I am an IRS CPA, who has been helping my friends and acquaintances for the past 6 years with all their IRS issues. The IRS is one of those nasty entities that does not play by any rules. But, you as an individual must be conscious and aware of the tax laws of the U.S. Treasury Department.
Do you need to plan your retirement? Well, the time to plan for retirement is not at 40 or 50 years of age. Rather, it is between ages 50 and 70. Why? Because even though your retirement years are numbered, and you may not have another 40 or 50 years to work, the likelihood of living long past your retirement years is higher than at younger ages. So, it is better to prepare for retirement in your 50’s and plan for the next 20 to 30 years. You will live longer so make it a priority.
This is especially true if you were not planning on being on Social Security when you reach full retirement age. This, by the way, was one of the provisions to save Social Security from insolvency, if nothing else was done to save it. So, start planning for retirement now, at age 50 or 55. You see, I believe the government has a hidden agenda. That agenda is to use the power of the IRS to collect on as much personal income taxes as possible.
In that case, the plan is to use the tax on interest and dividends to replace income tax revenue from personal income taxes, thereby reducing the amount of income tax due to individuals. As it turns out, there are two types of dividends. Passive dividends are dividends that are not considered income. However, they are tax-free, which is great. Active dividends are not tax-free, which is not great.
The government is using the taxing of active dividends to help fund retirement programs. Unfortunately, no one told me this, and I have been helping folks with this for 6 or 7 years now. Your tax brackets, which end in 2018, will change, unless you do the Roth conversion (preferable), and you will qualify for Roth IRAs, Roth 401(k), etc. As such, for many of you, the income tax is just going to be taken out, especially as the government spends less money and starts to have to cut back on the amount of retirement programs they are going to need to fund.
So, stop living as if Social Security will always be there, which it will not. Now, stop being taxed on the active portion of your dividends, which they cannot do, and start making your retirement goals a priority. If you are like most people, your retirement goals start when you turn 18. They end when you die. But, you do not want to plan for death right now. You need to plan for a longer period, say the next 20 or 30 years, or you will not have enough money to pay the bills that you will have to pay once you stop working.
Your best bet, and this is something that I have been hammering into people’s heads for the past six years, is to start making their retirement goals a priority. Just like health, investing in retirement is one of the best things you can do for yourself. The early years of retirement are going to be a challenge, but the later years are going to be your golden years. When you retire, you will have enough money to pay the bills and enjoy the things that you never dreamed of when you were working.
Now, that is not to say that there will not be some financial setbacks in the later years, which is a normal part of life. But, having enough money to pay your bills and enjoy the little things in life is not something that should be taken for granted. If you are getting laid off from a job now, that is a good thing. Do not wait to start your retirement. Start looking for a new job today, while you still have the money.
In my view, you can have only one job at a time. You can quit the job you have, but you can never have two jobs. Once you start your retirement, you have to make it your full-time job. Another great benefit of retirement is the time that you get to spend with your family. While you still work, you will never have enough time to spend with your children. When you retire, you will have more free time than you ever had. That will be your time to make your own family complete, even if that is just one person.
Retirement is an important milestone in your life. Do not put it off any longer than you need to. Retirement is a choice that you are making right now. Do you want to be a little sad tomorrow because you waited too long? You should make your retirement goals a priority right now.
If you are interested in more details about the benefits of professional tax relief, feel free to call (888)489-4889.