April 18 is tax day, a date circled in stressful red for many Americans. A recent survey by the American Psychological Association revealed that 65% of Americans considered money a major source of stress. Various reports say that number is even higher when the specific source of anxiety is taxes. There’s even a medical term that’s been coined for fear of taxes and the IRS: “forosophobia,” with “foros” being the Greek word for “tax,” and “phobia” of course coming from the Greek word for “fear.”
Taxes can certainly be a source of stress as you plan for your retirement. It doesn’t need to be. Traditional financial advice tells you to defer taxes on your investments until you retire – but is that really a smart strategy? We address the issue of taxes in many sections of our eBook, “The SureWealth Way.” (Order your free copy.) As we write:
“Investors are encouraged to defer taxes without seriously considering their potential impact when they spend their money. Investors are also assured “your tax rate will be lower when you retire,” when the opposite might be true. (Who thinks taxes are going down or that they’ll be easier to pay after you stop working? And who wants less income anyway: why not more?)”
As we go on to say, “You defer income taxes until retirement – when you can afford it least. You give up what could have been lesser capital gains taxes. You pay layered, overblown management fees, which will drain enormous amounts of money from your retirement plan.”
And speaking psychologically, deferring taxes can fool you into thinking you have more retirement funds than you do.
Contact us today if you’d like to discuss tax strategies for retirement and other ways to reduce the stress of planning for what should be the most relaxing period of your life.
PS – We also have a short video you can watch that lays out some of our innovative tax strategies.