SIOUX FALLS — Don’t forget to have some fun.

The Baby Boom generation has socked away about $35 trillion for retirement, author Bradly Gotto told a group of pre-retirees and retirees at Augustana University recently.

Things change once you quit working, he said. Instead of diligently earning and saving money, boomers need to learn how to spend it and have some fun.

A caveat, though, is that one also needs to be careful to try to avoid climbing into higher tax brackets and to do what is comfortable for them in their golden years.

The retirement income certified professional drove to Sioux Falls from his Twin Cities-based wealth management firm, called Fiat, to share his passion about educating boomers, who were born from 1946 to 1964.

Gotto wrote a book titled “Spending Money and Having Fun.” He said current tax rates set by Congress are at a “sales rate for a lot of Americans,” but are slated to end in 2026.

"What Congress does has a big effect on how to handle finances," Gotto said.

The seven tax brackets, which he said have been in effect since the federal government started the income tax in 1913, have had a big swing over the years with the top rate once at 91% in 1946 to help finance World War II.

The current federal rates range from 10% for those with an income up to $22,000 to the top rate of 37% for those with an income more than $693,750. (This example is for a married couple filing a joint tax return.)

To keep the tax bill lower in retirement, he offered several suggestions and talked about tax changes that are different in the golden years.

Some of his advice included:

• Take that trip you may have always wanted. He talked about a veteran who wanted to visit Normandy in France all his life. After discussing his finances, he told him to go more than once if he wanted to. "He had the money to do it," he told the retirees.
• He suggested starting a Roth IRA for younger people to get that five-year requirement to be able to withdraw tax-free out of the way.
• The age that withdrawals from 401Ks are required to start was just moved from 72 to 73.
• "Tax credits on federal tax forms are like Easter eggs," Gotto said. "They are hard to find." But they can be a big benefit, he said. An example he gave was the health care tax credit that can reduce the cost for insurance and make it more affordable before Medicare arrives for those who may retire before 65.
• He explained the standard deduction gives those over age 65 an extra $1,300 benefit per person for married couples and $1,700 for single filers each year. Taking the standard deduction may be the right way to go compared to itemized deductions, he said.
• He noted that widows or widowers will pay a higher "effective rate" on their taxes if a spouse dies and to plan for such a situation.
• Gotto said he realizes it may be hard for those who were savers all of their life to turn into being spenders. But he suggests that in later years people should be enjoying themselves and spending some of their hard-earned money.
• Withdrawals from 401Ks and IRAs can be difficult to calculate, but once again it’s a comfortability factor and people should also look at less riskier investment options in retirement years. He suggested managing and still keeping money available in the funds to grow income. The only thing is that time is no longer on an older person’s side in later years to recover from major drops.

Gotto ends his book by saying the retirement years are just the beginning of a new adventure.
And, as he told the retirees at Augustana, "enjoy the party,” have some fun and spend some of that money.

Gotto was a guest of Matt Mathiesen who is president of Complete Benefits in Brandon.

Although the seminar was free, residents were encouraged to have a free 30-minute session with him to look at options. Also more sessions could be scheduled to look further at financial retirement planning.