They say timing is everything, which is most definitely the case when it comes to year-end financial planning. That’s why Host Josh Bretl is bringing us his Top Six End-of-Year Considerations as we bring 2022 to a close. This episode of Retirement Equals Freedom (crisply choreographed with a big assist from Erin!) features a comprehensive “to do” list related to taxes, retirement account distributions and charitable giving that you’ll want to strategize about over the coming weeks (perhaps with help from your qualified advisor).

You’ll also learn why it’s time to look at your Medicare coverage, whether now is the time to “harvest” losing stock picks and when it makes the most sense to opt for a Roth IRA conversion. The episode wraps with another round of that perennial favorite – Get to Know Josh and Dave – as well as a Dave Relates to Retirees that will leave you with a strange craving for pumpkin spice anything.

And don’t forget a very important year-end homework assignment from Josh that’s applicable to all of us, whatever our stage of life: Get busy dreaming! Each new year brings a chance to build that bucket list! 

Stay tuned for frontline reporting on whether Dave is allowed to bring his new water balloon slingshot to the offices of FSR Wealth. And if you haven’t tried it already, click here to get $25 off your first order of Cometeer Coffee. It’s the greatest!

Click here to learn more about or listen to previous episodes of The Retirement Equals Freedom Podcast. And don’t forget to join our private Facebook group, which you can find here. Don’t want to miss a thing? Visit this link to sign up for a weekly email with all the latest!

Need help figuring out your year-end financial planning strategy? Click here to explore the services that FSR Wealth Strategies offers and schedule a discovery call with one of the team’s CPAs. When it comes to living your best life, it’s never too early to get started!

We make big long plans for people, and we're planning for people for 10, 15, 20 years.

But there's things that we have to implement every single year.

And a lot of it is very time sensitive.

And so there's things that we need to do within a calendar year or at a certain time of the year.

And so year end is when we do a lot of things.

They say timing is everything, which is most definitely the case when

In this episode, Josh brings us his top six end of year considerations as we bring 2022 to a close.

Today is a comprehensive to-do list related to taxes, retirement account

You're also gonna learn why it's time to look at your Medicare coverage, why now is it time

Woo.

This is gonna be a good one.

This is The Retirement Equals Freedom Podcast.

Your host, Josh Bretl, is the owner of FSR Wealth Strategies and for the last

Me?

Well, I'm Dave Josh's longtime friend, co-host and fan of water balloon slingshots.

So now let me let you let me, end this introduction so we can talk all about year end planning.

FSR Wealth Management is a registered investment advisor located in Elmhurst, Illinois.

Information and opinions contained in this audio have been arrived at by FSR Wealth advisors.

All information herein is for informational purposes and should not be construed as investment advice.

It does not constitute an offer, a solicitation or recommendation to purchase any security.

FSR is not providing legal, tax, accounting, or financial planning advice in this audio.

These views are as of the date of this publication and are subject to change.

Oh, David.

Josh loves a good slurp.

When Landon was little, did you guys read the David books at all?

Oh, yeah.

I feel like when I just said, Oh David, it was kind of like how Zach, I think

They always grossed me out though.

Yeah, they're always about picking noses and...

Yeah, just raunchy stuff.

Yeah.

So you and I just finished lunch.

And I have, like everything else, a needless story about it, but this is the

This is a go-to for Missy and I I have terrible eaters as children, one of

Just traditional ground beef tacos, like the little seasoning packet with ground beef.

And they don't even like the shells.

They just like the meat.

And then chips and guac.

Well, you have it so often.

I mean, I don't mind that stuff.

I grew up with that.

I can't eat it anymore.

We've had it so often, it's just repulsive.

So it's gotten so bad where now if it's Taco Tuesday if we're having tacos

And Missy and I'll actually order from this restaurant.

We went to Guac N Tacos for lunch today and it was phenomenal.

Phenomenal is the right word.

I am no stranger to tacos as you can imagine.

Erin, you know I love tacos.

And you...

Why would Erin know you love tacos?

Well, because she knows I love food.

Yeah.

And so I naturally love tacos.

Do you think she's going to make that extrapolation?

What does that mean?

She's going to...

It's like big word Friday here in the office.

Yeah.

Today we're talking about year end planning, and Dan was just here in the

And he apparently commented to Erin because we told him we were going to talk about year end planning.

"What's Dave going to know about year end planning?"

Let me correct you.

I'm pretty sure his comment was, "I bet Dave is the one that knows all about year

I think it was a facetious sound though.

Listen, I can pick up on sarcasm.

And I picked up, no sarcasm there whatsoever.

No, I'm just extrapolating.

But yes, Guac N Tacos was delicious.

You have had a client event there in the summer.

And you're doing another one here in October, and I will be going to that one.

I'm sure you will be.

Yes.

Sure you will be.

I mean, I'll have some value there.

I'll maybe talk to people or give an introduction or sign autographs.

I'm not sure here.

So you have a story on here that you mentioned you wanted to talk about.

Yes.

So it's pretty cute.

Episode 21, we talked about the secure act, but specifically during our segment of Get

And so I went the route of a water balloon slingshot was something that I always wanted

I got a text message from my dad the other day.

Actually, let me read it here really quick.

This is a text message probably took him a long time to type.

Oh, yeah.

Right, Big Mike.

I mean dad, I still have to teach you the difference between a text message and email.

I'll get to that eventually.

But this message said, "Hey, a surprise is headed your way.

You should receive it by Friday.

We are never too old to outgrow our childhood dreams.

Let we know when it arrives.

Love you."

And I thought, okay, my dad's the best.

We even talked about it in the podcast.

I didn't get the water balloon sling shot because my dad didn't want me to get it.

It's because my mom didn't want to get it.

So old man, if that is in fact what you sent me, we are going to have lots of fun.

We're going to start pegging people here outside the building when it arrives.

There's a funeral home across the street from our office.

Big funeral days, we're just launching water balloons.

Yes.

We could probably hit the gas station from here if you try.

Oh, we could, but we won't don't that.

No, no, no, no.

We are nothing but professionals here.

So what do you think he's going to send you after we talk about year end planning?

Well, let's hold that off until the Dave relates to retirees

How's that big word for you, Josh?

In high school is when you and I became friends in the nineties, and one of the

Yes.

And it was a common word between all of our friends.

I had no idea what it was until I heard I think you use it.

Do you know what this word was?

I mean, there's a few.

There's therefore hence.

There's, oh, wait, wait, wait.

Foreshadowing.

No, no.

There's a plethora.

That was the word that I had no idea what it was.

And I heard you guys were like, thought this was the greatest word ever.

I thought if I'm going to hang out with these guys, and I want them to make me think I'm cool.

Well the verdict's still out on that whole you being cool thing.

But I will say this.

I do feel like we are the most prepared today than we've ever been for an episode.

I am so confident in what we're talking about.

So today's topic, let me introduce today's topic here.

And our office gets really, really busy this time of year.

My dad used to always say, after Labor Day, all of a sudden the phones start ringing.

And it still holds true because people come out of that summer mode, and they

But it's really October and November, our office is just nuts.

And that's because of year end planning.

There's a lot of things that we make big long plans for people, and we're

But there's things that we have to implement every single year.

And a lot of it is very time sensitive.

And so there's things that we need to do within a calendar year or at a certain time of the year.

And so year end is when we do a lot of things.

And the reason we do it at year end is because we know what's happened that year.

I mean, if we did it in February, we don't know what's going to happen the next 10 months of the

Does that make sense, Dave?

Well, yeah.

It's not called beginning of the year planning.

No, no it's not.

No, it's not.

It's end of the year.

It's much harder to extrapolate the farther out you go from the beginning

That is number three already.

So what are some things that we look at for the end of the year?

A lot of these are tax related because of their...

Hashtag tax nerd.

Hi, Al.

By the way.

I am just this close to getting him to record Taxes and Os for me.

So if I get it, it's going to be great.

But a lot of these are tax related, and that's because of the tax deadline

So I want to go through these a little bit.

And one of the first, and we talked about this a lot, in fact, we've done whole

Oh, I thought you were going to go with Puddin' Cakes.

We have not done a whole episode on it.

We haven't talked about Puddin' Cakes in a while.

But you know what I might love as an adult more than Puddin' Cakes?

Taxes.

No Roth IRAs.

Oh man.

Do I need a Hashtag Roth nerd?

Hashtag Roth nerd.

Let's see if I can get Al to do that But the conversion of a Roth IRA is essentially,

And you do this for tax purposes.

So you pay the taxes now so that you don't have to in the future.

And the deadline is if you're going to do it in a year and have it show up in this year's tax return,

So what we do in our office is we look and we say, okay, here's all the

If we add 10,000, 20,000, $200,000 of Roth conversion, what does that do?

So what tax impact does that have?

And then we compare it to if we don't do anything, what it would be in the future.

And we have pretty sophisticated but yet easy to understand tools that

So Roth IRAs the first one converting to a Roth.

Yeah.

Now that conversion can change every year.

Those are decisions you have to make every year.

So that's why doing things by the end of the year is important.

The next one is a big deal that few people think about and probably more people should do.

And that's tax-loss harvesting.

Hashtag tax nerd.

Yeah.

He's going to come in a lot today with that one.

Okay.

Maybe I'll just hold off on hitting that button again.

No, I think you might want to just hold it down.

Oh, okay.

Tax-loss harvesting is only done in non IRA accounts, so they're non-qualified accounts.

You want to think of your individual, your joint, your trust, things along those lines.

And if you're holding equities or even anything that's gone up or down in value, now is a

So what does that mean?

Well, you may have these large capital gains.

So especially if held stock for a long time, you may have some losers that you

And there's a way to do that pretty systematically.

And tax-loss harvesting some years can be really beneficial.

Some years tax-loss harvesting can be not as beneficial.

It never hurts you.

But this is going to be a year with all the volatility that we've had, tax-loss harvesting

Can you give me some examples of these?

Did you use the word equities?

Equities are stocks.

So not like my house has lost value.

This is nothing to do with...

No.

So let me put this perspective.

So let's say someone bought Apple in 1985, and now they're a gazillionaire.

If they were to sell that, they'd have to pay taxes on that gain.

Capital gains, right?

Capital gains, Yeah, capital gains.

But let's say they bought something, I don't know.

Blockbuster.

Blockbuster.

I don't even know Blockbuster stocks going around.

They bought something that is way down in value, now may be a time that they can

And they can sell some of the shares of Apple or whatever they have as a gain, and

Now people will say, well, what if I still want to hold Apple?

Well, there's things that we can do to talk about that and to make that happen in the future.

But this money that you have these huge gains in, unless your sole goal is to gift it to your

if you're going to end up spending that money, most people want to spend their money or at

We have to find a way to pay the taxes or get it out in the cheapest way possible.

So tax-loss harvesting is something that you have to do before the end of the year.

And there's some time sensitivity to that.

End of the year is also the deadline to take RMDs or required minimum distributions.

And this year it's going to be even more important for people.

People who have their own IRAs.

They're over the age 72.

They're used to taking RMDs.

But there's one specifically that I want to point out, and that is for inherited IRAs.

We talked a little bit about this with the Secure act in a prior episode, the Secure

And what it said was, you had 10 years to take the money out.

Well, originally we thought, Hey, within the 10 years, you got to take the money out.

They don't care if you do it all in year one or all in year 10 or somehow spread it out.

Well, the IRS has since two years later come out with guidance on how that should be done.

And they want you to take out over that 10 year period.

So equal amount, right.

Equal amount.

So if you have inherited money, someone who passed away from 2020 on to now, you need to

And so what they do is they tax you still as if you should have taken them out.

And then they impose a 55.0% penalty on top of the tax.

Oh, my oh my.

So you don't want to mess around with required minimum distributions.

So that's something that we want to make sure gets cleaned up and gets taken care of.

One of your most popular quotes from that episode was...

Oh, I have many.

Well, you do.

There's two.

But one was with the government giveth, they also taketh the way.

But the other one was, with the Secure Act, people could end up paying significantly

Sometimes I just get teary eyed that you listen to me.

Well, Josh, just a quick little breather.

This came to mind because neither of us are drinking coffee right now.

Did you see Cometeer Coffee had some press?

No.

The long story short, Goldman Sachs said no more free coffee in one of

So that day, Cometeer brought a table outside one of their offices and gave away

And they got press and Entrepreneur and Ink Magazine and all these things.

They probably, everyone heard about it from our podcast.

Well, that is exactly right.

Goldman Sachs is a little intimidated by me being on this podcast.

They've been trying to recruit me as you well know to be their lead whatever they do.

But yeah, Cometeer man, good for you guys.

Don't forget the small guys like me.

The fact that you don't know what Goldman Sachs does doesn't

So let's move on.

Let's keep going on year end planning here after we talk about our Cometeer.

But

Now is a time to talk about charitable contributions too.

And I've always told people never give to charity for a tax deduction.

But if you're going to give to charity, make it as tax advantageous as possible.

But there's a couple things you should be thinking about.

And with the new tax law's in there, sometimes charitable contributions don't help as much.

And if you are RMD age, maybe you should be looking at something called we call QCDs, which

And what that means is taking your RMD money, you could go up to $100,000.

Now, I don't have any client right now that's donated $100,000 in a year, but

And so what that means is it doesn't even show up in your tax return.

So it gets to avoid income, which has the chance of lowering the taxation on social security.

It has the chance of lowering how much you pay for Medicare.

There's all sorts of benefits in these qualified charitable distributions.

Plus, if you're only taking the standard deduction anyways, then these QCDs can really benefit you.

So now is a time to act on that as that's there.

All right.

Let's talk a little bit about Medicare.

We don't do any Medicare in our office.

We don't sell any Medicare policies, but most of our clients are Medicare age or at least close to it.

But Medicare open enrollment goes from October 15th all the way through December 7th.

So this is a time where if you would like to change Medicare policies, this

So if you have any changes, especially check your Medicare Part D because those prescription

Formularies is what drugs they cover, what price they change every year so do

That was my mistake.

I was looking at Form G, and I was just filling out the wrong information.

You get that G and D all mixed.

Yeah, it sounds similar.

But one of the big ones here, this is kind of the last one that I want

And I tell every retiree, now is the time that you have way more control in your

So by doing a projection, you can determine do you want to add more income?

Is now a time that we should be pushing income till next year?

And that's different for every person.

But unless you're taking the time at the end of the year to kind of do that projection,

And by doing that projection, that allows you to make good decisions because you don't

And if they're in the office the same time as me, I can project their next few

You could extrapolate how much coffee you're going to drink over time.

Now you're just showing off because I don't know how to use the word correctly.

We're going to get it before the end of the year.

All right.

I'll see.

So now the last bullet point.

Now I said the last one I said was final, and that was the final planning

But this one is the most fun.

This is start dreaming of 2023.

Start thinking big, start figuring what you're going to do.

Do that bucket list of what are you going to do in that year?

Because your money is not something that you put on a wall.

And it's not art just to look at.

It's there to make your life better.

So what are you going to do next year?

It's not like my Sleepy Hollow figurines.

You don't just sit there and admire it.

That is pure art.

Dave.

Pure art.

Thank you, I appreciate that.

So is the mural that you and I had painted a few years ago.

Remember you and I riding that bull through the pastures?

I was worried.

I was like, what's he talking about?

Yeah.

Anybody who watches Modern Family will know the bull.

Okay.

Yeah.

2023.

I think that's the year of my arcade.

Your old school retro arcade in your basement?

Yes.

Not me opening my full blown arcade for people to enjoy.

But yes, I think Carla might finally let me buy an arcade for the basement.

We don't have much room or we put in the office.

That's what I'm trying to actually push for.

And that way you pay for it and then it's here.

That's not happening.

Okay.

So okay, the bucket list, Josh, I mean, what's on your 2023 bucket list?

Have you not sat down and figured it out yet?

No, I haven't.

And I usually do.

Do you?

Yeah.

I'm a big bucket list planner.

I love that stuff.

Yeah, I remember you were about your summer bucket list.

Yeah.

No, I have not.

We're starting a big house remodel, fix up.

So it's kind of like all that's on my mind.

It's just getting to 2023.

I think we should do a future episode on bucket list items for 2023.

I think that'd be great.

We can ask your clients.

Oh, what theirs are.

Oh, it's going to be fun, David.

So Dave, I think people want to get to know us.

You think so?

I think so.

Yeah.

What, what?

Okay.

Hey, Mr.

Josh, let's take a break.

You've been talking for so long, and my ears are sore.

Let's not make them snore.

Listening shouldn't be a chore.

So let's get to know Josh and Dave and watch our ratings soar!

Well, I don't sing along to this.

You do.

But you can't help yourself to dance.

I agree.

Alex liked the music too, just the underlying music.

Yeah.

Did he?

Yeah.

He wants just that to be able to play in his room.

He does have that app now that he can make his own music, right?

Didn't you say?

Oh, that's right.

Yeah.

On his...

On his iPad or Chromebook.

Chromebook.

Yeah.

That's cool.

All right, Dave, I got a question for you.

I'm ready for it.

Okay.

All right.

And I actually don't know my answer for you.

I know my answer to this, but I don't know what your answer's going to be.

Do you like to plan things out in detail or be spontaneous?

If you guys could see the concentration on his face right now.

Yeah, it's intense.

It's like deep thoughts by Dave Schmidt.

I am not spontaneous at all.

I'm also not a planner really at all.

You just exist.

You're just going from place to place.

I'm just kind of there.

Like a pinball that just goes around.

Yeah.

I'm kind of just in the middle, man.

I'm kind of like a free agent in life, you know what I'm saying?

If Josh needs me to give an introduction at one of his workshops, I'll do it, man.

But ask me to plan a vacation or even look at the Schmidt calendar for the upcoming weekend.

I'm just not going to, I just don't do it.

Josh, are you spontaneous?

Are you a big planner?

I'm a planner.

Now I'm going to caveat this, if that's the right word.

I'm going to...

Extrapolate this?

No, this is not an extrapolation.

But anyways, there's a asterisk next to that.

I believe that planning allows me to be spontaneous.

And I actually got that from, I like to listen to books and read books.

And one I was reading was by a retired Navy Seal named Jocko Willink,

He has a line in his book that says, "Discipline equals freedom."

And I was like, well, that's kind of crazy.

But by knowing what I'm going to be doing, it allows me the freedom to make changes if I want to.

My wife makes fun of me because when we go on vacation, we'll pick out the

But I will know.

We went to Paris.

I knew every subway line.

I knew how to get from the airport.

Anything logistical for transportation, I wanted to know it.

And that way we could make decisions, and we could be spontaneous.

Yeah.

We've always thought of you as logistically savvy.

That was my nickname in high school.

Was it now?

Oh, well,

Dave relates to retirees.

The part everyone's been waiting for.

Now, what I did hear is I put three bullet points in our notes.

Didn't read them.

Oh, that's fantastic.

But they're potential ways that I can relate to year end tax planning.

Now, you care to guess which one?

I don't know where you're going to go.

I think you're going to go fall harvesting the Schmidt house.

Okay.

So here's how I can relate to you, dear retiree.

As soon as it gets to be September 21st, actually earlier than that, Starbucks

Think about in August this year.

It was August.

I've already had nine of them, by the way.

I have a competition with my dad to see who can spend more money on Starbucks pumpkin drinks.

I'm leading nine to one.

So his blood sugar is much healthier than mine.

But Trader Joe's has their pumpkin palooza.

So I plan for the end of the year by just spending ungodly amounts of money on pumpkin stuff.

You go into my house right now, I have 150 bucks worth of Trader Joe's pumpkin stuff, muffins.

I have waffles.

I got pumpkin cereal bars, pumpkin potato chips.

Just picked up pumpkin yogurt covered pretzels.

So I like to plan for the end of the year by harvesting.

You see what I did there?

I saw it.

I saw it.

All these different things of pumpkin.

I have slowly gotten Landon to appreciate the pumpkin.

Carla is kind of annoyed with the pumpkin, but that's how I plan for the end of the

And that is how Dave relates to retirees.

And Erin loves pumpkin stuff just like me.

So Josh, take it away, relate to Dave.

So year end planning is something, as I said in the beginning, that is time sensitive.

And one of the reasons you do it now is because it's going to end, it's going to go away.

And if you don't use it, you lose it.

And I think you kind of get it.

You're kind of in the same boat as retirees, but as a retiree, if they don't use that tax loss

They can't all of a sudden do it again in the future year.

If you don't get your pumpkin spiced gourd flavored meat or whatever you do, there's always next year.

And it doesn't really matter.

I mean...

Okay, I have a nickname for Landon and Carla.

They call me slumpy sometimes.

It's a mix between grumpy and sleepy.

Now, if I don't have enough pumpkin to last me through the winter, believe

So while it may not be as devastating to outsiders looking in by not having enough pumpkin

I see where you're going with it.

I'm just not buying the urgency of necessity as it comes into play there.

But it does make sense.

I guess that could probably be said about almost all of your Dave relates to retirees.

So no, I could see it.

I don't want a slumpy Dave.

And I don't want anyone to spend more money than they have to in taxes that's out there.

That's fair.

But you could always double up next year.

If you don't get the pumpkin this year, you could always double up next year.

You can't always double up with year end planning.

So I went to Trader Joe's this week again, and I came home

I'm like, oh, I got a couple things at granola.

We're running low.

And I left the receipt in the counter.

She's like, why'd you spend 35 bucks?

I'm like, oh, I got more pumpkin stuff.

She's like, David, why do you?

So I have no self-control.

How do you think Carla's going to feel that your imitation of her sounded a lot like Becks.

Oh no.

Every lady likes to be compared to her mother-in-law's voice.

Yeah.

That's just the way it is.

So, Josh, if I am correct with my dad's little surprise, can I bring the water

You can bring it, and we can talk a lot about it, but I

I mean, in college, I have to admit I did do it, but I was just shooting other college kids.

I don't know if I could bring myself to doing that here in good old downtown Elmhurst.

Well, I would just shoot it in the back against the fence or

It would be fun.

Maybe we get Thornton's over there.

Yeah, tag some people.

Oh my goodness.

Yeah.

Well, Dave, that was a fun episode.

I'm glad Erin brought up year end tax planning and not just tax planning, year end planning in general.

I'm glad you brought the word propagate.

Or no, extrapolate.

Extrapolate.

Yeah.

It's a big word.

Yeah.

I'm glad you've learned it now.

Yeah.

So glad.

There's a plethora of words you don't know yet, but we'll get there.

Wow.

All right.

Well, we'll see what I come up with for next story.

Listeners, we love you.

Thank you for listening to our show.

If you could do us the big favor of sharing this with one of your friends.

Next time you're out for a pumpkin spice latte, open up your Apple podcast app and

It is life changing.

What do you think?

I can't wait till somebody says that.

Well, people say it all the time on the streets.

You just are not listening hard enough.

Well, with that...

Yeah.

Debbie.

Yep.

Bye.

Extrapolation.