Our Tax Systems Are Fair

I still feel the need to preface every blog post with the reminder that these blog topic headings are myths, unless I indicate otherwise.  It is certainly a myth that our tax systems are fair.  Read this carefully, though; this chart doesn't show "Millionaires" as the title suggests.  This is individuals and couples who EARN $1,000,000 per year  in taxable income.  The decline shown from 2012 to 2020 occurred while the number of people in this category skyrocketed.

Here's another look at relative audit rates.  The wealthy have enjoyed the greatest decline in audit rates.  And this is primarily due to the reduced IRS funding for which they have lobbied.

So if you don't have an enrolled agent to do your taxes nor a tax law firm to fight IRS in tax court, you are an easier target.  Complex returns are more expensive to audit, especially if they end up in tax court.

We should welcome the Biden administration's increased IRS funding targeting those who owe more than $250,000 in taxes.
But why should we even care?  Well, a social and economic system based on merit and equity is simply a happier way to live and such a society is more likely to survive more than a couple hundred years.  Our ancestors came over here to escape primarily two plagues:  religious persecution, and, a society based on the accumulation of unmerited wealth, usually by inheritance.

Your Constructive Comments are Welcome!

My Chances Are Best If I Just Stay The Course In Retirement

Financial math and actuarial science prove this is a solid myth.  Unless, of course, your retirement financial plan is based on Hope and Luck.  Which, I must admit, sometimes works.  For myself and my clients I prefer more certainty.

A recent whitepaper by financial behemoth BlackRock* indirectly affirms the way Duell Wealth Preservation builds retirement financial plans for our clients.  They emphasize the essential challenge of shifting from the Accumulation Phase to the Distribution phase.  They detail the essential task of optimizing Social Security.  They demonstrate the importance of maintaining a Growth allocation.  Finally, they prove the power of guaranteed lifetime income.  And just with these three elementary planning tactics (out of a lot of others) they conclude one can "potentially generate more retirement income and decrease risk:

1. Adding guaranteed lifetime income

combined with a more aggressive asset

allocation generates 29% more annual

spending ability from one’s retirement

savings (excluding Social Security) and

reduces downside risk by 33%.

2. On top of that, delaying retirement and

claiming Social Security benefits from

65 to 67 boosts total annual spending

another 16% and reduces downside risk

by an additional 15%.

3. The increased spending generated by

these strategies extends well beyond the

average life span, providing a significantly

higher spending floor into a retiree’s 90s

and beyond.

*MKTGM0823U/S-3050437-6/8

Your Constructive Comments are Welcome!