In this episode of Protecting and Preserving Wealth, we delve into the updated 10-year IRA rule for beneficiaries, finalized by the IRS on July 18, 2024. Under the old Strech IRA rules, beneficiaries could stretch out Required Minimum Distributions (RMDs) over their lifetimes, creating a favorable tax strategy for passing on wealth. However, with the finalization of the SECURE Act regulations, the 10-year rule now applies, requiring beneficiaries to thoroughly distribute inherited IRAs within 10 years, limiting the potential for long-term legacy planning.

The rationale behind this change is to ensure the IRS receives its share of taxable income more quickly, as opposed to waiting decades under the stretch IRA framework. This shift in perspective also means that the IRS no longer views the passing of retirement savings to the next generation as something that should be drawn out over time.

We also explore the nuances of the required beginning date for RMDs, which has been extended to age 73. However, clients are advised to start taking distributions IN the year they turn 73 rather than waiting until the following year to avoid doubling their taxable income from this source. If an IRA owner dies before their RBD, no RMDs are required during the 10-year window. Still, the entire account must be distributed by the end of that period. Conversely, suppose the owner dies after their RBD. In that case, beneficiaries must continue taking RMDs based on their age, and any delays could result in substantial tax hits later on.

We stress the utmost importance of proactive planning, particularly for beneficiaries of large IRAs who may face significant tax burdens if they wait until the 10th year to withdraw funds. A million-dollar IRA, for example, could double in size, leading to a massive taxable distribution. To mitigate this, it’s often beneficial to take distributions gradually.

Finally, we touch on the benefits of Roth IRAs in this context: While Roth IRAs are also subject to the 10-year rule, they are not subject to RMDs during that time, allowing tax-free growth for the entire period. Beneficiaries should wait until the end of the 10 years to maximize tax-free withdrawals.

In conclusion, the new 10-year rule presents challenges, but with careful planning, including the strategic use of Roth IRAs, beneficiaries can still preserve wealth efficiently. For personalized advice, we encourage listeners to reach out to Hosler Wealth Management.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

In part two of our series with estate attorney Jon Linford, we dive into crucial estate planning considerations as we approach the 2026 sunset of the Tax Cuts and Jobs Act. The primary focus is on the significant changes to the estate tax exemption that will occur when the current law sunsets, reducing the exemption from $13.6 million per person to an estimated $7 million.

We discuss the implications of this change and the urgency for individuals to update their estate planning strategies. Jon Linford explains that the estate tax is a substantial 40% on amounts above the exemption, making it critical for those with sizable estates to act before the exemption decreases. With the upcoming elections and potential legislative changes, uncertainty looms over what the final tax laws will be. However, Linford emphasizes that waiting until 2025 to begin planning could be too late, as advanced strategies like gifting or setting up irrevocable trusts require significant time to implement.

Bruce highlights his recently published book, "Moving to Tax-Free," which introduces the concept of a two-generation tax-free legacy plan. This strategy involves using a revocable trust that becomes a dynasty trust upon the parents' passing, protecting assets from lawsuits, divorce, or bankruptcy while potentially providing tax-free income to beneficiaries. Jon Linford elaborates on the flexibility and protection these trusts offer, ensuring that the legacy left to children is secure and adaptable to various circumstances.

Estate planning is not one-size-fits-all. Every situation is unique, and having a professional team in place is essential to create a plan that fits individual needs. Jon Linford urges listeners to be proactive in their planning to avoid leaving a burden on their loved ones.

Contact info for Jon Linford and Morris Trust: https://morristrust.com/

Phoenix: 602-249-1328

Northern Arizona, 928-774-0333

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

In part 1 of our Estate Planning Podcast Episodes, I welcome Jon Linford, a seasoned estate planning attorney from Morris Hall. We delve into the complexities and critical considerations of estate planning, a topic of utmost importance for anyone concerned about their financial future. Jon, who has been practicing law since 2011, transitioned from civil litigation to estate planning, driven by a passion for protecting clients' assets and ensuring smooth transitions for their estates.

The conversation centers on the benefits and nuances of setting up a living trust, particularly in Arizona. Jon emphasizes that while not everyone may need a living trust, it offers significant advantages, especially in avoiding probate—a costly, time-consuming, and public process. We discuss how a living trust simplifies real estate management, particularly when multiple beneficiaries are involved, as opposed to relying on an Arizona beneficiary deed, which can complicate matters when a property is left to multiple heirs.

Another critical topic is the proper titling of taxable investment accounts. Jon explains that by placing these accounts in a living trust, couples in Arizona can take advantage of the state's community property laws. These laws allow for a full step-up in basis upon the death of one spouse, potentially eliminating capital gains taxes on appreciated assets. Additionally, Jon highlights the importance of preparing for potential incapacity, noting that trusts can simplify financial management during such times, often more effectively than powers of attorney.

The discussion also covers the vital and critical role of healthcare documents in estate planning. Jon stresses the necessity of having a Durable Healthcare Power of Attorney and a Mental Healthcare Power of Attorney, which is particularly important in Arizona. These documents prevent the need for costly and public guardianship proceedings, ensuring that the appointed agent can make timely healthcare decisions. Jon also shares insights on the challenges posed by outdated powers of attorney and the importance of keeping these documents current!

We also discuss the growing importance of addressing digital assets in estate planning as the digital age advances. Jon advises clients to ensure their legal documents grant access to digital accounts and assets and to consider using password managers or other secure methods to share access with trustees. We touch on the complexities of managing cryptocurrency in estate plans, highlighting the need for careful planning to ensure heirs can access these assets.

This episode provides valuable insights into the essential elements of estate planning, offering practical advice on how to protect assets and ensure a smooth transfer of wealth. Jon Linford's expertise combined with my 27+ years as a wealth manager offer listeners a clear understanding of why careful estate planning is crucial, especially in today's complex financial landscape.

Contact info for Jon Linford and Morris Trust: https://morristrust.com/

Phoenix: 602-249-1328 Northern Arizona: 928-774-0333

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

In this episode of "Protecting and Preserving Wealth," we continue our discussion from our previous episode, starting with interest rates and the Federal Reserve's actions. Bruce notes that the 10-year treasury rate has risen to 4.44%, highlighting the market's control over this rate rather than the Federal Reserve. Despite predictions of a recession, we don't foresee it occurring this year. The Federal Reserve faces pressure to lower interest rates, which impacts the real estate market significantly. Housing prices have remained stable despite fewer sales, contributing to inflation concerns.

Jason points out the delicate balance the Fed must maintain between controlling inflation and supporting economic growth. Interest rates are expected to remain high for an extended period, gradually decreasing over the next few years. We discuss the historical context of interest rates, noting that current rates, though high in the short term, are still relatively low compared to past decades.

The conversation shifts to public versus private equity. Bruce explains that there are fewer than 6,000 publicly listed companies, while private companies number around 6 million. Investing in private equity offers opportunities for growth and diversification, often independent of public market fluctuations. Jason adds that private equity investments can provide significant returns due to their unique growth cycles and management strategies.

We also address the impact of the Federal Reserve's interest rate hikes on the stock market. Despite higher rates, the market has performed well historically during such cycles. As the Fed lowers rates in response to economic conditions, businesses will need to adapt to maintain profitability.

The discussion touches on the current employment landscape, with tech companies laying off employees and shifting work-from-home policies. This belt-tightening reflects broader economic concerns and impacts consumer confidence, which remains lower than pre-COVID levels overall. Political affiliation also influences consumer sentiment, with conservatives generally more pessimistic about the economy at present. This does track with historical data: the party NOT in the White House tends to have a more pessimistic view of the economy.

We conclude by emphasizing the importance of diversifying investments and the potential of private equity. Bruce remains optimistic about market prospects, especially with the ongoing advancements in AI technology. He encourages listeners to consider these factors in their financial planning.

Disclosure: Investing in alternative investments or private equity may not be suitable for all investors and involves special risks, such as risk associated with leveraging the investment, utilizing complex financial derivatives, adverse market forces, regulatory and tax code changes, and illiquidity. Investors in this asset class are usually required to commit significant capital for years, which is why access to such investments is generally limited to institutions and individuals with high net worth. There is no assurance that the investment objective will be attained.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

Today, we are taking a midyear look at the financial markets for 2024, focusing on key metrics and trends influencing our investments and financial decisions.

As of our recording date of July 2nd, the S&P 500 has impressively risen over 15%, currently standing at 5,495. Bruce explains that the price-to-earnings (PE) ratio is at 20.99, indicating a slightly higher but not alarming level compared to historical averages. Jason adds that a pullback is possible despite the market’s strong performance, though they remain optimistic about the market’s upward trend through the year’s end.

We delve into the resilience of major companies within the S&P 500, such as Nvidia, Apple, and Microsoft, collectively representing a significant portion of the index. Jason discusses how these companies’ consistent earnings and product demands are likely to sustain their growth, despite potential short-term pullbacks, providing a sense of stability to our investments.

Regarding annual returns and intra-year declines, Jason notes that typical market behavior includes pullbacks, even in strong years. This year’s largest drawdown is 5%, but overall, the market is up 15%. I emphasize the potential benefits of long-term investment strategies, suggesting that market volatility can be advantageous if investments are not sold prematurely, instilling a sense of optimism in our investment approach.

On consumer finances, Jason highlights signs of financial stress due to inflation, particularly for lower-income households. Despite this, household debt service ratios remain historically low at about 9.9%, indicating relative financial health compared to the past four decades.

However, savings rates are under 4%, a concerning drop from previous years. We stress the need for prioritizing savings as part of financial planning, noting that inflation and higher living costs are squeezing household budgets. By prioritizing savings, we can empower ourselves to navigate these financial challenges more effectively.

Inflation remains a significant issue, with ongoing impacts on various sectors, especially those sensitive to interest rates like real estate and finance. I point out that inflation is proving challenging to control despite the Federal Reserve’s high interest rates. Oil prices, for instance, are still rising, complicating efforts to stabilize the economy.

Interest rates influence investment strategies, shifting preferences within portfolios. Jason notes that higher interest rates can benefit fixed-income investments while still posing challenges for businesses and consumers. Companies are grappling with higher costs and interest payments, which affect profit margins and necessitate selective investment strategies.

As we wrap up part one of our midyear review, it’s clear that inflation and interest rates remain pivotal topics. We’ll continue this discussion in part two, examining additional financial trends and providing more insights for navigating the rest of 2024.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

In this episode of Protecting and Preserving Wealth,' we dive into Bruce Hosler's article, "Moving to Tax-Free: Eight Steps You Can Take for Success." We are joined by Bruce Hosler and Alex Koury, who walk us through these crucial steps to achieve a tax-free retirement.

We begin with the importance of sourcing and engaging trusted advisors. A team consisting of a tax planner, financial planner, estate planning attorney, and wealth advisor is essential. These professionals help navigate the complexities of current and future tax laws, ensuring a comprehensive understanding of one's financial situation.

Next, we discuss the necessity of preparing a tax plan and calculating the ideal IRA to Roth IRA conversion amount. This step involves strategic planning to balance paying taxes now to reduce future tax liabilities. Factors such as age and the size of one's IRA play a significant role in determining the conversion amount.

For those required to take minimum distributions (RMDs), Bruce emphasizes taking these distributions early in the year to avoid complications with Roth conversions. This ensures a smooth transition and avoids IRS issues.

Making the actual Roth conversion is critical. Unlike IRA contributions, Roth conversions must be completed within the calendar year. Opening a Roth IRA, if one doesn't exist, and initiating the conversion process well before year-end is crucial to avoid last-minute issues.

We then explore the Life Insurance Retirement Plan (LIRP), which provides tax-free benefits and long-term care coverage. Each spouse should have a LIRP to ensure financial flexibility and tax-free withdrawals, especially important for estate planning and tax efficiency.

When paying taxes on Roth conversions, individuals under 59.5 years of age should use funds outside their IRA to avoid penalties. Those over 59.5 can pay directly from their IRA, which can be advantageous in managing tax obligations.

Creating a dynamic financial plan with the help of professionals is the seventh step. Unlike static plans, dynamic plans adjust to life changes and financial developments, much like a GPS providing real-time directions (as opposed to the old Rand McNally atlas). This adaptability is key to maintaining a tax-free retirement strategy.

Finally, the eighth step underscores the importance of a qualified wealth manager to implement and maintain the tax-free strategy. Professional guidance ensures that the plan is executed correctly, avoiding costly mistakes and unintended tax consequences.

Overall, these eight steps provide a structured approach to achieving a tax-free retirement, emphasizing the importance of professional guidance and strategic planning.

To view the whitepaper in its entirety, please visit Moving to Tax-Free: Eight Steps You Can Take for Success!

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

In this episode of 'Protecting and Preserving Wealth,' we delve into the significant changes to the Roth Stretch IRA, resulting from the SECURE Act, that came into effect on January 1, 2020. This Act drastically altered the landscape, as it now requires inherited IRAs to be fully withdrawn within ten years, eliminating the lifetime benefit that was once the key feature of the Roth Stretch IRA.

I explain that the Roth Stretch IRA was an ideal tool for wealth transfer, providing a tax-free, lifelong income stream for beneficiaries. With the new 10-year limit, the tax-free advantage diminishes significantly. Jason emphasizes that the rising national debt and projected increases in tax rates make the loss of this tool even more impactful, given the likely increase in taxes in the future.

To address this challenge, Jason and I also introduce the concept of a two-generation tax-free legacy plan. This strategy involves leaving a portion of one's legacy as a tax-free income stream for the children's lives while also protecting these assets from creditors, lawsuits, and divorces. This plan integrates various financial disciplines, including retirement income planning, tax planning, and risk management.

We highlight that this plan is particularly beneficial for families with more savings than they need for retirement and want to ensure their children are financially secure over their lifetimes. It provides a way to manage wealth transfer in a tax-efficient and protected manner, addressing both the financial needs and the potential behavioral tendencies of the heirs.

The conversation also touches on the psychological aspect of delayed gratification, likening it to the Stanford marshmallow experiment. The two-generation plan enforces delayed gratification by structuring the inheritance in a way that promotes long-term financial stability for the heirs rather than providing a lump sum that could be mismanaged.

In conclusion, Hosler Wealth Management offers valuable insights into adjusting estate planning strategies in light of legislative changes. They invite listeners to explore the two-generation tax-free legacy plan and to contact Hosler Wealth Management for personalized advice.

To view the whitepaper in its entirety, please visit The Roth IRA is no longer the ideal wealth transfer vehicle.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

This episode of "Protecting and Preserving Wealth" discusses the stock market's behavior during the presidential election years and its implications for investors. As the November 5th, 2024, presidential election approaches, many investors are concerned about market performance under different administrations and the potential for a market crash if the "wrong" president is elected.

Around $5 trillion is currently sitting in cash due to concerns over inflation and global uncertainties, not just the election. However, historically, the stock market has shown resilience and performed well during election years, with an average return of 11.6% since 1926. This data should instill confidence in the market's ability to weather political storms.

Alex explains that while the first half of an election year is typically weak, the second half often sees improvement. However, 2024 has been an exception, with a strong start driven by factors beyond the election. Despite potential volatility, we remain optimistic about the year's overall performance. This optimism should inspire a positive outlook in our audience.

We all agree that despite political tensions, investors must focus on long-term fundamentals rather than short-term market reactions.

The conversation moves to why investors should consider allocating cash now. I explain that money market funds typically hold more cash during election years due to investor caution, but this strategy can lead to missed opportunities. With the S&P and NASDAQ up significantly in 2024, staying in cash could mean missing out on market gains.

When asked how Hosler Wealth Management positions client portfolios, Alex describes our pro-growth stance with a balanced approach that includes hedging strategies to protect against downside risks; I advise retirees to ensure their portfolios are inflation-adjusted and to draw income from fixed-income investments to avoid market volatility.

In conclusion, diversification and sticking to a well-crafted financial plan are crucial. Investors should remain focused and not be swayed by political noise. For personalized advice, Bruce invites listeners to contact Hosler Wealth Management.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler