Roger Whitney's Retirement Answer Man podcast takes difficult financial conversations, concepts, and strategies and makes them more approachable. His Retirement Tax Management series covers tools and tricks you can use during retirement to lessen your tax burden and make paying taxes as painless as possible.
For episode #299 in November 2019, Roger Whitney spoke with a variety of professionals on tax management tips, including Harbor Crest Wealth Advisors founder and CEO Michael Hennessy, CFA, CFP®. Hennessy recommended using a qualified charitable distribution (QCD) if you are charitably inclined. When having to take your RMD, if you don’t need the full amount of money, give it away, he said. This will help with income-related monthly adjustment amounts (IRMAA) as well as help you manage your tax brackets.
Another expert, Peter Lazaroff, CFA, CFP®, encouraged listeners to minimize their RMD liability early on, before age 70 ½, by doing partial Roth conversions. He said it’s important to remember that those pretax dollars will be taxed eventually.
Another guest on the program was Julie, who was maxing out her husband’s 401(k) to save for retirement and was also funding an HSA with pre-tax money. She was paying cash for her medical bills and saving those receipts to withdraw from the HSA in retirement. Julie was using the HSA like a "slush fund" and also using a donor-advised fund for charitable giving.
Brandon Renfro, Ph.D., encouraged listeners to consider their multiyear tax rate. Expert Michael Molitoris suggested auto-withholding a portion of your IRA distribution for tax purposes. He said to make sure to also withhold taxes from your Social Security check. This will help save you from filing quarterly taxes and it will further save you from a huge tax bill. Lastly, expert Ashley Daniels recommended using your tax return as a tool to help you think about tax brackets, IRMAA, and Social Security.