The theme this week on the Retirement Quick Tips Podcast is: Analyze Your Tax Return Like A CPA.

Today, I’m talking about using your tax return to be more strategic and potentially save a lot in taxes with your charitable giving strategy.

If you are currently donating cash to charities, but you have significantly appreciated assets with large gains, there may be a better way. 

If you claim the standard deduction but you still gave $1,000 a month to charities last year, you’re not even getting a tax benefit for that. 

A few of solutions to this come to mind:

1. Look at your appreciated assets. Those can be gifted and the charity can sell it without paying the tax on the gain. You won’t pay the tax on the gain either. A win-win!
2. Consider contributing directly out of your IRA to charities, in what’s known as a qualified charitable distribution. This works best when you’re 72 and subject to required minimum distributions from your IRA, and it’s my preferred way for clients to give to their charity or church of choice once they’re taking RMDs.
3. The third strategy involves charitable bunching, where you cram 2 or 3 years of giving into 1 year which could allow you to itemize in that year where you give more. 

There are other strategies, too, like using a donor-advised fund and funneling your gifting through that, and then there are more advanced giving strategies that an estate planning attorney can help you set up, but the key here is that your tax return, the way in which you give to charity, and how those gifts are benefitting you and your tax situation could help you identify better ways to give that could also reduce the taxes you pay. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: Analyze Your Tax Return Like A CPA.

Today, I’m talking about reviewing tax loss carryforwards, and the wealth of information that can be uncovered in just this one line item. 

Over the last decade, most investment portfolios have had large gains, and it’s less likely that I’ll see a loss carry forward. When you sell an investment in a taxable account at a loss and you don’t have any gains to offset that with or the gains don’t exceed the amount of the loss, you get to carry that loss forward to future years. But with a decade+ of gains now, I don’t see this much any more and when I do, there’s a story behind it that needs to be uncovered to learn more about my client. And you can use this to learn more about your own temperament as well. 

Tax losses can come from selling an investment at a large loss, or maybe a business that went belly up. Sometimes it can indicate a client’s appetite for risk and their tendencies to panic when the market turns south. If you sold your entire stock portfolio when the stock market was in freefall during the early days of Covid in March of 2020, you might still have a significant tax loss carry forward. 

So you can learn a lot about your temperament, investment philosophy, and investing behavior all of which are good indicators of future behavior. When working with clients, this is especially useful if they’re a newer client and I wasn’t around in those years where they had large losses. If I see that a client panicked and sold in the spring of 2020, then I am likely to put them into a more conservative portfolio that has less in stocks and is less likely to experience the gyrations of the market. 

In the gospel of Matthew in the new testament, there is a verse that says “You will know them by their fruits”. In the behavioral finance bible, if such a thing existed, it would say something like: “You will know them by their tax loss carryforward.”

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: Analyze Your Tax Return Like A CPA.

Today, I’m talking about tax deductions. The place to start better understanding your tax deductions is by looking at your tax return to see if you claimed the standard deduction in 2021 or if you itemized your deductions instead. Whether you itemize or claim the standard deduction can change from year to year, so it’s helpful to understand whether or not you’re likely going to keep claiming the standard deduction or if you will itemize in 2022. For this I recommend better understanding some of the biggest types of deductions you can itemize, and also looking back a few years to see the history of what you did over multiple years. 

More people will choose to claim the standard deduction, which will be $25,900 this year if you’re married, or $12,950 if you’re single. 

Itemizing vs. taking the standard deduction has several implications for your investment and retirement planning decisions. The most common itemized deductions are those for state and local taxes (aka SALT), mortgage interest, charitable contributions, and medical and dental expenses. If you’re claiming the standard deduction, then these tax deductions won’t benefit you, unless you itemize instead and the itemized deduction amounts to a higher amount that you would have claimed on the standard deduction. 

I know this is getting a little technical, but here’s why it matters: Knowing whether or not you itemize or if you claim the standard deduction will help inform your strategy on important financial planning decisions like charitable giving and paying off your house early. 

Many people believe that they’re still benefiting somewhere on their taxes from their mortgage interest deduction, and other itemized deductions, so they don’t mind having a mortgage payment because someone at some point told them they were getting a tax break for keeping that mortgage payment. But all of that goes out the window when you claim the standard deduction and don’t itemize. No more SALT deduction, no more mortgage interest deduction, and no tax benefit on certain charitable contributions. 

I’ll actually talk more about charitable giving later this week, but for now, check out your tax return to see if you itemized last year or claimed the standard deduction, and know that if it’s better for you to claim the standard deduction, you may want to be more strategic with your charitable giving and mortgage payoff decisions. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: Analyze Your Tax Return Like A CPA.

Today, I’m talking about reviewing your tax return to understand your capital gains and losses. Ideally, you would have an investment portfolio that is as tax-efficient as possible. That’s not always the case, but having a tax efficient asset location strategy (in other words having the right types of investments in the right accounts) can add up to .75% of additional annual returns. Over time, this adds up big time! 

Take a look at your schedule B and schedule D on your tax return. There you’ll find taxable interest, qualified dividends, ordinary dividends, and capital gains and losses. 

I want to keep it simple here and focus on capital gains, because I think it’s the biggest opportunity for most people, at least in my experience, to be more tax efficient. 

We want to avoid paying more tax than is necessary, and with capital gains, it tends to be something we have a bit more control over from year to year. First of all, wherever possible, you want to avoid having mutual funds (especially stock mutual funds) in taxable accounts. These can generate large and unpredictable capital gains that you don’t have much control over. So if you’re going to own mutual funds, in many cases, but not always it makes more sense to hold mutual funds in IRA or Roth IRA accounts. 

Another red flag when it comes to capital gains is a lot of trading and portfolio turnover. This is especially true when I see short-term gains and losses, meaning that the person held the investment for less than a year. Short-term gains are taxed at higher rates, and having any of these at all is problematic.

If you are a DIY investor, you’ll need to be careful about and closely monitor your accumulated or realized gains as the year goes on. You should also be reviewing your portfolio right now and again near the end of the year for losses that can offset gains. 

The great news about downturns in the stock market that we’re experiencing right now is that it allows you the opportunity to reset some of the tax efficiencies that might exist in your portfolio and move around some of your holdings to improve your asset location efficiency that I mentioned earlier is so important for your long-term portfolio returns. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: Analyze Your Tax Return Like A CPA

Today, I’m talking about the place you’ll want to start analyzing your tax return, and that is your marginal tax rate. By reviewing your tax return and finding your taxable income and your marginal tax rate - both of these figures can be found on your tax return. For example, let’s say you’re married and your taxable income in 2021 was $250,000, and you expect your income to remain the same in 2022. 

This income puts you in the 24% marginal tax bracket for both 2021 and 2022, and knowing both your taxable income and your marginal rate is helpful for future planning and determining what types of investments are appropriate for you. 

Your taxable income will indicate whether or not you’ll owe capital gains tax on investments you sell this year, and whether or not the additional Net Investment Income Tax of 3.8% on top of state and federal capital gains taxes will apply to interest, dividends, capital gains, rental and royalty income, and non-qualified annuities.

Understanding the general impact of  interest, dividends, capital gains, and the like can help you make more informed decisions about your investment portfolio, but knowing your marginal tax rate is essential for determining the impact of financial planning decisions like Roth conversions, and whether or not you should own taxable bonds or municipal bonds in taxable accounts. 

I find that many people in lower tax brackets, especially retirees like owning municipal bonds simply because they don’t pay tax on the interest they earn. But municipal bonds really only make sense for investors in higher tax brackets. 

For example, if I’m in the 24% tax bracket and I live in a state like Oregon (which I do) with an additional state tax of almost 9% and I buy a tax-free Oregon municipal bond that yields 3%, because of my income, that’s like buying a corporate bond that pays 4.5%. Not a bad yield and in many cases, it might make more sense to buy tax-free municipal bonds.  If my income is a lot higher than that, that same 3% bond for an Oregonian in the 35% tax bracket would be like buying a taxable corporate bond with about a 5.5% yield. 

The higher your marginal tax bracket, the more tax you’ll pay on dividends and bond interest, and the more careful you’ll want to be about your trading activity in your taxable accounts and the types of bonds you own. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Welcome to a new week here on the Retirement Quick Tips podcast. I’m your host Ashley Micciche, co-owner of True North Retirement Advisors, an independent financial advisory practice managing $340 million in client assets. I’m a Chartered Retirement Planning Counselor, and I started this podcast because I love helping people just like you gain clarity and make a plan for the retirement you envision. 

The theme this week on the podcast is: Analyze Your Tax Return Like A CPA

If you haven’t heard me mention it on the podcast before, my husband is a CPA. This is very helpful, because whenever I have a complicated tax question, I have free and unrestricted access to an experienced expert. So I did a little research, talked to my husband and together, we came up with a few crucial line items on your tax return that you’ll want to review before you just file it away. 

I’ll share with you how things like your marginal tax rate, tax deductions, and tax loss carryforward can help you uncover important investment and planning opportunities right under your nose, that can save you lots of money, and help you make smart and thoughtful decisions with your retirement. So this week, dig up your tax return from 2021, because I’m going to pick one item each day to review from your tax return, that can actually provide some value to you for investment and planning decisions you’ll make going forward. 

And while I am careful to not lead you astray, personal finance is not an exact science. There is no one-size-fits-all solution for everyone, so I encourage you to disregard anything I say that may not be helpful for you, and to consult your own financial, tax, and legal advisors regarding your own individual situation. 

That’s it for today. Thanks for listening! My name is Ashley Micciche...and this is the Retirement Quick Tips podcast.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

It’s Sunday, which means...it’s recap time here on the Retirement Quick Tips Podcast

This week the theme was: 5 Lessons On Retirement From The Golden Girls

In case you missed any episodes, here’s what I covered in each episode this week:

• Ain’t Nothing Cheesecake and Conversation Can't Fix - discussing the importance of solid friendships
• Thinking Outside The Box To Live The Lifestyle You Desire in retirement
• Living The Single Life Is Likely b/c of death or divorce 
• Hobbies Are Important For Happiness In Retirement
• Don’t Get Paralyzed By Life

The most important takeaway from this week is: 

Tomorrow, come on back because we’re starting a brand new theme: Analyzing Your Tax Return Like A CPA. Now that tax season is behind us, most people just file away their tax return and move on. But if you do that, you could be missing some important opportunities to make better planning and investment decisions for your retirement.

So dig up a copy of your tax return from 2021, because next week, I’ll share with you a few key highlights from your tax return to pay attention to. Your tax return could point to tax-inefficient investing and missed opportunities, and we’ll cover those next week. 

Thank you so much for listening this week! If this podcast is valuable for you, please share the show with a friend, a neighbor, your brother, or co-worker who is getting close to retirement. Just go to your favorite podcasting app, hit the share icon, then text or email the show link to someone you know who is eyeing retirement. 

Thanks for sharing the love and spreading the word. I hope you have a blessed Sunday. My name is Ashley Micciche, this is the Retirement Quick Tips Podcast.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: 5 Lessons On Retirement From The Golden Girls

Today’s lesson from the golden girls is: Don’t Get Paralyzed By Life

In real life, Estelle Getty, who played my favorite and funniest character on the show, Sophia Patrillo, suffered from terrible stage fright. During the days they would tape the episodes, Estelle would often freeze on camera and mess up her lines. She even had some of her dialogue written down and taped to chairs and tables on the set. She was the least experienced actress of the four, and it intimidated her. In a 1988 interview she stated that working every week with talent like Arthur and White scared her out of her wits. She felt like a fraud and worried that the fans would “find out” that she wasn’t as good as her co-stars.

Irreversible decisions in retirement can be paralyzing. A decision to do nothing is still a decision. Estelle Getty pressed on despite her fears and no one watching knew what was really going on behind the scenes.  

Having a plan removes some of the scariness of the decision. Estelle Getty’s plan included taping lines to the backs of furniture on the set. It’s what allowed her to survive and not quit the show. 

Your plan might include deciding when you’ll retire, making sure your investment portfolio along with your other income sources can sustain you in retirement, calculating your retirement annual budget in advance, planning for other expenses like travel and the periodic car purchase or new roof. 

Deciding when you’ll take social security, updating your will, and researching and following through with other decisions that are relevant for you, like whether or not you’ll do Roth conversions in retirement. 

The point is a decision to do nothing is still a decision.Like Estelle Getty, doing something about it and making a plan will help you make the right decision more often and have more options and more control over the variety of decisions you’ll face as you approach and transition into retirement. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: 5 Lessons On Retirement From The Golden Girls

Today’s lesson from the golden girls is: Hobbies are important for happiness in retirement. The Golden Girls led very active retirements, and maintained fulfilling hobbies. 

They were always involved in charity events, especially Rose (Betty White’s character), who according to Golden Girls Wiki “Rose was arguably the most involved in charity work. She drove a bookmobile, was a candy striper at a hospital, and helped organize a charity talent show, among other things. She listed cheese making as a hobby on her resume, as well.”

Both Blache and Dorothy had part-time jobs. Dorothy worked as a tutor, using her former teaching skills in her part-time work, and Blacnhe worked at the museum.

All 4 golden girls led very active retirements, which is really important for longevity, mental fitness, and physical health in retirement, according to research. So we all can learn a little something from the Golden Girls. Because it was a show and not real life, your interests are likely to be more limited than theirs, but having at least a couple of hobbies, volunteering your time, and having at least one hobby or activity that you can share with friends is critical for a fulfilling and happy retirement. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: 5 Lessons On Retirement From The Golden Girls

Today’s lesson from the golden girls is: Living the single life is likely. All the Golden Girls were either widows or divorced and it’s likely that you may face the same situation in retirement. Would it shock you to know that The average age of widowhood is 59 years old, according to the U.S. Census Bureau, and many widows could go on to live another few decades after the death of their spouses. Many of you listening are older than 59, and living life in retirement that differs from our original plans is something that most people push out of their mind as soon as the thought bubbles up. 

In my own practice, I have many, many clients who are single in retirement because of a death of a spouse or a divorce. One of my favorite clients died a couple years ago. She lived into her 90s but was a widow for 40 years prior to her death. She managed just fine, but knowing how to manage the family finances without the help of your spouse is essential. 

The Golden Girls certainly had their struggles because they had to navigate their retirement years as single people, but it’s an important thing to plan for. If you’re married and your spouse died or became disabled today, would you be able to pick up the pieces and be okay financially? What would you need to do differently or what skills would you need to learn to be able to function better on your own? 

I know it’s tough to think about if you’re married, but it’s important. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance