Navigating the New Administration’s Tax Plan

Today’s Prep:

What kind of tax plans have been proposed lately? These plans may cause you to strategize differently when it comes to your financial plan.

(Click the featured times below to jump forward in the episode)

Equipping Points:

Most tax changes the government wants to propose will impact the “rich” but it always seems to have a trickle-down effect. What kind of tax rates will be changed? Who will it really affect? Remember that income tax rates and investment tax rates are different.

Where could this change everyday life? If the corporate tax rate goes up, this has implications on the goods and services they provide. Corporations and businesses with better tax rates often create more jobs. Then if corporate earnings go down, this affects the stock market and those with investments.

When you make a lot of money, you don’t typically just store it all in the bank. Rates that incentivize people to invest, which helps grow the economy. People will search out ways to build wealth and legally shield their money from so much taxation.

Another big proposal is the elimination in the step-up in basis. How will that impact you or your heirs? What is the estate tax currently? The stretch IRA is also no longer allowed. Is generational wealth being targeted by these tax proposals?

As retirees we have to think about all of these things when financial planning. How will you deal with these proposed changes? Everyone hopes to leave at least something for their kids, so you have to be strategic in your planning.

Listen to the entire episode or click on the timestamps below to skip ahead.

1:08 – Top individual tax rates will increase.

3:50 – What happens when the corporate tax rate goes up?

5:42 – Long-term capital gains tax would almost double.

9:47 – What would the elimination of the step-up in basis mean?

12:52 Is generational wealth being targeted?


Today’s Takeaway:

There’s all kinds of things about these taxing policies that are going to be detrimental to the economy, which is going to cause people’s valuations in the stock market to come down a little bit.

-Eric Peterson

Related Resources:

Retirement Planning Rules of Thumb

Do You Agree or Disagree with this Retirement Advice?

What Creates A Sense of Urgency With Your Financial Plan?

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

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