What Can We Learn From Stars and Back Up Singers

Financial Symphony
Saturday, January 13th

Answers to listener questions and when should you convert to a Roth IRA

00:44:04

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

No financial center committed. To. Helping you. Harmonious financial plan and getting your portfolio in two weeks so sit back while always strike up the the financial simple it's starts now. Fletcher joining us this week on the financial symphony I'm Walter strolled alongside you or local financial Mike true right here in the Charlotte metro area he is of course Richard future rally. Investment advisor at Carolina retirement resources with offices in hunter's bill. And in Rock Hill as well you can reach out to Richard at any point in time by calling 800. 6465996. If he'd like to submit a question to be featured on the show you can go to financial symphony dot com to do that and our first one of the week Richard. Comes to us from mark in Cornelius and mark says. I'm wondering whether I'm prepared for retirement or not I've read that there are many different approaches on how best to manage my savings and retirement. What do you think is the best approach we know mark. And most of these state money for retirement in the hope. Of eventually converting those dollars saved into a retirement income stream that will hopefully last a lifetime. You know in the past many people relied on pensions from their employers. That provided much of the income they needed but today that's not an option for most people also you know one of the most common ways. That I see that many of you save for retirement and then convert those dollars under retirement income used to use a mix. Of financial vehicles like stocks and bonds your ideal mix or allocation. So the ratio stocks and bonds your portfolio depends on. A number of factors such as your tolerance for risk. Are your time horizon and your income needs in retirement. And other specific financial goals say needs that you may have. It over unfortunately given today's volatile stock market you know coupled with the historically low rates of interest on fixed income vehicles such as bonds. You know it's been difficult for many retirees to generate income they need using the strategy. In addition because of longer life expectancies. You know the risk of one out of money is increased dramatically. You know another approach that people take this with respect to our generating income is a message that that is referred to as the 4% rule. The idea being that you could comfortably Rick Roth 4% of your retirement savings each year. Then adjust that for inflation and continue to do so for approximately thirty years. Now this strategy assumed. A certain amount of income from your statements. While at the same time assume in a certain amount of growth from new assets that are left behind but. If real return to work to decline as they have the success rate of the 4% rules and dropped dramatically. But there is another option it's an insurance option you know that option is an annuity Mike Hsu in the lifetime income option you can be assured. Then you'll have that reliable income for the remainder of your life term regardless of how long that maybe. And you can choose a joint likely come option which we don't provide income for your spouse over her life expectancy as well. And it doesn't matter what the market does where there goes up or down or your children received a check month after month after month. As an alternative to relying on stocks and bonds or the 4% rule you know many retirees marker including a new visas are part of the world grounded income plan. A new he's eliminate the risk of core investment performance. And they also eliminate the risk of Livan too long to mark I favor. Taken a balanced approach for managing your savings and retirement one sure energy for income and another strategy for growth. Yeah very good question though marking glad you're thinking about things in this way but people are doing the proper planning for retirement but it looks like you. Are taking the right steps to find out what's the best approach for you to prepare for retirement again if you'd like to reach out to Richard future rally in his team. And Carolina retirement resources you can do that by calling 800. 6465996. Again that's 800. 64659. 96. Answering your questions on who we like to call the request line here on the financial symphony in the next when comes to us from bill in Charlotte. Bill says I'm retiring soon and worried that I don't have enough money is saved for retirement is there anything I can do to ease my concerns. Well you can always save more if listen this is not very uncommon not concerned. The share of work in households that would not have enough money to maintain their pre retirement standard of living it's increased dramatically. It's even more shocking when you add in the need for a retirement health care expenditures. As reassure shows that though the percentage of retirees and able to maintain their standard and Livan could increase another 15%. And what they're comes now accuses you really means that there you have it almost 67% chance about living your money and retirement. But you know it doesn't have to happen do you you can make sure you never run out of money in retirement simply by allocating a portion of your retirement savings. To a fixed index annuity. Which can guarantee an income for life. Even if you live to our cash you know the interest credited to fixed index annuity is partially determined by the upsides of market index. But when the market turns down as it eventually does. You know your premium and any interest credit in previous years won't suffer because of the knicks have a negative here. It almost recently we've seen a few years of growth in the market. But what you gonna do no actually no I don't think anybody really knows what's gonna happen but there is some trepidation out there or hear this on a regular basis from individuals. Who are concerned about a no market crash like 2008. You know I. How would you feel if you're retired today. And you lost 20% of your money has many didn't 2002. Or 3740%. Of the money that they lost in 2008. You know fixed index annuities are the evolution of traditional fixed annuity in that they both have a guaranteed minimum interest rate and tax per can elation. In addition of the index annuities adds an interest credit in method. Which credits interest to your account when the index to which you're doing is linked does well. While at the same time it's safeguard your principal from index declines you know the insurance companies taken on all the investment risk in this situation. And they guarantee that your principal as well as you curse that was credited preview shears. Is protected from market downturns so while you can't create. Your own employee pension plan. The good news is is that there are vehicles available that can be used for generating the similar guaranteed lifetime income in retirement. And that vehicle is a fixed index annuity but listen not all fixed index annuities or life. Therefore it's important to choose the one that will fit your specific circumstances. You're means annual goals. That way you can match up this fixed and Nixon knew that fits into. Your overall retirement income home another great question here on the request line thank you bill for submitting that when yet. You're not alone a lot of people are trying to ease their concerns about Al living. Their retirement savings luckily for us there's a lot of strategies out there that can help you reach the finish line. And even look beyond if you would like to talk about those strategies and how Richard culturally and his team here in Charlotte metro area can help you. The number to dial is 806465996. That's a 10646. 5996. And he can request a review. I've your financial plan Mary in Concord as our last question of the day and says I met with a financial advisor and she suggested I purchase an annuity. But there seems to be a lot of negativity on the Internet concerning annuities and I'm concerned she could be staring me. In the wrong direction what are your thoughts and is an annuity a good product for a retiring richer this kind of dovetails right off what you're just talking about. You know what many people don't realize about a new he's married he's is that they're not a single product. In fact there are many types of annuities and each has a different function and purpose. Some annuities pay you an income right away while others deferred pay elsewhere your money accumulates. Some deferred annuities to clear guarantee interest rate on your money wallet grows. Others can participate in a returns a market index incredibly interest based partly on how that in their performs. You know but the most important quality. Four and annuity is an annuities offer guaranteed income for life. They guaranteed lifetime income generated by new tees it's the main reason why salesman duties in recent years are on the rocks. You know annuities provide a solution. In a time when company pension plans have become less common. In fact a recent press release by the US treasury recognized deferred income annuities. As an important option to protect against longevity risk that's the risk of outlive your savings and retirement. You know senior advisor to the secretary of treasury and deputy assistant secretary tougher retirement health policy said. That has boomers approach retirement. And life expectancies increase. Income annuities can be an important point to first secure retirement. He continued ensure that all Americans deserve security in their later years and need effective tools to make the most of their hard earned savings. You know in their ongoing effort to increase retirement income options. The treasury is now given special tax status to certain longevity annuities that any call. He also has the economic environment changes retirement income options involved so it's important to examine all your options carefully and decide how best to address your longevity risk you know annuities can provide principal protection from market downturns. They give you contractual guarantees an income for life. If you're concerned about about living your money. You might wanna consider pass and that longevity risk off to an insurance company by using an annuity can generate income throughout your retirement years. A portion of your money earmarked for retirement can be used to endow a contract that will generate a predictable monthly income for their. Your life. You know Walt Social Security it was never designed to be the sole source of income retirees. And when you look at the numbers you know today is the security represents about 38%. Of a typical retirees and come. But you know you're living longer your longevity often roads other short sued incumbent norm making it tougher for you make ends meet as you age. You know this challenge. Isn't unique to any one individual it's a challenge that we all face but he increases your risk of remember money in retirement and contribute you become independent. Social Security your main source of income. You know with more than 101000 baby boomers retiring daily this issue must be addressed. And you know this is why I'm so very passionate about ensuring that you well prepared. Come offer Copley Marriott financial review and anyone who called the next fifteen minutes and has at least 200000 more safe retirement. I'll talk about your retirement income needs. Wear an ankle won't come from how he'll outpace inflation. Pay as little as possible taxes and make sure that you don't outlive your money. Now you might say I don't really have to call in the next fifteen minutes and yes it's true you could probably take care of it next week or even take care of next month. But here's the deal. Having coaching people on retirement plans for a long time. And I've learned that it's easy to procrastinate or get distracted. So if you don't start the process now there's a very good chance you're not gonna do it at all so the first coach and then I'm gonna get used to encourage you take that first step right now. For almost everybody that's the hardest part from there it's not a painful process so you're ready to finally get a plan in place go and give us a call right now. And here's that number to dial to reach Richard future rally and take advantage of that complementary review. Of your financial plan 806465996. Easier number to call again that's 800. 64659. Nine at six if you're here in the Charlotte metro area and thinking about your financial future about retirement the things that you can improve that you can do better. Down the line will Richard can help you uncover maybe some of the problems that exist in your portfolio and had to correct some how to fix them. Going forward Richard we'll take a close look at what's going on inside that portfolio and make recommendations on what changes you might want to make. 806465996. Is your number to call that's 8064659. 96 the open to directly in touch with Richard and allow you to. So at that time to meet for a review of your financial plan if you wanna get to handle all the way through retirement this is a great opportunity for you today. 806465996. Vision number to call it that's 806465996. Thanks so much for tuning into the financial symphony today there is more on the way we'll talk about Roth conversions and much more straight ahead on the financial symphony. It's time for another musical connections where we blend the worlds of music can finance together. Here's friend of the show and financial advisor and musician mark Lloyd withdrawn stunts. Back now and another musical connection with mark Lloyd and mark careless talk about backup singers. Okay how do we know any. Yeah you know if you. Or some artists that had great backup singers how the supremes stopped before they became Diana Ross and supremes and the supreme junior here that three part harmony there were also good. Mary Wilson in Florence Ballard and they're. But another example is like The Rolling Stones. The ever heard the song. Gimme shelter well yeah it's got a great backup singer and it was Mary Clayton when that song was recorded in the studio is just took him easing back up singer I'll give you want the human I don't know okay. Michael Jackson's backed up. Seeing her. Sheryl Crow yeah yay you did know. Sheryl Crow we used to be a backup singer for Michael Jackson yet before she became a star that they did there was a documentary out there that says some about twenty feet. And what they're talking about is in great backup singers of all time. Didn't order become a star it's twenty feet forward to get to the end of the state to become a store that is the hardest twenty feet you'll ever walk twenty feet from storms when it's called dark thank you ought to remember that name up but that's really good but it's awesome. How can you make some kind of a musical connection from all mark was really easy. You lead investor the retiree if you're already retired or the pre retiree if you're getting ready to retire. Are the front made and you walk us the war. Now what you need though is you got to make sure that you've got the right kind of team the right people backing you up. Because you can't carried on your own so here are some examples. We talk about not going to see just an insurance only person in and cholesterol retirement on insurance only people. But insurance is part of retirement. You gotta make sure you have the adequate amount of life insurance and I'll tell you what something that gets overlooked some time do we put our heads in the sand without health care. We got to make sure health care covered so does that that that paid for by insurance. Expect to treat thinking about long term care or is there are some kind of strategy inside of your income plan. To increase your income so you can private pay your own long term care and not have to worry about buying insurance or do you look at other ways to fix that problem but insurance professionals. Are needed in your overall strategy you've got to make sure you have the right investment professionals I mean that's what we'd do. I mean where were holistic we do all of that EL one thing is he still have to invest money in retirement. There's still needs to be a certain amount of risk. That's manageable. You still need to be focusing on diversification. You need to be focusing on when things are changing into our round view in the financial world that your portfolio is changing wind that. You need to make sure also that you've got income coming in so you need to have and in come play again and last but not least when something happens to you don't you wanna see it move that that pass on to your family. With a minimal amount a headache. And most importantly the minimal amount of taxes. And it's that we might need estate planning attorney at the end of the day for all that and at one good thing about the all working with us. Asked financial professionals as of financial my stroh's is that we have relationship with the all these people. If you don't already have those relationships already made weakened. Point you in the right direction if you have a CPA the love ordered a state attorney that you aborted work with. We can work hand in hand with them to make sure almost like going to the doctor that all the doctors are all on the same page for your health it how much your financial help make sure were all on the same page. Now Ron I want to let the people know how to get in touch with us to learn how to set up a complementary review. To make sure that all these bases are covered. Disfigured the following call 806465996. That's 806465996. Can get a complimentary review of your financial plan. Just call now to take advantage 806465996. Strap him. Well it's time for in the news this is the part of the financial center literally take a look at may be a recent event that has happened in the Arkansas in the financial landscape may be a recent article. And one economics magazine recently Richard ran an article titled. Ten reasons the stock market will have a good. 2018. Now the very same day in a business news website ran an article about the impending market crash of 2018. So as our financial. Guru here on the show who which isn't. Well I don't know I mean I don't think anyone knows if fact if you were to ask a dozen experts if the stock market will plunge. You'll likely get a dozen different answers so listen no one knows I mean what we do know is that the stock market will go up he will go down and they'll go flat. Now keep in mind that if you want to get higher returns. You know stocks can deliver. But it's important to understand that there is no way to avoid the risk of laws so. You can limit your losses but avoid them entirely is impossible so the key is to simply be prepared you know certainly. There are numerous indicators on how the market may perform in the short term. But the bottom line is that indicators of predictions of any economic conditions are their best educated guesses. And that delicate balance of the US in the world economies today. I mean you know I think some small event you know like maybe a missile. Being fired and explode and I mean actually upset almost overnight. The dynamics that exist today I mean these unfortunate events they can occur and if you're not. Prepared. And that's a problem so should she can't accurately predict what's gonna happen you need to prepare for both good and bad economic conditions. And the question is is how do you prepare well give me a call I'll provide you with a comprehensive financial review. And I'll share with you some risk management strategies that are designed to limit losses in the severe market downturn. And again this is that number to call to reach Richard future Elliott's 806465996. And again that's 80646. 5996. That's what's happening in the news and this is the financial symphony with Richard picturesque. Wherever you go there yeah. Following lurking stinking alone continuously nibbling away your hard work. Yeah me. And I are. Don't be afraid of hidden fees in your portfolio. Come in to meet with their financial maestro for review of all the fees in your current plan. Let me see if we can eliminate those pesky. Didn't see. I'm. Come visit with your financial maestro and Richardson to LE sipping the Charlotte metro area. Call 806 point 65996. 806465996. I know it's only rock and roll. And retirement but I like it they saved for the financial d'antoni. This is the financial symphony Walters told here with the alongside Richard. Programming he has an investment advisor at Carolina retirement resources serving you in the Charlotte metro area there's a soldier earlier. Scott convenient office locations in hunter's bill and in Iraq hill as well as he'd like to come in and have a conversation about your financial plan. It's easy to set that up just dial 800. 6465996. Again that's 806465996. Richard I teased a little earlier we're gonna talk about Roth conversions and what's interesting is that the idea of a Roth conversion. Is intriguing to a lot of people and for some people can be a great strategy. To enact others haven't really heard much about the concept so let's start with the basics explain what a Roth conversion is and why it might be worth considering. But I know simply put a raw fiery conversion is the process of transferring your money from a traditional higher rate or your 401K. Into Iraq firing. Conversions into Iran firing from a traditional wire race or borrowing K you know this came to the forefront. In 2010 and due to a change in the tax law you know before 2000 and that tax loss stated that to complete conversion into Iraq fiery. He had to have been adjusted gross income of 100000 dollars or less so with that threshold repealed. Anyone could choose to convert tax for murder count to a tax free account. And the reason you might want to I consider Iraq conversion is simply to achieve a zero tax bracket in retirement you know realistically. But certainly no spending cuts not tax rates will eventually have to rise dramatically. For the government can meet its unfunded liabilities so how high can taxes go well your guess is as good as mine but. The former comptroller general of the Government Accountability Office David Walker. He said that based on the cut trees fiscal path future tax rates would have to double now he said that almost seven years ago and since then our fiscal house is in worse shape now than it is. There was in January 2011 so you know right now taxes are low compared to historical rates. The tax code includes several tax strategies you can use to create tax free retirement. But QB take advantage of them so in my opinion now's the time to convert as there will likely never be a more cost effective time to leverage your current assets. Into tax free assets so. If you should decide to move your tax deferred funds to a tax free environment he reduced the impact of future tax hikes. On your retirement savings. In my opinion again taxes will have to rise and tax deferred accounts of those accounts that you haven't paid taxes on yet. Are the low hanging fruit waiting to be picked by a local fan so the only way to protect yourself from the potential impact of rising taxes. Is to adopt a strategy that which you and is your per cent tax bracket in retirement besides tax free is always better I love it and people love it as well. Richard I've heard it said before is that Sanath I don't know the reasons why don't hoping you'll be able to shed some light on this event. High income earners especially might see a Roth conversion as helpful why would that be the case. Well you know most. I income murderers Alter you know they have tax challenges and and they want someone to find ways to lower their income taxes. You know qualifier razor tax free accounts so that should make four perfect marriage no unfortunately. I find that high income earners are reluctant about doing Roth conversions but when it comes to Roth conversions. You have to remember there are no income limitations as there are with Ra Feyerick contributions. But conversions trigger an upfront tax bill. And high income earners find it particularly difficult to write large checks for the IRS many years before it's necessary even so. Paying tax now on today's balance may be preferable to pain future tax. On a much larger shown year after year when distributions are required an age seventy and a half. Nobody paying your taxes today. He could take advantage of those low historically low tax rates while they're still around and if you have plenty of deductions or investment losses. You know these events could help offset the taxes or if you have access to tax free dollars such as your home equity or maybe a large taxable account. You could consider using those funds to pay those taxes. Regardless if you're at the apex of your earning years you likely have plenty of surplus capital with which to pay those taxes. And you know many high income earners are high net worth individuals with gift and estate tax concerns. You know for these clients Roth fiery conversions can offer additional benefits and in some research I recently reviews indicates that high income. Taxpayers. They tend to have. High income offspring if a high bracket beneficiary. Must take traditional IRA withdrawals when they inherit those accounts. They'll host keep taxes and inherited Roth diary on the other hand can deliver tax free legacy without trigger and any gift tax. You know I like to think of rock hiring conversions. As tax insurance you know high income murder probably hold life insurance. A disability insurance property insurance liability insurance all these different insurance is that they have to protect themselves. You know in the tax paid. Or the taxes that you pay. On a Roth conversion can be likened to the premium paid for that tax insurance or with a Roth IRA. Remember you'll no longer have to worry about the uncertainty of future tax refund your retirement income. So you're retired especially if you're younger than seven and a half and you do not need the income from your higher res. He should consider convert them portion of your taxed for higher rate to a tax free. Roth a higher rate sure you have to pay the tax to get the money into the rough wiry but even if you converted 5% 10% of your counsel on an annual basis. You know in just five years you can potentially have 25 to 50% of your retirement assets. In a tax free rock diary for the rest of your life. And the lodge your beneficiaries. So pay the tax now and then reaped the rewards forever. He's seen it all boils down to the fact that all the pieces of your financial puzzle need to fit together so I'd like to offer you an opportunity comes for complete financial review and will offer just review for free to all listeners who have at least 200000 dollars saved for retirement. Are talking to all these different puzzle pieces. That you should consider you know for instance is a Roth conversion of beneficial strategy for your unique circumstances. And is there a way to save money in taxes down route but plan and proactively today. Here's how much risk are you taken in your portfolio. And is that amount of risk appropriate for your age and for the amount of return which are actually getting. You have an income plan in place to be short but you aren't in danger of run out of money if you end up living thirty more years in retirement. Do you have a plan to address inflation in future decades as the cost of everything continues to rock. Obviously there's a lot that we need to discuss and we found that most people just have a plan to early enough to address these issues. Again this review is complementary to anyone who has at least 200000 dollars saved for retirement. But the calendar does fill up quickly so go ahead and give us a call right now for the you can be sure to get a spot reserved for you. This is the number to dial to reach Richard who drilling and take advantage of that complimentary. Financial review 806465996. Again that's 8064659. 96 Richard is an investment advisory Carolina retirement resources serving you throughout the Charlotte metro area. Offices and hundreds fill another in Iraq he'll also there's a convenient spot to come in say hello and have a talk. About your financial plan and that's what it is it's a problem solving mission to seat. Anywhere some of the pain points with your financial plan and how Richard might be able to help alleviate those pain points with. Solutions and strategies that are a good fit to yield. No plan is alike it's customized to your individual needs goals and wants in retirement. And Richard can help you put that plan together but yes we do when this starts the conversation again that number to call is 80646. 5996. Just Collins say that you'd like to have a conversation about your financial plan he'd like to set up time to meet for that complementary review. 806465996. Again that's 80646. 59. 96 this is the time of the year where you're thinking about your finances. Planning for the future so make sure that you're making the right choices and do it with an advisor on your side who can help guide the way. Call 806465996. That's 806465996. You're listening to the financial symphony with Richard future rally and coming up. We'll continue talking about Roth conversions and everything that you need to know about that strategy. In retirement that's coming up on the financial symphony statement. Wherever you go there yeah. Filing lurking stinking alone continuously nibbling away your hard work and the. Yeah okay. A don't be afraid of hidden fees in your portfolio. Come in to meet with their financial maestro for review of all the fees in your current plan. Let me see if we can eliminate those pesky. Okay. I'm. Come visit with your financial my strength Richard Richard only serving to Charlotte metro area. Call 806 point 65996806465996. It's time for a fireside chats as we get to know you're a local. Financial symphony maestro. This part of the show we call getting to know use where I kind of ask Richard random question each week trying get to know his personality a little bit better and Richard here's a good question for you kind of a different when I think this week. If you could have a video. A memory you know video they could just you know pop in the dvd player I guess in today's world just you know digital file pull up on the computer. Of any event in your life for which you don't already have video of what event would you choose. You know I choose my way and we didn't have video or when an interest and there would be nice if we had come that we have pictures that we don't have video side I would say. I haven't video of our our way and. You know the the compromise there would be you can get a video made. Like a slide show with all of your pictures to stand little deflator was some music in the background you get one of those next again. That's my view and it's not the same thing as actually having footage of like the ceremony and stuff that. I know that my AM my wife so we do have some footage of our wedding. But the thing that my wife loves the most is watching the video that actually one of the other posts that you hear on the financial symphony mark. Who host the show with you sometimes Richard. That he put together for us it's all of our pictures and they are our first dance as you know song and mixed it into the background put together this great slide show for us now. Maybe Henri maybe you can send in Samir pictures we can have a good one of those together for a while don't suggest admiral Perry and they get past that responsibility unturned she will travel component. Awesome well thanks Sharon that dad is a logical choice sir and I think scores you some brownie points in the process as well that's getting to know Richard picture LE a little bit better here on the financial symphony there is a more on the way into. Much like the musicians nineteen U trustees of their instruments were analyzing the acoustics of early in the for a performance. Your financial maestro nineteen to a financial planed to adapt to the ever changing financial world. Don't settle for an advisor who offers a sales pitch and also a plane and make sure you did all the right notes in your financial plan. Come visit with your financial maestro of Richard Richard Elliott and setting the Charlotte metro area and call 806465996. 806465996. The financial symphony is reaching its crescendo. Your local financial maestro and coming up next. Thanks for joining us on the financial symphony today if you find the show helpful and were trying to pin down the right path not only to retire. Indeed make the right financial choices throughout the process richer picture alias here. To help dynasties and investment advisor with Carolina retirement resources serving the Charlotte area with an office and hunter's bill another one in Rock Hill. In case here in that neck of the woods the number to call if you have questions about your financial plan to 800. 6465996. Though which are directly in touch with Richard. 806465996. We've been talking about today show about Roth. IRA conversions what are they. Why do them in a Richard won the east take place I guess especially if people are gonna try and do these types of convergence on their own. Are there common mistakes that you see folks make when they go through these steps. When you know you certainly don't want to approach a Roth conversion haphazardly. You know it's best to take the time to get a comprehensive review of your financial situation. And look at all your options you know. First you want to be aware that if you do Roth conversion before you're 59 and a half he'll have to wait five years. Or kill 59 and a half whichever comes first. Before you can touch the principle without tax and penalty. If you're already 59 and a half when you make it conversion you can touched a principal immediately. But you must wait five years before you touch any of their earnings without penalty kill one mistake I see frequently. Is is that those of you over seven and a half you forget to take your required minimum distribution prior to the conversion. Which could result in a 50% penalty if you're at least seven and a half you wanna take your required minimum distribution first and then convert the balance to a Roth you know you cannot convert your required minimum distribution to a Roth diary. If you have converted your arm deed to a Roth IRA you now have an access contribution in Iraq hire ray. And you'll have until October 15 of the following year to tell your raw tiring custodians you need to remove funds as an access contribution. Another mistake walker has happened taxes withheld on the conversion to reason you don't want to withhold taxes. Is that if you should have to re characterize conversion you know situation develops. And you wanna just go backwards you wanna go from the rock fiery back to your higher rate that's called they re characterization. And you know you won't be able to re characterize those taxes that were withheld. Because there are no longer at the custodians but with the IRS if you should convert you should be able to pay the taxes with other funds not take them from the conversion distribution. And finally. The biggest mistake a ball is not happen Roth. You know you're never too old to do conversion and you're never too young star contributor and either to a Roth IRA or to an employer Roth account. Well Richard you know I always like it kind of out Prague nasty for a example on these different topics that we get into each week here. On the program so how about an example somebody that would really benefit. From a Roth conversion. You know I think everybody would benefit from a Roth conversion or Ceres a Roth conversions. If there at least 59 and half you know everyone's situation is unique. And if follows then that there can be no (%expletive) rule that applies at all. You know whether or not you should convert how much to convert when to do show here that needs to be evaluated consider in the circumstances of your unique situation. Yeah you just wanna be careful not to convert too much too soon. Because it could vault you into a higher tax bracket fortune you pay more taxes than intended on the other hand if you convert your artery to a Roth. Too slowly. I mean there's always a possibility that taxes to rise. And you know you'd you don't get it done all conversions requires strategy that will allow you convert the right amount. At the right time while paying as little taxes possible now for myself. By 2010 when they get away with a 100000 dollar income limitation I convert everything I had I just decided that the best solution for me was to go ahead and borrow the money you know you can borrow money if you have equity in your home home home equity line of credit. That's tax free dollars and just paid taxes off now took recession that appears close to seven years of breakeven but now all of those accounts are country. That's a good example something that I think is very helpful to here will win hate this might be a good fit for me York. This is something that I might consider it's good to know that there are other kind of locking. This same path how about an example he said that almost everybody would probably benefit from Roth conversion but. There's always exceptions to the rule can you think of an example who shouldn't do a Roth conversion is there a time when it doesn't accepts. Well let's say your age fifty and you have 500000 dollars in your traditional hiring but also say your screen really anxious to convert this irate to a Roth before income taxes rock so you decide to convert all 500000 dollars and one year and let's assume your tax rate. On the conversion is 40%. Now you oh the RS 200000 dollars. Well that presents a bit of the problem not only do you have to work out Mahler just Arnold now that you would love to send the IRS will probably not. And some might suggest. And you paid it 200000 dollar tacked over right out of your hiring itself. Well he did so you do Kurt 10% penalty for early were crawl. And that would be a 20000 dollar mistake. So unless you have a lot of money sitting in your taxable account earmarked for tax is you'll likely want to postponed the conversion until you're at least 59 and a half and you don't need to convert all of your higher rate to a Roth as it's still and then cages. To leave some money in your tax per account since you'll still have your standard deduction and your personal exemptions into retirement. This will help offset any distributions coming out of your tax deferred account. So you shift all of your tax deferred money to a tax free account. You won't be able to utilize your standard deductions and your personal exemptions that means you may have needlessly pay tax to reposition your assets. It's preferable to cover higher rebounds large enough for the U require minimum distributions at 87 and a half or equal to your standard deductions from your personal exemptions. Paying taxes on hiring before the Irish requires you pay them. You know it's somewhat of a leap of faith for most of you. It just seems counterintuitive. You know why not postpone the payment of those taxes until the Irish fortune you pay them later in life you know it makes sense but is that what is best for you in the long run. In order to read good mathematical reasons for paying taxes today first. We haven't had tax rates to slow in many years. And we know what tax rates are today and we don't know what tax rates will be in the future second if you're still working I have quite a few deductions left your itemized deductions makes you substantially higher than your standard deduction and personal exemptions. Meaning and he'll have an opportunity to offset a lot of whose taxes. And finally if you utilize a 72 T you can spend a distributed money anywhere you want. This gives you the option of paying the taxes on the distribution out of the distribution itself. This is especially helpful for those who are younger than 59 and a half. Remember paying taxes is not the end of the world what is the end of the world is finding yourself in retirement would no deductions. I'm paying taxes at double today's race. When you can least afford to do so to give me call the next fifteen minutes and are custom designed for you and easy to understand financial review that will indicate if you're in need of a full blown financial plan. There's no obligation or cost for this initial review to all callers who have at least 200000 dollars saved for retirement so if you meet those qualifications here's what you can expect first I'll run a Morningstar analysis and comparison report. To help you untangle what it's cost you work with your current planner advisor as well as how your portfolio may perform Dora from your market downturn. We'll show you how to protect your assets and keep more of your money in your accounts. Max will perform tax analysis and show you how you could possibly read future taxes and accretion of cash flow. And finally we'll create customized lifetime income plan using proven strategies and techniques that could Turbo charger retirement income. In short. We'll take the guesswork out of financial planner for you so for all the collagen Colin next fifteen minutes Walter Amare foreigner comprehensive financial review. And that offers being made with no obligation. And here's the number to call or reach Richard future LE 806465996. That's 80646. 5996. Poll free call will get you on the calendar to have a conversation about your financial plan here in the near future. But you've got to make the right choices now I mean if you're approaching retirement or even recently retired you know the times no longer on your side to recover. From investing and saving mistakes so make the right choices now get an investment advisor on your side you can help you walked on the right path. To not only get to retirement but all the way through it as well. 806465996. Is your number to call to reach Richard that's 80646. 59. 96. You hear us each and every week here on the radio show talking about what it takes the put together the best financial plan possible. But in all sorts with you making the phone call and having a conversation. About your plan. Get that customized review of your finances and a plan in place for now and the future by calling 80646. 5996. Again if you call right now Richard can set up this review for you complementary no cost no obligation. 8064659961. Mortality that number 80646. 5996. Richard that's all the time that we have four on today show that is always greatly appreciate your assistance and they'll do it all again next week. Pretty good thank you Walter thank you that's Richard pitcher earlier local financial maestro rank here in the Charlotte metro area. One more time that number to call the region is 800. 64659. 96 thanks for tuning into the show we'll talk again next time right here on the financial center. Information is for illustrated purposes only. And does not constitute tax investment or legal advice. Always consult with a qualified investment legal or tax professional before taking any action investment advisory services offered through Brookstone capital management LL CBC him. A registered investment advisor BCM and Carolina retirement resources are independent of each other.
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