The traditional IRA was one of the most innovative retirement savings programs when it was introduced in the 1970’s. Since then, most of the employer based pensions have disappeared (unless you work for a local, state or federal government). This created the necessity for employer-based 401K plans, Simplified Employee Pensions (SEP’s), and many other tax advantaged retirement savings plans. So, while being able to save for retirement thru payroll deduction and have your employer also contribute to it with matching contributions is great, that’s where some problems start. You work hard and get to retirement and you have this huge pile of money that you haven’t paid a dime of income tax on. A nice problem to have but still a problem.
So how do you utilize your tax advantaged savings for income without completely derailing your tax planning? Adding Social Security income and maybe a pension from an old employer, and now you have an income tax problem. Many people actually pay more income tax in retirement than they did during their working years.
You need your advisor to be well rounded and have expertise in all areas that affect your financial life while working and in retirement. We are income and tax planning experts with 35+ years of experience helping clients understand how our tax system works and how to best use it to their benefit. We have a significant advantage over most advisors who know little or nothing about the tax code. Simply referring you to their “tax guy” or CPA isn’t good enough anymore.