How millionaires can potentially save a lot in taxes, and how to help protect the assets you leave with your family and keep them in your family line long after you leave

For decades, we’ve helped most retirees preserve and protect their wealth and leave a legacy. In these tumultuous times, here are some potential retirement and estate planning strategies you can learn more about:

Concerned about potentially higher taxes in the future?

Our U.S. government currently has over $ 29 trillion in debt, you might therefore fear potentially higher income taxes in the future.1

If you have a substantial accumulation of IRA (Individual Retirement Account) it could be a “tax time bomb” that someone is going to pay taxes on in the future, whether it is you or your children after you leave. . With provisions of the Secure law, most children can no longer do a Stretch IRA because the funds must be withdrawn before the end of the 10 year period after the death of the owner of the IRA.2 So, one potential strategy that you may want to consider is a partial Roth IRA conversion.

If you were a farmer, would you prefer to pay taxes on small seeds or on mature wheat eight feet tall? Obviously, you’d rather pay taxes on pennies, not dollars, which is why partial Roth IRA conversions might make sense to you. You may be able to pay taxes now instead of paying taxes if your Roth IRA grows in the future.

Of course, everyone’s situation is different and Roth conversions create a taxable event, so you should always work with your accountant.

For more information I wrote an article on Kiplinger on 7 Strategies To Consider Now That IRA Stretch Is Eliminated which you can read here.3

How a donor-advised fund works to potentially save taxes

The goal of many people is to pay as little tax as possible, and each year everyone has to decide whether it is better to take the standard deduction or the itemized deduction. the standard deduction in 2021 for married couples who jointly deposit $ 25,100, or $ 27,800 if both spouses are over 65.4

If someone’s actual deductions, such as mortgage interest on a principal residence, property taxes up to $ 10,000, medical deductions (if more than 7.5% of your adjusted gross income), and donations from charities combine to be higher than the standard deduction it might make sense for someone to itemize their deductions.

However, for many retirees, the standard deduction is higher than itemized deductions.

What if someone is inclined to charity? Suppose that normally a person donates $ 10,000 to charity each year. If we took the standard deduction, there would be no tax benefit to making these charitable donations.

However, people might consider using a donor advised fund potentially reduce income taxes by donating several years of future charitable contributions in a single year.5 These can set it up in many brokerage houses and invest as anyone wishes.

For example, say someone chooses to donate 5 years of deductions, or $ 50,000 now in a donor advised fund, the good news is that it is possible to get a tax deduction for those 50,000. $ detailing your deductions this year.

What’s more, it is possible to donate $ 50,000 of valued stocks into a donor advised fund, then sell those stocks inside the donor advised fund and pay no capital gains. on this sale of shares!

Then for the next 4 years that person can take the standard deduction and donate $ 10,000 annually to the charity directly from the donor advised fund and start the process every 6 years.e year.

This could be a strategy to explore with your accountant.

Lawyers design dynasty revocable trust to help protect family assets and help conserve family line assets

The estate planning lawyers we work with set up revocable life trusts with provisions of the dynasty. This means that after a husband and wife leave, a rock-solid trust can be set up for a child, designed to help protect against divorce, creditors, and lawsuits. These trusts are designed to help protect property left to children and grandchildren.

Another potential benefit of these trusts is that they are designed to help conserve family line assets. After a child dies, trust funds left for that child do not go to that child’s spouse, those trust assets only revert to their children in the same bulletproof trusts. It also helps protect grandchildren from divorce, creditors, and lawsuits.

Also, these trusts usually don’t give grandchildren control over money at 18 or 21, but wait until they are at least 30, so they don’t make stupid mistakes early in the day. their life.

You can watch a video of one of the estate planning attorneys we work with and myself discussing Dynasty Advanced Estate Planning on Youtube by clicking on here.6

Concerned about the next recession?

Do you think the next 10 years in the economy will be like the last 10 years? We don’

We’ve seen this movie before: sky-rocketing real estate prices, sky-rocketing stock prices and we have our own ideas of how this movie is going to end, we just don’t know when. Some retirees may fear that they will experience another 2008 crash again and may seek strategies designed to preserve and help protect their wealth.

The following is the history of the S&P 500 over the past 20 years, and while the past does not predict the future, history rhymes:

Please note that it is not possible to invest directly in the S&P 500® Index; this measure is provided only as a measure of overall market performance. Standard & Poor’s: “Standard & Poor’s®”, “S & P®” and “S&P 500®” are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). The historical performance of the S&P 500 is not an indication of its future performance and is not guaranteed. This table is not intended to provide investment, tax or legal advice. Be sure to consult a qualified professional about your personal situation. This graph does not take into account investment costs, so actual results may differ from those shown above. The decline percentages shown above range from high of market to low of market with each drop without dividends. The percentage increase is from March 9, 2009 to August 30, 2021 without dividends.

If you want to know more about the current stock and real estate market which I call the “Central Banker’s Bubble”, watch my video on Youtube here.8

Make sure you’re not paying too much into your retirement plan

Fees can be a drag on your retirement portfolio, so it’s important that you don’t pay too many fees. There are 3 strategies that may incur fees, including financial advisor fees, mutual fund fees, and variable annuities.

Your financial advisor usually charges you a fee. These fees are negotiable and you may be able to reduce these fees from what you are currently paying. If your advisor doesn’t charge a fee, they will typically use strategies that pay them a fee from the strategies they choose because they need to be paid for their time. Make sure you know what your fees are and how your advisor is paid.

Mutual funds can be great because they can give you diversification, but some mutual funds have higher internal costs that others.9 It is important that you know what your internal costs are.

Variable annuities can have up to 6 different fees!ten So if you have a variable annuity or are planning to buy one, make sure you know all the facts before you buy one. To learn all about variable annuities, you can watch my video on YouTube on variable annuities. here.11

Learn more:

If you live near Boca Raton or Fort Lauderdale, Florida, learn more by attending an upcoming complementary dinner workshop at Ruth’s Chris or Abe & Louie’s Steakhouse. This workshop is best suited for people over 65 with between $ 500,000 and $ 10,000,000 or more in investable assets. Or you can contact us to set up a Zoom meeting with Craig Kirsner, MBA, and Sean Burke, MS, vice president, then call our office to register now at 1-800-807-5558.

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