“Pay me now or pay me later.” – a memorable FRAM oil filter commercial. According to Wikipedia the commercial said: “You can pay me now, or pay me later”, which is usually presented as being uttered in its advertising by an auto mechanic, who is explaining to his customer that he can either pay a small sum now for the replacement of oil and filter or a far larger sum later for the replacement of the vehicle’s engine.”

Samuel warned the Israelites that their demand for a king would be costly. He said they would be fighting the king’s battles and he would exact taxes on all of his subjects. They did not listen to Samuel and they got what they asked for. They got a “taker.” Here is what this looks like:

1 Samuel 8:10-18 – “So Samuel told all the words of the Lord to the people who were asking for a king from him. 11 He said, “These will be the ways of the king who will reign over you: he will take your sons and appoint them to his chariots and to be his horsemen and to run before his chariots. 12 And he will appoint for himself commanders of thousands and commanders of fifties, and some to plow his ground and to reap his harvest, and to make his implements of war and the equipment of his chariots. 13 He will take your daughters to be perfumers and cooks and bakers. 14 He will take the best of your fields and vineyards and olive orchards and give them to his servants. 15 He will take the tenth of your grain and of your vineyards and give it to his officers and to his servants. 16 He will take your male servants and female servants and the best of your young men and your donkeys, and put them to his work. 17 He will take the tenth of your flocks, and you shall be his slaves. 18 And in that day you will cry out because of your king, whom you have chosen for yourselves, but the Lord will not answer you in that day.”

Many have a choice to make regarding taxes in retirement. As someone on Social Security, I get to pay taxes on my Social Security income and on withdrawals from my traditional IRA. Back when I first started saving for retirement I was clueless about the significance of these costs that the Federal Government IRS “king” would want.

Give some thought to looking for ways to keep your tax burden to a minimum in retirement. One effective way to do this is to use a ROTH IRA or ROTH 401(k). Yes, you will pay the taxes now before you add money to your ROTH, but you will probably benefit from this approach many years from now. Do the math. Remember that the growth in your traditional IRA or traditional 401(k) is TAXABLE. The dividends are TAXABLE. That is not the case with the ROTH. The IRS king cannot touch those dollars when you do your withdrawals.

Well, let’s hope the king doesn’t change his mind and the rules!