Welcome to the Bogleheads chapter series. This episode was hosted by the pre and early retirement life-stage chapter and recorded July 29th, 2021. It features Sean Mulaney, a CPA, financial planner, and president of Mulaney Financial & Tax Incorporated. He also blogs at FITaxGuy.com. Bogleheads are investors who follow John Bogle's investing philosophy for attaining financial independence. This recording is for informational purposes only and should not be construed as investment advice. Now I'm going to speak about tax topics relevant. What are the most part to those ages 50 to 70? Those thinking about retirement and those beginning retirement. Now there's going to be some nuggets in there for all ages, right? Hopefully all of us, even if we're under 50 years old, are thinking about retirement. So we're hopefully going to get to ages 50 to 70. And there will be some things in there for those who are a little further along in their retirement journey. Again, my name is Sean Mulaney. Carol, Jim, thanks so much for the introduction. And I want to first of all say it's an honor to be presenting tonight. Really glad to have this opportunity to be in front of the Bogleheads group. Real honor to be here. And thanks so much to Carol, Jim, Miriam, the entire team for putting this together. I know there's a lot of work that goes on into it. So thank you so very much for that. Just a little bit about me and sort of my background there. Just, you know, we always do disclaimers, right? So this is for educational and hopefully entertainment purposes. It's not investment advice, tax advice, legal advice for any one person. But hopefully this gives you some knowledge. This gives you some resources and some more information and some more power. Let's see here. So doing a tax presentation every now and then can be a little dry. So I wanted to think about, well, what's sort of in the news and the tax world, especially as it applies to pre-retirees, early retirees. And to my mind, in this investing environment, it's capital gains, right? There are so many people out there right now with an old dog or cat in their investment portfolio. It did well. They essentially have the good problem, right? They have the problem of, years ago, I bought a stock or a mutual fund and that thing is shot through the roof. Oh, no, how do I access it, right? Because capital gains are subject to federal income tax rates of potentially 0%, we'll talk about that, 15% or 20% and that's today's rates. You never know what the future is going to hold. And then also for some of the higher income people, you're going to add on to that a 3.8% net investment income tax, right? If your AGI is over 200,000 for single perp people, 250,000 married filing joint, we've got this 3.8% net investment income tax to tackle. And then there's just the whole issue of AGI, right? As I'm sure most of you are aware, AGI is one of those things that really limits other benefits in the tax code. So maybe we're not even so much worried about this particular tax, but we're worried about spiking our AGI because of a potential capital gain. But we want to access that money and I just give you a very simple example, 1995, Candice purchased 200 shares of Acme Corp for $100 a share. That means her stock basis for tax purposes is $20,000. Today that stock has gone from $100 a share to $500 a share. So we're talking about $100,000 of total value and we're talking about an $80,000 capital gain, but Candice wants to access that. That's her money. How can she access that money in a tax efficient manner? And so there are exit strategies out there. I'm actually going to just leave off before I get into the ones that I tend to favor. I'm going to mention too quickly that I tend not to favor. And look, your mileage may vary, right? Because it's not my favorite technique. Doesn't mean it couldn't work in your specific circumstances. One of them is the like kind exchange, right? 1031 exchange, like kind exchange. However, it doesn't apply to Candice, right? Because it only applies today to rental real estate. 1031 exchanges can work out really well, but a couple of drawbacks. One is it's not really an exit, right? All it is is a deferral, right? So the idea behind a 1031 exchange is I have rental real estate property. I exchange it for another piece of rental real estate. It could even be something called a Delaware statutory trust. But all I've done is I've deferred the reckoning on that, right? So now instead of rental property A, I either own rental property B or rental properties C and D, right? It doesn't have to be one for one. It could be two for one or one for two. Or I own something called the Delaware statutory trust. There are issues with 1031 exchanges. And like I said, they only apply to rental real estate, right? So limited subsection there. The other potential exit is something called a qualified opportunity zone, right? So Candice could sell this stock and then roll the gain into something called a qualified opportunity zone fund. These are new to the tax law that came in in late 2017. And to my mind, they're not optimal because they are an investment product that is very designed around tax rules, right? They have to invest in certain assets in these qualified opportunity zones. And it's a very tax motivated investment.  So I don't want to spend any time on those. We could talk about those a little bit. Frankly, it's not something I believe I've ever recommended to a client. So you sort of see where I am on these qualified opportunity zones in the right set of circumstances, maybe it could work, but certainly not my go-to solution. But what are some things that I tend to favor? Well, the first one is something called tax gain harvesting. And you'll see why I favor this in a second. The idea here is that if Candice can keep her taxable income below $40,401 if she's single, $80,801 if she's married, filing joint, she can dispose of some of this stock and be in that 0% federal capital gains tax rate, right? So capital gains tax rates right now are progressive. And below these levels of taxable income, it's actually a 0% rate. There is a drawback on that. One, she's going to manage her taxable income. Not going to be available to everybody, but if she is otherwise low income, this could be a great way of slowly getting out of this stock in a tax-efficient manner. She does need to remember, though, she's subject to state income tax on that sale. Now look, if she lives in Florida, Texas, I believe there are nine states without a capital gains tax, not a problem at all. And in many states, it's going to only be a little bit of leakage, right? Because state income taxes tend to be progressive. So tax gain harvesting, if she's got the right level of income, could be a great answer, maybe a little bit of state tax leakage, but no big deal there. I like tax gain harvesting for two reasons, right? One would be I'm sitting on some appreciated securities. I want to reset the basis on them, right? So it could be a mutual fund I like. It has a gain. I just want to reset that basis. And if I can keep my income below these thresholds, fine. I just reset my basis. The other one is maybe more like Candice's situation. She's been in ACMI stock for 25 years. She doesn't like it from an investment perspective anymore. So she wants a tax-free exit, or at least a tax-efficient exit. So she starts dripping it out in terms of some taxable sales. Does this tax gain harvesting, manages her income. And then she reallocates into her desired stocks, bonds, mutual funds, ETFs, whatever it is she likes. So to my mind, there's the tax angle to tax gain harvesting, just resetting basis. Or it's, hey, I want to reallocate or get into cash in a tax-efficient manner. So that's tax gain harvesting. A lot been written about that. I myself have written about that. But you need to keep that income low enough. Another exit, and this exit is charitable gifting. This is for the otherwise charitably inclined, right? Charitable contributions are great, but they're a real expensive way to get a tax benefit if you aren't otherwise charitably inclined. And there are plenty of people, hey, I go to Mass every week. I donate to my church, or I have this charity I give to year in and year out. Or maybe I'm just looking for a one-time donation. Something really hit my heart. Something really pull at my heartstrings. I want to give it to them, give some money to them. This ACMI stock in Candice's case could be a real win from a tax perspective. And so what am I talking about? There are plenty of 501C3 charities today that will accept, appreciate securities as a donation. They have a brokerage account set up so they can accept them. I believe most of the common most popular brokerage platforms facilitate this. I myself have done this. And what you do is you just go into that account and transfer a certain number of shares to the charitable organization. And so what you're doing is you're taking this appreciated stock and you're making it currency to do something you probably would have otherwise done, which is make this charitable donation. So instead of sending $500 to her church, she just goes into her brokerage account, grabs, says, all right brokerage, send one share of ACMI, which is worth $500 to that charity. So instead of having to go into her checking account, she gets to make that same donation with the appreciated stock. What does she do from a tax perspective by doing that? One, the capital gain on that share of stock, forgiven. It's gone. It is never going to be taxed. And that benefit is not income limited. So Candace could be making $1 billion a year. Maybe she's some big movie star or whatever venture capital. I don't know what. But the capital gain is forgiven regardless of her taxable income, right? No income limitation on that. And then the second potential benefit, which is income limited, is she could take an itemized deduction for that donation, right? So there is a limit. You can only take a current year itemized deduction of up to 30% of your so-called adjusted gross income for donations of appreciated stock. And it may be that Candace, we're going to talk about this in a second in a little more detail. Candace may not be itemizing, right? That said, I think benefit number one is good enough, right? Who cares? Maybe she's taking the standard deduction. Maybe she's married, right? So if she's married filing joint, her standard deduction is $25,100 this year. And it might be a little higher if she's over 65 and blind and those sorts of things. But so maybe this is a $20,000 donation. Maybe she doesn't have enough taxes, mortgage interest, other donations. So she does an itemized, well, OK, that's fine.  So with or without benefit number two, I think benefit number one is powerful enough that she might want to do this charitable gifting. And like I said, in today's environment, I believe there are plenty of retirees that should just never donate cash to charities again. Maybe you do $10 at your grandchild's raffle or something. But for the most part, the serious charitable donations should be made with appreciated stock that you don't, for whatever reason, don't want to have anymore. One big caveat on this. Stock bonds, mutual funds, ETF securities with built-in losses never donate those, right? What do you do, right? So, hey, I'm sitting on Acme stock. It's got a $10,000 loss. I want to donate some of that to charity. Don't do it. Sell the Acme stock first. Pop that taxable loss. It may be limited, right? I'm sure every brand on this call is very familiar with the $3,000 per return limit on taking charitable deductions or taking capital losses against ordinary income, right? So maybe you create a big loss. It's deferred, but that loss goes on for perpetuity, right? So for the rest of your life. So you create a capital loss. Maybe you can't use it this year because of other losses, fine. You use it the next year, the following year. But a loss is a terrible thing to waste. So do not donate built-in loss stock or securities to a charity. Sell them first. Donate the cash. Well, all right. I don't want to donate directly to my charity. Are there other charitable things I could do with this appreciated stock? I call this planning technique the hyper donor advice fund because it essentially combines two planning techniques. Something called the donor advice fund, which I bet a lot of you are familiar with, with that first idea of skirting the capital gain by donating appreciated stock. So now what I do is instead of donating appreciated stock to a charity, I donate it directly to my donor advice fund, right? What I'm doing there is I'm sort of stepping up this game of charitable giving with a tax advantage, right? I'm avoiding the capital gain. So I transfer $1,000 worth of ACME stock to my donor advice fund. First of all, subject to that 30% limitation, I get that deduction potentially. And I avoid the capital gain on whatever I put into the donor advice fund. The donor advice fund will sell off that stock in most in all likelihood, and then you can redirect it to out to invest in, usually donor advice funds are a little more conservatively invested, but each brokerage will have a different investment menu for the donor advice fund. The donor advice fund is a great timing play. So what it does is it says, OK, I'm going to transfer some assets to the so-called donor advice fund. I'm going to take a tax deduction for the fair market value, what I put in, I avoid capital gain, and then I can donate to charities on my schedule, right? So maybe I have a big capital gain. There's, let's just say I have a stock position. It's worth, let's just say it's worth 20,000 and I have a basis of 10,000. I don't want to sell it and trip a $10,000 gain. So I just put it in donor advice fund. It's gone, right? I can never use it again, right? It can't fix my roof. It can't install a pool, right? So I've got to be terribly inclined. But I might be saying, look, I donate $5,000 a year to charity. Well, why don't I do this? Why don't I do the donor advice fund for 20,000 in the year 2021? Take that with other deductions as an itemized deduction this year. So let's say my other itemized deductions are $20,000. So now I take a $40,000 itemized deduction in 2021. And then in 2022, 2023, 2024, I get the standard deduction at 25,000 plus if I'm married and over the next four years, I donate $5,000 a year to the charity out of the donor advice fund. The charity's experience with me is not different at all. They just get $5,000 a year every year from me, right? Because people in real life, people rarely say, you know, I like to donate $5,000 a year to this charity. I'm just going to front load, do $20,000 a year and then not give them a penny for the next three or four years. People don't want to do that, right? So how do I optimize in this environment where I've got such a high standard deduction? What I want to do is I don't want to be giving $5,000 a year and it just goes away and I get my standard deduction. Why not take a bunch of money now, put it in the donor advice fund and then get a one-time tax benefit and then rely back on those standard deductions every year after that? That could be a great timing play and a great way to avoid capital gains. All right. Another one. So I had an AICPA conference this week and I will say in the advisor world and I'm sure in the client world where people are starting to get a little freaked out about future tax increases. I think it's very speculative and I certainly don't think it's going to be retroactive if it happens.  Maybe these are the golden days. Maybe I should just sell now at 23.8 percent federal income tax rate and be happy I bailed out then before capital gains rates increase. I think that's very speculative, so it is not my go-to technique. Look, every taxpayer needs to make their own decisions and I don't have a perfect crystal ball in the future. So, you know, I'm not going to speculate as to whether or not the tax plan is going to pass or not. But I certainly don't think it's a slam dunk, right? So this is definitely not my favorite way to go about it. But there are at least some people out there who are very worried about future capital gains tax rate increases and are looking to accelerate capital gains into the year 2021. Like I said, because it's so speculative, I don't like it.  But there's a second reason that I don't like it and it has to do with this. That tax may never come due, right? Look, I get it. Candice has an $80,000 built-in gain in her ACME stock. If she doesn't mind ACME, then maybe that tax never comes due. If she's staying up at night because she's worried ACME is going to drop 50 percent. Then, yeah, maybe she should just sell, get out, pay some capital gains tax or do one of these other techniques. But if she's OK with ACME or whatever this the built-in gain asset is as an asset, maybe she doesn't care, right? So there is the ultimate planning technique. And I'm sure most of you are familiar with this. This is the step up a basis of death, right? So this is something in our tax law that I think administratively makes a lot of sense. And what it says is, OK, at death, generally speaking, your taxable assets get a basis reset. Generally speaking, on the day of your death. And so what happens here is, let's say Candice dies and her heirs inherit the ACME stock, their basis when they go to sell it is the fair market value close of business, I believe, on the date that Candice died. And so generally speaking, if Candice's heirs inherit this ACME stock, and let's just say it was worth 100,000 on the day she died, they get it. You know, the estate closes out three months later. It's now worth like $102,000. They only have $2,000 of capital gains. So this is a reason not to sell these assets, because essentially this is not a tax that we ultimately know is due. It very well maybe do, but it will, generally speaking, go away. It'll go away upon your death. And so that is the ultimate tax planning technique is, look, you've got this tax planning opportunity out there.  But, you know, if you're only motivated by tax, then maybe you just let it ride out and get that built step up basis. A couple other comments on the step up basis. One is it's great with rental real estate, right? Because your heirs get to re-depreciate. So it's a great reason to hold rental real estate in a taxable fashion. Two, IRAs do not get the step up and basis at death, right?  And then three, you know, apparently this is a little before my time, but in the year 1976, they actually got rid of the step up basis and they brought it back real quick. So there was a year, apparently, and I got to do a little more research on my tax history, but in 1976, the step up basis went away upon death. Now, back then the computing power was much less. So it created nightmares because, you know, you would inherit stock or a house or whatever, and you'd have to reconstruct asset basis. Today, that's going to be a lot easier. But still, there's so many assets out there, particularly real estate, where I still think that would be a real headache. So, you know, we always have to think about, yeah, Washington's looking for some more money. But I think this one is a very popular and administratively sensible tax rule. So I think it's going to I think it's going to be around for a while. But, you know, don't take my word for it. You have to make your own decision on those sorts of things. So, yeah, capital gains, there are ways, like I said, to get out. But it's going to be an issue for folks right now. And then there is the ultimate out. This next one I think is just it's a great opportunity. You do need to have a high deductible health plan. So this high deductible health plan is a type of insurer of medical insurance. You need to have be covered by one of these things. And it needs to be your only health insurance, generally speaking. For the healthy high deductible health plan, I think is a really good coverage option. Not everybody has it, right? So there are going to be some, you know, in the audience where this is just not going to be an option. If you're on Medicare, no option, right? So you cannot have a high deductible health plan once you turn 65.  And that's I actually I've got a blog post. I say this all the time. You should generally be spending down your HSA in two situations. If you're in a dire medical situation or you are a elderly, dire or elderly, right? But we'll talk about, let's talk about building up our HSA and then spending it down, right? How do we build it up? Generally speaking, through our workplace, right? So we've got our medical insurance through our workplace. They offer a high deductible health plan. We like that as insurance for us. We should then maximize our HSA through payroll tax withholding, right? So the money that we take out of our paycheck to put into the HSA, not tax, it's excluded, right? That's fantastic. Not only is it excluded from our taxable income, it doesn't show up in our FICA income. So we don't pay FICA tax on that at all, right? We don't pay Social Security. We don't pay the Medicare tax on that. That's only if we're well above that one hundred and forty two thousand eight hundred FICA cap on the Social Security cap. This is only a minor benefit, but you still get that Medicare benefit. And if we're below the one forty two eight, we get a big benefit because we don't have to pay the six point two on Social Security on what we put in to our HSA. That's really cool. One caveat about that, though, it has to be through payroll withholding for this payroll tax benefit. You can just not do it through payroll withholding and write a check to your HSA. You take a tax deduction on your tax return. That's perfectly fine. But if you can do it through your payroll withholding and get that FICA tax benefit, I say, why not? So it's tax tax excluded on the way in, right? So we get a tax benefit the year we put it in. The tax, the investment income grows inside that HSA tax free. So HSA is a great place to have investment growth. And then if we withdraw it for qualified medical expenses at any time, it's tax free there. So it's tax free on the way in. It's tax free while it's in there. And then it's tax free on the way out. That's a really powerful tool. One thing for my fellow Californians in California does not recognize the HSA. Same thing with New Jersey. So in California, New Jersey, the HSA is a taxable account. No deduction on the way in and the interest and dividends and capital gains that are generated on your HSA taxable in California. So it's a little bit of a drawback for California and New Jersey residents. But again, you get this federal tax benefit, which is so powerful. So I still recommend them even for those in California and New Jersey. In most cases, right? Again, when I say recommend, I mean that in a general sense, it's not for anyone on this particular meeting. Well, OK, great. We're, you know, we work, we have our high deductible health plan. We have our HSA. We're building up this money and this tax sheltered account. Well, when the heck do I withdraw it? Right. You're saying it's tax sheltered. I should keep it in there as long as possible. When do I withdraw it? I would argue it's best to withdraw it at age 65 and later. A few reasons. One, we want to keep it in there as long as possible to generate as much taxable wealth, you know, tax free wealth as possible. But the second thing is the HSA has a time limit and it's basically the later of your death or your spouse's death. So let's talk about that for a second. And HSA can be left to a spouse. No problem just becomes their HSA. But what if I leave my HSA to my parent, my sibling, my friend, anybody, not my spouse, they can inherit the HSA. They'll take the money, but the money becomes taxable income in the year of my death and it's and it's also no longer an HSA. So an HSA is a really bad asset to leave behind. So essentially there's this sort of pressure. And we were talking about tax free estate planning a little later, but or tax efficient, I should say, estate planning a little later. But there's a bit of a time clock there. And so it's this delicate balance of, OK, I'm 65 versus how long am I going to live? Am I only going to live to age 70? In which case, I probably should start spending it in my late 60s. Or am I going to live to 95? And why am I going to start spending it down now? Right. In my late 60s, if I'm going to live to 95, I want to have it enjoy tax free growth into my 80s and maybe even my 90s. And then I'll spend it down. So there's a little bit of attention there.  You know, and then track it, right? Just track all your medical expenses. And then at age 65 and later, you reimburse yourself tax free for the weekend warrior injury you had at age 53. You're playing Frisbee golf, spraying ankle, $300 medical bill. Keep that, you know, Google sheet, whatever you got to do. To keep a record of all that. And then, bam, in your 60s, 70s or 80s, reimburse yourself for that old medical expense. Fantastic tax free distribution of your HSA. That's that's some nice little tax planning. And generally speaking, before age 65, if you're not in a dire situation, just let the money grow in that HSA. HSAs also can pay Medicare premiums that generally they can't pay Medigap premiums, but they can be used to pay Medicare premiums tax free. But then this becomes, well, wait a minute, do I really want to pay my first and second and third premiums out of my HSA? Maybe I want to just keep records, right?  Just keep these records and then reimburse myself in my 70s or my 80s for my Medicare premiums from my late 60s and early 70s, right? It's this is a bit of an art and more than it is a science. We don't, you know, we we neither know the time nor the place, right? So we got to be a little artistic here. And then, you know, I've mentioned some of these concepts here. Definitely started at age 65 to let that tax free growth accumulate. And then, you know, when exactly at it after age 65 is really going to depend on your circumstances and just how long you think you're going to be around. And basically, HSAs are great to leave your spouse. They're actually a good asset to leave to a charity because the charity ain't going to pay a dime of income tax on it. But it's not a good asset to leave to anybody else because anybody else and the other individual is going to your estate, a trust, they're going to pay income tax like crazy on that thing. So leave it to, you know, generally speaking, leave it to your spouse. You don't have a spouse. Well, look, if you have someone in your life, you just need to leave money to find. But if you, you know, if there's a situation where there's some optionality and you're leaving it to an heir who perhaps doesn't need the money as much and you have a charitable intention, the HSA is sort of where I look first for where to leave money. OK, Roth conversions. This is a real hot topic. And we're going to talk about Roth conversions while we're working and then Roth conversions once we've retired, right? So while we're working to my mind, there are two big planning techniques, right? While we're working, the first planning technique is the so-called backdoor Roth IRA. This is the two step transaction, right? So we do two independent steps. The first step is a non-deductible contribution to a traditional IRA. And then the second step, I like to do this in the following month. The second step is we convert the money. We contributed to that non-deductible traditional IRA to a Roth IRA. And we do this, though, generally speaking, only if we have no other traditional IRAs, Sep IRAs and simple IRAs. That's a big thing here, right? So I like to say the backdoor Roth IRA is a great planning technique, but it's profile dependent, right? For those of us who make too much to make a direct contribution to a Roth, we do this backdoor Roth IRA. But if and only if we have no other traditional IRAs, Sep IRAs and simple IRAs, and when do we determine whether we have that? It's by 1231 of the year of that second step, the Roth conversion step. If we have other traditional IRAs, Sep IRAs or simple IRAs on that December 31st date, most likely our backdoor Roth was not a smart transaction. We're pay some tax on it, not the end of the world. And the big thing I like to say is get clean by 1231. So if we have other traditional IRAs and we want to do a backdoor Roth, move those out in a direct trustee to trustee transfer to our workplace retirement plans, our 401ks, 403Bs. But we only do that if we like the investment options inside those plans. If we do great, it's a great way to get clean. The other thing is the trap for the unwary. I do my backdoor Roth in January, right? New Year's Day, I make my 6,000 or 7,000 contribution into my non-deductible IRA a few weeks or at the end of the month or beginning of the next month, February, I do my conversion step. Great, backdoor Roth IRA isn't this great? Oh, but wait a minute. In September, I left my job in October. I ruled my old 401k to a traditional IRA. That creates a problem for your backdoor Roth, because at 1231, you're going to have another traditional IRA. I've blogged about this, so you can go to my Fight Tax Guide, FightTaxGuy.com blog. I've written about it. So that's the first Roth conversion idea for the working. The second one is the so-called mega backdoor Roth. This is using your workplace retirement plan to make after tax 401k contributions. And then shortly thereafter could be automatic. What you do is you convert the after tax contribution into the Roth 401k or you roll it to a Roth IRA. Great little planning technique. The thing about the backdoor Roth and the mega backdoor Roth, you need to think about it is that the choice is I either invest that money in a taxable brokerage account or I invest in a Roth account. This is not a deduction versus Roth traditional versus Roth question. This is am I going to invest that money into a brokerage account that I'll have a 1099 that will have interest dividends and later capital gains taxes or can I get that money in the Roth? Right. So generally speaking, for those who make too much backdoor Roth IRA is a great thing. The mega backdoor Roth has no AGI limits. So you can be at the lower end of the income spectrum. You can be Patrick Mahomes. You make whatever Patrick Mahomes makes $40 million as the quarterback of the Kansas City Chiefs. If the Chiefs 401k has this option, he could do the mega backdoor. OK. Well, all right. That's like the mostly non-taxable Roth conversions while working. If it works for you, great. What about while I'm working? Right. So I'm working and I have an old traditional IRA. Should I do Roth conversions? And I'd say in many cases for the quote unquote early retiree, I'd say no. Right. The idea would be, look, if you're going to be an early retiree and I have an old traditional IRA and I'm going to have to be fully taxable on the Roth conversion while I'm working, I probably should hold off. Now, you know, your mileage may vary, but I would generally hold off because there's going to be this opportunity, hopefully in early retirement, and I'll let you define that. You're hopefully going to have artificially low taxable income. And so why not do those Roth conversions while you have artificially low taxable income as opposed to nap? So that's Roth versus traditional while working. Now, while we're retired, OK, now we're retired, hopefully early, but you know, we'll say, but if now, if we're retired, the planning changes in terms of, you know, Backdoor Roth isn't on the table anymore. Mega Backdoor Roth isn't on the table because we don't have earned income. So don't worry about that. Those are off. But what we can do is we have old 401k, old IRA, we can do Roth conversions that are fully taxable. And we have two goals here, right? One of them is just the artificially low tax rates, right? We're before age 70, so we don't have any. And maybe we're delaying Social Security, hopefully, right? So we may not have much taxable income. We have a little bit of interest, but we know it's a low yield environment. So low dividends, low interest. So you look at our tax return, and it looks like at least initially that we're poor. All it is is that we're living off assets and we're not generating a lot of traditionally taxable income. So we take advantage of the progressive tax rates, right? So we do Roth conversions where our income is maybe only taxed at 10 percent or 12 percent for federal tax purposes, maybe even 22 percent or 24 percent. Right? So that's the first goal is just to take advantage of the luck of the draw before age 70. We're not getting Social Security. We're only getting a little bit of interest in dividends. Let's throw some Roth conversion income, move money from our traditional account to our Roth account, where it's tax free while we're at a low tax rate. The second thing we're trying to do is at age 72, you're probably aware you have to take taxable required minimum distributions from your traditional IRAs, traditional 401ks, 403Bs, etc. So we want those to be lower, right? Because if we can get that money from the traditional side of the ledger to the Roth side of the ledger, we're going to have lower RMDs in our future. We're happy with that outcome, right? The exercise here is to right size those conversions. People sometimes don't understand this. You can convert a dollar or you can convert every dollar or anything in between. Right? There's no there's no income limit on the ability to do a Roth conversion. Everybody, every American with a traditional retirement account can do a Roth conversion regardless of their income, but you want to right size it, right? And this is a subjective exercise, right? Because you have to coordinate, well, how much tax do I want to pay now?  Somebody's paying tax on this IRA at some point. And I only want to pay so much tax today. Maybe maybe I'm, you know, I might be thinking, boy, they're going to raise tax rates and my RMDs as I get older are going to start killing me. So what do I care? Twenty four percent go for it, right? Other people are going to be a little more conservative, right? This really does depend on your circumstances. So that first bullet, marginal and federal, marginal, federal and state income tax rates so important to consider in terms of whether you're doing these Roth conversions could also be, hey, I live in California today and in three years I'm moving to Florida. Well, maybe I want to hold off a little bit because maybe I don't want to hit California income tax. I want to hit Florida where there is no income tax, right? So there could be plenty of considerations in this regard. And then the other thing to think about is coordinating with tax gain harvesting, right, tax gain harvesting, which we talked about earlier, is dependent on keeping my taxable income low. Well, my Roth conversions could blow me out. So now my capital gains are tax of 15 percent. If I'm only motivated by tax and I can either do tax gain harvesting or Roth conversions, I'm generally going to tell you to do Roth conversions. And here's why. The tax on the traditional IRA is coming due period end of discussion. I might pay it during my lifetime or my errors are going to pay it. We'll talk about inherited IRAs in a little bit. Somebody's paying that tax, right? The government's getting their peace. My tax gain harvesting, on the other hand, maybe maybe that tax is going to get forgiven with the step up in basis, right? So if my only consideration is tax, I'm going to favor Roth conversions. Now, it might be that I have an investment allocation consideration. So I might have an old cat or dog. I invested in some tech startup years ago. It's got a huge capital gain. I want to tax gain, harvest out versus in my traditional IRA, I've got mutual funds that I really like. Maybe in that case, I say, no, I'm going to do my tax gain harvesting instead of my Roth conversions and get a zero percent rate on tax gain harvesting and get my old tech stock, which I'm a little leery about now, into mutual funds that I like better from an investment perspective. Right. So this is a tax planning presentation. And of course, no investment advice in this presentation, but we always have to consider all sides of our financial life. And this is where tax and investment really can intersect. Another thing to consider when we're doing Roth conversions is the Affordable Care Act premium tax credit. This is if you're on an ACA plan, right? So maybe I'm on try care or have other private insurance. I'm not on an ACA plan. Maybe I don't care about the premium tax credit. What you want to do is think about without Roth conversions, do I qualify for a premium tax credit? And where this really is going to come into play for a lot of folks is in 2023, where you get a premium tax credit up to having adjusted gross income of 400 percent of your federal poverty level.  So this is, you know, it's something to consider, you know, in terms of managing your tax bill income so that you optimize the premium tax credit, it only applies in those situations where you have an ACA plan. And by the way, once you go on Medicare, you're not going to have an ACA plan. So this is not going to be that big a deal for those already going on a Medicare. You do want to think about Irma, right? So that's the increase in Medicare premiums that results from increasing your taxable income. This is a bit of a marginal concern because, yes, this exists. And yes, if you blow through one of these, it's a little bit of a cliff. But it really only matters if you're right there. I believe the first Irma Ben point is one hundred seventy six thousand of adjusted gross income for a married couple. So, you know, you don't want a Roth conversion to ever take you from one hundred seventy five thousand nine hundred and ninety nine dollars over the line, right? But before the line and even within the line, it's a relatively modest increase. And it does go up progressively, but so it's something to consider, but I wouldn't be losing too much sleep over it. And then qualified, charitable distributions.  All right, qualified, charitable distribution for the charably inclined, another great planning technique. The idea here is you donate to charity up to a hundred thousand dollars a year with your traditional IRA instead of with your taxable accounts, your checking account, Roth IRA, and why do we do this, right? If we're seventy and a half and older, we can transfer up to a hundred thousand dollars every year from our traditional IRA and the money is not taxed, right? The whole point of doing Roth conversions is to get money out of traditional IRAs. So it's taxed where we want it to be taxed as opposed to later when we may not be able to afford that tax or that tax might be very high or whatever it is. OK, tradition, the cool thing about the QCD is it's a way to bail money out of a traditional IRA and not pay tax. Now, look, you've got to be charably inclined, right? But I might be saying, look, in my 70s, I'm going to give a certain amount to my church, no matter what, as we'll do it out of your traditional IRA, because what it does is it gets it fails that money out of that traditional IRA fully tax free up to a hundred thousand dollars a year. You don't get a charitable deduction for it. But who cares? You're getting that big standard deduction anyway. And oh, by the way, QCDs do a couple of things. They satisfy my RMD, right? So starting at seventy two, I'm going to have requirement distributions. Guess what? If my RMD from my IRA is just, let's say, fifty thousand dollars and I do a qualified, charitable distribution out of my IRA to my favorite charity for, you know, for fifty thousand dollars, I don't have to take my RMD. That satisfies it, right? It's a way to bail money out of a traditional IRA without taxes. And if I'm going to be given that fifty thousand dollars to charity anyway, might as well do it out of my traditional IRA instead of taking my RMD myself, paying tax on it and then giving money to the charity, right? So this is this is just a great idea.  If I'm going to be making some substantial charitable contributions in my seventies and eighties, right? And then a little disclaimer, just don't accept any renumeration or trinket from the charity that can blow QCD treatment. Very powerful planning technique. I'm very fond of it. Only applies if you are age seventy and a half, right? So but you need to be thinking about it before your age seventy and a half to right size those Roth conversions. All right. Tax-efficient estate planning. What are we talking about? What are we not talking about? We are talking about mostly income tax here. For most people, the estate tax is not going to bite. Now, that could change. I tend to doubt it right now. You know, your annual, your lifetime exclusion is eleven point seven million dollars. So most of us are not going to die with eleven point seven million dollars worth of wealth, hate to break it to you. But that said, pretty much everybody with any sort of substantial assets needs in the state plan and we'll talk about some reasons why. First thing is the elimination of the stretch IRA, right? The whole the idea in the past was, oh, I've got an IRA. My heirs have to take our requirement of distributions. I'm going to leave it to the two year old grandchild. He or she has to take a requirement of distributions, but it's based on them being two years old and then three years old and four years old. So they have to take a pittance out of it every year. And meanwhile, it grows either tax tax deferred for an IRA or tax free for a Roth IRA. They used to call that the stretch IRA. My grandchild could have like 90 years of tax efficient income because of the of the stretch boy isn't that powerful. Congress, you know, this was all over the news. People knew about the stretch IRA and Congress said, no, we want some more revenue. So here's what we're going to do. For most beneficiaries, we're going to we're going to get rid of these RMBs other than this one rule. We're going to say for most beneficiaries, you're going to now have to take the money out over 10 years. There's no requirement of distribution other than at the end of the 10th year following the original account owners death. But otherwise, it has to come out in 10 years. So there's no more stretch IRA. There's no more. I leave it to my grandchild and they get 90 years of tax deferral or tax free growth. Not doing that. You got to take it out in 10 years, whether it's a traditional or a Roth. To my mind, this makes Roth conversion planning for those thinking about their heirs even more impactful. There's not a lot that could be done to avoid this.  There are things that could be done. But, you know, if you happen to inherit an IRA, you now have a real financial planning issue that you either have to tackle. You need professional help because here's what you don't want to do. You don't want to inherit an IRA, a traditional IRA. Roth is different.  That's going to be painful. You don't want to plan your distributions every year. One little potential planning technique here is get the inherited IRA into a properly titled inherited IRA account in the year of the original owner's death. That is the function of giving you instead of 10 years, you actually have 11 years, the year of death plus the next 10 years to empty that thing out. It's a way to spread out the tax hit just a little more. So but anyway, so I will talk about IRAs a little more in terms of who you want to leave them to. Two important things from a tax and a state planning perspective. Beneficiary designation forms, payable on death forms, make sure at all times you have up to date on file, beneficiary designation forms, absolutely critical in terms of just the state planning in general and taxes efficient, the state planning in particular. And then revocable living trusts. I blogged about this. I'm a big fan of revocable living trusts in the right circumstances. And they are great for real estate. And they can be good for retirement accounts. But if and only if one of these two things applies, the intended beneficiary is a minor or the intended beneficiary has credit or protection issues, right? So if I'm 70 years old and maybe I'm a widow, right, I'm 70, but I'm a widow and or a widow were and I have three adult children, right, and they're in their thirties and forties and they're just regular people, they're competent, they don't work in high risk occupations. You know, they're just regular people. I'm not going to use or generally speaking, I'm going to try to not use a revocable trust to leave the retirement accounts. I'm just going to name them directly as the beneficiaries. But in certain cases, using a revocable trust can be good. For the real estate, though, the revocable trust can be very powerful. Think about your beneficiaries. Is it my old elderly parents? Is it an out of state beneficiary, right? Because, you know, you could leave the house maybe through a will or through a trust. The trust can sort of provide a lot of a lot of benefit to your loved ones when you leave it through the trust. Let's just say I'll just give you one example.  Your elderly parents live out of state. Now your elderly parents have to come into your home state where they don't live. They have to get your will probated so that they can get get the house and then get the house retitled all out of state. That is not a recipe for success. It's going to probably work a lot better if you put the house in the revocable trust and there are clear directions about how it should be disposed of. You can make your beneficiaries life a lot easier. You've got to work with a lawyer, right? This is not a DIY type thing, but I definitely think there's some real advantages to the revocable living trust. And then let's think about let's think about our type of account and our beneficiary, right? So let's start off spouses, right? Spouses are the law's most favored beneficiaries. They can inherit these days all types of assets and tax efficient man, right? So for the, you know, for most people, leaving most assets to the spouse in today's environment, I think, makes a lot of sense, right? So, you know, look for the ultra wealthy, yes, there can be absolutely be planning around spouses, but for most people who would not be stars of reality television, it's it's going to generally be spouses, the tax favored beneficiary and generally speaking how you might want to go. Let's talk about Roths, right? Roths are great assets to leave to any non charitable beneficiary, right? Spouse, they're particularly good for your upper income beneficiaries. So, you know, if you have a Roth IRA and a traditional IRA and, you know, and you've got one child who's a teacher and another child who's the quarterback of the Kansas City Chiefs, the Roth would be great to leave to the quarterback, the traditional would be great to leave to the teacher because the teacher is at a lower tax rate, right? Just some little nickel dime planning like that. Roths are not great to leave to charities. Look, if you want to be charitable, don't have me tell you not to be for tax reasons. But if you're looking to be charitable and tax efficient, why waste the benefit of a Roth on a charity, right? Most beneficiaries today have ten years of tax free growth with when they inherit a Roth IRA, even without the stretch, that's pretty good, right? If I inherited a Roth IRA, I can leave that in there for ten more years of tax free growth at the end of the 10th year, take it out. And now, yeah, yes, the money will now generate interest in dividends in my taxable brokerage account, but for ten years, it grew tax free. And I get a full step up and basis when it comes out, right? So Roth is a great asset to leave to, you know, to non, you know, don't waste that tax attribute on charity, right? Where you might want to start thinking about charities, the traditional retirement accounts, right?  And I have a Roth and a traditional leave the Roth to the adult child, leave the traditional to the charity. And traditions are great for lower income beneficiaries, because they pay less tax than your higher income beneficiaries. And then, like I said earlier on the HSA side, HSAs are great assets to leave to a spouse. And they're great assets to leave to charities, because those are basically the only two categories of beneficiary that doesn't immediately pay tax on your HSA. Everybody else is pretty much paying a lot of tax when they inherit your HSA. So just some things to be thinking about from an estate tax plan. Basically, a lot of what you're thinking about is your in your beneficiaries income tax situation that fights in today's environment, that fights much, much, much harder than any estate tax is going to fight for 99.9 percent of Americans. But here's one thing that should be on your radar. You know, and maybe in our audience, we have folks who are having parents now pass away, right? These things happen. You know, deaths come, you know, essentially we all have one tax planning opportunity in our life. It's our death and it's common. But one thing you do want to think about, if you know, if you or your parents, your spouse dies with any sort of affluence, even though they don't owe any estate tax, right? So they owe much less than eleven million dollars today. Today's exemption is eleven point seven million. You still might want to if they're married, you may want to file in the state tax return. That's a form seven or six. And the reason is this portability. So what that is portability? Portability means that if one the first spouse dies, the second spouse can get their lifetime exemption, right? So spouse one dies in twenty twenty one. He or she has this eleven point seven million estate tax exemption. They leave everything to the spouse so they don't even use these state tax exemptions. The surviving spouse can get that eleven point seven million from the first spouse. If the first spouse's estate files this form seven or six. So in the form seven or six is just going to report, hey, you know, Joe Smith died in February twenty twenty one. He had three million dollars worth of assets. He left it all to his spouse. Check a box. The spouse inherits an eleven point seven million dollar estate tax exemption. Thirty years from now, spouse two dies, right? This happened in my own life. My grandparents on my father's side died 40 years. Well, yeah, about 40 years apart, right? So these things happen, right? Who knows what that three million dollars is going to grow to by the time the next spouse dies, maybe it's 10 years, 15 years. And oh, by the way, they're thinking about lowering the estate tax exemption. It's actually in the law right now. I think in twenty twenty five or six in lowers. But it's only it's only to the upside to leave this the estate tax exemption to the surviving spouse. The way you do that, though, you can't do that unless the form seven or six is timely five. So just a little thought there. And then the last slide I've got is just, you know, when you approach your tax situation, I think more and more people are getting this. But it's just something that is sort of people haven't really locked into this. There's a real distinction between tax planning and tax preparation. And I think some people go to their tax return prepare. They say, OK, I'm engaging you to prepare my federal estate tax return for twenty twenty one and they expect that they're going to get all this tax planning. Well, I actually don't even think that's really that fair to the tax return prepare. It's just they're distinct exercises, right? Preparing one tax one's own tax return is it should be done correctly, but it's not tax plan, right? And then I do have a blog post here that actually talks about, hey, I just did my tax return for twenty twenty. Could I use this as a tool to help facilitate my own tax planning? This this little this blog post has some tips and tricks to take out your old tax return and use it as a springboard to do some tax planning. So I think that's it. I hope I'm going to stop sharing. So I hope we've got everybody still here. I hope that didn't hope we didn't lose too many in the battle. So, you know, Carol, I think there are some questions that have already come in. Yes, thank you so much for that presentation. That was very informative and just the kind of information we were looking for. Yeah, I'm going to read a few of the questions that we had that I'm pre-submitted from the R. P. P. Survey and then we'll have Jim and Mary read a few of the questions from the chat and then after about 15 minutes of that, we're going to open up to, you know, interactive Q&A where people can raise their hands. I think you did cover quite a few questions that, you know, people had pre-submitted like with Roth conversions. Somebody did ask discuss distribution strategies from inherited IRA subject to the 10 year rule, so as if you're the person that got the inherited IRA. Great question.   Don't use that exact language, but there are resources to find that. So you want to get that inherited IRA properly titled as an inherited IRA, you know, sooner rather than later. And then you want to think about your distribution strategies. And basically what you need to do is you need to say, all right, you know, I have a 10 year spread on this. What was what's my income this year? Did I sell a business that I have a big capital gain? Are there are there things that happen in my life where I'm going to have more or less income this year versus other years in that 10 year window? And by the end of the year, take that that right size, that distribution so that you get the distribution in those 10 years in the right, you know, marginal tax bracket. So you need to be thinking when once you've inherited an IRA with this 10 year rule, you now have a lot more tax analysis to do than most Americans, because you got to say, oh, I I sold a business this year. I had a big capital loss this year, whatever it is, and then take the right way. The one thing you don't want to do is just ignore the the issue on a traditional IRA. And then in your 10, you got to take all of it because that's going to be a tax time bomb. So. And OK, thank you for that. And now there are two questions on minimizing taxes that are kind of related. So I'm going to read them together. How to minimize taxes on a mostly fixed fixed income stream during retirement? And how do you determine a tax efficient order to withdraw assets in retirement? Yes, great questions. So on our fixed income in retirement, there's not a whole lot you can do around. I'm assuming the fixed income is like a pension, right? If that's true, there's not a whole lot we can do to minimize tax there. Where we need to then shift our focus is deduction planning, right? So that could be things like doing a donor revised fund so that we maximize our itemized deductions in one year and then go back to the standard deduction in later years, as opposed to just only being in the standard deduction every year, right? So deduction planning, that person might have a traditional IRA, so we might do like QCDs and those sorts of things. I will say fixed income is a little bit of a tough one because it's just a little more difficult. The other thing you could do is delay, right? So to the extent you can delay your pension, I tend to like that for clients because it does two things. One, it buys us some early retirement years where we can do tax planning like Roth conversions, and two, it gives us more longevity insurance on the pension. Now, pension is going to have credit risk, right? So the more you delay your pension, the more credit risk you take on. But there is the pension benefit guarantee corporation that's not going to fully replace your pension. But anyway, so that's that's sort of my thoughts on fixed income. And then, oh, order of operations in terms of retirement distribution. To my mind, it depends on when you retire, right? If you're retiring early, I actually like taxable distribution, living off the taxables early is something I tend to like because that limits us to interest dividends, capital gains from a tax perspective, and then we could do Roth convergence, right? So we sort of use the taxable accounts early in an early retirement as our life raft while we're doing Roth conversions.  And what we do at that point is we've got a lot more in Roths. And then we sort of toggle between Roth and traditional managing our tax rate. So that I will say this is one of those your mileage may vary. It really depends on your particular circumstances. I mean, it happens and I would say it's going to happen less and less. But it certainly happens that there are plenty of Americans who get to age fifty six, they're done with work mentally, maybe. And oh, what do you have? I have two million in an IRA or 401K and I've got my house and I've got ten thousand in my checking account. Well, you're basically going to be taking taxable distributions. We could talk about seventy two T. We could talk about separation from service after age fifty five. At age fifty five or after. I mean, there are things we can do, but you're definitely your planning landscape is a lot more limited. OK, thank you. Is there a better way to handle estimated income tax payments instead of just doing the hundred and ten percent, especially when there's uneven investment returns, which makes planning difficult? Yeah, so great question for for the year twenty twenty one, I'm actually very fond of the hundred and ten percent. Here's why for retirees. So 110 percent for the uninitiated right is as long as I make equal estimated tax payments, get 110 percent of last year's tax. So the twenty twenty tax liability in for twenty twenty one, I can win the lottery. No problem. I pay no. It doesn't matter. I can make all the money in the world in twenty twenty one. I make that hundred and ten percent of twenty twenty estimated tax payment. I'm I'm in like there's off to write a big check in April. No penalties. I like that for this year. Here's why last year. Think about it. I've seen this on clients tax returns. Dividends interest way, way down. Capital gain distributions way, way down and no RMDs. So we have a lot of taxpayers out there whose income was artificially low in the year twenty twenty, so let's do that hundred and ten percent for in twenty twenty one. And then we write our big check in April of twenty twenty two for twenty twenty one.  So 110 percent is not especially in a low yield environment where all right, maybe I gave the government a little bit of an interest free loan, but it's a low yield environment. It's not that bad of an outcome. So for this year, I really like the hundred and ten percent. And then in the future, the only alternative is the 90 percent or if you have W2 income, right? You can use your W2 to get those payments in. Yeah, there's no real magic bullet other than if I can really well estimate my 90 percent. OK, second question that I missed. No, no. Now, let me do one more from the pre submitted questions and we'll go on to the chat questions. The last one I have is do you have any suggestions for retirement tax planning software for consumer use? I actually don't. So a couple of things on this piece and I get it. Folks love analytical tools.  That said, if we're doing the right things, we don't need to worry about projections so much, right? Let's think about, you know, Bill Bell, I'll check the New England Patriots. Now, yes, they have some analytics, people predicting behavior and predicting what will happen on third down. But what they're doing is they're doing the right behaviors, the right preparation. You know, Bill Bell checks not in his office agonizing over whether the Patriots are going to be 14 three or 13 and four or 12 and five this year. Do the right things and the projections become a lot less meaningful. OK, thank you. OK, now we're going to move on to some of the questions that were submitted during the chat. Miriam, do you have any from the chat? Yes, we have one question from Ben. He said, I have a former employer, traditional 401 K, a personal Roth IRA, and also a simple IRA. Can I partially convert my traditional 401 K to the Roth IRA? Does the ownership of a separate, simple IRA cause any issue? So if you're looking to convert a traditional or traditional workplace plan, a 401 K to a Roth IRA, it's possible, but you're going to have to work with your plan administrator, right? So one thing you could do is if the plan has a Roth 401 K and you, you know, if it has a Roth 401 K and allows Roth conversions, which I believe they generally do, if they have a Roth 401 K, probably going to be easier to do an in-plan conversion, right? The other option would be, right? So you could do an in-plan conversion. You might be able to do a partial, all right, 401 K, send this to a Roth IRA. You'd have to look at your plan rules to see if they allow allow a partial withdrawal like that. Depends on your age, depends on their rules. The other option would be roll over the old 401 K into a traditional IRA. Now, you want to be careful about that, though. If you have employer stuck in there, that may not be a good idea. If you're relying on the separation from service at age 55, exception, that may not be a good idea. So you want to be careful about that. That's not just a slam dunk, but that could be an option as well. And by the way, the simple, maybe the other option is convert the simple IRA to a Roth IRA. Don't do that if the simple is only two years old or younger. But once that simple is over two years old, generally speaking, you can convert the simple IRA without a penalty into the Roth IRA. And to answer the question, no, having a simple IRA is no impediment to doing a Roth conversion. It's just a little tricky when you have traditional traditional 401 K into a separate Roth IRA. That's where it can get a little tricky. But maybe an in-plan conversion would be a potential answer there. Two points on that. Does could you explain the two years on the simple for those who may want to know that? And second, what about the pro rata with the simple IRA? Yep. So a couple of things on that.  It's just this is onerous rule out there. It's a trap for the unwary. So it's just don't like, you know, that is that's just annoying. If you had the simple for 10 years, don't worry about it. But yeah, so you don't want to be doing Roth conversions out of a simple, if it's under two years old, be careful there. And then the other question was the pro rata rule. And the answer there is pro rata rule. If you have a simple IRA, you generally don't have non deductible contributions inside a simple IRA. So there would be no pro rata. Let me actually, well, I take that back. So if we had a simple IRA and only a simple IRA, no sep, no, no sep and no traditional IRA, then there is no pro rata rule. Every dollar you convert or take out is just 100 percent taxable. But let's say we had an old IRA with non deductible contributions, the simple IRA would actually attract some of that historic basis. So I'll give you an example. You contributed, you know, 10 years, 5,000 a year to a non deductible IRA. So you have 50,000 in basis in the non deductible IRA. And that's now worth 100,000. And then you have a simple IRA that's worth 100,000. So 200,000 total, every dollar that comes out of a simple IRA, every 25 cents of it will be non taxable under the pro rata rule. So I mean, this illustrates how complicated this can get. But basically, if you only have a simple IRA, don't worry about the pro rata rule, it's just all taxable. But if you have other traditional IRAs or sub IRAs, the pro rata rule could come into play generally in a favorable way, it will track some of that old basis. And some of the simple IRA distribution or conversion will be non taxable. Could you explain in one or two sentences what a simple IRA is? That's not the same as a traditional IRA. That's right. Simple IRA is a employer sponsored plan, self employed or actual worker where it's an IRA that you can defer money into, I believe the limit is 13,000 right now.  So it's a combination. It's almost like a hybrid between a 401k and a traditional IRA. You need an employer, whether it's self employment or another employer. And it's 13,000 a year is the I believe the current cap and then 3,000 a year additional catch up contributions. It's only deductible. No raw symbols. And it's for like small employers where it's just an easy plan to maintain. Thank you. Does Jim have any questions or do you have any more from the chat? Mary, I'm not sure if Jim has any. One just came up about what are your thoughts about using a non qualified deferred compensation plan for high income earners targeting in an early retirement? Yeah, it can be a really good thing. I mean, those things usually have a 10 year payout. Sometimes I think I've seen a five year payouts. So the idea is basically what you're doing is you're moving income from a high earning year to what is hopefully a lower earning year. Right. I mean, it's really that, especially for the early retiree. Hopefully that's what you're doing. And generally speaking, I think for the very high earners, yeah, why not? Why not defer while you're very high earning? I mean, you may then come into some not so pleasant supplies, surprises with things like premium tax credit. But it may be. I mean, I've done the analysis. I think premium tax credit is like a 13 or 14 percent tax. That's what's coming to mind. If you blow through that, maybe you wouldn't have qualified anyway. And then it's not really a tax. So, you know, I have to look at any one particular deferred compensation arrangements and plan. The other thing you want to think about is creditor protection. Right. So this is this is a this is a bit of a it's not that big a deal. But, you know, on the deferred comps, sometimes there could be some issues if your creditor were to your employer was there or have a credit issue. They get sued for something. Theoretically, it depends on the nature of the plan. There are some plans where that could be an issue where the creditor could actually access it. So you just want to be a little careful with that. Understand what you're getting into. But otherwise, they can be good plans. You probably have time for one one more question from the chat. Is there a good one? Yes. OK, great. There is it is in the this is from. M. A. R. In the tax harvesting example, I guess that you gave Sean, does the forty thousand taxable income include the income from the sales of the stock? Yeah, that great question. And generally speaking, yes. Right. So it's not like, oh, I had no income, right? I have no interest, no dividends. I'm really retired. Oh, I'm in the zero percent capital gains bracket. So what I'm going to do is I'm going to sell. I'm going to trip a two hundred thousand dollar capital gain. No, you've got to manage the gain with all your other income. And that's why that is a bit of a governor on it. But look, if you're married and eighty thousand, you have ten thousand dollar capital gain, you're looking to wash away. You know, it can be very powerful. But yes, it is not a mechanism to be washing away five hundred thousand dollars. Maybe time for one more about one more. Yeah. Any suggestions for a consumer version of tax forecasting software to use to optimize the Roth conversion and other tax planning issues? Yeah. Like I said, I don't I don't endorse any particular product in that. You know, I think I mean, some of it is is quite mechanical, right?  By the way, 90 percent of Americans are standard deduction, right? So that's a great guidepost.  The other thing too is people sort of misunderstand this. It's this is an issue of degree, right? So what I mean by that is let's say I've got nine thousand dollars left in the twelve percent tax bracket and I think I have ten or twelve thousand left. So I do a ten thousand dollar Roth conversion. OK, the first nine is taxed at twelve percent federal and then the last one thousand is taxed at twenty two percent. Yeah, to my mind, that's not that big of a of a mist, right? OK, I went a little over some of it got into twenty two percent.


Good morning cyber traders welcome back on this lovely Monday Fresh back from the Thanksgiving weekend. Has everybody doing good to see you. Happy Monday, Donna Mariano good to see you Mark Judy. Look at these Andrea. Lita. Look at those. All right All the cyber traders welcome back and welcome We have a bunch of new traders that are starting today fresh on Monday like to thank you all just one very important thing I have to kind of tell everyone look listen and learn and make sure you talk to education advisor So, you know exactly what to expect what we're doing and what you're seeing right now is what we do here at cyber trade University, you're seeing something that we're trading in pre-market who got a little piece of the RSLS that's what I'm talking pre-market, huh? Audio sounds a little scratchy. Let me lower it. Maybe it's a little loud. There we go. How about that? Is that a little better? There we go Sound a little better Garth. All right good All right, so anyway Who got a little piece of this one? What a nice little move or the RSLS? So once again early bird gets the money and you could see right here in the pre-market The stock had a really really nice pop if you got in here, you know at the 830 coal everyone should have got in around 2 220 had a little bit of nice little triple top right there You could see it unbelievable iceberg orders over here. Look at those on the matrix great orders everywhere Great resistance levels stock had a nice pop till 3. I know a lot of you probably already done already But um, but the RSLS was great, but we're gonna get right back to RSLS Let's talk about what happened on Friday because didn't I tell you the day after? Thanksgiving and it's a great short day Historically, I go back to my journals if you're part of C2 for a long time you go back to your journals Very important you take very good notes like we teach you in class, you know to analyze what the outcome was how you did and so on You'll probably notice you've done pretty well On those days, you might have missed something probably last year But it's part of the education process of being part of C2 and be part of this team We have to work to get like a team and one of the big ones First of all, let's talk about some of the stocks that made some nice moves Let me fix my time frame over here so we can see a little bit better But but this one just had a great great run in the pre-market a lot of you guys were done just trading this stock right here TIS stock went from a buck 60 to 240 great great move right there the big winner The good stocks a lot of the gas stocks had some really good runners now. Remember we just own day trade here We also do some swing trading you could see oil has been taking a huge hit huge and you can see right here The stock right here went from 26 to 38 and it had a really nice push early in the morning It went from 35 to 37 which wasn't bad and then the was the DG AZ was another one right there that one just got Decimated it was a 500 dollar stock. You could see it great great short on a swing trade Which by the way, Josh is doing we're doing the workshop today on shorting now I just had it in my office We were going over your shorting going over the lesson planner and there's a couple of things I wanted to get into it because one of the things I felt which is very important. It's not about the strategy of shorting It's for you to understand What is a short and how do you get it and why does it work at sometimes and why it doesn't but but anyway You could see it regarding about that workshop. This was a great short on a swing trade But on Friday it was a great great swing on the long Stock has gapped up pretty nicely right now. You can see we're 54 to 71 great great move now It wasn't more of it was more of an ETF type of a market But overall we had some really good moves going across the board But but hopefully everyone spent a lot of money on Good Friday. I know we had our little Black Friday deal right there You can see it Black Friday 2018 we got some great deals on coachings. We got great deals for some introductory courses and obviously our On-site we ran a good promotion on that so guys definitely capitalize on that before it gets closed on today Now a couple of stocks that we want to check out going on to this morning. First of all, let's get back to that RSLS Now you notice RSLS is starting to back off right now You could see it's it's gotten more sellers out there than buyers. We got a couple of 3,900 share buyers that kind of make The case of why this stock is kind of holding right there at that price right below 240 We need to keep an eye on that but it is up 100% so far 89% it's hovering between you can see it right there on the net change right there But this is what we do here at Cybertrain University great move a lot of our money Most are always made in pre-market now another couple of the ones that made the watch list ABIL gonna throw this on the watch list I found this early it got that pretty nicely, but I don't know what happened. She started back off right now So I might just take her off I Mean it looks like we're gonna have some support levels, but she she had a really nice push in the morning I don't know what happened. She's really kind of backed off a little bit I might put that on a scratch, but she's up about 10% Jks is another one that's gonna make the watch list this one. It's got nice little moves got nice little foul still flag It's breaking higher highs Big iceberg orders right here on the offer at 10 55 and 10 50 Want to keep an eye on that which is obviously holding it back a little bit, but it's just up 13% 71,000 shares already traded so that one is moving pretty nicely now There are a couple ETFs that are moving to you know, I'm not a big fan with ETS But listen the market has been extremely volatile. We're gonna have a higher opening so far I told you this on Friday You guys did great last year in the market Go out there and spend money and you did and guess what it just wasn't us It was the rest of the country so whatever they're saying regarding me the economy this and that listen We know why the market's going down a little bit regarding about the February to everything else But the end of the day everyone made money everyone made money and everyone's spending money And I think it was funny, but they were talking about this big snowstorm So they're expecting cyber Monday should be pretty big obviously people are gonna be sitting on their couch You know and just buying stuff because they're not going anywhere. What else they're gonna do But everyone's making money everyone's spending money, which is good for the economy It's good for the United States and which is good for the stock market and you can see it I mean even Amazon's up pretty big.  Yeah, it's up Yeah, about 30 30 points. It was up a little bit higher than that But even though these stocks took big hits big big shoppings in the market. All right, so retail is doing pretty good Now I think that's about I think that ends it I mean, there was a couple of losers out here that took some big hits, but there were some ETFs You could see this one obviously we're not gonna be trading this one UGiz All these big all these stocks that are in here are all obviously ETFs. Yeah, TIS We know why it's down because it was up big on Monday. I mean on Friday. You could see here DZiz You know what is up the stock, you know, obviously the other ETF out there So there are a lot of ETFs that are in there, but not really a lot of the So-called stocks that we like to trade the less expensive less risk more reward now regarding about what we have listen It is Monday Listen kids go back to school people stuck traveling, you know a lot of cancellation flights So I'm not expecting to be an exciting Monday Even though the market is up a little bit big So sometimes it's gonna be a couple of good buying opportunities. Remember in our you know one thing We do here is not just a trade we do swing trade and I do tell you that you know Listen a lot of us are crying because we could have bought something at a good price We missed a rally, you know if it was the video if it was listen a lot of stocks took huge hits huge hits So listen it eventually There's a comes to a point where you're gonna get somebody's buying opportunity So you just can't always day trade you got to do some swing trades You know cuz you can't keep that money in there all the time So you got to be a little diversified, but you got to be a good day trader first to understand what to put your position in So anyway, anything we're missing that I did not call out anything. I'm missing any other stocks I think we got them all right Anybody looking anything else? All right, so guys if there's nothing else that we're missing remember There's always a new list that's gonna come out once the market opens up There's just basically what we're doing so far and really realistically this was The only stock that we really had our big rally in pre-market Unfortunately, we only got one stock up a hundred percent unfortunately But but we always find some new ones that will open up. All right, so remember busy busy week this week We got new members that have joined us welcome aboard make sure you talk to education advisor Hopefully you watch those videos that we told you to watch just look listen and learn and watch and and remember Don't judge us on these winners judge us on the losers and how few we have and how we control them That's the most important. I think that's the biggest issue a lot of people have is controlling losses Don't worry about the winners winners like this take care of themselves but we also have went we're doing a big workshop today on Shorting and also for a lot of you. This is the new cycle the courses start tomorrow phase one starts tomorrow So make sure you guys have registered and getting it most of your time Remember we do the courses every single month and they start start tomorrow. Okay guys. Good luck today. Happy trading and Let's make some money going into this open. All right and go spend some money


So for one, one. Thank you so much. We advise lay and lay only on TRP one and wait for my command how copy. And when I say shoot, just stand up.


Item number, SCP-893. Object Class, Safe. Special Containment Procedures. SCP-893 may freely roam the facility under the supervision of site personnel. Pre-existing instances of SCP-893-X are housed in nurseries at Site-17. Any new instances of SCP-893-X are to be immediately terminated. Tissue samples taken from SCP-893 should be contained within five minutes of extraction. Description.  SCP-893-X was initially discovered by... Shortly after having severed from SCP-893's fourth and fifth fingers on his right hand during a work-related incident at a construction site. The subject claims to have brought the fingers back to his home and put them on ice, neglecting to visit a hospital due to personal reasons. It observed his severed ring finger developing a clear fluid around its mass. Before taking on the form of what appeared to be a diminutive human fetus. Repeated testing and research have revealed that SCP-893's account is factual. SCP-893 exhibits very crude regenerative capabilities. Experiment log 893-452 is to be referenced for detailed information about the stumps. Any appendages or substantial amounts of living tissue liberated from SCP-893 undergo an accelerated process similar to clonal fragmentation. Smaller amounts of tissue produce less intelligent, shorter-lived clones, while opposite results are achieved from larger amounts of tissue. These instances, henceforth referred to as SCP-893-X, on average age and grow 20 times faster than a human being and are usually all but completely consumed in cancerous tissue and deformed by the end of their extremely short life cycles. 893-X exhibit limited intelligence, although many instances identify by SCP-893's name. Addendum 893-2805-1967 Research, Intelligence Assessment, Doctor Hello, how are you? SCP-893-245 appears to stare at the interviewer vacantly. Doctor, how are you? SCP-893-245... Tony... Doctor, repeat that please? SCP-893-245 begins to produce guttural noises, similar to laughter. Doctor, motions to security personnel. Nonsapient, recover the data expunged. SCP-893-245, pay. Doctor, bring in 893-352 as scheduled. Snippets from 893-003 agreement. Doctor, describe the incident. SCP-893... I didn't know what it was at first, you know? Them little blobby shits always scare the living f*** out of me. What was I supposed to do? I stomped both of them on my carpet, and when I saw their faces and eyes on my shoes, I pissed myself. Every f***ing time, man. I still got my fingers. I don't know how, but my mom says it's because we're all just... tough. Not the little ones, she means. Doctor, you don't seem surprised. SCP-893... Fingers grow back, duh. Lizard fingers grow back, too. It's animals, man. Doctor... SCP-893... No, do your s*** essay. My old job was balls. As long as I'm getting paid for this, man. Just make it so I don't have to feel it when you take the pieces, you know? Doctor, look this document over. SCP-893... Ah, just give me a pen, and I'll sign. Addendum 893A. His eye and one of his limbs aren't growing back anymore. There are depressions in some patches of skin that don't seem to be changing either. I understand the value of this resource, but I request that further sampling of SCP-893 bodily tissue cease.  Doctor... Request denied by Site Director... Lesson complete. If you missed the previous orientation, go watch SCP-892, everyone's spreadsheet, right now. Or for the complete course, watch this playlist.