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Speaker 1: Tonight how investors should interpret the major geopolitical event happening

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Speaker 1: right now in the Middle East. You're listening to Simply Money,

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Speaker 1: presented by all Worth Financial on Bob Sponseller along with

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Speaker 1: Brian James. Well, obviously the world is a tad different

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Speaker 1: than it was the last time we were with you

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Speaker 1: on the show. The events in the Middle East are

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Speaker 1: already having a global impact here as we begin a

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Speaker 1: new week, and to help us navigate through all of

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Speaker 1: this uncertainty is all worst Chief Investment Officer Andy Stout. Andy,

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Speaker 1: I know you're terribly busy right now, so thank you

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Speaker 1: as always for making time for us tonight. We'll just

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Speaker 1: ask the obvious question, how are markets pricing in this

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Speaker 1: conflict in Iran and the greater Middle East right now?

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Speaker 2: Well, when you look at just everything that's going off,

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Speaker 2: you know, the first thing that you know, we want

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Speaker 2: to think about is obviously, you know, sending our thoughts

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Speaker 2: and prayers to you know, the the people, especially over

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Speaker 2: in Israel and in the Middle East where people are affected.

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Speaker 2: And when you think about the overall conflict and how

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Speaker 2: markets are reacting, it kind of started off how we

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Speaker 2: would expect it to. I mean, last night. We saw

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Speaker 2: futures drop, stock futures drop, and we saw oil spiked,

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Speaker 2: and we saw calm down a little bit early on,

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Speaker 2: but we still are not surprised to see, you know,

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Speaker 2: this general cell off that has really started off the week. Now.

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Speaker 2: Whether or not, you know, volatility continues, it's going to

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Speaker 2: be really determined by a number of factors, and probably

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Speaker 2: the biggest one is duration and also how long the

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Speaker 2: conflict continues where you can have some real energy disruption.

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Speaker 1: Are you talking about duration of of bonds or duration

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Speaker 1: the how long this conflict lasts or both.

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Speaker 2: I'm talking about the how long the conflict will lat Yeah,

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Speaker 2: when you look at it right now, you know we're

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Speaker 2: a few days into it, right. Things started around Saturday,

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Speaker 2: about one fifteen in the morning Eastern time, and not surprisingly,

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Speaker 2: you know, there's been some reports about some energy infrastructure

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Speaker 2: being damaged, and we're not seeing tankers really go through

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Speaker 2: that Straight of Horror Moves, which is really the critical

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Speaker 2: thing to be watching right now because the Straight of

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Speaker 2: Horror Moves is really responsible for about twenty percent of

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Speaker 2: total crude oil flows from a global perspective, and if

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Speaker 2: that if that twenty four mile wide corridor gets shut down,

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Speaker 2: which you know, we haven't really seen traffic go through yet.

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Speaker 2: Not surprisingly, you know that's going to have an impact

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Speaker 2: on oil prices globally, and that has impact on inflation,

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Speaker 2: That has impact on what the Federal Reserve does, and

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Speaker 2: that can flow through to the markets and the economy here.

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Speaker 2: So the longer this lasts, the more precarious of a

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Speaker 2: situation it becomes. And right now I think investors are

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Speaker 2: probably giving it a little bit of a grace period. Well,

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Speaker 2: you know, if we're you know, shut down from one

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Speaker 2: to two weeks, it's probably okay. If it's much more

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Speaker 2: beyond that, that's when things start to get a little

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Speaker 2: bit dicey.

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Speaker 3: Andy, have we ever seen the straight up horn moves

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Speaker 3: close before? Because I agree with you that seems like

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Speaker 3: that's that's the variable here. We've seen conflicts in the

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Speaker 3: Middle East, they flare up every few years, but we've

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Speaker 3: never had a complete shutdown of that area. Is that

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Speaker 3: do we have any history there?

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Speaker 2: When you look at just the historical conflicts that have

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Speaker 2: happened in the area, There's been a lot of threats

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Speaker 2: from Iran to shut it down and they've never really

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Speaker 2: followed through. And now this is probably the biggest hit

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Speaker 2: to their views of themselves, and if it were to happen,

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Speaker 2: it would be this time around now you know, as

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Speaker 2: we all know, essentially the head of the snake has

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Speaker 2: been cut off. So we'll see how the power structure

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Speaker 2: forms going forward. Certainly there's a lot of uncertainty right

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Speaker 2: there how that will all play out, and when you

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Speaker 2: look at the shoes of whether or not Iran will

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Speaker 2: be able to shut it down or not shut it

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Speaker 2: down will really depend on whether you may be get

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Speaker 2: to tell here. If you start to see the retaliatory

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Speaker 2: strikes pretty much go away, that's going to suggest that

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Speaker 2: they don't have that ability to you know, strike back,

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Speaker 2: you know, which we have seen where Iran is struck

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Speaker 2: back at its neighbors where you have US bases in

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Speaker 2: foreign countries and also Israel. If that starts to stop,

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Speaker 2: that's going to suggest they don't have the firepower to

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Speaker 2: actually keep the straight up poor moves shut down with

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Speaker 2: any sort of threats. Then you're going to start to

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Speaker 2: see it open. So the quicker we get some sort

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Speaker 2: of resolution from that perspective, the better it will be

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Speaker 2: from an economic and energy price point of view.

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Speaker 1: Andy, when I took a look at this over the

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Speaker 1: weekend and even earlier, you know, today, I mean, this

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Speaker 1: seems to be, you know, a rather interesting situation relative

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Speaker 1: to the straight of her moves, because let's face it,

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Speaker 1: you know, the country getting most of the oil from Iran,

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Speaker 1: correct me if I'm wrong, is China. They are the

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Speaker 1: ones benefiting from that oil. But this is also impacting

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Speaker 1: some global allies of the United States, such as Japan,

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Speaker 1: South Korea, and Taiwan, so you know, and also oil

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Speaker 1: is but what has been fueling this regime for decades

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Speaker 1: and has been paying for all of this terrorism that

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Speaker 1: they've been exporting around the world. So the last thing

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Speaker 1: is it is it seems let the US they at

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Speaker 1: least claim to have air superiority over the region. So there,

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Speaker 1: you know that that bodes well for getting this straight

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Speaker 1: of horror moves under control. But man, you know, whenever

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Speaker 1: you have war and you have people firing missiles left

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Speaker 1: right up down at neighbors, you know, people they've never

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Speaker 1: fired missiles at before, it seems like a desperation attempt.

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Speaker 1: So you know, all bets are off right now. If

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Speaker 1: this thing does not get opened up, and we do

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Speaker 1: have crude oil continue to be elevated.

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Speaker 4: Let's of it too.

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Speaker 1: If this thing isn't resolved in two or three weeks,

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Speaker 1: let's look down the road. If we have elevated crude

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Speaker 1: oil prices for you know, a month, two months, three months,

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Speaker 1: how does that start to impact things over and over

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Speaker 1: and above, you know, this grace period that, as you said,

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Speaker 1: the market seemed to be giving the economy right now,

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Speaker 1: and that sort.

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Speaker 2: Of situation, that's almost the worst case scenario. And that's

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Speaker 2: where you can see oil about one hundred dollars a barrel. Now,

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Speaker 2: you know, keep in mind, you know where we're coming from,

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Speaker 2: you know, w t I, you know, West Texas or Brent,

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Speaker 2: whichever you want to look at it. You know, let's

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Speaker 2: just go with the Brent crew because that's more worldwide.

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Speaker 2: That was trading right around seventy two dollars a barrel

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Speaker 2: as of Friday's closed, you know, quickly spiked up to eighty.

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Speaker 2: Settled down a little bit after that. But that's the

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Speaker 2: one that you I mentioned that because when you look

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Speaker 2: at oil worldwide, two thirds of the oil is BRNT,

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Speaker 2: the third is wt I. Now, when you see that

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Speaker 2: worst case scenario, you see the over one hundred dollars

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Speaker 2: a barrel. Maybe I've seen estimates about one oh eight.

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Speaker 2: That's what Bloomberg economists are forecasting. In that worst case scenario,

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Speaker 2: that's where you would actually start to see the issues

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Speaker 2: where you have these oil spikes, you have high inflation,

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Speaker 2: you have essentially monetary policy that definitely cuts are off

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Speaker 2: the table as far as rate cuts, but you could

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Speaker 2: see possibly some rate increases. I think most central banks

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Speaker 2: will look through it, to be honest with you, and

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Speaker 2: call it temporary more than anything else. But it certainly

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Speaker 2: will not give them the confidence to actually cut rates anymore.

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Speaker 2: But the bottom line is, though you have that inflationary

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Speaker 2: pressure that will constrain consumer spending and that's going to

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Speaker 2: slow down global growth. And don't think for a second

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Speaker 2: the US would not be immune from it in that situation,

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Speaker 2: and that would possibly cause a slowdown. Now, the one

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Speaker 2: thing I do want to mention when you think about

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Speaker 2: these geopolitical events, and it's easy for your emotions to

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Speaker 2: get really fire it up. Well, let's look at what's

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Speaker 2: happened in the past. I mean, we're talking about all

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Speaker 2: this fear mongering out there, you know, I looked at

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Speaker 2: the past forty years, and some of the biggest conflicts

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Speaker 2: that have happened, or geopolitical events like Commas attacking Israel,

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Speaker 2: last year's Twelve Day war, or with Israel and Iran,

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Speaker 2: the Arab Spring with Libya back in twenty eleven, you know,

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Speaker 2: the nine to eleven attacks, golf war basically narrowed it

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Speaker 2: down to like kind of like the the eight nine

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Speaker 2: actually most well known geopolitical events outside of the United States.

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Speaker 2: And when you look at over the next essentially three

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Speaker 2: to twelve months following that trigger markets were higher about

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Speaker 2: seventy five seventy eight percent of the time over that three,

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Speaker 2: six and twelve month period with average returns. Basically six

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Speaker 2: months later it was nine point five percent average return.

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Speaker 2: Then that includes the first day where you saw that

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Speaker 2: down draft. So you know, the point is, don't let

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Speaker 2: your emotions take over, you know, stay focused on your portfolio,

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Speaker 2: making sure your investment needs are aligned with your investment

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Speaker 2: solutions so you can avoid those costly emotional decisions.

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Speaker 3: Hey, Andy, so the name we haven't we don't seem

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Speaker 3: to hear as much when these conflicts flare up. I mean,

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Speaker 3: obviously still still a player, but they seem somewhat diminished

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Speaker 3: is Opek. So you know, it used to be Opek

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Speaker 3: versus the world whenever these conflicts would come up, but

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Speaker 3: now there's more players in the game. Obviously, the US

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Speaker 3: is drilling its own oil. We've made a lot of

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Speaker 3: progress there and kind of blunted their influence on the market.

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Speaker 3: But at the same time they are still a player.

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Speaker 3: But can you talk a little bit about the impact

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Speaker 3: that OPEK has in situations like this and how it

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Speaker 3: compares to twenty thirty years ago.

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Speaker 2: Yeah, Opek is definitely a big player there, not the biggest.

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Speaker 2: I mean, the US is actually the world's largest oil producer.

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Speaker 2: OPEC met yesterday, by the way, and they did agree

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Speaker 2: to increase out but not by much though, and it

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Speaker 2: was in principle, so we'll see what actually happens. It

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Speaker 2: was like a two hundred and six thousand dollars barrel day,

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Speaker 2: two hundred and six thousand barrel per day hike, so

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Speaker 2: it's not it's not enough to really offset anything that

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Speaker 2: comes off of production from Iran. When you look at

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Speaker 2: just what Iran produces from a global perspective, they're at

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Speaker 2: about three point four million barrels a day, so increasing

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Speaker 2: and by two hundred thousand doesn't really change anything if

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Speaker 2: IRAN stays offline for a while.

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Speaker 1: Andy, couple final questions here in a couple of minutes

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Speaker 1: we have left. I mean, I would think most people

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Speaker 1: listening to the show tonight, you know, the obvious question is,

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Speaker 1: and talking to somebody like yourself that runs billions of

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Speaker 1: dollars of money for clients, is are there any tactical

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Speaker 1: adjustments you'd consider right now? And then my other question

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Speaker 1: piggy backing on that, is, you know, walk us through now.

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Speaker 1: A reminder here, we're about ninety six percent of the

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Speaker 1: way through fourth quarter earnings season and the results have

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Speaker 1: been pretty darn good, and the estimates for twenty twenty

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Speaker 1: six look pretty pretty good as well.

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Speaker 2: Yeah, so when you look at just possible portfolio moves,

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Speaker 2: I would think about it from the perspective of, you know,

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Speaker 2: if you have your investment mix maybe you need to

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Speaker 2: have in order to meet your financial goals. Maybe it's

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Speaker 2: seventy percent stocks, thirty percent bonds or whatever, it's something

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Speaker 2: like that. If you see a deviation from that, what

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Speaker 2: a lot of investors do is they'll look for volatility

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Speaker 2: like this to essentially rebalance back to target so if

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Speaker 2: say markets go down and stay down, maybe you end

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Speaker 2: up naturally underweight. That volatility creates a great opportunity to

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Speaker 2: get back to where you need to be to meet

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Speaker 2: your financial goals. Essentially, you're you know, buying at lower prices.

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Speaker 2: And when you think about what drives the markets over

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Speaker 2: those longer terms where I was mentioning, you see, you know,

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Speaker 2: seventy five seventy eight percent higher prices over the next

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Speaker 2: three to twelve months. I'm talking about US large cap

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Speaker 2: stocks S ANDB five hundred specifically, what really drives those

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Speaker 2: that's earnings, right, Bob, and you just mentioned that in

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Speaker 2: the earn season has been very good and when you

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Speaker 2: look at just the results we've gotten from the fourth

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Speaker 2: quarter right now with pretty much over after last week's

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Speaker 2: Navidi report, but basically earnings are about thirteen and a

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Speaker 2: half percent higher and over the past year, easily topping

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Speaker 2: what Wall Street was looking for, which was about eight

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Speaker 2: point four percent estimate at the start of earning season.

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Speaker 2: And so that's where we were. We've had some decent

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Speaker 2: guidance and as looking at what the quarterly earnings are,

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Speaker 2: you know, for twenty twenty six, of what analysts expect

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Speaker 2: right now. They're expecting on average when you look at

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Speaker 2: each quarter individually, it's about thirteen percent. So if you

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Speaker 2: if we continue to see modest economic growth with some

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Speaker 2: robust earnings growth and this has becomes some sort of

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Speaker 2: temporary sell off, you know, it could be some sort

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Speaker 2: of opportunity you know, for investors and certainly wouldn't be

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Speaker 2: making any sort of emotional decisions right now.

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Speaker 1: Excellent perspective, as always from all Wears Chief investment Officer,

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Speaker 1: Andy Stout. Andy, thanks for joining us tonight. Here's the

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Speaker 1: all Worth advice. Don't let geopolitical headlines drive your portfolio decisions. Discipline, diversification,

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Speaker 1: and as Andy mentioned, possibly rebalancing wins over emotional reactions.

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Speaker 1: Almost every time, managed accounts are quietly taking over workplace

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Speaker 1: retirement plans. But are they worth the extra fees and

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Speaker 1: cost involved. We'll talk about that next. You're listening to

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Speaker 1: Simply Money, presented by all Worth Financial on fifty five

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Speaker 1: KARC the talk station. You're listening to Simply Money presented

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Speaker 1: by all Worth Financial on Bob's fonseller along with Brian James.

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Speaker 1: Straight ahead at six forty three, David is debating social

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Speaker 1: security at age seventy. Barbara wants her dividends to act

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Speaker 1: like a paycheck, and Greg is trying to stay ahead

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Speaker 1: of fifty thousand dollars worth of required minimum distributions. He

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Speaker 1: claims he doesn't even need. We'll tackle all of that

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Speaker 1: and more straight ahead. If you're a parent or grandparent

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Speaker 1: who's helping your kids with their first four to oh

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Speaker 1: one K investments, this conversation might matter more than you think,

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Speaker 1: because the next time your son or daughter logs into

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Speaker 1: their retirement plan account, they may see something new, something

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Speaker 1: called a managed account option that their employer is gradually

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Speaker 1: nudging people toward. Brian, let's get into this tonight. Is

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Speaker 1: this a good thing or a bad thing? Or does

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Speaker 1: it all depend on how we use it?

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Speaker 4: Well?

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Speaker 3: I think it depends on the planned The any headline

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Speaker 3: relevant to four oh one k's you have to take

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Speaker 3: with a grain of salt, because their four to one

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Speaker 3: k's are very, very, very planned specific.

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Speaker 5: Right. So, just because the four to one K.

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Speaker 3: Industry is now allowing XYZ, we've been talking about that

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Speaker 3: all year long with regard to alternative assets, all those

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Speaker 3: kinds of things, doesn't mean that your plan is going

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Speaker 3: to do that. So Each plan is its own entity

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Speaker 3: and it has its own basically like a trust document,

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Speaker 3: meaning that representatives of your employer have to sit down

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Speaker 3: and decide, yep, we're gonna make this change, but we're

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Speaker 3: not going to make that change.

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Speaker 5: And that does not happen overnight.

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Speaker 3: So this isn't something you necessarily need to react to.

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Speaker 3: It's may or may not affect you, but to keep

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Speaker 3: an eye open. So what's actually happening here? Employers are

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Speaker 3: more and more putting workers into managed accounts inside Therefore one, okay,

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Speaker 3: this is a little step beyond target date funds. Target

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Speaker 3: date funds simply look at a rough year in which

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Speaker 3: you might retire, and then it's that financial institution's opinion

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Speaker 3: of what a portfolio might look like for that and

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Speaker 3: that can vary itself. But this, this is much more specific.

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Speaker 3: This is these are accounts that are they're targeted towards something,

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Speaker 3: but they will adjust based off your salary, your contribution rate,

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Speaker 3: you know your account balance, and sometimes even projected retirement income.

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Speaker 3: If you've provided that, you know enough information for them

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Speaker 3: to put in place, so you know, the question is

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Speaker 3: always is this worth should I look at it?

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Speaker 1: Well?

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Speaker 3: So good news is we got a little bit of

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Speaker 3: information from morning Star. They looked at how these accounts

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Speaker 3: perform compared to target date funds and just your overall

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Speaker 3: do yourself and morning Star found that these managed accounts

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Speaker 3: could see about a seven point seven percent higher projected

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Speaker 3: retirement balance relative to salary. It's not because of stock picking,

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Speaker 3: it's because of behavior. This kind of managed portfolio puts

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Speaker 3: in place discipline. People who are bandaging on their own

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Speaker 3: will tend to behave a little bit differently than than

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Speaker 3: a little bit without discipline. That's where the difference is

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Speaker 3: coming from.

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Speaker 1: Yeah, and we talk about this all the time on

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Speaker 1: the show, Brian. At the end of the day, our

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Speaker 1: own personal behavior matters a whole lot more than saving

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Speaker 1: you know, maybe one two percent on marginal tax rates

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Speaker 1: or you know, being so focused on internal operating expenses

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Speaker 1: of a given fund or ETF. I see this as

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Speaker 1: a potential positive, especially for people at the younger end

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Speaker 1: of the curve here, because let's face it, access to

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Speaker 1: good fiduciary financial advice is lacking, especially for people starting

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Speaker 1: out maybe with lower account balances that more established financial

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Speaker 1: advisors just don't seem to, you know, to work with.

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Speaker 1: I see this as a good thing to just kickstart

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Speaker 1: that behavior. And you know, for younger workers, those people

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Speaker 1: earning let's say, under a hundred thousand dollars a year,

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Speaker 1: that guidance can be powerful. You know, if somebody gets

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Speaker 1: a raise, their income rises, somebody coming along just to

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Speaker 1: give them that nudge to avoid that lifestyle creep and

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Speaker 1: make sure your savings are keeping pace with your your

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Speaker 1: savings and your plan or keeping pace with your income.

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Speaker 1: I see this as a good thing as long as

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Speaker 1: things don't get off the rails here from a fee standpoint.

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Speaker 3: Yeah, that's always uh, the important thing to worry about.

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Speaker 3: Make sure you're getting value for the things that you're

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Speaker 3: that you're looking at. So I remember this, this is

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Speaker 3: part of a this This doesn't solve everything.

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Speaker 5: This does. This is not a financial plan.

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Speaker 3: A financial plan still going to take into account everything

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Speaker 3: in your situation.

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Speaker 5: What are your other resources, what are you trying to

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Speaker 5: do with it?

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Speaker 3: Uh, and then understanding what the volatility might be and

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Speaker 3: so forth. This is one good solution, but it's not

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Speaker 3: the end.

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Speaker 5: All, be all.

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Speaker 3: So if you you know, if you run into these

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Speaker 3: types of things, you know you might be hearing from

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Speaker 3: your kids are asking you questions that kind of thing

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Speaker 3: about there. You know, therefore when case they're seeing it work,

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Speaker 3: and just always factor in, like Bob says, you know,

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Speaker 3: what are the fees? Are you getting value for that?

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Speaker 3: If I choose to opt out, will I actually really

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Speaker 3: do it myself? You know, I think a lot of

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Speaker 3: us convince ourselves that I want to save money, therefore

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Speaker 3: I'm going to do these things. But when it comes

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Speaker 3: to actively managing your portfolio, it's not something you can

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Speaker 3: do in ten minutes on a weekend. You need to

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Speaker 3: be paying attention and you have to have the time

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Speaker 3: and the desire and a little bit of knowledge.

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Speaker 5: To do it.

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Speaker 3: And then the big thing that that dictates success versus failure,

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Speaker 3: that's whether I'm saving enough to begin with. That's really

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Speaker 3: the thieves or not, or aside from the management program

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Speaker 3: and all that, whether you're saving enough. That is the

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Speaker 3: real driver of success, and that's really where the energy

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Speaker 3: should be spent.

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Speaker 4: Here.

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Speaker 3: Make sure that you have a good investment plan, of course,

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Speaker 3: because the dollars have to land in a smart arrangement.

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Speaker 3: But at the same time, what really matters is that

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Speaker 3: you have arranged your own finances in a way where

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Speaker 3: you can carve out more than you earn every day

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Speaker 3: or every month and put it away.

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Speaker 4: For the future.

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Speaker 1: Yeah, I see these plan based you know, managed accounts

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Speaker 1: kind of to use the analogy of, you know, riding

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Speaker 1: a bike, they're kind of training wheels getting people started,

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Speaker 1: and it's always good to have some advice and guidance

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Speaker 1: when you're getting started. But once you're an established bike

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Speaker 1: rider and you've got a higher net worth, and let's

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Speaker 1: face it, you got a lot more going on, say

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Speaker 1: taxable portfolios, company stocks, stock options, real estates, estate planning needs,

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Speaker 1: concentrated positions in a portfolio. Well, now you're kind of

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Speaker 1: like that biker that wants to go on a more

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Speaker 1: complicated long term let's say, journey through the mountains out

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Speaker 1: in the rocky mountains. Well there, it's it's a good

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Speaker 1: time to have a guide on your way to make

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Speaker 1: sure they know the landscape, know the pitfalls, and can

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Speaker 1: guide you along the way. So to me, that graduating

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Speaker 1: toward kind of a real comprehensive financial advisor. But again,

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Speaker 1: going back to these younger folks with these retirement plans,

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Speaker 1: I think this is a good place to start as

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Speaker 1: long as you understand that it's not an end all,

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Speaker 1: be all, comprehensive financial plan. And here's the all Worth advice.

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Speaker 1: Managed accounts can jumpstart good habits, but real wealth is

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Speaker 1: built when in vice evolves beyond just setting something on autopilot.

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Speaker 1: Your inbox, your email inbox could be the weakest link

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Speaker 1: in your financial life. How to lock that down? Coming

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Speaker 1: up next, You're listening to Simply Money presented by all

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Speaker 1: Worth Financial on fifty five KRC the talk station. You're

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Speaker 1: listening to Simply Money presided by all Worth Financial. I'm

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Speaker 1: Bob Sponseller along with Brian James, joined tonight by our

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Speaker 1: technology and cybersecurity guru, mister Dave Hatter. Dave, it's always

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Speaker 1: great to have you with us tonight. You want to

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Speaker 1: talk about elder scan and this is something that seems

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Speaker 1: to be growing and growing in regularity and it's something

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Speaker 1: we all need to be aware of and make plans

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Speaker 1: to prevent.

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Speaker 4: Yeah, guys, sadly this appreciate you having me on.

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Speaker 6: It's always I think this is an important topic because

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Speaker 6: you know I have elderly parents, I know many of

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Speaker 6: your listeners do and this is a growing concern. So

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Speaker 6: just one stat and this is a great site for folks,

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Speaker 6: by the way, just for general stats and information, the

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Speaker 6: Internet Crime Complaints Center IC three, which is run by

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Speaker 6: the FBI. They put out a fraud report every year

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Speaker 6: that's got all kinds of stats in it, and again

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Speaker 6: the site is just useful in a lot of ways.

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Speaker 6: I encourage people to bookmarkt IC three dot gov. Elder

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Speaker 6: fraud losses hit four point eight eight billion and twenty

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Speaker 6: twenty four, a staggering forty three percent jump from the

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Speaker 6: previous year. The average senior victim lost over eighty three

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Speaker 6: thousand dollars. And then another good site for some insight

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Speaker 6: into this is the Federal Trade Commission FTC FTC dot gov.

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Speaker 6: So here's a headline from a public service announcement they

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Speaker 6: put out. Business and government impersonators go after older adults

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Speaker 6: life savings. And then they have some stats in there too.

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Speaker 6: They say, in fact, reported losses of over one hundred

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Speaker 6: thousand dollars increase nearly sevenfold from twenty twenty to twenty

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Speaker 6: twenty four. So, you know, I hate to always be

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Speaker 6: the doomsday guy, the guy with the ten foil hat,

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Speaker 6: always warning about this stuff, but you know, I don't

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Speaker 6: want to see people lose their entire life savings and

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Speaker 6: is we spend more time online and every facet of

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Speaker 6: our lives, working, education, you know, school, you name it,

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Speaker 6: think about it. What are you not doing online nowadays?

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Speaker 6: It just creates that many more attack factors for the

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Speaker 6: bad guys. You're throwing things like artificial intelligence and the

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Speaker 6: ability to generate, to clone someone's voice, to generate incredibly

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Speaker 6: realistic videos, incredibly realistic texts, to kind of eliminate all

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Speaker 6: the old school tells like well I got an email

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Speaker 6: asking me to do something weird and I need to

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Speaker 6: send gift cards to the Hamley County sheriffs can arrest me,

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Speaker 6: but the grammar's all weird and so forth.

436
00:23:00,000 --> 00:23:00,920
Speaker 4: Well that's gone.

437
00:23:01,200 --> 00:23:04,040
Speaker 6: The bad guys have access to low cost or free

438
00:23:04,080 --> 00:23:06,720
Speaker 6: tools that make it really easy for them to run

439
00:23:06,760 --> 00:23:09,600
Speaker 6: these sort of scams at scale. And again you don't

440
00:23:09,600 --> 00:23:11,200
Speaker 6: have to take my word for it. You can see

441
00:23:11,200 --> 00:23:13,600
Speaker 6: what the FBI is saying, you see what the FTC

442
00:23:13,800 --> 00:23:16,240
Speaker 6: is saying. And at one last point, and then I'll

443
00:23:16,280 --> 00:23:19,879
Speaker 6: let you guys start asking some specific questions. Is you

444
00:23:19,920 --> 00:23:23,679
Speaker 6: know this again, the documentation is all out there. The

445
00:23:23,720 --> 00:23:27,120
Speaker 6: scams are increasing, They're targeting elderly people in some cases,

446
00:23:27,119 --> 00:23:29,440
Speaker 6: but you know, we're all subject to all kinds of scams,

447
00:23:29,480 --> 00:23:32,320
Speaker 6: and this kind of education is important, as is a

448
00:23:32,320 --> 00:23:36,200
Speaker 6: healthy dose of skepticism and vigilance. You know, the hamlet

449
00:23:36,240 --> 00:23:38,040
Speaker 6: and kind of sheriff is not going to call you

450
00:23:38,440 --> 00:23:40,680
Speaker 6: and tell you that because of a parking ticket, they're

451
00:23:40,720 --> 00:23:43,560
Speaker 6: coming at three to arrest you if you don't buy

452
00:23:43,640 --> 00:23:46,280
Speaker 6: gift cards or send an INMO payment, right, they don't

453
00:23:46,280 --> 00:23:47,120
Speaker 6: operate that way.

454
00:23:47,400 --> 00:23:50,360
Speaker 3: Hey, hey, Dave, So yeah, and those are those are

455
00:23:50,359 --> 00:23:53,080
Speaker 3: all great examples. But you're right, this isn't new news anymore.

456
00:23:53,240 --> 00:23:54,840
Speaker 3: And I think but the one, the one that is

457
00:23:54,880 --> 00:23:56,920
Speaker 3: new is the to me is the deep fake stuff.

458
00:23:56,960 --> 00:23:58,840
Speaker 5: I don't think we've even scratched the surface on that.

459
00:23:58,840 --> 00:24:01,320
Speaker 3: I have yet to hear a story, you know, about

460
00:24:01,359 --> 00:24:03,240
Speaker 3: somebody losing an awful lot of money yet to that.

461
00:24:03,320 --> 00:24:05,280
Speaker 3: But that is coming and it's going to be huge.

462
00:24:05,480 --> 00:24:08,879
Speaker 3: So these articles you said is extremely helpful here, but

463
00:24:08,920 --> 00:24:11,720
Speaker 3: they reference an awful lot about cyber insurance. So I

464
00:24:11,760 --> 00:24:13,240
Speaker 3: don't want to drag you off course here, but is

465
00:24:13,280 --> 00:24:15,440
Speaker 3: this something that we should be considering. I mean, maybe

466
00:24:15,440 --> 00:24:17,159
Speaker 3: we all have home insurance, we have fire insurance, we

467
00:24:17,200 --> 00:24:19,560
Speaker 3: got flood insurance. In some case, is it we at

468
00:24:19,600 --> 00:24:21,760
Speaker 3: a point where we should all consider cyber insurance?

469
00:24:21,800 --> 00:24:22,200
Speaker 5: Do you think?

470
00:24:23,040 --> 00:24:23,159
Speaker 4: Uh?

471
00:24:23,440 --> 00:24:26,479
Speaker 6: I think it's worth it as a business, absolutely, But

472
00:24:26,520 --> 00:24:29,400
Speaker 6: I also find that many small businesses that I talk

473
00:24:29,480 --> 00:24:31,240
Speaker 6: to about this stuff. You know, in my real job,

474
00:24:31,280 --> 00:24:33,240
Speaker 6: I'm not talking about this all the time and trying

475
00:24:33,280 --> 00:24:35,040
Speaker 6: to help business.

476
00:24:35,119 --> 00:24:37,119
Speaker 5: Come on, David, this is your real job.

477
00:24:37,680 --> 00:24:39,160
Speaker 4: Yeah.

478
00:24:39,440 --> 00:24:42,040
Speaker 6: You know, people will say, well, I've got cyber insurance.

479
00:24:42,040 --> 00:24:43,359
Speaker 6: I don't like to care about this, and I just

480
00:24:43,440 --> 00:24:46,199
Speaker 6: like to remind folks, well, your fire insurance does not

481
00:24:46,280 --> 00:24:48,800
Speaker 6: keep your building from burning down. You know, ideally it

482
00:24:48,800 --> 00:24:51,720
Speaker 6: helps you recover should that happen. So you can't just

483
00:24:51,760 --> 00:24:53,440
Speaker 6: say well, I got insurance, I'm good to go.

484
00:24:53,560 --> 00:24:53,679
Speaker 4: Right.

485
00:24:53,760 --> 00:24:57,280
Speaker 6: You need a strategy where you're trying to parden your environment,

486
00:24:57,440 --> 00:25:01,000
Speaker 6: defend yourself against these kind of attacks. Be mark, be vigilant,

487
00:25:01,080 --> 00:25:04,359
Speaker 6: move slow, and then you know, be resilient. Part of

488
00:25:04,359 --> 00:25:07,520
Speaker 6: that resilience, you know, in addition to backups and so forth,

489
00:25:07,720 --> 00:25:08,560
Speaker 6: might be insurance.

490
00:25:09,280 --> 00:25:10,159
Speaker 4: You know, as an.

491
00:25:10,000 --> 00:25:12,320
Speaker 6: Individual, does it make sense to get some kind of

492
00:25:12,400 --> 00:25:15,640
Speaker 6: personal cyber insurance? Maybe, especially if you have a lot

493
00:25:15,640 --> 00:25:17,560
Speaker 6: of risk, if you're a high net worth person.

494
00:25:18,119 --> 00:25:19,960
Speaker 4: But I think there's a lot of things you can do. Guys.

495
00:25:19,960 --> 00:25:22,840
Speaker 6: Again, the first step is always knowledge, right, I mean,

496
00:25:22,840 --> 00:25:24,320
Speaker 6: you can't defend against something you.

497
00:25:24,240 --> 00:25:27,359
Speaker 4: Don't know about. Knowledge, skepticism.

498
00:25:27,480 --> 00:25:30,200
Speaker 6: It's doing the simple things we talk about all the time, strong,

499
00:25:30,280 --> 00:25:34,600
Speaker 6: unique passwords, multifacture authentication. It's also doing things like freezing

500
00:25:34,600 --> 00:25:36,399
Speaker 6: your credit. I'm sure you guys would agree.

501
00:25:36,480 --> 00:25:37,640
Speaker 4: You know, my.

502
00:25:37,720 --> 00:25:38,119
Speaker 1: Card is.

503
00:25:39,760 --> 00:25:44,080
Speaker 6: Yeah, until I need to get credit, I keep it frozen.

504
00:25:44,160 --> 00:25:46,200
Speaker 6: I unlock it when I need it, and I lock

505
00:25:46,280 --> 00:25:48,600
Speaker 6: it back. You know, it's not foolproof, but you know

506
00:25:48,680 --> 00:25:50,879
Speaker 6: you're raising the bar. You're making yourself a much more

507
00:25:50,920 --> 00:25:53,760
Speaker 6: difficult target for the bad guys because in most of

508
00:25:53,800 --> 00:25:58,040
Speaker 6: these cases, especially you know, these targeting of elders, they're

509
00:25:58,080 --> 00:26:01,320
Speaker 6: not specifically targeting individuals. They're going for low hanging fruit.

510
00:26:01,840 --> 00:26:04,080
Speaker 6: And if you take the kind of advice we're given

511
00:26:04,119 --> 00:26:07,240
Speaker 6: out here, if you harden yourself, if you do these

512
00:26:07,280 --> 00:26:10,520
Speaker 6: basic practices, you're going to be a much more difficult target.

513
00:26:10,600 --> 00:26:13,440
Speaker 6: They're just going to move on. And again the skepticism,

514
00:26:13,760 --> 00:26:16,159
Speaker 6: you know, I encourage any of your listeners pick up

515
00:26:16,200 --> 00:26:18,119
Speaker 6: the phone and try to call Microsoft or Google and

516
00:26:18,160 --> 00:26:21,800
Speaker 6: get help. And my point is they are not looking

517
00:26:21,840 --> 00:26:23,920
Speaker 6: at your computer and going, hey, I think you've got

518
00:26:23,920 --> 00:26:25,879
Speaker 6: a virus. I'm going to call you up today and

519
00:26:25,920 --> 00:26:28,760
Speaker 6: tell you let me help you remove this virus. If

520
00:26:28,760 --> 00:26:32,000
Speaker 6: you get a call, an unsolicited call from a company

521
00:26:32,040 --> 00:26:33,840
Speaker 6: that claims you have some kind of virus and they

522
00:26:33,880 --> 00:26:36,679
Speaker 6: want to help you, the likelihood that that is not

523
00:26:36,720 --> 00:26:39,439
Speaker 6: a scam is probably greater than all three of us

524
00:26:39,480 --> 00:26:40,480
Speaker 6: getting hit by a meteor.

525
00:26:40,640 --> 00:26:43,000
Speaker 4: Right now, it is a scam, right.

526
00:26:43,280 --> 00:26:48,679
Speaker 6: So again, vigilance, knowledge, skepticism, and you know, when you

527
00:26:48,720 --> 00:26:50,960
Speaker 6: look at the numbers, one of these reports say there's

528
00:26:50,960 --> 00:26:53,119
Speaker 6: eighty five trillion dollars in wealth out there in the

529
00:26:53,160 --> 00:26:56,960
Speaker 6: Baby boom and silent generation. The bad guys know this, right,

530
00:26:57,560 --> 00:26:59,679
Speaker 6: They know there's an enormous amount of money. They know

531
00:27:00,160 --> 00:27:02,960
Speaker 6: in a lot of cases, older people may not even

532
00:27:02,960 --> 00:27:06,040
Speaker 6: be aware that it's possible to create a very you know,

533
00:27:06,119 --> 00:27:09,119
Speaker 6: a perfect deep fake audio or video. And you know,

534
00:27:09,160 --> 00:27:13,000
Speaker 6: you guys mentioned there is documented evidence already more in

535
00:27:13,040 --> 00:27:16,840
Speaker 6: a corporate setting of large scale fraud that's been perpetrated

536
00:27:17,000 --> 00:27:20,280
Speaker 6: using deep fake voice cloning and videos. I encourage your

537
00:27:20,280 --> 00:27:24,160
Speaker 6: folks go look up the story about the Ferrari CFO

538
00:27:24,240 --> 00:27:27,040
Speaker 6: who got a nearly got deep fake voice cloned into

539
00:27:27,080 --> 00:27:30,679
Speaker 6: fraud from the so called Ferrari ceo. And these are

540
00:27:30,720 --> 00:27:32,160
Speaker 6: people that know each other personally.

541
00:27:32,359 --> 00:27:35,280
Speaker 5: This gave us a segment maybe for next week. I'm

542
00:27:35,320 --> 00:27:36,399
Speaker 5: in right that one now.

543
00:27:37,640 --> 00:27:40,639
Speaker 4: It's why I would to look into it, well documented.

544
00:27:40,880 --> 00:27:43,320
Speaker 1: Dave, I was going to ask about the whole phone

545
00:27:43,440 --> 00:27:44,760
Speaker 1: thing and voice cloning.

546
00:27:45,600 --> 00:27:47,160
Speaker 4: Yeah, so I'll just ask it this way.

547
00:27:47,240 --> 00:27:49,600
Speaker 1: I mean, are we now at a point where it's

548
00:27:49,720 --> 00:27:52,439
Speaker 1: just because I know what I do. I never answer

549
00:27:52,560 --> 00:27:56,520
Speaker 1: my phone ever, ever, ever, unless I know who's calling me.

550
00:27:56,640 --> 00:27:58,560
Speaker 1: I just don't answer my phone. Are we at the

551
00:27:58,560 --> 00:28:03,200
Speaker 1: point now where our advice to folks, especially elderly and

552
00:28:03,240 --> 00:28:07,840
Speaker 1: maybe vulnerable folks, just give that blanket advice, do not

553
00:28:08,080 --> 00:28:11,120
Speaker 1: answer your phone unless you know who it is. Are

554
00:28:11,119 --> 00:28:13,119
Speaker 1: we at that point? Is that the best way to

555
00:28:13,160 --> 00:28:13,879
Speaker 1: protect folks?

556
00:28:14,920 --> 00:28:15,280
Speaker 4: I think?

557
00:28:15,320 --> 00:28:17,720
Speaker 6: So I can tell you I do not ever answer

558
00:28:17,800 --> 00:28:20,120
Speaker 6: my phone from a number I don't recognize, and I'm

559
00:28:20,160 --> 00:28:22,880
Speaker 6: even sometimes skeptical if it is a number I do recognize.

560
00:28:22,880 --> 00:28:25,800
Speaker 6: Because keep in mind, guys, spoofing, which in my mind

561
00:28:25,880 --> 00:28:28,080
Speaker 6: is the biggest driver of all this, creating something that

562
00:28:28,119 --> 00:28:31,679
Speaker 6: looks realistic but isn't. It's fairly easy to do in

563
00:28:31,720 --> 00:28:35,560
Speaker 6: any digital mechanism, it's really easy to send a phone

564
00:28:35,600 --> 00:28:37,520
Speaker 6: call from any number you want if you know what

565
00:28:37,520 --> 00:28:39,560
Speaker 6: you're doing, and it does not require a lot of skills.

566
00:28:39,600 --> 00:28:41,520
Speaker 6: So you know, if I could find one of your

567
00:28:41,520 --> 00:28:43,600
Speaker 6: two cell phone numbers, or if I happen to have it,

568
00:28:43,760 --> 00:28:45,680
Speaker 6: I could easily spoof a call that would look like

569
00:28:45,680 --> 00:28:48,080
Speaker 6: it came from your cell phone. I could easily send

570
00:28:48,080 --> 00:28:49,880
Speaker 6: a text that looks like it comes from you. And

571
00:28:49,960 --> 00:28:54,360
Speaker 6: you know, same thing with emails. So skepticism, vigilance, don't

572
00:28:54,360 --> 00:28:56,920
Speaker 6: answer the phone if it's important, they'll leave a message,

573
00:28:57,120 --> 00:28:59,800
Speaker 6: or they'll contact you some other way. Go read what

574
00:28:59,800 --> 00:29:03,560
Speaker 6: the government says. You know, IRS, FBI. They are not

575
00:29:03,680 --> 00:29:06,440
Speaker 6: going to call you and tell you some terrible thing

576
00:29:06,560 --> 00:29:08,040
Speaker 6: is going to happen to you if you don't make

577
00:29:08,040 --> 00:29:10,360
Speaker 6: it in when a payment by five PM. They don't

578
00:29:10,400 --> 00:29:13,080
Speaker 6: operate that way, and they state that clearly.

579
00:29:12,760 --> 00:29:13,760
Speaker 4: On their own websites.

580
00:29:14,080 --> 00:29:16,720
Speaker 6: So again there's there's tons of useful information out there

581
00:29:16,920 --> 00:29:19,000
Speaker 6: that can help people avoid these kind of scams.

582
00:29:19,160 --> 00:29:21,520
Speaker 4: FTC dot gov, IC three dot gov.

583
00:29:22,240 --> 00:29:26,200
Speaker 6: But it all starts with skepticism and caution, like don't

584
00:29:26,240 --> 00:29:28,120
Speaker 6: answer your phone if you don't recognize the number.

585
00:29:28,120 --> 00:29:29,959
Speaker 4: They'll leave a message it. If they don't, must not

586
00:29:30,000 --> 00:29:30,560
Speaker 4: be important.

587
00:29:31,200 --> 00:29:34,000
Speaker 1: All right, good stuff as always, Dave. You're listening to

588
00:29:34,040 --> 00:29:36,760
Speaker 1: Simply Money presented by all Worth Financial on fifty five

589
00:29:36,840 --> 00:29:46,760
Speaker 1: KRC the talk station. You're listening to Simply Money presented

590
00:29:46,800 --> 00:29:49,200
Speaker 1: by all Worth Financial on Bob spond Seller along with

591
00:29:49,200 --> 00:29:51,800
Speaker 1: Brian James. You have a financial question you'd like for

592
00:29:51,880 --> 00:29:54,080
Speaker 1: us to answer. There's a red button you can click

593
00:29:54,120 --> 00:29:56,520
Speaker 1: while you're listening to the show. If you're listening on

594
00:29:56,560 --> 00:29:59,960
Speaker 1: the iHeart app, simply record your question and it will

595
00:30:00,000 --> 00:30:03,560
Speaker 1: oh come straight to us. All right, Brian Barry and

596
00:30:03,560 --> 00:30:06,320
Speaker 1: Anderson says, Hey, I'm retiring next year. We need about

597
00:30:06,360 --> 00:30:09,360
Speaker 1: seventy five hundred dollars a month after taxes to live on.

598
00:30:09,960 --> 00:30:13,840
Speaker 1: Should I set up automatic withdrawals from one account or

599
00:30:14,000 --> 00:30:17,680
Speaker 1: manually decide each quarter where the money should come from.

600
00:30:18,160 --> 00:30:20,840
Speaker 5: Yeah, that's a great question. I'm a huge fan of automation.

601
00:30:21,000 --> 00:30:22,600
Speaker 5: I'm lazy. I want to set it and forget it.

602
00:30:22,600 --> 00:30:24,160
Speaker 3: So when I get to this point, yes, I'm gonna

603
00:30:24,200 --> 00:30:25,680
Speaker 3: have this same question myself.

604
00:30:25,720 --> 00:30:27,800
Speaker 5: So well, if you need seventy five.

605
00:30:27,680 --> 00:30:30,280
Speaker 3: Hundred a month after tax this isn't just a question

606
00:30:30,320 --> 00:30:32,680
Speaker 3: of the mechanics. It's also got to do with tax

607
00:30:32,760 --> 00:30:36,400
Speaker 3: sequencing and overall kind of behavioral activity too. So so

608
00:30:36,720 --> 00:30:38,920
Speaker 3: first off, you'll calculate that gross number. If you need

609
00:30:39,000 --> 00:30:42,560
Speaker 3: seventy five hundred after tax, that probably translates to about

610
00:30:42,600 --> 00:30:45,160
Speaker 3: eighty five hundred and nine thousand per month gross, so

611
00:30:45,240 --> 00:30:47,760
Speaker 3: that you can have your tax withholding done as well.

612
00:30:47,840 --> 00:30:51,320
Speaker 3: So then and then automation versus manual that's not an

613
00:30:51,320 --> 00:30:53,800
Speaker 3: either or question. That's about the structure. So here's the risk,

614
00:30:53,920 --> 00:30:56,240
Speaker 3: and there's pros and cons to both ways. Here's the

615
00:30:56,360 --> 00:30:59,480
Speaker 3: risk of pulling from just one account automatically. You could

616
00:30:59,560 --> 00:31:03,120
Speaker 3: unintentioned spike your taxable income just by being a robot

617
00:31:03,160 --> 00:31:06,280
Speaker 3: that can trigger higher Medicare IRMA brackets. You might lose

618
00:31:06,320 --> 00:31:08,880
Speaker 3: the opportunity to do some bracket management if you have

619
00:31:08,920 --> 00:31:12,240
Speaker 3: it kind of in a set and forget arrangement. You

620
00:31:12,280 --> 00:31:14,680
Speaker 3: may also wind up selling assets in a down market

621
00:31:14,680 --> 00:31:16,040
Speaker 3: without some kind of coordination.

622
00:31:16,800 --> 00:31:18,240
Speaker 5: So that's the downsides of it.

623
00:31:18,240 --> 00:31:21,480
Speaker 3: Obviously, the upsides are automation and that laziness that you

624
00:31:21,480 --> 00:31:24,600
Speaker 3: know that I certainly aspire to myself. But on the

625
00:31:24,640 --> 00:31:27,520
Speaker 3: other hand, you're sacrificing some efficiency. So if you go

626
00:31:27,640 --> 00:31:30,000
Speaker 3: fully manual each month, right, if you want to react

627
00:31:30,040 --> 00:31:32,520
Speaker 3: to those types of things that can create some stress

628
00:31:32,520 --> 00:31:34,240
Speaker 3: and behavioral risk. In other words, you're going to have

629
00:31:34,240 --> 00:31:37,240
Speaker 3: to agonize, Well, these headlines are scary. Maybe I don't

630
00:31:37,240 --> 00:31:38,840
Speaker 3: want to pull out money. Should I do it tomorrow?

631
00:31:38,840 --> 00:31:39,960
Speaker 5: Maybe I'll do it at the end of the week,

632
00:31:40,000 --> 00:31:41,000
Speaker 5: and all of a sudden you've.

633
00:31:40,840 --> 00:31:43,719
Speaker 3: Disrupted your ability to pay your bills and have a

634
00:31:43,760 --> 00:31:47,480
Speaker 3: relaxed retirement. So really, the hybrid system might be the best.

635
00:31:47,520 --> 00:31:50,240
Speaker 3: So keep six to twelve months of spending in cash

636
00:31:50,320 --> 00:31:52,480
Speaker 3: or short term bonds. That way doesn't matter so much

637
00:31:52,520 --> 00:31:55,120
Speaker 3: because you're not necessarily using your.

638
00:31:54,880 --> 00:31:56,000
Speaker 5: Income to pay bills.

639
00:31:56,000 --> 00:31:58,880
Speaker 3: You're using piles of cash you've set aside, automatic monthly

640
00:31:58,920 --> 00:32:01,480
Speaker 3: transfers from that income bucket to your checking account, and

641
00:32:01,520 --> 00:32:04,280
Speaker 3: then refill that bucket every quarter. If the market's up, great,

642
00:32:04,320 --> 00:32:06,680
Speaker 3: take some of those proceeds off the table. If it's down,

643
00:32:06,760 --> 00:32:09,480
Speaker 3: you've got some buffer built into that bucket. So few

644
00:32:09,480 --> 00:32:11,400
Speaker 3: steps there, But it's great that you're thinking about these

645
00:32:11,400 --> 00:32:15,040
Speaker 3: things at the early on in retirement here. So we'll

646
00:32:15,080 --> 00:32:17,200
Speaker 3: move on now to Andrew and Hyde Park. Andrew's got

647
00:32:17,240 --> 00:32:19,480
Speaker 3: a three percent mortgage and he's thinking about paying it off,

648
00:32:19,480 --> 00:32:21,680
Speaker 3: but he's wondering if that money should stay invested. Is

649
00:32:21,680 --> 00:32:24,520
Speaker 3: it worth it with these once in a lifetime interest rates.

650
00:32:24,520 --> 00:32:25,360
Speaker 3: What do you think of that, Bob?

651
00:32:26,440 --> 00:32:29,280
Speaker 1: Well, two ways I'll answer that question. Number one, on

652
00:32:29,360 --> 00:32:32,640
Speaker 1: a straight rate of return standpoint, you know, almost in

653
00:32:32,680 --> 00:32:35,600
Speaker 1: today's day and age, it generally never makes sense to

654
00:32:35,640 --> 00:32:38,360
Speaker 1: pay that three percent mortgage off. A couple reasons there.

655
00:32:38,600 --> 00:32:40,640
Speaker 1: Number one, if you've had the mortgage for any length

656
00:32:40,680 --> 00:32:43,640
Speaker 1: of time, a lot of your payments each month are

657
00:32:43,680 --> 00:32:47,320
Speaker 1: going toward principle, not interest anyway. And then number two,

658
00:32:47,480 --> 00:32:51,360
Speaker 1: if you've got your cash or other portfolio position in

659
00:32:51,400 --> 00:32:55,080
Speaker 1: a manner that's getting you know, even after taxes higher

660
00:32:55,120 --> 00:32:58,440
Speaker 1: than that three percent rate of return, you're giving up

661
00:32:58,560 --> 00:33:01,760
Speaker 1: opportunity cost in the way of you know, higher rate

662
00:33:01,800 --> 00:33:05,800
Speaker 1: of return and wealth building. So that's the rate of

663
00:33:05,880 --> 00:33:09,760
Speaker 1: return answer, or the math answer. Now, in terms of lifestyle,

664
00:33:10,280 --> 00:33:13,600
Speaker 1: if that mortgage payment is keeping you from doing some

665
00:33:13,800 --> 00:33:16,200
Speaker 1: other things that you need or want to do in

666
00:33:16,240 --> 00:33:18,880
Speaker 1: your life, and boy, if if that getting rid of

667
00:33:18,920 --> 00:33:21,479
Speaker 1: that mortgage would free up cash to do other things

668
00:33:21,800 --> 00:33:25,720
Speaker 1: and your financial plan will support those other things, then

669
00:33:25,760 --> 00:33:29,440
Speaker 1: that's more of a lifestyle decision and a freedom decision

670
00:33:29,520 --> 00:33:32,040
Speaker 1: that you should explore as well. So that comes down

671
00:33:32,120 --> 00:33:36,480
Speaker 1: to how your overall financial plan is designed. And sometimes

672
00:33:36,480 --> 00:33:39,040
Speaker 1: we have people to come in and when we explain

673
00:33:39,480 --> 00:33:42,040
Speaker 1: you know both ways. And yeah, even though the math

674
00:33:42,160 --> 00:33:46,640
Speaker 1: doesn't technically make sense from a rate of return standpoint,

675
00:33:47,000 --> 00:33:50,360
Speaker 1: if this mortgage is keeping you from taking that vacation

676
00:33:50,480 --> 00:33:53,360
Speaker 1: you've always wanted to take, or you know, redoing your

677
00:33:53,400 --> 00:33:57,280
Speaker 1: basement or other things that just enhance your quality of life,

678
00:33:57,960 --> 00:33:59,760
Speaker 1: then by all means, move forward, get rid of the

679
00:33:59,800 --> 00:34:02,800
Speaker 1: more mortgage and move on. Hope that helps, all right,

680
00:34:02,920 --> 00:34:06,280
Speaker 1: David and Westwood says, I'm deciding whether to delay Social

681
00:34:06,280 --> 00:34:09,920
Speaker 1: Security until late seventy. How do I compare the extra

682
00:34:10,040 --> 00:34:15,600
Speaker 1: guarantee it guaranteed income later versus drawing more from investments. Now,

683
00:34:15,640 --> 00:34:16,960
Speaker 1: this is a great question.

684
00:34:16,719 --> 00:34:18,120
Speaker 5: Brian, Yeah, another good one.

685
00:34:18,120 --> 00:34:21,239
Speaker 3: We've got some good pointed questions today. So this is

686
00:34:21,280 --> 00:34:24,160
Speaker 3: one of the most consequential retirement decisions you're gonna make.

687
00:34:24,360 --> 00:34:26,600
Speaker 3: That's not just about that break even age. It's about

688
00:34:26,600 --> 00:34:29,200
Speaker 3: transferring the risk. So let's frame this up a little bit.

689
00:34:29,200 --> 00:34:32,200
Speaker 3: If you delay Social Security from four retirement to seventy,

690
00:34:32,440 --> 00:34:36,800
Speaker 3: that benefit grows about eight percent per year guaranteed, inflation adjusted,

691
00:34:38,200 --> 00:34:40,000
Speaker 3: and that will be permanently put in place once you

692
00:34:40,040 --> 00:34:42,120
Speaker 3: turn That's big and on. That's the agony. That's what

693
00:34:42,120 --> 00:34:44,160
Speaker 3: we're trying to decide from, because there's nothing else out

694
00:34:44,160 --> 00:34:47,840
Speaker 3: there that gives you eight percent guaranteed and no easier

695
00:34:47,880 --> 00:34:49,680
Speaker 3: way to do it than simply by ignoring your Social

696
00:34:49,760 --> 00:34:53,040
Speaker 3: Security benefit. So compare that to drawing more from your

697
00:34:53,040 --> 00:34:55,960
Speaker 3: investments from say between sixty seven and seventy. So what

698
00:34:55,960 --> 00:34:58,600
Speaker 3: you're gonna want to do is make sure you understand

699
00:34:58,640 --> 00:35:01,160
Speaker 3: what the cost will be to bridge this gap. That

700
00:35:01,239 --> 00:35:03,680
Speaker 3: if delaying to age seventy because you want to push

701
00:35:03,680 --> 00:35:05,840
Speaker 3: that out, if that means pulling an extra fifty to

702
00:35:05,880 --> 00:35:08,399
Speaker 3: sixty thousand per year for three years, that's one hundred

703
00:35:08,400 --> 00:35:10,319
Speaker 3: and fifty to one hundred and eighty drawn earlier from

704
00:35:10,400 --> 00:35:13,319
Speaker 3: the portfolio, I would say the difference there, and when

705
00:35:13,360 --> 00:35:16,200
Speaker 3: I've done this analysis for people, the difference is frequently

706
00:35:16,239 --> 00:35:17,680
Speaker 3: what kind of dollars are we talking about.

707
00:35:17,800 --> 00:35:19,399
Speaker 5: If it's an IRA and.

708
00:35:19,320 --> 00:35:21,319
Speaker 3: I have to pay taxes on these dollars or four

709
00:35:21,360 --> 00:35:23,040
Speaker 3: oh one K and I got to pay income taxes,

710
00:35:23,120 --> 00:35:26,200
Speaker 3: that has a huge impact, and that might mean a

711
00:35:26,239 --> 00:35:28,759
Speaker 3: greater sacrifice versus if these are taxable dollars or if

712
00:35:28,760 --> 00:35:30,839
Speaker 3: I've got them in a savings account or something that

713
00:35:30,880 --> 00:35:33,800
Speaker 3: can make a huge difference because I won't pay nearly

714
00:35:33,840 --> 00:35:34,680
Speaker 3: as much in taxes.

715
00:35:34,719 --> 00:35:36,520
Speaker 5: So that is usually the pivot point.

716
00:35:37,440 --> 00:35:41,800
Speaker 1: Coming up next, why millions more Americans are now actually

717
00:35:41,840 --> 00:35:44,920
Speaker 1: saving for retirement and what this trend teaches about the

718
00:35:44,960 --> 00:35:49,799
Speaker 1: one habit that tends to separate wealthy families from everyone else.

719
00:35:50,000 --> 00:35:52,560
Speaker 1: You're listening to Simply Money presented by all Worth Financial

720
00:35:52,560 --> 00:36:00,759
Speaker 1: on fifty five KRC, the talk station. You're listening to

721
00:36:00,760 --> 00:36:03,719
Speaker 1: Simply Money presented by all Worth Financial on Bob Sponsorller

722
00:36:03,760 --> 00:36:07,960
Speaker 1: along with Brian James. There's a really interesting trend happening

723
00:36:08,040 --> 00:36:11,120
Speaker 1: right now in the retirement world, and it tells us

724
00:36:11,160 --> 00:36:16,080
Speaker 1: something powerful about what actually builds wealth over time. In

725
00:36:16,120 --> 00:36:19,760
Speaker 1: this new trend or growing trend, Brian, is that small

726
00:36:19,800 --> 00:36:23,560
Speaker 1: businesses are embracing the four to oh one K plan

727
00:36:24,040 --> 00:36:25,120
Speaker 1: like never before.

728
00:36:26,440 --> 00:36:28,279
Speaker 3: So yeah, we want to be paying attention to this

729
00:36:28,360 --> 00:36:30,600
Speaker 3: because obviously, you know, lots of people out there have

730
00:36:30,640 --> 00:36:32,680
Speaker 3: a four oh one K and we want to learn

731
00:36:33,120 --> 00:36:34,880
Speaker 3: what we can take advantage of here. So this is

732
00:36:34,960 --> 00:36:38,000
Speaker 3: new data coming from Gusto, which is a payroll and

733
00:36:38,080 --> 00:36:41,640
Speaker 3: benefits provider. About six million more workers at these small

734
00:36:41,640 --> 00:36:43,440
Speaker 3: companies now have a four to oh one K is

735
00:36:43,560 --> 00:36:46,200
Speaker 3: just since twenty nineteen, So that brings the total to

736
00:36:46,280 --> 00:36:48,959
Speaker 3: more than twenty one million employees at firms with fewer

737
00:36:49,040 --> 00:36:51,360
Speaker 3: than one hundred workers who can now save through a

738
00:36:51,360 --> 00:36:54,600
Speaker 3: workplace plan. I remember early in my career being confused,

739
00:36:54,600 --> 00:36:57,040
Speaker 3: so that was always working for big banks, big financial institutions,

740
00:36:57,040 --> 00:36:58,560
Speaker 3: and I just sort of assumed, well, yeah, four oh

741
00:36:58,560 --> 00:36:59,600
Speaker 3: one K, it's what everybody has.

742
00:36:59,600 --> 00:37:01,960
Speaker 5: I've been here about that my entire life.

743
00:37:02,200 --> 00:37:04,640
Speaker 3: But then as I learned more and more, I understood

744
00:37:04,640 --> 00:37:07,200
Speaker 3: that that is not how it worked. So the smaller

745
00:37:07,239 --> 00:37:09,759
Speaker 3: the company, the less likely you were to have a

746
00:37:09,800 --> 00:37:11,920
Speaker 3: four oh one k to even have that advantage of

747
00:37:11,920 --> 00:37:14,800
Speaker 3: that opportunity there. So this is a really important change

748
00:37:14,800 --> 00:37:17,920
Speaker 3: that now we've got the ability for these smaller companies

749
00:37:17,920 --> 00:37:20,480
Speaker 3: to be able to efficiently do this. So there's actually

750
00:37:20,520 --> 00:37:23,200
Speaker 3: an example in this report. There's a business owner who

751
00:37:23,239 --> 00:37:25,960
Speaker 3: basically said she understands investing because she's an accountant, but

752
00:37:26,080 --> 00:37:28,279
Speaker 3: had never prioritized you. It sounds like a case of

753
00:37:28,320 --> 00:37:29,600
Speaker 3: I don't want to bring my work home. So she

754
00:37:29,680 --> 00:37:31,520
Speaker 3: never bothered looking at her own four oh one K,

755
00:37:31,760 --> 00:37:34,120
Speaker 3: even though she dealt with it as part of her job.

756
00:37:34,440 --> 00:37:36,440
Speaker 3: So she finally got it set up for her company.

757
00:37:36,520 --> 00:37:38,839
Speaker 3: So then once that system was in place, she did

758
00:37:38,920 --> 00:37:40,720
Speaker 3: start maxing it out. Now she's in a better spot.

759
00:37:40,719 --> 00:37:43,600
Speaker 3: But definitely a case of physician healed iyself.

760
00:37:43,640 --> 00:37:47,400
Speaker 1: I think, yeah, And we're also seeing, you know, another

761
00:37:47,520 --> 00:37:51,080
Speaker 1: good trend here small businesses are adopting something called a

762
00:37:51,120 --> 00:37:55,320
Speaker 1: pooled employer plan, were companies banded together to lower costs

763
00:37:55,680 --> 00:38:01,000
Speaker 1: and simplify plan administration. Brian, I love this trend because

764
00:38:01,040 --> 00:38:04,240
Speaker 1: now there's about three hundred and forty of these plans

765
00:38:04,280 --> 00:38:07,759
Speaker 1: now covering more than fifty one thousand dollars fifty one

766
00:38:07,800 --> 00:38:12,320
Speaker 1: thousand employees, many offering retirement benefits for the first time.

767
00:38:12,640 --> 00:38:15,000
Speaker 1: And let's face it, Brian, as you've already pointed out,

768
00:38:15,040 --> 00:38:18,120
Speaker 1: for younger people just getting started out, they need a

769
00:38:18,160 --> 00:38:20,600
Speaker 1: little guidance, they need a little nudge, and they need

770
00:38:20,640 --> 00:38:22,760
Speaker 1: some tools to get in the game and start putting

771
00:38:22,840 --> 00:38:25,960
Speaker 1: money away. And you know the fact that these four

772
00:38:26,000 --> 00:38:29,040
Speaker 1: oh one K things are evolving to reach out to

773
00:38:29,080 --> 00:38:32,000
Speaker 1: some of these smaller employeers. I think it's a wonderful thing.

774
00:38:32,400 --> 00:38:34,920
Speaker 1: Thanks for listening tonight. You've been listening to Simply Money,

775
00:38:34,960 --> 00:38:38,360
Speaker 1: presented by all Worth Financial on fifty five KRC, the

776
00:38:38,680 --> 00:38:39,200
Speaker 1: talk station