In this week’s Hidden Wealth Solution Insight, I teach that tax time is just around the corner. This thought fills most of us with dread and puts everyone a little on edge.
These are interesting times for taxpayers. Taxes are the primary reason that so many people are currently fleeing the State of Illinois, in general and the city of Chicago, in particular. Chicago has underfunded its pensions and, as a result, has a high tax rate that’s only going to get higher.
This situation is only going to get worse. When you have fewer people paying money into the tax coffers because they have already retired, the burden to make up the revenue shortfalls is borne by those still working and those still drawing on their 401(k)s and IRAs. That’s why people are leaving Chicago; some of the city’s pension funds have $9 billion dollar shortfalls. In total, Chicago owes it’s employee pension funds about $25 billion. If you’re a Chicago taxpayer, the city is eventually going to have to get these shortfalls out of your pocket.
This situation isn’t unique to Chicago. Nationwide, ten thousand people a day are retiring. People will be retiring at this staggering pace for the next decade and a half (or more). As a result, you have fewer people paying into the tax system. That means that the government will have to collect more taxes from less people!
Here’s an example of how this affects retirees. I recently met with a client who has a $525,000 IRA. When he’s forced to take his Required Minimum Distributions (RMDs), the total amount of taxes he will pay, over his lifetime, is $535,000. On top of that, The Congressional Budget Office predicts the federal tax rate will have to go to 60% in order to keep pace with our deficit. If that happens, this gentleman will pay over $1.1 million in lifetime taxes on that $525,000 IRA.
But it doesn’t have to be that way. Our clients learn how to enjoy a tax-free retirement income. In addition, they can leave the money that they didn’t spend during their retirement to their children, tax-free.
To learn how this is done, simply join us this coming Tuesday for our no-cost, no-obligation educational webinar. Learn how to get the government out of your retirement and how you transfer your retirement savings to your children, tax-free! To register for this coming Tuesday’s event, simply click the link below or call our toll free number.
(855) No Tax 2 U
I encourage you to hurry and register because these events fill up quickly, especially this time of the year. For those that register and attend, I will gift you my e-book, 7 Steps to a Tax-Free Retirement. I encourage both spouses to attend this educational event together.
Here’s to your Hidden Wealth,