Wealth from Wisdom

You Probably Overpaid the IRS

April 28, 2018
Wealth from Wisdom
You Probably Overpaid the IRS
Chapters
Wealth from Wisdom
You Probably Overpaid the IRS
Apr 28, 2018
Carson Wealth
Show Notes Transcript

This year, Americans paid more than $1 BILLION than they needed to in taxes. How? Americans ignore the one thing that could help them save money in taxes – having a forward looking tax strategy. In this episode, Ron and Paul will teach you how to develop a strategy that works best for you.

Speaker 1:
0:00
Okay, and here's the legal Mumbo jumbo. The opinions voiced and wealth from wisdom with Ron Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk including possible loss of principle, no strategy. You're sure success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SEC registered investment advisor.
Speaker 2:
0:32
The stock market hit another all time. Records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 250 the skyrocketing cost of healthcare and retirement could now run 350,000 planning for retirement today is a whole new ballgame. It's loaded with challenges, obstacles, and trap doors, but you can do this and we can be your guide. Welcome to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. Straightforward and objective advice and how you could make your money go further in retirement. And now here's your host Ron Carson Americans, right?
Speaker 3:
1:11
Overpaying the IRS. You're hurting me, right? The overpay, the IRS. We just got done writing those checks, figuring out what we owe, figuring out do we want to ask permission, permission, or forgiveness on taxes? But even with all that, when it's all netted out, Americans paid a billion more than they needed to pay in taxes, and you heard me right? A set of billion. You might ask yourself, wait a minute, how is this even possible? Here's why. Pretty simple. We see it everyday here at the Carson Group. It's because Americans do the same thing year after year after year, go something like this on or before April 15th they just filed their taxes and then they ignore one thing that can help them pay a lot less taxes, which was what they should've been doing last year, and that is having a Ford looking tax strategy. You're listening to Walton wisdom.
Speaker 3:
2:09
I'm Ron cars off my cohost, Paul West. This is the only show where you're going to get objective advice. It's straight forward. That's sometimes good news, sometimes bad news, but we're not going to sugarcoat. And this was one of those things, Paul. It's a big deal. It's taxes. There's a big difference between tax preparation and tax planning. Tax Preparation is something you do along with your accountant and your reporting. What's already happened, it's in the past. But planning now, that's entirely different. And tax planning, take some effort. It takes a team, but it's designed to help you not be part of that $1 billion. It could be a lot more for you individually cause that's a nut. 1 billion. Think of people that don't pay anywhere close to what they should illegally. We're talking about legal deductions here and if you're, or even getting close to retirement, you're really lucky because you actually have more control over taxes because you can control when you're going to take some of the money out of those retirement accounts and actually have more control than any time in your life.
Speaker 3:
3:12
So today we're going to talk about a couple of things. One. We're going to talk about tax strategies. We're gonna give you four tax strategies that could help you save thousands of dollars so we can reduce that $1 billion mark. You know, also we're going to talk about Paul and I had an opportunity on Monday to go down with some clients to Wichita. And there was 10 of us had this most incredible lunch, two hours and 15 minutes with Charles Koch. Now puts politics aside. Okayi drink. Okay. Charles Koch, him and his brother built one of the largest, they are the second largest private company in the United States. Um, and just as business principles, 82 years old, I want to share for you business owners out there, you're not going to want to miss us. I've had a lot of interviews. I've done habits of top achievers. I met a lot of people in my life.
Speaker 3:
4:03
I will put that two hours and 15 minute time with Mr. Koch up against any, and we were, we're going to kit on just very few. So if you really maybe one of these shows, we should just totally, uh, devote and I'll bet you we could even get them on the radio show. A Betty would come on. He is fascinating. Here's what I would say. Ron is like, um, what you read and what you experience can be two completely different things. If you actually go read all of the media out there about them, it's, you know, 80% negative and I can't tell you how different it was in person. I mean if you're listening to, they think about when you, when you were wondering, you're walking in a situation, you were hesitant, you were concerned and you walk out and you're just completely, totally surprised. It was one of those experiences of like how we endearing and engaging in thoughtful, like I sure hope I am Ronald when I'm 82 years old.
Speaker 3:
4:58
Oh my God. Thought provoking and excited and everything that goes along with it as well. And here's, they said these fit 14 billion on technology in the last two years. He's 82. He's talking about blockchain and artificial intelligence and he's 82 years old. It. Here's the other thing I like, you would never know. He's what? We're $65 billion. I mean, he is down to earth sitting there eating lunch. I mean the lunch started off with us. Oh, going in, they just dropped us off in a cafeteria. It's just go get your food. And then Mr. Koch, can we chill, laid back from there we had is we had as president and as CFO and we had also business leaders with us, clients of ours, you know, just people that are thought leaders on our community. I think they were blown away by the just the experience. And so we're gonna we're going to share, I want to share some of that [inaudible] a little bit about it, but I am going about it.
Speaker 3:
5:52
But here's one question. Let's get cause on the political side. And I'm, I am, um, I'm a small of a sense. I've totally a centrist, you know, I think this whole country is primarily a centrist. And you were saying what the heck site made go read the centrist manifesto by the way. It's awesome. Uh, but if you had to say one word cause we spent of the two hours and 15 minutes, probably 15 minutes on politics, two minutes on business acumen and success. If you had one word to Charles, uh, or a phrase or a thought that describe how you felt about when he described his politics, what would it be? Paul?
Speaker 4:
6:30
Uh, I would say always doing what's best not caring. Which side is this left or it's right. Cause I think one of the fascinating things that he said was most people would put them in what the conservative camp and what did he say back to us when we asked him what he wants? Six. I'm a classical liberal. Yeah. And people were in the room. We're looking like what? What'd he just say? Yeah, but what, what, what was very nice to hear Ron, it was, I'm going to use the word refreshing of somebody just saying, I don't care what side you're on. I just want to make the right decision and give you my viewpoint on the values that are important to me. So I would say the v Word a value
Speaker 3:
7:06
was critical thing I walked away with. And I've had a lot of people say, what did you think of him? Was He arrogant? Absolutely not. Thing I walked out of there with is deeply committed to our country and to our fellow humans. And whether you agree with his physicians or not. And this is um, Bernie Sanders. I remember my son grant was talking about Bernie Sanders and I didn't agree with Bernie Sanders positioned on almost anything but do what I loved about him. I thought he was coming from the heart. He wanted to do what was best for our country. And that's where Charles Koch totally coming from the heart what he believes he believes as absolutely best for his internal stakeholders, for us Americans and for our county.
Speaker 4:
7:50
Yeah, no, and I think he hit the nail on the head and I, in terms of how do you approach life and always be evolving but always at the end of the day come back to your values based principles and do what's most important for you. I mean, and I think it put all the other stuff aside and it goes back and we've talked on this show, it's all about what you read. And I know in today's show, Ron, we're going to talk about taxes because when you say the t word of taxes, you know what most people do? They start to cringe. They get frustrated, they get angry, um, or the reality is, is I hate, I hate pan and dealing with taxes. I'd be curious if the three letters IRS together is probably the most least light eight phrase out there, because why? You feel like you're doing something you shouldn't have to do or you want to avoid it at all costs.
Speaker 4:
8:46
And of course, there's a lot of benefits that go on with taxes and we're not going to spend today's show talking about it. But one of the biggest mistakes we see people make, Ron, is what we call required minimum distributions. And they're called RMDS for short because everybody loves acronyms. But if you hate paying taxes now and you're not 70 and a half yet, guess what? You're going to hate him even more because you're going to be forced. Yeah. Therefore they are forced to actually pay taxes is where planning really pays off because where people get really honked on RMDs are having to take the acquired minimum is I don't plan for it. Right. It just shows up. They come in and say, Hey, I know I got to start taking money out. It's like, well, we should have been doing some of this because depending upon to sequence where you're going to take it, other sources of income, it may have made sense to start it way before it was required.
Speaker 4:
9:42
May have made sense to do a rot. We're going to talk about conversions later on in the show may made sense to do a conversion, so this was one of those things. If you've not, even if you're 60 years old, 55 years old and going to retire, just get, it doesn't have to be as go somewhere, have them actually look at a sequencing scenario for you to say because it can make 10 base, 10% difference in what your tax rate at least maybe even more. That could be a lot more, I mean, so Ron, I'm a share a story here is that a family came in and was talking with one of our advisors and what happened, they were 71 years old and had their first RMD, but they didn't plan for it. Well then what happened? I call it the domino effect. You know when you, when you avoid making a decision, we all do that and that then becomes, I don't want to say catastrophic, but it becomes even more freshman because you waited too long to make a decision.
Speaker 4:
10:38
It caused future pain. It's like I shared last week on the show, um, that hey, if you wait too long to change your oil or you don't get your transmission fluid change, you can have, you know, a disastrous effect on your overall. I love all your automobile referencing those speeding too much for more of that going faster than you think. So I love it because people can relate to that. Yeah. Well I mean it's the same thing here is though all of a sudden you don't plan for that RMD. What happens? Your RMD for these people came to, and by the way, they waited. So then they had to do the two in one year, which the compounded their fact, which then by the way made 85%. Yeah. 85% of those social security benefits became taxable. Plus they had some capital gains that year. Must be, want to stay in a low tax bracket, you know, less than 30% even below 20 this put them in like a 50% effective tax rate because they waited to make these decisions. Right. And I'm like, it just, it drives me crazy that people, when they kicked the can down the road, all they're doing is creating more complexities for themselves, don't we? It's like the oil change, the transmission flush. Just do it. You're making a better decision. Yeah. You maybe you're buying a little more now than you want, but in the long run you're making a way better decisions. When I had a meeting with one of our clients in Denver, it's sold a business and it ended up paying a lot
Speaker 3:
11:54
more taxes than they need to and it goes, all this really upsets me. What can I do now? Nothing. You're stuck. You stuck with white. You have. So if you hate paying taxes now, like Paul said, just wait until you start taking money out of the 401k and all of that RMDs. That's what we're talking about. And if you don't plan, you can have an avalanche of taxes and it will not be pleasant. Do the planning. It doesn't have to be this way. Let us show you how these little known strategies can dramatically reduce your taxes. There's no cost. You've absolutely have nothing to lose to see if this makes sense for you. Be One of the first callers now at eight eight eight four nine 85 13 that's eight eight eight four nine 85 13 if you want to know how to reduce it, how to plan for it, what should you be looking for? Give Carson Group of call 888400900 85 13 I'm Ron Carson off Paul West and you're listening to author and wisdom,
Speaker 2:
12:48
trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth from wisdom. We're there until the fame advisor, Ron Carson, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to well from wisdom with Barron's hall of Fame Advisor, Ron Carson. You'd all be important
Speaker 3:
13:12
asset allocation and diversifying your investment. You hear it all the time, but you have. You really thought about the power of tax diversification and the many ways it can and will probably help you save a small fortune in retirement. Welcome back. This is Walton wisdom. I'm Ron Carson is my cohost Paul West. And this is really the only show in the city where you can count on straight forward, totally transparent, objective advice on how to make better decisions for an hour where your retirement but things you're doing. I don't care if you're in the accumulation phase and on the distribution phase, whatever it is has to do with wealth. We're going to give you straightforward, clear, objective advice and a common language that you can understand. Today we're talking about taxes. It's fresh in everybody's memory cause we just had tax day happen and we've talked about in the first segment, RMDs.
Speaker 3:
14:03
Now this is tax diversification and this is where you want to be careful that you don't want too many assets that are tax exactly the same way or at the same time this causes, if you do, then you're not. You don't have what we call tax diversification. And there's three types of categories. Taxed always. These are brokerage accounts, checking savings. You pay taxes on the dividends, interest capital gains. There's a second category we call tax later. 401K traditional IRA, four o three B real estate, hard assets, stuff like that that you get to pull the trigger on and pay a capital gain or take a distribution, paid the taxes and then three taxed rarely. Roth IRA interest from municipal bonds, certain types of life insurance. And you may be thinking, wow, I never thought about categorizing it in these three distinct buckets by having three tax diversification buckets. Here's a lots of different options on how and when you take money out, which can dramatically reduce your tie, your effective tax liability.
Speaker 4:
15:06
Yeah, and it for around a lot of people ask us is what's the right percentage in each, should it be a third, a third, a third? And you know, obviously your income is going to dictate a lot. You know, if you're even able to contribute to a Roth IRA, how much you've put in your retirement plan your whole life. But I can tell you is, is when people have to make decisions, they immediately think, if I've deferred my taxes, so let's call this tax later category, you're 401k your Ira, your four O, three B, whatever it is. Sometimes it's actually okay to pull the money out before your required minimum distribution because it's actually going to save you more money in the long run. And that's where the tax diversification pays out. Cause you're gonna, you're going to have to pay the piper. He's at some point here.
Speaker 4:
15:50
And so figuring out the right sequencing of that, because you don't want to always have to do the same thing. And I think about this is many, I would assume many of us, you know, when we're thinking about how I wonder to run, I'm going to have for dinner tonight and the next night, you're probably not going to have a hamburger every single night. You're not going to have chicken every month. You're not going to have, there's no car analogy here for this. Sorry, I'm moving. I'm going to move to something else for you can relate to have cars and food. Okay, well I figured that most of us need food to survive, but all right. Yeah. So I'm gonna give you last example. I love Sundays, especially now that it's springtime, it's warm and grilling out with the family. It's one of my favorite things to do on Sunday, family dinner, but you know, every Sunday it's like, what are we going to have different?
Speaker 4:
16:34
I don't grill out burgers every single Sunday and maybe chicken the next week or salmon or whatever it is. It's not always grilling, it's other things. But I, I sequence it, you know, I think I know what the favorites are, so if I ask my children what their three favorites are, it's easy. You know, to know what they understand. But I'm not going to do that all the time. And I look at taxes and your deferral here, Ron, in a great analogy of what's always taxed with hax later and what's tax rarely, most people need a combination of that is they're not going to go have their tax later in wait to the end because that was the pork chop. They don't like eating as much, but they rotate it into their menu because they know they need it and they like to be helpful.
Speaker 3:
17:15
But a variable on, I'm going to throw a fourth bucket in there, which I always think, and we talked to clients about emergency fund, which is cash, which you've already paid all the taxes on and yeah, you're paying a little bit of of interest on it, but that's there. You can supplement these other things without, you know, it's not going to be earned income. So there's really, if you think about it, there's never tax, which is something you've already paid taxes on in a cash account.
Speaker 4:
17:39
Yeah. So another tax diversification. I'm going to actually talk about real estate here for a second run. So, um, you know, many people have real estate, they've had commercial properties, they've had rental properties, and so what happens if they sell their property? They got cost spaces, they're gonna have to pay tax. Now there is some regulations out there and some tax code called 10 31 and I'm not going to go into a lot of detail because it gets way too technical, but you can actually defer the tax into other properties through fee simple. There's actually a very new technique called the Delaware statutory trust that's been actually had a breakfast meeting this morning about that could absolutely be in the best interest. But here's what happens is, so let's say for example, you have a piece of property worth $1 million, you just sold for $1 million and but you had bought it many years ago for 300,000 so if subtract the difference, you've got to pay tax on $700,000 worth of capital gains.
Speaker 4:
18:33
Or you can roll it into a new property if it qualifies for a 10 31 and you don't have to pay that anymore. But what happens is people are so afraid or are so upset of wanting to pay that $700,000 of capital gain tax that they go buy a new piece of property that's worth 1 million but somebody selling it to them for 1.2 and so they go by and pay an extra 20% to avoid paying taxes. It makes no sense. But if you talk to broke commercial brokers around this country, and you've talked to tax planning professionals, and you've talked to attorney professors, they all say people do that. So let me give you an example. What's one of the most famous companies here in Omaha? Berkshire. Berkshire Hathaway. Yup. Yup. So the meeting's coming up in a couple of weeks are going to say Carson Group for, so I was going to, I'll just tested you there.
Speaker 4:
19:20
There's a lot of great companies. So let's just use, if you bought Berkshire, let's just call it the a shares at $200,000 and so now let's just, again, I'm going to use just illustrative example here. If it was at 300,000 so you've got $100,000 worth of taxable gain, that's a good problem to have, right? It's better than losing $100,000 but because you don't want to pay taxes on it, would you actually, if it was selling on the market, but you're only way to get it was for $400,000 but that meant you didn't have to pay tax with somebody actually do that. Yeah. And every time I use that example with people, they look at me like, holy, you're right Paul. It is, why am I doing this on my real estate assets versus I would never do that with an individual security, and I hear this all the time with, we advise a lot of advisors around the country and the like, well, you know, a client doesn't want to sell this because I've got a big taxable gain, but it's 30% of their portfolio.
Speaker 4:
20:18
I said, well, you know, maybe we have another Oh eight and they'll take care of all your tax problems for Ya. Yeah, right. How do they like that answer? Yeah, like, yeah, you're right. It's never, don't let the tax tail wag the dog. It's not, does not make it's bad, bad, bad decision there. Look at your risk budget. You want to be conscious of taxes, but don't let that be the driving force him back to a 10 31 Paul, I did it 10 31 last year. I had some real estate that was developmental. All I did is pay taxes on it every year to hold it as able to 10 30 and I had some appreciation about it and the financial crisis as able to 10 31 that in a farm ground. So there is a great example where I took something that was eating money and didn't have to pay the tax and was able to put it into something paying me.
Speaker 4:
21:06
So now we farm the ground and we actually have income off the ground. So, but you got to look at it, right? What, what are you trading for? What are you getting? Just looking at taxes, you end up making a lot of bad tax. It's decisions. So if we go back to like taxed always. So think about, you know, your checking accounts and brokerage accounts, whatever else you have tax later. Tax. Rarely. Yeah. I think I would share with you is it's very similar to what I call, how do you save and how do you spent? And if you think about it right now, if you have a house, well, you know, important spending is, is you're going to pay your, your monthly mortgage, you're gonna pay your interest, you're gonna pay your taxes, you're going to pay your insurance. Those ranked very high because if you don't pay them, you're not going to be like I was for a very long.
Speaker 4:
21:50
Yeah, what do you do next? Or before that you spend money on food and other things. And then as you get further down entertainment in those things that as you rank really your own personal hierarchy of needs. Well, the same thing applies to the taxes here is what's the right hierarchy on how to spend from these accounts based on what you need, but more importantly, what you need from an effective tax rate. Because it, it's, it's a big mistake people make is they don't think about that. And so they just assume, well, oh, I've already got the money in my checking account. I should just use that money. Well, that could be the worst thing, or I don't want to pay taxes, but it actually may be the best decision for them. It's a similar thought processes. Take care of the immediate needs, but do it in the simplest way that you can.
Speaker 4:
22:35
One of my favorite cartoons, I remember getting into there was a coffee mug and it showed a husband and wife sitting across table. And in the background I had a picture, said IRS, and he showed them what they owe and they, he looks at his wife and says, I think this is more than what we wanting to pay. Negotible well, it is, isn't it? Aye. Well, you can do some planning around it. Not necessarily negotiate. You don't have to pay an accolade. Here are a stakeholder, Terry Shepherds, a chief operating officer of the Carson Group, tremendous accolade. Uh, one of the top 10 women in as the asset management, uh, profession. And she's, if you've never met Terry Shepherd, sought by the Carson groups, sometimes you'll say, you want to meet her. She's awesome. She's cautionary. She call her t shep too. She likes up. Yeah, absolutely. She'll love that. She's a great mother of three boys, a wife and just a rock star stake holder here at the firm. And we couldn't be happier for this national recognition. She was well deserved. Ron. And actually as I look at, you know, we're talking about taxes and we're just talking about planning. I mean I think about how she plans her life, you know, with her family, how she helps us plan here our organization is, and I think about she helps sequence, he helps us all think about how do we sequence
Speaker 3:
23:46
decisions we make, how we approach things. But what's important I think for all of that is what's their client experience, what's everybody's experience and how you approach it. Um, but I think she also helps people keep grounded. And one of the ways help people keep grounded is we have a problem out there that we see with taxes too is, is keeping up with the Joneses is people love to go spend a lot of money and people don't have a clue on what their tax situation is or what people are actually doing. You have money you've saved. Do you have the act after tax accounts? That's great, but what percentage of your money should be in pretax versus after tax? We just got, you're talking about all these different categories and how can you sequence them to make sure that you're getting the most optimal withdrawal, that you're not falling into that category.
Speaker 3:
24:33
Paying $1 billion more than what's owed every year. And they answer is our tax retirement analysis. Yep. You heard that right? Your tax retirement analysis, this analysis, does it cost you anything? You've got nothing to lose. You will learn something. You don't have to do it here at the Carson Group. Just let us give you some value. You can take it somewhere else to see if this works. Give us a call. We've got a friendly person standing by now. Eight eight eight four nine 85 13 that's eight eight eight four nine 85 13 taxes matter, planning matters. Take control. Eight eight eight four nine 85 13 coming up next, we're gonna talk more about our visits to Wichita and our Charles Koch and we're also going to come back with and the final segment, last two tax routed. Geez, I'm Ron Carson was Paul West and you're listening to Walter Wisdom.
Speaker 2:
25:21
He seems good times and bad times and he's got the gray hair to prove it. You're listening to wealth from wisdom with Erin's hall. The same advisor. Yeah,
Speaker 3:
25:29
Rod Carson.
Speaker 2:
25:30
He's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC,
Speaker 3:
25:36
and more now back to wealth from wisdom with Barron's holiday.
Speaker 2:
25:39
Same advisor, Ron Carson.
Speaker 3:
25:41
So many of us are focused on returns and returns only on investment, but so often the big one that gets ignored, the thing that can have the biggest impact on your money is tax. As Paul, I've been talking about RMDS, tax, diversification, sequencing, how all, Yo, how do you categorize in a different buckets? It pays to plan, but don't worry, we've got your back. We're a resource. I'm Ron Carson or urethane wealth and wisdom with my cohost Paul West. Today we're talking about four distinct tax rates, Kelp, you save a lot of money if you just do the planning. And we kicked off the show and we've covered a couple strategies and we like to bounce around a little bit here on what we think are relevant topics for wealth from wisdom. But if you're a regular listening to the show, we would love your feedback. We're going to host a lunch, we don't have the date yet.
Speaker 3:
26:32
Um, but we want to have a focus group on input from the community on how we can improve the show. What would you like to hear? What would you like to format to be? And we're going to host a luncheon here. It Carson Group hundred 32nd dodge in Omaha, Nebraska. If you're interested, send me an email ourCarson@carsongroup.com that's our Carson and Carson group.com or you can give us a call to eight eight eight four nine 85 13 nothing else. You'll get a free lunch and you'll get some input on and really drive, you know what the content and the format a wealth from wisdom.
Speaker 4:
27:07
Yeah, Paul Ryan or we have a lot of fun doing this, but we want to hear for people. Yes, I love when I get texts from people that heard the show or I meet people out in the community and say they listen. But we want to hear from everyone be because you're investing your time, uh, and listening to us and we want to help share. And I hope everyone enjoys that. We're straightforward. We're objective. We're also going to tell you the truth and we're going to tell you what's going on in the world. And we're not going to coach sugar around. Everything is, is there's a lot of great things happening, but you also, it needs to be explained to you in a way that you can understand because a lot of people are fast talkers or they're going to try to share things with you. And that's the beauty of us actually being fiduciaries, Ron, is we have to always put people's best interests first. And so it's fun to share if something's good or not for them and to be able to tell them, you know what, you're doing things great and they appreciate it. I did radio for 15 years and it was a grind. I said I would never do it again. And now we're back. We're back. We've done it over a year. So a lot the
Speaker 3:
28:07
reason it's a grind, there's a lot of prep to get ready for these shows. So we want to know if we're hitting the mark. So really would appreciate anybody out there willing, hey, I'll come, we'll have lunch. I'll give you feedback on, on what we'd like to hear, you know, out of wells from well from wisdom. Um, before we get into continuing our great session with Charles Koch this Monday. Um, let's talk about wells Fargo for a minute. Another, another, another embarrassment. A billion dollar fine on wells Fargo in the guest queen, right? You said a billion and a billion. Here's something I want all of our listeners to think about for a minute is if you're in this conflicted model, which is the wells Fargo, is Merrill Lynch, Goldman's, all of that, where they can suitability is all they have to. They can do whatever they want as long as they have disclosed it and it's quote unquote suitable.
Speaker 3:
29:01
They do not have to put your interests first. That's a shock to begin with, but I want you to just to pay attention to something, advisors from Merrill Lynch, from Morgan Stanley, from Wells Fargo, when they go from brokerage firms, the brokerage firm and I, I'd love to sit in a meeting to hear what they tell their clients, why they move him. Paul money, money, big check. They get paid a, I don't know if it's a forgivable loan. That's forgivable. Loan goes down over a period of years and it just, it's, it's wrong. It shouldn't happen in this profession. It does here. Occasionally though, you see an adviser leave and they go and become an ra, a how much money they get when they do that, Paul? Zero, zero. Actually, it costs them money to invest in their own personal capital to build out some money and you want, so there's give and take there.
Speaker 3:
29:55
You want to make sure they're big enough, they have the resources, right? So that's a good move. You have never, I don't want you to Google this to see if you can give me one example ever. You see brokers when we're to other brokerage firms all the time. You've never seen an Ria. I've never seen it in my 36 years in this business. An Ria go to the brokerage side. No, it does matter. Yeah. If you're a consumer advocate, you're being totally transparent. So I mean, whether you're wells Fargo, if you're there and you're doing business, why with a conflicted company, which to me, they're the antithesis of what Charles Koch stands for. You made a comment the other day, I know you were in New York doing some, uh, media things. You're on Fox with Varney by the way. Congratulations again. And you're on Forbes now is a contributor, so that's great to see.
Speaker 3:
30:42
Forbes, you'll see Carson group in there every a month at a minimum and we have a regular column now. But something you said is you asked one of the reporters who was talking with you, you said, hey, have you ever heard of an independent advisor going to a wirehouse? Yeah. They looked at you like that look on their face. Like, I can't believe I've never thought of that before. No. Well that doesn't tell you what's really happening in the world. If nobody is going that direction, you should know everything then about where the future lies in this. It's, it speaks volumes. Here's I made, by the way, if anybody really wants it, I'll send you my notes from the meeting. If you're a business owner out there, and I think they're, they're actually, um, uh, one of our guests actually took great notes. I was, he was at the end of the table.
Speaker 3:
31:28
I don't know if you saw him, but I'm like, that's so, I mean I, I was so focused on Charles and what, you know, his, uh, president CFO were saying that I didn't want to look down and take anything. So I'm trying to absorb it all and I'm looking at one of my guests and I go, my Gosh, you guys texting the whole time. Well you say it, all of these thoughts for it. So I looked at him too. I thought, what is he doing? So if you, if you're interested, you can also our cars and our car script.com I'd be more than happy to send these to you, but some that I loved is at coke at the Co, by the way, they, they've grown their business 6,000 fold, fold, fold, 6,000 fold. Charles said, we do things as simple as possible, but no simpler.
Speaker 3:
32:08
I mean, not quotes been around for a long time. Um, every stakeholder is an innovator. He says, we don't ask them to do it incrementally better. We say find out a way to do it much better. They spend a ton of time talking culture, culture, culture. We do that here at the Carson Group. Really careful of who we add to. Our culture makes her, it's a creative, but I love the Georgia Pacific story where they run these paper mills 24 hours a day, turning 65 days a week and eight they were getting in and fixing the mill while it was running and people were dying
Speaker 4:
32:40
and they said, this is no longer a policy. We don't care. We don't need to maximize, you know the run. They still did it and they said, hey, if you do it and we catch you, you're going to be fired. Your boss is going to be fired. They had many, they said many dots and it took four years to change that culture. So when people are your year or years and people are actually dying. Yeah, that's, that's wild. I would say Ron, I mean I think I thought about this from a business owner perspective, but a life perspective and how can I apply it to a lot of things. And one of my favorite things is when somebody is giving you advice, ask them if I don't go that way. So this is going apply for financial planning and this could apply for buying a house.
Speaker 4:
33:21
This could apply for anything is ask them if I don't do that, what is the next best alternative? Yes. And I think that's really important. So if you're a farmer, what's my next, should I buy this piece of equipment? Should I go into drone technology? Whatever it is. Okay. If I don't do that, ask the person giving you the advice, what's the next best thing? And I think that what that's going to do is I call it that gives you the gap, Ron, is, is that truly what they're offering the best thing versus any other pathway you can go down. I also would say, um, and it's fascinating to me is don't get stuck in your conventional thinking. And it was, it was fun again, 82 years old, but just equally, um, you know, Steve and Dave who were in the room with them, you know, to have is, you know, great stakeholders.
Speaker 4:
34:06
He has is the realization that this world is changing faster and faster than ever before and you better be adaptive to it. And I think, you know, something we shared is we think world's still evolving with you know, maximum technology but a meaningful human touch that they completely agreed with that. And how has that applying to everybody's business and approach? Yeah, no, I agree. There's a couple of things I want to share them and come back. It's just so rich and like I said, if you're interested, I'll email you the notes from the Charles Koch meeting. We've been talking a lot today about taxes. You've heard a lot about the Trump tax plan, but little, if any attention has been given to how it impacts those who are retired or getting close to retirement, and for some people converting to a Roth Ira right now could save you thousands of dollars and possibly more.
Speaker 4:
34:53
If you're capitalizing on your opportunities with the new tax plan, great. If you're not, now's the time to take a look. Let us prove it to you, how we can potentially do this for you and save you thousands of dollars in taxes. You're hurting me, right? Thousands of dollars in taxes give us a call. Eight eight eight four nine 85 13 that's eight eight eight four nine 85 13 remember, it's not what you make. It's what you keep. A penny saved is worth more than a penny earned because you don't have to pay taxes on the penny saved. Reducing your taxes can and will have a profound impact on what your actual lifestyle is in retirement. Eight eight eight four nine 85 13 that's eight eight eight four nine 85 for 13 for most Americans, it's
Speaker 3:
35:38
an unguided financial surprise and it's taxes on your social security benefits. Coming up next, Paul are going to talk about how you can minimize or potentially eliminate taxes on your social security. I'm Ron Carson with Paul West and you're listening to Walton wisdom.
Speaker 2:
35:52
How could you make your money go further in retirement? Learn how next unwell from wisdom with Barron's hall of Fame Advisor Ron Carson. Is it possible you could pay fewer taxes in retirement and keep this money for yourself? You could learn right here and right now on wealth and wisdom with Barron's hall of Fame Advisor, Ron Carson. You may not realize this, but you have
Speaker 3:
36:15
more control on how many taxes you pay in retirement more so than any other time in your entire life. Welcome back. You're listening to Wathan wisdom. I'm Ron cars off my cohost Paul West, and this is the only place you're going to get, well, maybe not the only, but I think it's one of the few places you're going to get really straightforward objective advice. It's going to hit you between the eyes and make it different and how you live your retirement and how you manage your wealth. Today we're talking about Charles Koch. We're talking about tax efficient strategies. We're talking about the evil empire is out there too and wells Fargo being fine with $1 billion and we're going to, I'm going to finish up here, Paul and Charles Koch, but we're going to come back and talk about taxes on your social security. Also potentially a Roth Ira conversion and whether or not you should consider that.
Speaker 3:
37:03
The last couple of things that were ah Ha's for me as they do no budgeting, the coat companies, which is, you know, think of a size of them because it's just, it's a waste of time. The end of the year, they look at how these business units operating, how do they compare within in the industry? Do we need to make changes and we need to adjust so we need to invest more and they don't do it longterm planning. And we quit doing a longterm plan and a long time ago because man, we really plan out a year and then we look at everything aggressively every 90 days. And Coke said the earth is shifting very quickly beneath people's feet and they don't realize it. And we've said the same thing. If you think there's been a lot of change now, you haven't seen anything yet. I loved the saying, technological change has been a trickle and the avalanches near, we're going to see major changes and change in. He also made the comment people hate change even if they're or they hate change. And uh, oh. And I also liked the comment that credentials don't matter that yell, they don't care where they went to school. And I think I know why he said that is he didn't get into Nebraska to settle for MIT and so that's why he decided, yeah,
Speaker 4:
38:12
I see why it gets frustrated over that. Yeah. So think about change with Ron wouldn't if you have dinner at home, does it? Everybody always sit in the exact same chair. Yes they do. Yeah. I think this is fun. Do this every once in a while. Seriously. Next time you go to for family dinner, change chairs where everybody sits and you have to curious, are you going to be uncomfortable? Here's does the family dynamic change just by who you're sitting to? I don't know if tri at one time I had just, I think it's you want to talk about food. How many people order the same thing because they look at other things but they have a comfort with, I've already had this good experience. I would rather take the good experience. I know on the chance I might have a better experience with something else.
Speaker 4:
38:53
Yeah. Well speaking of food, like when I go to restaurants that have menus that are so deep, I don't like that because then I'm like, okay, which one I just like you quit and you just go right back to your old favorite because you don't even want to deal with having to read through all of our main cheese. Cake factory is a great example of that. About many things they have on their menu. Hey, let's talk about um, the Roth Ira and whether or not you should convert it. And this takes some real planning now because one of the big changes and the Trump tax plan is you could go back and make adjustments. Now you can't want you to do it. It's done, which requires a heck of a lot more planning and the conversion could end up being devastating to you as it relates to the taxes you're going to pay.
Speaker 4:
39:37
So you really got to do some careful planning to pinpoint the smart if this is smart for you to do or how much you should actually do. Yeah. So my analogy I give Ron was before it was like clay, you could keep molding and changing it back and forth. Now it's cement. Once you make the decision, it's done. It's hard. You can't. However, but what we don't want to do, and I think what's happening at the moment is people are so fearful of that they're not making the decision unless they're talking with a good certified financial planner who can help them. It's still a wonderful technique. How many times, you know, here's a question for you Paul, cause you're dealing with a lot more retail clients today. How many people do the analysis and what percentage of clients does it make sense to do the Roth conversions?
Speaker 4:
40:23
Uh, so I don't know if I can give an exact percentage drawn, but I would say for the people that qualify and the people that make sense, um, it's the majority because that's what I thought. That's what I thought. If you're not doing it, you should be especially 18 you know how maybe their best option for now, again, there's the, you know, use it or lose it type thing that happens once it's gone. It's gone for you here in terms of you can't change back anymore like in the past. But it is a wonderful technique. And remember too, by the way, people forget this, but let's keep ms make the complex simple for everyone. You do not, you do not have to take an RMD from a Roth. So what's a pain point? Paying taxes. So if it's better for you, another world or another photo, right?
Speaker 4:
41:07
Paul? Yeah, so at least at minimum do the analysis and if the analysis says, nope, bad decision, okay, great. But if not, then you may be going down a pathway that makes the decision really easy for you. I was sitting at a breakfast here about a year ago and I'm listening to two advisers talk about this topic. And one advisor said, well, how many of your clients do conversions? He said, you know, I said, I hate to say it. Not only is a lot of work to figure out, but literally if I tell them to convert, they're having to pull assets out to pay the taxes. Wow. That's like, okay there you're not putting the client's best interest and working backwards. You know? It's like even if you're an Ria, there's conflicts out there. Giving good advice means you have less assets and that's how they're actually getting paid.
Speaker 4:
41:49
So now that's, that's bad. Having careful. Yeah. So Ross port and I would, I'll say social security benefits. Ron are really important and so people don't realize it, especially quick numbers. I'll share it with everyone here because I think people listen to their neighbors or their brother-in-law's on what's the right. Social Security said it happens all the time. We actually just recently helped a family that filed and they were able to rescind their application and this is going to save them a lot of money and I'm so thankful they called because we are help save them thousands of dollars to make a major change. But there's really what two main ways either file taxes single or you file jointly. I mean third way was that not at all. Not at all. Yeah. You can go down that route. So, uh, if you do, don't tell me about it.
Speaker 4:
42:32
So if you're single it up to $25,000 of income, your social security benefits, you don't have to pay any taxes. Yeah. Yup. Same Way. If you're, if you're filing jointly, it's up to 32. But when you get into your single from 25,030 4,000 of income or your joint 30 2040 4050% of your benefits now become taxable. But once you're over 34,000 as a single filer or 44,000 is a joint, 85% of your benefits are now taxable. 85 so don't think, and by the way, 34,040 4,000 isn't a lot of money especially is, you know the world changes and inflation increases and those things happen. So you, this one of the biggest tax traps we see people make, the second is related income. So I'm going to use the other scary word for people sometimes is the word Medicare. Cause it can be confusing. It's as scary.
Speaker 4:
43:27
Well people, it's scary because they don't understand it. So what do they do? They defer to the the simplest option for them, which is what their friends do or other things. But actually Ron, I mean your income can greatly affect your medicare part B premium and taxes and your approach there. So you have to be conscientious of tax decisions you make because that can actually increase your monthly spend for your part B premium. Hey, if you're listening in a regular listener first time even and you like to show we are going to be having a lunch and we'd like to accumulate a few people that are willing to come out and sit with Paul and I and discuss the show and how we can make it better. Send me an email, our Carson and Carson group.com or call eight eight eight four nine 85 13 also, if you like what we've talked about, there's a lot of different ways and advice we can give whether you do business with Carson group or you take it somewhere else, we will add value. We have this five point analysis and what you'll learn is precise time of when you should take your benefits and social security, how you should coordinate with husband or your wife.
Speaker 3:
44:33
Also, how the decision would impact you talked about it, Paul Medicare premiums, how to minimize the taxes on the social security benefits and possibly you may be eligible for other benefits you didn't even know existed. And this is always a huge wind. Always nice to find something that you didn't know you were entitled to. Give us a call to see if we can help you. Our five point analysis, eight eight eight four nine 85 13 don't leave thousands of dollars and paid the taxes on social security benefits. It's your money. Take control. Eight eight 84985138884 nine 85 13 I'm Ron Carson with Paul West and you're listening to often wisdom,
Speaker 2:
45:15
risk, social security, income taxes, estate planning. Every week we talk about how to make your money go further in retirement right here on wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson.
Speaker 1:
45:29
Okay, good. Here's the legal Mumbo jumbo. The opinions voiced and wealth from wisdom with Rod Carson or for general information only, and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged, I mean not be invested into directly investing involves risk, including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through CW m LLC, an SEC registered investment advisor.