I hope April has been very kind to you, and there is a new wrinkle in this edition of the newsletter that I hope you will like.
But first, here’s the agenda:
- Retirement and Taxes
- 📖 Book Recommendation
- New wrinkle?
- Words of Wisdom ❤️
Tax Season Means Tax Tips
You have a couple days left to file taxes for 2023.
Hopefully, everything is as you expected.
Across the many conversations we have with retirees, here are two important commonalities we experience often:
- Retirees often (not always) experience lower tax rates in retirement than their working years
There is an important distinction here.We aren’t saying that tax rates always decrease, or that they won’t go up.
In fact, they are definitely scheduled to increase after the Trump-era tax cuts expire.
However, even if tax rates increase, the marginal tax bracket for many can (and often does) drop in retirement.Once you retire, you generally have more control over the income side of your equation. If you were collecting a paycheck from an employer, you had your salary or hourly rate, and you got that coming in each month. You didn’t really have a whole lot of “say” in the amount, unless you wanted to reduce your hours to lower your tax bracket (which wouldn’t make a lot of sense unless you were taking Social Security benefits already).In retirement, a W2 paycheck isn’t coming anymore, and most are drawing from pensions, 401(k)s, IRAs, brokerage accounts, or other investments/savings accounts.Additionally, with tax advantaged accounts like Roth investments and Health Savings Accounts (HSA), tax control becomes even more possible, and can be a wonderful thing.While you were employed, assuming your earnings grew over the course of your lifetime, you may find yourself in the 22%, 24%, or 30%+ for your marginal tax rate, but in retirement, controlling your income makes it possible to stay in the 10% or 12% brackets.
So, even if tax rates go up across the board… up to 10%,15%, 25%, 28%… you can still find yourself in the 15% bracket rather than the 22% or 24% bracket you were in during your working years.
- Paying the least amount of taxes in a given year is not always the best strategy
A trap we see people fall into often is working hard to pay the least amount in taxes in a single year, often at the detriment of future years. Similarly, people will attempt to lower their taxes into retirement via Roth conversions or other strategies, when… had they left things alone… their tax burden would’ve been less (refer back to point #1).All we’re saying is… before jumping into decisions to pay the least amount of taxes in 2024, make sure you take a look at how those decision may impact 2025 and beyond.
“Everyone” hates taxes
Every decision we make has a cost.
Sometimes, doing nothing… has a cost.
I don’t enjoy paying taxes, but allowing that hatred of taxes to cloud out opportunities for long-term growth may hurt in the long run.
I would assume many of you have already seen the video on Social Security taxability and the tax torpedo, but in case you haven’t, Zacc does a great job explaining situations where we may overspend trying to save a little on taxes.
Click the picture or here to watch
Book Recommendation
I read this book about 7 or 8 years ago… back when I was cruising through life without any real work-life balance issues. I thought the book was good. It got me to clean out my closet and get rid of some clothes I hadn’t worn in a while, and I moved on – not really thinking too much of it.
Life has become much more hectic (to say the least) since I last read this book.
Kids have grown and are being shuttled to different activities.
My wife is an absolute beast of a fitness instructor.
Work and YouTube have exploded in a great way.
Friendships and partnerships are constantly evolving.
A parent passed away
… it just never stops.
Two close friends heard me discussing life and asked if I’d read the book.
I said, “yes.”
They said, “do you remember it? Because you’re talking about a lot of things that the book seems to help.”
So… I picked it up and have now read it twice over the last two weeks.
Highly recommend it. Grab it. Read it. I think you’ll really like it.
New Wrinkle
I was walking through the grocery store with my son, looking for a birthday present he could get one of his 8-year-old friends for an upcoming party. While we were wandering through the toy aisles, I “accidentally” happened upon the board game area. My family’s always been into board games and card games, so it’s a habit to check out the new additions to this area of the store.
A particular game caught my attention, mostly because of what I do for a living. The game was called, “OK Boomer.”
I couldn’t help myself, and I bought it… even though we weren’t there for ME… something I had to keep repeating to my son as HE was wanting all the toys we were supposed to be getting for his friend.
Do as I say… not as I do, my son.
This was back in December and, for those who have known me a while, you know that my mom was still around during this time, and she was living at my sister’s house. My sister just so happens to live three doors down from me. So, of course, I brought the OK Boomer game over to play.
We had my mom – a Baby Boomer, my sister and her husband – Gen X, myself and my wife – Millennials, my two nieces and their husbands – younger Millennials, and my three kids – Gen Z.
The premise of OK Boomer is there are trivia cards from different generations:
The Silent Generation
Baby Boomers
Gen X
Millennials
Gen Z
There are a few variations, but the gist is you are trying to earn a card from each generation by correctly answering trivia questions from each time period.
Playing this with my mom, my sister’s family, and my family is a memory I’ll cherish forever and the game is super fun. We put together teams of two with different generations on each team. It was fun to see a game where my 8-year-old son and 11-year-old daughter could dominate their Gen Z category with my mom being totally lost. And then, my mom could dominate the Baby Boomer and Silent Generation questions, but my kids were completely lost.
My sister has always been the bridge of our family and got every question posed to her correct – winning the game with my 5-year-old daughter as her partner.
So, I don’t usually have things like this in the newsletter, but we’ve been playing this game ever since December to where my daughter is getting WAY too smart about things she never would have known otherwise, and I think that’s cool. Maybe you and your family would think it is cool, too.
Below is a link where you can get it if you’d like and, full transparency here…
I set up an Amazon Affiliate account years ago where, if someone buys something through a link I copy, I get a small payment from Amazon. It’s integrated into my web browser, so if I copy something from Amazon, it always turns the link into this affiliate link.
What this means is that if you do buy this game through this link, I get like… 30 cents, I think. You don’t pay more, it’s just built into Amazon.
If you’re not okay with that, search the game on Amazon and buy it without clicking my link.
Totally fine with me. It’s just a super fun game.
Same goes for the book above, by the way.
Ok… here is the link:
OK Boomer Game
Words of Wisdom
I just told you how smart my 11-year-old is getting.
Now, I’m going to do a 180 and say… Kids can be super dumb.
I mean that in the most loving way possible.
And, if you’ve had young (or even old) kids, you know exactly what I mean.
Here’s the situation I’ve faced this past month.
I’ve been making Ramen noodles for I dunno… we’ll call it 30 years.
Maybe even longer.
The complex recipe was passed down to me from my father, and probably from his father, back thousands of years to the Orient itself where these blessed noodles came from.
The process is simple:
- Boil water
- Put the noodle brick in the water
- Separate the noodle brick and let it boil for 3 minutes
- Turn off the heat
- Rip open that foil bag with pure, salty flavor and pour it in the water
- Mix it around a bit and let it soak in that goodness
- Maybe lick that foil packet to get a salt hit while you wait
- Drain the water
- Enjoy
You don’t realize how many actual steps there are to make Ramen until you type them out in detail… but in reality, it’s remarkably simple.
Until my kids get involved.
Messing with tradition
Noel – the 11-year-old – decided that she was going to be the one person in our long line of proud Soderborgs responsible for ruining generations-worth of perfection. She was going to completely ignore her dad’s experience, her grandpa’s wisdom, her great-grandpa’s sacrifices, and the instructions on the Ramen package itself!
Instead of pouring the salt flavor into the water to soak with the noodles…
she… drains the water first?!
WHAT?!
Is that even legal?
Frankly, I’m not sure if I can allow her to carry on our name for the next few years until she marries some other guy who can deal with her blatant disregard for all that’s holy.
So Dumb.
Right?
Maybe not.
Maybe… I’m the dumb one.
I tried her way and it is… REALLY good.
It turns out that the Soderborg line has been dumping all the flavor out with the bathwater so to speak.
Granted, my mom used to warn me how unhealthy all that sodium was in Ramen, and by me dumping the flavored water out, I felt like that helped reduce the sodium content substantially, so thank you Mom (and you’re welcome).
However, with this new way, there is so much more flavor to the noodles!
All I want to eat now is Ramen.
And there’s no need to judge me.
I promise I judge myself way more harshly than you ever could.
I can’t believe my dad failed me in such a serious way.
I don’t know if I can ever forgive him.
Kids can still be dumb.
(Noel is reading this over my shoulder)
Your Recipes
One of my embarrassing guilty food pleasures is I make a cheese quesadilla and eat it with Ramen, which raises a question I have for you.
What are some of your… we’ll call them ‘unique’… recipes that you secretly enjoy, but you know most people wouldn’t dare give them a shot?
I look forward to trying some new dishes 🙂
Erik
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