On my podcast Be Advised, I was joined by Ed Slott. We discussed some of the most impactful changes to tax laws, and we also discussed some of the most misleading headlines that your top-clients may have read.
When navigating changes, it’s common for consumers to skip over the fine print and not fully understand how their taxes will be affected. So, advisors, get ready to explore the world of taxes going into 2023 and how you can help your clients save on them. If you are looking for a quick listen to bone up on some of the changes check out the podcast here.
We discuss:
- Ways the SECURE Act 2.0 is changing the regulations around RMDs
- Why high inflation can help us save on taxes
- What you should know about rollovers from 529 plans to Roth IRAs
- The importance of advisors supporting and assisting clients with their planning
- The value of building client-advisor relationships
- And more!
As consumers often do not fully invest in understanding how tax changes will affect them, the episode’s conversation focused on how advisors can assist their clients in navigating these changes and minimizing their tax burden.
This episode shares insights and strategies for maximizing tax savings, including changes to RMD regulations and the benefits of Roth conversions. Stresses the importance of staying up to date on new tax laws and regulations, as well as being proactive in educating clients about tax planning opportunities.
We began by discussing the SECURE Act 2.0, which is changing the regulations around required minimum distributions (RMDs). The SECURE Act 2.0 includes provisions to increase access to retirement savings plans for small businesses and part-time workers, offering more options for clients to save for retirement while reducing their tax burden.
“When you’re taking RMDs, it’s like playing chess with the government. They’re making moves, you’ve got to make moves, and you want to make the right moves so you keep more of your money.” – Ed Slott
Ed emphasizes the importance of taking advantage of the 10-year rule for inherited IRAs, which requires beneficiaries to withdraw all assets within 10 years of the account owner’s death, and the benefits of converting to a Roth IRA to avoid potential tax increases down the road.
We then discuss the effects of inflation on taxes, noting that inflation can actually help save on taxes by lowering the real value of taxable income over time. We explore the topic of rollovers from 529 plans to Roth IRAs, cautioning that this strategy is not always beneficial for clients and requires careful planning and analysis.
The conversation then shifted to the importance of advisors supporting and assisting clients with their tax planning, stressing that financial advisors have a duty to educate and inform clients about tax planning opportunities and strategies. Many clients are unaware of the benefits of tax planning and the potential tax savings that can result from careful planning and execution.
The conversation concludes with Ed sharing his top tips for maximizing tax savings, including taking advantage of catch-up contributions, using spousal IRAs, and being proactive in managing required minimum distributions.
This episode provides valuable insights and strategies for financial advisors looking to better serve their clients in the area of tax planning. Slott’s expertise and experience in the field make him a valuable resource for advisors looking to stay up to date on new tax laws and regulations, and his emphasis on education and communication highlights the importance of building strong client-advisor relationships based on trust and transparency.
It was refreshing to take some time to discuss building strong client-advisor relationships, and the importance of communication and trust in achieving successful outcomes for clients. By understanding clients’ financial goals and developing personalized tax strategies, advisors can help clients minimize their tax burden and achieve their long-term objectives.
“Tax planning is not a one-time event. It’s a year-round event. You have to think about taxes all the time. Taxes are the biggest factor that can destroy your wealth. You can have a great portfolio, great investments, but if you don’t manage the taxes, it’s like running a marathon and then dropping out a mile before the finish line.” – Ed Slott
Take a listen for valuable insights into some of the most impactful changes to tax laws in 2023 and how advisors can assist their clients in minimizing their tax liability. With the complexity of tax laws and the potential for costly mistakes, advisors who invest in education and expertise in tax planning are best equipped to help their clients achieve their financial goals and secure their financial future.
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About Our Guest:
Ed Slott is a nationally recognized IRA distribution expert, professional speaker, television personality, and best-selling author. He is known for his unparalleled ability to turn advanced tax strategies into understandable, actionable, and entertaining advice. He has been named “The Best Source for IRA Advice” by The Wall Street Journal, and USA Today wrote, “It would be tough to find anyone who knows more about IRAs than CPA Slott.”
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.