The Power Of Zero Show How Do I Protect My Pension From Rising Taxes?
In this episode of The Power of Zero Show, David McKnight talks about what you can do to protect your pension in the current rising tax environment.
David explains that tax rates will rise dramatically within the next 10 years due to massively unfunded obligations like Social Security and Medicare.
According to former Comptroller General of the United States, David Walker, tax rates will likely double by 2030 to keep the country from bankruptcy. Given the impending doom, David believes it's time we all start to think about protecting our taxable income streams.
David highlights that the pre-tax amount on your pension might be guaranteed, but your after-tax amount is not.
If you'd like to protect your pension from higher tax rates, David explains the first step would be to consider a lump sum pension distribution option. If this option is available for you, it would be advisable to move as much money into a Roth IRA to shield your dollars from the impact of higher taxes.
However, when moving pension dollars into an IRA, David reveals you must move slowly enough so you don't move into a tax bracket that gives you heartburn, and fast enough that you don't get caught up with higher tax rates.
David discusses the role of tax-deferred retirement accounts when combating the impacts of rising tax rates.
Mentioned in this episode:
David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube