Ready For Retirement James Conole, CFP®

Joe is planning for retirement and wants to minimize his tax burden, especially on the interest earned from his three annuities. James explains that non-qualified annuities are purchased with post-tax money and offer tax deferral on growth until withdrawal. When taking out funds, the principal is tax-free, but earnings are taxed at ordinary income rates. 

He explores strategies for tax-efficient withdrawals. He also touches on annuities, options like a 1035 exchange to transfer an annuity into a different product for improved performance, the tax implications for heirs, and early withdrawal penalties before age 59 and a half.

Questions Answered:
How are non-qualified annuities taxed upon distribution, including both lump sum and annuity options?

What strategies can be implemented to keep the tax burden as low as possible when withdrawing from non-qualified annuities?

Timestamps:
0:00 - Joe’s question
1:52 - Non-qualified annuity overview
5:11 - Potential tax strategies
10:02 - Annuitization option
12:31 - Annuity regret
13:22 - 1035 Exchange
14:33 - Things to know
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Deciding to work with a financial advisor is about more than how much you've stashed away. It's also about determining whether an advisor's benefits outweigh the costs. 

In your higher earning years, finances become more complex. More money means more decisions and more chances to make mistakes or miss out on opportunities. That's where a quality advisor can come in handy. They help you steer clear of bad investments, seize the right opportunities, and keep financial stress at bay.

Having more than one perspective to draw from is the key to well-informed financial decisions. Teaming up and talking it out, whether with your partner or a financial advisor, is always beneficial.


Questions answered:
How can I determine whether working with a financial advisor is worth it for me?

What factors should I consider when deciding if I need a financial advisor beyond just my age or income level?

Timestamps:
0:00 - Not an age-related decision
2:43 - Value and pricing structure
4:12 - Natural conflicts 
7:24 - When benefit exceeds cost
10:02 - Cost of mistakes
12:18 - Cost of missed opportunities
14:16 - Cost of anxiety 
16:02 - Thought partnership
21:36 - Summary
Create Your Custom Strategy ⬇️

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Listener Ray is wondering what to do with his home as he embarks on a nomadic, van-life journey in retirement. Should he sell it to finance his travels or retain it for potential appreciation and cash flow? 

James explores the nuances of home ownership as an asset versus an investment. He considers cash flow and leverage as he looks at Ray’s three options – sell, rent, or borrow – while emphasizing aligning financial decisions with personal goals and aspirations.

Questions Answered:
Why shouldn’t I consider my home an investment?

What are the key financial considerations for retirees when deciding whether to sell, rent them out, or explore other options?


Timestamps:
0:00 - Ray’s question
1:56 - Why a home isn’t an investment
4:38 - Do you want to be a landlord?
8:22 - The financials
10:14 - Asset appreciation
11:30 - Cashflow
15:04 - Leverage
19:02 - What should Ray do?
20:33 - Reverse mortgage
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Listener Drew asks about a tax strategy for juggling capital gains and Roth conversions. While it can be a complicated question – especially when large accounts are involved – James provides some general guidelines that can be helpful for anyone with similar gnarly tax strategy challenges in retirement. 

In this episode, we’ll cover the extent to which required distributions will be an issue, what you need to alleviate that issue, and the timeframe within which you have to do that.

James explains how to work backward to project your various tax brackets and determine how to prioritize tax gain harvesting, Roth conversions, and other tax strategies.

Questions Answered: 
What is tax gain harvesting?
What is the tax planning window and how do I use it to my advantage?

Timestamps:
0:00 - Drew’s question
2:50 - Determine use for each asset
5:59 - Tax gain harvesting
11:10 - Back to Drew
15:30 - James’ priorities for Drew
18:41 - Usually not either/or
20:07 - Working backwards
24:50 - General principles
29:50 - Tax planning window
32:16 - Summary
Create Your Custom Strategy ⬇️

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James responds to listener Jerry’s question about the optimal time to distribute inheritance or charitable gifts: before or after passing away. 

James walks listeners through four important things to consider when it comes to gifting and inheritance: your gifting goal, whether you have a strong desire to see the assets gifted within your lifetime, the tax implications of various types of gifts, and what to do with assets you plan to retain for now but are intended for future generations.

Questions Answered: 
Should I give my children and grandchildren their inheritance before or after I die?

What are the tax implications to my children when I gift them my assets?


Timestamps:
0:00 - Jerry’s question
2:20 - What is your gifting goal?
3:38 - Gift during your lifetime?
6:51 - Timing and priorities
9:17 - Different tax implications
12:08 - Exemption amounts
14:13 - Tax implications to child
15:33 - Proper beneficiary designations
21:41 - The right time horizon
24:45 - Summary
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A listener says, “Eventually, one spouse will pass before the other, which will often catapult the survivor into a significantly higher tax bracket. Shouldn’t a Roth strategy take this into account?” 

James explores several factors that could positively and negatively impact a survivor’s tax liability and what to consider when creating a Roth conversion strategy. 


Questions Answered: 
How can Roth conversions benefit married couples beyond tax savings?

What factors should be considered when determining the optimal strategy for Roth conversions to protect a surviving spouse?

Timestamps:
0:00 - Steve’s question
3:40 - An example
6:41 - 3 changes
12:32 - Positive impacts
15:22 - RMD calculations
16:45 - Widows tax penalty
19:46 - When to do Roth conversions
23:40 - Big age gap
28:45 - Start with a good reason
29:57 - The bottom line
Create Your Custom Strategy ⬇️

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