Ever think about changing your residence from California as an income tax savings strategy. With the highest rate of 13.3%, this may seem like a smart plan (particularly in retirement), but fear of being chased by California's Franchise Tax Board can be real.
There are many risks in retirement, but, with today’s market valuation, one of the biggest risks is the potential for a market correction while you are drawing income from your retirement accounts.
Most people wouldn't consider contributing to their employer sponsored retirement accounts as a gamble, but when you consider the tax attributes, a different story unfolds. As with most things in life, there are trade-offs to investing in retirement vehicles such as a 401k, 403b, TSP, or an IRA. The IRS allows a retirement plan participant to claim a deduction on their tax return today, in exchange for full taxation in the future.