Mon. Jun 17th, 2024

Robert Nico Martinelli Gives An Overview of Retirement Tax Planning & Inflation

2 min read

To lead a comfortable retirement life, you must plan. When you retire, you must ensure everything is sorted and in place to face no tensions. An essential aspect of retirement is your income, and you should ensure it is protected well. Knowing retirement planning taxes is also necessary. This is why you must ensure that you consult a good professional in the field and get the guidance and advice you need to protect your income from unwanted taxes in the future. 

Robert Nico Martinelli is a widely respected and skilled professional in retirement tax planning in the USA. Several people come to him for education and guidance on retirement tax planning. According to him, it is prudent to start early. Though retirement might seem too far away for many people, it is never too late to start planning- in fact, the earliest as possible. 

Know your time horizon

Your present age and the age for retirement as expected will determine the groundwork for an effective strategy for retirement. If you take long to plan your retirement, your portfolio risks will increase. If you are young, you still have many troubles, as most of your assets might be in the form of stocks that are subject to market volatility. However, if you compare them to other investments, in the past, stocks have outperformed different types of securities like bonds for a long time. Here, “long” implies at least over ten years. 

Besides the above, you need income returns that will outpace inflation so that you can maintain your purchasing power at the time of your retirement. Inflation is much like an acorn. It begins small and might turn into a giant oak tree with sufficient time. So, caution and awareness are essential to ensure you are well prepared for it. 

Inflation erodes income 

Everyone has heard of and wants their money to grow extensively. However, inflation leads to the anti-growth of this money. It erodes the value of money over time. For instance, even if a low inflation rate like 3% will lead to the erosion of your weight for savings by over 50 percent over 24 years. Though at first glance, this might not seem to be a lot of money, however, it does create a profound or rather massive impact on your savings. 

According to Robert Nico Martinelli, the older you get, the greater the focus should be on preserving your capital and income. This means a more significant allocation in less risky securities like bonds, which might not give you the same income returns as stocks should be invested in. The number of returns on bonds is indeed less than stocks. However, you will get the income you need during your retirement years. Moreover, your concerns about inflation will also be lesser. And in the end of it all, you will be able to make the best use of your hard-earned money and investments.