Ruiz, who is a native San Marcan, SWT alumni (Texas State) and a distinguished San Marcos alumnus, presented on, “Tax Risks in Retirement for Boomers.”
There are 105 million baby boomers (age 47-65) that face unplanned tax risk. While many boomers are aware of investment risk, they have not thought about how increases in taxes will affect their retirement income, Ruiz said.
“Planning retirement today is planning for a long retirement because of our longevity. Not only is the type of investment a risk, but also the future increases in taxes,” he said.
“Currently we see an increase in federal income taxes, but there can be others, simply because of the deficit and ordinary inflation. One should also plan for increases in property taxes, sales tax, gasoline tax and the other assortment of taxes that can cut a retiree's monthly budget in half,” Ruiz said.
Since most Americans have the largest part of their retirement investments in 401k's, 403b's and IRA plans, they will pay a higher income tax when they begin withdrawing, even if they are in a lower tax-bracket, Ruiz said.
“Most baby boomers invested in retirement plans because it was a great tax break on their deposits and were convinced that when they started to withdraw their funds, they would be in a lower tax bracket; a win-win goal. Now it looks like win-lose,” he said.
Ruiz urges the National Group Advisors from all over the U.S. to visit with their clients now to discuss their potential retirement problem and to diversify their tax income into a higher percentage of tax-free plans, and investments with capital gains tax, and not ordinary tax liability.
Agents that qualified to attend came from almost all of the 50 states. The National Group, based out of Montpelier, Vt., is a leader in 403b and annuities for teachers and public school employees.
Money Concepts centers have a long tradition of helping clients build, manage and protect their wealth through financial planning and investment advisory services.