If Taxes Go Up AND The Market Goes Down (what happens to your retirement)?!

It’s not like taxes “might go up”…

They HAVE TO go up…

And every expert I see says the same thing.

So it’s pretty much a given that when planning for your own retirement, you should plan on retiring in a rising tax rate environment.

And if you have the bulk of your savings in taxable retirement accounts, you are putting yourself and your retirement income at risk (simply because of the almost certainty of higher tax rates when you do retire). 😟

But what is it that you’re really putting at risk❔

Well, your retirement assets aren’t really taxed until they become income.

So it’s really retirement income that you’re putting at risk (which simply means that you’re more likely to run out of money in retirement…. the number 1 concern of retirees).

There are really 3 options for addressing this retirement income risk and none of them are really that favorable, but here are your options:

✅ Cut back your retirement lifestyle (ummm, no thanks)

✅ Spend more of your hard-earned wealth to makeup the difference (I would rather not)

✅Go be a greeter at Wal-mart (that’s not happening 🤷‍♀️)

Obviously, all of these options kind of suck (pardon my language).

Now imagine that the market ALSO takes a dive the first few years of your retirement…

This could be a complete disaster for your retirement.

This has a compounding effect that can easily wipe out a very large nest-egg (and that’s not even taking into account the high likelihood of a long-term care event either, which can easily have a price tag north of $100,000 per year)!

This is why I talk about repositioning assets into tax-free buckets in retirement so often 😏

If you do this, you eliminate the risk of rising tax rates taking a huge chunk out of your retirement income.

This can completely eliminate your risk of rising tax rates in retirement.

But how do you eliminate the market risk?

Market risk is really just the sequence-of-return risk, which means the risk of the market doing poorly in the worst possible years of your retirement (the early years).

BUT, if you position some of your market assets into an income vehicle that is NOT dependent on market returns, but simply on providing you MAXIMUM income, then you have completely eliminated the market risk for your most important retirement dollars…

…The dollars designated to provide you guaranteed income in retirement.

Once you’ve covered the market risk for your retirement income, you can LEVERAGE the market to maximize the growth of your other assets (without any risk of having your retirement income affected).

And if this is all done correctly, it can be done completely tax-free while simultaneously allowing you to collect social security tax-free as well.

Let’s chat 💬😎