How Taxes Work in Retirement

2.14.25: Audio automatically transcribed by Sonix

2.14.25: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Retirement Results, the national radio show and podcast for listeners like you who want to protect and grow their hard earned money. In a world filled with so much uncertainty and financial risk, we seek to cut through the noise and build successful plans for hard working Americans on their road to financial freedom. Retirement results is powered by Active Wealth Management, a team of fiduciary advisors who always place your needs first. And now your host. He's a registered social security analyst, member of the Forbes Finance Council, and author of multiple books on retirement planning. Here is your chief financial adviser? Ford. Stokes.

Speaker3:
Welcome to retirement. Results. Result. Drivers. I'm George stokes, your chief financial advisor. Got Sam Davis here with us on the mic. And Sam is our senior financial advisor and co-host to retirement results. Sam, go ahead and say hello to the folks.

Speaker4:
Welcome to the weekend result drivers. And welcome back to retirement Results and Ford. I feel like every episode of retirement results is a special episode, but this one is extra special because we have added a new audience in the Atlanta area. Our good friends over at North Georgia's News Talk. This is a station we've been wanting to bring our message and our mission to those listeners for many years now, and we're happy to be joining you on Sundays from 7 to 8 a.m.. And just a reminder to everybody that our show is also available wherever you listen to listen to podcasts. So if you don't wake up so early on Sundays and you want to catch us in North Georgia, you can find retirement results wherever you listen to podcasts before it. I'm just so excited that we're going to be sharing so much more valuable information with so many more new listeners.

Speaker3:
Yeah, Sam, first of all, I just want to say thank you for your work and helping us get the show on Wdan. We're going to be on Am 550, and then 102.9 FM will be on the FM dial. That's for all you folks that are listening up north in northern Georgia, and you may have a tougher time getting the Am 920. The answer? Uh, signal. Uh, go ahead and make sure you you reach out and also just try to turn on your radio from 7 to 8 a.m. on Sundays and we'll be on de un. So we're super excited about that. And again, Sam, thanks for all your hard work to getting that done. Work with Lori Thompson and the team over there at one. Shout out to Lori and everyone over at WGN. Thanks so much for making us part of your radio station family. We take it very seriously and we won't let you down. We are here to educate pre-retirees and retirees on how to invest successfully, and also to retire successfully, how to really get that retirement plan going, how to build that retirement income gap analysis. You understand how much you are spending and the risk you're taking with your current investments, and also how to generate income during retirement. I think you're going to really like that part of this show for all of you new listeners out there. Also, you may have heard me mention result drivers at the beginning of this show. Result drivers are folks who listen to retirement results. They listen to this show, and they're looking to build a tax efficient, fee efficient and market efficient portfolio for them and their family.

Speaker3:
Also, we help folks try to build a vision for their retirement. We retirement. We help them answer the questions of what are you doing during retirement? Who are you with during retirement and how are you going to fund your retirement? All of that is here on retirement results. Each and every week we record new shows or we'll air our new shows every single week. We don't do, you know, old best of shows here at retirement results? If we can help it, we want to do everything we can to bring you new information, new audio. Also, we're all super excited about what's going on with Doge. Now, the Department of Government Efficiency, what Elon Musk is doing, what President Trump is doing. Um, also want to wish everybody, you know, a happy day after or two days after Valentine's Day. Hope you guys enjoyed Valentine's Day with your loved ones. Um, I think that's really an important time. And, um, hope you guys enjoy your entire weekend too. But now I want to get started on this week. So again, welcome to all the Wdan listeners. We appreciate you and thank you to all the Am 920 the answer listeners who've made us the number one listen to radio show on the weekends, on for over five years on Am 920 answer in Atlanta. That's allowed us to be able to get on Wdan as well. So we've got more Atlanta area coverage and we're covering up north. If you've got other stations that you want us to get aired on, just let us know. You can, uh, send me an email at forward at Com or Sam at Com.

Speaker3:
You can email Sam. He's usually better at getting us on radio stations than I am because he's got the experience. But go ahead and reach out and send us an email at Sam. Com and we'll get we'll try to reach out to those stations. Here's the overall overview of the entire show. Today we're going to talk about how retirement income is taxed, how to build a tax efficient plan for your future. Also we're going to talk a little bit about Social Security and your taxes and some interesting stats that have come out this past week from the Department of Government Efficiency and and what that means to you as a Social Security recipient. It's likely going to be that Social Security's going to be around, because I think they're going to get rid of the fraud, waste and abuse. So there'll be more money to fund Social Security. So that's great news. Um, also, we're going to answer the question of do you have a retirement tax bomb? Your retirement nest egg isn't what you necessarily think, because unfortunately, you likely have a partner that you don't want in your retirement accounts with the IRS. And then lastly, we're going to talk about everything you need to know about Roth conversions, how to implement a strategic Roth ladder conversion over a 5 to 10 year period. Hopefully, we're going to be able to help you get your Roth ladder conversion done before you turn 73 years old. And we'll kind of go from there. And now, Sam, go ahead and share our financial wisdom. Quote of the week.

Speaker5:
And now for some financial wisdom. It's time for the quote of the week.

Speaker4:
All right. This is a segment we love to do to kick off almost every episode of retirement results. And this quote of the week comes from former economist Brilliant mind Milton Friedman. And Milton Friedman once said, the burden of government is not measured by how much it taxes, but by how much it spends. And there's a lot going on right now forward in the new administration to reduce how much the government is spending, which should have an effect of keeping taxes at a reasonable level for all the hardworking Americans out there.

Speaker3:
I'm so glad to hear they're identifying problems and they're identifying fraud, waste and abuse. I know we've heard that phrase a lot, but it's true. Elon Musk and the Department of Government Efficiency this past week shared that there's over $50 billion of actual payments going to folks who do not have a Social Security number a year. And that is now going to stop. And that is incredibly successful and helpful for. Keeping Social Security around. That's a big deal. Uh, also, it was just amazing that they found $2.7 trillion in total payments from Social Security, Medicare and Medicaid that have gone overseas over decades. That should not have happened. And that stopping that waste, fraud and abuse. And that is likely fraud, in my opinion. That is going to be huge for Social Security over time. It's going to allow more money to be there. So that's the good news we want to share today is that, hey, it looks like you're going to be okay. And Social Security's going to be around longer than 2033 or 2035, according to SSA, gov and the Congressional Budget Office, as I've said previously, some of because by the time they updated next April, it is likely going to show that they're going to have a really great surplus going in. So we're pretty excited about that. When they cut all this needless waste, fraud and abuse in the spending. So we got like three minutes left in this segment. We're going to talk a little bit about how your retirement income is taxed. Um, here's the big idea folks. Retirement doesn't mean you stop paying taxes. It actually is far from it. Your tax situation could become more complex as different sources of income are taxed in different ways. Understanding the tax treatment of each income stream is crucial for managing your retirement budget and maximizing what you keep. Now, Sam, after the break, I want you to go ahead and share a breakdown of common sources of retirement income and their tax implications. Can you just quickly go over what do people get when they meet with us?

Speaker4:
Yeah, well, I do want to mention that to all the all the new listeners who are catching us right now on WD win in North Georgia and Gainesville. We've got a few different offices around the Atlanta area, and the closest one to you and all of our new listeners is actually our home office in Alpharetta. So I would encourage you to visit active Wealth.com. Take a look at where our offices are at. Find the one most convenient for you. Because, Ford, we do complimentary retirement consultations for any of our listeners who reach out and give us a call at (770) 685-1777. We've been doing this for listeners for over five years now and, and really help people get the information they need to make the smartest decisions they can about their money, because at the end of the day, the the money you've been working hard to save is your money. And our job as fiduciaries is to give you all the information so you can make the best decision for you and your family. So just a few of the things we provide people a 100% complimentary portfolio analysis, a Social Security maximization report for those looking to save on future taxes. We're going to talk a lot about that today. We'll do Roth ladder conversion plans, and there's so much more that we're able to provide people for it. In all, it's a $2,500 value that we offer completely for free. All you have to do is give us a call or visit our website, schedule that consultation at the office and the time that's right for you and Ford. And I look forward to meeting with you. But yeah, when we come back, we're going to go through a breakdown of those common retirement income sources so you can start to learn a little bit more about what taxes are going to be like for you in retirement. You're listening to retirement results. We'll be right back.

Speaker2:
Retirement results. We'll be right back to learn more and schedule your complimentary retirement consultation, visit retirement Results.com.

Speaker6:
When the night has come. And the land is dark and the moon is the only light. We'll see.

Speaker2:
You're listening to retirement results. And now back to the show.

Speaker3:
And welcome back to retirement results. Result drivers I'm Ford Stokes, your chief financial advisor. Got Sam Davis here with us. Who's our co-host and senior financial advisor. We're also here welcoming our listeners to Wdan on Am 550 and 102.9. And also big shout out to our Am nine twin of the answer listeners on in Atlanta. Thanks for making us the number one listen to radio show on the weekends on Am nine two and the answer. And because you guys have done a great job listening to our show and interacting with us, and also many of you calling us to get your free financial plan and portfolio analysis that Sam mentioned right before the break Ache. We've been able to get on and expand our listening audience a little bit further north. Um, kind of Gainesville and everything north right around Lake Lanier. So hope you guys and gals enjoy this. Especially shout out to all the bass fishermen that are out there getting ready to, um, go on bass fishing tournaments or just getting ready to go out and hit the lake and and fish a little bit. Um, also just shout out to folks that are headed to church. Um, all around Atlanta. Um, hope you guys travel safe and enjoy church. And we just really appreciate you as a listener. So what we were talking about is how your retirement income is taxed. And, Sam, you're going to give us a breakdown of common sources of retirement income and their tax implications. Go ahead. Fire away.

Speaker4:
Yeah. So first, one of the most common sources of retirement income. A lot of you listening may already be receiving this. Or maybe you've got it coming up and you've got you've got some questions and that's Social Security. So depending on your income level, actually up to 85% of your benefits may be taxable. That doesn't mean you're going to lose 85%. That means you may be taxed on up to 85% of what you receive. So if Social Security is your only source of retirement income, you may not owe taxes. But additional earnings from things like pensions, personal pensions, investments, part time work that could push you into a taxable territory with Social Security. And for this is frustrating for a lot of people to hear and realize, because we all paid taxes to, you know, paying into Social Security over the years and now you're finally getting that benefit out and it's getting taxed again.

Speaker3:
Yeah. In 1983 is when they first started taxing Social Security. Um, tip O'Neill kind of forced Ronald Reagan's hand to be able to get that through, um, the budget for that year. And, um, I thought that was the wrong thing to do back then, although I was very young. Um, but and it still continues today. And we're getting taxed on the money we've already put in. Um, it's it's ridiculous. And hopefully, um, that stuff will get fixed. I think President Trump and Caroline Leavitt, who is the press secretary, she has said and, and quoted that, hey, you know what? We're going to get away. We're going to do away with taxes on tips. We're going to do away with, um, taxes on Social Security, which would be a huge fun thing for all retirees, because it would mean more money in your pocket to buy groceries, to travel, spend more time with family, things like that.

Speaker4:
All right. The next source of retirement income that we want to highlight is traditional IRA and 401 K withdrawals. So this could be a 401 K plan that you saved up for retirement in through your employer. It could be a traditional IRA that you set up for yourself, or a traditional IRA that was rolled over from what was previously a 401. But keep in mind, these are going to be fully taxable. As ordinary income. You're going to have required minimum distributions start at age 73. So once you reach that age you must withdraw and pay taxes on a portion of your savings each year. But because these are tax deferred accounts, the money went in without being taxed. So they're going to make sure it gets taxed. Coming out. And Ford I like to say, you know, I grew up in Kansas. I grew up in a family of farmers and agricultural folks. The government would much rather tax you on the harvest versus taxing you on the seed. And that's what's happening in this case.

Speaker3:
Amen. I mean, they'd love to tax you on the harvest for sure. Um, as a native Atlantan, I can tell you that they're definitely want to do that, too. Um, not just it's so cool that you're from Kansas. And, um, good luck to the Kansas Jayhawks. Also, for those of you who don't know, um, Sam actually had a little bit of a broadcasting career. Um, quite a quite a distinguished one, actually. And Sam was the play by play announcer for the Kansas Jayhawks baseball team and other sports while he was in college. I don't know what y'all were doing in college, but I wasn't doing something that important and that cool. So good on ya. Great job there, Sam. So on the traditional four and K and the IRA 400 3B4 57 Sep IRAs. Unfortunately, your partner in retirement is the IRS. They're not the kind of partner you want sitting there with their hand out. They want to get paid their money. And if you can delete the IRS from being your partner retirement, why wouldn't you do that? And we're going to go over kind of the best ways to do that. We're going to give you some really good tips on that. Um, Sam, let's go to the next common source of retirement income here.

Speaker4:
The next one we want to highlight is Roth IRA withdrawals and Ford. This is some good news. If you are pulling money out of your Roth IRA, that is going to be tax free as long as you've had the account for at least five years and you're over the age of 59.5. Also, Roth IRAs have no required required minimum distributions, so the government cannot tell you to take any money out. There would be no benefit because they've already received their taxes on that money. So Roth is an excellent tax free solution and a great way to pass assets to your beneficiaries. And I'll actually tell a little bit of a story. My wife's father passed away way too young and she inherited his IRA. And to this day, every year we're dealing with this right now because it's almost tax season. We have to take required minimum distributions because at the time of his passing, the law was that it was based on his age, not ours. And we were well before that ten year rule. So we actually have to take RMDs. If it had been a Roth IRA, there would be no RMDs. So that's one of the reasons. And we'll talk a little bit more about Roths later in this show. But Roth IRA withdrawals, those are going to be tax free.

Speaker3:
Yeah. If you can get to Roth IRAs it's a great way to go. Some of the folks that a lot of the clients that we have here an active wealth management. They're super appreciative of the rates of return they get. They're super appreciative of having a retirement income plan, but they're probably most appreciative of the Roth IRA balance that they have. And that is truly tax free. And how they can really count on the withdrawals they take from that and not having any taxes removed from that. And they love doing the conversions. They also like to take advantage of Roth four on K's if they're still working. Um, there's just a lot of things. They've really appreciated the tax planning side of our practice. And we're not CPAs. We don't play CPAs on TV, but as part of our day to day operation, we do make Roth ladder conversion recommendations and also tax planning recommendations. We don't do tax preparation here at Active Wealth management, but we do have, um, several great partner CPA firms and we always are looking to add more. So if you're a you're a CPA and you're listening and you want up here on, all you got to do is reach out to us at (770) 685-1777 or just visit retirement. Com and reach out to us and we're happy to have a conversation. We we like working with licensed CPAs. But if you want to implement a strategic growth ladder conversion, we're going to go into all that later in the show. But Roth IRA withdrawals are a great way to take income because you don't have taxes coming out.

Speaker4:
Yeah. The next source of income in retirement if you're lucky enough to get it, that is pensions. Most people don't have pensions these days. If you do, maybe you're a teacher, former government employee, former military. Maybe you work at one of the few companies that still offers a pension. But those distributions, that income is generally going to be taxed as ordinary income, unless there was a portion that was funded with after tax dollars in some cases, albeit rare, that can be the case. But pensions, those are going to be taxed as ordinary income. And for a lot of people come to us. And when we're doing the portfolio analysis and the retirement planning for them, generally most people do not have a pension, but that's something that they would like. They're looking for that steady, guaranteed lifetime income that they can receive because they want a plan they can count on. So all that to say, if you have a pension that's going to be taxed as ordinary income, and if you don't have a pension, we'll be able to offer some solutions. If you just keep listening to the show, that could help you with your retirement.

Speaker3:
And you can really build your own personal pension. We're going to talk a little bit about that in the next segment on how to build your personal pension, and three great product options to be able to do that, and three great and three great product options to be able to do that. So stay tuned to the next segment on this one.

Speaker4:
And the last source of income that we want to highlight and explain how it's taxed. That's investment income. So anything coming out of an investment account capital gains and qualified dividends are taxed at taxed at preferential rates of either zero, 15% or 20%. Non-qualified dividends and interest bearing accounts are taxed as ordinary income. So you've got to take a look at the different types of accounts that you have that make up your retirement portfolio, and understand that these are going to be taxed differently. Investment income, that income coming out of those investment accounts can vary, but it's something that you want to consider and understand as you enter retirement.

Speaker3:
Yeah. With capital gains. The one big thing is when you're selling taxable accounts or you're selling stocks that you bought or you're selling property you bought, at least get to 13 months. Sometimes with real estate, you got to get to over 24 months. You want to get to that 15% capital gains tax rate. You don't want to have to pay the short term capital gains rate. That's higher. And also a lot of people don't understand how they can do tax loss harvesting, how they can implement a tax loss harvesting strategy in the last quarter of each year to kind of offset the Offset the losers with the gainers, and we'll help you do that. We come right back from the break. We're going to talk more about taxes and your retirement. You're listening to retirement results.

Speaker2:
Schedule your free no obligation consultation now by calling toll free at 888140304.

Speaker7:
Too much.

Speaker1:
Hi, this is Matt McClure, senior financial advisor with retirement results. You've saved your whole life so you wouldn't have to worry about your money when you retired. But you worry more now than ever. You've been a good saver. You have 500,000, maybe $1 million or even more. You should feel confident, but you don't. You're worried a big loss will wipe you out. You saved so you could spend during retirement, but you don't. You're worried you'll run out of money. You want to retire, but you don't. You're worried you don't have enough. Does any of this sound familiar? Well, it should, because we hear these things all the time from people just like you who are preparing for retirement or even already retired. So why do you worry so much? It's because you don't have an actual plan in writing. Nothing to guide you through retirement. Retirement results helps people just like you. You'll get a free, customized written retirement plan. That's right, free and no obligation. Schedule your meeting now at retirement plan. That's retirement.

Speaker2:
Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. While Washington's spending keeps growing, your retirement doesn't have to shrink. Protect and grow your hard earned money today by calling us at (770) 685-1777. That's (770) 685-1777 to connect with a qualified advisor.

Speaker3:
And welcome back to retirement results. Result drivers on Fort Stokes. Your chief financial advisor I've got Sam Davis here with me on the mike. He is our senior financial advisor and co-host to Retirement Results. We're a financial radio show. The folks who listen to this show are results result drivers. And again you result drivers. You're trying to build that successful retirement. You're trying to protect and grow your hard earned and hard saved wealth. We appreciate you on that. Now, Sam, you and I just mentioned briefly in the last segment about building a personal pension, um, as part of the ways that, um, pre-retirees or retirees get income during retirement. It's also a way to get a higher than 4% traditional withdrawal rate. And I want to go over three potential options to build your personal pension and what the actual performance has been over the last couple of years of three different products. And what we're talking about doing is investing the income portion of your portfolio, say, 20 to 40% of your portfolio into a fixed index annuity and replacing the bonds that were in your portfolio. We as financial advisors and licensed insurance agents, we have not seen a single illustration or an estimate or projection where the bond portfolio outperforms the fixed index annuity. And so what I would encourage you to do is consider replacing the bonds in your portfolio. Say it's 40%. So let's say you got $1 million. Take $400,000 and replace it with fixed index annuities. There's no advisory or portfolio fees with fixed index annuities, because the insurance company pays the financial advisor a one time upfront commission, and then they're responsible for servicing that annuity for the life of the annuity, as long as the actual annuitant is alive and gathering income from it.

Speaker3:
So let me give you three different fixed index annuity product, um, examples that some of our clients have invested in over the last several years. The first one is the nationwide Peek ten. A nationwide is an A+ plus rated mutual insurance carrier. A mutual insurance carrier just means that the policyholders are also the stockholders of the company, so therefore they don't have to make that fiscal quarter and try to do a great job and turn you upside down and shake the chains out of your pockets. They really need to put the policyholders first, because they're also the shareholders and they're A+ rated, as I said by a m best and S&P. Now this product is offering index linking with the BNP Paribas Global Factor Index. Now the last two years we we looked at it from October of 22 to October of 24. That's when we did the analysis. It delivered a total of 10.04%. So 5.02% average over the last two years. They have a two year protection period with this product. Now back in October of 2022 Two, nationwide was offering a 325% participation rate. They're still offering a 310% participation rate in this index. So that's these folks are getting 3.25 times how the index does. So that equaled a 33.08% growth over two years on the premium that they paid in originally. So if you put in, you know, $1 million, you're going to get 330,800 as growth on your money, less than 1% spread rate, which is a 32.08% growth.

Speaker3:
So your actual net would be 320,000 and $800 net growth on $1 million premium investment. Most people don't invest $1 million into a fixed index annuity, but if they've got $1 million portfolio, they say $1 million 401 one K or $1 million IRA. What they do invest is they'll invest up to 40%. So if you're investing 400,000, you would've gotten 32.08% growth on your money. Plus, on the front end, you would have gotten an additional 20% bonus into the income account, which is a total growth overall would have been 52.08%. You invest that 400 grand, you would have gotten an immediate $80,000 growth on that. They still have that 20% bonus. So if you're interested in investing in the nationwide pick ten and getting that 20% income account value bonus, I'd encourage you to reach out to us at retirement. Com you can click that schedule consultation button in the upper right corner. We can run an illustration for you. Absolutely no cost to you. So you can see how that product could work for you and generate the income you're looking for now A lot of people love that nationwide peak ten product. Sam, go ahead and share this. A speed of fixed index annuity product is another great way to grow your money without exposure to financial market risk, but also it will give you a retirement income you can never outlive. And they're also a minus rated by Am best. And they've got an incredible index that I know you're passionate about linked to this product.

Speaker4:
Yeah. So at that same time we ran the analysis on the nationwide peak ten. We ran an analysis on this SPDR Synergy Choice Bonus ten, which is another fixed index annuity and personal pension option for you. As you mentioned, Ford, they're a minus rated with both a Am best and S&P. That's considered an excellent rating. They at the time were offering a 90% participation rate in the Invesco Index, and you may have heard of Invesco before. They advertise quite a bit. They're a They're a Nasdaq growth index that focuses on a lot of tech stocks. And so they've experienced some great growth over the years. This lets you get at the time it was a 90% participation rate. It's currently an 85% participation rate in that queue with no downside risk. So truly allowing you to capture those market like gains without the sacrifice of that market like risk. So at the time of this analysis, the Q-q-q had an 83.57% growth over that two year protection period times that 90% participation rate was 75.213% growth in just two years. And they're offering an immediate premium bonus as well of of 10% at that time. So an 85.213% growth in the first two years. So for those of you who don't want to sacrifice the potential gains of the stock market, but maybe as you approach retirement, and that risk level that you're willing to take is starting to come down. These are great options because they can place a protective floor on that portion of your portfolio while paying you that guaranteed lifetime income. Similar to Social Security, similar to your friends or those pensions that are out there, you want to get that lifetime income. Because once you have that in place and you know that's guaranteed, it makes it so much easier to build a retirement plan around that.

Speaker3:
Imagine if you can get 85% growth on how the performs when it's done. You know, October 2022 to October 2024, it experienced 83.57% growth. That is remarkable. Imagine if you can just get that and have your money 100% protected, because your money is invested in a ten year US Treasury. The state of Georgia actually regulates these products. All the states do. What's great about this is the annuity company has to reserve 100% of the money you give them into the ten year US Treasury, which is generally considered one of the safest investments in the world. And they take the interest each year that is generated from the investment in the ten year US Treasury. And they invest it into the options in the Invesco Q-q-q. And they give you 85% of how that does. And then they take 15%. Let's say the Q-q-q loses money over the two year period and doesn't grow and doesn't gain in value. Well guess what? This is fantastic. Still fantastic news for you because you don't lose a dime of your money because you're in money, your principal, your original premium you gave them, and any gains that are locked in every two years is 100% protected because it's invested into the ten year US Treasury, not into the financial market.

Speaker3:
We've got like one minute left here and I want to go over this, this product really quick. The third product would be the North American Charter plus a plus rated carrier by S&P and Am best. Um, they've got the Fidelity Multifactor index. That index, um, generated 7.77%, um, in one single year times 135% participation rate times the two year protection period total gave it a 20.979% growth over a two year period, and an immediate 13% immediate premium bonus. Um, and also gave a total of 33.979% over two years. That's a remarkable, um, result as well. So if you're interested in any of these products, I'd encourage you to go ahead and reach out to us at (770) 685-1777 or visit retirement. Com that's retirement results.com. And the phone number is (770) 685-1777. If you want to build your own personal pension and get more than that traditional 4% withdrawal percentage from your IRA. Come right back. We're talking more about your taxes and your retirement and how to generate that important income you want and need during retirement. You're listening to your retirement results.

Speaker2:
Thanks for listening to retirement results. Schedule your complimentary financial consultation now at retirement Results.com.

Speaker8:
Every breath you take and every move you make. Every bond you break. Every step you take I'll be watching you.

Speaker2:
And active wealth management. We know you've worked hard for your money and you've worked even harder to save it. When it comes to wealth management and planning for retirement, Ford Stokes of Retirement Results is passionate about helping people protect and grow their wealth while educating them on all their options so they can choose what's right for them. Visit. Retirement. Results.com. To schedule your no obligation consultation today, it's a $1,500 value provided at no cost to you. Book yours now at retirement Results.com.

Speaker1:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering. Annuity company you may not receive the bonuses if the contract is fully surrendered, or if traditional annuity payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.

Speaker2:
Miss. Part of today's show retirement results is available wherever you listen to podcasts and online at retirement.

Speaker3:
Com and welcome back result drivers to retirement results on Fort Stokes. Your chief financial advisor here with Sam Davis, our senior financial advisor and co-host. And you know what Sam and I and all the advisors at Active Wealth Management. We are here to help you protect and grow your hard earned and hard saved wealth. And we're really on your side. Um. It's your money. It's not ours. We take it very seriously. The opportunity to protect and grow your hard earned and hard saved wealth, as we said. And we've got an important update that's come up on US debt clock. Many of you have gone to US clock just like once or twice in your life, and you've seen how crazy the debt is, or even maybe you've gone there more often, but there's some a positive going right now on US debt clock, thanks to the Department of Government Efficiency. And I want to give a shout out to the folks at USDA org who are doing a great job at at least talking about the positives and not just the negatives of how our national debt is over $36 trillion. Sam, go ahead and talk about that update. And also, you've got some really interesting, um, items that we could buy with $36.4 trillion, um, of our national debt.

Speaker4:
Yeah. I would also encourage everybody listening, if you like what you're hearing, subscribe to retirement results wherever you listen to podcasts. And you can also subscribe to us on YouTube. Just search retirement results on YouTube, and we'll put up a clip of what we're showing right now from US debt clock. And we can see that the national debt, as we're looking at it now, is at 36.4 trillion. I expect it it'll be at 36.5 trillion within the next month or so. Uh, we've also got the Doge clock with the Department of Government Efficiency has secured, according to US debt clock. Aug $90.5 billion in government savings just in about a month's time, which is very impressive. Um, and the national debt is something that has concerned people for some time because the government's inefficiency can lead to future taxation and trouble for future generations. And I just put this together. And for $36.4 trillion, that's a lot of money that's hard to visualize. So here's five things that you could buy with $36.4 trillion. Let's say we didn't have the national debt and we could make an investment for our nation. Well, $36.4 trillion could actually buy the entire US economy for over a year. Us GDP is at 27 trillion. You could fund every salary, every business and every service in the United States for more than a year.

Speaker3:
That's remarkable.

Speaker4:
You could also purchase every publicly traded company in the world, or at least one third of it, because $36.4 trillion would secure you one third of the global stock market. The total value of all global stocks is approximately $100 trillion. So you could own about a third of the global stock market. That is incredible.

Speaker3:
Wow. It's it just goes to show you, you know. As Andy Stanley, who's he's a pastor at, we go to, um, Browns Bridge church and it's an Andy Stanley church. But what he says it's far better to want than it is to. Oh, how much better would it have been if the United States had not gone down this path? It really, since Nixon of financing our with debt, financing our government with debt and raising the debt ceiling over and over and over and over and over again, how much better would we be if we just had the 36 trillion? We'd go by one third of the entire stocks in the world. That is so remarkable. This is an important little mini segment for us to do. Uh, but I just wanted to give the listeners, hey, there is a positive on US debt clock. Org go check it out. The Doge clock is there. Um, and keep working hard. Elon Musk and the Department of Department of Government Efficiency. It's going to mean more dollars for us and more dollars for us as citizens, and also for you pre-retirees and retirees. It's going to mean a lot more money for you guys.

Speaker4:
Yeah, $36.4 trillion could also help you rebuild the entire United States infrastructure over seven times the estimated cost of fixing all roads, bridges and public infrastructure in the US is about $5 trillion. So you could fund a nationwide rebuild every decade for the next 70 years. I know there's been a lot of talk about improving US infrastructure. If we didn't have $36.4 trillion and four, if I can rework Andy Stanley's quote there, I would say it's far better to own than it is to own. And unfortunately the US owes quite a bit it also, it could also allow you to colonize Mars. The cost of colonizing Mars ranges from anywhere from 100 billion to $1 trillion. Dollars, but that could give you a great start if you wanted to colonize Mars. It would also. This is one of my favorite ones, for if you had $36.4 trillion, instead of owing that money, you could purchase the entire supply of mined gold three times over. All the gold ever mined is worth about 12 trillion, so you could own every ounce of gold that has been mined three times over.

Speaker3:
It just shows you how big our debt is. It's crazy. All right, let's move on to tax deferred accounts. And do you have a retirement tax problem? At some point they got to pay for all this all these taxes and all this debt. So the big idea here is tax deferred retirement accounts like traditional four K's for three B's. 457 Sep IRAs and IRAs offer upfront tax breaks. Again, what Sam talked about paying taxes on the seed versus the harvest. The government is actually going to tax you on ordinary income tax on the harvest. But you can create major tax burdens in retirement as well. Um here's why. Every dollar withdrawn from traditional 4k and or IRA is taxed as ordinary income, which could push you into a higher tax bracket.

Speaker4:
Yeah. And you know, just an example for people, you know, let's say you're in retirement and you just want to take that spontaneous vacation. You know, funny enough, my my father, he lives in Kansas still. And there's a snowstorm coming. He took a spontaneous vacation to Miami and South Beach, Florida. You know, maybe you want to go on a cruise at some point in retirement. And that cruise, let's say it cost $10,000. Well, if you're pulling out of a 401 K or an IRA, you can't just pull out the 10,000 to pay for the cruise. You're going to have to pull out the money to pay for the cruise, and the money to pay for the taxes on the cruise, because that is a tax deferred account. And so to avoid those tax burdens, some of the things we recommend Roth conversions. That's a great way to to start to reduce your tax liability. And Ford, that's one of the things we offer to people who reach out and give us a call as we'll put together a rough ladder conversion plan if it fits with their situation.

Speaker3:
Yeah, if I can jump in real quick. The one big hint that we were that we that we talked about at the beginning of the show, when I recur, when I encourage you to do is to take the money from your IRA. Let's say you want to move $100,000 in a single year move. And let's say you're at a 20% total tax bracket when you include federal and state. So it's 15 and 5% on in state of Georgia. So let's say or 5.75% in, say, Georgia. But let's just say it's 20% total. You're you need to move $100,000 from your IRA to your Roth IRA. Then what you should do is take the 20,000 you got to pay in taxes, take it from your checking account, take it from your taxable and, you know, brokerage account, your investment account, or take it from rent. You're getting, um, from a rental property. Take it from a savings account, take it wherever you can, but don't take it from as a As a withdrawal or as a withholding on the conversion. So that way you're taking tax deferred dollars, moving them into 100% tax free dollars, and you're using taxable dollars to pay the taxes on that. So in other words, taxable dollars, whether it's taxes you've already paid on money you've already paid taxes on. But that's the biggest hint I would tell you. Also, you want to get out before you are 73 years old because your Roth conversions do not count as your RMDs, because the required minimum distributions will force you to withdraw money whether you need it or not. Triggering taxes each and every year starting at age 73. That compounds your withdrawal rate. If you're withdrawing eight, ten, 12%, you're going to run out of money. If you're doing that every single year. So do everything you can. At least reinvest the money that's left over after your RMDs. And then also make sure you try to do that Roth ladder conversion before and finish before you turn 73 years old, because that's a big deal. Um, you don't want to have taxes just compounded and compounded right around your 73rd, 74th, 75th year.

Speaker9:
It's the final countdown.

Speaker2:
So let's recap what you may have missed. It's the final countdown.

Speaker9:
The final countdown.

Speaker3:
So on every show, we recap what we talked about on the show and this week's show. We talked about how taxes work in retirement. We talked about a strategic Roth IRA conversion. We talked about how retirement income is taxed. We talked about how to build a personal pension and gave you three great examples. And if you're interested in those examples, I'd encourage you to reach out to us at retirement Plan. That's retirement plan. And remember if you've got a 401 K, you've got the IRS as your partner in retirement. Be very careful trying to get out and do that strategic raw bladder conversion before you turn 73 years old. We're happy to help you. Also, when you're looking for great retirement information, be sure to tune in to retirement results. Also, if you're seeking information, if you're going to be a bear, be a grizzly and have a great week everybody.

Speaker2:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's (770) 685-1777. To connect with a qualified advisor. To learn more about our mission and our team visit. Retirement. Com. Investment advisory services offered through Brookstone Capital Management, LLC, a registered investment Advisor. Vcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Speaker1:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure, the ADV to item four for additional information. Fixed annuities, including multi-year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Speaker4:
Hey, this is Sam Davis with retirement results and active wealth management here with Ford Stokes. We've got a bonus segment for our listeners on. You listening to us in North Georgia, in Gainesville, sort of near the Cumming. Area and where our home office is right here in Alpharetta, Georgia. You know, if you are looking to get the answers you need regarding your Social Security benefits, we have an offer for you. Our chief financial advisor, Ford Stokes, is a registered social security analyst, and we're able to put together a free Social Security maximization report for you and your spouse and anyone else you know who could really use this important information about their retirement benefits.

Speaker3:
Yeah, I'm happy to be one of only 15 registered Social Security analysts in the state of Georgia. And here's what we do. Here's what it means to you. So what we do is we take your XML files XML files from Ssa.gov. So what you want to do is go to ssa.gov wherever you can download the PDF of your Social Security statement that kind of talks about here. Here's how much money you're going to get at certain ages or whatever. There's a blue text link below it that says download XML file. Click that, download it and email it to us and email it to me at forward at. Com. We need it for both spouses. And um we're happy to run the free RSA roadmap. It's an over $500 value just for this, but we're happy to do it absolutely for free. Because when you decide to take Social Security, it's either the number one or number two. Most important decisions you're going to make during retirement. Your entire retirement. Regarding your retirement income. So it's a really big deal. Uh, many retirees are shocked to learn that their Social Security benefits may be taxable. Also, many are shocked that their Medicare charges come out of their Social Security check as well. And so you really do need to maximize it. We run a break even Analysis for you. We also run what if scenarios.

Speaker3:
We give you three different options. Let's say the wife wants to turn on income for herself and her own Social security at age 62.5 or 63, and then she wants to wait until 67 for spousal benefit. Also, one hint for everybody if you are a female spouse and you. Let's say you worked harder and stayed home and raised the kids right. And it's a partnership. Totally understand. Totally get it. And you deserve all the credit because you couldn't get fired from the job and you couldn't quit the job. But let's say you want to start filing spousal benefits, but you want to keep holding on and holding on. It does not, does you? Zero good to to file those spousal benefits at age 68. You need to file them at 67 because it's going to go to your full retirement age. Also, if you are if you were born before 1960, your full retirement age may be 66 and eight months or ten months or what have you. But if you're born after 1960, congratulations. Unfortunately for you, your full retirement age is age 67. Uh, also remember, on the taxable, taxable side with Social Security, for married couples filing jointly, up to 50% is taxed if your combined income is 32,000 to 44,000 and it's up to 85% is placed with your marginal tax income rate on the Social Security benefit you're receiving.

Speaker3:
If your income exceeds 44,000 USD per year for a married couple filing jointly, that number is 34,000 for a single filer. So if you're a single file, you're making over $34,000 a year as a retiree and a Social Security recipient, or you're making over $44,000 a year as a married couple, filing jointly as Social Security recipients. Then guess what? The US government thinks you're wealthy. Now. That's not my definition of wealthy. So it's probably not yours either. You've got to really do a really good job at maximizing the income that you're getting. And the income Social Security, income benefit that you're receiving because of this reason. You want to maximize that income so it can make up the taxes that you're going to take out from you, and also the charges they're going to take out from Medicare and even help pay for the Medigap supplement plan you may get. And also the increasing charges of what's going on with the Medicare Part D plans that we're seeing. So let's do everything we can to maximize those statutory income benefit. And also we talked about earlier in the show, taxation on Social Security didn't start until 1983. It's been a fairly recent thing. You really need to maximize your income benefit to make up for those taxes. Sam, any last thoughts you've got on this important Social Security and taxes segment.

Speaker4:
Yeah, I would just really encourage people to visit our website, whether that be our show's website, retirement. Com or our firm's website, wealth.com. And just learn more about our mission and what we're seeking to do as fiduciaries. When we have people come into our office, we hear a lot of questions like, you know, why would I wait to take Social Security? Does it benefit me to wait? Um, one very serious question is what happens to my benefits when my spouse passes away? And that's something we help people calculate and factor into their plan.

Speaker3:
Yeah, I just encourage everyone to reach out to us at retirement. Plan. Retirement plan or give us a call at (770) 685-1777. We'll get started right away. And again, just huge. Welcome to the listeners. We really appreciate you. We look forward to helping you guys better plan for successful retirement and help you help you protect and grow your hard earned and hard saved wealth. Have a great week everybody!

Speaker2:
Are you concerned about rising taxes and how that could affect you and your family during retirement? If you have an IRA balance over $400,000, you could save six figures in retirement taxes that you would be paying during a 35 year retirement. Find out how much you could save today by scheduling your no obligation Roth conversion consultation with Fort Stokes of retirement results. Learn more and schedule an appointment at retirement Investment Advisory services offered through Book Capital Management LLC, a registered investment advisor. Visit retirement results.com for more information.

Speaker1:
And examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

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