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 taxes affect retirement

It would be nice to think that, once you retire and no longer are "bringing home the bacon," worrying about paying taxes would be a thing of the past. But that is not the way Uncle Sam works. 

In fact, unanticipated taxes in retirement can disrupt an otherwise well-crafted retirement plan. Perhaps it's not surprising as to why financial professionals call this situation a "tax time bomb." For this reason, it’s important to consider the impact of taxes when preparing your retirement plan, so you can make well-informed choices ahead of time and budget for taxes as part of your retirement expenses.

What you will pay in taxes during retirement is unique to you and to the make-up of your retirement income sources. But one thing that seems to be universal can be this: how big a tax bite that retirees may face.

7 ways retirement plans go bust pt 2

Editor's Note: This is Part 2 of a two-part series on different ways that a retirement plan can go bust. You can find Part 1 of this two-part series here.

In many ways, retirement is like a puzzle. It’s a matter of fitting different pieces together. You probably know what you want your retirement lifestyle to be. The next step is making that vision real. You put together a financial plan to make things happen.

But just planning for retirement isn’t a guaranteed formula for success. We also have to stick to the plan and, at times, revisit it to see if any adjustments should be made. After all, life throws curveballs and life situations change.

Even so, there are many situations that can throw a retirement plan off balance. Those variables can vary, from suddenly finding oneself as a surviving spouse to having personal health decline or taking on the responsibility of caregiver for parents.

While it isn’t a complete solution, understanding some situations that might put a financial plan on the rocks is a good starting point.

7 ways retirement plans go bust

Editor's Note: This is Part 1 of a two-part series on different ways that a retirement plan can go bust. Stay tuned for the second part of our series in the coming days.

Some investors face disadvantages in retirement due to a lack of planning. Lackluster savings, minimal guards against risks, no real strategies for high-cost healthcare or long-term care… These are just a few of myriad ways in how someone may be ill-prepared.  

But there is also the other side to consider. How about when someone does have an effective plan set? Then it's different.

Say that you have created what you feel is a rock-solid retirement plan. When you finally enter this phase of life, chances are you are quite confident about your financial future. Still, planning isn't a sure guarantee of success. Oftentimes, the question of whether someone sticks to their plan is just as important.

What you may not realize is there are several factors that could actually take a retirement plan off course. Those factors may range from being an overly generous parent or grandparent to losing your spouse and needing to adjust your lifestyle to a reduced income.

While it may not be rocket science or a magic formula, knowing these common plan-derailing pitfalls might help you avoid them.

 gen xers money concerns

Generation Xers, you have probably heard yourselves referred to you as the "Sandwich Generation." For those of you on the upper end of Gen X’s age range (35 to 55) this means that, not only are you likely to be responsible for caring for your long-living parents. You will also likely provide some financial support to your children. For many Gen X parents, that may be helping with college tuition. 

And there you are in the middle, needing to build a retirement nest egg and prepare for your own future needs, like the possibility of long-term care. What's more, you have to account for all the other routine expenses facing retirees.

You may not be feeling like the middle of a sandwich as much as you are feeling like the middle of a famous chocolate sandwich cookie. The two rigid outside edges (financial support for both parents and kids) may seem like they are squishing you—and your financial future—in the middle.

In a recent survey, the Insured Retirement Institute found three key money risks that worry Gen Xers. Below are those money concerns, as well as some ideas to help you preserve your financial strength and maybe even “Double Stuf” your retirement resources in the face of them. But first you need to start the conversation.

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