Episode Transcript
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Speaker 1 (00:05):
Good afternoon everyone. This is Retirement Ready. I'm your host,
David Kopek. We're here every week so hopefully inform you
on these changes that are happening to pre and post
retirement planning. I'm going to talk about a topic today,
because this is a topic specific program Retirement Ready, that
(00:28):
we're going to be talking about one of the largest
transfer of wealth in the history of mankind. And the
reason why we're talking about it is because at the
Retirement Planning group, we're starting to see it, folks. We're
starting to see this wealth transfer take place. And what
I want to talk about today is are you prepared
(00:53):
so retirement planning and the age of twenty and twenty five,
We've got eighty five trillion dollars worth of wealth that
will be transferred over the next two to three decades.
We will witness, our children will witness one of the
largest generational wealth transfer in the history of mankind. It's
(01:17):
estimated somewhere between eighty five to ninety trillion dollars trillion
with the t is expected to transfer from the Baby
Boon generation to Gen X, the millennials just here in
the United States alone, just here. So this unprecedented financial
(01:40):
shift is reshaping how individuals approach retirement planning, inheritance, tax strategies,
and of course financial legacy. And as we're all quite
well where I don't think the numbers bear it out,
but I think it's happening. People are living longer, healthier
(02:02):
lives and become much more financially connected, meaning that they're
preparing for this massive wealth transition and they're trying to
figure out what is the best way in order for
me to pass these assets on, and who and where
(02:24):
will this money go, Who's going to inherit it. So
when we talk about retirement planning today, for those people
that have been fortunate that have basically hit the mother load,
effective retirement planning now means more than just ensuring you
don't outlive your assets. It also means positioning your wealth
(02:46):
in a way that aligns with your values, minimizing tax liabilities,
and ensuring that you're going to have a smooth succession
to the next generation. Critical. So for the people that
are out hanging in the yard, driving your tractor, sitting
(03:06):
on the beach, whatever it may be, you're tuned into WUI,
I'm going to focus in on the people that were
born between nineteen forty six and nineteen sixty four, the Boomers,
you collectively hold more than half. You collectively hold more
(03:26):
than half of all the US household wealth here in
the United States staggered. Much of this is tied up
in real estate, investment portfolios, your family businesses, retirement accounts,
which I'm going to really focus in in the second
(03:48):
half hour of today's show. And as this generation enters
advance retirement years and begins to pass away, these assets
will gradually transfer to our children and our grandchildren. Cerrillion
ass excuse me, Cerrillian Associates indicate that this eighty five
(04:15):
trillion dollars will transfer through inheritance and estate planning by
the end of two thousand and forty five. Now about
seventy three children trillion is going to our errors directly,
hopefully with a step up and basis. And then of
course almost twelve twelve trillion dollars is estimated to go
to charities. So for retirees with significant assets, the state
(04:43):
planning is a very extremely important part of your retirement strategy.
We talk about this all the time at the retirement
planning group. It's not so much ROI return on investment
at the stage of your life. It's basically put the
pieces of the puzzle together and having a comprehensive estate
(05:04):
plan that includes your wills, your trust, power of attorney,
your healthcare directives, and ensuring that your assets are distributed
as intended and there's no legal hurt hurdles at the
end of the rainbow for your children and loved ones.
(05:25):
Trust in particular offer a lot of advantages and control
how people and errors will receive assets. Revocable living trusts
allow flexibility during your life, while irrevocal, irrevocable trusts can
reduce the state taxes and it can also basically you
(05:49):
can monitor these assets, manage these assets. Sounds morbid from
the grave. You have children, you have grandchildren, you have
evil laws and daughter laws. You've got creditors and predators.
Who knows what's going to happen in the future in
regards to lawsuits. So trust can really be beneficial for
(06:11):
individuals that are worried about per sturpees and the money
following the family. High net worth individuals should also consider
utilizing these strategies during their lifetime. During their lifetime to
reduce their taxable estate. So as we sit here today
(06:32):
in twenty twenty five, the lifetime estate and Gift tech
exemption is currently at thirteen zero point sixty one million
per individual. A lot of people are leveraging this window
to gift assets to heirs because of the possibility that
legislation legislation will drop and you'll have additional tax exposure.
(07:00):
I wish everybody at the Retirement Planning Group had that
type of wealth, but we do have clients that have
that type of wealth, and I can say right now
we are aggressively working with the attorneys to basically set
up their legacy and basically fill these trusts with the
type of assets that we want to go into it.
(07:21):
So you need to work with financial advisors to employ it.
I guess what we call a tax efficient strategy. There's
a lot of assets. We talk about assets that you
want to use in your lifetime in the monies that
you want to basically gift or transfer at death. The
(07:43):
most complicated money that we see at the Retirement Planning
Group is pre tax money IRAS four one k's four
O three b's New York stint deferred compensation managing required
(08:04):
minimum distributions in your lifetime from these accounts can reduce
taxable income, and there are different strategies out there in
order to preserve capital and make it more tax sufficient
for your loved ones when they receive these assets. Bottom
(08:28):
line gets down to is that we live in a
society today where there's a lot of money out there
and there's a lot of different strategies. Our job at
the Retirement Planning Group is to be listeners, using our
ears and understanding exactly what you're trying to accomplish in
your lifetime. So it's important for you to have conversations
(08:53):
not only with your spouse, your loved ones, your significant other,
your children, but inherited iras require a different type of
planning simply because the rules have changed and there is
no longer what they call the stretch IRA, which we're
going to get into much greater detail after we take
(09:14):
our first break. So bottom line gets down to, if
you're sitting on seven figure eight figure qualified assets four
O one k's iras, then we want to have a
chat with you when we come back as far as
(09:34):
some of the overlook things that you might be missing,
why you want to basically use those assets in your
lifetime or start gifting some of those assets in order
to facilitate and better transfer of your wealth at death.
I'm Dave Kopek. We'll be back right after this message.
(09:54):
Are you ready for retirement or just hoping it works out?
Don't leave your future to chance. Retirement Planning Group we
hope you create a personalized retirement plan so you can
relax knowing you are prepared. Take action today. Called eight
eight eight five eight zero one nine one nine. That's
eight eight eight five eight zero one nine one nine,
or visit us at our website rpgretire dot com to
(10:17):
schedule your complementary consultation. Your future will say thank you.
You've spent a lifetime saving for retirement. Now it's time
to make that money work for you. Here's the secret
most people miss. You have to create your own retirement
income plan. Social security is not enough, pensions are rare.
You need a strategy that turns savings into monthly income
(10:38):
that will last a lifetime. At the Retirement Planning Group,
we build customized income distribution plans so you can retire
with confidence, retire smart, live well. Call eight eight eight
five eight zero nine one nine for your complementary consultation.
We are living through the greatest wealth transfer in the
history of mankind. Trillions of dollars of wealth will change
(10:58):
hands from one generation to the next. Your money to
our beloved children and grandchildren. Are you ready? Your future
is written by chance, it's written by action. Now's the
time to build your plan, protect your assets, and position
yourself for the opportunity. Don't wait, take action. The future
favors those that are prepared. Call eighty eight five eight
(11:19):
zero one nine one nine. That's eighty eight five eight
zero one nine one nine. Retirement is in a Sunday thing.
It's a now thing. Whether you're just starting out or
nearing the finish line. The best time to build your
retirement plan is today. Don't wait for the right moment.
Let's create a plan that works for you. Secure your
(11:39):
future and the freedom that comes with it. Call my
office today and take action. Eighty eight five eat zero
one nine one nine. That's eighty eight five eid zero
one nine one nine, and your future will thank you.
(12:01):
All right, Happy weekend, beautiful Saturday, and Upstate New York.
Depending on where you're listening, I know that the show
is broadcast throughout the United States, actually globally, so wherever
you're listening. Hopefully you're having a wonderful weekend. Today's a
big day in Upstate New York at Saratoga. The travers
should be a great race. It can be great weather,
(12:21):
so it's probably gonna be a fast track. So whoever's
out there that's going to the races, good luck, Be
careful and enjoy your day. We had a horrible bus
crash at Upstate New York yesterday. God rest their souls
for the people that died in that bus crash. But
(12:42):
you know, just be careful, folks, be careful. You know,
I'm a big believer working with a financial team and
retirees I always say are better off when they have
a financial team to employ more tax efficient strategy as
far as managing your assets during your retirement years. So
(13:06):
for some of us, receiving a significant inheritance can be
a blessing. It can be a challenge a lot of times.
Without proper guidance, understanding, education, your loved ones may squander
what took decades for you to build. So planning is
(13:26):
crucial for recipients to make the most of their inherited wealth.
We over emphasize this. Have the conversations understand exactly what
your children are looking for as far as the type
of assets they would like to receive at death. They
(13:48):
need to understand what they're inheriting, whether it's real estate,
your investment portfolio, your retirement accounts, or your business. As
you're quite well aware, retirement assets have different tax implications.
As I said, in the second half of this program,
(14:11):
we're going to focus in on qualified assets iras four
oh one k's, four O three b's steps KYOS, New
York State Deferred Compensation TSP with the government. These assets
are dictated as far as the amount of money that
(14:33):
has to be paid out over a ten year period
of time. There's no step up in basis as you
have with real estate, and the government has a plan
for you, and it's a plan that's basically you're going
to empty the pot within ten years if you're a
non spouse beneficiary. The other thing is is that because
(14:54):
of this wealth transfer, some of our clients are staggered
when we run the numbers as far as what their
net worth is. And as you're quite well aware, sometimes
a sudden influx of wealth cannot only impact your retirement timeliness,
(15:16):
but also the investment strategy and lifestyle that your children,
maybe your grandchildren would like to have. So instead of
relying solely on inheritance, a lot of the younger generations,
in my opinion, should continue to build their own retirement plans,
(15:36):
maximizing their fore own caves, growth I rays, and other
vehicles to maintain their own financial independence. Why is that, Dave,
Because people are living a hell a lot longer than
what they expected to live in today's times. Union. I
don't know if you saw it or not. There's a
woman that's one of the oldest individuals in the United
(15:58):
States and she just celeb her one hundred and eleventh birthday.
Is that common? No, But if you listen to the experts,
and you listen about AI and our healthcare industry, she
might be the norm in the years to come. So
one of the most overlooked elements of retirement inherentess planning,
(16:21):
in my opinion, is open family communication. And a lot
of times, maybe it's because of my generation, A lot
of us basically what we had we earned. We started
with nothing and we built a pretty nice nest each
But many families avoid these conversations about money death. No
(16:46):
Whodell wants to think about death legacy and what it does.
It leads into confusion, disputes, misaligned expectations, Families break up,
loved ones don't talk to one another, and then the
person that passes away what their intentions were meant to
be don't come to maturity. So I'm gonna hold this
(17:12):
loud and clear and hopefully you hear this. You should
have intentional discussions with your family clarifying exactly your plans
for your estate and sharing those values behind closed doors
with your children and loved ones about these financial decisions
(17:34):
that you've made. Just don't leave this large golden goose
on a table and just say now, go ahead and
fight over. You know, some of the greatest conversations that
I've had over the forty three years that I've been
in business is when you sit down and you do
(17:56):
legacy planning about transferring this wealth. Then you start getting
into the stories, the lessons that they've learned, what their
goals were. You can basically start your own individual family
mission statement on how you want this wealth to be
paid out once you pass away. Legacy wealth planning after
(18:24):
you pass wills are no longer I think a valid
choice for this type of wealth. You need trust. But
the bottom line gets down to is that the more
dialogue you can have with your family and loved ones,
the better they'll understand what your intentions are. Now there's
moving parts. It's a changing landscape, tax laws, the volatility
(18:55):
of the stock market and the bond market very complex.
Sometimes family dynamics, alcoholism, drug addiction, a child or a
loved one that might have autism, a child or a
loved one that might have special needs. That's why it's critical.
(19:17):
Working with a team of professionals is probably more important
than ever because of this wealth transfer. You know, I
applaud the Puro Law firm, and of course they're on
before me, and they're on after me. I do a
show early on Saturday morning, I do this one on
Saturday afternoon. But we have a very coordinated approach with them.
(19:42):
We have a lot of dialogue with Loupiro and his
team as far as how they want to basically titlely
get at the assets for the estate plan, working with
the financial advisor, working with the tax professional, and sometimes
family counselors. Sometimes you've got to have counselors in there
(20:06):
to basically protect and make sure that things happen that
the parents are their loved ones. You know, there's a
lot of people out there. There's a lot of wealth
right now that is being controlled by women. The spouse,
the dad passed away, now the mom is managing these assets.
(20:27):
The kids are concerned. They want to make sure that
the wealth is preserved, protected, and dad's intentions are passed
on exactly the way he wanted to be when he
sat down with mom. So understand that. Advisors on our
side of the defense, because it's changed so dramatically over
(20:49):
the years, we can help you navigate these changing estate
tax laws. They've changed dramatically in the forty three years
that I've been in the business. We can help you
work with the attorneys to create trust in the legal
documents that you need. For a lot of you, it
(21:10):
will make sense to plan charitable giving strategies, especially with
qualified assets iras. If you have a significant amount of money.
Pretext educate your children and your grandchildren on how to
(21:30):
basically manage assets, financial management and for some of you,
for some of you, you might want to set up
portfolios for longevity and legacy. The starving artist's child, the
child that hasn't done so well, the child that maybe
(21:50):
went through a divorce that needs some assistance, maybe a
little bit more, that needs a pension benefit set up
for them because they weren't as successful, that had such
great success in their working career. So the younger generation,
the advisors can help integrate an inheritance into more of
(22:14):
a holistic financial plan, optimizing the tax strategies that are
available to you, and plan for their own retirement and
legacy your children. Eighty five trillion dollars of wealth eighty
(22:35):
five trillion dollars will now pass on over the next
few years, twenty to thirty years to our loved ones.
The question becomes, do you have a plan? I'm going
to say probably seven out of ten people that come
into the retirement planning group that request me to be
(22:59):
in that meeting, I'll sit down with them. I'll go
through the initial booklet that we have you fill out,
and we discuss where you're at, and then we start
opening it up for questions. What questions do they have?
And then we use our ears and out our mouth,
and then we start asking questions. But the common thing
(23:22):
that I hear over and over and over again is
they'll say, this very simple question, am I okay? Do
I need to do anything? Do I need to do anything?
I feel like I'm unprepared. And it's pretty simple, folks,
(23:46):
it's pretty simple. The only thing they really need, because
they've been so busy, working hard, raising families, trying to
spend some time, is they need a plan. That's all
you need. Sit down financial, find out financial wealth management
team that you feel comfortable with. We're here in the
(24:09):
Capitol District region. We're opening up our sixth location in
Hudson pretty soon. But the bottom line gets down to
is that after forty three years of being in this business,
I know one thing for sure that we can help.
We can make a difference with your overall net benefit
for your family. So bottom line gets down to is
(24:33):
that we're going to talk a little bit more about
this when we come back. I'm Dave Kopek. This is
Retirement Ready and we'll see after the news. All right,
we are back. I'm Dave Kopek, the president of the
Retirement Planning Group. This is a topic specific show. We
(24:58):
focus in on one particular topic for the hour today
is this wealth transfer. The eighty five trillion dollar wealth
transfer and some of the things that we're starting to
see already because some of my generation, of course, is
starting to pass. One of the things that I got
(25:20):
to do a little housekeeping here before I get back
into this wealth transfer. Every year, if you've been a
radio listener, I've been in radio. Now. This is my
twenty fifth year, we do a golf outing. It's called
Swing for a Cure. You know, We've had a lot
of individuals in our family that have passed away from cancer.
So every year we do a golf outing, and this
(25:41):
year I'm proud to say that not only is it
going to benefit the American Cancer Society, but also an
organization that's very dear to my heart, Tunnel to Towers.
So it's going to be September twenty fifth at the
golf court here fair Ways of Half Moon and Half Moon,
(26:03):
New York, and it's an all day event. We have
a golf outing, we have a beautiful dinner, there's prizes,
there's gifts, there's raffles, there's all sorts of stuff that
we can do, and all the money, one hundred percent
of the money that is raised, we'll go to the
American Cancer Society and Tunnel to Towers. We had an
(26:26):
unbelievable response last year. If you would like to attend,
we would love to have you come, whether you're a
client or not. If you'd like to come for the
Swing for the Cure September twenty fifth, we would love
to see you there. All you have to do is
call my office at eight eight eight five eight zero
one nine nine eight eight eight five eight zero one
(26:47):
nine one nine and we'll book you a spot. You know,
there's a brochure that Jim Corporan has put together that
highlights if you want to come as a foursome, we
would love to have you. But the bottom line it
goes for two I think phenomenal organizations, the American Cancer
(27:08):
Society and of course Tunnel to Towers. So this is
our first to go around with Tunnel to Towers. We
had to go through an approval process, which we did
and got cleared, so we'll have some of the individuals
from Tunnel to Towers there and I couldn't be prouder.
It's near and dear to my heart and hopefully you
can attend and it will give you an opportunity to
(27:31):
meet some of the staff, our clients, our loved ones,
our friends from the retirement planning group. It's just a
great day, folks. It's a great day. You know. There's
trillions of dollars in qualified plans out there, folks, iras
four oh one k's New York State deferred compensation, and
(27:54):
it's probably the greatest Achilles heel. It's the most problematic
money that individuals have, not only in their lifetime, but
also it's the most problematic money when you want to
pass it on to the next generation. So we're going
to talk a little bit about why I think you
need to be proactive with these assets. The government has
(28:20):
a plan for you for required minimum distributions. So if
you were born before nineteen fifty one, your required minimum
distribution was seventy and a half. If you were born
between nineteen fifty one and fifty nine, your required minium
(28:42):
distribution is age seventy three, and if you were born
after age nineteen sixty, your required minimum distribution is age
seventy five. So what they do is you have a
uniform lifetimetable. Whether you want the money or not, the
government forces you to liquidate it, and as you age,
(29:03):
the distribution get larger. When you pass on the money,
there's no step up in basis and what you're doing
is that you're sending a tax liability to your loved ones.
You're not sending a legacy. So that's when you have
to take it. So you must start taking it at
the latest. If you turned seventy three this year of
(29:28):
twenty twenty five, you have until April first of the
following year, and it's the only year you can delay it.
But that means next year, instead of taking one distribution,
you would have to take two. So we're never a
big fan of doing that unless you're going to be
in a lower tax liability. So once you've taken your
(29:52):
first r and D, subsequent r and ds are due
by December thirty first of each year. At FIDEL, we
get a report, you get a statement. You'll know exactly
what is mandated for you to take out. Lisa and
Jared in my office get on the telephone. They call
our clients and they say, hey, you've more than satisfied
(30:13):
your rm D or you're not taken enough and now
you're going to have to take more out. So we
do get proactive in regards to rm ds. If you
have wroth iras, you are not not required to take
r and ds from a roth IRA account while you
(30:35):
are alive. If your spouse receives your roth IRA if
you haven't spent it down, okay, she's not required or
he is not required to take the roth distributions rm ds.
Non spouse beneficiaries with roths are mandated to take rmds
(30:57):
required minim distributions. So well, if you are in a
situation where you have a large amount of money and wroth,
God bless you. You did good. It's probably one of
the greatest investments that Washington has afforded us. So now
four oh one k. You can delay your rm ds
(31:20):
until the year that you retire unless you are a
five percent owner of the business sponsoring the plan. Okay,
you can delay your rm ds until the year you
retire unless you are a five percent owner of the
business sponsoring the plan. Critical that you understand that. Okay.
(31:44):
So R and D's government has a plan. What's your plan?
Now here's my position. I'm going to give you all
the bullet points. So why you don't want to leave
your irase to your errors several, but I'm gonna because
of time limitations on the radio, I'm gonna go through
(32:05):
the ones that I think are probably the ones that
are gonna give you the most bang for your buck
more than the one that's going to Basically, you're gonna
understand it. Okay, there's a lot of reasons, but the
first and the foremost is the tax burdens. Right when
(32:26):
your children are receiving a large IRA, someone has to
pay the tax ird income and respect to a deceit.
The Secure Act of twenty nineteen limits the withdrawal period
for most what we call non spouse beneficiaries to ten years.
(32:48):
So you have a large IRA, you leave it to
your wife, wife leaves it to you, whoever dies first,
then it goes typically to the children you continue beneficiaries,
they have ten years. Typically what happens it's in their
go go years when they're making the most money and
now they have these large tax consequences, not because they
(33:11):
want them, but because the government is now forcing you
to liquidate those accounts. So the ten year rule, most
non spouse beneficiaries have to have the bucket empty with
the inherited IRA within ten years of your death. As
that I said, this can call large taxable distributions to
(33:35):
fall upon you in your crime working years and potentially
push you into a much higher tax bracket. No stretch.
Remember you're here. We used to hear it for years. Stretch,
streatch stretch, stretch your IRA out for decades. You know,
(33:56):
two hundred thousand dollars is going to be millions of
dollars over the next twenty thirty years. It's gone. They've
removed that method of basically minimizing the tax liability and
stretching out for decades, so there's no more stretch. Stretch
is gone. Ordinary income tax and every dollar that's withdrawn
(34:18):
out of the traditional IRA is tax as ordinary income.
There's no capital gains, there's no tax preference, so every
dollar that comes out, you're going to have to pay
tax on it. Now, this is what I'm seeing because
we're living a lot longer. I got two retired school teachers.
Her sister passed away. She had no children, She had
(34:43):
her sister, and she left a significant amount of money
in IRA to her and now her sister. Because there
was no contingent beneficiaries, it was just her sister as
the primary so she could not disclaim some of that
money because there was only one beneficiaru on the account.
(35:03):
Now her and her husband are pulling their hair out
of their head because the additional income from the inherited
IRA distributions is increasing their adjusted gross income enough to
trigger an increase in their Medicare Part B in D
premium surtex. So you need to understand this landscape. I'm
(35:33):
seeing more of that now simply because of what's happening.
The maturity of the boomer generation. No creditor protection, unlike
the IRA owner who has bankruptcy protection from their retirement
counts most non spouse beneficiaries. A lot of people have
(35:56):
know this. Do not. IRA is inherited, it is generally
no longer protected from a beneficiary's creditors, lawsuits, or bankruptcy.
You need to seek competent legal advice about this. I've
seen it. It's not a it's not a pretty situation.
(36:16):
The other thing is is that you want to make
sure that you understand exactly what you have planned as
far as your beneficiary forms. Probably the most critical component
of your IRA document is the beneficiary form. Primary contingent
(36:39):
primaries typically the spouse contingents are typically the children. How
do you how often do you update it? How often
do you look at it? How often? What happens if
the child passes away? Before the parent passes away needs
to be looked at. It can't overemphasize that enough. We're
(37:00):
going to talk more about that. Will we come back.
I got to take a hard break. I'm Dave Kopek,
President of the Retirement Planning Group. If you want to
call our office and get an apployment. Are you ready
for retirement or just hoping it works out? Don't leave
your future to chance. At the Retirement Planning Group, we
(37:22):
hope you create a personalized retirement plan so you can
relax knowing you are prepared. Take action today called eight
eight eight five eight zero one nine nine. That's eight
eight eight five eight zero one nine one nine, or
visit us at our website rpgretire dot com to schedule
your complementary consultation. Your future will say thank you. You've
(37:44):
spent a lifetime saving for retirement. Now it's time to
make that money work for you. Here's the secret most
people miss. You have to create your own retirement income plan.
Social security is not enough, pensions are rare. You need
a strategy that turns savings into monthly income that will
last a life time. At the Retirement Planning Group, we
build customized income distribution plans so you can retire with confidence,
(38:06):
retire smart, live well. Call eight eight eight five eight
zero one nine one nine for your complementary consultation. We
are living through the greatest wealth transfer in the history
of mankind. Trillions of dollars of wealth will change hands
from one generation to the next, your money to our
beloved children and grandchildren. Are you ready? Your future is
written by chance, it's written by action. Now's the time
(38:29):
to build your plan, protect your assets, and position yourself
for the opportunity. Don't wait, take action. If future favors
those that are prepared. Call eighty eight five eight zero
one nine one nine. That's eight eight eight five eight
zero one nine one nine. Retirement is in a Sunday thing.
It's a now thing. Whether you're just starting out or
(38:49):
nearing the finish line. The best time to build your
retirement plan is today. Don't wait for the right moment.
Let's create a plan that works for you. Secure your
future and the freedom that comes with it. Call my
office today and take action. Eighty eight eight five EID
zero one nine nine. That's eighty eight five EID zero
one nine nine, and your future will thank you. Portions
(39:13):
of the following program will be recorded. All right, we
are back. Happy Saturday and absolutely spectacular day in upstate
New York. If you're going to the track, have a
(39:36):
great day, good luck, hope you come back. A winter
should be a beautiful day. I know my son's going
up with some friends and his beautiful girlfriend. So if
you're listening, Christopher William, have fun and enjoy yourself. I'm
not too sure if the rest of the gang is
up there, but I know you have fun. We're talking
about qualified assets with this wealth transfer. I raise, in
(39:57):
particular a lot of people their four oh one k
New York State defer comp all these other assets, and
we'll limited to iras as they retire. But there's a
lot of reasons related to your own planning that you've
got to have a plan in place, so everybody understands exactly,
(40:18):
but using IRA funds in your lifetime, I'm a big
believer in spending down iras assets, especially pre tax accounts.
Broth IRA, of course, is an entirely different animal. Tax free,
tax free, tax free, tax free to you, tax free
to your spouse, tax three to your kids. Now they're
(40:40):
going to be subject to R and D. But who
cares because they get they still get a tax free So,
as I said over and over again, we're big believers
at the retirement planning group of taking care of you
in your years here on earth. There's no point in
leaving inheritance if it means that you sure changing yourself
(41:01):
as far as your own quality of life. So using
your IRA funds for you for your own purposes allows
you to cover of course your living expenses any major
changes you might have in your health medical cost you know,
Fidelity just came out this past month with the new
report one hundred and seventy two thousand and five hundred
(41:22):
dollars per individual at age sixty five expected out of
pocket expenses for healthcare, and that does not include launtered care.
Some of us have great desires to have charitable giving
in our lifetime. So if you're inclined to do charitable giving,
(41:48):
the best assets to give are Leading IRA assets to
a qualified charity is probably more tax efficient than leading
to your errors. Is that well, they avoid the income tax.
Charities are of course tax exempt and will receive one
of your irase value. Your loved ones, on the other hand,
(42:12):
would have to pay ordinary income tax on all those distributions.
Taxable retirement accounts like traditional iras are often considered the best,
meaning you're just your regular brokerage account is the best
tax efficient transfer IRA accounts are the least effective, not
(42:35):
the most effective, because of the ird income or respect
to a deceit. So there's some ways that you can
think about this. How do I get tactical? How do
I leave money from my IRA? For some of you,
it's going to be complex because you're using those money
in your lifetime in order to have quality of life.
(42:57):
It's your pension benefit. For some of you, what I'm
talking about today, you could throw it out the window.
It's not going to be but some of you. Basically,
if you have a large IRA, sometimes we set up
two or three iras, one for you for your income needs,
one that's set up for your charitable getting, and one
(43:20):
that's specifically set up as far as the legacy the
transfer of wealth to your loved ones. So if you're
leaving IRA, that's complex and you want to prevent headaches,
what do you do well? You can do a wroth
conversion by converting your traditional IRA to a wroth IRA
(43:43):
during your lifetime, you pay the income tax up front,
likely at a lower rate in retirement, and your errors
will receive them the wroth IRA tax free, assuming that
the five year rules met and of what do what
we call the ten year distribution window that we talked about.
Money has to be out the door in ten years.
(44:06):
You want to leave other asks to your You want
to provide your children but minimize their tax exposure. Leave
them non IRA assets so they get a stepped up
in basis upon your debt, such as what real estate
appreciate it stock. This allows them inherit the asset and
sell it immediately without paying any capital gains tax on
(44:30):
the appreciation. Great way to leave assets step up in basis.
A lot of clients utilize life insurance. They spend down
their IRA, or a portion of their IRA, they carve
out a portion. They do a compress pay on a
life insurance policy. Say they pay for it for five
(44:52):
or ten years. That life insurance policy is now guaranteed
to be enforced to age one twenty one. So now
they're taking complicated assets. They have the velocity day one
dollar one of the life insurance and when the kids
receive the assets, they now have tax free money rather
than taxable money. It's inside the trust because the trust
(45:15):
owns the insurance. It's exempt from federal and a state tax,
and it's protected from creditors, predators and evil son of
laws and daughter in laws. It's a great way for
you to leave assets, especially I am a big believer
in life insurance, survivorship second to die. If you ever
look at it, I think it will be flabbergasted on
(45:37):
what it can do as far as your overall estate planning.
But as always, as always, leaving money to children and
loved ones can be complex. You know, a trust, in
my opinion, is a necessity to provide structure and control
(46:00):
and how your beneficiaries will receive non qualified assets. Real estate.
You know, I've been blessed, unfortunate. I have a home
up in Lake George. The price is a home in
Lake George. Right now, are through the roof. You know,
if Billy and Bobby and Susie and Kathy, whoever it
(46:21):
may be, are your family members. One lives in Boston,
one lives in California, and one lives here in New York, right,
how much use the one that's in California or Boston
is going to have with the property in Lake George.
The one child I want it, But can they afford
to buy out Mom and Dad as far as the
value of their property in order to get equal distribution
(46:43):
of the estate for the rest of the kids. It's
a big problem. And it's not just Lake George. It's
major metropolitan areas. It's any other lake. You know, if
you have water, water water, whether it's on a lake
or a river or Lake George, doesn't make any difference.
The properties have escalated in value unbelievably. But I'm going
(47:05):
to get back to what I say over and over again,
how do you deal with this? You have to have
a plan. You have to have a plan. The other
thing that I want to go over that I think
is critical that you understand there is the ability for
loved ones to disclaim IRA assets. It's a document that
(47:30):
Fidelity has. It's called the IRA Disclaimer. The primary is
the dad. Let's just use as an example. Mom is
the is the primary beneficiary. It's his IRA, but she's
the primary beneficiary. And then the children. You got two
boys and a girl, naming whatever you want. Dad's done
(47:55):
real well in his life. They're using the IRA to
supplement his pension and social security. They both had pensions,
they both did well. The IRA just kept on growing
and growing and growing and growing. They didn't do a
Roth conversion. They didn't get tactical with it. They like
to see that the account was growing. Now they say, wow,
(48:15):
look at this. Look at this huge tax liability that
we're sending on to the next generation. Neither one have
long term care insurance. Dad dies, Mom's sick and ill.
She's in a nursing home. You don't have the IRA
to go there, right because they don't have long term
(48:36):
care insurance. So if she has the ability to disclaim
that IRA, it passes over her as says she had
already predeceased the husband, and goes directly to the three children.
So each child would get a million, a million, a million.
It's not going to the nursing home. So there are
(48:59):
ways to tackarticularly structure your IRA beneficiary forms in order
to basically facilitate what you want. Now, I might say, listen,
I want to keep five hundred thousand dollars of that money.
Now two point five million dollars would go to the kids.
Five hundred thousand dollars. She doesn't have to do all
(49:21):
or none she can retain the percentage of the IRA
that she wishes to keep and finally just realize this
doesn't necessarily There are three assets botes that you want
to use in your lifetime or you want to have
(49:42):
a specific plan for those assets. The first is IRA
that we just talked about, any pre tax money New
York State Deferred Compensation PSP four H three B any
pre tax money. You want to have a specific plan
(50:05):
because of the tax consequences if you do nothing a
do nothing plan, So you want to sit down with us.
We offer a complementary consultation at our office. We have
soon to be six offices in New York. Give us
a call. Eight eight eight five eight zero one nine
one nine eight eight eight five eight zero one nine
(50:25):
one nine. I'm Dave Cope. The information or services discussed
on this show is for informational purposes only and is
not intended to be personal financial advice. The investments and
services offered by us may not be suitable for all investors.
If you have any doubts as to the merits of
an investment, you should seek advice from an independent financial advisor.
Good afternoon everyone. This is Retirement Ready. I'm your host,
David Kopek. We're here every week so hopefully inform you
on these changes that are happening to pre and post
retirement planning. I'm going to talk about a topic today,
because this is a topic specific program Retirement Ready, that
(00:28):
we're going to be talking about one of the largest
transfer of wealth in the history of mankind. And the
reason why we're talking about it is because at the
Retirement Planning group, we're starting to see it, folks. We're
starting to see this wealth transfer take place. And what
I want to talk about today is are you prepared
(00:53):
so retirement planning and the age of twenty and twenty five,
We've got eighty five trillion dollars worth of wealth that
will be transferred over the next two to three decades.
We will witness, our children will witness one of the
largest generational wealth transfer in the history of mankind. It's
(01:17):
estimated somewhere between eighty five to ninety trillion dollars trillion
with the t is expected to transfer from the Baby
Boon generation to Gen X, the millennials just here in
the United States alone, just here. So this unprecedented financial
(01:40):
shift is reshaping how individuals approach retirement planning, inheritance, tax strategies,
and of course financial legacy. And as we're all quite
well where I don't think the numbers bear it out,
but I think it's happening. People are living longer, healthier
(02:02):
lives and become much more financially connected, meaning that they're
preparing for this massive wealth transition and they're trying to
figure out what is the best way in order for
me to pass these assets on, and who and where
(02:24):
will this money go, Who's going to inherit it. So
when we talk about retirement planning today, for those people
that have been fortunate that have basically hit the mother load,
effective retirement planning now means more than just ensuring you
don't outlive your assets. It also means positioning your wealth
(02:46):
in a way that aligns with your values, minimizing tax liabilities,
and ensuring that you're going to have a smooth succession
to the next generation. Critical. So for the people that
are out hanging in the yard, driving your tractor, sitting
(03:06):
on the beach, whatever it may be, you're tuned into WUI,
I'm going to focus in on the people that were
born between nineteen forty six and nineteen sixty four, the Boomers,
you collectively hold more than half. You collectively hold more
(03:26):
than half of all the US household wealth here in
the United States staggered. Much of this is tied up
in real estate, investment portfolios, your family businesses, retirement accounts,
which I'm going to really focus in in the second
(03:48):
half hour of today's show. And as this generation enters
advance retirement years and begins to pass away, these assets
will gradually transfer to our children and our grandchildren. Cerrillion
ass excuse me, Cerrillian Associates indicate that this eighty five
(04:15):
trillion dollars will transfer through inheritance and estate planning by
the end of two thousand and forty five. Now about
seventy three children trillion is going to our errors directly,
hopefully with a step up and basis. And then of
course almost twelve twelve trillion dollars is estimated to go
to charities. So for retirees with significant assets, the state
(04:43):
planning is a very extremely important part of your retirement strategy.
We talk about this all the time at the retirement
planning group. It's not so much ROI return on investment
at the stage of your life. It's basically put the
pieces of the puzzle together and having a comprehensive estate
(05:04):
plan that includes your wills, your trust, power of attorney,
your healthcare directives, and ensuring that your assets are distributed
as intended and there's no legal hurt hurdles at the
end of the rainbow for your children and loved ones.
(05:25):
Trust in particular offer a lot of advantages and control
how people and errors will receive assets. Revocable living trusts
allow flexibility during your life, while irrevocal, irrevocable trusts can
reduce the state taxes and it can also basically you
(05:49):
can monitor these assets, manage these assets. Sounds morbid from
the grave. You have children, you have grandchildren, you have
evil laws and daughter laws. You've got creditors and predators.
Who knows what's going to happen in the future in
regards to lawsuits. So trust can really be beneficial for
(06:11):
individuals that are worried about per sturpees and the money
following the family. High net worth individuals should also consider
utilizing these strategies during their lifetime. During their lifetime to
reduce their taxable estate. So as we sit here today
(06:32):
in twenty twenty five, the lifetime estate and Gift tech
exemption is currently at thirteen zero point sixty one million
per individual. A lot of people are leveraging this window
to gift assets to heirs because of the possibility that
legislation legislation will drop and you'll have additional tax exposure.
(07:00):
I wish everybody at the Retirement Planning Group had that
type of wealth, but we do have clients that have
that type of wealth, and I can say right now
we are aggressively working with the attorneys to basically set
up their legacy and basically fill these trusts with the
type of assets that we want to go into it.
(07:21):
So you need to work with financial advisors to employ it.
I guess what we call a tax efficient strategy. There's
a lot of assets. We talk about assets that you
want to use in your lifetime in the monies that
you want to basically gift or transfer at death. The
(07:43):
most complicated money that we see at the Retirement Planning
Group is pre tax money IRAS four one k's four
O three b's New York stint deferred compensation managing required
(08:04):
minimum distributions in your lifetime from these accounts can reduce
taxable income, and there are different strategies out there in
order to preserve capital and make it more tax sufficient
for your loved ones when they receive these assets. Bottom
(08:28):
line gets down to is that we live in a
society today where there's a lot of money out there
and there's a lot of different strategies. Our job at
the Retirement Planning Group is to be listeners, using our
ears and understanding exactly what you're trying to accomplish in
your lifetime. So it's important for you to have conversations
(08:53):
not only with your spouse, your loved ones, your significant other,
your children, but inherited iras require a different type of
planning simply because the rules have changed and there is
no longer what they call the stretch IRA, which we're
going to get into much greater detail after we take
(09:14):
our first break. So bottom line gets down to, if
you're sitting on seven figure eight figure qualified assets four
O one k's iras, then we want to have a
chat with you when we come back as far as
(09:34):
some of the overlook things that you might be missing,
why you want to basically use those assets in your
lifetime or start gifting some of those assets in order
to facilitate and better transfer of your wealth at death.
I'm Dave Kopek. We'll be back right after this message.
(09:54):
Are you ready for retirement or just hoping it works out?
Don't leave your future to chance. Retirement Planning Group we
hope you create a personalized retirement plan so you can
relax knowing you are prepared. Take action today. Called eight
eight eight five eight zero one nine one nine. That's
eight eight eight five eight zero one nine one nine,
or visit us at our website rpgretire dot com to
(10:17):
schedule your complementary consultation. Your future will say thank you.
You've spent a lifetime saving for retirement. Now it's time
to make that money work for you. Here's the secret
most people miss. You have to create your own retirement
income plan. Social security is not enough, pensions are rare.
You need a strategy that turns savings into monthly income
(10:38):
that will last a lifetime. At the Retirement Planning Group,
we build customized income distribution plans so you can retire
with confidence, retire smart, live well. Call eight eight eight
five eight zero nine one nine for your complementary consultation.
We are living through the greatest wealth transfer in the
history of mankind. Trillions of dollars of wealth will change
(10:58):
hands from one generation to the next. Your money to
our beloved children and grandchildren. Are you ready? Your future
is written by chance, it's written by action. Now's the
time to build your plan, protect your assets, and position
yourself for the opportunity. Don't wait, take action. The future
favors those that are prepared. Call eighty eight five eight
(11:19):
zero one nine one nine. That's eighty eight five eight
zero one nine one nine. Retirement is in a Sunday thing.
It's a now thing. Whether you're just starting out or
nearing the finish line. The best time to build your
retirement plan is today. Don't wait for the right moment.
Let's create a plan that works for you. Secure your
(11:39):
future and the freedom that comes with it. Call my
office today and take action. Eighty eight five eat zero
one nine one nine. That's eighty eight five eid zero
one nine one nine, and your future will thank you.
(12:01):
All right, Happy weekend, beautiful Saturday, and Upstate New York.
Depending on where you're listening, I know that the show
is broadcast throughout the United States, actually globally, so wherever
you're listening. Hopefully you're having a wonderful weekend. Today's a
big day in Upstate New York at Saratoga. The travers
should be a great race. It can be great weather,
(12:21):
so it's probably gonna be a fast track. So whoever's
out there that's going to the races, good luck, Be
careful and enjoy your day. We had a horrible bus
crash at Upstate New York yesterday. God rest their souls
for the people that died in that bus crash. But
(12:42):
you know, just be careful, folks, be careful. You know,
I'm a big believer working with a financial team and
retirees I always say are better off when they have
a financial team to employ more tax efficient strategy as
far as managing your assets during your retirement years. So
(13:06):
for some of us, receiving a significant inheritance can be
a blessing. It can be a challenge a lot of times.
Without proper guidance, understanding, education, your loved ones may squander
what took decades for you to build. So planning is
(13:26):
crucial for recipients to make the most of their inherited wealth.
We over emphasize this. Have the conversations understand exactly what
your children are looking for as far as the type
of assets they would like to receive at death. They
(13:48):
need to understand what they're inheriting, whether it's real estate,
your investment portfolio, your retirement accounts, or your business. As
you're quite well aware, retirement assets have different tax implications.
As I said, in the second half of this program,
(14:11):
we're going to focus in on qualified assets iras four
oh one k's, four O three b's steps KYOS, New
York State Deferred Compensation TSP with the government. These assets
are dictated as far as the amount of money that
(14:33):
has to be paid out over a ten year period
of time. There's no step up in basis as you
have with real estate, and the government has a plan
for you, and it's a plan that's basically you're going
to empty the pot within ten years if you're a
non spouse beneficiary. The other thing is is that because
(14:54):
of this wealth transfer, some of our clients are staggered
when we run the numbers as far as what their
net worth is. And as you're quite well aware, sometimes
a sudden influx of wealth cannot only impact your retirement timeliness,
(15:16):
but also the investment strategy and lifestyle that your children,
maybe your grandchildren would like to have. So instead of
relying solely on inheritance, a lot of the younger generations,
in my opinion, should continue to build their own retirement plans,
(15:36):
maximizing their fore own caves, growth I rays, and other
vehicles to maintain their own financial independence. Why is that, Dave,
Because people are living a hell a lot longer than
what they expected to live in today's times. Union. I
don't know if you saw it or not. There's a
woman that's one of the oldest individuals in the United
(15:58):
States and she just celeb her one hundred and eleventh birthday.
Is that common? No, But if you listen to the experts,
and you listen about AI and our healthcare industry, she
might be the norm in the years to come. So
one of the most overlooked elements of retirement inherentess planning,
(16:21):
in my opinion, is open family communication. And a lot
of times, maybe it's because of my generation, A lot
of us basically what we had we earned. We started
with nothing and we built a pretty nice nest each
But many families avoid these conversations about money death. No
(16:46):
Whodell wants to think about death legacy and what it does.
It leads into confusion, disputes, misaligned expectations, Families break up,
loved ones don't talk to one another, and then the
person that passes away what their intentions were meant to
be don't come to maturity. So I'm gonna hold this
(17:12):
loud and clear and hopefully you hear this. You should
have intentional discussions with your family clarifying exactly your plans
for your estate and sharing those values behind closed doors
with your children and loved ones about these financial decisions
(17:34):
that you've made. Just don't leave this large golden goose
on a table and just say now, go ahead and
fight over. You know, some of the greatest conversations that
I've had over the forty three years that I've been
in business is when you sit down and you do
(17:56):
legacy planning about transferring this wealth. Then you start getting
into the stories, the lessons that they've learned, what their
goals were. You can basically start your own individual family
mission statement on how you want this wealth to be
paid out once you pass away. Legacy wealth planning after
(18:24):
you pass wills are no longer I think a valid
choice for this type of wealth. You need trust. But
the bottom line gets down to is that the more
dialogue you can have with your family and loved ones,
the better they'll understand what your intentions are. Now there's
moving parts. It's a changing landscape, tax laws, the volatility
(18:55):
of the stock market and the bond market very complex.
Sometimes family dynamics, alcoholism, drug addiction, a child or a
loved one that might have autism, a child or a
loved one that might have special needs. That's why it's critical.
(19:17):
Working with a team of professionals is probably more important
than ever because of this wealth transfer. You know, I
applaud the Puro Law firm, and of course they're on
before me, and they're on after me. I do a
show early on Saturday morning, I do this one on
Saturday afternoon. But we have a very coordinated approach with them.
(19:42):
We have a lot of dialogue with Loupiro and his
team as far as how they want to basically titlely
get at the assets for the estate plan, working with
the financial advisor, working with the tax professional, and sometimes
family counselors. Sometimes you've got to have counselors in there
(20:06):
to basically protect and make sure that things happen that
the parents are their loved ones. You know, there's a
lot of people out there. There's a lot of wealth
right now that is being controlled by women. The spouse,
the dad passed away, now the mom is managing these assets.
(20:27):
The kids are concerned. They want to make sure that
the wealth is preserved, protected, and dad's intentions are passed
on exactly the way he wanted to be when he
sat down with mom. So understand that. Advisors on our
side of the defense, because it's changed so dramatically over
(20:49):
the years, we can help you navigate these changing estate
tax laws. They've changed dramatically in the forty three years
that I've been in the business. We can help you
work with the attorneys to create trust in the legal
documents that you need. For a lot of you, it
(21:10):
will make sense to plan charitable giving strategies, especially with
qualified assets iras. If you have a significant amount of money.
Pretext educate your children and your grandchildren on how to
(21:30):
basically manage assets, financial management and for some of you,
for some of you, you might want to set up
portfolios for longevity and legacy. The starving artist's child, the
child that hasn't done so well, the child that maybe
(21:50):
went through a divorce that needs some assistance, maybe a
little bit more, that needs a pension benefit set up
for them because they weren't as successful, that had such
great success in their working career. So the younger generation,
the advisors can help integrate an inheritance into more of
(22:14):
a holistic financial plan, optimizing the tax strategies that are
available to you, and plan for their own retirement and
legacy your children. Eighty five trillion dollars of wealth eighty
(22:35):
five trillion dollars will now pass on over the next
few years, twenty to thirty years to our loved ones.
The question becomes, do you have a plan? I'm going
to say probably seven out of ten people that come
into the retirement planning group that request me to be
(22:59):
in that meeting, I'll sit down with them. I'll go
through the initial booklet that we have you fill out,
and we discuss where you're at, and then we start
opening it up for questions. What questions do they have?
And then we use our ears and out our mouth,
and then we start asking questions. But the common thing
(23:22):
that I hear over and over and over again is
they'll say, this very simple question, am I okay? Do
I need to do anything? Do I need to do anything?
I feel like I'm unprepared. And it's pretty simple, folks,
(23:46):
it's pretty simple. The only thing they really need, because
they've been so busy, working hard, raising families, trying to
spend some time, is they need a plan. That's all
you need. Sit down financial, find out financial wealth management
team that you feel comfortable with. We're here in the
(24:09):
Capitol District region. We're opening up our sixth location in
Hudson pretty soon. But the bottom line gets down to
is that after forty three years of being in this business,
I know one thing for sure that we can help.
We can make a difference with your overall net benefit
for your family. So bottom line gets down to is
(24:33):
that we're going to talk a little bit more about
this when we come back. I'm Dave Kopek. This is
Retirement Ready and we'll see after the news. All right,
we are back. I'm Dave Kopek, the president of the
Retirement Planning Group. This is a topic specific show. We
(24:58):
focus in on one particular topic for the hour today
is this wealth transfer. The eighty five trillion dollar wealth
transfer and some of the things that we're starting to
see already because some of my generation, of course, is
starting to pass. One of the things that I got
(25:20):
to do a little housekeeping here before I get back
into this wealth transfer. Every year, if you've been a
radio listener, I've been in radio. Now. This is my
twenty fifth year, we do a golf outing. It's called
Swing for a Cure. You know, We've had a lot
of individuals in our family that have passed away from cancer.
So every year we do a golf outing, and this
(25:41):
year I'm proud to say that not only is it
going to benefit the American Cancer Society, but also an
organization that's very dear to my heart, Tunnel to Towers.
So it's going to be September twenty fifth at the
golf court here fair Ways of Half Moon and Half Moon,
(26:03):
New York, and it's an all day event. We have
a golf outing, we have a beautiful dinner, there's prizes,
there's gifts, there's raffles, there's all sorts of stuff that
we can do, and all the money, one hundred percent
of the money that is raised, we'll go to the
American Cancer Society and Tunnel to Towers. We had an
(26:26):
unbelievable response last year. If you would like to attend,
we would love to have you come, whether you're a
client or not. If you'd like to come for the
Swing for the Cure September twenty fifth, we would love
to see you there. All you have to do is
call my office at eight eight eight five eight zero
one nine nine eight eight eight five eight zero one
(26:47):
nine one nine and we'll book you a spot. You know,
there's a brochure that Jim Corporan has put together that
highlights if you want to come as a foursome, we
would love to have you. But the bottom line it
goes for two I think phenomenal organizations, the American Cancer
(27:08):
Society and of course Tunnel to Towers. So this is
our first to go around with Tunnel to Towers. We
had to go through an approval process, which we did
and got cleared, so we'll have some of the individuals
from Tunnel to Towers there and I couldn't be prouder.
It's near and dear to my heart and hopefully you
can attend and it will give you an opportunity to
(27:31):
meet some of the staff, our clients, our loved ones,
our friends from the retirement planning group. It's just a
great day, folks. It's a great day. You know. There's
trillions of dollars in qualified plans out there, folks, iras
four oh one k's New York State deferred compensation, and
(27:54):
it's probably the greatest Achilles heel. It's the most problematic
money that individuals have, not only in their lifetime, but
also it's the most problematic money when you want to
pass it on to the next generation. So we're going
to talk a little bit about why I think you
need to be proactive with these assets. The government has
(28:20):
a plan for you for required minimum distributions. So if
you were born before nineteen fifty one, your required minimum
distribution was seventy and a half. If you were born
between nineteen fifty one and fifty nine, your required minium
(28:42):
distribution is age seventy three, and if you were born
after age nineteen sixty, your required minimum distribution is age
seventy five. So what they do is you have a
uniform lifetimetable. Whether you want the money or not, the
government forces you to liquidate it, and as you age,
(29:03):
the distribution get larger. When you pass on the money,
there's no step up in basis and what you're doing
is that you're sending a tax liability to your loved ones.
You're not sending a legacy. So that's when you have
to take it. So you must start taking it at
the latest. If you turned seventy three this year of
(29:28):
twenty twenty five, you have until April first of the
following year, and it's the only year you can delay it.
But that means next year, instead of taking one distribution,
you would have to take two. So we're never a
big fan of doing that unless you're going to be
in a lower tax liability. So once you've taken your
(29:52):
first r and D, subsequent r and ds are due
by December thirty first of each year. At FIDEL, we
get a report, you get a statement. You'll know exactly
what is mandated for you to take out. Lisa and
Jared in my office get on the telephone. They call
our clients and they say, hey, you've more than satisfied
(30:13):
your rm D or you're not taken enough and now
you're going to have to take more out. So we
do get proactive in regards to rm ds. If you
have wroth iras, you are not not required to take
r and ds from a roth IRA account while you
(30:35):
are alive. If your spouse receives your roth IRA if
you haven't spent it down, okay, she's not required or
he is not required to take the roth distributions rm ds.
Non spouse beneficiaries with roths are mandated to take rmds
(30:57):
required minim distributions. So well, if you are in a
situation where you have a large amount of money and wroth,
God bless you. You did good. It's probably one of
the greatest investments that Washington has afforded us. So now
four oh one k. You can delay your rm ds
(31:20):
until the year that you retire unless you are a
five percent owner of the business sponsoring the plan. Okay,
you can delay your rm ds until the year you
retire unless you are a five percent owner of the
business sponsoring the plan. Critical that you understand that. Okay.
(31:44):
So R and D's government has a plan. What's your plan?
Now here's my position. I'm going to give you all
the bullet points. So why you don't want to leave
your irase to your errors several, but I'm gonna because
of time limitations on the radio, I'm gonna go through
(32:05):
the ones that I think are probably the ones that
are gonna give you the most bang for your buck
more than the one that's going to Basically, you're gonna
understand it. Okay, there's a lot of reasons, but the
first and the foremost is the tax burdens. Right when
(32:26):
your children are receiving a large IRA, someone has to
pay the tax ird income and respect to a deceit.
The Secure Act of twenty nineteen limits the withdrawal period
for most what we call non spouse beneficiaries to ten years.
(32:48):
So you have a large IRA, you leave it to
your wife, wife leaves it to you, whoever dies first,
then it goes typically to the children you continue beneficiaries,
they have ten years. Typically what happens it's in their
go go years when they're making the most money and
now they have these large tax consequences, not because they
(33:11):
want them, but because the government is now forcing you
to liquidate those accounts. So the ten year rule, most
non spouse beneficiaries have to have the bucket empty with
the inherited IRA within ten years of your death. As
that I said, this can call large taxable distributions to
(33:35):
fall upon you in your crime working years and potentially
push you into a much higher tax bracket. No stretch.
Remember you're here. We used to hear it for years. Stretch,
streatch stretch, stretch your IRA out for decades. You know,
(33:56):
two hundred thousand dollars is going to be millions of
dollars over the next twenty thirty years. It's gone. They've
removed that method of basically minimizing the tax liability and
stretching out for decades, so there's no more stretch. Stretch
is gone. Ordinary income tax and every dollar that's withdrawn
(34:18):
out of the traditional IRA is tax as ordinary income.
There's no capital gains, there's no tax preference, so every
dollar that comes out, you're going to have to pay
tax on it. Now, this is what I'm seeing because
we're living a lot longer. I got two retired school teachers.
Her sister passed away. She had no children, She had
(34:43):
her sister, and she left a significant amount of money
in IRA to her and now her sister. Because there
was no contingent beneficiaries, it was just her sister as
the primary so she could not disclaim some of that
money because there was only one beneficiaru on the account.
(35:03):
Now her and her husband are pulling their hair out
of their head because the additional income from the inherited
IRA distributions is increasing their adjusted gross income enough to
trigger an increase in their Medicare Part B in D
premium surtex. So you need to understand this landscape. I'm
(35:33):
seeing more of that now simply because of what's happening.
The maturity of the boomer generation. No creditor protection, unlike
the IRA owner who has bankruptcy protection from their retirement
counts most non spouse beneficiaries. A lot of people have
(35:56):
know this. Do not. IRA is inherited, it is generally
no longer protected from a beneficiary's creditors, lawsuits, or bankruptcy.
You need to seek competent legal advice about this. I've
seen it. It's not a it's not a pretty situation.
(36:16):
The other thing is is that you want to make
sure that you understand exactly what you have planned as
far as your beneficiary forms. Probably the most critical component
of your IRA document is the beneficiary form. Primary contingent
(36:39):
primaries typically the spouse contingents are typically the children. How
do you how often do you update it? How often
do you look at it? How often? What happens if
the child passes away? Before the parent passes away needs
to be looked at. It can't overemphasize that enough. We're
(37:00):
going to talk more about that. Will we come back.
I got to take a hard break. I'm Dave Kopek,
President of the Retirement Planning Group. If you want to
call our office and get an apployment. Are you ready
for retirement or just hoping it works out? Don't leave
your future to chance. At the Retirement Planning Group, we
(37:22):
hope you create a personalized retirement plan so you can
relax knowing you are prepared. Take action today called eight
eight eight five eight zero one nine nine. That's eight
eight eight five eight zero one nine one nine, or
visit us at our website rpgretire dot com to schedule
your complementary consultation. Your future will say thank you. You've
(37:44):
spent a lifetime saving for retirement. Now it's time to
make that money work for you. Here's the secret most
people miss. You have to create your own retirement income plan.
Social security is not enough, pensions are rare. You need
a strategy that turns savings into monthly income that will
last a life time. At the Retirement Planning Group, we
build customized income distribution plans so you can retire with confidence,
(38:06):
retire smart, live well. Call eight eight eight five eight
zero one nine one nine for your complementary consultation. We
are living through the greatest wealth transfer in the history
of mankind. Trillions of dollars of wealth will change hands
from one generation to the next, your money to our
beloved children and grandchildren. Are you ready? Your future is
written by chance, it's written by action. Now's the time
(38:29):
to build your plan, protect your assets, and position yourself
for the opportunity. Don't wait, take action. If future favors
those that are prepared. Call eighty eight five eight zero
one nine one nine. That's eight eight eight five eight
zero one nine one nine. Retirement is in a Sunday thing.
It's a now thing. Whether you're just starting out or
(38:49):
nearing the finish line. The best time to build your
retirement plan is today. Don't wait for the right moment.
Let's create a plan that works for you. Secure your
future and the freedom that comes with it. Call my
office today and take action. Eighty eight eight five EID
zero one nine nine. That's eighty eight five EID zero
one nine nine, and your future will thank you. Portions
(39:13):
of the following program will be recorded. All right, we
are back. Happy Saturday and absolutely spectacular day in upstate
New York. If you're going to the track, have a
(39:36):
great day, good luck, hope you come back. A winter
should be a beautiful day. I know my son's going
up with some friends and his beautiful girlfriend. So if
you're listening, Christopher William, have fun and enjoy yourself. I'm
not too sure if the rest of the gang is
up there, but I know you have fun. We're talking
about qualified assets with this wealth transfer. I raise, in
(39:57):
particular a lot of people their four oh one k
New York State defer comp all these other assets, and
we'll limited to iras as they retire. But there's a
lot of reasons related to your own planning that you've
got to have a plan in place, so everybody understands exactly,
(40:18):
but using IRA funds in your lifetime, I'm a big
believer in spending down iras assets, especially pre tax accounts.
Broth IRA, of course, is an entirely different animal. Tax free,
tax free, tax free, tax free to you, tax free
to your spouse, tax three to your kids. Now they're
(40:40):
going to be subject to R and D. But who
cares because they get they still get a tax free So,
as I said over and over again, we're big believers
at the retirement planning group of taking care of you
in your years here on earth. There's no point in
leaving inheritance if it means that you sure changing yourself
(41:01):
as far as your own quality of life. So using
your IRA funds for you for your own purposes allows
you to cover of course your living expenses any major
changes you might have in your health medical cost you know,
Fidelity just came out this past month with the new
report one hundred and seventy two thousand and five hundred
(41:22):
dollars per individual at age sixty five expected out of
pocket expenses for healthcare, and that does not include launtered care.
Some of us have great desires to have charitable giving
in our lifetime. So if you're inclined to do charitable giving,
(41:48):
the best assets to give are Leading IRA assets to
a qualified charity is probably more tax efficient than leading
to your errors. Is that well, they avoid the income tax.
Charities are of course tax exempt and will receive one
of your irase value. Your loved ones, on the other hand,
(42:12):
would have to pay ordinary income tax on all those distributions.
Taxable retirement accounts like traditional iras are often considered the best,
meaning you're just your regular brokerage account is the best
tax efficient transfer IRA accounts are the least effective, not
(42:35):
the most effective, because of the ird income or respect
to a deceit. So there's some ways that you can
think about this. How do I get tactical? How do
I leave money from my IRA? For some of you,
it's going to be complex because you're using those money
in your lifetime in order to have quality of life.
(42:57):
It's your pension benefit. For some of you, what I'm
talking about today, you could throw it out the window.
It's not going to be but some of you. Basically,
if you have a large IRA, sometimes we set up
two or three iras, one for you for your income needs,
one that's set up for your charitable getting, and one
(43:20):
that's specifically set up as far as the legacy the
transfer of wealth to your loved ones. So if you're
leaving IRA, that's complex and you want to prevent headaches,
what do you do well? You can do a wroth
conversion by converting your traditional IRA to a wroth IRA
(43:43):
during your lifetime, you pay the income tax up front,
likely at a lower rate in retirement, and your errors
will receive them the wroth IRA tax free, assuming that
the five year rules met and of what do what
we call the ten year distribution window that we talked about.
Money has to be out the door in ten years.
(44:06):
You want to leave other asks to your You want
to provide your children but minimize their tax exposure. Leave
them non IRA assets so they get a stepped up
in basis upon your debt, such as what real estate
appreciate it stock. This allows them inherit the asset and
sell it immediately without paying any capital gains tax on
(44:30):
the appreciation. Great way to leave assets step up in basis.
A lot of clients utilize life insurance. They spend down
their IRA, or a portion of their IRA, they carve
out a portion. They do a compress pay on a
life insurance policy. Say they pay for it for five
(44:52):
or ten years. That life insurance policy is now guaranteed
to be enforced to age one twenty one. So now
they're taking complicated assets. They have the velocity day one
dollar one of the life insurance and when the kids
receive the assets, they now have tax free money rather
than taxable money. It's inside the trust because the trust
(45:15):
owns the insurance. It's exempt from federal and a state tax,
and it's protected from creditors, predators and evil son of
laws and daughter in laws. It's a great way for
you to leave assets, especially I am a big believer
in life insurance, survivorship second to die. If you ever
look at it, I think it will be flabbergasted on
(45:37):
what it can do as far as your overall estate planning.
But as always, as always, leaving money to children and
loved ones can be complex. You know, a trust, in
my opinion, is a necessity to provide structure and control
(46:00):
and how your beneficiaries will receive non qualified assets. Real estate.
You know, I've been blessed, unfortunate. I have a home
up in Lake George. The price is a home in
Lake George. Right now, are through the roof. You know,
if Billy and Bobby and Susie and Kathy, whoever it
(46:21):
may be, are your family members. One lives in Boston,
one lives in California, and one lives here in New York, right,
how much use the one that's in California or Boston
is going to have with the property in Lake George.
The one child I want it, But can they afford
to buy out Mom and Dad as far as the
value of their property in order to get equal distribution
(46:43):
of the estate for the rest of the kids. It's
a big problem. And it's not just Lake George. It's
major metropolitan areas. It's any other lake. You know, if
you have water, water water, whether it's on a lake
or a river or Lake George, doesn't make any difference.
The properties have escalated in value unbelievably. But I'm going
(47:05):
to get back to what I say over and over again,
how do you deal with this? You have to have
a plan. You have to have a plan. The other
thing that I want to go over that I think
is critical that you understand there is the ability for
loved ones to disclaim IRA assets. It's a document that
(47:30):
Fidelity has. It's called the IRA Disclaimer. The primary is
the dad. Let's just use as an example. Mom is
the is the primary beneficiary. It's his IRA, but she's
the primary beneficiary. And then the children. You got two
boys and a girl, naming whatever you want. Dad's done
(47:55):
real well in his life. They're using the IRA to
supplement his pension and social security. They both had pensions,
they both did well. The IRA just kept on growing
and growing and growing and growing. They didn't do a
Roth conversion. They didn't get tactical with it. They like
to see that the account was growing. Now they say, wow,
(48:15):
look at this. Look at this huge tax liability that
we're sending on to the next generation. Neither one have
long term care insurance. Dad dies, Mom's sick and ill.
She's in a nursing home. You don't have the IRA
to go there, right because they don't have long term
(48:36):
care insurance. So if she has the ability to disclaim
that IRA, it passes over her as says she had
already predeceased the husband, and goes directly to the three children.
So each child would get a million, a million, a million.
It's not going to the nursing home. So there are
(48:59):
ways to tackarticularly structure your IRA beneficiary forms in order
to basically facilitate what you want. Now, I might say, listen,
I want to keep five hundred thousand dollars of that money.
Now two point five million dollars would go to the kids.
Five hundred thousand dollars. She doesn't have to do all
(49:21):
or none she can retain the percentage of the IRA
that she wishes to keep and finally just realize this
doesn't necessarily There are three assets botes that you want
to use in your lifetime or you want to have
(49:42):
a specific plan for those assets. The first is IRA
that we just talked about, any pre tax money New
York State Deferred Compensation PSP four H three B any
pre tax money. You want to have a specific plan
(50:05):
because of the tax consequences if you do nothing a
do nothing plan, So you want to sit down with us.
We offer a complementary consultation at our office. We have
soon to be six offices in New York. Give us
a call. Eight eight eight five eight zero one nine
one nine eight eight eight five eight zero one nine
(50:25):
one nine. I'm Dave Cope. The information or services discussed
on this show is for informational purposes only and is
not intended to be personal financial advice. The investments and
services offered by us may not be suitable for all investors.
If you have any doubts as to the merits of
an investment, you should seek advice from an independent financial advisor.
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