Are you a Baby boomer that was given financial advice from others growing up?
You may be one of millions who are finding out that these age-old concepts just do
not work in our world today.
How wise was it for many of us to double up on our mortgage payments each
month, knowing that our tax deduction was shrinking annually? Many of us now
invest the extra mortgage payment elsewhere, knowing that when the time comes
we can take our savings to pay off our house.... or not.
Consider that all of the taxes that you may have deferred over the last 20 years
of investing in your 401(k) can be recovered by the IRS within three years. That is a
fear that many of us never address.
Uncle Sam cannot wait for you to retire so he can get his hands on your tax
deferred savings. You need to be savvy enough to lesson your tax bite through
options like selling your paid off or almost paid off house right now before
retirement. You can buy a smaller house for probably the same price. Depending on
what state you live in, you can carry your property tax basis to the new house, pay
as little down as possible and invest the equity from the old house in an investment
of your choice. Choices such as a tax deferred Equity Indexed Annuity. Most of the
money you withdraw from your 401(k) will be offset by your new mortgage, which
will reduce your income tax.
Baby boomers need to have a different perspective. Many have net worth and
have never realized their full potential to maximize their retirement savings. Uncle
Sam does not care if you leave a legacy for your family, church or charity of choice.
You have to gain the education needed to find out what your options are before you
are left without a choice for your future.
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