May 19, 2011

Retirees ought to consider the tax implications of their savings accounts

When deciding where they would like to put their assets heading into retirement, consumers ought to consider the tax implications of keeping their money in certain savings account, said an expert.

Jill Perlin, vice president at an annuities firm, wrote for the Coastal Courier newspaper in Georgia that consumers need to avoid putting their retirement money into a number of accounts that come with tax penalties. For instance, mutual funds, stocks and certificates of deposit cannot be drawn on without first paying taxes, she wrote, while Roth IRAs can allow seniors the chance of withdrawing their savings without first paying taxes.

The latter account can be particularly valuable in the event of an emergency later on in life. Additionally, annuities, Perlin wrote, could offer retirees the greatest amount of flexibility tax-wise.

Regardless of which retirement vehicle they choose, retirees would be remiss not to protect their investments without a life insurance policy, said the report.

Retirement savings accounts can only go so far in protecting a family financially in the absence of a main breadwinner, experts say, underscoring the value of a term life insurance policy.

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