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“The years between retirement and age 70 are optimal for tax planning” With Beau Henderson & Danielle Seurkamp

The years between retirement and age 70 are optimal for tax planning. These are the years when you no longer have employment income but aren’t yet required to take money from your retirement accounts or Social Security. This is an ideal time to sell assets in your non-retirement investment accounts. When you sell appreciated assets in […]

The years between retirement and age 70 are optimal for tax planning. These are the years when you no longer have employment income but aren’t yet required to take money from your retirement accounts or Social Security. This is an ideal time to sell assets in your non-retirement investment accounts. When you sell appreciated assets in non-retirement accounts, the gain is taxed at capital gains rates which vary based on your tax bracket. In these low-income years, you may be in the bottom two brackets and could pay as little as zero federal tax on sales of securities. If you only have assets in retirement accounts, which are taxed differently, these can still be great years to do Roth conversions and other tax planning techniques.


Asa part of my series about the “5 Things Retirees Say They Wish They Were Told Before They Began Retirement”. I had the pleasure of interviewing Danielle Seurkamp, MS, MPAS®, FBS®, CFP®. Danielle is a national award-winning Certified Financial Planner, a contributor for Forbes and the founder of Well Spent Wealth Planning in Cincinnati, Ohio. She has expertise in both the technical and behavioral side of finance which she uses to help her clients achieve their goals, reduce their lifetime tax bill, extend the longevity of their assets and increase their sense of financial security. She volunteers her time as a member of the board of directors for the National Association of Personal Financial Advisors and as a pro-bono advisor for people who are transitioning out of homelessness.


Thank you so much for doing this with us, Danielle! Our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?

There are people who know from an early age what they want to do with their life. I wasn’t one of them. I never had a childhood realization that I wanted to own a financial planning firm. As a kid, I didn’t even know people made plans around money. In my house money seemed to come and go; sometimes there was enough and sometimes there wasn’t. In fact, I didn’t learn what financial planning was until just after college when I happened to take a temporary position filling in for an administrative assistant at a wealth management firm. What was supposed to be a three-month role turned into nine years of working my up, going from the person who picked up lunch for the shareholders to eventually being offered a seat at their table. It was that valuable experience that helped me eventually launch my own firm.

Can you share the most interesting story that happened to you since you started your career?

A few years ago, I was on a committee to help plan a national financial planning conference. We were selecting our keynote speakers and I thought we needed a little excitement. As a huge fan of Shark Tank, I suggested we try to get Daymond John and before I knew it, he was headlining our agenda. I was excited just to hear him speak, but about two weeks before heading to San Diego, I was offered the chance to introduce him. He was gracious enough to hang around after his address and take pictures with us. I had purchased a pair of Sunstaches (a pair of funny sunglasses from a company that Daymond invested in on Shark Tank) for just such an opportunity. He recognized the glasses right away and we took turns wearing them in the pictures. A week after returning home from the conference, I got a huge box of swag from Daymond with different Shark Tank products. I was a seriously happy fangirl.

Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?

About a year or two into my role as a support advisor, I had my first opportunity to present a retirement analysis in a client meeting. I really wanted to demonstrate my knowledge, so I walked the client through each number and assumption in the analysis. This went on for nearly an hour. It became more and more evident that everyone in the room had lost interest in what I was saying; I don’t even think the client cared if they could retire anymore. I knew I was putting everyone to sleep, but I didn’t know how to wrap up the presentation so finally, the lead advisor jumped in and bailed me out. It was a tough meeting, but it taught me that I don’t have to rely on endless details, fancy acronyms or big words to communicate my competence. It’s much more of an art to explain something complicated in a simple way that people can understand…and that doesn’t make them want to flee the room.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Many people come to mind, but the one who changed my life significantly was a female financial planner who I worked with early in my career. I had been an administrative assistant for our firm for about a year and a half when she asked me to go to lunch to talk about my professional plans. We sat down to eat and before I had taken a single bite, she asked “What the hell are you doing in this job?” For a moment, I thought I was getting fired, but then it became clear she was asking because she didn’t think I was living up to my potential. I was impacted by how invested she was in me and that she cared enough to call me out and push me to do better. She not only made me think about what I wanted out of my life, but she paved a way for me to become an advisor for the firm. There are very few things in my life that haven’t been positively impacted by my decision to pursue this career and I have her to thank for that.

What advice would you suggest to your colleagues in your industry to thrive and avoid burnout?

I am a huge fan of yoga for the mental, physical and spiritual benefits it provides. I could never get myself to go to the studio, so I worked with a yoga therapist to create a personalized routine for me that I could do at home and I began practicing yoga routines I found on YouTube. My favorite channel is Yoga with Adrienne; it allows me to fit in a meditation or workout at any point in my day for free. It’s incredible what just a five-minute session can do for your mood.

My other recommendation for prioritizing self-care is to budget for the things that you want to do. I see a lot of people who make great money but don’t set any aside for things that give them joy like travelling. It’s a lot easier to spend money on yourself when it is specifically earmarked for that purpose. Waiting for money to appear is a recipe to perpetually put off the things that make you happy.

What advice would you give to other leaders about how to create a fantastic work culture?

I love the book 5 Voices: How to Communicate Effectively with Everyone You Lead. It explains that many of the conflicts we feel in a group environment have more to do with how we’re communicating than they do with our fundamental disagreements. For example, I am considered a Nurturer and I can be somewhat reticent to voice my opinion in a group setting, especially if there is an opinionated Pioneer in the room, who may unwittingly steamroll me in a conversation. To have a great culture, it’s important that everyone feel safe to communicate their opinion and encouraged to share even if they are dissenting. 5 Voices talks about how to do that in an intentional way.

Ok thank you for all that. Now let’s move to the main focus of our interview. Retirement is a dramatic ‘life course transition’ that can impact nearly every aspect of one’s life. Obviously everyone’s experience is different. But In your experience, what are the 5 most common things that people wish someone told them before they retired?

The adjustment from saving to spending is harder than you think. If you can retire, it’s likely because you developed good saving habits and learned not to spend your retirement assets. With other healthy habits like diet and exercise, the goal is to maintain the disciple indefinitely but with saving, there comes a time when it is healthy to stop. Once you reach retirement, you are expected not only to stop accumulating but to open the gate around your savings and begin to use your money for living needs. It might sound like an easy switch but making a 180-degree shift in your thinking and behavior around saving and spending can be much more difficult than you imagine. After decades of watching your assets grow, it can feel upsetting to see them depleting, even if your financial advisor gives you the green light to spend. I see many retirees respond to that stress by being vigilant about spending and denying themselves the things they planned on doing in retirement. To combat that instinct, it helps to think about retirement goals as promises you made to your younger self. You made sacrifices along the way to retirement so you could ultimately reap the benefits down the road; it’s important to keep up the second half of that bargain.

The years between retirement and age 70 are optimal for tax planning. These are the years when you no longer have employment income but aren’t yet required to take money from your retirement accounts or Social Security. This is an ideal time to sell assets in your non-retirement investment accounts. When you sell appreciated assets in non-retirement accounts, the gain is taxed at capital gains rates which vary based on your tax bracket. In these low-income years, you may be in the bottom two brackets and could pay as little as zero federal tax on sales of securities. If you only have assets in retirement accounts, which are taxed differently, these can still be great years to do Roth conversions and other tax planning techniques.

It might take a while to get into the groove. The first year of retirement involves significant change. You lose the social interaction with your colleagues. You may lose the sense of purpose you got from your work. Your daily routine changes. You may see quite a bit more of your spouse than usual. You find out golf and volunteering aren’t enough to fill your entire day. You no longer receive a paycheck. Though we imagine retirement as this idyllic experience, it involves change that isn’t always easy. Adjusting to these changes is even harder if you think you’re supposed to be euphoric but you’re not. Instead, accept that for most people retirement comes with a range of emotions and it takes a while to find your new normal. It’s okay to give yourself time to adjust.

Reconsider taking Social Security or pension benefits right away. Recurring income early in retirement can hinder your ability to use the tax-efficient income strategy I mentioned earlier. It also might dramatically reduce the amount of money you receive over your lifetime. While it often feels better to get a consistent paycheck right away in retirement, it may not be the right decision particularly if you have longevity in your family. For example, delaying Social Security benefits increases the amount of benefits you receive by up to a third and serves as a hedge against inflation and longevity risk.

Think about cancelling or repurposing life insurance policies. There are three primary purposes of life insurance: replacing a bread winner’s income in the event of their premature death, funding a legacy goal or providing liquidity for an estate. Under the current laws, most people won’t need insurance for estate planning purposes. If you have enough money to retire, you are no longer reliant on the bread winner’s income to survive. This means that many people no longer need life insurance once they reach retirement. If you determine you no longer need your policy, consider exchanging it for a policy with long-term care benefits which you are much more likely to use during retirement.

Lets zoom in on this a bit. If you had to advise your loved ones about the 3 most important financial issues to keep in mind before they retire, what would you say? Can you give an example or share a story?

The three issues I would keep in mind are how old you will be at retirement, how you will fund your living needs and how you will provide health care coverage. Many retirement plans can’t be tapped for living expenses prior to age 59 and a half without incurring a 10% penalty, so it’s important to consider how you’ll fund your lifestyle if you retire prior to that. You’ll also want to think about what medical insurance you can access and how much it will cost. The Affordable Care Act gives most folks access to insurance prior to Medicare age but the policies can be quite costly. To minimize your taxes, penalties and insurance premiums, you need a cohesive plan that addresses all the relevant issues simultaneously. I have helped people save tens of thousands of dollars on health insurance and taxes in retirement simply by being mindful about what assets they use to fund their living needs. This takes complex planning so reach out to an expert for help.

If you had to advise your loved ones about the 3 most important health issues to keep in mind before they retire, what would you say? Can you give an example or share a story?

Long-term care, long-term care, long-term care. One of the most common things I hear from people is that they don’t want to be a burden to their families. I know first-hand how challenging it is to be responsible for someone else’s care once they are no longer physically or mentally capable of taking care of themselves. My grandmother suffered from dementia that gradually worsened over many years. The emotional impact on our family was significant but the practical impact was mitigated because she had a long-term care insurance policy. It covered $140 per day of home care or $175 per day for nursing care for two years and she used every penny of her benefits. This enabled us to keep her at home for a year with 12 hours of daily care that cost over $250 per day before she eventually went to an excellent memory care facility than cost $200 per day. She had no significant wealth beyond the value of her home and would not have been able to afford the quality of care she received without insurance. Conventional thinking is that you shouldn’t buy long-term care insurance unless you have a certain amount of wealth; rather, you should spend down all your assets and go on Medicaid. I disagree; I think everyone should at least consider long-term care insurance as a part of their financial plan.

If you had to advise your loved ones about the 3 most important things to consider before choosing a place to live after they retire, what would you say? Can you give an example or share a story?

For those looking to relocate, I advise travelling in the years leading up to retirement to determine what climate and lifestyle suits you best. Once you narrow the search, make sure to visit your desired location at different times of the year; a tourist city might be fine in the summer but a crowded mess in the winter. Lastly, I would suggest renting a home in a new city before making a purchase. Get to know the parts of town you like best before going through the hassle and cost of a real estate transaction.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

My hope is that we start to better understand how we are influenced by our relationship with money. For many of us, the barrier to success in our financial lives, our careers and our relationships is a limiting belief we hold about money. The decisions we make about spending, saving, giving and investing, even what we choose to do as a career, are often informed by our early experiences around money. So many of us have experienced financial trauma. We might have grown up with insufficient means, watched our parents fight about money or become a target of bullies because we didn’t fit into the socioeconomic class of our peers. We may have witnessed the fallout from the loss of a job, a pension, a home, or money in the stock market. We rarely discuss these significantly impactful events, even in a therapeutic setting. I know that healing my financial pain was critical in opening my business. I can only imagine the positive impact that the same type of healing would have on others. Fortunately, the burgeoning field of financial therapy is taking up this work by bringing together financial and therapeutic expertise to help improve the way we think, feel and behave with money and increase our overall well-being.

Is there a particular book that made a significant impact on you? Can you share a story?

The book Facilitating Financial Health was very impactful for me. It was the first book that I read that exposed me to financial psychology. I specifically remember when I read “Resistance is not stubbornness or a failure to cooperate. It is feedback.” I immediately wrote it down on a post-it note that I still have years later. Shortly after reading the book, I was in a client meeting with someone who had consistently ignored my advice to use some of his life insurance cash value to temporarily fund his living needs. For the first time, I stopped listing my reasons for why he should listen to me and simply asked him to help me understand his hesitation. It turned out he thought that using that money would cause his children to lose out on the death benefit of the policy. That wasn’t the case but until we addressed that specific concern, he would have never followed my advice. Whether it is a client or any other person in my life, I have learned to recognize push back as an indicator to stop asserting, stop advocating, stop advising and explore the source of the resistance. There’s always a legitimate feeling or concern if you take the time to understand someone’s perspective.

Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?

One of my favorites quotes is the song lyric “Picked all my weeds but kept the flowers.” I love the image of clearing out a garden, removing the things that suck life away from what you want to grow. It’s a reminder to periodically prune the habits, the relationships and the beliefs that no longer serve us and hold us back from thriving.

What is the best way our readers can follow you on social media?

Follow me on TwitterLinkedinForbes or subscribe to my monthly email at www.wellspentplanning.com.

Thank you for these fantastic insights. We wish you only continued success in your great work!

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