Retirement options abound, the world is your oyster — but know what the tax rates are before you go!



Imagine waking up every day to breathtaking scenery, delicious cuisine, and a relaxed, stress-free lifestyle. You, in retirement, real retirement. Many people dream of retiring to a warm place where the sun is always shining, and there’s a lot of sand involved. If you were going to retire to a beautiful island, which one would you choose?


Aruba is a popular option. It’s a beautiful island with beautiful weather, beautiful beaches and happy people. Life would be slow and sweet there.


However, it’s not so beautiful for taxes. According to recent studies, Aruba has been ranked as the worst place globally to retire due to its high taxes. The government imposes heavy taxes on both residents and non-residents, making it an expensive place to live. If you lived in Aruba in 2022, your marginal tax rate would have been 52%, according to the latest data available. 


The marginal income tax rate is the tax rate applied to the last dollar you earn. Here in the United States, we have a progressive income tax system, meaning the marginal rate is the highest income tax percentage paid. In addition to paying the top marginal tax rate, the top earners also pay the majority of the income taxes.


That would be you!



In 1980, the top 10% of U.S. wage earners paid nearly 50% of the total tax bill. One out of ten income earners was responsible for half of the income tax burden. Today, the top 10% of wage earners pay approximately 70% of the tax bill.


Nobody knows for sure which direction tax rates are heading. If you’re like most, you believe you’ll continue footing most of the tax bill. For this reason, it’s important to understand how taxes work when it comes to your retirement capital.


Your retirement capital depends on more than income taxes. It can be taxed as many as three times — income taxes, capital gains taxes, and estate taxes!


One of my favorite sayings is, “You can make more money by saving taxes than you can by making more money.”


With 72,530 pages of IRS tax code — yes, 72,530 pages — you have infinite opportunities to save taxes. But saving taxes requires proactive preparation.


There are many beautiful places, inside the US, by the way, and globally, to retire. It is imperative that you understand the taxes and the cost of living of your retirement location.


If you don’t know if your tax burden can be lowered, you need to find out now! Speak with your financial advisor, who should be addressing taxes as part of your retirement plan. 


If not, you are jeopardizing your dream of retiring to that beautiful island…




Marc Goldstein, our Finance Editor, is a nationally known Financial Educator and Retirement Wealth Specialist, who helps people protect and pass on their wealth.