Financial Planner Addresses Potential Tax Hikes

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It's a political cliffhanger that could leave you financially falling without a parachute.

While lawmakers spend their holiday break working on a compromise, many Lincolnites are contacting their financial planners with their concerns.

Brett Shunkwiler of Shunkwiler Financial says that there are ways to hedge against the possibility of tax hikes in 2013, and one way is by investing in a Roth I.R.A..

Shunkwiler says many clients come to him at the end of the year asking to have their traditional I.R.A.'s converted to Roth I.R.A.'s because the plan allows their money to grow tax free and withdrawals can be tax-free if certain qualifications are met.

Shunkwiler says a big selling point of a Roth I.R.A. this year is that it allows clients to pay today's tax rate rather than a future tax rate which could be much higher. But Shunkweiler says clients have only a few days to take advantage of the plan to get in on 2012 rates.

Shunkwiler says some of his clients are also considering life insurance plans and bonds to hedge against potentially higher taxes after the New Year.