Business Innovators Radio - Interview with Don Hanifin Founder of DH Retirement Solutions Discussing Guaranteed Income & Tax Risk

Episode Date: July 3, 2025

With 29 years of experience in the financial services industry, Don is the founder and owner of DH Retirement Solutions, Inc. Based in Massachusetts and Connecticut, Don specializes in helping individuals and families navigate retirement income planning with a focus on optimizing income and reducing taxes.Don works with clients to create comprehensive strategies that integrate life insurance, annuities, Medicare, and longevity care allocation planning. By taking a proactive approach, Don helps clients secure their financial future, ensuring they enjoy a comfortable and worry-free retirement.A trusted advisor, Don provides personalized solutions that align with each client’s unique goals and financial situation, all while helping them maximize their retirement savings and minimize tax liabilities.Insurance Licensed in MA & CT | Retirement Income Planning ExpertLearn More: http://dhretirementsolutions.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-don-hanifin-founder-of-dh-retirement-solutions-discussing-guaranteed-income-tax-risk

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, Don Hanathan, who's the founder of D.H. Retirement Solutions, and we'll be talking about guaranteed income and tax returns. risk. Don, welcome back to the program. Thank you, Mike. I appreciate your having me here.

You know, sometimes words or phrases make you feel a certain way and just hear the word guaranteed income. That's a great feeling. You know, I want to learn more about that. And then all of a sudden, tax risk. You know, let's balance it out with making sure we know how to deal with taxes. So I think this is a great combination. Let's start with explaining what guaranteed income is and why is it so important in financial planning and planning for retirement? Sure, Mike. Well, I guess the most important thing to remember is that we all hope to have a long, healthy retirement.

And financially, we have to plan for a marathon. We have to plan for it just like it's a marathon. In fact, the average American is likely going to spend 20 years in retirement. So it's been said 69% of people surveyed fear that they won't have enough. that they haven't saved enough to be able to retire. Whatever your retirement looks like to you, though, you're going to need money to support it, and the longer you live, the higher your risk of running out of money.

So I always just like to start with people when I visit with them, and we're talking about income planning, okay? All of us pay our bills every month. Most of us, most of those bills, I'm sorry, are recurring. And, you know, those are the, you know, those of the, you know, the mortgage, if you have one, utilities, auto loans, home and auto insurance. So we want to isolate those things that are recurring. We have to make sure those are actually guaranteed to be in your mailbox every month.

So we want to make sure that we're offsetting with guaranteed response of money that's going to show up in your checkbook, guaranteed. Okay. there's there's different i suppose approaches to retirement income planning many people are comfortable with a investment portfolio and pulling 4% out of it um and you can do that and they mix bonds in with it and that's something if you feel comfortable doing that's fine but that's not what we're talking about today those could be affected by market risk and bond fluctuate fluctuations. So what I want to do is just talk about what's guaranteed. Absolutely guarantee. Okay. And what we're talking about there is called longevity risk. Okay.

Yeah, because we're living longer. We're taking better care of herself. We're eating better. We're exercising. So we're kind of living longer than what decades past we were as a human population. so we need to make sure we have plenty of money to take care of that. That's exactly right. So we isolate what sources of income are guaranteed. And primarily the three things they're guaranteed are social security benefits, pensions, if you're lucky enough to have one, and annuities. I'm not here to villainize anything.

I just want to talk about how these things work. These sources, though, they provide a steadfast, predictable income stream for life. So Social Security is a government program, which provides a monthly benefit, and it's based upon your work history and earnings, and it has a cost of living in it, which is typically around 3%, a little under 3%. But it's important to note that Social Security was never intended to completely replace your working year's income, but to supplement it. pensions, again, for those folks lucky enough to have them, are employer-sponsored plans that provide a fixed income stream, usually for life, and some of them also have a cost of living.

So we take those two things, if you have those two things, and we say, what's left? Okay. And what we're trying to do is to remove the stress from someone living, and we use fixed indexed annuities for those things. That's my favorite because they're not subject to the market fluctuations. Just like if we were talking earlier about the index universal life policies, these have a same type of indexes in them. So if the index performs, you're able to capture the gain. If the index does not perform any particular year,

all of the money that your annuity has earned, you keep, and you just go again next year. So until you need to turn that annuity on and begin to receive income, it's a very secure place to park your money. Yeah, I know we talked about that before, but that's a great point to bring up here with that guaranteed income concept. And there's no one correct formula that says you must do this every single time, but that's a great thing to keep in mind with those points, those products. Yeah. So I just want to say there's sometimes people will say, well, I have other things that are guaranteed. I've got some rental income. I've got investment income. Typically, they're not typically considered guaranteed because of the fluctuations we talked about also, you know, the renter stability. But really, it's it's the annuities that are so important because what we're trying to do, Mike, is to take just enough money. to backfill your income needs in retirement. Just enough.

Everybody has a portfolio. Some of it is qualified money, if that's your IRAs. Much of it is actually from that, from working years. Some people have non-qualified savings and this and that. But what we're trying to do also, and very carefully with taxes also,

is to make sure that we've got that income there so we can have the highest guarantee income and the lowest taxes to be that you're responsible for every year. Yeah, that's a great point. And that makes it very important to sit down with someone and say, let's talk about what age you're going to retire. Let's talk about are you going to have enough money to get through retirement? And is there a gap?

And if there's, you know, a gap, we need to make sure that there's some of that guaranteed income there that's not subject to the market volatility. because you just don't know. Like you said about rental income, you sure, that could be a, you know, a good source of solid income, but it's not guaranteed because you could have a renter leave and be out of the property for six months and now you've got a gap. But yet with some of these solutions you're mentioning, these are solid guaranteed income. Where do you sit down and kind of draw out the plan with the client to help them incorporate

this guaranteed income in their overall strategy? You touched on it a little bit here, but what percent, for instance, would you say, hey, at a certain age, we need to start shifting money into guaranteed income and to make sure that your overall financial strategy for retirement is solid? Well, Mike, typically it's for people that are a little bit older. Typically, if I'm doing seminars, it's for people that are just kind of planning about when to take Social Security, maybe when to take Medicare. if you're going to keep working, do you, you know, do you stay with your, with your health insurance plan with your company? But it's in those, it's in those early times where we start to talk about how much of it is to be guaranteed. And I will tell you, Mike, some people that will come into my office and will have a visit with,

you know, they've got, they've got very, very well-balanced portfolios, and they're comfortable with those portfolios. But if I ask them, tell me, would you like, would you like, in retirement, would you like your income to be likely to succeed or contractually guaranteed? And, you know, the contractually guaranteed part is something actually that only annuities in the private sector, only annuities can offer you something that's contractually guaranteed. It's bomb proof. So when we start to, from this approach, Mike, again, I'm not there to villainize what they have. I'm just saying let's look, let's define the shortfall.

And we can even maybe a little bit overfund the annuity. And why would we do that? How to make up for inflation or to have a little bit left over on the side monthly for things that break? I mean, life happens, right? Things that don't behave all the time. But having the annuity coming in every month because you know that those bills are going to be in your mailbox every month, takes the stress out of retirement. And we don't have to be worried so much about what.

what's going on in the marketplace. Yeah, I can only imagine you've had clients that have made that shift and come in and said, in years past, we would just get a pit in our stomach when we opened up our retirement portfolio statement or watch the news. But now since we put the money into these kind of products, we don't worry about it because it's contractually guaranteed. That's exactly right. And making contractually guaranteed means your lifestyle is now guaranteed. Yeah, yeah, that's huge. And again, I like your approach to mentioning, let's even kind of go, if you need X,

let's have a certain percentage above how much you would need to make sure that, you know, if the car breaks down or, you know, whatever the case comes up or the, or you need some things that go outside of the parameters of what you've planned. So I think that's a good thing to keep in mind. You don't want to feel like, you know, you're teetering on the edge of everything must work exactly like we planned or else, you have a little bit of a leeway there. So let's talk about that other aspect of the conversation, taxes. How could future tax changes impact retirement income?

Well, you know, like it's been said, it's not what you earn, it's what you get to keep. And that's really the genesis of planning your retirement income from a holistic standpoint. point. We use software. Most advisors would. And again, there's no set way, but we find by generally by moving some things around here, for instance, any money that you have in an account, income from non-qualified accounts, I should say, you know, stocks, bonds, whatever, those are tax, whether they're distributed or reinvested. So, non-qualified income can cause social security to be taxed. So something like that, if you're not using it,

especially if it's just been sitting there, maybe someone's had a, I don't know, an uncle or somebody passed away and left them a house or something and they sold it. And there's a considerable sum of money that's sitting there earning interest, but really isn't purposed in a better way. Something like that might be something that might be repositioned for income in retirement later on down the road. We talk about RMDs.

RMDs, you know, there's Roth conversions to Roth RMDs can be great. But, you know, if you go on the Internet and you look and see what they're doing on the Internet, converting IRAs over to Roth IRAs, and many times they don't really, they're not speaking to the tax consequences of doing that. How's the whole thing going to happen? Yeah, we know the taxes that are going to be doing the conversion, but how is it going to affect your Social Security? You want to be very careful about all of those things.

The effective marginal brackets within Social Security, what's going to happen to this? So it's hard, Mike, to talk about this without going down a rabbit hole. But I just were very careful about creating income. It can't be outlived. We review these things every year with our folks to see what's going on. We don't do taxes. We're not really specializing in preparing taxes.

What we're specializing it is distributions of monies in retirement. And if you do it wrong, you end up paying more money than you need to. And that's what we're trying to accomplish. Yeah, you know, I think that if you were to ask 100 people, Will taxes go up in the future? 147 would say yes. I mean, we don't know. Nobody knows.

But the likelihood is tax is going to go up. So we need to plan for it. And so that's a good point that you're bringing up there. You mentioned RMDs, those required minimum distributions. Talk a little bit about the tax implication of withdrawing from retirement accounts, from a tax implication, because I think that sometimes people think, you know, oh, I'm required to pull money out. But this year I'm doing fine because we sold the boat. We don't need money. So we're not going to pull it out. So you might have a tax implication and a penalty there,

right? You could. Yeah, you could actually. You actually, if you are within the time frame that you're responsible to pull out an RMD and you skip it, now there's a 25% penalty. It was reduced from 50%. Right. I'm sorry. I wasn't paying attention to the question. I'm sorry, Mike. Yes, you're absolutely right. You would have a penalty for that. And I think in that respect, you need to make sure you've got people on your team, on your side, just making sure that you're staying up with those requirements and deadlines. Yep, yep, you're absolutely right. I don't know, Mike, we were talking on another podcast, and I mentioned, I don't know if these will all be available. I just want to say something

because this relates to it too. Those qualified plans, the reason it's, It's important to always have that on your mind if conversions will be appropriate. It's because taxes at their highest point in our country's history have been as high as 94% for certain classes of people. So we have to remember that qualified plans, they do two things. They defer the taxes that are owed. We all know that. You get a tax break in the beginning and it defers the taxes that you owe on those plans until later on. but they also defer the tax calculation, which is very important because there's quite a number of things going on in our country right now.

Medicaid, social programs, augmenting in the country for various age groups. And if I were to ask you, do you think taxes are going to stay about the same, go down or go up? What would you think? I would say they're heading up. Most people would agree that they're probably going to head up. So it could be argued perhaps recklessly that you absolutely should be converting your qualified IRAs over to Roth IRAs. But you can't just throw spaghetti at a refrigerator. There has to be a methodology in this whole thing.

And so we're very careful to make sure that when we're doing that, we're doing it and taking advantage of the whole picture, of everything that's going on. Yeah, that's a good point because I think a lot of times people think, oh, I've got a million dollars in a 401k or an IRA, and they think they have a million dollars, but they don't because it's not been taxed yet. So, you know, they just haven't considered really the tax implications. So that's a big thing for people to keep in mind.

What are some of those tax-efficient strategies then? now that we've recognized, we need to address taxes. What are some of those strategies people should consider to maximize their retirement, the money they get to keep? Well, I think, you know, Mike, as I mentioned before, you know, sheltering unneeded income for non-qualified accounts is probably up at the top. We look for any type of tax credits that you can take, doing your taxes.

Most people are going to use the standard deduction. You know, that's a conversation and it's a fair question, Mike. It's hard for me to just say, we should do this. We can talk about certain things, but I just wanted to make sure that everything that we did would make sense for you personally. I can't tell you that when you go to see your CPA every year, unless you're a person of extreme means,

where they're really helping that there's a certain high-income group of people where CPAs are much more engaged than they are with the average person or couple in the country. So typically for the average people when they visit with CPAs, the CPA is using software during tax time that's looking back on the previous year, which might might not be beneficial for middle to upper middle class people. So the software that we use actually looks forward. It forecasts forward. And so we can strategize better from different accounts to see why. For instance, some people may not know that if you started your Social Security at your full retirement age, but you've got some extra money coming in right now that you didn't really anticipate having, did you know that you can stop your social security?

Social Security. A lot of people don't know that. You could hold off on your social security and let that roll up all the way up to and including the age of 70. It's very important to have the high income earner, if possible, get up to age 70, especially for couples, because the surviving spouse would get that higher income if the higher age earner were to. to pre-decease he or she. Yeah, that's a really good point. Yeah, just another little example of us. But most importantly, Mike, and I'm sorry,

that's what we focus on primarily is just doing this a little bit at a time. In retirement, some of the things that you can do, we talked about Social Security. I really need to know, honestly, Mike, could people come to me, what do they have? You know, what have they done? Did they start when they were younger? Did they sell a business when they were younger? Maybe sometimes all they did over the course of the year, their whole strategy was to build a business and sell it. And now they're sitting in front of me. They just retired. The business has been sold and they got a lump sum of money and

what do we do? That's another scenario. So it's very important to know what if they have tax-efficient strategies that they've put together during working years, that we can use in strategizing. So if they don't, some things that we can talk about is Roth Conversion, certainly. Qualified charity distributions. Some people have a lot of money, and they have concerns about charities. You can do that, and you would be deferring. your RMDs by giving that money away.

That's not counted as a taxable income from your RMD. QLAC, if you've heard of that, it's something that's kind of growing now, a qualified longevity annuity contract. I'm not really in favor of these things, but again, they could strategize well if they come out. But basically you can put a certain amount of money. Now I believe it's up to $210,000,

dollars, creating an income stream in the future later on in life, and that would defer your RMD so you can fractionalize the RMDs that are coming out if you don't really need them for now. And again, do they have cash value life insurance? How can some of that be used to help us in those areas too? How am I doing, Mike? Any other questions in that? You know, that really covered that last point there.

And I think the big aha takeaway is you've got a system where you can sit down with someone and put them through an analysis and say, let's let you, let Don ask the questions. Like, did you sell a bit? Do you have this amount? Do you have, you know, all of these things? And then you put it together into, you know, just like an outlook. Where are you headed? Are you going to have enough money to get to retirement, to get through retirement? And here's some pitfalls we need to be prepared for.

So I think if that is something that someone is interested in kind of having that 30,000-foot view to see what it looks like for them, they might be interested in reaching out connecting with you. What's the best way that they can do that? Yeah, that would be great, Mike. And I should mention before I give you that information that on my staff, on my team, we have all the resources necessary. certified estate planners, fiduciaries, everything is there to help us guide you. You can reach me on my email at Don at D.H. Retirement Solutions.com. And my personal phone number to my desk, 413 area code, 5671745. Excellent. Well, Don, thank you so much for coming back on today.

was a real pleasure chatting with you again. Thank you, Mike. I appreciate your having me. 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.influentialentrepreneursradio.com.