Tax-Free Retirement Income with a Taxable Brokerage Account
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- เผยแพร่เมื่อ 18 ส.ค. 2023
- Are you looking for a smart and tax-efficient strategy to boost your retirement income? In today's video, we delve into the powerful concept of utilizing a taxable brokerage account to maximize your tax-free retirement income.
✅ Understanding the concept:
We begin by exploring the ins and outs of taxable brokerage accounts and how they can play a crucial role in your retirement plans. By keeping taxable investments in a brokerage account, you gain immense flexibility in generating tax-free retirement income that can significantly impact your financial future.
✅ Utilizing tax-efficient investments:
Discover various tax-efficient investment options that align perfectly with your retirement goals. We explain the importance of capital gains taxes, dividends, and other factors in selecting the right investments for your taxable brokerage account.
✅ Long-term estate planning strategies:
We delve into long-term tax planning strategies, providing valuable insights on how to navigate tricky tax estate tax laws to your advantage.
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ABOUT ME
I’ve always been passionate about personal finance, investing, real estate, and helping people find the freedom to live their life with purpose. But when my dad died in 2015, I tried to help my Mom find an advisor to sort out her finances. Instead of a helping hand, I found an industry of financial advisors dominated by glorified salespeople working on commission - pushing products that were not in my mother’s best interest. Or advisors with minimums that shut-out all but the ultra wealthy. Disappointed with the options, I took matters into my own hands and launched Foundry Financial, a wealth management firm with transparent pricing that specializes in helping provide clarity around money - so you have the confidence to make smart decisions.My goal is to help a million people retire without worry!
📅 THE BASICS OF RETIREMENT PLANNING
Retirement planning has several steps, with the end goal of having enough money to quit working and do whatever you want. Our goal is to help people master retirement and retire without worry.
Step 1: Know when to start retirement planning. When should you start retirement planning? The earlier you start planning, the more time your money has to grow. That said, it’s never too late to start retirement planning. Even if you haven’t so much as considered retirement, don’t feel like your ship has sailed. Every dollar you can save now will be much appreciated later. Strategically investing could mean you won't be playing catch-up for long.
Step 2: Figure out how much money you need to retire, The amount of money you need to retire is a function of your current income and expenses, and how you think those expenses will change in retirement.
Step 3: Prioritize your financial goals. Retirement is probably not your only savings goal. Lots of people have financial goals they feel are more pressing, such as paying down credit card or student loan debt or building up an emergency fund.Generally, you should aim to save for retirement at the same time you're building your emergency fund - especially if you have an employer retirement plan that matches any portion of your contributions.
Step 4: Choose the best retirement plan for youA cornerstone of retirement planning is determining not only how much to save, but also asset allocation. It can make a massive difference in your retirement plan.
Step 5: Select your retirement investments. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk. It’s often helpful to talk with an adviser to discover the right mix of stocks and bonds.
❣ SPONSORED No, this video was not sponsored.
⚠️ "DISCLAIMER:⚠️This is not financial or investment advice. This Channel is meant for EDUCATIONAL AND ENTERTAINMENT PURPOSE only. None of this is meant to be construed as investment advice, it's for entertainment purposes only. #retirementplanning #retirement #passiveincome
Have you ever considered using your taxable account for tax efficiency?
Thank you for this video. I don’t think nearly enough people in the TH-cam retirement space realize the advantages to long term capital gains tax rates.
Thank you VERY much. This is an eye-opener! ❤❤❤❤❤❤Liked and subscribed
Great video. I agree 100%. I am had a brokerage account for 40 years and have never taken a capital gain, although I do have some dividends that i reinvest. I do sell my losing stocks to take advantage of $3k per year loss against ordinary income. My pension and other income does not allow me to get into the zero bracket for cap gains but I plan on continuing to defer gains and my heirs will get a step up in basis and won’t need to liquidate the account in 10 years like they would with a Roth.
5his was exactly the video i was looking for.
Still prefer a roth especially if you plan to utilize a dividend income strategy and you don't want to worry about dividend type. That opens up a larger number of high dividend investments not considered qualified. BDC, REITS, CEF's etc. But this was a very insightful video
Thanks!
Great video!
Can you go over this concept and qualified dividends in a taxable account? Which funds/ etf would cover this?
Im looking at VYM versus SCHD also some S&P type vehicles... I see some years SCHD is non qualified. I want to see the most optimal way to make this work including other ETF's and mutual funds.
Thanks.
This video simplifies the complex world of retirement taxes. Using a taxable brokerage account strategically can be a game-changer!
Thanks! Yeah, I think a taxable brokerage can be a powerful tool.
Maxing out my roth ira and the most i can put into my 401k (no match boo!) Until my kids are done with college to max out the benefits they receive for college funds. Will start doing this once they're done with school. Very interesting. Thanks.
As a married couple filing jointly, I don't use a Roth ira, I plan to retire abroad in places where the Roth is not recognized. The taxable brokerage account is amazing. 120k of gains tax free a year
Taxable brokerage accounts are often overlooked and are a powerful tool.
Well, if I understand it correctly, if you have over 1mil in a brokerage account plus a traditional IRA and Social Security, you can donate 100% of the distribution from the IRA AND 100% of the social security to a charity and use it as a write off letting you withdraw a little more without taxes.
Interesting stuff; lends itself to this sort of question:
For a given retiree, what is the optimal % of funds in the (tax-deferred, tax-free, taxable) buckets ?
Thanks! It’s partially determined by your tax bracket during your working years and how easy it is to control your income post retirement. It’s such a case by case calculation.
Great video and on point. I have question and hope Kevin could answer. We retired last year 2023, beginning of 2024 we converted some amount to Roth while keeping ourself within 22% bracket. Does it make sense to increase our convertion to 24% upper limit bracket knowing celling is much higher result we can move much more amount to Roth? Basically the idea is to convert all/as much as we could within the "sweet spot". Yes, it will also increase our Medicare surcharge but I would sacrifice paying extra Medicare surcharge for the benefit of tax free in Roth IRA. Thank you.
I’d suggest you run the numbers the numbers. Lots of variables and hard to give a blanket answer.
Even Fed tax free the money may bump up the taxes on your social security check and your Medicare part B, Yes, No ? And as you mention some states DO have a cap gain tax
Qualified dividends
dude, you are great but i am still confused with the math. So you are saying that I made $25k and because of standard deduction of $13k, which LOWERS my overall after tax to $12k, i can now take $30 k from taxable account, and all will be tax free?? did I understand this correctly??
As long as you’re referring to long term capital gains - that should be correct. But you should talk to a professional before making any moves. I don’t know your situation, but that math is correct based on my understanding of your situation.
Plus, all this talk is in regards to FEDERAL taxes. Your specific STATE taxes is another headache to consider. Just take a look at what Jeff Bezos did - he moved from Washington state to Florida to avoid Washington state's tax on capital gains of his Amazon stock.
Can I use my social security income to invest in brokerage account?
Why couldn’t you? I just want to make sure I’m not missing.
@@foundryfinancial well, because I asked the brokage firm if I can contribute SS income onto IRA , they told me no, need W2 income, so taxable brokage account is ok? Can you do a video on the subject investing with SS income for people don't need it . Thanks
@kaiman5307 got it. Yeah, you can definitely invest social security money in your brokerage! It doesn’t require earned income like an IRA.
@@foundryfinancial thank you
At 4:45 you mentioned "not just in stock but in profit" meaning if you had bought $100k worth of stock and it went up to $212k and you sold it all you would still be in the 0% bracket long term capital gains after standard deduction and all married filing jointly? @kevinlum
Is that a question? But that’s essentially correct in the right situation.