CHAPTER FIVE
Tax Risk
“The taxpayer: That’s someone who works for the federal government, but doesn’t have to take a civil service examination.” ~ Ronald Reagan
Y
ou’re doing the right thing: working hard, saving for the fu- ture. Who will get to spend the money you’ve been saving? You will. Perhaps your spouse or children. And certainly
the government. The government, you ask? Ah, taxes.
Tax risk is one of the most important — and least recognized — risks you face. The truth is, after market performance, taxes are probably the biggest variable in your savings plans. Yet, it’s a part of retirement planning that young savers are almost never told about. Get ready to pull back the curtain. By the end of this chapter, you’ll never look at taxes the same way again. The Million Dollar Question Do you think taxes are going up or down in the future? I’ve asked that question a thousand times in the past year, and nearly every single person has answered the same way: Up. Why do people — young, old, and in between — feel so strongly that taxes are going up? And what does it mean for your retire- ment account?
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