Taxes- The Greatest Threat To Your Retirement

Taxes- The Greatest Threat To Your Retirement

Tuesday, April 6th, 2021

I’ve always said there are 3 major threats to a retirement today. A long term care event,  a severe, sustained market crash, and increasing taxes. In light of everything that has happened with the virus relief and governmental spending habits, I think taxes has jumped to the top of this list for most people.

It’s not a jab at Democrats or Republicans…they are equally responsible. In my opinion, until politicians are unable to make a living being a politician, I can’t see spending slowing down. For that reason, taxes will increase. We all need to be ready.

I’ve talked about this for several years. I have taught tax classes at local colleges and have also done tax webinars to warn people of what could happen. It’s critical now. I’ve studied it until I am blue in the face and I have talked to expert after expert. The tax train is coming and the light shining from that tunnel is bright.

Going forward, our process will include more tax discussions in reviews with our clients. I think it’s important to know where you stand right now, without making any changes in your situation. I also think it makes sense to look at things if you begin moving money to a tax-free status in a strategic manner.

We have several tools that we use to help our clients make the best decision by taking a macro-view of taxes. If you want to find something to deduct to minimize taxes for this year, then you should discuss that with your CPA. However, if you want to look at how you can potentially save tens or hundreds of thousands of dollars of taxes over your lifetime, we can help.

This Client Connection email is packed with tax facts to help you make a better decision regarding your long term taxes. My goal here it to explain things in a way that make sense to you. Charts and graphs sometimes go a long way, but many times it makes more sense to get right to the heart of the matter.

Taxes will not have the same impact on each of you. Every situation is different. Here’s what I do know though. If you have an IRA and you want nothing more for that IRA than to leave it to your 4 kids. There’s a very good chance that when you pass away, the largest beneficiary of your IRA will be the IRS, and not one of your 4 kids. This doesn’t sit well with me and it shouldn’t for you either.

Many of you have retirement accounts and you are using and have told me the only thing you want to do is leave as much of this as possible to your beneficiaries. I think that’s a great idea and a tremendous way you can bless someone after you pass away. But remember, there will be a day when taxes will be due on this account.

Ed Slott is considered one of the worlds’ leading authorities in IRAs. He’s also one of my mentors when it comes to planning for taxes in retirement. One of his favorite sayings is that our IRAs and 401ks are “infested with taxes”.

I think he’s right.

So I would encourage you to make 2021 the year that you begin addressing taxes if you haven’t already. In this email, you’ll see a link to my calendar, or you can click here  www.talkwithlee.com. Let’s begin with a phone call to discuss the best plan of action for you.

Blessings to you and your family.

Lee