1 00:00:07,760 --> 00:00:12,080 Speaker 1: Tonight the most expensive lies. Couples can tend to tell 2 00:00:12,119 --> 00:00:16,560 Speaker 1: themselves why a single withdrawal rate sometimes isn't enough and 3 00:00:17,040 --> 00:00:19,360 Speaker 1: more you're listening to simply Money, presented by all Worth 4 00:00:19,400 --> 00:00:23,439 Speaker 1: Financial on Bob' sponseller along with Brian James. Well, we 5 00:00:23,560 --> 00:00:25,840 Speaker 1: see it all the time. Folks build up a ton 6 00:00:25,880 --> 00:00:29,000 Speaker 1: of success, a large net worth, and we all tend 7 00:00:29,040 --> 00:00:31,520 Speaker 1: to think we're doing everything right. But then there's one 8 00:00:31,720 --> 00:00:36,400 Speaker 1: conversations a lot of successful couples still are not having, 9 00:00:37,200 --> 00:00:39,000 Speaker 1: and it's the one that could cost you or your 10 00:00:39,000 --> 00:00:42,560 Speaker 1: family millions. And tonight we're talking about what we'll call 11 00:00:42,640 --> 00:00:46,879 Speaker 1: the quote unquote we are fine problem. Brian, let's get 12 00:00:46,880 --> 00:00:47,239 Speaker 1: into it. 13 00:00:47,760 --> 00:00:51,160 Speaker 2: We're fine, Well, this is sounds good, but this usually 14 00:00:51,159 --> 00:00:53,600 Speaker 2: means we have enough money. We don't argue about finances, 15 00:00:53,640 --> 00:00:56,080 Speaker 2: the accounts are growing, our advisor sends us statements, and 16 00:00:56,120 --> 00:00:59,680 Speaker 2: the will was done at some points around here somewhere probably. Well, 17 00:00:59,680 --> 00:01:01,639 Speaker 2: that's a little bit of a problem because it means 18 00:01:01,640 --> 00:01:03,640 Speaker 2: does mean we have our eyes off of certain things. 19 00:01:04,080 --> 00:01:07,800 Speaker 2: And so let's take let's go something through some hypotheticals here. 20 00:01:07,840 --> 00:01:09,880 Speaker 2: So the first one here is is the let's call 21 00:01:09,880 --> 00:01:13,080 Speaker 2: it the disengaged spouse. So this is Tom and Lisa, 22 00:01:13,440 --> 00:01:15,759 Speaker 2: as always from the files of all Worth Financial. Names 23 00:01:15,760 --> 00:01:17,919 Speaker 2: are changed to protecting innocent. But these are common stories 24 00:01:17,959 --> 00:01:20,479 Speaker 2: we hear basically all day, every day. Tom and Lisa 25 00:01:20,520 --> 00:01:22,400 Speaker 2: in mid sixties live in Indian Hill, six and a 26 00:01:22,440 --> 00:01:26,000 Speaker 2: half million dollar net worth. Tom ran a manufacturing business, 27 00:01:26,120 --> 00:01:29,240 Speaker 2: Lisa raised the kids, did some nonprofit work, and Tom's 28 00:01:29,240 --> 00:01:31,920 Speaker 2: always been the money guy. He's handled everything, investments, taxes, 29 00:01:32,000 --> 00:01:37,000 Speaker 2: estate planning, insurance passwords, relationships with advisors, and Lisa always says, well, 30 00:01:37,000 --> 00:01:39,280 Speaker 2: he's got it. We're fine. I'm not interested in it. 31 00:01:39,280 --> 00:01:40,920 Speaker 2: I'd rather just know he's dealing with it. 32 00:01:40,959 --> 00:01:42,720 Speaker 1: And so, in other words, this is kind of like 33 00:01:42,760 --> 00:01:44,119 Speaker 1: the Fred Flintstone family. 34 00:01:44,800 --> 00:01:47,720 Speaker 2: I would say, pretty similar to that. Yeah, but yeah, 35 00:01:48,000 --> 00:01:50,160 Speaker 2: Tom says that if anything happens to me, she'll be 36 00:01:50,160 --> 00:01:51,880 Speaker 2: taking care of He's not worried about it. Well, Lisa, 37 00:01:52,000 --> 00:01:54,760 Speaker 2: here's the problem. And this stuff doesn't surface until it's 38 00:01:54,800 --> 00:01:57,440 Speaker 2: too late. Lisa has never met the CPA. She doesn't 39 00:01:57,480 --> 00:01:59,720 Speaker 2: know what accounts are taxable versus an ira, doesn't have 40 00:01:59,800 --> 00:02:01,640 Speaker 2: much of a concept of what the differences of those 41 00:02:01,640 --> 00:02:04,840 Speaker 2: two are, doesn't know where the estate documents are which 42 00:02:04,960 --> 00:02:08,959 Speaker 2: assets are illiquid, no idea how their withdrawal strategy works. 43 00:02:09,280 --> 00:02:12,960 Speaker 2: This is not fine. This is one unexpected event away 44 00:02:13,000 --> 00:02:15,960 Speaker 2: from absolute chaos. And Bob I suspect you're gonna want 45 00:02:15,960 --> 00:02:19,959 Speaker 2: to tell us a story of the recently widowed spouse 46 00:02:20,000 --> 00:02:21,560 Speaker 2: who wanted to know if she could go buy milk 47 00:02:21,639 --> 00:02:23,320 Speaker 2: the next the day after her husband passed away. 48 00:02:23,800 --> 00:02:26,280 Speaker 1: I've told that story a half dozen times on this show. 49 00:02:26,320 --> 00:02:29,800 Speaker 1: I think people are tired of hearing it. But today, Brian, 50 00:02:29,840 --> 00:02:32,800 Speaker 1: if you fast forward to twenty twenty six, this is 51 00:02:32,880 --> 00:02:37,040 Speaker 1: not just a husband running everything and the wife slash 52 00:02:37,120 --> 00:02:40,480 Speaker 1: housewife coming in being clueless. I'm seeing this appen the 53 00:02:40,520 --> 00:02:44,120 Speaker 1: other way too, So you know it just ten people 54 00:02:44,120 --> 00:02:48,359 Speaker 1: are busy. We're building a career, we're running a business, 55 00:02:48,600 --> 00:02:51,920 Speaker 1: We're raising kids, we're driving kids to you know, select 56 00:02:51,919 --> 00:02:55,360 Speaker 1: baseball practice. It's kind of a divide and conquer type 57 00:02:55,360 --> 00:02:58,200 Speaker 1: of mindset when it comes to you know, growing a 58 00:02:58,280 --> 00:03:01,440 Speaker 1: net worth, raising a family, run life these days, and 59 00:03:01,480 --> 00:03:04,480 Speaker 1: we tend to get into our siloed roles and we 60 00:03:04,600 --> 00:03:07,160 Speaker 1: don't communicate. And I think that's the point of what 61 00:03:07,200 --> 00:03:09,919 Speaker 1: we're trying to drive home here is, you know, you 62 00:03:10,040 --> 00:03:12,080 Speaker 1: got to step back and take a look at why 63 00:03:12,080 --> 00:03:14,280 Speaker 1: did we do all this in the first place, in 64 00:03:14,360 --> 00:03:17,880 Speaker 1: terms of building this healthy net worth to retire off 65 00:03:17,919 --> 00:03:20,480 Speaker 1: of and then leave to our heirs. And if there's 66 00:03:20,480 --> 00:03:24,480 Speaker 1: not communication going on, things can really get broken. And 67 00:03:25,000 --> 00:03:27,320 Speaker 1: I don't care whether we're talking about the husband or 68 00:03:27,320 --> 00:03:32,040 Speaker 1: the wife or what have you. You know, I'll pick on. 69 00:03:32,480 --> 00:03:35,000 Speaker 1: I'll go back to many meetings that I've had where 70 00:03:35,120 --> 00:03:38,440 Speaker 1: in this case the wife has not wanted to be 71 00:03:38,520 --> 00:03:41,480 Speaker 1: super super involved in all the details, but I could 72 00:03:41,520 --> 00:03:45,120 Speaker 1: tell you what she knows. She knows exactly how she 73 00:03:45,200 --> 00:03:49,640 Speaker 1: wants to answer the real important questions. And you got 74 00:03:49,680 --> 00:03:51,800 Speaker 1: to have her in the room and listen to her 75 00:03:52,160 --> 00:03:54,680 Speaker 1: and make sure she understands. You know, the phrase I 76 00:03:54,800 --> 00:03:57,480 Speaker 1: like to use is a lot of people don't They 77 00:03:57,520 --> 00:03:59,640 Speaker 1: don't care how if you open up the back of 78 00:03:59,680 --> 00:04:02,560 Speaker 1: the tea. They don't care how the TV works, but 79 00:04:02,600 --> 00:04:05,560 Speaker 1: they darn sure know how the remote control works. And 80 00:04:05,600 --> 00:04:09,680 Speaker 1: the advisors better explain to both spouses, and both spouses 81 00:04:09,760 --> 00:04:12,080 Speaker 1: need to be involved because there will come a day 82 00:04:12,200 --> 00:04:15,720 Speaker 1: where there's just one of them left and now you're 83 00:04:15,800 --> 00:04:19,080 Speaker 1: left to really answer the question, did we have a 84 00:04:19,120 --> 00:04:23,599 Speaker 1: financial plan that's going to carry this family through, you know, 85 00:04:24,080 --> 00:04:26,240 Speaker 1: through both spouses into the next generation. 86 00:04:26,440 --> 00:04:28,000 Speaker 2: Yeah, and I think it's fine for there to be 87 00:04:28,040 --> 00:04:31,080 Speaker 2: a separation of duties because if everybody is neck deep 88 00:04:31,120 --> 00:04:33,080 Speaker 2: in all the decisions, then nothing's going to get done. 89 00:04:33,400 --> 00:04:36,599 Speaker 2: So but we can't have a situation where one side 90 00:04:36,640 --> 00:04:39,680 Speaker 2: has absolutely no clue what's happening. And yeah, and you're right, 91 00:04:39,880 --> 00:04:42,599 Speaker 2: it goes both ways these days, but they're they're very 92 00:04:42,640 --> 00:04:44,680 Speaker 2: frequently there is one spouse who knows more than the 93 00:04:44,680 --> 00:04:47,480 Speaker 2: other because they've done the heavy lifting and the other 94 00:04:47,520 --> 00:04:50,440 Speaker 2: spouses and arm's length away. But I still want to 95 00:04:50,480 --> 00:04:52,640 Speaker 2: see both of them, you know, at a minimum for 96 00:04:52,680 --> 00:04:54,800 Speaker 2: an annual review, just so everybody can kind of see 97 00:04:54,839 --> 00:04:57,719 Speaker 2: the big picture and so nobody is surprised by anything 98 00:04:57,720 --> 00:05:00,400 Speaker 2: that might come up. So absolutely we move on to 99 00:05:00,440 --> 00:05:04,320 Speaker 2: a different another example here, this is the silent retirement gap, 100 00:05:04,360 --> 00:05:07,040 Speaker 2: a little different situation. Mark and Jennifer there in their 101 00:05:07,040 --> 00:05:09,960 Speaker 2: early fifties, maybe four million dollars or so. Mark wants 102 00:05:09,960 --> 00:05:12,960 Speaker 2: to retire at fifty eight. Jennifer is assuming he's gonna 103 00:05:12,960 --> 00:05:15,640 Speaker 2: work until sixty five. But they've so obviously we're not 104 00:05:15,680 --> 00:05:19,560 Speaker 2: having these dinner table conversations Apparently they've never actually modeled 105 00:05:19,560 --> 00:05:21,320 Speaker 2: it together. And that's a pretty wide gap between what 106 00:05:21,440 --> 00:05:23,359 Speaker 2: one person wants to do and what the other person 107 00:05:23,360 --> 00:05:26,320 Speaker 2: thinks is gonna happen. So Mark is running these Monte 108 00:05:26,400 --> 00:05:28,880 Speaker 2: Carlo simulations in his head. That's the kind of thing 109 00:05:28,920 --> 00:05:32,160 Speaker 2: where we determine all that what somebody's resources are, what 110 00:05:32,200 --> 00:05:33,760 Speaker 2: their goals are, what they need to do with it, 111 00:05:34,120 --> 00:05:36,560 Speaker 2: and taking into account the ups and downs of the market, 112 00:05:36,600 --> 00:05:39,240 Speaker 2: because that's the one element we really can't control, and 113 00:05:39,240 --> 00:05:41,919 Speaker 2: then figuring out what's the like the statistical likelihood of 114 00:05:41,920 --> 00:05:44,440 Speaker 2: financial success. That's what Monte Carlo is and that's what 115 00:05:44,480 --> 00:05:47,360 Speaker 2: Mark's been doing. So Jennifer is thinking about She's fixated 116 00:05:47,440 --> 00:05:50,719 Speaker 2: on college tuition for their youngest. He thinks they're financially 117 00:05:50,760 --> 00:05:53,680 Speaker 2: independent already, she thinks they're still building. Sounds like we've 118 00:05:53,720 --> 00:05:56,200 Speaker 2: got a disagreement in terms of what the goals really are. 119 00:05:56,480 --> 00:05:58,960 Speaker 2: They've never defined what that future really looks like. This 120 00:05:59,040 --> 00:06:01,520 Speaker 2: is the that's the we're fine problem. We've never you know, 121 00:06:01,720 --> 00:06:03,720 Speaker 2: it's fine, we don't have any problems right now. Therefore 122 00:06:03,720 --> 00:06:07,880 Speaker 2: everything must be okay. And so financial misalignment rarely explodes 123 00:06:07,960 --> 00:06:11,640 Speaker 2: loudly in these cases. It just drifts quietly until at 124 00:06:11,640 --> 00:06:13,800 Speaker 2: some point they'll realize that they're just playing, not on 125 00:06:13,839 --> 00:06:15,640 Speaker 2: the same page, and that can be a bumpy ride 126 00:06:15,800 --> 00:06:16,679 Speaker 2: when that time comes. 127 00:06:17,320 --> 00:06:19,479 Speaker 1: Brian, I've seen this one happen a few times too. 128 00:06:19,560 --> 00:06:24,039 Speaker 1: I mean, look, if Jennifer has a seven year difference 129 00:06:24,040 --> 00:06:27,479 Speaker 1: in assumptions on when her husband's going to retire, that's 130 00:06:27,480 --> 00:06:31,719 Speaker 1: not a Monte Carlos simulation problem. That's a communication problem again, 131 00:06:32,120 --> 00:06:35,680 Speaker 1: getting people in the same room talking about goals. And 132 00:06:36,080 --> 00:06:38,160 Speaker 1: I just have to hazard a guess here. If Mark 133 00:06:38,240 --> 00:06:41,479 Speaker 1: is running Monte Carlos simulations in his head, he is 134 00:06:41,520 --> 00:06:46,120 Speaker 1: trying to rationalize how he can retire asap he's done, 135 00:06:46,320 --> 00:06:50,240 Speaker 1: he wants out. Jennifer's probably thinking, hey, what about paying 136 00:06:50,279 --> 00:06:54,120 Speaker 1: for our kids college education? Perhaps Mark, Mark in the 137 00:06:54,120 --> 00:06:57,000 Speaker 1: back of his mind is like, yeah, that'll all work out. 138 00:06:57,040 --> 00:06:59,240 Speaker 1: I can't wait to get on the golf course and 139 00:06:59,279 --> 00:07:03,159 Speaker 1: stop working. So again, it comes down to communication and 140 00:07:03,240 --> 00:07:06,720 Speaker 1: having a realistic plan. And that's really kind of the 141 00:07:06,720 --> 00:07:10,640 Speaker 1: theme of this whole segment is spouse is communicating in advance, 142 00:07:11,120 --> 00:07:15,120 Speaker 1: building a plan together, and you know we're appropriate using 143 00:07:15,160 --> 00:07:19,040 Speaker 1: an advisor or set of advisors to have an objective 144 00:07:19,440 --> 00:07:21,520 Speaker 1: second or third set of eyes on this thing, to 145 00:07:21,600 --> 00:07:25,480 Speaker 1: make sure people are making rational decisions before they just 146 00:07:25,800 --> 00:07:30,119 Speaker 1: pull the ripcord and hope it works out because after all, 147 00:07:30,240 --> 00:07:30,800 Speaker 1: we're fine. 148 00:07:32,040 --> 00:07:35,360 Speaker 2: Yeah, and again, the running theme here is that assumption 149 00:07:35,440 --> 00:07:37,960 Speaker 2: that everything is okay. Because there's nothing burning down in 150 00:07:38,000 --> 00:07:41,080 Speaker 2: front of my face, everything must be okay. So let's 151 00:07:41,080 --> 00:07:43,400 Speaker 2: look at another a third example here. This is David 152 00:07:43,440 --> 00:07:46,160 Speaker 2: and Karen about nine million dollars a little more money 153 00:07:46,200 --> 00:07:48,280 Speaker 2: to work with, and they've got two adult children, one 154 00:07:48,320 --> 00:07:50,760 Speaker 2: of them financially responsible, the other one, Yeah, maybe not 155 00:07:50,800 --> 00:07:54,120 Speaker 2: so much. This is this is less not all that uncommon. 156 00:07:54,800 --> 00:07:57,400 Speaker 2: They have estate documents that were drafted twelve years ago, 157 00:07:57,960 --> 00:08:01,360 Speaker 2: but there weren't any trust provisions updated. They haven't talked 158 00:08:01,400 --> 00:08:03,960 Speaker 2: with the kids about anything. Karen is simply assuming an 159 00:08:03,960 --> 00:08:08,360 Speaker 2: equal inheritance, and David is probably thinking that the struggling 160 00:08:08,440 --> 00:08:11,840 Speaker 2: child should start to receive money over time, meaning while 161 00:08:11,920 --> 00:08:14,080 Speaker 2: David and Karen are still around, not after death. They've 162 00:08:14,120 --> 00:08:17,280 Speaker 2: never talked about this. Clearly, they each clearly have very 163 00:08:17,320 --> 00:08:20,239 Speaker 2: different goals for their children. Now, imagine if something happens 164 00:08:20,320 --> 00:08:24,520 Speaker 2: unexpectedly and the whole family is grieving, and simultaneously they 165 00:08:24,840 --> 00:08:29,440 Speaker 2: realize that Karen realizes that structural inequality that she didn't understand. 166 00:08:29,680 --> 00:08:33,480 Speaker 2: This is how wealth fractures families because there was no provision, 167 00:08:33,480 --> 00:08:36,680 Speaker 2: of course, for a trust where that that struggling child 168 00:08:36,760 --> 00:08:39,840 Speaker 2: was going to receive distributions a little more ongoing, and 169 00:08:39,960 --> 00:08:42,880 Speaker 2: that other child was going to receive their distribution right 170 00:08:42,960 --> 00:08:45,559 Speaker 2: up front. And again, this usually starts with we're fine, 171 00:08:45,600 --> 00:08:47,720 Speaker 2: everything's great. We'll worry about all that stuff later until 172 00:08:47,720 --> 00:08:50,920 Speaker 2: somebody gets hit by a bus. Then it all comes out. 173 00:08:51,240 --> 00:08:54,160 Speaker 1: Yeah, and we can think we're fine because on paper 174 00:08:54,280 --> 00:08:57,080 Speaker 1: we're worth nine million dollars. But if you just follow 175 00:08:57,200 --> 00:09:00,480 Speaker 1: the scenario you just described to pay heading on what 176 00:09:00,640 --> 00:09:04,720 Speaker 1: the communication or lack thereof is between spouses and between 177 00:09:04,760 --> 00:09:07,280 Speaker 1: both spouses and the kids. And if kids start to 178 00:09:07,280 --> 00:09:11,920 Speaker 1: get treated unequally, that nine million dollars means nothing, you know, 179 00:09:12,040 --> 00:09:16,680 Speaker 1: if it results in absolute discord among the spouses and 180 00:09:16,720 --> 00:09:20,880 Speaker 1: you get family division, which can really linger in, fester 181 00:09:21,200 --> 00:09:24,320 Speaker 1: and become a problem down the road. And again, you know, 182 00:09:24,480 --> 00:09:28,880 Speaker 1: most people I know would would trade nine million dollars 183 00:09:28,920 --> 00:09:31,920 Speaker 1: and reduce that to three million dollars if they knew 184 00:09:31,920 --> 00:09:34,400 Speaker 1: their family was all going to get along. And this 185 00:09:34,559 --> 00:09:37,320 Speaker 1: money was deployed in a way that brings peace and 186 00:09:37,360 --> 00:09:40,040 Speaker 1: harmony to the family, and everybody know who's where they 187 00:09:40,080 --> 00:09:43,240 Speaker 1: stand and how it's going to work. Again, it comes 188 00:09:43,320 --> 00:09:47,319 Speaker 1: down to that big C word, communication for sure. For sure. 189 00:09:47,440 --> 00:09:49,080 Speaker 2: So let's kind of let's step back a little bit 190 00:09:49,120 --> 00:09:52,120 Speaker 2: and look at the high the high level of all this. So, 191 00:09:52,400 --> 00:09:54,640 Speaker 2: you know, why does this happen more often to the 192 00:09:54,679 --> 00:09:57,720 Speaker 2: high net worth couples? You know, the irony here is 193 00:09:57,720 --> 00:09:59,679 Speaker 2: the more we have, the easier it is to hide 194 00:09:59,720 --> 00:10:04,040 Speaker 2: behind this whole were fine thing. So and this becomes emotional, right, 195 00:10:04,080 --> 00:10:05,600 Speaker 2: So for a lot of couples, we have to get 196 00:10:05,640 --> 00:10:08,000 Speaker 2: to a point where one spouse becomes the CFO, the 197 00:10:09,160 --> 00:10:11,439 Speaker 2: chief financial officer for the company, and the other is 198 00:10:11,480 --> 00:10:14,240 Speaker 2: the chief operating officer. That division works right up until 199 00:10:14,240 --> 00:10:16,400 Speaker 2: it doesn't because nobody's sitting on top of the entire 200 00:10:16,440 --> 00:10:19,240 Speaker 2: pile making all the decisions. And sometimes two couples can 201 00:10:19,280 --> 00:10:21,480 Speaker 2: do that, sometimes they can't. But that CFO and the 202 00:10:21,480 --> 00:10:25,560 Speaker 2: COO don't necessarily have to meet ever to make things work, 203 00:10:25,600 --> 00:10:27,559 Speaker 2: So it can be a little bumpy when the communication 204 00:10:27,600 --> 00:10:28,880 Speaker 2: isn't actually occurring the right way. 205 00:10:30,240 --> 00:10:31,920 Speaker 1: Yeah, and I think we've kind of already beaten that 206 00:10:31,960 --> 00:10:34,440 Speaker 1: one to death. You know, the question we have to 207 00:10:34,480 --> 00:10:38,360 Speaker 1: always ask ourselves, you know, if we're being responsible and 208 00:10:38,480 --> 00:10:42,840 Speaker 1: not selfish with our money, is what if something happens 209 00:10:42,880 --> 00:10:47,600 Speaker 1: to me today tonight? What happens? Who's going to run 210 00:10:47,640 --> 00:10:50,640 Speaker 1: this plan? Who's going to make sure it works? Have 211 00:10:50,760 --> 00:10:54,360 Speaker 1: I communicated effectively with everyone that needs to be involved? 212 00:10:54,600 --> 00:10:57,840 Speaker 1: Does my spouse even know who to call, who to contact, 213 00:10:57,880 --> 00:11:00,520 Speaker 1: who to work with? That's the question, and we all 214 00:11:00,520 --> 00:11:03,040 Speaker 1: have to ask or not to over complicate this at all. 215 00:11:03,120 --> 00:11:06,880 Speaker 1: It's a simple question, what if something happens to me tonight, 216 00:11:07,280 --> 00:11:09,560 Speaker 1: are all our ducks in a row? And are all 217 00:11:09,640 --> 00:11:12,920 Speaker 1: my Have all my loved ones been communicated with? That's 218 00:11:13,000 --> 00:11:14,240 Speaker 1: really the question to ask. 219 00:11:14,720 --> 00:11:17,360 Speaker 2: Yeah, and so I think it's it's it's time to 220 00:11:17,440 --> 00:11:19,880 Speaker 2: overdue for a sit down with a spouse and make 221 00:11:19,920 --> 00:11:22,440 Speaker 2: sure to ask those questions and just just make sure 222 00:11:22,480 --> 00:11:24,480 Speaker 2: everybody have an opinion. This is this is one to 223 00:11:24,520 --> 00:11:26,520 Speaker 2: carve out some time for. If you recognize yourself in 224 00:11:26,559 --> 00:11:29,079 Speaker 2: any of these descriptions, find some time and ask these 225 00:11:29,080 --> 00:11:31,800 Speaker 2: blunt questions and look each other in the eye when 226 00:11:31,800 --> 00:11:33,679 Speaker 2: you're answering, not while you're doing the dishes. Not while 227 00:11:33,679 --> 00:11:36,120 Speaker 2: you're doing other things, and just make sure you know 228 00:11:36,240 --> 00:11:38,560 Speaker 2: exactly where the situation is for each of you, what 229 00:11:38,600 --> 00:11:40,559 Speaker 2: your what your dreams are for, what you want out 230 00:11:40,559 --> 00:11:42,880 Speaker 2: of all this, and be clear with with with what 231 00:11:42,960 --> 00:11:43,760 Speaker 2: needs to happen next. 232 00:11:44,559 --> 00:11:47,160 Speaker 1: Yeah, I think the last one you know along with that, Brian, 233 00:11:47,440 --> 00:11:49,840 Speaker 1: is you know as the net work grows. I think 234 00:11:50,000 --> 00:11:53,360 Speaker 1: another important question to look each other in the eye 235 00:11:53,360 --> 00:11:56,400 Speaker 1: and answer is what is all this money actually for? 236 00:11:56,679 --> 00:12:00,679 Speaker 1: Meaning what is our annual spending profile look like? How 237 00:12:00,760 --> 00:12:03,760 Speaker 1: much travel are we or not? Are we not going 238 00:12:03,840 --> 00:12:06,120 Speaker 1: to do? Do we want to give to kids during 239 00:12:06,160 --> 00:12:10,319 Speaker 1: our lifetime or not? What are our charitable goals? Are 240 00:12:10,360 --> 00:12:14,240 Speaker 1: we staying in Cincinnati or northern Kentucky or planning on relocating? 241 00:12:14,720 --> 00:12:16,720 Speaker 1: You know, you have to ask all those questions in 242 00:12:16,760 --> 00:12:19,559 Speaker 1: advance and maybe sit down and run some numbers again, 243 00:12:19,679 --> 00:12:22,760 Speaker 1: not just assuming that it's all going to work out. 244 00:12:23,400 --> 00:12:26,400 Speaker 1: Here's the all Worth advice. Love your spouse and your 245 00:12:26,440 --> 00:12:31,560 Speaker 1: family enough to make them your financial equal because we're fine. 246 00:12:32,160 --> 00:12:36,040 Speaker 1: Is not a financial plan coming up? Next? Y? A 247 00:12:36,160 --> 00:12:40,559 Speaker 1: single withdrawal rate isn't enough in most circumstances, and what 248 00:12:40,640 --> 00:12:43,640 Speaker 1: to do instead? You're listening to Simply Money presented by 249 00:12:43,640 --> 00:12:47,000 Speaker 1: All Word Financial on fifty five KRC, the talk station. 250 00:12:52,760 --> 00:12:55,319 Speaker 1: You're listening to Simply Money, presented by Allward Financial on 251 00:12:55,440 --> 00:12:58,680 Speaker 1: Bob's fonseller along with Brian James. Hey, if you can't 252 00:12:58,679 --> 00:13:02,280 Speaker 1: listen to Simply Money every night subscribing to get our 253 00:13:02,360 --> 00:13:06,000 Speaker 1: daily podcasts, just search Simply Money on the iHeart app 254 00:13:06,559 --> 00:13:11,080 Speaker 1: or wherever you find your podcast. Can you split retirement 255 00:13:11,200 --> 00:13:15,079 Speaker 1: into a must pay column and a nice to have column? 256 00:13:15,280 --> 00:13:19,680 Speaker 1: Plus how small assumption tweaks in your plan can wrik 257 00:13:19,760 --> 00:13:22,720 Speaker 1: your plan or actually make it work better? And the 258 00:13:22,800 --> 00:13:26,320 Speaker 1: real way to compare with drawl strategies. All of that 259 00:13:26,440 --> 00:13:28,720 Speaker 1: and more coming up straight ahead at six forty three. 260 00:13:29,720 --> 00:13:32,360 Speaker 1: One of the most common questions we hear from people 261 00:13:32,440 --> 00:13:38,560 Speaker 1: approaching or living in retirement is deceptively simple. How much 262 00:13:38,600 --> 00:13:43,160 Speaker 1: can I safely withdraw each year? Simple question? But it 263 00:13:43,200 --> 00:13:46,720 Speaker 1: can sometimes be a complicated answer. Brian, let's get into 264 00:13:46,760 --> 00:13:48,400 Speaker 1: what we mean by that, all right? 265 00:13:48,440 --> 00:13:50,760 Speaker 2: Well, with raw rates shouldn't be something to be carved 266 00:13:50,800 --> 00:13:53,320 Speaker 2: in stone. It's just a starting point. It's not a promise, 267 00:13:53,360 --> 00:13:55,679 Speaker 2: certainly not a guarantee. It's just a roughly what can 268 00:13:55,720 --> 00:13:57,760 Speaker 2: I expect? How much can I expect to pull out 269 00:13:57,800 --> 00:13:59,640 Speaker 2: of my portfolio and not have to worry about run 270 00:13:59,760 --> 00:14:02,120 Speaker 2: out of money? So most people at this point have 271 00:14:02,200 --> 00:14:04,199 Speaker 2: heard of the four percent rule, and that came from 272 00:14:04,200 --> 00:14:08,559 Speaker 2: a study that was done over thirty year periods, basically saying, 273 00:14:08,559 --> 00:14:11,760 Speaker 2: what percentage, you know, encompassing actual, real historical data, what 274 00:14:11,840 --> 00:14:14,840 Speaker 2: percentage could I have pulled out over every thirty year period, 275 00:14:14,880 --> 00:14:17,160 Speaker 2: going back to I believe in the nineteen thirties, what can 276 00:14:17,200 --> 00:14:20,600 Speaker 2: I pull out and still be okay, you know, not 277 00:14:20,680 --> 00:14:22,160 Speaker 2: running out of money? And the answer to that was 278 00:14:22,200 --> 00:14:24,240 Speaker 2: four percent. So the whole idea is that you if 279 00:14:24,280 --> 00:14:27,160 Speaker 2: you withdraw roughly four percent of your portfolio each year, 280 00:14:27,200 --> 00:14:30,360 Speaker 2: adjusted for inflation, your money has a reasonable chance of 281 00:14:30,440 --> 00:14:33,800 Speaker 2: lasting through retirement because historically that's what would have worked. So, 282 00:14:34,120 --> 00:14:37,120 Speaker 2: if used properly, a withdrawal rate is a planning tool. 283 00:14:37,120 --> 00:14:39,200 Speaker 2: It gives you somewhere to start so you can understand 284 00:14:39,200 --> 00:14:41,120 Speaker 2: what might be coming in, and then you can you 285 00:14:41,160 --> 00:14:44,160 Speaker 2: can kind of budget out with your other sources of income, 286 00:14:44,320 --> 00:14:47,360 Speaker 2: all those spending goals that you have. However, used improperly, 287 00:14:47,480 --> 00:14:50,160 Speaker 2: becomes a false sense of security. For example, let's say 288 00:14:50,160 --> 00:14:52,880 Speaker 2: somebody is convinced that they need to, you know that 289 00:14:52,880 --> 00:14:54,680 Speaker 2: they want to keep all their money liquid and nice 290 00:14:54,680 --> 00:14:56,160 Speaker 2: and safe in the bank, and they get an average 291 00:14:56,160 --> 00:14:57,960 Speaker 2: of maybe two percent a rate of return, well, and 292 00:14:58,000 --> 00:14:59,360 Speaker 2: all of a sudden, the four percent rule is not 293 00:14:59,360 --> 00:15:01,560 Speaker 2: necessarily going to because the rate of return is not 294 00:15:01,560 --> 00:15:04,600 Speaker 2: going to keep up with it. Nobody actually retires into 295 00:15:04,680 --> 00:15:07,280 Speaker 2: an average market, right. We always talk about the average 296 00:15:07,360 --> 00:15:09,240 Speaker 2: rates of return on the stock market and six to 297 00:15:09,280 --> 00:15:12,840 Speaker 2: eight percent, but that that, of course doesn't happen. Returns 298 00:15:12,880 --> 00:15:15,960 Speaker 2: are uneven. That is the sequence of returns risk, meaning 299 00:15:16,000 --> 00:15:18,080 Speaker 2: when do the bad times happen. If they happen early 300 00:15:18,120 --> 00:15:20,960 Speaker 2: in retirement, that's gonna have a significant impact on my 301 00:15:21,040 --> 00:15:24,080 Speaker 2: financial stability. If it happens later in retirement, that's no fun, 302 00:15:24,120 --> 00:15:26,600 Speaker 2: but it probably has less of an impact. And you 303 00:15:26,600 --> 00:15:28,920 Speaker 2: don't think about anybody who retired in twenty twenty one 304 00:15:29,400 --> 00:15:32,240 Speaker 2: and was immediately smacked in the face with the twenty 305 00:15:32,280 --> 00:15:34,160 Speaker 2: twenty two market, which was one of the five worst 306 00:15:34,160 --> 00:15:36,640 Speaker 2: market years we ever had. So these are the things 307 00:15:36,680 --> 00:15:40,400 Speaker 2: that need to be planned for. Withdrawal rate. That withdrawal 308 00:15:40,440 --> 00:15:42,760 Speaker 2: rate of four percent, that's a good thing to think about. 309 00:15:42,800 --> 00:15:44,840 Speaker 2: It's a good framework to build off of, but then 310 00:15:44,840 --> 00:15:46,360 Speaker 2: on top of that you need to layer some other 311 00:15:46,400 --> 00:15:48,560 Speaker 2: stress testing, such as, what does it all look like 312 00:15:48,600 --> 00:15:50,880 Speaker 2: if I lose a chunk right up front early in retirement, 313 00:15:50,920 --> 00:15:51,440 Speaker 2: for example. 314 00:15:52,400 --> 00:15:54,960 Speaker 1: Yeah, and that four percent you know rule, just going 315 00:15:55,000 --> 00:15:58,000 Speaker 1: back on how that was likely established. I mean, you're 316 00:15:58,000 --> 00:16:01,320 Speaker 1: taking a certain rate of return, you factoring in taxes, 317 00:16:01,560 --> 00:16:04,920 Speaker 1: you're factoring in inflation, and you're saying, hey, this is 318 00:16:04,960 --> 00:16:07,880 Speaker 1: what you can withdraw if you're getting a gross return 319 00:16:08,000 --> 00:16:10,080 Speaker 1: of say seven to seven and a half percent on 320 00:16:10,120 --> 00:16:11,920 Speaker 1: your money. But to the point you've already made, not 321 00:16:12,000 --> 00:16:15,160 Speaker 1: everybody wants to invest, you know, all of their money 322 00:16:15,520 --> 00:16:19,280 Speaker 1: with a risk exposure necessary to get a gross seven 323 00:16:19,320 --> 00:16:21,400 Speaker 1: to eight percent on their money. So that gets into 324 00:16:21,440 --> 00:16:23,880 Speaker 1: what we're going to get into tonight is kind of 325 00:16:23,880 --> 00:16:27,560 Speaker 1: more of a bucket approach or segregating your money into 326 00:16:27,560 --> 00:16:30,680 Speaker 1: certain pots based on what your money needs to do 327 00:16:30,760 --> 00:16:33,720 Speaker 1: for you and when. So let's get into that. And 328 00:16:34,040 --> 00:16:36,960 Speaker 1: we talk about this often with clients, Brian, that you know, 329 00:16:37,000 --> 00:16:40,120 Speaker 1: this bucket approach, the money that is there to take 330 00:16:40,160 --> 00:16:43,320 Speaker 1: care of things from say today through the next two years. 331 00:16:43,800 --> 00:16:46,360 Speaker 1: You know this will help you cushion the blow of 332 00:16:46,400 --> 00:16:48,880 Speaker 1: any short term market volatilty. And this is where you 333 00:16:48,920 --> 00:16:52,680 Speaker 1: want to use some cash, cash equivalents, treasury bills, money markets, 334 00:16:52,760 --> 00:16:55,840 Speaker 1: things that you can get to on a liquid basis, 335 00:16:56,040 --> 00:16:58,880 Speaker 1: very short term that are not going to be very volatile, 336 00:16:59,320 --> 00:17:01,520 Speaker 1: and then you can dage some money out into say 337 00:17:01,560 --> 00:17:03,920 Speaker 1: a three to five year bucket, you know. And this 338 00:17:03,960 --> 00:17:06,200 Speaker 1: is where we'll add some bonds, maybe a little bit 339 00:17:06,200 --> 00:17:10,399 Speaker 1: of stocks, again cushioning the volatility in the short term, 340 00:17:10,880 --> 00:17:14,040 Speaker 1: but giving us enough return to you know, have our 341 00:17:14,080 --> 00:17:18,040 Speaker 1: money hopefully outturned taxes and inflation. And then you've got 342 00:17:18,040 --> 00:17:21,400 Speaker 1: those six to ten year or ten year and beyond buckets, 343 00:17:21,600 --> 00:17:24,080 Speaker 1: the longer term money. We're even in a short term 344 00:17:24,119 --> 00:17:27,680 Speaker 1: market decline, we're not going to use those buckets from 345 00:17:27,680 --> 00:17:31,600 Speaker 1: which to generate monthly cash flow. Therefore, it can ride 346 00:17:31,600 --> 00:17:35,800 Speaker 1: out short term market volatility and stay fully invested to 347 00:17:35,880 --> 00:17:39,080 Speaker 1: take advantage of what the stock market historically has always 348 00:17:39,119 --> 00:17:42,600 Speaker 1: given us on every average, you know, seven to ten 349 00:17:42,680 --> 00:17:45,880 Speaker 1: year holding period, you know, going back to the early twenties. 350 00:17:45,920 --> 00:17:47,639 Speaker 1: That's kind of what we're talking about here. 351 00:17:47,840 --> 00:17:50,240 Speaker 2: Right, So let's let's throw some risk into that. So 352 00:17:50,560 --> 00:17:52,720 Speaker 2: let's say we've got this bucket strategy going, and now 353 00:17:52,760 --> 00:17:54,879 Speaker 2: we have a twenty percent market drop. So if I 354 00:17:54,880 --> 00:17:57,040 Speaker 2: had a million bucks with a four percent withdraw rate, 355 00:17:57,080 --> 00:17:59,400 Speaker 2: that means I'm pulling out forty thousand dollars a year 356 00:17:59,440 --> 00:18:01,879 Speaker 2: just to pay my bills. And now let's assume that 357 00:18:01,920 --> 00:18:03,560 Speaker 2: we lose that twenty percent and we got eight hundred 358 00:18:03,600 --> 00:18:07,240 Speaker 2: thousand dollars left, So that same forty thousand dollars withdrawal 359 00:18:07,280 --> 00:18:09,959 Speaker 2: is now a five percent withdrawal rate on the reduced balance. 360 00:18:09,960 --> 00:18:12,840 Speaker 2: That doesn't sound dramatic, but compounding works both ways. 361 00:18:12,920 --> 00:18:13,120 Speaker 1: Right. 362 00:18:13,280 --> 00:18:15,760 Speaker 2: We talk about that snowball effect on the way up, 363 00:18:15,760 --> 00:18:18,399 Speaker 2: but it also happens on the way down. Higher withdrawals 364 00:18:18,400 --> 00:18:21,240 Speaker 2: from a lower brace lower base increase the risk of 365 00:18:21,280 --> 00:18:23,919 Speaker 2: a long term shortfall. So here's how the bucket will 366 00:18:23,960 --> 00:18:26,240 Speaker 2: help that. If you have two years worth of income, 367 00:18:26,320 --> 00:18:29,440 Speaker 2: let's say that's eighty thousand dollars sitting in that bucket one, 368 00:18:29,560 --> 00:18:32,080 Speaker 2: that money is largely unaffected by the market drop. Your 369 00:18:32,080 --> 00:18:34,600 Speaker 2: income for the next two years is already funded. You're 370 00:18:34,640 --> 00:18:37,360 Speaker 2: not selling stocks after a twenty percent of client, you're 371 00:18:37,400 --> 00:18:40,680 Speaker 2: buying time. You protected that your first two years worth 372 00:18:40,720 --> 00:18:42,960 Speaker 2: of expenses, they were not impacted by the market. Now, 373 00:18:43,080 --> 00:18:45,000 Speaker 2: of course, the flip side of that was if the 374 00:18:45,040 --> 00:18:47,080 Speaker 2: market goes great guns for those couple of years, Yeah, 375 00:18:47,080 --> 00:18:48,960 Speaker 2: you missed a little bit of return. But what Bob 376 00:18:49,000 --> 00:18:52,080 Speaker 2: and I can tell Dell everyone from experience is that 377 00:18:52,520 --> 00:18:55,959 Speaker 2: missing out on gains is not nearly as painful as 378 00:18:56,040 --> 00:18:57,960 Speaker 2: losing money you were going to need in the short run. 379 00:18:58,000 --> 00:19:00,520 Speaker 2: People get much more upset about no, they need to 380 00:19:00,520 --> 00:19:02,760 Speaker 2: pay a bill, but their accounts came down. So that's 381 00:19:02,760 --> 00:19:05,200 Speaker 2: why those first couple of buckets are really really important. 382 00:19:06,080 --> 00:19:09,199 Speaker 1: Yeah, and sometimes people are surprised when they see this 383 00:19:09,280 --> 00:19:13,040 Speaker 1: sequence of return scenario actually play out, because, let's face it, 384 00:19:13,080 --> 00:19:15,800 Speaker 1: when we're in the accumulation stage of our life, just 385 00:19:15,840 --> 00:19:18,200 Speaker 1: shoveling money into our four to one k every month, 386 00:19:18,320 --> 00:19:21,760 Speaker 1: we really don't care about short term market volatility because 387 00:19:21,760 --> 00:19:23,960 Speaker 1: we're not going to spend any of the money right now. 388 00:19:24,720 --> 00:19:27,439 Speaker 1: Sometimes people are surprised to see. You know, even if 389 00:19:27,440 --> 00:19:30,199 Speaker 1: you get a seven to eight percent average rate of return, 390 00:19:30,880 --> 00:19:34,399 Speaker 1: if you're pulling money out during periods of market volatility, 391 00:19:34,520 --> 00:19:38,120 Speaker 1: the plant still might not work because of how much 392 00:19:38,119 --> 00:19:40,840 Speaker 1: you're pulling out during down markets. And that's why that 393 00:19:40,880 --> 00:19:44,119 Speaker 1: bucket approach can tend to work much better. Here's the 394 00:19:44,160 --> 00:19:49,119 Speaker 1: all worth advice. Withdrawal rates matter, but portfolio design matters more. 395 00:19:49,560 --> 00:19:53,520 Speaker 1: When those two work together, retirement becomes less about reacting 396 00:19:54,080 --> 00:19:58,320 Speaker 1: and more about just living your life. When does life 397 00:19:58,320 --> 00:20:01,480 Speaker 1: insurance shift from pure per detection to advance planning? And 398 00:20:01,520 --> 00:20:06,640 Speaker 1: how are successful families perhaps misusing their insurance without even 399 00:20:06,680 --> 00:20:10,520 Speaker 1: realizing it? We'll ask our in house expert. Next. You're 400 00:20:10,560 --> 00:20:13,000 Speaker 1: listening to Simply Money presented by all Worth Financial on 401 00:20:13,080 --> 00:20:22,080 Speaker 1: fifty five KRC the talk station. You're listening to Simply 402 00:20:22,119 --> 00:20:25,320 Speaker 1: Money presented by Allworth Financial. I'm Bob Sponseller along with 403 00:20:25,480 --> 00:20:30,000 Speaker 1: Brian James, joined tonight by our in house insurance expert 404 00:20:30,040 --> 00:20:33,879 Speaker 1: here at Allworth, Jody Deutsch. Jody is the director of 405 00:20:33,960 --> 00:20:38,720 Speaker 1: insurance nationally for all Worth Financial and we happen to 406 00:20:38,760 --> 00:20:41,480 Speaker 1: be blessed to have her right here in our Cincinnati 407 00:20:41,600 --> 00:20:45,280 Speaker 1: office and she's sitting right across from me. Jody, thank 408 00:20:45,320 --> 00:20:48,120 Speaker 1: you so much for making time for us tonight, And 409 00:20:48,440 --> 00:20:52,840 Speaker 1: before she starts, I'm just going to say how fortunate 410 00:20:52,840 --> 00:20:54,720 Speaker 1: we are to have her on our team here. She 411 00:20:54,880 --> 00:20:58,120 Speaker 1: has bailed us out of so many situations. She has 412 00:20:58,200 --> 00:21:02,080 Speaker 1: a ton of industry knowledge and does a great job 413 00:21:02,119 --> 00:21:05,199 Speaker 1: in the whole area of insurance. So, Jody, thanks for 414 00:21:05,240 --> 00:21:07,160 Speaker 1: being with us. Let's get into it tonight. We want 415 00:21:07,160 --> 00:21:10,480 Speaker 1: to talk about, you know, when life insurance can shift 416 00:21:10,520 --> 00:21:13,640 Speaker 1: from just protection you know why people bought it years 417 00:21:13,680 --> 00:21:18,120 Speaker 1: and years ago, to using it for more advanced planning strategies. 418 00:21:18,280 --> 00:21:21,199 Speaker 1: Walk us through what some of those scenarios might look like. 419 00:21:22,080 --> 00:21:25,200 Speaker 3: Well, thanks for having me, Bob. I think it's really 420 00:21:25,359 --> 00:21:28,840 Speaker 3: the difference between thinking about I need to have life 421 00:21:28,840 --> 00:21:33,800 Speaker 3: insurance so my family can survive number one, and then 422 00:21:33,920 --> 00:21:37,000 Speaker 3: how does that transition to how do I optimize what 423 00:21:37,040 --> 00:21:40,399 Speaker 3: I leave behind for my family as a legacy for 424 00:21:40,480 --> 00:21:44,960 Speaker 3: a charity, And that happens when you no longer need 425 00:21:45,000 --> 00:21:48,199 Speaker 3: to replace your income. You've funded the things that you 426 00:21:48,240 --> 00:21:52,240 Speaker 3: want to fund. You have an estate that's large enough 427 00:21:52,240 --> 00:21:55,600 Speaker 3: to create some type of tax exposure, whether that's federal 428 00:21:55,640 --> 00:21:59,560 Speaker 3: income tax, federal estate tax. You may have a business 429 00:21:59,560 --> 00:22:01,480 Speaker 3: that you want to leave behind, so there's some type 430 00:22:01,480 --> 00:22:07,040 Speaker 3: of business succession and you want to equalize inheritances. You 431 00:22:07,080 --> 00:22:11,399 Speaker 3: spoke about this earlier. How do you share properly with 432 00:22:11,600 --> 00:22:16,000 Speaker 3: kids when you're living and when you've passed away, and 433 00:22:16,080 --> 00:22:20,080 Speaker 3: possibly with your grandkids and great grandkids, and if you 434 00:22:20,160 --> 00:22:23,080 Speaker 3: have a charitable intent. You need to plan for that 435 00:22:23,600 --> 00:22:26,800 Speaker 3: before you leave this earth so that we can make 436 00:22:26,840 --> 00:22:32,040 Speaker 3: sure to take care of things so the transition at 437 00:22:32,080 --> 00:22:37,080 Speaker 3: your lifetime. Instead of life insurance being protection, it is 438 00:22:37,160 --> 00:22:42,359 Speaker 3: provided to create liquidity, help manage your taxes and become 439 00:22:42,359 --> 00:22:47,760 Speaker 3: a strategy for that, equalize your estate, and ultimately be 440 00:22:47,800 --> 00:22:49,400 Speaker 3: a legacy planning vehicle. 441 00:22:50,480 --> 00:22:54,040 Speaker 2: Jody, can you talk about sometimes where because I think 442 00:22:54,359 --> 00:22:57,840 Speaker 2: frequently what happens is people come in with policies they bought, 443 00:22:57,880 --> 00:23:00,800 Speaker 2: you know, twenty and thirty years ago, and the situations 444 00:23:00,800 --> 00:23:03,159 Speaker 2: has obviously changed. You know, they're sitting in front of us, 445 00:23:03,160 --> 00:23:04,800 Speaker 2: so do not all they didn't die, they didn't need 446 00:23:04,840 --> 00:23:09,199 Speaker 2: the death out of it. But what do you do 447 00:23:09,240 --> 00:23:11,399 Speaker 2: in those cases when people come in saying I've got 448 00:23:11,440 --> 00:23:13,200 Speaker 2: these old policies. It's kind of like I always describe 449 00:23:13,200 --> 00:23:14,399 Speaker 2: it as I have a black and white TV. It 450 00:23:14,440 --> 00:23:16,880 Speaker 2: still shows me TV shows, But maybe there's a better 451 00:23:16,880 --> 00:23:19,600 Speaker 2: solution nowadays. How do you take people through those types 452 00:23:19,600 --> 00:23:20,320 Speaker 2: of situations? 453 00:23:21,200 --> 00:23:24,360 Speaker 3: Brian, That's a great question. We look at how their 454 00:23:24,400 --> 00:23:28,720 Speaker 3: goals have changed and we discuss options for do you 455 00:23:28,800 --> 00:23:31,280 Speaker 3: keep the policy, do you make changes to it, do 456 00:23:31,320 --> 00:23:35,159 Speaker 3: you walk away from it, or do you perhaps reposition 457 00:23:35,280 --> 00:23:37,760 Speaker 3: the cash it's in the policy into a different type 458 00:23:37,760 --> 00:23:41,240 Speaker 3: of policy that might have some long term care benefits. 459 00:23:41,920 --> 00:23:45,440 Speaker 3: Every policy is different, every client is different, but there 460 00:23:45,480 --> 00:23:48,560 Speaker 3: are options. The key piece is to take the time 461 00:23:48,720 --> 00:23:53,159 Speaker 3: to review the policy and do the analysis instead of 462 00:23:53,200 --> 00:23:56,960 Speaker 3: ignoring it and just waiting for it to pay out 463 00:23:57,000 --> 00:23:59,600 Speaker 3: when you die, assuming that it's still in force. 464 00:24:00,640 --> 00:24:02,560 Speaker 1: Jody, correct me if I'm wrong here, But one of 465 00:24:02,560 --> 00:24:06,400 Speaker 1: the major benefits of life insurance is it's tax free. 466 00:24:06,480 --> 00:24:09,400 Speaker 1: The death benefit is tax free, and that opens up 467 00:24:09,440 --> 00:24:13,359 Speaker 1: a ton of planning opportunities. You already kind of listed 468 00:24:13,520 --> 00:24:17,000 Speaker 1: some of them off. If the families, you know, charitable 469 00:24:18,160 --> 00:24:21,159 Speaker 1: inclinations or intentions have changed, or if we need to 470 00:24:21,200 --> 00:24:24,720 Speaker 1: equalize the estate, if shares of a business are going 471 00:24:24,800 --> 00:24:28,240 Speaker 1: to one child and you want to equalize with liquid 472 00:24:28,240 --> 00:24:32,639 Speaker 1: assets to another. Just a simple change of beneficiary on 473 00:24:32,680 --> 00:24:36,960 Speaker 1: an existing life insurance policy that's working really well can 474 00:24:37,080 --> 00:24:41,000 Speaker 1: really balance the scales and help update and overall estate 475 00:24:41,040 --> 00:24:43,360 Speaker 1: plan Am I am? I correct there absolutely. 476 00:24:43,440 --> 00:24:46,200 Speaker 3: I think the insurance is the tool, but we have 477 00:24:46,280 --> 00:24:50,400 Speaker 3: to review how it is coordinated with all the estate planning, 478 00:24:50,800 --> 00:24:55,879 Speaker 3: beneficiary changes, ownership structures. Do you have trust planning because 479 00:24:55,920 --> 00:24:59,800 Speaker 3: you can make changes to an enforced policy to re 480 00:25:00,119 --> 00:25:03,960 Speaker 3: the needs that you are feeling now and that your 481 00:25:03,960 --> 00:25:05,960 Speaker 3: goals are in the future, not just when you bought 482 00:25:05,960 --> 00:25:09,280 Speaker 3: the policy twenty years ago, Jody. 483 00:25:09,480 --> 00:25:11,840 Speaker 2: One thing that comes up frequently when we've got people 484 00:25:11,840 --> 00:25:14,959 Speaker 2: who are considering insurance solutions like what we're describing, some 485 00:25:15,000 --> 00:25:17,639 Speaker 2: people will will you know, they'll say, well, that's a 486 00:25:17,640 --> 00:25:19,840 Speaker 2: great idea, but there's just no way I'm insurable because 487 00:25:19,840 --> 00:25:21,879 Speaker 2: of XYZ. Because they all kind of know their family 488 00:25:21,960 --> 00:25:23,639 Speaker 2: history and those kind of things. Can you talk a 489 00:25:23,680 --> 00:25:25,320 Speaker 2: little bit about the kind of things that are deal 490 00:25:25,359 --> 00:25:27,480 Speaker 2: breakers right away, where we know if you have this 491 00:25:27,600 --> 00:25:30,520 Speaker 2: in your history that you probably shouldn't even bother applying, 492 00:25:30,760 --> 00:25:33,240 Speaker 2: versus things that might surprise you that might seem like 493 00:25:33,280 --> 00:25:35,240 Speaker 2: you should be uninsurable but you still might be able 494 00:25:35,240 --> 00:25:35,600 Speaker 2: to do it. 495 00:25:36,680 --> 00:25:39,760 Speaker 3: Well, that's a good question, Brian, And you've said in 496 00:25:39,880 --> 00:25:42,600 Speaker 3: enough client meetings with me to know we need to 497 00:25:42,680 --> 00:25:46,400 Speaker 3: know the details. If someone is currently going through cancer treatment, 498 00:25:46,760 --> 00:25:49,960 Speaker 3: they're not going to be insurable. We typically need to 499 00:25:50,000 --> 00:25:53,840 Speaker 3: wait until they're clean for five years. But in this 500 00:25:54,040 --> 00:25:56,600 Speaker 3: day and age, there are so many things that you 501 00:25:56,680 --> 00:26:01,960 Speaker 3: might think are uninsurable that are not Parkinson's. For example, 502 00:26:02,440 --> 00:26:05,159 Speaker 3: we just worked with a client who has Parkinson's and 503 00:26:05,280 --> 00:26:07,960 Speaker 3: was able to get him a standard offer, and he 504 00:26:08,400 --> 00:26:11,120 Speaker 3: came to me because he thought he was uninsurable. So 505 00:26:11,440 --> 00:26:14,679 Speaker 3: I think the key is not to make assumptions and 506 00:26:14,760 --> 00:26:17,679 Speaker 3: to ask the questions and to dig a little bit deeper, 507 00:26:17,760 --> 00:26:20,600 Speaker 3: because you may be uninsurable, but we want to try 508 00:26:20,640 --> 00:26:25,080 Speaker 3: to figure out why or what If we wait two years, 509 00:26:25,119 --> 00:26:26,879 Speaker 3: maybe you'll be ensurable at that point. 510 00:26:27,280 --> 00:26:30,439 Speaker 2: So isn't go ahead, Brian, But I was just going 511 00:26:30,480 --> 00:26:33,000 Speaker 2: to ask, is that a difference between insurance companies? In 512 00:26:33,040 --> 00:26:35,840 Speaker 2: other words, your knowledge of the industry. One insurance company 513 00:26:35,920 --> 00:26:38,399 Speaker 2: might treat one risk a different way than another. Is 514 00:26:38,400 --> 00:26:39,920 Speaker 2: that where that's the differences are? 515 00:26:40,520 --> 00:26:43,000 Speaker 3: Yes, there are certain things that every insurance company is 516 00:26:43,040 --> 00:26:45,399 Speaker 3: going to think are uninsurable, but there are other things 517 00:26:45,440 --> 00:26:49,000 Speaker 3: that insurance companies will look at differently. Cancer is one 518 00:26:49,040 --> 00:26:51,480 Speaker 3: of those, Marijuana usage is one of those. 519 00:26:52,520 --> 00:26:54,440 Speaker 1: The way that build. 520 00:26:54,240 --> 00:26:58,359 Speaker 3: Height and weight, different insurance companies handle things differently, and 521 00:26:58,680 --> 00:27:04,560 Speaker 3: understanding the medical history of the client can really help 522 00:27:04,640 --> 00:27:08,640 Speaker 3: to determine what insurance company might be a fit for them. 523 00:27:09,480 --> 00:27:11,800 Speaker 1: Yeah, Brian, you asked the same question I was going 524 00:27:11,880 --> 00:27:14,080 Speaker 1: to ask, and that leads to the point we want 525 00:27:14,119 --> 00:27:18,240 Speaker 1: to make here is it's really important to be working 526 00:27:18,320 --> 00:27:21,720 Speaker 1: with an insurance professional who can go out to fifty 527 00:27:21,840 --> 00:27:25,160 Speaker 1: sixty different companies with no acts to grind, no captive 528 00:27:25,240 --> 00:27:29,200 Speaker 1: agency thing where they can only represent one company, because literally, 529 00:27:30,000 --> 00:27:34,840 Speaker 1: depending on the situation, different insurance companies underwrite these situations differently, 530 00:27:35,000 --> 00:27:36,880 Speaker 1: and you want to have all the tools in your 531 00:27:36,920 --> 00:27:40,080 Speaker 1: quiver here to go out and get the best possible 532 00:27:40,440 --> 00:27:43,800 Speaker 1: underwriting result that you can. We're going to have to 533 00:27:43,880 --> 00:27:46,600 Speaker 1: leave it there tonight, Jody, thanks so much for joining us. 534 00:27:46,840 --> 00:27:49,760 Speaker 1: Can't wait to have you back on future shows. You're 535 00:27:49,800 --> 00:27:52,399 Speaker 1: listening to Simply Money presented by all Worth financi all 536 00:27:52,400 --> 00:28:03,440 Speaker 1: on fifty five KRC the talk station. We're listening with 537 00:28:03,480 --> 00:28:06,360 Speaker 1: Simply Money presented by all Worth Financial on Bob Sponseller 538 00:28:06,400 --> 00:28:09,560 Speaker 1: along with Brian James. Do you have a financial question 539 00:28:09,640 --> 00:28:12,440 Speaker 1: you'd like for us to cover tonight? There is a 540 00:28:12,480 --> 00:28:15,000 Speaker 1: red button you can click while you're listening to the show. 541 00:28:15,080 --> 00:28:17,520 Speaker 1: If you're listening to the show on the iHeart app, 542 00:28:17,600 --> 00:28:21,000 Speaker 1: simply record your question and it will come straight to us. 543 00:28:21,840 --> 00:28:24,920 Speaker 1: Joe in Fort Mitchell leads us off tonight, Brian. He says, 544 00:28:24,920 --> 00:28:27,600 Speaker 1: when you test a portfolio, do you look at maximum 545 00:28:27,640 --> 00:28:31,879 Speaker 1: draw down alone, or do you also look at potential 546 00:28:31,960 --> 00:28:35,760 Speaker 1: time to recovery from a down market, which one matters 547 00:28:35,800 --> 00:28:39,480 Speaker 1: more for a retiree. I love this question. That's a great. 548 00:28:39,320 --> 00:28:41,920 Speaker 2: Question, And obviously Joe likes to get into the nitty 549 00:28:41,960 --> 00:28:44,200 Speaker 2: gritty of how to think about this stuff. And I'm 550 00:28:44,240 --> 00:28:45,920 Speaker 2: glad that Joe has let go of the idea that 551 00:28:45,960 --> 00:28:48,480 Speaker 2: we can control the rates of return by being in 552 00:28:48,520 --> 00:28:50,280 Speaker 2: the right investments at the right time. Now a lot 553 00:28:50,280 --> 00:28:52,120 Speaker 2: of times that's something that people get hung up on. 554 00:28:52,720 --> 00:28:54,880 Speaker 2: But anyway, to answer the question, when we stress test 555 00:28:54,960 --> 00:28:58,000 Speaker 2: or a time reportfolio looking at maximum draw down alone, 556 00:28:58,040 --> 00:28:59,680 Speaker 2: that's not complete, as Joe has already picked up on, 557 00:28:59,720 --> 00:29:02,240 Speaker 2: you gotta pair that with time to recovery because for 558 00:29:02,280 --> 00:29:05,080 Speaker 2: a retiree, that path matters just as much as the 559 00:29:05,080 --> 00:29:08,840 Speaker 2: depth of the return. So historically, let's look at this 560 00:29:09,040 --> 00:29:11,920 Speaker 2: in twenty twenty twenty. Then during the pandemic, we had 561 00:29:11,920 --> 00:29:14,280 Speaker 2: a sharp drop of thirty four percent, but that recovery 562 00:29:14,320 --> 00:29:16,560 Speaker 2: was really fast. You know, we weren't even paying attention 563 00:29:16,600 --> 00:29:19,080 Speaker 2: to it. Most people didn't notice how far the market 564 00:29:19,080 --> 00:29:21,239 Speaker 2: had come down because we were all hiding in our 565 00:29:21,280 --> 00:29:23,400 Speaker 2: basements thinking we were going to die at the very 566 00:29:23,440 --> 00:29:25,440 Speaker 2: early part of that when we all first went home 567 00:29:25,440 --> 00:29:27,640 Speaker 2: from the office, But we had it all back by 568 00:29:27,720 --> 00:29:30,080 Speaker 2: June after the dust kind of settled. Two thousand and 569 00:29:30,080 --> 00:29:32,360 Speaker 2: two thousand and two, that was very, very different. There 570 00:29:32,400 --> 00:29:35,600 Speaker 2: was a much smaller peak to trough downturn than in 571 00:29:35,640 --> 00:29:38,240 Speaker 2: two thousand and eight, but recovery took a lot longer 572 00:29:38,280 --> 00:29:39,040 Speaker 2: to get back out of that. 573 00:29:39,080 --> 00:29:39,240 Speaker 1: One. 574 00:29:39,480 --> 00:29:41,479 Speaker 2: Two thousand and eight we had a very deep draw down, 575 00:29:41,520 --> 00:29:44,040 Speaker 2: almost fifty percent inequities, and it took about four to 576 00:29:44,080 --> 00:29:47,720 Speaker 2: five years to completely recover from that. So yeah, so 577 00:29:47,920 --> 00:29:50,880 Speaker 2: which matters more time to recovery often matters more than 578 00:29:50,920 --> 00:29:55,520 Speaker 2: maximum draw down because longevity for retirees plus withdrawals turned 579 00:29:55,520 --> 00:29:57,840 Speaker 2: that duration into the real threat. So we just want 580 00:29:57,880 --> 00:30:00,600 Speaker 2: to make sure can you tolerate the worst years logically, 581 00:30:00,960 --> 00:30:04,480 Speaker 2: how long are you underwater? And can your spending continue 582 00:30:04,480 --> 00:30:07,160 Speaker 2: without selling equities at distress levels. So the goal is 583 00:30:07,200 --> 00:30:09,600 Speaker 2: not to eliminate these drawdowns, because that would eliminate the 584 00:30:09,600 --> 00:30:12,800 Speaker 2: growth too. That's impossible, right, So the goal is designing 585 00:30:12,840 --> 00:30:15,880 Speaker 2: the portfolio and the withdrawal strategies so that a bad 586 00:30:15,960 --> 00:30:19,600 Speaker 2: sequence doesn't force permanent damage before that recovery has chance 587 00:30:19,680 --> 00:30:22,160 Speaker 2: to complete. So let's move on to Mark and Madeira. 588 00:30:22,160 --> 00:30:24,080 Speaker 2: And Mark is looking at his plan and he says, 589 00:30:24,080 --> 00:30:27,360 Speaker 2: can you separate this plan into must pay expensives and 590 00:30:27,520 --> 00:30:30,440 Speaker 2: nice to haves and model them differently. I want to 591 00:30:30,480 --> 00:30:33,200 Speaker 2: see what happens if only discretionary spending flexes. 592 00:30:34,320 --> 00:30:37,880 Speaker 1: Well, Mark, I think you're approaching this exactly correctly. Good 593 00:30:37,920 --> 00:30:42,000 Speaker 1: for you, And yes, your plan should include exactly what 594 00:30:42,040 --> 00:30:44,800 Speaker 1: you just said. You know, there's the keeping the lights 595 00:30:44,840 --> 00:30:47,840 Speaker 1: on scenario, you know, the must have the things that 596 00:30:47,880 --> 00:30:50,520 Speaker 1: we got to have just to live and function. And 597 00:30:50,560 --> 00:30:52,640 Speaker 1: then a lot of the other things, as you said, 598 00:30:52,760 --> 00:30:56,520 Speaker 1: are discretionary and they can adjust up or down or 599 00:30:56,560 --> 00:31:00,200 Speaker 1: get eliminated all together depending on what happens to the 600 00:31:00,240 --> 00:31:03,800 Speaker 1: economy in the world over time. So yes, your plan 601 00:31:04,000 --> 00:31:06,880 Speaker 1: can take into account and we would argue should take 602 00:31:06,920 --> 00:31:10,600 Speaker 1: into account both of those. And that opens up wonderful 603 00:31:10,680 --> 00:31:14,760 Speaker 1: conversations for you and your wife during reviews with your 604 00:31:14,800 --> 00:31:18,680 Speaker 1: financial advisor, because we literally do exactly what you're talking 605 00:31:18,720 --> 00:31:21,440 Speaker 1: about here. We show you how the plan is working, 606 00:31:21,600 --> 00:31:24,160 Speaker 1: you know, with the must pay stuff and most of 607 00:31:24,200 --> 00:31:27,200 Speaker 1: the time. That's working absolutely fine, and then we can 608 00:31:27,280 --> 00:31:29,800 Speaker 1: shift over to dreaming a little bit. Do we give 609 00:31:29,840 --> 00:31:32,239 Speaker 1: our grandkids a little bit more this year? Do we 610 00:31:32,280 --> 00:31:35,800 Speaker 1: take two cruises instead of one cruise? You know? Do 611 00:31:35,880 --> 00:31:39,720 Speaker 1: we you know, reoutfit the bathroom this year or next year? 612 00:31:39,760 --> 00:31:41,760 Speaker 1: And how much money do we spend? So yep, you're 613 00:31:41,840 --> 00:31:45,200 Speaker 1: you're looking at this exactly right, and it's exactly what 614 00:31:45,240 --> 00:31:47,560 Speaker 1: we do. When people come in to do a review 615 00:31:47,680 --> 00:31:50,560 Speaker 1: of their financial plan. You want to have options and 616 00:31:50,600 --> 00:31:53,120 Speaker 1: you want to know what the guardrails are, you know, 617 00:31:53,280 --> 00:31:56,680 Speaker 1: up or down on your spending. So great question, Mark, 618 00:31:56,800 --> 00:31:59,720 Speaker 1: all right, Ron and Lebanon, He says, I've noticed that 619 00:31:59,720 --> 00:32:03,080 Speaker 1: if we tweak the return or inflation number in our 620 00:32:03,200 --> 00:32:07,400 Speaker 1: Monte Carlo analysis even a little, the success rate changes. 621 00:32:07,640 --> 00:32:10,760 Speaker 1: How do you figure out which assumptions really matter? 622 00:32:10,840 --> 00:32:13,520 Speaker 2: Brian, Well, it sounds like all the cool kids are 623 00:32:13,560 --> 00:32:15,960 Speaker 2: doing Monte Carlo analysis these days. We have the pretty 624 00:32:15,960 --> 00:32:18,680 Speaker 2: common questions now as these tools are getting out there. 625 00:32:18,720 --> 00:32:21,920 Speaker 2: So yeah, that's that's really sharp observation. And it does 626 00:32:21,960 --> 00:32:24,400 Speaker 2: tell you that Monte Carlo can be highly sensitive to 627 00:32:24,400 --> 00:32:26,800 Speaker 2: certain inputs. But so you have to what what what 628 00:32:26,800 --> 00:32:28,440 Speaker 2: you're really getting at of this question is what are 629 00:32:28,440 --> 00:32:32,040 Speaker 2: the things that are cosmetic versus actual structural drivers. Uh, 630 00:32:32,440 --> 00:32:35,000 Speaker 2: it might surprise you what really moves the needle. First 631 00:32:35,000 --> 00:32:37,960 Speaker 2: of all, one of the big things is your real return. 632 00:32:38,000 --> 00:32:39,800 Speaker 2: And I'm not talking about just that return number you're 633 00:32:39,840 --> 00:32:42,840 Speaker 2: plugging in there. Your real return, which is whatever assumption 634 00:32:42,920 --> 00:32:45,800 Speaker 2: you want to use, six seven, eight percent maybe minus inflation. 635 00:32:46,160 --> 00:32:48,880 Speaker 2: So the spread over inflation is what's driving a lot 636 00:32:48,920 --> 00:32:52,080 Speaker 2: of that Monte Carlo analysis because remember those inflation whatever 637 00:32:52,080 --> 00:32:55,400 Speaker 2: factor you're using for inflation, is driving your spending upward. 638 00:32:55,800 --> 00:32:58,400 Speaker 2: And uh and in every the closer that is to 639 00:32:58,440 --> 00:33:01,120 Speaker 2: your rate of return, the less accessful your Monte Carlo 640 00:33:01,160 --> 00:33:02,120 Speaker 2: analysis is going to be. 641 00:33:02,480 --> 00:33:03,600 Speaker 1: The wider that spread is. 642 00:33:03,600 --> 00:33:05,920 Speaker 2: If you have a greater return that is increasing more 643 00:33:06,040 --> 00:33:09,160 Speaker 2: rapidly than the spending, then you're gonna have a much 644 00:33:09,160 --> 00:33:12,960 Speaker 2: better outcome. So also, sequence of returns is also extremely important. 645 00:33:13,280 --> 00:33:15,360 Speaker 2: So what happens in the first five to ten years 646 00:33:15,680 --> 00:33:18,480 Speaker 2: is extremely important, and I'd say much more important than 647 00:33:18,480 --> 00:33:20,680 Speaker 2: what happens in the last five to ten years. So 648 00:33:20,760 --> 00:33:23,920 Speaker 2: if those early returns are weak while withdrawals are high, 649 00:33:24,120 --> 00:33:26,960 Speaker 2: that probability drops quickly, you know, because we have to 650 00:33:27,080 --> 00:33:29,080 Speaker 2: factor in the you know, be honest with yourself. If 651 00:33:29,120 --> 00:33:30,680 Speaker 2: you're somebody who's going to want to hit the road 652 00:33:30,880 --> 00:33:33,120 Speaker 2: and do all those once in a lifetime trips immediately 653 00:33:33,160 --> 00:33:35,800 Speaker 2: after you retire, and that comes along with a less 654 00:33:35,800 --> 00:33:38,800 Speaker 2: than a desirable market that's going to have a significant 655 00:33:38,800 --> 00:33:40,960 Speaker 2: impact on your Monty Carlo results. That doesn't mean don't 656 00:33:40,960 --> 00:33:42,800 Speaker 2: do these things, but this is why we run those 657 00:33:42,840 --> 00:33:45,000 Speaker 2: simulations so that you can make sure that if this 658 00:33:45,080 --> 00:33:48,000 Speaker 2: does happen to you, your plan can withstand any outcomes 659 00:33:48,720 --> 00:33:51,320 Speaker 2: that might happen along the way. All right, so let's 660 00:33:51,360 --> 00:33:53,840 Speaker 2: move on to Robert in Milford. Robert says, when you 661 00:33:53,840 --> 00:33:56,320 Speaker 2: build a guard rail strategy, what are you really anchoring 662 00:33:56,320 --> 00:33:59,800 Speaker 2: it to the portfolio value, the returns, probability or something 663 00:33:59,840 --> 00:34:00,560 Speaker 2: more practical. 664 00:34:00,600 --> 00:34:03,760 Speaker 1: What do you think, Bob, Well, we're throwing a lot 665 00:34:03,800 --> 00:34:06,280 Speaker 1: of around, a lot of terms here, and I think 666 00:34:06,280 --> 00:34:08,399 Speaker 1: we're all talking about kind of the same thing. It's 667 00:34:08,400 --> 00:34:11,040 Speaker 1: a great question, you know from Robert, he's just trying 668 00:34:11,080 --> 00:34:13,600 Speaker 1: to you know, when he talks about guard rails, he's 669 00:34:13,640 --> 00:34:17,040 Speaker 1: trying to stress test his financial plans. So you know, 670 00:34:17,080 --> 00:34:18,960 Speaker 1: when we build a plan, we're looking at a lot 671 00:34:18,960 --> 00:34:21,440 Speaker 1: of different things. I will tell you the most important 672 00:34:21,480 --> 00:34:24,000 Speaker 1: thing or the thing that's going to move your result 673 00:34:24,120 --> 00:34:27,560 Speaker 1: or probability of success the most is how much you spend. 674 00:34:27,920 --> 00:34:31,200 Speaker 1: The other things to consider are the assumed inflation rate, 675 00:34:31,480 --> 00:34:34,759 Speaker 1: the assumed tax rates, and then what you're assumed rate 676 00:34:34,800 --> 00:34:37,080 Speaker 1: of return is going to be for your portfolio. And 677 00:34:37,120 --> 00:34:39,600 Speaker 1: that's based on how much risk you do or do 678 00:34:39,719 --> 00:34:42,520 Speaker 1: not want to take with your portfolio. So, you know, 679 00:34:42,600 --> 00:34:44,680 Speaker 1: I don't know what you mean by guard rails here. 680 00:34:44,760 --> 00:34:47,080 Speaker 1: I think you know you move all those different levels. 681 00:34:47,080 --> 00:34:51,000 Speaker 1: To me, that's what guardrails mean. And I think you know, 682 00:34:51,040 --> 00:34:53,640 Speaker 1: people sometimes want to play the what if game? What 683 00:34:53,719 --> 00:34:57,440 Speaker 1: if I, you know, up upgrade or downgrade my spending? 684 00:34:57,719 --> 00:35:00,319 Speaker 1: What if I take more or less risk if I 685 00:35:00,360 --> 00:35:04,560 Speaker 1: assume the worst from a tax rate standpoint or inflation standpoint. 686 00:35:04,880 --> 00:35:07,759 Speaker 1: And basically everybody's looking for the same thing. You know, 687 00:35:07,880 --> 00:35:12,320 Speaker 1: in my my personal worst case scenario, is my plan 688 00:35:12,440 --> 00:35:16,040 Speaker 1: still gonna work? And more importantly, are you guys building 689 00:35:16,080 --> 00:35:19,520 Speaker 1: a plan to be able to weather whatever storm comes 690 00:35:19,560 --> 00:35:22,680 Speaker 1: down the pike to make sure that plan stays within 691 00:35:22,800 --> 00:35:26,360 Speaker 1: to use your words, Robert, guardrails, And that's what real 692 00:35:26,440 --> 00:35:29,799 Speaker 1: financial planning is all about. So a lot of great 693 00:35:29,880 --> 00:35:33,279 Speaker 1: questions tonight. You know, our listeners are asking the right 694 00:35:33,360 --> 00:35:36,080 Speaker 1: kind of things and that's a good thing to hear 695 00:35:36,120 --> 00:35:38,959 Speaker 1: for us. Brian all right, coming up next, I've got 696 00:35:39,040 --> 00:35:43,160 Speaker 1: my two cents just talking about why perfection is overrated. 697 00:35:43,440 --> 00:35:45,960 Speaker 1: You're listening to Simply Money presented by all Worth Financial 698 00:35:46,000 --> 00:35:54,400 Speaker 1: on fifty five KRC, the talk station. You're listening to 699 00:35:54,400 --> 00:35:57,000 Speaker 1: Simply Money presented by all Worth Financial on Bob spond 700 00:35:57,040 --> 00:36:00,759 Speaker 1: Seller along with Brian James. And I'm going to call 701 00:36:00,800 --> 00:36:04,239 Speaker 1: this segment tonight perfection is overrated. And here's what I 702 00:36:04,280 --> 00:36:07,360 Speaker 1: mean by that. I mean, just from tonight's show alone, 703 00:36:07,400 --> 00:36:10,719 Speaker 1: we've talked about all these different planning scenarios from how 704 00:36:10,719 --> 00:36:13,600 Speaker 1: to use life insurance and we talk all the time 705 00:36:13,719 --> 00:36:17,600 Speaker 1: about you know, social security claiming strategies, when and how 706 00:36:17,600 --> 00:36:20,759 Speaker 1: to do wroth conversions. And the point that I want 707 00:36:20,760 --> 00:36:24,440 Speaker 1: to make here is that your financial plan it's not 708 00:36:24,640 --> 00:36:27,799 Speaker 1: engraved in stone and it can't be simplified down to 709 00:36:27,960 --> 00:36:32,000 Speaker 1: just one thing works right all the time in every situation. 710 00:36:32,640 --> 00:36:35,000 Speaker 1: And the analogy I want to use is just, you know, 711 00:36:35,200 --> 00:36:39,160 Speaker 1: going back to our political environment right now, depending on 712 00:36:39,239 --> 00:36:43,000 Speaker 1: which news source different people look at, they think there's 713 00:36:43,200 --> 00:36:47,320 Speaker 1: one black and white answer to everything, and any difference 714 00:36:47,360 --> 00:36:51,960 Speaker 1: of opinion or different approach is by definition wrong. And 715 00:36:52,200 --> 00:36:54,680 Speaker 1: like with a lot of things in life and financial 716 00:36:54,719 --> 00:36:57,840 Speaker 1: planning included, there are a lot of nuances and you 717 00:36:57,920 --> 00:36:59,880 Speaker 1: got to look at options, you got to look at 718 00:37:00,200 --> 00:37:04,120 Speaker 1: the details behind it, and more importantly, things change. This 719 00:37:04,200 --> 00:37:06,839 Speaker 1: whole retirement thing is a journey. It's kind of like 720 00:37:06,920 --> 00:37:10,319 Speaker 1: going on a three month trip across the country. You 721 00:37:10,440 --> 00:37:13,000 Speaker 1: might have the whole thing planned out before you pull 722 00:37:13,040 --> 00:37:15,960 Speaker 1: out of the driveway, and things can happen. The weather 723 00:37:16,120 --> 00:37:19,360 Speaker 1: can change, your car can break down. You might decide 724 00:37:19,360 --> 00:37:22,080 Speaker 1: to stay in a location that you really like for 725 00:37:22,120 --> 00:37:24,640 Speaker 1: more than three days. You might stay there three weeks. 726 00:37:25,040 --> 00:37:29,479 Speaker 1: Point is it's important to have an updated financial plan 727 00:37:29,640 --> 00:37:33,279 Speaker 1: every year and sit down with a fiduciary advisor who 728 00:37:33,280 --> 00:37:36,920 Speaker 1: can actually run all these scenarios. Like a lot of 729 00:37:36,960 --> 00:37:40,160 Speaker 1: the great questions we got from actual listeners, and that's 730 00:37:40,200 --> 00:37:43,920 Speaker 1: what the whole financial planning process and journey is all about. 731 00:37:44,400 --> 00:37:48,200 Speaker 1: Looking at what the limitations of your options are. Looking 732 00:37:48,239 --> 00:37:51,000 Speaker 1: at yes, it's some of the technical strategies that are 733 00:37:51,040 --> 00:37:55,160 Speaker 1: out there, but don't allow perfection to weigh you down 734 00:37:55,400 --> 00:37:58,080 Speaker 1: or feel like if you make one decision in one year, 735 00:37:58,680 --> 00:38:01,200 Speaker 1: you know, even if it proved to not be the 736 00:38:01,239 --> 00:38:05,439 Speaker 1: best ideal UH decision on paper based on a thirty 737 00:38:05,480 --> 00:38:09,440 Speaker 1: year spreadsheet, that you've done something wrong. Any thoughts on that, No, 738 00:38:09,520 --> 00:38:10,200 Speaker 1: I think that's great. 739 00:38:10,200 --> 00:38:12,920 Speaker 2: I mean you're you're you're simply pointing out the idea 740 00:38:13,000 --> 00:38:16,440 Speaker 2: that not to wait until things are absolutely ideally perfect, 741 00:38:16,480 --> 00:38:18,200 Speaker 2: because that can cost you years off your life. 742 00:38:19,000 --> 00:38:21,279 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 743 00:38:21,400 --> 00:38:24,400 Speaker 1: presented by all Worth Financial on fifty five KRC, the 744 00:38:24,719 --> 00:38:25,280 Speaker 1: talk station