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Roth IRA Wisdom, Swimming Smarts, and Cupcake Delights - Transcript

Roth IRA Wisdom, Swimming Smarts, and Cupcake Delights - Transcript

June 13, 2023

[00:00:00] Jual Fuchs: Gentlemen come to that, a podcast of folks looking to expand the knowledge about finance. This podcast is hosted Jason.

[00:00:21] Jual Fuchs: Sage financial bikers and I love them. And now you host my daddy.

[00:00:29] Jason Fuchs: Thanks Jewel. You did such a great job. You ready to start the show? Yes.

[00:00:35] Jason Fuchs: I'm your host, Jason Fuchs With me is the ever so beautiful Amber Fuchs. Hi. Hey, welcome back. Thanks for having me. We're glad you're here. I'm glad to be here. I say we, but it's just me and me and the man in the booth. Right? Exactly. Our 40 person staff behind us in the, what do they call that? The studio, the Production room.

[00:00:57] Jason Fuchs: Yes. Anyway, we're [00:01:00] happy you're here. Thanks for being here. I'm glad to be here. Ladies and gentlemen, did you know that 90% of Americans are anxious about money, but did you know that people who listen to Dad Sense are three times happier than those who don't? Yeah. On Dad Sense, we turn your financial frowns upside down.

[00:01:19] Jason Fuchs: Amber and Dad's Sense offers valuable financial advice to help you reach your full. Potential. Ladies and gentlemen, by listening to this podcast, we're giving you your own CFP designation, the highest possible certification, and. Guidance from a team of financial experts. You're gonna get our 2 cents. Get it.

[00:01:41] Jason Fuchs: Advice. I like it. Across investments, taxes, saving money, managing debt, and building income to name a few. A building cannot be complete without a solid foundation. So ladies and gentlemen, keep listening and empower your finances today. And guess what? [00:02:00] Not only am I the managing director and a financial advisor, but I'm also a dad.

[00:02:05] Jason Fuchs: So I'll share my wins and struggles as a father too. I'm sure Amber will chime in as well. So ladies and gentlemen, enjoy this episode today. And if you want more, head over to sage path It's in the description of the podcast, and you can pick us up wherever you get your podcast. And by the way, ladies and gentlemen, Amber, thanks for being here.

[00:02:28] Jason Fuchs: We couldn't do this show without you. And today we have a fantastic episode. Amber. Yes. Wouldn't it be nice to pay less income tax in retirement? Yes, definitely. Maybe no tax at all?

[00:02:43] Amber Fuchs: Well, I mean, that would be great,

[00:02:45] Jason Fuchs: but what do I want for my birthday this year? No taxes. That would be wonderful. One way to pay less income tax in retirement is with a tax advantage strategy called a Roth IRA [00:03:00] conversion.

[00:03:00] Jason Fuchs: Amber no pressure. You ever heard of that? Yes, I have. Okay, well, we're gonna talk about it today. Imagine that. Imagine that married to a financial advisor and you've heard about a Roth conversion. I wonder why,

[00:03:16] Jason Fuchs: ladies and gentlemen, the Roth IRA conversion strategy can help lower.

[00:03:21] Jason Fuchs: Your taxable income later in retirement. A Roth IRA conversion involves repositioning a traditional IRA or can be called a qualified employer sponsored retirement plan. Say that 10 times fast, Amber into the Roth ira. And there are few reasons investors pursue the conversion strategy. And that's what we're gonna talk about in today's episode.

[00:03:45] Jason Fuchs: Is a Roth conversion appropriate for you? And we covered how the backdoor Roth conversion works on season four. So this season, episode 16, Amber. Did you catch that one? [00:04:00] Yeah, of course. What'd you think? I loved it. I learned so much. Thank you. So ladies and gentlemen, check that out. After listening to this episode, that episode lays out exactly how to process the conversion.

[00:04:13] Jason Fuchs: If you need help though, reach out to us. We'd be happy to help you. I have a wonderful recipe that I wanna share. The cookies and cream cupcake recipe, Jule and I baked together. Awesome. That was a great one. Yeah, it was really good. Mm-hmm. Well, Amber, I wanna know what is getting you out of bed in the morning nowadays?

[00:04:33] Jason Fuchs: Oh

[00:04:34] Amber Fuchs: man. There's a lot of things that wake me up in the morning. Mostly coffee. That's my driving force in the morning for sure. But something that has been top of mind for me very recently and. Specifically today, I was talking with a friend of mine about, having our kids in swim class. Oh, we haven't finalized dual swim lessons [00:05:00] yet for this year.

[00:05:02] Amber Fuchs: been a lot of news recently. About riptides in our local area and getting Juul into swim lessons is just becoming more and more that top priority now, pressing on my mind. She loves the water so much, we love to play with her and all the various toys and things that we have around us here in Florida.

[00:05:23] Amber Fuchs: Mm-hmm. Anytime we play with Jewel in the water, you, we really try to reinforce the importance of safety and she's getting really good at. Some of the really core elements that she needs to be, yeah,

[00:05:36] Jason Fuchs: put your face in. Yes. Hold your breath, put your head down.

[00:05:40] Jason Fuchs: She loves jumping in, man. What is my booty sink all the time. Daddy Put your face in the water, kid. So,

[00:05:46] Amber Fuchs: you know, I think that's something that we will have to figure out how to prioritize and make happen.

[00:05:51] Jason Fuchs: Well, what I liked about swim lessons, this has been a couple years in the making, maybe even almost three, but we did the individual lessons and [00:06:00] she did okay. But then last year we put her in the group lessons. Mm-hmm. And that's when I feel like she took off. Yeah. There was something about being around.

[00:06:07] Jason Fuchs: Kids her own age that got her really interested in excelling. Mm-hmm. And she's done fantastic. And she's holding her breath underwater. She loves collecting those little things that sink. Yep. Bringing them back. And I toss 'em to her and playing fetch with my daughter at the pool. But she loves doing that now.

[00:06:28] Jason Fuchs: So I think this year is gonna be her year. I think so too. I have a good feeling. I think so

[00:06:32] Amber Fuchs: too. And you're right about that. I remember when she was doing the one-on-one lessons. And she asked me after the end of the lesson if she could do what that other kid was doing. Yeah. Which was swimming laps. Oh yeah.

[00:06:46] Amber Fuchs: And I said, you need to ask your swim coach about that. And that, I believe, is when the swim coach suggested breathe that we put her into a group. Setting. Mm-hmm. Because seeing [00:07:00] someone else bigger, another kid, just an older kid doing something that she wanted to do, really motivated

[00:07:05] Jason Fuchs: her. Oh yeah. So ladies and gentlemen, parents, grandparents, great-grandparents, whoever, if you're, struggling trying to get your little one.

[00:07:14] Jason Fuchs: To improve or maybe to stay motivated in an activity. It could be anything. We found that putting JUUL into groups really, really gets her motivated and allows her to excel when it comes to learning how to do whatever activity that is. Yeah, I think the same goes for gymnastics too. Well, I was gonna say, I

[00:07:32] Amber Fuchs: think it varies by, by activity because in gymnastics she can get distracted.

[00:07:37] Jason Fuchs: That is true.

[00:07:38] Amber Fuchs: Yeah, you're right. I think the difference and the key differentiator is, In gymnastics, there is about 12 kids to one instructor, and I think that she, the instructor is spread a little too thin to be able to give kids.

[00:07:53] Jason Fuchs: It's the waiting, yeah, the waiting individual

[00:07:56] Amber Fuchs: focus. Yeah. And so when we did the group lessons [00:08:00] last year with JU and Swim, I believe it was a four to one ratio, maybe five, five kids, one instructor, and she wasn't waiting around as long and they each practiced.

[00:08:13] Amber Fuchs: different movements individually and watched the other ones practice those movements. Mm-hmm. Versus doing them together.

[00:08:20] Jason Fuchs: Well, I think we should grab some Oreo cupcakes, maybe get into the recipe at today's episode, and

[00:08:25] Amber Fuchs: we can eat the Oreo cupcakes as we

[00:08:27] Jason Fuchs: discuss them. Oh, that would be amazing. There's a gentleman that has a YouTube channel and he interviews people while they eat spicy food.

[00:08:35] Jason Fuchs: Oh yeah. Maybe we could have a dad sense episode where we talk while we eat cupcakes

[00:08:41] Amber Fuchs: or eat what you're talking about. Having made.

[00:08:44] Jason Fuchs: Yeah, absolutely. Yeah, let's do that. Okay. All right. Let's get into it now.

[00:08:55] Jason Fuchs: Welcome back to our food topic of today's episode. We're gonna [00:09:00] talk about. Oreo cupcakes.

[00:09:03] Amber Fuchs: That's a great combination of two wonderful

[00:09:05] Jason Fuchs: things. I love Oreos. Oreo ice cream, Oreo cupcakes. I used to make these things called little Oreo balls, cookies and cream, anything. I am obsessed with it. It's so good. I could tell.

[00:09:18] Jason Fuchs: All right, so before I get into anything, Amber, I wanna know what you thought about this recipe.

[00:09:23] Amber Fuchs: I thought it was really good. This is, is this the gluten-free

[00:09:25] Jason Fuchs: recipe? No, this is the one where I ran outta butter. Ah. And I used, I can't believe it's not butter. So the, the cupcake portion didn't have a lot of flavor in it, but the, the icing had a ton of flavor.

[00:09:37] Jason Fuchs: Yes. Oh, you're right though. We did use gluten-free Oreo Oreos. Yes. Which is funny because I took the time to get the gluten-free Oreos, but the flour was not gluten free. And the frosting was not gluten-free either. Oh boy. But those gluten-free Oreos were incredible. They

[00:09:52] Amber Fuchs: were, they tasted exactly the same.

[00:09:54] Amber Fuchs: I

[00:09:54] Jason Fuchs: can't taste the difference either. They were wonderful. Yeah. We'll keep those on the menu. Well done Oreo. Good job. Oreo [00:10:00] sponsorship coming around the corner. All right. The,

[00:10:03] Amber Fuchs: the cupcakes were very good, but I could tell that something was a little

[00:10:07] Jason Fuchs: bit a mess.

[00:10:07] Jason Fuchs: The wrapper was sticking to the cupcakes too. Oh, that could be because of the lack of butter. Yes, exactly. There's no, none of that oil. I did not realize that. No stickiness. Yeah. Uhhuh. Okay. Yeah. Well they, these Oreo cupcakes, they're gonna melt in your mouth when they're not made with, I can't believe it's not butter.

[00:10:23] Jason Fuchs: And that cookies and cream frosting on top is, I think it's too good to be true, but, It's delicious. That's my jam. So I think they're perfect for birthday parties. Get togethers and maybe just treating yourself. Jewel and I, we made these for Memorial Day, that barbecue that we had. Yes. And I roasted a 10 pound pork butt.

[00:10:42] Jason Fuchs: It took 13 hours. It was worth it. It was so good. It was so good. It was really good. This time, I, I did a couple things different. Maybe I'll share that in the next food episode. Mm-hmm. A a little trick I learned is to wrap it in foil and rather leaving it on the grill or on the counter. I actually covered it in towels and I put [00:11:00] it in a cooler and somehow it changed the consistency of the meat.

[00:11:04] Jason Fuchs: Uh, it was amazing. It was really good. It was really good. Anyway, something magical happens when you crush those Oreos and that buttercream frosting. That crunchy, creamy result. It's got flex of chocolate here and there. In my opinion. It's just a delight. It was delicious. Thank you.

[00:11:24] Jason Fuchs: And ladies and gentlemen, I obtained this recipe from a website called preppy I googled how to make this, and that was the recipe that got the best reviews, and based on the taste, I'm going with it. Okay. It's wonderful for me. In fact, I'm gonna be trying her O Oreo cake for a larger version of the recipe, even more chocolate.

[00:11:48] Jason Fuchs: She also has the Oreo balls recipe. Oh, all right. Yay. All right. You ate all the Oreos, so we can't grab any Oreos before the financial topic. [00:12:00] I ate the last one. I know. Yes, I did. Sad. I only had like 12. I'm kidding. Let's jump into our financial topic now, shall we? Okay. All right, here we go.

[00:12:20] Jason Fuchs: All right, ladies and gentlemen, welcome back to our financial topic of today's episode. Is a Roth conversion appropriate for you? I said this earlier. Ladies and gentlemen, we covered how the back door Roth conversion works this season, episode 16.

[00:12:37] Jason Fuchs: Check that out after you listen to this episode. This

[00:12:40] Jason Fuchs: episode is gonna tell you why you might wanna do the Roth conversion. The episode 16 will tell you how we would go about the Roth conversion. And if you need help, ladies and gentlemen, please reach out to us. We would be happy to make ourselves available.

[00:12:54] Jason Fuchs: The email address is info sage path, phone number [00:13:00] (904) 366-9388. If you are as forgetful as me. Check the description of the podcast. All the info is right there.

[00:13:08] Jason Fuchs: I don't wanna pay a lot of income tax in retirement, Amber. I don't wanna pay a lot of income tax now, but we don't have that luxury, unfortunately. Right. And that's a good problem to have.

[00:13:20] Jason Fuchs: By no means am I complaining, but one way to maybe lessen your tax burden in retirement is to use the strategy that we're talking about today, the Roth IRA conversion. It'll help you lower your taxable income in retirement. And that's great because ladies and gentlemen, if you think you're gonna be in a higher tax bracket, In your retirement years, the Roth contribution or the Roth conversion is definitely for you, but let's talk about it.

[00:13:47] Jason Fuchs: There are a few reasons investors pursue the investment strategy. Amber. First what I wanna do is tell everyone what a Roth I RRA is, and then I have five questions [00:14:00] our listeners can ask before making the Roth conversion to see if it's right for them. What do you think? I like this plan.

[00:14:07] Jason Fuchs: All right.

[00:14:07] Jason Fuchs: Amber, have you heard of a Roth ira?

[00:14:10] Amber Fuchs: Yes. I think we have

[00:14:11] Jason Fuchs: some

[00:14:12] Amber Fuchs: I know there's a lot of wonderful beneficial tax-free implications like with growth and withdrawal. Is there other tax-free

[00:14:20] Jason Fuchs: things? Beautiful. This is well said.

[00:14:22] Jason Fuchs: Thanks. I guess my work as the financial advisor husband is paying off. I guess so. Yeah. Roth irate, it provides a flexibility to withdraw funds only if the money is needed. It's not subject to the required minimum distribution. You know that, right? Yes. RMDs. Yeah. We love our acronyms in the financial world, not Mickey D's.

[00:14:45] Jason Fuchs: What's the other one you like? But it's not an acronym, but you always giggle about it. The

[00:14:51] Amber Fuchs: the age for. Considered to be retired as 59 and a half.

[00:14:57] Jason Fuchs: You didn't laugh like you usually do though.

[00:14:59] Amber Fuchs: Well, [00:15:00] yeah. It's, it's just so ridiculous. And. By the way, I always use a half age now since I know it's okay by the federal government.

[00:15:10] Jason Fuchs: I feel like kids do that too. How old are you? Four and a half. Four and three quarters? Yeah, four and five days. So I'm

[00:15:17] Amber Fuchs: 29 and a half.

[00:15:19] Jason Fuchs: Oh, I thought I was like 24 and a half and a half. I am 40.7. All right, so back to back to the Roth IRA provides flexibility to withdraw funds if you need the money.

[00:15:35] Jason Fuchs: No RMDs and it can help lessen the impact of estate taxes. When it comes to estate planning that is one of my favorite things to do with my clients planning a legacy. So trust estate planning, I don't create the trust, but I have a lot of neat strategies that help you before you even get to the attorney.

[00:15:52] Jason Fuchs: Save you a lot of time. A lot of money. Anyway, I'm getting distracted. Amber tell You're passionate. I am. I love it. This is my favorite [00:16:00] thing. It's just so interesting helping people create a purpose. I mean, that's what estate planning is all about. What do you want to accomplish in your life and how do we accomplish it?

[00:16:09] Jason Fuchs: Love it. Ladies and gentlemen, before you initiate a Roth IRA conversion, ask yourself these five questions prior to making your decision. You ready, Amber? One. Should we do it like the count with Jules since this is a family podcast?

[00:16:24] Amber Fuchs: You mean like the count on Sesame Street? Yeah, sure.

[00:16:27] Amber Fuchs: How does it go? Uh uh ah,

[00:16:30] Jason Fuchs: One. Uh, ah. Can you pay the taxes?

[00:16:36] Jason Fuchs: Since traditional IRAs and other qualified retirement plans are tax deferred, and that just means you pay taxes when you take the withdrawals out, upon converting assets into a Roth ira, the account owner must pay income tax on the amount they convert. You follow me, Amber? Mm-hmm. Also, taxes are due upfront when the conversion [00:17:00] occurs.

[00:17:01] Jason Fuchs: Yep, that makes sense. All right, number two, a all. Are you comfortable increasing your adjusted gross income? And guess what, Amber, another acronym. Agi. Hmm. A Roth IRA conversion will raise your income in the year the conversion occurs, and that increases your agi, which can impact your taxes by moving you into a higher tax bracket potentially.

[00:17:28] Jason Fuchs: In addition, if you're retired, be mindful. This is something that not a lot of people know. Medicare Part B uses your two previous years as worth of income to calculate your monthly premium. Got it. That's very, very important. Therefore, the conversion may increase your Part B payment. For at least two years, right?

[00:17:52] Jason Fuchs: All right. Number three oh oh oh. Will you lose eligibility for specific tax write-offs? [00:18:00] For example, the child tax credit, student loan interest deduction. Are determined by personal income. If you initiate a Roth IRA conversion, it might mean you lose those deductions if your AGI I increases and Amber got it.

[00:18:16] Jason Fuchs: What does agi I stand for? All, all, all close. Oh. Uh, just a gross income. Uh uh oh. All right. Number four. Sage Path style. Well, you need the money within five years. Roth IRAs, they typically offer penalty and tax-free withdrawals anytime on the contributions, not the growth, right? It's very important. Still.

[00:18:45] Jason Fuchs: Investors must wait five years to access the funds without a 10% penalty when using conversion monies, and that doesn't matter your age, regardless of age. Okay. So it's something to think about [00:19:00] whether you'll need money from your Roth IRA before the five year rule sets in, if that's a possibility.

[00:19:05] Jason Fuchs: Ladies and gentlemen, there may be a more appropriate strategy for you, and if you'd like to know more about what that strategy would be, give us a call, send us an email. We'd be happy to help. All right, we're getting there. Number five. Number five. Oh, oh, that's the retired count Number five. Does your qualified retirement plan allow Roth IRA conversions if your funds are inside your employer's retirement savings plan, 401K 4 0 3 4 57.

[00:19:40] Jason Fuchs: Acronyms. Acronyms. Acronyms. Check your plans documents to see if a Roth IRA conversion is allowed. Then consult your employee handbook. Your HR department or the company might have a custodian. And you can also reach out to whoever that custodian would be.

[00:19:58] Jason Fuchs: It could be Fidelity, [00:20:00] Voya, whoever,

[00:20:00] Jason Fuchs: ladies and gentlemen, we're happy to make a recommendation for knowledgeable tax advice. We're happy to meet with your tax professional. Have a conversation with your tax professional. To determine how a Roth IRA strategy or that conversion might impact your taxes at the time of the conversion.

[00:20:18] Jason Fuchs: We wanna make sure that we do this right, ladies and gentlemen. So if you're interested, contact our office today to visit about this strategy. We have other tax advantage strategies that might be appropriate for your situation too. Working together, we can ensure your financial plan, your tax circumstances are both properly aligned.

[00:20:37] Jason Fuchs: It's very, very, very important. As always, ladies and gentlemen, we are here as your trusted resource. Thank you so much for listening to our show today. Do you know anyone who sometimes maybe gets stuck navigating overwhelming financial situations or maybe anyone who could benefit from the information we shared here on Dad's Sense?

[00:20:59] Jason Fuchs: If [00:21:00] so, would you mind sharing this episode with that person? You could share it with anyone else you think would enjoy it. We would love to have more listeners just like you, ladies and gentlemen, and if you're enjoying Dad sense, the biggest compliments we ever get are honest reviews. If you've ever left us a review, thank you so much.

[00:21:21] Jason Fuchs: We recognize your time is valuable. And if you haven't, would you mind leaving one? And if that review isn't positive, let us know what we should do to improve it. We read all of our reviews. So ladies and gentlemen, again, thank you so much. And hey, if you need help managing your financial affairs, we are accepting new clients.

[00:21:40] Jason Fuchs: Head to sage path to see what we're all about. You can call us, you can email us. We'd be happy to help find all of that into the description of the podcast. Amber, I had a lot of fun today. Me too. Thank you so much for being here. Thanks for having me. You're welcome. Are we gonna see you next week?

[00:21:57] Jason Fuchs: I hope so. All right. So ladies and [00:22:00] gentlemen, we'll see you next Tuesday for a new episode of Dad Sense. Thank you for listening. Bye bye-Bye. Oh, oh, oh.

[00:22:11] Jason Fuchs: Oh, oh, oh, hello. It's me, Santa Claus, otherwise known as Old Safe Sage. Jason has me on payroll, so his three-year-old daughter will get all the hot toys ahead of schedule.

[00:22:24] Jason Fuchs: I'm visiting from the North Pole so I can read the disclosures. We don't want to irritate regulators now to securities and investment advisory services offered through FSC Securities Corporation. FSC member Finra, S I P c. FSC is separately owned in other entities in our marketing names, products or services.

[00:22:46] Jason Fuchs: Reference to our independent of fsc, Jason Fukes and and financial advisors are Unaffiliate oh oh.[00:23:00]

[00:23:01] Jason Fuchs: What else would you like to say in this podcast? Is there anything you want our listeners to know? It can be anything you want, anything in the world. I

[00:23:09] Jual Fuchs: love him all the way to the seat and I love him walking.

[00:23:15] Jual Fuchs: And I love him so much all the way the do king of back again,

[00:23:21] Jason Fuchs: and I love you to the galaxy and back too. Jewel, thank you for your help today. You did an amazing job. Thank you. You're welcome. I'm proud of you. Thank you. Okay. Bye. Bye.