Tax Tips for Retirees

ABOUT THIS EPISODE

Whether you are entering or already in retirement, taxes don't go away. You still have to pay taxes on your retirement income. What is the best way to plan for these taxes? How can you plan today to pay less tax in the future? These questions and many more are answered by financial expert, John Browning.  

Welcome to the build your life podcast with John Browning. Build your life as a relaxed and unedited conversation with financial expert in number one Amazon best selling author, John Browning Jones the founder of Guardian Rock Wealth and serves clients across the United States. John's the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy mailed right to your door. I'm Michael The lawn, your host for the next few minutes as we chat with financial expert and business owner John Browning. Where I love John. Hope Your Day is going well today, sir. It is going fantastic. I'M gonna glad. I'm glad here. That's a good word, fantastic, and you're going to have some fantastic advice for some people today, because we're...

...talking about tax tips for retirees and that's a there. There's a can of worms there, I think. So let's talk about that. Is Is this. Are you talking about people who are planning for retirement or people who are in retirement? Or both. I think there's there's a little bit of both here and it's important in both stages that you're in. Okay, what so what are some tips as ours? Let's just slice it as I'm planning for retirement. What are some tax tips? And then let's talk about when I'm in retirement. What are some tax tips? Can we do it that simply? Yeah, I think it kind of mingles in, but yeah, there's there's kind of there's a delineation there as well. Okay, I think that people tend to forget that when they retire, in many cases, not all, but in many cases, they still have to pay taxes on that retirement income. So they paid into the one K or that IRA or whatever it...

...is for d whatever count is. They paid into that for years and now it's time to enjoy the rewards of all that savings and retire and do what you love to do and less, of course, you're working every day and what you look to do, in which case you never worked a day in your wife but maybe you're just transitioning into doing a little bit less of that. But those funds are taxable and so you may have a million dollars saved up and you want to withdraw x number dollars per month. Well, you have to withdraw that x number of dollars per month and in addition to that, whatever the taxes are on that. And it's much like when my kids first started working. They said, oh great, I'm going to make, you know, fifteen bucks a now or ten bucks an hour, and they get their first paycheck and it's just like well, what somebody's felling from me?...

You know, I got call it. Realize that they had to pay taxes on that. Same thing happens when you retire. A lot of people realize they have to pay taxes on the proceeds of a lot of that. And you know, once you're in retirement, to the lineate that you know at you you can say you're say you did really well and you didn't want to withdraw anything from your retirement accounts, and you didn't do that. Well, at age seventy two, the government says you can't do that anymore. You have to take what's called a rd or required a minimum distribution, and from that I have to pay some taxes. Yeah, so what do you do? And one of the ways we talked about this in a a a earlier episode, is that if you set things up in a Roth IRA or maybe you have a traditional IRA. Maybe you're a little bit older and before the Rath IRA was invented you had a traditional IRA or a one k.

There is a method where you can convert, and typically you want to do this on this little slowly all your time. You can convert those assets into rath assets, but that means you get the can't just not pay taxes as you would thraw it from that traditional IRA and put it into the Roth IRA. You have to pay that tax. Yeah, at whatever act bracket is. Then now, as you get older, a lot times you can work it's so that you can control your income year to year just a little bit, and we have some tips and tricks for for doing that. And sometimes it requires that you have a pretty good relationship with your employer, or maybe your employers. You you can get to the point where you qualify for that Roth and in that year you can then convert things over to the Roth, start a rath or whatever you w want to do. That's one tip.

...is to be aware of the different types of accounts and how you can use them in what the timing is on that but another really interesting one that requires a little bit more effort, but it certainly doesn't require the effort that a lot of people fear. We've talked about how we make our fears bigger than they really actually are. And so a little like and you could start up, say, a charitable remainder trust, and then you and say, your spouse or whoever else you wanted to be on the board for that charitable remainder trust. Now it does. It does need to fund to charity. Right, you have to have have to have that. But that's yet another tip, especially for wealthier investors, how they might want to control or minimize their their attacks spending. Okay, with the tidy of withdrawing and which accounts you...

...draw from when makes a big difference when you're in retirement. So if you have a roth account, regular account, which one do you draw from and how much from each one do you draw from what time? And usually that discussion should it should really start in January, but typically what happens is they wait until December and they have that cushion and and then it can be difficult to get done all at once and in one month period. So have that discussion earlier. In the year and kind of plan that out. It's all just just like we talked about developing a road map to build your life, not just your portfolio. There's also the road meant just changes a bit, as do you are actually in retirement, right. So how, when? From where do you draw down those things for your for your life that you've built for yourself? Yeah, and that and that's good and it just opened...

...up, you know, the the realization once again why people need to work with somebody like you, because you just you talk about this like it's just super simple, and it is for you because you do it all day, every day. I'm saying they're going to Oh my goodness, there are a lot of roads, there are a lot of dead ends, are a lot of speed bumps, a few potholes and a whole maybe some accidents that are going to happen if I'm trying to run this right. The thing is, John and John is like a construction care he paves those roads for you, he plans them out, he plots them out, he's got the blueprint and he has that high level perspective to go. Well, here's, here's where we need to be thinking about and even I love the starting in January. You, when you work with clients, I'm sure you say, Hey, it's time to talk about this, let's have that discussion, let's schedule time to talk about this, and it's like, why do I need to talk about that? It's only March. Well, because the decision to make today can effect. You're in right in all that other that's the beauty of having somebody like you on the team, John Is. You have all those questions...

...in really, I mean I'm making the decisions, but your guiding the conversations many times and the direction, because I'm the other that's what I could do. It's just I give you options. I give everybody options. Yeah, I often say when I'm working with same an attorney or or tax professional, I don't really like working with legal guy or a tax guy that just says no, he can't do that. Right, this is what I can do. I like working with them. I tell him what I want to do and if it just just completely off the wall, which sometimes it is, they say well, here's three options right now. One of them may be very obvious right now what we should do, but they let me make that decision and and that's the way I like to work with with our clients, is that way, because there's, I mean both. You know that just scratch the service right. I mean there's when do you take those security what...

...do you do with this whole thing called Medicare? We had a it's been a while ago, but we had Brian Macarthur on as a guest speaker on the podcast and that's kind of what he does. That's that's like ninety percent of what he does is help people walk through the process of Medicare, because that is so complicated. It's frankly beyond my scope of expertise. So I help people by quarterbacking that relationship with Brian and he helps them. So you know, there's part be there's the medication, there's supplements, there's all sorts of things that go into that and if you make a wrong decision as you start, it can affect later years and your Medicaid Fun journey that you have. So there's all sorts of steps. The number one tip is is wing at work with somebody who not just knows what is available and what the options...

...are, but also work with somebody who can admit when they don't know things like like Medicare and but has a great contact and a trusted contact that you can quarterback and put them in touch with that will do a great job for them on that portion of their life. That's that's a huge tip right there done, because if you meet anybody who says I can do it all, probably run yes when you when you meet somebody like John, he says this is my specialty, but I have a team of people around me and I know other people who can, who can pour into specifics. That's great because John Becomes the quarterback per se of the team and you're bringing all the players to the table to say here's what we need to do, and that's huge. That's time saving, that's peace of mind, that's comfort, that's way cool. So that is probably the biggest tip for retireas is to work with John Browning at Guardian rock wealth and let him quarterback everything that you're doing so...

...that you're making the ultimate decision, but he's bringing things to the table and helping you get to where you want to go by helping you build that life, not just a portfolio. And and understand how I don't understand enters and taxes, because that's a bit that they just don't go away until you're in the coffin and you need even there. Even there there's a state taxes. If you didn't didn't plan, well, there you go. So tax. Wow, there you go. There's all holes off Akl yes, but that, yeah, we need. We need to do another episode of around the state taxes and we're going to do when it coming up, around around setting up a trust and things, and maybe we can get into that, because it's just all important and we need to be planning for it and educating our families about it, because it is a big deal and and a lot of surprises have up and when people don't plan properly. And if you reach out to John and Guardian Rock Wellscom he can help you begin that entire process of planning properly so that you'll build a life that you're enjoying today, build a...

...portfolio. They'll sustaining you for life and you'll mitigate taxes and take care of them properly and pass some money onto your airs or gifts or whatever you want to do, because it's your life right right. John Browning, another terrific episode. Thank you so much. I look forward to talking with you again soon. Ye, all right, we'll see you next time. Money really is a big part of our lives, and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that can help you build the life that you want. If you like, John Emilie a free copy of his book build a life, not a portfolio. Go to John's website, Guardian rockwealthcom, and click the contact to US link and send your request. John Will Mell a copy of his book right to your door absolutely free. Thanks for listening to building your life podcast with John Browning. Be Sure to subscribe to this podcast...

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