But there’s another thing to look out for that can have the same disastrous effect on your retirement plans - Uncle Sam.

Most of us do our retirement investing with the goal of accumulating as much money in our retirement savings account as possible. When we think about taxes and our retirement investments, we generally are thinking only about whether or not we should invest with “pre-tax” dollars, use “tax-free” investments and so forth. We figure that later, when we start drawing on our retirement investments, we’ll worry about the taxes then and that, somehow, it won’t be a big deal because we supposedly won’t be in as high a tax bracket.

The truth, though, is that, without properly planning our retirement investing planning, Uncle Sam could take as much as 90% of your retirement funds!

As an example, once you reach 70 1/2, you have to begin withdrawing required minimum distributions from your retirement plan. If you don’t, you’ll have to pay a 50% penalty tax on any part of the required minimum distribution that you don’t withdraw.

If you’re still working, however, you can delay beginning your required minimum distributions until you do retire. (There are two exceptions, however. If you own at least 5% of the company or if your plan is an IRA, you have to begin taking your required minimum distribution even if you’re still working.)
Also, be aware that the payments you receive from ordinary retirement funds are taxed at regular income tax rates upon withdrawal. There’s no special ‘retirement rate’.

These payments are added to your total annual income and then taxed at the rate that applies to your income tax bracket. So, if you received a salary or earned significant income from sources other than your retirement plan, your retirement plan distributions may actually put you in a higher tax bracket than when you were simply working.

Then there is the so-called Death Tax. That is the taxes on your retirement investments that will apply should you die. They could eat up a huge portion of what you intended to leave to your heirs. One common solution nowadays is to buy a life insurance policy that will offset the estate taxes that will be charged on your Individual Retirement Account or IRA.

For many people, your tax situation in retirement could actually be more complicated than it was while you were working. And, if you’re like most people, you haven’t even thought about it. So start thinking. Consult with a professional. It’s money well spent, and if you plan to leave any serious amount of money to your heirs, they will appreciate your thoughtfulness and the fact that more money will pass to them and less will go to Uncle Sam.

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Regardless of where you are investing and what type of retirement savings plan you have, you need to take steps to protect those investments.  This is especially important as we get older.  We could always write off a bad investment and start over when we were young.  It wasn’t a lot of fun to see an investment we had high hopes for go down the drain, but sometimes it happens.  When we’re older though, we know we have to be very careful where our money is invested, to try to minimize risk.

Christians have an advantage, however, when it comes to investments or at least to peace of mind.  The Bible says:

The thief does not come except to steal, and to kill, and to destroy. John 10:10

This post is too short to get into involved in a debate on whether God really wants His children to prosper financially as well as spiritually. I think he does.  Maybe we’ll look at that another time.   For now, most Christians accept that the Devil does not want Christians to prosper.  We can then can look at what the Bible says about protecting ourselves from the thief and how to stop him from stealing from us.

The Bible compares investing to planting a seed.  For example:

As long as the earth endures, seedtime and harvest, cold and heat, summer and winter, day and night will never cease.”  Gen. 8:22

When a farmer plants a crop, he does not just go away and leave the crop unprotected until it is time for harvest.  He watches his crop to make sure it gets adequate nutrients and enough water.  If insects attack the crop, he fights back before they can devourer the crop.  For Christians, the Bible says:

And I will rebuke the devourer for your sakes, So that he will not destroy the fruit of your ground, nor shall the vine fail to bear fruit for you in the field, says the Lord of hosts.  Malachi 3:11

The same principle applies here to protecting our financial crops.  Of course, God is our ultimate source – not a special set of financial investments we have made.  If all our investments were wiped out, God could find another way to supply our needs.

Bet let’s start with what we know best – the investments we have been involved in.  If you’re a Christian, you can accept and appropriate God’s protection on your crop (based on the promise in Malachi) and pray that the devourer (Satan) stays away from your crop (your investments).

I know this may be a little radical for some of you Christians out there.  But we are also told:
Bless the LORD, O my soul, and forget not all His benefits.  Ps. 103:2

The promise in Malachi 3:11 is a tremendous benefit, if we have the faith to receive it.  Let’s be bold enough to acknowledge that we have been given this promise and to accept it.

For you non-Christians and skeptics out there who are reading this, you probably won’t think today’s post fits in the usual practical advice on retirement investing and retirement savings accounts you see on this blog.  Feel free to post a comment or to just ignore today’s post.  It’s not really for you.  But for the Christians out there, this is one of most practical pieces of advice you’re likely to read on retirement investing.

Let us remember to “forget not His benefits”.

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Whatever the reason, more and more retirees have jobs…and more and more people expect to have jobs when they retire.

I know that a lot of retirees worry about their opportunities. After all, we’ve heard for years about age discrimination. And who really wants to be a Wal-Mart greeter?

Fortunately, the vast majority of retirees are looking for part time jobs, as that’s generally what they need to make a difference. And finding a part time job is a lot easier than hunting for a fulltime job when you’re older and not yet ready to retire.

Another good thing is that, as the population ages and more people retire, businesses are already finding that they still need new workers, but that demographics aren’t helping. If you have 3 people retire, but only 1 young worker to replace them…well, you do the math. As a result, the opportunities for older workers interested in working part time keep increasing.

Certainly, you may not be able to do the same job you did before you retired. But, so what? A growing number of businesses are becoming amendable to retirees reducing their hours to part time, by the way. Have you asked your employer about this possibility?

Tomorrow we’ll look at a couple of resources for finding jobs, full or part-time, after you retire.

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