In this week’s Hidden Wealth Review, I teach that, during this time of the year, most people focus on their tax return, as opposed to the return of their tax. I want to share a simple strategy with you; focus on things that are predictable.
At present, so many things in this world are just unpredictable. One of those things is the future of taxes. There are many people in Washington who are barking for higher tax rates in order to pay for The New Green Deal and other federal give away programs. The time to save tax is right now!
This past week, we met with a client who had been referred to us by another, long-time client. They were in their mid-seventies. By using three shifting and timing strategies, we were able to save them $2,000 a month! They had been giving this money to the government in the form of taxes. Now, that money is going back into their pockets instead of Washington’s tax coffers.
When you save your money in an IRA or 401(k), you don’t save the tax, you only defer it until the future. When you reach age 70.5, you must take what are called required Minimum Distributions (RMDs). If you don’t take your RMDs, the government will impose a 50% penalty. Our client’s RMD was $30,000. If they didn’t take their RMD this past year, they would have had to pay a $15,000 penalty!
The $30,000 RMD caused 85% of their Social Security income to be taxed. This created $6,000 of unnecessary tax. The RMD also pushed them into a higher marginal tax bracket, which caused them to pay even more tax. Finally, they had a traditional brokerage account that was creating unnecessary capital gains and dividends that caused more taxes. All told, they were paying an extra $24,000 a year of unnecessary tax.
By using shifting and timing, they were able to take full advantage of the new Trump tax reform law which eliminated the unnecessary taxes they were paying. Whether you’re someone trying to get to retirement or someone trying to get through retirement, please don’t be so focused on your tax return. Instead, be focused on the return of your tax.
Don’t follow the traditional advice to defer your tax by saving your money in an IRA or 401(k). This stale, fraudulent retirement scheme only leads to you becoming the government’s perfect taxpayer.
This coming Tuesday, I’ll be teaching a better strategy in my Wealth Protection Webinar. This is a no cost, no obligation educational event. I will teach you a strategy that eliminates RMDs and unnecessary taxes on your Social Security income. This strategy also grows your savings without tax and allows you to pass your savings onto your children without tax.
To register, go to www.RetirementProtected.com, enter the required information and submit your registration. Once you’ve registered, you’ll receive an email containing a personal link to join Tuesday’s event.
I encourage you to register for your preferred webinar time now, because these events fill up fast. For those who attend this event, I will gift you an e-copy of my latest book, The Baby Boomer Retirement Breakthrough-The Unfair Advantage to a Safe and Secure Retirement.
NOTE: This is a log-on and learn webinar, not a live workshop. You will need a laptop or PC to join. It is strongly suggested that you NOT use an iPad or hand held device for this event. Our proven retirement and financial solutions are best for: people positioning themselves for retirement, those who want to navigate better to or through their retirement, those who have saved $200,000 or more for retirement and people who want to determine if they are maximizing and optimizing their retirement planning. Our solutions are also suitable for Baby Boomers who want to protect their savings from market losses, pay the least amount of taxes on income, reduce or eliminate tax on their Social Security and create a sustainable, increasing, lifetime income for both spouses.
-Spouses are encouraged to attend this event together-
Or Call
(855) No Tax 2 U
(855) 668-2928
Here’s to your Hidden Wealth,
Chuck Oliver
Best-Selling Author