Jay Forgione discusses how taxes impact retirement

Listen to the interview on the Business Innovators Radio Network: https://businessinnovatorsradio.com/interview-with-jay-forgione-owner-of-summit-retirement-solutions-discussing-how-taxes-impact-retirement/

Jay Forgione, owner of Summit Retirement Solutions, to delve into the crucial topic of how taxes impact retirement planning. Jay discusses the common misconceptions around retirement savings, particularly the tendency for individuals to overlook the implications of taxes when making financial decisions. Jay emphasizes the importance of understanding tax strategies to effectively mitigate their impact on retirement income. The conversation highlights the evolution of retirement planning through different generations, from the gold standard era to the prevalence of pensions in the past.

Taxes are a critical factor in retirement planning, yet many individuals underestimate their significance. In a podcast episode featuring Jay Forgione, owner of Summit Retirement Solutions, the importance of understanding how taxes affect retirement income and legacy planning is emphasized as essential for effective financial management.

Many people entering retirement focus on immediate concerns, such as when to take Social Security or whether they have enough savings. However, they often overlook how taxes will impact their retirement income. Jay Forgione emphasizes that individuals typically need about 80% of their pre-retirement income to maintain their lifestyle, which means they may not actually fall into a lower tax bracket as they had hoped. This misconception can lead to unexpected tax burdens during retirement.

Jay highlights the concept of “legislative risk,” which refers to the potential for changes in tax laws that can affect retirees. Historically, tax rates have fluctuated significantly, especially during times of national debt, such as World War I and World War II. Currently, the U.S. is facing unprecedented levels of national debt, raising concerns about future tax increases. Jay points out that tax rates are at some of the lowest levels in history, making it plausible that they could rise again, impacting retirees who have deferred their taxes through vehicles like 401(k)s and IRAs.

One of the key advantages of retirement is the increased control individuals have over their income sources and tax liabilities. Unlike during their working years, retirees can strategically decide when and how to withdraw funds from various accounts, such as traditional IRAs, Roth IRAs, and brokerage accounts. This flexibility allows retirees to manage their tax exposure more effectively. For instance, withdrawing from a Roth IRA, which is tax-free, can help mitigate overall tax burdens compared to withdrawing from a traditional IRA, which is subject to ordinary income tax.

Jay discusses several strategies for managing taxes in retirement, including:

Roth Conversions: Converting traditional retirement accounts to Roth IRAs can be a powerful strategy. Although it may involve paying taxes upfront, the long-term benefits include tax-free withdrawals and the ability to pass on tax-free assets to heirs.

Cash Value Life Insurance: This financial tool can provide tax-free death benefits and tax-free growth of cash value. By leveraging cash value life insurance, individuals can create a tax-efficient legacy for their heirs.

Tax Bill Calculators: Tools like the Retirement Tax Bill Calculator available on Summit Retirement Solutions’ website can help individuals estimate their future tax liabilities based on their current savings and withdrawal strategies. This can provide clarity on how much they might save by implementing tax-efficient strategies.

When planning for retirement, it is crucial to consider the legacy one wishes to leave behind. Many individuals express a desire to leave something for their children, but they may not realize the tax implications of their current strategies. By planning ahead and utilizing tax-efficient vehicles, individuals can ensure that their heirs receive the maximum benefit from their estate, rather than a significant portion going to taxes.

Jay Shared, “At Summit Retirement Solutions, We take a strategic, results-driven approach to your Retirement Journey. Our Philosophy is simple: Keep you on track and your goals clearly in focus.”

Video Link: https://www.youtube.com/embed/t_sZEaYFYow

About Jay Forgione

Founded in 2009, Summit Retirement Solutions is made up of qualified financial professionals who are passionate about helping individuals and families achieve their ideal retirements. Jay is committed to helping clients work toward their retirement dreams by crafting customized, easy-to-understand financial strategies. Beginning as a Senior Regional Manager for a major corporation, Jay decided to follow his passion for helping others and opened Summit Retirement Solutions. As the leader of his firm, he works each day to ensure his clients receive the guidance, support, and resources they need to retire with confidence and joy. That includes protecting nest eggs with tax-efficient strategies. Jay has a Bachelor’s Degree in Business Management from the University of Connecticut. Jay enjoys being outdoors, skiing, hiking, golfing, and spending time with his wife and three k

Learn More: https://summit-rs.com/

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Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.  The commentary reflects the personal opinions, viewpoints and analyses of the author, Jay Forgione, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness. This content may include information and statistical data obtained from and/or prepared by third-party sources that Foundations Investment Advisors, LLC (“Foundations”), deems reliable but in no way does Foundations guarantee its accuracy or completeness. Foundations had no involvement in the creation of the content and did not make any revisions to such content. All such third-party information and statistical data contained herein is subject to change without notice and may not reflect the view or opinions of Foundations. Nothing herein constitutes investment, legal or tax advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations, execution of required documentation, and receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results.

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