Your Financial Prosperity Starts with the Right Vision

In March of 2020, my parents asked for assistance with their finances.  My dad is a retired assistant superintendent; he did everything his paid financial advisors told him.  He allowed them to roll his monies over to new products with new companies three times over 20 years.  The advisor got a percentage of his funds each time, diminishing his hard-earned nest egg. Dad has his pension from STRS, and he maxed out his 403B and 457.  Things should have been just fine, right? Wrong!  The problem with all three of those investment vehicles is that they are subject to tax law.  He is stuck with his pension.  But the other two were personal choices but not based on sound investment advice. 

 

It gets worse since dad and mom are now over 72, and the IRS demands they take the required minimum distribution (RMD).  If they do not take the total RMD, the remaining portion is taxed at 50%!

 

For the first ten years of their retirement, they paid more taxes than they ever did when working.  Their retirement income does not increase like a salary; it is fixed.  Uncle Sam was consuming a large portion of their income. Fortunately, I moved some money around and changed some distributions for them, and they received a refund of more than $12,000 for 2019 for the first time in 20 years.

 

I do not want any of you to be victims like my parents.  If their 403B and 457 monies had been placed in the proper environment, they would have been able to draw down those resources tax-free and had a lot more.  In addition, they would have had access to them without penalties long before they ever thought about retiring.