Episode 232 - Tax Efficient Distribution

In this episode, Ryan Burklo and Alex Collins discuss how money is taxed in retirement. They emphasize the importance of considering both current and future taxation when making financial plans. They provide a historical overview of federal income tax brackets and highlight the impact of major events on tax rates. The hosts also explain the difference between marginal and effective tax rates. They introduce the concept of the amortization of an asset strategy and compare the outcomes of interest-only and principal-and-interest approaches. The episode concludes with key takeaways and a question for listeners to consider.

The beer of the day is Enchantments Hazy IPA from Icicle Brewery. If you would like to learn more about this beer, please visit their website https://iciclebrewing.com/beers/enchantments-hazy-ipa-apex/

If you would like to learn more about Quantified Financial Partners, please visit our website www.beerandmoney.net

Takeaways

Consider both current and future taxation when making financial plans.
Understand the historical context of federal income tax brackets and how they have changed over time.
Differentiate between marginal and effective tax rates.
Explore strategies like the amortization of an asset to optimize tax efficiency in retirement.
Diversify your assets to have flexibility and access to different tax strategies.

Chapters

00:00 Introduction and Mindset
03:10 Understanding Taxes in Retirement
05:03 History of Federal Income Tax Brackets
10:21 The Introduction of 401(k) and Tax-Deferred Accounts
13:01 Marginal vs. Effective Tax Rates
15:08 Amortization of an Asset Strategy
19:36 Scenario Comparison: Interest Only vs. Principal and Interest
22:40 Scenario Comparison with Reduced Asset Value
26:17 Takeaways and Question of the Day