I am very concerned about cash flow for my clients, especially in retirement. No one wants to have to worry about not being able to do as they wish in retirement. A component of the retirement cash flow plan that a few of my clients don’t really pay attention to is the taxes that will have to be paid.
Here is a comment from one very good saver:
“I knew I was putting money into my retirement accounts at a pretax rate, and thinking, ‘I’ll pay the taxes when I get this out’ – I was never really thinking how much it would be. Now when I’m looking at that whole nest egg, it’s like 28% of it I’m not going to get. That’s a shock when you think of it that way.”
A problem with trying to plan for taxes in retirement is, we know the tax laws now through 2025, depending on the election this November, and they will stay the same, or could change drastically. Taxes are a part of life. We need to plan for paying tax in retirement just as paying any other type of bill.