Retirement in Style
Sometimes we think we have to get in a line, fill out the form and wait to talk to someone that will tell us what we need to do next. I gave all that up when I left New York. In New York, when you see a line forming, you automatically get in it. If you were there at the time it was forming, you probably needed to get in it!
This is the way I see Retirement Plans. If you work for XYZ Corporation, then here is your Retirement Plan (go stand on that line)! If you own your own business, you might have an IRA Retirement Account (preferably a Self Directed IRA Account).
The Goal is to be in control. The ONLY REASON I mention any of the “retirement plans” is because most people will be involved in some type of this “investment vehicle” and they need to be in as much control as they can be.
Just briefly, on the self directed IRA, you can place your investments, in this account, of your own choosing (such as Real Estate). Since 1971 when ERISA was signed, retirement plans depended severely on the Stock Market. (We saw people lose up to 50% of their investments in 2008.)
I would like to point out another piece of information that is often missed. Although you can build an investment outside of a retirement account, you do not get the compounding effect of compound interest coupled with deferred taxes.
Although I like to have my taxes taken care of up front (and you never know what the future tax rates will be), by leaving your taxable amount in your account, your compound interest will grow exponentially faster (refer to mathematical references but just know this is a good thing)!
RETIREMENT IN STYLE
There is something to be said when talking about the aspect of retirement in style. This is often a goal but sometimes it’s unreachable. We often hear of someone close to us that missed their goal and their retirement is mediocre at best. We also here the opposite where someone we know made it and are enjoying a lavish retirement! My question is: At what cost?
We are looking forward to some of the aspect of our retirement that we have planned for our future. On the other hand, my husband has always been a proponent of keeping up with our taxes because he always has intended to make more money during retirement than before!
If you haven’t figured that out, the reason the “advisors” tell you it is ok to pay your taxes on your retirement plans after you retire is because your income will be lower! IS THIS WHAT YOU WANT????