What's The Most Common Retirement Myth?

Sometimes, we talk about the “myths” of retirement.  And Forbes says one of the most common ones is that we’ll be in a lower tax bracket when we quit working.  That certainly seems to make sense – why would it not be true? John talks about helping people get into tax planning now to prepare to have a significant tax year and how his strategies can help put MORE money in your pocket and LESS in Uncle Sams! 

Transcript

Jessica: 0:05

Welcome to your family, your finances the podcast with John Markel of Rose, retirement get more details on the website at Rose retirement.com. Everyone's got their resolutions, whether it's the diet, or maybe that's your goal this year is to, you know, buy that, you know, golden ticket to Jamaica, or maybe you want to travel somewhere or, you know what have you, we all start off the year kind of refreshed and on the good foot of, okay, this is my resolution. And if you could tell people right now a financial resolution we should make to ourselves something simple that we all can do, whether you're in your 40s 50 6070s, what's something you would recommend

John Merkel - Senior Financial Advisor/Founder CEO of: 0:40

a second opinion. And you may not even have a first opinion. But if you have already got a retirement plan, that's okay. Just get a second opinion. Because I cannot tell you, Jessica, over my years, there has not been one person come to my office, where we couldn't help them in some way, at least, number one, explain to them what they do have, because a lot of people they buy something or they do something 20 years ago, or, you know, 10 year to shoot last year, they don't understand what they have. So what we do is a second opinion would be my suggestion, because at least let us look at what you have. refresh your memory on what you have. So that you know too, and we may find some little pointers on what to maybe correct or add to or take away from. But that would be my suggestion.

Jessica: 1:23

And if you're looking for that second opinion, that second option that you know, second set of eyes, give us a call today 903-690-7131 903-690-7131. You know, sometimes we talk about the myths of retirement. And Forbes says one of the most common ones is that we'll be in a lower tax bracket when we quit working. That certainly seems to make sense. But of course, this is not true.

John Merkel - Senior Financial Advisor/Founder CEO of: 1:50

Oh, without a doubt, and I get that a lot too. And that is the biggest misconception. And the reason that is is you know, if a client has saved properly, they're probably going to average 40 to 50,000 60,000 a year on their assets that they've saved for their 401, K's or IRAs. But you add an additional, you know, 40 50,000 due to social security, while they're in the same tax bracket as when they were working. So that's the main misconception. And then if you add RMDs, which we talked about on our previous show RMDs that a client has to take out with their locker not because IRS wants their tax money now, that throws them into another tax bracket. So a lot of times I plan on clients, well, if the economy early enough, we can plan on them being in a lower tax bracket based on different vehicles, we put their money in as far as tax free vehicles. But if they come to me, and they're trying to be in a lower tax bracket, that's one way we try to offset that. The other way is the people that have to take RMDs and they know they are in the future, is we try to position those funds into maybe Roth accounts before they reach RMD age, so they don't have to pay the tax on those accounts. So just a little transition, a little conversation, little education. But yeah, we see that all the time. That is one of the biggest misconceptions in retirement.

Jessica: 3:05

And, you know, I like that you talked about here looking at ahead, I was just jotting down, forward financial thinking being able to kind of position things in a better position now for the future. And, of course, taxes. Look, there's been, you know, no secret about it ever since Biden took office, we all know taxes are gonna go up, it's just gonna happen. That's just life, especially after you look at the debt that we've incurred as a country. A lot of people wondering how can I start tax planning now and the beginning of 2022? What can I be doing now to position myself for a better tax year,

John Merkel - Senior Financial Advisor/Founder CEO of: 3:36

right? One of the main things and I'm glad you brought that up is plan for taxes going up. That's the simplest thing a person can think about. If you know the taxes are going up, every dollar that you put somewhere, is going to either go up in taxes, or if you plan ahead, like we will show you how to plan, either you're not gonna pay tax on it, those are only two options. So if you think taxes are going up in the future, and 100% of us think they are then where you put that dollar bill is going to dictate when you go pull that money out what the outcome is going to be either gonna be taxed on it at a higher tax bracket, or you're not gonna be taxed, there's no other option. So keep retirement simple. That's really the name of the game. You just got to know where to put your money, how to do it, when to do it. And that's where rose retirement comes into play. As we do this every day, day in and day out. We see in every retirement account, possibly no demand, so we can help you all with that. Sometimes, it may be a little tricky. The other times is yes, you have to pay tax on certain things in order to get it into a tax free bucket. So just a little game plan. And like I said, education,

Jessica: 4:36

education is key. And I liked that you say keep retirement simple. You know, let's be honest, when we think about okay, well, I've worked so hard for 3040 50 years, you know when it comes to having this conversation about the rest of my life and making sure don't run out of money. It's going to be this complicated, you know, deep dive graphs everywhere. 50 pages of information and it's not like that, when you meet with you, right I mean, it's Easy.

John Merkel - Senior Financial Advisor/Founder CEO of: 5:00

Yeah, and we could make it that way. But I choose not to because I'm simple too. You know, like this meal plan we're talking about, I literally have to see what I have to eat in the morning to figure out my whole day, if I don't see it, I'm probably going to mess up and eat some, something that shouldn't be eaten. But if somebody says, Hey, John, take this at this time, this at this time, that at that time, I can do that. I'm simple, I can understand that. But if I have to do it on my own, and you know, someone client comes in during the day and throws me off my my lunch menu, it's game over. So let's keep it simple. And let's teach you the hallmarks on what to look at what not to look at. And they make this stuff confusing for a reason. And the reason is, they want you to give your money to them, whoever the advisor is, so that they're the expert, and we want you to have an active role in your retirement. So we want to teach you on why you're doing what you're doing when you come to Rose retirement.

Jessica: 5:54

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