Taxes in Retirement

There are so many reasons to look forward to retirement, and chief among these is the ability to live life and have freedom from the daily grind. But before that happens, you need to design a retirement plan that best suits you. Bryan Anderson, together with the seasoned financial specialist: Criss Crombie, will elaborate on tax-deferred investments, similar retirement plans, tax-deferred annuities, and everything you need to know about taxes in retirement. They will also share how important it is to acquire an established strategy from the beginning to have better outcomes. What You’ll Learn in This Episode: [4:23] Common concerns about taxes when approaching retirement. [5:24] On why deductions and taxes scare a lot of people? [7:43] Why having a strategy from the beginning will help mitigate the later effect? [8:52] How Social Security is taxed in retirement? [18:00] The correlation between taxes and spending. [25:28] Every person has a different plan and strategy. Key quotes:
  • [4:51] “When you’re in retirement and you’re going on a potentially fixed income, should you be concerned about taxes? And I need to be concerned, should I do something different? What do I need to do differently?” – Criss Crombie
  • [5:45] “There’s a lot of questions that come up as people transition and they don’t really know exactly what to do or if they should do anything at all.” – Criss Crombie
  • [8:08] “You’re going to pay taxes along the way. Well if that nest egg is ground significantly you could have a potential tax burden. And for the rest of your life, you continue to draw those required minimum distributions. You’re paying taxes along the way…. It’s a potential time bomb waiting to go off.” – Criss Crombie
  • [14:13] Annuities are a good solution for a lot of people. They could be taxed a little bit differently depending on the original source of the funds. If they count them from 401k and they put it into an IRA type of thing, they’re just taxed as ordinary income. If they come from non-qualified money, annuities can even be more tax favorable, as an income source during retirement. – Criss Crombie
  • [24:54} Everybody is different, and it takes a careful set of calculations for each individual plan. -Bryan Anderson