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 to our viewers at home. We’re talking about a very important subject today. The benefits of tax minimization. We all love that we don’t want tax maximization. We want minimization. Phil, how are you today?
Very, very good today. In fact, I woke up today, not only on the right side of the bed, I kind of bounced out of bed with a spring in my step. I felt like it was back in high school and college running track and cross country. Anyway.
Oh, yeah. Anyway, energized and ready to go? Yeah, well, you’re a morning person anyway, like you like to be true, really, you’re tackling a lot of your day ahead. And those early morning hours, while most of us are still having our coffee, rubbing our eyes,
six every morning, sometimes a little earlier, but, but I’m also down for the count around eight to 9, 11, I have to have two speeds on and off. Yeah. And I kind of like it that way. So unfortunately, not much has changed.
Good, good. Well, today is a very important topic, obviously, you’re so passionate about proper tax planning, tax harvesting, and of course, being, you know, with the tax office, if you will, as well, the benefits of tax minimization, obviously, with retirement planning, that is a huge component, looking at the true financial picture, and finding a way to make sure that your assets, of course, are protected, and you’re not giving too much at the end of the year to Uncle Sam. But it’s going in a different direction and still being legal. Most importantly,
it should be legal, and it has to be right and has to be well constructed. It also has to be updated and changed you literally yearly, because things change. So, we also we want to take a look at what changes have occurred in the last year. And what changes do we need to implement into our retirement or tax plan for the following year. So, it’s constant review. And this is one of the things I really like about working with clients and not just doing wealth management, but tax planning. Because they get to see my clients several times, already made several times a year. Yeah. We develop a relationship together. And it’s not one dimensional, it really takes on many different dimensions. So, it’s exciting. It’s very exciting. Absolutely. I love the business. And I love being a teacher of sorts as well.
You have a very serving heart. And again, I have to mention to the people that I run into when they talk about Phil, they mentioned that he makes them feel like they are the only client that he’s working with. And then he has a very patient and serving heart. That’s a testimonial to you.
Thank you. Thank you very much, Cynthia. Really is I appreciate that.
It’s true. Yeah. Well, let’s talk about the benefits of tax minimization, because that’s a big topic right there. So, let’s talk about increased disposable income if you’re doing tax minimization.
Look, I know sometimes these subjects seem redundant, but I can’t begin to tell you, if you are mid to high net worth, and you have not started or haven’t completed your Roth conversion processes. This is one of the planning tools that we use, how much can I convert of my taxable IRA or 401 K over to a tax-free IRA. Now again, if you’re modest means you may not need this type of tax planning. So many folks that we work with have taxable assets. And these taxable assets, it may be anywhere from six digits to seven digits and up. They develop and they produce dividends they produce interest that we have to pay taxes on anyway. So many times, what I’ll tell a client is look, let’s take a look at how much of your IRA we can convert this year without blowing up or increasing your Irma your Part B premium if you’re on Medicare, and how much can we can convert at the lowest tax bracket. For me folks, that tax bracket is between 10% and 24%. I don’t want to jump into the 35% racket, I want to keep it in that bracket. So each year, what we like to do is it’s basically, it’s a mock tax return, we look at what you spent, and we look at how much we can convert. And then I have software that helps you understand how many years it will take to convert it at x return in order to put a tax-free retirement income plan together. You know, we have i We’re getting ready to have a party in May, early, late May, early June, right before Memorial Day. We have over 100 folks gonna attend it. And this party that we’re having over at the Horseshoe Bay Yacht Club, is our all of our clients that we’ve worked with, throughout the last 15 years that have achieved a 0% tax rate in retirement. Wow. So, we’re having a party and I had my staff I said, put it together, how many, just how many folks that we have? And sure enough, we had over 150, folks? Yeah, so we’re gonna have a big old and, and what, what, what a great reason to have a party most to celebrate. So, getting into the tax efficient retirement income, it’s not just about buying muni bonds and things of that nature. If you spent a lifetime or the last 10, 20, 30 years, contributing to a 401, K, a 403, B, or 457, or other qualified tax deferred accounts, and your advisor, or you, if you’re your own advisor has not talked to you about structuring an RMD distribution report and a Roth conversion plan. Time is of the essence, once we start having to take required minimum distributions, it’s very difficult to do these conversions in a tax efficient manner. Before we take RMDs. It’s, it’s just, it’s a knack. For us. It’s like breathing, it’s a natural way of planning for your tax-free retirement. Sometimes it takes one year, but for most of us, it’ll take 567 years. So, number one on the list has to be your Roth conversions. And don’t forget Roth contributions. If you are still working and have a 401 K, by the way, if you’re a teacher, or if you’re in the medical profession, you may have a 457 plan, or a 403. B, we have clients that are contributing over $65,000 A year into a Roth qualified plan, because they’re in the special services. Either they’re a professor or teacher, or they’re in the medical field, they have higher limits to be able to contribute to regardless of what their earnings are, regardless of whether they’re in the 200, 300, $500 million tax bracket. Okay, pretty important to consider that.
Absolutely. Absolutely. Let’s talk about obviously, enhanced retirement savings.
Okay, what part of that we want to talk about right? So, when enhanced retirement savings really means you want many tax-free accounts. All right, I want to have number one and HSA account. If I have children that I owe, or grandchildren, I want to have a 529 plan. I want to have maybe muni bonds or Muni funds to enhance my tax free, I want to maximize my Social Security. If you were a high wage earner, and you do not maximize your Social Security, you’re letting an unbelievable tax efficient vehicle, get away from not just for you. But if you’re married for your spouse, maximize maximizing that Social Security, we know that at most, only 85% of the social security is going to be taxable. And at best, none of your social security is going to be taxable. I literally have folks that are like okay, so how am I going to get 120,000 10,000 A month tax free? Well, we’ll maximize your Social Security, and we’ll pull earnings from that Roth investment account. None of your social security will be taxed, none of your Roth will be taxed. And in many cases, when we’re in that 0% tax bracket. We can even do additional Roth conversions if we still have money in an IRA plan. So, there’s a lot of different ways to skin that cat. Remember for And I don’t want to be seem sarcastic or assuming. But if you don’t believe that taxes are going up in the future, I really want you to give us a call, we need to have a conversation, I want to show you that tax debt clock. But in all probability, what we want to do is make sure that you at least have the vehicles or have the knowledge to put this construction together. So, make a phone call be one of the first five callers dial 888-818-6557. We’ll construct a Morningstar report and an executive summary along with a portfolio observation and review. And we’ll also talk about how to structure a tax efficient retirement plan if you want to do it on your own.
Phil, thank you so much to our viewers at home, that number to call is 888-818-6557. You don’t have your pen handy. Go ahead, grab your smartphone, click on that QR code at the bottom corner of your screen that will take you right to Empower Wealth and Tax landing page, you can grab one of those first five spots. We’re going to take a very short commercial break here and retire smart Austin, but don’t go anywhere. And we come back I want to talk a little bit about tax efficient investments. Stay tuned, we’ll be right back momentarily.
My personal feeling is that no one who has worked in this country and paid taxes for 50 years, or 55 years should ever have to pay taxes in retirement if you put a plan together. That is tax efficient, so that when you retire, receiving money from Social Security should be tax free. receiving money from your pension should be tax free receiving money from maybe life insurance policies are tax free. If you put together the right combination. What you can find is you can structure a tax-free retirement plan for just about anyone to accomplish any retirement income goal. I now currently have clients that one $120,000 A year 10,000 a month. And I have clients that we’ve worked with for the last 10 years that pay zero taxes on that income.
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. We’re talking all about very important topics today surrounding the benefits of tax minimization. Phil, this is a great question I want to ask you, what about tax efficient investments? What are those look like? What are tax efficient investments?
Well, there’s a couple of ways to go about that. And, and right now with all of the new technology that we have, and of course, the experience our office has tax efficient investing starts with tax harvesting. Now traditionally, many advisors understand it is a lot of work, looking at stocks that are up stocks that are down bonds that are up or down or even have defaulted, because that’s part of it. And on a monthly basis, balancing that to buy and sell in a 0% tax bracket. So now we implement it, we’ve been doing it, we normally would do it three to four times a year. Again, it’s time intensive. But for our clients, we see them at tax time we’re doing their tax returns, we see them to review their wills and trusts. We see them to do their mock tax return for the Roth conversion. We get together with him once or twice a year to review their portfolios, in addition to the letters and zoom calls and so forth that we made. Okay, so now we have in addition to your traditional muni bond funds, or ETFs, or mutual funds, we can actually do tax harvesting monthly. Now I had a gentleman contact me and he said, Well, we can do it daily. Now, folks, that’s a little too much. But to be able to do tax loss, harvesting on a monthly basis is extremely intelligent. And the reason is, eventually when we see downturns, we want to be able to balance these portfolios and funds at a 0% tax bracket many times what folks will do in these taxable funds. Now, of course, we’re not talking about your IRA or Roth IRA. We can buy and sell in these and, and exhibit that taxable and tactical asset management without any negative tax consequences, but the fact of the matter is, with taxable accounts, accounts that we receive a 1099 or a k one at the end of the year, that increases our tax, our taxable income, even though we may not take a distribution from these accounts, extremely important. So now, this is a new benefit and service that we’re offering our clients to be able to take these taxable accounts, move them over, on under our management and actually do the heavy lifting for the client or the client, spouse or the family. And what we’re finding is the clients that we’ve that we’ve started with, and we started doing this about two years ago, but the clients new clients that come into our office, and let us run that Morningstar report on their portfolio, and actually take a look at what their portfolio observations, this is a great way for you to reduce risk to rebalance your portfolio monthly, with have without having one penny of tax to pay at the end of year doing it. So, this now, it’s new technology. And I’ve talked to a couple of my advisor, friends, local, some of the local agencies and even some of the advisors that we talk to literally on a monthly basis when I go out to Phoenix, and we do our recordings and so forth. And many of the advisors haven’t even heard of it, or are not using it, or I’ll hear it’s way too much work. So, the fact that matter is, it’s the work and the heavy lifting that makes or breaks the financial advisor. Remember, it’s extremely important that you get as much service out of your advisor in order to truly achieve a tax efficient or a tax-free status. So, this tax harvesting is a major 10. And it’s also a major enhancement to your retirement savings. What I like to say is, how much do you want to pass on because I’ve cried said, Look, Phil, I’m not going to spend all this money. So, if I pay a little extra in taxes, I’m okay. And I say okay, so what you’re telling me is you didn’t pay enough in taxes, you don’t mind paying extra in taxes? Why don’t you just write an extra check to the IRS and tell him this is specifically to pay down the debt? Now, of course, I’m being smart. But I’ve actually, if you feel that way, let’s write a check now. Well, no, I don’t want to do it. In fact, the fact of the matter is, and again, some folks do not have children or even charities to pass it on to, they might pass it on to a nephew or a niece or something of that nature. wealth preservation. It comes under tax planning, and it’s all designed again, if you believe that you’ve paid enough in taxes through your working lifetime, over the last 40 or 50 years, and you are not exercising or initiating tax planning in retirement, you’re hindering your wealth preservation, because you’re giving your wealth again to the IRS, which is okay, if you want to, but they give us all of these tools that are legal and in the tax code. I think it’s a good thing to use them most definitely.
Phil, I 100% agree. We’re gonna take our second commercial break, but you have a very special message to the viewers at home. Let’s talk about what that is.
I do it’s I think it’s about time if you’ve been watching for years, or even if you had just turned on the set and sauce today. Give us a call. Let us structure a written tax efficient retirement income plan and Morningstar report with your portfolio analysis. If you have not if you have a stock and bond or ETF portfolio, and no one has run a Morningstar report, an institutional Morningstar report on that portfolio. You’re unclear on what your fees are your internal fees if you’re unclear on the fees you pay your advisor. If you’re unclear on how much risk is in your portfolio, give us a call be one of our first five callers, dial 888-818-6557. We’d love to visit with you, and we’d love to perform the service for you by our certified financial planners and analyst. Absolutely complimentary no charge, no obligation to work with us.
Phil thank you so much to the viewers at home. That 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. We’re talking about a very important thing today benefits of tax minimization. When we come back, I want to do a deep dive with Phil about talking Roth conversion. Stay tuned. We’ll be right back momentarily.
We know the market is going to get worse from here. This is the biggest monthly decline in 10 years, people’s 401 K’s took a major hit.
My investments are tanking retirement isn’t going as planned. I can’t believe I let my kid talk me into buying crypto. I mean, what is that anyway?
This was the fourth worst contraction in history.
So how are you two doing? Your financial future doesn’t have to be uncertain. I’m Philip Capriatti, CEO of Empower Wealth and Tax if you have amassed a nest egg, it’s time for a financial advisor to help you reach your retirement goals. This is one of the greatest tax windows and 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 founder and CEO of Empower Wealth and Tax. We’re talking about how to do benefits of tax minimization, if you will. And I want to talk to Phil about the Roth conversion. Phil, I know you could spend a seminar full of time talking about Roth conversions. But let’s dial in obviously you’re passionate about them. How do they help people with tax?
So, it’s funny that you said seminar want to stop with that start with that right now. So, folks, you can hop on our website, here’s what I’m seeing. We do workshops, we do workshops at Sun City in Georgetown, we do workshops at the local Chamber of Commerce. In Horseshoe Bay, we do them over in Marble Falls, we’re now doing them in cedar park, and round rock. And these workshops are great, because what we’re finding is folks that are seeing us, so what we do is we advertise you know, in their local paper, you know, and, and then in addition to that, we do the Facebook advertising, what we’re seeing is folks that have been watching the program for 234 years, they’re coming into our workshops, wow, they’re not there. They may not or they were apprehensive about Kali, but they’re coming into the workshop. So, this is the reason I wanted to put that out there, folks, if you go on our website, and for some reason, you weren’t one of the first five callers or maybe you were just late to the game, okay, look on our website and sign up for one of these workshops. Okay, they’re normally done at either one of the libraries, their community center, we don’t sell any products, we don’t bring your own bottle of water, we don’t really give out anything except for knowledge and information. So, I wanted to mention that. And we talk about social security planning, tax free planning. And we actually do case studies, three different case studies of three different groups of people who had the same exact income that they paid into Social Security, and how one is not tax efficient. That didn’t maximize Social Security, and the other one is in a tax-free bracket. So those case studies which we don’t really have time to do on our show. Great. So, give us a call. And even if you call the operator and say I want to get one of those workshops, when, when is going to be the closest one near us. We’ll call you and we’ll let you know. Okay, so Roth conversions. Let’s start if you’re still working, folks, please and your company offers the 401 K Roth or if you’re a teacher, a 403 b Roth, or if you work in the healthcare industry, a 457 Roth, if you are medium to high income and most of your assets are paid off, start to put start to contribute as much as you possibly can into that Roth 401 K for three B or 457. Once it goes into the Roth, you start your five-year clock. So, you can not only take distributions after 59 and a half, but you can take distributions plus the earnings. Now the reason I say that is because the limits are so much higher. We can now in this year only put up to 8000 into a Roth IRA for not only myself but also for my spouse. Now if I’m over that 210 $220,000 adjusted gross income. I’m not allowed to put money into a Roth but 401k has zero income limit, wow, you could be making hundreds of 1000s of dollars and just tell your administrator, I want to switch my contribution from the traditional 401 k 403, B or 437 to the Roth, tell him you want to put the maximum, especially in, if you’re in that retirement red zone, you’re going to be retiring within the next five years, 432 years, put as much as you possibly can in there, then we don’t have to worry about doing Roth conversions. Okay, now for the rest of you. The rest of you that have over 500,000, in a traditional 401k, or even one 1.52, sometimes we have folks that are been contributing for 2530 years, they have literally seven digits, and I’m talking high seven digits 2.4, you have a serious tax problem that you don’t even realize, even though you plan on taking distributions from these IRAs after you retire, because maybe you probably don’t have a pension, you need to look at what your potential required minimum distributions are going to be. Not only in your 70s, but in your 80s. And then if you’re married at the death of the first spouse, the surviving spouse not only has to file a single return, but they have to take on all of those RMDs. And I’m hearing nightmares, nightmares of folks who come into the office. They’re in their 80s they come in with their kids, and they’re like, What do we do mom doesn’t need this RMD and after dad died a couple years ago, her tax back bracket tripled. Wow. Okay, so let us come, come on. And let’s talk about number one, how to execute and construct a tax efficient Roth conversion plan. But in the meanwhile, contribute as much as you can into the Roth 401 K for three B and 457. Plan. You will thank yourself later.
Perfect. Well, Phil, I can’t believe we’re almost to the end of another amazing episode. This week. We’re gonna say goodbye to our viewers in just a moment, but you have a very special offer.
Yeah, folks, we have a couple of spots left, give us a call, dial 888-818-6557 or snap the QR code. We’re really looking forward to meeting, meeting you, our staff that they’re all licensed, they’re all friendly, and they’ll treat you just like family. So, treat yourself and your family to a nice surprise and give us a call and come in for a complimentary consultation.
Phil, thank you so much to our viewers at home. Be safe, be happy and be blessed. We’ll see you back next week on retire smart Austin. Take care.
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