Women's Retirement Radio

Alicyn McLeod of Atlanta Tax - Tax Planning for Women - Episode 29

August 30, 2021 Russ Thornton Season 2 Episode 13
Women's Retirement Radio
Alicyn McLeod of Atlanta Tax - Tax Planning for Women - Episode 29
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Women's Retirement Radio
Alicyn McLeod of Atlanta Tax - Tax Planning for Women - Episode 29
Aug 30, 2021 Season 2 Episode 13
Russ Thornton

In this episode of Women's Retirement Radio, I'm joined by Alicyn McLeod of Atlanta Tax.

Alicyn is a CPA and a CFP with nearly 20 years of tax experience.

She specializes in tax planning and compliance for closely-held businesses, individuals, and not-for-profits. Many of her clients are women.

Alicyn and I cover a lot in our conversation. She even shared one of her favorite podcasts (other than Women's Retirement Radio, of course).

For more on Alicyn and Atlanta Tax, please check out these resources:

Get in touch and let me know what you think or if you have any questions.

And thank you for listening.

Visit my website to learn more.

Disclosures

Show Notes Transcript

In this episode of Women's Retirement Radio, I'm joined by Alicyn McLeod of Atlanta Tax.

Alicyn is a CPA and a CFP with nearly 20 years of tax experience.

She specializes in tax planning and compliance for closely-held businesses, individuals, and not-for-profits. Many of her clients are women.

Alicyn and I cover a lot in our conversation. She even shared one of her favorite podcasts (other than Women's Retirement Radio, of course).

For more on Alicyn and Atlanta Tax, please check out these resources:

Get in touch and let me know what you think or if you have any questions.

And thank you for listening.

Visit my website to learn more.

Disclosures

Russ Thornton:
Hi everyone, it's Russ and welcome to another episode of Women's Retirement Radio. I'm excited today to be joined by a colleague and friend that I've known for a few years, Alicyn McLeod. Alicyn welcome to the show.

Alicyn McLeod:
Hey, thanks Russ. So excited to be here.

Russ Thornton:
Yeah, glad to. Always enjoy speaking with you, so glad to have you with us today. Why don't we start by having you just tell us a little bit about yourself for those that are listening that might not be familiar with you?

Alicyn McLeod:
Yeah for sure. My name is Alicyn McLeod, I'm a tax advisor. I have been doing this going on 20 years. And I've seen a lot of changes especially recently. I live in the Atlanta area. I work for myself and have done so for about seven, eight years now.

Russ Thornton:
Yeah, and you've ... I guess in the time you and I have known each other, you've worked with, as I recall, you've worked for other firms or with other partners. And then a few years ago you kind of went on on your own to launch Atlanta Tax, is that right?

Alicyn McLeod:
Yeah, that's correct. This is the second iteration of working for myself. I think this is the one I will stick with.

Russ Thornton:
Yeah, yeah. And so in addition to tax, I know you also have your CFP. So, you have a deep understanding of things beyond taxes as it relates to personal financial planning, personal finance in general. You really bring, in my experience, you really bring a well-rounded skillset to the table when you're working with your clients and helping people out.

Russ Thornton:
Have you found a particular area of either tax and/or personal finance that you particularly enjoy working with or helping people out with?

Alicyn McLeod:
Yeah, yeah. Thank you for the nice commentary. Yeah, I do find that being a CFP is very helpful to kind of play on the team with my clients and their financial advisors and really understand that taxes are a big deal but they're really only one compartment of longterm financial planning goals.

Alicyn McLeod:
So yeah, these days my focus is on working with folks that are high net worth, high earners, to equivocally like folks who are handling an inheritance or maybe they're retiring or semi-retiring, and kind of transitioning and seeing what that looks like.

Alicyn McLeod:
I have a number of folks who are still in their working years likely getting some sort of executive compensation like non-qualified stock options, ISOs, restricted soft units, all that good stuff and trying to figure out what that means to their tax situation. So, that's kind of the space that I concentrate in on these days.

Russ Thornton:
Yeah, great. Well before we kind of carry on the conversation, why don't you just to let people to get to know you a little bit more personally, I want you to share something interesting about yourself that maybe some of your friends won't even be aware of.

Alicyn McLeod:
Yeah. I do have something going on right now that I really haven't told many people about. No real reason that I haven't, maybe I was waiting for it to be done, but for several years now I've been a practitioner of yoga and I've wanted to become a yoga teacher. Not as my full-time job, I'm not going to leave tax anytime soon, but just to sort of enhance my personal life and learn more about yoga and maybe be able to do this sort of on a volunteer basis.

Alicyn McLeod:
So, typically yoga teacher training that I have looked into is offered in the spring when I'm busy with some taxes. So, it's kind of always something I thought that I would have to wait until retirement for. But I guess one of the good sides of having a pandemic is there's a lot more offerings year-long and online, and so I was able to find a yoga teacher training course online and I'm working on that. So, will hopefully be a yoga teacher in the next few months.

Russ Thornton:
Congrats, that's awesome.

Alicyn McLeod:
Yeah, thank you. I'm super excited about it.

Russ Thornton:
Yeah. So, I know you mentioned that's something you're kind of interested in and practiced for a long time. How long have you wanted to get your teacher certification?

Alicyn McLeod:
Yeah, I would say it's something that I've looked into on and off for probably about the past five or six years. Again, it was just always I looked at the timing and thought, "I can't start anything in March, there's no way."

Russ Thornton:
Right.

Alicyn McLeod:
And so yeah, it was kind of exciting to realize it was something that was accessible or attainable for me right now.

Russ Thornton:
Well that's awesome. We'll have to have a follow-up conversation in the future, hear how your yoga is going.

Alicyn McLeod:
Yeah, absolutely.

Russ Thornton:
Yeah, so thanks for sharing that. I know you mentioned tax, I know you mentioned you have your certified financial planner designation, you do a lot of work with different clients at different stages of their lives on different things with regard to tax and personal finance.

Russ Thornton:
But if you had to kind of encapsulate what it is you do in simple terms almost like you were explaining it to a child, how would you describe your work in simple terms?

Alicyn McLeod:
Yeah sure. I guess if I was going to explain it to a little kid, I first ask them, do you get an allowance? A lot of kids do. And then I probably say, "Look, if you got your allowance for doing work around the house, and then someone came along and said, "I want a piece of your allowance," how would you feel about that? Would you want someone to help you figure that out?" So that's pretty much what I do.

Russ Thornton:
That's an interesting spin but I like it. And I think you did a nice job of putting that in simple terms that I think anyone could get their hands around.

Russ Thornton:
So, in your work Alicyn, what would you say is the biggest challenge that you help people address or solve in their lives?

Alicyn McLeod:
I would say Russ that is probably just being educated around taxes. The US Tax Systems is needlessly complicated, federal, states, income taxes, sales taxes, estate taxes, give taxes. Everything gets taxed. The same dollar gets taxes multiple ways. And it's very just so convoluted and most folks really don't have a grasp of their own tax situation let alone the greater tax situation, what's going on out there, what laws are in place, what could impact them.

Alicyn McLeod:
So, I would say that my approach has been one of education, trying to really understand what's going on with my clients and then matching that up with the applicable tax law and teaching them as much as I possibly can about that so they can kind of figure out what's going on and make their own best decisions.

Alicyn McLeod:
And that is really the biggest challenge is just that education component because tax law is just so complicated and every time congress meets it gets worse and worse.

Alicyn McLeod:
They're not striking old laws off the books by and large, it's adding on constantly and that's really a lot of that challenge.

Russ Thornton:
Wow, sadly I couldn't agree more about the complicated nature of the tax law.

Alicyn McLeod:
Yeah.

Russ Thornton:
And I had an opinion, but what do you think, is this going to get better anytime soon or this is kind of the beast we're living with?

Alicyn McLeod:
It could get better. It could easily get better but no, I don't see that. It doesn't seem to be the way to go. Law makers seem to want to put their mark on things by making a new law and kind of spinning it in such a way that it appeals to their audience rather than looking back and kind of starting from scratch and saying, how can we make things simpler? How can we make things easier? How can we make the IRS a more taxpayer, or a friendly organization? It seems to be not their area of focus. No, I don't see tax getting any easier anytime soon.

Russ Thornton:
Yeah, sadly I don't either but I guess that's job security for you, which is a good thing.

Alicyn McLeod:
You know what, if taxes could be simpler, easier to the point that people like me didn't have jobs, I'd go find something else to do. Then I would be a yoga teacher all day long. So yeah, it is job security but in a very sad and unfortunate way.

Russ Thornton:
Yeah. I appreciate your perspective on that, but yeah what a mess. Sad or not sad but we're going to solve today on this conversation. So, we'll move along.

Russ Thornton:
So you've been doing this for 20 years in different capacities, now running your own firm, working for yourself. What's a favorite client success story that comes to mind as you think back over the years of work you've done for people?

Alicyn McLeod:
Well I guess I have some general thoughts and then one specific. Generally though I really enjoy it when I start working with someone who's either been sort of a DIY tax prepared for themselves. So, they've done their own tax returns in TurboTax. And TurboTax is fine depending on your tax situation but it's like any other application, it's garbage in, garbage out.

Alicyn McLeod:
So, a lot of times I'll get folks that have been in this situation for years and they just want someone to come take a look. And I realize there's several ways that they've sort of overpaid taxes unnecessarily throughout the years and we can put them on a more optimal path.

Alicyn McLeod:
And so in general when I get folks like that it's very rewarding. More specifically concretely, I had a pro bono case that I worked within the past 12 months that was really rewarding.

Alicyn McLeod:
It was a young man who IRS just was not giving him his refund and it was because one of the employers he worked for had gone bankrupt and had not filed his W2 properly.

Alicyn McLeod:
And we were able to get him all his money back after he had exhausted all his own avenues and I was able to come in and work with a special branch of the IRS to get all that straightened out for him and even I was holding my breath the whole time.

Alicyn McLeod:
So we got him back about $10,000. He was 100% entitled to it. It was totally his money. But that one hit the heart a little bit harder than some of the other ones and I was pretty excited about that. That was February or so.

Russ Thornton:
Wow. Yeah, that's clearly a win all the way around. So yes, so thanks for sharing that. Out of curiosity and I know this is pure opinion, but are you of the mindset that it's better for people to pay more taxes throughout the year and get a refund back at tax filing or to kind of better balance their withholding if they're a W2 employee for example and either write a small check or try to kind of break even when it comes to time for tax filing.

Alicyn McLeod:
Yeah, I always say that's not a one-size-fits-all answer. I know some people have hard lines on that. My goal at least with my clients is just for the ones who are interested in looking at it during the year will take time explaining to kind of see what that looks like, what next April might be.

Alicyn McLeod:
And if they're over or underpaid managing to that, and it may not be making advanced payments, it may just be setting aside. So, my best advice there is just to have some idea of what's going to happen. If you're not a good saver, which is unfortunately a lot of folks, but if you're not a good saver, then maybe you do want some extra withholding.

Alicyn McLeod:
On the other hand, if you're a good saver and you can estimate your taxes throughout the year pretty easily, then why not be slightly underpaid or even largely underpaid depending on your situation and just be able to write a check the following April.

Alicyn McLeod:
So, that's the circumstances year-to-year, client-to-client. I wish I had a hard and fast rule for you but I don't.

Russ Thornton:
Well, I think that's probably pretty indicative of a lot of the work you do and the work I do as well. It ultimately comes down to circumstances on the individual or the family, what they're dealing with, what their goals are, et cetera.

Alicyn McLeod:
Yeah.

Russ Thornton:
So, I agree. I think that's a good and balanced answer. Not that there's a right or wrong here.

Alicyn McLeod:
It depends Russ.

Russ Thornton:
Of course it does. Alicyn, what surprised you most about your work over the years in tax and just kind of personal finance in general?

Alicyn McLeod:
I would never have guessed that tax law would change so often as it does. Even when we've had a lot of significant tax reform in the past three years, four year. But even without that, there's just always something changing, there's always something new, there's a court case that you think an area tax law was settled and the court decides in a way that was unaccepted and so you have to rethink things.

Alicyn McLeod:
So, the actual work you're doing changes quite often. So, I don't think I saw that coming. And then I think you may have found this true in your line of work as well, but I don't think I realized how much psychology comes into it.

Alicyn McLeod:
Kind of just back to our last discussion about is it better to be overpaid or underpaid when it comes to filing your tax return, you think that that's just about the numbers but it's not. It's really about each individual's persons feelings about can I sleep at night if I owe the government money or can I sleep at night if they owe me money?

Alicyn McLeod:
And there's so much to that. I can't deliver the same news to two different clients the same way. So, I think those are the big things, it's just realizing how much the actual technical side of my job changes as well as how I'm really required because in some ways these are like a financial therapist. I wouldn't have anticipated either of those.

Russ Thornton:
Do you enjoy kind of the dynamic changing nature of the tax law and the fact that you have to keep up with stuff and make adjustments and maybe the advice you gave 12 months ago is going to be very different than the advice you'd give to the same person this year based on new legislation, new rules, new regulations?

Alicyn McLeod:
No, no, I don't. Kind of going back to our conversation earlier, there are objective and agreed upon components of good tax law and tax law that is constantly changing it doesn't fit into that. Tax law should be simple, it should be consistent, it should be easy for folks to understand and comply with. It's very frustrating to folks whether they're business owners or W2 employees or retirees or whatever their situation, it really doesn't matter, to have to keep up with this even if it's paying somebody like me to help them, they're still having to keep up with it and try to understand their situation, trying to grasp why things are changing, it's very frustrating, it's very confusing.

Alicyn McLeod:
So the answer to my clients isn't good, so no I don't like having to keep up with that at all.

Russ Thornton:
Yeah. I would think it would be frustrating. So I'm not surprised when you say that. It's sad that we're dealing with a tax system that creates this moving target every year that you need to jump through this hoop or that hoop just to try to, a, file accurately on time, much less optimize your taxes like you were talking about earlier.

Alicyn McLeod:
Yeah.

Russ Thornton:
Yeah, it's kind of crazy. And I guess that goes back to what you kind of opened with, which is the importance of education and helping people get clear about what it is they're trying to do, you helping them kind of get organized and make this maybe hopefully a little bit less overwhelming or a little less intimidating.

Russ Thornton:
And that also I think ties into what you were just talking about, which is the psychology of it. I've talked with prior guests, I'm sure I'll address it with future guests, that I'm just fascinated by the whole decision making in psychology when it comes to money in general and taxes. It's clearly a part of that. So, I'm not surprised to hear you say and I'm actually happy to hear you say that you acknowledge kind of the behavioral or psychological components that come into your work and into your interactions with your clients because I deal with that too and there's no easy answers there but it certainly keeps things interesting.

Alicyn McLeod:
It does. And I think, I'll make another observation the more complicated tax law becomes and the more that folks like me have to chase it and chase it and chase it, the harder and harder it becomes to cater to everyone's different approach to their money because we're so busy figuring out what the new tax rules are where it's time consuming, right?

Alicyn McLeod:
It's also time consuming to figure out how best to educate any particular client and interact with them. Some folks want a phone call, some folks want email, some folks you're going to have to break some news to them easily, some folks just want the facts and they move on.

Alicyn McLeod:
When you're busy trying to figure out what congress is doing and why and interpreting it and that sort of thing, I think some of that maybe if I can make a little apology for my industry, is probably why we're not known so much for our people skills because we're just kind of trying to keep up with the day-to-day.

Russ Thornton:
Would you say that as a result of that it makes you a little less able to be as proactive with your clients as you'd like to be? It almost sounds like you're almost in a situation where you kind of have to be reactive, where you have to be very nimble and you're always learning and trying to stay on the bleeding edge of what's happening so you can then relay that information to your clients.

Russ Thornton:
But I wonder if that takes away from your ability to be maybe more proactive that you'd otherwise prefer to be?

Alicyn McLeod:
That is a really good question. Yes and no. So, yes in general it does particularly for example we saw this with legislation that passed early 2021. It was retroactive to 2020. People have already filed their tax returns. There's no way you can say a tax law that's retroactive as I'm sure you're aware, some of the talk that's going on right now is that there could be retroactive changes to capital gains rates for folks in certain income thresholds.

Alicyn McLeod:
How do you really help folks get ahead of something that's going to happen in the past?

Russ Thornton:
Yeah.

Alicyn McLeod:
So, I could say that's really challenging. Even if it's not retroactive, something that's changing right now, we saw this with the Cares Act of 2020, that just had a whole bunch of new stuff in it, tax and non-tax and a lot of it didn't really make any sense and there's a whole issue there. So yes.

Alicyn McLeod:
What I think for me is either forced me to do or maybe just made sense to do is that I narrowed down who I work with. So, I don't take on a broad range of clients, there's just so many folks and so many situations I just do not work with simply because I don't want to keep up with their area of tax law or I don't want to keep up with their industry changes that tax law will affect.

Alicyn McLeod:
So, that's one way that I work around that. And I think that's at least from my perspective, that seems to be way more common.

Russ Thornton:
Yeah. Where I'm at it just sounds like a smart way to run your business and not kill yourself in the process, so good for you. I think when a lot of people think of accountant CPA, tax repairs, I think people kind of have a pre-conceived notion of what it is you or how you work with people. Would you say Alicyn that there's any common misconceptions about the work you do that you often have to reeducate people on or explain to people that they maybe come to the table or they're introduced to you and they think you do A, B, and C and you actually do X, Y, and Z.

Alicyn McLeod:
That's interesting. Yeah, most people end up coming to me because they know they need a tax return filed. They don't really understand what I do. They trust CPAs because for some reason we still have good branding, which I'm very happy about. And I think by and large we've earned it.

Alicyn McLeod:
And they know that many of us including me file tax returns. But it's not until we start having conversations and that relationship develops where they kind of see more of what it is that I do.

Alicyn McLeod:
I think there's probably this misconception and it's just part of the word accounting is that we're counting and we love math and we're sitting there at our desk, which well that's pretty much true but that word just adding, multiplying, we're doing all this crazy math and we have calculators for that and we let our calculators and our software and excel and all that do really the hard lifting on the math side for us.

Alicyn McLeod:
Most of us don't really do complicated math, I sure don't. I'm not doing calculus, maybe a little bit of algebra here and there. But really we're analyzing. We're analyzing, well at least for me since I'm a tax professional, I'm analyzing the intersection between your financial situation and applicable tax law and working with you to give you some optimal answers.

Alicyn McLeod:
And I think until folks really start working with someone like me, they don't realize that that's what we do. It's really more about the analysis and trying to help somebody navigate their different choices and come up with ones that are better than others, that are from both tax, and non-tax perspectives.

Russ Thornton:
Got it, yeah, that's interesting and I'm glad you shared that. I think so. I like the highlight there is that while most people come to you because they need their tax return filed, as they get to know you and develop a relationship, there's a lot more there that you can do to round up the relationship and your advice and help them make smarter, more informed choices. Or at least that's kind of how I interpreted what you said.

Alicyn McLeod:
Yeah.

Russ Thornton:
So yeah, I appreciate you sharing that. So, I've got a nephew who is a, let's see, he's a sophomore over at Stanford in Birmingham. And he I think is pretty much decided he wants to go into tax. I think he's on track to graduate with a degree in tax. I think he's on track to get a CPA exam and I think he's going to do a masters of tax after he gets his bachelor and a CPA.

Russ Thornton:
But for other, let's say a high school senior or someone in college that listens to this or they've talked to someone else and they say, "I really like what Alicyn is talking about, that sounds like it's interesting, I maybe have an aptitude for math or for analysis. Clearly at this stage it doesn't look like tax filing is going anywhere anytime soon."

Russ Thornton:
What advice would you give to a student that maybe would like to learn more or is interested in possibly pursuing some kind of career in tax or tax preparation or as a tax professional?

Alicyn McLeod:
Well, I'm going to say something that not all of my colleagues like to hear. My advice might be a little bit different. We talked earlier about my designations. I am a certified public accountant. It is a state license. I had to go through a lot to get that license.

Alicyn McLeod:
The way the CPA exam was structured when I took it and still currently is it's a rolling 18-month period in which you take four tests. They're pretty challenging. They may have nothing to do with the actual work that you're currently doing or will do in the future. For instance, all I do is tax and tax was just one component of the CPA exam, there's a lot else in there.

Alicyn McLeod:
And it might be true for others, they never touched tax and yet they'll have to learn some fairly esoteric tax law to get through the exam. The license has served me well, I can't lie. But I've also been doing this 20 years and times have greatly changed.

Alicyn McLeod:
So, what I have seen over the years is for me for someone at my age and my stage and my profession, the CPA license is a good thing to have and expected really. But I would say for someone who's starting out to evaluate that a little bit more closely if having a CPA license makes sense for what you want to do.

Alicyn McLeod:
Again, times have changed and what I have seen valuing over the years is one, having a large network of colleagues, mentors, advocates, folks that you can go to for business development, professional development, commiseration, helping you get a job, helping you start a business, et cetera, et cetera.

Alicyn McLeod:
And that's something that takes a long time to build up. If you're asking me do you have 18 months of your free time that you can devote to something professional? Weigh the CPA license against building a network.

Alicyn McLeod:
The other thing that weighs in too is getting into software development, building an app. More and more and more this profession is electronic, it's digital. And we're very under supported as a profession.

Alicyn McLeod:
Not that there aren't tax softwares and auditing softwares, there are, but we gripe about them all the time. So, if you're thinking I like tax, I like accounting, I want to kind of get into the profession and see what's going on, maybe if you have again 18 months of free time, maybe instead of getting a CPA license, design an app, design a program, figure out what's needed and see if you can build that.

Alicyn McLeod:
That's a very different thing and I'm not saying don't get the CPA license, just maybe think about it.

Russ Thornton:
Well actually I appreciate that. I think that's a refreshing perspective especially coming from you who's been at this for 20 years. It sounds like there's a lot of ways to be involved in the tax profession without necessarily getting your CPA or even filing tax returns.

Russ Thornton:
If you want to do something on the IT side or develop an app or something like that or you can maybe be more maybe more indirectly involved in tax working for maybe a larger firm to kind of test the waters and see if it's something you actually enjoy doing or not.

Russ Thornton:
As I recall, you did not ... I don't believe becoming a CPA was a childhood dream of yours. I think as I recall you originally planned to be a vet, is that right?

Alicyn McLeod:
Yes, yes. That was probably when I was a tween, a teenager. That was really what I wanted to do. But I'll actually have to go back a little bit earlier than that and say when I was little I would take the piggy bank out if I went to someone's house like my aunt, my grandparent's, whoever, I'd take the piggy bank out and I would open it on the floor and let all of the change go everywhere and I would count it up and put it in piles and tell everybody how much it costs.

Alicyn McLeod:
It's like, "Well, she likes to count money. She can either be a banker, an accountant or a drug dealer." And fortunately I became an accountant. But yeah, there are, kind of going back to your point, there are a lot of ways to be involved in this work and it can look a lot of different ways.

Russ Thornton:
So even though you at one point had aspirations to be a veterinarian, it sounds like maybe accounting was in your blood at an early age.

Alicyn McLeod:
Maybe it was. It's interesting. There's no accountants in my family, everybody is an architect or a teacher, my mom is a newspaper reporter. Nobody owns their own business or anything like that, but maybe there was just something there. I was like, "You know I guess I like money."

Alicyn McLeod:
I don't know if at the age of five I had any insights or analysis to offer in the coins that I was counting. That did come along a lot later though.

Russ Thornton:
Yeah, well thank you. That's a cool story. I'm glad you shared it. So as you know Alicyn, this is Women's Retirement Radio.

Alicyn McLeod:
Yeah.

Russ Thornton:
So everything that we do and talk about kind of comes back to retirement for women and their families. So I'm curious, when you think of the word retirement, what comes to mind for you personally?

Alicyn McLeod:
I would say my definition of retirement is having the freedom to choose what you do on a daily basis.

Russ Thornton:
In terms of work or just broadly in general?

Alicyn McLeod:
Just in general.

Russ Thornton:
Yeah.

Alicyn McLeod:
It could be worse. I've seen this a lot with my clients where they "retire" but they never stop working.

Russ Thornton:
Yeah.

Alicyn McLeod:
Whether that's good or bad is a conversation for another day. You can attach some value judgment to that I suppose. But they choose it.

Russ Thornton:
Yeah.

Alicyn McLeod:
Is the difference. They are financially secure and so if they continue to work it is at their choice and not because it's a necessity.

Russ Thornton:
Well and you've maybe seen or know people too that have also retired. And they can afford to retire but they don't really retire to something. And so they spend a lot of their time just kind of sitting around, they don't really have a lot going on in their daily routine. They maybe lost some of their social network that they got from work or whatever.

Russ Thornton:
And that in my experience can lead to declines to health or declines in cognitive ability, things like that. So, I like your perspective because as long as it's a choice and you're not being forced to make a decision, I think for those that continue to, whether it's work or volunteer or spend time with family, as long as you got something going on to kind of occupy your time and your mind, I think that's just a healthier approach to what I think we generally think of when we talk about retirement.

Alicyn McLeod:
You know I'm a big fan of the work of Peter Drucker who is pretty much the father of modern management theory. He did a lot of work studies with corporate executives in the early mid 1900s.

Alicyn McLeod:
And he talked about that type of person, the executive retiring and what did that look like and they found by and large, and we're talking, this is our evidence we already know it too, but studies have proven that folks who retire but all they did was work, they didn't have time set aside for their family, they didn't have time set aside for their community, regardless of what big plans they have in retirement, they actually didn't go to those plans because they just didn't know how to do it.

Alicyn McLeod:
They hadn't been doing it all along and for me, at least for myself personally, I've taken those studies to heart. And so I try to kind of pre-retire, build that in the things that I see myself doing when I retire, I try to do those now so that I'm kind of retiring as I go, which is a luxury to be honest, but it's definitely one that I take advantage of.

Russ Thornton:
Well good for you. I think there's a lot of benefits to that and what I hate to see people do is kind of sign up for the deferred life plan where they think, "Well I'll do all this cool stuff that I've always wanted to do when I've got time, when I'm retired." And that might be when I'm 60 or 65 or later.

Russ Thornton:
And a, you don't know if you're going to live that long. Hopefully you do. B, you don't know that if you're living how healthy you're going to be. So, I like the idea of planning for and preparing for the future but enjoying your life and doing some things along the way instead of waiting another 20 or 25 or more years thinking you're going to do it all down the road because you might not be able to or things might not play out quite the way you think they may.

Russ Thornton:
So, I applaud you. I think doing some of the mini retirements along the way is a cool way to do it and a great way to live life. So good for you.

Russ Thornton:
So Alicyn I've written about and I've talked about I think women generally, and I'm painting with a broad brush, have some challenges that they face that maybe their male counterparts don't and I'm sure you're familiar with some, I can list some.

Russ Thornton:
What's the biggest challenge you think women face when they're planning for their own retirements?

Alicyn McLeod:
I think that's a good question Russ. I'm not sure that I'm the best person to answer that just because of the way I do my work and interact with clients. But one thing that I do see occasionally that gosh, I kind of take it personally and find it a little distressing, is there is some notion that someone else will help them solve their money problems.

Alicyn McLeod:
And I don't see this all the time but when I do it's honestly disastrous for the individual. There's a difference between delegation and advocation, right?

Russ Thornton:
Yeah.

Alicyn McLeod:
And what I see with good client relationships is delegation. But from time-to-time I will see folks who are in that advocation and it could be all kinds of things, it could be just a bad money story. How they were raised around money and they don't want to talk about it, don't want to deal with it for various reasons.

Alicyn McLeod:
It could be how they receive their money later in life. It could be that they inherited the money from someone who passed away and now there is sort of this emotional angst around the money.

Alicyn McLeod:
I do see that somehow with folks that are getting family money or if it's a case of divorce. Sometimes I'll see women who their spouse was the bread winner, they're getting some alimony and maybe a lump sum payout but then that is going to run out.

Alicyn McLeod:
And over the years I have to watch that run out and they have no plan to supplement this income and their standard of living is going to be greatly impacted but they're in denial.

Alicyn McLeod:
So, I don't know how to sum all that up other than to say maybe what I see when I do see it as an issue is some times folks just kind of show up to their retirement and it kind of just is what it is and it's not what they were expecting.

Russ Thornton:
Yeah, I've experienced that and I think you and I have discussed it in prior conversations. But yeah, I've experienced that with people especially around divorce, which you mentioned, where either by conscious decision or just kind of unconscious it kind of fell into happening this way where the husband maybe is the breadwinner like you said, they kind of take the primary responsibility of the family finances and the wife maybe handles the checkbook, pays the bills, kind of knows what's going in or out but maybe doesn't have as much familiarity with investments or income sources or the plan for the future like you're talking about.

Russ Thornton:
And yeah, whether it's an unexpected divorce or the loss of a spouse or other situations, it can be a really, really rude awakening especially if it happens later in life to someone that's say 55, 60 plus years old.

Alicyn McLeod:
Yeah, yeah.

Russ Thornton:
That going back in a workforce to earn a meaningful income, I won't say it's impossible but that's going to be a pretty tough situation. And yeah like you said, they basically kind of have to play the hand they've been dealt at that point. And it can be a really stark realization and it can often cause or call for a big lifestyle change.

Alicyn McLeod:
Yes.

Russ Thornton:
So, it's sad but I think you highlight a major challenge that people need to think about and be aware of. From your perspective Alicyn, and I know you're not typically working with necessarily kind of the pre-retiree woman that's getting ready to step over the line into retirement.

Russ Thornton:
But you do work with a lot of women and I know you work with some women business owners and women that are in relationships and things like that.

Alicyn McLeod:
Yeah.

Russ Thornton:
How would you say your work impacts women and their families as they're thinking about or planning for retirement even if retirement is 10 or 15 or more years down the road?

Alicyn McLeod:
Yeah, kind of going back to how complicated our tax code is, and what I said earlier about the same dollar getting taxed multiple times, multiple ways, I think a lot us take for granted just how expensive taxes are.

Alicyn McLeod:
Do a poll. Ask folks generally what's their largest expense and most people will say housing. It's not housing, it's taxes. It's taxes for pretty much everybody.

Alicyn McLeod:
But for most of us who are receiving our income in the form of a W2 we're working for a company, somebody else, those taxes primarily get withheld out of our paycheck and it's like they didn't happen.

Alicyn McLeod:
So, simultaneously I think folks in this country know our taxes are too complicated but on the other side of that, most of us don't really feel that bite. Even our property taxes are taken out, for many of us, taken out monthly in our mortgage payments.

Alicyn McLeod:
So, there's all kinds of ways that we don't really see taxes or don't think about taxes even though we're paying so much in taxes. So, for me when I'm helping people as part of their overall longterm financial planning, they have a range.

Alicyn McLeod:
And maybe not a number but a range of numbers and if they can get between this number and that number of net worth, they know that they can retire comfortably and give generously and take care of their kids, all their goals can be met or at least reasonably assured that their goals can be met.

Alicyn McLeod:
And taxes are really a big part of that. They really are. So, for me that is, it kind of again goes back to education. I would love for folks who are a decade or two out or really anybody, but certainly someone who's kind of looking at that longterm plan to see in there is there anywhere whether it's in a tax deferred accounts, if it's a taxable account, potentially sometimes if you're receiving a W2 but that's harder.

Alicyn McLeod:
If there are ways that you could tweak things here and there and do things slightly different that would save you some meaningful tax dollars now, don't give that to the government, instead give it to yourself.

Alicyn McLeod:
Maybe you give more generously again or maybe you're able to put away a little bit more into your investment vehicles or something like that. But just kind of the awareness of how expensive taxes really are.

Russ Thornton:
It's interesting you bring that up because I know we were talking earlier about underpaying versus overpaying, getting a refund versus writing a check sometimes. But what we didn't talk about then, and which you're highlighting now is that people are just often detached from their total amount of taxes they're paying.

Russ Thornton:
So they're kind of focused on do I owe more, do I get a refund back, but they don't realize that they might be paying 25 plus percent of their overall income in a year to some form of taxes and you're right, I think people often lose sight of the fact that clearly maybe not in any certain year but certainly of their lifetime taxes are far and away probably going to be their largest expense by a long shot.

Russ Thornton:
So, I think you raised an interesting point there and one that people should take to heart and be aware of as they're thinking about retirement whether that's five years or 15 or more years ahead of them because yeah clearly taxes are going to play a big role both leading up to and beyond retirement.

Russ Thornton:
Kind of on that same theme, I have an opinion here but I'd love to get your thoughts. So I've heard and read a lot of financial advisors and planners think that depending on so much tax structure that if they're in a lower tax bracket, let's say they're in the 22% tax bracket, they should do a Roth conversion to basically fill up that tax bracket up to the next bracket as an example. We don't need to get any numbers.

Russ Thornton:
And they think that should be an annual kind of something to do every year with the expectation that all kind of fingers point to taxes going up in the future. Well I won't tell you what I think. I'd just like to know what you think. Do you think systematic ongoing Roth conversions make sense given in a certain set of circumstances?

Alicyn McLeod:
Okay. All right. I definitely do a lot of this work with clients especially ones who are heading into retirement, maybe it's their early retirement years and they, again going back to what you were saying, you're looking, if you want to do this strategy, you're looking for low income periods because you don't want to push yourself unnecessarily into high tax brackets or higher tax brackets.

Alicyn McLeod:
So, generally what that means is someone who's retired and now their W2 income has fallen off and they haven't yet hit ... required minimum distributions on their IRAs and social security.

Alicyn McLeod:
So, they're in this sort of Goldilocks zone if you will, where Roth IRA conversions won't give them a huge bump in their income. So now let's go ahead and take into income, let's go ahead and pay in theory nominal taxes on this. And then now we have this bucket or increased bucket of non-taxable income in retirement as well as maybe some multi-generational planning where yes your heirs will have to take distributions from a Roth IRA just like they would from a traditional inherited IRA but they won't pay tax on it.

Alicyn McLeod:
So maybe you're paying tax for your heirs basically, income tax, that is. Okay, so that's kind of the premise. I like these. I think it's fine. But I don't think it's a knee jerk sort of thing. I don't think it's, "Oh, well I'm going to have some periods of low income let's convert everything."

Alicyn McLeod:
Again I think it's a nice to hedge your bets. Will tax rates go up? I've been saying they'll go up for years now and nothing just seemed to happen. I think that's hard to say.

Alicyn McLeod:
Also, will congress find a way to indirectly at least tax Roth IRA distributions? I could see where maybe Roth IRA distributions later on in theory don't change household income but maybe they get added back to modified adjusted gross income and that counts for purposes of Medicare premiums or something like that.

Alicyn McLeod:
So, I could see some sort of indirect whatever. I think if you're trying to put all your eggs in one basket and have everything in a Roth IRA, that's probably not advisable. But in general to have some of your available cash in a non-taxable account when you are in retirement, I think that's a nice option to have.

Alicyn McLeod:
So, I don't know. I have a few thoughts on that. I will say there's one time where I really, really like it and this doesn't happen too often, this comes my way, is if I have a business owner, usually it's a business owner and they're going to have a big loss of the year, maybe even enough that it creates in their operating loss. They're going to have zero taxable income unlike why not convert especially if you're not going to pay any tax at all.

Alicyn McLeod:
So, if you can do it pretty much tax free or a very low tax bracket, it does make a lot more sense. But that was a lot. Tell me your thoughts. I want to know what you think about these.

Russ Thornton:
Yeah, I appreciate you sharing that and I hate that, I didn't want to drag you too far into the weeds on that. I think the bottom line is, it goes back to something you said earlier, it kind of depends on the person and their situation.

Russ Thornton:
Yeah. So generally speaking I'm not a fan of Roth conversions unless the stars are perfectly aligned. Like you were talking about the business owners they got a mid operating laws and they can basically do a few dollars for zero tax or 10% or 12% or something like that average.

Russ Thornton:
I think there are situations where it makes sense where I'm genuinely not a fan is I see so many, and it sounds like we're on the same page here, I see so many people that seem to just kind of make a blanket prescription that if you're in X tax bracket you should be converting at least up until the amount that would you push you up in the next tax bracket.

Russ Thornton:
And my feeling is that's really based on a lot of assumptions about future tax rates and things like that, none of which we know. And so I'm generally not a fan of taking points off the board, paying taxes today based on an assumption that may or may not come true.

Russ Thornton:
But having said that, I like you I can certainly see and have experienced situations where it makes a heck of a lot of sense. So, I appreciate you indulging that. I was curious and for our listeners I apologize we got a little technical there but I was not-

Alicyn McLeod:
No, I would imagine your listeners are interested in Roth conversions.

Russ Thornton:
Yeah, that's fair. But anyway, thanks for indulging me.

Alicyn McLeod:
Yeah, yeah.

Russ Thornton:
As we start to wrap up our conversation Alicyn, and this has been great by the way so thank you again for joining us.

Alicyn McLeod:
I've had the best time, thank you.

Russ Thornton:
Yeah. So I think you've already kind of touched on some of this a little bit but I'd love to just ask you. So, you run a tax practice, you're busy, you've got a lot going on, I know you volunteer and do some things here locally.

Russ Thornton:
But when you've got an hour or two to yourself, just personal time ... Maybe I should say if you have an hour or two to yourself, how do you most enjoy spending that time?

Alicyn McLeod:
I listen to podcasts. I do, I do, I love listening to podcasts or audio books. I love going for a walk. I'm telling you, if it's at all not rainy this afternoon I will definitely be going for a walk after work.

Alicyn McLeod:
I like to do yoga, going back to the beginning of our conversation for sure.

Russ Thornton:
Clearly.

Alicyn McLeod:
I love to cook. I'm not very good at it but I'm just very happy in the kitchen trying to put stuff together and seeing how it comes out.

Russ Thornton:
What's the meal you most enjoy cooking?

Alicyn McLeod:
Well, the meal I probably most enjoy cooking it does actually turn out well and it's chicken pot pie. It's a really good recipe and it's a crowd pleaser. So that one's my favorite.

Russ Thornton:
Nice, nice. My wife would be happy. She is a connoisseur of chicken pot pie and what's your favorite non-financial podcast?

Alicyn McLeod:
My favorite non-financial podcast, oh my gosh, there's too many to name but the one that I'm recently into is called Huberman Lab and it's Dr. Andrew Huberman who's a neurobiologist, neuro physicists, something like that. Physicist that doesn't make any sense. Neurobiologist and ophthalmologist. He has a lab. He and his students do a lot of experiments and he basically is just lecturing the general public on how our body works, how we can function better, how we can see better, how we can build our muscles, how you can have better workouts. Just really, really cool stuff. It's so densely packed.

Alicyn McLeod:
He's just throwing knowledge at you and each episode is probably about an hour or two hours long but it's excellent.

Russ Thornton:
Is it fairly technical or is it kind of you do a good job of putting it into kind of plain English?

Alicyn McLeod:
Both, both. He does not shy away from being technical but then he breaks it all down so you can understand it. I wish I ... Which is exactly how I like to learn.

Russ Thornton:
Awesome. Well I appreciate you ... I haven't heard of that one so we'll be sure to share our link to that one in the show notes. Alicyn we've covered a tone today, this has been fun. If there were one thing our listeners could take away from today's conversation, what would you want that one thing to be?

Alicyn McLeod:
Just get educated about taxes.

Russ Thornton:
In addition to calling you or reaching out to you and we'll give you a chance here in a moment to share how people can do that, are there any particular resources or a book or a website that you would point people to, to get better educated if they do want to kind of stay, take a DIY approach?

Alicyn McLeod:
My blog is not bad. I write a lot of perennial articles meaning they should be good for however long until maybe tax law greatly changes. So, there's probably some good content on there for folks who are looking just for a little bit of understanding on that particular subject.

Alicyn McLeod:
Other than that, that's a good question. There's a lot of places I go to as a professional but I'm not sure where I would point folks to. Try my blog and if that doesn't have your answer, email me and ask me what your question is and I'll point you in the right direction for that.

Russ Thornton:
What a perfect segue. So, tell people where they can find your blog Alicyn.

Alicyn McLeod:
Sure, sure. So my website is Atlanta.tax, go figure. So go to Atlanta.tax. There's all kinds of content out there. The blog is there. There's also a content form. There's a become a client form for anyone who needs a little bit more in-depth conversation and maybe a relationship.

Russ Thornton:
Awesome. Is your website the best place for people to just reach out, learn more?

Alicyn McLeod:
Yeah.

Russ Thornton:
Or is there any other places you can point people to?

Alicyn McLeod:
Yeah, absolutely.

Russ Thornton:
Perfect. Well we'll definitely share that along with the podcast you mentioned in the show notes and I'll include your LinkedIn profile and things like that so people can reach out and get a hold of you if they've got questions or want to learn more about maybe working with you. So thanks for sharing all that.

Alicyn McLeod:
Yeah, absolutely. We just had fun Russ.

Russ Thornton:
Yeah, this has been great Alicyn. I'm glad we did it. It's always a blast talking to you and catching up, so thanks for taking the time and sharing with us today and giving people a little bit of a peak into what it is you do and how you do it.

Russ Thornton:
I think it's been great and I think people will get a lot from this conversation.

Alicyn McLeod:
I hope so.

Russ Thornton:
And everyone out there for listening, thanks again for joining us. Again, this has been Women's Retirement Radio and we will look forward to catching up with you on our next episode.