How to Minimize Taxes & Fees in Your Retirement Accounts

Erick explains how he helps people see their “results in advance” when planning for their retirement. Plus, he highlights the importance of eliminating silent killers like taxes, fees and target date funds from your overall retirement plan.

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2.16.24: Audio automatically transcribed by Sonix

2.16.24: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
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.

Producer:
Welcome to Take Point on Retirement with your host, Erick Arnett. Erick is a fiduciary and licensed financial advisor who always places your needs first. The experienced team at Take Point Wealth Management takes pride in knowing they've helped so many pursue the financial future of their dreams, and they can help you, too. And now let's start the show. Here's Erick Arnett.

Erick Arnett:
So hey everybody, welcome back to take part on Retirement Radio. So glad to be with you. I'm your host, Erick Arnett, your investment advisor. And we also have Mister Sam Davis with us, with us today, our DJ extraordinaire and the man that keeps us on point. Sam, everybody loves to hear from you. I get comments all the time. Who's that Sam guy? And and, uh, so glad you're with us today. How you doing, man?

Producer:
Doing all right, man. Powering through a cold. I know everybody's got a bit of a virus or something going on this time of year, but we are pushing through. Thankfully, we live in a virtual remote world, which is fantastic for us recording the show. It's also great for you whenever you're meeting with clients. I know you're able to meet with people virtually no matter where they're located in the Sunshine State or across America. So happy to be here. We've got a lot of great information for people. Once again, this week's show is all about getting your retirement results in advance, planning in advance, and the power of planning. So stay tuned this week. There's a lot of good nuggets in here that can improve your retirement.

Erick Arnett:
You know? Awesome. Thanks, Sam. And yeah, you just mentioned something that I failed to sometimes mention on the show is that if you're listening to the show, no matter where you're at, we have multiple locations throughout the region and we're more than happy to come to you. But we do offer online virtual assistance. And that's pretty cool because, you know, you can sit right in your own home and you don't have to get all dressed up and and get in your car and fight all the traffic and and it and I tell you what, I understand. I'm, I'm feeling it. So I know my listeners are feeling it too. The traffic has drastically increased in the state of Florida. It's not as easy to get around as it once was. So, uh, you know, I used to cover much larger territories and drive around a lot and help folks out. And it's like, man, now, what? Used to take maybe 30 minutes. I'll take an hour to get somewhere because the traffic is so crazy. So, you know, sit right home in the comfort of your own home. Give us a shout at (352) 616-0511. You can you can be in your pajamas if you want. And, uh, we can help hold the meeting right over the zoom and help you virtually. So thank goodness for that technology that we're blessed with to be able to do that. And, you know, it's like I tell people all the time, even my existing clients, you know, if you want to get in the car and drive and fight the traffic and take a shower and get all ready and all that good stuff, you know, that's two hours.

Erick Arnett:
So then you go sit in my lobby for a little bit, then we're going to have a two hour meeting or an hour meeting. They're going to drive home. You've just taken up your whole day to sit with your advisor and maybe knock something out. That would have taken 20 minutes to discuss. So let's take advantage of that. But I just wanted to give a shout out to all of our listeners and all of our areas, you know, up and down the Nature Coast, Crystal, Crystal River, Spring Hill, Sarasota, Tampa, Port Charlotte, you guys, we love you. Thank you so much for listening to the show. And you are what make us who we are. And and this show is for you. This is a purely educational show. It's all about you, you know? Uh, please give us a call. We're we're standing by the phone. (352) 616-0511 to answer any of your questions. And no question is is too small, too big or and no question is dumb. So please answer this. Give us a shout. We're here. We're passionate about what we do. We love to help folks out. And you know, if you if you can't catch all the show today, please feel free. You can. We're this show is podcasted on any one of your podcast apps or where you get your podcasts from, or you can go to our podcast website. It's just take point on retirement. Just like the radio show headline take point on retirement. Just Google that you can get right to our podcast and look at all of our past radio shows and podcasts, and catch up on anything that you may have missed.

Erick Arnett:
Great, great bank of information on our wealth there. So we're happy to to share that with you guys. And but, you know, and then we also have a YouTube channel if you if you want to watch some videos and go to our YouTube channel, just take point wealth management there. So lots of ways to get in touch with us. If there's something that makes sense to you and you, you want to ask a question, but you don't quite have time, you want to jump on the phone, just go to our website. You can just take out your smartphone. Just Google take point wealth management or. Take pawn on retirement will come right up. You go to our website and in that upper right hand corner there's a little box you can just click on and put your right on. You can schedule a time to chat with me for 30 minutes and ask any question that you that you have and you just you'll just be right on my calendar. We'll reach out to you, confirm it. Uh, we also got, you know, some great educational tools that we always talk about on the radio. We've got a, we've got a library here of information that we're willing to share with you. We're probably not going to talk about it too much today, but because we do talk about a lot of it on past shows. But the importance of estate planning, if you don't have a will, you don't have a trust.

Erick Arnett:
You don't know if you need a will or a trust. You don't know the difference between the two. Please give us a call because this is all I need to know is that if you're listening to this show right now, you do need a trust. Everybody needs a trust. Everyone. It's not about wealth. And, you know, most people think, oh, if I'm super wealthy, you need trust. And I don't have that much money. I don't need to trust. No, that's not the case at all. Uh, and there's a lot you owe it to yourself to get this book called everyone needs a Living trust. Everyone needs a living trust. If you give us a call or even go on our website, click on that chat in the upper right hand corner and just say, hey, I'd like this book. Give us a give us. Leave us your phone number and your email and your address, and we'll get that right out to you. And then when you have questions about it, just give us a call or happy to happy to take care of that for you. So we take care of all your estate planning needs Medicare, total financial planning. So it's a one stop shop that we've developed for our listeners. So with that being said, I know we got a lot of good stuff to talk about today. Sam. Uh, you know, uh, we always love this quote of the week, you know, words of wisdom to begin our conversation today. And, uh, I always love to have you deliberate.

Producer:
And now for some financial wisdom. It's time for the quote of the week.

Producer:
Yeah. This week's financial wisdom quote of the week is retirement is not the end of the road. It is the beginning of the open highway. And I think this is a fantastic quote for this week, Erick, because a lot of people that are coming into the office to meet with you, they don't just want to retire, they want to relaunch. They understand that they've got two, three decades or more left to live and enjoy this world, and they've got a lot of goals and things they want to cross off and still do. So understand that it's not the end of the road, that retirement is the open highway.

Erick Arnett:
Yeah for sure. It's it's, you know, retirement these days is kind of the new retirement. You know, I just had a lady in this morning and she just retired, and we kind of buttoned some things up for her and sent her on her way, and, and, uh, you know, she she's super excited. And we were able to, you know, about a year ago, uh, work with her and transition her into her retirement, making sure everything is set up for her income. She's, you know, so she's super excited to kind of launch into retirement. She had some, some fun stuff she was going to do this week. And and I just told her, I said, don't be like, uh, a lot of my retirees that we work with don't don't retire and get bored and then call us and say, I'm going back to work. So think about it. You know, it's like, you know, if you're listening right now too, and and you're not quite you're not retired yet. Or if you are retired, you gotta have a vision. You gotta have a plan. I mean, that's the first thing we talk to people. We sit down was always asking you, what are you doing in retirement? You know, what's retirement look like to you? And it's kind of funny that most of the people that we ask that question just haven't even thought about it, you know? And so think about it, you know, what are you doing in retirement? What's it look like to you? Envision that dream.

Erick Arnett:
You know, that freedom. And what are you doing? You know, are you traveling or are you boating? Fishing? Go to the beach. You visiting your kids. You know, your gardening. You know, whatever is your hobby as you're doing, envision that. What are you doing in retirement? Because it is a big transition. You know, it's a difficult thing. You know, she this this lady that I worked with this morning, she's like, you know, it was her first kind of week being retired. And you know, she's like, yeah, it's like, I don't really know what I'm doing. I don't know what's going on. But it was nice to get up this morning and not have to go to work. You know, it was like, so you have all this freedom now and and retirement today is a little bit different. It's not like the retirement of old, you know, back in the day, our grandparents and you know our aunts and uncles, they retired at 55, you know, and they had that pension and all this kind of stuff. But you know, people are working a little longer and, uh, you know, uh, Social Security has changed and all that kind of stuff. So, you know, uh, but the new retirement is kind of like an active retirement, a working retirement.

Erick Arnett:
This lady even said, yeah, I'll probably take a year off and relax, but I do want to still do something. And she's 65 years old, and now you have the freedom to kind of choose what you want to do. Maybe there's something out there that you always wanted to do and, and, uh, and have fun. And you were kind of maybe I don't want to say stuck in a job or you're in a long term career and, you know, you always hope to do maybe something different. Go for it. You know, we're happy to help you out and figure out that plan. But there's tax strategies to talk about, you know, if you work too much, make too much money prior to full Social Security age, you can create some tax implications for you there. If you're taking pensions and RMDs or, you know, withdrawals from your IRAs and you work and you could create a whole new tax problem there. So I know we're going to get into taxes a lot today because we're hitting that. We're hitting on that season. Sam, once again, I can't believe it. It's time to get those tax returns done and pay the man right. Pay the pay, Uncle Sam. So, uh, it's important when you're thinking about this. Just not kind of go through what you've been doing all along, that conventional wisdom. It's a different phase of life now.

Erick Arnett:
And, you know, you've got to. You've got to hold on to every penny you can. So there are some tax strategies out there in retirement that are super, super important to to get a grasp on. And we're happy to help you. Here at Take Point Wealth Management. That's part of what we do. So one of the things that we help to build in your retirement plan. So by the way, if you're listening to the show right now, you qualify for that full 100% A to Z complimentary retirement plan. Uh, it's hard for me to even think about all the stuff we do, but I'll try to rattle that off from A to Z. You know, so your your estate plan, we'll get your will and your trust in place for you. That's super important. Your power of attorneys, your living wills, your health surrogates, all that kind of stuff. Medicare. What's that look like? You know, is my husband still working? I'm in a group plan or or, um, you know, on my own now, you know, how do I how do I what do I do? What kind of plans are in my area? We can help you with all those questions. And how does Medicare get to interact with your Social Security and your income, things like that. Because there's a lot of different things that you need to know about qualifications and the costs that are the premiums that you're going to pay.

Erick Arnett:
It's all tied to your income. So it's super, super important. How much income am I going to need? Income and expense planning, you know, super important. You know, we don't want the number one fear of retirees is running out of money. So we want to make sure you get that guaranteed income. You know, you've got that income source that no matter what happens, you know, we hear all this nonsense on the radio and all this fear mongering, but, you know, the world's coming to an end and everything. You know, the dollar is going to collapse and all this kind of stuff. Well, if that's the case, then let's make sure we get our guaranteed income in place. Right. So, you know, these insurance companies secure and insure your income. Okay. And you need you owe it to yourself to learn about that. So we can put your income in place no matter what happens, okay. No matter what scenario is out there, you're still going to get that check in the mail every month, like a pension or a Social Security. So let's look at your expenses. Let's look at your budget. Let's and you know, let's let's make sure that you've got income for life. First and foremost investment management super important. Like what. How how are you how are you invested currently. What kind of fees are you paying? You know, are you generating too much tax on the strategies that you're utilizing.

Erick Arnett:
Let's talk about all that. So A to Z. It's a total comprehensive retirement plan free to you. You know easily a $1,500 value. That's all free to you as a caller today. Just call (352) 616-0511. That's (352) 616-0511. Or you can also just go to take point wealth management in the upper right hand corner. Just click on that little button and get right on my schedule right on my calendar. So you know paying. So we're coming up on tax season right. Obviously here we are I can't believe it's already February. We're already it's going to be March before we blink. So it's time to get all your ducks in a row. And and if you if you haven't met with your financial advisor or you haven't met with your tax advisor and you're kind of in the dark on things, please give us a call. We have all that in place for you right here. We have tax advisors. Yeah. Who we partner with. You know, we have all of those answers and a wealth of information right here for you. So you owe it to yourself to even maybe maybe have someone else review it. Get a second opinion. Third opinion. Maybe you're not quite happy with things you know that are in the past, you know, and the returns that you've been getting and things like that.

Erick Arnett:
Maybe you need a second set of eyes. You know, it helps in all facets of life to just to have another opinion. You know, uh, if somebody if a doctor said to me, hey, Erick, we gotta chop your leg off tomorrow, I think I might go get another opinion, you know, or 2 or 3. So, uh, it's important in any, any discipline that we're in or anything that we're working with is get get some other opinions, some fresh set of eyes on things. So we're also offering that to you today, a toll free comprehensive review of what you're currently doing. And but you know, but to dive into more about the results of the advanced plan planning for your retirement, we want to help you delete the IRS and minimize your taxes in retirement. You know, paying taxes is a reality of life, but you don't have to leave the IRS attempt, right? Let's not be paying too much, you know, let's take advantage of one or both of the only tax free investments for Americans today. Let's talk about that because there's a lot of misconceptions. The only tax free advantages offer offers to Americans today is one. Is the Roth super, super important underutilized. If you're if you're a younger person and you're just starting out or you're in your mid your in your midlife 40s 50s, you've got to get a Roth going.

Erick Arnett:
We can talk to you about that. Maybe you're later on in life and you've got a bunch of money in IRAs and four one K's. Let's talk about Roth conversion. Super, super important that we talk about this. If your current advisor or your tax consultant or CPA hasn't been talking to you about this, then you owe it to yourself to pick up the phone and give us a call. (352) 616-0511. That's (352) 616-0511. Roth. Roth IRAs allow for tax free growth and tax free distributions in retirement, you can actually convert funds from other types of retirement accounts into a Roth IRA. So in addition to the tax free benefits, there are no required minimum distributions. Let me say that again, this is the reason that I love the Roth and all my clients are on a schedule. To try to get as much converted to rock but before they turn 73, because at age 73, if you haven't already, if you're not already in the RMD cycle and you're not, you haven't reached 73 yet. You're going to be required at 73 to start pulling money out of your IRA and pay taxes to Uncle Sam. Now. That's okay. No, no, we got to pay taxes. Right? But. There are some strategies and things you have to be mindful of, because there's so many different things you can do to try to be mindful of that and minimize that.

Erick Arnett:
So we've got to be able to put the lens on that and really focus on it and deliver to you the ultimate in the most optimized strategy to minimize those taxes. But you can you can you can avoid the required minimum distribution. So in Roth IRAs, that to me is one of the most important things is you gain control back, okay. You gain the control back. Because if you just stay with the status quo and keep doing what you're doing and you're tied up in these IRAs and 401 KS, you're just creating a massive tax bubble for yourself in the future. And it's tragic because we know taxes are going higher. We know they're going much higher. They have to the current tax law sunsets in 2025. And we go back to the old tax laws in 2026. So right there automatically is going to be an increase in taxes. It's common. And so we've got to get out ahead of that and get in front of it and think about it. If you if you're 73 years old and nobody has a gun to your head now and says, you know, you don't have to take money out of your IRA and pay taxes, because when that money starts coming out of your IRA and RMDs and that goes on top of your pension, it goes on top of your Social Security, it goes on top of any other income that you have.

Erick Arnett:
And it can throw you way up into another tax bracket, right, which is going to also increase your Medicare premiums. Okay. It's going to increase potentially tax on your Social Security. So it has a lot of ramifications. And so if, if the if the if the government moves the tax laws or tax bracket, which I think we're going to get to later on in the show, you know, it's been much higher in the past. You know, if all of a sudden we're faced with, hey, 50% income tax. Well, you know, 50% of zero zero. So anything that comes out of your, out of your Roth, you know, is going to be tax free and, you know, you can just defer it forever if you don't want to have if you don't need the money. We have so many clients, we talk to so many people that they're they're required to take this distribution. And, you know, they don't need the money. But but all it creates is a tax situation for them. And they wish that they could just defer it, keep it. And they they're always asking me like, what can I do? What can I do? And I'm like, I'm sorry, but there's really nothing you can do at this point. It's it's too late, you know? So, um, so, you know, but it's important. I love working with people in the early 50s, early 60s to get to them early.

Erick Arnett:
And we can really, really manage this and get them on a schedule and get as much converted as we can and even get them to contribute to a Roth. So if you're if you're sitting there listening to the show right now and say you're 5055, maybe even in your 40s and you're still working and you get that 41K at work and it just pumping a bunch of money into your 401 K, maybe think about balancing that with a Roth because you know, right now taxes are on sale. I mean, taxes are cheap right now, but sometime in your lifetime, if you're listening to the show right now, my retirement warriors, sometime in the future, those tax rates are going higher, folks. It's just I just I just think there's no doubt about it. So, uh, no required minimum distribution that gives you the power, it gives you the control, and it's going to save you a ton of money in the future. It would mean the IRS just they can't force you to withdraw those funds each year, allowing your hard saved money to continue to grow. And guess what then? That money. If that money passes to your wife, your spouse, your partner passes to your kids, your beneficiaries tax free. So it's also a major awesome, excellent legacy planning tool. And also, if you're stuck in that RMD phase already and there's just no way out of it and you're going to have to take RMDs, you know, there's there are some strategies that we can utilize those RMDs.

Erick Arnett:
You can pay those directly to a charity and reduce your tax. That way you could take that money and buy up life insurance and create a bigger legacy. Okay. And now now the money you pay the tax on the money goes into the life insurance policy. It grows tax free. You can take money out of it later on, uh, tax free loans. But that then that money passes to your kids tax free. So you can essentially be, you know, eliminating that tax burden long term for your legacy as well. So super, super important. So the you know, I just touched upon it. The only other thing that investors can do to avoid taxes really is use life insurance to generate a tax free income stream. We can help you invest in life insurance options that protect your family with a death benefit. Money for dying. Yeah. So protect you from a death benefit. So in the likely scenario that you don't die unexpectedly, money invested in the right types of life insurance policies can be withdrawn tax free. So you can get money for living on. So super, super important to have that flexibility. But we're going to constantly be kind of battling against the tax man.

Erick Arnett:
So we just got to understand that that current tax, that that current 24% tax bracket that you may be in was actually 56% in the 1960s through 1963. That's eight 8% higher than twice the current tax rate. So think about that folks. Let it sink in for a minute. You know taxes are going high. We have a we have a 34 fastly approaching $35 trillion deficit. Interest rates are high. You know, how is our government going to pay the debt. How are they going to pay the interest on the debt? They've got to either start increasing revenues, which is increasing taxes on us. Right. Or they've got to cut spending. Uh, I don't see them cutting spending anytime soon. You know, Democrats, Republicans, uh, libertarians. Uh, what else you got? The independents, they're all guilty. They're all guilty of running up, running up the deficit. Okay? The outlandish spending is not going to stop, more than likely. Right. Because, uh, or, you know, because Washington's drunk on spending and they're drunk on printing money. So you've got to, you know, you've got to be mindful of that and understand that, you know, taxes are probably going to have to to go out. So listener call out right here, if you're concerned about rising taxes, please give us a call at (352) 616-0511. That's (352) 616-0511 or visit our website. Take point wealth com and get in touch with us so you can help build a smart tax plan for you and your family during retirement.

Erick Arnett:
The cost of taxes will significantly affect your retirement. If you do not have a plan. I'm telling you, you have to have a plan. Having a proper estate plan in place is another thing you can do if you're interested in minimizing your total tax burden in retirement. So legacy planning, estate planning, tax planning these are the things that if you're approaching retirement or in retirement, you got to get much more serious about, much more focused on. It's not about just growing your money anymore and trying to get the best returns and chasing stocks and bonds and all that kind of stuff. It's not about that anymore. That was the growth phase. That was you were working your whole life. You're pumping money in your 401 K that you're getting a match. The markets were rising up and you're you were in that accumulation phase, that growth phase. And now you're in what's going into the safety protection and the distribution phase of life okay. So that's a whole different strategy, whole different set of principles and values and and strategies that maybe, perhaps your current advisor or past advisor, uh, just wasn't wasn't their discipline. Maybe you're in a shop or a firm that's just all equity driven and are all about generating returns and not doing that planning for you.

Erick Arnett:
You've got to get with the team that's going to do this comprehensive planning and also not just do a one time plan, but be mindful of it and constantly massaging it, constantly evaluating it, reviewing it, and being able to adapt and make changes. When you become a kind of take point wealth management, we're it's not just a one time done deal. It's like this is a constant tactical plan that's constantly being evaluated, evaluated, constantly being massaged. And you got to stay vigilant with that. So that's something that, you know is the way we manage our clients. Uh, uh, retirement here at Take Point Wealth Management. So super, super important retirement tax strategies for the season. I think we're getting close to maybe having to cut out on our first segment. We're going to be back, uh, for another probably 30 minute or segment or so of Sam's kind of giving me the thumbs up to say, hey, we got to wrap up here. So we got about a minute. Stay tuned. Don't go yet. We're going to talk more about taxes. Tax day is coming up on April 15th. So we're going to get into some retirement tax strategies for the tax season. And we're going to talk about the five biggest reasons you should consider a Roth conversion. So thank you so much for listening to Take Point on Retirement Radio. We'll be right back after these messages.

Producer:
Remember, all of Erick's listeners receive a free financial consultation just for listening to the show. Visit TakePointOnRetirement.com to learn more and schedule an appointment. Thanks for listening to Take Point on Retirement and subscribing wherever you listen to podcasts.

Hey little girl is your day. Did he go and leave you all alone.

Producer:
At take point wealth management. We know you've worked hard to earn your money, and you've worked even harder to save it. When it comes to wealth management and planning for retirement trust, Erik Arnett and his team of experts who have been helping individuals, families and business owners find financial freedom for more than 20 years. Let us help you protect and grow what you've worked so hard for. Schedule your free, no obligation consultation now at take point wealth com.

Producer:
The ability to watch sports has now dug further into virtual reality. I'm Jim Terubok here for the Retirement Radio Network powered by AmeriLife. The calendar flipped to February and saw the debut of the highly anticipated Apple Vision Pro, a device that blends both virtual and augmented reality. Cnbc's Steve Kovach has more.

Steve Kovach:
And you know, I asked cook, what is this for? He's talked a lot about entertainment and things like that. But another thing besides that obvious use case of, you know, watching cool movies on your face, I guess in this big screen B2B and enterprise, he seemed really excited about the prospect of selling the Vision Pro to businesses.

Producer:
All told, the Vision Pro with accessories will cost around $4,000, and several sports leagues have built custom applications for the device. The NBA, for example, created a specific app for users to watch up to five games at once or view live stats alongside the game. Broadcast. The PGA Tour Vision will show viewers live shot trails and shotlink data at certain events. Mlb's app, meanwhile, will offer a three dimensional data visualization, such as a view from behind home plate to pair with streaming video. Apple CEO Tim Cook has been on record saying prior to the release, quote, it's the most advanced consumer electronics device ever created. And while the question still holds how fans can integrate the Vision Pro into their sports viewing, this technology has the potential to be a game changer for the retirement Radio network powered by AmeriLife. I'm Jim Tabaka.

Producer:
Welcome back to Take Point on Retirement. Schedule your free financial consultation now at TakePointOnRetirement.com.

Producer:
And welcome back to Take Point on Retirement. I'm here with Erick Arnett, your chief financial advisor over at Take Point Wealth. And Erick, before the break, we were talking about the only two types of tax free investments that are available to Americans. Those are Roth IRAs and life insurance. And we teased it before the break. But we're going to get into these five big reasons why you should consider a Roth conversion. And Erick, what is reason number one?

Erick Arnett:
And I think, Sam, yeah, the five main reasons you should consider the Roth conversion. So number one, the biggest one obviously is to create a tax free accumulation of wealth. Okay. Imagine being able to grow your wealth tax free. And it also be able to access a tax free. Okay so I remember this just brings a little story to mind. I remember doing an educational event a few years back and I was talking. I had a crowd of folks that I was talking about, the, uh, the Roth conversion and, uh, probably 98% of the people in the room didn't really had never been really introduced to it or understood it. And as I was going through and discussing it and kind of talking about it, I, I noticed there was one man kind of sitting in front of me and his that his arms crossed, and he was kind of smiling. He was an older gentleman and I just called him out. I said, sir, excuse me, sir, what are you so happy about? What? You know, what are you thinking? You know. And he said to me, well, he was I'm 75 years old, and I did the Roth conversion way back when I was like 60, 65. And he said the biggest smile on his face because he was like, I've already done this years ago. I don't know who got to him or when he figured out, but he was a smart man and he geez, I remember ten, 15 years ago, nobody was even really talking about the Roth conversion that much.

Erick Arnett:
So, uh, you know, this guy was just smiling because he was like, you know what? If they raise the tax rates to 50%, 60%, they can raise the tax. We could we could go total socialism and communism. They could raise it to 80%. It doesn't it doesn't matter to me because 0% of 80% is zero. Right. So he's he did that. He did have to pay taxes on his on his hard earned money. And so that was pretty cool. I was glad to see that somebody had taken advantage of that. And and that's really the majority of what we do here take point wealth is we you know, we've just we've been we've been doing this 25 years. Uh, we're just we've seen a lot of mistakes. You know, we're we're really just trying to help people not make those same mistakes and just get the message out and just help as many people as we can, you know, as many people as we can, uh, to not make these same mistakes over and over again, because I can guarantee you one thing. You know, the IRS isn't going to call you up or they're not they're not offering any free education. Ever wonder why the IRS just doesn't even offer any videos or education or anything on on this kind of stuff? It's, you know, because they don't want you to know about it. You know, it's they don't want they don't want their honey pot to be spoiled.

Erick Arnett:
So yeah. So don't quote me on this, but I know it's a crazy big number. I think it's like 80 to $90 trillion of baby boomer money in retirement accounts. So think about that. Maybe that's why Uncle Sam and maybe that's why Miss Yellen just the other day, testified in front of the Senate that she's not worried about the deficit. Uh, everybody else is in the world but her. So I'm not really sure where she's at with that, but she basically flat out said we're not worried about it. I said, okay, you're not worried about maybe that's why because they know they got 90 trillion of your dollars sitting in a honey pot that they know they're going to be able to tax. Okay. So we've got to we've got to try to, you know, alleviate as much as that as we can. So let's let's get active. Let's get busy. I mean, if you're listening to this show right now and you've got an IRA, you've got a 401 K, you've got any type of retirement account. You owe it to yourself. You owe it to your family to give us a call (352) 616-0511 or just jump on our website. Take point wealth com in the upper right hand corner. Just get right on our calendar for a chat session. Just a 30 minute chat session, not an appointment. You don't have to get in your car or drive anywhere, just a quick chat.

Erick Arnett:
And, uh, let's talk about it because, uh, it's super, super important to try to do our best to create a tax free income in retirement. We may not be able to get all the way there, you know, May, but we can at least make a difference. You know, no matter where you're at in life, what age you are, we can make a difference. So I'm really concerned about that. I mean, it's something I focus on all the time when I'm doing my own personal planning for my family is I know, I know, the tax man's coming in that future. We there's only one way we can start making a dent in that, uh, in that deficit. And it's they're gonna have to increase revenue. They're going to have to increase taxes. So we've got to be mindful of that and do the as much planning as we can within the law. So let's get together. Let's talk about it. Let's get you on the right track to a tax free retirement. Uh, you're also, you know, obviously the next. Five. Biggest reason? Number three we've already kind of beat this one up, but it's protection from future tax increases right. So we've already talked about that. No required minimum distributions. Take what you want when you want okay. Think about that for a minute. Take what you want when you want I have to go through this all the time with my clients. You know, a lot of my clients have inherited IRAs or, you know, they just have this massive IRA that they brought on board and they're just, you know, there's just no, no way around it.

Erick Arnett:
But, you know, they they they're forced to take these, take these RMDs, you know, and it's it's painful. Like, what are we doing with this money. Like we don't we don't even need it, you know, but we're going to be taxed on it. So give us a call. We've got some strategies for you. (352) 616-0511. That's (352) 616-0511. Give us a call. Let me just run through these again one more time saying because they're so important to me I'm super passionate about this stuff. The five big reasons you should consider a Roth conversion tax free accumulation of wealth, tax free income in retirement. Protection from future tax increases. No required minimum distributions. Take what you want when you want and leave a tax free benefit to your beneficiaries. Imagine leaving that estate tax free to your beneficiaries. Super super important. Love it, love it, love it. So we're going to spend here and and go on to the next topic and just kind of pivot here. And uh, the other main killer I mean we talk about it all the time, right. Take, you know, some of our listeners, our regular listeners are probably like, oh, he's going to talk about this again. Yeah. The three main things that we've got to focus on for all my new listeners, I'm sorry, listeners, I gotta I gotta keep drilling this in.

Erick Arnett:
But, you know, uh, the three major things that we focus on here at Takeaway Wealth is, is fees, solid killers fees. You got to reduce fees. You got to be most as efficient as possible because fees are a silent killer. I can show you right now, if you give me a call and you share your portfolio with us and you just put in a little time, give us a call three, five, 26160511. That's (352) 616-0511. I will do a free complimentary portfolio analysis for you. And one of the main things that we pull out are all your expenses. You have internal expenses called expense ratios. We're going to talk a little bit about that later on in the show. Hopefully if we have time you have management fees. You could have transaction fees. You could have, uh, commissions, you know, brokerage commissions. So you can have multiple layers of fees inside your portfolio that you don't even know about. So you might be paying fees on debt asset classes like bonds and cash and things like that. I was looking at an account the other day. This lady brought in and like 28% of her accounts been sitting in cash forever, and she's still paying fees on it. So I'm like, why are you paying fees on cash? You know, so little things like that, you know? So, uh, we're happy to do that. Completely free and complimentary. Please give us a call.

Erick Arnett:
We'll do that complete fee analysis for you and give you the true, because there's a lot of internal fees you might not be aware of. I remember back in the day I used to do these things and, you know, variable annuities and things like that, which variable annuities we don't like at all. But I did one one time and the internal fees added up to about 8%. And the person couldn't understand, like why isn't this thing growing? The markets are doing good. All stuff like, well, let's figure this out. And we do what's called a stress test. Or we do an annuity stress test and analysis and we'll pull it all really dive into your annuity, examine it and pull it all, pull it apart and dig it and pull all the pieces out. And we'll show you exactly what you're paying and fees and expenses. How are you supposed to grow your retirement with those kind of expenses? So, uh, mutual funds don't even have to report, but a lot of them have turnover ratios and high expenses inside of them. So mutual funds we don't feel like are very efficient. Got to get mutual funds out of your portfolio. Got to get bonds out of your portfolio. Variable annuities. Got to go. Uh, you know, so there's but you know, there's some there's some great strategies out there now. I mean, the industry has expanded wonderfully. We have so many tools available to us as advisors today.

Erick Arnett:
So what were we doing back in the old days five, ten, 15 years ago? It's just not working anymore. You know, even I'm getting ready to go to a conference. So I'm excited about it. And the speaker's talking about how the modern portfolio management theory is dead. You know, this old conventional modern portfolio management theory we saw in 2022, it blew up on us. It didn't work. You know, if you had that, if you if you're working with an advisor or a brokerage firm or whatever, and you know, they built a portfolio for you and all they did was have you fill out a risk tolerance questionnaire and say, oh, you know, based on your age, you know, you should be in this portfolio. You deserve a lot more than that, a lot more. You deserve a tailored, customized plan, and you deserve an active, tactically managed portfolio. But you deserve to not have assets sitting in dead asset classes, you know, like that, that aren't going to perform or anchoring you down. So fees risk. We focus on risk. What's your standard deviation of the port. For you. We're going to pull that out for you. And then taxes where you pay your taxes. So those three things are the biggest, biggest silent killers that we see in growing and building a solid retirement. So we've got to focus up on that. Please, please, please give us a call today. (352) 616-0511. That's (352) 616-0511. For your complete free portfolio analysis and annuity stress test, give us a call.

Erick Arnett:
We'll go to work for you. We'll answer all your questions. And you know what. Bottom line is if you go you know that no one's going to force you to do anything unless I was going to put a gun to your head, you're going to change, do anything, but at least you're going to be more confident, and you have much more clarity as to what's going on and where you're headed. Okay. And and so we can show you in our results in financial planning process if you just didn't make any changes, okay. And you kept kind of doing what you're doing, we can show you what that would look like ten years from now, 15, 30 years from now. And we stress test that and we throw a thousand scenarios at it. Good markets, bad markets, combinations thereof, high rates, low rates, high taxes, low taxes, a thousand scenarios at that. At your current portfolio, we stress test it out to see how it's going to hold up over time and what kind of growth we can get, what kind of income we can get from it. So super and super important. I think that you go through that exercise to get those questions answered. So, uh, you know, it's, uh, we're offering that to you today free of charge. (352) 616-0511. You can also just go to take point wealth.com in the upper right hand corner. You can just click and get right on my calendar and ask me a few questions.

Erick Arnett:
So, uh, you know, we find that most people call and meet with us, do not understand the fees they are actually paying inside their portfolio retirement accounts. So what we want to do is quickly eliminate any excess fees, quickly eliminate any excess fees, especially on assets that are underperforming. Okay. So let me let me ask you it's your money. Don't you want to get the most out of it? Hey, don't you want to get the most out of your money? And so that old conventional wisdom just might not be working. So you worked hard to earn your money, and you worked hard, and you worked even harder to save it. So let us help you put that money to work and start paying you an income you and your family can count on during retirement. We help our clients take advantage of fee efficient strategies while generating safe and predictable income streams that they can never outlive. Did you know that you can establish your own personal pension? So a lot of people, you know, are grandpas and grandmas and aunts and uncles. You know, they had the they had the luxury of when they retire that they worked for that same company for 40 years, that they had a nice pension for him waiting. Well, our generation and even a lot of the baby boomers, they they weren't afforded that. They didn't get that pension they had to save. And a 401 K, you know, or an IRA.

Erick Arnett:
Right. And you just don't have that luxury of having that personal pension. So by replacing the bonds you hold in fixed indexed annuities, by also deleting these fees on the bond portfolio, you could really have a huge impact. So you can establish your own personal pension, okay. By replacing the bonds you hold with fixed indexed annuities, while also deleting the fees on the bond portion of your portfolio. That's hugely impactful. So think about it. If you have $1 million portfolio and you know you're in that phase of retirement, you're probably in that 6040 blend of that 5050 blend of stocks and bonds. So you got $1 million portfolio, you're paying 1% advisory fee or, you know, another half percent in eternal cost or whatever. So you're paying, you know, 1.5% that's $15,000 a year, right? So imagine just removing the bonds which are underperforming. They're inefficient and utilizing a guaranteed structure that is proven over time. We can show you white papers, Ibbotson white papers won a Nobel Prize. I wrote all about this stuff that annuities actually outperform bonds. And they have historically for a long time. So why be paying fees on these inefficient bonds? Okay. So we're utilizing the index annuities and fixed annuities to generate that guaranteed income that you can always count on. And there's no fees. So you're deleting those fees. So now you've cut your portfolio fees in half. You only got you only got 500,000 working in the markets and equities.

Erick Arnett:
And you got another 500,000 indexed annuities. So you only get a feed on the 500,000. So that's 1% you're paying, you know, five, six, 6500 bucks or whatever. That's half of what I mean. So just imagine cutting that over ten years. That's 120, $150,000 in fees that you're saving. So it's massive. It's hugely impactful. Like you know, so once again the fees silent killer. They're killing us. You know we gotta be mindful of that. The taxes you know we gotta be mindful of that. And then the risk you know what is your financial speed I call it wrote a book called what is your financial speed. Happy to share it with you. You just go on my website, take point wealth com and go to the bottom of the website. There's a book there you can click on and get the e-book we wrote. You know, uh, what is your financial speed? Everybody has a different financial speed. What type of return do you need to be getting to in order to to to be successful in retirement? The most important thing is what kind of risk are you taking to get that return. So we've got to maximize the return with the least amount of risk. And that's what we do in the construction of the magic of our portfolio management. We dial that down and we really reduce those fees. We reduce that risk. But we're not giving up anything in long term returns.

Producer:
All right, Erick, now we want to get into kind of a case study and this will be our problem solver of the week. So kind of walk us through how you helped. This couple has been listening to your show for some time.

Producer:
It's time for this week's Problem Solver.

Erick Arnett:
Yeah, I love this. Love this. Helping a couple protect and grow their retirement savings. So, uh, we had to change names. Of course. So, uh, we're just going to, uh, use some, uh, fictitious names here. Of course. Never share client data over the radio. Not a good idea. Uh, so, uh, but, yeah, let's call, uh, Steve and Nancy. You know, they're they're they're they've been long time listeners of the show, and they finally gave us a call in January. And so we can help them make 2024 the year they established for their retirement plan. You know, so, uh, a lot of people kind of been doing it themselves, maybe winging it, you know, they, you know, they they really got the help that they deserve or need. And so I'm so excited that Steve and Nancy finally gave us a call longterm listeners. And, and, and we were able to establish for them a, you know, a long term total comprehensive retirement plan which gave them full confidence, full clarity. There's so much happier in that ease now relaxed, which we love, love, love like I mean, that makes us it gets us excited and, and, uh, you know, when we do our job. Right. And, and folks really see a benefit and value. So, uh, Steven was 73, and I think Nancy was like 71 a couple years behind. And, uh, they're married and I want to see the retirement in advance. They wanted to, you know, see their retirement results in advance planning that we do for them.

Erick Arnett:
So, um, uh, and as they enter into their golden years, they wanted to make sure, you know, they were they were more confident about what's going on and what they're doing, and they don't want any surprises and just wanted to be doing everything they could to plan for the future. We were able to quickly determine that their investments for retirement had had drastically underperformed over the past three years, drastically underperformed, and so they were overly invested in bonds, and Steven's 401 K from work was invested at Target Date fund that was dragging down the performance of the overall portfolio. So let me say this again, folks. They probably heard me talk about this before on the show. But if you're invested in target date funds, please, please, please, please give us a call or you owe it to yourself to do something different. We are, uh, I've been in the business 25 years. We are not big fans of these target date funds, and there's a lot of reasons why, but you can just look at the performance. And really, the bottom line is, you know, there's no customization. You know, they're just it's just this kind of, uh, blanket type of scenario. Uh, and they, they have bonds in the portfolio. And as you get closer to retirement, this thing's going to automate this, this, this is going to automatically shift your money into bonds. So imagine this person, you know, he was in his target date fund.

Erick Arnett:
It was automatically shifting money into bonds in his last 10 to 5 years of retirement, putting it into a totally dead underperforming asset class. So you missed out on so much growth in purchasing power for his future. Um, and this is and this is why we do the show, folks. I mean, once again, like I said in the beginning, we're just trying to help you eliminate and avoid the mistakes that we see so often. And I just urge you to, you know, not try to go it alone. Don't try to do it yourself. You got at some point you got to trust somebody. You have to trust somebody. So give us a shot. Give us a call at 3526160513526160511. Uh, you know, give us a call, give us a shot. We want to be able to help you with this. But anyways, that these target date funds were really dragging down the performance of his overall portfolio. In fact, they had lost market value in the retirement portfolio each of the past three years and needed help moving forward so they could stop digging a hole for themselves. It's really hard when you dig that hole to get out, folks. So. Well, you know, we've got to be we've got to be super, super mindful of that. So, um, there needs in retirement, you know, pretty basic. You know, Steve and Nancy want want more retirement income that they can actually count on, not just a nest egg that could be affected by the volatile stock market.

Erick Arnett:
You know, a lot of people fall into this conventional wisdom that, you know, hey, I'll just I'll just stay with the stock market, buy and hold and it goes up, it goes down, it goes all around. And, you know, I just hope for the best. Why do that when you can? You can put a clear, concise, concrete, you know, plan in place that's going to tell you exactly what you can expect. Just had a lady in my office this morning and and she's super happy. I can't tell you the rate she got for compliance reasons. You know, we can't talk rates, but she got this super high rate guaranteed locked in, locked in her income for life. Went out the door knowing that, you know what? That paychecks coming in the mail every week or every month. And no matter what happens. And she was super happy, you know, eliminated that fear. And so great, great, great, great situation. But, you know, Steve and Nancy just they, they got tired of just relying on and hoping for the best. That's what a lot of people do. I think they just hope for the best. They were active healthy couple and they plan to travel a lot in retirement. Uh, so they also want to help fund a family vacation once a year with all their kids and grandkids. Uh, so we went to work and we built what we call a smart plan.

Erick Arnett:
We went to work to solve these problems. And so we performed a detailed x ray of their entire portfolio. We also performed an annuity x ray on their two older annuities that they still had, that they were invested in. And we helped them choose a fee efficient managed portfolio. Tactically managed portfolios means active management, like somebody who's got the hands on the wheel, not just hoping for the best. We we actively manage our portfolios on a day to day basis, okay, following trends, making shifts and investments. And and so we want to talk to you about that and talk to you about our style. But um, super, super important that, uh, you know, once we got those stress tests done and those x rays, we help them choose a fee efficient managed portfolio that matched their actual risk tolerance. Okay. And align this portfolio of smart risk investments with their overall plan. We call it smart risk. Okay. You got to be you got you got to still take some risk. You still got to be in the markets to beat inflation and generate some good returns long term to keep that money going and growing. But it's got to be smart. It's got to be smart. We see a lot of crazy things when we sit down with people, you know, uh, you gotta be smart. Uh, let us let let us go to work for you and build that overall overall plan, that smart risk.

Erick Arnett:
So you're going to have smart safe with annuities, smart risk with the tactically managed portfolio being very mindful of the downside and risk and fees and taxes. So super super important. And we get all those working together for a total comprehensive plan. So and we also uh, we ended up converting one of the underperforming annuities into a new fixed indexed annuity that was paid an immediate 20% bonus on their money. Immediate 20% bonus on money. It also includes an 8% guaranteed interest roll up every year. They defer withdrawals. So, uh, this we got to talk about the fact that interest rates have gone up drastically. Right. So interest rates have gone way up, way, way, way up. And they're kind of peaking here. So now's the time to exchange these old annuities that aren't performing that you bought years ago that were pegged to low interest rates. The new annuities being offered okay, are much higher rates, much higher bonuses, much higher participation rates, all that stuff. So it's time to transition those and take advantage and kind of lock in these high rates folks, because these high rates aren't going to stay forever. So this is the time. This is the time I said 2024 is going to be a huge year for everybody, because we've got to be making these shifts and taking advantage of these high interest rates because they're not going to be around forever.

Erick Arnett:
So, Nancy, so we also have Steve and Nancy tyranny come with the other existing annuity to double their current retirement income and amount more than the current requirement that Steven had just begun to take. So increase their income. We took charge of the retirement nest egg, reduce their bond exposure in the portfolio by replacing it with bonds with highly rated fixed indexed annuities and brokerage CDs. Okay, so we're also also also get that safe money in there. And we replaced the mutual funds. They had their portfolio. Remember I said we're not big fans of mutual funds. Inefficient uh, and expensive. And we placed them with ETFs to reduce their fees and their expense ratio dramatically. So finally we reduced the standard deviation, the risk measure of their portfolio, okay. By decreasing the high correlation of their assets and moving a portion of their savings into lower risk investments that still delivered a reasonable or high rate of return. I know that was a word full. Okay, I know that was a lot. If you're listening to the show, bottom line is what we were able to do. Like I said, that we do it every day and all day with with Steve and Nancy. We reduced their fees. We increased their income, okay. We gave them that guaranteed pension for life. And then their smart risk portfolio is still the markets. We dialed down the risk okay. We we looked at the standard deviation and we and we we and we made changes in the portfolio.

Erick Arnett:
Got rid of these highly correlated assets so that better diversification okay. And so and we got a portion of the savings into lower risk investments that still delivered a reasonable or higher return because there's some some things out there. Now with the increase in interest rates that are offering much nicer rates of return and going to put income into your pocket with guaranteed income and coupons and everything else. So now's the time, folks. If you've been kind of like procrastinating about calling somebody or getting a second set of eyes or making any changes at all, I think it's super, super compelling that at this time in 2024, you got to make those changes take advantage and lowering your risk and your fees, okay? And take advantage of these high interest rates right now. And let's get those locked in and and get this great these great rates locked in for life okay. Super super important. So unfortunately I think we're running out of time. Please, please, please, if anything on this show jumped out at you and made sense. Right. Our number down (352) 616-0511. That's (352) 616-0511. Serving you up and down the Gulf Coast from Punta Gorda, Port Charlotte, through Sarasota, Tampa Bay and all the way up into the Nature Coast. Thank you so much for listening to Take Point on Retirement Radio and take action today, folks. Give us a call. Thank you so much for listening to Take Point on Retirement Radio.

Producer:
Thanks for listening. To Take Point on Retirement. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free, no obligation consultation, visit. TakePointOnRetirement.com or pick up the phone and call (352) 616-0511. That's (352) 616-0511. Investment advisory services offered through Brookstone Capital Management LLC, BCM, a registered investment advisor, BCM and Take Point Wealth Management 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. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.