B_S1E7_SEGMENT 1_RRT

Speaker 1 (00:08):

Hi, and welcome to this week's retirement round table and folks, we got a topic today and that's taxes. Mm listen. Most people think when they have their tax prepared by their tax prepared that I've done everything that I can do to mitigate taxes Tyson. Is that correct?

Speaker 2 (00:25):

It's not correct. In in fact, you have to look at it from a financial advisor perspective versus a CPA perspective. A lot of times a CPA is gonna focus on what can we save short term in the year that you're trying to save on taxes. We as financial advisors are looking for the long term and making sure that there's a plan in place to ensure not only now, but into the future taxes are minimized. And so there's a different focus in the retirement world that we have to make sure as a fiduciary that we're doing for each of our clients. So

Speaker 1 (00:55):

Here's

Speaker 2 (00:56):

What we

Speaker 1 (00:56):

Do.

Speaker 2 (00:56):

Yeah. Right? The myth is that we were gonna be in a lower tax bracket in retirement. Mm. Taking the tax deduction out of the payroll before it went. And that was a principle that was taught a lot, let it grow tax-deferred and all of a sudden we get to retirement and this is where the tax problem begins because those qualified accounts, the 401ks, the IRAs we call 'em the alphabet suit. That's right. Those are the ones that have the biggest shock value at retirement. And the reason why is because if you're taking a withdrawal out of a 401k and IRA, 100% of that money is taxable mm-hmm <affirmative>. And if you look at there's three buckets, when it comes to retirement, there's the taxable bucket. That's the bucket that you're going to get bank 10 99 at the end of the year, a brokerage account. Then there's a tax deferred bucket.

Speaker 2 (01:43):

That's the IRAs, the 401ks, the TSPs, the 4 57. And then there's the tax free bucket. And the goal in retirement is to get into a 0% tax bracket. And the way that you do that is you need to have the buckets properly positioned for taxes. Now for everyone, mark, that's not gonna be possible. Um, it's just, you've been putting into that bucket for so long. It may takes a lot of work to undo that, but you need to have a strategy work with a tax advisor and work with someone who can help you understand what your individual tax situation.

Speaker 1 (02:16):

So, so lemme make sure I've got you clear here, the way that I take my income from my money. If I restructure that a little bit, I could in fact, possibly bring my taxes down. Is that correct? There

Speaker 2 (02:29):

Are ways to make that happen. And the earlier somebody comes in and talks to us. A lot of times people will come in, uh, right before they retire, or maybe they're, they've been retired a year and try to do some of this planning. I, if you come in earlier, there's a lot more that we can do, whether it's a vehicle like a Roth or, or some other pieces that we could put in place to transfer. Uh, some of that from a tax strategy perspective, it can really make a difference over the long term. Well, and we have em, vehicles called the rich man's Roth. That's not a Roth IRA, but it's an alternative vehicle that allows you to minimize the tax and even eliminate the tax if it's, uh, structured

Speaker 1 (03:06):

Properly. And, you know, I think a lot of people are gonna ask is, is that in the tax code? Am I doing something fishy here? Is that all good? Cause I know people are very fearful of that. Yeah. They don't want uncle Sam knocking on their door saying, where's the rest of this.

Speaker 2 (03:18):

Yeah. We're never gonna do something that is illegal or something that's shady. Uh, for most people, as we walk through it, it makes a lot of sense. And we're gonna talk through the pros and cons of each strategy before anything happens.

Speaker 1 (03:30):

And there are other vehicles today. And I don't know if we have the time to get into great deal, but maybe we can, as fiduciary, you can touch on that. That really start to have a, a very proactive effect in bringing that tax down.

Speaker 2 (03:43):

That's exactly right. And the goal again is getting the 0% tax bracket if possible. And if you have a plan and a structure that is laid out and go through customized to your individual situation, that's oftentimes very possible to make that happen.

Speaker 1 (03:59):

So just because my CPA's told me we've done everything we can do there may in fact be a couple of things that we need to look into. Exactly. Right. Tyson, Ryan, thanks so much. Hey, don't go anywhere. We'll be right back. You're watching retirement solutions, television Utah's retirement TV.