A 1% Tax Rate in Retirement? Yup, Easy!

Are you calculating taxes in retirement correctly?

One of my first videos was taking to task a popular radio host here in Atlanta. He was WAY over-estimating the taxes a retired couple would be paying. (It’s actually funny to look at this video because I was wearing a tie back then. Within a few weeks, I said “enough of that!” and now here I am…T-shirts, all the time! :))

His scenario had a couple paying a 25% tax rate on around $85k of income. They are not going to anywhere near a 25% tax bracket. Not. Even. Close. The problem with his assumptions is that it will completely change the dynamics of this couple’s retirement plan, and for the worse.

But if they didn’t watch my video and actually listened to this guy, they might have worked a few more years in their crappy, old job or even taken a part time job they wouldn’t have wanted to do. Or, even worse, they might not have done the things they planned on doing together in retirement for fear of running out of money.

Apparently that video struck a chord and has nearly 90k views. it’s a LONG video too, almost 30 minutes. But people stick around and watch, the average watch time is nearly 13 minutes, which for youtube is mind-boggling.

Over the next few weeks after that video, I took off the tie, relaxed a bit and added a nice whiteboard in my basement to draw out scenarios. Unfortunately, because of my rotator cuff surgery I’ve been unable to use the whiteboard for nearly 4 months…until TODAY!


And today, I show you a REAL, LIVE EXAMPLE of a couple I did some planning for who will have over $70k in GUARANTEED retirement income and pay less than $1k in taxes. No fancy, schmancy tax lawyers needed. No exotic life insurance products, just good old-fashioned understanding of the tax code.

You actually may want to watch the video I did before this to get an idea from where this couple is coming.

These folks went bankrupt in 2008 and literally lost EVERYTHING. Their home, their business, their life savings. Now they are sitting with about 50k invested and that’s it. The husband thought he’d be lucky if he could retire at 70, 9 years away.

The wife was a bit more confident though. Guess who is right? I show you in that video.

Oddly, unlike what everyone keeps telling us, they CAN retire even though they only have $50k. The reason for that is first and foremost, NO DEBT! Secondly, the wife will have a pension from the school district. Nothing fancy, $2k a month or so. But combine NO DEBT with a PENSION and magic happens.

I’ve seen it happen so many times it’s insane more ink isn’t spilled on this most simple, and yet safe, retirement plan; NO DEBT and A PENSION. Don’t have a pension? Income annuities work just fine too.

But many people are afraid of annuities. That’s unfortunate because INCOME annuities can play a big role in a successful retirement. That’s not the point of this email or these videos though.

The point was to show how easy it is for folks to retire. And second, how little in tax many truly will pay. Make sure you’re calculating your taxes correctly in your retirement plan projections.

I think you’ll find these videos very welcome, especially if you’re struggling. Don’t give up and don’t give into the fear. You may be in a much better shape than you know.

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