Challenging Taxes

What, you may ask, do property taxes have to do with a retirement plan? Other than exerting a negative force on the available cash in your plan, once you do decide to begin distributions, they also have a positive influence on the quality of the community you live in. So if your taxes are excessively high, should you try to get them lower? If so, define excessive.

Are you paying too much?
In many parts of the country, homes are worth less than they were two years ago. But what often does not follow those changes in valuations are the taxes assessed. For those lucky enough to still have a job, have maintained their salaries and have seen a minimal decline in the value of their house, challenging the property taxes you are currently paying might be counterintuitive and not worth the effort. While a reassessment of your home does not take into consideration your ability to pay, it might be worth considering if the information the assessor has on your home is not correct.

More on the effect of property taxes on your retirement plan can be found here.

Can Actuaries Make a Good Retirement Prediction?

When we do retire, we do tend to spend more during those initial years.  And because of that, we try an calculate just how much is enough so we won’t outlast our funds.  This is often based  on the 4% rule, an initial distribution that is adjusted upward as retirement continues based on inflation.

Because no one, not even the actuaries know how long we will live, whether we want to perserve some of those funds for our heirs, what the tax rate will be over those years and whether inflation will begin to rise significantly, this decision is incredibly difficult to make, even when you are close to retirement.

You can read the full article here

Staying: The New Retirement Planning Consideration

In the not-too-recent past, you could expect the equity in your house to provide not only a portion of your future retirement nest egg but also the distinct possibility that you had enough to move, possibly even to another location and have your new home paid-for.  Not that those dreams are necessarily dashed completely.  In fact, if you currently own your home (I must say that calling a home with a thirty-year mortgage as something you own has always struck me as ironic.), you might still be able to do what you had planned.

But some things have changed.  Let’s start with the dream of moving to downsize. In most areas of the country, with a few notable exceptions, home prices have stabilized and have even begun to modestly recover. More on this new retirement plan consideration.

More from Paul Petillo, Managing editor of Target2025.com