Mike McGlothlin CFP®, CHFC®, CLU®, LUTCF®, NSSA®
If I asked you what you think the highest taxes in America are, what would you answer? Most of us automatically go to the highest marginal tax bracket. Or maybe you’re thinking about capital gains.
But I think of something different. I think it’s the hidden taxes that we need to consider — the ones that we don’t see but that can actually do the most harm. And the first of those hidden taxes is inflation.
Inflation happens over a period of time. The great economist Milton Friedman said that inflation is simply taxation without legislation. Think about all the things that are likely to impact retirees: health care, food and energy costs to name a few. Those are all expenses that are likely to go up — specifically health care. Which means income needs to go up as well.
The other tax that people don’t think about is the Medicaid/Medicare premium. Proper planning for income can help your clients avoid paying a Medicaid/Medicare premium as much as 240% more than the standard rate. The first step is to think about where their income bracket is going to be.
So, as you’re sitting down talking with clients, make sure that you take a look at all the hidden taxes. Help shift their focus to solutions, not sacrifices. Our retirement income consultants can help. Reach out to them at (800) 589-3000 and find out how they can help you protect your clients from hidden taxes.
Hidden taxes are dangerous because it’s hard to prepare for what you can’t see. Your Ash team can help you plan for — and reduce — hidden taxes.
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