Today's Hack

If the recent tax proposals were to pass, how would it affect your financial plan? Some things we may want to look out for include changes in capital gains and Roth conversions. Phil talks about who could be most impacted if these proposals became a reality.

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Show Notes For This Episode

Other Retirement Facts:

New tax proposals are working their way through the House and Senate. Right now, these are not passed, but let’s talk through them so you can get an idea of what’s potentially to come. Most of them are being proposed to be effective next year, so we talk about what it could mean for your financial plan.

Bills like this often start out huge but then get cut down in order to get through and passed. You may be wondering how this will affect your retirement plan and the market. The market does not like uncertainty, and these proposals may cause uncertainty. The proposals for individual tax brackets would go back to similar rates as before when Obama was president.

Capital gains may also change if this were to pass. It may seem like it is only impacting the ultra-wealthy unless you consider a small business owner selling their business and getting that higher tax when they sell. What things should business owners consider?

Phil talks about high values in retirement accounts that could face a required minimum distribution. Roth conversions may be limited, similar to before 2010. If your income is above $400,000 individuals or $450,000 for married filing jointly, you won’t be able to do a Roth conversion any more. If you’ve been considering doing this, you may want to do so sooner rather than later.

Once these tax proposals are approved and we know for sure what’s happening, we will address it again. But if you have any questions right now, reach out to an advisor to see what it could mean in your financial situation.

Listen to the entire episode or skip ahead using the timestamps below. 

[0:12] Let’s talk about tax proposals in Congress.

[3:23] How could job creation be impacted?

[6:23] How will this affect your retirement?

[8:17] Numbers seem to be going back to Obama era taxes.

[9:57] What are the possible changes for capital gains?

[12:20] What other provisions may happen?

A Quotable Moment:

“The market does not like any kind of uncertainty and this is going to throw some uncertainty into corporations which is stock, that’s what the market is.”

-Phil Putney

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