At first I was going to ask if you have ever said that. Then I decided to ask only how many times you’ve said that. Whether the topic is our children, our careers, our health or our wealth, we often reach the conclusion that hindsight is 20/20. A few years ago I listened to an award-winning National Geographic photographer for speak. When asked how he was able to capture the most incredible shots of animals, he responded that he was gifted with “intuition.” He described it as “the ability to anticipate what was about to happen.” The result? The perfect wildlife photograph.
The opposite of this type of gift leaves most of us saying “If I had only known….” For the vast majority of our planning clients, personal tax is the single largest annual transfer of money we experience. When you look at Federal, State, Sales, Gas, Social Security, Property, etc we would find that taxes take most of our money. Generally speaking, do you think that is true for you? Intuitively speaking, do you think this is going to get better or worse in the future?
According to a Gallup Poll published Aug. 21, 2009, the vast majority of Americans expect taxes to go up in the next four years. In his July 21, 2009 column in the Washington Post, George Will wrote “…approximately 60 percent of taxpayers now pay either no income tax (43 percent) or less than 5 percent of their income.” Simple math tells us that the lion’s share of taxes comes from you, the 40% who pay.
The real focus of our planning is to help you develop a strategy that delivers more long-term net worth than you would have achieved without our help. The ultimate purpose of that long-term net worth will be the production of income during retirement. How we carefully design your strategy to achieve that goal must anticipate the possibility and probability of higher taxes in the future. President Obama has promised that taxes will increase for the top income earners. This is going to happen if for no other reason than someone must pay for all of the money the government is spending!
To achieve this we need to work together to break free from the “you should always do “ABC” and never do “XYZ” crowd. We can help. That is what we do. Questions or comments are encouraged.
