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What do you think is the biggest threat to your retirement savings today?
You might think it's soaring inflation, a falling stock market or a recession.
But it's not any of these things.
Believe it or not, the biggest threat to your retirement savings is higher taxes.
Most people don't realize it, but taxes are lower today than they've been in over 40 years.
The highest Federal income tax rate today is just 37%.
Do you know what the highest Federal income rate was in the early 1980s?
It was 70%.
Free tax strategy seminar
Learn more about these tax-savings strategies at a free, educational event with Ed Slott, on Thursday, Nov. 3 at 6:30 p.m. in Salt Lake City. To reserve your free seat, call 844-612-7194 or click the heading above.In the past two years, the government has gone on an unprecedented spending spree. Trillions of dollars were spent on economic stimulus, new infrastructure updates and social policy bills, the Inflation Reduction Act, and the latest Student Loan Forgiveness Plan.
But it's important to understand the government doesn't have money of its own. Somebody has to pay for all of this spending. And the only possible solution is to raise taxes.
It's not certain income tax rates will return to 70%, but there is a big difference between 37% and 70%.
If you're recently retired or planning to retire soon, these higher taxes couldn't come at a worse time. This could significantly impact your IRA and 401K, social security benefits, and other investment income.
So, the money you were counting on to help pay for your retirement could be a fraction of what you thought it was going to be.
Taxes are a very real threat to your retirement savings.
In 2023, taxes will increase by $16.7 billion on American taxpayers earning less than $200,000 — a nearly $17 billion tax targeted solidly at low- and middle-income earners next year, amidst stagflation.
–Joint Committee on Taxation
According to the nonpartisan Joint Committee on Taxation, "In 2023, taxes will increase by $16.7 billion on American taxpayers earning less than $200,000 — a nearly $17 billion tax targeted solidly at low- and middle-income earners next year, amidst stagflation."
This could be just the tip of the iceberg. But here's one of the most frustrating things about the situation…
You don't get a say in how the government spends money. They can spend money however they wish — even if you disagree with it.
And then they can turn right around and make you pay for it by raising your taxes.
Here's the silver lining: You have more control over how much you pay in taxes when you retire than at any other time of your life. But the "control" comes from "tax planning."
Most Americans simply prepare and file their taxes every year with the help of an accountant or CPA. But aside from some obvious deductions that might help you save a few bucks, what's done is done. At this point, you're just reporting history.
If you want to save a lot of money in taxes when you retire, you need to take advantage of tax planning. Here, you're looking at the road ahead — not in the rearview mirror. And you're using the tax code as it was written to save you money.
This is especially effective in retirement planning.
If you take advantage of some simple tax-planning strategies before the end of the year, you could realize a windfall of savings in retirement. It's not uncommon for us to uncover tens of thousands, if not hundreds of thousands of dollars in savings for our clients.
You can learn more about these tax-saving strategies at a free, educational event with Ed Slott, on Thursday, Nov. 3 at 6:30 p.m. in Salt Lake City.
If you don't know the name, Ed Slott is known as "America's IRA expert." The Wall Street Journal said he's "the best source of IRA advice." And he speaks to capacity crowds across the country.
Seating is limited to just 159 people. To reserve your free seat, call 844-612-7194 or click here.
Remember, it's not what you make, it's what you keep.
Ryan Thacker and Tyson Thacker are the president and CEO of B.O.S.S. Retirement Solutions with six offices throughout Salt Lake City. They are the winner of Utah's Best of State Award for retirement planning for the past two years.
This is for illustrative purposes only, results may vary. Advisory services offered through B.O.S.S. Retirement Advisors, an SEC Registered Investment Advisory firm. Insurance products and services offered through B.O.S.S. Retirement Solutions. The information contained in this material is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the U.S. government or any governmental agency. Marketing materials provided by Infinity Marketing Services.
