3.3.23: Audio automatically transcribed by Sonix

3.3.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Retire 360 with your host, Dwight Mejan. Dwight is a licensed fiduciary and financial advisor who always places your needs first. Dwight works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you, too. So now let's start the show. Here's Dwight Mejan.

Dwight Mejan:
Well, good afternoon and welcome back to Retirement Radio. My name is Dwight Mejan and I'm here with Mitchell Keiser and our executive producer, Sam Davis. We appreciate you tuning in this Sunday and listening to what we have to share with you. We've got some great stuff planned today for the show. Our show title this week is Do you have a retirement tax bomb? And we're going to talk about some tips for diffusing and preventing taxation in retirement. So you want to learn more about us? I want to welcome our first time listeners maybe that are joining the show for the first time. You can check us out on our website, our website, Retire360Show.com you can also reach out to us by phone. We are broadcasting from downtown in southern pines and we are at (910) 235-0812. We absolutely love hearing from our listeners, but my name is Dwight and I'm here to help you. As we like to say, this is not Dwight or Mitchell's show. This is your show, and we want to bring you topics and information that are relevant to where you're at in your stage of life and in your journey here in this thing we call retirement, whether you're still working, whether you're rounding third base or whether you're at home plate already getting ready to to hang it up. We want to be there for you and help you and deliver some helpful information that will help you get to where you want to go and help you win with your money.

Dwight Mejan:
So welcome to our long time listeners for for those of you that are joining back, we appreciate the time that you take out of your afternoon to hear what we have to say and share with you and many of what we plan for this show. Much of our content comes from our listeners who want to hear some things. So if you want to catch up to a little bit of what we're doing, anywhere you listen to podcasts, you can download us. You go to Retire 360. Just put that in the search and you can check back some of our prior shows and listen there. You can also check out our YouTube channel. You can see us there and subscribe to see Us Weekly. We appreciate that as well. But just search Retire360Show.com or on the podcast, Retire 360, but reach out to us. We absolutely love hearing from you. And just a special thing I want to mention to our listeners that we put together on last week's show. We mentioned this When you get in touch with us, we want to get you a free copy of 23 retirement cost cutters for 2023. This is something that we'll get to you. If you have email, we can email it to you. If not, we'll mail it to you.

Dwight Mejan:
So just contact us. It's packed with ideas for hanging on to more of your hard earned money on today's show. Just a quick outline here. We're going to talk about the quote of the week. Mitchell's going to kick that off. We're going to talk about Unretirement and we'll learn a little bit about maybe some of you are thinking about going back to work. So just some things we want you to be thinking about. If you're thinking about getting back to work. We're also going to look at financial help for business owners. So you definitely want to stay tuned for this week's show. If you're a business owner, we've got some good stuff we want to share with you. And also we're going to talk about diffusing retirement tax bonds. This is basically helping you prevent future taxation where it can be avoided. And we're going to talk about the national debt and unfunded liabilities. We're going to take a quick peek at the current numbers there. And if you're forced to take a pension and you have no option around that, we've got some options we'd love to help you with in that area as well. And if we have time, we'll take a look at annuity x ray and This Week in History. But I'm going to turn it over to Mitchell. He's going to share a great quote of the week.

Producer:
And now wholesome financial wisdom. It's time for the Quote of the Week.

Mitchell Keiser:
All right. Got some good stuff for you. So the quote of the week. Be decisive. The road of life is paved with flat squirrels who couldn't make a decision. That's a good one. It's a little morbid, but there's a lot of truth to that in, you know, making a decision. We were talking before the show of people waiting for different landmarks before they made certain decisions, whether that be with investing with their insurance, life insurance. We find an excuse for just about anything.

Dwight Mejan:
Absolutely. Well, we were talking, Mitchell, like you said before the show. And, you know, one of the things that stood out when I heard this quote, this week's quote of the week, the indecision is really something we can apply to different aspects of life, not just financial retirement planning, but any area of our life indecision. It really is a decision. And I will tell you for 30 years doing this as a fiduciary, that I find that the decisions people fail to make are the ones that cost them more money. I was thinking about that a lot when I was reading this week's show in the notes. Is that really, you know, a lot of people think it's you know, they they get afraid of making a decision because they maybe made one and it cost them dearly. And I'm not trying to make light of that or minimize that if that's somebody who's listening to this show right now. But given new information, it's very important to stay on that treadmill, so to speak, of making decisions. Let the bad decision teach you something about how to do it different next time. But don't let it cripple you from not making a decision because you'll end up like that squirrel. Right? And we don't want to sit there And.

Mitchell Keiser:
You know, Dwight, my my dad used to always tell us, you just made me think about it. Growing up, whenever we'd make an excuse for something. My dad used to always tell my sister. My brother and I. Excuses are nails that build the house of failure.

Dwight Mejan:
There you go. That's a wise dad speaking right there. That's really good. But, you know, we also were sharing a little bit and this is along those same lines is we're going a little deep here. But regrets, you know, regrets fall into two categories is the things that we did that we regret and the things that we didn't do that we regret not doing. And I've had the privilege of doing this for 30 years and speaking to clients who have shared with me a ton of wisdom, not just in the financial realm. You know, people think, just because I'm doing this show with you, Mitchell, that I've got all this experience, I got all these answers, I've got some answers in life, but I don't have all of them and I don't have all of them in the realm of financial world to I just want to make sure our listeners know that. But what I do know is this, is that as I've asked questions to some of the people I really respect who are clients of mine that I've gotten to know over the years, I've had the opportunity to ask that question to people and just ask them, Hey, the decisions you've made, do you regret the ones you did or didn't do? And overwhelmingly, which one do you think? Mitchell Do they pick the most? I would guess that.

Mitchell Keiser:
People would say things that they didn't.

Dwight Mejan:
Do. It's correct. It's like 80% the things they didn't do. And I just want to tell you, as a host of this show, as somebody that, you know, just kind of guides where we're going in this show week to week is don't let that be. You get on that treadmill and start making decisions in life. You know, you got to have core values that you run those decisions through. You got to have goals and you got to have a you got to have people in your court. I've got to have people in my court in areas where I'm not an expert or I don't have all the answers. And that to me is just building trusted relationships. And that's really what it's all about. Anything to add on that? It's a great quote, Mitchell, that you share with our listeners. I hope people take that to heart.

Mitchell Keiser:
Yeah, no, that's it's good stuff. I think next, we're going to talk about heading back to work, people trying to come out of retirement that thought that they were in the golden years weren't going to look back at a job. And, you know, after getting into retirement, people are second guessing themselves, which I thought this stat was interesting. It says 1 in 6 retired Americans say they're mulling over whether to get a job and that's according to paychecks. And then I don't know if you'd ever thought about it, but what would you have guessed the initial reason would be for somebody going back to work? I would have guessed probably.

Dwight Mejan:
I would say because they're bored or they they may be maybe with inflation right now, maybe they need the extra money. I would say boredom would be a big one.

Mitchell Keiser:
You know, top ten reasons, which I would have thought it was financial people, you know, because we see a lot of people that come in with their portfolios and, you know, they think that they want to, you know, use a certain lifestyle or continue to live it and they run out of money. But actually, a majority of the reasons are personal getting bored, feeling lonely. Some people liked working, thought all these stats were pretty interesting. But I guess being around older relatives, even grandmas, great aunts, just hearing people that they feel that they have a lack of purpose. That was a big jump that I made, but I think it kind of stems to that they feel like they don't have a purpose or a community anymore. I think they're getting bored was pretty interesting. So we have some tips that we're going to go over with that. The first tip is if you don't need the income, consider a low stress job. Now, I'll tell you, one of the stats in the statistics that we read from Paychex is what kind of positions are people looking for for employment? 65% of the poll was looking for a mid-level position. So not the entry level stuff with all the kids and not the manager positions. They want something that's low stress. So if your reasons for considering work are non-financial, you're not alone. If you're seeking work for fulfillment, it's worth considering a job that's low. Stress provides flexibility whether you need the income or not. It's also important to know the impact that you could have on the other parts of your financial picture. I know just with that tip and I'll let you get to number two, is if you do take a job and you are receiving income, you will also qualify to start funding a Roth account after your is it I believe it's 59, you can fund up to $7,500. So that would be tax free. And the growth is tax free money.

Dwight Mejan:
Yeah, that's good stuff. Mitchell Number two tip, and we teach a whole class on this with Social Security, but extra pay can shrink Social Security for early claimers. You know, we talk about this a lot. Mitchell We do a several different courses that we teach, you know, to the community and surrounding area. But we teach on Social Security. A lot of people don't think Social Security can become taxable when you retire. And there's a formula. We don't have it really planned on today's show to discuss this, but there's something called provisional income in which that determines what, if any, of your Social Security is going to be taxed. And it's basically taking half of the amount of Social Security that you do have right now. So if you make 30,000 a year in Social Security, they take half of that number, which would be 15,000, and they add it to all of your other ordinary income that you get wages, distributions from IRA accounts. They would even add into that non-taxable investment income like municipal bonds that would get added back into that formula. And then they have thresholds that they start to subtract. And then any income you have that's over that threshold begins to be subject to Social Security. So many of our listeners who listen to this, some are taxed as high as 85% of their Social Security benefit is taxable. Some aren't taxed at all.

Dwight Mejan:
And many of you are paying somewhere in between that zero and 85% extra pay can shrink Social Security, especially if you claim early. That's the key here. So if you tap Social Security and you're not yet at your full retirement age, full retirement age for people listening to, this is either 66 and certain number of months, ten months or it's going to be age 67, depending on the year of your birth. If you take Social Security early, what could happen is depending on how much income you make and that could be know income coming out of an IRA or other income. If you continue to work, some of that Social Security check could be taken away. There's certain thresholds that we look at here, but that's why we talk about delaying Social Security as long as possible as a means to higher monthly paycheck. And many people take it as soon as they can, like at 62 or soon thereafter. And if you start getting those monthly checks early, the limit on how much you can earn from from working without your benefits being affected is basically $21,240. So if you get above that 21,240 for every $2 over that limit, $1 of your Social Security benefits is going to be withheld. So it's a big deal. It's a really big deal. And that's why it's very important when you start strategizing in retirement and you're thinking about taking Social Security just because, well, I've got my full retirement age, I want to get my full benefit and I'm going to keep working.

Dwight Mejan:
That may not even be the best opportunity. We had a client, I had a client of mine who's been a client for about a year and a half who's getting ready to retire in January of 2024. He came to the office on Saturday morning and his objective was he told me, I said, What are you thinking of doing as far as your income stream? He said, Well, my goal is I'm just going to take 2000 out of my portfolio and I'm going to start Social Security January 1st. And I said, okay, are you open to different ideas around that? Because I knew what his assets were, I knew what his goals were. And in the matter of about 30 minutes, I laid out for him on the whiteboard in a PowerPoint, the fact that if he delayed this, what his income was going to look like, and he had a sizable difference and folks here was the most important thing. He looked at that from a different vantage point. If I showed him what his taxation was going to be on the tax return, if he did what he was planning to do and what I showed him was an opportunity to delay that Social Security to age 70. I showed him exactly where the income was going to come from.

Dwight Mejan:
And then here's what he really loved. He liked that at age 68, 67, 69 or 70, if he decided to pull the trigger on the other portion of his guaranteed income that we were going to trigger by delaying his Social Security. And I showed him where his total 4000 a month was going to come from. That did it? Him right there. He says, You mean I can elect If I don't want to wait until 70, I can turn Social Security on at 68 and I can get my income through this method that you're showing me. I said absolutely 100%. And it was eye opening to him. And his words were, I'm glad I came in. He says what I thought I was going to do. I now understand I need to do it differently. That's the benefit of getting that second opinion because it's so random sometimes of what people and how people think. They should just harvest money out of that portfolio. They really don't know how they're going to get it. And our objective is always to explain not just the where it's going to come from and how you're going to get it, but why that method might make better sense than what you might be considering. And all we'll simply do is lay that out there to you. So Mitchell, you've got another tip for our listeners.

Mitchell Keiser:
Yeah. So in addition to that kind of what you were saying, with extra income from a job potentially pushing you into a higher tax bracket, all of that could actually trigger additional costs to Medicare. And that's tip number three. Medicare premiums could be affected by this as well. A lot of people don't think, you know, when you're you're doing your retirement planning, you don't think about your health care and how when everybody goes on to Medicare, you do have to pay for your part B premium. And how could that be affected by your income? Because it does matter. Higher income earners pay a premium surcharge of Part B and Part D Prescriptions and extra charges start for those that are over $97,000 for individuals up to 194. And I'm going to go over those in just a second of what that can look like. So basically, the concept is individuals that have a higher income are going to pay more for their Part B premiums or individuals that are doing Roth conversions that are not strategic or people that are pulling IRAs or I had a situation actually earlier this week, there was a couple that came up to me and they were very strategically trying to plan for Social Security and for Medicare, but they had a the death of a relative. It was a parent and they left him some money.

Mitchell Keiser:
Well, they took that all that money as income in one year and that pushed them into like two tax brackets higher than they should have been. And now they're paying like a couple hundred dollars more per month just for just for Medicare. And they said they're like, what the heck is this? We just got this letter and they're like, you know, we tried to take them to court and they couldn't do anything about it because the income was what was what it was. They already took it at that point, which is why all of that stuff is important to kind of plan ahead because you never know what's going to happen. And if somebody dies, especially if it's a parent or a close relative, times are very emotional, which is why, you know, it's good to be preventative and to think ahead and to try to get with somebody that you trust and is going to have your best interest way before something like that happens, because then you just have to make a phone call and they're going to give you good advice and they're going to hopefully help you save money in the short term and in the long term. So here's just a brief example where you're going to say something. Yeah, no.

Dwight Mejan:
I was just going to say, Mitchell, you know, you bring that up about what you were saying about Medicare and just the affected premium being higher. You know, we're in this season of tax season right now, and we were just sharing this with a group that we spoke to this morning about that. And what we were sharing with them is a lot of times when do you find out that there was a mistake made, you know, on your portfolio or how you withdrew money? You learn about it when it's too late, when it's too late, when when the tax return comes back, you go to pick up the news. You run by the CPAs office, you pick up the tax return and there's this shocking surprise. It's either a higher Medicare premium, it could be a higher tax bill that you have. And a lot of our listeners, they're not aware of how even capital gains that's confusing to a lot of people that your ordinary income, what you make and what you withdraw from your IRAs, you could create a capital gains tax because most people say, well, I got to sell something in order to have capital gains. Well, not necessarily. You could have something sold inside of a non taxable account, like a mutual fund, have a capital gain on that. And you're like, well, it's not that big because I know my capital gains rate. I've got to be at $89,000 of gain before I start paying 15%. But they take your ordinary income, your pension, your withdrawals from your IRA, some of your Social Security, if it's taxed, that can push you into capital gains brackets. So again, I don't mean to go technical there, but it's just important that you seek that advice before you make decisions. You know, like keeping an inherited IRA as an example, We see quite a bit. People inherit money and they just throw it in their checkbook, you know, and it's just another mistake that could end up happening. But I just wanted to add that, Mitchell, to what you were saying. With Medicare, we see that happen quite a bit.

Mitchell Keiser:
Yeah, no, you're right. You know, I never even told you this. Dwight. My grandmother up in Pennsylvania called me one time and she asked me what I knew about taxes and Medicare. And it was exactly this topic. And what happened is they had a rental house that they were basically tired of dealing with tenants. Both my grandparents were. In their 80 seconds at this point, and they were sick of dealing with the tenants and the labor and all that stuff. And they had people move out and they didn't they didn't want to deal with it anymore. So they said, you know what? We're just going to sell this house. So they sold the house. They put the proceeds in their checkbook, and then the following year, their Medicare premiums doubled. And she called me and she's like, you know, what do we do about this? How do we get this down? And unfortunately, like you just said, you call me when it was too late because you already took the income. And yeah, so they're now they're paying, I mean, thousands of dollars because they didn't have somebody.

Dwight Mejan:
You're absolutely right.

Mitchell Keiser:
That helped them. But, you know, that's that's just such a prime example of just the small detail of when you get into retirement, like, oh, I'm just going to sell this this house because a lot of people have rental houses as supplemental income. But how feasible is that later into retirement? A lot of times people dump them, but if you dump it, it's going to create a big taxable, big taxable event. But same thing, you know, with certain IRAs or certain positions that you have in different places. You have to know how to strategically take it. I said I was going to give somebody an example of what that looks like. So you don't start to get these adjustments until if you're single, it's $97,000. Once you are over that, you're going to get about a $65, $66 bump and then married filing jointly. Those are the two most common. So that's why I'm going to read that Marrying married filing jointly is about 194. So it's about double. And then you get a bigger bump after that. If you're single and you make over 123 or if you're married and you make over 246 your increase on that. So it's going to be in addition to your original 164, they're going to charge you another 164. So again, if you have if your income is normally not that high, but you sell a house or you do something and it pushes you into this tax bracket, they will charge you per individual. 164 in addition to your already 164 per month. And that that goes up all the way, just so people know, that goes all the way up to $560 depending on how much money you make. I mean, they it could really mess somebody up. And 560 just a quick calculation for the folks listening, That's I mean, that's over $6,000 a year. So I mean, it's pretty significant to not know what you're doing in that area. Well, it's.

Dwight Mejan:
A it's a great point, Mitchell. It's there's a cascading event that takes place when you make decisions that that are on the tax return, like Roth conversions. We're huge fans at 360 capital management for people who do Roth conversions. But even within those conversions, there's a strategy and things that need to be looked at on the tax return so that you don't impact these other areas like Irma. That's what we're talking about is the Irma issue here where you could pay more in that Medicare tax. So just very important that you seek professional counsel when you're doing this. Don't know if you have anything you're going to add there. Mitchell We're going to go to a break here. Anything else you want to add?

Mitchell Keiser:
No, that's it. If you guys have any questions about Medicare excuse me, I'm our Medicare expert here at the office. You can always just give us a call. Ask we don't charge for advice. Our office number is (910) 235-0812. And you can check us out at Retire 360. Show.com, just send us a message. Let us know that you have some questions about medicare and we'd be happy to help.

Dwight Mejan:
Great. We're going to take a break. And when we do, we'll come back and we'll pick up where we left off.

Producer:
Is your house too big for your current needs? What about your current budget? I'm Matt McClure with the Retirement.Radio Network. Powered by a mirror life. As our circumstances change, so do our needs In retirement. It's likely you'll no longer need the five story, two bedroom home you've lived in since your kids were all in school. But it's not just the size of the home that can be a consideration in deciding whether to downsize.

Sandra Rinomato:
Some people are living in a situation where the house needs a lot of work. It's time to renovate the kitchen. It's time to put on a new roof. And they they think, do I spend that money? Do I have the energy to do that? Maybe I should just move instead. Real estate.

Producer:
Expert Sandra Rinomato told CBC News that selling your home and moving into something smaller can be a good way to free up cash in retirement.

Sandra Rinomato:
By selling the house that liquidates gives you the money to live a lifestyle that you've dreamt of your whole life.

Producer:
A smaller place is also cheaper to heat, cool and maintain. Moving into an apartment or living with family members is another way to potentially save money on housing expenses such as lawn care and maintenance, experts say. To maximize your profits on the sale of your old home, keep your real estate agent's comMejan as low as possible. And there are companies out there that can help if you decide downsizing is right for you, So could cutting the size of your home help keep your retirement budget in check? That's a key question to consider. And it's one of 23 retirement cost cutters for 2023 with the Retirement.Radio Network powered by AmeriLife, I'm Matt McClure to get your.

Producer:
Free copy of 23 cost cutters for 2023 call Dwight today at (910) 235-0812 Or visit Retire 360.

Producer:
Show.com you're listening to Retire 360 with Dwight Mejan now back to the show.

Dwight Mejan:
Well welcome back to the Retire 360 show I'm your host Dwight and alongside me Mitchell Kaiser my son in law. Thanks again for taking time out of your day to listen to what we have to share with you. We hope it's relevant to your situation. I want to just before we launch into the next segment here, I just want to give kind of a state of the economy update right now. We've had some response from listeners that like to know a little bit from our perspective or our broader view of the industry's perspective on what's going on in the economy. Just to kind of go there here for just a minute or two, you know, the US economy has really been sending some mixed signals to us since the start of the year. And really the question I want to answer is, what's this all mean right now? If you've been watching the markets, you saw the first six weeks we started seeing, hey, maybe we're going to have this soft landing. I was talking about that last week. You know, there's hard landings where we could end up seeing, you know, more extensive job layoffs, not just in the tech sector like we're seeing right now. That tends to be where it's the heaviest. It's hard to fill some of these service sector positions like restaurants, hotels. They're having to pay higher labor just to retain some of these people. But how do we it was looking like even to me, like, hey, could the Fed pull off this soft landing where the raising of interest rates at unprecedented levels here, where we were going to kind of get through this and pull this economy back and we're not so sure of that here anymore.

Dwight Mejan:
But for a few weeks, you know, in late January, early February, the US economy seemed to have reached really a rare sweet spot. Inflation was steadily slowing from some painful heights and growth and hiring had remained surprisingly sturdy, despite some higher interest rates that were imposed by the Federal Reserve. So the Fed, as I said earlier, was managing to possibly nail this difficult soft landing, which is basically we're borrowing and spending slow, just enough to tame inflation without our economy dipping into a huge recession. That's the way it was looking. So the financial markets were basically roaring with approval. The first six weeks here of 2023, stock prices were starting to surge. We started seeing an S&P that was up over 6%. On expectations that the feds might soon pause and eventually reverse this series of aggressive interest rate hikes that began about a year ago. And then something went wrong. And where that went wrong was right around Valentine's Day. What happened is the the government watches closely the CPI, the consumer price Index. What happened is it had surged from December to January to a half of 1%. That doesn't sound like a lot, but that was five times the increase from just the 30 days period period prior from November, December, and over the next week and a half, approximately two more government releases told essentially the same story, and that is that the Fed, their drive to curb inflation, it wasn't even close to being one.

Dwight Mejan:
That's basically what came out of that. The realization brought basically some worry from investors that if inflation was even stickier than what was thought was. And it was going to be then the Fed was possibly going to keep raising interest rates and keep them high for longer than what was planned. And those those higher borrowing costs that get passed down to all of us as consumers, businesses, corporations, that would make it more probable that a recession might happen and then there would be ensuing layoffs and business failures might occur. So this has really put the Fed back in their defensive mode and tell you they're in a very sticky spot right now because they're going to have to really harden their resolve on rate hikes. And what I've been reading and in some articles is we may see the next Fed meeting. We may see them raise rates another half a point. And the more we continue to see that happen, something's going to break in that environment. We hope it's not the economy, but when you keep having to raise rates and this is what's crazy, we have a strong labor market right now. I read something this past week that said for every unemployed person right now in the United States, there are two vacancies in companies to fill that one person's unemployment.

Dwight Mejan:
So there is a very robust labor market happening right now. So if we continue to see the Fed's having to raise interest rates, their target was to get it around that four and one half to 4.75%. And if they got to put the gas pedal back down, that's our concern. It's many economists concern is that we could see a tipping point in the breaking point. You know, I kind of equate this to kind of the feeling that was in the mortgage crisis back in oh eight. A lot of different things going on, different there. We don't have time to get into the comparisons of that today, but eerily similar without some of the specific things that that I'm talking about here. But it's got that eerie feeling again, like, hey, this could go either way. Could we have a soft landing or maybe a little bit of a bumpy landing and pull out of this? Possibly? It's still too early to tell. And there's some more indicators that still have to come out. But the word is from us here at 360 capital, be cautious. Okay. That's what I want you to take from this update. I go back to the.com. We call it the dot bomb crisis back in the 90s. Again, different circumstances happening there as well. Not not related to the same things even close to what we're dealing with. But the point is we could reach a big tipping point and I don't want to see, especially those of you that listen to this show, I don't want to see you get clobbered.

Dwight Mejan:
So if you feel like and you're taking too much risk in that portfolio, there's the old charter commercial that you've seen on TV. If you don't get help at Charter, please get help somewhere. We'd love you to get help here because we're not going to charge you for it the time that you come and talk to us. And I'm just going to encourage you, if there's something I've said in this last little segment that's making you say, hey, this is that little voice in my head that's been speaking to me the last month, six months, a year, and I haven't done anything different about it, or my advisor is just telling me, hang in there, we'll get through this. But you're wondering, hey, I don't think this feels right to me, then I'm just going to encourage you pick up the phone and dial (910) 235-0812 and just tell us. Hey, I'd like to get that complimentary review. Give me your thoughts on my portfolio and we'll be happy to do that. We'll lay it all out for you. You can also go to our website at Retire 360. Show.com there's a little tab down there that you can just book a complimentary consultation. You can get right on our calendar. We'll reach out to you to confirm that appointment and we'll tell you what you need to bring into the office and we can do it over Zoom as well. So just encourage you to take advantage of that.

Dwight Mejan:
So that's a little bit of a market update right now. But I want to shift gears here for a moment, and I want to speak. Specifically to those who are listening that are business owners. So if you're a business owner, I want you to pay attention here. If you're self-employed, here's what I want to talk to you about. If you if you've got a stack right now of 1090 nine seconds and other tax documents this time of year, don't look past the importance of working with a financial planner. Okay. Many of you, we understand what it is to run a business. We do that here. But many of you, you know, you're looking at your tax liabilities and it's a lot of work to run a business, especially if you have a fair amount of labor and employees. You're pulled in so many different directions. So we we empathize with you on that. But as advisors and financial professionals, we can help you navigate some unique challenges of being a business owner and take advantage of retirement savings strategies that are made specifically for you. And I'm just going to suspect that there's somebody listening to this show right now that is a business owner and you are behind in your retirement, but perhaps your business had one of the best years it had in 2022. And you're wondering, hey, we've got some cash. We're pretty fat on cash right now. And the business account and I have no idea how to deploy this money into a retirement plan that's going to give me guaranteed income for the rest of my life, help me grow some capital to grow some assets responsibly in the market.

Dwight Mejan:
I just don't know how that all fits together. Well, if this sounds like you, we recommend definitely forming your own LLC. If you don't have that and paying yourself first each month while also making regular contributions to the right tax advantaged retirement plan. And I'm going to just tell you, if you're that person that is sitting pretty heavy in cash right now and you're looking at the prospects of paying a lot in taxes, I'm going to tell you, there are some financial retirement instruments, some plans that we can help you set up that would allow you to take as much as 40% maybe of the net profit from your business. And defer income taxes on that. So you have a lower tax bill for 2022. Many of you know you can file an extension if you need time to put that together to get some of those documents in. But please, by all means, if I'm speaking to you and you say, Hey, this is me, I'd love to know how to put aside a large amount of money and we're talking about the amount beyond your sep a sep. I think you could put somewhere around 58,000. I might be a little off on that of money into a pre-tax account, but if you have a lot of profits, you may be, may, may be able to put 4 or 5 times that amount into an account and have that tax deferred for some time down the road and not worry about paying taxes on it this year.

Dwight Mejan:
So just something to keep in mind. So I'm going to encourage you, if you are that listener, to reach out to us, just come to Retire360Show.com or call that office number (910) 235-0812. One other tip I want to give you. If you are a business owner and you are making those contributions right now, make sure that you're making contributions monthly. And rather than doing it all at once, that's going to help reduce and manage your risk. This is basically called dollar cost averaging, where you're buying into shares over different pricings over a period of time. That's just going to help you. So the bottom line, if you are a business owner and you're not consulting with a financial advisor professional, please reach out to us and we'll help you start setting up your retirement income plan. So do you have a retirement tax bomb? We mentioned at the beginning of the show we wanted to talk about tips for defusing a potential tax bomb. Well, because they offer tax free qualified withdrawals, Roth IRAs and Roth conversions can be a critical strategy for diffusing the retirement tax bomb. The traditional IRAs, 401 K's and other pre tax accounts can set you up for in retirement. So why does this matter? It can protect you from future tax increases by the federal government.

Dwight Mejan:
You know, the goal, as we always talk about you, there's only three buckets. Your money can be in for retirement. You can have your taxable bucket, which is money that would maybe just be sitting in a checking account or savings account or a money market account. Then you can have your tax deferred account, which is usually what we see, the biggest accounts that people come to us with. That's the money that you saved pre tax through your 401. K, your 403. B, your 457 plan. The goal is to get it all over to the Roth bucket, the tax free bucket. And that's the bucket that you want to have money moving into. But there's a strategic way to do that and to set that up. And the other thing is, if you don't have that bucket set up yet, real important that you just set the account up and get a little bit funded in it because you can't pull money from that account from a Roth account until it's been established for five years. Okay. So there is some time restrictions on that. So. Really important if you don't have that Roth account, but you're thinking about doing those conversions, get the Roth account set up. Doesn't cost anything to set up that Roth account with most firms, and we'll be glad to help you do that. So the national debt right now, this is a startling statistic. We always encourage people to go to the US debt clock.org website.

Dwight Mejan:
You can go there and find some interesting facts on that. But our national debt right now is currently $31.6 trillion and we have unfunded liabilities right now in the United States of $182 trillion. Some of you are going, what is an unfunded liability? These would be examples of perhaps a federal department that has pensions and the money is not in those pension accounts currently to pay current beneficiaries amounts that they are owed. So it's basically money that should be sitting in accounts to pay liabilities that they're going to have over a period of time. But they've been borrowed from and taken out of for a long, long time. So but I just encourage you go to this US debt clock. Org and you can see some really really interesting statistics on there. They've got all kinds of stats that are broken down. I'm looking at them right now on my computer screen, but it's got some really interesting things here. For example, in North Carolina, we've got a population right now of 10.7 million people unemployed, 150,000. We have 1.4 million food stamp recipients. And our GDP here in our state, gross domestic product is 711 is that billion looks like billion dollars. A lot of money debt, $50.2 billion. And our debt to GDP ratio is 7.16%. So interesting stats there. Mitchell's going to update us here on some windows for Roth conversions. We're going to talk about that. So, Mitchell, why don't you share with our listeners about some of the Windows for Roth conversions that we share with our listeners?

Mitchell Keiser:
Yeah, so you've got three that we're going to go over today. The first is for Roth Conversions is talking about Medicare. So I touched on Medicare a little bit earlier, but now how that pertains to Roth conversions is kind of similar. Recall that I was talking earlier or I didn't get to this earlier, but we were talking about when you take money as income or when you take an account and put it into your checking account and you have a big tax bill. So if you're trying to plan prior to Medicare ages, don't forget there is a two year look back. So your income at age 63 determines your Medicare Part B and D premiums when you're 65. So if you think, oh, well, as long as I get that all done the last three years before I turn 65, you're not thinking about it correctly. You need to be thinking about it. 62 and earlier. So the prime age for Roth conversions, if it's not if it's not too late, is between retirement and age 62. And that will be if you get it done by 62, then your Medicare premiums are not going to be affected by it if that pushes you into that higher tax bracket. So, yeah, that's something that you want to consider as you are approaching that age.

Mitchell Keiser:
I know we had some clients coming in that they had to they had to make a lot of big decisions because they were getting closer to that age and they wanted to take advantage of Roth conversions, but they didn't want their Medicare premiums to go through the roof because they, like most people, once they retired, their income was actually going to go down. So they didn't want to, you know, do something today that's going to put them into a higher tax bracket or then tomorrow they're going to have higher premiums because because they were in that higher tax bracket. So, again, that's just something you don't typically think of. Just throw this out there under certain circumstances. You can appeal the Medicare means testing through a form with the IRS. It's called the SSA Dash four four. But as a general rule of thumb, I would just tell people so they don't have to worry about that appeal. Look at the two year look back or just keep that in mind when you're planning for retirement two years before Medicare, when they start looking at your income to determine how much your premiums are going to be.

Dwight Mejan:
You know that little phrase, Mitchell, means testing. We're going to start hearing a lot more about that. I know we talk about it a lot on this show, but unfortunately, I feel like we're going to hear more about means testing simply because we've got this dual play going on right now, so to speak, of an aging population with baby boomers. And we have a smaller tax base in this country. You know, family size has gotten smaller, so that tax base is shrinking. So we've got more people coming into these programs with unfunded liabilities, a large national debt and promises that are being made, you know, through Social Security, pensions and things like that. That means testing is going to come in and you can already see that if you go to that tsa.gov, your Social Security website and pull up your benefits, I've said this before on this program, you will see when you print out your benefits, the last page, there's going to be something on there that says we have enough funding to meet until 2033. At that time, $780 per 1000 of your benefits. So they're basically preparing people for a 22% cut. I'm not saying everybody's going to get that, but I think what is going to start coming into play is more means testing. And I think means testing could also come into play, which it does already for your Medicare premium, which is one of the things Mitchell's talking about. But they're going to start playing around with these brackets more to basically say, hey, if you've got a high income, you're going to have to pay more for these services. So because of that higher amount, folks, it's all the more reason to be paying attention to what we're sharing with you right now to look at those Roth conversions and get it to where you're on your tax return down the future.

Dwight Mejan:
When they have that happen, they're telling us we got ten years right now for that Social Security plan, for that, we got a great planning window for ten years to make it look like on that tax return, we don't have a lot of taxable income. Therefore we won't be subject as much to the means testing, which will reduce some of those benefits that you've paid into over those working years. 40 years of working. You've paid this Medicare tax and all they're going to do is take it away from you possibly. Okay, We want to help you avoid having that happen. So the second window for Roth conversions is between retirement and when you start taking Social Security or pension income, at which point your income might be significantly higher and you may want to do smaller Roth conversions. So we we like to say this is the other argument for deferring social Social Security benefits for many years, trying to get to age 70 and using some of your ordinary income, which might be money, for example, that would come out of your 401. K and looking at how can I live off of that money? Can I maybe live off just the interest from that money? Is that possible? That's something we could show you. Can we get enough of guaranteed income from that 401. K live on that and then get that guaranteed raise in Social Security or even if you have to deplete a little of the 401. K, those are things that we look at with our listeners when they come in for that complimentary consultation. So Mitchell, share with our listeners the third window.

Mitchell Keiser:
Yeah. So the last window that you have to take advantage of lasts until the required minimum distributions, the RMDs, that's our biggest question. So the Secure Act 2.0 just changed the age to 73. It was 69.5. I think it was 71, 72. Now it's 73. When you're required to start drawing out of your IRA usually starts around 4%. So if you're still sitting on a large retirement tax bomb, at that point, the conversion window probably closed if you can help it. The goal is to probably try to do your Roth conversions and to get money into that tax free bucket before age 73. Now, that's not to say that there's no hope or that you can't still do it, but the goal is to try to get it done before then, for sure.

Dwight Mejan:
Yeah. When's the last bucket of those three buckets we talk about on this show? Your taxable bucket, your tax deferred and your tax free. Given the chance, most people are going to postpone pulling money out of that tax deferred bucket. And if you don't think the IRS knows that, why do you think they might be pushing back RMD ages to 75in 2033 because they know most people will wait to pull money out of that and then when they start finagling some of the rates and the threshold limits, they know how much they can capture from those accounts because they got an estimate based on how much they grow inside the average retiree's account. So it's just more money coming down the road when they need it. Okay. That's that's our belief. We don't know what they're planning, but that would appear to be one of the reasons why they are saying, hey, don't worry about taking this money. And if we pull the listeners, if I could have you all raise your hand right now. If you're driving, keep one hand on the steering wheel. But if you think. Taxes are going up. Raise your hand. Okay. I can't see everybody, of course, but I can tell you most hands are up because when we do this live like we did this past week, in event, every hand in that room went up.

Dwight Mejan:
When I asked him if taxes were going up, if they felt they were going to rise, then I asked the room this question How many of you strategically have a plan in place to move money over into a Roth account to minimize your lifetime tax liability? Guess how many hands went up in that room? Not one. Usually there's 2 or 3 in a room that size. There was not one hand that went up. So we acknowledge in one front that, yes, taxes are likely going up, but our practice in the other is we haven't gotten anything started. Okay. We'd like to help you get something started. At least look at it through the lens of saying, what could we potentially save if we do this thing called a Roth conversion? What does that even look like? Okay, book that complimentary consultation, go to Retire360Show.com or call us directly here at (910) 235-0812. We'll take 30 minutes have a cup of coffee. Happy to meet you over Zoom and we'll see what that looks like for your situation. More importantly, we'll answer your specific questions when we come back. We're going to wrap up. We're going to take a quick break.

Producer:
Are you interested in protecting your assets from market volatility, rising taxes and economic uncertainty? Then tune in to Retire 360 with Dwight Mejan to learn how you can protect and grow your hard earned money. Retire 360 Sundays at 3:00 pm right here on Talk 97.3 FM 104.1 FM and 990 AM WEEB. Protect your hard earned money today at Retire 360. Show.com helping bring you one step closer to financial freedom. You're listening. To Retire 360, here's Dwight Mejan.

Dwight Mejan:
Well, welcome back to our last segment. I'm your host Dwight Mejan here alongside me, my son-in-law, Mitchell Kaiser, our executive producer Sam Davis. Always appreciate these guys and what they do to support me and support this show and support you, the listener. So thanks to you all. But just a listener call out here. If you are being forced here to take a pension. I want to talk to you folks here for for just a moment. If you're current or former employer is requiring you to start taking a pension, we can help you reinvest that monthly income in a tax efficient manner. You know, we hear from people quite a bit that say, hey, I don't really need this income, but it's being forced on me because I'm at the age where they have to pay it out. I cannot defer it any longer and I really don't need the money. Well, you have more options than you think and we want to help you make the most of it and help you understand those options. One of those options might be to take a look at what's called indexed universal life insurance. You know, we say on this show all the time, there are only two instruments where you can accumulate money tax free.

Dwight Mejan:
One of them is the Roth account, which we talk about a lot on this show. And the second one is life insurance, okay? And it's not just through the death of that insured person where the tax free payouts made you could take money out of that cash accumulation in your living years and basically take money on a tax free basis as well. And for those listeners who are thinking, I forgot one there, and you're saying, no, he forgot one there, there's three. There's muni bonds. That is true. Municipal bonds can accumulate on a tax free basis, but there are certain parts on the tax return where you lose some things like exemptions and there are certain phaseouts. And also I talked earlier in the show about provisional income. Municipal bond interest is a calculation that's used in the provisional income formula to where you could be taxed on Social Security. So one of the reasons I don't like including municipal bond in that in that option is because of those reasons it could draw taxes on other parts of your income in retirement. So I don't like to include that in there. But also municipal bonds could face, depending on the state that they're issued in, you could pay state income taxes on some municipal bonds as well.

Dwight Mejan:
It just depends on some different factors there. So if you did think I forgot something there, thanks for Keeping me Honest here on the show. But there's only two tax free investments, like I said, that can provide death benefit to protect your spouse. That's what the life insurance can do. But also it can help you build that cash value that later on can become valuable tax free retirement income stream. So if you're being forced into that pension, I'm just going to encourage you to reach out to us here at 360 capital and we'll take a look at that with you. We want our clients to have more mailbox money paychecks and play checks as we say that they can count on each and every month to enjoy the retirement lifestyle they've always imagined. So contact us today at (910) 235-0812 or go to our website at Retire360Show.com and you can book a complimentary session with us there. Mitchell you got something to share with our listeners on annuity x ray. Why don't you tell them what you have for them there? Yes.

Mitchell Keiser:
So we had another listener call out and we're always getting questions on annuities and our thoughts on annuities. So I'm going to get into a segment called the Annuity X Ray, and that's something that we like to provide for people that are either clients or prospective clients or people that just need help. We are fiduciaries, which means that we act in the best interest of a client. And what that means on the annuity side here is so if you guys purchased an annuity within the past couple of years or if you have an annuity you know that you purchased at all, give us a call or schedule an appointment and we will do a complimentary free annuity x ray. So what that what that will look like for you guys is we're going to show you your participation rates. We're going to show you the hidden fees. And we're going to just basically dissect the annuity for you and break it down. So a lot of times when you enter into a product like that, a lot of the terminology is very confusing and it's easy to get lost in the wordage or, you know, what did I really buy? Or, you know, what is that? Am I getting all of that gain or, you know, what am I? Caps? People might not even understand that. But if you are in an annuity, there are caps to what your growth is because in most cases there is downward protection. So if you want to know what the.

Dwight Mejan:
Indexed annuity, that's correct because we got the variable too.

Mitchell Keiser:
So yep. So on the on the indexed annuity, you have downward protection as far as against market loss, but there are caps on the upside. Now if you have the type of annuity where you are losing money, that would be a variable annuity and something that we can just go over with you on that side is how much you're paying in fees. We had somebody come in a couple of weeks ago and they were paying over 4% in fees just on just on a variable annuity. So basically, if you're only if you earn 5% in a year on your variable annuity, 4% of that is already out the door gone to fees. So if that's you or if you're just wondering about, you know, what is this annuity, it's not performing how I would like it to. I haven't seen any growth on this. Or if you're in the camp where you've lost money, give us a call and we'd be happy to just go over that with you and just show you what it is that you have that's, you know, no obligation to us or to do business with us. We can just just show you just a road map of what you have and where you're going in the product that you have. If you don't know what your objective is in that. And again, you can reach us at (910) 235-0812. Or you could check us out on our website at Retire360Show.com. But again, we'd love to take a look at that for you and help you get the most out of those funds.

Producer:
It's this week in history.

Mitchell Keiser:
This week. What stuff has gone on that is remarkable. So on March 3rd, we have a birthday of scientist Alexander Graham Bell. And I was enlightened earlier today on who that was. So he invented and patented the very first telephone. So he was of the American Telephone and Telegraph company AT&T back in or in 1885..

Mitchell Keiser:
So and the Star Spangled Banner on March 3rd was released in 1931 by Francis Kelley Scott and was officially adopted as the anthem of the United States Congress. So the key inspired by the large US flag with 15 stars and stripes. So other other days is March 4th. We had in 1967, the Rolling Stones went to the number one in the US singles charts and then the inaugurations on 1801 on March 4th. Thomas Jefferson was the first US president to be inaugurated. Abraham Lincoln was inaugurated on the 16th was as the 16th president in 1861, and Franklin D Roosevelt was inaugurated as the 32nd president in 1933. And that was all on March 4th.

Dwight Mejan:
There's a pretty good history lesson for you, wasn't there, Mitchell? For in that whole thing, huh?

Mitchell Keiser:
It was. If you guys don't know me, I'm not a history buff. So it was some learning.

Dwight Mejan:
You were. I don't even know if you were. You were not even a figment in your dad's eye. Nor was I at that point. Some of those dates. But some very important people in history for sure. But hey, we're about out of time for this week's show. But coming up next week, you can now do a tax free rollover of unused funds inside of a 529 plan. And we're going to talk about that next week on the program. We'll talk about who qualifies, how you could benefit from this new change. So stay tuned for next week. But hey, just want to thank some of our listeners who came out this past week and attended one of our shows that we did. I Say it's a show. It's a it's a workshop, it's a seminar. And we just really enjoy meeting our listeners. It's one of the things that both Mitchell and I love to do is get face to face with people, get to meet people who are listening to the show. And we provided some great information. We got some wonderful feedback from our attendees at that. And just want to encourage you, we'll have a lot more of these events coming up this coming year. We'll make you aware of them on this show and hopefully we get to meet many of you who've been listening to us for a while, but for whatever reason haven't had a chance or the time or taken the time to come and meet us face to face.

Dwight Mejan:
So with that, I just want to thank everybody for being on with us today for the show and let you know that we provide comprehensive consultations at no charge to our listeners. There's no obligation to work with us. You only work with us if it's best for you and best for your situation. We're going to help you analyze your financial situation. If you come in here, we'll answer your questions. Mitchell talked a little bit about annuities. If you own those, we will closely put a magnifying glass on those annuities and give you some free information and feedback based on your goals. If you're in the right one and we'll discover exactly how much you're paying and fees, you may not even know that sometimes inside your portfolio will help you cut unnecessary costs in your IRA or 401 K. And we can also help you with Social Security planning and Medicare. And we'll also compare your current situation with how you're invested in that portfolio to what's possible if you were to ever consider working with us. And we'll let you take all that information home and discuss it. If you have somebody else that you're in the home with and be glad to answer your questions. But I want to thank you for being with us today, and we look forward to being with you next week.

Producer:
Thanks for listening. To Retire 360. You deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard earned assets to schedule your free no obligation consultation with Dwight, visit Retire360Show.com or pick up the phone and call (910) 235-0812. That's (910) 235-0812.

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC, BCM, a registered investment advisor, BCM and 360 Capital Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Fixed annuities, including multi year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity. Contract guarantees are backed by the financial strength and claims paying ability of the issuer. Information provided is not intended as tax or legal advice and should not be relied on as such. You are encouraged to seek tax or legal advice from an independent professional.

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