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What are you doing to protect your financial plan from this big threat?

I get a little “tin-foil hat” sometimes.

BLUF (bottom line up front)

If you aren’t, AGGRESSIVELY, creating TAX FREE wealth, you are setting yourself up for a lot of pain.

No. Roth is not enough.

People often see the threats to their retirement investing through an entirely market driven lens.

– Inflation 📈

– Volatility 🎢

– Poor earnings 🤮

– The economy 🏭

If any number of those turn out bad, you stand to lose 📉 a chunk of money (and, worse, time.)

People often overlook one of the major events that can IMMEDIATLEY cost you 5, 10, 20, 50% of your assets.

Case in point in the article below. “But it only applies to people with big $$$!”

The point is that the federal and state government can change what they like, when they like?

Don’t believe me. For 133 years the State of Washington considered a capital gains tax to be unconstitutional. In 2022….never mind, JK, LOL.

The tax man can not only change tax RATES, but the NATURE of taxation.

Today’s capital gains could be tomorrow’s ordinary income.

This is why I am outside the box, kind of obnoxious, and occasionally cost myself potential clients by using every tool available to create tax FREE wealth in my client portfolios.

Could the IRS/State attack the Roth? Absolutely. The government could:

1️⃣ Income test Roth distributions (yeah, you might pay income tax twice.)

2️⃣ Net worth test Roth distributions

3️⃣ Take away Roth contributions based on income/net worth.

We cannot control what the legislatures do. What we can control is how we prepare.

So the question is NOT what they will do. The question is what are YOU doing to protect your financial plan.

!!!High income earners with large stock grants reduce your #taxes!!!

ATTN: High income earners with large stock grants.

One strategy to reduce your overall taxes ⏬ and avoid concentration risk is tax loss harvesting.

I did a portfolio review with a client who works at a local tech company who wanted help balancing 🧘‍♂️ his portfolio.

He was in the following position:

1️⃣ Annual income: $250,000
2️⃣ Company stock (from ESPP and grants): $700,000
3️⃣ A “junk drawer” of old 401ks, IRAs: $700,000
4️⃣ Short and long term realized capital gains.

When I looked at his portfolio I noticed he had short term capital losses and long term capital losses in his portfolio.

Unfortunately a lot of his company stock was granted near the company’s all time highs 🎢 . His company then reported less than enthusiastic earnings and took a 10% correction.

By using tax loss harvesting of his unrealized short and long term capital gains we were able to save him $7,000 in income tax and $13,000 in capital gains for the year.

While this is a common practice for high net worth individuals it can apply to anyone to help avoid paying unnecessary taxes 💸

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