Cam Marzi

Educational insights to maximize your money • I help people navigate inheritances & sudden wealth • Owner @ Rogue Advisors • Tweets ‡ advice

[Cam Marzi @Invested_In_You]

This is not to say that one investment is better than the other. But people would benefit from looking at the stock market for what it is - a collection of REAL assets, not a place to speculate. Just like real estate..

[Cam Marzi @Invested_In_You]

You hear this all the time:

"I bought this home in the 80s for $100,000 and now it's worth $1,000,000"

But you never hear this:

"I bought the S&P in the 80s for $98 per share and now it's worth $7,700 per share"

Why is that?!?

[Cam Marzi @Invested_In_You]

If you put $1,000 in a pre-tax 401(k) at the 35% tax bracket you'll save $350 on taxes

Some people don't bother because they don't want to be forced to pay taxes in the future.

And they're right, required minimum distributions are very real.

BUT, if you withdraw that money at a lower tax bracket, say 10%, you'll save the difference (35%-10%).

In this case, $250 or 25% of your dollar.

A completely free 25% return on top of your investment returns.

That's called smart tax planning.

[Cam Marzi @Invested_In_You]

New clients came in two years ago.

Physician couple. Combined W2 income $680,000.

They'd just closed on a $2.1M commercial property. Had heard about cost segregation and REPS from a podcast. Wanted to do both.

Their CPA had never set either up. They came to us.

Here's what year one looked like.

We verified REPS for the wife. She had left her clinical role the prior year and was managing their real estate full time. 800+ hours documented. More than 50% of her working time. Qualified.

Cost segregation study on the $2.1M property identified $420,000 in personal property components - flooring, specialized electrical, fixtures, land improvements - reclassifiable from 39-year straight line into 5, 7, and 15-year property.

With 100% bonus depreciation under the OBBBA those $420,000 in components were fully deducted in year one.

Plus the remaining building depreciation of roughly $38,000 on the 39-year schedule.

Total year one depreciation: $458,000.

With REPS those losses were non-passive. They flowed directly against $680,000 in W2 income.

At their effective marginal rate of 37% federal plus 13.3% California - that $458,000 deduction was worth roughly $230,000 in tax savings. Year one.

They were thrilled.

Then they called me 18 months later.

A developer made them an offer they couldn't refuse. $2.9M. They wanted to sell.

I told them to sit down before I walked them through the exit math.

Here's how depreciation recapture actually works - and where most people get blindsided.

There are two layers.

Layer one: the $420,000 in cost segregation components - the personal property reclassified as Section 1245 assets. Every dollar of that comes back at ordinary income rates. Not 25%. Not long-term capital gains. Full ordinary income. At 37% federal plus 13.3% California that's a 50.3% combined rate on $420,000 in recapture.

That's $211,000 in tax on the cost seg components alone.

Layer two: the straight-line building depreciation taken over the hold period. Roughly $76,000 over two years. That comes back as unrecaptured Section 1250 gain - capped at 25% federal. Another $19,000.

Plus long-term capital gains on the $800,000 of appreciation above original purchase price. At 23.8% federal plus 13.3% California - another $296,000.

Total tax bill on the exit: roughly $526,000.

Now here's the question everyone asks.

Was it worth it?

Year one tax savings: $230,000.

That money was invested immediately into a diversified portfolio. Over 18 months it grew to roughly $248,000.

Exit tax bill attributable to the cost seg strategy: $211,000 in Section 1245 recapture plus the $19,000 in 1250 recapture. $230,000 total.

Net benefit after accounting for investment returns on the saved taxes: roughly $18,000 ahead.

Not the million dollar windfall the podcast made it sound like.

But here's the real lesson.

They sold after 18 months. The math on a 3-year hold looks meaningfully better - more time for the invested tax savings to compound, and more planning options at exit including a 1031 exchange that would have deferred the entire recapture bill indefinitely.

The 1031 conversation should have happened before they accepted the offer.

By the time they called me it was too late to set one up.

Cost segregation and REPS is a genuinely powerful combination.

But it's a long game strategy dressed up as a short game win.

Run the full exit before you touch the entry.

[Cam Marzi @InvestedInYou_]

Small house + big brokerage account

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Big house + small brokerage account

[Cam Marzi @Invested_In_You]

There's a tax trap built into the US tax code that quietly devastates widows and widowers.

Most married couples have no idea it exists.

It's called the widow's tax. Here's exactly how it works:

[Cam Marzi @Invested_In_You]

Everyone asks Roth or traditional.

It's the wrong question.

The right question: will your tax rate be higher now or in retirement?

Higher now - traditional. Deduct it today, pay less later.

Higher in retirement - Roth. Pay now, never pay again.

Here's where most people get it wrong.

They assume retirement means lower income. For high earners with large 401k balances it often doesn't. RMDs, Social Security, and pension income stack. Some people pay more in retirement than they did working.

A few situations where Roth almost always wins:

- you're early in your career in the 22% bracket or below
- you expect a big income jump in the next few years
- you have 20+ years until retirement
- you want no RMDs and maximum flexibility

A few situations where traditional wins:

- you're in the 32% bracket or higher right now
- you expect significantly lower income in retirement
- you need the deduction today

2026 limits: $7,500 under 50, $8,600 if 50+.

Most people pick one and never revisit it.

Your bracket changes. Your answer should too.

[Cam Marzi @Invested_In_You]

Sometimes all busy professionals need is a time blocked off on their calendar once a month to talk about finances openly.

I can't tell you how many times I've gone into a no-agenda meeting with a client come out with great ideas on tax savings, business restructuring, cash flow management, etc.

Sometimes open space is all you need to make real progress.

[Cam Marzi @Invested_In_You]

Got a referral last year from a divorce attorney.

Her client was 57. 28-year marriage ending. Settlement almost final.

She'd been a stay-at-home mom for most of it. His career, his income, his retirement accounts.

Here's what the account picture looked like at the end of the marriage:

- His 401k: $1.4M
- His pension: 22 years of service
- Joint brokerage: $340,000
- Her IRA: $48,000
- Primary residence: paid off, worth $820,000

The attorney had already negotiated 50% of the 401k and a share of the pension. The divorce decree was drafted. Everyone thought they were done.

They weren't close to done.

Here's what still needed to happen - and what would have gone wrong without it:

The 401k split required a QDRO - a Qualified Domestic Relations Order. The divorce decree alone does nothing. The plan administrator won't move a dollar without it. We see people finalize divorces and never file the QDRO. The participant retires, remarries, or dies - and the ex-spouse loses their rights entirely. We got it filed immediately and pre-approved by the plan administrator before it went back to the court.

One thing her attorney hadn't flagged: she needed $60,000 in cash now for living expenses and transition costs. She was 57 - under 59½. Normally that means a 10% early withdrawal penalty on top of ordinary income tax.

Not with a QDRO.

The QDRO gave her a one-time window to take a cash distribution directly from his 401k before rolling the remainder to her IRA. No 10% penalty. Ordinary income tax only. Once it hits the IRA - that window is gone permanently.

We structured $60,000 as a direct distribution. The rest rolled to her IRA clean.

The pension split was separate. A defined benefit plan requires its own DRO specifying the survivor benefit election - who gets what if he dies first, and who absorbs the cost of that protection. It's a different document from the QDRO. Many attorneys use one order for both. That's a mistake.

Then the brokerage account.

$340,000 joint. Looked straightforward - split it 50/50.

Except $180,000 of it was sitting in positions with embedded gains going back 15 years. His shares vs. her shares weren't equal after taxes. We went lot by lot. She got the positions with higher basis. He kept the low basis concentrated stock he'd been avoiding selling for years anyway.

Same dollar amount. Completely different after-tax outcome.

IRMAA was the last piece nobody had thought about.

His income this year - between his salary and the pension - was going to be high regardless. But the way the accounts were being distributed created a spike in his 2026 income that would follow him into Medicare premiums in 2028. We restructured the timing of two transfers to keep him under the threshold.

She didn't know any of this was coming.

Her attorney negotiated the assets. Nobody had coordinated the execution.

Divorce attorneys are exceptional at the legal split.

The financial planning that happens after the decree is signed is an entirely different job.

And the window to do it right is shorter than most people realize.

[Cam Marzi @Invested_In_You]

I was sitting with a client last year, he's a surgeon, late 50s, high earner his entire career

We reviewed his fixed income allocation

His last advisor had him invested in a ton of corporate bonds. They looked great at face value - averaging about 5.8% yield. He was proud of it.

But, he wasn't considering what he was actually keeping after tax.

He was in the 37% federal bracket. California resident. Combined marginal rate somewhere around 50% when you stack federal, state, and net investment income tax together.

That 5.8% corporate bond yield was putting about 2.9% in his pocket.

He had $400,000 in those bonds.

We looked at California munis yielding 3.9% at the time. Tax-free at federal and state level.

His tax-equivalent yield on those munis at his combined rate was just under 7.8%.

He'd been earning 2.9% after tax when he could've been keeping 3.9%.

On $400,000 that's $4,000 a year in after-tax income he was leaving behind.

Every single year.

For years.

Not because he was careless. Because nobody had ever shown him how to run the comparison properly.

The math isn't complicated.

Tax equivalent yield = tax free yield / (1 - marginal tax rate)

Most high earners in high tax states run this calculation once and never go back to taxable bonds for their fixed income.

The headline yield on a corporate bond isn't what you keep.

For people in the top brackets, munis might look like a boring choice, but they're the right one.

[Cam Marzi @Invested_In_You]

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[Cam Marzi @Invested_In_You]

Americans median net worth by age:

Under 35: $39,000
35-44: $135,000
45-54: $247,000
55-64: $364,000
65+: $409,000

A comfortable retirement for most nowadays is $1-2m..

How are people bridging this gap?

[Cam Marzi @Invested_In_You]

What does a financial planner do?

We help people get from where they are to where they want to be.

On a high level this is easy

- Invest in X, Y, & Z
- Use these tools
- Manage these risks
- Execute and Adapt

But, when we get granular, it gets more complex

- When to give up on the biz of your dreams when it’s not working
- How to cutoff people who are taking advantage of you
- How to navigate the loss of your family member
- How much to financially support your brother through addiction

These are all conversations I’ve had within the last year

It’s not pretty but it’s real.

[Cam Marzi @Invested_In_You]

Got a call last week from a client.

She inherited a beneficiary IRA and needed to take a distribution.

Her question: how much should we withhold for taxes?

Simple question. Not a simple answer.

She had quarterly estimated payments already set up - federal and state.

A lump IRA distribution on top of her existing income would push her into a higher bracket, change what she owed for the quarter, and potentially trigger an underpayment penalty if we got it wrong.

Before we reached out, we consulted her CPA.

One phone call before the distribution saved her from a surprise tax bill in April.

Inherited IRAs are already complicated.

The distribution timing, the withholding election, the interaction with estimated payments - there are things that can go wrong before the money even hits her account.

Get your CPA involved before you take the distribution.

Not after.

[Cam Marzi @Invested_In_You]

Most people know about the Roth 5-year rule

But, there are actually 2 different Roth 5 year rules.. and the one you haven't heard of matters a lot more than the one you have.

Rule one: Contributions

Your Roth account needs to be open for 5 years before you can withdraw earnings tax-free. This clock starts once, never resets, and only applies to earnings.

Your actual contributions come out anytime, tax and penalty free, no matter what.

Open a Roth today and that clock starts January 1st of this year. Done.

Rule two: Conversions.

Every conversion you make starts its own separate 5-year clock.

Convert $80,000 from a Traditional IRA today and that specific money is locked for 5 years. Touch it before then and you're paying a 10% penalty - unless you're already 59½.

This is the one that derails early retirees.

Someone retires at 52, starts converting their IRA to Roth, and assumes they can access those funds in a year or two when cash runs low. They can't. Each conversion is its own locked bucket. You need bridge assets - taxable accounts, cash to live on while each conversion clock runs.

Age also plays a role here

Over 59½: neither rule matters much. Withdraw freely.

Under 59½: track every conversion separately, know exactly when each bucket unlocks, and never start a conversion ladder without enough outside assets to cover living expenses for 5 years.

Same account. Two completely different clocks.

One mistake. Potentially massive tax penalties.

[Cam Marzi @Invested_In_You]

The FI Playbook delivers actionable finance tips to your inbox every month.

Plus get my Sudden Wealth guide when you sign up here:

https://t.co/qX7yHPOj3C

[Cam Marzi @Invested_In_You]

Why does Lebron need a personal trainer?

Why does Scottie Sheffler have a caddie?

Same reason some of the most successful people in the world choose to have a financial planner.

LeBron doesn’t need to be taught how to exercise and eat well

Scottie doesn’t need to be told how to swing

It’s about accountability, honest advice, and having a partner who knows your financial game as well as you do

Ultimately, that becomes invaluable

[Cam Marzi @Invested_In_You]

The average American saves 3.8% of their income.

The average millionaire saves 20%+.

The gap between where you are and where you want to be is almost always a savings rate problem - not an income problem.

[Cam Marzi @Invested_In_You]

The irony of people saying they’re risk averse and having their entire portfolio in cash

Unaware that they’re exposing themselves to one of the biggest risks of all.. inflation!

Do you know anyone like this?

[Cam Marzi @Invested_In_You]

I sat with a widow last year. Her husband passed unexpectedly.

She didn't know any of their passwords. Didn't know which accounts existed. Didn't know where the will was.

She wasn't unprepared because they didn't have money.

She was unprepared because they never had the conversation.

Here's the "in case of death" checklist every couple should build together this weekend:

Do this now - before anything happens:

- update beneficiaries on every account - 401k, IRA, life insurance, brokerage
- add Apple/Google legacy contacts so your spouse can access your phone
- name accounts jointly wherever possible
- set autopay on every credit card and bill
- use a password manager - share access with your spouse today
- keep your will and trust updated - review every 3-5 years or after any major life event
- keep a running list of every account, utility, insurance, landscaping, subscription - anything with a payment or login

If your spouse passes:

- call your financial advisor first - they coordinate most of what comes next
- call your estate planning attorney second
- get at least 10 certified copies of the death certificate - you'll need more than you think
- submit the death certificate to every financial institution, insurer, and government agency
- contact Social Security to report the death and claim any survivor benefit
- for short term cash needs - start with taxable brokerage accounts first, then IRAs, leave 401ks and Roth accounts for last

Keep one document - updated annually - that includes:

- every account and institution with contact info
- every autopayment and what card it's on
- every insurance policy and policy number
- your advisor, attorney, and CPA contact info
- where the will, trust, and important documents are physically located

Print it and/or save it to Google Drive.

The greatest gift you can give your family isn't just building wealth.

It's making sure they can access it when they need it most.