Allison Demurs: Welcome to today’s CT Buzz. I’m Allison Demurs. Ben Fuchs, founder of Fuchs Financial, is here to talk about retirement and taxes, particularly if it’s starting to look like you’ll be paying more taxes for 2025 than you expected. As you’ll hear, his advice is that you should act now so it won’t happen again next year. In addition to being a certified financial planner, Ben is a certified private wealth advisor professional. Fuchs Financial has a team of trusted advisers recognized for helping Connecticut families plan and retire with confidence. Ben, walk us through some of the ways you work with people so that they won’t be surprised with taxes that are higher than they expected. Ben Fuchs: Well, it’s always fun. And when we hear it’s tax season, we expect like balloons and parties and everything going off because how wonderful of a time. Well, so the first thing that we do is we take a look at their actual tax return. You know, what is causing the taxes? Is it interest? Is it capital gains? Is it just coming from your W2, from the earned income that you have? And then we can figure out ways to mitigate some of that tax. There are different things that we can do where we can change the structure of some of your investments. We can move things around to different areas, especially while you’re working and making more income than you’ll be when you’re retired. But it all starts with like analyzing the plan. We do that free consultation. And in that free consultation, it’s so important to bring that tax return so that we can actually do the work for you. Allison Demurs: Yes. And they can make some money instead of spending money. Oh, okay. So what are some of the ways that you can accomplish that? Ben Fuchs: So we had a client the other day that came in and had a lot of money in interest. Good problem to have—a lot of money in the bank getting CDs getting like 4%. And he had like $80,000 of interest. And so over time we removed those to different investments where we were deferring some of that income. So, you know, he didn’t care about what his heirs were paying taxes. He just didn’t want to pay them himself. Don’t blame him. Don’t have a problem with that. If I’m inheriting money I guess I’ll pay the taxes. Boohoo. [laughter] So that was his point of view. And so because of that, you know, we started to begin to slowly move that money over to a place where he wasn’t paying that. And we didn’t get all of it, but we were able to reduce that taxable interest down from 80,000 to 20,000. So we took out $60,000 of taxable income just by changing the structure of investments and getting him a slightly higher rate of return as we did it. And he was happy. He was very happy. Allison Demurs: I’ll bet. You talked about scenario-based planning with us. How does that work? And how does it help your clients make decisions about their finances in retirement? Ben Fuchs: So taxes are really important, but taxes aren’t the only thing. You can pay no taxes if you make no money, but that’s not the goal. So we need to blend taxes with investments and create a plan that you can see. So, you know, the first thing that—I’m a very visual person. If you tell me to do something and I don’t understand why, I’m probably not going to do it. So we like to show our clients why. Here’s what your scenario looks like. Here’s the recommendations that we’re making, and this is your scenario. Here’s what we’re going to do. Now, if we were to say take Social Security later, let’s show you that scenario. Let’s do our planning based on that. And then we can look at the why, right? Do we end up with more money? Are we getting more income? Are we paying less in taxes? How does pulling one lever impact the taxes that you pay, the income that you have, how long your investments last, what you have at 100—all that is important stuff. Allison Demurs: Yes. So what are some of the other factors that can impact not only taxes but the money that people have available to them in retirement? What else should be considered? Ben Fuchs: Well, I mean, you know, as people get closer and closer to retirement, it’s important to increase your savings rate. I mean, listen, if I don’t have money to work with, I can’t do a lot of help. So, the important factor is how much can you comfortably save? And once you’ve gotten to that point where, all right, you know, we’ve gotten through the hurdle of paying for daycare and we’ve gotten through the hurdle of paying for college, now we’re at that point where we can really save. We need to make sure that we’re doing that and not just changing our spending habits. And so increase that savings rate as you get closer to retirement. That does a couple things. It can reduce your taxes, it can get you used to spending less, and of course give you more to have when you’re all retired, which is so great. Allison Demurs: Incredibly important. Well, thank you, Ben, for walking us through some of the ways that people can plan ahead starting now so next year they won’t be hit with a tax bill that’s more than they anticipated. Your offices are in Middletown, West Hartford, Mbury, and Mystic. And your initial consultation is complimentary, no obligation. Ben Fuchs: Yes, we build real plans—personalized, adaptable, and clear. So folks can go to our website, taxesandincome.com, or call 860-46179 to set up an appointment. We’d be happy to help. Planning without pressure. Allison Demurs: That’s right. Thank you for joining us for today’s CT Buzz. I’m Allison Demurs. See you next time.
