Confusion is Uncle Sam's Ploy

There is an article (below) discussing more changes to qualified retirement plans. It discusses how required mandatory distributions (RMDs) are being made more complex. The government game for retirement is intentionally confusing. In fact, financial advisors and tax professionals make a living off unraveling some of the confusion and leaving the rest tangled for their own benefit.

A qualified plan is a retirement partnership with Uncle Sam. Here are the stipulations of that partnership. You are allowed to deposit dollars into a qualified plan tax deductible up to a certain amount. (of course, it can't be unlimited as that would be too beneficial for you). So, you get a tax deduction during the lowest tax rate you will ever have. Who does this really favor; you or Sam? Now your funds hopefully grow on a tax deferred basis. (these funds are subject to market risk, capital risk, and fees). Who does this favor; you or the mutual funds?

When you get ready to take distribution of your retirement funds (hopefully they have navigated through all the risk and fees) your partner Uncle Sam gets to determine the taxes on these funds. (you should bet these tax rates will be higher). Remember those tax deductions and tax deferral? Well, now it's time for you to pay all that back plus interest in the form of Sam's taxation. What a partner, huh? But wait it gets worse. Sam, forces you to take distributions at certain age which increases your taxes. And the worst part is the more you take from your retirement partnership with Sam the more you have to pay for Medicare and SS. (SS is maxed out at $4400 per month, so regardless of your success the best your SS check will be is $4400).

In Uncle Sam's partnership you are punished for success, and after all isn't that the real message from the government. Excellence and success need to be punished. So, if you want to partner up with a spendthrift government that now has negative amortization on its own debt all I can say is BEWARE.

Why not bet on yourself and build a 2-part retirement strategy that creates tax advantaged income, capital appreciation and tax advantaged exit strategy. The second part establishes tax free liquidity when needed, tax free liquidity in case of chronic, critical or terminal illness, TAX FREE Income for retirement and generational wealth for your estate. It's a no-brainer, partner with Sam who will control your financial dependence or bet on yourself and attain financial independence. It's your CHOICE!

New rules mean required withdrawals from retirement accounts have become even more complex (msn.com)