Influential Entrepreneurs with Mike Saunders, MBA - Interview with Jack Peregrim, Founder of Fourth Quarter Advisors Discussing The Retirement Triangle

Episode Date: April 7, 2026

Jack Peregrim is the founder and President of Fourth Quarter Advisors and he has a long career in business and strategy including his 30 years as the founder and owner of PARAGON Development which focused on providing strategic management services to many Fortune 50 global corporations.On his ‘retirement’ he personally recognized the complexity in Social Security options as well as Medicare. And, there is very little support and education available other than that offered by individuals and organization driven by revenue received for selling products and services.Jack and others are trained and committed with Certified Financial Fiduciary® designations. And, we are volunteer presenters for workshops sponsored by a number of non-profits which are non-profit 501(C)3 organizations and support programs in a wide range of retirement issues.Jack is a Certified Financial Fiduciary ™ in addition to his involvement in numerous professional and personal organizations.Learn More: https://www.fourthquarteradvisors.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-jack-peregrim-founder-of-fourth-quarter-advisors-discussing-the-retirement-triangle

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 this Jack Peregrim, who's the founder of fourth quarter advisors, and we'll be talking about the retirement triangle, how income, assets and taxes secretly control your future. Jack, welcome back to the program.

I'm glad to be here and especially talking about this. Yeah, this has got a lot of meat to it here. Income, assets, taxes, and we don't like the word secretly control. So let's dive right into what that connection could be. What is that connection between income assets and taxes? Well, the issue there is that there is a direct connection among three things that we don't connect. Understanding that connection leads people to make the right decisions that are better for their family and they end up managing their funds to their benefit in the future, betterment. They will have more income, more assets, and a better tax situation. if they just understand that connection.

And just to give you a quick overview of it, income assets and taxes are three things that we manage separately. And unfortunately, what we do is we make decisions in the short term that typically seem right in the short term, and yet they could have a huge impact later. And if we change any one of the short term, of them, or if they are changed, what our income is, what taxes we pay, or our assets, any one of those changes, it's going to affect the others in the future. The effect will be real. It'll be measurable.

And what we want to do is educate people and understanding that, number one, that's going to occur, and how can we now look to make sure that any changes are positive in the future and not negative? That drives us. Yeah. You know, and isn't it also a factor, too, and we can get really deep into the weeds of like, you know, scientific, you know, type stuff. But when you make a change in one thing, it can have a big compound effect on the related things. So if you make changes to income, it can have a carryover flow effect to assets and taxes. If taxes change, it can have a backward effect on income and assets.

assets. And all of a sudden now, you can't just go, oh, yeah, this is a small change in this one category because it really can have an amplification effect. Yes. I think an example, we've talked about Social Security. And one of the more convenient things we could do is claim Social Security. That way we retire and we have this income that's going to be coming to us every month. And we don't have to draw down on our assets. But if I project that out and I look at the tax implications, of Social Security, letting my pre-tax money grow, puts me pay a higher percentage of tax on that in the future because I didn't reduce it when I could pay the taxes that are less. I look at that and it compounds. There's some stark examples of the effect this could have. Would you want me to give you one example?

Yeah, that'd be great. I recently met with somebody that when I met with them, this is the over, you know, the genus of what they told me. They said that they're 63 years old and widowed. They have one daughter. And I asked him about their financial situation. And the gentleman had sold a business five years earlier. And he had been living off the sale of the business for five years and hasn't paid a dime in taxes. and a CPA thought that was a great idea because they keep showing them out what little income they take and interest they earn.

They don't have to pay taxes on it. Their financial advisor thinks it's great too. Just keep letting the growth grow because they also had $800,000 from selling the business. And they said they could live 10 more years on the 800,000 and not have to touch anything else or pay any taxes. And I asked him about what do you have that's pre-tax money? And a gentleman at $3.2 million in his IRA. I said, wow, because that's really pretty good. And I said, you're not touching that.

He said, no, no, no, I'd have to pay taxes on. I said, okay. I said, do you have any Roths? And he said to me, I have 46,800 in a Roth. He said, well, I shouldn't say that. He said, I did until last week and I bought a truck. using my Roth money because it was within $100 of $46,800. Didn't cost me taxes.

I was able to use that, and now I didn't have to pay any taxes, and I won't this year. And I wanted to show him the connection of these. So I went and put it on a spreadsheet. I basically said to him, let's look at things very conservatively. I want to start with you at $3.2 million. I said you're $3.2 million. If it grows at 5% for 10 years when you're required to start taking it out,

it will be $5.2 million. And I said, when you start taking that out, it would be over $200,000 you will have to take out as income, declaring it as income. Between your Social Security and an annuity he had, he would be having declared income over $300,000. He's declaring nothing now, but $300,000. He would be paying 35% tax on the same funds in the future.

So I look at the fact that he's paying 35% on that money, and I took his $46,800. I said his standard deduction is $16,000, so he's not going to pay zero tax on that. and he'd only have to pay 10% tax on the balance of it if he used taxable income. And I just showed him that if he took the money out of the $3.2 million, set of the Roth, and the same $46,800, he paid zero and then 10%, I showed him what that would mean for the 20 years of his expected life.

I then took the Roth that would be growing tax-free. I said, okay, if you have 46,800, it only grows at 5% per year. When you die, here's the additional money you would have that would be tax-free. I then subtracted what he paid for the truck. So take the truck out of it completely. It ended up costing him $334,000 more because he used the Roth and didn't try to wash tax out of his $3.2 million. Now, he's still healthy financially.

There's no question. His daughter is not going to get $334,000 she would have. However, I only addressed $46,800 out of his $3.2 million. Do you ever look at the impact of washing the tax out to avoid 35%? When he could, yes, he could pay 12% after the 10% for quite a bit. And the difference between paying 12% versus 35. Just an example. What he did was he was getting his income in one way and it wasn't the most optimal way.

Convenient, yes. Easy, yes. He's in a savings account from selling his business. So why would he not use that? It was so easy and convenient. seen the logical thing to do. His assets, he was letting the wrong assets grow. And as taxes, he wasn't at all considering the impact he will have long term in his taxes.

I can't tell you that top of line, he was well over a million dollars, that he will end up losing in taxes. He should have washed out. It actually was closer to $2 million. And it's 20 years. So it just shows that a lot of things we're doing today, we just don't recognize that there's an impact. Yeah. Between income,

assets and taxes looking long term. You know, it reminds me of something I've said over and over to my kids. You know, it's kind of like life is like playing chess. You make a move and leave your finger on the piece and look around. Was this the right move? Because as soon as you take your finger off,

it's official. You can't change it. well, he should have called you up and said, hey, Jack, I'm thinking about doing this and pulling this and doing that. You would have run that calculation and said, hey, why don't we consider this? And he would have gone, hallelujah, that's a wonderful plan. So it really gets down to what you've mentioned a few times, which is the invisible money concept. So talk a little bit about your invisible money planning sheet, which could really help, you know, prevent some of those mistakes. Well, a very simple construct. We basically have three columns, income, assets, and taxes. And then typically in retirement, we find that people go through three phases as they phase into full retirement. So we have it further broken down under each one, zero to three years and three years to ten years and ten years and beyond. And we encourage people using those spaces.

to just put notes that I'll use the word strategy, and I think everyone should. What is our strategy for income in these next three years? You can put down, as a couple we'll talk about, or an individual, I will delay my Social Security. I will get my income from using the right funds, not Roth, but they might say I'll use my retirement account funds while through the lower rate. I will then, in the three to ten year, I will be receiving my Social Security. I might be receiving the annuity this person had in his case.

And the 10 years and beyond, now they're going to have required minimum distributions that they're going to be receiving. So they would put just the right strategy because when they have it all on one page, they're thinking through the other two items under each column that are connected. to them. The main thing is, yes, you can engage professionals, but professionals are specialized and they don't deal with that. You have one person that deals with taxes. You have another person that manages your assets. And you don't really have one person that manages your income. It typically comes from many different sources, Social Security and investments, and your

investments can be in different institutions. So there isn't one way. to do it. It's up to us as individuals first to be enlightened and understand that there is a connection between them. And if we understand that connection, we want to think forward. I love talking about the invisible money, and a lot of that is if I'm 10 years in the future, what do I wish I would have done right this minute and say, thank God I did that because now 10 years later, I optimize things instead of losing things and falling into traps because I didn't consider these. And many of those considerations is not a lot of work.

It's just taking that extra small amount of time to do it right the first time. In college, I worked for a guy in it for a plumbing company. And when one of the crews would come back and go, oh, Mrs. Johnson's job. we need to go back and fix this thing and it wasn't done the right the first way. And he goes, why didn't you do it right the first time? And they go, oh, we were just busy. And he goes, listen, if you don't have time to do it right the first time, when are you going to find time to do it right the second time?

And so it just starts compounding. So these are not things that are high level that are going to take months and months on in. It just means think about it ahead of time. And I love your strategy before tactics point. about 15 years ago, one of my taglines I used to use was strategy, tactics, execution, because it's almost like ready, aim, fire, but most of the time people are just like fire, fire, fire, they don't even get ready, they don't even aim.

Well, in my strategy days, we used to, I used to talk with my European clients and we had to come to an understanding because the American approach to growth and investment was ready, fire, aim. And the Europeans was always ready, aim, aim, aim, aim. And it was a good combination when they would get together and coordinate that. But I want to comment on one thing you said. We do want people to take the high level understanding of what's going to happen. And I'll go to one other column. I'll go to both columns, actually.

If I go to the tax column, we now have taxes in 26, 27, 28, unless midterms change it, that are the lowest tax rates we've seen in our lifetime. Those are the marginal tax rates, the percentage of tax we pay. I'm going to say that one out of maybe 20 people we meet with have ever looked at their taxes 10 years out. Oh, well, how do we know what it's ever going to be? Make two assumptions. Let's say it doesn't change.

It's still going to be based not, it's going to be based on percentages, but also based on what level you're at. Now, do your projections. And I'm not talking about whether you earn 3.2% interest on something or just knowing high level, round things off. what relative tax level are you going to be at in the future? If we understand that, then we recognize that we will be at a lower rate likely now,

which means I want to pay taxes. And boy, that's counterintuitive. Nobody wants to pay tax. And wait a me, you're telling me I want to write a check today. And our own advisors don't want us to do this. They don't want us to do Roth. conversions or anything that'll be beneficial because if I have to pay 20% tax between state and federal and I have $100,000 and I want to move 80 into a Roth and I can do it and pay less

taxes than I will in the future, which means I'm going to end up with both more money and move with the tax free. Think how great that is. That's your sweet spot. But if I'm an advisor and I'm getting 1.2% of 100,000, I don't want to get 1.2% of 80,000. So number one, the organization that with doesn't explain that to me or teach that, but it's just not in their playbook. It's now the other column, the assets column. Some of the things you want to do is you're within five years of retirement is you want to address the assets in several ways. It's best practice and long-term returns.

If number one, I rebalance my portfolio, any good retirement planning book is going to tell you you hit retirement. You should have three quarters of your funds that are out of, risk of any losses. People in their 50 years old, they're told they should have 60% stocks, 40% bonds. I don't know, have anyone, or just say very, very few people that under 50 years old have 40% bonds to only 60% stocks and mutual funds. We're overweighted with stocks, and we can't, And the reason that this is there as the right strategy is because when we have our income years, and there will always be downturns in the market and it always recovered.

However, when we reach our retirement years, we draw down on those funds. We don't have the income anymore to allow it to recover. And now any downturn that we do have, and we will have death and taxes and downturn. We will have them. Now it drops. And if we're drawing down while we're trying to come back, we will not get back to where we were. You should be rebalancing a portfolio, keeping a higher rate that can't lose anything. And you're going to earn a boring amount on top of it because you're not taking high risks.

And you're not getting high rewards. There's no question about it. But if I gave you an example, I have $100 and I have a downturn, I go down to 80. Well, I wait and it's going to come back. However, when I'm at $80 for me to come back to 100, I have to go 25%. But if I'm at starting that process of trying to earn 25% back and I have a downturn, it isn't just a one-time thing, it's over a couple of months, It could be over a couple of years.

And I won't get back because I'm drawing down on it. So I lose 20%. But I need to take out 5% because I needed to live on or I'm doing a tax wash moving at the rust. I'm doing something else. Well, now I'm at 75%. I have to have even more growth than is plausible. And what if I take out 10%?

I'm at 70%. Well, that means I have to increase my funds, 42% that get back just to where they were. So a key here is you do want to rebalance your portfolio. It's not just so that you could be on a beach or a golf course and not worry about what the market's doing. It's really because for practical purposes, we want to protect the base we have. And any good planning book will tell you this. The second issue, we want to change the legal status of our funds. So I'm looking at the asset category.

In the legal status of my funds, I've got three different legal statuses with three different tax implications. I have pre-tax money. 100% of it will be subject to income tax at whatever rate I may be when I take it out. Now we're in the future. The second legal status is money after I paid my tax. taxes. But that doesn't mean you're finished paying taxes. If I invest it and I earn money, I pay taxes on that. If I earn interest or dividends, I'm going to pay income taxes on that on an annual basis. But I will be taxed on that again. And the third legal status is Roths. And with Roths,

you've already paid your tax and you'll never pay tax again. It'll grow tax free. So your asset strategy should incorporate moving things from the tax status that's 100% taxable to no tax. And now that, you have to consider the taxes because if I take money out, I want to pay less taxes than I'll end up paying in the future. So it can I end up with more money and move with the tax-free. You see, they're all connected. And we want to manage, as long as we understand that we do have a connection with them and anything we're doing, actually anything we should do. We may not be doing it,

but we should be rebounds in portfolios and doing other things moving to Roths. Project them out considering the taxes. What's the implication long-term in the taxes for me to move money to a Roth in this year? And my income. How is that going to affect my income in the future?

Because maybe I move money into a Roth, which means I have less in my IRAs 401Ks, which means that when I have to start taking it out with a defined percentage, the government won't force me to take out more than I need and drive me to higher brackets. So I might help myself two ways by moving to Roths where I wasn't considering doing that. So there's just so much connection. I couldn't begin to tell you how many different scenarios you could look at, but the key

first is knowledge and know that there is a connection, direct connection with those three. And second, look out into the future and understand the implications of any changes made or any changes you could make that will be beneficial later on. I love it. Have a multi-year, 10-year projection future to where you're making moves today that will benefit your future self and be strategic and intense. intentional, don't just hope for the best because, as we know, hope is not a strategy. Jack, you've laid out a whole lot of great overarching tactics here and strategy to execute on.

So if someone is interested in saying, you know, a couple of those points really resonated with me, what's the best way they can learn more and reach out and connect with you? Well, they can always contact this through our website, fourth quarter advisors.com, F-O-U-R-T-H-Q-U-A-R-A-R-A-D-V-I-S-O-R-A-D-V-I-S-O-R-S-O-R-S-O-R-S-O-R-E-V-E-R-E-V-E-R-E-R-E-R-E-R-E-R-E-R-E-R-E-S-E-R-E-S-E-E-S-E-E-S. If I can help you with just some information on the phone, I'd be glad to. 203-507-38-26. Jack, once again, thank you so much for coming back on. I've really enjoyed your wisdom. It's been a pleasure to talk about this.

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