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February 24, 2024 43 mins
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(00:00):
Here's what our attorneys make us say. We believe all the information we offer
on this program is factual and ofto date. However, we cannot guarantee
its accuracy and you should not thinkof it as a complete analysis of the
subject's discussed. We are also notgiving you an offer to buy or sell
the investments we talk about. Allinvestments involve varying degrees of risk, and
we cannot guarantee any specific investment orstrategy will be suitable or profitable for your
portfolio. Always consult with a qualifiedinvestment, legal, or tax professional before

(00:23):
taking any action. You've worked hardand save for retirement, but remember it's
what you do with that money thatreally matters. How will you ensure that
you ring every nickel out of yourSocial Security benefits? Could you pay fewer
taxes in retirement? And how andwhen will you withdraw money from your IRA

(00:43):
or for a one K Welcome toSecured Retirement Radio with Joe Lucy of Secured
Retirement. Financial Jose a certified financialplanner, fiduciary and a contributor to The
Wall Street Journal and has nearly twentyfive years of helping people just like you.
This is where you can count onstraightforward and objective advice on how to

(01:04):
make your money go further in retirement. And now here's your host, Joe
Lucy. Taxes. Most of uswant to avoid them like the plague,
so of course we spend as littletime thinking about them as humanly possible.
Trust me, we get it.I don't love paying, preparing, or

(01:26):
filing taxes either, even if I'mworking with a tax professional. But what
I do love is saving money ontaxes and the reality is is that that
starts long before we enter the taxpreparation season. And if you love paying
less than taxes as well, itall comes down to proper tax planning.

(01:48):
And by the time we're done here, you might love spending a little time
on tax planning, just like wedo here at Secure Retirement Radio, because
a good hour focused on tax planning, especially taxes in your retire wirement,
could be one of the most valuablehours you spend this year. Welcome to
Secure Retirement Radio. I'm Dylan Malberg, a financial advisor here at Secure Retirement.

(02:09):
Also joining me this morning is NateZeller Investment Strategists, and if you're
in or nearing retirement, we havea great show prepared for you today.
See most people don't realize it,but tax planning is one of the most
effective tools in retirement planning. Spenda couple hours on tax planning and you

(02:30):
could save a small fortune in taxeson your IRA, your four to one
K withdrawals, social Security benefits,maybe some investment income, and even more.
Listen Washington, DC thirty four trilliondollars in debt and trust me,
they need the money. Taxes aretheir only sources of income, so higher

(02:50):
taxes could be just around the corner, which is an even more reason to
take advantage of tax planning right now. So coming up on today's show will
are a handful of simple tax planningstrategies that can help you pay less taxes
when you're retired. Nate, goodmorning, Good morning, Dylan. And
taxes could play a much bigger rolefor the current generation retirees and they have

(03:12):
for previous generations. And that's becausethis generation is the first to have to
fund their own retirements, which they'vedone primarily through these tax deferred retirement accounts.
And when people get into retirement,those at are near retirement now,
what they find is that it's verylikely, especially with what the stock market's
done the last decade or two thatthey're iras and four one ks or their

(03:32):
largest assets in retirements, and sohow and when you withdraw money could have
a dramatic impact on how much youpay in taxes. Well, and you
look at you talked about the fourto one k's being their largest assets,
and I guess native if you lookat why that is, and this is
what Joe refers to and is taxSecrets book is the grand illusion? Right?
We started working in our maybe ourtwenty or thirty, someone approached us.

(03:53):
They said, hey, we havethis four to one K account,
and what you should do is putin you know, three, four or
five percent to get started and startsaving for your retirement. Oh, by
the way, we're also going toput in You're gonna match you that same
you know three percent. Say right, you put in three, you get
three from your employer. You getone hundred percent rate of return right on
day one. It's a no brainer, right, And it really is.

(04:15):
But what they also told us wasthat when we put this money into these
accounts, we're gonna put them down. We're gonna defer this money when taxes
were higher. We're new working yearsand when we retire later on, we're
gonna start taking this money and withdrawing it for our retirement when we're in
a lower tax rate. And whatten thousand baby boomers find out every day

(04:36):
is that most of them are findingthat that wasn't the case, that they're
gonna actually put the the money inat a higher or lower tax right the
when they actually would draw them.And that's just where we're at today.
They have forty year tax lows andyou know, thirty four trillion dollars in
debt. It doesn't seem like Washington'sspending is slowing down by any means.

(04:56):
Taxes very likely they are gonna behigher in the future. Yeah, you're
right too, and it does youknow, watching is spending money left and
right. And we always say onScared Retirement Radio that the tax code is
written in pencils. So it seemsvery likely that something is going to have
to give, you know, Dylan, earlier, you mentioned too that the
government really doesn't have the only wayto raise money. They don't sell goods

(05:17):
or services or anything, but thereare only way to bring in revenues to
raise taxes. So it looks verylikely that tax rates are going to be
higher in the future. Well,and we're at this time of the year
where everyone is maybe you've already gotyour taxes done, if you're on the
really proactive side of things. Ifnot, everybody's gathering all the W two's,
the ten ninety nine's, maybe haveone of those k ones. You're
waiting for what have you, andyou're waiting to bring this into your your

(05:40):
accountant's office or the tax preparer,or maybe you're throwing it on TurboTax.
And a lot of families look atthis as this is the tax planning of
the year, right, you're bringingeverything together, you're seeing how you did,
and really the important thing as faras being able to create a tax
efficient strategy and retirement is having abigger focus on tax planning. The difference

(06:00):
of tax planning and tax preparation isone. Tax preparation is pretty straightforward.
It's already in the rear view mirror. It's already happened. You're bringing it
in and you're hoping that you know, you spin the wheel and you find
out if you are getting a refunder, you're gonna win this year. It's
already it's already history. Now,tax planning is looking at where we at
today, what are some what aresome proactive tax moves that we can do

(06:23):
today? Acknowledging one, we're atover forty year tax lows as far as
the tax rates are at right now, we also have to look at the
current tax code that we're in currentlyis set to expire in a little under
what twenty months here now, we'regoing on a little over a little under
two years January first, twenty twentysix, we're gonna revert back to the

(06:44):
tax code that we were in intwenty seventeen, which is going to be
Wall Street Journal says we're on atwenty percent increase for most filers at that
point in time and their taxes,and if we know that's coming on the
horizon, we've got to start lookingat what could we do starting this year
twenty twenty four to start getting activearound overall paying less money on these largest
assets that we have that are theseretirement accounts that we've amassed and saved for

(07:09):
well, Dylan Ess, the keytoo is you want to get ahead of
this. This isn't something that youcan slide into retirement and then start planning
for the tax planning is something thathappens over a period of many years,
so you certainly want to get aheadof it. And if you're sitting there
facing retirement or add our near retirement, or if you have a few years
to go, that's really the timeto start doing this looking forward and creating

(07:30):
a strategy that goes out multiple yearsthat takes you into your retirement and then
beyond well. And we're talking aboutthe tax planning. This isn't about just
saving a deduction here, deduction there. Should I make a traditional IRA contribution
this year? Save a few thousanddollars as you're discussing that with your accountant
here before we file for taxes thisyear. Even if you're working, the
best time to start planning around yourtaxes in retirement is starting today, spending

(07:54):
that hour, beginning that conversation aroundwhat can I do today to lower my
overall tax footprint that I'm gonna havein retirement. Because if you want to
maximize how much spendable cash that youdo have in a retirement, one of
the fastest and easiest and most reliableways that you can do that is by
taking steps right now that can reduceyour tax obligations when you're retired. This

(08:18):
is called tax planning, not taxpreparation, and it's something that we do
with our clients here at Secure timeor Radio every day, even if you're
not a client. We want tohelp you reduce your taxes when you retire,
because the less money that you payin taxes, the more money you
have off to spend on you andyour family in retirement. And that's why

(08:39):
we're offering this morning on Secure RetimerRadio a free retirement tax savings analysis.
So here's how it works. Oncewe gather some basic information from you,
we're gonna find the tax saving strategiesbest suited for your specific situation. Then
we're gonna sit down. We're gonnashare these strategies with you so you can

(09:00):
see exactly how much money you couldsave and taxes in retirement. If you'd
like to schedule that analysis today,give us a call this morning at nine
five to two seven seven seven eightyeight thirty eight nine five to two seven
seven seven eighty eight thirty eight.This isn't about just a few deductions that

(09:20):
we might save a few bucks onour tax return this year. This could
earn you tens of thousands, sometimeshundreds of thousands of dollars in retirement savings
that you go through retirement nine fivetwo, seven, seven, seven eighty
eight thirty eight. To schedule yourretirement tax saving and tax savings analysis this

(09:41):
morning nine five to two, seven, seven, seven eighty eight thirty eight.
To schedule that retirement tax savings analysiscoming up next. Uncle Sam wants
his fair share of your hard earnedsavings. But could that push you into
a higher tax bracket? You mightbe surprised at the answer when we come
back. Nate Zeler Dylan mlbrig infor Joe Lucy this morning. We'll be
right back with more Secured Retirement Radio. He's a certified financial planner, fiduciary,

(10:07):
and a contributor to the Wall StreetJournal. And he's no ordinary Joe.
You're listening to Joe Lucy on SecuredRetirement Radio. He's a certified financial
planner, fiduciary, and a contributorto the Wall Street Journal. You may
not realize this, but he's kindof a big deal. Welcome back to

(10:28):
Secured Retirement Radio with your host,Joe Lucy. Do you have an IRA
or four to one K. Youmight think of that as your money,
but in reality, it's really justa joint account. It's a joint accompt
between you and the irs, becauseremember, you still have to pay taxes

(10:48):
when you would draw this Bunny inretirement. Welcome back to Secure Retirement Radio.
I'm Dylan Maulberg, financial advisor.Nate Zeller, our investment strategist with
me this morning. We are infor oh Lucy was on a town this
weekend, and we're talking about howsome smart planning strategies could save you a
fortune in retirement. Coming up inthis segment, your IRA, your four

(11:11):
to one K. These are tickingtax time bombs that could push you into
paying even higher taxes than retirement.Yeah, Dylan. Today on today's program,
we are talking about tax planning andhow it's a little different. It's
very different than tax preparation, whichis on a lot of people's minds this
time of year. And in ourearlier segment you'd reference what we call the
grand illusion, where you put thismoney away for retirement and a tax deferred

(11:33):
account, saving money at the time, with the thought being that it'll grow
tax free and then you'll take itout in retirement and at that point taxes
will be lower. And what wetalked about previously is that you know,
with thirty four trillion dollars in debt, our government's most likely going to have
to raise taxes at some time,and is the code is written right now,
it will. Tax rates are goinghigher here at the early part of

(11:56):
twenty twenty six. They're reverting backto where they were in twenty seventeen.
But the other part of this toconsider too, is part of the grand
illusion is that a lot of peopleare told that when you hit retirement,
you're going to be in a lowertax bracket because your income is going to
be less. And you know,a lot of the people that we talked
to find that this is not thecase. They don't have the deductions for

(12:18):
their children, they don't have thedeductions for mortgage interests, for example,
and so they find that their taxrates are really staying the same as they
were during their working years, andin a lot of cases they're even they're
even higher. And so I think, now, you know, let's let's
talk about R and D s andhow those can push people into a higher
tax bracket. Well, you know, Natal, I think we see it

(12:39):
a lot here in our office atSecure time of radio where families have done
a great job of planning, youknow, saving in other areas, maybe
there's pension that you know, wewe do a good job around social security
planning and what have you. Inand a lot of times some of these
families will find themselves in a spotwhere you know, they've saved this money
in the retirement accounts, I raisethe four to one ks and they really

(13:01):
never needed to access the money.And there's a certain point in time where
you know, the IRS steps inand says, hey, wait, you've
reached the magical age that you're goingto just start taking this money out and
start paying tax on it, regardlessof if you need it or not.
And that's really where uh, familiescan find themselves paying a lot more taxes
in retirement. Right, Yeah,that's right. And what we're referring to

(13:24):
here are the rmds or required minimumdistributions than previously the age was seventy and
a half, but recently it wasraised. This age seventy three is when
you are required to take these distributions. So you have this tax deferred account
and then you're required to take moneyout and like Dylan said, whether you
need it, or not. Itdoesn't matter if the stock market's up or
down, because in reality, UncleSam and the government they've let this money

(13:46):
grow for all these years, butthey want their money back, and that's
why they can charge taxes on it. And you know, these are required
and a lot of people find thatwhen they these rm ds start to hit,
it really pushes them into a highertax bracket and then that affects the
taxation of other things such as SocialSecurity and medicare premiums. And so it's
certainly something to start planning for,and you need to start planning well in

(14:07):
advance of age seventy three. Well, and I think we look at this
from another perspective as well made andthis is money that has to come out
of the accounts. Right if wedon't take it out, we're gonna they're
gonna hit us with a twenty fivepercent penalty on the money that we don't
take that we're supposed to take.And like I said earlier, a lot
of families don't necessarily need this moneyfor their obligations that they'd rather just keep

(14:28):
deferring it. So you know alot of times you look at it and
say, hey, this money hasto come out, you know, call
it around four percent. And Nate, what if you find yourselves in a
situation like maybe in twenty twenty two, where you know we're in a down
market. I mean that that doesn'tnecessarily change the amount that these R and
b's this money that has to comeout of these account regardless of what Wall
Street's doing. Right, Yeah,that's right, and that there's actually a

(14:50):
formula to calculate how much your Rand D is and it's based upon your
data, birth, your age,and then the previous you're in value.
So in twenty twenty two, people, you know, we're to take money
out based on twenty twenty one valueswhen the stock market was higher, and
they had to remove this money whenthe market was down, basically locking in
their losses and you know, notallowing that money a chance to necessarily recover

(15:11):
and grow like we saw in twentytwenty three. Because as Dylan said too,
if you skip an rm D,you're subject to a very hefty penalty
of twenty five percent. And soit really is in your best interest to
take the rm ds when you're requiredto, and do it each and every
year. But really the key hereis to get ahead of these and start
planning in advance well. And Ithink required minimum distributions are one of the

(15:33):
prime examples of what we call legislativerisk. Legislative risk is the chance that
the government that Congress goes and changesthe rules on how they're going to on
how they're going to tax our money. Not only do we refer to the
tax code as being written in pencil, is the fact that it could be
changed at any point in time.But you know, a very prime example
of legislative risk here is what's calledthe Sekirac which you mentioned earlier, Nate,

(15:58):
and then end of twenty nineteen,twenty twenty, that's when the Secure
Act was introduced, which raised therequired minimum distribution age from seventy and a
half to seventy two. What italso did is it changed the way that
these retirement accounts get inherited. Previousto twenty twenty, if you wered inherit
these accounts, you were able tostretch out these the tax burden, and

(16:19):
you get the stretch out over yourlifetime. Necess you're retired, or you
inherited a IRA from one of yourparents, you're you're in your forties,
you could stretch it out over yourlifetime, stretching out that tax liability over
forty fifty years. Well, whatthe Secure Act did originally was it it
eliminated for the most part, whatwe call the stretch IRA. Now,
what it did is it brought inall that tax liability and brought it into

(16:42):
just ten years where these accounts hadto be liquidated and the tax had to
be paid on it. Fast forwardto the end of twenty twenty one and
into twenty twenty two, we'd getthe Secure Act two point It's the Secure
Act two point OZH, which thenraised required minimum distribution ages from seventy two
to seventy three. And by youknow, nine years from now twenty thirty

(17:02):
three, the required minum distribution agewill be up to seventy five. Now,
you know, they keep increasing theirrequired minium distribution age, which sounds
like you know, it sounds likea good deal. Right. We get
to continue to defer and and deferthese armbs because we have other assets of
their income that we don't necessarily needthis income. But if we don't start
getting our arms around, how dowe start planning around what this looks like?

(17:25):
Ultimately, Nate, what a lotof families are going to find out
is these couple extra years that theyget to defer are just compounding and making
this required minimum distribution problem even worsefor them. Well, it is.
And delaying the r and ds upto age seventy five, Dylan, like
you mentioned, sounds they sound likea really good thing at first, but
letting your money sit untaxed, theresult is a bigger tax bill because that

(17:45):
money continues to grow tax deferred.And this formula that they use, the
calculation is based upon your life expectancy, So at age seventy five, your
life expectancy is less, resulting ina larger required minimum distribution. And you
know, there again where people findthemselves really stuck between a rock and a
hard place sometimes because at that pointthey're required to take the minimum distribution and

(18:10):
it, you know, forces themup into a higher tax bracket. Well,
and that's why looking at tax planningis important to start today. You
know, one, we know thatwe're over forty year tax those right now,
it's a great time, best timeever to start looking at this knowing
that we have an expiring tax codethat we're gonna see an automatic tax increase
for most Americans. Starting in twentytwenty six, and like you said,
nay, once we get to thatrequired minimum distribution age, whether it's a

(18:33):
seventy two, seventy three, orseventy five for you, once you get
to that point, you're kind youkind of painted yourself in a corner where
you know, yeah, there's somework that we can do to kind of
dig ourselves out of it, butit's a lot harder and there's a lot
more difficult decisions that are gonna haveto be made at that point in time
on how to start digging yourself outof that hole, because really we don't
have a lot of options because you'rerequired, you're on the government withdrawal plan

(18:57):
at that point in time, whereyou're gonna have to take out what the
IRS dictates based on these life expectancytables, and if you don't, you're
going to get penalized on top ofgetting tax for them. And if you're
taking this money out, you're payinghigher Medicare premiums. If anyone's experienced that
where their income was higher than theirneighbors, so they got to pay a
little bit more for their Medicare premiumsfor the same for the same coverage.

(19:22):
Maybe there's so you end up payingsome higher taxes on some investment income,
you know, whether it's capital gainsor dividends. You know, maybe you
ended up paying more tax in yourSocial Security than you thought than you were
before because you had to take outthese required minimum distributions. Innate, there's
a lot of things that can triggerdown by hitting just a certain age and
having to take out this money outof these retirement accounts. Yeah, Dylan,

(19:42):
and you did hit on that too, and that's why these are called
you know, the I R Sis weapons of mass destruction. Is because
the R and D, the requirementiumdistribution often does force people into higher tax
practe than it does affect all ofthe other sources of income. And you
know, we can't stress enough howimportant it is to get ahead of these
and you start planning many years inadvance, you know, as you're entering

(20:04):
your retirement years and getting ahead ofthis, and you know, thinking about
doing things such as maybe taking withdrawalsa little bit sooner to reduce that tax
liability. Well, if you're listeningto this morning on Secured Retirement Radio,
here here's an important question I wantyou to ask yourself. How would high
your taxes on your IRA or yourfour to one K with draws? How
would that eat into your retirement plans. It's kind of a scary idea considering

(20:27):
how much your national debt has grownrecently, and that's why so many Americans
are taking steps right now using provenstrategies that could Washington prove the retirement savings.
These strategies could dramatically reduce your taxesand retirement, and we can show
you how in a free customized retirementtax savings analysis. Here's how it works.

(20:48):
Once we get some information from you, we find the tax saving strategies
that are gonna be best suited foryou in your specific situation that we're gonna
sit down. We're gonna share thesestrategies with you so you can see exactly
how much money you could save intaxes in retirement. Schedule your free analysis

(21:08):
right now this morning with secure timerRadio by calling nine five to two seven
seven seven eighty eight thirty eight.That's nine five two seven seven seven eighty
eight thirty eight. Some advisors arecharging thousands of dollars for this customized analysis.
We're gonna do most of the heavylifting for you. We're not gonna

(21:29):
charge you a dime. Let's findthe best strategies and see how much you
could save in taxes in retirement.Call and schedule your free analysis today nine
five to two seven seven seven eightyeight thirty eight. That's nine five to
two, seven seven seven eighty eightthirty eight coming up next. Roth conversions
are one of the hottest topics andretirement tax planning today. But is a

(21:51):
Roth conversion right for you? Findout when we come back. Nate Zeler,
Dylan Maulberg. We are in forJoe Lucy this morning, more with
Secure Retirement Radio right after this break. He's a certified financial planner, fiduciary
and a contributor to the Wall StreetJournal, and he's no ordinary Joe.
You're listening to Joe Lucy on SecuredRetirement Radio. Social Security, Medicare,

(22:15):
taxes, risk income, This retirementstuff can be complicated until now. Welcome
back to Secured Retirement Radio with JoeLucy. If you're like most Americans,
you simply prepare and file those taxesevery year. Maybe some of you have

(22:36):
the help of an accountant or aCPA, maybe some of you file it
yourself. But if you're not takingadvantage of tax planning, you could be
leaving a fortune in tax savings onthe table. And this is especially true
in regards to retirement planning. Welcomeback to Secure Retirement Radio. I'm Dylan
Mahlberg, financial advisor. I've NateZeller, our investment strategist with us this

(22:57):
morning. We are in for Joelwho is out of town this weekend,
and and today we're talking about howsome smart tax planning strategies could save you
a fortune and retirement. So comingup in this segment, we'll share why
this could be the best time everto convert your pre tax traditional iras into
a tax free WROTH and how toknow if this could be the right strategy

(23:22):
for you. Yeah, let's starthere by talking about the differences between a
traditional IRA and a wroth IRA andwhen you put money into a four to
one K generally not always the case. Now there is a rothbor one K
option in many instances. But anyhow, in a traditional four to one K
sense, you put that money intax tax deferred and so you get the
tax break at the time that youput it in with the thought being that

(23:45):
it's going to be taxed when itcomes out. A wroth iray is a
little bit different. Is when youmake contributions, there's not a tax break,
so it's you know, tax billmoney that you've already paid income tax
on. But the advantage is thatwhen you go to withdraw it, it
comes out, so all that growthis tax free. And also they're not
subject to require minimum distributions. No, And we talk about roth irays and

(24:06):
sometimes there's we talk about what aroth conversion is, which is a very
it's a very well known tool.I think that most the industry is aware
of and and we do when wesay the word roth conversion, we sometimes
get a little bit of a pushback. Maybe it's two things. One maybe
I make too much money to putto put money into a roth or maybe
it's two One, I'm retired,so I don't have any wages, so

(24:29):
I can't necessarily put money into aroth iray. And we want to make
sure we look at the difference ofwhat's called a roth conversion and what a
rock contribution is. And what arock contribution is is what I think most
people look at when we talk aboutputting money into a roth ira which is,
you know, we have until youknow tax day for the previous year

(24:49):
that you can rate the check itover twenty twenty three, seventy five hundred,
you know, sixty five hundred dollarsup you're under fifty, or maybe
sixty five hundred dollars and seventy fivehundreds you're over fifty. However, you
want to look at it, andthat's a check that comes right out of
that checking account. You put itin to the WROTH. You don't get
any deductions for it, but whenyou take that money out later on,

(25:10):
you get able to take it allout tax free. In order to do
that, there's some rules around it. Run you have to have earnings earned
income. So think W two.Maybe you're self employed, right the pensions
of social curity, that doesn't accountfor income in this in this standpoint,
and if you make too much money, you're not able to necessarily put money
into a roth ira in that case. That is very usually confused with what

(25:34):
a Roth conversion is. Ny,why don't you jump into what a Roth
conversion is and the difference of thatin a Roth contribution. Yeah, So
the Roth contribution is, you know, contributing money to the account, just
like the name sounds and there's limits, like Dylan mentioned, the limits to
how much you can do contribute eachand every year. Then there's income limits,
so you may not be eligible ifyou and your spouse make too much
money. But with a roth conversion, what you're doing is you're taking those

(26:00):
traditional IRA or four one K fundsand converting them to a wroth IRA,
but you're paying taxes on them.At that time, you think, well,
that seems silly. Why would Iwant to do that? And the
reason why is it you're paying taxesupfront. And so this is where the
tax planning becomes so important, isthat you're looking out and this is generally
something that's done over a number ofyears to you know, it takes quite

(26:22):
a bit of analysis too to figureout when it's optimal for you to be
doing this. But you're taking thesefunds out of a traditional IRA, converting
them to a wroth IRA, payingthe taxes now, with the thought being
that as the money grows and thewrath through time, it'll eventually come out
and you will not have to paytaxes on it. And like I mentioned
earlier too, you're not subject tothe requirement um distributions well, and you

(26:44):
know, paying the tax today,you know, does that make sense?
And the answers maybe it really dependson everyone's specific situation and ultimately what their
retirement assets, what their goals are, what their sources of income is going
to be. But we do needto look at the fact that we're at
over forty year tax those right now. With the tax cuts and jobs X
that were enacted in twenty eighteen.When it became effective and when they put

(27:06):
them in place, to get itpassed through Congress, the House and signed,
they had to put a sunset provisionin there which said, in twenty
twenty six, we're going to revertback to where we were in twenty seventeen.
There's no act of Congress or anythingthat needs to happen. It just
automatically will happen at that point intime. And when that happens, the

(27:26):
tax brackets are going to change,the standard deduction is going to be lowered,
and then maybe they'll make some adjustmentsahead of time. But if they
don't do anything, we're going tosee the tax rates increase. So if
we're looking at it and your taxsituation, you know, proactively looking at
it today, you're in let's sayyou're in that twelve percent tax bracket,
and that's really you know, becauseof your income. Maybe you have some

(27:47):
pension income, there's social Security,some interest dividends, whatever the case may
be for you, maybe there's somesome rental income. And looking at it
is that your your your income,really your your income level isn't going to
change a whole lot, But whatis going to change is your tax bracket
and the amount of tax you're goingto pay at that income level. So
if I know in a few years, based on my assumptions that I'm going

(28:11):
to stay at the same income level, and I know that the twelve percent
brack is going to be turned intothe fifteen percent tax bracket, well it
really might make a lot of senseto start looking at you know, twelve
is less than fifteen. Let's let'slook at maybe euroth conversions, right for
you in that case scenario, Andas income gets higher, the numbers get
bigger and the tax savings can bebigger as well. Right, Nay,
yeah, that's right. It reallydoes start to compound on it. And

(28:33):
if we're looking at higher tax ratesdown the road or large require minimum distributions,
it probably makes sense to consider doingthis especially in smaller chunks as you
you know, inner retirement or maybeeven a couple of years before if you're
you're able to. But it certainlytakes a lot of you know, pre
planning over over years. This isn'tsomething that you kind of do once and
forget about it. It's it's aprocess, and there's a lot of strategies

(28:55):
that need to be in place.Well, there's a lot of strategy that
there can be a lot of kindof hidden lane and I guess when you
look at it, I mean,depending on where you're at. I you
know, we've seen some families inthe office that they you know, go
and they did a Roth conversion.Maybe they were in that part of they
were tired earlier and they were bridgingto medicare at sixty five and and what
they did the Roth conversion they filedtheir taxes and they found that they had

(29:17):
to pay back ten thousand dollars ofhealth insurance premiums that they weren't expecting to
pay back because they're on a certainprogram with their health insurance, right because
their income was lower. If weget you know, to a certain point
where income gets high enough, westart paying higher Medicare premiums. Maybe we
get over a spot where we startpaying more taxes on investment income, the
interest, the dividends, things likethat that we don't necessarily see. And

(29:41):
the one thing that that's great about, you know, say a Roth conversion,
is there's no limits on it,there's no income limits. We convert
as much as we want, weconvert as little as we want. So
really making sure you're working with someonethat understands the tax code of what are
the pros and cons of moving acertain amount of money and paying taxes today
and how it's really going to impactyou, not just this year when you
do end up finding the taxes youknow, come tax time the year after,

(30:04):
but really what's the impact going tobe long term on my retirement?
And really, you know, weno one knows, really nate where taxes
are going in the future. Butif you start looking at the numbers and
where things are at, I mean, I you know, our belief here
is that you know, taxes aregonna be higher in ten years in the
are today I'm not you know,the tax rates in two years when they
change there are you know, probablystill gonna be fairly attractive in the long

(30:26):
run, unless we see something reallychange in Washington. What can we do
today to put ourselves in a bettersituation tax wise? Knowing we have these
ticking tax bombs what are called theseretirement accounts. Well, you know,
one of the things that we talkabout frequently here on Security Retirement Radio two
is Washington proofing your portfolio. Andwe're talking about tax code here too.

(30:47):
But another thing too with these rothconversions is they currently are allowed. You
know, it does not matter onyour income. There's really no limitations to
the amounts or anything. But there'sbeen some talk in Washington of putting restrictions
around these, whether it's you know, limiting the amount of conversions that can
be done on an annual basis ormaybe limiting you know, the amount of
income. And so it's one ofthe things too to be careful about and

(31:08):
you know, start planning for soonerrather than later because this option may not
be available down the road. Andthat's that's true. It wasn't introduced into
I don't know if I can't rememberif it's the bill back Better Plan or
where it was, but it wasintroduced. It didn'tend up getting put in
the bill. But one thing thatwe do know is that when these these
ideas get thrown in these bills atCongress or send wherever the bill originates from,

(31:29):
these ideas don't just go away.They they kind of are out there
yet, and once it gets thrownout there, there's a very high chance
that at some point, you know, it's going to be implemented. And
and if we don't have the capabilityof maybe proactively paying some tax and moving
money to ROP, that's gonna bea large missed opportunity. Now that's the
legislative risk that we talked about thatWashington change the rules on how they're going

(31:49):
to tax our money in retirement,and and if we don't have our arms
around how this could impact us inthe future, it could cost you five
to six figures of extra tax savingsthat you could have had by just being
proactive. And at this point you'reprobably asking yourself an important question, how
much could you save in taxes byconverting these traditional irays into WROTH. Should

(32:15):
you convert all your money in theseaccounts by the end of the year,
or maybe you should do it overa few years. What's the right strategy
for you? And the reality isthere is no one size fits all ROTH
conversion strategy. So, if you'resitting on a pre tax IRA four O
one K four to three B andyou'd like to look at converting some into

(32:35):
tax free ROTH irays, give usa call this morning nine five to two
seven seven seven eighty eight thirty eightand schedule your free customized Roth conversion analysis.
We're gonna make it simple. We'regonna gather some information from you,
we're gonna do all the math,and we're gonna show you the difference between
sticking with the plan that you're runkeeping the money in these traditional irays versus

(32:58):
maybe what's a plan, a taxsmart plan look like by converting some of
this money to tax free to ROTHiras. And we're going to give you
all the facts to make the bestdecision that's right for you. Now,
many advisors are charging thousands of dollarsfor this analysis. We're going to do
it for free. We're not goingto charge you a dime. We're going
to do all the heavy lifting foryou. Schedule your analysis this morning nine

(33:21):
five to two seven seven seven eightyeight thirty eight to schedule that ROTH conversion
analysis. Today's historically low tax ratesMark your best opportunity ever to look at
paying taxes consciously This morning on SecureTimement Radio by converting to ROTH. Let's
find out if converting to a rothiray could save you a bundle in taxes.

(33:42):
Nine five two seven, seven,seven eighty eight thirty eight. To
schedule your ROTH conversion analysis nine fiveto two, seven, seven, seven
eighty eight thirty eight. Next up, it's one of the most overlooked pillars
of tax planning. It could saveyou a fortune in retirement. We'll share
what it is when we come back. Nate Zeler, Dylan malbrig and for
Joe Lucy. This morning, wewill be right back with one more segment

(34:04):
of Secure Retirement Radio. He's acertified financial planner, fiduciary and a contributor
to the Wall Street Journal, andhe's no ordinary Joe. You're listening to
Joe Lucy on Secured Retirement Radio.Could you pay fewer taxes of retirement and
keep more money in your pocket?You bet you and Joe Lucy can show

(34:27):
you how. Welcome back to SecuredRetirement Radio. Did you know that you
actually have more control over how muchtaxes you pay in retirement than any other
time in your life. But youhave to be proactive because the IRS is

(34:49):
not going to chase you down andtell you how to pay fewer taxes.
Welcome back to Secure Retirement Radio.I'm Dylan Malberg, of financial advisor at
Secure Retirement Radio. I have Nateze Are, our chief investment strategists joining
me this morning. We are infor Joe Lucio's out of town this weekend,
and today we're talking about how someof the smart tax planning strategies that

(35:10):
could end up saving away fortune andretirement. So coming up in our final
segment, why tax diversification is oneof the most underrated pillars of retirement planning.
Yeah, let's talk about tax diversificationand what it is. And it's
all about asset location, not necessarilyasset allocation. A lot of times when
people sit down with an advisor,they'll talk about asset allocation and how much,

(35:32):
you know, should I put intostocks, how much into bonds or
other things, maybe some life insurance. But asset location is you know what
types of accounts saved in. Arethey tax deferred, are they tax free
or are they taxable? And thisreally is very important and part of the
overall tax planning process. Well,you know, you just look at tax
diversification, tax allocation, and ifyou look at your own personal situation as

(35:57):
you're listening here this morning on SecureRetirement Radio, you know, if you
think about how much money do youhave sitting in maybe the bank, the
checking the savings accounts, maybe youhave some CDs money market, maybe have
one of those brokerage accounts, thoseaccounts that you know, as you buy
and sell, you pay taxes onon the gains, you get to write
up the losses. Maybe there's somedividends and interests that come in there to
play. That's money that all hasbeen taxed already, but you take pay

(36:20):
tax as you go on the investmentincome. There's also the bucket out of
which case you don't pay any taxeswhen you take the money out. Now,
this is the probably the most popularbucket that we want to get to.
It sounds the best, the taxnever bucket. This is the raw
iras. Maybe there's some municipal bondsHSA, maybe there's some more corporate cash
value design life insurance that's in there. And then there's the tax later bucket.

(36:44):
Now, we talked about this earlier. Nate I mean, the majority
of families. The grand illusion,this is what we're all told is we
should save the majority of our retirementsavings in this tax deferred bucket, this
tax later bucket, and when wetake it out, we're gonna pay taxes
on the money we take out atwhatever tax rate we're at at the time.
And if you think about where you'reat right now, and if you're

(37:06):
thinking about it and you're going now, most of my retirement savings is in
that tax later bucket. You know. One, you know, you're not
alone. The majority of Americans havesaved all their money there. And it's
not that you did anything wrong,you did what you were told. But
more importantly, nat is you know, what can we do to start proactively
getting some better tax allocation or taxdiversification as far as our retirement savings are

(37:27):
concerned. Yeah, we've been talkingabout this today, you know, extensively
too. We mentioned the roth conversions, But it comes down to, you
know, looking at different buckets ofplaces to take your money and deal in
to your point, if you know, I'm sure that most of our listeners
have a rether large portion of theiryou know, wealth or their life savings
tied up in these tax deferred accounts, and the problem with those is that

(37:50):
if a lot of your money istied up there, when it comes time
to take it out, you're goingto be hit with a massive tax bill.
And sometimes that can even snowball becauseas you make a withdrawal, you
have to pay taxes, so thenyou have to take out more, which
forces more and you end up inthis horrible loop and you know, causes
people to run through their savings muchfaster than they expected. And so that's
why it's important to you know,have strategies in place to maybe start taking

(38:13):
money out of there a little soonerthan you maybe otherwise would have expected.
Oh and I think if we can, you know, look at how to
we spread money out a little bitmore diversified between these buckets. Ultimately,
what it provides our clients is thatthey have more flexibility to accomplish their goals
and retirement. If if it comesdown to, you know, whether you're
buying that place you know down south, whether you're bringing the kids, grandkids

(38:37):
on a trip and you need totake out a large sum of money that
you know kind of came out ofnowhere. If you're one of your only
options is the retirement accounts. Well, that could cost you a lot more
money in taxes, like you said, and it is, it just snowballs
on itself. And even the moneylet's say I'm gonna withhold the money from
the withdrawal to pay the taxes onit, well, the money that you're
sending to the irs to pay thetaxes on the withdrawal is still a taxable

(39:00):
and you could see how this cansnowball. And and that trip to Dizzeyland
costs twice as much as you thoughtoriginally just because of the tax liability overt
on it. Yeah, And onething I want to make clear though too,
is you know, we talked aboutthe implications of these tax deferred accounts
and some of the pitfalls and howyou are going to pay taxes later.
But it's the great savings vehicle,and it's you know, worked so well

(39:20):
for so many Americans, you know, saving money throughout their working years,
so they have this nest egg builtup for retirement. It's just that you
need to be, you know,very strategic in you're planning on how you're
going to take the money out andsave money on taxes, say, you
know, pay taxes consciously, andso you know, one of the things
to look at is we talk aboutthe three different buckets here is is having

(39:40):
money in each and allocating appropriately.And Dylan, you touched on this a
second ago too, is having thisflexibility. So if you have money in
different buckets depending on you know,your stage in life, what's happening,
what's going on with the stock market, the economy, your individual situation is,
it gives you some flexibility where totake the money from and the most
tax efficient manner. Well, andI think one other thing that it that

(40:01):
it helps you protect again and we'vetalked about it a few times a day,
is legislative risk. If you haveall your money in a bucket that
when you take it out is goingto be taxed at whatever rate Washington,
d C. Or Saint Paul decidesthat you're going to take your money out
and pay taxes on. You havevery little control over your overall tax liability
in these accounts. Now, ifwe can spread some money around the tax

(40:21):
now, the later, the never, and if you do need some money,
you have some options about maybe whatbucket we want to pull it from,
and and that can help us avoidmaybe some of these future changes that
we may see coming out of Washington, d C. On how they're going
to tax our money, and ultimatelythat flexibility and itself will be able to
one create some peace of mind thatyou know, we've been proactive, we've

(40:45):
done the right things, that we'regoing to save a bundle in taxes.
And two one we just morally,legally ethically, we want to help families
pay the least amount of taxes thatthey're that they're obligated too. And and
if you're in that boat where that'swhat you want to do, that's really
what we do here at Secure TimeRadio. Well, and that's what's so
important about this is there's a lotof online calculators where you can go out

(41:06):
and plug in numbers, but itdoesn't take everything into account, especially regarding
your individual situation. And so it'svery important that you do sit down with
an advisor that can help you workthrough all this and look at the different
complexities and consider the different variables andunderstand, you know, help you understand
how it's going to impact your yourretirement so you can live comfortably, you

(41:27):
know, spend confidently, and paytaxes consciously. And so that's why it's
so important to you know, seekthe help of a professional, somebody that's
done this with a lot of differentfamilies and been very successful in it.
Oh yeah, Nate, I thinkit's pretty clear by now that there's a
lot you can do to significantly lowerthat tax bill and retirement. And it's
not about what you put on yourtax forms in April that matters. It's

(41:50):
about the tax plan and the proactivetax planning that you can do today.
Now, the biggest challenge is figuringout which specific strategy is going to work
best for you, and that hasto be based on your unique circumstances and
your situation. And listen, wewant to help, and that's why we're
offering a free no obligation retirement taxsavings analysis. We're gonna gather some information

(42:14):
and we're gonna help find the besttax saving strategies they're gonna be best suited
for you in your specific situation.We're gonna sit down, we're gonna show
you exactly how much money we thinkwe could save you in lifetime taxes in
retirement. So give us a callthis morning nine five to two, seven,
seven, seven eighty eight thirty eightto schedule your retirement tax savings analysis.

(42:35):
We want to help you find thosetax savings strategies that can make a
meaningful impact on your finances on therest of your life. Tens of thousands,
hundreds of thousands of dollars in taxsavings in retirement nine five to two,
seven seven, seven, eighty eightthirty eight nine five two, seven,
seven, seven eighty eight thirty eight. That's all we had this weekend
for Secure Retirement Radio. He's anad Zella. I'm Dylan Mulberg. We've

(43:00):
in for Joe Lucy this morning.We'll be back next weekend with more Secured
Retirement Radio. He's a certified financialplanner, fiduciary and a contributor to the
Wall Street Journal, and he's noordinary Joe. You're listening to Joe Lucy
on Secured Retirement Radio.
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