How to Avoid the Widow’s Tax (Before It’s Too Late)

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1M ago 17:30

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When one spouse passes away, the survivor often faces what is known as the “widow’s tax.” It is not an official IRS tax, but the impact of moving from married to single tax brackets. A couple earning $120,000 in the 12 percent bracket can see the surviving spouse pushed into the 24 percent bracket with the same income. This tax bracket compression happens at the most vulnerable time.

Watch as James outlines three strategies that help protect a surviving spouse from this financial burden. Strategic Roth conversions can reduce future tax exposure by shifting assets from pre-tax to Roth while in lower brackets. Maximizing Social Security benefits creates a stronger income floor through survivorship benefits. Understanding and applying the IRS life expectancy tables for Required Minimum Distributions ensures more efficient withdrawals.

These approaches require careful timing and planning, but they can ease the long-term financial impact on a surviving spouse. Proactive strategies today can secure greater financial stability for tomorrow.

Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.
The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
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Chapters

1. Understanding the Widow's Tax (00:00:00)

2. Case Study: $2.7M in Investments (00:02:46)

3. Roth Conversion Strategy for Protection (00:03:00)

4. Maximizing Social Security Benefits (00:08:56)

5. Understanding RMD Tables (00:10:48)

6. Takeaways for Spouse Protection (00:16:10)

324 episodes

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