How much money do I need to retire is one of the most common questions I get. It’s a question there isn’t an answer for, because there are so many variables. But, I can show you were to get more money to put into your retirement.
Maybe the answer to the “how much money do I need to retire” questions is easy – as much as you can get. Most people don’t have enough. Last week the Wall Street Journal front page article was on “Workers Saving Too Little to Retire.” Fifty-seven percent of workers have less than $25,000 in savings, the article reported.
The fact is the average worker takes every dime he or she makes just to make daily ends meet. There simply isn’t anything left over to save. The biggest expense middle-age Americans have is usually taxes. If you could just save some of those taxes and put the money saved toward retirement, you might actually build up some retirement money and smile at the “how much money do I need to retire” question.
Use Tax Savings to Fund Retirement
I’ve developed a set of 10 Tax Tips that are practical ideas that people can use to cut their tax bill. If you can cut your tax bill, will you have enough discipline to consider that “new-found money,” and use it towards retirement savings?
Why not let tax savings fund some of your retirement? You’ll note that a lot of the tax tips require a little company to “implement” them. Don’t be discouraged. It’s easy to set up a little company. Suddenly, a whole new tax world will open up when you look at your financial situation through the eyes of a small business owner. Businesses are in a different tax world.
A good goal would be to cut your tax bill by 10-20%. You’re not going to get rid of the tax thorn in your side, but I am positive you can cut your taxes this year. However, there’s a warning. You’ll have to start today. Your taxes need to be considered every day, so that you can “create” the numbers that are finally used to calculate your taxes.
“Create” isn’t anything under the table. It isn’t “creative” tax planning, it’s just considering the tax outcome of your activities each day and choosing the path that will give you the best tax advantage at the end of the year. Suddenly the “how much money do I need to retire” question will become “how much money can I cut off my taxes.”
You can’t work harder, but you can play the IRS game a little smarter. If you put what you save in taxes toward your retirement, you’ll have the same amount to live on each month, and you’ll have money to put into retirement.
If you are paying big taxes this year, you can play the tax game a lot smarter. The tax tips will help, but if you’re paying over $50,000 in taxes this year, we need to talk, because there are things that can be done after you’ve maxed out the tax tips. Give me a call at 801-802-9020.