Park City financial planner’s book explores tips for retirement saving
Bill Mullen says too many people fall victim to common pitfalls
March 17, 2017
Bill Mullen, a Park City-based financial planner, is astounded by what people don't know about saving for retirement.
He has seen it all, from people in their 20s under the impression they don't have to think about preparing for retirement for another few decades to recent retirees surprised by the amount of taxes they owe when they cash out their 401(k)s.
Now, he's doing something to help them.
Mullen recently wrote and published "The Tax Ticking Time Bomb: How to Recognize & Manage Tax Traps in Retirement," a book dedicated to helping ensure people of all ages can avoid some of the most common financial pitfalls.
"It's the first time I know that someone has taken information about how to invest and walks people through it in an academic way," he said. "That's how I invest for my clients."
Mullen, who has a passion for writing, said he has been thinking about publishing the book for a long time following a long career of encountering people who were ill-prepared for the financial rigor of retirement. Money, he said, is something people must deal with through their entire lives, but few know enough about financial planning to be secure as they grow old.
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"I just see so many people who have been thinking about what would be their golden years and haven't saved anything," he said. "… I see too many people that are going to fail. Their golden years aren't going to be golden.
Mullen said his book is split into two halves, with one dedicated to helping people who are nearing retirement. Mullen said two of the most common traps people that age fall into are beginning to save too late for compound interest to multiply their savings, and failing to take into account the chunk of change the government takes from 401(k) or IRA withdrawals.
"Even if you had saved in a 401(k) or contributed to an IRA, and if you're real lucky, maybe you built up $1 million or $2 million," he said. "Well, Uncle Sam owns about a quarter, maybe one-third, of that. You've got to save that money without any taxes early on, when you get a tax break every year you contribute to a 401(k) or an IRA."
Another common mistake is accepting a larger income in the year before retirement — whether through bonuses, taking out pension funds or selling property — causing a person to pay more for Medicare.
"These are all things that people don't think about," he said.
On top of that, Americans are living longer than ever before yet still retiring at 65, meaning they have to save up more to be financially secure through the rest of their lives.
"I tell people all the time, 'The good news is we're living longer, and the bad news is we're living longer,'" he said. "Therefore, the question is how do you sustain a living well into 25 or 30 years of retirement? At 85, it's extremely difficult to find a job, and at 85 you probably don't really want a job."
As well as discussing issues surrounding retirement accounts, Mullen uses the book to examine other financial options that may make more sense for people nearing retirement. He said people can get access to tax-free money through cash-value life insurance policies or taking out reverse mortgages on their homes to create nest eggs.
The other half of the book is geared toward people who are still in the earlier stages of preparing for retirement. Mullen said the book stresses the importance of putting money into retirement accounts as early as possible, even if it's only $50 or $100 a month. By the time someone reaches retirement age, even that modest amount will turn into hundreds of thousands of dollars. That's not possible, though, without an early start.
"Unless you really start early, you can't get compound interest working for you," he said.
A few months after the release of the book, Mullen is already pondering the next one. Though he's devoted his career to financial planning, he likes writing, too, because it presents a different kind of challenge.
"I've always enjoyed that, so I thought I'd do this," he said "And I'm thinking of a second book, which is going to deal more deeply with just the retirement side of things."
More information, as well as a link to purchase the book, is available at Mullen's website, savinginvestors.com.
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