Join Al Smith as he unpacks the monumental legislative reforms encapsulated in the Big Beautiful Bill. This episode explores a multitude of changes ranging from tax cuts extensions to adjustments in Medicaid funding and provisions for rural hospitals. Listen to Al’s expert breakdown on how these developments could impact both personal financial strategies and the overall financial well-being of American families.
Welcome to Retirement Unpacked with Al Smith, owner of Golden Eagle Financial. You want a retirement plan that alleviates your fears about the future so you know your money will last. As a chartered financial consultant, Al Smith will help you find a balance between the risk and reward of the market and the safety of your retirement income. And now, here’s your host, Al Smith.
SPEAKER 03 :
Welcome to another program of Retirement Unpacked. This is Al Smith, your host of Golden Eagle Financial. I want to thank you for tuning in. And although I have had a program about this in the past, one of my earlier programs that talked about the Big Beautiful Bill, we were talking about it before it had passed, and it has passed, I believe the week of July 4th, as I recall. And some of these provisions are important. And even though this is the second show I’ve had on this, this has to do with taxes, how our federal government is spending their money, how they are saving some of the money that they would normally be spending. And these are things that I believe are important. And also, there is a… 2025 tax sheet that a lot of my listeners have requested and I have it saved on email. I can email you a sheet of that. It shows all the tax brackets and it shows the required minimum distribution. It shows how much income you can earn before the cost of your Medicare goes up. It has a little bit of information about Social Security. And I don’t work for Social Security, but this is public available information. And it has how much you can contribute into retirement accounts of various types. And if you would like this sheet, it’s only two pages. Contact my office. at 303-744-1128. Again, we’re talking about the Big Beautiful Bill, which was passed the, I believe it was July 3rd. Don’t hold me on the date, but it was the week of the 4th of July, which was President Trump’s goal in getting that done. There were a lot of folks who didn’t think he could quite get it done then, but he did. The most important thing is the extension of the 2017 tax cuts. The tax rates prior to those cuts were significantly higher. Extending those provides one of the biggest tax cuts, I think the biggest tax cut our country has ever seen. If the bill had not been passed, then by the end of this year, we would have reverted back to the 2017 cuts. And some of those brackets are significantly higher. And again, I’m not going to go through each of those individual brackets, but they’re much more favorable than those tax rates prior to 2017. One of the provisions they call SALT, that is state and local taxes, because some states, especially blue states, have very hefty taxes, both national state and local and so forth. And the new bill permits up to $40,000 to be written off your federal taxes. But after five years, that’ll be reduced to $10,000. And that’s with people whose incomes jointly are below $500,000 a year. And the folks who live in California, Illinois or New York and are paying hefty state taxes, this is something that’s important to them. And we’ve all heard about the big provision of the bill making tips as well as overtime. Tax-free. Now, that’s not infinitely tax-free, but the first $25,000 are tax-free, provided that the individual’s income is below $150,000. That’s for both tips and overtime. And I think that’s significant because I know a lot of people who work in fields where they may be called to work overtime. And they may get time and a half, maybe even double time, depending on the nature of their work and their union contract, if they have a union contract. And then when they get this additional income, if it pushes them into a higher bracket, the gouge of the taxation becomes pretty ugly. And the same thing with tips. Sometimes service people… have a slow night and the tips aren’t very much. And if they get a good night, they would hate to think of an enormous amount of that going to the federal government. But that’s what was happening prior to the passage of the big, beautiful bill. If you purchase a vehicle that was manufactured in the United States, now that doesn’t necessarily mean an American vehicle because a lot of vehicles, Subarus, Toyotas, BMWs, Mercedes, many of these are manufactured in the United States. You can write off the interest on that car loan if your vehicle is manufactured in the United States. There was also talk about making Social Security tax-free, and it wasn’t quite done, but 88% of the people after the passage of the Big Beautiful Bill, 88% of seniors will not be having to pay tax on their Social Security because of this exemption that was created in the Big Beautiful Bill. The child tax credit for folks, for those of you who have children, that’s expensive. You’ve got braces. I know when you have kids involved in baseball, basketball, soccer, all those kinds of things, if you have several children, that can get really expensive. Well, the child tax credit has gone from $2,000 to $2,200. That means for a family with four children, you can nearly have a credit of, well, $8,800. So that makes it significantly better for those of you out there who are trying to raise families. You may have heard about all the things they’ve been talking about, colleges and some of the protests and everything that are going on in colleges. A lot of those colleges have enormous endowments. I had heard that Harvard’s endowment was somewhere close to $50 billion. Well, they are taxing those endowments, and that goes anywhere from 1.4% to as high as 8%. And they use a formula based on the amount of money in the endowment per student. And I think that is more than fair because many young people they and their families are paying an enormous amount to go to colleges, and many of these colleges have enormous endowments. So I think there should be some fairness there. A lot of talk we have also heard. I’m a bit of a dinosaur. I get a paper, a newspaper. It’s called the Denver Post, and I read, read it from time to time and there’s a lot of provisions in there about with some of the Medicaid cuts some people are going to be losing money people who do physical therapy and things like that medical services for people who may be on Medicaid and there have been some cuts to Medicaid but most of those cuts have to do with people who shouldn’t be on Medicaid in the first place People who are not in the country legally are being taken off Medicaid. But there’s also some real positives. There’s $50 billion that was given toward rural hospitals because a lot of rural hospitals don’t have as many patients, and it’s more difficult for them to operate locally. profitably but people who live in rural areas should be able to experience good health care just like those of us who live in like the Denver metro area or something like that. They have increased the co-pay for people on Medicaid provided they are at between 100 and 138 percent of the federal poverty level. I apologize, I don’t know precisely what the federal poverty level is, but those folks will have to pay a $35 copay, which I think is more than fair because those of us who are making slightly more than the federal poverty rate, we may be having to pay $50 or $100 copay for various services. There’s also a work requirement to be on Medicaid for people who are not disabled, and that work requirement is 80 hours per month. That’s an increase from an amount that’s much slower than that. if you are in the country legally and you have a green card you will have to wait five years before you can get on medicaid and i think that’s more than fair people who come to this country with the idea of working and contributing to society shouldn’t move into the move to the country immigrate into the country and then Be immediately on the dole, as they call it. That’s what they used to call it many, many years ago. It’s like I can’t remember his name right now, but the guy from Ireland who wrote the book about his his youth. in poverty and so forth. And it was an exceptionally good day for them if they were able to have an egg. But I can’t remember his name, but it was a very popular book probably way back in the 1990s or 2000 or something like that. Also, Medicaid can no longer fund Planned Parenthood. I did not know myself that Medicaid was funding Planned Parenthood, and Planned Parenthood, as soon as that came about, they sued the federal government. But the point being is although Planned Parenthood does some things other than abortion, they are basically an abortion clinic. And I don’t think any of us, even if you are pro-choice, I don’t think it’s fair to have the federal government or taxpayers paying for people to kill their unborn children. Cuts in Medicaid, there’s a Medicaid tax. There’s been cuts in that. Also, states are now required to check eligibility because Medicaid is a program that is funded both through the states and federally. And the states are now going to be required to check eligibility every six months, which previously it was once a year. So some of these cuts into Medicaid are not really kicking people off the program. They’re just requiring additional accountability. And I think since our country has about a $37 trillion deficit, I think having a sharper pencil and being more accountable with how federal dollars are spent, I think that makes sense. I have more information on the big, beautiful bill when we come back from the break.
SPEAKER 01 :
Most retirement planners start with numbers, but Al Smith of Golden Eagle Financial starts with your story. At Golden Eagle, your first meeting’s not a sales pitch. It’s a simple conversation about where you’ve been, what matters to you, and where you want to go when you retire. Al listens intently, and then, using simple tools and the info you already have, he can show you how long your current plan might last if you were to retire today and not change anything. That alone can be eyeopening and expose any holes in your current strategy. It’s the foundation Al uses to help you build a plan that works for the long run to retire on your terms. No pressure, no jargon, just a clear picture of where you stand and how to make it better. Al’s been helping people retire well for decades, and he’s seen it all, the good, the bad, and the overly complicated. He’ll help you keep it simple. If you’re ready to plan your retirement with purpose, schedule a no-pressure visit with Al Smith. Go to the klzradio.com advertisers page to schedule your conversation. Investment advisory services offered through Brookstone Capital Management, LLC, Registered Investment Advisor, BCM, and Golden Eagle Financial Limited 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.
SPEAKER 03 :
Welcome back to the second half of the show. We’re talking about the big, beautiful bill that was passed the week of July 4th. It was about a thousand pages. And I’m trying to cover I’ve covered most of the tax situations that affect us and also some things about Medicaid and so forth. But there’s some other very significant components of the big, beautiful bill. I think one of the things we can be actually the happiest about is they have allocated $12 billion toward air traffic control. I believe that flying in an airplane is extremely safe. But there are also hazards that can be avoided and minimized if we keep the systems and everything up to date. I know recently they got rid of the program where TSAs required you to take off your shoes. I know that’s somewhat interesting, and they have sort of like – a couple of different tiers. You can get TSA pre and you can go through more quickly. But I think adding $12 billion to air traffic control really makes sense because I think they need to update some of their systems. And we started off this year with a couple of crashes. I know one I never heard anything about. One of them was a helicopter crossing into a highly busy air traffic area, and it was at night. And I don’t know precisely where the blame fell on that, but I think there clearly needs to be more money pumped into air traffic control. There was another one, as I recall, flying out of Pennsylvania, And it crashed shortly after takeoff, and I don’t think there has been any cause for that attributed. It was a medical plane, as I’m recalling, from Mexico. And I occasionally watch the Smithsonian Channel where they’ll have air disasters. And they point out that those can take years to investigate and determine the causes and so forth. But I think pumping additional money into air traffic control, I think, really, really makes sense because. I don’t know the precise number, but I believe millions of people fly every day. And it’s the safest form of transportation. But when there is a mishap or an accident, hundreds of people die. And we want to minimize that as much as possible. Student loans, we paused the cancellations that President Biden had initiated. And as far as student loans, I think it’s rather unfair to have people who were driving UPS trucks and FedEx trucks and welders and plumbers and electricians. I think it’s highly unfair to have those folks paying for other people who are getting advanced degrees in science or medicine or anything like that that are running up big student loan bills. I think that is highly unfair. If these people are going to run up their student loan bills, they should select an occupation where they can make a significant amount of income so that they can pay back their student loans. And so that’s one of the things is they paused those student loan forgiveness programs and they added some other things. They have also capped graduate student loans to $20,500 per year. And they have also capped those to $100,000 lifetime cap of student loans. And there is a lifetime maximum, and I don’t know if they had this before, but there is a lifetime maximum student loan amount of $257,000. Somehow, I can’t imagine getting your master’s or Ph.D. or something like that and leaving with over a quarter million dollars of debt. But because there’s, you know, there’s occupations and there are people who become entrepreneurs and. and can make significant income with or without a college education or with maybe just a bachelor’s degree. And if someone wants to have their education free, the military has the GI Bill, which will make college either free or nearly free, depending on where one wants to attend. I attended under the GI Bill. And it made the cost very easy to handle. I didn’t need assistance from my parents when I went to college after having served in the military. The Inflation Reduction Act, there are a lot of those provisions that have been rescinded as part of the big, beautiful bill. Some of the tax credits for electric vehicles and things like that have been rescinded. some of the money that was allocated for these charging stations some of that has been rescinded. As I recall the Biden administration had eight billion dollars allocated toward the building of some of these charging stations and they wanted them to be constructed with minority contractors in areas where it was very difficult to find minorities with the skills to create these charging stations, and much of that money went unspent, which is unfortunate for the people who bought electric cars. They want to be able to charge them so they can drive them a little farther than 50 or 100 miles from their homes. There was also an increase in crop insurance, up to $6.3 billion. And I think our current president is a friend of the farmers, because farmers have things, a very difficult circumstance when they have a poor year for crops or… That sort of thing, it makes it financially very difficult. The equipment they need to purchase, combines and things of that nature, are incredibly expensive. And unless someone is part of a huge corporate farm, they often end up sharing the use of this big equipment and things of that nature. The Big Beautiful Bill also requires BLM, the Bureau of Land Management, to make land available, inland land available for drilling. Back when, during Trump’s earlier administration, we were the biggest energy producer in the world, as I recall. And I think if we can return to that position and if our country can make energy available to European countries, that could be some leverage as President Trump tries to get Putin to come to the peace table. If he finds it difficult to sell his oil to Europe, I think that will be a tremendous bargaining chip when it comes to trying to end the war in Ukraine. NASA is receiving $10 billion, and I think that is money well spent. If you ever want to see some incredible images, go to the NASA website and look at some of the pictures that have been taken from the Hubble telescope. Some of those pictures are just incredibly beautiful. I know I downloaded a few of those and I made those into cards. I send cards to some of my clients and so forth. But $10 billion to NASA, given the amazing things they do with rovers on Mars and the space station and some of those things, I think that is money that is well, well spent. So… The big, beautiful bill is, like I say, 1,000 pages. And to reiterate, the most important thing is an extension of those 2017 cuts because that keeps our tax rates lower. And some of those who criticize that and say it’s tax breaks for billionaires, but that’s not really the case. About 70% of Americans are going to be paying less in taxes under the big, beautiful bill with the extension of the 2017 cuts. I think that’s incredibly important for all of us. And when people visit with me, a lot of what I talk to them about is, is not only income planning and retirement planning, but how much of that income do we get to keep? If you have some concerns of your own about how much am I going to be paying in tax in retirement, if that’s something that you haven’t really thought about, give my office a call because that’s normally part of the conversation I have when I sit down with people. My number is 303-744-1128. And it’s not only to talk about taxation in retirement, but if you’re quite a long way from retirement, and if you want to see if you’re on track, if you want to see if you’re saving enough, if you’re getting adequate returns on those savings. I have… software that I use that is very, very useful. And we can plug into that software when you would like to retire and how much money you think you will need to retire. And we can take into consideration the number you think would be appropriate for inflation. We usually use 2.5%. which is about what it is right now. I think it’s a 2.7 or something like that. So with this information, we can find out if you’re on track to retire, whether you’re in your 50s or 60s or even if you’re in your 40s. We can look and see how much you’re saving now, how well your assets are growing, and if you’ll have enough to retire eventually. in the future and maybe how much of that retirement income you’ll get to keep. Again, thank you for listening. God bless you. Let’s keep our leaders in our prayers, keep the folks in Texas in our prayers, and hopefully you’ll be here next week. God bless you. Have a great day.
