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Retirement Planning – How Will Tax Rates Affect My Plan?

Retirement Planning – How Will Tax Rates Affect My Plan?

Photo Credit: Images_of_money

Retirement is something everyone in the workforce eventually hopes or plans for, but with definite changes to our tax system and new tax rates coming down the line, it is more important than ever to understand how the effects of these landscape changes could impact your investments and plans for the future.

There are six tax brackets in the U.S tax system and they are divided according to marginal tax rate and annual income.  Each of these six brackets and their tax rates will be affected by changes in 2013.

The six tax brackets as they stand now are at the following marginal tax rates; 10%, 15%, 25%, 28%, 33% and 35%. Each of these brackets will undergo marginal tax rate changes that could affect plans for retirement or investing in the New Year.

Bracket 1 (10%): An increase in tax rates will occur between 10 -15% in 2013 – How will this increase affect you?

Bracket 2 (15%): Income levels for married couples will change in 2013. This will cause a near doubling of short term gain rates.

Bracket 3, 4 & 5 (25%, 28%, 33%): There will be a 3% tax increase in the marginal tax rate position of each bracket.

Bracket 6 (35%):  This tax bracket currently sits at a 35% marginal tax rate but in 2013 will increase to 39.6%. That’s nearly a 5% increase.

With these changes undoubtedly making procedures less appealing for investors, it is imperative to do preventative financial planning. Here at Stock Connections, we are available to help businesses and individuals effectively plan for their future in response to these taxation and marginal tax rate changes.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

 

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