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How To Become A Millionaire In Two Years Buying One House Per Month – Real Estate Investing

Joe: Hey, it's Joe Crump. I've got another video here for you. This one is from Karen Smith in Columbus, Indiana. Karen: “Joe, can you explain the millionaire matrix? Does it really work and can you do it without down payments or using your credit?” Joe: Absolutely, it works. The Millionaire Matrix is a structure that I teach that shows people how they can actually make a million dollars in equity and in cash within 2 years by buying just one property per month using no credit and no down payment.

And instead of just me explaining it in this video with a talking head, I'm going to pull up a little power point here and show you exactly how this process works. Joe: I created this little power point to show you what the Millionaire Matrix is and how and why it works. Joe: Before you can understand how it works, you need to understand the principles behind it and why it works. That brings us to the idea of businesses in general. 90% of all of the businesses that start up fail in the first year, whereas 90% of all new franchises succeed. Why is that? Why would franchises succeed and businesses in general, not succeed? And the big answer is — systems. Franchises have step by step systems to show the business owner (the person who's implementing the tactics in the strategy of the business) how to do each little system in the business.

Joe: Let's take the ultimate systematization — McDonald's. If you go to a McDonald's, everything is done the same at every McDonald's that you go to because each of their processes is spelled out in a specific system. They have a system for making a Big Mac. They have a button to press when it's time to flip the burger. They know how many burgers to put on there, they know what order to have with a picture of a hamburger, and how to put it together where it shows you that that's where the bun goes and that's where the hamburger goes and that's where the lettuce goes and that's where the special sauce goes. And it makes it very easy for people that are not very skilled to put together a hamburger consistently all over the world. Whether it's here in Indianapolis or whether it's in Wisconsin or California or Berlin or Paris or Ireland — it doesn't matter — wherever you go to a McDonald's, you're going to get the same burger — it's going to be put together the same way by the same skill level of people.

Now, McDonald's has a 200% employee turnover every year. That means that they're constantly trying to train new people. For them to get that consistency, they have to have a system in place to make that business work. Joe: And that's what I've created in the Push Button Method and the mentor program. I've created systems so that I can take new people (people that have never been real estate investors before) and give them a system and say, ‘Step 1, do this. Step 2, do this. Step 3, do this.' Joe: That takes us to the next question in the process here, which is what types of deals make you money.

You need to understand that as well. In real estate, there's only two types of deal that'll make you money. One is properties that you buy substantially under market value, either for cash or as an assignable cash offer. And two is properties that you can buy at market value or below but you can buy them on terms. Now, by terms we're talking about zero down structures that I teach; subject-to, multi-mortgage, land contract, contract for deed, lease option, assignable cash deals. Those are terms and if you can buy properties on terms like that, then you can make money even if you buy them very close to market value. Joe: That's going to take us to the next step which is the beginners Millionaire Matrix. Now here's what we want to do with the Millionaire Matrix and the goal of each system. We want to be able to make $5,000 per deal. We want to be able to do one deal per month. We want to be able to work 10 hours per month. That means hours per week. We want to be able to have $200 residual income per deal.

That residual income I'm talking means every month you're going to get $200. We want to buy 10% under market value; it doesn't have to be dramatically under market value because you're buying on terms, and I'm going to show you why that makes the difference. And you're going to want to sell it for 10% over market value and I'm going to show you how to do that. Because we're selling it on terms as well so we can sell it for more than it's worth. So this is the basic concept for the Millionaire Matrix. Joe: Now let's take an example deal — how the Millionaire Matrix and an example deal would work within it. Joe: Every deal is going to be a little bit different and you're going to make a little bit different amount of money on each one, but this is sort of the model that we're going by. I used the $100,000 as sort of the market value of the property simply because it's a nice round number.

I know that the market value across the country is all over the place. You should probably go by percentages rather than this but I want to show you, even on a lower end market, that you can still make this kind of money. On a higher end market you're going to make more money. So let's start with a lower end market and then you can extrapolate from there. Joe: Let's say you've got a purchase price of $90,000. The market value is $100,000. The financing — you're not putting any money down, you're not getting a new loan — you're buying it subject to the existing loan. Which means that the property is going to be deeded to you and you're going to take over the payments on the loan — without qualifying on that loan (remember that).

You're going to sell this property for $110,000 to a new lease option buyer. You're going to sell it on a one year lease option or maybe a 2-5 year lease option if you choose to do that. At closing you're going to make $5,000 on the lease option fee at closing of this deal. The equity left after the lease option fee is about $15,000. You're taking $110,000 sale price, you're taking $5,000 from that, and that means you've got $105,000 that they still owe you for the property. You only owe $90,000 so that means there's $15,000 in equity. Now the monthly loan payment on this 90,000$ loan that's there — let's say its $900 a month and you're going to lease this property for $1,100 a month. This is an example deal. Joe: Let me also reiterate — you're buying this property subject to the existing loan. That means that you're not putting any money down and you're not qualifying for a loan. They're deeding you the loan. You have complete control of the property but it's subject to that loan that's existing on there.

You're buying it for a little bit under market value but not that much under market value. You're selling it for a little more than market value but not that much over market value. You're selling it on a lease option which the buyer may or may not exercise. You're getting a lease option fee at closing — you're making $5,000 at closing. And you're going to have that equity left in the property, and if they exercise that option, you're going to make that other $15,000. You're going to have that loan payment that's on that existing loan of $900. And you're going to get a lease income on that property of $1,100. So you've got $200 of positive cash flow every month. So that's sort of the model of this whole thing. Joe: So let's go to the next frame here. This breaks down to doing one deal per month over the first year. I'm going to show you how to become a millionaire basically over a 2 year period.

Month one — let me bring my little arrow up here — cash at closing, making $5,000, that's the lease option fee. The $200, remember the difference between the $1,100 and the $900 a month payment so that you made $200 a month on that. Equity payoff this month, you didn't make anything. It hasn't paid off. Nobody has exercised their option. Equity buildup — you've got $15,000 because you bought that property and there's $15,000 of equity. Remember the spread — you bought and sold it for $110,000, you got $5,000 and they still owe you $105,000, and there's a $90,000 mortgage. That leaves $15,000 on there that's your equity. Joe: And then a tax benefit based on $100,000. This is depreciation. If you take this property and you depreciate it by years, and then you divide that by 12, you're going to end up with an actual tax savings in your pocket of about $106 based on about a 30% tax bracket. And these are just general numbers here but they're pretty close.

Joe: Month 2 — you're going to do the same thing. You're going to do another property, make another 5 grand, make another $200 a month and so now your monthly residual income is going to go up to $400 a month. You're not going to get any payoff because the year hasn't passed yet. You are going to build another $15,000 of equity in the property. And now your monthly tax benefit is going to be $212. Month 3 — $5,000 -same thing – it just goes up every month for the whole year. Let's go all the way down to the bottom of the year. At the bottom of the year you've made $60,000 in cash at closing from just doing these 12 deals. And believe me, I've got people that are doing 5 or 6 of these a month on a regular basis because they've set up the systems that I've given them to do that.

Joe: The next thing is the monthly residual. Just from what's going on here, you've made $15,000 the first year in that; residuals. Equity payoff — nothing's paid off the first year yet because nobody has exercised their option yet. Equity buildup — you've built $180,000 worth of equity in the deal and you've made $882 in taxable savings during that first year. So in that first year in the Millionaire Matrix, you've made a total amount of cash of about $83,000. You've made total equity of about $180,000. So you've just made $263,000 in the first year doing only one deal per month. Joe: Now with these deals, if you have 8 or 10 hours of work into these deals, that's a lot of time in these deals. So remember there's a startup learning curve. And there's going to be the time that it takes to set this process up, to get this system going; all of that stuff. But the actual time of the deals is very, very low. And once you learn how to do it and once you get it going, it's going to be easy to keep it going.

Joe: So let's go to year two, and look at the second year. Things start to change dramatically in year two, if you're going by this model. And we have different models that we go by. You don't have to go by this one. But I'm just taking a simple model and how it can expand your income very, very quickly. Let's look at month one. You've got $5,000, your residual income is now $2,400 a month because you've got 12 deals (and you only have to keep 12 deals like this because they're going to be paying off as they exercise their options).

So as the first one pays off and you get your equity out of the property because they exercised their option, you made $15,000 equity payoff in cash plus you bought a new property, so you've got $15,000 new equity buildup and now you've got 12 months' worth of tax savings over 12 properties. So you're going to be making about $1,200 a month in tax savings, which is pretty substantial when you start making this kind of income; it'll save you a lot of money. Second month — same thing. Joe: Now, keep in mind — this is the big variable — how many properties are going to actually exercise their option? It's going to be much less than the total amount, so you may not make this full amount. There are ways to optimize this process and get more of the people to exercise their option, and I show you how to do that.

I'm not going to spend the time on this video to do that. Joe: But let's look at the bottom line on the second year. $60,000 – same as you made last year on the cash flow. Monthly residual — it well over doubled. Equity payoff — assuming that they exercised their options, just made a nice chunk of money on equity payoff. Equity buildup — you make another $180,000 on top of this $80,000. You made $15,000 in real cash money in your tax savings through depreciation, so it was a really nice year two. Then your second year on the beginners Millionaire Matrix is total cash at $284,000, and total equity of 180,000$. The grand total of year two is $464,000. I add that to the $263,000 and you've got $750,000 in your first two years, not quite the million that I promised you but pretty darned good. Joe: Let's say you get better at what you do, that you get a little bit better at the process. As you're doing this, how much will you improve? Will you get 100% better? Will you get 75% better, 50% better, 25%? How much better are you going to get at this process after one year? I venture to say that it will be more than you think.

But let's say that you only get 25% better. If you get 25% better at better price from the seller on your property, instead of getting 10% under market value, you get 12.5% under market value. Not very much — next to 2.5% better on your price. Let's say you get 25% down from your buyer so instead of getting $5,000 down you get $6,250 down. Let's say you get 25% more lease money monthly and your $200 goes to $250 a month. Let's say you get 25% higher price from your buyer — instead of getting $110,000, your price goes up to $112,500; not that much more. And you do 25% more deals a year so instead of doing 12 a year you go up to 15 deals a year. Now this is very realistic to think that you can get just 25% better. I have people that get 100% to 500% better at what they do and their production goes up with that statistic. The ability that you have and the talent that you have in this grows as you do it.

This is a skill and you build that skill through this process. Joe: So let's look at the second year Millionaire Matrix if you're 25% better. Now you're making $6,200 instead of $5,000 so that jumps that up from $60,000 to $93,000. That just increased your income by 50%; right in the first column. The second column goes up a good deal as well. Your equity payoff went up almost $100,000. Your equity buildup went up by $100,000. Your tax benefits, well, they didn't go up at all. But still, you just increased your income by a substantial amount of money. So just getting 25% better at the second year of the Millionaire Matrix — now you've made $730,000 that second year. You made $260,000 the first year, so NOW you're at the million dollars. Joe: This is a realistic model and it can work. Again, part of the biggest downfall of this process is the amount of people that exercise the option which is less than we would like, but keeping these properties — you also continue to build your equity and you buy down the notes.

You get the depreciation and those other things start to grow. So that's not a bad thing, either. Joe: So this is a great way to do it. This required no money and it required no credit. All it required is your effort to follow through with the step by step system of putting together subject-to deals, of finding buyers for those subject-to deals and filling those properties.

And you do this all without risk because you've got so many contingencies in the deals that you're doing that and if you don't find a buyer for the property that you buy, you don't close it. I think the whole beauty of this system is that you never have to close a deal until you know that it's going to make you money, so instead of everybody doing zero down (which everybody talks about and I talk about as well) you're not really doing zero deals.

What you're doing is cash out deals, all the time, without using your credit. So it's very exciting stuff. Joe: That's the Millionaire Matrix. it's a very powerful way to buy properties. It creates cash flow for you upfront so that you can have a sustainable business and it also creates that long term growth and wealth building that anybody needs if you want to retire from this business and be wealthy. It's an exciting process. This, by the way, is what I teach in my six month program. It's what I teach in my Push Button Method. So, either one of these programs will get you into more detail about exactly the step by step process of how to put all of that together.

I'd love to work with you and to help you and make your business and your dream come true on this. Thanks. Bye. .

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How to Plan Your Week Effectively

In his popular book on organization, The
Bullet Journal Approach, Ryder Carroll explains his individual company as well as efficiency
system: the bullet journal. Throughout his life, Carroll battled with
tracking tasks, frequently forgetting vital details, and also feeling overwhelmed by tasks. However, via test and also error (as well as after
attempting numerous various other organization systems), he lastly struck upon a way to, as he puts it,
” track the past, order the present, as well as develop the future.” Go into: the bullet journal, a pen and notebook
system that takes things back to basics.Part to-do checklist and also component journal, the bullet journal changed the means Carroll approached his life, his job, as well as exactly how he got points done. As well as it's assisted several others do the exact same. In his book, Carroll breaks down specifically how to make use of the bullet journal system, but he additionally supplies some understandings on how to intend your days better. Several of these ideas can in fact apply to whatever performance system you use in your own life. Whether you utilize the bullet journal method on your own or stick with an easy order of business, or make use of an online system like Idea, Google Schedule, or another thing entirely, you can execute several of these principles to make your life less complex and also even more productive.Here are five of Carroll's pointers for preparation your week successfully: 1.
Take a psychological supply Prior to you study color-coding all the hrs of your day or appointing
time to each task you wish to accomplish, take a minute to
create a mental stock. It's a fantastic concept to do this the Friday before your week starts, so when Monday comes you're prepared to strike the ground running. To take a mental inventory, document anything and also every little thing that you know you intend to achieve. Don't keep back, just let it all out, either on a paper or in a digital list. You'll most likely uncover you have a whole lot even more jobs you wish to finish than you thought you did.This is due to the fact that
we often experience decision tiredness– a sensation that happens when we have a lot of choices for how to spend our time, causing burnout.

Carroll composes that “The initial step to recuperating from choice exhaustion, to extricate the stack of options weighing on you, is to get some distance from them. “And the very best way to get range
? Write all of it down! As soon as your brain isn't occupying power thinking regarding all the tasks you require to accomplish, it will certainly have the space to go back as well as review what's truly important. Since all your tasks for the next week are jotted down, think about each task independently. How important is this job? Is it crucial? Is it essential? Taking a mental supply gives you the chance to cross tasks off your listing that really aren't that vital, and also would certainly have maintained you from dealing with things that truly matter.2. Time Blocking If you locate on your own particularly overwhelmed by a task, or are unsure when you'll get a possibility to
function on it, a great way to make certain you

get around to it is by
utilizing time blocking. Time blocking is a method where you establish aside a particular amount of time to service a task. So for instance, as opposed to your order of business saying: Write Essay Work on Project Clean Area You would certainly establish your to-do list such as this: 10 am -11 am: Draft essay 11:30 am- 12 pm: Make final edits to task 1 pm -2 pm: Tidy space By doing this, you just have a particular quantity of time to work with the task, allowing you to offer it your complete attention as well as including stress to get the task performed in that time structure. As Carroll describes, “time boxing includes two crucial inspirational ingredients to a task you have actually been postponing: framework and also necessity. “3.
Morning Reflection While setting up your week the Friday prior to aids obtain your ideas organized, it's. additionally a great technique to consist of a morning representation period. This reflection does not have to be really. long: only concerning 5 to fifteen minutes.But it can establish your day up for huge success. Take a few moments to
take a seat for a representation. with your to-do checklist, Concept board, bullet journal, or whatever you make use of.
You can do this while you consume your morning.

coffee, or equally as you ' re taking a seat at your workdesk. The early morning reflection is a time to discuss. the tasks you have gotten ready for the day as well as believe about why you're doing each of them. An additional good suggestion is to envision yourself finishing. each job to provide yourself an added ruptured of inspiration. 4. Evening Representation. Where the morning representation aids you start your day with the best mindset, the evening. reflection assists you loosen up and also unburden
your mind. Throughout your evening representation, take into consideration each. job you finished throughout
the day as well as ask on your own concerns like:. why is this crucial? why am I doing this? why is this a priority? An evening reflection practice helps focus. and also clarify your priorities so you can prepare accordingly.Not only does it put a good bookend on your. day, however you get the chance to note any kind of completed jobs as done and also move uncompleted jobs to. another day. This is an important element of the evening. reflection since it helps you really feel like the day is “full,” rather than an endless. to-do list. You need to additionally take this minute to appreciate. your progress and also placed a close on the day.As Carroll creates:” Representation aids identify.
That's why it's also so essential to commemorate. Each time you go across something off your. Get up from your workdesk as well as do a dancing!
Call a friend or take the day off early. Carroll puts it this way:” Commemorating your. Of training course, the most vital point concerning.
you to track, or that bogs you down, or that maintains you from being able to function. on your tasks is not an excellent system. Take what pointers interest you, examine them.
out, see just how they match your system and also leave anything that causes much more rubbing. as well as aggravation in your
life. Your efficiency system ought to always aid.

you more than it injures! Whatever performance
or company. system you utilize in your life, whether it's the bullet journal or another thing, ideally,. you can execute some of these ideas to make your
system a lot more reliable and also make your. life that a lot simpler.

And the best method to get distance
? How essential is this task? While setting up your week the Friday before aids obtain your ideas organized, it's. The morning reflection is a time to go over. Obtain up from your workdesk and do a dance!

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Hilltop Community

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5 Easy Tips To đź’°Save Moneyđź’°…Money Saving Hacks

I'm going to do a video on 5 simple things you can do to help your financial situation and I realized that I need to do a follow-up to the retired at 40 story video because there's a huge need for financial education in this country and really everywhere it pertains to every single person doesn't matter what your financial status is you can always use help and there's always little tip tips and tricks that and things that you can do to better your status it always amazes me how scared people are to talk about their finances to put something on paper to basically take a look at where their money is going what's getting saved and how everything is getting spent and I've met people time and time again that are highly educated very smart people but they know nothing about finances and they are terrible with money management so before we get into the 5 tips I want to strongly urge you to make a financial statement for yourself figure out where your money is going currently and figure out how much you're saving and basically figure out where you can trim the fat for so many people a financial statement or just finances in general is like a bad word they're just terrified of it but the only way that you're gonna be able to improve your finances is to face the music alright so now that you've had a chance to go through your financial statement you definitely know where your money is going but how can we save more and what you really need to aim for is about 6 months of reserves especially if you're getting ready to invest money into something or if you're doing some kind of career change or some life-changing thing and all of these five tips will more than likely be a line-item on your financial statement so let's go to financial tip number one hey I'm going to have to call you back I'm shooting a video right now so this first thing is something that we've all become very very accustomed to in the last 10 to 15 years and that is a cell phone and people tend to spend absurd amounts on their cell phones whether it's the bill or the cell phone itself mainly the cell phone itself so that's my first financial tip is shop on eBay or Amazon for a cell phone that's refurbished or used or one this may be just a couple years old I actually just purchased a cell phone on ebay because I'm having trouble with my current one and I got on to my cell phone providers website and the most expensive phone that's like mine now is $1,200 that's insane to me so I got on eBay I found one that's similar to the one I have right now it's new but it's a couple years old and I got it for less than $200 another thing that you can do is ask for some kind of loyalty benefit from your cell phone provider cell phone providers are constantly trying to earn your business and if you've been with them for a long time and you can convince them to keep you around by offering you some kind of benefit they'll jump on the chance just by going into my provider recently I have a cell phone bill that was about a hundred and ten dollars a month I told them that I've been with them for close to 15 years they knocked it down to sixty-seven dollars and I have unlimited everything now tip number two is what I call going to youtube University or getting a YouTube education we live in the most amazing time ever right now there is information everywhere and it's so easily accessible don't ever stop educating yourself it's so easy to find out how to do things these days you're doing yourself a huge disservice if you don't take advantage of that so how does that pertain to saving money well you can save money by doing tons and tons of things yourself instead of paying someone else to do it just look at the platform that you're watching right now for instance you're watching a video on how to do something so that how-to can be anything from changing brake pads on your car to changing the oil on your car to fixing a leaky faucet or the toilet flapper not working on your toilet all the way to how to the meal which brings me to my next point number three so food is a necessity in life but is it a necessity to go out to eat or go to Starbucks once or twice or every day the amount of money that people spend on food and going out to eat fast food Starbucks McDonald's it really adds up quick and I don't think that people realize how much money they're actually spending on it because it's just five or six or seven dollars here and there but if you add that up over the course of a month or a year or five years or ten years I think the result would be pretty staggering cook your meals at home pack your lunch for work make that fancy coffee at home it's not that tough to do there's so many great ideas and resources on YouTube and Pinterest and vlogs and blogs this channel included if you need a place to start scroll through my channel I have lots of cooking videos if you want to take that a step farther you can start growing your own food and if you don't have a big green house like this you can grow a lot of food just in five gallon buckets even on a little deck if you don't know where to get started see tip two number four is something that really hits home for me because me and my wife are both self-employed and we have been for 15 plus years so number four is insurance and although I don't like insurance companies because I think they're a giant scam it's a necessary evil and you can also use that to your advantage you can put them against each other insurance companies much like cell phone companies are begging for your business and they're constantly trying to outdo each other with with certain benefits or promotions so make them put their money where their mouth is and put them up against each other constantly and not just insurance companies you can do this with all kinds of different companies you should always be price checking these companies the ball is in your court make them earn your business all right I'd saved the best for last tip number five is taking advantage of bank account and credit card bonuses and this tip is begging for a separate video all on its own because I could go on about this for a long time but if you're not taking advantage of credit card bonuses for sign ups or credit card cash back or travel miles or if you sign up for a bank account a lot of them will give you a large sum just for putting your money with them now I want to be clear I'm not promoting just going out and spending a bunch of money on a credit card but more putting the things that you already spend money on into the credit card it's money that you're spending anyways put your mortgage on a credit card if you can insurance is a good one it's not super expensive but at least we'll get you a couple hundred bucks on your credit card unless of course it's health insurance and then you're talking in my case thousand to twelve hundred dollars a month here's another good one groceries it's something that you always have to have and depending on how much you go to the grocery store it could add up to three or four hundred bucks a month sometimes six hundred maybe even more no-brainer here put your gas on a credit card you can always put your utilities on your credit card too if your utility company will allow it next from tip one your cell phone bill now depending on how much some of these are and if you are allowed to actually put them on your credit card you're talking some pretty major money that you can get a bonus from if you're getting two percent cashback that really adds up not only that but you're increasing your credit score while you're doing that so as long as you're financially responsible and you pay this every month you're reaping a large benefit a lot of credit cards will give you a 2% cashback they'll give you a $500 signup bonus that's free money in my opinion the free bank bonuses or even better than the credit card in my opinion because the bank account is something that you have to have anyway a lot of them will give you $500 for a small deposit as long as you put your direct deposit with them all the way up to I've seen $1,000 before and if you have a little bit more money to play with some of the online money market accounts like Capital One will pay you up to 2% or some even up to 2.5% just for keeping your money with them so some of these things may not seem like it's saving you a ton of money but when you take up those extra fives and tens and occasional hundreds and you put them to work for you as opposed to something that you're normally spending you're not only saving the money because you're not spending it but you're putting it to work and doing something else with it and you'll find that your your finances will start to collect very quickly so if you found the video helpful and you enjoyed the content take a second to give me a thumbs up it really helps out the channel and it helps the YouTube algorithm get this video out to people who actually need to see it also don't forget to subscribe we do some gardening some frugal living some food preservation and cooking some gardening and you get to join me and my family on our retirement at the age of 40 after you've clicked subscribe click the bell notification also and it will notify you every time a new video comes out and it'll keep you in the loop of the community all right I appreciate you sticking with me through this whole video so I'm gonna give you an extra bonus tip with an extra 100 or 200 or 300 or more dollars per month that you're saving with just cutting back on a few things you take that extra money and you pay down debt with it the faster you get out of debt the closer you're going to become to financial freedom and whenever you're paying off debt always choose the smallest balance first because it gives you that extra little boost and if you can pay it off faster it gives you that extra bit of confidence to rock into the next one so once you've paid down your smallest debt move on to your next smallest debt take that money that you're saving from the smallest debt that you're not having to pay any more and add it to the money you're saving from the 5 tips that I'm giving you and apply it to the next smallest debt and when that one's paid off you roll it into the next one you roll that one into the next one and so on and so on in the meantime this is retired at 40 check out these other helpful videos if you have a minute remember to live a life simple and we'll catch you next week oh hey I'm gonna have to call you back and shooting a video right now this is right my god get out of debt

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Tom Brady’s Retirement

– Hey, babe, appearance who'' s house.- Finally you'' re back. – I ' m completely all set to do my part.- So thankful to finally get some help around below.'- So I''
ve figured I ' d go play some catch outside with the boys.- You ' re funny. Okay, among the kids is in karate, the other'' s at a drum lesson in Bradenton. – Bradenton? Where is that? – Like a hr away.- When does he get chosen up? -45 minutes.- So ought to I go and also'– And also when you ' re back, I require you to deal with that research. Tackle, obtain it? I figured if I place sports words therein, you'' d be extra likely to aid. -Research, shouldn'' t be also bad. – It'' s intermediate school math.- I believe I can do intermediate school math. – Can you clarify algebra word issues to a 12 years of age? – Sure. – Without it ending in splits? – Math makes people cry? – So pick ups, homework, dinner.

– Wait, go obtain the kids or begin supper? – Yes. – Which one? – And also then can you take a look at this? See exactly how it doesn'' t close completely? – Okay.- And afterwards if you can recaulk all these joints. – Got it. – And after that the lawn is a mess. – You have a whole lot of and after that. – And after that do you believe you could assemble among those garage company cupboards? And then the attic is getting complete. Can you remove several of this things? Do we actually require all your MVP trophies? Begin, Tom. And after that I volunteered to enchant all the girls' ' head pieces tonight for the recital tomorrow. – What does that involve me? – You can assist. Yay! You recognize just how to work an adhesive weapon right? – Glue weapon? – So listen, tomorrow is quite wild.

– Okay. – The kids have a very early release day. – Why would they have a very early- – Parent-teacher seminars. – Right. – The only time left on SignUpGenius were 1:30 as well as 1:40. – So every 10 minutes? – No, they'' re every 20 minutes, so it'' s double-booked. – Okay, so you require me to- – So what would certainly be wonderful is if you took the 1:30 and I'' ll do the 1:40. You obtain performed with the conference after that head over to Lorraine'' s residence.- Okay, who ' s Lorraine? – She'' s the president of the PTA. I told her I would assist stuff some thank you gifts for the educators prior to they left on springtime break. – Hey, would you desire to go do that? – No, because after the 1:40, I need to obtain our little girl as well as take her to the dental practitioner after that come back to college for the basketball game at 4:00, get from track technique at 5. I'' m likewise supposed to be at Krav Maga later on at the very same time as her dance recital.

– Yeah, yet Gronk as well as I were supposed to go jet snowboarding tomorrow night. – You have to go to her dance recital. – Oh, I bet that'' s adorable. When does that beginning?- 5 o ' clock. – Okay', so when does it end?- 10 o ' clock.- It ' s five hours long? The number of dancings is she in?- One at the very start and after that one at the very end.- Well, can we go jet snowboarding in between? -You ' re so amusing, babe. – (sighing) Okay. Well, I guess I'' ll call it Gronk as well as inform him that I'' m active. – Honey, allow me slice that for you so you can most likely to carpool. – Right, in Bradenton. – Yes, in Bradenton. And you understand what? I was assuming later on today we can meal preparation before the bedazzle job. I am seeing season 2 of “” Love is Blind”” but I'' m just on episode 2. If you want, I can go back and also we can simply begin it over and watch it together. You recognize, just actually go through that trip. – I'' m gon na a quick call. -As well as you know what? I saw that this weekend, there'' s a Greek festival.

– Hey Bruce, what'' s up, guy? -As well as you know I like souvlaki. – Keep in mind when I said I was gon na retire? Like entirely joking. Could I such as return? – Oh my gosh, this is gon na be so much enjoyable to have you home. – So thrilled. Yeah, no, sign me up. Like we'' ll simply call it like unfinished service. End scene. – Can I inform you exactly how little I care regarding Tom Brady retiring? – I know, that'' s fantastic. You know what? I'' m glad we ' re placing this at the end and also not the beginning of the video clip.

– Well, I simply I'' m like, of'course, it ' s great.
It was huge, it was large information in our residence. – I assume a lot of people were interested in it. Below'' s the fascinating part to me. Like what occurred when he went residence? I'' m sure he ' s an excellent dad. He ' s an excellent other half? All these points. If you'' ve invested 22 years of your life far from all this stuff that we'' re handling currently like carpool as well as traveling sporting activities.

– Do you assume Tom Brady is Dealing with carpool? ♪ Take a look at our merch ♪ ♪ Have a look at our book ♪ ♪ Take a look at our blog site ♪ ♪ It'' s at theholdernessfamily.com ♪ (rock-and-roll).

– I ' m totally all set to do my component.- Okay, that ' s Lorraine?- It ' s five hrs long? I'' m sure he ' s a great dad. He ' s a good partner?

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I Retired Rich At Age 27…And This Is How I Did It

Today I want to share with you exactly how I retire at the age of 27 how I did it and maybe how you could do it as well you see I started very early at a young age the path of entrepreneurship I started my first business when I was in high school just with a couple of buddies mowing lawns for people in our neighborhoods that's my very first business there are three things that I did during this time that allows me to retire young and with higher rich so the very first thing is this I focus on developing what I call high income skills my high income skills skills that allow me to bring value to the marketplace in exchange of money now I define high income skills as skills that could make me $10,000 or more per month you see the first five years of my business career when I was getting started the first five years I didn't take a single day off I was working 12 to 14 hours a day seven days a week for the first five years while all my friends they were out there drinking drinking and having parties and chasing girls I was fucking working I sacrifice I made a lot of sacrifices I believe if you don't sacrifice for your dream then your dream becomes your sacrifice so I made a decision I pay the price early on I spent a few years of my life working on myself working on my business doing the things that most people are too lazy to do not willing to do so I could have what most people cannot have the very first high income skill that I develop was copywriting now you might wonder what that is well it's simply the skill to use words to sell that's it Prine persuasion or persuasion in print and our words running a one-man advertising agency myself if you watch the TV show man man that's kind of what I was doing without all the smoking and all that bullshit but I was basically a cocking gun in my early 20s working with companies working with entrepreneurs and I was making 10,000 a month $12,000 a month in my early 20s and at the time I thought he was it was like I felt like a million bucks I thought it was the most money I've ever seen and I did that then later on I took that money the income did I earn I put that aside and I started coin called a scalable business now if you want to retire early and retire young one of the most important things that you have to know is noticing identifying trends at a time I went onto the internet I saw this trend on the Internet we're talking about back then remember Netscape dial-up modem I'm talking about overture for pay-per-click you know good old days you're watching this young young guys you may or may not even know this but I'm talking about Yahoo for search engines okay Facebook and then later on Google but I'm talking about that so when I got started back then early and I noticed a trend on internet and I was importing collectibles from Hong Kong Bruce Lee collectibles actually and I was flipping them on eBay I was doing affiliate marketing I was doing digital marketing online I was selling digital products before PDF before all these things were even popular software all these things and that's how my first bucket of money then I took that money and I saw some of those physicists I cash out and I took that money and invest in real estate then my investments are able to support my lifestyle and that's how I retire at the age of 27 but here's one thing I've learned through that experience at the age of 27 I thought this was my dream I thought I want to get to a point where I don't have to work anymore I'll sit in a beach all day and that is going to be it and I did that the first month first 30 days I was sitting on a beach on English pay just to be there every single day right looking at a beach looking at the ocean I thought I have made it you know what all I got was sunburn that's it you may dream I'm sitting on a beach every day I'm telling you when you could do it I was bored out of my mind I thought this is fucking stupid I work so hard to get here and now I'm sitting on beach doing nothing this is dumb like did I work all like this heart and may all that sacrifices for this like come on because you've got to understand when you're entrepreneur I was going like this every day go go go go go suddenly when you have nothing to do when you cash out when you have investments you're like okay I guess what else do you do right after 30 days of that I was sick and tired of it I'm like this is a dumbest thing ever so the second month I did something different actually thought you know what I'm gonna I'm gonna watch the movies so at a time I rendered a lot of movies a lot I was watching six seven movies the DVDs stack of them every single day let me tell you something I love movies don't get me wrong but when you're watching six seven movies every fucking day you don't like movies so much anymore believe me okay after 30 days of that I'm like this is again the dumbest thing ever i I just felt like I so lazy I felt like I wasn't doing anything with my life then I went to talk to my mentor and he said okay Dan he's what I want you to do I want you to start in other business I said no no I'm not gonna start another business I was killing myself all these years so I could retire you don't understand I'm not gonna work he said no you're gonna start outta business I said no I am NOT gonna start down to business he said you're gonna start another business I said no but this time he said you're gonna start a business from a totally different place because now you're made it you could start your business coming from a place of strength coming from a place of abundance coming from a place of something that you want what do you want to create build it around your wor strength build it around your passion because now money's not an issue you're not just doing to make money what could you do how could you use all the skills that you've accumulated you've developed all the business acumen all the knowledge that you have how can you use that to do something great and I thought that I could do so that's my story that's how I retire at the age of 27 I don't know where you're at in your journey maybe you want to retire young maybe you want to retire at age of 45 55 65 I don't know where you're at but what I do know is it's possible and what I also do know is once you get there there's always an other step there's always an other level so don't wait don't feel like you have to get to a point where hey you know what I'm gonna spend my whole life doing stuff that I hate so I could get to a point where finally I could do some stuff that I love No enjoy the journey success is a journey not a destination

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Retirement Planning Webinar – 12 July 2021 Australian Catholic Superannuation

I'' ll just wait for a min and after that obtains stuck. Alright. Good evening, everybody. My name is John Cheney. I'' m the local manager for Western Australia and uh this evening, I'' m joined by Jolene Stockwell who is our monetary organizer in the Perth office So, welcome everyone As you might be aware, we weren'' t mosting likely to hold this as one-on-one conferences today as well as Wednesday due to the fact that of the lockdown a number of weeks ago and also as it is the extreme weather warnings This week, we have chosen to um to make these available as webinars. I do thank you for uh altering your plans and also I wish that you get the complete advantage out of this um out of this webinar this evening. So, we'' ve called it the retirement preparation. What you need to know to plan for your future the webinar we expect to compete about an hour.Um I can not offer you a precise timespan however uh basically a hr and afterwards we likewise have the capacity to to take concerns this evening If if the inquiry is not answered. Uh this night, we will absolutely obtain somebody to to get back to you in the next couple of days and uh and also take it from there. Without further ado, I will certainly proceed on if I can. Jolene, can you Thanks. Initially of all, uh we'' ll do a welcome to country. I would love to recognize the standard custodians of the land on which I work and also live as well as acknowledge their proceeding connections to land, water, as well as community I pay regard to elders, past, existing, as well as emerging So, if you have participated in one of these, webinars or seminars in the past, this display will be rather familiar to you. It is our please note and essentially, it'' s informing you that anything that we state tonight is of a general nature and does not think about your individual, monetary circumstance.

. One of my coworkers mentioned um recently, if you can read everything on this page, you'' re not ready for retirement however essentially, uh by by disclaimer, this uh web page, this will certainly obtain uh Jolene and also myself off the hook without risk and compliance group. Thank you for that one. some interesting information as you may well be conscious, Australian Catholic extremely is readied to merge with another fund non-government institution super which is down uh today referred to as NGS Super and we'' re at the stage of due persistance which can take some time and also we'' re really hoping that um very early in the New Year, the 2 funds will collaborate which will certainly an excellent result for the Catholic community in the sense that uh both funds share the very same worths as well as we we uh we share a great deal of typical uh goals and also values as I discussed as well as if the the uh the merge entity pertains to fulfillment, we will have more than 200 thousand participants in the funds as well as over twenty 1.

billion dollars as funds under monitoring. So, that would certainly be a fantastic outcome for for both funds in regards to providing uh sustainability in the future and proceeding the job that we have corrected for over 30 years. Um as in our corresponding funds. So, there is even more information on our website if you most likely to Catholicsuper.com.AU slash Merging and also over the coming as well as months, we will certainly send you more info as it concerns hand however we'' re all extremely fired up about this merger and also um simply waiting on the green light to ahead up for us to proceed with that. Thank you for that. retired life planning as well as establishing objectives for our retired life. Each and also every one of you In this webinar, I'' m sure has various suggestions, various goals in terms of what'' s you ' re looking for in your retirement on this listing, you can see a few points which currently are probably not uh available to individuals Just recently retired.So, for instance, I'' m not sure that lots of people would intend to hop on a cruise ship presently and sadly, not several people can take a trip far from where they live. Obviously, we hope that that will alter in in the future yet that'' s completely out of our hands as well as II do want to send my finest dreams to to anybody who'' s in New South Wales this night as well as as well as on this webinar. um we are all reasoning of you as well as wish that points enhance uh very soon. There'' s a great deal of things there which we can look ahead to and I'' ll now hand over to Jolene that will tell us just how much we need to have for for our retired life. Thank you. Excellent night everybody. Uh thank you for joining us. Um particularly if you'' re personally borders since it'' s the 2nd wave of the storm seems rolling through.So, thanks for

joining us Currently, these standards are this evening with the retirement workshop. we are mosting likely to discuss some things around the age pension plan but we do have age pension plan and also chink certain seminars as well as webinars throughout the year as well. So, if you ' re searching for a much more in depth view on those areas, please'take place to our website on a semi normal basis to look into those as they come up with these lifestyles. everyone that I talk to regarding them is how a lot do I need? And also the inquiry is, well, what do you do? Going back to what I was stating about retirement being different for everybody. This is a guide blog post to assist you see where you sit. So, obviously, if you ' re only on the age pension plan, then, points are going to be a little bit tight, modest. You ' ve got a bit more adaptability and comfy is precisely that but Take a look at that and also see where you sit. It ' s worth recognizing a little bit much more regarding what ' s below those information, alright? If you ' re on the age pension, you may be looking at'actually brief day journeys, you'' ll be selecting and choosing which actually set you back reliable ways you'can consume out regional clubs, affordable takeaways, and it won ' t be a regular thing when the show comes to you, when your license comes due, it will certainly be a wee little bit tight.This is the finest means of placing it. After that, you go up to a small retired life and points obtain a little bit extra flexible. The most effective means of thinking of this is that if things break down, after that, yes, you can manage to fix them. You may not be able to pay for to change them So, that might indicate a little bit extra making. do or conserving up a little much longer whereas, when you ' re because area, after that, you ' ve obtained the versatility to take care of points as they emerge. You ' ve got your private health. You can remain to be quite social as well as'go out I had a really good concern today. In fact, someone said to me, oh, alright so it consists of an annual holiday. Are we speaking Bali or are we Talking.dot Dot? I said, well, That ' s where every person ' s individual circumstance comes in. one annual holiday in Australia. A person might state, well, you recognize what? I can take 2 vacations if I go somewhat more affordable and also someone else may claim, well, in fact, that ' s not rather enough due to the fact that I ' ve obtained family members that live further a field.So, I ' ve obtained to take a trip a'lot even more So, that offers you a little bit of a summary of what do those way of livings

imply.'Simply going back to the numbers briefly comfy for a single. You need 4460 and also a fifty percent for a couple Modest is around twenty-eight for a couple. It ' s just shy of 41 and after that you have the complete pension plan. So, when you ' re taking a look at well, where do'I get that from Then, you ' re looking at points entirely So', with that, If you ' re checking out whatever that you have, you may have your incredibly, you'could have your residence shares, money home, and after that you ' re encountered with the inquiry. If you do have a few of those points, which ones are you mosting likely to use, you know, for some people, they might have a family building that has a substantial amount of nostalgic worth. so, they intend to keep hold of it for as long as possible. For other individuals, it could be a wonderful to have but they'' re quite pleased to, you know, liquidate their rental when and if their retired life needs. Okay. So, the most vital point there is whatever you have, how can you develop it up to make sure that it'' s sufficient Okay.Thank you, Jolene. I

ought to state that we do have AQ and a center on on this webinar. If you have any type of inquiries, please go on to that facility and upload your concern to us and as I mentioned, we we uh we ' ll do our really best to'address them this evening. Um so, just in uh our well-regarded coworker in Sydney is in control of that feature and also at the end of session. Justin will um will locate the concerns at us as well as I'' m really hoping that we'' ll have the ability to um to aid you with that said. also at the end of the session, uh you uh Justin will certainly advise you that there'' ll be an Email thanking you for attending and uh there will be a study, a brief study for you to fill out which you hope you'' ll you will certainly do as well as send back to us. Continuing with super as well as so why why do we have incredibly and as well as what are the benefits of having it tax obligation comes Straight to mind. So, if so, when your company is contributing to extremely Not only is the tax the contributions tax obligation on that employer contribution set at 15% yet likewise the profits in your very is evaluated a maximum of 15% If you contrast that with various other financial investments outside the incredibly, you can see that there'' s rather a difference and uh super annuity ends up being really tax effective.

if we carry on to change to retirement. Sorry, Darlene. Um transition to retirement pension plans. The tax obligation is the same. 15% on any kind of profits however after that it becomes extra fascinating and even much more eye-catching if you go to an account-based pension since at that stage, the tax obligation on any on any kind of earnings is absolutely no When once again, if you compare that with any other investment out there, that is an incredibly amazing and also attractive proposition Thank you. Alright. So, when can you actually access your super and what are the tax obligation effects on those? So, presently, if somebody is age fifty-eight, they can in fact tell their employer that they intend to retire and also have access to their super Currently, this is just a little window because any person who'' s born after First of July.1964. the age that individuals can begin to access their super will certainly raise the age of sixty. As I discussed that there are a variety of people that might remain in that 5859 age braces who are taking into consideration retiring as well as in reality, they they can do that They should take into consideration that there there could can be some tax ramifications because age sixty is the the gold age in terms of taxation. tourist attractions, Um so simply know that if you are under age sixty as well as thinking about retiring, that'' s um they can be a percentage of tax obligation to pay. From age sixty points come to be extra interesting as well as Not just can you access super via what'' s known as transition to retired life account which Jolene will certainly talk regarding in even more detail. um soon um but also if you do retire, you have access to either a swelling sum in or converting some or every one of your super into an alloted pension plan as well as uh as I claimed Jolene, we will discuss that and also um go right into more detail and after that from age Sixty-five, things really do become a lot more eye-catching as well as versatile in terms of what you can um accessibility basically from age Sixty-five whether you'' re functioning or not, you can have full access to your very and also as we saw in the previous slide, the the assaults on um on the earnings.If it ' s in an account by'pension is no as well as if you take it as a round figure, there is no uh PAYG tax obligation to pay on that round figure. So, those are the three age braces which um which currently impacts us So, if we return an action, consider exactly how do we money our retired life? if you ' re still functioning. there, there will be a variety of manner ins which that contributions are being included to your account and also one means which which you can include in your very if you ' re working is through what ' s referred to as wage sacrifice or pre tax'payments Now, remembering that the tax obligation on any type of payments that they made as an income sacrifice payment is set fifteen. 15 %. We can see from this table below. that if you gain more than 18200,$18201, your low tax rate is 19 %. If you are salary sacrificing any of your hard earned cash into incredibly, you are, you ' re currently making an a tax obligation you already have a tax obligation benefit.Um as people have Um higher wages. the the destination and also the benefit enhances a great deal much more based on their minimal tax price.

That that is why wage sacrifice might be of interest to some individuals as well as right here we have an instance of how that functions. So, returning to my previous comment, that income sacrifice contributions are exhausted at 15 %If we look at the middle column, Where this certain person is not making any type of added contributions. The gross income and also this is for an individual who ' s earning 100 thousand$ 100000, the gross income is um 3800 3846$3846. If that exact same person was to take into consideration making salary sacrifice contributions of $192, per Fortnite which works out to be 5%of their wage, The taxable revenue minimizes to 3600 3653 $3653 as well as then you can see the effect that carries take house pay If that individual is not making any extra payments, take residence pay is 2008 2884$2884 compared to take residence pay of 2750$ 2757. If that person is Those certain wage sacrifice payments. So, You can see that there exist are two benefits there. One including added cash to your incredibly and the second with the taxation benefits, What are the restrictions to these contributions that you can make? So, regrettably, extremely innovation has a great deal of

jargon in it and also um our work is to try and also make that simple for you. First of all, I ' m going to talk regarding concession payments and their limits. So, giving in contributions include any company payments which can be wage. incredibly warranty payments, and wage sacrifice payments which I just mentioned your company may or might not be paying extra employer payments and also the last one there is an individual insurance deductible contribution which is something uh relatively recent in Super Annuity and also we ' ll speak about that a little bit a lot more um brief So, up until the thirtieth of June this year, the giving in payment cap was $25000 This has currently changed from the initial of July to 27 27005$27500 for the next year. And as I said formerly, the payments tax for the for that cash is 15 %. Now, a fascinating growth with giving in contributions. So, if you could just go back Jolly is that for the last number of years, you can really capture up on any type of unused giving in or contributions which you may not have made Simple example.If someone had actually made concession, contributions of 2020,$1000 last year, they can currently place in greater than the 27 thousand. 27500 for this specific economic year as well as to capture up um which might have been um a lot more of a quantities that that they had not added the previous

Economic year. So, an excellent way to examine this is to take place to the my Gov internet site because that will certainly inform you what your deductible or your concession contributions have been as well as um if you require more recommendations then, then we can aid you with that said but the um as I said, the confessional contribution limitations have increased for this year as well as I should additionally mention that company. limitation or contribution has gone from 9 and a half percent to 10%from the first of July.So, that might additionally require some further modifications in your reasoning as to just how much you can place in for this economic year. So, that was concession payments. I ' m currently mosting likely to state we ' ll speak about non confessional payments. in English is truly after tax obligation contributions or personal contributions. So, the restrictions for this have also increased from the initial of July from$ 100000 to 110 110 thousand$ 110000 for for the financial year. So, if you ' re under the age of 67, Not just can you make that, if you have this type of cash offered, uh not just can you do that for 1 year however additionally for a 3 year time period.So, basically, what that implies is that if you ' re eligible you might effectively contribute 330 330 thousand$330000 of after tax obligation payments for this economic year and also not make anymore after tax obligation contributions'for the following 2 years. where it becomes intriguing remains in that middle brace. um between the ages of 67 as well as 74. the formerly you needed to satisfy what ' s recognized as a work test which means that you'would have to show if asked that you had functioned 40 hours in a 1 month period in because particular monetary year recognize that that has actually now changed. while doing so, John. So, while doing so. Yeah, it ' s it ' s been proposed with a spending plan to start from 1, July 2022. We are still kind of waiting on it being settled but it does look very, very likely excellent. Okay. That ' s um that may be of some interest to to some of our participants and also if you um some monetary guidance on that, after that, we ' re more than happy to to aid with that and also after that regrettably, from age 75 as well as over no more payments are enabled into super Those are the the limits as well as the age brackets.I will additionally um really briefly speak concerning various other ways which you can add to incredibly downsize'the contributions Now, this was presented a couple of years ago and primarily, it indicates that if you, well, prior to um um thirtieth of June this year. If you ' re age 65 and also over addition to the non giving in restrictions which I revealed you on the previous slide. One of the modifications in the spending plan is that that age limitation of 65 is being altered has actually been minimized to age sixty So, that might likewise be of some passion to some members and if you need a more suggestions on that, we we can assist partner payments. This has been around for for a long time and also the way it functions is that if spouse is gaining even more than the other partner. a payment could be made right into the various other spouses. super an account and the method it functions is that if a contribution of claim$ 3000 was paid into the various other person ' s account, the contributor would certainly get a tax balanced out of 540$ 540 in in their tax obligation return. For some individuals that might be eye-catching as well and also the 3rd one is a loan consolidation you.

The majority of us are now aware that if you have more than one extremely, an account, you ' re paying fees on on each of those accounts as well as um it it may remain in your benefit to think about bringing those uh several accounts all into one account and uh not only does it keep them, is it simpler for you to watch on'on what you have however as I claimed, it additionally reduces the amount of charges that you ' re paying.So, so are a few of the ways that you can contribute right into your account. and I obtain the more fun section I get to speak about how to access your extremely and also what you can do with it. So, I ' m mosting likely to start with round figure and also I ' m going to begin with retirement problems of launch but then, we ' re mosting likely to pay a little bit much more interest to the earnings side of points as well as just how that can function. You ' re permitted to gain access to lump amounts from your super Once you ' ve met a condition of release. ', I ' m going

to function backwards age Sixty-five. This is magic. because it doesn ' t issue if you ' re working a little bit or a whole lot or if you ' ve been with the very same company for twenty years, of you being with a company for 20 minutes.If you are 65, you have full accessibility to your very between sixty and 64, you need to take a few various boxes. Number one, you can retire if you ' ve got the money, you put on ' t desire to work anymore retire. you'put on ' t mean to function 10 or more hours a week, you ' re retired obtained complete gain access to in between sixty as well as 64. If'you'alter companies, any kind of super annuity that you'have collected as well as accumulated as much as that factor, you have access to If you ' re one of the people that have accessibility to your very at age 58, as well as 59, then you can access it with full retirement. So, that is you do not intend to work 10 or more hrs a week The only sting in the tail for any person accessing it fifty to fifty-nine is that there are more possible tax obligation effects Any kind of withdrawal is free of tax. Okay? We see a great deal even more people looking at their very annuity and accessing as well as looking at pension plans from age sixty when those repayments are tax obligation cost-free. So, we ' ve just covering off the super annuity accounts and also taking a look at just how you can build it up. After that, when you ' ve got access to several of it. Now, if you ' re still working and also you ' ve not clicked among those boxes that I pointed out for full gain access to but you may still have the ability to access up to 10%through a change to retired life pension plan, alright? We ' ll have a look at that as well however

some some factors why people may desire to gain access to it is to enhance what they place in. If you ' re looking at the list of all those means that you can place in extra, you recognize, some individuals truly want to take benefit of the tax obligation savings by income sacrificing as much as they can up to all those caps that John mentioned however possibly they can ' t pay for to maybe they ' ve obtained home mortgage dedications and other commitments that they need a certain quantity of cash money circulation. A change to retirement is where you ' re putting in to your extremely however you ' re taking out from your extremely at the exact same time.

I ' m currently going to discuss we ' ll talk regarding non confessional contributions. Yeah, it ' s it ' s been proposed with a budget to start from 1, July 2022. I ' m going to start with swelling sums and I ' m going to start with retired life conditions of release yet after that, we ' re going to pay a bit extra attention to the earnings side of things as well as exactly how that can function. You ' re permitted to access lump amounts from your incredibly Once you ' ve fulfilled a condition of launch. If you ' re looking at the listing of all those methods that you can place in added, you understand, some people truly want to take advantage of the tax savings by wage sacrificing as a lot as they can up to all those caps that John stated but possibly they can ' t afford to maybe they ' ve obtained home loan dedications and various other commitments that they need a certain amount of cash money circulation.It ' s like anything begin Ni away and having a read of it so that by the time you require to consider other people or on your own with it, you ' re a little bit a lot more acquainted with some of the terms and also get to out as well as please ask for assistance because that ' s what we ' re below for. It ' s regarding helping you comprehend that you understand what if you ' re utilizing up your cash money, if you ' re making use of up your very, after that this the end result that you ' re going to have. If you ' re in that certain space or age bracket as well as you ' re you ' re looking for recommendations or info, I must claim you in the webinar, then we ' re able to produce that and uh Jolene additionally stated regarding the age treatment um offerings as well as there ' s a great deal of which which we are able to offer you and they um those webinars have actually now come to be very very popular.

Currently, these are figures as of March, they have indexed up somewhat so they are a little higher due to the 1 July index as well.Okay And a pair this is especially helpful if you have one individual of the couple still working in retirement doesn ' t imply the individual that ' s age pension plan age immediately doesn ' t get it. It ' s like anything begin Ni away as well as having a read of it so that by the time you need to consider other people or yourself with it, you ' re a little bit extra acquainted with some of the terms and also reach out as well as please ask for aid since that ' s what we ' re right here for. It ' s regarding aiding you recognize that you know what if you ' re utilizing up your money, if you ' re using up your incredibly, after that this the end result that you ' re going to have. Jolene and also yourself would certainly sit down as well as go via your budget which we ask from you before the appointment and after that based on the discussion uh Jolene would be able to function out if there ' s any kind of areas which which she can offer advice for you as well as if there ' s no areas or absolutely nothing which um which requires attention.Then that ' s the end of the discussion. If you ' re in that certain room or age bracket and you ' re you ' re looking for suggestions or um information, I should say you in the webinar, then we ' re able to produce that and uh Jolene additionally mentioned concerning the age treatment offerings as well as there ' s a great deal of which which we are able to provide you as well as they um those webinars have currently come to be extremely very prominent.Um for you whether you are an extremely an account participant or a pension plan account participant Um a lot of interactive things and also I do advise that to you. Um all we need is your mobile number and also an Email you know, for you to sign up and um with your customer ID, you are after that uh off as well as running as well as can discover the um you recognize, the numerous tabs as well as what have you on our member portal.So, If you haven

' t done that already II extremely much advise that to you. as well as I see that Justin is currently offered you recognize, I ' ve had concerning four inquiries'coming through up until now. Well, likewise some added ones that participants of us um the information on the slides which Jolene is uh desperately to and answer those concerns directly to those participants as well as um I ' ll additionally simply intend to repeat something that ' s a bit previously concerning the chat box there.I ' ve put via the link.

If anyone desires to make a visit to see Jolene or the restricted guidance team or the John to get to back to you and also I can see below on my E-mails, I get those and also a single person ' s already finished'that currently for a variety of advice. If you did want some more information, please click that link as well as also as John stated, I ' ll be sending a survey in the future this evening for you.Um so, the first concern that we had I am 65 and strategy to proceed functioning until I ' m seventy. Is it worthwhile checking out a TTR or change to retirement? assigned pension. Head on to Jolene to us please. It can be valuable. The main uh advantages if you ' re looking depends on your objectives. If you ' re aiming to change to retired life to assist increase your financial savings, then, it ' s a concern of are you putting in your concession? Contributions up to that 27500 cap, Okay, So', you ' re already adding as a lot as you can, after that, you don ' t require an added help to place in yet if'due to your commitments, you ' re just placing'in Claim 15 thousand. You ' ve obtained that spaces that you might increase to. Then a shift to retired life can help offer you with the earnings while increasing up your pretax payments, fine? Accessing those tax obligation savings is one benefit of the change to retired life. The various other advantage is merely if people want added earnings, possibly they want to reduce their hrs yet maintain their pay the same. It depends on the goals. If there ' s a for rise in income. If there ' s an objective for keeping revenue on minimized hrs or accessing those tax financial savings and also those are kind of the regular trigger points where we claim yes, it ' s CTR can aid people keeping that. Alright, thanks Jolene and also I think possibly one other thing just to note for that specific member since he ' s over 65. It'' s truly simply a typical designated pension. actually, isn ' t that the CTR lower the sixty-fifth birthday. exactly. Yeah. No.

As well as Sorry. you. I was simply mosting likely to state as well as those typical account-based'pension plans with tax obligation free incomes. They ' re wonderful. When you get them Absolutely, definitely. Uh the following inquiry I ' m going to direct to you, John. Um so, this one is for non consensual'contributions to super, what what is the tax obligation rate relevant? That is on input not incomes. Alright, can you repeat that again? Yes, so for non concession contributions to incredibly what is tax rate relevant. That gets on input not earnings. So, if somebody ' s putting cash into Super Anu as a after tax contributions, fine? Um the bright side exists is no tax obligation on those contributions. The'suggestion is that at some point in its life, the cash which you are taking into very an account has already paid a tax obligation has actually been paid on it.Um Therefore, it would certainly be deemed unreasonable for that to be tired once again. um as an after-tax payment into your extremely. The great information is that there is no tax obligation Many thanks, John.

Um the next concern, I ' ll speak with you. Jolene is what are the benefits of after tax obligation payments? John ' s has talked around, I guess the there ' s no tax obligation as well as after that what are the advantages'of doing it? Certainly, the large of is funny is you ' re putting more cash into your retired life cost savings and that cash is'spent. It ' s going to be trying to gain more revenue for you depending on your financial investment selection yet there are a couple side advantages. One of those I discussed previously is that if by possibility,'you ' re accessing money before age sixty, after that those after tax obligation contributions, you can access them tax cost-free. Where ' s your various other payments? There ' s tax implications Also, there ' s prospective benefits. if your recipients are not your partner or dependent children. So, within incredibly, there is people that you can nominate as a binding beneficiary such as grown-up youngsters but they ' re a tax obligation beneficiary.So they still encounter a little bit of tax should they inherit straight from super as well as if you have a pool of those after tax obligation contributions, then, that pool, your beneficiaries free of tax down the road. The large advantage, even more money in super and also a pair of side uh possible benefits is that since it ' s money that goes in Tax-free, it constantly goes out tax obligation cost-free to whoever it ' s paid to Alright, thanks Jolene.The next concern. is to once more, Jolene is I ' m fifty-eight. Just take uh a payoff or a payment of the fitness center for a worker'' s comp, or conditions are resigned. What would appreciate some advice the 5859 years of age plan appears

intriguing. I guess it ' s actually going to be being available in as well as conversation with you as well as have a real correct strategy'done. It ' s really difficult possibly in this type of sport to offer advice as well as wear ' t be a basic comments. Yeah Typically, this is an intriguing circumstance since it really might be where somebody looks at setting up'a different very an account, all right? As I discussed, if you ' re in that 5859 bracket and also you ' ve obtained accessibility to incredibly yet you ' ve got to retire or possibly can establish up a retirement account if you are meeting that retired life problem but if you ' re still still intending to work, it'might be that you ' re in fact looking at that cash and you ' re reasoning of investments outside of super.So, if you ' re not going to take one of those boxes for gain access to. after that, it could be that you look at exterior investments to ensure that you retain access to that payment number while you ' re developing yourself beyond your old job and beyond your

old job'due to the fact that you could be taking a look at a few alternatives to transform that. you could not prepare to offer up work completely also though you ' ve got uh the payment So it may be that um you understand, depending on the limitations concerning using that cash might really be considering financial investments outside of very to ensure that you wear ' t lock it away. Many thanks, John. uh simply a suggestion. to obtain those questions in. We'' ve just got two left as well as you ' ve obtained that eleventh hour question that ' s uh gets you in your mind.Just shoot that off currently due to the fact that I ' m ready to ask the final two questions that I ' ve got. another is available in. We ' ll let that one go via. Jolene, I-69 and have a super account is your advantage'for me to transform to a pension account. I ' m still working part-time. Mm hmm.'In that case, you ' d be looking at 2 accounts, incredibly account as well as the pension plan accounts, The advantage of the pension plan account is the tax free earnings. So, having cash in that account indicates that super accounts, same financial investment choice.' You could get five or 5 and a half percent on it yet in the pension plan stage because you ' re not paying tax on the passion you may be gaining five and also a fifty percent, six and also a half the disadvantage of is that you have to take out a minimal repayment yearly. So, while you obtain the benefit of those free of tax incomes, you still might have, you ' ve obtained a pension account, you'have to take a payment each year however if you ' ve got use for that repayment, then, there can be some terrific advantages to moving into that pension phase. Hey, I think we ' re having a few technological problems there. You see the'battle in and also out however I can hear you during yet I couldn ' t see you'there. The lights are on time or in the office and they put me in darkness however they flipped back on.

Oh, excellent. I'assume we need to foot the bill. Great. I ' ve hoped. So currently, um there ' s one last inquiry that I can. Oh', sorry. The 2nd one ' s being available in as I ' m almost to um to ask this. I believe it ' s going to be uh that however this set right here I ' ll request for John also.'what costs relevant to CTR that is I would currently pay charges on my account. what costs or what added fees are there for TTR Fund Okay. Thank you, Justin. So, There are fees. Um if you have ATT our account or shift to pension and also primarily, they ' re the exact same costs as what you ' d have in the the super account. So, um basically what that means is that if you have a sober account, you have costs, if you have a pension plan account, you also have costs. Um if you'look at our item disclosure declarations, uh you will certainly see um what our fees require And also that ought to address your inquiry. Truly the same phases are actually well, I ' m extremely and um and um because it ' s all a property, I state the only extra charge would certainly be the$78 a year for that admin charge. That ' s the only additional quantity you ' ll actually be paying. Um yeah. yeah, John, I claimed this is right up your alley. Um this next inquiry simply since of your heritage as well as uh we won ' t state the outcomes this morning.Um just how does the UK personal pension plan affects incredibly So, that is an excellent question. um as well as I should probably postpone that to Jolene. Okay. Alright. UK, Private pensions are affecting your very In other words, it doesn ' t really have an effect on your extremely however it can have an influence on your pension plan privileges within Australia. So, if it is income, it will count as earnings within Australia. Um If you ' re looking at round figure, after that there can be other uh factor to consider there yet the short solution is the UK pension plan doesn ' t affect your extremely annuity in Australia. Thanks, Charlie As well as the last question that we ' ve obtained right here as well as we ' ll close this off as a fortunate last What? Having a pension plan account affect the capability to get an a client I ' m mosting likely to take this.I ' m mosting likely to be hoggish. I ' m going to take all the inquiries. Um the answer is perhaps If a person is a pension age. So, if my age pension plan age Sixty-seven as well as I'turned 67, then, whether

my money is in very or pension plan stage, it doesn ' t issue. It ' s dealt with specifically the very same, fine? I ' m a pension age. All the cash counts gets a bit much more intriguing when you ' ve obtained a hubby and also spouse or when you ' ve obtained partners because if someone is older, after that what they have counts however the younger individual, the cash in their super'account doesn ' t count till they hit'age pension age. So, if prior to age pension plan age, they relocate their very into retired life pension phase, after that, yes, it will certainly impact on their companion ' s age pension plan, Okay. It ' s not

uh simple straightforward. If your age pension plan age, it all matters. If you ' re not a pension age, After that you put on ' t have the age pension. So, you can do whatever you want with very where it gets a bit a lot more great is when you'' re considering a pair where someone is a pension age and the other person isn ' t since if the individual that is not a pension plan as well as starts an incredibly pension plan,'it will certainly have an impact on the older person ' s age pension. How large an effect,'anything from zero to kicking a person off relying on just how much you ' ve got Alright, many thanks Jolene. Well, that ' s um is it for the inquiries as I can prior to that last one? Just one point I ' d like to say prior to I'head back to John to cover points up.Um simply allow you understand'if you do intend to see a replay of this uh wonderful Webinar from uh Jolene and John, you can view a replay of it on the Finances YouTube network

and additionally um it ' s just this uh session has been live stream on our Facebook page also So you can go to our Facebook web page right after as well as uh enjoy a rerun if uh that uh or whether I ' m in Perth is influencing you from heading out. So, you can watch the replay. Thank you John and Jolene. I ' ll head over to John now to wrap points up Thank you, Justin and I'' m thankful you pointed out um a replay of this session and also not the football. So, Thank you once more for everyone for participating in uh this webinar today'. We do value you putting in the time to to sit and also pay attention to us. We we would certainly have like to have done this face to face as I stated at the extremely beginning but uh in the insane world that we live in, that ' s um that ' s not so easy nowadays however I really hope that you have obtained enough details to to uh to make some type of progression with your retirement planning and please be aware that'we are here to aid you and also whether it ' s um myself with with general advice over the phone advice.um or detailed suggestions in our Perth office. Please uh enter contact with us and we ' ll do our very best for you. So, Thanks once more as well as good evening. Thanks.

There ' s tax obligation ramifications Likewise, there ' s possible advantages. The big advantage, even more money in incredibly and a pair of side uh potential benefits is that since it ' s money that goes in Tax-free, it constantly goes out tax obligation complimentary to whoever it ' s paid to Alright, many thanks Jolene.The next question. As I stated, if you ' re in that 5859 brace and you ' ve obtained accessibility to extremely yet you ' ve obtained to retire or potentially might set up a retired life account if you are meeting that retirement problem yet if you ' re still still planning to work, it'could be that you ' re actually looking at that cash and you ' re thinking of financial investments outside of super.So, if you ' re not going to take one of those boxes for accessibility. We'' ve just obtained 2 left and you ' ve got that last minute concern that ' s uh obtains you in your mind.Just shoot that off now since I ' m regarding to ask the final 2 inquiries that I ' ve got. Um if you have ATT our account or change to retirement account as well as primarily, they ' re the very same costs as what you ' d have in the the incredibly account.

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The Ultimate Retirement Plan | Wade Pfau | Ep 63

[Music] welcome to the market call show where we discuss what's happening in the markets and the impact on your Investments tune in every Thursday on Apple podcast Google play Spotify or wherever you listen to podcasts hi Wade how are you doing I'm doing great thanks for having me on the show you know I'm so happy to have you here if you're in the retirement income planning business or if you're a financial advisor or a money manager somehow managing money in the space for retirement income planning everybody has heard your name you've been around in this field for a long time and as I was looking through your uh resume from various sources it's like okay well what are we going to exclude you know there's because there's so many things that you have done but I thought I would just kind of just fill in for viewers that don't know you a little bit about you um you know you're an active researcher and educator about retirement income strategies you know you do a lot of speaking I know you're going to be speaking here in Denver uh pretty soon uh you are a professor are you still a professor of retirement income at the American College of financial services I am currently yes and the director of Retirement Research for McLean asset management and in-stream uh you did your PhD in economics from Princeton and you did interestingly you did a dissertation on Social Security reform which we hopefully we'll talk a little bit about later uh you're also a fellow CFA Charter holder like myself um and you've got lots of AD you know accolades and some great books in particular one that I really like that you've done is a retirement planning guidebook uh 2021 uh and then you have that safety first retirement planning how much can I spend in retirement etc etc you've done some stuff on reverse mortgages The Unwanted stepchild that actually is a useful tool for many people yet not quite known by many so uh with that said I I was just curious tell me a little bit about your background where did you grow up so uh well I was born outside of Detroit I lived there until I was 15 moved to Iowa after that my my mother is originally from Southwest Iowa so I graduated high school in Des Moines Iowa and then went to the University of Iowa after that so pretty much midwesterner lived a number of different places afterwards including New Jersey Pennsylvania Tokyo Japan for 10 years and then now I live in Texas you live in Texas now yeah actually these pictures behind me and all are all the places I've lived over the years so it's so so you so you grew up in Detroit mostly it sounds like but moved all traveled a lot um how did you go from you know studying what did you study Finance initially when you were in college in undergrad economics and finance economics okay so how did you go from economics and finance to just being so focused it seems like you're focused on retirement income planning well yeah I mean uh financial planning as an academic field is still pretty new and even I entered the PHD program uh in 1999 and actually Texas Tech University started the First Financial Planning PhD program in the year 2000 so it wasn't even an option at that time but academic economics is very mathematical and theoretical and I was always looking for ways to apply to more real world type activities and that's ultimately how I made my way into financial planning indirectly you mentioned the my dissertation on Social Security reform that was testing how in the early 2000s there was a proposal to create personal retirement accounts to carve out part of the Social Security tax and put that into like a 401k style account and I was simulating how that might perform and ultimately that's the same sort of thing I've made my career on at this point which is just writing computer programs to test how different retirement strategies perform in looking for ways to get more efficiency out of one's asset base for retirement now that was during the bush 2 Administration if I remember correctly wasn't it and so and uh what were your findings in that what was your general thesis or not thesis but your general conclusion well at the time what I determined was that it could be made to work but it wasn't obviously a better approach and now in hindsight I realize more and more that there's so little in the way of protected lifetime income that carving out more of Social Security which is that inflation-adjusted protected lifetime income and exposing that to the market as well uh probably would lead to worse outcomes for many people than we do need some risk-fooled income and so now that traditional pensions are going away Social Security is one of the last holdouts and so it probably wouldn't be the best idea to private or not privatize but uh create personal the defined contribution 401K style accounts out of those Social Security contributions very interesting and we'll we'll touch a little bit more I have a lot a few questions on Social Security uh in general um you know from a macro perspective and also a micro perspective personally for uh people so um one of the things that I really like about what you've done is that you kind of take more of a approach that I'm kind of used to like more of an asset liability management approach when you think about funding ratios rather than the traditional way that you hear financial planners talk about it I really like your overall framework and one of the things that I I think is very helpful is your retirement income style protocol your resubm Matrix can you explain a little bit uh to the viewers about your ideas there and and what how that helps an individual determine their overall approach to how they should tackle their retirement income plan yeah absolutely and that's really one of the the confusing aspects of retirement income is there are different strategies that people can use and unfortunately just there's a lot of disagreement and arguments about one strategy is better than all the others and and by what I mean by that is you have What I Call Total return which is just a you build an Investment Portfolio and you take distributions from it throughout retirement you have different bucketing or time segmentation strategies and then you also have strategies that will focus more on having protected lifetime income through annuities or other tools to cover your Basics before you start investing on top of that and they're all viable strategies at the end of the day and that's an important point that Advocates of Investments only don't appreciate how powerful the risk pooling that annuities can do to offer more income how that is competitive with anything that the stock market might do and so people really have options about what they're most comfortable with and that's what the retirement income style awareness is about developing a questionnaire to help guide people in the direction as a starting point which of these different retirement strategies resonates best with your personal Outlook and preferences you may not ultimately choose the the strategy coming out of that but at least it gives you a starting point to say okay it seems like I might look here first as a way to build my retirement strategy and ultimately if that helps me connect to a strategy that resonates and that I can stick with through thick and thin in retirement that can help give a better outcome because they're all viable strategies but where a strategy doesn't work is if you're not comfortable with it and you don't stick with it and you you bail on it during a market downturn or something like that that that's what the retirement income style awareness is really designed to do is just provide that initial talking point on which kind of approach might work best for me to to think about as a starting point yeah I like that because what it's doing is it's basically more holistically looking at how you would can solve the problem and typically you'll find advisory firms that will will overweight if you will one over the other they're like I'm a Time segment guy or I I hate annuities it's all Total return annuities are a scam or uh you know I will never buy an annuity or uh you know Etc et cetera and risk pooling is is something that's really important but it's also very complicated and I think that's why a lot of people have shunned annuities and annuities have changed a lot over the years um and you know coming from my background you know which is more of a total return approach that's great if you have a lot of money but in in other cases you know I think that you can you can you can look at the problem from a optimal way of doing it or you can look at the problem from a way that's actually going to get implemented and work and what I like about Risa is it's practical pretty much all the stuff that you're doing is practical it's not completely theoretical one problem though with that is that you can have somebody who has a safety first for example mindset but their situation is such that if they have a Safety First with 100 of their Capital that they're very unlikely to be successful can you can you expound a little bit upon how you would think about that in terms of giving advice to people in that scenario yeah so that scenario is probably more they do have a safety first mindset but they've been pigeonholed into a total return strategy but they're ultimately not comfortable with the stock market and therefore maybe most of their Holdings are in cash or in bonds which doesn't support a whole lot of spending power and that's you kind of there's three basic ways you could fund a retirement spending goal the first is just with bonds or with cash not really offering much yield on top of that and then to try to spend more than that the um the probability base perspective is invest in the stock market and the stock should outperform bonds and that should allow you to spend more throughout retirement the safety first approach is more now let's build a floor of protected lifetime income that then brings in with an annuity the the risk pooling the the support to the long-lived helps provide more spending power than bonds alone as well and people have that option and it's when the safety first person gets pushed into a total returns probability based strategy and just doesn't invest in the stock market they're ultimately left with bonds which which is the least efficient way to fund a retirement spending goal over an unknown lifetime very true and you know I guess a lot of people did take that approach probably when I first got in this business 20 over 20 years ago there was a lot of people that were doing that who were retired back where the municipal bonds were paying it was it was conducive the market was conducive for that we had high interest rates that were in the long-term secular decline so you had capital appreciation from those bonds he also had reasonably good uh tax-free interest yields that were working for people and inflation was falling um and so now we potentially could be in the opposite inflation Rising who knows how yields are going to work themselves out but um it when you're looking at this um you you bring up this concept of some of the retirement risks and and you have like these uh longevity sequence of returns spending shocks Etc of of the risks that you're seeing out there which one would you say has had the largest impact negative impact on people that they really need to solve for you know longevity sequence of returns spending shocks and surprises well longevity in a way it's the overarching risk of retirement and it's misnamed because it's a good thing it's if you live a long time it's just as an economist will point out that the longer you live the more expensive your retirement becomes just because every year you live you have to fund your expenses for that year so the cost of retirement grows with the length of retirement and then it's when you live a long time not only is there that issue that you're having to fund your budget but then there's just more time for all those other types of risks to become a problem as well with the macroeconomic environment with changing public policy with inflation even a lower inflation rate still is slowly eating away at the purchasing power of assets and then the spending shocks are things like big Health Care bills helping adult family members having to support a long-term care need to to pay for care due to declining cognitive or physical abilities and so forth and so so it's really that longevity is if you don't have longevity there's not really time for the other risk to disrupt your retirement too much and that's why longevity usually gets listed as the primary risk of retirement interesting I hadn't thought about that so a lot of the other risks are kind of correlated to the longevity element um so so really tackling that that that could be one of the biggest parts of all the surrounding risks around that you you talk a little bit in your book a retirement planning guidebook you talk about quantifying goals and assessing preparedness and I I had mentioned before that I like that you're taking your approach more like a Alm or asset liability management type of of an approach which basically that's what it is um and uh and I don't think the average person thinks about it that way they tend to think about it as like I have so much money and I'll be able to with draw so much from it sometimes there's unrealistic expectations about it but one of the common things that I've seen is that most people are not spending the time they need to do on budgeting really to actually even come up with a number or help come up with a number of what your present value of assets need to be to be prepared do you have any kind of practical tips for people and their advisors on how they can actually think about and execute a good budget not only just you know come up with one but actually implement it well now that technology can really help with that and so if people are comfortable with some of the the different websites or software that Aggregates all of your different expenses different credit cards and so forth into one Excel spreadsheet that's a very easy way to to start budgeting now for people who mostly pay in cash that can be a lot more complicated these days I don't use a lot of cash so I just simply when in the rare case that I have an ATM withdrawal I'll just kind of call that a household expense for that time period and not worry about breaking that down much more but uh when you start having those credit cards or debit card type expenses now the the software may not categorize them in the way you desire and so I usually try to not more frequently than once a month but maybe once a month once a quarter download the expenses while I can still remember well enough if I have to change some of these categories and so forth to then be able to keep track of all my expenses and know exactly then pretty much to the scent almost what I spent that year and then to start thinking about well were there any anomalies of course there's always going to be anomalies and to make sure you budget in that sort of thing but that really once you have a few years of expenses down and once you think about bigger Big Ticket items like car purchases and things that can really give you a foundation to start projecting ahead at what your expenses may be in the future as well and then then you have a way to start thinking about well how much do I need to fund those expenses and that's the whole idea of that asset liability matching do I have the resources necessary to fund your expenses are just your liabilities and do you have the resources to be able to fund that with a level of confidence that you feel comfortable with hmm interesting so I I had a meeting with a client actually who was forced into early retirement and a former engineer and keeps meticulous records has for years and uh he gave us the actual numbers for the last three years and I I figured out what the compounded rate was and it was a lot higher than the inflation rate reported by the bl by the government so um I I think there's some disconnect there between you know how we model and reality um you know uh when you look at financial planning software and you look at the assumptions that are the number of assumptions that are involved in the financial software and you know even if you're not taking Point estimates if you're doing Monte Carlo or whatever stochastic process it's very difficult to come up with a robust plan so I'd like I'd like for you to give me some and I know this is kind of a big general question do you have any general tips to people who are doing this modeling on how and for and for clients actually for for individuals and how they can make their retirement more robust to be able to deal with all the changes that can happen in the world like you said public policy changes Market changes Etc yeah you will have to revisit things over time and and as you get new information about your spending make revisions to the budgeting but uh it's still just a matter of when you're like round up your expenses or be conservative with some of your projections there's some categories that are challenging as well like healthcare and when someone switches to MediCare at age 65 that could lead to an entirely different set of health care expenses and with all your expenses on Health Care in the past you might have to completely upend that and and and do a reset there so it is challenging but if you're trying to build in conservative projections the default is usually whatever you believe your expenses will be you just adjust that for inflation every year and most people don't really do that they tend their expenses don't tend to necessarily keep up with inflation over time now that can get complicated but the way I describe it in the retirement planning guidebook is you'll have one particular budget through ajd and then you'll have another lower expense budget after ajd but also building in what if there's a long-term care event and so forth how much additional Reserve assets would I like to have set aside for out-of-pocket expenses that sort of thing and then it's not going to be perfect and it's going to need revised over time but I think you can start to get fairly confident like I've sort of done these exercises I'm still far away from the retirement date and of course I may be wrong but I I think at this point I have a sense of what my expenditures will be or what they can be at least uh over the longer term Horizon of course subject to new technologies new inventions everything else that can happen uh that would change your expenses but at least roughly speaking I think you can start to figure these things out yeah um I guess I'm coming from a practitioner who's been doing it for you know 25 years and seeing the the the conventional wisdom by the best experts at each point in time and looking at how people have actually fared without advice and what I've found consistently is that changes in in particular with government policy has led to uh sub-optimal choices for people who are trying to optimize to the typical cfp advice so and let me let me uh back that up a little bit with with uh some some examples um education planning what was optimal has changed in my career probably four or five times um let me just put it this way I I have put more emphasis in tax diversification and diversification and stuff in how you do things now because what if you if you over optimize in these scenarios it's sub-optimal does that make sense right if like if you designed everything to handle one particular public policy and then it changes on you like right now Roth IRAs or Roth accounts are incredibly attractive to have Assets in but something could change it could just be not that they might necessarily ever tax a Roth distribution but they could add a required minimum distributions or they could count it in the modified adjusted gross income measures used to calculate taxes on Social Security benefits or to calculate higher medicare premiums and so forth and so if something like that happened and you'd been doing all these Roth conversions to get everything into the Roth account yeah that would be overdoing it and subjecting you to that particular risk so I do think tax diversification is is quite important so that you still have flexibility and options because the the uncertainty is the rules will change and we see that every couple of years we just in late December 2022 secure act 2.2.0 came out and that has changed a number of different public policy matters related to retirement income it's gonna and that will continue to happen over time so so be flexible and part of that is just not overdoing things making sure you stay Diversified with with how you're approaching planning yeah in today's environment what we see a lot is is people that have taken the advice of Max 401K uh you'll get a lot of tax deferred and and what's happening is is they're coming to retirement with a large very large 401K plans and things like that and then they just get nailed in taxes and in fact I'm finding a lot of people pay more taxes when they're retired than they did in some cases than when they were not retired um and uh and and it becomes an issue it becomes a real issue then they have estate planning issues and things like that so um uh I just I'm glad that you said that about the the tax diversification I think more than ever especially given our our current you know country's economic condition there's a lot there's we're going to have lots of changes and they could be very large changes uh in particular if you considered quote unquote rich um so I'm sorry I put my little uh two cents in there but getting back to your book uh you have this concept of the retirement income optimization map um again going back to the assets and liabilities and all of that and when you're you when you're you talk about optimizing that's that's why I brought up the the concept of optimizing I I think there's optimizing within ranges one of the concepts that I've kind of looked at and you talked about you talk about different people's retirement styles um one of the issues that you can look at is like matching the duration of your expected liabilities up for a certain period of time so let's say you have a certain percentage of your portfolios in a total return portfolio and then and then another percent that you're you're cash matching or your duration matching matching for one to five years or whatever uh I think some people call that time segmentation you can call it many different things if forget about psychology and how somebody feels if you are just a rational investor a rational person what would you say the optimal length of time is on average for somebody retiring 65 say to cash match or to duration match uh you know their near-term expenses at one year is it five years is it 10 years I know that's a a loaded question but if you forget about forget about psychology and just go pure rational mm-hmm well pure rational the the total return investing approach which has less emphasis on trying to duration match uh can work and also if you then use a an income protection or wrist wrap type strategy you you have that income floor in place that is lifetime so it's already kind of duration matched to your liability so time segmentation is certainly a viable strategy in terms of my personal preferences it's my least favorite strategy so the whole behavioral point about time segmentation is if I have five years of expenses in in cash or other fixed income assets I don't have to worry about a market downturn because I feel confident that the market will recover within five years and I'll be fine and that that story that's a behavioral story and it just doesn't resonate with me personally I I can understand it resonates with others but it doesn't resonate with me personally and therefore I don't necessarily think about what sort of like front end buffer you need in place too to somehow be rational or optimal also that's where something like a reverse mortgage can fit in in a really interesting manner because if you set up the growing line of credit on a reverse mortgage that can be the the type of contingency fund that you can draw from so that you don't necessarily need to have as much cash or other assets sitting on the sidelines to fulfill that role so I would look more at some other of course you need some some cash but I tend to say less rather than more and maybe look at some other options as well about how to have that liquid contingency fund that's great so so basically the in in the guaranteed income sources plus plus reverse mortgage could uh provide a buffer provide a floor so that you could have uh less cash and and you're generally getting a higher expected rate of return on the annuity than fixed income securities and your at at least at the present time a reverse mortgage line of credit grows at a faster rate than the cash which can be used tax-free when you need the money uh so you can see that Evolution that Carol davinsky is one of the famous planners and researchers in this area and in the 1980s he talked about the five-year Mantra which was have five years of expenses in cash now cash you create drag on you're not able to get as high of potential returns with the money you have in cash so he gradually lowered that down to two years in cash and then when he came across reverse mortgages and in subsequent research and and descriptions he talked about having six months of cash alongside a reverse mortgage growing line of credit so I think that's an example of I I think something like that sounds pretty reasonable that's that's that's that's really helpful so and I want to Circle back to reverse mortgages here but before we do if you don't mind I'd like to talk a little bit more about social security uh so we're kind of getting into the realm of the the guaranteed side of things not the total return side of things um or or I more more knowable income sources um I was just looking at the kind of the statistics right now total debt in the United States is really huge um we're running very large deficits project to be like 2 trillion we have a Pago system right now in Social Security and even if we taxed it's been argued by many people even if we taxed every billionaire 100 that would barely make a dent in our current situation so we have huge unfunded liabilities off balance sheet uh type unfunded liabilities how can we really expect Social Security to keep up with inflation and will it be there for quote unquote you know what I'm saying well it will need reforms it's very unlikely to Simply disappear for my own personal planning I I assume I'll get 75 percent of my presently legislated benefits but for people who are younger as well further away from their their 60s uh the social security statement they receive assumes the zero percent average wage growth as well as zero percent inflation and the reality is there's probably going to be a positive real wage growth over time so you're presently legislative benefit could be a lot higher than what your social security statement is implying and therefore when you offset a benefit cut with the uh the wage growth that can be expected over time you may not have that much less in terms of what you're going to plug into your financial plan but yeah I certainly we don't know how the reforms will shake out but if nothing is done sometime in the 2030s Congress would have to legislate a benefit cut and to keep the system so that enough payroll contributions are coming in to cover exist current benefits that cut would have to be somewhere in the ballpark of 20 to 25 percent so I just simply assume I'll get 75 percent of my presently legislated benefit as part of my financial plan is is it fee Is it feasible feasible to actually get Social Security in a funded situation or is it gonna is it most likely going to stay Pago in your if you had a crystal ball oh it yeah it's always been pay-as-you-go and right so the buildup of the trust fund was an effort to just build up some reserves in anticipation of the changing demographics where there's more and more retirees relative to the workers paying contributions uh they try to keep Social Security funded over the 75-year time Horizon and so it's never permanently funded but yeah with a 25 20 to 25 percent benefit cut that would be sufficient to get the system to be expected funding funded fully over the subsequent 75-year time Horizon that's that's really helpful um thinking about it that way in terms of just potentially a 25 less is a reasonable way to look at it I think um the that part of it's not so hard what's harder to understand or to get a grasp on is whether or not that's going to be what that means in real terms for for a retiree um if we continue on a certain path and inflation is is in a different scenario in the future how how do you think about scenario when or inflation when you're when you would set up a plan or a retirement plan what how would you what kind of what kind of uh of Monte Carlos if you will would you put on on your inflation expectation so I do well I tend to just try to think of everything in today's dollars so that the inflation's factored out of it but I the way I think about long-term inflation is the markets tell us what they expect inflation to be if you just look at the difference between a treasury bond and then a tips treasury inflation protected security with the same maturity uh the difference between those two is what the markets expect inflation to be in if they thought it would be different they would invest in one or the other to get that aligned inflation is coming down now and even over the next five years at this point markets are only factoring in an average inflation rate of about 2.1 to 2.3 percent so it seems like markets really expect inflation to come over to come under control even over 30 years right now the markets are building in about a 2.3 percent average inflation rate which is below historical numbers and in terms of if I'm building a Monte Carlo simulation right now I'd to be a little more conservative there I'd base it around a two and a half percent inflation rate with historical volatility and inflation is around four percent so so you're basically an average of 2.4 or 2.5 and then uh standard deviation is like four basically okay so uh that that sounds reasonable um I I guess what is interesting about that is I guess if you assume that we have typical real rates of return for different asset classes that that all works itself out if you put it in present value terms um but if that's not the case and and it should stay that way ultimately it should stay that way but you could have major moves in markets in people's uh time Horizon when they retire which leads us to sequence of returns conversation uh when people retire you can have these you can have these big shifts in markets things things are rough right when somebody retires uh we uh remember I told you about that engineer we had a conversation with forced into early retirement right when the market topped uh the good news is is he had two types of annuities that worked out perfectly for him in the sequence return can you explain sequence return risk for listeners and and what it means and how to you know strategies to mitigate that a little bit more and just one quick last comment on the inflation too like if you thought when I said these low inflation numbers that that's ridiculous inflation would be much higher well then you'd benefit from investing in tips because they'll provide you a real yield plus whatever inflation ends up being and so they'll perform better if inflation is higher and they've already discounted that that was one of the best performing uh fixed income markets uh in the last couple years so but anyhow but but yeah a sequence of returns risks so that's it whenever you have cash flows going in or out of a portfolio the order of returns matters and it's when you start spending in retirement that it matters a lot more so it's like the market could do fine on average over the next 30 Years but if the market goes down at the start of my retirement I'm not having to sell more and more shares to meet my spending needs and sell a bigger percentage of what's left to meet my spending needs such that when the market subsequently recovers my portfolio doesn't get to enjoy that recovery and so it can dig a hole for the portfolio and the the average return could be pretty high but if you get a bad sequence of market returns right at the start of retirement it can really disrupt that retirement and lead to an implied much lower average rate of return than what the overall markets were doing over your retirement Horizon yeah so and in terms of actually uh let's say you're coming up on retirement so this is a common scenario you're retiring in 10 years or five years what should an investor be thinking about doing to transition from that accumulation to distribution phase to kind of mitigate that sequence of return risk so when people start thinking about retirement I think that's where the first step take that retirement income style awareness to get a sense of what sort of retirement strategy might work for you because that's where you then have um different options if you're more of a total return investor that's the whole logic of the target date fund and so forth is just start lowering your stock allocation but still investing in a diversified portfolio as part of that transition into retirement if your time segmentation the easiest way to think about the transition is instead of holding those Bond mutual funds you start exchanging those in for holding individual bonds to maturity like if I'm 10 years before retirement every year for the next 10 years I could start buying a 10-year bond and then when I get to my retirement date I have the next 10 years of expenses covered through these maturing bonds if you have more of an income protection or risk draft strategy the the options would then to be thinking about well if I have an income gap I'm trying to fill where after I account for Social Security or any pensions I'd really like to have more reliable income to meet some basic expenses well you could start looking at purchasing annuities that would turn on income around your projected retirement date as a way to have that transition into retirement and so they're all viable options and it's just a matter of taking the the route that you feel most comfortable with very good that's really really helpful um now I I guess at least is a little bit into the what I would call the traditionally unloved unwanted stepchildren annuities and reverse mortgages uh you know they've gotten a bad a bad rap for so long but they're so useful in in as tools I would say probably the reverse mortgage is the least understood and uh and and one very helpful um tool I think maybe because of just the history of them and how they used to be structured versus how they're structured now um can you give me a sense about how to think about reverse mortgages for people is it only for people who are you know can barely get their their plan together with their assets or or does this also work for people who have a cushion but they should still do a reverse mortgage more yeah I mean the conventional wisdom a lot of times is that the reverse mortgage is a last resort consideration after everything else has failed and maybe then just a way to Kick the Can down the road a little bit but ultimately that retirement wasn't necessarily sustainable since about 2012 that really the focus of the kind of research retirement planning financial planning type research was looking at how reverse mortgages can be used as part of a responsible retirement plan and so it's not that a lot of advisors may just think the reverse mortgage is only for someone who's run out of options but but that's really not the idea it's we have different assets and it's back to that real map the retirement income optimization how do we position those assets to fund our goals and the reverse mortgage provides a lot of flexibility about how to incorporate our home equity asset to help fund our retirement plan and it can lead to a lot more efficient outcomes than just simply say leaving the home sitting on the sidelines and saying well I've got the home if I have long-term care needs I'll sell my home to fund the long-term care something like that otherwise I'll just leave the home as a legacy asset for my beneficiaries there's much more efficient ways to incorporate home equity into a retirement plan and that's what the whole discussion around reverse mortgages is how can I I use a reverse mortgage to help build a more efficient retirement plan and not as a last resort but as part of a responsible well-funded retirement plan it's just another Diversified tool to a source of source of of assets that you can use that's not just sitting there I just had a conversation with a client yesterday that is about to retire in a few years and uh that is exactly what he said that other property that I have in that other State uh I'm just gonna keep that as a that'll be my I'll sell it if I need to you know there was a conversation about health care contingency and um uh long-term care and things like that and that was his rationale um and and in discussions with clients there has been a a ton of resistance you've been really good at putting out information that shows why it makes sense to have it as a potential use so can you explain a little bit about the the line of credit portion of it and how that how use how that could be advantageous yeah and it really it goes back to this idea of sequence of returns risk and if you look at a reverse mortgage in isolation it may look expensive or whatever else but it's how does it fit into the plan and by reducing pressure on the Investments it can help lay the foundation for a better outcome and the the growing line of credit is one of the most misunderstood aspects of the reverse mortgage and I think it was partly unintentional and it may sound too good to be true in a way it probably is and we saw in in October 2017 the government put some limitations on the growing line of credits so it was incredibly powerful before then it still quite powerful not as powerful as before for new uh anyone who opened a reverse mortgage before October 2017 was protected to have those Provisions in place for the entire life alone but if you wait and then after October 2017 you still have the growing line of credit it's not as powerful but but the idea is I believe the government assumed people would open reverse mortgages because they want to tap into the funds but financial planners realized with the variable rate not with a fixed rate but with a variable rate home equity conversion mortgage you do have to keep a minimal loan balance of say 50 to 100 dollars but otherwise the rest can be left as a line of credit and that line of credit grows at the same way the loan balance would grow and so you can understand why if you borrow money the what the loan balance will grow over time well it just happens to be the case that the kind of neat planning trick is if you open the reverse mortgage and 99 of it is in the line of credit the line of credit is growing over time at the same rate that the loan balance would have been growing and ultimately this improves the odds dramatically of having a lot more access to funds over time if you open it sooner and let the line of credit grow versus just waiting to open it at the time you might actually want to start spending from it yeah how has it been limited uh limited versus the way it used to be what what are the limitations well they increased the initial mortgage insurance premium which is not directly to the line of credit but then every every so often used to be more frequently we're now getting overdue at this point with it's been over five years but they revised the tables that determine the principal limit factors of what percentage of the home value can you borrow and so as part of that 2017 change they uh lowered the the borrowing percentages and also they lowered I mean this this part's a good thing but they lowered the ongoing mortgage insurance premium that would cause the loan balance to grow at a slower rate but it also in turn caused the line of credit to grow at a slower rate so it before that change I was running simulations where if you opened a reverse mortgage at age 62 there was like a 50 chance that within 20 years the line of credit could be worth more than the home and that's no longer the case it's still there's still a probability that the line of credit could grow to be worth more than the home but it's not nearly as dramatic as what I was Finding before the rule change that's very interesting because the line of credit growth rate is tied to interest rates and home prices have somewhat of an inverse relationship to interest rates to some degree but it's basically positively skewed so it's not it's hard to know but uh uh but yeah that's that is a great planning tip and it's interesting because we have had a lot of friction with this discussion with uh clients uh mentioning to them because they just have it in their head that I'm going to lose my home and I'm going to there's all these things that can go wrong and then you have to explain it's a big education process and of course they are required to do education as well no we don't sell reverse mortgages but we always you know if we if we you know we mention it to people as a source and you know having it there makes a lot of sense uh and and the same thing with the annuities um you know I have a love hate relationship with annuities but I'm becoming to love them more and let me tell you why before it was all commission driven you know and we're fiduciaries we don't do commission stuff now with the Advent of finally the insurance companies have really gotten to the point where there's at least enough of them now doing products that make sense with the guarantees I mean there was always companies out for a long time there's companies out there like Americas Etc that had just pure plain vanilla uh va's variable annuities that had just lowered your expenses and maybe eliminated a surrender or something but the guarantees is where the real there were folks too much on tax deferral and not enough on guarantees what were the guarantees is really really what we're really looking for here uh and the only way you could even get them you guarantees would be if you did a commissionable product so we'd be handing you know we would be referring people to Insurance guys who were selling commissionable products and then sometimes you don't know what's going to happen after that happens uh with that client so now thank God we have uh we're in a scenario now where the where the financial industry has finally caught up to what needed to happen with annuities yeah the only annuities yeah yeah the only annuities and there's it still has a lot more to be done it's it's you shouldn't be overlooked and I think what happens one of the reasons that I think they're so helpful uh for people is that risk tolerance is time variant people say their risk tolerance is X and then as soon as you have a market decline then their risk tolerance is all all of a sudden why which is more conservative and and uh these annuities can help people psychologically overcome that right you can always look to something that is either staying equal or growing and you can also have growing income streams during the Gap we see that a lot there's a gap between uh when they get Social Security and when they retire and it kind of fills that Gap and it's funny when I was when I was I actually had my assistant who's also a CPA excuse about my financial planning system I had to read this book first and she uh she said it sounded like like you uh were like in the room with him uh because there's so much stuff in here that you and I agree with it's amazing uh before not even knowing you so and I think it might have to do more with the approach of taking things more from uh your academic background and your CFA background it gives you a different perspective than what kind of the traditional financial planners had who had come more from a sales background and now what's happening is is we have uh the whole industry is now moving in the I think moving in the right direction and I think you've been a big uh reason why that's happening so I I really want to thank you for that all your work is really making a difference I want to talk a little bit about Medicare if we can and health insurance this is probably one of the most the hardest part is the medical the medical discussions in some ways um people don't want to think about long-term care people don't want to think about health costs I was looking at some of the statistics you know long-term care statistics is how much it costs it's a big number how would you how would you model the contingency planning you know for let's just start with long-term care how would you model that would you model it as a present value number or would you try to put it as a as something that's over time how how would you how do you approach that yeah actually so I did try to make the retirement planning guidebook as comprehensive as possible and and so I as part of that developed a long-term care calculator and the the basic logic of it is develop a scenario that you would feel comfortable that if you could fund that scenario uh you'll feel like okay things things will work out whether that's three years in a nursing home whatever the case may be but develop that scenario where you're saying okay at age 90 I will spend the next three years in a nursing home right now in the United States the average cost for a semi-private room in a nursing home is a little bit under a hundred thousand dollars I'll say in today's dollars a hundred thousand dollars a year but then I'm gonna plug in the the math gets complicated but you've got what's the inflation rate in long-term care what's the overall inflation rate and then back to this whole idea of the asset liability matching like what's the investment return discount rate you're comfortable assuming as well and also recognizing that if I do go into a nursing home I don't have to also fund my entire budget of a like if I thought I was going to spend 80 000 a year well I'm not going to be going on any sort of trips I don't have to go to restaurants or anything uh a lot of my other expenses would reduce not not 100 but they would reduce so plug it in what I think is a reasonable reduction to the rest of my budget and then you get calculated a present value of here's how much money I'd have to have set aside as a reserve asset to feel comfortable that I would be able to fund this long-term care need and and be able to have a successful retirement and for people who are worried about and who may be paying out of pocket for long-term care that could be several hundred thousand dollars to be blunted on average that's what it comes out to I actually had a coffee with a gentleman and he said uh what is it just tell me what the number is I said well it depends on your age he says no just tell me what the number I said it's roughly about 300 000 roughly on average it could be more it could be less uh you know uh okay and and there's there's there's different ways you can fund it right you can do long-term care insurance uh traditional Standalone you could do um you know life insurance policies that have embedded features you could do if you can't like qualify for um you know you know get a policy you can maybe get it embedded in an annuity of some sort you can sell fund um so it's not an easy thing that you can uh solve it with a quick answer um but but it's important to have in a plan and I and I like the fact that that uh you've emphasized that a lot in your work um it's just it's just great that that people are thinking about it from that perspective I want to switch gears a little bit um and talk a little bit about tax efficiency uh you know taxes are such a huge part of the impact of a plan and there's so many different angles to it and and the tax rules change so much um I'll tell you one of the challenges that I have asset location the concept of balancing you know where you put a certain asset according to us is tax efficiency versus keeping an asset allocation in line right up you know operationally keeping it in line with the objectives and then as money is being spent taking it from the right place it's a challenge even with excellent software and then sometimes I'm finding that it doesn't actually work out as planned so can you can you give me some practical tips on how to deal with asset location well the the basic logic of asset location but yeah I mean in practice it gets incredibly complicated as you're spending from these accounts to think about also rebalancing and making sure you're keeping the right asset allocation between stocks and bonds and the NASA location is where do you keep these things but generally just is a basic guideline your taxable brokerage accounts of course you want some cash there for your liquidity but otherwise that's your most tax efficient stock Investments so if you own stock index funds and so forth the on a relative basis they're most likely to be best off in your taxable account because a lot more of their returns will be those long-term capital gains that get the preferential tax treatment then with like your tax deferred IRAs and 401ks that's more of a place where less tax efficiency so bonds and so forth maybe lower returning type asset classes and then for your Roth accounts the Roth IRA and so forth that's where less tax efficient but higher expected return type asset classes could go the Emerging Market funds and small cap value and that sort of thing and that does also work with distribution ordering as well because the Roth will be what you tend to spend last and so also having these uh riskier asset classes that may have more growth prospects over the long term that can be a good place to set them aside since you're not likely to be spending from those accounts until later in retirement okay yeah it I think for a lot of people it's a little bit of a daunting thing and in practice it can be with contingencies and things like that can be hard to to do correctly and keep managed and I know there's good news is there's good software now that that helps with that um as far as tax efficiency the other you mentioned the order of withdrawals I mean traditionally you know you have the you know your traditional order of withdrawal that you would you would uh do in in the past a lot a lot of recommendations has been you know you want to take from your taxable accounts first right let those tax-free tax deferred accounts grow and then and then you start taking from those other sources but you make a really good point that that's not always the best thing to draw that taxable account down too fast can you expand upon that a little bit well the yeah the the basic tax efficient distribution is spent down taxable assets than tax deferred like IRAs and then tax exempt like Roth against last but you you can do better and so the the better approach is to have a blend of taxable and tax deferred until the taxable account depletes and then a blend of tax deferred and tax exempt after that and as part of that blend you can do rock conversions to in the short term pay higher taxes if that can better position you to pay less taxes over the long term and to have a higher Legacy value from assets over the long term yeah and then getting more specific than that it's there's no you really got to run the the individual numbers on a case-by-case basis but generally there's the opportunities to sustain your assets for much longer by having a more tax efficient distribution strategy that digs into that taxable plus tax deferred and then later tax deferred plus tax exempt exactly and and that's why it's important while you when you're an accumulation phase make sure you have some tax diversification if you can yeah have Assets in all those different types of accounts yeah so that you're not nailed so bad uh later on uh and then there's a lot of complexities that can happen with happen that we see quite a bit with concentrated stock positions and things like that which is probably outside the scope what we're talking about today so um and lastly here last last topic here non-financial aspects of retirement this is a huge huge huge thing uh it's funny it was the last towards the end of your book and I'm glad that you talked about it uh because uh there's I can't tell you how many times um you know you see people think that they're going to be happy sitting on the beach and then they they do that and they're miserable uh or or spouses that wind up hating each other for some reason can you tell can you give us some ideas about um like what should people be doing like say they're five years into retiring or ten years into retirement retirement What should people be thinking about doing to kind of get their their overall lifestyle satisfactory when they actually do retire yeah and and that's this is in some ways more important than any other Financial stuff because with the finances it's easier to adapt but work does so many things in a person's life it's not just that it provides a salary and you need a way to replace all the other aspects of work such as structure to the day camaraderie feeling part of a team feeling like you're creating value for a society all these different aspects that you need to be able to replace with something that gives you motivation to wake up in the morning in retirement and so to say simply it's not the best starting scenario if you retire because you hate your job you want to be able not to retire away from something but to be able to retire to something you want to have and it gives you purpose and passion and meaning to give you the motivation to wake up and and have something be active each day because in all too many cases people just they start doing passive things like watching too much television or surfing the internet too much and that can lead to a really miserable and unsatisfactory retirement wow that's huge that's interesting have something to retire to so uh and and start figuring that out sooner rather than later right not don't wait till the very end and go yeah what am I doing uh and sitting there staring at your wife or your husband yeah that's the idea that there's all these things you you want to get done but you just think well when I retire then I'll have more time to do it well if it's something you've been holding off on doing for the past 40 years it's not likely that just having more time in retirement is what you need you may just simply either not be interested if it's a hobby like oh I want to go back to playing the guitar or something if you're waiting for retirement to do that sort of thing there you go that retiring may not be enough and then people might start feeling bad that you no longer have the excuse and that's where if that sort of bad feeling compounds it can create a spiral like a downward spiral where people just become less engaged and less positive and it can even impact Health which then in turn makes it harder to be engaged and involved and and can lead to downward spirals it's really important to try to avoid that and as part of that not waiting for retirement to to consider all these other aspects of your life outside of work but making sure you're nurturing relationships and having hobbies and having things outside of work so that it will then be easier to transition into the retirement yeah that's great so is there anything as we close here is there anything that you're really excited about that you're working on right now that you want to share or is there at all right now I am just trying to get the updates done for the retirement planning guidebook and where we're doing the best we can to build out that retirement income Styles ideas uh something that people can benefit from and uh the other main research area is with the tax planning as well that I think this will be a Hot Topic and I've already done a lot of work in that area but it is such a complicated area that just trying to push forward as well about like Roth conversion strategies and and how to best Implement those in a most of the work in that area just assumes a fixed rate of return and with the reality of not fixed rates of Returns on your Investment Portfolio that also dramatically complicates some of those tax planning decisions so I'm continuing to push ahead in those areas interesting so more stochastic modeling in your future yes stochastic modeling and now you're probably going to be uh that Technology's got to be in there somewhere too any plans uh that you want to announce or share with new technology that you're going to be coming out with or software programs or anything like that or I mean I just have this Vision in my head if I were you I'd be doing something like that but I mean I'm just saying yeah don't Envision creating tax planning software but uh the retirement income style awareness that's where I'm putting on my efforts in terms of having software and that's an easier problem than the tax planning problem definitely yeah there's a lot of changes always yeah you'll be coding to your uh blue in the face all your staff would be so uh the uh it's interesting I I I'm actually going to be diving into that that profiling software that you have um I had a conversation yesterday about that so that's very good so where would people uh would you like people to send you see learn more about you um anything that you're up to oh yeah uh so my website retirementresearcher.com all one word retirement researcher and if you go there you can sign up every Saturday morning we send out an email with different articles and things and then my retirement planning guidebook is on Amazon or any other major book retailer and also I do have a podcast as well they're retire with style podcast with Alex mergia who's my a co-co-researcher and and co-founder of the retirement income style awareness excellent all right Wade thank you so much appreciate you coming on it's been a pleasure thank you the information in this podcast is informational and General in nature and does not take into consideration the listeners personal circumstances therefore it is not intended to be a substitute for specific individualized Financial legal or tax advice to determine which strategies or Investments may be suitable for you consult the appropriate qualified professional prior to making a final decision wealthnet Investments is a registered investment advisor advisory services are only offered to clients or prospective clients where wealthnet Investments and as representatives are properly licensed or exempt from licensure [Music] foreign

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Do You Pay Taxes On Gold And Silver IRA?

do you pay taxes on gold and silver Ira with a Roth gold and silver Ira your contributions are post-tax meaning you'll pay taxes on the money before depositing it into your IRA account this tax model is different from a traditional IRA which taxes the money upon withdrawal is there capital gains on gold IRA the IRS classifies precious metals such as gold as capital assets and treats them as Collectibles therefore regardless of their forms they are subject to capital gains tax if they are sold after more than one year after purchase what are the current gold Ira tax rules updated for 2022 when you cash out your investment from a gold Ira then you will pay taxes on your gains shortly afterward gold IRAs face additional fees and taxes this includes paying a 10 fee if you withdraw early does the tax code permit you to use self-directed gold Ira accounts While most Ires consist of traditional assets such as stocks and bonds the tax code permits you to use self-directed Ira accounts that allow you to hold precious metals such as gold and silver what are the gold Ira tax rules what are the tax rules for gold IRA what are the tax rules applicable for gold IRA as with other retirement accounts if you take gold out of your IRA before turning 59 and a half you will have to pay income tax on the value of the gold plus a 10 early withdrawal penalty which Ira do you not pay taxes on a traditional IRA is a way to save for retirement that gives you tax advantages generally amounts in your traditional IRA including earnings and gains are not taxed until you take a distribution withdrawal from your IRA at what age do you not have to pay taxes on an IRA age 59 and a half only Roth IRAs offer tax-free withdrawals the income tax was paid when the money was deposited if you withdraw money before age 59 and a half you will have to pay income tax and even a 10 penalty unless you qualify for an exception or are withdrawing Roth contributions but not Roth earnings 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

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What Is The 4% Rule? How Much Money Do I Need To Retire?

In this video, I want to explain the 4% rule. This is also known as the Safe Withdrawal Rate – or basically the rate at which you can spend your money without ever running out of money. An easy way to calculate what this means for you – and how much money you’ll need to retire is by flipping it around and multiplying your yearly expenses by 25. For example, if you and your family spend $40,000 per year, you’ll need to have 1,000,000 invested to not run out of money.

There must be some limit to how long you can withdraw 4% and still have money left over, right? The study that explains the 4% rule is called the Trinity Study, and it looked at how much money you’d need to retire for every year between 1926 and 2009. The study found that if you invest 50% of your money in stocks and 50% of your money in bonds, withdrawing 4% of your money will be fine for 25 years, 100% of the time. Doing it for 30 years – you’ll still have money left over 96% of the time. only if you retired in a very unlucky year and never made any money after retirement including pensions or social security – the 4% rule didn’t work. So to make sure we’re all clear – the 4% rule isn’t 100% foolproof.

But those odds are pretty darn good – and even while I hope to retire from regular work longer than 30 years – i know I’ll continue to make money doing things i love which will make sure that the 4% rule does succeed. For those of you that want to be 100% sure your money will never run out (especially for those of you who plan to retire longer than 30 years), use the 3% rule and only withdraw 3% of your investments per year.

Let’s get back to the 4% rule and dive a little deeper. As many of you are probably asking, why is 4% the safe number and not 10% or 2%. Very simply, investing money will pay you dividends and increase in value at an average rate of 7% per year. On average inflation is about 3%, basically decreasing the actual value of the money you have. Combine those two numbers, and you’re a 4% – your net income will increase by 4% each year.

And if you spend that 4% without going over, you’ll end the year with the same amount that you’ve started… in perpetuity. Okay okay – i know a lot of you say this is crazy – what about the recession – you can’t predict stocks – and lots more thoughts. But let’s look at those numbers even deeper. Since 1900… over one hundred years ago, the average return per year has been 7% including reinvested dividends (meaning you reinvest the dividends – or the money the companies pay your for investing – into your investment). For inflation – since 1913 – over one hundred years ago, the average yearly inflation is 3.22% Even through the great depression, world wars, crazy years of inflation, more wars, and the great recession the average return rate has been 7% and inflation has been just over 3% What does this tell us? It tells us that investing is more about being patient and investing early rather than trying to time the market.

Now this doesn’t mean that it can’t change. Investing is a risk. That’s why you do it and make money from it. But world war iii could happen. another even greater depression could happen. and we have to be prepared for something like that. because if you retired with 1,000,000 in 2007, assuming you’d be able to spend 4% of your net worth per year, you were in for a surprise – which might mean going back to work for a few years and waiting out the recession.

Hopefully, if you did that… and left your investments in the stock and bond market, you would be in good shape. The key takeaway is that throughout the history of modern america – you’ll be fine to retire using the 4% rule. So calculate your yearly expenses… include some emergency padding… and start investing to get to that goal of 25 times your expenses.

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