When you started saving in your 401(k)/403(b) plan, the thought of partnering with the Government likely never crossed your mind. However, that’s essentially what happened. Qualified retirement accounts (401(k), 403(b), IRAs) were initially attractive because tax brackets were much higher, with the top bracket at 70% and the median at 39%. Fast forward to today, with tax rates significantly lower, and very few retirees find themselves in a lower tax bracket. The catch? You don’t actually own all of your Qualified Retirement Account. After factoring in federal and state taxes, you might only have 70%-75% of its stated value.
Another consideration is Required Minimum Distributions (RMDs). Your “business partner” (i.e., the government) requires you to start withdrawing funds at 70 and a half. Fail to withdraw enough, and you face a hefty penalty. Is it fair that after giving you a tax break, the government now shares in your account’s growth and takes a significant portion when you withdraw funds, controlling your tax bracket? With $23 trillion in debt, expecting tax rates to decrease seems unrealistic.
Our company’s mission is to help people strategically analyze how and when to utilize all their retirement resources. This may involve strategically buying out your “business partner” while still ensuring income when needed. For some, this might mean reassessing options like Roth and 7702 plans. We provide analysis and facts so you can make informed decisions. We believe education is key to success, aiming to minimize risks such as market volatility, longevity, health expenses, and taxes. Eliminating these risks starts with addressing the problem of sharing your retirement savings with the government. We’re here to assist you every step of the way.