Three Buckets to Freedom: Jim Barnash on Optimizing Income and Taxes for Retirement

Hannah Mitrea 0:05
Get ready to get your questions answered by financial advisors. Learn how to put more money back in your pockets, regardless of where you’re starting your financial journey with your host, Hannah Mitrea. Welcome back, everybody to virtual US financial advisors podcast. I am super excited to have Jim Barnash here with us. Jim is the president of JA Barnash and Associates. He’s a financial planner, tax professional, and providing individuals with a solid plan to achieve financial wellbeing. Welcome to the show, Jim.

Jim Barnash 0:37
Thanks, Hannah. Nice to be with you. Yeah,

Hannah Mitrea 0:39
so I’m super excited. I know. You know, we’ve talked previously, and I really love that we have the financial piece, playing it with a tax piece of it. But to kind of share a little bit more about you how you got into financial planning and tax planning, and how it all kind of came together for you.

Jim Barnash 0:55
Sure. So I kind of stumbled into things coming out of college, my girlfriend’s sister’s boyfriend had a friend who was in the insurance business, and recruited me right out of college at DePaul University. So I started in the insurance business way back in the late 1970s. And it took me about three years, but I figured out that whole life insurance was not the answer to everybody’s financial questions. So I got involved with the financial planning program and took the Certified Financial Planner courses, set up my own financial planning practice. And over the course of time taught, the CFP courses got recruited into some large firms where I recruited, trained and developed financial planners for those firms. And then, as I went through time, and my family grew, my daughter, I decided to start giving me grandkids and I was traveling a lot. And so the grandkids did not know who Papa was. So I decided to get off the road and set up my practice again. But what I had learned through the course of my time with these larger firms was that, you know, there’s a lot of people call themselves financial planners, a lot of people saying they’re investment advisors, but really an area that was a gap where people were just going to their accountants or CPAs, to get their tax work done. And oftentimes, there was a gap then between tax work, and the rest of their financial plan. So when I came back out and started up my new practice, again, back in 2016, I incorporated tax cuts into that practice. And so my wife and I bought a franchise a tax franchise, and not so much to do the tax preparation, although it does certainly help us to get in front of people. Tax planning. So what if I were asking people, Hey, I could use a financial plan? What about you? Oh, no, they would say my accountant does that my insurance agent does that the app on my phone does that. But if I asked him about tax planning, everybody was interested. And so that’s just one part of a financial plan. But it really, really led into the ability to talk to people and connect all those elements for them through a side door, if you will. So that’s what we’ve been doing for the last seven years. And it’s been a nice way to get in front of people and it provides. So a little bit of leverage that I that they can’t get from a lot of other financial planners.

Hannah Mitrea 3:25
Yeah, I think everything that’s really cool that you’ve got a franchise and the tax side of it, to really understand that even more. And I think so many people probably say, Yeah, I have a CPA, they do my taxes, too. But they’re not tax planners. I think there’s a difference between a CPA that just does your taxes and a tax preparation, versus a tax planner. And so I really liked that, you’re there kind of helping them through that process to understand, hey, let’s plan this for your year to, you know, minimize this, you’re only paying what’s really necessary, since there are so many like, I can only imagine how big the book on like tax law is and how many books there are. And so to have somebody like you, that’s an expert in that I think is super valuable for anyone that is, you know, wanting to kind of save for their retirement to just be able to spend their money more efficiently. That’s, I think that’s really awesome that you do that. And then also congratulations on the grandkids. I’m glad you’re back home.

Jim Barnash 4:29
Thank you. Thank you, Hannah. You know, a lot of the feedback that we get when we pick up obviously people have had their taxes done for years and might have been from a friend or relative or a CPA. And what they tell us is that what they’re getting from us that they didn’t get before, was the advice piece, right? So it’s one thing to do the taxes and say you get a refund or you owe but it’s another thing to have somebody come and say here let me show you some ways where you can reduce your current taxation. And better yet to introduce that concept of tax planning, which is, you know, tax preparation is historical, right? It’s already happened. Tax Planning is Futuristic, right? So we’re talking about how do you change the future? What are the things that you can do? If I can animate share some slides with you?

Hannah Mitrea 5:21
Yeah, definitely please do.

Jim Barnash 5:24
So this first slide that we have here, just a little saying that I like to use because everybody could handle their taxes like a Bill Gates, or Elon Musk, or just about any, any person of great wealth. The difference is that if you don’t know that what exists in the tax code, that’s hard to take advantage of it. So this is a picture of Virginia and Washington, DC over the Potomac. And there are two bridges there. And the big bridge is a toll bridge. And that’s what most people use, because a lot of people don’t know that a couple of miles down the river, there’s just a regular bridge that goes over. And you don’t have to pay a toll. It’s a little bit further maybe to get into downtown DC. But if you know it’s there, you can save on the tolls going across. So the quote that I love is, you know, for my tax evasion, I should be punished. But for my tax avoidance, I should be commended. What we really like to do with people is help them to understand where there are opportunities for them to control the tax letter. So we believe that tax planning is part of the comprehensive financial planning. And so when you’re making decisions in any area impacts all these other components. So whether it’s your protection, your accumulation, your transition, distribution, transfer, all of those things tie together, and taxes allow you then to you know, the old saying is, it’s not what you make the what you keep. And so what we’re trying to do is help people understand how that they can keep more of what they’ve got, and put them in control of the tax levers, right, so, so our tax planning really begins with that. And then something you and I have talked about is it’s a simple concept, it’s pretty easy. Everybody had a bucket that they’ve used a washer, car or washing window, or maybe play a kid’s game like Bozo buckets or something. So to understand buckets, is something I use, because there’s three categories of income that you’ve got. So you’ve got taxable income, which is non qualified, those are things like dividends and capital gains and rents and royalties and your paycheck. So the taxes get paid on those put on the gains portion. There are lower taxes that get paid on things like long term capital gains and things of that nature, then the middle bucket is what almost everybody uses. And I believe they aren’t educated enough to know that they’re overusing it. That’s the tax deferred component. So that bucket is really your your 401 K or your 403 B pension money, it’s IRAs, it’s all that deferred money. So it’s great when you’re young and you’re raising a family, you get to take home or keep more money out of your paycheck and save at the same time. But when that money ends up in your you’re the only money you have in your in your wallet at retirement, you’re paying taxes on those heads, just like if it was a paycheck. And then when you get to RMD age, which is now 73, the IRS gives us a formula and it tells you how much money you’ve got to take whether you need it or not. And that can bump you into higher tax brackets, you can mess with your Medicare premiums, it can pull your social security into being more taxable than it might have already been. So it really turns into a double edged sword and the later years. And then third bucket more prevalent these days since the Congress introduced the Roth IRA. So that’s tax free money. And it’s not only Roth money, it could be certain municipal bonds, depending on the state that you’re in. They can be duly tax free, but it’s the cash value of life insurance as well. So it can be used to create a tax free a quasi tax free income. So ideally, if I can get the people early enough, I help them to create these three buckets, the system that allows them that freedom, a lot of people I talked to retired 62. Well, they’re not eligible for Medicare till 65. So they’ve got to go to the marketplace and buy health insurance. And that’s all based on how much money you make. Because if you make a lot of money, you get no subsidy and the premiums are pretty high. But if you don’t have a lot of income, you get a subsidy from the government. And so a lot of people we know are paying 10 $15 a month and they were quite well to do that. but they don’t show any income on their taxes because they’re using Roth money. They’re using non qualified money. So they’re good puts them in a great place. So it’s as a planning tool. These three buckets, I believe, are essential for people to be able to drive home, if you will, the best results that they can get.

Hannah Mitrea 10:20
Yeah, I know Ross is a big thing. So coming into like the tax free income, and how does somebody like get started with like, understanding? Is it really just coming to somebody that does tax planning? Or is there something they can be doing kind of like right now to kind of started looking at how do I move these money in these places?

Jim Barnash 10:40
So the number of answers to that question, many companies now have begun to offer an option of Roth 401 K contributions. So that’s a great way. And if you’ve got a really good company in process, they’ll even allow you to split put some of your money into the traditional side, some of your money into the Roth side, if you’ve been around for a while, I’m working right now with a couple where he’s more towards the end of his career. So we’re putting all of his contributions into the Roth side, to help him catch up and fill that bucket a little bit more. So that’s a great, easy way to start. If you have been, you’re a little bit older. And let’s say you’ve changed jobs a couple of times, and you got a rollover IRA or two, or you’ve been contributing to an IRA, then you can do Roth conversions, or Roth conversions. Now, you’re gonna pay more taxes today than you would have to if you didn’t do these, but currently, we’re under the tax code changes that happened in 2018. So the brackets themselves were changed the tax brackets, the marginal brackets, as well as the income levels in those brackets were increased significantly. So it’s a great time to be able to do those conversions at lower tax rates than were prior. And may be since those those tax code changes expire, unless something is done by Congress, December 31, of 2025. So Roth conversions are a big tool, alright, so you pay extra taxes today. But when you start getting RMDs, they’re lower. So you save taxes, they’re higher tax rates, probably in the future, you’ll save tax there. And the growth, the tax free growth of that Roth money certainly allows those in my calculations, eight to 12 years, can be a breakeven point there. And it’s certainly well worthwhile than in the future. That can also be a greatest thing, estate planning tool, passing money on to the next generation tax free for a period of about 10 years. But you can also do just like you can IRA contributions, if you don’t have qualified plan, you can do Roth contributions to so $6,500 a year, if you’re old enough, you can do the $1,000 catch up. So several ways to be able to do the Roth.

Hannah Mitrea 13:01
Right. Two questions, one of them start with one. As I know, I always get into two question mode. You mentioned with a Roth IRA, or no, you can have a Roth 401 K in the regular 401k. Some companies are introducing, and you can split it and I know with a Roth, you can only think it’s 6500 a year, they can put into it

Jim Barnash 13:23
kind of direct contribution basis. But if you do it through your work plan, it’s the same contribution limits as the traditional 401k. So I believe this year is maybe at best with a catch up, but it’s about $30,000.

Hannah Mitrea 13:38
Okay, is there any reason you wouldn’t want to put it all just in the Ross? Or okay, like, as you mentioned, splitting it, so why split it.

Jim Barnash 13:47
So it really comes down to where your personal situation is at. So if you put it all to the Roth, your taxes that are coming out of your paycheck, are going to be significantly higher than when you were doing through the traditional 401 K. So it could be a tax decision right now. I’ve got three little kids, we’ve got daycare issues, I need that money at home. So there is no right or wrong answer there. The answer is what do this fits your situation, somebody else who doesn’t have any kids, it little downside to doing all Roth because as we know, as we look at the debt that our country has, and we we see the aging of the population, it’s pretty clear that taxes are going to go have to go up in the future. And so I ain’t lower taxes now putting aside money that will be tax free. That I can use tax free and I can use the growth from that after five years I can use that tax free as well. Gives me a lot of flexibility. Anytime I need to take money as to do I want to if I’m taking money out of a Ira 401k I’m taking the money that I want plus maybe 1820 20 to 25% On top of that to pay the taxes. Okay,

Hannah Mitrea 15:13
so yeah, so you’re paying just more money when it goes in Roth, because you’re paying for the taxes now, versus putting in 401k. It kind of it’s money that’s untaxed now, but tax when you pull it out as an income, and then are you seeing companies matching a Roth 401 K, like they do traditional,

Jim Barnash 15:35
the current law technically says that they cannot match the Roth, that their contribution, now you could put all your money to the Roth, their contribution is going to go in on a traditional basis. A for the company, it’s a tax write off, they don’t want to give that up, right. So if they’re giving you money in the Roth, they don’t get a write off, they’re paying taxes on it, too. So they want to continue to contribute to the traditional side. And that’s okay. I mean, it’s, I’m a big believer, Hannah into building flexibility into all strategies, you don’t want to put all your money in one investment, you want to put all your your plans into one strategy. So having the three buckets is a good thing. Alright, so saving some taxes now isn’t a bad thing. But you don’t don’t want to do it to the detriment of your future. And that’s why even keeping some money, maybe not even doing the wrong side, but starting a a brokerage account. Alright, so you’ve saved some money in the bank, you get the money, market CDs, things of that nature, the ability, your emergency opportunity fund out of that, but getting a brokerage account where you can have some investments, that, you know, maybe you buy some stocks, you hold them for a long time, if you need some money, you sell those, and you pay taxes on the capital gains, or maybe they don’t do so well, and you sell them and you can use the loss against your taxes. So those three buckets really are all important to have just having any two of the three doesn’t work as well as having all three.

Hannah Mitrea 17:11
So it makes sense that the companies are still like, you know, want to do the traditional route that doesn’t like they would have to pay taxes on that. So are they matching into the traditional for them? Yes.

Jim Barnash 17:25
So even if I do 100% of my contributions to the Roth, I will still have a traditional account that will receive the match from the company.

Hannah Mitrea 17:34
Okay, that’s, I think that’s really a neat thing that’s happening. It’s creating to those buckets for you. Right there. Yes, with one coming from your company and one from you. And so and then my other question was from earlier, you mentioned, you have a client that is, you know, kind of looking at this, like, how do I catch up? So that comes down to time, like, when is it kind of like, Hey, you’re kind of pushing the limit on making sure you have a good retirement. If you’re not planning already, at this point,

Jim Barnash 18:04
the window has widened in recent time, because as the required minimum distributions have moved back from 17 and a half, to 72. To now 73, until you start getting to have to take your RMDs you still have time, right? You still have a window of time to do that those the Roth conversions are large sums. So there’s, there’s no limitation on how much you can convert, like there is and how much you can contribute. So he put you you should pay the taxes on those conversions out of bucket number one, right, the non qualified money or savings account, your your brokerage account, because that that gives you the most efficiency in regards to that tax strategy. So ideally, it’s catching people early in their career. So I have clients that are young couples. And that’s what we’ve started out now. They’re making a lot of money right now. So we are doing the, our traditional part Roth components for them so that they’re filling their three buckets, as we speak, right? So they have brokerage accounts as well. So they’re going to be in great shape. When I catch people in their late 50s, early 60s, the window is shorter, the decisions, I have a little bit more impact to them. So if I’m going to convert $25,000 a year for the next eight years $200,000 into a Roth, I’ll be paying taxes on that additional money. And if I’m still working, it’s a potential challenge on the tax side. So when we’re doing the planning part, so there are marginal tax brackets which are set by the IRS, right, so everybody starts out paying 10% On their first 10 $12,000. Then the brackets increase gradually, and you’re paying your marginal bracket brackets out Are the dollars the amount of tax that you’re paying on the last dollars that you earn? Right? Then you what you’ve got is really the the attacks that you’re you’re paying is your effective rate, the effective rate is okay, how much did I really pay? So let’s say you ended up in a 22% tax bracket, but because of your deductions and things of that nature, you’re paying 18%. So 18 cents on every, every dollar versus 22 cents, when we’re doing planning, what we want to do is we start with that marginal bracket, and we want to keep you in the marginal bracket, right? We don’t want to have your bracket jump, because now we’re compounding the tax issue that you wouldn’t have had. So you stretch it out over a period of time, and you do the best you can, I mean, ideally, in my world, if I give everybody have a third of their income, or their their assets, and each one of those buckets, they’re in complete control, but it’s not not always doable. So we do the best we can, this couple of working with now it’s they have 79% of their money in their their middle bucket, the the tax deferred bucket. So the best we’re going to try to do is be able to knock that down to maybe 60, maybe 57%, increase the the the tax free, and they in the brokerage account money to give them some leverage there, but we won’t be perfect,

Hannah Mitrea 21:25
because with it all being in that tax deferred bucket. That means whenever they do retire, they’re still having to pay taxes on all the income that’s coming to them,

Jim Barnash 21:35
correct. And it’s it’s their attacks at different rates. So when you’re pulling Roth money, there is no tax, it’s a way to tap into cash value life insurance, to marine out your cash value, loans are not taxable catches, you have to make sure that policy lasts as long as you do that the day you die, that policy has to be in place, so wipes out the loans, otherwise, it becomes fully taxable. So little tricks and and things of that nature, that are in these in these strategies.

Hannah Mitrea 22:08
And then I know we’re talking about broker. And so kind of explain what does that look like? How do they get one of those set up? Just so anybody who’s listening and kind of really understand how would they set up a broker account for themselves. So number

Jim Barnash 22:21
of ways to do it. So there are a number of online brokerage firms that they can set up their own account and make. They can pick stocks, mutual funds, exchange traded funds, funds, pretty much just about anything. And so they can do that themselves through an online account, they can use a Charles Schwab to do that at Fidelity, Vanguard, all those companies have the ability to set up your own brokerage firm, they can go through their financial planner, if they have a planner to do that. Now, obviously, I’m a little prejudiced, because I think when we go back to that earlier slide, when we talked about planning being comprehensive, a lot of times when I’m interviewing a prospective new client, and what I see is between their 401k, their IRAs, and their outside brokerage money, they own all the same stuff. That’s not diversification. Alright, so they’re not helping themselves. And that is, it’s the fact that they’re not professionals. Right? So they’re, they’re not taking into fact that if I buy these actively managed funds, what are the things that the managers are buying and a lot of money managers, basically buy the s&p 500, right, and, and then they add it in a few things, or they increase the holdings on a certain couple of the stocks that are in there. But they have an index fund. So it is really knowing that you have, you can have seven or eight 910 different accounts, that’s great, but they should be managed as one portfolio. So you’re killing the excess overlap, you’re killing the redundancies, you’re not paying for lack of diversification or active management that’s really not active management, things of that nature. So you know, of course, being a planner, I’ve leaned towards getting somebody in your corner that can help you the extra return that they should get you and the reduction in taxes that they should be able to get you should be well worth their fee and more.

Hannah Mitrea 24:34
Yeah, so one thing I was like kind of coming up and you know, I think having a financial planner, someone that is in your corner, really helping you specifically because each one of us are so unique as human beings that we need those different directions because we all have different expenses, some have children, some don’t have children, some have plans to travel. But growing up I I feel like you know, we were told have 401k you can retire? Well, it’s not true. I think a lot can be true. But it’s not like, it’s not the end all be all, you need a little bit more planning involved in it, because like you said, We’re all just making the same thing to keep going well, but our world shifts so quickly. Like, you know, the Internet was barely taking off probably one 401k started existing. So how do you help somebody shift out of that mindset of hire a financial planner, to get beyond just the 401k mindset of that’ll be good enough for retirement, because with the cost of living increasing, so much, and might not be enough. And you know, you want to live a life that’s enjoyable, when you’re tired, not a life of scarcity, your whole life.

Jim Barnash 25:48
Those are very wise words, Hannah. And that’s the hardest piece to get across the people because they they do through reading, and listening to the pundits and the experts, they become hardened into these beliefs that you don’t need professional advice, you don’t need somebody to show you how to do it, it’s easy. You know, just buy a bunch of snacks, and it’ll be great, or plug all your money into your 401k. And you’ll be great. You know, and then they quit a job. And they’re between jobs. And so they don’t leave the money in the 401k. They don’t go with an IRA, they take it out, they pay the taxes, they pay the penalty, and then they’re starting over again. So the old analogy and a 401k is it’s like a snowball going down the hill, right? So it starts out real small. And as it rolls, it gathers snow and every time again, there’s no the next go round, that amount of snow on that increases exponentially, right. But then when you have taxes, it’s like also, there’s a rock in the path that you didn’t see, and it takes a big chunk out of that snowball. And then you got to replace that chunk over the course of time. And what isn’t preached a lot is the fact about having a diversified portfolio. You know, a lot of people take these target date funds, they were created for a reason to get people in, so they didn’t have to worry about making decisions. The challenge is that they’re there like an index fund that is controlled by your age, and not much else. So they reduce the volatility by selling out the stocks or equity portion, and adding bonds. Well, up until last year, bonds had the worst 15 plus years of their their lives, right? They were worthless, pretty much interest rates and sunken to as low as they could get. And you’d made no money on bonds. And so these target date funds were loading up on stuff that was was pretty much you better putting money under your mattress in your bed. So how are they supposed to know that? All right, and the owners of the companies who run the 401k case, so the company gives them 700 funds to choose from, at their job, they have no idea what’s a good fit. So they’re picking off of star rated funds or ones that get a lot of pluses or whatnot, doesn’t mean that they’re good doesn’t mean that they’re different from the other funds. So the role of professional advice in our financial system is sadly lacking the confidence and and respect that it should get. Yeah, there’s a lot of people in the business that are there just for the money. But there’s a lot of folks, like myself have been around for 40 years, and we’ve done it the right way. Alright, so my main goal and working with people is I want to give you as as you alluded to Anna, peace of mind when you retire, have fun with your grandkids, enjoy the things that you were planning on doing. Don’t be worried about oh my god, oh my god, the markets down what am I going to do? The professional planner, a professional advisor can give you the guidance to set up your portfolio. So that three, four or five years you don’t have any volatility, right, that’s your paycheck for retirement. And then then you’ve got money that’s tied up in the let’s just meet the markets. Alright, so we don’t have to beat him. We can choose index funds are very inexpensive, and we just want to match what they do. And then the third bucket is your longevity bucket. That’s where you want to grow your money so that you’re beating inflation. If you live to be 130 Congratulation, but you still got money, but that takes some expertise. Very hard to set it up on your own. No matter what articles you’re reading what app you got. There are always pieces that you’re not getting to the tax pieces. I want to leave money to my kids. How do I gift money to my kids, you know, all these little extra components that are in there that don’t get talked about in the App Center or the articles that you’re reading. It takes somebody who’s got the experience and the knowledge and is willing to help you share that. And again, let’s put it together as one, not little fragments.

Hannah Mitrea 30:19
Yeah. And I think that’s like really well said, just there’s things that we need help with, you know, there’s in any industry, like I do marketing, and the majority of business owners probably need to hire marketer, there’s a small percentage that can really do it on their own finance, the majority of us need to hire a financial planner of some sort, there is going to be a small portion of us a yes, are going to get super dedicated and figure it out. And I think that’s really what we need to look at is kind of the majority of us aren’t going to be tax planning, or financial planners, because there’s so much to learn. And there’s so many ways, and I feel like there’s so many new strategies constantly coming out, like you mentioned, you know, there was the tax code in 2018, that was just changed, and it’s going to expire and 2025. How would a normal person just know that we wouldn’t, because that’s not our expertise. And so I think anyone that’s listening, if you don’t have a tax planner, reach out to Jim, to kind of figure out, what is that next step? And if that makes sense for you, I think, you know, everything you’ve talked about today, has really made sense and kind of like, opened up my eyes and like me, and my wheels turn of how we’re even looking at finances, and how you know, us as a country really should start looking at it more, and not just counting on what we’ve learned from the past. And

Jim Barnash 31:44
no, you’re so sure, absolutely spot on with that. So everybody has their own skill sets, things that they’re good at things that they like, so your marketing, that’s a whole different animal for, you know, people in my business all the time, are hurting marketers left and right, because what we know to do is great financial planning, we don’t know how to get in front of people to tell our story, right? So we need somebody that can do that. People that are actors, that’s a skill set unto itself. So they have the ability to get on stage and, and perform and show themselves in different as different characters and all in a very believable, I can’t do that. And I can you

Hannah Mitrea 32:24
imagine us on stage being asked, don’t

Jim Barnash 32:27
be afraid of going to a financial planner. There’s plenty of things to research. So you can find out about people. Obviously, there’s a trust component, because it’s your money. And so maybe you want a big firm, some people like that, because they think there’s protection. But you know, we’ve had a number of large, especially the bank firms that have gotten into trouble because there’s a greed element, even even on that side. So maybe you want a small firm, or somebody bigger than me or just a guy like me, who I work for me and I work for you. Right? So that’s a, it’s a very small relationship. There’s only the two involved, but it is just about saying it’s okay to ask for help. And different planners work in different ways. Some don’t manage money, some don’t handle insurance, some don’t do taxes, but they’ll do a simple retainer based financial plan for you. So let’s have that get done for you.

Hannah Mitrea 33:22
Anything one thing to know, like, you know, to work with you, Jim, you are you? You’re not some huge firm with, you know, 30 Associates under you? How are you still certified, and you still have the accreditations, and you have to go through very similar compliance that some of these big firms go through. And so I want to make sure everyone listening isn’t like, oh, I want to go to a person or firm. No, you still are firm, you still have all those accreditations the big people have, because you’re being able to be more personalized with each individual because you’re not managing 30 Associates and things like that.

Jim Barnash 33:58
And I’m not trying to handle 100,000 people, right? So, you know, it’s simple for me, I’ve been around a long time had a lot of nice opportunity and success. I’m at a stage where I work with people that I want to work with, right? So if I liked them, they liked me. And we can agree to you know, how we’re going to do this, then it’s great, we’ll have a lot of fun doing it, we’ll get to know each other. It won’t seem like anything other than two friends having a conversation and one knows a little bit more about something than the other. They all will get to know each other’s families and, and likes and dislikes and all kinds of fun things to do. But you know, there are still people that feel better being a small fish in a big pond and that’s, that’s okay, too. There’s nothing. There’s nothing wrong with any of these. They’re all good for somebody, you know, Kodak at one time. Obviously, it’s no longer that way anymore, but they had three hundreds 400 different types of film. I use their 400 speed because it was idiot proof right? Yep. Put it in the camera and it did everything pretty much for you. My daughter, she was black and white film, she has 100 speeches 1000 speed, she was a camera buff. She knew how to use those films and what value came out of them. They’re both right. Right? They one was right for me one was right for her. So same way here, it is fine, who you’re you can provide what you’re looking for, and just pay him a fair wage. Right? It’s right. They’re working hard, like, everybody wants to get paid for what they do. And I think they’re really the cost of the advice, business for finances is is come way, way down. And it’s very, very realistic these days, and well worth it.

Hannah Mitrea 35:40
And as we wrap up here, tell us, Jim, who’s that person? You know, that reached out to you? What does that look like? And what is the process to get connected to you.

Jim Barnash 35:50
So I’m gonna go back for a second to share the tax planning basics that I talked about, and the types of things that we need to do that for people, you know, so we’re just gonna go over the tax basics for them, planning ages, there are certain ages where things change in the tax bracket, so I can, I can pull from a pension at age 55, without a penalty, in certain circumstances, they’re 59 and a half I can take from a retirement account without a penalty. You know, your marginal brackets I touched on a little bit earlier, Social Security and the compounding effects on that when you’re you’re taking that while you’re still working. There’s tax issues, holding it too early. There’s losses and income RMD tax bracket creep, various asset classes getting taxed. And always we talked to couples, it’s a big hit, when you’re married, filing jointly, and all sudden, you’re you’re you’re losing a spouse, and you’re filing single, you’re basically your deductions cut in half and therefore your taxes, double. So

these are the type of things that we look to gather from people. I was gonna

Hannah Mitrea 36:58
make sure were you sharing your screen with us because we’re not seeing it yet. Oh,

Jim Barnash 37:02
I’m sorry. That’s okay. I want to make sure is it up there now?

Hannah Mitrea 37:06
And now I see it there. Yeah. Okay.

Jim Barnash 37:08
I apologize. That’s okay. So yeah, again, here are the things that will will take people through on those those basics. And we talk about the future, we get you prepared for what happens when my spouse dies, one of us is going to go up first. And then there are some big tax implications. And we want to, we want to make sure people have no surprises. Yeah. And then you want to get in touch with me. Here’s the easiest kind of ways to do it. My website is up there as well www.jabarnashassociates.com gives you a little bit of information on help, and other planners that are out there to want to figure out how do I have this tax piece. One of the things we added recently, we didn’t talk much about here is there’s a new firm out there encore estate plans, that allows a financial planner like me, to actually help my clients get their wills and trusts done. I’m not a lawyer, I don’t practice law. I don’t write the documents, they do that. But it’s amazing the number of my clients that wouldn’t go even based on my advice, I would give them names of attorneys, they wouldn’t go to get their estate plans done. They just didn’t want to go to an attorney and thought they charge too much. So now we’re helping people get their estate plans done too. So there’s a lot of ways that we can help people because of who we are and what we do. And so if there’s planners advisors out there who want to learn more about how I’ve set this up there, feel free to reach out.

Hannah Mitrea 38:33
I ask them and anybody that’s listening on the podcast, I will make sure to have a Jim’s email, website and phone number all in the show notes. So you can reach out to him there as well. And thank you so much, Jim for sharing all this information and really helping more people understand the planning side of it, the tax planning side of it and how they go together. So well. Interest really figuring out you know which buckets you’re putting your money in right now and how to really diversify that. Well. I

Jim Barnash 39:01
appreciate the opportunity, Hannah. It’s very nice of you to provide this chance to enlighten people.

Hannah Mitrea 39:09
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