The Retirement Show: Your Life, Your Money with Scott Sierens

Today, we're diving into the listener mailbag once again, to answer your questions on tax planning and strategies for the year ahead. As we approach the end of the year, it's crucial to get your financial ducks in a row so that you can keep more of your hard-earned money. Scott offers valuable insights on whether to file taxes jointly or separately, how IRMAA can affect your Medicare premiums, tax surprises that can be caused by receiving unexpected income, and more.

Here are the questions we'll tackle in today's show:

• Husband is 70, wife is 65- Is it okay to file separately so each one can do Roth Conversions before RMDs kick in?
• How do you feel about taking a lump sum out of a 457B account? Is there any drawback to this besides taking a big sum of money? Will we owe any more taxes?
• I received a big bonus this year. My company withholds for tax. I assume there is nothing else I need to do from a tax perspective?

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ

As we move into the fourth quarter of the year, let's take a little time to focus on year-end tax planning. We're opening up the listener mailbag and pulling out questions asking specifically about taxes and tax planning. We'll be taking strategies and opportunities discussed last episode and apply them to certain real-life situations.

No matter where you are today, use these questions today to see if you can take these strategies and utilize them in a similar situation to what we discuss. We'll cover different types of Roth accounts, the benefits of a Health Savings Account, and tax planning for large IRA and 401k savings.

Here are the three questions we'll tackle in this episode:

• How are the Roth IRA and Roth 403b different? Which is better: to max out your Roth 401(k) or Roth 403b?
• I'm 59 years old and plan to retire around Age 65 or 66. I make over $150,000 / year. My company offers a high deductible health plan and Health Savings Account. Should I consider switching over to this health plan? Are there any benefits since it will only be fore 6 or 7 years?
• I'm in my early 60s. I've got $2 million saved. $1.7 million in IRAs and 401ks and the rest in a brokerage account. How do I keep from giving a huge portion of it to Uncle Sam?

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ

As we move into the fourth quarter of the year, now is the time to be looking ahead and determining what year-end tax planning and retirement planning opportunities and strategies might be available to you. Evaluating where you are today and making the necessary changes can have a very positive impact on your financial position moving forward. Regardless of your situation, this episode will help you identify some areas that you should be discussing with your financial advisor before the year ends.

Key discussion points in this episode:

• The difference in tax planning and the tax preparation you do each year.
• How we produce tax projections and why that's a key part of tax planning.
• The six different ways you can maximize your retirement planning accounts.
• Should you consider a Roth conversion this year?
• The other items like charitable donations, tax withholdings, medical expenses, tax loss harvesting and more.

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ

In today's show, we're going to open up the listener mailbag and answer questions about pension selections, questions about the challenges you could face if there's an age gap between you and your spouse, and then discuss the hidden costs you might not be seeing in your retirement income.

Each of these questions we'll tackle today cover pretty common scenarios so you might find wondering about these down the road. Scott will provide some great thoughts and insight, recommendations, and strategies that could potentially be used in these situations. We always enjoy taking the strategies and tactics discussed on the podcast and apply them to some real life scenarios and that's exactly what we'll do today.

Key discussion points in this episode:

• Should I even bother taking the spousal continuation option for my wife to keep getting the monthly payment if she outlives me?
• My husband is 11 years old than me, and I probably have better genes than he does too, so it seems likely that I'll be a widow for a significant portion of my retirement years. What sort of financial planning challenges does this create for me?
• I need about $5,000 to live on each month in retirement, and my Social Security and pension will total about $5,300. Does this mean I'll be able to leave my entire 401k behind to my son?

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ

In today's episode, we delve into a critical aspect of retirement planning that can significantly impact your financial future – Required Minimum Distributions (RMDs). Whether you've stashed your savings in a 401(k), 403(b), 457, IRA, SEP IRA, or simple IRA, understanding RMDs is crucial, especially if you're approaching your seventies.

Join us as we discuss the "why" and "how much" of RMDs, ensuring you're well-prepared for this financial milestone. If you're not yet retired, we've got you covered too! In the latter part of the episode, we'll share valuable steps and strategies to help you proactively reduce the long-term effects of RMDs on your financial well-being.

Key discussion points in this episode:

• If you have savings in tax-deferred accounts such as 401(k), 403(b), 457, IRA, SEP IRA, or simple IRA, you are required to take RMDs once you reach your seventies
• RMDs exist because when you contributed to tax-deferred accounts, you received tax deductions. The IRS wants to collect the taxes you deferred, so they require you to start withdrawing from these accounts in your retirement years
• The age at which you must start taking RMDs depends on your date of birth
• RMDs are calculated based on your account balances and life expectancy tables published by the IRS. The amount you need to withdraw increases as you get older
• There are strategies to reduce the impact of RMDs, such as switching contributions to Roth accounts, performing Roth conversions, and managing asset allocation

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ

Are you expecting an inheritance, or planning to pass down assets to your loved ones? It's crucial to understand the potential tax implications that come with it. In this episode, we're diving deep into the world of inheritance taxes.

Key discussion points in this episode:

• If you inherit real estate, the property's value is adjusted to its current market value when you receive it. If you sell it immediately, you may not incur much tax, but holding onto it could lead to tax liability, especially if it appreciates.
• Inheriting a 401(k), IRA, or similar retirement account means you'll likely have to pay income tax on withdrawals.
• Explore the benefits and pitfalls of inheriting Roth IRAs, which can provide tax-free growth if managed correctly.
• Seek advice from financial and tax professionals to make informed decisions about inherited assets and tax planning, as tax laws can change.

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ

Many say that age is just a number, but when it comes to retirement planning, age means much more than that. Join us in this insightful episode as we delve into the world of financial milestones that can significantly impact your retirement planning. From age 50 to 75, we uncover the strategies, opportunities, and pitfalls tied to these pivotal years.

Learn why age isn't just a number when it comes to taxes, charitable giving, and required minimum distributions (RMDs), as Scott shares how you can strategically use these age milestones to optimize your retirement planning journey. From Social Security choices to Medicare considerations, we guide you through the intricate web of financial decisions, ensuring that every year counts towards a brighter and more secure retirement.

Here are a few milestones we discuss in this episode:

• At age 50 and over, individuals can contribute more money to their retirement plans such as 401(k), 403(b), and 457, with a $7,500 increase in contribution limits compared to those under 50.
• The "Rule of 55" allows penalty-free withdrawals from a 401(k) if you leave your job at age 55 or older.
• Age 62 is the earliest you can start claiming Social Security benefits, full retirement age varies based on birth year, and age 70 provides the maximum benefit.
• Turning 65 is an important age for considering Medicare enrollment.
• RMDs are mandatory withdrawals from retirement accounts like IRAs and 401(k)s. These distributions must begin at specific ages, depending on your birth year.

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

We're back with another mailbag episode today! Join us as we tackle a range of topics- from navigating investments during significant life changes to figuring out a retirement travel spending amount, this episode covers a lot of ground. Scott is here to answer your questions, so stick around to see what you can learn.

Here are the questions we'll answer on today's show:

• I have a lot of major life changes occurring in the next six months that I think will affect how I should be invested. Should I just park my money in cash until life settles down?
• How much is a reasonable amount to spend on travel in retirement?
• My mom died two years ago, and my three sisters and I inherited her house. I've always wanted to sell it, but they're worried about the tax implications of selling the house. How do I explain that it won't hurt us from a tax perspective?
• I've been told that I need to make sure I have a mortgage when I retire because that will be the only tax deduction I'll have at that point. I've been paying extra for my house to have it paid off by the time I retire. But maybe I should slow down on that plan?

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ

Recent headlines are buzzing with talk of inflation, recession, and their potential impact on your retirement plans. Should you be concerned? In this episode, Scott takes you through a comprehensive breakdown of these headlines and what they truly mean for your financial future.

By understanding how inflation, recession, and Social Security interplay, you can better navigate the complexities of retirement planning and enjoy financial confidence in your golden years. Join us to learn why Scott encourages listeners to focus on crafting a comprehensive retirement income strategy rather than getting caught up in sensational headlines.

Here's what we'll tackle in today's show:

• Understanding the fundamentals of inflation and its relationship with interest rates and the Federal Reserve.
• Gain insight into economic indicators that impact recession predictions and the overall health of the economy.
• Learn how Social Security cost-of-living adjustments are calculated and discover strategies to optimize your benefits.
• The importance of a well-rounded retirement strategy that considers market fluctuations, inflation, and your unique financial goals.

Links From Today's Show:

U.S. Inflation Rate

https://ycharts.com/indicators/us_inflation_rate#:~:text=US%20Inflation%20Rate%20is%20at,in%20price%20over%20a%20year

Effective Federal Funds Rate

https://ycharts.com/indicators/effective_federal_funds_rate

U.S. Unemployment Rate

https://ycharts.com/indicators/us_unemployment_rate

USA Today Article about Recession https://www.usatoday.com/story/money/2023/08/10/recession-or-soft-landing-2023/70555621007/

USA Today Article about SS https://www.usatoday.com/story/money/personalfinance/2023/08/10/2024-social-security-cola-estimate-unchanged/70565924007/

Scott recently came across an article that discussed 8 ways the richest Americans avoid paying taxes. While many might think that these strategies wouldn't apply to their financial situation, we're going to discuss how you can apply these tactics to potentially reduce your taxes. Stay tuned as Scott breaks down these 8 strategies!

Here are the 8 strategies that we'll discuss:

1. No Taxes on Unrealized Capital Gains: Both billionaires and regular investors with investment gains can utilize the strategy of not paying taxes on unrealized capital gains as long as they hold their assets without selling them.

2. Charitable Deductions: Philanthropy not only benefits causes you care about but also offers potential tax advantages through deductions on contributions.

3. Long-Term Capital Gains Rates: Discover the tax benefits of holding assets for over a year, leading to more favorable tax rates compared to ordinary income.

4. Roth IRAs: Understand the power of tax-free growth and withdrawals that Roth IRAs offer, and how they can be an excellent tool for long-term tax reduction.

5. Pass-Through Income: Learn how business owners and self-employed individuals can benefit from tax deductions on pass-through income, and why proper management matters.

6. Tax Breaks from Home Ownership: Explore the tax advantages available to homeowners, including mortgage interest and property tax deductions, provided they itemize their deductions.

7. Medical Expense Deductions: Consider the often-overlooked possibility of deducting medical expenses that exceed a certain percentage of your adjusted gross income, potentially resulting in tax savings.

8. Real Estate Investing Tax Breaks: Delve into the tax benefits of owning rental properties, including depreciation deductions, but also understand the complexities and potential implications when selling.

Links From Today's Show:

CTA: Tax Guide

https://lifemoneyshow.com/taxes/

Review of Article: Here are 8 Ways the Richest Americans Avoid Paying Taxes

-The Ascent

https://www.fool.com/the-ascent/taxes/articles/here-are-8-ways-the-richest-americans-avoid-paying-taxes/

Want to get in touch?

Web: https://sierensfinancialgroup.com/

Email: [email protected]

Phone: 847-235-6989

Read more and get additional financial resources here: http://lifemoneyshow.com

Check out our YouTube channel: https://www.youtube.com/channel/UCPhQ-u12d60Z0HNCwwVubdQ