In Ecclesiastes, it says “ To everything there is a season.” Retirement is a season in life that is full of change, including your taxes.
Taxes are different in retirement; there is Social Security, Medicare, IRA withdrawals, and for some, work income. Prosperity can come in your season of retirement from not having the tax burden you had while you were working. The only way to reach this prosperity though is to plan for it before this season hits.
Hans discusses a client who retired when he was 73 years old. After retiring, he started to withdraw money out of his traditional IRA to live off of. In a short amount of years, his over $500,000 IRA became an $80,000 IRA. These withdrawals, combined with his other income, meant that he paid taxes on all his income. This is when he sought Hans’ help; he needed money to live off of for the rest of his life. Hans was able to look at his budget and get him the money he needed to live, tax free. The IRA is now there for this client to make charitable donations out of, using a QCD.
It is important to note though, for everyone, tax free isn’t the way to go. It is very important to look at your specific situation. It can be achieved much easier if you begin planning in your 40’s, 50’s, or even 60’s.
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