Episode Transcript
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Speaker 1 (00:00):
You worked hard for your money, but do you know
how to make it work hard for you. You need
a team with experience, vigilance, and a strategy to help
you live the retirement you deserve. Find your financial safe
haven with Haven Financial Group. Today, you're listening to the
new and improved Haven Financial Group Radio Show, where we
bring you comprehensive weekly financial wisdom from the professionals. It's
(00:23):
all about helping you solve retirement problems so you can
make your nest egg last. Your tune to the Haven
Financial Group Radio Show with your host Larry Kolvig and
Kim Karrigan your guides to weekly retirement confidence. If you're
interested in protecting and growing what you have, let us
be your financial safe haven. The fuone nines are always
(00:43):
open at six point two, five oh four eighty four hundred.
Now get your financial questions ready because the Haven Financial
Group Radio Show starts now.
Speaker 2 (00:54):
Good morning, and welcome to the Haven Financial Group Radio Show.
I'm Larry Kolviig, founder and CEO of the Have and
Financial Group.
Speaker 3 (01:01):
Again, thanks for listening.
Speaker 2 (01:03):
We're going to talk about retirement like we do every week,
Kim right every week.
Speaker 3 (01:06):
Good to be with you again.
Speaker 4 (01:07):
Great to be with you as well. Right, we're going
to talk about retirement this time that we're going to
just try to remind everybody, you know, as we start
your approach July one. I think it's important that everybody
remembers some of the the updates that have occurred here
in twenty twenty five when it comes to people's retirements,
whether they are associated with taxes or we're going to
(01:28):
talk about Social Security and Kola. We're going to talk
about some of the mistakes that folks make so here
midyear you want to make sure you're not doing that.
And then we're going to address some of our maybe
younger listeners who are starting to think about saving for college.
That could also be grandma and grandpa, but you know,
those kinds of issues. So it's a great show and
it's full of lots of great information. It's great to
be with you, Larry.
Speaker 3 (01:49):
Yeah.
Speaker 2 (01:50):
Retirement, you know, it's a long term gain and every
year there's constant changes. There's probably every year there isn't
a change, and quickly your retirement plan can become outdated.
And that's why we at Haven Financial Group we really
strive to keep people up to dates either through classes
or having them in and getting them updates. You know,
today we're going to talk on social security and the
(02:11):
first segment. But there's just always changes in every facet
of retirement. Medicare has changes, and taxes are constantly changing.
So again, staying up with the times is imperative for
a retirement plan.
Speaker 4 (02:24):
Absolutely it is. I think we've got a guest with
us today, right, Mitch Moss is with us. He's a
social security retirement specialist at Haven Financial Group. Great to
have you with.
Speaker 5 (02:33):
Us, match, great to be here, Thank you very much.
Speaker 4 (02:36):
Absolutely, So we want to start talking today about social security.
COLA in twenty twenty five, would you do as a
favor and just to tell people in case they've forgotten
what COLA stands for, what it stands for and what
that's all about.
Speaker 6 (02:49):
Well, the COLA, it's an acronym, so it's cost of
living adjustment and that is that's done every year. Basically,
the consumer price index is calculated and will come up
and it's really basically it follows the inflation. So if
we have high inflation, we're typically going to get a
higher COLA increase on our social security.
Speaker 4 (03:09):
Yeah, a couple of years ago we really saw it
go up quite significantly, did we not?
Speaker 5 (03:14):
We did.
Speaker 6 (03:15):
We saw some really large increases. Now, don't hold your breath.
I don't think those are going to be coming around
anytime soon, because you know, inflation has been going downward
and that's going to be reflective of this next year's
cost of living adjustment as well.
Speaker 4 (03:29):
Now we actually get colon numbers in the fall correct
for the following year.
Speaker 5 (03:33):
That's correct.
Speaker 6 (03:34):
Typically around October is when they come out they are
saying this year is going to be on average about
two point five percent increases.
Speaker 5 (03:42):
What they're looking at might be a.
Speaker 6 (03:43):
Little bit lower, maybe two point three is I've heard
some numbers coming out as well.
Speaker 4 (03:47):
Okay, terrific. So this year, the twenty twenty four into
twenty five, what was the increase this year?
Speaker 3 (03:54):
This year?
Speaker 5 (03:55):
It was two point five percent?
Speaker 4 (03:56):
Okay, okay, and kay?
Speaker 2 (03:58):
Why that really makes a difference considering you know, we
do a lot of classes. We just this past week
we had a very well attended class at Dakota County
Technical College, and we do other places as well. Listeners
can go to our website and see all the classes
we teach maximize Social Security and tax and we discussed
in that those classes and in our one on one
(04:18):
meetings that from sixty two to sixty six social Security
grows by roughly six percent plus this cost of living adjustment,
and from sixty six to seventy it grows by approximately
eight percent plus the cost of living adjustment. And you're
right you mentioned a couple of years ago we had
an eight point seven percent increase in one year. Yes,
everything was super expensive, which is why we had an
(04:40):
eight point seven increase, But if you were in those
later latter years, you're if you were delaying, you would
have seen almost a seventeen percent increase in one year.
That is substantial. Now that we're not ever trying to
tell people to wait, just to wait, but what we
really strive to make sure they're, you know, making an
educated decision as to when they're going to take it.
(05:03):
If you're single or a married couple, you know, what
is the strategy behind that. Oftentimes the higher bread winner
may take it later and then the lower bread winner
may take it earlier. But it's really a one on
one conversation, Mitchell.
Speaker 4 (05:16):
Are you sometimes surprised that people just you know, turn
sixty two and they immediately turn it on.
Speaker 6 (05:22):
Oh absolutely, I see it all the time, and I
get people coming in They're like, I'm going to take
it at sixty two. I believe I'm entitled to it.
I should get it.
Speaker 5 (05:29):
But then I I always ask the question.
Speaker 6 (05:31):
I go, are you working? They go, well, yeah, I
have to keep working. Well, what's your earnings level? Because
there is an earnings limit if you do take it
early prior to your full retirement age, which that number
is right around twenty four twenty three four. I believe
it is right now from sixty two to your full
retirement age. So if you're making a substantial amount of money,
say sixty fifty sixty seventy thousand dollars a year, you're
(05:53):
not going to turn your socialecurity on at age sixty.
Speaker 4 (05:55):
Two, right, So let me ask you. If you let's
say you do turn it on because you've decided you're
going to retire, and then at sixty five you're offered
an opportunity as a consultant and you would really like
to take that. What happens to your social security?
Speaker 6 (06:11):
Then, well, the unfortunate thing is you have a twelve
month window to make any changes with your social security
once you start it. So from sixty two to your
full retermin age, you have a twelve month window. So
if there's the opportunity that you think you might be
going back to work, whether it's in a year or
two years, come on in have that conversation, because again,
we might want to be living off with some of
(06:31):
your funds in the advent that we might actually get
go back to work, because we don't want to start
that benefit because you'll stop earning delayed credits on your
Social Security and if you're making a larger sum of money,
you won't see a dime of your sociecurity because they'll
remove it all from you.
Speaker 4 (06:46):
Okay, So that and that means from that point forward'll
they'll take it away. So you know, and then when
I'm seventy eight, I'm still not getting Social Security.
Speaker 7 (06:54):
No, you're still getting your Social Security.
Speaker 4 (06:56):
It's through that year, I see.
Speaker 6 (06:58):
Okay, if the contract goes for one year, well you
might not get any socialecurity that year because you're your
earnings were higher. Okay, next year you don't have any earnings,
your soci security will pick back up again. They look
at it as on a month to month basis, So
again it's one of those things. You have an earnings
cap again, like it's twenty three four. If you're over that,
(07:18):
for every two dollars over twenty three four, they're going
to take a dollar of your social security way, so
think of it as if you make thirty thousand overs,
they're going to take fifteen thousand to that check away.
Speaker 4 (07:27):
Sure. Absolutely, Well, it seems like to me this is
all the more reason that you want to partner with
somebody like you folks that Haven financial group, because to
make decisions about when to take Social Security they can
really be detrimental. That's a really important decision to make.
Speaker 6 (07:43):
Well, the question I usually ask my clients, I go,
would you take a reduction in your pension? If you
had a pension, would you take a twenty five percent reduction?
And the answer I always get is absolutely not. I
worked hard for that pension. Well, you also worked hard
for your social security right, even though they consider it
attax and you know it was a kind of a
forced savings account if you will. But again it's yours.
How's the best? How are we going to get the
(08:05):
best out of it? And that's really what I like
to do with my clients, show them what we can do.
What's the reasoning behind delaying living off of maybe some
of your qualified funds first and then turning social Security
on later to max out that benefit for the rest
of your life.
Speaker 4 (08:19):
Mitch Moss is our guest. He's a social security retirement
specialist with Haven Financial Group. So Mitch, let's talk about
social security and its stability, because that, certainly, I think
is a real fear for a lot of people who
are getting close to retirement age. It may be the
deciding factor for a lot of people who just decided
sixty two, I'm going to start to draw.
Speaker 6 (08:40):
Well, it's always a consideration because every since the inception
of Social Security, they've had to make changes to make
it more soluble, right, so none of us are going
to like any of the changes that they do. So,
for instance, when you first were able to start collecting
sociecurity was age sixty five.
Speaker 5 (08:54):
That was your full retirement age. Then they made some changes, then.
Speaker 6 (08:58):
It went to sixty six, then it went from sixty
six in some months now it's sixty seven. One of
the most logical things that me and Larry.
Speaker 5 (09:05):
Have also talked about.
Speaker 6 (09:07):
You know, we don't know because they're not going to
obviously broadcast this to us, but we think that they're
probably going to change the age in which you're qualified
for full retirement again to make it soluble. But it's
not going anywhere in my opinion. Obviously, I don't know
what the future holds, but the majority of the world
(09:27):
in the United States needs their social security benefit, right
They've got options on the table. Obviously, we have to
wait till Congress hands those down until we actually know sure.
Speaker 4 (09:39):
Absolutely, Now, Larry, that's something you've said many times.
Speaker 2 (09:42):
Yeah, Kim, I think the takeaway from this segment is
for the listeners if they have any Social Security questions, worries, concerns, reservations, whatever,
come on in and visit with Mitch.
Speaker 3 (09:53):
I know Mitch has more meetings on social security.
Speaker 2 (09:56):
Anybody that comes in will have a detailed conversation with
him or any of us and holistically with social security,
how does it fit into your retirement puzzle.
Speaker 3 (10:06):
It's a big piece of it.
Speaker 2 (10:07):
I'll tell you this that social security makes up thirty
to forty percent of the average Americans retirement income.
Speaker 3 (10:13):
So it's a big deal.
Speaker 2 (10:15):
So come on in, you'll walk out with a social
Security report, maximization report, it's a great roadmap. It's very
very helpful, and I think they'll find that conversation very
very very very helpful in the big picture, because lots
of people have questions and that's why they come to
our classes.
Speaker 4 (10:32):
Absolutely well, let's tell everybody how they can see Mitch.
They can call six one two five zero four eighty
four hundred to tell them that you've heard us here
on the radio. Tell them that you've got some questions
about social security. Be sure you come in and sit
down with some of the specialists there at Even Financial Group.
Talk a little bit more about your retirement plans, what
(10:53):
you're looking for. Make sure they're a perfect fit for
you and you're a perfect fit for them. Again, it's
six one two five zero four for zero zero. Mitch,
thanks very much, great information.
Speaker 5 (11:04):
Well, thank you, Kim. I appreciate you guys having me.
Speaker 4 (11:06):
On absolutely Larry, when we come back, let's talk a
little bit more about taxes, because everybody wants to talk
about taxes, don't.
Speaker 3 (11:13):
You think, oh sure, why wouldn't we.
Speaker 4 (11:18):
This is the Haven Financial Group Radio show.
Speaker 1 (11:20):
Don't go too far. We're gathering more important insights and
retirement ways. Devin the Haven Financial Group Radio Show. We'll
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kulvig and Kim Karagan. Now back to
(11:41):
the show.
Speaker 3 (11:42):
Welcome back listeners.
Speaker 2 (11:43):
My name is Larry Kolvig, founder and CEO of the
Haven Financial Group, And if you're just tuning in, you're
listening to the Haven Financial Group Radio Show, wherever week
we discuss crucial retirement and financial topics that can make
the difference between surviving retirement and thriving through those golden years.
Speaker 3 (12:00):
Kim, we got Lance Lurson, our in.
Speaker 2 (12:01):
House CPA at Aven Financial Group on for the rest
of the show. Here because we have conversation. We're going
to have conversations on taxes and we know that's our
relevant piece to the retirement puzzle and probably will affect
retirees more than any time in any time in their past,
which I know is not uplifting. But let's talk about
maybe some of the things that we can do to
(12:24):
avoid Uncle Sam getting the biggest part of our pocketbook.
Speaker 4 (12:27):
Yes, absolutely, it's great to have you, like always really
appreciate it. And when we giggle because we say taxes
in your name in the same sentence. Please don't take
that as an offense. And no one means that.
Speaker 3 (12:38):
He doesn't kim. He doesn't.
Speaker 4 (12:39):
He's a guy who wanted a dinner party, that's for sure.
Speaker 7 (12:46):
All right.
Speaker 4 (12:46):
Let's talk a little bit first off about taxes in
twenty twenty five. There have there been a few changes
that retirees really need to be aware of, and lance
we're doing this with the backdrop of the idea that
we're going into the second half of the year July one,
This is a new fiscal year for a lot of people,
so we thought we would just update folks.
Speaker 7 (13:02):
Yeah, so for twenty twenty five right now, it's kind
of the same thing we've been having for the last
for the last few years under the tax huts and jobsack.
There is, as everyone knows, there is the tax laws
that are going through for the big beautiful bill that
they are working on. The House has passed a version
(13:24):
of it, the Senate has worked on a version of it.
But both versions are not the same, and so now
there has to be some sort of reconciliation between those
two and unfortunately, at this time we just we don't
know what's going to shake out of that. So for
right now, the best advice is to just plan on
(13:45):
what we know and take action with what we do know,
and then we can also keep an eye towards the future, saying, hey,
this is what's possibly going to come happen. The best
thing that happens for us is that the tax rates
stay as low as they are right now, the standard
deduction stays pretty high. Worst case scenario, we go back
(14:08):
to the old ways of doing things, so the tax
rates go up and standard deduction goes down. And because
of that, we just we want to make sure we
have the proper plans in place.
Speaker 4 (14:19):
Sure so that shift in tax brackets could happen next year.
In fact, it's scheduled to happen right next year unless something.
Speaker 5 (14:26):
Is done correct.
Speaker 7 (14:28):
So as it stands right now today that our ten twelve,
twenty two to twenty four percent tax brackets will be
going up to ten, fifteen, twenty five, and twenty eight
and that's what the new tax law is going to
try to address, and we'll see if they can keep
those tax rates down for us. But in the meantime,
(14:49):
this is the last year of the tax cuts and
Jobs Act. So this is the year that we're going
to be taking a look and saying, hey, this is
when we can do our roth conversions, pay them at
these lower tax rates. Uh, this is when people are
trying to double up on charitable contributions. So one of
the strategies that people are talking about for this year
(15:12):
is that if you're a charitable person and you're and
you want to give to church or other charities, maybe
we hold off on that in twenty twenty five and
wait until twenty twenty six when it's potentially going to
be a little bit better off for us tax wise
to do things like that. Sure.
Speaker 4 (15:28):
Absolutely, So let's talk about the best advice that you
give to people who are looking at retiring, you know
in the next let's say two years. What's the number
one advice you give them when it comes to taxes.
Speaker 7 (15:41):
Lands One is to kind of just go into it
with eyes wide open, knowing what your income source is
going to be and what the tax ramifications of those
sources are going to be. So mostly retirement, we always
talk about four to one k in the iras well.
These ones are all going to be one hundred percent taxable.
But when we pull that money in there. That also
(16:04):
affects a number one income source for a lot of people,
which is their social security. So do we want to
take social security right now? Do we want to wait
on that? Just understanding those tax implications, and so that's
why you want to have that conversation and be able
to understand what are you going to be your income sources.
Speaker 4 (16:22):
You know a lot of people think that they're going
to pay a lot less tax when they get to
retirement age. That's not necessarily true.
Speaker 7 (16:28):
Is it not necessarily Because when you get into the
retirement years and you have to start taking those required
minimum distributions. There's couples that have been saving and saving
and saving, and now they hit seventy three and they
have to take their required required minimum distributions, which is
(16:50):
about four percent give or take in the first year.
Then they look at it and say, oh, my goodness,
I'm getting a more income than I that I'm getting
more income right now than I did while I was
working because of these requirement and distributions and social security
payments and pensions. It becomes a good problem to have.
Speaker 4 (17:14):
But a problem, nonetheless, Is there a way around that lance?
And are there you know, is there some advice that
you start to give people, how do you work around it?
Speaker 7 (17:23):
So in the first part tech of the retirement years
for tax purposes, what we'd like to do is possibly
delay Social Security so that we can take more out
of the full, full, fully taxable IRA accounts. We start
using that if we don't need the actual money, we
can start looking at ROTH conversions to help reduce those
(17:45):
requirement and distributions in the future. Other ideas would be,
once you have to take those requirement distributions, looking at
possible qualified charitable contributions to church and to other organizations
and use that type of money so that it doesn't
(18:06):
become taxable.
Speaker 5 (18:06):
At that point.
Speaker 4 (18:09):
Larry, did you want to add something?
Speaker 3 (18:10):
Yeah?
Speaker 2 (18:11):
I do, because this tax discussion of these things that
we're mentioning, they may seem foreign to some people. Because
what I have the observation I've seen, especially since COVID,
is there's a lack of tax planning that's going on
with many folks. You get your taxes prepared, you may
bring your box of statements to your tax prepared drop
(18:32):
off pickup. I hear this all the time. We don't
even talk to our tax preparer anymore. Well, as you
get close to retirement, and retirement tax planning becomes that
much more important. You know, all those years you worked,
you put it into the four to one K and things.
Maybe taxes were fairly simple. Now you're looking at Social Security,
you look at R and DS. We're big into forward
(18:53):
thinking tax planning, and people just starting doing it because
they're not getting that attention. We want to get together
a couple times during the year. We want to map
out a plan for retirees, distribution income, how tax planning,
What is the best accounts to draw from the most
tax efficient way possible. And if you're just a drop
off pickup and not getting that attention, you're probably getting
(19:17):
this when you get your taxes done. Oh my goodness,
I didn't know I owed this much money.
Speaker 3 (19:21):
Every year? I owe money, this, this, this.
Speaker 2 (19:24):
My solution would be why not fix the problem rather
than having the same problem every year. But if you're
only getting together or not getting together and just dropping off,
you're never going to get that attention. And guess what,
You're also going to miss opportunities like ROTH conversions, IRA distributions,
low tax brackets, zero capital gains tax, and a whole
(19:47):
variety of other things just because you're not in the know,
because you don't have a partner to help you.
Speaker 4 (19:53):
Sure, so let me ask you this here we come
on July the first, Is it it's too late to
start preparing for next year? And you know, because I
know after December it certainly is too late. Is it
too late right now?
Speaker 8 (20:09):
Absolutely not, kim Uh.
Speaker 7 (20:11):
This is actually probably one of the better times to
kind of have a check in with your income for
this year, because at halfway through the year, you kind
of you know where the first half has been, you
have a reasonable idea then what is the second half
going to look like? And so this is a great
time for the check in, and especially for those who
happen to still be working and still going to be
(20:33):
about two three four years away from retirement, that hey,
we can look at some things and get some planning
going on right now, that this might be the time
to do some of the roth conversions depending on what
your income is, And we do that by looking at
where your W two is sitting at right now. You
have your PA stubbs that say what you have here
(20:53):
to date, and then from there you can kind of
project out where your income is going to be at
and then make the appropriate plans.
Speaker 4 (21:01):
Super So this is the time, folks. You just heard
Larry explaining it. You know a lot of people just
drop it off, you know, next February, and then they
go to pick it up their tax returns and they're
very unhappy. So if you're somebody who wants to get
ahead of that, you just heard Lance say, this is
the time to start preparing. So give the folks at
(21:22):
Haven Financial Group a call. Not only can you talk
to them about your tax issues, but you can talk
to them about all of your retirement needs. That number
is six' one two five zero four eight four zero zero.
Let me give it to you again, six one two
five zero four eight four zero zero. Till that you
heard the three of us on the radio, and you'd
like to set up an appointment, come in, talk to Lance,
(21:45):
talk to Larry, talk to some of the specialists there
at the Haven Financial Group. When we come back, Lance
is going to stay with us. We're going to talk
more about costly mistakes when it comes to taxes that
retirees make as they head into retirement and then once
they are in retirement. So be sure to stay with us, folks,
This is the Haven Financial Group Radio Show.
Speaker 1 (22:06):
Ready to find your financial safe Haven. Your dream retirement
is in reach. Don't go away. The Haven Financial Group
Radio Show will.
Speaker 5 (22:13):
Be right back.
Speaker 1 (22:16):
Are you worried that your financial strategy might be missing something, Well,
you're in the right place. Larrikolvig is back and ready
to help you find your financial safe Haven.
Speaker 2 (22:28):
Good morning once again, and welcome to the Haven Financial
Group Radio Show.
Speaker 3 (22:32):
Thanks for listening.
Speaker 2 (22:32):
Feel free to give us a call at six one
two five zero four eight four zero zero, or visit
us online at Havenfinancialgroup dot com. Check out all our
classes if they're well attended, we're inviting you right now.
You can check out social security and tax some investment classes,
medicare made simple classes, and a variety of other classes
(22:54):
as well. We were big into education. We have been
for the ten years. This is our Behaven Financial Group's
ten year anniversary, and I don't see us ever getting
away from the education piece because it's how people learn,
and I think it's a critically important. You know, Kim,
that last segment we talked about taxes, and I just
(23:14):
wanted to add one thing to that is I find
people I'm very cost conscious and I also, what is
the added value we're getting from whoever we're working with.
If you're listening and you're not getting the attention from
your CPA or tax prepare and maybe you're getting paying
way too much for what you're getting. And I know
there's a lot of big box tax prepare houses out
(23:37):
there that are charging a lot of money and you're
not getting anything for that other than plug in and
print it out. Okay, you deserve more in tax planning,
forward thinking tax planning, and that's where I think we
really really could.
Speaker 4 (23:52):
Help absolutely six one two five zero four eight four
zero zero. That's how you get hold of our friends
at Haven Financial Group. We want to continue the discussion
about taxes. Lance Larson, CPA there at Haven Financial Group
is also our guest today. I want to talk about
some of those costly retirement tax mistakes that people made.
Speaker 7 (24:13):
Now.
Speaker 4 (24:13):
Lance, I know that we've spoken about some of these,
but maybe we could just sort of reiterate some of them,
because I think people can't hear this enough. By starting
number one, about the fact that you know you do
have to make some changes, you have to approach taxes
differently once you get into retirement.
Speaker 8 (24:30):
Yeah, so kind of like what we talked about before,
when you get to those pre retirement years, so we're
looking you know, probably somewhere at two to five years
out there.
Speaker 7 (24:42):
Some of the mistakes that people make is that they've
been doing the four one K and just been focusing
solely on that, so that when they get to their
retirement years, all they have is IRA and four one
K money and that's going to be one hundred percent taxable.
What they've done is they've kind of failed to create
(25:02):
tax diversification for themselves. Well, that's when looking at that
pre retirement years there that you can start looking at say, hey,
do we really need to always contribute to that four
to one k. Maybe it might be better to use
the Wroth four one k at work, might be better
to put money into a non qualified account so that
(25:23):
when you get to those retirement years that we can
have that tax diversification going on, and that we can
pull from this source that source and really minimize the
amount of taxes that you're going to be paying.
Speaker 4 (25:37):
We've already talked about rmds, but let's talk about it
one more time. That's required minimum distribution. What's the age
for those and what can you do to try to
avoid really getting hit with a tax bill.
Speaker 7 (25:49):
So right now, the requirement required minimum distribution age is
set at seventy three. It will go up to seventy
five in a little bit. And so what that is
is that it is a calculated number based upon the
December thirty first balance of the prior year. And so
when you look at the balance on that and say, hey,
(26:12):
we're going to have about a million bucks, just to
throw out a number, they take out that million dollars
on December thirty first, and they say you're going to
be seventy three this year. So therefore, based upon a
mortality table the IRS has, you have to take out
three point seven eight percent. And so therefore you have
thirty seven eight hundred dollars that you are going to
(26:34):
be required to take out on the year that you're
seventy three. And then that percentage just keeps going up.
Speaker 4 (26:43):
And you have to keep paying taxes on that if
you don't have it in their correct place.
Speaker 3 (26:47):
Exactly.
Speaker 4 (26:48):
Yeah, So when you take a moment and you think
about thirty seven thousand dollars and what the taxes would
be on that, that's a pretty good hit.
Speaker 7 (26:56):
It is, especially when you combine that thirty seven thousand
dollars with Social Security, with pension income, with possible other
investment income for interest dividends, capital gains. So it's really
where you need to come in and have that strategy
and have that tax diversification and be able to take
(27:17):
out the income that we need to without having to
pay more taxes than we absolutely have to.
Speaker 4 (27:22):
Sure Land's great example. I think that really brings it
home for a lot of people. What's a tax value.
Speaker 7 (27:28):
Tax value is when we have a gap between your
income level and then the top of the tax bracket
that you're at. Had a great conversation with a couple
that came in this week that had a really big
tax value this year because they are just going to
(27:48):
be they're getting into retirement years, and so for them,
they could take out almost ten thousand dollars out of
an IRA and not pay any taxes on it because
we had that tax value using their standard deduction. Then
the next value was before filling out that ten percent
tax bracket, so then they can take out an additional
(28:10):
thirteen thousand dollars and then to fill up that twelve
percent tax bracket. They were taking out almost seventy eight
thousand dollars. We look at that one and say, doesn't
make sense to fill up these values right now at
twelve percent. It's a very simple question, and sometimes people
(28:30):
look at me weird to saying this seems like a
trick question, Lance, but it's really it's not would you
rather pay this income today and pay twelve percent on
this or would you rather take it out in the
future and pay fifteen percent on that? That's it's not
a trick question. It's that's what our tax laws are
(28:51):
going to be at.
Speaker 4 (28:52):
And pretty much feels like a no brainer. And again,
these are the kinds of things that Lance, I don't
know about. I just asked you, what's a tax valley?
You know? I mean, people don't know these things. This
is why you really need a partner to maximize your opportunities.
Speaker 7 (29:09):
Correct, Yeah, that's where I like to come in there
and meet with people and talk about these tax efficient
strategies and not giving more money than you absolutely have to.
You've been working hard your entire life. Why give more
to Uncle Sam than you absolutely have to. Let's keep
it all in your pockets. Let's make sure that you
(29:33):
have enough fun money in your retirement years to do
what you want to do.
Speaker 4 (29:38):
Sure, yeah, yeah, I.
Speaker 2 (29:39):
Cam if I could add to other mistakes that we
see and have seen for all the years that I've
been in the industry, is not having the right diversification,
having the wrong recipe, the wrong types of investments, and
the wrong types of accounts. You know, Yes, we're all
about loading up that four oh one K grade, but
you may get hit harder when you do have arm.
(30:00):
So having tax deferred accounts, tax free accounts, tax taxable accounts,
having a really good balance is extremely important. Another one
where I just ran into a client of mine a
few years ago.
Speaker 3 (30:12):
She came in.
Speaker 2 (30:13):
She was a single lady and somebody had talked her
into cashing out her for one K.
Speaker 3 (30:19):
And I said, you didn't cash out here for when?
Speaker 7 (30:22):
Kay?
Speaker 3 (30:22):
You just rolled it over right? No, irot.
Speaker 2 (30:25):
I cashed it out and put it in a regular account.
I said, you paid all that you had to pay
all these taxes, and she goes, yeah, I did. What
a costly mistake. You got to be careful of good advice.
There's good advice and bad advice. Said, wow, that was
bad advice.
Speaker 3 (30:39):
Another one I just.
Speaker 2 (30:40):
Had recently, they lost what other they lost their parents
and they're getting an inheritance.
Speaker 3 (30:46):
Inheritance.
Speaker 2 (30:47):
If you're listening and maybe get an inheritance, make sure
you know how to handle inherited I rays. Make sure
who we're working with lays out the options so you're
not paying Uncle Sam a bigger chunk of the taxes
than you really really have to. This is just a
few of the things that people miss.
Speaker 3 (31:04):
You mentioned tax valleys.
Speaker 2 (31:05):
You know, Kyle's on the investment team, amongst others certified
financial planners on the Human Investment team. We do tax
loss harvesting. Markets are rolling, you know, they're going down.
That's an opportunity to sell creating some tax loss harvesting
options that can minimize taxes. Lance is always involved in that.
This is we're just touching the iceberg on certain things
(31:28):
that you possibly can do. Now, it's going to be
different for different people. You have different types of money,
different amounts of money. But when we build out plans
Monte Carlo projections out to people's mid nineties, we're really
able to scale a back and say if you do this,
this is the outcome, This so much you could save
(31:48):
over thirty years, And people go, wow, that is a
big savings in dollars today comparedduct to dollars to future
value of dollars in the future. So again we're just
touching and Iceberg. But if you're not having conversations, you're
going to probably miss these opportunities.
Speaker 4 (32:05):
And Lara, it's so important to stress to our listeners
that we're not just talking about high net worth individuals.
This is everybody.
Speaker 2 (32:15):
Thanks for saying that, because that is a major misconception
in a variety of areas from a state planning to invest, well,
this is only for those that have a lot of money.
Speaker 3 (32:24):
Please, that is absolutely not true.
Speaker 2 (32:26):
Yeah, it may be different for those that have less
or more, maybe the number is just a little bit bigger,
but the concept is exactly the same. No matter what
your situation is, small, medium or large, complex or simple,
you owe it to yourself and whoever is working for you,
whoever your partner is, owes it to you to explain
these things because remember, that's why you're paying them, right.
Speaker 4 (32:49):
I think that's why you're paying them. Yeah, right, six
one two five zero four eight four zero zero. That's
how you get hold of the folks that have been
financial group folks. Give them a call right now. Give
them a call today because you can set up an appointment,
go in and chat about all these issues that we've
talked about. Everybody needs a partner in this, and the
(33:10):
folks that have and Financial Group are ready to be
your partner. When we come back, let's talk a little
bit about planning for college expenses. You know, this is
for maybe some of our younger listeners, Yes, but there's
a lot of grandparents out there who would like to
get involved and help their grandkids go to college. So
we're going to talk about the gammut, the full gamut
(33:31):
when we come back. Right here on the Haven Financial
Group Radio Show.
Speaker 1 (33:34):
Don't go too far. We're gathering more important insights and
retirement ways. Devinent the Haven Financial Group Radio Show. We'll
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kolvig and Kim Karragan. Now back to
(33:55):
the show.
Speaker 2 (33:56):
Good morning once again, and welcome to the Haven Financial Group.
Speaker 3 (34:00):
Do you show it? Thanks for listening.
Speaker 2 (34:01):
Feel free to give us a call in regards to
any of these retirement topics. Six one two five zero
four eighty four hundred or visit us online at Havenfinancialgroup
dot com. When I say all any of these retirement topics,
we do the estate planning. We have good state planning
attorney partners Carrie Anna and Keith Lance, our CPA, tax planning, medicare,
(34:24):
long term care, wealth management investments in the list goes on,
do you have all these retirement puzzle pieces? Do you
have all the pieces to the puzzle or don't you know?
Question mark, which is what a lot of people have.
We can help you out and we can help answer
those questions, and I think that's the most fulfilling part
of what we do at Haven Financial Group.
Speaker 4 (34:45):
Absolutely, we have Lance Larson with us. He's a CPA
there at Haven Financial Group. He's also a dad, a
dad who's getting ready to send your first Is that right?
Speaker 3 (34:57):
Yep?
Speaker 7 (34:58):
My oldest graduated high school this year and we'll be
going off to college in the fall. Now.
Speaker 4 (35:03):
Yeah. When we were in the break, Lance said, oh,
I know all too well about this next topic, and
I know Larry does. I certainly do you know? College
is one of the most expensive things that we parents
get involved with when it comes to our kids. There's
no two ways about that. And you know, my kids
have been out of school. My youngest has been out
(35:23):
for two years, my oldest has been out for five
and already I see the expense of college going up
just that much more since my two have been in school.
So this is something that you want to start early,
and you want to get a real clear plan on
how to go about it. And if you're a grandparent
out there and you want to get involved, you want
(35:45):
to you know, want to speak to these kids. You
want to speak to your children, maybe the parents of
these kids, and everybody sort of work together. So I
guess the first piece of advice guys would be start early.
Speaker 7 (35:57):
Exactly when you start early, especially for the kids putting
money away, that gives you the a lot of time,
and we have that power of compounding interest. And then
when these investments are happening, the market is going to
have the volativity is going to go up, it's going
to go down, but over time we can weather those
(36:17):
peaks and valleys of the market right there. And then
it also just kind of helps reduce the financial stress
knowing that you've had this amount building up and it's
going to be there when college actually comes.
Speaker 4 (36:29):
Sure, one of the big mistakes I think parents make
is they think, well, gosh, you know, you're looking at
this newborn there at the hospital. I've got a full
eighteen years to get to a saving for college, right.
Speaker 3 (36:44):
Yeah, yeah, sure.
Speaker 2 (36:45):
As my wife and I have a twenty four year old,
twenty two, twenty two and nineteen when med school, college,
this and that so and then they turn that age overnight,
as I'm sure many listeners can attest to. So any
investing or planning start right now, whether it's a little bit,
and just work its way up again. That power compound
(37:08):
interest is very powerful. And you know we're speaking to
parents and grandparents here as far as saving for college,
which in no way are we advocating that kids are
the parents or grandparents.
Speaker 3 (37:20):
Should pay for all of college.
Speaker 2 (37:22):
No, if you have the ability to do that, great,
But we don't want people to drain their retirement and
at the expense of college. So if you can help,
if you can plan for a great And even my
wife and I for the longest time we have, but
we still have a difference of opinion. Imagine that a
marriage with a difference opinion. Imagine that where she's like, well,
(37:42):
you know, we should pay for all their college.
Speaker 3 (37:45):
Well I didn't.
Speaker 2 (37:46):
I did my four year at Bethel College and back
in the day, my parents didn't pay for all my college,
and I'm glad I had skin in the game. And
so I'm a big believer of having skin in the game.
If you can pay for a great But this is
not advocating that you should or shouldn't. It's Hey, if
you have the ability to plan in advance, you're going
(38:07):
to be well served to help cover those costs or
at least some of those costs when that happens. So
I just want to point that I wanted to point.
Speaker 4 (38:14):
That out absolutely. Lance, let me ask you a little
bit about five twenty nins. I don't know if you
have been involved in that, and certainly that's your personal business,
but how do you feel about them? And is this
something that you suggest to some of your clients.
Speaker 7 (38:30):
So five twenty nine plans are a great investment vehicle
for education purposes. For the longest time, the five twenty
nine plan money was supposed to only be used for
education expenses, and then once the kid was done, sure
you could change the beneficiary from the oldest to the
next one to another family member that's going to go,
(38:54):
but it still all had to be used for education expenses.
Otherwise you'd be hit with the earnings as income plus
a penalty on your tax return for that. With the
secure at two point zero, there's a new provision in
there that allows the five twenty nine plans to now
be converted into a wrath account. So now we don't
(39:18):
just have to worry about Okay, now that my oldest
is done, now I have to use the excess money
to my number two, or now that all my kids
are done, now do I have nieces nephews hold on
to this for a new grandkid, you know, years late.
We don't have to worry about that. We can actually
(39:38):
do conversions on there and get it over to a
wrath account for the kids right there. It's also great
because there's virtually no limit to how much you can
put into a five to twenty nine plan. For parents
and grandparents, we have a gifting limit, and this is
(39:59):
just across all tax forgetting the word right there, We
have a limit just for life for every tax year,
about nineteen thousand dollars right now and for everything. So
grandparents what they can do is give that up to
nineteen thousand dollars in one year. But they also have
(40:20):
a provision where they can frontload and do five years
worth of gifting into a five to twenty nine plan,
So they can put ninety five thousand dollars in one
year into a five to twenty nine plan versus if
they wanted to use.
Speaker 5 (40:36):
A roth IRA.
Speaker 7 (40:37):
Well, now we have problems there because the kid has
to have earned income to have a WROTH account in
his name. Sure, they have called UGMA or UTMA accounts
Uniform Gift for the Miners Act or I'm blanking on
the other one the title of that one. But these
are accounts that are set up for kids that the
(41:00):
kids own it. Yes, there's no limit to put on
that one. But then on the backside, then if there's
investment income that's giving dividends, interest, any type of capital gains,
now we have tax problems there where we have kitty
tax that's going to be going on. And so when
you ask the original question is like the five twenty
(41:20):
nine plan, is that my favorite one.
Speaker 8 (41:22):
For education purposes?
Speaker 7 (41:24):
Yes, but again it's not the only one because you
can do things with ROTH accounts, especially for the teenagers
that are going out and getting their summer jobs, working
part time during the school year, and then the other
ones for younger kids. Hey, yeah, birthday gift money. Sure,
instead of having the kids go out and go buy
(41:45):
a candy bar with it and just put it into
a savings account for them and let that thing grow.
Speaker 4 (41:52):
Sure, Absolutely, that sounds great. I know in the past, Larry,
we've talked about the idea that there are even life
insurance plans now that you can save for college and
use them however you need to.
Speaker 2 (42:06):
Yeah, there's many different ways, and we want to talk
through all the different avenues that we can look at.
And that's why it's important to set up some very
clear goals. Have conversations start early.
Speaker 8 (42:18):
You know.
Speaker 2 (42:18):
I encourage those grandparents and relatives to contribute.
Speaker 3 (42:21):
You know.
Speaker 2 (42:21):
I've heard it a few times over the years where
clients in mind, yeah, we give our kids and grandkids
their nieces and nephews. Rather than give them something that
they won't remember what they got a week from now
or two weeks from now, we just put money and
could contribute to their college savings plans. I thought it's
a great idea. It makes a lot of sense. Consider
the tax tax tax liabilities that go with each one
(42:44):
of these are they is it flexible? The five twenty
nine s are more flexible. We like the roth I
raise because if you don't use it for education, it
can be great for retirement planning. It can have a
dual purpose. So I really and we really like the
roths for that as well. But because we really work
(43:06):
with those planning for retirement, Please don't jeopardize your retirement
years at the expense of hoping to pay for all
of your kids or grandkids college costs. Please don't do that.
And unfortunately, just this last week, I had a couple
that there's some younger, younger kids and maybe not even
(43:27):
younger kids that maybe like to play video games or.
Speaker 3 (43:30):
Do other things.
Speaker 2 (43:31):
They didn't want to get off the couch. And this
couple unfortunately pretty much went through all of the retirement
savings enabling the adult kids, and unfortunately, their retirement is
going to pay for it.
Speaker 3 (43:43):
I hate to see that. Don't let it happen again.
Have a plan.
Speaker 2 (43:48):
Everybody's plan is not going to look the same, but
start somewhere to get somewhere.
Speaker 4 (43:52):
Absolutely, this is just one of the many areas that
the experts that have in Financial Group can help you
with you are you know, a young parent and you're
looking to start at college savings and you're looking for
some advice. You can meet with the folks at Haven
Financial Group and they can talk to you and they
can talk to you about putting a long term plan
(44:13):
in effect at that very moment for retirement in the
years yet to come. So'll give them a call. Folks.
It is six one two five zero four eight four
zero zero six one two five zero four eight four
zero zero. Give them a call today. Be sure you
go to their website as well. It's Even Financialgroup dot
com and take a look at some of those educational
(44:34):
seminars that are coming up as the summer continues to progress.
They're open to anyone and you just need to sign up.
You don't have to be a client, but they do
like to get a head count. So again that's Hanfinancialgroup
dot com. Lance. Great to see you, like always.
Speaker 7 (44:50):
Thank Jim, thanks for having me again.
Speaker 4 (44:51):
Absolutely is great to have you Larry. It was fun
to be.
Speaker 2 (44:54):
With you, Kim. I look forward to next week. Enjoy
your week and we'll see you next week.
Speaker 4 (45:00):
Investment advisory service is offered through Guardian Well Strategies LLC,
Haven Financial Group and Guardian Well Strategies LLC are not
affiliated companies, and investments involve risk, and, unless otherwise stated,
are not guaranteed. Please consult with the qualified financial advisor
and or tax professional before implementing any strategy discussed herein
and comments regarding it safe and secure.
Speaker 1 (45:21):
Investments and guaranteed income streams only refer to fixed insurance products.
Speaker 4 (45:25):
They do not refer in any way to securities or
investment advisory products. Fixed insurance and annuity product guarantees are
subject to the claims paying ability of the issuing company.
You worked hard for your money, but do you know
how to make it work hard for you. You need
a team with experience, vigilance, and a strategy to help
you live the retirement you deserve. Find your financial safe
haven with Haven Financial Group. Today, you're listening to the
new and improved Haven Financial Group Radio Show, where we
bring you comprehensive weekly financial wisdom from the professionals. It's
(00:23):
all about helping you solve retirement problems so you can
make your nest egg last. Your tune to the Haven
Financial Group Radio Show with your host Larry Kolvig and
Kim Karrigan your guides to weekly retirement confidence. If you're
interested in protecting and growing what you have, let us
be your financial safe haven. The fuone nines are always
(00:43):
open at six point two, five oh four eighty four hundred.
Now get your financial questions ready because the Haven Financial
Group Radio Show starts now.
Speaker 2 (00:54):
Good morning, and welcome to the Haven Financial Group Radio Show.
I'm Larry Kolviig, founder and CEO of the Have and
Financial Group.
Speaker 3 (01:01):
Again, thanks for listening.
Speaker 2 (01:03):
We're going to talk about retirement like we do every week,
Kim right every week.
Speaker 3 (01:06):
Good to be with you again.
Speaker 4 (01:07):
Great to be with you as well. Right, we're going
to talk about retirement this time that we're going to
just try to remind everybody, you know, as we start
your approach July one. I think it's important that everybody
remembers some of the the updates that have occurred here
in twenty twenty five when it comes to people's retirements,
whether they are associated with taxes or we're going to
(01:28):
talk about Social Security and Kola. We're going to talk
about some of the mistakes that folks make so here
midyear you want to make sure you're not doing that.
And then we're going to address some of our maybe
younger listeners who are starting to think about saving for college.
That could also be grandma and grandpa, but you know,
those kinds of issues. So it's a great show and
it's full of lots of great information. It's great to
be with you, Larry.
Speaker 3 (01:49):
Yeah.
Speaker 2 (01:50):
Retirement, you know, it's a long term gain and every
year there's constant changes. There's probably every year there isn't
a change, and quickly your retirement plan can become outdated.
And that's why we at Haven Financial Group we really
strive to keep people up to dates either through classes
or having them in and getting them updates. You know,
today we're going to talk on social security and the
(02:11):
first segment. But there's just always changes in every facet
of retirement. Medicare has changes, and taxes are constantly changing.
So again, staying up with the times is imperative for
a retirement plan.
Speaker 4 (02:24):
Absolutely it is. I think we've got a guest with
us today, right, Mitch Moss is with us. He's a
social security retirement specialist at Haven Financial Group. Great to
have you with.
Speaker 5 (02:33):
Us, match, great to be here, Thank you very much.
Speaker 4 (02:36):
Absolutely, So we want to start talking today about social security.
COLA in twenty twenty five, would you do as a
favor and just to tell people in case they've forgotten
what COLA stands for, what it stands for and what
that's all about.
Speaker 6 (02:49):
Well, the COLA, it's an acronym, so it's cost of
living adjustment and that is that's done every year. Basically,
the consumer price index is calculated and will come up
and it's really basically it follows the inflation. So if
we have high inflation, we're typically going to get a
higher COLA increase on our social security.
Speaker 4 (03:09):
Yeah, a couple of years ago we really saw it
go up quite significantly, did we not?
Speaker 5 (03:14):
We did.
Speaker 6 (03:15):
We saw some really large increases. Now, don't hold your breath.
I don't think those are going to be coming around
anytime soon, because you know, inflation has been going downward
and that's going to be reflective of this next year's
cost of living adjustment as well.
Speaker 4 (03:29):
Now we actually get colon numbers in the fall correct
for the following year.
Speaker 5 (03:33):
That's correct.
Speaker 6 (03:34):
Typically around October is when they come out they are
saying this year is going to be on average about
two point five percent increases.
Speaker 5 (03:42):
What they're looking at might be a.
Speaker 6 (03:43):
Little bit lower, maybe two point three is I've heard
some numbers coming out as well.
Speaker 4 (03:47):
Okay, terrific. So this year, the twenty twenty four into
twenty five, what was the increase this year?
Speaker 3 (03:54):
This year?
Speaker 5 (03:55):
It was two point five percent?
Speaker 4 (03:56):
Okay, okay, and kay?
Speaker 2 (03:58):
Why that really makes a difference considering you know, we
do a lot of classes. We just this past week
we had a very well attended class at Dakota County
Technical College, and we do other places as well. Listeners
can go to our website and see all the classes
we teach maximize Social Security and tax and we discussed
in that those classes and in our one on one
(04:18):
meetings that from sixty two to sixty six social Security
grows by roughly six percent plus this cost of living adjustment,
and from sixty six to seventy it grows by approximately
eight percent plus the cost of living adjustment. And you're
right you mentioned a couple of years ago we had
an eight point seven percent increase in one year. Yes,
everything was super expensive, which is why we had an
(04:40):
eight point seven increase, But if you were in those
later latter years, you're if you were delaying, you would
have seen almost a seventeen percent increase in one year.
That is substantial. Now that we're not ever trying to
tell people to wait, just to wait, but what we
really strive to make sure they're, you know, making an
educated decision as to when they're going to take it.
(05:03):
If you're single or a married couple, you know, what
is the strategy behind that. Oftentimes the higher bread winner
may take it later and then the lower bread winner
may take it earlier. But it's really a one on
one conversation, Mitchell.
Speaker 4 (05:16):
Are you sometimes surprised that people just you know, turn
sixty two and they immediately turn it on.
Speaker 6 (05:22):
Oh absolutely, I see it all the time, and I
get people coming in They're like, I'm going to take
it at sixty two. I believe I'm entitled to it.
I should get it.
Speaker 5 (05:29):
But then I I always ask the question.
Speaker 6 (05:31):
I go, are you working? They go, well, yeah, I
have to keep working. Well, what's your earnings level? Because
there is an earnings limit if you do take it
early prior to your full retirement age, which that number
is right around twenty four twenty three four. I believe
it is right now from sixty two to your full
retirement age. So if you're making a substantial amount of money,
say sixty fifty sixty seventy thousand dollars a year, you're
(05:53):
not going to turn your socialecurity on at age sixty.
Speaker 4 (05:55):
Two, right, So let me ask you. If you let's
say you do turn it on because you've decided you're
going to retire, and then at sixty five you're offered
an opportunity as a consultant and you would really like
to take that. What happens to your social security?
Speaker 6 (06:11):
Then, well, the unfortunate thing is you have a twelve
month window to make any changes with your social security
once you start it. So from sixty two to your
full retermin age, you have a twelve month window. So
if there's the opportunity that you think you might be
going back to work, whether it's in a year or
two years, come on in have that conversation, because again,
we might want to be living off with some of
(06:31):
your funds in the advent that we might actually get
go back to work, because we don't want to start
that benefit because you'll stop earning delayed credits on your
Social Security and if you're making a larger sum of money,
you won't see a dime of your sociecurity because they'll
remove it all from you.
Speaker 4 (06:46):
Okay, So that and that means from that point forward'll
they'll take it away. So you know, and then when
I'm seventy eight, I'm still not getting Social Security.
Speaker 7 (06:54):
No, you're still getting your Social Security.
Speaker 4 (06:56):
It's through that year, I see.
Speaker 6 (06:58):
Okay, if the contract goes for one year, well you
might not get any socialecurity that year because you're your
earnings were higher. Okay, next year you don't have any earnings,
your soci security will pick back up again. They look
at it as on a month to month basis, So
again it's one of those things. You have an earnings
cap again, like it's twenty three four. If you're over that,
(07:18):
for every two dollars over twenty three four, they're going
to take a dollar of your social security way, so
think of it as if you make thirty thousand overs,
they're going to take fifteen thousand to that check away.
Speaker 4 (07:27):
Sure. Absolutely, Well, it seems like to me this is
all the more reason that you want to partner with
somebody like you folks that Haven financial group, because to
make decisions about when to take Social Security they can
really be detrimental. That's a really important decision to make.
Speaker 6 (07:43):
Well, the question I usually ask my clients, I go,
would you take a reduction in your pension? If you
had a pension, would you take a twenty five percent reduction?
And the answer I always get is absolutely not. I
worked hard for that pension. Well, you also worked hard
for your social security right, even though they consider it
attax and you know it was a kind of a
forced savings account if you will. But again it's yours.
How's the best? How are we going to get the
(08:05):
best out of it? And that's really what I like
to do with my clients, show them what we can do.
What's the reasoning behind delaying living off of maybe some
of your qualified funds first and then turning social Security
on later to max out that benefit for the rest
of your life.
Speaker 4 (08:19):
Mitch Moss is our guest. He's a social security retirement
specialist with Haven Financial Group. So Mitch, let's talk about
social security and its stability, because that, certainly, I think
is a real fear for a lot of people who
are getting close to retirement age. It may be the
deciding factor for a lot of people who just decided
sixty two, I'm going to start to draw.
Speaker 6 (08:40):
Well, it's always a consideration because every since the inception
of Social Security, they've had to make changes to make
it more soluble, right, so none of us are going
to like any of the changes that they do. So,
for instance, when you first were able to start collecting
sociecurity was age sixty five.
Speaker 5 (08:54):
That was your full retirement age. Then they made some changes, then.
Speaker 6 (08:58):
It went to sixty six, then it went from sixty
six in some months now it's sixty seven. One of
the most logical things that me and Larry.
Speaker 5 (09:05):
Have also talked about.
Speaker 6 (09:07):
You know, we don't know because they're not going to
obviously broadcast this to us, but we think that they're
probably going to change the age in which you're qualified
for full retirement again to make it soluble. But it's
not going anywhere in my opinion. Obviously, I don't know
what the future holds, but the majority of the world
(09:27):
in the United States needs their social security benefit, right
They've got options on the table. Obviously, we have to
wait till Congress hands those down until we actually know sure.
Speaker 4 (09:39):
Absolutely, Now, Larry, that's something you've said many times.
Speaker 2 (09:42):
Yeah, Kim, I think the takeaway from this segment is
for the listeners if they have any Social Security questions, worries, concerns, reservations, whatever,
come on in and visit with Mitch.
Speaker 3 (09:53):
I know Mitch has more meetings on social security.
Speaker 2 (09:56):
Anybody that comes in will have a detailed conversation with
him or any of us and holistically with social security,
how does it fit into your retirement puzzle.
Speaker 3 (10:06):
It's a big piece of it.
Speaker 2 (10:07):
I'll tell you this that social security makes up thirty
to forty percent of the average Americans retirement income.
Speaker 3 (10:13):
So it's a big deal.
Speaker 2 (10:15):
So come on in, you'll walk out with a social
Security report, maximization report, it's a great roadmap. It's very
very helpful, and I think they'll find that conversation very
very very very helpful in the big picture, because lots
of people have questions and that's why they come to
our classes.
Speaker 4 (10:32):
Absolutely well, let's tell everybody how they can see Mitch.
They can call six one two five zero four eighty
four hundred to tell them that you've heard us here
on the radio. Tell them that you've got some questions
about social security. Be sure you come in and sit
down with some of the specialists there at Even Financial Group.
Talk a little bit more about your retirement plans, what
(10:53):
you're looking for. Make sure they're a perfect fit for
you and you're a perfect fit for them. Again, it's
six one two five zero four for zero zero. Mitch,
thanks very much, great information.
Speaker 5 (11:04):
Well, thank you, Kim. I appreciate you guys having me.
Speaker 4 (11:06):
On absolutely Larry, when we come back, let's talk a
little bit more about taxes, because everybody wants to talk
about taxes, don't.
Speaker 3 (11:13):
You think, oh sure, why wouldn't we.
Speaker 4 (11:18):
This is the Haven Financial Group Radio show.
Speaker 1 (11:20):
Don't go too far. We're gathering more important insights and
retirement ways. Devin the Haven Financial Group Radio Show. We'll
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kulvig and Kim Karagan. Now back to
(11:41):
the show.
Speaker 3 (11:42):
Welcome back listeners.
Speaker 2 (11:43):
My name is Larry Kolvig, founder and CEO of the
Haven Financial Group, And if you're just tuning in, you're
listening to the Haven Financial Group Radio Show, wherever week
we discuss crucial retirement and financial topics that can make
the difference between surviving retirement and thriving through those golden years.
Speaker 3 (12:00):
Kim, we got Lance Lurson, our in.
Speaker 2 (12:01):
House CPA at Aven Financial Group on for the rest
of the show. Here because we have conversation. We're going
to have conversations on taxes and we know that's our
relevant piece to the retirement puzzle and probably will affect
retirees more than any time in any time in their past,
which I know is not uplifting. But let's talk about
maybe some of the things that we can do to
(12:24):
avoid Uncle Sam getting the biggest part of our pocketbook.
Speaker 4 (12:27):
Yes, absolutely, it's great to have you, like always really
appreciate it. And when we giggle because we say taxes
in your name in the same sentence. Please don't take
that as an offense. And no one means that.
Speaker 3 (12:38):
He doesn't kim. He doesn't.
Speaker 4 (12:39):
He's a guy who wanted a dinner party, that's for sure.
Speaker 7 (12:46):
All right.
Speaker 4 (12:46):
Let's talk a little bit first off about taxes in
twenty twenty five. There have there been a few changes
that retirees really need to be aware of, and lance
we're doing this with the backdrop of the idea that
we're going into the second half of the year July one,
This is a new fiscal year for a lot of people,
so we thought we would just update folks.
Speaker 7 (13:02):
Yeah, so for twenty twenty five right now, it's kind
of the same thing we've been having for the last
for the last few years under the tax huts and jobsack.
There is, as everyone knows, there is the tax laws
that are going through for the big beautiful bill that
they are working on. The House has passed a version
(13:24):
of it, the Senate has worked on a version of it.
But both versions are not the same, and so now
there has to be some sort of reconciliation between those
two and unfortunately, at this time we just we don't
know what's going to shake out of that. So for
right now, the best advice is to just plan on
(13:45):
what we know and take action with what we do know,
and then we can also keep an eye towards the future, saying, hey,
this is what's possibly going to come happen. The best
thing that happens for us is that the tax rates
stay as low as they are right now, the standard
deduction stays pretty high. Worst case scenario, we go back
(14:08):
to the old ways of doing things, so the tax
rates go up and standard deduction goes down. And because
of that, we just we want to make sure we
have the proper plans in place.
Speaker 4 (14:19):
Sure so that shift in tax brackets could happen next year.
In fact, it's scheduled to happen right next year unless something.
Speaker 5 (14:26):
Is done correct.
Speaker 7 (14:28):
So as it stands right now today that our ten twelve,
twenty two to twenty four percent tax brackets will be
going up to ten, fifteen, twenty five, and twenty eight
and that's what the new tax law is going to
try to address, and we'll see if they can keep
those tax rates down for us. But in the meantime,
(14:49):
this is the last year of the tax cuts and
Jobs Act. So this is the year that we're going
to be taking a look and saying, hey, this is
when we can do our roth conversions, pay them at
these lower tax rates. Uh, this is when people are
trying to double up on charitable contributions. So one of
the strategies that people are talking about for this year
(15:12):
is that if you're a charitable person and you're and
you want to give to church or other charities, maybe
we hold off on that in twenty twenty five and
wait until twenty twenty six when it's potentially going to
be a little bit better off for us tax wise
to do things like that. Sure.
Speaker 4 (15:28):
Absolutely, So let's talk about the best advice that you
give to people who are looking at retiring, you know
in the next let's say two years. What's the number
one advice you give them when it comes to taxes.
Speaker 7 (15:41):
Lands One is to kind of just go into it
with eyes wide open, knowing what your income source is
going to be and what the tax ramifications of those
sources are going to be. So mostly retirement, we always
talk about four to one k in the iras well.
These ones are all going to be one hundred percent taxable.
But when we pull that money in there. That also
(16:04):
affects a number one income source for a lot of people,
which is their social security. So do we want to
take social security right now? Do we want to wait
on that? Just understanding those tax implications, and so that's
why you want to have that conversation and be able
to understand what are you going to be your income sources.
Speaker 4 (16:22):
You know a lot of people think that they're going
to pay a lot less tax when they get to
retirement age. That's not necessarily true.
Speaker 7 (16:28):
Is it not necessarily Because when you get into the
retirement years and you have to start taking those required
minimum distributions. There's couples that have been saving and saving
and saving, and now they hit seventy three and they
have to take their required required minimum distributions, which is
(16:50):
about four percent give or take in the first year.
Then they look at it and say, oh, my goodness,
I'm getting a more income than I that I'm getting
more income right now than I did while I was
working because of these requirement and distributions and social security
payments and pensions. It becomes a good problem to have.
Speaker 4 (17:14):
But a problem, nonetheless, Is there a way around that lance?
And are there you know, is there some advice that
you start to give people, how do you work around it?
Speaker 7 (17:23):
So in the first part tech of the retirement years
for tax purposes, what we'd like to do is possibly
delay Social Security so that we can take more out
of the full, full, fully taxable IRA accounts. We start
using that if we don't need the actual money, we
can start looking at ROTH conversions to help reduce those
(17:45):
requirement and distributions in the future. Other ideas would be,
once you have to take those requirement distributions, looking at
possible qualified charitable contributions to church and to other organizations
and use that type of money so that it doesn't
(18:06):
become taxable.
Speaker 5 (18:06):
At that point.
Speaker 4 (18:09):
Larry, did you want to add something?
Speaker 3 (18:10):
Yeah?
Speaker 2 (18:11):
I do, because this tax discussion of these things that
we're mentioning, they may seem foreign to some people. Because
what I have the observation I've seen, especially since COVID,
is there's a lack of tax planning that's going on
with many folks. You get your taxes prepared, you may
bring your box of statements to your tax prepared drop
(18:32):
off pickup. I hear this all the time. We don't
even talk to our tax preparer anymore. Well, as you
get close to retirement, and retirement tax planning becomes that
much more important. You know, all those years you worked,
you put it into the four to one K and things.
Maybe taxes were fairly simple. Now you're looking at Social Security,
you look at R and DS. We're big into forward
(18:53):
thinking tax planning, and people just starting doing it because
they're not getting that attention. We want to get together
a couple times during the year. We want to map
out a plan for retirees, distribution income, how tax planning,
What is the best accounts to draw from the most
tax efficient way possible. And if you're just a drop
off pickup and not getting that attention, you're probably getting
(19:17):
this when you get your taxes done. Oh my goodness,
I didn't know I owed this much money.
Speaker 3 (19:21):
Every year? I owe money, this, this, this.
Speaker 2 (19:24):
My solution would be why not fix the problem rather
than having the same problem every year. But if you're
only getting together or not getting together and just dropping off,
you're never going to get that attention. And guess what,
You're also going to miss opportunities like ROTH conversions, IRA distributions,
low tax brackets, zero capital gains tax, and a whole
(19:47):
variety of other things just because you're not in the know,
because you don't have a partner to help you.
Speaker 4 (19:53):
Sure, so let me ask you this here we come
on July the first, Is it it's too late to
start preparing for next year? And you know, because I
know after December it certainly is too late. Is it
too late right now?
Speaker 8 (20:09):
Absolutely not, kim Uh.
Speaker 7 (20:11):
This is actually probably one of the better times to
kind of have a check in with your income for
this year, because at halfway through the year, you kind
of you know where the first half has been, you
have a reasonable idea then what is the second half
going to look like? And so this is a great
time for the check in, and especially for those who
happen to still be working and still going to be
(20:33):
about two three four years away from retirement, that hey,
we can look at some things and get some planning
going on right now, that this might be the time
to do some of the roth conversions depending on what
your income is, And we do that by looking at
where your W two is sitting at right now. You
have your PA stubbs that say what you have here
(20:53):
to date, and then from there you can kind of
project out where your income is going to be at
and then make the appropriate plans.
Speaker 4 (21:01):
Super So this is the time, folks. You just heard
Larry explaining it. You know a lot of people just
drop it off, you know, next February, and then they
go to pick it up their tax returns and they're
very unhappy. So if you're somebody who wants to get
ahead of that, you just heard Lance say, this is
the time to start preparing. So give the folks at
(21:22):
Haven Financial Group a call. Not only can you talk
to them about your tax issues, but you can talk
to them about all of your retirement needs. That number
is six' one two five zero four eight four zero zero.
Let me give it to you again, six one two
five zero four eight four zero zero. Till that you
heard the three of us on the radio, and you'd
like to set up an appointment, come in, talk to Lance,
(21:45):
talk to Larry, talk to some of the specialists there
at the Haven Financial Group. When we come back, Lance
is going to stay with us. We're going to talk
more about costly mistakes when it comes to taxes that
retirees make as they head into retirement and then once
they are in retirement. So be sure to stay with us, folks,
This is the Haven Financial Group Radio Show.
Speaker 1 (22:06):
Ready to find your financial safe Haven. Your dream retirement
is in reach. Don't go away. The Haven Financial Group
Radio Show will.
Speaker 5 (22:13):
Be right back.
Speaker 1 (22:16):
Are you worried that your financial strategy might be missing something, Well,
you're in the right place. Larrikolvig is back and ready
to help you find your financial safe Haven.
Speaker 2 (22:28):
Good morning once again, and welcome to the Haven Financial
Group Radio Show.
Speaker 3 (22:32):
Thanks for listening.
Speaker 2 (22:32):
Feel free to give us a call at six one
two five zero four eight four zero zero, or visit
us online at Havenfinancialgroup dot com. Check out all our
classes if they're well attended, we're inviting you right now.
You can check out social security and tax some investment classes,
medicare made simple classes, and a variety of other classes
(22:54):
as well. We were big into education. We have been
for the ten years. This is our Behaven Financial Group's
ten year anniversary, and I don't see us ever getting
away from the education piece because it's how people learn,
and I think it's a critically important. You know, Kim,
that last segment we talked about taxes, and I just
(23:14):
wanted to add one thing to that is I find
people I'm very cost conscious and I also, what is
the added value we're getting from whoever we're working with.
If you're listening and you're not getting the attention from
your CPA or tax prepare and maybe you're getting paying
way too much for what you're getting. And I know
there's a lot of big box tax prepare houses out
(23:37):
there that are charging a lot of money and you're
not getting anything for that other than plug in and
print it out. Okay, you deserve more in tax planning,
forward thinking tax planning, and that's where I think we
really really could.
Speaker 4 (23:52):
Help absolutely six one two five zero four eight four
zero zero. That's how you get hold of our friends
at Haven Financial Group. We want to continue the discussion
about taxes. Lance Larson, CPA there at Haven Financial Group
is also our guest today. I want to talk about
some of those costly retirement tax mistakes that people made.
Speaker 7 (24:13):
Now.
Speaker 4 (24:13):
Lance, I know that we've spoken about some of these,
but maybe we could just sort of reiterate some of them,
because I think people can't hear this enough. By starting
number one, about the fact that you know you do
have to make some changes, you have to approach taxes
differently once you get into retirement.
Speaker 8 (24:30):
Yeah, so kind of like what we talked about before,
when you get to those pre retirement years, so we're
looking you know, probably somewhere at two to five years
out there.
Speaker 7 (24:42):
Some of the mistakes that people make is that they've
been doing the four one K and just been focusing
solely on that, so that when they get to their
retirement years, all they have is IRA and four one
K money and that's going to be one hundred percent taxable.
What they've done is they've kind of failed to create
(25:02):
tax diversification for themselves. Well, that's when looking at that
pre retirement years there that you can start looking at say, hey,
do we really need to always contribute to that four
to one k. Maybe it might be better to use
the Wroth four one k at work, might be better
to put money into a non qualified account so that
(25:23):
when you get to those retirement years that we can
have that tax diversification going on, and that we can
pull from this source that source and really minimize the
amount of taxes that you're going to be paying.
Speaker 4 (25:37):
We've already talked about rmds, but let's talk about it
one more time. That's required minimum distribution. What's the age
for those and what can you do to try to
avoid really getting hit with a tax bill.
Speaker 7 (25:49):
So right now, the requirement required minimum distribution age is
set at seventy three. It will go up to seventy
five in a little bit. And so what that is
is that it is a calculated number based upon the
December thirty first balance of the prior year. And so
when you look at the balance on that and say, hey,
(26:12):
we're going to have about a million bucks, just to
throw out a number, they take out that million dollars
on December thirty first, and they say you're going to
be seventy three this year. So therefore, based upon a
mortality table the IRS has, you have to take out
three point seven eight percent. And so therefore you have
thirty seven eight hundred dollars that you are going to
(26:34):
be required to take out on the year that you're
seventy three. And then that percentage just keeps going up.
Speaker 4 (26:43):
And you have to keep paying taxes on that if
you don't have it in their correct place.
Speaker 3 (26:47):
Exactly.
Speaker 4 (26:48):
Yeah, So when you take a moment and you think
about thirty seven thousand dollars and what the taxes would
be on that, that's a pretty good hit.
Speaker 7 (26:56):
It is, especially when you combine that thirty seven thousand
dollars with Social Security, with pension income, with possible other
investment income for interest dividends, capital gains. So it's really
where you need to come in and have that strategy
and have that tax diversification and be able to take
(27:17):
out the income that we need to without having to
pay more taxes than we absolutely have to.
Speaker 4 (27:22):
Sure Land's great example. I think that really brings it
home for a lot of people. What's a tax value.
Speaker 7 (27:28):
Tax value is when we have a gap between your
income level and then the top of the tax bracket
that you're at. Had a great conversation with a couple
that came in this week that had a really big
tax value this year because they are just going to
(27:48):
be they're getting into retirement years, and so for them,
they could take out almost ten thousand dollars out of
an IRA and not pay any taxes on it because
we had that tax value using their standard deduction. Then
the next value was before filling out that ten percent
tax bracket, so then they can take out an additional
(28:10):
thirteen thousand dollars and then to fill up that twelve
percent tax bracket. They were taking out almost seventy eight
thousand dollars. We look at that one and say, doesn't
make sense to fill up these values right now at
twelve percent. It's a very simple question, and sometimes people
(28:30):
look at me weird to saying this seems like a
trick question, Lance, but it's really it's not would you
rather pay this income today and pay twelve percent on
this or would you rather take it out in the
future and pay fifteen percent on that? That's it's not
a trick question. It's that's what our tax laws are
(28:51):
going to be at.
Speaker 4 (28:52):
And pretty much feels like a no brainer. And again,
these are the kinds of things that Lance, I don't
know about. I just asked you, what's a tax valley?
You know? I mean, people don't know these things. This
is why you really need a partner to maximize your opportunities.
Speaker 7 (29:09):
Correct, Yeah, that's where I like to come in there
and meet with people and talk about these tax efficient
strategies and not giving more money than you absolutely have to.
You've been working hard your entire life. Why give more
to Uncle Sam than you absolutely have to. Let's keep
it all in your pockets. Let's make sure that you
(29:33):
have enough fun money in your retirement years to do
what you want to do.
Speaker 4 (29:38):
Sure, yeah, yeah, I.
Speaker 2 (29:39):
Cam if I could add to other mistakes that we
see and have seen for all the years that I've
been in the industry, is not having the right diversification,
having the wrong recipe, the wrong types of investments, and
the wrong types of accounts. You know, Yes, we're all
about loading up that four oh one K grade, but
you may get hit harder when you do have arm.
(30:00):
So having tax deferred accounts, tax free accounts, tax taxable accounts,
having a really good balance is extremely important. Another one
where I just ran into a client of mine a
few years ago.
Speaker 3 (30:12):
She came in.
Speaker 2 (30:13):
She was a single lady and somebody had talked her
into cashing out her for one K.
Speaker 3 (30:19):
And I said, you didn't cash out here for when?
Speaker 7 (30:22):
Kay?
Speaker 3 (30:22):
You just rolled it over right? No, irot.
Speaker 2 (30:25):
I cashed it out and put it in a regular account.
I said, you paid all that you had to pay
all these taxes, and she goes, yeah, I did. What
a costly mistake. You got to be careful of good advice.
There's good advice and bad advice. Said, wow, that was
bad advice.
Speaker 3 (30:39):
Another one I just.
Speaker 2 (30:40):
Had recently, they lost what other they lost their parents
and they're getting an inheritance.
Speaker 3 (30:46):
Inheritance.
Speaker 2 (30:47):
If you're listening and maybe get an inheritance, make sure
you know how to handle inherited I rays. Make sure
who we're working with lays out the options so you're
not paying Uncle Sam a bigger chunk of the taxes
than you really really have to. This is just a
few of the things that people miss.
Speaker 3 (31:04):
You mentioned tax valleys.
Speaker 2 (31:05):
You know, Kyle's on the investment team, amongst others certified
financial planners on the Human Investment team. We do tax
loss harvesting. Markets are rolling, you know, they're going down.
That's an opportunity to sell creating some tax loss harvesting
options that can minimize taxes. Lance is always involved in that.
This is we're just touching the iceberg on certain things
(31:28):
that you possibly can do. Now, it's going to be
different for different people. You have different types of money,
different amounts of money. But when we build out plans
Monte Carlo projections out to people's mid nineties, we're really
able to scale a back and say if you do this,
this is the outcome, This so much you could save
(31:48):
over thirty years, And people go, wow, that is a
big savings in dollars today comparedduct to dollars to future
value of dollars in the future. So again we're just
touching and Iceberg. But if you're not having conversations, you're
going to probably miss these opportunities.
Speaker 4 (32:05):
And Lara, it's so important to stress to our listeners
that we're not just talking about high net worth individuals.
This is everybody.
Speaker 2 (32:15):
Thanks for saying that, because that is a major misconception
in a variety of areas from a state planning to invest, well,
this is only for those that have a lot of money.
Speaker 3 (32:24):
Please, that is absolutely not true.
Speaker 2 (32:26):
Yeah, it may be different for those that have less
or more, maybe the number is just a little bit bigger,
but the concept is exactly the same. No matter what
your situation is, small, medium or large, complex or simple,
you owe it to yourself and whoever is working for you,
whoever your partner is, owes it to you to explain
these things because remember, that's why you're paying them, right.
Speaker 4 (32:49):
I think that's why you're paying them. Yeah, right, six
one two five zero four eight four zero zero. That's
how you get hold of the folks that have been
financial group folks. Give them a call right now. Give
them a call today because you can set up an appointment,
go in and chat about all these issues that we've
talked about. Everybody needs a partner in this, and the
(33:10):
folks that have and Financial Group are ready to be
your partner. When we come back, let's talk a little
bit about planning for college expenses. You know, this is
for maybe some of our younger listeners, Yes, but there's
a lot of grandparents out there who would like to
get involved and help their grandkids go to college. So
we're going to talk about the gammut, the full gamut
(33:31):
when we come back. Right here on the Haven Financial
Group Radio Show.
Speaker 1 (33:34):
Don't go too far. We're gathering more important insights and
retirement ways. Devinent the Haven Financial Group Radio Show. We'll
be right back. Stick around. You've got questions, We've got answers.
Your tune to the Haven Financial Group Radio Show with
your host Larry Kolvig and Kim Karragan. Now back to
(33:55):
the show.
Speaker 2 (33:56):
Good morning once again, and welcome to the Haven Financial Group.
Speaker 3 (34:00):
Do you show it? Thanks for listening.
Speaker 2 (34:01):
Feel free to give us a call in regards to
any of these retirement topics. Six one two five zero
four eighty four hundred or visit us online at Havenfinancialgroup
dot com. When I say all any of these retirement topics,
we do the estate planning. We have good state planning
attorney partners Carrie Anna and Keith Lance, our CPA, tax planning, medicare,
(34:24):
long term care, wealth management investments in the list goes on,
do you have all these retirement puzzle pieces? Do you
have all the pieces to the puzzle or don't you know?
Question mark, which is what a lot of people have.
We can help you out and we can help answer
those questions, and I think that's the most fulfilling part
of what we do at Haven Financial Group.
Speaker 4 (34:45):
Absolutely, we have Lance Larson with us. He's a CPA
there at Haven Financial Group. He's also a dad, a
dad who's getting ready to send your first Is that right?
Speaker 3 (34:57):
Yep?
Speaker 7 (34:58):
My oldest graduated high school this year and we'll be
going off to college in the fall. Now.
Speaker 4 (35:03):
Yeah. When we were in the break, Lance said, oh,
I know all too well about this next topic, and
I know Larry does. I certainly do you know? College
is one of the most expensive things that we parents
get involved with when it comes to our kids. There's
no two ways about that. And you know, my kids
have been out of school. My youngest has been out
(35:23):
for two years, my oldest has been out for five
and already I see the expense of college going up
just that much more since my two have been in school.
So this is something that you want to start early,
and you want to get a real clear plan on
how to go about it. And if you're a grandparent
out there and you want to get involved, you want
(35:45):
to you know, want to speak to these kids. You
want to speak to your children, maybe the parents of
these kids, and everybody sort of work together. So I
guess the first piece of advice guys would be start early.
Speaker 7 (35:57):
Exactly when you start early, especially for the kids putting
money away, that gives you the a lot of time,
and we have that power of compounding interest. And then
when these investments are happening, the market is going to
have the volativity is going to go up, it's going
to go down, but over time we can weather those
(36:17):
peaks and valleys of the market right there. And then
it also just kind of helps reduce the financial stress
knowing that you've had this amount building up and it's
going to be there when college actually comes.
Speaker 4 (36:29):
Sure, one of the big mistakes I think parents make
is they think, well, gosh, you know, you're looking at
this newborn there at the hospital. I've got a full
eighteen years to get to a saving for college, right.
Speaker 3 (36:44):
Yeah, yeah, sure.
Speaker 2 (36:45):
As my wife and I have a twenty four year old,
twenty two, twenty two and nineteen when med school, college,
this and that so and then they turn that age overnight,
as I'm sure many listeners can attest to. So any
investing or planning start right now, whether it's a little bit,
and just work its way up again. That power compound
(37:08):
interest is very powerful. And you know we're speaking to
parents and grandparents here as far as saving for college,
which in no way are we advocating that kids are
the parents or grandparents.
Speaker 3 (37:20):
Should pay for all of college.
Speaker 2 (37:22):
No, if you have the ability to do that, great,
But we don't want people to drain their retirement and
at the expense of college. So if you can help,
if you can plan for a great And even my
wife and I for the longest time we have, but
we still have a difference of opinion. Imagine that a
marriage with a difference opinion. Imagine that where she's like, well,
(37:42):
you know, we should pay for all their college.
Speaker 3 (37:45):
Well I didn't.
Speaker 2 (37:46):
I did my four year at Bethel College and back
in the day, my parents didn't pay for all my college,
and I'm glad I had skin in the game. And
so I'm a big believer of having skin in the game.
If you can pay for a great But this is
not advocating that you should or shouldn't. It's Hey, if
you have the ability to plan in advance, you're going
(38:07):
to be well served to help cover those costs or
at least some of those costs when that happens. So
I just want to point that I wanted to point.
Speaker 4 (38:14):
That out absolutely. Lance, let me ask you a little
bit about five twenty nins. I don't know if you
have been involved in that, and certainly that's your personal business,
but how do you feel about them? And is this
something that you suggest to some of your clients.
Speaker 7 (38:30):
So five twenty nine plans are a great investment vehicle
for education purposes. For the longest time, the five twenty
nine plan money was supposed to only be used for
education expenses, and then once the kid was done, sure
you could change the beneficiary from the oldest to the
next one to another family member that's going to go,
(38:54):
but it still all had to be used for education expenses.
Otherwise you'd be hit with the earnings as income plus
a penalty on your tax return for that. With the
secure at two point zero, there's a new provision in
there that allows the five twenty nine plans to now
be converted into a wrath account. So now we don't
(39:18):
just have to worry about Okay, now that my oldest
is done, now I have to use the excess money
to my number two, or now that all my kids
are done, now do I have nieces nephews hold on
to this for a new grandkid, you know, years late.
We don't have to worry about that. We can actually
(39:38):
do conversions on there and get it over to a
wrath account for the kids right there. It's also great
because there's virtually no limit to how much you can
put into a five to twenty nine plan. For parents
and grandparents, we have a gifting limit, and this is
(39:59):
just across all tax forgetting the word right there, We
have a limit just for life for every tax year,
about nineteen thousand dollars right now and for everything. So
grandparents what they can do is give that up to
nineteen thousand dollars in one year. But they also have
(40:20):
a provision where they can frontload and do five years
worth of gifting into a five to twenty nine plan,
So they can put ninety five thousand dollars in one
year into a five to twenty nine plan versus if
they wanted to use.
Speaker 5 (40:36):
A roth IRA.
Speaker 7 (40:37):
Well, now we have problems there because the kid has
to have earned income to have a WROTH account in
his name. Sure, they have called UGMA or UTMA accounts
Uniform Gift for the Miners Act or I'm blanking on
the other one the title of that one. But these
are accounts that are set up for kids that the
(41:00):
kids own it. Yes, there's no limit to put on
that one. But then on the backside, then if there's
investment income that's giving dividends, interest, any type of capital gains,
now we have tax problems there where we have kitty
tax that's going to be going on. And so when
you ask the original question is like the five twenty
(41:20):
nine plan, is that my favorite one.
Speaker 8 (41:22):
For education purposes?
Speaker 7 (41:24):
Yes, but again it's not the only one because you
can do things with ROTH accounts, especially for the teenagers
that are going out and getting their summer jobs, working
part time during the school year, and then the other
ones for younger kids. Hey, yeah, birthday gift money. Sure,
instead of having the kids go out and go buy
(41:45):
a candy bar with it and just put it into
a savings account for them and let that thing grow.
Speaker 4 (41:52):
Sure, Absolutely, that sounds great. I know in the past, Larry,
we've talked about the idea that there are even life
insurance plans now that you can save for college and
use them however you need to.
Speaker 2 (42:06):
Yeah, there's many different ways, and we want to talk
through all the different avenues that we can look at.
And that's why it's important to set up some very
clear goals. Have conversations start early.
Speaker 8 (42:18):
You know.
Speaker 2 (42:18):
I encourage those grandparents and relatives to contribute.
Speaker 3 (42:21):
You know.
Speaker 2 (42:21):
I've heard it a few times over the years where
clients in mind, yeah, we give our kids and grandkids
their nieces and nephews. Rather than give them something that
they won't remember what they got a week from now
or two weeks from now, we just put money and
could contribute to their college savings plans. I thought it's
a great idea. It makes a lot of sense. Consider
the tax tax tax liabilities that go with each one
(42:44):
of these are they is it flexible? The five twenty
nine s are more flexible. We like the roth I
raise because if you don't use it for education, it
can be great for retirement planning. It can have a
dual purpose. So I really and we really like the
roths for that as well. But because we really work
(43:06):
with those planning for retirement, Please don't jeopardize your retirement
years at the expense of hoping to pay for all
of your kids or grandkids college costs. Please don't do that.
And unfortunately, just this last week, I had a couple
that there's some younger, younger kids and maybe not even
(43:27):
younger kids that maybe like to play video games or.
Speaker 3 (43:30):
Do other things.
Speaker 2 (43:31):
They didn't want to get off the couch. And this
couple unfortunately pretty much went through all of the retirement
savings enabling the adult kids, and unfortunately, their retirement is
going to pay for it.
Speaker 3 (43:43):
I hate to see that. Don't let it happen again.
Have a plan.
Speaker 2 (43:48):
Everybody's plan is not going to look the same, but
start somewhere to get somewhere.
Speaker 4 (43:52):
Absolutely, this is just one of the many areas that
the experts that have in Financial Group can help you
with you are you know, a young parent and you're
looking to start at college savings and you're looking for
some advice. You can meet with the folks at Haven
Financial Group and they can talk to you and they
can talk to you about putting a long term plan
(44:13):
in effect at that very moment for retirement in the
years yet to come. So'll give them a call. Folks.
It is six one two five zero four eight four
zero zero six one two five zero four eight four
zero zero. Give them a call today. Be sure you
go to their website as well. It's Even Financialgroup dot
com and take a look at some of those educational
(44:34):
seminars that are coming up as the summer continues to progress.
They're open to anyone and you just need to sign up.
You don't have to be a client, but they do
like to get a head count. So again that's Hanfinancialgroup
dot com. Lance. Great to see you, like always.
Speaker 7 (44:50):
Thank Jim, thanks for having me again.
Speaker 4 (44:51):
Absolutely is great to have you Larry. It was fun
to be.
Speaker 2 (44:54):
With you, Kim. I look forward to next week. Enjoy
your week and we'll see you next week.
Speaker 4 (45:00):
Investment advisory service is offered through Guardian Well Strategies LLC,
Haven Financial Group and Guardian Well Strategies LLC are not
affiliated companies, and investments involve risk, and, unless otherwise stated,
are not guaranteed. Please consult with the qualified financial advisor
and or tax professional before implementing any strategy discussed herein
and comments regarding it safe and secure.
Speaker 1 (45:21):
Investments and guaranteed income streams only refer to fixed insurance products.
Speaker 4 (45:25):
They do not refer in any way to securities or
investment advisory products. Fixed insurance and annuity product guarantees are
subject to the claims paying ability of the issuing company.
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