Episode Transcript
[00:00:00] Speaker A: Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
[00:00:22] Speaker B: Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the LGBTQ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of. A retirement you can take pride in.
[00:00:48] Speaker C: No matter who you are, where you're.
[00:00:50] Speaker B: From or who you love.
So now let's start the Show. Here's Matt McClure.
[00:00:58] Speaker C: Well, hello there and welcome to another edition of Take Pride in retirement. Matt McClure here with you, your host, your are, your friend, your pal and your confidant. Thanks so much for being a part of things. As always, you know, this is the show that is built for you as an LGBTQ person who is wanting to plan for retirement. Yeah, you want to, you want to retire someday. That's the goal, right? That's the goal for everybody. At least it should be if you're, if you're working. Unless you just love working so much that you, you know, you don't want to do that. But then again, if you love working so much that you don't want to stop, eventually your body's going to be like, look, I don't think we can do this anymore. And you know, chances are you can't. So either way, you still got a plan, right? Even if you love work, you hate work, or anywhere in between, you still got to plan. So we focus on helping you build a tax efficient, fee efficient, market efficient portfolio. Something that works for you and your unique situation will also help you maximize Social Security. All of the things I can do that in a free report for you. All you have to do is go to take pride in retirement.com.
you can go to take pride in retirement.com plan if you would like as well. Or you can just go to take pride in retirement.com, click get your plan up at the top of the page. I'd appreciate it if you do that. Can also give me a call, 8552-469211-85524-69211. Take a look at what you got now and we will Revamp it. If it needs revamping. If it doesn't need revamping, I'll tell you that too. That's why there's no cost, there's no obligation with that free consultation as well. Um, you know, and really retirement, when it comes right down to it, is not just about money, it's about freedom, it's about security, it's about living life on your terms.
And so you don't want to live it on anybody else's terms. You don't want it to be subject to the whims of the market and all that stuff. What you want to do is plan in advance so that you know what you're getting yourself into when retirement comes.
And that really is what the show is about today is, is results in advance.
Which sounds kind of like pie in the sky, like, oh, I don't, you know, how can I get results in advance? Well, there are some different ways to do what we sort of call results in advance planning so that, you know, no matter what the market does, you've got a certain base, a foundation that's going to be strong for your retirement. You know, when you build a house, right, you build that strong foundation first and then you add the walls and you add the, you know, insulation and you, you, you know, put the drywall up and you build the roof and you do all the things, right? You don start with the roof and then go down. You gotta start with that strong foundation. So that's what we're gonna do is talk about today is that foundation and getting you results that you can see in advance so that you know what you're gonna be in for in retirement. Now, I know as a member of the LGBTQ+ community myself and working with several clients who are also LGBTQ plus, that it often comes with that. Retirement planning for LGBTQ plus people often comes with extra layers. You know, we've had maybe unequal lifetime earnings, career disruptions due to discrimination. We've had a higher likelihood maybe of being single. Whether it's by choice or otherwise, we likely are more likely to be child free, rely on chosen family, perhaps in retirement, greater health care and long term care risk as a result of that. And so, you know, retirement shouldn't feel uncertain, especially when the world hasn't always been fair, right?
And planning gives you back control if you feel like things. And I know how things feel in the world today. Kind of out of control, right? A little bit. Just a little bit.
We want to give you back that control.
And so planning ahead, getting to Some of the guarantees in life. Oh, did you just say that forbidden word? In the financial industry, yes. There are certain guarantees that you can get to in your retirement plan, and we're going to go through some of those today. And actually, I've divided this up into two different parts. So this will be the first half of this discussion. And then later on this week, you'll be able to hear the second part. It'll be part two of Results in Advance Planning here on Take Pride in Retirement. And, you know, I mean, if you want clarity, that kind of clarity, listen, continue listening. If you don't want the guesswork that goes into retirement planning, maybe the old fashioned way, or the way that you've done it, or the way that your parents did it, or whomever, listen and reach out to me for that complimentary strategy session. There's no pressure. There's no judgment at all in any way. Take Pride in Retirement. Dot com is the place to go for it. All right, so, you know, a lot of LGBTQ plus retirees, many if not most, I would say, at least in my experience, do not have the luxury of figuring it out later.
You know, oh, I'll figure that I'll cross that bridge when I get there in retirement. I'll turn 65 or whatever and then I'll retire and I'll figure it out then. No, I mean, that's not a good plan for anybody, but especially for LGBTQ plus folks. So if you, when you think about something like a results in advance plan, having a plan that's showing you that strong foundation ahead of time. So, you know, what, what base you have to then build those walls and the ceiling and all the stuff that can give you a lot of peace of mind. I mean, it means knowing what your income is going to be, roughly, what your taxes are going to be, what your risks actually are in retirement and before.
Right. And it's not about guessing, it's actually about removing uncertainty before you retire. It's not a guessing game here. You know, I mean, hope is not a retirement strategy. Right?
Hope. And you know, what are, what are some things for good luck? You know, like, was it throwing salt over your shoulder? I don't know, just doing the things, knocking on wood, like that kind of stuff. Not a retirement strategy.
I'm definitely forgetting things that are supposed to be good luck, you know, the opposite of breaking a mirror and getting seven years bad luck. Anything that you can do for good luck? Not really a good retirement strategy can't hurt, certainly, but it's not a Good strategy, especially when you've already had to navigate uncertainty in a lot of areas of life, like so many LGBTQ folks have to. So what we want to do is minimize a few different things in retirement. Number one, taxes. Minimize your tax burden in retirement. And when you can do that, that gives you a lot more certainty about, okay, here's the money that I actually have. It's not, okay, here's money that I have, but a big chunk of it's going to, to Uncle Sam in the, the my retirement years. Like, that's not a thing to have to worry about. Like, obviously you want to pay your fair share.
That is not in dispute. What you don't want to do is leave Uncle Sam a tip.
You know, he's got his, he's got his handout, Sam, where my tip? And you're going to say, I don't have one for you, Uncle Sam, because I planned ahead and I'm going to pay what I owe, but I am not going to pay extra.
And so that is something that really matters for LGBTQ plus households because many couples didn't have access to marriage protections for decades. You know, those, the benefits that go along with it.
And some individuals may be planning solo retirements as well. So you don't have that even, even now, even if you're partnered. You know, you might have separate financial lives even if you have a partner, but you're, but you're not married.
And taxes, also, they hit harder when you don't have any margin for error. Right. So you want to make sure that your plan includes margin for error. Obviously, you need that no matter what your situation is in life.
But what you want to do is also make sure that you have a good idea of what your tax burden is going to be in retirement, and you minimize it to the fullest extent possible. So some key strategies here. Number one, I've talked about this before on the show, but it bears repeating in this part of the discussion. It's Roth conversion, Roth conversions. You have maybe your, for money from your 401k, maybe have an IRA, a traditional IRA, something like that, a 403B, a TSP, if you're a federal employee, that kind of thing. You do all the, all the things you contribute to all those all through the years. Then what happens in retirement? Well, it's never been taxed before, generally speaking, especially in the 401ks, the 403B's, TSPS, all that that's taken out of your paycheck, all pre tax.
And so that money that hasn't been taxed is going to then be taxed in retirement.
You're not paying taxes on the seed that you plant. You are paying taxes on the harvest that you reap later on down the road. And so it's a much bigger chunk of change.
You flip that around though, when you're talking about a Roth, you pay taxes on the seed. So if you do a Roth conversion, you pay, go ahead and pay the taxes. Now when you do that conversion, you convert a certain amount each year for a certain number of years is generally how we'll do Roth conversions. And then you pay the taxes that you'll owe on a year to year basis as you do the conversions on just that smaller amount. But then you let it grow tax free inside that Roth ira. And then no more ever do you have to pay taxes on that money. The growth is tax free. The withdrawals in retirement are also tax free. It's a great, great thing. There are also no required minimum distributions on that portion of your money.
No required minimum distributions at all.
So you say, well, what, what are required minimum distributions? Maybe you've heard the term rmd. That's what that means.
That means that you haven't paid money on that traditional account, tax money on that traditional account to Uncle Sam. You reach right now age 73, eventually it'll go up to 75. Right now it's 73. And Uncle Sam says, okay, you haven't paid anything, so I'm going to make you make a withdrawal from your accounts.
And I have those tax advantage tax deferred accounts. And then that is because I need that tax money now, not later when you decide to take it. You're 73 right now. I need it now.
Right. So he's, you know, he's, he can be a nice uncle. He can also be a bit of a greedy uncle, our old Uncle Sam. So, but with a Roth, that doesn't apply because you don't pay taxes on the growth or on the withdrawals at all. So uncle. It doesn't matter, Uncle Sam, one way or another when you withdraw it or if you just let it sit there forever because there's no more tax money due because you've paid them on the front end instead of the back end.
This can also be something that's powerful for survivors. They can inherit a Roth ira, singles who might, you know, be having a little bit less in the retirement accounts as you, as you age because you know, you've, you've had one income instead of two going into retirement accounts and all that stuff be making contributions based on your one income rather than two. And so that's something. If, if you have a big tax free bucket like that, boy, that's good for you because then you know how much money you're going to be able to keep in retirement and how much money is going to be taxed. And on that portion, it is none, if it's a Roth portion of your funds.
And then also, you know, leaving money to chosen family, to nonprofits, that kind of thing. That can come in handy as well when you're talking about things like estate planning and using Roths to do that and pass along those tax advantages. Also, life insurance, there are only two types of tax free investments that are available to you today. One of them is a Roth IRA Roth account. There are Roth 401s out there as well. Maybe your employer offers one, maybe they don't.
But there are Roth versions of those as well now.
So the Roths are one. The other is life insurance.
You, you heard that, right? Do not adjust the podcast machine.
That's how it works, right? It's a machine. There's like a little, there's a little hamster and a wheel inside the podcast machine and it's, and it's going. And that's how you're hearing my voice. Things you don't know. You learn something every day. No, but the other is life insurance. Yes, you heard that correctly. Life insurance, you can have not just money for dying in life insurance, not just that death benefit that gets passed on to loved ones after you're gone, but you can have money for living within a life insurance policy as well. I can show you how to do that. You go to takeprideinretirement.com take prideinretirement.com and click on the get your plan page or just go to takeprideinretirement.com plan and you can reach out to me there. 855-246-9211 is the number 855246, 9211.
And I can tell you, you know, kind of how that works because there's a specific kind of life insurance policy that you would want to use for that.
And it's something that you could have tax free income from in retirement and still have that death benefit to pass on to your family or your loved ones, your chosen family, whomever it might be later on.
So that's that. So, so life insurance for tax free income is a thing and it's especially important for LGBTQ families, maybe with Non traditional heirs. And you can just pass a name, that beneficiary, pass that along to them or those worried about survivor income as well.
Now, today's tax rates, by the way, are historically low.
And we know, you know, we just had this tax bill passed this past year extending a lot of the tax cuts that were first enacted in 20.
The thing is, our, our national debt is not getting any smaller. As a matter of fact, it has started accelerating in the other direction, the not so good direction. And so as that situation gets worse, eventually taxes are going to have to go up.
It just is a matter of when and how much. Right? I mean, that's what a lot of what most analysts that I have heard say. That's not just me spouting that off. A lot of analysts and, and you know, economists and all of those types say that very thing because it's just math, you know, that's, that's how it's going to have to work out at some point. So today's tax rates are historically low. So take advantage while you can do a Roth conversion, take advantage of paying the taxes now on a smaller amount of money on that seed that I talked about a few minutes ago, that seed that you're going to plant and then let grow rather than on the harvest at lower rates, rather than paying more, paying tax on more funds later on on that harvest at a higher rate, potentially. Right.
Uncertainty is everywhere in the world today and there's definitely uncertainty about future policy changes when it comes to your taxes, tax rates and all of those things.
So, you know, and here's the thing, tax planning is, is, yeah, it has to do with politics because lawmakers are the ones who set those rates. But tax planning is not political for you, it's personal.
Right. So it's one of the biggest levers that you can still control.
Minimize that tax burden in retirement as much as you possibly can. All right, now, the reality check that you need to sort of give yourself here as we head into tax season. And yes, it is a new year, so the taxes are going to be due come April 15th. And that's not just a deadline. It can be a wake up call. Right? It can be a reality check moment because I said and I mentioned there are only two truly tax free investments, the Roth accounts and life insurance. Right. A couple minutes ago. Now, some people, you might be listening to the show and you say, oh, what about, you know, municipal bonds, for example? I've always heard that those are tax free.
Not always.
They could be subject to federal, state, Local taxes in, in many cases. So you just have to kind of check and make sure. But truly tax free, the Roth accounts and life insurance are the only truly tax free investments that you can make today.
And they could also speaking of municipal bonds, one other thing that I sort of skipped over there for a second was the Medicare surcharges like that can affect your municipal bonds, can throw you into a different, can throw you through a different tax bracket perhaps, or you know, if it is subject to taxes, that is, or if you have a situation where you have municipal bonds and you're generating income from those, those can count against your Medicare surcharges. Your irmaa, right, the income related Medicare adjustment amount.
Irmaa, she's not your friend. Irma from down the street, she is not really your friend at all because you don't want those Medicare surcharges to be adjusted upwards because you made more money. And that's what will happen if Irmaa gets a look at your money there and she says, oh, you had these municipal bonds, I'm going to count that money because that's, that's your income there. And so Medicare surcharge is another thing to pay attention to. Not only just simply the taxes, there's that kind of other layer on top of it. I mean, here's the thing too. You may stop working. Taxes don't stop even though you're stopping working, right? You can, you still pay those, those income taxes even though you're not earning income from work necessarily, you're earning income from the money that you previously earned and put away. And so you're, you're paying taxes on that. So you want to minimize all of that as much as possible. And so if taxes worry you now, bottom line is they're going to worry you more in retirement. It's just going to kind of snowball as you go on forward unless you have a plan. And so I want to get a plan in place for you. All right. Take pride in retirement dot com. That's take pride in retirement dot com. What will you get a financial plan to your 95th birthday. You'll get a look at what your plan is now to your 95th birthday. Like what investments or savings or whatever it is you have now. Where that roadmap is going to take you is projected to take you, I should say, based on a lot of different analyses, a thousand plus different possibilities, we will run and show you kind of what's most likely to happen, what's least likely to happen, what's pie in the sky that could happen if everything is great and sunshine and roses, but then what's most likely to happen, we'll emphasize that scenario and then we'll say, okay, here's a plan that could work better for you. If we can come up with a plan that works better for you, chances are we can not always. You know, sometimes I'm like, look at you got. You got a great thing going. Keep it up sometimes. Most of the time, I can improve someone's situation in their retirement accounts. And so I want to do that for you. We'll take a look, we'll come up with a plan. We'll get you all of the detailed analysis of Social Security Optimization report in the form of an RSSA roadmap, as well as what that document is called. And it's all a comprehensive look at your individual financial situation now and what it could be if you choose to work with me. All right, Take PrideInRetirement.com is the website. Once again, you can go to TakePrideInRetirement.com plan as well. All right, so that's it for this half of this discussion. Coming up a little bit later on in a few days, you're going to also hear part two, episode two of the Getting to the Guarantees kind of discussion here and results in advanced planning for your retirement. Right. So you'll want to tune in for that or download that. Make sure you're subscribed to the podcast. Make sure you're subscribed to the YouTube channel as well. Give this video a like, I would really appreciate that. Hey, go through and give all the videos a like, share them with friends, with family, with enemies, you know, whoever. I don't care as long as it's getting shared. That's. That's what I care about. Spread the good word about what we're doing here because I really just want to help people. That's where what it comes down to, that's what the show is all about. And so I, if you could help me spread the word about it, I would really love that. All right, so we're going to talk about fees, about minimizing fees. We're going to talk about income. We're going to have a little bit more talk about those guarantees, about maybe getting some guaranteed income in your retirement years. The idea of a personal pension we'll go through in detail as well next time around. And here's the thing, you don't have to solve this alone if you're feeling unsure about your retirement. If you say there's so much uncertainty in the world right now. I don't know what in the world is going on and I certainly don't know how my portfolio, my retirement savings, whatever the case may be, is going to react to whatever happens, right? You don't know. You don't have that. You don't have a crystal ball. Mine is broken, has been for a long time.
So my plea to you is to reach out and get a plan. Because you don't have to solve this alone, you don't have to get rid of that uncertainty alone, and you don't have to guess at what's going to happen. We can actually give you a plan that's going to map out, here's that strong foundation and then everything else can be the cherry on top for you and your retirement. So you can have a retirement you can take pride in.
You know, it's kind of the name of the show after all. Well, that's going to do it for this time around here on Take Pride in Retirement. Tune in for part two of this same discussion to be later on in the week. So I really do hope that you'll join for that on YouTube and on the podcast. Thanks so much for being a part of things. As always and until next time, take pride in yourselves and take care of each other. We'll see you then.
[00:22:47] Speaker B: Thanks for listening. To Take Pride in Retirement Members of the LGBTQ community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call 855-246-9211 or go online to Take Pride in Retirement investment advisory services offered through Brookstone Capital Management, llc. Bcm. A registered investment advisor, BCM and Active Wealth Management, Inc. Are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Matt McClure and active wealth Management are not affiliated with or endorsed by the Social Security Administration or any other government agency.
[00:23:33] Speaker A: Registered investment advisors and Investment Advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure the ADV2A item 4 for additional information. Any comments regarding safe and secure investments and guaranteed income streams Refer only to fixed insurance products. They do not in any way refer to investment advisory products, rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company, not guaranteed by any bank or the fdic. Information provided is not intended as tax.
[00:24:08] Speaker C: Or legal advice and should not be relied on as such. You are encouraged to seek tax or.
[00:24:12] Speaker A: Legal advice from an individual, dependent, professional.
