The conversation extends into the nuances of transitioning from work life to retirement, a major life change that demands careful consideration. Al discusses the transition paths available, from consulting post-retirement to charitable contributions and volunteering, ensuring both financial security and fulfilling personal development. Tune in for strategies to maximize your retirement income potential and learn ways to blend financial planning with meaningful post-career activities.
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.
Al Smith (Host) :
Welcome to another program of Retirement Unpacked. I want to thank you for tuning in. we could call loose ends. And some of those are things that need to be done before the end of the year. I know I’ve talked about these, but since we have only a few weeks remaining in the year, I will remind folks about them anyway. The one being… required minimum distributions must be taken care of before December 31st. And I would suggest that you don’t wait until between Christmas and New Year’s because financial companies, investment companies, insurance companies, and so forth, companies who hold IRAs get very busy with That time of year. So I would suggest that you take care of that earlier. And if you don’t have an advisor and you have an IRA and you need some kind of assistance with that, then definitely give me a call. That’s something I can help with. Also, as I sit down. and do planning for people. One of the things we often talk about are converting traditional IRAs to Roth. That’s something also that needs to be done before the end of the year. And it requires also some planning because when you convert a traditional IRA to Roth, then that becomes a taxable event. You have a tax-free Roth that’s going to grow tax-free and so forth. But when you make that transition, you pay tax on that traditional IRA all at once in the year that you do it. So what that usually involves is I will sit down with people and If they’re still working, we’ll take a look at their most recent pay stubs and take a look at what we think they have earned throughout the year. And I also have cheat sheets with tax tables. And we can look and see, well, will you still be able to be in the same tax bracket in the event that you convert a certain amount of traditional IRA to Roth? So we can estimate and estimate. Often people, even couples, can remain in as low as a 12% tax bracket and still convert a little bit of their traditional IRA to Roth. Now, people who are in a higher tax bracket, the next bracket from 12% jumps to 22%. But people with both a husband and a wife working, that 22% bracket goes way into a substantially higher income. So if a couple or an individual is already in the 22% bracket, they can probably convert a healthy amount of traditional IRA to Roth. Now, years ago, before the tax changes that occurred in 2017, you were able to write off charitable deductions because the standard deduction was relatively low. Right now, for individuals, it’s a ballpark around $13,000. And For couples, for 2025, it’s nearly $30,000. So the possibility or the likelihood of being able to write off charitable donations has been kind of minimized. But for those whose contributions exceed that amount, they can… Take a look at their own tax brackets, any charities that they would like to support. And in addition to actual dollar amounts, there are other things you can write off like mileage and things of that nature. that can be helpful as we get near year end. Now some other things to be thinking about as we’re getting close to the end of the year is a little bit of planning that you want to look at for the coming year. If you’re trying to save as much as you can for retirement, you might want to look at how much you’re going to be deducting, not deducting, but how much are you having taken out of your paycheck to go into your 401k. You may want to look at IRA contributions, spousal IRA contributions, and these are things you can sort of plan as we get near the end of the year for the coming year. And as I know, everyone does get busy at this time of year, but a lot of people’s work schedule actually diminishes a little bit. So this creates not only some family time, but some time to think, well, gee, what do I want 2025 to look like? And then I would ask that for myself, not only financially, but what things do I want to accomplish in this coming year? I know this sounds like a New Year’s resolution talk, but these are things that are also worthwhile talking about before the end of the year, because often that’s when we have time. We’re not completely back into the the work mode, so to speak. So take advantage of that time that you have remaining. And if it’s something that you would want to have some consultation about, if you’re not sure about some things about your IRA, if you’re not sure if you’re on track toward retirement, contact my office, 303- 744-1128. And there may be some circumstances or some things that you haven’t thought about that we can have a conversation about once you come into the office. And I know everyone’s circumstance is different. But no matter how unusual it is, there’s some solution for whatever it is you have going on. I had a conversation recently with someone who was fortunate enough to have an inheritance. And part of that inheritance was taxable and part of it was not. And there was an obligation by the platform where… The person had their existing account to withdraw a certain amount of money, but by changing the platform, we were able to minimize the amount that she had to take out which sincerely helped the circumstances. So contacting my office and taking a look at your situation can be extremely helpful. And again, I know everybody’s busy this time of year, but it’s also a good time of year to sit down and take a look if you are on track for the things that you want to accomplish in this coming year. Now, Those of you who are investors, the market seems to be doing quite well so far this year. There have been only a very small amount of corrections. And a lot of my clients, as well as people who have 401ks and so forth, have experienced good growth this past year. And if this is something that you believe you want to take advantage of also, then, again, contact my office. We’ll take a look and see if where your assets are positioned, see if they’re going to be in your best interest. Hopefully, you don’t have what I refer to as lazy money, money that’s not earning a very good return. And we all know what inflation has been like in these past few years. And if your investments and if your assets, if they’re not working hard for you, then inflation can have a much more significant effect. I know when interest rates were raised recently to fight off some of that. inflation. People were happier with higher interest rates. But when inflation was between seven and nine percent, five or five and a half percent CD rates don’t seem to quite cut it. And so I think it’s truly important to sit down and take a look at how hard your assets are working for you. And does that mean you should think about making some changes? And if that’s something that’s on the back of your mind, again, give my office a call, 303-744-1128. And if I’m not there, it goes to voicemail, but I answer my voicemails. rather quickly. I get in touch with people as quickly as I can, and that’s kind of how I run my business. I try to be there when people call the office. They’ll either reach myself or my office manager, and we’ll schedule a time to meet. Sometimes I’ll meet with people later in the day. A And I’ll meet with them occasionally on a Saturday or late afternoon, early evening, depending on people’s work schedule. But I think it’s important to have a partner as you move closer to retirement. You’re trying to accumulate wealth for your own retirement, possibly to help for your children’s education. or maybe some financial goal that you have in the future, and to make certain you’re on track, sitting down and doing some projections, a few calculations can be extremely helpful. And another thing I haven’t talked about that I will be talking about, especially as we get further along into the coming year, is people who are making that transition. A whole lot of the people who come into my office are making a transition from their working lives into retirement. And my earlier book, which is 18 holes to retirement, has a lot of good tips on that. And if you’d like to read about that, it’s a story of two people playing golf, a young man and another gentleman who’s about to retire. and he has a lot of changes that he’s been making in his life between him and his wife, and these are indicative of the changes and the choices and the decisions people make as they make that transition into retirement. Now, if people don’t make those decisions, until right before they retire, then that’s not always the best because that’s like when you’re kind of backed up against the wall, so to speak. So if you are a few years from retirement, there’s a lot of things out there that you might want to be thinking about. Many people still have pensions, especially people who are working for governmental entities. This is a major decision time when you get near retirement because people who have pensions have to decide, do I want the full single pension? Or if I’m married, do I want a survivorship benefit? And also many of the survivorship benefits offer alternatives. For example, the survivor can receive the full 100% pension of the primary worker. Or the survivor, which can be a husband or a wife, can receive maybe two-thirds or possibly even half. Now, some things to think about with regard to that kind of a pension decision are, are what other sources of income would my spouse have if I died? Another thing to think about is the health of the primary worker, because if his or her health were diminished and they have a shorter life expectancy, then it’s a very strong likelihood that the survival will receive an income that lasts for a considerable period of time. And after the break, we’re going to talk about a few more things that have to do with people making that transition from work to retirement. It’s a big transition, and the more planning and thinking about it that people do, the better off they’ll be. We’ll talk more about that right after the break.
Al Smith (Host) :
Al Smith of Golden Eagle Financial is your key to ending the year on track. You need to take your required minimum distributions from your IRA investments before the end of the year. And if you have more than one, Al will help you figure out the smartest way to do that. Also, if you plan to convert all or part to Roth, it must be done by December 31st. Al can work with you to determine the ideal amount to convert tax-wise. We’ll be right back. Investment advisory services offered through Brookstone Capital Management, LLC, a 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.
Al Smith (Host) :
Welcome back to Retirement Unpacked. And I’m going to beat these two topics into the ground until January 1st. Your RMDs need to be taken out before December 31st. And if you’re thinking about converting part of your traditional IRA to Roth, that also needs to be done before December 31st. If that’s something you need assistance with, call my office. At 303-744-1128. And we were talking a little bit about making the transition from work to retirement. And one of the things that’s interesting is it used to be, especially many, many years ago, people would work for a company for 25, 35, 40 years, possibly even longer. And then once they would retire, they would take their pension back when people had pensions and their Social Security and kind of right off into the sunset. But since that time, often people work for multiple employers. They may have 401ks, sometimes small ones, sometimes larger ones, that are with previous employers. And as people move from one residence to another, they may lose track of some of those old 401ks. And the state of Colorado, like many other states, has a large… for lack of a better word, of missing money. And that can be bank accounts. It can be 401ks. I don’t have the dollar amount, but I know it’s an enormous amount of money that is in people’s names that they may have forgotten about or the people may have passed on. and when that is not claimed after a certain period and again i apologize i don’t have the precise details but eventually that money will be the state of colorado will become the ward of that money so as people get closer to retirement it’s really good to take an inventory of where your resources are if you work for previous companies Look at those old 401ks and they can be if you used to work somewhere, those could be rolled into IRAs long before you retire. And also that gives you a lot more choices and investment choices. You can take an old 401k and you can move it into precious metals. The company I work with, Brookstone Capital Management, they even have an exchange traded fund there. that offers crypto. And as a general rule, I don’t recommend that, but it is available, and there’s a special disclaimer that needs to be signed in the event people like to move into crypto. People have made enormous amounts of money in it, and they’ve also lost enormous amounts. But again, as far as that transition, most of the thinking and most of your choices are going to be around crypto. You know, financial choices. Where do I want my 401k to go? How is that 401k, once I roll it into an IRA, how can I make certain that the income I can draw from that, how can I make certain that that will last as long as I do? People right now, I think it’s no secret that people are living longer and longer and And we also don’t know what the last six months or two or three years of our life is going to be like. It may be that if we need care, instead of living on 4,000 or 5,000 a month, it may cost 10,000 or 12,000 a month because of long-term care or memory care or something like that. So it’s good to think in terms of how would all of my resources be able to handle that kind of big expense. So a lot of things to be kind of asking yourself as you move into that. retirement from working full time. And a lot of people don’t do that where you just quit working one day and the next day you’re fully retired. There was a movie called About Schmidt. And it had Jack Nicholson. And the very beginning of the movie, he’s working at an insurance company in Omaha, Nebraska. The way they’re dressed and everything else shows the tremendous level of… There’s conservatism in that community, but he’s just sitting at a desk that has absolutely nothing on it, looking at the clock, waiting for 5 o’clock to come. This is his last day before retirement. But a lot of people make a different kind of transition where they will move from full-time to part-time depending on someone’s work. they may become a consultant. A lot of people who are in software or engineering or some field like this are able to retire from their primary employer and do consulting where they may work for 10 or 15 hours a week and make a significant income on their own schedule as a consultant or a contractor. and so forth. And I know a lot of people who work in various fields do this for a considerable period. And they find it useful because they can make a substantial income and sort of do it on their own schedule. Another really important thing is even if you’ve been blessed with a very healthy nest egg and you’ve been frugal and haven’t spent a lot of money, what is incredibly important is plan how you want to spend your time working. Once you make that transition into retirement, in order to get some joy or fulfillment out of your retirement, it’s wise to look and think in terms of how you would like to give back. How can you help those who are less fortunate? If you’re closely involved with your church, most churches have all kinds of different services. volunteer opportunities from being involved in mission trips that go all kinds of different places all over the world to assisting younger people as a tutor, people who have skills in math like engineers and so forth. They can be very helpful with high school kids who are having difficulty with their algebra or trigonometry or something. And for someone who is a retired engineer from Lockheed Martin, this would end up being relatively easy. There’s also lots of things you can do for folks who have certain disabilities. There’s a nonprofit here in Denver that specializes in taking children with disabilities on horseback rides. Obviously, very gentle rides and so forth. But the children and adults who have disabilities, they get tremendous enjoyment from activities like this. And nonprofits and organizations who do this kind of thing, they need financial help as well as volunteers. to take care of the horses, schedule things, and do all kinds of things to bring those bright smiles to people who wouldn’t ordinarily get an opportunity to ride a horse. And the same thing is true. A client of mine spent years as a volunteer at Winter Park in the disabled ski program. and they do great things at Winter Park for the disabled ski program. I’ve not personally been involved in it, but I’ve seen them on the slopes. I used to ski more often than I do more recently, but I used to see the disabled skiers, and they get an enormous amount of joy from what they’re doing. So in addition to… planning how you’re going to use your nest egg, think in terms of how you’d like to be using your time. Long before retirement, it’s a good idea to sort of put together a schedule of what you’d want your retirement to look like in terms of spending your time. There’s silver sneakers to maintain good health. Take a class with you and your spouse about cooking. Now that you have a little bit more time and you’re both not working, there’s ways of making healthy meals that you probably hadn’t thought about back when you were both working and not certain what we’re going to have for dinner. And that sort of thing. So a lot of things to think about as you make that transition into retirement. And if these are some things that are coming to your mind and you’d like to have more answers, contact my office. We’ll have a conversation, 303-744-1128. God bless you. Thank you for listening. And let’s continue to pray for the new leaders in our country and the folks in Israel. Bye now.
Announcer (Host) :
Thank you for listening to Retirement Unpacked with your host, Al Smith of Golden Eagle Financial.
