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make your nest egg last. Your tune to the Haven Financial Group Radio Show with your host Larry Kolvig and Kim Karrigan your guides to weekly retirement confidence. If you're interested in protecting and growing what you have, let us be your financial safe haven. The full nines are always open at six one two, five oh four eighty four hundred. Now get your financial questions ready because the Haven Financial Group Radio Show starts now.
Good morning, and welcome to the Haven Financial Group Radio Show. Thanks for listening. We have a lot to talk about, as we do every week. Feel free to give us a call at six one two five zero four eight four zero zero or Havenfinancialgroup dot Com, where there's all kinds of tools, calendar of events and all the upcoming things that we're going to be doing.
Kim, good to be with you again.
It's great to be with you as well. And can you believe here we are in the first weekend in November, falling back when it comes to time, and I think falling back when it comes to temperatures as well. It's been a great fall. But unfortunately we all know what's coming, right we do.
We do here in Minnesota. We got spoiled last year. It'll be interesting to see what kind of a winter we get. But you know, it'll also be nice to have these political ads off, hopefully off the television and the radio, because my goodness, they seem like they've been going on forever.
You know.
I feel like people are just tired, right, kind of tired, and just I'm ready for a great holiday season, truth be known.
Absolutely, I mean a lot of that stuff I saw at the stores already out. I mean, you know how fast the end of the year ago, which I'll tell listeners, that's why the timeline and we'll talk more about this of certain things that need to be done or addressed year before the end of the year. You and I have talked more about that. Has those timelines come, we don't want to miss opportunities.
Yeah. Absolutely. You know, today's show kind of looks forward though to twenty twenty five, because we're going to talk about some of the tax repercussions that the new year will bring in, some of the changes. I was taking a look at the show today. In this first segment, we want to talk about Social Security and the Cola announcement and how that affects your retirement. Then in the second segment we'll discuss tax brackets for twenty twenty five.
We do know that they are changing tax mistakes and what that might cost you in retirement. And then finally we're going to wrap up the show with a major expense that many people can plan for, and that is college. And you and I both know, Larry, college is a major expense.
I know very well Cam with four of them in college, one where at one place or another. So it's a major expense. And what can you do? How do you plan well? You start early and to the best of your ability, do the best you can.
Yeah.
Absolutely. Let's get started though by talking about Social Security and the administration officially releasing the Colon numbers for twenty twenty five. Why don't you explain to everybody what that is and where we stand.
Yeah, you and I know that we do lots of classes on Social Security because it's a major decision and it should be an educated decision. Every year, the Trustees report comes out in October. It just came out here October tenth, I believe it was, and it was announced that there was a two point five percent cost of a living adjustment, which is an increase. It's meant to keep up with inflation, you know, especially for retirees. They're on a fixed income and all the expenses are higher
with food and housing and clothing. You know, a lot of retirees rely on this, and we've seen some really nice increases in recent years, you know, because of the inflation numbers that you and I have talked about now for a long time. So people reflect last year of two three point two, this coming year two point five. Some of remember the eight point seven we had when
inflation was at its peak. And all these are based upon the CPI index, so the consumer price Index for urban wage and clerical workers, and they compare it every year in the third quarter. So these summer months are the major months where they really measure, and then they come out with that announcement in October.
Well, for a lot of people, they hear two point five is compared to last year, which was over three, and they might feel a little bit disappointed. I guess the flip side of that is that that must reflect inflation, which going down would be a good thing for everyone.
It would obviously the prices just don't seem to be going down. They say that inflation is going down. I'm always interested to see what they' put in that formula. But you know, two points five is still good now. Critics would argue that it legs off cost of living adjustment with social Security does leg behind real actual inflation.
Some estimpate into that.
You know, over the last fourteen years it legs about twenty percent behind. So you know, it doesn't cure everything, but it does help. But here's what I would say, as we talk about social security again, check out our classes online. We're very big into it throughout the whole year. Should you take it at sixty two, should you wait till seventy? You know, what's your full retirement age based on birthday? All of these things to you know the old thing that people say, I want to sock it
to the government and take it early. That may make sense, or it might not makes sense. And you want to make a good decision. Do you need the money? Are you going to continue to work? You know, I just this past week had somebody come in and they're working, they make really good money. They're here from Burnsville, and they turn their Social Security on while there were working in their peak earnings years. It was a great mistake and they regret it, but at this point there's nothing
they can do. We want to avoid those mistakes. It's based on circumstances. It's not based on your best friend or your brother and sister. It's really if you if you're a married couple, it should be a we decision, not just a meat decision.
Let me go back to Cola for just a second. We have two point five percent. What will you be telling your clients about preparing for that increase?
Well, there's not a lot of preparation really needed.
Hopefully we've done a good job to map out an income and distribution plan their paychecks. So Social Security paychecks are going to go up, and there's that expectation, so they can couent on it. But it's why, especially as we're visiting with those planning for retirement or in retirement, to come up with that income distribution and tax plan, and remind listeners we are in fourth quarter, you know the tax planning, fourth quarter ROTH conversions, you know the
R and ds and are all these things. If you're not having those conversations or throughout the show, if you have question marks in your mind, did I do that?
Do I need to take a withdrawal?
Don't leave it to the last week of December, because that's going to it's not going to happen the way.
You're going to like it.
So planning accordingly. Again, a failure to plan is a plan to fail. Not because we want to, but again, we want to make sure we're making good, sound decisions. And as it relates to social security, the reality is, you know, it's been politically politicized for years.
It's still here.
But I strongly encourage listeners not to rely on social security as much as a lot of Americans do. I'm not saying that's bad, but too reliant on the government's social security system may not bode well for retirement. So you've got to consider those other income sources and how they go together with social security for a variety of reasons. Income and taxes and provisional income. It's all part of that equation, and that's why social security is so important.
So while we're on the subject of social security, let's talk a little bit about Haven Financial Group does informational sessions around the entire Twin City area in an effort to just make sure that people are informed about social security, which is, like you say, for some people might be the basis of their retirement. You're hoping it's not, but it may be, but it's certainly important to just about
everybody who goes into retirement. Talk to us a little bit about those informational sessions and where people can find out about them.
Yeah, there's classes we teach throughout the year. We teach them at community centers, senior centers, that some of the colleges locally.
It's all the education. There's no cost.
And you know, believe me, people are seeking education because what classes do they remember that taught them how.
To do this? Or when have they ever retired before?
You know, social security is an important part of your retirement strategy, not the only one, but It's not as simple as people think it is. It's not a set it and forget it and leave it. Things change, you know, not only in Social security, but taxes and all the things that we do on a five days a week, you know, related to retirement. You should be up to date with these changes. You don't want to get left in the dust. There's going to be new legislation that
comes down the pipe. And it's not just for new folks that we visit with. This is for our existing clientele too, because we want everybody to have the same opportunity, the same information. And that's why I encourage if you're listening, give us a call six one two five zero four eight four zero zero. There's never a cost to have a conversation with us. Set of time. Again, again, there's
no strings attached. You have nothing to lose, but I would say anything to gain because many people are number one, not getting the education and they're not getting the attention they truly deserve.
Yeah. I think a lot of people think, oh gosh, I hit sixty two, or maybe I hit sixty five and I'm just going to flip it on and that's that. But there's consequences associated with when you start to draw your social security. We talk about this pretty frequently and those are kind of strategies that you know. The folks that Haven Financial can take a look at your situation and tell you when you can maximize your social security benefits and when it might be best for you to
flip that switch. You heard Larry say just a moment ago that he met a lovely couple who actually flipped the switch a little too early and they regretted that and there's not much you can do to back up. So it's important conversation to have, one of many related to social security, and at Haven Financial Group they are experts. The number again is six to one two five zero
four eight four zero zero. Call and set up a free consultation and talk with member of the Haven Financial Group expertise about your social security as well as your entire retirement plan. You can also go to Havenfinancialgroup dot com take a look there and see when some of these educational seminars are taking place and where they are
free and they are open to anyone. You just need to sign up before showing up, All right, Larry, when we come back, Lance Larson, CPA there at Haven Financial Group is going to be our guest, and we're going to discuss the tax brackets for twenty twenty five and how they are changing. This is the Haven Financial Group Radership. Don't go too far.
We're gathering more important insights and retirement boase government. The Haven Financial Group Radio Show will.
Be right back.
Stick around, you've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kolvig and Kim Karagan. Now back to the show.
Welcome back listeners again, thanks for listening to the Haven Financial Group Radio Show. I'm founder and CEO of the Haven Financial Group with Lance Lars and our CPA here to talk about some tax changes, some updates, should dos, could dos all the things related to taxes and great to have Landskin with us to talk about this stuff.
Yeah, it's good to have an expert in the room. I have to tell you that is for certain. That's great to have you. Let's get started with this conversation discussing just the fact that tax brackets for twenty twenty five they are changing.
Correct, So the tax brackets himself aren't changing for twenty twenty five, twenty twenty six is when the new brackets are scheduled to come into effect. So twenty twenty five is the last year of the Tax Cuts and Jobs Act that start ten twelve twenty two to twenty four percent tax bring with for the last seven years. So this is the last year that we're going to be looking at trying to do a whole bunch of different
tax savings. In twenty six, that's when they're scheduled to go back up to ten, fifteen, twenty five, and twenty eight percent, and then of course the higher tax brackets.
Now that could possibly change in these these brackets could remain in place, but again this could be It would very much have to do with this week's election.
Yes, it's good, that's exactly right there. So we need to have Congress actually do something to extend the Tax Shuts and Jobs Act in order for us to continue to have these lower tax rates as it stands right now. If Congress doesn't do anything, then we are scheduled to go back up on one p. One twenty six.
Okay, there are the IRS has announced though some inflation adjustments for twenty twenty five.
Correct, Yeah, so the tax brackets have gone up a little bit, and so that's the dollar figure that we're looking at there. So for twenty twenty five, we're looking for Mary to finally join the capping out of the twelve percent tax bracket at around ninety six thousand dollars or so.
Okay, all right, what other kinds of changes and again maybe not necessarily brackets, but what other kind of changes can people anticipate in twenty twenty five.
It's just the biggest thing in twenty five is going to be just a dollar amount of going up for a little bit. But the biggest thing is that this is the last year to really take advantage of those lower tax brackets.
So about how you do that? Can we talk about that lance?
How do you get so one of the best things that we're looking at. Larry and I were just meeting with a client this morning is that, hey, they're going to have these bigger brackets, so just because of their income, they were able to take out an extra six thousand dollars tax free. The client was looking at us like are you are you kidding at this? And it was like, this is how the numbers work out, and we keep
looking at it. Would you rather have six thousand dollars tax free or would you have would you rather pay a ten percent on that six thousand dollars? And of course the answer is no, I'd always rather have a tax.
Free So when your clients are coming in, just walk me through a little bit of what your first off that. Let me start with this. When clients are coming in and a Larry, I know you feel really strongly about this. You're hoping people will sit down with Lance and other members of your team to make sure that they have a tax plan and that they're not just getting their taxes done.
Yeah before Actually, Kim, I'm gonna have Lance elaborate on that. When it comes to taxes, the response that we get is we're not getting any tax planning. We hardly even get a meeting with our guy or gal that does our tax preparation. We're more of it. We drop it off and pick it up and we don't even talk right. Well, what I'll tell you is that's not the attention, especially in retirement. The tax discussion, you know, albeit not fun discussions.
Although Lance has a lot of fun with these discussions. I will say he wants to make sure Uncle Sam doesn't get any more than their due but they need to be discussed.
You know.
He mentions our client Wendy, she had no single lady, she had no idea. She's working a little bit, she had no idea of her tax situation, and she's like, you mean I can take out X amount of dollars and not pay any taxes. Well, we work hard for every dollar we have. That's why tax efficiency and tax planning, especially in retirement, and that's where Lance loves to explain things.
Not that the listeners and their clients have to be the experts, but there's not a better compliment than when I hear, Wow, somebody actually explained it to me and took the time, and now I understand it way better.
Than I ever did. That's the compliment where we really love to hear.
So let's expound on that Lance and talk about, you know, the difference between dropping your taxes off and getting them done and a tax plan. Where would you start with, folks.
So I'll give you a great example of the clients that came in. They came into some inherited money. So normal thought process was, hey, they have to drain these accounts within five years. So they're just thinking, all right, we'll just take an even distribution every year. That would be just going in getting the taxes done. Nobody's telling them how to do anything different. Well, I sat down
with them. We actually kind of crunched the numbers, looked at it and said, hey, just because of how the tax structure is that we have the Tax Shuts and Jobs Act, we have these lower tax rates right now, I'm in twenty twenty four and twenty twenty five. You know, it actually makes a lot more sense from a tax respective to accelerate those distributions and taking the money out
more rather than doing the even distributions. And by doing this, we're actually going to save them over about thirty thousand dollars in taxes.
Yeah, that's real money.
That is real money, money that you worked hard for your whole life. So just understanding these tax breaks, understanding where your income's at, what buckets you should be drawing off of in retirement, you know, just don't do it randomly, which a lot of people do because they're not really thinking about which account to be taken out of.
It.
It's fourth quarter and we're having roth conversion discussions. If you if you're a required minium distribution age, make sure that you'd get that taken out here. And I would say by December first, if you inherited in iry, have you taken your inherited RMD out? Do you need to take some withdrawals here before the end of the year as distributions to maybe pad your savings and buffer your liquidity, or maybe just to fill up that twelve percent tax bracket.
These are the conversations that need to be doing that we need to be doing now.
Or you should be.
And Lance would have a test that you know, January through tax today he's doing tax preparation. We're doing tax prep here. The rest of the year is the planning stages. It's not just okay, we're taking the rest of the tax year off that. Now's the planning which leads to successful tax preparation without the surprises. Oh my goodness, we owe it five thousand dollars a game. How about you rectify the situation, fixed the problem so next year it isn't a problem.
Sure. Can you remind everybody we're talking about withdrawal and distribution, what's the age you said that.
It required for R and ds. It's right now seventy three.
If you're in eight years it's supposed to go to age seventy five, where all those pretext accounts you'll be forced to take a percentage. It's a divisor out every single year, and if you don't, there's a hefty penalty that nobody should be paying. So that's that timeline, and that has to be done by December thirty first. Our deadline in house here really is December thirteenth this year, just because anybody that leaves it to the end probably
is not going to happen. And also conversions, if they're appropriate, those also need to be done by the end of the year. So again important timelines here fourth quarter. But you should be getting the attention and having these conversations. It's as simple as that, sure and lance.
These are conversations that you really should start having prior to retiring.
Correct with some of the questions out there and some of the discussions that we need to have, it is prior to retirement so that we kind of know where you're b buckets are at. One of the things we kind of talk about is where is your money? Is it in a roth account? Is it in for one case, is an I raise? Are they in non qualified Because there's these different types of accounts. All these accounts have
different tax strategies related to them. That also we look forward to when do you need to turn Social Security on? What type of income do you need to have in retirement? So before you're actually pulling the trigger and saying yep, I'm retired today, you've already had these conversations going into retirement with a knowledge that yep, things are going to
be fine. And that's one of the things that we deal for tax here and then also with Larry just having with a financial perspective making sure that we do have the money available for it.
Sure. Absolutely, If you're listening right now and you're someone who maybe is dropping off your taxes and then picking them up and you've questioned whether you know this has been in your best interest, let me make a suggestion to you pick up the phone and make an appointment with the folks at Haven Financial Group. They will sit down with you, they'll look at your full portfolio, which will include your taxes, and that first conversation is free.
You can just come in and sit down and join some coffee, maybe a cookie, and talk about what it is that you're trying to accomplish in your retirement that number of six one two five zero four eight four zero zero six one two five zero four eighty four hundred. You can also go to Havenfinancialgroup dot com. When we come back, Lance is going to talk to us about some of the biggest mistakes that you can make when it comes to your taxes in retirement, mistakes that may
cost you a lot of money. You're listening to the Haven Financial Radio.
Show ready to find your financial safe haven. Your dream retirement is in reach. Don't go away. The Haven Financial Group Radio Show will be right back. Are you worried that your financial strategy might be missing something, Well, you're in the right place. Larryclvig is back and ready to help you find your financial safe haven.
Good morning again and welcome to the Haven Financial Group Radio Show. I'm Larry Kolvig, founder and CEO of the Haven Financial Group, with Lance Larson, Arian House, CPA, talking about taxes and mistakes to avoid Kim. People do make mistakes, and we want to avoid these mistakes. It's why we say forward thinking tax planning. So if you're listening, give us a call six one two five zero four eight four zero zero or visit us online at Havenfinancialgroup dot com.
So, Lance, let's talk about some of these mistakes that maybe folks certainly don't don't They don't make these mistakes on purpose, but the repercussions might be much greater than what they had anticipated. For example, not understanding how tax changes will affect you in retirement. That's got to be a big one.
It is.
So one of the big things in retirement is that we typically have a different, different breadth of funds that will give us different tax treatments. So normally, when we're growing up and working, all we're doing is we have a w two. We might get enough money that we can invest and we might get some interest and dividends
later on in life. Well, now in retirement, you're going to have pre tax dollars that you've been saving for, you might have a wroth account, you still have that non qualified account that you put money into that you've been investing in, and then you're.
Going to get Social Security.
Just those four are going to be typical for most retirees, and each of those four have different tax consequences.
Sure, so you really really need to check with a tax professional and educate yourself about those kinds of things. And so I think what I hear you saying is that one of the big mistakes you might make is notifying your tax burden.
That's one of the biggest things right there is an overreliance on just a pre tax account. If all you have is a four to one K or an IRA, then you're going to be stuck with that, and that's going to be your only income source. There's not going to be a lot of things you can do to help save on taxes because of the rules that they're set up for that that all the money you put in there, you got a deduction for that when you
first put it in. All the growth that's happening is all going to be taxable when you take that money out. So if you decide you need to have one hundred thousand dollars out of that IRA, well all one hundred thousand dollars is going to be one hundred percent taxable. So then that's what we kind of have to deal with there. So when you start adding in the other sources you have, such as social Security, well social security is going to be taxable based upon how much other
taxable income you have. Easy way to explain it, because it is a complicated formula to figure it out. I explained to people as saying that if you have no other income besides social security.
None of it is taxable.
If you have some other income besides social Security, some of the sociecurity is taxable. And if you have a lot of other income besides social Security, that a lot of the socialecurity is taxable, meaning about eighty five percent.
Okay, all right, And we talked about rmds, and Larry you spoke specifically about pushing it right to the limit and the deadline. So the whole idea here is that you don't want to get stuck with a large distribution. Correct.
Yeah, I mean the younger generation probably isn't not as aware of this because they're not putting as much in. But the generation we serve, which is planning for retirement and baby boomers, et cetera, they put a lot of money in pre tax type of accounts for retirement. And that's great, but until we get to that age where you have to start drawing it.
It's why in the early years.
Of retirement we see opportunities that can result. Maybe you haven't turned on social Security, you're delaying it, Maybe you're delaying on a pension, you have some leaner years of income, which creates an opportunity to do irate roth conversions if appropriate.
Maybe you have some stocks or equities non qualified that you maybe inherited, you've had for thirty forty years, and there's some big capital gains tax repercussions, but your income's low and you're not outside the twelve percent ordinary income tax bracket, which leads to zero percent capital gains tax. I like zeros when it comes to taxes. So these are the things we want to talk through, you know,
as it relates to four oh one ks. As we were talking, I was just thinking a lot of times people change jobs and they leave a four o.
One k behind.
Oftentimes we call that an orphan four oh one k, and they over time at consultants, I think of another they all of a sudden now have four or five four one k's that they're not even part of that job anymore. We do a lot of rollovers for a variety of reasons, simplification, consolidation, reduction of costs, keeping things more simple. Most of our clients like simple, still maintaining diversification. So if that's you, it doesn't have to be as
complicated as sometimes you're making it out to be. And in addition to as we're talking taxes, you know opportunities Like I think of Joe and Chris a few years ago in Lakeville in their mid seventies work work.
They had numerous rental properties, and they.
Sat down with us here at Haven Financial Group and Lance and they're about ready to They were ready to slow down and liquidate some of these rental properties. It was time, but there was major tax involvement, but there was opportunities. Lance strategically gets sat with him on several occasions, helped them minimize taxes significantly in a variety of ways, just by the timing of selling these properties, et cetera. In addition to on the investment side doing tax loss harvesting.
And they were unbelievably impressed at what you can do under the tax code if you just talk through some of these things, if you're going it alone and trying to do yourself. I'm all about doing yourself. Turbo tax some would say, is great software. But if there's complexity in other areas and you're talking retirement, keep as much money in your pocket rather than Uncle Sam who's not your favorite uncle, don't give as much to him as you really think you should.
Liance. What do you think when you are chatting with people over the course of so many years, what do you think is the biggest mistake that people make on a regular basis The singular biggest, probably.
The singular biggest one, is just not taking advantage of the full tax brackets at about these tax valleys. I like using the description of like filling up cups because people have they're really it's easy to visualize that, Hey, you have a small cup, you have a bigger cup, even a bigger cup, and you have a pitcher that's full of water, and you have that picture representing all of your income, and then each of these cups are
representing your bracket. Well, you're going to fill up the smallest one first, then keep filling it up, and then you finally get to a point that you're filling up that last cup and you've only filled it up a portional way. Well, every single dollar in that last cup is going to be taxed the same. So if you're going to be in retirement age and you're going to be forced to be in that twelve percent tax bracket
or twenty two percent tax bracket. Well why not take more money out in those brackets right there so to help save on future taxes.
Sure? Absolutely, And Larry, you, what do you think is the singular biggest mistake that folks make?
You know, I see those that are charitable.
If you're listing and you are charitable, Now you don't give charitably for tax reasons, but we know that it oftentimes open up avenues to give charitably and get the tax benefits. Maybe you have an influx of money in a given year, donor advice funds, qualified charitable distributions. There's things that people can do. And you know this might not be fun to look at, you know, to look forward in time to talk about taxes, it's never going
to be fun. But whatever your situation, you know, be proactive, not reactive. We'll look at your situation. If you give us a call, we'll create a strategy that works for the rest. For the rest of your retirement plan, all those retirement puzzle pieces should go to the same retirement puzzle And if you're missing some of those pieces, you might not going to You might be not on track to meet those goals, and those golden years may not be what you want them to be, so you have
nothing to lose. Six one two five zero four eighty four hundred.
And Lance, any parting words that you'd like.
To add, just make sure you know what you're doing with taxes.
I think those are good parting words, that's for sure. It's a constant changing situation as well. And you know, we as lay people aren't necessarily always on top of that, but the professionals at Haven Financial Group they are. The number is six one two five zero four eight four zero zero. Don't let, as Larry likes to say, your least favorite uncle Uncle Sam, take your hard earned money,
especially in those golden years. If you don't have a tax plan, or if you need to work on your portfolio for retirement, give Haven Financial Group a call six one two five zero four eighty four hundred. You can go to Havenfinancialgroup dot com. Lance Larsen, CPA, thank you sir very much for being a part of the show today. We're really glad you could pop in and thank you Kim absolutely Larry. When we come back, let's talk about a major expense in one's life and how you can
plan for it. That being educating your kids shall we do that or have you had enough of that as well?
I know I'm all for it. Let's talk about it.
Let's talk about college savings, and we come back right here on the Haven Financial Group Radio Show. Don't go too far.
We're gathering more important insights and retirement boice government. The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kolvig and Kim Karragan. Now back to the show.
Good morning, and again, welcome to the Haven Financial Group Radio Show. I'm Larry Kolvig, Founder and CEO of the Haven Financial Group. Feel free to give us a call at six one two five zero four eight four zero zero or Havenfinancialgroup dot com. Set up a time to come in and visit with us. Rings attached. There is no cost. You may find it extremely informative. We go
through the same proprietary process with everybody. You get to know us, We get to know you when we talk retirement, whether younger older in retirement, it's never too early to have the conversation.
So it's never too early to have the conversation that we're about to have as well, Larry. And that's one of the one of the really expensive periods of individuals' lives are those times when we're paying for our kids to go to college. And boy, you've got four, I have two and mine we're you know, four years, and then the next four years we had eight straight. And I know that you've had overlap. These are expenses that
I think we as parents are happy to pay. But people must be prepared for this because these expenses have gotten crazy.
Colleagues costs are through the roof, and of course I might be dating myself a little bit, but back when I went to my first four years at Bethel College, you know, way different than it is today, like all colleges are. And first of all I think is the mindset has changed a lot, you know, the younger generation, potentially enabling them the idea that parents should automatically pay for all of college. I think it's first to reflect
individually and personally. You know, my wife had and I had differences on this because I'm big into skin in the game. If you're going to go to college, you know, you got to pay for some of it yourself. You gotta have some skin in the game. Otherwise you just take it for granted. So I would say, set some clear goals upfront. Are you going to pay for a part of it, all of it? Can you pay for all of it? Are you going to damper your retirement by doing this? Is it the right thing to do?
Is it not the right thing to do in state versus out state? But just like in retirement planning planning for college, start early. Yeah, compounding interest, whether it's college or investments and retirement, the longer the timeframe, the larger, the longer it can build. By starting early, it can reduce the stress of oh, my goodness, where our kids are going in two years?
And you started early.
And maybe it's not you as the parents starting early that you could be, but maybe the grandparents, you know, if they're going to contribute or rather than give them some you know, some silly gifts or some things that there might not be any any real meaning to it, maybe it makes sense to hey, talk and communicate with grandparents or loved ones, say maybe contributing to a college plan, maybe college funds.
Maybe that is a good option.
But again, college is a major expense, and you know a lot of college graduates they leave with some serious debt and that's problematic as well.
Sure, absolutely, well, this discussion is relevant for I think this radio show for a couple of different reasons, and you've hit on them. The first would be that we as parents want to make sure that we are protecting our retirement not not you know, spending it on our
kids going to college. So that idea of starting early and saving early so that it doesn't get you know, to you're fifty years old and your kids are going off to college and suddenly you're taking you know, anywhere from who knows, from forty five to seventy five or eighty thousand dollars a year out of your retirement fund. And then the second part of that, obviously, Larry, is that there can be benefits for it seems for grandparents
who maybe want to get involved in this. So can you address and talk to that.
Yeah, First of all, some tools that people do use for college planning, you know, people five twenty nine plans. There's tax advantages and more flexibility with that we can be invested in. If you're younger, maybe more risk is relevant and that's fine because of the timeframe. So you've got five twenty nine plans. You got UGMA and UTMA type of accounts. They're less they're not as tax efficient. They might have flexibility, but not as tax efficient. And
it all comes back to the tax tax benefits. Just we're back to the tax conversation. You want to maximize those tax benefits, and there's state specific deductions. Maybe there's some other options would be tax free from the withdrawals, maybe the tax credits that are out there. Working with somebody they can point that out. But you know, I think of one the American Opportunity Tax Credit. You want
to maximize those tax benefits. And one that I think I think is probably the most effective for college planning is using the roth IRA for college planning, you know, a dual purpose, not only for retirement if it's not used, or education. So the roth can be very effective for that type of planning. But what I'm going to encourage the listeners to not do, do not sacrifice your retirement savings for college funds and college debt. As much as we want to help those kids out and loved ones, etc.
Don't sacrifice your retirement. You know, do you have to pay for all your kids college?
Now?
Any of the kids listening would say, Larry, you better say yes, but I'm going to say no, you don't have to, and again, retirement comes quicker. So I'm all about education, certainly, and we do lots of education. I encourage younger generations to be educated, but at what expense?
You know?
I see a gentleman in one of the grandkids of one of our clients from Elko Newmarket here not too long ago. He was twenty three, he was going into he went into the trades. Again, college isn't for everybody, and he was making good money. He was saving money at twenty three. We gave him some good advice and he was so appreciative. So I encourage again being proactive. Yeah, student loaner options, but you know, how does that factor into your overall strategy?
Can't it? Should it?
So really think these things through, but do not jeopardize your retirement for that.
Do you find, Larry, that a lot of your younger clients who come in, and I might be talking about folks in their laked thirties, are they worried about college savings? And do you help them set up plans?
Yes, some are worried, some are better planners, some have set aside the money others have not. And sometimes it's not because they did anything wrong. Life happened, they ran into health issues. You know, life's calendar doesn't always cooperate with our calendar. So sometimes, yeah, we got to be disciplined with saving and doing what we need to. But sometimes you know, it's out of our hand. So you know, sometimes we shouldn't be as hard on ourselves as we
should be. Hey, if you if you have the ability to help out with those colleges costs, great, set some goals start early.
But again, at the end of the day.
Don't put yourself into so much debt because I see grandkids and kids coming out of college with so much debt and then they have a hard time finding a job in the in the arena or where they what they went to college for. And that's not a good recipe either. So again, good decisions.
Absolutely, And I'm sure that you you have lots of grandparents who come in and say, I'd like to help with my grandchildren's education. You know, maybe their parents are not in a position to do so, and then I'm assuming you advise them as well.
Absolutely, you know, we're big into the education piece. We're not going to talk them from steer them into yes you should or no you shouldn't. But if it's important, here's the areas, here's the text, uh drama vacations, Here's what we think you should do if this is your goal, and again making sure that you're looking at all the options and you're getting the benefits from what you're doing, most personally and from a financial standpoint.
So, Larry, today, much of our show has been really about taxes. So in retrospect, I asked you this in the last segment. You know, what do you think of the biggest mistakes, the number one mistake that you hope people don't make? But overall, what is the message when it comes to retirees and taxes that you hope people will take away from the show?
The takeaway is, I hope they're working with somebody that is giving them the attention they deserve in all these retirement areas, not just a meeting once a year. Retirement is more to it than that. If that's all you're getting, you're not getting what you're paying for. You know, as it relates to all the retirement puzzle pieces, having a partner to lean on, and that's the biggest benefit with for those that work with Haven Financier Group, and I'm
sure others too to some degree. Is right now we have folks that are coming in it's Medicare annual enrollment from that that can lead to the tax discussions. It's fourth quarter and tax planning is so important and that could lead it into does ROTH conversions make sense? As a reminder to listeners, it is the fourth quarter. Time is of the essence to do these things. Do you need any withdrawals, any distributions? Again I mentioned earlier about rm ds, inherited rm ds, these things that need to
be done by the end of the year. Simple reminder that if you don't know, give us a call. Make sure you do know, because sometimes there's penalties and taxes associated with not knowing and putting all these pieces to the puzzle together. But I would say not getting the attention they deserve for what they're paying, and people should know what they're paying.
There should be no surprises. Today.
We encourage our folks that we work with and doubt pick up the phone when in doubt, set an appointment. I always say, there's no quote as to how many times we can get together. Getting together creates confidence and confidence can can lead to a very very fun and successful retirement.
Absolutely. Six one two five zero four eight four zero zero. That's the number you call to reach the folks at Haven Financial Group and you can set up a free consultation. Larry has reminded you this is the fourth quarter. Six one two five zero four eight four zero zero. You can also go to Havenfinancialgroup dot com. Lots to think about today, Larry.
Lots to think about soon the election hopefully is over. We'll have another retirement conversation here soon. Always going to be with you again. Six one two five zero four eight four zero zero.
Have a great weeknid you two Larry. Investment advisory service is offered through Guardian Wealth Strategies LLC, Haven Financial Group and Guardian and Well Strategies LLC are not affiliated companies, and investments involve risk, and, unless otherwise stated, are not guaranteed. Please consult with the qualified financial advisor and or tax professional before implementing any strategy discussed herein. And comments regarding as safe and secure investments and guaranteed income streams only
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