Category: LIFE

By Randy C. Cowell, ACT Financial

Now that I have your attention, let’s start by shedding light on the grim future of taxation in America.  

Hop in the De Lorean and let’s go to 1980.  Seymore Durst, a New York Real Estate magnate, did a few infamous things pointing to our rising national debt. Frustrated politicians were unwilling to take action, in 1989 he built a National Debt Clock near Times Square trying to jolt the country to action.  Still ticking 30 years later, the National debt eclipsed the 21 trillion-dollar mark.  That’s a 21 followed by twelve zeros! 

Hop back in and let’s stop in 2004.  Allow me to introduce you to David M. Walker.  Walker served under Bush 41 as one of two trustees for Social Security and Medicare. He also was the Comptroller General and CEO of the Government Accountability office under Clinton.  In other words, he was the CPA of the USA under two presidents from opposite sides of the political tracks, noted as a well-respected nonpartisan and apolitical public servant.  

Armed with statistics and the fact that the first of 78 million baby boomers would be ready to tap into Social Security in a few years, Walker sounded the alarm where he could.  For Walker, the writing was on the wall. In 2005, with the assistance of several financial heavy weights, such as, Federal Reserve Chairman Paul Volker, they began crisscrossing our nation on a campaign called the “Fiscal Wake-up” tour.  Their mantra: “Taxes could and most likely will have to double in the future to keep our country solvent.”  In 2008, David Walker resigned from public service to continue his crusade.  In 2010, he wrote Comeback America-Turning the Country Around and Restoring Fiscal Responsibility.  It’s an easy read and you won’t want to put it down. 

Now that everyone is in a good mood, let’s jolt our baffled selves back to 2019, where we can discuss some strategies to potentially buffer/insulate you and your family from the oncoming taxation freight train headed our way.

Provisional Income 

Not familiar with the term?  Don’t feel bad. Most Americans do not understand how the Internal Revenue Service uses provisional income to calculate the taxation on their Social Security income. What is considered provisional income?  All 1099 income and all ordinary income. That’s code-speak for pretty much everything not “qualified.”  In addition to that, income is anything from your pension and any withdrawals from your retirement plans. 

So, if you don’t want to pay taxes AND you don’t want 85% of your Social Security benefit to be taxed, what can you do now to get to a lower, dare I say it, maybe even a zero tax bracket?  I believe the first step is recognizing what a truly tax-free investment* looks like.  

Here are the four rules that must be met to truly qualify for tax free status: 

  • It must not be taxable at the Federal level.
  • It must not be taxable at the state level
  • There cannot be capital gains taxation associated with distributions 
  • Income from the investment CANNOT be included as provisional income. 

Even a municipal bond, if purchased out of state, can fail three out of four requirements.  Would it surprise you to know there are only two truly tax-free investments?*  

Roth IRA’s** and specially designed life insurance***.  Whether it is a muni bond, mutual fund, rental property, or the thousands of other investments* available, these four rules must apply to qualify as a truly tax-free investment*.  

  •  If David Walker is right and tax rates must double in the future to pay for our debt and all the unfunded entitlements, how prepared are you and your portfolio to weather that storm? 
  • Knowing that unless congress changes things, at the exact stroke of midnight, January 1, 2026, tax rates are going up– are you going to take advantage?  (i.e. taxes are on sale for the next 8 years)
  • If you could receive your Social Security tax free and perhaps your qualified retirement income tax free, would that be a conversation worth having?  

The concepts and strategies mentioned in this article are guidelines and it is always recommended that the reader(s) seek wise legal, accounting, and investment advice.  It goes without saying that the tax code we are dealing with today could change.  True, but there is a history of legislative changes that over the years have “grandfathered” certain investment products.  Life insurance is one of those investments that historically has been grandfathered.   

Future tax code changes are inevitable.  The treatment of products and the applications surrounding them are subject to legislative change. Until these things change, wise strategic planning is a necessity.

For additional information on how to get to the 0% tax bracket in retirement, please call our office at (918) 664-0081. 


RANDY C. COWELL, MS, LUTCF, CFP®, CRPC®, ACT FINANCIAL SERVICES, INC.

Randy is President and Senior Strategist of ACT Financial Services, Inc in Tulsa, Oklahoma.  He is a Certified Financial Planner®, Chartered Retirement Planning Counselor®, Investment Advisor Representative of HTK, Inc. and recognized as a Fellow by the Underwriters Training Council (LUTCF).  His expertise combined with a unique “Biblically-based” philosophy, has served his clients well for over three decades.  Randy can be reached at (918) 664-0081 or by email at rcowell@htk.com.


 *“Investment” as used in this article is a blanket term for any vehicle in which you can save money.  Examples would be saving accounts, life insurance, stocks, bonds, mutual funds, etc.  You get the idea.  

**There are income restrictions that could prevent one from participating in a Roth IRA.  There are strategies that could be implemented to take advantage of the Roth and Roth conversion so speak to your financial adviser, tax adviser, and group benefits coordinator about whether you qualify for a Roth IRA or Roth rollover. 

***Life insurance that is characterized as a Modified Endowment contract does not receive the same tax treatment as a Non-MEC version.  Please consult your tax adviser for further details on Modified Endowment life insurance.  Registered Representative of and Securities and Investment Advisory Services offered through Hornor, Townsend & Kent, Inc. (HTK), Registered Investment Advisor, member FINRA/SIPC, 4111 S. Darlington Ave., Suite 800, Tulsa, OK 74135, (918) 664-6511. ACT Financial Services, Inc. is unaffiliated with Hornor, Townsend, & Kent, Inc. HTK does not provide tax or legal advice.  2247317RM-Sep20

Maintenance on an AC/heating unit isn’t fun. In fact, it’s so fun that it’s rarely done. We live in an era where we just expect units to keep our homes at the right temperature for comfort. They’re just supposed to always work. We’ve even invented thermostats that can help us control the temperature when we’re sleeping or not in the home with timers, smart phones and even the dreaded Alexa. (Don’t get me started on her! She’s the only one in our family who gets directions upwards of 8-10x and still gets them wrong).

Having a mid-90’s home we bought and started renovating in 2017, the last thing we wanted to spend more money on was heating and cooling. The units MIGHT be original (don’t judge us!). With the warranty negotiated with the purchase of the home, we cycled into keeping the warranty hoping the units fail and we can upgrade the new ones. Last year, I called the warranty company over 6 times due to temperature issues. I waited 3-7 days each time for my turn. One time included a very expensive leak that spotted my ceiling in two places and caused me to hire a sheetrock guy and a painter.

The warranty company claimed our water was from a leaky roof. Came and went. Nope. For a week, my daughter and I slept upstairs, as my husband was in Colorado hunting. The warranty company’s repair team then shut down the same week for vacation. I’m sorry. What? And, believe it or not, the other A/C upstairs started dripping water from the vent. The only saving grace was the vent being above the toilet (and us sleeping upstairs of course,  as I rarely have cause to go in that guest room bath). All this with my hubby only accessible via satellite texts? Really? Oh come on.

I couldn’t take it anymore. I called Air Solutions.  They pulled in with the cute green mobile unit (I know, but it is cute—I’m sure you’ve seen it). Anyway, turns out the unit WAS leaking. It was fixed the next day after the call. Hunt away hubby! Mamma’s got this. Finally, in a home with not one, not two, but 3 air conditioner units, my dearest daughter and I could enjoy some modern comfort of cool air!

I’ve used Air Solutions dozens of times in my dire emergencies—once at Grand Lake in 2017 (they do go that far!) when our vacation rental property was quickly losing wonderful summer cash waiting on the warranty company.  Sometimes you just can’t take it anymore, warranty or not.

When we bought the magazine, they were the first company I called to support us as the advertisers, as I wanted a good excuse to share my own experiences. See, they don’t know it, but the incident above with my daughter transpired at the exact time we were praying about purchasing the magazine. My mind was a wee bit stressed thinking about the financial burden, while also feeling called to help impact this city for Christ. My daughter was missing her daddy, uncomfortable, not sleeping well AND not liking her new school. (Lights dimmed for lunch. No talking. For 3 year olds? Really? I digress). We all know how much we grow to depend on the hubs to just take care of things, especially the things we take for granted like our heating/cooling system. Air Solutions played a big hero part in that story. They cleared the way, helped me clear my head, and God used them to help me breathe again (much cooler air I might add!). The half dollar satellite texts to my hubby got to stay focused on discussing this potential calling. Now, here we are!

Next time I’ll share about their home plans to help save you from my kinds of stressful messes!

Air Solutions

918-288-0305

www.callairsolutions.com

It’s a specialty we are becoming more familiar with by the day.

Migraine headaches, a more common neurological condition, can undermine your ability to function.  Alzheimer’s and dementia have touched most of our families in some way by now, tearing away precious memories and sound minds needed to even do daily life. Seizures. Multiple Sclerosis (MS). ALS.  The list goes on. The problem with all of these diseases, aside from their caustic nature, becomes specialized treatments to understand the root cause.  So many neurological symptoms can mirror other diseases, which can make them seem impossible to treat.  Plus, the lack of knowing where to go to really get someone who will actually listen can be debilitating in its own right.  Until you’ve experienced a life altering neurological set of symptoms, you don’t really understand.  However, once you do—you’re ready to talk with someone who will listen.

Enter Dr. Jorge Gonzalez, neurologist, who integrates his faith with his medicine, bringing a full realm of complete care. He’s a neurological specialist in Tulsa, who recently left his other practice to open his own facility with a different kind of care.  Patients express such appreciation for Dr. Gonzalez. They explain his level of attention has been unmatched in their experience.  CSM recently spoke with Charles Samuel, a migraine sufferer and patient, to better understand some of those differences.  Charles is a kind-hearted retired policeman and security in Jenks/ORU, former SWAT EMT from Atlanta, and a man dedicated to his walk with God.  Charles suffered migraines until he couldn’t bear it any further. He found Dr. G many years ago and has followed him ever since.

“Initially, several years ago, my primary care physician recommended Dr. G for migraines I was having. That was our initial contact. He’s such a thorough physician. He just paid such close attention to small details, for which I’m grateful, because I’m a complicated patient. I’ve had over 12 surgeries. So, whenever he left to go on his own, I followed him.  I went and got my records and there I went. Just because I love what he does. I mean, while treating me, he also prayed for me.  Took it to a new level really.  I learned at ORU that the trinity of us, our body, mind, and spirit—it all works together.  It really is a blessing to have such a highly trained physician to be there for you. He cares not for your business but truly cares for you as a person.”

Charles said, “Dr. G really pushes for the etiology or the causation of your neurological issues. There were some major issues he discovered with me that could’ve caused serious problems later. He pushed me on my history and I found some genetic links to my migraines.   I was just so impressed the first time he sat with me. He actually talked with me. Then he said ‘Ok. We’re going to check everything. Let’s do a full neurological assessment.’  I was losing my balance. The test revealed a small autoimmune situation going on. He was able to put me on steroids and I haven’t had issues with it since!” He said, “As a patient, I also felt better that we had time to talk. There are no beepers. No rush. Once he’s there he is there 100%. He’s listening to his patients with sincerity. Not half listening. Not half paying attention.” 

Charles explained further, “It’s a complicated system now to get care.  Dr. G decided despite that system, I’ll still give my patient this high-end service. You can’t beat that.  I’ve even received personal calls from him checking on me. To get that type of call from a gifted neurologist, much less any physician…I mean, he’s taking the time to call me to see how I’m doing. He did that himself.”  It was easy to tell Dr. G’s thorough care touched Charles’ life. More than that though, Charles explained “Besides his scientific and medical wisdom, his faith is paramount in his life and it just ups the care you can receive from him. All this just adds up to a really good guy, a good neurologist, and a good man of God. I believe his faith guides him.  It’s a blessing to me to have a physician like him.  To have a doc you can say ‘Can you pray for me on that?’ it just matters to me and I think it improves the care he gives me.” 

Dr. G operates a concierge neurology practice off of 68th and Yale. He’s also launching 3 new research studies for migraine sufferers, Alzheimer’s/dementia, and seizures in 2019.  If you or someone you love suffers from any of these afflictions and want to be part of the study, just reach out at research@tulsaneurospecialists.com. The hope is the research studies can facilitate getting proper treatments to patients more quickly as they partner with some of the best in the business.

Jorge A. Gonzalez, MD

5010 E. 68th St. Suite 102 Tulsa, OK

918-236-5881

www.tulsaneurospecialists.com