tax savings

Tax Control Savings Plan: An Illustrated Example

To make the math simple, let’s say you need $100,000 after tax to live on in ReHirement.

And let’s imagine it’s the year 2026. Because the national debt has mushroomed to almost $30 Trillion, marginal tax rates are at 40% for middle class retirees and at a whopping 60% for the wealthy.

Source: https://www.cbo.gov/publication/49892

And let’s also assume that the government has done away with capital gains taxes. Everything is now taxed at ordinary income tax rates.

Based on history, these are not far-fetched assumptions. The average marginal tax rate from 1913 to 2016 has been about 59%.

For the middle class retiree, in order to net $100,000 for spending on living expenses, she will need to withdraw $166,667 from her pre-tax savings bucket, her currently taxable bucket, or a combination of both. A wealthy retiree would need to withdraw $250,000.

Either way, this withdrawal rate could wipe any retirement savings pretty fast.

But if the TCSP has been followed, when a high tax rate environment exists, which is highly probable in the United States over the next several decades as the government wrestles with astronomical levels of national debt, the retiree would be able go to her tax free bucket and pull out $100,000 to meet her need for $100,000 to live on.

At BRS, we can show you how to implement the TCSP in your financial planning. And for high net income or net worth clients, we can show you how you may be able to fund your retirement fully in five years with our Leveraged Benefits strategy. This strategy facilitates accelerated funding of your tax free savings so that you can withdraw savings on a tax free non-reportable income basis, while at the same time providing valuable living benefits that cover chronic, critical, and terminal illnesses.

We at BRS believe stewardship is about relationships. Careers, reputation, financial stability, and personal goals are all important pursuits. However, none should come above our relationships with family, friends, and our community. Our relationships are the cornerstone by which we leave a positive impact and lasting legacy.

Put Relationships First

by David Sims, AIF®

Tax Control Savings Plan: An Illustrated Example

To make the math simple, let’s say you need $100,000 after tax to live on in ReHirement.

And let’s imagine it’s the year 2026. Because the national debt has mushroomed to almost $30 Trillion, marginal tax rates are at 40% for middle class retirees and at a whopping 60% for the wealthy.

And let’s also assume that the government has done away with capital gains taxes. Everything is now taxed at ordinary income tax rates.

For the middle class retiree, in order to net $100,000 for spending on living expenses, she will need to withdraw $166,667 from her pre-tax savings bucket, her currently taxable bucket, or a combination of both. A wealthy retiree would need to withdraw $250,000.

We believe stewardship is about relationships.

Careers, reputation, financial stability, and personal goals are all important pursuits. However, none should come above our relationships with family, friends, and our community. Our relationships are the cornerstone by which we leave a positive impact and lasting legacy.