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Taxes in Retirement

Isaiah 11:1-3 says the seven anointings of the Holy Spirit are wisdom, understanding, council, might, knowledge, fear of the Lord, delight in the fear of the Lord. Robbie believes Hans reflects these virtues through his dedication to advising his clients well by staying up-to-date on the retirement industry and adhering to Christian standards. This week, Hans and Robbie want to keep listeners up-to-date with the SECURE Act and how it will change taxes in retirement.

 

Before continuing, Hans asks listeners to take a moment and pray for Tom Griffith, one of Cardinal’s advisors and a regular guest on the show. Tom’s in the hospital this week treating a relapsing health issue. Cardinal appreciates all thoughts and prayers on behalf of Tom and his family.

 

The SECURE Act has passed the House and is currently stalled in the Senate. Hans suspects it will pass and the President will sign it this fall. The SECURE Act simplifies retirement planning particularly for people planning on working past the retirement age and moves the minimum distribution age up. It changes how inherited IRAs are withdrawn from and limits stretching to 10 years. This change is not necessarily good or bad, the goal is to plan around it so the change isn’t detrimental to you or your estate.

 

Another act being discussed is the Social Security 2100 Act. Hans says that he thinks there’s less of a chance it will pass, but will monitor this and all new acts that could implicate retirement changes and will factor them into planning.

 

Next, Hans says there’s a new tax law that changes the standard deduction to about $26,000 for married couples and $14,000 for individuals. For people in retirement, this might affect how you think about your mortgage. House interest won’t be deductible because of the $26,000 or $14,000 that qualifies for deductible anyways, so it’s smart to pay off your mortgage and own your house to get that extra income.

 

Hans will wait until 70 to start his Social Security to make his check as big as possible and his goal is to pay zero taxes on it. He wants to have other income beside Social Security that’s tax-free as well. You can have additional income up to $27,000 tax-free. Income beyond that includes a small tax rate. By converting your IRA to a Roth, you can withdraw additional tax-free money to supplement your income. Hans plans to leave his Roth to his kids and will keep a small fund in his traditional IRA to leave a qualified charitable distribution to his church.

 

However, if you still have a large source of retirement income (i.e. you own a business) then you’re going to pay taxes. Effective planning is about figuring out how to implement what you want financially and protecting you from what you don’t want in the context of your situation. Hans emphasizes that this is why taxes are the seventh and final worry he talks about in his book. Taxes are on his mind from the beginning but he doesn’t want to mislead clients that they’re the “end-all-be-all” or unintentionally encourage bad investments such as tax sheltering.

Robby says God commands rest because your life is under His control and it will work out for your good. That’s why God places people like Hans in areas of expertise. Robbie wants listeners to know that Hans won’t chase you down because he’s busy studying the market and meeting his client’s needs. Hans is happy to help if you would like his service or direct you to another advisor who also knowledgeable and will put your needs first.

 

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on CardinalGuide.com for free!

 

You can contact Hans and Cardinal by emailing hans@cardinalguide.com or calling 919-535-8261. Learn more at CardinalGuide.com. 

 

Finishing Well
Finishing Wellhttps://www.cardinalguide.com/finishing-well/
Retirement planning involves a lot more than just managing your money. This show is the complete guide to planning for and living in retirement, helping families finish well. Host Hans Scheil will discuss a new topic every week ranging from Social Security and Medicare to IRAs and taxes. Follow along each week by downloading the corresponding chapters below for free! New episodes air: Finishing Well Schedule on Truth Network
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