Myth: You’ll have lower taxes in retirement | @AdviceIQ

Uncle Sam IRSMany people think they’ll pay less in taxes once they retire. That would only be true if your taxable income was quite a bit less than it is today.

Otherwise, taxes would be the same because, you see, taxes are based on your taxable income which translates into your Standard of Living once you adjust for deductions and exemptions – presumably the same deductions and exemptions you have before retiring.

Ask retirees if their taxes are lower now than when they were working – most will say no.

 

 

Article posted at AdviceIQ.

Original blog … Myth – Your taxes will go down in retirement … that inspired my syndicated article.

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About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

One Response to Myth: You’ll have lower taxes in retirement | @AdviceIQ

  1. Larry Frank, Sr. June 10, 2014 at 11:29 am #

    Taxes should not be a surprise as this survey found … prudent planning and rational thought suggest they should be the same as they are now assuming you don’t change anything and maintain your pre-retirement standard of living. Problem is in my opinion based on observation of people coming in to see me … they don’t know how much they pay now when they’re working because it happens behinds the scenes with payroll deductions …

    http://www.planadviser.com/Taxes_a_Surprise_Expense_in_Retirement.aspx

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