Tax Day 2019


Tax Day. It\’s a day that many Americans are reflecting on or saying that their tax bill is going to go up. Others are looking for more last-minute advice about taxes. What\’s the penalty for a late tax return? All of those questions start to come in and kind of form above us, this big cloud above all of us.

Here at Thrive Financial Services, I don\’t think the cloud is so gloomy. I think that what I\’ve learned over the last year and a half from working with you, David, from working with you, Karen, and from working with you, Bret, is that Tax Day is not a day to be nervous about. It\’s just another day that\’s part of the roadmap when you\’ve reached a point of either being in retirement or getting ready for retirement. I don\’t say that with arrogance. I just want everybody to know that all is okay here for sure.

Yeah. Good morning, Joe. When you know where you\’re going, it\’s not a big deal. That\’s the whole thing. That\’s the idea behind a roadmap. I mean if you\’re going to head out on a journey without your GPS today and you may end up not where you want to end up, so if you put that plan in place in advance and do a little strategy session, everything works out pretty darn good.

Bret, let me jump to you quickly just to give you an opportunity to set the stage for what you\’re going to talk about in our first segment, but I know you\’re going to follow up on what we talked about or what we kicked off last week.

Yeah. We\’re going to go deep today talking about just different uses of life insurance and how that may fit into the overall puzzle. Again, we talked last week about why it makes sense to work with somebody as opposed to not working with anybody, and so we\’re just going to continue some of that conversation and how it leads into the life insurance side of the equation.

David, what\’s on your agenda?

We got two things that we\’re going to talk about today. We\’ll try to get through a little bit. The markets have been very close to all-time highs. You got two camps out there. One, the group of people who think it\’s just going to continue forever, and we have a group of people that are starting to sensibly start thinking about, \”How do I protect myself in this situation?\” There are a lot of different ways that we\’ve discussed on this show on how to kind of put that, quote, unquote, insurance play in place to make sure that, when the markets do, not a matter if, but when the markets do correct at whatever level they do, the impact isn\’t as bad.

We tell a lot of the folks that work with us that risk is for people who don\’t actually have a lot of money. If you have a lot of money, the risk game is kind of over for you. You really should just be focused, at that point, to kind of preserve your capital, outpace inflation and taxes from a growth perspective, and be happy and enjoy and sleep well at night. If you haven\’t done a well enough job in saving the money, yeah, you got to get out there, you got to take a little bit more risk in the market, but the thing about it is do it smartly, so we\’ll talk a little bit about hedging, how to go out there and hedge against market conditions.

If we have time, I\’m going to get to talking about Roth conversions. It\’s something that a lot of people hear. We get tons and tons and tons of questions about it when they come in. Very few people take action with it. The big thing about it is what we know today is that we\’re in a low tax rate. What we don\’t know about the future, we\’ll be still in a low tax rate. If not, we\’re going to kind of kick ourselves in the butt for not doing these Roth conversions when they were actionable.

The most recent changes have certainly affected the Roth’s

That\’s correct.

The Roth IRA, so that’s a good subject matter to talk about today. Karen, let me bounce over to you, if I can, just to find out directionally when you join us. What\’s on your plate today? What are we going to talk about?

A couple things. First is I’m going to chat a little bit about fiduciary standards. That word is thrown around a lot. What does it actually mean? If we get a chance after we get finished with that, I\’m going to talk about just some things that you have to be careful out there. Too good to be true is what the article states, but we\’ll talk about that and look at things to watch out for.

All right, good stuff. That\’s coming along a little bit later on in the program with Karen Bezar. That opening or that upcoming workshop, the one on the 16th of April, and Bret, I\’m going to ask you to correct me up front on the time because I did butcher this last week. The Henrietta Hankin Library on Windgate Drive in Chester Springs. It\’s on the 16th of April, Tuesday.

Start time is 6:30 p.m.

Okay, so 6:30 p.m. at the Henrietta Hankin Library, 215 Windgate Drive in Chester Springs. That\’s the only workshop scheduled for next week. You can go to and get information on getting registered for that workshop. If that\’s a workshop in an area that falls outside of where you are, look ahead to the following week. The entire schedule is posted on, or you can simply call 1-800-516-5861.

David, I always try and get a few opening remarks from you. We only have 90 seconds until we get to the break, but I\’d love to come back to you before we get into the break just to give you the floor, give you the platform to talk to the audience directly for 90 seconds.

Yeah. Just like I was saying, Joe, market conditions, they look fantastic. Things are growing, at least in the market valuations, but when you look in the underlying elements of what\’s got this market in this fervor, I start to get a little concerned about that.

What I try to advise people, at this particular point, is to take a sensible approach. When we look at people\’s portfolios, whether they\’re self-directed or they\’re being directed by another financial advisor, I can\’t tell you how often I just get completely and utterly blown away. Just somebody that maybe has $1 million, and then you end up seeing that that money is diversified down to a level where they may only have $78, was an example of somebody I saw yesterday, and a $1-million portfolio. They had $78 sitting in one investment. You kind of think about that like what\’s the purpose behind that?

Long story short, Joe, is I really encourage people to look at two things. Number one is that there are option strategies out there using the S&P 500 Index and using the V-I-X, the VIX, the Volatility Index. There\’s ways to buy option strategies that really kind of put an insurance plan in place for you if the market does come down. Karen and I are taking a trip coming in July. We sat with the travel agent, and he said, \”Do you want travel insurance on that?\” The travel insurance was $2,500. When I first thought about that, I was like what the heck would I spend $2,500? Then you start to think about all the possibilities of what could potentially happen. We\’re getting travel insurance. You just hear too many stories. That\’s what option strategies can do for your portfolio if something were to happen.

In addition to that, people should be considering what we call non-correlated assets, things diversified outside traditional stocks, bonds, mutual funds, ETF\’s, things that still have really great potential for growth but they won\’t be impacted when the markets come down. People can give us a call, 800-516-5861 to get some ideas related to that.

This is a nervous weekend, as we said, Bret, for a lot of people. Monday is Tax Day, April 15th.


Yeah. We always tell people breathe. Again, breathe when it comes to Tax Day. Again, for us, now that we\’re sitting two days, T minus two days to the official filing date here on Monday, it\’s not a big deal, at least for our clients because, remember, we always talk about, during our workshops and here on the show, something that\’s called forward tax planning. Okay?

What that means is, for example, we just met with a client this past week on April 10th, and they had reached out to us in late March saying, \”Oh, my gosh. Oh, my gosh. Oh, my gosh. We\’re not meeting with you until five days before Tax Day. What is it that you can tell us that we can do so we can help out our situation?\” I said, \”Well, you could take a time out,\” be like the things that we talk about on the show, just like we talk about our workshops is there\’s not much you can do after you get past December 31st that\’s going to help you for the past tax year. Can I make an IRA contribution? Can I make a Roth IRA contribution? Beyond that, there\’s not a whole heck of a lot that we can do because so much that can impact us needs to happen during the actual calendar year in which we want it to show up on that tax return.

For us, we never really make it a big deal about April 15th. Normally, our clients, the ones that are happy, we try to get them a little bit happier, and the ones that aren\’t too happy, same thing. We try to get them a little bit happier. Again, it\’s the suspense of, \”What\’s my tax return going to look like?\” But again, let\’s get a little bit of clarity, which is that software that we use is called Tax Clarity software, so we get peace of mind of not having pins and needles, \”What\’s my tax return going to look like on April 15th or March 15th or whenever we get our taxes done?\” It\’s let\’s be a little bit proactive and figure out what our taxes are going to look like going into the January 1st of making sure all those decisions were made so-

All part of what the Roadmap to Retirement is all about, and it\’s what the book is all about. It\’s what your philosophy is all about. It\’s what you do. I don\’t say it to the audience to brag or boast or be arrogant. I just say it to the audience because I want them to understand why we\’re here, why this show exists, why you exist, and what you do.

Again, we talk about so many different topics, not necessarily products but more concepts and, again, just educating the community out there so that we\’re aware of it. For example, Krause, here\’s a big one. We\’ve been talking about forward tax planning and required minimum distributions, things that have to happen at 70 and a half, and David brought up the concept of Roth conversions. To me, the big news that happened this past week isn\’t taxes are due on Monday. It was actually a week ago, and they\’re still talking about it today, was, believe it or not, Congress is actually speaking with each other, and about the only thing that they have passed recently was something that was called The Secure Act. I actually happened on April 2nd.

[bctt tweet=\”For us, we never really make it a big deal about April 15th\” via=\”no\”]

Let me explain to you some things that were in there, but I want to go through the cliff notes. When Congress passes something, there\’s normally 18,000 other things attached to it. I\’m going to ask you a question. Krausey, at what age do you have to take money out of your 401(k) IRA? You\’re mandated by law. Do you know?


And a …

70 and a half.

That\’s exactly right. You\’ve listened to the same thing that everyone else has.

They just changed 70 and a half to 72. That\’s a big deal. Why? People are living longer. The government said, \”Okay, people are going to end up living longer. They\’re going to end up having to work longer.” This could be another two years which somebody would have to take the required minimum distribution.

Now, we\’re waiting for the final stamp of approval to be put on that, but you have bipartisan agreement across the board. They\’ve been talking about this for almost a decade now, so we expect that to possibly be into play as early as next year, so stay in tune for that. That\’s a big deal. Feel free to Dr. Google. He has all the information that\’s out there, but it made a lot of news, especially news for us. That\’s a big deal, required minimum distributions moving from 70 and a half to the age of 72. We\’ll be talking about that in the weeks to come.

I want to take a step back today. Last week, we had spoken about how Vanguard put out a great article about why you don\’t need to work with an advisor, but if you do need to work with an advisor and they charge you a fee, they will be making their fee up to 3%. I\’m talking about things like taxes, and re-balancing, and asset positioning.

One thing that we have passion about is we always give people that roadmap, again the Thrive Retirement Roadmap Review of what things are going to look like into the future. What we sometimes need to be conscious of too is making sure that we have those protections in place to make sure that we make it to that future. A lot of times, those protections end up becoming life insurance. Life insurance can be used as a risk mitigator, but also can be used also, sometimes, as legacy enhancement.

Krause, you actually sent me a great article heading into the show talking about the new retirement mindset. It said, today, retirees are living it up. Their secret? They started their planning early on, which is what this Thrive Retirement Roadmap Review is all about.

People constantly ask us from the radio show or constantly ask us at the workshop, \”I\’m not going to retire for another two or three years. I\’ll call you three months before I\’m ready to retire.\” It\’s like, \”No. We want to start the conversation today. We want to start the conversation today because it\’s all about preparation.\” Again, we never plan to fail but rather fail to plan, so the more that we can get out ahead of it and being prepared, the better off we\’re going to be. A lot of times, how we put those simple protections into place to make sure that people see that successful retirement, again, is leading to my conversation today talking about uses of life insurance.

The first use and type of life insurance I\’m going to share with our audience today is something that\’s plain Jane simple, Krausey. It\’s the cheapest way to go. It\’s something that\’s called term life insurance. Talking about they started the planning early on, I mean these are things that we talk with people about and their children, whether they\’re in their 20s, 30s, 40s, 50s, 60s, almost all the way out. What are we trying to protect against? We may be raising a family. Maybe I have kids in college and I need to save money for college. Maybe I have a mortgage. It\’s those things that we\’re trying to protect against.

When we say term, it means there\’s limit. There is going to be an end at some point in time. When we purchase insurance, term insurance, typically you buy it for a preset number of years, 10 years, 15, 20, 30 years, so at that point in time where if I could say, \”Let me have my insurance expire at the age of 68, my mortgage is paid off. The kids are out of the house. I now have my retirement nest egg there.” Yeah, that would be an appropriate time. It may make sense for that insurance to no longer be there. Again, term insurance, a lot of times, is being used for the protections of the what ifs. We call it income protection if you will. It can be used with either disability insurance or from life insurance. Something that\’s basic, and it\’s something that we believe passionately about of just making sure that you\’re protected for the what ifs in life that are out there.

The second insurance that I\’m going to talk about is something that\’s called guaranteed universal life, Krausey. How I would describe this insurance, think of it like term insurance that we just went through except there is no term associated with it, meaning we\’re going to buy an insurance policy. We\’re trying to do it the cheapest way possible, meaning we\’re not trying to build any kind of monetary value within the policy, just buying it for pure death benefit, but guaranteed universal life similar to term insurance, not looking for any cash value associated with it, but the only difference with guaranteed universal life is that there\’s not going to be an expiration, meaning it can go all the way out to 100, 110, 120 years old.

A lot of times, it can be used for some legacy enhancement, sometimes long-term care. We\’ve talked about that on the show, long-term care. Sometimes it\’s being phased out, meaning not so many carriers are offering any more, talking about traditional long-term care, so sometimes you can have long-term care built into a life insurance policy today, Krausey. That\’s where guaranteed universal life can be used.

We\’ve seen some people also use it. We just had a couple in last week where mister is getting ready to retire, and his wife is 10 years younger. They came in with this concept. They said, \”Bret, we\’re going to take our pension based just on my life, but I\’m going to go buy a life insurance policy so, if I die, my wife\’s going to be made whole with that balance because I\’m not going to do a joint life pension.\” If you\’re a regular listener of the show, we\’re not necessarily big fans of that strategy. However, sometimes there is a time and a place with it. Our issue with the plan that he had put into place was that he was doing it with term life insurance, meaning he was taking single life, single life on his pension, bought a 10-year term policy with that. I said, \”What happens if you die in year 11? There\’s no life insurance, and your spouse has no pension either.\” That\’s, a lot of times, where guaranteed universal life, again, going out forever is where that can fill the gap.

Is it a little bit more expensive? Yeah, but if we\’re going to try and get sophisticated, that\’s where some people do things unnecessarily. We call it overthinking, creating problems where there shouldn\’t be any problems that exist, is that if we just simply take a conservative approach, we win. Not only we win, but our spouse wins, most importantly. So many times, people win while we\’re both living. First one passes, and then the other one\’s trying to figure out which way is up because of all the different changes that have occurred with Social Security, pensions, etc. We have to be conscious of that.

Another type of insurance, Krausey, is something that\’s called second-to-die. it\’s called survivorship universal life policies. Here\’s an example, Krausey. If I have a couple, a husband and a wife, and let\’s say they both go buy a life insurance policy, we\’re going to go back to the one above it, guaranteed universal life. If they each bought a $250,000 policy, okay, they each bought a $250,000 policy, it\’s going to come up about 15 to 20% more expensive than a survivorship universal life policy because a survivorship policy does the following: it only pays a death benefit when the second person passes away, so the insurance company only has to pay out once. If I have a couple, each have a 250 life insurance policy, but I went out and got a half-million-dollar second-to-die policy, it\’s going to be about 20% cheaper than if I bought two policies.

That\’s an estate legacy tool. Neither husband nor wife nor partner is going to benefit from it. It\’s going to be going towards a charity, going to be going towards the kids, etc. Sometimes it\’s a way to offset estate taxes. Again, it\’s a second-to-die policy called a second-to-die universal life.

Special thanks to Bret Elam for his conversation in the previous segment. Let\’s get over to Karen Bezar. Hi, Karen. How are you?

Good morning. I\’m great. How are you doing?

Good, good, good. Nice to have you energized. Where we going? What are you talking about today?

After what Bret just spoke about, it kind of ties in a little bit. I\’m no talking anything about life insurance in particular but, this past week, I met with a decent amount of people, couples, singles. Three times this week, women came in who had lost their husbands in the past year or so, maybe year and a half. It goes back to what I always say. You really need to sit in in all the meetings that you have with your financial advisor because they came in, and their husbands did everything, and they never paid attention to it.

Now they\’re stuck with it\’s their responsibility, number one, and number two, not all of them had husbands that did a great job. Not that their husbands were trying to do a bad job. One woman, her husband did a fantastic job, and she knows she\’s in decent shape, but she also knows she needs some help. Then the other end of the spectrum was a woman said, \”I let my husband take care of everything, and now I realize that I should have been paying more attention.\”

Then it goes both ways because I\’ve talked about this before.

We actually have a client, I\’m not going to name names, but she said, \”You know, I heard you talking about that on the podcast, and I looked over at my husband and poked him,\” because it\’s the opposite with them. He does not care. He doesn\’t want to know what\’s going on. She said, \”See? Karen said you have to know what\’s going on.\” The good thing is they\’re our clients, so what does that mean? We act as fiduciaries for them. He knows now that everything\’s got a plan and that we\’re here to lead him if something goes wrong. Unfortunately, for the three women that I met with this past week, that\’s not their case.


The one woman I met with said that she is looking for an advisor. She goes, \”But I don\’t even know what questions to ask.\” The one thing I brought up was make sure whoever you meet with follows the fiduciary standards. We throw that word around a lot, Joe. You\’ve probably heard us talk about it before. She said, \”Yeah. What does that really mean?\” I have some actual definitions here. I\’m just going to discuss what the difference is but that it\’s so important, after I read this, you all understand why to have somebody who follows fiduciary standards, is a fiduciary is important if they\’re handling your money especially.

There is a different between suitability versus fiduciary standards. Investment advisors, and then there\’s investment brokers who work for broker dealers, both offer investment advice to individuals and sometimes institutions but, however, they are not governed by the same standards. Investment advisors work directly for clients and must place clients\’ interest ahead of their own according to the Investment Advisor\’s Act of 1940. Brokers, however, serve the broker dealers they work for and must only believe that recommendations are suitable for their clients.

Advisors are held to the fiduciary standard. It requires us to put our clients\’ interests first, so we have to act a very specific way, and we have to constitute. it consists of duty, loyalty, and care. That\’s what the terminology is. For example, advisors cannot buy securities for their accounts prior to buying them for clients, and we\’re prohibited from making trades that may result in higher commissions for ourselves. It\’s always the client\’s best interests. It doesn\’t matter if there\’s something out there that\’s better for us. We always have to work in the client\’s best interest.

It makes me sick to my stomach when I hear people come in and go, \”Oh my broker takes good care of me.\” Then, a little bit again, differences with a broker is they follow suitability standards, so they have to place interests below that of a client. The suitability standard requires only that the broker dealers must reasonably believe that any recommendations that they make are suitable for the clients, so it\’s suitable and it\’s okay, but it might not 100% be in the best interest of their client. I mean they\’re still doing an okay job. In this article, they said the key distinction, in terms of loyalty, also is important. The brokers serve the broker dealers. Advisors serve the clients, always put our clients\’ interests first. I think that\’s very important.

When I told the woman I spoke with, I told her that. I said, \”Make sure whoever it Is, is a fiduciary.\” I said, \”We act as fiduciaries, and it\’s very, very important.\”

Yeah. I almost think you can\’t do anything else. Would that be fair? I don\’t want to be disrespectful to anybody.

Yeah. I agree with that, but there are people out there that are good salesmen or saleswomen or whatever the case may be. I just think, if you\’re out there looking for an advisor, that\’s really important to ask people, \”Are you fiduciaries?\” They should say yes. If they\’re not, you might want to think about that.

But it\’s true, right?


It\’s in your best interest.


You should work with someone who has your best interest and is obligated to it. Joe, you and I both listen to a ton of talk radio, and we hear all of the financial advisors throughout the country who have radio shows. The thing I think you and I and the team here are most proud of is we never get accused of running an infomercial. It\’s a lot of good quality. It\’s because we\’re so ingrained with this idea of advocacy and education for people. All you got to do is pick up the newspaper or google some of the advisors out there, and you\’ll be very surprised that sometimes they can\’t even take care of their own financial situations or their own legal situations. You just got to question yourself why would you potentially work with somebody like that?

I have to believe, and I can say with 100% accuracy, but I do, to your point, David, and to Karen what you\’re talking about in this segment, I\’ve got to believe that Thrive Financial Services is head and shoulders above the rest of the market when it comes to educating and caring about being an advocate for your client or your potential client. I think it\’s true.

[bctt tweet=\”You should work with someone who has your best interest and is obligated to it\” via=\”no\”]

It makes us feel good. Again, it just makes us feel good because that\’s what we know. We put our heads on our pillow at the end of the day knowing that we really did what was in the best interest of the people that we serve.

And, and Karen you can jump in here, it\’s been stated many, many times on this program if, at any point, you don\’t want to become a client of Thrive, that\’s okay.


Right, and we act in our clients\’ and our future clients\’ best interests. Sometimes, you\’re not going to like what we have to say because we\’re being honest and we\’re giving you not our opinion, but we have information from you, and we did reports, we did a thorough investigation. Some people don\’t like what we have to say, and they don\’t become clients, and they do part ways, but we were honest with them and told them the truth, and we have a fiduciary responsibility.

And vice versa. A couple quick examples are this old cliché or this old saying out there, “a person convinced against their will is of the same opinions still.” We\’ll have people that want us to validate their plan, which was maybe self-built or maybe given to them by another advisor, where we see flaws in it. There\’ll be times when we just say, \”We can\’t do that.\” We never get argumentative, but we can\’t just bend because we want to be diplomatic. There are times when we tell people, \”It\’s really not going to be a great fit for us.\”

That statement, in itself, is very powerful. Good stuff from Karen Bezar today.

I have time to let everyone know Tuesday, April 16th at Henrietta Hankin Library in Chester Springs, the start time is 6:30. 215 Windgate Drive is the address. 1-800-516-5861 is the number to call.

Now we turn over to David Bezar to bring home the last segment today.

Joe, I\’m going to talk fast because it\’s a big topic and, obviously, we have a limited amount of time.

Then I\’m going to shut up, and I\’m going to listen.

That\’s okay. Again, we always like input because we think you kind of represent the consumer perspective. A lot of questions you ask, Joe, have a tremendous value, so don\’t hesitate. In addition to that, this is coming out of an article, Kiplinger\’s Personal Finance magazine, April\’s edition, page 37. Think it\’s really good. By the way, just interestingly enough, we were actually interviewed by Kiplinger\’s magazine, and we\’ll be in that magazine. I think it comes on the newsstands next month.


Nice. That\’s great stuff.

Yeah, very excited about that. We\’re on their website and all that good stuff.

Wow, that\’s awesome, terrific stuff.

Yeah. One of the comments, as I go through this, and I\’m going to talk fast, is I really want to just kind of share with people that it really is a no-obligation, hassle-free experience to come out to one of our workshops. A lot of the things that Bret goes over, Karen goes over, I go over are at that workshop. We get to spend an hour and a half at that workshop.

Then we offer that complementary report by coming into the Thrive Retirement Roadmap Review. It\’s the first appointment. We get to know each other. Again, complementary, no obligation. You bring in some financial information that will have a lot of value, and we\’ll be able to, from that financial information you provide, go and create these reports, Social Security if it\’s applicable, cash flow analysis, Tax Clarity to see what\’s the best tax optimization strategy for you, which is really the one that causes people to want to come in because, 9 times out of 10, if they\’re working with a CPA, they\’re not getting this information. They certainly are not getting it if they\’re working with a financial advisor.

We ask that question, \”Why did you come in?\” They say, \”Well, we have a lot of questions on taxes. We\’ve asked our financial advisor, our insurance producer, whatever it is. They said you really just need to talk to your CPA.\” This is something we specialize in. This is what we love talking about is how do you pay only your fair share?

10 quick strategies for IRA withdrawals. Number one is, excuse me, you got to learn how to calculate the amount for your required minimum distributions at age 70 and a half, right? RMD’s are based on the balance in your accounts as of December 31st of the previous year divided out by a life expectancy factor based on your age. We help people with that, something you got to know. A lot of people don\’t even know what that formula is, so these RMDs are kind of … there\’s a lot of curiosity and mystique about them, so we want to help people get that understand.

Number two is make sure you time it right. You usually have to take your annual RMD by December 31st, but you actually have until April 1st of the year after you turn 70 and a half to take your first required withdraw. Now, however, delaying the first withdraw means you\’ll have to take two RMDs in one year, which could have a ripple effect, more taxation, possibly impact your Medicare surcharge levels.

Number three, pick the best accounts for your RMDs.

We talk about this all the time. Obviously, Roth accounts don\’t have required minimum distribution rules to it, so these are going to come out of your traditional accounts, but sometimes people have made contributions that were post-tax and some that were pre-tax, so you go to figure out does it make more sense, maybe, that you didn\’t get an actual deduction on this money, but does it make sense to take that out first before you take out the previous dollars? Something to think about there.

Number four is you\’ve got to understand how 401(k) rules are different than IRA rules. People don\’t know that. We ask that question in our workshop. I ask the question, \”Let\’s say you got good performing assets and lesser performing assets. One of them is in an IRA, one\’s in a 401(k). Can you leave the 401(k) okay if it\’s really performing well?\” 90% of you will say, \”Yeah, I can leave it alone.\” Not true. Got to take a distribution, part of the rules. Okay? It\’s things like that, knowing that.

Number five, choose the right investments to withdraw from. That was what I just basically was talking about. If you\’ve got assets that are really performing well in the market, you\’re going to want to leave those alone. If you\’ve got lesser performing and you got to take a distribution anyway, maybe that\’s the place that you should start to do that.

Another thing that I try to help people understand is it\’s really good to automate the process because sometimes you may just want equal distribution across all your assets. Maybe you\’ve got four different accounts, 25%, 25%, 25 and 25, and you just get it automatically set up. That way, you don\’t miss it. That way, you don\’t have to guesswork it, all that type of stuff.

Number six. I actually just covered number six by talking more about number five.

Number seven, this is a good one. We really see this a lot because we\’ve got a lot of people coming into our workshop, Joe, that have substantial assets. People start talking about, \”What am I going to do with this money? I really don\’t even need it.\” Right? \”I\’ve got two pensions. I\’ve got Social Security and then, all of a sudden, I got to get this RMD, and I don\’t even really need the money,\” so the topic of charitable contributions comes up a lot. What you can do with a tax break is you can actually do qualified charitable distributions. It\’s a very good thing, number one, because you can give up to $100,000 a year, and that money that would normally be coming directly to you in an RMD, which would be taxable, now goes directly to the charity of your choice and doesn\’t show up as income.

Now, here\’s where the confusing part is. You still get a 1099. A lot of times, we see people in retirement that are doing this and are confused because they get this 1099 and they go, \”Well, what am I supposed to do with that?\” That\’s one of the questions that we answer at the workshop or during our Thrive Retirement Roadmap Review. You could start to see, Joe, these little intricacies, these little things that you got to pay attention to be able to navigate retirement successfully.

Number eight, roll money over to a Roth.

I really wanted to spend a lot of time on Roth. Maybe we\’ll do that next week. This is such a wonderful time to start to consider, maybe even execute sooner versus later, Roth conversions. Here\’s the main reason, Joe. We know what the tax rates are right now, and they\’re low. They\’re really low in comparison to what we\’ve all experienced for a long time. With the market as high as it is, with tax rates as low as they are, it really may make sense to start doing these Roth conversions.

Two things basically happen. One, we start to distribute money now, pay those taxes. It\’s a little bit of a band-aid that you got to rip off, but we at least know that the taxes are low, so we\’re locked in at those low rates to pay it. Then we can convert it over to a Roth, and then that future income coming out of that Roth sometime in the future is tax-free, and you certainly don\’t even have to take a required minimum distribution from it, so that\’s really good.

Also, by doing the Roth conversion, we\’re reducing the principal balance in the IRA, 401(k) accounts, so that means our future RMDs are smaller, which means it should be less taxation. Now, the one thing that I poll every time I do a workshop is I ask people, \”How many of you believe taxes will go up in your retirement future?\” It\’s almost 100% of the hands raise up in the room. We typically have 65 to 70 people sitting in a room, and it\’s almost unanimous every single time. Again, if you know that\’s the case, why not take advantage of the strategy today?

Number nine. Consider what\’s called a QLAC, Q-L-A-C. What that is, is something that the government came up with. It\’s a deferred income annuity known as a qualified longevity annuity contract. By doing that, what you end up getting is you don\’t have to take an RMD from it. You can invest up to $130,000 a year from your IRA accounts and not end up having required minimum distributions from that, so that\’s a big darn deal. A lot of people have no idea, no understanding. They instantly hear the word annuity, and they say, \”No way, no how,\” but this is something that the IRS and the Treasury Department came up, said it could be a really great thing especially if you don\’t need that required minimum distribution or you don\’t want one for tax purposes.

Then number 10 is don\’t pay more taxes than you have to, right? Again, that kind of goes back to making sure that you keep track of what your deductible contributions were versus your nondeductible contributions were. That\’s something, again, that we see a lot of mistakes. What I really want people to remember is, when you make a mistake on your required minimum distribution by not taking the correct amount, that penalty that the IRS assesses is 50% of the amount that the mistake was.


It\’s a big deal.

That\’s a big number.

That\’s one you don\’t want to hit.

You do not want to make that mistake.

Not at all.

You know what I was thinking as I was listening to you, David, and listening, processing this show? Thrive Financial is a bulls-eye in one area: retirement. All of the things that you need to know about, Thrive specializes in. It\’s just so deep and detailed the amount of information. We\’ll never know it all. We\’ll never know it all.

Yeah. Again, Joe, it\’s like I said earlier. It\’s something we love. It\’s something we really pride ourselves on. Joe, look, I\’ll be honest with you. Just from a business perspective, we\’re one of very, very, very few firms who understand it at the level that we understand it. When people come to the conclusion that they need a retirement income planning specialist, there\’s only a couple of us out there who get the job done.

That will about wrap it up for today’s discussion, we sincerely hope that you we’re able to learn a thing or 2 that will be of value going into the future. If you are interested in a workshop or a complimentary consultation, don’t hesitate to contact us at Thrive Financial Services.

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