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Plan With The Tax Man

Plan With The Tax Man

By: Tony Mauro
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 Financial, tax and retirement planning guidance from Tony Mauro. Tony is the original Tax Doctor, serving central Iowa. We’ll teach you how to properly plan for retirement, minimize your tax burden and attain a successful financial future.Copyright Tony Mauro Economics Personal Finance Politics & Government
Episodes
  • Retirement Breaking News: The 4% Rule Gets a Makeover

    Retirement Breaking News: The 4% Rule Gets a Makeover
    Jul 3 2025
    The 4% rule gets talked about like gospel in retirement planning. But let’s be honest, it’s always been more of a rough guess than a golden rule. Now, its original creator is revising it to 4.7%. So, does that mean your retirement paycheck just got a raise, or is this just another headline that oversimplifies a complex decision? Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript: Marc: The 4% rule gets a makeover. Let's talk this week here on Plan With The Tax Man about the change in the 4% rule by the guy who created it. It's pretty much the gospel in retirement planning, so what does that mean for us? Let's get into it with Tony. Hey everybody, welcome to the podcast. Thanks for hanging out with Tony Mauro and myself as we talk investing, finance, retirement, and the 4% rule getting a makeover is the big topic this week, Tony. I want to dive into this conversation just a little bit, but first, how are you, my friend? Tony Mauro: I'm doing very good, how are you? Marc: I'm doing very well. Have you seen this? I'm sure you have- Tony Mauro: I have seen it. Marc: About the move to 4.7%. Doesn't have the same ring as the 4% rule, but it's being bumped up to 4.7%. And so I want to talk about this a little bit because this thing really, truly has... The guy who made this, and I'll let you give us a little back story here in a second, I wonder if he thought that this thing was going to be like the golden rule gospel of retirement planning when he made this thing 30 some odd years ago, right? Tony Mauro: Yeah. Well, I don't know if he did and it's been around for what, since the '90s I believe? Marc: Yeah, early '90s. Tony Mauro: Basically what he came out with, and there's been books written about it and everything else, and so it's very popular that what he came out with was retirees should basically, if you're going to live off of the income, you should take out 4% or right around there just for inflation. So for basically over your retirement lifetime, which at then was 20, 30 years, you wouldn't run out of money. Marc: Yeah, and it was like a 50/50 split too, right? I think it was instead of the 60/40, it was 50/50. And to make it easy, Tony, I guess we can say, look, you got $1 million, and it feels like everybody, even people who aren't in the financial industry have heard of this 4% rule. If you're getting close to retirement, you've probably heard it. And so it's like, okay, you got $1 million, take out 4%, it's $40,000 a year. Nice and easy, right? Tony Mauro: Right. And then it would continue to grow, you could continue to do that and you wouldn't run out of money. Marc: That's your safe withdrawal rate, right? Tony Mauro: Yeah, safe withdrawal rate. Now, in a person's overall financial plan, I like to go against the grain on this a little bit. I think when we talk about this at the distribution stage, I try to get them to buy into the fact that we want to do a hybrid type of take on this. Number one, we want to start out, because I think in today's, depending on their appetite for volatility, I think you can get closer to 5% easy. You have to cut back your bonds a little bit. Marc: Interesting. Well, and that's kind of what Bill's saying. And by the way, his name was Bill Bingen for folks who were- Tony Mauro: Yep, Bill Bingen. Marc: Who are listening. He's saying 4.7%, so you're saying maybe even 5%. Tony Mauro: I like to suggest 5% and I've been doing it with my own father for years and several others that like that. Now, if their propensity, they don't want to see any of their portfolio when they look at a statement or something and see it bouncing around, I try to get them, "Let's not worry about that, it's going to go up and down." But the income, we can get 5% easy, but I try to get them to buy into the fact, is let's say that we base it on 5%. Yeah, if we have a bad market, let's bump our distribution rate down a little bit to 4% or 4.5%. And if we have a good market, well, then let's bump it up a little bit in that year. So we kind of get a little more activity, because I think the one thing I don't like about this rule is a lot of people think, "Well, I've got to leave all my money to whomever," and whatnot. I think the number one thing that we need to think about is, the first thing is you need to make sure that the rest of your life is stable and you have enough money. Then if there's money left, you can leave it to heirs. But I think too many of us get wrapped up in, "I don't want to take any money out." And I think it depends again, what you want to do in life, but they kind of shortchange a good retirement when they have money that they could do it with. Marc: Yeah. Okay, so looking at what Bill has done here, he's changed a couple of things. His 2025 update, Tony, is now 55% stock and 45% on the bond side. So he's kind of acknowledged that over the last couple of ...
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    13 mins
  • The Lazy Way to Retire? Let’s Talk Target-Date Funds

    The Lazy Way to Retire? Let’s Talk Target-Date Funds
    Jun 19 2025
    Target-date funds just passed $4 trillion in assets. They’re now the default investment in many 401(k)s, and millions of Americans are using them without really understanding how they work. So, are they a smart choice… or just the easiest one? Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript: Marc: Target-date funds just passed $4 trillion in assets. They're now the default investment in many 401Ks for millions of Americans, who are using them without really understanding how they work. So this week on Plan With The Tax Man, let's talk target-date funds. Hey, everybody. Welcome to the podcast with Tony Mauro and myself as we talk investing, finance and retirement. Of course, Tony is the Tax Man, and if you've got questions or concerns or need some help when it comes to today's topic, or any other, make sure you're talking with a qualified professional like Tony and his team at Tax Doctor Inc. You can find them online at yourplanningpros.com. That's yourplanningpros.com. Tony's got 30 plus years of experience as a CPA, CFP, and an EA, so a great resource for you to tap into. Tony, my friend. What's going on buddy? How are you? Tony Mauro: I'm well. Enjoying the summer so far, and as we're recording, that's getting closer to the July 4th holiday, so things are good. Marc: That's true.We'll drop this one this week about two weeks early, and then we'll drop another one, probably right around there. So what do you think about that? 4 trillion bucks, man, in target-date funds? That's a lot of dough. Tony Mauro: That's a lot of money. It seems that clients are starting to ask about them more. Basically, what is it? Do you think it's a good idea? Which is why I wanted to talk about it a little bit just to shed some light on all this. Marc: Because the question is, Tony, is it the smart choice or is it the easy choice? So they were created for that purpose, to be easy, I think. I think that's part of it because... Well, we give some back history here, just a little teeny bit. Again, according to Morningstar, hit $4 trillion in assets. In fact, it says eight out of every 10 Vanguard 401k investors hold one today. So start at the beginning a little bit. What exactly is a target-date fund? Give us just a quick breakdown. Tony Mauro: It's as the name implies, is basically they set a date, and they have all these different funds. So for example, if you're 50 years old, and they have a fund that they put a date on it, so 15 years from now they'll call it the 2040 fund, and then the '45 and on and on and on. Marc: Which we're used to seeing, right? Tony Mauro: That's what you see. And really what they're designed to do, is based on your age, they basically take a portfolio growth-oriented as you're younger, if you've got a lot of time left, and then as you age, it becomes more and more conservative, and shifts on its own to more and more conservative funds. With the theory that is that as you get closer to retirement, you want to take less risk, and you want to make sure that a down little blip in the market two to five years is not going to kill you as far as that goes. So, it makes it really appealing to a lot of investors with this whole thing. Talk about set it and forget it. This fund is that exactly. Marc: It's definitely that. So they call it the glide path, so it's designed. But I think there's some misnomers in there. So part of that, but based on what you were just saying, sometimes people say... Okay, well let's just go with an easy number here, Tony. We'll just say the 2050 fund. So it's 25 years from now, so I've got 25 years before I'm going to retire. I'm set to retire in 2050. So that'll work great, I'll just do that. Again, if you're doing nothing, I think these target-date funds can be cool, but some of the downside is that risk tolerance you were just talking about. First of all, they don't go all the way down to zero. So I think some people feel like there's this, "Oh, well, if they're reducing my risk as I get closer to my target-date, I'll be really, really no risk by the time I get there." And that's not usually the case. Usually, what? It's about 50/50 I think is about where they stop at. Tony Mauro: That's usually what it is, what I see, even in the most conservative, say the last two to five years. And I do think people, because they're marketed as the set it and forget it, they don't really look at some of that stuff. So, while they offer the simplicity and the chance to rebalance, I don't think they're all the same. And I think this is where, rather than... It's better than doing absolutely nothing. Let's get that on the table. But if you're going to use one of those, as many people do, I think you should work with your advisor to make sure that this is something you really want. You need to look at the fee structure you need to look at... Marc: That's another great ...
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    13 mins
  • 5 Ways Wishful Thinking Can Damage Your Retirement

    5 Ways Wishful Thinking Can Damage Your Retirement
    Jun 5 2025
    A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to serious financial mistakes. Today, we’re walking through five common examples of wishful thinking that can quietly damage your retirement and how you can build a plan that protects your future instead of relying on luck. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript: Marc: A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to some serious financial mistakes. So we want to talk about a few ways wishful thinking could possibly damage our retirement this week on Plan with the Taxman. What's going on, everybody? Welcome into the podcast. Thanks for hanging out with Tony Mauro and myself as we talk invest and finance in retirement. Tony is a CPA, CFP, and an EA with 30-plus years of experience, and he is the Tax Doctor at Tax Doctor Inc., serving you all around the, well, Iowa and other areas as well. He's got clients all over the place. But we appreciate your time here on the podcast. And this week, we got a few wishful ways that, wishful thinking ways, I guess, that maybe could damage us, Tony. And there's nothing wrong with being optimistic and hopeful. Well, that's all good stuff. But you want to not kind of carry that so far, I guess, that it clouds your judgment and costs you in the end, right? Tony Mauro: That's right. Marc: Yeah. Tony Mauro: Some of these topics are some we hear all the time. Marc: All the time? Well, we'll try to tackle some of the biggest ones for you. Tony Mauro: Yeah. Marc: You doing all right this week? Tony Mauro: I'm doing good. Yeah. I mean, we're getting ready to spend a little more time outside, although the weather here is cool. Marc: I think it's cool across the country, actually, a little bit. Tony Mauro: Yeah. Marc: In some places. Tony Mauro: A lot of rain and stuff. Marc: Yeah. Tony Mauro: Hoping for something warmer. Marc: Yeah. Yeah, for sure. Well, that's wishful thinking, right? Tony Mauro: That's wishful thinking on my part. Yep. Marc: Well, let's get into a couple of these and talk about it. We got to go with a standard classic, really, financial myth, I think, and that's the wishful thinking thought of, "I'll be in a lower tax bracket once I retire, so that's going to help me out from my cost savings standpoint," or whatever. And Tony, I've been talking with you for years and lots of other financial professionals, and they all tell me the same thing, that more times than not, people are in the same tax bracket when they retire, not a lower one. What's your thoughts? Tony Mauro: That's correct. Yeah, we find that too. It's the same or sometimes even higher depending on what they have coming in and how that is going to be taxed. And I mean, the traditional thinking is that, "Hey, my expenses are going to go way down, my income is going to go way down, and so therefore my bracket will go way down." But a lot has changed even with the brackets. There's not as big of a spread in each one, so they don't go down by that much. But a lot of times, people that have definitely planned and saved and are bringing in money, passive income from retirement sources, that a lot of times is the same or higher income than when they were working, which is a great thing, but they don't drop tax brackets, so we got to be very efficient about taking it out. Marc: Yeah. Okay. And that's the point. So it's the income strategy, where you're pulling it from and at what time, that's going to kind of dictate this a little bit, right? Tony Mauro: Yes. Marc: So that's when you start getting into the, which horse are you riding? The Social Security horse or your own, the 401(k)'s over here that you have or what on pulling out the income gap, kind of shoring up that income gap. Because they don't just, getting to Medicare, when you're 65, they give you Medicare. It'd be cool if they said, "Hey, you're 65. You're automatically in a lower tax bracket." But you don't get it as a retirement bonus. So if you want to be in a lower bracket, you have to strategize for it. Tony Mauro: You got to strategize, and you got to pull money out of the right buckets at the right time which I think is where a planner, if you're working with one, is going to really help you in that regard besides just trying to get the most return for whatever you're doing, whether you're taking some of the principal or just interest or whatever. Marc: What's the culprit that keeps us in that tax bracket the same? Is it typically the RMD withdrawals? Tony Mauro: I find it's the RMD withdrawals and then other income. People will go back and work a little bit. And then what they don't realize is that sneaky Social Security being taxed is that they bring in this income from other sources. And oh, by the way, now all of a sudden, a lot ...
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    17 mins
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