Red Barn Financial Podcast

Ep. 34 Do This before filing an income tax extension

Can you file a tax extension if you owe money?  Learn more in this episode on how you can avoid gettting charged penalties and interest and how you should meet the IRS requirements of an extension.

Need more help?  Contact us at smoran@redbarnfinancial.com call us at 615-619-6919 or learn more at www.redbarnfinancial.com 

Disclamer:  The contents of this podcast is not tax, legal or investment advice.

If the IRS is auditing you or you have a tax liability you can't pay right away, don't make these common mistakes that can cost you dearly.

You need to file your tax return on time, especially if you owe money.  If you don't owe money then the deadline isn't all that important in the short run.  The reason why it's so important to file on time is to get your money back right away or to avoid penalties and interest that can end up costing you more than the original tax liability if you ignore it.  

Following some of these ideas might help keep more money in your pocket and solve your tax problems once and for all.   The worst thing you can do is ignore the IRS and the best thing you can do is give them just the information that they need to verify your income and expenses.

Ep. 32 - Is This What Social Security Was Meant To Do?

The other day on Reddit someone commented that Social Security is meant to provide you with a full retirement.  I had to laugh.  Social Security was meant to be a suppliment to your retirement savings.  Back in 1935 when Franklin D. Roosavelt passed it into law most people had work pensions and most people were expected to save for retirement.  Social Security was designed as a safety net to keep people out of poverty, not to be their retirement plan.

In this episode we explore statistics on how many people are contributing to social security for each person collecting it as well as the fact that it's current workers that are funding the social security of those receiving it currently.

Check out this episode in full to learn more and what it means to you.

Want help with your retirement planning?  Contact Red Barn Financial at www.redbarnfinancial.com, call 615-619-6919 or email smoran@redbarnfinancial.com 

Ep. 31 - Starting Your Dream Business with Ashley Smith

In this podcast episode I interview Ashley Smith owner of Ashley Anita Photography.

Ashley shares her journey so far and how she is turning her passion into a business.  Her unique take on photography and why she believes it's important for people to print their photography.  

She makes a great art out of what she does.

To learn more or contact Ashley you can find her here:  

615-947-4122

instagram.com/ashleyanitaphotography 

https://www.facebook.com/profile.php?id=100083166550329

email: contact@ashleyanitaphotography.com

Should You Live Like Chad "Ochocinco" Johnson?

In a recent interview, Chad shared how he saved all of the money he made playing football and the reasons why he avoided a life of excess.  He explained that he lived at the Cincinnatti Bengals facility for the first 2 years of his career, wore fake jewelry and lived a modest life.

What are you doing to live within your means and create a life of stability for yourself?  The rich aren't rich because they make a lot of money, they are rich because they keep it.

I talk through a bunch of things that Chad Ochocinco Johnson did and what he continues to do to be financially responsible. 

If you want to hear his full interview with Shannon Sharpe - seach for it on your favorite podcast platform.

If you need help to get you where you want to be financially, feel free to reach out to Red Barn Financial at www.redbarnfinancial.com, by calling 615-619-6919 or by emailing Sean Moran at smoran@redbarnfinancial.com 

Episode 29 of the Red Barn Financial Podcast - Don't be a Retirement Statistic - What You Need to Do to Prepare

Did you know that 51% of US households are at risk of not being able to maintain their current income in retirement?  The average household retirement savings is under $100,000 and only 55% of households ages 55-64 have a retirement savings account?

These are dangerous statistics and they could mean you leave yourself and your family in a state of poverty, or at a minimum in a position where you can't live the retirement life you were planning?

Be encouraged as there is hope as long as you start planning.  You are more likely to find success when working with a financial advisor than trying to do it on your own, but please get started as soon as possible.

If you need help, please email us at smoran@redbarnfinancial or call 615-619-6919 You can learn more about Red Barn Financial and whether we are a good fit to be your financial advisor at www.redbarnfinancial.com

Did you know that 70% of wealth is lost by the second generation and 90% is lot by the third?    In this episode of the Red Barn Financial Podcast, I dig into reasons why that may be the case.  

Generational wealth is wealth that is handed down from one generation to the next and it is often squandered.   We will talk about this today and I invite you to share your thoughts and perspective on the topic.

Proverbs 13:22 is the reference to leaving wealth to your grandchildren.  The parable of the Prodigal Son in Luke 15:11-32.

Disclaimer:  Information in this podcast is for educational and informational purposes only and is not tax, legal or investment advice.

If you would like to speak with a financial advisor, please reach out to us at www.redbarnfinancial.com or call 615-619-6919

How much can you contribute to your IRA in 2023.

It's important to know that you can contribute to an IRA or Roth IRA even if you have a work plan such as a 401(k) or 403(b).

For the general popluation you can contribute to an IRA and/or Roth IRA in any combination up to a maximum total value of $6,500 for 2023.  If you are age 50 by December 31 of the year you can save an additional contribution of $1,000 for a total of $7,500.

There are some income restrictions as to whether your IRA will be tax deductible and if your income is above a certain amount you are not permitted to contribute directly to a Roth IRA.  This is when a backdoor Roth could make sense for some.

Listen to the podcast for the specifics on the IRA and feel free to reach out to Red Barn Financial if you have any specific questions.  You can find all of our contact information at www.redbarnfinancial.com 

Disclaimer:  the information in this podcast is for general education purposes only and is not tax, legal or investment advice.  Please speak with a licensed financial advisor who can evaluate your specific situation before making any financial decision.  

Ep 26. How Taxes Can Impact Your Retirement Planning

In this episode we discuss how considering your tax bracket can impact your financial planning and help you minimize taxes going into retirement starting now.

In the example I share, I talk about a married couple with income of $400,000 and tax deductions of $30,000.  With a taxable income of $370,000 they are in the 32% marginal tax bracket, but their effective tax rate is just over 20%.  You can see that in the below example.

Disclaimer:  This podcast is for information purposes only and does not constitute tax, legal or investment advice.  Consult a financial advisor with your questions.

If you would like to learn more about Red Barn Financial or learn how we can help you, please visit www.redbarnfinancial.com

Episode 25 Are you funding your 401k the right way?

Often times people will think they are maxing out their 401(k) when they are really just putting in the amount needed to get your company match.   Other times people will put in the full IRS maximum ($22,500 in 2023) but they are not getting a match after a certain amount, so that additional contribution - while good - may not be as efficient as contributing to an IRA or Roth IRA once you have hit the most your company will match.

In other words if you plan on contributing $15,000 to retirement accounts but your company only matches the first $6,000 it likely makes sense to contribute the next $6,000 of your money to an IRA or Roth IRA so you have more control over your investments.  Then you can go back and put the last $3,000 into your company plan again.

Disclaimer - Information provided in this podcast is not tax, legal or investment advice.  Every person's circumstances are different.  If you would like to discuss your personal circumstances, feel free to reach out to Red Barn Financial.

Ep. 24 - Before You File Your Tax Return - Do This

It's important to look at your prior year tax returns as well as look at 2022 so you can see how each year compares.  Each tax return tells a story of your life situation explaining what happened to you in that year financially as well as what things looked like in the past and gives you an opportunity to look at what future years might look like.  

We should look at our tax returns like a report card.  Did it reflect what we wanted and if now, how do we make the future look the way we want.  Also, does the return tell the story we expect it to.

Disclaimer - The information provided is for educational purposes only and does not constitute tax, legal or investment advice.  Please contact Red Barn Financial if you would like us to help you with your financial planning.  Contact 615-619-6919 or email smoran@redbarnfinancial.com   You can learn more about us at www.redbarnfinancial.com 

In this week's podcast we return for 2023 with a lot to share.  We will start off with the latest legislative news and that is the SECURE Act 2.0 where Congress made it so that we can save more for retirement.  Here are some of the provisions in this new law.

Auto Enrollment and Portability

This legislation requires new 401(k) plans (as well as 401(b) plans) to automatically enroll employees in the company plan and start them off at a 3% contribution rate. This means that you will not have to opt in, but rather your retirement savings would start right away. This provision would take effect in 2025. It would also make it so that if you have a small balance in your account when you change jobs to have the custodian manage it for you. This makes it easier for you and less tempting to cash out.

Student Loan Retirement Match

So many people who have significant student loans aren't able to save for retirement early on, because their debt is too high. Before this law was passed if you chose not to make contributions to your company plan because you couldn't afford it, you didn't get a company match because you didn't contribute anything for them to match.

SECURE Act 2.0 allows companies to make a "matching contribution" to your retirement plan commensurate with your payments of your student loans. For example, if your company matches 50 cents on the dollar for contributions to your 401(k), now for every dollar you pay on your student loans would allow your company to put 50 cents into your retirement account.

529 Convertibility

In the past if you didn't use up all the money in your 529 college savings plan you had to contribute that to another person for them to use. So, if you had one child and they didn't go to college they wouldn't get to use the money you set aside. Now that will no longer be the case. Under the SECURE Act 2.0 up to $35,000 can be contributed to a Roth IRA subject to the maximum annual contribution and is treated as a contribution to the Roth IRA.

RMDs

Required Minimum Distributions are amounts that retirees need to take out of their retirement accounts so that the IRS can tax the money that they have waited years, even decades to tax while it was sitting in your IRA, 401(k) or another plan. Prior to the SECURE Act of 2020 the age where you had to start taking withdrawals whether you wanted to or not was 70.5. When the 2020 law took place that moved the age up to 72 and in SECURE Act 2.0 it gradually moves the age up to 75.

• Born in 1950 or earlier: RMD begins at age 72
• Born between 1951-1959: RMD begins at age 73
• Born in 1960 or later: RMD begins at age 75 

Also starting in 2024 RMDs will not be required for Roth accounts any longer.

Qualified Charitable Distributions (QCDs)

A QCD is a distribution from your IRA to a charity whereby you can meet your RMD requirement, but not pay taxes on the amount donated. For example, if you were to give $100,000 of your RMD to a qualified charity, you would not have to pay taxes on that money. This could save you a significant amount of income tax, because if you were to take the RMD into your own bank account you would owe income tax on that amount. Assume you were in the 22% tax bracket that means you save $22,000 by doing a QCD instead of taking the money into your own hands.

Starting in 2023 the $100,000 limit for QCDs will be indexed to inflation, so the amount you can give will go up every year. While this isn't something everyone worries about, it's great for those who do.

Increase in Catch Up Contributions

You may be aware that once you are age 50 you can add additional funds to your 401(k) or IRA accounts so that you can save more money and "catch up" for lost time by saving more when likely you are earning more.

Starting on January 1, 2025 if you are 60 through 63 you can make a catch-up contribution up to $10,000 to your workplace plan. The current law for 2023 is $7,500 into those accounts. The one caveat is that if you make more than $145,000 in the year prior, your catch-up contributions will need to be made to a Roth account as opposed to a traditional account. Hopefully this will prompt more companies to offer Roth accounts.

For IRAs, you can currently make a $1,000 catch up contribution if you are age 50 or over, but in 2024 that will be indexed to inflation, so it will likely go up every year.

Roth Matching

Going forward employers will be able to make matching contributions to Roth accounts. In prior years you could only get a matching contribution on contributions to a traditional plan. The funds that are matched would be taxable, but future growth would be tax free.

Disclaimer -  All content provided here is for informational purposes only and should not be considered tax, legal or financial advice.  Everyone's situation is different, so if you would like to speak about your particular situation please contact us at www.redbarnfinancial.com at smoran@redbarnfinancial.com or by calling 615-619-6919 

In this episode I talk about the year 2022 in review as well as what 2023 might look like from an economic perspective.  Later this week I'll post an update to this episode to talk about some new information to add to what you are getting here.

Learn more at Red Barn Financial at www.redbarnfinancial.com

What are your 2023 financial goals?

Disclaimer - Information provided on this podcast is not tax, legal or financial advice.  Everyone's financial situation is different.  Please consult a financial advisor prior to making any decision that will impact your financial future.

Barter Is Better - An Interview with Ed Fox 

Edward Fox is a serial entrepreneur who started his own businesses when he was a little boy and has grown many successful companies over the years.  Ed talks about the value of barter and his business TradeBank that allows you to sell excess inventory and services on their platform and exchange your value for something you need.  It can help you grow your business and opens doors to helping others along the way.

Learn from Ed and the things he has done as he shares his story of success as an owner of many businesses and why he believes barter is a key to business growth. 

If you want to learn more about Tradebank check out https://nashville.tradebank.com/

The opinions shared are those each individual.  The information shared on the Red Barn Financial Podcast is for entertainment and informational purposes only. Nothing provided herein should be considered tax, legal or financial advice.  If you would like to connect with a financial advisor contact Sean Moran at smoran@redbarnfinancial.com or call 615-619-6919.  Learn more about Red Barn Financial at www.redbarnfinancial.com

When planning out your retirement spending it's important to make sure your money will last as long as you do.  That means you want to make sure your money lasts longer than you will.  

One of the ways to do this is to put your money into several buckets.  The first is your cash bucket.  This is 2 years of living expenses so that if the market goes down you don't have to be drawing from your investments in a time that they are going down.  For example, if you need $100,000 in a given year and you take that from a $1million portfolio you are drawing 10%, but if that portfolio goes down to $500,000 in a down market the same $100k is now 20% of your money and it will be difficult to build that back.  In times when the market goes up, you can replenish your cash bucket and your interim bucket. 

You will likely want your cash bucket to be the money you absolutely need to live on for the next 2 years, then a fixed income bucket with bonds, CDs and/or annuities that have downside protection to be in the middle bucket.  It is money that will earn more than the cash accounts, but will still be relatively safe.  This can also be money that is your "fun money" and if you need to cut back on a vacation or skip a splurge purchase or put off a car purchase for example, you can do that if the market looks like it will take longer to recover.   Finally you have your equity bucket which is more risky and should have your 5+ year investments.  This way if the market goes up significantly, you can take some of the earnings, but if the market goes down you can put more money in there as opposed to having your money you need to live now at a fraction of what it was before.

In this episode I talk about Dividend Reinvestment Plans or DRIP plans and how they can benefit you.  We walk through two examples of how you can grow your investment by reinvesting the dividends you get from your stock holdings back into the stock.  For illustration purposes we assumed the stock price and the dividend amount stays the same so that we can easily show how the dividend grows your number of shares and in turn more dividend dollars coming your way.  We used Verizon and Apple as two stocks that have a different result when it comes to using the DRIP strategy, with Verizon producing a more significant impact that Apple would for this strategy.  That doesn't mean that one or the other stock is better or worse, just different depending on whether you want to implement a DRIP strategy.

Here are the numbers: 

Here is the Apple Numbers:

Disclaimer - These companies are used for example purposes only.  Results may vary depending on stock price, dividend changes and market conditions.  The Red Barn Financial Podcast is for informational purposes only and should not be considered legal, tax or financial advice.

Too many people look at their taxes in the new year and they ask "What can I do to lower my taxes".   By that time it's often too late.  Instead plan ahead and be sure you have yourself set up for success before the year is out.  

You can do the following things and more to make sure you optimize your tax situation.

1. Update Your Withholding on your paycheck.  Get more today so you don't give the IRS a large interest free loan

2. Prepay Your bills if you are a cash basis taxpayer.  You may want to pay medical expenses, property taxes or even tuition to get a tax deduction

3.  Use tax loss harvesting techniques and maybe even harvest some gains.  You can net capital gains and losses to potentially save yourself some taxes. 

4.  Contribute more to your retirement plan - Whether it's your company 401(k), a SEP IRA or traditional IRA or maybe even a Solo 401(k) make sure you take advantage of the options available to you.  In many cases you have until April 15 of the following year to do this, but not with a company plan, so get those in before year end.

5. If you have a small business or side hustle, make sure you are taking full advantage of tax deductions available to you.

6. Giving to Charity - whether it's cash or household items or even real property, you can save money and make a solid impact.  Check out epidode 14 for more on this.

In this episode of the Red Barn Financial Podcast I have the pleasure of interviewing Melanie Harper and Tabitha King - the Founders of Authority Title and Escrow.  Melanie and Tabitha detail their experience on the journey to create their company and being business owners.  They explain how important it is to have the right team in your corner making sure your title is free of encumberances and making your closing smooth and easy.  

They give examples of things that can go wrong if you don't have a diligent team and the nightmares that others have seen. They also talk about the importance of building your business credit  and how they have made sure their clients avoided some of the issues that others have experienced.   

If you would like to connect with Melanie or Tabitha for your property closing or want to learn more about their business you can find them at https://www.authorityclosings.com  Authority Title and Escrow has offices in Murfreesboro and Nashville.  You can call them at 615-819-5880 or follow them on Social Media on Instagram at https://www.instagram.com/authoritytitleandescrow/ or on Facebook

In this episode I share what Red Barn Financial is all about.  Why I created Red Barn Financial and where the name came from.   I share Proverbs 3:9-10 which is the foundational verse upon which the firm was established and it's the promise that was given to me to share with others in my financial practice.

Proverbs 3:9-10 (NIV) says:  ⁹ Honor the Lord with your wealth, with the firstfruits of all your crops; ¹⁰ then your barns will be filled to overflowing,
    and your vats will brim over with new wine.

In this verse, God makes a promise to us that if we honor Him, then He will provide us with more than we could ever give to Him.  We do this as a way to show that we love Him and we love His people.  

Learn more about Red Barn Financial on our website at www.redbarnfinancial.com

In this episode of the Red Barn Financial Podcast I explore the alternatives to investing in your 401(k) or other work plan.  While your 401(k) plan is a great investment option when the company offers you a match, it may not be the best place to invest money that isn't being matched. 

There are two reasons why you may want to invest money that isn't matched in your company plan outside the company plan:

1.  It's quite likely that your company plan fees and investment options are costly.  For example if you are paying 2% in fees, that means your investments need to go up 10% for you to net 8%.  What are you getting for those fees?

2. You are limited to what the company chose as investment options for you.  If they picked 10 funds, you can't invest in individual stocks, other ETFs or mutual funds that you like and might be less costly for the same investment.

I share some alternatives like investing in a Roth IRA or other deferred compensation plan as well as looking at a brokerage account as another place that you can store up as much money as you choose to save.  Then there are life insurance products and if you own a business you can choose a deferred compensaiton plan.