Retirement Tax Management: How to Incorporate into Your Retirement Plan

Over the past several episodes you have learned so much about tax planning in retirement. You learned why tax planning is important, all about the hidden tax bombs, and tools that you can use to defuse those tax bombs. Now it’s time to incorporate all of this newfound knowledge into your retirement plan.

Andy Panko from Tenon Financial joins me once again to discuss how to incorporate tax planning into your retirement plan. Press play to hear how you can create a retirement plan that incorporates tax planning.

How to become comfortable with uncertainty

Oftentimes people are looking for a hard and fast rule to follow to make their retirement plan foolproof; however, there is no magical number or rule to create an iron-clad retirement plan. We can’t predict the unknowable, so we have to become comfortable with the uncertainty that retirement brings. 

To help you conquer that uncertainty, it is important to build a process that will help you make better decisions. The way that you can do this is by creating a retirement plan of record and testing projections and what-if scenarios. By setting up a decision-making framework, you will be able to manage your retirement finances in an uncertain world. 

Tax planning is a way to optimize your retirement plan

Before you can start tax planning you need to ensure that you have the basics in place. As long as you can first map out the fundamentals of retirement planning like your expenses, your retirement paycheck, and your asset allocation you will then be able to optimize your retirement journey with tax planning. Remember that tax planning isn’t the main part of retirement planning, it is simply a way to enhance your retirement experience and financial plan in retirement. 

Choose a retirement planning tool and stick with it

There are plenty of tools on the market that can help you create your retirement plan and projections. In the Rock Retirement Club we use the paid version of the New Retirement Calculator, but there is also a free version that you can use. You may be happy by creating a simple spreadsheet to help guide you.

Just like there is no perfect retirement plan, there is also no perfect retirement planning tool. Whatever you decide to use, stick with that tool the way that you stick with the same scale to check your weight. You don’t want to flip flop back and forth between different calculators since the numbers may not look the same. 

Make an educated guess

Even though you can’t predict what will happen in the future with tax legislation, you can make educated guesses about what would work best for you based on your own situation. Educated guesses are not just guesses. By using your retirement plan of record and modeling what-if scenarios you know that you are doing your best to make the best decisions for your retirement. Your decisions won’t always be the ‘right’ decisions, but that doesn’t mean that you shouldn’t plan in the first place. 

By creating a retirement plan of record and making projections you will be able to create a model that you can work from. Staying agile is the most important way to establish a successful plan so that you can rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [4:30] Build a process to make better retirement decisions
• [7:52] Create a resilient plan
• [11:11] What if scenarios are important to creating a retirement plan
• [17:35] Educated guessing is a big part of retirement planning
• [24:24] Action items
• [30:05] How to choose a financial advisor or tool to help you plan

TODAY’S SMART SPRINT SEGMENT

• [31:40] Start the process of getting a plan of record in place

Resources Mentioned In This Episode

Tenon Financial

BOOK - Thinking in Bets by Annie Duke

BOOK - How to Decide by Annie Duke

The New Retirement Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center