Latest / The Jon Sanchez Show / The Retirement Tax Bomb Hiding In Your IRA
Transcript
- Jon G. Sanchez: Good Monday afternoon to you. Welcome to the John Sanchez Show on Newstock Seven Eighty K which Pleasure to be with you. Hope you had a great weekend and a even better start to the week. That's for sure. Well, market definitely did. That's a nice action today. Another record setting day for the Nasdaq composite. That's right. Friday we set a record. Today we added to it very nicely. Gonna give you all the details behind what happened. And then I will move into my Monday afternoon topic with you. It's gonna be a fun one, folks. Gotta warn you. I've titled today's show, The Retirement Tax Bomb Hiding in Your IRA. Here's what I mean. You may look at your IRA and believe, man, every one of these dollars belongs to me. But the truth is, the IRS may be a silent partner in that account. Today I'm going to explain how required distributions, RMDs as we call them, Social Security taxes, Medicare surcharges, and the death of a spouse can turn All of your hard work of a successful retirement savings plan into an absolute retirement tax bomb if you're not careful. Well, I'm gonna make sure that you are careful. I give you my word on that. So we'll get to that momentarily. Got a pretty brief update on the market. So I'll be to get to all my points hopefully today on the topic side of things. So things started off a little bit on the choppy side this morning. specifically, Dow side was down triple digits right before the open, just a few minutes before and then came back a little bit. Same with the NASDAQ. It was just kind of a sloppy start to the day. And then things just moved up. Oil prices moved up from their lows. They still finished down for the day. Bond yields, which were down, they moved up. And it was just kind of more of the same. People not paying any attention to it whatsoever. Rising bond yields, oil prices not doing much of anything. A couple of attacks in the Strait of Hormuz over the weekend. No impact whatsoever. So we finished in a in a very solid fashion. Let me give you the data. Finished with a gain of 90 on the Dow, 91 actually. Just a fraction of a percent, by the way. 51,267. NASDAQ rose 286 points, 1.05% to close at 27,477. Again, a record finish. And the SP 500 for the day at 51 points or 0.66%, closed at a level of 7,773. Well, like I said, oil prices were down for really the entire session. Bucks 77 lost to 89.33 a barrel. Gold was quiet today, just a $5.20 decline, finished at $4,157.40. And the old bond market, the 10-year treasury yield, finished the day up three basis points at a yield close of 5.31%. Now, why am I emphasizing that? Folks, that is a fresh high for 2026 on the 10-year treasury yield. But not only the 10-year, but the 30 year. That also closed at a high of the year. Up four basis points at a yield of 5.67%. But again, market not paying any attention to it. So we just keep plugging away and plug our nose and just hope and pray that we don't wake up one day and all these bond traders go, you know, there's some problems underlying in the economy, and we're going to show you why. But that's another story. Let's get to some of the movers that may be in your portfolio today. Meta was a nice performer today, up $13.82, 1.9% gain, one of the notable movers of the Mag 7. Finish the day at $741.90. let's see. company called PTC, I covered this on my stock updates this morning. Snyder Electric agreed to purchase the company in a $205 per share offer. PTC finished the day with a $48.23 gain, 33.49% to $192.26. Then we move over to the semiconductors. Overall, had a pretty good day, except for Intel in that group. Navidi was up $4.95, 2.12% rise to $238.90. Taiwan Semiconductor rising $13.13, 2.78% to $485.91. And Intel, like I said, kind of bucked that upward trend, finished down $3.14, 2.63% loss to $116.19. You SpaceX shareholders, you had a decent day today. $12.13 gain there, 7.63% to $171.09. Contributed to be one of the top performers of the Nasdaq today. Let's see, some underperformers. C.H. Robinson fell sharply after agreeing to acquire RXO and a stock and cash transaction valid at $5.8 billion. CH Robinson finished down $17.11, 10.85% loss to $140.61. RXO though, up 22.5% or $5.26 to $28.64. where do we set on a year-to-date basis? Here we are. NASDAQ now higher by 18.2%, leading the pack. R Russell 2000, not too far behind with a 14.7% gain for the year. SP's up 13.6%. And the old Dows is struggling a bit with a 6.7% increase. Told you it was going to be pretty short today. Like I said, not a lot of action. Very, very light calendar. I didn't get a chance on Friday as I did the the week on Wall Street to really recap or to look forward, I should say, to. what we have happening this week. So let me take this opportunity right now while I'm ahead of the schedule. we did have one report today, the ISM non manufacturing index. reading came in at fifty four point nine, a little below expectation in the previous reading of fifty five point four. So a little contraction in the non manufacturing side of the economy. Remember you want a reading above fifty to show expansion. So we got that. but anyways back to the rest of the week. On the seventh we are going to get the Fed minutes from their September meeting. I'm see if there's anything that the fly on the wall didn't That can tell us that maybe we didn't hear before. And then wholesale inventory is on the eighth and University of Michigan preliminary view of consumer confidence on the ninth. Other than that, it is quiet. But things are gonna change the following week. We've got a lot more important reports and also third quarter earnings season begins. Yeah, it's already here. Sounds like we just finished up. so with that said, I'm gonna get an early start so I can get through all my topic. All right, here we go. I want you to do me a favor. I want you to imagine opening your retirement account statement. And you see a balance of one million dollars. Well, for many of you, you're like, pfft, got double that or triple that. Others are like, hey, got a few thousand bucks. Doesn't matter. Just imagine for let's play the game, seeing a balance of a million dollars. You probably think, you know what? I have one million dollars saved for retirement. I can do whatever I want to do when I want to do it. But if that money is sitting inside of a traditional IRA, a 401k, 403B, something like that, where it's pre-tax. I hate be the bearer of bad news, but you may not really have $1 million available to spend. The true answer is you have $1 million before taxes. You see, because the IRS has been patiently waiting in the shadows for its share of your IRA. You know, for decades, Americans have been encouraged to contribute money to tax deferred retirement accounts, right? You've heard me say a million times IRA is one of the best kept secrets out there. Same with the 401k. You received some of you for the IRA, definitely on the 401k most cases. You received a tax deduction. Well, you reduced your taxable income. The investments grew without any annual taxation, no dividend tax, no capital gains tax, nothing. And you postponed paying the in the the income tax bill until such time that you retire. Very powerful strategy. You want to do a fun exercise? Get online to to some of the retirement or financial calculators out there. And do me a favor, run a comparison. I don't care what dollar amount you pick. Pick 100,000, 200,000, 10,000, it doesn't matter. And grow it out over, say, 20 years. One taxable, one tax deferred. And watch and see the value difference. Most cases it's usually double if you're able to grow it in a tax deferred investment versus a taxable. And especially if you're in a high income bracket where you're, you know, you're selling, doing a lot of trading, selling investments. on a short term capital gain, which is tax at your income tax rate and so on and so forth. But bottom line, I think you all know this. Dollar for dollar, everything else being the same, you know, same time period, same investments, same rate of return, etc., you're gonna have significantly more growing tax deferred than you will, of course, growing taxable. But the bad news is eventually the government wants its money. You see, under current law, required minimum distributions generally force money out of the traditional retirement account beginning Not at seventy seventy and a half anymore. Nope, those days are gone. Age seventy three. And for some of you that are younger, age seventy five, if you're covered later by the secure two point zero timetable. But for today's discussion, we're gonna say age seventy three. So long ways away if you retire at sixty-five. Now, those distributions can create what I like to call a chain reaction. And here's why. You see, those distributions, the required minimum distribution that comes out, as you all know, it's taxable income to you. But they can cause more pain for you in other areas. They can cause more of your Social Security benefit to become taxable. They can increase your Medicare Part B and Part D premiums. They can push investment income into higher tax brackets. And after one spouse dies, the survivor may face many of those same income sources while filing as a single taxpayer. That, folks, is what I like to call the retirement tax ball. But I've got some great strategies lined up for you to minimize a lot of that. You just have to stick with me for the next roughly 43 minutes or so. Back to John Sancho Show and New Stock 780K Witch. Happy Monday to all of you. Good day in the market, at least on the NASDAQ side. Pretty quiet on the Dow and the SP though. 91 point gain on the Dow. NASDAQ rose 286, 1.05% to a record close of 27,477. And the SP for the day higher by 51 points or 0.66%, closing at 7,773. Oil again down to buck 77 to 89.33 a barrel. Gold give up $5.20. Close at $4,157.40. And a three basis point increase on that 10-year at a yield close of a high for 2026, yield close of 5.31%. All right, I'm in my topic now: the retirement tax bomb hiding in your IRAs. Okay, so once again, we find ourselves in a situation where it's very easy to get excited through all your hard work and diligence and good market reaction, et cetera, that you got a good chunk of money sitting in your IRA. But today, what I'm helping you with is to realize that. It's not all your IRA. The IRS wants a good portion of that, unless of course it's a Roth IRA. But there are some strategies, very effective strategies, in my opinion, that you should consider if you want to reduce that ticking time bomb, the tax time bomb that is. Okay, so let's see, where did I leave off? Let's get going on Some frustration. There we go. You know, I would say the most frustrating part is that many of you that are retirees or soon to be retirees have a window of opportunity to reduce this tax bomb. But a lot of times you fail to use it. So because you just don't know. That's why I wanted to do today's topic. You see, that window may occur after you retire and that paycheck ends. But before The required minimum distributions to RMDs at age 73 begin. It may also occur before Social Security pensions and other income sources are fully activated. So during that gap, let's say that traditional retirement age gap of age 65 to 73, during those years, you as a retiree may have more control over taxable income than at any other point in your retirement. You may be able to take strategic IRA withdrawals. You may be able to do some partial Roth conversions. You may be able to realize capital gains on some of your other investments outside the IRA. You may be able to make qualified charitable distributions or coordinate the timing of your Social Security. And I'm going to go into more detail on all those here in a moment. But if you do nothing, the IRS may eventually begin determining how much money you must leave. Retire or how much money must leave the retirement account each and every year. It's called the RD. So today I'm going to help you examine what I call the four fuses attached to the retirement tax bomb. And they are as follows: required minimum distributions, Social Security taxation, Medicare surcharges, and the surviving spouse tax trap. Then we're going to discuss strategies that may allow you to defuse that tax bomb before it explodes. Because you see, a successful retirement plan shouldn't merely ask how much money do I have in my my IRA accounts? No, it should ask how much of that money will I actually be allowed to keep? So here we go. The IRS is your silent partner. You see, these following accounts that I'm going to mention, they don't have identical tax treatment. I'm going to lay out three different accounts. Traditional IRA, generally pre-tax, right? Many of you put that money in pre-tax. Withdrawals, they're generally taxable, and lifetime RMDs are usually required. And that's traditional IRA/slash 401k. Roth IRA. You contribute after tax. Your withdrawals qualify as tax-free withdrawals, both state and federal levels. And your lifetime required minimum distributions or RMDs, there's none because it's a Roth IRA. And finally, the taxable account, again, you're funding that with after tax dollars. Your withdrawals, interest, dividends, and gains may be taxed either as dividend income, interest, short term capital gains, long term capital gains, just depends. But of course, there's no lifetime RMDs. So again, for those of you that may be just approaching retirement or you're new to it, just keep in mind that RMDs are required for your traditional IRAs. If you move to 401k to want an IRA rollover, if you have a spousal continuation IRA, basically any type of an IRA that was funded with pre-taxed dollars is most likely going to be subjected to an RMD. All right, key point. A $1 million traditional IRA is not economically identical to a $1 million Roth IRA, or even a taxable account for that matter. You see that a traditional account contains an embedded future tax liability, that ticking time bomb that I just mentioned. The size of that liability depends upon a number of factors. First factor, your future tax rates, right? We all hope that rates are going to go down, but most likely, especially with a $40 trillion deficit. We're gonna see tax rates go up. I don't care who's in office. The other thing that your embedded future tax liability depends upon is your income or other sources of income. The timing and sizes of your IRA withdrawals, your Social Security taxation, your Medicare premiums, your state of residency, and whether the owner or beneficiary makes the withdrawal. So again, your IRA statement, your brokerage statements, that's I want you to look at this a little bit differently. That's your gross balance, right? That's like your gross income. It's your gross balance. Your retirement plan must calculate the net balance or what we call the spendable balance after taxes are accounted for. So let's begin our discussion on one of the most confusing areas of IRAs and in retirement planning. Always getting these questions. The required minimum distribution, RMDs we call it. Under the current rules, the traditional IRA and of course many employer retirement accounts eventually require annual distributions. Called an RMD. Now people always go, how in the world is this calculator? What am I looking at? Everyone always wants to know what am I looking at my first year? And and I always tell people just in a general sense, you have to run the tables, but in a general sense, you're looking at approximately four percent of your December thirty first balance will be your first year RMD distribution. That's just generally how it works. Right around four percent. So we look at what's called the standard uniform lifetime table factor. Because the calculation is really simple. I should back up to this. How's an RMD figure? It's your previous December 31st account balance divided by the IRS life expectancy factor. So I looked that up and because I forgot it off the top of my head, because we have it all done electronically now. At age 73, the current standard uniform lifetime table factor is 26.5. That means at age seventy three, the IRS thinks that you're gonna live another twenty six and a half years. So what does this mean? Let's say you did well. Let's say you have your retiree with $2 million in your traditional IRA, you can have an initial RMD of approximately $75,472. Now, you may be saying, yeah, that would be great. Why do you act like that's a problem, John? Well, I'll tell you why. In reality, usually what I've seen with clients over the years, if you get to this amount of accumulation, say this $2 million example. You're probably doing pretty well in other areas of your life. You probably have very little if no debt. You probably have a pretty nice, fat, taxable brokerage account. You have other investments, et cetera. And what I hear from our clients, I don't think I've ever had one client that says, I can't wait to get my RMD. Instead, the answer is, my God, do I really have to take it? Yes, you have to take it. What am I supposed to do with it? That's up to you. Are there any strategies? Yes. And then the reality is, at least with our clients. Again, just giving you a prime example. What most of our clients will do, especially if they're large withdrawals, like the example I just gave you, they'll take that money. Of course, they got to pay taxes on it, so they'll back the tax liability out. And then they turn around and invest that money back into their taxable brokerage account. They don't want the money. But again, you're free to do with it as always, tell people whatever you want to. If you have debt to pay off, you want to go take a vacuum, you can do whatever you want to do. It's your money. You have now satisfied the RMD. And remember, The last thing in the world you want to do is mess around with the IRS and not take that RMD because the taxes and the or the penalties, excuse me, are very, very substantial. I'm not going to get into that, but roughly right around 50% of what you were supposed to take. So you don't want to miss it. And remember, there's no way people have to go, well, geez, how's the IRS going to know if I took my RMD? I'll give you behind the scenes. We and our custodian have to report it to the IRS. Via 1099, that the client took the withdrawal. So they know that it's taxable. Our custodian then issues, of course, a 1099 at the end of the year. Well, guess what? They send you a copy and they also send a copy to the IRS. The IRS matches it up. If you're supposed to take $75,000 in this example, and we submit a turn that into the IRS in a 1099, and then they get your tax return, and the algorithms look at it and go, you know, Frank had a $75,000 distribution or was supposed to, and he didn't take that. Well, there's a problem. Or Frank took it and didn't want to claim it. I mean you get my point. Just don't mess with the IRS. That's the bottom line. It's very, very, very not worth it by any means. But yes, you have to take it. Or like I said, you're subjected to some very severe penalties, so on and so forth. Welcome back to the John Sanchez Show on New Stalk 780K Witch. Happy Monday to you, 91 point gain on the Dow NASDAQ up 286 to a record close of 27,477, and the SP up 51.66%. All right, I'm getting right through my topic: the retirement tax bomb hiding in your IRA. Have you ever said something and then it you take a couple seconds and you go, wait a minute, that just does not sound right. Well, I just made a major mistake that I want to admit and own up to. Told you the penalty for the f failing to take your RMD is 50%. I forgot. That has changed. It is 25%. That was changed with the Secure Act in 2023, I believe it was. So I apologize. so, anyways, yeah, 25% penalty. But I I did not get a chance before we went to break, but I did want to mention this. That 25% tax penalty drops to 10%, by the way, if you correct the missed RMD in a timely manner, which they consider within about two years. So let's say you're supposed to take it out in 2024. you forgot, you missed, you intentionally didn't do it, whatever the case is. then again, if you correct that with the IRS within two years, so 2026, then the penalty drops to 10%. But again, 25% if you miss it altogether. All right, I apologize about that. Okay, so now let's get back to our topic, the RMD, the first trap in the RMD. So keep this in mind, again. Age 73 is when your first RMD is due. Remember, if you're already taking more money out than the RMD requires, so in that example, I or actually I wasn't gonna give it to you. No, I did give it to you. Yeah, $2 million, the life expectancy or IRS factor of 26.5, you're supposed to take 75,472. So Here's the the the little gotcha you have to watch. So you have until April of the following year to take out your RD from your birthday. Okay. But the problem happens, you may go, hey, that's great. I could hit the delay taking out this 75,000. The problem is you can find yourself in a situation where you have to take two RDs out. Because remember, it's based upon the previous year's balance, your aggregate balance of your pre-tax IRAs. So remember, let's say, okay, here we are 2026. And let's say you're supposed to take out seventy five thousand four seventy two, but you can wait until twenty twenty seven, April of next year. But guess what? In 2027, you're gonna have to take 2026's RMD and 2027's RMD. Again, if you're talking large IRA account, that could be a significant sum of additional income and all the problems, again, that that additional income can cause that I'll go over here in just a moment. Okay, so again, you can delay the first RMD by April 1st, second RMD has to be made by December 31st. Two distributions in one year increases the taxes, Medicare exposure, et cetera. All right, tax bomb number two, the second fuse, I like to call it. The Social Security taxation. Now, dependent upon combined income of you and your spouse, as many of you know, up to 85% of Social Security benefits can be included in your taxable income. Now, that of course does not mean that your Social Security is taxed at an 85% rate. It means as much as 85% of the benefit may become subject to your applicable tax rate. Now, combined income generally includes what? It includes adjusted gross income, tax exempt interest, one half of Social Security benefits. And remember, federal taxation may begin when combined income exceeds $25,000 for an individual, $32,000 for a married couple filing jointly. So it's not much. So for most people, their social security benefit is taxable. Now, the IRA distribution, the RMD I'm talking about, or the Roth conversion, where you take a pre-tax IRA and convert it, all of it or a portion of it, into a Roth IRA, can therefore create a double tax effect. The distribution itself may be taxable, number one. Number two, it may cause more Social Security income to become taxable. It's kind of like a domino effect. You know, easy example, I guess, that just popped into my mind is one dollar IRA withdrawal can sometimes cause more than one dollar to appear on the tax return because it may also pull the additional Social Security income into the taxation side of it. So that's why you gotta be really careful. You gotta have a good team behind you. Tax bomb fuse number three Medicare IRMA. I've covered this a few times, but I thought it'd be a good time to talk about this again. I R A A. That's the acronym for income related monthly. Adjusted amount. What a mouthful. IRMA relates to Medicare Part B as in Boy and Part D, D as in David, and the premiums and how they can increase for higher income beneficiaries through this IRMA. So for 2026, IRMA begins when 2024 modified adjusted gross income exceeds $109,000 for individuals, $218,000. For married couples. You may be going, wait a minute, John, it's 2026. Why are you talking 2024? Because Irma has a two-year look back period. Income reported this year can affect your Medicare premiums and two years later. So 2028, we'll call it. Now, income that could trigger or increase your IRA includes the following: large IRA distributions, Roth conversions, capital gains, business income, property sales, large bonuses, certain investment income, et cetera. But I want to give you a real important clarification. Crossing the IRMA threshold. does not merely apply to the surcharge to the dollars above the threshold. It can move the beneficiary into a higher Medicare premium tier also. So for a married couple, the increase can affect both of you, both spouses. So it's not just one person. And where people I've seen get themselves in trouble with this, number one, they don't know about it. And number two, when they, if they do know about it, they go, you know what, Mr. Financial Advisor or Ms. Financial Advisor, I want to do a Roth conversion. Everyone on Wall Street says that's a great thing to do. You know, yeah, a Roth conversion may save taxes later, but if it is a poorly timed Roth conversion, it can also increase your Medicare premiums two years from now. I promise you're going to forget about it in two years from now. Now, that doesn't necessarily make the conversion wrong. It just means the complete cost must be. Calculated. All right, tax bomb fuse number four, the surviving spouse tax trap. Now, this may be probably one of the most overlooked retirement tax problems. After one spouse dies, one Social Security benefit usually disappears. Remember, surviving spouse generally will receive the higher of the two. So if your husband was making, he passed first, your husband was making $3,000 a month Social Security, you're making $1,500, you're gonna get his $50, his $3,000. Some pension plans or pension income, I should say, may be reduced or eliminated. This is another gotcha that's out there. Always make sure, especially if you are in your second or third or fourth or a tenth marriage, that if you're counting on your spouse's pension, that you know, was that set up single life before you guys got together? Was it set up well, I'm not say joint for the previous spouse. That really happens because of divorce decrees, but If they take the are taking that pension before you got married, most likely it's going to be a single life pension. That means it stops the minute that your husband or your wife dies. Okay. Now, if it's joint where he took that benefit while you guys were married and you selected joint, different story. And remember, there's all different kinds of joint. There's 100% survivor, 75%, 50%, all kinds of different things. But I've seen way and I've had, be honest with you, way too many widows crying in my office. When they found out, A, the husband just died, and B, his three, four, five, six, seven thousand dollar pension is gone. Because he took that pension before he they got married. She's used to living off of it. Now he's gone, and so is the pension. The other thing, after one spouse dies, your household expenses remain the same. I covered this before. The survivor may inherit the C spouse retirement accounts. Guess what? RMDs may continue on that one. And the survivor usually begins filing a single taxpayer. Do me a favor, look at the tax charts. You can find them anywhere on the internet and look and see. Use the same income range for a single taxpayer versus a married filing jointly. Roughly, and I underlined the word roughly. Your tax law, your tax is about. Double being single than it is being married. So it is expensive to be single. There's no doubt about that. So you can therefore have slightly less income, but face lower tax brackets and lower Medicare thresholds if you do things right. But if not, you can be in for again a ticking tax time bomb. All right. When I come back, the retirement tax planning window. Back to the John Sanchez show on News Talk 780K, which we've talking the retirement tax bombs hiding in your IRA. All right, now let's get down to the retirement tax planning window. You see, many of you that are retirees experience several years between leaving the workforce and beginning your RMDs. Again, if we use traditional retirement of 65, RMDs start at 73. So, you know, again, we're looking at what, eight years? It's a big window, but only if you do things correctly and you plan. So during this window, you may have the following, or not have, I should say. No employment income, no required distributions, social security that has not yet begun, relatively low taxable income, and significant money inside pre-tax retirement accounts. So these years can offer an absolute huge opportunity to deliberate recognize income. at manageable tax rates. So here's a po some possible strategies to think about during this window. Move a, and I underlined the words, carefully calculated amount from a traditional IRA to a Roth. Now remember, that conversion is generally taxable in the current year. Future qualified Roth withdrawals may be tax-free, but remember, you got to leave the money in for five years or 59 and a half. You're probably going to be over 59.5. So you got to leave it in there for five years. You can always take out your original amount, your principal, but it's the gains that you have to wait five years to take out if you want it to remain tax-free. Remember, Roth accounts do not have lifetime RMDs for the original owner. And the conversion may reduce future traditional account balances and RMDs. That's why I'm seeing more and more people, like I said, in that retirement age, thinking about RMDs. That never used to be the case. It was, I'm sorry, think about RMs, think Roth conversions. usually, again, it was usually the younger people that would do that. Now I'm finding many more people want to consider it at least, later in life. But remember, the objective is not necessarily to to convert your entire IRA. The objective may be to fill a choosing tax bracket without intentionally triggering excessive Social Security taxation, capital gains taxes, Medicare, surcharges, et cetera, that I've mentioned. And I should stop right here and just give a preface. Please make sure that you consult your tax advisor before doing any Roth conversions. Because he or she can factor this in in your in their tax software and calculate all these things. That I just mentioned. All right, next thing in this window strategic IRA withdrawals. See, a retiree may withdraw traditional IRA money before those RMDs begin. Like I started to say earlier. If your normal withdrawals exceed the RMDs, the the RMDs are not applicable. So again, let's say the RMD says you have to take out $50,000 a year from your from your traditional IRA. Well let's say you're taking out fifty five thousand, then you have no RMD. It's satisfied. People always think, not always, but a lot of people think, geez, I gotta take out my RMD plus what I'm normally taking out. And that's not the case. Just remember, as long as your RMD is satisfied, there is no RMD. It's only designed so the IRS can get their hands on your money if you're not taking enough out. So strategic IRA withdrawals. next one, delay Social Security when appropriate. I thought about this one. If you delay the Social Security benefit, you may create additional years for strategic withdrawals or the Roth conversion, but also increasing the eventual monthly benefit amount. And remember, not appropriate for everyone. You have to look at when you know people say, geez, when do I start my social security? And my answer always is when you need it. Right? Remember, you get a nice little you know eight percent bump every single year between age six well, your full retirement age, if you're 65 or 66 years and 10 months, whatever it may be, up until age 70, it's a nice 8% guaranteed raise. So health, longevity, cash flow, and the survivor's benefit must be considered. And darn it, I'm out of time, but qualified charitable distributions back to the RMD. Beginning at age 70 and a half, an eligible IRA owner may direct money from the IRA straight into a qualified charity to satisfy all or part of their RMD. That means you're not paying taxable income on that. So complicated area there. But if you need more information, of course, just give me a holler on that one. So I'll kind of close with this. Tax deferral is extremely valuable, like I said at the beginning of the show, but tax deferral is not tax forgiveness. That's why planning and strategizing is really the most important thing you can do to keep every dollar that you can in your pocket and not the government's. God bless. Have a great afternoon. We'll you tomorrow on the John Sanchez Show.