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Missed Fortune – When Good Is No Longer Good Enough

Posted on | May 6, 2013

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Someone Thinks You’re Too Successful

If you’ve the news lately, you’ve no doubt read about Cyprus government officials passing a tax law that would seize money from the bank accounts of Cypriots. This news has people around the world rightly concerned about how safe their savings are from opportunistic politicians.

It’s true for us in America as well. President Obama’s recently released budget seeks to limit how much very successful individuals will be able to keep in IRAs, 401(k)s, and pensions and profit sharing plans. One administration official admits that this proposal would only raise around $9 billion over a decade.

The rationale behind these suggested limits is that the wealthy can accumulate much more money in IRAs or 401(k)s than is required to fund what officials consider a “reasonable” retirement. This administration official is essentially saying that those who saved must take some of their money and give it to those who didn’t save.

We’ve seen this before back in the 1990s when politicians repealed what they called the “success” tax in 1997. It was a handy tax for the redistribution of wealth in that, if you were considered too successful accumulating retirement savings, they dinged you with an extra 15% excise tax.

Here’s your advance warning: the “success” tax is coming back.

Governments around the world are attempting to grab a portion of their peoples’ retirement savings. For example, Australian citizens are also facing a proposed new 15% tax on all of their income over $100,000 drawn from their country’s equivalent of an IRA.

This amounts to being taxed on both ends since they’ve already paid their taxes before they put their money in the account.

If you are someone who government considers “rich”, you now have a huge target on your back.

At Retirement Your Planning Must Be Different

Highly successful people can still make foolish decisions. They may follow the crowd and keep their retirement saving in IRAs and 401(k)s. They often do this assuming that they’ll end up in a lower tax bracket at retirement.

But the planning you do for retirement planning is different from the planning you must do when you’re actually at retirement.

Many people once considered saving for retirement in an IRA or 401(k) a good way to prepare for the future. Some found that a better way was a Roth IRA. But saving for retirement the best way can mean a whopping 50-100% greater nest egg when you get there.

We’ve reach the point now where IRAs, 401(k)s and even Roth IRAs cannot even be considered “good” any longer. One reason for this is that they still leave people vulnerable to tax hikes and that can mean ending up in a higher tax bracket at retirement, or possibly outliving your savings. This is why “good” and “better” just won’t cut it any longer.

The best ways to protect your retirement nest egg keep your money tax-free. They allow inflation to actually help you by tying your returns to those things that inflate. When the markets are volatile, these strategies protect your money so you don’t lose principle, yet they allow you to participate in any market upside the moment the markets recover.

The best ways of protecting your retirement savings allow you to enjoy liquid assets safely earning predictable rates of return.

You deserve a most amazing future. But to get there you’ll have to cut through the noise to learn what you can control and what matters most. Where most Americans default and keep doing what they’ve always done, you must instead learn to focus your time and money on today’s best choices.

The best choices are readily available once you know what they are.

Learn what those choices are by visiting with a wealth architect today.

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

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