Many people assume their taxes will be lower in retirement, but that’s not always the case. In fact, as Peter with Richon Planning explains to Erin Kennedy, there are 4 good reasons you can plan on your taxes being higher in retirement:
- You won’t be spending less: if you need the same amout of money to enjoy your retirement, you’ll be in the same tax bracket when you’re not working.
- Tax rates are set to increase: many financial experts believe that the Tax Cuts and Jobs Act of 2017 reduced federal income tax rates to the lowest level they may ever be. And those cuts are set to expire at the end of 2025.
- RMDs: Required Minimum Distributions can push you into a higher tax bracket
- Government debt: our nation’s debt stands at $35 Trillion dollars! The government has two options to make up that deficit, reduce spending or increase revenue, i.e. raise taxes.
Without proper planning, taxes may be one of your biggest expenses in retirement. To create a strategic tax plan that minimizes your taxes, please reach out to Peter at (919) 300-5886 or visit www.RichonPlanning.com
