It\’s Tax Season!


David, Karen, Bret, and Joe dive into a discussion about taxes and break down some strategies for 2019. Karen also discusses current developing trends among senior citizens in the U.S.

How quickly we went from ending up the month of February into the month of March, and now coming into our vision is taxes April 15th, now I think is a little bit more real today than it was even a week ago. David, for the members of Thrive army, for the audience, and for everyone around the Delaware Valley.

Yeah, the year is flying by, Joe. I hear as you get older, the time goes quicker. I\’m not sure what the theory is behind that, but certainly feels that way and now, we\’re getting closer. We see the attendance at our workshops increasing, people wanting to find out more of how the tax changes are going impact them today and in the future. We have a lot of good stuff today on the show.

I have a good lineup, at a full house as we normally do on a Saturday morning, Karen Bezar is here this morning. Hello Karen, how are you?

Good, I\’m great. How are you doing?

Good, you launched a Netflix series a week ago and I wonder what\’s on your agenda for our conversation for the audience today?

On my agenda today, is talking about a new phenomenon that seems to be growing is senior citizens actually moving back in with their kids, which is a good thing or bad thing?

Now, I\’m going to give you a thumbs up. I\’m going to give all seniors a thumbs up for that because my mother-in-law moved in with us now granted she did have a separate-

Like in lawsuit

In lawsuit and enjoyed having that but I gave you the thumbs up. I look forward to that conversation.

You said in the lawsuit, Krause?


So it means it\’s all about the details, right?

Yes, it is.

All about the details.

It\’s all about the details and speaking about details, I referenced taxes at the start. You\’re going to start there today and I have a feeling over the next eight or nine weeks, there\’s five Saturdays in the month of March and then we get in to April and April 15th is a Monday this year, so it\’s going to come rather quickly.

A lot of people getting their taxes done as we speak and plenty of people still to see how all the new puzzle pieces fit together with a new tax code. We\’re just going be talking about facts about the changes that have happened again here through 2015 as opposed to sometimes theory, why the market\’s up over the past month here, Krause, you don\’t?

Something happened a month ago, you forgot?


The Patriots won and the groundhog didn\’t see a shadow, so I remember.

That\’s right, I do remember that.

We\’re going to take all the superstition about the truths here today just with everything that\’s in that new tax.

It\’s a good way to say let\’s bring some reality, David, to what it actually means to make the right decisions, control your own destiny. I know we\’ve talked about that. If you scroll through and pick up a headline every other day, there\’s a reference now about how returns are down for people, and I don\’t know whether or not individuals read the stories or not, but certainly the headlines, just because it\’s a headline sometimes provides enough credibility for people to believe it.

It\’s about keeping yourself informed and it\’s also about making modifications when necessary. Here at Thrive, nobody has a crystal ball, but we certainly are in the camp of trying to protect people\’s assets. Most of the people that we sit with, whether they come in via visiting us with workshops or they call, or they come in through the website, I tell you, Joe, 95% of the people that we sit down with have all the money that they need for retirement.

We tell them that their big win is just not to lose. If you would call it greed or you want to call it consistency of effort, some people just stay at the game, the game of the stock market longer than needed. If you\’ve got modest expenses on a monthly basis, maybe 3 to $5,000 a month and you\’ve got a million and a half dollar saved in your retirement assets and you\’ve got good quality social security payments and maybe even have a pension, the big question I would always ask is why would you continue to be chasing these double digit rates of return, which are becoming less real and more fantasy when you could dial back the risk and really just come out with complete and total certainty that your retirement is there for the rest of your lives.

We believe in the safe money strategies, yeah, we believe in the stock market. We believe that you just need a better diversification of assets in the stock market or out of the stock markets, some alternatives outside of it as well. If you do those types of things and just stay the course, retirement looks like a slam dunk.

The one conversation that we had from last week’s show, I thought was worth asking you to repeat and I hope it\’ll jump into your memory talk about being getting older and forgetting. It was the reference David or the conversation of the example that you used about buying and then the stock coming down and what to do with it and how to do it. I thought it was a fascinating example and a good way to let new listeners understand part of what your philosophy is.

[bctt tweet=\”We believe that you just need a better diversification of assets in the stock market\” via=\”no\”]

Yeah and again, last week on the show talked about our strategy that we are passive investment users. We believe in index investing, staying the course for the majority, but what we try to convey a lot of times is opportunity and what we were talking about on last week\’s show is using sometimes these dips in the stock market as an opportunity to sell a position if it\’s inside of an IRA account for two reasons. Number one, we\’re probably at the lowest tax climate, tax rates that we\’re probably going to see in our lifetime, so we want to take advantage of them and at the same time, if you could pay those lower taxes on a smaller gain, it just makes sense.

Then, we recommend, to exercise that sale, as that price comes down, you\’re going to pay less in taxes and then we say, go buy it right back. Just buy it in a Roth so all of that future growth is now tax free and that\’s not traditional conventional wisdom, but it\’s good mathematics.

One of the topics that you\’re going to talk about today or one of the areas that you\’re going to get into, the five keys, tell me about that quickly.

Actually there was an article in Barron\’s magazine that I stole the topic from for today because I read it and I thought this was really good and it\’s just five basic questions that you should be asking before retirement and then certainly after retirement. As a matter of fact, that article is up on our LinkedIn page on for Thrive Financial Services.

Our website has tons of information available. As a matter of fact, on our website, just a quick comment, people can go to that website, and download that new eBook.

We\’ve gotten a lot of downloads from that and gotten great feedback for that. That\’s on our website,, it\’s also on our other website called I\’d really encourage people to go download that, lot of great information. It\’s just off the top of my head, it\’s like 50, no, 40 pages. Forty pages, good information for an eBook.

Certainly, a lot of information. We\’ll get to our first commercial break. When we come back after the break, pay attention, Bret Elam is up, taxes, the subject of his conversation a little bit later on. Karen Bezar with her conversation on seniors moving in, I like it, I look forward to that. We\’ll get to a break back in a moment.


The other past week, it was our second go around and again, continuing into next week back at the Huntington Valley Library. We\’re excited to again expand the message to a brand new location, so this is our second go in there but our topic during workshop is taxes and retirement and I thought on today\’s show, just give it a little bit of a debrief as to what we\’re going to see. But again, as some of these workshops that we\’re concluding right now, over the past couple of weeks, Krause people are coming up and saying, \”Hey, I just completed my 2018 taxes. I\’m noticing this or that.\”

Again, people are sometimes seeing some of these changes that were made now finally being put in the play and people are now seeing it in black and white. We\’re starting to hear about it on the news and stuff like that, so I thought I\’d talk about things, I\’m on a high review and then dig into it a little bit as to some of the details that people want to be conscious of.

Again, these are topics that we talk about quite a bit deeper at our workshop but again whether you\’d like to attend one of the workshops, feel free to give us a call or come in. Again, these are all things we talk about as part of that complimentary Thrive Retirement Roadmap Review sessions that we offer that are out there, Krause.

I thought I\’d start off just talking about the big picture just related to the taxes and realizing that these tax brackets that were made and change back in 2017 again, they\’re permanent again for all intensive purposes through 2025. Again, the next seven years, or eight, if you include 2018, what we saw was an expansion of the income limits for both single and married filing jointly couples.

At the same time, what we saw was each of the tax brackets being reduced as well. Typically, it means, at least from what we found, people that were sitting in front of the people are paying less taxes year in and year out. Again, everyone\’s situation\’s going to be a little bit different with all that happening again, you always want to make sure that you go through a debrief, whether you\’re getting your taxes done in your own or an HR block or you\’re working with your account and just make sure you\’re always at the right amount of withholdings coming out of your paychecks or social security, pensions, etc.

Some of the big changes that were made with the code along with those rates we spoke about were standard deductions. Again, estimates were for 2017, 30% of filers we\’re still itemized and where that number is supposed to drop to almost down to 6% for 2018 and beyond. Some of the biggest reasons is that we saw a standard deduction from go from $12,700 in 2017 for a married couple. Now, 2019, $24,400 again, that\’s almost double what the standard deduction was simply two years ago. Now, I\’m going to get into it in a little bit of talking about some of the deductions when you itemize that have changed as well.

Another thing that has been repealed and people are experiencing this now is that personal exemptions are no longer part of the tax code, because of that, what they\’ve done, they\’ve expanded being able to get a child credit of up to $2,000, so that\’s going to help a lot more households, but some others, again, child credits help out for kids that are under the ages of 16 or under, but some others won\’t necessarily experience some of those changes, especially if their dependence are up 17 years or older or that credit is now $500, not the thousand, it was in 2017, not the 2000 it\’s changed too for younger kids, but now it\’s $500. They may not see a great as benefit with the personal exemption being repealed. Again, what I just chatted about there, I\’ll say the same through the year 2025.

Now, Bret just go back on that for me one more time on the exemption.

Because they\’ve done away with it, again, we saw tax rates come down, so automatically people saw more money that was going into their paychecks. But again, it\’s a domino effect because personal exemptions have been done away with. Personal exemption while you say like $4,000 per person in the household that used to go directly against my income that was earned, it\’s been done away with. Again, the purpose of these new tax codes was to make things simpler.

Again, we believe it was a cheap, but we need to understand what all those changes were and some of those dominoes that were made there. Again, some of them were just what I just shared right there with how the exemptions have been changed. Because of all the uncertainty, again, some pretty big changes that have happened, you hear a lot about on the news that people are paying more in taxes or they\’re owing money as opposed to getting a refund before. You heard earlier this year, 2019 that the IRS came out and said that they would waive penalties for some people who didn\’t pay enough taxes throughout the year in 2018.

Now, if your associate is paying quarterlies and you pay your quarterlies, you still don\’t have to pay those penalties, but for normal, everyday people that all of a sudden are normally getting those refunds, all of a sudden paying penalties, you\’re finding that they\’re not having to pay those penalties because they\’re being waived because again, a lot of those changes and uncertainties throughout.

That was a function of people not being proactive and changing their withholding allowances at the employer. It wasn\’t that the taxes went up, it’s just people didn\’t need to hear what they needed to do to make sure that they were in line with the new tax code. If you translate that even further along, we don\’t take the time to either know it or understand it or find out and I don\’t say that to be disrespectful or negative, I include myself in the conversation, we don\’t do it.

It\’s all about the details.

We can hear rates went down, I\’m saving money. Again, it\’s finding out how that situation applies to us because of our kids getting older, my job changing, and I pull money out on my 401k, everyone\’s situation is different. One thing that did not change was too favorable tax rates on long term capital gains and qualified dividends, that\’s still a big deal where people can still get 0%, 15%, or 20% as it relates to those investments, especially as people enter retirement, understanding how that 0% tax bracket works on long term capital gains and qualified dividends, those are things that we highlight, talk about during our workshops and absolutely are things that we talk about during that Thrive Retirement Roadmap.

Bret, why don\’t you talk about that for a second. When we use our tax clarity software, what are some things, examples of things that pop up that we bring to people\’s attention?

Yeah, so it\’s a lot of times as we enter retirement, the first time that we\’re able to experience what they call is at 0% tax bracket on long-term capital gains against conventional wisdom, we always ask people during the workshop, what do you think long-term capital gains are taxed at? We always hear 15% which is normal. They\’re absolutely right, but there\’s three brackets and again, people have never heard of the 0% bracket was very hard to achieve while you\’re working, but as you enter retirement, your taxable income and your cashflow aren\’t necessarily the same because you can start picking and choosing what bucket of money you want to pull out of.

There are a lot of times that we\’re able to meet people and they might have a big stock position that\’s hanging out there that they have a lot of long-term capital gains where finally, they\’ve hit retirement. They have sufficient assets that aren\’t necessarily going to show up for their cash flow for that year on the tax return where for the first time ever. Typically, in their life they might be able to actually start taking advantage of that 0% tax bracket where even if you love that stock doesn\’t mean you have to sell it forever, gives you the ability to sometimes bring up your cost basis or finally giving you the ability to pivot where you don\’t feel stuck, that you\’ve been in that position forever to provide further diversification, which is a big deal as well.

And that may be difficult to understand when you kind of hear it, but when you see it illustrated in the report, it\’s like an Aha moment. It just pops out and you go, \”Geez, I never ever considered that\” it\’s hard to sometimes in your mind get the concept again when you see it visually. It just makes all the sense in the workshop.

Can I suggest to the audience to get to the workshop. If there was ever a reason to consider going to the complimentary workshop or if you were saying, \”Hey, I want to go and plan on going and I don\’t go\” now that April 15th is in range and it\’s more on our front burner, I would strongly, strongly suggest to you.

Again, these things we\’re talking about now, those are for we\’re tax planning, things that you have to do in that calendar year. So maybe it was too late for 2018 but it\’s figuring out what we need to do in 2019 to make sure that we don\’t miss what we just missed in 2018. Again, we always ask the question. If we can show you a way how you could take a long term capital gains and pay no taxes on them and/or maybe take some money out of your IRA and pull it out as if it\’s a Roth Ira where you\’d never pay taxes on it, does it make sense to find out how that applies to me?

If I\’m a listener that hears that, those are things that we do complimentary, we educate people again at the workshop, but then when people come in as part of that complimentary Thrive Retirement Roadmap Review session, we say, \”Hey, that thing I heard on the radio\”, or, \”That thing I saw you doing at that workshop, how does that apply to me? I want to get me some of that 0% long term capital gain things that are out there.\” That\’s big deal. It\’s a big deal.

It’s really good stuff.

We see a lot of people that have experienced what they call alternative minimum tax, that\’s a big change that happened. Again, estimates were that five million tax returns in 2017 had alternative minimum tax associated with it affects people that are higher income earners. Estimates are 200,000 instead of five million, only 200,000 people only be subject to AMT. Biggest reason, is you want to see it\’s hard to achieve now there\’s you\’re married filing jointly couple up until $1 million of assets on the most part is where you almost don\’t see things kicking in there as well.

Another big one, you don\’t need to have health insurance anymore. You will not be penalized on your tax return, that\’s a big change for 2019. Previously, as a part of Obamacare, if you didn\’t have insurance, you are going to be penalized on your tax return, it\’s no longer part of it, 2019 beyond. Home sellers exemptions, one big change that happened there. You now need to own a home for five years of which to be eligible for this benefit of the homeowner\’s exemption. The homeowner must have used the house as their primary residence for two of the previous five years. It\’s a big change where you can earn up to a half million dollars, a quarter million dollars per person when you go to sell your house.

We get this question a lot when people come in and during that Thrive Retirement Roadmap Review, “Bret, I\’m downsizing, I\’m afraid of how much tax is going to have to pay when I sell my house.” Hear me out, a lot of times we\’re not going to pay anything whatsoever, so that\’s a big deal of what we educate a lot of people unrelated to that as well. Again, topics like these and others, we just touched on them here today. These are things that we talk about during our workshop again here coming up in Huntington Valley here on the 7th of March, and then again throughout the area as well. Again, feel free to give us a call, 800-516-5861 or you can always visit us at

Really, really good stuff Bret, thank you so much. Get to the workshop. If you can go on March, go to You\’ll sue the entire lineup of complimentary locations where you can go and get some of this valuable, valuable information.

That leads us to Karen Bezar. Karen, feeling that Bret ended his conversation or segment whether you should sell your house, are we going to do that and then what? Today you\’ve got some conversation about the then what?

Right and here I go with the then what? I was reading an article, I think it was AARP actually.

I was going to say actually but we get some good discounts. I\’m not here promoting AARP, we get good discounts on hotels. We go and look at some colleges, so in Florida, nice warm area. We get some discounts on the hotel side by side.

Discounts are good.

Feeling that I\’m bringing up that we\’re going to go look for colleges because I\’m going to talk a little bit about a new phenomenon that\’s happening and I know David\’s looking at me like how can that relate to college moving into home with your children but one thing that seems to be happening a lot more, is becoming more common is the baby boomer generation is having to move back in with their children and one area that I\’ve actually met with a woman about a week or two ago who was still supporting her 25-year-old son and I just nicely, there was nothing wrong with him, couldn\’t find the job that he really wanted.

He had a college degree and everything and she was supporting him. She was paying for certain bills and I very nicely said, \”Is he going to take care of you now that you\’re retiring?\” And she looked at me and she said, \”No\” and I said, \”Well\” I said, \”if you don\’t change the way things are going, you\’re going to end up living with him, is that something you want?\” She did not. Now, some people out there might, but if you\’re out there listening and this is something that you don\’t want to happen to you when retirement, then we have some things to talk about now.

I know David and I his parents live there, wasn\’t there later 70\’s. My mom\’s in her late seventies, they don\’t want to live with us, at least right now. They enjoy their life. They don\’t want to live by anybody else\’s rules. You might have a different view, but I feel strongly that David and I want to have a great retirement. We don\’t want to have to depend on our children for help. One way to avoid this predicament is number one, start saving earlier for retirement.

If you\’re already at that point, we can still help you out by coming to a workshop or coming in and sitting down and meeting with us because you really need to have income retirement planning done for you. Not just money saved because as you just heard from Bret\’s talk, there are so many different other factors that go into it so come on in, sit down with us, what we do is the income retirement planning for you. We\’ll do the tax clarity report, we do the stress analysis. You come in, share your information with us and we\’ll let you know how your retirement look.

We\’ll give you the statistical probability of having a successful retirement.

If it\’s not good, we\’re going to tell you yes or no, but we\’ll also give you some direction and help you out with that. Another thing we do is a social security maximization report and specifics to that report. I met with a couple people in the last couple months and there were some changes made back in 2015 to social security. There were some loopholes that closed and when I met with a couple, they just started filing. One person just started taking his social security benefit, his wife had already started hers.

In our discussion, he found out that there\’s still one loophole open that he can actually take part of and it\’s called a file and restrict. As long as you were born before January 1st, 1954, none of us in this room of course, but if you were born before that and you\’re currently married or even divorce, you\’re eligible to take part in that benefit.

I\’m going to get really particular now with that actually, and basically what it says, if you are full retirement age, a spouse must be for retirement age and born on or before 1st January 1954, sorry about that. You can file a restricted application for spousal benefits only, which means if David and I were in that age group and I started collecting my benefit and David was born before January 1st, 1954, he could collect his spousal benefit, which would be approximately half of my full retirement age benefit.

He could start collecting it and let his grow to age 70 and why is this so important? Because you need to know where your income\’s going to be in retirement and if you start you get 8% growth per year, if you wait a little bit.

David could let his grow to qualify, but then he can start pulling half of your benefit while letting his grow.

While letting his grow, and why am I telling you that now is because there are people that are listening to our show that were born before January 1st, 1954. You\’re still at that point, if you\’re out there listening now, we can stop you or can help you with that one particular point, definitely.

Many people don\’t know that.

Somebody learned that just by coming to a workshop because we talked about it and he said, “I thought I went to a social security and sat down with them and they said that they don\’t have it\’s all gone that you can\’t do.” Well, he might\’ve said, can I do file and suspend? We\’ll file and suspend, yeah, that\’s gone. You can\’t do that anymore. But he wasn\’t specific and they can\’t give you any advice.

They key point or two is that spousal benefit does not impact the other spouse\’s retirement from social security. They still get the full amount. It doesn\’t reduce it. It\’s a feature of social security that you qualify for half of your spouse\’s full retirement age benefit.

Yeah, it\’s truly another real good example about what we don\’t know and the result of that is it cost you money. It just ultimately put you in a position where it costs you money.

A lot of money. This couple in particular, he was going to start his own benefit and he had four years to let his money grow and it\’s really increasing what their monthly income\’s going to be in retirement. And also just out there, if you\’re not married, if you\’re divorced, there\’s certain guidelines to being able to do this. If you\’re divorced and if you\’re a widow or widower, you\’re also able to collect that type of spousal benefit before you collect your own, which is really important.

This is something we identified for this couple when we did the social security maximization report that they had come into. They had just come in to workshop again, it\’s all complimentary. We\’ll meet with you the first time, we\’ll run the reports and we\’ll review the reports. They were thrilled. They were thrilled to find out but that\’s why we want you to get the most out our social security, and there are other ways that we will help you. They had no pensions, but they did have savings, but annuities are another way that we will guide you. Not all your money with partial part of your money to guide you to help make your own pension if you don\’t have one for yourself.

When you started the conversation, I\’m just thinking people make decisions in their lives at different times, but still in the matter where the decision is made, if the plan is there for the right decision, then you won\’t struggle when it comes time for that to happen, does that make sense?


I keep remembering my mother-in-law who I love so much toiling over whether or not it was time to sell this big huge house that she was in Glenside that was every month with the expenses to maintain this property under relief that she had when she finally did sell it, but she toiled for so long of it and consequently was paying taxes and everything else on that property.

And that\’s what we do for our clients. Every year, we\’ll get together and meet some new start out in one home in retirement, but things are going to change and we\’re here with you to guide you along the way.

Really good stuff, Karen. Thank you so much as always, I appreciate that.


Shout out to the members of our Thrive Army. Thank you so much for not only listening to the show every Saturday, but for spreading the word. We hope that you will continue to spread the word to your friends and family members and people within your social circles. Tell them about Roadmap to Retirement the Radio Show, the information is guaranteed to be able to provide you with knowledge and a truth about decisions that you have to make or at least gave it a that you have to understand.

Yeah, that\’s what we try to do is just create the conversations. A lot of times we get that surprised result. Geez, I didn\’t really know that was something I needed to consider didn\’t really think a lot about it, so on and so forth. One of the questions that we ask at the workshop is how many people in attendance have what we consider what they consider a written retirement income plan, do you think that\’s a big percentage or a small percentage, Joe?

I would think it\’s a very small percentage.

It is. It\’s really a small percentage. Again, retirement is this thing that’s really interesting because people think about it. Many, many people plan for it, but it gets there sooner than anticipated a lot of times and I can\’t tell you that it\’s really put together with a document that people can sit down and people get stress test the retirement account.

They\’ll go to a Vanguard website or a Fidelity website and they\’ll use the tools that are on the website, but that\’s kind of really just for the investment. It doesn\’t really take into consideration all these other things that we talk about and like I\’ll talk to you about these five questions that people should be asking before endowing retirement. But getting a written retirement income plan, it\’s that roadmap that we talk.

It\’s really finding out what do I do? Do I turn right? Do I turn left or do I keep proceeding forward? The thing that I see and I really appreciate because it allows for a real good conversation, is that number one, our listening audience and then number two, our seminar, our workshop attendance people really educated. These are folks that are not sitting at home on the couch.

They are not just letting life go by as it does. They come out on a Tuesday night or a Wednesday night or Thursday night, they\’re not going to a dinner seminar. There\’s a lot of people that go to financial companies that host dinner seminars and most people, let\’s call it what it is, they go to those tea dinners and maybe they\’ll pick up a little information but they know for a fact they\’re going to get, they attempt to sell them that something is definitely going to happen. We do over a hundred workshops on an annual basis and you can\’t find one person that\’s attended over the past three and a half years that would tell you that we tried to sell them something.

I was just going to say you can\’t find one attendee who bought something from that workshop.

[bctt tweet=\” 50% of people who make the decision to take social security, take it at the earliest possible age of 62.\” username=\”\”]

That\’s exactly it, because these are designed for pure education. We hear so often from people, I came out to your seminar or your workshop, whatever you want to call it, because I saw something in the marketing, something in the pamphlet that really, really, I didn\’t know, or I wanted to find out more or I wanted to see how that worked. We talk about taxes, we talk about social security, we talk about retirement income, all those different things, it\’s exciting to talk, talk here on the radio show, we know that the people listening are understanding what we\’re talking about. They\’re taking it and adding it into what they do, we want to keep up that effort. This article that I read from Barron\’s, I\’ll paraphrase a lot of it. Look, every retirement is different.

Every person, every retirement plan, everything that people think in their head, they\’re different, because people are different. Yet some issues and questions are common to almost everyone\’s retirement. One of the things that we want to make sure people understand is that most retirees have the same big picture goals. They want to establish and maintain financial independence without working for compensation, that means they want to maintain their desired lifestyle without the risk of running out of money. We address that big time and those are those two overarching questions that we hear when we sit with people is number one, do I have enough money to retire the way I want? And secondarily, will it lasts? That if I happen to be a married person will ask both of our lifetimes.

Do people tell you, David, that they think they\’re going to live longer, they expect to live longer? How do people think about that?

Yeah, we pry it out of them, before they ask them, we\’re very detailed in what we do, and we actually ask about mom and dad. We ask about longevity. We ask about good genes in the family. When did mom pass away? When did it, Oh gee, they\’re still living at 98 years old, God bless but that tells us, and then our next question, well how\’s your health?

We start putting the equation together and standard actuarial tables, tell us guys tend to leave this earth at 82 and women typically at 85 but if you\’ve got a 65 year old with mom and dad still having a great time in their mid to late 90\’s and they\’re in good health, we got a plan beyond 82 and 85, that\’s a big deal.

It\’s a very big deal.

That\’s what I talk about Joe, with this written retirement plan. These are the questions that we ask the answers given may change what we deliver from a plan perspective. Big question, when should I start taking social security? Karen covered a lot about that just a moment ago, but it\’s really important, 50% of people who make the decision to take social security, take it at the earliest possible age of 62.

Which is the wrong time.

The answer to that is maybe, more often more frequent, that\’s the right, it\’s wrong. But it could be. If somebody\’s has a health crisis type situation and their life expectancy has been shortened, then yeah, get on social security. Get as much as you can if you think you\’re not going to make it but for most people that we sit down with Karen address something I think is really important is there were, and I hate using the word loopholes, they were policies that social security had that allowed people to modify their election choices so they could benefit more money out of the social security system. The reality is, Bret, what was that number, 4% of the American population know about it?

It\’s 3%.

Like 3% or 4% was actually using the benefit and which means not a whole lot of people, so it really wasn\’t putting any drain on the Social Security Administration. But, they decided to eliminate one of the two. That option of doing a restricted application, Karen gave the dates, so if you met those dates, you could still take it and the result of it is you just get more money out of social security. The big question is why wouldn\’t you do it?

You\’re right.

Well, the reason you might not want to do it is you don\’t know if you can, how do I survive until I get to social security, I need those assets? Well, Joe, see that might be exactly where we start to spend down some of the IRA assets because we can do a tax efficiently and at the same time it gives us the opportunity to push out social security age a little bit further. Again, that\’s not traditional wisdom, but it\’s really smart. It really makes sense. Again, that\’s not traditional wisdom, but it\’s really smart. It really makes sense.

It really, really does make sense.

It gets people where they want to be because there\’s consequences of not taking social security at the right time. We give up money. If you happen to be a married couple, when the first spouse passes away, we lose the lower of the two social security checks. If you delay one all the way up to age 70, we maximize that benefit for the surviving spouse so that there\’s just a lot. When do you take it? That\’s a big question. It\’s especially important for married couples to coordinate when each begins the benefit so they can ultimately maximize their joint lifetime income.

Another question is how flexible can I be with my spending? Retirement, we know Joe is full of surprises, so when there\’s unplanned spending or a decline in income, adjustments have to be made and those adjustments have to be evaluated on what they\’re going to do from a taxation standpoint and what they\’re going to do from a longevity standpoint.

You always should know how much your spending is and more importantly, know how much spending is fixed and how much is flexible. Another question is, how will I turn my resources into reliable lifetime cashflow? People they do focus on retirement income, but they focus on it via earning interest and dividends on their nest egg. Instead, cashflow is actually what matters. You shouldn\’t worry so much about whether you\’re spending income or principal as long as you aren\’t running a high risk of spending down your assets.

This is something we deal with all the time. Well, I might be able to get enough rate of return on a monthly basis to offset my spending and they\’re trying to focus it on returns and dividends and earnings. We tell people for a portion of their money, and this is not always the case, but for a portion it might be a good idea to purchase either an immediate annuity or a deferred income annuity and what that does is it basically protects against longevity.

You can\’t run out. The income is guaranteed for life and the only time we use annuities is for that and some investment choices, for better diversification but what it really does is just reassures that retirement income if there\’s going to be longevity, the rest of your money can be invested in anything out there for total return, this protects against that.

Another big question really quick, Joe, is which Medicare choices should I make? We\’ve got a lot of people on Part B Medicare, they don\’t even understand how it all works. They don\’t know where it comes from, what it covers so on and so forth. We explain that, but many, many people go on the cheap and when they\’re looking for that Medicare gap, they go for the Medicare advantage plan because there\’s no premium to it and what ends up happening Joe, is it\’s really short a lot of times on what benefits that will cover. Again, these are things, I didn\’t get through all those questions, but those are most of the questions that people should be thinking about simple ones that we can have some impact with them.

Really good stuff from David Bezar and we hope our audience today enjoyed all of the information from David, from Karen, and Bret with his conversation about taxes. If you are interested in acquiring our services or for coming in for our free consultation do not hesitate to contact us. Thank you for reading and we hope you learned some new things!


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