For the Defense - Volume 2, Issue 2 - 2017 - 9

Most employer-sponsored plans have administrative and investment management fees
associated with them; however, your employer
may assume some of those fees while you are an
employee. In retirement, those fees may become
your responsibility.
Another issue with employer-sponsored plans
is the unpredictable nature of business. Law firm
mergers are becoming increasingly common.
You can't always be sure if the company you
retire from will exist in the same form several
years down the road. If you are enrolled in an
employer-sponsored plan and a merger takes
place, it is possible that your 401(k) plan could
be frozen until the new company works out the
terms for succession.
As a general rule, it is best to take your 401(k)
when you retire and roll the money over to an IRA.
Become acquainted with the terms of your own
401(k) to determine a specific timeline.

Create a tax-efficient
strategy to handle your assets
Often, a person enters retirement with three
"buckets" of assets: taxable, tax-deferred, and

tax-free. The first bucket - taxable assets - is
money saved outside of the retirement structure
in an individual or joint account. The dividends
and interest generated in these accounts are
taxable to you on an annual basis. To create tax
efficiency and maximize your assets, it is typically
best to withdraw money from these accounts
early in retirement.
Avoid withdrawing from the second bucket -
tax-deferred assets, such as money in a 401(k) plan
or IRA - until you have the need or are required
to do so. At age 70 ½, you are required to take
distributions from tax-deferred accounts. As soon
as you tap into these assets they become taxable,
so by waiting to withdraw from them, you narrow
the timeline for taxation.
Allow the third bucket - tax-free assets - to
grow for as long as possible. Tax-free assets include
Roth 401(k)s and Roth IRAs. You pay taxes on the
principal upfront, but not on the compounded
sum at the time of distribution. Compound interest combined with the liberty of tax-free growth
is the ideal structure for maximizing assets. The
longer you leave those accounts untouched, the
higher your tax-free gains.

MONTGOMERY MCCRACKEN

Congratulates Our Partner Mark B. Sheppard
on Being Named President of the

Pennsylvania Association of Criminal Defense Lawyers

Montgomery McCracken is a full-service law firm with offices in Pennsylvania,
New York, New Jersey and Delaware. The firm represents leading businesses,
multinational corporations, nonprofit organizations and individuals across a
wide range of industries in complex litigation matters, significant corporate
transactions and challenging disputes.

We do one thing.

P E N N S Y LVA N I A * N E W Y O R K * N E W J E R S E Y * D E L A W A R E * W W W. M M W R . C O M

Vol. 2, Issue 2 | For The Defense

9


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Table of Contents for the Digital Edition of For the Defense - Volume 2, Issue 2 - 2017

For the Defense - Volume 2, Issue 2 - 2017 - 1
For the Defense - Volume 2, Issue 2 - 2017 - 2
For the Defense - Volume 2, Issue 2 - 2017 - 3
For the Defense - Volume 2, Issue 2 - 2017 - 4
For the Defense - Volume 2, Issue 2 - 2017 - 5
For the Defense - Volume 2, Issue 2 - 2017 - 6
For the Defense - Volume 2, Issue 2 - 2017 - 7
For the Defense - Volume 2, Issue 2 - 2017 - 8
For the Defense - Volume 2, Issue 2 - 2017 - 9
For the Defense - Volume 2, Issue 2 - 2017 - 10
For the Defense - Volume 2, Issue 2 - 2017 - 11
For the Defense - Volume 2, Issue 2 - 2017 - 12
For the Defense - Volume 2, Issue 2 - 2017 - 13
For the Defense - Volume 2, Issue 2 - 2017 - 14
For the Defense - Volume 2, Issue 2 - 2017 - 15
For the Defense - Volume 2, Issue 2 - 2017 - 16
For the Defense - Volume 2, Issue 2 - 2017 - 17
For the Defense - Volume 2, Issue 2 - 2017 - 18
For the Defense - Volume 2, Issue 2 - 2017 - 19
For the Defense - Volume 2, Issue 2 - 2017 - 20
For the Defense - Volume 2, Issue 2 - 2017 - 21
For the Defense - Volume 2, Issue 2 - 2017 - 22
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For the Defense - Volume 2, Issue 2 - 2017 - 47
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For the Defense - Volume 2, Issue 2 - 2017 - 52
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