The Retirement Planning Mistakes That Could Cost You Thousands in Taxes with Alina Osokhovska – Ep 103

Without a comprehensive financial plan that accounts for taxes, income strategies, and long-term goals, it’s easy to overlook opportunities that could significantly impact your financial future. The reality is that even strong investment returns can be undermined by inefficient planning, leading to unnecessary taxes, missed opportunities, and less control in retirement.

In this episode, Derek Gregoire is joined by Alina Osokhovska, Certified Financial Planner™, to explore the true role of financial planning and why it goes far beyond portfolio management. With deep expertise in tax strategies and long-term planning, Alina shares how thoughtful, proactive planning can help clients align their investments with their goals while navigating an ever-changing financial landscape.

Together, they break down the different types of tax-advantaged accounts, including pre-tax, Roth, and after-tax strategies, and explain how each can play a role in building a more efficient retirement plan.

They also discuss the importance of tax diversification, how accounts like 401(k)s, IRAs, 529 plans, and HSAs fit into a broader strategy, and why ongoing planning is essential to adapt to changes in tax laws and personal circumstances.

In this podcast interview, you’ll learn:

• Why financial planning goes far beyond investments and serves as the foundation for reaching your long-term goals.
• How pre-tax, Roth, and after-tax accounts differ and how each impacts your taxes in retirement.
• Why tax diversification is critical to maintaining flexibility and minimizing unnecessary taxes over time.
• How inefficient tax planning can reduce your retirement income just as much as market losses.
• The role of accounts like 401(k)s, 529 plans, and HSAs within a comprehensive financial strategy.
• Why financial planning is an ongoing process that must adapt to changes in tax laws, income, and personal goals.

Inspiring Quotes

• “A financial plan is a blueprint for your dreams.” – Alina Osokhovska

• “If you don’t know your values, your aspirations, and your priorities, it’s difficult to identify your goals.” – Alina Osokhovska

• “When we plan, investments are basically just one part of the plan that helps you to reach your goals. The financial plan helps you identify those goals and quantify them because you need to have a number behind those goals so you know how long will take you to reach that goal and what investments you need to have in order to reach that goal.” – Alina Osokhovska

Interview Resources

• Trump Accounts
• Coverdell
• DoorDash

[INTERVIEW]

Derek Gregoire: Hey, everyone. It’s Derek Gregoire, one of the partners here at SHP Financial, and welcome to another edition of the SHP Retirement Roadmap Podcast. Super excited about this particular one because I think if you look at what I said, probably for the last two decades since we started here at SHP, everything the normal average saver who’s listening, watching, who probably, if you’re not a client of SHP, thinks of retirement planning as, well, they manage stocks and bonds and do some rebalancing, and they get good returns for their clients, and that’s why their clients are happy. And that’s the end of the story. When in reality, that’s just the start. Having a good balanced plan when it comes to investments is huge.

And we have a ton of resources here at SHP with CFAs and analysts, and my partner, Matt, kind of runs the show over there that handle that area. But if you’re not looking at the financial planning side, like the goal planning and all the things that go into that, you’re missing probably 85% or 80% of your planning. So, with that said, we have one of our head certified financial planners, and she dominates planning, Alina Osokhovska.

Alina Osokhovska: You nailed it.

Derek Gregoire: Oh, yes. Whew!

Alina Osokhovska: Yay.

Derek Gregoire: I’ve been working for a few years on that, so I’m going to try to do it off the cuff. In fairness, I have a little cheat sheet on this, on how to say it, but welcome to the show again.

Alina Osokhovska: Thank you, Derek. Hi, everyone.

Derek Gregoire: And we are, yeah, so I think, like, it’s amazing when we have a client or someone new joining the firm and when your team runs the reports for them, I think that’s when the, “Oh my gosh,” like the light bulb goes off like, “I thought you guys just put money in stocks and bonds and that was it. But I didn’t realize how much level of detail there is out there when it comes to a financial plan.” And then within a financial plan, today, we’re going to be specific around like tax-advantaged accounts, how to allocate to them, what to choose based on your situation. But I’ll start there because you know more than anyone probably in this office, and then that’s listening, the importance of financial planning beyond the stocks and bonds, right?

Alina Osokhovska: Yes, absolutely. And I just want to say that everything starts with a financial plan. Financial plan is a blueprint for your dreams. That’s why I like planning, because if you don’t know your values, you don’t know your aspirations, and your priorities, it’s difficult to identify your goals, what do you want to reach. Without having a destination, where are you going to go, right? So, when we plan, investments are basically just one part of the plan that helps you to reach your goals. The financial plan helps you identify those goals and quantify them because you need to have a number behind those goals so you know how long will take you to reach that goal and what investments you need to have in order to reach that goal.

Derek Gregoire: So, if you look at like the different world of accounts, right, as everyone’s heard, we’re going to dig into some of these pre-tax, tax-free, after-tax, Roth, 529, IRA, 457, 401(k), 529, all these like letters and numbers. And so, I think trying to simplify it as best we can, I think a lot of folks out there, a lot of times, we’ll talk about the idea of Roth conversion, which is a really good tax strategy if used appropriately for certain folks. And a lot of times their question is, “Well, if I have a Roth, can I still invest in the same stuff?” It’s almost like it’s a whole new world for them. So, obviously, the Roth or the IRA or whatever it’s in, it’s just a shell of what owns those funds. Basically, you can still own Apple and this fund, and that fund inside of any Roth, any pre-tax account, any account, but the way it’s taxed is almost just as important as how it’s managed.

Alina Osokhovska: Absolutely. And I think that the most popular tax advantage accounts are retirement accounts. And there are plenty of them, employee-sponsored retirement accounts such as 401(k), 403(b), 457(b). We also have self-employed accounts, retirement accounts, SAP, simple, solo 401(k), and also we have individual retirement accounts, also known as IRAs. Of course, they work as a bubble. I like to think of it as a bubble. What is inside stays inside, meaning that if you invest in mutual funds, you get dividends, payouts, you get capital gain, fund distributions, and you have to pay taxes on those distributions, interest, and dividends, every single year.

However, if you put those investments into a retirement account, now you don’t. Now, everything is tax-deferred until the moment you need to take money out from that IRA. So, once it’s inside the bubble, it stays inside the bubble. Once it’s out of the bubble, then of course you need to pay taxes. But because that bubble gives you extra tax protection, your assets can grow faster.

Derek Gregoire: True. Well, depending on what bubble it is, if it’s the bubble’s pre-tax, like an IRA, 401(k), then you’re right, you get the buildup, and then you get to pay taxes at the end. But if it’s a Roth, then you don’t have to pay taxes.

Alina Osokhovska: Exactly.

Derek Gregoire: But you don’t get the tax savings going in. There’s always a…

Alina Osokhovska: Exactly. It’s a trade-off, right? And it’s an excellent point because then we can get to the point like how to choose the right account for you. The retirement accounts, there are two different types: pretax and Roth, or, actually, I would say three types: pretax, after-tax, and Roth.

Derek Gregoire: Most people, where do you think that we see have the bulk of their money?

Alina Osokhovska: I think pretax, because they’re most popular accounts and people don’t really know that much about Roth until they reach their retirement age, and now we’re doing Roth conversions, and they discovered this amazing tax advantage vehicle that can grow their investments tax-free, which is amazing.

Derek Gregoire: Well, just to set the stage even a little bit more, I always talk about everyone’s worried about diversification and losing money in retirement. Well, let’s say you’re doing some, the way you’re taking money out, let’s say it puts you into a new tax bracket, and let’s look at just federally, let’s say you go from 12 to 32, right? Let’s just say you have a huge jump because you didn’t plan properly. Well, that’s like almost taking like a 20% loss in a weird way every year. So, everyone’s worried about the volatility in the market. If you’re paying 20% extra in taxes, and that’s obviously just a random example, but if you’re paying anything extra in taxes that you could avoid with a proper plan, then those extra taxes you’re paying are literally continuing year after year, which is the same thing as losing money.

Because if you need 50,000, well, let’s say you did good planning and maybe you only had to pull out 65,000 out of your account to keep 50 after taxes, right? Pretty efficient. Not too bad. Let’s say you didn’t do great planning, and you’re not really prepared for it, you may have to take out 80,000 to still keep the same 50, based on other investments in income, so forth. So, that could be a difference of $20,000 in taxes each year, which is the equivalent of like losing money in that sense. So, everyone talks about diversification when it comes to portfolio, but I think as you go down the list of these areas, we have to look at like the diversification of the tax status of your accounts in retirement is just as crucial.

Alina Osokhovska: Absolutely. I cannot agree even more, but.

Derek Gregoire: So, where do you want to start? You want to start with like just maybe the different basic two retirement-type accounts?

Alina Osokhovska: Yeah.

Derek Gregoire: Yeah. So, basically, one is a tax deduction. The other one’s not a tax deduction, but better regrowth. So, maybe go unpack those.

Alina Osokhovska: Yeah, let’s do that. So, we have traditional, that traditional pre-tax, and we have Roth accounts. So, pretax account, which one to choose? It depends on your current tax bracket. It depends on the tax bracket in retirement. If your current tax bracket is relatively low, we’d say from 10 to I would say up to 22%, it might make sense to use a Roth account because you won’t have as much savings on those dollars that go into the account as you would if you were in the 32% to 37% tax bracket. Basically, if you put money into an employer-sponsored account, the limits are higher. So, if you are saving, if you let’s say in 22% tax bracket, 22 cents on a dollar, right? But if you contribute to a Roth IRA or Roth employer-sponsored account, then that money, you don’t get the upfront deduction, but that growth will be tax-free.

Derek Gregoire: Yeah, huge.

Alina Osokhovska: So, by not saving that 12 or 22 cents on a dollar, you are actually going to accelerate your savings even more over time. And usually, this strategy is very good for young people who just start in the workforce, so their salaries are not at their peak. And with them starting early, it just gives them such an advantage over time. Because of the growth and compounding interests, it’s amazing. But if you are in the higher tax brackets, it makes more sense to lower your current income to bring it down, because if you’re paying 32, 37 cents on a dollar, that’s actually, it’s a huge, right?

Derek Gregoire: That’s a lot of money.

Alina Osokhovska: It’s a lot of money. So, if you lower your current income, you can use that money that you would pay for tax liability to fund other goals of yours.

Derek Gregoire: Yeah. I’d say the one caveat to that, not to play the other side, but if you have, like, let’s say you have a certain area where a client is in that 37% bracket and they’re never going to come down from there. So, if you know they’re going to go to like 2022 or so in retirement, then taking the tax savings now makes sense, right? Because they can save 37 cents on the dollar.

Alina Osokhovska: Right. It depends also on the unique situation, right? What is in the current tier? Like, for example, right now we have some tax deductions that you can get depending on your income, like on your taxable income. So, if we can bring that taxable income to that specific level to get the deduction, additional deduction, it makes sense maybe to contribute two after-tax and two pre-tax. So, like, do both to get the best of both worlds. Sometimes it just makes sense, you know what, you already have pre-tax accounts, let’s just do Roth.

Derek Gregoire: Exactly.

Alina Osokhovska: To build that account, to have like diversification to what you said, because then on the pre-tax accounts, you will be subject to RMDs, required minimum distributions, with Roth IRAs or retirement accounts. There are no RMDs, right?

Derek Gregoire: Yes. So, think of like I had a client that one time he was like looking at a situation he was in like the 37% bracket, but then when he retired, his pension was going to be, just his pension alone was going to be like 40,000 a month, which obviously, that’s not normal. That’s a very unique situation, but he was a high-end executive, so there was never going to be a time in his life where he wasn’t going to be in this high tax bracket. So, it didn’t matter when we did the Roth conversion. This is actually several years ago. So, we actually did a huge Roth conversion all in one year because, at that point, it didn’t matter. There was no Mass. millionaires tax at the time. So, we didn’t have to worry about that.

Alina Osokhovska: Right.

Derek Gregoire: And federally, he said, if I can convert all this at 37%, we did it during a down point in the market. It was either during COVID or during 2022. So, then he converted all that to Roth, and guess where the recovery happened tax-free.

Alina Osokhovska: Perfect.

Derek Gregoire: So, anyways, there’s like, obviously, we’re going down a rabbit hole, but there are so many different ways to do, to handle this, but that’s why it’s so important from a holistic financial plan, what is your situation because we could look at 10 different people and each different family, or a person’s going to have a different situation.

Alina Osokhovska: Exactly. Because there are so many factors that we need to look at. So, working with a financial planner is important because it’s like every single year, something new, right? And you need to keep up with all the new legislations, all the new tax laws, and changes. And it takes time to plan in advance. You cannot just make a plan in a day, right? Because when you reach a certain age, there is no going back. So, like, let’s say if you’re still in your sixties, fifties, that’s excellent because we have so many years to plan. Rather than if you’re in your eighties or nineties, of course, there is still room for planning, but…

Derek Gregoire: It’s not going to be as…

Alina Osokhovska: You have some limitations now.

Derek Gregoire: Exactly. Yeah. If you look at, like, the cool thing about planning is you can see a lot of times if you look at a scenario, a client comes in, they’re working with us, they have over a certain amount of assets, real planning is needed. So, every year, Alina and her team will do like a draft of here’s the opportunities this year that we can take advantage of. And it might be different than last year because the world changes, Congress changes, tax laws change, right? Their situation change. Their needs change. So, it’s like work. It’s balancing the unique situation of that particular person. Like, if they’re going to need a bunch of money to buy a house one year, maybe we are doing less on the conversions, whatever it is.

There are so many scenarios that come into play, but I think the whole concept here is like the idea that you need a plan. It’s almost like having a CFO on your portfolio, right? Even if you’re good at picking a couple of stocks and bonds, that’s like, “Oh, I can do it myself.” Well, that’s like doing one piece of it yourself. That’s like having a whole, well, the snow we got the last couple months, it’s like, that’s like saying, “Well, I can shovel my doorstep.” Well, who’s going to take care of the yard, the driveway, the cars, like that? So, having a portfolio is like one little piece. Having a plan is a completely different concept.

So, one of the things, you know, looking at the scenarios of like those pre-tax accounts, just to summarize, those are like your IRAs, 401(k)s, you get the tax deductions along the way, which is great, but you’ve never paid taxes on that money. So, at some point, it’s either coming out, when you take it out, you’re paying taxes at your highest bracket, or if you wait until 73 or 75, you’re forced to take money out, and we don’t know if it could drive you into a higher tax bracket, could add higher Medicare premiums. We’re going down other rabbit holes, but that’s one account. On the opposite side, the second one is tax-free. So, if we have pre-tax, the opposite is tax-free, that’s obviously all the Roth we talked about, and a couple of the scenarios there.

Then the final piece is after tax, which is kind of like it’s a blend in the middle somewhere. It’s like the money you put in is not taxed, but the growth, dividends, and interest are taxed, right? But I think with our clients, we try to create as much like diversification in those three buckets if we can, obviously, more to Roth if possible, but a lot of clients came to us years ago with like 3 million in IRA. And now with all the growth and so forth, here they are years later with like a million and a half in a Roth, maybe a million in IRA, and a million after tax or whatever this, but now we have different diversification. So, when clients need money, if all you have is an IRA pre-tax account, you have no other choice but to pull from that bucket.

Alina Osokhovska: Exactly.

Derek Gregoire: If you have other accounts, you can say, “Oh, maybe I’ll take a little bit from this one, but I don’t want to go over this bracket,” so the rest will come from a different bucket, if that makes sense.

Alina Osokhovska: Absolutely. So, if you can manage your tax brackets so you can predict, this is how much you’ll get in pensions such as security or other sources of income, this is what I expect my tax bracket to be, and if I need additional income, then we look at your account, and it’s like, “You know what, you’re better off take money from your Roth. Because you’ll be saving so much money. But if you take from your pre-tax account, it’s just going to bump you into higher tax bracket, or we’ll increase your Medicare premiums.”

Derek Gregoire: So, I think if you only had, though, with a lot of people listening, and a lot of folks when they first come to us, all they have is pre-tax accounts. So, it’s all you have. There’s no planning because you don’t have any other places to pull from. If you need it, you have to pull from there, which has sometimes a ripple effect on other issues around, like you said, tax brackets, Medicare premiums, list goes on. So, what are some other, like, in terms of like tax advantage accounts? We talked a lot about work retirement accounts, 401(k). By the way, if you have a 401(k), a lot of plan sponsors now offer Roth 401(k). And everyone thinks, “Well, I make too much,” but there’s no limit on that.

Alina Osokhovska: No. So, if it’s an employer-sponsored 401(k), and it’s Roth option, there are no income limits, which is great for high-income earners because for Roth IRAs, there is a limit, right? So, you might not qualify to make it direct Roth IRA contribution. But if you have an employer-sponsored 401(k), 403(b), you can actually put aside a big chunk of Roth money. I also want to say that with employee-sponsored accounts, I would say most of the plans offer employee contribution, employ a match, and you might seen it like 3%. Some can be very generous, 5%, even more. So, what it means if you do not participate in that plan, you leave money on the table. It’s your money. It’s free money. So, it encourages you to participate and put money aside for your retirement. And then you get a bonus, technically, from your employer.

Derek Gregoire: It’s free money. You put in X, you get Y.

Alina Osokhovska: Exactly. But people are used for immediate gratification, so you trying to save today, “I want to buy something right now,” so you delay savings, but tomorrow you will regret it.

Derek Gregoire: Oh, yeah. Tomorrow comes fast.

Alina Osokhovska: Exactly. Tomorrow’s already here, right?

Derek Gregoire: Exactly. Good point. So, let’s look at what are other accounts that have like different tax natures, maybe not retirement accounts, but other savings vehicles that people can look at?

Alina Osokhovska: Absolutely. So, we covered the retirement accounts, but education costs, it’s been skyrocketing, right? And saving for college or a private school or higher education is important. I have a 2-year-old that, literally, maybe a week after he was born, we set up a 529 account for him because you never know, and I hope he goes to college, but it’s better to start now. So, a lot of people do have education goals. They do want to fund their kids’ education, or at least help a little bit down the road. Or they also want to fund their education on grandkids.

Derek Gregoire: Yep.

Alina Osokhovska: There are two tax advantage accounts, and one is more popular, and I’ll explain why. So, the most popular one is a 529 plan. Probably a lot of people heard of it. So, it’s a tax-advantaged account that allows parents and custodians to contribute money every year. Each state administers its 529 plan account, and some states even offer deduction for contributions. For example, in Massachusetts, you can get up to $2,000 in deduction for married couples filing jointly, which is not bad.

Derek Gregoire: It’s better than nothing.

Alina Osokhovska: It’s better than nothing.

Derek Gregoire: Massachusetts doesn’t always have the best tax benefits. So, we’ll take everything we can get.

Alina Osokhovska: So, we take everything we can. Yeah. So, the money in that account, you have choices, and you don’t have, it’s not like open architecture accounts, meaning that you have specific funds that you can choose from, and it depends on your risk tolerance, and time horizon. So, if you have someone like my son, he’s a 2-year-old, so he has many years.

Derek Gregoire: He’ll be aggressive, right?

Alina Osokhovska: Yes, exactly. So, I want to be as aggressive as possible because he has so many years ahead of him to recover when we have some market downturn.

Derek Gregoire: When he is like 13, 14, you pull in back the risk a little.

Alina Osokhovska: Kind of little bit you can lower the risk, or depending, like if I do use money for his private school. So, then I take a look at the investment allocation and maybe like shift some aggressiveness to more like fixed income. But then you have investment choices, right? And that money grows tax-deferred. If you use money for education expenses, room and board, you can actually fund K-12 tuition up to $10,000 a year and unlimited high education cost. It’s tax-free.

Derek Gregoire: Yeah. Perfect.

Alina Osokhovska: So, it’s great. Also, people can say, “You know what, I’m not sure if my kid goes to school. What do you do?” You can actually transfer that account to another child if, like, if you have many kids you can use one account to fund that goal. And then if your kid doesn’t go to school, it can transfer to another one that might go to school or to another family member.

Derek Gregoire: Yeah. So, let’s say at the end of the day, like, let’s say you’ve paid everything. You’ve paid through school. Maybe one didn’t. One went and one didn’t go. Or let’s say if your older didn’t want to go and your younger one went, you transfer it over, and there’s money left. That’s 50,000 left over at the end. What are the options at that point for unused?

Alina Osokhovska: Yep. Actually, it’s a good question because the recent legislature allows you to convert money to Roth IRA. And that’s a great option. It’s a great option, but there are some limits. I’m not going to bore you with all the details, but it’s capped to the Roth IRA contribution each year, which grows with inflation. So, it gets higher each year, but you can do, I believe it’s up to $35,000 lifetime.

Derek Gregoire: Yeah. So, it’s a way to get money from, no, I’m ahead of myself, from 529 to Roth, might not be able to get all of it down. That’s assuming no one uses it. And like Alina said, you can transfer between family members, you can transfer siblings. So, if at the end there’s money left over, you can put some into a Roth. And then if there’s money left over after all that, then you have to pay…

Alina Osokhovska: A penalty.

Derek Gregoire: Yeah. Penalty.

Alina Osokhovska: But penalty on the growth, right? So, the capital that you invested, you don’t pay penalty on it. And because you didn’t pay taxes, you don’t pay taxes on it either. So, just the growth of that account.

Derek Gregoire: Got it. One of the last area, too, is like we’ve seen this become, and this is something I use as well, but for HSAs, right, health savings account, that’s another great tax, probably one of the better tax accounts there is. I know we’ve talked a lot about this in the podcast previously, but just a brief overview on HSAs.

Alina Osokhovska: It actually combines the best of two worlds. I love that account, and I think that it’s underused. With our complex healthcare system and very high deductibles and healthcare insurance cost, a lot of people actually qualify to have a HSA account, health savings account. And if they do, they can make tax-deductible contributions, and they don’t have an income limit, which is amazing. If you have a family plan, you can put more money in that account than it does have, depending on what account you have, what custodian sponsors it. Usually, it has an open architecture, right? So, if you can invest in Apple stock, like whatever you choose.

Derek Gregoire: Whatever you want.

Alina Osokhovska: Exactly. Then it grows tax-deferred, but you can use it tax-free to pay for your healthcare expenses.

Derek Gregoire: That’s crazy.

Alina Osokhovska: And one trick, which is great, you can use, for example, you can pay for your healthcare expenses from your cash flow, right?

Derek Gregoire: Yep.

Alina Osokhovska: But just keep receipts because you can reimburse yourself down the road. And it doesn’t have a time limit.

Derek Gregoire: So, you can just keep track, track, track, and all of a sudden pay like 40,000.

Alina Osokhovska: Exactly. So, let’s say in your retirement years, you have like income gap of $40,000, and you kept all those receipts, right, that you paid out of pocket, and you do have an HSA account. Well, now you can use it to reimburse yourself.

Derek Gregoire: What’s funny is my wife’s always like, “How come we have this ATM?” They give you an ATM card, whatever, like a card you can use. “How come we never use it?” I’m like, “Because we get tax deduction going in. It grows tax-deferred, comes out tax-free.” I was like, “I just keep building it up. At some point, we’ll need it down the road, but why not keep building it up? I wish you could put more into that because it’s not accounts that offer all those features like the HSA, but it’s a great, again, these are all different areas of taking advantage of what’s available.” And there’s a couple of other accounts. I know there’s like a new Trump account, there’s a Coverdell, there’s a few, there’s a lot of these other areas.

We don’t have to get too specific, but I think the whole idea of this. If you look at I always say we always want to educate folks as much as we can. And when people think of like, “Oh, I’m a do-it-yourselfer.” When we hear that, that’s someone who kind of does everything on their own. They manage their portfolio and so forth. And it’s amazing how many “do-it-yourselfers” have become clients of ours over the last 22 years since we started the firm because two reasons. One, if the husband or the wife or whatever spouse, let’s say, they do a lot of the planning and they take care of the day-to-day, well, if something happens to them, their spouse now is responsible. I’m like, “Can your spouse do everything you do?” They’re like, “That’s a good point.”

So, they want to make sure that they have protection. They have a company that can take over right away. But number two, I always challenge, I think it’d be almost impossible for someone. And like I said, we’ve been doing this, we started the company 20-something years ago. So, this isn’t like a plea to come to SHP, but it’s more of like I challenge folks to say, alright, to look at what we do here at SHP, I couldn’t imagine doing it on your own because I couldn’t do it. And I’ve started the company 23 years ago, whatever it was, and I don’t have to be dangerous in all these areas. So, I’m managing the team, but we have client relationships we manage in that umbrella of client relationships that we’re managing their goals and day to day, what they’re looking to achieve, and how they’re going to get there.

But behind the scenes, it’s like this amazing portfolio team with doing so much analysis, research. That’s all they do 24 hours a day. Then we have you and your team doing all the stuff on the planning side. Alina will come into meetings and talk about stuff I’ve never even heard of. Like, we’re going to do this SALT deduction and this conversion, and then it’s going to put you in this bracket. But I’m like, “Oh my goodness.” So, the idea is there’s so much on that side. And then do you think you have it down? And guess what? The laws change. They change the rules. It’s like playing a game and changing the rules every year. So, you do a great job, obviously, of staying up on that, but share that.

You gave a good analogy before it went on air, and I think it’s a good one to share because I know sometimes these areas can be complicated. We get down in the weeds of all these acronyms and numbers and letters. So, maybe share some of the analogy you shared earlier.

Alina Osokhovska: Yes. So, I have this great analogy, and I think it is so relevant to the investment world and to the financial planning. So, for example, Derek, you need to buy milk, right? And you need to get to a grocery store, which is 20 miles away. What vehicle are you going to choose? You going to walk there, you going to take a bike, or are you going to drive there?

Derek Gregoire: Well, I’m probably not. In my condition now, probably not running. I know that. So, it’s either walk, it’s probably biking, or it’s probably driving is what’s going to happen. But this, yeah, is DoorDash an option? That’s a good point.

Alina Osokhovska: It’s a Roth, right? [indiscernible 28:49] So, the same analogy applies to tax advantage accounts, right? Because you can reach your goal. If you walk there, of course, you can reach the same goal, but you’re going to be so tired, right? You’ll be like, “I’m tired.”

Derek Gregoire: It’ll take a long time.

Alina Osokhovska: Exactly. But you can drive there, and you can reach that goal faster and more efficiently. So, I think just knowing, having the knowledge, or working with a financial planner who can actually guide you every step of the way and do the tax diversification along with the investment diversification for you, it is going to be more efficient, and it’s going to save you money. You can redirect that money. So, now you saved yourself some energy, right? So, now you can actually go for a run and enjoy it, right? Instead of just, yeah.

Derek Gregoire: There we go. Well, I think the other thing too is sometimes folks are so, like, they don’t like paying a fee, right? But if you’re paying 1% or less, our average fee here is less than 1% a year for the value you’re getting in terms of, like they say, I read a study, a good plan adds like 3% in value. So, it’s not only the value of getting, it’s also you don’t have to do it. You can enjoy your retirement and have a firm, like some of our clients have worked with us for decades. They trust us, and they leave it to us on that side of it. So, they can go on their trips and not have like do-it-yourselfers. If they have to research all the stuff we research as a team, they can’t go to the beach and take vacations because they have to be in front of a computer.

Alina Osokhovska: Exactly.

Derek Gregoire: Which like we do every day,

Alina Osokhovska: But like working with us. They can actually go to the beach and take vacation, right, because now they save exactly, they have saved enough money, and the returns are great. Or in the down market, we also look for opportunities, right? And tax-advantage accounts like Roth conversions or even like buying low in HSA accounts or pre-tax accounts is a great opportunity for that growth to be tax deferred. So, I think it does make a lot of financial sense to have a financial plan.

Derek Gregoire: Well, it’s just someone who knows the situation, because last thing I’ll stop before we wrap up is like I always had a joke. Someone asked me years ago, “Do you guys still get charge your fee when the market’s down?” And I was like, “Honestly, it should be double.”

Alina Osokhovska: Yeah.

Derek Gregoire: And then we started laughing because I’m like, “The amount of work that we do in downturns is unbelievable,” because like you said, you do Roth conversions. Guess what? The recovery happens tax-free. There’s tax loss harvesting. There’s all kinds, there’s repositioning assets to get a little bit more growth. You know, you sell high, buy low. So, there’s so much work that can be done during a downturn. That’s when the real planning, like so many moves we made, and obviously, we’re feeling a little volatility right now, and it could change by the time this podcast airs, right? But if you look at during 2020 and 2022, those are two very volatile years.

And the planning that we did with our clients, the fruit that it’s reaped years later has been amazing in terms of different strategies we made during the downturn to take advantage of things to then propel them to their goals even faster. And so, I love the financial planning idea. Obviously, it’s what we do. So, I guess it makes sense. But thank you, Alina, so much. That was awesome. Obviously, for those if you need more information, you know where to find us. SHPFinancial.com. There’s plenty of info on our website. But we’ll be back soon, and thanks again for listening. Have a great day.

Alina Osokhovska: Thank you so much. Bye.

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