Questions You Should Be Asking Part 01

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Today’s Question:

As you begin to think about retirement, you probably have all sorts of questions. After all, if you have yet to begin that retirement journey, you’re probably overwhelmed at the thought of starting the process. While questions about income planning and long-term care are rather common, there are other questions you might not have considered as you begin to plan. Join us as we begin a two-part series outlining the questions you should be asking but probably aren’t.

In part one of our series, we’ll examine the tax implications of your retirement accounts. If you’ve been squirreling away your savings in tax-deferred accounts, you could be in for a shock when it’s time to begin withdrawing from them. Begin devising your tax strategy, and discover ways to optimize your portfolio to alleviate your tax burden in retirement.

In The News:

[2:00] – Nathan broadcasts recent financial headlines and discusses the impact President Trump’s new tax plan is having on tax filers.

[3:44] – Learn why it might be best to wait until March to file your taxes. Many retirees who have planned well for retirement follow this strategy.

The Confidence Corner:

[5:32] – As you’re planning for retirement, consider how much tax-deferred savings in 401(k)s and IRAs will cost you in savings. Remember, Uncle Sam is your business partner. He allows you to grow your money tax-deferred, and when you withdraw from those accounts, he’ll be waiting to collect his cut.

[6:40] – Have you planned to find yourself in another tax bracket in retirement. Depending on how you’ve chosen to invest, you could find yourself in a higher tax bracket in retirement than you were while you were still working.

[7:26] – Plan for tax rates to rise in the future. After all, we’re in a period of historically low tax rates. We can’t assume they’ll stay this low forever.

[9:34]- Tax-deferred savings will cost you. If you’re under 50 and saving for retirement, it’s a great idea to take advantage of low tax rates. Pay the tax bill now by investing some of your wealth in a Roth IRA account.

The Mailbag:

[12:03]- Charlotte lives in Jackson, and she’s retiring in the latter half of 2019. She’ll have 16 weeks of unused vacation days and sick days, and her company will have to pay her for those days. Her company has offered to pay her this amount in one lump sum or in regular pay period increments after she retires. She wants to know the pros and cons of both options.

A Point Of Wisdom:

“Tax planning now will go a long way toward alleviating your tax burden in retirement. Don’t forget about the tax time bomb that’s lurking in your portfolio.” – The Financial Answer

Additional Resources:

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