Summary: Episode 203: David Bezar kicks off this episode with a recap of last week’s much-talked-about Social Security-focused session, where listeners poured in texts, benefiting from the white paper we shared. The massive engagement confirmed our belief in the positive impact we were making.
Taking a cue from that, today’s show presents another ‘not-to-miss’ playbook — “Thrive Retirement Tax Playbook: Important Tax Strategies for Retirees.” Our 2023 edition, packed with 20 pages of critical information. Text the word ‘tax plan’ to 215-999-3272 to get your hands on it! 📖
Why focus on tax? As David aptly mentions, while the tax is a necessary ‘evil’ funding vital community services, nobody enjoys paying more than they owe. The surprising fact? Taxes haunt you even in retirement! A shift from the accumulation phase (gathering and growing assets) of working years to the distribution phase in retirement demands a unique strategy.
Our hosts, David, Bret and Joe deep-dive into this change in mindset. The conversation moves from simple tax planning to understanding the distribution strategy, ensuring you’re maximizing your benefits without paying unnecessary taxes.
Whether you’re approaching retirement or are already enjoying your golden years, it’s never too late to optimize your tax strategy. If you’ve not started yet, remember — the best time was yesterday; the next best time is NOW!
Tune in for an engaging, informative session, and let’s demystify the tax maze together.🎧
Joe Krause
Welcome everyone to another edition of roadmap to retirement to radio show David, I want to go right to you come out of the box and put the listening audience on alert. A another great playbook or book of information that people can get. And they all they need to do is text in the results or the opportunity for people to text in to get information that we’re providing, I think is a win. And we’re going to roll it out again today.
David Bezar
Yeah, definitely we we had an overwhelming response to last week show. That show was all things Social Security. And we didn’t expect it. But you know, the texts were blowing up and hopefully everybody received their copy that did text in. It was a great brochure that we put together. Everything related Social Security, we actually had a lot of people texting in after they received it with additional questions that we were responding to. And some great questions as well. Things that you could see, if you didn’t read the brochure that we sent out the white paper that we sent out, you wouldn’t have known to ask those important questions. And those questions were ones that could have made differences in the ultimate benefits that got paid out or what you might have been entitled to that you didn’t know you were actually entitled to. So we’re really very excited that that engagement really occurred. Because we see that we were impacting people with it. So we decided to do the same thing this week, right? So we put together what we think is a spectacular. I don’t call it a brochure, I really want to call it more of a playbook. I thought that was a good description on your part, Joe. And it’s called Thrive retirement tax playbook, important tax strategies for retirees. And it’s our 2023 addition of it. So this is 20 pages of information that I think is going to be critically important. So the easiest thing to do now is just to text the word tax plan to 215-999-3272. So as we kind of alluded to today, instead of all things Social Security, it’s going to be all things taxes, and taxes. Just keep I was watching CNBC this week, and something that popped up was about gig workers. And now the limitation is much, you know, anything gets reported about $600 starting to create all kinds of transaction following Crazy, right, I mean, taxes. It’s a necessary evil in our American lives. I mean, that’s what it is. It’s supposed you know, it pays for Road Safety, a whole host of community related services. I mean, we enjoy the benefit of our taxes. But we actually kind of I think everybody would agree as we load the idea of paying more than our fair share taxes, leave our pockets with kind of that less than full feeling after Uncle Sam takes their cut, I say to people during our seminars, an IRA is an IOU to the IRS. Right. So we don’t want to pay our you know, more than our fair share. And the thing that people have to understand that are listening Is that taxes will follow you even into retirement. I mean, a lot of people bought into the idea, hey, I’m, I’m going to be in a lower tax climb at a lower tax existence. Once I’m in retirement, I mean, those retirement accounts, you’ve started to draw from also getting Social Security benefits. And then other accounting income from like accounts that are designed to support your lifestyle and return that can end up I mean, they’re all taxable, I could end up putting you in an equal or not, sometimes we see even a greater tax tax rate. So, you know, for most of your working life, you’ve been in that kind of accumulation phase, gathering and growing assets to be used to support you in later years. During retirement, however, you move to a different type of mindset as you transition into what we call the distribution phase. So planning for that distribution phase includes a shift in perspective, as you work toward preserving the assets you spent so many years building up,
Bret Elam
you talk about and David either right on talking about that mindset change. And when when you talk about the mindset change, where did the dialogue needs to shift again, from accumulation to distribution. And when you talk about distribution, it’s talking about a distribution strategy, which, which includes taxes, but it also starts bringing to light questions like when do I start taking income from certain accounts? Which accounts should I take that income from? And again, it’s that distribution strategy that starts pulling all those different puzzle pieces together. And especially really, eye opening of the taxes that inevitably, you’ll end up paying as well. So again, the goal is how can we be inevitably as efficient as possible? And you might be saying, I’m already in retirement, but that’s okay. Ideally, the best time to start planning for that distribution strategies before you’re there. However, if you are already in retirement, it’s okay. There’s okay. Because you simply can change the trajectory of what things are looking like into the future. So the one thing you could never buy is time. So there’s no better opportunity than the present to start looking at pulling all those tax pieces together. So, again, today’s show real excited, I get a lot of passionate about this topic, talking about all things tax planning.
Joe Krause
And you know, Bret, I’ve said many, many times in our entire history of this program, there’s not there’s not another person in the world that knows more about taxes than you not beautiful, you know, more than we care about. We do I say that seriously. I don’t mean,
Bret Elam
we do continuing education. Absolutely. We don’t advocate Fanconi 100%,
David Bezar
I don’t want to, I don’t want to put anyone down, stop flying by any stretch. But we can’t always say I get it. And you know, just as full disclosure as fiduciaries and everything else. So not a big deal. But we definitely appreciate your prospective Audit job. So real prospective, from what I know, totally, totally got it. So look today. I mean, our goal with this show, is to kind of leverage our retirement planning experience, in order to provide insights to the audience into the important part in the retirement planning process. Because it’s something that gets overlooked a lot. Like you would think an experienced financial professional can help you develop a tax efficient approach designed to kind of preserve your retirement. We don’t see that a lot. When we see people come in and visit with us and they working with an advisor, it’s primarily been about their investment portfolio, tax consideration doesn’t really come into the equation. So we just want you to understand there is no one size fits all approach to creating a retirement plan. Everyone has traveled kind of their unique own unique path to retirement, which is why every client that we work with, has a plan that’s tailored specifically to their particular situation. And I would tell you to get an idea of what that looks like the first thing that you should do is you should text the word tax plan 2215999 30 to 72. That’ll get you in the right mindset that Bret talked about. And then we can engage a little bit further once there’s an education.
Bret Elam
Yeah, the importance I think we’re going to start jumping into is starting to make you think about some of these important decisions, you have to inevitably make related to retirement and again, you can also use this as a guide. I’ll call it as a litmus test if you’re working with somebody currently, again, if your current financial advisor, again, is what what David just shared is only talking about investments, we need to talk about the overall financial plan. And with what we have just described thus far in the show, it’s it’s the word awareness, conversations that need to be had that you didn’t know that needed to be had by asking a series of questions that you did not know that It needed to be so again, you want a tax tax plan again, that’s tax plan no space in between THX p l a n tax plan to 215 Triple 93272 and we’ll get you a copy of your 20 page copy of the Thrive retirement tax playbook. Important tax strategies for retirees
Joe Krause
roadmap to retirement the radio show we’ll get to our first commercial break as we go into the commercial break. You’ll hear messaging about some upcoming workshops, including a new location card blue cheese waterfront in Mount Laurel, get registered, get educated, go to thrive financial services.com Back in a moment get registered right now for one of three upcoming workshops on Tuesday August 22. At the brick side grill in Exton PA on Wednesday, August 23 at the montgomery township community and recreation center, and then again on Thursday, August 24. At Carlucci is waterfront in Mount Laurel, New Jersey go to thrive financial services.com That’s Thrive financial services.com
Philadelphia’s am 990 V answer a 990 V. answer.com.
Mike Liddell was a union construction worker who was badly badly injured when he suffered a horrific fall because of someone’s negligence. His life would change forever. It was
just a brutal downward spiral with everything. Everything you could do in your home by yourself all day. You know, you can’t go out because you can’t drive you can’t walk. Well, it was just a horrible situation.
Called Brian Fritz at the Fritz and beyond Cooley Law firm called 215-458-2222
Joe Krause
del Val insurance wants to save you 40% on your car insurance right now and they will do it today. Here’s managing partner Jim, you’ll Brunner,
a lot of people pay a lot more premium than they need to, and they may not have the coverage to to justify what they’re paying.
Joe Krause
There’s no charge for the complimentary insurance review. You will save money and you will connect with a company that is an advocate not a broker, go to digi.com or simply call Jim at 215-354-0122. That’s 215-354-0122. I’ve met
clients that think that I as an independent agent, charge a fee, versus going direct to Geico or going direct to progressive. We do not charge a fee,
Joe Krause
let del valen shore and save you up to 40% on your car insurance. Get your complimentary review call Jim Neil Brenner directly at 21535401222153540122 your savings or a phone call away.
Get educated and learn about your roadmap to retirement every Saturday morning, right here starting at 8am. Join David Bazar, Karen Bazar, and Bret Elam of Thrive financial services, who will teach you about taxes in retirement, Social Security and how to navigate and create a retirement plan that will provide you with peace of mind. Learn from a local company Thrive financial services and advocate and a resource for you and your retirement. Every Saturday morning from eight to 9am on Philadelphia’s am 990 V answer.
It’s roadmap to retirement the radio show on Philadelphia is a 990 The answer
Joe Krause
and welcome back everyone to this edition of roadmap to retirement the radio show again, text tax plan to 215, triple 93272 That’s 215 Triple 9327 to text the word tax plan. And what you will get is a 20 page Thrive retirement tax playbook, important tax strategies for retirees looking through it in the commercial break. Great information for people to get
David Bezar
Yeah, it’s information that I would I would tell the audience is probably more in depth and comprehensive than you think you could include in a 20 page booklet. Like we the way we wrote it is we really went deep, quickly. So I think and I don’t know if that really made sense to everybody. But as we were writing it out, we wanted to make sure we had punching power. We wanted people to walk away from that one page and go, that’s something that I definitely need to know more about and how to make that part of my retirement tax plan. So, you know, I mean, this is a big deal. Lincoln Financial Group, which you know, many of our listeners probably know, they did a report recently talking where they surveyed retirees and came up with the conclusions of a couple of things one, retirees don’t really understand or pre retirees that taxes Is are probably going to be one of the largest expenses during their retirement years. That’s number one. The second big conclusion is that most pre retirees, which is called Baby Boomers, in general, are completely unprepared and unaware of the impact of the size of the tax bill that could be coming. So I mean, these are things that I call them taxing questions, right. I mean, like many people think that retirement automatically means you pay less in taxes. I mean, after all, you’re no longer being handed a paycheck from an employer or like that’s, that’s the mindset we live today. Well, if I’m not making money from my employer, I guess my taxes will go down. Well, the reality is that most Americans don’t reduce their tax bill that much in retirement The reason you’re still taking an income, but you most likely have fewer deductions and credits than you had while you were actually working. So retirement income can come from a variety of sources, both taxable and non taxable. So whether or not income is taxable depends on the source of where it’s coming from, meaning what account you’re going to take it from the potential, the key to optimizing your taxes, and putting more money in your pocket is to blend your income from a variety of sources. Here’s I mean, we’re going to talk about what that looks like. Because my experience when we do seminars, webinars, and even our consultations, is people come up with, I’m going to take money from this bucket, which is non taxable, and I’m going to defer my money as long as possible. And that’s been the conventional wisdom, we’re gonna talk a little later, that doesn’t work as well.
Bret Elam
It’s the importance of the distribution strategy. So today’s show talking about all things tax planning, let’s jump in and talk about what is considered taxable income. And I would say the biggest bucket that you probably have of talking about taxable income is what we’ll call as your qualified accounts. These are your 401 K’s IRAs with a four three plan, a thrift savings plan, if you work for the government, traditional IRAs or traditional 401, K’s if you will, these are accounts that if you pull money out after 59 and a half, there’s no penalties, but you have to pay taxes. So the IRS allows you to defer taxes on all the earnings until you have to pull them out. But we also always need to remember as well, is that the government has changed the rules is that you have to pull that money out at the age of 73. If you’re born in 1960, thereafter, that age is age 65. And the IRS does penalize you, if you do not take the money out, they actually penalize you 25%. A quick example, if you had to pull out $10,000 a year, but you only pulled out six, I mean, it’s $4,000, you didn’t pull out so that $4,000, you didn’t pull out the IRS and say you got to pay us an extra $1,000 or 25% penalty for not pulling it out. Another source of taxable income that we see in retirement is obviously Social Security. So security is going to be taxed anywhere from zero, none of it will be taxed and upwards of 85% of it will be taxed. How can you figure out again, I always say social security is one of the most complex taxed, incomes that you’re going to receive because it’s dependent upon all your other income. And another source I would say of taxable income that we see commonly is annuities, as well. Related to annuities, depending upon where that annuity lives will depend on where the taxation comes from that it can be a complex tool. These are all things that we talk about, when we sit down with people talking about those distribution strategies.
David Bezar
Brad, let’s just jump back to Social Security quickly because I know like from last week, we got so much questioning about it right? So number one, there’s an IRS formula to figure out how much of your Social Security gets taxed, it’s called the provisional income formula. So we’re going to cover that a little bit later. And then I think what we would want to get to Bret is to kind of go through what the thresholds are to figure out how much of Social Security is actually going to be taxed. So we’ll get back to that a little later in the show. Let’s jump over to what’s considered non taxable income, right. A non qualified account is funded with money that you’ve already paid taxes on. This is an area a lot of times this nomenclature or this convention of how people tend not to know the difference or know what qualified money is versus non qualified. So what Bret talked about primarily retirement accounts, those are classified as qualified, non taxable or non qualified. It all the easiest way to think about is I have not yet paid my taxes on it. So these are things like checking accounts, non retirement brokerage accounts investment fund earns money markets, CDs right now, which are getting very popular again, while you’ve already paid your taxes on the money you’ve put into these accounts, here’s the thing, any growth on the account including interest earned or dividends paid, that money will potentially be taxed or the little caveat there, but just gonna say overall those would be considered taxed. A Roth IRA is a hybrid of a qualified and non qualified account. So like a traditional IRA, it’s designed for retirement. But you can access the funds in a Roth IRA penalty free after age 59 and a half. Now, unlike a traditional IRA, a Roth IRA is funded with after tax dollars. So qualified distributions from a Roth IRA are free from federal income tax, and a Roth IRA doesn’t have a required minimum distribution while the account owner is alive.
Bret Elam
So we just talked about what is considered taxable income. And David just spoke about what’s non taxable income. And again, these topics are covered in our Thrive retirement tax playbook, again, important tax strategies for retirees. And again, you can get a copy of that. If you text tax plan, again, tax plan, no space in between text tax plan to 215, triple 93272. And again, today’s show is talking about all things tax planning. And let’s jump in with some of the tax planning basics of understanding the key components of your tax return. If you looked at your tax page, one of your tax return a couple of important items, I guess to really understand is the first one is line seven B, which is what we call is your gross income. Your gross income is simply is the sum of your reported income for the year can be from wages, IRA withdrawals, your pension, taxable income, dividends, capital gains, pretty much everything. The next line we want to look at an important line is line AE, we call these above the line deductions, these would come most commonly is if you made an IRA contribution, or maybe some health savings account contributions, you may have some alternative investments that may factor in on that line AE, you get to deduct those, again, above the line deductions before we get to the next line, which is line eight B which is an important line, which is your adjusted gross income against important to understand the key components on the tax return, especially this line eight Bay, because it factors into a lot of things like Medicare surcharges health care subsidies. And we’ll talk a little bit about that as we continue with today’s show. The next line is line nine. line nine used to be a big deal which was below the line deductions for so many people but with the Trump tax cuts back in 2017, that eliminated this topic of atomization. As a country, we went from about 30% of people itemizing before 2017, down to about 6% of tax filers. So most people today are simply getting what they call is that standard deduction. All that leads to is line 11, which is your taxable income. And your taxable income is the income that flows through to the income brackets, which determines what your tax rates are going to be when you’re going to pay your taxes. So Joe,
David Bezar
we needed a little bit what you call the theater of the mind on that one, right? Because we’re trying to describe the structure of a 1040 tax return so people can kind of understand what those
Joe Krause
exactly what I was thinking about was Grant was going through the lines,
David Bezar
right? Yeah. So here, I’ll give you kind of the theater of the mind consolidated viewpoint, right? This is the basic income calculation. So follow me now. Gross income minus above the line deductions equals Adjusted Gross Income AGI minus below the line deductions equals your taxable income. And our goal is to find some above the line, some below the line and distribution strategies combined to make your taxable income the lowest possible
Joe Krause
and you know how I was thinking also using theater the mind you mentioned CDs getting more popular again. I’m thinking is that crazy or what? I haven’t heard that conversation and so long now all of a sudden it’s becoming front page,
David Bezar
no doubt. Yeah, no doubt. So that again, that’s it because now people are going to have more interest. There’s going to be more taxable income. Again, it’s all these moving puzzle pieces so the easiest thing to do is get started with the tax plan booklet. You can do that by texting the word tax plan to 215-999-3272
Joe Krause
roadmap to retirement to radio show we’ll go into our next commercial break the conversation will continue on the other side and a reminder in the break messaging on some upcoming workshops, go to thrive financial services.com Back in a moment get registered right now for one of three upcoming workshops on Tuesday August 22. At the brick side grill in Exton PA on Wednesday, August 23 at the montgomery township community and recreation center, and then again on Thursday, August 24. At Carlucci is waterfront in Mount Laurel, New Jersey go to thrive financial services.com That’s Thrive financial services.com
This is Philadelphia’s a 990 fi answer.
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Joe Krause
dellavalle Insurance wants to save you 40% on your car insurance right now and they will do it today. Here’s managing partner Jim yo brother,
a lot of people pay a lot more premium than they need to, and they may not have the coverage to to justify what they’re paying,
Joe Krause
there is no charge for the complimentary insurance review. You will save money and you will connect with a company that is an advocate not a broker, go to dvigi.com or simply call Jim at 215-354-0122. That’s 215-354-0122.
I’ve met clients that think that I as an independent agent charge a fee versus going direct to Geico or going direct to progressive. We do not charge a fee.
Joe Krause
Let del Val insurance save you up to 40% on your car insurance. Get your complimentary review call Jim Yul Brenner directly at 21535401222153540122. Your savings are a phone call away. Before the opening bell on Monday contact David Bezar Karen Bezar or Bret Elam of Thrive financial services 215-798-9088. Get on the original roadmap to retirement and get yourself educated about the tax benefits of a Roth IRA. It’s your roadmap to retirement and it starts by getting educated from advocates who will help you navigate your own roadmap to retirement leave a message at 215798 90 Ada.
Now back to roadmap to retirement, the radio show on Philadelphia am 980 The answer
Joe Krause
and back here on roadmap to retirement to radio show along with David Bazar. And Bret Elam. Thank you everyone for tuning into the program today. Again, text the word tax plan to 215 Triple 932 72 a 20 page booklet awaits you chock full of incredible information 215 Triple 932 72 just text the word tax plan to that number.
David Bezar
So this next segment is going to include trying to bring some clarity to what we call, you know the US tax system, which is a progressive tax system that I think sometimes does create a little bit of confusion for tax players. payer so, you know income tax rates, tax brackets, the art to it right the art of the tax efficiency planning is managing your tax brackets in a way to ensure you won’t have to pay more in taxes than what we consider your fair share. So like I said the US tax system is a progressive tax system which means the more money you make, the higher it will be taxed. So there are currently in 2023 seven tiers or brackets. They range from 10% at the lowest bracket up to 37%. Then at the highest bracket, your taxable income is what flows through to the applicable tax brackets. And it doesn’t matter if your taxable income is $500,000, or $10,000, as an example, your first $11,000 as a single taxpayer, or $22,000, as a married couple filing a joint tax return, will be taxed at 10%.
Bret Elam
Now it’s talking about ordinary income when we talk about items like long term capital gains, or qualified dividends. And long term capital gain is an investment you’ve held longer than 12 months. So that’s what characterizes them as being long term. And in order to understand is they get taxed separately, different than your ordinarily of your ordinary income, pardon me. And they’re taxed anywhere from 0%. So possibly none of your capital gains are taxed, and they could be as much as 20%. So it’s almost like those two buckets are being calculated simultaneously. And we want to talk about how that some of that taxable income is being stacked, is that once what we do first, as we look at what portion of your income comes from ordinary income, and then what comes from long term capital gains and qualified dividends, and we look at that ordinary income first and applying the tax brackets, and then we stack again, we’ll call it Inc, taxable income, is stacking is stacked on top of your ordinary income to determine what is your rate. And here’s a quick example is if you’re a single taxpayer, you made $45,000 $45,000, would put you into the 22% tax bracket. So if let’s say you had $10,000, in long term capital gains, those long term capital gains would automatically go right to the 15%. Tax bracket.
David Bezar
Why is that?
Bret Elam
It’s because you have that is because you’re outside the 12% bracket. And the 12% bracket, when we talk about long term capital gains, is that if all your income when you stack it together, remains under the 12% bracket, those long term capital gains would actually be taxed at zero. So it’s because we entered that 22% bracket, as why automatically they jumped to 15%? How can
Joe Krause
you expect us to know it all? To understand?
David Bezar
Yeah, and that’s why I asked Bret to kind of go through that example a little further, because I could see the expression on your face, Joe, and I want to tell you, honestly, that’s an expression we get for the majority of people we meet with, that’s why I said this is the art to it. It’s art slash science right.
Bret Elam
Now theater of the mind, which is good, too. Yeah. You know,
David Bezar
there are plenty of people, I will tell you, you know, and, you know, a shout out to our, you know, friendly engineers out there with their spreadsheets do get that right, because they’re there, they’re more mathematically inclined or more structured, inclined. So they’ll come in, and we can have that conversation. And that’s Hey, you know, I would tell you, again, most of the people that, you know, I experience, you know, kind of get that, you know, blank stare when we go to that stacking concept of how taxes work. So, as we move in this segment, the next part that we want to talk about, and this is more mindset, right? This is more about, hey, I really want to figure out how to optimize my taxes. So what we call that that mindset you kind of got to get your head around is called What’s the tax equilibrium point, like one of the best tax planning opportunities for retirees stems from an increase in the amount of control you have over your income during retirement, like this is one of the first times that you can, because you’re not getting ordinary job income, which is comes at you. Now you have a choice of where you take money from. So in your pre retirement years, you often have very little control over the amount of income that shows up on your tax return. But in retirement, you control how much you can distribute from your accounts, what accounts you distribute from, and when you start retirement income sources, such as your pensions, your Social Security benefits. So the key is to take advantage of this opportunity and find where that tax equilibrium point is, where do I take that money from?
Bret Elam
And you talk about the long term financial projection that illustrates your future retirement income sources and the current wealth trajectory is the first step to figure it out your taxi equilibrium port, and the most important words I probably said there was probably long term and it’s the importance of the concept that we use all the time called for Were tax planning decisions that must be made today, in order to set yourself up for efficiency, not only in today’s year, but for the years to come as well. Again, it needs to be forward looking. So understanding again, tax equilibrium is highly personalized, which means it needs to be customized. Some people may have an act equilibrium point that you’re going to be in the 12% bracket now and in the future, but other people may have an equilibrium point that has them in a 22% bracket now and in the future. And we can’t forget in 2026, tax rates are going to be going up, because nothing has been passed, going back to the 2017. Tax rates is the importance of understanding that tax equilibrium rate, and the importance of also looking at forward tax planning.
David Bezar
So let me just summarize real quickly on this concept, your tax equilibrium point is kind of like a balancing point on a seesaw. It’s the point at which you can fill up lower tax brackets today, and still defer enough income to fill up lower tax tax brackets in the future. That makes sense what I just said,
Joe Krause
well, the visual of the seesaw does, you know, in terms of being able to balance,
David Bezar
that’s it, right. So again, we have control over this. So balancing your current and future taxable income, eliminates the potential income spikes that could be exposed to higher marginal rates. Quick example, to Social Security checks, a pension check, and to required minimum distribution checks, will end up putting you in a much higher tax bracket than you would have anticipated. If we can control that process. By possibly doing things like Roth conversions earlier in the equation, you do Roth conversions, you’re lowering your IRA balances. So when it does come time to take those RMDs they’re going to be much smaller than they would have been putting you potentially in a lower tax bracket.
Joe Krause
roadmap to retirement to radio show text the word tax plan to 215 Triple 932 72 That’s tax plan the word tax plan to 215 Triple 930 to 70 to catch your breath as we go to a break. It’s a lot of information that we’re moving through. But really important information back in a moment. Get registered right now for one of three upcoming workshops on Tuesday, August 22. At the brick side grill in Exton PA on Wednesday, August 23 at the montgomery township community and recreation center, and then again on Thursday, August 24. At Carlucci waterfront in Mount Laurel, New Jersey go to thrive financial services.com That’s Thrive financial services.com
Philadelphia’s am 990 V answer a 990 V. answer.com.
Mike Liddell was a union construction worker who was badly badly injured when he suffered a horrific fall because of someone’s negligence. His life would change forever.
It was just a real downward spiral with everything. Everything you could do in your home by yourself all day. No, you can’t go out because you can’t drive you can’t walk. Well, it was just a horrible situation,
called Brian Fritz at the Fritz and bianculli law firm called 215-458-2222.
Joe Krause
Del Val insurance wants to save you 40% on your car insurance right now and they will do it today. Here’s Managing Partner Jimmy O’Brien,
a lot of people pay a lot more premium than they need to, and they may not have the coverage to to justify what they’re paying.
Joe Krause
There is no charge for the complimentary insurance review. You will save money and you will connect with a company that is an advocate not a broker, go to digi.com or simply call Jim at 215-354-0122. That’s 215-354-0122.
I’ve met clients that think that I as an independent agent, charge a fee versus going direct to Geico or going direct to progressive. We do not charge a fee
Joe Krause
let del Val insurance save you up to 40% on your car insurance. Get your complimentary review call Jim you’ll Brunner directly at 21535401222153540122. Your savings are a phone call away.
Its roadmap to retirement the radio show on Philadelphia is a 990 The answer
Joe Krause
and back here on roadmap to retirement the Radio Show with David Bazar. And Bret Elam boy David, my mind is racing listening and consuming a lot of this content I am sure some of the listening audiences who’s following along might be like me Eat? I don’t know, it is really good information. But man, there’s a lot to process. So Joe, would
David Bezar
you say that you have more questions than answers at this particular point?
Joe Krause
Well, I would say I have both, I would say I have a better understanding. And then I’m learning things that I didn’t really knew existed that I need to ask about that.
David Bezar
That’s it work. Right. Those are those conversations, we ask questions, those, Spark these conversations. And that’s where we kind of continue the process, right. So again, I would say, to get started, if this has been something that is thought provoking to you, one of the best ways to get that conversation started is to get a copy of this tax play book that we put together here at Thrive. Do that by just texting the word simply tax plan to 215-999-3272. So let’s continue with this concept of the equilibrium point. So the question or the comment is when to defer versus when to accelerate, right, because we were talking about where to fill up those different lower tax brackets. So once you know your equilibrium point, you can then kind of come up with the implement acceleration deferral strategy, and figure out what years to do that to get the lowest possible tax or marginal tax rate. So when your current marginal rate is higher than you expected future marginal rate, you will want to consider options for deferring your current income. deferring income when you’re retired is often more difficult than accelerating income. Because there aren’t as many deferral options available for retirees, employer sponsored retirement plans and IRA contributions are not available to those without earned income. Right. That’s one of the things that people bring up as a question a lot of times. Now, there are strategies, such as capital loss harvesting, there’s also limited distributions from pre tax retirement accounts, those things can be effective and preventing additional income on your current tax return.
Bret Elam
So we talked about when to accelerate your income. So when your current marginal rate is lower than your expected future marginal rate, again, we talked about the importance of forward tax planning, it’s an excellent time to consider accelerating that income. Again, income acceleration involves intentionally I did say the word intentionally increasing your taxable income in the current year to fill up your tax brackets below that tax equilibrium rate. So we talk about some of the most, I would say, the most common strategies in talking about how we go to accelerate that income, and probably the most popular one that we talk about, I want to jump into it. And the importance of it is talking about Roth conversions. So we talked about Roth conversions, it’s, it’s probably the most common way to accelerate your income altogether. Again, conversions Roth conversions give you the ability to strategically accelerate your income, and filling up those lower tax brackets. By moving money from that pre tax account into a Roth IRA. There’s a lot of myths and misconceptions and misperceptions of the sorts where everyone can do Roth conversions. And there’s actually no limitation on the amount that you can convert to a Roth IRA. It’s just knowing that you required minimum distribution is one bucket that can’t go there. But you don’t want to be too aggressive in converting too much money, because then you’ll go above what that future equilibrium rate is, again, the optimal approach in Roth conversions, again, is to fill is to fill up those lower tax brackets, while keeping enough money in those IRAs so that you can fill up those lower tax brackets in the future, again, the importance of talking about forward tax planning decisions that must be made in today’s calendar year in order to set yourself up for efficiency for the years to come. And one of the big benefits when we talk about Roth IRAs, is it you do not have to take a required minimum distribution from a Roth IRA, but it also reduces what would be that required minimum distribution from your traditional IRAs? Need to remember Additionally, when we talk about Roth IRAs, they become an excellent vehicle to transfer wealth to future generations because they will inevitably inherit that money tax free.
David Bezar
And there’s a lot of confusion. We hear this primarily at the seminars during our q&a periods. People say you know, I can’t do a Roth conversion Because I make too much money. And that’s a that’s a confusion. That’s a misinterpretation, because there’s a difference between a contribution and a conversion. A contribution is putting new money into a Roth account, which does have limitations based on income. A conversion, like Bret just said, is unlimited. Moving money out of a traditional IRA or 401 K over to a Roth account. There’s no limitation and that’s a good thing. So now what I want to try to illustrate is a typical scenario, where a strategic Roth conversion can make sense. So if your required minimum distribution at age 73, would force you to take a distribution from your pre tax account, and it will push you into the higher tax bracket than your current bracket. That’s the question to ask to figure out whether or not you should consider a Roth conversion. So I’m gonna go through that again, real quick. So if you’re required minimum distribution at age 73, will force you to take a distribution from your pre tax account, and that distribution will push you into a higher tax bracket than the current tax bracket that you’re in? That’s the question to asked whether or not to do the Roth conversion. So let me give you a quick sample of that. On a baseline scenario, let’s say your taxable income takes you up to the top of the 10% tax bracket. Then we add your pension income, dividends and capital gains, that basically puts you into the 12% bracket. That’s this year, right? Now, if we add to that the Roth conversion, that’ll take you up just below the 22% tax bracket. Okay. So that’s like around $89,450. So if that’s the case, we may want to consider if your taxable Social Security is in the 10%, bracket, your pension, your dividends, and your capital gains, is in and required minimum distribution puts you in the 12, the top of the 12. Taking that Roth conversion, I’m sorry, taking that required minimum distribution may actually push you up into the 22% bracket. So if that’s going to be the case, that’s why you would want to consider doing the Roth conversion. Now. Does that make sense?
Joe Krause
Make sense? Make sense? Lots of questions with it. But it makes sense. Okay.
David Bezar
So again, that Roth conversion by doing it now in this year, and then next year, and the next year, what it will ultimately do is prevent that required minimum distribution being that large, that it would push you into the 22%. The Roth conversion, just doing the Roth conversion puts you at the bottom of the 22%. So it’s a better deal to do it now, then then in the future.
Bret Elam
And I would say the next most common way to accelerate income as we start talking about capital gains, again, accelerating capital gains can be a phenomenal tool. And the strategy can be very attractive to people in the lower tax brackets. So a lot of people have heard this this concept called tax loss harvesting, where you’re selling a stock, and that may have some losses, and your partner with taxes that may have some gains. So when you’re all said and done, you’re not netting any kind of capital gains. But a less commonly known and utilize strategy is actually taking the the opposite approach, where we’re actually intentionally selling something that has a gain without a loss. The strategy is commonly referred to as accelerating or harvesting capital gains when you sell an investment. And you realize a capital gain, this is very important, you can turn around and buy the stock immediately, not to be confused with what they call a wash sale, which is if you sell something for a loss, you must be out of that position for 30 days to realize that loss to again 30 days, you must be out to repurchase that security. And this makes harvesting capital gains a more straight forward strategy. You must be in position long term capital gains must be held for 12 months means they’re tax completely different than short term gains. When we speak about taxes, and what I just went through, is on page 11 of our Thrive retirement tax book again An important tax strategies for retirees today’s show talking about all things tax planning for a copy of the Thrive retirement tax book, you want to text tax plan to 215, triple 93272. Again, text tax plan to 215, triple 93272.
David Bezar
Yeah. So you know, as we come to the conclusion of the show, just like Bret just said, I would definitely say get that that’s the first step, just get the tax plan simple text to it, we’ll get that out to you quickly, then I would say digest it, spend a little time reading it. There are 18 different chapters in that club chapters. But they’re, you know, 18 different topics that you’ll cover with a kind of an intro and a summary. After you’ve read that, read that after you’ve digested it, if you have questions, my recommendation would be to give us a call at that time, right? And just come in and see us, you can schedule that on our website, you can talk to our scheduling team. And then we can actually run some tax analysis for you so that you could walk away with hard facts about when and how to do those potential Roth conversions, the tax harvesting strategies, all the things that will get you to a point where you don’t pay more than your fair share to Uncle Sam.
Joe Krause
Yeah, and it’s an easy place to start, text the word tax plan to 215 Triple 932 72. That’s the word tax plan to 215 Triple 93272. And you’ll get that 20 Page playbook of great information that’s going to do it for this edition of roadmap to retirement the radio show on behalf of David Bazar, and Bret Elam and Karen Bezar and of course, all of our listeners tuning into the program today. I’m Joe Kraus. See you next time, everybody.
Thanks for listening to roadmap to retirement the radio show from Thrive financial services. If you’re like most Americans, you have more questions than you do answers about what to do with your retirement savings. If you have a question about your IRA or your 401 K pension or other tax deferred accounts, if you have a question about reducing taxes, generating income or filing for Social Security, whatever it is, David Cameron and Bret are here to help. Often your questions can be answered in a simple phone call. Just call to 1579890882157989088 and so you know no statements made during roadmap to retirement the radio show shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional on any such matters. information presented is for educational purposes only, and is not intended to make an offer or solicitation for the sale or purchase of any specific securities, investment or investment strategies. investments involve risks and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and or tax professional before implementing any strategy discussed here. David Bezar Bret Elam and Karen Bezar have thrived financial services and thrive Capital Management are licensed to offer investment advisory services through Thrive Capital Management LLC. an SEC registered investment advisory firm office headquarters is located in Fort Washington and offices of convenience used exclusively for client meetings and Exton Yardley and Cherry Hill roadmap to retirement the radio show is a paid commercial announcement from Jacob media partners. If you’d like to learn more about the power of the radio our contact Joe Kraus at 267-261-3428. Today’s program has been pre recorded.
Joe Krause
Get registered right now for one of three upcoming workshops on Tuesday August 22. At the brick side grill in Exton PA on Wednesday, August 23 at the montgomery township community and recreation center, and then again on Thursday, August 24. At Carlucci is waterfront in Mount Laurel, New Jersey go to thrive financial services.com That’s Thrive financial services.com.
So what would you do with an extra $187,412 in retirement savings that’s how much money a local retiree could save in taxes just by using some simple tax planning strategies from Thrive financial services Thrive Financial Services is right here in the Philly area. This team of experts have been featured in Kiplinger’s The Wall Street Journal. And what’s more in 2020 they were inducted into Inc 5000 among some of the nation’s fastest growing private companies in the country. Why? Because educating their clients is first and foremost their highest priority with thrives free tax analysis, you can learn exactly how much money you could save what you learn could help you save a fortune in taxes. If you’ve saved more than $250,000 You are one of the first 10 callers to schedule your free tax analysis now at to unfound. 57709475 An extra $197,412 could go a long way in retirement call 215-770-9475 That’s 215-770-9475 Nothing in this advertisement is intended to give you specific tax or investment advice consult your own tax or financial advisor
