You Have a Partner in Your Retirement Plan

By Admin Prepare

November 26, 2018

One of the most common and well known phrases in life is the one by Benjamin Franklin, who said “In this world nothing can be said to be certain, except death and taxes.”  Many people, though, feel that the tax part of this does not apply during the retirement years.  Unfortunately, this is not the case in most situations.  In fact, most people have a partner in their retirement plan, and his name is Uncle Sam.

Most people work and save very hard to build a sufficient retirement plan.  Unfortunately, in most cases not everything saved for retirement is yours to keep.  Uncle Sam owns a portion and your nest egg may be curtailed by 10%, 20% or 30% or more via taxes in retirement.  The failure to realize or understand this can cause many people’s retirement plans to not work or fail.

Fortunately though, there are ways to limit or eliminate some of these taxes if you know what to do.  This starts by properly understanding how all types of retirement assets and incomes are treated tax wise. For example, Pensions, Social Security, Retirement Savings Plans, Annuities, Savings Bonds, and even Inheritances all have specific tax rules. You absolutely have to know and understand the tax rules of all of these retirement assets and incomes in order to try minimizing your tax consequences.

The fact of the matter is that taxes are everywhere in retirement, and can take a big bite out of your retirement nest egg if you are not careful.  The key to a successful retirement is properly knowing and understanding how each type is taxed, and then strategically setting up a plan to minimize your taxes owed.  To learn more on this topic and the different strategies available, visit The Prepare Institute website and find an upcoming retirement education course in your area.

Content is for educational and informational purposes only.  It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should contact your retirement and tax professional before utilizing any of the information in this article.