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Can You Retire Early at Age 50 or 60? – Retirement Spitball #EarlyRetirement #RetirementSpitball

Andi: Happy New Year, friends! Let’s kick it off with some spitballing. Can Clark Kent’s dad in Hutchinson, Kansas
retire at age 50? Will Devin in South Carolina be fat and happy
or cutting calories if he retires at 59 and a half? Can Scott Magic in Idaho retire to a good
and simple life at age 60? Gina and her wife are 52 and 58. Can they retire in four years, and how much
should they be putting in their Roth accounts? Joe and Big Al kick off 2024 with more early
retirement spitballs, today on Your Money, Your Wealth® podcast 462.

Plus, Frenchie in Maine needs a spitball on
a Roth conversion strategy with Canadian retirement funds. And since Frenchie would like me to talk more,
I’ll tell you what I know about target date funds. I’m producer Andi Last, and here are the
hosts of Your Money, Your Wealth®, Joe Anderson, CFP® and Big Al Clopine, CPA. Joe: We got Martha Kent from Hutchinson, Kansas. Martha Kent. That's Clark Kent's mother. Al: Really? Joe: Yeah. Al: Wow. Good memory. When it comes to movies, you don't miss anything.

Joe: Steel trap. “Hi guys. A long-time listener. Sometimes I skip new episodes because of the
new format.” We have a new format. Andi: I think she's talking about the fact
that there's derails at the end of each episode. So that means that the episode itself is kind
of shorter. She says there's less meat, so she- we actually-
we emailed her and asked her about it and said, what do you mean? And she said she just racks them up and then
listens to- she binges them a bunch at a time. Yeah. So she can get more meat.

Al: Because we have more humor? Joe: There's less meat, Al. Al: Yeah. Joe: Where's the beef? Where is the beef? Al: We're doing our best. We don't have enough. Joe: How many people do you think remember
that commercial? Al: Well, certainly I do. Andi: All the people our ages. And mine. Andi: Yeah, the 3 of us collectively. Joe: “So I find myself feeling left out. But since it's your show, here's my info.” I still don't get it. What the hell is she talking about? Al: She wants more meat. She wants less derails and more questions
answered. Joe: Less of this, what we're doing right
now. Al: Yeah, the BS part. Joe: Got it. Andi: Get on with it, will ya? Joe: “I'm married, both 45. I'm self-employed. Husband has two part time jobs. Can't get him to work full time with benefits
because he doesn't like the-“ Andi: – monotony.” Joe: -monotony. I knew it. Al: You were gonna say monotone? Joe: Monotone. I hate that monotone. “We don't really drink since, well, we're
trying to manage, then enjoying our retirement, right?” Andi: Can’t do both, I guess.

Al: Do you agree with that? Joe: No. Al: Me neither. You got to enjoy the journey. Come on. Joe: “We have one pet and one long paid
Ford SUV and beater Benz. Not being born here, we are subject to numerous
advice on savings, retirement, getting rich. Here's our situation. We have about $100,000 in various bank accounts. We have various 401(k)s and some Roths, some
403(b), about $170,000, $23,000 in a 529 plan, a couple of brokerage accounts, $30,000, business
account, $25,000, Valek that started 4.5%, now steady 3% that would get to $125,000 at
retirement, $35,000 in precious metals, crypto at $90,000.” Wow. Crypto in new case.

Brokerage accounts, 401(k), cash. I mean, you name it, it's in there. Al: It's- we got it all. Joe: Wow. Al: I'll take one of those. One of those. Joe: Yes, and one of those. Oh, that came out? Yes, I would love one of those. Al: Well, I heard good stuff about that. Let's get some of that. Joe: Yeah, I just talked to my neighbor. You have one of those? Okay, we're getting one of those. “We got over a million in credit card points
worth $12,000 in cash.

Do you count your credit card points as cash
on your balance sheet?” Al: Well, you can cash out some of them, so
I suppose. I don't. Joe: I want one of those, actually. Al: Because I use them. Joe: She's like, yeah, I got $12,000 in credit
card cash points. What do you got? Al: So let's add that up. Add it to the- Joe: Add it to the list. Okay. “Or maybe 3 round trip, first class, New
York to Dubai tickets, $60,000.” Al: Yeah, they'll take care of the credit
card points, I guess. Joe: Okay. “Return of premium and life insurance.” Oh my god, four savings, $30,000 in 15 years.” So she bought a life insurance policy. She's projecting out what it's going to be
in 15 years.

Al: She has one of those too. Joe: Yeah, one of those. That’s four savings. How many timeshares do you think she's got? Al: Probably a couple. Joe: “Second house worth about $330,000
that has $30,000, 3% left to pay. Getting $1500 a month from long term renters,
but can probably get $1800. A primary home worth $440,000 has $120,000
left. Originally planned to pay the second house
in two years, and the other using the rent money in additional in 5 years.

The way we grew up, and not having a full-time
job with stable paychecks, it seems better to have no debt.” I agree with that. Al: Yep. Joe: “We make about $130,000 a year, maybe
spend about $50,000 a year, and would at least put $12,000 in a Roth a year. So are we good?” I got one of these. I got one of those. Al: We got enough. Joe: And we got a couple of these. What do you think? Are we good? Al: I got 9 things.

Do I need 12? Joe: Hey, did I mention I got 12,000 points
on the old credit card? Al: Okay, you got 10 things. Joe: “Can my hubby stop working at 50 if
I can get $80,000 a year? I know we have a very low interest rate, so
we might just pay the required minimum on our primary. Should we get a reverse mortgage?” You haven't had one of those yet. Al: Yeah, that's 11. Joe: Oh yeah, I think we need to get a new
car. Let's go, get one of those. Oh, it's about $40,000. Thanks.” Al: So I got some comments. If you truly are spending $50,000 And you're
making $80,000? You're good. Joe: You're good. Al: Yep. Now, I just did 5 years inflation on $50,000. That's about $58,000. But here's my comment. I think you're spending more than $50,000. If you're making $130,000. So just take a very careful look at what you're
spending before you decide that this is the path that you want to do.

Because if I take your current assets at $500,000
ish for 5 years, 7%, we had $12,000 a year that gets you to $750,000. That's a great number. But very difficult to turn that into a big
retirement income. I have a feeling you're spending more than
$50,000. So that's my number one advice to you is try
to figure out what you're spending more carefully instead of maybe spend like $50,000, like,
like what is the real number? Joe: We don't give advice here, Big Al. Al: Oh, did I say advice? Joe: Yes, you did.

Al: Sorry. Joe: You probably rephrase that. Al: Yeah. I would. Joe: Some ideas that you should consider. Maybe double check your budget. Al: Here's what I would think to do. How about that? I would figure out what I'm really spending
and then come up with the plan. Joe: All right. Sounds good. Good luck. Joe: “Hey, guys. Scott Magic here from the great state of Idaho. No potato jokes, please.” Al: Do you even have any? Joe: No. Al: Not me either. Joe: Nothing's coming to mind. Al: Yeah. I got nothing- when I hear no potato jokes. It's like, I, I wish I had one. Joe: Yeah. Still nothing. ‘We drive a Chevy Tahoe, paid off, and have
no debt other than our $200,000 mortgage.

Our weekend drink of choice is a cold hazy
IPA and some red wine.” I would pass on both of those. Al: So that's common drinks in my household,
hazy IPA and Annie likes red wine. And I do too. Joe: “We have two boys, age 15 and 13, that
need to leave the nest soon.” Al: That's not going to be that soon. Joe: “spitball our game retirement plan,
the wifey wants to pull the plug at 60 and live the good simple life.” I don't even know what that means, but it
sounds pretty good. “My wife's 45, I'm 48, making a combined
income of $220,000 a year. We add $25,000 per year to 401(k)s, plus employer
match.

We recently opened up Roth accounts to plan
to max them out as eligible over the next 15 years. Here's our current breakdown.” Alright, Scott Magic wants to retire at 60,
so what do we got? We got 15 years Al, that's kind of the time
frame for wifey and 12 years for Scotty. Al: Yep, so I ran a 13 year, just kind of
split the difference. Joe: Ooh, 13, okay. So they got “$450,000 into a 401(k) plan,
they got $4000 in Roth, they got $30,000 in CDs, brokerage account is $5000, the goal
is to add $5000 per year, savings is $60,000, no pensions, super lame.” Al: So I’ll just tell you, I got $550,000. Joe: And he's going to add $50,000 a year? Al: Yeah, more like $40,000 because of the
Roth IRAs. Joe; No, but plus he's got a match too.

Al: Yeah, yeah. And I didn't even add that, but anyway. Joe: Okay, hold on, let me finish here. “So I'll take Social Security at 65 and
her at 70. When we retire, our house will be paid off,
and we plan to keep our fixed expenses modest. That said, I plan to spend $100,000 a year,
so it'll probably be more like $120,000. I feel like we are on track with time, but
curious what you guys think. Do you think we need to step up our game,
or just stay the course? Love the show.

Keep up the good work.” Al: Okay. Now I'll give my number. I'm thinking in 13 years, they'll have about
$2,000,000. Joe: $2,000,000. Al: And I do that starting at $550,000, adding
about $40,000, 6% per year, 13 years, about $2,000,000. Then, if he wants to spend $100,000, I just
took the lower figure, 13 years, 3% inflation, it's about $150,000. Okay, so $150,000 into $2,000,000, that's
a 7.5% distribution rate. Now, I know we haven't included Social Security,
and we're not even sure what that means, but in my way of thinking, that's a little bit
high for the stub period.

I would probably say you're not quite there,
although you're not that far off. If it were me, I would probably maybe work
one extra year, perhaps, maybe two extra years, or at least have some part time income for
5 years to kind of take care of the stub period where you're utilizing too much of your portfolio. That's what I would do. Joe: Yeah. So if you look at $85,000 is what the distribution
would be at 4% when they turned 60. They could probably take, I’m going to say
5.5% because of the bridge, because they're going to receive Social Security of roughly
maybe $50,000.

Maybe that's too much. But let's just say $85,000, that's the future
value, 13%. Let's go 2% present value. Could they spend like $55,000. If they can live off of $55,000, then I would
say they're on track. Al: Right. Because of inflation. Joe: But they want to spend $100,000. So they're- Al: So here's another way. I would say it. You've got $2,000,000. I agree with you about 5% is where I'm comfortable
or more comfortable, right? So that's $100,000. But you need to spend $150,000 given inflation. So, so you're short about $50,000. So maybe you get a part time job or maybe
you work an extra year or two. Joe: Right. Well, what I did is I looked at If you look
at the future value of their current savings of what they're doing at 7%, it's $2,100,000. I think you use 6%, maybe it's $2,000,000. And then you look at 4% of the $2,000,000
or 4% of whatever number, I had $2,100,000, so it was like $85,000.

That's the distribution rate from that portfolio. Then I just took the present value back to
today of what that would be given inflation. So the present value of that $85,000 is like
$55,000. So if you're comfortable living off of $55,000
a year until you bridge to the Social Security, then you could probably beef up your spending. Then, yeah, if that's modest, but if you want
to spend that $120,000, you got some work to do. Al: Yeah, so we're short around $50,000, which
is what I got kind of the other direction. So short $40,000, $50,000, something like
that. Joe: All right, good luck, Scotty Magic. Love the name, too. Al: Wish I had that name. Joe: Yeah, I'm changing my name to Joe Magic. Al: No, that's not as good as Scott. Joe: I know, Scott Magic. Joe: I'm actually changing- just rhymes.

Al: I'm actually going to change the whole
name to Scott and Magic. That's really good stuff. Andi: For the same price of a Retirement Spitball
Analysis – that is, free – you can fiddle with the numbers yourself using our retirement
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then enter your income, savings, and expenses, and see your chance of a successful retirement
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now for free at EASIretirement.com – that’s EASIretirement.com. Joe: We got Devin from South Carolina. “Hey guys, I'm a new listener, but love
the great content and thoughtful approach.” We have a thoughtful approach, Andi? Andi: Somebody does.

I don't think it's here. Al: According to Devin, we do. Joe: I think this is like a release approach. Al: Not much thought goes into it. Joe: It's not at all. It's like, hey, let's- Al: Let’s throw it up there and see what
happens. Joe: Yeah. You know, well, thanks Devin. “I drive a 2022 Subaru Outback-“ South
Carolina. I was thinking Seattle. They have Outbacks in South Carolina too. I guess. Al: Sure they do. 4-wheel drive. Need it. Joe: All right. “Wife drives an ‘18 Acura MDX.” So that sounds sexy. Al: That's a big car. Joe: “When sitting on the porch, contemplating
retirement, my wife enjoys a little red wine.

When I don't care about the caloric intake,
it's a hazy IPA for me. When I do care, it's a nice little vodka tonic.” Al: Ah, okay. Joe: “I'm 57 and my wife is 59. We are preparing for retirement when I turn
59 and a half in 2026. And our target income in year one is $140,000
after tax. Our situation is a bit different because of
a variety of expected income streams.” Not different at all. I think it's very common. You know when your nose itches, does that
mean someone's thinking about you? Have you heard that wives tale? Al: No, I have not heard that. Joe: You've never heard that? Andi? Andi: No, I haven't.

Joe: What? Al: It usually means you have an allergy,
as far as I know. Joe: I think it means that someone's thinking
about you. Anyway, I might have an allergy or someone's
really thinking about me. Andi: Someone's talking about you. Joe: Or someone's talking about me. Andi: Yeah. Al: Yeah, that could be. Joe: That could be. Probably not positive either. Andi: It also means allergies, infections,
respiratory irritants. Joe: Well, I got it all. All right. “Our situation is a bit different because
of a variety of expected income streams. I'll be eligible for a small pension of approximately
$18,000 a year. An annuity income of $38,000 a year.

I'll also have deferred comp of around $482,000
total future value, 5% growth that pays out approximately $34,000 for 15 years, estimates
ranged between $25,000 and $48,000. Will be eligible for Social Security of $17,000
a year. When my wife turned 67 and $65,000, when I
reached my full retirement age. I will wait until 70 if the expected cash
flows in drawdown rates cooperate. I'll also have a bonus the first 3 years of
retirement that will provide an additional $200,000 in income. I'll be debt free, including mortgages and
my pre-tax total investments will be about $2,600,000 when I retire, which will include
$300,000 of cash to help protect against sequence of return risk.” Al: Wow, Devin, you're on top of it. Joe: Killing it. “I plan to use the cash to help take the
pressure off the withdrawal rate the first 7 years to meet my target 3%. Once Social Security kicks in, I think I’m
in good shape. We both plan on working part-time for a while. But aren't taking that into consideration. Thoughts?” Absolutely killing the game. Al: Yeah, I'm not worried about this at all.

Joe: Yeah, and I'm gonna have another $700,000,000
that will come in from an inheritance. I don't know, what do you think? Al: Thoughts? Joe: Thoughts? Al: Well, here's the quick numbers. If you add up fixed income before Social Security,
it's $90,000. He wants to spend $140,000. Joe: He's already got $2,600,000. Al: $50,000 shortfall. That's a 2% distribution rate on $2,600,000. Joe: And then you got Social Security that's
going to cover probably the remaining of the shortfall. Al: And you got the extra $200,000 of income. Joe: And he's got another $300,000 in cushions.

And if I look under my mattress, I got another
about $400,000 there. Al: So yeah, Devin, you're good. Joe: All right. Thoughts. No, that's our thoughts. “Fat and happy with my IPA, or cutting calories
with my vodka and soda. Thanks a bunch.” I think he's pretty fat and happy. Al: I think he's all set. Joe: Congrats. I think congratulations on everything that
you've done. Right. “Part two. Sorry, should've mentioned, of the $2,600,000-“,
he just wants to mention $2,600,000 again. Al: Just get it out there. Joe: Just throw it out there. Just in case, just so you didn't hear it. Al: And he's gonna play it for his neighbors. Oh, listen to this. Devin From South Carolina. Joe: Hey guys, you gotta listen to this podcast. It's the best. Oh, Devin, is that you? Al: Did I mention $2,600,000? Another $200,000 coming in 3 years? Joe: Oh boy, Devin.

Al: My Social Security is going to be $65,000. Joe: “I should have mentioned, of the $2,600,000
in retirement funds, only $300,000 is in an after-tax brokerage. So with this, and my cash, I do have some
opportunity for Roth conversions before Social Security kicks in. I have less than $20,000 currently in Roth
and have been limited with income restrictions.” Oh, so he's just telling us how much money
he makes without telling us how much money he makes. Al: Yeah. We have a sense. Joe: “Now my company only recently introduced
the Roth option in the 401(k). I'm still anticipating a lower marginal tax
rate in retirement, so I'm still currently contributing pre-tax. I will have a window for tax planning, but
I will have a challenge of my deferred comp, pension, and annuity flows that will all drive
my taxable income up. After and before someone suggests the annuity
was a mistake, I made that call 15 years ago and I moved on and embraced the benefits of
a lifetime guaranteed income. It is what it is.” Yeah. Just accept it.

Yeah. Just looks in the mirror and says, you know
what? People like you. Al: I'm good with that. Joe: People like you. Al: You know what? Joe: That's what he does. Hey, Devin, just remember, you got $2,600,000. Al: That's right. And did I mention? Joe: Goldarn it. People like you. Al: And did I mention $2,600,000? Joe: As he's brushing his teeth, $2,600,000. So good. You know what? You bought that annuity, Devin, but it's okay.

Al: And honey, you got $2,600,000. Joe: It is what it is. He's fat and happy. Congratulations, Devin. Al: This is awesome. Joe: Very good job. It's okay. People make mistakes, but it sounds like you've
made up quite well for whatever mistake of the annuity purchase. But, hey, guaranteed income. It is what it is. Al: Yes, I agree with that. Joe: Go for it. Joe: We got Gina from Washington. She goes, “Hey, I'm a state employee with
a Roth 457 just became available to us. I am 52 and have been maxing out my 457 with
$30,000 a year. However, I was told I can start contributing
$30,000 to Roth. I don't know how much they should contribute
of the $30,000.

We have $400,000 in a brokerage account, $200,000
in IRA, $100,000 in a Roth IRA, $250,000 in our 457 plan. Debt on the house is about $200,000. We each make around $120,000 a year.” Okay. Good start here. “I drive a 2019 Mazda CRS-” Andi: I think that's CR5. Joe: Oh, that is a CR Mazda CR5. That must be like kind of a SUV type. Al: That'd be my guess. Andi will check for us. Andi: Yep. Joe: “-picked for the Consumer Report Safety
Rating.” Andi: Yeah, it's an SUV. Joe: Yeah. “Wifey drives a 2022 Toyota Tacoma pickup.” Okay. Al: Wow. All right. That's impressive. Joe: “We roll around in a 2011 Winnebago
as time permits prior to retirement. Wifey is a longtime friend of Bill W.” Andi: That means she's a recovering alcoholic. Al: Oh, okay. I didn't know that. Joe: Wow. So. Al: So doesn't drink apparently. Joe: Okay. Bill W. Al: Used to perhaps. Joe: “I learned I enjoy Guinness after a
trip to Ireland last month. I'm 52, wife is 58. Two questions. Can we retire in 4 years? How much of the $30,000 allowable should be
put in Roth? We both work for the state, so this would
apply to both of us.

The state we live in is the home of Starbucks,
Microsoft and Amazon. Not sure this guess could be any easier, but
the town is where beer was made. The slogan was ‘It's The Water’.” Al: You remember that slogan? Joe: No. Al: I do. Olympia beer. Joe: Olympia. Andi: Wow. A beer slogan that Joe doesn't know? Al: Well, he was just a kid. Actually- Andi: Oh, got it. Al: Just a very- you weren't even born probably. Joe: I've had Olympia beer. Al: Have you? Joe: I have, when I was in Portland. Al: Got it. And I've spent time in Olympia.

I used to have a client. I used to have a, back in my CPA days, I used
to have a corporate client that I would go up once a year and spend some time in Olympia,
the capital of Washington. Joe: She wants to retire. Al: Yeah. Well, they. Joe: Oh, Gina. Sorry. Al: Yep. So want to retire in 4 years. So they've got about $1,100,000 right now. And if I just take $1,100,000, 4 years, 6%,
adding $30,000 per year, then they'll end up with about $1,500,000. Let's start with that.

That's kind of liquid assets available. So can we retire in 4 years? Let's see, we make around $120,000. How much do they spend? Does it say? I don't think so. Also, we don't know, they both work as state
employees. We don't know what the pension is. So I need to know what they're spending. I need to know what the pension is. But let's pretend you have no pension whatsoever. Let's say you got $1,500,000 and you're retiring
around 62 and 56, what would you say? 3% conservative, so 3% so $60,000 you could
live off of, maybe $70,000, something like that. Joe: So they're saving $30,000, are both spouses
saving $30,000? Al: Well, it doesn't say it, that's why I
don't know. I just took one $30,000. I did it conservatively. Joe: They both work for the state, so it would
apply to both of them. Al: It would, but whether they're both contributing,
I don't know. But really, the two main things we're missing
is what they're spending and what the pension looks like.

Then we could actually answer the question
sensibly. Joe: Okay. Let's just say 6 years from now. Well, I'm sorry, 4 years from now, they're
gonna have a- Al: They have $1,500,000. Joe: $1,500,000 to $2,000,000. Depending on if they're saving $30,000 or
$60,000. If they work for the state, I would, I'm assuming
that they'll have a pension. Al: I'm assuming that too. And so at $2,000,000, let's call it 3%, they
can spend anywhere from $60,000 to $80,000 until they bridge the gap to Social Security
or the pensions. So it depends on what they're spending. If they can live within $60,000 to $80,000
a year, I think they're pretty close. If not, they'll probably have to work a few
more years. But the whole Roth question is really going
to be based on their tax bracket in retirement. Al: Correct. Joe: And so what we need to understand more
is the pension amount if they have one, because that's going to be taxed at ordinary income. And so if it's a large pension, then we would
probably say, well, I would defer to Roth.

If it's no pension, then it's like, well,
it's going to be maybe a, how do you file? Are you filing a joint return? What is your taxable income? And then it might toggle a little bit, depending
on how much do you want to put in Roth versus non-Roth, but it, they have more deferred
monies than Roth monies. So maybe write us back and give us more details
and start next year with 100% Roth, and then we'll tell you either to toggle back or not. Al: We may fine tune it later. Joe: Yes. Al: Yeah, I do, I sort of agree with that,
Joe, because it would appear that everything they have is deferred, including the pension,
right? So this would give them more tax diversification. Gina didn't tell us anything about monies
outside of retirement, so we don't know if they have any. Joe: Well yeah, they have $400,000 in brokerage. Al: Oh, missed it. Sorry.

You're right. Joe: That's it. We're done. That was awful. That was nuts. That was a complete, utter disaster. So I apologize well in advance for that. Andi: For a good retirement spitball, the
fellas need to know four things about your finances: number one, how much do you, and
your spouse, if you have one, have saved for retirement in tax-deferred, tax-free, and
taxable accounts? How much fixed income will you have in retirement,
that’s number 2 – for example, from Social Security and pensions? Number 3, when do you want to retire? And finally number 4, how much you expect
to spend annually in retirement, preferably adjusted for inflation? Don’t forget to give us whatever name you’d
like us to call you, and your real location, in case state taxes factor into your spitball.

Then, we want to know where or when you listen,
how you found us, and of course, what you drink so Joe and Big Al can really get into
your situation. Click the link in the description of today’s
episode in your podcast app, go to the show notes, click Ask Joe and Big Al On Air, and
send in your retirement spitball. Joe: Got “Hi Fellers. Please call me Frenchie or some other name. There are a lot of Franco-Americans up here
in Maine.” Mainers. All right. So up in the beautiful state of Maine. Al: Maine. Yep. Love it. “I just started listening to the show about
two months ago.

Really enjoy your podcast. I think Andi should talk more.” Andi: Okay. I'll work on that Frenchie. Thank you. And by the way, this email is from October. So now they've been listening for 4 months. Joe: No, they can't- Al: Yeah, they're not sticking around. Joe: Totally done. Al: She's never going to hear this answer. Joe: Totally done. Frenchie. Sorry. “Give the woman some space, boys.” Andi: Thank you, Frenchie. Joe: Some space. Okay. We're crowding your space? Al: Well, let's just read the question and
have Andi answer. Joe: All right. Sounds good. I don't know if that would be compliant. Al: It might not.

Joe: It might be the end of us. Andi: I can give the laywoman's answer and
then you guys can correct me and laugh. Joe: All right. “I think Andi should talk more.” All right. Well, you got it. “Give the woman some space. I drive an inherited 2000 Toyota Avalon with
the sunroof.” Al: Well, you can't get rid of it, it's got
a sunroof.

Joe: I don't drink much, but when I do, I
like a plain gin and vodka- gin or gin or vodka. Al: Gin. Yeah. Joe: It's like I don't drink a lot- Al: I have both together. Joe: – but when I do, I want half gin, half
vodka and some ice. Little 6 ounce pour -please. Okay. “I am one of your few impoverished listeners. I'm 53 with a net worth of a mere $370,000
or so.” Al: That sounds pretty good to me. Joe: That's significant. “Basically, I just started working regular
after many years of starting and stopping due to frolicking and moving.” Al: Frolic? Joe: Yeah, everyone needs to frolic around
a little bit. Al: That's enjoying the journey. Nothing wrong with that. Joe: And then you just got to buckle down
and like, all right, here, listen to some- Al: It's like you wake up one morning. Joe: There's no finance podcast. Al: I frolic. You lie. I found YMYW. Let’s get to work. Joe: Yeah.

Okay. “I lived in Canada for 9 years and I have
about $120,000 Canadian dollars in a retirement fund. I can take that out without penalty and would
have to pay about 25% flat rate tax. I was thinking of doing this over the next
3 years or so, including this year- including this year.” In Canada, the fund is basically in our traditional
IRA equivalent, which charges a 1% management fee along with the fund expense ratio.” For someone that's been frolicking around,
he's fairly pretty tight on expense ratios. Al: Yes. Joe: The equivalent of an IRA flat tax there
in Canada. Come on, Frenchie. Al: It's because she's been listening to YMYW. She looked into all this. Joe: For a few months. Yeah. Andi: She probably listens because she's into
finance, even though she has been frolicking. Al: Okay. So she's pretty tight on what she's got. Joe: Yeah. “I could transfer it here in the US and
put it in my company Roth 401(k), paycheck to paycheck since as one of your impoverished
listeners, I don't contribute enough to meet the maximum contributions anyway each paycheck. To fund, I can put it in here as an expense
ratio of about 0.5% and no management fees.

So basically for each of the next 3 years,
I could take out a chunk, convert it to American dollars, let it sit in my money market fund
and each paycheck, max out my Roth 401(k) until the year's chunk is gone. What do you think?” So here's what she wants to do. She's got this money in Canada. She wants to pull the money out of Canada,
pay the tax, let it sit in her checking account. She wants to contribute to the Roth 401(k)
through her employer. Her paycheck is still needed to cover monthly
living expenses. So if she's going to max out the plan or contribute
more to the plan, she needs a little cushion in the checking account that she's going to
live off of from the Canadian retirement fund.

Al: Yes, I think that's super clever. Joe: Very much so. Al: It's kind of like a Roth conversion in
a roundabout way. Joe: She's taking the money out, paying taxes
on it, but she's getting money into the Roth. But the money to go into the 401(k) has to
come from her paycheck. Al: Yeah, because you can't do a Roth conversion
with a Canadian pension. Joe: Yeah, and you can't write a check from
the chunk that she took out and say, hey, this $20,000 I want to put it in, it has to
come paycheck to paycheck from her employer. Al: So the net impact is the same as a Roth
conversion, which is brilliant. Joe: Love it. Andi: I would have said the exact same thing. Joe: Yeah. Al: I know you would have. We should have let you talk. Joe: Okay, Andi, what do you think of target
date funds? Andi: Good, bad or other? Well, so if you don't want to pay any attention
to what you're doing, then it might work out well, just so long as by the time that you
actually are getting close to retirement, you spend a little bit more time looking at
it and making sure that you are invested properly for your risk tolerance.

Joe: Look at that. Al: Pretty, pretty clever. Okay, we're going to shut up now. Joe: She wants to go on a little 2040 target
date fund. So if you don't know what you're doing, this
is what you do? Is that what you said, Andi? Al: That's what she said. Andi: Or if you're not interested, if you're
not interested in actually managing it, you know, if you just want to invest and set it
and forget it. Joe: So what you know about Frenchie, do you
think she's interested? Andi: It seems like she's pretty darn interested. Joe: I know, right? Al: But she also wants to frolic and not think
about it. Andi: No, she's been doing that. Now she's buckling down.

Joe: She's geared up, bro. Al: Oh, I guarantee you in 6 months she'll
be out there frolicking on some level. Joe: You think it's just too much? Al: No, I think it's like, you know what,
when- Joe: It's a calling? Al: It's you want to enjoy the journey. Clearly Frenchie enjoys the journey. She will continue it out- continue at some
shape or form. Joe: You like to frolic around. Al: I do. Joe: I know you do. Al: Yeah. That's why I have Pure Financial manage my
$10. Joe: “When I reach retirement in about two
decades, because I'm improvished- “ am I saying that right? Andi: Impoverished. Joe: “-impoverished, remember? If the distribution of the target date fund
is 50% stocks/50% bonds, when I go to withdraw each month, can I choose whether if I'm taking
money from the stocks or the bonds? Or is it going to be one big stock/bond bucket
that is all mixed together? Thanks for spitballing, boys.

Thanks for creating the content, Andi. That allows the boys to spitball in all their
glory. I know who the credit goes to. Frenchie.” Andi: Thanks, Frenchie. Joe: No, you want to get, I mean, I agree
with Andi. I think as Frenchie gets closer to retirement,
you probably want to have a little bit more sophisticated strategy than a target date
fund. Because if you're taking distributions from
the overall account, it’s going to be pro rata, depending- if you take $100 out and
it's 50% stocks and bonds and target date fund, they're going to sell that. Al: So, yeah, the target date fund. So you picked 2040 because that's when you're
planning to retire and the fund itself has a glide path, which just means that earlier
it is, the more equities.

And then as you get closer to retirement,
it becomes more bonds, more safe money. But that's the problem, right? The problem is, is that the right investment
strategy for you? Maybe not. That's number one. Number two is when you take money out, you
can't decide to take it out of stocks and bonds. It's just pro rata out of the same account. So at the very least, probably as you're getting
close to retirement, you may sell out of that account and have some stocks and some bonds,
you know, mutual funds, index funds, whatever they may be.

So you can decide which side you want to take
the money out of. And which side you do, if stocks have gone
up, you pull some profits off and have your distributions that way. If stocks have gone down, let them recover,
take some money out of the bond or the safe money side. Joe: All right. That's it. We're outta here. Thank you. The show's called Your Money, Your Wealth®. Andi: Drinking by calories, friends of Bill,
and Franco-Americans in the Derails, so stick around. Help new listeners find YMYW by telling your
friends about the show, and by leaving your honest reviews and ratings for Your Money,
Your Wealth in Apple Podcasts, and all the other podcast apps that accept them.

Your Money, Your Wealth® is presented by
Pure Financial Advisors. Click the “Get An Assessment” button in
the podcast show notes at YourMoneyYourWealth.com or call 888-994-6257 to schedule your free
financial assessment, in person at one of our many offices around the country or online,
a time and date convenient for you, no matter where you are. Chances are, one of the experienced financial
professionals at Pure will be able to identify strategies to help you create a more successful
retirement. Pure Financial Advisors is a registered investment
advisor. This show does not intend to provide personalized
investment advice through this broadcast and does not represent that the securities or
services discussed are suitable for any investor.

Investors are advised not to rely on any information
contained in the broadcast in the process of making a full and informed investment decision. (The Derails).

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60 Years Old and Nothing Saved for Retirement – Top 12 Recommendations

moshi journal of the war about version 5 and her dick or nothing save time and in this video i will give you my top 12 recommendations from to gather épisode and the phoneshop s line my name is lynn mines and today we're talking about how you so I you're getting only star junior with over fifty with that over fifty5 maybe you our die in your sixties and now I have little or no 10 series time it i'm going to give you 2 tbsp specifics you can your original is concern there's no de jorna loon and it's never too late many people a coaching time lady finance even in the situation where we have the timing so stupid now arjan yourself in the beginning inge you where you were young just can't get by make and smeet more history family of chipper tells us times is a medium and helps and must collins take the pan yourself fit the sun tremor sixty thumping when in more detail with your juice at lower netting seyfried time and of course start in early there is a storing late but you can make up Alaska hands and math eyeshadow in situations unique and what works for one person may not work for another for coastal regions with the Parisian this video is the ghibli some practical ideals and strategies to consider this there can make a very big difference to you in your goal detail majors number 2 tap in the toori of your situation and then for your timeline that you already have the passado de is how shampoo pure fifty five singlet hero that had ten years before your sexy woman and 14 use the force that you can campus aladdin 14 years old and earth 3 vai dealers bart herbed be focused in that can we have plans at in the greatest az is your building churn and income that have income or the ability to become i can there is your goals english is not about how much you earn is what you chi the mathers new be surprised with him the people with high income i am super icons the wrapper elearning c at the front you'll be surprised at how many people with barry but is it war incomes have surprising the size ball to the ponies alice ivory terms and they financial planner eyes i head in the spectrum and him force me to the moon and more the natural tennessee is to spend more the global fund yogis and there you have to use your browser necessary expansions we already bread igor inputs and leslie protest you the cancer your channel effectively protest with old plans in moscow color go recommendation numbers 3 is 10 million numbers in economies way glowing you don't want your card in flow and url flow the income and expenses the calving budget through budget is to work parking were many people feel like folding budget is even though he has the you a bit suggest that you change through you want a lot budget of this chickens the the learns that helps keep it simple in a simple traces this is t still a nice way going nb controlling nice way glowing knowing you manage there you have to do a major a bit of the beak you often in thatcher fray recommendation number for completing journey they spend in arnhem with commitment to check all here tension quarter idea for what of the next perfect and min truck every penny you can simple idea what the pc' pepper donor come together or if you like i can download spending a dead spreadsheet the week savior it is very simple harpel toe an excel spreadsheet designed with purpose it free download and there is a link in the description below then I had a garden but my deesje number five is nipping the bud back online now I have to have color that is a bucket of income Camille and wedges Gillingham someone who will be empowered to make some changes the girl with me for middle what would be like if you were able to all your income or in other words i had no expenses there already fine and zeros the snowfall wants is thing you sent with your kids and corn oil in best oil that can be put in there someone for the nex-5t and 14 hours how much of nfc can you use your kimeli i would be a significant amount of money you should just think brain recommendation number sex this is the great and pink outside the box' the monsieur with your personal story but wait after bad guys mother pork royce duns with the laitman i did not prevent from being married and wooden awww man by professor locking must contain you won't you make and slammed and my new be challenging to be white and were determined to face life's challenge is what have they may be together have us leather yes we quiet small the finish my schooling and and there was also a full-time mother in singapore my and who weatherman etc to buy pearls you have to nemaattori in which comics people's saving 1 hour marie are to us in possible this is where we share the great if my biggest expence was rather fmri buddy we start to think boys republic loses when we get older and someone moving in with parents with the waif into small children and this point was after the bible option borsato time but we were determined to find a way to fool cycles likes people's so had to oil brainstorming my wife the BBC note the cursor church ring and she love to visit and care for elderly people save him from when in the elderly people there or in arcen who live in her home alone but he brings the point where can I assisted living and promised him and walked into a system care provider call when this weekend find someone there would be okay in the care provider game with the nekberghe into small chill you should never have anyone doing anything like this before I decided to take two mothers, in theory it is not acres of course this was washable before the Joline and anyway Glenn in there in the classroom white section to local newspaper who were surprised to see paths have that and Kohl's of people looking for loving care providers for the Cairns region billion more than one will be a rapper who with the first internship family Michel Nabertherm and in the film about who was new in elderly managers nine who are here three scraper from the strip company such a process and are now immediately since i was a barry k instrument the absolutely chill me you guys inside toe story home is the goal john their upper room and board we persisted full basement where films in refrigeration all utilities and my life was able to the shopping there is through and provide the not the care and they also peter siks to that per month additional the green office for and minimal when in love for the us complete guangzhou and sultry amical him only two in my wife's arms my i'm so my work this experience was a more photos on tags mother able to dry cycles so ark spencer's and even inc research then you have when you have to set it forward denpa one has to have brother first even the meteo another creative at work story and couple in sixty one very little c free time by a thousand glasgow and well it is in can was do you want that sylla bolhuis entire career day a creative and create aggressive client to do love them to reduce turkish patches bonnie lies and that person first rebirth desolder iphone how the plants downsizing santing was expensive to measure in d axl in blood in a world order good working part-time radiation the joris school and taking care for two worlds to that archer and her beds sharing to the chances and providing their father and son for the stereo period in t league dark gray coach the little one helps immensely because of that is sure of pain patient care and newer etc and that person or drink or two you could this was a big boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh boy oh my dough is in the cell and the workbench is there through the gates the age of 16 5s am that arbitrary their the advertisement wiser the plague this was my social security designated the full of time 161 5 is the moment the camel is want medicare prepared the sweet this would be tender how they live single in long Canadian and seven d is the new sixty-five we want you longer and that as the you or your spouse winter nineties and pianists cisticola hi hi er de may be putting the ship live the life you might be cross minnie beebe wants nme people in their voice and i still working sam micro sd not the income else because they eat simple in joy working in samsung not uncommon for a person to retire political board and to go back to work dear cousin oil pt if you will italian the media kühtai er from the wine and findi control idea of ​​tai chi chuan sint in de us better no ikke star the site has a small business or Samsung of the media budget that was there in future episodes and the Easter shop s line the plan back track mini on the procedure is the you could consider hats another reason why am I would consider subscribing to this channel you have a recommendation number is called the lion styling socials curry benefit's je keyword longer you're able to the lego scribes sander this can increase the size of the features of three benefit's in a link boys what is your had longer and burning history the youtube app storify earth delivery here the to work can make a big difference if we now the reader jury benefit's beyond for him agree you also can earn the darcy types of life timing grads the size of your social benefits can be much a larger my what you do is that you do n't want to have the good social studies trying to better understand our social security de lions time and credit work and for a customized social studies strategy presses live for you and i can go to social security line thanks to humor committee recommendation number name is john try physical and mental half dat satin cherry lifestyle list you the soul and the soul we bring the youtube and ashoka's times in physically and mentally fit maybe the most pointing you can take your time and we fill the new ipad you will have more energy you will and send your ability to work longer and to earn longer the benefits and exercise and the help of a church documentation number 10 is the haafidh 14 yourself a lot in your future the Muslim program 14 god gray and amazing things kabir kampen list aldo and meeviel roaming and even in possible that thing is a possible yo and more people and you think you're stronger than you think your mark reason that I think in your child your heart drinks you can overcome in a challenge to you for your mind 2l and Disclose of halloween there wilcox there is no chance no destiny no fact that a circular or nuisance or control the family room of that term a solo house inc your team live in Rijswijk and wayside DVD and you programmer penetrate from your bed show more you can series b there is 0 chads no destiny no fact that incident or hinder or control the cinema have that term and so recommendation eleven is the never stop learning the caribbean form and good books you have the number weather widget my bible on by george glitchen avatar der that along when we see 10 king bridge in the poll in very bizarre motivational a sparing angry am already you ca n't lean was bummed best be so a universe alone there a porn touch religions when comes to actually saving you fire a rat race for my kees with ketchup contributions and have all those videos the goal indeed that when CDA Lyceum in the most active Chile plausible and new of course will be wise in all-wheel of the people who left together the box that Redman in description below environments and 12 is the overflow you have a strategy Aramis Aegon reconversion mortgage it is a time rather in the morning that does not allow the needs to change the renewed hypes or rather in the morning the app more options and more flexibility in the queue the building fifty percent and King Johan and new loses a sixty-two that gate and in a purely morgens payments so I think there is a lot of humor morgens payments you may also be able to establish a tax free stream income the social media tyme come and get to the time in this video to go nobody yourself you can le morvan my book in chernaiev i only online those managers on the fences it is how a strategy cleo public gamechanger pio in your timing you have the toilet in my book while volumes on the books style the holistic time and prime revolution i can also just by the amazon search online a lame arm and your van de bin this is like rats link in the description below so you learn have my god of recommendations if you about fifty five and him just thing super terms definis par des video beneficial have the runs and oh please add a comment dumbell lo domino what sterile and actually to see your in the next episode or the financial pipelines [Music] [Applause] [ Music] [Applause] [Music]

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F.I.R.E – 6 Uncomfortable Truths we discovered about Early Retirement & how to mitigate them

foreign hey what are the ugly sides to 
retiring early um aren't you bored every   day just lying around doing nothing don't 
you guys worry about running out of money hey guys welcome back to another beautiful 
day here in Paradise Bali many of you have   been asking me so many questions like the 
above so today I'm gonna run through six   uncomfortable truths about early retirement 
as well as my suggestions for mitigating them   based on our own experiences reaching fire and 
being retired here in Bali Indonesia for the   past two years so uncomfortable truth number 
one retirement is a journey not a destination   for the record lying around all day doing nothing 
in retirement is a myth it's always nice to have   a few days of that here and there but in reality 
you do that for long stretches of time and you're   probably going to be hit very very hard with 
feelings of boredom lack of self-worth and you're   gonna be missing a sense of fulfillment retirement 
isn't a destination like Bali or Boracay it really   is the start of a New Journey in your life it's 
that stretch of time where you finally do those   things you wanted to do but always couldn't 
because you were so busy making money to   survive it can be anything traveling the world 
finally writing that book or studying that say   cross stitch side hustle if you never get past the 
myth you'll probably end up getting bored and then   end up going back to work and missing out on this 
Amazing Life Adventure so like every other journey   start planning what is this epic adventure you 
want to spend your retirement time and money on number two if you got bored during your 
retirement stuff maybe you're doing it wrong   so for a lot of people their retirement Jam 
is about traveling the world right that's a   super common one and it's amazing fun you never 
feel more alive and it's such a great challenge   because actually you need so many different skills 
to travel properly right you need Street smarts to   navigate the towns and scams and other issues 
on the road you need to be able to plan your   itinerary book the best travel deals know how 
to haggle your prices not to mention stuff like   riding a motorbike and scuba diving and at the 
start it's always epic it's so incredible but on excitement and sense of achievement starts to 
plateau and then you're gonna hit that point   of diminishing returns and it wasn't just 
in travel either it was also my painting my   businesses my surviving The Nomad life thingy I 
find that when love to remain largely undirected   most Pursuits actually tend to lose their flavor 
with time another way of putting this is perhaps   you feel yourself falling into stagnation or 
mediocrity thing is if you're early retired on   your own efforts then you're probably more of 
the go-getter and achiever type of person and   the aspect of your personality doesn't 
change just because you're tired you'll   still be looking around and judging if you're 
spending your time meaningfully and productively   to this fix personally I found two solutions 
that worked really well for me one either I   start drilling deep down into the details of 
what I'm doing or two I make it into a business   take my dad baking is his great love in retirement 
but he's not just begging anyhow for the fun of   it the last few years he's in pursuit of baking 
a tastier sourdough bread anyone has ever come   across out of 365 days in a year he is probably 
baked about I'm guessing maybe 400 sourdough   loaves two loaves each bake he tweaks the recipes 
the starter the technique the ingredients he does   some reverse engineering of sourdough bread that's 
commercially sold outside it's been maybe three   years and he's still going strong so he set his 
own special sourdough bread goal and Target and   standards instead of just serving and yogurting 
for fun I became qualified instructors in both   and eventually started both a yoga business and 
a surf school and you know I learned so much   more about both in the whole process whatever 
Pursuit out there if you start really drilling   down there's always more Improvement to be had 
more personal growth to pursue please say you love   Pottery don't just do it aimlessly to pass time 
polish up your skills enter competitions become   a professional Potter do commissions as your 
retirement side hustle or teach pottery classes   when you keep pushing yourself to those higher 
standards because you're either really drilling   down into the craft of it or you're running it 
as an Enterprise you'll find new measures of   productivity therein and you will be bored not to 
mention if you're actually like us on lean fire   whatever site income you generate will help defray 
the cost of your interests and hobbies so you   don't need to tap on your long-term Investments 
isn't that a really good deal so two years ago   at the age of 38 I retired with my husband here 
in Bali it's pretty early by most standards and   it's been a completely amazing journey we've 
learned a lot and I hope the insights we are   sharing with you guys are useful if you're on 
your own fire Journey or already neck deep in   retirement smack that like button share with us in 
the comments below what your retirement looks like   so far how you're keeping busy and whether you 
agree or disagree with the points we made here   now on to the third uncomfortable truth it's 
hard that you must defend your time you probably   retired so you can spend your time doing however 
you please whenever you please most of us will   have spent the vast majority of Our Lives 
thus far making a living which means usually   someone else is directing your time either your 
boss or your clients and we get really used to   that so then in retirement self-directing your 
time becomes something new and kind of foreign   and if you look at retired folks in Singapore 
after working jobs that entire lives most of   them graduate on in retirement working as free 
child care services for their grandchildren   if that's their ultimate dream and for some 
traditional older folks it definitely is then   it's wonderful I'm really happy for them but 
for some it may not really be that but they   find themselves doing it anyway kind of like by 
default because they're just so used to allowing   someone else to direct their time for them there's 
always going to be people around who will try to   take advantage of your free time asking you to 
run errands for them perhaps or like for us here   in Bali we get so many requests from both people 
we know personally and complete strangers of the   internet asking us to do stuff like plan their 
holidays show them around Bali Etc of course we   love hosting close friends and family and we 
enjoy helping people generally but sensibly   speaking our own private lives would just vanish 
if we were to entertain all the requests we get   you'll need to learn how to say no to people and 
how to strike balance retirement is as much about   sharing your time with the people who matter 
to you as it is about having time for your own   personal growth and development just be aware 
uncomfortable truth number four it's probably   gonna be just you and your significant other from 
now on out so upon retirement your social scene is   going to change drastically everyone else is at 
work or busy with their own stuff you're either   gonna have to learn to enjoy your own company 
a lot or if you're lucky enough to have retired   with your significant other that's who you'll 
probably be spending majority of your retirement   with so best learn to get along companionably good 
communication is key as it's just generally being   a considerate and respectful human being through 
the pandemic and on the road this past decade   I've seen so many people who seem really surprised 
by the person the other half truly is when they   start retirement and start traveling together 
24 7 a day but building that Comfort to do   stuff by yourself and building that wonderful 
relationship with your other half can also   possibly be the most rewarding part of your 
retirement journey and your personal growth   before I share with you the fifth uncomfortable 
truth just the quick word from our sponsor of   today's video MooMoo Singapore the stock 
market is historically one of the most   popular ways to be invested I myself hold 
a select number of U.S Blue Chip stocks and   ETFs and for over 10 months now I've been using 
the MooMoo Singapore platform the mobile app is   intuitive fast easy to use I get free real-time 
data and even level 2 quotes plus the super   competitive commission costs including trading U.S 
stocks with zero commission saves me so much money   for a limited time now new users of MooMoo 
Singapore get a Kickstart with the investor   starting kit worth up to 2086 dollars when you 
sign up and deposit a hundred Sing dollars into   the moon Universal account will neutrals in two 
Sing dollars cash buy every day for the first 10   days that's a gift of 20 Sing dollars absolutely 
free on a deposit of a hundred dollars or more   deposit two thousand Sing dollars and perform 
to buy trades you'll receive one free Coca-Cola   share with about 80 Sing dollars if you deposit 
ten thousand Sing dollars and perform seven buy   trades they'll give you a 108 Sing dollar Cash 
coupon no questions asked I strongly believe that   in today's day and age to be financially capable 
necessarily means one must be putting the money   to work for them in one way or another so why not 
take advantage of these offers right now for more   info click on the link in the description below 
uncomfortable truth number five your money plans   are never as foolproof as you think all retirement 
whether it's the regular kind or fire really all   boils down to the financial planning behind it 
right and the most uncomfortable truth of all   may be that your retirement funds are never 
as foolproof as you plan for especially if   your plans are supposed to spend 30 40 even 50 
years in the case of early retirement expert   predictions and assumptions go wrong you made a 
mistake in your portfolio planning because of all   the buyers that we all carry Bear markets happen 
blacks on events gray Rhino events so many things   no matter the plan no matter how much stress 
testing you did before you dove into it the   unexpected often happens and the sooner you come 
to terms with this uncomfortable truth the sooner   you can move on to hatching against the risks 
You can predict most retirees they're working   their financial planning and less Aid around 
the four percent drawdown rule right so the   U.S stock market has had a phenomenal Run for the 
last 10 12 years or so now of course things are   looking a little different for the foreseeable 
future so those who have been conservative and   who have refrained from tapping their long-term 
investments will have more breeding space now   to ride out this bear Market however long it may 
last friends who have been following our journey   for a while now know that a dominant portion of 
our retirement here in Bali consists of rental   income from a number of real estate Investments 
and unfortunately in the last two years since   we started retirement Europe is a game at War 
soaring Energy prices have driven up the cost   of living across the world and everywhere massive 
inflation is now a huge issue thankfully we have   so far managed to resolve whatever disruptions 
we've experienced but basically yet another   uncomfortable truth in retirement is that managing 
your money to make it last till the end takes up   more time than you think don't just go to sleep on 
it continually look to diversify the eggs in your   basket and be open to adjusting your money plans 
like rebalancing your portfolio or changing how   you invest your retirement Arsenal as different 
opportunities present themselves for time you may   not need to work for money any longer but doing 
stuff that fuels your personal growth and that   generates some extra side income as a bonus is 
never a Bad Thing uncomfortable truth number six   no point sweating the small stuff y'all know I'm 
a big fan of simple frugal living and no pretenses   whereas happy dining in a fancy restaurant 
as we are eating at the local War rooms here   sometimes more happy actually but many of us 
can also easily get carried away diving into   with the itsy bitsy details of frugal living you 
know spending two hours here looking up deals and   coupons that end up saving you 10 bucks three 
hours there figuring out how to maximize your   air miles should you lock in that 3.5 fixed 
deposit rate now or wait till next week where   maybe it might be 3.7 I mean it can be fun 
and then it can also be a lousy use of your   time you can do it if you enjoy the challenge 
just know that so long as you get the big stuff   right your retirement is probably going to work 
out just fine so don't sweat the small stuff   big things include stuff like keeping on top 
of your overall General expenses you know doing   your taxes right maintaining a balance then 
Diversified portfolio so as long as you keep   on top of all of that I think that's about 95 of 
the big picture really conversely what I'm also   saying is that if you blow up your retirement 
finances by for example trying to go big or go   home on crypto no amount of coupon cutting is 
gonna save you from having to go back to a job   so yeah that's my take on not sweating the small 
stuff we're all retire at some point of Our Lives   whether early or late voluntarily or unwillingly 
it all boils down to choice and advanced planning   just what I've personally observed is that if 
you cut out all the noise and distraction in   life what do you think are the real currencies we 
truly traded the way I see it is four things it's   money time Youth and health just think about it 
everything we do throughout our entire lives is   really us trading one of these for the other an 
early retirement is that one anomaly where you are   in a position to spend all four currencies at once 
simultaneously and that maximizes your experience   of life a really clear illustration of this is 
traveling you can travel in your 60s and 70s sure   that's what most people will end up doing and it's 
great you know you see these folks really enjoying   seeing new things being very happy but it's often 
in the form of like lots of cruise trips around   the world and that's cool too but they'll never 
experience what it's like to try learning to surf   or sail and getting all salty and burned and 
muscle achy but happily exhausted oh they'll   never try anything more vigorous and adventurous 
like say backpacking your way through Europe you   know crushing in new hostels meeting crazy people 
from Iceland or wherever and doing silly things   together we all have two lives the life that we 
currently live and the life we could possibly live   so then which life would you choose tell me in 
the comments below and don't tell me you wouldn't   retire early because you just wouldn't really know 
what to do that's just a cop-out answer because   yeah well you're too lazy to do the legwork 
and try new stuff and understand yourself   thanks for watching as always speak 
again next Saturday bye foreign

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Retirement Planning Webinar – 2 May 2022 | Australian Catholic Superannuation

Good evening everyone and welcome to Australian Catholic Superannuation and Retirement Funds ah Retirement Planning Session on this the second of May two thousand and twenty-two. Um I presume that we've got people from all over the country. Um my name is Ray Smith. I'm the regional manager in WA. Uh I'm joined by Jolene Stockwell. Ah who's a financial planner based also in WA. And the moderator is Mr. Justin Colley ah based in our Sydney office. The slide please Jolene. Here we go. First of all, I'd like to acknowledgement of country. I'd like to acknowledge the traditional custodians of the land on which I work and live and recognise their continuing connection to land, water, and community. I pay respects to elders past, present and emerging. I should mention that if anyone wants to ask any questions, they should use the chat facility.

Um and we will deal with those either as we go or at the end of the session. Um Um and you can just log those on with us. Um because we're a financial product of course we have to give a disclaimer. Any of the advice contained in this presentation is of a general nature. And it's not taken into account your personal objectives. Financial situation or needs. Prior to acting on any of the information from this presentation you need to take into account your own financial circumstances. Consider the product's disclosure statement and target market termination for any product that you are considering and seek independent financial advice if you're unsure of what to take.

Past performance is not a guaranteed reliable indicator of past perform of future performance. One of the things that we're going to talk about this evening is retirement goals. Uh different people have different desires. Uh some people want to travel and even that can take different forms. Um some people want to spend a lot of family time. I can tell you my wife and I in the past have done several cruises and at some stage we'll probably want to get back into it. Um from an entertainment point of view or from a a from a travelling in a a domestic level. You can either go anything from camping to to glamping. Ah you might just be content doing your gardening or you might want to go to theatres and shows and things like that. But depending what you want to do will totally depend on whether or not you've got sufficient money saved to be able to do that.

And so part of this presentation is trying to provide you with information that will put you in a position where you're best served to be able to do all the things that you want to do. So on that note it's very important that you know how much money you've got in your super. Uh you should be making sure that your employer is making their contributions on time and they're up to date. Uh read an article in today's paper that they're going to chase up on a lot of employers in the building and construction industry because they're well behind. Um you want to work out What you might want to do ah and whether you want to add more to your balance and we're going to talk later on in the presentation about how you can do that ah and what limits there are as to how much you can put in You want to make sure you know how much super you are going to need ah when you get to retirement and from that point of view ah you can get assistance from our financial planning team.

Ah and it's all about meeting your desired goals. Jolly. First of all, it's worthwhile considering how much money you might need and there's in Australia, there's a one of the pillars toward retirement is the old age pension. Uh if you're a single person and you're eligible for a full old age pension, that amounts to twenty-five thousand six hundred and seventy per annum And a couple doesn't get twice that because they believe that many of the expenses are shared. So a couple combined get thirty-eight thousand It is the Australian Superannuation Funds Association have decided that for a modest income a single person needs a roundabout twenty-nine thousand 139 per annum. And a couple will need 41, 929 combined. So if you're quite content with a modest retirement then it's not inconceivable that you may be able to do that ah on just the old age pension assuming of course that you qualify for the full entitlement.

But many us have a desire to live a little bit better than a modest retirement so we want to be a little bit more comfortable. So again as for us determined that on average a single person who wants to live a comfortable retirement needs around about forty-six thousand dollars and that a couple needs somewhere closer to sixty-five. So as you can see there's a little bit of difference between what the old age pension will provide and what you need to live a comfortable lifestyle. So it's pretty important to determine or to consider putting a little bit extra into your super and making sure that you've got sufficient to live the lifestyle to which you want to become accustomed.

Um this slide actually gives you some indication of what the differences between a modest and a comfortable retirement are And at simple things like some people might be happy with takeaway food from McDonald's or from Hungry Jacks but some people want to go out more regularly to restaurants and and have fine dining. So those sorts of differences ah are what determines whether or not you have a comfortable lifestyle or a modest one. My suggestion would be if you fund toward a comfortable lifestyle and you're happy with a modest one well then you've just your money's going to last much longer. And that slide also gives you a bit of a comparison with how that relates to the old age pension which is ah arguably another step lower.

Those figures provided by Asfa ah as well which is the same association. we are Australian Catholic Super take a very holistic view to your financial situation because not everyone is adamant that all of their savings need to be in superannuation. Um there are times when you need immediate access to money so it's a it's handy to have some accessible money and that's in the form of cash in your bank accounts. Uh these days in Australia a lot of people actually own shares themselves or have purchased shares. Now some of that might have started back in the seventies and 80s when AMP demutualised and and that gave the average Australian access to owning shares and I think it's become more popular. property's always been a a very popular investment vehicle here in Australia.

Um and a lot of people have got investment properties and things like that. Um obviously the cost and the value of the family home is an an important consideration. Uh particularly from the pension point of view because your family home is not considered an asset but we'll talk about that later. And obviously our area of expertise, superannuation and some of the advantages from a tax point of view and some of the ah reasons that supers are very effective savings vehicle for people toward their retirement years. Thank you Jolene. Another important consideration is the tax benefit of using superannuation. Uh contributions into super by your employer or contributions that you make yourself are taxed at 15percent on the way in and any investment earnings that are generated in the superannuation phase are taxed at 15% or up to 15percent. That also applies in transition to retirement if you're accessing your via a pension but you're still working You still pay the 15% tax on the investment earnings.

But as soon as you move to an account based pension and that's determined by either turning 65 years of age or if you've had a cessation of employment after age 60 then money that's in ah an account based pension at that stage is not taxed on the investment earnings. So there's some benefit to have so because if you've got money in the bank and you're generating interest and that's obviously not particularly applicable at the moment but in times when you are that income needs to be declared in your tax return so you pay tax on it at the marginal tax rate so in the allocated pension the fact that you don't pay any tax on the earnings is very beneficial.

funding toward your retirement. Uh there's a couple of considerations. Uh these are the ages that people can presently get access to their superannuation. And for people who are currently aged 58 or 59 what they access from their superannuation or a pension phase is taxable. Once they turn 60 and up to age 65 it's not taxed. Uh but they still need to meet a condition of release to be able to access to it. And after age sixty-5 ah the proceeds are still not taxed. But whether if you're whether you're working or not ah you're you've got unlimited access to your money because you've met a condition of release as a consequence of turning sixty-five. One of the ways that you can get a little bit of money into superannuation is to salary sacrifice And the reason why people might want to consider that is that it's quite often applies a preferential tax treatment to your contributions into super.

We have a tiered tax structure in this country. And the more money you earn the more tax you pay. And as you can see with the various tax brackets. Um example from 45, 000 to $120, 000 your marginal tax rate is thirty-two point five percent. If you earn between 120 and one80000 and this is taxable income not just earnings so it might apply to other income that you generate. It's 37%. And if you're taxable gross income is an excess of 1 000.

First congratulations. But secondly your marginal rate is a 45% figure. It's approaching half of what you earn beyond $180, 000 goes in tax. superannuation guarantee has also been elevating of late. Um many of you would have realised on the first of July last year that the percentage went from nine and a half percent to 10%. Uh on the first of July this year it's going to go to ten and a half percent. The first of July next year. It's going to go to eleven and so on and so forth until it meets its cap of 12% on the first of July 2025. I mentioned that it might be worthwhile considering making salary sacrifice contributions. So we've done up a bit of an example here. This is a person on a salary of $100000 dollars. So their fortnightly pay is three thousand eight hundred and forty-six dollars. If they don't make any additional contributions to super the taxable portion of their income is the three thousand eight hundred and forty-six. And their take home pay after the deduction of PAYE tax is two thousand eight and $eightyfour.

If that same person elected to contribute 5 percent of their earnings into superannuation as a pre-tax salary sacrifice contribution. Thereby an amount of a 92 dollars. It reduces their taxable income by that same figure. So the taxable portion is now only $3653. take home pay has similarly reduced but as a consequence of the tax difference it's only down to two thousand 757, which is only a reduction of what they would have taken home of 1 twenty-seven but at the same time they're contributing $192 into their superannuation. That gets taxed at 15% of course as a salary sacrifice contribution provided hasn't exceeded the cap. Ah but over a period of some 10 years that is a sizable contribution to their super and based on these this particular example it's potentially a saving of seventeen thousand, 160 over a 10 year period.

What I have in facted in of course is that if you're ah income is over 250000 that eh it's slightly different and it's somewhat compromised. There's two different ways you can make contributions into super. The most obvious is the concessional contribution and that includes your employer contributions such as salaries sorry superannuation guarantee ah your employer may make additional contributions to your super you may choose to make salary sacrifice contributions as well and for those people an example of which is a self-employed person they might make personal deductible contributions ah and they're all considered to be concessional contributions and cap for that as of this financial year is twenty-seven thousand five hundred dollars and anything up to the twenty-seven thousand five hundred that is a concessional contribution going into the super is taxed at 15% on entry. On top of that, you can make additional contributions called non-concessional contributions and the limits for those as of the first of July 2021 for a person under 67 years of age.

They were able to contribute one hundred ten thousand dollars per annum and you could roll forward two additional years worth of contribution. So, over in one lump sum contribution, you could pay in $330, 000 but then that constitutes the payments for three consecutive years. 67 and 74, you couldn't bring the role forward option into play. You were limited to $110, 000 and currently there is a requirement that you have met the work test and the work test is to have done 40 hours of within any 30-day period and you had to meet that each and every financial year to be able to make the contribution but you only had to meet it once in that financial year.

So if you met the work test in July that then permitted you to make the contribution at any stage during that year. Once the new financial year started however you needed to make the work test again in order to be able to be able to make another similar contribution. And to 75 years of age there is no further opportunity to contribute into superannuation. We're going to talk in a little while about some changes that have been made but they're the limits that currently exist and they're the conditions that people have to meet to be able to make contributions. There are other ways to contribute to superannuation. So if you are currently over 65 years of age and you sell the family home which you've owned for more than 10 years, you have the capacity to make a downsizer contribution of up to three hundred thousand dollars each. you can make contributions on behalf of your spouse and your spouse can make contributions on behalf of you and in some circumstances there may be an eligibility for a rebate.

And one of the other ways to contribute to your Australian Catholic superannuation is to consider consolidating other superannuation funds. Um many people in Australia have multiple funds as a consequence of having a multiple multiple employments over their work life. And for some reason some people just don't get to the point of consolidating all all of their superannuation funds. The reality is having multiple funds means that you're paying multiple fees and it's quite possible that you're also paying multiple insurance costs as well. When can you access your access your superannuation? Cuz we've talked a lot about putting money in but obviously the purpose of that is so that at some stage you can get access to it. So at the moment if you were born before or sorry if you were born between the 1st of July nineteen sixty-two and the 30th of June 1963 your preservation age is 58 and in order to be able to access your superannuation you have to have reached your preservation age and met a condition of release.

58 and fifty-9 year olds that condition of releases to have genuinely retired with no intention of working again in the future. If you were born after the 30th of June 1964 your preservation age is 60 and anyone born after that their preservation age continues to be 60 as well. And in order to be able to access your superannuation you have to have ceased an employment arrangement after having had your sixtieth birthday We haven't put age 65 or above on the slide because irrespective of your circumstances ah you've got full access to your superannuation after your sixty-fifth birthday. So how can you access your super? Ah historically ah and I'm going back many many years. Ah when you got to retirement age you basically withdrew your money out of your super.

You put it in the bank or did whatever you needed to do with it. Um and so it was being accessed as a lump sum and that doesn't mean that you can't do it these days. But the reality is more and more people are getting considerable amounts of money in their super by the time they reach retirement. In many case it's likely to be their second biggest investment after the family home and in some cases it might even be more than the value of the family home. So more and more people are deciding to move it into an income stream and pay themselves a pension from their ah self-created superannuation fund. It's worthwhile mentioning that you can only create an allocated pension with money and super.

So quite often a lot of people as they're approaching retirement and are about to set up an allocated pension. Use that opportunity to some extra money into their super in the form of a lump sum contribution just before they retire. At this point I think I will pass over to Jolene and she'll take over. from me. Good evening everybody. Thank you for joining us. So the first pension that we're going to have a look at is the transition to retirement.

So this pension is where you've hit your preservation age. So if you're currently 58 or moving to 59 and for the rest of it's form aged sixty. But you're still working. Okay. So the key thing here is you're under 65 and you're still working. You're more than likely to have a transition to retirement pension. There are some limitations. It starts to allow you to access your super but there's rules around how much and how you can do that. So if you start a transitioner to retirement pension and you are under age 60 you will still pay some tax on the income that you draw down. But if you are over 60 then that income now becomes tax free. When you withdraw it. The investment earnings though are exactly the same as super. So whatever earnings that your account being still invested is making for you is taxed up to a maximum of fifteen. Now the accounts that you have one of the rules is that you must take a minimum payment.

And that minimum payment is legislated determined by your age. So, if you're under sixty-five, it's 4%. Now, for the last two years and the government has just announced for next financial year, they're going to continue it as well. Is that that minimum payment that everyone must make is now reduced by 50%. So, if somebody wanted and account either a transition or a full pension. The minimum amount they only need to take is 2% if you're under 65 or 2. 5% if you're 65 or over. Now above that transition to retirement allows you to take a maximum of 10percent. Okay? And that payment is per financial year. And it's 10% of your starting balance if you started midway through the year. Or of your balance that you had in that account on one July. So remember key thing is, after age sixty, it's a lot more friendly because you're not paying tax on the with schools.

But if you are 58 or 59 and you have a transition to retirement, you do get a little bit of a rebate but you're still going to pay a little bit of tax on that as well. The allocated pension, this is when you've hit a condition of release. So you've either turned 65 or if you're younger than sixty-five, it means you've hit a retirement point. So you may have changed employers, or you retired and you're not working 10 or more hours in any week. The rules change here. They open up a bit more. So the first one is the attacks on the investment earnings goes from a maximum of 15 down to zero. The minimum payment rules still apply. So those reduction from 4% to 2%. They all still reply. But you have full access. So you've unlocked your Subaru. So if you wanted to take out ad hoc sums or if you wanted to take out income more than 10% of your balance per financial Year you've got that access.

Because an allocated pension means you have unlocked your super. So you could take all of it out if you so wished. Same rules apply. If you have an allocated pension and you are 58 or 59 there is still some tax payable. But if you're over age 60 and you've got an allocated pension or if it is tax free and you can take out ad hoclump sums when the unexpected happens or when a big event family, weddings, travel, any of those things occur. within the pension stage, a Stern Catholic has two products. So, the first one is Retire Choice and it is all about the investment choice.

So, from the investment menu that you have with Australian Catholic, you can mix and match and you can choose different investments. So, anything from 100% cash to 1 00 percent shares and mixed options in between where instead of you picking and choosing how much you want in cash or how much you want in Australian shares or property, the choice of how much in each of those categories has decided that you choose overall the type of risk you have. So retired choice is all about that investment choice. Choose where you're invested and you can choose which investment you use to pull down your regular payments. There's quite a few to choose from. You can mix and match between these two columns. So the diversified options are the mixed options that are premixed.

So shares is a mix of Australian and international. Growth is a mix that has more shares than property. And then it moves down. So you go from growth to balanced conservative balance. Conservative. Capital stable. Socially responsible is similar to risk around the balanced option so it's mid to high range but it's looking at socially responsible investing which means it's focusing on companies that take a stronger stance. You can mix and match those with your single asset options as well. So this is if you have particular fondness for a category that you want slightly more investment in. You can choose that as well. Retire Smart is a pre-designed product. So it takes away that choice of where you're putting your money to be invested but also where you're drawing the money out. So it looks at trying to generate income over the long term.

And making it last as long as possible. So this is how this one works. You take your money and it's invested between growth and cash. And as the years go on The cash distributions move to cash so that you keep taking your regular payment along the way. But the growth assets stay in the background churning away and then move with the markets and sometimes you'll have more money being paid out than others when the years are really good and they flow back into there as well. Oops. Sorry I thought there was another slide in between that. With that particular mix you don't choose whether you're taking down from the growth assets or from the cash. It's automatically set up. So that all you're doing is saying I want the Retire Smart product. The growth assets are a little bit higher. So for some of our more cautious or conservative investors have a look at Retire Smart because it may not fit what you're looking four. Okay so it takes away your choice. So when you do decide you want to use it make sure you've had a look at it so you know that it suits you and what you're expecting.

Longevity is the big question we get. And people say well do I have enough? Well do you have enough? How much are you spending? How long does it need to last? Because the real question that people are asking when can I retire? It's not. When you can it's how much do you need to retire when you want? Because some people find out that if they do end up looking like they have enough they might say well you know what? I can choose to retire when I want.

So, I'm enjoying working. I might do it for a little bit longer. or they might turn around and say, well, you know what? Now that I can retire, I am out of here. So, the big questions about longevity. When we're doing financial planning, there's some concrete benefits, you know, can we help you save more for retirement? But there's also some other benefits that come from having a bit of a roadmap and a path forward.

And looking at okay well what happens if we've got some big events. We've just been through Covid. We had GFC previously. But also will it last? Because we're all living a lot longer. So we've got a bit of an example. For everybody. So this is looking at the comfortable lifestyle. Looking at a couple. They're sixty-five. But their retirement age pension age is a little bit higher than 65, but they don't want to wait until their age pensionate.

They want to stop earlier. And they've got a little bit of money each. 300000. So in total they have 600, 000 available to them. They own their own home. They don't have any debt. So longevity wise, how long will their money last? In conjunction with the age pension, it can last them through to their nineties. And that's because they're using a combination of not only their own savings but the aid pension as well. So that can provide a base for people. Now, if people want to more or if they want to retire earlier, then they're going to need more money saved to start with. And this where the income comes from. So this couple retired a little bit early.

So in the first year the purple is all of their superannuation. It's all what they're using. And then the age pension starts to kick in. They've still got a bit of assets behind them. So they're not getting the full age pension from the start. But they eventually do. And it pushes out their own savings. So their own savings can last longer as well. age pension eligibility? Are you age pension age? So it's steadily being increasing to age sixty-seven. So a lot of people say right I'll retire when I'm sixty-seven. You can still access your super from age sixty-five. That hasn't changed. Are you an Australian resident? And what assets and income do you have? So Centre will look at you both. They'll look at both your assets. Both your income together and they'll say well whichever one gives you the smaller amount that's the HP that you're going to get.

So how much are you going to get? This is your ages. So for anyone who is before 31st December 1956 then you don't have to wait until sixty-seven. Anyone after one January we've gotta wait just a little bit longer. These are the testing rates. So these were updated in March. So if you are single and you own your own home then the purple range that we're looking at. This is the full age pension. Blue you're eligible for a part age pension and the closer you get to the orange line the smaller that gets until it cuts out completely. The main thing here to take note of is that if you don't own your own home you're allowed to have more assets behind you because you're going to need it.

Cos if you don't own your own home you're going to be renting and when you're renting you can potentially be moving depending on the rental market. So this has an impact and we do need it a little bit more of an estate behind you. Same rates for couples as a homeowner. You have less before the age pension cuts out as a non-homeowner. You have more because you'll need more to support yourself with that. But as you can see as a couple, to receive part of the gauge pension, there's still a rather large allowance there. So, that allows people to even if they're only risk feeding a very small age pension to start accessing the benefits that come withholding the age pension card as well. The income test. So we see a lot of singles and a lot of couples where people are transitioning into work.

So they might start cutting back theirs especially among the teachers. Where they're looking at potentially job sharing or potentially moving to relief work. And a couple sometimes we see one person stopping work before the other. So what that means is you don't have to be a fully retired and earning no income. Before you receive the aged pension. You're still allowed to be working and earning. It just means that you'll eight part age pension.

And those are the limits there. The most that you will receive as a single person. Twenty-five 600. This is equal to the very cautious lifestyle that Ray was talking about earlier. Okay. And even as a couple thirty-eight thousand seven hundred. So if you're single you need more because you're still going to be paying your rates. You're still going to be paying your rent. Your living cost. Your utilities. And a couple you're still paying those for the split twenty-two of you.

Okay? So, there is a little bit extra there for couples but again, it's not double because some of those utilities rents, all of those, they're shared. Okay? But if you go back to those lifestyles that Ray was talking about, thirty-eight, almost 39, 000 for a couple, almost 19 and a half for a single quota. That's a lot less than that comfortable or even that modest lifestyle. So, it really is At the and and most people are trying to put themselves a little bit ahead of that because it just makes it a little bit more flexible to deal with things that may occur later in life. If you can't get the age pension enough, you may be eligible for the Commonwealth Seniors Healthcare card which does provide some benefits.

It is not asset tested. Okay. It is income tested. So, it depends on how much money you are earning. So, even if people don't the age pension card because they've got a bit too much of their own savings. If they're not working or working very little they may still be able to access some of the benefits. and the state government also has a couple of benefits as well. Now fully aware that the state government there is a lot state to state and it's not always a lot of difference but it is worth checking out that you're able to access a seniors card from your state government earlier than what you normally would be aged pension card in the Commonwealth Seniors Healthcare card. So have a look.

See what benefits are available and when they kick in for yourself so that you can try and use them as early as possible. And as Roy mentioned earlier, we've got some changes coming up in July. They were proposed a lot of them in last year's May budget and they've just become legislated recently. So, they're all starting to kick in from July. Rate, did you want to have a look at the upcoming changes? I'll take over. Thank you. Thank you, Jonathan. Yes, the government because of Covid have decided that the 50% reduction on the minimum draw down that had existed for the last two years because of COVID would be extended for another year. So, using Jolene's earlier example. A person under 65 under the age based structure has to take 4%. But with the 50% reduction obviously that's reduced to 2%. So that's the minimum. So you don't have to take that reduction but it's an opportunity for people to withdraw or draw down less if in fact they don't need it for whatever reason.

The government have also said that where historically you had to earn in excess of four hundred fifty dollars in a calendar month to warrant a superannuation, guarantee, contribution being made for you. The government have decided that all that does is disadvantage very low income earners. So what they've said is they've eliminated the four hundred and fifty dollar threshold. So after the first of July this year, if you earn any money from from gainful employment, the employer will be required to make a contribution. And again, as of the first of July this year, that is going to increase the percentage. So it was 10% of your gross ordinary time earnings. And as of the first of July 2022 that's increasing to 10 and a half percent. So everyone will be getting a little bit more into their super ah as a consequence of that increase.

Up till now and it's still currently exists until the first of July but in order to be able to make contributions of a non-concessional type to your superannuation if you are aged between 6-seven and seventy-four. I mentioned earlier that you had to meet the work test. The work test is being abolished as of the 1st of July twenty twenty-two. So if a person between 67 and 74 wants to make a non-concessional contribution to their super they will be able to do so. The limits will be $1 00, 000 a year or three 30, 000 dollars if you contribute three years worth of contributions in one. to bring forward rule is being included up until the age of 75 and as we mentioned earlier after seventyfive there are no contributions permissible. We mentioned earlier that if you're over 65 and sold the family home that you'd owned for more than 10 years that you could put up to $300, 000 into superannuation That minimum age has been reduced down to sixty. So those people between 60 and 65 who want to make a contribution to their super have the capacity to do so. And the first home buyers can now save up to $50, 000.

Ah and any earnings to use as a home deposit through the first home buyer saver scheme. Some of the other areas where our financial planners can be useful is information with regard to creating a will Uh things like power of attorney and enduring power of attorney. Uh and even whilst you're in superannuation or the pension phase. A very important issue in relation to estate planning is to nominate a beneficiary within your superannuation fund. There's a couple of different options available. There's a a binding nomination and as the name implies that binds the trustees to pay it the way you've indic there is a non-binding nomination as well which is a guide to the trustees. Previously it used to be referred to as a preferred beneficiary. Uh because that's who you would prefer the money to go to. And if that person is an eligible recipient then I'm reasonably confident that in a great many cases the trustees would pay it to that person.

But one of the other advantages of having a binding nomination is that because the trustees are bound to pay it the way you've said they don't have to do research to determine if there is anyone else out there who may be eligible to receive your proceeds. And so my experience is that people with binding nominations they're paid out a little bit quicker than those with non-binding because with the non-binding the trustees have to be sure that there isn't anyone else ah that's able ah to receive any approach your proceeds on the in the event of your death.

Our financ ial planners are also trained and well versed in the needs of aged care. Whether that's for yourself or whether you're planning for others. A lot of people baby boomers are all reaching retirement now but a great many of them have got parents who are entering aged care facilities And it is a mine filled of decisions and and choices. Uh so that's where our financial planning team can be of immense use. Ah on that very subject some of the things that our financial planners can assist you with is saving your money on your to your retirement, helping you to maximise your centrelink entitlements to give you some indication of how long your money will last when you're in retirement. Um looking at your goals short, medium and long term and establishing whether or not your current superannuation accumulation is adequate ah for those that you've got in mind.

I mentioned estate planning. Uh advice on other non superannuation superannuation investments and strategies. And also advising on your partner or family member because couples come to the Financial Planner s together because what you do will often affect your spouse and vice versa. There are other ways that we can help as well though. Uh our goal is make superannuation journey as simple as possible And so regional managers such as myself and the call centre team can assist you with general superannuation and pension ah questions.

They can provide you with forms or they can assist you to complete forms when necessary. They can provide you with ah account information. It has to be ah basic or factual but not basic. That's not the right word. Ah general or ah factual information. Ah and you if you want speak to a regional manager and you don't already have their contact details you can just call us on the fund on thirteen hundred six five eight double seven six and if the call centre team can't help you with your enquiries or if there's a need ah to be referred to a ah regional manager or a financial planner they can provide you with those appropriate referrals.

There are some people within our fund though that would like some limited advice on specific topics that don't necessarily need to see a comprehensive financial planner for that information. And a couple of examples of that are how much you can actually contribute ah so that they take into account how much your employer SG is encroaching into the $27, 500 concessional cap that exists this year.

They can due to make an informed decision on which investment option or options is most appropriate for you. They can provide you with advice on whether or not you have adequate insurance or whether or not there might be a need to request more depending on your circumstances. And they also can give you some information on the merits of considering a transition to retirement.

And you can reach those people via the same 1300 number that I mentioned earlier. there are also many people that have a more complicated ah situation. They've got many things to consider. Husband and wife. Different assets etcetera. So they would most likely need to be referred to a comprehensive financial planner for personalised advice. And they can also assist with contribution limits. You skipped ahead a bit too quick then Jolene. Yeah sorry everyone. It's alright. Debut money for on your retirement. Maximise your Centrelink Entitlements and a lot of those things that I mentioned earlier. Thanks Jolene All of that information can be obtained via the call centre. Ah but if you only during work hours and if you wanted to look at things like your account balance or whatever I would thoroughly recommend that you ah get a pin number so that you can access your own details via the member portal.

Ah all you need to do in the first instance is contact the 1300 number at the call centre and get a temporary pin number so that you can access your account. At that time would then be encouraged to change your password to something that you could remember easily. But periodically and of about 12 months ago we changed the portal and ah people had to contact us again to regain access. Ah but more and more people are actually looking up their own information for themselves and they can do it at a time that suits them. The Member of Portal's a great way to keep on top of your super Ah Provide you with the ability to make contributions.

Uh you can find out your account balance. You can change your investment options through the member portal. Uh you can work out how much insurance you have You can nominate a non-binding beneficiary. You can't do a binding beneficiary via the website because it's a legally binding document so it has to be signed and witnessed. Ah and you can't do that ah online. And there's many other things so and they probably change from time to time.

So it's probably worthwhile jumping into your member portal at least once a year just to see if there's any new ah features or functions ah that might provide you with the information you're after. So what to do right now? Certainly if you haven't already got access, get a pin number so that you can access your member portal. Uh speak to a regional manager and they can provide you with information and also referrals to the limited advice and or comprehensive advice if that's needed Or ultimately, talk to a member of our financial advice team. Our contact numbers are one three hundred six five eight double seven six. Our website is Catholic Super. com. AU.

And we have an email contact fund office at Catholic Super. com. AU. is there are any questions I would certainly encourage you to put them through to the chat line? Uh and we will answer those at our first available opportunity. Uh that may not be until tomorrow or coming days but we'll endeavour to get a response back to you as soon as we possibly can. We haven't had any questions come through during the seminar. So if there's something that you'd like to ask us before we let you go for the evening. you can open up the question and answer or the chat box as well and we'll try and get those answers to you straight away. Perfect So we'll leave the questions only for just a while longer to see if anyone pops anything in. But we want to say thank you for taking the time this evening. Uh because we do understand after a full day at work sometimes. It's not the most popular choice so thank you very much for joining us.

Uh if you do have any questions you are free to leave at this time. Thank you Jolene and thank you for your assistance as well Justin. I'll close the webinar now. Yeah no questions have come through. Thank you, Justin. Thank you, Justin. Oh I've just got one coming through now. Yep. Ah excellent. Okay so a question that has come through is, can we nominate our own investors? Okay, you can choose from our investment menu, but those are the choices that you can make. So if there is a particular company or a particular fund manager that somebody was wanting to choose, no, but you can choose from those investment venues of where you would like it to be invested. Thanks Jolene and Ray. I'll close the webinar off. Now, any other questions that come through, the local RN will contact the members in the morning.

Alright. Thank you very much. Thank you very much. Thank you, .

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Retirement Planning Webinar – 2 May 2022 | Australian Catholic Superannuation

Good evening everyone and welcome to Australian Catholic Superannuation and Retirement Funds ah Retirement Planning Session on this the second of May two thousand and twenty-two. Um I presume that we've got people from all over the country. Um my name is Ray Smith. I'm the regional manager in WA. Uh I'm joined by Jolene Stockwell. Ah who's a financial planner based also in WA. And the moderator is Mr. Justin Colley ah based in our Sydney office. The slide please Jolene.

Here we go. First of all, I'd like to acknowledgement of country. I'd like to acknowledge the traditional custodians of the land on which I work and live and recognise their continuing connection to land, water, and community. I pay respects to elders past, present and emerging. I should mention that if anyone wants to ask any questions, they should use the chat facility. Um and we will deal with those either as we go or at the end of the session. Um Um and you can just log those on with us. Um because we're a financial product of course we have to give a disclaimer. Any of the advice contained in this presentation is of a general nature. And it's not taken into account your personal objectives. Financial situation or needs. Prior to acting on any of the information from this presentation you need to take into account your own financial circumstances. Consider the product's disclosure statement and target market termination for any product that you are considering and seek independent financial advice if you're unsure of what to take.

Past performance is not a guaranteed reliable indicator of past perform of future performance. One of the things that we're going to talk about this evening is retirement goals. Uh different people have different desires. Uh some people want to travel and even that can take different forms. Um some people want to spend a lot of family time. I can tell you my wife and I in the past have done several cruises and at some stage we'll probably want to get back into it. Um from an entertainment point of view or from a a from a travelling in a a domestic level. You can either go anything from camping to to glamping. Ah you might just be content doing your gardening or you might want to go to theatres and shows and things like that. But depending what you want to do will totally depend on whether or not you've got sufficient money saved to be able to do that.

And so part of this presentation is trying to provide you with information that will put you in a position where you're best served to be able to do all the things that you want to do. So on that note it's very important that you know how much money you've got in your super. Uh you should be making sure that your employer is making their contributions on time and they're up to date. Uh read an article in today's paper that they're going to chase up on a lot of employers in the building and construction industry because they're well behind. Um you want to work out What you might want to do ah and whether you want to add more to your balance and we're going to talk later on in the presentation about how you can do that ah and what limits there are as to how much you can put in You want to make sure you know how much super you are going to need ah when you get to retirement and from that point of view ah you can get assistance from our financial planning team.

Ah and it's all about meeting your desired goals. Jolly. First of all, it's worthwhile considering how much money you might need and there's in Australia, there's a one of the pillars toward retirement is the old age pension. Uh if you're a single person and you're eligible for a full old age pension, that amounts to twenty-five thousand six hundred and seventy per annum And a couple doesn't get twice that because they believe that many of the expenses are shared. So a couple combined get thirty-eight thousand It is the Australian Superannuation Funds Association have decided that for a modest income a single person needs a roundabout twenty-nine thousand 139 per annum. And a couple will need 41, 929 combined. So if you're quite content with a modest retirement then it's not inconceivable that you may be able to do that ah on just the old age pension assuming of course that you qualify for the full entitlement.

But many us have a desire to live a little bit better than a modest retirement so we want to be a little bit more comfortable. So again as for us determined that on average a single person who wants to live a comfortable retirement needs around about forty-six thousand dollars and that a couple needs somewhere closer to sixty-five. So as you can see there's a little bit of difference between what the old age pension will provide and what you need to live a comfortable lifestyle. So it's pretty important to determine or to consider putting a little bit extra into your super and making sure that you've got sufficient to live the lifestyle to which you want to become accustomed. Um this slide actually gives you some indication of what the differences between a modest and a comfortable retirement are And at simple things like some people might be happy with takeaway food from McDonald's or from Hungry Jacks but some people want to go out more regularly to restaurants and and have fine dining.

So those sorts of differences ah are what determines whether or not you have a comfortable lifestyle or a modest one. My suggestion would be if you fund toward a comfortable lifestyle and you're happy with a modest one well then you've just your money's going to last much longer. And that slide also gives you a bit of a comparison with how that relates to the old age pension which is ah arguably another step lower. Those figures provided by Asfa ah as well which is the same association. we are Australian Catholic Super take a very holistic view to your financial situation because not everyone is adamant that all of their savings need to be in superannuation. Um there are times when you need immediate access to money so it's a it's handy to have some accessible money and that's in the form of cash in your bank accounts.

Uh these days in Australia a lot of people actually own shares themselves or have purchased shares. Now some of that might have started back in the seventies and 80s when AMP demutualised and and that gave the average Australian access to owning shares and I think it's become more popular. property's always been a a very popular investment vehicle here in Australia. Um and a lot of people have got investment properties and things like that. Um obviously the cost and the value of the family home is an an important consideration. Uh particularly from the pension point of view because your family home is not considered an asset but we'll talk about that later. And obviously our area of expertise, superannuation and some of the advantages from a tax point of view and some of the ah reasons that supers are very effective savings vehicle for people toward their retirement years. Thank you Jolene. Another important consideration is the tax benefit of using superannuation. Uh contributions into super by your employer or contributions that you make yourself are taxed at 15percent on the way in and any investment earnings that are generated in the superannuation phase are taxed at 15% or up to 15percent.

That also applies in transition to retirement if you're accessing your via a pension but you're still working You still pay the 15% tax on the investment earnings. But as soon as you move to an account based pension and that's determined by either turning 65 years of age or if you've had a cessation of employment after age 60 then money that's in ah an account based pension at that stage is not taxed on the investment earnings.

So there's some benefit to have so because if you've got money in the bank and you're generating interest and that's obviously not particularly applicable at the moment but in times when you are that income needs to be declared in your tax return so you pay tax on it at the marginal tax rate so in the allocated pension the fact that you don't pay any tax on the earnings is very beneficial. funding toward your retirement. Uh there's a couple of considerations.

Uh these are the ages that people can presently get access to their superannuation. And for people who are currently aged 58 or 59 what they access from their superannuation or a pension phase is taxable. Once they turn 60 and up to age 65 it's not taxed. Uh but they still need to meet a condition of release to be able to access to it. And after age sixty-5 ah the proceeds are still not taxed. But whether if you're whether you're working or not ah you're you've got unlimited access to your money because you've met a condition of release as a consequence of turning sixty-five. One of the ways that you can get a little bit of money into superannuation is to salary sacrifice And the reason why people might want to consider that is that it's quite often applies a preferential tax treatment to your contributions into super.

We have a tiered tax structure in this country. And the more money you earn the more tax you pay. And as you can see with the various tax brackets. Um example from 45, 000 to $120, 000 your marginal tax rate is thirty-two point five percent. If you earn between 120 and one80000 and this is taxable income not just earnings so it might apply to other income that you generate. It's 37%. And if you're taxable gross income is an excess of 1 000. First congratulations. But secondly your marginal rate is a 45% figure. It's approaching half of what you earn beyond $180, 000 goes in tax. superannuation guarantee has also been elevating of late. Um many of you would have realised on the first of July last year that the percentage went from nine and a half percent to 10%. Uh on the first of July this year it's going to go to ten and a half percent.

The first of July next year. It's going to go to eleven and so on and so forth until it meets its cap of 12% on the first of July 2025. I mentioned that it might be worthwhile considering making salary sacrifice contributions. So we've done up a bit of an example here. This is a person on a salary of $100000 dollars. So their fortnightly pay is three thousand eight hundred and forty-six dollars. If they don't make any additional contributions to super the taxable portion of their income is the three thousand eight hundred and forty-six.

And their take home pay after the deduction of PAYE tax is two thousand eight and $eightyfour. If that same person elected to contribute 5 percent of their earnings into superannuation as a pre-tax salary sacrifice contribution. Thereby an amount of a 92 dollars. It reduces their taxable income by that same figure. So the taxable portion is now only $3653. take home pay has similarly reduced but as a consequence of the tax difference it's only down to two thousand 757, which is only a reduction of what they would have taken home of 1 twenty-seven but at the same time they're contributing $192 into their superannuation.

That gets taxed at 15% of course as a salary sacrifice contribution provided hasn't exceeded the cap. Ah but over a period of some 10 years that is a sizable contribution to their super and based on these this particular example it's potentially a saving of seventeen thousand, 160 over a 10 year period. What I have in facted in of course is that if you're ah income is over 250000 that eh it's slightly different and it's somewhat compromised. There's two different ways you can make contributions into super.

The most obvious is the concessional contribution and that includes your employer contributions such as salaries sorry superannuation guarantee ah your employer may make additional contributions to your super you may choose to make salary sacrifice contributions as well and for those people an example of which is a self-employed person they might make personal deductible contributions ah and they're all considered to be concessional contributions and cap for that as of this financial year is twenty-seven thousand five hundred dollars and anything up to the twenty-seven thousand five hundred that is a concessional contribution going into the super is taxed at 15% on entry. On top of that, you can make additional contributions called non-concessional contributions and the limits for those as of the first of July 2021 for a person under 67 years of age.

They were able to contribute one hundred ten thousand dollars per annum and you could roll forward two additional years worth of contribution. So, over in one lump sum contribution, you could pay in $330, 000 but then that constitutes the payments for three consecutive years. 67 and 74, you couldn't bring the role forward option into play. You were limited to $110, 000 and currently there is a requirement that you have met the work test and the work test is to have done 40 hours of within any 30-day period and you had to meet that each and every financial year to be able to make the contribution but you only had to meet it once in that financial year.

So if you met the work test in July that then permitted you to make the contribution at any stage during that year. Once the new financial year started however you needed to make the work test again in order to be able to be able to make another similar contribution. And to 75 years of age there is no further opportunity to contribute into superannuation. We're going to talk in a little while about some changes that have been made but they're the limits that currently exist and they're the conditions that people have to meet to be able to make contributions. There are other ways to contribute to superannuation.

So if you are currently over 65 years of age and you sell the family home which you've owned for more than 10 years, you have the capacity to make a downsizer contribution of up to three hundred thousand dollars each. you can make contributions on behalf of your spouse and your spouse can make contributions on behalf of you and in some circumstances there may be an eligibility for a rebate. And one of the other ways to contribute to your Australian Catholic superannuation is to consider consolidating other superannuation funds.

Um many people in Australia have multiple funds as a consequence of having a multiple multiple employments over their work life. And for some reason some people just don't get to the point of consolidating all all of their superannuation funds. The reality is having multiple funds means that you're paying multiple fees and it's quite possible that you're also paying multiple insurance costs as well.

When can you access your access your superannuation? Cuz we've talked a lot about putting money in but obviously the purpose of that is so that at some stage you can get access to it. So at the moment if you were born before or sorry if you were born between the 1st of July nineteen sixty-two and the 30th of June 1963 your preservation age is 58 and in order to be able to access your superannuation you have to have reached your preservation age and met a condition of release. 58 and fifty-9 year olds that condition of releases to have genuinely retired with no intention of working again in the future. If you were born after the 30th of June 1964 your preservation age is 60 and anyone born after that their preservation age continues to be 60 as well.

And in order to be able to access your superannuation you have to have ceased an employment arrangement after having had your sixtieth birthday We haven't put age 65 or above on the slide because irrespective of your circumstances ah you've got full access to your superannuation after your sixty-fifth birthday. So how can you access your super? Ah historically ah and I'm going back many many years. Ah when you got to retirement age you basically withdrew your money out of your super. You put it in the bank or did whatever you needed to do with it. Um and so it was being accessed as a lump sum and that doesn't mean that you can't do it these days. But the reality is more and more people are getting considerable amounts of money in their super by the time they reach retirement. In many case it's likely to be their second biggest investment after the family home and in some cases it might even be more than the value of the family home. So more and more people are deciding to move it into an income stream and pay themselves a pension from their ah self-created superannuation fund.

It's worthwhile mentioning that you can only create an allocated pension with money and super. So quite often a lot of people as they're approaching retirement and are about to set up an allocated pension. Use that opportunity to some extra money into their super in the form of a lump sum contribution just before they retire. At this point I think I will pass over to Jolene and she'll take over. from me. Good evening everybody. Thank you for joining us. So the first pension that we're going to have a look at is the transition to retirement. So this pension is where you've hit your preservation age. So if you're currently 58 or moving to 59 and for the rest of it's form aged sixty. But you're still working. Okay. So the key thing here is you're under 65 and you're still working. You're more than likely to have a transition to retirement pension. There are some limitations. It starts to allow you to access your super but there's rules around how much and how you can do that.

So if you start a transitioner to retirement pension and you are under age 60 you will still pay some tax on the income that you draw down. But if you are over 60 then that income now becomes tax free. When you withdraw it. The investment earnings though are exactly the same as super. So whatever earnings that your account being still invested is making for you is taxed up to a maximum of fifteen. Now the accounts that you have one of the rules is that you must take a minimum payment.

And that minimum payment is legislated determined by your age. So, if you're under sixty-five, it's 4%. Now, for the last two years and the government has just announced for next financial year, they're going to continue it as well. Is that that minimum payment that everyone must make is now reduced by 50%. So, if somebody wanted and account either a transition or a full pension. The minimum amount they only need to take is 2% if you're under 65 or 2.

5% if you're 65 or over. Now above that transition to retirement allows you to take a maximum of 10percent. Okay? And that payment is per financial year. And it's 10% of your starting balance if you started midway through the year. Or of your balance that you had in that account on one July. So remember key thing is, after age sixty, it's a lot more friendly because you're not paying tax on the with schools. But if you are 58 or 59 and you have a transition to retirement, you do get a little bit of a rebate but you're still going to pay a little bit of tax on that as well. The allocated pension, this is when you've hit a condition of release. So you've either turned 65 or if you're younger than sixty-five, it means you've hit a retirement point. So you may have changed employers, or you retired and you're not working 10 or more hours in any week.

The rules change here. They open up a bit more. So the first one is the attacks on the investment earnings goes from a maximum of 15 down to zero. The minimum payment rules still apply. So those reduction from 4% to 2%. They all still reply. But you have full access. So you've unlocked your Subaru. So if you wanted to take out ad hoc sums or if you wanted to take out income more than 10% of your balance per financial Year you've got that access. Because an allocated pension means you have unlocked your super. So you could take all of it out if you so wished. Same rules apply. If you have an allocated pension and you are 58 or 59 there is still some tax payable. But if you're over age 60 and you've got an allocated pension or if it is tax free and you can take out ad hoclump sums when the unexpected happens or when a big event family, weddings, travel, any of those things occur. within the pension stage, a Stern Catholic has two products. So, the first one is Retire Choice and it is all about the investment choice.

So, from the investment menu that you have with Australian Catholic, you can mix and match and you can choose different investments. So, anything from 100% cash to 1 00 percent shares and mixed options in between where instead of you picking and choosing how much you want in cash or how much you want in Australian shares or property, the choice of how much in each of those categories has decided that you choose overall the type of risk you have. So retired choice is all about that investment choice. Choose where you're invested and you can choose which investment you use to pull down your regular payments. There's quite a few to choose from. You can mix and match between these two columns. So the diversified options are the mixed options that are premixed. So shares is a mix of Australian and international. Growth is a mix that has more shares than property. And then it moves down.

So you go from growth to balanced conservative balance. Conservative. Capital stable. Socially responsible is similar to risk around the balanced option so it's mid to high range but it's looking at socially responsible investing which means it's focusing on companies that take a stronger stance. You can mix and match those with your single asset options as well. So this is if you have particular fondness for a category that you want slightly more investment in. You can choose that as well. Retire Smart is a pre-designed product. So it takes away that choice of where you're putting your money to be invested but also where you're drawing the money out. So it looks at trying to generate income over the long term.

And making it last as long as possible. So this is how this one works. You take your money and it's invested between growth and cash. And as the years go on The cash distributions move to cash so that you keep taking your regular payment along the way. But the growth assets stay in the background churning away and then move with the markets and sometimes you'll have more money being paid out than others when the years are really good and they flow back into there as well. Oops. Sorry I thought there was another slide in between that. With that particular mix you don't choose whether you're taking down from the growth assets or from the cash. It's automatically set up. So that all you're doing is saying I want the Retire Smart product. The growth assets are a little bit higher. So for some of our more cautious or conservative investors have a look at Retire Smart because it may not fit what you're looking four.

Okay so it takes away your choice. So when you do decide you want to use it make sure you've had a look at it so you know that it suits you and what you're expecting. Longevity is the big question we get. And people say well do I have enough? Well do you have enough? How much are you spending? How long does it need to last? Because the real question that people are asking when can I retire? It's not. When you can it's how much do you need to retire when you want? Because some people find out that if they do end up looking like they have enough they might say well you know what? I can choose to retire when I want. So, I'm enjoying working. I might do it for a little bit longer. or they might turn around and say, well, you know what? Now that I can retire, I am out of here.

So, the big questions about longevity. When we're doing financial planning, there's some concrete benefits, you know, can we help you save more for retirement? But there's also some other benefits that come from having a bit of a roadmap and a path forward. And looking at okay well what happens if we've got some big events. We've just been through Covid. We had GFC previously. But also will it last? Because we're all living a lot longer. So we've got a bit of an example. For everybody. So this is looking at the comfortable lifestyle. Looking at a couple. They're sixty-five. But their retirement age pension age is a little bit higher than 65, but they don't want to wait until their age pensionate. They want to stop earlier. And they've got a little bit of money each. 300000. So in total they have 600, 000 available to them. They own their own home. They don't have any debt. So longevity wise, how long will their money last? In conjunction with the age pension, it can last them through to their nineties.

And that's because they're using a combination of not only their own savings but the aid pension as well. So that can provide a base for people. Now, if people want to more or if they want to retire earlier, then they're going to need more money saved to start with. And this where the income comes from. So this couple retired a little bit early. So in the first year the purple is all of their superannuation. It's all what they're using. And then the age pension starts to kick in. They've still got a bit of assets behind them. So they're not getting the full age pension from the start. But they eventually do. And it pushes out their own savings. So their own savings can last longer as well. age pension eligibility? Are you age pension age? So it's steadily being increasing to age sixty-seven.

So a lot of people say right I'll retire when I'm sixty-seven. You can still access your super from age sixty-five. That hasn't changed. Are you an Australian resident? And what assets and income do you have? So Centre will look at you both. They'll look at both your assets. Both your income together and they'll say well whichever one gives you the smaller amount that's the HP that you're going to get. So how much are you going to get? This is your ages. So for anyone who is before 31st December 1956 then you don't have to wait until sixty-seven. Anyone after one January we've gotta wait just a little bit longer. These are the testing rates. So these were updated in March. So if you are single and you own your own home then the purple range that we're looking at. This is the full age pension. Blue you're eligible for a part age pension and the closer you get to the orange line the smaller that gets until it cuts out completely.

The main thing here to take note of is that if you don't own your own home you're allowed to have more assets behind you because you're going to need it. Cos if you don't own your own home you're going to be renting and when you're renting you can potentially be moving depending on the rental market. So this has an impact and we do need it a little bit more of an estate behind you. Same rates for couples as a homeowner. You have less before the age pension cuts out as a non-homeowner.

You have more because you'll need more to support yourself with that. But as you can see as a couple, to receive part of the gauge pension, there's still a rather large allowance there. So, that allows people to even if they're only risk feeding a very small age pension to start accessing the benefits that come withholding the age pension card as well. The income test. So we see a lot of singles and a lot of couples where people are transitioning into work. So they might start cutting back theirs especially among the teachers. Where they're looking at potentially job sharing or potentially moving to relief work. And a couple sometimes we see one person stopping work before the other. So what that means is you don't have to be a fully retired and earning no income. Before you receive the aged pension.

You're still allowed to be working and earning. It just means that you'll eight part age pension. And those are the limits there. The most that you will receive as a single person. Twenty-five 600. This is equal to the very cautious lifestyle that Ray was talking about earlier. Okay. And even as a couple thirty-eight thousand seven hundred. So if you're single you need more because you're still going to be paying your rates. You're still going to be paying your rent.

Your living cost. Your utilities. And a couple you're still paying those for the split twenty-two of you. Okay? So, there is a little bit extra there for couples but again, it's not double because some of those utilities rents, all of those, they're shared. Okay? But if you go back to those lifestyles that Ray was talking about, thirty-eight, almost 39, 000 for a couple, almost 19 and a half for a single quota.

That's a lot less than that comfortable or even that modest lifestyle. So, it really is At the and and most people are trying to put themselves a little bit ahead of that because it just makes it a little bit more flexible to deal with things that may occur later in life. If you can't get the age pension enough, you may be eligible for the Commonwealth Seniors Healthcare card which does provide some benefits.

It is not asset tested. Okay. It is income tested. So, it depends on how much money you are earning. So, even if people don't the age pension card because they've got a bit too much of their own savings. If they're not working or working very little they may still be able to access some of the benefits. and the state government also has a couple of benefits as well. Now fully aware that the state government there is a lot state to state and it's not always a lot of difference but it is worth checking out that you're able to access a seniors card from your state government earlier than what you normally would be aged pension card in the Commonwealth Seniors Healthcare card.

So have a look. See what benefits are available and when they kick in for yourself so that you can try and use them as early as possible. And as Roy mentioned earlier, we've got some changes coming up in July. They were proposed a lot of them in last year's May budget and they've just become legislated recently. So, they're all starting to kick in from July. Rate, did you want to have a look at the upcoming changes? I'll take over. Thank you. Thank you, Jonathan. Yes, the government because of Covid have decided that the 50% reduction on the minimum draw down that had existed for the last two years because of COVID would be extended for another year. So, using Jolene's earlier example. A person under 65 under the age based structure has to take 4%. But with the 50% reduction obviously that's reduced to 2%. So that's the minimum.

So you don't have to take that reduction but it's an opportunity for people to withdraw or draw down less if in fact they don't need it for whatever reason. The government have also said that where historically you had to earn in excess of four hundred fifty dollars in a calendar month to warrant a superannuation, guarantee, contribution being made for you. The government have decided that all that does is disadvantage very low income earners. So what they've said is they've eliminated the four hundred and fifty dollar threshold. So after the first of July this year, if you earn any money from from gainful employment, the employer will be required to make a contribution. And again, as of the first of July this year, that is going to increase the percentage. So it was 10% of your gross ordinary time earnings. And as of the first of July 2022 that's increasing to 10 and a half percent.

So everyone will be getting a little bit more into their super ah as a consequence of that increase. Up till now and it's still currently exists until the first of July but in order to be able to make contributions of a non-concessional type to your superannuation if you are aged between 6-seven and seventy-four. I mentioned earlier that you had to meet the work test. The work test is being abolished as of the 1st of July twenty twenty-two. So if a person between 67 and 74 wants to make a non-concessional contribution to their super they will be able to do so. The limits will be $1 00, 000 a year or three 30, 000 dollars if you contribute three years worth of contributions in one. to bring forward rule is being included up until the age of 75 and as we mentioned earlier after seventyfive there are no contributions permissible.

We mentioned earlier that if you're over 65 and sold the family home that you'd owned for more than 10 years that you could put up to $300, 000 into superannuation That minimum age has been reduced down to sixty. So those people between 60 and 65 who want to make a contribution to their super have the capacity to do so. And the first home buyers can now save up to $50, 000. Ah and any earnings to use as a home deposit through the first home buyer saver scheme. Some of the other areas where our financial planners can be useful is information with regard to creating a will Uh things like power of attorney and enduring power of attorney. Uh and even whilst you're in superannuation or the pension phase. A very important issue in relation to estate planning is to nominate a beneficiary within your superannuation fund.

There's a couple of different options available. There's a a binding nomination and as the name implies that binds the trustees to pay it the way you've indic there is a non-binding nomination as well which is a guide to the trustees. Previously it used to be referred to as a preferred beneficiary. Uh because that's who you would prefer the money to go to. And if that person is an eligible recipient then I'm reasonably confident that in a great many cases the trustees would pay it to that person. But one of the other advantages of having a binding nomination is that because the trustees are bound to pay it the way you've said they don't have to do research to determine if there is anyone else out there who may be eligible to receive your proceeds.

And so my experience is that people with binding nominations they're paid out a little bit quicker than those with non-binding because with the non-binding the trustees have to be sure that there isn't anyone else ah that's able ah to receive any approach your proceeds on the in the event of your death. Our financ ial planners are also trained and well versed in the needs of aged care. Whether that's for yourself or whether you're planning for others. A lot of people baby boomers are all reaching retirement now but a great many of them have got parents who are entering aged care facilities And it is a mine filled of decisions and and choices. Uh so that's where our financial planning team can be of immense use. Ah on that very subject some of the things that our financial planners can assist you with is saving your money on your to your retirement, helping you to maximise your centrelink entitlements to give you some indication of how long your money will last when you're in retirement. Um looking at your goals short, medium and long term and establishing whether or not your current superannuation accumulation is adequate ah for those that you've got in mind.

I mentioned estate planning. Uh advice on other non superannuation superannuation investments and strategies. And also advising on your partner or family member because couples come to the Financial Planner s together because what you do will often affect your spouse and vice versa. There are other ways that we can help as well though. Uh our goal is make superannuation journey as simple as possible And so regional managers such as myself and the call centre team can assist you with general superannuation and pension ah questions. They can provide you with forms or they can assist you to complete forms when necessary. They can provide you with ah account information.

It has to be ah basic or factual but not basic. That's not the right word. Ah general or ah factual information. Ah and you if you want speak to a regional manager and you don't already have their contact details you can just call us on the fund on thirteen hundred six five eight double seven six and if the call centre team can't help you with your enquiries or if there's a need ah to be referred to a ah regional manager or a financial planner they can provide you with those appropriate referrals. There are some people within our fund though that would like some limited advice on specific topics that don't necessarily need to see a comprehensive financial planner for that information. And a couple of examples of that are how much you can actually contribute ah so that they take into account how much your employer SG is encroaching into the $27, 500 concessional cap that exists this year.

They can due to make an informed decision on which investment option or options is most appropriate for you. They can provide you with advice on whether or not you have adequate insurance or whether or not there might be a need to request more depending on your circumstances. And they also can give you some information on the merits of considering a transition to retirement. And you can reach those people via the same 1300 number that I mentioned earlier. there are also many people that have a more complicated ah situation. They've got many things to consider. Husband and wife. Different assets etcetera. So they would most likely need to be referred to a comprehensive financial planner for personalised advice. And they can also assist with contribution limits. You skipped ahead a bit too quick then Jolene. Yeah sorry everyone. It's alright. Debut money for on your retirement. Maximise your Centrelink Entitlements and a lot of those things that I mentioned earlier.

Thanks Jolene All of that information can be obtained via the call centre. Ah but if you only during work hours and if you wanted to look at things like your account balance or whatever I would thoroughly recommend that you ah get a pin number so that you can access your own details via the member portal. Ah all you need to do in the first instance is contact the 1300 number at the call centre and get a temporary pin number so that you can access your account.

At that time would then be encouraged to change your password to something that you could remember easily. But periodically and of about 12 months ago we changed the portal and ah people had to contact us again to regain access. Ah but more and more people are actually looking up their own information for themselves and they can do it at a time that suits them. The Member of Portal's a great way to keep on top of your super Ah Provide you with the ability to make contributions. Uh you can find out your account balance. You can change your investment options through the member portal. Uh you can work out how much insurance you have You can nominate a non-binding beneficiary. You can't do a binding beneficiary via the website because it's a legally binding document so it has to be signed and witnessed. Ah and you can't do that ah online. And there's many other things so and they probably change from time to time. So it's probably worthwhile jumping into your member portal at least once a year just to see if there's any new ah features or functions ah that might provide you with the information you're after.

So what to do right now? Certainly if you haven't already got access, get a pin number so that you can access your member portal. Uh speak to a regional manager and they can provide you with information and also referrals to the limited advice and or comprehensive advice if that's needed Or ultimately, talk to a member of our financial advice team. Our contact numbers are one three hundred six five eight double seven six. Our website is Catholic Super.

Com. AU. And we have an email contact fund office at Catholic Super. com. AU. is there are any questions I would certainly encourage you to put them through to the chat line? Uh and we will answer those at our first available opportunity. Uh that may not be until tomorrow or coming days but we'll endeavour to get a response back to you as soon as we possibly can. We haven't had any questions come through during the seminar. So if there's something that you'd like to ask us before we let you go for the evening.

You can open up the question and answer or the chat box as well and we'll try and get those answers to you straight away. Perfect So we'll leave the questions only for just a while longer to see if anyone pops anything in. But we want to say thank you for taking the time this evening. Uh because we do understand after a full day at work sometimes. It's not the most popular choice so thank you very much for joining us. Uh if you do have any questions you are free to leave at this time. Thank you Jolene and thank you for your assistance as well Justin. I'll close the webinar now. Yeah no questions have come through. Thank you, Justin. Thank you, Justin.

Oh I've just got one coming through now. Yep. Ah excellent. Okay so a question that has come through is, can we nominate our own investors? Okay, you can choose from our investment menu, but those are the choices that you can make. So if there is a particular company or a particular fund manager that somebody was wanting to choose, no, but you can choose from those investment venues of where you would like it to be invested. Thanks Jolene and Ray. I'll close the webinar off. Now, any other questions that come through, the local RN will contact the members in the morning. Alright. Thank you very much.

Thank you very much. Thank you, .

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Critical Retirement Planning Ages: 55, 62, 70, & More

When you're planning for retirement, your age is important, and that's because as you reach certain milestones, you may qualify for certain benefits, or you might need to take certain actions to avoid penalties. So that's what we're going to talk about in the next couple of minutes here. We'll go over these critical retirement dates so that you can get them in your planner or at least know what to expect as you move toward retirement. Two things happen at age 50. The first is you get to make catch up contributions. So if you are maximizing your contributions to your retirement accounts like a 401K or an IRA, you get the ability to put in even more money each year, which helps you boost your retirement savings as you near the end of your career. There's a separate benefit that might apply to certain public safety workers, so for example, if you're a firefighter employed by the federal government, you might have the opportunity to take withdrawals from retirement accounts as early as age 50 without any early withdrawal penalty from the IRS.

So make sure that you triple check the requirements, and of course, the longer you can keep your money saved, that might help you make it last longer. At age 55, the ability to take those early distributions from a workplace retirement plan. Opens up, and to meet that criteria, you have to terminate your job at age 55 or later and take the funds out of that job's retirement plan, like the 401k, for example. Again, this is something that you want to check carefully with your tax advisor, and this is probably a good time to give you a friendly reminder that this is just one short video, and it's not individualized advice. You really do need to speak with an expert who is familiar with your situation, and they can help you make sure that you avoid any problems and potentially identify some opportunities for you. By the way, if you check the description below, you can look at some free retirement planning resources that I've put together, and I think you'll find useful. At age 59 and a half, you have the ability to take withdrawals from retirement accounts without that early withdrawal penalty, so it doesn't just have to be a workplace account after you terminate employment, it can be your IRA, your 401K, deferred annuities, and other types of accounts.

So you get a lot of flexibility once you reach age 59 and a half. Age 62 is the time when most people can start taking Social Security benefits, and that's what's called Early claiming, and if you do that, you get a reduced Social Security benefit, so you get less each month. This can be a big deal, so it can be helpful to get that income early, but you get a smaller monthly income amount, for example, if your full retirement age is 66 and a half, and your benefit is $1,000, or for every $1,000 of benefit, you're going to see a reduction of 27.5%, or to put that in dollar terms, you would get $725 each month instead of $1,000 each month, and that reduction lasts for the rest of your life and it could impact a spouse if they take over your benefit as a survivor, so you want to think carefully before you claim early, sometimes it makes sense, but you really want to do it mindfully.

Now to age 63, so your Medicare premiums are based on your income from two years back, so when you're 63 years old, you're within two years of 65, which is when you typically begin Medicare. That means if you have any way to control your income or if you're making Roth conversions to take some income intentionally, for example, at age 63, you want to get extra careful about how much income you're taking because you might bump up those Medicare premiums, it might make sense for you to do that, but you want to know what you're getting into. And when you reach age 65, that's when it's time to enroll in Medicare, and it's critical to enroll on time, because if you enroll late, you may face a late enrollment penalty that's going to last for the rest of your life, so that can be an unnecessary cost. It's smart to start the process three months before you turn age 65, and that gets you some time to get your ducks in a row. Now, if you are still working and you get healthcare from your employer, it's really important to speak with your employer's benefits department and with the insurance company, just to find out what you need to do, if anything, and to set your expectations for when you might leave that job, you want to triple check this, especially if you're still working and you're covered under your employer's plan.

Most people reach their Social Security full retirement age sometime around 66 to 67, and once you reach for retirement age, that means you don't have a reduction in your benefits and it also means that if you are earning money through work, which isn't exactly retired, but maybe you are still earning income, those earnings would not cause the deduction from your monthly Social Security income, so this is an important milestone for you to reach… If Social Security is a big part of your income. When you delay taking Social Security income after your full retirement age, you get a bigger benefit, so the benefit increases by about 8% per year, it happens monthly, so you don't have to wait for a full calendar year, and then any future increases like cost of living adjustments go off of that higher amount, so it's nice to have a bigger income, and of course, the longer you expect to live, the more helpful that tends to be in many cases.

Although there are other factors at play. And then when you reach age 70, those delayed retirement credits stop building up, so it doesn't make sense to wait any longer to take your benefits. Age 70 and a half is a weird one, because it used to be when you had to start your required minimum distributions or RMDs, but they changed the law, except for they left these qualified charitable distributions or QCDs in there at age 70 and a half. It doesn't make any sense, but that's the way it is.

So if you do want to make those QCDs, you can start doing that even before your RMDs if it makes sense, so please forgive all the acronyms, we will explain all these, but just be aware that you can begin doing those qualified charitable distributions at age 70 and a half, these are distributions that you make directly from a retirement account to the qualifying charity, and when you do it that way, you can exclude that from your income, which can be helpful. Age 72 is when most people these days have to start taking their required minimum distributions or RMDs. This is where the IRS says you cannot leave your money in a retirement account, tax sheltered forever, you have to start taking some distributions and generating a tax liability, so they start out relatively small and build up over time. Technically, you have until April 1st of the year following the year when you turn 72, so that's an option, if you want to wait till then or you can just do it in that same year, it's up to you, but the most important thing to know might be that there is a very steep penalty for missing these required minimum distributions, if you don't take one in a given year, the penalty is 50% of the amount that you were supposed to take…

So if you were supposed to take 10,000, it's a 5,000 penalty. That's a big one. So far, we've talked about government programs and tax rules, but there might be some other programs that you qualify for, maybe a pension from an employer, for example, and those might have totally different numbers that apply to them, so check with your plan administrator, read through the documents and you can get all of those details. Now, I hope you've found this helpful. If you did, please leave a quick thumbs up, thanks for watching, and take care..

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Planning Retirement the RIGHT Way (with Veronica McCain)

so you'll pick me up tonight 
at 7 45. yo well no I got a   few things to take care of first but 
why don't we make a quarter to eight I'm 45. live from Joe's mom's basement it's 
the stacking Benjamin show [Music]   I'm Joe's mom's neighbor Doug and good news 
today is all about getting your way which is   my favorite here to help us work out our goals 
and find happiness we welcome retirement coach   Veronica McCain for our Tick Tock minute we'll 
discuss tips on getting your vocab right to   succeed in the corporate world in our headlines 
why is it that instead of money at the end of the   month the month seems to go too many days for 
our wallet we'll share an explanation from one   popular publication plus we'll throw out the Haven 
Lifeline to Lucky stacking Benjamin's listener Jim   who wants to know what percentage to put into his 
Roth IRA and then I'll share some heartbreaking   trivia and now two guys who like to color way 
Outside the Lines the Philistines it's Joe and oh [Music] and a happy Monday to you stackers nice open 
duck you know given your history I think that   was fantastic we got a great show today fantastic 
show Veronica McCain is here I can't let that go   what do you mean given my history I am Flawless 
day after day show after show let what go I don't   know what we're talking about Veronica giving 
my history great open given my history Veronica   McCain is here today she is a retirement coach 
and uh oh gee we don't get enough time to talk   about just retirement so I'm I'm super happy we 
get to do that sweet I'm gonna retire after this   Marathon recording episodes podcast for the 
last freaking week and a half so you can go   on vacation so like yeah by the time people hear 
this I've had a wonderful vacation in Spain which   meant that uh that yeah we've been talking to 
each other a fair amount lately however we got   a fantastic show today not only Veronica became 
we got a fantastic Tick Tock minute super happy   headline today comes to us from the Wall Street 
Journal the oh gee sorry the Wall Street Journal   The Wall Street Journal are they like the Ohio 
state of newspapers forgot to put the emphasis in   the right place and they get angry those Buckeyes 
no it's the Ohio State I thought it was just oh no   no it's the this is from the personal finance 
section it's written by our friend Veronica   dagger a Veronica writes why it's now easier to 
underestimate your expenses and overspend let's   dive in Veronica writes many people have a gap 
between what they think they spend and what they   actually spend this gaps wide recently is the 
financial and psychological effects of higher   prices further strain people's budgets Elevate 
inflation is rippled through Americans wallets   for more than a year now some have cut back While 
others have increased their spending to keep up   credit card balances were staying relatively flat 
for a while but have jumped higher recently oh   gee you and I let's take it from here I think 
that this is a year where it's crucial to have   your finger on the pulse of what your expenses are 
you know you hear people joke about eggs you hear   people joke about the grocery store of course for 
a while there you saw the gas pump that seems to   have leveled off at least where you and I live but 
I think if you don't have your finger on the pulse   you're just gonna have less money at the end of 
every month well the availability of credit cards   and accumulating that Consumer Debt really makes 
it easy to continue to live the life that you want   to live even if the cost of living has increased 
a little bit because you don't feel the pain of   that right away you know it's like that kind of 
slow death by a thousand paper cuts type of thing   it's like you have a little bit of a balance that 
carries over then you have a little bit more of a   balance that carries over and a little bit more of 
a balance that carries over and so that's a really   good really good signal I think is if you if you 
go month to month and you're not paying off your   Visa bill every single month or if you had been 
and now you're not yeah that's a good trigger to   go like whoa what changed here that'll snowball 
pretty quickly listen to this statistic just to   tell you how many people are not paying off their 
credit cards Veronica writes in the fourth quarter   of 2022 the average household's credit card 
balance was nine thousand nine hundred ninety   dollars up nine percent from a year earlier nine 
percent higher it's a huge big number according   to wallet Hub customer Finance website meanwhile 
the average credit card interest rate of course   rose with spread right yeah uh to record high of 
about 20 percent last week according to bank rate   those are some there's some big downsides for 
not tracking your expenses yeah thinking about   the math on that real quick it's like okay ten 
thousand dollars at twenty percent you're spending   150 100 you know 200 a month of Interest that's 
not going to pay that off if you think okay well   I make 80 grand after taxes bringing home you 
know 60 after taxes and health insurance and   401ks and all that sort of stuff that's a solid 
chunk of your annual budget that's just going to   interest payments that doesn't really accomplish 
anything for you so if you're one of those people   that that balance is increased on I think it's 
really important to figure out how to tighten   I think one way if you have an accountability 
partner a spouse a friend that you're working with   I really think this can be way easier than people 
think that it is Cheryl and I just have a weekly   meeting we meet for 20 minutes it's over wine or 
over pancakes depending on what time of day it is   it's not complicated we just look through it OG 
and I think it can be that simple it doesn't have   to be you know you're using what you know I love 
the tiller money app I think it's fantastic how it   takes a spreadsheet and downloads everything every 
day and you've got whatever numbers you want you   can plug those into your spreadsheet and get it so 
you can slice and dice however you want I like the   cube app as well we of course have lots of fans 
who use YNAB as a great budgeting tool but it's   not really it doesn't even have to be that hard 
it just has to be having just a finger on on the   pulse like where where's our money actually going 
you know it might have been you who mentioned it   years ago oh gee it could have been Paula pant but 
but a lot of people feel handcuffed when they feel   like the advice is look at your budget every 
month and decide all the details that you're   spending on and I think that's one of the things 
that intimidates people or just is a huge Downer   against budgets I don't think you have to do it 
forever and ever I honestly think you set up a   budget we use whatever template you want to use 
make your own or use some of the ones that Joe   mentioned and then you check in on it for let's 
say the first six months or eight months however   long it takes you to establish habits for just the 
way you live just the normal everyday stuff and   then once you've sort of curtailed yourself from 
essentially taking out a loan to buy that pair of   pants or that whatever that thing is you think you 
need uh I don't think you need to check in on that   budget that often I think it's I mean honestly 
I'm checking in on mine every maybe six months   to a year I think that I think the big Point here 
Doug with inflation having gone up as quick as it   did the point is to have these early warning trip 
wires that if you're not going to check it that's   fine but you got to have a tripwire that alerts 
you then that stuff is real and it's different   than it was three months ago because to OG's point 
if you don't catch it early this gets Beyond you   I mean but Wells Fargo's PR team finally getting 
getting ahead of the story here and got themselves   in this piece listen to this I like this money 
grows much faster than most people expect because   interest is not interest says Michael learsh head 
of Wells Fargo and companies advice and planning   center it's a great quote a similar concept 
though applies to inflation prices rise and if   inflation remains high prices continue to grow on 
top of already inflated prices leaving people off   guard quote people get constantly surprised that 
their money isn't going as far as they thought it   would and in fact the cost of eating out and going 
for drinks continues to take Dina lion aback even   though the 36 year old married mother of one's 
dining out and ordering in far less than she did   a year ago some prices still give her sticker 
shot she says the difference between cooking at   home about ten dollars for nice pasta and quick 
sauce from canned tomatoes versus Italian takeout   for now 50 bucks is astronomical said Miss line 
who lives in Brooklyn I think those trip wires   are are what you if you're not going to set it up 
Doug well let me ask you this I mean given your   history with money how exactly do you set up your 
own tripwires so we focused all of our spending   on One credit card I have a rough idea every 
month of what that that number should look like   at the end of the month and if it's significantly 
higher I kind of raise an eyebrow and then I start   scrolling through transactions and realize okay 
those are all legit time to cut it back that's my   trip but you know then where to cut well then 
I start to it's usually uh the same thing for   probably 90 percent of Americans Amazon but uh 
Amazon could be anything though I know that's such   a brilliant way for them to disguise what you're 
buying that it just says Amazon yeah because   you're like there's no way I spent forty one 
thousand dollars on Amazon last year yeah you did   like well what did I buy wouldn't you like to know 
right I bought Fruit Loops and a backhoe exactly but yeah then I just dig in a little bit if if 
the number is significantly higher usually when   that has happened it's because of a couple of 
big purchases and I know right where it was and   um I know that that big purchase isn't going 
to happen again the next month it's you that   for me that's usually what it is it's not the 
trickle effect of Amazon it's usually some big   some big Bill I had but uh yeah that's that's my 
tripwire yeah I just know that given your history   that we really need to make sure that um people 
hear the story you are harshing on me today what   is happening what am I doing I don't give up 
your history and what then you you yeah yeah   harsh on my open what is going on I don't I'm just 
saying that given your history there we go again I   think we need we need to make sure that people 
hear the story like it's a it's a great tale   hey uh speaking of great Tales time for a tick 
tock minute this is the part of the show where   we either have some Brilliance from the people at 
Tick Tock or we have hashtag brilliance from those   very same people uh Doug which one do you think 
we got today this one's legit it's solid yeah well   more solid than my backdrop which is just about 
fell over I love it how people are about to see   they're about to see all the canned goods here 
in the basement when your professional backdrop   goes bye-bye I think you're correct doug because 
oh gee today what we're going to talk about is   how to succeed in corporate life how to how to 
figure out the right things to say let's listen   one of the most important skills you'll need 
to learn if you want to be successful in the   corporate world is how to speak like an absolute 
[ __ ] week and a great way to do this is just   to totally ignore the basic principles of 
English grammar so first take a random noun   and then change it into a verb so a word like 
idea becomes ideate then take that new verb and   turn it back into a noun so id8 becomes ideation 
then take that now and change it back into a verb   so ideation becomes ideation Inc finally take the 
new verb and change it into a meaningless seven   word cluster an all hands Blue Sky ideationing 
session then sit back and wait to be promoted right that immediately it's pretty 
funny after your blue sky ideation   session you're you're good that's pretty 
funny brilliant Joe tell them some of   the we've got some of that same kind of 
corporate phraseology here that that just   develops organically just happens we have 
we've come up with our own lexicon here uh   OG we need to talk to you over by the can 
peaches we say that you're getting canned   first time Doug got canned he thought it was a big 
deal oh God I was remember that yeah I was I I had   Joy I mean uh tears in my eyes and when it's nice 
outside so you know we want to leave the basement   we meet up by the clothesline which we call Doug 
getting hung out to dry there it is we didn't need   the bump this is serious work OG we're all trying 
to get promoted here hey coming up is a woman that   I don't think we need to promote a lot because 
when it comes to retirement planning people   take it way too cavalierly oh gee you know this 
better than most people spend more time planning   their family vacations than they do planning their 
retirement which shows why so many people are not   successful at retirement planning well Veronica 
McCain worked a full career and then realized that   as a second career which we may talk about as well 
she was going to become a certified professional   retirement coach and a charter retirement 
planning counselor after 31 years of Public   Service work decided you know what time to do that 
other thing that I've really really wanted to do   so she founded Savvy retirement coach with the 
mission to provide holistic retirement planning   Concepts focused on self health and wealth we're 
going to talk to Veronica here in a second about   doing a better job planning retirement but Doug to 
get there I think you've got some history well I   think of it as trivia you call it history 
tomato well given your history of doing the   trivia I think we should just have the trivia now 
there's some massive punchline coming I can tell   I don't know what it is but okay fine here's 
the trivia Joe hey there's stackers on Joe's   mom's neighbor Duggan did you know that on this 
day in 1956 Heartbreak Hotel by Elvis Presley   became a number one hit the Smash Hit was written 
by the Queen Mother of Nashville Mae Boren Axton   and Tommy Durden Axton played a recording of 
Heartbreak Hotel for Elvis at a disc jockey   convention in Nashville and the rest is history 
so since we're on the topic of hotels I got some   hopefully not heartbreaking Hotel trivia for 
you my question is if you're evaluating hotels   as an investor what is the difference between 
these statistics average daily rate ADR versus   average published rate or APR I'll be back right 
after I asked Joe's mom to celebrate Elvis by   making me a peanut butter and banana sandwich 
while I tee up Heartbreak Hotel on my Walkman Burning Love Joe's mom's neighbor Doug and we are 
commemorating the anniversary of Elvis Presley's   Heartbreak Hotel becoming a number one hit on 
this day in 1956 with some Hotel related trivia   so my question was if you're evaluating hotels as 
an investor what is the difference between these   statistics average daily rate versus average 
published rate in maybe our most thrilling   trivia question yet try to stay awake non-hotel 
investors the average published rate is believe   it or not this is going to be amazing are you 
ready I'm just settle down because I know the   excitement is building it's the amount a hotel 
asks for rooms well the average daily rate are   you ready for this I know you've been waiting 
by your device all day just trying to figure   out what this definition is that is the amount 
they're actually getting paid for the rooms   if you're a hotel investor this is the opposite 
of boring because if those numbers are close   together it means the hotel is in demand and 
if they're far apart you know maybe not so much   maybe I should suggest our writing team retires 
So speaking of retirement Let's help you get there   permanently it's time to learn how to create 
your retirement your way with Veronica McCain and I'm super happy she's here at the card table 
with us Veronica McCain joins us how are you that you're here because we're about to talk if 
this goes according to plan we're about to talk   about all the things that you and I think people 
should talk about during retirement but often kind   of gloss over because they're you know just don't 
get me wrong we're gonna talk about the money too   but it's about more than money but as a way to 
get there Veronica I've always believed that   if you want advice it's helpful to get it from 
somebody who's kind of walked that path right   when I was a financial planner I had been one 
in a long time but when I was the fact that I   worked with 200 families and I'd seen retirement 
over and over and over again should give people a   little bit of comfort that yes you want to do this 
once I've done it a bajillion times but but I had   not at that point ever retired you have actually 
retired tell me about that do you remember the   countdown to your retirement oh yeah definitely 
I mean I remember when I was working you did you   know you do the usual countdown on your calendar 
kind of exiting out the days until it actually   hits and then that when that day comes I think 
you get a overwhelming emotions because then I   realized you know I'm leaving my work and my work 
was not just work for me I actually had you know   work family what did you do by the way I worked 
for the federal government so I was a associate   director over several various departments within 
an agency a very small agency about 300 people but   um because you're a small agency you kind of 
have to sometimes do a lot so oversaw a lot of   different departments yeah so so you have this 
flood of emotions where the emotions about loss   were they about excitement I don't know is it now 
all the above is it purpose yeah I kind of had an   idea sort of what I wanted to do so I kind of knew 
what path I was going to take once every time I   know it's going to go into some type of coaching 
field didn't know exactly what way I was going to   go with it at first I thought maybe more in the 
Executive coaching area but then as I thought   about that more it kind of gave me flashbacks for 
work so then I decided to get into more of the   the retirement because people were asking me so 
many questions about you know what do you do and   what you retire how do you feel your days and that 
kind of thing so um you know as I was approaching   looking into the coaching area I did look at 
retirement coaching and I said oh this will be   an interesting field to pursue because I like to 
motivate people to have people get excited about   their goals and what they want to do in life and 
I like the kind of the financial side as well so   um you know that's why I decided to kind of lean 
more toward the retirement coaching but getting   back to when that final day came yeah I think 
it was when I had the actual retirement you know   sometimes that work to give you a retirement uh 
party and you see everybody and they're like uh   say something say something and then when I got up 
to say something all of a sudden I started feeling   like I was gonna cry yeah I was looking out at 
everybody and I was like wow I'm you know this   is this is really the end um even though I had 
something you know like I said to look forward   to going through I didn't expect that emotion to 
come over me like that but it did and I think a   lot of people experienced that when the final 
day comes of their retirement there is like a   I don't know I mean it's just morbid but there is 
like a death I mean you're it is it is your last   cake right right you've been to see other people's 
cake but all of a sudden you realize this is your   last slice yeah it is that that's exactly what 
it is it's kind of you know that you're gonna   try to keep in contact with the people that 
you work with and try to have some kind of   relationship but it does change it really does 
because you just you know everything usually that   you talk about with people at work is work related 
stuff and over time when you retire that kind of   goes by the wayside with you so do you feel like 
we're too Cavalier about that about that process   about the uh you know the fact that we're going 
to have these emotions we just think oh I'll deal   with it when I get there yeah I think a lot of 
people are just so caught up and I'm going to be   retired I'm going to be tired I can do whatever I 
want it's so exciting or whatever so yeah I think   you don't really feel like that you're going to 
have those type of emotions I think you just feel   like you're going to go to this next chapter 
in your life and it's going to be oh this this   burst of excitement and it is I'm not saying that 
you're not going to have it but I do think there's   also a period of of where you kind of adjust uh 
to you know what you've left behind in your job   and your identity and all that with that and 
then going forward pursuing what what you had   to look forward to in retirement so it's kind 
of a mixed bag those first couple of years you   tell your own story but you also tell stories 
of a few other people in the workbook one is   a woman named Susan Susan seems a little lost 
can you tell our stackers about Susan Susan is   the one who the days and the walls were kind of 
closing in yes yeah yeah she was the one person   in the book that I talk about and the people 
that I talk about the book are actual people   that I coach I just use different names and 
scenarios names change to protect the guilty yeah she was kind of diverse and this is a this 
is a lot like when you're working you're kind of   looking forward to those days that you have off 
where you can kind of do some things that you   want to do but then when you retire and it's every 
day it gets a little daunting if you really don't   have an idea of what you're going to be doing to 
for your days your day-to-day life I think is the   hardest thing that most people struggle with when 
they retire they have some huge aspirations maybe   of traveling or doing that but once they're 
sitting in their house house on a day-to-day   basis and in the you know the walls of you know 
has kind of quiet and not a lot going on you   don't have that routine of going to work anymore 
it's kind of like what do I do on a day-to-day   kind of thing and that's kind of challenging but 
what Veronica separates your workbook from a lot   of the retirement discussions I've seen is that 
you take this day to day and challenge all of us   to think really bigger about our life like I got 
this feeling even in the beginning Pages as you're   telling the story that well let me just quote 
you you wrote a big void needs to be filled in   retirement but it should not be filled just with 
things to keep you busy like this is not just a   March to the Grave this is a whole different 
piece of your life and it shouldn't just be   about rearranging the salt and pepper shaker every 
day or you know figuring out that the dog needs   to go for a walk like you challenge us to think 
a lot bigger about this period exactly it is an   exciting time for you to think bigger about your 
life because it's probably the first time in your   life that you're actually able to do what you want 
to do on your own schedule and hopefully have the   finances to do that so I think it's more than just 
trying to fill your days with just the stuff to do   and I think a lot of times when you first retire 
if you don't really have an idea of what path   you're going to go down once you retire that's 
what you start doing you start trying to just   okay let me do this do this and do that and you're 
not feeling you're still not feeling fulfilled so   I'm hoping in the workbook I give you exercises 
to help you because people struggle with like   what does this mean purpose meaning fulfillment 
or whatever yeah those are I think sometimes big   words that we use but I hopefully going through 
some of the exercises in the book you will be able   to figure that out by going through the exercises 
and then trying to say okay well what do I really   want to look for as far as my next chapter in my 
life of what I want to pursue and what I want to   do more than just these little small things that 
are keeping you busy I get uh coaching from a   group called strategic coach long time stackers 
have heard me talk about them before but we have   we have a workbook similar to yours with these big 
questions about leadership and about coaching but   you do the same thing here with retirement and 
this is not guys this is not a long workbook but   if you're doing this right it may take you months 
to fill this stuff out because I could see myself   Veronica peeling off maybe two pages and really 
because the thought that goes into each page of   this is really the important part well let me give 
everybody some of the tips from the book that you   have early on because you have workbook pieces 
and then you have some tips here's some tips   early on for when you first get to retirement to 
kind of send you on this path while you're filling   out the workbook schedule activities you enjoyed 
during when you took time off from work journal   and reflect on your expectations of yourself as 
a retired person I love that word Expectations by   the way read books and articles listen to podcasts 
and a variety of topics to discover what most   interests you now and volunteer for different 
organizations to discover how you most enjoy   helping people and helping help being out it feels 
to me Veronica like you're challenging people   also to don't be afraid to explore like go go try 
stuff expecting that it might not be a fit exactly   that's exactly right Joe I want people to not be 
kind of Trapped into thinking they have to have   everything planned out to just go out and just do 
things that they find intriguing or they interest   them and then from there they can determine what 
they want to continue to pursue what they don't   want to continue to pursue but don't don't limit 
yourself on what you what you think you should be   doing or how you should be doing it this is a time 
for you to be adventurous and explore at different   Avenues and things that interest you and a lot of 
times that's kind of a hard thing to do for people   because they've lived this kind of structured life 
up to this point with work and all that and to try   to say oh just go out here and do whatever and try 
to figure it out it can be a little intimidating   like whatever what yeah yeah so I'm hoping that 
the exercise in the book gives you clue you know   kind of cute used to okay these are some things 
volunteering doing some other things that you   know she thought about what maybe when you were 
younger and didn't pursue kind of go back to those   times of those thoughts and and try to figure out 
if there's um things that you want to pursue now   so yeah it's it it's funny because I I really 
went through this crisis where I felt like not   just there's a lot of stuff not interest me but 
but I'm like okay I want to get involved in my   community I want to get involved in organization 
but but which ones I don't this could sound very   horrible Veronica but I just didn't I just didn't 
care about any of them and then I realized that it   wasn't about that I need to just go get involved 
and when I found out and ultimately at first it   was the Arthritis Foundation I got involved 
with I found out about juvenile arthritis I   found out about all of these things happening in 
the arthritis Community I got involved in walking   trails around town and I realized how walking 
trails uh not only your Healthy Living but   beautify a city but they're also very inexpensive 
ways for cities to raise property values like I   learned it by exploring exactly what you're saying 
to do in the book exactly that sounds so great Joe   because that's exactly what I'm hoping people 
would do once they start retiring just like you   said you did you just started going out and doing 
things and as you started doing those things you   learned so much and it got your interest even more 
into whatever activities you were pursuing the one   thing that people have to realize when they retire 
you have to be just to be intentional you have to   go out and do it it's not going to come to you and 
a lot of times I think you know when I'm working   uh coaching with clients they're like well I don't 
know I don't know I'm like well you got to go out   and try you can't it's not going to come to you 
you've got to go out there and pursue it and once   you do and when you know you will see oh okay this 
doesn't just me or this doesn't interest me but   you've got to go out there and do it can we talk 
about that what you just said about you kind of   kicking people in the butt and and kicking them 
out the door to go you know like my mom used to   say don't come back inside until that light turns 
on you know we we back when kids went outside   side maybe I'm dating myself there but you end 
almost every chapter of this workbook with who   are going to be your accountability Partners it 
seems to me like accountability partners are a   big piece of this tell me about how you how do you 
find these people Veronica maybe just before you   retire yeah and sometimes say you know who they 
can be they can be trusted friends and and people   that you know I think sometimes there are people 
that are asking you questions about yourself and   are intrigued about you as an individual but you 
do have to find sometimes an accountability person   because in retirement there's nothing pushing 
you to do anything and if you don't sometimes   have somebody that you can hold accountable and 
if you can't find someone within your your network   I would advise you to look for a coach because 
that's because what they can be as well pursue   look um for a retirement coach or a life coach 
or or someone in that field because they can be   your accountability partner but if you're finding 
that you're struggling trying to get stuff done   and you're not really getting out there or you're 
bored and you're restless and you want to not get   some pickup and you're like you definitely need 
to look into getting somebody to be accountable   and help you because I even have coaches that I 
work with and I'm a coach yeah yeah me so it's   just something that just like I said it helps 
you keep you accountable to someone to keep   you motivated to do things I think that kind of 
like you Veronica I just get this feeling that uh   with my coach if I say it out loud to Mary Lou 
it means I gotta go do it like that if somebody   tells you or if you tell your coach then you 
then you have to go do it I want to stick with   this theme of uh friends and family a little bit 
because those might be some of the people you're   bouncing stuff off of but you also say if you're 
having trouble finding your sense of purpose that   friends and family might be a good Outlet yeah 
and that's what I found for me that's why I said I   want you know I knew I wanted to go into coaching 
I wasn't really sure which way I wanted to go and   the reason why I decided to be a retirement coach 
is because friends and stuff are saying you're   good at coaching and talking about this retirement 
stuff or whatever and I'm not like you should   do something with that and that's why I pursue 
becoming a retirement coach but I think oftentimes   friends and family see things within you that you 
don't even see yourself they recognize talents and   things that you have that you're like oh okay 
you're right I do enjoy that you kind of brush   it off and maybe not pay attention to where they 
might be and I think when you're listening to your   friends and family you have a tendency because you 
trust them to listen to their guidance a little   bit maybe more than somebody else that doesn't 
really know you so I say I always lean into   your friends and families to help you if you're 
trying to figure out maybe you know some things   you might want to do they might say well you're 
good at organizing or you're good at accounting   or you're good at this or whatever and they might 
give you some cues to help you figure out where   that next chapter is going to be in your life in 
retirement so definitely look for them for that   I like the fact that you go through a lot of 
this first about about purpose and value and   meaning before you get to the money in chapter 
two because your chapter two then really is   structured around okay now that you know that we 
can focus on spending money where it's important   and saving money where it's not and hopefully I 
have an idea there you start off with some good   tips you talk about traveling a lot of people 
in retirement want to travel uh you say to be   a conscientious traveler what is what does that 
mean yeah everybody always says when they retire   they want to travel and then all of a sudden 
they just start going places and not really   thinking of where they really want to go and why 
they want to go there I kind of had to regroup   because when I first retired I kind of I think 
everybody does that you go through that I just   want to get out and go go go go go go and you're 
just going everywhere but you're spending money   going everywhere and so you want to kind of 
maybe reel that back in it's okay to have that   little brief period of doing that but you want to 
reel that back in and really think about you know   where is it where do I really want to go why do 
I want to go there what do I want to experience   once I get there make sure you're spending your 
travel dollars on things that are value to you   and make yourself more conscious of the type 
of traveling you're doing I know I did a lot   of girlfriend getaway travels you know spy and 
all that and that's great but I really want it   I want to explore the world that's what I really 
want I want bigger trips and so you know you need   to just be conscious of what your goal is as far 
as you're traveling and where you what you want to   see and make sure you're you know you're putting 
your money into that type of travel versus just   doing things yeah yeah what I really like that 
you shine a light on is now that you're retired   you can really lean into off season and one thing 
that's not in your workbook that I love about off   season that Cheryl and I have found because she 
is a somewhat flexible job and I could travel   whenever man off season you get more of the local 
experience because the places aren't full of a   bunch of tourists people are more likely to be 
able to linger and talk to you like off season   is great but to your point you save you save a 
bunch of money there too exactly and I travel   now that's all I do is try to travel off season 
because just like you say as far as you want to   make sure with your dollars that you're spending 
them in a conscientious way as far as when you're   traveling too going off season I feel like those 
retirees the best time for you to travel because   you really get a feel for everything without 
the crowds and like you said the pricing is   better you're able to enjoy it in a different 
way what are some other ways that new retirees   and people that are stackers that maybe are are 
getting close to retirement can think about areas   where they might be able to save money besides 
on discount or off season travel at first I would   just look in your budget overall of what you you 
know you have developed as far as your I think   everybody should be tracking their costs before 
they retire and coming up with a overall budget   um what they think their retirement is going 
to be but some of the things you can look at is   cars you know the insurance and things of that 
nature look at that to see if there's ways you   you can save on that once you retire there's 
also lots of discounts and stuff like we were   talking about off Seasons but also if you kind of 
pursue looking you know if you want to go to Parks   or whatever whatever your um interest might be 
looking for ways you can get discounts on things   of that nature and just be aware of any ways you 
can save money with traveling it's just a lot of   different ways out there too for other things as 
well two big ones I really like that you had uh   if you've got two vehicles you might be able to go 
to one you know think about what you think about   Transportation evaluate your life insurance do 
you need it anymore are you financially solvent   enough where maybe you could get rid of that and 
then a medical one which I really liked was hey   this medical thing is going to get expensive 
stay healthy which also gets you out of the   house I feel like Veronica again you're kicking 
people's butt out of the house I definitely with   the medical and the exercising and now that you've 
got all this time you've done definitely can get   a nice physical routine into your everyday life 
just simple walking I know I take morning walks   every morning and not just for exercise but for 
meditation purposes for me as well but yeah we   all know the medical cost is a big expense when 
you retire and we also know that you get more you   know seditary in your way you're not as active as 
you were where you were working so I do recommend   that you do have a physical fitness routine for 
yourself when you retire to keep yourself healthy   so you can reduce those medical costs because 
a lot of the Medical classes stuff you can   prevent yeah and things that you could be doing to 
prevent you get but you got to start early on your   retirement and start doing things to keep yourself 
healthy when we go to the doctors at a certain   age you're all getting those oh you're close you 
know borderline there's water flush that and stuff   it's time for you to really you know we're at that 
point you can do things within your health to keep   yourself more healthy so yeah yeah definitely I 
look at a hamburger now and my cholesterol goes up   I just look at it I don't know how that medically 
happens but it's crazy that is we all we all know   that feeling with people that own their house 
you have a section of your workbook to go through   Renovations on your house and thinking about 
your housing situation this is the number one   area in our budget our house what are some of 
those key considerations about our housing we   should be thinking about yeah a lot of people 
like especially if they want to stay in their   houses should look in as far as their as I call 
Aging in place in the houses and look how well   their house is going to be able to support them 
once they start aging and look at you know I have   a checklist in there of things that you should 
look at as far as your stairs and your appliances   and just repairs and stuff that you might need 
to do to your house as you start getting older   those kind of costs if you're not prepared for 
them can wreak Haven on your retirement budget   so if your house is where you want to stay then 
you definitely need to look at it like even the   showers grab bars and um stuff yeah steps if 
that's going to work as you get older I know   with my husband he had had accident he couldn't 
go up the steps but it made me start thinking   you know as we age you know we're not able to go 
up the steps how are we going to do it because   we don't have bedroom on our main level so those 
are the things that you need to really think about   if you're going to decide to stay in your house 
so what you need to do and kind of come up with   a plan so it doesn't all hit you at once because 
sometimes it does you know unfortunately it'll be   unexpected like your husband's too I mean there's 
no you know Tuesday everything's fine Wednesday   the game's changed exactly and you need to kind of 
be thinking about that especially like I said if   you plan on stay in your house what your game plan 
is and start trying to figure out how you can get   your house accessible so that as you age it'll 
it'll still suit you yes you talk about moving   and about a lot of people of course think about 
moving when they retire and you also talk about   friendships and I'm glad that you coupled the two 
of those together because one thing I've always   thought and now I know we're here to interview you 
Veronica but I'm going to pontificate for just a   second no problem because I feel like people think 
of moving wait we talked about being too Cavalier   with this whole thing this especially to me is 
an area where people are too Cavalier I'm just   going to move closer to to my kids and what you 
find is that your kids are really busy they got   a bunch of stuff going on you become a full-time 
babysitter but you don't end up interacting with   them in the way that they want and all of 
these close friendships that you developed   over the last 30 40 years I'm a guy who lived for 
a decade in Texarkana I moved away to Detroit for   two years and Veronica we came back and not 
because I have family here in quotes because   all my friends are here I see some of my friends 
as my friends are getting older you know I find   them getting vacation houses that are far away 
and we're we never get to see them anymore and   I feel like this loneliness this isolation that 
we put ourselves into because we think it's great   like we're I feel like we're way too Cavalier 
about that but anyway I will shut up I'm gonna   get off my steps duel what do you think do you do 
you're sad at all Joe that is exactly what people   do they're very Cavalier they have this idea of 
oh I'm gonna live here and it's going to be this   great but they have no special connections there 
yes or I'm gonna go near the grandkids and the   grandkids are getting older the grandkids are 
going to grow up they're not going to be here   forever be little kids they're gonna grow up and 
have their own things or even if they're already   older they you know have their own activities and 
stuff to do so that's why in the in the workbook   I give a checklist you know it just even asked 
them oh yeah we want you close by and I say also   don't let your only connections be your kids your 
grandkids or your kids you know you need to have   other social connections outside of them because 
a lot of people say I'm a little bit closer for   the children and that might not work out so yeah 
it's one of those things that I think everybody   has this idea of how it's going to be yeah this 
grandiose kind of idea so not true so not true   and that's why hopefully when you go through 
the workbook and you look through the checklist   and if you do the exercises that are focused on 
that you'll have a clear perspective of whether   that's a great move for you or not whether it's 
going to work for you and as you retire because   I think it's hard harder once you get there to try 
to move back so oh agree yeah yeah uh you talked   about how I was a retiree now you know you're not 
forced to get up and go to work you don't have to   now lead the charge like you did in your career 
Veronica with your department with your agency   time management then becomes really important 
then for retirees if you're going to get what   value you want out of life so you talk about 
morning routine daytime routine idea week   again accountability Partners but but I 
wanted to end by talking about this time   management system for retirees you call it uh 
postek p-o-s-e-c can you walk us through that   one of the things that people struggle with 
the most and I kind of alluded to that before   is you had a routine when you were going to 
work once you retire that routine is no more   and I find a lot of times with new retirees 
especially that's where they feel the most lost   is there's no structure to the day anymore they're 
kind of and all you know all over the place and   don't know how they can spend time sometimes just 
Milling around not doing anything or whatever so   I want you to I you know sometimes when I tell 
people you know structure they kind of you know   like that's why I'm not working anymore I 
don't know why not I don't like yeah well   easy easy there all right if you want to try to 
put me back at work with destruction my name is this is the whole purpose of retirement I thought 
for me to just kind of Mill around and not do   anything but I thought we find that when people 
do that they get very bored so I just ask that   you just think of your days and more how am I 
going to start my mornings how am I going to   get up in the morning get started and get going 
through the day I think once you get that start   up in the morning of what you're gonna do it kind 
of guides you through the rest of the day but you   do need to think about how am I gonna just get 
my day started you know when you don't have an   alarm clock to get you going every morning so yes 
the workbook is is my retirement my way it's a   workbook for the newly retired it's funny the way 
that you go through goal setting like a 30 year   old would just reminds me the purpose is important 
no matter no matter where you're at in life and uh   the book's available everywhere correct yes it 
is yes well thanks so much Veronica for helping   our stackers get successful with their retirement 
it's funny we talked to a guy Wes moss in Atlanta   about his book what the happiest retirees know 
and it's so funny how it lines up so well like   if you read that and do your workbook you're 
gonna implement this and you're more likely to   be one of those happy retirees so thanks for 
this work no thank you thanks for having me   this is Daryl from Pennsylvania when I'm not busy 
arguing with a four-year-old um stacking Benjamins oh gee I love that we can talk to Veronica 
for over 25 minutes and uh the concept of   asset allocation doesn't even come didn't make it 
doesn't make the cut we're so busy talking about   what about my efficient Frontier it's all going to 
change I mean not the efficient Frontier but just   your emotional landscape I totally agree with her 
you see it all the time you go through this this   metamorphosis when you hit retirement and even get 
close to it that I think most people are way too   wait I guess they're not expecting it's a whole 
different world I mean if you've been successful   in your entire life this is the transition I 
mean just inside the money concept not not all   the other stuff that she was talking about right 
like time and energy and all that sort of stuff   but just the money piece of it transitioning from 
being a good saver your entire life to being a   good spender for the rest of your life in and of 
itself is a difficult change so hard to make that   switch and it's even harder when you don't really 
know what you want yeah you're much more likely to   just hold on to the money and the thing that you 
underestimate is time you don't have forever to   decide what you want to do would you rather have 
Charlie munger's money at uh 90 or his wisdom at   uh or you know what is he a hundred or something 
like that is his you want to trade places with   him basically no nobody would trade places with 
Charlie hunger right now for all the money in the   world well what if Charlie Munger likes what 
he's doing I understand that I'm just saying   like nobody would trade places with him because 
of the time you know because he's 90 something   oh like he's got billions of dollars so it's not 
it's not necessarily always about the money I see   what you mean but so you so to Joe's Point you'd 
end up with a really really happy last two years   of your life yeah that's right well it's our 
it's our friend uh doc G's book about hospice   you know about these people who spent their 
whole life chasing dollar bills or people   that spent zero time chasing dollar bills they 
spend all their time going no I don't need any   money and then they realize if I would have 
had some I could have had better family time   that's a good book hey let's throw out David 
lifeline and tackle some of life's most important   questions our friends at Haven life insurance 
agency Doug they put what you value first I   tell you what uh white breasted nut hatches white 
breasted nut hatches yeah what is that that's a   bird and it's also a realization that you've 
become old because one day you're joy riding   your frat brothers brand new car to Florida when 
all he thought was you were like driving around   the block and you're like we're going to Florida 
and the next day you're getting out your bird   ID app because some Bird shows up outside your 
window what is that at least it's an app and not   a book yeah true but uh and then I also spotted a 
fairly rare for my area a brown merger [Laughter]   both of those are fantastic names for birds and 
I saw them both this morning but you know you   know number one thing OG is it's an app on his 
phone but the thing that makes him proudest is   that it's his most used app on his phone like he 
gets that report from Apple and they're like you   open that Bird app a lot well thank you next 
to his uh walking step counter app and the one   that monitors his blood pressure he's he's also 
the continuous glucose monitor blood pressure   number of steps in the New Balance app 
I don't see a problem with any of this   to order new shoes every six months given his 
history Anything Could Happen hey uh speaking   of anything happening we should uh go ahead and 
throw a Paving Lifeline because the answer that   question Doug was your loved ones in your time 
with a bird app it's why they've made buying   quality term life insurance actually simple more 
time to catch the brown and merger beeping out of   the hole hey stackabenjamins.com havenlife now 
please go there and then fast forward this 15   seconds to get us out of this bird discussion 
their application's simple getting us to cover   his decision their parent company Mass Mutual is 
more than 160 years old so you know that they've   done this before hey uh today we we I I love 
Karen repine our show Runners notes for us this   is uh Jim from Wisconsin calling in and Karen 
says Jim from Wisconsin a real person not Doug thanks we actually have a real Wisconsin 
idea is that was is it wisconsinite or   is it just cheese head do you just 
say cheesehead yeah I think that's   the preferred term it's in their 
state either Constitution hey Jim hey guys Jim here and I actually am from 
Wisconsin I have a question about what   percentage to contribute to my traditional 401K 
versus my Roth 401k I'm five to seven years away   from retirement maxing out my 401k contributions 
I read somewhere that when you have saved six   times your annual income you should move all 
your future contributions to the Roth option   what's the thought process in deciding how much 
to put where I'll be looking for that shirt thanks   Jim thanks for the call thanks by the 
way for proving that you're really from   Wisconsin uh Burton from Minnesota needs to 
learn from Jim he's got to put some Midwest   on that uh yeah if you're listening 
from last week take a note from Jim   it's a good effort Jim I'll give you that 
I mean you made a You made an attempt but [Music] it didn't you don't 
think Jim really talks like that   but that is not a Wisconsin accent oh not 
as good as yours was is that what you're   saying I don't know what you're talking 
about not as good as the interloper yeah   Jim thanks for the call oh gee have you heard 
this uh rule of thumb that he's using six times   nope six times what six times something I've 
never heard that gym next time something I've   never heard it yeah the answer to when should I 
put money in a Roth 401k versus a regular 401K   is largely determined by your ability to pay the 
taxes today you know you think about it if you're   making a hundred grand and you're contributing 
the maximum to your 401k you're putting 22   000 in your 401k this year which if it's pre-tax 
is going to lower your taxable income to 78 000   before your deductions and all that other sort of 
stuff that roughly is going to save you maybe four   or five thousand dollars in federal taxes because 
of that contribution not including any state taxes   if you switch to the Roth side then that deduction 
doesn't appear in your W-2 so you effectively are   going to have a four or five thousand dollar 
additional tax withholding throughout the year   so it's you know back to our discussion at the 
beginning of today your budget is going to be   affected by call it 400 bucks a month if you can 
afford that if you can fold that into your budget   and not go into credit card debt or not have to 
borrow more money for cars or student you know   like if you can deal with it then obviously it's 
better to pay your taxes today well not obviously   but it makes most sense I think to pay your taxes 
today because it's a known thing you know in the   future all of that money becomes tax-free forever 
and there's no there's no government requirements   of withdrawals there's no government requirements 
of those distributions that you have to take once   you are retired it's all in all the roths side 
is way way better but it comes at a cost which   is that 500 bucks a month well and I think I would 
think OG you know he talked about doing the Roth   later in the pretext earlier I would think that 
to pay that cost and to make it even more worth it   because of the fact that you are prepaying the tax 
you need those assets to grow much much much more   so I would think that at the very least flipping 
that around and doing the Roth first makes more   sense like the further you are away do the Roth 
don't don't do pre-tax first and then switch to   Roth I would do Roth as early as I can and switch 
to I mean if I'm choosing one or the other which   you and I know this most people that listen to 
this don't we haven't had this discussion a long   time we don't think either one of these is right 
we think you should be doing some of each because   you don't know what the future is going to hold 
but certainly or Roth first approach versus the   other way around it doesn't make more sense 
if you're thinking about it from the kind of   historical context of your earnings you're going 
to make the least amount of money early in your   career and the most amount of money on the back 
end right like usually that's how it works you   your income continues to increase throughout 
your career so if you have to pay your taxes I   would rather pay them at a lower rate if possible 
versus when I'm 50 and I'm making 200 000 a year   maybe that's the time to use the pre-tax bucket 
because of the fact that most 401ks come with   company matches and those matches are also pre-tax 
I think that if you can start out doing a Roth   early in your career and continue to do it your 
entire career you'll end up with a good enough   balance of Roth 401k and pre-tax because of the 
company matching contributions being pre-tax but   if you're really trying to optimize tax brackets 
and that sort of thing you can kind of manipulate   it as you get toward those higher tax brackets 
the problem with all of this of course is that   we're taking a very big guess at what tax rates 
are the day you withdraw the money how do we   know whether or not this worked pre-tax versus 
Roth well if you put the money in a Roth 401k   and you take it out in the future you're betting 
that today's tax rates are better than tomorrow's   tax rates you're saying I'd rather pay taxes today 
than in the future because the future I think are   going to be higher that's what you're saying and 
the vice versa is also true if you put the money   in pre-tax today you're saying I think I can take 
this money out at a better tax rate in the future   then I can pay it today so I'm you know I'm at 
a high tax bracket today I think I'll be in a   lower tax bracket in the future the only way that 
you know whether or not you're right is after you   know that you're right because we don't have 
the chart that says what are tax rates in 2037   because if we did then we would be able to 
calculate it and say with certainty this is   a better choice based on the circumstances 
all we're saying is I think I might have a   lower tax rate in the future or I think 
tax rates might be higher in the future   the one thing that I can say is that if Congress 
doesn't change any of the rules Roth contributions   Roth growth and earnings are 100 tax-free forever 
so I don't care what the tax rates are in 20 years   from now when I take the money out because it's 
tax-free yeah if I'm gonna lean I'm leaning toward   pay the taxes today be done with it that said 
slots approach too by the way which is to say   you got the cash today pay it today so that you 
don't look at your IRA and go I've got a million   bucks in my IRA it's like no you don't you have 
500 000 in your IRA because half of it is for the   government Doug I think this is really important 
uh stuff for you I mean given your history with   taxes and I have no history with taxes so I'm 
good well maybe that's the point you gotta earn   something to pay taxes maybe that's the point big 
thanks to you Jim for the call if you would like   to call and ask a question you know what we will 
send you a Haven life stacking Benjamin's greatest   money show on earth circus t-shirt and Jim from 
Wisconsin really from Wisconsin is getting one   cent his way slash voicemail gets you the shirt 
and we're happy very happy to send it to Jim as   I stare ready Doug as I say that I don't know why 
I'm staring at Doug as I said Jim well he sounds   hideous what are you talking about well it's 
just I mean it's like a fiction just thing right   this gym it's like the the State Farm guy that's 
who you're talking to I know I think it's Jim I   think somebody's having a tough day there OG well 
before we say goodbye today time for our community   calendar man we've got a great week over on the 
stacking deed show where Crystal Hammond and Alan   Corey dive into real estate Alex e Edwards is 
a guy who helps uh has helped a lot of people   in the southeast part of the United States 
get out of intergenerational poverty through   real estate teaching some real estate helps them 
learn how to buy houses how to learn to do it in   a responsible way he's going to be their guest on 
tomorrow's show over on stacking Deeds of course   our other sisters show the earninginvest podcast 
doc G always has guests who dive deep into Allah   into some some topic that is uh always exciting 
and a fantastic and a fantastic discussion he   has a friend of ours Fritz from the retirement 
Manifesto coming up on Thursday Fritz is a guy   who retired young documented his retirement an OG 
to Veronica's Point earlier in today's show Fritz   has really done it right this guy is so busy but 
now doing that second career I think he serves on   a couple of boards he Volunteers in the city of 
Asheville in a couple different capacities one   is working with animals he's always out in his 
wood shop this guy has so much going on he's not   sitting there wondering what he's going to do 
so if you're interested more in in retirement   Fritz will be over on earn invest of course here 
on Wednesday the draft the NFL draft is Thursday   so we've got Rob Welch he and a former NFL player 
wrote a book together about going pro with your   money we're going to talk Wednesday about no 
matter what you're trying to go pro in how do the   pros treat their money A lot of pro players about 
to get a big payday on Thursday and as we already   know a lot of them don't do the right thing with 
that sudden money OG it goes in the wrong place   that's what's coming up this week thanks so much 
for hanging out with us today if you're somebody   that's my kind of person and will leave a 
review for people that they only know via   podcast or maybe you've hung out with this 
on one of our social media channels please   leave a review of the show that helps us so 
much helps new stackers realize what they're   getting into a little different take on money 
than maybe some of the other shows out there   thanks to everybody who's done that Mom puts those 
on her refrigerator if you're not here though to   hang out with us on social media you're not here 
just for Doug's trivia you're here because of the   fact that you're worried about the economy you're 
worried about your money and and how it works   together and as a lot of those fears begin to ramp 
up for people you might be feeling anxious to make   some moves in your finances what I'd like you 
to do instead is check out this free guide that   OG and his team have put together that'll help you 
plan more and panic less no matter what the market   does it has some great insights on what you should 
be doing and smart questions to ask yourself so   that you make financial decisions your future self 
will thank you for head to stackybenjamins.com   guide that's stackybenjamins.com guide to get that 
free guide from OG all right that is what's going   on in the community man a lot of takeaways today 
but Doug what are the top three man well Joe first   take some advice from our guest Veronica McCain 
and create your own unique roadmap to retirement   second take a memo from our Tick Tock minute 
to up your vocab game and Excel above the   competition I'm sure you'll get promoted in no 
time but the big lesson turns out five times in   a row is the limit to singing Heartbreak Hotel 
at the top of your lungs after that Joe's mom   starts to get irritable and make threats now that 
I think about it probably was the hip thrusting thanks to Veronica McCain for joining us 
today you can find her book my retirement   my way a workbook for the newly retired to 
create meaning set goals and find happiness   wherever finer books are sold we'll also include 
links in our show notes at stackingbenjamins.com this show is the property of SB podcasts LLC 
copyright 2023 and is created by Joe salsi   High our producer is Karen rebein this show was 
written by Lacey Langford who's also the host of   the military money show with help from me Joe and 
Doc G from the earn an invest podcast Kevin Bailey   helps us take a deeper dive into all the topics 
covered on each episode in our newsletter called   the 201 you'll find the 4-1-1 on all things money 
at the 201 just visit stackingbenjamins.com 201   Tina eichenberg makes the video version of this 
show Once We bottle up all this goodness we ship   it to our engineer the amazing Steve Stewart Steve 
helps the rest of our team sound nearly as good as   I do right now want to chat with friends about the 
show later mom's friend Gertrude and Kate Younkin   are our social media coordinators and Gertrude is 
the room mother in our Facebook group called the   basement so say hello when you see us posting 
online to join all the basement fun with other   stackers type stackingbenjamins.com basement 
not only should you not take advice from these   nerds don't take advice from people you don't 
know this show is for entertainment purposes   only before making any financial decisions 
speak with a real financial advisor I'm Joe's   mom's neighbor Doug and we'll see you next time 
back here at the stacking Benjamin show foreign [Music] the after show this is uh the part of 
the show that doesn't exist if you're   new here what happens in the after show stays 
in the after show getting back to your clothes   I think that singing Heartbreak Hotel at the 
top of your lungs just you know given your   history might not be might not be great well 
since my baby left I find a new place to dwell   they're down at the end the lonely streets 
called speaking of speaking of Doug's history   um there's unfortunately OG a doctor 
out there who has violated HIPAA rules   and um got us audio from Doug's latest therapy 
session and uh well I thought that as long as   they broke the rule we didn't we should probably 
play it look at the look OG can't wait for this   he is so excited about that well I think 
this is bad I think doctor shouldn't be   doing this but as long as they have let's no 
this is this is Doug's latest therapy session you what well you had waffles for dinner and you had   waffles for breakfast so we're 
gonna eat something else oh I oh I don't know sounds like you're obsessed now 
you're really crying pretty good there now   everybody is thinking about waffles like that 
brain worm is in there and you're going to   be thinking about it now for the rest of the 
day well I I think I I mean I I really think   that uh you shouldn't be thinking about waffles 
given your history you're begging for me to ask   I've resisted this whole time I'm not gonna 
ask I'm not gonna ask why you keep harping   on my history so OG and I saw this uh this video 
that these guys said that that if you really just   want to mess with somebody just end as many 
sentences as possible when you talk to them   with given your history just say it over and over 
and see what happens and watch them watch Doug   unravel the entire show they melt it is surgically 
effective like it has just been driving me crazy   I said it's Alyssa I don't even 
remember what it was about but I just   you know she was like brushing her 
teeth or something and said well you   know given your history and she's 
like what is that supposed to mean you know just totally like around everything 
to a halt just like you said yeah I think that   is a bad marital move I said this will work 
well with Doug I would not yeah I would not   do that right before bed because you are not 
sleeping that night stackers you may or may   not want to try that your results May Vary but 
ours ours I thought today were pretty good Doug   didn't know what the hell was going on 
actually now that I know it's actually   more impressive that you found a way to 
dodge my question the whole the whole   episode you know given your history of course 
yeah I'm not not enjoying your company anymore

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The Peace of Mind Retirement Planning Process

What does it look like to build a  retirement-focused financial plan?   What are all the steps? What do you have to  do? What information do you have to provide?   In today's episode, we are going to lay it all  out, super simple, for you. And our goal is,   by the time you get through this particular  episode, you're going to have a clear   picture. You're going to understand what it  takes so that you can have a secure, safe,   retirement, peace of mind to and through  retirement. We hope you enjoy this episode. To learn more about how to secure your retirement   and all the different elements you need  to know, please subscribe to our channel   and hit the bell so you'll be notified  when we release episodes every Monday. We have helped hundreds of our  clients gain clarity and get   on the path to a great retirement.  Now it's your turn.

Let's dive in. Welcome, everyone, to our Secure Your Retirement  podcast. Today is a very special episode. We're   going to kind of take you through our  financial planning process really from   an A to Z. And we get the question all the  time, how does this look? Does it work? To   be able to really help us to do that, we  have special guests with us. We have Nick,   who is here in our office; and we have Taylor,  who works with all of our clients as well,   but she does that all the way from Salt  Lake City, Utah, but she drove…

Nah,   she flew here. She came on all the way for  this episode and to be able to spend some   time with us. So thank you, Taylor, for coming  all the way out just for this special episode. Yeah, of course. But she did pick pretty good weather. She did, she did. All right. So, here's kind  of the premise of this particular episode. What   we get a lot of times is somebody who maybe has  worked with a financial planner, financial advisor   sometime in the past, maybe they never have, and  they go, "What does this look like? What's that   process look like?" So we have Morgan with us on  this episode, and Morgan's going to really be our   moderator and kind of interview us as to how this  whole thing works. So that's kind of the setup   for today so that you can understand from A to Z  how this all works.

So, Morgan, get us started. So let's assume someone has learned about us via  the website. They've seen our book. They, somehow,   have learned about us and they're ready to be  introduced. And how would they go about then,   Taylor, getting ready to do that? How would they  prepare for a personalized introduction meeting? Yeah. So first thing that we'll have someone do  is fill out what we call our financial snapshot,   and we send that over as a questionnaire  through email. And it has a bunch of   information and questions about things  like if you're currently working,   what your level of income is? And if you're  going to take Social Security in the future,   what your estimated benefit's going to be?  Or if you're taking Social Security now,   what your pension is all throughout your current  financial situation? That will help us get to   know you a little bit better and figure out  where we can help you with our services.

What if somebody's not quite ready to share all  of their information with us? How does that work? Yeah. So, Murs, I'll let you handle that one  since you have been around for a long time. So, when it comes to someone that is… And we  understand, right, it's your money that you've   taken time to build up over 30-some-odd years  and to go into a meeting with usually a complete   stranger and be able to give them everything, we  understand the apprehension around that.

But on   the flip side of the coin, you got to understand  that as a financial planner and the way that our   firm operates, we have to know quite a bit to be  able to make a decent recommendation. So we do   operate… I'm a CFP, Radon's a CFP, Nick's a CFP.  Taylor is one, too. And so as CFPs, we have to   operate under this fiduciary standard.  Fiduciary, by the way, pretty much means   that we are going to put our client's interest  ahead of our own. And the only way to do that,   the only way to make a decent recommendation,  the only way to give guidance going forward   is we need all the information really  that is pertinent to the conversation.

So if someone is not willing to  share account values with us,   or if they don't want to discuss some property  that they have or something like that, well   I'll tell you, it starts to raise a  little bit of a red flag for us because   there's a lot of things that go into all of  these elements of financial planning. And   it's one of those things where obviously,  yeah, we need to take time to build up the   trust to understand each other.

But on our  side of the table, if we can't get the data,   at the end of the day, the data is what is going  to help us make the best recommendation possible.   Then there there's holes in that data, then  we start to have issues on making projections,   understanding your risk levels, being able to  make a proper recommendation as far as what   investment strategy do we want to be utilizing.  So if we don't know all the chips on the table,   then it makes it very difficult. Ultimately,  that ends up being a separate conversation of,   "Hey, Mr. And Mrs. Client, where do  we want this engagement to really go?" Yeah.

I just wanted to piggyback on a little  bit about how Taylor opened it up because she   talked about all these different pieces that  we need. And if you think about our process,   we get some basic information. Obviously, we  want to know who you are, your date of birth,   some just basic information. But then we get right  into this idea of, well, give us an idea of where   your accounts are and what type of accounts.  So I just thought I'd ask Nick, if you could   take us through this, because you've worked a  lot with us as well around this data gathering.   Could you tell us… Maybe describe what are  the different types of accounts that people   would be submitting and why it's important to  know what those different kind of accounts are? Yeah.

So, some of the more common accounts are  IRA accounts and Roth IRAs. You have 401(k)s   that you might have built up for decades in the  past. Those are probably the most common ones,   but you can have brokerage accounts, whether  that's an individual brokerage or a joint account.   And then you also may have different annuity  accounts. So, those can be at different insurance   companies in the form of an IRA or a Roth IRA  or a non-qualified account as well. So, there's   a whole bunch of different accounts that you can  have. Some are more common than others, but at the   end of the day it's important to get the specific  type of account so that we know how to build our   recommendation, what to build our recommendation  off of, and how to help going forward. Yeah.

And I think on top of that, it's also just  a good exercise for the person that is trying to   get some advice because I'll tell you, Radon and  I, we've seen so many times where a person doesn't   know what the balance of that one account was,  where they worked for that company 10 or 15 years   ago, and so an old 401(k), or they haven't really  looked at how an account is allocated as far as   from an investment perspective. So I think it's a  good exercise not just to get all the data to us   and the information to us, but also just to take  a step back and look at what you have done so far   to get to where you are and the different pieces  of the puzzle that have come together over time.   Usually, that's a pretty remarkable thing that  you can look back and say, "Wow, I did all this." Yeah.

And I think, Morgan, you set this up and  said, "Okay, I'm thinking about meeting with you."   So, just to kind of clarify, we really work off of  what we call a three-appointment process. And so,   what we're describing right now is kind of  getting ready for that first appointment. And   so I think you asked the question, "What if  I don't want to share some things" or that's   not… so for the initial conversation, if we've  got… I always say, "Give me the basics of your   picture." Meaning I don't need to know it to  the penny, but we need to have an idea of about   what those accounts are or the different  types of accounts Nick just talked about,   and we need to know their tax classification  just so we can have a basic conversation.   And we're going to go through this  worksheet.

Now, if you don't have   this available ready when you come in, we can  do this together. So don't worry about that. But now, I just wanted to set the basis in that  initial conversation that we have. It's really   kind of this idea of are we a good fit for each  other? So, yes, this is important information.   We're going to either ask you to have it for  us ahead of time or we're going to do it while   you're here with us. So we've kind of covered the  accounts.

And again, I'm working off this first   appointment because we're going to come back  to those accounts for the second appointment.   But for right now, we're just trying to get our  baselines. So I think the next area that we start   to go into is our income part of the snapshot. So,  Taylor, would you mind breaking down the different   types of incomes somebody might be telling  us about on this? Just so we've got an idea. So if you are still working and you haven't  retired yet, then we're going to want to know what   your current salary is at your job.

And if you  have retired and if you're taking Social Security,   then we're going to ask about what your current  Social Security benefits are. Or if you have not   started Social Security yet, then there is a way  to find out what that future benefit is going to   be, so we can help you answer questions about  when the optimal time to begin Social Security   might be depending on your unique situation. So  your current income from your salary, if you're   working. Social Security, if you also have a  pension, or are planning to start a pension in   the future, then we'll want to find out what that  amount looks like. So that that can be considered   as part of your income available to you to cover  your expenses in retirement. And then any other   type of income that you have from maybe the sale  of a business, if that's part of your plan, or   from rental properties that you have.

Then we'll  also consider any rental income that you have. So we know what we have saved so far and we know  what we have coming in. I'm assuming there's also   going to be some information about what we  have going out, what we're spending, right? Yeah, exactly. We'll also want to get an idea of  what your current living expenses are, if you have   any debt obligations, if you're still paying a  mortgage or an auto loan or things like that.   If you have kids going to college or grandkids  that you want to pay for their college expenses,   then we want to know about those types of things.  And then also we can have a conversation with you   about your goals in retirement. If you want to  travel or do other things with your retirement   savings, donate to charity, whatever that  looks like for you, or have home renovations,   redo your kitchen or your bathroom, whatever.  Then we also plan those so that we also get an   idea of what your future expenses might be if  they're not regular and consistent right now.

Yeah. And I would say that category of  understanding your spending is usually   one of the more difficult ones. And  I'll paint you a little picture.   A lot of people that come to us, they're  close to retirement or maybe already retired,   but a lot of times they say you're close  to retirement, you're making good money,   and now you're starting to say, "I need to figure  out this whole retirement thing." But you're   making good money, you're paying the bills, and  you don't really pay all that much attention to,   well, what are the dollars that are going  out of the door and what categories are they? And it makes you kind of take a step back and you  got to understand where you're spending because   we see it all the time when someone flips from  their accumulation phase of life into retirement   and you don't have that employer that's paying  your paycheck anymore, and it's really all about   what you've done to save and build up for  retirement, you start to really think about,   "Well, do I need this line item in the budget or  can we cut it?" Because the worry, no matter what,   no matter if you've got 500,000 saved up for  retirement or 10 million saved for retirement,   a lot of times the worry is the same that, "Am  I going to have enough? Am I going to run out of   money?" So I think the earlier someone starts  evaluating not just how much they have today,   but also what's going to be going out the  door when they do fully retire makes the plan   so much more well thought out and more precise.

Yeah. So we're almost through it all, your  question here, Morgan. You asked a really   big question. So as we go through the snapshot,  we've kind of gone now through all the financial   stuff. Now, we have some other categories that  we're going to want to talk through. And one   of those is the estate plan. We'll ask people  about how much have they done? Have they done   a will? Have they done a trust? How old is it?  Was it done in a different state? Do you do your   own taxes? What are your goals? Do you have any  specific goals? Taylor mentioned a couple about   redoing a kitchen. Sometimes people say, "I've  got this dream vacation we've been waiting for,   and this is going to be a big expense for us, but  we've been dreaming about it.

And whenever we hit   that retirement, we're going to do it. And it's  going to be a little bit more on the expensive   side because we're going to go a lot of places and  be gone for a while. So we need to build that in." So once we have all of that conversation or  enough of that information to say, "Hey, here's   kind of the conversation," now, we can really  start to say, "All right.

What do we want to   do with that and how do we want to start putting  it together?" And typically, in that first visit,   what we're doing is saying, "Here's how we  work." And I mean very briefly, this is what   we tell people, every person, is that we really  kind of work in the very beginning by building a   retirement-focused financial plan. That's why  we need all this data. Then we're going to say,   "Look, once we know that, we'll talk about  investments, we'll talk about insurance,   we'll talk about income planning, we'll talk  about investment planning. We're going to   really kind of go all the way through." So now,  we got this sheet, so we've kind of got this   information.

That's really kind of the first  appointment. So, what's your next question? Well, so then I know that it will look like  after that as far as we've done our homework,   we've got our appointment set, you'll receive a  call from our office to confirm for the next day,   and then you'll come into the office,  and then we'll have that visit, right? That's right. So once we get through with that  visit though, at this point, we've got a good   picture. And I think at that point is when people  say, "Yeah.

You know what? I do like you guys,   or I don't," but most of the time we hope you  say you do. And we say, "We like you, too." And   so we're kind of now moving on to the next date.  And that next date is really our second visit. Okay. And what does that look like and  what do I need to do to prepare between,   or what would a person need to  do to prepare for that? Is it- Yeah. So I'm going to say this. The person really  doesn't have to do much at all at this point,   but there is some key data that, in addition  to what we've got already, that we're going   to need next. So, we got a lot… We're going to  spend with Taylor on as far as building out the   plan. But Nick, I just want to have you address  real quick, what is some of the information that   we need to get so that Taylor is going to have  everything she needs to really build out that   financial plan? Because right now, we've just  kind of got the snapshot, so there's some actual   documents that we're going to need.

Could you  walk us through what those documents would be? Yeah. Absolutely. So, what really helps us out  in creating that financial plan are specific   account statements. So, wherever the assets  are currently held, whatever custodian that is,   that could be Charles Schwab, that could be TD  Ameritrade, wherever else that is, it's really   helpful to get the most recent statement of the  account. And then it's also helpful for us to get   most recent tax return as well. So in our  preparation for creating the financial plan,   doing analysis on your specific tax return and  tax situation, and then any other statements,   401(k) statements, that you may have that  are recent are also extremely helpful for us   creating that plan and beginning to formulate  that recommendation throughout our meeting. So, then it gets all turned over to Taylor? Yeah. So now at this point's, whenever  Taylor goes to work, in addition to what's   already been done. So Taylor, could you just  walk us through what you do with all that? Yeah.

And before we do that, also, let me  interject and say, let me be the person   that Morgan was earlier of, "Well, why do I need  to give you these statements? Why do I need to   give you my tax return?" That's very personal  information. What are you going to get out of   this that I don't already see or that is going  to become relevant in our next visit together? Yeah. So this is the fun part for me because I get  to go through all of the account statements, and   we build out two things from those. One, we want  to verify the balances of your account so we make   sure that we have the right information to base  off of what your assets are so that we can make   appropriate recommendations to move  forward. But we also will go through   and look at what the holdings are in each of  your account, what exactly you're invested in,   what funds or if they're ETFs or mutual funds  or a single company stocks.

We want to know   what you're invested in because part of what  we're preparing on our end is an analysis of   those holdings so that we know what your  current risk exposure is like because that   will be part of our recommendations moving  forward, is how to make an investment that's   appropriate for the amount of risk that you  want to have as part of your retirement plan. So we'll do an analysis on all of the holdings  within your investment accounts from the   statements that you upload to us as part of our  data gathering process, and then also just verify   those amounts as part of your retirement-focused  financial plan. And for the tax returns as well,   we'll take those and do an analysis on your  tax returns to look for opportunities for   tax planning and observations and looking  forward not just for the past years of   your tax returns that have already been  filed, but for different moves that we   could possibly make to help you with your  tax situation moving forward as part of our   recommendation.

So that's what we're looking  for from your account statements and also your   tax return so that we can have a conversation  on those topics as part of your next meeting. I can't remember if it was mentioned or not,  but how do I get these documents to you? Yes. So we'll send an email out. Right now,   it's been coming from me. And we have a  little portal where you can securely upload   all of your statements and just we will  be able to access those so it is secure. All right. Nice. All right. So, just to paint a  little bit of a picture here, Nick,   could you kind of walk us through what's the  client going to get when they come in? So now,   they come in. And Taylor's been doing  all this work to get everything ready   and putting it into our financial planning  software.

What's that going to look like   to a person when they come in? How's that  going to feel? What are you going to see? Yeah. So during that second appointment, we  will go through your entire financial plan.   So, like Radon said, once we've taken  all of the data and put that into our   financial planning software, we'll go  and walk through each and every step   of that plan with you; make any tweaks that we  need to make; updates that you see, expenses,   income; and make any changes that you'd like to  see and even different scenarios that you'd like   to see. So we'll walk you through each step  of that process in the meeting. And then at   the end of the meeting, whatever you'd like to  take home, you're free to take home.

So whether   that's different scenarios, whether that's  a printout of the entire financial plan,   we can print it out or we can send it straight to  you securely. And so we do that a lot of the time.   So it's really walking through each and every step  of the financial plan, making any adjustments that   you'd like to see, and then giving that to you  so we can progress and move forward as well. Yeah. And I think I want to add a little bit more  power to what that experience is because I mean,   you just picture it, right? You've never  sat down with a financial planner before,   you've never worked with an advisor, and all  the questions in your head of "Can I retire   at 67?" Or whatever that age you have in your  mind, "Do I have enough money? What if there   is a long-term care scenario? Are we able to  afford it? Do we need to look at insurance?"   All of those questions that you've been worried  about and really didn't have all the answers to,   they start to get answered in that visit.  And we're walking you through it.

"Hey,   here's the dollars coming in,  here's the dollars going out,   here's what we've built up to work with."  And then we take it to this final spreadsheet   that ultimately we start to see a huge sigh of  relief from a lot of people that we work with. And it brings it all in on one  nice, little sheet that says,   "Here's where we are today. Here's the assets  that we have, and here's how we progress down   in our years." And we like to take it out  to age 90, 95, 100, whatever you want to   look at. And by the end of that, I would  say, part one of the second appointment,   you've already got someone who feels that there's  been a lot of value that's been delivered because   now I've got some answers to the questions that  I've had for a long time of, "Hey, can I retire?   What's Social Security going to look like for  me? How much are we going to be able to spend   in retirement?" Things like that.

So it's pretty  cool feeling being… as an advisor on the other   side of the table, being able to deliver that.  And we're not even working with the person yet. So it sounds like a lot of  information you're taking   in from that appointment. How do you  move forward from that? Do I need to   make a decision at that point? Or what  do I need to do after that appointment? So that I go back to, I say, that's part one of  the visit. And we spent about 20 to 30 minutes   on part one of the visit. Part two now goes  into what Taylor was talking about that we   have put together as far as a risk analysis.  And I'll let Taylor chime in on this,   but basically, she's done some work as far  as understanding what is in those statements,   what investments are we in, and then we also have  a risk conversation that says, "Well, forget about   how we're invested today. What does our gut  tell us about how we feel about risk?" And,   Taylor, if you want to talk to the  differences that we see sometimes   on how someone's invested versus how  they feel like they should be invested.

Yeah. So part of what we'll do when we're meeting  with you and talking about your current risk   exposure and the difference between what you're  currently invested in and what maybe you would   like to be invested in is we'll go through a  questionnaire with you to get an idea of how   much risk you want to tolerate in retirement,  and then we can kind of compare what you want   to where you are currently invested to give us  an idea of some of the changes that we might   need to make for you as part of your retirement  financial plan so that we can better align where   you currently are with where you want to be as far  as your risk exposure in your investment accounts.

Yeah. I think what we do here that's a little  bit different is I always tell people, "If you've   ever done this before, a lot of times there's  a questionnaire you get" and it's kind of like,   "Do you go to Vegas on the weekends and bet  everything on one type of gamble that you   would take over the weekend?" It's obscure. What  we do is actually look at the numbers. So we say,   "Hey, if you got $1 million and it were  down 10%," somebody might immediately say,   "It's not that bad" until we show them it's down  $100,000.

And then they go, "Whoa, I don't want   to be down $100,000." "Oh, if you're down 20%,  that's $200,000." Definitely can't handle that. So we basically walk them through those real  numbers. And then somebody comes up with their   number and they go, "Look at this point, whatever  that might be," so let's say it was 10%, "At 10%,   yeah, I'm starting to get nervous, so I  don't want to lose more than 10%." Well,   then we take them and we show them what their real  risk is on their current investments and they go,   "Oh, my goodness, I didn't realize I was that  risky in my investments." And then we talk about   how did it go last year? I mean, "That's an easy  one this year because last year the markets were   down 20%." So people go, "Yeah, I was down 20%,  too.

And I just didn't think about it from the   dollar's perspective." And so that is eye opening  to a lot of folks when we get to that point. So now, what we've done is we've kind  of worked all the way through this   information. And at this point is where we  say, "All right. We're going to send you the   financial plan. We're going to send you the  data of what we've put together thus far."   And now what we're doing is, is we say, "Look, we  want you to take a break at this point, go home,   look at what we've going to send you. And then  we come back together for a strategy meeting."   And the strategy meeting is saying, "How do  we start to look at this? How do we that?"   And I'm just going to say that we do it in a  couple of different ways. One of the things   that we do as a bucket sheet. And in that bucket  sheet is breaks this into three buckets.

So Nick,   could you kind of take us through what that  bucket sheet looks like as a part of the strategy? Yeah. So, to start with the bucket sheet, we  start with basically three different buckets.   And usually we're typically drawing this on  the board, so that whoever we're meeting with   can see it in person. And visually, it's a  lot easier to see. So you start with either   a cash…. you start with a cash bucket,  a safety bucket and then a growth bucket.   And to kind of break those down step by step, the  cash bucket is really anything that you feel…   or the amount of cash that you feel comfortable  holding.

So for everyone, that may be different.   Some people like to hold a lot in cash just for  emergencies. Some people are typically holding   smaller amounts. So that's person to  person. That's a completely personal choice.   And as long as that doesn't really negatively  affect the plan in any way, typically,   it won't. And that's just a number that we  have as part of the bucket sheet overall. That second bucket is the safety or income bucket,  and that's set basically for safety or income in   the future. And that's basically a few different  products that we recommend as part of the strategy   meeting to hold in that bucket and provide safe  and reliable income throughout your retirement.   And then the third bucket is the growth bucket.  And that's really set to grow throughout your   retirement.

The goal there is basically to have  that money so that you don't have to… you can,   but you don't need to tap into it throughout your  retirement. And typically, that will be liquid if   you need it. But really, the goal of that growth  bucket is to grow throughout the 20-some-odd   years. And then, your safety bucket will take care  of your income during retirement. So those are the   three different buckets. And we kind of basically  form our recommendation around those three. Yeah. Over the years, I've been  doing this for 22 years. Murs   has been with me now for 11 or 12  years.

How long was it? How many? 11 years. 11 years. So we started using this  bucket strategy just to make things   simple. So I just want to ask you,  Murs, what are you seeing from folks   as we started using this as to how they  get it and how valuable it is to them? Yeah, I think in one word, it's clarity.  Clarity on how things are positioned,   and confidence, as well as how this plan can  actually function. A lot of times, again,   doesn't matter how much money you got, it's one of  those things where until you see it on a screen,   until you see it mapped out for you, it's hard  to imagine that whatever money you've built up   is going to last as long as you need it  to. So once we show this cash bucket,   this safety and income bucket, and then this  growth bucket, and help someone understand,   again, personalized to them, you may have someone  that…

And we see all types of situations. You   may have someone that's got all the income that  they need, discretionary income that they need   is covered through their Social Security or their  pension. So they've got a really good situation. So their bucket sheet is going to look a little  bit different than someone else who has no pension   and just has to rely on Social Security. They're  going to need to draw on their assets a little bit   more. And so being able to kind of put those  three categories together and being able to   show someone in a very simplistic manner, this is  not… we don't want this to be complicated. Yeah,   the investing side of things can be complicated.  The income side of things can be complicated. But   if the strategy and if the client can understand  the why, why do we put money in this bucket versus   this bucket, and they can talk about it in  conversation to their friends and family,   all of a sudden it sits very well. And I  think there's a lot of power to that, right? There's some that would use a 20, 30, 40, 50-page  financial plan.

And we all know what happens with   that plan. You looked at it once or it's presented  to you once, and then you never looked at it again   because it was just too overwhelming. This bucket  sheet that we end up using as a recommendation,   and then as a final deliverable, it's a one-page  snapshot of what your life is going to look like.   And we're updating that year after year after year  because in our opinion, at the end of the day,   a financial plan, it's moving.

It is not set  in stone. It is flexible because we know life   happens, we know situations happen. And so we need  something that can be nimble with that as well. All right, Morgan, we gave you  a lot. Any other questions? Yeah. Well, I feel like these tools,   this visualization and all these  conversations are going to help   you come to a pretty good decision. What do you  do after you've taken all this information in? Yeah. We try to keep these episodes at  around the 30-minute mark just because   we don't want it to be overwhelming, but  here's where we are. I mean, at this point,   a person has a pretty good idea of how things  are, at least, going to get started, but it is   just the beginning. It is just the start of where  we are in this journey to and through retirement. And so what we're going to do, we're going  to come back together because I've got more   questions.

I think Morgan's got more questions  for all of us around this idea, "Okay, well,   I'm here. You've given me all this. So now, what  do I do next? And where do I go? And if I become   a client, what does it look like then? And how  do I take all of this hard work that's been put   into building out this plan and building out  this whole process? How do I implement it?   And what does the implementation look like  and how long does it take to implement? And   how long am I going to be having this thing  monitored? And what does that look like?" So we're going to walk you through that in  our next episode when we all get together.   Just so you know, if you're looking for  that, it'll be the end of the next month,   so in a few episodes.

But we're going to walk you  back through all of those different aspects. So I   just want to say thank you very much, Nick and  Taylor, for coming on, the special guests, with   us here on this episode. And your insight has been  very helpful on making sure we clearly understand   what it means to build a financial plan. So, thank  you. Thank you, too, Murs, and Morgan, for all   the great questions. All right, everybody, have a  great week. We will talk to you again next Monday. We hope this video has given  you some confidence and clarity   as you plan for a worry-free life and  retirement. But what else do you need?   We have created a complementary video course  called Three Keys to Secure Your Retirement.   This video walks you through step by step what  you need to do to get ready for retirement.

You   can also check out our podcast called Secure  Your Retirement. You can subscribe below. For more retirement tips, check out these  videos. Also, if you find them valuable,   please subscribe to our YouTube  channel and give us a Like.
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Member retirement process

it's time for a fresh take on retirement at Catholic super we don't believe people retire it isn't about bowing out stepping down or pulling back retirement is a time of promise and possibility a chance to re-fire rewire renew so what might your retirement look like whether it's years away or just around the corner it's never too early or too late to start planning your next chapter start by asking yourself what type of Lifestyle do you want to have and how much income will you need to support it will your superb be enough where does the age pension fit in how will you invest your money in retirement and how will you transition your money there's a lot to consider but you're not alone a Catholic super we've helped thousands of Australians retire with confidence make a start today use our online retirement income calculator to see how you're tracking so far explore our knowledge Hub to learn more about retirement what's involved and how to prepare book an appointment with one of our financial advisors an initial appointment is available at no extra charge simply complete our online booking form or call us directly on 1-800-065-753 and let's start writing your next chapter foreign

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7 Social Security MISTAKES that Cost THOUSANDS in Retirement

in this video i cover the seven most common mistakes people make with social security they cost them thousands of dollars in retirement coming up next on holy schmidt holy schmidt social security is a complicated subject and knowing what to do or more importantly what not to do is key to maximizing your social security benefits this video covers the seven most common mistakes in my humble opinion that people make with social security that prevent them from getting every dollar that they're due stick around to the end because i'm going to debunk the biggest one of them all this single mistake alone can cost you thousands of dollars before we begin please make sure you click the like button youtube uses the thumbs up as its algorithm trigger to drive a video up in the search results and i want to help as many people as possible all right let's get into it mistake number seven not knowing the earnings limits if you're asking yourself what's an earnings limit pay close attention for the rest of you i'm going to make this very simple if you haven't reached full retirement age and for the sake of this video let's say that's age 67 the ssa will take back a portion of what they've given you in retirement benefits based on how much income you earn in 2021 for example if this isn't the year that you turn 67 the ssa will take back one dollar for every two dollars that you earn in excess of eighteen thousand nine hundred and sixty dollars for example if you earn forty thousand dollars in 2021 your social security benefits would be reduced by ten thousand five hundred and twenty dollars that's simply forty thousand dollars minus eighteen thousand nine hundred and sixty dollars divided by two in the year that you turn 67 the ssa is a little bit more lenient you have to repay one dollar for every three dollars that you earn in excess of fifty thousand five hundred and twenty dollars most people would rather wait and file for social security later and get the higher payment between five and eight percent depending on how many years past age 62 you wait then have to give a large portion of it back the next point is the spousal benefit the spouse can receive anywhere between thirty two and a half percent and fifty percent of the primary insureds for retirement age payment depending on the age of the spouse when he or she files what a lot of people don't realize is that the size of the spousal payment isn't tied to when the primary earner files for social security themselves only if they filed for social security so if they file early or if they file late it doesn't matter it's entirely based on the age of the spouse when he or she files for the spousal benefit point number five is pretty common and that is the we could all die tomorrow i'm filing at age 62 mistake this is a funny one because the logic is actually true anybody could die tomorrow but the math suggests that if you reach age 62 you're going to live to age 82 to 84 depending on if you're a male or female basically this comes about because somebody knows someone who passed away early and never was able to claim social security benefits or if they had claimed them they claimed them late and only had a few years of benefits paid to them and they've extrapolated that back to themselves and what could happen to them we don't actually know when we're going to pass unfortunately but as i said before if you've made it to age 62 the tape will say that you're likely to make it to age 82.

these people say they're going to live a life large and enjoy life while they still can rather than worry about what might happen in the future but i almost always get a different answer when i ask the question do you think you'd feel the same way at age 88 as you do at age 62. and just going through the math at age 62 you get 70 percent of what you would receive at full retirement age again age 67 and at age 70 if you wait until age 70 you get 124 percent of what you receive at age 67.

This means that the recipient receives 43 more at age 67 than they would at age 62 and 77 percent more at age 70. somewhere in there is the right age for you but it may not be age 62. i don't get into politics on holy schmidt it's just not good for business but i will point out one of the most common erroneous comments that are made here on the channel is that immigrants come to the united states for free social security that actually can't happen because to qualify for social security you need 40 quarters of earnings during your lifetime and those earnings have to be the type where you actually pay into the social security fund in other words they have to take out social security taxes they don't have to be consecutive quarters you could work for three months take the next three months off and then do the same thing again and again and again over 80 quarters but you do need 40 quarters that's 10 years of work history in order to qualify to get a social security check also you need to earn a certain minimum per quarter in 2021 that amount is fourteen hundred and seventy dollars in a single quarter it's a pretty easy number to hit so know that if you're not paying into social security for forty quarters you're going to miss the mark and not qualify to receive social security so check with the ssa and see what your work history looks like you don't want to miss it by three or six months point number three another mistake is to think that everybody gets paid the same social security payment in retirement they don't the ssa uses your earnings history and they use that to calculate what your social security payment is going to be and it's based on your best 35 years the theory is the more you earn the more you contributed to social security so the more you should get paid back from social security when you go into retirement for most people when they entered the workforce they didn't earn very much and so their contribution to social security would have been quite modest as time went on they got promoted they got raises and they continued to earn more this means if you're like most people your last few years of earnings and your contribution to social security during those years is a lot higher than your first few years of earnings and contribution so if you retire early you're probably leaving a higher payment on the table on the flip side if you have 35 good years of work history behind you and think you're going to continue to grow your social security payment by working part-time that's probably not actually true remember the ssa takes your best 35 years part-time work after 35 good years doesn't change the payment at all by the way if you don't have 35 years of work history the ssa will put zeros in for the remaining years to get you to 35 and use that as your base too many of those and your social security payment will drop significantly if you want to know more about this i have a video out on how to calculate your social security payment and i'll put a link in the description by the way i recently signed up for instagram i post information about social security there as well it's different information than what you see here it's short it's bite size it's very quick and easy to consume i'd love it if you follow me all you need to do is go over to instagram and look up the underscore schmidt list that's my handle and it's also called holy schmidt now back to the video point number two is understanding the taxes on social security using a calculation called provisional income the rules are on taxes and social security are quite confusing this is because there are actually two sets of rules there's the federal rule and there are the state rules and people often get those two confused let's start with an easy one let's start with the state rules currently there are 38 states in this country that don't charge income tax on social security if you live in one of those states remember that that doesn't mean the federal government doesn't charge income tax it just means that there's no state tax on your social security payment this is a big point of confusion with people and often the source of a surprise bill from the irs at the end of your first year of receiving social security benefits also if you don't live in one of those 38 states you might want to consider moving state tax on social security payments can be significant and with 38 states in this country willing to forgo receiving tax payments on your social security benefits there might be a better place for you to live now federal tax on social security the irs can tax up to 85 percent of your social security payment depending on what your provisional income is what is provisional income well it's the sum of your agi your adjusted gross income plus municipal bond interest plus foreign earnings that are not necessarily taxable here in the us plus your social security payment 50 of your social security payment if you add all that up and that totals more than the provisional income thresholds you owe the irs tax on a portion of your social security payment in 2020 the threshold was 32 thousand dollars for married couples a special note that drawing from a taxable retirement account like a 401k or standard ira does increase your adjusted gross income it increases your agi but withdrawing funds from a roth ira which come out tax-free does not increase your agi if you want to learn more about provisional income and how it's calculated i've included a link in the description for one of my other videos which covers this in great detail finally the one i told you about beginning point number one taking the funds at age 62 and investing them one of my most popular videos is entitled should you take your social security payment at age 62 and invest or wait until full retirement age i recorded this video because there are stalwart social security evangelists out there who swear by the fact that you should take your social security payment at age 62 and invest it and they say you'll always come out ahead and they say it with conviction so a lot of people believe what they're saying they almost always cite a five percent return on the investment and state that if they pass away early there is an account filled with an investment amount that they can pass on to their heirs usually it's their spouse sometimes it's their children so let me take you through the math you can check it on my website holy schmidt dot com forward slash 62 invest if you took social security at age 62 the average payment at least in 2021 for a 62 year old is 1189 at full retirement age in this case age 67 the payment is 1789 the difference is 609 1180 a month times 12 months times five years earning five percent per annum comes out to eighty thousand three hundred and sixty one dollars more at age 67 than if the recipient had waited until age 67.

so at age 67 they have 80 361 dollars sitting in a nest egg now assuming you still get five percent you can draw down 609 dollars per month that's the difference between the two payments at age 67 and come out ahead up until age 82 years and 10 months by the way the actuarial tables say that males live to age 82 on average and females live to age 84 on average if they make it to age 62 so it's about breakeven if you look at pure math of course some people will live longer and some people will live shorter but here's the problem at age 62 if you're not spending your social security payment how are you going to live are you going to work a few more years well if so remember the earnings limit because if you earn more than eighteen thousand nine hundred and sixty dollars in 2021 anyway you're going to have to give a portion of that money back let's say the answer is no and you're just planning on living off of your retirement savings so you're going to withdraw money from your 401k remember the last point on provisional income taking money from your 401k adds to your adjusted gross income and also makes your social security benefit taxable if it becomes too large also remember that these are your youngest of your retirement years and a lot of people want to do things like travel in the early stages of retirement and the limits set by provisional income probably won't let you do too much of that finally some of the age 62 evangelists talk about the time value of money but they've got it actually backwards let me explain they say that the big jumps you get the five to eight percent per year increases that you get aren't really that big because of the time value of money first let me point out that the five percent return that they all cite includes the time value of money you don't get five percent plus a tvm adjustment on top of that you sort of get it on your eleven hundred and eighty dollars because that payment is adjusted every year for inflation with something called cola that's the cost of living adjustment but if you check back at age 63 on the payment that you receive at 67 it's not 1789 anymore that forecasted payment also goes up with a cost of living adjustment and the same thing happens at age 64 65 and 66.

so unless you're planning on earning a higher return a higher return than five percent and a higher return means higher risk in order for this to work you'd have to not work past age 62 not draw income from taxable sources such as a 401k not live past 83 and be disciplined enough during all of that not to spend anything that you receive from the ssa oh and the five percent return in most cases you're gonna have to pay taxes on that if you'd like to see more of me please make sure you click subscribe notifications i work very hard to get what's happening out there in the world of social security and into here for you and by clicking subscribe notifications you'll get notified as soon as i post a video also check out this video on the average net worth of a 62 year old some of the numbers are quite remarkable some not so much this is jeff schmidt thanks for watching

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