Strategic Financial Planning with Jason Groth of San Diego

In this enlightening video produced by Safe Harbor Solutions, the importance of strategic financial planning is covered. People must plan for their retirement in order to attain the financial security they desire. Jason Groth of San Diego is a wealth advisor with decades of experience who will help investors with strategic financial planning.

Investments for retirement typically fall into three major categories: tax-deferred, taxed, and tax-free. The category of tax-deferred includes 401(k), IRA, annuities, and social security payments. Under this category, individuals are taxed later during the distribution phase, which is done at ordinary income rates.

The category of fully taxed includes stocks, bonds, money market accounts, CDs, and mutual funds. This category is taxed right away at your ordinary income or capital gains rate.  While these investments are taxed at a higher rate than the other types, they have no requirements as to when the investor can withdraw funds. Additionally, many of these investments can offer potential gains that far surpass investments of categories with less taxes.

The category of tax-free includes municipal bonds, Roth IRAs, and certain types of insurance. Under this category, there are no taxes, including during distribution in most cases. A financial advisor can help clarify the specific rules regarding this category of investments, and how it might fit into the overall strategy of an investor.

Investors with substantial amounts of savings in the first two categories may experience greater than expected taxes during the years that they withdraw from their savings. Moreover, they must be aware of the specific rules regarding when they can withdraw from their savings without any penalties. Early withdrawals from a 401(k), which take place before the person is 59 1/2 years old, will be taxed at ordinary income with an additional 10 percent penalty. To avoid surprises with penalties and taxes, a financial advisor can help clarify the complex regulations involved.

A financial advisor such as Jason Groth of San Diego of Safe Harbor Solutions can help investors reduce their taxes by employing the right investment strategy. He breaks down the rules and regulations in a way that investors can easily understand.