Style Switcher

Predefined Colors

Why Some Retirees Succeed and Others Live in Worry – 5 Retirement Truths

I want to share one of the most valuable pieces of retirement advice that I've ever heard if you're thinking about your retirement and you're wondering if you're doing the right thing or think that you should be doing something different or if you're just worried about all the things going on right now whether it's the economy or the markets or the value of your accounts be sure to watch this video because I'm going to share the retirement truths that every retiree goes through and it's these things right here we're going to cover today and every retiree goes through it and it they experience this in retirement so it's going to go over this and then also what to expect in retirement and then how to give yourself the best chances of maintaining your lifestyle in retirement as well now the negative of these retirement truths that we're going to look at is that many of them lead to increased uncertainty or worry about your retirement one of our goals though as we're thinking about it is really the opposite of uncertainty or worry in retirement it really should be more about confidence right the next years really all the way up until you pass away wait these are the the magic ears these could be the best years of your life and I know that because there's an actual study a research study uh proving this so let me pull that up really quick and show you the results and I'll link to it below people were asked to score their life satisfaction from zero to ten where 10 is the best possible life and then zero is the worst possible life and this is really just the average score by age and I thought it was encouraging to see that life satisfaction tends to increase as you can see as we get older and then it tends to Trail off as we get older but really the area the the period of time we want to focus on is that this is the magic time and we know this to be true as well because we've helped hundreds of pre-retirees move into retirement with confidence and excitement and these were the people who were coming to us that were feeling somewhat unsure or not 100 confident with their money plan and our firm streamline Financial has been around for 24 years and we've made it through quite a few bad Market periods with our clients and by the way if I haven't met you yet I'm Dave zoller and I own streamline Financial with Tim and Luke and Sean and if you're working with an advisor now that's mainly focused on investments and investment planning but doesn't talk about these key retirement strategies like the tax efficient withdrawal planning and income planning or just tax reduction overall feel free to reach out to us through the website now we don't always have time but I'll get back to you either way so let's get into this first truth in retirement it will be common to have that thought of maybe I should be be making a change or should I be doing something different it'll be normal to feel this way in retirement especially when you see the news or you're listening to friends talk about their finances there's this feeling or this thought of really making us doubt our current plan which causes some people to make more emotional decisions instead of making smart financial decisions and a good way to avoid this is really to avoid this feeling is by having an understanding of your plan which really leads to more confidence with what you're doing and having a plan for both the good times and also the bad Mark of times so that you know that you're prepared for either one of those and I'll give you some ways to achieve this coming up in this video now on to the second thing that comes up in retirement that we just have to be prepared for is we need to expect bear markets right you've most likely lived through a lot of them already and really in retirement though they feel a little bit different usually worse but because of the frequency creating a plan with bear markets in mind and really big Corrections built into the plan is a smart thing to do that way you don't have to worry when they eventually come now if you're not sure how to model out these various what-if scenarios or bad Market scenarios for your plan then you may want to talk to a cfp or check out my favorite retirement income planner below this video you should see a link to it it's one of the best consumer facing planners that I've seen and it doesn't cost thousands of dollars like the ones that we use for our clients the next thing to bring up is for pre-retirees who are close to stopping their wage especially if that's during bad markets they may think should I work a little bit longer maybe just one more year to kind of make it through this this difficult period we actually had a client call us up about five months ago and uh no she was five months into retirement and she said something like it seems like so much bad news is out there and what's going on with the markets I'm wondering if I it would have been better if I should have just kept working so we reviewed her plan and because we built in to her plan this expectation of bad markets everything looked great and and really the only reason to keep working would be if she really enjoyed this sort of work that she was doing and it brought her some some purpose but she didn't so it was great it was great confirmation that she was still on the right track so if this sounds like you take a look at another video I recorded I'm gonna either link on this screen or it'll be below and it gives a few real examples of what working an extra year might look like in a financial plan the next thing to know is that no one really knows what's going to happen next it seems like everybody has a prediction on TV or YouTube or at the dinner table with family or with friends and no one really knows what is definitely going to happen we know this uh in a logical way because you know there's that saying if you put 10 economists in the room together and they come up they need to come up with a conclusion they'll come up with 12 of different answers when they walk out knowing that it's important to prepare your investment plan for that four economic Seasons that we may go through in the future since we don't know which one we're going to go through next so just as as an example you've seen it before the four economic seasons are higher than expected economic growth or lower than expected economic growth and then higher than expected inflation or lower than expected inflation and there's asset classes that can do well in each one of those now again we don't know which way we're headed but having asset classes and each one of those potential Seasons that could be beneficial now that's just my opinion and really it's for all of this talk to your own Financial professionals before doing anything like this now on to the next one which really has more to do with human psychology than investment strategy and then after that I'll share the the really the most helpful piece of advice that I've heard related to retirement planning but if you'd like this so far please click on the the like button and and maybe this video can help somebody else going through the same things that that you're looking forward to so the next truth is in retirement we may have a tendency to compare ourselves to others the grass is always greener on the other side of the fence really throughout life that's we've got that tendency to compare it to others but it can harm us in retirement too if we do a video on this channel that mentions a dollar amount as an example we don't want that to really make you feel better or feel worse about your current situation because you know we help high net worth families at streamline Financial we sometimes mention big numbers but we don't want it to be about the numbers we really want to communicate just the principles and the strategies that can can really be applied to to anybody's finances and there's always going to be people with more than us and then there's always going to be people with less than us and the one who wins is the one who's content and at peace most at peace with their current situation you know that saying if I want to be able to practice being content with a little and I want to be able to practice being content with a lot and and you know healthy competition that's okay but comparing ourselves to someone else because uh you know if it causes us a feel of lack or less than that can hurt our retirement plans because that leads really back to that first point that we talked about in uh in this list of feeling like we should be doing something different for example if we see a guy on the internet and he's investing a certain way or he's deciding he's changing up his entire strategy um because of what's happening with the economy then that may cause us to feel like we should be doing something different and then start to increase the emotional level of uh of our decision making instead of staying to strictly logical or financial levels but again it's a normal feeling to feel that worry or fear or anxiety um with what's happening during during current periods but one of the most helpful pieces of advice that I've heard that we can apply to retirement planning is really the difference between those two words fear and anxiety knowing the difference between those two is actually very very helpful as we're planning retirement and talking about money that is if we want to feel better about what we're doing right now when we think about fear and anxiety we might think of them as being the same thing but actually they're completely different things and let me just pull up these two definitions if I can really quickly fear is a caution over a real and present danger and then anxiety is a worry over an imagined future danger now fear if we've got something right in front of us then it's obviously a very helpful tool for us as humans anxiety though is not always a helpful tool as as we're trying to process things partly because these anxieties there's nothing we can do to control or influence them you may have seen this drawing from Carl Richards before about things that matter and then things I can control here's a place to focus and then another way to look at it is we actually sent this to clients not too long ago on a video of what you can't control and what you can control so we can't control the markets and inflation and what they're doing with interest rates or what's happening in the news or the world or tax laws or the elections but a lot of these things actually do relate to things that we can control for instance you know markets are inflation or interest rates your portfolio allocation you can control that you can control when to pay taxes when it's related to in investing you know as we're talking about Roth conversions or the the costs the tax cost tax drag on some of the portfolio and not to get too nerdy about these things but two of the biggest things that we've seen is this idea of not controlling the news but what we can control is news consumption we've seen a big shift with uh some people who instead of someone who wants to consume the news they switch from TV news to reading news where you have a little bit more control of what's coming at you versus TV is just the next thing is coming at you if you know what I mean I don't know if that's if I if I'm explaining that the right way but back to the this video all the things that we mentioned before earlier here um a lot of these can be anxiety-inducing things as well right the severity of a bear Market or not being able to predict what's going to happen next in the world or comparing ourselves and doubting our plan or thinking that we don't have as much as as we wish we had when it comes to to money or the you know what if this happens and what if this happens how is that going to impact my plan and that can lead that sort of thinking can lead to paralysis and really no action being taken but what if you had a plan that was built in to show those different what-if scenarios so instead of the unknown future danger you're able to get more concrete scenarios in the plan as a result that's what I would recommend once you get get it out in the open then it becomes a lot less scary we both know that so either find a great certified financial planner who can show you that and show you the what-if scenarios or check out the the DIY planner or a different planner that helps you put in those what-if scenarios as well so it becomes less scary so don't forget anxiety is it can be the thief of Dreams it takes you away from enjoying the the present moment and it stops you from even taking the right action to make things better in the future because it really just makes you only focused on on the negative as you're you're moving through life that video that I mentioned earlier is called why delaying retirement might not be a good idea if you're pre-retirement and you're thinking you want to work a little bit longer because of what's going on take a look at that one coming up next or below and then I'll see you in the next video take care foreign [Music]

As found on YouTube

Retirement Planning Home

Read More

Your Tell-All Guide to Saving for Retirement

I'm Britt, the co-founder of Dow Janes, and 
every single week I have someone asked me   how they can start saving for retirement 
or how much they need or if it's too late   to start saving. Today, I'm going to share my 
top tips for starting to save for retirement.   And don't worry; it's easier than you think.
If you want more ideas for saving, investing,   and making the most of your money, 
don't forget to hit the subscribe button   and the bell so you don't miss any new 
videos. And if you liked this video,   definitely give it a thumbs up.
All right. So, there are some misconceptions   about retirement saving that I want to address. 
First, one thing people often ask us is how much   do I need for retirement? What's the magic number? 
And the truth is it varies widely.

It depends on   where you want to live or what lifestyle you 
want to have or when you want to retire. Are   you trying to retire at 40 or at 70?0.
If you take anything away from today, I want   you to just start saving 20% of your pre-tax 
income for your retirement, and you'll be fine.   To learn more though, keep listening.
Okay. So how do you start saving for   retirement? What you do is you follow the roadmap 
steps. You make sure you're doing things in the   right order. So we have a whole nother video 
on the roadmap steps, but just to recap,   the first thing you want to do is make sure 
you're spending less than you make each month.
  The second thing is to pay off any 
high-interest rate debt you have, which is   anything with an interest rate over 7%, then 
you want to build up an emergency fund.

And   then once you have those three things in place, 
you're ready to start saving for retirement.   So, to do that, you're going to find your monthly 
savings number. You can use a simple retirement   calculator to figure out how much you want to have 
in retirement. I'll link to one in the description   below. What you'll do is you'll add in your 
current savings, anything you've already saved   for retirement already, anything you expect to get 
from social security, and then you'll adjust the   savings amount to see exactly how much you need 
to save each month to be on track, to meet your   retirement goals. It's a super easy calculator, 
you just enter the numbers. It'll spit out exactly   what you need to do, and that number, that savings 
amount, that's going to be your monthly goal.
  So, if you don't already have an account, 
you'll open up a retirement account,   and that's where you'll begin to transfer that 
savings amount to that account each month.
  Where should you save your money? There are 
different types of retirement accounts.

So,   if your employer offers matching, then you'll 
want to open a 401(k) or 403(b). In addition,   you can open a Roth IRA or a traditional IRA. 
IRA stands for Individual Retirement Account.   If you're self-employed, you can also open a SEP 
IRA. So for the Roth traditional or SEP IRAs,   you can open those at any brokerage places 
like Vanguard, Charles Schwab, Fidelity,   or with a robo-advisor like Wealthfront or 
Betterment. Any of those places offer retirement   accounts. So, it's super easy to get started. 
Then if your employer offers 401(k) matching,   you definitely want to advantage of that.
So, what is 401(k) matching? It's when you   save money for your retirement and your company 
contributes the same amount that you save.   They'll often match up to a certain amount 
or a certain percentage of your salary.
  So, if your company matches 4% of your 
salary and you make $5,000 per month,   you could contribute $200 per month towards your 
retirement, and your company would contribute an   additional $200 per month.

So you basically get 
$200 in retirement money for free each month.
  It's a way for companies to incentivize 
their employees to save for retirement.   So, if your employer offers this, definitely take 
advantage of it. It's the easiest free money out   there. And make sure you're contributing the 
maximum amount that they're willing to match.
  Okay. The next thing you'll do, if your employer 
doesn't offer matching, or if you're, um, if   you've already maxed that out, the next thing 
you want to do is max out your contribution to   your Roth or your traditional IRA. So, each year, 
the IRS limits the amount that you're allowed to   contribute. In 2021, the amount is $6,000.
If you're over 50, you have an extra bonus. You   can contribute $7,000. So, try to contribute the 
maximum amount to those accounts each year. So,   max out your 401(k) to where your company matches 
max out your Roth or your traditional IRA. If   you're self-employed, you could also contribute to 
your SEP IRA. If you're a great saver and you're   saving more than those amounts, you can open 
your own brokerage account.

So, a non-retirement   account, and save the money there. You can use 
that money for whatever you want, but you can   know that you're saving that for retirement.
Once you've saved the money in those accounts,   what you're going to do is invest that savings. So 
for the easiest and simplest way to get invested,   you'll invest in target date funds. These 
are pre-made portfolios that allocate your   money to a mix of stocks and bonds that 
are appropriate based on your age.
  If you want to invest in index funds yourself, 
or if you're picking a fund that your employer   offers, then you can use these rules of thumb. 
Generally, you want your portfolio to be invested   in the percentage of stocks that is equal to 
120 minus your age.

So if you're 20 or younger,   you want to have 100% of your portfolio 
in stocks. If you're 30, you want 90%   in stocks, for example. And just a quick 
note that if you invest in target date funds,   that will do that for you. The allocation 
changes the allocation of stocks and bonds   changes over time as you get older.
One quick thing to know is that you   actually don't need to take your money, your 
retirement money, out the year that you retire.   You can leave it invested while you're in 
retirement and just take out what you need,   which means you actually have more time 
than you think for your money to grow.
  So, hopefully that gives you some peace of mind. 
If you're getting started later in the game,   if you're wondering how much you should be 
saving in retirement savings each month,   we have a couple of rules of thumb for you.

And 
the bottom line is the sooner you start saving for   retirement, the less you actually have to save, 
because if you start sooner and you invest that   money, it will grow and it will grow over a longer 
period of time. If you're starting later in life,   you have to save more because it has less 
time to grow. So, if you're in your twenties,   you can save 15% of your pre-tax income each 
month and you'll be set. If you're starting   in your thirties, you want to save 20% of your 
pre-tax income. If you don't have anything saved   and you're just starting to save for retirement in 
your forties or your fifties, you'll need to save   even more since you're starting later and your 
money has less time to grow. If this is you, watch   out for our next video on how to start saving 
for retirement if you're in your fifties.
  All right, the sooner you start saving for 
retirement, the easier it is.

So, here's a recap   of the steps: One, follow our wealth building 
roadmap, so you know what to do in what order.   Two, find your monthly savings. Number three, open 
a retirement account. Four, take advantage of free   money. Five, max out your contributions. Six, 
invest your retirement savings, and seven,   contribute to your retirement savings each 
month. If you want to learn more about how   to build your wealth and invest your retirement 
savings, then definitely check out our webinar,   Think Like an Investor. The link's in the comment 
below.

All right. Thanks for watching..

As found on YouTube

Retirement Planning Home

Read More

2 Retirement Tax Planning Strategies To Save THOUSANDS In Your Retirement Portfolio!

how would you like to save hundreds of thousands of dollars potentially in taxes in retirement well these two strategies I'm going to go through today when combined together have the potential to do just that now if you don't qualify for net unrealized appreciation because you don't have company stock inside your 401k you can still qualify for zero percent taxes on your long-term capital gains and dividends so when we combine these strategies together it creates a very powerful tax and income planning tool that you can use for your retirement [Music] foreign as you can tell I'm pretty excited about this video because we're going to discuss two tax planning strategies the net unrealized appreciation which I've not yet done a video on the YouTube channel about and also the zero percent taxation for long-term capital gains and dividends and you're going to want to stick around until the end of the video where I incorporate these two strategies into a real life financial planning case now unless you've searched net unrealized appreciation to find this video there's a pretty good chance you've never heard of net unrealized appreciation so in its most basic form it's when you have company stock that's been issued inside your 401k you have the option of rolling that money outside of your 401k not into an IRA but rolling it out only paying income tax on the basis that's been distributed and potentially pay long-term capital gains tax on the appreciation so that appreciation from where it was issued to where it is whenever you roll it out and retire or sever from service or become 59 and a half that's what's called your net unrealized appreciation we're here in Houston Texas where we have a lot of client clients that worked at Exxon Mobil or Chevron or some of the other big oil and gas companies we also have clients from all over the country that work for other companies that can take advantage of this net unrealized depreciation strategy so I'm going to use Exxon because we come across this plan a lot we're very familiar with the Exxon retirement plan and I want to illustrate how this concept works and there's some nuances here and there's also some financial planning considerations and of course tax ramifications that we're going to go through but if I worked at Exxon let's say from 1995 to 2020 and as part of my compensation I receive shares of stock each year over the course of my employment so these numbers are not historically accurate but I want to convey the the principle here so in the beginning years if Exxon was trading at twenty dollars and I received a hundred shares and then next year maybe I received them at 22 dollars per share and twenty five dollars per share and over time as I've received more shares as part of my compensation package the value has typically increases the price at which you were issued those shares in the year you received them is what's called your cost basis so if we do this Nua rollout that's the amount that you'll have to pay income taxes on but it's a really cool opportunity here because over time most stocks appreciate in value Exxon today is at a hundred and sixteen dollars per share so the concept of Nua is if I was issued stock at twenty dollars a share and I keep it in the IRA and now it's at 116 dollars a share that's a massive amount of capital appreciation and if I roll it to an IRA and distribute it at that point or at some point in the future I'm going to income taxes and that can can lead to a pretty big tax liability now we're down the road when I need income but if stocks appreciate it over time we typically have a mixed cost basis when it comes to the amount of shares that we've received from the company so first thing to know here and first thing to ask your company is do you guys provide a breakdown of the cost basis on an annual reporting period or do you take the average cost basis so we come across some companies here that they will provide you the information of the exact cost basis and the amount of shares that you've received in each year in that case we can really cherry pick which shares we want to roll out and really take advantage of this strategy because typically we're going to take the lower cost basis ones some companies don't allow you to cherry pick based on the lower basis shares that were issued they calculate an average cost basis for all the shares issued so this is not nearly as advantageous as being able to cherry pick sometimes it can still make sense especially if it's an older 401k or if it's a stock that has really really appreciated since those shares were issued in the average cost basis is down so this video my primary purpose is to help educate you around the financial planning considerations of the Nua rollout so I'm not going to cover all the rules and reg surrounding it I'll do that in a later video though but a couple things you should know this becomes an opportunity whenever you sever from service or typically when you're entering retirement there are some other qualifications but we'll cover those later now if you sever from service prior to age 55 you will be subject to a 10 penalty on the amount you distribute so just be aware that if you're under the age of 55 you've severed from service you have company stock inside your 401k that that 10 penalty for early distribution still applies we have Exxon this 401K here so the total value is about 1.5 million in this hypothetical example the shares the tote in totality the shares have been issued over the course of the working career equals about a six hundred thousand dollar cost basis so I'm going to use the example here where we can cherry pick the individual shares so the next question becomes which shares should I consider doing the Nua rollout because I don't have to roll all six hundred thousand basis out in the real world typically this 1.5 million of fair market value may also be comprised of mutual funds such as growth funds income Etc within the 401K for the purpose of this example Exxon stock is valued at 1.5 million dollars the cost basis of those Exxon shares within the 401K is 600 000.

Just want to point out in the real world typically everyone does not have all their money invested in their company stock but I've I've absolutely seen that over the years so the question becomes which shares do we want to take advantage of the annual rollout with the general rule of thumb is the lower cost basis Shares are more attractive and that's determined by the the value of the stock today anything above 50 percent cost basis to fair market value typically we don't want to consider for Nua now there are some extenuating circumstances sometimes with financial planning considerations that it may make sense but when we do the math and we extrapolate out looking at the value that you would have in the ira versus paying taxes on the basis now annual taxation for growth dividends Etc the Breakeven point isn't that attractive when we look at these shares that are above 50 percent cost basis to fair market value I personally like to see them around 20 or 30 percent really tops so whenever you have shares that are 10 15 20 25 cost basis to fair market value those are typically very attractive opportunities and in some situations Thirty thirty five forty percent could possibly make sense it just depends on the overall financial plan that you're putting together in other circumstances so this is a tax analysis so you may want to reach out to your CPA for help or assistance in doing this or your financial advisor if they're qualified and skilled enough to help you make these determinations I want to run through some numbers now so let's assume for whatever reason this person decides to do the whole Nua rollout so just so we understand the how this functionally works the 600 000 rolls out of the 401K into a non-ira account income tax is due on that six hundred thousand dollars you're probably looking at about a 27 28 maybe 30 percent effective tax rate we'll go with 30.

So 100 eighty thousand dollars of income taxes would be due on the basis being rolled out but in this scenario you're not just rolling out 600 000 That's the basis you're actually rolling 1.5 million dollars out of the 401K and only paying income tax on the basis now if you sell it immediately the net unrealized appreciation is the difference between the basis and the fair market value so you have nine hundred thousand dollars of gain there so if you sell that nine hundred thousand you're looking at the more preferential long-term capital gains tax that would be a pretty big tax still so the question becomes the are what planning considerations should we hold on to this stock do we feel comfortable having this much in one company what is our other wealth what if we break it out over a few years so this is what we're really going to dive into now I just want you to understand how this actually works in regards to the functionality okay let's cover how this actually works so we take the Exxon stock the basis is 600 000 but the full value is 1.5 million so if in this example we decide we want to do it all we would roll the full 1.5 million out of the 401K it will go into a non-ira account but you only owe income taxes on the basis the 600 000.

If you sell the stock immediately you will owe long-term capital gains tax which is a more preferential rate than income taxes at this level of income on the difference between the basis and the fair market value or nine hundred thousand there but you don't have to sell it right away if you don't sell it right away and then you sell it six months later you'll be subject to short-term capital gains tax because you're holding period rules take take into a place or taken to effect if you don't sell it immediately but if you wait 12 months after the distribution date 12 months in one day then you qualify for long-term capital gains tax treatment so some of the financial planning considerations are now what are the income taxes due what is my income and tax plan year one year two year three of retirement how does this fit into that overall tax and income plan and how do we optimize how do we reduce the total taxes we pay while maximizing the value that we retain if we have to pay income taxes on six hundred thousand dollars you're looking at an effective tax rate there of about 27 28 maybe 30 percent so 30 on 600 is a hundred and eighty Grand so you'd write that check to Uncle Sam and you would have 1.5 million outside of the 401K in the more preferential tax environment of long-term capital gains and dividends now you would have annual taxation on these dividends so that's something else we need to consider and we also need to consider future tax rates and make assumptions with what do we think income tax rates are going to be in the future long-term capital gains and dividend rates all of these things go into the analysis but for now this is the logistics of how it works we roll it all out pay income taxes on the basis we can either sell it immediately and pay long-term capital gains on the differential or we can hold it and if we hold it past the distribution date sell it within 12 months short-term capital gains sell it post 12 months long-term capital gains okay so I want to dive deeper into the two options we have just high level so option A is We Roll everything to the IRA we do not take advantage of the Nua rollout eligibility things that we have to consider here is future tax rates rmds other income sources and the secure act now this is not an exhaustive list this is just some of the big ones we have to take and consider future tax rates because when everything is inside that tax infested Ira when you distribute it in the future you have to pay income taxes you've given up the ability to take advantage of long-term capital gains and dividend taxes which are typically a preferential rate rmds Force distributions from your retirement account and when added with other income we oftentimes see people who did not plan for this have 150 200 250 even more of income because of required minimum distributions and their other income so when doing this analysis we have to extrapolate out and look at these factors to help make the decision today secure act I threw this in here because it forces distribution of your retirement accounts if they go to a non-spouse beneficiary that's more than 10 years younger than you full distribution of the retirement account within 10 years so if you have kids and it's important to leave this money to your children if they have income and they're working and now your retirement account has to be fully distributed within 10 years that could be a massive amount of income going on top of their income which now 30 40 50 60 potentially of your retirement account has gone to Uncle Sam if you live in a state with income taxes that could be an issue as well inheritance taxes so a lot of issues here rolling everything into the IRA you can be hit with um pretty big income taxes down the road option b is we do take advantage of the Nua rollout either wholly or in a partial Nua rollout how that works is we would take the shares that we do decide to take advantage of this strategy and we roll them into the non-ira account some things to consider there is that what are long-term capital gain rates now what are they possibly going to be in the future but also we have annual taxation of the dividends and if we're buying and selling inside that account whatever we do not roll into the non-ira account with the strategy the rest of the funds from your 401k go into the IRA and then of course whatever's left here we have the same considerations that I went through over here so now there are financial planning considerations here let's say I was at 35 cost basis to fair market value so I'm kind of right there where mathematically it may not make sense but how much non-qualified money do I have how much essentially I'm saying how much do you have outside of your retirement accounts because if you're entering retirement and all that money is inside that tax infested 401K then you don't have any ability to manipulate what goes on your 1040 your tax return by manipulate I mean we determine which accounts were withdrawing income from to manage our taxable income that we report to the IRS if we pull from our non-qualified accounts think your bank account well you don't have to report that so if you need a hundred thousand a year we pull 50 from your bank and 50 from your IRA you get your 100 000 but only fifty thousand goes on the tax return that's how we can manipulate that so how much non-qualified money do you have if you don't have much we may want to consider doing a little bit higher Nua rollout because even mathematically it may not make sense when we just compare that decision in isolation to do or not to do the Nua rollout but when we now look at the other benefits that we're receiving such as the ability to do Roth conversions the ability to manipulate what goes on our 1040 the ability to possibly qualify for a health care subsidy if you retire before the age of 65 by managing the reportable or taxable income that's reportable we can qualify for a subsidy so this is why we're so big on financial planning because as you can see it's not just about Investment Management in retirement that's important absolutely but when we tie in financial planning with Investment Management we can create some really optimal scenarios where we're creating a ton of value and helping you have more income pay less tax and ultimately have more value throughout the course of your retirement okay this is the part that I mentioned in the beginning of the video where we're going to tie into kind of a real world plan planning case so we laid the groundwork for what Nua is and some of the considerations that you have to make in order to determine if it makes sense for you to do the Nua rollout so what I want to point out here is the tax and income plan for retirement years one two and three for someone who takes advantage of the Nua rollout because the question becomes when do we sell that stock if we have 30 40 50 percent of our entire net worth in our company stock it's pretty risky to hold on to that position just so we don't pay more in taxes so here's where we're going to tie the financial planning considerations of the real world application and decisions we have to make on the Nua rollout with years one two and three of someone just entering retirement one of the big risks is if we roll it out the company's stock and we decide not to sell it because we don't want to pay the long-term capital gains immediately if we hold on to that that concentrated Equity position we have increased our risk now there are investment strategies that can be used such as buying a put option or what we call an Equity caller but I want to just talk about the tax and income plan here so in this scenario client rolls out the annual way so they have a large concentrated Equity position and they've paid income tax on the basis but do not want to sell the company stock yet so as part of the tax and income plan what I want to show you is we could break this up so year two year three and even year four possibly depending on the size of the concentrated Equity position Company stock where zero percent taxes essentially so we have total income here of a hundred and twenty thousand so what this is the tax and income strategy where we're generating income year two of retirement not year one because in year one you've done the the Nua rollout you have a big tax liability from paying income taxes on the cost basis of that company stock so here's your two so year two the the tax and income strategy is don't take anything out of the 401K no Roth conversions we're going to sell the company stock that we previously rolled out take advantage of Nua and we can have a hundred and twenty thousand dollars of income here as long as it's all capital gains and dividends your total tax liability 458 dollars now what I've done here is assumed twenty thousand dollars of dividends because if you have company stock and you roll it out it probably paid some dividends so 20K there and a hundred thousand of long-term capital gains we're realizing we're recognizing so this is darn near zero percent on a hundred and twenty thousand dollars of retirement income and we're divesting from that company stock now again some risk management strategies we could have an equity caller or put option helping to support downside volatility of that concentrated position but just taxing in complaining wise I want to show you how how this can work out so here now I've added 125 000 of long-term capital gains with twenty thousand dollars of dividends total AGI 145 000 the total tax 4208 on 145k of income 2.9 percent so again we've divested so maybe this is year two of retirement or year three we've divested from the company stock we've reduced our risk we've provided the income that we needed for retirement and we've done so in a way that's tax advantaged same thing goes on now I wanted to point this one out because I've here I've thrown in the same 20 000 of dividends 125 000 of long-term capital gains so we're selling the stock again but now we also take advantage of a twenty thousand dollar Ira distribution so this is which accounts do we pull income from in retirement how do we generate income what's the tax plan total AGI comes up to 165 the total tax is 7208 but here's the cool part the IRS ordering rules for how you pay tax on income based on where that income is generated the distribution from the IRA is actually tax-free but what happens is when you take money out of the IRA it brings some of those long-term capital gains into taxation so I did a video not too long ago where we talked about adjustments and Social Security and IRA distributions and wealth conversion taxes the tax code is filled with these where if we we take one more dollar of income it brings one other item into now a taxable State such as Social Security or long-term capital gains or dividends so just just be aware of that I guess 165 000 of income seven thousand two hundred and eight dollars in income taxes representing a four point four percent tax rate so now one two three four years into retirement we've divested the uh concentrated stock risk we provided income and a very tax advantaged manner we still have that Ira with a lot of money in it to deal with but once this is done we would probably at that point start down the Roth conversion path now every situation is different but hopefully these topics and ideas and and considerations when it comes to risk management income planning tax planning and retirement will help you have a better retirement if you want to learn in more detail how to potentially pay zero percent in long-term capital gains and on your dividends click this video right here I did a couple years ago where we do a deeper dive into the special tax advantage [Music] thank you

As found on YouTube

Retirement Planning Home

Read More

Why This Investment System Can Help Retirees Worry Less About Their Retirement Plan

I want to share an investment system for retirees to hopefully assist you as you're thinking about and planning for your retirement we're also going to look at how to prepare your retirement for the multiple potential potential economic Seasons that we may be headed into so we want to look at the multiple seasons and then the Easy System that's going to help lower taxes and then lower risk as well now if I haven't met you yet I'm Dave zoller and we help people plan for and Implement these retirement strategies really for a select number of people at streamline Financial that's our retirement planning firm but because we can't help everyone we want to share this with you as well so if you like retirement specific videos about one per week be sure to subscribe so in order to create a proper investment plan in system we want to make sure that we build out the retirement income plan first because without the income plan it's much harder to design the right investment strategy it's kind of like without the income plan it's like you're guessing at well 60 40 portfolio sounds good or you know May maybe this amount in the conservative bucket sounds reasonable you already know and and you feel that as you get close to retirement that goal of just more money isn't the the end-all goal that we should really be aiming for for retirement it's more about sustainability and certainty and then really the certainty of income and possibly less risk than before the last 30 years uh the things that you did to be successful with the financial side are going to look different than the next 20 or 30 years now if you need help defining the the income plan a little bit then look at the DIY retirement course below this video now once you do Define your goals for retirement and then the income needed to achieve those goals then creating the investment system becomes a lot easier and within the investment plan we really know that we can only control three things in all three things we actually want to minimize through this investment system the first thing we can minimize or reduce is how much tax you pay when investing we had a a client who was not a client of streamline Financial but of a tax firm coming to the the CPA firm in March to pick up his tax return and he was completely surprised that he had sixty thousand dollars of extra income on his tax return that he had to pay tax on right away before April 15th and it was due to the capital gains being recognized and other distributions within his investment account and he said but I didn't sell anything and the account didn't even go up that much last year and I got to pay tax on it but he was already in the highest tax bracket paying about close to 37 percent on short-term capital gains and dividends and interest so that was an unpleasant surprise and we see it happen more often than it should but this can really be avoided and here's two ways we can control tax so that we don't have to have that happen and really just control tax and pay less of it is the goal and I'll keep this at a high level but it'll get the the point across number one is the kinds of Investments that you own some are maybe funds or ETFs or individual uh equities or things like that the funds and ETFs they could pass on capital gains and and distributions to you each year without you even doing anything without you selling or or buying but it happens within the fund a lot of times now we would use funds and ETFs that are considered tax efficient so that our clients they can decide when to recognize gains rather than letting the fund company decide now the second way is by using a strategy that's called tlh each year there's many many fluctuations or big fluctuations that happen in an investment account and the strategy that we call tlh that allows our clients that's tax loss harvesting it allows them to sell an investment that may be down for part of the year and then move it into a very similar investment right away so that the investment strategy stays the same and they can actually take a write-off on that loss on their taxes that year now there's some rules around this again we're going high level but it offsets uh you know for that one client who are not a client but who had the big sixty thousand dollars of income he could have been offsetting those capital gains by doing tlh or tax loss harvesting that strategy has really saved hundreds and thousands of of dollars for clients over a period of years so on to the next thing that we can control in our investment plan and that's cost this one's easier but many advisors they don't do it because it ends up paying them less now since we're certified financial planner professionals we do follow the fiduciary standard and we're obligated to do what's best for our clients so tell me this if you had two Investments and they had the exact same strategy the same Returns the same risk and the same tax efficiency would you rather want the one that costs 0.05 percent per year or the one that costs 12 times more at point six percent well I know that answer is obvious and we'd go with a lower cost funds if it was all the same low-cost funds and ETFs that's how we can really help reduce the cost or that's how you can help reduce the cost in your investment plan because every basis point or part of a percentage that's saved in cost it's added to your return each year and this adds up to a lot over time now the last thing that we want to minimize and control is risk and we already talked about the flaws of investing solely based on on risk tolerance and when it comes to risk a lot of people think that term risk tolerance you know how much risk can we on a scale of one to ten where are we on the the risk factor but there's another way to look at risk in your investment strategy and like King Solomon we believe that there's a season for everything or like the if it was the bird song There's a season for everything and we also believe that there's four different seasons in investing and depending on what season we're in some Investments perform better than others and the Four Seasons are pull it up right now it's higher than expected inflation which we might be feeling but there's also a season that can be lower than expected or deflation and then there's higher than expected economic growth or lower than expected economic growth and the goal is reduce the risk in investing by making sure that we're prepared for each and every one of those potential Seasons because there are individual asset classes that tend to do well during each one of those seasons and we don't know nobody knows what's really going to happen you know people would would speculate and say oh it's going to be this or this or whatever might happen but we don't know for sure that's why we want to make sure we just have the asset classes in the right spots so that the income plan doesn't get impacted so the investment system combined with the income system clients don't have to worry about the movements in the market because they know they've got enough to weather any potential season I hope this has been helpful for you so far as you're thinking about your retirement if it was please subscribe or like this video so that hopefully other people can be helped as well and then I'll see you in the next one take care thank you

As found on YouTube

Retirement Planning Home

Read More

Are Gold IRA Investments Taxable?

Are gold IRA investments taxable?
No! Thankfully, when you use a self-directed IRA to buy gold, so long as you're holding
it at a US depository, when you sell the gold, all gains will
flow back to your IRA with no tax. In addition to diversification,
the advantage of generating tax-free returns from your gold IRA investment
is what makes it so popular.

As found on YouTube

401K to Gold IRA Rollover

Read More

Retirement Planning: Are you Ready for Retirement? with Oak Harvest Retirement Success Plan

[Music] welcome to the retirement income show on Market Lane alongside the CEO and founder of Oak Harvest Financial Group that of course is Troy sharp Troy is a certified financial planner professional his team at Oak Harvest is incredible if you want to go to the website to learn more elk Harvest financialgroup.com Oak Harvest fg.com works as well a lot of great information on the website you can learn about Jared Kinney Ryan Kenny you can learn about Chris Paris Jessica canella the whole team there's just a phenomenal team Oak Harvest financialgroup.com and of course you can always go to the YouTube channel there's over 300 videos on there about any topic you can think about in the financial world the retirement world uh it's phenomenal and there's no cost you subscribe you'll know when all the new ones are out but there's no cost to any of that YouTube check out Troy sharp and Oak Harvest Troy's office located at 921 oral City Way I-10 and Bunker Hill they they are here for you if you need help they would love to help they just don't know if they can help until you reach out and you can do that just by giving them a call 800-822-64-34-800-822-64 34 today we're going to be talking the retirement success plan Troy is going to explain what this is and it's the process so it's about investment planning income planning tax planning health planning Estate Planning and they all go together Social Security and Medicare are in there as well you know you've done this for a long time you sat down with a lot of people so you kind of understand the common mistakes the common things that we Overlook as well this will be good going through the retirement success plan how are you going to inform us today of this retirement success plan well just like we have as humans we have basic needs right we have that hierarchy of we need shelter we need food we need security in retirement or once we get to retirement people have their the same concerns the same questions we all have the same let's call it fears do we have enough you know can you retire when can you retire how much can you spend when you do retire without the fear of running out of money we all want to pay less tax right the government can get their fair share but not a not a penny more and whatever that fair share is it's it's defined differently based on your plan so if you take the government's plan there they want to get as much from you as possible and the tax law is set up in a way that if you don't plan for taxes in retirement oftentimes we see people in situations where if they keep doing what they're doing 200 300 500 800 we sat down with a client prospective client recently and we're doing this analysis it was well over a million dollars in taxes if he kept doing the his way of things the way that his advisor had him doing it in regards to his income plan and tax plan and retirement well there was no tax plan obviously but his income plan was going to lead create this domino effect of his tax bill being over the course of time over the course of 25 years over a million dollars in estimated taxes that he was going to pay that he simply didn't have to pay if he went about a different approach the approach that I'm going to talk with you about today as far as step three of our retirement success process the tax planning aspect so just like we have basic needs as human beings we have basic concerns when it comes to retirement and we've created the structured process and that's the beautiful thing about the retirement success plan is it's a plan that is something that is actionable but it's also living and breathing it's something we will review with you throughout the year once you're a client but it's also a process and we believe in structure here we're really big on structure and process and that keeps us organized that keeps us on schedule and that keeps us ahead of the planning curve in order to do the things that we promise for everyone that's entrusted so much to us and I'm talking about your retirement you worked for 30 years 40 years 50 years in some cases and you save up whether it's five hundred thousand dollars or five million or 50 million you need a team of people that of course are knowledgeable but before education and certifications and designations and training and experience first and foremost you need somebody that cares okay if you start there with someone that's a fiduciary and not just you can be a fiduciary and still do the wrong thing I've seen it for years in the industry where fiduciary advisors still sell mutual funds that have high fees and commissions and they can make justifications for why they're selling them or why they think you're they're in your best interest I don't believe that they are personally um we would never put someone into a mutual fund that is charging a five percent front end commission and then you know has two or two and a half percent of hidden fees and we've seen that for for years coming from fiduciary firms fiduciary advisors so you start with from Ground Zero are you working with somebody who truly cares who's truly passionate about retirement so with that philosophy in mind that's the foundation of of what we look at when we hire people here at Oak Harvest Financial Group you could have all the designations in the world all the education all the experience but if if you're arrogant if you're not humble if you're not hungry if you're not continuing strive to be continuing to strive to be a better person we don't want you to work here because that foundational element do you care about the people that you're working with on a human level if that's not there then you know we don't want any part of that type of person I don't care how much you produce how what the metrics are when it comes to how we measure advisor performance so that's the foundation now once you have someone that cares you want a structured process in place to deal with those big questions that you have the big concerns that you have so do you have enough yet it's not just a yes or no question it's a function of how much do you spend what is your health situation if you're healthy yes of course you're going to live longer most likely but are you planning for the increased medical costs in increased probability of needing long-term care or Assisted Living these are aspects that healthier people do have to absolutely be concerned about those that are less healthy it's less likely you're going to have a two or three year four or five year stay in a long-term care facility or need nurses in the home so when we talk about do you have enough and can you retire these are all the answers to those questions are function of how much do you spend what is your longevity what is your health situation your of course your family history um but not only that it's what are we doing with the other aspects of this process meaning the income planning side the tax planning side what about the health care side you know are you retiring before Medicare do we need to look at some type of Health Care planning that qualifies you to receive a subsidy so you're not paying two thousand dollars a month for both spouses for health insurance that maybe we get it down to 400 a month or 600 a month or maybe no out-of-pocket costs whatsoever for health insurance premiums you can do that with proper planning but you need the right type of asset structure meaning if you have all your money in retirement accounts this is where tax planning comes in when you take money out that goes on to your 1040 your tax return and then you probably aren't going to qualify for as big a subsidy as if you had money saved and non-ira accounts so this the structuring of income planning tax planning Health Care planning and then of course the estate side of things this is all what the oak Harvest retirement success process the retirement success plan is and that's what you receive when you become a client it is a very clear and structured process that we go through but then it's also a plan that is living and breathing and we're making adjustments as time goes on tax law changes economic conditions change goals change your spending levels will change it retirement is and we've only learned this you know from years and years of experience the best delayed plans we can't just set him and forget them you know plans need constant monitoring just like a plant or a garden or you know a human being so the retirement success process we're going to get into today to to today we're going to focus on the first three steps the first step is risk management and investment planning next step is income planning so income planning is social security when do we take that it's not just based on the math which it does play a role but when we start to look at are you a conservative investor okay versus an aggressive investor investor that plays into the Social Security election decision of course your Health and Longevity plays in market conditions okay are we in a recession when you're thinking about taking social security are your accounts down 20 30 percent or did we have a really really good year last year and it looks like we're gonna have a good year this year all of these factors kind of tie in to that income planning component as well as many other we're going to talk about and then the big one we're gonna we're gonna get into is tax planning that's step three of the retirement success process and when you start to understand that retirement is a set of dominoes when you're young you work you put the kids through school you deal with traffic you deal with bosses you deal with if you run your own business all the headaches that come with that you deal with so many different things money is really really simple it's life that's complicated in the accumulation phase once we get to retirement now life gets a little bit more simple it's the money it's the decisions you have to make and the realization that every single decision you make how you invest the portfolio impacts not not only how much income you can take today but how much income you can take down the road the sequence of returns risk based on how you've invested sequence of returns is if the market goes down and you're also taking money out you exacerbate that downturn in the market because there's no paychecks coming in you're you're pulling money out and losing in the market so these decisions every single one that you make it's a domino effect it impacts everything else it impacts the tax plan it impacts the income strategy can impact the health care it can impact absolutely the estate plan so we walk you through this process so we have a plan in place we call it the retirement success plan and the goal is for you to have security first and foremost but what I find most often is the outcome is that people feel more comfortable they feel more secure and they're able to enjoy retirement a bit more because they've they have a plan in place that addresses all these certain needs but also through the continual monitoring and adjusting and conversations one thing I love about our process is when someone comes to us and we have that first meeting where it's just get to know you you know no pressure no obligation no cost we get the information we do an analysis between that first and that second visit and then when we come back on that second visit you actually get to see what it's like to be a client at Oak Harvest Financial Group because that second visit with us we're starting to go through the foundation of a financial plan we're starting to discuss the decisions that you have to make not only this year but in the future so that's almost exactly what it's like to have an annual review with us or a semi-annual review with us so I love that about our process is that you get to see before you ever decide to become a client what it's like to actually be a client when we have up on the big television screen all of the information the choices you have to make the impact of making different decisions how it impacts your taxes how it impacts your income how it impacts your account balances when we do a sensitivity analysis and and show you okay this outcome in the market and this outcome for income decisions versus this one here are the possible outcomes for those choices and that those combination of choices so you get to see what it's like to actually be a client just through our normal process of going through that first second and third visit with us many Engineers it takes a little bit longer than that sometimes it's four or five visits but our goal is to Simply provide value we want to make deposits in your life we want to provide value and you know people see that value and they say you know what I think you guys could be a great part of my financial team my retirement team and yes I want to work with you Troy so if that's you if you don't have a retirement success plan if you don't have a tax plan income plan if you don't understand the guard rails what I'm going to get into in this next segment as far as risk management in retirement give us a call we want you to leave a message there's no one here working on the weekends if you're watching this on YouTube if you're listening to this later and it's during the week sure give us a call someone will pick up but we want to have a conversation just to see what's important to you who you are if you're a good fit for what we do and of course you can ask questions to see if we're a good fit for you and then we'll schedule that first visit there's no cost no obligation we can do it through Zoom we can do it in person at the office right here at I-10 and Bunker Hill in Memorial City and that first visit we'll have a cup of coffee a glass of water and just get to know each other and if we are a good fit at that point we'll get that second scheduled we'll do the analysis that I talked about and we'll walk you through that retirement success process so you can have those big questions answered do you have enough can you retire and how do you pay less tax 1-800-822-6434 1-800-822-6434 Oak Harvest Financial Group check out the YouTube channel check out the website Oak Harvest Financial Group so when you think about this this is what I think you should really like about it it's you're working with the team at Oak Harvest for your retirement right to coming up with that retirement success plan you're the CEO it's your retirement look at Troy and the team at Oak Harvest as your Chief Financial Officer here to help guide you you're going to make the decisions they're going to give you the choices right and it's up to you because it is your retirement it's your hopes and dreams your bucket list and all of that it's really important though that they understand your feelings your thoughts your hopes your dreams it is about you so you've got to talk to them and they're here to listen and they're here to help again that number is 800-822-6434 risk management how important is it what actually is it Troy we'll explain when we come back this is the retirement income show with Troy sharp out of Oak Harvest Financial Group back right after this investment advisory services offered through Oak Harvest Financial Group LLC Oak Harbor's Financial Group is an independent Financial Services firm that helps people create retirement strategies using a variety of insurance and investment products investing involves risk including the loss of principal any references to protection benefits or lifetime income generally refer to fixed Insurance products never Securities or investment products insurance and annuity product guarantees are backed by the financial strength and claims paying ability of the issuing insurance company Oak Harbor's Financial Group LLC is not permitted to offer a No statement made during this show shall constitute tax or legal advice you should speak to a qualified professional before making any decisions about your personal situation we are not affiliated with the US government or any governmental agency this radio show is a paid placement foreign [Music]

As found on YouTube

Retirement Planning Home

Read More

3 Retirement Savings Tips Before Year-End (Full Webinar)

Welcome, everyone, thank you for joining us today. My name is Ewelina Caplap, Wealth Management operations manager at Coastal Credit Union, where we bank better to live better. Today, we will be sharing with you three retirement savings tips before year end. So hopefully today you will come out of this session with some great action items. Joining me today are David Burk, CFS financial advisor, and Drew Snider, CFP, director of financial planning here at Coastal Credit Union. Welcome to you both. So before we get into our exciting conversation, we will very quickly cover our disclosure slide. Coastal Credit Union contracts with CUSO Financial Services to offer investment products to its members, which can fluctuate with market activity and potentially have some risk. So getting into our exciting conversation today about three retirement savings tips for year end. At this time, let's talk about tip one. Tip one, Roth IRAs. We hear about Roth IRAs quite a lot and the potential tax free income they provide. David, why don't you start us off with a little bit about what this tip is? Thanks, Ewelina.

A Roth IRA is an IRA that you're actually using after-tax dollars to invest in a credit union or an investment Roth IRA and letting that grow tax deferred so that after age 59 and a half, you'll be able to withdraw money out of that account that is 100 percent tax free. That's a huge financial and tax benefit that you should certainly consider before year end. Why don't you add a little bit more to that, Drew? Yeah, the Roth IRA is is definitely the greatest savings tool we have for retirement. As the illustration shows, the seed for our tree is what's getting taxed. And then you grow this beautiful tree with all this great money on it and you get to take the money off and you don't pay taxes on the money.

So it's fantastic and everyone should consider if they can do it or not. The beauty of looking at a Roth IRA going into December is you have a vision of what your income is for the year and you have limitations on contributions based on what your income was for twenty twenty one. So if your income is basically under about one hundred twenty five thousand dollars as a single person or one hundred ninety eight thousand dollars as joint filers, you should definitely be looking at a Roth IRA and coming into the credit union and talking to us to see if it'll work for you. That's excellent. What a great first tip to consider taking care of before the year end. So we're now going to move over to tip number two, and we're going to talk about some 401(k)s. What can you tell us here, David? 401(k)s are offered typically through an employer or as an employer sponsored retirement plan. They've been around for quite some time now, and many employees should be taking full advantage of this retirement savings.

And again, since we're now getting towards the end of the year, it's always a benefit to evaluate your income at this year, like Drew mentioned in the previous slide. But then also what your income will be next year and give yourself a savings raise of trying to increase your savings. Drew, I'll let you expand more about the comparison of Nick versus Maria and what their savings has done over time. Sure, I'd be happy to. This is a very simple graphic of two individuals who make the same amount of money and started off saving the same amount of money, the same percentage to their 401k plan. Nick maintained that savings rate, whereas Maria, each year, increased her savings rate by one percent or her contribution rate by one percent to her 401k plan until it maxed out at 15 percent.

And you can see that over time, Maria had quite a bit more money. This is after 30 years. She had twice as much money for retirement as did Nick. And you know what? You don't really need to concentrate on anything other than the fact that that right bar looks a lot bigger than the left bar. So with proper planning, we can help our viewers get there. Yeah, just one more comment here. Before year end, everyone should take a look at their 401k statement and see if they maximized. If they're trying to maximize the amount that they can contribute, they should take a look at that and see if they've been able to do that this year, because a lot of people may think that they are maximizing their contributions when in fact they haven't.

Right? Good point. And another thing, I'm not sure if we mentioned it, if you have a Roth 401k option on your plan, if we're talking about a Roth IRAs, certainly Roth 401k option is something that our viewers should be looking into. Can either one of you speak to that for a minute? Yeah, that's an interesting comment, Ewelina, because that's still relatively new in the marketplace and offered through employer 401k plans, but the numbers are astounding how few people are really taking full advantage of that Roth opportunity in their 401k. And what that means is, you can actually contribute more towards your Roth 401k than you can a Roth IRA outside of your employer-sponsored plan. Plus, your income is not a restrictive factor in being able to contribute to the Roth 401K plan. And just add to that, I would encourage anybody, even high income people who really do like the tax deduction that they're getting from their traditional 401k contributions. It's not an either/or situation. You know, if you're not doing either traditional or Roth, you can do some in both.

Personally, I do some in both of mine. I do some in the traditional and I do some in the Roth in my contributions. I do the same thing on my own planning as well. Well, certainly a lot to take in and consider for year end. So we're going to move on to our final tip. Tip three. Health savings accounts, right? HSAs. And who doesn't like the sound of triple tax savings? So, David, what don't you tell us a little bit about that first? The triple tax saving on a health savings account is phenomenal, and many people have completely overlooked this opportunity for their own household and and being able to save tax free money. So what ends up happening. If your employer offers you a high deductible health account, then you can participate in an HSA.

And what you're able to do is contribute on an individual basis or as a family, and that money can be tax deductible as far as the contribution. Once that money is in your HSA, it grows tax deferred. And then when you're ready to start withdrawing money from an HSA for a qualifying medical or health care expense, it's one hundred percent tax free as a distribution. And I want to comment here. As as you come to the year end, some employers are going to contribute some money to your HSA for you. You can add the rest up to the maximum. And you have until April 15th to do that. But the year end is a great time to take a look to see how much your employer has put into that plan for you. And then what is the calculation? What's the amount that you can add to it? Because you can reduce your taxes in your 2021 tax return, you get tax deferral and you can take the money out tax free for qualified health care expenses.

Excellent. So it sounds like there's a lot to get done here working with Team Coastal. So who are we right? Who is Team Coastal? Drew, can you talk to us about how we can help our viewers in meeting these three tips? Putting them into action? Yeah. Whether you're talking to Coastal Wealth Management about these concepts that we talked about today, or if you go into the branch, the credit union, you're going to get a team of experienced people that are going to be able to help you make your contributions, maximize your retirement. At Coastal, they're going to talk to you about your savings account options and Wealth Management.

If you have a more longer term perspective, we're going to show you some investment options for your IRAs. And then, you know, one thing about Coastal Wealth Management is, you know, we have lots of options to help you to find a great solution that you're comfortable with. That fits your risk tolerance and your needs, and we're all working together. So whether you talk to someone at the branch and you tell them, Hey, I'd like to get a better rate of return, than you're offering in that savings account, they're going to bring us into the conversation with Wealth Management so we can talk to you about how we can help. So we're all working together at Team Coastal. And then obviously, if you want to do a financial plan with us, we'd be happy to help you with that. Absolutely. And speaking of that financial plan, for our viewers, if they are not aware, it is a complimentary financial review to meet with our team and discover all the options available to you with Team Coastal, whether that be something that our retail team can help you or our Wealth Management department specifically, we all work together and can hopefully help you reach your goals.

Schedule your complimentary Financial Review with us today. You can call us at 919-882-6655. You can certainly send us an email [email protected]. And of course, you can find us online as well. There are some action items to take here with these three tips before year end. We're happy to help you with that. Thank you again… David Burke, CFS financial advisor, one of our dedicated advisors for being with me here today, and of course, Drew Snider, our financial planning director here at Coastal Credit Union. Thank you for your time today and thank you to our viewers for joining us.

And reach out to us. We'll be happy to help you..

As found on YouTube

Retirement Planning Home

Read More

3 Retirement Savings Tips Before Year-End (Full Webinar)

Welcome, everyone, thank you for joining us today. My name is Ewelina Caplap, Wealth Management operations manager at Coastal Credit Union, where we bank better to live better. Today, we will be sharing with you three retirement savings tips before year end. So hopefully today you will come out of this session with some great action items. Joining me today are David Burk, CFS financial advisor, and Drew Snider, CFP, director of financial planning here at Coastal Credit Union. Welcome to you both.

So before we get into our exciting conversation, we will very quickly cover our disclosure slide. Coastal Credit Union contracts with CUSO Financial Services to offer investment products to its members, which can fluctuate with market activity and potentially have some risk. So getting into our exciting conversation today about three retirement savings tips for year end. At this time, let's talk about tip one. Tip one, Roth IRAs. We hear about Roth IRAs quite a lot and the potential tax free income they provide. David, why don't you start us off with a little bit about what this tip is? Thanks, Ewelina.

A Roth IRA is an IRA that you're actually using after-tax dollars to invest in a credit union or an investment Roth IRA and letting that grow tax deferred so that after age 59 and a half, you'll be able to withdraw money out of that account that is 100 percent tax free. That's a huge financial and tax benefit that you should certainly consider before year end. Why don't you add a little bit more to that, Drew? Yeah, the Roth IRA is is definitely the greatest savings tool we have for retirement.

As the illustration shows, the seed for our tree is what's getting taxed. And then you grow this beautiful tree with all this great money on it and you get to take the money off and you don't pay taxes on the money. So it's fantastic and everyone should consider if they can do it or not. The beauty of looking at a Roth IRA going into December is you have a vision of what your income is for the year and you have limitations on contributions based on what your income was for twenty twenty one.

So if your income is basically under about one hundred twenty five thousand dollars as a single person or one hundred ninety eight thousand dollars as joint filers, you should definitely be looking at a Roth IRA and coming into the credit union and talking to us to see if it'll work for you. That's excellent. What a great first tip to consider taking care of before the year end. So we're now going to move over to tip number two, and we're going to talk about some 401(k)s. What can you tell us here, David? 401(k)s are offered typically through an employer or as an employer sponsored retirement plan.

They've been around for quite some time now, and many employees should be taking full advantage of this retirement savings. And again, since we're now getting towards the end of the year, it's always a benefit to evaluate your income at this year, like Drew mentioned in the previous slide. But then also what your income will be next year and give yourself a savings raise of trying to increase your savings. Drew, I'll let you expand more about the comparison of Nick versus Maria and what their savings has done over time. Sure, I'd be happy to. This is a very simple graphic of two individuals who make the same amount of money and started off saving the same amount of money, the same percentage to their 401k plan. Nick maintained that savings rate, whereas Maria, each year, increased her savings rate by one percent or her contribution rate by one percent to her 401k plan until it maxed out at 15 percent.

And you can see that over time, Maria had quite a bit more money. This is after 30 years. She had twice as much money for retirement as did Nick. And you know what? You don't really need to concentrate on anything other than the fact that that right bar looks a lot bigger than the left bar. So with proper planning, we can help our viewers get there. Yeah, just one more comment here.

Before year end, everyone should take a look at their 401k statement and see if they maximized. If they're trying to maximize the amount that they can contribute, they should take a look at that and see if they've been able to do that this year, because a lot of people may think that they are maximizing their contributions when in fact they haven't. Right? Good point. And another thing, I'm not sure if we mentioned it, if you have a Roth 401k option on your plan, if we're talking about a Roth IRAs, certainly Roth 401k option is something that our viewers should be looking into. Can either one of you speak to that for a minute? Yeah, that's an interesting comment, Ewelina, because that's still relatively new in the marketplace and offered through employer 401k plans, but the numbers are astounding how few people are really taking full advantage of that Roth opportunity in their 401k.

And what that means is, you can actually contribute more towards your Roth 401k than you can a Roth IRA outside of your employer-sponsored plan. Plus, your income is not a restrictive factor in being able to contribute to the Roth 401K plan. And just add to that, I would encourage anybody, even high income people who really do like the tax deduction that they're getting from their traditional 401k contributions. It's not an either/or situation. You know, if you're not doing either traditional or Roth, you can do some in both. Personally, I do some in both of mine. I do some in the traditional and I do some in the Roth in my contributions.

I do the same thing on my own planning as well. Well, certainly a lot to take in and consider for year end. So we're going to move on to our final tip. Tip three. Health savings accounts, right? HSAs. And who doesn't like the sound of triple tax savings? So, David, what don't you tell us a little bit about that first? The triple tax saving on a health savings account is phenomenal, and many people have completely overlooked this opportunity for their own household and and being able to save tax free money.

So what ends up happening. If your employer offers you a high deductible health account, then you can participate in an HSA. And what you're able to do is contribute on an individual basis or as a family, and that money can be tax deductible as far as the contribution. Once that money is in your HSA, it grows tax deferred. And then when you're ready to start withdrawing money from an HSA for a qualifying medical or health care expense, it's one hundred percent tax free as a distribution. And I want to comment here. As as you come to the year end, some employers are going to contribute some money to your HSA for you. You can add the rest up to the maximum. And you have until April 15th to do that. But the year end is a great time to take a look to see how much your employer has put into that plan for you. And then what is the calculation? What's the amount that you can add to it? Because you can reduce your taxes in your 2021 tax return, you get tax deferral and you can take the money out tax free for qualified health care expenses.

Excellent. So it sounds like there's a lot to get done here working with Team Coastal. So who are we right? Who is Team Coastal? Drew, can you talk to us about how we can help our viewers in meeting these three tips? Putting them into action? Yeah. Whether you're talking to Coastal Wealth Management about these concepts that we talked about today, or if you go into the branch, the credit union, you're going to get a team of experienced people that are going to be able to help you make your contributions, maximize your retirement. At Coastal, they're going to talk to you about your savings account options and Wealth Management. If you have a more longer term perspective, we're going to show you some investment options for your IRAs. And then, you know, one thing about Coastal Wealth Management is, you know, we have lots of options to help you to find a great solution that you're comfortable with.

That fits your risk tolerance and your needs, and we're all working together. So whether you talk to someone at the branch and you tell them, Hey, I'd like to get a better rate of return, than you're offering in that savings account, they're going to bring us into the conversation with Wealth Management so we can talk to you about how we can help. So we're all working together at Team Coastal. And then obviously, if you want to do a financial plan with us, we'd be happy to help you with that. Absolutely. And speaking of that financial plan, for our viewers, if they are not aware, it is a complimentary financial review to meet with our team and discover all the options available to you with Team Coastal, whether that be something that our retail team can help you or our Wealth Management department specifically, we all work together and can hopefully help you reach your goals. Schedule your complimentary Financial Review with us today. You can call us at 919-882-6655. You can certainly send us an email [email protected]. And of course, you can find us online as well.

There are some action items to take here with these three tips before year end. We're happy to help you with that. Thank you again… David Burke, CFS financial advisor, one of our dedicated advisors for being with me here today, and of course, Drew Snider, our financial planning director here at Coastal Credit Union. Thank you for your time today and thank you to our viewers for joining us. And reach out to us. We'll be happy to help you..

As found on YouTube

Retirement Planning Home

Read More

Step 1 The Retirement Success Process: Investment and Risk Management

foreign welcome back to the retirement income show I'm Mark Elliott here with the CEO and founder of Oak Harvest Finance group we're talking about the retirement success plan once it's in place it's not done it's not finished it's always changing and evolving with you and your life so it's really important to get this in place to have a plan give you more confidence and and be more comfortable in retirement with maybe hopefully not so much stress about where you are again that number is 800-822-6434 to learn more 800-822-6434 Troy's breaking down what is exactly the retirement success plan so it starts with the investment plan then it's the income plan then it's a tax plan then it's a health plan and then it is the estate plan so I want to kind of tie together why that sequence is is important just briefly but if you don't understand if you don't have a proper risk management structure in place obviously you open the potential for losses beyond your willingness to stay the course now it's not just stay the course with the Investments it's stay the course with your retirement success plan with your financial plan so we have to Define what those guard rails are first this is the process of understanding where your risk limitations are so if you think about you're going down a highway and of course you have guard rails on each side and if you go off the highway those guard rails are there to protect you from going into the opposing Direction on the freeway now in retirement when we're talking about managing risk when we can identify these emotional guardrails so are you willing to see and I and I'd like to Define risk in terms of dollars not percentages and I'll tell you why in a minute but let's say you have a million dollars saved for retirement if all that money is in your 401k first and foremost we have to realize that it's not really a million dollars because every dollar in there is tax deferred so we have to understand we're going to address that as part of this process but when we talk about risk we have to understand that not all of those dollars are yours you have a junior partner on that account we want to keep them a junior partner we don't want Uncle Sam to become a senior partner or a majority share owner of your retirement account but just understanding that that not all of that money is yours that you do have a junior partner in that account it ties into this risk management discussion a little bit so when we talk about risk in terms of dollars are you willing to see your account go down two hundred thousand just a question could be yes could be no it doesn't there is no right or wrong answer but by asking these questions we can start to Define where your emotional guard rails are because the number one thing that you can do when it comes to ruining a financial plan or a retirement plan is to have more risks so your accounts go down more than you can mentally tolerate emotionally withstand and then you sell get out sit in cash for two or three years miss the rebound and now you're you're in a you know you're in a bad bad bad spot I can't tell you I mean we've been through this so many times with clients and conversations about you know Troy I've been watching the news I think we're going into recession we need to get out of the market we need to do this or my accounts are down 10 or 20 or when covid hit we there's a plan for for a proper plan accounts for the markets being down 20 or 30 percent so when we talk about risk management and we're asking you these questions the reason why is because we're already planning for recessions we're planning for potential Market crashes this is part of life okay we cannot avoid these things unless we completely stay in cash and if that's the case you might as well bury the money in the backyard and just spend whatever you can and hope you don't run out and eat rice and beans for for for retirement and that's not how most of our clients that's not how most of you want to spend you know after working for an entire career you want to spend your life so are you okay with a 200 000 decline by the way which is 20 and the reason why I Define it in terms of dollars is because a long time ago I had a client come in well it was a prospective client at the time and like most financial advisors we would talk about it in terms of percentages and and we said are you okay with a 10 or 20 decline he said you know what 20 is pretty much my Max and he had around a million dollars so then I I just happened to put it in terms of dollars and I said okay so if your accounts go down two hundred thousand dollars you're okay with that and he said he said no Troy he said I would fire you on the spot and so that you know for me it connected a Big Dot It was kind of a big evolution in my career when I was younger because I realized I'm a financial guy I do this every single day I think in terms of percentages and statistics and and but most people think in terms of dollars so when we ask you that question you say yes I'm okay with a 200 000 or 100 000 or maybe it's not even close to that or maybe it's much much much more what that does for us is it helps to Define what type of portfolio we need to construct so emotionally there's a small probability that it is going to hit your your downside guard ramp and if we can go through retirement and not ever hit that downside guard rail well there's a very good chance from our experience that you're going to stay the course you're going to stick with your plan and if you can stick with your plan you have a much higher probability of success in retirement this is why we call it the retirement success process this is why we call it a retirement success plan this is what we want to deliver to you so now I said I wanted to talk a little bit about the sequence and why risk management in investment planning comes first if we don't and in most simple terms if if your money let's say you have a million bucks and you never had to take anything out if you average four percent versus nine percent at higher rates of return you obviously can expect your accounts to grow to a larger value that means the income planning is impacted that also means that now your tax planning is impacted so we can't build an income plan or a tax plan without first understanding an estimated reasonable expected return for a combination of Securities inside a portfolio so step one has to be this risk management discussion which then can lead us to the investment construction of your portfolio which then gives us a pretty good idea of expected return upside downside deviation so we can now start talking about income planning we can actually project and do a sensitivity analysis on tax planning based on different account levels let me break that down for you before we get into the tax planning section later on the show if you have a million dollars in your IRA you are forced to start taking a certain percentage out it's around four percent at age 72 but as you get to be 74 76 77 you're required to distribute a larger and larger percentage so if your million grows to 1.5 you take let's say four percent of that out that's a that's a number that is less than if your IRA grows to 2 million so the more aggressive your portfolio is or the higher expected return the more we should anticipate that require minimum distribution being a larger number that rmd is the amount you're forced to take out and pay taxes on we've seen clients I I'd like to phrase this for prospective clients because we address this with you as a client this is part of the retirement success process and the retirement success plan but so often when someone comes in here and they've done a pretty good job saving they have eight hundred thousand they have a million they have two or three million when we start to do this analysis if you don't address this tax problem and it is a tax problem it can be you know a tax nightmare for many of you those rmds when we get out to be 75 and 77 or 78 a hundred thousand hundred and fifty thousand two hundred thousand now you're taking that money out you're probably not spending that much on top of Social Security on top of any rental income or real estate income or pension or dividend or interest or any other income that you have outside of your retirement account and we've seen many people be in a much higher tax bracket and have much more income in their 80s than they ever had throughout their entire life up to that point and it's because of a lack of planning so that's what we're trying to get ahead of so we have to understand the risk structure of our portfolio and how we manage that risk so we can keep you on course we can keep you on schedule with your plan that then gives us an idea of a range of expected returns based on basic financial planning Concepts from there we can develop that income strategy and income is not just Social Security it's not just how much to take out don't get me started on the four percent rule but it is also from which accounts and then we get into the taxes so if you don't have a retirement success plan give us a call 1-800-822-6434 we're going to walk you through this process if you become a client you will have this plan in place that deals with risk Investments taxes income along with the rest of the retirement success plan 1-800-822-6434 Oak Harvest Financial Group check out the website check out the YouTube channel Oak Harvest Financial Group so we're talking about the retirement success plan Troy still got a lot to get to stay with us we're back in one minute investment advisory services offered through Oak Harvest Financial Group LLC Oak Harbor's Financial Group is an independent Financial Services firm that helps people create retirement strategies using a variety of insurance and investment products investing involves risk including the loss of principal any references to protection benefits or lifetime income generally refer to fixed Insurance products never Securities or investment products insurance and annuity product guarantees are backed by the financial strength and claims paying ability of the issuing insurance company Oak Harbor's Financial Group LLC is not permitted to offer a No statement made during this show shall constitute tax or legal advice you should speak to a qualified professional before making any decisions about your personal situation we are not affiliated with the US government or any governmental agency this radio show is a paid placement foreign [Music]

As found on YouTube

Retirement Planning Home

Read More

The $65,000 Roth IRA Mistake To Avoid

– I've seen too many of
you making some mistakes when it comes to investing
in your Roth IRA. One of them could cost you
$65,000 and the other one could cost you almost $500,000. You guys are seriously going
to make my beard turn more gray than it already is if
you don't knock it off. So let me show you what to watch out for, that way, you don't lose more money than you have to and
I can save a few bucks on hair dye for a couple more years.

A Roth IRA is a self-directed
retirement account where you can contribute after
tax dollars to be invested. Since the money going in is taxed, the growth of your investments are not taxed and the money withdrawal from the account are never taxed either, as long as you don't try to pull out some of the money before the age of 59.5. There is no such thing
as a joint Roth IRA. So if you and your spouse
want to contribute to one, then you'll have to do it individually, hence the name Individual
Retirement Account. If you both have enough
earned income separately, then you can each invest up to the $6500 limit for the year. If one of you works and the other doesn't, but you file a joint tax return, then the person working can, of course, contribute to a Roth IRA and
your spouse can contribute to a Spousal Roth IRA as well. Remember, these accounts are
owned by the individual person and on paper, not co-owned by both people.

I want to try to encourage you to max out your Roth IRA every single year, if possible, because if you
don't do it for that year, then in the future you
cannot go back and contribute for a previous year once that time limit has passed. A Roth IRA is one of those accounts where I would bend over backwards to make sure that I can
put in the full amount allowed every single year. In my order of operations for
what to do with your money, I have maxing out a Roth
IRA right after investing up to your employer match and HSA. That is how important
this type of account is. The good news with this
is that you actually have a timeframe of 16
months to contribute for each calendar year. So if we are in 2023
right now, then you have from January 1st, 2023, up until
when taxes need to be filed for that year to contribute,
which in this case, would be April 15th, 2024.

That's how it is every single year, so ignore the actual dates in my example and pay more attention to the timeframes since the date taxes are due
will change by a few days from year to year. Most brokerages will ask
you which year you want to contribute to. For example, I personally
invest using M1 Finance, which you can check out down
in the description below, and also get a deposit bonus as well. If I contributed to my Roth
IRA through them right now, then they would ask if I wanted the money to go towards 2022 or 2023, since at the time of recording this, we haven't hit the date
where taxes are due. This is great because it
gives you some extra time beyond the current year to
contribute Roth IRA money for that year.

Before I tell you the next mistake that I see way too many people making, please help support my dog Molly by hitting that thumbs up
button and sharing this video with anyone you think it would help. Once you deposit money into your Roth IRA, there's one more extremely important step you need to do that I see a ton of people missing, and that is
actually investing the money. I can't tell you how
many people I've talked to over the years who just put money into the account assuming
it would automatically grow, or knowing that they
needed to invest the money, but just forgetting to do
it because life happens, and things naturally slip out of our mind, only to check their account
balance years later, realizing that it hasn't grown in value because they didn't invest the money.

Stop the nonsense here and
just set up auto investing within your investment account, and if you're waiting because you think that you can time the market
to buy in at a lower price, you can't, because it's
nearly impossible to do, so just to get the money
invested right now. If you know how you want to
invest the money, then great. If you don't, then I personally
like the two fund portfolio for people who are in
the accumulation phase of investing and in the
three fund portfolio for when you're closer to
retirement or in retirement.

I'll have a link to a
playlist then I made just for you where I teach you
about both of those portfolios down in the description below
and above my head as well. When you contribute to a Roth IRA, all of your money is not
locked up until 59.5. You can withdraw the
contributions that you've made before that age without paying a penalty, but you cannot withdraw any of
the gains within the account. For example, if you've contributed $6500 and the account has grown to $10,000, then you can withdraw
the $6500 contribution, but you cannot touch the $3500 gain without paying a penalty until 59.5. I've gotta interject for a second to give my personal opinion on this. While withdrawing money
penalty-free is an option, I want to encourage you not to do this. To be brutally honest, I think that doing this
is one of the dumbest, most irresponsible, short-sighted
things that you can do.

Withdrawing just $6500
worth of contributions would cost you $65,000 in
future investment growth. So when any money is
taken out of this account before retirement, think
about how it's actually going to cost you 7,800 Chipotle burritos, or 65 new Apple iPhones, or anything else that you would buy for that amount of money. And yes, I am fully aware
that you can do a penalty-free early withdrawal up to
$10,000 before the age of 59.5 for a first time home purchase. But this is just as stupid as withdrawing your contributions early
because that $10,000 is costing you over $100,000
in future investment growth when you pull that money out. Average annual home appreciation over the past 12 years has been 6.11%, and the US stock market
has returned 12.27%. Leave your money in the freaking Roth IRA and go earn that $10,000 that
you need to buy the home. Responsible investing takes time, like five or 10-plus years, and this money needs time to grow.

The second you withdraw
any of your contributions, you are cutting down that tree before it even has a chance to grow fruit. Once you withdraw
contributions from the past, you cannot replace that
money in the future. I get that emergencies happen in life, so that's why you need
to have money set aside in an emergency fund to
pay for those things. Do not, under 99.999% of circumstances, use your Roth IRA money for anything other than when you retire. One thing I see way too many people doing is investing in a
taxable brokerage account before they have their Roth
IRA maxed out for the year.

This is a huge mistake from a tax savings
perspective for some of you because of how each account is taxed. With a Roth IRA, you invest with money
that's already been taxed, so the money can grow tax-free
and be withdrawn tax-free. With a taxable brokerage
account, you are paying taxes for the ongoing dividend
distributions every single year. Then you have to pay capital gains tax when you go to withdraw the money.

Since the money within
a Roth IRA will grow and can be withdrawn tax-free, realistically, you want
this account to get as large as possible, but not at the expense of
your personal risk tolerance. You should not take on
additional levels of risk by investing in more
risky, unprofitable stocks that random YouTubers have been pumping over the past few years or actively manage funds to
try to achieve higher returns. 99% of people, including
myself, cannot handle investing in something with a
high risk and potential, potential, high return. So don't even bother. The money in this account
is for retirement, so is it really worth it to risk that 60-year-old's financial wellbeing because you decided to gamble with their money right now? I doubt it. Some of you might be over
the income limit to be able to contribute to a Roth IRA, or some of you will be at
that point in the future as your income grows. You can still contribute to a Roth IRA to take advantage of the tax-free growth by doing a backdoor Roth. To simply explain the process,
all you do is contribute to a traditional IRA.

Do not invest the money yet. Then contact your brokerage
to have them convert the money to a Roth IRA. Now, I have done it with M1 Finance before and it was extremely easy. It only took I think two or three days for the money to get into my Roth IRA. Only do this if it makes sense based on your current tax rates
and future financial plans. There's two things that you can do. if you are someone who thinks that you might be over the income limit, but you are not going to 100%
know until the year is over. Number one, you can
either wait until January of the following year,
like we talked about in one of the previous mistakes that
I mentioned, or number two, you can just contribute the
money to a traditional IRA, then do a backdoor Roth within
the year to get the money into the account so it can be invested.

That way, if you are
over the income limit, you've already done the backdoor Roth. If you're under the income limit, no big deal 'cause you had to pay taxes on that money that was going
into the Roth IRA anyways. A question I get a lot is
whether or not you can contribute to a Roth IRA on different brokerages. The simple answer is yes. This is how it would play out. You can contribute up to the max for one year
on, say, M1 Finance.

Then you can decide to contribute up to the max on fidelity the next year. Then you can contribute up to the max on Vanguard the following year. So by the end of that third year, you would have three different Roth IRAs with three different brokerages, and there is no problem with that. You can take it one step further. If you decide, hey, out of these three, I actually like M1 finance
better than the other two, you can convert the
Roth IRAs with Fidelity and Vanguard into your
M1 Finance Roth IRA.

You can also split up your contribution for the same year among
different brokerages. So if for this year you want
to say contribute $4,000 to an M1 Finance Roth IRA and the remaining $2,500
into a Fidelity Roth IRA, then you can do that without any problems. The only thing you
cannot do is try to game the system by saying contributing $6500 into an M1 Finance Roth IRA and $6500 into a Roth IRA with another brokerage. You cannot exceed the maximum
amount allowed per year across all of your Roth IRAs on all of your brokerage accounts. Technically, you could do that since all of the brokerages aren't talking
to each other to keep track of what you are contributing, so you have to self-manage this. I would highly, highly recommend making sure
that you do not do this, whether it's on purpose or on accident. I don't know what the penalty is for this, but all I know is that you do
not want to get caught trying to defraud the government
in any way, shape, or form.

Long-term investing is the name
of the game with a Roth IRA. This money is for when
you are in retirement, so make sure to take that into account when investing this money. No gambling it on stocks
that random YouTubers are promoting. I think the two or three fund portfolio is perfect for your Roth IRA, which you can learn more about
in these videos to your left. There's a bunch of free stocks and resources down in
the description below to help with all of your personal finance and investing needs. I'll see you in the next one, friends, go..

As found on YouTube

401K to Gold IRA Rollover

Read More