How Tax Planning Changes Through Four Stages of Retirement

People often pay more in taxes than expected because a confusing system treats various income types differently, and contains hidden taxes and penalties.

 Understand these RETIREMENT SURPRISES

Inflation: People view their future costs in current dollars and don’t anticipate how those costs will grow with inflation.

Longevity: People may end up living longer than they expect, which requires more money.

Expenses: People underestimate how much they need to maintain their pre-retirement standard of living.

Health care: People don’t realize how much of their savings will be spent on health costs.

 Key learning points:

• You have to know what your after-tax retirement savings picture looks like BEFORE retiring.
•  Social Security and Medicare have “tax traps” and you need to plan for them, too.
• You must plan how and when you will use taxable, tax-deferred, and tax-free assets to manage your income and tax brackets efficiently.
•  Organize your assets for your family’s benefit—estate planning still matters!

 SOLUTION: Because your tax exposure will change throughout retirement, you need a tax strategy.