In this week’s Hidden Wealth Review, I teach how to add an additional $20,000 a year to your retirement. I’m reminded of John and Pauline. Like many of us, they were very concerned about the future of taxes and the stock market. Over the past 20 years, they hadn’t seen much growth in their portfolio’s value. They were also concerned about unnecessary taxes while they were living and they were worried about leaving unnecessary taxes to their heirs.
Predictably, John and Pauline had saved most of their retirement in tax-deferred IRAs and 401(k)s. Because they were over 70.5 years of age, they were taking Required Minimum Distributions (RMDs). Their RMDs, along with the taxes on their Social Security and annuity income, were costing them over $20,000 a year in unnecessary taxes.
In addition to their IRAs and 401(k)s, they also had a non-IRA annuity that suffered from low growth. They wanted their four children to inherit this money, rather than Uncle Sam. Unfortunately, the inherited IRA rule changes that are coming, along with the unfavorable, no step-up in basis tax treatment of their non-IRA annuity, guarantee that they will leave inherited IRA and capital gains taxes to their children.
All told, John and Pauline were having up to 85% of their Social Security income taxed due to their IRAs and their annuity income. This income was pushing them into a higher marginal tax rate, they were exposing themselves to higher future taxes and exposing their children to a capital gains tax from their non-IRA annuity. All told, they were paying $20,000 a year in unnecessary taxes. Now they save $20,000 annually that they can put to their own use. They have also now insulated their children’s inheritance from taxes.
We taught John and Pauline how to completely eliminate their RMDs. This lowered their marginal tax bracket. Now they pay less tax on their retirement. We restructured their non-IRA annuity to give them more growth, better liquidity and a more favorable tax treatment. This decreased the taxes on their Social Security benefits by $500 a month. Their children’s inheritance has now been protected, too.
Statistically, Pauline is likely to out-live John. John has a military pension which, upon his death, will drop from $39,000 a year to just $9,000 a year. With the additional loss of John’s Social Security income, Pauline’s combined loss of income would be $54,000 a year.
The good news is that we eliminated this risk. We got rid of the $20,000 a year in unnecessary taxes that they were paying, effectively putting that money back into John and Pauline’s pocket (instead of Uncle Sam’s pocket). With this additional money, they can now fund a plan to cover Pauline’s loss of income if John passes before she does.
This coming Tuesday, I will be teaching my Wealth Protection Webinar. During this no-cost, no-obligation educational event, I will be teaching a strategy that removes the concern of growth tax, transactional tax and inheritance tax. Additionally, this strategy removes the risk of stock market losses.
To register, go to www.RetirementProtected.com, enter your information and submit the registration. Once you’ve registered, you’ll receive an email containing a personal link to join Tuesday’s event. Let me teach you how to grow, protect and transfer your retirement savings without paying unnecessary taxes.
I encourage you to register for your preferred webinar time now, because these events fill up fast. Those who attend this event will receive an e-copy of my latest book, The Baby Boomer Retirement Breakthrough-The Unfair Advantage to a Safe and Secure Retirement.
-Spouses are encouraged to attend this event together-
(855) No Tax 2 U
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Here’s to your Hidden Wealth,