141: Ways to Optimize Your Retirement for 2025 Taxes

Summary

In this episode, financial planners Damon La Tanzi and Erica Wright share valuable insights for listeners. They discuss strategies to make the most of current tax brackets, optimize Roth conversions, and navigate the emotional and financial complexities of retirement planning. The conversation also emphasizes the importance of seeking professional financial advice, considering tax implications for major expenses, and the need for adaptable and evolving financial plans.

Outline

Segment 1. Introduction:

Segment 2. The Importance of Planning Ahead:

1. Discussion on why planning for 2025 and beyond is crucial for maximizing tax benefits.
2. Emphasis on potential changes to tax brackets after 2025.
3. Benefits of utilizing unused room in lower tax brackets before rates increase.

Segment 3. Roth Conversions:

1. Explanation of Roth conversions from retirement accounts and their advantages.
2. Benefits for account holders, spouses, and heirs in terms of income tax waiver.
3. A case example of a couple converting a significant amount in anticipation of future tax increases.
4. Potential impacts of Roth conversions on Medicare premiums and Social Security taxability.
5. Importance of consulting professionals for strategic Roth conversions.

Segment 4. Discussion of the Financial Industry:

1. Observations about how the industry can improve to better help clients' tax strategies. 
2. Highlighting the necessity of ensuring maximum financial retention for clients.

Segment 5. Tax and Financial Strategy:

1. Planning for life changes and major expenses (e.g., weddings, home renovations) while considering tax implications.
2. Strategies for spreading out withdrawals to manage tax burdens.
3. Importance of handling financial matters promptly, akin to dental care.

Segment 6. Emotional and Financial Complexities:

1. Professional financial advisors addressing clients' emotional ties and challenges with money.
2. Examples of assisting clients in managing stock holdings and navigating emotions related to specific companies.
3. Need for diversification and balancing stock holdings to reduce tax implications and minimize risk.

Segment 7. Professional Guidance:

1. Role of financial professionals in anticipating clients' financial needs and planning accordingly.
2. Importance of understanding Social Security taxability and its dependence on retirement income.

Segment 8. Independence and Flexibility:

1. Significance of tailor-made plans to suit unique retirement stories.

Segment 9. Conclusion

Transcript

Jordan Rich [00:00:03]:
Welcome. This is the retire South Shore radio podcast produced by South Shore Retirement Services, inviting you to get started on the path toward your dream retirement today. Now, from South Shore retirement services, here's financial planner Damon La Tanzi.

Damon La Tanzi [00:00:19]: 
Today we're going to continue the tax theme. Erica, we're going to talk about, really four or five things or strategies that you can do to better position yourself for taxes in 2025 and beyond. I know it sounds kind of crazy, like, guys, I just wrapped up my tax return. But if you don't plan around these things, if you don't look at it ahead of time, then what happens is you miss opportunities.

Erica Wright [00:00:40]:
Right.

Damon La Tanzi [00:00:40]:
Nobody wants to talk about taxes, maybe except for us. But if you don't, if you don't plan, if you don't talk about them, then you might end up paying more than you could have. And that's really the theme of today's show.

Erica Wright [00:00:50]:
Yeah. Missing out on a lot of opportunities when you don't start early. So we've already, you know, we're already, what, four months into the tax year? So you. Yeah. Making plans now for what you're gonna look like, you know, next April, a year from now. Definitely having a long runway on that.

Damon La Tanzi [00:01:02]:
Makes a big difference as we go through these topics. Right. Every week. Erica, we're fortunate that people call in after our show and set up these 15 minutes strategy calls or set up a 45 minutes hour discovery meeting in our office. If you are interested in more information, give us a call. Our WRKO number is 781-836-4214 781-836-4214 or hit our website, retiresouthshore.com. You can set up a time to chat to Erica or me or Mark and just get some more information.

Erica Wright [00:01:30]:
I think the bottom line for those is you don't know what you don't know. So it's a great time to just drop in and see, learn a couple things and see how you're doing and really get a temperature check for your retirement plan. Well, let's get right into it, Damon. Today we are talking about using the unused room in your tax brackets. So the tax brackets can be kind of a challenge to understand for a lot of people. Unless you work in this industry, not everybody's familiar with that. You start out with a 10% tax bracket, then it goes to 12%, 22%, 24%, 32%. There's a couple of big jumps in there, 35% and 37%.

Erica Wright [00:02:00]:
But what we're looking at is, say you have enough income that brings you into the 12% tax bracket. And you're kind of in the middle of there, and you've got a little wiggle room before you hit up to the 22% tax bracket. So what we're talking about is using the unused room. So look at that. The difference, how many dollars, how many, how much more money can you take out of your retirement accounts to bump up to that 22% tax bracket or bump up to that next big bracket that before you hit another big jump and just take advantage of the fact that are in the lowest tax environment that we've been in for years. And we know that we've got some tax cuts that are going to expire at the end of 2025. So taking advantage of the time and the low tax rates that we have and just maxing out the amount of room you're using in your taxes.

Damon La Tanzi [00:02:39]:
Right. Because once the calendar year clicks over, you miss that opportunity. To Erica's point, and if taxes are going to be higher in the future, the big question is, why are people waiting till down the road to take money from their IRA? Right. Many people don't need the money and they're like, I'm just not going to take the money out. But if you're going to pay 15% versus 12% or 25 versus 22, why don't I get ahead of that right now? Take that money out. I don't have to spend it. We're going to talk about what you can do with it. You can just put it in the bank, you can use it for other purposes.

Damon La Tanzi [00:03:06]:
You can Roth convert it, and we'll get into that. But the idea is you have this use it or lose it idea around your tax bracket and whether you need the money or not. Right. You have to take the money out at some point. Require distributions for most people age 73, depending on when you were born, could be a little higher. But I, the point is, as Erica said, we are literally, with maybe the exception of a couple of years during the Reagan administration, we're in the lowest tax environment we've ever been in in the history of the country. Now, forget the last 20 years in the history of the country. It's not going to stay this way for very much longer, and even beyond 2026, it's likely to continue to go up in the future. So Erica's point about using up to the maximum of the top of whatever bracket you're in makes a lot of sense.

Erica Wright [00:03:47]:
I think there's another unique opportunity people can capitalize on, too, right now. That right now we've got the jump between the 12, 22, 24. Well, in 2026, when these tax cuts go away, the 24% tax bracket is going to go away completely also. So the jump is going to be from 15 to 25 to 28. So right now, even if you're bumping up on the 22% tax bracket and you don't want to go to the 24, this is a really unique opportunity that even the 24 is going to be gone. It's going to become 25. So there's a lot of creative little strategies you can get in there, and that really would depend on what your tax budget is for the next year or two. But something to definitely sit down with somebody and talk about.

Damon La Tanzi [00:04:26]:
Right? And we often pick on the industry. We do it at our live events, we do it on our radio shows. And the industry has, frankly, done a very poor job of helping people navigate through what Erica is talking about. It's always been like, oh, we're growing the money, and we grow our clients money, too. But it's not about how much you have. It's about how much you get to keep at the end of the day. Right. So a good tax strategy and what we're talking about in today's show is about keeping more in your pocket.

Erica Wright [00:04:48]:
We talked a few minutes ago about maxing out your tax brackets, and I'm gonna extend on that idea a little bit here and talk about Roth conversions. So Roth conversions, you know, everybody, for the most part, I think, has heard of a Roth, Roth account or Roth retirement account, Roth IRAs. And a lot of people have heard about contributing to those accounts. Not a lot of people understand, I feel like, the difference between contributing to a Roth account and converting money from a retirement account into a Roth account. So that can be a complicated, complicated distinction there. But you can, you know, Roth IRAs, you can contribute up to $7,000 a year, $8,000 if you're using the catch up contribution. But there's a limited amount. You can't earn a certain, once you earn, you can out earn the ability to contribute to those accounts.

Erica Wright [00:05:29]:
So there are a lot of limitations put on those, how much you can put into them. Now, the Roth conversions, on the other hand, taking money from a retirement account that you have, like a tax deferred account, your 401k, 403b, and converting those dollars, what basically is paying the taxes early on those accounts and moving that money over. So one of the ideas behind maxing your tax bracket, taking that extra money, you know, the government can't tell you that you have to spend that money so you can take that money, max out your tax bracket, and then that brings into the topic of what can you do with it? And that's, you know, one of the ideas is putting it into a Roth account and doing a conversion.

Damon La Tanzi [00:06:01]:
Right? And the power of that Roth is, once you pay the taxes today, you don't have to pay them again. If you're married, your spouse isn't going to pay them. It's really income tax free for as long as that Roth IRA exists, even if you don't end up using. And it goes to your kids or grandkids, income tax free. And it reminds me of a couple that I brought on as clients partway through last year, the husband was already at RMD age. He was taking RMD's. He had the smaller of the retirement accounts. The wife's retirement account was the bulk of their retirement savings.

Damon La Tanzi [00:06:27]:
She had two years to go until her RMD age. So they're both retired. And we were looking at it, and we ended up Roth converting a significant amount of money to the tune of six figures. Because they're looking at this saying, hey, in a couple of years, taxes are going to go up. With the Trump tax cuts expiring, we don't necessarily need all of this money for our lifetime. We want to leave some to our kids and grandkids, and we want to get these taxes done right. They believe that taxes were going to go up more in the future, and we. That's our opinion, too, Erica.

Damon La Tanzi [00:06:54]:
But it made sense for them to do these large Roth contributions before her RMD started, because once her RMD is coming out, that's just taking up more room in their bracket. Now, this is the first year they're doing her RMD, but we'll still have extra room, and we'll look at the end of the year. Hey, how much more can we take out? So I think, to your point, that Roth conversions are very flexible. Contributions are very limited. Conversions are very flexible, and you can do them at any age. You can be retired, you can be working. There's all these ins and outs to it that people aren't aware of. But the idea is, I'm going to pay the taxes today, so I don't have to later.

Damon La Tanzi [00:07:28]:
And that's ultimately going to put. If you're out there listening, it might put you in a better position, too.

Erica Wright [00:07:33]:
One important sticking point to mention here, too, is that you can't convert your RMD. So if the government is requiring you to take money out of that account in the form of your required distribution, you can't actually convert that amount. If you want to do a conversion, any year that you have an RMD, you have to take above and beyond the RMD out to convert. So they're already expecting the tax revenue from that money that they're requiring you to take. So they want more tax money. So I think one other thing to note on these Roth conversions here, Damon, is that you don't want to just run out and start doing conversions. Like, don't run, log into your portal and start doing trades on your account and start moving things around.

Damon La Tanzi [00:08:06]:
Right.

Erica Wright [00:08:06]:
There can be some unintended consequences, consequences to doing conversions. If you aren't aware of the way different Medicare brackets line up, you could unintentionally end up causing yourself to pay an increased Medicare premium for a couple of years. So definitely you want to work with a professional, somebody who understands your tax situation, understands your income situation, and make sure that you're, you know, doing as much as you can without, you know, crossing over to a next, next threshold, I guess.

Damon La Tanzi [00:08:30]:
Right. It could be a Medicare, like you said, it could be you inadvertently jumped up to a bracket tax wise that you didn't want to. It could be that you ended up causing your Social Security to become more taxable. Right. There's certainly good things, things that can come of it, but if you don't do it correctly, to your point, that might end up hurting you and you may have been better off not, not doing anything. Folks, we are not CPAs. We don't give tax advice, but we are incorporating tax strategies as part of a long term plan. I think that's the key.

Damon La Tanzi [00:08:54]:
The industry, by and large, our industry is not doing that. We routinely meet with people who are coming in saying like, geez, I love my person, work with them for 20 years, but they are just not talking about this stuff that we are. Eric, I know you've, you hear that a lot.

Erica Wright [00:09:07]:
Yeah, definitely. I always equate this, I think, in analogies. I know, Damon, you definitely think in black and white. I don't know what your brain narrates to you. My brain never shuts.

Damon La Tanzi [00:09:15]:
Thank you.

Erica Wright [00:09:16]:
But I think an analogy is a lot. And I think I equate this to having a primary care provider for, as a doctor, you've had that same doctor for 20 years, but if you got into a situation or had something that you needed help with health wise that required a specialist or somebody who really understood how to deal with, you know, what particular thing you're dealing with, you wouldn't insist on staying with your primary care provider if he wasn't necessarily the most well equipped or, well, I guess, well versed in what you're, what malady you're treating, you would definitely see a specialist and you wouldn't think twice about that. And I think the same thing carries over for retirement.

Damon La Tanzi [00:09:47]:
As we often say, Erica, when we're meeting with people and talking and doing our live events, life doesn't happen on a spreadsheet. Right. Stuff happens we didn't plan for. Let's hope it's all good stuff, you know, big fun vacations and, oh, grandkids and whatever. But, but other expenses happen that we wish didn't happen. And how do we go about thinking about and planning around what, what are my options?

Erica Wright [00:10:08]:
Yeah. One of the examples of somebody needing a lot of money coming up here is I've got a client whose daughter getting married, and they've been planning this wedding and taking money out of their accounts for the past couple of years. So they don't have one year where they end up putting themselves in a 35% tax bracket or something just to- 

Damon La Tanzi [00:10:26]:
Pay for the wedding. Right.

Erica Wright [00:10:27]:
Yeah, you definitely don't want to do that. But seeing them plan is a perfect example. They've been taking extra money out, doing some, putting some money away every year for the past couple of years, knowing that this was coming. So planning for a wedding, planning for home renovations, planning for big family vacation or something like that, what do you have coming up on the calendar and making sure that all of that is taken into consideration.

Damon La Tanzi [00:10:50]:
Right. Because if the bulk of your money is in an IRA or some account you haven't paid taxes on, and then boom, you've got a gigantic wedding you're going to pay for and you took out, I don't know, $100,000 all in one tax year. You're probably going to blow up your taxes for that year versus, hey, if you've done some Roth conversions, or maybe it's just wedding isn't all paid for in one year, it's like, I'm going to take some money out this tax year, some money next tax year. I think that's one of the things you had said you had done with this couple, was spreading out the expenses over two different tax years. We took off 50,000 this year, we can take off 50,000 next year. And you're sort of spreading that tax burden around or over, and you can do that with a lot of different expenses. But even if you haven't planned ahead, at least talk to your person, talk to us about what can I do.

Erica Wright [00:11:33]:
Yeah. I think that's one of the things that is an advantage of working with us, that we get to know our clients so well, that we know we can oftentimes. Oh, well, what about this that we know? You mentioned your daughter got engaged. You know, maybe we think, you know, we can sometimes pick up on things before people do, as far as, like, let's do some planning around that, because we know what you're gonna. We know you're gonna need money for that.

Damon La Tanzi [00:11:52]:
Right. And it. Let's hope it's all fun stuff, like I said at the outset of this segment, but sometimes it's, you know, the car is in need of a, you know, massive repair. I need a new car. A roof is leaking badly. We need a new roof. Right. But even those things, people have an idea, like, yeah, my car's got 100,000 miles.

Damon La Tanzi [00:12:06]:
I'm getting to the end of the useful life, and what should I be thinking about regarding that? But. But it's really just about planning and understanding what are my options? And that's why when we're meeting with people, we're asking all these questions, which, to a lot of people, seems sort of non financial. Hey, do you have any financial obligations to anyone else? Tell us about your kids. How old are they? Oh, they're 25. Great. Are they married? Oh, no, they're dating. Like, okay, is a marriage coming? We're sort of probing for information because we know the pitfalls and the areas around which we might be able to help people with some of those bigger expenses.

Erica Wright [00:12:38]:
Yeah, you mentioned Damon a minute ago, flexibility. And that kind of is the key here. If you don't plan ahead, you don't really have the flexibility. You might not have the flexibility that you need to do these things. So putting a plan in place and making sure that your plan is kind of bulletproof from a couple different angles, I think, is an important aspect of what we do.

Damon La Tanzi [00:12:57]:
I think, to your point, we see this all the time, is a good plan is evolving all the time. It's like, oh, yeah, I had a plan. It's like, but that plan is five years old, and you fast forward, you got three new grandkids. You know, your husband retired. You're still working. Right. A plan has to evolve, and we're going to talk about that more as we go into the show. But I think it's a good reminder.

Damon La Tanzi [00:13:16]:
Give us a call. 781-836-4214. 781-836-4214 it's a very low bar to spend 15 minutes on the phone with us, chatting about what's important to you and what questions you have.

Erica Wright [00:13:29]:
Yeah. I think sometimes people tend to put this off, Damon, like, I like to talked about a minute ago. I use a lot of analogies, but I. I equate this to the dentist. It's like you never feel like you've done enough. When you go to the dentist, you put it off, like flossing.

Damon La Tanzi [00:13:41]:
Like, are you flossing? And you're like, yeah, no, I probably should have done that a few more times.

Erica Wright [00:13:43]:
No, but when you sit down with a professional, like, I like to think that we have a complete no judgment zone, 100%, no matter what you've heard. I mean, maybe if you've been to one of our events, you've maybe heard my personal story, but depending on where you've been through and what journey you've been through in life, oftentimes the people that are sitting in front of you probably don't have any room to judge. And, you know, we've seen a lot and heard a lot. So it's a very low key, low stress obligation or low key. A low stress event, I should say.

Damon La Tanzi [00:14:09]:
There is a lot of stress and anxiety and emotion tied up in money and what people's experience has been with money. Someone grew up and they never had any money, and so they have a very hard time spending it, or someone watch their parents spending in a crazy way that hurt the family. So our job is not to judge to your point. It's to understand and then to help build a plan around, okay, what's important to you, you know, what might be your hangups and your challenges around money, because, of course, we've. I don't want to say we've seen it. All right? We all haven't. But we've seen so much, and. And we're able to, I think, take some of that stress out of it for people.

Erica Wright [00:14:41]:
Yeah. I've got a client that. That Mark and I are working with, actually, right now who. Her father passed away, and he left the three siblings a house, and they weren't really expecting their father to pass away, and they weren't. They were planning on keeping the house, and their brother's situation changed. I think he. I think she said he's going through a divorce right now, but he wants to sell the house as he wants the money. But the sisters are trying to figure out how to buy the brother out.

Erica Wright [00:15:01]:
And the sister that we're working with, we've taken money from her brokerage account, and she didn't know what to sell. So obviously, that's where we come in. And she's got some substantial gains in that account. But she has one particular holding that she has a big loss in. And we were able to sell the loss and sell some of the gains. We can get all the money she needs to buy the house and buy her brother out and relieve his financial stress and then make sure that we're not creating a huge taxable event for her.

Damon La Tanzi [00:15:24]:
Right. And sometimes people are a victim of their own success. You know, some holdings, people have done so well over ten years. You know, I bought apple ten years ago. We've got clients that have that. I know you do, too. I bought this ten years ago. It's run up so much I can never sell it because I have all these taxes.

Damon La Tanzi [00:15:38]:
And it's sort of. That's partially true. But if you're looking at, well, not everything has done well, right? If there's one thing we know, it's, there's not just winners in portfolios. There's usually some losers. And maybe, how can I trim my apple holdings? Because I don't want to get too concentrated into one stock. Right. You don't want half your net worth to be tied up in any one stock, whether it's apple or another great company. So maybe I can sell a handful of losers, chip away at it.

Damon La Tanzi [00:16:00]:
And that allows me to sort of rebalance my portfolio in a tax efficient way. And if I look at that every year, I can really start then to manage what percent I might have in certain concentrated holdings over the long term.

Erica Wright [00:16:11]:
Yeah, I have another couple of clients, actually, another good example here. One guy worked for Gillette and Procter and Gamble for quite a few years, and he had a huge stock option program or stock account. Like, he's happy, loves the company. He's worked for the company for 40 years. But when you have all of that stock and all of those holdings in one particular company, it's basically like, how do we unwind that? How do we, how do we look at that and look at other holdings and other accounts that you have to make things all balance out in the end. That's another thing that people might not think about is the stock options and then the other, sometimes people get restricted stock units as part of their compensation package. So how do you unwind those things and how do you balance that out to make sure that you're paying, you know, the least amount of taxes that you can over the period of, you know, years.

Damon La Tanzi [00:16:52]:
Right. And as we were prepping for the show. We were talking about this, too. A lot of people get emotionally attached to those holdings. You know, like, to your point, I worked for Procter and gamble for 30 years. Great company. Loved it. And now I've built up all this stock, and I don't want to let it go, because in a way, it's like I'm letting go of a part of myself.

Damon La Tanzi [00:17:05]:
And listen, we totally get it. But you don't want such a huge part of your retirement to be in any one company. I don't care how low risk you might think it is. It's just generally not a good idea.

Erica Wright [00:17:15]:
Well, we've seen a lot of that happen in the last year or two with, I hate to bring this up, a cancel culture. People seeing something that they don't like, an ad campaign, and suddenly stocks absolutely plummeting. And if you had half your retirement account, that was, you know, stuck in that one, not stuck in that one company. It's a company you worked for for years. But it's something that we've seen that can happen overnight.

Damon La Tanzi [00:17:33]:
Right. Right. With not a lot of warning ahead of time, like, you know, warning, here comes, you know, a boycott of, you know, a beverage company, so to speak. And now it's a big problem for people. So I think it's a great point. The other topic we wanted to talk about in this segment was Social Security, because Social Security for many of our clients is taxable. But technically, there's three bands of Social Security taxation. There's none of your benefit being taxable, half or 85%.

Damon La Tanzi [00:17:57]:
And your income in retirement will determine how much of your benefit is taxable. Well, if all you have to pull from is an IRA or 401K or other account you haven't paid tax on, it's a pretty good bet that you'll have to take enough out that 85% of your social will be taxable. But if you plan around it, what Erica had talked about with Roth conversions earlier in the show, or tax loss harvesting, you can better control your income. And that might mean more of your Social Security, for example, ends up in your pocket as well.

Erica Wright [00:18:25]:
I think the key recurring theme here that I keep hearing, Damon, is planning around things and giving yourself flexibility because of planning. If you want to sit down and talk to a professional about your planning and about your situation, it's a great opportunity to give us a call. 781-579-8224 again, that number is 781-579-8224 you can schedule a strategy call a 15 minutes sit down and just to chat. Let's get to know what your situation is and see if it makes sense to move forward. Or you can sit down. Just go ahead and schedule a 45 minutes to an hour in person meeting. So those are my favorite kinds, to be honest with you. I love sitting down and talking to people and getting to hear their stories.

Damon La Tanzi [00:19:01]:
Right. Because everyone's story is unique. I think it's like this idea that all 60 year olds or 65 year olds, whatever age, are the same. Our industry sort of pretends that that's the case, but when we meet with people, it's not the case. And they have such interesting stories and opportunities and challenges, and, you know, that's what makes our job so incredible, is to be able to meet with all these people, try to figure out what's important and how do we build a plan to help them do what they want to do.

Erica Wright [00:19:24]:
Definitely. I've got clients from all different walks of life. I've got a woman who wants to retire to a treehouse in Belize.

Damon La Tanzi [00:19:31]:
That's awesome. I love it.

Erica Wright [00:19:32]:
Wouldn't it be a great retirement plan? Can't beat that.

Damon La Tanzi [00:19:34]:
So it reminds me of the statistic that Mark had said at one of our workshops, which was, more people are afraid of running out of money in retirement than they are of dying. 60% of people were afraid of running out of money in retirement versus 40% dying in retirement. Which sounds kind of crazy, but makes sense because the idea that I might get to be 80 years old and I don't have enough money to pay my bills, I think is a scary topic. Which is why, to Erica's point, we start our process with income, and from there, we move on to the investments in the wealth management. For most people, a chunk of your income has to come from all this stuff that you have saved, IRAs, 401ks, brokerage accounts, whatever you have. But how you invest it, what strategies you use, what products you use, what risk level you're taking, is it too much? Is it too little? How do you know when to change your investments? It's brutally confusing. And every year, our industry just dumps more and more products and information onto people. I think it's hard to cut through the clutter to figure out, okay, well, what should my investment plan look like? We're completely independent.

Damon La Tanzi [00:20:28]:
We don't work for some firm that tells us what we can or can't do with our clients. I think that's critical. Erica, we talk about that a lot in our meetings, which is that independence is really an asset to our. To our clients. But that doesn't mean that we're just out here alone, right? We've. We use Fidelity as our custodian. We don't work for Fidelity. It's a great company, but we want to be independent.

Damon La Tanzi [00:20:46]:
But on that fidelity platform, where our client accounts sit, we can use any investment products that we want. Vanguard, t row, price, Blackrock, Fidelity if we want. But that platform, our clients feel good, like, oh, it's my money's at Fidelity. Right. That makes sense to people.

Erica Wright [00:20:59]:
Yeah. Oftentimes when people are logging into their new accounts, they're the exact same login and everything that they've used because they had money at ease makes it a lot easier.

Damon La Tanzi [00:21:07]:
But investing in the market isn't the only way to make money. Right? Of course you've got to invest in the market. You won't make enough long term if you don't. But to today's topic, the next area we look at are tax strategies. We are not cpAs. We are not giving tax advice. We have CPA firms as strategic partners that will work with our clients if you need the tax filing. But we're building long term tax strategies, and we're looking at all the ideas we talked about today, as well as other ones.

Damon La Tanzi [00:21:29]:
But the point is that a good tax strategy is about not just how much you have, it's about how much you keep. Right. This idea that if I have a million bucks in my IRA, I really don't have a million because I have to pay Uncle Sam some percentage of that. And long term, I don't know what that percentage is. How do I go about planning, building a strategy so that I can pay less rather than more over the long term?

Erica Wright [00:21:49]:
That conversation is something that we talk about with our clients all year round, all the things we've talked about in the show, looking at how much room you have in your tax brack, taking advantage of all of that, are we looking at all the plans and the expenses that you have coming up and just making sure that all of it is a conversation we have on an ongoing basis that I feel like a lot of people in the industry are not having with their clients. So the next item on that list is health care planning and long term care planning. So, healthcare, looking at your Medicare, a lot of people don't know what to do once they've. Once they've retired and they're no longer on an employer's plan for healthcare benefits. You know, how does that work? Do you have the right care? Do you have the right coverage? So we have a strategic partner that can help our clients with Medicare planning, making sure that, you know, for the, for their needs, that they anticipate that they have the right drug coverage, that everything that they need is covered so there aren't any surprises. They don't find out after the fact that, you know, something that they use on a daily basis or some medication they take that they're taking for years that they can't get, get without paying a huge premium for. Also, we start talking about long term care here, too. So what happens if life throws a curveball and you can't take care of yourself? Or if you have some kind of healthcare event that you need extra help around the house? So how do we make sure that all of those expenses are covered for long term care if you.

Erica Wright [00:23:02]:
Nobody. I think for the most part, people don't want to ever end up in a nursing home or in a, of course not. Like, don't, nobody wants to put their parents there. But sometimes it's a necessity.

Damon La Tanzi [00:23:10]:
You have to, right?

Erica Wright [00:23:11]:
Yeah. Making sure that that care is going to be covered or making sure that you have a plan to cover that expense. And then finally the estate planning and legacy planning, making sure that you have all the proper legal documents in place to take care of your estate after you pass. And I think more importantly, to make sure that you can be taken care of if something happens and you're still alive but incapacitated or you're hospitalized for a little while, who can pay my bills? Who can speak on my behalf? Who can make decisions on my behalf?

Disclosure [00:23:41]:
Investment advisory products and services made available through AEwealth Management, a registered investment advisor. Insurance products are offered through the insurance business. Rowlette and Associates, LLCDBA South Shore Retirement services Rowlette and Associates, LLCDBA South Shore Retirement Services is also an investment advisory practice that offers products and services through Aewealth Management, a registered investment advisor. AEWM does not offer insurance products. The insurance products offered by Rowlette and associates, LLCDBA South Shore Retirement Services are not subject to investment advisor requirements. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier.

Disclosure [00:24:40]:
This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individuals situation. Mark Rowlette and Associates, LLCDBA South Shore Retirement Services is not permitted to offer, and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the us government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Mark Rowlette and Associates, LLCDBA South Shore Retirement Services.

Jordan Rich [00:25:26]:
Thank you for subscribing and downloading the retire South Shore radio podcast. Feel free to leave a review and a rating, and tell your friends about us. For much more, visit retiresouthshore.com. that's Retiresouthshore.com. Discover how South Shore Retirement Services helps individuals and their families achieve their ideal retirement requirements.

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