everything around us is going to continue to increase and there’s nothing we can do about it and so the cost of goods increase. Here’s another way to think about this. If you have $100,000 in the future, let’s say in 20 years from now, if we saw an average 4% inflation, that $100,000 would be able to replace would be able to purchase only $44,000 of goods.
If it’s a 2% inflation rate, that same 100,000 that we’re able to spend today is only going to allow us to spend $66,000 in 20 years from now. So, we need to take into account inflation when we’re projecting spending. You know, we might be spending 10,000 today, but in 15 in 10, 20 years, we need to be spending more to keep up with the same type of spending. Now, you might hear this say, “Oh, well, we’re going to invest in stocks, but because stocks keep up with inflation.” Well, yes and no. This chart is showing you that the dot is the inflation for the year and what the S&P 500 returned in that year. So, if you look at 22, we saw almost 9% inflation, but the market declined almost 18%. So there are years when the market keeps up with inflation, but then there’s also years where inflation the market does not keep up with inflation. So it’s making sure you’re properly allocating your assets to hey, how do we keep up with inflation but also minimizing some of the risk that you take within your portfolio. Let’s talk about taxes. You know, even in retirement, you’re going to be paying taxes. And what are all the various types of taxes? Well, this chart is showing the historical income tax rates. So, right now the top marginal tax rate is 4 40.8%. That’s 37 plus the additional 3.8% for the um Medicare search charge. But going back to the 40s and 50s, the top marginal tax rate was almost 90%. So over time taxes actually have come down to the top marginal tax rates. Now if you look at the last 40 50 years with all these different tax codes that we’ve seen over time sometimes we get standard deductions sometimes we’re able to deduct certain things but the average effective tax rate if you’ve been in the top marginal tax rate has been about 22%. So the biggest thing to kind of again kind of understand is that we are still going to pay taxes in retirement. There was this thought that taxes were going to go up in 26, but the big beautiful bill was signed last year that basically kind of kept the same tax code in place going forward. Now this is a per this was a permanent this was permanently put in place. All that means is there’s no expiration date. Congress could come in and still make changes to the tax code, but so we’ll see what happens and you know, we’ll see what happens in the midterms. We’ll see what happens in 28, 32, and so on, what taxes are going to look like going forward. But right now, they they came in and kept the same tax code as what we saw in 2017. They also increased the same deduction um for joint and single filers and they also came in and provided a bonus deduction for seniors over 65. So what this is is you get an additional 6,000 standard deduction if you’re a single person and your modified adjusted gross income is below 75,000. If you’re a joint filer, you need to be below $150,000 to receive that $6,000 additional standard deduction. Now, this bonus deduction that you’re getting is temporary. This does expire in 2028. So, you know, again, permanent verse temporary. This is a temporary deduction that will expire. Social Security is still subject to taxes. You’re looking at something that’s over 40 years old. That’s never changed. Now, when it comes to how social security is taxed, they look at provisional income, which is your adjusted gross income plus half of your social security benefit and any tax exempt interest. Whatever that adds up to determines how much of your social security is added to your adjusted gross income. So, if you’re a married couple and your modified your provisional income is over $44,000, good chance is 85% 85% of your social security is going to be included in your adjusted gross income. Now, it’s not a 50% tax or 85% tax. It just means that portion of your social security is subject to tax and depending on what your other adjusted gross income is determines how much your tax liability you pay on your social security. But social security is still subject to tax. They did come in and kind of add this boner deduction to help people reduce taxes on social security. But at the end of the day, social security is still subject to tax. Now, something also that you need to be aware of is that if you’re a married couple, there’s some kind of widows penalty. And what that means is if one spouse passes away like while you’re married you get to file marriage filing jointly but when one spouse passes away the other spouse at that time be is filing at a single rate. So upon the first death of uh upon the first sorry upon the death of the first spouse you know one social security stops there’s a reduction in retirement income you go from a joint to a single filer you lose one standard deduction um and your Medicare premium is now based on a single filer also. So you can see how going from married finally jointly and then one spouse passes away, chances are your tax liability could increase at that time. Here’s another way to look at this. This is uh some of the this is a plan that we’ve done for a client and it just lays out the tax liability. Every line represents a different tax bracket for them. So, while they’re married filing jointly, you we know that they’re in a 12%. When RMDs kick in, they’re going to be in a 22. But when one spouse passes away, the surviving spouse is going to be in a 24% tax tax liability. And we call that the widow’s penalty. Now, a lot of planning around tax planning has been going on regarding talking about Roth conversions. Roth conversions are a way to help you reduce your future tax liability. So that’s when you’re coming in and saying, “Hey, I want to pay in the taxes on money that I have in my IRA, convert it to a Roth IRA that’s going to allow that money to grow taxfree.” So going going back to that example, you say, “Hey, like I still have like $20,000 in a in my 12% bracket. That’s what I can convert pay 12% on and it’s going to help my reduce future tax liability down the road. So this chart kind of lays out, hey, should you or should you not do Roth conversions? First, do you think taxes are going to be higher or lower in the future? If you think taxes are going to be lower, maybe you shouldn’t do Roth conversions. But if you think your taxes are going to be much higher, then maybe considering Roth conversions. Depending on the time horizon you’re going to need to use this money will kind of determine if you do Roth conversions or not, too. Because if you’re going to use that money in the next year, like well then take it out, pay the taxes, and put it in savings because there’s no point in doing a Roth conversion and then next year just taking the money out of the Roth. You want to convert. Let the money sit there and continue to grow all taxfree for a long period of time. Availability of funds paying the taxes again Roth conversion is when you’re taking money out of IRA. You’re convert you’re moving it over to a Roth. Whatever you move is becomes taxable in that year. So you have to kind of figure out like what is my tax liability? If I do this, how much additional taxes do I will I owe and how do I pay the taxes? If you have money in savings, use the money in savings to pay the taxes.
Also, it’s a great way to for estate planning. If you know your kids are in a much higher tax bracket than you, maybe it makes sense to say, “Hey, I’m going to pay the taxes on this. That way, when you inherit my money, it’s going to be all taxree for you and you don’t have to worry about t paying the tax liability.” So there there are various reasons why someone might do Roth conversions to help reduce taxes. But again, it does not make sense for everyone to go out and do Roth conversions. All right, let’s talk about social security. When it comes to retirement, social security is a decision that you’re going to have to make. If you have not retired yet and you’re kind of looking at social security, maybe this will give you some general information on like, hey, when should I take it? Now, this is looking at social security in kind of a a vacuum. So, we know depending on the year you’re born determines how much of your benefit, like at what age you have to be to receive 100% of your benefit. So, if you were born prior to 1954, your full retirement age is 66. That’s when you’re receiving 100% of your benefit. If you’re born after 1960, your full retirement age is 67. Between 54 and 60, it’s 66 and some months. So, if you are born in 1957, your full retirement age is 66 and 6 months. That’s when you’re eligible to receive 100% of whatever that stated benefit is. Now, you could take your benefit as early as 62, but if you take it as 62 and depending on what age you’re what year you’re born, it’s going to be a reduction. So, if you were born in 1965, you can take your benefit as early 62, but you’re only going to receive 70% of that benefit. That’s a 30% reduction in your benefit. And you’re not going to it’s there’s you’re not that 30% is a permanent reduction. It’s not like, hey, I’ll make it up some some time down the road. No, it’s a permanent reduction. Now, on the flip side, if you decide, hey, I’m going to wait until age 70, every year you wait, you’re going to get an 8% increase. So again, for anybody born after 1960, if you wait till age 70, you’re going to receive 124% of whatever your benefit is. So you can take it early, it’s going to be a discounted. You can take it late later and they’re going to give you more. So question is that we get is what’s my break even point? meaning how long do I have to live to make or what’s my break even point? Let’s start start there. What’s my break even point? So, this is looking at someone that has the same social security benefit and they’re trying to decide, do I take it at 62 or do I take it at my full retirement age, 67? So, if you claim at 62, you’re going to get about $2,900. If you wait till full retirement age, you’re going to get $4,200. the break even analysis which the cumulative benefits you know if you add those two scenarios up is age 77 meaning that hey if you live beyond 77 you should probably wait till your full retirement age to collect your benefit. If you don’t see yourself living to age 77 yeah maybe take it at 62. Now we can look at the same scenario when it comes to 67 verse 70 and the break even analysis is 81. So, if you live beyond age 81, it says, “Hey, maybe you should wait till age 70 to take your benefit, but you also not only have to kind of think about yourself. If you’re married, you have to think about the surviving spouse, too.” Because maybe you have a short life expectancy, but you know, your wife is going to live to age 100. And if you have the highest benefit, maybe it makes sense then for you to delay your benefit till 70. So that way when one spouse passes away, she gets the key to the greatest benefit. And when you look at this and say, okay, at age 81, if you’re a married couple, there’s a 85% probability that one of you will reach that age. So it’s not sometimes you need to do a little bit more analysis when it comes to when is the best time to take social security. This chart kind of shows that and this is some of the planning that Kim and I do also. We can come in and build a plan specifically for your situation. This this happened to be a single single client and she retired at 67. She said, “Hey, or sorry, she retired at 66.” She said to him, “I’m debating to take my social security or wait till age 70. She’s not married, has no kids. And I said, “Okay, well, let’s run a scenario with you taking it at 66, and we’ll run another scenario where you taking it at 70 and overlap it on each other.” And so the blue, the dark blue represents her waiting till 70. So you can see that she has to spend her own money to get to age 70. The gray represents her just taking her benefit. Now her break even when we run those two scenarios is 93 based on her situation her pension social security assets you name it what she wanted to spend was 93 meaning that hey if you live beyond age 93 yeah waiting till 70 makes sense she was like no I’m not doing that so again when it comes to social security it is a personal choice. We can show you whatever math you want or we can run the scenar any scenario you want but at the end of the day it’s a personal choice. If you want to delay till 70 then do it. If you want to take it early then do it. But you know maybe at times it does make sense to say hey let’s do a little bit more analysis and kind of figure out what’s the best for your situation. All right, let’s talk about health care costs. While you’re working, you’re getting health care benefits, but when you retire, and depending on what age you retire depends on what the cost is. So, if you decide to work, if you decide to retire before 65, then that means that if you don’t have any like retire health care benefits, you have to go out to the exchange and find health care. Well, depending on what your income is depends if you get credits to your healthcare or not. So, this is someone single person age 60 um using an average and they have $50,000 of income. Well, the premium for a silver plan is $1,300 a month. $1,326 a month for the self silver coverage health plan. But because your income was $50,000, they are giving you $900 credit to help against that premium, your out-ofpocket cost is $415 to have private health insurance. Now, this is all going to change probably come January. This is what we know right now. Come January, this is probably all going to completely change. But the biggest thing to kind of take away from this slide is that hey, if you retire before 65, you’re going to need to get private health insurance. And it could range anywhere from $1,000 to $1,500 a month depending on the type of coverage you want. And you need to make sure you’re planning for that expense. Once you hit 65, you’re able to sign up for Medicare. You can sign up for part A, part B, and then you pick up a supplement. And there’s a couple different options when it comes to Medicare. You can choose option one, which is original Medicare. You pick up part A, part B, part D is in dental, or sorry, yeah, D is in dental, which is your prescription drug plan. And then you pick up a metagap plan. Medigap plan basically covers everything that Medicare doesn’t pick up. Or the second option is you get a Medicare Advantage plan. Medicare Advantage plan is kind of a combination of all of that. Metagap Part D, vision, dental, and hearing. So, there’s a couple different directions you can go when it comes to Medicare. So, again, when you retire and as long as you’re 65, you’re able to sign up for Medicare. And then you go through kind of couple different options of which direction you want to go. I would say talk to someone that specializes in Medicare and let them walk you through what are the option, what makes the most sense for your plan. Sometimes people come in and choose a Medicare a Medicare supplement plan based on the doctors they’re currently seeing. But when it comes to health care costs, even when you’re on Medicare, if you look at, hey, there’s a there’s a supplement, you have out-ofpocket expenses, you have part B D premiums, and maybe some uncertainties, you’re looking at almost $600 a month. And if you include a 6% inflation to that, in 20 years, that could be almost $1,700. We do use a higher inflation for healthcare because we we’ve consistently seen health care costs go up much higher than normal inflation. And also don’t forget that your part B premium is based on a certain amount of income. So the more income you make in retirement, the more your part B is. So this is called Irma and Irma states that hey if you’re a married filing jointly person and your income is between say say your income is $300,000 modified adjusted gross income is $300,000 that means that your monthly premium is $405 and then which is almost a $200 increase to the normal part B. So, it’s something to be aware of when it comes to one looking at Roth conversions. Watch out for these brackets because if you’re going to do Roth conversions and you convert and add that money to your other taxable income, it could push you into a higher income bracket which causes your part B premium to increase.
If you’re still working and if you have access to an HSA, make sure you’re contributing to that health sav. a health savings account. And the reason I say that is that the money you put into the HSA goes in pre-tax, corros tax deferred, and when that money comes out, you can use it all tax-free for healthcare expenses. So, it’s something to look at to if you have access to it, I would highly encourage you to contribute to them. Now, also the other big cost of healthcare when it comes to retirement is long-term care planning. Now, I’m not going to go into the statistics of it, but what in essence what long-term care is, and we take this for granted on a daily basis, long-term care planning is when you can’t do two of the six ADLs, activities of daily living. And if you think about it, you do this every day. You don’t even think about it. You know, you get out of bed by yourself. You take a shower by yourself safely. You use the bathroom by yourself safely. You dress yourself and you by yourself. You feed yourself safely. And you’re making decisions for yourself. If you can’t do two six of those activities at daily living, then you may need some type of long-term care. and that could erode that could be this additional cost that you didn’t weren’t planning for. Now, when it comes to long-term care planning, there are multiple ways for you to pay for it. One, you could rely on family and friends to help support you during that time. But, you know, times it becomes stressful stressful, you could use your savings and spend your assets to pay for that type of care. You can go out and get a a long-term care policy. There’s a traditional or hybrid. Traditional is kind of like car insurance. You pay into it, pay into it. Has great benefits, but if you never use it, the insurance company kept your money. The hybrid policy is it’s a permanent policy. You pay into it. It’s you have benefits for you to use if you need it, but if you never use it, there’s a tax-free death benefit to beneficiaries. There’s these life plan communities where you buy into a community. Maybe you’re independent living and over time if you need more help with certain things they move you up to different levels. It’s this whole community base. Lastly is you could just use your your equity the equity that you have in your home. Your home is completely paid for and if it comes to like, hey, if I need long-term care, I’m just going to sell my house. use those proceeds to pay for that type of care. But when it comes to any government assistance, Medicaid, you have to have less than 2,000 in assets for them to come in and help with those types of uh benefits. So again, long-term care, if you think that Medicare is going to cover it, it’s not. Medicaid will help pay for long-term care, but that you need that means that you have less than $2,000 of assets.
All right, let’s talk about time to your advantage. Oh, so retirement income management is critical. And when I say this, you know, the priorities of I want to spend with confidence and I want flexibility and some key questions to consider. How much income should I receive? How long will my money last? How much risk should I take? And will I have access to my money? These are all questions to kind of think about when it comes to creating income in retirement. And also, you have to kind of think about, well, hey, what kind of investor may be I what what’s my goal when it comes to what I’ve accumulated? Do I want to increase my wealth and pass on as much as possible to the kids? Do I I I just want to be conservative and protect every other thing I have and just live off the interest that my portfolio will generate or do I want to come in and I kind of die broke meaning I want to spend everything I have and if I die with a dollar in my bank account hey that’s what I want. So, it’s coming in and saying what kind of person or what what’s your end goal when it comes to this money you’ve accumulated and looking at what is the best strategy for that. So, you know, if you’re a person that says, “Hey, I kind of want to preserve my principal.” You could come in and say, “Hey, let’s use some type of bucket strategy where we come in and say, hey, let’s have a lowrisk bucket, you know, 1 to 5 years.” You have a moderate risk bucket where it’s money that you’re going to use 6 to 10 years or you have a high and you have a high risk bucket that’s 11 years plus. So it it’s a way to kind of manage some of the unknowns. So market risk, sequence of returns, investor behavior, investor behavior risk. So, it’s just a way to manage some of the money because at the end of the day, like if you have this bucket that will create income for you over the next 5 years and there’s a downturn in the m in the market, you can wait that the downturn out.
And when you look at these different types of goals, short-term, medium, or long-term, like statistics have shown like the longer you wait invested within the markets, like you get a better return. So like if you look at a one-year period within the markets, like historically going back over the last 74 years, the best the market’s done is almost 52%. And the worst it’s done is 37%. where if you look over a, you know, 10 year rolling period, the worst the market’s done is down one or up 20. So, you know, if you’re coming in and saying, “Hey, I’m going to buy a car in the next year,” you may not want to put your all your money in the market because yeah, if the market did 52%, great, you won. But on the flip side, if the market goes down 37%, you have 37% less money for you to use to buy a car. So again, kind of attaching specific goals to your money and when you’re going to use it. There’s a study that was done that where asked different ages of people, you know, what their risk tolerance was. And that’s what this chart is. You know, when they asked a lot of 30-year-olds, you can assume like, hey, majority of them, a good portion of them said they’re aggressive and moderate aggressive. they have time on their side to invest in the market and and deal with the ups and downs within the market. But the older you get, you start to be a little bit more conservative. Now, at times with questions like, well, how much I should have how much should I have in the market or how much I should have in conservative? A lot of times it’s just a matter of your risk tolerance. We’ve worked with people that have had a they’re in their 60s and they have a 100% of the money in the market because and then at the end of the day they don’t need to use that and they can let that money grow for the kids. So again, it’s going to be tied into well do you need to create income off of your assets or not? any kind of projection you do a lot of times they’ll use a straight line projection meaning that hey this green line you’re looking at this in this chart is just showing hey over the next you know 30 years we’re going to get an 8% rate of return and based on that you know we’re able to meet your goals well the market doesn’t perform that way the market’s going to go up the market’s going to go down and if you come in and say hey let’s think about a static withdrawal Let’s say you have your money in a like a 2025 fund, target date fund, and you’re withdrawing money from that. Well, when the market’s down, you’re selling shares at a lower price. Market’s up, like, yeah, you’re selling less prices. But this is what this is showing where it’s like if you do do a static withdrawal, you do have the risk of running out of money much sooner than even a straight line or a dynamic with withdrawal. Dynamic withdrawal is when you’re kind of creating two different buckets. One bucket is really conservative uh money. One bucket is aggressive. So if the market’s doing really well, yeah, maybe you take money out of that to live on. But if the market’s not doing so well, take it from your conservative bucket.
You might have heard of sequence of returns. sequence of returns in accumulation phase doesn’t really matter what if we started with a down year or we started with a upyear and that’s what this chart is showing in the accumulation of sequence of returns. If you started with a down year and you you have a down the first three years are down and then you start to see the market recover like you have $150,000 $153,000 at the end. If you start with a up year, the first three years are up years and then at the end you have bad years. In essence, you get to the same spot. But in distribution, it’s very important to understand in distribution, it does not work that way. So when I talk about distribution, you’re using your money. You’re withdrawing money from your investments. So, if we test that same scenario, but now we’re withdrawing money, you can see client one, they started in a down year. They’re withdrawing money and at the end of that 10year period, they have $63,000 left. Now, client B, client two, client B started when the market was doing really well. They took out the same amount of money, but at the end of that 10-year period, they saw the last 3 years of being down, but you can see their value is $107,000. So, sequence of returns and withdrawing money is a little bit different than in the accumulation phase. So, again, it’s really important to kind of think about, hey, in retirement, how am I going to withdraw money? Okay, let’s talk about the plan for retirement. And think about retirement is kind of climbing the mountain. Sometimes people think about, hey, I’m going to go climb a mountain. You climb the mountain, you get to the top, and you’re like, yeah, I did it. But sometimes going down the mountain is the most dangerous. It’s not going up, it’s going down. And so if you think about this in terms of retirement, like yeah, you’ve worked and saved, worked and saved, worked and saved all your years, but now you’re in retirement and sometimes it could be the most dangerous part because there’s certain things that you’re not necessarily aware of or or just didn’t think about in retirement that you did while you were working. You didn’t think about sequence of returns. You didn’t think about health care costs. you didn’t think about, you know, if you needed to go from a two-level house to now a onele house. I mean, there’s all these different things that are different in retirement than they are in uh while you’re working. So, this is some of the planning that Kim and I do, you know. So, the Richard and Deborah came and saw us and they’re both 62. You know, Richard has some health issues. is going to work till 67, but we’re using a 85 as a life expectancy. Deborah’s going to retire at 65, but we’re using a much longer life expectancy for her. They both have money in 401ks, has money in savings, and their house is completely paid off. We know what their incomes are. We know what their social security benefits are going to look like when they retire. And then Richard has a pension also. They wanted to live on $5,000 a month. We included health care on top of the 5,000 and they were we taking account federal and state taxes for their scenario. They’re both contributing to the 401k and they’re receiving a match. So the first thing we do is put these pieces together to kind of create this cash flow. Cash flow is just basically saying based on what you want to spend and based on what’s coming in, are you able to meet your goals? So you can see that bluish color is them working. The dark blue or black is social security that’s coming in. The teal is the pension they’re going to be receiving. The yellow is withdrawing money from savings. The dark orange is required minimum distribution. And you see like a little bit of cliff in like 20 2048. That’s when Richard passes away. So, we can look at this and say, hey, based on what you’ve accumulated, based on your income, based on what you want to spend, you’re able to meet your goals and still have, you know, quite a bit left over to pass on to the beneficiaries. Let’s look at taxes. You know, yeah, while you’re both working, you’re in about a, you know, 24% tax bracket. When uh Deborah retires, you’re going to be in a 22. In retirement, there’s this window where you pay no taxes at all. RMDs kick in. You’re going to be paying a little bit more in taxes. Um, when one spouse passes away, you’re going to be in a 22% tax liability. So, it gives us kind of a projection of what taxes could look like going forward. Based on this, it does make sense for you to think about doing Roth conversions. We’re able to model that and come in and say, “Okay, if you retire, when you retire, let’s look at doing conversions for about 6 years. stay within a 12% tax bracket and see what the benefit would be. Well, the benefit of doing that, which is the yellow, represents what we can convert, pay taxes on it, and is there any benefit doing so? Well, the benefit is we’re able to save over $100,000 in taxes. Meaning, that’s the amount of money that you’re not giving to Uncle Sam. That’s what money you’re keeping in your pocket. We’re also able to increase your net worth. So doing Roth conversions makes a lot of sense when it comes to his situation. We can also look at hey what happens if Richard delays his social security till 70? Is that of any benefit? Well, we know by doing so his break even is 79. Now we know then possibly he’s going to live beyond 79, but we also think that Deborra is going to have a much longer life expectancy. So it may make sense for him to delay social security till 70. What happens if because of the health issues he says look I just want to retire earlier enjoy life travel do the things I want to do can I retire at 62 is that possible based on that yeah absolutely if you want to retire at 62 you’re able to do so and you still have money left over to pass on to the kids so you’re able to retire earlier so these are all different scenarios that were run for for members for clients to really put a plan together this is a meeting that Kim and I always hold with our members. There is no cost to do so to do this type of planning, but we’re also here to help you with also a lot of different various things. We can help you create withdrawal strategies. We can also help it look at how do you maximize your rate of return, but also reduce your risk, create uh Roth scenarios for you, you know, make sure money is passed on to the beneficiaries properly. There’s so many different things that we’re able to help you with. Also, for anybody joining that are current clients of AIS or line retirement investment services, um, if you have not done your wills, power attorney kind of basic estate plan, make sure to reach out to us. This is a service that we just recently added. So, if you are a client of you need to get that done, we’re happy to set you up at no cost to get this done for you. It is kind of a do-it-yourself program, but it’s a way to create a will, power of attorney, medical, financial, and some other estate planning documents. Okay, I know that was a lot of information and there’s probably a lot more to cover, but happy to answer any questions you have regarding retirements. We do have a question. You want to start that? Oh, oh, oh, yeah. Yeah, yeah. I wasn’t done. Calm down. Calm down. Calm down. Calm down. Um, I am going to put a poll out there. So, if you would like us to reach out to you, set up an appointment with you, please indicate that on the poll. We’ll contact you, put you on the calendar, and and start the process. Or if there’s any questions you have, just let us know. Okay. What questions do we have, Kim? We’re we’re going to call you anyway, but we’ll call you first and just say yes on the poll. Um, let’s see. Somebody’s asking, “Hi Kim, are you also a CFP?” Nope, I am not. Uh, next question. What about self-employed? I get no help. Single 54, pay 664 a month for bronze with HSA. Is it a high deductible? I don’t know what all that means, but yeah. um you’re going to have to call that specific plan that if you’re in the bronze, you’re going to have to call the marketplace or call whoever is offering that bronze and ask if that’s a high deductible plan. What is the latest age I must make an IRA withdrawal? There is no age in regards Well, so sorry, let’s RMD. So RMD Yeah. So um depends on what year you’re born. If you were born prior to 1960, it is 73. After 1960, it’s 75. Um, somebody’s asking if there’s a transcript of our webinar. No, there isn’t. How about a condensed version? No. But when we reach out to you, if there’s a specific question you want us to review, we’re happy to do that. Um, next question. I’m 65 years old. One year, one year my cash management account will be zero. I need to replenish my cash management account. 74K a year until social security starts at 70. We have 30,000 in stocks and a million in tax deferred accounts and a two and a quarter in Roth. Do I withdraw from a combination of accounts or should I start social security? So the planning that I showed you. So that’s a great example of we can answer those questions, but we need to do a little bit more planning. If we’re able to put all those pieces into our planning software, we can answer a lot of those questions for you and really come up with a game plan for you. Yeah, we don’t know until we see all your situation and your tax situation and your expenses and everything. Um, if one is retired but still has a high deductible health plan and not yet on Medicare, I’m only 61. Then I thought one need not be working to continue contributing to an HSA. So you just have to have a high deductible healthare plan to be able to contribute to an HSA. But also at the same time, like I guess there’s no I mean if you have no if you’re not working, you have no income. I mean the only benefit doing the HSA is the taxfree growth because if you have no income then no taxable income there’s nothing to deduct from. Yeah. Yeah. Um how much do you charge for this type of planning and help? Yeah. We don’t char at this at the moment we don’t charge for we don’t charge to do any type of the we don’t charge to do any of the planning. It’s just a service that we provide our members. Okay. Let’s see. Here’s a couple new ones. Let me go here. Followup clarifi clarifying question. Healthc care question was related to your analysis which only seemed to be about employed. Bronze is a high deductible plan. I was wondering how to fit into analysis with the government help. Says government helps. It does not. I’m not quite sure that makes sense to you, Malcolm.
Yeah, I don’t I’m not sure. We’re gonna have to just hang on to your question when we reach out to you. Um Claire, we’ll we’ll work through the details. Uh next one. I’m not married. What are the rules of common law relationship? It depends on what state you live in. And I would just say Google that that information because we’re not we’re not really versed on every state when it comes to common law relationships. So, but I know like nowadays you can just Google that within the state you live in and it’ll give you a pretty good summary of common law relationship. I think I don’t know if it’s related to healthcare or social security. I’m not sure what the question relates to, but I believe with social security uh common law counts as married. Again, I don’t know if that’s the question or not, but but we’ll t we’ll we’ll answer that when we reach out to you. Let’s see. Um, I have a pre-tax retirement account and a Roth. When I start withdrawals, do I have to withdraw from both simultaneously or can I withdraw from the pre-tax and only withdraw from the Roth at a later date? That’s a good question.
I mean again it comes down to the planning that we do to really kind of understand what makes the most sense and we’re able to model that to say hey do you do pre-tax or do you do after tax and which which one gives you the most the best kind of ending scenario. Generally there’s no requirement to withdraw from a Roth. So you definitely do not have to withdraw from both of them simultaneously. conventional wisdom. And again, to Malcolm’s point, it depends on your situation. Most people like to leave the Roth if they can, and they’re building a tax-free bucket of money that they can use down the road. Um, and it passes to your heirs tax-free. Um, so again, without knowing your situation, um, this goes back to the fact that we don’t charge since there’s no charge for this type of planning and help. How do you get paid? Just an alliance salary. regardless. Yeah, let’s talk about this a little bit. Um, we do get a as advisors with the lion, we do receive a salary, but also at the same time, we do this not only to help our members with the planning, but there’s times when the members decide to become clients of ours, but this is kind of a process on both sides. We’re kind of interviewing you to see if this this is someone that we want to work with and you’re interviewing us to see if this is someone you want to work with. I mean, so there are certain things that we might implement where there are fees associated with it where we get paid something else for doing that. But at the end of the day, like both Kim and I have been doing this for over 20 years. We hold ourselves to a fiduciary responsibility. And so, you know, um we will fully disclose if you decide, hey, what are your recommendations? We will fully disclose these are the fees associated with implementing this if you wanted to move forward. We are not the advisors that are going to come in and be like, “Hey, I’m going to put every all your money into annuities and get the most commission possible and then move on.” No, not at all. So, you know, we will tell you upfront what the cost is when it comes to managing a person’s assets or whatever recommendations we put in place for you. I don’t know if you want to add anything else, Kip. So, you know, I would say that we’re we’re doing these educational webinars to obviously help you and provide knowledge and kind of demonstrate that we know what we’re talking about. And yes, we will run a plan for you, complimentary. And certainly our goal is that through those series of meetings of the planning that you do think we know what we’re talking about and you do get a chance to know us and see if we are somebody that you could see yourselves working with and trust us with your retirement assets. But certainly that’s our goal to help you with your retirement plan and investments. And the the planning tool that Malcolm showed you, that’s not just a oneanddone to make decisions. We use that for every client we have as part of their review. We we update the plan every time. We obviously run through investments. We update taxes. I mean, that’s kind of the road map to get you through retirement. We have clients that call us and say, “Kim, Malcolm, I want to buy an RV. Should I finance it or withdraw the money?” Or, “We need to replace our car. or we want to take out money for our daughter’s wedding. We run all those life situations through your plan and help you decide on uh the right way or the best way to do it for your situation. And we use that plan for RMDs and for taxes. So, we kind of help you through not only getting you to retirement, making good decisions around pensions and social securities, but through through retirement, investing appropriately for those retirement years. I think I heard Malcolm mention earlier that might have a bucket of conservative money and some uh market money when it gives us options when it comes time for RMD. So that’s kind of the whole package and the costs come in based on if you decide to let us work with some of your retirement assets or savings assets. It depends on the the product or the solution that we put in place. And as Malcolm said, that’s when we would disclose what the cost of those different products are. And we’ll show you. We have I’ll call it a menu, but it’s not really a menu, but just kind of some products and types of products that we highlight that we have found over the years work really well for retirees. Okay. A couple more real quick. Can you use HSA funds to pay for medical premiums?
Yes. I want to say yes. I mean, yeah. Yeah, you can. Um, somebody said, “I’m in Colorado. Do you do in-person visits?” Yeah, we do. We have an office in the tech center at I25 in Belleview and one in Lakewood up off of second in Union. So, we we’ll do that either way, in person or virtual. And I think, let me check one more time. I think that’s it. Hopefully, we got everybody. And if you come up with any other questions and when we reach out to you, we’ll be happy to walk you through it. Anything else, Malcolm?
Don’t think so. I don’t think so. Uh, thank you for the thank you, Lisa. We appreciate that. It’s kind of hard to know what the feedback is. You know, we used to do these events in person, so you could kind of talk with people on the webinar. You’d never have any idea how it’s going. So, we we appreciate the Thank you. Okay, take care. Look forward to talking with you or seeing you on the next one. Thank you.