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Episode #621 - Year-End Planning: Annual Gifting Rules

Roger: Welcome to the show dedicated to helping you not just survive retirement, but to have the confidence to lean in and rock it, create that great life. My name is Roger Whitney. I'm a practicing retirement planner with 30 years experience walking life with clients into and through retirement. Holy cow, 30 years. That makes me feel old. I'm 58 years old. All the young planners on my team tell me. I am the founder of Agile Retirement Management, a retirement planning firm and we're actually soon to be co-founders of Retire Agile, the joint firm with Tanya Nichols and I. We merged our firms earlier this year. Just came back from Duluth, Minnesota to visit her. So I do this for a living. And so a lot of what we talk about here is practical things that you can do to create a plan so you can have confidence, so you can have a great life, which is the whole point of the exercise. Today on the show, we're going to talk about annual gifting limits in our year end planning theme of the month. In addition, we're going to answer a number of your questions before we get started, though, this podcast is just the beginning. Be sure to sign up for our weekly email the Noodle, which we send every Saturday morning, where we dig deeper with coaching, insights, and curated resources. And it's a direct line. You hit reply that comes right to my inbox. So you can ask a question, you can give feedback, you can send me photos of your dog, which would make me smile. It would just be amazing. What a great Saturday morning. You can sign up for that at thenoodle.me. All right, with that said, let's get this party started and get to the retirement toolkit.

RETIREMENT TOOLKIT: THE 2025 ANNUAL GIFT EXCLUSION

Roger: Today in the retirement toolkit, as we're focusing on year end planning, I want to talk about the annual gift exclusion and other ways that you could give money to other people. It's so much fun to give money to people. So what is the annual gift exclusion and why do we have to have a gift exclusion in the first place? Well, the gift exclusion, which in 2025 is $19,000, is the amount that you can give to any other person without reporting or having to apply it to your lifetime gift and estate tax exemption. What? What does that mean? So here's the deal. The IRS says that you can give up to $19,000 a year. That's the 2025 number to anybody. And give $19,000 to your postman, to your milkman, to the person at Walmart, to your children, anybody. You want as many people as you want up to $19,000. And you, you don't have to tell anybody. You don't have to tell anybody. But if you give over $19,000 to an individual, now that has to be reported to the IRS using Form 709. Because now that you're over $19,000, anything you give over $19,000 is going to be applied to what's called your lifetime gift exclusion. The IRS says you can get. You have this huge lifetime exclusion, and you can give more than $19,000 to any person, but any dollar you give more is going to apply against this number. And the Exclusion as of 2025 is $13,990,000. So it's likely that you're not going to give over that. But if you give over the 19,000, you have to file this form 709. Even if you do, there's no tax involved. They just want to keep track of it. Because if you go over this almost $14 million, now we have some tax problems, maybe. So that's what this $19,000 annual exclusion comes from. Doesn't mean you can't give more.

ROGER DISCUSSES GIVING MONEY DURING YOUR LIFETIME AND SHARES THE REASONS WHY IT CAN BE BENEFICIAL.

Roger: All right, now that we know what it is, you can give 19 grand to any person you want. Why would you do this? Well, one reason would be you already have a plan that's feasible and resilient, and you realize you likely have more than enough resources, and this money is going to go to your heirs at some point in the future when you die and will continue to grow. So by giving money today, it moves the money out of your estate into somebody else's, so it can slow down the growth of your assets and perhaps avoid tax issues later on, depending on how tax laws change. So just getting the money out of the estate is reason number one.

Reason number two is that you get to see the impact of. During your lifetime, you're able to share experiences or create experiences with experiences for others or people that you love. So here's a practical example. Next year with the Rock Retirement Club, Shauna and I, in addition to maybe 40 or 50 other club members, are going on a cruise down the Danube River. It's a Christmas market cruise. December of 2026. Long time away. Right. And so we're going to do this cruise in Germany. Starts in Germany, ends in Budapest. Awesome experience. And we're going to have lots of club members. Well, my kids are in their late 20s. They don't have the money to do something like that. They're busy, and they're trying to start their career. So we're using part of our exclusion amount to pay for them. To come on this cruise so that we can create shared memories of something sort of special, sort of unique and an experience they've never had before. And by doing it now we get to share this with them. in order to create memories, which is the ultimate currency of rocking retirement, having great memories and experiences. So that's an example. Now they could easily use this money to do a cruise after we pass and they get some portion of it. But we won't be there. That's not going to create any experience with them. And it also allows us to have teaching lessons with them around gifting, etc. So that's reason number two.

Now reason number three is the utility of gifts to the receiver. So when you give money to somebody that money has a utility, a usefulness. Well, I want to stick with my example that people in their life have more need for money than other times in their life. Look at Sean and I were blessed to be at a place in our life where we've built up financial resources, we feel relatively stable. If we want to go on a cruise or if we had something break, we would have the resources to pay for that. Very lucky and blessed to have that. My children continue with that example who are 28 and 29. They don't. If their car breaks, they're going to have to figure out where they're going to get the money to fix their car. They're going to either have a little bit of savings or they're going to have to go to their credit card or finance it in some way. So money to them right now has a lot more utility than it does than when they're older. And if this money in this example goes to them ultimately. So I'm 58, let's assume I live to age 90. Right. So what is that? That's 32 more years. So in 32 more years and ah, I live to 90, assume Shauna predeceases me, this money is going to go to my children. Well, in 32 more years my 29 year old son is going to be 61. If I wait to give him money until I die and he's 61, it's most likely the usefulness of that money is going to be a lot less than the usefulness of the money right now because he doesn't have a lot of money because he's starting his career just like my daughter and they're just starting out and they have, you know, Emma just got married. They're trying to figure out how they're going to buy a home, they have cars and things like that, and those things break and need, you know, need repairs, etc. You know, maybe at some point they're going to have a baby. Money is a short commodity right now as they're trying to build their career. So utility, it's more important to them right now. So that's the idea of this. We don't want to just give it to them at the end of life because they may not need it. Then it's not as impactful. Whereas now I can take them on a cruise, I can help them pay for their wedding, all those types of things. So these are reasons why you might do this. So let's walk through an example. Let's take Sally. Sally gives her friend Mary $19,000 to help Mary with home repairs. what a great friend. No tax filing. No tax whatsoever. Now, if Sally were to give Mary $27,000, not $19,000, 19,000 would be exempt because of this exclusion. And then the additional $8,000 would reduce Sally's lifetime exemption. And then Sally would have to file this form 709. But there she's not going to have to pay tax at all. So there's an example of how this works.

Now, let's go through another example. Let's assume Sally and Bob are married and they have two children. Their children are Mark and Ethel, right? So Sally can give each child $19,000, right? Because that's her exclusion. She can do that to as many people as she wants. But because she is married, Bob can give $19,000 to each of the two children as well, because they both have their own annual exclusion. So both Sally and Bob in this instance could give each child $38,000. 19 from Sally, 19 from Bob. So that way they could transfer $38,000 without having to report it on a, 709 or anything like that, because they're each using their annual exclusion. Now, if their children are married. So in this case, if Mark and Ethel are married and they have a spouse, then Sally could give $19,000 to each of the kids. So could Bob. That's that, $38,000. And then Sally could give $19,000 to Mark's wife, so could Bob. And Bob could give $19,000 to Ethel, Ethel's husband, so could Sally. So now we're going from $38,000 per couple as a gift with no strings attached, no reporting, to $76,000 to each couple. And in this example, by doing this, Sally and Bob moved $152,000 out of their estate. By being able to give money to these couples, then you can do this each year. So it's December 2025. So in theory, Sally and Bob could do this in December and then in January take care of the 2026 exclusion. So you're able to give individually $19,000 and you can do this coupling thing. So this is a very powerful way of one, getting money out of your state, two, of helping have shared experiences, and three, by giving money when it's most useful to the people that you're giving it to.

ROGER SHARES HIS OBSERVATIONS ON GIVING MONEY, NOTING THAT GIFTS CAN FEEL MOST MEANINGFUL WHEN ATTACHED TO A SPECIFIC PURPOSE RATHER THAN GIVEN WITH EXPECTATIONS.

Roger: All right, before we move on to some other strategies, a note on giving money because we have a lot of clients that do this and I've seen it be very fulfilling and I've seen it be very empty. And I think I've talked about this on the show before. I know many couples that give the annual exclusion to their kids and to their grandkids because it's a good, just like, repetition of moving money to the younger generation in a systematic way. Where I have not seen it be very fulfilling is when we have expectations of what they're going to do with the money. And they sometimes don't necessarily appreciate it or is as intentional about money as we are. And so the money sits in the savings account or what have you. And that gets frustrating because we felt like we've always been really intentional about money. And if they're not intentional or not intentional in the same way as we are, that's a little. That can be a little annoying. That is our perception of it. You know, we should trust that they are going to be good stewards of their ship and they're going to make lots of mistakes, likely just like we did, that we may forget those mistakes, but that can taint it a little bit. Where I have seen this not be such a factor is with individuals that look for opportunities throughout the year to step in and be useful in the moment. Oh, our child just had their air conditioning unit blow up and it is going to cost $15,000 for them to replace it and they don't know where they're going to get the money. Gifting the money to fix the air conditioning, Attaching the gift to something concrete in order to ease the way for the person receiving the monies, whether it's a child or a friend or a random person, or gifting money and helping them fund their Roth IRA so that money can compound tax free overtime because they wouldn't have the means to contribute to their Roth IRA without it. The more I think you can attach a gift to a specific purpose, the more meaningful it seems. Just general observation from my experience.

STRATEGIES FOR IMPACTFUL GIFTING ARE EXPLORED, INCLUDING TRANSFERRING APPRECIATED ASSETS, PAYING MEDICAL EXPENSES, AND COVERING TUITION DIRECTLY, SHOWING WAYS TO HELP OTHERS WHILE MAXIMIZING MEANING AND EFFICIENCY.

Roger: All right. Other strategies related to gifting that we want to hit on, number one is let's assume you're going to give $19,000 to your child. You can give them cash, but if in an after tax account, you have an investment that is highly appreciated, you have a lot of unrealized capital gains that when you sell it, you might have to pay tax on those gains. One thing you can do is rather than give them $19,000, you can transfer $19,000 of a highly appreciated asset like a stock or a mutual fund that went up, and that way you remove that tax liability from your state. And then what happens is your child or whomever receives the money, they take on the cost basis that you had. So when they ultimately sell it, it will be a taxable gain for them. And that can work out really well if they're in a much lower tax bracket than you are. So that's one strategy.

Now, two other ways that we can give to people in an impactful way that are separate from this annual exclusion of $19,000 per year is one, medical expenses. You can pay unlimited anybody's medical expenses if it's paid directly to the provider, like directly to the doctor or to the insurance company. So if you have a buddy that's getting a heart transplant that costs $250,000, which is probably way low, you could pay for the heart transplant, you could pay $250,000 and not have to tell anybody or report it on your tax return at all. As long as the money is going directly to the doctor or the provider or to the insurance company. What you can't do is have it go to your friend and then they pay the bill. You can't do that. So you can do that for medical bills. We have one client who told us of one thing she has. She has a little bucket of, I think she called it her blessing fund. She has an amount earmarked every year just to do random blessings. And she talked about once being in a, in a waiting room at a doctor and just overhearing someone at the counter working through the billing process. And it was very clear that this was really going to stress them out or they didn't have the money to pay the bill. And so she arranged to pay the bill for this person. I don't know if it was anonymous or not, but, but totally no tax advantage whatsoever. But it was just a way of blessing somebody by helping them when they were in need.

The second thing you can do that's very similar to the medical expenses is education expenses. You can pay tuition for anybody, and there's an unlimited amount of tuition that you can pay for other people. The key is one, it has to go directly to the educational institution. So if you're paying for Billy's private school, you can't give the money to Billy and then Billy pays the invoice. You have to pay the tuition directly to the school. So there can be no middleman. That's an important thing to know. And when it comes to education, it's tuition only, not room, board, or books. So it's only the tuition. Now, is this just the college that we're talking about here? No, it's not. This can be private kindergarten through 12, any kind of private school. It can be vocational school, technology, technical school, etc. Doesn't matter as long as it's only, only the tuition and you're paying it directly to that provider. So those are the gifting rules on a high level. And if you are blessed to be overfunded or highly resilient in your plan, this is a great way to enrich your life while you're enriching other people's lives. But that said, let's get on to our questions.

LISTENER QUESTIONS

Roger: Now it's time to answer some of your questions. If you have a question for the show, you can go to askroger Me M. You can type in a question or leave an audio question, and we'll do our best to help you on the show. By the way, the audio question doesn't guarantee it's going to get on the show, but it is a fast pass. We try to get audio questions because we love hearing your voice.

MARY SHARES FEEDBACK ON QUALIFIED CHARITABLE DISTRIBUTIONS (QCDS).

Roger: Our first question is actually some feedback, and this comes from Mary. Mary sounds like she works in tax. She said in the episode recently where you talked about qualified charitable distributions and we defined what those were, we'll put a link to that episode. In the noodle, you talked about QCDs or charitable distributions to help lower required minimum distributions. Mary says a very good idea in theory, but one that is very difficult to execute. Sounds like Mary has some personal experiences here. Mary says the IRS has not enabled financial companies like Schwab, Fidelity Vanguard to provide documentation to their clients, you, the taxpayer, on their 1,040s to the IRS when a QCD is issued. For example, a client requested an $8,000 check to be paid to a charity from his traditional IRA. The client documented everything in the specific name of the charity, et cetera. The client received the check payable to the charity. The client drafted a cover letter and then mailed a check to the charity. The charity sent a lovely thank you note. Fortunately, Mary says that thank you provided proved to be valuable documentation for dealing with the IRS, because when the IRS sees the $8,000 coming out, it doesn't know that it's going to a charity as a qcd, because the forms issued by these investment firms don't designate it. It just designates it as a distribution, not as a specific qualified charitable distribution. And that's a problem that Mary, it sounds like, has run into. She says the only good news that I can report is that the IRS is supposed to be providing a code, code Y and a method for accountants to complete tax returns that include QCDs starting in 2025. So hopefully this does get easier. Merritt, you are spot on that it is very important as the individual giving the money via, a QCD that you make sure the accountant knows so they can notate it somewhere on the tax return and to obtain maintain records that it actually occurred because the IRS won't know it. So if you have to go back and battle them so much harder than it should be. And I appreciate that perspective, Mary, because it's important that we remember that.

LEE DESCRIBES HIS “SHOULDER BONUS” STRATEGY TO SPEND EXCESS RETIREMENT FUNDS WHILE STAYING WITHIN A SAFE WITHDRAWAL RATE.

Roger: All right, our next question. Let's see here is an audio question.

Lee: Hi Roger, I have a related question to a listener question you answered in episode 616 regarding you can't take it with you. I'm a recent retiree and I employ a guardrail spending strategy. I've been a super saver my whole life and I'm struggling with the transition from accumulation to decumulation. The concept of the upper guardrail prosperity rules never really sat well with me. Waiting for the upper guardrail to be hit feels like it's reinforcing my super saver behavior as it tempts me to set it as a new savings target that I should be aiming for. So I questioned why I need an upper guardrail at all. I have full confidence in my retirement plan of record. So why should I have to wait possibly several years to be able to spend more until some arbitrary future guardrail target is hit? So I've decided to totally eliminate the upper guardrail. Here's how it's going to work. If my current withdrawal rate falls below the initial target safe withdrawal rate that I have, I'll calculate what current net worth reduction would bring that withdrawal rate back up to the exact initial target. Then I'll take that calculated net worth reduction amount in dollars and consider it as a bonus that I'll force myself to spend in the coming year. In addition to my regular initial safe withdrawal rate, I'll add this extra money to my wants or wishes spending budget. Most everyone is familiar with the concept of an annual job bonus. Most super savers obviously save their bonuses while working, but in retirement it truly can be treated as bonus money as there's no need to save more than your plan dictates. By definition, a bonus is something in addition to what is expected. So if I trick my mind into treating this as unexpected bonus cash like a windfall or gift, I really would not hesitate at all in spending it. A highway without a guardrail usually just has a shoulder. So I'm calling this the shoulder bonus. Let me know if this sounds feasible, if I'm missing any potential pitfalls, or if you have suggestions on making this even better. Thanks.

Roger: Thanks for the question, Lee. Lee's referring to guardrails, which is a mathematical model for retirement spending that has more flexibility than say, the safe withdrawal rate, the SWR. And at some point maybe we'll do a theme on a survey of all these different mathematical models for retirement spending. I've avoided doing that, Lee, and talking about them because I just fundamentally don't agree with them. They are good mathematical models, but they're not the way to run your life. And part of the reason is, Lee, I think you're experiencing with guardrails and as you say, it doesn't really sit well with you that you have this arbitrary upper limit that you don't hit. So you end up saving the money and not actually using the money. There's a problem with this deterministic way of planning for retirement. And so you're, you're solving for this mathematical model that's inadequate in my experience by just eliminating the upper part. Meaning that if you're, you're spending withdrawal rate is X. But it, you, you could give yourself a bonus to always get to the upper limit. That way you can, as you said, force yourself to spend the money in the next year because you likely wouldn't otherwise. On the surface, I don't see any issue with that at all from a feasibility, standpoint because you're going to continue to reassess this anyway. Like you said, you're just bonusing yourself up to the upper limit that you know is feasible or that the model says is feasible. So you automatically spend that amount. And then I, I took issue with the way you Said, well, it would force you to spend it. I don't know if we should be forced to spend even if it's a bonus, because it's not about spending money. It's about creating a great life and using the resources in the sequence that you want. Because life is pretty seasonal. But I. And getting to an upper limit and spending that bonus year after year sort of for spending. I better go buy this equipment or do that trip because I got this bonus this year. That's not really how life works in my experience in walking, life in retirement lease. So that's the part that doesn't really sit well with me because you shouldn't have to be forced to do it. So how might. But anyway, I think I don't see any issues on the surface with what you're proposing. And it sounds like you're a mathematical guy, so you're paying attention to this in some systematic way, which is 90% of the battle anyway. You're not asleep at the wheel here, so I don't see any issues there. What I would challenge you with Lee is you want to find mechanisms to extract more for your life than you might be predispositioned to do because of your super saver nature. And some of that is just doing the internal work and doing the work around the asymmetry of life in terms of you're only going to have so many years right now and maybe leaning in to talking to people that have those cautionary tales that can help be a reflection to you that you should maybe expand your vision and take advantage of these early younger years in retirement. That's where having people around us, community around us can really be helpful. Because the elders can tell you like, no, you better do that mountain this year, not three years from now, regardless of what the guardrail says, because you might not physically be able to do it. I think that would be very helpful.

One way to approach this without using these abstract mathematical models that aren't really relevant to real life is when you're doing your feasibility study. In our case, we use Monte Carlo scenarios for that. You can isolate what like Kevin, a retirement coach in the club, likes to call the fun Bucket, and Mark Trotman talks about this as well, is what is the amount of excess wealth that I have if I'm paying for my base great life? And I know that that is highly feasible and I build in some buffer there, how much extra resources do I have that literally could be spent this year or given away this year. What's my excess wealth? Maybe is a good term for it, which can be your fun bucket. We've done this example with clients and it sometimes helps connect some dots of oh, I could literally give away, let's say a million dollars this year and feel very confident my plan is feasible and resilient for the rest of my life. And so now we've isolated a million dollars that is excess wealth in this example. Doesn't mean they're going to give it away or spend it all in one year, but it starts to put a firm number on what their excess wealth is. Not just simply what's the bonus up to the guardrail, but what is the amount that they have as a bucket? Whether this year, over the coming years, or in whatever amounts they meet out that they can give, they can spend, they can reach for opportunities outside of thinking of a year end bonus. I think that is a, healthier way to do it because just people don't spend based off of mathematical model we have. I have clients that sometimes will have a 10% withdrawal rate. Then they'll go, you know, they'll have a few high years and then they'll go really, really low. Life is lumpy. And that's where these guardrails don't really make sense to me. But to overcome that frugality or super saver nature of yours, another way is to approach it that I would suggest doing maybe as a sidebar, is isolating what that excess wealth is. And that way it doesn't matter whether it's a bonus this year or next year, it's just your excess wealth. And now you can mentally start to play with what could, what kind of life could you create or impact could you have with that number? That sounds like a journey worth going on.

JOHN ASKS WHEN TO SWITCH FROM A GENERAL FINANCIAL ADVISOR TO A RETIREMENT PLANNER

Roger: Our next question comes from John. John says hello. Questions and apologies if this is routinely covered on the show. You have done a really good job of describing the differences and value that a retirement planner provides over a traditional financial planner. My question is when is the right time to switch from a generalist advisor and go with a retirement planner, or if not using an advisor, how to decide which to consult. Ultimately, aren't most people doing the investment and saving thing for their retirement? I'm 50 with two adult children, and plan to work until age 65, which is my mandatory retirement age in my career field. I don't currently use an advisor, but am looking to do so. Hey John, thanks for the question. There really is no hard and fast rule of when to switch From a generalist to a retirement planner or whether you're not using somebody to consult a retirement planner, I guess if you had to have a heuristic for it, say around five years before you're planning on leaving work. But I would let the interest lead you. So you're listening to the retirement Answer man show. This is a very specific show, not just by topic but by the way that we approach it. So even though you may be 15 years out, you're starting to think about these topics. So that's an indicator. So I would, I think when you really are starting to think about retirement and how it's going to work and what that glide path looks like to get to it, that is a good time to start consuming quality information on retirement. And it sounds like you're doing that. So this is in your head now, even though it's 15 years away. Now there are a number of arguments to hire a retirement planner sooner than you know, within five years. Because one thing a really good retirement planner can do is help broaden your understanding of the issues that you'll be addressing earlier and some of the nuances that the earlier you can take action on, the better positioned you will be even you know, when you get to retirement. So in this case, let's say you're 15 years away, right? Well one, you know, let's think of some of these more nuanced issues. One is, you know, tax deferred savings, you're 15 years, you know, before retirement and perhaps you're saving all in tax deferred accounts like most people. Well, the earlier you can understand the concept of having some diversification in after tax assets and in Roth and tax free assets, perhaps contributing to an HSA plan with a high deductible insurance policy and then investing that money and building this bucket for healthcare costs. Now you could have 15 years of reps in that or reps in contributing to your Roth 401 rather than your tax deferred. That would be important to know earlier than later. 15 years, you have another nuance would be really being intentional about building of separating you John from your professional John in terms of the interests that you pursue and your social network so you don't end up being a cautionary tale of all of my friends are at work and I can't imagine myself without my title. These are things that you can do earlier. Now you don't necessarily have to switch advisors to do that. A good accumulation advisor might be fine, but I would start to listen to shows like this and Quality information, perhaps think about the club or hang out with people that are farther along. That might be enough for you to get there. But when it gets to actually doing the planning, I think five years is a good target of when. Okay, yeah, maybe you want to switch because there's going to be a lot of unknown unknowns to the general practitioner, even if they do have some retirees. So that might be a good heuristic.

RICK ASKS ABOUT GIFTING APPRECIATED STOCKS TO ADULT CHILDREN.

Roger: Our next question comes from Rick and it's related to what we talked about. Gifting to kids is. Hey Roger, I have a question about gifting to adult children that was spurred by a recent podcast. If I wish to do so, then it makes sense to give appreciated stocks less the exclusion 18,000 because I don't have to pay the capital gains tax and the recipient establishes a cost basis as of the date of the gift. Do I have that right? It seems like a win-win, but I think one nuance there is on your second point. They don't establish their basis as of the date of the gift. They take on your cost basis when you give them the money. So if you bought it five years ago at $5 and then it's now worth 10 and you give them that position, they take on your cost basis of $5. It doesn't. The cost basis doesn't step up at the date of the gift. So that's the only nuance. But that's a great way to do it, especially if they're in a lower tax bracket.

STEVE ASKS ABOUT BUILDING A RESILIENT RETIREMENT PLAN AT AGE 80.

Roger: Our next question comes from Steve, which is related to retiring later than normal. I would like to hear a little bit more about making a resilient plan for an 80 year old. I know the number of us still working part time is small, but some info might help me. By the way, I looked at the planning form from Bolden as you suggested as a start, but it wasn't helpful at all for me. I have two pensions, Social Security, and my wife is retired but healthy. For rocky retirement, we go to two trips a year with our kids and our grown grandkids and we've been doing it for about 15 years now, wondering specifically if we should be getting rid of annuities and 401s to take the tax burden off of our heirs. I try to max out my withdrawals to keep us in the 24% bracket. Is this smart? The process, Steve, for building a resilient plan when you're 80 is really no different than when you're 60. It's just the numbers are different. You're 80 and the time horizon has compressed. You've already started your pensions and your Social Security. If you have the income, the process is exactly the same that we speak in Bolden software or the one that we use in the club. They're just stylistically a little bit different, but they get to roughly the same point, is do you have enough money to pay for your life for the rest of your life? And because you're 80, that might be 10 or 15 years, not 25 years. Do you and your wife have enough to pay for your life, from Social Security and the pensions? And then if not, how much do you need in withdrawals, say, for the next 10 or 15 years? And then what's the contingency fund for unexpected medical expenses or gifting? That should be job number one from a process standpoint. Then you can look at the excess wealth and say, should I be doing Roth conversions because my wife and I are both still alive and we have joint tax brackets? Should I be doing annual gifting to my children and grandchildren to start to move some money out of this estate? The process is going to be pretty much the same. It sounds like just from what you shared, you're in a great position, but it doesn't have to be super complicated. Just make sure you have enough money for the two of you for at least 15 years. Then add a buffer, and then you the rest of that money. You can start thinking about how you start blessing others or using it to create experiences for yourself. All right, with that, let's go set a smart sprint.

SMART SPRINT

Roger: Now it's time to set a baby step you can take in the next seven days, not just to rock retirement, but rock life. All right, in the next seven days, let's put this rep in. Number one, do you have a desire to give money to someone that you care about or someone in need. This year? Number two, you should have a plan of record. Do you have the capacity to do so? Three. How much do you want to give to what person or people? Number four, can you tie a specific purpose to it? I'm giving this money to help someone pay their medical bills. I'm giving this money to someone to help fix their car to fund their Roth IRA. I think that purpose part is important. Now. They can do with the money what they want. If you give them the money, evaluate whether this is a season for you to start doing this. I think of Lee on these guardrail things. You know, rather than wonder if you have a bonus, do the work to see if you have excess wealth where you can start using this money in, in a very useful way rather than letting it grow just because it helps us feel safe, gives us that false sense of. Of safety. Is this the season for you to start giving? And if so, how can you do it most with most impact on people you care about? Think about that. Could be quick and it's no this year. No worries. But don't, don't miss the opportunity. At least consider it.

CLOSING THOUGHTS

Roger: One last thought about gifting money to people or giving money to people is I've had the honor of being in conversations with clients that have started this and not all of them, but for many of them it has drastically changed the joy in life. The joy I see some people in being able to help others that they care about is amazing. You know, the person that receives the biggest gift from giving is the giver. Definitely have seen that. So it's something I'd suggest you consider.

The opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations for any individual. All performance references are historical and do not guarantee future results. All indices are unmanaged and cannot be invested in directly. Make sure you consult your legal, tax or financial advisor before making any decisions.