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Transcript

Mike:

When’s the last time your financial advisor asked for your tax return, Zach. When’s the last time they went over your tax return with you? The answer should be well, gosh, Mike, they do that with me every single year. Right? That’s what they sh that’s what the answer should be, right? I mean, it’s their job. Not just to help you figure out how to make money with your investments, but it’s also their job to help you figure out, well, how do we make sure you keep what you may, it’s not how much you make. It’s how much

Zach:

Welcome back to your retirement today. I’m your cohost, Zach Holcomb. And alongside me, we have certified financial planner and founder and president of Centennial advisors. Mr. Michael Reese, Mike today’s show. We’re talking about the questions you absolutely have to answer when it comes to your retirement planning.

Mike:

Yeah, that’s right. There’s really four questions that you want to have answered. And these are simple questions, right? They’re yes, no questions. Right. In the last segment we were talking about Bobby Bonilla, right? How he guaranteed his income and his retirement. And really the question that we asked is, do you have a plan in place to replace your paycheck when you retire? It’s that simple? And a plan is not a spreadsheet there. That’s hope. Do you have a plan? That’s going to work in both good markets and bad. And we did talk a little bit about if you say no to that question, plus the next three questions we’re going to ask is the show goes on tonight. If you say, oh boy, I don’t, I don’t know if I can answer that one. Yes. Even if you’re unsure, we have a class, we have a coming up it’s called retiring while university.

Mike:

Now this is one of these online classes and here’s, what’s cool. It’s on zoom and it’s live. So it’s going to be me with you live for two hours, like six, what was it? Six or 6 30, 6. 30 to eight 30. So it’s six 30 to eight 30. By the way, heads up. It usually goes a little bit longer. Cause people ask questions, right? Sure. So those from six 30, call it eight 30, maybe a little bit longer on Tuesday nights, starting July 20th. And then the following Tuesday we’ll be parked to July 27th. So it’s part one, part two. We’re going to cover these questions and more, and it’s going to be great. Cause it’s going to be just me talking live with you. We’ll be hanging out in a zoom room room together. We’ll be live, I’ll cover a section and then I’ll open it up for Q and a I’ll cover another section.

Mike:

I’ll open it up for Q and a. And we’ve done this in the past has been super popular with people. So it’s really comfortable. You sit in your home, you just do it. It’s great. You watch me, you know, kind of make fun of myself and we have a great time. But you learn a lot too. And it’s really, really valuable time. It’s time well spent. So if you want to sign up for that, we’re doing this absolutely free. You just go to retiring. Well, university.com is that right? Tack you got it. Okay. Retiring while university.com. All right. We want to dive into question number two. So what’s the second that you have to answer that you want to be able to say yes to, in order to have that complete financial security in retirement, Mike,

Zach:

I’m sure you know the answer to this one. Cause this is on your favorite topic. Oh, do you know why families end up in higher tax brackets in retirement or why they can,

Mike:

Why can someone end up in a higher tax bracket in retirement? Correct. Okay. So the question you want to ask yourself, do you know why you might end up in a higher tax bracket in retirement? And by the way, this question, we would even assume the tax rates don’t go up, right? Because if tax rates go up, then we all, oh boy. And by the way, you’re right. You know what I’m thinking about this? My, my pulse is starting to race. My face is probably getting a little red. For those of you watching the podcasts. You’re like, oh my God, there he goes again,

Zach:

Starting to sweat. You’re wearing the black shirt.

Mike:

Can’t see though, because I’m wearing the black shirt so I can look a little skinnier on the podcast. This is actually another question that’s related to this that you might ask yourself. Do you know what your year by year, future tax tax liability is likely going to look like that would be another way to ask the similar question, right? Because here’s what I’ve learned over the years. I’ve been doing this for like 25 years. And whenever I give a presentation, like whether it’s at a library or, you know, maybe a, a restaurant, a hotel, wherever it is a live event, I like to ask the audience. I say, you know, when’s the last time your financial advisor or even your tax advisor showed you kind of a projection where it showed you year by year. Here’s what your tax liability is going to look like in the future.

Mike:

If you just keep doing what you’re doing now, right? And then you add it up. And like I did this the other day. I said, Hey, let’s add up all these taxes. You’re going to pay in retirement. It was $1.5 million. It’s a big number. I mean, so you add it up and say, look, you live 30 years in retirement. You’re projected to pay the IRS, like $1.5 million and PS that does not include the money that your kids would have to pay in tax when they inherit your IRA. Right? So 1.5 million over 30 years, that’s a big number. When do you think most of those taxes were due later? Yeah, it was later in life when they were in their eighties. Y R Y RMDs, you know, I’ve heard Forbes. I think I read an article from Forbes one day. It said it called RMDs. The weapons of mass financial destruction.

Mike:

That’s a mouthful, right? Basically they’re saying RMDs. And by the way, if you have IRAs 4 0 3 B, when you get later in life, those RMDs get to be huge, huge. And here you are, you get these forced distributions. You’re paying a boatload attacks. And not only are you paying the tax on the distribution that you’re forced to take, even though you don’t want to, you’re paying more tax on your social security, you’re paying more tax on capital gains. You’re paying more tax on everything else. And that assumes they don’t increase taxes. They increased taxes down the road. Eight just it’s like, let’s take a huge problem and just exploded and make it worse. Right? It is unbelievable. The amount of tax you’re likely going to pay. When you get later in retirement. Now the same family, by the way, with some simple strategies, I was able to show them, Hey, look at this, you do this, this and this.

Mike:

Instead of paying 1.5 million of tax, you know, we can reduce that to below a million dollars. Well guess what? A million dollars of tax and retirement still. And I hope I don’t get bleeped here, but the word I would think of it, it still stinks. I was going to use a different word. I know I would get bleeped out. So let’s go with, it’s still not a happy thought. It still is horrible. The problem that this couple had is, you know, they just had, they’ve done a great job saving for retirement. So that’s kind of where they were at. Right. But you know, let’s look at it from the other perspective. I sure as heck would rather give the IRS a million dollars than a million and a half. Right. Here’s my question. My question is this, do you know what your future tax projections look like?

Mike:

Do you know? Yes or no? Really simple. Do you know the tax road you’re on? Do you know where you’re heading? I know. Darn. Well, what the answer is by the way most people are like, huh? Yeah. Yeah. It’s like, because it’s like your financial advisor. When’s the last time your financial advisor asked for your tax return. Heck when’s the last time they went over your tax return with you? The answer should be, well, gosh, Mike, they do that with me every single year. Right? That’s what they should. That’s what the answer should be. I mean, it’s their job. Not just to help you figure out how to make money with your investments, but it’s also their job to help you figure out, well, how do we make sure you keep what you made? It’s not how much you make. It’s how much you keep.

Mike:

Once the last time your financial advisor went over your tax return with you, where they reviewed, here’s where you’re at. And here’s what we can do this year to help you. You know, let’s, here’s, here’s how much in Roth conversion we should do this year. Or, you know, here’s a, here’s a, a tax strategy we should use this year. Are they doing that every single year? Are they showing you look, here’s the road you’re on. This is why we take these strategies or why we utilize these strategies. So we can make the road you’re on better. Is that a conversation you’re having on an annual basis? If not, you got a problem. Yep. You got a big problem. I don’t care. You might be 45 years old listening to the show. You still have that problem because guess what? What’s really cool is the younger, you are the smaller, the steps you need to take in order to create huge benefits later in life.

Mike:

So you don’t want to even ignore this when you’re younger. This is an annual thing. So as you’re listening, what’s your tax road look like, right? Do you now, if the answer is no, then I’m telling you, this is luck. You need to sign up for retiring while university. And so I want to take a minute and talk about this a little bit, because I want it to be clear to you exactly what this is, right? So what you, here’s, what you do. You go to retiring well, university.com on the website. You can register. It’s super easy, right? Zack it’s like, what is it? Name and email or something. Basic contact information, simple stuff. Mean email. You immediately get a confirmation. And in the confirmation, I’m assuming you’d have the zoom link, correct? For, and it’s it’s Tuesday night, July 20th, correct. That’s part one. And then part two is Tuesday, July 27.

Mike:

Correct? You got it. That’s really good for helping me with my calendar math there. Exact. So the 20th and the 27th in July. And it’s from six 30 at night to eight 30. Yes. May go a little bit longer than that. Sometimes it goes longer because in this, in retiring while university, here’s what I do. So this is something that normally what I’ve done historically, I’ll do this in a college. Like, I’ll go to maybe what is it, a Concordia? Or I might go to gr you know, Southwestern university, but I would go to a college and actual college and I deliver a class live well in 2020, you know, we couldn’t do that anymore. And we learned that actually it’s a lot easier, more convenient to do these classes online. Right? Like do them live on zoom. And so we started doing that.

Mike:

It’s been super popular. So what we do is we do these classes on zoom. There might be a hundred people in the room. Yeah. It might be 50. There might be 200. Who knows? But anyway, there’s usually a lot of people. And what I do is I teach, you know, part of the topic in the class. And then I open it up for questions to answer. So as your sitting there, you’re watching me teach a section that might be like 30 minutes. And then I say, all right, let’s open this baby up. Let’s do Q and a. And Zach, I know you helped me organize all this. Right. And then you just type in your question and then I just start answering. And I want to answer about every question I can. Now the purpose is, I want you walking away from this saying, you know what? I now know the answer to these questions. I know how I’m going to replace my income. I know what I’m going to do about my tax situation and others. And we’re going to talk about tonight. Yup. But it’s important that you know, those answers so against retiring well, university.com. You don’t want to miss out. Hey, I see we’re run up against the, so just go there now. Retiring well, university.com register, stick around. We’ll be right back.

Zach:

Hi. And thanks for checking out retirement today. If you like the content we share on our channel, make sure to like comment and subscribe. So you can say notified about all of our latest content and videos. Be sure to share all of our information with your friends and family as well. Thanks for joining us. We’ll see you next time.