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Deep Dive: Set Yourself Up to Pay No Penalties or Taxes in Early Retirement

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Aug 31, 2022

50:46

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ADVICE

Tax Diversification

Diversify your investments across pre-tax, tax-free, and taxable accounts.
This tax diversification sets you up for tax optimization in early retirement.

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INSIGHT

Tax-Free Income Strategy

Combine standard deductions and 0% capital gains tax brackets for optimal tax-free income.
This strategy helps minimize taxes on investment income in retirement.

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ADVICE

Roth Funds: Use Them Last

Prioritize Roth funds last in retirement due to their tax-free growth.
Roth IRAs are not subject to required minimum distributions, enhancing their flexibility.

Get the Snipd Podcast app to discover more snips from this episode

How to Get a Millionaire Tax Free Status Before You Are 59 and a Half

04:09 • 3min

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Wroth Funds Are Your Most Precious Investment Assets

07:25 • 2min

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Pre Tax and Taxed Funds - How to Combine the Two

09:38 • 4min

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Roth Conversions - How Much Should You Convert?

13:22 • 5min

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How Much Is Your Earned Income From Your Job?

18:32 • 2min

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Sacara Slash Money - The Money With Katy Quiz

20:15 • 2min

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How to Convert a Standard Deduction Chunk to Wroth Every Year

21:52 • 2min

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Pretax Accounts - Do They Need to Be Substantial?

23:53 • 2min

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Using a Seven Per Ent Average Rate of Return

26:20 • 5min

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A Hundred, 60 Thousand Dollars Per Year, That Is a Lot of Money

31:19 • 2min

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How to Increase Your Wealth - A Case Study

33:48 • 5min

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How to Automate Wroth Conversions and Pay Your Taxes

39:03 • 2min

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The Importance of Tax Efficiency in Retirement

41:31 • 3min

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Is Your Partner's Separate Bank Account Still Affecting You?

44:46 • 4min

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If you’re normally a “casual commute” listener of The Money with Katie Show, prepare to park your car and whip out your notebook—today’s episode is a complex deep dive into exactly how you can set yourself up to pay no taxes or penalties in retirement on any of your pre-tax, taxable, and Roth funds, even if you retire in your thirties.

We’ll dig into how much a couple would need to save and invest to retire early and then break down how they can strategically access those funds for the most optimal tax-free outcomes. Remember to caffeinate before this one—your brain cells are about to be workin’ and twerkin’.

If you’re a visual learner, the YouTube video for this episode or the episode transcription may be your best friends.

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Mentioned in the Episode

IRS Tax Code: https://www.irs.gov/privacy-disclosure/tax-code-regulations-and-official-guidance
Standard deduction for 2022: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022
0% capital gains tax rate brackets for 2022: https://www.kiplinger.com/taxes/capital-gains-tax/602224/capital-gains-tax-rates
Required Minimum Distributions (RMDs): https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
Roth IRA Five-Year Rule: https://www.investopedia.com/ask/answers/05/waitingperiodroth.asp
Compound interest calculator: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Combining finances for marriage: https://moneywithkatie.com/blog/what-to-consider-when-combining-finances-with-your-partner

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