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It’s common for championship sports teams to have an ‘X’ Factor player with unique abilities which provide a critical edge over the competition. The big game clutch hitting of Boston Red Sox’ Big Papi. New England Patriot’s special teams returner Troy Brown. The Boston Celtic Dennis Johnson, who slowed the Lakers down without ever turning the ball over. While smart tax planning is always an important aspect of sound financial planning, in several respects it is financial planning’s ‘X’ Factor today. Let’s consider the setup, the extra benefits, the mindset, and the means of effective tax planning while it is most needed.

The Setup: while Americans have in recent years enjoyed tax rates well under the long-term average,¹ the high probability of a meaningful tax hike is perceivable. Medicare and Social Security are unfunded programs, the benefits of which soon will no longer be covered by new receipts. Government deficits are already unprecedented, as is the existing national debt. The Trump-era tax cuts are scheduled to sunset December 31, 2025, and Kamala Harris has revealed a desire to aggressively increase taxes on wealthy (hard-working and successful) Americans, which always filters down to the middle class via the government’s inflation game.

The Extra Benefits: tax planning always reduces total taxes paid, which increases net income and improves the family budget, and if the savings isn’t squandered, also improves the balance sheet. Inflation acts as an extra tax, and savvy Americans are creatively finding new ways to reduce income, capital gains, and estate taxes to offset the inflation tax. A second extra benefit of tax planning today is a reduction in the risk of future tax abuse. Retirees with all their retirement capital in Traditional IRA/401(k)’s are asleep at the wheel; make sure this isn’t you.

The Mindset: an effective strategy is to maximize the taxes you pay in lower brackets and minimize the taxes you pay in high brackets, so always know what bracket you are in. Secondly, track the cost basis (already taxed and tax-free portion) of your total retirement capital and net worth. This will instill the proper tax mindset and keep you from pretending your ‘yet to be taxed’ assets are entirely yours.

The Means: Qualified Charitable Distributions (once 70½ years old), Strategic Roth Conversions (in lower than average income years), 1031 and 721 Exchanges, selling a primary residence when the tax free capital gain is achieved, living in a tax friendly state, Donor Advised Funds, Gift Trusts, Irrevocable Life Insurance Trusts, traditional retirement contributions (in higher than average income years), Back-Door Roth IRA’s, never missing a tax deduction (student loan interest deductions, medical expense deductions and property tax deductions) or tax credit (the earned-income tax credit, the child tax credit, the saver’s credit, and education credits)² are some of the means being used by prudent tax planners today.

Grade the overall tax knowledge of your fiduciary advisor, CPA, and Esquire, and require a high level of proficiency. Put a great tax planning team together and enjoy the benefits; it may be the single smartest financial move you make in an era such as this.

Think about it, Shaun.

“When there is no guidance a people falls, but in an abundance of counselors there is safety” ~Proverbs 11:14

1 Ed Slot, America’s IRA Experts, “A History of U.S. Tax Rates”, 1924-2024 2 Smart Asset, Smart Money Minute, “How Can Social Security Benefits Affect Your Taxes?, September 28, 2024

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

The trek Nando Parrado and Roberto Canessa made to Santiago from deep in the Andes Mountains following the Uruguayan rugby team’s plane crash in October of 1972 was a legendary winter mountaineering expedition. Fighting -35F temps in civilian clothes while trying to stabilize the injured, grieve for the dead and simply stay alive made for challenging circumstances in which to plan a 10-Day trek. The lack of technical climbing gear on glaciated, 60-degree, 3,000 vertical foot slopes made it a death march, yet with the creative use of the contents of one crashed plane, they succeeded and saved sixteen lives! Effectively planning a multi-decade long retirement income stream in a materialistic, high inflation society, post the defined-benefit pension era, and amidst unfunded social programs and spiraling national deficits may be a comparably challenging endeavor! Creatively identify the right mix of the right income strategies to source your long-term retirement income needs:

• Let’s start by recognizing high interest cash accounts alone are not a solution, but a trap. Volatility is not the enemy, greenbacks are. Never forget that. The cash return is not sufficient to sustain you financially; you must assume some risk to beat inflation long-term after taxes.

• Well-managed rental real estate properties can provide a competitive, reliable, and inflation-resistant income, and present market dynamics suggest the appreciation homeowners have enjoyed in recent years may continue. Maintenance and repair costs can eat income as later retirement approaches, so plan property management and liquidations in advance.

• Various annuity types can provide a competitive lifetime income stream, and even offer unique riders that may benefit you further. Disadvantages include complexity, so thoroughly understand what you are buying, and high costs, so cap your allotment to this strategy to one-third of retirement capital.

• A portfolio of bonds can offer higher income than stocks with less volatility but may not produce sufficient returns to keep pace with inflation long-term. Present market dynamics seem favorable towards high quality bonds.

• A systematic withdrawal funded by periodic liquidations of securities within a diversified portfolio offers short-term income predictability, simplicity, and investment flexibility. Bear to mind that prudent asset management within this strategy is critical: high costs and low returns can cause withdrawals to consume principle, and absent principle withdrawals cease; low costs and high returns can make this a winning strategy. 

• A careful selection of capital-efficient, dividend-paying, industry-dominating stocks offers near zero expenses and an increasing and steady stream of retirement income with substantial appreciation potential. The risk is a bear market can alter both ROR issues dramatically.¹

• Real Estate Investment Trusts (REIT’s) and Master Limited Partnerships (MLP’s) can provide competitive income streams but may not be liquid, and thrive in distinct market dynamics, can delay tax returns due to late K-1 1099 distribution, and are generally more leveraged (indebted).

• Required Minimum Distributions (RMD’s) can remain invested for those who overshot the income goal, but otherwise form a base of retirement income with other fixed income sources. For 501(c)(3) givers, Qualified Charitable Distributions (QCD’s) should be set up at age 70½ for all such gifting.

Just as Nando and Canessa had to assess the net benefit and weight of every item in the plane to reach Santiago, whether to carry or to leave, we must weigh these and other income options, not only to reach our income destination, but in a manner that is smart from both a tax and an estate planning perspective. May God bless your effort! Shaun.

“In an abundance of counselors there is safety” ~Proverbs 11:14

“The heart of man plans his way, but the Lord establishes his steps,” ~Proverbs 16:9

1 Smart Asset, “How to Create a Retirement Income Stream, August 20, 2024

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Residential real estate has been a highly productive investment for many Americans in recent years, and in particular, rental homes producing a competitive net yield have exemplified the successful growth and income investment. The time and effort required to maintain a home can become burdensome with age, however, and hiring professionals for every maintenance and repair project eats into investment returns. These dynamics make the ownership of physical homes impractical for many by their mid-late retirement years, inspiring a generally taxable sale of property. Be well acquainted with the ways you can minimize, or even avoid capital gains taxes on the sale of an appreciated home:

• Individuals selling a primary residence can exclude up to $250,000 in profits ($500,000 for married couples filing jointly) from taxes. The two prerequisites are 1) minimum of two years of ownership, and 2) the home must be the primary residence for 24 of 60 months preceding sale.

• Those who inherit a highly appreciated property do so with a “step-up” in cost basis. This means the cost basis (non-taxable investment amount) becomes the value on the day of the former owner’s death. An appreciated home in this case sold immediately following the inheritance would result in minimal or no tax bill.¹ 

• Becoming a full-time resident of a state that does not tax capital gains prior to selling an appreciated property can eliminate more taxes than you might imagine, but don’t underestimate the significance of a move, financially or otherwise, and be well acquainted with the behavior of your present state in such cases.

• Understand many expenses incurred to maintain, repair and improve a home become part of the cost basis. Keep an accurate record, and every receipt for these expenses.

• In the tax year of selling an appreciated home use realized losses on other investments to offset your taxable gains, and don’t forget about carry-over losses realized in former years. Your CPA should retain this figure from year to year. 

• 1031 and 721 Exchanges allow for a continued deferral of capital gains taxes following the sale of an appreciated property, which can include the sale of a high maintenance physical home and corresponding purchase of certain zero maintenance Real Estate Investment Trusts (REIT’s). One prerequisite is the new investment must be a “like” property with the same purpose as the one sold.²

Don’t ever miss an opportunity to reduce capital gains taxes, which directly reduce net profit. That said, seek professional counsel from your team of financial professionals, and understand every detail of each of these tax reduction strategies before acting.  

Think about it, Shaun.

“Give to Caesar what belongs to Caesar, and to God what belongs to God.” Mark 12:17

“Unquestionably, there is progress. The average American now pays out twice as much in taxes as he formerly got in wages.” ~H.L. Mencken

1 Smart Asset, “We’re Inheriting a House. How Can We Avoid Capital Gains Tax When We Sell It?”, July 9, 2024

2 Centura Wealth Advisory, “Trapped by Your Real Estate Investment?”, Sean Clark, Director of Financial Planning, 2019

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. This information is not intended to provide tax advice, and it is recommended that you consult a certified tax professional prior to acting on this information. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Experienced mountaineers know precisely where every utensil is at all times, whether on the person or in the pack, and can find it quickly in the dark. I’ve seen a 50-Year-old man throw a public tantrum and miss ‘summit day’ on an expensive climb due to his ignorance of this rudiment of team climbing. Many mountaineers are dead for not knowing that on a steep glacier every essential item must constantly and securely be attached to the harness. I read of a man who chased his pack into a 2,200-foot-deep crevasse on Denali as he discovered too late the importance of this mountaineering axiom. Essential is the aid of proven practices while engaging in dangerous activities, whether it be mountaineering, motorcycle racing, or managing one’s financial life. Benefit from the following smart financial concepts as you successfully plan your financial future:

• The benefits of scrutinous and creative thinking are immeasurable. Every American must identify and discard harmful monetary notions, partly because financial principles aren’t taught in school, and partly due to rampant cultural materialism. Denying oneself unnecessary comforts and enjoyments can create a world of life-changing opportunities. Prior to a large, off-budget expenditure, ask yourself if there exists a more productive use for the dollars, whether it be to fill a gap in your own retirement plan, or by someone else in need.

• Prioritize contentment above financial wealth, for there is no definite connection between the two. Discover by trial and error your greatest interests, and whether it be birdwatching, nature-walking, or astronomy, replace habitual consumerism with the simple things that bring you joy. This powerful idea in action both improves quality of life and reduces probability of financial hardship.

• Realize the danger of debt and understand it only makes financial sense to borrow money if that money is invested productively. Maintain a relatively small level of debt, never carry consumer debt, and never retire while in debt. 

• Understand the difficulty of replacing a large portion of your earned income for decades in an inflationary culture and use every means and month at your disposal in its attainment. Once the financial foundation of debt management, a positive cash flow, emergency savings, and the right amount of the right type of life insurance is in place, pay yourself first by investing 20% of your income for retirement.

• Understand the value of income, earn it as long as possible, and invest primarily in things that produce it. Non-income producing investments generally carry greater risk and are incapable of leveraging the greatest wealth-building principle on earth: compounding. Increase the probability your income will survive you by annuitizing a modest portion of your total retirement capital.

• Manage catastrophic market risk with position-sizing and stop-loss orders. It’s not what you make that counts, it’s what you keep.

• Acknowledge the probability of meaningful tax increases in America and apply a smart tax plan to prepare for it. Uncle Sam is co-owner of all traditional retirement accounts, so stop believing the whole account is yours. Utilize taxable Roth Conversions to maximize the taxes you pay in lower brackets, and traditional, deductible contributions to minimize the taxes you pay in higher brackets.  

Leverage these practices for your own benefit and teach them to your children while they are young.

Think about it, Shaun.

“A good man leaves an inheritance to his children’s children.” ~Proverbs 13:22

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

As a vegetable gardener, if I don’t bring three contenders for the harvest into subjection early in the growing season, I labor without pay to feed weeds, rodents and bugs. Each does its share to encroach upon, and ultimately consume the precious fruit of my labors! We live in a materialistic society which measures economic output primarily by consumer spending, not investment or production, but personal consumption. Modern Americans enjoy, and, therefore, must pay for many comforts and conveniences not available to former generations, and yet think of them as necessities. Acknowledge and eradicate the financial behavior patterns which, when added to the materialistic and inflationary dynamics of our culture, increase the probability a financial hardship will occur during one’s retirement.

• Buying a new car. I lost $5,000 on the only new car I ever bought driving out of the dealership and couldn’t have burned the money as fast! Consider a certified, three-year-old Japanese-built vehicle with under 50,000 miles, and use your large savings to pay-off consumer debt, build emergency savings in a high interest savings account, or make a wise investment.

• Ungoverned daily indulgences. A $5 daily latte at Starbucks equals $152/month, which invested at 8% over 25 years makes the retirement account $144,022 larger. Abstaining from simple enjoyments isn’t required, but knowing the long-term financial impact of habitual behaviors is prudent.

• Insufficient emergency savings results in consumer debt, 401(k) loans, and taxable IRA distributions (which are sometimes penalized). Carry 6-9 months of total annual household spending in a high interest bank account or money market fund for emergencies and quickly rebuild it when it falls below this threshold.

• Consumer debt forever nibbles on the fringes of your wealth-building efforts, and far more than you realize. Don’t ever carry consumer debt voluntarily. 

• Borrowing from a 401(k) is generally inadvisable for several reasons. Since bull markets last longer than bear markets on average, most loans are repaid at higher prices, more than negating the benefit of paying the interest to yourself. In a loss of one’s job loan payments must continue, and the plan account can’t be rolled over unless the loan is first repaid.

• Having appropriately sized emergency savings without earning a competitive interest rate or having too much in emergency savings are both counter-productive behaviors, especially in an inflationary culture. The former forfeits market rates on the time value of money while the latter puts too little return on too great an amount.

• Generosity is commendable, but voluntarily giving beyond one’s ability can be consequential. Know your future needs first.

The goal of wealth-building efforts are stewardship and provision, not miserly living or wealth itself. Behaviors to identify and eradicate are those which a) prevent a family from becoming financially independent, or b) can meaningfully damage or destroy one’s retirement. The simple solution is to plan wisely, prioritize retirement savings, and avoid financially destructive behaviors.  

Think about it, Shaun.

“Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it” ~Proverbs 21:20

“For which of you, desiring to build a tower, does not first sit down to count the cost, whether he has enough to complete it.” ~Luke 14:28

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

A fascinating case study in mountaineering is found in “Mountain of Ice,” a Jon Krakauer narrated Nova documentary of an ascent of Vinson Massif, Antarctica’s highest peak and the coldest mountain on earth, by a mostly world class climbing team. A team-wide disagreement broke out over whether to ascend the head wall via an easily navigable, but treacherous ice fall, or an adjacent, straight forward 50-degree slope. Half the team feared the inexperienced photographers would fall to their deaths on the steep slope, while the other half refused to risk their lives on the unpredictable ice fall. Lacking concession, a split-up resulted in half the team ascending each route, both successfully, after which a full reconciliation occurred. The decision to rollover a retirement plan to an eligible IRA or leave it in the company plan can be as complicated and as financially consequential as the Vinson Massif team’s headwall decision! Consider the advantages of each option as you chart your course to a successful long-term retirement:

Reasons to roll a retirement plan to an IRA may include:

• Flexibility to make changes and/or withdrawals more quickly by avoiding plan restrictions and delays.

• Quicker and smarter planning changes may result from a qualified fiduciary advisor being better educated on new Secure Act regulations than is your third-party plan administrator.

• Control of personal funds and easier integration of the account with one’s personal financial, tax, and estate planning.

• Easier adherence to Secure Act rules for beneficiaries inheriting retirement funds.

• Option to make Qualified Charitable Distributions (after age 70 1/2).

• Dramatic increase in investment options, including many new asset classes and investment types.

• Eradication of complicated retirement plan withdrawal restrictions.

• Consolidation of “like” retirement accounts offers simplicity and ease of control, including more flexible withholding options and aggregated RMD calculations.  

• Better service and more personalized attention from a fiduciary advisor who may be an expert in IRA tax law.¹

Reasons to leave assets in a company retirement plan may include:

• Better creditor protection than IRA’s for account owners residing in states which have minimal or no creditor protection.

• Uninsurable plan participants can purchase group life insurance without proving insurability and with retirement plan assets. Keep in mind complicated rules may apply at retirement.

• Required Minimum Distributions can be delayed by those still working, though only with an active retirement plan. Keep in mind portability rules allow an IRA to be rolled into an active retirement plan, providing the plan allows it.

• Retirees between age 55 and 59 1/2 (50 and 59 1/2 for public safety employees) can take withdrawals from a company retirement plan penalty-free, though taxes still apply.²

Guides with knowledge, experience, and integrity will seek the safest and surest path to the desired destination. These are essential characteristics, especially when multiple, complicated route options exist, as the two head guides on the Vinson Massif headwall ascent proved. Every climber said they chose the right guide and route! An experienced fiduciary advisor represents your interests alone and should prove to be an excellent choice of guides.

Think about it, Shaun.

“Where there is no guidance, the people fall, but in an abundance of counselors there is victory” ~Proverbs 11:14

1,2 Manual from Ed Slott & Company’s Exclusive Two-Day IRA Workshop, July 18-19, 2024

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

The view from the plane as we flew onto Mt. Denali for a May, 2017 attempt is burned into my memory. The long sprawling glaciers occupying the lower mountain, littered with hundreds of 2,200-foot-deep crevasses, bore the ‘Big three’ dangers quickly to mind: slip-n-fall, crevasse fall, and avalanche, in that order. This was the culmination of a dozen years of dreaming, praying and planning; these risks were present, and those crevasses looked like big hungry mouths to me! Accumulating real wealth, meaning wealth that is increasing after taxes and inflation, sufficient to fund a potentially long and expensive retirement in a high inflation society comes with its own ‘Big Three’ hazards: inflation, tax hikes, and the high cost of care late in life, in that order. Consider the landscape of these risks as you find great solutions in the planning of your own financial future:  

• The Fed systematically creates inflation to fund government deficit spending, and then understates it so government payments rise slower than real inflation. Wealth production requires an after-tax return greater than real inflation, not achievable with a 5% CD or Money Fund. Many Americans are watching their bank account values grow, but their real (after taxes and inflation) wealth grows not! Real wealth production requires risk taking and exposure to the asset classes that have performed best during inflationary times: real estate, high quality stocks, and other hard assets. Be sure to maintain liquidity, manage risk, and take a long-term view with invested assets.

• Be convinced it is inflation you fight, not deflation. Thousands of middle-class families have been impoverished for lack of understanding this. The primary enemy is not volatility, but Federal Reserve Notes, and anything easily converted into them. Be liquid enough to handle prolonged volatility but fear the ‘Notes’. It is logical in inflationary times that high quality assets, especially when producing a stream of present income, should cost more Notes, not fewer to buy.  

• Retirement account values are high, tax rates are historically low, and budget deficits are unhinged. Never has it been more important for Americans to have a smart long-term tax plan.

• The “Tax Cuts and Jobs Act” is set to expire December 31, 2025, after which income tax rates may rise. The assumption of retiring to a lower tax bracket may be faulty, and the IRS is co-owner of all traditional retirement accounts. Choose to pay more taxes at lower rates, pay less taxes at higher rates, and minimize lifetime taxes by: a) understanding the taxability of your Social Security payments, b) utilizing a non-retirement brokerage account for annual tax-posturing and tax-loss harvesting, c) considering “Backdoor” and strategic annual Roth Conversions, d) factoring future RMD’s into your tax and retirement plans, e) participating in Qualified Charitable Distributions and f) a Health Savings Account, and g) aggressively funding traditional accounts in high-income years.¹

• Commit the issue of the care you will require as the older body breaks down to your thinking. Think about where you will receive this care, from whom, how it will be funded, and the implications to your loved-ones. Your personal Plan of Care will likely be multi-faceted, so be patient, keep notes, and stick with it. 

Warren Buffet and others contest the most important aspect of investing is “avoidance of a catastrophic loss.” The ‘Big Three’ dangers on Denali formed a prism of risk awareness, and then risk mitigation, that proved most helpful to our team. Use your knowledge of inflation, the probability of future tax hikes, and the high cost of care late in life to sharpen your financial plan.

Think about it, Shaun.

“But my God shall supply all your need according to his riches in glory by Christ Jesus.” ~Philippians 4:19

1 Smart Asset, “5 Tax Strategies for Your Retirement Income,” July 12, 2024

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks, including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

My vegetable garden always looks incredible in late May following the spring rains. The beds are orderly and full, plants flourishing, early harvest active, and weed containment stellar; but nature is persistent, and as the daily workload increases in mid-summer’s soggy heat, the war on weeds invariably morphs into a furious battle to save the harvest! Just as the gardener benefits not from that which is grown but from that which is harvested, a retiree profits not from wealth that is accumulated but from wealth that is retained after Uncle Sam takes his share.

The first step in effective retirement planning is to realize that tax planning is an indispensable factor, and the goal is not necessarily to minimize taxes each year, a primitive strategy which can end terribly during one’s retirement, but to creatively minimize the total taxes paid over one’s lifetime. The second step is to work with a CPA who embraces this concept, which likely contradicts their early education, and who owns the responsibility not merely to prepare your annual return, but to work with your advisor to achieve this end. To these you also want to consider adding the following tax strategies:

• Maintain a cost basis for each asset on your Net Worth Statement and a total cost basis for your estate. This will drill the aforementioned truths into your thinking and inspire you to become an effective tax planner.   

• Maintain emergency savings equal to nine months of household spending. This will prevent you from paying taxes and penalties on retirement plan distributions to cover unplanned expenses. 

• Utilize advanced planning software to compare the ultimate tax benefit of Roth vs. Traditional vs. after tax accounts to your personal plan. Appropriate contributions based on your findings.  

• Fund a non-retirement brokerage account (NR-Brokerage Article) and benefit from annual tax harvesting and other versatile tax features.

• Use low income/low tax bracket years to increase the cost basis on appreciated assets and offset high income/high tax bracket years by skewing retirement contributions towards traditional accounts.

• Investigate Strategic Annual Roth Conversions (SARC), particularly between post-full employment and commencement of Required Minimum Distributions (RMD’s, age 73) to lock the tax in at a lower rate and reduce future RMD’s exposed to potential tax hikes.

• If over age 70½, consider Qualified Charitable Distributions (QCD), especially if you are receiving unneeded RMD’s and/or already give regularly to a 501(C)(3) organization, but KNOW QCD RULES.  

• Make sure your retirement and estate plans are tax savvy and highly complementary organisms.

Each year I try to add a new weed-fighting technique to the containment strategy to increase the ultimate yield. I believe it will benefit your family immensely to do the same as you plan your financial future with the aid of an intelligent tax plan.

Think about it, Shaun.

“In an abundance of counselors there is safety” ~Proverbs 11:14

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

My vegetable garden consists of raised companion beds, hydroponics, Hugelkultur, decomposed wood chips, traditional dirt, and a Cotieres, six distinct gardening techniques originating in several different countries, each with advantages and disadvantages. Since the climate varies yearly, and with each plant species possessing needs and vulnerabilities, likes and dislikes, the variation challenges my stunted creativity and vastly improves the probability of overall success every year. An equal number of account types can be utilized as you strive to build the wealth required to fund an expensive retirement, each with advantages and disadvantages, and considerable thoughtfulness should be applied to your endeavor! Consider the taxable brokerage account, its versatility and benefits, and the important role it can fill in your overall investing strategy:

• The account can be owned individually or jointly, and beneficiaries may be named. It can also be owned by a revocable or irrevocable trust. In all these cases probate is avoided, and the account complements the carefully crafted estate plan.

• When not owned by an irrevocable trust the account is liquid, unlike retirement accounts for investors under age 59 ½. A portion of emergency savings may be held within it, and generally at a higher interest rate than banks will pay.

• The account offers securities of many types in virtually every asset class. Investment options greatly exceed most retirement plans.

• Unlike retirement specific accounts, no formal agreement is entered into with the U.S. government, a fiscally reckless institution which can (and has) change(d) the rules in the middle of the game to its own advantage.

• For those receiving Required Minimum Distributions but not in need of income, shares of securities may be journaled from an IRA to the non-retirement brokerage account with an “In Kind” transfer. This allows ownership and compounding of dividends to continue.  

• Various tax advantages, though distinct from retirement plans, are presented. A strategy may be employed to create income or deferral and can be adjusted year to year. Tax-loss harvesting can be utilized annually to offset gains and losses, and against investments held inside the account or elsewhere, and losses not applied in the year realized can be saved for future years. This versatility can wonderfully complement an investor’s overall tax plan.

The Hugelkultur garden produces abundantly in a drought, even during a water ban. The Cotieres provides live, organic vegetables in the middle of a snowy winter. Once planted, the hydroponics garden can be neglected until the harvest. It should be noted that the non-retirement brokerage account should be used as a complement to formal retirement plan accounts, not as a replacement of them. As you construct a well-rounded funding strategy for your retirement, thoughtfully protecting yourself from the many developments that can derail you, the versatile non-retirement brokerage account is sure to fill a valuable role.

Think about it, Shaun.

“The prudent sees danger and hides himself, but the simple go on and suffer for it.”   ~Proverbs 27:12

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.