Manage and Reduce Your Tax Burden

Whether you are in the process of being, or are currently we enter into the time where we must now draw income from our investments, this creates a significant tax consequence. Our job here at Prestige Financial Group is to show you strategies that you can utilize to either eliminate, or decrease your tax burden. Furthermore, with the uncertainty of today's tax brackets...the majority of pre and post retirees have a significant portion of their assets inside of some form of a tax-deferred acount, which means that if taxes go up, less of that money belongs to you, and more belongs to the government. Our job is to help you position those assets into accounts that you control, where wealth is being generated, and taxes deferred.

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Taxable Accounts


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401K's have become the "go-to" employer retirement program. Most of these plans include employer-matched contributions, where the company will match a certain percentage of your contributions. All earnings grow tax-deferred until retirement, at which point the money withdrawn will be taxed at your current income-tax level. Upon retirement, most 401K account holders will have the option to participate in what's called a "401K Rollover", where the assets are transferred to a new account, where more growth and/or income can be generated, while avoiding taxation and continuing to grow the assets in a tax-deferred fashion.


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The Individual Retirement Account was introduced in 1974. Anyone with earned income can contribute, however there are limitations to the amount of contributions one can make throughout the course of the year. As with most retirement plans, all contributions are tax-deferred until withdrawn. I.R.A.'s are beneficial in the fact that they are controlled solely by the owner, therefore an employer will not sponsor an I.R.A. like other retirement plans, rather the person that seeks to start one can do so at his own discretion. I.R.A.'s require minimum distributions to be taken out once the individual reaches age 70 1/2, there are also minimum distribution requirements for inherited I.R.A.'s. While the tax-deferred growth is extremely beneficial while working, once retired it is imperative that you manage and rid yourself of the tax-burden created from having an I.R.A.

Deferred Comp.

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Deferred Compensation is an agreement between an employer and employee that defers a predetermined amount of compensation from the employee until a later date, usually retirement. With Deferred Compensation programs, you have both "Qualified" and "Non-Qualified". Qualified means that the compensation deferred is done so on a pre-tax basis, and thus when withdrawn, the entire account becomes taxable. Non-Qualified Deferred Compensation programs defer compensation on an after-tax basis, thus the money is taxed initially, and when withdrawn only the gains are taxable. Most Deferred Compensation programs have a multitude of investment options to choose from, and are advantageous in the fact that gains are always tax-deferred. Having a Deferred Compensation account is a great way to save for retirement, but once retired, it is very important to find ways to either manage, reduce, or eliminate the tax-consequence that Deferred Compensation accounts create.

403 B

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Sometimes referred to as TSA Plans (Tax Sheltered Annuities), 403 B Plans are retirement plans designed for employees of public school systems, and non-profit organizations such as charities and churches. These plans are flexible in the fact that they can be designed similar to 401 K's, where the employer matches contributions, or can be solely the result of salary deferrals on behalf of the employee. These accounts are usually tied to some form of investment, and are tax-deferred until withdrawn.

Keogh Plan

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Similar to a SEP I.R.A., a Keogh Plan is a tax-deferred retirement account with much higher contribution limits than most retirement plans. Keogh Plans are available to self employed individuals (including independent contractors), and owner-employees of unincorporated businesses. Those that are self employed or business owners can maintain these accounts in addition to an I.R.A. These accounts also grow on a tax-deferred basis, and the account is fully taxable upon withdraw.


Self employed

The Simplified Employee Pension is another type of I.R.A. account designed for business owners and employees that allows for much larger yearly contributions than a traditional I.R.A. The same tax rules apply to a S.E.P. I.R.A. as they would a traditional I.R.A. account, with capital gains being taxed deferred and taxable at the account owners current income tax level upon withdrawal.