IRAs are the name of the game for today’s retirees. While they come with helpful tax breaks for savers, pulling money out in retirement comes with major tax consequences — which could get much more serious if taxes rise in the future. But there are things you can do about that.
We’re very clear about our position in the world. We have this niche of retirement income planning. We’re not aggressive, we’re not going to greatly outperform the market. Rather, our job is to never strike out.
Times have changed. We don’t use fax machines or 8-track tapes anymore, we don’t have to worry about having enough change for a payphone, and we don’t have to wait for film to develop. Life has become easier in many ways, but we also have new things to worry about — including online scams and, of course, a global pandemic.
Chances are a big portion of your retirement savings are in pretax accounts like a 401(k) or IRA. If you need to tap those accounts for costly care, you must realize that every dollar is taxable. And you might be shocked at the tax rates that come with withdrawals large enough to foot the bill.