Tax Planning To and Through Early Retirement | Cody Garrett & Sean Mullaney | Ep 565

ChooseFI

Brad Barrett | Choose FI Media

Financialindependence, Investing, Firemovement, Passiveincome, Frugalliving, Personalfinancepodcast, Daveramsey, Careers, Business, Earlyretirement, Habits

4.8 • 5K Ratings

🗓️ 22 September 2025

⏱️ 69 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Brad Barrett hosts Cody Garrett and Sean Mullaney, co-authors of Tax Planning To and Through Early Retirement, exploring essential tax strategies for the FI community. They address misconceptions about retirement taxes, the drawdown process, and effective tax rates, emphasizing the importance of informed planning to navigate financial independence smoothly.

Key Takeaways:

Understanding the complexities of drawdown strategies is essential for early retirement planning.
Fear surrounding retirement taxes can often be mitigated through knowledge and strategic planning.
Most retirees benefit from significant tax reductions due to lower effective tax rates during retirement.
The podcast discusses common misconceptions about Required Minimum Distributions (RMDs) and their actual impact on retirees.

Timestamps:

00:01:38 - Overview of Tax Planning To and Through Early Retirement
00:02:33 - Understanding the complicated drawdown process
00:07:22 - Eliminating fear from tax planning
00:10:06 - Long-term capital gains taxation and early retirement
00:28:39 - Tax optimization strategies
00:39:01 - Strategic tax planning leading to zero tax liability
00:58:47 - Discussion on RMDs and tax implications in retirement

Key Insights:

The drawdown process is often misunderstood but vital for financial planning. (00:02:33)
Fear of taxes can hinder retirement planning; proper understanding can lead to rational decisions. (00:07:22)
Most retirees can pay lower taxes than perceived and often face less tax liability. (00:28:15)
Effective tax strategies can enable some retirees to pay zero taxes during retirement. (00:39:01)
Misconceptions exist surrounding RMDs; they may not be as detrimental as commonly feared. (01:00:14)

Actionable Takeaways:

Consider early Roth conversions to maximize tax credits, particularly if you anticipate low income post-retirement. (00:44:07)
Utilize long-term capital gains to minimize taxable income effectively in retirement. (00:10:06)
Aim to reduce ordinary income during retirement to take advantage of favorable tax environments. (00:41:37)

Discussion Questions:

What are some strategies that can minimize tax burdens in early retirement? (00:28:39)
How do RMDs impact retirement planning, and should retirees be concerned about them? (01:00:14)
What are the implications of long-term capital gains on retirement income? (00:10:06)

Resources Mentioned:

Related Episodes:

Episode 557: Health Insurance Planning for Early Retirees

Disclaimer: Sean's discussions on the ChooseFI podcast and articles and messages published on ChooseFI.com are intended for general educational purposes and are not tax, legal, or investment advice for any individual. The ChooseFI podcast and its owners, employees, and agents do not endorse Sean Mullaney, Mullaney Financial & Tax, Inc., or their services.

Transcript

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0:00.0	Hello and welcome to Choose a Phi. Today on the show, we have Cody Garrett and Sean Malini.
0:05.1	They just published a book called Tax Planning to and through early retirement.
0:10.2	And this to me is one of the most important books written for the Phi community in many years.
0:17.1	It's something that provides a significant amount of detail and information and dispels fears.
0:24.7	So many fears are just thrown around in terms of, hey, what is my effective tax rate going to be in retirement?
0:31.8	Is this something significant?
0:33.0	Are there things that I don't know?
0:34.6	Are there unknowns?
0:35.9	Are there these boogeymen that I keep hearing about
0:37.6	in the traditional mainstream financial media? And I think what you're going to find out
0:41.6	from both this episode and from this book is that we are so well placed in the Phi community
0:48.8	to take advantage of all of these amazing benefits that have really been showered upon us in terms of available
0:56.5	options to really benefit and pay a very low tax liability and effective tax rate.
1:02.2	And I think reading this book gave me knowledge that I didn't have before.
1:07.0	And I've been in the fight community for over a dozen years.
1:09.0	And for me to come across multiple things in one source that just really opened my eyes to something remarkable, it just blew me away.
1:15.8	I think you, the listener, you the reader, are going to get some real certainty on this potential fear.
1:23.9	I don't know what else to say other than this is a really important episode.
1:27.1	This is a really important episode. This is a really
1:27.6	important book. And with that, welcome to Choose a Fiore. Sean and Cody, thank you guys for coming
1:40.3	back. You two are two of, maybe our two most frequent contributors here on
1:45.9	Chuzofi. So it's really neat to have you both at the same time and really to celebrate and to talk about
	...

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