4 Tax Moves That Can Save You 6 Figures - Part 2 of 2

Tyler Gardner (0:00)

No gimmicks, though, no offshore tax acrobatics, just thoughtful planning, patience, and a willingness to think ahead. This isn't about never paying taxes. You will pay them. I pay them. The point is to pay them on your terms.

Quick note before we start today's episode. For the past seven months, this show has been 100% ad free. And I know many of you love that. I read your reviews, which often say, thank you for keeping this pure. I also read the reviews on other finance shows that sometimes say, thank you for killing this show with ads, ya ding-dongs. So yes, I'm highly sensitive to the fact that you are highly sensitive to ads. But my family recently informed me that they would also love for me to earn just enough from my financial literacy endeavors to buy heating oil this winter. Now, as always, in the spirit of full transparency, there are a few ways I could do that. I could sell a product or a course, but alas, my book doesn't come out until next year, so we're gonna have to wait a bit longer for that option. I could charge for the content by creating subscriptions or putting it behind paywalls, which not only goes against my values, but frankly would create an awkward mess of three years of short-form videos that have told you, I create financial content for free so you don't have to pay for it. That leaves sponsorships. And here's my continued promise, the same one I made in the very first episode of this show. I will continue to be absurdly picky, like unreasonably career-limitingly picky. That's why in three years, I've only worked with one sponsor across all of my platforms. Any sponsor you hear me talk about on this show will meet to that same bar, and I'll never work with a company whose goods or services I don't already use or 100% would use myself. Because yes, I'd like to keep my thermostat above 58 degrees this winter, but I'll never trade your trust for that. That's what layers upon layers of sweaters are for, and if it comes to it, I've been told bloodhounds make excellent heating pads and cuddle buddies. So without further ado, I give you a quick word from our first ever sponsor. And if you've been here for a while, you'll understand why this is such a big deal for me. My main goal, always and forever, is to help you feel confident, empowered, and simply awesome managing your own money. I've spent years creating free financial education because I genuinely believe everyone should have access to it. And every single day, I still get about 20 emails from people saying, that's great Tyler, but who would you trust if you weren't a former portfolio manager or someone who wanted to manage their own money? And without a doubt, the answer is Facet. You all know I've been championing the flat fee model since day one, years before I linked up with Facet, because it's not twice as hard to manage $2 million as it is $1 million, and you shouldn't pay more simply because you have more. What I love about Facet is that you get access to a full team of CFP professionals who help you with your entire financial picture, not just your investment performance. They care about your life as much as your numbers. And to give you an idea of the kind of people they are, because that sort of thing matters to me, when we started working together, they didn't send me the usual swag box with a branded tote bag I'd never use. Instead, they sent two dog bowls for my bloodhounds. That told me everything I needed to know about who they are and what they value. It's also why I'm genuinely thrilled to have them as the first official sponsor of this show. So if you're 90% of the way there, but want an expert hand with final allocation strategies, tax planning, or even unpacking your relationship with money and why it might be time for a change, visit facet.com/tyler.

That's facet.com/tyler, and see why they're the only partner I have ever brought to you thus far as a resource. Facet is an SEC-registered RIA. This is not advice. All opinions are my own and not a guarantee of a similar outcome. I'm not a member of facet. I have an incentive to endorse facet as I have an ongoing fee-based contract for cash compensation, as well as percentage of equity in facet based on this endorsement.

Hello, friends. This is Tyler Gardner, welcoming you to another episode of Your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing. So let's get started and get you one step closer to where you need to be. Welcome back friends. If you're tuning in for the first time today, or if you've missed a few episodes along the way, do yourself a favor, hit pause and go back one episode. This is part two of our series on the smartest tax strategies for your fifties, and I promise it'll make way more sense if you start at the beginning. Otherwise, it's like trying to watch The Godfather Part 2 without ever meeting Vito Corleone. You'll get the gist, lots of whispering, the occasional murder, but you'll wonder why everyone looks so constipated throughout the entire film. In part one, we covered the first four strategies. Roth conversions, withdrawal sequencing, keeping your taxable accounts tax efficient, and tax loss harvesting. Boring on paper? Absolutely. But I argue they're the broccoli of retirement planning, not flashy, not fun, but the reason you'll still be upright in your 80s instead of eating canned soup somewhere in the dark. Today, we're diving into the final four. The health savings account triple play, social security timing and taxes, charitable giving with donor-advised funds, and what's called bracket shifting by gifting to your adult. Kids. These last four are for people who want to get clever, but not too clever. Nobody's suggesting you try to outwit the IRS with offshore shell companies or gold bars buried in your backyard. These are strategies for people who have realized that money isn't just about you, it's about family, community, and making sure the biggest heir to your estate isn't the IRS with their handout like an unwelcome wedding guest. And as always, if this podcast has been helpful, please consider leaving a review on Apple Podcasts or share it with a friend who you think might need it. It helps grow the show, and it helps me justify the fact that I spend my mornings talking about taxes instead of raking the yard, which means we'll wind up with a damp compost heap masquerading as a lawn come April. All right, enough stalling. Let's get into it. Strategy number five, the Health Savings Account Triple Play. This account is, without exaggeration, the single most underrated retirement tool out there, the Health Savings Account or HSA. If you've never heard of it, don't feel bad. The IRS doesn't exactly put up billboards that say, hey, here's the best deal in the entire tax code. They bury it, instead, somewhere between Alpaca Wool Depreciation Rules and Line 47 Subsection C about Tugboat Write-Offs. Which is to say, unless you make a hobby of IRS publications, and if you do, my condolences, you're not going to stumble on this by accident. But here's why this matters. The HSA is the only account I know of that gives you a triple tax advantage. Contributions go in tax deductible, like a traditional IRA. Growth inside the account is tax free, like a Roth. And withdrawals for qualified medical expenses are also tax free, like nothing else. Anywhere. That's the trifecta. The IRS basically shrugs and says, fine, this one's yours. And if you know the IRS like I do, I've been reading their bedtime stories, otherwise known as Publication 969, that's about as generous as they will ever get. Now, here's where it gets interesting. Most people who do know about and use the HSA, treat it like a glorified checking account for co-pays and prescriptions. They contribute, they swipe the card at CVS, they move on. Which is fine. But it's the financial equivalent of buying a maple creamy, licking it once, and throwing it in the trash. Sacrilege. The smarter move is to treat your HSA like a stealth retirement account. Contribute the maximum every year. For 2025, that's $4,300 for individuals, or $8,550 for families, plus a $1,000 catch up if you're over 55 Then, instead of spending it, invest it. Yes, you can usually invest the money inside an HSA. Put it in a broad market index fund if your provider allows it. Then, pay current medical expenses out of pocket if you can swing it, and keep the receipts. Why? Because you can reimburse yourself years or even decades later, tax free. Let's break down an example. You pay $2,000 in medical bills this year, and you choose to do it out of pocket. You stuff the receipts in a folder labeled IRS Don't Mess With Me. Fast forward 15 years. Your HSA has quietly grown. You're retired and you decide you'd like to buy that kayak. Not the timeshare kind. You pull $2,000 out of the HSA, tax free, because technically you're reimbursing yourself for that old expense. It's legal, it's smart, and it's exactly why this account is a hidden gem. Now, what if you never use it for medical expenses? Well, after age 65, you can withdraw from your HSA for anything without penalty. The catch? Those withdrawals would be taxed as ordinary income, just like a traditional pre-tax IRA. Which means at worst, your HSA is basically an IRA in a trench coat. At best, it's a turbocharged Roth for health care. And let's be honest, the reason none of us adore the HSA is that none of us want to think about spending our hard-earned money on health care. But whether or not you're currently on a daily cocktail of AG-1, fish oil and optimism, you will have medical expenses. Fidelity estimates the average 65-year-old couple today will spend around $315,000 on health care in retirement. That number will only climb. So pretending you don't need an HSA is like pretending you'll enjoy Vermont winters after 4 p.m. in January. Spoiler, you won't. So what's the play? If you have access to one and are eligible for one, meaning usually you're part of a high-deductible health program, max it out every year that you can afford to do so, even if it stings. Future you will send a present to you, a fruit basket. Next, invest the balance. Don't let it rot in cash unless you absolutely need it in that given year.