Let’s start with a hard truth: you don’t actually own all the money in your pre-tax retirement accounts (think IRAs and 401ks). Yes, most of it is yours, but the rest belongs to Uncle Sam. He’s waiting patiently for when you begin taking distributions (or pass it on mostly untouched to your spouse or kids), and then he’ll come asking for more than his fair share.  

Most financial advisors avoid this topic because it isn’t fun to talk about paying taxes. Retirement Planners address it head on. Here are some conversations Retirement Planners have every day: 

”Waiting until you’re 72 to start taking required minimum distributions from a pre-tax account may not be the best idea. In theory, it sounds great to let that money grow unchecked, but that means your tax liability grows unchecked too.” 

“It looks like you’re planning to have a big IRA balance when you pass away. Uncle Sam is going to love that, because your spouse will start paying more taxes after you pass away. We call that the Widow’s Penalty.”  

“The money you plan to leave your kids might not go as far as you’d hoped. See, they’re in the highest tax bracket of their lives because they’re at the peak of their careers. It’s what we call the Kiddo’s Penalty. So, when they get the money you left them, they’ll have to pay taxes on it at their tax rate, not the lower rate you enjoyed in retirement.” 

If you have NOT had these conversations with your financial advisor, then you probably need our Tax Map.  

We see so many retirees, or soon-to-be retirees, who have received no guidance on IRA tax planning. This creates a large risk not only for them, but also their family. We developed the Tax Map to provide a safe path around the tax boulder.  

The Tax Map starts by showing you your current tax liability. It then shows what will happen when one of you passes away (the Widow’s Penalty), and then when both of you pass away (the Kiddo’s Penalty). It lays out in detail the amount of IRA money your family will keep versus what will go to Uncle Sam, in real dollars without a plan. Then the Tax Map offers a comprehensive IRA De-Tax Draw Strategy, which tells you how much to take out each year, over how many years, and whether you should delay social security—all to make sure Uncle Sam gets the least amount of your IRA dollars possible.   

The Tax Map is part of our Roadmap for Retirement℠, a comprehensive plan for protecting your retirement. Your personalized Roadmap for Retirement℠ includes the Tax Map, a Long-Term Care Compass to protect against long-term care costs, a Market Flashlight to identify your market risk, and a Fee Filter to identify how much you’re paying in investment and advisor fees. 

To get your no-charge Roadmap for Retirement℠, click here.