You don’t have a choice about paying taxes, but you can avoid making the mistake of overpaying them and falling into tax traps.
Many people utilize their employer sponsored pre-tax retirement accounts to build their nest egg without fully understanding the long term tax effects and loss of control that comes with it.
We are told we will be in a lower tax bracket in retirement but what if we aren't? Or worse, if we drop a bracket but the tax rates increase?
How much of your retirement savings is really yours? It depends on the current tax rate. If taxes go up you now have less that is actually yours. This is true for people entitled to pensions especially if you are also entitled to social security like WA DRS members are.
Eventually you will run into the age where Required Minimum Distributions will start and be forced to withdraw money and pay taxes each year no matter how high tax rates are.
This is one of the few different tax traps that await most Americans. What's worse is most financial professionals don't even bring this up or attempt to help their clients understand this.
We seek to change this and help you take back control of your retirement and avoid these traps. If you are a DRS member and want to make sure you don't fall into tax traps then contact us today.