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Steven Jarvis, CPA (00:49)
Hello, everyone, and welcome to the next episode of the Retirement Tax Services podcast, financial professionals edition. I’m your host, Steven Jarvis, CPA, and once again. It has to be one of my favorite episodes alongside a fellow Jarvis Matthew. Welcome back to the show.

Matthew Jarvis (01:05)
Steven, thanks for having me, man. It’s good times. I guess we should clarify for long-time listeners, we are brothers who have been for a long time, your whole life, most of mine, as the older brother. But I know it’s always fun to get on and kind of look at the intersection between tax planning, right, or taxes and financial planning and kind of where those intersect and where they overlap.

Steven Jarvis, CPA (01:22)
Yeah, really excited to be kicking off another great year. Here we are listening to this in January and I’m gonna be the first one to say, it’s not time to just think about tax preparation and certainly not time to wait 10 months to do tax planning again. If we wanna win, not just as tax professionals on my side of the table, but as financial advisors for sure, it’s all about doing the simple things consistently over time. So we’re not gonna talk today about getting all your clients to move to Puerto Rico, or about tricking the IRS into thinking that everyone somehow has real estate professional status. I mean, really, we’re going to use a pretty routine example as far as how often it comes up, but really talk about how we can use it to set ourselves apart in the experience that we’re providing for our clients.

Matthew Jarvis (02:02)
Yeah, 100%. If we don’t have the foundations in order, nothing else will matter. This is why we’re a big advocate of the one-page financial plan. I talk about in my book, Delivering Massive Value, because if clients aren’t doing the first level things, we don’t need to do the second level things, right? And specific to taxes, like if clients, if it’s a working client and they’re not doing IRA contributions or Roth contributions, we don’t need to talk about doing backdoor ones, right? Or we don’t need to talk about doing mega 401k contributions if they’re not doing just 401k contributions. Or we don’t need to talk about irrevocable asset protection trust if they don’t have a will in place. So this is …RMDs can seem really boring, but if they’re missed, it’s one of the steepest penalties in the tax code and it’s one of the most misunderstood things with clients.

Steven Jarvis, CPA (02:39)
Yeah, so required minimum distributions for anybody who is working with people who have pre-tax money. Eventually, if you’re not already working with people in their retirement years, which still seems to be most advisors, because I mean, just like that’s why robbers rob banks, because that’s where the money is. We work with a lot of people, pre-retirees, and retirees. I know that’s a huge part of your practice, Matt. But eventually, you’re going to come across these if you’re not already doing these. Matt, if you just had to swag it, how many RMDs do you think you have helped process over the course of your career.

Matthew Jarvis (03:09)
geez, I have no idea. I guess I could extrapolate it out. I’ve moved about 150 clients. I’ve been in the industry for 23 years. I don’t know, hundreds, thousands, I suppose. Yeah, definitely. I definitely have thousands of discussions on this, right? Because I’m going to discuss RMDs with basically every single client kind of over the age of 60. Now you might say, hang on a second, required distributions don’t start until 73 for your own lifetime.

Steven Jarvis, CPA (03:21)
Probably thousands.

Matthew Jarvis (03:33)
That’s true, but around age 60 is when people start thinking about required distributions. Like that starts to enter the vocabulary. About age 68 is where I need to be talking about every single year. Hey, Mr. and Mrs. Client, as you may know when you reach age 73, so I would tell them that what year you’re in, 20, whatever, 2028, you’re going to have these required distributions. I want to take just a minute to explain how those work. But more importantly, I just want you to know that when we get to 2028, my team will calculate this for you and will help guide you on how to take these distributions. So I’ve got to get ahead of it. If I’m waiting until the client says, Hey, do I have RMDs this year? I missed the mark. Like that was on me to be proactive.

Steven Jarvis, CPA (04:09)
Yeah, well, I completely agreed on that. There’s so many tax planning strategies, really for any tax playing strategies, but particularly age based ones. It’s a little bit more obvious how we draw this out. Like we need to be talking about these things well in advance, not just because we want to have planted those seeds and had the conversations over and over again. So we’re building on foundations that we share, but also because some of these age based milestones when it comes to the IRS really is what drives other tax playing decisions. So it’s not just that we’re talking about RMDs in our sixties, because we want clients to be ready for them at 73 or at 75 when that age goes up again in 2033. It’s because things like Roth conversions and other tax planning is based on the anticipation that at some point, hey, these RMDs are gonna kick in and they’re gonna become non discretionary income that hits our tax return every single year.

Matthew Jarvis (04:57)
Yeah, I’m glad you brought that up because when I have clients that are under-distributing, so they’re retired, they’re taking less than what their guardrails will allow them to take because they’re good savers or they’re frugal livers, whatever the case may be. I will pencil out for them. And I literally mean pencil what their required distribution will be when they get to require distribution age. So I’ll say, great, you’ve got a million dollars at age 73, you’ll have to take money out. I don’t have the factor table in front of me, but I would tell them. Like, hey, you’re going to have to take out, you know, $48,000. The IRS is going to make you take that out and pay taxes on it, whether you want to or not. What we can do instead, Mr. or Mrs. Client, is start effectively taking those distributions now. But instead of just paying the taxes and being stuck with them, we’re going to pay the taxes. We’re going to put them into a Roth account, let it grow tax free for ever more. This, my friends, is how we get ahead of the IRS we plan for multiple years versus one calendar year. And this is discussion Steve and I have with clients again and again and again.

Steven Jarvis, CPA (05:49)
And you don’t have a real client in front of you. I’m sure as you were talking, as you’re talking to an actual Bob and Sue that are sitting across the table from you, you’re not only saying, hey, you have a million dollars in that account. I would imagine that part of the reason you don’t have the factor committed to memory is because that’s not the part a client’s going to remember, right? It’s kind of like this is one of the many things I plagiarize from you, but people don’t think in percentages. Like you may as well say marshmallow, marshmallow, marshmallow. That’s the same thing. may as well be the same thing they hear. It’s even worse if we talk about RMD factors. If you ever go into a conversation or send a client communication that only includes the RMD factors and says, hey, great news, Mr. And Mrs. Client, your factor is 26 and a half, so good luck with your RMD. Like you’re not providing a service. We need to translate that $2 for that client to say, hey, when that RMD kicks in in 2028, I love how you’re tying to a specific year, it’s going to be $42,000 a year. And here’s some things we can do about that in anticipation, or here’s how it’s going to fit into your overall plan. This is also how we can start doing some pretty great tax planning on the back of a napkin or literally a whiteboard to say, over the next 10 years, what are those key dates, those key income sources going to be? And for a lot of people who have been very diligent saving in pre-tax accounts, because that’s what they were told to do their whole career, those RMDs are going to be big numbers.

Jarvis (07:00)
Yeah, they are for sure. Yeah. And so for the factor, like I used to always have it memorized because it used to be a 27.4 right at age 70 and a half, started at 27.4. And so I just I could know that I’d say, Steve, you got a million dollars. We’re going to divide that by 27.4. Why 27.4? Well, that’s how long the IRS thinks you’re going to live. I don’t think it’s personal to you. It’s the same number they give to everybody. But we divide it by what’s called your life expectancy. And that gives us a dollar. And I’m usually just doing it with a calculator right there. I’m not doing a Monte Carlo illustration. I’m not worried about their accounts doubling. So I can just say, in this case is $27,400. so yeah, I just want to take it very clearly to them. The other thing that clients misunderstand all the time about required distributions is that it’s the minimum amount, not the maximum amount, and it includes any distributions are already taking. So clients continually will be, they’ll say they’re taking five grand a month, that’s 60 grand a year. And we do the RMD report and says, Hey, you got to take out 47,000. And in their mind, it’s 47,000 in addition to what they’re already taking. So most of your clients, if they’re already taking guardrails level distributions, their RMDs are going to be covered by their distribution for at least the first 10 or 15 years. But again, something’s commonly missed. It makes sense to us because we’re looking at it all the time. It doesn’t make any sense to them, nor should it.

Steven Jarvis, CPA (08:12)
So Matt, let’s make this super practical. That’s why people love your book so much. just saw somebody on LinkedIn literally just the other day. I mean, it’s almost like it’s time for you to write another book because it’s been so long, and people are still loving the first one. But that’s a podcast for another day. Let’s get really practical with this. Talk about the time. When are you working on things internally within your team around RMDs? When are you communicating to clients? When are you actually processing money for anybody who does need to take more out to satisfy their RMD above and beyond what they’re already taking?

Matthew Jarvis (08:38)
Yeah, that’s a great question. So let’s get real kind of brass tacks on that. So the first week or so of January, first 15 days, we are finalizing our 1099 letter. So we get our 1099 letter out. That’s our Q1 value add. As soon as that gets done, we’re immediately rolling into RMDs because we want to have our RMD calculations ready for clients by the end of January, because around that time they start asking about required distributions. I always want to be ahead of anyone’s question. So we want to, by the end of January, we want to have formulated out the required distributions for all of our clients. Now there’s different ways to go about that. The software is getting a little bit better, like Orion, Black Diamond. Some of these are getting a little bit better. The custodians, of course, will send the client their own number. However, the custodians only know that account. So then you have to, have multiple accounts, especially at multiple custodians, that’s where you have to say, hang on a second, like I know that Fidelity sent you this, but you also have this Prudential account and they sent you their own thing. We need a whole discussion on what can be aggregated and what can’t. But I want to send them by the end of January a report saying, here’s your total account balances as of 1231. Here’s your life expectancy according to the IRS. Therefore, by the end of this year, we need to take out X amount of dollars. And as a rule, we want to actually have this done by December 1st. This is what I’m telling the client: whatever your distribution is done by December 1st, because we don’t want to push our limits on this because one of the steepest penalties in the tax code is reserved for retirees who don’t take out enough money from their accounts, which is a true story.

Steven Jarvis, CPA (10:02)
Yeah, there’s so many things that don’t make any logical sense under the tax code. That is certainly one of them. So even though this is something to your point, this is something that doesn’t actually technically need to happen until December 31st. You’re communicating about this by the end of January and telling clients to be done with it by December 1st so that we’re setting clear expectations and giving us the best possible chance for success.

Matthew Jarvis (10:21)
That’s correct. And then so for clients that are subject to required distributions, and then I go backwards two more years. So really at this point, and actually I’m going to correct that. I used to go backwards two years. We stood at age 68 because it started at 70. We still do it started at age 68. So any clients that are age 60 or older, they get a value add from our office every year. So those that have no required distribution, it’s a generic note that just says, Hey, you don’t have a required distribution until whatever year, 2028 or whatever it is. But you will get some stuff in the mail. You will hear some things in the news. Our team is watching this for you. But we’ll let you know in 2028 how to handle that. Because again, I don’t want them to have to contact me and think, hey, did Matthew remember this thing? Where I already looked at his dishwasher. Like I looked at, I’m aware of it. But if they’re not aware that I’m aware of it, it doesn’t do any good.

Steven Jarvis, CPA (11:02)
And Matt, just to be really clear, you said that they received that every single year. So you started at 68, and even though you’ve explained this to them, it’s probably come up in a client meeting. You’re just beating this horse over and over again every single year.

Matthew Jarvis (11:14)
Every year and every meeting. So if we’re doing twice annual meetings, which is normal, right? We’re doing spring and fall surge. That’s in my surge prep packet is their RMDs, whether they have one or not, age 68 or older, because I just want to have a quick discussion on that. It’s either, hey, your RMD is $48,000 and it’s already going to be covered by your monthly distributions, or it’s not covered, or you’re going to start in two years. Whatever the case may be, I want to be proactive on that. It only takes me a minute or two to bring it up, but it just shows that I’m on top of all these things that they’re not even thinking of.

Steven Jarvis, CPA (11:43)
And I think it’s, I appreciate you clarifying that because I think it’s helpful for all of us to remember that our clients hire us for all sorts of reasons, but one of them is that we are an expert that they are outsourcing to. They’re not coming to us because we’re gonna give some eloquent dissertation that now they understand all of these concepts and never need to hear it again. Like we need to continually reinforce these things because that’s what we’ve been asked to do. Number one, probably number one way to ruin a client’s filing experience is to have them be surprised. To have things come out of left field, whether it’s taxes, whether it’s distributions, whatever it is, when things aren’t expected, it completely changes how a client experiences the outcome. And so the more often we can in small ways reinforce this to your point, it’s two minutes a meeting, it’s not 30 minutes every meeting that we’re talking about the origins of RMDs, but we wanna reinforce these things so we’re avoiding surprises, we’re setting ourselves up for success, we’re making sure that not only do the distributions happen, they’re reported correctly, if there’s planning we can do associated with them, we’re doing those things well in advance, not scrambling at the last minute.

Matthew Jarvis (12:43)
Totally. And it can seem like RMDs are just this housekeeping item, right? But there’s, so many planning opportunities, that exists there, right? Whether we want to talk about like when in the year are we going to take these or we’re to talk about doing QCDs, right? Or giving clients permission to use their RMD for gifting or for travel. A lot of clients we’ve set up that their RMD is their travel budget. And I always call it a reverse budget. So I would say, Steven, you remember all your life, you had this budget, you didn’t spend over X. This is a reverse budget. So we’re to take your required distribution that you have to take already this $48,000. We’re going to put it in a designated account and I’ll use quotes on this. Like you have to spend this by the end of the year, or we’re just going to donate it to children or your charity. Now, Steven, obviously, I can’t force you to spend your money, but I’m giving you permission and I’m strongly encouraging you to spend this money before the end of the year on travel or gifting or whatever, because it’s a real psychological thing. Like it helps to give clients permission on that. A couple of logistical things that took me a long time to learn. When you’re doing RMDs, always round up to the nearest hundred or the nearest thousand. So don’t do $48,312.08. Round that thing up. Give yourself a little bit of room in case there is a calculation error or some kind of misunderstanding. Like I mentioned, get it done by December 1st. Don’t wait till December 31st. That’s just, that’s just silliness.

Steven Jarvis, CPA (13:68)
Matt, the most recent conversation I had on this topic is actually literally this morning. I was on with an advisor who had come to me, a Premiere member that we work with, come with a question. So a client that’s interested in Roth conversions but isn’t quite sure kind of like where they’re new to this advisor. And so they’ve heard about Roth conversions. They’re only a couple of years away from RMDs. They’re already into that first Irma bracket or trying to figure out like honestly, like kind of what their own tolerance for this stuff is. And one of the things I found really helpful around RMDs and it sounds like you already do this with clients, that aware, translating that to real dollars helps them have a lens for, this is already going to start happening. If I do nothing, the IRS is already gonna start making me take out these large sums of money every year. And so, especially for clients who maybe are hesitant to pull the trigger on paying taxes early on purpose, helping them understand what’s coming anyway can make a huge difference. And so taking that couple of minutes, the person I was talking to is relatively new to the advisors team and some of this is still new. And so I went through with her and said, okay, let’s give me their pre-tax balances. Let’s do a quick calculation what the RMD is gonna be in three years when they hit that age. And now we have some more context for, this is coming anyways. Like, do we start using that as a benchmark now to start getting some money in a tax-free bucket?

Matthew Jarvis (15:09)
Yeah, for sure. And if, if RMDs are going to push them into a new tax bracket or have them hit a shadow tax like Irma, I want to make sure I warn the client of this and make sure that blame goes where it should go to the IRS, not to me. Because what will otherwise happen is their tax preparer will say, Guess what? You got hit by this because your advisor took this money out of your account. Well, I didn’t take the money out of their account. I didn’t even tell you to the IRS said you had to, this is not on me, but it’s, it’s behavioral management. Right. And so I want to, whenever I can get ahead of things with clients, you know, same with your doctor, like, Steven, we all know people that have gone in through knee surgeries, like they, like a knee replacement. They tell you like, hey, this thing’s going to hurt like crazy and it’s going to take physical therapy and it’s going to be tough and it’s not going to be any fun. Why do they tell you that? Like, it’s not to talk you out of the procedure. They just don’t want you to to the other side of it. Like, dude, why didn’t you tell me this thing was going to hurt like a son of a gun? Just the pain is what it is. But I want to be the person to warn you about it, not to defend it down the road. Like, hey, listen, you should have known. You know, did you think we could cut your knee out without it hurting? Come on.

Steven Jarvis, CPA (16:04)
Matt, let’s talk about some other just kind of specific things that come up. You mentioned QCD is qualified charitable distributions before. It’s a real kind of like recurring topic for articles on order of money coming out of IRA accounts. How often in practice have you run into issues with the order that money’s coming out and how those get treated for RMD purposes?

Matthew Jarvis (16:251)
Uh, that will, but this can, this can open up a whole can of worms. Like technically you can’t do an IRA rollover unless you’ve satisfied the QCD first. Right? So if you’re like, Hey, listen, we’re going to move money from this account to that account. Or they, let’s say it’s a new client and they’re moving from Vanguard to Fidelity. Like technically you need to have taken that, that RMD first. don’t think the IRS has ever enforced that ever. I don’t really think it’s an issue, um, with QCDs. So qualified charitable distribution. That’s where you’re, we call it RMD to charity. Like if you’re trying to exactly satisfy the RMD, you kind of got to watch that. If you’re not really worried about it, like you can do $100,000 of QCDs every year, no matter what, if you want to, once you hit 70 and a half, I don’t ever really track it very closely. There are some clients that are trying to like get down to the last dollar, but again, that’s why I encourage them to like round up to a thousand. Like we’re going to round this up. And again, by the way, any checks that don’t clear by December 1st or any QCDs you don’t do by December 1st, we’re just going to send out the rest. Like I’m not going to be here on the 31st asking you why this check didn’t clear to the Boys and Girls Club.

Steven Jarvis, CPA (17:21)
Yeah, I’m always curious to hear what happens in real life because and I get I get torn in this sometimes too because I end up you know in the academic world just a little bit but I always like to remind myself we got to go back to reality here of and over the last five or so years now that I’ve been so focused on working with financial advisors I’ve yet to have somebody give me an example of where this went wrong for an actual client like in theory I get where the question comes from but even even hypothetically like there’s so few situations where it seems like it would play out in practice, that great, great, sure, be aware of it, but I’m not changing my practice with how I work with clients because of it.

Matthew Jarvis (17:55)
Where I’ve seen there be issues, and these aren’t IRS issues, these are where the RMD gets calculated wrong, is if there is some kind of rollover around year end, and so there’s some confusion on what the year end balance would be, or an account is opened mid-year and forgotten about, or closed mid-year and forgotten about, and so it’s not an IRS issue, it’s an issue of like, hey, you thought this was handled and it wasn’t. You saw this distribution for 40,000, you thought it was a distribution, was actually a transfer to another IRA account, something like that. I see that more often. I’ve seen where people have tried to do Roth conversions with their RMD, which you can’t do. That’ll create a big problem and it’ll create a problem down there. Like, what is it that 6 % excise tax every year it’s in there? Like it’s, that’s a pretty wild one. Another mistake I see all the time and I used to run into it on the regular, is if clients have their distributions on like the first or the 31st and that falls on a holiday, there are chances where it will get kicked over. So like if your distribution’s on the 30th and the 30th is a holiday, it falls on like a Friday or Saturday, and the distribution doesn’t happen until the second and you were counting on that as your RMD, now you have a problem that you have to deal with. That’s not any fun at all. So in our office, distributions happen on the 5th or the 25th. That’s it. Those are the only days you want to take a monthly distribution. happens on the 5th or the 25th one, because then we can watch everything at once. And that gives us enough cushion that we’re never worried about getting pushed over into their year. So we don’t do the second. We don’t do the first. We don’t do the 28th. It’s the 25th or the 5th. Those are the only days we set up systematics. Is there a client who says like, I really love this on the 17th? Yeah. And I guess if they really pushed me out, I’d be okay with that. Otherwise it’s the 5th. And the 25th, it’s just the more streamlined I can keep things in my office, the better it’s going to be. I don’t want to be thinking about, no, the 30th is a holiday and what’s that going to do to the distributions?

Steven Jarvis, CPA (19:47)
Well, and this goes back to doing the simple things consistently over time and speaks to the value of learning from other advisors doing this in practice, which I haven’t even mentioned at the end of this episode. If you haven’t yet, get your ticket to the summit this September 27th through 30th. Gee, so excited for how it’s gonna expand this year. A lot of stuff about financial planning with taxes at the center, but there’s nothing quite like learning from other people who are doing this in practice. And I’m totally with you that having a set way to approach these things makes all the difference. And if somebody really wants to find, the one that comes to mind for me, is that I’ll have clients who want to wait until April 15th to make their their tax payment because they’ve met the safe harbor and so like no no I want to wait as long as possible and we’ll kind of joke and I’ll say well if it’s okay with you we’ll wait till April 13th I always like to give myself a couple of days just in case and especially when I tell people that’s what I always do great we make so many payments on April 13th not April 15th just because why not give yourself the buffer so I love that what might seem like a really simple thing but great if we do it on the 25th…Then no matter what holidays or weekends, we always know it’s in the month we intended it to be in.

Matthew Jarvis (20:48)
Yeah, the more things you can, you can streamline the better. Let’s switch back to QCDs. If you’re doing QCDs with clients, right, we have to just manage that behavioral aspect. So we always do QCD checkbooks. So we have the client get a checkbook for their IRA and they use that to make any, any donations to charity that we want to track. We kind of have a, put a sticker on the front of it and it says, here’s what this is to be used for. Here’s what it’s not to be used for. That means we also then have the voided check, right? Cause it gets scanned into the custodian. So we have that as not as a full evidence of the donation, but it’s helpful, right? The charity still has to send that acknowledgement. Uh, our good friend, Micah Shilanski takes that one step further. They move any RMDs into an account labeled QCD account, uh, cause Schwab is really good at that. So clients know what their budget is left on that. Uh, we did one time, actually here’s a life lesson on QCDs. So my worst QCD experience had a client is still still a client. Uh…He was the treasurer for his local church congregation. And so he gets to be RMD age. We explained to him QCDs. QCDs are relatively recent. So he writes a QCD to his church as his tithe, right? And he’s the treasurer of the church and he gets the bounced check report. And he has to go to the pastor with the bounced check report and his name is on the bounced checklist as the treasurer. And what had happened is there had been a miscommunication on our side about how much cash to have in the account. And unbeknownst to us, he decided to just do all the ties for the year at once. So it exceeded the cash. So Fidelity bounced the check. And so this guy calls me, see if I can still remember the conversation. He called, I’ve never heard someone so angry. He calls, he’s screaming at me on the phone, screaming at me. It took me a minute to figure out what had even happened. And as soon as I figured out, I was all, dude, I deserve all of this. In fact, whatever else you have to give me, give it to me. Right now I am writing an official letter to your pastor. Can I please have his telephone number so I can call him and apologize myself for this? And here’s how we’re to make sure this never happens again. So that’s, that’s all a long way of saying like if you’re having clients do QCDs, make sure you have the cash in the account because if you bounce a check to a charity, it don’t look good. Don’t look good for anybody. So, man, I had forgot about that memory. Yeah, that was wild.

Steven Jarvis, CPA (23:00)
Well, maybe I’ll collect some stories like that and we’ll share them at the summit this year. You mentioned our good friend Micah and the charitable IRA sets up, actually I think for anybody who’s listened to the podcast last week, you probably heard me talk about that as well because I’ll never forget the first time I saw Micah do that because Micah and I work on, we have quite a few shared clients. And so I remember getting a 1099R that said charitable IRA and just grinning from ear to ear because it’s so simple but so effective. To of course a charitable IRA is not an IRS distinction It’s just a nickname on the Schwab account, but so such a fantastic way to make sure that gets communicated Matt in the last couple of minutes we have here on the topic of RMDs I want to make sure that we hit on inherited IRAs real quick too because I get a lot of questions on RMDs for inherited IRAs and that’s that’s a whole separate podcast and webinars that sort of a thing but, from a really high level, what I really encourage people to remember when it comes to inherited IRAs, is when we’re talking about non-spousal, non-designated beneficiaries, what we’ve got to keep in mind is that whether or not an RMD is needed is based on the decedent’s age. So in really simple terms, was the decedent taking an RMD or should they have been taking an RMD? And then the amount of the RMD is based on the beneficiary’s age. And so we’ve kind of got a two-step process there. And then I want to go back to a comment you made earlier, Matt, of the required minimum distribution is the minimum. And so especially when we’re talking about inherited IRAs, I see too many people say, well, that’s the amount I have to take out. That’s the only amount I’m going to take out. But you’ve only got a 10 year window. And for a lot of people, it’s going to make more sense to take out more than the minimum amount as opposed to getting hit all in year 10.

Matthew Jarvis (24:399)
Yeah, a couple of things there. Inherited RMDs, they’re simpler than they used to be, but they’re still pretty nuanced. So yeah, the shorthand is once RMDs start, they never stop. Of course, there’s some exceptions to that. The person’s RMD needs to be taken for that year before the money is transferred to inherited, right? There’s some things that are going, you got to make sure you’re aware of that. Then to your point, Steven, the way that the RMD rules are now for non-designative beneficiaries, there’s an annual RMD for 10 years. And by the end of year 10, or 11, depending on which IRS language you read, every dollar has to be sent out. by the way, I don’t ever try to fight that one. We just say, the 10th, the 10th anniversary of that person’s death by that December 31st, that’s when the money’s going to all be out.Is it maybe the year after that? Maybe that’s not what a battle I want to take with the IRS. So yeah, I’m going to have that discussion with them. So we got to amortize, amortize that out. Steven, I would, going back to your own RMDs, this is a great prospecting tool. So when I’m meeting with a prospect, and we’re working on a one-page financial plan. One of the questions I’ll have is, hey, Steven, as I’m sure you know, once you get a ways into retirement, the IRS is going to force you to take money out of your retirement accounts. These, as you know, are called required distributions. Just curious your strategy to mitigate the impact of those required distributions. And then my pen is ready. And I’m looking with sincerity. This isn’t a trap, right? So have to make sure my intentions appear. This isn’t a trap. But if you as my client or prospective client, don’t have a strategy for these required distributions, you’re going to get hurt by them. And so by bringing you awareness of that, I used to have this quote on my desk that said, a financial advisor’s job is to make prospects aware of problems they didn’t know they had and find them the solution. So let me just dial that in really quick. It’s not to make problems, it’s to make them aware of problems they didn’t know they had. So most clients do not know they’re going to have a problem with RMDs in the future. I need to make them aware of that and then show them the solution.

Steven Jarvis, CPA (26:39)
Well, Matt, this might just be getting to a pet peeve. I’ve recently developed over financial advisors who aggressively use scare tactics to get new clients. But what you’re saying here, this is not you saying, Mr. and Mrs. Prospect, hey, the IRS is going to come steal all your money in a few years. And if you don’t work with me, then you’re going to get killed in taxes. And there’s nothing else you can do about it. This, even said it in there, your intentions matter here. This absolutely is about making them aware of problems they don’t currently have solutions to that you can provide, but it’s not a scare tactic. is not a high pressure, time share situation, but most people aren’t gonna be aware these problems even exist until they’re faced with them unless you as the advisor can help them navigate that.

Matthew Jarvis (27:10)
Yeah, 100%. And I want to also diffuse any anger towards the IRS. This is not because like I’m on team IRS, right? But when a client comes in and says, I can’t believe the IRS is forcing me to take this money out. I said, well, yeah, it’s kind of like paying the piper. They’re like, this is money that we’ve never paid taxes on before. And the IRS is saying, Hey, you’ve had this money in here for like 50 years. We need to get paid on this. Now that we let you not pay it for 50 years, it’s time for you to start, start paying it. Does that mean I agree with RMDs? Does that mean I agree with how they’re calculated or how the system? No, absolutely not. But part of my job is to provide perspective. This isn’t the IRS out to get retirees. They’re just saying, hey, listen, you haven’t paid taxes on this in 50 years. It’s time to pay some taxes. And it just helps de-escalate the situation.

Steven Jarvis, CPA (27:56)
Well, Matt, as we wrap up here, I know that you and I both care about people taking action with the things that we share. And so I’m going to put you on the spot just a little bit here. I know that you obviously are going to come to the summit again this year. You not only will be presenting the summit, but I know you get great takeaways for yourself every year. And so that’s definitely on your list of ways you’re leveling up on tax planning this year. What else are you going to be doing in 2026 to make sure you continue to level up on tax planning for your clients?

Matthew Jarvis (28:19)
Yeah, I mean, obviously this is going to sound cliche and biased, but I’m reading the RTS tax newsletter every month. And I mean, I have the desk, like here’s my desktop tax guide right here on my desk and the RMD tax guide and the qualified plan tax guide. Like I just keep all of those because it saves me. Maybe this is revealing my age, but it’s saving me from having to remember all those factoids. So now I can have a discussion on how are we going to manage RMDs without trying to remember the entire table. I can just before the meeting, look at that guide and say, here’s their age this year. Here’s what their factor is, and I can just jot that down on my homework sheet and I’m ready for the meeting versus trying to remember it or worse trying to make up a number which will inevitably be wrong.

Steven Jarvis, CPA (28: 58)
hear from so many advisors who using those guides and loving it. So Matt, as always, I really appreciate you taking time to come on and share some experience and expertise. I’m definitely looking forward to the summit later this year. For anyone listening who hasn’t gotten a spot yet, which a lot of you already have, retirementtaxservices.com to get your seat booked for the summit. So Matt, thanks for being here.

Matthew Jarvis (29:17)
My pleasure, man. Glad to see you there before it sells out. And of course, let’s mention Michael Kitces named as the top tax conference for financial advisors in 2026, bumping the AICPA of all people from their pedestals. So big shout out to Michael Kitces for that, but yeah, it’s a fun conference. It really is.

Steven Jarvis, CPA (29:37)
Yeah, please don’t tell the AICPA. I still want them to like me too. All right, well, for everyone listening, thanks for being here. And until next time, good luck out there. And remember to tip your server, not the IRS.