Episode #67: Tax Planning And Retirement

By | 2018-09-24T21:49:56+00:00 October 4th, 2018|Podcast|0 Comments

Today’s Objective…

Tax planning is one of the key elements of a sound retirement plan. Discover how to steward your wealth and save in taxes in retirement.

(Click the featured times below to jump forward in the episode)

First Things First.

  • 1:27 – In The News: Dan dives into the Twitter #WhyI’mNotRich.
  • 4:21  – Mailbag: Beth just paid her last tuition payment, and her kids are off the payroll. She’d like to know how much life insurance she now needs. 
  • 6:55 – Mind Over Money: Dan explains the Pseudo-certainty Effect.

Tactical Points:

Death And Taxes. 

  • 12:14 – People tend to think their taxes will go down when they lose a spouse. Reality suggests otherwise. When you lose a spouse, you’ll probably still have 70 to 80 percent of the income you had when you were married. However, you’ll lose a standard deduction, and you’ll also lose your personal exemption. In this scenario, sadly, your taxes could actually increase when your spouse dies.

Tax Planning And Social Security.

  • 14:00 – Most folks are surprised they have to pay taxes on Social Security. They reasonably think, “Weren’t we taxed when we paid into the system?” The answer is yes. However, you weren’t taxed on your “gains.” Think of your payment into the system as an initial investment. When you withdraw Social Security, you’re going to get that money back plus some. If you and your spouse make more than a combined $44,000 a year, you’re going to be taxed on up to 85 percent of your Social Security benefit. This doesn’t mean 85 percent of your benefit will go to Uncle Sam. It simply means the government can tax 85 percent of your benefit for an amount that’s dependent on your family’s level of income. In short, only 15 percent of your benefit will be tax-free, so you need to develop a tax planning strategy for Social Security.

Leans On Qualified Accounts.

  • 15:37 – Depending on your tax bracket, the IRS has a lean on your qualified retirement accounts. This means they’re going to get their cut of your retirement savings and investments. As an example, if you have a million dollars in a 401(k), and you’re in the 15 percent income tax bracket, this means you really only have $750,000. Remember, as we mentioned earlier, tax rates are at a historic low, so they’re most likely only going to go up. Plan accordingly in order to maximize in tax savings in retirement.

More Planning Points: 

  • 11:24 – Tax Rates Are At A Historic Low.
  • 14:40- Determining Your Income.

The Plan:

Free Retirement Toolkit:

Just click the picture to get your free retirement toolkit now!

Extra Planning:

The host: Dan Betzel – ContactRetirement Trailblazer GuideRetirement Rescue Toolkit – Call: 614-472-4510

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