Required Minimum Distributions – Not Required This Year But Should You Take It?

We recently saw a humorous quote stating that they “missed precedented times.” 😊 That is so true as we come near the end of 2020. There will be plenty of reflection that occurs for years to come. Hopefully, many good things can be remembered. 

November is an excellent time to think about pre-planning. It’s a great time to look at strategies for reducing taxes before December 31st. Every year at this time we start talking with clients about their required minimum distributions (RMD). By definition, this is the amount of money that must be withdrawn from a traditional, SEP, or Simple IRA account and qualified plan participants of retirement age. The original starting age was 70 ½ and has now been changed to age 72. Earlier this year, Congress waived the required minimum distributions. 

Even though participants do not have to take it, here are a few reasons some may consider it: 
• Low income and low tax bracket – If your income for 2020 is in a low tax bracket, it may be wise to consult with your accountant and see how much money can be withdrawn from your tax deferred account with little or no taxes at all. If the funds are not needed for spending, then they can be transferred into a brokerage account and managed. If every year for your tax return you pay no taxes at all, then this might be something to investigate. 
• Converting funds to a Roth – There are times where taking funds from the IRA and converting them to a Roth is extremely beneficial and this year may be the best time. When funds get converted, they show as income but stay in a retirement account and grow tax free. In traditional years, a Roth conversion is not allowed for RMD. In addition, those funds can then be withdrawn tax free if the Roth has been opened for 5 years or more. 
• A known increase in taxes next year – If there is a known increase in income such as a sale of a business, an expected pay increase, or the potential of rental income from a property for 2021 and it will influence the tax bracket, then taking the RMD this year may be best.
• A higher RMD next year – If it is expected that the RMD is going to be much higher next year because none was taken this year, this is another reason.  As a reminder, the RMD for each year is based off the December 31st value from the previous year and then it is calculated.  

These are only a few reasons why taking the RMD could be considered.  As always, we encourage you to consult with your accountant and your advisor to collaborate and come up with your best tax option for 2020. 

At PFG Private Wealth Management, we thank you for your trust in us and encourage you to be safe. 

PFG Private Wealth Management, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. This material and information are not intended to provide tax or legal advice.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.  Insurance products and services are offered and sold through individually licensed and appointed insurance agents. 

Ep 22: Case Study- Implementing Roth Conversions

On This Episode

We spent last podcast talking about what exactly a Roth conversion is. Today we will examine a financial plan and see how implementing Roth conversions can potentially improve this situation.

 

Case Study Before Implementing Strategy:

Dual income Household: Ages 55 & 53 

  • Existing Accounts:
    • $500k Pre-Tax 401k Funds
    • $25k Roth IRA Funds
    • $50k Cash
    • Mortgage on the home – paying extra on mortgage ($250/m) (5% rate on 30 year loan, 10 years in)
  • Income:
    • Person 1: $110k
    • Person 2: $60k
  • Current Savings strategy:
    • Total Joint Savings 18% of income ($30.6k/yr.) – all into pre-tax
    • Each person has 3% company match for pre-tax ($5.1k/yr.)
    • Total being saved: $35,700
      • EE Contributions: $30,600
      • ER Contributions: $5,100

 

New Strategy:

    • Refinance Mortgage to a 15 year loan with significant reduction interest rate lowers total monthly payment, allows for $250/m extra payment recapture & additional $150/m savings
    • New Total being saved: $40,500
      • 401k EE Contributions: $21,400
        • Pre-Tax: $15,900
        • Roth: $5,500
      • 401k ER Contributions: $5,100
      • Roth IRA Contributions: $14,000
    • Person 1 strategy: EE Total: $23,600, ER Total $3,300
      • EE Pre-Tax 401k Contribution: $11,100 (10%)
      • EE Roth Contribution: $5,500 (5%)
      • ER Pre-Tax 401k Contribution: $3,300 (3%)
      • Max Roth IRA: $7,000
    • Person 2 strategy: EE Total: $11,800, ER Total $1,800
      • EE Pre-Tax 401k Contribution (No Roth Available): $4,800 (8%)
      • ER Pre-Tax 401k Contribution: $1,800 (3%)

 

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More Episodes

Check out all the episodes by clicking here.

 

Disclaimer:

PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:

 

Marc: Hey, gang. Welcome into another edition of The Retirement Planning Redefined Podcast with John and Nick from PFG Private Wealth. Mark Kelly in here along for the ride as we talk investing, finance and retirement with the guys. And this week, actually, we got sort of a follow-up to our prior podcast. We’re going to talk about implementing … Really a case study about implementing Roth strategies into your plan, some things to think about there. Again, if Roth conversions are on your mind, this is a great podcast for you. And as always, if you’ve got questions or concerns, let the guys know. Reach out to them at PFGPrivateWealth.com. John, what’s going on this week, man? How are you?

 

John: I’m good. I’m good. Nick still hasn’t taken me up on that race offer, but I picked up some yoga in the meantime.

 

Marc: Oh, okay.

 

John: So, I’m doing well.

 

Marc: All right. So rowing and yoga. After a couple of weeks, you should be lean and mean and you should be ready to roll.

 

John: I’m trying. I’m trying to get in shape for when I go back out in public.

 

Marc: Did you get the quarantine 15?

 

John: Yeah. A lot of Oreos eating over here.

 

Marc: Oh, yeah. I hear you. Nick, how are you doing, bud?

 

Nick: Pretty good. Pretty good. Yeah, John’s definitely going to have to spend a little bit more time rowing before he can catch up. I’ve got a month head-start on him.

 

Marc: Oh, okay.

 

Nick: And luckily, the irony for me is because I’ve been forcing myself to get out I’ve actually been losing weight, which is kind of nice.

 

Marc: Oh, nice.

 

Nick: And going out to eat a little bit less. It’s funny when you see what kind of difference that makes, for sure.

 

Marc: Yeah. It really does. And everybody has their vice. Oreos, as John was mentioning. Everybody’s got their vice. Yeah, during the quarantine, in lockdown, I certainly was no stranger to my own vices as well. And I was like, “Yeah, this isn’t good. I’m getting fat.” Not happy about it so I’m right there with you, John. Wasn’t Oreos but just as bad.

 

Marc: Anyways, let’s jump into our topic this week and talk about this case study, really, and ways it helps you see implementing how a Roth conversion may or may not work. Nick, take it away. Give us a quick breakdown on what this is and just walk us through it.

 

Nick: Yeah. What we wanted to do with this session is kind of mix it up a bit where … One of the things that we found just communicating with people, especially in the classes that we typically do is when we walk through almost a little bit of a case study and give a sample example of a household, what they have in assets, what they have in income, how they’re currently saving and the things that we can do with pretty minor changes within the structure available to really try to improve their overall situation and planning.

 

Nick: The scenario that we had put together was a dual-income household, ages 55 and 53.

 

Marc: K.

 

Nick: And their existing accounts were pretty heavily dominant to the pre-tax side. Half a million dollars in pre-tax 401K funds. They had about $25,000 in Roth accounts, $50,000 in cash between checking and savings, 30-year mortgage … About 10 years in to a 30-year mortgage. And they were paying an extra $250 a month towards the mortgage to try to get it paid down.

 

Nick: One of the most common questions that people have when they come in to see us or come into a class is, “Hey, I’m saving. I’m doing a good job with saving. But am I saving in the right area? Should I be paying this extra money towards the mortgage, et cetera?” The breakdown in income was person one, $110,000, person two, $60,000 of income. So, total household income of about $170,000. And the reality is that both of them were getting a company match into their 401K and they were saving … Between the two of them, they’re saving essentially 18% of their income but they’re putting it all into pre-tax accounts. The Roth accounts that they have on their balance sheet are essentially accounts that they’ve had for a long time. They funded it early on and then at a certain point they got phased out because they made too much in income.

 

Nick: Their main question or, I should say, potentially goal when they came to us was, “Hey, again, we have a good income. We’re living comfortably. We live within our means. We save a good amount of money. But are we doing it the right way?” One of the first things that we did was evaluate the mortgage and, really, what we’ve seen in John’s work on these quite a bit with a few different clients is that mortgage rates have obviously dropped in the last …. These clients were 10 years in so mortgage rates have dropped. And they went ahead and spoke to their credit union and they were able to refinance. One of the things you always want to look into is try to keep down closing costs, et cetera. And they were able to reduce the payment.

 

Nick: And so, really, with rates where they are, they were able to go from having 20 years left on their mortgage to refinancing to a 15-year mortgage, which is something that they felt much more comfortable with. When we discuss mortgages, we always have the conversation of pure finance decisions versus a comfort level as well. They were able to reduce their monthly principle and interest payment by $150 a month over their 30-year. Essentially, what we’re able to do is we’re able to recapture the $250 a month that they were paying extra towards the mortgage to try to shorten it, take five years off the mortgage with the refinance and save an additional $150 a month. Really, we’ve got a $400 a month savings plus we shaved five years off the mortgage automatically. The goal being how do we redeploy that money?

 

Nick: John, any tips for people when they’re looking for refinancing on the mortgage and some things to look into?

 

John: Yeah. One thing, you just want to analyze what the rates are, what you’re currently at. I know a lot of people use the rule of thumb of basically if you can lower it by one percent it might be a good idea to at least look into it, and that’s where we start is look into it depending on what rates are and what your current rate is and then work with an advisor or some type of mortgage specialist to evaluate exactly, does this make sense for me? A decent website just to see where rates are at is BankRate.com. Just be wary putting your name into anything because we have had some people where they … “I put my name into this. I’m getting bombarded with phone calls from everybody.” BankRates is a good place to view but ultimately, you definitely want to work with someone and just figure out what’s best for your situation.

 

Nick: For sure. From there … Again, part of the emphasis for us, and I know that a lot of our listeners and our clients have heard us talk a lot about the importance of balancing … Trying to create some sort of balance or equity in portfolios from the standpoint of we want to diversify future taxation and current taxation. With this client, they were very heavy on the pre-tax. Half a million in pre-tax, only $25,000 in Roth dollars. Client one, essentially their plan at work allows for Roth 401K contributions where client two, their plan does not allow for Roth contributions. That’s one of these things where sometimes households we’ve seen when there’s a dual-income household they try to make everything even and it’s not always the best strategy when we look at it from a global standpoint.

 

Nick: The other thing that we’ve seen people not necessarily consider or quite realize or understand is that when their employer is making a match contribution for them, those match contributions are pre-tax contributions so there’s additional money going in. Previously, for the household, they were contributing on their own about $30,000 a year into retirement accounts and they were getting about $5,000 a year of company contributions. And now, after the refinance, what we’re actually able to do is increase the amount that they’re saving.

 

Nick: One of the first things that we’ll look at for clients is the income test on whether or not they have the ability to contribute to an individual Roth IRA account. This household came in underneath the limits, which means … And they’re over the age of 50, which means that all of them are able to contribute $7,000 a year into a Roth IRA account. The benefit, obviously, of having an individual IRA account is that they’re going to have some more flexibility on the investment options that they have and if they want to work with us and have us invest the money for them, they have that option. Whereas when they’re dealing with accounts that are strictly held at their employer they’re required to use the funds that are inside of there.

 

Nick: Previously, again … And I know it gets a little confusing in this sort of format, but essentially they were saving $30,000 a year pre-tax. Their employers were putting about $5,000 a year pre-tax. So, about $35,000 a year pre-tax into accounts and then another $3,000 a year into their mortgage, extra. Now what we’ve done is we’ve said, “Okay, we’re able to recapture those dollars from the mortgage and the total amount that’s going to be saved has increased up to $40,000 a year, which is a nice jump.” That breakdown is going to be $14,000 between the two of them into Roth accounts, $7,000 each. The employer contributions are staying the same, so that’s still a little over the $5,000. But client one, because they have access to both pre-tax and Roth options in their 401K, they’re going to put a little less than $16,000 a year into the pre-tax and about $5,500 into the Roth per year.

 

Nick: What we’ve done, in this case, is where previously they weren’t putting any money into Roth accounts, they’re not approaching $20,000 a year of Roth contributions that they weren’t completely aware of how to be able to take advantage of that. And again, we think that that’s a super important step to be able to build in diversification to not necessarily … If a conversion down the road makes sense for them, they can do a conversion. But if we can do it up front, take advantage of the low tax rates that we are currently in in this current environment and not have to worry about future brackets from the standpoint of dealing with conversions, this is something that really allows them to start to build up their Roth funds.

 

Nick: John, do you want to talk a little bit about … From the standpoint of how we might adjust their actual holdings and risk allocation in a Roth versus the traditional funds?

 

John: Yeah. One thing that you want to look at when you’re looking at allocation, overall funds, it’s typically … And I say typically because everyone’s situation is different. You want to be more aggressive or take a little more risk in the Roth IRA or Roth 401K accounts because that has more potential for growth so that gives you a little bit more, again, potential to have more money down the road in a Roth bucket, tax free.

 

Nick: Yeah. We like to try to capture that upside, especially because when you look at it from the standpoint of the total amount of funds when you look at the overall nest egg, the money that’s in the Roth is a lot less money so we feel a little more comfortable taking a little bit more risk with those dollars because it’s a much smaller chunk of the pie. And then we dial back the risk on the pre-tax dollars because that’s a bigger piece of the pie and try to create some balance. And for anybody that may have gotten tripped up with some of the details, because we know there are a lot of moving parts in this, we will have the breakdown in the show notes to be able to walk you through to check that sort of situation out; to see if something like that might make sense for you.

 

Marc: Okay. All right. Absolutely. Definitely a little bit different this week on the podcast, but it’s certainly and interesting way to take a look and see about how different strategies can be implemented into unique scenarios and help things along. As Nick pointed out, follow along with the show notes. They’ll have a break down in there for you, as well, on that. And anything else we need to wrap up with this week on implementing this case study that we were talking about?

 

Nick: I would say that the biggest thing is just for people to make sure that … Again, where people will often times analyze the decisions that they’re making from an investment standpoint is with the sorts of holdings they have and not necessarily with the types of accounts that they have. Just making sure that the methodology that you’re using and how to save and put money into accounts is something that you’re looking at and looking into, whether it’s with your employer, asking, “Hey, do we have a Roth 401K option in our plan?” And if not, getting a few people together to try to push for something like that can really open up options for you. That sort of process is always important.

 

Marc: All right. There you go. All right, folks. Great episode here this week on Retirement Planning Redefined. Hopefully you enjoyed this case study; a bit of a break down and look into implementing Roth strategies. Again, follow along with the show notes on the website. Go to PFGPrivateWealth.com, click on the podcast page. That’s PFGPrivateWealth.com and then you’ll see the podcast page. Click on that and you can follow along in the episodes. And, of course, subscribe to us if you have not yet done so on Apple, Google, Spotify; whatever platform you like to use for your podcast needs. And if you do have questions, if you do want to talk about a conversion or implementing a strategy, reach out to John and Nick. Let them know you want to chat by calling 813-286-7776. That’s 813-286-7776, serving the Tampa Bay area. Get on the calendar, have a chat with them.

 

Marc: Please, before you take any action you should always check with a qualified professional like John and Nick at PFG Private Wealth. And with that, guys, we’ll say goodbye this week. Hope you guys have a great week. Stay safe, stay sane and all that good stuff. For John, Nick, I’m Mark. We’ll talk to you next time here on the show and we’ll see you later on Retirement Planning Redefined. 

Ep 21 : Roth Conversions

On This Episode

With our tax brackets being at historically low rates, many people are looking at implementing Roth conversions in their plan. John and Nick will explain what exactly this concept is and how this may be able to save you some dollars on taxes in the future.

 

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More Episodes

Check out all the episodes by clicking here.

 

Disclaimer:

PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:

 

Speaker 1: Hey everybody. Welcome in to this edition of “Retirement Planning – Redefined” with the team from PFG, private wealth serving you in the Tampa Bay area. John and Nick once again with me on the show, as we talk investing, finance, and retirement. Nick, buddy, how’s it going? How you doing, man?

 

Nick: Pretty well. Pretty well. Just still kind of moving through this pretty crazy time, but no complaints. Pretty fortunate overall.

 

Speaker 1: Good. Good, good, good. John, how you doing, my friend?

 

John: Doing good. Doing good. Recently purchased a rower. Nick sold me on it. He got one about a month ago, and he’s been ranting and raving about it. And I joined the club. So, done a couple of sessions and excited to do a little more.

 

Speaker 1: A rower. So it’s like an exercise machine, like one of those rowing, or actually going out and rowing in a boat?

 

John: No, no. Rowing in my garage, an exercise machine.

 

Speaker 1: Gotcha.

 

John: Once I get good, I might link up to Nick and we’ll race down some fake river on a video screen.

 

Speaker 1: There you go. We’ll have to set that up. We’ll have to shoot that on Zoom or something. That’d be good.

 

Nick: Yeah, ranting and raving may be a little bit of an overstatement, but.

 

Speaker 1: Just a little?

 

Nick: As to be expected these days.

 

Speaker 1: Gotcha. Well, there you go. Well, hey, at least you’re exercising, doing things to stay fit. It’s good for stress and all that kind of stuff as well. So, always good.

 

Speaker 1: Well, listen. Today on the topic, basically we’re going to talk about Roth conversions. If you determined a Roth was right for you, are you interested in converting if we’re going from a traditional to a Roth? Things of that nature. So, we’ll just jump in and start talking about it here today on the podcast. John, let’s kick it off with tax liability. If you’ve determined that a Roth is right for you and you are interested, let’s talk about some of the key components to maybe consider in tax liability would certainly be one of those.

 

John: Yeah. Yeah. Just understanding how a Roth conversion works. When you convert a traditional IRA to a Roth IRA, you pay income taxes at your current tax rate, and in return for that, you’re getting tax-free withdrawals during retirement. And we’ll talk about different strategies with that as we go on on this. But just to give an example, let’s say someone’s taxable income is $100,000, and they meet with their advisor and decided it’s a good idea to do some type of conversion. They say, hey, let’s go ahead and convert $50,000 of your traditional IRA to a Roth. Your new taxable income for that given year is $150,000. So that’s how it would work from a tax liability standpoint. Whatever amount you’re converting ends up being added to your taxable income for that given year.

 

Nick: Yeah. And the biggest thing we like to just remind people when they do a conversion is they want to make sure they have the money off on the sidelines to pay that tax. They don’t want to do it with the converted money, especially if they’re under 59 and a half.

 

Speaker 1: Okay. All right. So, with some of the monies and stuff like that, you want to, again, make sure you’re having those conversations, to the guys’s point. So what kind of strategies should we employ to kind of work our way through this? Kind of like the lump sum approach, we do it over time? There’s lots of conversations out there about ways to go about a conversion.

 

John: Yeah. So one of the things that we do, we focus quite a bit on retirement planning. And when we do that, we’re able to actually model out and estimate what someone’s going to pay in taxes throughout their retirement. And we have certain scenarios where someone might go ahead and retire early. And let’s say, they retire at 62, and they don’t really have much income coming in other than maybe lowered social security amount or they have some non-qualified, basically non retirement assets that they don’t have to pay income taxes on. And we would look at that. There could be a period from 62 to 72 where they’re not paying much in taxes.

 

John: So what we’ll do is we’ll develop a strategy over that five to 10-year period where we’re actually converting the traditional IRA in increments throughout that period of time to really take advantage of that period of time where they’re in a lower tax bracket.

 

John: Well, if you look at that through the life of someone’s 20, 30-year time horizon, that can make a big difference in their overall tax liability throughout their plan. So it’s a nice thing to be able to look at and say, hey, what am I going to pay in taxes? And how can I take advantage of paying less ultimately overall? I know I’ve been talking a lot here. I’ll let Nick jump in on kind of the flexibility of having different buckets of money, whether it’s pretax and after tax, going into retirement.

 

Nick: Yeah, really, both fortunately and unfortunately, one of the things that we tell people that they can count on while they’re working and then in retirement is that there will be changes. And usually the area that there’s most often changes are in tax law. And we’ve seen that over the last couple of years. And so, sometimes people get a little bit caught up on the thought process of which is better, pretax or Roth money. And in our minds, and when we say it a lot, but we try to continuously emphasize it, is that it’s important to have options. And so, to have options, you need to adjust how you contribute or take advantage of Roth contributions and that sort of thing, so that not only are you diversifying from an actual investment standpoint, but from an account type standpoint, which means giving yourself flexibility from a tax standpoint as you take out withdrawals. We find that really, really important.

 

John: Yeah. And where that comes into real life is, let’s say someone wants to buy a car in a given year. They don’t want to take out a loan. You don’t want to take out 40 grand out of a taxable account. That’s really going to increase your tax liability, where if you had some Roth money, you might say, hey, I don’t want to pay any more taxes. I’ll just pull it from that. Or it could be some type of health emergency where it’s unexpected and you’re pulling 40 to 50 grand out in one pop for whatever reason. So, it’s nice to have that option to avoid paying unnecessary taxes.

 

Speaker 1: Okay. So, when we’re talking about doing these conversions, obviously clearly taxes right now are lower. And so, that’s something that is appealing to people, but we also have been dealing with this down market. Is that another component that should be obviously considered? And what’s your thoughts from a conversion standpoint with that in play?

 

John: Yeah. And everyone’s situation is different, and this is something that, this recent downmarket, some people took advantage of, where basically, the market dropped almost 30%, 40% from the high. And they went ahead and said, let me go ahead and convert my IRA and this lower balance, pay tax on the lower amount, so when it recovers, basically everything’s tax-free moving forward. So, just a quick example of that is, say you had an account that was a $100,000 before the market dropped. Assuming 15% tax liability on that money, and it’s a $15,000 tax hit if you were to pull it out. After a 40% drop, the account balance is 60 grand, and a 50% tax on that is $9,000. So you’re looking at about a $6,000 tax difference at that point in time. But the reason you would do it is obviously after market downturns, just typically recoveries and all that growth that you get is now tax-free moving forward. So, that’s a nice little benefit.

 

Speaker 1: Well, and again, any time you’re thinking about that conversion, always check with your advisor, always talk with an advisor. If you’re not working with one, reach out to John and Nick and have a conversation with them about it. But it’s certainly, even before the whole COVID thing in 2020, it’s just been a very popular conversation point, due to the fact that the tax rates that we’re in have been so low. So again, if you do have questions around, is it a good time to convert, should I convert, things of that nature, make sure you’re running your specific scenario past a qualified professional financial advisor like John and Nick. And of course, you can always reach out to them at (813) 286-7776. That’s (813) 286-7776. Or go to pfgprivatewealth.com.

 

Speaker 1: Okay, guys, another place to consider would be the legacy portion. Is that something we should throw into that mix for converting?

 

John: Yeah. So a Roth IRA is actually a great vehicle to pass on to beneficiaries because they receive it tax-free. So, some strategies that Nick and I have implemented with clients in the past is basically converting it so their heirs can get it tax-free, and kind of this scenario where someone doesn’t necessarily need the IRA money for income today. It’s more of a kind of a cushion for them. And the goal is to pass it on to kids, grandkids, whatever it might be. So, to just kind of give a situation here, client’s 68. Don’t need the money for current income. Tax bracket’s 12%, one of the lower ones. And kid’s, daughter’s, in a 35% tax bracket. So, the strategy that this person is doing is, over a 10 to 15-year period, again, going back to estimating the taxes, they’re converting pieces of the IRA to a Roth. Okay?

 

John: Now you’ve got to remember that retirement really is a 20 to 30 -ear period. So you could do this over 10, 15, 20 years. Okay? So during that 10 to 15 years, they’re basically just making all that IRA money. They’re paying taxes in a lower bracket. It’s becoming tax free. So when they do pass away, their daughter in this situation inherits it tax-free. In this current situation, the daughter is actually in a 35% tax bracket. So you could see it as a big tax savings there, because once the daughter inherits it, it’s all tax-free, versus her paying it at 35%. So, kind of just summary, the client pays the taxes at a 12% tax bracket, daughter inherits it in a 35% tax bracket, but it’s tax-free because of the conversions happening.

 

Speaker 1: Okay. And with the stretch going away, does that make that strategy more appealing at this point? Nick, what do you think?

 

Nick: Yeah, I would say, so previously what would happen if we had these kinds of conversations, in a good scenario, or I would say maybe a pretty typical scenario with what John just outlined is, maybe it’s a widow. And between Social Security and pension houses paid off, etc., so they have good income. They don’t really need to take much from their retirement account. They have a daughter that’s a physician, making a really good income. And the strategy is to pass the money down. Well, previously, they might have said, hey, if we pass traditional IRA money to the daughter, it’s not as big of a deal. Ideally, a Roth would be better, but with the way that stretch IRAs work, she would only have to typically take a small amount each year out, but do it over her lifetime. Now that that money needs to be taken out in a 10-year period versus over the daughter’s lifetime, the tax impact is much more pronounced and harder to navigate.

 

Nick: And so, we’re pretty confident that these sorts of conversations with those changes are going to happen much more consistently over the next couple of years. So, that’s just kind of a good example of why and how some of the recent changes make it important to be able to adapt and be flexible.

 

Speaker 1: No, I definitely agree with you. And obviously, there has been a lot of changes. There were changes to start the year. And then, of course, the COVID changes also altered some things. So, if you’re thinking about or have questions about, again, going over a Roth conversion, if it’s right for you, how you want to implement that into your overall plan, or maybe you don’t have a plan and you need to do all of those kind of pieces, well, reach out to John and Nick at PFG Private Wealth and let them know you want to talk about it. It’s certainly a huge topic point, and it can be a very beneficial component or tool to your retirement planning tool belt, if you will. So, definitely have that chat with them. (813) 286-7776. That’s (813) 286-7776. And don’t forget to subscribe to the show, “Retirement Planning – Redefined” on Apple, Google, Spotify, or whatever platform you like to use for your podcasts.

 

Speaker 1: We’ve made it available for you to find at the website pfgprivatewealth.com. That is pfgprivatewealth.com. A lot of good tools, tips, and resources to be found there as well. And of course, you can always just search it out by typing “retirement planning redefined” on whatever platforming app you choose.

 

Speaker 1: All right, guys, is there anything else we need to address with the Roth conversions this week before we go?

 

John: No, I think we’re good. Appreciate your time.

 

Speaker 1: Yeah. As always, we appreciate you guys stopping in, chatting with us for a few minutes. If you’ve got questions about those Roth conversions, again, reach out to them, folks, here on “Retirement Planning – Redefined.” John, Nick, you guys enjoy the rowing machines, and I’ll be looking forward to that competition coming up soon. And we’ll catch you next time here on “Retirement Planning -Redefined” with John and Nick, financial advisors at PFG Private Wealth.

Ep 13: Secure Act Changes – Stretch IRA

On This Episode

We continue our conversation about the SECURE Act. Another big piece to this new law is the removal of the stretch IRA. Nick walks us through the things we need to know about this big change.

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Check out all the episodes by clicking here.

 

Disclaimer:

PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:

Mark: Hey, everybody. Welcome into another edition of Retirement Planning Redefined. Thanks for tuning into our podcast about investing, finance and retirement with the guys from PFG Private Wealth. On this episode, just Nick joining me again. That’s all right. I like talking to Nick. How are you buddy?

Nick: Pretty good. Pretty good.

Mark: Hanging in there. Hope you had a good week since the last time we talked.

Nick: Yeah, absolutely. This is kind of my favorite time of the year from the standpoint of climate in Florida. Most people are in a pretty good mood overall, including myself.

Mark: Well, I’ll tell you what, you guys have in the weird weather we are? It’s in the 70s in North Carolina.

Nick: It’s definitely warmer than I prefer, but I know that it’s going to kind of cool back down. It’s still at least not 90 for four months in a row. I’ll take it.

Mark: Well, the bad part about the warmer winters is it doesn’t get a chance to kill the bugs. I’m showing my old man age there by that, but it’s really true. Every year I get older, it’s like, man, we do kind of need a cold snap during the winter to kind of kill off some of the stuff that is going to haunt us come spring in summer, right? We don’t get rid of some of those bugs. It just makes it that much worse. Hopefully another cold snaps on the way.

Nick: You must live near the woods.

Mark: Woods or water, man. Woods or water.

Nick: There you go. There you go.

Mark: You’ll get it with that. All right. Well, let’s get into our show this week. As I mentioned the last time, we talked about the SECURE Act on our previous podcast. If you haven’t subscribed to the show, please do so on Apple, Google or Spotify or whatever platform of choice you’d like. We’re all over the place with those. We talked about the increase to the RMD age limit and also the contributions for IRAs with the new SECURE Act. The SECURE Act, as I mentioned before, for those of you who’d just be catching this, that is the most significant piece of legislation the government has passed for our listening audience since really the Pension Protection Act of ’06. The SECURE Act is setting every community up for Retirement Enhancement Act.

Mark: This was $1.4 trillion budget piece that they kind of snuck it into at the end of December there last year in 2019. This week we’re going to talk about a really big component, Nick, and that is the elimination or the altering of what was termed the stretch IRA. Really a lot of people they’re saying this is the big negative to this piece of its great for the government because is basically a tax generating… This is the way to create more tax income for the government, but not so great for folks who planned on using this as a generational tool, which is primarily what it was done for to leave wealth to their heirs.

Nick: Yeah, absolutely. It’s going to have a pretty significant ripple effect from the standpoint of people that were planning to leave their IRAs or maybe had adjusted the way that they were taking from their investments throughout retirement and trying to preserve the IRA to pass. That’s going to have a pretty significant impact on that. Plus it’s also going to probably cost some people some money in legal fees as they adapt and adjust their estate plans and legal documents to take these sorts of things into account.

Mark: Yeah, absolutely. What was the stretch or kind of give us a quick overview and then what they’ve done to alter it?

Nick: Yeah. One of the things I always kind of tell people is from the standpoint of a stretch IRA is that it’s really kind of a nickname and it’s a concept. A joke that I would kind of make is if somebody passed away and you had inherited funds that were in an IRA and you walk into the bank and you tell the bank teller that you want a stretch IRA, they may look at you cross-eyed. It’s not an actual legal name for an account type. The real kind of legal name for the account type is an IRA BDA or a beneficiary designated IRA. Essentially what happens is if you inherit IRA funds or you’re listed as a beneficiary on an IRA, there are kind of two classifications for how they look at or at least that’s kind of been the rule up to now where it’s either spouse or non spouse.

Nick: The way that it would work is that if you were to inherit an IRA from a spouse, you could either put those funds into your own IRA, or you could put it into the beneficiary designated IRA. The rules for withdrawals would kind of dovetail from there. For a non spouse, you would also open it as a beneficiary designated IRA. But then the required minimum distributions that would have to be taken from that account would be based upon multiple factors, including your age, the year at which the person passed whether or not they had started taking distributions already, et cetera, et cetera. There are some different rules that went on with that, but in theory you could really stretch that over your entire lifetime by taking the minimum out, and you could also list a beneficiary yourself on the account.

Mark: The reason for doing that was to if it was a larger account for tax purposes, right?

Nick: Absolutely. Let the account continue to compound, avoid taking out in a lump sum and having to pay taxes on the entire lump sum amount. Because just as a reminder for people, when you inherited a traditional IRA or traditional IRA funds, the full account balance has… Taxes are due, federal taxes. If you live in a state where you pay state income taxes, income taxes are due on that full amount. That could be a pretty significant kind of tax bomb dependent upon what happened, especially if you made a mistake in how you had to take it out. Really this new provision essentially applies to people that are going to inherit these funds starting on January 1st of 2020 moving forward. It is not a retroactive rule. Essentially what it does is it says that you must deplete that account within 10 years.

Nick: From what I’ve seen so far, correct me if I’m wrong, the rules on how you need to take out distributions within those 10 years are not as strict as they used to be. However, that account needs to be depleted within the 10 years.

Mark: Right. Yeah. You can do it over like annually obviously, but at the end of 10 years, whatever’s left, you got to pull it out and pay the taxes.

Nick: But you can defer within those 10 years as well.

Mark: Yes.

Nick: Again, that could create a pretty big tax bond dependent upon the size of the account. There’s a little bit of a flexibility and a little less accounting or paperwork on trying to track those required minimum distributions that would have to come out and the amount on are you doing it correctly, are you calculating it correctly, or some people most likely, and we haven’t gotten into it yet with any clients with it being so early in the year, but my assumption is dependent upon the overall situation, people are going to probably take it out equally over the 10 years or try to defer and be a little bit strategic with how they take it out dependent upon maybe there’s an impending retirement. Maybe a husband and wife are 60 years old and they both plan on retiring at 65.

Nick: Wife’s father passes away, leaves them money in the inherited IRA. Our goal is going to be that we’re going to take it out post retirement where the income has come down, try to minimize the taxation, and maybe even let that fill in the income hole that they have between 65 and 70 or even 65 and 72 now that the RMD age for their own accounts has bumped up to 72, and they can let their own account kind of accumulate and grow and defer accordingly. It will definitely add another level of strategy and just kind of thinking outside the box a little bit so that we don’t have to deal with that, but it’s going to be interesting to kind of adjust and adapt to the new rules.

Mark: Oh yeah, for sure. Now, for some of those folks listening who are thinking about this now, I do know there are definitely some exceptions I guess if you will, if you want to call them that. There are definitely some pieces to ponder when it comes to some exceptions I guess if you will. Obviously if you’re a spouse, that kind of stays the same. This is really kind of targeting the heirs, so like basically if you were leaving this to your kids, but there are also a couple of exceptions there like chronic illness I think is one. There’s a couple of others as well.

Nick: Yeah, chronic illness is definitely one. If there’s a disability, that changes and adds a different set of rules. Those sorts of kind of deeper details are the things or the aspects of the new legislation that everybody’s kind of digging through. The attorneys are kind of reading through all the paperwork to make that everybody has a really good grasp and understanding of what those exceptions are and how those funds can be used. Attorneys typically do a good job of interpreting the new rules and laws and coming up with new strategies that allow us to work around them a little bit.

Mark: Yeah, no, that’s a great point. That’s why it’s really important to talk with your advisor about how this may affect you if you are planning on leaving. A lot of people do that. Some people are saying, Nick, with the way this whole SECURE Act is working together with the increase to the RMD limit at 72, age of 72, and then with this, a lot of folks, they’re kind of looking at it saying it’s a tax grab for the government, which of course, I mean, it’s always something, but it’s one of those deals where if you’re living longer and you’re putting more money and you don’t have to take it out and you choose to leave it to your heirs, like these IRAs or whatever, then that’s kind of where this is coming from.

Mark: That’s kind of how the two pieces of the puzzle in some people’s minds are working together in order to generate more tax revenue for the government. It’s certainly a piece where you want to talk with your advisor about how you can now be planning more efficiently.

Nick: Yeah. As an example with that, just kind of a thinking outside the box and how people may adjust and those sorts of things, if there are substantial funds in the IRA and it’s important to you to try to leave money to your beneficiaries, this change in the law may kind of push people to look a little bit more at using a tool like a permanent life insurance policy where they’re going to use their own distributions that they’re taking from their IRA in retirement, apply some of those distributions towards a life insurance policy that is going to pay out tax free after they pass on and avoid that potential tax bomb that the IRA would leave.

Mark: Got you.

Nick: There’s different things. The fun part, and we can put that in quotes as far as the fun part, but the part that we enjoy the most as far as financial planning and retirement planning, et cetera, is that people are different. There are enough rules, laws, product strategies, et cetera, that there’s usually something for everybody. It’s just important for us to kind of get to know them, figure out what’s most important to them, and adapt and adjust the strategies that we recommend so that it fits within their life and what they’re trying to do. This is just another change that we take it into account. We adapt. We adjust. One of the things that we always preface, and this is a really good example of why is…

Nick: In these classes that we teach, one of the most common questions that people will ask us is, should I contribute money to a traditional IRA or a traditional 401k or Roth IRA or Roth 401k? They start to understand by the end of the class together that we say it depends for a reason, things change. The only thing that we know for certain is that things will change. This is a great example. We always emphasize building in the ability to be flexible and adapt to whatever changes we do have happen to us so that we aren’t all in on one certain strategy that we have no control over whether or not it changes. This is just a perfect example, and it emphasizes even more that it’s important to have multiple sources of income in retirement, multiple account types.

Nick: That goes for the funds that you’re going to use in retirement, as well as the funds that you want to leave in retirement.

Mark: Got you. Got you. Okay. That’s why we kind of preached that on the show that anytime you hear anything, whether it’s our podcast, somebody else’s, a different show, a radio show, a television show, you may be hearing some information that kind of peaks up your ears there and kind of gets you to thinking about something. But before you take any action, you should always check out what’s going to affect your specific situation by talking with a qualified professional financial advisor like the team at PFG Private Wealth, John and Nick here on the podcast. As always, we’re going to sign off this week. Really good information here on the show.

Mark: If you’ve got questions about how the stretch IRA, the removal of that or the changes to that are going to affect you or how the SECURE Act in general is going to affect you, make sure you talk with your advisor or reach out to John and Nick at (813) 286-7776 here in the Tampa Bay area, (813)-286-7776. You can also find this online and subscribe to the podcast via the website pfgprivatewealth.com. That’s pfgprivatewealth.com. You can subscribe on Apple, Google, Spotify, iHeart, Stitcher, whatever platform it is that you choose. Nick, my friend, thanks so much for your time this week. I appreciate you. We’ll talk more I’m sure about the other components of the SECURE Act and how it’s going to affect things in the weeks to come.

Nick: Thanks, Mark. Have a good day.

Mark: You do the same, and we’ll see you next time right here on Retirement Planning Redefined.

***Image credit: Trainer Academy

Ep 12: Secure Act Changes – RMD

On This Episode

After it simmered in Congress for a year, the SECURE Act is now law. If you have a retirement account of any kind, or will one day inherit a retirement account, this will affect you. Today Nick will discuss the details around the new age specifications.

Subscribe On Your Favorite App

Disclaimer:

PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:

Speaker 1: Hey everybody, welcome into another edition of Retirement Planning Redefined. Into 2020 with our first podcast of the new year, joined this week with just Nick on the show with me. Nick McDevitt joining me here from PFG Private Wealth. Nick, buddy, what’s going on? How are you?


Nick M.: Just recovering from the holidays and getting ramped up for the new year.


Speaker 1: Yeah, aren’t we all? It’s so weird. Are you used to 2020 yet? I don’t know, it’s a weird number to me.


Nick M.: It is weird. Honestly, I was having this conversation with somebody the other day and the craziest thing to me is, with the age that I am, my grandparents were born in the early 30s, late 20s and it takes me back to thinking about in grade school, learning about The Great Depression and realizing that, that was 100 years ago almost.


Speaker 1: Yeah.


Nick M.: World War I and how far back, growing up in the 90s, how far back the 20s seemed and now here we are again.
Speaker 1: Yeah. Well, to that point, I’m a little older than you is, my dad was born in ’32. Actually my grandfather was born in 1890, go get that. And here it is 2020, so that just totally trips me out. My family had this weird and I’m only 50. But my family had this weird tradition of having, well, they had a lot of kids back in the day, but then they also had them late. My dad was 40 when I was born and so on and so forth. So yeah, maybe that’s why, my wife’s grandfather was born at the same time my dad was, and it’s just really weird how different people’s family dynamics work.


Speaker 1: But to that point, 2020 is bringing us a lot of change obviously and we’re going to spend probably, we’re going to the next two podcasts around this topic, but obviously we’re going to have an election later this year. The market popped 29,000, the DOW did for the first time, actually I think has done it twice now. It went over and then went back down at the time of this podcast taping, here in the early couple of weeks of January. So we’ll see. It didn’t drop very much, but it’s gone over and down. So that’s new records and new things happening, a lot of stuff.


Speaker 1: But out of all of that, one thing that really affects our listener base here for retirees and pre-retirees is the passing of The Secure Act. We talked about it months ago that it was sitting before the house and it looked like it was dead, The Secure Act. But then all of a sudden in December, there at the end, they slipped it through with some budget stuff. So let’s talk a little about The Secure Act this week, shall we?


Nick M.: Yeah, yeah. For sure. I was pretty surprised that it pushed through as quickly as it did. I had some clients that touched base towards the end of the year. And I told them what I always tell everybody from the standpoint of once it’s passed and it’s done, then we can talk about it.


Speaker 1: Yeah.


Nick M.: Because there’s always little adjustments and amendments and things like that, that are made. But a lot of the key aspects carried through. And so we’re still pouring through the details or really getting into the nitty gritty. But we figured today, we could at least cover one of the topics.


Speaker 1: Yep, sure.


Nick M.: And focus on that.


Speaker 1: Yeah, we’re going to do that with this week’s podcast and next week. We’re going to cover the two biggest components that it pertains to a lot. There’s multiple facets to The Secure Act and like any piece of legislation, there’s good and there’s bad. And of course, the government had to give it this name, secure. So for folks who are wondering, it actually is an acronym, it’s setting every community up for retirement enhancement. So that’s a mouthful.


Nick M.: Yeah, I always wonder how many people got in a room to try to figure out those sorts of things and how long it took them.


Speaker 1: How much money they spend just coming up with a name.


Nick M.: Yes, yes. And it actually takes away, fortunately, as you alluded to, the biggest aspect of this is changing the age at which required minimum distributions are required.


Speaker 1: Let’s get into it.


Nick M.: From 70 and a half, to 72 years old.


Speaker 1: Yeah.


Nick M.: Which ruins one of my favorite jokes about, again, the previous rule was so confusing to so many people and so absurd to make it a half a year and people trying to figure that out. We’re constantly befuddled, so now this is pretty cut and dry and pretty easy for people to understand, which I think it is probably a bigger benefit even than the increase of age.


Speaker 1: Well, okay, so let’s dive into that a little bit. So they did raise the RMD limit to 72, as Nick just mentioned. That’s the required minimum distribution, was 70 and a half. Now we should say Nick, to clarify, that if you have already started your RMDs at that 70 and a half threshold, it’s not like grandfathering but you have to stick with that. So make sure you are talking with your advisor about that. You don’t get to switch.


Nick M.: Correct, yes. So if you turn 70 and a half before 01/01/2020, then you are-


Speaker 1: On the old system, yeah.


Nick M.: So it’s everybody from 2020 moving forward, which again is a positive. A lot of people are working longer. And for those that don’t need the full distribution, defer income to live on, it helps them accumulate and grow money for a longer period of time.


Speaker 1: Right.


Nick M.: We’re definitely a big fan of the change.


Speaker 1: Yeah. And I think it needed to be done. I think from that standpoint, it’s good and it does clear up that confusion piece, but we just have to get through this initial weirdness, right, for folks who maybe just turned or are just planning at the end of last year, that kind of thing. So there may be a few areas where you want to try to have that conversation with your advisor about where you fall in that. So it’s certainly a piece you want to ask.


Speaker 1: So as you’re listening to this podcast, if you are new to our podcast and you’re not working with John and Nick yet, make sure you reach out to them. If you’re working with another advisor, ask them that same question, how it’s going to affect you because you still don’t want to get hit with that God awful penalty that the RMDs have, which is 50%.


Nick M.: Correct. Yeah. So just as a reminder for everybody, when those required minimum distributions are calculated. And from my understanding, again, we’re digging through all the language, the actual tables that are used to calculate the amount of money that has to come out, those tables themselves haven’t changed. So it’s just the time that you can wait as a little bit longer.


Speaker 1: Right.


Nick M.: And as a reminder to everybody, as an example, let’s say that the required amount needed to come out as $50,000. And for the last three years you’ve been taking out $2,000 a month from your account or $24,000, the penalty would be the difference between the amount due, which is 50, minus the 24,000 so 26,000. It’s 50% of that $26,000 so it’d be a $13,000 penalty, which is absolutely not a penalty that you want to participate in.


Speaker 1: No, that’s like a death sentence and it’s just terrible. I mean, so they don’t mess around when it comes to making sure you do that. Now this piece of legislation, by the way, The Secure Act, folks, it’s the most significant change since the 2006 Pension Protection Act that has come through. And there’s like I said, there’s a lot of components. We’re just going to talk a little bit about the age limit today. And along with that line, Nick, they also did eliminate age limits for contributions. So tell us a little bit about that.


Nick M.: Correct. So previously, if somebody had a traditional IRA and they were continuing to work, so as a reminder for everybody, if you want to be able to contribute to a retirement account, you must have earned income. So for those people that were maybe, let’s say, one of the things that we’ll see a lot is, to keep themselves busy, people would work a part-time job, so they would have earned income. And they were over 70 and a half and they weren’t necessarily working for the income. Of course, some are. But for example, even if you weren’t, if you were over seventy and a half, you could not contribute that money into a traditional IRA, even though you had the earned income.


Nick M.: So that rule or that restriction has been lifted. So it allows people that are working longer, which is much more common than it used to be, to be able to add money to the traditional IRA and dependent upon other factors, to potentially deduct that. So that’s a nice bonus because the other thing that happened is, because even if you were working in and this is how some of these two tie together. Let’s say you’re 71 and you were still working and you had IRA money and 401k money. Previously you would’ve had to take your RMD out of the IRA, although you could defer or wait on the money that was in the 401k for a business owner. So now that extra year and a half buffer, it can really, on some situations, it can really have a significant impact for some people on avoiding having to pay as much in taxes.


Speaker 1: Yeah. And it really also expands the opportunities for backdoor Roth conversions, as well for older clients, so that’s nice as well.


Nick M.: Yes, absolutely. And for those of you whose ears perked up a little bit on the Roth conversion, there’s a lot of caveats and we’re actually going to have a podcast in the future that talks specifically about those. There’s some hoops that you have to jump through, but that can be a really good tool to be able to use to produce some Roth money.


Speaker 1: Exactly. So yeah, make sure you subscribe to the podcast. That’s a great segue for me to mention that. We are going to talk next time about the stretch IRA and what happened to it in The Secure Act. So by subscribing to the podcast, you’ll get notifications for new episodes and really that’s pretty much it. So it’s a pretty easy thing to do. We just let you know about new episodes. You can listen to past episodes and you can find it a couple of ways. Whether Apple or Google or Spotify or whatever is your platform of choice, you can simply search on their a window, like if you’re on Spotify and hit search. You could certainly just type in retirement planning redefined and get us that way or Apple or whatever platform you choose.


Speaker 1: You can also go to the guy’s website@pfgprivatewealth.com. John and Nick have got the site there for their service, for their company. And while you’re there, there’s the podcast page. You can check that out. So that is pfgprivatewealth.com. That’s pfgprivatewealth.com and you can also call them. As we mentioned before, it’s very important. There’s a lot of changes, a lot of components to The Secure Act. We’re just going to cover over the next couple of episodes what’s going to affect most of our listening audience, but there are a lot of little pieces, so you want to make sure you’re having a conversation with your advisor and about the planning opportunities that may arise from these changes in The Secure Act law.


Speaker 1: Call John or Nick, give them a ring at the office there, if you need to talk with them. (813) 286-7776 in the Tampa Bay area, (813) 286 7776. Anything you can think of extra this week about the RMD component or shall we say goodbye for this week and hit it up next week?


Nick M.: I think we’re good to go.

Speaker 1: With that, we’ll say goodbye for this week on the podcast. So again, talk to your advisor about the RMD age limit change with The Secure Act. Reach out to John and Nick if you need a second opinion and we’ll catch you next time here on Retirement Planning Redefined.