Takeaway: Pay Now or you’ll Pay Later
Road construction warnings often result in delays and the to find viable alternative routes. When it comes to taxes and your retirement income, the potential for higher taxes may mean it is time to explore alternative routes for retirement income.
At the time of this writing, the federal debt is over $28,000,000,000,000 (that’s TRILLION). And considering that in the past 60 years federal spending has gone down only four times, it appears more likely that taxes will increase than spending will decrease.
Of course, that creates a dilemma for retirees. Today, most retirement savings are in IRAs and 401(k)s. When those assets are withdrawn, the money is subjected to taxes. While most people strategize that they will be a in lower tax bracket in retirement, future tax rates may be higher than they are today. Therefore, the after-tax value of those assets is uncertain.
Tax uncertainty translates into income uncertainty (we’re not fans of that).
There are three different tax classifications of savings and investment accounts:
Taking the time to fully consider your options is key to ensuring you have the retirement income you need no matter what changes in the tax rates in the future.
With the advice of your tax planner, you should consider how tax diversification could protect your from tax risk.
To get started on your Roadmap to Retirement, request an appointment by calling our team at (877) 313-4080 or going online at www.equity1inc.com/contact.
 White House Official Office of Management and Budget, “Historical Tables, October 2020”