Ep. 190 – Looking Back – Taxes – Retirement Planning – Annuities

We’ve come to the end of the year! It was a fun-filled year with quite an unpredictable market, but we made it.

In this episode of the Secure Your Retirement podcast, we will cover three main topics we’ve covered throughout the year. We discuss the episodes focusing on tax planning, retirement planning, and annuities. Listen in to learn why you should ensure your financial advisor and CPA are connected and working together as a team.

In this episode, find out:

  • The best resources for taxes – episode 185 with Steve Jarvis to get you thinking about taxes.
  • Episode 163 – Steve Jarvis on his advice on Roth conversions.
  • Episodes 184 & 158 – Connecting financial and tax planning and not thinking about them separately.
  • Episode 161 – Required Minimum Distributions (RMDs) and Qualified Charity Distributions (QCDs) strategies.
  • Episode 182 –Three questions to ask yourself about your retirement planning.
  • Episode 180 – How to navigate the federal reserves and inflation.
  • Episode 177 – Explaining the idea around Medicare part B & D surcharges that we can have (IRMAA).  
  • Episode 157 – Detailing the retirement bucket strategy and how we help our clients.
  • Episode 146 – How to have a risk-adjusted portfolio and how we do it.
  • Episode 153 – Bonds versus bond alternatives concept and the conversation around it.
  • Episode 187 – Fixed annuities- best rates in over a decade.

Tweetable Quotes:

  • “No matter what your situation is and what you might be doing, make sure your financial advisor and CPA/tax preparer are working together.”– Radon Stancil
  • “Fixed index annuities have the ability to provide the guarantees that the market cannot.”– Murs Tariq


If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.

Here’ the full transcript:

Radon Stancil:               Are you thinking where can I find all the information when it comes to tax planning, retirement planning, annuities, all of these things? Well, we have talked about them throughout the year on our many different episodes that we’ve put out. And in this particular recording, you’ll see I have Morgan with me and Murs and we go through where to find them. And we tell you all the episodes so you know exactly how to do it because here’s our goal. We want you to live to and through retirement without having to worry. We want you to have peace of mind. We want it to be secure. So make sure you listen to this episode, because that’s the goal.

Murs Tariq:                   To learn more about how to secure your retirement and all the different elements you need to know, please subscribe to our channel and hit the bell so you’ll be notified when we release episodes every Monday. We have helped hundreds of our clients gain clarity and get on the path to a great retirement. Now it’s your turn. Let’s dive in.

Radon Stancil:               We are excited to have you with us today for our, well, we’re going to maybe have another name, but we’re going to call it our wine down still. But let me just tell you, there’s a lot of value that you’re going to get in this episode. We’re going to cover some topics that have been super popular throughout the year. This is our last wine down for 2022. So you’re listening to this on the last week of the year, and we wanted to be able to provide you some resources. So when it comes to taxes, retirement planning, annuities, where is it that you can go and find these really, really quick for what we did in 2022? If you think about it, we have put hours and hours of material out there and we want to make sure that you can just go find what you might be looking for. It will be a blog article written on this. So you’ll have all this in a written form as well. But Morgan, before we get into that stuff, could you kind of explain what’s different about our wine down?

Morgan Dunn:              Yes. Today we are drinking Welch’s finest from the apple orchards of Maine. It’s very fruit forward, I would say almost apple forward with some effervescence. It is sparkling non-alcoholic cider. So we are venturing on a challenge called 75 hard. So for 75 days we are not drinking alcohol. We’re working out two 45-minute sessions a day, drinking a gallon of water, bunch of other fun stuff. But this is part of our challenge and we’re sticking to it. So we will have two wine downs that will not involve actual wine.

Murs Tariq:                   Sparkling cider, by the way, is basically apple juice as, but we’re adults, so we call it sparkling cider.

Morgan Dunn:              And we put it in these fancy glasses.

Murs Tariq:                   Yeah. So these two are doing this pretty difficult challenge that, and me being the good coworker and good friend that I am, I’m also going to have sparkling cider with them today on this wine down.

Morgan Dunn:              So supportive.

Radon Stancil:               All right, Morgan, can you kind of lay out for us, give us an outline of our questions and then let’s get started?

Morgan Dunn:              Yeah, we’re going to cover three main topics that we’ve covered throughout the year. The first one being, what are the best resources for taxes? What did we explain about retirement planning throughout the year in our podcasts? And then also, what if I need to understand more about annuities has been a popular question.

Radon Stancil:               All right, let’s start our first one.

Morgan Dunn:              All right. Murs, what are the best resources for taxes? Which podcasts?

Murs Tariq:                   So we have a whole list of them, and we did something like this last year too, at the end of last year. It ended up being a nice little table of contents or a good little reference guide for everyone, and we got really good feedback on it. So that’s kind of what we’re doing today again, but I’ll start off with episode 185. So pretty recent, we did a interview with Steven Jarvis, who is a CPA that’s been on our podcast a few different times. His whole concept is really around year round tax planning, proactive tax planning, and not just waiting until it’s time to file your tax return in April.

                                    And so he goes over some concepts around things that you want to be thinking about when it comes to the end of the year, things like donor advised funds, Roth conversions, making sure you’ve taken your RMDs if you’re in RMD age. Also, what goes hand in hand with that is qualified charitable distributions that can help out your tax situations. So really, really good episode. Kind of laying out some of that. And as we approach here at the end of 2022, while we’re talking 2022 strategies, a lot of those apply year by year. Just the numbers move a little bit. So really good episode to get you thinking about what you should be doing tax-wise there.

Radon Stancil:               Since you’re talking about Steven Jarvis, you want to go ahead and hit up his mid-year one as well, just to kind of tie those together?

Murs Tariq:                   Yeah, the mid-year one was episode 163. And again, similar concept that we discussed there. That was much more heavier around this idea of do I need to do a Roth conversion? We get that question all the time, and the answer is not always yes, but the answer is yes to the question of should I consider a Roth conversion? We think everyone should consider, and he kind of lays out things that he’s looking for when he’s advising his clients as far as what makes sense and what doesn’t make sense and expectations around the reasoning behind a Roth conversion. And there’s a bunch of other nice little tax pieces in there, but that was the bulk of that episode, episode 163.

Radon Stancil:               All right, so I’m going to cover a couple of episodes. Episode 184 and 158. 184 was called tax planning should be a part of my retirement plan. And then episode 158 was tax planning versus tax preparation. All of those are around this idea of you should, to stop thinking about things from a financial plan and then also over here, a tax plan. Those two things really need to be tied together. And so in those two episodes, we talk a lot about this idea of how connected they are. So no matter what your situation is and what you might be doing, make sure that your financial advisor and your CPA or your tax preparer are working together. They should not be like, I’m going and meeting with my tax guy or person and I’m meeting with my financial advisor and they’re telling me two different things, or they’re telling me things individually, they should be working together as a team.

                                    Here at Peace of Mind Wealth Management, Murs and I are very, very big about that. And so we have some CPAs that we do work with, with our clients, but we are connected throughout the entire process. So when we email the CPA or the CPA emails the client, we are completely connected. Everybody knows exactly what’s going on because taxes could affect your retirement plan as big as a downturn in the market. So don’t allow those two major parts of your plan not be connected, and that’s the main issue. So episode 184, and 158.

Murs Tariq:                   I was just going to throw in the last one, which I think is really good that I want to highlight before we leave the best podcast episodes around taxes is episode 161, and it’s all around required minimum distributions and qualified charitable distributions. Two acronyms there, RMDs and QCDs. If you’re above the age 70 and a half, which is where you could qualify for qualified charitable distributions, or you’re 72, which is the RMD age, you really want to take a look at this episode as you’re approaching those ages and understand the strategies around them, understand the requirements around them and the rules around them because there are penalties if we mess those up. Essentially the government, because we have put a lot of money into tax deferred accounts like IRAs and 401ks, once you hit a certain age, 72 and onwards, you’re required to start drawing on them. So we go deep dive into how that works and things you want to think about there. So that’s it for taxes, episode 185, 84, 163, 161, and 158. All really good listens.

Radon Stancil:               It was one episode 184.

Morgan Dunn:              And then we had a lot about retirement planning. What are some of the things that we explained around that?

Radon Stancil:               Yeah, so one of the episodes that I kind of look back at and think was super powerful is episode 182, which was called Three Questions to Ask Yourself About Retirement. And this was not really about the financial side of things. We covered topics like what do I want to do in retirement? Murs and I, as we work with individuals, a lot of the people that come and work with us are about five to 10 years out from retirement. They’re planning for it, and then they go into retirement. So a good fun part of what we do is we get to be there when that person says, guess what I just did? I just gave in my notice and I am retiring on this date, whatever that date might be. And we get to see that excitement.

                                    It’s exciting, we’re all happy. And then we get to meet with them six months later and a year later, and I go, how was it? And they go, it was great, but now I need to know what else I’m going to do. I’ve kind of done all the little projects around the house. We traveled a little bit. I got to have something to do. And so we talk about that, how to think that through, how to plan about those types of things. So I think that’s a really, really great episode.

Murs Tariq:                   Yeah. Another really good one around retirement planning is episode 180, and that one circled around the Federal Reserve and inflation. And we’ve been getting questions like this all year, really around inflation and what the Fed is doing. And the episode is not saying that we have any answers. The episode is kind of really walking through questions that we get. So one is the cost of living is going up. We’re feeling it at the gas pump, we’re feeling it at the grocery stores in particular. And how do we navigate this as we approach retirement, as we live through retirement? And what are the things that we do? As you know how we talk about a retirement plan, it must be actively managed just like we believe your investments should be.

                                    And so what is nice about that is nothing is set in stone. The plan that we write today is going to change and we know it’s going to change, and we want to monitor that actively. And so that’s what that episode is all about. Being able to navigate situations like high inflation or low returns in the market, or really anything that you can think of, our plans work really well, and they’re nimble enough to do that. So a good listen there and you’ll learn a lot.

Radon Stancil:               All right. Mine is going to be episode 177. This one became a big topic of conversation and is growing. It’s all about IRMAA, and if you’re trying to spell Irma, it’s I-M, I’m sorry, I-R-M-A-A. And that’s an abbreviation or a way to explain this idea around our Medicare part B and D surcharges that we could have if we’re making too much money when we take Medicare. It’s really, really important. In fact, in this episode, we talked about how those different tiers worked. I will tell you we’re going to be doing another episode in 2023 to update the numbers. I also will tell you, last year we came out and we had a flow chart that kind of was a checklist to help you think through all of the 2022 numbers. Well, now we have a 2023 flow chart that has been updated.

                                    We are going to be sending that out to all of our clients and individuals that are a part of our world in our January newsletter, we’ll have that as an insert in there. But if you don’t get that and you want that, let us know. And you can call the office, ask for Morgan or Laura, and they’ll be able to send you out a PDF of that 2023 IRMAA flow chart. It just kind of helps you know all those numbers because it can get really massive if we don’t do some planning.

Murs Tariq:                   Episode 157 was really good. It was all about the retirement bucket strategy. We talked to our clients about this all the time, and all of our clients have some version of this when it comes to their overall investment strategy. And on a high level, and the episode goes into it in much more detail, but on a high level, the way this works is that we’ve come up with buckets that are going to help things, for one, make things simple when it comes to understanding your investment strategy. And two, it makes things work really nicely together. So basically there’s three buckets, a cash bucket, income and safety bucket, and then a growth bucket. The cash is basically money at the bank that you would essentially call your emergency fund or money that you want to be able to get your hands on very quickly and easily.

                                    We don’t want to overfill that bucket, but we also want to be comfortable. The safety and income bucket is there to do exactly what it says, provide safety and serve as a offset of market risk so it’s not correlated to the stock market. And it also has the ability to provide us with the income that we’re going to need throughout retirement. The beauty of this bucket is that it’s not correlated to the market. So take a year like 2022 when the stock market has been down as much as 25%. We’re not worried about that. Everyone’s always worried about losing money, but we’re not worried about that in this bucket because this bucket cannot lose money and it’s going to be able to provide us the income. Because a lot of times when you’re down 20 and 25%, that is the worst time to be drawing on an asset.

                                    And so not having to do that, utilizing the safety income bucket instead works very well for the plan, which now allows bucket number three to do its job, which is the growth bucket. The growth bucket is there for growth. It’s a stock market type of investment. It’s going to have volatility, it’s going to have risk to it, but ideally it’s going to have the best rate of return over time. And the only way it can have the best rate of return is if we’re not bugging it every single month for a monthly withdrawal. And so you put those three buckets together and we believe that turns into a very sound investment strategy. And like I said, all of our clients utilize it in some way, shape, or form. So if you’re really interested in how we do that, obviously the episode’s going to give you a lot as well, we’re happy to hop on the phone with you and understand it more.

Radon Stancil:               All right, the final one for this section is episode 146, which really kind of goes to that growth bucket that Murs was just talking about, and that is having a risk adjusted portfolio. You can do that a couple different ways, but the way we do that is we do it really based on your view of how much money. In all essence, if you lost a certain amount of money, at what point would you start losing sleep? And that’s going to be different for every person, but no matter what that is, we need to have a portfolio designed to meet that threshold and we walk you through that. If that’s ever a discussion you want to have, like Murs said, we’re glad to hop on the phone and have a call with you to go through that.

Morgan Dunn:              All right. And then the final section is around annuities. What if you need to learn more or understand more about annuities?

Murs Tariq:                   So one of my favorites was episode 153. This is, we title this Bonds versus Bond Alternatives. And the picture I want to just lay out for you here to look at is traditionally the investment strategy that has worked for a retiree is a very common phrase. One is a 60, 40 portfolio, 60% equity, 40% bonds. The only reason anyone ever really puts money into bonds is to have safety when the equity side of the market has issues. So if you have a market that is crumbling, typically the 40% is going to protect you in some way, shape or form. That’s what bonds are supposed to do, and that’s what everyone believes, that they’re safe. Well enter in a rising interest rate environment, enter in inflation and what the Fed has been doing over the last year and bonds what are supposed to be safe for us and provide us that level of protection, have not done that at all.

                                    The AGG, which is aggregate bond index, kind of like the S&P, but the bond side of that world, the AGG has been down as much as 15% in 2022, which is a number that is unheard of. And so what I’m getting at here is bonds are not providing the protection that they used to. And so there has to be some type of pivot or some type of change in strategy and thinking. And that really comes into now the bond alternative conversation that all of our clients have had this conversation. They understand the concept and it works really well for a lot of reasons, but the most effective is that it works to offset the risk of the equity markets, the stock market, and better than bonds are going to do. Why? Because fixed index annuities, they have the ability to provide some guarantees that the market cannot.

                                    The biggest guarantee it provides is that it cannot lose your principle. So you put in $100,000, it cannot lose that, guaranteed by the insurance company. And so that is, in all essence what a bond alternative is in our eyes. It’s going to make a bond like return, and it’s not going to have the risk of what a bond does have today and is going to have for quite some time. So really good episode. If you’re worried about how your bond portfolio has acted this year and last year and for the years to come, definitely take a look at that. And again, that’s a big conversation that we should be having.

Radon Stancil:               All right, our final episode that we’ll remind you of is a recent one called it’s 187, and we titled it Fixed Annuities Best Rates in Over a Decade. I’ve been using fixed annuities of some format now for over 15 years, and I’m going to tell you the rates we have right now are the best rates we’ve had that entire time. Why? Well we go back 15 years. We’ve had low interest rates, lowering interest rates, zero interest rates, hardly any money that could be out there to be earned, and that made the environment of the annuities tougher. Still pretty good. I mean, still very decent returns, but now we are in an interest rate climbing rate, so it has made the returns or potential returns on these fixed index annuities and fixed annuities, the plain fixed annuities, much, much better. And so if you have ever been hesitant about looking at them, I think now if you ever are thinking about considering, now is the best time to ever consider them in over a decade.

                                    So make sure you listen to that episode as we go through that a little bit. It’s not a very long episode, but it’ll definitely help you get your thoughts together. Anyway, well, that’s it. We wanted to kind of recap some of those resources again. Again, I want to remind you all of this is going to be on a blog article on our website, pomwealth.net. Go to the blog page. You’ll see the recap there. Certainly, we have had a fun 2022 with the podcast. It’s been great to be able to share this with you. The markets and the world has given us a little bit of issue, but ultimately, we’re all still here. Everybody’s still being able to have a good retirement plan. That’s our focus. And we will talk to you next year.

                                    We hope this video has given you some confidence and clarity as you plan for a worry-free life in retirement. But what else do you need? We have created a complimentary video course called Three Keys To Secure Your Retirement. This video walks you through step by step, what you need to do to get ready for retirement. You can also check out our podcast called Secure Your Retirement. You can subscribe below.

Murs Tariq:                   For more retirement tips, check out these videos. Also, if you find them valuable, please subscribe to our YouTube channel and give us a like.