The Retirement Tax Bomb 💣

The calculation the IRS uses to determine how you pay taxes on retirement income creates a danger zone where taxes can be SIGNIFICANTLY amplified. If you fall into this danger zone, you could pay a MUCH higher tax rate on your retirement income. In today's video, I'll talk about how to avoid the pitfall of paying way too much in taxes.

Don’t miss my free online workshop, “How to Choose the RIGHT Age to File for Social Security.” In this workshop you’ll learn:
✔The Most Important Factors to Consider BEFORE You File for Benefits
✔How to Coordinate Your Social Security Filing Decision with Your Other Assets & Income for a Tax Efficient Distribution Strategy
✔Why This Is The Biggest Decision of Your Retirement

Access the workshop today at this link

📜 HEAR YE HEAR YE: Some of my videos contain links to third party products, apps, and services. If you click through, I may receive a small referral fee to my media company (Carroll Media Properties) through their referral program. Rest assured, I only recommend products or services that I believe will be helpful and informative to my audience.

⭐⚠️⭐Please read this⭐⚠️⭐

⚠️I am not an attorney, SSDI advocate, or affiliated with the Social Security Administration or any other entity of the US Federal Government. I am a practicing financial planner, but I’m not YOUR financial planner and since I don’t really know you, I can’t give you advice. So please don’t take this video as specific advice for your specific situation. Consult your own tax, legal and financial advisors. 🙇🙇🙇🙇🙇
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[williambeatty]

Social Security should not be taxed at all. It is pure evil to be taxing seniors who are just trying to get by.

[fraherfarms]

They should raise the Combined Income amounts from $32k and $44k to much higher, say $65k and $80k. It seems to be getting harder and harder for us middle class to get ahead.

[tonyruba]

I remember the days when I paid zero FICA taxes starting in late November, just in time for Christmas. Now? I never stop paying FICA with no end in sight. I dare any of the corrupt DC politicians to tell me with a straight face that wages have kept up with inflation, let alone the FICA curve…

[July..]

Sounds like they should have bought the truck using payments with low % interest financing. The savings on the taxes would most likely make the payment.

[HolySchmidt]

This is a great video on how to think about retirement taxes.

[johnmillersr]

This is really crazy. You pay taxes all the years you worked, on top of saving for retirement. Than when you retire, you’re still paying taxes on your retirement income, while the wealthy get away with paying little to no taxes at all. This is not right at all.

[RaymondKeen.]

Great video. We are all seeking for financial independence and a better way of life. This is not difficult to achieve with savvy investing, a frugal lifestyle, and cautious budgeting. I'm glad I learned early on to work hard for financial independence. As Warren Buffet said, he has seen this happen many times in his life. Not an investor, My husband and i never earned more than a middle class salary. We plan to get retired at 58 with a stock portfolio worth $1.7M. We have never sold so much as one share of stock.

[arnoldjohnson]

Increases in retirement income not only affects income taxes, but many other tax payments. My real estate taxes can be frozen at 65 so long as my income is less than $61k, Medicare premiums are based on income as well. My first letter from Medicare said my premium would be over $500 a month based on my income from 2 years ago. Yes I did form 44 but it says they’re going to verify with IRS. The tax bomb does a lot of collateral damage of the innocent especially if you are a widower.

[Zuckerpuppekopf]

So basically, aside from the Roth option, the best policy for making larger purchases during retirement is NOT to simply withdraw big ticket amounts, but to plan ahead and SAVE up for them using surplus retirement distributions on a yearly basis. So if the featured couple's retirement AGI 70K something, then save as much as possible living frugally for a few years to save up for the truck.

[alphamale]

Having a big chunk of after tax money built up opens all kinds of savings opportunities. Wish I had thought about this more when I was younger.

[georgesigala]

I just retired last month. I’m 57 now. Living on my union pension for now. I have a 401k, but I cannot touch it until I’m 59 1/2. As far as social security, I won’t touch that until I’m 65. I could just imagine all the taxes 😮that are going to be involved when that time comes 😮.

[alleneverhart]

Devin - would it be better for Wayne and Lisa to buy the truck with a vehicle loan? That way they don't have to take all of the 40K in a single tax year. That seems easier than doing all of these complicated roth conversions. 40K/5 years is about 8k per year.

[mrsmith]

Our income consists of 2X Soc Sec, 2 small pensions, and a small VA disability payment, plus RMD's and Qualified dividends. Dividends are more than 1/2 of our income and taxes at 0%. I hope that never ends.

[Thisishard]

Just retired. Biggest problems are getting all your savings in one place.Oh someone will contact you.(Never). You can download the forms and fax them in.(emailing to find out if they received them). No one responds.

[pauly]

The taxation of Social Security began in 1984 following passage of a set of Amendments in 1983, which were signed into law by President Reagan in April 1983. These amendments passed the Congress in 1983 on an overwhelmingly bi-partisan vote.

[Diego-fbfq]

That be one expensive truck! Good explanation.

[BillGreenAZ]

Social Security benefits should never be taxed. The fund was being fed by after tax dollars and taxing benefits adds another tax.
This is why the entire Social Security system is bad. This doesn't even address how much benefits are lowered compared to if a person were to save and invest using that money instead.

[MountainMan.]

I clearly need a financial advisor but am always afraid I can't afford one.

[tomr]

I was looking at converting $50, 00 from my traditional plan to a roth IRA. Because of a small pension and a small part time job, it was going to cost me $22, 000 in taxes.

[skslone]

This is why you do gradual amounts each year and do Roth conversions to plan for future withdrawals