The Retirement-Toolbox

The Retirement Toolbox is focused on educating people on Retirement Plan Tax-Traps.

Did you know that every time you withdraw money from a traditional IRA, 401(k) and 403(b) retirement plan, the Government will grab about 40%, leaving you with 60% after Federal and State Income Taxes?

Politicians, Investment brokers, CPAs, Employers have you believing you  are saving taxes, but you are not, you are only deferring the taxes.  The tax bite on withdrawals is much more onerous.

For example, you save $500/month, $6,000 per year for 30 years= $180,000 in contributions.  Tax savings (deferral) 25% tax bracket = $45,000 33% tax bracket = $60,000 or $1,500 to $2,000 per year for 30 years.

30 years later the account has grown to $600,000  (6.89%) or $800,000 (8.31%)

Income taxes due 40% tax bracket $240,000 to $320,000

You can avoid the problem by switching to a tax-free retirement plan