Joel talks about the issues facing people who have managed to save money over the course of their life including how the system punishes you in that situation.

Main Questions Asked:

How does the system currently punish savers and what can people who have managed to save money do about it?

Key Lessons Learned:

Savers Get Punished

• You may not be able to use itemized deductions if you’ve managed to save money.
• You may also end up paying up to three times as much for MediCare if you aren’t careful with the timing of your retirement income.
• You may pay much more in taxes by increasing your income by a small amount, this is known as the cliff taxation system.
• The rich think differently about wealth, the way they operate and how they protect their assets is different from the masses. Many people are big on advice without really knowing the situation.
• 67% of people think they aren’t paying any fees when it comes to their 401(k).

Solutions

• You have to have a thoughtful and comprehensive financial plan for your retirement. A comprehensive plan can help you avoid the fees and taxes that will penalize you.
• Everything works together when it comes to your financial plan, all your account and incomes must be taken into account.
• There are many different strategies that you can take advantage of that minimize your taxes, you just have to know what will work for you and your situation.
• Wealthy people ask their advisors to simplify the data so they can make better decisions. They also avoid heavily concentrated positions as they age in order to protect the wealth they’ve built up.
• You need to have an estate plan, if you don’t your estate could be double taxed, tied up in courts and lose much of its value in fees. Your advisor should be able to make your estate plan simple, if it’s too complicated you should find another advisor.
• You should understand what you are paying in expenses and fees and if the value is there. Hidden fees can destroy your long term returns and a small increase in fees can cost you thousands of dollars.
• According to Tony Robbins, cutting your fees by just 1% can make your money last an additional 10 years in retirement. He also states that hidden fees and backdoor payments can reduce investor’s overall retirement savings by up to 40%.
• You may be taking on too much risk in your retirement accounts. You should be reviewing your retirement plan and accounts regularly with a trusted financial advisor.

Links To Resources Mentioned

Money Map Retirement Review

1-800-757-0436

Thank you for listening!