Poor on Paper- Strategies for a Wealthy Retirement

When it comes to pursuing the American Dream most of us try as hard as we can to accumulate wealth. We do this so that we can enjoy a comfortable income and retire with dignity. However, what if you were actually wealthy in retirement and at the same time looked poor on your income tax return? How would that impact your retirement years?

If you’ve counted on IRAs or 401(k)s for retirement, they really should be labeled IOUs to the IRS. This is because these traditional plans create reportable income in retirement. That income is taxed by the US Government at regular income tax rates. Although future tax rates are unpredictable, considering the spending going on in Washington D.C. many experts believe they have only one direction to go and that is up. The last thing you want to do in retirement is brag about your income to the IRS. If you do, they will come looking to get their cut of that money. That cut might be much larger than you originally anticipated.
Instead, what many smart people are doing today is taking the steps necessary to receive tax-favored retirement income. They are essentially setting themselves up to appear poor on paper to the IRS.

By retiring on tax-favored money, they will insulate themselves from the unpredictability of taxes and have a predictable paycheck that can be counted on. Taking these steps may also prevent any future social security benefits from being taxed too!
It is fair to say that wealthy people are not necessarily smarter than the rest of us, they just know the rules or have someone on the payroll that does. When you know the rules you keep more of your money, give less to the government, and you are wealthier.

The IRS only requires us to pay as much in taxes as is written into the law. If you don’t know the laws, you can wind up paying a lot more than you need to. It’s not the IRS’s job to educate us. However, there are strategies and little-known IRS codes that when used properly can efficiently transform your “taxable retirement income” into tax-favored retirement income.”
What you have to decide now is, “Who knows how to spend your money better; you or the government?”  If you think you do, then first you need to get educated. Find a team of trusted professionals who know the rules. Then you can take the proper steps, and use the right products to reduce or eliminate taxes during your golden years. Retiring “Poor On Paper” may be the ticket to keep you out of the poor house!