GMB #133: Retirement Income Planning in 2022

Managing income after retirement is one of the most important things a retiree needs to plan to make the best of their savings, and with the rising interest rates and stock market volatility, there are many factors that need to be considered. This week on Grow Money Business, Grant dives into several key aspects of retirement income planning, including how to minimize tax impact, prioritizing different sources of income, planning for social security benefits, making strategic tax decisions, and more. 

 

 

Show Notes

[02:36] Recent Developments – Grant shares his thoughts on some of the recent changes in the economy and policies that affect the way people should approach retirement planning. 

[05:24] 401k Plans – How to maximize tax benefits while utilizing a 401k. 

[11:33] Expenses After Retirement – Grant explains how to best manage your after-retirement expenses 

[16:11] IRAs & Tax – Grant explains the tax differences between traditional and Roth IRAs and what retirees should keep in mind when taking money from these accounts. 

[21:00] Strategic Tax Decisions – Grant shares a strategic move that allows retirees to minimize the tax impact on their retirement accounts while taking advantage of the gap years between the age of 65 and 72. 

[29:17] Deferring Tax – How to decide whether it is beneficial to defer tax based on life expectancy 

[32:46] Medicare Premiums – How to plan for minimizing Medicare premiums after retirement. 

[39:06] Social Security – Grant shares his take on maximizing the social security benefits after retirement. 

 

Resources

Tax Planning For Retirement: The Long Game

Tax planning for retirement is different from the strategies you deploy to minimize taxes while working. You’ll be using your investments for income, and the way they are taxed is different depending on the type of account you hold assets in. In addition, at age 72, you’ll begin taking required minimum distributions from your tax-deferred accounts, and these amounts can quickly push you into higher tax brackets.
Does it matter? According to research done by Morningstar, tax planning can add up to 4% to retirement income.

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More Money More Problems? Complex Compensation Requires a Different Kind of Advisor

The benefit of becoming a high earner is apparent: more money. You can go beyond creating financial security for yourself and your family and start making choices that may have been out of reach. Not having to worry about covering the basics can also provide you with a measure of peace of mind. It can help you operate from a mindset of abundance, and not scarcity, which can free you to actualize your financial and personal goals.

But before you get to that state of satori, you need to get all the money you’ve earned into your financial plan in a reasonably efficient way, while minimizing the taxes you’ll pay across your lifetime, and creating a diversified financial plan.

And if that’s not complicated enough, being a high earner very often means your compensation is unpredictable, lumpy, or you’re no longer a W2 wage earner. Whether you have deferred compensation, restricted stock, stock options, an annual bonus, or you own your own business, high income levels can equate to situations in which you have very complex compensation.

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Retirement is About Income … and Taxes

You’ve figured out your budget, your retirement nest egg is substantial, and you’re ready to make the transition to living on income from savings instead of income from work. But have you thought through the tax implications? It’s very common for tax planning to be overlooked, under the assumption that you’ll be in a lower tax bracket and Social Security payments aren’t fully taxed. In fact, a recent study found that 57% of Americans rarely consider the taxes they will pay/are paying in retirement.1 This can be an expensive mistake, and it has implications for other retirement benefits.

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Buy-Sell Agreements: Ensuring Smooth Business Transitions

Building a business is all about the day-to-day decisions. But what happens to the business if the primary decision-maker isn’t there? Creating a continuity plan that outlines transition planning should be part of the foundational documents of a business at any stage. Valuing the business, codifying the steps that will be taken and planning for transfer of ownership can help protect both the business and the interests of everyone involved – including family.

When partners start a company, they may document how to maintain its management and control if a partner dies, becomes disabled, or leaves the company. A well-designed, buy-sell agreement, or buyout agreement, is a legally binding agreement between co-owners of a business that stipulates the procedures if a co-owner dies, chooses to leave the firm, or retires.

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GMB Ep #112: Deferring Taxes Using 1031 Exchanges & Delaware Statutory Trusts with Jamie & Patrick Furlong

 

1031 Exchanges and Delaware statutory trusts are both nifty instruments for financial planning. In today’s episode, we explore more about the deferring taxes using 1031 Exchanges and Delaware statutory trusts with Jamie & Patrick Furlong. Jamie & Patrick specialize in 1031 Exchanges with DST’s and other securitized real estate investments. They exclusively serve clients seeking to acquire replacement properties in a 1031 exchange, navigate the complexities and time restrictions in the ever-changing 1031 environment through their company, Legacy Investment Real Estate.

 

 

Show Notes

[04:05] Story of Jamie & Patrick – Patrick shares their origin story, what they do, and how they do it.

[11:32] Delaware Statutory Trust – Jamie and Patrick explain Delaware statutory trust in detail, sharing compressive real-life examples.

[19:37] Importance of DST – Jamie talks about the significance of Delaware statutory trust and why someone should invest a property into a Delaware statutory trust in the first place.

[33:15] Holding Period – Non-traded real estate investment trusts can bring you a vast misfortune. Jamie discusses the holding time you should consider when contemplating real estate investment trusts.

[37:46] Role of the Manager – Patrick talks about the manager’s role in Delaware statutory trusts.

[46:49] 1031 Exchange Tax Code – Jamie and Patrick talk about the predictable changes in the 1031 Exchange tax code.

 

Information provided today is for educational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice.

Please consult the appropriate professional regarding your individual circumstance.

DST 1031 properties are only available to accredited investors (typically defined as having a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years; or have an active Series 7, Series 82, or Series 65. Individuals holding a Series 66 do not fall under this definition) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney.

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal.

Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Legacy Investment Real Estate is independent of CIS.

 

Resources

Connect with Jamie and Patrick:

Website: legacyire.com/

Jamie

LinkedIn: linkedin.com/in/jamie-furlong-927b9658/

Email: [email protected]

 Patrick

LinkedIn: linkedin.com/in/farmranch1031exchangennn/

Email: [email protected]

GMB Ep #99: Maximizing Workplace Benefits With FSAs and HSAs

 

The open enrollment period for Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) is approaching. During the enrollment period, employees can enroll in or amend their contributions for the future year for FSAs and HSAs, which they can use to pay for their healthcare-related expenses. We dedicated today’s episode to taking a deep dive into several vital facts related to FSA, Dependent care FSA, HSA, and the numerous ways to maximize your workplace benefits under each of them. 

 

 

Show Notes

[04:37] Flexible Spending Account (FSA) – Grant explains what FSA means, how it works, and who can contribute.  

[07:55] Plan the Health Expenses – Why it is essential to forecast the health expenses to pay them on a tax-deferred basis through FSA versus paying out of pocket. 

[09:18] Spend the Fund at Pharmacy – Beneficial features of FSAs, such as the ability to spend the funds at a pharmacy, and why having this option is significant. 

[10:10] Dependent Care FSA – Grant explains the purpose of a Dependent Care FSA, its benefits, and several facts to keep in mind if you are considering using one. 

[15:30] HSA – How to contribute to and HSA and the fantastic tax benefits and investment opportunities that come along with it 

[19:12] Eligibility for HSA – Grant explains the eligibility requirements for HSAs, including having a High-Deductible Health Plan (HDHP). 

[26:00] Connection to the employer – Grant discusses the connection between your HSA and your employer, and why employees can take their balance with them when they’re switching employers. 

 

Resources

What Is a Flexible Spending Account (FSA)?
investopedia.com/terms/f/flexiblespendingaccount.asp 

 

What Is a Health Savings Account (HSA)?
investopedia.com/terms/h/hsa.asp 

Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #58: Top Strategies for Tax-Efficient Charitable Giving

 

The year 2020 has been an extremely challenging year for a lot of people, businesses, and organizations. Therefore, this is also a time when charitable organizations may need help from donors more than ever. We dedicated today’s episode to exploring some of the tax-efficient strategies you can use to give to charity in a way that minimizes your tax impact. Stay tuned until the end of the episode, where Grant shares his favorite methods of charitable giving and some tips on how to optimize your tax benefits related to charitable donations.Continue reading