Year-End Financial Moves That Matter: RMDs, Roths & Tax-Smart Strategies

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Welcome to Something More with Chris Boyd.

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Chris Boyd is a certified financial planner, practitioner,

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and senior vice president and financial advisor at

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Wealth Enhancement Group, one of the nation's largest

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registered investment advisors.

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We call it Something More because we'd like

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to talk not only about those important dollar

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and cents issues, but also the quality of

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life issues that make the money matters matter.

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Here he is, your fulfillment facilitator, your partner

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in prosperity, advising clients on Cape Cod and

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across the country.

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Here's your host, Jay Christopher Boyd.

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Thanks for being with us.

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I'm Chris Boyd.

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I'm here with Russ Ball.

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We are both of the AMR team at

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Wealth Enhancement and got a good show planned

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for you.

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We're going to talk about some year-end

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planning issues.

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It's that time of year, we're in the

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final quarter of the year, and you can't

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help but start thinking about the end of

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the year is approaching.

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Have I gotten everything, taken advantage of all

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the things that I can do?

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We're going to go through a little bit

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of a list of ideas for you to

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think about and help you plan for that,

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ranging from some income tax and income and

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tax strategies, maybe some thinking about capital gains

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and charitable giving.

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There's a whole range of things.

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Where should we begin, Russ?

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Well, I know one that's been on our

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team's mind a lot lately is RMDs.

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Yeah, definitely.

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This time of year, retirees or actually anyone

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who has either an IRA and then has

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reached 73 and older, or an inherited IRA

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where the original IRA owner was of an

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age that they had RMDs, you will also

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have to take a required distribution.

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This year is different from recent years where

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the IRS has been cutting some slack when

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it comes to this.

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I think they're trying to figure out their

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own rules on how all this is going

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to work out.

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Well, I think there's been a lot of

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confusion for sure about, on the one hand,

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the new rules from the SECURE Act where

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the stretch IRA was changed to a 10

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-year clock.

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Originally, people were thinking, well, I've got 10

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years.

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And then there was also some expectation, well,

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you might also have to take money out

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during those 10 years.

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Who's which?

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So if the person you inherited an IRA

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from, if they were of an age that

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they had yet to start their required distributions,

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their required beginning date, you don't have to

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take a distribution annually over that 10-year

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period.

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You can choose to take it if you

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want to.

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You can take a little bit each year.

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You can take a 10th.

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You can take it all in the first

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year, all in the last year or whatever,

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any combination.

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But if you receive that inherited IRA from

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the person who died and already started their

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required beginning date, required distributions, minimum distributions, then

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you too are expected to continue to take

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RMDs.

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Now, how it's calculated is different than what

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the person who died that you received the

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IRA from.

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So it's not exactly the same calculation.

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And it's not the same calculation you'd use

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for your own IRA when you reach an

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IRA, a required minimum distribution date.

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But there is a minimum amount that you

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have to take.

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And we could probably do a show on

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this alone, right?

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Yeah.

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But the essence of it is there's a

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table you look to based on the age

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you are, the year after the person died

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that you received this IRA from, you have

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to start taking distributions.

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And you look up on this table what

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the essentially life expectancy number would be.

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It's not the uniform table.

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This is the single life table in this

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instance.

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And then you take that number.

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That's the divisor.

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You take the balance from the prior year

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end, the age you'd be at the end

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of the year, and look at what the

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factor is.

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And you divide the balance by the factor.

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That's your RMD for this year.

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And every year after that, you subtract one

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from that life expectancy number.

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If that's not simple enough, there's a structure

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to it.

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There's calculators out there.

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If you work with an advisor, they'll help

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you to figure this out.

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But custodians will say, well, it's up to

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the individual to do the calculations.

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They might give you the ingredients of how

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to do it.

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But if you work with a good financial

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advisor, they'll help you.

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And they should know the rules.

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I spend a lot of time going to

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courses, the Ed Slot Program, and things like

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that.

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Make sure we're up to date on how

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these rules work and how to help people.

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Because these are complicated.

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It's complex, the idea of how to navigate

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this.

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But in any case, if you have an

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IRA and you're over 73 today, you'll have

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a distribution requirement placed upon you as well.

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That one is calculated differently than what I

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just described.

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Great.

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Same idea.

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But instead of a single life table, you

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use a uniform table.

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The uniform table presumes that you're married, presumes

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that you're married to someone 10 years younger.

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It's OK if you're not married or if

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you're not married to someone 10 years younger.

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If you're married to someone more than 10

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years younger, there's a different way to calculate

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it.

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But for most people, the uniform table covers

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the range of possibilities.

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And that gives you the best calculation for

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how to do this.

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And you basically have a minimum amount you

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have to take out.

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It starts out a little less than 4

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% per year.

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But as you get older, it goes up.

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We were talking to someone in their 90s.

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It's around 10%.

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So it starts off pretty modest but grows

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over time as a percentage you have to

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withdraw.

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So this is the time of year.

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If you haven't dealt with it, now's the

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time.

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Some people like to do it monthly.

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But a lot of people tend to wait

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till year end to say, oh, I'll take

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the money when I have to, thinking they'll

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keep the money invested for the bulk of

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the year.

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This year, that would have been a good

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choice.

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In a year when the market goes down,

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it's not.

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So who knows what's going to happen when

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you start the year.

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But we do find that it used to

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be that people would put this off till

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December.

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And we really encourage people to think about

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doing this a little earlier.

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What's been happening, we've noticed over the last

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few years, is custodians pretty much universally have

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this challenge where there's a glut of people

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taking their distributions at year end.

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And if you're going to take your distribution,

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don't put it off till December.

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Because there's going to be a lot of

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people pulling their money in December.

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And the custodians end up getting to a

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point where they say, well, best efforts.

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We'll try to get to it.

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But there's so much coming in that there's

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a lot of year end activity and things.

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So it's the final quarter.

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It's a good time to do it.

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October, November, let's get to it.

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Time to take those distributions.

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Yeah.

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And a couple points on top of that.

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So if you have IRAs that are, if

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you're working with us, you might have IRAs

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somewhere else, a bank, sometimes I've seen CD

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IRAs, that sort of thing.

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The RMD applies to those as well.

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So sometimes your advisor might not know you

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have an IRA somewhere else that also has

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an RMD requirement.

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Yeah.

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And the way the IRS looks at your

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IRAs, it doesn't matter if you have five

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of them at different institutions or one of

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them at a single place, they think of

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them all as one IRA.

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That is to say, if you said, I'm

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going to take all of my calculated distribution

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requirements in those five different accounts, you can

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take it all out of one account, that

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one IRA account, that's fine.

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It all is considered your IRA.

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If you prefer to take the appropriate amount

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from each account, that's fine too.

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Ultimately, as long as you meet that number,

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I will put a caveat to that.

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Don't confuse that notion that all those accounts

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are connected in a sense with the idea

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that if you have a 401k or 403b

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or something like a work plan, that has

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its own distribution requirement.

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And each of those might have to be

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addressed separately.

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So you don't want to say, oh, I

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took it out of my IRA.

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When you have a 401k, you'll need to

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take the 401k distribution from the 401k and

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the IRA distribution from the IRA.

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So this is pretty easy, right?

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Easy stuff so far, right, Russ?

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It's pretty heavy duty.

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Oh my gosh.

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There's all these rules.

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I will add one more thing going back

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to the inherited IRAs as well.

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You might've mentioned this, but that only applies

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to inherited IRAs that are from someone other

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than a spouse.

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Oh, that's a great point.

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A spouse, that's a really great point.

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Those circumstances have unique treatment and you don't

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necessarily have, you have to make some decisions

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about how you want to handle it.

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But again, there's questions of, are there age

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discrepancies?

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Usually what happens is someone just rolls that

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into their own account and then it's up

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to what their age situation is.

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Sometimes though you have someone who's like an

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older spouse who dies, but a younger spouse

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who's not yet eligible to withdraw from their

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IRA, but they might like to have access

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to that.

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So there's rules that you got to pay

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attention to to say, what's the right strategy

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in this circumstance?

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That's a great observation.

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So don't want to have people worried just

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because they have an inherited IRA that they

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need to take a distribution necessarily.

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It's a 10-year rule and those specific

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rules are for inherited IRAs from someone other

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than a spouse.

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Good point.

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I want to add another complicating factor.

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Sorry.

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It's like, how many of these do we

276
00:10:50,900 --> 00:10:51,180
have?

277
00:10:51,800 --> 00:10:57,020
But we talk often about the virtues of

278
00:10:57,020 --> 00:11:02,540
a qualified charitable distribution, which is a means

279
00:11:02,540 --> 00:11:07,460
of withdrawing from your IRA to give directly

280
00:11:07,460 --> 00:11:09,500
to a charitable intention.

281
00:11:11,200 --> 00:11:14,080
And it can meet some of your required

282
00:11:14,080 --> 00:11:15,940
distribution figures.

283
00:11:16,360 --> 00:11:19,020
So let's say for example, you're over 70

284
00:11:19,020 --> 00:11:21,160
and a half, whether you have an inherited

285
00:11:21,160 --> 00:11:24,880
IRA or an IRA, you can draw off

286
00:11:24,880 --> 00:11:29,720
money from your IRA and have it go

287
00:11:29,720 --> 00:11:35,540
directly to a charitable intention and a charitable

288
00:11:35,540 --> 00:11:42,560
entity of your choosing, church, alma mater, nonprofit

289
00:11:42,560 --> 00:11:43,880
of some kind.

290
00:11:44,840 --> 00:11:47,260
And you could say, let's say you had

291
00:11:47,260 --> 00:11:50,620
a $10,000 required distribution this year.

292
00:11:51,520 --> 00:11:53,300
You could opt to say, I want to

293
00:11:53,300 --> 00:11:55,240
give $5,000 to charity.

294
00:11:55,360 --> 00:11:57,360
I'm going to give it 2x, whatever it

295
00:11:57,360 --> 00:11:57,540
is.

296
00:11:58,320 --> 00:12:00,180
And you opted to say, that's going to

297
00:12:00,180 --> 00:12:01,540
go from your IRA.

298
00:12:01,760 --> 00:12:02,420
You fill out a form.

299
00:12:02,600 --> 00:12:04,320
It goes from your IRA directly to the

300
00:12:04,320 --> 00:12:04,620
charity.

301
00:12:05,460 --> 00:12:08,780
And now your required minimum distribution that you

302
00:12:08,780 --> 00:12:10,920
have to pay tax on is diminished.

303
00:12:11,480 --> 00:12:14,500
Now, you have to do this before you

304
00:12:14,500 --> 00:12:16,900
start withdrawing money from your IRA.

305
00:12:17,160 --> 00:12:20,060
If you take the $10,000, you still

306
00:12:20,060 --> 00:12:23,920
could do a qualified charitable distribution, but it

307
00:12:23,920 --> 00:12:25,700
won't diminish how much you have to take

308
00:12:25,700 --> 00:12:27,880
out of your IRA because you've already done

309
00:12:27,880 --> 00:12:28,180
it.

310
00:12:28,600 --> 00:12:31,000
But if you do the qualified charitable distribution

311
00:12:31,000 --> 00:12:34,380
before, this $5,000 in my $10,000

312
00:12:34,380 --> 00:12:36,700
example, now you only have to take out

313
00:12:36,700 --> 00:12:37,460
$5,000.

314
00:12:37,700 --> 00:12:39,720
You just saved yourself from having $5,000

315
00:12:39,720 --> 00:12:40,440
of income.

316
00:12:41,440 --> 00:12:43,460
You don't get any kind of deduction, but

317
00:12:43,460 --> 00:12:46,000
the money that was all subject to tax

318
00:12:46,000 --> 00:12:49,760
goes to the charity without any tax, and

319
00:12:49,760 --> 00:12:51,440
you didn't have to take it out and

320
00:12:51,440 --> 00:12:52,440
pay a tax on it.

321
00:12:53,180 --> 00:12:57,380
So it helps your tax planning in that

322
00:12:57,380 --> 00:12:57,740
regard.

323
00:12:58,660 --> 00:13:00,500
But that's something you want to do again,

324
00:13:01,040 --> 00:13:05,360
like ASAP at this point, because again, it

325
00:13:05,360 --> 00:13:09,280
has to process before the end of the

326
00:13:09,280 --> 00:13:11,520
year, and it's going to get busy.

327
00:13:12,120 --> 00:13:14,320
So don't delay when it comes to year

328
00:13:14,320 --> 00:13:16,000
-end planning for that kind of thing, if

329
00:13:16,000 --> 00:13:16,820
you have that in mind.

330
00:13:18,140 --> 00:13:21,080
On that topic, I've talked to family members

331
00:13:21,080 --> 00:13:21,940
about that as an idea.

332
00:13:22,100 --> 00:13:23,340
And they're like, well, no, I like to

333
00:13:23,340 --> 00:13:26,900
do my monthly contributions or weekly, whatever it

334
00:13:26,900 --> 00:13:28,540
might be to a church or something like

335
00:13:28,540 --> 00:13:28,740
that.

336
00:13:29,720 --> 00:13:31,260
But then it's like, all right, well, how

337
00:13:31,260 --> 00:13:33,060
much do you give in a year to

338
00:13:33,060 --> 00:13:34,320
that charity?

339
00:13:34,640 --> 00:13:35,660
Oh, it's X amount.

340
00:13:35,880 --> 00:13:36,020
All right.

341
00:13:36,140 --> 00:13:38,820
So let's do that all in one go

342
00:13:38,820 --> 00:13:41,560
as the qualified charitable distribution, and then both

343
00:13:41,560 --> 00:13:44,600
the charity and you benefit from that.

344
00:13:44,960 --> 00:13:45,060
Yeah.

345
00:13:45,100 --> 00:13:47,460
And there's some tax savings for you, because

346
00:13:47,460 --> 00:13:51,980
most people don't do a lot of itemized

347
00:13:51,980 --> 00:13:52,600
deductions.

348
00:13:54,160 --> 00:13:58,660
And again, you might get some of that

349
00:13:58,660 --> 00:14:01,500
money back when you get the deduction, but

350
00:14:01,500 --> 00:14:04,900
all of that money isn't taxed when you

351
00:14:04,900 --> 00:14:05,940
do it this other way.

352
00:14:06,140 --> 00:14:08,320
So it's, I think, a better approach.

353
00:14:09,080 --> 00:14:11,620
That's one of those things that changed this

354
00:14:11,620 --> 00:14:13,340
year when it came to the qualified charitable

355
00:14:13,340 --> 00:14:15,120
distributions, if you've ever done that in the

356
00:14:15,120 --> 00:14:18,040
past, is that it used to not be

357
00:14:18,040 --> 00:14:20,620
identified anywhere on your 1099.

358
00:14:21,460 --> 00:14:23,380
This year, they did change some of the

359
00:14:23,380 --> 00:14:25,640
rules that that will be made note of

360
00:14:25,640 --> 00:14:27,340
on your 1099 going forward.

361
00:14:27,340 --> 00:14:28,460
All right.

362
00:14:28,500 --> 00:14:29,720
What are we thinking about if we have

363
00:14:29,720 --> 00:14:30,940
someone come in at the end of the

364
00:14:30,940 --> 00:14:31,200
year?

365
00:14:31,780 --> 00:14:34,160
Another thing that's a big deal for people

366
00:14:34,160 --> 00:14:35,700
to be thinking about this time of year

367
00:14:35,700 --> 00:14:36,660
is capital gains.

368
00:14:37,280 --> 00:14:39,000
They're trying to get a handle on how

369
00:14:39,000 --> 00:14:41,260
much capital gain am I dealing with?

370
00:14:41,760 --> 00:14:44,100
Is there anything I can do for harvesting

371
00:14:44,100 --> 00:14:47,740
losses to mitigate some of that capital gains

372
00:14:47,740 --> 00:14:48,240
exposure?

373
00:14:49,420 --> 00:14:52,000
Are there funds that you might need to

374
00:14:52,000 --> 00:14:55,960
plan for that could have embedded capital gains

375
00:14:55,960 --> 00:14:59,740
that they will distribute to you as a

376
00:14:59,740 --> 00:15:00,840
fund shareholder?

377
00:15:02,160 --> 00:15:04,220
All of these are variables that are worth

378
00:15:04,220 --> 00:15:05,980
taking a few minutes to give some thought

379
00:15:05,980 --> 00:15:09,320
to and evaluate if there's anything that's a

380
00:15:09,320 --> 00:15:10,480
change that you're going to do.

381
00:15:11,100 --> 00:15:12,420
Is it a change you want to do

382
00:15:12,420 --> 00:15:14,380
now, or is it a change that you

383
00:15:14,380 --> 00:15:16,440
can, for example, if you're adding money into

384
00:15:16,440 --> 00:15:19,760
stock, sometimes this time of year, we try

385
00:15:19,760 --> 00:15:23,580
to be careful about not buying into capital

386
00:15:23,580 --> 00:15:24,680
gains in a fund.

387
00:15:25,420 --> 00:15:28,600
Mutual funds are notorious for capital gains distributions.

388
00:15:30,400 --> 00:15:33,400
If you can, that's an example of something

389
00:15:33,400 --> 00:15:35,480
to try to avoid.

390
00:15:35,720 --> 00:15:37,800
Now, that's a big reason why when we

391
00:15:37,800 --> 00:15:42,340
use funds, we try to use more exchange

392
00:15:42,340 --> 00:15:46,400
-traded funds because they are better at navigating

393
00:15:46,400 --> 00:15:50,040
these capital gains distributions than mutual funds tend

394
00:15:50,040 --> 00:15:50,440
to be.

395
00:15:50,700 --> 00:15:53,200
Let's not say we don't use mutual funds

396
00:15:53,200 --> 00:15:56,120
in our portfolios, but when it comes to

397
00:15:56,120 --> 00:15:58,320
this issue, we try to be careful about

398
00:15:58,320 --> 00:16:00,580
what we'd use.

399
00:16:00,980 --> 00:16:02,140
This time of year is a good time

400
00:16:02,140 --> 00:16:04,900
of year to be mindful of those possibilities.

401
00:16:07,140 --> 00:16:11,140
I want to talk about income tax deferral

402
00:16:11,140 --> 00:16:15,100
through work plans and making sure you've maxed

403
00:16:15,100 --> 00:16:17,120
out your plan or done whatever you can

404
00:16:17,120 --> 00:16:17,840
do in your plan.

405
00:16:18,160 --> 00:16:18,340
Yeah.

406
00:16:18,480 --> 00:16:19,780
It's a good time of year to check

407
00:16:19,780 --> 00:16:22,660
out how much you've contributed to your work

408
00:16:22,660 --> 00:16:26,980
plan or to your Roth IRA, your traditional

409
00:16:26,980 --> 00:16:30,460
IRA, see where you're at, and try to

410
00:16:30,460 --> 00:16:32,160
maximize that before the end of the year.

411
00:16:33,180 --> 00:16:34,820
Those numbers change.

412
00:16:35,400 --> 00:16:37,480
Those contribution limits change every so often.

413
00:16:38,900 --> 00:16:43,500
For IRAs, for those under 50, it's $7

414
00:16:43,500 --> 00:16:46,120
,000 for a traditional IRA and a Roth

415
00:16:46,120 --> 00:16:46,380
IRA.

416
00:16:47,660 --> 00:16:50,480
For a 401k, it's a little bit more

417
00:16:50,480 --> 00:16:50,980
complicated.

418
00:16:51,860 --> 00:17:01,020
Another complication, but for 401ks, it's $23

419
00:17:01,020 --> 00:17:03,940
,500, I believe, for people under.

420
00:17:04,560 --> 00:17:08,119
Yeah, $23,500 is the maximum for people

421
00:17:08,119 --> 00:17:09,000
under 50.

422
00:17:09,819 --> 00:17:12,319
For those over 50, it goes up to

423
00:17:12,319 --> 00:17:14,940
$31,000 as the maximum contribution for a

424
00:17:14,940 --> 00:17:16,240
401k or 403b.

425
00:17:16,680 --> 00:17:19,440
Then there's this new rule for those between

426
00:17:19,440 --> 00:17:22,640
the 60 and 63 where there's this super

427
00:17:22,640 --> 00:17:23,660
catch-up contribution.

428
00:17:24,079 --> 00:17:27,099
Just within that window, people who are under

429
00:17:27,099 --> 00:17:31,920
401k can contribute up to $34,750 per

430
00:17:31,920 --> 00:17:32,240
person.

431
00:17:32,720 --> 00:17:35,360
Just within that window, that's the highest contribution

432
00:17:35,360 --> 00:17:37,280
that is allowed for a 401k.

433
00:17:37,680 --> 00:17:39,140
Again, these are rules that get a little

434
00:17:39,140 --> 00:17:42,080
convoluted and they change from one year to

435
00:17:42,080 --> 00:17:42,560
the next.

436
00:17:43,160 --> 00:17:45,040
Don't hesitate to reach out to your financial

437
00:17:45,040 --> 00:17:45,580
advisor.

438
00:17:45,800 --> 00:17:48,080
Perhaps if you don't have an advisor, you

439
00:17:48,080 --> 00:17:49,640
can certainly connect with us.

440
00:17:50,340 --> 00:17:52,400
We'll help you navigate some of that.

441
00:17:52,500 --> 00:17:54,320
There are some useful tools.

442
00:17:54,480 --> 00:17:55,580
Russ, I'm just going to borrow this.

443
00:17:56,000 --> 00:17:59,980
We got our handy-dandy resources that have,

444
00:18:00,280 --> 00:18:01,420
I don't know if I have that upside

445
00:18:01,420 --> 00:18:05,860
down there, all kinds of details where I

446
00:18:05,860 --> 00:18:09,160
call it my cheat sheet because it has

447
00:18:09,160 --> 00:18:11,220
all the numbers right at your fingertips.

448
00:18:12,040 --> 00:18:13,960
You don't have to remember every aspect of

449
00:18:13,960 --> 00:18:14,540
it offhand.

450
00:18:14,700 --> 00:18:16,980
But if you're dealing with some of this,

451
00:18:18,100 --> 00:18:20,400
am I eligible to participate in an IRA

452
00:18:20,400 --> 00:18:22,060
with a deduction?

453
00:18:22,580 --> 00:18:25,300
Am I eligible to contribute to a Roth

454
00:18:25,300 --> 00:18:25,640
IRA?

455
00:18:26,520 --> 00:18:27,840
Did I make too much?

456
00:18:28,200 --> 00:18:29,640
One of the things we haven't talked about,

457
00:18:29,760 --> 00:18:33,620
Russ, is the net investment income tax.

458
00:18:34,440 --> 00:18:37,060
There are some thresholds for income that can

459
00:18:37,060 --> 00:18:40,380
push you into having an additional 3.8

460
00:18:40,380 --> 00:18:44,880
% tax rate on certain kinds of circumstances.

461
00:18:45,780 --> 00:18:47,760
Do you want to check on that?

462
00:18:47,880 --> 00:18:48,120
Yeah.

463
00:18:48,900 --> 00:18:51,920
Basically, if you make over $200,000 as

464
00:18:51,920 --> 00:18:55,980
an individual or $250,000 as a married

465
00:18:55,980 --> 00:19:00,940
couple filing jointly, there's this additional tax.

466
00:19:01,220 --> 00:19:05,020
You pay your income tax, then your state

467
00:19:05,020 --> 00:19:05,760
income tax.

468
00:19:05,760 --> 00:19:07,960
Then on top of that, there's this net

469
00:19:07,960 --> 00:19:13,880
investment income tax, which is 3.8%. It's

470
00:19:13,880 --> 00:19:18,940
calculated based on what the interest income is.

471
00:19:19,100 --> 00:19:20,180
Yeah, your investment income.

472
00:19:20,320 --> 00:19:23,380
That can be including capital gains and such.

473
00:19:23,480 --> 00:19:26,960
Capital gains, interest, dividends, that was all included

474
00:19:26,960 --> 00:19:27,300
in that.

475
00:19:27,480 --> 00:19:31,620
So those categories of investment income or of

476
00:19:31,620 --> 00:19:33,840
one type or another, there might be an

477
00:19:33,840 --> 00:19:37,600
additional 3.8% hit on that if

478
00:19:37,600 --> 00:19:40,420
you exceed a certain income threshold, as Russ

479
00:19:40,420 --> 00:19:40,860
was saying.

480
00:19:41,080 --> 00:19:43,700
So that's another reason why you may want

481
00:19:43,700 --> 00:19:46,180
to be trying to max out your retirement

482
00:19:46,180 --> 00:19:49,300
plan or contributing to an IRA.

483
00:19:50,300 --> 00:19:53,420
Your HSA, if you are eligible at work

484
00:19:53,420 --> 00:19:57,100
for an HSA contribution, do that.

485
00:19:57,280 --> 00:19:57,640
Why not?

486
00:19:57,780 --> 00:19:59,240
It goes in tax-free.

487
00:20:00,380 --> 00:20:04,620
It doesn't pay taxes while it's in the

488
00:20:04,620 --> 00:20:05,100
HSA.

489
00:20:05,240 --> 00:20:07,100
If you take it out for healthcare expenses,

490
00:20:07,440 --> 00:20:08,480
you don't pay tax.

491
00:20:11,660 --> 00:20:14,700
That's even better than a Roth IRA, because

492
00:20:14,700 --> 00:20:16,860
it's not taxed on the front end.

493
00:20:18,740 --> 00:20:20,440
Take advantage of things like that.

494
00:20:20,440 --> 00:20:22,160
So there's a lot of variables that we

495
00:20:22,160 --> 00:20:24,700
can go into and different rules for how

496
00:20:24,700 --> 00:20:25,860
does a simple IRA work?

497
00:20:26,000 --> 00:20:27,000
What's the number for them?

498
00:20:27,580 --> 00:20:29,360
But anyway, so depending on what you have,

499
00:20:29,660 --> 00:20:31,400
there's things to be considered.

500
00:20:31,640 --> 00:20:31,880
All right.

501
00:20:31,940 --> 00:20:35,280
So you talked about the 62, and there's

502
00:20:35,280 --> 00:20:36,520
all that complexity.

503
00:20:36,740 --> 00:20:37,820
Did we talk about that or not?

504
00:20:37,920 --> 00:20:38,760
For the super catch-up?

505
00:20:38,860 --> 00:20:39,120
Yeah.

506
00:20:40,340 --> 00:20:42,120
So those rules are new.

507
00:20:42,240 --> 00:20:44,700
And man, that's just another number that gets

508
00:20:44,700 --> 00:20:45,580
even more confusing.

509
00:20:45,800 --> 00:20:48,420
But don't forget if you fall into that

510
00:20:48,420 --> 00:20:52,000
age range, there's opportunity there to do a

511
00:20:52,000 --> 00:20:52,480
little bit more.

512
00:20:52,700 --> 00:20:53,660
What are the ages again?

513
00:20:53,920 --> 00:20:54,920
60 to 63.

514
00:20:55,360 --> 00:20:55,760
63.

515
00:20:56,300 --> 00:21:01,060
Another change that this year with the extension

516
00:21:01,060 --> 00:21:03,560
of the Tax Cut and Jobs Act into

517
00:21:03,560 --> 00:21:08,420
the One Beautiful Bill Act, there's the issue

518
00:21:08,420 --> 00:21:10,220
of the SALT tax treatment.

519
00:21:10,940 --> 00:21:13,460
And that could affect your tax numbers a

520
00:21:13,460 --> 00:21:13,880
little bit.

521
00:21:14,660 --> 00:21:16,080
I don't know if that requires any year

522
00:21:16,080 --> 00:21:19,080
-end planning necessarily, but it does change some

523
00:21:19,080 --> 00:21:19,880
of your numbers.

524
00:21:21,180 --> 00:21:25,040
And you might have more capability if you

525
00:21:25,040 --> 00:21:28,460
have mortgage interest taxes on the state and

526
00:21:28,460 --> 00:21:29,240
local level.

527
00:21:29,820 --> 00:21:31,900
Depending on how you're paying your property taxes,

528
00:21:32,460 --> 00:21:32,560
right?

529
00:21:32,740 --> 00:21:36,040
So if you decide to pay, sometimes you

530
00:21:36,040 --> 00:21:39,800
get charged in January of following year.

531
00:21:40,640 --> 00:21:43,480
So depending on how you pay and when

532
00:21:43,480 --> 00:21:45,360
you pay, you could decide, I want to

533
00:21:45,360 --> 00:21:46,760
include those this year.

534
00:21:46,840 --> 00:21:49,020
If I'm going to itemize, then have those

535
00:21:49,020 --> 00:21:53,080
be part of the SALT's deduction up to

536
00:21:53,080 --> 00:21:54,340
$40,000 this year.

537
00:21:54,520 --> 00:21:54,980
$40,000.

538
00:21:55,060 --> 00:21:56,740
That's a big difference from the $10,000

539
00:21:56,740 --> 00:21:58,180
that was previously the case.

540
00:21:58,480 --> 00:21:59,960
So that could make a difference.

541
00:22:00,500 --> 00:22:00,800
Yeah.

542
00:22:02,500 --> 00:22:06,640
What about this whole thing with the Social

543
00:22:06,640 --> 00:22:07,140
Security?

544
00:22:07,600 --> 00:22:10,920
There was this talk in the campaign that

545
00:22:10,920 --> 00:22:14,460
Social Security would be tax-free.

546
00:22:15,340 --> 00:22:17,300
Well, it didn't work out exactly that way,

547
00:22:18,060 --> 00:22:20,540
but you talked a little bit about this,

548
00:22:20,660 --> 00:22:24,060
but maybe for those seniors to reiterate some

549
00:22:24,060 --> 00:22:24,360
of this.

550
00:22:24,360 --> 00:22:27,660
Another big change is the adjustments to the

551
00:22:27,660 --> 00:22:28,420
standard deduction.

552
00:22:30,060 --> 00:22:32,560
So it's especially high.

553
00:22:32,760 --> 00:22:34,180
So it was already higher than it had

554
00:22:34,180 --> 00:22:34,480
been.

555
00:22:35,180 --> 00:22:35,320
Yeah.

556
00:22:35,420 --> 00:22:36,420
So what is it?

557
00:22:36,480 --> 00:22:37,780
$15,000 now?

558
00:22:37,980 --> 00:22:38,420
Yeah.

559
00:22:38,660 --> 00:22:41,560
So the standard deduction is up to $15

560
00:22:41,560 --> 00:22:41,960
,000.

561
00:22:43,160 --> 00:22:44,180
Not nothing.

562
00:22:44,300 --> 00:22:44,680
That's good.

563
00:22:44,780 --> 00:22:46,740
So your first $15,000, you get that

564
00:22:46,740 --> 00:22:47,140
deduction.

565
00:22:47,460 --> 00:22:49,540
So it's actually $15,750.

566
00:22:50,180 --> 00:22:51,180
Oh, that's what it went up to?

567
00:22:51,300 --> 00:22:51,460
Yeah.

568
00:22:51,480 --> 00:22:51,680
Yeah.

569
00:22:51,680 --> 00:22:52,040
Yeah.

570
00:22:52,040 --> 00:22:52,240
Okay.

571
00:22:53,360 --> 00:22:55,120
So that's for an individual.

572
00:22:55,680 --> 00:22:57,500
And that's for an individual.

573
00:22:57,760 --> 00:22:59,840
So you can essentially double that for a

574
00:22:59,840 --> 00:23:00,180
couple.

575
00:23:00,920 --> 00:23:03,960
But if you're over a certain age, you

576
00:23:03,960 --> 00:23:04,940
get a little more.

577
00:23:05,880 --> 00:23:09,120
And if you're over another age, you get

578
00:23:09,120 --> 00:23:11,160
this whole, at least for the next few

579
00:23:11,160 --> 00:23:13,380
years, some additional.

580
00:23:13,760 --> 00:23:15,300
So how's that all come together?

581
00:23:15,300 --> 00:23:19,200
So already, if you were over 65, there's

582
00:23:19,200 --> 00:23:22,220
an additional $1,600 that gets added to

583
00:23:22,220 --> 00:23:23,420
the standard deduction.

584
00:23:23,980 --> 00:23:27,200
So if you're married, that adds up to

585
00:23:27,200 --> 00:23:29,480
$33,100 as the standard deduction.

586
00:23:29,620 --> 00:23:31,880
If you're over 65, just as things were.

587
00:23:32,280 --> 00:23:34,160
Before you even got to this new thing,

588
00:23:34,940 --> 00:23:37,940
which is temporary, but who knows, maybe it'll

589
00:23:37,940 --> 00:23:39,220
get extended after that.

590
00:23:39,420 --> 00:23:39,520
Yeah.

591
00:23:39,520 --> 00:23:42,320
And this is sort of the workaround for

592
00:23:42,320 --> 00:23:44,660
the social security issue.

593
00:23:45,300 --> 00:23:49,660
To change the social security taxation required a

594
00:23:49,660 --> 00:23:51,460
much more engaged...

595
00:23:52,840 --> 00:23:55,540
It needed more involvement to change the Social

596
00:23:55,540 --> 00:23:57,140
Security Act or something.

597
00:23:57,860 --> 00:24:00,700
And it required a different majority or something

598
00:24:00,700 --> 00:24:02,920
for the way the Congress could deal with

599
00:24:02,920 --> 00:24:03,040
it.

600
00:24:03,180 --> 00:24:05,620
So this was their workaround, that it didn't

601
00:24:05,620 --> 00:24:07,480
require as many votes to be able to

602
00:24:07,480 --> 00:24:07,960
do this.

603
00:24:08,440 --> 00:24:11,560
So if you're over 65 now, between now

604
00:24:11,560 --> 00:24:12,040
and I believe...

605
00:24:13,500 --> 00:24:14,380
Oh, what is it?

606
00:24:14,800 --> 00:24:15,120
2020.

607
00:24:15,660 --> 00:24:18,180
I think it's three this year and the

608
00:24:18,180 --> 00:24:18,820
next three years.

609
00:24:19,040 --> 00:24:19,140
Okay.

610
00:24:19,140 --> 00:24:19,460
Is that what it is?

611
00:24:19,540 --> 00:24:20,040
Something like that?

612
00:24:20,060 --> 00:24:20,520
Yeah, I think that's right.

613
00:24:20,680 --> 00:24:21,520
It's 2028.

614
00:24:21,920 --> 00:24:24,920
At least for the time being, for those

615
00:24:24,920 --> 00:24:28,300
over 65, it's a $6,000 addition to

616
00:24:28,300 --> 00:24:33,260
the standard deduction for individuals and $12,000

617
00:24:33,260 --> 00:24:36,340
for couples who are both over 65.

618
00:24:36,560 --> 00:24:38,760
Now, if you're married and one person is

619
00:24:38,760 --> 00:24:40,460
over 65, you get the $6,000.

620
00:24:40,600 --> 00:24:41,520
Yeah, there you go.

621
00:24:41,800 --> 00:24:44,360
But assuming you're both over 65, I mean...

622
00:24:44,360 --> 00:24:47,260
It goes up to $46,700 as the

623
00:24:47,260 --> 00:24:49,040
standard deduction for those over 65.

624
00:24:49,260 --> 00:24:49,360
Wow.

625
00:24:49,360 --> 00:24:50,300
So that's huge.

626
00:24:50,420 --> 00:24:50,560
Yeah.

627
00:24:51,040 --> 00:24:51,200
Yeah.

628
00:24:52,300 --> 00:24:54,660
So these are things that might affect whether

629
00:24:54,660 --> 00:24:56,980
you actually even have a tax in that

630
00:24:56,980 --> 00:24:57,700
case, right?

631
00:24:57,700 --> 00:24:58,540
Mm-hmm.

632
00:24:59,220 --> 00:24:59,960
All right.

633
00:25:00,060 --> 00:25:02,460
So there's a number of good tidbits as

634
00:25:02,460 --> 00:25:04,240
we think about year-end planning.

635
00:25:04,540 --> 00:25:06,700
What about some other considerations?

636
00:25:08,240 --> 00:25:10,440
This time of year, a lot of times

637
00:25:10,440 --> 00:25:12,920
people think about doing a Roth conversion.

638
00:25:13,880 --> 00:25:16,100
And we talk about this quite a bit

639
00:25:16,100 --> 00:25:18,680
to say, well, let's look at your financial

640
00:25:18,680 --> 00:25:19,220
plan.

641
00:25:19,440 --> 00:25:22,480
And what we find oftentimes, particularly for people

642
00:25:23,260 --> 00:25:27,620
who are near retirement, looking to forecast into

643
00:25:27,620 --> 00:25:28,540
retirement.

644
00:25:28,620 --> 00:25:30,000
We just had this the other day, right?

645
00:25:30,460 --> 00:25:34,720
While they're working, they have a 22%

646
00:25:34,720 --> 00:25:36,560
or a 24% tax bracket.

647
00:25:37,060 --> 00:25:41,040
But when they retire, that tax bracket drops

648
00:25:41,040 --> 00:25:44,560
dramatically, at least until they turn on Social

649
00:25:44,560 --> 00:25:47,000
Security and their RMDs kick in.

650
00:25:48,560 --> 00:25:51,060
Now, so they've got a window where they

651
00:25:51,060 --> 00:25:54,500
might have this opportunity to do some Roth

652
00:25:54,500 --> 00:25:55,100
conversions.

653
00:25:56,140 --> 00:25:59,220
Really, I mean, again, do you think taxes

654
00:25:59,220 --> 00:26:00,760
are going to be lower than they are

655
00:26:00,760 --> 00:26:01,060
today?

656
00:26:01,440 --> 00:26:04,060
I think most people would agree, probably not.

657
00:26:04,640 --> 00:26:08,740
The tax code was permanently changed with the

658
00:26:09,240 --> 00:26:10,660
One Big Beautiful Bill Act.

659
00:26:10,880 --> 00:26:13,240
But you and I both know that nothing

660
00:26:13,240 --> 00:26:15,980
is permanent when it comes to taxation, right?

661
00:26:16,140 --> 00:26:22,960
So with deficits and debts growing, maybe there's

662
00:26:22,960 --> 00:26:26,180
a little less deficit from some cutting that's

663
00:26:26,180 --> 00:26:26,600
been done.

664
00:26:26,800 --> 00:26:29,680
But ultimately, we're looking at some pretty big

665
00:26:30,420 --> 00:26:34,060
outspending what's coming in for revenues annually.

666
00:26:34,400 --> 00:26:36,660
So if that's going to be the case,

667
00:26:36,800 --> 00:26:39,340
you got to assume at some point Social

668
00:26:39,340 --> 00:26:41,780
Security is going to run short, have a

669
00:26:41,780 --> 00:26:43,100
shortfall in 2032.

670
00:26:43,100 --> 00:26:45,160
Medicare, similar story.

671
00:26:45,860 --> 00:26:48,400
There's going to be a revision at some

672
00:26:48,400 --> 00:26:48,900
point in time.

673
00:26:49,200 --> 00:26:51,980
This is a window for people to think

674
00:26:51,980 --> 00:26:55,440
about doing some Roth conversion, pay the tax

675
00:26:55,440 --> 00:26:58,640
now, choose how much, what bracket you want

676
00:26:58,640 --> 00:27:00,600
to do while these brackets are low, while

677
00:27:00,600 --> 00:27:03,000
you've got all these great deductions and so

678
00:27:03,000 --> 00:27:03,320
forth.

679
00:27:03,840 --> 00:27:06,440
Use this as a window and an opportunity

680
00:27:06,440 --> 00:27:10,400
to decide how much tax you're to pay

681
00:27:10,400 --> 00:27:13,600
now versus later when the tax rates might

682
00:27:13,600 --> 00:27:16,040
be higher, or you might be pushed into

683
00:27:16,040 --> 00:27:19,380
a higher bracket because RMDs, which get bigger

684
00:27:19,380 --> 00:27:24,920
each year as a percentage, or because if

685
00:27:24,920 --> 00:27:27,740
you're married, but maybe at some point you'll

686
00:27:27,740 --> 00:27:31,860
be single because of death, widowed, widower, whatever

687
00:27:31,860 --> 00:27:35,220
the right terminology, it could be a situation

688
00:27:35,220 --> 00:27:37,320
where your taxes go up dramatically.

689
00:27:38,360 --> 00:27:42,140
Use this as a window to get some

690
00:27:42,140 --> 00:27:44,780
of that IRA money for people, especially people

691
00:27:44,780 --> 00:27:48,360
who have such an abundance, a concentration of

692
00:27:48,360 --> 00:27:49,940
wealth in their IRAs.

693
00:27:50,500 --> 00:27:52,400
Use this as a window to do some

694
00:27:52,400 --> 00:27:52,800
converting.

695
00:27:53,600 --> 00:27:54,620
Trey Lockerbie And we've been hearing more and

696
00:27:54,620 --> 00:27:57,020
more of that with some legacy planning issues

697
00:27:57,020 --> 00:27:57,500
as well.

698
00:27:58,240 --> 00:28:01,080
I want to leave this money for my

699
00:28:01,080 --> 00:28:02,700
kids, but I don't want them to have

700
00:28:02,700 --> 00:28:05,900
to pay all this tax after 10 years

701
00:28:05,900 --> 00:28:06,740
while they're still working.

702
00:28:08,940 --> 00:28:11,280
Roth IRAs don't have those same restrictions as

703
00:28:11,280 --> 00:28:13,000
those other inherited IRAs you were talking about

704
00:28:13,000 --> 00:28:13,380
earlier.

705
00:28:15,100 --> 00:28:16,740
They still have to be taken out within

706
00:28:16,740 --> 00:28:19,680
10 years, but there's no taxation when the

707
00:28:19,680 --> 00:28:21,460
income comes out or when the funds come

708
00:28:21,460 --> 00:28:21,680
out.

709
00:28:23,360 --> 00:28:26,480
Yeah, and Roth conversions can be confusing.

710
00:28:26,480 --> 00:28:30,660
So if that's something that you're considering, definitely

711
00:28:30,660 --> 00:28:32,820
have us help you model that and see

712
00:28:32,820 --> 00:28:35,860
what an optimal amount might be to start

713
00:28:35,860 --> 00:28:36,160
with.

714
00:28:36,340 --> 00:28:38,900
Trey Lockerbie Other things for consideration, do you

715
00:28:38,900 --> 00:28:41,580
do charitable giving regularly?

716
00:28:41,940 --> 00:28:44,560
Aside from whether or not you're eligible for

717
00:28:44,560 --> 00:28:47,780
the qualified charitable distribution, maybe you want to

718
00:28:47,780 --> 00:28:50,740
do some bundling of your charitable giving.

719
00:28:51,080 --> 00:28:53,300
Again, there's tax-smart ways to do this.

720
00:28:53,360 --> 00:28:56,420
If you have appreciated assets, those are an

721
00:28:56,420 --> 00:28:59,520
attractive resource to do some of that giving.

722
00:29:00,060 --> 00:29:02,820
But bundle some of your charitable giving.

723
00:29:02,920 --> 00:29:06,180
Instead of doing so much per year, maybe

724
00:29:06,180 --> 00:29:07,940
do a bunch of it in one year

725
00:29:07,940 --> 00:29:12,780
so that you get the benefit of the

726
00:29:12,780 --> 00:29:14,740
tax instead of a standard deduction.

727
00:29:15,020 --> 00:29:20,400
Maybe you can use a itemized deduction by

728
00:29:20,400 --> 00:29:23,200
doing some of this planning for when you

729
00:29:23,200 --> 00:29:24,160
do your giving.

730
00:29:24,780 --> 00:29:28,240
If you don't necessarily want to give it

731
00:29:28,240 --> 00:29:30,540
all to the charitable intention right away, you

732
00:29:30,540 --> 00:29:32,460
can always look at a donor advised fund

733
00:29:32,460 --> 00:29:35,540
as a tool, a technique to maybe get

734
00:29:35,540 --> 00:29:39,200
the donation and the charitable deduction now, but

735
00:29:39,200 --> 00:29:40,720
you can dole it out to the charitable

736
00:29:40,720 --> 00:29:42,980
intentions over time if you didn't want to

737
00:29:42,980 --> 00:29:44,240
do it all at once.

738
00:29:46,680 --> 00:29:47,400
Let's see.

739
00:29:47,480 --> 00:29:48,360
What are a few other things?

740
00:29:48,520 --> 00:29:49,700
Some regular stuff.

741
00:29:49,900 --> 00:29:52,660
If you're a business owner, you might have

742
00:29:52,660 --> 00:29:54,340
the ability to say, I'm going to defer

743
00:29:54,340 --> 00:29:56,940
that income until next year.

744
00:29:57,720 --> 00:30:00,600
Maybe hold on to that invoice or whatever

745
00:30:00,600 --> 00:30:01,100
it might be.

746
00:30:01,160 --> 00:30:02,220
You might be thinking that way.

747
00:30:02,560 --> 00:30:05,260
Maybe you're moving some expenses up to try

748
00:30:05,260 --> 00:30:07,880
to get your income lower this year and

749
00:30:07,880 --> 00:30:10,520
push income next year and expenses this year.

750
00:30:11,020 --> 00:30:13,340
Business owners often do that kind of thing.

751
00:30:14,320 --> 00:30:17,320
We talked about Roth conversions, Russ, but we

752
00:30:17,320 --> 00:30:19,760
didn't talk about mega backdoor.

753
00:30:20,760 --> 00:30:24,760
There are some techniques for people who have

754
00:30:24,760 --> 00:30:28,960
retirement plans at work that could allow them

755
00:30:28,960 --> 00:30:33,700
to do excess contributions above what's considered to

756
00:30:33,700 --> 00:30:34,700
be the threshold.

757
00:30:35,560 --> 00:30:38,400
Not every plan allows for this and it's

758
00:30:38,400 --> 00:30:40,360
a little bit convoluted, certainly more than we're

759
00:30:40,360 --> 00:30:42,140
going to get into right now, but a

760
00:30:42,140 --> 00:30:45,500
mega backdoor, what do they call that for

761
00:30:45,500 --> 00:30:50,300
a Roth contribution for a qualified plan?

762
00:30:50,480 --> 00:30:51,960
That's the mega backdoor.

763
00:30:52,340 --> 00:30:56,540
Then of course there's the traditional IRA contribution,

764
00:30:57,400 --> 00:30:59,520
do a backdoor Roth contribution.

765
00:31:00,000 --> 00:31:01,600
That again, specific rules.

766
00:31:01,900 --> 00:31:03,660
If you have an IRA with a balance,

767
00:31:03,960 --> 00:31:05,260
not a good idea.

768
00:31:06,260 --> 00:31:10,040
Talk to a professional, make sure they understand

769
00:31:10,040 --> 00:31:12,780
these rules and can help you navigate what's

770
00:31:12,780 --> 00:31:13,860
a good idea, what's not.

771
00:31:14,340 --> 00:31:15,740
These are the times of year when you

772
00:31:15,740 --> 00:31:17,540
think about some of those kinds of techniques.

773
00:31:20,160 --> 00:31:24,640
Incidentally, we have a great tool, some software

774
00:31:25,250 --> 00:31:28,580
that does use artificial intelligence to take a

775
00:31:28,580 --> 00:31:32,400
look at your tax return and evaluate are

776
00:31:32,400 --> 00:31:37,820
there observations for maybe ideas for where to

777
00:31:37,820 --> 00:31:39,720
do something a little differently that might help

778
00:31:39,720 --> 00:31:40,580
your tax picture.

779
00:31:41,240 --> 00:31:42,860
If you need a little bit of a

780
00:31:42,860 --> 00:31:45,540
second set of eyes on that, let us

781
00:31:45,540 --> 00:31:47,120
take a look at your tax return and

782
00:31:47,120 --> 00:31:49,580
put it through some software and see if

783
00:31:49,580 --> 00:31:51,860
we can identify any opportunities there.

784
00:31:52,700 --> 00:31:54,480
This is often a time of year when

785
00:31:54,480 --> 00:31:57,020
people start thinking, gee, I might want somebody

786
00:31:57,020 --> 00:31:58,960
different for my taxes.

787
00:31:58,960 --> 00:32:01,540
If you're thinking you need a new tax

788
00:32:01,540 --> 00:32:04,300
advisor, talk to them now.

789
00:32:04,940 --> 00:32:06,520
Whoever that's going to be, have them take

790
00:32:06,520 --> 00:32:11,180
a look at this 2024 filing, the one

791
00:32:11,180 --> 00:32:13,120
you just did this year, have them take

792
00:32:13,120 --> 00:32:13,720
a look at that.

793
00:32:14,040 --> 00:32:16,260
See if there's any observations, anything that they

794
00:32:16,260 --> 00:32:17,400
might've had to do differently.

795
00:32:18,220 --> 00:32:20,580
Make sure that you've had the conversation before

796
00:32:20,580 --> 00:32:22,860
the end of the year while there's time

797
00:32:22,860 --> 00:32:26,820
to either file an estimated tax or whatever

798
00:32:26,820 --> 00:32:27,540
it might be.

799
00:32:28,140 --> 00:32:29,160
Keep that in mind.

800
00:32:29,300 --> 00:32:31,460
If you were told on your tax return

801
00:32:31,460 --> 00:32:34,580
you're going to be doing estimated taxes, don't

802
00:32:34,580 --> 00:32:35,380
forget to do it.

803
00:32:35,640 --> 00:32:36,680
It's not too late.

804
00:32:37,420 --> 00:32:38,860
That's a good year-end thing to be

805
00:32:38,860 --> 00:32:39,240
talking about.

806
00:32:39,660 --> 00:32:40,260
I don't know, Russ.

807
00:32:40,300 --> 00:32:41,580
I think we covered a lot, but I'm

808
00:32:41,580 --> 00:32:43,140
sure there's other things we should be talking

809
00:32:43,140 --> 00:32:43,460
about.

810
00:32:44,240 --> 00:32:45,660
What didn't we get to?

811
00:32:46,760 --> 00:32:48,960
We talked a little bit about capital gains.

812
00:32:48,960 --> 00:32:50,920
We didn't talk a lot about tax loss

813
00:32:50,920 --> 00:32:51,360
harvesting.

814
00:32:53,280 --> 00:32:55,180
Good time of year to take a look

815
00:32:55,180 --> 00:32:58,880
at your portfolios, in your taxable accounts.

816
00:32:59,320 --> 00:33:01,460
It's been a little difficult because markets have

817
00:33:01,460 --> 00:33:05,940
just gone up, but sometimes there are holdings.

818
00:33:05,940 --> 00:33:07,560
Sometimes there are specific holdings.

819
00:33:07,660 --> 00:33:09,720
If you've got a lot of individual stocks

820
00:33:09,720 --> 00:33:13,060
that have lost value over the course of

821
00:33:13,060 --> 00:33:16,980
the year, good opportunity to get some tax

822
00:33:16,980 --> 00:33:21,880
alpha there by selling those losers and having

823
00:33:21,880 --> 00:33:23,560
that count against your income taxes.

824
00:33:23,920 --> 00:33:24,120
Yeah.

825
00:33:24,240 --> 00:33:28,240
Up to $3,000 off your income by

826
00:33:28,240 --> 00:33:28,680
doing so.

827
00:33:28,860 --> 00:33:32,440
More importantly, help you with either future gains

828
00:33:32,440 --> 00:33:33,880
or this year's gains.

829
00:33:34,120 --> 00:33:34,280
Yeah.

830
00:33:34,320 --> 00:33:36,720
That's just scratching the surface of the benefits

831
00:33:36,720 --> 00:33:38,180
of the tax loss harvesting.

832
00:33:39,060 --> 00:33:42,480
The other piece in a different angle is

833
00:33:42,480 --> 00:33:47,040
the Medicare and Medicare Advantage open enrollment period

834
00:33:47,040 --> 00:33:48,340
is beginning soon.

835
00:33:48,820 --> 00:33:49,400
Didn't think of that.

836
00:33:49,580 --> 00:33:49,740
Yeah.

837
00:33:49,740 --> 00:33:50,740
That's a good point.

838
00:33:51,040 --> 00:33:53,060
We're going to be hit over the head

839
00:33:53,060 --> 00:33:55,760
with all those advertisements the next month or

840
00:33:55,760 --> 00:33:58,100
month and a half or whatever it is.

841
00:33:58,780 --> 00:33:58,980
Yeah.

842
00:33:59,000 --> 00:34:02,280
Good point that if you are on Medicare,

843
00:34:02,900 --> 00:34:05,320
you have a window annually where you can

844
00:34:05,320 --> 00:34:08,280
choose to revisit, do I have the right

845
00:34:08,280 --> 00:34:08,699
plan?

846
00:34:10,880 --> 00:34:13,840
There are different approaches to that and we've

847
00:34:13,840 --> 00:34:15,739
done shows on this in the past, but

848
00:34:15,739 --> 00:34:19,800
I do think there is a virtue if

849
00:34:19,800 --> 00:34:23,900
your health has changed or you're having changing

850
00:34:23,900 --> 00:34:27,840
health needs, it's worth giving thought to what's

851
00:34:27,840 --> 00:34:31,940
the right plan for me given changing health

852
00:34:31,940 --> 00:34:32,320
dynamics.

853
00:34:32,560 --> 00:34:34,480
Oftentimes people don't want to make changes when

854
00:34:34,480 --> 00:34:38,280
they're going through difficulties of one health issue

855
00:34:38,280 --> 00:34:42,139
or another, but there can be dramatically different

856
00:34:43,360 --> 00:34:45,280
benefits between different plans.

857
00:34:45,860 --> 00:34:49,060
It could be worth looking at if you've

858
00:34:49,060 --> 00:34:50,500
got the right plan at a given moment

859
00:34:50,500 --> 00:34:51,020
in time.

860
00:34:51,719 --> 00:34:51,840
Yeah.

861
00:34:52,120 --> 00:34:53,340
Just on top of that, just to make

862
00:34:53,340 --> 00:34:55,360
sure that if you have a Medicare Advantage

863
00:34:55,360 --> 00:34:57,780
plan, that your doctors that you usually see

864
00:34:57,780 --> 00:34:59,500
are still covered under that plan.

865
00:35:00,420 --> 00:35:02,920
Make sure your prescription drugs are covered under

866
00:35:02,920 --> 00:35:05,340
your Part D supplemental plan.

867
00:35:05,840 --> 00:35:07,500
A lot of things you can look at

868
00:35:07,500 --> 00:35:10,200
this time of year and make changes if

869
00:35:10,200 --> 00:35:10,700
necessary.

870
00:35:11,240 --> 00:35:12,060
Not just yet.

871
00:35:12,220 --> 00:35:14,400
I think it's the 15th of October that

872
00:35:14,400 --> 00:35:17,200
it begins, but it stretches until December.

873
00:35:17,820 --> 00:35:22,780
Another thing to be thinking about is, this

874
00:35:22,780 --> 00:35:24,880
is probably not for everybody, but certain times

875
00:35:24,880 --> 00:35:29,020
people have stock options available through work and

876
00:35:29,020 --> 00:35:32,560
those can often create instances where you get

877
00:35:32,560 --> 00:35:36,780
pushed not to a higher bracket necessarily just

878
00:35:36,780 --> 00:35:39,520
because of that, but because of the alternative

879
00:35:39,520 --> 00:35:40,460
minimum tax.

880
00:35:40,580 --> 00:35:42,500
We don't talk about that as much as

881
00:35:42,500 --> 00:35:45,180
we used to because it's not been as

882
00:35:45,180 --> 00:35:48,600
prevalent with, I think it was the Secure

883
00:35:48,600 --> 00:35:51,480
Act, but I've lost track of which tax

884
00:35:51,480 --> 00:35:53,720
legislation helped to make that a little less

885
00:35:53,720 --> 00:35:58,520
prominent, but that's a common instance where people

886
00:35:58,520 --> 00:36:01,160
do get hit by the alternative minimum tax.

887
00:36:01,760 --> 00:36:04,160
If you have those kinds of circumstances, pay

888
00:36:04,160 --> 00:36:07,960
attention to the calculation, have your tax advisor

889
00:36:07,960 --> 00:36:10,580
do a run-through of your tax picture.

890
00:36:10,980 --> 00:36:12,980
One other thing that I think this time

891
00:36:12,980 --> 00:36:15,020
of year lends itself to for year-end

892
00:36:15,020 --> 00:36:17,260
planning is, it's a good time of year

893
00:36:17,260 --> 00:36:20,900
to revisit things like, who are my beneficiaries?

894
00:36:22,580 --> 00:36:24,540
Have you updated your beneficiaries?

895
00:36:24,800 --> 00:36:25,600
We run into this.

896
00:36:26,340 --> 00:36:32,060
It's incredibly surprising how often clients don't update

897
00:36:32,060 --> 00:36:35,760
their beneficiaries and they have an ex-spouse

898
00:36:35,760 --> 00:36:39,920
or a parent who is long deceased or

899
00:36:39,920 --> 00:36:41,120
whatever it might be.

900
00:36:41,220 --> 00:36:45,520
It may not always reflect who you want.

901
00:36:45,860 --> 00:36:49,200
We had a client in recently whose spouse

902
00:36:49,200 --> 00:36:51,400
had passed, a child had passed.

903
00:36:52,040 --> 00:36:55,140
Sometimes you need these things updated because of

904
00:36:55,140 --> 00:36:58,740
life's circumstances and so there's a need to

905
00:36:58,740 --> 00:36:59,420
revise them.

906
00:36:59,680 --> 00:37:03,580
Additionally, when it comes to your estate plan,

907
00:37:04,240 --> 00:37:09,140
that's another circumstance that has changing dynamics from

908
00:37:09,140 --> 00:37:11,260
different life circumstances.

909
00:37:11,520 --> 00:37:12,160
Things evolve.

910
00:37:13,220 --> 00:37:15,740
It's probably a good idea annually to at

911
00:37:15,740 --> 00:37:17,700
least take a step back and look at,

912
00:37:17,960 --> 00:37:19,980
what is my estate plan right now?

913
00:37:20,080 --> 00:37:21,740
Is there anything I'd want to do differently

914
00:37:22,140 --> 00:37:24,700
and have an understanding of what that is?

915
00:37:25,060 --> 00:37:26,780
We've covered a lot here, Russ.

916
00:37:26,880 --> 00:37:30,960
I'm sure we scratched the surface, but I

917
00:37:30,960 --> 00:37:32,860
think we did a pretty healthy scratch on

918
00:37:32,860 --> 00:37:33,080
that.

919
00:37:34,520 --> 00:37:38,380
As you think about these issues, obviously, we're

920
00:37:38,380 --> 00:37:40,080
here to help if you need a little

921
00:37:40,080 --> 00:37:43,040
helping hand in thinking about your financial planning,

922
00:37:43,160 --> 00:37:44,360
your portfolio management.

923
00:37:44,900 --> 00:37:47,120
Certainly, it integrates with your tax planning and

924
00:37:47,120 --> 00:37:48,800
all the rest of these kinds of issues.

925
00:37:49,220 --> 00:37:50,880
Don't hesitate to reach out to us.

926
00:37:50,920 --> 00:37:52,160
We're here to be a resource.

927
00:37:53,320 --> 00:37:54,840
If we can be a help, we'd love

928
00:37:54,840 --> 00:37:55,840
to serve you.

929
00:37:56,220 --> 00:37:58,480
With that in mind, until next time, everybody,

930
00:37:58,960 --> 00:38:00,280
keep striving for something more.

931
00:38:01,400 --> 00:38:03,560
Thank you for listening to Something More with

932
00:38:03,560 --> 00:38:04,260
Chris Boyd.

933
00:38:04,580 --> 00:38:06,740
Call us for help, whether it's for financial

934
00:38:06,740 --> 00:38:10,660
planning or portfolio management, insurance concerns, or those

935
00:38:10,660 --> 00:38:12,700
quality of life issues that make the money

936
00:38:12,700 --> 00:38:13,800
matters matter.

937
00:38:14,180 --> 00:38:17,460
Whatever's on your mind, visit us at somethingmorewithchrisboyd

938
00:38:17,460 --> 00:38:20,640
.com or call us toll-free at 866

939
00:38:20,640 --> 00:38:26,160
-771-8901 or send us your questions to

940
00:38:26,160 --> 00:38:30,140
amr-info at wealthenhancement.com.

941
00:38:30,540 --> 00:38:32,240
You're listening to Something More with Chris Boyd

942
00:38:32,240 --> 00:38:33,080
Financial Talk Show.

943
00:38:33,240 --> 00:38:35,700
Wealth Enhancement Advisory Services and Jay Christopher Boyd

944
00:38:35,700 --> 00:38:38,000
provide investment advice on an individual basis to

945
00:38:38,000 --> 00:38:38,580
clients only.

946
00:38:38,720 --> 00:38:40,700
Proper advice depends on a complete analysis of

947
00:38:40,700 --> 00:38:41,860
all facts and circumstances.

948
00:38:42,120 --> 00:38:43,980
The information given on this program is general

949
00:38:43,980 --> 00:38:46,020
financial comments and cannot be relied upon as

950
00:38:46,020 --> 00:38:47,580
pertaining to your specific situation.

951
00:38:47,760 --> 00:38:49,760
Wealth Enhancement Group cannot guarantee that using the

952
00:38:49,760 --> 00:38:51,780
information from this show will generate profits or

953
00:38:51,780 --> 00:38:52,900
ensure freedom from loss.

954
00:38:53,100 --> 00:38:55,260
Listeners should consult their own financial advisors or

955
00:38:55,260 --> 00:38:57,340
conduct their own due diligence before making any

956
00:38:57,340 --> 00:38:58,100
financial decisions.