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From the TRS Vault – Retirement Application Process Revisited
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(intro music) Hi this is Everett Crockett and welcome to TRS Your Retirement In Focus. Applications for
summer retirements are in full swing. Typically at this stage, most retirees have decided
under which of our seven retirement plans they will retire. Yet, there still may be
some of you who have not made your decision. Today we will present information and plan descriptions for all seven
of TRS' retirement plans. Hopefully, you will find this information
helpful as you draw closer to your retirement. Also, one very important thing to keep in
mind, is that due to the large volume of retirements in the summer and at the end
of each school year, the deadlines for summer retirements are as follows.
For June
retirements, the deadline is March 31st. For July retirements, the deadline is April 30th.
And for August retirements, the deadline is May 31st. Now without further ado, we will now
present information on TRS' retirement plans. (music) On the road to retirement, one of
the most important decisions you can make is who will receive the benefits of your
retirement account beyond your lifetime. With Teachers Retirement System of Georgia, your
beneficiaries are not decided by documents like wills, divorce decrees, or marriage
certificates. Rather, they're determined only by the beneficiary information on file at TRS
when you pass away. Therefore, it's critical that you designate at least one primary beneficiary
and one secondary. As well as routinely update your TRS beneficiaries to reflect significant
life changes such as divorce, marriage, birth, and death. Reminder, beneficiary designation
completed with HR does not transfer over to TRS, this includes changes during open enrollment.
Also, keep in mind, that if you don't have the right person or persons on file, it can lead to
costly legal problems and unnecessary frustration. Likewise, if you are the beneficiary on
file at the time of a retiree's death, it is imperative that you notify TRS as soon as
possible.
That's why it's so important that you designate your beneficiaries now. The good
news, it's easy to do. Simply log into your TRS account and visit the designate beneficiaries
section to complete the form. And as always, we're here to help you along the way. So
here's to good planning and to the road ahead. Today we'll be focusing on the various retirement
plans offered by TRS. Each of us are different; even twins are different in some way or
another. As we approach our retirement, there's a lot that we need to think about. Like,
what is the best retirement plan for me? Did you know that TRS offers seven different retirement
plans? One of those plans are more than likely most beneficial for you and me as we make our way
to our date of retirement.
Today I'll share some information and details about each of those
plans so that both you and I are better informed of our retirement plan options. Before I get
started, I want to be sure that you are clear on the fact that no one from TRS can tell
you or me, or advise you or me, on what plan is best for us. We have to make that choice
for ourselves.
But one thing that TRS can do, is give us some things to think about as we think
about which plan we will ultimately choose. It may not be a bad idea to have pen and paper, or a
tablet, or whatever you like to use to take notes at your disposal. Before we chose our retirement
plan, there are definitely some things we need to think about. Here are just a few. What do we want
our lifestyle to be like after we retire? Do we want to keep up the same comforts, pleasures, and
standards that we enjoyed when we were working? Some of the best financial planners say that if
we do, we're going to need at least 80 percent of our pre-retirement income.
As I stated earlier,
each of us are different. So I would imagine, that the actual percentage would be different as
well based on our individual retirement goals. But one thing that is likely true for each of us, is
that our TRS benefit alone, will not provide us with 80 percent of our pre-retirement income. So,
what do we do? How will we offset that shortage? Will we be able to depend on social security?
If not, maybe we will be able to take advantage of our personal savings and investments to help
cover the shortage of our 80 percent. Something else to consider is, what are the needs and
expectations of our family and loved-ones? Would they suffer financially if a retiree passes
away and their pension incomes stopped? If so, maybe we should think about selecting a plan that
leaves a monthly benefit to beneficiaries.
What about your kids and grandkids? Are they employed?
If so, we may not need to leave them a monthly benefit. These are just a few examples of the
kinds of questions we have to ask ourselves as we get closer to our retirement. Now let's look
down the road a bit. We've worked, we've invested wisely, and we are near to retirement. We want to
be comfortable, knowing that we have a good plan as we journey into our retirement. For us, there's
good news. TRS' defined benefit plan is one of the best plans in the country. As the name implies,
our retirement benefit is defined by a calculation using our years of membership service, and the
average of our highest 24 months of consecutive salary, and a two percent multiplier. Under this
plan, you and I assume no investment risks. Plus, we have survivor and disability protection while
we are active members. Also, we are guaranteed retirement income for the rest of our lives. If we
wanted to know how much of our high average salary we could take home in retirement, we would simply
multiply our years of service by two.
That is the maximum plan formula and we'll talk more about
that in a little bit. Under TRS' defined benefit plan, or 401a plan, we're offered two plans
of retirement: Plan A and Plan B. Basically, Plan A provides a retirement benefit only to
us, the retiree. Plan B on the other hand, offers benefits to our beneficiaries at the time
of death. Under Plan A and Plan B, we may also choose to receive a partial lump-sum distribution
(cash payment) in exchange for a reduced lifetime retirement benefit.
For details on the
partial lump-sum option plan, or PLOP plan, just see the TRSGA.com website. A great benefit of
our TRS plan, is that what we receive from TRS is not tied in any way to the stock market. Whether
stocks go up or down, we can always rely on our TRS benefit to stay the same from month to month.
When there is inflation our benefit also includes a cost-of-living adjustment, or a COLA, which
makes our benefit grow from year to year. Again, that's a great benefit. Under Georgia law,
this benefit is guaranteed for our lifetime. And if we deicide to take a retirement plan
that leaves a benefit to our beneficiaries, their benefit is also guaranteed for life. Many
private sectors employees don't have a guaranteed pension. As a matter of fact, many employees
across the country who work for firms we have all heard about are losing their defined benefit
pension plan. Over the last ten plus years, over 25 percent of the country's Fortune 500 companies
have either frozen, closed, or terminated their defined pension benefit plan. What we receive from
TRS is based on a formula that involves our length of service and our high average salary.
TRS uses
a very generous formula compared to other state plans. As TRS calculates our benefit using the
highest two consecutive years of pay; when other states use three to five years of pay. Basically,
the longer we work and the higher our salary is, the more money we will receive from TRS. In a
bit, we'll take a more detailed look at that formula. TRS' plans can be broken into two main
categories; those that do and those that do not provide a monthly benefit to beneficiaries after a
retiree passes away.
Here are the seven plans that TRS offers. Number one, Plan A, also known as the
maximum plan. Number two, Plan B Option 1. Neither this plan nor Plan A offers a monthly benefit to a
beneficiary at death. But the remaining five plans do. Plan number three is Plan B Option 2. Plan
four, Plan B Option 2 Pop Up. Plan five, Plan B Option 3.
Plan six is Plan B Option 3 Pop Up.
And last, but not least, Plan B Option 4 is the seventh plan that TRS offers. At retirement, in
addition to selecting Plan A, the maximum plan, or Plan B, a survivorship plan, you and I may also
elect to receive a one-time lump-sum distribution in addition to our monthly retirement benefit. In
exchange for a reduced lifetime monthly benefit, we can elect to receive a partial lump-sum option,
or PLOP. Our age and plan of retirement are used to determine the reduction in our benefit. A PLOP
distribution would be made as a single payment at the time that our first monthly benefit
is paid.
Based on the amount of the PLOP, our monthly retirement benefit is then reduced
to be the actuarial equivalent of the retirement benefit without a lump-sum distribution. We cannot
elect a PLOP that will reduce our monthly benefit by 50 percent or more of the benefit we are
eligible to receive under Plan A. Each of the plans are based on a benefit formula comprised of
the following. The years of creditable service, including partial years, multiplied by two
percent, multiplied by our high average salary over 24 months. This, in turn, yields our basic
monthly benefit under the Plan A, max plan. This basic monthly benefit is then used as the basis
for the other plans offered by TRS. Plan A, the maximum plan, and Plan B Option 1 do not provide
any lifetime monthly benefits to beneficiaries. So if we don't plan to leave a monthly benefit, our choice
becomes a lot easier as it narrows it down to two: Plan A or Plan B Option 1. Options 2 through 4 all
provide varying amounts of lifetime benefits to designated beneficiary. Let's take a look at each
plan. First up, is Plan A. This plan provides us with the largest possible monthly lifetime benefit
for the remainder of our life.
Under this plan, the contributions and interest that we made
during our active employment are reduced monthly from our gross benefit payment. In most cases, our
contributions and interest will be depleted within 18 months of our retirement. However, our monthly
benefits will continue for the remainder of our lives. At the time of death, the monthly benefits
stop and any declared beneficiary is not entitled to receive a monthly benefit. If death occurs
before a retiree has received in monthly payments, a total amount of his or her contributions and
interest, the remaining funds will be paid in a lump-sum to the designated beneficiary. We may
change our beneficiary designations at any time under this plan of retirement. To estimate the
monthly lifetime benefit for the maximum plan, a retiree may calculate it for themselves by using
the retirement formula: two percent, times the years of creditable service, times their highest
consecutive 24 months of membership salary.
If we are within five years of retirement, we can login
to our online TRS account and generate a benefit estimate using current data from our TRS account.
Now let's take a look at the Plan B Options. Plan B provides a member with six survivorship options.
Option 1 allows you to possibly leave a lump-sum payment, but no monthly benefit to a beneficiary
after a member's death. And Options 2 through 4 allow you to leave a continuing monthly benefit
to a beneficiary after a member's death. If a survivorship plan is indeed selected, the amount
of the monthly benefit will be reduced actuarially to allow for the lump-sum payment or monthly
payment for life to the designated beneficiary. The amount of the reduction in monthly benefits,
or the cost of the option, depends on the retirees age and the age of the specified beneficiary.
If the chosen beneficiary is more than ten years younger then the retiree, and not the retirees
spouse, then the retirement benefit may be subject to the Required Minimum Distribution rules of
the IRS, the Internal Revenue Service.
These rules regulate the amount of a pension that can be
distributed to a survivor. For more information, we can visit the TRSGA.com website, or call the
TRS office. The age of the beneficiary will also influence the amount of the retirement benefit under Plan B
Option 2, Option 2 Pop Up, and Option 4. The point here is, the younger the beneficiary, the smaller
the monthly benefit amount will be. This in turn means, that the cost of the option is greater.
One thing that must be kept in mind, is that if one of the survivorship plans of retirement is
selected, the beneficiaries cannot be changed after retirement; except as specifically provided
by law.
We can learn more about changes in plan of retirement on the TRSGA.com website. Now let's
look at the Plan B Options in detail. Plan B Option 1 allows us to possibly leave a lump-sum
amount to a beneficiary in return for a slightly reduced lifetime monthly benefit, from the maximum
amount that is. Under this plan, the total of our contributions and interest at the time of our
retirement will be reduced each month by only the portion of our total gross benefit. Which is
made up of our contributions and interest. This is routinely referred to as the CNI, at death, all
monthly benefits will stop.
However, any remaining contributions and interest will be refunded to
the designated beneficiaries or the estate of the retiree. In most cases, our contributions
and interest will be depleted within 10 to 14 years after retirement, but our benefits will
continue throughout our lives. With this plan, you may change your beneficiary designation at
any time after retirement. If the beneficiary just so happens to be your spouse and you later
become divorced, you can change your plan of retirement. Plan B Option 2 will allow us
to leave our beneficiaries a reduced monthly lifetime benefit based on our age and the age of our
specified beneficiaries. This option guarantees that at death, any named beneficiary if living,
will receive a lifetime benefit comparable to 100 percent of the benefit amount at the time of death
in accordance with IRS regulations and the ages of the beneficiaries.
Also under this plan, it is
allowable to designate multiple beneficiaries to receive a lifetime monthly benefit and or
to specify the percentage to be paid to each beneficiary. If two or more beneficiaries are
designated, and one dies before the retiree, the percentage of available benefits selected for
the remaining beneficiaries will not be adjusted. If the Plan B Option 2 plan beneficiaries die before
the retiree, the monthly benefit will remain under Option 2. Unless, the retiree is eligible to
change the plan of retirement and or beneficiaries as provided by law. We can see the changes in
plan of retirement on the TRSGA.com website for further clarification. The Plan B Option 2 Pop Up
offers a reduced monthly lifetime benefit based on our age and the age of our beneficiaries. This is
just like Plan B Option 2. If you as the retiree, die before your beneficiary, your beneficiary will
receive a lifetime benefit equal to the amount you were receiving at the date of your death.
On the other hand, if your beneficiary passes away before you do, then your monthly benefit
will increase to the original maximum plan amount.
Plus, all increases awarded to you during retirement.
Unlike Plan Option 2 however, under this option, you may only designate one beneficiary. Plan B
Option 3 offers a reduced monthly lifetime benefit based on your age and the age of your beneficiary.
Under this plan, at the time of a retiree's death, any named beneficiaries if living, will receive
a lifetime benefit comparable to 50 percent of your benefit amount at the time of your death in
accordance with IRS regulations and the ages of your beneficiaries. You can also designate
multiple beneficiaries to receive lifetime monthly benefits and specify the percentage
to be paid to each beneficiary.
If two or more beneficiaries are designated, and one passes away
before the retiree, the percentage of available benefits that were selected for the remaining
beneficiaries will not be adjusted. If all the beneficiaries predecease the retiree, then the
monthly benefit will remain under Option 3. Unless, the retiree is eligible to change the plan of
retirement and or the beneficiaries as outlined in the changes in plan retirement information.
Which can be found again where? Of course, on the TRSGA.com website. The Plan B Option 3
Pop Up offers a reduced monthly lifetime benefit based on your age and the age of whom, your
beneficiaries. If you predecease your beneficiary, your beneficiary will receive a lifetime
benefit equal to 50 percent of the amount you were receiving at the date of your death.
If your
beneficiary, on the other hand, predeceases you, your monthly benefit will increase to the original maximum plan
amount. Plus, all increases awarded to you during retirement. Under this option, you may only
designate one beneficiary. Last, but not least, we have Plan B Option 4. The beneficiary benefits
you specify under this plan cannot cause the monthly benefit to be reduced below 50 percent of
the maximum benefit available to the retiree. If multiple beneficiaries are designated, and one or
more beneficiaries pass away before the retiree, then the dollar amounts or the percentages are
not adjusted for the remaining beneficiaries. Beneficiaries also receive a pro-rated share of
any cost-of-living increases you receive up to the date of death. Monthly benefits under
Option 4 are also calculated actuarially using an amount of the survivor's benefit
specified by the member. TRS will calculate the benefits under Option 4 and provide an
estimate of the monthly benefit upon request. So as you can see TRS has several plans,
each unique in it's benefit to a retiree. Isn't it pretty evident that we have some very
important decisions to make? As we progress our way down our path, inching our way to retirement,
absolutely! So now that you are aware of the various plans and options, what should you do
next? What should we do next? Well, TRS recommends that you consider the following.
Start thinking
about what option is best for you and your family. Go to www.TRSGA.com and generate your own benefit
estimate in your TRS account. And be sure to check out our online members' guide, under the newsroom
link, and click on publications. Once there, scroll down to the bottom of the page. You can
also ask TRS for a benefit estimate when you are within five years of your retirement date.
Schedule a one-on-one counseling session within two years of retirement, in our Atlanta office
or via our website in your county school system. As always, if you have questions, concerns,
or feedback, you can reach out to us either via the podcast or you can contact the Atlanta office.
Thank you once again for joining us. Be sure to tune in again for the next episode of TRS Your
Retirement In Focus. Stay safe and stay smart. (outro music).
The Next James Bond – David Beckham v James Corden
user 0 Comments Retire Wealthy Retirement Planning
>> MONEYPENNY, MONEYPENNY,
MARTINI, SHAKEN, SHAKEN, NOT STIRRED, MONEYPENNY. (CHEERS AND APPLAUSE)
>> YOU KNOW THIS IS AN AUDITION FOR JAMES BOND, RIGHT? >> YEP. >> James: NOT LIKE AN
UNDERWEAR COMMERCIAL, SOMETHING LIKE THAT. >> THAT'S PRETTY OBVIOUS. >> James: I WEAR WAY MORE
UNDERWEAR THAN YOU. MONEYPENNY– MISS MONEYPENNY. MONEYPENNY. >> OKAY, WE'RE READY FOR YOU. HEY GUYS, HEY. >> HI. >> SO, THANK YOU SO MUCH FOR
COMING IN, THANK YOU, HI, DAVID, HI. >> LOVELY TO MEET YOU. >> HOW LOVELY TO MEET YOU,
LOVELY TO MEET YOU. AS YOU KNOW, WE ARE CASTING THE
NEW JAMES BOND. LITERALLY THERE ARE ALL SORTS OF
DIFFERENT PEOPLE, YOU KNOW, SO WE'VE GOT SOMEONE LIKE YOU,
DAVID, HANDSOME, KIND OF ATTRACTIVE, CHARMING. PHYSICAL SPES MEN. AND THEN THERE IS SOMEONE LIKE
YOU, JAMES.
>> James: WHAT DOES THAT MEAN? >> IT'S A LITTLE BIT WEIRD THAT
HE'S HERE. >> James: DOES IT FEEL A
LITTLE BIT WEARED THAT I'M HERE? >> OKAY. SO I'M GOING TO PUT YOU THROUGH
A FEW DOUBLE 07 SCENARIOS AND SEE HOW YOU FEAR. >> PERFECT. (APPLAUSE)
>> AND CUT, THAT WAS GREAT. FANTASTIC. JAMES? >> James: NO, I CAN'T DO THIS,
I LOOK RIDICULOUS. >> I THINK YOU LOOK GOOD. >> James: I LOOK LIKE AUSTIN
POWERS. >> WELL, I MEAN IT IS AN
INTERESTING CHOICE OF SUIT, THAT IS NOT THE ONE YOU PUT IN MY
ROOM.
>> James: WHAT ARE YOU TALKING
ABOUT, THIS WAS THE SUIT THAT WAS HANGING IN MY ROOM. >> SOMEONE MUST HAVE CHANGED IT. >> James: YES, SOMEONE MUST
HAVE. DAVID. OKAY. OKAY, I SEE WHAT IS GOING ON
HERE. >> OKAY, JAMES, SO WE'RE GOING
TO TRY SOMETHING ELSE, A CLASSIC JAMES BOND IS HE DUCTION SCENE. >> James: ALL RIGHT, SHOULDN'T
BE A PROBLEM. WELL, HELLO THERE MISS HEMLOCK,
IT'S QUITE A VIEW FROM HERE. PERHAPS WE SHOULD SLIP INTO
SOMETHING A LITTLE MORE COMFORTABLE. >> HI, I'M DAVID BECKHAM. >> I WANT TO SLEEP WITH HIM. >> James: OH, COME ON, THAT'S
NOT FAIR, THAT'S NOT FAIR, THAT ISN'T FAIR, WHAT IS HE DOING. >> CUT, DAVID, WHAT ARE YOU
DOING. >> James: WHAT ARE YOU DOING? >> I THOUGHT THAT WAS MY CUE.
>> James: CUE FOR WHAT. >> CAN WE START AGAIN PLEASE. >> ALL RIGHT, SHOULD I TB. >> James: YES, YOU SHOULD. >> WHAT IS YOUR PROBLEM. >> UNBELIEVABLE. >> WELL, HELLO THERE MISS
HEMLOCK, PROGRAMS YOU WOULD LIKE TO SLIP INTO SOMETHING MORE
COMFORTABLE. >> OH MY GOD. THAT A DISGUSTING. WHAT IS THIS? >> SPY [BLEEP] OVER THERE, I'M
NOT DEALING WITH THAT, NO WAY. I CAN'T DO THIS, I CAN'T DO THAT
>> BOND WOULD. >> NO, HE WOULDN'T. >> STOP IT. >> I'M NOT DOING ANYTHING. >> STOP IT. >> I DON'T KNOW WHAT THE PROPS
IS. >> STOP IT. >> YOU STOP IT. >> YOU STOP IT. >> I'M NOT STARTING IT.
>> OKAY, DAVID SOCKER THIS IS
YOUR FINAL SCREEN TESTK I JUST WANT TO YOU DO A BASIC JAMES
BOND INTRODUCTION LINE, LET'S SEE IF YOU CAN DO THAT WITHOUT
MUKING ABOUT. >> OKAY. >> NEUF A LA BANQUE. >> I ADMIRE YOUR COURAGE MISS. >> HEMLOCK, BUN'S HEMLOCK, I
ADMIRE YOUR LUCK, MR.. >> BOND, JAMES BOND. >> James: NO, NO, NO, YOU
CAN'T DO IT LIKE THAT. YOU CAN'T SAY IT LIKE THAT, THAT
IS TERRIBLE, THAT'S RUBBISH. >> ALL RIGHT, HOW WHAT YOU DO
IT. >> James: EASY, SAY THE NAME
IS BOND, JAMES BOND. >> THAT IS SEAN CONNERY, YOU
JUST DOING SEAN CONNERY.
>> James: NO, I'M NOT. >> YES, ARE YOU. >> James: NO, I'M NOT. AT LEAST I DON'T SOUND LIKE A
GIRL. >> AT LEAST I DON'T LOOK LIKE
SHREK. >> James: RIGHT, YOU WANT TO
GO. >> DON'T YOU DARE. >> TRY AGAIN, SEE WHAT HAPPENS. (LAUGHTER)
>> STOP IT, OKAY, STOP IT, STOP IT, THAT'S ENOUGH, THAT'S TOUGH. THAT HAS BEEN A TO THE ALL WASTE
OF TIME, I WOULD LIKE YOU BOTH TO LEAVE. >> WHAT, SO I DIDN'T GET THE
PART. >> NO. >> WHAT ABOUT ME? >> NO, YOU ARE BOTH UTTERLY
UNPROFESSIONAL. THIS AUDITION IS OVER. >> FINE. >> FINE, YEAH, DON'T CALL US,
WE'LL CALL YOU. >> WE SHOULDN'T BE FIGHTING LIKE
THIS. >> I KNOW. >> WE ARE A TEAM. WE SHOULD BE WORKING TOGETHER. >> I LOVE YOU, MAN. >> ME TOO. >> I HAVE AN IDEA. LET'S GO. >> THIS SUMMER CRIME WILL PAY,
DAVID BECKHAM IS BATMAN AND JAMES CORD ENIS ROBIN. — CORDENIS ROBIN.
(APPLAUSE)..
Read More
The Peace of Mind Retirement Planning Process
user 0 Comments Retire Wealthy Retirement Planning
What does it look like to build a retirement-focused financial plan? What are all the steps? What do you have to do? What information do you have to provide? In today's episode, we are going to lay it all out, super simple, for you. And our goal is, by the time you get through this particular episode, you're going to have a clear picture. You're going to understand what it takes so that you can have a secure, safe, retirement, peace of mind to and through retirement. We hope you enjoy this episode. To learn more about how to secure your retirement and all the different elements you need to know, please subscribe to our channel and hit the bell so you'll be notified when we release episodes every Monday. We have helped hundreds of our clients gain clarity and get on the path to a great retirement. Now it's your turn.
Let's dive in. Welcome, everyone, to our Secure Your Retirement podcast. Today is a very special episode. We're going to kind of take you through our financial planning process really from an A to Z. And we get the question all the time, how does this look? Does it work? To be able to really help us to do that, we have special guests with us. We have Nick, who is here in our office; and we have Taylor, who works with all of our clients as well, but she does that all the way from Salt Lake City, Utah, but she drove…
Nah, she flew here. She came on all the way for this episode and to be able to spend some time with us. So thank you, Taylor, for coming all the way out just for this special episode. Yeah, of course. But she did pick pretty good weather. She did, she did. All right. So, here's kind of the premise of this particular episode. What we get a lot of times is somebody who maybe has worked with a financial planner, financial advisor sometime in the past, maybe they never have, and they go, "What does this look like? What's that process look like?" So we have Morgan with us on this episode, and Morgan's going to really be our moderator and kind of interview us as to how this whole thing works. So that's kind of the setup for today so that you can understand from A to Z how this all works.
So, Morgan, get us started. So let's assume someone has learned about us via the website. They've seen our book. They, somehow, have learned about us and they're ready to be introduced. And how would they go about then, Taylor, getting ready to do that? How would they prepare for a personalized introduction meeting? Yeah. So first thing that we'll have someone do is fill out what we call our financial snapshot, and we send that over as a questionnaire through email. And it has a bunch of information and questions about things like if you're currently working, what your level of income is? And if you're going to take Social Security in the future, what your estimated benefit's going to be? Or if you're taking Social Security now, what your pension is all throughout your current financial situation? That will help us get to know you a little bit better and figure out where we can help you with our services.
What if somebody's not quite ready to share all of their information with us? How does that work? Yeah. So, Murs, I'll let you handle that one since you have been around for a long time. So, when it comes to someone that is… And we understand, right, it's your money that you've taken time to build up over 30-some-odd years and to go into a meeting with usually a complete stranger and be able to give them everything, we understand the apprehension around that.
But on the flip side of the coin, you got to understand that as a financial planner and the way that our firm operates, we have to know quite a bit to be able to make a decent recommendation. So we do operate… I'm a CFP, Radon's a CFP, Nick's a CFP. Taylor is one, too. And so as CFPs, we have to operate under this fiduciary standard. Fiduciary, by the way, pretty much means that we are going to put our client's interest ahead of our own. And the only way to do that, the only way to make a decent recommendation, the only way to give guidance going forward is we need all the information really that is pertinent to the conversation.
So if someone is not willing to share account values with us, or if they don't want to discuss some property that they have or something like that, well I'll tell you, it starts to raise a little bit of a red flag for us because there's a lot of things that go into all of these elements of financial planning. And it's one of those things where obviously, yeah, we need to take time to build up the trust to understand each other.
But on our side of the table, if we can't get the data, at the end of the day, the data is what is going to help us make the best recommendation possible. Then there there's holes in that data, then we start to have issues on making projections, understanding your risk levels, being able to make a proper recommendation as far as what investment strategy do we want to be utilizing. So if we don't know all the chips on the table, then it makes it very difficult. Ultimately, that ends up being a separate conversation of, "Hey, Mr. And Mrs. Client, where do we want this engagement to really go?" Yeah.
I just wanted to piggyback on a little bit about how Taylor opened it up because she talked about all these different pieces that we need. And if you think about our process, we get some basic information. Obviously, we want to know who you are, your date of birth, some just basic information. But then we get right into this idea of, well, give us an idea of where your accounts are and what type of accounts. So I just thought I'd ask Nick, if you could take us through this, because you've worked a lot with us as well around this data gathering. Could you tell us… Maybe describe what are the different types of accounts that people would be submitting and why it's important to know what those different kind of accounts are? Yeah.
So, some of the more common accounts are IRA accounts and Roth IRAs. You have 401(k)s that you might have built up for decades in the past. Those are probably the most common ones, but you can have brokerage accounts, whether that's an individual brokerage or a joint account. And then you also may have different annuity accounts. So, those can be at different insurance companies in the form of an IRA or a Roth IRA or a non-qualified account as well. So, there's a whole bunch of different accounts that you can have. Some are more common than others, but at the end of the day it's important to get the specific type of account so that we know how to build our recommendation, what to build our recommendation off of, and how to help going forward. Yeah.
And I think on top of that, it's also just a good exercise for the person that is trying to get some advice because I'll tell you, Radon and I, we've seen so many times where a person doesn't know what the balance of that one account was, where they worked for that company 10 or 15 years ago, and so an old 401(k), or they haven't really looked at how an account is allocated as far as from an investment perspective. So I think it's a good exercise not just to get all the data to us and the information to us, but also just to take a step back and look at what you have done so far to get to where you are and the different pieces of the puzzle that have come together over time. Usually, that's a pretty remarkable thing that you can look back and say, "Wow, I did all this." Yeah.
And I think, Morgan, you set this up and said, "Okay, I'm thinking about meeting with you." So, just to kind of clarify, we really work off of what we call a three-appointment process. And so, what we're describing right now is kind of getting ready for that first appointment. And so I think you asked the question, "What if I don't want to share some things" or that's not… so for the initial conversation, if we've got… I always say, "Give me the basics of your picture." Meaning I don't need to know it to the penny, but we need to have an idea of about what those accounts are or the different types of accounts Nick just talked about, and we need to know their tax classification just so we can have a basic conversation. And we're going to go through this worksheet.
Now, if you don't have this available ready when you come in, we can do this together. So don't worry about that. But now, I just wanted to set the basis in that initial conversation that we have. It's really kind of this idea of are we a good fit for each other? So, yes, this is important information. We're going to either ask you to have it for us ahead of time or we're going to do it while you're here with us. So we've kind of covered the accounts.
And again, I'm working off this first appointment because we're going to come back to those accounts for the second appointment. But for right now, we're just trying to get our baselines. So I think the next area that we start to go into is our income part of the snapshot. So, Taylor, would you mind breaking down the different types of incomes somebody might be telling us about on this? Just so we've got an idea. So if you are still working and you haven't retired yet, then we're going to want to know what your current salary is at your job.
And if you have retired and if you're taking Social Security, then we're going to ask about what your current Social Security benefits are. Or if you have not started Social Security yet, then there is a way to find out what that future benefit is going to be, so we can help you answer questions about when the optimal time to begin Social Security might be depending on your unique situation. So your current income from your salary, if you're working. Social Security, if you also have a pension, or are planning to start a pension in the future, then we'll want to find out what that amount looks like. So that that can be considered as part of your income available to you to cover your expenses in retirement. And then any other type of income that you have from maybe the sale of a business, if that's part of your plan, or from rental properties that you have.
Then we'll also consider any rental income that you have. So we know what we have saved so far and we know what we have coming in. I'm assuming there's also going to be some information about what we have going out, what we're spending, right? Yeah, exactly. We'll also want to get an idea of what your current living expenses are, if you have any debt obligations, if you're still paying a mortgage or an auto loan or things like that. If you have kids going to college or grandkids that you want to pay for their college expenses, then we want to know about those types of things. And then also we can have a conversation with you about your goals in retirement. If you want to travel or do other things with your retirement savings, donate to charity, whatever that looks like for you, or have home renovations, redo your kitchen or your bathroom, whatever. Then we also plan those so that we also get an idea of what your future expenses might be if they're not regular and consistent right now.
Yeah. And I would say that category of understanding your spending is usually one of the more difficult ones. And I'll paint you a little picture. A lot of people that come to us, they're close to retirement or maybe already retired, but a lot of times they say you're close to retirement, you're making good money, and now you're starting to say, "I need to figure out this whole retirement thing." But you're making good money, you're paying the bills, and you don't really pay all that much attention to, well, what are the dollars that are going out of the door and what categories are they? And it makes you kind of take a step back and you got to understand where you're spending because we see it all the time when someone flips from their accumulation phase of life into retirement and you don't have that employer that's paying your paycheck anymore, and it's really all about what you've done to save and build up for retirement, you start to really think about, "Well, do I need this line item in the budget or can we cut it?" Because the worry, no matter what, no matter if you've got 500,000 saved up for retirement or 10 million saved for retirement, a lot of times the worry is the same that, "Am I going to have enough? Am I going to run out of money?" So I think the earlier someone starts evaluating not just how much they have today, but also what's going to be going out the door when they do fully retire makes the plan so much more well thought out and more precise.
Yeah. So we're almost through it all, your question here, Morgan. You asked a really big question. So as we go through the snapshot, we've kind of gone now through all the financial stuff. Now, we have some other categories that we're going to want to talk through. And one of those is the estate plan. We'll ask people about how much have they done? Have they done a will? Have they done a trust? How old is it? Was it done in a different state? Do you do your own taxes? What are your goals? Do you have any specific goals? Taylor mentioned a couple about redoing a kitchen. Sometimes people say, "I've got this dream vacation we've been waiting for, and this is going to be a big expense for us, but we've been dreaming about it.
And whenever we hit that retirement, we're going to do it. And it's going to be a little bit more on the expensive side because we're going to go a lot of places and be gone for a while. So we need to build that in." So once we have all of that conversation or enough of that information to say, "Hey, here's kind of the conversation," now, we can really start to say, "All right.
What do we want to do with that and how do we want to start putting it together?" And typically, in that first visit, what we're doing is saying, "Here's how we work." And I mean very briefly, this is what we tell people, every person, is that we really kind of work in the very beginning by building a retirement-focused financial plan. That's why we need all this data. Then we're going to say, "Look, once we know that, we'll talk about investments, we'll talk about insurance, we'll talk about income planning, we'll talk about investment planning. We're going to really kind of go all the way through." So now, we got this sheet, so we've kind of got this information.
That's really kind of the first appointment. So, what's your next question? Well, so then I know that it will look like after that as far as we've done our homework, we've got our appointment set, you'll receive a call from our office to confirm for the next day, and then you'll come into the office, and then we'll have that visit, right? That's right. So once we get through with that visit though, at this point, we've got a good picture. And I think at that point is when people say, "Yeah.
You know what? I do like you guys, or I don't," but most of the time we hope you say you do. And we say, "We like you, too." And so we're kind of now moving on to the next date. And that next date is really our second visit. Okay. And what does that look like and what do I need to do to prepare between, or what would a person need to do to prepare for that? Is it- Yeah. So I'm going to say this. The person really doesn't have to do much at all at this point, but there is some key data that, in addition to what we've got already, that we're going to need next. So, we got a lot… We're going to spend with Taylor on as far as building out the plan. But Nick, I just want to have you address real quick, what is some of the information that we need to get so that Taylor is going to have everything she needs to really build out that financial plan? Because right now, we've just kind of got the snapshot, so there's some actual documents that we're going to need.
Could you walk us through what those documents would be? Yeah. Absolutely. So, what really helps us out in creating that financial plan are specific account statements. So, wherever the assets are currently held, whatever custodian that is, that could be Charles Schwab, that could be TD Ameritrade, wherever else that is, it's really helpful to get the most recent statement of the account. And then it's also helpful for us to get most recent tax return as well. So in our preparation for creating the financial plan, doing analysis on your specific tax return and tax situation, and then any other statements, 401(k) statements, that you may have that are recent are also extremely helpful for us creating that plan and beginning to formulate that recommendation throughout our meeting. So, then it gets all turned over to Taylor? Yeah. So now at this point's, whenever Taylor goes to work, in addition to what's already been done. So Taylor, could you just walk us through what you do with all that? Yeah.
And before we do that, also, let me interject and say, let me be the person that Morgan was earlier of, "Well, why do I need to give you these statements? Why do I need to give you my tax return?" That's very personal information. What are you going to get out of this that I don't already see or that is going to become relevant in our next visit together? Yeah. So this is the fun part for me because I get to go through all of the account statements, and we build out two things from those. One, we want to verify the balances of your account so we make sure that we have the right information to base off of what your assets are so that we can make appropriate recommendations to move forward. But we also will go through and look at what the holdings are in each of your account, what exactly you're invested in, what funds or if they're ETFs or mutual funds or a single company stocks.
We want to know what you're invested in because part of what we're preparing on our end is an analysis of those holdings so that we know what your current risk exposure is like because that will be part of our recommendations moving forward, is how to make an investment that's appropriate for the amount of risk that you want to have as part of your retirement plan. So we'll do an analysis on all of the holdings within your investment accounts from the statements that you upload to us as part of our data gathering process, and then also just verify those amounts as part of your retirement-focused financial plan. And for the tax returns as well, we'll take those and do an analysis on your tax returns to look for opportunities for tax planning and observations and looking forward not just for the past years of your tax returns that have already been filed, but for different moves that we could possibly make to help you with your tax situation moving forward as part of our recommendation.
So that's what we're looking for from your account statements and also your tax return so that we can have a conversation on those topics as part of your next meeting. I can't remember if it was mentioned or not, but how do I get these documents to you? Yes. So we'll send an email out. Right now, it's been coming from me. And we have a little portal where you can securely upload all of your statements and just we will be able to access those so it is secure. All right. Nice. All right. So, just to paint a little bit of a picture here, Nick, could you kind of walk us through what's the client going to get when they come in? So now, they come in. And Taylor's been doing all this work to get everything ready and putting it into our financial planning software.
What's that going to look like to a person when they come in? How's that going to feel? What are you going to see? Yeah. So during that second appointment, we will go through your entire financial plan. So, like Radon said, once we've taken all of the data and put that into our financial planning software, we'll go and walk through each and every step of that plan with you; make any tweaks that we need to make; updates that you see, expenses, income; and make any changes that you'd like to see and even different scenarios that you'd like to see. So we'll walk you through each step of that process in the meeting. And then at the end of the meeting, whatever you'd like to take home, you're free to take home.
So whether that's different scenarios, whether that's a printout of the entire financial plan, we can print it out or we can send it straight to you securely. And so we do that a lot of the time. So it's really walking through each and every step of the financial plan, making any adjustments that you'd like to see, and then giving that to you so we can progress and move forward as well. Yeah. And I think I want to add a little bit more power to what that experience is because I mean, you just picture it, right? You've never sat down with a financial planner before, you've never worked with an advisor, and all the questions in your head of "Can I retire at 67?" Or whatever that age you have in your mind, "Do I have enough money? What if there is a long-term care scenario? Are we able to afford it? Do we need to look at insurance?" All of those questions that you've been worried about and really didn't have all the answers to, they start to get answered in that visit. And we're walking you through it.
"Hey, here's the dollars coming in, here's the dollars going out, here's what we've built up to work with." And then we take it to this final spreadsheet that ultimately we start to see a huge sigh of relief from a lot of people that we work with. And it brings it all in on one nice, little sheet that says, "Here's where we are today. Here's the assets that we have, and here's how we progress down in our years." And we like to take it out to age 90, 95, 100, whatever you want to look at. And by the end of that, I would say, part one of the second appointment, you've already got someone who feels that there's been a lot of value that's been delivered because now I've got some answers to the questions that I've had for a long time of, "Hey, can I retire? What's Social Security going to look like for me? How much are we going to be able to spend in retirement?" Things like that.
So it's pretty cool feeling being… as an advisor on the other side of the table, being able to deliver that. And we're not even working with the person yet. So it sounds like a lot of information you're taking in from that appointment. How do you move forward from that? Do I need to make a decision at that point? Or what do I need to do after that appointment? So that I go back to, I say, that's part one of the visit. And we spent about 20 to 30 minutes on part one of the visit. Part two now goes into what Taylor was talking about that we have put together as far as a risk analysis. And I'll let Taylor chime in on this, but basically, she's done some work as far as understanding what is in those statements, what investments are we in, and then we also have a risk conversation that says, "Well, forget about how we're invested today. What does our gut tell us about how we feel about risk?" And, Taylor, if you want to talk to the differences that we see sometimes on how someone's invested versus how they feel like they should be invested.
Yeah. So part of what we'll do when we're meeting with you and talking about your current risk exposure and the difference between what you're currently invested in and what maybe you would like to be invested in is we'll go through a questionnaire with you to get an idea of how much risk you want to tolerate in retirement, and then we can kind of compare what you want to where you are currently invested to give us an idea of some of the changes that we might need to make for you as part of your retirement financial plan so that we can better align where you currently are with where you want to be as far as your risk exposure in your investment accounts.
Yeah. I think what we do here that's a little bit different is I always tell people, "If you've ever done this before, a lot of times there's a questionnaire you get" and it's kind of like, "Do you go to Vegas on the weekends and bet everything on one type of gamble that you would take over the weekend?" It's obscure. What we do is actually look at the numbers. So we say, "Hey, if you got $1 million and it were down 10%," somebody might immediately say, "It's not that bad" until we show them it's down $100,000.
And then they go, "Whoa, I don't want to be down $100,000." "Oh, if you're down 20%, that's $200,000." Definitely can't handle that. So we basically walk them through those real numbers. And then somebody comes up with their number and they go, "Look at this point, whatever that might be," so let's say it was 10%, "At 10%, yeah, I'm starting to get nervous, so I don't want to lose more than 10%." Well, then we take them and we show them what their real risk is on their current investments and they go, "Oh, my goodness, I didn't realize I was that risky in my investments." And then we talk about how did it go last year? I mean, "That's an easy one this year because last year the markets were down 20%." So people go, "Yeah, I was down 20%, too.
And I just didn't think about it from the dollar's perspective." And so that is eye opening to a lot of folks when we get to that point. So now, what we've done is we've kind of worked all the way through this information. And at this point is where we say, "All right. We're going to send you the financial plan. We're going to send you the data of what we've put together thus far." And now what we're doing is, is we say, "Look, we want you to take a break at this point, go home, look at what we've going to send you. And then we come back together for a strategy meeting." And the strategy meeting is saying, "How do we start to look at this? How do we that?" And I'm just going to say that we do it in a couple of different ways. One of the things that we do as a bucket sheet. And in that bucket sheet is breaks this into three buckets.
So Nick, could you kind of take us through what that bucket sheet looks like as a part of the strategy? Yeah. So, to start with the bucket sheet, we start with basically three different buckets. And usually we're typically drawing this on the board, so that whoever we're meeting with can see it in person. And visually, it's a lot easier to see. So you start with either a cash…. you start with a cash bucket, a safety bucket and then a growth bucket. And to kind of break those down step by step, the cash bucket is really anything that you feel… or the amount of cash that you feel comfortable holding.
So for everyone, that may be different. Some people like to hold a lot in cash just for emergencies. Some people are typically holding smaller amounts. So that's person to person. That's a completely personal choice. And as long as that doesn't really negatively affect the plan in any way, typically, it won't. And that's just a number that we have as part of the bucket sheet overall. That second bucket is the safety or income bucket, and that's set basically for safety or income in the future. And that's basically a few different products that we recommend as part of the strategy meeting to hold in that bucket and provide safe and reliable income throughout your retirement. And then the third bucket is the growth bucket. And that's really set to grow throughout your retirement.
The goal there is basically to have that money so that you don't have to… you can, but you don't need to tap into it throughout your retirement. And typically, that will be liquid if you need it. But really, the goal of that growth bucket is to grow throughout the 20-some-odd years. And then, your safety bucket will take care of your income during retirement. So those are the three different buckets. And we kind of basically form our recommendation around those three. Yeah. Over the years, I've been doing this for 22 years. Murs has been with me now for 11 or 12 years.
How long was it? How many? 11 years. 11 years. So we started using this bucket strategy just to make things simple. So I just want to ask you, Murs, what are you seeing from folks as we started using this as to how they get it and how valuable it is to them? Yeah, I think in one word, it's clarity. Clarity on how things are positioned, and confidence, as well as how this plan can actually function. A lot of times, again, doesn't matter how much money you got, it's one of those things where until you see it on a screen, until you see it mapped out for you, it's hard to imagine that whatever money you've built up is going to last as long as you need it to. So once we show this cash bucket, this safety and income bucket, and then this growth bucket, and help someone understand, again, personalized to them, you may have someone that…
And we see all types of situations. You may have someone that's got all the income that they need, discretionary income that they need is covered through their Social Security or their pension. So they've got a really good situation. So their bucket sheet is going to look a little bit different than someone else who has no pension and just has to rely on Social Security. They're going to need to draw on their assets a little bit more. And so being able to kind of put those three categories together and being able to show someone in a very simplistic manner, this is not… we don't want this to be complicated. Yeah, the investing side of things can be complicated. The income side of things can be complicated. But if the strategy and if the client can understand the why, why do we put money in this bucket versus this bucket, and they can talk about it in conversation to their friends and family, all of a sudden it sits very well. And I think there's a lot of power to that, right? There's some that would use a 20, 30, 40, 50-page financial plan.
And we all know what happens with that plan. You looked at it once or it's presented to you once, and then you never looked at it again because it was just too overwhelming. This bucket sheet that we end up using as a recommendation, and then as a final deliverable, it's a one-page snapshot of what your life is going to look like. And we're updating that year after year after year because in our opinion, at the end of the day, a financial plan, it's moving.
It is not set in stone. It is flexible because we know life happens, we know situations happen. And so we need something that can be nimble with that as well. All right, Morgan, we gave you a lot. Any other questions? Yeah. Well, I feel like these tools, this visualization and all these conversations are going to help you come to a pretty good decision. What do you do after you've taken all this information in? Yeah. We try to keep these episodes at around the 30-minute mark just because we don't want it to be overwhelming, but here's where we are. I mean, at this point, a person has a pretty good idea of how things are, at least, going to get started, but it is just the beginning. It is just the start of where we are in this journey to and through retirement. And so what we're going to do, we're going to come back together because I've got more questions.
I think Morgan's got more questions for all of us around this idea, "Okay, well, I'm here. You've given me all this. So now, what do I do next? And where do I go? And if I become a client, what does it look like then? And how do I take all of this hard work that's been put into building out this plan and building out this whole process? How do I implement it? And what does the implementation look like and how long does it take to implement? And how long am I going to be having this thing monitored? And what does that look like?" So we're going to walk you through that in our next episode when we all get together. Just so you know, if you're looking for that, it'll be the end of the next month, so in a few episodes.
But we're going to walk you back through all of those different aspects. So I just want to say thank you very much, Nick and Taylor, for coming on, the special guests, with us here on this episode. And your insight has been very helpful on making sure we clearly understand what it means to build a financial plan. So, thank you. Thank you, too, Murs, and Morgan, for all the great questions. All right, everybody, have a great week. We will talk to you again next Monday. We hope this video has given you some confidence and clarity as you plan for a worry-free life and retirement. But what else do you need? We have created a complementary video course called Three Keys to Secure Your Retirement. This video walks you through step by step what you need to do to get ready for retirement.
You can also check out our podcast called Secure Your Retirement. You can subscribe below. For more retirement tips, check out these videos. Also, if you find them valuable, please subscribe to our YouTube channel and give us a Like.
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Planning Retirement the RIGHT Way (with Veronica McCain)
user 0 Comments Retire Wealthy Retirement Planning
so you'll pick me up tonight
at 7 45. yo well no I got a few things to take care of first but
why don't we make a quarter to eight I'm 45. live from Joe's mom's basement it's
the stacking Benjamin show [Music] I'm Joe's mom's neighbor Doug and good news
today is all about getting your way which is my favorite here to help us work out our goals
and find happiness we welcome retirement coach Veronica McCain for our Tick Tock minute we'll
discuss tips on getting your vocab right to succeed in the corporate world in our headlines
why is it that instead of money at the end of the month the month seems to go too many days for
our wallet we'll share an explanation from one popular publication plus we'll throw out the Haven
Lifeline to Lucky stacking Benjamin's listener Jim who wants to know what percentage to put into his
Roth IRA and then I'll share some heartbreaking trivia and now two guys who like to color way
Outside the Lines the Philistines it's Joe and oh [Music] and a happy Monday to you stackers nice open
duck you know given your history I think that was fantastic we got a great show today fantastic
show Veronica McCain is here I can't let that go what do you mean given my history I am Flawless
day after day show after show let what go I don't know what we're talking about Veronica giving
my history great open given my history Veronica McCain is here today she is a retirement coach
and uh oh gee we don't get enough time to talk about just retirement so I'm I'm super happy we
get to do that sweet I'm gonna retire after this Marathon recording episodes podcast for the
last freaking week and a half so you can go on vacation so like yeah by the time people hear
this I've had a wonderful vacation in Spain which meant that uh that yeah we've been talking to
each other a fair amount lately however we got a fantastic show today not only Veronica became
we got a fantastic Tick Tock minute super happy headline today comes to us from the Wall Street
Journal the oh gee sorry the Wall Street Journal The Wall Street Journal are they like the Ohio
state of newspapers forgot to put the emphasis in the right place and they get angry those Buckeyes
no it's the Ohio State I thought it was just oh no no it's the this is from the personal finance
section it's written by our friend Veronica dagger a Veronica writes why it's now easier to
underestimate your expenses and overspend let's dive in Veronica writes many people have a gap
between what they think they spend and what they actually spend this gaps wide recently is the
financial and psychological effects of higher prices further strain people's budgets Elevate
inflation is rippled through Americans wallets for more than a year now some have cut back While
others have increased their spending to keep up credit card balances were staying relatively flat
for a while but have jumped higher recently oh gee you and I let's take it from here I think
that this is a year where it's crucial to have your finger on the pulse of what your expenses are
you know you hear people joke about eggs you hear people joke about the grocery store of course for
a while there you saw the gas pump that seems to have leveled off at least where you and I live but
I think if you don't have your finger on the pulse you're just gonna have less money at the end of
every month well the availability of credit cards and accumulating that Consumer Debt really makes
it easy to continue to live the life that you want to live even if the cost of living has increased
a little bit because you don't feel the pain of that right away you know it's like that kind of
slow death by a thousand paper cuts type of thing it's like you have a little bit of a balance that
carries over then you have a little bit more of a balance that carries over and a little bit more of
a balance that carries over and so that's a really good really good signal I think is if you if you
go month to month and you're not paying off your Visa bill every single month or if you had been
and now you're not yeah that's a good trigger to go like whoa what changed here that'll snowball
pretty quickly listen to this statistic just to tell you how many people are not paying off their
credit cards Veronica writes in the fourth quarter of 2022 the average household's credit card
balance was nine thousand nine hundred ninety dollars up nine percent from a year earlier nine
percent higher it's a huge big number according to wallet Hub customer Finance website meanwhile
the average credit card interest rate of course rose with spread right yeah uh to record high of
about 20 percent last week according to bank rate those are some there's some big downsides for
not tracking your expenses yeah thinking about the math on that real quick it's like okay ten
thousand dollars at twenty percent you're spending 150 100 you know 200 a month of Interest that's
not going to pay that off if you think okay well I make 80 grand after taxes bringing home you
know 60 after taxes and health insurance and 401ks and all that sort of stuff that's a solid
chunk of your annual budget that's just going to interest payments that doesn't really accomplish
anything for you so if you're one of those people that that balance is increased on I think it's
really important to figure out how to tighten I think one way if you have an accountability
partner a spouse a friend that you're working with I really think this can be way easier than people
think that it is Cheryl and I just have a weekly meeting we meet for 20 minutes it's over wine or
over pancakes depending on what time of day it is it's not complicated we just look through it OG
and I think it can be that simple it doesn't have to be you know you're using what you know I love
the tiller money app I think it's fantastic how it takes a spreadsheet and downloads everything every
day and you've got whatever numbers you want you can plug those into your spreadsheet and get it so
you can slice and dice however you want I like the cube app as well we of course have lots of fans
who use YNAB as a great budgeting tool but it's not really it doesn't even have to be that hard
it just has to be having just a finger on on the pulse like where where's our money actually going
you know it might have been you who mentioned it years ago oh gee it could have been Paula pant but
but a lot of people feel handcuffed when they feel like the advice is look at your budget every
month and decide all the details that you're spending on and I think that's one of the things
that intimidates people or just is a huge Downer against budgets I don't think you have to do it
forever and ever I honestly think you set up a budget we use whatever template you want to use
make your own or use some of the ones that Joe mentioned and then you check in on it for let's
say the first six months or eight months however long it takes you to establish habits for just the
way you live just the normal everyday stuff and then once you've sort of curtailed yourself from
essentially taking out a loan to buy that pair of pants or that whatever that thing is you think you
need uh I don't think you need to check in on that budget that often I think it's I mean honestly
I'm checking in on mine every maybe six months to a year I think that I think the big Point here
Doug with inflation having gone up as quick as it did the point is to have these early warning trip
wires that if you're not going to check it that's fine but you got to have a tripwire that alerts
you then that stuff is real and it's different than it was three months ago because to OG's point
if you don't catch it early this gets Beyond you I mean but Wells Fargo's PR team finally getting
getting ahead of the story here and got themselves in this piece listen to this I like this money
grows much faster than most people expect because interest is not interest says Michael learsh head
of Wells Fargo and companies advice and planning center it's a great quote a similar concept
though applies to inflation prices rise and if inflation remains high prices continue to grow on
top of already inflated prices leaving people off guard quote people get constantly surprised that
their money isn't going as far as they thought it would and in fact the cost of eating out and going
for drinks continues to take Dina lion aback even though the 36 year old married mother of one's
dining out and ordering in far less than she did a year ago some prices still give her sticker
shot she says the difference between cooking at home about ten dollars for nice pasta and quick
sauce from canned tomatoes versus Italian takeout for now 50 bucks is astronomical said Miss line
who lives in Brooklyn I think those trip wires are are what you if you're not going to set it up
Doug well let me ask you this I mean given your history with money how exactly do you set up your
own tripwires so we focused all of our spending on One credit card I have a rough idea every
month of what that that number should look like at the end of the month and if it's significantly
higher I kind of raise an eyebrow and then I start scrolling through transactions and realize okay
those are all legit time to cut it back that's my trip but you know then where to cut well then
I start to it's usually uh the same thing for probably 90 percent of Americans Amazon but uh
Amazon could be anything though I know that's such a brilliant way for them to disguise what you're
buying that it just says Amazon yeah because you're like there's no way I spent forty one
thousand dollars on Amazon last year yeah you did like well what did I buy wouldn't you like to know
right I bought Fruit Loops and a backhoe exactly but yeah then I just dig in a little bit if if
the number is significantly higher usually when that has happened it's because of a couple of
big purchases and I know right where it was and um I know that that big purchase isn't going
to happen again the next month it's you that for me that's usually what it is it's not the
trickle effect of Amazon it's usually some big some big Bill I had but uh yeah that's that's my
tripwire yeah I just know that given your history that we really need to make sure that um people
hear the story you are harshing on me today what is happening what am I doing I don't give up
your history and what then you you yeah yeah harsh on my open what is going on I don't I'm just
saying that given your history there we go again I think we need we need to make sure that people
hear the story like it's a it's a great tale hey uh speaking of great Tales time for a tick
tock minute this is the part of the show where we either have some Brilliance from the people at
Tick Tock or we have hashtag brilliance from those very same people uh Doug which one do you think
we got today this one's legit it's solid yeah well more solid than my backdrop which is just about
fell over I love it how people are about to see they're about to see all the canned goods here
in the basement when your professional backdrop goes bye-bye I think you're correct doug because
oh gee today what we're going to talk about is how to succeed in corporate life how to how to
figure out the right things to say let's listen one of the most important skills you'll need
to learn if you want to be successful in the corporate world is how to speak like an absolute
[ __ ] week and a great way to do this is just to totally ignore the basic principles of
English grammar so first take a random noun and then change it into a verb so a word like
idea becomes ideate then take that new verb and turn it back into a noun so id8 becomes ideation
then take that now and change it back into a verb so ideation becomes ideation Inc finally take the
new verb and change it into a meaningless seven word cluster an all hands Blue Sky ideationing
session then sit back and wait to be promoted right that immediately it's pretty
funny after your blue sky ideation session you're you're good that's pretty
funny brilliant Joe tell them some of the we've got some of that same kind of
corporate phraseology here that that just develops organically just happens we have
we've come up with our own lexicon here uh OG we need to talk to you over by the can
peaches we say that you're getting canned first time Doug got canned he thought it was a big
deal oh God I was remember that yeah I was I I had Joy I mean uh tears in my eyes and when it's nice
outside so you know we want to leave the basement we meet up by the clothesline which we call Doug
getting hung out to dry there it is we didn't need the bump this is serious work OG we're all trying
to get promoted here hey coming up is a woman that I don't think we need to promote a lot because
when it comes to retirement planning people take it way too cavalierly oh gee you know this
better than most people spend more time planning their family vacations than they do planning their
retirement which shows why so many people are not successful at retirement planning well Veronica
McCain worked a full career and then realized that as a second career which we may talk about as well
she was going to become a certified professional retirement coach and a charter retirement
planning counselor after 31 years of Public Service work decided you know what time to do that
other thing that I've really really wanted to do so she founded Savvy retirement coach with the
mission to provide holistic retirement planning Concepts focused on self health and wealth we're
going to talk to Veronica here in a second about doing a better job planning retirement but Doug to
get there I think you've got some history well I think of it as trivia you call it history
tomato well given your history of doing the trivia I think we should just have the trivia now
there's some massive punchline coming I can tell I don't know what it is but okay fine here's
the trivia Joe hey there's stackers on Joe's mom's neighbor Duggan did you know that on this
day in 1956 Heartbreak Hotel by Elvis Presley became a number one hit the Smash Hit was written
by the Queen Mother of Nashville Mae Boren Axton and Tommy Durden Axton played a recording of
Heartbreak Hotel for Elvis at a disc jockey convention in Nashville and the rest is history
so since we're on the topic of hotels I got some hopefully not heartbreaking Hotel trivia for
you my question is if you're evaluating hotels as an investor what is the difference between
these statistics average daily rate ADR versus average published rate or APR I'll be back right
after I asked Joe's mom to celebrate Elvis by making me a peanut butter and banana sandwich
while I tee up Heartbreak Hotel on my Walkman Burning Love Joe's mom's neighbor Doug and we are
commemorating the anniversary of Elvis Presley's Heartbreak Hotel becoming a number one hit on
this day in 1956 with some Hotel related trivia so my question was if you're evaluating hotels as
an investor what is the difference between these statistics average daily rate versus average
published rate in maybe our most thrilling trivia question yet try to stay awake non-hotel
investors the average published rate is believe it or not this is going to be amazing are you
ready I'm just settle down because I know the excitement is building it's the amount a hotel
asks for rooms well the average daily rate are you ready for this I know you've been waiting
by your device all day just trying to figure out what this definition is that is the amount
they're actually getting paid for the rooms if you're a hotel investor this is the opposite
of boring because if those numbers are close together it means the hotel is in demand and
if they're far apart you know maybe not so much maybe I should suggest our writing team retires
So speaking of retirement Let's help you get there permanently it's time to learn how to create
your retirement your way with Veronica McCain and I'm super happy she's here at the card table
with us Veronica McCain joins us how are you that you're here because we're about to talk if
this goes according to plan we're about to talk about all the things that you and I think people
should talk about during retirement but often kind of gloss over because they're you know just don't
get me wrong we're gonna talk about the money too but it's about more than money but as a way to
get there Veronica I've always believed that if you want advice it's helpful to get it from
somebody who's kind of walked that path right when I was a financial planner I had been one
in a long time but when I was the fact that I worked with 200 families and I'd seen retirement
over and over and over again should give people a little bit of comfort that yes you want to do this
once I've done it a bajillion times but but I had not at that point ever retired you have actually
retired tell me about that do you remember the countdown to your retirement oh yeah definitely
I mean I remember when I was working you did you know you do the usual countdown on your calendar
kind of exiting out the days until it actually hits and then that when that day comes I think
you get a overwhelming emotions because then I realized you know I'm leaving my work and my work
was not just work for me I actually had you know work family what did you do by the way I worked
for the federal government so I was a associate director over several various departments within
an agency a very small agency about 300 people but um because you're a small agency you kind of
have to sometimes do a lot so oversaw a lot of different departments yeah so so you have this
flood of emotions where the emotions about loss were they about excitement I don't know is it now
all the above is it purpose yeah I kind of had an idea sort of what I wanted to do so I kind of knew
what path I was going to take once every time I know it's going to go into some type of coaching
field didn't know exactly what way I was going to go with it at first I thought maybe more in the
Executive coaching area but then as I thought about that more it kind of gave me flashbacks for
work so then I decided to get into more of the the retirement because people were asking me so
many questions about you know what do you do and what you retire how do you feel your days and that
kind of thing so um you know as I was approaching looking into the coaching area I did look at
retirement coaching and I said oh this will be an interesting field to pursue because I like to
motivate people to have people get excited about their goals and what they want to do in life and
I like the kind of the financial side as well so um you know that's why I decided to kind of lean
more toward the retirement coaching but getting back to when that final day came yeah I think
it was when I had the actual retirement you know sometimes that work to give you a retirement uh
party and you see everybody and they're like uh say something say something and then when I got up
to say something all of a sudden I started feeling like I was gonna cry yeah I was looking out at
everybody and I was like wow I'm you know this is this is really the end um even though I had
something you know like I said to look forward to going through I didn't expect that emotion to
come over me like that but it did and I think a lot of people experienced that when the final
day comes of their retirement there is like a I don't know I mean it's just morbid but there is
like a death I mean you're it is it is your last cake right right you've been to see other people's
cake but all of a sudden you realize this is your last slice yeah it is that that's exactly what
it is it's kind of you know that you're gonna try to keep in contact with the people that
you work with and try to have some kind of relationship but it does change it really does
because you just you know everything usually that you talk about with people at work is work related
stuff and over time when you retire that kind of goes by the wayside with you so do you feel like
we're too Cavalier about that about that process about the uh you know the fact that we're going
to have these emotions we just think oh I'll deal with it when I get there yeah I think a lot of
people are just so caught up and I'm going to be retired I'm going to be tired I can do whatever I
want it's so exciting or whatever so yeah I think you don't really feel like that you're going to
have those type of emotions I think you just feel like you're going to go to this next chapter
in your life and it's going to be oh this this burst of excitement and it is I'm not saying that
you're not going to have it but I do think there's also a period of of where you kind of adjust uh
to you know what you've left behind in your job and your identity and all that with that and
then going forward pursuing what what you had to look forward to in retirement so it's kind
of a mixed bag those first couple of years you tell your own story but you also tell stories
of a few other people in the workbook one is a woman named Susan Susan seems a little lost
can you tell our stackers about Susan Susan is the one who the days and the walls were kind of
closing in yes yeah yeah she was the one person in the book that I talk about and the people
that I talk about the book are actual people that I coach I just use different names and
scenarios names change to protect the guilty yeah she was kind of diverse and this is a this
is a lot like when you're working you're kind of looking forward to those days that you have off
where you can kind of do some things that you want to do but then when you retire and it's every
day it gets a little daunting if you really don't have an idea of what you're going to be doing to
for your days your day-to-day life I think is the hardest thing that most people struggle with when
they retire they have some huge aspirations maybe of traveling or doing that but once they're
sitting in their house house on a day-to-day basis and in the you know the walls of you know
has kind of quiet and not a lot going on you don't have that routine of going to work anymore
it's kind of like what do I do on a day-to-day kind of thing and that's kind of challenging but
what Veronica separates your workbook from a lot of the retirement discussions I've seen is that
you take this day to day and challenge all of us to think really bigger about our life like I got
this feeling even in the beginning Pages as you're telling the story that well let me just quote
you you wrote a big void needs to be filled in retirement but it should not be filled just with
things to keep you busy like this is not just a March to the Grave this is a whole different
piece of your life and it shouldn't just be about rearranging the salt and pepper shaker every
day or you know figuring out that the dog needs to go for a walk like you challenge us to think
a lot bigger about this period exactly it is an exciting time for you to think bigger about your
life because it's probably the first time in your life that you're actually able to do what you want
to do on your own schedule and hopefully have the finances to do that so I think it's more than just
trying to fill your days with just the stuff to do and I think a lot of times when you first retire
if you don't really have an idea of what path you're going to go down once you retire that's
what you start doing you start trying to just okay let me do this do this and do that and you're
not feeling you're still not feeling fulfilled so I'm hoping in the workbook I give you exercises
to help you because people struggle with like what does this mean purpose meaning fulfillment
or whatever yeah those are I think sometimes big words that we use but I hopefully going through
some of the exercises in the book you will be able to figure that out by going through the exercises
and then trying to say okay well what do I really want to look for as far as my next chapter in my
life of what I want to pursue and what I want to do more than just these little small things that
are keeping you busy I get uh coaching from a group called strategic coach long time stackers
have heard me talk about them before but we have we have a workbook similar to yours with these big
questions about leadership and about coaching but you do the same thing here with retirement and
this is not guys this is not a long workbook but if you're doing this right it may take you months
to fill this stuff out because I could see myself Veronica peeling off maybe two pages and really
because the thought that goes into each page of this is really the important part well let me give
everybody some of the tips from the book that you have early on because you have workbook pieces
and then you have some tips here's some tips early on for when you first get to retirement to
kind of send you on this path while you're filling out the workbook schedule activities you enjoyed
during when you took time off from work journal and reflect on your expectations of yourself as
a retired person I love that word Expectations by the way read books and articles listen to podcasts
and a variety of topics to discover what most interests you now and volunteer for different
organizations to discover how you most enjoy helping people and helping help being out it feels
to me Veronica like you're challenging people also to don't be afraid to explore like go go try
stuff expecting that it might not be a fit exactly that's exactly right Joe I want people to not be
kind of Trapped into thinking they have to have everything planned out to just go out and just do
things that they find intriguing or they interest them and then from there they can determine what
they want to continue to pursue what they don't want to continue to pursue but don't don't limit
yourself on what you what you think you should be doing or how you should be doing it this is a time
for you to be adventurous and explore at different Avenues and things that interest you and a lot of
times that's kind of a hard thing to do for people because they've lived this kind of structured life
up to this point with work and all that and to try to say oh just go out here and do whatever and try
to figure it out it can be a little intimidating like whatever what yeah yeah so I'm hoping that
the exercise in the book gives you clue you know kind of cute used to okay these are some things
volunteering doing some other things that you know she thought about what maybe when you were
younger and didn't pursue kind of go back to those times of those thoughts and and try to figure out
if there's um things that you want to pursue now so yeah it's it it's funny because I I really
went through this crisis where I felt like not just there's a lot of stuff not interest me but
but I'm like okay I want to get involved in my community I want to get involved in organization
but but which ones I don't this could sound very horrible Veronica but I just didn't I just didn't
care about any of them and then I realized that it wasn't about that I need to just go get involved
and when I found out and ultimately at first it was the Arthritis Foundation I got involved
with I found out about juvenile arthritis I found out about all of these things happening in
the arthritis Community I got involved in walking trails around town and I realized how walking
trails uh not only your Healthy Living but beautify a city but they're also very inexpensive
ways for cities to raise property values like I learned it by exploring exactly what you're saying
to do in the book exactly that sounds so great Joe because that's exactly what I'm hoping people
would do once they start retiring just like you said you did you just started going out and doing
things and as you started doing those things you learned so much and it got your interest even more
into whatever activities you were pursuing the one thing that people have to realize when they retire
you have to be just to be intentional you have to go out and do it it's not going to come to you and
a lot of times I think you know when I'm working uh coaching with clients they're like well I don't
know I don't know I'm like well you got to go out and try you can't it's not going to come to you
you've got to go out there and pursue it and once you do and when you know you will see oh okay this
doesn't just me or this doesn't interest me but you've got to go out there and do it can we talk
about that what you just said about you kind of kicking people in the butt and and kicking them
out the door to go you know like my mom used to say don't come back inside until that light turns
on you know we we back when kids went outside side maybe I'm dating myself there but you end
almost every chapter of this workbook with who are going to be your accountability Partners it
seems to me like accountability partners are a big piece of this tell me about how you how do you
find these people Veronica maybe just before you retire yeah and sometimes say you know who they
can be they can be trusted friends and and people that you know I think sometimes there are people
that are asking you questions about yourself and are intrigued about you as an individual but you
do have to find sometimes an accountability person because in retirement there's nothing pushing
you to do anything and if you don't sometimes have somebody that you can hold accountable and
if you can't find someone within your your network I would advise you to look for a coach because
that's because what they can be as well pursue look um for a retirement coach or a life coach
or or someone in that field because they can be your accountability partner but if you're finding
that you're struggling trying to get stuff done and you're not really getting out there or you're
bored and you're restless and you want to not get some pickup and you're like you definitely need
to look into getting somebody to be accountable and help you because I even have coaches that I
work with and I'm a coach yeah yeah me so it's just something that just like I said it helps
you keep you accountable to someone to keep you motivated to do things I think that kind of
like you Veronica I just get this feeling that uh with my coach if I say it out loud to Mary Lou
it means I gotta go do it like that if somebody tells you or if you tell your coach then you
then you have to go do it I want to stick with this theme of uh friends and family a little bit
because those might be some of the people you're bouncing stuff off of but you also say if you're
having trouble finding your sense of purpose that friends and family might be a good Outlet yeah
and that's what I found for me that's why I said I want you know I knew I wanted to go into coaching
I wasn't really sure which way I wanted to go and the reason why I decided to be a retirement coach
is because friends and stuff are saying you're good at coaching and talking about this retirement
stuff or whatever and I'm not like you should do something with that and that's why I pursue
becoming a retirement coach but I think oftentimes friends and family see things within you that you
don't even see yourself they recognize talents and things that you have that you're like oh okay
you're right I do enjoy that you kind of brush it off and maybe not pay attention to where they
might be and I think when you're listening to your friends and family you have a tendency because you
trust them to listen to their guidance a little bit maybe more than somebody else that doesn't
really know you so I say I always lean into your friends and families to help you if you're
trying to figure out maybe you know some things you might want to do they might say well you're
good at organizing or you're good at accounting or you're good at this or whatever and they might
give you some cues to help you figure out where that next chapter is going to be in your life in
retirement so definitely look for them for that I like the fact that you go through a lot of
this first about about purpose and value and meaning before you get to the money in chapter
two because your chapter two then really is structured around okay now that you know that we
can focus on spending money where it's important and saving money where it's not and hopefully I
have an idea there you start off with some good tips you talk about traveling a lot of people
in retirement want to travel uh you say to be a conscientious traveler what is what does that
mean yeah everybody always says when they retire they want to travel and then all of a sudden
they just start going places and not really thinking of where they really want to go and why
they want to go there I kind of had to regroup because when I first retired I kind of I think
everybody does that you go through that I just want to get out and go go go go go go and you're
just going everywhere but you're spending money going everywhere and so you want to kind of
maybe reel that back in it's okay to have that little brief period of doing that but you want to
reel that back in and really think about you know where is it where do I really want to go why do
I want to go there what do I want to experience once I get there make sure you're spending your
travel dollars on things that are value to you and make yourself more conscious of the type
of traveling you're doing I know I did a lot of girlfriend getaway travels you know spy and
all that and that's great but I really want it I want to explore the world that's what I really
want I want bigger trips and so you know you need to just be conscious of what your goal is as far
as you're traveling and where you what you want to see and make sure you're you know you're putting
your money into that type of travel versus just doing things yeah yeah what I really like that
you shine a light on is now that you're retired you can really lean into off season and one thing
that's not in your workbook that I love about off season that Cheryl and I have found because she
is a somewhat flexible job and I could travel whenever man off season you get more of the local
experience because the places aren't full of a bunch of tourists people are more likely to be
able to linger and talk to you like off season is great but to your point you save you save a
bunch of money there too exactly and I travel now that's all I do is try to travel off season
because just like you say as far as you want to make sure with your dollars that you're spending
them in a conscientious way as far as when you're traveling too going off season I feel like those
retirees the best time for you to travel because you really get a feel for everything without
the crowds and like you said the pricing is better you're able to enjoy it in a different
way what are some other ways that new retirees and people that are stackers that maybe are are
getting close to retirement can think about areas where they might be able to save money besides
on discount or off season travel at first I would just look in your budget overall of what you you
know you have developed as far as your I think everybody should be tracking their costs before
they retire and coming up with a overall budget um what they think their retirement is going
to be but some of the things you can look at is cars you know the insurance and things of that
nature look at that to see if there's ways you you can save on that once you retire there's
also lots of discounts and stuff like we were talking about off Seasons but also if you kind of
pursue looking you know if you want to go to Parks or whatever whatever your um interest might be
looking for ways you can get discounts on things of that nature and just be aware of any ways you
can save money with traveling it's just a lot of different ways out there too for other things as
well two big ones I really like that you had uh if you've got two vehicles you might be able to go
to one you know think about what you think about Transportation evaluate your life insurance do
you need it anymore are you financially solvent enough where maybe you could get rid of that and
then a medical one which I really liked was hey this medical thing is going to get expensive
stay healthy which also gets you out of the house I feel like Veronica again you're kicking
people's butt out of the house I definitely with the medical and the exercising and now that you've
got all this time you've done definitely can get a nice physical routine into your everyday life
just simple walking I know I take morning walks every morning and not just for exercise but for
meditation purposes for me as well but yeah we all know the medical cost is a big expense when
you retire and we also know that you get more you know seditary in your way you're not as active as
you were where you were working so I do recommend that you do have a physical fitness routine for
yourself when you retire to keep yourself healthy so you can reduce those medical costs because
a lot of the Medical classes stuff you can prevent yeah and things that you could be doing to
prevent you get but you got to start early on your retirement and start doing things to keep yourself
healthy when we go to the doctors at a certain age you're all getting those oh you're close you
know borderline there's water flush that and stuff it's time for you to really you know we're at that
point you can do things within your health to keep yourself more healthy so yeah yeah definitely I
look at a hamburger now and my cholesterol goes up I just look at it I don't know how that medically
happens but it's crazy that is we all we all know that feeling with people that own their house
you have a section of your workbook to go through Renovations on your house and thinking about
your housing situation this is the number one area in our budget our house what are some of
those key considerations about our housing we should be thinking about yeah a lot of people
like especially if they want to stay in their houses should look in as far as their as I call
Aging in place in the houses and look how well their house is going to be able to support them
once they start aging and look at you know I have a checklist in there of things that you should
look at as far as your stairs and your appliances and just repairs and stuff that you might need
to do to your house as you start getting older those kind of costs if you're not prepared for
them can wreak Haven on your retirement budget so if your house is where you want to stay then
you definitely need to look at it like even the showers grab bars and um stuff yeah steps if
that's going to work as you get older I know with my husband he had had accident he couldn't
go up the steps but it made me start thinking you know as we age you know we're not able to go
up the steps how are we going to do it because we don't have bedroom on our main level so those
are the things that you need to really think about if you're going to decide to stay in your house
so what you need to do and kind of come up with a plan so it doesn't all hit you at once because
sometimes it does you know unfortunately it'll be unexpected like your husband's too I mean there's
no you know Tuesday everything's fine Wednesday the game's changed exactly and you need to kind of
be thinking about that especially like I said if you plan on stay in your house what your game plan
is and start trying to figure out how you can get your house accessible so that as you age it'll
it'll still suit you yes you talk about moving and about a lot of people of course think about
moving when they retire and you also talk about friendships and I'm glad that you coupled the two
of those together because one thing I've always thought and now I know we're here to interview you
Veronica but I'm going to pontificate for just a second no problem because I feel like people think
of moving wait we talked about being too Cavalier with this whole thing this especially to me is
an area where people are too Cavalier I'm just going to move closer to to my kids and what you
find is that your kids are really busy they got a bunch of stuff going on you become a full-time
babysitter but you don't end up interacting with them in the way that they want and all of
these close friendships that you developed over the last 30 40 years I'm a guy who lived for
a decade in Texarkana I moved away to Detroit for two years and Veronica we came back and not
because I have family here in quotes because all my friends are here I see some of my friends
as my friends are getting older you know I find them getting vacation houses that are far away
and we're we never get to see them anymore and I feel like this loneliness this isolation that
we put ourselves into because we think it's great like we're I feel like we're way too Cavalier
about that but anyway I will shut up I'm gonna get off my steps duel what do you think do you do
you're sad at all Joe that is exactly what people do they're very Cavalier they have this idea of
oh I'm gonna live here and it's going to be this great but they have no special connections there
yes or I'm gonna go near the grandkids and the grandkids are getting older the grandkids are
going to grow up they're not going to be here forever be little kids they're gonna grow up and
have their own things or even if they're already older they you know have their own activities and
stuff to do so that's why in the in the workbook I give a checklist you know it just even asked
them oh yeah we want you close by and I say also don't let your only connections be your kids your
grandkids or your kids you know you need to have other social connections outside of them because
a lot of people say I'm a little bit closer for the children and that might not work out so yeah
it's one of those things that I think everybody has this idea of how it's going to be yeah this
grandiose kind of idea so not true so not true and that's why hopefully when you go through
the workbook and you look through the checklist and if you do the exercises that are focused on
that you'll have a clear perspective of whether that's a great move for you or not whether it's
going to work for you and as you retire because I think it's hard harder once you get there to try
to move back so oh agree yeah yeah uh you talked about how I was a retiree now you know you're not
forced to get up and go to work you don't have to now lead the charge like you did in your career
Veronica with your department with your agency time management then becomes really important
then for retirees if you're going to get what value you want out of life so you talk about
morning routine daytime routine idea week again accountability Partners but but I
wanted to end by talking about this time management system for retirees you call it uh
postek p-o-s-e-c can you walk us through that one of the things that people struggle with
the most and I kind of alluded to that before is you had a routine when you were going to
work once you retire that routine is no more and I find a lot of times with new retirees
especially that's where they feel the most lost is there's no structure to the day anymore they're
kind of and all you know all over the place and don't know how they can spend time sometimes just
Milling around not doing anything or whatever so I want you to I you know sometimes when I tell
people you know structure they kind of you know like that's why I'm not working anymore I
don't know why not I don't like yeah well easy easy there all right if you want to try to
put me back at work with destruction my name is this is the whole purpose of retirement I thought
for me to just kind of Mill around and not do anything but I thought we find that when people
do that they get very bored so I just ask that you just think of your days and more how am I
going to start my mornings how am I going to get up in the morning get started and get going
through the day I think once you get that start up in the morning of what you're gonna do it kind
of guides you through the rest of the day but you do need to think about how am I gonna just get
my day started you know when you don't have an alarm clock to get you going every morning so yes
the workbook is is my retirement my way it's a workbook for the newly retired it's funny the way
that you go through goal setting like a 30 year old would just reminds me the purpose is important
no matter no matter where you're at in life and uh the book's available everywhere correct yes it
is yes well thanks so much Veronica for helping our stackers get successful with their retirement
it's funny we talked to a guy Wes moss in Atlanta about his book what the happiest retirees know
and it's so funny how it lines up so well like if you read that and do your workbook you're
gonna implement this and you're more likely to be one of those happy retirees so thanks for
this work no thank you thanks for having me this is Daryl from Pennsylvania when I'm not busy
arguing with a four-year-old um stacking Benjamins oh gee I love that we can talk to Veronica
for over 25 minutes and uh the concept of asset allocation doesn't even come didn't make it
doesn't make the cut we're so busy talking about what about my efficient Frontier it's all going to
change I mean not the efficient Frontier but just your emotional landscape I totally agree with her
you see it all the time you go through this this metamorphosis when you hit retirement and even get
close to it that I think most people are way too wait I guess they're not expecting it's a whole
different world I mean if you've been successful in your entire life this is the transition I
mean just inside the money concept not not all the other stuff that she was talking about right
like time and energy and all that sort of stuff but just the money piece of it transitioning from
being a good saver your entire life to being a good spender for the rest of your life in and of
itself is a difficult change so hard to make that switch and it's even harder when you don't really
know what you want yeah you're much more likely to just hold on to the money and the thing that you
underestimate is time you don't have forever to decide what you want to do would you rather have
Charlie munger's money at uh 90 or his wisdom at uh or you know what is he a hundred or something
like that is his you want to trade places with him basically no nobody would trade places with
Charlie hunger right now for all the money in the world well what if Charlie Munger likes what
he's doing I understand that I'm just saying like nobody would trade places with him because
of the time you know because he's 90 something oh like he's got billions of dollars so it's not
it's not necessarily always about the money I see what you mean but so you so to Joe's Point you'd
end up with a really really happy last two years of your life yeah that's right well it's our
it's our friend uh doc G's book about hospice you know about these people who spent their
whole life chasing dollar bills or people that spent zero time chasing dollar bills they
spend all their time going no I don't need any money and then they realize if I would have
had some I could have had better family time that's a good book hey let's throw out David
lifeline and tackle some of life's most important questions our friends at Haven life insurance
agency Doug they put what you value first I tell you what uh white breasted nut hatches white
breasted nut hatches yeah what is that that's a bird and it's also a realization that you've
become old because one day you're joy riding your frat brothers brand new car to Florida when
all he thought was you were like driving around the block and you're like we're going to Florida
and the next day you're getting out your bird ID app because some Bird shows up outside your
window what is that at least it's an app and not a book yeah true but uh and then I also spotted a
fairly rare for my area a brown merger [Laughter] both of those are fantastic names for birds and
I saw them both this morning but you know you know number one thing OG is it's an app on his
phone but the thing that makes him proudest is that it's his most used app on his phone like he
gets that report from Apple and they're like you open that Bird app a lot well thank you next
to his uh walking step counter app and the one that monitors his blood pressure he's he's also
the continuous glucose monitor blood pressure number of steps in the New Balance app
I don't see a problem with any of this to order new shoes every six months given his
history Anything Could Happen hey uh speaking of anything happening we should uh go ahead and
throw a Paving Lifeline because the answer that question Doug was your loved ones in your time
with a bird app it's why they've made buying quality term life insurance actually simple more
time to catch the brown and merger beeping out of the hole hey stackabenjamins.com havenlife now
please go there and then fast forward this 15 seconds to get us out of this bird discussion
their application's simple getting us to cover his decision their parent company Mass Mutual is
more than 160 years old so you know that they've done this before hey uh today we we I I love
Karen repine our show Runners notes for us this is uh Jim from Wisconsin calling in and Karen
says Jim from Wisconsin a real person not Doug thanks we actually have a real Wisconsin
idea is that was is it wisconsinite or is it just cheese head do you just
say cheesehead yeah I think that's the preferred term it's in their
state either Constitution hey Jim hey guys Jim here and I actually am from
Wisconsin I have a question about what percentage to contribute to my traditional 401K
versus my Roth 401k I'm five to seven years away from retirement maxing out my 401k contributions
I read somewhere that when you have saved six times your annual income you should move all
your future contributions to the Roth option what's the thought process in deciding how much
to put where I'll be looking for that shirt thanks Jim thanks for the call thanks by the
way for proving that you're really from Wisconsin uh Burton from Minnesota needs to
learn from Jim he's got to put some Midwest on that uh yeah if you're listening
from last week take a note from Jim it's a good effort Jim I'll give you that
I mean you made a You made an attempt but [Music] it didn't you don't
think Jim really talks like that but that is not a Wisconsin accent oh not
as good as yours was is that what you're saying I don't know what you're talking
about not as good as the interloper yeah Jim thanks for the call oh gee have you heard
this uh rule of thumb that he's using six times nope six times what six times something I've
never heard that gym next time something I've never heard it yeah the answer to when should I
put money in a Roth 401k versus a regular 401K is largely determined by your ability to pay the
taxes today you know you think about it if you're making a hundred grand and you're contributing
the maximum to your 401k you're putting 22 000 in your 401k this year which if it's pre-tax
is going to lower your taxable income to 78 000 before your deductions and all that other sort of
stuff that roughly is going to save you maybe four or five thousand dollars in federal taxes because
of that contribution not including any state taxes if you switch to the Roth side then that deduction
doesn't appear in your W-2 so you effectively are going to have a four or five thousand dollar
additional tax withholding throughout the year so it's you know back to our discussion at the
beginning of today your budget is going to be affected by call it 400 bucks a month if you can
afford that if you can fold that into your budget and not go into credit card debt or not have to
borrow more money for cars or student you know like if you can deal with it then obviously it's
better to pay your taxes today well not obviously but it makes most sense I think to pay your taxes
today because it's a known thing you know in the future all of that money becomes tax-free forever
and there's no there's no government requirements of withdrawals there's no government requirements
of those distributions that you have to take once you are retired it's all in all the roths side
is way way better but it comes at a cost which is that 500 bucks a month well and I think I would
think OG you know he talked about doing the Roth later in the pretext earlier I would think that
to pay that cost and to make it even more worth it because of the fact that you are prepaying the tax
you need those assets to grow much much much more so I would think that at the very least flipping
that around and doing the Roth first makes more sense like the further you are away do the Roth
don't don't do pre-tax first and then switch to Roth I would do Roth as early as I can and switch
to I mean if I'm choosing one or the other which you and I know this most people that listen to
this don't we haven't had this discussion a long time we don't think either one of these is right
we think you should be doing some of each because you don't know what the future is going to hold
but certainly or Roth first approach versus the other way around it doesn't make more sense
if you're thinking about it from the kind of historical context of your earnings you're going
to make the least amount of money early in your career and the most amount of money on the back
end right like usually that's how it works you your income continues to increase throughout
your career so if you have to pay your taxes I would rather pay them at a lower rate if possible
versus when I'm 50 and I'm making 200 000 a year maybe that's the time to use the pre-tax bucket
because of the fact that most 401ks come with company matches and those matches are also pre-tax
I think that if you can start out doing a Roth early in your career and continue to do it your
entire career you'll end up with a good enough balance of Roth 401k and pre-tax because of the
company matching contributions being pre-tax but if you're really trying to optimize tax brackets
and that sort of thing you can kind of manipulate it as you get toward those higher tax brackets
the problem with all of this of course is that we're taking a very big guess at what tax rates
are the day you withdraw the money how do we know whether or not this worked pre-tax versus
Roth well if you put the money in a Roth 401k and you take it out in the future you're betting
that today's tax rates are better than tomorrow's tax rates you're saying I'd rather pay taxes today
than in the future because the future I think are going to be higher that's what you're saying and
the vice versa is also true if you put the money in pre-tax today you're saying I think I can take
this money out at a better tax rate in the future then I can pay it today so I'm you know I'm at
a high tax bracket today I think I'll be in a lower tax bracket in the future the only way that
you know whether or not you're right is after you know that you're right because we don't have
the chart that says what are tax rates in 2037 because if we did then we would be able to
calculate it and say with certainty this is a better choice based on the circumstances
all we're saying is I think I might have a lower tax rate in the future or I think
tax rates might be higher in the future the one thing that I can say is that if Congress
doesn't change any of the rules Roth contributions Roth growth and earnings are 100 tax-free forever
so I don't care what the tax rates are in 20 years from now when I take the money out because it's
tax-free yeah if I'm gonna lean I'm leaning toward pay the taxes today be done with it that said
slots approach too by the way which is to say you got the cash today pay it today so that you
don't look at your IRA and go I've got a million bucks in my IRA it's like no you don't you have
500 000 in your IRA because half of it is for the government Doug I think this is really important
uh stuff for you I mean given your history with taxes and I have no history with taxes so I'm
good well maybe that's the point you gotta earn something to pay taxes maybe that's the point big
thanks to you Jim for the call if you would like to call and ask a question you know what we will
send you a Haven life stacking Benjamin's greatest money show on earth circus t-shirt and Jim from
Wisconsin really from Wisconsin is getting one cent his way slash voicemail gets you the shirt
and we're happy very happy to send it to Jim as I stare ready Doug as I say that I don't know why
I'm staring at Doug as I said Jim well he sounds hideous what are you talking about well it's
just I mean it's like a fiction just thing right this gym it's like the the State Farm guy that's
who you're talking to I know I think it's Jim I think somebody's having a tough day there OG well
before we say goodbye today time for our community calendar man we've got a great week over on the
stacking deed show where Crystal Hammond and Alan Corey dive into real estate Alex e Edwards is
a guy who helps uh has helped a lot of people in the southeast part of the United States
get out of intergenerational poverty through real estate teaching some real estate helps them
learn how to buy houses how to learn to do it in a responsible way he's going to be their guest on
tomorrow's show over on stacking Deeds of course our other sisters show the earninginvest podcast
doc G always has guests who dive deep into Allah into some some topic that is uh always exciting
and a fantastic and a fantastic discussion he has a friend of ours Fritz from the retirement
Manifesto coming up on Thursday Fritz is a guy who retired young documented his retirement an OG
to Veronica's Point earlier in today's show Fritz has really done it right this guy is so busy but
now doing that second career I think he serves on a couple of boards he Volunteers in the city of
Asheville in a couple different capacities one is working with animals he's always out in his
wood shop this guy has so much going on he's not sitting there wondering what he's going to do
so if you're interested more in in retirement Fritz will be over on earn invest of course here
on Wednesday the draft the NFL draft is Thursday so we've got Rob Welch he and a former NFL player
wrote a book together about going pro with your money we're going to talk Wednesday about no
matter what you're trying to go pro in how do the pros treat their money A lot of pro players about
to get a big payday on Thursday and as we already know a lot of them don't do the right thing with
that sudden money OG it goes in the wrong place that's what's coming up this week thanks so much
for hanging out with us today if you're somebody that's my kind of person and will leave a
review for people that they only know via podcast or maybe you've hung out with this
on one of our social media channels please leave a review of the show that helps us so
much helps new stackers realize what they're getting into a little different take on money
than maybe some of the other shows out there thanks to everybody who's done that Mom puts those
on her refrigerator if you're not here though to hang out with us on social media you're not here
just for Doug's trivia you're here because of the fact that you're worried about the economy you're
worried about your money and and how it works together and as a lot of those fears begin to ramp
up for people you might be feeling anxious to make some moves in your finances what I'd like you
to do instead is check out this free guide that OG and his team have put together that'll help you
plan more and panic less no matter what the market does it has some great insights on what you should
be doing and smart questions to ask yourself so that you make financial decisions your future self
will thank you for head to stackybenjamins.com guide that's stackybenjamins.com guide to get that
free guide from OG all right that is what's going on in the community man a lot of takeaways today
but Doug what are the top three man well Joe first take some advice from our guest Veronica McCain
and create your own unique roadmap to retirement second take a memo from our Tick Tock minute
to up your vocab game and Excel above the competition I'm sure you'll get promoted in no
time but the big lesson turns out five times in a row is the limit to singing Heartbreak Hotel
at the top of your lungs after that Joe's mom starts to get irritable and make threats now that
I think about it probably was the hip thrusting thanks to Veronica McCain for joining us
today you can find her book my retirement my way a workbook for the newly retired to
create meaning set goals and find happiness wherever finer books are sold we'll also include
links in our show notes at stackingbenjamins.com this show is the property of SB podcasts LLC
copyright 2023 and is created by Joe salsi High our producer is Karen rebein this show was
written by Lacey Langford who's also the host of the military money show with help from me Joe and
Doc G from the earn an invest podcast Kevin Bailey helps us take a deeper dive into all the topics
covered on each episode in our newsletter called the 201 you'll find the 4-1-1 on all things money
at the 201 just visit stackingbenjamins.com 201 Tina eichenberg makes the video version of this
show Once We bottle up all this goodness we ship it to our engineer the amazing Steve Stewart Steve
helps the rest of our team sound nearly as good as I do right now want to chat with friends about the
show later mom's friend Gertrude and Kate Younkin are our social media coordinators and Gertrude is
the room mother in our Facebook group called the basement so say hello when you see us posting
online to join all the basement fun with other stackers type stackingbenjamins.com basement
not only should you not take advice from these nerds don't take advice from people you don't
know this show is for entertainment purposes only before making any financial decisions
speak with a real financial advisor I'm Joe's mom's neighbor Doug and we'll see you next time
back here at the stacking Benjamin show foreign [Music] the after show this is uh the part of
the show that doesn't exist if you're new here what happens in the after show stays
in the after show getting back to your clothes I think that singing Heartbreak Hotel at the
top of your lungs just you know given your history might not be might not be great well
since my baby left I find a new place to dwell they're down at the end the lonely streets
called speaking of speaking of Doug's history um there's unfortunately OG a doctor
out there who has violated HIPAA rules and um got us audio from Doug's latest therapy
session and uh well I thought that as long as they broke the rule we didn't we should probably
play it look at the look OG can't wait for this he is so excited about that well I think
this is bad I think doctor shouldn't be doing this but as long as they have let's no
this is this is Doug's latest therapy session you what well you had waffles for dinner and you had waffles for breakfast so we're
gonna eat something else oh I oh I don't know sounds like you're obsessed now
you're really crying pretty good there now everybody is thinking about waffles like that
brain worm is in there and you're going to be thinking about it now for the rest of the
day well I I think I I mean I I really think that uh you shouldn't be thinking about waffles
given your history you're begging for me to ask I've resisted this whole time I'm not gonna
ask I'm not gonna ask why you keep harping on my history so OG and I saw this uh this video
that these guys said that that if you really just want to mess with somebody just end as many
sentences as possible when you talk to them with given your history just say it over and over
and see what happens and watch them watch Doug unravel the entire show they melt it is surgically
effective like it has just been driving me crazy I said it's Alyssa I don't even
remember what it was about but I just you know she was like brushing her
teeth or something and said well you know given your history and she's
like what is that supposed to mean you know just totally like around everything
to a halt just like you said yeah I think that is a bad marital move I said this will work
well with Doug I would not yeah I would not do that right before bed because you are not
sleeping that night stackers you may or may not want to try that your results May Vary but
ours ours I thought today were pretty good Doug didn't know what the hell was going on
actually now that I know it's actually more impressive that you found a way to
dodge my question the whole the whole episode you know given your history of course
yeah I'm not not enjoying your company anymore
Maximize Your Retirement Savings with these 3 Simple Strategies
user 0 Comments Retire Wealthy Retirement Planning
(gentle music) – Retirement planning
is an ongoing process that requires monitoring
and tweaking over many years to help ensure you have enough to meet your retirement goals. In this video, we're gonna cover three best practices you can implement today. If you're approaching
retirement, you may want to download our retirement
checklist to see just how prepared you really are. Just click on the link in the description for access to this free
checklist right now. Now let's go over the three best practices for retirement planning that
you can implement today. Number one, make a minor
increase to your savings rate. Boosting retirement savings
doesn't require major shifts in contributions.
Small increases can
still have a big impact. For example, increasing your contribution by just one percentage point because of the impact of compounding
may really boost your savings. Many employers will allow
you to automate your savings and divert a percentage of each paycheck to
your retirement account. Number two, extend your retirement date. The longer you hold off on retiring the more time you will have to save money and take advantage of compounding returns. A study by the National Bureau
of Economic Research found that a 66 year old who
works one additional year before retiring could
increase their retirement savings income by 7.75%. Let's say you have a
million dollars in your 401k and you max out your contributions
at $1,875 every month. A 7% annual return rate
compounded annually would mean you gain an additional $92,500 after one more year of work
and $191,000 after two years.
Number three, think long term and boring. Work with financial professionals
to find investments that are most likely to help you
reach your retirement goals. While there are always exciting
investments to consider, most find it best to think
boring and long term. Oftentimes, the more
exciting investments come with big market fluctuations. These fluctuations can cause
feelings of greed or fear which could cause you to buy or sell your investments
at the worst possible time. Small behavioral changes
can make a big difference in your retirement savings. Boosting your savings rate, extending your retirement date, and selecting smart investments,
even if they're boring, can really help you maximize
your retirement savings. I encourage you to speak with an advisor about how these strategies
can be tailored to fit your unique financial situation and help you achieve
your retirement goals.
Call us today at (602) 343-9301 or visit strategyfinancialgroup.com and click on the orange
schedule meeting button. To download our retirement checklist, click on the link in the description. Thanks for watching, and please subscribe to our page for more content like this. (gentle music).
Don’t be a Stiff in Retirement! Flexibility is Key, Learn Why.
user 0 Comments Retire Wealthy Retirement Planning
as you age stiffness settles into your joints and this can make it more difficult to move around and maintain an active lifestyle this video is directed at me maybe you but it's definitely directed at me because Jody is as flexible as they get but it's true as your body slows down and it ages and it gets stiff everyday activities start to feel more strenuous than they used to and that is not a good place to be a sedentary lifestyle only makes this situation worse we all see this too often in our clients and we want to help you avoid this as much as possible now we're working on my stiffness we are by playing we're working on your flexibility flexibility yeah the stiffness is there I'm good at that that part's there we're working on my flexibility but there's a lot of things we're doing we started playing pickleball down here at the YMCA on Tuesdays and Thursdays and we playing around Robin and that we stretch before we play We stretch after that's new for me right but it really it's an interesting so sport because there's probably 60 people there probably and most of them are older I would say all of them are 50 and older some are 66 like me and we don't see many people stretching before or after and we also see many injuries you know the woman who runs the program whose name also Jody with an eye with an eye she can't stop talking about this enough but people just don't seem to listen well last week we were playing some guy fell down and he tore his Achilles tendon and you also can get um tendonitis by not stretching you know we're we're learning more and more about stretching or I am because again you're really good at this with yoga um but it is really critical to stretch as much as you can so that you can overcome the stiffness and stay limber well into your 60s 70s and 80s you know flexibility benefits you in more ways than one it improves your movement overall and it helps prevent simple strains and injuries including muscles and disc streams shoulder strains and certainly that ever present backache that many people feel you know a friend of ours mom just fell and broke her hip and you know there's a whole concept about we're not talking about muscle today but having good muscle around your bones and also stretching your muscle is going to improve your past texture it's going to help or prevent you know Falls and injuries and it's also going to enhance your joint range of motion which is important you know we live active lives with as we've told you pickleball golf cycling you work out using weights I do yoga Power Yoga with weights sculpting classes but everything you do is more stretching but that's new for me and um you know all through my career I didn't do a lot of stretching I did a lot of like hit power like weight training actually rushed to the gym right and get to a routine it was all about doing the circuit as quick as you could to get to work but yoga and besides yoga you know you just want to make sure that you are becoming more flexible because it has benefits to your outside muscles it also has benefits to your internal organs as you twist and stretch my One Yoga calls it in my one yoga teacher calls it internal housekeeping whenever you sit and do like a real deep stretch it really helps your organs on the inside I think we should have called this video yoga for a more flexible life how's that it wasn't going to be about that but I'm happy to Pivot and talk only about yoga if you want well it is it is good that you do it five days a week and I think what I'm gonna do I'm gonna commit to when we get back to Connecticut I'm going to come to yoga one day a week wow that would be great but it's got to be an easy one not one of these crazy hard ones you know I was a college athlete and I loved going to the gym and I loved competition for the greater part of my life you know um for years as I was working and raising children you know I just fit the gym in like whenever I could you know and I lost focus on really what I was trying to accomplish while I was there well we were trying to accomplish checking off the box right and it has to be more than that because we lost Focus we didn't really worry much about flexibility until after we retired and I think that that's really the main point of this episode today is really the importance of stretching right yeah because you know it's funny when you're just fitting the gym into your lifestyle you really don't stretch before and you really don't stretch after because you have a amount of time so you jump into your class or your weights or your cardio and then you leave but now that we're retired we have learned the benefits of stretching and flexibility I preach it all the time in our house and I'm hopeful that Mark will start too I'm going to start yeah I am I can almost touch my toes now I'm working on that so let's talk about the three main types of stretching because you know just saying we should stretch isn't enough you really need to know what you're doing and you need to be careful but there's three types of stretching you can do with little or no equipment or investment of of any kind right and really if you think about it the first one is something you did way back in grade school right it's called static stretching this is where you hold a position for 30 seconds and then relax you repeat it again three to five times before moving to another stretch and the big key here is not to bounce right so not to lean over to touch your toes and then bounce bounce bounce lean over and hold for 30.
This is like touching your toes yep now I can just about touch my toes but you should get up and show them you can put your hands flat on the floor I can in front of your feet I can which is that's about this much further bent over than me which is a new kind of accomplishments which shows you that that the more static stretching you do the further you're going to go I'm feeling really inadequate right now I do you just need to work on it I'm going to I have to the second type is called isometric stretching right so this is similar to static stretching you hold the position and gently stretch your muscle during the stretch and then you hold the pose for 15 to 20 more seconds Contracting and relaxing your muscle during that time I I don't get it can you please show us what you're talking about because I don't know what it is but this give me anything this stretching will improve your strength and flexibility because you're flexing and releasing your muscle it's just like jumping jacks okay well what is there a what's the third so the Third Kind this is where you're going the third type is dynamic stretching oh that's Jumping Jacks and burpees right well kinda but not really so this involves actively moving your muscles and joints in a set Motion in repetition for usually 10 or 12 times so it's more like you know like head rolls like you want to really roll your head around and you roll your head at me all the time the other thing it could be is like walking lunges or leg swings or even hip circles the idea is to stretch a little further each time using fluid movements feeling very inadequate I definitely need help will you help me well if it's you all and you in particular are open to help there is so much research about stretching and I have to tell you I'm gonna hold you accountable for this because you just declared you'd go to yoga that which is like huge I can't wait to call Courtney and tell her you'll be there okay and um thing is the make you can actually see actually feel and you get looking forward to kind of pushing a little bit harder without bouncing in each one of them you know it's funny I do stretch using my freeletics app it is a warm-up and then I work out with burpees and push-ups things like that and there's a stretch at the end but I'm actually just thinking it's just again checking the Box well I should do this move and I should do that move but I'm not really doing it with the intent of becoming more flexible right and I think that's a mind shift that I have to have because your yoga five days a week I mean you're just incredibly limber and stretchy and I'll tell you it helps me with my physical wellness vision of not only being physical physically independent right but being able to get down and up on the floor with great grandchildren grandchildren you know and even continuing to play sports I think it's really important all right I'm gonna do this jumping jumping stretching you are yeah okay I'm gonna do it I'm gonna do it three days a week 15 minutes of stretching I'll take pictures I'm going to start I'm going to start with rolling my eyes and then my head you know like anything to get the benefits you really have to do it you know consistently and you know over time and but you will see the results when I started yoga I could barely touch my toes now I can lay my hands flat on the floor and actually the other day when we were playing golf and I was on the golf cart and we were parked I actually went down to stretch and I went below my feet you know down to a rock so but it's it's encouraging I think well listen it's something that is really important and and we know it's important I I'm not doing it and I need to do it you do which and I'm making a commitment to you to do more stretching good right now if you thought this video was great we hope you did this next one finding your path to physical wellness besides looking at creating healthy physical habits and routines we're going to take you on a journey to create a vision for your physical wellness so watch this next video next
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How Does A Precious Metal IRA Work?
user 0 Comments Best Gold IRA Companies Retirement Planning
how does a precious metal IRA work a gold Ira or precious metals Ira is an individual retirement account in which physical gold or other approved precious metals are held in custody for the benefit of the IRA account owner it functions the same as a regular Ira only instead of holding paper assets it holds physical bullion coins or bars how do gold and silver IRAs work a gold Ira works exactly like any retirement account with the added benefit that it provides you more control over your investment to include physical gold coins and bars and other IRS approved Silver Platinum and Palladium metals what will happen to Silver if the dollar collapses that is because the U.S dollar would essentially be worthless if it were to collapse in value in a sense the price of silver would be infinite if measured in terms of the US dollar is it better to own gold or silver is more volatile cheaper and more tightly linked with the industrial economy gold is more expensive and better for diversifying your portfolio overall either or both may have a place in your portfolio arguably the best use for gold as an investment is to mitigate portfolio risk what is the best way to invest in Precious Metals the best way to invest in Precious Metals is either to buy the metal outright and hold the physical form or to purchase ETFs that have significant exposure to precious metals or companies involved in the precious metals business is a gold Ira any good a gold Ira often comes with higher fees than a traditional or Roth IRA that invests solely in stocks bonds and mutual funds a gold Ira can serve as a good hedge against inflation but is also concentrated in a single asset class why should I invest in a gold IRA a gold Ira offers diversification from other assets that may be volatile during economic downturns or periods of high inflation such as stocks and bonds one of the safest Investments is gold because its price remains stable over long periods with little volatility should you invest in a gold IRA still a gold Ira can be a good option for investors who want to diversify their retirement accounts and also take advantage of the hedging benefits that the yellow metal offers against other Financial assets like paper currency and stocks many Financial experts recommend keeping 5 to 10 of a portfolio in gold for a comparison of the best gold Ira company's visit https colon slash slash www.goldira401convesting.com gold Ira company slash click Link in the description below
Discover the Ultimate Retirement Hack: Tax-Free Income 2023 Update
user 0 Comments Retire Wealthy Retirement Planning
what's the secret to a tax-free retirement
planning right now the reality is that if you're in your 30s 40s 50s and 60s you better
maneuver today the tax code actually includes several moves you can make right now to create
a future tax-free retirement income but the optimal window may only last until 2026. that's
right there's really not much time to position yourself now most people have a financial planning
strategy to defer paying taxes wherever they can for as long as possible and hope for the best
but hope is not a strategy I would recommend the problem is that many diligent savers probably
like you are sitting on substantial tax deferred retirement savings that could be a future tax
bomb that explodes in your retirement in fact America's Ira expert Ed Slott recently
wrote a book exactly about this problem you were told to take advantage of your company
retirement plan and defer taxes while you were working until your retirement when you've
been a lower tax bracket because your income would be lower well guess what in many cases
that advice turned out to be completely wrong why did you know that many retirees have less
earned income than during their working years but pay more in taxes it wasn't supposed to be
that way you know what astute financial planners advise their clients to do we create strategies to
maximize the after-tax growth and after tax income for our clients because good tax planning is not
about paying the least amount of tax this calendar year it's about paying the least amount of tax
over your lifetime it's not what you make it's what you keep if you think tax rates are going to
be lower in the decades to come then move on from this video but if you think that we are in for a
higher tax rates stick around Colin Exelby here and I'm a CERTIFIED FINANCIAL PLANNER™
Professional with over 20 years of experience providing financial planning for business owners
and their families that just makes sense I own the financial advice advisory practice Celestial
Wealth Management and provide advice virtually to clients all over the country in my opinion for
many people when you get to retirement your taxes are going to be higher than when you are working
let me say that again your taxes will be higher in retirement than when you're working let's
first learn why this is a good spot to point out important disclosures the information in this
video is for educational purposes this is not specific financial planning or investment advice
in addition everyone's tax situation is different you should discuss your tax situation with a
qualified Tax Advisor before implementing any planning strategy so why will taxes most likely
be higher in retirement than when you are working well many of the tax deductions that you have
during your working years vanish in retirement student loan interest deduction well that's gone
you've paid off those debts mortgage interest deduction that's gone you've paid off your home
mortgage probably retirement plan contribution deductions those are gone Health Savings Account
deductions those are gone child tax credits well I hope your children are grown and out of the
home at this point adoption tax credits those are gone the home office deduction that's gone and
so are self-employment deductions but for many it's likely that withdrawing retirement savings
to live on where you have chosen to defer taxes through traditional retirement plans will put you
in a higher tax bracket than when you're working that's why I call these potential ticking tax time
bombs say that three times fast ticking tax time bombs ticking tax time bombs ticking tax time bombs
that is hard ticking tax time bombs look when you defer tax payments today through a traditional
retirement plan like a 401k 403b or an IRA you will pay taxes in the future in fact I like to say
a traditional retirement plan is actually a joint account with the government not an individual
retirement account you know what's worse in most cases when you turn 72 you are required to take
money out of those retirement plans whether you want to or not and this results in required income
on your tax return just like a paycheck whether you need the money or not and if you forget to
take it out you are penalized 50 percent of what you were supposed to take out all right now that
you know what the potential tax problem is let's figure out how best to fix it in order to get
to a tax-free retirement the first step is to understand how Social Security benefits are taxed
and then work to minimize or even eliminate their taxation most of us will be eligible for social
security benefits and for many retirees they're like a nice baseline income during retirement
how much of a benefit you receive depends upon when you take the benefit and how much in FICA
tax you paid in over your working career if you haven't already no matter what your age you should
apply for your Online Social Security account No I didn't say apply for Social Security all I'm
saying is apply for your Social Security account you see years ago we used to receive a social
security statement annually from the government in the mail it would tell you the amount of the
benefit that you've accrued what ages you can apply for it and your income history and this is
important information for your planning in order to get this information now you have to create an
online account so first go to socialsecurity.gov click on the sign up button then click on my
Social Security then click create an account and if you look right now this
is the information that you're going to need in order to open this account all right now that you have the account open and
you can see what your benefits are you also want to make sure you do analysis to determine the
optimal time for you and your spouse to draw on Social Security there are a number of strategies
that can be employed to maximize the amount of Social Security that you receive depending upon
your unique situation but for many people no matter what strategy they use provisional income
makes the Social Security taxable that's right and President Bill Clinton's first term in 1993
the Social Security tax was expanded so that up to 85 percent of your Social Security payment
could be taxed well what is provisional income you ask it's one half of your Social Security
income any distributions from your tax deferred retirement plans like traditional IRAs and 401ks
any 1099 capital gain or interest that's generated in your non-retirement investment accounts any
employment income any rental income and interest from municipal bonds the IRS adds it all up and
then computes whether your Social Security will be taxable so how much provisional income can
you have before your Social Security is taxed well before we get to that make sure you hit
that little like button and of course smash that subscribe button so you know exactly when I
release the new financial planning video for this series all right as of 2022 here are the tax rates
according to the Social Security Administration if you file a joint tax return and your combined
provisional income is under thirty two thousand dollars you pay zero tax on your Social Security
if your provisional income is between thirty two thousand and forty four thousand you may have
to pay income tax on up to 50% of your benefits if your provisional income is more
than forty four thousand dollars up to 85 percent of your benefit may be taxable the numbers are
slightly different if you're single and you can check them out in more detail at ssa.gov for
a married couple in order to keep your social security from being taxed you would need to keep
that provisional income below thirty two thousand dollars now I know that may sound unrealistic but
it isn't however for some people due to a pension or a large joint social security benefit it will
be impossible to keep Social Security tax free but for the vast majority of Americans the key
is to maximize the benefits in the tax code by planning now what assets that you own and in what
types of accounts you own them makes a significant difference in your future provisional income as
well as your after-tax income all right now that we know what provisional income is how do we keep
it as low as possible in retirement well first we take advantage of the tax rates today before
they are gone many people just don't realize how low tax rates are right now but we can look back
through history to give us some perspective before I actually looked up these rates I too didn't
really realize how low current rates really are while today's top rate is 37% many of us
pay just 22, 12, or even 10 percent this chart shows the top federal income tax rate by year going back
to 1913.
Look at the rates from 1941 through 1963. the top rates were over 80 percent and most were
over 90 percent now you might say well that's just not me that's only for the Mega wealthy well guess
what the other brackets were much higher as well right now we have the lowest rates since 1992.
the 2017 tax cuts and jobs Act created some of the lowest tax rates for Americans in history but
they will not last forever to create a tax-free income in retirement it's important to understand
where tax rates were where we currently are and where The Sweet Spot is so let's take a look at
these two charts side by side the chart on the left shows the tax rates in 2017. the chart on the
right shows the tax rates in 2022 for the purpose of this discussion I am going to focus on the
married couple rates that are in the middle what you see is that for most Americans once you exceed
the 10 tax bracket current tax rates are lower the former 15 tax bracket is currently 20 percent
lower at 12 percent of taxable income the former 25 bracket is 12 percent lower at 22 percent of
taxable income the former 28 bracket is currently 14 percent lower at 24 percent of taxable income
and even the former 33 percent bracket is five percent lower at 32 percent it isn't until you get
to the 35 tax bracket that the advantage goes away but what is really interesting is the changes
to the income levels that allow you to be in certain tax brackets what I want to focus on are
the two large jumps in the tax rates from 12 up to 22 percent and from 24 up to 32 percent these
are the big jumps to be aware of when creating your strategy let's take a moment to talk about
the difference between income and taxable income most people roughly know what their income is but
they don't really know what their taxable income is taxable income is the income you are taxed on
well geez that makes sense it is the income after all of your deductions this is an important number
and can be much lower than your gross income also in this country we have what is called a graduated
tax system as you move into a higher bracket you don't pay that higher rate on all of your income
the only income that is taxed at that higher rate is the income above the previous bracket you know
what is not taxed that little like button likes are free so make sure you hit that little like
button and of course smash that subscribe button hit that little bell so you know when I release
a new financial planning video in the series all right now we are going to look at the tax rates
for married couples and if you're single get married whoops just kidding but tax rates are much
better if you are married so maybe consider it if you're single the same principles apply but you
move into higher brackets at lower income levels for the married couple the first eighty three
thousand five hundred and fifty dollars of taxable income is only taxed at twelve percent once you
have over eighty three thousand five hundred fifty dollars of taxable income you don't move
into the 24 bracket until you reach roughly $178,000 of taxable income compare that to the 2017
brackets when the income threshold for moving into to that 24 bracket was a much much lower
$153,000 you know it's really wild well wild for probably me and some CPAs who love
this tax stuff but it is interesting let's look at the difference between the current 24 bracket
and the 32 percent bracket the next big jump until you make roughly three hundred and forty thousand
dollars of taxable income you are still in the 24 bracket compare that to 2017.
You can see that you
jump into 33 bracket at only 233 thousand dollars that's a hundred thousand dollar difference
it's a huge difference and is the largest sweet spot in the tax code but how exactly
do you design your current retirement saving strategy to maximize the standard deduction
when planning for your retirement your tax deferred retirement account balances should
ideally be at a level where future required mandatory distributions or rmds as they're called
would be less than your future standard deduction got it if you missed that and you didn't
understand what I said just hit that rewind button keeping your rmds below your future
standard deduction can potentially make your required distributions tax free while also not
causing taxation of Social Security benefits everyone's situation is different which is why
custom financial planning is extremely important so how do we do it this concept is actually
pretty straightforward so let's look at a hypothetical example Marsha and Don are both 55
years old currently they are 17 years away from mandatory IRA distributions we are going to take
the current standard deduction at age 65 of 28 700 and inflate it by a historical rate of 3 percent
per year for 17 years that standard deduction will be closer to forty seven thousand dollars when
they turn 72 and are required to distribute from their IRAs so it's 72 if they didn't have any
other tax deductions or provisional income they could potentially take up to forty seven thousand
dollars total from their IRAs without any taxes but how much will Marsha and Don be required to
take well the IRS has a nice table to figure that out this table is periodically updated so you
want to make sure you're using the current one when working through your calculation if you're
married but your spouse is more than 10 years younger congratulations there's a special table
for you but for this example Marcia and Don are the same age at 72 their required distribution
amount is basically 3.65 percent of their account balance based on their divisor of 27.4 now
that we know what they are required to take out we can calculate the ideal total amount for
Marsha and Don to have in their IRAs at age 72. so how large of a 401k or IRA could they have to
distribute their required distributions tax-free drumroll please one million two hundred and
eighty seven thousand eight hundred dollars you figure that out in this calculation one
million two hundred eighty seven thousand eight hundred times point zero three six five equals
forty seven thousand four or according to the 2022 IRS table one million two hundred eighty seven
thousand eight hundred divided by twenty seven point four equals forty seven thousand they both
equal the same thing conceptually a married couple both over age 65 with no other provisional income
could have just under 1.3 million total in IRAs and the distributions would remain tax-free based
on 2022 numbers this is the starting point for figuring out the ideal amount of funds to have in
a traditional IRA at age 72.
Even if you had some provisional income like say half of your Social
Security benefits you can create a strategy where distributions are not taxed or are minimally taxed
just incorporate that provisional income into your calculations and if you live in a state where
distributions aren't taxed even better as of 2022 there are 12 states that you could live in that
don't tax retirement account distributions take that into consideration when you're considering
where to live so this example figured out the ideal number with forward-looking planning you may
be thinking okay well having little or no assets in traditional IRAs and 401ks is also a good move
potentially putting all your assets in and other account types and limiting your rmd amounts that
way well let's take a look at why this is not a good idea let's say Marcia and Don only had one
hundred thousand dollars in tax deferred IRAs and 401ks at age 72.
Their required distribution
based on the tables would be 3649 dollars they would have 43 351 in unused deductions that
would be very poor planning in my opinion to get the maximum after tax retirement income you want
to make sure you optimize the full amount of your standard deduction unfortunately many retirees
do not because my industry promotes the delay in prey strategy so much many people don't
plan properly in the earlier years you figure that optimal number out for your own situation
through these calculations First Take today's current standard deduction and inflate that by
the number of years until you reach age 72 with a future value calculator like one from this site
or Good Financial Planning software like this one from right Capital that I use that will give
you your forecasted future standard deduction when your rmds start that will be the ideal
amount that you would want to withdraw from a tax deferred Ira or 401k to minimize or even
eliminate taxation of required distributions in order to figure out the optimal amount to
have in your tax deferred retirement account you would take that ideal distribution amount
and multiply it by the retirement Factor at age 72 which in 2022 is 27.4 that will give you your
ideal tax deferred retirement balance at age 72. now investment returns rmd assumptions and tax
rates do change over time so this is the living breathing strategy that you would continue to
monitor it is not set in stone rather than delay and pray plan optimally for your future this is
a video series about creating a zero percent tax bracket in retirement but you may have other
provisional income that makes that impossible don't worry the goal of financial planning in many
cases is to maximize your after-tax income and wealth to reach your personal goals even if a zero
percent bracket isn't achievable in your situation the upcoming strategies can still be used to
drastically reduce your taxes in retirement and maximize your after-tax wealth when you do that
you reduce the risk of running out of money in retirement and you maximize the Legacy you leave
behind don't spend years accumulating assets just for Uncle Sam all right now that we know how to
calculate the ideal amount to have in tax deferred retirement accounts let's talk Roth everyone loves
Roth except maybe the government that created them more on that in a minute so why does everyone love
a Roth IRA Roth IRAs have become so successful for some that the current government is looking at
ways to cap access to them for certain people and to force distributions for others so it's really
important to be taking advantage of this strategy if it makes sense for you why does everyone love
a Roth IRA in 1997 the Roth IRA was created to allow people to put away money and forego a tax
deduction in exchange you get tax-free growth and tax-free distributions and if anything is left
over after you pass away your heirs can withdraw those funds tax-free as well the government
thought this was a great way to incentivize saving for retirement as many pension plans were
going away at the time it also allowed them to collect some taxes right away but many people
who qualified still didn't contribute people believe that they will be in a lower tax bracket
in retirement but that's a myth many people are in a higher tax bracket in retirement given the
common Nation retirement income those increasing rmds and Social Security but not everyone can have
these accounts when these accounts were created in the late 90s they were limited to Americans
making less than a hundred and ten thousand dollars or a hundred and sixty thousand dollars
jointly in annual contributions were limited to only two thousand dollars we'll fast forward to
today and now if you make less than a hundred and forty four thousand in 2022 or 214 000 jointly
you can contribute up to six thousand dollars if you're under fifty and seven thousand dollars
if over fifty and if you do qualify in order to have those tax-free and penalty free distributions
all you have to do is have the account a minimum of five years and avoid taking earnings
distributions until after age 59 and a half all of your Roth IRA contributions can generally
be accessed without penalty so they can also act as an additional supercharged emergency fund
forego the current income tax deductions of a traditional IRA or 401K deduction in favor of all
the future tax-free growth of a Roth IRA or Roth 401k when traditional 401ks and IRAs were created
back in the 1970s tax rates were much higher in fact here are the married filing jointly tax rates
back in 1978.
That's the year I was born just look at how much higher tax rates were back then it
made a lot more sense to take the tax deduction then and just hope for lower rates it's exactly
the opposite now and is another reason allocating to Roth IRAs makes sense what about when it's
time to withdraw the funds are there the same requirements as traditional IRAs and 401ks
no Roth IRAs are not subject to a required beginning date or require minimum distribution
you never are required to take the money out if you don't want to in fact you can actually keep
making contributions past age 72 if you qualify and still have earned income but for many an ideal
strategy is to withdraw Roth Assets in retirement you know why well of course they're tax-free you
know why else they don't count as provisional income and do not make Social Security taxable
this is one of the key points to a 100 percent tax-free retirement income if you take away one
thing from this video it should be that Roth IRA distributions are tax-free and do not count
toward the provisional income that can make up to 85 percent of your Social Security taxable
they are much more optimal to use in coordination with your tradition IRA distributions to keep your
taxable and provisional income as low as possible all right the second part of the raw strategy
is to take advantage of the Roth 401k wait Roth 401k did you know that most employers offer both
traditional pre-tax 401ks and Roth after tax 401ks while they are available to over 86 percent
of retirement plans according to the psca's most recent survey only 26 percent of
participants actually make deferrals are you a solo entrepreneur if you're making use
of the solo 401K you can also have a Roth 401k many solo entrepreneurs or Partnerships still
use the old SEP IRA where the only option is pre-tax deferrals I would think twice about that
in fact I created this video that explains the differences between a solo 401k and a sap Ira in
more detail check it out the biggest difference between a Roth 401k and Roth IRA is that the Roth
401k doesn't have any income constraints attached to it you can make a million dollars of income
and still contribute up to twenty thousand five hundred dollars in 2022 if you're under 50 and 27
000 if you're over 50 into a Roth 401k that is a quick way to accelerate your tax-free retirement
savings since you can contribute much more than the Roth IRA the best part is almost anyone can
do it Roth 401k contributions can also generally be accessed without penalty so they too can act
as an additional emergency fund a potential much better way to have an emergency fund than sitting
in a low yielding savings account if you qualify are married over 50 and love this idea here
is how you and your spouse could get up to 68 000 in total contributions to this raw strategy
in one year 2022 Roth 401k contributions you put in twenty thousand five hundred dollars plus six
thousand five hundred dollars as a catch-up and you get twenty seven thousand dollars for you
and your spouse 2022 Roth IRA contributions six thousand dollars in plus a thousand dollars in
the ketchup equals seven thousand dollars each total that's 34 000 for each of you or 68 000
for both all in one tax year mind blown but Colin I'll be paying more in taxes now and those
funds will not get to grow for retirement they are permanently lost wouldn't I do better to take the
deduction now and have those funds grow pre-tax this is an extremely common question and I want to
put to rest this concern right now the number one factor here by a mile is taxes the difference
between the rates you pay now and the rate you will pay later if tax rates remain the same or
increase in retirement using the raw strategy will be better it's not about inflation earnings
or the opportunity cost it is all about tax rates if tax rates are the same at contribution and
later in retirement the end result would be exactly the same let's do the math here are
the assumptions we're going to start with a ten thousand dollar contribution lifetime
investment earnings of 200 percent and an assumed tax rate of 30 percent as with any
financial planning we've always got to start with these assumptions so that's why they're
here all right here are the calculations traditional 401K contributions you take a
ten thousand dollar contribution after two hundred percent lifetime earnings equals thirty
thousand dollars thirty thousand dollars times a thirty percent tax rate as you distribute the
funds is nine thousand dollars in taxes paid so the net after tax Ira balance from that initial
ten thousand dollars is twenty one thousand now let's look at a Roth contribution you're
going to pay three thousand dollars in taxes up front right because you have a ten thousand
dollar contribution going in times thirty percent so you pay the three thousand dollars
in taxes now you have seven thousand dollars to invest seven thousand dollars after two
hundred percent lifetime earnings grows to twenty one thousand dollars the exact same amount
that is because it's all about the taxes and the taxes you pay in the beginning versus the taxes
you pay at the end Joel Dixon Vanguard groups head of Enterprise advice methodology told the Wall
Street Journal in 2019 that the only factor to consider is current tax rates versus future
tax rates with Roth IRAs and Roth 401ks you will never have to worry about the uncertainty
of what future tax rate increases could do to your retirement savings and because distributions
are tax-free they also can lower your retirement income to a level where there is less of a chance
of hitting the Medicare premium surcharge known as Irma and it can keep your Social Security tax
free for most Americans but especially those who are in lower income brackets say 24 and below
I think this is a significantly underutilized benefit if future tax rates rise creating
a balance between tax deferred balances and tax-free balances gives you flexibility as
you approach retirement I love flexibility I would strongly consider an approach where you
take advantage of both the pre-tax traditional 401k and the post-tax Roth 401k contributions
you can actually figure out the ideal amount to contribute to your pre-tax 401k and your
post-tax Roth 401k with some basic calculations to create your optimal tax deferred retirement
account use a future value calculator like one from this site or Good Financial Planning software
like this one from right Capital that I use you would input your current balance the amount of
years until you reach age 72 your annual rate of return and then try different annual contribution
amounts plus employer matches until you reach your optimal tax deferred retirement balance
then you can subtract that annual amount your portion of it not the match from your annual
contribution limit to determine the amount that should go into the Roth 401k side once
you've maximized this strategy if you qualify you would want to make your annual Roth IRA
contributions this can help you create your very own zero percent tax bracket in retirement
by taking advantage of today's low tax rates wow that is a lot of information that I just
covered but the raw strategy is so powerful I want you to understand it in order to maximize this raw
strategy currently you can convert an unlimited amount of assets from traditional IRAs to Roth
IRAs if you pay the taxes now now there used to be an income cap but that tax law was changed
back in 2010 to allow anyone the opportunity to convert that huge Advantage may be slipping away
while we are still in these lower tax brackets and while conversions are unlimited it may make a
lot of sense to convert assets and pay taxes now are you in an artificially low income tax bracket
because you sold your business you semi-retired or are in between jobs are you under 40 building your
career and still in a low income bracket are you higher but not yet claiming Social Security are
you over the age of 59 and a half but younger than 72 then you my friend are in The Sweet
Spot for Roth conversions you pay some tax now but then have tax-free growth and distribution
in retirement while building a tax-free Legacy for your heirs in my opinion there is not a better
time than now to explore how a Roth conversion can help your financial situation well actually there
could be a better time as I release this video the stock market is trading just off its record highs
but if markets were to fall more significantly it makes the strategy even better you know why you
can convert assets while markets are down pay the tax then and then get the growth tax-free
on the way back up for those who converted in 2020 during the covid pandemic they look like
Geniuses right about now from February to March of 2020 the S P 500 fell roughly 35 percent what
if at that time you had your IRA you converted the assets while the markets were down and then
as the market has rallied back and even Beyond where it was all of those gains are tax-free
all into the future I mean if you did do that kudos to you but that's the type of strategy I'm
talking about and that could be the optimal time to do it it's always tough to pay tax now I get it
trust me I want to pay as little as possible but if the trade-off is pay a little bit now to not
pay tax in the future I will write that check all day long but the real kicker here is that Roth
IRA distributions don't count as provisional income so they can't make your Social Security
taxable I'll say that again Roth distributions in retirement do not make your Social Security
taxable now most of us will have social security income assuming that it's around in retirement
the delay and praise strategy employed by many allowed us to build up large pre-tax 401k and
Ira balances if you do nothing when you retire and take distributions those distributions will
most likely make your Social Security taxable the key to a 100 percent tax-free income in retirement
is to begin positioning yourself now by converting assets systematically over time you can create
a Roth IRA balance that can be withdrawn on your terms not the governments without taxes
and without making Social Security taxable so how do you pay the tax on a conversion in
most cases Roth conversion tax will need to be to pay the tax that's generally why it's best
to split up conversions over multiple years and this is also the big biggest reason why more
people don't do conversions it's nearsighted if you don't pay the tax bill now while you're in
these low tax brackets you and your beneficiaries will most likely pay even more tax later on all
the future growth and withdrawals as they push you into higher tax brackets another point to
remember is the five-year rule if you are under age 59 and a half and convert assets to a Roth
IRA the assets that are converted must be held for five years before any withdrawals can occur
otherwise you are subject to a 10 penalty now if you remember from Roth IRAs in the other videos
contributions can be taken out without penalty and without taxes these on these conversions must be
held in that Roth IRA for at least five years so when can you pay the tax from retirement assets
well if you're over 59 and a half you see at 59 and a half you can withdraw Ira assets without
the 10 early withdrawal penalty so you could do a conversion and then withdraw more assets to
pay the tax you have to be careful not to push yourself into a higher tax bracket though with
the extra withdrawals to pay the tax that's why in my opinion the best way to convert is to pay
the tax with non-retirement funds in my opinion now is the time to consider converting your IRA
assets but conversions aren't for everyone when doesn't it make sense here's a quick rundown of
when a Roth conversion does not make sense first anyone that can't pay the tax on the conversion
because once you convert you commit to pay the tax now the second reason anyone who believes that
their future tax rates will be lower than their current tax rates the third reason not to convert
is if you have a low tolerance for volatile and want the assets to be in safe low yielding
Investments generally it doesn't make sense to convert assets pay the tax and then not invest
them in growth oriented assets the fourth reason is something that I like to call stealth taxes
these are taxes because a conversion increases your adjusted gross income and you could raise
your income to a level where you don't qualify for certain things like medical deductions or the Irma
surcharge on medicare premiums kicks in or you lose child tax credits and education credits or
the taxation of social security or even the loss of the twenty percent qbi deduction for business
owners these are all what I call stealth taxes and you want to be aware of them but if these are
triggered it's often a one-time short-term expense to gain a much bigger benefit in retirement the
next reason you may not want to do a conversion if you you are applying for financial aid The
increased income from a conversion could impact it Ira assets are generally excluded from financial
aid assets but the income from a conversion is not so you may want to wait until financial aid isn't
needed another reason you wouldn't want to convert is if you need the funds soon if you pay tax
now and don't allow the funds time to grow then this strategy will backfire conversions are not
for the short term and the last reason that you may not want to convert is that generally if you
are over 72 and subject to rmds your conversion window may be over the only funds eligible for
conversion would be those above the rmd rmds cannot be converted remember rmds are required
minimum distributions notice that as I said this I said generally because in certain situations
conversions above the rmd can make sense ideally if you have a younger spouse or beneficiaries
that you plan to leave the assets to then converting now paying the tax and allowing that
tax-free growth for them may make a lot of sense every situation is different so work with your tax
and financial advisors to create your Roth Plan before it's too late HSA or health savings account
health savings accounts are triple tax-free saving and investing accounts that are part of a high
deductible health care plan these plans allow you to save and invest for the future by getting
a tax deduction now on your contributions tax-free growth if you invest the funds and tax-free
distributions if the funds are used for medical expenses huge benefits there with hsas and a
key part of the 100 percent tax-free retirement income strategy you know why not just because HSA
distributions are tax-free but because just like the Roth IRA distributions HSA distributions do
not count as provisional income and do not make your Social Security taxable in 2022 a family can
contribute up to seventy three hundred dollars into an HSA and eighty three hundred dollars
if you're older than 55.
If you're single you can contribute up to three thousand six hundred
and fifty dollars with an extra thousand dollars if you're over fifty five and there aren't any
income limitations the higher your current tax bracket the larger the deduction that you get
if you have the receipt for the medical expense you can withdraw funds whenever you like without
taxes and penalties no matter your age even later on that day make a contribution in the morning
pull it out later in the day now once you reach age 65 you can withdraw funds for any reason
without penalties but you still would owe taxes like any other pre-tax retirement plan if you
didn't use the funds for medical expenses stick around and I'll fill you in on a little-known
secret that can allow you to withdraw funds for any purpose without taxes or penalties all right
check this example out let's say your name Ross Geller you all know Ross from friends he's 30
and now he has a family you have 35 years until he reaches 65.
He decides to max out the annual
contribution of seventy three hundred dollars and the government never raises it let's also assume
that he never puts in that extra one thousand dollars when he reaches age 55. so you just put
in the seventy three hundred dollars every year for 35 years let's also assume you invest the
money in a diversified portfolio and net seven percent a year this is what that looks like your
total contributions are 255 500 your total gains our 824 277 your total balance at age 65 is one
million seventy nine thousand seven hundred and seventy eight dollars and if you use that money
for medical expenses all of those distributions could be tax-free and penalty free if you use
them for other expenses you know taxes but not penalties because you're older than age 65. now
I promise that secret strategy is coming you know what makes me sad or really just a little
frustrated for many people who have hsas there isn't any growth you might say Colin well how
can that be well many people contribute to hsas but they miss the most important step actually
investing the money according to a 2021 report by the employee benefits research institution
50 of people employ would have opted for a high deductible health care plan with an HSA but
only four percent of HSA accounts open for at least a year are investing their money and
after being open for 15 years only 20 percent of those accounts are invested what that tells
me is that a number of people are aware of the tax deduction for contributing to it but they
aren't aware of the huge growth potential or just weren't told that investing those funds was
even possible it seems the vast majority of people contribute to the HSA get the tax deduction and
then pull it right back out oh man if they knew proper planning can help you target a certain
amount of growth in the HSA plan so that you cover your assumed Health expenses in retirement
once you reach age 65 you can withdraw the funds for any reason without penalty but you don't want
too much in there because if it isn't used for health care you pay tax on the withdrawals like
regular income all right are you ready for that secret strategy to completely tax-free withdrawals
without penalty here it is there is no time limit on when you can claim the reimbursement from your
health savings account really well currently at least I can track my medical expenses right now
on a spreadsheet keep the receipts and then claim them in a huge lump sum later on in life for
whatever reason because these expenses never expire what type of expenses can you track the
list is literally endless here is a list that's compiled by Health Equity I'll provide a link to
it in the notes below look at this as we scroll through here AAA meetings antacids Botox condoms
crutches eye drops fiber supplements gambling treatment infertility a midwife and many many more
seriously it's almost anything you can think of that's medical related and you know what when
I make that distribution it would be tax-free and would not count toward my provisional income
you remember provisional income right provisional income is all of that income the IRS adds up
to compute whether your social security income is taxable now I would never tell someone to spend
all their time tracking all their medical expenses and logging receipts through their entire life but
hypothetically if you tracked every bill that was over a hundred dollars that might be a very good
way to help your future self all you would need to do is create a spreadsheet an Excel or Google
Docs somewhere in the cloud that's backed up list out the date of the expense what it was what
the cost was and confirm that it was HSA approved and like we said almost anything is then upload
an image of the receipt to the file and move on well that is an amazing way to maximize your
future tax-free retirement income and a secret strategy that many people don't know about the key
is to make sure that you track those expenses and don't include anything other than those medical
expenses when you pay for things most people think of life insurance for the death benefit but there
are many benefits while you are alive look there is a lot about permanent life insurance I didn't
know when I got started in the advice business it's taken me years to learn the ins and the outs
so I can easily understand how so many people run the other way when permanent insurance is brought
up will the stock market implode like in the year 2000 I have no idea it could triple from here it
could fall by 50 percent no one knows and if they say that they know run the other way after taking
into account expenses for a permanent life policy in my opinion it could be a very attractive
addition in this low interest rate environment will it outperform the stock market over time in
a Roth IRA probably not I mean I really really doubt it that's why I've got a Roth IRA but will
it do better than having money and checking and savings accounts CDs or low yielding bonds it
very well may especially because it isn't taxed if you earn four percent just four percent in one
of these policies tax-free and we're in the 22 percent tax bracket you would have to earn 5.128
percent before tax to do better what bank account CD or bond is paying that and many of us follow
widely held truths without actually doing a little digging now I am skeptical of almost everything
so the whole buy term and invest the different strategy deserved a little more digging first
when you buy a Term Policy it is typically a level death benefit like 500 000 a million two million
which means due to inflation eroding its value each year a Term Policy purchased decades ago
is worth far less an inflation-adjusted dollars second according to a Penn State University
study 99 of term policies never pay out a claim now thankfully most people don't need them and
they let the policy lapse but the dollars that are spent are gone forever third how many people
actually seriously invest the difference between what they would pay for a Term Policy versus a
permanent one well according to David Babel a professor at the Wharton School of Pennsylvania
quote people don't buy term insurance and invest the difference they most likely rent the term
lapse it and spend the difference now that is American for those that actually do invest the
difference what happens to the funds well they typically go into an account where interest income
is taxed and capital gains are taxed over time since 2000 the typical stock investor lost 49
or more of their savings not once but twice according to the famous annual dalbar study the
typical stock mutual fund investor earned 4.25 annually over the past 20 years ending December
31st 2019.
Now that's less if you're in the 22 bracket than what we talked about earlier over the
same time period the S P 500 earns 6.06 percent now you only got that return if you were invested
100 in stocks at all times and never Panic during those huge drops and those gains are taxed along
the way and whatever the government says that they should be taxed now it's true that permanent
life insurance policies can be more complex and they can be more costly because of all the
benefits that come with them also not everyone is insurable they're generally long-term planning
vehicles and have policy premiums that need to be paid to keep the policies in force whether through
deposits or dividends and if you would draw cash borrow or use cash value to pay premiums you do
reduce the death benefit it's also true that they are more inefficient in the early years as the
policy gets going but the longer they are held the more efficient they become it's kind of
like an airplane flying from New York to LA as the plane takes off from New York it's full of
jet fuel and takes a while to get up to cruising altitude but once there as jet fuel Burns off
the plane gets more efficient and flies faster it's the same with many permanent Life policies
the longer they are in effect the longer tax-free compounding of interest and dividends can occur
and if you structure these policies correctly with an agent that is looking out for your best
interests you can have a growing death benefit instead of a static one that benefits your heirs
and you can access the funds tax-free later on in life for that tax-free retirement income how do
you do that you borrow against the policy value ah well you must have to pay really high borrowing
rates right no borrowing rates are stated in the contract and typically four to five percent in
this current rate environment hey quick little plug here if you're enjoying this video make
sure you give it like and of course smash that subscribe button hit that little bell so you know
whenever I release a new financial planning video all right have you heard the saying buy borrow
die that means buy assets borrow against them to provide cash flow and then die many wealthy
clients implement this strategy to minimize taxes when do you pay tax well if you save
in a non-ira you pay taxes typically at 15 to 25 percent of gains and potentially more
if rates are increased in retirement account distributions from IRAs and 401ks you pay taxes if
it was income right typically double digit rates unless you're properly structuring your assets
for a zero percent tax bracket so is borrowing at four to five percent interest better than
paying 15 20 or 25 percent in capital gains tax I think so permanent Insurance structured
correctly can be an excellent strategy for a tax-free retirement and we just learned about
all the benefits while we are alive but what about passing on what we don't use if you're diligent
in your planning you most likely will have assets that you would like to pass along to the Next
Generation ideally you want to do that tax-free and pass on as much after tax as possible well
when Congress unleashed the secure act in 2019 it eliminated the stretch Ira man stretch Ira
that was previously around since the 1970s and it made possible for those inheriting an IRA to
take out proceeds over their lifetime potentially lowering taxes I've got a number of clients that
are utilizing that well with the secure act it says that you must withdraw all inherited IRA
assets within 10 years unless you are a spouse or eligible designated beneficiary or EBD as it's
called so Congress just made traditional IRAs much less attractive to leave for beneficiaries that's
moved permanent life insurance to the top of the list for efficient estate planning now do you have
a spouse who will inherit your IRA at some point and then owe taxes in the single tax bracket once
you pass on many couples forget that the odds are one of you will live longer than the other and
will pay what is referred to as the widows tax the fact that you have the same income and assets
but are now taxed as a single individual rather than married couple at much higher rates and the
government is counting on it wouldn't it be great to have an insurance payout that could help him or
her convert those funds to a Roth IRA and pay the tax for them I know I would love that Roth IRA HSA
and permanent Life cash value for the tax-free win you know what else is a win reverse mortgage
is what are they why are they important to a financial plan who do they make sense for and what
to look out for first what is a reverse mortgage a reverse mortgage is a type of loan that's designed
to give people age 62 or over access to the equity that they've built up in their primary residence
without having to sell it to be clear you can only get a reverse mortgage on the home you are
living in unlike a regular mortgage in which the homeowner makes payments to the lender with
a reverse mortgage the lender pays the homeowner now you have the option to receive a lump sum
a line of credit or a series of payments over time but you don't have to pay the loan back
you can if you choose to do so it's nice to have that flexibility you'll hear that word
a lot the loan balance accumulates interest over time similar to any other mortgage at the
stated rate on the loan and we will talk about how that impacts a financial plan in a little bit
the key part to understand is that the loan must be repaid when the borrower dies moves out or
sells the home and that's just like any other mortgage reverse mortgages are often called home
equity conversion mortgages or hecm for short and they're administered and regulated by the U.S
Department of Housing and Urban Development or HUD as many people know it it's a great great
way to provide flexibility to a retirement plan since the distributions are alone of your own home
equity guess what they are not included in your adjusted gross income reported on your tax return
you know what that means that means they don't count as provisional income they don't trigger
High income Medicare premiums or the taxation of Social Security benefits huge government insurance
is required and is provided through the federal housing Administration or FHA they're also a part
of Hud this backstop provides critical assurances to both the borrower and the lender Insurance
foreign HECM reverse mortgage guarantees the borrower funds if the lender goes out of business
and it ensures the borrower will never owe more than the value of the home when sold let me say
that again since that is really important if the housing market declines the borrower will never
owe more than the home is worth when it is sold the borrower gets what is in effect a tax-free
Advance on their equity in the form of a line of credit fixed monthly payments or a lump sum but
the borrower must also continue to pay the real estate taxes homeowners insurance and the cost to
maintain the home just like any other mortgage all right so why reverse mortgage is important to
a financial plan one word flexibility When You Reach what I call the retirement Red Zone the five
years before retirement and the five years after retirement you're in a very important zone for the
success of your retirement plan the ability to tap different assets to pay for retirement living
expenses in a tax efficient manner increases the success rate of your financial plan for many
retirees a good portion of the retirement assets are socked away in tax deferred retirement
accounts like traditional 401ks and IRAs I just talked with someone today about this over 90
percent of their assets are in these traditional 401ks and IRAs guess what these assets have likely
never been taxed so what happens when you go to withdraw them well when they're withdrawn they're
taxed at income rates and they contribute to provisional income that can make Social Security
taxable and increase your Medicare premiums as retirees get close to and start drawing on these
assets the last thing that you want to see is a significant market downturn like what happened
in 2000 to 2003 or 2007 to 2009 you probably remember those periods well or at least saw your
parents deal with them of course there is no way to predict if or when a major stock market
decline will occur why is this so important to avoid in your retirement Red Zone well if stocks
decline significantly and you're forced to sell them low because you need funds to live you lose
the ability to wait out their eventual rebound for that reason having an ability to access other
assets like a reverse mortgage can help reduce the chance of running out of retirement funds early in
essence if markets were down and you had access to a reverse mortgage you could potentially use those
funds tax-free remember until the stock market recovers and then tap the retirement accounts you
could even elect to tap those accounts and pay back the home equity you took out if you wanted
to there's nothing in reverse mortgage that says you can't a second reason reverse mortgages can be
so important to a retirement plan has to do with the taxes and surcharges these are what I like
to call stealth taxes because they creep up on you without realizing it currently there are two
significant jumps in the tax bracket at certain income levels from 12 up to 22 percent and from 24
up to 32 percent if your Social Security pension or other income each year comes to the middle of
a tax bracket and retirement account withdrawals would push you into a higher tax bracket it
can be beneficial to use assets like a Roth IRA and a Roth 401k or home equity through a
reverse mortgage to keep your income out of those higher brackets paying loan interest can be
a lot less than paying significantly higher taxes from creeping into a higher tax bracket this is
where sophisticated retirement income planning can potentially save you taxes is at 22 percent thirty
two percent or even more who do reverse mortgages make sense for all right now that we know many of
the advantages of reverse mortgages let's discuss who they are most appropriate for actually the
better way to answer this question is to outline who they are not for if this is not your primary
residence you cannot get a reverse mortgage second if you are not yet 62 years old you cannot apply
for a reverse mortgage and third if you believe you're going to sell your home in the near
future to move somewhere or downsize I think a reverse mortgage on your current home may not
be the best option because of the costs involved so who do they make sense for ideally they make
sense for someone who plans to stay in their home for the rest of their life and is looking
for flexible ways to access tax-free cash in retirement first if you're single as I said you
must be over the age of 62 to qualify if you're married only one of you must be over the age of
62 but all borrowing qualifications will be based on the younger spouse's age that's important if
you have a wide age difference between the two of you if you're married it is mandatory that
both of you are listed on the loan but that's also good for financial planning purposes now many
times people think that using home equity is the last place you should go for retirement funds I
am here to challenge that thinking I talk a lot about flexibility in my financial planning videos
and that's because we don't know what financial markets will do in the future what unexpected
Health scares we will have what tax rates will be or what the world will have in store for us
who thought we would have a pandemic not many people so proactively creating access to various
assets allows us to customize where we get funds in retirement and when this can potentially lower
taxes significantly in retirement and can allow you to avoid having to sell stocks to live on
during a downturn even CNBC personality and PBSO Susie Orman recently said on her show that
accessing a reverse mortgage is often a better option than selling stocks when they've declined
or paying capital gains taxes well duh that seems to make a lot of sense to me all right now that
we know who a reverse mortgage candidate is let's fast forward a minute what happens when a reverse
mortgage borrower does pass away after a borrower passes away The Heirs take over the responsibility
of repaying the reverse mortgage balance typically airs simply sell the house and use the pro
proceeds to repay it proceeds from the sale of the home will always cover the entire repayment
amount even if the loan balance is higher than the sale price of the home as a non-recourse loan
no other assets of Errors can be taken by lenders to repay the reverse mortgage that is huge and
an often overlooked part of financial planning now while most heirs plan to sell their parents
homes if the heirs prefer to keep the home as an inheritance they only have to repay 95 percent
of the loan that's a nice Advantage all right so what to look out for number one watch out for
pushy sales people recommending a reverse mortgage Without Really knowing your financial situation if
it sounds like they're selling a reverse mortgage to anyone with a pulse run as fast as you can
the other direction work with a knowledgeable financial planner who knows your situation number
two scrutinize the cost of the loan so you know what they are but don't dwell on them I've seen
a number of misinformed people talk about the high borrowing costs of a reverse mortgage as a
reason not to pursue them well as with any loan there is an underwriting process to determine if
the borrower has the financial means to pay for the loan traditional mortgage loans are known to
have mandatory closing costs and fees and reverse mortgages are no different both loans require
expenses and closing costs and sends reverse and traditional mortgage closing costs include many
of the same types of fees the overall expenses are often very comparable what is the major difference
the major difference is that reverse mortgage borrowers will often need to pay insurance on
the loan to the FHA this is what backs the loan if housing prices don't keep up with the loan
value in my opinion it's a small price to pay for the Peace of Mind of not owing more than the
home is worth when it's sold that was a lot of content I love helping people achieve their goals
even more I love how real financial planning can give people like you confidence reduced anxiety
and a more fulfilling life without worrying about your finances now when I say financial planning I
am not talking about some 125 page book that some investment firms sell you for a couple thousand
dollars that tell you some huge number that you're going to need for a successful retirement and
all it does is sit on a shelf in your basement Gathering dust I am talking about true financial
planning optimizing your cash flow protecting you and your family from an untimely accident or an
illness that can derail your finances minimizing the taxes that you pay now and during retirement
by efficiently building assets and efficiently Distributing Assets in retirement keeping stealth
taxes like those on Social Security and Irma surcharges as low as possible and determining the
optimal way to build a legacy for your family this is true financial planning if you're watching this
video you're probably interested in working your way toward a 100 percent tax-free retirement is it
even achievable for many people the answer is yes for others while the answer is no there are many
ways to drastically reduce the amount of taxes you pay to the state and federal government now if
you watched all the videos you may say to yourself this is amazing stuff I'm gonna start implementing
these strategies right now but you may not know where to start you may not be confident that
you're doing things correctly you may not have the time to do it all yourself or most importantly
you may just want to coach with another set of eyes to help you along the way well that is what
I do I've been helping people build their path toward prosperity for over 20 years through two of
the biggest recessions in American history as well as a global pandemic if you think you're ready to
supercharge your financial life and are looking for a coach to guide you I would encourage
you to visit my website at celestialwm.com click the button that says start here and book an
initial 30 minute phone call if on that call it looks like that you may be a good candidate I will
provide you with a link to create your very own free asset map and asset map is a one-page visual
representation of your financial situation we will then schedule a second call to see if or how we
can work together still not convinced check out these case studies in the resource section on my
website three examples of financial planning cases that are pretty typical of my work if one of them
feels like your situation we should talk again I hope you enjoyed this mini-series how to create
a 100 percent tax-free retirement income taxes are often the number one expense many people have
let's craft a way to minimize your taxes through efficient financial planning right now they say
the best time to plant a tree was 20 years ago and the second best time is today same thing with
planning for your financial future the comment I hear most often is Colin I really wish I put these
plans in motion 10 years ago don't let that be you current tax laws are expiring in 2025.
so the window for optimal planning is closing just click the link down in the
notes to get started get clear be clear
Teachers: How to Save for Retirement Without Social Security or Pension – YMYW podcast
user 0 Comments Retire Wealthy Retirement Planning
We got Anna. "Hello Joe and Al, I love your
funny and thoughtful podcast." Well, thank you, Anna. "I'm a teacher in my mid-40s at
a state school. I opted out of the underfunded pension system when I started the job a decade
ago. Instead, I contribute to a defined contribution plan and various supplemental retirement accounts.
Unfortunately, in my state, I'm ineligible to contribute to Social Security, so no pension
and no Social Security. However, I do live in a LCOL, low cost of living area, and I'm
recently able to save more than I spend – $40K per year into retirement accounts – and I'm
thinking about adjusting my portfolio to take the lack of Social Security or pension into
account. What do you think are the pros and cons of these ideas? All right, Anna. She's
saving $40,000 a year? Yeah that's excellent. Solid. Mid-40's? She's gonna be just fine.
What, why you rolling your eyes at me? I didn't roll my eyes, I smiled and then I'm
looking at the rest of her question.
Got it, whatever. (laughs) Okay. "Take a chunk
of my savings each year, $10k, and put it into I-Bonds creating a safe inflation-protected
bond ladder." Number one, what do you think about that idea? What's an I-Bond? Inflation? An I-Bond? It's like a double-E bond. It's
just a government bond. Never heard of an I-Bond? I have, I just can't answer the question without
knowing exactly what is. (laughs) Got it. Or maybe it could put it in "1," bonds
creating a safe inflation… but I believe it's I-Bonds.
I think it's I-Bonds. Yeah that's what it looks like, I-Bonds, so
I do believe, Anna, you should have some of your money in bonds. I don't know that you
necessarily need to buy a bond. I might buy a bond fund, and I might stay shorter-term
just because when you look at the long-term rates of bonds versus stocks, you don't get
much extra benefit, much extra income for a longer-term bond and you have a lot more
risk. But I do agree with putting some in bonds, and whether it's $10,000, that's about
25%. That could be about right. I disagree with that. You're mid 40s, Anna,
so you're a little bit older than me. (laughs) Not much. You got 20 years of work left.
I think as
you get closer to retirement you're going to need as much capital as you possibly can
to accumulate. So I get what you're doing here is you're saying I need a supplement
for my pension and Social Security, so let me put $10,000 a year in I-Bonds. I-Bonds
are paying, what, 2 percent? In 20 years, I don't think that's a good idea. I think
you want to continue to save the $40,000 in a globally diversified portfolio and don't
segment it. Don't try to bucketize this thing. You look for a target rate of return over
20 years, let's say, what do you think, Al? Globally diversified portfolio, 20 years,
call it six and a half percent? Are you fine with that? Yeah I would be fine with that. Okay. And then if she does that, she's got
$1.5 million.
I'm assuming she has money already saved. So that's if she started today and
she saved $40,000, and she got six and a half percent return on that $40,000 savings per
year. At the end of 20 years, she's got that. And if I take a 4 percent distribution from
that, that's $62,000. As a teacher I'm guessing, what do you make as a teacher – $80,000? $60, 70, 80. $80,000? I mean some administrators might
make $100,000 and some. Kinda depends on where you are in the country
too. And we don't know what state she's in. So I don't know, $62,000. That's, of course,
the future value of that… (Joe calculates) It's always good to do calculations on the
air, isn't it? (laughs) Yeah it is, here we can see it.
Uh-huh. It's about $42,000. Can you live off
of $42,000? If you're good then you're all set and keep doing what you're doing and have
a global diversified – don't try to segment. Yeah and that was assuming you don't have
anything saved now. But she's in our mid-40s and she's cranking
$40,000? She probably has some cash there. Number two question. "Use my tax-deferred
retirement accounts and combined short term TIP funds and long term TIP funds to create
a sort of liability matching strategy." Anna! Are you a pension hedge fund manager?? No,
I would not do that. She's trying to – this is what like big pensions do, and they match
ladders with liabilities, and the liability, in her case, would be an income stream or
income payment.
I disagree with that strategy as well. I like the TIPS though, what a TIP
is is a treasury inflated protected security Alan. Yes, that I knew. Okay. Any other comments on that strategy? No. Agreed. Okay. Her third comment is "more
is better." "Stick with the total return portfolio but
perhaps choose a more conservative allocation, say move to 50 fixed income 50 stocks to substitute
for Social Security. Cheers and thank you for all your work." All right Anna. Yeah. Now you're on the right track. But that's
too conservative. And that's assuming you have a 20-year threshold. Yeah, Anna, if you're retiring in the next
five years, well then all bets are off. Then just ignore everything that I just said. But
if you're retiring at 65, let's say. Because you're looking for a supplement of Social
Security.
I love the fact that you're concerned of saying you know what, I don't have Social
Security, I'm not going to have a pension, but I have all these supplemental retirement
accounts that let me put $40,000 in a year. If you continue to do that, I think you'll
be fine. And it sounds like she lives in, what did she say?
A low cost of living area. LCOL? FMO…? What are you trying to say, Joe? (laughs) I dunno. FOMO? Fear of missing out? Yeah that's what I meant to say. Okay. FOMO. Loco? Let me just say. if you do have 20 years,
I would go at a minimum 60% stocks. I might do 70 percent stocks, I might even do 80 percent
if I could handle the fluctuations. Volatility. Yeah. I have roughly the same
time horizon. My portfolio is 100 percent stocks. So there you go. All right Anna I
hope that helps. Good luck with everything.
Keep pumping away, keep saving..
Read More
Retirement Planning: Are you Ready for Retirement? with Oak Harvest Retirement Success Plan
user 0 Comments Retire Wealthy Retirement Planning
[Music] welcome to the retirement income show on Market Lane alongside the CEO and founder of Oak Harvest Financial Group that of course is Troy sharp Troy is a certified financial planner professional his team at Oak Harvest is incredible if you want to go to the website to learn more elk Harvest financialgroup.com Oak Harvest fg.com works as well a lot of great information on the website you can learn about Jared Kinney Ryan Kenny you can learn about Chris Paris Jessica canella the whole team there's just a phenomenal team Oak Harvest financialgroup.com and of course you can always go to the YouTube channel there's over 300 videos on there about any topic you can think about in the financial world the retirement world uh it's phenomenal and there's no cost you subscribe you'll know when all the new ones are out but there's no cost to any of that YouTube check out Troy sharp and Oak Harvest Troy's office located at 921 oral City Way I-10 and Bunker Hill they they are here for you if you need help they would love to help they just don't know if they can help until you reach out and you can do that just by giving them a call 800-822-64-34-800-822-64 34 today we're going to be talking the retirement success plan Troy is going to explain what this is and it's the process so it's about investment planning income planning tax planning health planning Estate Planning and they all go together Social Security and Medicare are in there as well you know you've done this for a long time you sat down with a lot of people so you kind of understand the common mistakes the common things that we Overlook as well this will be good going through the retirement success plan how are you going to inform us today of this retirement success plan well just like we have as humans we have basic needs right we have that hierarchy of we need shelter we need food we need security in retirement or once we get to retirement people have their the same concerns the same questions we all have the same let's call it fears do we have enough you know can you retire when can you retire how much can you spend when you do retire without the fear of running out of money we all want to pay less tax right the government can get their fair share but not a not a penny more and whatever that fair share is it's it's defined differently based on your plan so if you take the government's plan there they want to get as much from you as possible and the tax law is set up in a way that if you don't plan for taxes in retirement oftentimes we see people in situations where if they keep doing what they're doing 200 300 500 800 we sat down with a client prospective client recently and we're doing this analysis it was well over a million dollars in taxes if he kept doing the his way of things the way that his advisor had him doing it in regards to his income plan and tax plan and retirement well there was no tax plan obviously but his income plan was going to lead create this domino effect of his tax bill being over the course of time over the course of 25 years over a million dollars in estimated taxes that he was going to pay that he simply didn't have to pay if he went about a different approach the approach that I'm going to talk with you about today as far as step three of our retirement success process the tax planning aspect so just like we have basic needs as human beings we have basic concerns when it comes to retirement and we've created the structured process and that's the beautiful thing about the retirement success plan is it's a plan that is something that is actionable but it's also living and breathing it's something we will review with you throughout the year once you're a client but it's also a process and we believe in structure here we're really big on structure and process and that keeps us organized that keeps us on schedule and that keeps us ahead of the planning curve in order to do the things that we promise for everyone that's entrusted so much to us and I'm talking about your retirement you worked for 30 years 40 years 50 years in some cases and you save up whether it's five hundred thousand dollars or five million or 50 million you need a team of people that of course are knowledgeable but before education and certifications and designations and training and experience first and foremost you need somebody that cares okay if you start there with someone that's a fiduciary and not just you can be a fiduciary and still do the wrong thing I've seen it for years in the industry where fiduciary advisors still sell mutual funds that have high fees and commissions and they can make justifications for why they're selling them or why they think you're they're in your best interest I don't believe that they are personally um we would never put someone into a mutual fund that is charging a five percent front end commission and then you know has two or two and a half percent of hidden fees and we've seen that for for years coming from fiduciary firms fiduciary advisors so you start with from Ground Zero are you working with somebody who truly cares who's truly passionate about retirement so with that philosophy in mind that's the foundation of of what we look at when we hire people here at Oak Harvest Financial Group you could have all the designations in the world all the education all the experience but if if you're arrogant if you're not humble if you're not hungry if you're not continuing strive to be continuing to strive to be a better person we don't want you to work here because that foundational element do you care about the people that you're working with on a human level if that's not there then you know we don't want any part of that type of person I don't care how much you produce how what the metrics are when it comes to how we measure advisor performance so that's the foundation now once you have someone that cares you want a structured process in place to deal with those big questions that you have the big concerns that you have so do you have enough yet it's not just a yes or no question it's a function of how much do you spend what is your health situation if you're healthy yes of course you're going to live longer most likely but are you planning for the increased medical costs in increased probability of needing long-term care or Assisted Living these are aspects that healthier people do have to absolutely be concerned about those that are less healthy it's less likely you're going to have a two or three year four or five year stay in a long-term care facility or need nurses in the home so when we talk about do you have enough and can you retire these are all the answers to those questions are function of how much do you spend what is your longevity what is your health situation your of course your family history um but not only that it's what are we doing with the other aspects of this process meaning the income planning side the tax planning side what about the health care side you know are you retiring before Medicare do we need to look at some type of Health Care planning that qualifies you to receive a subsidy so you're not paying two thousand dollars a month for both spouses for health insurance that maybe we get it down to 400 a month or 600 a month or maybe no out-of-pocket costs whatsoever for health insurance premiums you can do that with proper planning but you need the right type of asset structure meaning if you have all your money in retirement accounts this is where tax planning comes in when you take money out that goes on to your 1040 your tax return and then you probably aren't going to qualify for as big a subsidy as if you had money saved and non-ira accounts so this the structuring of income planning tax planning Health Care planning and then of course the estate side of things this is all what the oak Harvest retirement success process the retirement success plan is and that's what you receive when you become a client it is a very clear and structured process that we go through but then it's also a plan that is living and breathing and we're making adjustments as time goes on tax law changes economic conditions change goals change your spending levels will change it retirement is and we've only learned this you know from years and years of experience the best delayed plans we can't just set him and forget them you know plans need constant monitoring just like a plant or a garden or you know a human being so the retirement success process we're going to get into today to to today we're going to focus on the first three steps the first step is risk management and investment planning next step is income planning so income planning is social security when do we take that it's not just based on the math which it does play a role but when we start to look at are you a conservative investor okay versus an aggressive investor investor that plays into the Social Security election decision of course your Health and Longevity plays in market conditions okay are we in a recession when you're thinking about taking social security are your accounts down 20 30 percent or did we have a really really good year last year and it looks like we're gonna have a good year this year all of these factors kind of tie in to that income planning component as well as many other we're going to talk about and then the big one we're gonna we're gonna get into is tax planning that's step three of the retirement success process and when you start to understand that retirement is a set of dominoes when you're young you work you put the kids through school you deal with traffic you deal with bosses you deal with if you run your own business all the headaches that come with that you deal with so many different things money is really really simple it's life that's complicated in the accumulation phase once we get to retirement now life gets a little bit more simple it's the money it's the decisions you have to make and the realization that every single decision you make how you invest the portfolio impacts not not only how much income you can take today but how much income you can take down the road the sequence of returns risk based on how you've invested sequence of returns is if the market goes down and you're also taking money out you exacerbate that downturn in the market because there's no paychecks coming in you're you're pulling money out and losing in the market so these decisions every single one that you make it's a domino effect it impacts everything else it impacts the tax plan it impacts the income strategy can impact the health care it can impact absolutely the estate plan so we walk you through this process so we have a plan in place we call it the retirement success plan and the goal is for you to have security first and foremost but what I find most often is the outcome is that people feel more comfortable they feel more secure and they're able to enjoy retirement a bit more because they've they have a plan in place that addresses all these certain needs but also through the continual monitoring and adjusting and conversations one thing I love about our process is when someone comes to us and we have that first meeting where it's just get to know you you know no pressure no obligation no cost we get the information we do an analysis between that first and that second visit and then when we come back on that second visit you actually get to see what it's like to be a client at Oak Harvest Financial Group because that second visit with us we're starting to go through the foundation of a financial plan we're starting to discuss the decisions that you have to make not only this year but in the future so that's almost exactly what it's like to have an annual review with us or a semi-annual review with us so I love that about our process is that you get to see before you ever decide to become a client what it's like to actually be a client when we have up on the big television screen all of the information the choices you have to make the impact of making different decisions how it impacts your taxes how it impacts your income how it impacts your account balances when we do a sensitivity analysis and and show you okay this outcome in the market and this outcome for income decisions versus this one here are the possible outcomes for those choices and that those combination of choices so you get to see what it's like to actually be a client just through our normal process of going through that first second and third visit with us many Engineers it takes a little bit longer than that sometimes it's four or five visits but our goal is to Simply provide value we want to make deposits in your life we want to provide value and you know people see that value and they say you know what I think you guys could be a great part of my financial team my retirement team and yes I want to work with you Troy so if that's you if you don't have a retirement success plan if you don't have a tax plan income plan if you don't understand the guard rails what I'm going to get into in this next segment as far as risk management in retirement give us a call we want you to leave a message there's no one here working on the weekends if you're watching this on YouTube if you're listening to this later and it's during the week sure give us a call someone will pick up but we want to have a conversation just to see what's important to you who you are if you're a good fit for what we do and of course you can ask questions to see if we're a good fit for you and then we'll schedule that first visit there's no cost no obligation we can do it through Zoom we can do it in person at the office right here at I-10 and Bunker Hill in Memorial City and that first visit we'll have a cup of coffee a glass of water and just get to know each other and if we are a good fit at that point we'll get that second scheduled we'll do the analysis that I talked about and we'll walk you through that retirement success process so you can have those big questions answered do you have enough can you retire and how do you pay less tax 1-800-822-6434 1-800-822-6434 Oak Harvest Financial Group check out the YouTube channel check out the website Oak Harvest Financial Group so when you think about this this is what I think you should really like about it it's you're working with the team at Oak Harvest for your retirement right to coming up with that retirement success plan you're the CEO it's your retirement look at Troy and the team at Oak Harvest as your Chief Financial Officer here to help guide you you're going to make the decisions they're going to give you the choices right and it's up to you because it is your retirement it's your hopes and dreams your bucket list and all of that it's really important though that they understand your feelings your thoughts your hopes your dreams it is about you so you've got to talk to them and they're here to listen and they're here to help again that number is 800-822-6434 risk management how important is it what actually is it Troy we'll explain when we come back this is the retirement income show with Troy sharp out of Oak Harvest Financial Group back right after this investment advisory services offered through Oak Harvest Financial Group LLC Oak Harbor's Financial Group is an independent Financial Services firm that helps people create retirement strategies using a variety of insurance and investment products investing involves risk including the loss of principal any references to protection benefits or lifetime income generally refer to fixed Insurance products never Securities or investment products insurance and annuity product guarantees are backed by the financial strength and claims paying ability of the issuing insurance company Oak Harbor's Financial Group LLC is not permitted to offer a No statement made during this show shall constitute tax or legal advice you should speak to a qualified professional before making any decisions about your personal situation we are not affiliated with the US government or any governmental agency this radio show is a paid placement foreign [Music]