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Thanks for the comment, we'll make sure more related content gets scheduled for future videos. It is a hard topic to get into a lot of specific detail in over a mass market video though. So much of it just depends on your particular situation. We'll typically build a few scenarios in our planning software to see how your plan can handle different levels of expenses, and options you are presented with as part of a premium increase. There is no "right" answer that is good for everyone. Some need the coverage, some don't, and some could benefit from a reduced benefit.

Thanks for watching and for the comment. There is a chart comparing SCHD vs SCHB around the 13:50 time in the video if that is helpful. SCHD just pulls the top 100 stocks out of SCHB based on some criteria (dividend growth, free cash flow, yield, etc). So first of all I’d just say realize that SCHD has about 2,300 less holdings than SCHB, so you’re losing out on diversification for sure. And just like the other funds, you give up a lot of tech exposure in exchange for banks, health care, and consumer staples. SCHB is 30% tech, SCHD is 8%. SCHD is not bad by any means. But you should just recognize that it is very different from a broad based index fund.

@ thank you and that was very helpful

I think the purpose of the video was to highlight several tax issues, but not necessarily to explain each one in depth. As a fellow viewer, I will agree that in a longer video the explanations of Social Security and related tax rates could have been a lot clearer. I'm not a tax preparer, but I will offer a few clarifications of this incredibly complex topic based on my own research. At 14:50, "combined income" thresholds (which include SS benefits) were discussed, as well as taxability rates of 0%, 50%, and 85%. (These percentages apply to the amount of combined income that is taxed, rather than the tax rates on combined income.) The actual percentage of SS benefits that will be taxed can be on a continuum starting at 0% and maxing out at 85%. The taxable amount of "combined income" ends up on Line 6b of your 1040. The "combined income" definition at 15:50 is given verbally as Adjusted Gross Income + 50% of your SS benefits. What is left unstated is that once you reach the point where 85% of your SS benefits are included on Line 6b of your 1040, the "combined income" calculation ceases to matter. We use 85% of SS benefits instead, which is lower than "combined income" at higher levels of income. Stated another way, "combined income" only matters for lower levels of income. The key to understanding the next slide at 16:10 is to recognize that until you hit the point where 85% of your SS benefits are taxed, an IRA withdrawal will increase both Line 4b and Line 6b on your 1040. Once you reach the point where 85% of your SS benefits are being taxed, the IRA contribution is only included on Line 4b. Let's say you were at the 22% marginal rate and that you haven't reached the point where 85% of your SS benefits are being taxed. Assuming you make an extra $1,000 IRA withdrawal, the same $1,000 gets included on both Line 4b and Line 6b. Since Line 6b is capped at 85% of SS benefits, the marginal rate is 22% for Line 4b, and .85*22% for Line 6b, for a total marginal rate of 40.7%. Since people with lower levels of income often are not taxed at all on SS benefits, the double inclusion of income in the "combined income" figure seems to be the IRS's sneaky way of catching up from the 0% rate on your way to the 85% maximum inclusion of SS benefits. I also believe the Y axis actually is the marginal rate. See the text above the graph, which says "Tax Impact of the Next $1,000 in Ordinary Income." (That's another way of saying "marginal rate.") Apparently, the narrator misspoke. There's a lot of information in the video, so it's easy to miss a few details. The purple part of the marginal rate goes away once the full 85% of SS benefits are being taxes, as there is no more catching up from the original 0% rate. Once you get past the purple part, the marginal rate behaves predictably. Sorry for the long message, but there was a lot to unpack. If you are interested, there are in-depth videos on other channels dedicated to describing the "tax torpedo."

@ thanks for taking the time for your in-depth response on this. This type of graph is used a lot, and I think this may have been the first video that I’ve seen that clarified that the X axis is incremental income and the that the Y axis was explained. I believe you are correct that the Y axis is the Marginal tax rate and that the speaker misspoke. Thanks again!

Thanks for watching and for the question. Bill7320's answer/comment was right on. I did not say that right when I referred to that chart as the effective tax rate. It is the marginal rate on any incremental income.

The poster @TotalReturns is correct that the brackets at 7:53 are the 2024 Tax Year Brackets. Here are the 2025 Brackets: 2025 Brackets: Single Filer / Married Filing Jointly 10%: $0 to $11,925 / $0 to $23,850 12%: $11,926 to $48,475 / $23,851 to $96,950 22%: $48,476 to $103,350 / $96,951 to $206,700 24%: $103,351 to $197,300 / $206,701 to $394,600 32%: $197,301 to 250,525 / $394,601 to $501,050 35%: $250,526 to $626,350 / $501,051 to $751,600 37%: $626,351 or more/ $751,601 or more

Oh no! Thanks for letting us know. We’ll plan on unlisting this video and record it with correct tax brackets shown. Thanks for watching and for the comment.

Thanks Jason. Hope all is well with you. Let me know if you’d like to catch up sometime!

@@ArnoldMoteWealthManagement Hey Quinn, would love to catch up sometime. My schedule is probably more flexible than yours...so if you had a time/date let me know. Keep up the great work.

As a money market fund, it would be incredibly rare for this fund to decline in value. Of course the trade off for that stability is lower expected returns. This fund makes for a good cash alternative if you are in a highly tax bracket, but for money that can remain invested for longer periods, even short term muni bonds (like an ETF SUB or something similar) would usually be preferred.

@@ArnoldMoteWealthManagement Thank you for your reply. It seems that for the longer term VMSXX performs better and I am also a Vanguard loyalist

Thank you for watching and for the comment. Glad you found it helpful!

Thanks for watching and for the comments pointing out the Vanguard fund, which looks to be a great option for high income households in Ohio to consider.

The IRMAA surcharge will last for 1 year. It may be worth checking if you can appeal by chance: arnoldmotewealthmanagement.com/appealing-medicare-irmaa-surcharge/

Thank you for watching and for the comment. Hope you found it helpful,

Thank you so much for the comment and for watching,

Thanks for watching and for the comment!

Thanks for watching and for the comment. You are right, there is a lot to consider with tax loss harvesting!

Thanks for watching and for the comment. We can’t make tax policy, but can certainly do our best to reduce the impacts!

After age 65 you can withdraw from an HSA for any expense and there will not be a tax penalty. However, if proceeds from the account are not used for qualified medical expenses, the distributions will be taxable (similar to any withdrawals from a traditional IRA). There is no income limit for HSA contributions like there is with a Roth IRA, but you must be enrolled in a high deductible plan in order to contribute. Thanks for watching and for the questions!

Hi, thanks for watching and for the question. Capital gains that are excluded from a home sale ($250k/$500k) do not count towards IRMAA. Those gains will be adjusted on Form 8949 and never make it to your Schedule D or 1040, and therefore not included in your MAGI.

Thanks for watching and for the question. That strategy used to be an option, but is no longer allowed. Now you can not just claim spousal benefit while delaying your own. In order to receive spousal benefits, you must first claim on your own benefits.

Thanks for watching and for the question. Yes, pension income will count toward IRMAA.

Thanks for watching and for the comments. Regarding the tax savings from not taking early RMDs. We did not mention that because QLACs are not useful purely as a tax reduction tool. You are right they defer (and that can be valuable under specific circumstances), but in general, they are not useful solely for tax reducing your lifetime tax bill. I think this article is the best detailed description of this: www.kitces.com/blog/why-a-qlac-in-an-ira-is-a-terrible-way-to-defer-the-required-minimum-distribution-rmd-obligation/ Regarding MYGAs, while they are certainly not the worst, we just feel like there are many other options to get a similar return that doesn't require locking up money in an annuity. Again, for specific circumstances they could be very valuable, but not for the broad market. Thanks again for watching and for the comments!

Thanks for watching and for the question. For a non qualified annuity, the earnings that are withdrawn before 59.5 would be subject to a penalty, but not the original principal. Hope that helps, but let us know if you have any other questions!

Thanks for watching and for the question. While there is certainly nothing wrong with maxing Roth 401k, I think the correct answer will depend on current and expected future tax rates. HSA contributions from Payroll save you income tax and FICA, are you in position where giving up that reduction in taxes makes sense? If so, then that is a great strategy. If you are at peak earnings in a high tax bracket it may not. Hope that helps! Thanks again for watching.

I see, yes that's right. I am trying to get a handle or optimize on this weird one-time hsa roll.

Hi, are there any particular questions you still have?

Glad it was helpful!

Thanks for watching and for the question. Have you already purchased a QLAC? If so, the original terms of the contract will remain. If you are considering a new QLAC purchase, you can elect any age up to age 85. Does that help answer your question?

Yes, certainly a great option. Thanks for watching and for the comment.

Certainly! Thanks for watching and for the comment.

Thanks for watching and for the question. You would not owe NY tax in the situation.

@@ArnoldMoteWealthManagement ty,

Thanks for watching and for the comment. Sure, we simplified JEPI and certainly did not mean to imply the fund is managed exactly the same. But do you not agree that the same general limitations of the strategy apply? JEPI tilts a little more towards growth than income compared to QYLD, but the same principal applies - It will protect on the downside and cost you on the upside. If every year is like 2022, JEPI will be great. If every year is like the last year, not so much. Over the last 12 months total return for JEPI is +9% and even Vanguard's basic 60/40 fund VBIAX is +12.5%. You run into the same issues, though perhaps less than QYLD.

Thank you for watching and for the comment. Can certainly take some work to make sure you find the right investment. Not always an obvious answer! Thanks again,

Thank you for watching and for the question. In general ETFs are going to be more tax efficient than mutual funds, so look there first. And yes, there are advantages to using multiple funds in a brokerage account to increase tax loss harvesting potential. So instead of a total market fund like VTSAX (or VTI - the ETF equivalent), look for a large cap fund, a large cap value, a small cap fund, etc to recreate that one broad fund. Thanks again for watching and for the comment.

Thanks for watching and for the question. The interest from the bond funds would be taxed as income. There would also be some capital gains when the funds mature.

Thank you for watching and for the comment!

Hi Bobby, thanks for watching and for the question. You are only able to use $3,000 (or $1,500 if filing taxes as single) in carry forward losses each year. If you have $20,000 in losses that carried forward from last year for example, and you recognized $10,000 in long term capital gains this year, you would get taxed on $7,000 (or $8,500) of those gains and your carried forward losses would be reduced to $17,000 for next year. You will not be able to use more than $3,000 of carried forward losses. Hope that helps answer your question.

Hello, thanks for watching and for the comment. The alternative is just total return investing and selling assets as needed. The other funds we showed, QYLD for example, have the same philosophy as JEPI, they just have longer history. You can see the long term cost of this strategy compared to a total return approach. Also worth noting since you mentioned after-tax returns. JEPI, and other covered call funds, are relatively tax inefficient because of their high turnover and since the derivative income is taxed as income, not qualified dividends. Owning and selling appreciated stock leaves you with qualified dividends and long term capital gains which creates a much lower tax liability.

Thank you for the comment. Happy to hear it was helpful!

Hi Kevin, thank you for watching and for the question. You are technically able to roll money out of a SIMPLE and into a 401(k) or IRA. If going the solo 401(k) route, ensure whatever provider you use will allow incoming rollovers first, because it can vary. But, rolling to an IRA and then converting will work too. Lastly, have you participated in the SIMPLE IRA for at least 2 years? SIMPLE IRAs can have significant penalties if money with withdrawn or rolled out before 2 years.

Thanks for watching and for the comment! There's no secret sauce when it comes to similar investments. Finding a fund that follows a different benchmark is the general guidance. It doesn't help that the IRS is very vague with any specifics of what counts. So do what you are comfortable with.

No there is not a par value for these funds or guaranteed liquidation price. Just keep an eye at the yield to maturity of the underlying holdings for the best estimate of your total return. Also, there is plenty of history of these funds by now, and fund pages still have data up for funds that liquidated in 2023. So look at those and you should get a sense of how these funds perform at the end.

It will depend on your risk tolerance and desired spending in retirement. There’s no right answer. But I will say not having Social Security is a good reason to look for another source of fixed income. You have the flexibility to think about how much fixed income you need and match that with TIAA traditional.

@@ArnoldMoteWealthManagement than you

Because there are many variables that decide the answer, we recommend using this questionnaire from the IRS to find your answer: www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

Hello, thanks for watching and for the question. The webinar compares JEPI to SPY because the S&P 500 is the benchmark listed on the fund's factsheet and the funds says it's goal is " Seeks to deliver a significant portion of the returns associated with the S&P 500 Index." I see the argument that JEPI's strategy should have lower volatility than the standard index, but investors should at the very least have an idea of that long term cost associated with achieving that lower volatility. And then there is a second example with QYLD that is compared to QQQ for the same reason, since both are benchmarked to the NASDAQ-100. What would be a better benchmark for these funds in your opinion?

@@ArnoldMoteWealthManagement Thanks for the reply. I think a more appropriate benchmark is a 60/40 portfolio (VOO/BND). I see JEPI as an income tool so apply a monthly withdrawal. You do this for a living so please correct me if I’m thinking about it wrong. I’ll also add these type of funds are not for everyone especially the single stock covered call funds.

@@analyticsx3 Expecting returns closer to a 60/40 seems much more realistic for sure. JEPI's history is short, but has done better than a 60/40 over the last 3 years. Though that includes one of the worst years in history for BND... For some longer history - With just a quick look at QYLD vs a portfolio of 60% QQQ and 40% BND shows pretty significant underperformance by QYLD over a 10-year period. In general we favor a total return approach to investing rather than trying to match up income need by dividends or interest. Anytime you add expenses, derivatives, frequent trading, etc it tends to impact long term returns. There's rarely a wrong answer when it comes to investing, so I'd just say if you are comfortable with the prospect of less volatility but lower returns than it is ok. Just don't think that JEPI is some magic investment that does everything.

@@ArnoldMoteWealthManagement your absolutely right. I think long term there’s too much upside loss. From what options traders have said when interest rates come down more premium is generated on selling puts rather than calls (possibly anecdotal). If that’s true the yield and appeal for these funds will come down. The timing of the funds popularity and rates hikes could be coincidental but it’s sufficient as a short term income instrument.

Hi Sabb, thanks for watching and for the comment. Doing backdoor Roth contributions is certainly superior. This video is more targeted to those who have a large pre-tax IRA balance and so can not to backdoor Roth contributions. If you have $0 in a traditional IRA, then yes getting that into a Roth is a better long term solution. Thanks for making that point clear since we did not. If you have $500k in a traditional IRA and income that makes you ineligible to make ordinary Roth contributions, it is a whole different decision, and one that could favor brokerage account contributions for some.

Hi Chuck, thanks for watching and for the comment. The table does show drawdowns, so sorry for the confusion if I said returns in the webinar and it implied something else. Though I don't think that negates the argument - An asset that is supposed to be such a strong store of value shouldn't drop 25% in a banking crisis and have 40+ year periods where investors have not had returns that matched inflation. As far as Bridgewater and owning gold. First, I would say the average retiree shouldn't (and can't) invest like a multi-billion dollar hedge fund like Bridgewater. There's a lot more going on there than buying and storing gold bars in a vault for his clients. I can find other investors, with more assets than Bridgewater, that don't own gold, too. In general, the average retiree trying to build a portfolio off the strategy of a billionaire is probably a recipe for disaster. We did a longer webinar just on gold investing here, in case it is helpful: ruclips.net/video/DVE8jS7duSk/видео.html

The principles of modern portfolio theory apply regardless of account size. Diversifiers like gold can help retirees through stagflationary periods. On its own, gold isn't a great asset, but it is a great diversifier to a portfolio of stocks and bonds. Energy stocks can fill a similar purpose to gold, since they have also done well in inflationary periods. However, they have a variety of regulatory risks, and the last 10 years have been something of a lost decade for them. All assets have their downsides. Even "risk free" treasuries are 35% down from their all time highs.

We are strong proponents of using low cost, diversified index funds and spending time on what you can control and have an impact on like tax planning, tax efficient withdrawal strategies, etc. We have a video here that gets into it a little deeper on the active vs index topic: ruclips.net/video/hnqUoWeBHeU/видео.html

Hello thanks for watching and for the comment! Sorry for the confusion, in the video we were just implying that since many people do these contribution each year (and then need to file the form when withdrawing each year as well), that it seems to be a regular occurrence for most. But you are correct that if you just make a one-off contribution you will just need to file the form once for that contribution. Thanks!

Hello, thanks for watching and for the question. From our experience, contacting your Social Security office for questions on your benefits is usually the best way since they can pull up your account and actual amounts. With the info provided we can't give you an exact answer on the benefit you'd receive, but since you are working and earning about $50,000, it is true that your benefit will be reduced by about $1,150 per month. The recommendation you received is subjective, and is not based on a hard limit. There is no absolute maximum limit, it would just depend on your spousal benefit and your income to know what amount of benefit is withheld. If you are in doubt and were not happy with your prior experience with contact SSA, you can always call again to talk with someone else who can pull up your account and give a second opinion.

Hello, thanks for watching and for the question. We do not deal with options with our clients, so probably best to contact a tax preparer that focuses on this, sorry. I don't think your broker/custodian is going to flag it as a wash sale outright, so it will be up to you if the put option and the underlying shares are "substantially identical" and we don't have any experience on seeing if that stands up to IRS scrutiny.

Thank you for the comment and for watching. Glad you found it helpful.