The following transcript has been automatically generated and is being provided as a matter of convenience: 

hi i’m john davis i’m a cff i’m a financial planner i focus on retirement and estate planning now my clients are people who are nearing retirement and those who are already retired now one thing i’ve learned over the years is that people need a unified holistic retirement plan what i mean by that is they have to coordinate all their assets it’s not just social security they got to look at social security they got to look at their iras their 401ks or pensions and they got to look at how all of these things are working together let me ask you a question did you know that social security is a million dollar asset well what do i mean by that it’s a million dollar asset because if you’re a married couple that’s what you can expect to receive in benefits over your lifetime and in fact if you’re a single individual you’re looking at about a half a million dollars so this is a really important asset one that you don’t want to you don’t want to get it wrong okay now because social security is so important if you contact me i’ll email you my 2022 social security mythbusters fact sheet you’ll get that and you’ll have all the facts that we’re going to discuss here today right on one piece of paper so let’s look at the top 10 myths about social security myth number one social security is going broke it won’t be there for me well this comes to us from the coffee shop gurus you know they all say get it while they’re getting is good because social security is going broke well here’s what you need to know it’s highly unlikely that social security will go broke in fact in 2009 the government coined the term too big to fail and social security by its very definition is too big to fail i mean think about what would happen if suddenly social security failed we’d probably have a depression because if you think about what happens to social security money you’ll totally understand i mean when you receive your social security check the first thing you do is you spend it right you go golfing you go to restaurants you spend it and when you do that you give employment to people so the one thing that you need to understand is social security and most of the media tell you it’s going broke in fact what they do is they tell you that on in 2033 the program is scheduled to fund and then after 2033 uh suddenly they’re supposed to only be able to pay out 77 cents on every dollar in benefits that are due to recipients well that would be a problem if social security was an entitlement program that had limited funding but that’s not how social security gets funded it gets funded through taxes in fact 7.65 percent of every dollar that we earn in wages goes to social security and to medicare and it doesn’t stop there because it’s like a matching program your employer matches another 7.65 add that together and 15.30 goes to social security and medicare on every dollar that we earn now congress can solve the funding problem overnight in fact all they have to do is increase it from 7.65 up to 147 000 in wages that you earn in 2022 all they have to do is increase that to 10 percent and maybe cap it off at 200 000 in wages so there you have it social security won’t go broke but you can count on changes being made they may change the claiming age right now uh depending on what year you were born you can claim social security at age 66 or 67. they may change that maybe they’ll change it to 68 and 70. so again this is why i say that you have to have a coordinated program one that takes into account your social security and all your other assets all as part of a one l1 plan so i hope that clears up the issue uh let’s take a look at the next myth um myth number two is if i take a job that pays less it will force my benefits to be less okay well this is something that i hear from clients from time to time i’ll get a person that they had a job uh and the job had a secure wage they received the salary but they always had in the back of their mind that they wanted to get into sales but they never wanted to get into sales because well the income could be sporadic so what they’re afraid of is they’re afraid to take that sales job maybe their dream job but they’re afraid to take it because they’re afraid they’ll earn less and now all of a sudden their social security income will go down well first of all to address this myth you have to know how you qualify for benefits and then once you understand how you qualify for benefits then you understand how they’re computed so first without getting too boring here or too analytical you got to qualify to qualify for social security you got to work for 10 years and you earn 40 primary insurance amount credits so basically you or you earn as you work four credits per year and you work for 10 years now the great thing about social security is that those 10 years don’t have to be consecutive and that’s really important to the moms out there because if you took off time to raise a family no sweat it doesn’t have to be consecutive you could take off time ready to raise your family and then you know go right back to work it’s not a problem now to compute your social security benefit the good news is that social security only looks at the top the top 35 years of your earnings so if you take a job on that pays less no worries because they’re only going to look at the top 35 years so this way you know you don’t have to worry take out whatever job you want to take and if it pays less don’t worry about it just do it if you want to volunteer your time it’s great too it’s not going to hurt your earnings so i hope that clears up that myth uh just do what you love doing okay myth number three i can’t stop my benefits after i start in fact that’s a complete myth you can stop not only can you stop you can pause your benefits and you can actually restart your benefits after you pause or you can completely withdraw your benefits and start over i guess the first thing we’d have to address is why would somebody want to stop their benefits after they applied for them so here’s what would happen maybe you start maybe they started their benefits but like i discussed they got a higher paying job one that could actually increase their top 35 years of earnings so maybe they want to stop uh maybe they received an inheritance or maybe they won a lottery i want to be part of that crowd okay well you can actually pause your benefits not stop them but actually pause them for a temporary period of time once you reach your full retirement age which would be 66 or 67 depending on what year you were born you can actually not only pause them but you can actually completely stop them you can actually do what’s called a withdrawal benefits and in order to do that what social security requires at you is that you file this form 521 it’s called the withdrawal benefits form now social security will allow you to do that one time you have to do it within one year of when you file for benefits and the other requirement is that you have to pay back whatever you receive the benefits so you’re actually able to do two things you could either pause benefits or you can completely stop them but you got to remember that’s form 521 so i hope that addresses that question that myth and uh let’s move on okay the next myth is myth number four social security gets taxed the same as regular inc income this is what a lot of people believe and that’s not true actually social security is taxed on what they call a provisional income formula and you don’t have to be an accountant to figure this out all you do is take your gross income plus any tax-free interest that you earn plus 50 of your social security check so if your gross income from wages is i don’t know 12,000 a year and you get tax-free interest from maybe a municipal bond you have to add that in and split it split half of your social security check add that all together and if you’re single and you’re filing as head of household and that number comes up to be less than 25,000 a year well the good news is that your benefits are completely tax-free if there are more than 34 000 a year then up to 85 of your benefit not the tax 85 percent of your benefit gets taxed as part of your regular income now if you’re a married couple and your uh provisional income is 32,000 well if it’s 32,000 or below then you have no social security taxes due and if it’s more than 44,000 a year then up to 85 percent of your benefit is due again this is why you want to have a program you want to have a plan that incorporates all of your assets and coordinates all of your assets you want a unified plan this helps you plan your income and plan for taxes alright so i hope that clears up that myth let’s look at myth number five again the coffeehouse gurus step in apply at 62 apply as soon as you can but here’s the problem with that that could have a huge impact on the amount of benefits that you actually get you may or you may not want to do that but before we get started you have to write down on a piece of paper what your full retirement age is so that you know if you should do that or not if you should apply or apply early or not so your full retirement benefit age is age 66 if you were born between 1943 and 1954 now when i’m talking about your full retirement age benefit what i’m talking about is that age at which you get a hundred percent of the benefit that you’re due okay so if you were born between 1943 and 54 it would be 66. if you were born 1960 or later your full retirement benefit age is age 67. so why is that important well here’s the thing about social security you can apply as early as age 62 or as late as 8 70. and if you’re whittled you could apply as early as age 60. now what we do is we recommend that you file at your full retirement age or later why well the best thing is to give you an example let’s say your full retirement age is 66 and you’re gonna get a thousand dollars a month if you will apply at 62 anytime between 62 and age 66 you’re going to get a little a lesser benefit in fact if you apply at age 62 instead of age 66 your full retirement age you’re going to get 25 less benefits and that’s a lifetime benefit so that’s really important okay the other side is you can get credits you can actually earn eight percent per year for every year that you delay taking your benefits until age 70. so if you’re age 66 and you wait till 870 you can actually increase your benefits by 32 percent think about that for a moment if you waited till age 70 you’d get 1320 a month versus 750 a month if you applied at age 62. so that’s hugely important so running out and applying at age 62 is not necessarily a good idea it’s something that you want to give serious thought to before you go ahead and do that again you want to coordinate your plan to take into account when you’re going to need your income and what your future income will be so i hope that clears up that myth uh let’s move on to myth number six it doesn’t pay to to delay taking benefits because i won’t live long enough to come out ahead well this is another myth um this really is dependent on your health uh but it’s really a myth for most people i mean if you have ill health and you’ve had a history in your family people dying young well then you know these numbers might not apply to you you may want to take it early but here’s the fact the average man’s age nowadays is 86 women are living are expected to live to age 89. so what we did is we looked at people taking their benefits at age 66 their full retirement age in many cases virg versus age 62. and what we discovered that is that if you live to age 76 you break even every dollar that you earn after age 76 would be a profit to you you’d be ahead if you applied at age 70 versus age 66 your break even would be age 81 so for every year that you lived after 81 you would be coming out ahead apply at age 70 versus age 62 and the break even is age 79. now you could tell that if the average man’s life expectancy is 86 and women’s is 89 most people are gonna it’s going to pay off for them to delay so i hope this clears up this myth it’s important to consider though all the facts uh your health uh and what illnesses you’ve had to deal with up until this point and uh take it all into consideration but know that delaying could be very profitable if you have uh a decent during average life expectancy so i hope that clears up that myth let’s look at myth number seven um i can’t collect social security and still work and so a lot of people want to know well what happens if i’m still working and i want to take my benefits early well here’s uh this is something very important to consider if you’re too young and you claim it early you may be subject to what’s called the social security earnings test so what i’m saying here is that if you’re under your full retirement age age 66 or 67 in 2022 you’ll give up a dollar in benefits for every two dollars that’s earned above 19 560 dollars a year in w-2 earnings and that’s for 2022 again so here’s the thing about this though if you’re self-employed you can actually manipulate this because you can control what you pay yourself and wages but if you’re not and you can’t well then you know that you have an earnings limit of nineteen thousand five hundred and sixty dollars okay now in uh if uh it’s the year of your full retirement age so let’s say that your full retirement age is uh 66 and you’re going to be 66 this year but it’s not your birthday yet it’s just that you’re going to be 66 this year okay well in 2022 you’ll give up a dollar in benefits for every three dollars that you earn above fifty one thousand nine hundred and sixty dollars in wages okay so you have limits and that’s the earnings test now here’s a really great thing if you’re at your full retirement age what’s cartwatch you can earn as much as you want in wages you could earn a million dollars a year in wages and you won’t give up a dollar in social security benefits so if you want to work and claim on social security you can but you have to be careful of these uh the social security earnings test if you’re under your full retirement age okay so i hope this clears up this myth um the next one i want to address is myth number eight uh i stayed at home and i raised a family i won’t qualify to get social security benefits well that’s not true either now if you married if you’re married you qualify for what’s called the social security spousal benefit at your full retirement age you get the option to take your own benefit or 50 percent of the primary wage earners benefit whichever is higher that’s a mouthful so let me explain what that means let’s say that he’s making three thousand dollars a month in benefits and you’re making a thousand dollars of benefit a month in benefits well you had to happen option you could take either your own thousand dollars a month in benefits or you could take fifty percent of his benefit well fifty percent of three thousand dollars is fifteen hundred dollars so it’s pretty clear that what you’d wanna do is you’d wanna take the fifty percent uh instead the second part of this is that if you never worked if you never worked and you’re married you could still take the spousal benefit so even if you have no benefits coming to you because you didn’t work outside of the house at a regular job that’s no problem you could still get 1500 a month in our example so i hope this clears this up the spousal benefit is a very important benefit for mons and and for a lot of people so uh so know about the spousal benefit i hope that clears that that problem up for you myth number nine if i die before my spouse they’ll get half my benefit this is completely wrong uh the survivor’s benefit does not work this way the way it works is that if you die before your spouse they’re not going to get half your benefit what’s going to happen is that the lower paying benefit is going to be taking them taken away and the highest paying benefit is going to survive so let me explain this in greater detail let’s say that his earnings in social security is 36 000 a year let’s say that hers is 18 000 a year so what happens here if either one of them pass in that relationship the eighteen thousand dollars is going to be taken away and the thirty six thousand dollars is going to survive so you see what’s happening here this is really unfair and it really kind of irritates me because if you think about it uh you paid into social security so so if either one of you die you should be actually you should be entitled to both benefits but social security and their infinite wisdom has this role that’s how it works but it’s important for you to know this because when you plan your retirement and your income you want to make sure that you have a plan that takes into account this possibility and have that income be there in case one person passes on before the other the second part of this problem that no one ever talks about is that if one person passes away the surviving spouse no longer files a joint tax return so now the individual has to file singularly as an individual which means higher taxes and a bigger tax by and again this is why you have to have a plan that’s unified that takes into account and coordinates holistically everything that you have to work with to include your social security so let me just take a break uh for those that are just coming in new i’m john davis i’m a cff financial planner i do retirement and estate planning my clients are people that are nearing retirement and those who are already retired now let’s look at myth number 10. i can’t afford to retire i have to wait until i’m 66 or 67 they have enough social security and other income besides everyone knows that you can’t increase your social security benefits after you start receiving them right well no that’s not exactly right you know some of you might be sick of covert and the grind at work well here’s the good news you can actually retire at 62. um you can actually take social security early and still increase your benefit you can do that by considering a new social security claiming strategy i call it start stop and start start stop and start i’m letting that sink in for a second so how it works is that you start you turn on your income at age 62 and you take your social security income and you take that until age 66 or 67 whichever your full retirement age is now once you reach 66 or 67 you can call the social security office and you can have them put a pause on your benefits now we’re not following the form 521 we’re not withdrawing our benefits again we’re just putting a pause besides that if you file the at 62 and you’re now 66 or 67 you’re past that one year period where you can withdraw your benefits anyhow so again we’re just putting a pause on the benefits so next what you do is you turn on your private pension so you might be saying yourself okay where is this private pension come from well by taking your 401ks and your iras and investing them with me i can set up a private pension plan for you one that’ll pay you a lifetime income for both you and your spouse okay now what you’re gonna do is you’re gonna go back and turn on your private pension at your full retirement age 66 at 67 and when you do that you’re going to actually be giving yourself a raise compared to what you are living on with social security loan at age 62. now because your social security has been paused it’s resting and it’s still growing it’s growing at two-thirds of one percent per month so the cool thing here is that at age 70 you’re going to start your benefits again you’re going to turn your social security back on you’re going to take them off a pause turn them back on and you’re going to give yourself another pay raise because between your 870 social security benefit which is grown and your private pension your income is easily double what you were taking out at age 62. and again this is why you have to have a unified holistic retirement plan that coordinates all of your assets so i hope all of these uh myths uh go away i i hope that you plan your retirement and you enjoy your retirement i mean you really deserve to have that

The following transcript has been automatically generated and is being provided as a matter of convenience: 

hi i’m john davis i’m a cff financial planner and i specialize in retirement and estate planning now if you’re watching this it’s because you love your family and want to make your retirement the best that it can be now over the past 30 years i’ve seen both really successful and happy retirements and really really poor retirements and since i’ve seen both and with your success in mind i put together a list of the top seven money mistakes guarantee direct your retirement unless you start fixing them today so let’s get started number one on the top seven list is not knowing exactly how much income you and your spouse can expect and count on from social security so the first thing i want you to do is to go to the social security website it’s www.ssa.gov backslash my account follow the instructions and create a personal account for both you and your spouse next download a copy of your estimate of your benefits again get a copy for both you and your spouse why well remember that while you might be retiring your bills are not you’ll need to know how much your social security income will be after your paycheck stops secondly let me ask you a question let me ask you a really crazy question do you hate your spouse crazy as that sounds in a minute you understand why i’m asking you see the reason i’m asking is because what most people in a marriage don’t realize is that if either person in the marriage dies before the other the lower paying social security check is automatically taken away by social security the survivor is left with one check instead of two let me give you an example so let’s say his benefit totals thirty six thousand dollars per year and let’s say hers totals eighteen thousand dollars per year as you could see one higher one lower but together the two benefits total fifty four thousand dollars per year which is not a bad retirement income now if either one dies and it makes no difference which one social security will automatically take away that lower paying eighteen thousand dollar check so instead of fifty four thousand dollars coming in your spouse just lost eighteen thousand dollars worth of income imagine your boss calling you today and saying hey guess what i’m gonna do for you i’m gonna cut your income by 18 000 a year you’d say hey wait a second that’s a really big pay cut well your survivor just took that kind of pay cut she just he or she just lost a third of their income and it’s left with only one check for thirty six thousand dollars now if you’re thinking that’s lousy i absolutely agree but here’s the thing it actually gets worse while one spouse is mourning the death of the other the survivor may or may not be able to afford their lifestyle they might not be able to afford the things that they’ve been doing and been enjoying a lifestyle that they’ve come to love and number two the survivor is now forced to pay more in taxes no one ever talks about that you see the survivor is no longer a married person they’re now single and they can’t file a joint tax return now as a single you know that you wind up paying more in taxes so here’s what we know we know that women generally outlive men and we also know that most people don’t hate their spouse my guess is that you’ll want to have a plan in place to replace that lost social security income now you can build a plan to solve this on your own or you can contact me using the information on the screen i can help you put together a plan to replace the lost social security income and solve this problem another thing i want you to do is go to my website the information is there on your screen americaunitedwealthplanning.com there you’ll find my video 10 myths about social security this is an educational video where i provide you with all kinds of information that’s pertinent to social security information about your age options for applying the advantages and disadvantages of taking benefits early or delaying how to increase your benefits if you can work and still claim benefits so now you know about social security look at the 10 minutes social security video and if you have any questions give me a call remember helping others is how we help ourselves so i have no problem helping you with any of the questions that you might have so number two on the list of seven money making this excuse me of seven money mistakes guarantee direct your retirement unless you start fixing them today is not having powers of attorney or knowing if your poas will work when needed if covert 19 has taught us anything it taught us just how important it is to make sure that your legal documents have been reviewed and are in good order everyone should have a will or a trust with covert that’s a given but have you reviewed your powers of attorney okay so i’m not an attorney and i’m not giving legal advice in fact you can create your own legal documents i’m sure there are all kinds of samples all over the internet that you can download or you can work with our attorney who can help you with this what you’ll need to know is that there are two types of powers of attorney there is a financial power of attorney for finances and the medical power of attorney for medical decisions and treatments now some of you might be asking how do these things work well i’m glad you asked you see a power of attorney also known as a poa allows you to legally appoint someone to act as your legal agent but only if you’re incapacitated and can’t act for yourself let me give you an example let’s say a person winds up in the hospital due to coving well first imagine the fear and panic that their family experiences when they discover that their loved one is now quarantined and they can’t physically meet with them then to add insult to injury let’s say the family needs money let’s say they need cash to pay the bills you know we’re talking about money for food utilities or property taxes well what they’re going to discover is that the financial institutions require that they legally present a financial poa in order to get money you need a poa to get money from your from your loved ones qualified accounts so now we’re not talking about jointly held checking accounts or savings accounts we’re talking about qualified accounts where people have the bulk of their money so i’m talking about 401ks 403 vs iras brokerage accounts and insurance policies now here’s the thing here’s where people make a mistake they think if they’re a spouse that they don’t need a poa but even if you’re a spouse you’ll still need a poa you see as a spouse you might be the beneficiary in the event of a death but your loved one is still the owner not you qualified accounts cannot be jointly owned i mean think about remember that ira stands for individual retirement account okay so you’ll still need a poa even if you’re married and finally finally people quickly discover that the hospital requires a medical poa to make mental medical decisions and to authorize treatments without the medical poa they won’t treat your loved one one more thing let’s say you already have your poas in place well congratulations you know naturally you would think well i’m all set i don’t have anything to worry about right well let me ask you this when was the last time that you had your poas reviewed did you know that social security medicare the irs along with the va require that special language be added to your poa and without it they’re not acceptable you see most of the poas that i review don’t meet the requirements which will render them useless when they’re needed like i said you can create the poas on your own with the proper language however my advice is to work with a professional i’ll make sure that number one you have the correct poas and number two that they’ll be acceptable when they’re needed so now you know about poas and their importance if you have any questions give me a call as i always say helping others is how we help ourselves so i’m always ready to help you okay number three on the list of seven money mistakes guarantee direct your retirement unless you start fixing them today is not putting together a cash flow report to project your retirement income before you retire let me ask you this question are you one hundred percent certain that you can afford to retire and stay retired if you can’t immediately answer this question it’s because you’ve not done a cash flow report understand that no one wants to create a burden or become a burden for their family a cash flow report is a spreadsheet that eliminates this problem a cash flow report gives you peace of mind it breaks down all your retirement income year by year for your entire life only after you see everything all on one page that you could be 100 certain that you could afford to retire and stay retired now to get started the first thing you have to do is to open your checkbook and start totaling up your living expenses what you have to know is on an annual basis how much it’s going to cost you to live and support your lifestyle after you retire next you have to put together a list of all reliable retirement income sources whether it be social security pensions iras 401ks 403bs or other investments what you want to know is number one what your income sources are and number two how much income each source will produce once you have that information you can plug the numbers into a spreadsheet and start to build a cash flow report you can do that using all of your numbers now if you do it right it will show you how much you’ll have coming in and compare it to how much you have going out year by year line by line for your entire life as i said before you see it’s not until you see all the numbers on one page that you could be a hundred percent certain that you can afford to retire and stay retired a cash flow report is absolutely mandatory for retirement success call me and i’ll email you a form that you can use to organize your figures and then start to build your own your own reporter get back to me if you get back to me with your information we could build a cash flow report using your number on an excel spreadsheet or if you provide me with all your information i can i can run the report for you and we can review it together there is no cost or obligation i just want to make sure that you have enough income in retirement so now you know about cash flow reports and planning form number four on your list of seven money mistakes guaranteed to wreck your retirement unless you start fixing them today is retiring without a survivor or legacy plan have you put together a plan to protect your surviving spouse’s income and family legacy will your spouse have enough income to maintain their present lifestyle or will they be forced to go back to work for example you’ve already learned that lower paying social security check will automatically be taken away but in addition to replacing lost social security income does your plan replace other income sources does your plan consider both your survivors income and include a legacy for your family you can crunch the numbers on your own and build your own survivor and legacy plan or i can build one for you now if i build a survivor and legacy plan i take into consideration the total income from all assets and if needed i can often create additional income and also create a legacy for your family obviously you want this done before it’s too late now i have a quick question for you about your pension a lot of people don’t realize this but have you explored all of your pension options in detail did you know that if you choose the wrong pension option that you could accidentally disinherit your family without knowing it did you know that if you die that your spouse’s pension income could be reduced or completely lost do you have a plan to solve these problems did you know that with some pensions if both you and your spouse go on vacation and if the plane goes down and you don’t make it that your beneficiaries could wind up with zero dollars yep your entire pension balance could be kept by the company the good news is that there are simple ways to avoid this problem when i build a survivor and legacy plan i look at how much income your spouse and family can expect as well as how much of a legacy your family can expect now you can do this yourself or i can run a survivor and legacy report for you again there is no cost or obligation i just want to make sure that your family avoids future problems so now you know about survivor and legacy plans and reports number five on your list of seven money mistakes guaranteed to wreck your retirement unless you start fixing them today is retiring without planning for your new tax responsibilities you see your present tax pattern while working is that your employer takes care of your irs tax reporting requirements at the end of the year your employer reports your income and sends you a w-2 you take the w-2 to a tax preparer who files your return for you now after you retire the stories change your employer will no longer be responsible for your w-2s or income reporting once you retire you become responsible for how you declare income the tax liabilities are now your responsibility now if you get this wrong you could face as much as a 50 percent tax penalty or worse get it wrong and you can run out of money in retirement now in retirement you have to know both what your taxable investments are and what the tax requirements are so here’s an example of what i’m talking about let’s say you have a traditional 401 k or 403 b and you retired and you left it with the company now at age 72 under irs rules you’re required to declare income from all traditional iras 401ks and 403ps the income distributions are called rmds which stands for required minimum distributions what the government’s doing is they don’t want the money just to sit in your 401k they want you to claim it as income so that they can they can tax you that’s all that’s the whole reason behind it but the problem here is that if the stock market market is losing money when your rmd is due and you sell stock in this falling market to declare the rmd income you lose even more money why because you’re selling stock in a falling market to declare income the stock values are falling and you’re selling so what do you do do you go ahead and take the rmds from your 401k or 403b and sustain the losses or do you declare the r the income from iras you know iras they happen to be in profitable accounts well guess what under current irs rules you’re not allowed to take the income from those profitable iras you must declare the income even if your 401k or 403 is losing money you have to take it out of the 401k or 403 b so what can you do well one thing you can do is roll part of your 401k or 403b out of the market and into market protected iras you can do this even if you’re still working even before quitting your job now most people know that they most people know that they can do this under a little known uh irs rule and the great things is that you can start with the simple conversation and and we can help you with this uh it’s not that difficult to do but you have to know about the rules and you have to talk to somebody who knows how to do it so that’s what i’m offering my help for i like i always tell say helping others is how we help ourselves so if you have questions give me a call let’s talk about it so now you know about your new tax pattern and some steps you can take to plan for it so let’s look at number six okay number six on your list of seven money mistakes guaranteed to wreck your retirement unless you start fixing them today is retiring with no budget for non-insured medical expenses now sad to say medicare doesn’t cover all health services a recent fidelity study revealed that couples retiring today will spend around three hundred thousand dollars for out of pocket medical expenses yes again we’re talking about medical expenses not covered by medic medicare for example the original medicare won’t cover your routine vision care or the cost of hearing aids or dental work or visits to the dentist see while you can’t fight biology you can actually plan for it if the problems if these types of problems run in your family or you’re already experiencing them starting today you can start researching dental and vision insurance plans and you do this with the goal to find out how much you can expect to pay for these services next just take the costs and put together a list of the dollar amounts total the expenses that medicare won’t cover and build these expenses into your retirement budget and cash flow report another option is to skip the original medicare supplement plan and shop for a medicare advantage plan one that includes dental vision and hearing coverage these are things you can do on your own starting today however if you have questions or want a second opinion give me a call let’s talk about it as i tell my clients helping others is how we help ourselves and great things always start with a simple conversation so now you know about non-insured medical expenses and what you can do about them number seven on our list of seven money mistakes guaranteed direct your retirement unless you start fixing fixing them today is not determining where you’re going to live before you retire some folks don’t plan to move after they retire and that’s because they’re happy where they are others want a change of scenery you know they they want to move closer to their family to their children but retirement isn’t only about where you live it’s about how you live are as our bodies age and we get older we often require more help so being located closer to help can be critical it’s really important to consider your age and proximity to health services it’s very important that you have a way to get to and from your health services whether that be public transit ride share or help from relatives now if you’re considering help from relatives that’s great but you may want to consider moving closer to where they live and let them know that that’s the reason why you’re doing it you see they have their own lives and driving two hours to provide help for you is a lot to ask of anyone now another factor to consider is your neighborhood if it’s known for street crime or getting sketchier by the day you may want to relocate whatever you decide you’ll want to do a little research before you decide to buy or relocate so now you know about the importance of deciding where you live in retirement that covers the seven money mistakes guaranteed to wreck your retirement unless you start fixing them today as i tell my clients you retire only once in your lifetime as a retirement planner i retire every day you should start working on these today if you have questions or you want a second opinion give me a call let’s talk about your future uh great things start with a simple conversation and helping is how we help helping others is how we help ourselves i’m john davis and i look forward to speaking with you

The following transcript has been automatically generated and is being provided as a matter of convenience: 

 

so one of the most asked questions that i receive is how does social security get taxed and how will it be taxed in 2022 i’m john davis i’m a financial and estate planner in a certified financial fiduciary i work for a company called america united wealth planning today we’re sharing our knowledge and ideas to make life richer for you and your loved ones let’s start with a history lesson on taxes and social security benefits from 1937 to 1983 all social security benefits were completely tax free nada not a dollar was paid in taxes then in 1983 the tax code was changed to allow up to 50 percent of your benefit to be taxed then 10 years later the tax code was revised again under the deficit reduction act of 1993 they added in a new tax bracket and now today up to 85 percent of your benefit can be taxed all right so here’s what you have to understand is that today’s social security is taxed based on what’s called a provisional income formula okay the way that this works is that we start with your gross income that’s listed on your tax return and that to that we add in any tax-free interest that you earn maybe you earn some interest off of municipal bonds and then we add in 50 of your combined to annual social security income add all three of those together and it adds up to what this year’s provisional income will be for you okay so to simplify this i want to introduce you to carolyn bob carroll’s social security check is eighteen thousand per year and bob’s is eighteen thousand so the total combined is thirty six thousand dollars per year now to compute their provisional income we take half of their benefits which is eighteen thousand we add in carroll’s pension which is twenty four thousand and we add to that twenty thousand dollars that bob pulls from his ira okay as you can see when you total it up their provisional income would be sixty two thousand dollars all right so we computed their provisional income at sixty two thousand dollars now here’s where people get confused if you look at the irs tax chart you might think that eighty five percent of their provisional income would be taxed right it would give them a tax bill of fifty two thousand seven hundred dollars but if you did it that way it would be wrong that’s not how it gets taxed and in fact the taxes that you pay on your social security are taxed under what they call a progressive tax so you’re saying well what’s that and how does that work well here’s how it works they’ll pay zero on the first 32 000 of earnings they’ll pay fifty percent on the next thirty two to forty four thousand of earnings so in this case we’re talking about twelve thousand dollars and fifty percent of twelve thousand dollars is six thousand dollars so their tax bill this year is going to be six thousand dollars on that portion of their income next 85 percent on the amount is paid uh for the amounts earnings of 44 000 and up well in this case we’re talking about eighteen thousand dollars so if you multiply that eighteen thousand dollars by eighty-five percent you would see that their tax bill on that amount of money is fifteen thousand three hundred so now if you add the 15 three to the six thousand dollars what you’ll see is that they’re going to pay 21,300 in taxes on their social security income okay so there you have it 71 percent of carol and bob’s income will be taxed at today’s tax rates now here’s the thing they’re going to pay more in future as future tax rates go up and this is going to shrink their social security income in the future because of rising taxes they’re going to have less income to spend in the future that’s a problem where do you think future tax rates are going do you believe they’re going up or that they’re going down now when i survey most people what they’ll tell me is tax rates are definitely going up and if you set up then you’ll pay more in taxes and you’ll have less to spend if you don’t have a plan to combat it okay now most people it’s very interesting that most people work very hard to avoid stock market losses when they’re growing their portfolio but they do nothing to avoid or reduce the taxes that they’re going to have to pay in the future the thing here is that every dollar you pay in taxes is a dollar less that you have to actually spend after you retire so the question is when taxes do go up will you be able to afford the lifestyle that you’ve come to love in retirement now the good news is that it’s possible to reduce or possibly create a tax-free retirement if you do some planning today see i believe that taxes are going up and if you agree then you have to start your your planning today before the taxes go up in order to protect your income and preserve your estate tomorrow again i’m john davis i’d love to discuss this with you um contact me at the information on the screen i’ll be glad to schedule an appointment and uh you know we’ll share some ideas and kick some ideas around and see if we can reduce your tax bill in the future thank you for watching the video i look forward to talking to you in the future

The following transcript has been automatically generated and is being provided as a matter of convenience:

my clients are people who hate taxes many are high net worth individuals who own businesses they’re high income or wage earners and many are self-employed and they hate taxes so today i want to talk to you about how you can make your retirement as tax-free as possible using a lirp. i’m john davis i’m a financial and i’m an estate planner and i’m a certified financial fiduciary i’m with a company called america united wealth planning and today we’re sharing our knowledge and ideas to make life richer for you and your loved ones so what is a lirp well a lirp is a life insurance retirement plan it’s designed to reduce or eliminate taxes and create a tax-free retirement it uses a specially permanent especially designed permanent life insurance policy that’s actually approved by the irs so you might be asking well why do i need a lirp well i don’t know if you need one or if you don’t it really depends on what you the way you feel taxes are going you know the way you see taxes going do you see them going up in the future or going down now if you look at this chart and you look at the red line moving from left to right you’ll see that that’s our tax income and you’ll see that taxes back in the 1940s and 50s were up around 90 percent and as you follow that line to the right you’ll see that the taxes are now down to around 37 percent if you look at the dark blue part of the chart that’s our national debt and you can see it’s ever climbing in fact the chart shows 28.2 trillion but it might be actually much higher than that but it’s we’ll just go by what the chart says so here’s the problem the problem is is that the the national debt keeps climbing and the income coming into the country keeps dropping problem here is this is just like at home if your income doesn’t meet your obligations you’re going to go broke and so in order for our country to make good on its debts it has no choice but to increase its income which means it’s going to increase taxes let me ask you a question are you prepared for this many are not here’s the thing you need to protect your future retirement and you need a savings vehicle that does that and does it two different ways the first way is you need to be able to safely save as much money as you want while consistently growing your money without incurring stock market losses along the way the second thing you need is you need easy access to your money without the age 59 and a half traditional ira or 401k restrictions and penalties and finally you need the ability to access your money without half of it going in the form of income taxes to our government well the good news is there’s a savings vehicle that’s been around for over a hundred years and it’s known as a permanent life insurance policy with it you can withdraw your money out a hundred percent tax-free and you can pass it on to your heirs a hundred percent tax-free after you’re done using it now in order to do this the policy has to be constructed in a way that it follows the irs tax code which are section 7702 and 72e see when it comes to life insurance there are only two types of life insurance policies and they both share the same form characteristics now they call them different names but those are for marketing purposes really truly there’s only two kinds the first kind is called the term insurance policy and you’re probably familiar with this and i compare term insurance to renting a home the second type type of life insurance policy is called a permanent life insurance policy and this is very much like buying a home so let’s look at those four characteristics so the first characteristic of term insurance is that it’s a lower cost initially you know kind of like renting a property you come up with the first month’s rent and you come up with a deposit it’s easy to get into it’s low cost the second characteristic is that it’s designed so that the cost goes up just like a lease at the end of your lease your landlord comes to you and says hey you know your lease is up if you want to stay here we’re going to have to increase your rent payments to cover the new year well term insurance is kind of the same way term insurance is usually issued in 10 years in five year 10-year or 20-year increments sometimes you’re lucky and you can get 30-year increments but you have to be pretty young to be able to get that the third characteristic is that it has no cash value it doesn’t have any equity like you get in a home so what happens is that you pay payments into this policy and at the end of the policy there’s nothing to show many many people can compare this to rent where you pay your rental payments but you have nothing to show the rent is kept by the landlord in this case case the premium is kept by the insurance company and the fourth characteristic is that the coverage eventually ends even if you’re in good health it’s going to end at the end of the term and in fact in many cases when once a person starts hitting i would say in that 50 to 60 year old range age range what happens is the cost of term insurance becomes prohibitive and in many cases they’re not able to get insurance because they simply can’t afford it now let’s take a look at permanent insurance the first characteristic of permanent insurance is that it has higher cost initially you know just like buying a home when you buy a home you have to come up with a down payment you may have to come up with money for taxes and for other purposes the second characteristic is that it’s does if it’s designed right uh it’ll stay level so uh let’s compare this to a 30-year fixed mortgage if you get a 30-year fixed mortgage the payments stay level well you could design a permanent life insurance policy so that the payments stay level the third characteristic is that it has the ability to build cash value just like the equity in your home you can build cash value in your permanent life insurance and of course the fourth characteristic is that it’s designed to provide coverage for life so when you get a permanent life insurance policy just like the name implies it’s permanent it’s something that you’re going to keep all your years now this is often where the discussion about life insurance just plain stops you see if you mention life insurance a lot of people automatically become negative so you might be asking well why is that well it’s because they don’t know any better they only know about life insurance death benefits and they figure they’ll be dead the only people that will ever benefit from their paying into the policy will be their family members so they become somewhat negative okay they also because of this they also also lose out on living benefits you know that you could get any properly designed permanent policy so often life insurance winds up being looked at or viewed as another bill that people have to pay each month so what they do is they go out and they look for the lowest monthly premium and they end up buying term insurance okay so what i want to show you today in the next slides is a lot more interesting and a lot more exciting in fact it could change your financial life in the future so pay close attention now besides a death benefit which you get with all insurance policies to protect your loved ones a permanent life insurance policy gives you two really important benefits the first is well let’s say you need money for whatever reason it can give you tax-free access to cash without restrictions and without penalties you can get that cash whenever you need it whenever you want it the second is let’s say that future tax rates like the chart shows shoot through the roof okay if you follow the tax rules it can give you a tax-free retirement income when you retire now to understand the power of these benefits we need to look at how your money gets taxed when you’re declaring income so that’s what we’re going to do in this chart so your money basically falls into one of two taxing buckets the question is which bucket would you rather have your money taxed in the first is the capital gains income tax bucket this is income that comes from the sale of stocks it comes from the sale of mutual funds the sale of a business or the sale of an investment piece of real estate okay anything that a lot that you can own for 12 months or more you end up paying capital gains tax rates on now the tax rates are running from 15 to 20 percent but they’re expected to go higher in the future okay now the second bucket and this is the one that most people are familiar with is the ordinary income tax bucket now currently the highest rate is 37 percent so my question again to you is are taxes going to go up higher in the future or are they going to stay lower when i pull most people they just say higher and i agree with them so what goes into this bucket what falls in this category is what i call the alphabet soup of retirement plans so what we’re talking about is we’re talking about iras uh sep iras and simple iras uh we’re also talking about 401ks and 403 b’s anything that falls under the heading called a tax qualified retirement plan gets taxed at ordinary tax rates now the key understanding to this is that the money you put into a tax qualified plan like a 401k or traditional ira is not being taxed as it’s going into the plan instead it gets taxed when you take it out you’re forced actually to pay taxes on all of it future tax rates might be sky high we have no idea what they’re going to be so that’s where the real problem is so having said that what a lot of people ask me is you know what where can i put my money and not get a tax when i take it out well there’s only three places that i could think of okay the first is municipal bonds that’s one area where you can put it in and not get tax taken out the other possibility is roth iras and of course the third possibility is to use a permanent life insurance policy so here’s the thing when it comes to municipal bonds i don’t count them you see historically they have poor returns they also there’s also no acid diversification with a municipal bond and they’re also invested in risky municipalities often these municipalities have junk bond ratings so there’s a lot of risk to putting money in municipal bonds the second area is roth iras and i don’t really count them either and the reason for that is simply because you just can’t put that much money into them i mean your maximum contribution is six thousand dollars and you can add in another thousand dollars if you’re 50 or older and also if you’re a high wage earner or a professional or business owner let’s say you’re a single individual and your income is 144,000 a year or more well guess what you can’t contribute to a roth if you’re a married couple and your income jointly is 204,000 or greater again you can’t contribute now fortunately the last category or area where you can put it in and get it out tax free is called a certified is a called a permanent life insurance policy and of course this is really a good option we’re going to talk more about that in the future all right so there are two ways that most people save for retirement what most people do is they put their money in a tax deferred 401 k 403 b an ira or a sep now if you’re tax savvy you’ll put your money into a tax-free account so let’s look at the differences so i want to test you here is the money that you put into a taxed deferred ira 403 ira or sep is that taxed when it goes in or is it taxed when you take it out now if you said no it’s not taxed when it goes in it’s taxed when it goes out you’d be correct you see when you go to take it out you’ll be taxed on whatever you put in plus whatever you take out whatever you made on the account now on the flip side if you look at tax free accounts the money you put in is taxed at the point that you put it in but the beautiful thing about tax-free accounts is that when you take your money out when you take it out there are no taxes due and so you have to ask yourself which would you rather pay taxes on would you rather pay taxes on the seed money that you’re putting in or the harvest money in other words pay taxes on all of it what you put in and what you’re taking out well when i ask most people they’ll say i don’t want to pay taxes at all so let’s look at a couple examples of how you can use a permanent life insurance policy to your advantage okay so let’s say that you’re an individual uh who wants access to your cash but you also want to create wealth well in this example you’re borrowing from your policy instead of using a bank no bank fact you don’t have to borrow from a bank instead you can use the cash built up in your policy and you can actually borrow from yourself you’re borrowing from your policy and the great thing is that you can choose to either pay yourself back or choose to not pay it back here’s how it works pay close attention now here’s the thing if you have to stop this video and rewind it a little bit and repay replay it again go ahead and do that because i want you to get the essence of what we’re talking about here so let’s say you need a 25,000 loan maybe you need that for your child’s tuition or maybe you’re remodeling your house i don’t know you need it for some purpose the insurance company will give you a 25,000 tax free loan you don’t pay taxes on loan proceeds so it’ll be tax free they’ll secure their loan with a 25,000 lien against the accumulated cash value in your policy so you’re not taking the cash out of your account pay close attention here you’re just using your account as a security deposit okay you know the insurance company might charge you as an example a six percent fixed rate for that loan but at the same time they’re gonna credit your cash account with six percent so what’s happening here are the two interest rates are actually washing themselves out so the loan is actually costing you nothing so now you can choose to pay back the loan or you can choose to not pay it back if you don’t pay it back that’s not a problem the money will be actually taken out of the death benefit part of your life insurance policy to pay off the loan balance so you don’t have to worry about paying it back but let’s say that you decide to pay back the loan with interest and put the money back into your policy so in this example you’re using the cash value in the policy to secure a loan from the insurance company that’s number one number two at the same time you’re going to actually create wealth for yourself here’s how it works remember the 25,000 loan from the insurance company is costing you nothing these are called wash loans or zero cost loans so step one to do this is you call your local bank and you ask them what interest rate they would charge you on a twenty five thousand dollar personal loan and how long they would give you to pay it back so they might tell you something like 10 percent and they’ll give you four years to pay back the money and they’re going to charge you about 634 dollars a month you really don’t care what the terms are you just want to find out what the terms are and the reason for that is instead of borrowing from the bank you’re borrowing the cash value from your policy using a wash loan from the insurance company so step two is you call your insurance company and you take the twenty five thousand dollar wash loan you then pay back the insurance company the the loan the wash loan using the same exact terms that you got at the bank the ten percent interest you would have given to the bank gets paid back into your cash account the insurance companies loan is paid off you’re 10 percent richer instead of your bank you just borrowed tax-free with a wash loan without any restrictions and you created wealth for yourself the money that you paid into your account that would have otherwise gone to your bank is again paid back to yourself in your account you became your own banker okay so pretty cool right well it gets even more exciting so let’s celebrate by saying happy retirement let’s look at the ultimate example this time you’re using your life insurance policy to create a future of tax-free retirement income okay so your goal is to grow your cash values in your policy into a retirement nest egg over time to create a tax-free retirement income after you retire in the future all right so you’ve been funding your policy and over time your index cash account value has enjoyed compounded growth and anywhere from five to twelve percent per year with earnings caps but with zero stock market risk or losses so you’re earning money in your cash account and it’s compounding all right so now you’re age 65 congratulations and you’re ready to retire so now you have a million dollars in your cash accounts and you have two options to take it out the first option is you can call your insurance company and you can have them send you a check for a million dollars the problem here is that you’ll get taxed on the amount that you earned above the amount you paid in so that’s one option but i don’t think it’s the best option the second option which one i which i believe is the best option is you can ask the insurance company to figure out how much they can pay you under the irs rules to pay you a lifetime of tax-free income okay they do so and now you’re getting forty thousand dollars per year for your entire life and all of it completely tax-free so now of course this is just an example your income is based out will be based on how much you put into a policy the terms of the policy how long you have it and of course the policy terms and earnings all right but in this example we followed the irs tax rules and created a tax-free income for life isn’t that great this is a fantastic tool if it’s used or if it’s used right so let’s take a look at the type of permanent life insurance policy that allows you to get these kinds of benefits so here you are contributing money into an indexed universal life insurance policy this is a permanent life insurance policy okay like all financial products a small fee is taken out by the company however the bulk of the premium that you paid in goes into the cash value of your policy and that’s what you use to build your cash value over life now as the cash value earns and compounds interest and grows in the policy periodically the life insurance company will withdraw the amount they need to cover the life insurance death benefit part of your policy so you have to cover the cost of the life insurance policy all right so this small red box represents the minimum amount the insurance company says you have to to buy the policy and to make the policy work and follow the irs rules now this much bigger box this much bigger box represents the maximum amount that the irs allows you to put into this type of policy and get out on a tax-free basis so you want to save as much as you can into this type of policy now usually when uh you know usually in my experience when the irs limits what you can put into a policy it’s uh into anything really it’s something it’s usually something that’s really very good okay so now all you have to do is to decide how much you want to put in between these two boxes the minimum amount and the maximum that you could save now before you could make that decision or answer that question on how much to put in you’ll probably want to know what the minimum and the maximum contribution amounts are for each of the boxes wouldn’t you it makes sense doesn’t it all right well this is where you need to contact me so that i can figure that out for you okay now using life insurance as a savings tool is not a new concept you know it’s the key that can be used to unlock future success in fact walt disney did that himself he borrowed from his life insurance back in 1953 to help fund disneyland this first theme park the reason he did that is because no banker would lend him the money that he needed okay john mccain united states senator and former presidential candidate he secured initial financing for his campaign and he used the life insurance policy to do that it’s a proven financial approach in 2002 doris christopher sold her kitchen tool company the pampered chef to warren buffett for reported 900 million dollars now seven years earlier she launched the company with a life insurance policy loan so you see this is not something that’s new it’s been around for a long time so i’m john davis again i’d love to help you i’d love to discuss this with you and i’d love to compute some numbers for you if you have any questions give me a call there’s my contact information on the screen also i want you to know that we’re totally you know covid safe if you want to meet in person we can do that but we can also do all of our business including completing forms and applications and signing things all that can be done across the internet so you can do that all from the comfort of your home completely covid safe and you can just be comfortable we could go through it together it’s not a big deal that’s i guess if you could say anything that came out of covid that was good it was the ability to be able to be covid safe so that’s it for now if you have any questions pick up the phone or send me an email i’ll be glad to help you have a good day i look forward to talking to you in the future

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