Minimizing the Retirement Tax Time Bomb w/ Ed Slott #863

Episode Transcript
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Speaker 1 (00:00):
Welcome to How to Money. I'm Joel and I am that,
and today we're talking about minimizing the retirement tax time
bomb with Ed Slot.

Speaker 2 (00:26):
It would be tough to find anyone who knows more
about IRA's than Ed Slot. And that is a quote
not from us here at How to Money, but from
USA Today, the Journal, the Wall Street Journal. They've actually
named our guest as the best source for IRA advice,
which is incredibly high praise. And so it should come
as no surprise that we're talking about retirement accounts today.

(00:47):
Ed Slot's company is the nation's leading source of accurate,
timely IRA expertise and analysis, which they provide to financial advisors, institutions,
and media like us. He is often quoted in The
New York Times, Forbes, Kiplinger, countless others. He's appeared on
virtually all the TV networks out there, and he's author
of the new book, The Retirement Savings time Bomb Ticks Louder,

(01:10):
which is a follow up to his previous book from
a few years ago, which we'll also discuss today. But
Ed Slott, thank you so much for talking with us
today at How the Money.

Speaker 3 (01:17):
Well, great, great to be here. You just took away
my secret weapon.

Speaker 1 (01:21):
What's that?

Speaker 3 (01:22):
Low expectations?

Speaker 1 (01:24):
Sorry about that?

Speaker 3 (01:25):
Yeah, how big of a build up?

Speaker 1 (01:28):
Well, when you are as experienced and someone like you
has just dove in so deep when it comes to
something like Iras.

Speaker 2 (01:34):
And so we talked to a lot of listeners and
they think that we love roth Irays, but actually I
think Ed Slott might have his beat. We're excited to
talk about that later on today. After reading what you've
written about and what you've how much information you've delved
into on roth Iras, I'm like, I feel like I
know nothing in comparison to Ed Slott.

Speaker 3 (01:52):
Ed.

Speaker 1 (01:52):
The first question we ask everyone who comes on the show,
by the way, is what do you like to splor
jeh on? Because Matt and I we like to splor
jeh on good beer. That's kind of somewhere into.

Speaker 3 (02:00):
I don't even have anything that is what do I splurans?

Speaker 4 (02:04):
Kraft beer is our thing.

Speaker 2 (02:05):
But there's something that that people think is a waste
of money that you spend a little bit extra on.

Speaker 3 (02:10):
Oh no, I don't waste that. I eat very simple.
I don't drink what do I splur John, I don't
know pizza, make.

Speaker 4 (02:18):
Cars, watches, vacations, pizza.

Speaker 3 (02:22):
Pizza, you know, but I eat simple. You know. It's
a good way to save money, by the way, and
I don't do it to save money. I like local,
regular food. Yeah, I don't get anything. I can understand
what the ingredients are.

Speaker 2 (02:34):
I feel like there's a resurgence coming of like we're
the only ingredient of the food should be the food itself, right,
So it's.

Speaker 3 (02:40):
Like, well, who knows what's on you know. I like
pizza with all kinds of stuff on it, and I
probably shouldn't like that, but that simple stuff. Chicken wings,
I mean, by the way, I just saw in the
paper recently. I don't know what made me think of
chicken wings, but sometimes my wife likes boneless wings. And
I don't know if you saw in the paper. There

(03:01):
was an Ohio court case that just resolved the question.
Apparently that somebody sued that they said boneless wings. The
guy was having boneless wings at a place. There's a point,
I'll get to the point on this at a place
in Ohio and it had a two inch bone in
it that he swallowed and needed all kinds of surgeries.

(03:23):
Is horrible. And then he sued this company and it
actually went to court and the judges ruled that boneless
wings indeed have bones. And that's okay. You know that.
In other words, a guy lost.

Speaker 1 (03:35):
You would say, just a marketing tactic.

Speaker 3 (03:37):
Yeah, So it made me think that, wait a minute,
if if people say these are boneless, you know, they're
free of bones. When somebody says something's tax free, is
it really tax free or they're like taxes in there
that you have to swallow. So that that was what
I took.

Speaker 4 (03:55):
Out of that story, anything that I can apply it.

Speaker 2 (03:57):
To the ad the books that he right, I love it.

Speaker 1 (04:00):
That's right.

Speaker 3 (04:01):
Well, I'll tell you another one another story. Are you
a nice hockey fan?

Speaker 4 (04:05):
I've been known to go to a match?

Speaker 3 (04:07):
All right, I'm gonna the fact that you call the
game a match tells me all I need to know.
All right, But it doesn't even matter. But there was
a story about one of the famous hockey players. He
plays on the Tavarus. He used to play for the
long the Islanders. Now he got a big one hundred
million dollar contract with Toronto which involved Canadian and USA taxes,

(04:29):
and it was base his contract was based. I guess
he worked with an agent because the taxes are so
heavy when you have two countries hitting you at the
same time. I guess, like a lot of athletes, it
was based on how much he nets after tax. That's
how you should do retirement planning, how much you net
after tax.

Speaker 1 (04:50):
Yeah, that's a good point because lots of times we're
thinking about especially when we're talking about the four to
one k traditional four one k or a traditional IRA.
You're right, and this is something you speak to a lot.
It might look like a big number, but it's not
as big of a number as it actually seems. And
one of the things you say at is the single
greatest threat to a dream retirement is taxes. So can
you can you kind of convince us that that's the case.

Speaker 3 (05:13):
Well, it's not only the taxes, it's the uncertainty of
future taxes that could hit you at the worst possible
time in retirement. When you want stability and certainty. You
want to know you have a certain income coming in.
How much of that is going to go out to
the government. We don't know that. That's the scary part.
We know what it is now. So the whole point

(05:34):
of my book is to lock in today's unbelievably low
tax rates. Everybody complains about taxes, but these are the
good old days. If you don't do something now, you're
going to look back, Oh, how did I blow that?
Twelve twelve percent, twenty two, twenty four percent taxes were
on sale and I blow it.

Speaker 4 (05:53):
It's gonna seem quaint.

Speaker 2 (05:55):
Honestly, hearing you say this makes me think about mortgage
rates back in the right. I mean, for the longest
time we had rock bottom mortgage rates. But the thing is,
you start getting used to that, and you start thinking
that that becomes the norm. But then quickly, as we've
seen that, it doesn't stick around, and you're seeing the
same thing about tax rates. You points to the fact
in your book, how tax rates they've pretty much been

(06:16):
on a steadied decline since the nineteen forties. That's the
that's one of the biggest arguments that you've got four
tax rates returning to where they previously have been.

Speaker 1 (06:24):
Is that right?

Speaker 3 (06:25):
Well, you know, there's a saying. I think Mark Twain
said history doesn't repeat itself, but it rhymes or another
way to say that those who don't learn from history
are bound to repeat it. And that's what I worry about.
I worry about the growing debt. The thirty four trillion
or deficit just hit a trillion dollars. Now, some people

(06:45):
could say, well, who cares about that, because Congress will
keep kicking the can down the road. But as a CPA,
as an accountant, at some point, I have to believe
in math and this whole You know, there's only three
kinds of people in this world, three kinds, those who
understand math and those who don't.

Speaker 1 (07:07):
Three kinds. I appreciate that, Y.

Speaker 3 (07:09):
Yeah, yeah, I need somebody to hit the snare on
it anyway anyway, but the math tells me that the
whole country is living on a credit card bill. At
some point that bill has to be paid, I would think,
unless Congress keep kicking the can down the road. But
you don't want to be the one holding the bag.

(07:29):
When Congress comes to its senses and says we need
more revenue, where can we get it? H let's hit
those people that made that deal with us. We got
them good. Who's at most at highest risk of losing
or being subjected to future higher taxes? Those are the
people who do nothing now, the people with the most
money in pre tax of four oh one k and

(07:51):
iras Because that money has not yet been taxed. In
my book, I call it the low hanging fruit or
a big juicy steak to Congress, because Congress has every
right to say, that was a deal you guys made.
You got your deduction up front. Now we tax it,
but we don't know the rate. You mentioned a mortgage.

(08:11):
You know there's a mortgage on your IRA. I always
say your IRA is an iou to the irs, but
unlike a mortgage, like when you go in for a mortgage,
because the concept is similar. There's a debt on your IRA.
Part of that is owed right back to the government.
It's not all yours. Most people don't see that. Matter

(08:34):
of fact, I had clients over the years. I remember
this one guy years ago, he finally hit a million
dollars in his IRA. Was so happy. He came in.
He showed me this statement. He said, look at this,
I got a million dollars in my IRA. I said,
what are you looking at? What do you show me?
That's not yours. It's just temporarily on your letterhead. You're
not keeping most of that. And he said, what do

(08:56):
you mean it's mine? No, it's not yours. You have
a partner. Sam it's a joint account. But think of
a think of your IRA like that. Can you imagine
thinking of it as a joint account, which it could be.
But here's the difference. You go in for a mortgage.
Let's say you go in, you do all you due diligence,

(09:18):
You know what that mortgage is, you know how much
you owe. But the mortgage on your IRA is open ended.
In other words, if you went in yeah, yeah, depending
on how much Congress needs. So imagine you went in
for this mortgage and you did all your homework on
your home. You know the rates, you know the comparables
and all the you know everything. You're coming well prepared.

(09:40):
You have all your notes, and you say to the banker.
You're sitting there with the banker. If anybody actually does
this in a bank anymore. But let's say you're going
old school. You're in with the mortgage company, the banker,
and you start showing all your numbers, and the banker says,
don't worry. You put that stuff away. That's all meaning.
But we did our homework. What's the rit Don't worry

(10:03):
about the rate? What do you mean, don't worry about
the rate. Don't worry about it when we need the
what about payments? Don't we have to repay you? Don't
worry about it? What do you mean, don't worry about it?
When we need the money back from you, we'll tell
you what the rate is.

Speaker 1 (10:21):
That sounds scary?

Speaker 3 (10:22):
Yeah, who would sign up for that deal? We all did.
It's called an IRA.

Speaker 2 (10:27):
Sure, So okay, I quick follow up, And maybe this
is slightly outside of your realm of expertise, even though
you do know what's on here. But on one hand,
you can either increase taxes or on the other hand,
you can reduce what it is that you're paying out.
What it sounds like, you think that there's a higher
likelihood of the fact that people are going to want
to maintain receiving their benefits what it is that the
government is doing for them, and so therefore the only

(10:49):
alternative is to actually increase taxes.

Speaker 3 (10:52):
I think the only alternative is to increase taxes, But
it's not politically viable, so I don't know if it'll
ever happen. Maybe Congress will keep kicking the case down
the road. But that leaves you with the uncertainty of
what future taxes might be. When you need to have
certainty the most in retirement when a lot of things
are fixed for you.

Speaker 1 (11:12):
Adding into the future uncertainty question is literally a tax program,
The Tax Cuts and Job Act that is supposed to
sunset right has a fixed expiration date. So how does
that impact the way you think about our current response
to future tax rates?

Speaker 3 (11:30):
Well, tax rates are supposed to go up, and we
don't know if it's going to be totally gone, you know,
come back the higher rates. We don't know if they're
going to come back this post as you say, in
twenty twenty six, if nobody does anything, they'll be higher rates,
mostly on the top level, but a lot of people,
even the middle income people, will be paying higher taxes

(11:53):
because the big standard deduction. There's giant standard deductions. We've
all become used to ninety center. The people don't even
itemize anymore. They take these giant standard deductions. That's IRS
numbers ninety percent. If that goes back to cut in
half and you have to rely on certain itemized deductions,
your taxes may go up.

Speaker 1 (12:14):
That's true, yea.

Speaker 2 (12:15):
So okay, So we're talking about roth accounts, and the
reason it sounds like that you're a big fan is
essentially that you're you're it's a guarantee, right. Going back
to the mortgage example, it's the equivalent of getting a
locked in rate and perhaps even the ability to not
even see your Yeah, your escrow go up. Maybe you
can like lock in your insurance somehow as well. Is
that Is that why it is that you are such

(12:36):
a big fan of roths?

Speaker 3 (12:37):
Yeah, you hit it perfectly. You are locking in known
rates which is zero, and you know what people say
to me, ed, But what if you're wrong? What if
rates go down? First of all, does anybody I'll give
you an example. I talk to CPA's other financial advisors,
even consumers, and I always ask this question. First. I

(12:58):
always pull the audience and say how much they show
by show of hands, how many of you believe tax
rates will go up in the future. Maybe half the
hands go up. Yeah, they said, all right, I'd have
to have to. Then I ask a follow up question.
I said, all right, I see, let me ask you this,
how many of you think tax rates will go down?
Not one hand? And then I said, but that's the

(13:21):
same question I just asked you. The first question just inverted.
So nobody really thinks tax rates will go down. We're
at rock bottom now. So if rates go up, the
ROTH always wins. Really, the whole raw thing is really
just a bet on where you see your future tax
rates going. And that leads to something else, which I'm

(13:43):
sure is going to be your next question, but ask
it anything.

Speaker 1 (13:46):
Okay, So my question here is, yeah, we're talking about
future tax rates, but we're also talking about like the
individual reality of income. Right, So how does someone's specific
income influence your advice? High income earners? Right, that's is
the people in those higher tax brackets who would say, oh,
that's when the traditional makes the most sense. And of
course if you're early on your lower earning years, the

(14:09):
ROTH makes like it's slam dunk. So what about opting
for traditional accounts because of some of those secondary factors too,
like qualifying for a subsidy for healthcare or something like that.

Speaker 3 (14:20):
Yeah, those are issues, but they're not the biggest issues.
I thought you were going to ask me, and you
were skating around it because the number one question when
I talk about rates going up, your rates going up?
Because I said, it's all based on a big bit,
and when you started talking about higher income people, the
next question I usually get, But ed. I got this

(14:41):
from my clients over the years, my rates in retirement.
If I don't have that big W two anymore, my
rates will be lower. So that tells me I shouldn't
do the roth because I'll be based on your math.
If you're in a lower bracket, lower marginal rates in retirement,
you do better with a traditional ary not converting. And

(15:02):
that's true. The myth proves that out. But that to
me is the number one myth in retirement. Everybody thinks
I'll be in a lower bracket and retirement, and we
have almost never seen that happen, even for high income people.
I'll give you an example. But there are a number

(15:23):
of reasons for it.

Speaker 1 (15:23):
But is that because they're contributing so much to that
retirement account.

Speaker 3 (15:26):
Well, I'll tell you why I had this guy. I've
been telling him about the raw years ago when it
doesn't even matter when, but years ago, when I was
doing more client work. Anyway, for a year after year,
he's coming into retirement. I said, do the raw to
the raw. No, no, no, no, I'll be in a
load to bracket and retirement. This went on every year.
Finally he comes in all happy for all eager in

(15:49):
anticipation because he came in to do his taxes for
his first full year of retirement. In other words, no
W two at all, so he can't wait to get
the results I give him the tax attorney said, ed,
how could this be? My income's higher than my best
years working. How could this be? I said, it's easy

(16:09):
because you never listen to me. That's how it can be.
I told you this would happen. He said, but I
don't even have my W two. I said, yeah, but
all as you just said, all those years you kept
contributing to the four one k and eventually rolled to
an IRA, and now your required minimum distributions, your R
and DS are in fact higher than your best W

(16:29):
two ever, and now your income will be higher and
your taxes will be higher in retirement, so you probably
should have converted. It's not only the income that's higher.
Deductions are generally lower. You lose both ends in retirement
because you don't get the deduction for your four to
one k contributions anymore. You're not working. You probably, in

(16:51):
retirement don't have any tax benefits for dependent or minor children.
You probably don't have any mortgage interests because you paid
our your house. So a lot of things are happening
both on the income side, where your income's higher because
you'll let your account grow and your deductions are lower.

Speaker 2 (17:09):
Okay, and I totally get where you're coming from, But
this also sounds like a nice problem to have, right
somebody who's a high earner, maybe somebody who's paying a
pretty well known CPA in New York. What about for
folks out there who are they're pretty dang frugal, they're
living very affordably, and they truly, in fact, are going
to expect to see their income decrease significantly in their

(17:32):
quote unquote retirement years. Do you think that it would
make sense for them?

Speaker 3 (17:35):
That could be, but I wouldn't put all my eggs
in one basket. Maybe for those people doing a series
of smaller conversions over the years. Here's the key to conversions.
You want to use up the lower tax brackets, these twelve, twenty, two,
twenty four percent. If you leave any of those unused,
you've blown it. You've just given a gift to the

(17:56):
government that you can never get back. An unused tax
bracket can never You don't get it back.

Speaker 1 (18:02):
Ye, yeah, once that years past, you can't go back
in time.

Speaker 3 (18:05):
And to leave that on the table. Like I've had
people over the years tell me, Ed, look at this,
I paid no tax this year because my income was
so low. I said, I'm sorry to hear that, Not
that your income's low. I'm sorry you paid no tax.
That tells me you didn't use the lower brackets. You
should have been converting that large IRA and used up
the brackets so hard. So sorry to hear your tax

(18:26):
planning went off the rails.

Speaker 1 (18:27):
Yeah, that's more of a myopic view. It's a single
year view versus taking a exact rist approach, right, And
you're like, I want the pay the lowest amount of
possible taxes over time. And some of the people who
are opting for traditional accounts instead of ROTH accounts are
thinking about single year versus multi year planning. Talk about
the idea of tax diversification for a second, ED, because like,
what about the idea of having ROTH and traditional assets

(18:49):
you can kind of choose your own tax adventure or
such in retirement. It sounds like you don't think that's
a solid idea and you would rather people go all
in on ROTH accounts. Is that right?

Speaker 3 (18:59):
No? This something to be said. You said tax diversification.
I use the term a little different. I call it
tax risk diversification, because you should everybody should have some
position in tax free just as a buffer, as a
guard rail, as a defensive tactic in case rates do
go through the roof. That's your only defense. So you

(19:22):
have to have something in a row would say, I
would say at a minimum, and it's okay to have
a hybrid system. Maybe you actually believe you'll be in
a lower bracket in the retirement and there's reasons not
to convert. Maybe you're a big giver to charity and
you want to do these qcds when you get all
to qualified charitable distributions. Iras are great vehicles to get

(19:44):
money out at zero percent tax rates, so you might
want to keep some iras for that. Or you might think,
what if I have big medical expenses, I want to
be able to deduct them, Well, you have to have
income to deduct them. You may want to keep some
iras for that number of reasons to keep something in there.
But I would say everybody should have some kind of

(20:05):
tax risk diversification by building up in your wrath.

Speaker 2 (20:09):
Yeah, So basically what it sounds like is a little
bit of both perhaps. So yet's say you've got a great,
great four one k plan at work, You've got a
low cost plan that you can be a part of
in a widely diversified index fund. Maybe go ahead, take
the tax break. Now contribute to the four one k,
but also beyond that. Yeah, maybe folks should be considering
their wroth irais for any dollars invested beyond that four

(20:29):
one k.

Speaker 3 (20:30):
Yeah, except it's not a tax break. People call it.
I even called it a deduction for the four oh
one k, because that's what people call it. You know,
you get you pay tax on the net amount. For example,
with a four oh one k. If your wages of
fifty thousand and you take you say, put ten thousand
of that my four oh one k, you only pay
tax on forty thousand the net or a four to

(20:53):
one k. So people call that a deduction or exclusion
from income. But it's not a real deduction to me,
a real deduction. As you take a medical deduction or charity,
you get that tax benefit, you never have to give
it back a deduction for a four oh one k.
Taking that deduction is really just alone you're taking from
the government to be paid back probably at the worst

(21:13):
possible time in retirement, unless you're sure to be in
a lower bracket.

Speaker 1 (21:17):
All right, We've got a few more questions we want
to get to with you, including you want to talk
about like the timing of roth conversions, because let's say
people are listening to you and they're saying, I want
to kind of remedy is ticking time bomb? How do
I do that? When do I do that? We'll get
to some questions on that with you in just a second.

Speaker 2 (21:40):
We are back from the breaks offing with Ed slot
about the ticking tax time bomb, and Ed a lot
of our previous segment you were discussing the wroth Ira
and specifically like there you raise no questions about the
roth Ira essentially going away, and so I guess that's
what I would address, Like what are the chances of
a like a roth Ira rugpole where the government needs

(22:03):
money so badly that they you know, they they're looking
at the traditional accounts and they're thinking, well, yeah, of
course we're going to be able to milk that for
all that we can.

Speaker 4 (22:11):
But then you've also got this.

Speaker 2 (22:12):
Other giant pile of money that is almost it's like
the forbidden fruit. But is there a point in time
when the fruit becomes I don't know, less forbidden.

Speaker 3 (22:20):
This is a great question you asked. You know why
I when I do seminars, especially to consumers, and I,
you know, keep going on the roth. I'm all in
for the roth because I love tax free and I
haven't ever had a person I recommended it to to
come back and say I wish I didn't do it.
Everybody is drilled. They don't even remember they paid the tax.
All they're looking at is their accounts going up and
up and up, and it's all tax free. They keep

(22:42):
one hundred percent. But given all that and all the
stuff I talk about about the big roth fan because
I love tax free in retirement, who doesn't. But there's
always somebody that asked me. That's a number one question
I get at every seminar I do, especially from consumers.
Except the only difference is they don't ask it as

(23:02):
nice as you just asked it. They'll say something along
the money, Yes, it's it's here's the question I get,
can of ed? This is great? You talk about all
the roth roth. Can I trust the government to keep
its word that roth iras will always be income tax free.
And my answer is always no. You can't trust Congress

(23:25):
as far as you can throw them. As CPA's we
have an old saying tax laws are written in pencil,
so they can change them anytime they want. But here's
why I believe you're safe with a wroth. They're never
gonna they're never going to touch it. It's good your question.
You don't have to worry about will they change? Uh? No,
One thing Congress learned, well, one thing we learned from Congress.

(23:49):
Lucky for all of us, Congress are the worst financial
planners on earth, and we should use that shortsighted mentality
to our advantage. It's one thing Congress learned about ross.
And they learned this back in twenty ten. Do you
remember what happened with roths in twenty ten?

Speaker 4 (24:08):
I don't. Actually, Well i'll tell.

Speaker 3 (24:10):
You because I told everybody on earth to take that deal.
Congress as usual needed money.

Speaker 1 (24:16):
Oh this was when it was like two you could
delay paying tax right for a couple of years.

Speaker 3 (24:20):
Yes, well it was bigger than that. It used to be.
When the roth rules were first written, people, you couldn't
convert to a wroth if your income exceeded one hundred
thousand dollars. In twenty ten, Congress realized, oh, we need money.
Let's let the rich people, you know, the people with money,
let them convert. We'll get them money. And they eliminated

(24:41):
that requirement, so it opened up the floodgates for people
to convert. In two thousand, I converted everything. I begged
everything I converted that year. I begged everybody and every
seminar take that deal. In fact, recently I just had
a seminar. I was telling a group of CPAs CA
colleagues about this, and I said, I begged you, guys,

(25:03):
if you remember to take tell your clients do it
for yourself like I did to take that deal in
twenty ten. And I always I told them I converted
everything in twenty ten. And I threw the question out
to CPAs and I said, I converted everything. Guess how
much tax I paid? And they said, well, you got
to give us the rate and this I forget that
I paid zero zero, And they're looking at their heads.

(25:27):
Their heads are turning around like it's exorcist to something. No,
I paid zero. You should have been telling your clients
to take that deal. That was the deal you paid
zero in twenty ten half and eleven half in twelve.
So in effect, the government gave everybody an interest free
loan to build a tax free savings account. It was

(25:47):
a deal of a century and everybody should have taken
that deal. What did Congress learn from that? They saw
boat loads of money, revenue coming in from people like
me and everybody else. They made large conversions and Congress said, wow,
what a deal. Look at all the revenue they bring in.
And they didn't look back. You know that they what

(26:08):
they're losing in the future because they're so short sighted.
You know, they look at budget cycles, five ten year
budget cycles, and they realize, hey, this rough thing brings
in money, let's expand it. So they expanded rough warowin
K's and blah blah blah, on and on until they
really showed their hand in Secure two point zero, the

(26:28):
most recent big tax law where they went roth crazy.
I call it roth Amania. They said, now let's let's
find every which way for people to do roth. Let's
have and we have them now roth sep I rays
roth simple Iras five twenty nine to roth irase rough
warowin K's no rm D's Rough four and k's matching

(26:48):
Roth Warol and K catch up brought roth Roth.

Speaker 1 (26:51):
Why did they do for the college investment rough?

Speaker 3 (26:55):
Everything Ruth? So why did they go all in on
the rough because of their short sided mentality, which we
should take advantage of, saying, look at all this money
we get in because the only money that can get
into a roth ira is already taxed money. They get
their money upfront, in fact, in secure two point oh,

(27:15):
the WROTH, all this ROTH stuff I just told you,
these Roth enhancements and secure two point oh. If you
actually look at the bill and you can see that online,
if you go to the Congressional website or whatever that is,
uh and you look at it all these pages of stuff.
You look at the heading where the WROTH provisions are.
It's under a giant title and giant font Revenue provisions.

(27:41):
That's what it says, revenue provisions. So that tells you
how Congress thinks about the WROTH. It's a money grab,
it's a revenue generator, and it's good for us. So
I mean, you know, let's take advantage of their short sightedness.
So I'm going to tell you the secret. I just
told you the secret.

Speaker 1 (27:59):
You know what.

Speaker 3 (28:00):
Franklin Are, one of our founding fathers, said about secrets,
three people can keep a secret if two of them
are dead. But here's the secret Congress, and I just
gave it to anyway. They love roth iras it's not
going anywhere because it brings in money up front and
they don't look at the back end. Will they trim

(28:21):
around the edges and find little ways maybe, But if
they do anything to break the golden goose or kill
this golden goose, they're going to kill their revenue strength forever.
So I think the long story short, Roth is here
at a stake my opinion.

Speaker 1 (28:36):
So we've been talking a lot about Roth contributions, and
then you just kind of talked about Roth conversions specifically
in twenty ten being this random occurrence that was amazing
for investors. You've called Roth conversions overall a bet. What
are the major factors at play in this bet? And
how should How do money listeners think about, Oh, hey,
I've got all this traditional IRA or traditional four or

(28:57):
one K money. How do I know when and how
to turn that into roth money?

Speaker 3 (29:01):
Well, you don't know. There's two parts to that. Some
people ask when should I convert? Like market timing. You
can't do it, so forget that part of it. You know,
people say should I, you know market went down today,
should I convert? By the time they convert, it went
up a thousand points, So forget that. You can't market time.
The best way to do the ROTH is, as I said,

(29:21):
sort of dollar cost averaging into the market, using up
the low brackets wall annual conversions over time. But the
bet is that you believe tax rates will go up.
But if you also believe tax rates won't go down,
then it's a sure bet. If you believe your tax
rate in retirement may go down, then and do partial

(29:42):
But going back to the example you gave me earlier.
You know a high income earner, they're saying, well, I'm
at the top rates now I want to take my
deductions at the top rates. That may be true, but
you don't know what your future rates are. The top
rate is only thirty seven percent, now how do we
know the top and even a low rate when you're

(30:03):
in retirement can exceed that, So you don't know. So
the point is with the ROTH, it's a bet, but
you there's certainty about the bet that you can lock
in the rates that are here now. And the other
part with the ROTH is you control your tax rates.
You can control your tax rates how much you want
to pay. Now, once you hit age seventy three, which

(30:24):
is the required minimum distribution age, it's out of your control.
You don't control it anymore. Then the government says you
have to take a certain amount. I don't care what
it does to your rate. Then it's out of control.
You can control what you pay by using the Again,
I can't say it enough, the low brackets, filling up
those low brackets every year. You control how much you pay.

(30:47):
And that's the beauty of the ROTH. Now, say I'm
wrong about all of this ROTH stuff. It turns out
you've converted everything because you listen to this great show
and Matt, Joel and Ed and everybody's happy, and you
went crazy, converted everything, you paid the tax And it
turns out ten years later in retirement you say you
know ED was wrong. Taxes went down. What's the worst

(31:10):
case scenario if you lose the bet? So to speak,
this is what I love about the row. Your worst
case scenario, you locked in a zero percent tax rate
on this ROTH for the rest of your life and
ten years beyond it's not a bad consolation prize. Can't
beat a zero percent.

Speaker 4 (31:28):
Tax rate, that's true.

Speaker 2 (31:29):
Well, I mean it makes me think too of the
fact that, like you're talking of, like the fact that
the highest tax bracker right now actually isn't all that high.
Like that's one of the things you say, Like if
you look back to ring a Gamble on anything, is
that that tax rate the highest tax rates are going on,
like the floor, it's not that far away from where
we currently are, whereas the ceiling. Like again, like you
look back to the forties, and I think the highest
tax bracket was like ninety two.

Speaker 3 (31:50):
Yeah, do you have my book in front of you there?
If you don't, yeah, we do. Go to page twenty eight.
This is exactly why I put this chart on the page.

Speaker 1 (31:58):
That's the table that I was referring to. Yeah, it
was nineteen nineteen.

Speaker 3 (32:01):
Or thirteen, Well I did. I shaded in there on
page twenty eight. I give everybody the complete history of
tax rates from the Sixteenth Amendment in nineteen thirteen to
where we are now, and I shaded the years people
like me and many people listening to you now are
the baby boomers. The years the baby boomers were born.
And if you look at that nineteen forty six or

(32:22):
nineteen sixty four, the top federal tax rate, and I
did this as a frame of reference to show how
good we have it now. The top federal tax rate
for those years exceeded ninety nine zero percent for every
one of those years except the last year nineteen sixty four,
when the top federal tax rates dropped to only seventy

(32:45):
seven percent. Now, I'm told I wasn't there then. I
was ten years old then watching the Beatles on Ed Sullivan.
But I'm told by people who were there, they said,
when they dropped that tax rate, the top rate to
seventy seven percent. On seventy seven percent, the whole country
did a happy dance. That's more than double today's top rate.
So you got to look at for comparison. You know

(33:09):
who knows how bad it can get. So you can
lock in a zero percent rate for retirement with the
raw I know what, and control your rates right now.

Speaker 1 (33:18):
If we're talking about smart planning, one of the things
we've talked about on the show, Ed we talk to
people who want to take like an extended leave of
absence from work, or they want to take maybe six months.
They want to quit their job for a while, become
a digital nomad or something like that, wander the earth
and guess what, Wait a.

Speaker 3 (33:33):
Minute, stop, isn't that like an oxymoron? Digital nomad?

Speaker 4 (33:37):
If you're always connected, where are you getting no service? Yeah?

Speaker 3 (33:40):
Yeah, where are you getting service? I'm the Sahara desert.

Speaker 1 (33:43):
Yeah that's that's good. Well, yeah, most of them go
to the Sahara. That sounds intense, But yeah, what are
your thoughts on maybe purposely reducing your income for a
time in order to make the most of conversions and
pay the least amountain tax.

Speaker 3 (33:55):
You know, it's funny you mentioned that I had a
client that did that years ago. I remember I reference
when roths first came out. You couldn't convert if your
income was over one hundred thousand. I had clients. There
were two teachers, and they each took there and combined
their income from teaching was over one hundred thousand. But
the guy was so adamant about converting. He saw the

(34:18):
big picture right away, and he said him and his
wife took sabbaticals to keep their income under one hundred thousand.
They converted everything. At that point they were close to retirement.
They each had about five hundred thousand. This was back
in ninety eight when roths first came out, and they
converted a million dollars when they last I heard from them.

(34:40):
I think the husband died a few years ago. I
think that's when I heard from them. His wrath alone
was worth eight million dollars, all tax free. His teacher
friends laughed at him, you're taking a sabbatical so you
could pay extra taxes. They even saying, who's laughing now?

Speaker 2 (34:58):
So you think that that's a fas strategy, then the ability,
because that's one of the things you have control over
is your own g inta. You're talking about how you
don't have control over future tax rates, but we do
have the ability to moderate maybe how much we're working
in the here and now, so that we can land
ourselves in better financial positions.

Speaker 3 (35:14):
Well, you know that's not the same example I had
this guy. You know, the teachers have that built in sabbatical.
Your job is always there for you. I don't know
if it's that kind of job. Maybe, But would I
tell people leave their job in this market and then
what do they do when they decide they want to
work again? Maybe it's not available in this fast moving world.

Speaker 1 (35:32):
Well, something else you have to think about when you're
doing a Roth conversion is paying the tax, and you
have to have the money on hand to pay ask, right,
So talk to me about that.

Speaker 3 (35:39):
Well, yes, paying the tax. But here's the thing I
told you before. Tax rates are on sale. This tax
will be paid. Though it's not if, but when so
it will be paid. So it's just a matter should
we use today's money you have available, or wait till
maybe you have more money available, or don't do it

(36:00):
all and pay for it and retirement it will be paid.
I always say tax rates are on sale because people
love sales. Look at how they trample people on Black Friday.
How many people they could step over to get a
TV for ten dollars off or something. People love sales,
But unlike the thing in the store that's on sale.
Sorry to say, you don't actually have to buy it

(36:23):
with taxes you do. It's not if, but when so
you're going to pay for it. So my feeling is
whatever you could scrap together now, if you can't do it,
you can't do it. Nobody should go broke. I say
that in the book converting.

Speaker 1 (36:35):
You made a case for why the government loves roths. Right,
how come they don't expand the income limits and just
allow everyone or anyone to contribute to a roth? Is
it that, Pete? I mean, I remember the Peter Teel
story coming out, you know, billions of dollars in his wroth.
Is that what they're trying to prevent?

Speaker 3 (36:52):
Yeah, but that was a one off and he did
it legally. Yes, he has six billion or whatever in
a roth ira that he only paid a seventeen hundred
dollars for. He did it illegally, invested seventeen hundred dollars
in PayPal or whatever it was. But he did it
in his raw. So it's looking it's I think politically
it looks like a gift to the rich. But you're right,

(37:13):
if you can convert unlimited funds, why do they even
have an income limit for who can contribute? The whole
thing's ridiculous. Plus you can get around it by doing
a backdoor raw. So I don't see the point of it.
I agree with you.

Speaker 2 (37:25):
Yeah, if you think about it for more than a second,
like it makes me think that there is the potential
for them to expand that because if they are thinking
more with that sort of myopic short termism mindset, right, Ed,
like that they are going to want to get their
hands on those dollars sooner rather than later. Continue to
expand it. It looks like that they're being beneficial to
some of the highway journers out there, when in fact,

(37:45):
what they're trying to do is, I guess, get their
hands on more money. And we've got more to discuss,
and you mentioned the Secure Act two point zero multiple times.
We want to talk about one of the implications of
that when it comes to five twenty nine accounts, as
well as more.

Speaker 1 (37:58):
We'll get to all that right after this. Alright back,
we're still talking with Ed Slott talking about taxes and
you know, how to avoid them as much as possible
when it comes to our investments and keeping more of
the money that we make and that we save and

(38:19):
invest for ourselves for our own futures.

Speaker 3 (38:22):
Ed.

Speaker 1 (38:22):
What else you mentioned the Secure Act two point zero.
That was that created a lot of big changes in
retirement how we think about paying taxes in retirement require
minimum distributions. It also changed we mentioned this briefly five
twenty nine plans those got. That was one of those
things that Matt and I when we were asked questions
over the years, we weren't terribly keen on five twenty

(38:43):
nine because for this one specific purpose, and guess what
you should be making sure you're maxing out your own
retirement contributions before you even really consider five twenty nine plans.
But now five twenty nine plans that got a little
more flexible, they got better, and there's even wroth abilities
inside of that five to twenty nine plan. How do
you think about those now?

Speaker 3 (39:00):
Well, there is, but it's misunderstood or people talking about
how great the provision is. I just said it before,
but it's highly limited. Here's the problem with five twenty nines.
And I agree with what you said is absolutely right.
I used to tell clients because they would always do it,
you know, oh we just had a baby. Oh he's
going to be the next whatever president, right, and he's

(39:20):
going to go to Harvard and this, But what if
he doesn't Now you have you know, we've seen situations
where people have accumulated one hundred two hundred thousand that
they can't even spend in these accounts. What's happening is
some parents, grandparents are actually going back to school just
to use the money taking meeting classes or whatever. So
there was a problem with people having accumulated too much,

(39:44):
and maybe the kid didn't go to college, or maybe
they got a scholarship and killed the whole deal for them.
Damn kids got a scholarship. Who knew anyway? So the
money was building up. So along comes this provision helps
a little moderately because it only has an overall limit
of thirty five thousand, which you can't even use in

(40:04):
one shot. You can use it based on the contribution limit.
Say if it's seven thousand a year, you could do
it over five years, and that's it helps a little
to trim down those five twenty nine balances. But there
are limits you had to have. The there's so many restrictions,
like everything in the tax code, they just can't give
you a clean rule. I know.

Speaker 1 (40:26):
There's the five year old, the fifteen year rule.

Speaker 3 (40:27):
It just I know all of that stuff. But it
could help if you have, you know, let's say a
moderate amount, and even if you have a large amount,
so over time you could knock off thirty five thousand.
But here's where it gets interesting. If you've set these
accounts up for say two three or four beneficiaries kids
or grandkids. That limit goes to each beneficiary. So now

(40:53):
it's starting to add up to some real money, So
that could help.

Speaker 2 (40:56):
Do you see grandparents Do you see parents who have
over contributed to their five twenty nine accounts? And if so,
do you feel like that that's kind of an upper
echelon problem that those folks have or do you see
it being a little bit more widespread.

Speaker 3 (41:09):
No, I think they do it across the board. I've
ran into somebody just recently had a new grandchild. First
thing you wanted to do is open a five twenty
nine because he wanted to do something. And no grandparent
wants to put money in the kid's own name, And
they don't want to give it to their kids because
they don't trust their kids to blow it. They'll think
they'll squander it. No, that's for the grandchild, not for you.
I already gave you enough.

Speaker 1 (41:29):
Yeah, so when it comes to five twenty nine, if
you're trying to save money for you're a kid. We've
talked even on the show, and I'm sure you've talked
about getting money into a child's roth ira.

Speaker 3 (41:41):
Yeah, So that's the way.

Speaker 1 (41:43):
Superior to the five twenty nine, right, because you're you're
getting and yeah, what's your take on how to actually
facilitate that because the kid needs to have earned income.
But my goodness, if they're working in high school and
you can do some sort of mommy daddy match or
something like that helping incentivize them to invest your teaching
them and you're actually getting the dollars into the roth
early on? Is that the key you hit it you.

Speaker 3 (42:03):
Preach into the choir. My daughter's in her mid thirties now,
my older daughter, and when she was fifteen, so it's
almost twenty years ago, she got her first summer job
at working at the library. She made three hundred and
fifty dollars for the summer. I immediately opened the wroth
for her, and I put in what I could put
in the three fifty because that was a limit up

(42:23):
to your earnings. And I was trying to explain to
her what I did, and she says, wait a minute,
So this is a good deal, she said, So I
make three fifty, I spend that money and you put
it back in and it grows tax free forever. And
I said, yes, while you're under.

Speaker 1 (42:39):
This roof, pretty soon you're gonna have to do this
for yourself for.

Speaker 3 (42:43):
The exact reasons you just said. To get them started,
to get the vehicle set up, it's more likely they'll
continue it, which she did. Now she has unbelievable amounts
in her raw through her job, a Roth rowing k
at work and all that stuff because she continued process
by me setting up the vehicle and you know, starting

(43:04):
the board for her.

Speaker 2 (43:05):
What's great about that too that I love is that
it mirrors, it mimics the behavior of employers with four
one k is with the match right. It's not like
it's just a free hand on money, Like you can't
stick that money in there unless they actually earn it. Instead,
they have to earn it, right, Yeah, there's something there
that where they just mirrors real life, which I love.

Speaker 3 (43:23):
But you tied it into the five twenty nine. The
roth Ira is a much more flexible vehicle. You can
use it for anything. Remember the actual Most people don't
understand this because they know about the five years and
fifty nine and a half till it's tax free. But
your actual Wroth conversion Roth contributions, your original Wroth contributions,

(43:46):
the seven thousand hour or whatever it is, annually. Your
actual WROTH contributions can be withdraw drawn any time for
any reason, tax and penalty free. So it could double
as an education vehicle. It could double for anything. Let's
say you don't go to school, but you want to
start a business. It can work for anything. It's meant

(44:07):
for retirement, but it's way more flexible with almost no
rules than a five twenty nine.

Speaker 1 (44:13):
Great for early retirement too, because when you there's a
lot of people listening to this podcast and they're keen
to retire, like let's say or mid late forties or
something like that, and it's like, well, cool, you can
live off those contributions for a while while the rest
of your wrath continues to grow. Bridge that gap. Feel
a little bit there, exactly?

Speaker 2 (44:28):
Yeah, so Ed, Yeah, we're harping on the roth ira
how that's essentially the most it's just the most tax
efficient way to go ahead and pay those taxes. And
we're kind of talking about kids now as well. What
is I don't know, might be opening out can of
worms here, but what is the most tax efficient way
to pass wealth along to kids for them to realize
some of the wealth that you've been able to create

(44:49):
within your own lifetime.

Speaker 3 (44:50):
I can tell you the worst way. What's that using
an IRA, that's the worst way. What Congress did We
were talking about Secure two point zero, but what and
that was not the big game changer. It created a
lot of bits and good things that we talked about,
but nothing earth shattering or game changing. It was the
original Secure Act that changed the playing field. We used

(45:11):
to recommend the iras, or it used to be called
the stretch IRA used to be able to have the
stretch IRA, the kids could go out and defer and
extend distributions over that lifetime twenty thirty, fifty seventy years
if you were a ten year old. Congress didn't like
that another revenue grabbed. They needed money, and they said,
we believe iras should be for the people who earned it,

(45:33):
the retirees and their spouses, and not as a wealth
transfer or state planning vehicle for the kids who never
earned it. So we're going to kill that stretch IRA deal,
which they did, and replace it with generally a ten
year rule, which means all the income has to come
out by the end of the tenth year after death.
That's a tax disaster waiting to happen. So what they

(45:54):
did is they actually made iras the worst possible asset
to use to transfer for wealth or for estate planning purposes.
But indirectly, they made other vehicles much better, much more attractive,
like roth iras we talked about. In other words, they
downgraded iras, but upgraded tax free vehicles like that I

(46:16):
mentioned in my book, like roth iras and life insurance. Now,
I don't sell life insurance. I'm a tax advisor. I
don't sell stocks, bonds, funds, insurance, annuities, none of that stuff.
But as a tax advisor, and I have a whole
chapter in my book on this on the called the
Power of Life insurance, and I'm talking about permanent cash
value similar to an ir On a roth ira conversion,

(46:40):
you take money out, the whole premise is the same,
use the lower brackets, fill up those lower brackets, and
you can put money in the row through conversion or
build up in a life insurance policy that can grow
cash value that you could actually tap into if you
wanted during your lifetime. But it's growing income tax free.
You don't have to deal with any of these rules.

(47:02):
There's a lot more certainty that the insurance tax benefit
the tax exemption for life insurance. The income tax exemption
is the single biggest benefit in the tax code and
not used nearly enough. Plus, you can leave your children
a boatload of money, a lot more than you can
win an IRA or roth ira, and it's all income
tax free.

Speaker 2 (47:22):
Is this something that at a certain limits, like let's
say there's a certain dollar amount, at which point that
that begins to make a bit more sense, or.

Speaker 1 (47:30):
For low income owners, that doesn't make a whole lot
of sense.

Speaker 3 (47:32):
Right, Well, you do what you can, like everything. You
don't go broke doing anything. This is still about you.
You don't go broke providing for your kids. They're gonna
get plenty anyway, So forget about that. That's the biggest
mistake people make worrying about their kids. They don't even
care about them that much anyway. When I tell people
to do planning, well, what's in it for me? They say,
that's how you should be thinking. What's in it for you?

(47:53):
They're gonna get plenty anyways.

Speaker 1 (47:55):
You're love, not money.

Speaker 3 (47:56):
Yeah, they're gonna get it anyway. Why drive yourself crazy? Well,
I can't eat this week because I want my kids
to have a million dollars of life insurance.

Speaker 1 (48:03):
Yep, I love it all right, Ed dude, thank you
so much for joining us today on the podcast. We
really appreciate it. Where can our listeners find out more
about your new book, The Retirement Savings Time Bomb Takes
Louder Well.

Speaker 3 (48:15):
You can go to Amazon or type my name Ed
Slot into Google, or go to our website www dot
I r A help I ra h e l p
IRA help dot com, where there's lots of free resources.
We put out several blogs on current events, current tax changes,
current ideas, current planning. I think we do three or

(48:36):
four of them every week. We answer questions there for free.
You'll see it part so much in the way of
free resources. And by the way, these are things you
can The answers you'll get, the information you get are
from our company, which is what we do. We were
experts in this area, so you can get the right
answer the first time.

Speaker 1 (48:55):
I love it. That's a lot.

Speaker 4 (48:57):
Thank you so much for joining us today.

Speaker 3 (48:58):
Thank you for having me on so talking about this
great opportunity to build wealth and keep.

Speaker 1 (49:03):
It all Right, Matt, you gotta love that Ed Slot energy.
Whatever he had for breakfast, I want to start eating
even fired up. Maybe it's the pizza. They do say
it's the water in New York specifically that makes it
so good. But yeah, I guess so it's also what
flows and a slots things. Oh all, gosh, what aspect
of our conversation today stood out to you? Man? So

(49:23):
I think my big takeaway is certainty is better than uncertainty,
and I love the certainty that comes with you know,
he basically said tax rates are on sale, and if
that's the case.

Speaker 2 (49:33):
I liked how he positioned that, which is again, immediately
while my mind went to mortgage rates because it's just like,
that's something in the recent number of years that we've
been able to experience firsthand, the fact that rates have
been so low. You start getting used to the idea
that rates are that low, and then things change and
you quickly realize, oh wow, no, that was a special
period of time that you're living.

Speaker 1 (49:50):
Through, and when you're going to pay the taxman no
matter what at some point, why not do it on sale?
And why not have the certainty that comes alongside of
having that done away with this guillotine hanging over your head.
If you have like massive amounts of money in traditional
funds for on K's and I rays if that's the
case for you. We talked about smart ways to make
commersions to get that money into Roth vehicles. But for

(50:11):
a lot of our listeners, not especially younger listeners, Roth
Roth from the beginning. And then you don't have the
uncertainty hanging over your head. You're not worried about what's
going to happen in the future with tax rates because
you kind of already solved that problem.

Speaker 4 (50:22):
Yeah, totally.

Speaker 2 (50:22):
One of the things he said, and this will be
my big takeaway, was that he said that it is
not if, but when it is that you have to
pay taxes on that money, and so you can go
ahead and take that tax break. Now what feels like
a tax break, but no, at some point you are
going to end up owning that money. And I don't
know for I feel like recently, Joel, you and I
we've been more like, oh, yeah, it makes sense to

(50:43):
tax diversify. And I do think that there are individuals,
especially if you are in some very high earning years
and you know, man, there's a good chance I may
not make this this much in the future years or if.

Speaker 1 (50:53):
You like, we've got them all fooled. Right now and
at some point my pay is going.

Speaker 3 (50:56):
To go down.

Speaker 2 (50:57):
Yes, Well, if you know that, you are going to
enter into a coast fire period of life where you
truly are gonna earn less. And that's one of the
things he pointed out is that you have control over that.
You don't have control over the market, So don't worry
about timing the market and trying to pay less and
making that conversion when the market's down. That's not something
you have control over. But you do have a little
bit more control over how much it is that you're
making every year.

Speaker 1 (51:17):
Yeah, And he talked too, really really wisely about how
so many people he works with that's their assumption, like, hey,
I'm gonna I'm gonna make less in retirement, Like I'm
gonna pay less then, so I'm gonna stick with the
traditional route, and that there's so many people who find
themselves not in that position. And it's funny, I didn't
really think about this, but it's true because you're losing
out on certain deductions or a fewer tax benefits at

(51:37):
that point in time, and so that those are the
kind of things that maybe aren't balancing out the other
side of your tax ledger, meaning just another check mark
in favor of roths.

Speaker 2 (51:46):
Yeah, but I will say I do think that the
majority of his clients and the folks that he used
to work with, at least it sounds like he doesn't
take on personal clients anymore. We're folks that are hard
charging like him, or they're gonna continue to earn and
earn and earn.

Speaker 4 (51:58):
Their net worth is gonna.

Speaker 2 (52:00):
Continue to grow at a rapid clip versus and I
don't know, maybe I'm kind of picturing myself in this category,
just like a just a meek, humble but just like
somebody who may not necessarily continue to be hard charging
for the next twenty years as opposed to hitting that
coast fire attitude, which in my mind has as much
to do with spending some money as it does with

(52:22):
working a little bit less, because like when you have
the ability to have more freedom over your time, I
think that's something that more and more folks, especially our listeners,
are wise en up to where they're realizing I don't
have to necessarily have this nose to the grindstone, which
I will say is work that I love, right, But
at the same time, there are other paths out there.
And I think more folks are starting to realize some

(52:43):
of those other paths. I think that's the difference between
some of the financial independence folks versus folks of an
older generation who aren't used to sort of that mindset.

Speaker 1 (52:52):
I would listen to this episode right next to listening
going back and listening to our episode with Sean mulaney
because they have very different takes, but they're both really
really smart guys. Yeah, and you might find and I
think you and I fall somewhere in the middle of
their camp. You know, where Sean is less all about
the roth. He's more about take the tax break. Now
Ed is saying pay the taxman and take the taxes

(53:13):
on sale. And I think there's a happy medium to
be struck here between the two. But maybe listen to
both and then kind of choose your own adventure and
make it up. And again, so much too comes down
to your specific personal financial situation, your income right now,
where you are in your earning years, but especially for
younger folks. I mean, when I look back, I didn't
have access to a wroth for a one K when

(53:34):
I was in my early working yearsmount. I didn't have
one at all until like literally my last year of work,
and it was it's such a bummer because I would
have been socking money away all those years, and that
you've been able to sock a decade's worth of contributions,
that's yeah, zero tax. So if most of our listeners
in their twenties early thirties, I mean, the wroth is money,
but further on down the road, you got to make
that decision for yourself, and it's I don't know. Ed

(53:57):
makes a compelling case, and I appreciate his enthusiasm and
his information because there's a lot to be learned right there. Absolutely, yeah,
we would highly recommend his book, The Retirement Savings. Time
Bomb ticks louder because he goes seriously in depth and
there's just, honestly, there's just so much in there that
we we couldn't cover. It would have been crazy long,
like a five hour long episode, but also would have

(54:18):
gotten like so nitty ready people would have been like,
I'm turning out. Well, it just depends on your again,
like you said, your specific situation, but uh, okay. Our
beer that you and I enjoyed during this episode was
be Low. This is a beer by Halfway Crooks. It's
a table beer with age tops.

Speaker 4 (54:33):
What'd you think?

Speaker 1 (54:33):
I liked it. It's super minerally, it's got like some
hot presence, but it's not because age Tops. I guess
it doesn't have that like hot bite necessarily, but like
there's there's some hot essence going on in this beer.
So I really enjoyed it. It's it's a perfect beer
to have with dinner, I think right, because he's the
table beer. It's not an overpowering exactly flavor profile, which

(54:56):
is which is like, I don't know, the older I get,
the more craft beers I've had. I was talking to
with someone about this the other day. I've had all
the IPAs now, sorry, it doesn't matter how good your
IPA is. I probably had something similar, which is just fortunate.
We've had great beers over the years. But this is
the kind of beer I'm getting more and more into
something a little chill, a little more relaxed, and then
you can kind of have with your food because you

(55:17):
don't want some sort of triple IPA with most of
the dinners that you're eating or anything like this. This
is a nice balanced beer. Yeah.

Speaker 2 (55:23):
Plus the if you haven't checked out the Schwag Halfway
Crooks merchandise. They've got the absolute best in the game.

Speaker 1 (55:30):
I'm literally wearing a shirt right now.

Speaker 2 (55:32):
You are literally wearing others, but this can. I love
the pink with the yellow, like the neon and the green.
It makes you think of like some of the different kits,
some of the different jerseys that the guys wear, like
on the Twitter France or whatever. Yeah, it's got European
biking colors all the way for sure.

Speaker 4 (55:48):
I can't get enough.

Speaker 2 (55:48):
I would totally I would totally get this. If they
converted this cannar into a shirt, I would totally wear
this on pink. They might check out Halfway Crooks beer
if you haven't one of our favorites here in Atlanta.
And by the way, Velo it means bike, so that's
another reason to love it as well, and also why
it's conjures up some of those biking themes.

Speaker 1 (56:04):
If you haven't listened for long, we like bike, that's right,
But uh.

Speaker 4 (56:07):
That's gonna be it for this episode.

Speaker 2 (56:09):
We'll have shout outs up and on the website at
howdomoney dot com. And yeah, we'll link to our last
conversation with Sean mulaney as well. If you are nerding
out on the taxes, but that's gonna be it, buddy,
until next time. Best friends out, Best friends out,

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Matthew Altmix

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Minimizing the Retirement Tax Time Bomb w/ Ed Slott #863