Taxes can be a big drain on your wealth if you don’t properly prepare for them. Many of us expect our taxes to decrease in retirement. Believe it or not, they can increase. Many retirees think their tax bill will be lower post-retirement because they are no longer earning a salary. During retirement, most folks live primarily on what they’ve accumulated during their careers. The assumption is that lower wages equate to lower taxes. While that might be true for a short time frame, the window on lower taxes in retirement can shut quickly. Developing tax-efficient retirement withdrawal strategies can help you avoid draining your wealth.
Today we are talking about states with no income tax. One question we hear a lot, especially as clients are getting closer to retirement, is, “Where should I look to relocate?” Many are thinking I don’t want to live in a cold area. I don’t want to deal with snow. I want to move somewhere warm. But does that make sense from a tax perspective? From a financial perspective? Will my money last? And how do I make it last the longest? Maybe you have thought about some of these questions as well as you are nearing retirement.
Today we are going to talk about one of the silent killers of investment performance,taxes. Taxes are a fact of life and we can’t avoid them forever. However, we can be strategic about when they are incurred. Therefore, it doesn’t negatively affect our finances any more than necessary.
Today, I’m going to address the question: “Where will you live when you retire?” It’s not an easy question to answer.
First, you must determine if you have enough savings to retire. After that, you have to decide when you want to retire and where you want to live. Have you had a conversation about that with your significant other or spouse? Many people haven’t.
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