Author - Terry Prather

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Don’t Strike Out When Planning Your Future
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The Power of Tax-Free Income for High-Income Earners
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Free Financial Advice has Hidden Costs: Motivations Matter
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Redirect Tax Savings to Fund Your Life and Legacy

Don’t Strike Out When Planning Your Future

Baseball is in “full swing” this time of year in my family’s household.  I enjoy watching my son express his love for the game (albeit a “love” far secondary to more important things in life).  One of his recent games reminded me how quickly – and inevitably – our best plans change due to forces outside our control.  Our reactions (or lack thereof) to unplanned events ultimately determine our success and this can be true with financial planning.

With the opposing team batting in the bottom of the first inning, the second batter singled after the lead off hitter was …

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The Power of Tax-Free Income for High-Income Earners

“A penny saved is a penny earned.” Many people attribute this quote to Benjamin Franklin. However, I would change this statement – especially for high-income earners – to “A penny saved is more than a penny earned.” Why? Because taxes can impact your earned income so much.

Those in the top income tax bracket pay 39.6% federal tax on earned income. If you live in a state like Indiana, there may also be state and/or county income taxes. FICA (Social Security and/or Medicare) taxes may also be applicable. But wait…there’s more. As your income increases, certain tax deductions may disappear, …

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Free Financial Advice has Hidden Costs: Motivations Matter

Here is a common retirement investment scenario for Baby Boomers.  Mr. Jones is retiring and has different options available in his pension plan.

  • Option 1 – Accept a large lump sum, transfer it tax-free to an IRA and invest it for his future. He is personally accepting the risk of investing the money to help provide for the rest of his and his wife’s life.
  • Option 2 – Begin receiving guaranteed monthly payments for the rest of his life (and his wife’s life with survivor benefits).  This option places the risks and rewards of investing solely on the pension plan.
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Redirect Tax Savings to Fund Your Life and Legacy

Who Pays the most Income Tax? Income taxes are a large part of a high-income earner’s budget. According to Pew Research Center, people with Adjusted Gross Income (AGI) above $250,000 in 2014 accounted for only 2.7% of all taxpayers. However, these individuals collectively paid 51.6% of all individual income taxes. Those with AGI below $50,000 accounted for 62.3% of all individual tax returns filed while only paying 5.7% of total income taxes. Rich Pay most taxes according to PEW research

Individual federal income taxes are calculated on a progressive schedule meaning higher tax rates apply as income rises above certain levels. For example, a single individual’s tax bracket …

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