We always say, “control the things you can control.” Taxes are one of them, and it starts with creating a tax-efficient stream of income. In this episode, you’ll find out how to manage your income tax liability and better understand how the tax system works. Senior Financial Planner , David Cook joins the show to discuss tax-efficient strategies for investors. Why spend more on taxes when you could spend that money on enjoying your retirement?
0:26 “Taxes will take way more from you than the stock market ever will, so why take on all that risk when you’ll lose half of it to taxes?”
2:00 “Taxes play such a key role in the success or failure of your retirement”
2:48 “If you have tax-efficient income, you can spend more, you don’t have to take as much risk in your portfolio and you run less risk running out of your money”
3:41 “People think that they’re going to be in a lower tax bracket in retirement, but it really depends on the characteristic of the income you’re receiving”
7:40 “Hi, I’m Matt Balderston, Certified Financial Planner™ with Pure Financial Advisors. Did you know according to U.S. Money, the average retirement benefit as of last December was $1,282 per month?
9:21 “There are different pools of money you can invest in and they’re all taxed differently”
12:34 “Most financial planner and people are told to defer, defer, defer”
13:09 “Age 70 ½ is when you have to take your required minimum distributions, so you’re forced to start taking money and at that same time, that’s when Social Security starts to kick in. So, there’s a high likelihood for most people that you’re not necessarily going to be in a lower bracket”
13:24 “You want to have some diversification in how you invest and where you pull money out because that’s going to give you the control over what your tax situation is throughout retirement; it’s going to save you a lot more money in the long run”
17:47 “You want to make sure that you set yourself up, that you have money in each of the different [tax pools] areas and come up with a solution or a strategy because when it comes time to take money, you have different areas to pull from”
23:39 “If you have a 401(k) there’s good news—based upon a new pronouncement in September, you can take your after-tax money and put it directly toward a Roth IRA without paying any tax, you can then roll the rest to an IRA”
24:47 “Inside your retirement account doesn’t really matter because it grows tax-deferred, outside of your retirement account—that’s where you’ve got to be a little more sophisticated in your overall investment strategy to reduce those taxes as much as you can”
Aired 7/4/15
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IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, Inc. A Registered Investment Advisor.
• Pure Financial Advisors Inc. does not offer tax or legal advice. Consult with their tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
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