Ep 15: Tax strategies for retirement (Financial Safari)
Taxes! Uggh. Just the word makes us queasy. But there are some things you can do to relieve the burden both now and for when you retire. Coach is joined by a special guest to discuss strategies to help save you money!
This week's episode is brought to you by Capital Financial Advisory Group for all your retirement needs. Hello, folks. It's Coach Pete with Mr Ed Store and I'm in North Carolina. Ads from South Carolina got an exciting show today. We're gonna talk about taxes. We're gonna talk about fees and we're gonna talk about safety. Very important that we understand taxes, fees and safety. And absolute. Absolutely So we got a really, really good show. I really think that many people that many of you watching out there, many people that we talked to I don't understand these three concepts. I think it's gonna be a valuable show and look forward to entertaining you for the next half hour. Broadcasting from coast to coast. It's the financial safari with your host coach beet root. You'll hear from some of the nation's top financial professionals. So stick around and find out how to make it through the jungle of the financial world. Right here on the financial safari. Well, had, you know, taxes, does she put up a night? Doesn't tell that word that one word study everything and it shouldn't have to, but it does and, well, everything that's going to going on with all the taxes that we're gonna have to pay as we get to and through this cove in situation somebody's gonna be paying for all this tablet is bad enough today. Now it's gonna get expensive, actually. And the problem is, when you when you look for your taxes as a business owner, you have opportunities to deduct things right things off and so forth. But when you get into that retirement age where you don't have the deductions, a more good point that here's the thing, you're gonna pay a lot in taxes in retirement. If you don't do some strategic planning now to reduce those, you know, that's a really good point about having deduction. So what's the best time to queen some of your money through the tax process? When I said Queen, I mean, turn your regular IRAs into Roth IRAs or your regular for one case in tow. Raw form in case the best time to do that's when you have. You can get your income down as far as taking deductions. Retired toe. Hopefully, the house was paid off. So and and all the difference we hear all the stimulus packages, which dis means the money. It's coming for the government, which the government is us. Let's like that. Let's pass the burden way are the government. So we have to be very careful about it. Doesn't feel like it. Sometimes when you watch the the politicians act like they're the boss. Where the mosque. They forgot that a long time ago. All right, so now let's talk about folks who are watching. What's in your day to day Life is a planner. You do a lot of tax planning, tax planning. What are some of the most popular tax plans were tax planning strategies you put together for people that are watching like this? Well, as you were talking about, what a great time to look at. Look, when is the best time to look into taxes? Well, uh, the best time look at your taxes is now. I mean, here's a thing. We've gotten taxis and extended to July. Sorry. Yeah, July 15. So now is the time. Really. Look at you probably have all returned in your taxes. You have experienced the pain. So now it's time to plan to lower those and being that well we're in common. The recession, the markets down now is a really good time to look at those very heavy taxable traditional I raise and also your for one case or individual retirement accounts and their traditional Now is a good time to take him and convert him over to a Roth IRA. You have to look at that. Make sure you really sit down with your tax planner. To do this, you need to have a good enrolled agent with the IRS they called E ace and or CPS, and they really need to be working connected, hand in hand, connected with the investment person. Because a lot of times so there's a big disconnect there, absolutely underway over there and attacks guy over there and maybe even attorney of estate planning attorney over there. I don't talk to each other. And how valuable and how important is it for everyone watching to make sure that they're planning team is a real team. Well, in our firm in Greenville, South Carolina, we have the whole teams that we have the tax professionals, we have the investment professionals, we have the insurance professionals and we have the state planning attorneys were all there in the group and, you know, that's why we call it the Well Training Academy. We teach coach train just like you do here. I mean, you teach coach strain on your clients. We also do the same thing. And the biggest focus that we look and first and foremost is on the taxes because he is. We talk about when you're retired, you don't have that ability to deduct anymore. So you need to look at strategies you need to think about ways to maybe fix your your state planning in order to create charitable remainder trust. So there's all kinds of different things that you could be doing. And the best thing do is really sit down with your planner and have that conversation and make sure they truly work together with the investment personal. There's a lot. I mean, there's a lot of confusion out, and I just mentioned trust apologizing. I'm going off. But yeah, the estate planning attorney has worked with those three also. Yeah, but I mean, here's what I see it. I recommend a Roth a lot of times, and folks don't do it. They say I don't want to pay the taxes, and the beauty of the Roth is you pay him now because you know what the tax rate is right now. So if you know what the tax, that you're in control and so you queen it through the tax system and then the beauty of the Roth is you don't have to take those minimum required distributions out when you reach 72 also, when you pass the money on, it passes on tax free. It's almost like a life insurance policy without having to buy a life insurance policy. Nothing wrong with life insurance. So, folks, there's a tremendous life insurance policies out there that I want to talk about this all right, so life insurance, if set up right, will grow tax free, you can borrow tax free that money out, and then they Also some of the new life insurance policies will let you have a a long term care benefit based on the death benefit. Correct. Now let's say someone buys a $1,000,000 life insurance policy cost maybe 10,000 year Year three. Their $30,000 into paying for the life insurance policy, the $1,000,000 death benefit I don't. This is the numbers may be cheaper, maybe, and then they have a long term care event. Long term care facility charges $90,000 a year. You could reach into your $1,000,000 death benefit and get a $90,000 tax free cheque to pay. They want repair facility. And I mean, it was point over the only pay 30,000 and you can get you gonna probably be in the facility again. Another 90 maybe 95 chances go up. And so it's all that's the way that really turned the tables on. Exactly. And the really nice thing, which you just mentioned Coach, is That's all the thing about this way that state, federal, local and Social Security, Social Security attacks huge to get growing. Yeah, so that's it's a great strategy. Another one of the great strategies that you guys utilize. We utilize. So, yeah, it's a lot of folks watching say, Well, gosh, are we have a life insurance policy? I guess we could do that. Maybe Holley, not because they really improve. So you need a life insurance audit now on. It's a funny word. People don't like that when you when you get an audit letter from the I. R s. You don't like that. But if we can audit your policy and find out maybe the adviser of the agent who sold yet didn't setting the right one or they improve every year like cars, let's review your life insurance policy to make sure you're in the right place for the right objectives of what you really want to do. We Seymour people owning just the worst policies of all time. And if you, if you mentioned the policies themselves. If you look at them, if you've had that policy at least 10 years, insurance costs have come down, folks, they've come down. Believe it or not, that's hard to believe. Candy bars going up. So the old policies that you used tohave might be costing you more than you need. So having the evaluation, having your team check out these again, you have to have the team right. You have to have the investment and you have to have the insurance and you have to have the tax team looking together. All that, especially the insurance and tax thing, because guess what? The whole reason why you got into is to take out the money tax free. It's a time consuming process for us with planning team, but we if you're watching this show, I think when the office will do it at no cost you to get that review. I think it's a powerful review. The price on it for you It could save you or make you so much money, the future by doing the right thing. And we're gonna talk about safety and fees when we come right back. You're probably wondering why I'm standing here next to an old time gas pump. Hi, my name is Greg Berrien, and I served a woman to community for Capital Financial here. Capital Financial. We believe in setting up a plan that's going to provide you with a true financial Phil, just like you fill up your car at the gas station when you need it, so it's always gonna be there month after month after year after year. So if you want to take advantage of the financial Philip and meet with a professional who will create a one page financial review that will indicate if your need of a full blown financial plan, then give us a call right now and take the mystery out of financial plan. Call 888910 80 to 65 888910 80 to 65 or text breeze to 21,000. That's breeze to 21,000. One of things I want to talk about here we were talking about this under break, which you like that financial Philip. Then you like. All right, folks. One of the things. I'm a homeowner. You own a house. When's the last time you had a termite inspection? Uh, actually, last month. Why? Because it was that time. And why do you really do it? You want to make sure that your houses and eating away from the inside out, right? And so we look at the financial world the same way because a lot of folks out there, a lot of you watching have what we call financial termites. Your portfolio is being eaten from the inside out from too much risk, too many fees and commissions and expenses. And how important is it for anyone watching to make sure they're dealing with a true fiduciary planning, for it's very important because Here's the thing about working with a fiduciary first that somebody is trying to sell you a product. We work for you. You're actually our boss. So we have a fiduciary responsibility to make sure that we look at everything and that includes your four K and all the other products and programs that you might have out there to make sure that you're paying as little as possible with those those fees. So a lot of folks don't understand this coach in that you're really paying hidden fees inside your formal case. If you just Googled hidden fees in my 401 k you would actually be shocked and amazed how many articles and pages will come up telling the people that you're paying the fees and your I promise you that your employer may be paying for partial of the account maintenance, but they're not paying the fees. They're built up. A lot of times, the employers don't realize what the hidden fees or it's in the plan document. It's called 60 Minutes. The TV show did expose on at about 10 years ago, and if you Google 60 minutes and 41 K fees, it's alarming it because the only feed they really show you on the statement is a dollar. And that's the printed statement. That's right. Way we have to disclose are fused. Well, yeah, we do. And we don't take commissions out of people's money. Which a lot of you watching, Probably commissions come out, and maybe you don't even know it. So that's why it's important to have that fee analysis and and identify those financial termites because you come in, you say, a coach, we're not paying fees. We don't see any, Well, sort of like the person coming and I don't have termites in the house falls apart right by the time you see a termite is to a so. But we can get rid of and eradicate this fees and stop the process of you sharing your retirement money with your brokers. Retirement when I always say Whose retirement funding yours or your brokers? Unfortunately, many of you were funding or brokers. Well, there's an amazing that we're broker every time I use it. That's what they call it, right? You're right, you're absolutely right. And here's the crazy thing is it's kind of like going to the doctor I never really won't go the doctor for the annual checkup. Or or depending on, if you're really saying you have to go that quarterly checkup you don't like. Well, here's the thing. You only go to the doctor when you're sick, and then also and you're really sick and you have to do a whole lot of work or you take a whole lot medication, preventive maintenance, correct. Very important. And that's the problem is people wait too long. So, you know, five years before your retirement, you really should be sitting down with your fiduciary, our team, your team and go over there and doing evaluation, because that's the only way you're really going to know you weigh. Call that a financial red zone, by the way, five years out of retirement or in retirement, you really are in a position where you could still be in control. But you have to know who is trying to really control you exactly. And you can't go back to your current advisor because if you go back, t o go back to your room with your current advisor to get a second opinion. He's one to get the first. There's a recycled, and I like to recycle. We recycle in the office, but not for not for opinion spoke. We need to make sure we're in the right place and and getting it from a fiduciary team in writing, Ed. Very important askew. See, folks, we have no notes here on purpose, and I'm gonna fire Semaj yet. And if you don't, if you can't come up with it off the top, your head don't worry about it. But what's the worst case of financial termites you've ever seen with someone coming in to your office thinking they didn't have any bad fees and expenses like that? At least 7%. 7%. Every 7%. They were paying fees. They had the They had the terrible variable annuities. And they also had an extraordinarily expensive for a one K. Well, and believe or not, I don't want mention any type of company or the mutual funds or anything like that. But when I really showed him the fees, what was going on? Regulus? Yes. He got mad at me because you you should I showed him the fees. You know, nobody wanted so funny. I was like, OK, wasting way and it wasn't that any. He really got mad, got up, walked out, came back after about 2030 minutes and apologized. He goes, wasn't Machu. I was mad that this happened to me. I let this happen to me. And ago. You didn't let it happen to you. It was done, Teoh. It is because people don't understand. They should use fiduciaries. Well, thinking about bringing bad news, he brought bad news to him that you didn't didn't create the bad news. But member of Napoleon, Anybody who brought him bad news that it was no cooling down, period gone. Nobody wanted bring bad news in a bowling. But you have to know. And the sooner the better. Finally, things out like this because you were probably ableto they were derailed. They're playing with the rail. They didn't know what you were able to get him back on track. Yeah, you come the termites eating from financial termites here and they will. There you can use beauty thing, lower your fees, you can lower your risk because then you don't have to take so much risk in the market or in other programs to get your returns. Will think about this. Yeah, Now that's the outrageous fee, but we do see a lot of two and 3% so a two or 3% fee is almost like a two or 3% loss every year. So then you have to gain two or three just a break even. And so if you think you have a 10% return, but you have 3% fees coming out now, you only have a seven. And that really makes a lot of difference over the course of a lifetime, folks to figure out really in your head, you can turn the tail at the table on your banker and impress a lot of folks in your family, the rule of 70 to take the interest rate that you really are getting divided into number 72. Whatever number you get, that's the number of years will take for your money to double, and we always want to double money and double it again, right? But if you have that under tow, that financial gravity I knew if I point out playing, recalled the front with a pole down of your money holding you down, tethering your money down, you need to be untethered in a plan for retirement, because when retirement comes, your paycheck is going to come from the money that you put aside very important. So when we look at what's the at what I need to see a lot of fees and people come in. What's the average fees and overpayment people paying and is 111 feet I want to ask about We see this and I want to get across real estate investment trust. A lot of people can like a safe 100,000. The really great fancy brochure is, by the way, you put $100,000. You buying your pulling your real estate by with everybody else. If you do it through a broker, $100,000 you write, the check for 90,000 goes into your account. 10,000 goes in their brokers and thats so now you're way behind the eight ball. You need your investment to really multiply, and a lot of those air not performing well at all are they really doesn't trust. We have to be very careful with that, so just making sure that we get that true plan, which gives you the true peace of mind as we approach, you know, and we say five years out of retirement, I think everyone 40 and up needs to make sure they are not over paying fees for one case, any kind of plan. But folks will do that for you. All you have to do is call the number you see on the screen. When we come back, we're gonna talk about safety. When I was a kid, I used to ride my bicycle off of cliffs. I don't do that anymore because I don't want to incur the risk if you still are in 100% risk column of your financial position than you realize. And you know, deep down inside your heart, there's something wrong, but you don't know how to fix it. If you want to fix that problem, if you want to take that risk off the table, then you need to give us a call. And we'll put together a financial plan that will be there for you for the rest of your life and mitigate the risk factor and take a completely off the charts. Call 888910 80 to 65 888910 80 to 65 or text breeze to 21,000. That's breeze to 21,000. Retirement planning can be stressful, so our process is designed to put you at ease. You'll notice immediately that we are different than other financial advisory firms during your initial consultation will get to know you and give you the chance to get to know us. We want to learn all about your vision for retirement so that we can design a plan that will help you achieve your long term Financial goals are relaxing office environment friendly staff will make you feel welcome and comfortable the moment you walk in the door, folks. Safety How important is it? Had to make sure we have that safe plan. So many people watching think they have safety. I've met with a lot of folks over the years. Oh, my plants safe. When the market goes the wrong way, gets what happens to your portfolio. It goes right to so a true safe plan should be a plan that you don't have ever have to worry about market crashes or anything. Interest rates erupting and destroying your portfolio right when you need it the most, and that's that's really what is. A lot of folks have experienced a big turn down in their portfolios and not having that safe money, that portion of the portfolio that you can count on to and through your retirement. If is critical, it's actually the first thing that we look at for anybody other than we let way use the taxes as a tool. But the whole idea is to make sure that you're have that safe money to really again take you to and through retirement. When I say that first off, coach, we're living longer. We were thinking a bad thing. Best time. I mean statistically young the I think the ages were 85 86 but now so security actually came out and change those. And now we're living into our nineties. So we got think about that safety all along way also, so it it's going to change and interest rates are going to change. But like you said, creating that first income in that first safety program, it's a point. It has to be done as and then streams of income bucket ing strategy, making sure you have a bucket of risk, but also a bucket of safety in a bucket of liquidity money. You get to if you have a flat tire or you need a new set of tires or roof, you got to be able to reach somewhere, get the money without draining of retirement accounts. And I personally don't like the idea that people trying to say all I can take three and 4% off my portfolio. Well, you know something, that portfolio may not be able to generate you that three or 4% Because here's I mean, you know this. I mean, listen it the market could go down, interest rates could drop. We've seen that. Are we not? Are we not doing that? We're not feeling now in a low interest rate environment and market. So So now you don't You can't pull that three or 4%. You're actually pulling five and 6% your air selling when you should be buying. Used to taking the same amount out every single year. That percentage could go up or down, depending on what your balance is, right. And now, if you have a lower balance, you're trying to take the same amount of money you were taking out last year. Number one, you're locking in your losses. The money's not there anymore to grow back. And number two, your training your portfolio down for you may not be ableto may not be able to make it may pass waiting And so, but we have strategies that never fear, I think is here way that she's underdog strategies to make sure you have lifetime income, and that is our green bucket green bucket has a lifetime income built in there, so you know with certainty what your minimum income will be all the way through retirement. And I did say minimum because I'm not a negative guy. But I'd like to show people the worst case scenario, because what usually happens is Murphy's law. If you're if you're planning for the best case scenario, is not gonna happen if we show you the worst case scenario. This is a reversing the turning of tables on Murphy's law because it's probably gonna be better than that stock committee worse, and it be lifetime. You're never gonna outlive your money, and then people say, Well, I've got an IRA, which stands for Individual Retirement Account. How can I ensure that my spouse also gets lifetime income? We have special tools that are only available toe two special people like us, and people like watching where we can have you. Both spouses, husband and wife get a lifetime income on an individual retirement account. So if you have your own IRA and you pass away, usually with most accounts, that money passed away with you. You can't keep getting in right now. Yeah, but now we have a pension that we can pension eyes, right, your accounts and folks, that is companies just to give you pension. Then they would make any for husband and wife. We could do that, too. I get excited about it and you see how excited I stumbled through my words. But the most important thing, folks, is that we look at what you have. We dedicate a certain portion of that toe lifetime income, and then, believe it or not, you could take even more risks than you ever dreamed with with the other money over there, because you already got your lifetime income jumping on the table. It is so valuable and so many people don't realize it. They it is valuable. And the beautiful thing is with with one pager that way, always like up is you can bring us all your stuff. Is I with all your investments, all your taxes, Even if you haven't open about the way people are now over together, I said, Well, if I don't look at it will go back up. And by the way, not looking at not paying attention to it is not the right thing to do. You have a dog in the dashing. We had three of them, and every now and then they make a steak inside. And when when I was having a nice conversation with the dog, how they shouldn't do that? I didn't look at me. So they figured they weren't in trouble. Right then all suddenly felt a little pain where the tail is. So but not looking at your statements are not gonna make him any better matter. Facts gonna get worse. So that is what's the best time to get a good plan or plan you can believe in. Now You know what yesterday was The next best time. Best time country. Because people say It's too late for me. It's never too late, folks. It's never too early, really again. The and you talked about multiple baskets. But I'm telling you, the beautiful thing that you guys have created and that we also utilized is that one page review. Simple. Yeah. I mean, you get complex backed up by hundreds of pages, but we show it on one day, so easy to see innocent colors and got 33 buckets. Here's what you do with that bucket on the other bucket. Here's the main thing that a lot of people don't realize. They don't know where they are right now. So the very first thing we do for you is we educate you on where everything is. Right now. We categorize it for you, and sometimes people come in and they're perfect. But now they have peace of mind, knowing that they've got a second opinion by a fiduciary team to tell you everything's fine. Exactly many times people come in it and they're not perfect, but family showing that would give the steps to get. But I had a safety because I have bonds on. You know, the people learn the hard way heavy on. Well, you don't have an income plant built in tow so you can build an income you can never go away. We need We need money that's gonna grow when we don't need it. We need to protected from the market forces and then from a financial termites. And then we need lifetime income when we when we desire to start getting it, was a three main ingredients of a really good retirement plan. And does the three agreed? It's a logical don't have. That's why we say shield protecting growth shield, protecting grow, folks. That's fake shield. So all right, what should people do? We've got a couple minutes here left on the show. What should people do out there if they're confused about the financial world, I guarantee you there's a lot of people watching saying these guys are using big words and now we're trying not to risk fee safety. Pretty pretty. Pretty vaccinate their three pronged approach to a really good plan. Control the risk, control the fee and make sure you have safety simple and so so sample that a lot of people who don't do it well again it goes back to They've been burned. Yeah, and they hurt. And they haven't used a fiduciary. They've been sold product. They think everyone's out to sell him something again. Fiduciary takes plane fiduciary again. I know we have started the show with that, But explain to people because they hear this word, it's with a big word people using A lot of times I've seen advisors use it who want really with tears. You can check. They make sure they get in writing. Are you a fiduciary? Yes. They say put it in writing for me. If they won't walk. Walk? Okay, yeah, because it's not the right thing for you and really. I mean, you have to look at you have to trust your instincts a lot of times, but there are a lot of great sales people out there who shouldn't be selling anything right now. I could sell really good. So ties you into buying a lot of times in things you don't need. So how much is it? Did not be hypnotized. It is very important. Well, here's the thing. The unfortunate thing is, uh, we're always walking around being hypnotized by something. Commercials just say I mean it happens. And like even even your Children, they want the newest jeans they want. The newest on the phone comes out everywhere. They want the new ones. They say they need it between wants and needs. There's a difference between having your plan and their plan, and you need to have your plan customized. Absolutely. So how important is that? We have a minute left here on the show, and I want to get to make sure people understand that, really, there are customized plans out there. How before does it have a customized plan? Visualize. Customized design for for you before you. It's extremely important your you and there's no other you. So you should Onley that, um, land may have a plan for you, and it's It can be difficult. It could be scary, but shouldn't be. And that's why being sure you sit down with somebody that you can earn their respect and their trust along the way of is important. But skipping it like we've been talking about not going to the doctor skipping it, not doing something now is not good. So take a chance to control the risk, controls the fees and make sure you have safety. Had those three main