With the “world on fire” it’s hard to care about the crisis coming in 2023 or 2024, but especially for retirees or soon to retire folks, next to sheltering in place, it’s the most important thing you can do! Whether you think the stock market will have a V shaped recovery, a W shaped recovery or even an L shaped recovery, the message for everyone should be to focus on the fact that history repeats itself. As far back as World War I, to fund the war needs of the country, the income tax rate jumped from 15% in 1916 to 67% in 1917. A 450% INCREASE IN ONE YEAR! Many other times in history, following black swan events, the tax policy that has followed was developed with a “because we have no choice we will just take what we must” attitude. This time around we have already run up incredible debts that have been eating up more and more of our country’s national budget, just servicing the interest. And now coronavirus and all of its fallout! Tax planning has never been more important than it will be in the coming months and years. We have a few years, maybe less, maybe a little more, but learning how to legally control your tax outcomes will be a crucial task. The two cars and two homes lifestyle that we as a nation have worked hard to earn and enjoy is likely to become less attainable, at least for the medium term. “My goal is to someday pay off my 30 year mortgage” will be the new normal for many, or worse if you can’t keep Uncle Sam out of your pocket. Meet with them by video chat, by phone or even stand 6 feet apart and yell, but see a tax planner now!
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