Press Publications recently interviewed Shoreview resident Daniel McDonald about his book, “From Savvy Saver to Smart Spender: How to Pick a Tax-Wise Retirement Withdrawal Strategy.” Specifically, the book focuses on how to develop a plan for withdrawing money from 401(k), IRA, and other retirement accounts with taxes in mind.
A book signing event will be held from 3 to 5 p.m. Saturday, Sept.17, in the party room at Churchill St. restaurant, 4606 Churchill St. in Shoreview.
Q:Tell us a little about yourself.
A: I am in my early 60s and figuring out how to make the transition from working full time to working less. As part of that transition (and the increase in remote work), my wife, Kim, and I split our time between Shoreview and Naples, Florida. I graduated from Irondale High School and the University of Minnesota with engineering and law degrees. I have practiced intellectual property law for over 35 years. We have five kids who all went to Mounds View High School. I am interested in personal finance and am a certified Dave Ramsey financial coach.
Q:Is “From Savvy Saver to Smart Spender: How to Pick a Tax-Wise Retirement Withdrawal Strategy.” the first book you’ve written?
A: It’s the first real book. As an attorney, I write a lot. Some of my legal “briefs” were probably too long, but I wouldn’t call them books. I also wrote a comic book when I was about 10 years old. That one remains unpublished.
Q:What inspired you to write this book?
A: In preparing for the transition from working full time to working less, I found plenty of information on how working people could save for retirement. But there was not much out there that helped people making the transition from saving for retirement to using the money they saved in retirement. The tax implications in particular were not well covered. I’ve always enjoyed working with numbers, so I did some research and created my own tool for analyzing various approaches to withdrawing money from accounts in retirement. What I found showed a better way than “conventional wisdom.” I thought it would be useful for others too.
Q:Provide a brief overview of the book.
A: The book shows how people can lower their income taxes in retirement by planning a strategy for withdrawing from available accounts. “Conventional wisdom” says to leave money in tax-deferred accounts like 401(k) accounts and IRAs as long as possible. Studies show that about 80% of retirees follow this “conventional wisdom.” My book shows that, while that approach may save taxes in the short term, it can wind up costing far more in taxes over the course of retirement. The book shows how to design your own plan to withdraw from both tax-deferred and other accounts before age 72 to avoid overpaying taxes.
Q:What do you hope readers will gain from “From Savvy Saver to Smart Spender: How to Pick a Tax-Wise Retirement Withdrawal Strategy?”
A: Readers in their 50s and 60s have the most to gain from the book right now because they can learn how to take steps immediately to manage their taxes. Many people will have a few years before age 72, when they will be in lower tax brackets. Those people can potentially use those lower brackets to save thousands of dollars in taxes, or more, in the years after 72.
Even people who are farther away from retirement will benefit from the book by learning about how income taxes work very differently in retirement than they do while working full time. For example, people may assume Social Security benefits aren’t taxable. But, in fact, Social Security can be taxed in retirement. Knowing some basic rules about taxes in retirement will empower people of all ages to better plan their finances. This is true whether they plan their own finances or use a financial advisor.
Q:Who are your favorite authors?
A: John Grisham for law thrillers. Dave Ramsey for common-sense financial advice. David McCullough and Erik Larson for U.S. and World War II history. Scott Adams, the creator of Dilbert, for career advice.
Q: Where can Press readers find the book?
A: The book is available online (paperback or eBook) at Amazon.com. Just search for “From Savvy Saver.” Links to purchase sites are also available at my website, www.RetirementTaxSaver.com, where I offer my calculator for helping plan a tax-wise withdrawal strategy. I’ll have a few extra copies at my book party on Sept. 17, too.
Q:Do you have any plans for future works?
A: Tax brackets and rules change every year. I might be making this a yearly thing just to keep up with the changes. My focus will stay on this book for a while. Now that I know how the publishing process works, however, I might look for other topics in the future.
Q: Anything else you would like to add?
A: I’d like to give a shout-out to my writing teachers at Irondale, including Mr. Schwandt (College English) and Mr. Kelley (Creative Writing and the Irondale Eye newspaper). It wasn’t always easy, but I learned a lot about how to write, and enjoy it, from them.
Shoreview Press Editor Noelle Olson can be reached at email@example.com or 651-407-1229.