Leah Woodford 00:22
Hi, and welcome to Retire Smart Austin. I’m your host, Leah Woodford, and with me today is Phil Capriotti senior and John Solyman, CRPC of Empower Wealth & Tax. Welcome back to the studio, gentlemen.
Philip Capriotti 00:44
Leah, it’s so it’s just a pleasure to be with you. And I wanted to welcome John. I wanted John to come on and do a few shows with us to let everyone know. Of course, we’re expanding our company. We’re opening up our fourth office. I won’t get into all of that, but John is one of our fiduciaries. It’s taken me, oh, I think we had an interview close to 20 to find John. John has a great wealth of knowledge. He used to have his own show called The Money Doctor. The Money Doctor, yeah, I like that. And I was so impressed with John when we sat down. Our first interview we sat and talked for about a couple hours, nonstop, wow. And I realized the engaging dialog was something that we’re looking for, not only that, but his knowledge. So, John, why don’t you tell the audience just a couple, just a little thing- a couple things about you and what our time our topic is today.
John Solyman 01:43
Well, first of all, thank you for having me here. John Solyman, I’m a charter retirement planning counselor. I’m a National Social Security Advisor certificate holder, and I’ve been in the business for quite some time, and I’m pleased, pleased, pleased to be here working with Phil and with you guys, and I know today, we’ll be covering a very nice subject that entreated for people my age that want to retire early. So, I’m looking forward to today’s show.
Philip Capriotti 02:07
Yep, thank you, John. I appreciate it. So, let’s go ahead and jump right in. So today we’re going to talk about why it’s so important to start retirement planning early. And we picked a- we picked a basic age, 55. I would say you should tell your children to start planning at 25 but, but we’re going to go ahead and start- get started with that. Why is it important to start planning at 55, John, why don’t you lead us into that?
John Solyman 02:38
I will tell you that a lot of the folks out there, they don’t plan on their retirement while they’re working. They work, work, work, work, and they don’t plan their exit while they’re working. And this is when things go sideways, if I may, and there is a lot of ways out there, strategies that a lot of those clients can employ with the right detailed retirement plan and strategy that they can start easing into retirement earlier. Some people can start retiring at age 50, in many cases. So, a lot of the folks out there from dealing with clients, they focus on, what are the stuff that they cannot do, versus what are the possibilities and the stuff that they can do earlier on, before age 60. And I think this is the main challenge that a lot of people face out there.
Philip Capriotti 03:30
I would say that time is one of the major assets you cannot replace in retirement. The sooner you start your retirement planning process, the better. Also compounding, especially with market variables. Compounding works better when you start sooner rather than later. We have a little thing called the sequence of returns. Many times, when folks start late, they may have a down six months or 12 months in the market. So, when you’re starting, you’re starting down. So, time is very relevant. And to be honest, the longer you wait to retire, the more expensive retirement gets. So, with that being said, we’re going to run through a couple of ways to look at retirement, start as early as you can, and then I would say tax efficiency in retirement is also another variable that many folks simply don’t even look at. They figure that they’re paying taxes now while they’re working and they’re contributing to their 401(k)’s. They naturally think been drinking the Kool Aid, that when they retire, they’ll be in a lower tax bracket. But you have to understand, folks, for many of these qualified accounts, you have a partner, it is the government. And if you want the partner the federal government in as a partner in retirement, I would say, continue doing things the wrong way. That would be pretax. So, we- we’re going to touch on all of these subjects today, and one of the things that we really wanted to focus on is introducing you to John. John works in our Cedar Park office. He does rotate sometimes up in Georgetown, and sometimes he comes out to Horseshoe Bay as well, but he has a specific expertise that actually has deepened our pool of knowledge in our company.
Leah Woodford 05:23
Well, that’s amazing. Welcome. Welcome John. Thank you for having me now. We were talking in the green room, and you used to be a physician, #Money Doctor. Can we talk about that a little bit?
John Solyman 05:35
Well, in a previous life, I finished my med school. I have a bachelor degree in internal medicine and general surgery. I worked in that field for quite some time before somebody did my planning, and he showed me how much I didn’t know about the details of planning back then, and I fell in love with what he did. And 10 years after, I’m right here and I’m the Money Doctor, so I’m enjoying every single bit of it.
Leah Woodford 06:02
Wow. And we’re grateful that you’re here today. So, Phil, why 55? Why is 55 such a crucial time?
Philip Capriotti 06:12
Well, you know, in our generation, the baby boomer generation, they came out with a law, Stay Alive, Drive 55 and that was back when- I come from the east coast, from Philadelphia area, and it was one of the biggest mistakes they ever, they ever made, actually. But with that being said, it’s relatable. So, they lowered all of the speed limits. The maximum speed limit was 55 and what they found through those speed limits was that gas mileage was horrible. Okay, so you use more fuel. Traffic was horrible. So, at any rate, whoever came up with that bright idea with respect to driving, not so good. But it fits with respect to retirement, I would say, all of my children, I have five children, and one of my grandchild- one of my grandchilds is my oldest grandchild. I should say she’s 25 so we already have her started on her retirement. So, what I would say is, for those of you who are watching us, and you’re thinking, you know, I’ll wait, I’ll wait till I’m 60 to come in and put together a retirement plan. I would say, the earlier the better. At least 55 now there’s a couple things. Number one, it gives you a 10-to-15-year runway between the time you start planning for retirement and the time you retire. Many folks, we’ve noticed most of my- most of my wealthier clients, and I’m talking about clients that have seven- and eight-digit retirement accounts. They start at right around 40-45 right after they’ve gotten their kids grown and into college. That’s when they really started. But for many of us that you know, in the in the industry, the earlier, the better, as far as I’m concerned. Secondly, tax efficiency in retirement, this is another thing that really is we have a $38 trillion debt, and depending on who’s running the country in any given time, okay, taxes can be raised on any distribution from these qualified accounts at any time. We’re seeing a lot of these younger politicians now in their 30s. Many of these politicians never worked and even paid taxes. They believe in a socialism type of thing. In other words, I’ll just take Leah’s money because I don’t have any, and we want to make it fair and equal. Fact of the matter is, you really have to be responsible for your own actions, especially your own retirement. If you’re depending on the government for your retirement plan, that’s not a very good plan. Okay? Because again, we don’t know who is going to be running the show 10 years from now, 15, 20, 25 years from now. So, getting back to your original question, why 55 because if you haven’t started by 55 it’s an imperative you start right now. Don’t let another year go by.
Leah Woodford 09:18
So, Phil, I have a question for you. I own an aviation company with my husband, and a pilot has to retire. Mandatory retirement is 65 and often what we see is there’s something like divorce coming at age 48 to 50 years old, and they’ve lost everything and they have to start all over again. Do they still have the time and the runway to regain what they lost?
Philip Capriotti 09:45
They absolutely do so if they’re an employee, the very first thing that I would say, and if they’re an employee of the company, and the company offers a 401(k) option, I would say to these pilots, or actually, anyone in the industry. Three, make sure that that 401(k) has the Roth 401(k) option. Make sure it’s part of the plan document. Okay, allow these individuals to retire and pay the tax on the seed and not on the crop. Okay? So that’s number one. We can really- we actually don’t have to save as much money for retirement if we’ve already paid the government off on the front end, as opposed to the back end. Give you an example. If I have a million dollars, I can expect to give the government at least 30% of that 700,000. If I’ve already paid the government, 700,000 buys me a million dollars’ worth of retirement. I think we have to cut to a commercial.
Leah Woodford 10:42
We do. We have to cut to a real quick commercial break. Come back to Retire Smart Austin.
Philip Capriotti 10:55
One of the secondary reasons I got into the tax business is my very first job. It was an usher at a movie theater. So back in my day, since my baby boomer, people would come, we would tear their ticket, and we would walk them down, seat them, and then come back. So up until that point, I was getting $5 a week for allowance, and I’m telling you, I was like an indentured servant. My brother was allergic to grass and pollen, so I had to do all the lawn work. I had to do all of the work, as a matter of fact. So, I get my first check. I have 37 and a half hours. I’m making $2.10 an hour. His check’s going to be close to $80 I look at the check, and I can sticker shock $41.78 I’m good at math. That’s not adding up. Spike. Over to the manager. He says, oh, Phil. He says, flip the check around, federal income tax, state income tax, FICA tax, all of these different taxes. So that was my first lesson at 15 about how important paying taxes are. And by the way, I think that anyone that has paid taxes every year for 50 years, by the time they’re 75 they should be tax free. I don’t care where they put their money. That’s my belief. I believe we’ve done our fair share.
Leah Woodford 12:15
Welcome back, Austin. I’m Leah Woodford, and with me today is Phil Capriotti senior, and John Solyman CRPC, and they are with Empower Wealth & Taxes, and we are talking about top reasons you should start your retirement planning at the age of 55 Welcome back, gentlemen. Thank you for having us.
Philip Capriotti 12:34
Good to be back. Leah, good to be back. So, John, I’m going to ask you to go ahead and kick this second segment off.
John Solyman 12:42
Well, I will carry from what you finished. I think everybody out there, they should start as early as they can and as aggressively as they can. Compound interest is one of your best friends when you plan for your retirement, right?
Leah Woodford 12:55
Can we break down compounding for our viewing audience?
John Solyman 12:59
Yes. So compounding is when you have an asset that’s earning interest in a way that as you mature into it, every year after another year, you’re earning interest on interest, rather than earning interest on just the principles you call simple interest. So, there’s two different ways of compounding, but to make a long story short, if you have a million-dollar earning approximately 8% per year average, okay, you’re expecting, with the compound interest, to have this million dollar double in 10 years or so, give and take. If it’s simple, it’s way longer than that. So compounding interest can be your best friend. So that’s that.
Leah Woodford 13:38
So, Phil, I have a question, why aren’t most financial planners asking us these questions? I mean, I never get asked these questions.
Philip Capriotti 13:47
One of the big issues that we see is there’s not enough education within the 401(k) plans. Okay, many of these companies do the bare minimum, so they offer the plan and they’ll throw a 3% matching. But as far as educating the employees about proper tax planning and retirement planning, they feel as though it’s not their responsibility that the individual, again, is an employee of the company, has to go out and seek out their own information and their own expertise, and this is why we started doing these shows. Over we just had our six-year anniversary. This show is designed to educate, but it’s also designed to get the viewing audience to call us and come in for a complimentary review. So, for most folks, 50-55, 45-60 if you’re watching our show and you’re not calling our office or clicking the QR code, the- it’s really a huge mistake, because what you have is the opportunity to come in and get complimentary counseling, Counseling without any pressure. Together, both with retirement planning, social security planning, estate planning, tax planning. So, what we do is we put- we do a 360-degree holistic planning for each and every one of our individuals, many folks that come in, we don’t work with them because they’re not at that point yet. They’re not at the retirement, but what we can do is help them, help them manage their money properly, so that the years they have remaining from now until retirement, they’re ready. Most folks don’t want the other issue that we see is most folks say they’re planning because they’re putting money into a 401(k), but they’re not putting it in writing. They’re not reviewing it. The biggest issue I see are self-employed individuals that own their own companies. These folks keep putting the money back into the company, back into the company, and they figure at some time in the future, that company will be worth something, and they could retire by selling the company. But again, that’s a hope and a prayer for self-employed individuals. We have a lot of different plans. We have SEP IRAs. We can put up to $75,000 a year away into a SEP IRA. And now with the new tax laws that changed in May of 2025 we can put it in seven- We can put up to 71,000 in a SEP Roth, a Roth, SEP IRA, pay the taxes first. For many folks that are high wage earners doctors and have single practices and other professionals, they can use what’s called a cash balance plan or a defined benefit plan. And with these plans, they can put up to $250,000 away. They can literally save up to 3.2 million. But again, many CPAs that do the taxes do not speak to these folks about it, so I would say, pick up the phone, come on in for a complimentary consultation, speak to myself or John or my son Philip, or one of our other three or four financial advisors. We’re all fiduciaries. We have an office staff of over 25 people. Everyone in our office is licensed to do one thing and one thing only. We work together as a team, and we help folks to come in. This is my way of giving it back to the community and helping folks properly prepare for retirement. So, there’s no longer an excuse my employer doesn’t send in a financial advisor to manage the 401(k) and by the way, for you employers, you should give us a call and ask us to come in and talk to your employees about proper 401(k) and retirement planning. So, I’m going to put the onus on you as well. So, with that being said, you really have to look at it, and you have to look at planning. So, with anything we plan for our children’s education, okay, we plan again. Once we get the kids out, we’re planning for grandchildren. Well, let’s not forget about ourselves. So, let’s plan for ourselves.
Leah Woodford 18:08
So absolutely and Phil, we have to cut to another break, but all right, we’ll be right back with Retire Smart Austin.
Philip Capriotti 18:22
Hello, folks. My name is Phil Capriotti senior, and I’m the CEO of Empower Wealth & Tax. We specialize in tactically or actively managing your portfolio’s risk, tax efficient retirement income planning, maximize Social Security, making sure that the estate is being handled in a tax efficient way, making sure that you have not just a trust, but the right trust, and having it all done within the firm that is your tax advisor, is your CPA firm is your attorney, is your estate planner, is Your financial planner handles your Medicare, handles your Medicare, supplements your long term care when you’re all encompassing and have a 360 degree protection around your estate. Now you’re working with a private wealth manager. If your financial advisor is not currently acting in this capacity, I think it’s time for a second opinion. In fact, I know it’s time for a second opinion. Pick up the phone, give us a call, and let’s get it right the first time. Let’s plan your retirement and let’s plan your estate properly. Did you know The IRS could be your partner in your pretax retirement accounts? Well, it’s true, if you have a traditional 401(k), IRA, pension, or other similar retirement accounts, they’re all tax targets. The question is, how much to find out what your potential tax liability looks like. Get our easy-to-use Tax Calculator and just scan the QR code or go to empowertaxbill.com.
Leah Woodford 20:14
Welcome back, Austin. I’m Leah Woodford, and with me today is Phil Capriotti Sr and John Solyman CRPC of Empower Wealth & Tax and we are talking about the top reasons you need to start retirement planning at 55 welcome back.
John Solyman 20:29
Thank you for having us, and good to be back. So, to our audience, a lot of the high earners out there and the higher net worth folks that we deal with day in and day out. They have a lot of products. They have a lot ideas in mind about retirement, but very few of them, they have a plan, detailed plan when to exit and when to actually ease out of work life and start retiring. And I think a lot of them out there, we think about retiring at age 60 or so. They think about retirement. This is the age I’m going to stop working. And I like to look at it from a different perspective. It’s me working and thinking when I’m going to work only because I want to work, not because I have to work, right? And it all comes down to having a plan, okay? And when we say a plan, I want to make it smart. Meaning is I want it to be specific. I want it to be miserable. I want it to be something realistic that we can work with attainable and I have the time horizon that I’m working with, so we get to know our clients in the process. And basically, my job is to make sure that their dreams and goals are factual in paper, factor in their cash flow, their net worth, factor in their tax liabilities, and how can we letter their income sources over a specific number of years, maximizing all the strategies that are available for them. A lot of folks don’t know out there that you can access your 401(k) if you stop working at age 55 with no penalty. There is a rule out there. It’s called rule of 55, okay, it’s you actually can access your 401(k) from your last employer that you work with without having to pay the 10% penalty. So, you didn’t have to wait till age 59 and a half. A lot of folks don’t know that they can access the Roth IRAs early on and so on. There is some strategist out there that, once you sit with somebody that had the knowledge of how those strategies work, how those products work, maximizing your back door Roth, your Mega back door Roth, and all the strategies that are available, it’s very easy for a high income and high net worth individual to start easing from work at age 55, and more importantly, not having to deal with all the taxes and the penalties out there. So, it’s the knowledge that and the planning and creating different buckets, or different, I would say, laddering strategies of income sources without have to wait till age 60, which is the traditional age. Wow.
Philip Capriotti 23:04
I would add to that, also, many folks don’t understand how many years they’ve paid into Social Security, and they don’t look at doing Social Security Maximization strategies. So, for instance, for those of you who are watching, and you’ve probably heard me discuss this. Social Security only takes your top 35 earnings years. So, for many folks, they may look at in their younger years, they didn’t really make much. They didn’t really pay much into Social Security, but in their latter years, they did. So what we want to look at is we want to take a look at the earning statement from Social Security, and I want to say, hey, look, you can work another seven years at the same level, and you can now retire with the maximum Social Security income benefit so many folks, or it might be 10 years, whatever that number happens to be. So as part of that retire at 55, we want to start with your social security planning as well. Because all of us have paid into Social Security, significant, literally hundreds of 1000s of dollars, but very How many of you folks out there that are in your 50s and early 60s have considered what you paid into Social Security, they simply look at the number that Social Security sends them. This is what you get at 62, 67, and so forth. We like to dial it in more specifically by looking at how much, how much further you need to work, and how much you need to pay in to get the most you can out of Social Security. And the other thing is, we want to make that Social Security tax free.
Leah Woodford 24:43
Well, and Social Security is a minefield. You can get in trouble if you don’t know your numbers. And that’s why it’s so important that you call somebody like Phil and his team.
Philip Capriotti 24:54
I would, for everybody that’s working, and I know we haven’t mentioned it much on this show. And that’s because we just assume you folks already know on the bottom of your screen, to the left of your screen, is a QR code. So, you can either dial 888-818-6557, come in for our complimentary consultation, or we can fast track you if you don’t want to, if you’re apprehensive about talking on the phone and click the QR code. So, what we want to do is we want to offer you three complimentary consultations. Number one, a written retirement income plan, which will include Social Security and how to properly plan for your retirement benefit. The second will be a Morning Star Report, an analysis of your current investments. What is the risk, what is the return, what are the fees, and what types of investments should you be invested in, which you may may or may not be. And then third, we want you to fill out an estate planning questionnaire. So, we have a- we have our own. We have not only our own tax team, but we have our own legal team. So, Chris is a board-certified attorney. He and what we’ll do is set up a complimentary consultation so that your estate plan is intact as well. Planning at 55, Joe says, in a number like, Stay Alive. Drive 55. Okay, this is when you really need to start looking at how much longer do I need to work, how much do I need to contribute to what accounts? How much do I have to contribute to social security? When can I retire, so that my retirement assets and income will last me to age 100 and if I’m married at the death of my first spouse, how will he or she be taken care of as well, and how tax efficient will their retirement plan be? So, all you need to do is simple, pick up the phone, dial, 888-818-6557, come on in for our gracious opportunity to teach you about how to properly, retire tax efficiently, and if you need an estate plan, we’ll also help you. With respect to that, I want to thank John for joining us. This is his first show, Lee. I want to thank you for joining us. I know this is your first show. Cynthia is still with us, so don’t worry about Cynthia, but she’s Yes, she’s so inundated with so much, and we needed to do more shows. So, Leah is going to be with us quite frequently. And I’ve gotten an opportunity to get to know Leah over the last three or four months, and I want to welcome you to Retire Smart Austin as well. So, for everyone out there, remember, take advantage of our complimentary consultations. Come in and meet John, come in and meet me, meet all of the advisors. Remember, we have three offices right now. We’re getting ready to open up a Lakeway office and a Dripping Springs office. We’re also going to put an office down in Mopac. Dial, 888-818-6557, and remember all of you folks that have moved to Austin or live in Austin, Retire Smart Austin.
Leah Woodford 28:12
Be safe, be blessed and come back. We’ll see you next time.