Welcome everybody to today’s presentation. Uh I apologize in advance. I usually have this all dialed in in advance and I’m usually on 5 minutes early so I can uh so I can chat with everybody and give everybody some time to get logged in. I do see a few people uh still getting logged in, but I’m going to try and start early or not start early, but I want to respect your time and start on time. So, uh hold on second. Let me get there. Okay. And then
I apologize. We had a little uh we had a little uh technical difficulty today. And uh just to let you know if there are um if we do have another glitch in our connectivity, feel free to um just be patient. I might have to relog in which is what I did last time. I may have to re reboot and find another internet source, but uh we should be good to go. Hopefully, we fixed everything and we can get to today’s presentation. So, uh one last thing here.
Okay. So, all right. Now, we got a few uh we got quite a few people just joining in. Welcome Amy, Chris, Christopher, Harvey, Ida, Jen, Jennifer, two Jennifers, uh, Joe, uh, Juan, Kenji, Lisa, Fisses, Melissa, R, Rose, Joe, Steve, Susan, Sheila, Tundre, and well, there’s a few people going clicking in here now, but we’re going to get started. started as I see they’re clicking in. Today’s presentation is all about um saving taxes out of your IRA. It’s it’s becoming one of our most popular webinars now because you spent all this time, you know, saving for retirement, saving for retirement. Well, now’s the time that you’re starting to take out of it. You want to do it from a tax efficient standpoint as well. So, that’s what we’re going to be tackling today. Um, before I get started with today’s presentation though, just want to get through for the newbies on the webinar here, just a few ways that we do things here. Um, my name is Bill Rido. Um, I’m a financial advisor here at Alliant Retirement and Investment Services, otherwise known as ARIS. uh we are the uh we are the section of the credit union that is deals with longer term money. What do I mean by that? Anything beyond 18 months. 18 months because once you go beyond 18 months, you’re starting to compete with the effects of inflation. The price of gas, food, housing, as we’ve gotten a crash course in the last few years or so, they’re going up. So you need to make sure that your money goes up over time. And that’s what we do. We kind of help you maintain and plan for those, you know, events over time. Whereas Alliance got some great uh options when it comes to CDs and savings accounts and all that good stuff. But once you go beyond 18 months, that’s where you have to start dealing with risk. And that’s what we do. We help you plan and manage that risk. So, with that, um, I’m going to get through today’s presentation. We love questions here. Ask away, but I’m going to have, uh, there’s a way to do it. You’re going to notice that at the bottom of your screen, there’s a little menu. There’s going to be a uh, one of the menus is there’s a chat or a Q&A. Either one works. Click on that, type in your question, and then be patient because as soon as we I’m going to get through the presentation first, but I promise you I will not end this without without uh answering any and all your questions. So, that being said, let’s get to the next presentation. Uh well, the next slide is this is our disclaimer slide. Uh unfortunately we are in a very highly regulated industry. So we cannot and in the day of AI and all this stuff um you’re not allowed to record this you know you’re not allowed to record this presentation um for a couple reasons. one because everything we do it has to be we do have uh some YouTube videos that are these presentations but they’re already cleared through our compliance department and they’re pre-recorded but if it’s live we can’t um we’re not allowed to record it. Um so with that um please do not record if you are recording for notes or anything like that unrecorded. We’re not allowed to we’re not allowed to do that. And also we also don’t want you know someone taking our AI voice or whatever and creating something that we never intended. So that’s one of the reasons why we have to do it. So with that uh the coming attractions another one of my mo more uh popular webinars is uh social security that’s coming up on actually the date on this has changed uh no it has not it has changed to July 8th. So, it’s the week, it was originally supposed to be the week prior on uh July 1st, but because so many people are going to be away for the 4th of July, it’s going to be the following week, the Wednesday after the 4th of July at 6:00 p.m. I’m going to tell you everything you never knew you needed to know about Social Security, how it works, um how it’s funded, whether or not it’s a Ponzi scheme or it’s going to go bankrupt in a few years or not. I’m going to answer any of those questions and help you really figure out how to make the most out of your social security. So, that’s coming up then on July 8th. And because I did the last one, uh I made it a week later. So then the following week, normally it’s every two weeks I do this. In this case, it’s going to be the following week, Wednesday, July 15th. Uh we’re going to be going into long-term care protection strategies. Now, the purpose of this webinar is not to sell you long-term care insurance. That’s not what we’re we’re not here to sell anything except possibly a plan that uh truth be told, we don’t charge for. Um but you do need to be prepared for long-term care. um whether you buy a you know buying a long-term care policy may work for some people, not everybody. Um and you may not necessarily need it. Um but you do need to plan whether you get a policy or not. You do need to plan to pay for long-term care because 70% of people who are 65 are going to need long-term care at some point in your life. So you better plan for it. So that’s what we’re going to talk about on Wednesday, July 15th. Um, that being said, I’m going to make this a little bit faster because I know we’re running a couple minutes late. Any if Listen, there are 12 of us who work here at Alliant Retirement Investment Services. We all have different personalities. If you don’t like my jokes, I won’t be personally offended. If my times don’t work, I do this every other Wednesday uh alternating between 2 and 6 uh p.m. on on uh on the West Coast on Pacific time. mom in California. Um, so if those times don’t work for you or I don’t vibe with you, check out our um our website at aris.allioncreditun.com/events.
That’ll give you all the webinars for the next two weeks. Pick one that works for you. Um, and if none of those work for you, you can check out our podcasts that are available anytime as well. Um, and also our website is a great place to start with any questions you may have. All right. So, getting into today’s today’s subject, you know, when it comes to IAS and your other retirement accounts, um you probably have a lot of questions like, you know, several that are here. You know, how much are my withdrawals taxed? When I when I need to begin taking withdrawals, you know, when when do I have to start doing it? When can I when when do I have to? Um how much will I have to take? you know, when I have my RMDs at that point, what happens to my IRA when I die? And all these other questions that are listed here. We’re going to answer all these questions today. So, you know, years ago, life was so much simpler and you know, in a way, retirement was no different. many people, you know, went to work and then when they retired they collected a pension or this and and their social security benefits and you know maybe maybe we sucked a little bit away on the side. Um and that was great if you know to have a little bit extra spending money and for most people you know that’s all they really needed to do. However, in the 1980s, um, companies and a lot of other organizations abandoned a lot of pensions as the primary source of retirement savings and they’ve turned to 401ks and similar plans, shifting the risks from them to you, you know, back on the backs of employees and the family. Now, it’s a good thing and a bad thing because it allows you to, you know, with pensions, pensions are primarily in funded by annuity type and fixed income type investments. Well, what 401ks do, it allows you to invest in the market, which allows you to grow your money a lot more over time, which is a great thing, but it also puts more risk on you and more decisions that you have to make. So with that, um, one of the things that we’re doing is, you know, you have now you’ve been building this building this up for, you know, most of your working life. Now, what you need to do is you need to take it out. Use it. You can’t take it with you. Use it, but use it, you know, take it out wisely. And that’s what we’re going to do today is talk about how are ways that you can really get the most out of your 401k and your other retirement accounts. You know, um on top of that, you know, your retirement savings, you know, may have to last a lot longer than you originally may have thought. You know, it used to be, you know, over 40% of retirees underestimate their life expectancy by 5 years or more. So, here’s what I mean by that. Let’s take a look at this chart just to see what I mean. If if you’re a man and you’re 65, you have a pretty good chance of living till at least 85, right? And if you’re a woman and 65, you have a better you have a better chance of living past 85 than you have, you know, dying. You know, twothirds of you almost are going to live beyond 85. And if you are, you know, if you’re married, you know, that means that, you know, there’s a better than if you’re married, there’s almost a 2/3 chance that you’re going to be one of you is going to live until over 90 years old. So with that, you you need your retirement savings to last, you know, really if you’re retiring at 65, 25, 30 years. So you want to make sure that you’re taking it out in a taxefficient manner to really make the most out of it.
Now, with that in mind, one of the best things you can do as you approach retirement, if you’re not already there, is really beef up that retirement savings by contributing as much as you possibly can to tax favored retirement accounts. Um, you know, obviously we all say start younger. Well, that’s great in theory. Unfortunately, with, you know, mortgages and raising kids and, you know, all that stuff that life life gets in the way. Well, you know, you save what you can, you know, and but, you know, when you’re entering your your years, you know, your last, you know, last few exits before retirement, a lot of those responsibilities are gone. If the mortgage isn’t paid off, it’s getting closer to being paid off. The kids are hopefully most of them are grown by now or at least you have a good idea where they’re going to be in, you know, that you don’t you don’t have to worry about raising them anymore because they should be raised at this point. Um, so now now those expenses are going down. So now you can really supercharge, you know, your retirement accounts. So take advantage of it while you can. Um because you can really and and they’re also the government also gives you some higher, you know, once you turn 50, the government ups a lot of the limits on what you can contribute to your 401ks and retirement accounts and things like that. So really take advantage of it. Um I encourage everyone to sit down with me and you know make a plan where we can kind of see where you are, where you want to be. When we do a plan, what we do is we take your goals, we prioritize, we quantify them and prioritize them. And then we take a look at all of the ways you’re going to fund your goals. Now, obviously retirement is a big goal, but we take a look at everything. We take a look at, you know, when do you, you know, how often do you buy a car? Do you have any honeydew lists around the house where, you know, I want to redo the kitchen in a year or two or, you know, or whatever it is. We take those, we quantify them, we prioritize them, and we take all of the ways that you’re going to fund those goals and we come up with kind of a financial road map to see, okay, are you on track, a kind of a financial GPS to see, are you on track to getting there? And then what we’ll do is we’ll turn around and we’ll make sure that we adjust your plan to make sure that you are getting there on time or at least hold up a financial mirror and say, “Okay, this is where you are. This is what you need to do to get here to give you a more informed decision on how to how to do this. It doesn’t cost anything to do um except couple hours of your time tops. So with that, take advantage of it.” Um, now now that I got my commercial out of the way, which I’ll probably repeat myself by the end of the by the end of the presentation again. Um, so you know, there are different types of retirement accounts. So that’s what we’re going to go through today is, you know, uh, the first thing I’m going to do is explain what the different types of retirement accounts are. Now the first one and the most basic one is a traditional IRA. Um now what happens with the traditional IRA is money goes in it’s tax deferred meaning that the money goes in pre-tax. So great you take the deduction on on the way in while it’s in there it grows grows grows grows grows. When you pull it out it’s taxes ordinary income. The idea behind it is, well, while I’m working, I’m in a higher tax bracket, so I want that tax deferral. So, I want to lower my taxes while I while I’m working. While it’s in there, it grows. It grows. It grows. When you pull it out, okay, I’m taxes ordinary income. But, you know, at that point, I don’t really mind so much because then I’m retired and I’m on a fixed income. So, I’m not going to be hit as hard because my if I’m on a fixed income, it’s going to be a lower, you know, I’m going to be in a lower tax bracket. Well, if you’ve met one of us earlier and we’ve done some planning, hopefully you’re not going to be in a lower tax bracket when you’re retired because you have lots of money to live the life you want to live. So then you want to make sure that you take out of that efficiently. You want to drain that down efficiently in the way that makes most sense to you, gives you the most amount of money, and frankly gives the least amount to your uncle Sam. Now, I’m not saying, you know, I’m not saying evade taxes or anything like that. I’m not I’m you know there’s nothing illegal about what we’re doing. What we’re looking to do though is avoid taxes. I don’t want I don’t want to pay a penny more than I absolutely have to. Um I don’t mind paying taxes. I’m going to pay every penny I need to, but I don’t want to pay a penny more than I have to. So, okay, here are the just for traditional IRA contributions. The maximum contribution for 2026 is $7,500. However, if you are 50 or older, um by the end of the year though, you can they upped that by $1,000. So, it’s actually um or $1,100. It’s now um $8,600 is the is the limit um for for this year if you’re over the age of 50. Um, now you must have compensation. What does that mean? It means that you have to have earned income. You can’t use, you can’t be retired early and living off of, you know, rental income and things like that and contribute that to your IRA. That doesn’t work. It’s got to be 1099 income or money that you’ve gone out and earned. It’s salaries and things like that. Um there’s no w ages that what you can contribute to a traditional IRA. As long as you’re working, you can still contribute to a to a traditional IRA. Now, the tradition the IRA contributions are deductible unless you and your spouse are active participants in um a 401k or a 403b depending on whether or not the company you work for is a for-profit or nonprofit company. um and your income you know and your income does not exceed a certain certain threshold. So as long as you are down either one of those. So if now you can make tons of money and still contribute to a to an IRA or but you can’t do it with your you can’t contribute to your 401k and an IRA unless your income limits are a certain amount and it depends whether or not you’re you know it depends whether or not you’re married or single what those limits are and they change every year. Okay, this is one of the things that I’m getting so much more now is I’m getting questions all the time about Roth IAS and whether or not I should convert my traditional IRA and my 401k to a Roth IRA. So, the first thing is I’m going to explain what a Roth IRA is. Roth IRA is it’s so you don’t get the deduction up front. It’s after tax money going in, right? Okay. So, you pay your taxes and then put it into a Roth IRA. But once it’s in that Roth IRA, then it grows, grows, grows, grows, grows. But when you pull it out, it’s taxfree because you’ve already paid the taxes on it. So, uh you know, contributions. Now, as long there are some stipulations of, you know, when you can pull it out. Um, you know, if you’ve had a Roth IRA for more than 5 years and you are 59 a half, then all the withdrawals from your Roth is tax and penalty-free. Uh, and that’s what’s known as a qualified distribution. Um, if you need to take the withdrawal sooner, you can always take it out of your Roth IRA. um
you can take it out of your Roth IRA uh contributions tax and so you can only take out of your contributions before 59 1/2. After 59 1/2, everything’s available. But if you need to take out sooner than 59 12, you can, but it just can’t be more than your contributions.
So, okay, the IR the Roth IRA contributions are the same as pretty much the same as the the rules are pretty much the same as the traditional IAS. The maximum contribution is $7,500 86 $8,600 if you are 50 or older um by the end of the year. Um you must have compensation, you know, 1099 income. Um there is no age limit, all that good stuff. and your income cannot exceed certain levels. Um you know currently it’s for single filers it is um about 168,000. Uh for married um with a joint return you can contribute up to um you know up to $252,000.
So as long as your income is and it’s your income, it’s not your salary, it’s your earned income. So in other words, after your deductions and all that, as long as your income is less than that amount, you can contribute.
All right? Now, if you have a non-working spouse, they can also make a non uh a traditional or Roth IRA contribution using the working spouse’s compensation. So, if you have, you know, one of the spouses is doing the most important job, you know, taking care of the house and the kids and all that stuff, and you’re a single, you know, you’re a single income family, well, you can both contribute to your IRA as long as the uh working person has the income to take care of both and the and the amounts are the same. So, you may think, okay, can really $8,000 a year really make a difference? Well, the answer is over time, absolutely. And and here’s what I mean by that. Suppose you’re 55 years old now, right? And you plan to retire in 10 years at 65. Okay, the kids have flown the coupe. You finally have that chance to focus on saving for retirement. you know, oh my god, I’ve been raising kids. I’ve been doing all this and I got nothing. I’m starting with buckus and I’m 55 years old and I haven’t I haven’t I haven’t done a darn thing for retirement yet. Oh my god, I’m going to be working till 80. Not necessarily. If you save $8,000 a year in a Roth IRA, right, annually until you retire, so for the next 10 years, you’re you’re putting in 80, you know, altogether, you’re putting in $80,000, right? Well, by the time you retire, you should have over $100,000 at that point. But just remember, you need to plan for living until 90 95 or or possibly longer. So let’s say that you’re leave the account alone and it continues to earn, you know, conservatively 6% a year. By the time you reach 85, even if you never put in a dollar after 10 years, well, now you have more than $350,000 in that account, that can kind of take care of those expenses later on in life. So, there are ways that you can still, you know, think just if you just think $8,000 a year can make such a big difference, you know, that’s not chump change. Now, obviously, it makes, you know, and if you’re both doing it, double that money. You know, if you’re both doing it, that’s over $700,000 if you’re married. So, with that, the game isn’t over. The important thing is is that the best time to start investing is today.
Obviously, you want to take advantage of employer sponsors retirement as well because if you still work, you know, check to see what retirement plans your employer offers. You know, you can generally contribute um more you can most likely contribute a heck of a lot more in your company’s 401k or 403b than you’re ever going to do in a 401k. I mean in a in a IRA and a lot of companies now have the option to do the Roth or the traditional route. Um you know in 2026 you can contribute up up over $24,000 uh in of your salary. Now you take that plus your company match and if you’re 50 or older you get an additional $8,000 a year. So you’re looking at, you know, you’re looking at just with your contribution, not including your your employer’s contribution, that’s 80 that’s uh that’s 32,500 a year, right? If you’re contributing now, granted, not everybody can contribute all of that, but hey, you can do a heck of a lot more. Now, if you’re doing if you’re starting from zero at 55, that’s going to give you a lot higher where you can start even if you have started later and you have more income now because you don’t have the mortgage. You don’t have to save for your kids’ college anymore. You don’t have to, you know, you don’t have to, they’re not eating you out of the house and home. They’re eating themselves out of house and home, hopefully. Um, you know, you can then concentrate and really funnel money. you want to funnel as much money as you can because you want to get that up. Um there’s also um a new the secure act 2.0 also introduced a new special catchup limit for those between 60 and 63 where you can add an additional $11,000 and change. So catch up. So, you know, depending on your plan’s provisions, you might also be eligible for, you know, employer contributions as well as company match or profit sharing. So, check out what your options are and certainly sit down with one of us to um to come up with a plan. All right. So once you are done working or a lot of companies even have inforce rollovers. So if you have old most people work many many jobs and you might have old 401ks you know orphaned out there one here one there well and you just kind of left it alone right well when you leave when you’re about to retire or actually even before you retire if you have old 401ks you want to you may want to consolidate them into one IRA so that you can really maximize and really keep track of what it’s doing and make sure that it’s not it’s it’s in track or in line with what you where you should be invested because if you haven’t touched the 401k an old 401k when you were in your 30s it was probably very aggressively invested. Well, now as you’re retiring that may not be you might be taking more risk than you really in initially or should be intending to do right now. So you want to take a look at that and make sure that it’s you want to make sure that it’s uh you know properly invested. So there are a couple of rollover options for your plan you know for your 401ks. First thing is you leave your employer assets in your existing company retirement account. Some plans allow you to do that some sometimes they don’t. Um, you can also roll over your plan assets into a new, you know, just consolidate them all into your your new company retirement plan. You can roll over, and this is typically what I recommend, roll over your plans into your own IRA rather than your new company. Why? Because your company’s plan is limited. It’s it’s great. I’m not saying don’t invest in your 401k. It’s a fantastic, especially if you’re getting company matching and all that, it’s great. But it’s limited. You only have typically, I don’t know what, 10 to 15 different mutual fund options. That’s it. Whereas, if you put it into your own IRA, your your options are endless. You can invest in anything you want. And there are ways that you can get your investment growing while still protecting it as well. So, um, the other one is take a lump sum distribution of your plan balance. Be careful with that, though, because if you just take the money out, you’re going to get hit with you’re going to get hit with taxes as ordinary income. So, it’s if you went out and got a SA job, you’re going to be taxed on that whole amount. Um, this is probably the number one thing I get asked for these days is does it make sense to compl to convert my plan assets to a Roth IRA? Um, the other option is make an inplan Roth conversion to your plan assets which may make sense as well.
So okay the taxation of retirement accounts uh for non-roth okay these are the tax brackets of you know how much so if you look at it um you know getting your money into your retirement account is only the first half of the story. You know coming up with an efficient way of taking those funds out and avoiding those costly mistakes is the other half. So, let’s say that you have, you know, you’re married and have, you know, a half million dollars in a 401k. If you just take it all out, well, all right. If you’re in a if you’re in a 24% tax bracket, obviously you’re going to be taking you’re going to be taking a major hit on that. So, you may want to convert some of that into a Roth. So, there’s a couple strategies on how to do that. Now, who knows where, you know, taxes now, they go up, they go down. The one thing that I can promise you is that it’s going to change at some point the tax structure. So, one of the advantages of doing a Roth conversion is it sets your time. It sets your tax automatically at a certain point in time.
Now, here are the potential side effects of IRA distributions. Um, one, there are a couple things you really got to keep track of, especially if you’re doing 401 uh if you’re doing Roth Roth conversions. Um, if you exceed certain threshold, it could increase your exposure to the three uh 3.8% search charge on net investment income. Um, you know, it could phase out some of your deductions or tax credits if you’re if you’re getting them currently. Irma Irma’s a bad lady you never want to meet. Irma with two A’s. Not your nice neighbor down the street. Irma with two A’s. It’s a income related um monthly uh amount adjustment. What does that mean? It means Medicare. Um if you are 63 or older, you have and you want to do a conversion from a Roth IRA to a you got to pay attention to what Irma is. Why? because if you go over certain thresholds, you’re going to get at 65, you have um you know, you you’re going to have Medicare premiums, part B and part D. Well, if you go over certain income thresholds, those price, you know, those premiums go up sometimes dramatically. So, you got to watch out for that. And you say, well, why 63 if I don’t have to worry about Medicare when I’m 65? The reason is is because Medicare has a two-year look back. So, if you’re going to convert, do it before the age of 63 or you can still do it at age 63 and higher, but you just got to make sure you got to pay attention to the what those what those Irma thresholds are. Um, obviously it can increase the amount of taxable social security benefits as well. um it could reduce or eliminate financial aid if you know your kids’s in college and things like that and it could also uh reduce or eliminate um Roth IRA contribution eligibility as well. So you just want to make sure that you’re paying attention to these. All right. At some point in time, um, the only way to, you know, minimize the tax impact of retirement account withdrawals, well, is to avoid taking withdrawals altogether. The longer you leave it alone and don’t take it out, well, the more it grows tax deferred and taxfree and all that good stuff. Well, if it’s in a tax deferred account though, at some point the government says, “Hey, wait a second. We want our piece of the pie.” So, at um at age, it depends on what year you were born, but it’s either at age uh 73 or 75 um you are going to, you know, you at that point have a RMD or a required minimum distribution. Essentially what they do is they take your life expectancy they divide it it’s actuaries do actuaries do this um they have a table that they set up they find out what your life expectancy is they take your value as of the end of year so December 31st of last year and what they’ll do is they base your this year’s dist mandatory distribution on that number they divide by that and that’s how you get your minimum required distribution So, you know, hey, you can’t avoid it forever. However, there are ways that you can avoid RMDs. Um, so as I said, you know, now not taking an IRA, not taking an RMD and doing nothing about it. It used to be, it used to be a 50% penalty. It’s still a 25% penalty. So with that, I mean, it’s still that’s still a significant penalty. So with that, now granted, if you miss if you forgot an RMD, it’s not the end of the world, but it’s kind of like the government’s kind of like how I am with I have two daughters. Um, and I always say, you know, I always tell them when they were younger that, you know what, you make mistakes in life. We all make mistakes in life. It’s okay to make mistakes, but I promise you it’ll always be better for you if I hear about it from you rather than me finding out on my own and you didn’t tell me about it. The IRS works the same way. Whereas, if you forget, I’ve had plenty of clients that, you know, they were out of town, they left the country or whatever, and they or they just plain forgot. They were busy with Christmas holidays and stuff and I’ve been calling them to make their RMD and they forgot and oh my god they never took their RMD out. Well, first thing I say is make it automated so you don’t have to worry about it. But if you do, it’s not the end of the world. What you have to do though is you have to one take it out as soon as you know about it. Take out your RMD and then let the government know, let the IRS know that hey, you know what? I did this this and that and you know can ask for you know to to wave the penalty. I’ve never had it where they have not waved it. Um however if you don’t do anything and they come after you well then good luck. So there you go. Um calculating your RMD. I kind of already explained this earlier. They take your life expectancy and they take that number and divide whatever the value is at the year end balance and that’s how you get what your RMD is. Um obviously every year you live longer well that RMD is going to be a higher percentage of your account because you’re you’re not living as long you know your life expectancy is going to go down. So all right here are the three biggest RMD mistakes I see here. um one aggregating RMDs between two different types of retirement accounts. So if you have a traditional IRA and a 401k and you think, “Okay, it’s not that big of a deal. They’re both the same structure. I’ll just take it all out. You know what? My my my 401k is, you know, not doing as well as my regular IRA account, so I’m just going to take all my RMD out of my 401k.” No. They’ll they’ll that’s that’s a big penalty. Um they they you have to do it you have to do an RMD out of your 401k as well as your IRA. You have to do it out of both. Now I I it sounds silly to me because you can do a rollover from your 401k into your um from your 401k into your traditional IRA and problem solved. But if it’s if it’s a 401k and an and a if it’s 401k and an IRA, you got to do it from each one. Um if uh aggregating RMDs between spouses, you also can’t do it. Why? Well, there’s a couple reasons. One is because you have both both have different life expecties. So, you have to do it from each once. Um, and as I said, forgetting to do the RMD and doing nothing about it, which I just explained a few slides ago, big no no. Treat it like treat it like your parents. It’s always going to be better. Treat the government like your parent. Um, not necessarily your big brother, but your parent that you know, you’re always better off letting them know. Okay. Um Okay. Strategy number one, holding t taking off uh IRA distributions. Hold off taking them as long as you possibly can. The advantage is is that well um you know the advantage is okay you you you hold off let it grow as long as possible. Potential drawback is is that as your IRA grows well so does Uncle Sam’s share. So at 73 or 75, depending on what your age is, they’re going to want their money. So if you just hold off on it, it’s growing and growing and growing and being a bigger share. So you know, just be know about that. And future taxes may be higher. Who knows? I mean, if the way our debts going, it’s probably a good bet. Okay, strategy number two. This is probably the biggest question I get is Roth IRA conversions. What are they? How they and should I do it? Okay, so we have Jill here. She wants to convert $100,000 from her IRA to a Roth IRA. Um, now here’s how it works. Let’s say Jill is in a 22% tax bracket. Okay. Well, or 24% tax bracket because it’s an easier you’ll figure out why it’s easier to figure out in a second. Okay. So, if she takes out $100,000, she’s going to owe she’s in a 24% tax bracket. She’s going to owe $24,000. Well, gee, thanks, Bill. That’s great. You just increased my bill by $24,000. Thanks. What do you do for an encore? You know, kick my dog. Well, okay. But if she does, what are the advantages? Well, essentially what happens is now she’s just converted that 100,000 to she converted that 100,000 to um to from traditional to Roth, right? Okay. What’s the big deal? Okay. Let’s say every 7 to 10 years that money should double, right? So, rule of 72. I’ll talk about it another time if you if you want to know about it. Um but now 7 to 10 years that 100,000 is now 200,000. What’s the taxes you paid on it? 24 24,000 or 12%. Is the tax now if it you go another 7 to 10 years now it’s 400,000 and your taxable rate is 6%. That’s the lore of doing That’s the lore of doing a Roth conversion. Now, there’s a couple rules with Roth conversions. I kind of told about them earlier is that if you are over 59 and a half and have any Roth IRA for more than 5 years, then you know, all withdrawals from any of your Roths are, you know, tax and penalty-free for life. If you’re over 59 and a half but haven’t had a Roth IRA for at least five years, you can still take out any of your converted amount. But, you know, if you’re if you’re younger than 59 and a half, then obviously other rules apply as well. Bottom line is if you’re going to do the conversion, you want to wait 5 years anyway because you really want to give it enough time to make up for the taxes you’re paying. you really got to get leave it in for seven to 10 years anyway for it to really make sense. So, all right, who can do a Roth IRA conversion? Anyone really. Um, you know, there’s no age limits, no income limits, no requirement to be working. Anybody can do a Roth conversion anytime you want. Um, it can certainly reduce um, you know, it provides a hedge against future tax rates. Um, nobody knows where they’re going to be. And even if they don’t, they’re not going to go down that much. They’re not going to go from 24 to 6% in the next 20 years. I’m pretty much going to guarantee that. Uh, I know we’re not, we don’t live in a world of guarantees. I have to put on my disclaimer hat, but you know what? If they do, you come to see me, I’ll buy you lunch. I promise you. All right. Um, and they can also help manage costs tied to other income as well. So, um, you know, social security benefits included in income, um, Medicare Part B premiums, all that stuff. If you get it out and reduce it earlier, well, then that won’t contribute later to your income.
Um and also another benefit is Roth IAS don’t have a required minimum distribution either. So you can take it for your lifetime. Your account grows up t grows taxfree for life and then it also provides taxfree income to your heirs as well.
Um, now the the Tax Cuts and Jobs Act, they had a big change in 2018. Um, you know, it’s enough time where if you rolled over a if you had a beneficiary IRA or if you if you did a rollover back then and you you wanted to change it, well, you could, you know, you can reconvert it. Um, now you can’t do that anymore. So if you’re stuck with the conversion. So you know just just make sure you plan for that. Um there’s three questions that you got to answer before converting is do you have have a rough idea of your conversion’s impact on your tax bill. You also have to know um you know you have to have the money to pay the resulting taxes. you don’t really want to take it out of your IRA or your, you know, your regular IRA because that’s going to kind of defeat the purpose of it. You really want to have the money set aside from a from a nonirra account because that’ll really allow you to take advantage of the tax deferral over time. Um, and do you have a reasonable expectation that the benefits of prepaying your taxes will make sense in your overall plan? Now, the answer to all three of these questions should be a yes if it makes sense for you. Um, a great way of figuring out whether a Roth IRA makes sense for you is, and typically what I say is whatever your income bracket is, convert it up to the next level. So, up to your next level where you say, “Okay, listen, I’m in a 22% tax bracket. I have 50,000 until I reach the next income bracket. I’m going to do it then. I’m going to put it up to, you know, I have 50,000, so I’m going to put 50,000 in to still stay in my tax bracket. You may even make a determination that, hey, you know what? I don’t even mind paying a little bit more on the cuz if you go into the 24% tax bracket, you’re not, you know, you’re not paying taxes on everything 24%. only on what you put into that. So, you know, anything that spills over into it, then you’re paying the extra 2% tax. It still may make sense if you, you know, if you say, “Hey, you know what? I’ll pay the 24% now on that portion. I’m only paying 22 on the amount that fills up this bucket.” But once you go beyond into into this one, okay, you’re paying an extra 2% on that. It still may make sense in the long run, but do a plan where we can determine what’s best for you based on, you know, your expenses, your living, your age, all that good stuff. What you want to do is the first thing you want to do is hunt for low income years. COVID was a great time to do Roth conversions because some pe especially business owners had unusually low sales or if you have unusually high expenses or if you had, you know, you got hit with a really high non-reoccurring medical bill, those are going to reduce your income. Those are great years to convert as much as you possibly can. or after retirement, but before you’re receiving your social security benefits, pensions, and you know, all that good stuff because your your income’s going to be lower. So, you want to try and take advantage of it certainly before certainly before you start. I mean, you can do it after you turn on Medicare, but you just got to be careful with Irma, you know, the Irma stuff. Um, obviously now I’m putting on my disclaimer hat. The potential limitations and risks of Roth IRA conversions. Obviously, there are no guarantees that it does, you know, that the market agrees with you and it does everything that it said. Now, there are ways to really mitigate your risk. Um, but you know, obviously there are no guarantees. So with that, you know, buyer beware, do your due diligence before you start doing it. Okay. Okay. Another idea is move retirement retirement money directly. There are two ways to move retirement money. You can do it indirectly which um an indirect rollover or directly which is a direct rollover or a trusteetoe transfer. What’s the difference? Well, an indirect rollover is when you’re essentially taking a you’re taking the money out yourself. Now, you take the money out yourself. What’s the advantage? The only advantage of doing it that way is if you need a 60-day short-term loan, it might make sense to do it that way because what happens is is you take out this you take out the money from a for an IRA. Now, if you’re doing it out of 401k, they’re going to take an automatic 20% mandatory withholding. Now, you’re going, as long as you roll it over into a qualified plan within 60 days, you’ll get that money back later, but it’s just not as clean. So, you can only do once a year, and you better get it in within 60 days. Roll it over into another, you know, new IRA account. because if you don’t, you’re paying the taxes on the whole thing right there and you don’t get to you don’t get to roll it over. A direct rollover is much much cleaner. It’s basically your 401k or your adviser will send it direct either directly to the new company or they’ll give you they might even give you a check, but the check won’t be made out to you. It’ll be made out to your IRA, you know, for the benefit, you know, whatever institution you’re rolling it over to. for the benefit of your IRA. So, that’s kind of how the check looks a lot of times. Um, okay. Coordinating your IRA planning. Um, you want to take a look and make sure that it makes sense with your overall retirement plan, your estate plan, your tax planning, your education planning, all that stuff. So, you know, we can help you with all these things. It’s not um another thing here is it’s not just what you own, but it’s where you own it. So,
let’s say you have a 100 thou you have $200,000$100,000 in an IRA 100,000 in a nonirra. You’re in a 24% tax bracket. you want to uh own $100,000 in investments that are paying 4% dividends, right? And then or uh sorry, investments paying a hypothetical 4% interest rate. So you’re getting CDs or bonds that are paying 4%. And then you have the other 400 uh the other 100,000 paying 4% in qualified dividends. Okay. All right. So option one, you figure what’s the difference, right? Well, option one, what happens is the hundred thou the $100,000 goes into an IRA paying the 4% dividends and generates four $4,000 of income a year. Your taxable your tax ordinary income rates. Okay. And then it’s 900 $960 in your tax bill. On the other side, okay, you get ordinary income in your bonds, paying 4%. It’s it’s the same amount. So, what’s the big deal? What’s the difference? Okay, let’s switch it. Now you have the $100,000 in your IRA in the bonds and the $100,000 of stocks that are paying the dividends in a non-retirement account. What would be the difference? Well, the non-retirement, those qualified dividends are taxed at they’re taxed at capital gains rates, which is a 15% tax tax rate. So, you’re saving, you know, $360, which, hey, you know what? It may not, you know, it may not make that much, but hey, it looks a hell of a lot better in your pocket than it does in Uncle Sam’s. Obviously, my disclaimers apply. No guarantees. The investments will perform as expected. Um, okay. Coordinating IRA planning with social security. Um, another thing you want to do is, you know, just make sure that when you’re taking out of your IRA that, you know, a lot of people retire, you know, claim their social security benefits earlier than they should. And it can really if you do so I’m not saying don’t claim your social security earlier but just coordinate it with your with your IRA withdrawals. Um because if you’re withdrawing from if you’re withdrawing from your IRA then try to delay your social security because social security is going to be the best it’s the best annuity you’re ever going to get because it it increases by 8% a year. So by withdrawing out of your IRA first then then what’s happening is you take your your IRA money first you contribute that outward. Now, if you have a longer lifetime, it’s going to make a lot more sense to do that. If you’re not going to have as long of a lifetime, then it may not make as much sense and take your social, you know, who knows? But if you know, listen, if everybody in your family lives to 108 years old and you know, and you’re fit and in great health, then you may want to wait on the social security and take out of for take out of your IRA first. If nobody in your family lives beyond 75 and you’ve already had two strokes of heart attack, well then it may make sense to, hey, you know what? I’m going to take my IRA later. I’m going to take my social security when I can and take my IRA later. Um, the biggest beneficiary of your IRA is going to be your beneficiaries most likely in that case. But doing planning kind of helps you kind of see what’s the best thing for you. Um, coordinating IRA planning with your estate planning. Well, um, IAS and retirement accounts generally pass via, you know, a beneficiary form. Um, but your will, your will does not generally control who gets your IRA. So it automat So one of the biggest mistakes people do especially if they make a trust a beneficiary they just name okay they they name the they name the trust the beneficiary of their IRA that is a big mistake on most cases. Why? Because an IRA stands for individual retirement account. A trust is not an individual. So, the only time that that makes sense to do is if you got a kid who’s a nerd do well drug addict or gambling addict or they’re just completely irresponsible with money and you want to make sure you control the money that they get. Okay, then it may make sense to make a trust the beneficiary of an IRA. But your biggest beneficiary of that is going to be the government because when you take out of the IRA into a trust, well, trust is not an individual. So, it’s going to be taxed all at once. Thanks for playing. And Uncle Sam is going to be your biggest beneficiary. Now, if you name a beneficiary, well, if your your spouse, they get to take it over their lifetime. your kids or friends or anyone else you name, they get to take it over the course of next 10 years. So, they get to take it out slowly. So, that’s why it makes a lot more sense to to have a beneficiary form and name your beneficiaries. If it’s a charity or you can name all that stuff in in on a beneficiary form. There are lots of different types of IRA beneficiaries. Um, I’ll go into this individually if you want cuz I know I’m running out of time here. I got a little acquacious today. Um, uh, these are the non, uh, I’ll I’ll go into these later if you want to know them. Um, but eligible designated beneficiaries, obviously, spouses, all these other people are, so they get special treatment. Spouses can basically stretch it out. Um uh however other people you know they get the stretch IRA they can take it out over the court but there’s very there’s very specific limitations to that um as I said trust is IRA beneficiaries I kind of went through this already the control versus the complexity and co cost. All right. Um, spouses have a specific decision to make. They can either do a spousal beneficiary um or and which is essentially they just do a spousal beneficiary is different as than rolling it over into their own IRA. If they roll it over into their own IRA, then it’s their IRA and they can take it over the course of their lifetime. If they roll it over into a beneficiary IRA, well then one, they don’t have to wait till 59 and a half to start taking the income out. They can take it out, you know, they can take it out immediately. Um, but there are some rules to that. Um, so here are the rules that if you do a spousal IRA, obviously it just rolls over into their, you know, Mrs. Smith’s IRA and it’s her IRA. So, if she’s over under 59 1/2, then same rules apply. Um, if she’s over 59 and a2, it doesn’t really matter. Um, but if you remain as a beneficiary, then obviously it’s as a IRA beneficiary and the the early withdrawal penalty does not apply as well.
Watch out for scams. There’s a lot of scams out there uh when it comes to uh when it comes to a lot of these IAS and things like that. Unfortunately, you know, when it comes to your mortgage, your house and IRA, those are the two biggest assets that most people have, which makes them ripe for scammers. So, just be careful when you’re out there. Talk to someone who knows about it. Um and we’re here we’re here to help. So with that, you know, as I said, we can do a plan. We can help you kind of figure out the ins and outs and what makes most sense for you. So with that, okay, so questions, shall we? Let’s get to the questions here. Um, first thing is, hey, um, if you want to I’m gonna answer I see a few questions here. Uh if you want to make an appointment with me, um you don’t have to it doesn’t cost anything to make an appointment with me. If you want to ask me questions, if you want to do a plan, anything like that, there are two ways to do it. You can either um just let me know, you know, put in the chat or the question and answer, just put email or phone. Lets me know how best you want me to get in touch with you. Or better yet, you can just scan this QR code right here. It takes you right to my calendar and you can pick a time that works for you. Book a pick a book a 30 minute appointment to start. Then we can figure out if you want to do a plan or not. You know, we’ll go from there and see if it makes sense for you. Uh again, there’s no cost to do that. It’s no cost to set an time with me as well. All right. So, questions. All right. Uh first question here is um can I do a wroth if I am married filing separately? The answer is yes you can but the limits on what you can contribute to it are well contributing to a Roth the the limits are different than being married filing jointly. So just be aware of that. If you want to know, get back in, you know, get back in touch with me, make an appointment. I’m happy to uh I’m happy to help you with that. Okay. Next question is, when moving money from a when moving money from a 401k to a Roth IRA, is that money counted towards your yearly max contribution amount or is it separate? Okay. If if you are converting it, it’s not because you’re not contributing to your not contributing to your Roth IRA. You’re converting. So, you’re paying the taxes on it. That money is going towards your, you know, going towards your income. So, it could if you do if you do enough, it could set you over the limit of how much you can contribute to a Roth IRA, if you can do it taxable or not. Um, but um you know, but other than that, no, it it is that’s not considered a contribution. It’s considered a conversion. Uh hopefully hopefully I asked answered your question, but you can do both. You can convert some of your money. Say you have Okay. Say you have, you know, um, you want to convert $50,000. Okay, you’re converting $50,000. You still have, you know, money before the the limit. You still have room in there. You want to contribute to your Roth IRA as well? Absolutely, you can.
Okay. Question number three. Shouldn’t another considerate Shouldn’t another consideration of a Roth IRA be to compare the NPV cost of prepaying the taxes compared to the tax deferral. Sure. Yeah. That is the net. Um yeah, that’s why it’s good to make that’s why it’s good to make a uh to make a plan. Here’s when a Wroth makes sense. A Wroth makes sense if you’re young. So, this was the rule that I always gave everybody when they, you know, um whether or not they should invest in a Roth or a traditional IRA. A Roth, you absolutely want to over time a Roth is always going to be taxfree is always gonna most of the time going to be better than tax deferred. Okay? So, when you’re young, like my daughters when they first started working, my my son who’s, you know, got his part-time job, he’s got his Roth, he’s contributing every year. They’re maxing it out. Fantastic. Okay. Well, because they’re not making anything. So, they’re not paying any taxes. They don’t mind paying the taxes upfront because they’re in they’re not making any they’re not making any enough money to pay taxes anyway. So, I say contribute as much as you can to it because they’re in a very very low tax bracket if they’re paying taxes at all. So, okay, great. Now, that money grows taxfree for the rest of their life. I have a parable that I I I run a uh a club in San Francisco called uh the Lincoln High School in San Francisco called the money club where I teach kids about entrepreneurship uh personal finance and and uh investing. And I use a parable to show the time value of money. If you have two brothers or sisters, doesn’t matter. Um, if you have two siblings, one of them it they both start working at 20 years old, one of them started saving, maxed out their IRA for 5 years and then never added another dime. The other one partied for the first five years and then they maxed out their IRA every year following.
The sibling that started five years earlier and stopped, he will never be caught by the sibling who started five years later and never stopped investing. How can that be? Cuz they’re contributing, they’re maxing it out every year. This person, the the one who started earlier has only contributed what? $7,000, you know, 30 $35,000. How is the other one never going to catch him? Because of the doubling compounding interest. In 7 to 10 years, that money is going to double. So by the time that first sibling is starting, by the time they get to their fifth year, well, now that other that other sibling has doubled their money and then it’s doubled again and doubled again. They’re never going to catch him. It’s the same thing. So if you have time, Roth is better. Um, you know, but it also depends on your situation. So with that, um, you know, it it makes sense to obviously the more time you have, the more time, the more it makes sense to convert it to a Roth. If you don’t have that much time, it may not make as much sense. But that’s why a conversation, have a conversation before you do anything. With that, I know we’re getting uh I I ran a little long here because I usually try and keep this to an hour. Um I’m gonna stay on for a few minutes longer if anybody has any questions, but I want to honor your time as well. Um there usually are questions that trickle in. Let’s see if we have any other uh questions trickling in. Oh. Uh, yes. One other question trickled in here about um this is about the difference between could you explain the difference again between a making your trust and naming a beneficiary directly? Yeah. Okay. When you name a trust as a beneficiary, a beneficiary is not an individual. So if you if you have a half million dollars in your IRA and that trust that trust will uh you know receive that money well then $10 million is taken out as ordinary income and so with that you the government’s going to receive whatever that amount is that’s going to probably put you in like a 35% tax bracket or something like that or 31 somewhere. somewhere around there. So, at least about a third of it’s going to Uncle Sam. Now, why would you want to do that? Most people don’t. The only reason why you would want to do that is if you want to control the assets and make sure that that’s, you know, the beneficiary doesn’t kill themselves and put it all in their veins or something like that. That’s that’s the only reason why it may make sense to do that. Otherwise, name your beneficiaries directly. Um, IAS do that. Uh, a lot of annuities will name actually any account nowadays just about. You can name beneficiaries directly too. So, if you want to know more about that, please feel free to give me a call. We’re here to help. Um whether it’s you know if you want to talk about investments to you know get more out of your money while protecting it. If you want to do some if you’ve had a major life change like, you know, you just bought a new house or you just got married or your kids just went to, you know, or you just had a child or or you just changed your home, you bought them, you know, whatever it may be. If you had a major, you just changed jobs, great time to do a plan. or if you’ve done your plan, your retirement’s set, and you want to take a look at your make sure your retirement and your uh your estate planning is in order, we’re here to help. So, with that,
make an appointment. We’re here to help. Uh again, I’m going to stick around for a few if if people have qu further questions. I’m going to stick around. If you want to say hello and whatnot, I’ll open up everybody’s mic as well. So, with that, have a great day, everybody.
If you do want to ask me a question, um, if you do want to ask me a question, what you need to do is, um, all you need to do is hit your microphone at the back, unmute it, and then, uh, ask away if if you got a question for me or you can still put it in the chat or the uh you can put in the chat or the or the uh Q&A.
Other than that, I’m gonna be on for a few minutes longer, so feel free.
Hey, Bill. Hey, Joe. How are you? Good. I was going to type in you a note, but it’s going to take too long. So, there you go. Feel free to ask away. How you been? I’ve been been well on you. I’ve been Can’t complain. Yeah, I’ve been I uh so in September, I will turn 73. Yep. And so, exactly how does it work? Do I have to take out the full whatever the full computer do for 2026 or is it prrated or start next year? How’s that that work? it. Well, it’s it it So, if you turn You turned 73 this year. Yes. Okay. Um, next time we have a review, I’ll go over it with you. Um, but typ what has to happen is you have to take it out by Well, you can either take it out by the end of the year or you could also delay it until because you’re in the second half of the year, you can delay it till April. Um, but it may may not it might not make sense to do that because if you delay it till April, you can delay it till April. But if you do, you’re going to you’re going to end up adding to what you’re going to have to pay next year cuz next year you got to take it by the end of the year. Okay. You know what I mean? Yeah. Okay. So, they give it to you for your first distribution. They do allow you to go until April to take it out, but I wouldn’t I’d take it out by the end of the year because otherwise otherwise you’re just adding to your essentially you’re adding to your RMD next year, which tax bracket it make it makes sense to pay as little as you can with going along. Yeah. Yeah. just, you know, by the time you add in like Irma, you know, if it would like trip the next Irma and and when I get say close to the RMD, would it make sense then to take out, you know, part of it this year and part of it next year? Well, we’ll I’ll tell you what, we’ll take a look. We’ll take a look at your plan. Okay. Um and we’ll, you know, next time we meet, if if I’ll tell you what, whence when’s the next time you’re in the uh Bay Area, we’ll we’ll make an appointment. I will be around tomorrow and again on Monday. Okay. Uh tomorrow I’m pretty booked solid. I’m I’m on the road on the in the peninsula. Uh but Monday I could probably do it. Uh morning or afternoon? See Monday I have an appointment at uh let’s call it two. So you know like um noonish would be good. Somewhere around there. All right. Hold on a second. Monday at noon. That is the 22nd at noon. Noon. Uh, no problem. Yeah, I I have you down. Okay. Um, you you want to you want to meet my office? You uh how how are you going to be down in the Bay Area? You want me you want to pick you up at the airport or I’ll be flying into the airport in San Carlos? I may I may be able to borrow a car there. I’ll let you know. Um, yeah, just give me a call if I because I can I can easily drop that because I’m going to be down. Um, yeah, it’s that’s not a big deal. That’s, you know, that’s 10-minute drive from me, maybe 15. Yeah, I got up and try to borrow a car because I got a couple other places I got to go after that. Okay, but I will I will let you know. You know me, I’m a full full service full service financial guy for you. Yeah. Yeah. Yeah, we got no problem. I’ll see you on uh I’ll see you on I’ll see you on Monday. Just give me a call. Let me know. um in the morning uh you know let me know in the morning before and I’ll let you know whether or not I can you know cuz if right now I’m free before that but you know who knows you know the typically at the end of the week my next week fills up quite a bit so but I got you down for Monday at 12 that should be good I’m I’m I I would do a little earlier but I’m just hedging in case the weather Yeah precludes me getting in any earlier than that so okay all right Well, have a great weekend. I’ll see you on Monday. Okay, Bill. Thanks. You got it. All right. Bye-bye. Bye.
And that’s how easy it is to make an appointment with me if anybody’s still on.
All right,
we got uh Isabelle, Jason R, uh Susan Bertram, if you guys I don’t know if you guys are still on or not or um but if you uh if you have any questions or anything, feel free to ask. Well, hi Bill. This is Susan. I’m still on, but Hello, Susan. Hi. I was um gonna go ahead and um schedule something, I guess, you know, through your QR code. Um well, you got me. If you want to if you want to do it directly through me, either one works. Okay. Um if you want to check your calendar, you can do it with your Q QR code, too. Okay. Where are you located in um the P? I’m just north of the airport. So, I’m in South San Francisco. Do you um where are you at, Susan? Oh, I’m in San Bruno. So, that’s great. Oh, no. Come on. You’re you’re you’re half Actually, I know. Where at San Bruno are you? I’m um off of 280 and um San Bruno Avenue. I don’t know. Get out of here. I’m I’m uh I’m I’m on Park View Drive. Oh, wow. Just right next to the uh right next to the city park there. Oh my goodness. So, I am You can you can you can uh throw a rock and hit me. So, I won’t do that. I promise. Well, hopefully I won’t give you a reason to. Okay. Um, I’ll just schedule it with the QR code. Um, yeah, but my just to give you a heads up, my thing is um the whole Irma thing and you know um unfortunately I didn’t learn enough about it before. So, you know, now I’m dealing with it and it’s okay. You can still, you know, you can still navigate around it. I just want to make sure you don’t go in blindly and say, “Okay.” Cuz I’ve I’ve had some people who come to me after the fact and they say, “Oh my god, I I I thought it was a good thing before I retired and then they didn’t know about the Irma and it ended up killing them there.” Yeah. Oh, you you did it prior. I um well I I learned yeah I did it and um then I started you know getting a penalty and you know doing the appealing which you know I retired two years ago so I’m still doing the appealing but it’s not looking good because they get your money they don’t like to give it back. Yeah. And you know if you have the income you have the income. I don’t know how to um I know that sounds I guess there’s worse problems to have, right? But it’s like I mean I I hear you. It’s Listen, I don’t I always tell my wife um and my kids. I’m like cuz my wife always thinks, you know, I she gives me like I’m frugal when it comes to certain things and she you know, sometimes she she talks to me as if I’m Mr. cheapkate and I’m like because I drive like she’s got her Mercedes and all that and I’m like hey God bless you like your Mercedes. She’s got a comm she’s got a commute to Alamita every day. So she’s like I spend a lot of time in my car. I want to make sure I’m in I’m you know I spend a lot of time here just as much time as I do at home. So I want to be in my car and be comfortable. I’m like how it honey? Yeah. But I think she feels guilty because I’m a Subaru guy. Like I just I had a I had a Toyota for I had a Toyota for about 10 years and then I gave it to my daughter in college. I have a hard time paying a lot of money for a depreciating asset. Yeah. So So she comes to me and then I I just got a new car. I got a Subaru because I know they’re going to last forever. You know, Toyota Subarus, they last forever. But she kind of comes to and says, “Oh, you’re a cheapkate.” And I’m like, “No, I don’t mind spending money. I hate wasting it. I hate blowing it.” Yeah, that’s me, you know. Well, you guys probably make a good balance then. Yeah. You know, I mean, she’s we’re good. Listen, she you know, but we go we definitely have our times when she’s she’s definitely gotten me to splurge a little bit more on experiences and things like that. I’ve certainly gotten her to think about sometimes, okay, are you really getting value out of that uh, you know, out of the 50 pairs of shoes you have in your closet, right? Right. You know, you want to pair them down a few and, you know, but you know, then again, I will never come between a woman and her shoes cuz one of those shoes might be uh put in a place that I don’t want it to be. So, there you go. Sounds good. Yeah. No, knowledge is uh the key, I think, you know. So, anyway, I’ll I’ll schedule something with you and see if um Yeah. And it’s not too late. I mean, it’s never too late to make a plan. There are still ways that you can still convert, you know, and the good thing about, you know, I mean, listen, it sucks that you got hit with the, you know, with the premium penalties. Uhhuh. You know, you got hit with How much did you get hit? How much did it kill you? Um, I think it’s like 400 a month or something like that. Oh man, that sucks. I’m sorry. Who Who did you convert Who did you convert your your 401k? Who did you convert it with? No, I didn’t. It’s just um based on income, you know. So, you know. No, no, no. But did you have an adviser that helped you do that or you just did it on your own? Um, I didn’t convert um anything. You’re talking about the four the 401k just getting Okay. You mean that your income is already you’re already getting hit with Irma? Yeah. Yeah. Okay. So, um but you know I do want to talk about um if I should convert a little bit like where’s you know because it go you know I’m going to be hit no matter what. So um so yeah. Now that you’re already in it now, you don’t want to hit the next level, but you may want to convert because what you do is if you convert now, it’s going to help you later in later years of your conver, you know, of your income because now you’re converting your IAS to Roths. So, yes, it can help you in the future. Yeah. So, that’s what I wanted to talk about is just, you know, what little things I could do and Absolutely. Yeah, that’s one of the things that planning can really do. It can really help you kind of take a look at where you um you know it really helps you take a look at where you stand and where to go forward, you know, and I can give you some strategies on how to make you know, best make your money work for you. You know, whether you decide to have me manage your money or not, it doesn’t matter. We can still help, you know, that’s what we’re here to help you with. Yeah. No, I appreciate that. So, okay. Well, I will schedule something. Sounds good. I look forward to seeing you soon, neighbor. Thanks. Yeah. And I enjoyed the um webinar. That was great. Great. Thanks, I wish I I wish I had listened to it like three years ago. Well, what the good thing is you got it today. Yes. All right. You didn’t you didn’t hear it three years from now, right? Right. All right. Okay. Well, thank you. Look forward to um meeting up with you. You got it. Take care soon. Have a good day. Okay. Byebye.
You’re very welcome, Jason. Look forward to hearing from you soon. If you got a question you want to ask, feel free to uh unmute. You can you can ask me a further question if you want if you’re still on.