The Future of Retirement
Retirement seems to be constantly changing, especially when tax hikes make it a bigger concern. Most recently, there have been major tax hikes in retirement that makes it even more important to have tax-free retirement income. This is where the basis of the future of retirement lies. A recent study is showing that the future of retirement is making people who are about to retire or who have recently retired, most concerned about the taxes on the income they are saving for their retirement.
The Problem With High Taxation
If you haven’t thought about it this way, it may be a wake-up call for you. Having your retirement taxed even higher isn’t just a small inconvenience. It is taking away from how much money you have overall for your retirement. So if you started saving 20 years or so ago, based on the supposed tax at that time, it is going to be much different. Even if you and your accountant added in inflation, the current and impending tax hikes are much more than anyone anticipated. This means if you’re able to use tax-free income as part of your retirement, you will have more money during retirement than you planned on.
How to Get Tax-Free Retirement Income
If you’re now thinking it is a great idea, but there is no way to get your retirement income tax-free, you actually have a few options. The main option is through a planning technique called IRA Rescue. What IRA Rescue does is integrate an Indexed Universal Life (IUL) policy in order to increase your potential amount of tax-free income available, in more of a lump sum scenario. There are some different ways that someone might need to use an IRA Rescue. For example, if someone has an excessive amount of IRA assets that aren’t deemed as needed for retirement income. The IRA Rescue technique lets them distribute this money over a shorter period of time (like a lump sum) and put into the IUL policy at investment-grade, or higher grade.
What Else Can Be Done?
If you’re concerned about your retirement years and losing a chunk of your money to taxes, start planning ahead for it. You can’t always avoid your retirement money being highly taxed, but what you can do, is find ways to save even more money so you fill in those taxed gaps of income and still retire with the same amount of cash you had planned for. This might mean working a few years longer than you anticipated, but once you retire, it will be well worth it. Start planning now for the high taxes by putting away more for your retirement, especially if you’re still working. Think of ways to save money and consider selling your home for a less expensive one, using the difference to supplement your retirement income.
The future of retirement is changing not just in how it is taxed, but how much adults have to spend. The recent recession has made it hard for adults to save properly, but hopefully they will find ways around it and still have a pleasant retirement.