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Speaker 1: Welcome to How to Money. I'm Joel and I am that,

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Speaker 1: and today we're talking about minimizing the retirement tax time

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Speaker 1: bomb with Ed Slot.

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Speaker 2: It would be tough to find anyone who knows more

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Speaker 2: about IRA's than Ed Slot. And that is a quote

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Speaker 2: not from us here at How to Money, but from

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Speaker 2: USA Today, the Journal, the Wall Street Journal. They've actually

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Speaker 2: named our guest as the best source for IRA advice,

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Speaker 2: which is incredibly high praise. And so it should come

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Speaker 2: as no surprise that we're talking about retirement accounts today.

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Speaker 2: Ed Slot's company is the nation's leading source of accurate,

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Speaker 2: timely IRA expertise and analysis, which they provide to financial advisors, institutions,

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Speaker 2: and media like us. He is often quoted in The

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Speaker 2: New York Times, Forbes, Kiplinger, countless others. He's appeared on

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Speaker 2: virtually all the TV networks out there, and he's author

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Speaker 2: of the new book, The Retirement Savings time Bomb Ticks Louder,

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Speaker 2: which is a follow up to his previous book from

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Speaker 2: a few years ago, which we'll also discuss today. But

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Speaker 2: Ed Slott, thank you so much for talking with us

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Speaker 2: today at How the Money.

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Speaker 3: Well, great, great to be here. You just took away

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Speaker 3: my secret weapon.

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Speaker 1: What's that?

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Speaker 3: Low expectations?

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Speaker 1: Sorry about that?

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Speaker 3: Yeah, how big of a build up?

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Speaker 1: Well, when you are as experienced and someone like you

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Speaker 1: has just dove in so deep when it comes to

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Speaker 1: something like Iras.

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Speaker 2: And so we talked to a lot of listeners and

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Speaker 2: they think that we love roth Irays, but actually I

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Speaker 2: think Ed Slott might have his beat. We're excited to

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Speaker 2: talk about that later on today. After reading what you've

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Speaker 2: written about and what you've how much information you've delved

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Speaker 2: into on roth Iras, I'm like, I feel like I

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Speaker 2: know nothing in comparison to Ed Slott.

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Speaker 3: Ed.

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Speaker 1: The first question we ask everyone who comes on the show,

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Speaker 1: by the way, is what do you like to splor

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Speaker 1: jeh on? Because Matt and I we like to splor

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Speaker 1: jeh on good beer. That's kind of somewhere into.

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Speaker 3: I don't even have anything that is what do I splurans?

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Speaker 4: Kraft beer is our thing.

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Speaker 2: But there's something that that people think is a waste

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Speaker 2: of money that you spend a little bit extra on.

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Speaker 3: Oh no, I don't waste that. I eat very simple.

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Speaker 3: I don't drink what do I splur John, I don't

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Speaker 3: know pizza, make.

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Speaker 4: Cars, watches, vacations, pizza.

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Speaker 3: Pizza, you know, but I eat simple. You know. It's

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Speaker 3: a good way to save money, by the way, and

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Speaker 3: I don't do it to save money. I like local,

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Speaker 3: regular food. Yeah, I don't get anything. I can understand

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Speaker 3: what the ingredients are.

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Speaker 2: I feel like there's a resurgence coming of like we're

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Speaker 2: the only ingredient of the food should be the food itself, right,

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Speaker 2: So it's.

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Speaker 3: Like, well, who knows what's on you know. I like

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Speaker 3: pizza with all kinds of stuff on it, and I

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Speaker 3: probably shouldn't like that, but that simple stuff. Chicken wings,

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Speaker 3: I mean, by the way, I just saw in the

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Speaker 3: paper recently. I don't know what made me think of

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Speaker 3: chicken wings, but sometimes my wife likes boneless wings. And

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Speaker 3: I don't know if you saw in the paper. There

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Speaker 3: was an Ohio court case that just resolved the question.

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Speaker 3: Apparently that somebody sued that they said boneless wings. The

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Speaker 3: guy was having boneless wings at a place. There's a point,

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Speaker 3: I'll get to the point on this at a place

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Speaker 3: in Ohio and it had a two inch bone in

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Speaker 3: it that he swallowed and needed all kinds of surgeries.

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Speaker 3: Is horrible. And then he sued this company and it

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Speaker 3: actually went to court and the judges ruled that boneless

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Speaker 3: wings indeed have bones. And that's okay. You know that.

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Speaker 3: In other words, a guy lost.

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Speaker 1: You would say, just a marketing tactic.

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Speaker 3: Yeah, So it made me think that, wait a minute,

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Speaker 3: if if people say these are boneless, you know, they're

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Speaker 3: free of bones. When somebody says something's tax free, is

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Speaker 3: it really tax free or they're like taxes in there

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Speaker 3: that you have to swallow. So that that was what

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Speaker 3: I took.

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Speaker 4: Out of that story, anything that I can apply it.

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Speaker 2: To the ad the books that he right, I love it.

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Speaker 1: That's right.

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Speaker 3: Well, I'll tell you another one another story. Are you

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Speaker 3: a nice hockey fan?

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Speaker 4: I've been known to go to a match?

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Speaker 3: All right, I'm gonna the fact that you call the

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Speaker 3: game a match tells me all I need to know.

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Speaker 3: All right, But it doesn't even matter. But there was

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Speaker 3: a story about one of the famous hockey players. He

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Speaker 3: plays on the Tavarus. He used to play for the

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Speaker 3: long the Islanders. Now he got a big one hundred

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Speaker 3: million dollar contract with Toronto which involved Canadian and USA taxes,

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Speaker 3: and it was base his contract was based. I guess

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Speaker 3: he worked with an agent because the taxes are so

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Speaker 3: heavy when you have two countries hitting you at the

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Speaker 3: same time. I guess, like a lot of athletes, it

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Speaker 3: was based on how much he nets after tax. That's

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Speaker 3: how you should do retirement planning, how much you net

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Speaker 3: after tax.

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Speaker 1: Yeah, that's a good point because lots of times we're

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Speaker 1: thinking about especially when we're talking about the four to

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Speaker 1: one k traditional four one k or a traditional IRA.

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Speaker 1: You're right, and this is something you speak to a lot.

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Speaker 1: It might look like a big number, but it's not

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Speaker 1: as big of a number as it actually seems. And

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Speaker 1: one of the things you say at is the single

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Speaker 1: greatest threat to a dream retirement is taxes. So can

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Speaker 1: you can you kind of convince us that that's the case.

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Speaker 3: Well, it's not only the taxes, it's the uncertainty of

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Speaker 3: future taxes that could hit you at the worst possible

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Speaker 3: time in retirement. When you want stability and certainty. You

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Speaker 3: want to know you have a certain income coming in.

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Speaker 3: How much of that is going to go out to

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Speaker 3: the government. We don't know that. That's the scary part.

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Speaker 3: We know what it is now. So the whole point

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Speaker 3: of my book is to lock in today's unbelievably low

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Speaker 3: tax rates. Everybody complains about taxes, but these are the

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Speaker 3: good old days. If you don't do something now, you're

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Speaker 3: going to look back, Oh, how did I blow that?

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Speaker 3: Twelve twelve percent, twenty two, twenty four percent taxes were

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Speaker 3: on sale and I blow it.

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Speaker 4: It's gonna seem quaint.

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Speaker 2: Honestly, hearing you say this makes me think about mortgage

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Speaker 2: rates back in the right. I mean, for the longest

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Speaker 2: time we had rock bottom mortgage rates. But the thing is,

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Speaker 2: you start getting used to that, and you start thinking

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Speaker 2: that that becomes the norm. But then quickly, as we've

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Speaker 2: seen that, it doesn't stick around, and you're seeing the

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Speaker 2: same thing about tax rates. You points to the fact

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Speaker 2: in your book, how tax rates they've pretty much been

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Speaker 2: on a steadied decline since the nineteen forties. That's the

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Speaker 2: that's one of the biggest arguments that you've got four

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Speaker 2: tax rates returning to where they previously have been.

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Speaker 1: Is that right?

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Speaker 3: Well, you know, there's a saying. I think Mark Twain

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Speaker 3: said history doesn't repeat itself, but it rhymes or another

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Speaker 3: way to say that those who don't learn from history

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Speaker 3: are bound to repeat it. And that's what I worry about.

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Speaker 3: I worry about the growing debt. The thirty four trillion

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Speaker 3: or deficit just hit a trillion dollars. Now, some people

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Speaker 3: could say, well, who cares about that, because Congress will

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Speaker 3: keep kicking the can down the road. But as a CPA,

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Speaker 3: as an accountant, at some point, I have to believe

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Speaker 3: in math and this whole You know, there's only three

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Speaker 3: kinds of people in this world, three kinds, those who

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Speaker 3: understand math and those who don't.

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Speaker 1: Three kinds. I appreciate that, Y.

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Speaker 3: Yeah, yeah, I need somebody to hit the snare on

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Speaker 3: it anyway anyway, but the math tells me that the

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Speaker 3: whole country is living on a credit card bill. At

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Speaker 3: some point that bill has to be paid, I would think,

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Speaker 3: unless Congress keep kicking the can down the road. But

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Speaker 3: you don't want to be the one holding the bag.

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Speaker 3: When Congress comes to its senses and says we need

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Speaker 3: more revenue, where can we get it? H let's hit

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Speaker 3: those people that made that deal with us. We got

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Speaker 3: them good. Who's at most at highest risk of losing

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Speaker 3: or being subjected to future higher taxes? Those are the

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Speaker 3: people who do nothing now, the people with the most

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Speaker 3: money in pre tax of four oh one k and

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Speaker 3: iras Because that money has not yet been taxed. In

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Speaker 3: my book, I call it the low hanging fruit or

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Speaker 3: a big juicy steak to Congress, because Congress has every

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Speaker 3: right to say, that was a deal you guys made.

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Speaker 3: You got your deduction up front. Now we tax it,

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Speaker 3: but we don't know the rate. You mentioned a mortgage.

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Speaker 3: You know there's a mortgage on your IRA. I always

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Speaker 3: say your IRA is an iou to the irs, but

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Speaker 3: unlike a mortgage, like when you go in for a mortgage,

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Speaker 3: because the concept is similar. There's a debt on your IRA.

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Speaker 3: Part of that is owed right back to the government.

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Speaker 3: It's not all yours. Most people don't see that. Matter

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Speaker 3: of fact, I had clients over the years. I remember

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Speaker 3: this one guy years ago, he finally hit a million

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Speaker 3: dollars in his IRA. Was so happy. He came in.

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Speaker 3: He showed me this statement. He said, look at this,

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Speaker 3: I got a million dollars in my IRA. I said,

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Speaker 3: what are you looking at? What do you show me?

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Speaker 3: That's not yours. It's just temporarily on your letterhead. You're

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Speaker 3: not keeping most of that. And he said, what do

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Speaker 3: you mean it's mine? No, it's not yours. You have

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Speaker 3: a partner. Sam it's a joint account. But think of

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Speaker 3: a think of your IRA like that. Can you imagine

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Speaker 3: thinking of it as a joint account, which it could be.

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Speaker 3: But here's the difference. You go in for a mortgage.

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Speaker 3: Let's say you go in, you do all you due diligence,

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Speaker 3: You know what that mortgage is, you know how much

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Speaker 3: you owe. But the mortgage on your IRA is open ended.

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Speaker 3: In other words, if you went in yeah, yeah, depending

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Speaker 3: on how much Congress needs. So imagine you went in

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Speaker 3: for this mortgage and you did all your homework on

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Speaker 3: your home. You know the rates, you know the comparables

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Speaker 3: and all the you know everything. You're coming well prepared.

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Speaker 3: You have all your notes, and you say to the banker.

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Speaker 3: You're sitting there with the banker. If anybody actually does

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Speaker 3: this in a bank anymore. But let's say you're going

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Speaker 3: old school. You're in with the mortgage company, the banker,

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Speaker 3: and you start showing all your numbers, and the banker says,

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Speaker 3: don't worry. You put that stuff away. That's all meaning.

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Speaker 3: But we did our homework. What's the rit Don't worry

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Speaker 3: about the rate? What do you mean, don't worry about

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Speaker 3: the rate. Don't worry about it when we need the

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Speaker 3: what about payments? Don't we have to repay you? Don't

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Speaker 3: worry about it? What do you mean, don't worry about it?

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Speaker 3: When we need the money back from you, we'll tell

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Speaker 3: you what the rate is.

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Speaker 1: That sounds scary?

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Speaker 3: Yeah, who would sign up for that deal? We all did.

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Speaker 3: It's called an IRA.

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Speaker 2: Sure, So okay, I quick follow up, And maybe this

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Speaker 2: is slightly outside of your realm of expertise, even though

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Speaker 2: you do know what's on here. But on one hand,

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Speaker 2: you can either increase taxes or on the other hand,

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Speaker 2: you can reduce what it is that you're paying out.

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Speaker 2: What it sounds like, you think that there's a higher

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Speaker 2: likelihood of the fact that people are going to want

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Speaker 2: to maintain receiving their benefits what it is that the

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Speaker 2: government is doing for them, and so therefore the only

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Speaker 2: alternative is to actually increase taxes.

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Speaker 3: I think the only alternative is to increase taxes, But

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Speaker 3: it's not politically viable, so I don't know if it'll

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Speaker 3: ever happen. Maybe Congress will keep kicking the case down

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Speaker 3: the road. But that leaves you with the uncertainty of

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Speaker 3: what future taxes might be. When you need to have

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Speaker 3: certainty the most in retirement when a lot of things

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Speaker 3: are fixed for you.

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Speaker 1: Adding into the future uncertainty question is literally a tax program,

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Speaker 1: The Tax Cuts and Job Act that is supposed to

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Speaker 1: sunset right has a fixed expiration date. So how does

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Speaker 1: that impact the way you think about our current response

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Speaker 1: to future tax rates?

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Speaker 3: Well, tax rates are supposed to go up, and we

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Speaker 3: don't know if it's going to be totally gone, you know,

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Speaker 3: come back the higher rates. We don't know if they're

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Speaker 3: going to come back this post as you say, in

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Speaker 3: twenty twenty six, if nobody does anything, they'll be higher rates,

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Speaker 3: mostly on the top level, but a lot of people,

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Speaker 3: even the middle income people, will be paying higher taxes

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Speaker 3: because the big standard deduction. There's giant standard deductions. We've

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Speaker 3: all become used to ninety center. The people don't even

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Speaker 3: itemize anymore. They take these giant standard deductions. That's IRS

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Speaker 3: numbers ninety percent. If that goes back to cut in

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Speaker 3: half and you have to rely on certain itemized deductions,

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Speaker 3: your taxes may go up.

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Speaker 1: That's true, yea.

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Speaker 2: So okay, So we're talking about roth accounts, and the

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Speaker 2: reason it sounds like that you're a big fan is

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Speaker 2: essentially that you're you're it's a guarantee, right. Going back

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Speaker 2: to the mortgage example, it's the equivalent of getting a

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Speaker 2: locked in rate and perhaps even the ability to not

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Speaker 2: even see your Yeah, your escrow go up. Maybe you

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Speaker 2: can like lock in your insurance somehow as well. Is

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Speaker 2: that Is that why it is that you are such

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Speaker 2: a big fan of roths?

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Speaker 3: Yeah, you hit it perfectly. You are locking in known

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Speaker 3: rates which is zero, and you know what people say

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Speaker 3: to me, ed, But what if you're wrong? What if

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Speaker 3: rates go down? First of all, does anybody I'll give

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Speaker 3: you an example. I talk to CPA's other financial advisors,

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Speaker 3: even consumers, and I always ask this question. First. I

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Speaker 3: always pull the audience and say how much they show

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Speaker 3: by show of hands, how many of you believe tax

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Speaker 3: rates will go up in the future. Maybe half the

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Speaker 3: hands go up. Yeah, they said, all right, I'd have

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Speaker 3: to have to. Then I ask a follow up question.

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Speaker 3: I said, all right, I see, let me ask you this,

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Speaker 3: how many of you think tax rates will go down?

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Speaker 3: Not one hand? And then I said, but that's the

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Speaker 3: same question I just asked you. The first question just inverted.

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Speaker 3: So nobody really thinks tax rates will go down. We're

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Speaker 3: at rock bottom now. So if rates go up, the

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Speaker 3: ROTH always wins. Really, the whole raw thing is really

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Speaker 3: just a bet on where you see your future tax

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Speaker 3: rates going. And that leads to something else, which I'm

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Speaker 3: sure is going to be your next question, but ask

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Speaker 3: it anything.

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Speaker 1: Okay, So my question here is, yeah, we're talking about

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Speaker 1: future tax rates, but we're also talking about like the

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Speaker 1: individual reality of income. Right, So how does someone's specific

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Speaker 1: income influence your advice? High income earners? Right, that's is

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Speaker 1: the people in those higher tax brackets who would say, oh,

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Speaker 1: that's when the traditional makes the most sense. And of

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Speaker 1: course if you're early on your lower earning years, the

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Speaker 1: ROTH makes like it's slam dunk. So what about opting

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Speaker 1: for traditional accounts because of some of those secondary factors too,

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Speaker 1: like qualifying for a subsidy for healthcare or something like that.

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Speaker 3: Yeah, those are issues, but they're not the biggest issues.

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Speaker 3: I thought you were going to ask me, and you

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Speaker 3: were skating around it because the number one question when

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Speaker 3: I talk about rates going up, your rates going up?

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Speaker 3: Because I said, it's all based on a big bit,

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Speaker 3: and when you started talking about higher income people, the

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Speaker 3: next question I usually get, But ed. I got this

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Speaker 3: from my clients over the years, my rates in retirement.

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Speaker 3: If I don't have that big W two anymore, my

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Speaker 3: rates will be lower. So that tells me I shouldn't

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Speaker 3: do the roth because I'll be based on your math.

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Speaker 3: If you're in a lower bracket, lower marginal rates in retirement,

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Speaker 3: you do better with a traditional ary not converting. And

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Speaker 3: that's true. The myth proves that out. But that to

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Speaker 3: me is the number one myth in retirement. Everybody thinks

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Speaker 3: I'll be in a lower bracket and retirement, and we

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Speaker 3: have almost never seen that happen, even for high income people.

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Speaker 3: I'll give you an example. But there are a number

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Speaker 3: of reasons for it.

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Speaker 1: But is that because they're contributing so much to that

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Speaker 1: retirement account.

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Speaker 3: Well, I'll tell you why I had this guy. I've

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Speaker 3: been telling him about the raw years ago when it

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Speaker 3: doesn't even matter when, but years ago, when I was

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Speaker 3: doing more client work. Anyway, for a year after year,

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Speaker 3: he's coming into retirement. I said, do the raw to

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Speaker 3: the raw. No, no, no, no, I'll be in a

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Speaker 3: load to bracket and retirement. This went on every year.

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Speaker 3: Finally he comes in all happy for all eager in

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Speaker 3: anticipation because he came in to do his taxes for

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Speaker 3: his first full year of retirement. In other words, no

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Speaker 3: W two at all, so he can't wait to get

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Speaker 3: the results I give him the tax attorney said, ed,

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Speaker 3: how could this be? My income's higher than my best

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Speaker 3: years working. How could this be? I said, it's easy

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Speaker 3: because you never listen to me. That's how it can be.

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Speaker 3: I told you this would happen. He said, but I

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Speaker 3: don't even have my W two. I said, yeah, but

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Speaker 3: all as you just said, all those years you kept

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Speaker 3: contributing to the four one k and eventually rolled to

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Speaker 3: an IRA, and now your required minimum distributions, your R

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Speaker 3: and DS are in fact higher than your best W

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Speaker 3: two ever, and now your income will be higher and

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Speaker 3: your taxes will be higher in retirement, so you probably

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Speaker 3: should have converted. It's not only the income that's higher.

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Speaker 3: Deductions are generally lower. You lose both ends in retirement

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Speaker 3: because you don't get the deduction for your four to

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Speaker 3: one k contributions anymore. You're not working. You probably, in

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Speaker 3: retirement don't have any tax benefits for dependent or minor children.

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Speaker 3: You probably don't have any mortgage interests because you paid

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Speaker 3: our your house. So a lot of things are happening

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Speaker 3: both on the income side, where your income's higher because

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Speaker 3: you'll let your account grow and your deductions are lower.

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Speaker 2: Okay, and I totally get where you're coming from, But

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Speaker 2: this also sounds like a nice problem to have, right

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Speaker 2: somebody who's a high earner, maybe somebody who's paying a

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Speaker 2: pretty well known CPA in New York. What about for

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Speaker 2: folks out there who are they're pretty dang frugal, they're

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Speaker 2: living very affordably, and they truly, in fact, are going

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Speaker 2: to expect to see their income decrease significantly in their

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Speaker 2: quote unquote retirement years. Do you think that it would

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Speaker 2: make sense for them?

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Speaker 3: That could be, but I wouldn't put all my eggs

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Speaker 3: in one basket. Maybe for those people doing a series

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Speaker 3: of smaller conversions over the years. Here's the key to conversions.

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Speaker 3: You want to use up the lower tax brackets, these twelve, twenty, two,

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Speaker 3: twenty four percent. If you leave any of those unused,

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Speaker 3: you've blown it. You've just given a gift to the

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Speaker 3: government that you can never get back. An unused tax

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Speaker 3: bracket can never You don't get it back.

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Speaker 1: Ye, yeah, once that years past, you can't go back

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Speaker 1: in time.

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Speaker 3: And to leave that on the table. Like I've had

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Speaker 3: people over the years tell me, Ed, look at this,

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Speaker 3: I paid no tax this year because my income was

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Speaker 3: so low. I said, I'm sorry to hear that, Not

365
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Speaker 3: that your income's low. I'm sorry you paid no tax.

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Speaker 3: That tells me you didn't use the lower brackets. You

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Speaker 3: should have been converting that large IRA and used up

368
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Speaker 3: the brackets so hard. So sorry to hear your tax

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Speaker 3: planning went off the rails.

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Speaker 1: Yeah, that's more of a myopic view. It's a single

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Speaker 1: year view versus taking a exact rist approach, right, And

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Speaker 1: you're like, I want the pay the lowest amount of

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Speaker 1: possible taxes over time. And some of the people who

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Speaker 1: are opting for traditional accounts instead of ROTH accounts are

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Speaker 1: thinking about single year versus multi year planning. Talk about

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Speaker 1: the idea of tax diversification for a second, ED, because like,

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Speaker 1: what about the idea of having ROTH and traditional assets

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Speaker 1: you can kind of choose your own tax adventure or

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Speaker 1: such in retirement. It sounds like you don't think that's

380
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Speaker 1: a solid idea and you would rather people go all

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Speaker 1: in on ROTH accounts. Is that right?

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Speaker 3: No? This something to be said. You said tax diversification.

383
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Speaker 3: I use the term a little different. I call it

384
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Speaker 3: tax risk diversification, because you should everybody should have some

385
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Speaker 3: position in tax free just as a buffer, as a

386
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Speaker 3: guard rail, as a defensive tactic in case rates do

387
00:19:18,240 --> 00:19:22,679
Speaker 3: go through the roof. That's your only defense. So you

388
00:19:22,800 --> 00:19:25,159
Speaker 3: have to have something in a row would say, I

389
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Speaker 3: would say at a minimum, and it's okay to have

390
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Speaker 3: a hybrid system. Maybe you actually believe you'll be in

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Speaker 3: a lower bracket in the retirement and there's reasons not

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Speaker 3: to convert. Maybe you're a big giver to charity and

393
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Speaker 3: you want to do these qcds when you get all

394
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Speaker 3: to qualified charitable distributions. Iras are great vehicles to get

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Speaker 3: money out at zero percent tax rates, so you might

396
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Speaker 3: want to keep some iras for that. Or you might think,

397
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Speaker 3: what if I have big medical expenses, I want to

398
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Speaker 3: be able to deduct them, Well, you have to have

399
00:19:56,040 --> 00:19:58,040
Speaker 3: income to deduct them. You may want to keep some

400
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Speaker 3: iras for that number of reasons to keep something in there.

401
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Speaker 3: But I would say everybody should have some kind of

402
00:20:05,560 --> 00:20:08,880
Speaker 3: tax risk diversification by building up in your wrath.

403
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Speaker 2: Yeah, So basically what it sounds like is a little

404
00:20:11,280 --> 00:20:13,280
Speaker 2: bit of both perhaps. So yet's say you've got a great,

405
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Speaker 2: great four one k plan at work, You've got a

406
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Speaker 2: low cost plan that you can be a part of

407
00:20:17,320 --> 00:20:21,080
Speaker 2: in a widely diversified index fund. Maybe go ahead, take

408
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Speaker 2: the tax break. Now contribute to the four one k,

409
00:20:23,520 --> 00:20:26,679
Speaker 2: but also beyond that. Yeah, maybe folks should be considering

410
00:20:26,720 --> 00:20:29,720
Speaker 2: their wroth irais for any dollars invested beyond that four

411
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Speaker 2: one k.

412
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Speaker 3: Yeah, except it's not a tax break. People call it.

413
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Speaker 3: I even called it a deduction for the four oh

414
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Speaker 3: one k, because that's what people call it. You know,

415
00:20:38,280 --> 00:20:42,520
Speaker 3: you get you pay tax on the net amount. For example,

416
00:20:42,560 --> 00:20:44,320
Speaker 3: with a four oh one k. If your wages of

417
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Speaker 3: fifty thousand and you take you say, put ten thousand

418
00:20:48,000 --> 00:20:49,760
Speaker 3: of that my four oh one k, you only pay

419
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Speaker 3: tax on forty thousand the net or a four to

420
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Speaker 3: one k. So people call that a deduction or exclusion

421
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Speaker 3: from income. But it's not a real deduction to me,

422
00:20:58,600 --> 00:21:01,560
Speaker 3: a real deduction. As you take a medical deduction or charity,

423
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Speaker 3: you get that tax benefit, you never have to give

424
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Speaker 3: it back a deduction for a four oh one k.

425
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Speaker 3: Taking that deduction is really just alone you're taking from

426
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Speaker 3: the government to be paid back probably at the worst

427
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Speaker 3: possible time in retirement, unless you're sure to be in

428
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Speaker 3: a lower bracket.

429
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Speaker 1: All right, We've got a few more questions we want

430
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Speaker 1: to get to with you, including you want to talk

431
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Speaker 1: about like the timing of roth conversions, because let's say

432
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Speaker 1: people are listening to you and they're saying, I want

433
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Speaker 1: to kind of remedy is ticking time bomb? How do

434
00:21:29,160 --> 00:21:30,399
Speaker 1: I do that? When do I do that? We'll get

435
00:21:30,400 --> 00:21:32,439
Speaker 1: to some questions on that with you in just a second.

436
00:21:40,440 --> 00:21:42,760
Speaker 2: We are back from the breaks offing with Ed slot

437
00:21:42,760 --> 00:21:46,400
Speaker 2: about the ticking tax time bomb, and Ed a lot

438
00:21:46,440 --> 00:21:50,720
Speaker 2: of our previous segment you were discussing the wroth Ira

439
00:21:50,880 --> 00:21:54,200
Speaker 2: and specifically like there you raise no questions about the

440
00:21:54,280 --> 00:21:57,479
Speaker 2: roth Ira essentially going away, and so I guess that's

441
00:21:57,520 --> 00:21:59,320
Speaker 2: what I would address, Like what are the chances of

442
00:21:59,359 --> 00:22:03,000
Speaker 2: a like a roth Ira rugpole where the government needs

443
00:22:03,080 --> 00:22:06,280
Speaker 2: money so badly that they you know, they they're looking

444
00:22:06,280 --> 00:22:08,199
Speaker 2: at the traditional accounts and they're thinking, well, yeah, of

445
00:22:08,240 --> 00:22:09,920
Speaker 2: course we're going to be able to milk that for

446
00:22:10,440 --> 00:22:11,240
Speaker 2: all that we can.

447
00:22:11,359 --> 00:22:12,880
Speaker 4: But then you've also got this.

448
00:22:12,840 --> 00:22:15,760
Speaker 2: Other giant pile of money that is almost it's like

449
00:22:15,760 --> 00:22:18,440
Speaker 2: the forbidden fruit. But is there a point in time

450
00:22:18,440 --> 00:22:20,560
Speaker 2: when the fruit becomes I don't know, less forbidden.

451
00:22:20,920 --> 00:22:23,119
Speaker 3: This is a great question you asked. You know why

452
00:22:23,520 --> 00:22:26,280
Speaker 3: I when I do seminars, especially to consumers, and I,

453
00:22:26,640 --> 00:22:28,639
Speaker 3: you know, keep going on the roth. I'm all in

454
00:22:28,680 --> 00:22:30,520
Speaker 3: for the roth because I love tax free and I

455
00:22:30,560 --> 00:22:33,240
Speaker 3: haven't ever had a person I recommended it to to

456
00:22:33,320 --> 00:22:35,240
Speaker 3: come back and say I wish I didn't do it.

457
00:22:35,600 --> 00:22:38,480
Speaker 3: Everybody is drilled. They don't even remember they paid the tax.

458
00:22:38,480 --> 00:22:40,679
Speaker 3: All they're looking at is their accounts going up and

459
00:22:40,760 --> 00:22:42,520
Speaker 3: up and up, and it's all tax free. They keep

460
00:22:42,560 --> 00:22:45,760
Speaker 3: one hundred percent. But given all that and all the

461
00:22:45,800 --> 00:22:48,520
Speaker 3: stuff I talk about about the big roth fan because

462
00:22:48,560 --> 00:22:52,400
Speaker 3: I love tax free in retirement, who doesn't. But there's

463
00:22:52,440 --> 00:22:55,760
Speaker 3: always somebody that asked me. That's a number one question

464
00:22:55,880 --> 00:22:59,280
Speaker 3: I get at every seminar I do, especially from consumers.

465
00:22:59,320 --> 00:23:02,440
Speaker 3: Except the only difference is they don't ask it as

466
00:23:02,600 --> 00:23:06,480
Speaker 3: nice as you just asked it. They'll say something along

467
00:23:06,680 --> 00:23:11,040
Speaker 3: the money, Yes, it's it's here's the question I get,

468
00:23:11,160 --> 00:23:13,159
Speaker 3: can of ed? This is great? You talk about all

469
00:23:13,200 --> 00:23:17,040
Speaker 3: the roth roth. Can I trust the government to keep

470
00:23:17,080 --> 00:23:21,920
Speaker 3: its word that roth iras will always be income tax free.

471
00:23:21,960 --> 00:23:25,440
Speaker 3: And my answer is always no. You can't trust Congress

472
00:23:25,440 --> 00:23:27,680
Speaker 3: as far as you can throw them. As CPA's we

473
00:23:27,840 --> 00:23:31,400
Speaker 3: have an old saying tax laws are written in pencil,

474
00:23:32,160 --> 00:23:34,880
Speaker 3: so they can change them anytime they want. But here's

475
00:23:34,920 --> 00:23:37,760
Speaker 3: why I believe you're safe with a wroth. They're never

476
00:23:37,840 --> 00:23:41,120
Speaker 3: gonna they're never going to touch it. It's good your question.

477
00:23:41,400 --> 00:23:44,480
Speaker 3: You don't have to worry about will they change? Uh? No,

478
00:23:45,119 --> 00:23:49,120
Speaker 3: One thing Congress learned, well, one thing we learned from Congress.

479
00:23:49,880 --> 00:23:53,720
Speaker 3: Lucky for all of us, Congress are the worst financial

480
00:23:53,880 --> 00:23:59,040
Speaker 3: planners on earth, and we should use that shortsighted mentality

481
00:23:59,280 --> 00:24:02,200
Speaker 3: to our advantage. It's one thing Congress learned about ross.

482
00:24:02,240 --> 00:24:05,159
Speaker 3: And they learned this back in twenty ten. Do you

483
00:24:05,200 --> 00:24:07,880
Speaker 3: remember what happened with roths in twenty ten?

484
00:24:08,320 --> 00:24:10,280
Speaker 4: I don't. Actually, Well i'll tell.

485
00:24:10,160 --> 00:24:13,480
Speaker 3: You because I told everybody on earth to take that deal.

486
00:24:14,720 --> 00:24:16,640
Speaker 3: Congress as usual needed money.

487
00:24:16,760 --> 00:24:18,560
Speaker 1: Oh this was when it was like two you could

488
00:24:18,600 --> 00:24:20,600
Speaker 1: delay paying tax right for a couple of years.

489
00:24:20,680 --> 00:24:23,000
Speaker 3: Yes, well it was bigger than that. It used to be.

490
00:24:23,400 --> 00:24:27,000
Speaker 3: When the roth rules were first written, people, you couldn't

491
00:24:27,040 --> 00:24:30,119
Speaker 3: convert to a wroth if your income exceeded one hundred

492
00:24:30,200 --> 00:24:34,400
Speaker 3: thousand dollars. In twenty ten, Congress realized, oh, we need money.

493
00:24:34,840 --> 00:24:37,240
Speaker 3: Let's let the rich people, you know, the people with money,

494
00:24:37,359 --> 00:24:40,480
Speaker 3: let them convert. We'll get them money. And they eliminated

495
00:24:41,080 --> 00:24:45,520
Speaker 3: that requirement, so it opened up the floodgates for people

496
00:24:45,680 --> 00:24:49,720
Speaker 3: to convert. In two thousand, I converted everything. I begged

497
00:24:50,240 --> 00:24:53,360
Speaker 3: everything I converted that year. I begged everybody and every

498
00:24:53,480 --> 00:24:56,119
Speaker 3: seminar take that deal. In fact, recently I just had

499
00:24:56,160 --> 00:24:59,840
Speaker 3: a seminar. I was telling a group of CPAs CA

500
00:25:00,000 --> 00:25:03,560
Speaker 3: colleagues about this, and I said, I begged you, guys,

501
00:25:03,640 --> 00:25:06,119
Speaker 3: if you remember to take tell your clients do it

502
00:25:06,200 --> 00:25:08,560
Speaker 3: for yourself like I did to take that deal in

503
00:25:08,640 --> 00:25:12,840
Speaker 3: twenty ten. And I always I told them I converted

504
00:25:13,000 --> 00:25:15,520
Speaker 3: everything in twenty ten. And I threw the question out

505
00:25:15,560 --> 00:25:18,760
Speaker 3: to CPAs and I said, I converted everything. Guess how

506
00:25:18,840 --> 00:25:20,760
Speaker 3: much tax I paid? And they said, well, you got

507
00:25:20,880 --> 00:25:22,720
Speaker 3: to give us the rate and this I forget that

508
00:25:23,000 --> 00:25:27,120
Speaker 3: I paid zero zero, And they're looking at their heads.

509
00:25:27,240 --> 00:25:31,399
Speaker 3: Their heads are turning around like it's exorcist to something. No,

510
00:25:31,880 --> 00:25:34,439
Speaker 3: I paid zero. You should have been telling your clients

511
00:25:34,480 --> 00:25:37,240
Speaker 3: to take that deal. That was the deal you paid

512
00:25:37,440 --> 00:25:41,200
Speaker 3: zero in twenty ten half and eleven half in twelve.

513
00:25:41,320 --> 00:25:45,000
Speaker 3: So in effect, the government gave everybody an interest free

514
00:25:45,080 --> 00:25:47,800
Speaker 3: loan to build a tax free savings account. It was

515
00:25:47,800 --> 00:25:51,560
Speaker 3: a deal of a century and everybody should have taken

516
00:25:51,640 --> 00:25:54,760
Speaker 3: that deal. What did Congress learn from that? They saw

517
00:25:55,000 --> 00:25:58,280
Speaker 3: boat loads of money, revenue coming in from people like

518
00:25:58,400 --> 00:26:03,560
Speaker 3: me and everybody else. They made large conversions and Congress said, wow,

519
00:26:03,680 --> 00:26:06,000
Speaker 3: what a deal. Look at all the revenue they bring in.

520
00:26:06,119 --> 00:26:08,200
Speaker 3: And they didn't look back. You know that they what

521
00:26:08,280 --> 00:26:10,879
Speaker 3: they're losing in the future because they're so short sighted.

522
00:26:11,600 --> 00:26:14,239
Speaker 3: You know, they look at budget cycles, five ten year

523
00:26:14,320 --> 00:26:17,840
Speaker 3: budget cycles, and they realize, hey, this rough thing brings

524
00:26:17,920 --> 00:26:21,600
Speaker 3: in money, let's expand it. So they expanded rough warowin

525
00:26:21,720 --> 00:26:24,479
Speaker 3: K's and blah blah blah, on and on until they

526
00:26:24,680 --> 00:26:28,320
Speaker 3: really showed their hand in Secure two point zero, the

527
00:26:28,400 --> 00:26:31,960
Speaker 3: most recent big tax law where they went roth crazy.

528
00:26:32,040 --> 00:26:35,200
Speaker 3: I call it roth Amania. They said, now let's let's

529
00:26:35,480 --> 00:26:38,160
Speaker 3: find every which way for people to do roth. Let's

530
00:26:38,200 --> 00:26:40,840
Speaker 3: have and we have them now roth sep I rays

531
00:26:40,960 --> 00:26:44,280
Speaker 3: roth simple Iras five twenty nine to roth irase rough

532
00:26:44,320 --> 00:26:48,320
Speaker 3: warowin K's no rm D's Rough four and k's matching

533
00:26:48,440 --> 00:26:50,840
Speaker 3: Roth Warol and K catch up brought roth Roth.

534
00:26:51,400 --> 00:26:54,960
Speaker 1: Why did they do for the college investment rough?

535
00:26:55,160 --> 00:26:57,920
Speaker 3: Everything Ruth? So why did they go all in on

536
00:26:58,040 --> 00:27:01,359
Speaker 3: the rough because of their short sided mentality, which we

537
00:27:01,440 --> 00:27:04,359
Speaker 3: should take advantage of, saying, look at all this money

538
00:27:04,440 --> 00:27:06,800
Speaker 3: we get in because the only money that can get

539
00:27:06,920 --> 00:27:10,440
Speaker 3: into a roth ira is already taxed money. They get

540
00:27:10,520 --> 00:27:14,480
Speaker 3: their money upfront, in fact, in secure two point oh,

541
00:27:15,680 --> 00:27:18,480
Speaker 3: the WROTH, all this ROTH stuff I just told you,

542
00:27:18,600 --> 00:27:21,800
Speaker 3: these Roth enhancements and secure two point oh. If you

543
00:27:21,920 --> 00:27:24,800
Speaker 3: actually look at the bill and you can see that online,

544
00:27:24,880 --> 00:27:27,320
Speaker 3: if you go to the Congressional website or whatever that is,

545
00:27:27,880 --> 00:27:31,000
Speaker 3: uh and you look at it all these pages of stuff.

546
00:27:31,359 --> 00:27:34,840
Speaker 3: You look at the heading where the WROTH provisions are.

547
00:27:35,359 --> 00:27:41,200
Speaker 3: It's under a giant title and giant font Revenue provisions.

548
00:27:41,359 --> 00:27:44,240
Speaker 3: That's what it says, revenue provisions. So that tells you

549
00:27:44,840 --> 00:27:47,800
Speaker 3: how Congress thinks about the WROTH. It's a money grab,

550
00:27:47,880 --> 00:27:51,920
Speaker 3: it's a revenue generator, and it's good for us. So

551
00:27:52,359 --> 00:27:55,879
Speaker 3: I mean, you know, let's take advantage of their short sightedness.

552
00:27:55,960 --> 00:27:58,480
Speaker 3: So I'm going to tell you the secret. I just

553
00:27:58,600 --> 00:27:59,439
Speaker 3: told you the secret.

554
00:27:59,520 --> 00:27:59,800
Speaker 1: You know what.

555
00:28:00,200 --> 00:28:03,440
Speaker 3: Franklin Are, one of our founding fathers, said about secrets,

556
00:28:04,040 --> 00:28:06,640
Speaker 3: three people can keep a secret if two of them

557
00:28:06,760 --> 00:28:10,520
Speaker 3: are dead. But here's the secret Congress, and I just

558
00:28:10,600 --> 00:28:14,879
Speaker 3: gave it to anyway. They love roth iras it's not

559
00:28:15,040 --> 00:28:18,359
Speaker 3: going anywhere because it brings in money up front and

560
00:28:18,440 --> 00:28:21,320
Speaker 3: they don't look at the back end. Will they trim

561
00:28:21,440 --> 00:28:25,160
Speaker 3: around the edges and find little ways maybe, But if

562
00:28:25,240 --> 00:28:28,160
Speaker 3: they do anything to break the golden goose or kill

563
00:28:28,240 --> 00:28:31,639
Speaker 3: this golden goose, they're going to kill their revenue strength forever.

564
00:28:31,840 --> 00:28:34,719
Speaker 3: So I think the long story short, Roth is here

565
00:28:34,720 --> 00:28:35,919
Speaker 3: at a stake my opinion.

566
00:28:36,080 --> 00:28:38,120
Speaker 1: So we've been talking a lot about Roth contributions, and

567
00:28:38,120 --> 00:28:41,080
Speaker 1: then you just kind of talked about Roth conversions specifically

568
00:28:41,160 --> 00:28:45,360
Speaker 1: in twenty ten being this random occurrence that was amazing

569
00:28:45,440 --> 00:28:49,440
Speaker 1: for investors. You've called Roth conversions overall a bet. What

570
00:28:49,560 --> 00:28:51,640
Speaker 1: are the major factors at play in this bet? And

571
00:28:51,720 --> 00:28:54,080
Speaker 1: how should How do money listeners think about, Oh, hey,

572
00:28:54,120 --> 00:28:57,160
Speaker 1: I've got all this traditional IRA or traditional four or

573
00:28:57,200 --> 00:28:59,720
Speaker 1: one K money. How do I know when and how

574
00:29:00,280 --> 00:29:01,480
Speaker 1: to turn that into roth money?

575
00:29:01,560 --> 00:29:03,680
Speaker 3: Well, you don't know. There's two parts to that. Some

576
00:29:03,800 --> 00:29:06,880
Speaker 3: people ask when should I convert? Like market timing. You

577
00:29:07,000 --> 00:29:10,440
Speaker 3: can't do it, so forget that part of it. You know,

578
00:29:10,520 --> 00:29:12,760
Speaker 3: people say should I, you know market went down today,

579
00:29:12,760 --> 00:29:14,760
Speaker 3: should I convert? By the time they convert, it went

580
00:29:14,840 --> 00:29:18,560
Speaker 3: up a thousand points, So forget that. You can't market time.

581
00:29:18,640 --> 00:29:21,720
Speaker 3: The best way to do the ROTH is, as I said,

582
00:29:21,760 --> 00:29:24,440
Speaker 3: sort of dollar cost averaging into the market, using up

583
00:29:24,480 --> 00:29:28,920
Speaker 3: the low brackets wall annual conversions over time. But the

584
00:29:29,080 --> 00:29:31,720
Speaker 3: bet is that you believe tax rates will go up.

585
00:29:31,800 --> 00:29:34,640
Speaker 3: But if you also believe tax rates won't go down,

586
00:29:36,080 --> 00:29:38,800
Speaker 3: then it's a sure bet. If you believe your tax

587
00:29:38,920 --> 00:29:42,680
Speaker 3: rate in retirement may go down, then and do partial

588
00:29:42,800 --> 00:29:45,560
Speaker 3: But going back to the example you gave me earlier.

589
00:29:45,720 --> 00:29:47,840
Speaker 3: You know a high income earner, they're saying, well, I'm

590
00:29:47,840 --> 00:29:50,280
Speaker 3: at the top rates now I want to take my

591
00:29:50,480 --> 00:29:54,160
Speaker 3: deductions at the top rates. That may be true, but

592
00:29:54,360 --> 00:29:57,000
Speaker 3: you don't know what your future rates are. The top

593
00:29:57,120 --> 00:29:59,400
Speaker 3: rate is only thirty seven percent, now how do we

594
00:29:59,560 --> 00:30:03,200
Speaker 3: know the top and even a low rate when you're

595
00:30:03,240 --> 00:30:06,320
Speaker 3: in retirement can exceed that, So you don't know. So

596
00:30:06,560 --> 00:30:08,680
Speaker 3: the point is with the ROTH, it's a bet, but

597
00:30:08,800 --> 00:30:11,840
Speaker 3: you there's certainty about the bet that you can lock

598
00:30:11,960 --> 00:30:14,520
Speaker 3: in the rates that are here now. And the other

599
00:30:14,640 --> 00:30:18,000
Speaker 3: part with the ROTH is you control your tax rates.

600
00:30:18,200 --> 00:30:20,760
Speaker 3: You can control your tax rates how much you want

601
00:30:20,840 --> 00:30:24,320
Speaker 3: to pay. Now, once you hit age seventy three, which

602
00:30:24,400 --> 00:30:28,360
Speaker 3: is the required minimum distribution age, it's out of your control.

603
00:30:28,520 --> 00:30:31,120
Speaker 3: You don't control it anymore. Then the government says you

604
00:30:31,280 --> 00:30:33,120
Speaker 3: have to take a certain amount. I don't care what

605
00:30:33,240 --> 00:30:35,600
Speaker 3: it does to your rate. Then it's out of control.

606
00:30:35,840 --> 00:30:40,080
Speaker 3: You can control what you pay by using the Again,

607
00:30:40,320 --> 00:30:42,800
Speaker 3: I can't say it enough, the low brackets, filling up

608
00:30:42,880 --> 00:30:46,680
Speaker 3: those low brackets every year. You control how much you pay.

609
00:30:47,080 --> 00:30:49,240
Speaker 3: And that's the beauty of the ROTH. Now, say I'm

610
00:30:49,280 --> 00:30:52,000
Speaker 3: wrong about all of this ROTH stuff. It turns out

611
00:30:52,520 --> 00:30:55,560
Speaker 3: you've converted everything because you listen to this great show

612
00:30:55,720 --> 00:30:59,000
Speaker 3: and Matt, Joel and Ed and everybody's happy, and you

613
00:30:59,360 --> 00:31:02,480
Speaker 3: went crazy, converted everything, you paid the tax And it

614
00:31:02,600 --> 00:31:06,600
Speaker 3: turns out ten years later in retirement you say you

615
00:31:06,640 --> 00:31:10,160
Speaker 3: know ED was wrong. Taxes went down. What's the worst

616
00:31:10,240 --> 00:31:13,360
Speaker 3: case scenario if you lose the bet? So to speak,

617
00:31:13,480 --> 00:31:16,320
Speaker 3: this is what I love about the row. Your worst

618
00:31:16,360 --> 00:31:20,120
Speaker 3: case scenario, you locked in a zero percent tax rate

619
00:31:20,240 --> 00:31:22,720
Speaker 3: on this ROTH for the rest of your life and

620
00:31:22,960 --> 00:31:27,040
Speaker 3: ten years beyond it's not a bad consolation prize. Can't

621
00:31:27,080 --> 00:31:28,280
Speaker 3: beat a zero percent.

622
00:31:28,160 --> 00:31:29,040
Speaker 4: Tax rate, that's true.

623
00:31:29,080 --> 00:31:30,760
Speaker 2: Well, I mean it makes me think too of the

624
00:31:30,800 --> 00:31:33,960
Speaker 2: fact that, like you're talking of, like the fact that

625
00:31:34,040 --> 00:31:36,320
Speaker 2: the highest tax bracker right now actually isn't all that high.

626
00:31:36,480 --> 00:31:37,959
Speaker 2: Like that's one of the things you say, Like if

627
00:31:38,000 --> 00:31:39,720
Speaker 2: you look back to ring a Gamble on anything, is

628
00:31:39,800 --> 00:31:42,000
Speaker 2: that that tax rate the highest tax rates are going on,

629
00:31:42,120 --> 00:31:44,200
Speaker 2: like the floor, it's not that far away from where

630
00:31:44,240 --> 00:31:46,480
Speaker 2: we currently are, whereas the ceiling. Like again, like you

631
00:31:46,520 --> 00:31:48,120
Speaker 2: look back to the forties, and I think the highest

632
00:31:48,320 --> 00:31:49,560
Speaker 2: tax bracket was like ninety two.

633
00:31:50,080 --> 00:31:52,080
Speaker 3: Yeah, do you have my book in front of you there?

634
00:31:52,240 --> 00:31:54,600
Speaker 3: If you don't, yeah, we do. Go to page twenty eight.

635
00:31:54,680 --> 00:31:57,760
Speaker 3: This is exactly why I put this chart on the page.

636
00:31:58,000 --> 00:31:59,760
Speaker 1: That's the table that I was referring to. Yeah, it

637
00:31:59,880 --> 00:32:01,600
Speaker 1: was nineteen nineteen.

638
00:32:01,400 --> 00:32:04,640
Speaker 3: Or thirteen, Well I did. I shaded in there on

639
00:32:04,760 --> 00:32:08,160
Speaker 3: page twenty eight. I give everybody the complete history of

640
00:32:08,320 --> 00:32:11,360
Speaker 3: tax rates from the Sixteenth Amendment in nineteen thirteen to

641
00:32:11,440 --> 00:32:14,480
Speaker 3: where we are now, and I shaded the years people

642
00:32:14,640 --> 00:32:17,320
Speaker 3: like me and many people listening to you now are

643
00:32:17,400 --> 00:32:20,240
Speaker 3: the baby boomers. The years the baby boomers were born.

644
00:32:20,320 --> 00:32:22,480
Speaker 3: And if you look at that nineteen forty six or

645
00:32:22,600 --> 00:32:26,440
Speaker 3: nineteen sixty four, the top federal tax rate, and I

646
00:32:26,560 --> 00:32:28,719
Speaker 3: did this as a frame of reference to show how

647
00:32:28,800 --> 00:32:31,800
Speaker 3: good we have it now. The top federal tax rate

648
00:32:31,920 --> 00:32:36,320
Speaker 3: for those years exceeded ninety nine zero percent for every

649
00:32:36,400 --> 00:32:40,200
Speaker 3: one of those years except the last year nineteen sixty four,

650
00:32:40,640 --> 00:32:45,640
Speaker 3: when the top federal tax rates dropped to only seventy

651
00:32:45,920 --> 00:32:50,520
Speaker 3: seven percent. Now, I'm told I wasn't there then. I

652
00:32:50,640 --> 00:32:53,440
Speaker 3: was ten years old then watching the Beatles on Ed Sullivan.

653
00:32:54,000 --> 00:32:56,200
Speaker 3: But I'm told by people who were there, they said,

654
00:32:56,240 --> 00:32:58,400
Speaker 3: when they dropped that tax rate, the top rate to

655
00:32:58,480 --> 00:33:01,800
Speaker 3: seventy seven percent. On seventy seven percent, the whole country

656
00:33:01,880 --> 00:33:05,600
Speaker 3: did a happy dance. That's more than double today's top rate.

657
00:33:05,920 --> 00:33:08,480
Speaker 3: So you got to look at for comparison. You know

658
00:33:09,640 --> 00:33:11,760
Speaker 3: who knows how bad it can get. So you can

659
00:33:11,880 --> 00:33:14,560
Speaker 3: lock in a zero percent rate for retirement with the

660
00:33:14,680 --> 00:33:18,040
Speaker 3: raw I know what, and control your rates right now.

661
00:33:18,600 --> 00:33:20,520
Speaker 1: If we're talking about smart planning, one of the things

662
00:33:20,520 --> 00:33:22,360
Speaker 1: we've talked about on the show, Ed we talk to

663
00:33:22,440 --> 00:33:24,800
Speaker 1: people who want to take like an extended leave of

664
00:33:24,840 --> 00:33:27,480
Speaker 1: absence from work, or they want to take maybe six months.

665
00:33:27,520 --> 00:33:29,400
Speaker 1: They want to quit their job for a while, become

666
00:33:29,480 --> 00:33:32,200
Speaker 1: a digital nomad or something like that, wander the earth

667
00:33:32,240 --> 00:33:33,160
Speaker 1: and guess what, Wait a.

668
00:33:33,160 --> 00:33:37,200
Speaker 3: Minute, stop, isn't that like an oxymoron? Digital nomad?

669
00:33:37,960 --> 00:33:40,680
Speaker 4: If you're always connected, where are you getting no service? Yeah?

670
00:33:40,720 --> 00:33:43,280
Speaker 3: Yeah, where are you getting service? I'm the Sahara desert.

671
00:33:43,480 --> 00:33:45,640
Speaker 1: Yeah that's that's good. Well, yeah, most of them go

672
00:33:45,640 --> 00:33:48,120
Speaker 1: to the Sahara. That sounds intense, But yeah, what are

673
00:33:48,120 --> 00:33:51,560
Speaker 1: your thoughts on maybe purposely reducing your income for a

674
00:33:51,640 --> 00:33:54,360
Speaker 1: time in order to make the most of conversions and

675
00:33:54,400 --> 00:33:55,520
Speaker 1: pay the least amountain tax.

676
00:33:55,840 --> 00:33:57,880
Speaker 3: You know, it's funny you mentioned that I had a

677
00:33:57,960 --> 00:34:01,080
Speaker 3: client that did that years ago. I remember I reference

678
00:34:01,520 --> 00:34:04,400
Speaker 3: when roths first came out. You couldn't convert if your

679
00:34:04,480 --> 00:34:08,759
Speaker 3: income was over one hundred thousand. I had clients. There

680
00:34:08,800 --> 00:34:12,160
Speaker 3: were two teachers, and they each took there and combined

681
00:34:12,200 --> 00:34:15,480
Speaker 3: their income from teaching was over one hundred thousand. But

682
00:34:15,560 --> 00:34:18,080
Speaker 3: the guy was so adamant about converting. He saw the

683
00:34:18,160 --> 00:34:20,800
Speaker 3: big picture right away, and he said him and his

684
00:34:20,920 --> 00:34:24,800
Speaker 3: wife took sabbaticals to keep their income under one hundred thousand.

685
00:34:25,200 --> 00:34:28,680
Speaker 3: They converted everything. At that point they were close to retirement.

686
00:34:28,760 --> 00:34:31,000
Speaker 3: They each had about five hundred thousand. This was back

687
00:34:31,040 --> 00:34:33,719
Speaker 3: in ninety eight when roths first came out, and they

688
00:34:33,840 --> 00:34:39,440
Speaker 3: converted a million dollars when they last I heard from them.

689
00:34:40,000 --> 00:34:42,320
Speaker 3: I think the husband died a few years ago. I

690
00:34:42,440 --> 00:34:45,160
Speaker 3: think that's when I heard from them. His wrath alone

691
00:34:45,840 --> 00:34:50,200
Speaker 3: was worth eight million dollars, all tax free. His teacher

692
00:34:50,360 --> 00:34:53,560
Speaker 3: friends laughed at him, you're taking a sabbatical so you

693
00:34:53,600 --> 00:34:57,920
Speaker 3: could pay extra taxes. They even saying, who's laughing now?

694
00:34:58,200 --> 00:35:01,200
Speaker 2: So you think that that's a fas strategy, then the ability,

695
00:35:01,200 --> 00:35:02,759
Speaker 2: because that's one of the things you have control over

696
00:35:02,880 --> 00:35:04,759
Speaker 2: is your own g inta. You're talking about how you

697
00:35:04,800 --> 00:35:06,640
Speaker 2: don't have control over future tax rates, but we do

698
00:35:06,760 --> 00:35:10,000
Speaker 2: have the ability to moderate maybe how much we're working

699
00:35:10,160 --> 00:35:13,000
Speaker 2: in the here and now, so that we can land

700
00:35:13,040 --> 00:35:14,680
Speaker 2: ourselves in better financial positions.

701
00:35:14,760 --> 00:35:17,600
Speaker 3: Well, you know that's not the same example I had

702
00:35:17,719 --> 00:35:20,719
Speaker 3: this guy. You know, the teachers have that built in sabbatical.

703
00:35:20,840 --> 00:35:22,880
Speaker 3: Your job is always there for you. I don't know

704
00:35:23,080 --> 00:35:25,279
Speaker 3: if it's that kind of job. Maybe, But would I

705
00:35:25,360 --> 00:35:27,600
Speaker 3: tell people leave their job in this market and then

706
00:35:27,880 --> 00:35:29,560
Speaker 3: what do they do when they decide they want to

707
00:35:29,600 --> 00:35:32,640
Speaker 3: work again? Maybe it's not available in this fast moving world.

708
00:35:32,880 --> 00:35:34,279
Speaker 1: Well, something else you have to think about when you're

709
00:35:34,280 --> 00:35:36,160
Speaker 1: doing a Roth conversion is paying the tax, and you

710
00:35:36,280 --> 00:35:38,160
Speaker 1: have to have the money on hand to pay ask, right,

711
00:35:38,440 --> 00:35:39,600
Speaker 1: So talk to me about that.

712
00:35:39,960 --> 00:35:43,440
Speaker 3: Well, yes, paying the tax. But here's the thing I

713
00:35:43,560 --> 00:35:46,520
Speaker 3: told you before. Tax rates are on sale. This tax

714
00:35:46,760 --> 00:35:50,520
Speaker 3: will be paid. Though it's not if, but when so

715
00:35:50,680 --> 00:35:53,640
Speaker 3: it will be paid. So it's just a matter should

716
00:35:53,680 --> 00:35:57,759
Speaker 3: we use today's money you have available, or wait till

717
00:35:58,000 --> 00:35:59,920
Speaker 3: maybe you have more money available, or don't do it

718
00:36:00,120 --> 00:36:03,200
Speaker 3: all and pay for it and retirement it will be paid.

719
00:36:03,360 --> 00:36:05,840
Speaker 3: I always say tax rates are on sale because people

720
00:36:06,080 --> 00:36:09,480
Speaker 3: love sales. Look at how they trample people on Black Friday.

721
00:36:09,520 --> 00:36:11,360
Speaker 3: How many people they could step over to get a

722
00:36:11,440 --> 00:36:15,280
Speaker 3: TV for ten dollars off or something. People love sales,

723
00:36:16,040 --> 00:36:19,000
Speaker 3: But unlike the thing in the store that's on sale.

724
00:36:19,080 --> 00:36:22,640
Speaker 3: Sorry to say, you don't actually have to buy it

725
00:36:23,239 --> 00:36:26,120
Speaker 3: with taxes you do. It's not if, but when so

726
00:36:26,239 --> 00:36:28,680
Speaker 3: you're going to pay for it. So my feeling is

727
00:36:28,880 --> 00:36:31,000
Speaker 3: whatever you could scrap together now, if you can't do it,

728
00:36:31,120 --> 00:36:33,239
Speaker 3: you can't do it. Nobody should go broke. I say

729
00:36:33,320 --> 00:36:35,120
Speaker 3: that in the book converting.

730
00:36:35,080 --> 00:36:39,440
Speaker 1: You made a case for why the government loves roths. Right,

731
00:36:40,120 --> 00:36:42,800
Speaker 1: how come they don't expand the income limits and just

732
00:36:42,880 --> 00:36:45,040
Speaker 1: allow everyone or anyone to contribute to a roth? Is

733
00:36:45,120 --> 00:36:47,359
Speaker 1: it that, Pete? I mean, I remember the Peter Teel

734
00:36:47,440 --> 00:36:50,439
Speaker 1: story coming out, you know, billions of dollars in his wroth.

735
00:36:50,560 --> 00:36:51,959
Speaker 1: Is that what they're trying to prevent?

736
00:36:52,200 --> 00:36:54,359
Speaker 3: Yeah, but that was a one off and he did

737
00:36:54,440 --> 00:36:56,920
Speaker 3: it legally. Yes, he has six billion or whatever in

738
00:36:57,000 --> 00:36:59,920
Speaker 3: a roth ira that he only paid a seventeen hundred

739
00:37:00,040 --> 00:37:04,040
Speaker 3: dollars for. He did it illegally, invested seventeen hundred dollars

740
00:37:04,160 --> 00:37:06,840
Speaker 3: in PayPal or whatever it was. But he did it

741
00:37:06,920 --> 00:37:10,040
Speaker 3: in his raw. So it's looking it's I think politically

742
00:37:10,120 --> 00:37:13,279
Speaker 3: it looks like a gift to the rich. But you're right,

743
00:37:13,640 --> 00:37:16,759
Speaker 3: if you can convert unlimited funds, why do they even

744
00:37:16,920 --> 00:37:19,279
Speaker 3: have an income limit for who can contribute? The whole

745
00:37:19,320 --> 00:37:22,120
Speaker 3: thing's ridiculous. Plus you can get around it by doing

746
00:37:22,160 --> 00:37:24,200
Speaker 3: a backdoor raw. So I don't see the point of it.

747
00:37:24,280 --> 00:37:24,880
Speaker 3: I agree with you.

748
00:37:25,280 --> 00:37:27,120
Speaker 2: Yeah, if you think about it for more than a second,

749
00:37:27,200 --> 00:37:29,800
Speaker 2: like it makes me think that there is the potential

750
00:37:30,000 --> 00:37:32,680
Speaker 2: for them to expand that because if they are thinking

751
00:37:32,760 --> 00:37:36,480
Speaker 2: more with that sort of myopic short termism mindset, right, Ed,

752
00:37:36,840 --> 00:37:38,120
Speaker 2: like that they are going to want to get their

753
00:37:38,160 --> 00:37:40,440
Speaker 2: hands on those dollars sooner rather than later. Continue to

754
00:37:40,520 --> 00:37:43,080
Speaker 2: expand it. It looks like that they're being beneficial to

755
00:37:43,320 --> 00:37:45,600
Speaker 2: some of the highway journers out there, when in fact,

756
00:37:45,640 --> 00:37:47,279
Speaker 2: what they're trying to do is, I guess, get their

757
00:37:47,320 --> 00:37:50,200
Speaker 2: hands on more money. And we've got more to discuss,

758
00:37:50,239 --> 00:37:53,120
Speaker 2: and you mentioned the Secure Act two point zero multiple times.

759
00:37:53,160 --> 00:37:55,200
Speaker 2: We want to talk about one of the implications of

760
00:37:55,320 --> 00:37:58,000
Speaker 2: that when it comes to five twenty nine accounts, as

761
00:37:58,040 --> 00:37:58,560
Speaker 2: well as more.

762
00:37:58,640 --> 00:38:08,640
Speaker 1: We'll get to all that right after this. Alright back,

763
00:38:08,640 --> 00:38:11,960
Speaker 1: we're still talking with Ed Slott talking about taxes and

764
00:38:12,239 --> 00:38:14,400
Speaker 1: you know, how to avoid them as much as possible

765
00:38:14,680 --> 00:38:16,920
Speaker 1: when it comes to our investments and keeping more of

766
00:38:17,000 --> 00:38:19,440
Speaker 1: the money that we make and that we save and

767
00:38:19,520 --> 00:38:21,560
Speaker 1: invest for ourselves for our own futures.

768
00:38:22,160 --> 00:38:22,200
Speaker 3: Ed.

769
00:38:22,280 --> 00:38:24,920
Speaker 1: What else you mentioned the Secure Act two point zero.

770
00:38:25,239 --> 00:38:28,680
Speaker 1: That was that created a lot of big changes in

771
00:38:28,880 --> 00:38:32,560
Speaker 1: retirement how we think about paying taxes in retirement require

772
00:38:32,560 --> 00:38:35,960
Speaker 1: minimum distributions. It also changed we mentioned this briefly five

773
00:38:36,040 --> 00:38:38,440
Speaker 1: twenty nine plans those got. That was one of those

774
00:38:38,440 --> 00:38:40,520
Speaker 1: things that Matt and I when we were asked questions

775
00:38:40,560 --> 00:38:43,680
Speaker 1: over the years, we weren't terribly keen on five twenty

776
00:38:43,760 --> 00:38:46,400
Speaker 1: nine because for this one specific purpose, and guess what

777
00:38:46,520 --> 00:38:48,600
Speaker 1: you should be making sure you're maxing out your own

778
00:38:48,640 --> 00:38:52,320
Speaker 1: retirement contributions before you even really consider five twenty nine plans.

779
00:38:52,560 --> 00:38:54,239
Speaker 1: But now five twenty nine plans that got a little

780
00:38:54,239 --> 00:38:57,440
Speaker 1: more flexible, they got better, and there's even wroth abilities

781
00:38:57,480 --> 00:38:58,920
Speaker 1: inside of that five to twenty nine plan. How do

782
00:38:59,000 --> 00:38:59,839
Speaker 1: you think about those now?

783
00:39:00,200 --> 00:39:03,879
Speaker 3: Well, there is, but it's misunderstood or people talking about

784
00:39:03,920 --> 00:39:06,320
Speaker 3: how great the provision is. I just said it before,

785
00:39:06,440 --> 00:39:10,200
Speaker 3: but it's highly limited. Here's the problem with five twenty nines.

786
00:39:10,200 --> 00:39:12,400
Speaker 3: And I agree with what you said is absolutely right.

787
00:39:12,440 --> 00:39:14,640
Speaker 3: I used to tell clients because they would always do it,

788
00:39:15,080 --> 00:39:16,920
Speaker 3: you know, oh we just had a baby. Oh he's

789
00:39:17,000 --> 00:39:20,759
Speaker 3: going to be the next whatever president, right, and he's

790
00:39:20,800 --> 00:39:22,640
Speaker 3: going to go to Harvard and this, But what if

791
00:39:22,680 --> 00:39:25,719
Speaker 3: he doesn't Now you have you know, we've seen situations

792
00:39:25,760 --> 00:39:28,600
Speaker 3: where people have accumulated one hundred two hundred thousand that

793
00:39:28,680 --> 00:39:31,880
Speaker 3: they can't even spend in these accounts. What's happening is

794
00:39:31,960 --> 00:39:35,239
Speaker 3: some parents, grandparents are actually going back to school just

795
00:39:35,320 --> 00:39:40,200
Speaker 3: to use the money taking meeting classes or whatever. So

796
00:39:40,400 --> 00:39:44,080
Speaker 3: there was a problem with people having accumulated too much,

797
00:39:44,440 --> 00:39:46,560
Speaker 3: and maybe the kid didn't go to college, or maybe

798
00:39:46,600 --> 00:39:49,759
Speaker 3: they got a scholarship and killed the whole deal for them.

799
00:39:49,840 --> 00:39:55,520
Speaker 3: Damn kids got a scholarship. Who knew anyway? So the

800
00:39:55,680 --> 00:39:58,560
Speaker 3: money was building up. So along comes this provision helps

801
00:39:58,640 --> 00:40:02,239
Speaker 3: a little moderately because it only has an overall limit

802
00:40:02,400 --> 00:40:04,840
Speaker 3: of thirty five thousand, which you can't even use in

803
00:40:04,960 --> 00:40:08,479
Speaker 3: one shot. You can use it based on the contribution limit.

804
00:40:08,600 --> 00:40:10,520
Speaker 3: Say if it's seven thousand a year, you could do

805
00:40:10,600 --> 00:40:13,280
Speaker 3: it over five years, and that's it helps a little

806
00:40:13,360 --> 00:40:19,920
Speaker 3: to trim down those five twenty nine balances. But there

807
00:40:19,960 --> 00:40:22,400
Speaker 3: are limits you had to have. The there's so many restrictions,

808
00:40:22,520 --> 00:40:24,440
Speaker 3: like everything in the tax code, they just can't give

809
00:40:24,480 --> 00:40:26,040
Speaker 3: you a clean rule. I know.

810
00:40:26,120 --> 00:40:27,880
Speaker 1: There's the five year old, the fifteen year rule.

811
00:40:27,960 --> 00:40:31,400
Speaker 3: It just I know all of that stuff. But it

812
00:40:31,480 --> 00:40:34,600
Speaker 3: could help if you have, you know, let's say a

813
00:40:34,640 --> 00:40:37,120
Speaker 3: moderate amount, and even if you have a large amount,

814
00:40:37,200 --> 00:40:39,720
Speaker 3: so over time you could knock off thirty five thousand.

815
00:40:40,120 --> 00:40:43,200
Speaker 3: But here's where it gets interesting. If you've set these

816
00:40:43,280 --> 00:40:46,480
Speaker 3: accounts up for say two three or four beneficiaries kids

817
00:40:46,600 --> 00:40:53,040
Speaker 3: or grandkids. That limit goes to each beneficiary. So now

818
00:40:53,160 --> 00:40:55,480
Speaker 3: it's starting to add up to some real money, So

819
00:40:55,920 --> 00:40:56,560
Speaker 3: that could help.

820
00:40:56,840 --> 00:40:59,680
Speaker 2: Do you see grandparents Do you see parents who have

821
00:41:00,040 --> 00:41:02,680
Speaker 2: over contributed to their five twenty nine accounts? And if so,

822
00:41:02,880 --> 00:41:04,719
Speaker 2: do you feel like that that's kind of an upper

823
00:41:04,800 --> 00:41:06,799
Speaker 2: echelon problem that those folks have or do you see

824
00:41:06,840 --> 00:41:08,360
Speaker 2: it being a little bit more widespread.

825
00:41:09,360 --> 00:41:11,239
Speaker 3: No, I think they do it across the board. I've

826
00:41:11,280 --> 00:41:14,040
Speaker 3: ran into somebody just recently had a new grandchild. First

827
00:41:14,080 --> 00:41:15,799
Speaker 3: thing you wanted to do is open a five twenty

828
00:41:15,960 --> 00:41:18,640
Speaker 3: nine because he wanted to do something. And no grandparent

829
00:41:18,680 --> 00:41:20,640
Speaker 3: wants to put money in the kid's own name, And

830
00:41:20,719 --> 00:41:22,399
Speaker 3: they don't want to give it to their kids because

831
00:41:22,400 --> 00:41:25,239
Speaker 3: they don't trust their kids to blow it. They'll think

832
00:41:25,280 --> 00:41:27,520
Speaker 3: they'll squander it. No, that's for the grandchild, not for you.

833
00:41:28,480 --> 00:41:29,600
Speaker 3: I already gave you enough.

834
00:41:29,760 --> 00:41:32,799
Speaker 1: Yeah, so when it comes to five twenty nine, if

835
00:41:32,800 --> 00:41:34,919
Speaker 1: you're trying to save money for you're a kid. We've

836
00:41:34,960 --> 00:41:37,040
Speaker 1: talked even on the show, and I'm sure you've talked

837
00:41:37,040 --> 00:41:40,760
Speaker 1: about getting money into a child's roth ira.

838
00:41:41,160 --> 00:41:43,160
Speaker 3: Yeah, So that's the way.

839
00:41:43,080 --> 00:41:45,359
Speaker 1: Superior to the five twenty nine, right, because you're you're

840
00:41:45,400 --> 00:41:48,080
Speaker 1: getting and yeah, what's your take on how to actually

841
00:41:48,120 --> 00:41:50,880
Speaker 1: facilitate that because the kid needs to have earned income.

842
00:41:50,960 --> 00:41:53,080
Speaker 1: But my goodness, if they're working in high school and

843
00:41:53,200 --> 00:41:54,880
Speaker 1: you can do some sort of mommy daddy match or

844
00:41:54,880 --> 00:41:57,960
Speaker 1: something like that helping incentivize them to invest your teaching

845
00:41:58,000 --> 00:41:59,879
Speaker 1: them and you're actually getting the dollars into the roth

846
00:42:00,400 --> 00:42:03,239
Speaker 1: early on? Is that the key you hit it you.

847
00:42:03,360 --> 00:42:06,920
Speaker 3: Preach into the choir. My daughter's in her mid thirties now,

848
00:42:07,000 --> 00:42:09,879
Speaker 3: my older daughter, and when she was fifteen, so it's

849
00:42:09,920 --> 00:42:13,399
Speaker 3: almost twenty years ago, she got her first summer job

850
00:42:13,480 --> 00:42:15,680
Speaker 3: at working at the library. She made three hundred and

851
00:42:15,680 --> 00:42:19,080
Speaker 3: fifty dollars for the summer. I immediately opened the wroth

852
00:42:19,200 --> 00:42:21,719
Speaker 3: for her, and I put in what I could put

853
00:42:21,760 --> 00:42:23,799
Speaker 3: in the three fifty because that was a limit up

854
00:42:23,840 --> 00:42:26,759
Speaker 3: to your earnings. And I was trying to explain to

855
00:42:26,840 --> 00:42:28,680
Speaker 3: her what I did, and she says, wait a minute,

856
00:42:28,719 --> 00:42:30,400
Speaker 3: So this is a good deal, she said, So I

857
00:42:30,560 --> 00:42:34,319
Speaker 3: make three fifty, I spend that money and you put

858
00:42:34,360 --> 00:42:37,279
Speaker 3: it back in and it grows tax free forever. And

859
00:42:37,400 --> 00:42:39,440
Speaker 3: I said, yes, while you're under.

860
00:42:39,280 --> 00:42:42,320
Speaker 1: This roof, pretty soon you're gonna have to do this

861
00:42:42,400 --> 00:42:43,000
Speaker 1: for yourself for.

862
00:42:43,000 --> 00:42:46,360
Speaker 3: The exact reasons you just said. To get them started,

863
00:42:46,800 --> 00:42:50,359
Speaker 3: to get the vehicle set up, it's more likely they'll

864
00:42:50,440 --> 00:42:54,440
Speaker 3: continue it, which she did. Now she has unbelievable amounts

865
00:42:54,480 --> 00:42:56,920
Speaker 3: in her raw through her job, a Roth rowing k

866
00:42:57,080 --> 00:43:00,680
Speaker 3: at work and all that stuff because she continued process

867
00:43:00,800 --> 00:43:03,840
Speaker 3: by me setting up the vehicle and you know, starting

868
00:43:04,600 --> 00:43:05,359
Speaker 3: the board for her.

869
00:43:05,880 --> 00:43:07,520
Speaker 2: What's great about that too that I love is that

870
00:43:07,640 --> 00:43:12,400
Speaker 2: it mirrors, it mimics the behavior of employers with four

871
00:43:12,480 --> 00:43:14,440
Speaker 2: one k is with the match right. It's not like

872
00:43:14,560 --> 00:43:16,799
Speaker 2: it's just a free hand on money, Like you can't

873
00:43:16,800 --> 00:43:19,160
Speaker 2: stick that money in there unless they actually earn it. Instead,

874
00:43:19,239 --> 00:43:20,960
Speaker 2: they have to earn it, right, Yeah, there's something there

875
00:43:21,000 --> 00:43:23,359
Speaker 2: that where they just mirrors real life, which I love.

876
00:43:23,719 --> 00:43:26,160
Speaker 3: But you tied it into the five twenty nine. The

877
00:43:26,360 --> 00:43:29,759
Speaker 3: roth Ira is a much more flexible vehicle. You can

878
00:43:29,920 --> 00:43:33,160
Speaker 3: use it for anything. Remember the actual Most people don't

879
00:43:33,239 --> 00:43:35,680
Speaker 3: understand this because they know about the five years and

880
00:43:35,760 --> 00:43:39,200
Speaker 3: fifty nine and a half till it's tax free. But

881
00:43:40,040 --> 00:43:46,160
Speaker 3: your actual Wroth conversion Roth contributions, your original Wroth contributions,

882
00:43:46,239 --> 00:43:49,560
Speaker 3: the seven thousand hour or whatever it is, annually. Your

883
00:43:49,680 --> 00:43:54,920
Speaker 3: actual WROTH contributions can be withdraw drawn any time for

884
00:43:55,200 --> 00:43:59,520
Speaker 3: any reason, tax and penalty free. So it could double

885
00:43:59,600 --> 00:44:02,919
Speaker 3: as an education vehicle. It could double for anything. Let's

886
00:44:02,920 --> 00:44:04,560
Speaker 3: say you don't go to school, but you want to

887
00:44:04,560 --> 00:44:07,239
Speaker 3: start a business. It can work for anything. It's meant

888
00:44:07,320 --> 00:44:10,200
Speaker 3: for retirement, but it's way more flexible with almost no

889
00:44:10,440 --> 00:44:13,040
Speaker 3: rules than a five twenty nine.

890
00:44:13,400 --> 00:44:16,000
Speaker 1: Great for early retirement too, because when you there's a

891
00:44:16,040 --> 00:44:17,640
Speaker 1: lot of people listening to this podcast and they're keen

892
00:44:17,719 --> 00:44:20,279
Speaker 1: to retire, like let's say or mid late forties or

893
00:44:20,280 --> 00:44:21,480
Speaker 1: something like that, and it's like, well, cool, you can

894
00:44:21,560 --> 00:44:24,960
Speaker 1: live off those contributions for a while while the rest

895
00:44:25,000 --> 00:44:27,319
Speaker 1: of your wrath continues to grow. Bridge that gap. Feel

896
00:44:27,320 --> 00:44:28,280
Speaker 1: a little bit there, exactly?

897
00:44:28,400 --> 00:44:30,719
Speaker 2: Yeah, so Ed, Yeah, we're harping on the roth ira

898
00:44:31,000 --> 00:44:33,520
Speaker 2: how that's essentially the most it's just the most tax

899
00:44:33,520 --> 00:44:36,000
Speaker 2: efficient way to go ahead and pay those taxes. And

900
00:44:36,160 --> 00:44:37,880
Speaker 2: we're kind of talking about kids now as well. What

901
00:44:38,040 --> 00:44:40,360
Speaker 2: is I don't know, might be opening out can of

902
00:44:40,400 --> 00:44:42,480
Speaker 2: worms here, but what is the most tax efficient way

903
00:44:42,960 --> 00:44:46,719
Speaker 2: to pass wealth along to kids for them to realize

904
00:44:46,920 --> 00:44:49,359
Speaker 2: some of the wealth that you've been able to create

905
00:44:49,400 --> 00:44:50,320
Speaker 2: within your own lifetime.

906
00:44:50,480 --> 00:44:53,000
Speaker 3: I can tell you the worst way. What's that using

907
00:44:53,040 --> 00:44:56,800
Speaker 3: an IRA, that's the worst way. What Congress did We

908
00:44:56,920 --> 00:44:59,320
Speaker 3: were talking about Secure two point zero, but what and

909
00:44:59,440 --> 00:45:01,759
Speaker 3: that was not the big game changer. It created a

910
00:45:01,800 --> 00:45:04,040
Speaker 3: lot of bits and good things that we talked about,

911
00:45:04,440 --> 00:45:07,440
Speaker 3: but nothing earth shattering or game changing. It was the

912
00:45:07,560 --> 00:45:11,319
Speaker 3: original Secure Act that changed the playing field. We used

913
00:45:11,320 --> 00:45:14,319
Speaker 3: to recommend the iras, or it used to be called

914
00:45:14,600 --> 00:45:16,400
Speaker 3: the stretch IRA used to be able to have the

915
00:45:16,440 --> 00:45:18,800
Speaker 3: stretch IRA, the kids could go out and defer and

916
00:45:18,960 --> 00:45:23,399
Speaker 3: extend distributions over that lifetime twenty thirty, fifty seventy years

917
00:45:23,480 --> 00:45:26,120
Speaker 3: if you were a ten year old. Congress didn't like

918
00:45:26,239 --> 00:45:29,200
Speaker 3: that another revenue grabbed. They needed money, and they said,

919
00:45:29,520 --> 00:45:32,920
Speaker 3: we believe iras should be for the people who earned it,

920
00:45:33,000 --> 00:45:36,680
Speaker 3: the retirees and their spouses, and not as a wealth

921
00:45:36,800 --> 00:45:39,920
Speaker 3: transfer or state planning vehicle for the kids who never

922
00:45:40,160 --> 00:45:43,120
Speaker 3: earned it. So we're going to kill that stretch IRA deal,

923
00:45:43,200 --> 00:45:46,040
Speaker 3: which they did, and replace it with generally a ten

924
00:45:46,160 --> 00:45:48,480
Speaker 3: year rule, which means all the income has to come

925
00:45:48,520 --> 00:45:50,439
Speaker 3: out by the end of the tenth year after death.

926
00:45:50,560 --> 00:45:53,880
Speaker 3: That's a tax disaster waiting to happen. So what they

927
00:45:54,080 --> 00:45:58,920
Speaker 3: did is they actually made iras the worst possible asset

928
00:45:59,040 --> 00:46:02,280
Speaker 3: to use to transfer for wealth or for estate planning purposes.

929
00:46:02,680 --> 00:46:08,080
Speaker 3: But indirectly, they made other vehicles much better, much more attractive,

930
00:46:08,200 --> 00:46:11,440
Speaker 3: like roth iras we talked about. In other words, they

931
00:46:11,760 --> 00:46:15,960
Speaker 3: downgraded iras, but upgraded tax free vehicles like that I

932
00:46:16,040 --> 00:46:20,080
Speaker 3: mentioned in my book, like roth iras and life insurance. Now,

933
00:46:20,160 --> 00:46:22,719
Speaker 3: I don't sell life insurance. I'm a tax advisor. I

934
00:46:22,760 --> 00:46:26,560
Speaker 3: don't sell stocks, bonds, funds, insurance, annuities, none of that stuff.

935
00:46:26,920 --> 00:46:29,200
Speaker 3: But as a tax advisor, and I have a whole

936
00:46:29,320 --> 00:46:32,480
Speaker 3: chapter in my book on this on the called the

937
00:46:32,640 --> 00:46:35,800
Speaker 3: Power of Life insurance, and I'm talking about permanent cash

938
00:46:35,960 --> 00:46:40,600
Speaker 3: value similar to an ir On a roth ira conversion,

939
00:46:40,680 --> 00:46:43,520
Speaker 3: you take money out, the whole premise is the same,

940
00:46:43,840 --> 00:46:47,120
Speaker 3: use the lower brackets, fill up those lower brackets, and

941
00:46:47,239 --> 00:46:49,640
Speaker 3: you can put money in the row through conversion or

942
00:46:49,800 --> 00:46:54,000
Speaker 3: build up in a life insurance policy that can grow

943
00:46:54,160 --> 00:46:56,759
Speaker 3: cash value that you could actually tap into if you

944
00:46:56,840 --> 00:46:59,839
Speaker 3: wanted during your lifetime. But it's growing income tax free.

945
00:47:00,280 --> 00:47:02,400
Speaker 3: You don't have to deal with any of these rules.

946
00:47:02,440 --> 00:47:06,240
Speaker 3: There's a lot more certainty that the insurance tax benefit

947
00:47:06,320 --> 00:47:10,280
Speaker 3: the tax exemption for life insurance. The income tax exemption

948
00:47:10,440 --> 00:47:12,719
Speaker 3: is the single biggest benefit in the tax code and

949
00:47:12,800 --> 00:47:16,320
Speaker 3: not used nearly enough. Plus, you can leave your children

950
00:47:16,440 --> 00:47:18,920
Speaker 3: a boatload of money, a lot more than you can

951
00:47:19,000 --> 00:47:21,160
Speaker 3: win an IRA or roth ira, and it's all income

952
00:47:21,239 --> 00:47:21,799
Speaker 3: tax free.

953
00:47:22,239 --> 00:47:24,919
Speaker 2: Is this something that at a certain limits, like let's

954
00:47:24,920 --> 00:47:27,840
Speaker 2: say there's a certain dollar amount, at which point that

955
00:47:27,960 --> 00:47:30,040
Speaker 2: that begins to make a bit more sense, or.

956
00:47:30,120 --> 00:47:31,960
Speaker 1: For low income owners, that doesn't make a whole lot

957
00:47:31,960 --> 00:47:32,239
Speaker 1: of sense.

958
00:47:32,320 --> 00:47:34,440
Speaker 3: Right, Well, you do what you can, like everything. You

959
00:47:34,480 --> 00:47:37,000
Speaker 3: don't go broke doing anything. This is still about you.

960
00:47:37,400 --> 00:47:39,680
Speaker 3: You don't go broke providing for your kids. They're gonna

961
00:47:39,680 --> 00:47:42,400
Speaker 3: get plenty anyway, So forget about that. That's the biggest

962
00:47:42,480 --> 00:47:44,759
Speaker 3: mistake people make worrying about their kids. They don't even

963
00:47:44,800 --> 00:47:48,560
Speaker 3: care about them that much anyway. When I tell people

964
00:47:48,600 --> 00:47:50,799
Speaker 3: to do planning, well, what's in it for me? They say,

965
00:47:51,040 --> 00:47:53,520
Speaker 3: that's how you should be thinking. What's in it for you?

966
00:47:53,600 --> 00:47:55,240
Speaker 3: They're gonna get plenty anyways.

967
00:47:55,320 --> 00:47:56,359
Speaker 1: You're love, not money.

968
00:47:56,600 --> 00:48:00,239
Speaker 3: Yeah, they're gonna get it anyway. Why drive yourself crazy? Well,

969
00:48:00,280 --> 00:48:02,040
Speaker 3: I can't eat this week because I want my kids

970
00:48:02,080 --> 00:48:03,880
Speaker 3: to have a million dollars of life insurance.

971
00:48:03,960 --> 00:48:06,440
Speaker 1: Yep, I love it all right, Ed dude, thank you

972
00:48:06,560 --> 00:48:09,000
Speaker 1: so much for joining us today on the podcast. We

973
00:48:09,040 --> 00:48:11,120
Speaker 1: really appreciate it. Where can our listeners find out more

974
00:48:11,440 --> 00:48:14,160
Speaker 1: about your new book, The Retirement Savings Time Bomb Takes

975
00:48:14,200 --> 00:48:15,160
Speaker 1: Louder Well.

976
00:48:15,040 --> 00:48:17,759
Speaker 3: You can go to Amazon or type my name Ed

977
00:48:17,880 --> 00:48:21,600
Speaker 3: Slot into Google, or go to our website www dot

978
00:48:21,800 --> 00:48:24,560
Speaker 3: I r A help I ra h e l p

979
00:48:24,880 --> 00:48:28,640
Speaker 3: IRA help dot com, where there's lots of free resources.

980
00:48:28,719 --> 00:48:33,240
Speaker 3: We put out several blogs on current events, current tax changes,

981
00:48:33,320 --> 00:48:36,000
Speaker 3: current ideas, current planning. I think we do three or

982
00:48:36,000 --> 00:48:39,439
Speaker 3: four of them every week. We answer questions there for free.

983
00:48:39,600 --> 00:48:42,360
Speaker 3: You'll see it part so much in the way of

984
00:48:42,440 --> 00:48:45,520
Speaker 3: free resources. And by the way, these are things you

985
00:48:45,640 --> 00:48:48,640
Speaker 3: can The answers you'll get, the information you get are

986
00:48:48,680 --> 00:48:52,040
Speaker 3: from our company, which is what we do. We were

987
00:48:52,120 --> 00:48:54,120
Speaker 3: experts in this area, so you can get the right

988
00:48:54,200 --> 00:48:55,279
Speaker 3: answer the first time.

989
00:48:55,719 --> 00:48:56,920
Speaker 1: I love it. That's a lot.

990
00:48:57,000 --> 00:48:58,239
Speaker 4: Thank you so much for joining us today.

991
00:48:58,440 --> 00:49:00,840
Speaker 3: Thank you for having me on so talking about this

992
00:49:01,040 --> 00:49:03,480
Speaker 3: great opportunity to build wealth and keep.

993
00:49:03,400 --> 00:49:06,200
Speaker 1: It all Right, Matt, you gotta love that Ed Slot energy.

994
00:49:06,840 --> 00:49:08,960
Speaker 1: Whatever he had for breakfast, I want to start eating

995
00:49:08,960 --> 00:49:13,640
Speaker 1: even fired up. Maybe it's the pizza. They do say

996
00:49:13,640 --> 00:49:15,400
Speaker 1: it's the water in New York specifically that makes it

997
00:49:15,440 --> 00:49:17,320
Speaker 1: so good. But yeah, I guess so it's also what

998
00:49:17,880 --> 00:49:21,320
Speaker 1: flows and a slots things. Oh all, gosh, what aspect

999
00:49:21,360 --> 00:49:23,360
Speaker 1: of our conversation today stood out to you? Man? So

1000
00:49:23,640 --> 00:49:26,080
Speaker 1: I think my big takeaway is certainty is better than uncertainty,

1001
00:49:26,480 --> 00:49:30,279
Speaker 1: and I love the certainty that comes with you know,

1002
00:49:30,400 --> 00:49:33,080
Speaker 1: he basically said tax rates are on sale, and if

1003
00:49:33,160 --> 00:49:33,920
Speaker 1: that's the case.

1004
00:49:33,719 --> 00:49:36,520
Speaker 2: I liked how he positioned that, which is again, immediately

1005
00:49:36,560 --> 00:49:38,520
Speaker 2: while my mind went to mortgage rates because it's just like,

1006
00:49:38,560 --> 00:49:41,399
Speaker 2: that's something in the recent number of years that we've

1007
00:49:41,400 --> 00:49:43,560
Speaker 2: been able to experience firsthand, the fact that rates have

1008
00:49:43,640 --> 00:49:45,359
Speaker 2: been so low. You start getting used to the idea

1009
00:49:45,400 --> 00:49:47,279
Speaker 2: that rates are that low, and then things change and

1010
00:49:47,360 --> 00:49:49,360
Speaker 2: you quickly realize, oh wow, no, that was a special

1011
00:49:49,360 --> 00:49:50,520
Speaker 2: period of time that you're living.

1012
00:49:50,400 --> 00:49:52,160
Speaker 1: Through, and when you're going to pay the taxman no

1013
00:49:52,239 --> 00:49:54,000
Speaker 1: matter what at some point, why not do it on sale?

1014
00:49:54,160 --> 00:49:57,360
Speaker 1: And why not have the certainty that comes alongside of

1015
00:49:57,960 --> 00:50:01,480
Speaker 1: having that done away with this guillotine hanging over your head.

1016
00:50:01,480 --> 00:50:03,640
Speaker 1: If you have like massive amounts of money in traditional

1017
00:50:03,719 --> 00:50:05,640
Speaker 1: funds for on K's and I rays if that's the

1018
00:50:05,680 --> 00:50:07,359
Speaker 1: case for you. We talked about smart ways to make

1019
00:50:07,360 --> 00:50:11,160
Speaker 1: commersions to get that money into Roth vehicles. But for

1020
00:50:11,280 --> 00:50:13,879
Speaker 1: a lot of our listeners, not especially younger listeners, Roth

1021
00:50:14,000 --> 00:50:16,040
Speaker 1: Roth from the beginning. And then you don't have the

1022
00:50:16,120 --> 00:50:19,120
Speaker 1: uncertainty hanging over your head. You're not worried about what's

1023
00:50:19,120 --> 00:50:20,719
Speaker 1: going to happen in the future with tax rates because

1024
00:50:20,719 --> 00:50:21,879
Speaker 1: you kind of already solved that problem.

1025
00:50:22,040 --> 00:50:22,560
Speaker 4: Yeah, totally.

1026
00:50:22,600 --> 00:50:23,759
Speaker 2: One of the things he said, and this will be

1027
00:50:23,840 --> 00:50:25,520
Speaker 2: my big takeaway, was that he said that it is

1028
00:50:25,640 --> 00:50:27,920
Speaker 2: not if, but when it is that you have to

1029
00:50:27,960 --> 00:50:30,880
Speaker 2: pay taxes on that money, and so you can go

1030
00:50:30,880 --> 00:50:33,759
Speaker 2: ahead and take that tax break. Now what feels like

1031
00:50:33,800 --> 00:50:36,120
Speaker 2: a tax break, but no, at some point you are

1032
00:50:36,160 --> 00:50:38,839
Speaker 2: going to end up owning that money. And I don't

1033
00:50:38,840 --> 00:50:41,160
Speaker 2: know for I feel like recently, Joel, you and I

1034
00:50:41,320 --> 00:50:43,160
Speaker 2: we've been more like, oh, yeah, it makes sense to

1035
00:50:43,280 --> 00:50:45,759
Speaker 2: tax diversify. And I do think that there are individuals,

1036
00:50:46,200 --> 00:50:48,600
Speaker 2: especially if you are in some very high earning years

1037
00:50:48,640 --> 00:50:50,880
Speaker 2: and you know, man, there's a good chance I may

1038
00:50:50,920 --> 00:50:53,879
Speaker 2: not make this this much in the future years or if.

1039
00:50:53,760 --> 00:50:55,279
Speaker 1: You like, we've got them all fooled. Right now and

1040
00:50:55,360 --> 00:50:56,440
Speaker 1: at some point my pay is going.

1041
00:50:56,400 --> 00:50:56,799
Speaker 3: To go down.

1042
00:50:57,280 --> 00:50:59,080
Speaker 2: Yes, Well, if you know that, you are going to

1043
00:50:59,200 --> 00:51:01,640
Speaker 2: enter into a coast fire period of life where you

1044
00:51:01,800 --> 00:51:03,920
Speaker 2: truly are gonna earn less. And that's one of the

1045
00:51:04,000 --> 00:51:06,520
Speaker 2: things he pointed out is that you have control over that.

1046
00:51:07,080 --> 00:51:08,799
Speaker 2: You don't have control over the market, So don't worry

1047
00:51:08,800 --> 00:51:10,840
Speaker 2: about timing the market and trying to pay less and

1048
00:51:10,920 --> 00:51:12,839
Speaker 2: making that conversion when the market's down. That's not something

1049
00:51:12,880 --> 00:51:14,479
Speaker 2: you have control over. But you do have a little

1050
00:51:14,480 --> 00:51:16,640
Speaker 2: bit more control over how much it is that you're

1051
00:51:16,680 --> 00:51:17,239
Speaker 2: making every year.

1052
00:51:17,320 --> 00:51:20,759
Speaker 1: Yeah, And he talked too, really really wisely about how

1053
00:51:20,920 --> 00:51:24,160
Speaker 1: so many people he works with that's their assumption, like, hey,

1054
00:51:24,400 --> 00:51:26,200
Speaker 1: I'm gonna I'm gonna make less in retirement, Like I'm

1055
00:51:26,239 --> 00:51:28,040
Speaker 1: gonna pay less then, so I'm gonna stick with the

1056
00:51:28,120 --> 00:51:30,560
Speaker 1: traditional route, and that there's so many people who find

1057
00:51:30,600 --> 00:51:32,959
Speaker 1: themselves not in that position. And it's funny, I didn't

1058
00:51:32,960 --> 00:51:35,120
Speaker 1: really think about this, but it's true because you're losing

1059
00:51:35,160 --> 00:51:37,600
Speaker 1: out on certain deductions or a fewer tax benefits at

1060
00:51:37,600 --> 00:51:39,560
Speaker 1: that point in time, and so that those are the

1061
00:51:39,640 --> 00:51:42,040
Speaker 1: kind of things that maybe aren't balancing out the other

1062
00:51:42,080 --> 00:51:45,359
Speaker 1: side of your tax ledger, meaning just another check mark

1063
00:51:45,400 --> 00:51:46,360
Speaker 1: in favor of roths.

1064
00:51:46,600 --> 00:51:49,000
Speaker 2: Yeah, but I will say I do think that the

1065
00:51:49,120 --> 00:51:51,080
Speaker 2: majority of his clients and the folks that he used

1066
00:51:51,120 --> 00:51:52,479
Speaker 2: to work with, at least it sounds like he doesn't

1067
00:51:52,480 --> 00:51:55,359
Speaker 2: take on personal clients anymore. We're folks that are hard

1068
00:51:55,440 --> 00:51:58,239
Speaker 2: charging like him, or they're gonna continue to earn and

1069
00:51:58,360 --> 00:51:58,879
Speaker 2: earn and earn.

1070
00:51:58,880 --> 00:52:00,120
Speaker 4: Their net worth is gonna.

1071
00:52:00,080 --> 00:52:03,120
Speaker 2: Continue to grow at a rapid clip versus and I

1072
00:52:03,160 --> 00:52:05,440
Speaker 2: don't know, maybe I'm kind of picturing myself in this category,

1073
00:52:05,600 --> 00:52:09,560
Speaker 2: just like a just a meek, humble but just like

1074
00:52:09,640 --> 00:52:13,320
Speaker 2: somebody who may not necessarily continue to be hard charging

1075
00:52:13,600 --> 00:52:16,440
Speaker 2: for the next twenty years as opposed to hitting that

1076
00:52:16,640 --> 00:52:19,920
Speaker 2: coast fire attitude, which in my mind has as much

1077
00:52:20,000 --> 00:52:21,920
Speaker 2: to do with spending some money as it does with

1078
00:52:22,320 --> 00:52:24,440
Speaker 2: working a little bit less, because like when you have

1079
00:52:24,640 --> 00:52:27,480
Speaker 2: the ability to have more freedom over your time, I

1080
00:52:27,520 --> 00:52:30,200
Speaker 2: think that's something that more and more folks, especially our listeners,

1081
00:52:30,480 --> 00:52:32,680
Speaker 2: are wise en up to where they're realizing I don't

1082
00:52:32,760 --> 00:52:36,279
Speaker 2: have to necessarily have this nose to the grindstone, which

1083
00:52:36,360 --> 00:52:38,719
Speaker 2: I will say is work that I love, right, But

1084
00:52:38,880 --> 00:52:40,600
Speaker 2: at the same time, there are other paths out there.

1085
00:52:40,640 --> 00:52:43,640
Speaker 2: And I think more folks are starting to realize some

1086
00:52:43,719 --> 00:52:45,440
Speaker 2: of those other paths. I think that's the difference between

1087
00:52:45,520 --> 00:52:49,560
Speaker 2: some of the financial independence folks versus folks of an

1088
00:52:49,600 --> 00:52:52,280
Speaker 2: older generation who aren't used to sort of that mindset.

1089
00:52:52,280 --> 00:52:54,800
Speaker 1: I would listen to this episode right next to listening

1090
00:52:54,880 --> 00:52:56,880
Speaker 1: going back and listening to our episode with Sean mulaney

1091
00:52:57,120 --> 00:52:59,960
Speaker 1: because they have very different takes, but they're both really

1092
00:53:00,080 --> 00:53:02,680
Speaker 1: really smart guys. Yeah, and you might find and I

1093
00:53:02,719 --> 00:53:04,960
Speaker 1: think you and I fall somewhere in the middle of

1094
00:53:05,080 --> 00:53:08,680
Speaker 1: their camp. You know, where Sean is less all about

1095
00:53:08,719 --> 00:53:10,480
Speaker 1: the roth. He's more about take the tax break. Now

1096
00:53:11,000 --> 00:53:13,480
Speaker 1: Ed is saying pay the taxman and take the taxes

1097
00:53:13,520 --> 00:53:15,440
Speaker 1: on sale. And I think there's a happy medium to

1098
00:53:15,480 --> 00:53:17,560
Speaker 1: be struck here between the two. But maybe listen to

1099
00:53:17,600 --> 00:53:20,680
Speaker 1: both and then kind of choose your own adventure and

1100
00:53:20,760 --> 00:53:22,799
Speaker 1: make it up. And again, so much too comes down

1101
00:53:22,840 --> 00:53:26,920
Speaker 1: to your specific personal financial situation, your income right now,

1102
00:53:27,239 --> 00:53:29,640
Speaker 1: where you are in your earning years, but especially for

1103
00:53:30,160 --> 00:53:31,959
Speaker 1: younger folks. I mean, when I look back, I didn't

1104
00:53:32,000 --> 00:53:34,600
Speaker 1: have access to a wroth for a one K when

1105
00:53:34,800 --> 00:53:37,080
Speaker 1: I was in my early working yearsmount. I didn't have

1106
00:53:37,200 --> 00:53:39,600
Speaker 1: one at all until like literally my last year of work,

1107
00:53:39,640 --> 00:53:41,560
Speaker 1: and it was it's such a bummer because I would

1108
00:53:41,560 --> 00:53:43,239
Speaker 1: have been socking money away all those years, and that

1109
00:53:43,320 --> 00:53:46,399
Speaker 1: you've been able to sock a decade's worth of contributions,

1110
00:53:46,640 --> 00:53:49,000
Speaker 1: that's yeah, zero tax. So if most of our listeners

1111
00:53:49,040 --> 00:53:51,680
Speaker 1: in their twenties early thirties, I mean, the wroth is money,

1112
00:53:51,760 --> 00:53:54,319
Speaker 1: but further on down the road, you got to make

1113
00:53:54,360 --> 00:53:57,520
Speaker 1: that decision for yourself, and it's I don't know. Ed

1114
00:53:57,640 --> 00:54:01,160
Speaker 1: makes a compelling case, and I appreciate his enthusiasm and

1115
00:54:01,719 --> 00:54:04,680
Speaker 1: his information because there's a lot to be learned right there. Absolutely, yeah,

1116
00:54:04,680 --> 00:54:07,960
Speaker 1: we would highly recommend his book, The Retirement Savings. Time

1117
00:54:08,040 --> 00:54:11,400
Speaker 1: Bomb ticks louder because he goes seriously in depth and

1118
00:54:11,560 --> 00:54:13,400
Speaker 1: there's just, honestly, there's just so much in there that

1119
00:54:13,440 --> 00:54:16,520
Speaker 1: we we couldn't cover. It would have been crazy long,

1120
00:54:16,719 --> 00:54:18,680
Speaker 1: like a five hour long episode, but also would have

1121
00:54:18,719 --> 00:54:20,360
Speaker 1: gotten like so nitty ready people would have been like,

1122
00:54:20,440 --> 00:54:22,279
Speaker 1: I'm turning out. Well, it just depends on your again,

1123
00:54:22,320 --> 00:54:25,000
Speaker 1: like you said, your specific situation, but uh, okay. Our

1124
00:54:25,120 --> 00:54:27,360
Speaker 1: beer that you and I enjoyed during this episode was

1125
00:54:27,920 --> 00:54:30,920
Speaker 1: be Low. This is a beer by Halfway Crooks. It's

1126
00:54:31,000 --> 00:54:32,960
Speaker 1: a table beer with age tops.

1127
00:54:33,040 --> 00:54:33,520
Speaker 4: What'd you think?

1128
00:54:33,840 --> 00:54:37,000
Speaker 1: I liked it. It's super minerally, it's got like some

1129
00:54:37,160 --> 00:54:39,319
Speaker 1: hot presence, but it's not because age Tops. I guess

1130
00:54:39,360 --> 00:54:41,840
Speaker 1: it doesn't have that like hot bite necessarily, but like

1131
00:54:42,000 --> 00:54:44,839
Speaker 1: there's there's some hot essence going on in this beer.

1132
00:54:45,200 --> 00:54:48,600
Speaker 1: So I really enjoyed it. It's it's a perfect beer

1133
00:54:49,200 --> 00:54:52,320
Speaker 1: to have with dinner, I think right, because he's the

1134
00:54:52,400 --> 00:54:56,399
Speaker 1: table beer. It's not an overpowering exactly flavor profile, which

1135
00:54:56,480 --> 00:54:58,480
Speaker 1: is which is like, I don't know, the older I get,

1136
00:54:58,520 --> 00:55:00,440
Speaker 1: the more craft beers I've had. I was talking to

1137
00:55:00,880 --> 00:55:02,600
Speaker 1: with someone about this the other day. I've had all

1138
00:55:02,600 --> 00:55:04,600
Speaker 1: the IPAs now, sorry, it doesn't matter how good your

1139
00:55:04,640 --> 00:55:07,760
Speaker 1: IPA is. I probably had something similar, which is just fortunate.

1140
00:55:07,800 --> 00:55:09,719
Speaker 1: We've had great beers over the years. But this is

1141
00:55:09,760 --> 00:55:11,600
Speaker 1: the kind of beer I'm getting more and more into

1142
00:55:11,800 --> 00:55:14,480
Speaker 1: something a little chill, a little more relaxed, and then

1143
00:55:14,520 --> 00:55:17,480
Speaker 1: you can kind of have with your food because you

1144
00:55:17,520 --> 00:55:20,279
Speaker 1: don't want some sort of triple IPA with most of

1145
00:55:20,360 --> 00:55:21,800
Speaker 1: the dinners that you're eating or anything like this. This

1146
00:55:21,880 --> 00:55:23,160
Speaker 1: is a nice balanced beer. Yeah.

1147
00:55:23,320 --> 00:55:27,240
Speaker 2: Plus the if you haven't checked out the Schwag Halfway

1148
00:55:27,280 --> 00:55:30,879
Speaker 2: Crooks merchandise. They've got the absolute best in the game.

1149
00:55:30,920 --> 00:55:32,319
Speaker 1: I'm literally wearing a shirt right now.

1150
00:55:32,719 --> 00:55:35,480
Speaker 2: You are literally wearing others, but this can. I love

1151
00:55:35,560 --> 00:55:37,839
Speaker 2: the pink with the yellow, like the neon and the green.

1152
00:55:37,880 --> 00:55:40,400
Speaker 2: It makes you think of like some of the different kits,

1153
00:55:40,520 --> 00:55:43,480
Speaker 2: some of the different jerseys that the guys wear, like

1154
00:55:43,560 --> 00:55:46,120
Speaker 2: on the Twitter France or whatever. Yeah, it's got European

1155
00:55:46,200 --> 00:55:47,879
Speaker 2: biking colors all the way for sure.

1156
00:55:48,000 --> 00:55:48,680
Speaker 4: I can't get enough.

1157
00:55:48,680 --> 00:55:50,480
Speaker 2: I would totally I would totally get this. If they

1158
00:55:50,560 --> 00:55:52,920
Speaker 2: converted this cannar into a shirt, I would totally wear

1159
00:55:52,960 --> 00:55:55,560
Speaker 2: this on pink. They might check out Halfway Crooks beer

1160
00:55:55,680 --> 00:55:57,920
Speaker 2: if you haven't one of our favorites here in Atlanta.

1161
00:55:57,920 --> 00:56:00,759
Speaker 2: And by the way, Velo it means bike, so that's

1162
00:56:00,760 --> 00:56:02,839
Speaker 2: another reason to love it as well, and also why

1163
00:56:02,880 --> 00:56:04,759
Speaker 2: it's conjures up some of those biking themes.

1164
00:56:04,800 --> 00:56:07,400
Speaker 1: If you haven't listened for long, we like bike, that's right,

1165
00:56:07,480 --> 00:56:07,879
Speaker 1: But uh.

1166
00:56:07,920 --> 00:56:09,200
Speaker 4: That's gonna be it for this episode.

1167
00:56:09,239 --> 00:56:11,000
Speaker 2: We'll have shout outs up and on the website at

1168
00:56:11,040 --> 00:56:13,879
Speaker 2: howdomoney dot com. And yeah, we'll link to our last

1169
00:56:13,920 --> 00:56:18,040
Speaker 2: conversation with Sean mulaney as well. If you are nerding

1170
00:56:18,040 --> 00:56:20,000
Speaker 2: out on the taxes, but that's gonna be it, buddy,

1171
00:56:20,040 --> 00:56:22,919
Speaker 2: until next time. Best friends out, Best friends out,