Bridgeriver Advisors, LLC - March 2021

Bridgeriver Advisors, LLC - March 2021

MARCH 2021 Nests Egg

THE

The Charitable Remainder Trust Another Way to Save on Taxes in Retirement

I talk to a lot of people about tax strategies to save money. Back in the ‘80s, when people started putting money into 401(k)s, their strategies were very different. Tax rates were higher and interest rates were higher. People put money into 401(k)s to shelter it from all those high costs.

INCREASING INCOME AND DECREASING TAXES IN RETIREMENT March 2 at Filippas (Utica), 6:30 P.M. March 6 at Filippas (Utica), 12:00 P.M March 23 at Luciano (Clinton Twp.), 6:30 P.M March 25 at Luciano (Clinton Twp.), 6:30 P.M THE SECRETS OF WILLS AND TRUSTS March 30 at Filippas (Utica), 6:30 P.M. April 1 at Filippas (Utica), 6:30 P.M Register today at BridgeriverLLC.com Free dinner or lunch provided.

Since then, tax rates have come down and interest rates have fallen. We’ve come a long way from the ‘80s, and tax saving strategies have changed as well.

But one thing that continually happens is that people start withdrawing money from their 401(k) or IRA and realize the taxes are much higher than they expected. This often happens when retirees take required minimum distributions (RMDs) at age 72. For many people, when they begin withdrawing their retirement money and their tax rates suddenly go up, it can put them in a very difficult position. Not only is it stressful, but they also may end up with less money than they budgeted for or expected. So, a lot of people ask, “What are my options? How can I avoid this?” The available options are limited. One of the most common ways to mitigate the retirement tax bomb is through a Roth conversion. If you convert your traditional IRA into a Roth IRA, you can pay tax on that money at a known rate. Basically, you still pay tax, but you have more control, and when you start withdrawing the Roth money later on (and in retirement) there’s no tax. It’s taken care of, and there are no surprises. Your plan for retirement stays intact. But there is a second option: a Charitable Remainder Trust. This is an option that allows you to set aside non-retirement money — which you can use — but you also name a charity to be included on that trust. You use the money as needed through retirement, then when you die, your charity of choice gets the rest of the money. The primary benefit of the Charitable Remainder Trust, or CRT, is that you receive a tax deduction on that money. It can be a 50%–60% deduction. For example, if you put $200,000 into the CRT, you may end up with a deduction of $100,000–$120,000 depending on your age. You can then use that deduction, dollar for dollar, to offset taxes as you convert your retirement money into a Roth IRA. That is to say, you create a tax cushion for yourself. It’s a two-part strategy, but the savings can be considerable.

If you offset your conversion with the CRT deduction, that’s money you only pay tax on once — and again, it’s at a known rate. After the conversation, you’re left with a Roth IRA and the income generated from your CRT. You’ll still have to pay normal tax on money taken from the CRT, but, as it’s non- retirement money, the tax bill is very small. And if you expect taxes to go up (or your withdrawals negatively impact your retirement strategy) taking this approach is a no-brainer. Ultimately, this puts you in more control of your money. If you want to better understand the CRT and what it might look like for your specific situation, I recommended using a CRT calculator. There are a few online, including IQCalculators.com/calculator/charitable-remainder-trust, or you can simply search “CRT calculator.” In addition to this, you can always call with your questions or concerns. We can help you navigate this approach to saving on taxes in retirement so you have one less thing to worry about — and you can enjoy the retirement that you planned for.

-Dan Casey

248.785.3734 1

AND TRANSFORM YOUR LIFE! IMPROVE YOUR ATTENTION SPAN

Since the COVID-19 pandemic swept across the world last year, many things have gotten shorter, like school days and our patience. But perhaps the main thing that’s grown shorter for all of us is our attention spans. In 2019, researchers from the Technical University of Denmark reported that our collective attention span is indeed narrowing — and it may be because we’re bombarded with tons of information that we don’t want to “miss out” on, whether we’re scrolling through Facebook or finding new videos on YouTube.

gained a lot of attention over the years as a brain workout, and it’s a great way to slowly expand your attention span while accomplishing tasks.

To get started, think of a small task. Then, set a timer to 25 minutes (or longer, if your attention span will allow). Work on your task for 25 minutes straight. Then, take a five-minute break. After the break, repeat the process. After four rounds, take a break of 15–20 minutes. Congratulations, you’ve used the Pomodoro method, which you can repeat as many times as you want. It’s very handy for getting your tasks finished in a flash, despite any attention span issues! Third, meditate, work out, or adopt new educational interests. Anything that keeps your brain, body, and spirit engaged can help you learn how to focus better. There’s plenty of research that shows the benefits of meditation and exercise to your focus — the trick is exploration. Not every form of

Unfortunately, a poor attention span can affect us in many ways. It may impact our performance at school or work or cause communication difficulties in relationships. It may even result in poor health related to self-neglect and an inability to practice healthy habits. How do you fix it? Is it even possible to improve your attention span? Yes, you can! But it will take time. Here are a few ways you can get started. First, accept that you may make yourself a little mentally uncomfortable while expanding your attention span. It simply won’t feel natural to focus on a single task for a longer period of time than normal, but, with a routine, it’ll get more comfortable as time goes on.

meditation, exercise routine, or hobby will work for you, so don’t give up right away! Stay curious and keep exploring. We’re living in a technological age where we can learn almost anything and reach almost anyone at the tap of a button, so we have to learn how to create opportunities for ourselves. We hope these

Second, give the Pomodoro method a try. Named after a tomato-shaped timer that its creator used, the Pomodoro method has

tips help you get started!

2 www.BridgeriverLLC.com

There’s something beautiful about cultivating your own harvest, but you can grow more than simple backyard vegetables. Help your garden “grow up” by trying something unique this spring. Grow Fun Foods We plant gardens for a purpose, so why not make it fun! Plant fresh basil, tomatoes, onions, peppers, oregano, and more to create a garden worthy of your next homemade pizza. All you will need to buy is the crust! Pumpkin plants can offer fresh gourds for any Halloween fanatic, while new species of fruits and vegetables can create an exciting home-cooking experience. Try the silver cucumber for a sweet taste or pineberries for a mix between strawberries and pineapples. You just might find a new flavor you love. Go With the Flow Creating a year-round garden that practically takes care of itself means using principles of permaculture, a philosophy of working with, rather than against, nature. Start by analyzing your space and yard. Determine your soil type and layer mulch or cover crops to protect it. Then, begin planting the same way that’s found in nature — trees grow at the top, shrubs and bushes are below, and other small plants and vines intermingle within. Choose crops that help

each other grow (like corn, beans, and squash), and offer aid to your garden without digging up too much soil or disturbing its natural process. Permaculture gardening requires thoughtful planning, but once your crops are in place, nature will take its course. Plant for Your Health Mass production of your favorite fruits and vegetables reduces their key nutrients. Instead, choose fresh, home-grown varieties to yield greater health benefits. This is good news for those living with heart disease, joint disorders, or other chronic conditions. You can grow a garden chock full of nutrient-rich foods! Colorful fruits, root veggies, onions, and beans are great for joint health, while leafy greens can boost heart health. Grow pumpkins so you can harvest the seeds for better brain function, while berries can support your liver. Before you dig into these new gardening methods, consult with an expert at a nursery or greenhouse to get the best possible results.

DO SOMETHING BETTER IN THE GARDEN 3 WAYS TO IMPROVE YOUR HARVEST

HAVE A LAUGH

Asparagus and Smoked Mozzarella Pizzettes

Inspired by EatingWell.com

Ingredients

• 1 cup shredded smoked mozzarella cheese • 1/3 cup scallions, thinly sliced • 2 tbsp walnuts, toasted and chopped • 1 sprig of fresh mint leaves, torn • Zest of 1 orange 5. Remove both trays from the oven, sprinkle cheese over the dough, then top with asparagus and scallions. 6. Return pizzettes to oven and bake until the crusts’ edges are golden, about 8–10 minutes. 7. Remove from the oven and sprinkle with walnuts, mint, and orange zest before serving.

• 1 lb prepared whole-wheat pizza dough, divided into 6 equal portions • 12 oz asparagus spears, trimmed and cut into 1-inch pieces • 1 tbsp extra-virgin olive oil • 1/4 tsp salt

Directions

1. Preheat oven to 500 F and ensure there are two racks in your oven. 2. Line a large baking sheet with parchment paper, stretch each piece of dough into a 7-by- 3-inch oval and arrange evenly on the pan. 3. On a second baking sheet, toss asparagus with oil and 1/4 tsp salt. 4. Place dough on top rack and asparagus on bottom and bake for 3 minutes.

3

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

40900 WOODWARD AVE., STE. 305 BLOOMFIELD HILLS, MI 48304

248.785.3734 WWW.BRIDGERIVERLLC.COM

INSIDE This Issue Is This Tax-Saving Strategy Worth Your Time? How to Improve Your Attention Span! Make Gardening Better With These 3 Ideas! Asparagus & Smoked Mozzarella Pizzettes 3 Simple Hand Exercises to Avoid Cramps

STOP CRAMPING PALMS With 3 Simple Hand Exercises Hand health is so easy to take for granted — but the minute we start to lose it, we realize just how important it is. If you’re using your hands to type, scroll on your phone, or do other repetitive motions every single day, this can cause problems later on. Luckily there are some simple hand exercises you can do to keep your joints healthy! A quick tip before we get started: If your hands are feeling painful or stiff, try warming them up with heating pads or soaking them in warm water before your exercises. This will make it easier to stretch and move them. No. 1: Finger Stretch You want to be able to use your hands pain-free and with flexibility. Finger stretches help ensure that’s the case for a lifetime. To relieve pain and improve the range of motion in your hands, first, place the heels of your hands on a flat surface. Then, gently straighten your fingers until they are as flat as possible — but don’t force your joints. Hold for 30–60 seconds. Repeat at least four times with each hand.

No. 2: Finger Lift To increase your range of motion and flexibility in your fingers, put your hand in a flat, finger stretch position. But instead of focusing on keeping your hand as flat as possible, try gently lifting one finger at a time before slowly lowering them. You can also lift all your fingers and thumbs at once, then lower. Repeat for 8–12 times on each hand. No. 3: Thumb Touch Almost all of our tasks require some coordination between our fingers and thumbs. That’s what this exercise is all about. Press the tips of your thumb and index finger to form an “o” shape with your hand. Create the same shape with your thumb and middle finger. Hold for 30–60 seconds. Repeat this with the rest of your fingers, then do the whole exercise for a total of four times. Going through this workout routine might seem unusual at first, but considering how important our hands are to our daily lives and communication, you certainly won’t regret keeping them in shape. Happy stretching!

4

www.BridgeriverLLC.com