Earlier this month, we hosted a free educational outreach on Moving Toward a Tax-Free Retirement at the Northwest Arkansas Community College Shewmaker Center. In this seminar, we taught attendees how to maximize their retirement income and make their savings work for them. The evening was packed with crucial facts that can optimize a retiree’s tax obligations. We also guided them in the direction of a successful retirement future.
In the past, people have relied on Businesses’ defined pension plans and the U.S. Government for their long-term financial security. Our economy and job market have changed so drastically in the past few decades that once sound advice such as, “Go to work for a big company and they will take care of your income, pension, and health/life insurance needs,” has changed for most companies. Not to mention how the government is functioning financially.
“Regardless of what politicians tell you, any additional accumulations of debt are, absent dramatic reductions in the size and role of government, basically deferred tax increases…Unless we begin to get our fiscal house in order, there’s simply no other way to handle our ever-mounting debt burdens except by doubling taxes over time.” -David Walker, Head of Government Accountability Office for 10 years under George Bush and Bill Clinton.
We hosted the Moving Toward a Tax-Free Retirement Event to provide people in our community with the tools they need to navigate and understand this financial environment. We first identified the retirement savings options that are most likely to be targeted for tax increases and how you can take control to best prepare for the potential impact of those changes. We explained the three categories that all investment options can be divided into:
· Tax Deferred
· Tax Advantaged
Next, we helped attendees identify the pros and cons of each category, so they could understand how to optimize each category.
We also discussed Required Minimum Distributions (RMDs) and how these distributions are utilized so the IRS can ensure that you pay taxes on most of your retirement (qualified) funds, as well as the steep penalties incurred if RMDs are not met. This is the government’s way of creating a predictable stream of tax revenue over the course of your retirement.
Lastly, we outlined the best way to maximize Social Security, an area we see the most common mistakes. The single greatest reason why people get their Social Security taxed is having too much money in their tax-deferred category! By investing the proper amounts into to each category, you can conceivably reduce taxation on your Social Security.
Understanding the rules and laws that impacts retirement can overwhelm so many. Our passion at Mach 1 Financial is keeping you informed about the financial issues and changes that can affect your future. Let us help you make sense of all these financial hurdles!
If you attended the class and would like a copy of the slides or you missed out on the presentation, you can send us a request for the slides here.
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