OPINION – Federal income taxes over the last two decades have been at historical lows; even though our Country has been in two wars and our Federal Government has grown tremendously with Department of Homeland Security. Fiscal concerns have become prominent in Cities, Counties, States and the Federal Government. We are witnessing trends of higher net investment tax, and increase in sales tax just to name a few.

Lack of revenue in our Government and financial obligations to pay our dept, is the catalyst for increased taxes. Here are a few things you can do to plan for higher taxes in retirement.

Open a Roth IRA. By starting, or, converting into Roth IRA, you will have paid income taxes ‘up front’ on your money and you will not have to worry about paying taxes during your golden years as you have tax deferred growth and tax free withdrawals.

The second thing you can do is have a cash value life insurance policy. This policy allows you to withdraw money while living tax free. It is important to make sure your insurance professional has experience properly setting up these policies.

The third thing you can do is invest in municipal bonds. Local and State Government always needs funding for projections. Investing in these projections will give you tax free interest payments. Make sure to look at credit worthiness and financials of the municipality you’re investing in, as municipalities can go bankrupt. Prime examples of cities that have gone bankrupt in last few years are Vallejo, Detroit, Stockton and San Bernardino.

These tips will adequately prepare you for higher taxes in the future. It will also help minimize worrying about how our Government is going to pay for its obligations.