Paying Taxes Now vs Paying Taxes Later

Retire Ready with Kyle Hammerschmidt

Summary
In this episode, Kolin and Kyle discuss steps five and six of a tax-efficient retirement plan. Step five involves deciding whether to pay taxes now or later, considering factors such as income levels, deductions, and retirement account contributions. Step six focuses on the ongoing management of the plan, including diversifying income sources, maximizing Social Security, and adjusting strategies based on tax law changes. The episode highlights common mistakes to avoid, such as assuming lower taxes in retirement and withdrawing from retirement accounts in the wrong order.
Takeaways

• Deciding whether to pay taxes now or later in retirement requires considering factors such as income levels, deductions, and retirement account contributions.
• Ongoing management of a tax-efficient retirement plan is crucial and involves diversifying income sources, maximizing Social Security, and adjusting strategies based on tax law changes.
• Common mistakes to avoid include assuming lower taxes in retirement, neglecting Roth IRAs and 401(k)s, ignoring taxes altogether, and withdrawing from retirement accounts in the wrong order.
• Executing a tax-efficient retirement plan requires action, implementation, and sticking to the plan.

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