Biden’s Tax Plan Makes Roth IRA Retirement Savings Even More Attractive | Smart Change: Personal Finance | #retirement | #elderly | #seniors
The word is out that President Biden plans to give the federal tax on capital gains a makeover. But the results may not be so pretty for stock investors. It could mean a higher tax bill that could eat into an investor’s gains accumulated in the stock market.
One of the best defenses against future tax liabilities is a tax-advantaged account like a Roth IRA (individual retirement account). For younger investors, investing in a retirement account may not be as glamorous as putting money in a regular brokerage account. But it can pay dividends in the future — especially when you are protected against unexpected tax hikes.
Here’s a look into Biden’s tax plan and how the Roth IRA can come in handy.
A preview of how Biden’s tax plan could look
Biden has dropped a few hints about his plans to increase taxes for wealthy individuals. Recently, there was news about the president’s plans to shift the capital gains tax structure from a top rate of 23.8% to 43.4%. This tax hike could impact those with $1 million in annual income. Nothing has been set in stone yet, but it’s best to get ahead of the curve and determine the best strategy for your portfolio.