The Retirement Questions That Keep You Up at Night: And Why a Plan Beats an Opinion

Retirement planning isn't about having the right advisor. It's about having a real plan — one that shows you in black and white how your money holds up against taxes, inflation, market risk, and time.

Today, Stewart Smith and Mitch Davies tackle the questions that genuinely keep pre-retirees awake: 
Will I have enough? 
What will taxes do to my IRA? 
When should I take Social Security? 
Can we survive a major healthcare event?

These aren't hypothetical worries — they're conversations happening every week at ClearPath.

In this ClearPath Retirement Radio episode:

• Why "your advisor said you're fine" isn't the same as a plan and what that difference costs people
• The psychology of retiring after 30+ years: identity, anxiety, and the shift from saving to spending
• Mitch's Market Minute: What's keeping the market picture cloudy right now — the war in Iran, inflation, and record corporate earnings all at once
• Qualified Charitable Deductions (QCDs): The most-missed tax strategy for retirees who give to charity
• Withdrawal order: Why the account you tap first matters just as much as how much you've saved
• Roth conversions explained plainly — including the truth about the five-year rule most people get wrong
• The "magic window" between retirement and age 73 — and why it may be your best tax planning opportunity
• The tax torpedo and how it hits surviving spouses hardest
• How the One Big Beautiful Bill Act's extra standard deduction may create a short-term Roth conversion opportunity through 2028

This is the Season 1 finale of ClearPath Retirement Radio. We're taking a short break and coming back in June for Season 2 — recorded live from our Greenville office and available every week on Apple Podcasts, Spotify, and YouTube. 

If you've been listening this season, thank you. We're just getting started.

If any of this has been sitting with you, we'd love to help. Call us at 864-775-5033 or visit clearpathretirement.com to start the conversation.

ClearPath Retirement Planning serves pre-retirees and retirees across Upstate South Carolina, Columbia, and Western NC. We're veteran-owned, fiduciary, and planning-first — always.

Ready to stress-test your retirement plan?

ClearPath Retirement Planning helps retirees and pre-retirees in the Upstate SC and Columbia areas create tax-efficient retirement income strategies. 

📍 300 Executive Center Drive, Suite 104 | Greenville, SC 29615
 📞 (864) 775-5033

Schedule your complimentary consultation today at www.clearpathretirement.com

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Important Disclosure:

Investment advisory services offered through Alphastar Capital Management, LLC, a SEC-registered investment adviser. SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Fixed insurance products are offered through Clearpath Retirement Planning, LLC and Alphastar Capital Management is not involved in the offer, recommendation, sale or management of commission-based fixed Insurance products. Alphastar Capital Management and Clearpath Retirement Plannin...

Transcript

SPEAKER_00 0:00

Welcome to ClearPath Retirement Radio. From retirement income and tax planning to protecting the savings you've worked a lifetime to build. This is Real World Financial Talk designed for real people. People who want clear answers, not sales pitches, so you can make informed decisions and plan for retirement with confidence. Now, here are your hosts, Stuart Smith and Mitch Davies.

SPEAKER_01 0:22

You're lying in bed with your spouse sound asleep beside you. You peek over at the clock. It's 2 22 AM and you've been trying to get to sleep for hours. The problem is you're retiring in a few months from a company you've been working for for 32 years and you're anxious. What will it feel like not to work? It's been your identity, it's been what makes you you. And more importantly, will you and your family be okay financially? You've been diligent saver, putting away 10 to 15% of your income into the 401k for 32 years, and you've managed to accumulate quite an impressive balance. But lately you've realized a major portion of it is not yours to keep. How will taxes and inflation impact it? Are taxes going up in the future? When will I need this money the most? Are there steps I could be taking to help with this? When should I take Social Security? What about health care? This Medicare stuff is complicated. Can we afford to travel or help our kids if they need it? What if we have an expensive health care event and need skilled nursing care at $10,000 to $12,000 a month? Can we survive that? I'm Stuart Smith, the founder and president of Clear Path Retirement Planning. And the answer to these questions and many other important questions can't be answered by a person. They're answered by a plan. And that's what we do. Welcome into Clear Path Retirement Radio. I'm Stuart Smith and I'm here with Mitch Davies. Welcome. And we are going to talk about some of these questions that keep our clients up at night. And Mitch, I tell you, we do see a lot of anxiousness, a lot of worried folks. They come in and they're feeling pretty um uneasy.

SPEAKER_02 2:27

It's quite the story, Stuart. And you're exactly right. I mean, this is the kind of thing that we hear every week, right? Some variation of this. And it's it's so true. You people really tend to vest their identity and their career. And it's, you know, they're proud and they're doing this thing, and it's, you know, you've got that element, and then you've got the financial element, of course. And that's that fear is really what keeps people up at night. And that's what we're able to answer every week. And it's uh it's exciting. You know, it's really it's really comforting to be able to provide that insight to people. And it's uh we got an exciting show today.

SPEAKER_01 2:57

Yeah, I tell you, um, I'm going through a I'm going through it with my own brother right now. My brother is getting ready to retire. He is the ripe old age of 58. And he has worked really, really hard. And he's been with the can't same company for I don't know, 18, 19 years. This is his second company that he's worked for in his his life, and I tell you, he is just, you know, he knows, and I keep reassuring him that he's going to be fine, and we've done the planning, we have everything in place, but it's still very, very difficult to make that transition. And, you know, when you start thinking about, oh my gosh, like I'm going to transition out of this place where I am putting money into these accounts, and my employer's putting money into these accounts, and they're growing, to all of a sudden we flip a switch and we're not putting money in, our employees not putting money in, and now we're just spending it, and they possibly might go through a period where they're not growing but they're shrinking, that can cause a lot of anxiety in folks. And you know, that's why it is so critically important to not sit across from an advisor that is just going to tell you everything's gonna be fine. Don't put your faith in somebody's opinion, put your faith in a plan, a real plan that someone uh shows you in black and white, goes through the numbers with you, models through the scenarios that most worry you, you know, what are taxes gonna do? What is inflation gonna do? What is, you know, a major market correction? How's that gonna feel? Am I going to be able to get through that? That is where you put your faith in the real planning end of things. And that's, you know, I'm really proud to say that that's what we do at ClearPath Retirement Planning, and and I think Mitch understands that and knows that well as he's been by my side for the last three years and been able to see, you know, firsthand the type of planning that changes lives.

SPEAKER_02 5:32

I mean, that makes me that reminds me of a you know, we sat down with a prospect a month ago, and they had been working this exact scenario. He had a great income with a company, he's been working there for 25, 30 years, he was working a lot of hours. He was working 60 hours, he wanted to retire as soon as he could. And he came in, he said, Yeah, my you know, my current advisor said I could retire last year, right? But he didn't he didn't believe it. Not that he didn't trust the guy, not that he didn't think he was a good advisor, but he didn't see a plan. He didn't see anything that said he could retire. He just said, Yeah, the advisor said you've got enough investments, you know, if the market does well, you're good. But like he needed something. He needed to really see and understand. And what we were able to do is take him through our clear path retirement process, which really dug much deeper than he had ever dug. And he got to learn a lot. And it was a very insightful process. And at the end of it, he was able to see that you know he now he's going to retire at the end of the year, right? And it was such a cool experience for me to be a part of. And it's like that's the most valuable thing we can do is open it up to a whole different way where you can really see how does and you know, how how can I actually retire?

SPEAKER_01 6:31

Yeah. And what a lot of people worry about is, you know, retirement planning sounds good. It sounds like something that I could potentially need, but what is the true cost of having a retirement planner and someone who is really going to guide you step by step through all of the hard decisions that need to be made, all of the various, you know, strategies and things that that you know need to be utilized in order to live the most efficient, you know, most full rich retirement possible. And you know, my answer to that is what is the cost of not having that person, right? Like what any good retirement planner should bring enough value to the table to where cost is just an afterthought. They are actually helping you to save more, you know, fees only matter in the absence of value. And when you say that time and time again, when people get caught up on fees, anybody who manages your money, anybody who gives you any kind of advice is going to charge you a fee. So to have someone who is, you know, doing nothing but retirement planning, someone who is focused, lives, eats, and breathes, and sleeps this stuff, to have that person in your corner as opposed to someone who's just really good at giving investment advice, or someone who, you know, is only good in one of these areas, we are good in all of these areas because that's what we spend our time doing. I've spent the last two and a half decades learning these strategies, learning how to design and structure things to a way to where you have the absolute highest statistical chance to meet your income goals and live the best retirement you can. So why would you not take advantage of that? You know, I just I truly don't understand the fear there. I mean, it it honestly, it's it's the fear is is not rational. Right. And, you know, what people need to do is understand that that, you know, you don't have to make some big commitment on the front end. You can come in, we can sit down, we can share our views with you, we can show you kind of the blueprint for what we would do if you worked with us before you make a big decision. And if you decide that that doesn't feel right for you, we'll shake hands and walk away and be friends. That's right.

SPEAKER_02 9:18

I think the biggest thing is, you know, Stuart, people don't know what they don't know, right? And a lot of people's only say you're getting close to retirement, maybe your only experience with a financial advisor was someone at a bank, right? And they're like, hey, like, why am I going to pay this guy 1 percent to invest my money when I can do that? And we hear that all the time, right? That's a and that's a fair thought. But what they don't know is all the different levels to retirement income planning, all the things that we talked about. You know, we do estate planning and we do trusts in our office, you know, an attorney-driven process. We do a much higher level of planning that's not in the realm of just investment advice, right? And that's where the fear is. People are like, oh, I don't want to pay somebody when I could just invest in the SP or something like that, right? So there's so much more to it. And I think you know, having at least taking a taking a minute, you know, come in and talk, and we can take you through that blueprint process and kind of build out that plan for you and let it just see what it looks like.

SPEAKER_01 10:09

Yeah, and I can tell you that having, you know, going through the clear path retirement checkup, going through our process where you really we take a look at the big picture, we really, really dive deep into, you know, all of the things that are keeping you up at night and the things that that are really causing you anxiety as you start to enter into this transition period. And I can tell you, you know, again, giving up your identity, the the thing that's made you so you for the last 30, 40 years, and working in that career or that job and and and dealing with those people on a daily basis, if you know, making that transition to oh, you know, all of a sudden I'm waking up and I have nowhere to be and no, you know, nothing that I have to do today, that's scary. It is. And we understand that is a scary process mentally, much less to worry, have to worry about the financial side of things. Yeah. But, you know, it's so much easier when you have the financial things buttoned up, you have you know, been through the process, now you have the confidence of knowing we're going to be okay financially, then you can just put take that off the table and focus purely on the emotional and psychological side of it. If this is something you're going through, if this is something that's been eating at you and you just don't know where you stand, we're here. We're here to help you, we're here to listen. Go to ClearpathRetirement.com, let us know you want to talk, we'll be right back. Hey, are you approaching the distribution phase of life where it's time to turn the assets you've worked so hard to accumulate into a reliable retirement income? And are you unsure how to do that in the most tax-efficient way possible? At Clear Path Retirement Planning, we help retirees and pre-retirees design income strategies that aim to reduce taxes, manage risk, and create confidence in retirement. Visit ClearpathRetirement.com to schedule a complimentary consultation.

SPEAKER_00 12:28

Thanks for tuning in to Clearpath Retirement Radio with Stuart Smith and Mitch Davies. Let's get back to the show.

SPEAKER_01 12:34

This is Clearpath Retirement Radio. I'm Stuart Smith here with Mitch Davies. We're talking about those, you know, that big transition that people make from stepping away from a career, something that's been their identity for 30, 40 plus years, and making that transition into a lifestyle where, you know, you don't have anywhere to be, you don't have anything you have to do. And for most people that seems like a really great thing, but for a lot of people that causes a lot of fear and anxiety, and they have to kind of find a new identity and who they are in retirement. And, you know, it's it's been an it's been an interesting case study for the last two and a half decades for me to watch this process and see what people go through. And I think I have a learned a lot.

unknown 13:29

Yeah.

SPEAKER_01 13:29

And I've learned, you know, the main thing that I've learned is there's three things that people are looking for, Mitch. Three main things they're looking for. They want to make sure that their money that they've worked so hard to accumulate is protected. They want to make sure it's safe. Yeah. They want growth because you have to have growth. It can't just stop, right? And they want income. Yeah. Fair? Super fair. I mean, that's what people want in retirement, and that's what we help people achieve. And we have proven methods that we've used time and time again for two and a half decades, that we've gotten better and better and better at doing for our clients that allow them the freedom to know their money's okay, they're getting the growth they need to at least keep up with inflation and maybe beat it, and they've got the income that they need. And you know, those things that come up with life, because life happens, and that's the one thing I can tell you is life definitely happens. You know, you wake up one day and realize we need a new roof, right? The roof is is is damaged and we need a new roof, or you wake up and the H V A C is gone out and you need a new heat and air system in the house, or one of the kids comes knocking at the door and they're here to let you know that, you know, they just you know, their wife just filed for divorce and they're gonna need to stay with you for a while and until they can get back on their feet and oh, by the way, I need to borrow some money um to get through this divorce. I promise I'll pay you back. Um, you know, we've seen it all. We have seen all of those things and more. And what you need to be is clear and and understanding can we do this stuff? Can, you know, can I lend my child money? Can I help them get through this rough spot? Is it gonna cause us issues? Is that gonna be a problem? You know, these things are just what happens in life, and and you've got to know where you stand at all times, and it's never more important than when you're retired and now you're not working for money anymore. Your money's working for you.

SPEAKER_02 16:04

That's exactly right, Stuart. You know, we like to say you want to prepare to have you want to prepare to life to have life happen for you, not to you, right? You want to be in retirement and life's happening with you and your plan for all these unforeseen things. And a lot of what we do is spent talking about things that could happen. And sometimes they don't end up happening, right? But we're accounting for everything that could happen. And you what we've seen, it's so, you know, it's the most common theme, is you're much more aware of these types of things when you're not working, right? A lot of people, oh, I mean, yeah, I just you know gave the kids a little bit of money for this, or spent a little bit for the grandkids on this. You it's not you're not as conscious of it because you've got a ch paycheck. You know, you've been working, you're probably making good money late in your career. But the second it stops, I mean, we've got we talk to people all the time who don't never watch the market, never cared about the stocks, don't know anything about it while they're working. They're just contributing. But the second they retire, all of a sudden they're spending hours a day looking at their accounts, right? And that's what we try to help avoid, is give you that confidence to not have to do that. That's what we don't want to happen, but we see it all the time. So you're never more aware of these unexpected expenses when you're in retirement and you don't have that paycheck coming. So that's why we need to make sure life's happening with you, not to you.

SPEAKER_01 17:14

Yeah. Yeah, I like to talk about it sometimes, how much um of a hiking nut I am. And, you know, I just when I'm not retirement planning, which is my first passion, my second passion is being up on a mountain on a trail somewhere. And you know, uh up on the mountain hiking a few years ago out in Jackson Hole, Wyoming, I was, you know, doing a major hike up there, and I just, you know, it dawned on me and I got to really thinking about how much hiking is like retirement planning. Yeah. And we talked about this recently, and like, do more people die climbing Mount Everest or coming back down? And, you know, was really surprised to find out that actually more people die coming back down than actually climbing Mount Everest. And, you know, when you get to really analyzing that, you think about why is that? Well, it's probably because they are so hyper focused on getting to the summit and hitting their goal, their life goal, and checking that box that they've put all their time and energy and and everything they had into getting there. And then once they achieve that, they they're tired, they get complacent, and they start making mistakes, underst and they just don't understand they're only halfway there, right? And and you know, coming back down is is just as much work as going up, if not more. Because I don't know if you've ever climbed a mountain, but I can tell you that that it hurts less climbing than it does coming back down. You know, so what we you know to to give you that analogy, what what I see is we meet tons of people that come into us who are really good at getting up the mountain. They're really good at saving money, investing money, growing their assets, and getting to that summit, so to speak, which is the retirement. But once they kind of get there, they kind of lose focus and they're like, I did it, I've already done it. And they're only halfway through the voyage. And what happens is is they start to get complacent. They start to pay a lot more taxes than they probably should because they don't understand, you know, tax efficiency in retirement. They stay invested the way they did when they were accumulating assets. And I can tell you that investing in retirement is a totally different ball game than investing when you're accumulating assets and making contributions and getting employer matches and all of that. Right? It's just a totally different deal. You have to really understand how your investments should be, you know, allocated, how they should be set up ahead of time as you go into retirement. You need to make dramatic changes to how you think about investing. And a lot of people just don't do that. And they they end up taking too much risk and they don't ever, you know, moderate their risk to to be more in line with what it should be in retirement. And they start to to make little mistakes like, you know, bringing in too much money to qualify for certain tax breaks that they could be getting, like the one big beautiful Bill Act just just put into place. Or they, you know, they start, they they they go over certain thresholds with money that they don't even need. They didn't even need to be taking, and they just put it in the bank when what they really should have been doing is just leaving it in there, leaving their income lower so that they didn't hit certain thresholds to have to pay higher taxes on their social security or, you know, um their IRAs as they start to grow and and and they didn't they didn't understand these Roth conversion strategies and these, you know, tax lost harvesting strategies and these real, real beneficial tax strategies that that really work in retirement and really help you to avoid paying way too much in taxes. So they don't they're just not versed in this stuff. They don't understand, you know, why is you know why all of a sudden do I pay more for my Medicare Part B than everybody else does? And I I don't understand what happened, what did I do? And it's just we see it all the time, Mitch. These people don't understand. Understand they are so good at the first part. Like they're really good at using their gut to make great investments. Right. But in retirement, it's not it doesn't work that way. And they have to learn the hard way. And for me, what I see is why even accumulate all those assets and grow all those assets to the point if you're just going to be super inefficient in retirement and end up, you know, not getting nearly the benefit you should be getting out of all the money that you've worked so hard and taking all that risk to save when you just need to understand that retirement planning is a different landscape and it's a different deal. And you know, there's just a lot going on that that you could easily miss things. You can easily make drastic mistakes that cost you big time. And that's what we help people avoid. That's what we do, that's where our expertise lies in helping you to navigate that landscape and helping you to understand that it's it life has changed. It is a different ball game. And when you change gears and you go into that distribution phase, and now it's time to start using all of those assets you've worked so hard to save to generate an income, it's a different ball game. And you better know what you're doing. And that's what we can help you with at ClearPath. That's what we do. Like I say, we live, eat, breathe, and sleep this stuff. It is what we live for, it is what we are passionate about. And if this stuff is confusing to you, if you don't understand, you know, what I'm saying here, and you want to get real clear and you have questions that you want to ask, please go to Clearpath Retirement.com. Shoot us a message. Let us know what's on your mind. Let us know, you know, what is it that that that you know we've talked about today that that isn't sitting right with you and that you want more information on. You know, is it, you know, is it tax strategies to help you be more tax efficient? Or is it something to do with estate planning and and having a trust in those sort of things? We're going to continue this, guys. We'll be right back. Retirement planning isn't just about growing money, it's about using it wisely, generating income, managing taxes, planning for health care costs, protecting your legacy. At ClearPath Retirement Planning, we specialize in helping retirees and pre-retirees transition from accumulation to distribution with confidence and clarity. If you're approaching retirement and want to plan, not just opinions, discover the Clear Path difference. Visit ClearpathRetirement.com today.

SPEAKER_00 24:56

Welcome to Clear Path Retirement Radio. From retirement income and tax planning to protecting the savings you've worked a lifetime to build, this is Real World Financial Talk designed for real people, people who want clear answers, not sales pitches, so you can make informed decisions and plan for retirement with confidence. Now, here are your hosts, Stuart Smith and Mitch Davies.

SPEAKER_01 25:18

This is Clear Path Retirement Radio. I am Stuart Smith here with Mitch Davies. And it is time for Mitch to update you on the markets with Mitch's Market Minute. And um take it away, Mitch.

SPEAKER_02 25:33

Thank you, Stuart. I'm uh I'm excited as always. We're going to keep the same structure. We're going to talk about where we're at today, uh, what we're watching, what's going on, all that fun stuff. So, you know, we're in the midst of the same stuff we've been dealing with. The markets are doing well right now, uh, but we've still got this conflict overseas, we've still got some inflation worries. And you know, Stuart, we were talking this morning, or maybe it was yesterday, and we said that the market's at an unprecedented point right now, right? It's hard to gauge what's going on when you've got all these different things going on, but the war is kind of clouding everything. It's like, how do you look under the hood and see what's really happening in the market? Right? It's it's really tricky today. And you know, the three things that are happening that we want to focus on are obviously the war overseas, you know, we've got, again, some mixed ceasefire, no ceasefire, there's a lot of back and forth there. And at this point, we're just like, we're not following the daily tweets. It's so hard. Every day there's some new report about there's going to be a ceasefire, there's not going to be a ceasefire. Um and if you're not aware, we're talking about the war in Iran going on right now. Um the second thing going on is inflation. You know, we're obviously you guys when you see, when you go fill up your cars, you're seeing, you know, here in South Carolina, we're in the high $4, almost $5 for regular gas. Uh the grocery store feels expensive. Inflation is high right now. Uh we're coming in at over 3.8 percent year over year, which is high. And the third thing we're watching is stocks are doing very well. And it's this is what makes it unprecedented. Is we've got record earnings across all the biggest companies. You know, all the biggest companies in the market right now are earning a lot of money. They're doing they're very efficient with all this AI, with these new advances in technology. Companies are earning a lot of money, inflation's high, there's a war going on, and we're at all-time highs in the stock market. So it's very tricky to track this stuff. And you know, this goes perfectly with what we're talking about today. If you're somebody who hasn't been following this your whole life, hasn't make a profession out of this like we do, and you're stepping into retirement from your job and you never learned this stuff, you had no reason to learn this stuff, and you're stepping into retirement, you're trying to figure out what's gonna happen today, it's almost harder than ever. It's more confusing and more there's more conflicting things happening than ever where there's professional money managers who don't know exactly what's gonna happen, right? People that have been doing this their whole lives. So the biggest takeaway I'd say is if you're again stepping into that phase and you're trying to follow all this stuff, you know, this goes back to the way we structure retirement income planning is so different for a specific reason. If you're 20 years old and you know you're starting your working career and you're just trying to invest as much as you can, this isn't as much of a concern, right? We've got all the stock market history to tell us that over a certain amount of time, we'll always be profitable, right? Since 1920. If we just leave our money in long enough, we'll eventually make money. Most people understand that. But what they don't understand and what's impossible to understand is what's gonna happen in the next five years, right? Nobody can predict that perfectly. I can't, Stuart can't, nobody in the world can, right? All we can do is say, what are the what's the range of outcomes? What are the things that could happen? And how do we structure our clients who are all either retiring or retired to be in the most successful position to do the three things that we want to do? To get some growth, protect our money, and have income through retirement. And that's the foundation of what we do at ClearPath Retirement. That is the bread and butter of the ClearPath retirement process. And that's what it all boils down to because most of our clients, Stuart, are not professionals in this, right? They don't know this stuff, they don't understand, they're not watching company earnings like we are, they're not following inflation reports, they're not watching every day to see what's happening overseas. And even with doing all that, it's still hard to predict. So the biggest takeaway is have a plan, have a process, have a team that is doing this stuff professionally to help you navigate through that. Otherwise, it's it's tougher than ever, man.

SPEAKER_01 29:23

Yeah. I just don't see us really being able to get our finger on the pulse of really any clarity whatsoever with the markets until we get this, you know, we get this this war worked out, until we get, you know, the the the Straits of Hormos opened back up and and things flowing the way that they they should be, because until then, it's just uh and any expert that gets on TV or or the radio and says different, I mean, they they don't know. I'm telling you. This is it's the way too cloudy right now. We don't understand, you know, what how this all the different ways that this is impacting the markets and and the economy and and how things are are stagnating and being held up, and you know, fuel's just one of the many, many puzzle pieces that that get you know affected by this. But, you know, I can tell you that, you know, in times like these is when you really gives you peace of mind to know that that you are your investments, your assets are all structured in a way that that you know you're gonna weather this and and you have things set up in a way that gives you the confidence to not have to watch the news and not have to, you know, pace a hole in front of the TV and and worrying about you know what's gonna happen next. That is no way to live in retirement. And you know what we want to do is take that off of you, give you the confidence to walk away from all that and go have you know the retirement that you really want where you're just not worried about this stuff. It's just you understand that you know, even you know, there's gonna be ups and downs, but you are, you know, your assets are situated in a way to where you, you know, you can weather it. You you you can you know you can get through it and and you're confident knowing that you're going to be okay. So, you know, some of the things that that I want to talk about here in this segment is, you know, one of the things that we see, and and we're just talking tax efficiency right now, and one of the you know things that we've talked about with folks recently and I want to bring up is you know, this whole um qualified charitable donation thing. Yeah, yeah. Um I it surprises me that more people um don't understand this or are missing the boat on this. So I just want to mention it today on the show. Um, you know, once you get to be age 70 and a half, and you are charitably inclined, and that means you are giving money to a church, you're giving money to any 503C nonprofit, any any charitable activity that you have in your life, and and we're in the South, so a lot of people are charitably inclined, and most people are tithing to their church. You need to make sure that when you get to age 70 and a half, that you change how you are making those charitable contributions. Most people are giving the church money on a weekly basis. Um, most people are are just giving them money, and then at the end of the year they might be claiming a charitable deduction on their taxes. Once you get to age 70 and a half, you are allowed to do what's called a qualified charitable donation, and that is where you are able to give money directly from your IRA or pre-tax account to the charity. And as long as it doesn't go through your hands first, and it goes directly from your IRA to the charity, that money comes directly off the top. It's not a charitable deduction, it comes directly off the top of your taxable income, just like a standard deduction would. And it is a much more tax-efficient way to be giving money to your church. And you need to understand that. And if you're not doing that, then please give us a call at 864-775-5033 or go to ClearpathRetirement.com and let you know let us know that you want to sit down and let's get that set up to where you are doing that directly from your IRA. You can still do it, you know, with most custodians, most places that hold the money will still allow you to do it, you know, on a monthly basis. Um and um maybe at worst case it would be just on an annual basis, but you do the same amount you would have done for the whole year, you just do it at once. And you know, most churches are not gonna mind that whatsoever. Um and they can work that into their cash flow and their, you know, their their planning and how they do things. But trust me, that is one of the things we see people miss the most.

SPEAKER_02 34:47

All the time. And we'll see people who are talking about we'll talk about Roth conversions, and they're like, Yeah, yeah, no, I'm doing Roth conversions, right? Like I'm trying to get it all done. You know, everybody wants to try to get money converted before they turn 73. Because at 73, you have to start taking those required distributions where you have to take the money out and pay the taxes, right? And so people will be doing Roth conversions and we'll ask about qualified charitable donations, and they're like, no, I don't. So if you're doing Roth conversions, if you're trying to get that pre-tax money out, which is a lot of times our goal, the QCD, the qualified charitable deduction, is a really good way to just add a little bit more to that, right? Knock down that income. Just like when you're working and you contribute to a 401k, comes right off the top of that income before the standard deduction. So it's stronger than taking an after-tax deduction on that money. Trevor Burrus, Jr.

SPEAKER_01 35:32

And it counts towards your RMD. Yep. Like a lot of people miss that. Like this counts towards your RMD. So that is money that counts towards your required minimum distribution, the money you have to take, and also comes right off the top. Yeah, it's a double tax benefit. And, you know, you can do up to $108,000 a year out of your IRA through ch qualified charitable donations. And, you know, since it reduces your taxable income, it could keep you from hitting thresholds that you're hitting. It could keep you from hitting IRMA thresholds, or it could keep you from, you know, hitting um the threshold for the extra deduction on the one big beautiful bill act. Right. And that's just smart planning, guys. Like that's just, you know, you need to understand that. That is probably the best kept secret that there is out there. And, you know, the other thing I want to put on your radar is through 2028, you're getting that extra standard deduction for a married couple of twelve thousand a year on top of the already great standard deduction of what, 31.5 that married couples get in this country. And, you know, what a better time to, you know, what better time would you have to be thinking about doing some small Roth conversions than while you're getting these extra, you know, standard deductions. That's, you know, $12,000 a year of money that you could be converting really at no, you know, extra cost to you. And, you know, that is something that, you know, if you've thought about doing them, you're you're confused, you're not sure about the Roth conversions. I mean, starting there would just be make perfect sense. And so, you know, a lot of people are are like already required minimum distribution age and they're worried about, you know, well, how does that affect my required minimum distribution? Well, you just have to take your RMD first, right? And then once you've taken that, you can convert in addition to what your required minimum distribution is. And, you know, you can still do it. It's still very doable, and it's still going to help you tremendously in the long run. When you do Roth conversions, you've got to be thinking long term. You got to really be thinking over about 25-30 years about the benefits in that. And if, again, if that's something you've been thinking about, you're not sure about, give us a call, 864-775-5033, or go to ClearpathRetirement.com and just hit that get started button now and just send us a message. Let us know, hey, this is something I've been thinking about. Can you guys help me get clear on this? And we'd be happy just to sit down and have a discussion. No pressure, no obligation to you whatsoever. Guys, we will be right back for our last segment. Are you a business owner with an email list you are not sure is actually growing your business? Most business owners are just guessing, sending emails, hoping for a click. At Kathy Farah Consulting, we take guesswork out of your email marketing. We help you identify what's working and fix what's broken, turning your list into a reliable engine for better leads and consistent sales. Stop wondering, start growing. Visit KathyFara.com to book your free email clarity call today. Let's make your email marketing work smarter.

SPEAKER_00 39:04

Thanks for tuning in to Clear Path Retirement Radio with Stuart Smith and Mitch Davies. Let's get back to the show.

SPEAKER_01 39:10

This is Clear Path Retirement Radio. I'm your host, Stuart Smith, here with Mitch Davies as always. Welcome back. We are today talking about, you know, common things that we see where people kind of miss the boat and and cause them issues in retirement, things that, you know, maybe not everybody understands or is on everybody's radar that we want to just kind of bring up and just make sure that at least it's on your radar and you kind of, you know, you can kind of understand that these these things are out there and and things you need to be looking out for. We just talked about qualified charitable donations and how those are so often missed. And, you know, another thing that I think is is very um uh misunderstood and not totally, you know, where people really are inefficient is what accounts they access when when it comes to retirement. We call that withdrawal order, and that is, you know, do I tap the IRA first? Do I spend my savings first? Do I spend Roth money? Do I, you know, spend money from my brokerage account? You know, all of those accounts have very different tax consequences associated with them. You know, your IRAs are pre-tax money that have never paid taxes on, so whenever you do access that money, it's all taxable as income. And then, you know, the brokerage accounts are a little different. They're, you know, the money that you put into a brokerage account is after tax money that you've already paid taxes on, but you have to pay taxes on the growth in that account as you go forward. And then, you know, your bank accounts work the same way. If you have a high yield savings account or a money market account, you've already paid the taxes on the money you put into those accounts, but you still do have to pay taxes on the growth in those as well. And finally, Roth money, you know, Roth money is magical because Roth money you put in after tax money that you've already paid taxes on, but the real treasure there is that you never pay taxes on the growth. And you know, we hear a lot of people say, yeah, but you can't touch it for five years. And that's just not true. No. So the five-year rule applies to only the growth in a Roth account. You can't touch the growth for five years if you want it to be not taxed. But you can always get back to the money that you originally contributed into the Roth. That's right. So don't let that keep you back, right? I love this line that that I heard recently. It says the IRS is your silent partner and your IRA. Roth conversions are how you buy them out at today's prices. Right? That's good. That's good. Yeah, that's good. Right. So think about that for a minute. You know, do you want to be have it held over your head that you're, you know, every time you take money out of your IRA, a portion of it has to go to the IRS and never know exactly what that portion is going to be. I mean, we ask all the time when we're doing workshops with folks, you know, how many people here think taxes are going down in the future? Nobody raises their hands. And we have not had a taker on that in a quite a while. So if that's the case, and if you are truly believe, as we do at the firm, that taxes are only going up in the future, and you've saved all of your money for retirement in a pre-tax account like an IRA, would it make sense to potentially start taking some of that money as it makes sense and going ahead and biting the bullet, paying the taxes on it now, and getting it over to a Roth account where that money can grow tax free and you never have to take required minimum distributions from it, you never have to pay taxes on that money again, and not only that, but if you leave that money to someone else, they never have to pay taxes on it. Would that make sense? Is that logical? And I'd have to say most people see that that is absolutely the right play and the way the right way to do things and they're very confident that that is going to help them with their overall tax picture. So, you know, back to withdrawal order and what accounts you take when, right? Like you either determine your withdrawal order or the IRS decides your withdrawal order. Yeah. Right? Because you know, if you are not aware and you are saving money and pre-tax accounts like an IRA, for example, at s at a certain age the government is going to say to you, and for most people it's it's around 73, the government is going to say to you, you've enjoyed tax deferral on this money long enough, it is time for you to start taking a percentage of this account every single year and paying the taxes on it. Because we are tired of waiting on our cut. Right? And you know that is called a required minimum distribution and that is what clouds the tax picture so much. Because if you could just keep deferring it forever then we could we could control the taxes so much better because we could only take money when we absolutely needed to take money and pay the taxes on it then. But that's not the case Mitch I wish and people just need to get that through their heads is that at some point if you just let that IRA continue to grow and you never come do any conversions or get start getting the money out of there that just means bigger required minimum distributions when the time comes those required minimum distributions are considered income, right, in the year that you take 'em so that can push you up into a higher tax bracket and push you up into getting more of your Social Security taxed. It can push you up into missing out on you know tax breaks that that go away at certain thresholds. It really can determine you know a lot of things for you. So you need to take control of that. And the way you take control is you do that on your terms. Right. You move the money out of the IRA and pay the taxes on it on your terms and you control that and if you're really smart between age of retirement whatever that is for you and age 73 you get all that money out of that IRA over into a Roth so when you hit that required minimum distribution age you you don't have to do RMDs. You don't even have to think about it. Right? That's the magic window we call it that is the time to be aggressive and a lot of people it's hard for 'em, I get it. It's really hard to see the big long picture and to think, well what if I don't make it to 73 and I just paid all these taxes for nothing. Well that's the risk that you got to take and that's why we have these conversations about, hey, you know, how healthy are you? Right. Right? What is longevity look like in your family? I mean if you think you're going to live to age ninety, then getting it all out before you're 73 and then having all that tax-free money between 73 and 90 is is huge on your overall tax picture and and really frees you up to live a different lifestyle because money you take out of a Roth is not even considered income. Right. And it can put you into a zero taxes on your Social Security and put you in give you the most tax benefits that you could possibly have. But you got to get real like do I really expect to live to ninety because if you don't then maybe it doesn't make sense for you. But that's that's why you gotta have a plan. That's why you gotta have you know a real you know advisor that can kind of talk you through and understand all these different you know variables that are going on here to make you you know to really understand like does this benefit me? And I can tell you even if it doesn't benefit you it's going to benefit either your spouse or your children. Right. Because if you get that money to a tax-free state and something happens to you your spouse is way better off. Yes right? Because the minute something happens to you now the standard deduction gets cut in half on on her taxes or his taxes now the the all the thresholds come down for to be a single person as opposed to to a married couple. And you know we kind of call that the tax torpedo where you can really leave somebody in bad shape if they if all you're leaving them is IRA money. Right. Because now they have to take a lot more money out and and pay a lot more taxes in order to get the same lifestyle.

SPEAKER_02 49:28

So you know these are all things that you need to be thinking about but these are the real conversations that we have with people and this is the you know we have to really get down to the nitty gritty with them where the rubber meets the road and find out what makes sense and what doesn't we do and you know the the most common mistake people make without understanding all this, without knowing all this, you know, because you don't know what you don't know is people will you know work hard, they're getting getting into a high tax bracket towards the later end of their career, they finally get into retirement, they've saved some money in a bank or in CDs or something and they're like, Stuart, I don't want to I've been paid all these taxes, I want to be in a low tax bracket. You know they get their first they're in their mid-60s and they're in a 12% bracket for the first time in a long time. And they're like cool I just want to keep spending this bank account money. And then what happens is they end up living to 87 and in their 70s and 80s they're in a higher tax bracket than they would have been had they had a conversion schedule, had they done this kind of planning. But they don't know what they don't know. So they let the you know the government set the age for the RMDs at a good time. You know they've thought all this through right they're actuarily they know that if they defer it longer they're going to get more money. And they know most people are going to people kind of get into retirement and are scared of those IRAs. Like I don't want to pay any more taxes right I don't they almost shy away from them and they try to just spend all the after tax money they can. But if we can be intentional with that like you said we can decide the withdrawal order not the government.

SPEAKER_01 50:52

Yeah well listen I hope you guys have enjoyed the show today if any of this has struck a chord with you if any of it is something that you want to find out more information about we'd love to hear from you at Clear Path Retirement Planning. We are an upstate retirement planning firm here in Greenville South Carolina serving South and North Carolina we are veteran owned and operated and if we can be of service to you please give us a call 864 775033 or visit us at our website ClearpathRetirement.com. We're also on YouTube. Check out our YouTube channel and until next week everybody have a happy retirement. Are you anxious to see what retirement might look like for you? Do you feel like you have the pieces of the puzzle but you're not sure how they fit together or where to start? At Clearpath Retirement we help you bring clarity to retirement by organizing your income, taxes, healthcare decisions, and legacy planning into one cohesive plan. Retirement doesn't have to feel uncertain. It just needs a clear path.

SPEAKER_00 52:00

Schedule your complimentary consultation at Clearpathretirement.com You've been listening to Clearpath Retirement Radio with Stuart Smith and Mitch Davies, helping you make informed decisions so you can plan for retirement with confidence. To learn more visit Clearpathretirement dot com. That's Clearpathretirement dot com. Investment advisory service is offered through Alpastar Capital Management LLC, a SEC registered investment advisor. SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the advisor has attained a particular level of skill or ability. Fixed insurance products are offered through Clearpath Retirement Planning LLC and Alpha Star Capital Management is not involved in the offer, recommendation, sale or management of commission based fixed insurance products. Alpastar Capital Management and Clearpath Retirement Planning LLC are separate and independent entities. This is for informational purposes only and is not intended as legal tax or investment advice or a recommendation of any particular security investment product or investment strategy.