The Setup:

Part 3 of our series on savers and the missteps they can make in planning, we turn to the dreaded topic of taxes. As you save and invest for your future, are you considering the tax time bomb that could be looming down the road? What about strategies that can help lessen your tax burden? Let’s discuss the options that you have to save yourself money in taxes.

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Click the timestamps below to skip to a specific topic in the episode.

The Combination:

For many of us, saving money for retirement comes in the form of a 401(k) plan or an IRA. Whether it’s through a company plan or a personal account, this can be a great vehicle for accumulating savings.

There is a possible downside, however. All the tax savings you’re getting upfront might end up costing you down the road. It’s not something we want to talk about but we have to know that there could be a tax time bomb waiting for us in retirement.

On this episode of Unlocking Your Financial Future, we’ll continue our four-part series on the risks that savers face by turning our attention to taxes. Ben Schrock welcomes back on his portfolio manager, Keith Lockwood, to help us with this conversation and explain some of our strategies we utilize to ease the tax burden that could be coming your way.

We’ll also discuss how life insurance could be another great investment option to limit taxes when you’re Roth is maxed out. And what about required minimum distributions you have to take in retirement? What considerations do you need to make for those? We’ll take a complete look at taxes and try to give you the information you require to keep those taxes under control.

We’ll close the show by taking a listener question about Social Security. This is a topic Ben is very familiar with and we even offer a Social Security guide here on the website for you to utilize.

We’ve laid out the main topics below. Click the timestamps to jump around in the episode.


Key Points:

0:43 – Today we’re talking taxes.

1:50 – That tax time bomb is looming so keep that in mind as you’re saving.

2:15 – When we pump a lot of money into a 401(k) to lessen taxes now, we make sure people realize that burden will come later.

3:18 – We believe taxes are going up. Here’s a story we heard years ago that applies to your tax decisions.

5:10 – What are your options if you want to move your existing money into a Roth?

6:23 – The Roth conversion can ultimately lower your Required Minimum Distribution.

7:15 – If you’ve maxed out your Roth, what’s another investment option that can lessen taxes?

9:04 – What should we be considering when it comes time to withdraw your money?

11:28 – There are also a lot of options within your 401(k) plan like a Roth 401(k).

12:35 – Mailbag question: I own my own business and haven’t paid much into Social Security over the years even though I’ve earned a nice income. Is this going to be a problem for me in retirement?


Related Content:

The Risks Savers Face: Being Too Aggressive – Part 2

The Risks That Savers Face: Too Much Cash – Part 1