The IRS just began receiving tax returns this week, and we are cranking and grooving along, finding all kinds of savings on behalf of our New Castle County, Delaware clients … as well as chomping at the bit to help them on THIS year’s taxes.
Truly, the more I take a look at this tax reform bill, the more I see opportunities for legal, ethical “loopholes” that might make an enormous difference on taxes. Especially for business owners.
Which, by the way, means that if you have ever had a hankering to start your own New Castle County, Delaware business, this is a GREAT year to do so — even if it’s just a side hustle.
More about all of that in future Notes.
Right now, we are focused like a laser beam on 2017 taxes, and making sure that our internal and external communication protocols are working as we envisioned them. And we’re excited about all of the new clients that we’ve already heard from (thank you for your continued referrals)!
I do hope you understand, because of the busyness of this season, that we make every effort to respond to your emails and phone calls as soon as humanly possible. But if our response time is slightly longer this time of year, please remember that we are working hard to serve a variety of New Castle County, Delaware clients — none of whom are “more important” than any other — but all of whom deserve our utmost attention to detail.
Already, we’re wading through piles of financial statements and account details for our clients, and I had the idea to write a short missive to you about retirement strategy. Perhaps it’s only because it pulls me out of the world of Schedule A’s and IRS forms, but more importantly it’s because I wanted to encourage you to have a clear strategy in place when it comes to saving for your sunset years.
Specifically, I’d like to see you avoid some mistakes I’ve seen a few clients make over the years. Most of which can be fixed with a good retirement strategy, but all of which are much easier to handle when you can see them coming in advance.
Five Common Retirement Strategy Mistakes We’ve Seen in New Castle County, Delaware
“Three Rules of Work: Out of clutter find simplicity; From discord find harmony; In the middle of difficulty lies opportunity.” -Albert Einstein
One or two mistakes in handling your retirement money could mean paying a stiff penalty as you grow older. I’d genuinely like to see you avoid these — some of them merely mental, and some of them with more significant consequences.
Are you making any of them?
1. Obsessing about market losses.
Focus on your long-term needs, not the daily ups and downs of the Dow Jones Average (or the, ahem, Bitcoin prices). Catastrophic events and long-term health care needs can cause as much damage to your nest egg as a shaky market.
2. Forgetting about inflation and taxes.
Your retirement savings may be a lot smaller than you think when you start factoring in the rate of inflation and the taxes you’ll have to pay when you start drawing out of it. We can help you with those calculations, and they should absolutely be understood.
3. Not saving in the last years before retirement.
Just because you’ve got just a handful of years left before you retire doesn’t mean you should go ahead and buy that new Lexus. Some people in New Castle County, Delaware are able to build up substantial savings in their last five years of work because they get serious about saving and investing.
4. Believing you can withdraw more than you really can.
If you rely on “average” annual returns on your investments to determine just how much you can withdraw, you could be drawing down your retirement fund faster than you should. Average returns are seldom steady. A safe rule of thumb: Count on a 3 percent rate of withdrawal.
5. Not planning for a long life.
Despite the dramatic rise in life expectancy in recent decades, many people still underestimate how long they’ll live. If you’re not thinking about longevity, you could tap out your savings much faster than you should. Look at the figures and add in at least a few extra years as you make your plans.
And lastly, remember this: We’re in your corner, no matter what mistakes you might make.
To your family’s financial and emotional peace…
National Income Tax Service, Inc