I Saved A Client $1 MILLION In Taxes...Here's How I Did It
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- Опубліковано 25 чер 2024
- Learn more about our services: www.parallelwealth.com/planning
A few weeks ago we created a financial and retirement plan for one of our clients, but we also found out that their bank had created one for them as well. We realized that with our plan, our clients were going to save $1 Million dollars in taxes PLUS their nominal income through 86 increased by $700,000. In this video, you'll get a good idea of how our financial planning software works...obviously not too many of you will have the amount of assets that are presented in the video, but our planning works for everyone.
If you have any further questions about this video's topic or any financial planning questions in general, I encourage you to find a certified financial planner in your area or book a consultation with us to get your savings plan on track. You can learn more about our services at www.parallelwealth.com/planning or email Info@Parallelwealth.com
OUTLINE:
0:00 - Introduction
1:27 - The Bank's Plan
3:08 - Asset Breakdown
4:27 - Bank's Strategy
8:04 - Bank vs. Parallel Wealth Comparison
13:01 - Parallel Wealth Plan
21:02 - Effective Tax Rates
22:31 - Comparison Summary
25:02 - Create A Cohesive Plan
27:00 - Need A Plan?
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.
School is in session, Professor Adam ... This maybe the most informative video to date, encompasses all of your Video(s) concepts and applies them in a practical example. Congratulations to this couple and to those who watch this video, real talk, real results !!!
Thanks Joe!
@@ParallelWealth do you think thier bank had in mind the upcoming increases to Capital gains inclusion rate changes and therefore meltdown the non-reg securities faster?
@@joevenuto587 if they did they never mentioned to the client
Banks always look for profits first, not client best interest. That’s why I am being the banks’ shareholder. Lol
One of your BEST video Adam !!! I suspect the bank wanted them to liquidate the shares so they could manage the amount for them and,,,,charge them for this ''service'', don't you think ???
You're quickly becoming my favourite UA-cam channel. You provide so much value to us viewers and we appreciate it, fantastic video!
Thanks Andrew! I have no favorite subscriber but I'll add you to the list!! Lol
Excellent Video Adam! Very well done.
Great video! I will have to watch it a few more times to make sure I got it all.
OH boy! This vid will be a super good one...even before I finished looking at it...I appreciate having a look at your program when you use examples.....helps with clarity...I might be calling you next year to sort out the planning...so seeing your program helps. 💯🇨🇦😉
Excellent content, please more videos like this with real life examples, And you’ve explained it so well and easy to understand, I’m a novice with financial education but it was plain to see right away what the bank did wrong, I have zero faith with banks as i see the financial advisors there as simply trained salespeople, it’s good to know and hear about your company and will be reaching out to you
excellent recommendations.
Good advice Adam
I can't believe that the bank would tell him to sell the stock all at once. Great video. Thanks
Awesome video Adam…. Really enjoyed this one, as it put all the pieces together you’ve taught us in previous videos.
As mentioned by others, it would be great to see more of these ‘real life’ examples for various financial scenarios.
Two thumbs up, as always! Cheers
Awesome! Fingers crossed...
Excellent!
In any business dealing, it is essential to understand how your counterparty is compensated. This is an excellent example of why fixed fee for services such as those proposed by Parallel Wealth is better for the client. If you were to include another column, bank management fees, it would show that your solution involves significantly lower money management fees, so more money in the hands of the client. Your interests are aligned with those of your clients. Money managers live on fees. It is hardly surprising that they have a vested interest in maximizing fees.
Great video Adam. We had a financial plan done by another fee for service (not a bank, I won't mention them publicly), and was very disappointed with their plan, had the same tax rate bouncing around (big tax bill at the start, barely paying taxes for several years and then surge in taxes in late retirement). They never mentioned any concepts of having different phases in retirement. We'll be contacting you in the new year to do our plan.
Excellent video Adam. Too many people focus entirely on the size of their retirement portfolio while ignoring the fact that expenditures and taxation efficiency are just as important.
😮🎉
Bank plan was working in their interest as always. Bank plan does not care how much tax the client paid. It helps a lot with tax planning when an individual does his own tax return. It was a good analysis between the two plans.👍👍👍
Good video. Been looking at this specific topic - what to pull and when to pull to live well but not get killed in taxes.
It's a fine line and too many people do it wrong!
Excellent video - even better than usual. I especially appreciate your editing skills which really helped to allow us to follow along without being distracting. So many people are focused on the accumulation phase of retirement and the decumulation phase is just as important if not more.
Much appreciated!
Even I, as an untrained person can see the fault in the bank strategy. Banks work for banks...period.
Excellent video! You clearly demonstrate the added value of your holistic approach. I continue to enjoy your videos and your clear, straightforward way of presenting information. I was somewhat critical of your video on capital gains changes and you were kind enough to reply to my comment. I have developed a great deal of respect for you over the past year. Do you provide retirement plans for Quebec residents? Keep up the good work!
Thanks Thomas. Yes, we help Canadians across the country.
This was PERFECT! The nuts and bolts of estate planning..."in action." No worries about bouncing around between you and your program..it was really well balanced so that one "doesn't get dizzy!" LOL. Adam, really appreciate your presentation. Clearly, next year I will have to use your services and get a comprehensive plan in place. 💯👍🇨🇦 Stay safe....the pandemic isn't over yet! 😷💉 booster time soon💪
Great content, can you do a similar video where the plan has to take into account a large inheritance somewhere in the middle of their retirement
This was an excellent video. You've convinced me to have our financial advisor to update our plan in the new year and then we'll engage Parallel for a second opinion. Regardless of outcome, the peace of mind will be well worth the fee. Thanks for providing the push I needed .
Here when ready Jeff! Glad the content is helping.
This is why I don't keep my money investing in a friggin bank or use their "financial planners". What a joke. Thank God there's people like you Adam.
Thanks Angry Bird!
This is why you invest in Canadian banks stocks. Excellent video, very well explained.
Adam - First move for Easton should be to move 100% of the savings account (earning 1%) and put it into his TFSA it has full room and earns 6.5% with no taxes! I don't understand the strategy to leave the TFSA room mostly untouched and slowly draw down his savings account?
Lazy plan vs a strategic plan
I’d say that the bank totally had their own interest in mind, however they may believe single stocks are too risky at that % of their portfolio in retirement but they should have presented both plans.
Agree. If the stock tanks during the 15 or so years to draw it down, there goes the $700k that we "saved". Educational still and great food for thought!
Hey Adam, great video! What is the planning software used in this video?
Snap
great video. thank you. and the reason i’ve chosen to work with a fee for service advisor. out of curiosity, do you work with clients in quebec?
Yes we do
Nice video. I like the overall plan for RRSP, TSFA and CPP/OAS. The bank plan didn't do a good job of minimize tax burden. I like your approach of balancing tax rate for each year. However, the risk of owning one stock at such large amount after the retirement is high. Even it is a relative safe stock, there is still market risks. What if the market is the down for the next few years? Planning a market return of 6.5% per year every year for 30 + years might be an over simple approach. Hope you can plug in various real market returns, and provide the best and worst scenarios.
We ran a Monte Carlo for the plan and worked just as well. It's a fine line of divesting the diversification, as well as not paying too much tax! Thx for watching
When you do income splitting, is your OAS calculated after the split ? I assume it is, just never thought about that until right now.
To cash out the stock in the banks plan is pure incompetence.
Man I wish I had these people’s problems. Very interesting advice though…😊
You and me both!
Great video! But where are they putting the money withdrawn from TFSA and RRSP? You have explained the strategy of pulling out the money to reduce taxes but where do you recommend putting the money when you draw it out? If you re-invest it there will be additional taxes on this that need to be taken into account.
Living on it.
Thanks for the video. To be fair, I don't think you can compare your plan to the bank plan without disclosing the name of the company stock. The bank appears to be more aggressive selling the company stock perhaps to make more money off this customer by investing into one or more of their products or because they believe the stock value will fall in the near future.
Having said that, I prefer the Parallel Wealth plan just based on the consistent tax rate every year.
Let's just say they aren't selling the stock because it's a bad company....they would own it in every mutual fund they sell.
Thanks for the video. To be fair, the total tax savings is closer to $0.5 million not $1 million. You have to look at the at age 96 picture. Of course I don’t think this analysis takes into consideration the time value of money (except on the PV income) So tax paid early on in retirement is more detrimental than deferring to later, which is why the tax paid to age 86 is an important consideration. Overall, good job Adam.
We use nominal dollars, so it's inflation adjusted. 86 is life expectancy. As accurate as can be.
5:54 There's Easton/Everly's real problem lol. Anytime a bank wants to sell all your stuff and move it all into their own bank-managed funds, that's a huge red flag.
Of course, dumping all that stock at once and incurring a massive 50% tax bill would lock in that tax forever, while slowly drawing it down at 25% simply makes more sense (provided the company is solid and the stock price remains stable or increases).
Hey guys,
Do you consider stock portfolio margins account when you calculate the tax of what's pulled from the non- tax-advantaged accounts?
For exemple if I have a portfolio of 10M with a 3M margin at 1.5% rate, instead of pulling money that's gonna be taxed at 20-25-40-50% pull it from the margin and pay that tax bill in the form of interest in 10-30 years?
Thank you.
Don't see or recommend margin in retirement.
Wondering if there is a possibility that, in the near future, liquidating the stock portfolio at the beginning will make sense to lower overall taxes if the government changes the capital gains tax structure?
And look at what just happened lol.
What is the software that you use for the calculations?
Snap Projections
Please advise. If i trade eg. Options on margin, how do i deal with taxes. Should i open a business in my name? Because i am thinking the taxes will be too high.
Find a good tax accountant.
WOW, this client sure got his money's worth in coming to see you. A few things not sure I understood, I was under the impression that you could convert your RRSP into RRIF anytime and then income split that with your spouse without having to wait until 65 to do so. Not sure I understand the strategy of eliminating his stock portfolio. Most likely averaging $100k in (taxable) dividends alone each year if this is from one of the banks or Telcos, so why 'eliminate' this milk cow that will just keep giving steady income?
RRIF only income split after 65
Banks don't care about anyone but themselves. Doesn't surprize me they gave this kind of advice. Suggesting mutual funds is a huge conflict of interest in most cases and they just solve by issuing a generic statement. How is this legal? Anyways great to see these people had the sense to get another opinion. Very insightful video.
seems they withdraw their stock account RRSP RRIF LIRA TFSA, can you explain a bit more where the estate 4.6M coming from? thanks
Real estate
Do you maximize the inheritance left
Yes
Your plan seems silent on a repayment plan for their HELOC. Are they going to be in debt forever?
This client was in no rush to pay down debt as they knew the assets were there if rates increased. The debts are all paid by 77 though. Debt repayment is client specific - around goals and appetite to pay it down.
Does Income splitting start when the older spouse turns 65 or when the younger one turns 65? Asking as my wife is almost 7 years younger than I am.
You don't have to be over 65. I used to split my ex partners pension income (retired at 47 from military with a very big pension). I was only 46 and he was 47.
I was watching with interest but it Looks like these advices are for rich people . Which really do not need too much help:) How about The rest of us:)?
Adam gives a lot of free advice through many budgets examples across his videos; this video in particular illustrates the extent of damage a bad ( conflict of interest) advice can do.
@@danb.4128 Thank you
Does the tax savings of $997K reflect that much of the tax would incur early in retirement with the bank plan as compared with the PW plan. When factoring that in the contrast becomes even more stark. Secondly, could you not convert holdings in one stock to holdings of another investment without triggering such a large tax bill?
I don't think so. He had nearly a 2M gain.
Pretty obvious the bank wanted their money in the bank portfolio
💯
Great video...but what happens if you used a more realistic rate of return? 6.5% is a really crappy year for most investors. Shouldn't tht at least be 10%...heck the S&P has averaged close to 11% for the past 100 years!
It's even a bigger benefit on our plan.
@@ParallelWealth Totally agree, just need to make sure they are drWung that extra income too or it all just goes to taxes at death.
i think 6-7% with a high percentage equity portofolio is reasonable, even john bogle think this is reasonable, esp, with recent years double digits return, you know what that mean: future lowered expected retrun. So using 6.5 seems perfect for me for the next 30 years.
@@ybc8495 6.5% is great if you are in a ZERO risk kind of life...but accepting even a tiny bit of risk will get you 10 - 12% by simply investing in the S&P 500 index fund (Again it has averaged over 10%/yr for over 100 years!). This year I'm up 65% so far and I consider it a very low risk investment. For reference...a 6% annual return will double your investment in 12 yrs...a 10% annual return will double in 7 years...so you can basically triple your investment if at 10% over the same 12yrs it would take to double at 6%.
@@dankarau2307 I have 400K emergency fund other than that I am 100% Stock as always; 50% US INDEX 22% CANADIAN INDEX 22% developed INDEX, 6% Emerging INDEX. this year only the emerging market is down. I think over all is 15-18% UP. I am expecting my 100% stock will perform 6.5% after tax in the following 30 years. after inflation maybe 3.5%?
I noticed your software had no room for RDSPs. I realize disabled Canadians are a minority of your potential customer base. However, RDSPS have been around since 2008, just a few years difference from TFSAs, but yet aren't in the software. Disabled Canadians deserve financial planning too. I wish you and your industry were more proactive in that area.
Planning software can incorporate it. Just isn't in this illustration. There are planners in Canada that only work with RDSPs - so check around a bit more and you should be able to find lots of support.