💨 Abstract

Many financial planners emphasize the importance of considering "tax location" when planning for retirement, as taxes can be a significant expense. Roth IRAs are highlighted as a strong option for generating tax-free income in retirement, with contributions growing tax-free and withdrawals allowed at age 59½ without tax or penalty. However, there are income limits and contribution caps. Life insurance, particularly variable universal life policies, can also provide tax-advantaged retirement income, but it requires careful planning and management.

Courtesy: WTOP Staff