Missed Fortune Super Blog

A Savings Vehicle That Makes All the Difference

Missed Fortune – Never Let It Rest Till Good Is Best

Posted on | April 29, 2013

missed fortune super blog itunes 150x150 Missed Fortune   Never Let It Rest Till Good Is Best

Never Settle For Less Than the Best

Here’s a saying you may want to commit to memory: “Good. Better. Best. Never let it rest, never let it rest, till good gets better and better gets best.”

When it comes to planning for that brighter future, the difference between best and good can be astonishing. In terms of your retirement nest egg, that difference could be as much as 50% more net spendable retirement income.

To put it another way, when we apply this distinction to financial strategies, it could be the difference between outliving your retirement savings and having money to spare.

A good example of this can be found in the way some people still put their serious retirement money into tax-deferred accounts like IRAs and 401(k)s. For many years people have believed that this was a better way to save for the future. But the truth is, it’s far from the best and it’s not even good any more because taxes are going up.

Shifts in conventional wisdom are not uncommon. For years we’ve been told that fossil fuels are destroying the planet and now some are saying that proof exists that fossil fuels are dramatically greening the planet. The point here is that billions of dollars have been spent chasing an assumption that fossil fuels were bad when there is convincing evidence that they are beneficial.

Not only have we spent decades wasting money on pursuing biofuels, but other associated costs in other areas of our lives have skyrocketed as well.

The bottom line is that sometimes we buy into faulty assumptions simply because we’re so used to simply following the crowd. When someone comes along and points out a better way, we’re amazed that we didn’t recognize it sooner. This is has been especially true in how people plan for retirement.

Reading the Writing On the Wall

Anyone who is paying attention should recognize that the only direction taxes will be heading is higher. Not just a little bit higher, but dramatically higher.

The assumption we made years ago that we were better off saving in an IRA or 401(k) where taxes are deferred to some future perceived unknown advantage is proving to be dead wrong.

Our assumption was that most of us would eventually end up in a lower tax bracket at some future point. A large percentage of Americans assumed that they would be retiring on 60-70% of their normal income and that they would therefore be in a lower bracket. But this has not been true for more than 20 years.

In reality, by the time we’ve retired, we no longer have the deductions we enjoyed during our prime earning years. Our dependents have moved on. Our homes are paid off. And we’re no longer contributing to our retirement accounts.

Even though our income may be 60-70% of what it was, we now have Social Security added on top of it and we’re being taxed on 85% of that benefit.

Too many people are finding that they are actually paying a higher percentage of federal and state income taxes than they were while they were working. Meanwhile, Congress continues to create more tax brackets and to raise taxes as a means of paying back the money that it is borrowing to support its spending habits.

You don’t have to be a rocket scientist to see where this is leading. Higher taxes, combined with rising inflation will deplete your retirement nest egg in a shorter period of time than you thought possible.

The only way to know with absolute confidence that your money is immune from the effects of taxes, inflation, and ongoing market volatility is in a tax-free vehicle. Using the best strategies, you can strategically roll that money over from your 401(k) or IRA, pay the applicable taxes now at the lowest possible rate, and then enjoy tax-free growth from then on.

Learn how to take your future from good to better to best by visiting with a Wealth Architect today.

Related Articles:

*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

Be Sociable, Share!
  • more Missed Fortune   Never Let It Rest Till Good Is Best

Comments

Leave a Reply






Warning: Unknown: open(/home/content/36/3927036/tmp/sess_n2969bav9t1ktm2n2g1secim65, O_RDWR) failed: No such file or directory (2) in Unknown on line 0

Warning: Unknown: Failed to write session data (files). Please verify that the current setting of session.save_path is correct () in Unknown on line 0