It's week four of our April financial literacy series. This week's focus is on cash flow...for now and retirement.

The Wealth Minute

RMDs & Taxes

I had several new client appointments last week and a common theme with all of them was the impact Requirement Minimum Distributions (RMDs) will have on your tax landscape.

There is a misconception held by many that their tax bracket will be lower in retirement than it is currently. This can significantly impact retirement cash flow planning if left unchecked.

You might be saving for retirement—but are you saving strategically?

Remember that retirement planning isn’t just about hitting a number. It’s about how you’re saving, and what that means for your taxes—both now and later.

Here are some areas of consideration:

Traditional accounts (like 401(k)s or IRAs) give you a tax break now—but your withdrawals in retirement will be taxed as income.
Roth accounts don’t reduce your taxes today, but your future withdrawals are tax-free.
High earners (hello HENRYs!) often get hit with tax creep (also called bracket creep). Knowing where your money is growing (and how those earnings are growing) could save you thousands of dollars in taxes during retirement.

The solution is tax diversification.

Here is another look at the "tax buckets" we discussed last week.

The key is to plan for the impact of your pre-tax and taxable buckets long before you begin to take distributions. Ideally this would be at least 5 years before retirement.

The ultimate goal is to keep as much of your retirement income as possible, without giving half of it away to taxes.

Wealth Move

Take 30 minutes to log into your retirement accounts and check:
- Contribution amounts
- Tax status (pre-tax vs. Roth)
- Are you maxing out your employer match?
- Do you know your projected retirement tax bracket?

The Freedom Path

Which Way Do You Budget?

I had a budgeting conversation with a client this weekend that I thought you might find interesting.

It really doesn't matter how you budget...only that you do.

Here are some options for you to consider this month:

I'm a micro budgeter. I like to know where all money is going. Some may call it control...frankly I do, too. I want to control the knowledge of where our money is and where it's going. Doing so helps me have financial peace. My recommended tool for those who want to keep a finger on the pulse of their money is You Need A Budget (YNAB).
Maybe you want to start with something a little more basic (and that's completely okay). A great basic budget system is to use the 50/30/20 Rule which aligns your money along the three categories of needs, wants & goals.
Or maybe you want some structure, but not as much as a full fledge micro budget. Check out the 40/30/20/10 budget strategy.

The bottom line...pick something. Try it for a month or two and change it if it doesn't work for you.

Your money is too important to leave it to chance spending.