Many believe your tax rate falls in retirement. Why? No, really, why?
Transcript: Hi this is Jeff Brown the “BawldGuy”. Today, we’re going to talk about what comes off now as the accepted wisdom when it comes to retirement income. That is that your tax rate will fall in retirement. What’s the reason that they tell you that’s going to happen? It’s because your income will have gone down. Is your goal to employee sacrifice in self-discipline for the sole purpose of creating a far lower income for yourself in retirement, really? Is that what you did for 30 or 40 years? Those vacations you didn’t take, all those times that you could have gone on, weekend vacations you didn’t because you know, honey, we’re going to have a great retirement and we’re going to have a lower tax rate too. Look at it. Given enough time the typical investor can create a retirement income very comparable to the status quo. You don’t have to go down an income. In fact, there are many people who have literally in real dollars created incomes in excess of what they ever made at the job. Given the cost of living, isn’t planning to make so much less in retirement silly? Why would you do that on purpose? It makes no sense at all. If you just plan and do things on purpose, be as safe as you can be. Use self-discipline, everything is going to turn out. Please let’s all stop believing that fantasy that we’re supposed to sacrifice for 30 or 40 years for a decrease in income and a lower tax rate. This is Jeff Brown, the BawldGuy. I’ll see you next time.