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In this week’s Hidden Wealth Reviews, I talk about the Kiplinger article “How to Avoid These Five Costly Tax Mistakes That Many Retirees Make”. I especially want to emphasize the number one mistake that retirees make – thinking taxes will automatically be lower in retirement.
The reality is that, for many people, their taxes actually go up in retirement. This is due to:
- The loss of key deductions (mortgage interest, dependent exemptions, work-related write-offs).
- Distributions from retirement accounts causing tax on 85% of Social Security benefits and triggering higher Medicare premium penalties.
- Higher inflation pushing up the cost of living, forcing retirees to withdraw more, which means paying more taxes.
- Required Minimum Distributions (RMDs) forcing higher percentage taxable withdrawals each year from IRAs.
There are also higher headwinds on the horizon. Inflation is now trending higher along with the higher tax increases that could be just around the corner with the uncertainty of the extension of the Tax Cuts and Jobs Act (TCJA).
Sadly, many people have learned the hard way that the transition from the accumulation phase of retirement to distribution phase requires a whole new plan. Ensuring you have the highest optimization of your income and assets requires that you have a comprehensive, written plan that addresses taxes, income sources, inflation and legacy preservation. With the uncertainty around the TCJA’s extension, taxes could go up starting in under 12 months.
Trump’s “big, beautiful budget bill” narrowly passed the House by a 217 to 215 margin. There were no Democratic votes for the bill. President Trump has been quoted as saying that he needs Democratic support to extend the TCJA.
The good news is that there is time to take advantage of the uncertainties around higher taxes and tariffs both of which are creating major market uncertainty. It was reported this week that the consumer confidence index fell to its lowest point in over three years. The stock market has experienced tremendous volatility with most markets losing 4% in a short number of weeks over the Canadian and Mexican tariffs. According to the Bureau of Economic Analysis, the personal consumption expenditures (PCE) price index was up 0.3% for the month of January. While the PCE inflation paints a somewhat rosier picture, economists expect the Federal Reserve to keep interest rates steady due to the uncertain fiscal and trade policy outlook.
Take advantage of this opportunity. The key timing is now with tax rates at what could be their lowest level and while retirement account values are down. Now is the opportune time to get your savings out of ticking tax time bomb, retirement savings accounts such as 401(k)s and IRAs. Now is the time to Roth convert these accounts and permanently remove your savings from the tax system!
How Big is Your Retirement Tax Bill?
Learn More About How To Avoid The Common Mistakes Retirees Make
Don’t wait until it’s too late. There is still time to reduce your 2024 tax bill from Roth conversions, high income earnings, selling a highly appreciated asset or to simply get ahead of the potentially higher tax rates that are just around the corner. Now is the time to act!
Go to TaxesSaved.com and request your Saving Tax Optimization Plan (S.T.O.P.) Analysis.
This no-cost, no-obligation, customized plan will show you:
- How much unnecessary tax you’re paying right now.
- The exact strategies to legally reduce or eliminate your tax burden.
- How to protect your retirement savings from future tax hikes.
The Department of Government Efficiency (DOGE) has uncovered $2 trillion in waste, fraud and abuse. This number continues to grow. DOGE has already identified $55 billion in waste and, if their plan succeeds, every taxpayer could get a $5,000 refund check. But don’t wait for Washington to fix its spending problem. Take control of your own taxes now!
At The Hidden Wealth Solution, we help our clients create their own Department of Tax Efficiency (DOTE). We teach clients how to eliminate unnecessary taxes, stop IRS overreach and keep more of their hard-earned money for themselves.
Our team of tax-planning CPAs aren’t just tax preparers. They are forward-thinking tax strategists who have helped our clients save tens of thousands, even hundreds of thousands of dollars in taxes every year!
A client recently sent me a simple but powerful message that had gone viral on Instagram:
“The biggest scam in life is paying taxes on the money we make, paying taxes on the money we spend and paying taxes on the things we own that we already paid taxes on with already taxed money.”
You work hard for your money why should you keep handing more of it over to Washington? Take control of your retirement taxes before it’s too late!
Go to TaxesSaved.com right now and take the first step toward a tax-free retirement.
Note: We serve Baby Boomers and Retirees all over the Unites States. We have an efficient, supported process to meet online, as have been doing for over 20 years. Our online meetings are private, the access is restricted and we never share our meeting link with anyone who’s not a part of the meeting.
Chuck Oliver
Wealth Strategist | Best-Selling Author
We help Baby Boomers and Retirees thrive in retirement through a clear retirement road map that provides market correction and tax protection to optimize income and assets!
www.TheHiddenWealthSolution.com
