You’ve pinched pennies and done the hard work of saving money. Now you’re reaching retirement age. How can you take your money out with the lowest possible tax burden? In his book, From Savvy Saver to Smart Spender, “semi-retired” intellectual property lawyer Daniel W. McDonald notes that this decision can have serious financial consequences, to the tune of up to tens of thousands of dollars in taxes.
McDonald created a retirement tax calculating tool, called the Retirement Tax Saver, with the help of his software engineer son. Conventional wisdom says savers should wait until 72 to take their money out of tax-deferred 401(k)s and IRA accounts, but McDonald disagrees. Here, he presents his strategy for taking a more tax-advantaged approach, particularly as the Tax Cut and Jobs Act of 2017 expires in 2026.
McDonald builds out a concrete explanation of why many investors should not wait until Required Minimum Distributions begin at the age of 72, including examples with real numbers. This will help readers understand where they are and what they may need to do when they begin to withdraw from their accounts in order to achieve the “have-your-cake-and-eat-it-too outcome” he touts. Examples are set up to cover married or single readers, at various levels of savings.
Readers who are in their 50s and 60s and beginning to plan for their golden years will find helpful, concrete tables and to-the-point planning advice. This is a hands-on approach — he advises annual finance checkups using his Retirement Tax Saver tool (found on his website) — and readers already overwhelmed by financial issues may find the numbers hard to wade through. Additionally, too much of the beginning of this otherwise-concise book is dedicated to convincing readers they need a book they’ve presumably already bought.
Overall, however, the information within—and his Retirement Tax Saver tool—will be a godsend for savers who don’t want to lose their carefully stashed cash.