Conventional investing has tax consequences
Three Important Questions:
1. When you retire would you like to have your income and investment be taxable or tax free?
2. Is all of your money going into accounts that will be taxed in the future?
3. Are taxes going to go up in the future?
Most people are saving into tax qualified plans such as IRAs, 401k, 403b, Deferred Comp, SEP, etc. When you have a tax qualified plan you get a small tax deduction up front so you can pay a large tax later when you take income.
Your entire qualified plan including your contribution and gain is 100% taxable. Depending on your tax bracket when you retire you will be sending 20-40% of your income to the Internal Revenue Service and your State Government.
Next to market crashes, taxes are the biggest destroyer of your wealth. Remember – Tax Deferred means Tax-Delayed. Based on current tax rates if you want income of:
$50,000 per year, send $10,000 - $15,000 to the IRS
$100,000 per year, send $25,000 - $35,000 to the IRS
$200,000 per year, send $60,000 - $80,000 to the IRS
If you have a high net worth and have a large amount of money in qualified plans, future taxes could crush your retirement savings. If your IRA grows to $1,000,000 or more how much will go to the IRS?
It wasn’t to long ago the top tax bracket was Seventy Percent!
So how to put your money in Tax FREE investment vehicles and create tax free income… we can help!
Contact us for FREE consultation!