Income Taxes: CFP VS CPA in Retirement - YouTube

Today's lesson is about taxes in retirement

and looking forward to a retirement where you're not just paying a whole

bunch of taxes and you have more of your income that's available for you

to spend and enjoy and live off of. So what I want to talk about

is that most folks coming in to see us, their frame of reference is the CPA,

the tax return, the tax filing, their net check, that they get every two

weeks or twice a month from their work,

and they only see 55-60 cents on the dollar

and that goes on all year and then they file a tax return,

or a CPA does that for them, and they get a refund or they owe taxes

and they have tax deductions and that's all backwards looking,

it's very precise,I mean when when you have a CPA, when a CPA is doing my tax

return, they're very precise, and I want them to be precise

and a lot of folks really think perhaps that that's what we do and

we actually - I have a CPA, I'm a I'm a CFP or a Certified Financial

Planner, and really capable of doing my own tax

return but I have my own CPA that does my taxes for

me, so I don't want to dis any of this, this is

very important but it's also

backwards looking, it's already happened, and we're just calculating the tax we

owe, so what we're talking about today is what a

financial planner does, what a Certified Financial Planner, a CFP

does, when you're before retirement, at

retirement, or even in retirement, there's a lot of

folks blow right past 65 and they get retired and they don't do a

lot of this planning. We can help people that are 73 years old

a lot and and we can make 73 to 90

you know a whole lot better tax wise. What we're talking

about here is tax planning and that's really about the future,

like for somebody that's coming in today, we're planning out

income taxes from 2021 to 2030, just we don't generally like to get more

than 10 years out because every year you go out, the less

precise that it is, so where this is precise,

this is an element of guesswork, of projections, of

you know, like the current tax cuts and jobs act

that went in 2017 that lowered tax rates

substantially, it's going to sunset in 2025 if they, if congress, doesn't act to

change the law, tax rates in 2025 are going to go

back to what they were before the tax law, we don't know what

they're going to do, so this has an element of guesswork, but

just because it's not precise doesn't mean you don't do it,

because there's big rewards for planning this out properly

so tax rules change, they're going to change, they're

constantly changing and generally they put in grandfather

provisions for financial planning that you've

already done, but the tax rules and tax laws and tax

rates and deductions and all that kind of

stuff, that's going to change over time but we still can predict things

and try to get you a low tax or a tax-free retirement.

We have to monitor the progress and, obviously, if we put together a plan now

and then they change in 2024, well then we're going to sit down and we'll make

some adjustments then to try to make it the best that it can

possibly be. Now what we're doing in this is we're

looking at your whole financial picture, so if we're going to try to affect what

your taxes that you're paying in future years

we're going to implement some things for you or suggest you implement some things

like a Roth IRA conversion, okay, and so what that simply means is that

your regular IRA, that's before tax dollars, you've never

paid tax on that money and when you start drawing it out in

retirement to live off of it, you're going to pay income taxes so

there's an alternative to that where we could sit down now

and we could put together a Roth conversion strategy

so that you would pay the taxes on that now

maybe a little bit at a time, maybe we'd spread it over five years.

I just had a client in last week that said can I do this all at once, can I

take the whole IRA and convert it and I said yeah you can, I

don't really think you want to do that, at the very least we'd like to straddle

it over two years, do some in 2020 and some in 2021, it's going to be 2021

in just a few months, but so in this tax planning

we can actually plan out like what your income is going to be

and how much taxes you're going to pay on that and

a big factor in this whole thing is Social Security because Social Security

isn't taxed on its own, if all you got is Social Security, you're probably not

watching this video, but if you have Social Security

and all you have is Social Security, you're not going to pay any taxes, it's

tax-free, but the taxes on Social Security are

based upon the amount of other income that you have

in retirement so Roth IRA strategies

life insurance and a loan strategy of pulling the cash value out tax-free

are all ways that you can really make your retirement

low tax or no tax. So you know just today we wanted to make

the comparison of how this is different than this

and you really need both and it actually, this gets fairly easy in retirement,

if things are set up properly, is that filing your tax returns every year.

I'm Hans Scheil, I've written a couple of books on these

subjects, you can get those at our website

CardinalGuide.com. I thank you for listening.