Plan With The Tax Man

Tony Mauro
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Financial, tax and retirement planning guidance from Tony Mauro. Tony is the original Tax Doctor, serving central Iowa. We’ll teach you how to properly plan for retirement, minimize your tax burden and attain a successful financial future.

  1. 5d ago

    Why People Keep Working In Their Retirement Years

    More people in their 60s and 70s are staying on the job than ever before, and it's not always about the money. Let's dig into the real reasons retirees keep showing up to work.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- TRANSCRIPT:    Speaker 1: More and more people are retiring in their 60s and 70s and staying on the job than ever before 'cause it's not always about the money. So this week on the podcast, let's dig into some of the reasons people keep showing up to work, even in retirement.   Hey, everybody. Welcome into the podcast. This is Plan With The Tax Man with Tony Mauro from Des Moines Professional Alternative Tax Doctor Inc. Serving you all around obviously the Des Moines area and the Iowa area, but all over the country. Tony's got clients, he helps all over the place. So if you got some questions, need some help, and you're checking out this podcast, and you'd like to get a little more info or just chat about some things, he's a CPA, and a CFP, and an EA with 30-plus years in the industry and a great resource for you to tap into at yourplanningpros.com. That is yourplanningpros.com. And Tony, how you doing my friend? You doing all right?   Tony Mauro: I'm doing good. Yeah. Summer is in full force here, and enjoying it as much as I can.   Speaker 1: Nice. Yeah. So you're obviously still plugging away. I'm still plugging away. Now we're not at that age yet. We're in our mid-50s, but I'm sure you're seeing this with a lot of your clients as well, people that are into retirement, they've maybe got their strategy or they're playing with you guys, but are still working. And it could be for reasons other than the money, but I want to talk about both sets of those today, right?   Tony Mauro: Yeah.   Speaker 1: So let's dive into the first one, and we'll just start with social connections, for example. So this is not money-related. This just might be simply, "I like the people I work with, and it gets me out of the house, and it gets me some human interaction," especially, unfortunately, if you are a retiree who maybe has lost your spouse. Maybe this is a great reason to keep moving, and going to work, and doing things.   Tony Mauro: And I see a lot of clients that want this because... And I fall into this category myself, I think, is when I go to retire, I want a little social, like you say, connectivity. And with a lot of people, what I find with them is because they've been working for so long, they miss that. And they come back and tell me six months to a year into retirement that, "There's only so much golf I can do. There's only so much putts at around the house that I can do."   Speaker 1: Did you really just say that?   Tony Mauro: Yeah. And I would agree with that to an extent, and a lot of them like to go back to work. Generally, they'll go back and get something that they're not really concerned as much, especially if they don't need the money, about what it pays, other than they don't want generally tons of responsibility, or being able to set their own hours, or work part-time. But a lot of them for the social connection, they really enjoy it. And so I'm always good with that if they're asking me what do I think. And I think it can contribute to a longer life, frankly, especially like you said, if a spouse is gone.   Speaker 1: Yeah, definitely. I think a lot of people certainly continue to want to work just for that social connection alone, and that's totally fine. And I think the takeaway here, Tony, is going to be work optional, right? There's-   Tony Mauro: Yeah.   Speaker 1: ... reasons why you go to work because in retirement, and it's because it's an option, because you're choosing to versus not, because you're not choosing to, or you have to go for the money reason. And I'm going to skip around on the list. We'll get to the money one here in just a minute, but I want to do another one from the home standpoint. And that's just changes in the home. So not that there's much of a silver lining to think about with COVID, but certainly during that time period, a lot of people got a dry run of what it would look like to get into retirement with their loved one being at home together 24/7. And so maybe that was a little bit of a wake-up call. And I know, Tony, I've got advisors all over the country I talk to, like yourself. And all of you guys and gals have stories where one spouse or the other looks at the advisor and says, "Get them out of the house. They're driving you nuts."   Tony Mauro: That's right. Yeah. "I want to kill them."   Speaker 1: Right?   Tony Mauro: Yeah.   Speaker 1: So that could be a big thing to think about too, "I want to keep that sanctity of the home, so one of us is going to keep going to work because it gives us the social connections, but it also gives us a relief from the spouse."   Tony Mauro: Yeah. And I think this one I will struggle with because for a lot of people, you've been going to work for so long that it's hard to change your routine.   Speaker 1: Indeed.   Tony Mauro: And then you find out that you've been going to work, your spouse been going to work for so long, and you see each other at night on the weekends. Yeah, that 24/7 thing drives a lot of spouses on both sides crazy. And I think it's something that you have to at least take into account, especially if you're young enough and don't need the money to get out and make that happen.   Speaker 1: Yeah. And I think routines change, right? There's just various different things that just cause that uneasiness. And again, maybe it's not work, maybe it's something else. Maybe it's book clubs, or volunteering, or whatever the case might be. But I think that could be a reason people just go, "Well, you know what? I'll just go back to work because it gives me some social time with other folks. It gets me away from the spouse for a little while so we're not at each other all the time. And I make a little extra money because it helps with some of the money woes." Right? And so-   Tony Mauro: Yeah.   Speaker 1: ... that'll walk us into the money woes conversation, Tony, because some studies have shown that nearly half of retirement age folks who are still working do so out of financial necessity or financial stress. And I think this is where you've got to have that strategy and plan in place, because if you absolutely have to work for the money, no shame, it is what it is. But if you're stressed about it when you don't need to be, that's kind of silly. Find out. Go to work because you want to, not 'cause you have to.   Tony Mauro: By far, yeah. This is the biggest conversation to have with your advisor. And we do it a lot with people before they retire on... What it comes down to is a couple things. You get to that 65, 67, and say you just haven't followed good advice, and you miss the mark, and it's a little late to save. You've got to go to work because you have to. And like I say, there's nothing wrong with that. You have to do it, depending on what kind of lifestyle you want. And that's one thing. But the other thing is a lot of people tend to just go to work because they... And they really don't have to. And again, if they want to just because they don't have to, that's great. But they continue working because they're worried about running out of money when, really, they do have a good plan, and they won't run out of money.   So make a decision based on that. I think that's where the advisor, beforehand, needs to talk to them. I just had a conversation with a client, he's only 43, making some good money, but he has not done much for retirement. He just refuses to do it. And I had the conversation with him, and I told him, "Look, I'm going to pull your social security statements for you and your wife's balance from her 401(k). I'm going to extrapolate that out. So if you continue down this path, here's where you're going to be at about 67." And he was floored because he says, "That's not the money I'm making now. I won't have any money." I said, "Exactly. So you've got money worries, so you've got to start now." Not too late for him, but you need to have these conversations, especially when you're, I think, in your 40s and 50s, with your advisor, 'cause that's the whole reason you're paying us, is to say, "Am I going to be okay at retirement or not?" And I can make these easy decisions, I think.   Speaker 1: Yeah. And I think this is where the final piece of this, Tony, is if you're doubting your strategy or your plan, or you don't even have one, clearly, then this is where you got to get one, 'cause even after years of working towards the goal of retirement... And a lot of people, Tony, when they come in for those initial consultations, they're in better shape than they realize, but they still think, "I'm going to have to work. I'm never going to be able to retire." So if you've got any doubt at all, this is why it's so important to just go get a strategy. Go out and talk with one, two, three different advisors, find the one that you like, have those consultations, those reviews, see who you resonate with, do your homework, check and see if they're properly licensed and all that good stuff, and get started, because that'll help you alleviate... Then the other things we talked about today come back into play just because you want to.   Tony Mauro: That's right. And most people, I think, want peace of mind when they get to that retirement... I know I do. My big peace of mind thing right now is, "Am I going to be able to go somewhere warm for all four months of the winter when I retire?" And I've done my calculations, and I think I'm going to be in really good shape for that. And so again, peace of mind, "Okay, I can do that." But if you're at all in doubt of your plan, or if you don't have a plan, now's the time to start working. It's never

  2. Aug 6

    The DIY Retirement Plan — Where It Works and Where It Gets Expensive

    There's an entire television network dedicated to doing things yourself — home renovation, landscaping, interior design, all of it. And the DIY mentality is genuinely admirable. But when it comes to retirement planning, the stakes of a bad install are a little higher than a crooked backsplash. Let's talk about what DIY planning actually looks like in practice.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- TRANSCRIPT:    Speaker 1: We've created an entire television network dedicated to doing things yourself. Everywhere you turn, it's DIY, this and that, home renovation, landscaping, interior design, all of it. And the DIY mentality is genuinely admirable. But when it comes to retirement planning, the stakes of a bad install are a little higher than just a messed up backsplash in your kitchen. So let's talk about that this week, the DIY movement in retirement planning and what that looks like actually in practice.   Hey everybody, welcome into the podcast. This is Plan With The Tax Man with Tony Mauro. And we're going DIY this week, Tony, little pitfalls of doing things yourself. Everybody does it to a certain degree in many walks of life. You and I both have done a lot of DIY things ourselves, but certainly when it comes to the financials, this is maybe room to pause and think about this.   Technology, Tony, has changed. It's super easy to do a lot more things. Absolutely. I'll agree with that. I'm sure you will too. But the complication of preservation and distribution, AKA retirement, is vastly different than accumulation. So let's talk about that this week a little bit.   How are you doing, my friend?   Tony Mauro: I'm doing good. [inaudible 00:01:36].   Speaker 1: Do you agree with my statement there?   Tony Mauro: I agree with your statement. Yeah. And I love this topic for a lot of reasons because I think as we... Well, in the world we live in, especially with the AI advancements and whatnot, it's just getting worse and worse. Everybody wants to do everything themselves. And I think a lot of times, and I'm one of them too-   Speaker 1: Sure.   Tony Mauro: ... I used to love doing home renovations because I enjoyed it. But now that I'm a little older and I try to preach this to my son and whoever will listen, is you need to outsource everything that you're not good at or you don't enjoy because that's going to free you up to do what you do enjoy and/or make money. And we do it at our business here. I mean, I don't touch the IT. I don't touch the phones. Now, could I, and try all that? Yeah, sure.   Speaker 1: Sure.   Tony Mauro: It clutters up my life too much. And I want to give it to the guys that are good at it. And so yeah, I agree with your statement wholeheartedly.   Speaker 1: And it's one of those things where we certainly know in this world it's been more and more difficult, especially post-COVID, to get people to show up and maybe do quality jobs in different aspects of things.   Tony Mauro: Sure. Yeah.   Speaker 1: And so everybody feels like, "I'm just going to take on this." What's the old saying? If you want it done, right, do it yourself?   Tony Mauro: Right. Do it yourself.   Speaker 1: And that could be true. But I mean, my brother and I are fairly handy and we built some things around my property, Tony, but when it came time for a complete overhaul of the back deck and building a roof on it and all this kind of other stuff, I just did not feel comfortable in our skillset, so I farmed it out. Did it cost me more? Yeah, probably. But then again, maybe not because how many times might I had to double back and fix something that I didn't do right the first time because I don't have the skillset or the longevity of doing these things.   So financially speaking, I think that same thing happens. There's so many tools out there now. And growing the money... I mean, Tony, check this out. So you might know this off the top of your head, but if you don't, don't look it up. Just give me a quick educated guess. At the time we're recording right now, how much do you think the S&P 500 is up the last five years?   Tony Mauro: Cumulative?   Speaker 1: Yeah. Cumulative. Give me an idea. What do you think? Five years.   Tony Mauro: Five years, I'm going to say 45%.   Speaker 1: Okay. How blown away are you that it's 75?   Tony Mauro: That doesn't blow me away.   Speaker 1: Okay.   Tony Mauro: I was thinking a little higher, but no, it doesn't blow me away.   Speaker 1: Okay. 75. Crazy, right?   Tony Mauro: Yeah.   Speaker 1: Five years cumulatively, the S&P 500 is up 75%. The Dow up 50 over that same period. So it's easy for people to go, "Oh man, you can be an idiot and throw a dart at something and do well." But when it comes time for the... As we get closer to financial or retirement, excuse me, distribution, there's a lot more at stake. And I think this is where people start to find themselves at a crossroads. And do you find that? Do you have people coming in that are like, "I've been doing it myself, Tony, but there's a lot I don't know and I'm getting a little nervous. I want to make sure I don't screw this up because this is my forever money"?   Tony Mauro: They do. And that's how a lot of people come to us. And if they've been doing things themselves, we certainly don't tear apart what they're doing, but we just try to ask a lot of questions and make sure that not only... Because a lot of people come in, "Well, I've been doing this myself and I've been averaging 10% a year or I've been beating the S&P 500."   Speaker 1: Sure.   Tony Mauro: And I say, "Well, okay. We really have you... Let's see, but that's good." And then the first question as I ask is, "What do you have for an emergency fund?" And they have a strange look on their face. And we start talking about that. I said, "Well, what about you... Tell me about your assets and things. And then we'll get to the part of, well, what do you have for life insurance?" And so some of that stuff they don't think about. All they're thinking about, "I throw my dart at the board. I'm investing in this. It's growing. I should be okay." And that may be the case, but there's more to a comprehensive, keyword, financial plan.   Speaker 1: And you may be doing well, right. So think about my analogy a second ago about what the numbers have done. So let's say you had a million bucks [inaudible 00:05:37] on the S&P 500, you're up half a million dollars over five years. And you're thinking, "Man, I got this thing figured out." Great. Okay. So now you got a 1.5 million sitting in this account, you're getting close to retirement and you got to start pulling this money out. And now you don't realize the things that you're triggering. So your income strategy is going to affect some other things. It's going to affect your Medicaid or your Medicare, excuse me. So you're going to get those issues. You got to start dealing with the IRMAA situation. That catches people off guard. The taxation of the whole thing, Tony, is what catches a lot of people off guard. That's where a lot of people are going, "Okay, this is why I definitely need help. How can I be more efficient here?" And with you being a CPA and a CFP, you're thinking about the tax situation, but as well as the future planning.   Tony Mauro: That's right. And some of those triggers you're talking about are exactly what I think a lot of people miss really with a good advisor. With us, we're looking always at, we know you want to get the most money, especially around retirement.   Speaker 1: Sure.   Tony Mauro: We got to do it tax efficiently because we don't want to give the feds any more than you have to. So let's think about it. And let's take everything into account, Social Security and everything else you might have coming in, to make sure that that's the case, that we're always on track with that. And don't miss that by too much because it's just ineffective. And at the end of the day, you bleed money and you don't even know it.   Speaker 1: Yeah. I mean, I can see somebody coming in DIY or they've done well. Let's just go with a million bucks, Tony, because it's easy. They've got a million dollars in their portfolio. And they come in and they're like, "Hey, I heard Ramsey talking about taking 8%. I've done the math. I'm going to pull 80 grand out a year, blah, blah, blah. I should be good to go, right?" You know what I mean? And it's like, that's a quick back of the napkin thing. It's like, "Well, all right, the 4% rule is half of that. The guy who created the 4% rules moved it to 4.7."   But for easy math, Tony, you could sit there and go, "Well, does 40,000, if we go with the 4% rule, does it get it done? Does it drive the plan?" Because Ramsey's thing is, "Well, if the market averages 10% year over year at minimum, why not take 8%?" But of course, the downside of that, Tony, is that to make that happen, you're 100% invested in the market. And I think again, as we age, we're not really comfortable taking that amount of risk.   Tony Mauro: No, no. And I think that's one of the flaws that a lot of DIYers end up with is they'll come in with some... We use that example.   Speaker 1: Rule of thumb. Yeah.   Tony Mauro: Just that rule of thumb, yeah. And when we sit down and start putting some numbers to that and their situation, most of the time... And I like Dave Ramsey's stuff about getting out of debt, staying out of debt, saving and whatnot. I don't agree with the 8% year-over-year. I think that's too aggressive based on things that happen not only in the market, because he's assuming it earns 10% every year. We know it does not, even though lately it's been way up. But what if you go through a stint right when you retire that it goes up 10% one year? And then we have a situation like from '04 th

  3. Jul 23

    The National Park Guide to Retirement Planning

    Whether you're visiting one of the 63 national parks this summer or just hitting a local trail, a lot of the best practices for a great hike apply just as well to your retirement plan. Let's “walk” through a few. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- TRANSCRIPT:  Marc: This week on Plan with the Tax Man, maybe you're visiting one of our national parks this summer or just out hitting the local trail. And if you are, we have some best practices for a great hike that apply just as well to your retirement plan. So let's walk through a few of these with Tony Mauro. Hey everybody. Welcome into the podcast. This is Plan with the Tax Man, with my friend Tony Mauro. How you doing buddy? Tony Mauro: I'm doing good. Marc: Yeah? Tony Mauro: Midst of summer. Marc: Yeah. Tony Mauro: It's all good. Marc: I'm telling you what, it's been crazy, incredible hot. Look folks, little FYI out there. If your AC unit fails you during the really hot months, be very, very careful because apparently mold can build in the ducts quickly when the humidity is high and the AC's not working, go figure, even though the AC's not working because the water and condensation that sits in there while waiting to get it repaired apparently turns to mold. So a little FYI because it's expensive to fix it. Tony Mauro: Yeah. Marc: And that might be a retirement expense, Tony, that you just didn't see coming, right? Tony Mauro: You didn't see coming. You better have to depend on the emergency fund. Marc: Exactly. Right. So we're always trying to provide useful nuggets of information on this podcast. But we're going to have some fun this week. Tony, I know you like to travel. I know you like to go a lot of places. Do you visit the national parks? Do you do some of that stuff? Tony Mauro: The reason that I want to talk about this, because I was just out in a couple of them last week. Marc: Oh. Tony Mauro: I had to go out to South Dakota for a wedding, and so we stopped at the Badlands National Park. Marc: Nice. Tony Mauro: And it wasn't really a park, but Mount Rushmore. But I have been to other national parks out. I've been of course to Yellowstone and a couple of others. A lot of them I still want to see, and they're very interesting. I will say- Marc: You have been at Yellowstone or not? I though you had. Tony Mauro: I have been to Yellowstone. Marc: Oh okay. Tony Mauro: Yeah. Marc: Yeah. Okay. Tony Mauro: I still have a few on my list. Zion and Bryce And some of those, but I do like to hike. I'm an amateur. Marc: Yeah. I want to go to Denali. That'd be cool. Tony Mauro: Yeah, Denali. Marc: Yeah. Or McKinley, whatever it used to be called, either way. So look, do you know how many national parks we have, by the way? There's a lot. Tony Mauro: I don't. Marc: There's a lot. 63. Tony Mauro: Is that how many? 63 national parks. Marc: Yeah. 63 national parks. Some are really big, obviously, and some are really small. I think Hawaii's got a couple. I think California's got like six, but yeah. So there's different sizes and stuff out there. So anyway, a lot of people like to visit these things as a summer thing with the kids or grandkids maybe. So we'll talk a little bit about some analogies. I'll let you spin some financial wisdom to my setup for the park conversation. So we'll start with a map. Don't leave home without a map. I know we got these cell phones and that we're attached to them now, Tony, but you might not get signal in some of these bigger parks. And if you think about it, a lot of the gates when you go into some of these national parks, the first thing a ranger does is tell you a couple things and they hand you a map. Tony Mauro: That's what they did to me. Yeah. Marc: Exactly. And that's the same thing. It's to help keep you oriented. Same thing with a financial strategy. It's to help to keep you oriented and focused. Tony Mauro: It is. I mean, the financial plan, if you have a formal one, I mean, that's your backbone. That's the map itself. And just like when I was... We did a little hike in the Badlands on our own and they gave us a map to make sure we stayed on the trails and stayed on... I equate that to just like in the financial planning world, stay on track and make sure that you're following your map as best you can. So out there in the Badlands, if you get off the trails, a lot of bad things can happen quickly. Marc: Yeah. Tony Mauro: In the financial world, it's going to be a slow burn if you get off track, but over time you get off track too much, and what's going to happen is you get to the end and you are not going to be where you though you were going to be. Marc: Mm-hmm. Yeah. Tony Mauro: And so with this plan, as it changes and whatnot, it's not like a static map that you'd be holding in your hand with hiking. Marc: Sure. But if you get a little off course, it might help you get back on. Or even those reviews serves as almost like a check-in spot. Maybe you're going on a really long trail through the parks and it's like, "Hey, we're going to stop at this little whatever this thing is." And there's a map there because maybe they've made some changes or who knows? Tony Mauro: Yeah. In our annual reviews, I mean normally the plan changes a little bit every year, if nothing else, just with a little bit of goal modifications and things like that. And then of course, maybe even rebalancing. Marc: Well, life's going to throw something at you. Tony Mauro: Life's going to throw something at you. I was just telling you before this call, life threw something at one of our clients. They've got parents going into, one's got dementia and had got to go in a nursing home with no plan. And boom, all of a sudden life changes quickly. Marc: Yep. Tony Mauro: All the better to have a map and to be following it. Marc: For sure. For sure. Well, and unfortunately, Tony, one of the problems that we run into often when we go to these lovely, beautiful national parks because our country is full of amazing locations, is unfortunately there's other people. And people don't do the best job of always picking up after themselves. So when you go to just about every national park, there's signs everywhere. "Please do not leave your garbage. Please do not do the..." Like at Yellowstone, we were just talking about that. At the sulfur pools, "Don't throw cans in the sulfur pools," things like that. Just crazy stuff that you think, hello, common sense. We should not do this. Ultimately, the message is don't leave a mess behind. And financially, same kind of thing. I mean, when we're no longer here, are we leaving a mess for our family? Tony Mauro: Yeah. And that's what I was just on the call with is that this family's mother and father are going to leave them a mess, and they didn't plan for it. And you don't want to leave your loved ones when you're gone. I'm already talking. I'm working through it myself with my wife at our life list. Something happens to one of us, we don't want to leave a mess for our son. And that means knowing where everything's at and how to close things out and what's going to go where. It's hard enough for loved ones when you're gone dealing with all the emotions. You don't want to leave them with a financial mess. And that goes from everything from no will to outdated wills, no beneficiaries on certain things, keeping all your stuff secret. I think you need to be more transparent with your heirs to make sure that you don't leave them with this and let them know what the plans are. You don't have to share every detail of every cent that you have, but I think you should leave something for them to help them when the inevitable happens. And then you're not going to be blindsided. Marc: Yeah. Yeah. I mean, and sometimes there's a lot of little things too. Unfortunately, big situations like the one you're currently dealing with there, but there's the little things people can do to not leave a mess. I mean, even something as simple as your TODs or PODs on some of your different accounts. A lot of times people don't even think about that. They got a bank account, maybe they got 50, 60, 70 grand sitting there and they forgot to put transfer on death to their spouse or whatever. So just a mess. Just make it easy when we pass on, because we're all going to pass on. Try to make it as easy as possible and leave no mess behind. The scenic route. A lot of times we go to these national parks, we love to do the scenic route. Lots of things can get in the way. It's fun to do the scenic route, but sometimes you're just tired. You want to take the quickest route too. And I think when you're thinking about retirement, sometimes it's easy, Tony, to be like, oh man, what's the fastest way to get me some more income or take advantage of this crazy market run that we've been on or whatever. So the scenic route could be the way to go. Sometimes the faster way is the way to go. It just depends. Tony Mauro: It does depend. And it depends on going back to the first thing we talked about is your map and really what's going on. What we see mostly is clients wanting the fastest way. And you hit it on the head is what's the fastest way I can get to X amount because they think that's... And what they end up doing is, without a good plan, they could end up taking a lot of risk. They could end up really shooting themselves in the foot a little bit because there's all kinds of things out there. Anything from the volatility in the markets, what's going on in the world politically. And then of course dumbing it down a little bit, just not dumbing it down, but shrinking it down to what's going on in their personal lives. You're going to have things that pop up at you that scenic route may be the better route. Our jobs as advisors is trying to mesh the scenic route with the fastest route and get the best of both of the

  4. Jun 25

    Reacting to the Most Watched Retirement Video of the Year

    Over the past year, one retirement video on YouTube pulled in 3.7 million views. The title: "Sell These 5 Things Before You Retire." We thought it was worth a conversation — not to tear it apart, but to react honestly. Do we agree? How often do we actually see this play out with real clients? Let's get into it. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc: Over the past year, one retirement video on YouTube pulled in 3.7 million views, the title, Sell These Five Things Before You Retire. We thought we would talk about those five things this week here on the podcast and break it down a little bit with Tony here on Plan With the Tax Man.   Welcome into the podcast, folks. Thanks for hanging out with Tony Mauro and myself, as we talk investing finance and retirement. And yeah, the top video of 2025 for retirement was 3.7 million views, Tony, and it's Sell These Five Things Before You Retire. So, we'll keep that in mind as we're breaking these down. I want to get your take on each of these, and does it make sense to you? Do you see that often? Just let us in on your insights as a planner who's been doing this for many years. So, this should be fun. How you doing, my friend?   Tony Mauro: Yeah, I've been doing good, been doing good. This is a good topic because I think we as planners get asked these things a lot. This was a really good video. And I did view it, I agree with most of it.   Marc: Yeah, I do too, yeah.   Tony Mauro: We'll break it down a little bit and have some fun.   Marc: Yeah. Well, let's start with the biggie. The oversized house. I think this is a huge question for obviously many, many people. Obviously, it resonated with lots of folks because yeah, I mean, it could maybe free up some significant money. Now, however, depending on what you want to do, housing prices are still pretty high. So, but I do agree overall with this concept. If it's this big place that the two of you don't need anymore, well, that's something to consider.   Tony Mauro: It is, and all of these topics really I would preface with saying it begs the question to at least discuss with your planner, because they're selling... In the video they're saying, "Okay, yeah, do this, this, and this." I don't agree with it all the time, but at least you're asking the question. But the theory here is, is obviously if you've got a big house, only two of you in it, no mortgage, maybe don't want to take care of it anymore, have had it a long time. Could sell the house, take the tax-free gain most of the time, and then either downsize and possibly have more money in your pocket to do something else with.   Now, where I disagree with this a little bit is because housing is the way it is, it seems like a lot of times when people go to sell property, at least in the Midwest, down the coast, maybe if you can make a lot of money that's a different story. But they find out, well, I make two or 300,000 on it, and then I go to find something even though it's smaller and I got to invest all of my proceeds plus the gain because things are up from when I bought, and they don't really get as far as they thought they would. But the theory is good because if you're, like in my own case, I have a fairly large yard and I talk with my wife right now. I was like, "As we age, do we really want to take care of this?" And we own the house already and it's too big just for the two of us, but I don't know. I don't know if I want to leave. So, it's a good question to talk about with your advisor, for sure.   Marc: Yeah. I mean, and it could, to your point, I mean, obviously add some significant capital to a retirement plan depending on, again, what you were going to do. Are you going to just maybe rent? Were you going to get a condo or a townhouse? But those have gotten really pricey lately too. So, it's a worthwhile exercise for sure to see what it could-   Tony Mauro: That's right.   Marc: ... do to your overall retirement plan.    Number two on that list, Tony, was supporting or financially supporting the adult children, sell this item. I absolutely agree with this one, me personally. But I mean, and it's hard for parents to go against the instinct of helping, but you can't finance retirement, Tony.   Tony Mauro: You can't, and I agree with you and with this point too. It is hard, I go through it with my own kids. Now I have a grandchild, and that's although I'm going to do whatever I want with her, but... And there's books been written about it about the... And I think it was from The Millionaire Next Door, I think it was from the book, but somebody was saying that that's economic triage. And then what happens is if you start supporting them, then they expect it. And like you said, they're going to have to go out and build their own [inaudible 00:04:29]-   Marc: And they've got decades still to do it, you don't.   Tony Mauro: They've got a lot of time, yeah. And you're running out of time. And so, I would limit this if you're going to do it at all, and try not to do it. Just for nothing else, hopefully they can figure things out on their own and become their own financially responsible adults, but obviously we're there as parents if they really fall, but I strongly urge my clients, yeah, not to do this.   Marc: Yeah. You made an interesting point too, if they really fall, yes. But I mean, look, at the same time, no, because you're going to have to sometimes, you got to rein it in, especially if your plan is just barely getting you the retirement that you needed or not even the dream retirement but just getting you into it and through it, allowing you to stop working or whatever, every situations are different, you can't sacrifice that to help them. I mean, I know it's tough, but sometimes you just got to bite that bullet or they've got to bite that bullet. But isn't it funny though how like throughout time it's some weird thing like, "Oh, well this is the grandkid and the grandkid is now more important than you. Sorry, bye."   Tony Mauro: I tell you what, it's hard. It really is, because you get like... I never thought I would be like that, but yeah, and you want to ensure their future. I don't know why.   Marc: Well, maybe because they're little and it's like it takes you back to when yours were little. And of course, we're typically in a better position when we have the grandkids to help them out. So, that probably has something to do with it too.   Tony Mauro: That has something to do with it, exactly.   Marc: Yeah, yeah. Good stuff. All right. Number three, expensive toys that become expensive burdens. Some of us spend a lot of years, Tony, the 30s to mid 50s collecting those toys and doing things that we like. And then you just one day go, that's a lot of crap.   Tony Mauro: It is, and I admit it.   Marc: Do I want it? Do I need it? Right?   Tony Mauro: Yeah. And we've all been guilty of it, whether it's a boat, you name it, a classic car.   Marc: Yeah, a travel trailer, whatever.   Tony Mauro: If you've got money, yeah, airplane, something like that. If you're not using this stuff and really don't enjoy it, you do have to start asking yourself is, do the cost of these things sitting around actually match what the enjoyment that I get out of them? For me, a lot of things is not. Things don't interest me as much as they did when I was younger. And now that you, most of the time you get a little closer to retirement, in retirement, you have the money to pay for them. But it's like, yeah, just because I can do it, I don't really necessarily get enough enjoyment out of it to just have it sitting around. Then I've got maintenance and everything else and it just freaks me out. But this is something to talk about with your advisor, especially, if you're looking at all of your assets, which your advisors should know about, not just your investments. He or she should know about everything you have.   Marc: Good point, yeah.   Tony Mauro: They may be able to advise you, "Hey, do you still enjoy this? If so, let's keep it in. If not, well, what can we do with that money to get you more enjoyment?"   Marc: Good point. And in that list, and you could have maybe put point number four here in point number three, but maybe not. I get where they're going from this, but I have a real hard time with this one, Tony. So, this will be fun to-   Tony Mauro: I do too.   Marc: Yeah, this will be a fun debate here. It's the second car. Now the argument is without the commute, two cars sitting in the garage maybe costing more than they're worth in insurance, maintenance, and so on and so forth. And granted, at a certain age, maybe this becomes more realistic, right? But you think about retirement, people are more active, they're more healthy in early days of retirement. The loss of freedom to an American is a huge deal. I mean, think about our country, our identity for, God, since the '50s has been tied up in the car, right? When we built the interstate system and all the vehicles and everything, I mean, this is a big country. And when you want to jump in the car and go someplace, even if it's down the street to the store, you want to be able to have the freedom to do that, right?   Tony Mauro: You do. And I don't have many clients, they talked about it on the video. It might be from a strict, strict planning standpoint, might be something to consider. And again, I maybe asked the question, but you hit it on the head with the word freedom, is that less Americans, at least me I know and almost everybody I know, do not want to give up that freedom of I can go, like you said, get in it and go wherever I want.   Marc: Yeah. Well, Tony, you travel a lot to Europe, right? You were just talking about that on our last podcast, right? Europe is designed differently. They walk everywhere.

  5. Jun 11

    Beach, Budgets, and Balance: What Vacation Planning Really Looks Like in Retirement

    Summer's here. And somewhere between the excitement of planning a big trip and the anxiety of what it costs, a lot of retirees end up doing something that surprises us… they feel guilty about it. They worked hard, they saved, they planned for decades, and then they second-guess a beach vacation. Today, let's talk about how travel fits into a real retirement plan and how to enjoy it without guilt. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc: Summer's here and somewhere between the excitement of planning a big trip and the anxiety of what it costs, a lot of retirees end up doing something that surprises many. They feel guilty about it. So today let's talk about how travel fits into a real retirement strategy and how to enjoy it without all that guilt.   Hey everybody, welcome into the podcast. It's another edition of Plan with the Tax Man. Tony and I are back for more content as we talk about investing finance and retirement. And we are going to talk about, again, that guilt-free vacation, planning, strategizing ahead of time so that you can enjoy some of the things that you really worked towards in your retirement years. And Tony, this works out well because you've had a bit of travel yourself, took a couple of vacations. And how you doing, my friend?   Tony: I'm doing wonderful. Yeah, I'm back from vacations and I like this topic because it is as people get closer to retirement, I think about a lot of these things too, so I'm anxious to talk about it.   Marc: Well, I think a lot of people have heard and probably know and admit, Tony, that most people will spend more time planning a vacation than they do their retirement. That's pretty common in this field. But when you're thinking about what you guys do, strategizing, putting these plans together, when you're building those out for people, is travel and vacation something that actually makes it into the plan? I know some advisors do, some don't. I feel like it's something that you've got to take into account and be budgeting for. And I'm sure that you guys do. What are some reasons why and how does that help the end user?   Tony: Yeah. For a lot of our clients, it's one of the first questions I asked when we get to the point of, okay, what do you want to do in retirement? And if I don't hear, I mean, for a lot of people they say, "Well, I want to travel." But then we try to get a lot more specific with that. But if I don't hear it, I'll ask it. But what a lot of people do is the ones that don't think about it, they plan for everything else and they don't really plan for fun because once we get through everything, it's like, okay, what do you want to do that's fun? Because that's the whole reason for retiring and enjoying the last part of the game of your life.   And so that's one thing I ask them and see if travel comes in there. And I think some people, they feel like they've never traveled a lot in their life so they don't feel like,... They want to do it, but they don't feel almost like they're worthy of it, like they haven't earned it yet, which I think is a mistake because obviously you have.   And if they haven't planned for it, a lot of times then it gets kind of stressful and that's what leads us to, well, let's start planning for it. I mean, everybody's got different budgets and different thoughts about what their travel is. So what's great for me is not going to be great for a client or somebody else, but they just need to get it in their plan and obviously we can throw it out later or we can massage it, do whatever we want. But I definitely think that if it's important to them, we got to get it detailed.   Marc: Well, and I think that some people probably seeing it on paper in their plan makes them feel like, "Okay, yes, I can spend this." Because like you said, they're so busy thinking, "Do I have enough to survive? Do I have enough to live on? Am I going to run out of money?" The classic things there. And it's like, no. And even with the vacation spending in your plan, you're not going to run out of money. I think that gives people that ability to do that more guilt-free.   Tony: Absolutely. That does. And once they know that, yeah, they can ease up a little bit and feel a little more calm about talking about it and actually trying to plan something. It's fun to see when people haven't traveled a lot and they get to do some stuff that they never dreamt they would do.   Marc: And I imagine that budget would change over the years. Like maybe you're budgeting 20,000 or 25,000 over the early couple years and then that tapers down a little bit because I'm assuming that there's a natural rhythm to how retirees spend. And we've all heard the terms about the go go and so like that. So obviously early on, most people are probably wanting to do more because A, free from work, I'm free from the time clock. But also B, I'm feeling good enough to go do it.   Tony: Yes. And I used to think that too. I used to think that my retirement was going to be just the same from the beginning till the day you die. And as I've watched people over the years, that's so far from the truth because you're exactly right. Most of the time, as soon as people retire, they want to hit the travel and hit the stuff on the big bucket list as soon as they can for the reasons you mentioned. And then we see about 75-ish and beyond, things slow down. Your body isn't moving quite as fast. The mind isn't working quite as fast. And so they don't want to be so far from home in case something happens. And so it really starts to slow down. And then you get over most of the clients I see anyway, over 80, 82 years old, it's really gone to where those days are over.   It's really just visiting family and trying to stay closer to home. So your travel budget does, it starts out high and then it starts going down, which even I think is more of a comfort to people to get them to take and do things while they're a little bit younger in retirement because you're not going to do this forever.   Marc: Right, right. Yeah. And everybody, again, situation is going to be a little bit different. I imagine you often have to, and we've talked about this many times in other aspects of the retirement strategies, you have to put on that therapy hat, for lack of a better term, because I imagine there's many couples that don't see eye to eye on travel spending, right?   Tony: There's a lot. Yeah.   Marc: You got to balance some of that. What are some things to think about there?   Tony: Well, generally, if we're on that page and somebody they can't come to an agreement, we definitely try to talk it out with both spouses usually and let them know that they are going to have the money to do it. Now, if there's some other reason that they don't want to go, then we can get that out in the open. But really we just try to convince them that you are going to have the money and you don't have to worry about that. Now, if you're averse to travel planes or something like that, I can't really help them with that, but it's really not the trip itself. It's just really kind of talking through, seeing on paper, reassuring them that, "Hey, this is able to be done." And see what they do. Sometimes they compromise, sometimes they don't. It's kind of funny to watch, but it's kind of interesting.   I only had one couple where, and that's a real trouble where one of the spouses, she just didn't want to travel at all. I mean, it doesn't matter what the other spouse or I said. They had plenty of money and so he ended up kind of doing some things by himself and she was okay with it, but that was a rare instance. Most of the time they come up with something.   Marc: Yeah. And again, how you've lived leading into that, my wife travels a lot for work so I know that she's going to want to do a little less than... And I don't travel. I don't leave the house at all very much because I can work from my home. So like a lot of people have done, so I imagine that adds an interesting dynamic too where one wants to go, one doesn't want to go. So you got to kind of find that balance. One wants to spend, one doesn't want to spend. So finding that balance. And a good way of thinking about this, Tony, is the plan itself might become the referee, right? Because then when it's in the plan and it's structured out and you go, look, you can see it. And then it maybe diffuses some of those arguments.   Tony: It does. Yeah. Because once that time period comes up in the plan, everybody's ready for it. There's not any real surprises and they know they have the money. And yeah, it does ease the stress of it again.   Marc: The tensions a little bit. Yeah. Yeah. Do most people think far enough ahead when it comes to planning for travel? I mean, I imagine most don't, right? I mean, there might be somebody who's a bit of a big planner, "Hey, I want to take this really big family trip three or four or five years out." But I imagine most people probably don't do that.   Tony: They don't. I see this so often that they want to travel and then it's like, well, let's do something in six months. And then, okay, you could do that, but I think you need to focus on, especially in retirement, come up with a plan. I get a friend of mine because he always laughs at me because I do plan three, four, five years out even now for travel. I've got it already down for the next four years. At least what we think we want to do, obviously you can change it.   Marc: Yeah, but it gives you time to kind of build in the funds and kind of see what you're going to do. I mean, things pop up like a popup wedding destination or something like that, sure, but a little bit of structure could help.   Tony: It certainly can help. And I tell you, the shorter term planning, to me, I don't like surprises and most people don't. And I think some o

  6. Mar 26

    Inside Your Financial Easter Basket

    Quick question before we get started... which Easter candy are you most looking forward to this year? Whatever your answer is, we're going to use it. Because today we're building a financial Easter basket and matching some of your favorite candies to the products and tools that belong in a solid retirement plan. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1  00:00 Quick question before we get started, which Easter candy are you most looking forward to? Yeah, that's my opener for the podcast this week, because we're going to talk about financial Easter baskets. So we're going to talk about candy and what they might say about you here this week on plan with the tax man. You   Speaker 1  00:35 everybody. Welcome into the podcast. This is plan with the tax man with Tony Morrow from tax Doctor Inc, at your planning pros.com that's where you can find them, online. Your planning pros.com, and Tony, we're gonna talk candy, because you and I are in our 50s and we love candy, but it don't love us as much anymore.   Tony Mauro  00:53 That's right. And I grew up eating candy and all these things, although my favorite Easter candy is not on there.   Speaker 1  01:00 Okay, we'll add that. Get to that at the end. Yeah, we'll add that in. So what are we going to do here? Is, I want to give you some, some, you know, Easter candy in lieu of the, you know, the end of the month here and Easter upon us. And we'll do a little financial Easter basket, and let you kind of give me some sort of, we'll do some sort of an analogy. I'll set you up with something, and I'll let you kind of talk about it, so we'll have a little bit of fun. So, are you a jelly bean kind of guy? Easter time? Do you like some jelly beans? You know? I like the kind of, what I would call those artisan jelly beans that they now have come out with, you know? So I do like them. But we always used to get just to run the mill stuff. Oh, yeah. Like, like, you know, I don't know Apple Cinnamon, or, you know, I don't know pumpkin spice or something, yes, although they probably do make a pumpkin spice Jelly Bean. And people are probably like, no pumpkins for October, not for, you know, April, but so, all right, the Jelly Bean, so, lots of colors, lots of combinations, right? And so maybe you're, maybe the analogy here is the 401 k right? Maybe, maybe some combinations, or some, some different things, some variety, potentially, yeah.   Tony Mauro  02:08 I think the biggest thing for, you know, the anchor of most retirement plans is either, you know, 401 K Sep, simple, you know, you name it as the anchor for what you're trying to do as you get toward the end.   Speaker 1  02:23 True and jelly beans are probably a good staple, a good anchor in the basket, if you will.   Tony Mauro  02:27 Yeah, you know, good anchor in the basket, you know. And you find them in every basket. If you don't have this, you know, you need to be starting it. Most employers are offering something these days, and you need to get started. I can't. We're in the midst of tax season, and I'll say this as a public service announcement, I and I've been doing taxes for 30 years. Is I always when I'm reviewing a return, look at somebody's w2 and look in box 12 and see what they're contributing or not contributing to their retirement plan. And many times I see the box check that they the company offers one, I see nothing being contributed, or I see a little bit, which is better than nothing, yeah, but you got to get it going, because it's one of the best deals on the street. It's usually some free money in there. And I think you need to start those early, the use time and compounding and everything else, so that you've got this anchor for when you you know, are at the end,   Speaker 1  03:22 yeah, I don't know why. I just got hit with it. You're talking about, you know, out there on the street, I'm thinking jelly beans in the street. And also I'm like, could you imagine a funny little world where we're out there dealing jelly beans on the corner? Hey, man, right, I got some, I got some pinks. I got some yellows. I got some of those, those terrible black ones. They're those are never very good. I'm not a big fan of, maybe it's just the, maybe it's just the, like black liquors, not very good   Tony Mauro  03:47 to me. I never did like the black ones. But I think, though, to your point, with the different colors, once you start contributing to one of these, then you need to have some diversification. Most, most retirement plans will offer you, you know, an array of different choices, which is, you know, probably behooves you to work with your advisor and come up with a strategy as to what those choices should be.   Speaker 1  04:09 Now, the Jelly Bean choices in the 401 k are, it's not crazy assortment of colors, right? So, like an IRA, you're going to have a lot more to choose from, you know, because you're kind of stuck with whatever they you know, the company goes within those 401 K options. So some people, Tony, often think about, hey, look, from a workplace plan, get that match, get that free money. But then maybe let's do some contributing to an individual account or something we set up so we have more control or more options. How do you feel about that strategy as well?   Tony Mauro  04:39 I like that strategy a lot. Well, that's what we generally will say, is, is somebody comes in, we tell them to start with their 401, K, get that company match. You could certainly continue to max that out if you want. Yeah, absolutely. And then one. Once you get to that point, then you've got to turn to outside. It might be a Roth, might be a traditional something like that. But yeah, if at least get the match. And then if you want more control, total control, then you have to go to an IRA or Roth. The only, the only drawback is, is you are limited on your contribution. So if you want to do more, you got to stay in that retirement plan with some of that. But yeah, they're all three are good ideas.   Speaker 1  05:17 Okay, all right, so moving on here with our Easter basket analogy, things you might find on the Easter basket and the candy, and then how that, you know, might correlate to something. Let's talk about peeps that teach the nasty. And if you like peeps, don't yell at me yet. I'm gonna give you I'm gonna do pros and cons here. But, you know, look, when you're a kid, man, they're colorful, they're fluffy. They're marshmallowy. A lot of kids like peeps, right? They're just kind of fun. You're kind of play with them. You stretch them out a little bit, you chomp on them. They're sticky on your fingers. But as you get a little older, I don't know, they're kind of nasty, right? And they're kind of a pain a little bit. But, you know, some people grow up and they still really love them. And this, to me, is got to be life insurance, right? Because it's kind of like when you're younger, you kind of dig it, right? And then you get older, you think, why do I like this? Or why do I do I even need this anymore?   Tony Mauro  06:08 Yeah, and, and just like peeps, and I don't like peeps anymore. I used to like them, right? Just like you life insurance generally, when we start talking about planning, is not very well, I would say, understood number one or used. So it's not everybody's first choice, that's for sure. And when we start talking to them about it, you know, everybody you know is going to die. And when you're younger, obviously, you know, especially today, term insurance is peanuts to get and protect your family. My son, who's 30, you know, got a new daughter. And, you know, home, and, you know, start accumulating debt, because they're just getting started, it's important that they have coverage. Yeah, for the family, in case one of them, you know, goes down. And yes, you can get some coverage through your employer, which obviously you want to take advantage of that. But it generally is not near enough to what you need, especially as you are younger now, as we age, we get in their 50s, like me, and I'm looking at my life insurance, and as some of this kind of is set to expire in the next five or 10 years, I don't need this much anymore, because I'm, you know, I'm closer to the end, all my bills are paid off, you know, it's in my other financial You know, situation is intact. So you may not need that. Now, some people say, Well, you know what, I don't care if I don't need it. I want it. I want to know if i i think a perfect scenario is I'm at retirement. This is me talking personally. I know that if I pass away, I can, I can, while I'm living, enjoy some of my money I've worked so hard for and I know that, okay, my son, if I'm going to pass money on to him, is gonna be taken care of through life insurance. And some people like, like, like, that angle as well,   Speaker 1  07:49 just like peeps, right? I mean, in some people love it, and it's not everyone. Some it's not everyone's first choice sometimes, right? So, but it could be a useful tool, right? As far as the life insurance thing, right, to pass on that wealth. So at least consider the conversation, have a chat and discuss it, because, again, life insurance is one of those pieces of the retirement strategy that, you know, it's, it's, there's some more wiggle room in there, but there it could be, or life insurance products in general, there could be some aspects of those tools that can be beneficial. So again, talk with your financial professional about that. And of course, Tony's here to help if you've got those questions as well. All right, inside the financial Easter basket, diving back in. Here we go. Here, robin's eggs. Okay, now, we didn't get these often, but occasionally we did. We get these interesting little candy, right? Kind of a divisive candy. Some love them. Some can't stand them. Kind of like peeps, r

  7. Mar 12

    Tax Mistakes New Retirees Make

    Nobody likes tax season. But for new retirees, it can come with a few unwelcome surprises. The rules have changed, the income sources have shifted, and strategies that made sense during your working years may no longer apply. Today, we're looking at some of the biggest tax mistakes retirees make, as discussed in a recent Kiplinger article, and whether these match what we see in the real world.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1  00:01 Nobody likes tax season, and certainly not even Tony Morrow here on playing with the tax man. But for new retirees, it can also come with a few unwelcome surprises. So this week on the podcast, let's talk about tax mistakes new retirees make. Look up in the sky. It's a bird.   Nick  00:17 It's a plane. No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for plan with the tax man.   Speaker 1  00:32 Everybody welcome into the podcast. Thanks for playing tour. Thanks for hanging out with us here on plan with the tax man. If I can get my thoughts together, Tony, it is tax season. And I made the joke there in the intro that not even you like taxes, even though it is obviously something you've been doing for a long time as a CPA and a CFP and an EA of 30 plus years. But it is a it is a hectic, confusing time, for sure, every year, isn't it? It really is. And as we're taping this, we're right in the midst of it. And it seems to me, you know, I mean, we like helping clients, but this truly is, you know, compliance season, you know, and the tax planning has to go on before after this. And so what I find, ever since covid, it seems like taxpayers, our clients anyway, tend to really just kind of put it off. And, you know, we're down to kind of where we prepare tax. Most of our tax returns is March and April. It used to be kind of from mid January on, but yeah, stuff gets out later and everything's slower, yeah,   Tony Mauro  01:31 yep, yeah. So it is a hectic time. And I understand, from a taxpayer standpoint, nobody likes to gather all their stuff and they put it off and yeah, you know,   Speaker 1  01:40 yeah, yeah. So yeah. But we were just talking before we started the podcast, folks, and I was saying, I got to get my stuff over to my CPA. And of course, you know, he was like, Well, why isn't toning your CPA? Well, we're in two different parts of the country, so that's the beauty of the internet. But, but, and he's, you know, he's like, look, my public service announcement to everybody out there is, get them this information as soon as possible, so they have time. And I was like, Okay, I'll get it over there. So I got scolded. So not that, not that we, all, you know, don't do it right from time to time, Tony, but yeah, the sooner we can get it in, the better, right? But it is. Let's talk about tax mistakes for new retirees, specifically on this week's podcast. Okay, because there's a recent article from Kiplinger, we'll put a link into it there, talking about big mistakes that tax retiree new retirees make. And so we'll focus on some of those comments there, and just kind of get your thoughts on it and see how it matches up with what you see, you know, in the real world, right, from just you know, from just an author as an article standpoint, versus what you see in the trenches. So starting the conversation with ignoring the upcoming RMDs, especially if it's your first one, right? Yeah, so you got to be careful here. So talk to me a little bit about that, and some of the stuff you   Tony Mauro  02:49 see, well, some of the stuff we see, and we, you know, base what we see, because a lot of our retail tax clients are retirees or nearing retirement, and so we do see a lot of these things come up, rather than, you know, working with the younger crowd who don't have these problems yet, but they will. But yeah, ignoring the RMDs. I mean, RMD is required minimum distribution, you know, for those that are unaware. And so you you may have an IOU to the government for these, and they're going to come knocking and say, hey, look, once you reach a certain age, at 73 now and 75 for people like me, born after 1960 you need to start taking money out of your tax deferred accounts, because the government says you have to, because they want their their tax. They want their cut. That's right, they want their cut. So it's important that you work with your advisor or figure this out, because there is a large penalty if you delay this past the date you're supposed to do it, so you don't want to get in that situation, and then you have to start taking this money out every year, which creates a little bit of a tax problem, because you're going to, you're going to have some taxes due on this and whatnot. But the kind of, the hidden problem is, is the government will allow you to defer this a little bit past your full retirement age or your RMD age, but you got to be careful, because then you could end up taking two in one year if you wait till the last minute. So you want to plan this carefully,   Speaker 1  04:08 and you can do that the first time, right. Tony, you can push it back on that first one, but to your point, you'd have to take two, and that could cause you to bump a tax bracket if you're not careful, right? If you're   Tony Mauro  04:20 not careful, depending on how much you have to take out, you hate to go into the next tax bracket and pay some extra tax needlessly, when just a little bit of planning could have saved you. That Gotcha. So I would stay, you know, stay ahead of that and work with your advisor. So, you know, these important dates coming up and your options, yeah, you know.   Speaker 1  04:37 And of course, we're off conversion conversations, and are going to can fall into there. And, you know, just again, getting efficient with it and getting handled is just gonna remove some of that stress. And people are always the question always comes back, I don't need it. Why do I gotta take it? Well, we said it a minute ago. The government wants their cut, right, right? They want their cut. There's no way around it. People often ask that question to Tony. They're. Like, how do I get out of the RMDs? It's like, well, you don't, well, I heard a Roth conversion gets me out of it. No, you're just convert. You're still paying the taxes. You're just moving it to an account that you want, that your heirs won't have to deal with, or, you know, later on,   Tony Mauro  05:12 that's right. And Roth conversions really can be a really powerful tool. We use them all throughout the age brackets, depending on your stance on, you know, if you want it, you know, tax free forever, or tax deferred, and worry about it later. But Roth conversions, if done correctly, you know, and you gradually do them over, you know, especially your early retirement years. So really, what that means is, all you're doing is taking money out before your RMD, paying taxes on it now, no penalties, right? And filling up the tax bracket you're in not going into the next one, so you're not paying tax needlessly. And then you got, you've got that money out of Uncle Sam's crosshairs for the tax IOU, because it's, it's now tax free forever, the earnings, and, of course, the principal,   Speaker 1  05:57 yeah, and keep So, yeah, yeah. And definitely keep in mind, I say, like the state you're in, right, their state, lower tax, state issues. You know, people often think about moving as part of that equation when thinking about Roth's right, or the Social Security factors, Irma right, triggering the Irma cost. So just make sure that if you are considering a conversion, you're doing it correctly.   Tony Mauro  06:16 Yeah, and all of those points are good points, because all that stuff comes into play. I get a lot of seniors. Do they get tripped up on the higher Medicare costs, because all of a sudden, you know, their income is way high, and then they get a bigger Medicare bill. Course, it's coming out of their Social Security. And then they're mad. You could file some forms and do some things there to get it back lowered, but it's just more work and more, you know, and it's tricky too, Tony, because it's a two year. Look back. Two year, look back. Yeah, so it's, again, a little planning goes a long way in this area, you know, going back to my first point, all of these require some planning, but it's not difficult. It's just you got to have the conversations.   Speaker 1  06:54 Well, you and I were chatting when we first kicked things off that people are owing a bit this year. You're doing some returns, and people are, you know, and you know, and you were kind of surprised to see a few more people owing, which is interesting, because, you know, we were seeing a lot of reports in February that, you know, with the new tax law changes and things that they expect more people to get, you know, returns and so some confusion, again, around the whole social security piece. So again, as a new retiree, that's our conversation point today, getting blindsided by Social Security taxes is a thing, and unfortunately, the confusion around what happened with the passing of the Oba is still tripping some people up. Right? They did not remove taxation on Social Security. They added a senior deduction, right? Added a senior   Tony Mauro  07:39 deduction, which is helpful for the seniors who don't have a lot of other income outside of Social Security and a few other sources, but it's not as helpful to the higher income retirees, because it does get phased out. They don't mention that. And what happens? What I've been seeing this year as we were talking is I see a lot of people that are at their full retirement age or beyond, and starting to take out and spend some of their money, which is great, sur

  8. Feb 26

    From Zero Savings to a Million-Dollar Exit

    For many business owners, retirement savings don’t show up neatly in a 401(k) or IRA. They’re tied up in the business itself. Today’s listener question comes from a couple facing a sudden transition from “almost nothing saved” to managing a large lump sum late in the game. And they’re wondering if it’s enough.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1  00:00 For many business owners, retirement savings doesn't show up neatly in a 401, K or an IRA. It's tied up in the business itself. Well, this week, we're going to tackle a question from a listener dealing with the possibility of selling a business and what that might look like for their retirement. Look up in the sky. It's a bird,   Nick  00:22 it's a plane. No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for plan with the tax man.   Speaker 1  00:36 Hey, everybody. Welcome into the podcast. This is plan with the tax man, with Tony Morrow from tax, dr, Inc, find them online at your planning pros.com that's your planning pros.com where you can drop a line into the team and get yourself some time onto the calendar, and, you know, ask your questions, get some things answered. And we're going to take a listener question here this week on the program Tony, about selling a business. And I know you've as a business owner, you've also got a lot of business clients, and so a lot of people do find themselves in this position in America, a lot of small business owners. So we're going to tackle this here a second. But first, how you doing? I've been doing real well. You know, I like this topic because it's near and dear to my heart, and we have a lot of clients that I've seen experienced this exact thing we're going to talk about. So I'm excited to talk about that. And Spring is almost on us, so things are good, good. Well, yeah, let's dive in. Let's because there's quite a few additional pieces that is kind of a lot of lot to unpack here for if we want to dive in. And we'll try to keep this within our normal timeframe here, but see if we can help some folks out, if they might be in a similar situation. So here's the setup. The listener says, Look, I'm 60 years old. My husband's 58 we're definitely behind when it comes to retirement savings, because we have basically nothing saved, but we put it all into the business, and we're going to be selling our business soon for just under a million bucks. I'm very nervous about dealing with this large sum of money, since we don't have any investing experience. Wondering where should we start, and Will this be enough to retire? On any pointers you can help would be great. So I guess we can start with a couple of pieces of this Tony. So when you're, when you're selling a, you know, a business, and you've not saved anything, I mean, it is very it's awesome that the business is, first of all, I guess, sellable, enough that you're, they're selling it and making this money, right, right? That's the first step. I think for a lot of business owners, it's like realizing, hey, is this valuable? Is it sellable? You know, is there value there? And then, if you do sell it, now, what do you do? So what's some things to think about here?   Tony Mauro  02:27 Well, I think the first thing to think about is, and we see this a lot, is, I'll tell you, what they all say is, when we start talking about retirement and whatnot, they all that's what they say is, look, I'm not saying for retirement. My retirement my retirement is gonna be my business, and I'm putting all my money into the business. And so when we that's how the conversation starts. And then in this case, you know, I'd love to know more about it, but I'm gonna make an assumption here that they are gonna be at a million. I don't know what just under a million means. Yeah, let's, let's round it off for easy. Yeah. We'll just, yeah, we'll round it off. But what a lot of people don't realize is, if it's a service business like mine, or they don't owe anything on it, you sell a business for a million and you have no basis, which is kind of like, you know what you paid for your stock, then all of that potential money could be taxable, and if you're getting or giving up, say, 20% of it to the feds, another three or four to the state, you could end up with maybe 750,000 total after taxes. And then you also, you know, you got to factor in selling costs and things like that. So I'm just going to use 750,000 so it's not the million you think, because you're going to owe some taxes. Now, there's a lot that goes into that, because that capital gains, Tony, that's capital gains, yes, capital gains, taxes, and so you know, at first glance, you're 60 years old, and you've got 750,000 net to to, let's say, you know, save for retirement. Are you going to retire now or not? Or because I don't to me on the surface this probably, I don't know if it's enough or not. Depends a lot on their lifestyle and what they want out of life. Well, I don't know, yeah, what enough means?   Speaker 1  04:10 Let's break that down for a second. Okay, so based on your question, there is a million enough, or even 750,000 Well, first of all, the ages were 60 and 58 so you can't even access social security yet for either person, and you certainly can't access medical. So those are two pieces that certainly have to pop up, and if you've done no saving at all, then you're basically rocking this 750 grand for at minimum two years before the first person can turn it on for Social Security, Tony and and five for medical right? So that could be a huge problem. You know, in eating away that 750 may not last for someone's lifetime of 20 years more, I definitely don't think it'll last person's lifetime for sure, because if you know it just isn't going to work again, unless you're going to what you. Retirement to you is, you know, 3040, $50,000 a year total. But let's say, like you were saying, You got to go two or three years with spending, let's say 50,000 including, you know, paying for your for your medical and all of that. Well. Now you're down to, you know, 600,000   Tony Mauro  05:18 and you know, you're, yeah, or less. And you know that's not gonna last you 20 years. You know it just won't even at 50,000 a year. Even if you're earning, say, four to 6% on it, it's it's definitely not gonna be enough. I think it's good. You might know that now, yeah, and hopefully, if maybe the sale is not final, right now you're just thinking, maybe you keep it for a while and build it up and or save and then sell it later. That's a possibility. But I think let's say they're going to sell it now anyway. I think what you definitely need to do is get all these numbers with your advisor and start thinking about, you know, spending. I think you should think about, well, what are we going to do for the next 10 or 15 years? Because we really can't, other than this, we don't have any more income coming in. How are we going to save more?   Speaker 1  06:11 Because, yeah, you've got to get a plan together. I mean, you just mentioned, like, if you're making 4% off of the 750 that'd be the first question for someone like this, who doesn't know even where to start. Where do they park it? To get seven, you know, to get 4% right? So you want to get with an advisor. Are you looking at maybe some in an annuity? Are you putting some in the market, you know? Because you need to be a bit more aggressive, because you don't have any other money saved. I mean, there's a, this is where a financial strategy really comes in handy.   Tony Mauro  06:37 I think so. And I hit on a good point I was going to mention, is, I'm not a huge proponent of annuities, but they have their place, and this might be one of them, if, you know, you talk with your advisor and you figure out, I need an income I can't   Speaker 1  06:51 outlive, right? That's what I was thinking. Was the guaranteed income putting, you know, I don't know, you know, 200,000 or something of that into something that generates income. Yeah, it   Tony Mauro  07:00 generates income, and, you know, you can't outlive it, because I think that's the biggest fear with this couple, or biggest threat, I should say that they'll face is outliving this income. And if you've got nothing else coming in, eventually it's just gonna be down to Social Security, which is a meager existence, right?   Speaker 1  07:18 Yeah, so and that. So the whole question of what's Enough? Enough? Well, that's lifestyle. And, you know, all those pieces go into it. So, Tony, if you were, if you if this person came into your office and said, help us out, right? So you would start with, you start putting, kind of the, you know, the strategy together. Start putting an income piece and expenses right. Is, do they is, do they have a home? Is it paid for? That? That changes things, right? Changes things so there's a lot of data that would then go into hopefully helping somebody like this kind of see in black and white, are, where are we? Are you behind? Do you have a shortfall? And how much   Tony Mauro  07:52 exactly a client like this? This is why I love this topic. This is a very, I want to say, complex, but a very in depth conversation you need to have with somebody, with your advisor, because you have to lay all this out, and then you as the client got to be able to picture this. This is what it's going to look like. I've seen it before. And are you okay with that, or do you need to make us, you know, maybe make a change. But I think if you're going to go through it, that you really got to, you know, buckle it down. And, you know, figure this stuff out, the income needs, the expectations on longevity, all that kind of stuff. And so you are not going to get there. And because I've seen t

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About

Financial, tax and retirement planning guidance from Tony Mauro. Tony is the original Tax Doctor, serving central Iowa. We’ll teach you how to properly plan for retirement, minimize your tax burden and attain a successful financial future.

Information

  • Creator
    Tony Mauro
  • Years Active
    2019 - 2026
  • Episodes
    98
  • Rating
    Clean
  • Copyright
    © Copyright Tony Mauro
  • Show Website
    Plan With The Tax Man

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