I Have a Headache
Over the past quarter century, I have written extensively about the negative impact of taxes on your portfolio.
And yet, I suspect you pay more attention to the stock market than your taxes because, well, that is what everyone else pays attention to as well. To tell the truth, I don’t blame you, because focusing on taxes gives me a headache.
It is time to focus on what can matter most of all in building wealth – reducing your taxes. If you don’t believe taxes are worth reducing, track down Peter Coy’s recent article in The New York Times, “Think You’ve Planned for Retirement? Beware the Tax Torpedo.”
Mr. Coy writes: 
“There are ways to protect yourself from paying more tax than necessary, but they’re not simple. And you may not even know you could be doing better because no one tells you – least of all the Internal Revenue Service.”
Too many retirees overlook the fact that taxes can erode a substantial portion of their retirement income, especially when drawing from multiple sources like Social Security, pensions, taxable accounts, and tax-deferred accounts. Once you hit the age where Required Minimum Distributions (RMDs) kick in, the tax implications become even more pronounced. Without careful planning, you could find yourself in a higher tax bracket than expected, reducing the net income you have to live on.
Instead of focusing solely on the market, I challenge you to spend more time understanding and planning your tax strategy. Consider how you can reduce taxes on your retirement income, whether through Roth conversions, charitable donations, or strategic withdrawals from your accounts. By focusing on tax efficiency, you can potentially save more money over the long term than you would by trying to outguess the market. After all, every dollar saved in taxes is a dollar that stays in your pocket, working for you.
The stock market will always have its ups and downs, but a solid tax strategy can provide stability and security for your retirement years. Shift your focus and make tax planning a priority in your financial strategy.
Tax Focused Financial Planning
Incorporate tax-efficient strategies to help you keep more of what you earn. Would you like to understand how to do this? Connect with me on a complimentary strategy call* and let's discuss your plan.