There are plenty of options when it comes to retirement plans with some being more popular than others. But what is popular may not always be right, and the money you save, may not be as much as you think.
“How do you know what the best retirement plan is for you?”
What are the options?
If you work for a company, they may have a 401K, if you’re a schoolteacher, you probably have a 403B, if you’re an attorney or a doctor, there are so many different kinds of retirement plans that are allowed.
And many people buy into those, not understanding what the long term impact of deferring taxes on too much of their money. Because we’ve been told over and over again by the government and by many financial institutions that you should just tax defer as much as you can to the future.
But in my thirty eight year experience of working with people and helping them prepare for retirement, what many people come to a reality once they retire is, is they may have put money for decades into their retirement plan and never paid taxes on any of that money.
Taxes after retirement
But Uncle Sam controls the formulas and the tax calculation when you take that money back. And what many people discover is that they may pay Uncle Sam back and as soon as three to five years, all of the taxes they saved over decades of their life — and I wish that at that point, Uncle Sam would say, “Enough is enough. I got my money back.”
But that’s simply not the case because you continue to be taxed year after year after year and many times, can end up paying back five to ten times the tax that you pay on your retirement dollars compared to what you saved to actually put those dollars in.
So I would submit to you, when you’re thinking about your retirement plan and what is the best plan, consider the tax consequences that nobody really wants to talk about. Because a tax efficient retirement plan may turn out to be the best plan that you could consider for your future.
Finding the answers
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