Sep 17, 2022
What is a Qualified Plan? If You Have a 401K or a SEP IRA You Have One
BRT S03 EP45 (144) 9-16-2022 – Wealth for Life
Things We Learned This Week
- Retirement & Income Planning
- Qualified Plans: ie - 401K & Roth IRA
- SEP IRA for business owners, can defer 25% of income if setup correctly
- Tax Brackets - tiered system of 10%, then 12%, 22% up to 35% - with more income, pushed into higher bracket and you pay more $
- Tax Buckets (3) - Taxed (W2 income), Tax Deferred (401K, IRA), Tax Free (Roth IRA, Life Insurance)
Co-Host: Denver Nowicz, President - Wealth For Life
https://wealthforlife.net/brt/
https://twitter.com/denvernowicz
Denver is an advisor with nearly 20 years experience working with clients in investments and insurance, designing retirement plans with a combo of both. He takes us through different strategies for clients to get the best allocations for their money over the long term. It is the Combo Strategy of both Offense and Defense, the synergy of the mix, not ‘All or Nothing’.
Notes:
Tax deferral with 401 K, not tax savings
Advisor suggests 401 K, get immediate benefit
Vs. ROTH IRA (put 6.5 K) after tax at 59 ½ get money tax free
Tax Brackets – 10%, 12%, 22, 24,35
$430 K and above, taxed at 35%
If you move money to a 401K, save percentage on taxes, then pay taxes later in retirement.
Cap Gains 15-20% on investment income
Save 15-20K / year on taxes over 25 years = 400 – 500K or more
Retirement – expenses will be 80% of pre-retirement income, unless you make more $, maybe 90%.
If you earn $100K a year or more, taxes are biggest expense in retirement.
Build Tax Free Income – start now, have an Exit Strategy
Tax Buckets –
- Taxed – income, W2
- Tax Deferred – 401K, IRA pay taxes later
- Tax Free – ROTH IRA, insurance, Muni Free Bonds
Balance funds in each bucket – 20% Taxed, 30% Tax Deferred, 50% Tax Free
Combine tax buckets with income mapping - where money comes from in retirement
Business Owners – SEP IRA has high limits, put up to $61K / year.
Qualified Plan – owner has to balance with salary – 25%
Earn 240K – put 61K tax deferred in SEP IRA
Qualified Plans – has rules
High income, big SEP IRA, then pay 35% tax on all money, withdrawals and gains.
Tax brackets are broad and dropping a bracket not as easy.
RMD - Required Minimum Distribution
*** This Show is a Replay w/ Clips taken from:
BRT S03 EP03 1-16-2022 –
Retirement & Income Planning from SEP IRA, 401K, to Roth IRA + Tax Brackets to Buckets
Full Show: Here
More Info on WFL and Tax Free Matching: HERE
Wealth For Life Topic: https://brt-show.libsyn.com/category/Wealth+For+Life
Link to Taxes Show on 10/31/2021 w/ Denver: Here
Link to Offense / Defense Show on 6/6/2021 w/ Denver: Here
Link to Shows, Denver was a Guest: Here
Investing Topic: https://brt-show.libsyn.com/category/investing
More - BRT Best of: https://brt-show.libsyn.com/category/Best+Of
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