Maximizing Your Tax-Free Wealth & Income For Retirement | Ed Slott

**SPEAKER_1** (0:01)
The world moves fast. Your workday, even faster. Pitching products, drafting reports, analyzing data. Microsoft 365 Copilot is your AI assistant for work, built into Word, Excel, PowerPoint, and other Microsoft 365 apps you use, helping you quickly write, analyze, create, and summarize. So you can cut through clutter and clear a path to your best work. Learn more at microsoft.com/n365copilot.

**SPEAKER_2** (0:30)
Spring starts at the Home Depot, and we are bringing the heat to your backyard this season. Fire up the flavor with our wide variety of grills for under $300, like the next grill four-burner gas grill that's perfect for hosting your spring cookout. Then set the scene and turn your outdoor space into the go-to spot with patio sets for every budget. Bring it this season with grills that deliver flavor and patios that set the vibe from the Home Depot. Start your spring with low prices guaranteed at the Home Depot. Exclusions apply to homedepot.com/pricematch for details.

**Ed Slott** (1:01)
The key to saving taxes not today or tomorrow or this year, but over a lifetime and beyond to your beneficiaries is my number one always rule. Always pay taxes at the lowest rates.

**Adam Taggart** (1:23)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Smart retirement planning is key to living well after you've stopped working. But sadly, many Americans find themselves falling behind. According to the Federal Reserve's Economic Well-Being of US. Households report, 65% of Americans either believe their retirement savings are off track or they aren't sure. And for those who do have retirement accounts, the median savings balance stands at just 87,000, far too little to retire on. Today's guest is going to tell you how to increase your odds of not only being able to afford to retire, but doing so with ample access to live your golden years the way you want. Ed Slott, CPA, is a renowned IRA distribution expert, author, and professional speaker known as America's IRA Expert. He's the founder of Ed Slott and Company, creator of the Elite IRA Advisor Group and a professor of practice at the American College of Financial Services. He focuses on advanced tax strategies and retirement savings. Ed, thanks so much for joining us today.

**Ed Slott** (2:25)
Thank you. Great to be here. When you mentioned that median retirement balance, $80,000 something, I wonder, is that skewed to all ages? Because I would think somebody in their 50s or 60s would have a much higher median.

**Adam Taggart** (2:44)
You would hope. I don't have the distribution in front of me. I think that is probably median of all working adults.

**Ed Slott** (2:50)
It sounds pretty weak.

**Adam Taggart** (2:52)
Yeah. But I have seen data that shows it's not all that much better for people who are in the 54 to 64-year-old cohort. Maybe they've got 175,000, maybe 200,000. But again, that's not enough to fund the next 20 plus years of your life.

**Ed Slott** (3:11)
Yeah.

**Adam Taggart** (3:12)
All right, Ed. So look, as far as thanks go, thank you again for coming on. But I want to extend my gratitude to the team at Lance Roberts Teams at Real Investment Advice. They had me out at their conference in January where you were the keynote speaker.

**Ed Slott** (3:27)
Yes.

**Adam Taggart** (3:27)
Really enjoyed your presentation. I thought I wanted to get this in front of my audience. That's what we're going to try to do today.

**Ed Slott** (3:33)
Okay. Now, you remind me what I said, because it's different every time.

**Adam Taggart** (3:37)
Yeah.

**Ed Slott** (3:38)
As you saw with me, I never use PowerPoint or slides or anything. It's whatever happens organically with the audience.

**Adam Taggart** (3:46)
Good. Well, we'll build into this nicely, Ed. So to start, let me ask you this. What are the most common mistakes or acts of self-sabotage that people make when it comes to retirement planning?

**Ed Slott** (3:59)
Oh, the number one mistake, short-sightedness. That's easy, especially when it comes to a Roth IRA or more particularly a Roth conversion.
A Roth conversion requires you to pay tax up front. And one of my always rules, the reason I created all these always rules I have of mine, because I saw for years people on TV talking heads and everything, not me, they could never give you a straight answer. You'd be on CNBC. They said, well, probably, could be, maybe, I don't know, wishy washy, you know, have to run the numbers. And to me, that didn't help anybody. So I came up with my own. There's not many of them, because there's not many rules that are always. But when I tell you I have an always rule, you can take it to the bank. It's non-negotiable. And the key to saving taxes, not today or tomorrow or this year, but over a lifetime and beyond to your beneficiaries, is my number one always rule. Always pay taxes at the lowest rates. Now that sounds simple. It makes sense too. If you're always paying at the lowest rates, you'll save the most in taxes over a lifetime. But there's a second part to my always rule, which catches people. Always pay taxes at the lowest rates, even if that means paying taxes before they're required.