How Can an Accountant Help with Retirement Planning?

A person who wants to get started saving for retirement but is unsure of how to do that may want to know, “How can an accountant help with retirement planning?” A person has a few options for getting started with retirement planning, including working with a financial advisor or a certified public accountant. Here are a few ways that accountants could help a person who wants to get started with planning for retirement.

Advice on Specific Tax Situations

Accountants provide advice about specific tax situations. Most people do not have complicated taxes, but some do. Some situations that can complicate a person’s taxes include owning a business, having a large income, having many investments, or owning one or more rental properties. People who intend to give their children or grandchildren a lot of money and people with an income of more than $200,000 per year could also benefit from tax advice provided by certified professional accountants. For a person who will continue having a high income at retirement, this advice can be especially useful for tax deductions and credits.

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Management of Income from a Rental Property

Many people own a rental or investment property. This could be a part of their plans for income during their retirement years. That income can complicate tax situations and the ability of a person to get their full Social Security benefit. Accountants can provide advice about how to manage the income from a rental property at and after retirement. Owning a rental property is a lot like owning a business. It involves liabilities, income, and expenses. Accountants can help a person properly file their federal, state, and local taxes for the income provided by the rental property.

Planning After a Big Life Change

According to The Balance, accountants could help a person plan for retirement if that person experiences a sudden or big life change around the time of retirement or shortly after. For example, if a person planned to retire at the age of 65 and rely on their younger spouse’s income for a while, but their spouse dies at age 60, they would benefit from a consultation with certified professional accountants. The accountants could advise on the tax implications of the working spouse’s death. Other big life changes, such as a divorce, a large inheritance, or receiving a large capital gain could also necessitate the tax advice of certified professional accountants.

Closing a Business

A person who is a small business owner or who is self-employed as a sole proprietor should work with accountants if they plan to close their business at retirement. There are tax implications associated with closing a business, and the accountants would be able to advise the individual about how to handle that situation. If the person is selling their business to someone, the accountants could also provide advice about the tax implications of the sale.

The earlier a person starts planning for their retirement years, the better the chance they have at having financial security during their senior years. Retirement plans look different for each person. Knowing the answer to, “How can an accountant help with retirement planning?” allows a person to take action and choose the right type of financial professional to work with for their retirement savings and investment goals.

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