Business Innovators Radio - Interview with Adam Blain, Wealth and Retirement Advisor with AAA Life Solutions-Tax Traps and Time Bombs

Episode Date: May 15, 2025

Adam Blain is a Wealth and Retirement Advisor based in Germantown, Tennessee, dedicated to helping individuals plan for retirement—whether they’re building their savings or already enjoying retirement life. With over eight years of experience, Adam is Series 65 licensed and also holds life and health insurance licenses. He provides personalized strategies for income planning, investment management, annuities, tax-efficient withdrawals, estate coordination, and Medicare guidance.Adam serves as a fiduciary under AAA Life Solutions and believes in offering clear, honest advice that’s easy to understand. His approach is faith-driven, educational, and tailored to each client’s goals. Outside of work, Adam is a husband, a proud father of three, and is actively involved in his church and community.Learn more: https://aaalifesolutions.com/ The opinions expressed by Adam Blain and guests on this show are their own and do not reflect the opinions of this radio station. All Statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Investments involve risk and unless otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone, information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you. Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it is suitable for your specific situation. This program is designed to provide accurate and authoritative information with regard to subject covered. BWA Disclosure: Investment advisory services offered through Brookstone Wealth Advisors, LLC (BWA), a registered investment advisor and an affiliate of Brookstone Capital Management, LLC. BWA and AAA Life Solutions are independent of each other. Insurance products and services are not offered through BWA but are offered and sold through individually licensed and appointed agents.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-adam-blain-wealth-and-retirement-advisor-with-aaa-life-solutions-tax-traps-and-time-bombs

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us, Adam Blaine, who's a wealth and retirement advisor with AAA Life Solutions, and we'll be talking about tax traps and time bombs. Welcome back to the program. Thank you, Mike. That's great to be back.

Hey, so I guess the only reminds me of that title reminds me of like the only thing guaranteed a life is, what, in horse shoes, video, death and taxes. Death and taxes, yes. So tax traps and time bombs sounds like quite the topic that we want to cover. So where do you start when you're talking to your clients to start educating them on what they don't see coming around? around the corner. Oh, we start talking early, early and often. Taxes is a mystery and everybody hates paying taxes, right? But most people assume that when they retire, they're always going to be in a lower bracket. That's always been the myth, especially around 401Ks, right? The whole premise between like a 401k or tax deferred account is that I'm in a higher income tax bracket right

now, I can get that deduction by deferring taxes now to later. But oftentimes people don't realize that in retirement, I am more likely possibly going to be in a higher tax bracket. A, why is because I often, I'm not working anymore, right? So I lose those work-related deductions. Required minimum distributions that force withdraw out of those tax-deferred accounts when I don't necessarily want to take them out, but I have to per federal guidelines. Social Security could be taxed. A lot of people don't realize that Social Security, based on how much income I take out, can be taxed.

Now, I know that's on the table right now to be voted on in Congress. That could be going away to where they'll tax Social Security, which will help our retirees in this country a lot. Medicare premiums can go up. A lot of people don't realize that I could be taxed. That dreaded word, Irma. A lot of people don't know what Irma is. But it's basically that Medicare premiums to where,

if I take out too much money or have too much income, I will pay more for my Medicare to the federal government. And then worst of all, when something called a widow's penalty, devastates it as well, like what happens when my spouse dies? Usually they end up in being in a higher tax bracket as well because the survivor is now filing as a single person with similar income. So they're paying almost 20 to 30 percent more in taxes than what they were as a joint couple, because they would. deductions, they have the same income. So, I mean, it's a disadvantage to them as well. So how does you avoid that widow's penalty?

That sounds, I don't like to hear the word penalty. And you know you can't really control when a spouse dies. So what are some ways that you can avoid that? So, yeah, it's planning. It comes down to being proactive in that tax planning to where if you have nothing but tax deferred accounts. maybe start doing some Roth conversions where you can cross over that tax bridge to where you start paying the taxes now, especially while taxes are very favorable right now. We are in the lowest tax

rates that we've ever seen in our nation. And it more likely is going to continue for four more years, especially if this legislative legislation goes through here in May is I believe when Congress is voting on it. So if it continues, for the next four years. Maybe it's a favorable time to start moving a lot of that qualified money, pay taxes on it now strategically, and then you let it grow tax-free into the future. Income smoothing, basically it's where we spend income over multiple years to avoid bracket jumps. Again, that's taking strategies to where instead of penny pension and letting it grow to a big number, maybe we start taking some money now and start living my life. But it comes down,

to talking to somebody to be able to know that I can actually spend some money. And then withdraw sequence, in basically where we choose which accounts we want to pull money out of and win. And then knowing what are the consequences of what account I'm taking money out of, what is I going to do to my taxes? So I kind of like putting this analogy out there. It's kind of thinking of it like steering a car down a winding mountain. Okay.

If you know the sharp turns ahead, you can slow down, stay in control. It's kind of what we do with taxes. We build those guardrails in so you know, and you're not surprised by tax spikes or Medicare premium jumps or bracket change after losing a spouse. We're able to strategically and know efficiently think about what are taxes going to do in going into the future. So it's kind of something that we can kind of plan on and think of. It kind of gets back to what we said in this series. Just plan. Have a plan.

Follow the plan. If you plan for those things and they don't happen, great. You're better off. But if you plan for those things that they do happen, you're prepared. And when I hear the word time bombs, you know, tax time bombs. I think about all these things. It's kind of like you see those movies where it's like the, you know, the explosions are going off from the right and off the left.

What are some of those tax time bombs? And how can you really plan for those? Yeah. So our tax time bombs are. It boils down, these tax-deferred accounts, these IRAs and 401ks. We know when it's going to be going off. It's when we are forced with the required minimum distributions at the age of 73. When you turn 73, the government knows that you turn that age.

They're wanting you to start picking money out of those accounts, regardless if the market is up or down, or even if it's favorable to you, they want you to take that out. And I've come across the biggest complaint that I have when retirees come into my office, is like, man, these taxes are killing me. It's because they've already reached their requirement of distribution age. And they're having to take out that money regardless that they don't even want the money to be pulling out of those accounts. They don't need it. They don't need the income.

They're an older generation. They've had pensions. They have their social security. They might live off a little bit of income. But they're looking at taking, you start off at, I don't know, was it, a little over 4% having to take out of that. And say you had a million dollars, that's $40,000 that you weren't planning an income. And that amount grows every year. So by the time you're age 90, almost 70% of your account should have been withdrawn out of those accounts.

That's a lot of money that you weren't planning on necessarily maybe taken out. You know, one thing that I was thinking when you're describing those required minimum distributions, what if you get to the point where you go, oh, I don't need to take it. out this year because I sold my RV and I'm good to go and so I'm just not going to take the thing out. That could be a big problem, right? Yeah, that could be a problem as well because if we do not take those R&Ds out when you hit 73, the government will tax you up to 25% of what you should have taken out. That's a big hit.

It used to be 50. So government was about four years ago, I think, reduced that down to 25. So you could be hit with a big penalty. So if you're taking out 40, 25%, that's an extra 10 grand in taxes that you would have had to pay as well as a penalty. So it's not favorable to skip that. Now, I've had a client coming at once. She was 84, 85, something like that. And we were sitting down and talking.

And she brought up to me one time as like, what's a requirement of distribution? And I told her what it was? And she's like, oh, I've never paid that before. I don't even know what it was. So she was getting hit with those penalties. He was going to add. And at the time, it was the 50%. So, baby basically we got some CPAs and kind of walked her through it.

But, yeah, not knowing that it can really wreck a retirement plan for sure. Right. Oh, yeah, that's huge. I think that that's a lot of times people just, you don't know what you don't know. And that's definitely, definitely a huge to think about. Let's now kind of shift gears into, you know, like our analogy we've been talking about of climbing the mountain, you know, striving and accumulating money. Then you get to the top and now you got to look down and get down to the bottom with, you know, decumulation and having enough money to live. What about the other aspect of, you know, yeah, I've planned so well that we've got so much money, plenty of money to live, pass when I needed.

but now we need to put a plan into place for legacy planning, transferring wealth to your heirs. What are some things that people need to think about with regard to taxes in that respect? Yeah. So when was it? It was probably four or five years ago. Government did away with the where you're able to just keep rolling those qualified accounts, those tax deferred accounts where you can keep rolling them from generation to generation. Actually, it's the thing's been longer.

It's been almost 10 years. But now the law says that if it's not a spouse and you roll it, let's say to your children, that million dollars, they have to start taking that income, they have to start taking those accounts and start liquidating those accounts over a 10-year period. So if it's a single person and they just got a million dollars and they're 50 in their highest earning years,

and they got to take out an extra $100,000 a year, what is that going to do their taxes? I mean, they're probably in the 24%, an extra 100 grand, drops them into the highest one. That could devastate them tax-wise, and then that inheritance that you were planning on leaving a legacy to them for just gets eaten up in taxes. So efficiently thinking about it,

and there's a lot of strategies to do it, where you can convert to Roth accounts or tax-free accounts or even utilizing life insurance to help pay for any of those taxes would be beneficial to them, especially if you talk about legacy planning. So, yeah, planning, it all boils down. Plan, plan, plan, plan. If you do not, you're just kind of hoping. And hope, obviously, it's not a strategy.

It's a famous book, famous quote. Yeah, exactly. So another thing, too, I would think is important is have a team of people that are specialists. So if Adam Blaine was saying, I can do it all, just come to me. Well, maybe you could do it all a little bit, but you're not going to be up on all of the intricate estate planning or taxes or legal or all of those. So talk a little bit about making sure that you've got a team of people that are contributing to all of those areas to really make sure you're making those right moves.

Yeah, exactly. So I've got around me within our, with interesting, AAA Life Solutions. It's not just me sitting here. I'm not, I'm not an estate attorney. I'm not a lawyer. I'm not a CPA. But I do have a CPA on my team. I do have an estate attorney on my team. And we do talk to each other. So if I do have a question of what happens if we pull out of this account, what is that going to do? So I'll call him up my CPA and I'll say, hey, what do you think? I'll take his opinion. But I'm here sitting here as the person kind of running the show as well to where I'm talking to each one and taking their advice. and then relaying it in a nice, comprehensive way to our clients to be able to assure them that they're going forward and climbing, descending down that mountain safely and soundly for their retirement to last the rest of their life. So, yeah, I do have a big team in our corner to fight for you as well. Now, if you have CPAs or an attorney as well, I'm more than happy, which makes me unique to even talk to them to get them on the same page. because most of these time, these three people never talk to each other. They're not willing to talk to each other.

They don't want to talk to the CPA or the estate attorney or the wealthy. They don't want to get in the same room. So that does make me unique as well because I do want to have their input and their advice because they're experts in their fields as well and takes kind of a village. They all add analogy, it takes a village to raise a child. Same thing with retirement. It takes a village to bring you down safely down the mountain as well. multiple guys.

And if you're not on the same page, you need to be on the same page or else you're like pulling on two ends of the same rope and you're not getting anywhere. Yeah, tug-a-war and you're just yanking on it and you're not making any progress. And then that stack,

like where you're just kind of standing still, that's not progress. That's actually going backwards. So from your experience of working with clients, what have you seen as the biggest tax mistake that you've seen of retirement you make in, you know, maybe not planning and oops, that time bomb, you know, went off. Yeah, I mean, requirement minimum distribution is a big one.

They're not planning for what that looks like because they don't know what that looks like. They don't know how to, the average American can't even manage their own finances in the accumulation phase or put together a sound budget, right? So project out taxes, project out what that's going to look. that's difficult for the average American. So you do need somebody that knows what they're doing to show you what are those going to do. And then if I do X, Y, Z, how that could look going into the future as well. That's a big one.

And then also not planning for that spouse to pass away. Most people have the right idea. They want to, I can't remember the name of the movie, but where they both pass away together, rarely that happens. usually the women outlast the men by number of years and unfortunately the women kind of get the short in the stick of trying to manage this all by themselves when the guys have been doing their whole married life so definitely planning and involving your wife is also another thing because she needs to be aware of when the man passes away how are my taxes going to look how are things going to look for me if he happens to pass away as well I've talked to

a number of ladies who have come back to me and saying, oh, my husband passed away. He's done everything. The finances. I don't even know what her stuff is. So I was just making sure she's involved in the whole process as well. You know, that's a great point. We talked about longevity. Like, you know, how long will you live in retirement?

Our life spans are going longer. But you brought up a great piece of statistic there. Statistically, women are living longer than men. and statistically people of women don't know where the money is what's been going on so maybe a gift that the man of the family can give to the woman would be involved them sooner so that they understand what's going on and then make sure that your financial professional is factoring in the the wife's longevity right oh most definitely yes and i was reading a statistic is that here in the near future i mean for retirees the women are going to

to be holding the majority of the money. Wow. Because the guys are going to be passing out, especially with the baby boomer generation, is that there's just so many of them and they're, all the guys will be passing away more statistically sooner than the ladies that the ladies are going to be the ones holding the majority of the money. So they need to be the ones that also need to be in the on the process of knowing how things are working as well.

Yes, 100%. Well, I'll tell you, this has been some real eye-opening point. to bring up about taxes. And I love, I love some of these things. It's like if you're aware of what could happen with these tax traps and time bombs, then you could put a plan into place. And like we said before, start planning well ahead of when you are planning for retirement or well ahead of what some of these tax traps could be.

So, Adam, if someone is interested in reaching out and connected with you to say, hey, map out some of these potential tax traps and time bombs so I can have a good plan. what's the best way that they can do that? Yeah, always can reach us at our phone number at 901, 508, 2433, and always can look us up on our website at wwwlis Solutions.com. Awesome. Well, thank you so much for coming back on. It's been a real pleasure chatting with you.

Thanks for having me, Mike. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, Visit www. www. Influential EntrepreneursRadio.com.