Welcome to Retire Smart Austin. My name is Cynthia De Fazio. I’m joined today by Phil Capriatti senior He is founder and CEO of Empower Wealth and Tax and today we’re talking about a very important topic about maximizing your retirement income. Wow, Phil, how are you today?
I feel wonderful today. It’s been a great, great day. I don’t know had like 12 hours where the sleep. I never sleep that long. And, you know, sometimes you’re running, you’re running, you’re running, you’re running and all of a sudden you just shut down like last night. I got home. I didn’t even I wasn’t even hungry. I had like a light salad. Yeah. And I was like, you know, I’m gonna just lay down and I woke up at like, one o’clock in the morning, and got a bottle of water. All right, but seriously, it’s fantastic. So I woke up really, you know, the epitome of bright eyed and bushy tailed because I was rockin and rollin ready to go.
Yes, you’re like the Energizer bunny. I love when you’re up early and ready to go. Because obviously, it just makes for a very energetic and fun show. And I enjoy being with you. So, I’m so glad we’re together. Yes. So, my Phil, we have such an incredible topic today. And I love this, ways to maximize your retirement income and minimize taxes. One of the things that we talked about this morning in the break room before coming on was that a lot of women sometimes feel a little intimidated, if you will, to call in to get guidance after the loss of a spouse. And this actually can play both ways it can be gentleman as well to the loss of a wife, we never really know. So let me ask you, because obviously, in my opinion, I think that you’re the most important call to make just to navigate that unknown financial terrain when there is a death of a spouse. So why are people sometimes apprehensive?
Well, the very first thing in the whenever you have a death of a spouse or a loved one, especially if this individual was like, I’m gonna say, chief cook bottle washer with respect to their investments, and so forth. What normally happens is you go from First of all, touch nothing, absolutely touch nothing. And what you should do afterwards, once the dust settles, once you you’ve gotten over, over it, once you’re starting to realize, okay, this is the second phase of my life, I need to move on, then come talk to a licensed fiduciary come in talk with us, one of the very first things you’re going to need to accomplish is tax planning. Because we go from married filing joint to now filing single, the other big thing that I see with spouses is they’re not sure which accounts to take distributions from, they might have a pension coming in and they have Social Security. Well, as soon as you lose a spouse, you also lose the social security check, right, the larger checks days. But we don’t know they do not understand the tax planning. And when I say they, I’m talking about clients that are CPAs on how to take distributions systematically to make sure that you’re not blowing up your, your tax bill, or even the other taxes associated with retirement like Part B and Part D premiums. So come in, please pick up the phone, our office, we have 14, I just hired three more people. And then they go through a three-year mentoring program to see if pretty much if they fit our bill, if it’s a good fit for them and for us. But what we want to do is we want to take a look and make sure that everything is done. And it’s done in your best interest. Many times, to children want to get involved and I love to have the children involved. But this should be a group plan. It really should be because as they say, I have five children thank the good Lord above but not all children are created equal. So, we want to start we want to get you structured on a tax efficient plan. We want to make sure that your portfolio isn’t too risky. But we also want the kids to be involved anyone that you find special or maybe someone who’s going to be either an executor or an executive trick. We want to get them involved to put together a plan, so you understand it. It, bring a child or a couple of children and so they understand it and everyone feels comfortable. But to do nothing and not make a change and to plan many times defeats the whole purpose of tax efficiency of retirement, what was good for the joint for the two of them is not always needs adjustments when we lose a spouse. So, so let’s get on a more positive topic. First thing with respect to retirement savings and, and what to do, it’s extremely important to have diversified investments. And when I talk about diversified inspections, I not only want a stock portfolio, I want an ETF portfolio, I may want a bond portfolio, I may want cash, I may need an insurance plan, I may need a few things, okay. And if you’re still working, please maximize your employer contributions and maximize whatever match. And please do it in a tax efficient way, this will pay dividends for decades to come. So put as much as you can into these plans. Because once you retire, you’re no longer and many folks when they retire, they will take a part time job, they may want to do a little research they may want to they went may want to do some counseling, but the fact of the matter is that steady paychecks no longer coming in now. So we move from accumulation phase to distribution place. So while you’re accumulating while you’re working, please put as much as you can into these plans. And please put as much as you can into the Roth. If you have a pension plan, and you’re getting ready to retire, one of the biggest mistakes I see Cynthia is an individual doesn’t come in and talk to us about all of the different pension options.
Okay, I know where this is going.
This is like seven different eight different options. Many patients have a lump sum plus income, absolutely many of them have a life annuity, many times what we find is the pension owner is looking for the best return or the best, the highest monthly amount, many times not taking into consideration their spouse’s income and what happens at the death of that spouse. So, you want to come in and we want to talk about all of your options. Even if you’re three, four years away from retirement, let’s look at it and let’s get all of these numbers, all of these options, especially if you’re a federal and state employee. Sure. Okay, because we manage a lot of these, the next thing that you really need to know in order to really achieve tax efficiency. Is your health care. Yes. Where’s it coming? So, my wife’s a retired teacher, okay. And she just turned 65 Oops, she’s gonna probably look 69. She’s gorgeous, absolutely stunning. But the fact of the matter is her retired teachers changed, it changed from a Medicare supplement plan to an HMO. Oh, boy. So, with that being said, I am and she’s still now Medicare A and B is her primary. All right, and so the HMO is a secondary, but now she’s locked into, she’s locked in issues like that. I don’t want to lose my dental. And the eyes. I said, Honey, we can keep the dental and the eyes and put the HMO away. And what I’m saying is you need to understand all of your health care choices, and opportunities to make sure that you can get the best care in retirement because these things change. Many folks do not even think of long-term care, home health care. And many of the questions I get is up Medicare covers that. No, they don’t. They don’t they don’t cover you know; they cover very limited maybe two visits a week, but they’re limited. And once those visits are done, we’re talking about, God forbid after a heart attack after a stroke, after an accident, broken hip, any of that, who is going to take care of you at home. Now when you’re living by yourself again, we need to dot those eyes and cross those T’s. Let us explain all of your options. So again, this is tax efficiency. Why? Because you don’t have to pull from your retirement accounts to supplement or pay for all these other services that we never think of. So, you know, with that being said, for those of you who are single, lost a spouse or maybe decided to go through another phase, do not be apprehensive about calling our office. We would love to help you bring in the children as well. We would like to educate them as well. Let’s help you reach tax efficiency in this new second stage of retirement income planning.
Perfect though this is the perfect time for us to take our very first commercial break to the viewers at home, the number to call is 888-818-6557. Or if you have your smartphone handy, go ahead grab it, click on that QR code at the bottom corner of your screen that will take you right to Empower Wealth and tax landing page. If you’re in the viewing audience today and you’re wondering, do I have a tax-free strategy in place? Do I have a way to maximize my retirement income? Will my family members be taken care of when I pass away? This is the perfect opportunity for you to take advantage of this complimentary interview with Phil or a member of his team 888-818-6557 We have to take a very short commercial break, don’t go anywhere. I have so much more with Phil when we return.
Most of the folks that we work with are not going to outlive their money. When an individual comes into our firm, that very first question they ask how do I know you’re going to be here five years from now your financial advisor and your licensed fiduciary this should be a lifelong commitment. It shouldn’t be a revolving door exercise generational planning, we have an opportunity to not only work together with retirees, but having my children work with their children, my grandchildren working with their grandchildren. So, we’re establishing a relationship that will literally go through several generations. I have three children that are actively in the business. My youngest son Parker, who’s 22 is a junior trader. He works in our home office in Phoenix with foundations. He’s in a three-year mentoring program. My son Phillip is also a licensed fiduciary he’s 41 years old, he will take over the business and my daughter Lisa, my oldest daughter, who’s 42 also has her securities and fiduciary license as well. This company will pass to my children and hopefully someday to my grandchildren, but in the interim, teaching them through my example. That’s our firm.
Welcome back to Retire Smart Austin. My name is Cynthia De Fazio joined today by Philip Capriatti, senior he is president and CEO of Empower Wealth and Tax. This is a very important show we’re having today Phil talking about such important topics about maximizing your retirement income. I want to talk to you a little bit about tax advantaged investments. Yeah, what do those look like?
So, when we you know, there are quite a number of tax advantaged investments, folks. So, number 1, am I contributing to a 529 plan may be for young adult children who may need to repurpose and go back to school, or my grandchildren. One of the best things, in my opinion to do for our grandkids, is instead of getting them that cheap toy made from wherever that’s going to break or that piece of clothing that they may not appreciate. How about making a contribution into their 529 plan? Or opening it up for them? In addition, if you’re you are still working, and if you are under 65, how about contributing the max to your health savings account, the HSA. This is also tax efficient. So, as you probably know, with a 529 plan, you can take distributions and change beneficiaries but you could take distributions and as long as you’re using them with tax or with education related expenses, you it grows tax free and it’s taken out withdrawn tax free. And by the way now you can take out 529 plans, many folks are concerned that these college degrees, what exactly are these t they teaching these children in some of these institutions? Many folks are moving into they’re moving into you know, back in the day we used to have vo tech vocational technical school yeah, let’s go learning about maybe they are maybe they’re not what they call college material. Okay, so what they could still learn how to do plumbing, construction, electrical H back all of these. Well, these 529 plans can be used to finance this type of education. Maybe you have a child that just hasn’t quite gotten it yet. And was apprehensive about going right into college again. 529 plans it’s a great gift. And that’s a great gift that’s not only tax efficient but keeps on growing. You can’t cannot contribute to an HSA a home a health care savings account once you reach 65. It doesn’t matter if you’re still working once you hit 65 Even if you’re still working, that is once you go on to Medicare, you can no longer contribute that. So, these are two tax efficient strategies, another tax efficient, and I’m going to call it a tax efficient investment. Now, right now, interest rates are high, our municipal bonds. And you know, you don’t necessarily have to buy the doggone bond, you don’t need to hold it, we can buy it in a basket, we can buy an ETF, and a lot of them were the ETF holes, muni bonds. And we can look at muni bonds that are returning 456 percent. But again, we take distributions tax free. Now one caution with the muni bonds. And with these types of investments, even though they’re federally tax free, they may not be state tax free. Now in Texas, we don’t have that problem. But one of the other things is, they will, that income will go into your provisional income to determine whether your social security is going to be taxable. So, it’s federally tax free, but it does cause your Social Security to be taxable. So, if you’re unclear on this, and what are the effects of your retirement income plan, come in, and let’s talk about it. I think it’s extremely important to be diversified, not only in your investments, but tax free diversified. So many times, we have these insurance products that will that will put into trust, and I won’t go through all of them. But many folks, they have like zero market volatility, but they want to earn six or 7%. But they want to do it without any risk. Okay, well, there are certain insurance products that are available that have tax deferral, okay, so for many of us, my client, we might have clients with trusts and, and I asked, What do you want to do with this money? Well, I really wanted to get it to my kids or my grandkids. That’s why I have it in a trust. What’s the other reason because the Trust has to file a tax return. And many times, they have money in a trust that’s filing a tax return, where they’re paying taxes on it. We have tax deferred insurance products like annuities that have great returns, no market volatility, no tax, no fees, and it’s all tax deferred. So, these things will average 567, some of them as high as 8% a year, but you don’t have to pay taxes on any of their earnings until you take a distribution. So again, this is just a way to diversify. I’m not pro or con, everyone’s situation is different. So, they’re not always great for everyone. But they are great for some folks. Tax harvesting, folks. You know, I mentioned in a couple prior shows, most advisors they say, Oh yeah, we do tax harvesting, because one of the questions I’ll ask, if you have basically three accounts, you have a government taxable account, we’ll call a tax deferred than a taxable account. You’ve already paid taxes on the money, you only have to pay taxes on the earnings, and then tax free will go with the Roth IRA or Roth 401 K. So, in these taxable accounts, most folks forget to do tax harvesting. They want to sell off the losers against the gain of the winners, so that we have a net zero tax effect. And we can rebalance more accurately or maybe put different investments that aren’t in these accounts. Many of these tax accounts that are 15 years old, 2025 years old, and you’re doing tax harvesting, maybe once a year, maybe twice a year, we now have technology that allows our clients will literally we can do a daily, but I believe that’s too much. But we want to do tax harvesting monthly. If your advisor is not talking to you about tax harvesting, and your taxable accounts monthly, you need to make this phone call dial 888-818-6557 Be one of the first five callers come on in and let us show you the way to a more tax efficient tax diversified retirement income plan.
Phil, thank you so much to our viewers at home. That number to call is on your screen. 888-818-6557 We know that you’re in the viewing audience today and that you have a lot of questions for Phil and his team about how to plan your perfect holistic retirement. Bill has the answers for you again 888-818-6557 We’re going to take a very short commercial break here on retire smart Austin but don’t go anywhere. I have so much more with Phil when we return.
You know, going back to work after retiring is not ideal. I’m Philip Capriatti, CEO of Empower Wealth and Tax if you amass the nest egg, it’s time for a financial advisor to help you reach your retirement goals. This is one of the greatest tax windows in history. Now is the time to take advantage of this tax discount while we can we specialize in retirement income planning, tax mitigation, estate planning, and so much more. So, plan your retirement right Call now for your own complimentary portfolio review and tax analysis.
Welcome back to Retire Smart Austin. My name is Cynthia De Fazio. I’m joined today by Phil Capriatti, senior he is president and CEO of Empower Wealth and Tax. Phil, this is an amazing show that we’re having today talking about such important strategies for retirement planning, if you will, I wanted to ask you a question about how does someone know their retirement withdrawal strategy? Because that can be confusing, especially for our do it yourselfers at home that think that they have this mapped out?
What do you look at 97% do not. And were this one of the very first, that’s one of the very first criteria we use to set up a tax efficient retirement income plan. In fact, one of the questions we’ll ask when we do the initial consultation with Gregory, just to kind of get an idea of what type of network what type of advice they’re going to need is I’ll ask what is your retirement withdrawal strategy? What do you mean, by take Social Security? I have a pension and then I just pull the income whenever we need other income. And, and I’ll say, Well, what’s your strategy to make sure that that retirement income plan is tax efficient? I don’t really have a strategy. My advisor never talked to me about tax efficient retirement income strategy. And I and I’ll ask well, how do you feel about writing that? Check to the IRS at the end of the year? And are they consistent? Are you paying the same taxes each and every year? Folks, part of having a tax efficient retirement income strategy is having an RMD distribution plan. A report I want to understand what am I required minimum distributions are going to be right now I need to have a strategy. But when I hit 7374 75, and that’s the start take the taking those requirements, required minimum distributions. When I hit in the latter 70s 80s 8590, these RMDs, I’m forced now to take large RMDs. And I never develop the strategy because my advisor didn’t have the wherewithal or wasn’t thinking of it or told me to check with my CPA or tax planner. So, it’s extremely important in order to have a structured retirement income plan that’s tax efficient, you have to have a retirement withdrawal strategy. And part of that would be an RMD distribution plan. When I when you come into the office, I’m going to ask you, where’s your RMD distribution plan? And it’s okay because we’re going to put one together for you. But many advisors, they don’t look into the future to Roma site to CPA that does the taxes. We’re just looking at last year’s return in this year’s return. We’re not looking at tax rates going up or in these government taxable accounts, we’re going to be forced to take large distributions. So, we want a strategy and if you don’t have one, when you call and come into our office, we’ll help you develop one. Estate planning. We are getting ready to see one of the most sweeping estate tax changes in our lifetime. And it’s really sneaking up we have two different things going on. We had the Trump tax cuts expiring January 1, 2026. And then we have the estate uniform gift tax expiring in three years. Okay. Why Congress’s again, kick into thing down the road? Well, right now, if your state is your estate is over 13,000,013 point 8 million. You don’t have a federal estate tax. Now, I’m not talking about federal income tax. I’m talking about federal estate tax. There are two separate taxes. Even your Roth goes into the federal estate tax calculation. So even though it’s federal income tax free, it goes into federal estate tax calculation. Now this is part of the estate planning strategy. This is going to sunset in the next three years and it’s going to revert back to 2 million. Okay, and they’re talking about 2 million and for single and 3.5 million for folks who are married, which means if this if Congress has their way, and even if it’s dialed up as much as 5 million, any estate over 2,000,003.5, or 5 million can be hit with a tax of 55%. It starts at 45 and then goes to 55, depending on the value of the estate. So, what does that mean? Let’s assume that there’s sunset. And let’s assume we’re in a whole new era, the national debt is now over 40 trillion. And you know, we need to pay our fair share just a little more, because after all, we don’t want to default on our debt. I mean, that’s what we hear. Okay. So now we’re going to change that federal estate tax. Okay. So can you imagine owning a ranch, owning a farm, owning a business that you want to transfer over to your children, and as federal estate tax drops from 13 million down to five, with the land as expensive as it is, okay, ranches is expensive, with your assets that hopefully you’ve grown, you need to consider estate tax planning. So again, most folks weren’t concerned because they didn’t feel that they would breach that 13 $14 million. exemption, that in other words, what we’re talking about is that first 13 14 million, you don’t have to pay estate taxes. They’re wiping that out. And that’s going to sunset in three years. And it’s going to revert back to the old estate tax code and uniform gift tax code of two, possibly three and 3.5. At a max 5 million, we need to start looking at that estate planning right now. If you’re not doing it, it’s time to come on in. Income timing and inflation protection. You know, it’s amazing, Cynthia, I see so many folks that not only don’t to income planning, they do not even look at inflation planning.
So important. All of these things today.
Yeah, each year. And so, what we’re talking about is I want to make sure if you have an annuity or pension or social security, as we go on inflation takes a largest larger piece in order to maintain our purchasing power. So, make sure inflation protection is built into that retirement income plant. Bill.
Thank you for another amazing episode this week to our viewers at home. We’d like to thank you for joining us today on Retire Smart Austin. That number to call in is 888-818-6557 or grab your smartphone, click on that QR code at the bottom corner of your screen. Again, thank you for spending time with us. We appreciate you have a safe, blessed and happy week ahead. We’ll see you back one week from today. Take care. Thank you, Sylvia. Thank you, Bill.
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