June 18, 2025 • 57 mins
This mid-week episode is the recording of a session done with the smart women of the WE (Women Empowered) Wealth Collective, titled: What Every Woman Should Know About Minimizing Taxes in Retirement. ‘Catching Up to FI’ co-host and author of ‘F.I.R.E for Dummies', Jackie Cummings Koski, CFP®, AFC®, continues through an easy to follow checklist of tax considerations in retirement. She demo-drives 72(t) and RMD calculators, live-shops the ACA site to score premium tax credits, and shows how Medicare surcharges work.
Topics for the series include:
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Age-band tax checklist (pre-55, 55-65, 65-75, 75+)
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Separating "macro" worry (markets, policy) from micro action (what you control)
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Early withdrawal strategies (Rule of 55/50, 72(t) / Equal Payments, HSAs, Affordable Care Act/Tax Credits, Brokerage Accounts, ect)
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Tax Minimizing tips during normal retirement (Social Security, Medicare Surcharge, Increased Standard Deduction, Balancing account types)
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Later in life considerations (RMDs, Qualified Charitable Distribution, Inheritances, ect)
This is the second part of a two-part series and part 1 aired last Wednesday. This session references visuals from a presentation that is better viewed on youtube or you can follow along using this slide deck.
Disclaimer for this session: The intent of this session is open discussion about money topics that makes us all a little smarter. The content is for general education and information purposes only, and is not providing financial, legal, or tax advice. Always do your own research or consult a professional before making important decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Hi there, I am Jackie Cummings Koski.
I'm author of the book Firefor Dummies and your co-host
here on Catching Up Tophi.
So this is part two of a two partseries about women and taxes.
So if you didn't listen to lastWednesday episode, make sure
you go back and listen to that.
And then come back andlisten to this part too.
(00:22):
So this was a session that I didwith the We Wealth Collective and
we stands for Women Empowerment.
And this was a group that gottogether after the economy conference
a few years ago and decided theywanted to keep the learning going.
I. Absolutely love that.
So he invited me to comein and talk about, taxes.
So we have a great discussion,tons of wonderful questions.
(00:44):
I even had to, think through manyof these considerations myself
when I retired back in 2019.
I hold the CFP credential andI'm also a financial educator.
But just remember that everythingwe talk about today is for.
Information and education only.
I am not a tax professional, but Ithink you're gonna love part two.
(01:05):
So tune in.
(01:37):
So let me zero in on a few things.
So, um, so I wanted to mention somethings that are all stages before
I kind of dive into, um, beforeI dive into those other sections.
So, at any point, these are just some taxconsiderations I want you to think about.
So when it's a primary home,you get $250,000 per spouse.
(02:00):
Mm-hmm.
The profit for the sale of a home.
So if you brought, so Kim, I knowyou're in New York, but so it, this
is especially a big deal if you'rein a high cost of living area, okay?
Where housing prices go up fast.
So 20 years ago, if you brought a housein Manhattan or Westchester, something
like that, you brought it for a hundredthousand dollars way back in the day,
(02:24):
and now it's worth a million dollars.
When you sell it, you gota $900,000 profit, right?
Uh, that's a little bit of anexaggeration, but the first
$250,000 is completely tax free.
So the IRS loves homeowners, all right?
I barely got a $250,000 game,but that, that is per spouse.
And there's some, um, provisions aroundthat where you have to have lived
(02:47):
in the house like I think two of thelast five years and things like that.
All these IRS uh, rules here has a wholelist of things that you have to follow.
Um, and that's when I would, uh,definitely point you to the, uh, IRS code.
So, brokerage accounts, uh,we've talked about this already,
but the capital gains is.
(03:10):
Capital gains tax is much,much lower than income tax.
You are either in the 0%,15% or 20% tax bracket.
The most you pay is 20%, and I thinkthat is on a really, really high income.
Um, and remember that when it comes tocapital gains, you're only paying the
tax on the growth, not what you putin, which is called you know, basis.
(03:32):
That's what you put in.
Um, and then, uh, don't forgetabout your dividend income.
So if you have a brokerage account,when dividends are paid, you're
taxed that year, whether you haveyour dividends reinvested or not.
That's just how it works.
Um, and you'll get your statementfrom your broker, um, the next year
for the, for the previous year.
Jackie, there's a question in thecomments relating to the property, the
(03:54):
increasing property and at $250,000.
Yeah.
Uh, I think someone indicates that theybought their apartment as a single person
25 years ago, and then they got married.
The property has increased in value.
Do they get the capital gains?
For both them and theirspouse or just themselves.
Yeah.
The rule is gonna be, well, and it,it's gonna be also like how it's
(04:16):
titled like who owns the property,assuming that both of you own it today.
Mm-hmm.
Um, the rule is, I, and, and again, doublecheck the IR RSS on this, but, um, I think
the rule is you have to have lived in thehouse, um, two out of the last five years.
So if you were both a couple thatboth owned it, you're a married
couple, then that should count.
(04:38):
But I, if you think that thisapplies to you, definitely, um,
check the, um, IRS code or, youknow, whatever your trusted resources
to make sure you have the details.
Um, but it's okay that you broughtthe house before you got married.
That's fine.
But you still gotta look atwho owns the house today.
And then a really good question,I think says, what if your,
(05:00):
the property is in your trust?
If it's in your trust.
So trust has some tricky things.
Um, if it's in the name of the trust.
Mm-hmm.
My, I, I would have to doublecheck this, but my inclination is
that if the trust owns it, thenthat means you don't anymore.
(05:21):
Ah, if it's in the nameof the trust, you don't.
Ah, and, and trust fallunder very different rules.
And sometimes the IRS willspecifically exclude a trust.
They'll say it has to be, yeah.
Yeah.
So, and, and that's why when youare setting up a trust, you do
have to consider, you know, theprovisions that might negatively,
(05:45):
things that might be negativelyimpacted when you're doing a trust.
And that's, and, and normally whoeveryou're working with, the setup,
the trust, they should advise youon what things make sense to go in
the trust and what things don't.
So, yeah, that was a good question.
Yeah.
And then one other questionrelated to the property.
(06:05):
Okay, no problem.
A lot of discussion.
Good statement that says, uh, isn't therea millionaire's tax on property sales?
If so, how does that affect the owner
a millionaires tax?
Mm-hmm.
I haven't heard that term,
and I think that's the thing with it.
You hear a lot of thingsfloating around on the internet.
Uh, you hear things in conversation.
(06:26):
It's great to have an experton the line that can tell us,
is this true or is this not?
Yeah.
So I haven't heard the term millionairestax, so if she wants to explain what
that is, I'm not aware that it's an IRSrule, but there's a lot of, you know,
um, just common, you know, uh, un Iguess, uh, unprofessional type terms or
(06:48):
layman's terms that we use, but I haven't
heard that one before.
I wonder if it's, uh,the Mansion tax, right?
So there's, there's a one timetax transfer in certain states
and it's for properties thatare over a million dollars.
Um, but Stacy, you can add more in thecomments if you know more about that.
She did.
She said if, if your gainis over a million dollars,
(07:10):
if your gain is over amillion dollars, let me think.
So I have to go back to my CFP days 'causeyou know, that was a doozy of an exam and
they probably asked questions like that.
Right.
Well listen, this, this, thisgroup Jackie will probably hit you
with some questions that are Yeah.
And I Yeah, that, that you can
come
back to us with those answers.
Well, and here, and here's the thing, I, Ilearn a lot too when I do stuff like this.
(07:34):
I haven't done a good job if there hasn'tbeen something that I was able to learn.
Right.
So, um, I, I don't know that there's,um, an over, if it is, it is a
very small nuanced, um, provision.
Oh.
But I'm not, I'm not aware of anIRS, uh, anything in the IRS code.
(07:55):
'cause I know that we had todive, somehow, we did a really
deep dive into this whole primaryhome, um, uh, IRS provision.
And, and I guess they alsotry to focus on things that's
gonna affect a lot more people.
So over the a million dollars is probablygonna not affect a ton of people.
But, um, I'm not sure thatthat's in the IRS code.
(08:17):
Um,
that's good to know,
but it may very well be, but uh,from what I've seen, I don't recall.
Um, okay.
Anything else beforewe go to the next one?
Nothing more.
I think we're good to keep rolling,but keep the questions coming.
This is a great discussion, ladies.
Yeah, very good.
Please, please keep them coming.
Stump stump Jackie, because that meansI'm learning too, so I appreciate that.
(08:41):
Um, so with the HSA, we talkeda little bit about this.
I always consider that there'sfour tax benefits, not just three.
The additional one that most peopledon't talk about is the fica, which is
your social security and Medicare tax.
Uh, I think it's like 7.65%.
Uh, if you're, you know, working foran employer so it grows tax free, um,
or is tax free and out and while itgrows and you can remember that you can
(09:04):
invest in your HSA, uh, just a littletip right now with the market down, as
big as it is, if you have an HSA layingaround that's not invested or one that
you forgot about, it's a good time tolike get that and get it invested if
you want to use it for the long term.
And remember, it's tax free whenyou do take the distributions as
(09:25):
long as you are using it for, um, aslong as you're using it for medical.
Okay.
Um, and I guess another thing that'sworth mentioning, after 65, you
can take out, take money out ofyour HSA, you'll still pay taxes.
Um, well, you could takeit out for anything.
If it's not medical, you will pay taxes onthat, but you won't pay the 20% penalty.
(09:47):
Um, I what?
I used to think that that wasa really cool thing to do.
Oh yeah.
65. I could take all my money outand all I gotta do is pay the tax.
I won't pay the penalty.
And I'm thinking youcould, but why would you?
Because as we get older, over 65,we got a lot more health issues.
So you probably won't have a problemfinding medical, dental, vision
(10:10):
or hearing expenses that you canuse your HSA dollars for tax free.
So why use it on something that is taxed?
But that is the rule after 65 no penalty.
Okay.
That's the HSA and Italk a lot about HSAs.
That's one of my little extra things.
So anybody got advanced courses on HSAs?
I got you.
(10:31):
Okay.
Um, small business side hustle.
Some people think small businesses gottabe where you have employees and all that.
I've had my little teeny tinysmall business, um, since 2013.
I was still working and somebody told me,or I was probably reading something where
they were like, well, everybody shouldhave a business because you can, um.
(10:52):
There's a lot of expenses that become taxdeductible when they otherwise are not.
Okay.
So even if I, and I, I didn't make aprofit on my business 'cause I had enough
expenses to always offset any income.
Like I would do a, a talk or workshopor something here and there, but I
was working so I couldn't do it a lot.
But I always had enoughexpenses to offset it.
(11:13):
So my profit was zero.
However, I could expense things like mycell phone, my internet, um, my computer
back then when I printed out stuff,printing paper, um, you know, uh, mileage.
So I was able to expense thingsthat I normally would not be able
(11:34):
to expense so you can too, soyou can deduct those expenses.
That was very helpful for me.
Even after I retired.
I think the first two years afterI retired, I still had zero.
Now there's that misnomer out there.
So let me clear that up, that if youdon't make a profit for three years,
then they're gonna consider it a hobby.
(11:54):
That is not true.
Back in the day, there was somethingto do with race horses and that's
how that misnomer got out there.
But all you gotta show is a profit motive.
And that typically means, Hmm, you madeup business cards, you got a website,
you are out there, you know, in thepublic putting your business out there.
(12:16):
Nobody is.
The IRS isn't gonna come audit you becauseyou didn't make a profit in three years.
Because if you think about it,most businesses it could take way
longer than that to show a profit.
Right?
You're just getting off the ground.
So I, at the time, I didn't knowthat, so I'm like worried that
the IRS was gonna come after meand that they were gonna audit me.
(12:37):
And I talked to, it wasactually a five person.
Um, I was at, I think there's a Campmustache here in Cincinnati that
will happen at the end of the year.
And he was an IRS agent.
So of course I picked his brain andasked him all kinds of questions.
And that was my main question.
So if you have a small business, itdoesn't have to be any huge business
or anything like that, or if you gota side hustle with 10 99, you can
(13:00):
very well expense a lot of deductionsthat you otherwise would not.
So that's at every phase.
Mm. Um, inheritance of accountsthat are not retirement.
We talked about the brokerage account,but um, also, um, if you didn't
know if you are the beneficiaryof, of insurance, that's tax free.
So as long as it's not a retirementaccount, typically what you inherit
(13:22):
is gonna be completely tax free.
So, uh, with a house, a housealways also gets a step up in basis.
Like if you pass away, you gotprofit on the house, doesn't matter.
Um, it.
The whole house will go to, you know,whoever the new owner is, whoever
inherited it completely tax free.
You don't have to worry about taxes there.
(13:43):
Now, of course, if it continues to growin value or whatever after the person
passed away, then, then that would count.
But it's just nice to get that,you know, step up them basis.
Okay.
Yeah.
Um, and here's that termagain, again, step up in basis.
That's only what you are starting with.
So when you pass away, it's a, if it'sa brokerage account, if it's, um, you
(14:04):
know, a home or property or somethinglike that, the person that's inheriting
it, they don't pay any taxes on that.
And starting point is the valueof it on the day you died.
So these come into play at every phase.
Okay.
Any questions in the, in the chatwe need to address before I go on?
(14:28):
Nothing, nothing else, butif there is anything, oh,
you found something, Kim?
There was one with regards tothe HSA, you could step back.
Someone indicated that they don'thave an HSA, what their spouse does.
Will he be able to use it forher expenses in the future?
Yes, and that's a very good question.
So when it comes to HSAs, you've gotrules that govern contributing to it.
(14:50):
So if he's on a single highdeductible health plan with an
HSA, he can only contribute asa single or the single amount.
Okay.
However.
There's another set of ruleswhen it comes to the tax portion
and the tax portion, um, is whatgoverns how the funds are used.
(15:13):
The funds can be used for anytax dependent, so regardless of
whether they're on his plan or not.
So if it's children, spouse, oranybody that is a tax dependent, he
can use those HSA dollars to cover, um,expenses, uh, for any any tax dependent.
So you're okay with that?
(15:33):
Yeah, that's a good question though.
And along those lines, I was alsohappy I got laid off in 2023 and
was happy to know that I could pay,uh, premiums Cobra out of, um, HSA.
That was a qualifiedthing, so Oh, yes, yes.
You know, so it's, it's a littlebut only if you're unemployed
and you're playing Cobra.
It's not like you can pay anypremiums, uh, at that point, but
(15:55):
good to have some flexibility.
Yeah, that's a very,that's a very good point.
'cause generally you cannot pay forhealth insurance pre premium, but you
can, in your situation where it wasCobra, um, Medicare premiums, you can,
so every single provision here, there'sa long list of like, details that you,
you would wanna know or exceptionsthat could be helpful, like in the
(16:18):
case of, you know, COBRA premiums.
So let's ask, let me go,let me ask another question.
Mm-hmm.
And it may be complex with HSA, ifyour spouse has it and you do not.
You are the person that carriesinsurance for the family and you
lose your job and have the ability topurchase through Cobra, can you use
those HSA dollars to pay those COBRApremiums because it's covering both,
(16:42):
correct.
You, you should, yes.
You should be able to use it to cover.
Yeah.
Yeah.
I just learned something new.
Yeah.
Because, um, at the time, uh,again, there's almost two set of,
uh, provisions, um, and, and twosets of governing, I guess bodies.
So when it comes to distributions,the governing body is tax rules.
So for distributions, yes.
(17:03):
The tax rule says that you can takeit out to pay whatever that plan was.
And if you're covered bythat plan, then absolutely.
Yep.
Okay.
Let's see here.
So the pre 55, and like I said,we, so we did a lot of this ahead
of time, so there's not much to.
To elaborate on here.
(17:24):
Um, but again, pre 55, just a reminder,I consider this the fire crowd.
Um, these are the areas, Rothconversions 72 T, again, which is
substantially equal periodic payments.
Um, this is, you know, gonna get you,uh, allow you to avoid the 10% penalty
where you set up regular payments.
Um, the a CA subsidies,we talk about that.
(17:45):
Um, HSA contributions and distributionsare a consideration at this phase.
And then of course, if you're earningany money through a, whether it's a
part-time job, you know, 10 99 contractwork, small business, all of that.
And then the tax harvestingof, uh, brokerage accounts.
So, uh, things I wanted to remind here.
(18:06):
So 72 t someone a whensomeone asked about that.
Okay.
So I figured I would getsome questions about that.
So, like I said, I set mine upin December and I consulted three
or four different calculators.
They're out there to make it super easy.
Um, if you really wanna diveinto this, the best resource
I found is 72 t calc.com.
(18:27):
We also did like a two part series onthe podcast, but, um, my favorite place
for a calculator is dinky town.net.
They have every financialcalculator you can think of.
So, um, so let me, so I say let's play,that's when I'm gonna try to go live and
we're gonna throw in some scenarios here.
(18:49):
So if I click on that, um, can you tellme if you are seeing my internet browser,
or are you still seeing the presentation?
Nope, it opened in a new tab.
You're good to go?
Yeah.
Okay.
Very good.
So these are my exact numbers.
So when you're setting up a 72 T, youdon't have to use your entire IRA.
The smart way is to say, how muchmoney am I looking for annually?
(19:10):
I was looking for about $15,000.
So how much, how big does my IRAneed to be to throw off $15,000?
That was what I was solving for.
And this calculator does it.
All right, so I put in, um,the only thing I put in was,
(19:32):
let's see, so I ended up withhaving to do, or the math said,
there's a few different calculators.
So you can either choose to putin your monthly amount or choose
to put in the amount that the.
72 t needs to be.
So I just plugged in all the numbers.
This 5% that you see,that's the floor now.
So it makes it so easy.
(19:54):
You don't need the blah blah, blah.
You know, this interestrate, that 5% is the floor.
Now you can go to the IRS and youcan see what the interest rates are
that, that you're allowed to use.
Um, but I ended up usingthe 5% I put in my age.
Um, I didn't really need thebeneficiary age, but I, I'd
used the single life expectancy.
These are things I didn't even haveto think about it, put it there.
(20:15):
So, um, so once I got that in there,it showed me, there's three different
methods, but it showed me what Icould get based on each method.
So obviously this one won out,which is called the amortization.
That's always the best one.
But I'm gonna view the report 'causethat makes a little more sense here.
So it shows the result summary.
(20:37):
So it shows my first year of distribution,the account balance, how old I am,
you know, it fills in all this, themethod that I use and all of that.
So it, it just makes it easy.
So you really don't have to tie up a lotof money to do the 72 t. Don't think that
you have to tie up your entire thing.
Um, so I ended up, you know,getting about $15,000 a month.
(21:00):
But if I changed this, let's say ifI had, you know, a, a bigger account
where I needed more money, you know, ifwe, we can, you can play with this and
put in as many as you want, but let'ssay you started with a $500,000 one.
Okay, so that's gonnagive you $30,000 a year.
You know, um, Eric Cooper, youknow, he's done a 72 TI think he
(21:23):
was doing like around $15,000 ayear, and he uses it as his fund
bucket on top of his other income.
For me, this is my basic income 'causeI'm thinking about, you know, uh, um,
HSA subsidies, or, I'm sorry, um, aCA subsidies and things like that.
So this is a great calculator ifyou wanna play around with it.
Um, there's a few more that are outthere, but if someone's asking me, do
(21:45):
you have a good calculator for that?
I'm always gonna start with dinkytown.net because they have like
every calculator you could think of.
But this is, I I, I ended upusing three different calculators.
You know, I, I put together sortof like a little, um, kit when it
came to 72 Ts because if I evergot audited, I wanted to show them.
I used these three calculators.
(22:07):
Um, I had this, this is the amountof money I started with, here's my
brokerage where I set up the regularpayments and, and all of that.
So it's not that hard, especiallynow there's calculators, um, that
are online that make it super easy.
Um, you can, you know, run differentscenarios and on this page, dke town.net,
they do a good job of like putting detailsabout the provision and answering some
(22:32):
questions beyond just the calculator.
So they've got a lot of stuff in therethat can help you count back, you
know, they go through all of that.
So.
So there's that.
Um, I'm gonna attempt to flipback to my, let's see here.
So are you seeing my slides again?
55 to 60.
(22:53):
Okay, great.
Great.
It's working.
So again, um, we, we hit mostof these, but just to, as a
reminder, between 55 and 65, you'rethinking about almost the thing.
Same thing as a previous one,except now we're adding in, um,
the, uh, the rule of 50 and 55.
So I do wanna dive intothat a little bit more.
(23:14):
So the rule of 55, this was separationof service from an employer.
These only applied to employersponsored plan, not IRAs.
Okay.
So, and not HSAs either.
So it's 55 for everyone.
The IRS allows this provision, but keepin mind, just because the IRA allows
(23:35):
the provision, it does not mean thatyour employer is using the provision.
So you have to check with yourspecific employer to make sure that
they have this written into what'scalled their summary plan description.
Um, my company offered therule of 55, but there's other
people's employers that did not.
Now, if you are a public safety worker.
(24:00):
You get a five year bonus and the ageis 50 and they just updated this on who
is considered public safety workers.
That's been the big question, right?
So I listed all the public safety workers.
So if you're federal or state lawenforcement, correction officers,
customs and border protection, Ithink that's one of the newer ones.
(24:20):
Federal and private sector firefighters,air traffic controllers, and then
emergency medical services people.
I mean, typically you think thatthat would include people that
are in ambulances, whatever.
But you know, some, again, everythingthat the F puts in there, sometimes
it's left up to in interpretation.
(24:41):
So if you are an ER physician or youconsider a public safety worker, maybe,
I don't know, but it doesn't specificallysay that it's not, and it says that's
E it's emergency medical services.
So, so anyway, so some of thesecan be, you know, these are broad
and the IRS is not gonna putevery single detail into the code.
(25:03):
So if it doesn't specifically excludeit, then you know, it may be okay
because if you get audited, you knowyou need to have some type of case.
But this is how this separationof service rule of 55 or 50 works.
Any question on that?
Okay, good to go.
(25:23):
All right, so this is prettystraightforward and I think that
there's a lot of this out there.
Okay.
Um, the Affordable Care Act,somebody was asking about that.
So, um, they've got thisbeautiful lady on the front.
I'm like, I love to seethe women represented.
So I believe anyone headed forretirement before the age of
65, before Medicare starts.
(25:43):
Be sure to see what your optionsare when it comes to plans on
the healthcare.gov exchange.
You can look at that without signing on.
You don't need an account.
And I, and early on when I was closeto retirement, probably in my mid
forties or whatever, I was reallyafraid of the health insurance piece.
And so many people are, and I would hear,you know, I'd be in different PHI groups
(26:08):
and people would say, oh, it's horrible.
I'm paying $12,000 a month forit, or something crazy like that.
And somebody else willsay, oh, it's been good.
Um, I've been on it for twoor three years, or whatever.
And it took me a minute to realize that alot of what people thought had political
undertones, and it's like, I wasn'ttrying to make a political statement.
(26:30):
I just want like the facts.
And so I had to, and this is whatyou will end up doing as well.
I had to check for myself and I hadto do my own research to see, and,
and it's so, and it's hard to even saythat it's good, whether it's good or
bad, because it's very state specificand to a point, it's county specific.
So if you are in New York, I'veheard that the healthcare.gov or the,
(26:55):
um, the exchange is not that great.
They don't have a whole lot of options.
They don't have a whole lot of providers.
Well, Ohio, it's, it's great becausethere's a lot of different providers
with a lot of different plans, andI've been, you know, when I'm going
through, I'm almost seeing too manyplans, but I've been very happy with it.
So I'm gonna just click thisjust to show you guys, um, to
(27:18):
that you can check this out.
So if you go to healthcare.gov/c-plans,it takes you right here.
And the first thing it's gonnaask you is your zip code.
It's not gonna give youanything unless you start there.
So, um, I'm gonna put in a zip codethat I, I know is in my county.
I'm in Montgomery County, Ohio, right?
(27:39):
So now it will allow meto do a lot of things.
However, you can skip a lot of that.
Okay?
So if you do option two here, you answerquestions about your current plan,
your household, and things like that.
This will help me get to the plan.
Now, if you don't even care aboutthat, you just wanna see the full
(27:59):
price of plans, you can do that.
If you feel like you're not gonna.
To qualify for a subsidy and you justwanna have a sense of how many providers
are they, what do these plans look like?
What are the costs if I pay rack rate?
Okay.
But I'm gonna go here 'causeI wanna get an idea of what
my subsidy might do, might be.
So I put start, uh, don't havea plan id, so I'm skipping that.
(28:20):
Um, I'm doing it just for me.
Okay.
So it's gonna ask me a few things.
So I'll go ahead and put, and I didthis before, so I'm gonna go ahead
and put in my age, my, um, my sex.
Um, it asks you if you'repregnant or tobacco user.
I'm neither one of those.
They go, I'm none of those.
So I click none of those.
(28:40):
Okay.
I click continue and it's justconfirming what I just put in.
I'll confirm it.
And then the main thing is gonna beis asking my income, my adjusted,
um, modified adjusted gross income.
Now because everything is not taxedwhen I take money outta my HSA
no tax, when I take contributionsfrom my Roth, IRA no tax.
(29:03):
So I've been in a lot of, and some ofthe income that I am making, let's say
from a project that I'm doing, I canoffset a lot of that with my expenses.
So I can easily get my,um, modified adjusted gross
income down to about $25,000.
Now, that's not what I live off of, right?
But I'm, I'm, some of the sources thatI have are not taxable and not a part
(29:27):
of my modified adjusted gross income.
So I'm using $25,000.
And I go in here and it's telling me thatmy estimated subsidy is $822 a month.
So that's pretty darn good.
And this is about themaximum that you'll get.
If you put um, a number that's toolow, it's gonna try to push you to
(29:47):
Medicaid, which is a whole differentsystem where they may, um, depending
on the state, they may ask you toverify your income and your assets.
So, so you don't wanna getstuck in the middle of that.
So I want, I don't wantmy income to be too low.
So $25,000 is roughly the number Ineed to use to get the maximum subsidy.
So most of the plans that I look at, um,through my exchange, um, in the county
(30:11):
that I live in, in the state of Ohio, issomewhere around seven to $800 a month.
Meaning that I very well could get a planfor $0, but right now I'm paying like $23.
So this is a pretty good plan ifCadillac plan $500 a deductible
and then $1,500 max out of pocket.
So we did that in lessthan two minutes, right?
(30:33):
So check it out foryourself, for your state.
Just go to healthcare.gov/um, c plansand that will allow you to put in minimal
information so that you can, um, geta sense of what type of tax credit you
have or if you don't even really careabout the subsidies at this point, you
can skip all of that and go straightto, let me just see the plans, let me
(30:56):
see the providers to get a sense of how.
Mu how many options I have, uh,going through healthcare.gov.
So
any questions on that?
There is a question.
Um, Alicia wants to know, she, uh,people who have a VA coverage, um, are
they allowed to use the a CA becauseit they not TRICARE or Tri West and
(31:16):
not retired military, but VA coverage?
Yeah, it would tell you thaton the, when you go in, um,
healthcare.gov, I don't think so.
It, I, there's a question thatasks, are you on Medicare chip or
do you have it through an employer?
CHIP is Children's health insuranceplan, but I've never seen it
(31:36):
ask, um, about VA or anythinglike that, so I don't think so.
But it takes you through a littlewizard, just like TurboTax and it'll
ask you all those questions, but I'venever, I don't ever recall seeing
anything about the va, so, yeah.
Okay.
Anything else on that?
(31:56):
All right.
I just wanted to show youhow quick and easy that is.
I'm an advocate of doing yourown research, um, and looking
at things for yourself.
Um, generally if you're, you know,online, you know, on YouTube or social
media or whatever, in a group, they aretalking about their situation and it's
always gonna be clouded by their biasesor by their, um, their own situation.
(32:23):
And so just take it with a grain of salt.
Um, sometimes it's a great startingpoint to say, I'm curious about this.
Lemme go dig into it for myself.
That's what I ended up doing a lot.
Okay, so 65 to 75, weget into the older years.
This is where you're gonna think about.
So security, Medicare, you know, andbefore, uh, this is before your RMDs, but
(32:47):
when you have to really start looking atyour numbers and what is subject to RMDs.
So as I mentioned, 85% of yoursocial security benefit is taxed
and for most people they are abovethat 20 something thousand dollars
a year income threshold becausethat was not adjusted for inflation.
So, all right, so I wanted tohighlight the Medicare surcharge
(33:12):
and here's what it stands for.
Income related monthly adjustmentamount, that is a mouthful.
So I don't even like to say that.
I just call it a Medicare surcharge.
So just so you're not too afraid ofthis, I feel like there seems to always
be this huge effort to avoid them.
Well, you gotta be making a decentamount, have a decent amount of money
coming in for sure, and it's really notthat much when you start to look at it.
(33:38):
So I'm gonna show you the charthere, and I have highlighted
in green that very first row.
So if you're single.
You need to have anincome of over $106,000.
That's your modifiedadjusted gross income.
So that's before, that's afterdeductions and all of that.
Uh, for 2025, the amount, uh, forPart B, which, you know, takes care.
(34:00):
It's like regular healthinsurance, medical insurance.
But, um, it's $185.
So if you're a married couple, youhave to be making more than $212,000
a year in order to, to have that,um, Medicare surcharge kick in.
Now if you go to this, um, second,um, second or the second row
(34:20):
here, so you only start paying.
So like if you are between 106 and ahundred, th $33,000, the extra amount
that you pay is only $13 more a month.
Nobody likes to pay that.
But you are, you know, onthe higher income scale.
And then this is a chart that goesthrough every, um, income bracket to
(34:43):
tell you how much more you would pay.
So these aren't crazy amounts that youwould pay even if you have to pay it.
Now, um, the Medicare surcharge,they look back two years.
So keep that in mind.
That's why looking atthis roadmap is helpful.
'cause you gotta say, okay,what happened two years ago?
(35:04):
What did my income look like?
Now, there is an exception if youwere working, because obviously
if you were working your income.
Does not reflect you as a retiredperson and being on Medicare.
Right.
So, um, there, I think there's like aform you can fill out for an exception,
but like, if you did a Roth conversion,that's typically not a valid exception,
(35:26):
but if you were working, you know, um,two years ago and you're just retired,
um, you know, you wanna fill that formout and there's, um, information on that
too, but I, I guess I just wanted toshow that you know, what income you need
to be above to even be subject to it.
And if you are subject to it, howmuch more can you expect to pay?
(35:47):
So these are just realistic numbers.
Okay.
Any questions on that?
Just a quick question, because myhusband's retiring at the end of June.
Okay.
And in considering the Medicare surcharge,I think we were told to fill out the
form right away and submit it now, butI thought they, they looked back two
(36:09):
years, two years ago and that's it.
Or do we put, in the exception thatwe're both retiring this, this summer,
what I have, um, my understanding isthat you can't even file for an exception
until you've actually been billed forit through the IRS or the IRS of R Yeah.
That, that is my understanding.
(36:29):
Okay.
Um, that's probably wortha little more digging.
So that means that you can'treally be proactive except to know
that you may expect this notice.
That your Medicare is gonna be more, andthen you respond and, and, and they'll
probably have the form number that youneed to fill out, um, for an exception.
And then you send that in andthey, and, and that's, um, and that
(36:50):
would be the most common exception.
It's like, who's thinking two years?
You know?
Um, you know what, thinkingabout this surcharge, you
know, two years prior, right.
So, um, so yeah, I do believe thatyou have to get billed first and
then you can do the exception,but that's worth digging in tho.
Those are just my first impression.
(37:11):
Any other questions onthe Medicare surcharge?
Well, let's circle back.
So is there ways to pay this,um, out of your HSA and have tax?
Like is there any other ways?
Benefits, right.
If you, if you are stuck with this,
you absolutely can't.
Well, and, and it's when you havethe higher premium for your Medicare,
that's just your Medicare premium.
(37:31):
So since you can pay Medicare premiumswith your HSA, then yes, that can
cover, that will cover this because nowinstead of saying $185 a month or for
the year, then it'll save $259 or $370.
So yes, you can use it foryour HSA, which is great.
And the other nice thing is whenyou need to provide a receipt, you
(37:53):
know, with your taxes, you need areceipt for any, uh, anything that
you're pulling out of your HSA.
This is a good way because normally.
It's just gonna show up at,you'll get an annual statement
of what you paid for Medicare.
So all you need is that annual paymentor that annual statement, and that's your
receipt for the year that you covered,you know, these HSA distributions
(38:13):
with your, and you can use a, um, youcan't use a credit card if you are,
um, already on Social Security, soyou can't use a credit card for that.
But if you are not on Social Securityyet, and you are on Medicare, you should
be able to cover this with a credit card.
So I don't know if they would charge afee or not, but, um, not many people do.
But again, once you get on SocialSecurity, they're gonna have it deducted
(38:36):
from your Social security check, butyou will still get an annual statement.
I, it was a 10 99 SI think, where it'syour annual social security statement.
It'll show any taxes that were taken out.
It'll show the portion that wasMedicare that was taken out.
And, um, that's a very easy documentto include with your taxes for that
year to confirm those distributions.
(38:57):
Uh, from your HSA,
I know we're, we're rounding upto the nearing the end of our
discussion, but normally at thetop of the hour before we wrap.
Mm-hmm.
Yeah, we normally pause for a grouppicture and we've Oh, let's do that.
Yeah.
We've had a couple of folks drop off.
So Sandy, we could grab a goodpicture with those that are left.
This has been really exciting, Jackie.
(39:19):
So do
you want me to
stop share?
You don't, I don't think you have to.
You.
So you don't.
Okay.
Okay.
The way, the way that this works,uh, I am using the group photo app
within Zoom, and so what's gonnahappen for anybody who's new?
We have some new folks.
Okay, great.
I'm gonna, I'm gonna hit the buttonthat says Take photo, and it's
gonna pop up on your screen andit's gonna ask for your permission.
(39:39):
And Zoom is wonderful becauseas soon as you click that
button, it snaps your photo.
So wherever the heck you werelooking, that's the photo it takes.
Um, so it's really fun for people.
Uh, I wish there was a delay or something,but, uh, just know that it'll pop up.
If you don't want your picturetaken, say no, it'll pop up and
ask you, but if you are not oncamera, it will not take your photo.
(40:01):
So if you would like to be inthe group photo, this would be
the time to turn on your camera.
You can turn it back off when we're done.
If you do not want your picturetaken, then you can either turn off
your camera or you can just say, no,you don't agree to take the photo.
Okay.
So give a, a folks a couple ofseconds to pick your, pick your
thing and then powder your nose.
(40:22):
Yeah.
And then I'm, we'll do two, um, sothat we have, uh, two to choose from.
All right.
So here we go.
We're clicking Take photo.
It's building.
It's building.
I,
(40:44):
all right, I'm gonna download this one.
And now we're gonna do it again.
Okay.
One more time.
Get my apps back here.
Okay.
(41:04):
Ready?
Number two.
Thank you Sandy.
And thank you for allowingus to interject Jackie.
Yes, no problem.
That's cool.
I I love the group and, uh, taxes aren'tthe sexiest topic, although that was
(41:25):
one of my favorite topics for CFPs.
'cause it's, it is, uh, woventhroughout every financial decision.
Um, it, it could be an importantstuff and it could, I think it helps
you feel more empowered that youcan understand some of this stuff.
A lot of it is not as complicated asmany people have held it out to be.
(41:45):
And it just is great food for thoughtand allows you to kind of, um, plan
better knowing some of these rules.
So, um, so yeah.
Can.
Uh, taxes are probably not as sexy atopic for anyone else but for this group.
Okay, great.
They're very exciting.
Great, great.
It's something that comesup almost every month.
(42:06):
Yes.
Awesome.
Awesome.
So hopefully I got to answer some ofthe questions and we only have a couple
more little things that I wanted to add.
Um, sometimes this doesn't gettalked about, but once you turn 65,
your standard deduction increases.
So as a single, uh, the normalstandard deduction is 15,000.
You get an extra $2,000 a year, uh, todeduct as part of your standard deduction.
(42:28):
So that takes it to 17,000.
And then you can see the married couplefiling joint married, couple separate,
and then uh, head of household.
So you do get, um, a little bettertax break there where they're
realizing and they say the reasonis to help with medical costs
or whatever as you get older.
So that's another message that, uh,medical costs do increase as we get older.
(42:53):
So the IRS is helping out,uh, 65 and older There.
Uh, let's see what else you got here.
So then 75 is just the last one.
Uh, we, we did talk about, um, most ofthese, but, um, let's see, what else
did I, yeah, I just wanna show the, um,the qualified charitable distributions.
So just generally, um, the IRS doesallow, if you're at, if you're at least
(43:18):
70 and a half, you're able to donateup to $108,000, and that's in 2025.
Okay.
If you are 73 right now, and you,um, are subject to required minimum
distributions, they will count yourQCD toward your requirement or required
(43:38):
distribution and included a linkthere so you can read through that.
Um, if anyone's close there or ifthey have someone in their life
and you know, mom, grandma, uh, youknow, aunt, uncle or somebody, the,
this might be helpful for them.
Um, but this is something that you cando, you know, once you're in your, your
older years and somehow those RMDs arestill way bigger than you anticipated.
(44:00):
Okay.
Um, yeah.
So this, this is, there's been somechanges with the RMD ages, so I
wanted to clearly show this chart.
Um, so this is requiredminimum distributions.
Um, again, you can go to dinkydown.net and you could play
around with it a little bit.
But, um.
If you are, if you were born after1960, I'm assuming most people
(44:25):
on this call probably was bornafter 1960, your required minimum
distribution is not until age 75.
So these days mostly age 75.
So I'm just going to click this.
My favorite, uh, dickie town.net.
So if you wanna play withyour RMDs, you can go here.
Um, I put in 2040,that's when I turned 75.
(44:49):
Um, you can see here, age 75 and 2040.
Um, I, I faked my, um, birthdate, butI put 1965 and I put, let's say, you
know, you have $101.5 million whenyou retire, let's say at 65, and in
10 years, it's double to $3 million.
(45:10):
Okay.
And you haven't been able todo Roth conversions and it just
grew in your traditional IRA.
Okay.
Um, I put, my hypotheticalgrowth rate is about 6%.
Normally I use about 9%, but as youget older, you know, that becomes
more conservative, uh, with your mix.
And so this will show, I'mgonna view the full report, what
(45:32):
you're gonna be required to take.
So you're gonna be required totake 120, almost $122,000, okay?
Out of your, uh, traditionalIRA, not to mention that you're
gonna be getting social security.
Possibly a pension or something like that.
So this may be more than what youneed and you're in the, this puts
(45:54):
you just, this alone puts you in the24% tax bracket as it stands today.
So this is what people don't want.
So imagine if this was $6 million, sonow you gotta take out two 50 almost.
So this is the worry thata lot of people have.
And I always say, you know,this is a rich person's problem.
So if you got more in an IRAthan you want, then that's great.
(46:17):
You've got more than you need.
So that's a good problem to have.
Um, but yeah, so this is anotherreally cool calculator where you
can mess around, you know, withthe numbers and things like that.
So you have an idea.
You might say, you know what, Idon't wanna be taking that much out.
You know, what if I could get mydown to one and a half million
dollars, you know, now you're onlyhave to having to take out 60,000.
(46:41):
But again, that's added to whatyou're getting is social security.
And this is just one person ifyou happen to be a married couple.
So you can play around.
Yeah.
Jackie, if you
wanna elaborate on that, therewas a question about, you
know, how RMDs work, right?
Husband's older than, than, uh, the wife.
And well, how is RMD per,you know, per person?
Is he required to do it?
Uh, but not me becausehe's 75, but I'm not.
(47:04):
Yeah, so, um, there's anoption in the calculator.
Um, if your sole beneficiary isa spouse, you can click that and
then ask for their birthdate.
So you could put that in.
Um, it really doesn't change a whole.
Here's where it changes is if your,that spouse is 10 years younger
than you, that's the only thingthat really makes a difference.
(47:28):
So if your spouse is 10 years younger,then it will start to change the numbers.
Let me see here.
Uh, if it had anything else on it, um,
yeah, like here it says it's sobeneficiary, a spouse, and more than
10 years younger than the owner.
So I put no there, but if you put yes,it will show you, um, what it would be.
(47:49):
Um, let's see.
Okay, so if I change this to wherethis person was born in 1982,
we're gonna see the number change.
Okay.
Before it was 60 do 60,000.
So if I change it to 1982, nowthe distribution's changed to 50.
Yeah.
(48:10):
And that's why it's cool todo a calculator because you
instantly get your answer.
And so if I go to view report,you could see that I selected yes,
is the sole beneficiary espouseand more than 10 years younger.
And I put, yes, that changed the number,but I think that's the only thing that
really makes a significant difference.
(48:30):
So, yeah.
Great calculator to pay play around with.
If the spouse is lessthan 10 years younger,
it, it doesn't change it 'cause Okay.
'cause, um, 'cause yeah.
Um, if, if your spouse is older or lessthan 10 years younger, it, it didn't,
it didn't change the number, but I,because I was plugging in and that's
how I figured out, okay, I forgotabout that 10 year rule honestly.
(48:50):
But, you know, dinky town, youknow, they had a line for that.
Um, but yeah, you can plug in allkinds of numbers and decide, you
know, what you wanna do there.
Uh, let's see what else we got here.
Okay, so that's, that's, um, thatcovers most of the, um, presentation.
And I am, we can, you can askwhatever questions I can hang on for
(49:10):
at least another 20 or so minutesif anybody wants to hang around.
But, um, I'm gonna just show theseslides of, um, and again, I'm gonna
share the slides, but this is justsome of the guests that we've had that
talked about some of the topics wecovered where we did a really deep dive.
One of my favorite is the last one here,estate planning with Jenny Rozelle.
(49:31):
She is very funny.
She's a young lady.
I think she's in her thirties orwhatever, but she's very good.
She has a podcast called The Legal Tand she talks about, um, cautionary
tales when it comes to estate planning.
She talks about, um, celebrity,you know, uh, estate plans.
Um, the most recent one shedid was on Jean Hackman.
Um, again, she's, she's only focusingon the estate planning part of it.
(49:54):
Um, so she's not diving into the tragicthing that happened with him and his
wife, but, um, so, so there's that.
And, um.
For me, uh, this is five for Dummies.
I do cover taxes intwo different chapters.
Chapter five, understanding How Taxeswork and, and Credit Credit scores work.
But then 15, I really dive intoit, um, asking that big question,
can you really control your taxes?
(50:16):
And after today's presentation,hopefully you can say, yes,
there's a lot of things I can do.
And, uh, there's a QR code if youdon't already have the book or
interested in getting the book thattakes you directly to, um, Amazon.
Um, and then lastly.
I love this.
So I put together some cool womenthat talk about taxes, six of them.
(50:37):
Um, I wanted to just shout out somewomen that, you know, Christine
Bins, everybody knows her.
A lot of people may know Jean, uh,Chasky, but there's some other women
here that I think are doing a great job.
So I put their YouTube channels there.
Um, we wiser Avante.
She's a CFA and a CFP.
Erin talks money.
Oh, she's really good explaining topics.
Um, so I, I've been subscribedto her channel for a long time.
(51:00):
And then, um, Natalie spoke at an economytwo years ago and her, uh, podcast is real
estate is taxing, so that's pretty cool.
Uh, Hannah Cole on the otherside with the sunlight there, she
talks a lot about creatives andsmall business owners and taxes.
But these are just some additional, Iwanna always like to highlight people
(51:21):
that, you know, might elaborate onsome of these things or do a great
job of talking about, um, this topic.
Um, and then I'll just, I'lljust leave this slide up.
This is how you can contact meand the podcast catching up tophi.
We'd love for you to, you know,join our Facebook group if you
want this type of dialogue.
Um, we'd love for you to leavemessages or of course to leave
(51:42):
a review, um, or, or email me.
Um, but this is how you cancontact me in all kinds of ways.
So, miss Sandy, you had your hand up.
What's up?
Well, I did, I, it was kind ofan accidental thing, but I do
have a question in the chat.
So Jennifer is asking a great question.
Um, is there another way to buyyour book that not, is not through
Amazon or is that your preferredway for people to buy your product?
(52:05):
No, Amazon is not my preferred way.
It's just the most common way.
Um, there is a website called Indiebooks or indie something where
you can buy books and they comethrough an independent channel.
Okay.
I IndieBound I think it's IndieBoundis the name of it, but that's, and I,
and you know, I have been asked thatquestion, especially this year about,
(52:29):
you know, purchasing, uh, that's noton Amazon, so that's lab was old.
No, I think that's great.
Thank you, Jennifer.
I think that's lovely too because you're,you know, how can we best support you?
Right, right.
Thank you.
Yeah, for sure.
Any other questions, ladies?
Or any other pieces we wannago back and, and revisit?
Yeah, we've lost quite a few 'causeit's uh, you know, getting into the
(52:52):
midday, but there's still a few here.
Yeah, yeah.
Um, the ones that hang aroundusually get all their questions
answered 'cause it's fewer people.
But I'm happy to either revisitany other area or dive into
anything that didn't make sense.
Um, I. Let me know.
Well, I don't have a question,but I do have to say two things.
(53:15):
One of the things that jumped out tome the most here that is, so I think
relevant for this group of ladies isthe planning for what, you know, some
of us, we just get so caught up intax bombs and all of this and all of,
and washing the market and not ableto execute because we're so hesitant
to make a, a mistake for somethingthat's gonna happen 20 years from now.
(53:38):
But I love how you put it up there,Jackie, and showed if in fact you have to
pay taxes on the back end, or if you are,uh, beneficiaries and inherit and have to
pay taxes, it's a good problem to have.
Right.
It it real, it really is.
Um, and, and thank you for saying that.
And, and you know, I just wannaacknowledge that, you know, feeling
worried or concerned, whetherit be the stock market taxes
(54:00):
or whatever your situation is.
'cause you've got these macro things,you know, the stock market, we don't
have any control over that terrace.
We don't have reallyany control over that.
And then we've got the micro things,our situation, you got laid off,
laid off of a job spouse or a familymember had a serious health issue.
Those are things that really matter.
(54:22):
So you can, you know, focus onthe things that you can possibly
change or you can make an impact.
Mm-hmm.
Um, but yeah.
Um.
Uh, just acknowledge that, you know,feeling anxiety, feeling worried.
Those are valid feelings.
You know, you, you shouldn't say, I,I shouldn't feel this way, whatever.
Well, it makes people feel thatway, you know, process it in the
(54:46):
best way that makes sense for you.
You know, for some people it mightbe a glass of cabernet, you know?
Mm-hmm.
For some people it might be a going, forme, it's going for a hike or walk for
some reason when I'm getting fresh air.
Mm-hmm.
Especially this time of the year, I justfeel better and I, I'm, I focus more on
(55:07):
maybe creative things that I'm working on,like getting ready for this presentation.
You know, this made me happy, you know,I'm not thinking about the stock market,
you know, so, um, so acknowledge howyou feel, um, those feelings are valid.
Mm-hmm.
Um, and start to educate yourself andmaybe learning some of these new things.
Can one, help you focus on somethingelse that you do have control over.
(55:30):
And two, the fact that you aredoing something to plan, you
know, for the good, for long term,hopefully generations to come.
So the things that you do withtaxes or whatever, it's going
to have a lasting impact.
It's not just you normally,there's other people in the
chain that are coming behind you.
(55:52):
Thank you, Jackie, for joining usand spending some time with all of
your knowledge and your experiences.
Uh, ladies, let's give Jackie avirtual or verbal round of applause.
Thank you, Jackie.
Thank you ladies.
This is awesome.
Great job, Jackie.
Oh, awesome.
Thank you so much.
Hi there, I am Jackie Cummings Koski.
I'm author of the book Firefor Dummies and your co-host
here on Catching Up Tophi.
So this is part two of a two partseries about women and taxes.
So if you didn't listen to lastWednesday episode, make sure
you go back and listen to that.
And then come back andlisten to this part too.
(00:22):
So this was a session that I didwith the We Wealth Collective and
we stands for Women Empowerment.
And this was a group that gottogether after the economy conference
a few years ago and decided theywanted to keep the learning going.
I. Absolutely love that.
So he invited me to comein and talk about, taxes.
So we have a great discussion,tons of wonderful questions.
(00:44):
I even had to, think through manyof these considerations myself
when I retired back in 2019.
I hold the CFP credential andI'm also a financial educator.
But just remember that everythingwe talk about today is for.
Information and education only.
I am not a tax professional, but Ithink you're gonna love part two.
(01:05):
So tune in.
(01:37):
So let me zero in on a few things.
So, um, so I wanted to mention somethings that are all stages before
I kind of dive into, um, beforeI dive into those other sections.
So, at any point, these are just some taxconsiderations I want you to think about.
So when it's a primary home,you get $250,000 per spouse.
(02:00):
Mm-hmm.
The profit for the sale of a home.
So if you brought, so Kim, I knowyou're in New York, but so it, this
is especially a big deal if you'rein a high cost of living area, okay?
Where housing prices go up fast.
So 20 years ago, if you brought a housein Manhattan or Westchester, something
like that, you brought it for a hundredthousand dollars way back in the day,
(02:24):
and now it's worth a million dollars.
When you sell it, you gota $900,000 profit, right?
Uh, that's a little bit of anexaggeration, but the first
$250,000 is completely tax free.
So the IRS loves homeowners, all right?
I barely got a $250,000 game,but that, that is per spouse.
And there's some, um, provisions aroundthat where you have to have lived
(02:47):
in the house like I think two of thelast five years and things like that.
All these IRS uh, rules here has a wholelist of things that you have to follow.
Um, and that's when I would, uh,definitely point you to the, uh, IRS code.
So, brokerage accounts, uh,we've talked about this already,
but the capital gains is.
(03:10):
Capital gains tax is much,much lower than income tax.
You are either in the 0%,15% or 20% tax bracket.
The most you pay is 20%, and I thinkthat is on a really, really high income.
Um, and remember that when it comes tocapital gains, you're only paying the
tax on the growth, not what you putin, which is called you know, basis.
(03:32):
That's what you put in.
Um, and then, uh, don't forgetabout your dividend income.
So if you have a brokerage account,when dividends are paid, you're
taxed that year, whether you haveyour dividends reinvested or not.
That's just how it works.
Um, and you'll get your statementfrom your broker, um, the next year
for the, for the previous year.
Jackie, there's a question in thecomments relating to the property, the
(03:54):
increasing property and at $250,000.
Yeah.
Uh, I think someone indicates that theybought their apartment as a single person
25 years ago, and then they got married.
The property has increased in value.
Do they get the capital gains?
For both them and theirspouse or just themselves.
Yeah.
The rule is gonna be, well, and it,it's gonna be also like how it's
(04:16):
titled like who owns the property,assuming that both of you own it today.
Mm-hmm.
Um, the rule is, I, and, and again, doublecheck the IR RSS on this, but, um, I think
the rule is you have to have lived in thehouse, um, two out of the last five years.
So if you were both a couple thatboth owned it, you're a married
couple, then that should count.
(04:38):
But I, if you think that thisapplies to you, definitely, um,
check the, um, IRS code or, youknow, whatever your trusted resources
to make sure you have the details.
Um, but it's okay that you broughtthe house before you got married.
That's fine.
But you still gotta look atwho owns the house today.
And then a really good question,I think says, what if your,
(05:00):
the property is in your trust?
If it's in your trust.
So trust has some tricky things.
Um, if it's in the name of the trust.
Mm-hmm.
My, I, I would have to doublecheck this, but my inclination is
that if the trust owns it, thenthat means you don't anymore.
(05:21):
Ah, if it's in the nameof the trust, you don't.
Ah, and, and trust fallunder very different rules.
And sometimes the IRS willspecifically exclude a trust.
They'll say it has to be, yeah.
Yeah.
So, and, and that's why when youare setting up a trust, you do
have to consider, you know, theprovisions that might negatively,
(05:45):
things that might be negativelyimpacted when you're doing a trust.
And that's, and, and normally whoeveryou're working with, the setup,
the trust, they should advise youon what things make sense to go in
the trust and what things don't.
So, yeah, that was a good question.
Yeah.
And then one other questionrelated to the property.
(06:05):
Okay, no problem.
A lot of discussion.
Good statement that says, uh, isn't therea millionaire's tax on property sales?
If so, how does that affect the owner
a millionaires tax?
Mm-hmm.
I haven't heard that term,
and I think that's the thing with it.
You hear a lot of thingsfloating around on the internet.
Uh, you hear things in conversation.
(06:26):
It's great to have an experton the line that can tell us,
is this true or is this not?
Yeah.
So I haven't heard the term millionairestax, so if she wants to explain what
that is, I'm not aware that it's an IRSrule, but there's a lot of, you know,
um, just common, you know, uh, un Iguess, uh, unprofessional type terms or
(06:48):
layman's terms that we use, but I haven't
heard that one before.
I wonder if it's, uh,the Mansion tax, right?
So there's, there's a one timetax transfer in certain states
and it's for properties thatare over a million dollars.
Um, but Stacy, you can add more in thecomments if you know more about that.
She did.
She said if, if your gainis over a million dollars,
(07:10):
if your gain is over amillion dollars, let me think.
So I have to go back to my CFP days 'causeyou know, that was a doozy of an exam and
they probably asked questions like that.
Right.
Well listen, this, this, thisgroup Jackie will probably hit you
with some questions that are Yeah.
And I Yeah, that, that you can
come
back to us with those answers.
Well, and here, and here's the thing, I, Ilearn a lot too when I do stuff like this.
(07:34):
I haven't done a good job if there hasn'tbeen something that I was able to learn.
Right.
So, um, I, I don't know that there's,um, an over, if it is, it is a
very small nuanced, um, provision.
Oh.
But I'm not, I'm not aware of anIRS, uh, anything in the IRS code.
(07:55):
'cause I know that we had todive, somehow, we did a really
deep dive into this whole primaryhome, um, uh, IRS provision.
And, and I guess they alsotry to focus on things that's
gonna affect a lot more people.
So over the a million dollars is probablygonna not affect a ton of people.
But, um, I'm not sure thatthat's in the IRS code.
(08:17):
Um,
that's good to know,
but it may very well be, but uh,from what I've seen, I don't recall.
Um, okay.
Anything else beforewe go to the next one?
Nothing more.
I think we're good to keep rolling,but keep the questions coming.
This is a great discussion, ladies.
Yeah, very good.
Please, please keep them coming.
Stump stump Jackie, because that meansI'm learning too, so I appreciate that.
(08:41):
Um, so with the HSA, we talkeda little bit about this.
I always consider that there'sfour tax benefits, not just three.
The additional one that most peopledon't talk about is the fica, which is
your social security and Medicare tax.
Uh, I think it's like 7.65%.
Uh, if you're, you know, working foran employer so it grows tax free, um,
or is tax free and out and while itgrows and you can remember that you can
(09:04):
invest in your HSA, uh, just a littletip right now with the market down, as
big as it is, if you have an HSA layingaround that's not invested or one that
you forgot about, it's a good time tolike get that and get it invested if
you want to use it for the long term.
And remember, it's tax free whenyou do take the distributions as
(09:25):
long as you are using it for, um, aslong as you're using it for medical.
Okay.
Um, and I guess another thing that'sworth mentioning, after 65, you
can take out, take money out ofyour HSA, you'll still pay taxes.
Um, well, you could takeit out for anything.
If it's not medical, you will pay taxes onthat, but you won't pay the 20% penalty.
(09:47):
Um, I what?
I used to think that that wasa really cool thing to do.
Oh yeah.
65. I could take all my money outand all I gotta do is pay the tax.
I won't pay the penalty.
And I'm thinking youcould, but why would you?
Because as we get older, over 65,we got a lot more health issues.
So you probably won't have a problemfinding medical, dental, vision
(10:10):
or hearing expenses that you canuse your HSA dollars for tax free.
So why use it on something that is taxed?
But that is the rule after 65 no penalty.
Okay.
That's the HSA and Italk a lot about HSAs.
That's one of my little extra things.
So anybody got advanced courses on HSAs?
I got you.
(10:31):
Okay.
Um, small business side hustle.
Some people think small businesses gottabe where you have employees and all that.
I've had my little teeny tinysmall business, um, since 2013.
I was still working and somebody told me,or I was probably reading something where
they were like, well, everybody shouldhave a business because you can, um.
(10:52):
There's a lot of expenses that become taxdeductible when they otherwise are not.
Okay.
So even if I, and I, I didn't make aprofit on my business 'cause I had enough
expenses to always offset any income.
Like I would do a, a talk or workshopor something here and there, but I
was working so I couldn't do it a lot.
But I always had enoughexpenses to offset it.
(11:13):
So my profit was zero.
However, I could expense things like mycell phone, my internet, um, my computer
back then when I printed out stuff,printing paper, um, you know, uh, mileage.
So I was able to expense thingsthat I normally would not be able
(11:34):
to expense so you can too, soyou can deduct those expenses.
That was very helpful for me.
Even after I retired.
I think the first two years afterI retired, I still had zero.
Now there's that misnomer out there.
So let me clear that up, that if youdon't make a profit for three years,
then they're gonna consider it a hobby.
(11:54):
That is not true.
Back in the day, there was somethingto do with race horses and that's
how that misnomer got out there.
But all you gotta show is a profit motive.
And that typically means, Hmm, you madeup business cards, you got a website,
you are out there, you know, in thepublic putting your business out there.
(12:16):
Nobody is.
The IRS isn't gonna come audit you becauseyou didn't make a profit in three years.
Because if you think about it,most businesses it could take way
longer than that to show a profit.
Right?
You're just getting off the ground.
So I, at the time, I didn't knowthat, so I'm like worried that
the IRS was gonna come after meand that they were gonna audit me.
(12:37):
And I talked to, it wasactually a five person.
Um, I was at, I think there's a Campmustache here in Cincinnati that
will happen at the end of the year.
And he was an IRS agent.
So of course I picked his brain andasked him all kinds of questions.
And that was my main question.
So if you have a small business, itdoesn't have to be any huge business
or anything like that, or if you gota side hustle with 10 99, you can
(13:00):
very well expense a lot of deductionsthat you otherwise would not.
So that's at every phase.
Mm. Um, inheritance of accountsthat are not retirement.
We talked about the brokerage account,but um, also, um, if you didn't
know if you are the beneficiaryof, of insurance, that's tax free.
So as long as it's not a retirementaccount, typically what you inherit
(13:22):
is gonna be completely tax free.
So, uh, with a house, a housealways also gets a step up in basis.
Like if you pass away, you gotprofit on the house, doesn't matter.
Um, it.
The whole house will go to, you know,whoever the new owner is, whoever
inherited it completely tax free.
You don't have to worry about taxes there.
(13:43):
Now, of course, if it continues to growin value or whatever after the person
passed away, then, then that would count.
But it's just nice to get that,you know, step up them basis.
Okay.
Yeah.
Um, and here's that termagain, again, step up in basis.
That's only what you are starting with.
So when you pass away, it's a, if it'sa brokerage account, if it's, um, you
(14:04):
know, a home or property or somethinglike that, the person that's inheriting
it, they don't pay any taxes on that.
And starting point is the valueof it on the day you died.
So these come into play at every phase.
Okay.
Any questions in the, in the chatwe need to address before I go on?
(14:28):
Nothing, nothing else, butif there is anything, oh,
you found something, Kim?
There was one with regards tothe HSA, you could step back.
Someone indicated that they don'thave an HSA, what their spouse does.
Will he be able to use it forher expenses in the future?
Yes, and that's a very good question.
So when it comes to HSAs, you've gotrules that govern contributing to it.
(14:50):
So if he's on a single highdeductible health plan with an
HSA, he can only contribute asa single or the single amount.
Okay.
However.
There's another set of ruleswhen it comes to the tax portion
and the tax portion, um, is whatgoverns how the funds are used.
(15:13):
The funds can be used for anytax dependent, so regardless of
whether they're on his plan or not.
So if it's children, spouse, oranybody that is a tax dependent, he
can use those HSA dollars to cover, um,expenses, uh, for any any tax dependent.
So you're okay with that?
(15:33):
Yeah, that's a good question though.
And along those lines, I was alsohappy I got laid off in 2023 and
was happy to know that I could pay,uh, premiums Cobra out of, um, HSA.
That was a qualifiedthing, so Oh, yes, yes.
You know, so it's, it's a littlebut only if you're unemployed
and you're playing Cobra.
It's not like you can pay anypremiums, uh, at that point, but
(15:55):
good to have some flexibility.
Yeah, that's a very,that's a very good point.
'cause generally you cannot pay forhealth insurance pre premium, but you
can, in your situation where it wasCobra, um, Medicare premiums, you can,
so every single provision here, there'sa long list of like, details that you,
you would wanna know or exceptionsthat could be helpful, like in the
(16:18):
case of, you know, COBRA premiums.
So let's ask, let me go,let me ask another question.
Mm-hmm.
And it may be complex with HSA, ifyour spouse has it and you do not.
You are the person that carriesinsurance for the family and you
lose your job and have the ability topurchase through Cobra, can you use
those HSA dollars to pay those COBRApremiums because it's covering both,
(16:42):
correct.
You, you should, yes.
You should be able to use it to cover.
Yeah.
Yeah.
I just learned something new.
Yeah.
Because, um, at the time, uh,again, there's almost two set of,
uh, provisions, um, and, and twosets of governing, I guess bodies.
So when it comes to distributions,the governing body is tax rules.
So for distributions, yes.
(17:03):
The tax rule says that you can takeit out to pay whatever that plan was.
And if you're covered bythat plan, then absolutely.
Yep.
Okay.
Let's see here.
So the pre 55, and like I said,we, so we did a lot of this ahead
of time, so there's not much to.
To elaborate on here.
(17:24):
Um, but again, pre 55, just a reminder,I consider this the fire crowd.
Um, these are the areas, Rothconversions 72 T, again, which is
substantially equal periodic payments.
Um, this is, you know, gonna get you,uh, allow you to avoid the 10% penalty
where you set up regular payments.
Um, the a CA subsidies,we talk about that.
(17:45):
Um, HSA contributions and distributionsare a consideration at this phase.
And then of course, if you're earningany money through a, whether it's a
part-time job, you know, 10 99 contractwork, small business, all of that.
And then the tax harvestingof, uh, brokerage accounts.
So, uh, things I wanted to remind here.
(18:06):
So 72 t someone a whensomeone asked about that.
Okay.
So I figured I would getsome questions about that.
So, like I said, I set mine upin December and I consulted three
or four different calculators.
They're out there to make it super easy.
Um, if you really wanna diveinto this, the best resource
I found is 72 t calc.com.
(18:27):
We also did like a two part series onthe podcast, but, um, my favorite place
for a calculator is dinky town.net.
They have every financialcalculator you can think of.
So, um, so let me, so I say let's play,that's when I'm gonna try to go live and
we're gonna throw in some scenarios here.
(18:49):
So if I click on that, um, can you tellme if you are seeing my internet browser,
or are you still seeing the presentation?
Nope, it opened in a new tab.
You're good to go?
Yeah.
Okay.
Very good.
So these are my exact numbers.
So when you're setting up a 72 T, youdon't have to use your entire IRA.
The smart way is to say, how muchmoney am I looking for annually?
(19:10):
I was looking for about $15,000.
So how much, how big does my IRAneed to be to throw off $15,000?
That was what I was solving for.
And this calculator does it.
All right, so I put in, um,the only thing I put in was,
(19:32):
let's see, so I ended up withhaving to do, or the math said,
there's a few different calculators.
So you can either choose to putin your monthly amount or choose
to put in the amount that the.
72 t needs to be.
So I just plugged in all the numbers.
This 5% that you see,that's the floor now.
So it makes it so easy.
(19:54):
You don't need the blah blah, blah.
You know, this interestrate, that 5% is the floor.
Now you can go to the IRS and youcan see what the interest rates are
that, that you're allowed to use.
Um, but I ended up usingthe 5% I put in my age.
Um, I didn't really need thebeneficiary age, but I, I'd
used the single life expectancy.
These are things I didn't even haveto think about it, put it there.
(20:15):
So, um, so once I got that in there,it showed me, there's three different
methods, but it showed me what Icould get based on each method.
So obviously this one won out,which is called the amortization.
That's always the best one.
But I'm gonna view the report 'causethat makes a little more sense here.
So it shows the result summary.
(20:37):
So it shows my first year of distribution,the account balance, how old I am,
you know, it fills in all this, themethod that I use and all of that.
So it, it just makes it easy.
So you really don't have to tie up a lotof money to do the 72 t. Don't think that
you have to tie up your entire thing.
Um, so I ended up, you know,getting about $15,000 a month.
(21:00):
But if I changed this, let's say ifI had, you know, a, a bigger account
where I needed more money, you know, ifwe, we can, you can play with this and
put in as many as you want, but let'ssay you started with a $500,000 one.
Okay, so that's gonnagive you $30,000 a year.
You know, um, Eric Cooper, youknow, he's done a 72 TI think he
(21:23):
was doing like around $15,000 ayear, and he uses it as his fund
bucket on top of his other income.
For me, this is my basic income 'causeI'm thinking about, you know, uh, um,
HSA subsidies, or, I'm sorry, um, aCA subsidies and things like that.
So this is a great calculator ifyou wanna play around with it.
Um, there's a few more that are outthere, but if someone's asking me, do
(21:45):
you have a good calculator for that?
I'm always gonna start with dinkytown.net because they have like
every calculator you could think of.
But this is, I I, I ended upusing three different calculators.
You know, I, I put together sortof like a little, um, kit when it
came to 72 Ts because if I evergot audited, I wanted to show them.
I used these three calculators.
(22:07):
Um, I had this, this is the amountof money I started with, here's my
brokerage where I set up the regularpayments and, and all of that.
So it's not that hard, especiallynow there's calculators, um, that
are online that make it super easy.
Um, you can, you know, run differentscenarios and on this page, dke town.net,
they do a good job of like putting detailsabout the provision and answering some
(22:32):
questions beyond just the calculator.
So they've got a lot of stuff in therethat can help you count back, you
know, they go through all of that.
So.
So there's that.
Um, I'm gonna attempt to flipback to my, let's see here.
So are you seeing my slides again?
55 to 60.
(22:53):
Okay, great.
Great.
It's working.
So again, um, we, we hit mostof these, but just to, as a
reminder, between 55 and 65, you'rethinking about almost the thing.
Same thing as a previous one,except now we're adding in, um,
the, uh, the rule of 50 and 55.
So I do wanna dive intothat a little bit more.
(23:14):
So the rule of 55, this was separationof service from an employer.
These only applied to employersponsored plan, not IRAs.
Okay.
So, and not HSAs either.
So it's 55 for everyone.
The IRS allows this provision, but keepin mind, just because the IRA allows
(23:35):
the provision, it does not mean thatyour employer is using the provision.
So you have to check with yourspecific employer to make sure that
they have this written into what'scalled their summary plan description.
Um, my company offered therule of 55, but there's other
people's employers that did not.
Now, if you are a public safety worker.
(24:00):
You get a five year bonus and the ageis 50 and they just updated this on who
is considered public safety workers.
That's been the big question, right?
So I listed all the public safety workers.
So if you're federal or state lawenforcement, correction officers,
customs and border protection, Ithink that's one of the newer ones.
(24:20):
Federal and private sector firefighters,air traffic controllers, and then
emergency medical services people.
I mean, typically you think thatthat would include people that
are in ambulances, whatever.
But you know, some, again, everythingthat the F puts in there, sometimes
it's left up to in interpretation.
(24:41):
So if you are an ER physician or youconsider a public safety worker, maybe,
I don't know, but it doesn't specificallysay that it's not, and it says that's
E it's emergency medical services.
So, so anyway, so some of thesecan be, you know, these are broad
and the IRS is not gonna putevery single detail into the code.
(25:03):
So if it doesn't specifically excludeit, then you know, it may be okay
because if you get audited, you knowyou need to have some type of case.
But this is how this separationof service rule of 55 or 50 works.
Any question on that?
Okay, good to go.
(25:23):
All right, so this is prettystraightforward and I think that
there's a lot of this out there.
Okay.
Um, the Affordable Care Act,somebody was asking about that.
So, um, they've got thisbeautiful lady on the front.
I'm like, I love to seethe women represented.
So I believe anyone headed forretirement before the age of
65, before Medicare starts.
(25:43):
Be sure to see what your optionsare when it comes to plans on
the healthcare.gov exchange.
You can look at that without signing on.
You don't need an account.
And I, and early on when I was closeto retirement, probably in my mid
forties or whatever, I was reallyafraid of the health insurance piece.
And so many people are, and I would hear,you know, I'd be in different PHI groups
(26:08):
and people would say, oh, it's horrible.
I'm paying $12,000 a month forit, or something crazy like that.
And somebody else willsay, oh, it's been good.
Um, I've been on it for twoor three years, or whatever.
And it took me a minute to realize that alot of what people thought had political
undertones, and it's like, I wasn'ttrying to make a political statement.
(26:30):
I just want like the facts.
And so I had to, and this is whatyou will end up doing as well.
I had to check for myself and I hadto do my own research to see, and,
and it's so, and it's hard to even saythat it's good, whether it's good or
bad, because it's very state specificand to a point, it's county specific.
So if you are in New York, I'veheard that the healthcare.gov or the,
(26:55):
um, the exchange is not that great.
They don't have a whole lot of options.
They don't have a whole lot of providers.
Well, Ohio, it's, it's great becausethere's a lot of different providers
with a lot of different plans, andI've been, you know, when I'm going
through, I'm almost seeing too manyplans, but I've been very happy with it.
So I'm gonna just click thisjust to show you guys, um, to
(27:18):
that you can check this out.
So if you go to healthcare.gov/c-plans,it takes you right here.
And the first thing it's gonnaask you is your zip code.
It's not gonna give youanything unless you start there.
So, um, I'm gonna put in a zip codethat I, I know is in my county.
I'm in Montgomery County, Ohio, right?
(27:39):
So now it will allow meto do a lot of things.
However, you can skip a lot of that.
Okay?
So if you do option two here, you answerquestions about your current plan,
your household, and things like that.
This will help me get to the plan.
Now, if you don't even care aboutthat, you just wanna see the full
(27:59):
price of plans, you can do that.
If you feel like you're not gonna.
To qualify for a subsidy and you justwanna have a sense of how many providers
are they, what do these plans look like?
What are the costs if I pay rack rate?
Okay.
But I'm gonna go here 'causeI wanna get an idea of what
my subsidy might do, might be.
So I put start, uh, don't havea plan id, so I'm skipping that.
(28:20):
Um, I'm doing it just for me.
Okay.
So it's gonna ask me a few things.
So I'll go ahead and put, and I didthis before, so I'm gonna go ahead
and put in my age, my, um, my sex.
Um, it asks you if you'repregnant or tobacco user.
I'm neither one of those.
They go, I'm none of those.
So I click none of those.
(28:40):
Okay.
I click continue and it's justconfirming what I just put in.
I'll confirm it.
And then the main thing is gonna beis asking my income, my adjusted,
um, modified adjusted gross income.
Now because everything is not taxedwhen I take money outta my HSA
no tax, when I take contributionsfrom my Roth, IRA no tax.
(29:03):
So I've been in a lot of, and some ofthe income that I am making, let's say
from a project that I'm doing, I canoffset a lot of that with my expenses.
So I can easily get my,um, modified adjusted gross
income down to about $25,000.
Now, that's not what I live off of, right?
But I'm, I'm, some of the sources thatI have are not taxable and not a part
(29:27):
of my modified adjusted gross income.
So I'm using $25,000.
And I go in here and it's telling me thatmy estimated subsidy is $822 a month.
So that's pretty darn good.
And this is about themaximum that you'll get.
If you put um, a number that's toolow, it's gonna try to push you to
(29:47):
Medicaid, which is a whole differentsystem where they may, um, depending
on the state, they may ask you toverify your income and your assets.
So, so you don't wanna getstuck in the middle of that.
So I want, I don't wantmy income to be too low.
So $25,000 is roughly the number Ineed to use to get the maximum subsidy.
So most of the plans that I look at, um,through my exchange, um, in the county
(30:11):
that I live in, in the state of Ohio, issomewhere around seven to $800 a month.
Meaning that I very well could get a planfor $0, but right now I'm paying like $23.
So this is a pretty good plan ifCadillac plan $500 a deductible
and then $1,500 max out of pocket.
So we did that in lessthan two minutes, right?
(30:33):
So check it out foryourself, for your state.
Just go to healthcare.gov/um, c plansand that will allow you to put in minimal
information so that you can, um, geta sense of what type of tax credit you
have or if you don't even really careabout the subsidies at this point, you
can skip all of that and go straightto, let me just see the plans, let me
(30:56):
see the providers to get a sense of how.
Mu how many options I have, uh,going through healthcare.gov.
So
any questions on that?
There is a question.
Um, Alicia wants to know, she, uh,people who have a VA coverage, um, are
they allowed to use the a CA becauseit they not TRICARE or Tri West and
(31:16):
not retired military, but VA coverage?
Yeah, it would tell you thaton the, when you go in, um,
healthcare.gov, I don't think so.
It, I, there's a question thatasks, are you on Medicare chip or
do you have it through an employer?
CHIP is Children's health insuranceplan, but I've never seen it
(31:36):
ask, um, about VA or anythinglike that, so I don't think so.
But it takes you through a littlewizard, just like TurboTax and it'll
ask you all those questions, but I'venever, I don't ever recall seeing
anything about the va, so, yeah.
Okay.
Anything else on that?
(31:56):
All right.
I just wanted to show youhow quick and easy that is.
I'm an advocate of doing yourown research, um, and looking
at things for yourself.
Um, generally if you're, you know,online, you know, on YouTube or social
media or whatever, in a group, they aretalking about their situation and it's
always gonna be clouded by their biasesor by their, um, their own situation.
(32:23):
And so just take it with a grain of salt.
Um, sometimes it's a great startingpoint to say, I'm curious about this.
Lemme go dig into it for myself.
That's what I ended up doing a lot.
Okay, so 65 to 75, weget into the older years.
This is where you're gonna think about.
So security, Medicare, you know, andbefore, uh, this is before your RMDs, but
(32:47):
when you have to really start looking atyour numbers and what is subject to RMDs.
So as I mentioned, 85% of yoursocial security benefit is taxed
and for most people they are abovethat 20 something thousand dollars
a year income threshold becausethat was not adjusted for inflation.
So, all right, so I wanted tohighlight the Medicare surcharge
(33:12):
and here's what it stands for.
Income related monthly adjustmentamount, that is a mouthful.
So I don't even like to say that.
I just call it a Medicare surcharge.
So just so you're not too afraid ofthis, I feel like there seems to always
be this huge effort to avoid them.
Well, you gotta be making a decentamount, have a decent amount of money
coming in for sure, and it's really notthat much when you start to look at it.
(33:38):
So I'm gonna show you the charthere, and I have highlighted
in green that very first row.
So if you're single.
You need to have anincome of over $106,000.
That's your modifiedadjusted gross income.
So that's before, that's afterdeductions and all of that.
Uh, for 2025, the amount, uh, forPart B, which, you know, takes care.
(34:00):
It's like regular healthinsurance, medical insurance.
But, um, it's $185.
So if you're a married couple, youhave to be making more than $212,000
a year in order to, to have that,um, Medicare surcharge kick in.
Now if you go to this, um, second,um, second or the second row
(34:20):
here, so you only start paying.
So like if you are between 106 and ahundred, th $33,000, the extra amount
that you pay is only $13 more a month.
Nobody likes to pay that.
But you are, you know, onthe higher income scale.
And then this is a chart that goesthrough every, um, income bracket to
(34:43):
tell you how much more you would pay.
So these aren't crazy amounts that youwould pay even if you have to pay it.
Now, um, the Medicare surcharge,they look back two years.
So keep that in mind.
That's why looking atthis roadmap is helpful.
'cause you gotta say, okay,what happened two years ago?
(35:04):
What did my income look like?
Now, there is an exception if youwere working, because obviously
if you were working your income.
Does not reflect you as a retiredperson and being on Medicare.
Right.
So, um, there, I think there's like aform you can fill out for an exception,
but like, if you did a Roth conversion,that's typically not a valid exception,
(35:26):
but if you were working, you know, um,two years ago and you're just retired,
um, you know, you wanna fill that formout and there's, um, information on that
too, but I, I guess I just wanted toshow that you know, what income you need
to be above to even be subject to it.
And if you are subject to it, howmuch more can you expect to pay?
(35:47):
So these are just realistic numbers.
Okay.
Any questions on that?
Just a quick question, because myhusband's retiring at the end of June.
Okay.
And in considering the Medicare surcharge,I think we were told to fill out the
form right away and submit it now, butI thought they, they looked back two
(36:09):
years, two years ago and that's it.
Or do we put, in the exception thatwe're both retiring this, this summer,
what I have, um, my understanding isthat you can't even file for an exception
until you've actually been billed forit through the IRS or the IRS of R Yeah.
That, that is my understanding.
(36:29):
Okay.
Um, that's probably wortha little more digging.
So that means that you can'treally be proactive except to know
that you may expect this notice.
That your Medicare is gonna be more, andthen you respond and, and, and they'll
probably have the form number that youneed to fill out, um, for an exception.
And then you send that in andthey, and, and that's, um, and that
(36:50):
would be the most common exception.
It's like, who's thinking two years?
You know?
Um, you know what, thinkingabout this surcharge, you
know, two years prior, right.
So, um, so yeah, I do believe thatyou have to get billed first and
then you can do the exception,but that's worth digging in tho.
Those are just my first impression.
(37:11):
Any other questions onthe Medicare surcharge?
Well, let's circle back.
So is there ways to pay this,um, out of your HSA and have tax?
Like is there any other ways?
Benefits, right.
If you, if you are stuck with this,
you absolutely can't.
Well, and, and it's when you havethe higher premium for your Medicare,
that's just your Medicare premium.
(37:31):
So since you can pay Medicare premiumswith your HSA, then yes, that can
cover, that will cover this because nowinstead of saying $185 a month or for
the year, then it'll save $259 or $370.
So yes, you can use it foryour HSA, which is great.
And the other nice thing is whenyou need to provide a receipt, you
(37:53):
know, with your taxes, you need areceipt for any, uh, anything that
you're pulling out of your HSA.
This is a good way because normally.
It's just gonna show up at,you'll get an annual statement
of what you paid for Medicare.
So all you need is that annual paymentor that annual statement, and that's your
receipt for the year that you covered,you know, these HSA distributions
(38:13):
with your, and you can use a, um, youcan't use a credit card if you are,
um, already on Social Security, soyou can't use a credit card for that.
But if you are not on Social Securityyet, and you are on Medicare, you should
be able to cover this with a credit card.
So I don't know if they would charge afee or not, but, um, not many people do.
But again, once you get on SocialSecurity, they're gonna have it deducted
(38:36):
from your Social security check, butyou will still get an annual statement.
I, it was a 10 99 SI think, where it'syour annual social security statement.
It'll show any taxes that were taken out.
It'll show the portion that wasMedicare that was taken out.
And, um, that's a very easy documentto include with your taxes for that
year to confirm those distributions.
(38:57):
Uh, from your HSA,
I know we're, we're rounding upto the nearing the end of our
discussion, but normally at thetop of the hour before we wrap.
Mm-hmm.
Yeah, we normally pause for a grouppicture and we've Oh, let's do that.
Yeah.
We've had a couple of folks drop off.
So Sandy, we could grab a goodpicture with those that are left.
This has been really exciting, Jackie.
(39:19):
So do
you want me to
stop share?
You don't, I don't think you have to.
You.
So you don't.
Okay.
Okay.
The way, the way that this works,uh, I am using the group photo app
within Zoom, and so what's gonnahappen for anybody who's new?
We have some new folks.
Okay, great.
I'm gonna, I'm gonna hit the buttonthat says Take photo, and it's
gonna pop up on your screen andit's gonna ask for your permission.
(39:39):
And Zoom is wonderful becauseas soon as you click that
button, it snaps your photo.
So wherever the heck you werelooking, that's the photo it takes.
Um, so it's really fun for people.
Uh, I wish there was a delay or something,but, uh, just know that it'll pop up.
If you don't want your picturetaken, say no, it'll pop up and
ask you, but if you are not oncamera, it will not take your photo.
(40:01):
So if you would like to be inthe group photo, this would be
the time to turn on your camera.
You can turn it back off when we're done.
If you do not want your picturetaken, then you can either turn off
your camera or you can just say, no,you don't agree to take the photo.
Okay.
So give a, a folks a couple ofseconds to pick your, pick your
thing and then powder your nose.
(40:22):
Yeah.
And then I'm, we'll do two, um, sothat we have, uh, two to choose from.
All right.
So here we go.
We're clicking Take photo.
It's building.
It's building.
I,
(40:44):
all right, I'm gonna download this one.
And now we're gonna do it again.
Okay.
One more time.
Get my apps back here.
Okay.
(41:04):
Ready?
Number two.
Thank you Sandy.
And thank you for allowingus to interject Jackie.
Yes, no problem.
That's cool.
I I love the group and, uh, taxes aren'tthe sexiest topic, although that was
(41:25):
one of my favorite topics for CFPs.
'cause it's, it is, uh, woventhroughout every financial decision.
Um, it, it could be an importantstuff and it could, I think it helps
you feel more empowered that youcan understand some of this stuff.
A lot of it is not as complicated asmany people have held it out to be.
(41:45):
And it just is great food for thoughtand allows you to kind of, um, plan
better knowing some of these rules.
So, um, so yeah.
Can.
Uh, taxes are probably not as sexy atopic for anyone else but for this group.
Okay, great.
They're very exciting.
Great, great.
It's something that comesup almost every month.
(42:06):
Yes.
Awesome.
Awesome.
So hopefully I got to answer some ofthe questions and we only have a couple
more little things that I wanted to add.
Um, sometimes this doesn't gettalked about, but once you turn 65,
your standard deduction increases.
So as a single, uh, the normalstandard deduction is 15,000.
You get an extra $2,000 a year, uh, todeduct as part of your standard deduction.
(42:28):
So that takes it to 17,000.
And then you can see the married couplefiling joint married, couple separate,
and then uh, head of household.
So you do get, um, a little bettertax break there where they're
realizing and they say the reasonis to help with medical costs
or whatever as you get older.
So that's another message that, uh,medical costs do increase as we get older.
(42:53):
So the IRS is helping out,uh, 65 and older There.
Uh, let's see what else you got here.
So then 75 is just the last one.
Uh, we, we did talk about, um, most ofthese, but, um, let's see, what else
did I, yeah, I just wanna show the, um,the qualified charitable distributions.
So just generally, um, the IRS doesallow, if you're at, if you're at least
(43:18):
70 and a half, you're able to donateup to $108,000, and that's in 2025.
Okay.
If you are 73 right now, and you,um, are subject to required minimum
distributions, they will count yourQCD toward your requirement or required
(43:38):
distribution and included a linkthere so you can read through that.
Um, if anyone's close there or ifthey have someone in their life
and you know, mom, grandma, uh, youknow, aunt, uncle or somebody, the,
this might be helpful for them.
Um, but this is something that you cando, you know, once you're in your, your
older years and somehow those RMDs arestill way bigger than you anticipated.
(44:00):
Okay.
Um, yeah.
So this, this is, there's been somechanges with the RMD ages, so I
wanted to clearly show this chart.
Um, so this is requiredminimum distributions.
Um, again, you can go to dinkydown.net and you could play
around with it a little bit.
But, um.
If you are, if you were born after1960, I'm assuming most people
(44:25):
on this call probably was bornafter 1960, your required minimum
distribution is not until age 75.
So these days mostly age 75.
So I'm just going to click this.
My favorite, uh, dickie town.net.
So if you wanna play withyour RMDs, you can go here.
Um, I put in 2040,that's when I turned 75.
(44:49):
Um, you can see here, age 75 and 2040.
Um, I, I faked my, um, birthdate, butI put 1965 and I put, let's say, you
know, you have $101.5 million whenyou retire, let's say at 65, and in
10 years, it's double to $3 million.
(45:10):
Okay.
And you haven't been able todo Roth conversions and it just
grew in your traditional IRA.
Okay.
Um, I put, my hypotheticalgrowth rate is about 6%.
Normally I use about 9%, but as youget older, you know, that becomes
more conservative, uh, with your mix.
And so this will show, I'mgonna view the full report, what
(45:32):
you're gonna be required to take.
So you're gonna be required totake 120, almost $122,000, okay?
Out of your, uh, traditionalIRA, not to mention that you're
gonna be getting social security.
Possibly a pension or something like that.
So this may be more than what youneed and you're in the, this puts
(45:54):
you just, this alone puts you in the24% tax bracket as it stands today.
So this is what people don't want.
So imagine if this was $6 million, sonow you gotta take out two 50 almost.
So this is the worry thata lot of people have.
And I always say, you know,this is a rich person's problem.
So if you got more in an IRAthan you want, then that's great.
(46:17):
You've got more than you need.
So that's a good problem to have.
Um, but yeah, so this is anotherreally cool calculator where you
can mess around, you know, withthe numbers and things like that.
So you have an idea.
You might say, you know what, Idon't wanna be taking that much out.
You know, what if I could get mydown to one and a half million
dollars, you know, now you're onlyhave to having to take out 60,000.
(46:41):
But again, that's added to whatyou're getting is social security.
And this is just one person ifyou happen to be a married couple.
So you can play around.
Yeah.
Jackie, if you
wanna elaborate on that, therewas a question about, you
know, how RMDs work, right?
Husband's older than, than, uh, the wife.
And well, how is RMD per,you know, per person?
Is he required to do it?
Uh, but not me becausehe's 75, but I'm not.
(47:04):
Yeah, so, um, there's anoption in the calculator.
Um, if your sole beneficiary isa spouse, you can click that and
then ask for their birthdate.
So you could put that in.
Um, it really doesn't change a whole.
Here's where it changes is if your,that spouse is 10 years younger
than you, that's the only thingthat really makes a difference.
(47:28):
So if your spouse is 10 years younger,then it will start to change the numbers.
Let me see here.
Uh, if it had anything else on it, um,
yeah, like here it says it's sobeneficiary, a spouse, and more than
10 years younger than the owner.
So I put no there, but if you put yes,it will show you, um, what it would be.
(47:49):
Um, let's see.
Okay, so if I change this to wherethis person was born in 1982,
we're gonna see the number change.
Okay.
Before it was 60 do 60,000.
So if I change it to 1982, nowthe distribution's changed to 50.
Yeah.
(48:10):
And that's why it's cool todo a calculator because you
instantly get your answer.
And so if I go to view report,you could see that I selected yes,
is the sole beneficiary espouseand more than 10 years younger.
And I put, yes, that changed the number,but I think that's the only thing that
really makes a significant difference.
(48:30):
So, yeah.
Great calculator to pay play around with.
If the spouse is lessthan 10 years younger,
it, it doesn't change it 'cause Okay.
'cause, um, 'cause yeah.
Um, if, if your spouse is older or lessthan 10 years younger, it, it didn't,
it didn't change the number, but I,because I was plugging in and that's
how I figured out, okay, I forgotabout that 10 year rule honestly.
(48:50):
But, you know, dinky town, youknow, they had a line for that.
Um, but yeah, you can plug in allkinds of numbers and decide, you
know, what you wanna do there.
Uh, let's see what else we got here.
Okay, so that's, that's, um, thatcovers most of the, um, presentation.
And I am, we can, you can askwhatever questions I can hang on for
(49:10):
at least another 20 or so minutesif anybody wants to hang around.
But, um, I'm gonna just show theseslides of, um, and again, I'm gonna
share the slides, but this is justsome of the guests that we've had that
talked about some of the topics wecovered where we did a really deep dive.
One of my favorite is the last one here,estate planning with Jenny Rozelle.
(49:31):
She is very funny.
She's a young lady.
I think she's in her thirties orwhatever, but she's very good.
She has a podcast called The Legal Tand she talks about, um, cautionary
tales when it comes to estate planning.
She talks about, um, celebrity,you know, uh, estate plans.
Um, the most recent one shedid was on Jean Hackman.
Um, again, she's, she's only focusingon the estate planning part of it.
(49:54):
Um, so she's not diving into the tragicthing that happened with him and his
wife, but, um, so, so there's that.
And, um.
For me, uh, this is five for Dummies.
I do cover taxes intwo different chapters.
Chapter five, understanding How Taxeswork and, and Credit Credit scores work.
But then 15, I really dive intoit, um, asking that big question,
can you really control your taxes?
(50:16):
And after today's presentation,hopefully you can say, yes,
there's a lot of things I can do.
And, uh, there's a QR code if youdon't already have the book or
interested in getting the book thattakes you directly to, um, Amazon.
Um, and then lastly.
I love this.
So I put together some cool womenthat talk about taxes, six of them.
(50:37):
Um, I wanted to just shout out somewomen that, you know, Christine
Bins, everybody knows her.
A lot of people may know Jean, uh,Chasky, but there's some other women
here that I think are doing a great job.
So I put their YouTube channels there.
Um, we wiser Avante.
She's a CFA and a CFP.
Erin talks money.
Oh, she's really good explaining topics.
Um, so I, I've been subscribedto her channel for a long time.
(51:00):
And then, um, Natalie spoke at an economytwo years ago and her, uh, podcast is real
estate is taxing, so that's pretty cool.
Uh, Hannah Cole on the otherside with the sunlight there, she
talks a lot about creatives andsmall business owners and taxes.
But these are just some additional, Iwanna always like to highlight people
(51:21):
that, you know, might elaborate onsome of these things or do a great
job of talking about, um, this topic.
Um, and then I'll just, I'lljust leave this slide up.
This is how you can contact meand the podcast catching up tophi.
We'd love for you to, you know,join our Facebook group if you
want this type of dialogue.
Um, we'd love for you to leavemessages or of course to leave
(51:42):
a review, um, or, or email me.
Um, but this is how you cancontact me in all kinds of ways.
So, miss Sandy, you had your hand up.
What's up?
Well, I did, I, it was kind ofan accidental thing, but I do
have a question in the chat.
So Jennifer is asking a great question.
Um, is there another way to buyyour book that not, is not through
Amazon or is that your preferredway for people to buy your product?
(52:05):
No, Amazon is not my preferred way.
It's just the most common way.
Um, there is a website called Indiebooks or indie something where
you can buy books and they comethrough an independent channel.
Okay.
I IndieBound I think it's IndieBoundis the name of it, but that's, and I,
and you know, I have been asked thatquestion, especially this year about,
(52:29):
you know, purchasing, uh, that's noton Amazon, so that's lab was old.
No, I think that's great.
Thank you, Jennifer.
I think that's lovely too because you're,you know, how can we best support you?
Right, right.
Thank you.
Yeah, for sure.
Any other questions, ladies?
Or any other pieces we wannago back and, and revisit?
Yeah, we've lost quite a few 'causeit's uh, you know, getting into the
(52:52):
midday, but there's still a few here.
Yeah, yeah.
Um, the ones that hang aroundusually get all their questions
answered 'cause it's fewer people.
But I'm happy to either revisitany other area or dive into
anything that didn't make sense.
Um, I. Let me know.
Well, I don't have a question,but I do have to say two things.
(53:15):
One of the things that jumped out tome the most here that is, so I think
relevant for this group of ladies isthe planning for what, you know, some
of us, we just get so caught up intax bombs and all of this and all of,
and washing the market and not ableto execute because we're so hesitant
to make a, a mistake for somethingthat's gonna happen 20 years from now.
(53:38):
But I love how you put it up there,Jackie, and showed if in fact you have to
pay taxes on the back end, or if you are,uh, beneficiaries and inherit and have to
pay taxes, it's a good problem to have.
Right.
It it real, it really is.
Um, and, and thank you for saying that.
And, and you know, I just wannaacknowledge that, you know, feeling
worried or concerned, whetherit be the stock market taxes
(54:00):
or whatever your situation is.
'cause you've got these macro things,you know, the stock market, we don't
have any control over that terrace.
We don't have reallyany control over that.
And then we've got the micro things,our situation, you got laid off,
laid off of a job spouse or a familymember had a serious health issue.
Those are things that really matter.
(54:22):
So you can, you know, focus onthe things that you can possibly
change or you can make an impact.
Mm-hmm.
Um, but yeah.
Um.
Uh, just acknowledge that, you know,feeling anxiety, feeling worried.
Those are valid feelings.
You know, you, you shouldn't say, I,I shouldn't feel this way, whatever.
Well, it makes people feel thatway, you know, process it in the
(54:46):
best way that makes sense for you.
You know, for some people it mightbe a glass of cabernet, you know?
Mm-hmm.
For some people it might be a going, forme, it's going for a hike or walk for
some reason when I'm getting fresh air.
Mm-hmm.
Especially this time of the year, I justfeel better and I, I'm, I focus more on
(55:07):
maybe creative things that I'm working on,like getting ready for this presentation.
You know, this made me happy, you know,I'm not thinking about the stock market,
you know, so, um, so acknowledge howyou feel, um, those feelings are valid.
Mm-hmm.
Um, and start to educate yourself andmaybe learning some of these new things.
Can one, help you focus on somethingelse that you do have control over.
(55:30):
And two, the fact that you aredoing something to plan, you
know, for the good, for long term,hopefully generations to come.
So the things that you do withtaxes or whatever, it's going
to have a lasting impact.
It's not just you normally,there's other people in the
chain that are coming behind you.
(55:52):
Thank you, Jackie, for joining usand spending some time with all of
your knowledge and your experiences.
Uh, ladies, let's give Jackie avirtual or verbal round of applause.
Thank you, Jackie.
Thank you ladies.
This is awesome.
Great job, Jackie.
Oh, awesome.
Thank you so much.
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