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Avoid tax trouble in retirement

Financial expert shares advice

Taxes are something we all have to deal with and it won’t be long before everyone starts thinking about filing their tax returns. However, when it comes to retirement, if you aren’t prepared to account for those payments then your taxes may include a shocking surprise.

Tom Jacobs, the founder and CEO of Jacobs Financial Services, appeared on “Live In The D” to offer some insight.

“So many of us have been taught and trained that the best thing to do is save in your company retirement plan, so pay period after pay period after pay period, we’re contributing. We’re building these really great retirement accounts, but often times people don’t realize we’re also building a massive, a massive tax bomb because the minute we start withdrawing money from tax-deferred retirement accounts the bomb goes off. That money coming out is considered income. You’re going to be taxed at whatever tax bracket you’re in in the year you take it out,” Jacobs said.

He says there are other places that you can save your retirement money like a Roth IRA. Watch the video above to hear Jacobs explain.