Ed Slott: Retirement Decisions and the Distribution Plan (Interview Segment)

Ed Slott joins Coach Pete in this June 2011 interview segment to discuss retirement decisions, IRA distribution planning, and the importance of an educated advisor. The conversation focuses on what happens when retirement savings must become income. Call 800-661-7383 or text PLAN to 600-700. Transcript Automatically transcribed from this episode; timestamps are approximate. 00:00 We've been joined by Ed Slott. He's a master planner in taxation. He's a CPA. And you see him on PBS and you've probably read one of his books or so. Ed, I really appreciate you taking your time out today. Well, I'm glad to be here. And I got to tell you, when you make that call, you'll get three immediate benefits. In case you're one of those people listening, say, what's in it for me? Once you make that call, number one, you'll get peace of mind. You'll get your questions answered. And it'll probably raise new questions you didn't even know to ask. And number three, the most important part, you'll get a plan started. Because if you don't create a plan, you get the government plan. And let me tell you something, you don't want the government plan. That's what most people get that do nothing or have an advisor that doesn't recognize that a plan has to be created. So folks, Ed Slott has a team of elite advisors throughout the nation. Before you 00:47 make any decision in the financial world, especially as it relates to your retirement money, money that you have an IRAs or Roth IRAs or 401ks, make sure that you get a certified plan put together that'll help you reduce unnecessary taxation, making sure that you have more peace of mind going forward. Ed, you've written a lot of books, but one I really like is Ed Slott's Retirement Decisions Guide, because a lot of people get towards retirement and they freeze up, don't they? They don't make the right decisions if they do make them, so they're afraid to make any. Ed Slott Well, the decisions are different then. When you come to retirement, you're on what I call the back nine or the second half of the game. You spend your whole life working, saving, sacrificing, accumulating, and building your retirement savings just for that one time where eventually the money's going to come out. And that's when it all hits. 01:36 That's when everything changes gears. You can almost envision a train going full steam ahead. But you ever see those movies where it has to stop and then back up? And it has to literally come to a complete stop, and then the wheels start going back the other way? And that's kind of what it is. Now you're stopped, and you're in the second half of the game where the funds come out. But because the funds are tax-deferred, like in a 401k or a 403b or an IRA, that money's going to be taxed. And that's where you need to work with a specialist. This is a specialized area of the tax law who knows how to get those monies out without destroying you with taxes. Remember, when it comes to taxes, it's what you keep that counts. Taxes will be the single biggest factor that will separate 02:24 people from their retirement savings. It's not the stock market going up and down. I mean, the stock market goes up, you make money, it goes down, you lose money. But then it comes back up, and you get it back if you lose money. But when it comes to taxes, if you make a mistake on the taxes, you'll never get that money back. You have mainly one chance to get this right. So it's a very specialized field, and you're dealing with complex tax rules on how to get that money out in the most efficient manner while taking advantage of lots of tax rules that can actually help you end up with more money than you ever had and more of it tax-free. And that's the key to planning in retirement, trying to keep more of the money you make, as you said, from your partner, Uncle Sam. And most people don't realize 03:11 that Uncle Sam, many times when you don't have an advisor that knows these specialized rules, Uncle Sam can become the senior partner. It means Uncle Sam gets more than you do. But deductions are one part, but I'm talking about the big hits. When you move retirement money, I always say a retirement account's like an eggshell. You break it, it's over. You get one chance at it. And you really have to work with an advisor that has a specialized knowledge. Now, the problem is that most advisors don't. Now, I've got to tell you, that's the only reason I'm on this program. I don't do that many radio programs for advisors, because most of them don't have the knowledge to even have a conversation. Most advisors are really just salesmen. They sell you stocks, bonds, and funds, and then you're on your own. And then when it comes out, you lose it all to taxes. 03:58 It doesn't matter how much an advisor makes you. If you lose it all to taxes, what have you done? You've built a savings account for the government. And I'm not talking about investments. I'm talking about the tax strategies, the tax planning, the exit strategy. You put the money in, you put the money in, do you have a plan to take it out? Because it's the way you take it out that will determine how much you keep and how much goes to the government. And you need an advisor that can help you create that plan. 99% of advisors, and if you're listening, that's probably your advisors, don't know how to create that plan. They don't have the knowledge. They don't invest in their education. And I hate to say it, but they're mostly salesmen. They're not keeping up with these rules. They're not specialists. It doesn't mean they're bad guys. They're just not specialists. Maybe a doctor analogy might be better 04:45 to understand this point. You have a general practitioner doctor. He's a nice guy, but he's not a specialist. He's not a neurologist. He's not a cardiologist. And sometimes you need a specialist. So the reason I'm on this program is because I've been on a mission for years now, because I've seen the horror stories, to match consumers with competent, educated advisors that have specialized knowledge in the distribution area, in that exit strategy, whatever you want to call it, the estate planning, the distribution planning for IRAs and 401ks that get that money out at the second half of the game. That's the part of the game that counts. If you don't win the second half of the game, you lose it all.