Dollars & Sense: Advanced Tax Strategies Allow You to Retire Comfortably

Dr. Harold Wong

In an April 9, 2024, article by Megan Henney found in, “The ‘magic number’ to retire comfortably hits a new all-time high.” It cites a Northwestern Mutual study that Americans believe they need $1.46 million to retire comfortably, up 15% from the $1.27 million number in 2023. “This has surged 53% from the $951,000 reported in 2020. Among high net-worth individuals, or those with more than $1 million in investable assets, the figure catapults to about $4 million.”

These numbers are a fantasy to most Americans, but let me show you how you can get there.

Example 1: The married couple earns $150,000 annually and has saved $250,000 of financial assets in a traditional IRA or 401k by age 45. If they have $30,000 of deductions, they reduce taxable income to $120,000 and pay only $16,506 of federal income tax in 2024.

Solution: If they can save $15,000 of taxes annually from age 45 to 70 and earn an average 10% return, they will have an extra $1,622,726 in their retirement account by age 70. If they also earn an average 8% (net of fees) on their $250,000, by age 70, it will be $1,712,118, and so their total retirement bucket has $3,334,845.

Example 2: A married couple has saved $1 million in a traditional IRA by age 70. They have two kids and want each of them to inherit at least $1 million. They both worked and decided to wait until age 70 to maximize Social Security (SS) and retire with $80,000 of SS annually. They have two rental houses that are free and clear that net $20,000 of annual cash flow. They can live on $100,000 a year and do not have to withdraw any money from their traditional IRA.

Solution: They distribute $560,000 from their traditional IRA to buy solar business equipment, which generates the 30% solar tax credit and large depreciation deductions. They convert the remaining $440,000 to a Roth IRA, which grows tax-free, no matter how much they earn. The solar business equipment offsets the tax on the $1 million IRA that is either distributed or converted to a Roth IRA. There is no tax on Roth IRA earnings for the rest of their life and for the first 10 years that the kids inherit the Roth IRA. If they earn an average 10% return on $1 million, by age 90, it will grow to $6,727,450, and now each child will inherit much more than the original $1 million goal of the parents.

Attend my Free Live Seminars: Tuesday, May 14, or Wednesday, May 15, starting at 6 p.m. at Hyatt Place, 3535 W. Chandler Blvd. Chandler, AZ 85226. The seminars are followed by a free catered meal. Topic is “Advanced Tax Strategies: Secrets of Roth & Multi-Generational IRAs!”

To RSVP for the seminars or schedule a free consultation, please contact Dr. Harold Wong at 480-706-0177 or [email protected]. His website is