Influential Entrepreneurs with Mike Saunders, MBA - Interview with Curtis Cottle, Founder of SBC Financial Discussing Taxes Eating Up IRAs and 401(k)s

Episode Date: November 25, 2025

Curtis Cottle is a Certified Financial Fiduciary, visionary growth strategist and cofounder of one of Michigan’s fastest-scaling financial services firms. He specializes in retirement planning, estate planning, and strategic tax strategies designed to help families and business owners protect and grow their wealth.At the core of his firm’s approach is a deep emphasis on strategic tax planning as it relates to retirement, helping clients keep more of what they’ve earned and build long-term financial confidence.He’s the creator of the Wealth Wellness Checkup, a planning experience that uncovers hidden financial blind spots and helps people make smart, informed decisions. The firm is built to simplify complexity, bring structure to planning, and deliver personalized strategies that work in the real world.With nearly two decades of experience, Curtis is known for cutting through the noise, building lasting relationships, and helping people create long-term security without the guesswork.When he’s not driving growth or designing new campaigns, you’ll find him investing in his team, building partnerships, or spending time with his family, living the same values his business is built on: fun, unity, and getting things done.Learn more: http://www.gosbc.net/DISCLAIMERThe content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. We take protecting your data and privacy very seriously. As of January 1, 2020 the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal information. SBC Financial Advisory services are only offered to clients or prospective clients where SBC Financial and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by SBC Financial unless a client service agreement is in place.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-curtis-cottle-founder-of-sbc-financial-discussing-taxes-eating-up-iras-and-401ks

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 Curtis Cottle, who's the founder of SBC Financial, and we'll be talking about taxes, eating up IRAs, and 401K. Curtis, welcome back to the program. Thank you, Mike. It's good to be back.

You know, I think that when you say a word and you say, what's your first reaction when you hear this word and, you know, those tests you hear about, if you say the word taxes, I think people start getting the not building up in their stomach. So when we start thinking about taxes eating up our retirement accounts, that's a big thing. And it almost is something from my perspective where people kind of think, oh, yeah, that'll come down the road. you know, I'm putting my money in pre-tax, you know, from work, and there it is. And they don't really take full account of what's going to happen at retirement regarding taxes. So talk a little bit about why traditional IRAs of 401Ks are really tax time bombs. Yeah, that's a real concern in today's world, especially when you have so many tax changes going on around us. We have one thing that affects that directly is the Secure Act.

it's a tax law that went into place 2020 and it has some aspects to be one of the bigger tax changes we've seen in our time and directly to your question how it affects IRAs and turns them into a ticking time bomb for beneficiaries non-spousal beneficiaries and so usually that's kids or whomever you're leaving your funds to and so what happens is is now with the new rules when you inherit that, you have to take out money, forced money. It's called a required minimum distribution as soon as you inherit it. It doesn't matter how what your age is or anything like that. As soon as you inherit it and you have to take it out now in 10 years.

So what that really means is you're taking out five to six times forced more income counts toward your taxes. You have to pay taxes. And then what do you think that does to your tax brackets as the inheritance is getting that inheritance? It blows right through it. Yeah, yeah, exactly. It bumps those right up. So it causes a really tough situation. And then in addition to paying more taxes on the actual inheritance,

well, if you're in that higher tax bracket, what do you think it's going to do if you take any money out of your own investment accounts? So it really. Amplifies that. Yeah, yeah, it really causes a tax bomb, as you mentioned, but you're kind of stuck there for an entire decade. And most of our clients, when they learn that they don't want to send that burden on to their kids or their heirs or beneficiaries.

Yeah, it has like a multiple pronged detriment. Like if you have to take money out because of your own RMDs, you trigger taxes. If you let it pass to your family through legacy, you know, after death, it triggers taxes for the family. So having this aspect covered and planned for is really big. And it ends up being a gift because if you can wrap it up in a nice bow and make sure your family's taken care of, then they're. They're really, really looking at it through the lens of, wow, that was, you know, could have been a whole lot worse.

And it makes me think about, you know, like the old game whack-a-mole. Like, you know, here's this money growing in your IRA or 401K and it's been deferred because, you know, you pay pre-tax into it. Well, now when these RMDs or these transfers happen, it's like popping its head up to be taxed and the government's just whacking it. And you have to pay taxes. We can't avoid that. But I know that there's some ways that you can mitigate. it and lower that. So what are some of the strategies you start talking to your clients about in this planning? Yeah, yeah. Strategies are important, and there are options. That's the,

that's the light at the end of the tunnels. There are some really good choices you can have if you're working with a tax-focused plan. And so what happens is a lot of advisors don't work much with taxes. They might do some rough conversions or they might withhold some taxes, some withdrawals, but largely our experiences as advisors don't do a lot with taxes and CPAs and tax filing professionals take, I mean, it takes all of their time just to get everything filed. They don't have a lot of extra time to play in a position you to be tax free at some point down the line. So when you have to take those required minimum distributions, if you just leave everything in your IRAs, it can cause a bunch of extra taxes on Social

Security, Medicare, capital gains. It can just be a spider web of taxes that, triggers for you and your own taxes, let alone what your kids would receive on inheritance, as I mentioned earlier. So one of the big tools is you can do a Roth conversion. And so any advisor can do this, but how you convert, the IRS says you can convert as much as little as you want in a year. Well, that gets complicated because if you convert more, your tax brackets go up. If you convert less, your tax brackets stay lower, but now it takes years and years longer to convert. And so then you're exposed to regulation risk. If taxes change, I ask a lot of people, do you think in the future taxes, do you think they're going to go down or tax rates are going to go up in the future? And most people kind of laugh at me. But they all say that they're going to go up. And so if that's the case, well, you're going to get a lot of exposure to higher taxes if you take too long to convert. So here's where it's really powerful. And this is actually a little bit unique to us is we work with a tax mitigation team. We have them on retainer. And they are there to implement creative tax solutions.

to lower your tax liability. So when you convert to Roth, you pay the taxes on conversion. But then we can overlay and implement one of our tax reduction plans and save you. Many of our programs save you like 25 to 30% of your tax bill. So what that means is that's like getting a 25% to 30% tax credit. So for instance, if you converted $500,000 and you have a $100,000 tax bill, that's like saving $25,000 to $30,000 back in your pocket. while giving everything to a tax-free Roth.

Yeah. That's huge. And I think that a lot of times people don't think that deeply, right? They hear, oh, you should look at your big old 401k or IRA that's never been taxed. Convert it to Roth and they Google, oh, yeah, yeah, I've heard of that. And then they go, click, let's do that. But they trigger all of it. And now you've got a huge tax bill or to your point that you were making.

If you start doing it sequentially, you know, it takes too long. And then taxes have gone up. But it really makes me think, okay, if you have this money, whatever amount, whatever percentage in the Roth, the benefit of the Roth is that it's growing tax-free, but you need to have enough time in the Roth to actually have some benefit. So at what point before retirement should someone be thinking about the possibility of doing a Roth conversion? Yeah. So when you're looking at that, a lot of people say, well, should I wait and wait until my income's lower? and again, you're exposing yourself to regulation risk there, the longer you wait. The main goal at the Roth is the faster you can get it into a Roth, paying the least amount of taxes is the best strategy.

That's kind of the goal for everybody. And so we can, with our tax strategies, we work with about 50 different tax reduction planning strategies and some work for different types of income and some different amounts of income. So not everything works for every income, but there's a couple. that works specifically for this exact planning. One's called leveraged charitable gifting, which is far different than a normal charitable donation,

where you get one right off one to one. You put in $50,000, you write off $50,000. This is a five to one. So if you put in $50,000, you can write off $250,000 of your income and you basically put it in at wholesale and write it off at retail.

And, you know, there's another one called a convertible tax bond, which the leverage charitable gifting oftentimes is 25 to $3.3. 30% tax reduction on your tax bill. A convertible tax bond is 25%. And that's where there was some, there was a situation in COVID where a bank went out of business and they had the CARES Act from COVID allowed them to help suffering business owners and they're able to get some of those losses back and giving you tax incentives to do that.

So these are the types of strategies that you can put on top of a Roth conversion and just create a lot of powerful strategy to get money tax free as fast as possible. Now we can do it in one to two or three or four years, even millions of dollars in that time frame and save millions of dollars in taxes doing it. You know, I think when people hear things like that, one of the thoughts that crosses their mind is, you know, ooh, that sounds a complicated, B, a little risky, like, ooh, is this okay with the IRS? But all of these things are all part of the code. And from what I understand, the IRS tax code is many, many pages.

tens of thousands of pages. So how can people really understand that unless they have a tax strategist that knows exactly your situation to go in there and dive in and go, okay, we can put this piece here and this piece there to really give you that outcome? Yes, Mike. And that's exactly why we have a tax mitigation team on retainer. That's their number one job is to implement these people through these programs. There's specific administration at each one of these programs to make sure all the paperwork is done in accordance with the IRS. And this is how the rules, are set up. The IRS says, hey, we're going to give you this book of code, this internal revenue code, the tax code, tens of thousands of pages. Not only that, all the content is vague. All the rules

are vague by design so they can give the IRS a little bit more power. So then you've got to know all the tax court cases to give you a specific context to the vague tax code. So absolutely it gets become daunting for the average person because the IRS says, well, here's all these rules. They're vague and you need to know all this information, but you can use these rules however you want to to lower your taxes as far as you're able to load them with these rules, and they say, here you go. Well, most people are going to get very far. Most people aren't even going to know where to start. And so that's where if you have the right tax team, it can just be done for you. You can loop in your CPA. We usually work directly with the existing CPA of

our clients. And we don't take over generally that tax filing, though we could, but most of the time we don't. We just work with the CPA that you already have. They're going to give their stamp of approval on it. They're going to follow along and say, oh, wow, this is a real creative way. I know these tax codes. And that's a really cool way to put those together is what our experience has been. But that's the rules. You can use these. Just like a business owner can take a tax right off. You can use these tax programs. And that's how the wealthy have been doing it for years and years and years. Yeah. You know, I think that a lot of times people just go, well, we've just always done it that way. You know, that's one of the biggest death knells of progress and moving forward. Oh, we've

always done it that way. Yeah, but you'll always get the same results. So many times people just put off, oh, yeah, my money in 401k IRA. It's just, it's just there. And when I get to retirement, we'll figure out what we need to do with it. But at that point, you don't have the runway to do some of the things you've mentioned. And you may have had some of the regulatory changes with taxes or brackets, because I think to your point you made earlier, a lot of people assume, oh, my tax bracket will be lower because I'm making less money. But we don't know that. We don't know what the brackets will be brackets can change. Tax rates can change. And yeah, if you ask 100 people on the street, 200 will say taxes will go up in the future because we know taxes are based on the deficit,

which is huge and growing, and government spending, which is crazy. So I think those things all wrap together. Talk a little bit about the sense of urgency. People should have clarified to make sure they're putting a strategy like this in place well ahead of retirement. Yeah, that's very important in regards to planning because, you know, we see all sorts of timelines. And what we've discovered is that if you have more time to plan, the odds of success in that plan go way up than if you're trying to last minute throw something together or create damage control. So it is very important. The sooner you plan, the more you're putting yourself in a strong position. And the other thing about it is, is you could make mistakes along the way.

So if you're kind of waiting and delaying, planning, there's decisions that you have to make about your retirement and things along the path that could drastically affect. And you want to make sure you're doing it in the right way. So if you have that plan together ahead of time, you know, all those decisions and steps you're making that sometimes you're forced to make in certain points in your life are going to be in line with being the most tax efficient and maximizing. your estate and your money for yourself. And also doesn't the aspect play into it like human nature where it's like if I've got some emergency right now I've got to deal with in the next 10 minutes, I might not make the most logical calculated, you know, decision or response. Whereas if you, you know, so if you put this off to retirement, now you're just going, just go,

go, go, go. Whereas if you do it well ahead of retirement, you're making some wise choices, you're sleeping on it, you're coming back and taking a week or two or three, working with your advisor. and you know you high five over the plan go okay that feels good let's do it and you move forward and i think that you know most people would say yeah that that that's the best way to to move forward on on that that you know putting enough time ahead of the deadlines so that you don't make those mistakes yeah yep and in retirement for everybody's a little bit different lines so to even give a little more clarity is um the sooner the better as you're leading up to retirement but let's say

you've already stopped working i mean we want to make sure we really got things buttoned up before you hit that required minimum of distribution age. And let's say you're already there. Then it's even more detrimental because the more time you spend in that space, the more it could be costing you. And there's each stage of that game, there's solutions. But the important part is that you take action as soon as you're thinking about it

because that's the best way to ensure a higher success rate for you. Yeah. You know, we talk about taxes. And from a broad perspective, how do you coordinate taxes to mitigate as much as possible overall from the perspective of income withdrawals and social security because there's all of these things that play into it. It's like, oh, I've got some qualified money, non-qualified money. I've got some social security.

Oh, I've got this income stream from whatever. How do you coordinate all of that together into a plan that keeps more money in the client's pocket versus the IRS's? Yeah, that one is where it gets layered. So you do have all these accounts, as you mentioned. you've got Roth IRAs, you've got 401Ks, you've got non-IRA mutual funds, taxable accounts, you've got money at the bank, you've got all of these areas and all of them have a little bit different tax status to them and different growth potential.

And so if you've got a million dollars in retirement spread to these various accounts, it can mean hundreds of thousands of dollars to you increased estate based on which order you take your income from. So you might not realize that, but if you take your income in the wrong order, that can cost you hundreds of thousands of dollars by the end of your retirement, of which could go to your kids, your beneficiaries, give you a more beneficial retirement for your own needs, whatever your goals are.

That's so impactful to just know that the order in which you take based on tax status and growth potential and risk and all of that makes a huge difference. Again, you want a powerful software that can just give you that clarity and say, here is what the order is and here's the impact. You know, you mentioned kids and legacy, and it makes me think of this. I feel like a lot of people think in terms of stages in life, you know, I need to retire at this age. I need to have this much money. And the problem is they have a big question mark on how long will I live? Will my money, you know, last that long?

but then do you really want to die with zero dollars in the bank or do you want to have enough money to pass on to your heirs your family for that legacy and when you're we're thinking about taxes eating up money on the front end before you get to retirement in retirement you also need to think about the taxes eating up the money that passes to your heirs so that you're doing the right thing that way and at every one of those points there's opportunities to fine tune and polish right yeah absolutely and And that's where having a really powerful software comes in. I had a client that said, you know, Curtis, it doesn't do me any good to meet with some of these financial professionals that I've been meeting with because they do this really complex financial planning software. And then we finally establish a plan.

And then if I want to make a change, they say, hey, give me a couple weeks. I'll print you off a report. And then they said, Curtis, I get this big complicated report that I don't even know what the report. says, and it's almost like I need another software, tell me what the report means. So what we do is we are very intentional, put a lot of resources and effort into our software to make the complex simple. And then you can see it does all the heavy lifting for you, the taxes, the inflation, the longevity, the market risk, all of those medical bills. And then you can see, does your plan still work? You can actually see it live time on the screen.

My money does not run out in the last the rest of my life. And then if I want to make a change, I want to go on more vacation or I want to add something to my budget or my rental property. I want to sell it. Does my plan still work? And you can have confidence knowing that every move you make, you can see it live time, the impact right away. And simply what it means does my money still work for me? Neat.

Well, I think we've scratched the surface of taxes, but we've made the point that don't ignore it, plan well ahead to make sure that you're maximizing and minimizing every opportunity possible. So if someone is listening to this thinking, let's kind of start that process and take a look at my situation and get some of those printouts and where I get clarity, what's the best way that they can connect with you guys? Yes, Mike, the best thought is probably our website. It says great resources, what we try to make it for everybody. We've gotten positive feedback on that. So it's www.gOSBC.net. That's gosbc.net.

and you can find us as we see financial there as well as we've got our social media, our Facebook, our Instagram, our LinkedIn. So if you search us, you should be able to find as well. But I think that website would be a great resource. Perfect. Well, Curtis, thank you so much for coming back on. It's been a real pleasure chatting with you again. Thanks again, Mike.

I really appreciate it. 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.