What Will Tax Reform Mean to you?

Congress is all about tax reform. Everyone seems very excited about it, but what does it really mean to you, your portfolio and of course your taxes? Having a forward-looking tax strategy is more critical than ever, especially if you are retired or planning for it.

No matter how you slice it, tax-reform it is going to significantly affect your finances. It is way too early for me to spell out all the specifics, but it is one of the most important proposals that I think is likely to come into effect.

Retirement plans, such as 401k contributions will be “Rothified”

The 401K plan is the leading retirement savings vehicle in the U.S., with more than 55 million active users; with current contributions of over $5 trillion to the plans as of March 31, 2017. Currently, 401k contributions are tax-deductible and the taxed upon withdrawal.

One of the proposals is to tax them up front and then make them tax free upon withdrawal, just like a Roth IRA. This would actually be great for investors as the money would grow tax differed and then come out tax free.

My concern is that many people only contribute to their retirement plans for the tax deduction and when faced with a decision on April 15th, they will bypass it.  That will be very unfortunate for people without the foresight to realize that they will one day get old and need the money.

I can see the reasoning by Congress. This would create a huge increase in taxes collected for the next several years. However, it could be a disaster down the road and lead to huge budget problems as the baby boomers take money out. Of course, leave it to Congress to only look for the quick fix.

Investment Strategy

It is more important than ever to have a “Forward-Looking Tax-Strategy”. We incorporate one into each of our client’s comprehensive retirement master plans. As we get closer to and into retirement, we must graduate from the accumulation approach to a preservation and soon to be distribution strategy.

That is precisely when it is time to graduate to a retirement advisor who should understand how to prepare you for the different phases of life and who takes a comprehensive planning approach and invests your hard-earned money to get the best returns with the least risk possible.

Feel free to contact me with any comments or questions.

Cheers -Keith


Visit My Other Sites

Please click here to download SFA Disclosures, privacy policy and business continuity plan. Springer Financial Disclosures. Springer Financial Advisors ("Advisor") is a federally registered investment adviser located in Sacramento, California. Advisor and its representatives are in compliance with the current filing requirements imposed upon registered investment advisers by the Securities and Exchange Commission and the State of California. Advisor's web site and its emails of general distribution are limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Advisor's web site on the Internet or dissemination of informational emails should not be construed by any consumer and/or prospective client as Advisor's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. A copy of Advisor's current written disclosure statement discussing Advisor's business operations, services, and fees is available from Advisor upon written request. You may also obtain publicly available information about Advisor through the SEC website as follows: http://www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_OrgSearch.aspx. Advisor does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Advisor's web site or incorporated in an email, and takes no responsibility therefore. All such information is believed to be reliable and authoritative but does not constitute sufficient information to be the sole basis for sound investment decisions and all users thereof should be guided accordingly. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by Advisor) made reference to directly or indirectly by Advisor in its web site, email, or indirectly via a link to an unaffiliated third party web site, will be profitable or equal the corresponding indicated performance level(s). Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client's investment portfolio. Certain portions of Advisor's web site (i.e. articles, commentaries, etc.) may contain a discussion of, and/or provide access to, Advisor's (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Advisor, or from any other investment professional. The term, qualified retirement advisor is not an official designation. The information is of a general nature and should not be applied indiscriminately to particular situations wherein it may not be completely applicable. Advisor is neither an attorney nor an accountant, and no portion of the content should be interpreted as legal, accounting or tax advice. Keith Springer, SFA’s President, provides investment commentary as host of “Smart Money with Keith Springer” on KFBK NewsRadio AM 1530. Smart Money with Keith Springer is paid for by SFA and is deemed advertising by the Securities and Exchange Commission.


Click Here To Get Your Free Customized Retirement Income and Tax Strategy Analysis