Not having a tax plan, advice from Steve Sexton

Steve Sexton, President of Sexton Advisory Group and host of his very own radio show, “Winning in Life,” is regularly featured on the San Diego Entertainer’s E&L TV show. Steve has been providing expert financial advice to E&L viewers for over three years. This week, he continues to share his five part series on San Diego Living on the CW called the “5 most costly mistakes retirees make” and introduces mistake #3: Not having a tax plan.

Do your advisors sit down together every year and review your tax return? According to Steve, they should be. Your financial advisor, accountant, and any other advisor you work with should be reviewing your tax return together to ensure that you’re getting the best deal with the IRS.  Many people end up paying thousands of dollars more in taxes because their financial advisors and tax advisors aren’t on the same page. This is only one of the ways you can ensure that you’re being protected from taxes.

What is your largest tax liability and what are you going to do about it? Steve explains that most regular retirees have a substantial amount of money in their retirement accounts that may be a 401K, 403B or an IRA. It is inevitable that you will be paying taxes once you withdraw this money. You may even owe more money in taxes than your social security income as a result of the withdrawals. Your retirement plan is completely exposed to tax increases. If tax rates increase, your retirement account value goes down. Steve explains this is the same thing as a market loss. The more money you withdraw, the higher the tax rate is.

What conversations have you had with your advisors to protect yourself from these future tax increases? Most people don’t talk to their advisors about these important topics because their advisors tend to overlook these important issues. If you are like most people and don’t have a process in place to address these tax issues, contact Sexton Advisory Group today.

For those who are interested in more advice from Steve, you can also tune into his radio show, Winning In Life Radio at 9:00 AM every Sunday on KCBQ 1170 AM.