READ THE FIRST CHAPTER

DIVORCE THE IRS

HOW TO DEFUSE YOUR BIGGEST TAX TIME BOMBS BEFORE YOU RETIRE

CALCULATE YOUR IDEAL NUMBER

One of the keys to paying the least amount of tax in retirement is to have just the right amount of money in tax-deferred accounts like your 401(k) and IRA when you reach retirement. This is called your ‘Ideal Number’.

Having this ideal amount of money in your pre-tax accounts allows you to take advantage of your standard deduction (the amount of money you don’t have to pay tax on each year) and stay under the IRS thresholds that trigger taxes on things like your Social Security and Medicare. The rest of your retirement savings should be in tax-free type accounts like Roth accounts.

For most people, it is a myth that taking deductions during your working years by putting money into traditional, tax-deferred accounts will save you money on taxes in the long run. The IRS has cleverly designed a system that will line their pockets with your hard earned money in retirement. Learn how to turn the tables on the IRS and pay them the least amount possible with ‘Divorce The IRS”.

DEFUSE YOUR

BIGGEST TAX TIME BOMBS!

Your tax-deferred retirement account is a tax time bomb waiting to go off.

401(k)s. IRAs. You think you’re saving money on taxes. But what you’re probably doing is accepting a loan from the IRS—a loan with terrible terms that will come due when you need your money the most: in retirement!

With traditional retirement plans, the IRS has designed a tax system that entices you to do exactly what it wants you to do: line its coffers with your money. Millions of people end up wishing they had understood the tax traps earlier—only discovering the harsh financial reality when it’s far too late.

Don’t wait. Understand the IRS tax time bombs now, while there’s still time to defuse them.

Divorce the IRS: How to Defuse Your Biggest Tax Time Bombs Before You Retire will show you exactly how to avoid or defuse those time bombs, step by step, so you can make the rules work in your favor and turn the tables on the IRS.

HOW TO DIVORCE THE IRS VIDEO SERIES

Don’t feel like reading? Watch the video series instead!

Watch by Chapter:

Jimmy’s book was featured on the Author Hour podcast. Listen to the interview with Jimmy about the book here!

JIMMY MILLER, CRPC

AUTHOR

Born in Zambia, married to a German, and having spent most of his life as an expat, James Miller, CRPC, is no stranger to untangling complicated tax issues. He and his family enjoy international travel, sailing, mountaineering, and spending time with those they consider true friends.

The founder of Baobab Wealth & Baobab Wealth Abroad, James helps Americans and cross-border families around the world to create real wealth for themselves and their families in tax-efficient ways—so they can maximize their own dreams in life and beyond.

FEATURED ON:

BOOK REFERENCES & OTHER INFORMATION

Introduction

The Tax Foundation (www.taxfoundation.org).
Tax Freedom Day 2019 is April 16th (https://taxfoundation.org/publications/tax-freedom-day/#:~:text=This%20year%2C%20Americans%20will%20work,property%20taxes%20(11%20days)

Chapter 5

The 4 Percent Rule (https://www.investopedia.com/terms/f/four-percent-rule.asp).
Fact Sheet, Social Security (https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf)

Chapter 6

A Brief History of Taxes in the U.S. (https://www.investopedia.com/articles/tax/10/history-taxes.asp)

Chapter 9

Income Taxes and Your Social Security Benefit (https://www.ssa.gov/benefits/retirement/planner/taxes.html)
Online calculator to help determine how much Social Security tax you may owe (https://www.fool.com/retirement/social-security/)
A two-minute video about the Social Security Tax time bomb (https://baobabwealth.com/how-to-defuse-your-ticking-tax-time-bomb/)
Income Taxes on Social Security Benefits paper by Patrick J. Purcell (https://www.ssa.gov/policy/docs/issuepapers/ip2015-02.html)

Chapter 10

Chapter 11

Required Minimum Distributions (RMDs) (https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds)
IRA required minimum distributions table 2020 (https://www.bankrate.com/retirement/ira-rmd-table/)

Chapter 14

Calculating your ideal number (www.baobabwealth.com/Ideal-Number)

Chapter 18

Federal Income Tax Calculator (https://smartasset.com/taxes/income-taxes#fN7EEwZVCP)

Chapter 20

Passive Foreign Investment Company (PFIC) (https://www.investopedia.com/terms/p/pfic.asp#:~:text=A%20passive%20foreign%20investment%20company%20(PFIC)%20is%20a%20corporation%2C,related%20to%20regular%20business%20operations)
Tax reporting requirements for PFICs (https://www.irs.gov/instructions/i8621)

Chapter 21

Conclusion

Calculating your ideal number (www.baobabwealth.com/Ideal-Number)
Fiduciary financial tax advice and planning (www.baobabwealth.com)

Baobab Wealth Management is a fee-based financial advisory firm that provides real value to clients, putting their interests first and offering complete transparency with fees, services, and philosophies.

Contact

Baobab Wealth Management
Mobile: (907) 317-8454
Fax: 206-420-5370

Florida

169 Tiziano Way
North Venice, FL 34275

Alaska

721 Depot Drive
Anchorage, AK 99501

J.Miller@BaobabWealth.com

Disclosures

Baobab Wealth Management and Baobab Wealth Abroad are DBA names of Baobab Wealth LLC, a Florida state Registered Investment Advisor.

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The information provided is for educational and informational purposes only and should not be construed as investment advice, an offer to buy or sell, or a solicitation of any security or investment strategy. All investments involve risk, including the possible loss of principal. Past performance is no guarantee of future results, and there is no assurance that any investment strategy or portfolio will achieve its objectives, match or outperform any benchmark, or be profitable.

Baobab Wealth Management and Baobab Wealth Abroad do not guarantee the success of any investment strategy or the accuracy of market timing approaches. No representation or warranty is made that the services or methods of analysis employed by the firm will identify market tops or bottoms, or protect against market declines.

Baobab Wealth Management and Baobab Wealth Abroad do not provide tax, legal, or accounting advice. This material is not intended to provide, and should not be relied on for, tax, legal, or accounting guidance. Please consult your own qualified professionals for such advice before making any financial decisions.

Who We Best Help

Although it would be great to help everyone achieve financial independence, the truth is, like everyone, we have limited time and capacity. Thus, we like to focus our work on those we can serve best with our expertise.

First, we are only looking to work with those seeking a long-term, trusted relationship with a fiduciary financial advisor and have specific goals and ideas for their future. We enjoy working with those who strive to be and do better than average.

Our most valuable work is done for those in the retirement ‘Red Zone’, where getting it right is crucial to long-term financial success. This is the 10 years leading up to your retirement (financial independence) date as well as the first 5 years of retirement.

We are comprehensive financial planners, but specialize in tax-efficient retirement income planning. If you want to understand the best way to create a safe, increasing and predictable income you can’t outlive, we are the right firm for you. We best serve savers who have accumulated between $250K and $3M of investable assets.

If you also want to pay the IRS the least amount of tax and achieve (or be as close as possible to) the 0% tax bracket (yes, this is absolutely possible) in retirement, we are probably the right firm to work with. We wrote the book on this subject and you can learn more at www.Divorce-The-IRS.com.

You don’t want the cookie cutter advice you have realized is offered at most financial planning firms these days and would prefer a personalized plan that reflects your specific dreams and goals. You would like to see choices in how your retirement income could be structured and not just offered one solution or product. You tend to be more optimistic than pessimistic.

If this sounds like you, and your situation, we invite you to schedule a friendly introductory meeting with us to learn more and explore the possibility of a partnership.

HOW WE CALCULATED THESE LIFETIME EARNINGS

To project the salary of a 30-year old woman currently earning $85,000, we used a women-specific salary curve from Morningstar Investment Management LLC, a registered investment adviser and subsidiary of Morningstar, Inc., which includes the impact of inflation. We added up her projected salary each year over her 40-year career.

HOW WE CALCULATED THIS INCREASED EARNINGS WITH A RAISE

We projected the salary of a 30-year old woman currently earning $85,000 and one earning $110,500 (assuming a 30% raise) using a women-specific salary curve from Morningstar Investment Management LLC, a registered investment adviser and subsidiary of Morningstar, Inc. We sum up both projected salaries over 40 years, in today’s dollars, and calculate the difference.

HOW WE CALCULATED THIS RETURN BY SAVING IN THE BANK

The banking account results assume a 1% long-term average annual cash return over 40 years.

HOW WE CALCULATED THIS INVESTMENT PROJECTION

The low end of the range assumes that you invest 20% of your salary ($85,000 currently) with a financial advisor in a diversified mutual fund portfolio comprised of 60% equity and 40% bonds, which is rebalanced to this allocation each year. Fees include average mutual fund fees and an assumed advisory management fee of 1%. The high end of the range assumes that 20% of your salary is invested with Baobab Wealth in a diversified low-cost ETF portfolio comprised of 91% equity to start and growing more conservative towards the end of the investment horizon (40 years). Fees include those for the recommended ETFs and Baobab Wealth’s fee of 0.50%.

We assume salary growth based upon a women-specific salary curve provided by Morningstar Investment Management LLC, and that you save 20% of your salary each year. These results are determined using a Monte Carlo simulation—a forward-looking, computer-based calculation in which we run portfolios and savings rates through hundreds of different economic scenarios to determine a range of possible outcomes. The results for the low end of the range reflects a 70% likelihood of achieving the amount shown or better, and the high end of the range reflects a 50% likelihood of achieving the amounts shown or better. All results include the impact of inflation, and estimated taxes paid on dividends, interest, and realized capital gains.

The results presented are hypothetical, and do not reflect actual investment results, the performance of any Baobab Wealth product, or any account of any Baobab Wealth client, which may vary materially from the results portrayed for various reasons.