Quick Preview:
Our Cornerstone Retirement Blueprint Process is focused around 5 key pillars of retirement planning designed to help our clients achieve the retirement they have always dreamed of. This episode is all about taxes and how we work with clients to reduce their tax liabilities in retirement.
On This Episode:
You won’t find a lot of people that enjoy thinking about and discussing taxes, but this is a key part of the retirement planning process when you’re trying to maximize what you’ve been able to accumulate.
So as we move through the five key pillars that Cornerstone Wealth Management uses for planning, it’s time to talk about No. 3: tax planning. To help us with this topic, Anthony Napolitano, a partner and investment advisor on our team, joins Jammie Avila on the show.
Tax planning might be as important now as it’s been in some time for a couple different reasons. First, we continue to see the national debt soar and that’s only getting worse with the huge stimulus package that was passed in 2020.
We’ll look at pillar from a number of different perspectives but let’s begin with a mistake many people make. There’s a common assumption that your taxes will decrease in retirement but that is rarely true. Not only do you lose a lot of your deductions, but your tax rate might not decrease and there’s a great chances taxes could increase in the future.
Then we’ll provide you with a couple ways we strategize with clients to limit their liability, such as taking advantage of the internal revenue code by diversifying your holdings.
Another way Cornerstone helps you is by creating a customized tax map for every client using software. This allows you to come up with a plan and see how different decisions will impact your tax obligations.
And finally, we’ll spend some time on Roth conversions, which has become a very popular strategy for clients in recent years. That’s especially true in 2020 with the passage of the SECURE Act and we’ll tell you why on the show.
We have to plan for the different tax things that we’re going to be doing for our clients. It’s something that we have to be forward-looking. And so I think that’s one of the things we get most complimented on.
Timestamps:
1:11 – The difference between tax filing and tax planning.
2:32 – We have to be forward-looking when it comes to taxes.
5:23 – Most people believe their taxes are going to be lower in taxes.
6:58 – Why do we have this as a pillar in our planning?
8:33 – We’re assessing the taxable nature of your current holdings.
9:10 – What are some of the strategies we can use to decrease taxes?
10:17 – An example of how you would adjust your portfolio.
12:39 – Tax planning is a key way we show our worth.
13:03 – Why a lot of clients are considering Roth conversions.
14:49 – The SECURE Act has a big impact.
17:15 – What tools do we use to make sure we’re doing what’s best for the client?
19:02 – Anthony shares an example of how he helps clients with tax planning.
