Tax-savvy money tips

ALEX ROCA: Hello, and thank you for joining Women Talk Money. My name is Alex Roca. And I will be your host for today's conversation. Today is all about those tax-savvy things that you can do during tax season and year-round. We'll start off by talking about some quick tips for all the last-minute filers out there. Then we'll move into ways to help make the most of any tax refunds you do receive. And we'll spend the bulk of our time talking about ways to help reduce your taxable income going forward. Today with me are Jessica Maloy, VP wealth planner, and Nehanda Julot. She is a workplace financial consultant. So great to have you both here.

OK, everyone. It's tax season. So to start off, I just want to invite you all to take a deep breath. Whether you've already filed ahead of the April 15 deadline or you're still pulling things together, this doesn't have to be the most stressful time of the year. It can actually be a good time to recalibrate. And I want us to begin on that note. So Nehanda, how can tax season be an opportunity to help strengthen your finances?

NEHANDA JULOT: Hello, everyone-- calling in from Chicago here, where tax season still means winter for us. So I appreciate the deep breath we took together, the moment of recalibration, thinking about, perhaps, spring for most parts of the country, a reset. So when we think about this in terms of our finances, it's not only looking ahead to opportunities to plan for the future, but it's also reflecting on the past year. What went well? If you sit down with me for an appointment, I'm always interested on what went well, what are we celebrating, and then looking forward on how we can plan ahead.

When we think about taxes, your income and expenses are probably top of mind. And so you may have received tax forms, like W-2s or 1099s, that spell out how much money you made in the last year. I'm bringing into the room my mother, who called me frantically yesterday. I can't find my W-2. Again, that's when we take a breath. And there are options. There are ways to go to our employers and financial institutions and get these documents. So we're going to take a breath, gather what we need, and use that information to start assessing our savings and spending as well as putting together a plan that outlines our goals.

JESSICA MALOY: And I would just add, Nehanda, that if you are facing a tax bill this season-- so you actually owe-- don't let yourself get too hung up on that. I always try to encourage clients and let them know if you're paying taxes, it's because you had earnings or you've had some gains. And money after taxes is still more than what you started with. So we're going to try to talk today, too, about a few ways that you can potentially reduce taxable income in the future so that you have a plan and you know where your resources are.

ALEX ROCA: Thank you for that, Jessica. And we actually have a lot to cover today. So I'm going to dive right into our first big topic, tips for last-minute filers. So Jessica, what are some things to think about before you file your taxes?

JESSICA MALOY: Well, I love what you said at first, which was just breathe. And I think that was a word that just comes to mind as we talk about taxes in general-- is it can be very overwhelming. And there's a lot of emotions around filing. People do worry. But if you're taking care of things and you have a plan of action, it can make it a lot less stressful on you.

So if you're a Fidelity customer, too, don't forget, if you haven't noticed, we actually have a discount on TurboTax for filing your 2025 taxes. Now, there are a few questions that you can ask yourself before you file. So we've got a slide here that talks about these different questions that are helpful to ask. First thing is, have you made all your contributions for the year? There are a lot of different ways that you can save on a tax-deferred basis that might really help.

There are, of course, limits up here on the slide that we're going to bring up next because 2025 contributions for several different types of accounts can still be made through the tax deadline of April 15. Some things you'll want to consider is, have you funded a traditional IRA if you're eligible, or your HSA ahead of time? There's still time. And it could help you reduce your tax burden. Roth IRAs, as well-- don't forget that option. Even though it's not a tax saving upfront, those accounts can be very powerful, growing tax-free for your retirement for later.

So one way that you can fund some of these accounts, too, is with a lump sum of what you would have expected to receive for a tax refund. So if you're lucky and you're expecting some money back, that's a way that you can put that money to work right away, long-term for you. All right. So let's go back to our questions for a minute. Another thing you want to ask is, do you qualify for any tax credits? Some things you may want to consider-- Child Tax Credit, the Earned Income Tax Credits, and the American Opportunity Tax Credits. So make sure you know if you're eligible for those. And are you aware of all of your available deductions? There are some options to either use the standard deduction, or if you do itemize, doing that math and understanding how much of an impact that's going to make or whether you'd be better off with the standard--

All right. So our fourth question here-- do you have all your forms? We mentioned that already. This is about getting organized, making sure that you know all of the places you should have a tax form from. And just check the box. Most things are available online now. So it's easy to quickly retrieve these documents if there's anything that you're missing. And just in case you're a little more stressed and need a little more time to gather this information, you can file an extension.

Now, that does need to be done before the tax deadline. But it would give you through October 15 to file your taxes and potentially get some help. Now, you don't have to do this on your own. There are a lot of people out there that this is what they do for a living. And they can be very supportive. Now, keep in mind that that extension is only for filing. It does not apply to the taxes that are due. So if you do have an estimated tax bill, make sure that you get that payment in.

And then, again, there are a lot of details when it comes to filing your taxes. I always encourage everyone to meet with a professional. Make sure that there's not something you should be doing or could be doing to help improve your situation. Sometimes, we just don't know we don't know.

ALEX ROCA: Absolutely. And that is such a great segue because we always do say call for help. But how do we know who does what or who to call for which questions? Do we call our financial professional or a tax professional? Nehanda, can you clarify that for us?

NEHANDA JULOT: Of course. I think what's important is you understanding that you are creating your team, your team that is here to support you as a financial professional and as a tax professional that can make up a part of that team. And we will have a slide here-- so pull out your phone if it's also easier for you to take a picture-- to help distinguish the two roles.

So this is you understanding the players on your team. Whether it's a tax professional or a financial professional, there are different levels of service available to help. And it will definitely depend on your specific situation. And by the way, what we're talking about today, there are tax rules and things that might change from year to year. So it's important to keep those conversations going with these professionals that are on your team.

There's some overlap between these two roles. Some financial professionals can provide in-depth tax insights. But it really depends on their credentials and your unique situation. In terms of a tax professional, they are the fit for you as it relates to filing your taxes, as we talked about, due in April. But there's extensions tied to that. So we can take that breath, like Alex mentioned earlier. They can talk specific-- tax-specific insights, obviously, provide guidance on eligible deductions or credits, and they can answer any specific tax-related questions. But with either the tax professional or the financial professional, just please keep in mind that this is a collaborative conversation. They want to hear from you as much as you want to hear from them.

So really, it's important with either professional to share what we call at Fidelity your life events. What has changed in your life from last year to this year or within the year that would impact your financial situation or your tax situation? They're the experts in their field. But you're the expert in your life and what is going on right now. So really feel empowered to share that information. And just on a personal note, my husband changed careers, went back to school. I had a new baby. So these are important things that I would want to bring up that would then perhaps make me eligible for certain deductions in the tax world.

Now to the financial professional, they can help you create your overall financial plan. But I'm going to backtrack and actually say co-create because, again, this is a collaborative conversation. They want to hear what's going on in your life, as well, which will impact any sort of financial plan that you all co-create together.

And that conversation could then lead to perhaps a budget to monitor your saving and spending, help for planning for retirement, and not only us choosing when we want to retire. They can run the numbers and see what the numbers say. But I always tell my clients, what if retirement chooses you sooner than you expected? So making a plan for either scenario is important.

Also, helping manage debt-- so many of us in the room may have a relationship with debt. What does that look like? What are my goals in terms of addressing my debt? What they can also do is offer managed accounts for you and potentially implement tax-smart investing strategies. And what tax-smart investing means-- that means more money in the pot toward retirement, toward those other financial goals that we have.

With a managed account, there are generally fees associated with this. So have that conversation. There's transparency in that financial professional sharing that information with you. Feel comfortable knowing that. And then you can call us or click the button at the bottom right of your screen. Even if you ask someone who doesn't know the answer in either realm, they can for sure point you in the right direction. And I just want to spend a moment. Do not feel like you need to have all the questions and know what to bring in terms of an agenda item to each of these professionals. Just come as you are. And they want to get to know you, which would then lead to the conversation and where it goes.

ALEX ROCA: Love that reminder, Nehanda, and just the breakdown of what a tax professional can help you with versus a financial professional. Excellent tidbit there. Now, if you think you're going to owe taxes when you file, you want to make a plan for paying those. And if you're expecting a refund, you also want to make sure that you're putting that money to work for you. So Nehanda, I'm coming back to you. What are some of the ways that we can help make the most of that tax refund?

NEHANDA JULOT: I'm excited because if you didn't notice the word "tax refund," "refund" has the word "fun" in it. So this is where we get to the fun part because this is about you having overpaid your taxes in 2025 if we're speaking now. So essentially, you gave the money-- the government free money temporarily. So now it's about if, I'm getting a refund and I'm getting that money back, how do I put it to work?

So if your refund, first and foremost, feels really high relative to your income, you may want to revisit your W-4 to see if maybe you're withholding too much from your paycheck because that is money that could have been put to work in terms of spending and saving throughout the year. And let's be clear that, in fact, not everyone will get a refund. In fact, the IRS reported that 37% of filers did not receive a refund in 2025. But for those who did, the stat is that the average refund was about $3,167.

So that could be a nice windfall for someone. And so it's important to think about when somebody receives any sort of windfall, what is the plan ahead? I'm OK with you perhaps spending on your wants as long as we're also addressing our essential spending. Are my essential needs covered? Have I considered my financial big picture? And then we always want to address our "why" for our spending. Are there wants that I want to address? And we do that with non-judgment. And I have just a small story to share.

I read this excerpt in a book of a financial planning professional working with a client who received their tax refund. And they went and bought a big-screen TV. And everybody was judging that purchase. But when that financial professional got to know that client, he learned that she lived in a challenging neighborhood where there were crime, sirens, things like that. And that was her way to step away from the world beyond her walls. So that was her "why." So understanding just why you're spending your money, how you're spending, but making sure your essential needs are covered with any sort of windfall is important.

And what you decide really depends on your situation. Everybody's situation is unique. And sometimes, like I said, we might judge ourselves for what we do with our money. But just know-- lean on us for guidance. And we can also serve as an accountability partner as financial professionals. If your focus is building up your financial stability, we have a framework that can help you decide how to balance your priorities. This visual that you're seeing right now is actually one of my favorite articles. It comes from an article that I personally bookmark and bring up with my clients because I see it as a roadmap because we can get very overwhelmed with what to do with our finances. And I love that it lays out, what are the things that I should consider first, second, third, et cetera? So we all need to prioritize sometime.

So if I walk you through the steps very briefly, number 1, it's stating we want to make sure we make our minimum payments, minimum payments on debt. Your credit is so important. It's going to follow you the rest of your life. That is financial planning self-care, to protect your credit. So we want to make those minimum payments, number 1.

Number 2, if we have access to medical savings vehicles, we want to consider contributing to them, perhaps financial spending accounts we might have access to or health savings accounts. They have some similarities and differences. Definitely, we can have that conversation with you if you reach out to us.

Number 3, this is when we get into making sure we have a buffer, a.k.a. an emergency fund. And some people think, I need to throw in a big lump sum to make that happen. As you see at Fidelity, we're here to support baby steps and milestones to get there.

So we say start by throwing in $1,000 and even inching your way to that amount if that's what you need to do, or you can think about it as, what is my one month of essential expenses? How about that could be a milestone as well? It might be $1,000. I know out here in Chicago, it's not. So whatever that might look like for you-- but again, milestones to that are OK. Those are wins, too.

Number 4, capturing any sort of full employer match-- so if you work for an employer and they are providing any sort of match, we call that free money. And so really understanding how that works, what you need to contribute in order to get that match is important and something you should take advantage of if the opportunity allows itself.

Number 5, paying off any credit card debt-- so eliminating debt-- we know that could be top of mind for many people. So here's where we think about paying more than our minimums. And for some people, that might take them putting down an inventory of their debt. What's the interest rate? We would help you with that, get organized, and see what we want to tackle above and beyond the minimum. I'm thinking credit cards that have those very high interest rates.

Number 6, this is go time for fully funding your emergency fund. As a guideline, we say aim to save at least three to six months of your essential expenses. As you saw in step 3, we started with that milestone. And this is the final goal for the emergency fund. So inch your way there.

And then number 7 is weighing down investing versus debt. I get that question so many times with my clients. And so we have a general rule at Fidelity that is a 6% rule. Generally, if my interest rate is 6% or above, I'm thinking about doubling down and tackling that down versus if the interest rate is below 6%. So roadmap-- ways to help you prioritize. I love this. Please take a picture if you haven't already.

And then next, we want to address which accounts could do what we want it to do in sort-- in terms of taking things to the next level? So we're talking investing here. And if we think about a refund-- let's say we're getting that $3,000 or so refund, or less, or more-- you don't have to necessarily put it in all-- all in one place. We really think about, at Fidelity, categorizing things, categorizing our goals, and aligning that with perhaps the account that it's in, perhaps what the money is doing as well.

So what we want to do is align our goals with our accounts. I say every account has a job. And I want to address, too, and acknowledge as powerful and fabulous as we are, sometimes we may have a difficult time articulating our goals. That's OK. That doesn't mean you don't reach out to us. We would help and guide you and help you address and be able to get to the point where you can visualize what you want this money to do.

Next, we're in the slide that says find out what account might be right for you. And I love this because it's really helping, again, us address categorizing our goals with our accounts. We have a quick quiz. And I was happy to see this. I bookmarked that, as well, for future appointments with my clients-- that can help you determine what type of account might be right for you, or you can scan the QR code as well. So you will have the resources at your fingertips.

ALEX ROCA: Thank you so much for that, Nehanda. These are all such great tips to help you make the most of any tax refund that you receive. Now, I want us to switch gears and talk about how we can potentially help reduce the taxes we pay next year and well into the future. So Jessica, what are some ways that we can help reduce what we pay in taxes in 2026?

JESSICA MALOY: There's actually quite a few things that we can tackle. And we mentioned them just briefly earlier. Remember, we asked a few questions about ourselves before filing. And we want to be thinking about and planning and making these moves throughout the year. So hopefully, as we do-- go through this exercise today, when you start with 2026 taxes, you have a better idea of, what can I be doing throughout the year to help improve my situation?

So of course, on top of potentially itemizing your deductions and learning more about those tax credits, there are a few tax-efficient vehicles we can use. And so on this next slide, it's going to give us a breakdown of some different ways to reduce your taxable income. Now, we want to start with maximizing any pre-tax retirement contributions. That's probably the most powerful way that you can help reduce your taxable income. Think 401(k) plans. That allows us to potentially defer $24,500 a year. And then, of course, if you're over 50, we get extra savings and another $8,000.

Now, depending on your income level, you could possibly contribute another $7,500 to a traditional IRA and take a deduction. So it would be a pre-tax contribution. And people 50 and up, again, you get a little extra kick-- so another $1,000 for-- actually, it's $1,100 now for that contribution. So IRAs, 401(k) plans-- very powerful. But also, consider a Health Savings Account. So we've referred to HSAs. If you're covered by a high-deductible health plan, you can contribute up to $4,400 for yourself as an individual or, for your family, up to $8,750. Those over 55 can add in another $1,000. Those funds, while reducing your taxable income, potentially can grow and be used tax-free in the future for health care costs-- so another powerful way to save.

And then don't forget your charitable giving. Fidelity has a lot of resources to help you understand what to give, when to give it, and how to give funds to charitable organizations. And you can also connect with us anytime to talk more about how you can utilize this strategy to help improve your tax situation.

ALEX ROCA: Thank you for that, Jessica. Now, making contributions to some of these accounts can not just help us in the current tax year. There can also be advantages to having our money potentially grow tax-deferred in these over time as well. Nehanda, can you tell us a bit about other tax-efficient accounts that we could potentially invest in?

NEHANDA JULOT: Yes. I want you all to remember three words-- manage, reduce, and defer. So the manage part-- I'm going to break down each one, starting with manage. Manage is just what it sounds like. You're managing your accounts and your investments. But that doesn't mean you're still not the boss. So we'll get more into this later.

Reduce is what we've been talking about. It's making contributions and finding deductions to help you reduce your taxable income. And then deferring taxes-- you can think about this occurring in your retirement account, such as your 401(k)s, your IRAs, and things such as HSA accounts. So again, manage, reduce, and defer.

Now, you can bucket most accounts into three categories. We're going to talk about tax-deferred/tax-exempt versus taxable accounts. We're going to first start with the tax-deferred or traditional accounts first because this is what Jessica alluded to before when she was talking about reducing your taxable income. So again, these are your employer accounts, your IRAs, et cetera. They're funded with pre-tax money. And you may have to pay taxes when you withdraw that money in the future. And there could be penalties involved as well. So again, when there's a money move that you're making and you're unsure, please, please do lean on us.

Next, we'll talk about tax-exempt accounts or tax-free accounts, such as Roths or IRAs. So you may actually have Roths not only with IRAs, but within your employer plan, such as a 401(k) or a 403(b). I call this a Roth bucket within your workplace plan. And so you're funding these, such as a Roth, with post-tax money. There are no taxes on the qualified withdrawals from the Roth accounts. You've paid those taxes up front. And there's the potential for tax-free growth as long as you follow the rules. And the rules can change. Again, lean on us along the way.

And then finally, last but definitely not least, taxable accounts-- they're funded with post-tax money. These are your brokerage accounts. What's in the brokerage account could depend on your situation in terms of investing. You may pay capital gains tax when you sell an investment if you realize a gain, which I know we're going to get into a little bit later.

ALEX ROCA: Thank you, Nehanda. Understanding the types of accounts is a good primer for us to start talking about tax-smart investing. So Jessica, can you talk more about ways to manage your investments in a way that helps control how much you pay in taxes not only now, but also over time?

JESSICA MALOY: Yeah, absolutely. I think this is so important because there's that word, manage, that Nehanda mentioned. And this is so important. You need to know the different tools that you can use to help minimize the impact of taxes on your investments. The last thing that we want to do is save, save, save, invest, and then not pay attention to what those taxable events could do to our returns over time. So you could definitely choose to do this yourself. You self-manage your accounts. And it can take some dedicated time and research. But you can also lean on us. And often, I talk to clients about the impact, how much your returns can be reduced by taxes, if you don't understand what those implications are and what triggers those tax events.

At Fidelity, we have a tax-smart approach within our managed account offerings which we apply throughout the year. There's always that rush at year-end as we're getting our taxes together and we realize, oh my gosh, I have to file. Have I harvested any losses? Do I need to do anything? What about those contributions? We don't want to wait till the end of the year if we can avoid it. We'd rather be employing this proactively throughout the year to take advantage of several different things.

So there's a slide here that talks about Fidelity's tax-smart investing strategy. So I'll explain a few of the things that you can do and what we do for clients. So one of the things that we focus on is tax loss harvesting. And I know Nehanda is going to go into this a little bit more. But with tax loss harvesting, the goal here is that stock that you bought that you hate looking at in your portfolio because it was that one bad investment and it's still down-- one of the things that you can do is by harvesting a loss and reinvesting those proceeds into another security that you have a much more positive relationship with. You can actually use that loss against other capital gains that you may have. If you don't have capital gains, it does get carried forward. And there are quite a few rules with that. But just know, harvesting a loss isn't necessarily a bad thing. We can use that for good so you don't hate that position in your portfolio anymore.

We also look at ways to manage taxable distributions. Mutual funds by design, and when they recognize capital gains-- they have to distribute that out to shareholders. So you may have noticed in the past on your 1099s that suddenly, you have a taxable event, but you didn't sell anything. And that can be very frustrating if you don't know to expect it. So managing the right types of investments within your account that aren't going to spin off taxable events is critical.

You also want to pay attention to having the right asset in the right account. And this is something we refer to as asset location. We've always talked about asset allocation. How much do we have in stocks, bonds, cash? This has more to do with, where do I hold my stocks? Where should I have my bonds? What do I need to do to be more efficient?

/Ideally, for accounts that we have that are-- the growth is tax-deferred or tax-free, we want to make the most of those features. Higher income paying assets really should be in an account that's not being taxed today. So your traditional IRAs, 401(k) plans, assets that have much higher volatility, but we have a longer time frame and we're expecting potentially higher growth-- those really are best suited for a Roth IRA or a health savings account, where we're not impacted by those taxes today. And hopefully, if it does extremely well over time, that growth is going to be coming to us tax-free.

So just knowing which asset to place in which account is extremely important. It will help make sure that you understand your 1099 a whole lot better. Why did this happen? So we want to plan for it, have a process ahead of time rather than getting the surprise tax bill.

And don't forget, this is a lot of work and a lot of information. Lean on us. Fidelity-- our mantra is always "help more people." We are here. And we want to help. And don't be afraid to ask.

ALEX ROCA: Absolutely. With the time that we have left, we're going to work through some of the most asked questions that we get about taxes. So first question is something we've seen a lot in the chat. When does it make sense to convert from a traditional to a Roth IRA account? Jessica, this one's for you.

JESSICA MALOY: The Roth conversions-- you can find a lot of information and probably have heard quite a few things about, should I contribute to a Roth? What about converting? What does all of that mean? So a Roth conversion is, essentially, we are taking money that's in a tax-deferred account, like your traditional IRA, and we're changing it. We're converting it over to a Roth IRA. And during that process, we are going to recognize some tax liability, potentially.

Now, the goal here is, of course-- I always tell clients we're drawing the line in the sand as to what the IRS gets to receive revenue on. We pay taxes today, hoping that that continues to grow tax free and that we can take withdrawals tax-free. So we're paying taxes today, basically, to avoid paying taxes in the future at higher rates, potentially.

Now, conversions can be really appealing to those who either make too much to contribute directly to the Roth IRA. There's no income limit on conversions. And I always think about, what does the IRS want? Well, they want revenue. They want taxes today. So they don't limit you on the amount you can convert. If you want to convert all your pre-tax funds to a Roth, you absolutely can. But just keep in mind, meet with a professional. Talk to us. Understand what that potential tax liability would be and whether it is a good transition for you.

Now, with conversions, you're responsible for paying taxes on the amount you convert. That means today. So it could push you into a higher tax bracket. Understand what these things mean when it comes to tax liability. What's the five-year rule? And what are some potential penalties we could run into? The next thing I wanted to talk through here is really what's the difference between a backdoor Roth and a mega Roth conversion as well? So the backdoor Roth can make sense when you've phased out income limits that-- to be able to contribute to a Roth. So essentially, you're cut off from Roth contributions, but we still want to get some money into these tax-free growth accounts.

So what happens is anybody is eligible to contribute to a traditional IRA every single year-- doesn't matter how much you make. You can contribute. Now, whether it's deductible or not is the big question. And if you have been making contributions to your workplace plan and are not eligible to deduct that contribution, then what you ideally want to do is make an after-tax contribution to your traditional IRA and immediately turn around and put that non-tax-deferred money into your Roth IRA so it grows tax-free. Now, it's important to understand any tax implications. There are some complications when it comes to already having other IRA balances. So double-check with a tax advisor. But this type of Roth conversion is usually not taxable because you've not gotten a deduction on that contribution you put in. And as long as you convert it right away and there's no additional growth on those assets, then this is typically a non-taxable event. So it's a great way to get money into the Roth, even if you don't qualify for it today. It just takes a couple extra steps.

Now, there's no limit, again, to the money that you can convert. We pay taxes when we convert it. And the backdoor Roth gives us the opportunity to get money into a Roth IRA, even if we make too much money.

You may have heard, too, about the mega backdoor Roth. This is very similar to the backdoor Roth conversion. However, it's related to your workplace plan. So when you've maxed out your pre-tax contributions, a lot of plans do offer the ability to put money in after-tax.

Again, just like with the traditional IRA, we're not getting a deduction today. And if your plan allows you to do so, then you could potentially convert that after-tax money into a Roth portion within the 401(k). Again, it's based on-- each plan is different. I say they're like fingerprints. So it's important to check in with your benefits team and see what's available to you. And the key here is just knowing what to ask and what to look for.

ALEX ROCA: Thank you very much for that, Jessica. Nehanda, what should people who are near retirement be thinking about?

NEHANDA JULOT: Of course. And retirement-- I describe it as going down the mountain. So when we're going up, we're accumulating. We're saving. Hopefully, you're leaning on us along the way. But going down the mountain and being retired could be just as scary. It could be exciting. But there could be emotions to not receiving that regular paycheck that you're used to. You're actually withdrawing from your savings account.

So don't be a stranger to us then, either, because figuring out which account to withdraw from can be a difficult decision, very overwhelming. And we want to help you build the right strategy. So generally speaking, Fidelity suggests withdrawing no more than 4% to 5% of your savings in that first year of retirement and then increasing that dollar amount, obviously, to account for inflation and the cost of expenses going up from year to year.

When it comes to withdrawing, there are a couple of different approaches that you can take. The traditional approach is withdrawing from one account at a time in the order of taxable accounts, tax-deferred accounts, and then tax-exempt accounts, such as your Roth-- so the categories that we learned about earlier. And the objective here is to let your tax-deferred accounts and tax-free accounts get that tax-free benefit or tax deferral benefit as long as possible.

The other approach is what's called a proportional approach. And that looks like you spreading out your withdrawals and withdrawing a little bit from each different category of accounts at the same time over time. And the objective here is to have a more stable and potentially lower tax bill over-- during your retirement time frame.

All right. So this is going to take planning, as you see, planning getting up to that retirement point and even during retirement. And so what I want my retired clients-- sometimes, they're surprised when they're withdrawing accounts and they come to us after the fact. They're surprised by that amount that they get net of taxes. So these conversations are important so you're not surprised. So that's where this topic comes in and why it's truly important.

ALEX ROCA: I appreciate that. I actually want to keep-- I want to follow up with, what are RMDs?

NEHANDA JULOT: Yes, our acronyms in the financial world that we love. RMDs stand for Required Minimum Distributions. Right now, the age is 73. And as we said, these rules changed. It was earlier. But now it's age 73. You're required to withdraw a certain amount of money from your tax-deferred retirement accounts each year because you've been deferring taxes for this long. And the IRS wants to get paid. So these include traditional, simple, SEP IRAs, 401(k)s, 400(b)s, et cetera. If you're not sure which account, again, lean on us.

You basically have deadlines, of course, December 31 each year, to withdraw your RMDs. But that first year of your RMDs can be deferred and delayed until April 1 of the year after you turn 73. But if you choose to delay that year that you take the RMD, your first RMD and your second RMD will be due in the same year, which could push you into a higher tax bracket. So just keep that in mind. And again, we help clients plan for RMDs all the time.

If you happen to be working past 73-- maybe some in the room are-- you're still required to take your RMDs from your IRA. But I would look into any workplace plans you have, such as your 401(k)s and 403(b)s, because you may have the opportunity to delay taking your RMDs specifically from those employer plans. You have options, just like you do for many of these topics that we talk about here on Women Talk Money, with your RMD. You could perhaps invest it or save it if it's not something you need for your spending right now.

There are opportunities to gift your RMDs for those of us who are especially charitably inclined. There are what's called qualified charitable distributions, where if you give those RMDs to a qualified charity, you do not have to pay taxes on that RMD coming out-- so many rules and nuances tied to this. So please lean on us, of course. Another important thing to note is even if you inherit an IRA, there are IRS rules that relates to RMDs that may still apply.

ALEX ROCA: Nehanda, thank you for that. Thank you, Jessica, Nehanda. This was fantastic. Thank you so much for chatting with me and for all the great information that you've shared with our community today. I know that we covered a lot. To all of you watching, thank you for joining. And we'll see you again next month. Have a great day.