The ‘T’ Word

Strategically Planning for Taxes is a Cornerstone of Retirement Planning

Tax Planning

Taxes are the most boring, yet incredibly significant piece of the retirement puzzle.
Most Americans view taxes as that annoying little chunk deducted from their paycheck every month, as well as the tedious filing they are required to take care of once a year with a piece of software or tax preparer.

We see taxes as another way to save people money.

What…? Save money?

Yes, we see every dollar that we can save someone in taxes is just as good as a dollar that we earn them. Essentially it’s the same dollar, but instead of sending it off to the IRS, it’s yours. You can spend or invest it however you’d like.

We save our clients’ money in taxes by engaging in tax planning rather than just tax preparation.

During retirement, there are a number of tax decisions you’ll have to make. You’ll be deciding the vehicles you’ll use, and how you’ll report your taxes to the IRS. (The decisions you’ll make throughout the years that could come back to bite you or help you in the end.) Could you benefit by rolling over an inherited IRA? Should you look at generating cash flow through a different, more tax advantageous vehicle? Which is better, a Roth IRA or a traditional IRA? Should you do a Roth conversion?
Taxes should make up a significant portion of any true comprehensive financial review. When a client comes in for a tax review through our in-house tax company, we put them through a number of “what if” scenarios to show them how tweaking something here and there can change their overall annual tax burden. The bottom line is to send the least amount of your hard earned money to the IRS you are legally obligated to.

Make sure to consider the tax ramifications of your financial plan and ponder whether you have a pro-active or a reactive advisor.