4 Tax Moves That Can Save You 6 Figures - Part 2 of 2

0:00No gimmicks though, no offshore tax acrobatics, just thoughtful planning, patience, and a willingness to think ahead. This isn't about never paying taxes. You will pay them. I pay them. The point is to pay them on your terms. Quick note before we start today's episode. For the past seven months, this show has been 100 % ad-free. And I know many of you love that. I read your reviews, which often say, thank you for keeping this pure. I also read the reviews on other finance shows that sometimes say, Thank you for killing this show with ads, ya ding-dongs. So yes, I'm highly sensitive to the fact that you are highly sensitive to ads.

0:46But my family recently informed me that they would also love for me to earn just enough from my financial literacy endeavors to buy heating oil this winter. Now, as always, in the spirit of full transparency, there are a few ways I could do that. I could sell a product or a course, but alas, my book doesn't come out until next year, so we're going to have to wait a bit longer for that option. I could charge for the content by creating subscriptions or putting it behind paywalls, which not only goes against my values, but frankly would create an awkward mess of three years of short form videos that have told you I create financial content for free so you don't have to pay for it.

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2:11And if it comes to it, I've been told bloodhounds make excellent heating pads and cuddle buddies. So without further ado, I give you a quick word from our first ever sponsor. And if you've been here for a while, you'll understand why this is such a big deal for me. My main goal always and forever is to help you feel confident, empowered, and simply awesome managing your own money. I've spent years creating free financial education because I genuinely believe everyone should have access to it. And every single day, I still get about 20 emails from people saying, that's great, Tyler, but who would you trust if you weren't a former portfolio manager or someone who wanted to manage their own money?

2:58And without a doubt, the answer is FACET. You all know I've been championing the flat fee model since day one, years before I linked up with FACET, because it's not twice as hard to manage$2 million as it is$1 million, and you shouldn't pay more simply because you have more. What I love about FACET is that you get access to a full team of CFP professionals who help you with your entire financial picture, not just your investment performance. They care about your life as much as your numbers. And to give you an idea of the kind of people they are, because that sort of thing matters to me. When we started working together, they didn't send me the usual swag box with a branded tote bag I'd never use.

3:45Instead, they sent two dog bowls for my bloodhounds. That told me everything I needed to know about who they are and what they value. It's also why I'm genuinely thrilled to have them as the first official sponsor of this show. So if you're 90 % of the way there, but want an expert hand with final allocation strategies, tax planning, or even unpacking your relationship with money and why it might be time for a change, visit facet.com slash Tyler. That's facet.com slash Tyler and see why they're the only partner I have ever brought to you thus far as a resource. Facet is an SEC registered RIA. This is not advice.

4:28All opinions are my own and not a guarantee of a similar outcome. I'm not a member of Facet. I have an incentive to endorse Facet as I have an ongoing fee-based contract for cash compensation, as well as percentage of equity in FACET based on this endorsement. Hello, friends. This is Tyler Gardner welcoming you to another episode of your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing. So let's get started and get you one step closer to where you need to be.

5:07Welcome back, friends. If you're tuning in for the first time today, or if you've missed a few episodes along the way, do yourself a favor, hit pause and go back one episode. This is part two of our series on the smartest tax strategies for your 50s. And I promise it'll make way more sense if you start at the beginning. Otherwise, it's like trying to watch The Godfather Part 2 without ever meeting Vito Corleone. You'll get the gist, lots of whispering, the occasional murder, but you'll wonder why everyone looks so constipated throughout the entire film. In part one, we covered the first four strategies.

5:47Roth conversions, withdrawal sequencing, keeping your taxable accounts tax efficient, and tax loss harvesting. Boring on paper? Absolutely. But I argue they're the broccoli of retirement planning. Not flashy, not fun, but the reason you'll still be upright in your 80s instead of eating canned soup somewhere in the dark. Today, we're diving into the final four. The health savings account triple play. Social security timing and taxes. Charitable giving with donor advised funds. and what's called bracket shifting by gifting to your adult kids. These last four are for people who want to get clever, but not too clever.

6:36Nobody's suggesting you try to outwit the IRS with offshore shell companies or gold bars buried in your backyard. These are strategies for people who have realized that money isn't just about you. It's about family, community, and making sure the biggest heir to your estate isn't the IRS with their handout like an unwelcome wedding guest. And, as always, if this podcast has been helpful, please consider leaving a review on Apple Podcasts or share it with a friend who you think might need it. It helps grow the show, and it helps me justify the fact that I spend my mornings talking about taxes instead of raking the yard, which means we'll wind up with a damp compost heap masquerading as a lawn come April.

7:22Alright, enough stalling. Let's get into it. strategy number five the health savings account triple play this account is without exaggeration the single most underrated retirement tool out there the health savings account or hsa if you've never heard of it don't feel bad the irs doesn't exactly put up billboards that say hey here's the best deal in the entire tax code. They bury it instead somewhere between alpaca wool depreciation rules and line 47 subsection C about tugboat write-offs, which is to say, unless you make a hobby of IRS publications, and if you do, my condolences, you're not going to stumble on this by accident.

8:12But here's why this matters. The HSA is the only account I know of that gives you a triple tax advantage. Contributions go in tax deductible, like a traditional IRA. Growth inside the account is tax-free, like a Roth. And withdrawals for qualified medical expenses are also tax-free, like nothing else, anywhere. That's the trifecta. The IRS basically shrugs and says, fine, this one's yours. And if you know the IRS like I do, I've been reading their bedtime stories, otherwise known as Publication 969, that's about as generous as they will ever get. Now, here's where it gets interesting. Most people who do know about and use the HSA treat it like a glorified checking account for co-pays and prescriptions.

9:08They contribute, they swipe the card at CVS, they move on, which is fine. But it's the financial equivalent of buying a maple creamy, licking it once, and throwing it in the trash. Sacrilege. The smarter move is to treat your HSA like a stealth retirement account. Contribute the maximum every year. For 2025, that's$4 ,300 for individuals, or$8 ,550 for families, plus a$1 ,000 catch-up if you're over 55. Then, instead of spending it, invest it. Yes, you can usually invest the money inside an HSA. Put it in a broad market index fund if your provider allows it. Then, pay current medical expenses out of pocket if you can swing it, and keep the receipts.

9:59Why? Because you can reimburse yourself years or even decades later tax-free. Let's break down an example. You pay$2 ,000 in medical bills this year, and you choose to do it out of pocket. You stuff the receipts in a folder labeled IRS don't mess with me. Fast forward 15 years, your HSA has quietly grown, you're retired, and you decide you'd like to buy that kayak. not the timeshare kind, you pull$2 ,000 out of the HSA, tax-free, because technically, you're reimbursing yourself for that old expense. It's legal, it's smart, and it's exactly why this account is a hidden gem. Now, what if you never use it for medical expenses?

10:49Well, after age 65, you can withdraw from your HSA for anything without penalty. The catch, those withdrawals would be taxed as ordinary income, just like a traditional pre-tax IRA. Which means, at worst, your HSA is basically an IRA in a trench coat. At best, it's a turbocharged Roth for healthcare. And, let's be honest, the reason none of us adore the HSA is that none of us want to think about spending our hard-earned money on healthcare. But, whether or not you're currently on a daily cocktail of AG1, fish oil, and optimism, you will have medical expenses. Fidelity estimates the average 65-year-old couple today will spend around$315 ,000 on healthcare in retirement.

11:41That number will only climb. So pretending you don't need an HSA is like pretending you'll enjoy Vermont winters after 4 p.m. in January. Spoiler, you won't. So, what's the play? If you have access to one and are eligible for one, meaning usually you're part of a high-deductible health program, max it out every year that you can afford to do so, even if it stings. Future you will send present you a fruit basket. Next, invest the balance. Don't let it rot in cash unless you absolutely need it in that given year. Then save the receipts. Think of them as golden tickets for future tax-free withdrawals to spend on anything you want.

12:25Finally, after 65, know your options. Medical expenses stay tax-free. Everything else is fair game, just taxed like an IRA. And one more pro tip, not all HSA providers are created equal. Some will only let you keep the money in cash, which is like storing gold bars in a piggy bank. Shop around for a provider that lets you invest. Fidelity and Lively are two solid, loafy options that I happen to know about. In short, your 50s are the perfect decade to supercharge this account. Sure, you've got fewer years for it to grow than your 20-year-old nephew, but you also have higher medical costs coming down the pike.

13:08So treat your HSA as the ace up your sleeve, not just a slush fund for band-aids and ibuprofen. Strategy number six, social security timing and tax implications. Social security is the elephant in the retirement room, or maybe more like the bear in the Vermont driveway on trash day. Big, unavoidable, and occasionally liable to smash your Subaru if you left a waffle cone wrapper in the cup holder. Most people think about Social Security in simple terms. Should I take it early at 62, wait until full retirement age, or hold out until 70? That's a fine way to frame it. It's the way most hotel seminar speakers in ill-fitting suits frame it, usually next to a PowerPoint slide that still has the stock photo watermark on it.

14:00But here's the wrinkle nobody talks about. Social security is also a massive complicated tax puzzle. Up to 85 % of your social security benefits can be taxed depending on something called provisional income. That's basically your adjusted gross income plus, this is where it gets confusing just for the sake of being confusing, half of your social security benefits plus tax-exempt interest because even muni bonds aren't safe from the IRS's sticky fingers when it comes to Social Security. If that aggregate number crosses certain thresholds,$25 ,000 for single filers or $32 ,000 for married couples as of 2025, you start paying tax on your benefits.

14:49And those thresholds haven't been indexed for inflation since mullets were cool, which means they've aged about as well as mullets. So the decision of when to claim Social Security isn't just about getting a bigger monthly check or even aggregate check. It's about controlling how much of that check the IRS quietly siphons back. And don't get me started on the existential absurdity of paying taxes on money you already pay taxes to fund. It's like buying a round of drinks for your friends and then being asked to chip in again when the bill arrives for the next round. Let me give you two scenarios.

15:23Scenario A, you claim at 62 while you're still pulling money from taxable and IRA accounts. Those IRA withdrawals boost your provisional income and suddenly 85 % of your Social Security is taxable. Not okay. Scenario B, you delay Social Security until 67 or 70 and in the meantime, you strategically draw down your pre-tax accounts or do Roth conversions. When Social Security finally kicks in, your IRA balances, and hence future RMDs, are lower, which means your provisional income and your Social Security tax bill are lower. And one big perk of waiting, Social Security does grow by about 8 % per year you delay from full retirement age to 70.

16:16Yes, that's a guaranteed increase backed by the U.S. government, which is not a phrase I get to say with a straight face very often. Now, as many of you know, I talk about the benefits of claiming at 62. When I do so, I'm usually looking at the aggregate lifetime amount, not factoring in how much might be taxed along the way. That's the catch. If you don't consider the tax angle, you might pat yourself on the back for maximizing benefits early, only to realize you just maximized the IRS's slice instead. But let me be clear, I'm not saying everyone should delay. If you have health issues, a shorter life expectancy, or you simply need or want the income now, claiming earlier, even if taxed, can make sense.

17:03Waiting isn't a moral virtue, no matter how much the Stanford marshmallow experiment scientists wanted to preach that it is. It's just a math problem, and sometimes the math says take the money and run. Here are a few practical moves you might consider. Start by modeling different claiming ages. Use the SSA calculator at ssa.gov slash my account to see your projected benefits at 62, full retirement age, and 70. I've done this. It's actually kind of fun. Next, pair that with Roth conversions. Use the gap years before Social Security to shift money from pre-tax to Roth that lowers future RMDs and reduces how much of your Social Security might get taxed.

17:49Then, mind the brackets. Sometimes claiming earlier keeps you in a lower bracket overall. Other times, delaying helps. Run the math, or if you're allergic to math, get someone else to run it for you. Finally, do coordinate as a couple if you are a couple. Often the higher earner chooses to delay to maximize the survivor benefit, while the lower earner claims earlier. Here's a stat to hammer this home. A study from Boston College's Center for Retirement Research found that about half of retirees claim at 62, even though many might be better off financially and tax-wise by delaying. Why? Because we're wired for instant gratification.

18:37We see the money, we want to grab the money. Again, it's the marshmallow test, only with social security checks instead of candy. But sometimes waiting does pay off, and the key word is sometimes. My mission here isn't to turn you into a compulsive optimizer who spends retirement hunched over spreadsheets muttering about provisional income. It's to make sure you've thought about it, made a plan, and actually set dates for when and how you're going to spend. Otherwise, you'll spend so much time planning to live that you'll forget to actually live. Strategy number seven, charitable giving or donor advised funds slash daffs.

19:21Let's talk about one of my favorite win-win strategies for some of us, charitable giving. On the surface, many of you might think this is not a great money play because naturally, you'd prefer to keep your money. Fair enough. But here's a perspective shift you might consider. Taxes are you giving money away to someone else and hoping they use it wisely, but having very little control in how they do so. Charitable giving, on the other hand, is you giving money away and actually deciding yourself how it might get used. And the IRS, in a rare burst of kindness, gives you a tax advantage for doing so.

20:03Here's the play. Use a donor-advised fund or DAF. Think of it as the Costco of generosity. You make one giant donation in a high-income year, which lets you itemize and take a big deduction that year. Then you parcel out the gifts slowly on your terms to your favorite charities. One Costco trip, many toilet paper rolls. Here's an example. Let's say you usually give$5 ,000 a year to your local food bank. That's wonderful. But maybe this year your income is unusually high. You sold a business, landed a windfall, or let's be honest, finally unloaded that Peloton on Facebook Marketplace for way more than you had any right to.

20:50Instead of dribbling out$5 ,000 a year, you drop$50 ,000 into a DAF all at once. You get the full$50k deduction this year when it really matters, but you can still send$5k to the food bank every year for the next decade. The beauty is you front-loaded the tax break into the year when it counted the most, but your charities still get their steady support. Fidelity Charitable, Vanguard Charitable, Schwab, they all run DAFs with pretty low costs and easy online portals, making this almost as painless as ordering socks from Amazon. And there are a few hidden perks. A close friend of mine used a daff for years, and the thing she loved most was being able to stay anonymous.

21:36She told me, I want to give to the food pantry, not have my name engraved on a plaque next to the canned beans. A daff let her do that quietly, on her terms, and tax efficiently. Note two, for those past 70 and a half, there's also what's called the Qualified Charitable Distribution, QCD. If you don't need your required minimum distributions, you can send up to$100 ,000 a year directly from your IRA to charity. It counts towards your RMD, but it doesn't count as taxable income. That means you satisfy Uncle Sam's withdrawal rules while simultaneously starving his tax bill. That's a strategy worth remembering if you'd rather the money go to your church, alma mater, or animal shelter than the IRS's idea of a rainy day fund.

22:28Now, here's a bracket-shifting bonus strategy. Charitable giving also plays nicely with income bracket management. Imagine you're teetering between the 24 % and 32 % marginal bracket in a big year. By front-loading a charitable contribution into a DAF, you could drop back into the lower bracket, which not only helps this year, but also lowers the effective rate you're paying on other income. It's bracket shifting in disguise, but instead of shoving gains off to your kids, you're shifting income away by being generous. The IRS doesn't get a bigger slice and you get to choose who benefits. To recap, if you're charitably inclined in your 50s and beyond, DAFs are the most flexible and efficient way to give.

23:16Big deduction now, steady giving later. If you're past 70 and a half, QCDs from your IRA are a brilliant way to knock out RMDs without racking up more taxable income. And if you're hovering on a tax bracket edge, charitable giving is one of the few levers you can pull that lets you feel noble and tax efficient at the same time. Done right, it's a rare three-way win. You lower taxes, you support causes you care about, and you keep the IRS from being your biggest heir. Strategy number eight, bracket shifting, aka gifting to the kids. Finally, let's end with a family strategy that keeps some money in-house, so to speak, shifting income to your kids' lower tax brackets.

24:04Here's the basic rule. In 2025, you can gift up to$19 ,000 per person per year without triggering the gift tax. And you can double that if you're married. That means you could move appreciated stock, ETFs, or just plain old cash to your kids, who may be in much lower tax brackets, and let them sell or use the money with a smaller tax bill than you'd face yourself. This is called bracket shifting, and it's perfectly legal. The IRS doesn't like it, but since they wrote the rules, we're simply playing their game, just a little more thoughtfully than they probably intended. A few caveats worth knowing.

24:46For minors, beware the kiddie tax. The IRS noticed parents were shifting capital gains to their 12-year-olds, so now kids pay their parents' tax rate once they cross a relatively low threshold. So this works far better once your kids are adults. Next, trust is required. You need to believe your kids won't immediately sell your carefully transferred shares and buy a jet ski. No disrespect to jet ski dealers, but this is how inheritances vanish faster than you can say Jimmy Buffett cover band. Example, a client of mine once gifted$15 ,000 of appreciated index fund shares to his daughter in grad school.

25:24She sold them to cover tuition, paid almost no tax, and the family as a whole saved thousands. That's bracket shifting in action. Money out of the IRS's pocket and into your kid's future. Think of it as a way to pay it forward while you're alive, instead of waiting until you're gone and letting probate lawyers eat a chunk of it. Just remember the trade-off. If you hold on to those appreciated assets until death, your heirs generally get what's called a step-up in basis that we went over in part one. Translation, they could pay zero tax on these decades of gains. So gifting during your life works best if your kids actually need the money now, not just someday.

26:07Used wisely, it's a simple, elegant way to support your children while minimizing your household's overall tax bill. Used unwisely, it's a down payment on your son's midlife crisis wave runner. And there you have it. Between parts one and two, last week and this week, eight tax strategies for your 50s and beyond spread across these two episodes. In part one, we covered Roth conversions, withdrawal sequencing, tax-efficient investing in taxable accounts, and tax loss harvesting. In part two, we hit the HSA triple play, social security timing and taxes, charitable giving with DAFs, and bracket shifting to kids.

26:52Together, that's a pretty powerful toolkit, and it's a lot to learn. No gimmicks, though. No offshore tax acrobatics. Just thoughtful planning, patience, and a willingness to think ahead. And remember, this isn't about never paying taxes. You will pay them. I pay them. Even billionaires do pay them, albeit with a little more sighing and fewer receipts. The point is to pay them on your terms. Pay them in ways that leave you with more freedom, more confidence, and maybe even enough left over to finally buy the kayak, take the vacation, or splurge on the maple creamy with maple candy crunchies on top.

27:33Yes, I did just say crunchies, and if you know, you know. If this two-part series was at all helpful, please take a second to leave a review on Apple Podcasts or share it with a friend. It's the single best way to help grow the show, and it keeps me from slipping completely into hermit mode, wandering the Vermont woods, talking to my dogs about Roth conversions. Yes, they're patient listeners, but I suspect they're beginning to judge me. As always, I hope this gives you something useful to think about throughout the week and gets you one step closer to where you need to be. Thanks for tuning in to your Money Guide on the Side.

28:10If you enjoyed today's episode, be sure to visit my website at tylergardner.com for even more helpful resources and insights. And if you're interested in receiving some quick and actionable guidance each week, don't forget to sign up for my weekly newsletter, where each Sunday I share three actionable financial ideas to help you take control of your money and investments. You can find the signup link on my website, tylergardner.com, or on any of my socials at Social Cap Official. Until next time, I'm Tyler Gardner, your money guide on the side, and I truly hope this episode got you one step closer to where you need to be.