Wealth from Wisdom

Avoiding High Tax-Fees

February 10, 2018
Wealth from Wisdom
Avoiding High Tax-Fees
Chapters
Wealth from Wisdom
Avoiding High Tax-Fees
Feb 10, 2018
Carson Wealth
Show Notes Transcript

Many Americans use the tax laws to their benefit, and can legally get away with avoiding high tax fees. Learn how you can do the same.

Speaker 1:
0:00
Okay. And here's the legal Mumbo jumbo, the opinions voiced and welfare 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 and may 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
Speaker 2:
0:31
Morgan 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 ball game. It's loaded with challenges, obstacles, and trap doors that you can do this and we can be your guide. Welcome to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson, and straightforward and objective advice and how you could make your money go further in retirement. And now here's your host, Ron Carson. How do the wealthy manage their taxes?
Speaker 3:
1:14
They meet with their CPA at the end of the year and learn what they owe or do they essentially game the system, use the tax laws to their advantage to pay fewer taxes? Of course, you know the answer, they work at it throughout the year. You're listening to wealth and wisdom. I'm Ron Carson with my cohost Paul West, and thank you for joining us today. Many Americans, wealthiest individuals use the tax laws to their benefit and they do legally get away with paying a small fraction of probably what you would deem to be their fair share. But again, is it if they're following all the rules, regulations, I'm being able to do that. And in some cases though, what's really unfortunate is there perceived to be for the wealthy, but it's actually for the middle class. It's just you don't take time in the middle class listening out there to have a continuous game plan throughout the year and be Taxware and tax fee conscious of what's going on.
Speaker 3:
2:12
So don't get mad about it. Fight back, get smart, take advantage of loopholes and benefits because they're really not just favorite for the rich, regardless of what the media says, they will benefit you as well. You're just not taking advantage of them. And it's really because you're not being proactive and you're not thinking about it. And by the way, the tax game, they're not grand slams yelled, they're singles and doubles, but they add up to make a substantial difference in where you're going to end up. So probably many Americans as we speak, for 2017 when you start paying your tax bill this year, you threw away a lot of money, thousands of dollars that you could have kept for yourself. And now we have even more opportunities because there was another round of changes you've probably heard about too. It's called the Trump tax plan and you simply just can't afford to ignore it. So today Paul and I are going to talk about some things that you can do, but more importantly, because taxes are such an individual thing is you need to evaluate where you're at and start doing it. Now here we are, the beginning of 2018 I mean it's a process, Paul.
Speaker 4:
3:22
Yeah, it is. And everyone is saying, Hey, I'm going to get started right away and I'm sure many of you have even even filed for here. You're 2017 taxes. But Ron, I was doing some research and prepping for today's show and in 2016 how much money do you think was spent on tax software, tax prep, fees, supplies and other tax filing and expenses? It's, it's a, it's a lot. Yeah, a lot of billions of deal. Yes. 29.6 billion was spent in 2016 and I'll think about it even just even no sense. No, there might have been a few cents there, but we don't need to drag that out. Multiple spots here. But think about this new tax cuts and jobs act with all those changes. I mean the estimate has to be way above 30 billion now because of the complications. And here's what I think's happening. And I actually ran into someone the other day and I think they're going to twist their ankle here is they said, hey, it's February 1st I went online and just started typing in all my information for the tax information.
Speaker 4:
4:19
So what are they doing? They were more worried about getting done as fast as they could then making any changes or adjustments or actually applying learning and that's what we're going to do on the show today, Ron, is let's help you figure out what changes you need to make so you don't make a mistake because people always fall down the same track where you are creatures of habit, right? When we've talked about it, when we go to restaurants, there's a lot of us, the way of our favorite restaurants, what do we do? Order the same food. You order the same dish and that's okay, we like it, but what makes us feel good? But what if they changed one of the main ingredients in the dish from chicken to beef and you didn't want that or they put way less dressing on it and it's not nearly as good? Well that could have happened now with your taxes and you better before you order and go through the same process. Figure out what these changes mean to you because you may not like this core meat entree for
Speaker 3:
5:08
yourself and Paul, we see this a lot. Someone will come in and we'll look at back on because lots of times we went the last three years tax returns and we're like, why on earth did you do this or didn't you do that? And they're like, well, could we really have done that or why didn't someone tell us about it? And by the way, I'm not beating up on the CPAS. They are. It's, it's really, it's a two way street. I mean, they're super busy and you've got to say, let's do some tax planning. And by the way, they're going to charge you for it. I mean, you're taking additional time. It's not just doing the return, but if you can save a few cents, the equivalent of a few cents for dollars, you're going to trade pennies for dollars every day. And that's really what tax planning's all about. Paula's going to the very first one.
Speaker 3:
5:48
I think a lot of people miss this and this is tax diversification. Not Now we're talking about, we're not talking about asset allocation. We do recommend that, but this is really investment diversification. We're talking about tax the way different things are actually uh, tax within your account. So you think about the different categories you have tax always. These would be your brokerage accounts, checking accounts, savings accounts, you pay taxes on dividends, interest capital gains. It just happens because there's no tax for technician inside of the account. Then there's a taxed later, which is a 401k, the traditional IRA, four o three B and really things you can sell later, like real estate and hard assets. And then you have the taxed. Rarely. When I say rarely, you would think always in these categories like a Roth Ira interest from municipal bonds and certain types of life insurance rarely are the tax unless you really screw up. There are some ways you can take tax, uh, preferred are tax free and tournament a taxable and, but you don't
Speaker 4:
6:56
want to get the word never there. You didn't say tax? Never. You said rarely.
Speaker 3:
7:00
Rarely. You know, a great example of that is people holding middle school bonds are tax free bonds like in an IRA account. It makes no sense whatsoever. I've actually seen it.
Speaker 4:
7:10
Yeah, it's, it's silly in this, the thing is is you don't get any do overs with taxes. I mean, once you have a taxable event take place, you got to pay it no matter what. And I think that's important. And Ron, what you're talking about is what we'd like to call sequencing is how do you sequence all of your different tax diverse accounts? So your investments, many of you are listening have annuities. So when should you start a new city? Um, or how long do you keep before you make decisions there? Here's all security, right? I still can't believe, and even though we've harped on the show so many times, that people don't understand that your social security income can be taxed based on the amount of money you make. 85% and it just, every time I tell someone that they look at me like I have a third eye.
Speaker 4:
7:56
And it's, it's something that we harp on, but you gotta be aware. Pensions, people don't realize that you have pensions and many people, you know, throughout Omaha and Nebraska have pensions and taxes are going to come along with the income you have there. So you have to figure out how you, how you have the right diversification. And there's, there's no perfect answer here, uh, for how you approach it. Is it 75, 25 or what is it? You got to play the cards you're dealt and you, you've been dealt cards but there's always the right order. I know you love playing cards, Ron. I do too. Growing up with my family here in Nebraska, we played cards all the time. I mean just pitch and bridge and you name it. What do you like to play? [inaudible] we play you curves, fades, hearts pitch, all of it. All of them. But you always have to figure out what order you want to play the cards I have. And that's the same thing is so how many cards we get in UK or is it, I can't remember. Four or five. Five. Five. Okay. So you get the way, by the way, I want to just point out Aaron Rogers and I, Andrew's are here and, and I didn't know you were
Speaker 3:
8:56
a player. That's funny. See it's Superbowl. It is Superbowl's on my mind. Um, he and I come back for Orlando. We're down at the TD national conference. Him and I as a team are absolutely undefeated. I mean we killed Aaron Shaven and Greg Open, it's Erin's or executive VP, Greg Office one, our senior coaches. And on the previous trip the week before it was me and opioids. So I'm, I'm eight and oh now against Aaron. So we next time you see him, ask him how much money he's lost to me playing Ukraine, you know, he doesn't know not to just go double or nothing. Every time you go double or nothing, even on a lot of money and it's painful. It is a time he's not playing it. He's not played his cards well there. But a lot of you listening today, you go into retirement earlier and we talked about this a couple of weeks on the show is on average you retire three years earlier than expected because life happens and your card that you thought was your ace in the hole isn't anymore.
Speaker 3:
9:55
And you've got to figure out how are you going to keep living your lifetime with now you're paying taxes sooner than you thought about which could now hit you double. So going double or nothing. Iran is now, you're getting taxed on social security and you weren't expecting for that to happen so soon. So you need to sit down with professionals, your CPAS, your financial planners. And by the way, because of this new tax cuts and jobs act, I actually think CPAS are the new rock stars helping everyone out with their personal situation because it is so complicated and we're already seeing it. Ron and our listeners are already telling us and when they've called in is they're just going the same old thing. There's filing their taxes and not worrying about it and it's just, it's painful to watch because there are tactics and I think we'll share many of them with you here today that will really help you out or at least more importantly make you feel of avoiding that fear of missing out on not taking advantage of a tax opportunity that presents itself and it's fun to see even today here we are, you know the the our Carson group, it's just been a hotbed of tax activity with our tax group working with clients and I've heard it a lot.
Speaker 3:
11:01
Our clients are like man, the planning we did and we do. It's such a difference having a planning but our tax group works all the time. I mean they're in here on weekends, evenings or early. A lot of people think, well that's just during tax season. That's really, really all the time. I want to go back cause I love your, you come up with so many good analogies. You know the one on driving over the speed limit versus risk. I use that all the time. Fall. That was absolutely years. I don't know if you got it from somebody else, but the cards you're talking about the ace in the hole. Let's talk about this. A good card player literally can have a huge advantage. I'm going to come back and talk about how we're going to relate that to investments. Uh, and taxes just in a minute.
Speaker 3:
11:40
This next segment, matter of fact, but there's a lot that we can actually learn from that. And if you want just to sit down and have a listening and a strategy session, even if you decide not to work with us, we're more than happy 100% to be to do that. Remember, it's not what you make. It's what you keep and the more you have more control in retirement than you're ever going to have over the amount of taxes that you're going to pay and how you structure your investments will have a huge impact on how much you pay. Uncle Sam, so you get the side, you've got to keep it for you and your family. Are you going to give it to Uncle Sam? Most people feel they worked way too hard not to take an active role and really making sure they pay as little tax as they possibly can. We can show you how there's no obligation to work with the Carson Group. If we show value, we'd love to have that opportunity, but at least let us sit down and show you what kind of things you may be missing. Give us a call. (888) 419-8513 that's eight eight eight four nine 85 13 you can learn literally how you can save thousands of dollars in taxes and possibly more. (888) 419-8513 I'm Ron Carson with Paul West and you're listening to
Speaker 2:
12:51
he seemed good times and bad times and he's got the gray hair to prove it. You're listening to wealth from wisdom with Barron's. Hello, same advisor, Rod Carson. Is it possible you could pick fewer taxes in retirement and keep this money for yourself? You could learn right here and right now on wealth and wisdom with Baron, Taller Boom Advisor Ron Carson,
Speaker 3:
13:12
America's wealthiest individuals use the tax laws to their advantage and don't blame him for this because you have the same opportunity to do it for yourself. The difference is because they have some additional resources, they have people on their team that are being proactive. You can no longer afford not to legally get away with paying what is not absolutely required and pay as little as legally possible. If you're in the middle class, you have all kinds of opportunities that you're leaving on the table. We see it all the time here at the Carson Group. Welcome back. I'm Ron Carson with my cohost Paul West, and you're listening to wealth and wisdom so often, Paul, we hear about people getting upset or mad because of all the benefits of the rich and it's really has nothing to do with that has more to do with do you have a team assembled?
Speaker 3:
13:59
It's really helping you take advantage of all of these opportunities and some of them, they call them loopholes. It's just interpreting and doing what's legally allowed to pay as little tax as you possibly can. I want to come back to the, we love to play cards. We play all kinds of cards at our house and our favorite game, uh, is either Uco, Reebok, euchre and especially in Buck euchre because you're playing your own hand. You're not relying on a partner. The way the sequence of the cards you take, I can play about anybody. If anybody has a great buck, you occur out there. I'm, I'm laying down the gauntlet right now. I will win 80% of the time because of the hands of regardless of of of the game, the game. I take that back cause and over time, 80% you'd say, well it's not the, it's not the benefit of the card.
Speaker 3:
14:49
It's a sequence in which I play the cards based on other cards that are coming out. Right. No difference with then it's so many things in life. It's like there are right ways and wrong ways and just by how you think about it and how you play it and let's think about tax diversification here. It makes the difference between winning half the time or winning 80% of the time. Yeah. Well, a great example of this is, I know people don't like debt, Ron. I mean that's something that for many people out there, it's, it's painful. They don't like money going out. They don't like paying interest. But in many situations, if you forgo saving money for your retirement and using that tax deferral for your benefit to help the sequencing later in life, I know you don't want to pay that 3% or 4% or whatever interest rate you're paying on your home or a car loan or you needed a home equity loan.
Speaker 3:
15:40
But it may be the best thing for you to have that debt because of the tax benefits you're going to get on. Keep putting money into your four o one k plan or any other type of investment. And that's, that's the sequencing we're talking about. Don't think, oh, I'm gonna take every cash piece I have and pay off debt when that actually may not be the best decision for you. And here's two to about it. And this way too. I see this a lot. It's like someone has a lot of deductions for a particular year and they're, you know, they're over 59 and a half. They could take a lot. In some cases they could say, you know, they'll call it that sweet spot. They could take a lot of income out of their qualified plans and keep it under. You'll do the do the math and say, how much can I take out and stay in the lowest tax bracket because of all these deductions I happen to have in this particular year.
Speaker 3:
16:24
That way you've removed it at the lowest tax rate possible. Or vice versa. Let's say you're, you know, you're 50, nine and a half or older. You normally take a distribution every December and all of a sudden, wow, you had a windfall this year. Don't take it out. Or You have a situation where you sold something, you're going to get some payments and you need some additional income spend down, uh, uh, unqualified account one is already a tax had been paid to zero. Don't worry about spending account to zero. Think about your overall portfolio. So there's a lot of different tools out there that you can use to keep yourself in the first bracket so you're not going to have dollars tax at the higher bracket. Yeah, well I think a lot of people also run get inheritances from their families. And what do they immediately do?
Speaker 3:
17:13
Most people go to pay down debt with it because they think, hey, my loved ones want to pass along. And I'm not saying you have to invest it either, but you've got to look at what's the right situation family. Cause when people pay down the debt, so then they were used to, so now they freed up, let's call it several thousand dollars worth of monthly living expenses. They don't reinvest that back and often just starts going into other categories of lifestyle and entertainment. And if they stop what they're going to pay off all the debt, then think about that dollar amount that was going to pay your house, your car, whatever other type of loan you have. And what are you doing with that money now to help make sure you got the right sequencing of every investment vehicle possible for yourself there. Yeah, I agree. I uh, how often to Paul, I mean it's a little off topic of the show today, but you hear people say, well, I don't want to waste money on rent.
Speaker 3:
18:02
And, and I agree, I like people owning real estate, but it's, you're not really wasting it. You got to sit there and look at, you know, what is the alternative you can be doing with that or debt. I hate wasting money on debt. Well, let's see what, what else you could be doing if that collegiate earn a higher return plus the interest rate may in fact be tax deductible. So you can never make just a general statements like that because it's an, it's an individual situation that's going to really drive what's best for you and don't take generalizations and then apply them to yourself. Hey, speaking of generalizations, so let's talk about some of these changes to the tax cut and job background. And one of them is so under the old law, so right up until December of last year on average, 46 million people, yes, 46 million of you itemized.
Speaker 3:
18:49
What are they expecting here for 2018 about half that actually a little less than half, about 20 million of you will now itemize. That's a big change. So don't let what you knew in the past going to happen here or feel like you're going to make the same thing happen in the future. One out of two of you are no longer going to itemize and there's many reasons why um, interest rate deductions. But the big one, Ron is, is the overall standard deduction. I mean, it essentially doubled. So it's a big deal now where a lot of you are no longer going to be able to itemize anymore and you're going to have to look at the consequences of that and what's happening. I mean, we're now up to $12,000 for individual, $24,000 for married couples, and you're going to need to look at your individual situation. And, uh, the technique we're seeing used, and it's not right for everyone.
Speaker 3:
19:36
So don't make this assumption. Huge, huge mistake. If somebody was saying, well, you know what, I'm going to throw everything into year one and itemize everything here in 18 and then in 19, I'm not going to do any of those things. And then a 20, I'm going to do it again. So I'm going to double up every two years to make those things happen. Hey, by the way, that could work for you. And that used to be a real popular strategy that worked. Yes. But it may not be the best decision for you because who knows what's gonna change on all of those things related to it. So you also have to have a strategy for withdrawing money from these qualified accounts. And because getting the money out, you know, we get it in there is truly a different story. And we were talking about that, Paul, you have to think about when you actually take it out and you do have to start taking it out. By the way, the April following the year, you're 70 70 and a half. You're legally required. However, the way you take it, there's a lot of different calculations that you can make to game it down or game it up depending upon what your tax situation is. So don't think you just have to start taking it out. And we always recommend do a recalculation every year because that gives you the minimum amount you have to take. But you can always take more if need to withdraw more.
Speaker 4:
20:48
Yeah, Ron, so I'm going to add something. So this just happened on Friday. So it was explaining this concept, and I know we've said on the radio many times with people, you know, you're driving down the road, you're not listening. I can't stress enough your 401k, you're a four o three B, Your Ira will be taxed at age 70 and a half and it's going to cost situation. So this, uh, individual on Friday, I showed them that this is going to change their tax bracket from the new 22% and it's going to allow up to the 24, you know, and they look to be around. They said, well that's highway robbery. He said, well, it's not robbery, but the government wants to get some money back at some point in time. And that's why they're doing it. So we can't keep transferring this tax liability, but it just raised your taxes. So we actually looked at him and said, stop pulling money out of this account because it's going to help keep you below that bracket. And a lot of people don't think that way.
Speaker 3:
21:39
Reminds me, that's funny that they said that. Highway highway robbery, robbery. It's like Roy Rogers, right? Thank God we don't get a hold of government pay for. And another favorite of mine is years ago there was a little cartoon and the guy's being audited and he's sitting at his desk and he has IRS in the background and he's IRS agent showing him what his tax bill is and the gentleman goes, that's just a little more than we're willing to pay. Like it was negotiable and like you have a choice there. So let's also talk about the estate tax. I mean gone right? Eliminated. So if you set up these life insurance policies second to die to pay the tax, should you get rid of them? Probably not. And the reason I say that is how long is this going to be? I mean unfortunately this is one area that people continue to tax and I think they're going to come back to, if you really know that you're going to pass during the Trump administration, but I'll guarantee you someone's going to reverse as Paul and you don't know, are you going to be able to go back and get yo these life shirts, trust, make a ton of sense on the leverage of travel to have I keep them in.
Speaker 4:
22:48
That's a great way. Great, great way to transfer money. Ron. I don't think you make any adjustments. And so the, I mean this thing sunsets in a and a 20, 25 so we're going to be in 2026. Uh, and who knows what's going to happen. So I mean, it's nice now that for individual to, it's moved up to 11.2 for married couples, 22.4 most people are saying, hey, that's not me. That's not going to impact me. But what happens if they, you know, go back and actually sunset this? Well, all they're going to do is from current rates, bring it forward for, I believe just adjustments for inflation is what they're using. I'm not sure what even percentage, I've got to look that up.
Speaker 3:
23:27
And Ron, I mean, just look at history. Paul, how many years have we had zero tax estate tax and my life has been one year. Yeah, it was a year that it, you know, he had the one year and it was called throw the mama off the train legislation because I mean they attorneys are like, if you've got someone who's sick, you know it's, boy, it's going to be expensive. Have them die in January versus December. I mean, it sounds awful to say that, but there was a lot of people, I even know that they said, you know, they were sick. They, they, they wanted to die because they weren't going to live much longer anyways. Oh, I hate even saying that. But that's all it is. If it's only been one year. Yeah. Well, the most famous person actually that Iran was George Steinbrenner who passed away as they talk about that he didn't actually have to pay tax there.
Speaker 3:
24:09
Well, eight, let's just, for those who are out there that have an IRA or 401k, you've got money in that. He didn't say a 500,000 you understand? It's really not $500,000 because you still have to pay taxes on all of that money and many people will pay a lot more than they need to because they haven't done any planning. A lot of the things Paul and I are talking about today, you can and should legally pay less. Yes, legally pay less. It's a simple conversation. We're more than willing to have it with us whether you work with the Carson group or not. We want to add value. We believe in the law of abundance that will come back to us, uh, in one form or another. Give us a call on this initial analysis will show you what you can do. Eight (884) 900-8513 that's (888) 419-8513 it's your choice. Pay The IRS or Kate more of this money for yourself. 88849851388 (841) 900-8513 are you needlessly paying the IRS way more than you should every year? The answer is probably yes and Paul and I are going to continue to talk about solutions. I'm Ron Carson with my cohost Paul West, and you're listening to wealth from wisdom.
Speaker 2:
25:22
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, 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. How do the one
Speaker 3:
25:42
wealthy get away with paying far less tax and everyone else and what do they know that you don't and are these strategies available to you but you just don't know about it? You're listening to wealth and wisdom. I'm Ron Carson and thanks for joining us today. The answer's yes, yes and yes. They are available to you. They do have resources to figure it out and you should too. Paul live and talking about all these tax strategies and Andrew just point out the fact that hey, it's already starting to show up and my check that I get twice a month. He said his check went up $7,200 here in the last two, uh, two weeks. Just from the difference of the taxes. He might've said 72, but it sounds better to say 70 to $200. He's smiling. He's like, did I get a raise? Yeah. Um, but it's, it's, it's, I mean this is good. And what, you know, the markets of all of a sudden had some volatility on them. Fundamentals are fantastic. People are feeling good, companies are feeling good. Don't confuse the fact that, you know, the market has had a big run here. It's normal for it to correct. You know, take a look out. Interest are moving up.
Speaker 4:
26:44
Last week I shared the 1982 versus 18. We're still have a lot of positive things going here. And um, and Paul, there's a lot in this tax package. I mean, the other one is that for pass through the top rate for passthrough business income, you know, that's a big drop and that's a, that's going to really flow through to the bottom line. A lot of business owners are going to be investing more than the otherwise. What if, yeah. And it's, they need to sit down and talk about their individual situation wrong cause they're all reaching complex decisions. How much did they pass through to all of what we call stakeholders? Many people call employees. What do they retain? How do they reinvest it? Should they get more jobs or produce more jobs or build a new building? So there's a lot of fun choices they have and there are a lot better than the opposite direction run when they get to make tough choices related to personnel are not taking on new projects that aren't, uh, a benefit to them.
Speaker 4:
27:40
And I think another change to the tax bill that we need to bring up is related to charitable contributions, Ron and, and, uh, uh, you know, we're, we're in the middle of a husker country here. So of course our beloved huskers, we all love. And one of the benefits that's going away, and I want to make sure all of our listeners do you, and I'm sure we have a lot of seasoned ticket listeners here today. Um, or I've attended many games, so use to be able, there's the seat fee, right? You have the cost of your tickets for the seat fee and it used to be able to deduct 80% of that donation. You were making the university for the seat fee and that's poof gone. It's no longer available. So that's a big deal. And you may be saying Ho w what's Paul saying?
Speaker 4:
28:20
What are you talking about there? Well, the reality is, I mean there's great articles and the Lincoln Journal Star and other publications about this, and if you haven't paid attention, the impact is going to hit you on your 2018 taxes is, is that you no longer get that 80% deduction that you could have in the past for that per seat fee. You're contributing to the university every single year. So something to watch out for. You're not saying get rid of the tickets. I think we're all very excited about Scott Frost this year and what's going to happen, give more in need it we need to get back to and our players, but relevancy, right? So also Paul, you can now create, it may make sense to create a corporation to shelter, shelter, investment, income. You'll forever see corporations that make sense cause you have the double taxation, you had higher taxation. That's all been changed with the TAC saw also you may, you can pay for private school tuition through your five 29 plan, which is different than the way it was.
Speaker 4:
29:15
So there's another benefit that you need to take advantage of. It's actually been a gifting technique. We've seen Ron, so a lot of families have put aside money for a college education, but grandparents have asked, hey, is there something I can do to help? Well now if you have private education in elementary and secondary, you've got the ability to help pay for that. Now there is a limit. There's two. There's two concerns here. One is are two items. I want to make sure people understand, right? Devil is always in the details, right? One is there's a $10,000 limit on what you can withdraw for the private, but to make sure your state has approved this, not all states have approved this. It's still hasn't been approved here in Nebraska. So there's some things that they're working through, but it's not there yet. So think about their withdrawals and it's tax benefit to you. So make sure you understand all of that. Ask your CPA financial planner, they're going to know that off the top of the head. And if they don't, you don't need to do, I'm going to start looking for somebody else's ahead of the game here
Speaker 3:
30:16
and the sake planning, you know, go back and relook at all these state planning documents you did, especially in light of where we're at today. Does that still make sense? And also, Paul, this is always made sense to tax alpha. You know, just being able to harvest even with the lower tax rate, you want to make sure that you're being as tax efficient as you can throughout the year. And that can add literally up to another 2% a year to your returns. Just by being conscious of that. Um, minimizing taxes on social security. We've covered that a lot on here and it's just, I'm still amazed at how little planning really goes into social security maximization. The difference the Delta between the best and the worst case on social security for get the taxes just on what you can get can be several hundred thousand dollars. For many of you it's going to be the single largest asset or decision.
Speaker 3:
31:04
You make it. You go in and tip the Social Security Administration doesn't give good advice, they don't know what they're talking about yet. You get a little bit of time, you make a decision and odds are because there's thousands of different variations and possibilities are way to quote unquote game the system and then you've got to combine that with a tax planning strategy. And if this all sounds complicated, it's not needed. We want to make the complex simple, but there's a lot of moving parts there that someone's got to be thinking about and be and be really conscious of. The fact is we deal a lot with this stuff here at the cars and group and so it's second nature to us and good chance we can add value and save you some money when it comes to either maximize and social security are thinking about the sequencing for taxes.
Speaker 4:
31:48
Yeah. Something Interesting Ron. I mean we were just helping a family with this the other day actually. So if you log on to ssa.gov and you can set up your account viewer thing. So not only can you get your current statement that tells you your projections, but it also, Ron will give you your earnings history and what you've actually contributed. So it's actually a nice exercise to walk through to see that to make sure, by the way, just double check that everything you've contributed over your life. How many of us, you know, we've just blindly assumed that everything we've done has flown directly through their in it. And you know, we haven't seen a lot of mistakes over our financial planning, but there have been some. So go check to make sure that actually you did get credit for everything you've done because no one wants to miss out. And I mean we get asked this question probably every time we talk about social security is is it going to be there in 2032 and beyond. And I think we're both on the same belief system here. Ron Is, is no political people in office at that point in time. It will be the ones that didn't pay people their social security money they were due for contributing that much in the way I think it would be very political
Speaker 3:
32:50
challenging for many of them. I've always, I used to be in that camp than it may not be there, but as I've gotten older and look at what politicians do and how the world really operates and you look at Europe and yeah it's going to be there. I mean you know who knows how much of it effectively you're going to get. Cause I never thought they would tax social security and they're taxing social security today. But Paul, you got a question for you. If you ever ordered a went on and looked at your report. I have, yes. Yeah, isn't it? Isn't it interesting just to go back and look at the very first year? Yeah. It's a little scary to go in and what that progression actually looks.
Speaker 4:
33:24
It's actually right. That's a great exercise. It's a walk down memory lane, a little bit of your life, but they'd also then is important part is like, hey, I worked so hard to get here. Why wouldn't I spend whether a few minutes or a few hours making the right decision. You think about not just the hours and the weeks and the months and then the years it took you to earn all of that, but then just to go say, Hey, I'm gonna go spend 30 minutes cross off on my list to go on the whole security office and make a decision when it took you a lifetime of work to get to there. That's crazy to me. Spend that extra few hours, make the right decision, work with a professional. You're going to feel so much better. Don't make a mistake. I know we harp on this, but it's our listeners. You got to understand we've seen too many people screw this up and it's one of the things we want to do is help all of you and take our advice to get better here and not make the mistakes so many candidly probably of your peers and friends and probably your family have made it
Speaker 3:
34:18
and have you hit and also think of it as part of your overall allocation thinking of as part of your fixed income, part of your portfolio because it does play into what else you should own in the portfolio, but 85% it's a big number and that is according to the IRS. When you claim your social security benefits, you could get tax as much as 85% and this is money you were counting on a lot of people not knowing that they don't get to keep all of it. There are ways you can dramatically reduce this tax bill and you get to keep the money. We will give you a customized social security analysis. There's absolutely no cost, no obligation, so you have absolutely nothing to lose. Here's what you're going to learn precisely how and when to claim your social security benefits. Some strategies to minimize the taxes on those benefits.
Speaker 3:
35:05
Plus, if you're eligible for additional benefits, it could mean thousands of dollars in your pocket every single year. Give us a call for your customized analysis at eight eight eight four nine 85 13 don't leave thousands of dollars in social security benefits on the table. Eight eight eight 41985138884 nine 85 13 coming up next and often looked strategy or overlooked strategy that can help you save thousands of dollars and this is a big one, especially if you've been thinking about Roth. We're going to talk about re categorization. This is something you can do. It's going away in 18 it's a big deal. I'm Ron Carson with my cohost Paul West, and you're listening to wealth than wisdom.
Speaker 2:
35:48
Trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth from wisdom with baron. Taller fame advisor, Ron Carson. He's a published author. Andy has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to wealth from wisdom with Barron's hall of Famer Divisor Ron Carson. Could you be using the same tax route? Yeah.
Speaker 3:
36:15
Jeez. Loopholes used by the wealthy that can help you save thousands of dollars in taxes and the answer's yes and absolutely. Yes, you could. Welcome back. I'm Ron Carson with my cohost Paul West, and on our final segment we're going to continue to talk about the fact that the wealthy and you have the same benefits, the same quote unquote loopholes, but the difference is I meet with their CPA throughout the year and have a game plan. They don't wait and record history when it's too late. Like lot of you're doing right now as you're getting prepared to pay what you owe in 17 you can do nothing about 2017 now. So the time to start this planning is today and Paul, this next one is huge. It is Roth IRA conversions. Now, what you may not know is in the past, if you've done a conversion and then something changes in your life, you can undo it and then Redo it again or undo it and leave it on done.
Speaker 3:
37:15
Why would this make sense? Well, first of all, we've had tax rates go down. So let's just say the investments are the same value as you went in. You're probably gonna want to re undo, undo it, re categorize it, right? Um, also, what if you had something that actually, what if you had a bitcoin in there? You know, something that's volatile. I don't think you could hold it in there, but it looks at decline. Something that you know, decline. You're sure for sure going to want to do it. If you've done the conversion and you've had appreciation, you're probably not going to want to do it. Um, but it does make sense to take a look at this. And by the way, one of the negatives about the Trump tax plan, law, whatever, is you can't do that in 2018 anymore. So those will be the last year. You can use this to gain. But here's what's beautiful. You can sit back and watch the entire year basically because you have up until October 15th of 18 to make that decision. So you get the benefit of most of the year to see what actually happens both with your own tax situation and what happens inside your investment account.
Speaker 4:
38:24
Yeah, I mean, so Ron think about it is not only your individual investments, but what if 2018 doesn't turn out to be the market here, that 2017, um, January it was a great start to the year. February is not, you know, flying off to good start so far. So uh, w we can be a completely different economic environment six months for now. And the flexibility you have is great and I think this is great on two ends is one, if you made that conversion last year, you've got the opportunity to have that look back and it's a free look. There's, that's beautiful. You can actually do those things. By the way with the IRS, you don't have a look back. Once you, once you have something that there's no such thing as that do over, you're going to pay taxes or not. This was really one of the last ways for you to approach that.
Speaker 4:
39:10
So talk with your CPA professional talk with your financial planner because this is some area you don't want to run away from and make a mistake and run. This made me think about a little bit, you know, different topic, but a couple of weeks ago we were talking about the market and where is it going to go and do a forecast event. And this, this is so fascinating to me. So we had a lot of people attended. We had our chief investment officer, Scott Kirby, telling his thoughts on what's going to happen, where we saw some opportunities but won't forget, there's some people that wanted to learn more. So they called up and we're guests and we allowed them to come to the event and they wanted to learn so much. So one vigil was speaking with me and he said, hey, hold on a second. I need to step out in the hallway and take a call and never came back.
Speaker 4:
39:58
And it was an interesting to me, Ron and I realized that something wasn't wrong cause I found out from someone else that was here. It wasn't wrong or it wasn't right. It wasn't right. What happened was he left because he knew he wasn't doing the right things. And what happens with most of us were conflict avoiders so he ran away because he was afraid he's, and I'm sure today, so now two weeks later, he hasn't made adjustments to his portfolio and is now wondering and keep second guessing himself. We've all been that thing in our life we've done. That's been scary. But once you complete it, you feel so much better. Whether it's um, uh, you know, skydiving would be just an example of people have a fear of going up to a tall building, public speaking, Ron. That is something that many people are afraid of. Talking about your portfolio. We shared the story the other day. Someone came in here and they said they feel so good because they actually felt more fear talking with a financial planner for the first time. Then they did have in going to a doctor and I it, that was fascinating to me emotionally about people because money is scary and your, if you don't know what to do, you tend to avoid things like that.
Speaker 3:
41:09
I take for granted that and I for for that how easy it should be, Paul, the people say it is, I just got a new Peloton bike and I was talking to someone about it and they go, you know what, I just, it intimidates me and I'm like, I can relate to that because at first I got a Peloton and you're on and there's all these people around the world you can do classes with. And I was like, Gosh, if for me to admit that it's like, yeah, I was a little apprehensive about it and uh, but wow, your money all of a sudden is really, and that's why people coming in, it's a listening session, right? You don't have to get into anything in any detail. Basically under getting to know him a little bit. You know, tell us about yourself. We cannot, we know everybody's not a fit for us.
Speaker 3:
41:51
We want to make sure it's, you know, for the benefit of our clients. We only accept a limited number each year. We want to make sure it's a, it's a solid relationship that we know we can add value in, but it's really totally all about listening and getting to know someone. By the way, I get why it's scary for a lot of people because guess what? They see news articles or they see stories and what does the news and media sell? They sell headlines, they sell viewership, and so of course they're not going to tell the story about how someone from wealth, from wisdom or any financial planner helped out John and sue and help them retire. They're going to tell the story about how a financial broker, I'm gonna use broker actually. However, broker screwed something up or sold someone something. So that's why if you're going to go sit down and talk with someone, they need to have your best interest at heart.
Speaker 3:
42:38
That's why the f word of fiduciary is so important. You're, and then you're not going to be fearful that the person sitting at the table with me is trying to sell me something. They're just trying to give you guidance. And many times Ron, people come in and we tell them they're on a great pathway, but that's not all the time. But they feel comfortable that somebody would do this because they often have that fear of being sold and no one likes that. No one wants to walk up and like, Oh, here comes the, uh, picking on direct TV here for a second. Here goes the direct TV person at an event trying to sell me this. No one likes that feeling. Well. And we use fidelity and TD as our custodians. And I was just at the TD national conference last year, spoke a couple times, um, had dinner with Tim Hockey, who's the head of all of it, you know, and then there's Tom Nally, he's the head of, uh, institutional and they're just so committed to what's in the client's best interests working backwards.
Speaker 3:
43:33
And you know, and there's a whole group of fiduciary is there. It's just so refreshing to see, you know, people that are there that are really carrying the banner, you know, for the benefit of the consumer and hockey anally are two great leaders have just a great organization. I say the same about fidelity, you know, awesome relationship, really great to work with. There are also a ton of talk down there about this Trump tax plan and just how big a deal it was and how it impacts everybody. Whether you're nearing retirement or already retired, it's impacting everybody. And believe it or not, this could be significant opportunities for you that are listening in your investments, healthcare, a state plan. So if you are at retirement, nearing retirement, unsure as we said, want to have a listening session, you don't have to get into a lot of details.
Speaker 3:
44:23
Give us a call at (888) 419-8513 remember it's what you make and it's what you keep that's important and your taxes have a profound impact on that nest egg and all ultimately on your lifestyle and your retirement. That's eight, eight eight 41985138884 one nine 85 13. Also, Paul, last week you guys had a phenomenal turnout for the women and investing. I understand there's a lot of demand for us to go do that and other companies, if you own a company or you're, you would like us to come in and do just an update on with our chief investment officer. We got a great presentation. We can make you like to women and investing. We can do that as well. People love to be educated. We have a lot of education here at the Carson group and we're more than happy to do it. Uh, it's been great having you this week Paul. And uh, we'll see you next week. I'm Ron Carson. If my cohost Paul West and you're listening to wealth from wisdom
Speaker 2:
45:16
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. And here's the legal Mumbo jumbo. The opinions voiced and well from wisdom with Rod Carson over 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 assure success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SCC registered investment advisor.