The Secret Power of Investment Location
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- Опубликовано: 11 сен 2024
- Could you be paying more in taxes than necessary without even realizing it? 🤔 In this eye-opening video, we dive into a little-known yet crucial strategy that can save you thousands in retirement taxes. Hint...it's not just about how much you save, but also where you save it!
🔍 What You'll Discover:
📌The Hidden Key to Tax Savings: Learn about the often-overlooked concept of 'investment location' and how it differs from your investment allocation. It's more than just stocks and bonds; it's about where those assets are held.
📌Real-Life Comparison: We take you through a compelling case study of two retired couples with identical investments and incomes, but a staggering $7,500 annual difference in taxes. Find out how and why!
📌Strategic Account Placement: Understand the tax implications of different types of accounts, including pretax IRAs, Roth IRAs, and joint accounts. Discover how the right placement can significantly reduce your tax bills.
📌Scenario Analysis: We don't just tell; we show! Watch as we compare three different investment location scenarios and their long-term tax impacts. The results? Surprising, enlightening, and financially transformative.
📌Tailored Strategies for Everyone: Whether you're nearing retirement or already there, these insights are tailored to help you make smarter decisions for a more prosperous retirement.
📌Special Considerations: Learn why this one-size-fits-all strategy might not suit everyone and discover the exceptions where different approaches are warranted.
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🎤 If you're preparing for retirement or already enjoying it, you'll definitely want to catch my podcast, Big Picture Retirement. Your retirement's success hinges on seeing the "big picture" and tying together your legal, tax, and financial strategies. On the show, we dive deep to offer insights on effective planning, and I'm joined by my co-hosts - attorney John Ross and yours truly, financial planner Devin Carroll. www.bigpicture...
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⭐⚠️⭐Please read this⭐⚠️⭐
⚠️I am not an attorney, SSDI advocate, or affiliated with the Social Security Administration or any other entity of the US Federal Government. I am a practicing financial planner, but I’m not YOUR financial planner and since I don’t really know you, I can’t give you advice. So please don’t take this video as specific advice for your specific situation. Consult your own tax, legal and financial advisors. 🙇🙇🙇🙇🙇
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Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determines a lot of things, my parents both spent same number of years in the medical profession, my mom was investing through a financial advisor while my dad through the 401k. On retirement, my mom retired with about $5million, while my dad retired with roughly $3.8million.
I would REALLY like to meet ANYONE who can come anywhere near your tax strategy analysis! MUST BE NICE!!!!
Tor Eckman. Nice to meet you. Devin is spot on but this couple will still pay substantial taxes.
I have similar situation but retired at 55 and drained my brokerage account and paid zero capital gains tax. The only possible regret there is i has to keep my income below 75k ti get zero tax. I could have started Roth transfer then but opted to wait.
Regardless, I’m waiting until 68 to take SS and wife’s SB when she’s FRA.
End result based on 6% growth and 3% inflation, taxes between 68 and the great gig in the sky should be less than 2k per year. The key is keeping provisional income low enough to avoid tax on SS. That’s the killer.
@@toreckman8899great strategy. I draw a pension of about 45k which automatically puts us in the 85% SS range. So nowhere to go. I wish they would raise the income limits but I’m counting on it to stay where it is through my lifetime.
@@toreckman8899also reason to keep provisional income low is to keep medicare part b premium low with no IRMAA
Of course it's nice. You should do it. It doesn't happen by accident.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
Good presentation. Most people don't want to do it, but learning the tax code can save you a boatload of money.
Doing it right without software designed to do it right is tough. Then managing it is tough too.
I'd rather mop and shine the floors in the Empire State Bldg. with a Q-tip than study our tax code. 😶
Please do video for single tax payer.
Since interest and non qualified dividends are taxed as ordinary income, Investments that produce these incomes are best in IRAs especially Roth IRAs. Tax Free accounts like Roth IRAs are great for holding high growth stocks and interest bearing investments since there withdrawals are always tax free. Taxable accounts are great for holding investments that produce long term cap gains since this is tax favored income and taxed a lower rate than regular income or withdraws from regular IRAs. IRA to Roth conversions are great when opportunities occur that allow you to make the conversions at a lower than normal tax rates. The analysis to do all this the best way is somewhat complicated. But every path has a potential gotcha. Like if you convert IRA to Roth and pay taxes then later have an event that allows a very large tax deduction (I'm thinking nursing home expenses would fall into this category). Captured correctly, you could of made the conversion tax free. The analysis done right also accounts for the LTCap Gains, Social Security, and IRA RMD issues and tax effects (or affects).
Just found your channel and it's a pleasure to listen to your clear, well- paced, thoughtful explanations of these income strategies. Thank you for the time and effort you put into the videos.
Welcome aboard!
I think some folks are getting hung up on the values used in this example. I dont think it matters if your portfolio is 50% or 25% of this example. This strategy could net you more money by paying less taxes and could be set up now before taxes skyrocket again in 2025. Even $100 more in your pocket each month is worth it.
Quite good to note. I will be more subject to minimizing taxable income as the after-tax account will be growing. I am addicted to equities, and I was once a bond salesman back when.
Do you do videos for the coman man /woman ?
Anyone who is already in retirement should at NO TIME place most of their regular savings (assets outside of retirement accounts) into equities if those savings are needed for normal living expenses. With the exception of high dividend paying stocks (dividends being taxed as ordinary income BTW) you do not realize a taxable gain until you SELL the stock investment all the while with the real risk of a market downturn reducing your savings cushion. In fact I would argue that a retirees asset allocation overall be in investments that maximize capital preservation. Will there be a significant tax hit once you have to start taking RMDs at age 73? Yes, but that's better than a market crash severely impacting the balance in those accounts.
The couple you showed with their different retirement incomes couldn't be further removed from 90% of people I know. ☹️ INCLUDING ME.
I guess I’m a 10%er Except my wife didn’t work so I’ll only get half of 3950
Yes, very important, and as he suggested also consider withdrawal strategy as part of tax strategy.
I work for an airline for 35 years. They dumped the pension in bankruptcy so I get $763 a month plus $3000 a month SS. My wifes SS is $1300 including spousal. After taxes, medical insurance, well.....$5063 is what we will have to live on.With inflation.....well its plain to see. And I get more in SS than most americans......I think this video applies to less than 20% of people in the United states.
Depends on the risk they want to take at their age .
But if i'm not a couple I guess it doesn't matter.... Oh well.....
just easier to buy MYGA's at 6 plus percent and tap the interest
Those mixes were relevant years ago but in todays economic environment they don't make any sense. If you think that bonds make sense today please explain why?
With yields on treasuries, CDs, and gov't agencies between 5-6.5%, they make more sense than they have in the past decades.
@@DevinCarroll Sure today they may be meaningful again (finally) but for how long? They certainly didn't protect anyone during the last downturn. As for income, there are higher yielding BDC's and REITS to satisfy that portion of a portfolio.
@@gregwessels7205BDC's are high risk. REIT's are positively correlated with the stock market, hurting diversification. I'll stick with holding TBills and CDs to maturity for fixed income.
Bonds definitely make sense for many people especially at 5% and inflation at 3%
@@johngill2853 Inflation is not anywhere near 3%. Even the feds are claiming it's higher than that, and anyone that's been to a grocery store lately know they're lying.
The money in the IRA is partly owned (taxes) by the Federal Govt. (and state if taxable at State), how does that change the plan?
And I will gladly give them their share. Most heavily before I collect Social security
What % of tax should you have taken out of your Social Security
@@kbbkbbkbbkbbkbb correct that if you don’t have taxes withheld, you should probably pay estimated taxes if you haves substantial other income, pensions, dividends, interest, etc.
When I take mine I’ll have 10% withheld for convenience sake rather than writing and mailing a check every qtr. if you “wait to pay till you file” you could be subject to penalty for under withholding.
I know I will owe on the 85% forever, so may as well have it taken out
Okay Devin, I think I understand, but…. You don’t show a graphic key. What label would you affix to the lowest tax (green line) on your line graph?
That zoom feature zipped right by the legend. That was the optimized approach with equities in the taxable account. Pause at 6:18 and you'll see it.
@@DevinCarroll Wow, thanks for the lightning fast reply!
Title should be "...Investment Allocation" not "...Investment Location".
Those are two separate concepts.
What if your invested in precious metals?
Then capital gains probably won't be an issue 😉
Precious metals capital gains are taxed at your ordinary income rate (but no higher than 28%, in case you are in one of the highest marginal rate brackets). The best place for precious metals investments is in a Roth IRA because there is no tax on capital gains in a Roth. However, be sure to do your due diligence with respect to an IRA custodian for precious metals, as most are firms you've never heard of before. Make a list of all the big name firms in IRAs and investments. Then search for precious metals at that name. I found only one household name investment firm that allowed physical precious metals in an IRA. Also, the metals MUST be held by the custodian, you can't keep them at home. Easier all around to invest in GLD or SLV just as you would a regular stock, held in a Roth IRA. If you are a stacker who believes "if you can't hold it you don't own it" then you won't want to leave your metal with a custodian and you will be subject to ordinary income tax rates on your gains (which very probably will be an issue if you hold them long enough - unless inflation and geopolitical risks magically disappear).