CPAacademy.org Check-In | Episode 12: Dave Hall

Christine

Dave, welcome to this episode of the CPA Academy check in. We're so glad to have you here today. I am personally honored and excited to interview one of our top presenters at CPA academy and a dear friend of mine. So before we get started, I'd like to tell our audience a little bit about you. Dave hall is a CPA public speaker, webinar presenter, podcaster, retirement risk advisor, and all around a great guy. After graduating with his master's degree in accounting from Southern Utah University, dave moved to Las Vegas, expecting to die there as a tax accountant. It was going great until he realized he had a greater passion for helping people get safely through retirement than he did for helping them get safely away from the IRS. To follow his dreams, Dave left his role as managing partner of the accounting firm that helped build into one of the largest in the history of Las Vegas.

Eventually, he moved to Puerto Rico, where he began piecing together what would allow him to share his knowledge on what it takes to get to a tax free and risk free retirement with thousands of people just like you, dave now lives in Tennessee and spends most of his time educating CPAs and EAS on various retirement topics. And with that, let's dive in. 

So, Dave, what first interested you in retirement planning, and why did you start retirement risk advisors?

Dave Hall

Thank you, Christine. The biggest thing for me was that I realized that the plan that was being put together for myself was not working. I'd gone to many advisors. I was raised very poor. My family never had a retirement structure. So it was very important for me to get the right process for my retirement. And so I started meeting with various advisors, putting tools in place, and I started seeing those things fall apart. I saw 2000 hit and the.com crash. I saw 2008 hit and the mortgage debacle and all this stuff helped me realize there had to be a better way, that not only should we be at a point that we had the money we needed, but that we had a structure that would allow us to use that money effectively. And so as I put my own plan together, it helped me understand that many other people needed this.

I didn't just need it for myself. I need to take the knowledge that I was gaining and be able to share it to the world. And so that's what we've tried to do over the last number of years.

Christine

Well, that's a perfect segue to our next question here. So what are some challenges that individuals face in the current retirement landscape and what steps can CPAs and accounting professionals take to address these challenges?

Dave Hall

Yeah, the biggest challenge that I see that most people deal with is we're still trying to build our retirement on 1970 foundations. The 401K comes about 1978. The IRA comes about 1974. And were taught that we needed to defer our taxes, that we needed to put the money into these accounts, allow them to grow, and then at some point in the future, we'd be able to pull that money out at a cheaper rate. But what we're finding is that is not the case, that this structure that we've been using now for decades isn't working because there's a number of things happening in our lives that weren't happening in our parents lives at the time these were put together. We're living longer, we have more risk, we've got tax rates that are going to be higher in the future than lower. All these things have an impact on the old retirement plan that most of us have been using and that seems to be causing a lot of headache in the people we work with and the plans they're trying to put together.

Christine

That's fascinating. Who ever thought that living longer would become a challenge in an industry? So in your experience, have you found any innovative income strategies that accounting professionals can explore for their clients to ensure a sustainable retirement income stream?

Dave Hall

Yeah, it's very interesting you ask this question because this is one of the big things that we talk about. I find it so interesting out there that we as Americans get paychecks for decade. Assume that you probably get a paycheck and you're very happy when it comes in each, every two weeks, every month, whatever the case may because you can then use that money to pay your bills and all those things. But yet we get into retirement and for whatever reason, we think we've got to be the next Warren Buffett. We need to be investors and somehow we're going to make all this money off of our investments. And yet we don't focus on that one thing that kept us so happy for so many decades, and that is income. So part of what we do in our retirement planning is to make sure people have paychecks and playchecks, that they not only have their Social Security, what's going to cover about 40% of their living costs, but they also have products like indexed annuities that would allow them to get guaranteed income for the rest of their life, to make sure that they can pay those bills that they can get through the various costs they have as well as having extra money.

So if the market drops or things change, they can still enjoy the vacations, they can still go do those things with their family that, unfortunately, many times when people are using an investment model can't do. Because if the investments go down, they start to panic and the first thing they do is start cutting their budget.

Christine

Right. So taxes can have a big impact on retirement income. Could you share some of your insight on how to help clients minimize their tax liabilities during retirement?

Dave Hall

Yeah. The biggest thing that you got to remember is that what you've been told isn't necessarily the truth for most of us. And that is, were told I was told this back in 1995 when I got into the industry, that when I got into retirement, I was going to pay less tax because I was going to have less income. Now, Christine, yes, we oftentimes have less gross income, but we don't have less taxable income. Reason being is because we lose all of our deductions. If you're someone like me with eight children, that's a lot of deductions. You've got education credits, you got child tax credits, you got the mortgage. All those things are going to be gone. Plus, you stop putting money into your tax deferred account, which many people have used as a large deduction to benefit their taxes, and we're spending more. So what we've got to understand is that we've got to look at where we are right now.

Historical low tax rates only been lower four other times in the history of America and realize now is a good time to do Roth conversions. Now is a good time to get money into these accounts. Permanent life insurance, so that we can get the tax man off the table and realize that, again, our taxes are not going to be as low as we. Think because of all these things that are going on in the industry that are so much different than they were for our parents and our grandparents.

Christine

Absolutely. So estate planning is another essential aspect of retirement planning. Do you have any estate planning considerations that accounting professionals should discuss with their clients to help them preserve and distribute their assets efficiently?

Dave Hall

Yeah. The biggest thing that I would recommend when looking at this is those big IRAs. This is probably the biggest issue that I see when I meet with people. It's very interesting that someone can get $2 million in an inheritance that's going to be tax free that they're super excited about, and then they have $100,000 IRA they're going to have to pay tax on. And that becomes the big sticking point. All of a sudden, they're upset at mom or dad because now they've got some type of taxable income. So the biggest thing I would recommend when doing estate planning is make sure you're spending those regular traditional IRAs down. First, get the tax bill out of the way, especially since many retirees, your bill is going to be much lower than it will be for your children or your beneficiaries and then transfer to them those tax free assets.

Now, most of us in a situation, we're not going to need to do a ton of estate planning using islet trusts, those trusts that are set out there to help people avoid tax in retirement, to do gifting and such. Most of us aren't going to have enough assets to worry about that. So what we want to do is make sure what we transfer goes tax free so our beneficiaries get the full benefit rather than giving a bunch of that to the federal, state and local governments.

Christine

This is why I love talking to you, Dave, and listening on your webinars. I feel like I learn something every time and realize that I really need to be more proactive with my planning now and not later. So thank you for that. You have a popular webinar in CPAacademy that talks about the benefits of Roth IRAs and why they are considered a great retirement tool. So in your experience, what are the advantages of Roth IRAs compared to traditional IRAs, and why are they particularly relevant for individuals planning for retirement?

Dave Hall

Because what we're seeing is a substantial change in the way the world's working. Again, if we go back to when the traditional accounts were put into place, the brackets back then were 70%. So it made a whole lot of sense. I mean, you get up to a 70% tax bracket if you can imagine putting money, making enough money that you're having to pay this. So we put all this money into these tax deferred accounts. Well, now we're in this period of historically low tax rates with the belief that taxes are going to have to go up because we have Social Security that's going to have financial issues somewhere around 2035. We've got Medicare going to have issues around 2028. We've got the national debt that we expect to be about 50 trillion by 2030. If you've got all these unfunded liabilities, the only reasoning we have to be able to get to where we need to be is that we're going to have to raise those taxes over time, that we're going to have to increase those maybe back as high as what they were back when these plans were put into place.

So Roth accounts make a whole lot of sense if we say we can pay our taxes today, for most people, maybe a 24% tax bracket is where we're expecting people to hit versus what David Walker says, then at a decade from now, we could be double that. You could be paying it at a 48%. If you can use a Roth to be able to take that off the table, makes a whole lot of sense to do that. Now, I will tell you, Christine, and any of those listening, please do not go out and do your conversions all in one year. Please don't try to make all this happen overnight. You didn't get there overnight. To have millions of dollars in your traditional account going to take you a number of years to do it correctly so that you can systematically use your tax brackets over time and get yourself where you need to be by the time you get into those retirement years.

Christine

Wonderful. Well, you offer a truly personalized approach in your work with clients and in all your webinars that you offer here at CPA Academy. So do you have any advice on how to incorporate a more personalized touch into retirement planning services and why you believe this approach is important for client satisfaction and success?

Dave Hall

Yeah, luckily, I was born to be very caring person from the time I was a little kid. I don't know how I got blessed to have that instilled within me. But if you can care as much about others as you do yourself, you're going to be in a position to where you're going to be able to help people and be able to get them where they need to be. I remember back when I was doing taxes, we'd hired a new tax manager. And typically, when you're doing someone's tax returns, if they've got multiple returns, we would hold all the returns to do them together to make sure everything made sense so we could have a good overview with our client. Well, she would do them one at a time. She'd finish it, she'd process it, go to the next one, finish, process. Well, these clients would get these returns, and many times there would be things that weren't correct because all that had not been consolidated together.

But she just wanted a clean desk, like, hey, I get it off my desk. I get onto the next project. We realized very quickly this was not going to work well for us in our office, so she didn't stay with our firm very long. But as I look at what we do now, it really is saying, okay, if I'm going to plan for your retirement, I need to do the exact same things for you that I would for me. And that's one of the things that I would say I've been blessed with. And I'd encourage any of you out there that are struggling, look at your client and say, if you were in their shoes, what would you do? And then not be afraid to share that information with them. So many times we're afraid somebody's going to sue us or someone's going to have all these problems with us sharing our opinion.

The greatest thing I've been able to do is say, Christine, if I were in your shoes, this is exactly what I would do. Now, you can choose what you want to do, but this is what I would do based on the knowledge I have and the facts and circumstances. And I can help you do that if you'd like us to be part of the planning process.

Christine

Love to hear that, Dave, especially in this day and age where I feel like that personal touch is disappearing slowly in every industry. I think that is so important. And I can vouch for you that you are truly a caring person. And like I said, I feel honored to even call you a friend and a colleague. So wonderful. Thank you. And we here at CPA Academy appreciate the work that you are doing and the expertise and the content that you're bringing every day through your webinars. Are there any last thoughts you'd like to share before we wrap things up today?

Dave Hall

Yeah. The biggest thing that I would tell people is you need to start spending more time on your retirement than you do your next vacation. Unfortunately, it's been proven that most of us, if we're going to go to Val, Colorado, and do a ski trip or we're going to go to the beaches of Puerto Rico, enjoy the Caribbean, that we're going to spend more time doing that each year than we would putting our retirement plans together. And, folks, it's not going to take endless hours, but if you'll make it a priority, if you'll take the time to be able to put the pieces together, what you're going to find is it's going to pay huge dividends for you in the end. We're architects. We're putting plans together that are helping people solve issues that, once they're solved, there's not a lot of work that's got to be done in the future to keep them solved.

Dave Hall

But if we don't solve them in the first place, many times we can get ourselves behind the eight ball to where we can't solve the issues because maybe our health's changed, maybe our situations change financially to where now we can't do the things we used to be able to do. And so don't wait. Make it a priority again, we're happy to help you if we can. We're here to educate you through the platform to be able to give you the training you need so you can make good decisions, so you can get yourself safely through retirement.

Christine

Fantastic.

Well, we will make sure that everyone has access to your contact information and your upcoming webinars on our website. Thank you, Dave, for your time today. It is always a pleasure catching up with you.

Dave Hall

You're welcome.