Retirement planning that starts with the tax bill.

Traditional 401(k)s, 403(b)s and IRAs are tax-deferred: contributions often lower your taxes today, but withdrawals are taxed as ordinary income and required minimum distributions eventually force withdrawals. Roth accounts are taxed up front, and qualified withdrawals are tax-free. Brokerage accounts have no special treatment, but gains are often taxed at lower capital gains rates and losses can be used. Withdrawals from retirement accounts before age 59 and a half may also carry a penalty unless an exception applies.

A Roth conversion moves money from a traditional IRA or 401(k) into a Roth. You pay income tax on the amount converted that year, and the money can then grow and be withdrawn tax-free. It depends on your tax bracket now compared with later, how you will pay the tax and how long the money stays invested. It is not right for everyone, so we run the numbers on your actual return.

Often in lower-income years, such as the years between retiring and starting Social Security or required distributions. Converting a little each year, up to the edge of a tax bracket, can keep the tax lower. Extra income in a conversion year can also affect Medicare premiums and how much of your Social Security is taxed, so we check those first.

Selling an investment at a loss to offset capital gains and up to $3,000 a year of ordinary income, with unused losses carried forward to future years. The proceeds are reinvested in a similar investment so you stay in the market. It only applies to taxable accounts, not IRAs or 401(k)s.

Broad index funds and ETFs make harvesting practical, because a loss can be swapped into a similar but not identical fund. Separately managed accounts that hold individual stocks can often find more losses to harvest than a single fund. Silver Grove builds portfolios with this in mind.

If you buy the same or a substantially identical investment within 30 days before or after selling it at a loss, the loss is disallowed. That includes purchases in your IRA or a spouse’s account, which is why coordinating the investment and tax sides matters.

Investing with after-tax results in mind. That includes holding tax-inefficient investments, such as many bond funds, in tax-deferred accounts; favoring index funds and ETFs that distribute fewer capital gains; considering municipal bonds for some high earners; and selling gains in years when they may be taxed at a 0% federal rate.

Withdrawals from an inherited traditional IRA are generally taxed as ordinary income. Most beneficiaries other than a spouse must empty the account within 10 years, and in many cases take withdrawals each year along the way, so timing matters. Inherited Roth IRA withdrawals are generally tax-free, though the 10-year rule usually still applies. A surviving spouse often has more options, including treating the IRA as their own.

Inherited stocks, funds and real estate generally take a new cost basis equal to their value at the date of death, so selling soon after can mean little or no capital gain. Not every asset gets this: annuities and savings bonds can carry built-in income tax, and real estate, business interests and property abroad need careful valuation.

New York does not have an inheritance tax on beneficiaries. Any estate tax is generally the responsibility of the estate. Income from inherited assets, such as IRA withdrawals or later gains, is taxable to you. If you are the executor or trustee, see our trust and estate tax returns page.

No. You are never required to use Silver Grove to work with Sterling, and we are glad to coordinate with an advisor you already have.

No. We work with clients nationwide. Everything can be handled virtually, from meetings by video to signing documents and sharing files securely online, and you are always welcome at our offices in Orchard Park, West Seneca and East Aurora.