Three Tax Tips to Fund Your Future

ABOUT THIS EPISODE

Here are some forward thinking ideas that could save you money. The HSA (Health Saving Account) is one of the best ways to save for retirement. You can also start a Roth IRA for your children. Finally, you should consider a Roth Conversion for you. Connect with John by texting "LIFE" to 21000 or GuardianRockWealth.com.

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 bestselling 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 milled 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. Willow. John Browning, how are you this fine day? I have fantastic. It is a not so great day outside, but I've been having a really good day. How about yourself? I'm doing great. It's beautiful where I am. I got to take a walk today. Blue Skies and Sunshine and Oh wapping, maybe fifty degrees, but hey, that's what I expect in January when we're recording this, so I would see. I've been talking with a lot of folks up in Chicago over the past two days and they are cold. Yes, it is. It is brutal up there right now and we got some sto eyes and now I have I still my my house up there. I still get up there quite often, but I'm pretty happy. Right now, I'm down in Florida. Oh, that's awesome that, but that's you're probably don't have any snow down there and you're probably enjoying much warmer weather than Chicago. But Hey, that's okay. They'll choose to live were live, so it's okay, that's right. That's right. Yes, you go hot here. You can fry an egg on the sidewalk in the summer. So very well. Yeah, yeah, then then you're Chicago foot buddies are going to be laughing at you. Exactly. Yeah, so, well, good. Let's let's talk about some fun things. Let's talk about some future oriented thinking, I guess, is the way I want to put this. And you got ...

...some topics that we want to talk about, with health savings accounts and with some rough Irais some things. So let's talk about future mindsets. And what do you have to share with us today? You know, I've got I have three ideas for people, because we're starting already. It's already time. We're starting to think about taxes again. Yeah, and I tend to tell people you need to think about taxes all year long, and most people just don't. Yeah, you know they were. I still had people calling me on December twenty eight trying to get something in for a tax time. But I'm always talking to folks, like I've talked of people in January about their plan for this year, not last year. Yeah, but you know, it's just human nature that we did put some things off and all that. But I've got a couple ideas that maybe some people haven't thought about that they could potentially put into place still even for last year, because they still have a couple months that they can do things retroactively in some instances. Okay, all right, let's let's have that, because we're recording this in early January. It's right. And so you say that we've got a couple months to do some things possibly. So obviously we're not giving any counsel or advice or anything, but these are just ideas and concepts that John and Guardian Rockwell can help you us. So all right, let's lay it on us. What do you have? All right, well, the one thing that most people don't think about is have you heard of health savings accounts? Have you ever heard of that? I've heard of it. I really don't know that I know what it is or could explain it, but you probably could. Well, this is this is not for everyone and it doesn't mean healthcare. Flexible spending accounts. Okay, so there's a difference. Okay, here flexible spending accounts, you have to spend that money. You can. You can contribute to it if you're if your employer has a set up, you can contribute to that during the year and then in that's before taxes, and then you...

...can take it out to pay for health related expenses. Okay, hell savings account much better and probably the single best way to save for retirement. That's a big statement really, because what they do with a hell savings count, if your employer offers it, is you put money in brute before taxes. You do not get taxed on that if you don't spend it. Most people just go out and spend it on healthcare right now. But let's see you don't. Let's say you hold that until you retire and you invest it. You can normally invest your the funds that are in that hell savings account. It also comes out, as long as you use it for some sort of medical expense, comes out tax free. So it's got it's got everything that the Roth IRA will talk about. That hat, that a meaning everything that the wrath has and more, because you you also you're not just contributing before do. You never pay tax on this and it can grow. So it's a fantastic way to save for retirement. If your employer offers it. That's the big caveat some many do not offer that. So you know, maybe to not spend it on healthcare right now and just save it, and it's a great way to frankly avoid legally avoid taxes. All right, so this isn't Hsay a health savings account, that's right, which is different from what did you say earlier? Flexible spending health. Okay, so those are really similar sounding to somebody like me. They are. They that's why we need somebody like you and ask your HR department. You know which one you have of okay, and if it work that way. But it could be a really great way to say freetirement in the first thing that most people say to me is, but but that's not a real I'm not really free to spend that right, because I have to spend it on healthcare. Well, here's...

...the thing about money. It's what I call fungible. So what I'm not spending out on my current income on healthcare, because I have this HSA that I'm using. I can spend it on going to the movies, going to Italy, whatever is that you like to do. So it's really not all that restrictive, unless you think you're just not going to ever go to the doctor not have any kind of healthcare expense as you retire, and for most of us the opposite begins to be true as we age and right we're out. So all right, so healthcare expense is my mother in law's got back paint. She just went to the to a doctor recently. That it. You can be used for that, I sir. She's got medication. It could be used for that, nursing home, whatever. I mean. Yeah, going to the doctor now, yeah, you're okay. Well, all sorts of things that it can be used for there. The list is long. Yeah, yeah, and I like the way you just kind of Fun Fund inated that to say, if you're put if you have money over here. You could. You've got other moneys you can go on vacation or do other things with, because you're not using those other moneys to fund your medical because you've already got money saved in that. That is really, really crazy. Health savings account is one of the best ways to save for retirement, according to John Browning. Or can be can be here, and it all depends on whether your employeer off site that way or not. Okay, all right, well that that's amazing. We may have come back into a whole episode on that. That really is mind blow I've not heard of it explained that way. I guess I heard HSA and I I thought that other thing, the flexible spending thing, I thought, yeah, that was the same thing. So so if somebody has a question, two things. ASK THEIR HR department. That's number one. Yeah, we have that. Do you have? And some nature departments are not even aware of how it really works. So find out whether it's a health savings account or a flexible spending healthcare...

...account. Okay. And then, and then they called. Reach out to John. He's got he's got some fun fungible money for you. Yeah, it's something you know. That's not something that any anybody's going to pay me for, but at least I can explain it to you so that you can you can know and hopefully the better off and retire. That's awesome. Okay, so health savings account is one. You got two other ways that we can tax tips that we can fund the future. So one of my favorite things is one of my clients, actually two of them now, I have done this with their with their kids, young adults, young adults. So they're they're teenagers, are working there, earning some money and, frankly, though, you know, I hey, when your teenager, you're probably not going to put it all on a Roth IRA, right. That's probably not going to happen. But guess what? you qualify to put it into a Roth IRA. And, just as a reminder, a Roth IRA is different from a regular IRA and that you put money in after taxes. Okay, so you already paid taxes on that and then everything that grows on top of that from now until the time you retire, you get to take out backs free and there's a lot of other perks on there to you can take it out for different things like higher education and first time home purchase, things like that. So it's a lot more flexible than the regular IRA. So what they've done is with their teenagers, even though they're teenagers, you know what they need. Want to buy the XBOX, right. They worked hard for the money and they should enjoy just like I say with adults, it's just no fun living if you don't spend some, some of that money that you have earning. Don't say everything it is steals your joy. So that's right. But what's a great gift for your teenager, if they're working have earned income, is to set up their set up a Rath for that teenager can be up to everything that they've earned during that year. Okay, and you...

...can still do that for two thousand and twenty one and, even though it's early, two thousand and twenty two right now. So that's so all right. Say That again. So a child, let's say I've had a fifteenyear old on mooing business right, fifteen year kid, lawn mowing business. They're making money. We could I could help them set up a Roth IRA and they could put some money in that Roth IRA. A that's after taxes. They put it in and now is going to grow tax free for the rest of the options off. They're fifteen. I not going to retire until they're probably fifty, sixty years down the road. Yeah, and that's all tax free growth. Well, TEX pregrowth. No one caveat because I like what you said there. When I was mowing lawns, and I did for many years, made a lot of money doing that, I wasn't actually paying myself as a business and all that. That would not count as earned income. So that's a very good point that you bring up. It has to be in the form of a paycheck that the government knows about and they can they can see. Okay, so they work at McDonald's, if they work at you know wherever. All the kids I know work at Chick Fil a, in chick fil a right, good be yeah, okay, all right, well, that's really get setting up a Rath IRA for your kids. Well, what better way to help them plan for life? Wow, I'd never really thought about that. So that's great. I'm glad I listen to this podcast. One more you get to that. Are you have three? That's too so we've got es a and HSA, a healthy savor account, if it's available to your employee employer, and a side up a Roth IRA for your children. Basically, yeah, okay, now here's the number three, and will hit this real quick, because it doesn't that it's some advisors will say it's always a good idea to do a Roth conversion. What that means you take your regular IRA, or maybe it's a rollover from your fore K or threep or something like that, and you convert that into a roth. Now what happens is a government says that's okay to do, but this may...

...be going away. The the Biden Administration is trying to push through something that would possibly make this, the ability to do this, go away. But right now you can convert that as long as you pay the taxes that you owe right now. Now, this can be a great, great, great idea, but not always so. Definitely, console you know, because there are things called Phantom taxes, and I we don't have time to get into that. Plus, I'm not a CPM, not a tax advisor. Talk to your CPA and talk to your financial advisor, and I say talked all both of them in this case, because there are things on either side of that coin that can make a really big difference as to whether or not you should but it can be really powerful if you do the math and you find out you start to realize how much more your account could grow, depending on your age, between now and retirement, and that would actually be quite a bit less often in terms of taxes that you would end up hang. So it can be a great idea. We did a few and you don't have to roll the entire IRA. Can Roll a small portion. We just did that with a client right for the end of the year and we rolled over about to you know, just a small about tenzero dollars of his account that he could afford catflow wise, to pay the taxes on. And now that's in a rath and he's got about probably twenty five years left to grow that. That's amazing. Couple things there that you talked about is pulling together your CEPA and your financial advisor. In today's world that's a lot easier to do because we could probably all zoom and do it right. We were and we quarterback that and yeah, often times we'll have will do a zoom call, especially with new clients when her first send them up, and we'll have the trust legal folks here and then down here in the corner we might have the...

CEPA, the tax guy and we talked to them all before. We've gotten permission to share information between all of us. And then we have the client and we might even have an insurance guy on that zoom call as well and really talk through what's the total comprehensive financial yep, and that's well. That was my second point. Is Rings down to somebody like you, because I know it garden rock. Well, that's what you do if you have the team that you can bring to the table and and look at it holistically, because everybody's situation is different, and that's why people need to talk with John Brownie. He's a financial expertise and Amazon number one best selling author. He's just an all around good guy. But obviously, just by listening to this episode about health savings accounts and starting a roth for your children to let that money grow tax free for years, that what I mean. What impact that would have for their life, instead of waiting until they're twenty five or thirty to say, okay, son, you need to start saving for retirement exact but I've got a wife and a kid in a mortgage and a car payment and an Anna start now. That's amazing and then talking to John about the possibility of doing a roth conversion if it makes sense for you. So, John Man, thanks it's been a great episode. Three tax tips to fund your future and three different ways. I love it. That's that's why this podcast is so much fun. So let me encourage people to reach out to your Guardian, rockwealthcom, requested copy of John's book, schedule a call with him, or you can text the Word Life, Alife to twenty one tho and you'll get a response pack actually, and it's got links to his book, links to schedule, things of video about John, just all kinds of fun ways to connect with John there. So Text Alife, life to twenty one tho or reach out to John Browning at Guardian rockwealthcom. John, thanks for a great episode on three tax tips to fund your future. Will see in next week. Look forward to buddy. 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 Emeill you a free copy of his book build a life, not a portfolio. Go to John's website, Guardian Rock wealthcom, 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 so each new episode will be sent to you automagically when it's released. Have a terrific day. Nothing in this podcast should be construed as personal investment advice and past performance is no guarantee of future results. Investing is not appropriate for everyone. There is a risk of loss associated with investing in the markets. No representation or implication is being made that using any methodology or system will generate profits or insure freedom from losses. Please remember that investing carries risk. Guardian Rock Wealth LLC and it's affiliates are fiduciary investment advisors. Please consult with US or another experienced, qualified investment advisor before making any investment decisions and or trying to implement any of the strategies and tactics we may discuss in any of our publications or podcasts.

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