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Social Security and Tax Strategy

The Principle:

How does your Social Security and your tax strategy overlap? What is going to be most beneficial to you in retirement?

Honest Takes:

Is Social Security actually a type of annuity? On today’s episode of the podcast, Brian talks about what part Social Security can play in your financial plan as well as the importance of a good tax strategy to go with it.

Lifetime income is an attractive prospect when it comes to retirement. Believe it or not, Social Security is actually a form of a payout or annuity, as is a pension. How should Social Security or a pension fit into your financial plan?

When figuring out your retirement goals, you have to back into it. How much do you need per month in income? Then how are you going to get that? Every person needs a creative financial plan because your financial decisions are based on so many different variables.

Sometimes delaying Social Security isn’t about just getting more guaranteed income for Social Security, it’s a tax strategy. If you delay it, you might be able to rely on other sources of income first and then do a Roth conversion while your income and tax bracket is lower.

But does a good tax strategy really make that much of a difference in the quality of your retirement? Biden’s tax proposal currently looks like it will be passed later on, but it will have an impact. One big concern is that the plan might hurt real estate investors. Aggressive tax planning is something that needs to happen, particularly for small business owners or real estate investors. It’s important you build a plan that works for you and your situation–income and taxes included.

 Listen to the entire episode or click on the timestamps below to hear more.

[0:13] – We all agree on the importance of Social Security.

[4:16] – What should you know about a pension vs. a 401(k)?

[7:38] – Can a good tax strategy make that much of a difference?

Today’s Truth:

“Sometimes delaying Social Security isn’t about just getting more guaranteed income for Social Security, it’s a tax strategy.”

Brian Bowen

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