In this week’s Hidden Wealth Review, I teach about an article that was recently posted on NerdWallet.com. The title of the article is “The Top Mistakes That Retirees Make.”
According to the article, the top two mistakes retirees make are:
1. Failing to create a retirement plan,
2. Not having any tax plan.
Over the years, I’ve met with numerous Baby Boomers who are concerned about the taxes they pay in retirement. These retirees and soon to be retirees are very worried about their future tax rate risk. Their anxiety has increased since the Democratic debates began. One thing is clear, the time to un-tax yourself is right now! Even The New York Times recently featured an article stating that Wall Street was sounding the alarm as Senator Elizabeth Warren gains ground in the Democratic nomination race.
I’m reminded of Mike and Martha for whom we recently developed a tax savings solution. Their challenge was that their Required Minimum Distributions were projected to push their marginal tax rate up to 32%. This created an additional $10,000 in unnecessary tax. This “tax torpedo” will cause 85% of their Social Security income to be taxed and it would increase their Medicare Parts B and D premiums, as well.
Click here to read how we were able to solve Mike and Martha’s taxed to the max challenge.
The solutions we used to solve their dilemma were fairly simple. We used strategic tax off-sets to convert IRA money to non-IRA money or to a Roth IRA. Because they qualified under a special section of the tax code, they didn’t even have to pay the tax out of their own pocket. They qualified to use a 100% tax deduction to offset the IRA distribution of the conversion.
This strategy works amazingly well. By using it, we help people stay out from under what we call the “marginal tax increase mayhem” meaning the importance of managing their marginal tax rate. We can help you do the same.
Elizabeth Warren recently presented some details on her ambitious Medicare for All proposal. There are rumors that this plan could cost upwards of $52 trillion over 10 years! If you’ve saved your money in 401(k)s, IRAs or the stock market, this money will be squarely in the government’s sights as a prime source of funds to cover the cost of this plan. This has Wall Street scared senseless. Goldman Sachs warns that the tax hikes proposed by Warren and others could lower corporate profits by 11%. Prominent money managers are predicting double-digit declines in the stock market if Warren becomes the next president.
There’s still time to save tax for 2019 and there’s no time like right now to begin planning your tax-savings strategy for 2020. For those who have a large capital gain or who simply want to legally reduce their taxable income, we’ve created a simple process for you to request our help. Simply go to TaxesSaved.com, enter the required information and submit the form. For submitting your information and requesting a tax savings optimization analysis, you’ll receive a couple of great articles on why increasing taxes on the rich will slow the economy and harm most Americans.
You’ve worked hard for your money. If you want to keep more of it for yourself and give less to Uncle Sam, the time to take action is now! Let us teach you how to legally, ethically and morally pay the least amount of tax possible before taxes rise to unbelievable levels.
Here’s to your Hidden Wealth,