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Speaker 1: Give you a piece of my mind.

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Speaker 2: It's gross, gross incompetence of Talktiver.

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Speaker 3: People are scared fifty five krs the talk station.

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Speaker 1: Tonight, we're challenging the entire idea of retirement, why the

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Speaker 1: whole concept might be outdated, and what a better version

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Speaker 1: of the future really might look like. You're listening to

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Speaker 1: Simply Money, presented by all Worth Financial. I'm Bob Sponseller

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Speaker 1: along with Brian James. When you hear the word retirement,

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Speaker 1: what picture comes to mind? Sitting on a beach, golfing

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Speaker 1: five days a week, maybe that condo in Naples. But

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Speaker 1: here's the thing, and we see this all the time

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Speaker 1: with folks we work with that model. Nowadays, it's kind

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Speaker 1: of outdated and for a lot of you listening, especially

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Speaker 1: those of you who've done the hard work, built businesses,

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Speaker 1: saved well and are sitting on a pile of assets,

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Speaker 1: that old idea of retirement might actually be limiting. Brian,

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Speaker 1: this is a wonderful topic. Let's get into this tonight.

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Speaker 4: So, yeah, that traditional retirement plan make it to sixty five,

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Speaker 4: so Medicare kicks in, live off that pension, social Security,

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Speaker 4: maybe a little bit of savings that was built in

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Speaker 4: a totally different era generations ago.

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Speaker 2: It doesn't work anymore. Back then, people lived into their

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Speaker 2: mid seventies, Bob.

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Speaker 4: Healthcare costs were a lot lower, inflation wasn't that big

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Speaker 4: of a deal, and company pensions did a lot of

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Speaker 4: the heavy lifting. So we had a lot of people

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Speaker 4: who took careers with one company and never left because

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Speaker 4: that's the way that we did employment back then, was

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Speaker 4: to make sure we had people stick around for their

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Speaker 4: lifetimes and give them a benefit well into retirement. Nowadays

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Speaker 4: don't work that way, so we now kind of live

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Speaker 4: in a just in time employment world where when you

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Speaker 4: have reached a point where your role is no longer needed,

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Speaker 4: that will be it. It's discarded unused office supplies. At

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Speaker 4: this point, Well, I think the biggest change is what

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Speaker 4: you already hit on. I mean, it used to be retirement,

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Speaker 4: you know, lasted maybe five seven years, and now for

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Speaker 4: a lot of people that retire in their early to

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Speaker 4: mid sixties, you know, and we see this every day, Brian.

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Speaker 4: People are living into their late eighties, early nineties. We're

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Speaker 4: talking about retirement periods that can last up to thirty

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Speaker 4: years or more. So when you leave that, you know,

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Speaker 4: longtime career and you're thinking about the next twenty five

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Speaker 4: to thirty five years instead of the next five to

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Speaker 4: seven years. That is a that's a huge paradigm shift

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Speaker 4: just mentally and how you look at the rest of

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Speaker 4: your life.

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Speaker 2: And that's what we're really talking about tonight.

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Speaker 4: Yeah, and that's true even for people with five to

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Speaker 4: ten million dollars, right, that's a lot of money. But

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Speaker 4: you still have to think about sequence of returns. And

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Speaker 4: what we mean by that is when do the bad

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Speaker 4: times come. We know there will be up markets and

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Speaker 4: down markets. It's when the down markets hit, which which

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Speaker 4: we cannot control. And I would hope everybody has by

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Speaker 4: now dispelled the notion that we can try to sidestep

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Speaker 4: that and you know, and miss out on the bad times.

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Speaker 4: It doesn't work that way. We're just going to end

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Speaker 4: up in the long run leaving a lot of money

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Speaker 4: on the table that we should be bearing, airing through

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Speaker 4: and gaining through growth. But then you've got long term

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Speaker 4: care costs keeping up with inflation over all that time.

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Speaker 4: And not to mention, the markets are just different now

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Speaker 4: and interest rates have been all over the place. You know,

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Speaker 4: it's not your grandparents or even your great grandparents' retirement anymore.

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Speaker 2: We're in a global economy now.

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Speaker 4: Is something that happens, you know, a butterfly flaps its

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Speaker 4: wings in China and the United States gets a cold.

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Speaker 4: That kind of thing happens. There's no such thing as

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Speaker 4: set it and forget it. Investing anymore, we've got to

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Speaker 4: be a little more nimble than we have been in

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Speaker 4: the past because things move so quickly. And then finally,

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Speaker 4: on the mentally side, people are just wired differently today.

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Speaker 4: It's not just about escape in retirement. It's about really

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Speaker 4: staying sharp and staying relevant. And this has everything to

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Speaker 4: do with the fact that we're not talking about a

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Speaker 4: ten year retirement anymore. You're talking about thirty, maybe even

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Speaker 4: forty years of not having a reason to get out

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Speaker 4: of bed necessarily unless you construct it for yourself.

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Speaker 2: And that changes how people think and operate.

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Speaker 1: So let's throw out a different term. And there's been

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Speaker 1: multiple books written on this topic. We're not we're not

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Speaker 1: mentioning anything tonight that you know isn't out there. People

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Speaker 1: are studying this and I think what's interesting for folks,

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Speaker 1: And Brian, let's face it, you and I have been

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Speaker 1: you know, in this industry for over thirty years, we

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Speaker 1: have really lived through the evolution of retirement by guiding

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Speaker 1: clients through this phase. So we're gonna throw out a

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Speaker 1: term that we'll just call rewirement instead of retirement. And

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Speaker 1: what do we mean kind of a phased retirement or

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Speaker 1: just you know, rethinking what the rest of your life

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Speaker 1: is going to look like. And and Brian to your point,

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Speaker 1: the money is one thing, but it comes down for

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Speaker 1: a lot of people that we work with. You know,

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Speaker 1: just what am I gonna do? How am I gonna

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Speaker 1: spend my time? How am I gonna stay mentally sharp

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Speaker 1: and engaged? And there's been a lot of healthcare studies

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Speaker 1: out there that say people that just fold up their

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Speaker 1: tent and just sit in a chair and watch HBO

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Speaker 1: all day, I mean, they they get unhealthy very quickly.

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Speaker 1: I've seen this happen a couple times, you know, in

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Speaker 1: my own practice.

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Speaker 2: I'm sure you have as well well.

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Speaker 1: Versus people that are proactive, you know, working on charitable boards,

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Speaker 1: doing some mentoring, even launching a second career.

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Speaker 2: Let's let's get into what people are actually doing.

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Speaker 1: I don't like talking about the doom and gloom stuff

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Speaker 1: all the time. Let's talk about what some people are

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Speaker 1: actually out there doing that you and I work with

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Speaker 1: every day.

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Speaker 2: That are positive.

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Speaker 4: Yeah, So the happy things that I've seen people do

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Speaker 4: is it seems to work the best when people get

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Speaker 4: to a baby step into retirement a little bit. And

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Speaker 4: sometimes that can mean I'm gonna work with my boss

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Speaker 4: and we'll figure out how I can only work two

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Speaker 4: days a week, or we'll give back some some duties.

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Speaker 4: That kind of thing that can work, But it can

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Speaker 4: also be a slippery slope because you're still the smartest

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Speaker 4: person in the room. If you're working with the exact

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Speaker 4: same team, everybody knows what's in your brain, and they're

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Speaker 4: gonna want it to complete their own jobs because the

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Speaker 4: rest of your team is not reducing their hours. So

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Speaker 4: you're likely gonna wind up getting sucked into the same

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Speaker 4: things you always did just because you're still around. And

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Speaker 4: that's not a bad thing, but you can lose years

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Speaker 4: feeling obligated to keep up on those kinds of things.

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Speaker 4: So it's definitely worth considering see what's out there. But

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Speaker 4: you also might might even just go look, and I

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Speaker 4: always tell people this all the time, go on indeed

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Speaker 4: dot com and just throw in any random keywords for

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Speaker 4: any hobby or anything you're truly interested in, and you

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Speaker 4: would be shocked what you might find. That can be

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Speaker 4: kind of as you mentioned, Bob, a second career. It

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Speaker 4: can be something you've never done before. Maybe it's something

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Speaker 4: you don't even have much experience with, but if you're

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Speaker 4: passionate about it, that can come through and carry you.

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Speaker 2: And you don't need the salary.

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Speaker 4: That an experienced person in that field would gain, You

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Speaker 4: don't need the benefits.

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Speaker 2: That's the point of retirement.

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Speaker 4: You can can kind of find your own path and

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Speaker 4: figure out something you want to do versus something you

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Speaker 4: have to do. And let me let me drive this

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Speaker 4: point home. It's better to be the dumbest person in

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Speaker 4: the room than the smartest person in the room.

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Speaker 2: If you're trying to reduce your hours.

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Speaker 1: Well, you're making a point I was going to bring up,

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Speaker 1: you know, because we do see a lot of people

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Speaker 1: that go back to work for the company they retired

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Speaker 1: from and do it on a part time basis. What

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Speaker 1: I what I tend to see happen is people assume,

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Speaker 1: you know, they they have you pigeonholed and being the

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Speaker 1: go to person, the person that can get things done,

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Speaker 1: and you know, yeah, they're gonna pay you to get

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Speaker 1: things done, But before you know it, you get sucked

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Speaker 1: into doing more than just that ten hour a week

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Speaker 1: part time gig that you were looking for. And now

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Speaker 1: you're suddenly having to miss time with the grandkids, or

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Speaker 1: miss your golf game with your buddies, or miss that

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Speaker 1: cruise that you wanted to take because you're back in

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Speaker 1: there mentally engaged and trying to quote unquote get things

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Speaker 1: done for the company. Yeah, they pay you to do that,

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Speaker 1: but if all you were in this for was for money,

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Speaker 1: you'd still be working and earning the full time salary.

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Speaker 2: So it's an excellent point.

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Speaker 1: You know, sometimes it makes sense to do a complete

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Speaker 1: paradigm shift and be, to your point, the dumbest person

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Speaker 1: in the room rather than the guy or or that

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Speaker 1: they say yeah, yeah, yeah. Now. What I've seen work

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Speaker 1: really well is is folks that you know. Number one,

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Speaker 1: the point I want to drive home is stay connected.

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Speaker 1: Don't disconnect from your whole network just because you're retired.

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Speaker 1: Stay engaged, have the lunches, hang out with people. And

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Speaker 1: I've seen this work a lot of times. People get

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Speaker 1: into some nonprofit consulting works and on boards they say,

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Speaker 1: mentally engaged.

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Speaker 2: They stay socially.

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Speaker 1: Connected with people that have met the world to them

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Speaker 1: for twenty thirty forty years and they're able to contribute

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Speaker 1: and have time to travel and play with the grandkids

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Speaker 1: and all that. So you got to be intentional about

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Speaker 1: this and that is a huge part of really doing

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Speaker 1: retirement planning.

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Speaker 4: Yeah, and I think, Bob, if you if you're somebody

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Speaker 4: who works for a large company, oftentimes there are alumni

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Speaker 4: groups out there full of people just like you. And

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Speaker 4: they're not only full of people who are retired and

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Speaker 4: have moved on. A lot of times they pick up

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Speaker 4: people who are within maybe five to ten years of

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Speaker 4: retirement because those folks want to hear about life on

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Speaker 4: the other side, and they're going to want to ask

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Speaker 4: questions about how did you do this, How did you

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Speaker 4: answer this question? You know, when you made your retirement decision,

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Speaker 4: how did you ease out of your position? You know,

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Speaker 4: how did you talk to hr? All those kinds of things,

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Speaker 4: and it will keep you connected as well. You'll feel

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Speaker 4: the value of sharing your experience with younger people so

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Speaker 4: you can help them out and just kind of stand

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Speaker 4: in the mix and have any reason to leave the

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Speaker 4: house in February is really sometimes what it boils down to.

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Speaker 1: You're listening to Simple Money, presented by All with Financial

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Speaker 1: on Bob Sponseller along with Brian James. Well, Brian, let's

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Speaker 1: pivot back to the money part of this, because this

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Speaker 1: is real again. If you're looking at a period of

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Speaker 1: retirement that's you know, instead of five to seven years,

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Speaker 1: it's twenty five to thirty five years. There are additional

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Speaker 1: financial considerations you really have to manage on an ongoing

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Speaker 1: basis for a longer term retirement period.

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Speaker 2: Let's get into what some of those are.

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Speaker 1: What are the things that we need to be doing

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Speaker 1: proactively from a financial standpoint once we're retired.

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Speaker 2: Well, let's talk about income planning, right.

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Speaker 4: Income is kind of important to all this that it

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Speaker 4: becomes different when you don't want to when you know,

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Speaker 4: if you don't stop working cold Turkey, you may still

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Speaker 4: have some income streams coming in that may trigger you

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Speaker 4: wanting to delay Social Security because there's only a certain

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Speaker 4: amount you can earn before you have to start giving

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Speaker 4: back some of your Social Security Because you have W

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Speaker 4: two income that only affects your retirement from sixty two

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Speaker 4: to full retirement aid. So you only have to think

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Speaker 4: about that from sixty two to either sixty six or

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Speaker 4: sixty seven, depending on when you were born. But that

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Speaker 4: is an impact if you're gonna keep working. Speaking of taxes,

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Speaker 4: that's a huge piece of this too. If you're still

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Speaker 4: earning income, you have to coordinate that with your distributions.

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Speaker 4: If you are of RMD age require minimum distribution meaning

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Speaker 4: seventy three or so, then you're gonna have to work

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Speaker 4: that into ROTH. Conversions can play a role here. All

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Speaker 4: these things are good, except they do push us into

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Speaker 4: higher brackets, so they're definitely required. The required math right

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Speaker 4: math is required in retirement. So you're gonna want to

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Speaker 4: think about how to make these decisions. And it's not

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Speaker 4: about don't get hung up on the idea that retirement

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Speaker 4: is about avoiding taxation. That is almost never the answer.

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Speaker 4: The answer is how do I mitigate it? You're not

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Speaker 4: gonna avoid it. There's no such thing. Avoiding tax early

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Speaker 4: in retirement means you're backloading taxes for laid in retirement

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Speaker 4: and you'll have at that point you'll have little to nothing

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Speaker 4: you can do except smile and write a check to

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Speaker 4: the irs. So be proactive and understand what the tax

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Speaker 4: implications are of the steps you take now, not only

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Speaker 4: what the benefits and sacrifices are now, but what are

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Speaker 4: those in the future. Their combination of those two timeframes

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Speaker 4: is really where the right answer is.

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Speaker 2: Yeah.

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Speaker 1: I don't know about you, Brian, but a lot of

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Speaker 1: times people say, you know, I'm talking about you know,

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Speaker 1: needing or using an accountant or a good CPA. A

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Speaker 1: lot of people will say, well, shoot, when I retire,

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Speaker 1: this is going to get really simple because all I'm

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Speaker 1: going to have is my pension and Social Security and

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Speaker 1: I don't need any complex planning or what.

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Speaker 2: What I find is the opposite. When people are.

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Speaker 1: Earning a huge, you know, W two pay check, there's

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Speaker 1: less things we can do to reduce taxes because, let's

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Speaker 1: face it, you're earning a high income income is always taxable.

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Speaker 1: Not a whole lot you can do. The planning, the

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Speaker 1: need for planning, and the opportunity for planning oftentimes comes

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Speaker 1: after retirement. So to me, that's a paradigm shift. You

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Speaker 1: should certainly have a good CPA on board, working together

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Speaker 1: with a good fiduciary financial advisor, because there is a

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Speaker 1: lot of moving parts that you have control over during retirement.

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Speaker 1: In terms of how you manage your income, your taxes,

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Speaker 1: where you take your income from, and it's critical to

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Speaker 1: have a team of planners in place to help you

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Speaker 1: maximize that opportunity. Here's the all Worth advice, the old

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Speaker 1: retirement playbook, It is outdated. Your second act should be

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Speaker 1: about purpose, passion, and staying engaged, not just escaping from

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Speaker 1: your current job. Coming up next, why some tax payers

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Speaker 1: will see bigger refunds and why that's not necessarily a

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Speaker 1: good thing. Plus why some are actually earning less in

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Speaker 1: return in their pocket that their investments are actually making

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

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Speaker 1: five KRC the talk station.

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Speaker 5: Yeah, breaking news coming to you live right now on

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Speaker 5: the way home.

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Speaker 6: Ex.

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Speaker 2: We have an accident flowing things down there when you.

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Speaker 3: Need us weird there, fifty five krc D talkstation.

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Speaker 6: Allworth Financial a registered investment advisory firm. Any ideas presented

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Speaker 6: during this program are not intended to provide specific financial advice.

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Speaker 6: You should consult your own financial advisor, tax consultant, or

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Speaker 6: a state planning attorney to conduct your own due diligence.

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Speaker 1: You're listening to Simply Money, presented by all Worth Financial

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Speaker 1: on Bob Sponsller along with Brian James. If you can't

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Speaker 1: listen to Simply Money Live every night, subscribe and get

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Speaker 1: our daily podcast. You can listen the following morning during

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Speaker 1: your commute or at the gym. And if you think

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Speaker 1: your friends or family could use some financial advice, tell

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Speaker 1: them about us as well. Just search Simply Money on

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Speaker 1: the iHeart app up or wherever you find your podcast.

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Speaker 2: Straight Ahead. Too many retirement accounts.

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Speaker 1: New Secure Act rules, and a long neglected health savings account.

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Speaker 1: We're going to break all that down and more what

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Speaker 1: smart investors should be doing in each of those cases.

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Speaker 1: The IRS has announced delays in how it's handling certain

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Speaker 1: tax season tasks. But here's the surprising part. Some people

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Speaker 1: are going to end up with bigger refunds because of it.

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Speaker 2: What's going on here, Brian, Well, who's likely to see

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Speaker 2: a higher refund?

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Speaker 4: Well, people with multiple deductions, credits, if you added a child,

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Speaker 4: paid for education, if there's maybe there's a big charitable donation,

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Speaker 4: or if you took advantages of some tax breaks like

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Speaker 4: the clean vehicle credit or energy efficient home upgrades, all

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Speaker 4: those things can boost your refund. So if you've considered

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Speaker 4: those projects, make sure you're taking that into account that

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Speaker 4: can help pay for help them pay for themselves. If

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Speaker 4: you over withheld from your paycheck. If you didn't, maybe

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Speaker 4: you didn't adjust that withholding after a job change or

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Speaker 4: after a raise, or you might want to be making

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Speaker 4: sure if you've switched from ROTH to traditional four to

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Speaker 4: one K contributions, make sure you're withholding it still in

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Speaker 4: line to keep you where you need to be. But

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Speaker 4: you could have sent too much to the irs this year,

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Speaker 4: so that overpayment, of course.

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Speaker 2: Comes back to you as a refund.

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Speaker 4: For business owners, real estate investors, maybe your income dropped

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Speaker 4: this year, you took some losses, your taxable income could

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Speaker 4: have dropped.

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Speaker 2: That might result in a larger.

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Speaker 4: Refund, especially if you continue to pay quarterly estimates estimates

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Speaker 4: assuming that your income was the same as last year.

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Speaker 1: Yeah, it feels like this, This entire show might end

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Speaker 1: up being the importance of working with a good CPA

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Speaker 1: and a fiduciary financial advisor.

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Speaker 2: Brian.

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Speaker 1: To me, this comes down to proactive communication and a

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Speaker 1: lot of times people just don't take the time to.

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Speaker 2: Communicate with their tax professional. Here's what I mean.

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Speaker 1: If you're somebody where you know to your point some

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Speaker 1: of these credits happened last year and aren't gonna happen

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Speaker 1: this year, or vice versa. Or you do own a

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Speaker 1: business and your income fluctuates quite a bit. You got

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Speaker 1: to communicate that stuff to the person that does your taxes,

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Speaker 1: especially if you're filing quarterly estimates, because you don't run

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Speaker 1: a run into a situation where you got to write

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Speaker 1: a huge check at the end of the year or

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Speaker 1: next April, or you know what we're talking about tonight,

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Speaker 1: getting a huge check back next April. I mean, let's

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Speaker 1: face it, would you give a bank twenty thousand dollars

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Speaker 1: of your own money to hold for twelve months and

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Speaker 1: then give it back to you with no interest next April.

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Speaker 1: Probably not. I mean, we see people calling us, emailing

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Speaker 1: us all the time. You know, they're going and shopping

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Speaker 1: for different savings accounts rates. I mean they're quibbling over

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Speaker 1: you know, ten basis points on a savings account interest rate.

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Speaker 1: But yet they think nothing of having their money tied

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Speaker 1: up with the irs for an entire year earning nothing,

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Speaker 1: you know, zero.

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Speaker 4: So people who get excited about that, hey, I got

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Speaker 4: a big refund coming in the coming in April. Well

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Speaker 4: that's great, except you're leaving some opportunity on the table.

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Speaker 1: Here you're listening to simply money presented by all Worth

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Speaker 1: Financial on Bob Sponseller along with Brian and James.

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Speaker 2: Here's something that might surprise you.

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Speaker 1: Even if you're invested in a solid mutual fund or ETF,

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Speaker 1: a real well performing fund, there is a very good

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Speaker 1: chance you're not actually earning the returns that are reported

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Speaker 1: by that fund every year. It's called the behavior gap. Brian,

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Speaker 1: get into this. This, this is really important. We see

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Speaker 1: this often as well. So yeah, this stat is coming

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Speaker 1: from morning Star.

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Speaker 4: New research shows that investors on average are earning less

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Speaker 4: than the funds that they invest in, Which that sounds

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Speaker 4: kind of strange, right, If I own a fund, I

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Speaker 4: get whatever returns, don't I? Well, over the past ten years,

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Speaker 4: here's the numbers behind it, the average investor earned about

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Speaker 4: six point three percent a year, But of the funds

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Speaker 4: that morning Star looked at in this study, those were

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Speaker 4: averaging about seven point three percent. So some people are going, well,

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Speaker 4: that's the must be fees. They're giving that back in fees.

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Speaker 2: No they're not.

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Speaker 4: That's not the point. Where did that missing one percent go?

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Speaker 4: It was lost in timing people tend to jump into

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Speaker 4: these funds after they've had a good run. I just

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Speaker 4: had a conversation yesterday with somebody who was looking at

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Speaker 4: their retirement plan and asked me to look at it.

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Speaker 2: And he said, yeah, you know what, don't worry about it.

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Speaker 4: I'm just going to take a look at what happened

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Speaker 4: last year, two years ago, and then I'll just pick

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Speaker 4: those funds. And they said, wait a minute, Bengals went

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Speaker 4: to the super Bowl in twenty twenty one. Does that

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Speaker 4: mean they were going to win in twenty two and

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Speaker 4: twenty three.

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Speaker 2: Please don't talk about the Bengals.

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Speaker 1: I'm still I'm still trying to pull myself out of

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Speaker 1: the depression state.

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Speaker 2: But no, you know, finish your point. Yeah, so so again,

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Speaker 2: morning star. I looked at both. This isn't just you know,

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Speaker 2: a handful of funds.

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Speaker 4: He looked at both mutual funds and exchange traded funds

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Speaker 4: because ETFs are even easier to jump in and out

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Speaker 4: of index funds. These low cost, passively managed funds did

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Speaker 4: a little bit better. But even then, the average investor

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Speaker 4: still underperforms the fund. And it has to do with behavior,

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Speaker 4: you know, stalling on making that decision. Maybe maybe if

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Speaker 4: somebody thought about this earlier this year in April and

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Speaker 4: thought about how the market's kind of bumpy, I don't

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Speaker 4: want to invest, and decided to wait until June while

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Speaker 4: money was left.

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Speaker 2: On the table.

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Speaker 4: So when we look at the returns that mutual funds

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Speaker 4: have had or any investment, frankly, you were looking at

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Speaker 4: an agnostic year over year your type of return scenario,

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Speaker 4: not when did somebody out there get the guts to

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Speaker 4: go ahead and invest and not read the headlines anymore.

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Speaker 4: So those numbers on that piece of paper you're looking

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Speaker 4: at have nothing to do with the human element of

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Speaker 4: all these different things.

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Speaker 1: The flip side of this, Brian, and we talk about

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Speaker 1: this often on this show, is some people, not all,

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Speaker 1: but some people use their growth mutual funds like your

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Speaker 1: savings account.

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Speaker 2: Here's what I mean.

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Speaker 1: If people know they're gonna, you know, remodel their bathroom

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Speaker 1: or buy a car, or take a cruise or something

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Speaker 1: like that, or an expensive vacation, they just they want

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Speaker 1: to pull the money out of that high growth fund,

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Speaker 1: you know, whenever the bill is due for that particular

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Speaker 1: you know spending, you know event that's going to happen.

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Speaker 1: Talk to your advisor you know ahead of time, because

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Speaker 1: you know it it it makes sense to get that

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Speaker 1: money out of harm's way, get it out of the

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Speaker 1: market with enough time to prevent some type of uh,

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Speaker 1: you know, market correction or just a temporary drop due

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Speaker 1: to a news event something like that.

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Speaker 2: Again, it comes down.

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Speaker 1: To communication with your advisor to try to you know,

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Speaker 1: we're not trying to date day trade this stuff or

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Speaker 1: get into it in an extensive market timing. But there is

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Speaker 1: some common sense involved here. I mean, if you're the

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Speaker 1: market's at an all time high and you know you're

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Speaker 1: going to be doing something over the next two to

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Speaker 1: three months, it might make sense to take a little

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Speaker 1: money off the table. Here's the all worth advice. Even

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Speaker 1: great funds can't protect you from poor timing. The best

439
00:20:31,119 --> 00:20:35,080
Speaker 1: way to grow wealth isn't chasing returns. It's avoiding the

440
00:20:35,160 --> 00:20:38,760
Speaker 1: costly mistakes They can keep you from earning what your

441
00:20:38,800 --> 00:20:44,240
Speaker 1: investments are already providing to you. Coming up next, assisted living,

442
00:20:44,440 --> 00:20:47,960
Speaker 1: nursing homes or staying home. What's the right move for

443
00:20:48,080 --> 00:20:53,159
Speaker 1: your parents or for you? These are tough, costly decisions.

444
00:20:53,440 --> 00:20:57,360
Speaker 1: Will help you plan before the situation becomes urgent. Coming

445
00:20:57,440 --> 00:20:59,760
Speaker 1: up next, you're listening to Simply Money, presented by All

446
00:20:59,800 --> 00:21:02,640
Speaker 1: Words Financial on fifty five KR see.

447
00:21:02,240 --> 00:21:05,560
Speaker 2: The talk station an iHeartRadio station.

448
00:21:09,880 --> 00:21:12,600
Speaker 1: You're listening to Simply Money. It's not about all Worth Financial.

449
00:21:12,640 --> 00:21:16,399
Speaker 1: I'm Bob Sponsorer along with Brian James. It's one of

450
00:21:16,480 --> 00:21:19,400
Speaker 1: the hardest decisions a family has to make, and it

451
00:21:19,520 --> 00:21:22,600
Speaker 1: never feels like there's a perfect answer. Brian, I know

452
00:21:22,680 --> 00:21:25,160
Speaker 1: this is definitely more of an art than a science.

453
00:21:25,200 --> 00:21:29,280
Speaker 1: We're talking about senior living, whether to do assisted living,

454
00:21:29,560 --> 00:21:33,440
Speaker 1: nursing homes, in home care, or just trying to keep

455
00:21:33,480 --> 00:21:35,800
Speaker 1: mom and dad at home. And the truth is these

456
00:21:35,920 --> 00:21:40,840
Speaker 1: decisions are as emotional as they are financial. Let's start

457
00:21:40,880 --> 00:21:43,720
Speaker 1: by laying out what the options even are and what

458
00:21:43,760 --> 00:21:46,560
Speaker 1: the typical cost is for each of these options.

459
00:21:46,680 --> 00:21:48,480
Speaker 4: Now, this can be a little bit of alphabet soup.

460
00:21:48,480 --> 00:21:50,119
Speaker 4: You're looking at a lot of different words that are

461
00:21:50,160 --> 00:21:52,359
Speaker 4: gonna sound familiar, but they're all gonna run together. So

462
00:21:52,560 --> 00:21:54,760
Speaker 4: we'll start with the different flavors of the types of

463
00:21:54,760 --> 00:21:57,840
Speaker 4: care you can have. So first off is independent living.

464
00:21:57,920 --> 00:22:00,760
Speaker 4: This is more like senior apartments. No re care is

465
00:22:00,800 --> 00:22:03,320
Speaker 4: provided there, but it's kind of ready at hand if

466
00:22:03,320 --> 00:22:06,119
Speaker 4: something is needed and you're in a community of people

467
00:22:06,240 --> 00:22:08,360
Speaker 4: kind of your own, your own age, and.

468
00:22:08,280 --> 00:22:09,400
Speaker 2: A lot of commonalities there.

469
00:22:09,400 --> 00:22:11,520
Speaker 4: That runs about three thousand dollars a month for just

470
00:22:11,600 --> 00:22:14,880
Speaker 4: that kind of bare minimum, with help nearby but not

471
00:22:14,920 --> 00:22:18,160
Speaker 4: necessarily right up in your face every day. That next

472
00:22:18,160 --> 00:22:20,560
Speaker 4: step up, though, Bob, is assisted living. This is going

473
00:22:20,600 --> 00:22:24,200
Speaker 4: to include help with meals, medication, and just daily tasks

474
00:22:24,200 --> 00:22:26,560
Speaker 4: of keeping the household in shape and taking care of

475
00:22:26,600 --> 00:22:29,040
Speaker 4: the things you need to. That'll run anywhere from forty

476
00:22:29,040 --> 00:22:32,400
Speaker 4: five hundred to seven thousand dollars monthly. And again you're

477
00:22:32,440 --> 00:22:34,960
Speaker 4: still kind of independent, but you've got somebody hanging around

478
00:22:35,240 --> 00:22:38,639
Speaker 4: that can help with those again, those daily routines. And

479
00:22:38,680 --> 00:22:40,680
Speaker 4: then where we get into the bigger ones is really

480
00:22:40,720 --> 00:22:42,439
Speaker 4: memory care. And a lot of people go through this.

481
00:22:43,520 --> 00:22:46,919
Speaker 4: It can be very challenging, of course, aside from the finances,

482
00:22:46,960 --> 00:22:51,959
Speaker 4: but so of course we're talking about Alzheimer's, dimension, dementia, Parkinson's,

483
00:22:51,960 --> 00:22:53,920
Speaker 4: those kinds of things. You're looking at six to ten

484
00:22:53,960 --> 00:22:57,040
Speaker 4: thousand dollars per month for that level of care. And

485
00:22:57,080 --> 00:22:58,800
Speaker 4: then one more step up from that when we've got

486
00:22:58,880 --> 00:23:01,359
Speaker 4: nursing home care. This is really really where we're getting to.

487
00:23:01,440 --> 00:23:04,280
Speaker 4: What we've got a lot of medical issues and kind

488
00:23:04,320 --> 00:23:07,240
Speaker 4: of a really end of life type care. Full medical

489
00:23:07,240 --> 00:23:09,760
Speaker 4: care runs about nine to twelve thousand dollars a month

490
00:23:10,119 --> 00:23:11,200
Speaker 4: for a situation like that.

491
00:23:11,280 --> 00:23:12,080
Speaker 2: But the thing I want to.

492
00:23:12,000 --> 00:23:13,840
Speaker 4: Point out here, Bob, is a lot of people will

493
00:23:13,840 --> 00:23:15,920
Speaker 4: do a financial plan for people who are young and healthy,

494
00:23:15,960 --> 00:23:19,280
Speaker 4: maybe just retired sixties, maybe early seventies, and they'll start

495
00:23:19,280 --> 00:23:20,960
Speaker 4: to look at these numbers and they'll say, Okay, I

496
00:23:21,000 --> 00:23:22,639
Speaker 4: have got to be able to take this plan that

497
00:23:22,680 --> 00:23:25,040
Speaker 4: we just built and layer on an extra ten thousand

498
00:23:25,080 --> 00:23:26,879
Speaker 4: dollars a month for one of these days.

499
00:23:26,960 --> 00:23:27,800
Speaker 2: That is not the case.

500
00:23:27,880 --> 00:23:29,680
Speaker 4: Remember when you're in one of these more elaborate, more

501
00:23:29,680 --> 00:23:32,560
Speaker 4: expensive type homes, you're not traveling anymore, you're not running

502
00:23:32,560 --> 00:23:34,600
Speaker 4: to the grocery store anymore. There's a lot of bills

503
00:23:34,600 --> 00:23:37,080
Speaker 4: that are being covered for you in that ten thousand

504
00:23:37,119 --> 00:23:39,240
Speaker 4: a month. So it might be more than you're actually

505
00:23:39,320 --> 00:23:41,800
Speaker 4: spending currently to run your lives, but it's not a

506
00:23:41,840 --> 00:23:44,560
Speaker 4: complete extra expense added on to the top. Be careful

507
00:23:44,600 --> 00:23:46,520
Speaker 4: not to go too far down that rabbit hole of

508
00:23:46,560 --> 00:23:48,320
Speaker 4: how scary it will be to go through this type

509
00:23:48,320 --> 00:23:50,640
Speaker 4: of thing. It's expensive, for sure, but it's not as

510
00:23:50,920 --> 00:23:52,800
Speaker 4: terrifying as it might seem.

511
00:23:53,400 --> 00:23:55,639
Speaker 1: Yeah, the flip side of that, Brian, And I'm living

512
00:23:55,680 --> 00:23:58,520
Speaker 1: through this right now with an actual client. I mean,

513
00:23:58,600 --> 00:24:01,360
Speaker 1: it is a little bit terrible. And here's what I mean.

514
00:24:02,400 --> 00:24:07,080
Speaker 1: This person is recently widowed, she wants to stay in

515
00:24:07,080 --> 00:24:11,800
Speaker 1: her home, and she has multiple in home caregivers coming

516
00:24:11,840 --> 00:24:16,560
Speaker 1: in for a variety of reasons. So when you layer

517
00:24:16,640 --> 00:24:19,199
Speaker 1: on some of these in home care folks, depending on

518
00:24:19,240 --> 00:24:21,639
Speaker 1: what they provide, I mean, in this one case, and

519
00:24:21,680 --> 00:24:26,480
Speaker 1: I'm talking about one, this particular lady is spending upwards

520
00:24:26,480 --> 00:24:29,879
Speaker 1: of twenty thousand dollars a month to stay in her

521
00:24:29,920 --> 00:24:32,240
Speaker 1: home and have all these people come in and provide

522
00:24:32,280 --> 00:24:35,800
Speaker 1: all these you know services. So thankfully, you know, she's

523
00:24:35,840 --> 00:24:38,960
Speaker 1: in a situation where she can at least now afford

524
00:24:39,040 --> 00:24:41,399
Speaker 1: all that. But boy, that's a lot of money. And

525
00:24:41,800 --> 00:24:45,080
Speaker 1: I guess that leads to the point that really makes

526
00:24:45,119 --> 00:24:50,320
Speaker 1: this difficult is emotionally everybody, Brian. Everybody wants to stay

527
00:24:50,720 --> 00:24:54,200
Speaker 1: in their home as long as they can. And you

528
00:24:54,320 --> 00:24:56,359
Speaker 1: got two things you got to look at here, and

529
00:24:56,400 --> 00:24:58,800
Speaker 1: I've done. I'm in the middle of dealing this all,

530
00:24:59,280 --> 00:25:03,720
Speaker 1: dealing with this also with multiple families, there's communication needs

531
00:25:03,760 --> 00:25:06,000
Speaker 1: that need you know, need to go on between the

532
00:25:06,040 --> 00:25:08,840
Speaker 1: siblings and the kids. Who's going to provide this kind

533
00:25:08,840 --> 00:25:12,040
Speaker 1: of care to enable mom or dad or both to

534
00:25:12,080 --> 00:25:15,440
Speaker 1: stay at home? And then financially what does this all mean?

535
00:25:15,480 --> 00:25:17,720
Speaker 1: Because again the default is I want to.

536
00:25:17,680 --> 00:25:19,400
Speaker 2: Stay in my home. I want to stay in my home.

537
00:25:19,440 --> 00:25:20,880
Speaker 2: I want to you know, be where I am.

538
00:25:20,920 --> 00:25:25,440
Speaker 1: But it costs money, time, effort, angst on the part

539
00:25:25,520 --> 00:25:28,040
Speaker 1: of the family that you're having come in to help you.

540
00:25:28,800 --> 00:25:32,800
Speaker 1: And these communications and discussions need to take place sooner

541
00:25:32,920 --> 00:25:37,080
Speaker 1: rather than later so that you don't disrupt multiple families

542
00:25:37,520 --> 00:25:40,159
Speaker 1: on top of all the money decisions to make all

543
00:25:40,200 --> 00:25:42,840
Speaker 1: this work, it could get very very difficult.

544
00:25:43,040 --> 00:25:44,600
Speaker 4: So yeah, we want to be paying attention to a

545
00:25:44,640 --> 00:25:47,359
Speaker 4: lot of these things and it's it can be very

546
00:25:47,440 --> 00:25:49,800
Speaker 4: very stressful. So what should you be doing? Well, think

547
00:25:49,800 --> 00:25:51,879
Speaker 4: about your own future here, what do you want? And

548
00:25:52,080 --> 00:25:54,320
Speaker 4: again this may help you think about what you're even

549
00:25:54,320 --> 00:25:57,000
Speaker 4: if you're doing this early and maybe you feel too early,

550
00:25:57,080 --> 00:25:59,040
Speaker 4: but you might be helping your parents and other relatives

551
00:25:59,200 --> 00:26:01,359
Speaker 4: simply by you thinking about it, you can have better

552
00:26:01,359 --> 00:26:04,080
Speaker 4: conversations with them. Is it important to you to age

553
00:26:04,119 --> 00:26:06,159
Speaker 4: at home? Could your house even handle that?

554
00:26:06,280 --> 00:26:06,399
Speaker 2: Right?

555
00:26:06,480 --> 00:26:06,520
Speaker 6: Is?

556
00:26:06,640 --> 00:26:07,720
Speaker 4: Are there are a lot of steps are there are

557
00:26:07,720 --> 00:26:08,879
Speaker 4: a lot of things that are going to make it

558
00:26:08,920 --> 00:26:11,600
Speaker 4: tough for somebody who's a little bit limited with mobility.

559
00:26:11,840 --> 00:26:14,320
Speaker 4: Do you have long term care insurance or have you

560
00:26:14,359 --> 00:26:17,400
Speaker 4: looked into asset based policies that might give you some flexibility.

561
00:26:17,400 --> 00:26:19,720
Speaker 4: One of my all time favorite things to do for

562
00:26:19,800 --> 00:26:22,320
Speaker 4: people is if we've got a life insurance policy, for example,

563
00:26:22,320 --> 00:26:24,160
Speaker 4: that was purchased when the kids were new, or maybe

564
00:26:24,160 --> 00:26:26,320
Speaker 4: even before the kids were around, and now those kids

565
00:26:26,359 --> 00:26:29,879
Speaker 4: have kids, then sometimes those policies can have cash values

566
00:26:29,920 --> 00:26:32,080
Speaker 4: built up in them and we really no longer need

567
00:26:32,119 --> 00:26:34,199
Speaker 4: the death benefits. Well, one of the things that can

568
00:26:34,200 --> 00:26:35,560
Speaker 4: be done. You can, of course cash it out and

569
00:26:35,640 --> 00:26:37,520
Speaker 4: run away and pay taxes and all that. That's always

570
00:26:37,520 --> 00:26:39,320
Speaker 4: a choice, but a lot of times what you can

571
00:26:39,359 --> 00:26:42,280
Speaker 4: do is convert that into something that, yes, has a

572
00:26:42,320 --> 00:26:45,199
Speaker 4: minimal death benefit, which is kind of necessary to make

573
00:26:45,280 --> 00:26:48,359
Speaker 4: this work, but instead of focusing on that, it also

574
00:26:48,440 --> 00:26:51,600
Speaker 4: provides primarily a long term care benefit. So all you're

575
00:26:51,600 --> 00:26:53,480
Speaker 4: doing in that case is read a bunch of paperwork

576
00:26:53,520 --> 00:26:56,480
Speaker 4: and some testing and redeploying a pile of money from

577
00:26:56,560 --> 00:26:59,040
Speaker 4: a need you don't have, which is death benefit to

578
00:26:59,119 --> 00:27:01,400
Speaker 4: a need that you do, which is now long term care.

579
00:27:01,600 --> 00:27:03,680
Speaker 4: That's called a ten thirty five exchange. It's a tax

580
00:27:03,720 --> 00:27:05,680
Speaker 4: free type of a thing. If you have that situation

581
00:27:05,760 --> 00:27:08,200
Speaker 4: and you don't need death benefit, you might consider.

582
00:27:07,880 --> 00:27:11,399
Speaker 1: That, Brian, another thing to consider, And I'd love to

583
00:27:11,400 --> 00:27:13,960
Speaker 1: get your perspective on this, even if you don't disagree.

584
00:27:14,000 --> 00:27:16,600
Speaker 1: If you don't agree with me, A lot of times

585
00:27:16,640 --> 00:27:19,600
Speaker 1: I've had people that have had life insurance policies for

586
00:27:19,720 --> 00:27:22,320
Speaker 1: years with this built up cash value in it, and

587
00:27:22,840 --> 00:27:26,159
Speaker 1: you know, when you run the actual probability of dying,

588
00:27:26,920 --> 00:27:29,320
Speaker 1: which is last time I checked with one hundred percent

589
00:27:30,119 --> 00:27:32,919
Speaker 1: versus needing long term care coverage, which is, you know,

590
00:27:33,000 --> 00:27:36,280
Speaker 1: around fifty percent. Sometimes you can afford, if you build

591
00:27:36,320 --> 00:27:39,040
Speaker 1: your plan properly, to just spend down some of your

592
00:27:39,040 --> 00:27:42,880
Speaker 1: assets knowing that the life insurance is going to come

593
00:27:42,880 --> 00:27:47,160
Speaker 1: in and backfill those assets that you spent down. That

594
00:27:47,200 --> 00:27:49,560
Speaker 1: can end up being a pretty good scenario because at

595
00:27:49,640 --> 00:27:51,560
Speaker 1: least you know you're going to get some bang for

596
00:27:51,600 --> 00:27:52,800
Speaker 1: your buck out of your insurance.

597
00:27:52,840 --> 00:27:54,960
Speaker 2: What do you think about that idea?

598
00:27:55,080 --> 00:27:56,840
Speaker 4: I think that's really something to look into and make

599
00:27:56,840 --> 00:27:58,560
Speaker 4: sure you've got all these moving parts covered.

600
00:27:58,800 --> 00:27:59,840
Speaker 2: From a standpoint of it.

601
00:27:59,800 --> 00:28:02,159
Speaker 4: It's complicated, but if we think ahead, then we can

602
00:28:02,240 --> 00:28:04,040
Speaker 4: kind of get We can control the future a little

603
00:28:04,040 --> 00:28:04,880
Speaker 4: bit as long as we plan.

604
00:28:05,760 --> 00:28:08,560
Speaker 1: Here's the all Worth advice. Planning for long term care

605
00:28:08,800 --> 00:28:12,440
Speaker 1: isn't just smart. It is a gift to your family.

606
00:28:12,520 --> 00:28:17,840
Speaker 1: You're saving them from crisis, conflict, and potentially years of stress.

607
00:28:18,640 --> 00:28:22,639
Speaker 1: Coming up next from Tangled iras to secure two point

608
00:28:22,720 --> 00:28:25,880
Speaker 1: zero confusion and even some hidden gems in your health

609
00:28:25,920 --> 00:28:29,880
Speaker 1: savings account. We'll tackle the questions you've been meaning to ask.

610
00:28:29,920 --> 00:28:30,560
Speaker 2: Coming up next.

611
00:28:30,600 --> 00:28:33,440
Speaker 1: You're listening to Simply Money, presented by all Worth Financial

612
00:28:33,440 --> 00:28:35,960
Speaker 1: on fifty five KRC, the Talk Station.

613
00:28:36,800 --> 00:28:39,280
Speaker 2: The Shumer shutdown, Trump shutdown.

614
00:28:39,000 --> 00:28:40,200
Speaker 6: The Democrats will own it.

615
00:28:40,600 --> 00:28:42,040
Speaker 2: Portland is on fire.

616
00:28:42,200 --> 00:28:44,520
Speaker 3: The Ice facility has been under siege.

617
00:28:44,960 --> 00:28:48,280
Speaker 1: President's declared war from Chicago is a disaster.

618
00:28:48,520 --> 00:28:51,200
Speaker 3: We deserve to be safe in our communities again.

619
00:28:51,240 --> 00:28:54,200
Speaker 2: Thank America, Trump again. Israel and hamas a piece deal

620
00:28:54,240 --> 00:28:57,160
Speaker 2: is closer than ever, kissing about every nation working on

621
00:28:57,200 --> 00:29:00,840
Speaker 2: this the events of the day. Clear transparent information are

622
00:29:00,880 --> 00:29:03,040
Speaker 2: heard every day in real time.

623
00:29:03,120 --> 00:29:06,120
Speaker 3: Fifty five KRC, the Talk Station.

624
00:29:06,680 --> 00:29:09,960
Speaker 7: Your dream doesn't always involve a pay cut, invest your time.

625
00:29:10,320 --> 00:29:13,320
Speaker 7: Sometimes it involves a pay cut to get moving and then.

626
00:29:13,280 --> 00:29:15,320
Speaker 2: Move up and invest in your future.

627
00:29:15,400 --> 00:29:17,400
Speaker 7: But I would want a path to make more than

628
00:29:17,400 --> 00:29:20,080
Speaker 7: I made, not less than I made. Dave Ramsey, There's

629
00:29:20,080 --> 00:29:21,880
Speaker 7: a lot of people need help in this world. I

630
00:29:21,920 --> 00:29:23,320
Speaker 7: want you to get clear. I want you to spend

631
00:29:23,360 --> 00:29:26,120
Speaker 7: some time very carefully going through what are your talents?

632
00:29:26,440 --> 00:29:29,920
Speaker 7: What are your passions for your skills? You know what

633
00:29:30,080 --> 00:29:31,000
Speaker 7: is it you value?

634
00:29:31,880 --> 00:29:36,320
Speaker 3: Weekdays at seven on fifty five krs, the talk station.

635
00:29:41,000 --> 00:29:42,800
Speaker 1: You're listening to Simply Money, you pre said up by

636
00:29:42,800 --> 00:29:45,840
Speaker 1: all Worth Financial on Bob Sponsorer along with Brian James.

637
00:29:46,320 --> 00:29:48,160
Speaker 1: Do you have a financial question you'd like for us

638
00:29:48,240 --> 00:29:50,960
Speaker 1: to answer. There is a red button you can click

639
00:29:51,080 --> 00:29:54,400
Speaker 1: if you're listening to the show from the iHeart app.

640
00:29:54,760 --> 00:29:57,920
Speaker 1: Simply record your question and it will come straight to us.

641
00:29:58,560 --> 00:30:01,720
Speaker 2: All right. Karen in High Park leads us off tonight Brian.

642
00:30:01,880 --> 00:30:05,920
Speaker 1: She says, we've heard about something called tax alpha, the

643
00:30:06,080 --> 00:30:09,000
Speaker 1: idea that good planning can add as much value as

644
00:30:09,080 --> 00:30:11,720
Speaker 1: investment performance. I don't know about that, but how do

645
00:30:11,760 --> 00:30:14,719
Speaker 1: you measure tax alpha? Talk about what that is and

646
00:30:15,080 --> 00:30:17,920
Speaker 1: help Karen, you know, understand the difference between that and

647
00:30:18,000 --> 00:30:19,720
Speaker 1: just plan on investment performance.

648
00:30:20,160 --> 00:30:21,600
Speaker 2: I actually like the way she phrased that.

649
00:30:21,600 --> 00:30:23,000
Speaker 4: That makes a lot of sense, and I think there's

650
00:30:23,000 --> 00:30:24,480
Speaker 4: a lot there's a lot of benefits to this. So

651
00:30:24,520 --> 00:30:28,040
Speaker 4: what is tax alpha? Tax alpha is the is the

652
00:30:28,120 --> 00:30:30,800
Speaker 4: extra value you can get by focusing on the tax

653
00:30:30,840 --> 00:30:33,760
Speaker 4: efficiency of your investments rather than simply looking at a

654
00:30:33,760 --> 00:30:36,600
Speaker 4: pile of different investment options and watching how they go

655
00:30:36,680 --> 00:30:38,800
Speaker 4: up and down over the years. So, really, what this

656
00:30:38,880 --> 00:30:42,520
Speaker 4: means is what is my portfolio done after taxes? So

657
00:30:42,600 --> 00:30:45,840
Speaker 4: for example, if I'm doing something and I'm somehow I've

658
00:30:45,880 --> 00:30:48,800
Speaker 4: got some kind of heavy trading strategy that is generating

659
00:30:48,840 --> 00:30:51,000
Speaker 4: a lot of short term gains, well those gains are

660
00:30:51,040 --> 00:30:52,520
Speaker 4: going to be taxed to me as income. If I'm

661
00:30:52,520 --> 00:30:54,680
Speaker 4: in a thirty percent bracket, well then I'm given away

662
00:30:55,000 --> 00:30:57,680
Speaker 4: a third of my return in my short term trading program.

663
00:30:57,720 --> 00:30:59,200
Speaker 4: That's why a lot of people don't do this kind

664
00:30:59,240 --> 00:31:02,000
Speaker 4: of thing because, or at least if they're doing it,

665
00:31:02,000 --> 00:31:04,600
Speaker 4: they're doing it in an IRA. Maybe, So how should you?

666
00:31:04,640 --> 00:31:06,240
Speaker 2: How should you? How do you measure it?

667
00:31:06,240 --> 00:31:08,480
Speaker 4: Because the only way you can really know you can't

668
00:31:08,480 --> 00:31:11,640
Speaker 4: open a brochure and see what some investment strategies after

669
00:31:11,720 --> 00:31:15,320
Speaker 4: tax performances have been because taxes are an individual thing.

670
00:31:15,360 --> 00:31:17,800
Speaker 4: Everybody's in a different bracket with a different situation, so

671
00:31:17,840 --> 00:31:20,320
Speaker 4: the after tax performance is going to be different for everybody.

672
00:31:20,560 --> 00:31:22,880
Speaker 4: Best thing you can do there is established some kind

673
00:31:22,880 --> 00:31:25,640
Speaker 4: of a benchmark that matches what it does, and then

674
00:31:25,760 --> 00:31:28,280
Speaker 4: figure out what your own pre tax returns have been.

675
00:31:28,320 --> 00:31:30,960
Speaker 4: What did that portfolio earn before taxes? This is usually

676
00:31:30,960 --> 00:31:33,280
Speaker 4: pretty easy to get to. What did the benchmark earn

677
00:31:33,360 --> 00:31:36,160
Speaker 4: that's pre tax alpha, and then figure out your after

678
00:31:36,200 --> 00:31:38,320
Speaker 4: tax returns. This is where you'll have to look at

679
00:31:38,360 --> 00:31:40,680
Speaker 4: your You know, often you're looking at your schedule B,

680
00:31:40,760 --> 00:31:43,560
Speaker 4: your ten ninety nine B and looking for the capital

681
00:31:43,560 --> 00:31:46,160
Speaker 4: gains and losses that were generated if you had a

682
00:31:46,640 --> 00:31:48,960
Speaker 4: This isn't a perfect comparison care but if you had

683
00:31:49,280 --> 00:31:51,600
Speaker 4: this money and some kind of a portfolio prior to

684
00:31:51,680 --> 00:31:54,680
Speaker 4: moving to the tax alpha strategy, then what you can

685
00:31:54,720 --> 00:31:57,040
Speaker 4: do is look for more and there should be more

686
00:31:57,080 --> 00:32:01,360
Speaker 4: activity generating more losses in those kinds of things, and

687
00:32:01,440 --> 00:32:03,200
Speaker 4: so see if you can find a way to compare

688
00:32:03,280 --> 00:32:05,720
Speaker 4: those older returns with the newer ones with that strategy

689
00:32:05,760 --> 00:32:07,560
Speaker 4: in place. Now, granted you'd be talking about two different

690
00:32:07,560 --> 00:32:10,120
Speaker 4: market periods. It is not perfect by any stretch, but

691
00:32:10,200 --> 00:32:13,200
Speaker 4: you should be seeing more activity trickling through your tax

692
00:32:13,240 --> 00:32:16,000
Speaker 4: return in the sense of realizing gains that are offset

693
00:32:16,040 --> 00:32:18,880
Speaker 4: therefore not being taxed, or giving you up to three

694
00:32:18,880 --> 00:32:21,480
Speaker 4: thousand dollars in a straight up deduction if there's any

695
00:32:21,760 --> 00:32:23,720
Speaker 4: losses over and above the gains that are generated.

696
00:32:23,760 --> 00:32:24,720
Speaker 2: So hope that helps.

697
00:32:24,720 --> 00:32:26,520
Speaker 4: That's a slippery slope tax I'm a big believer in

698
00:32:26,520 --> 00:32:29,080
Speaker 4: tax alpha, but it does it does take some understanding,

699
00:32:29,360 --> 00:32:31,400
Speaker 4: all right. So we're gonna move on to Aaron and Kenwood.

700
00:32:31,400 --> 00:32:33,760
Speaker 4: Aaron says, they've got they feel good about their net worth.

701
00:32:33,760 --> 00:32:35,800
Speaker 4: They look great on paper, but they feel like lots

702
00:32:35,800 --> 00:32:37,240
Speaker 4: of it is ill liquid. They've got a bunch of

703
00:32:37,280 --> 00:32:40,520
Speaker 4: stuff everywhere, real estate, retirement accounts, some stakes and businesses.

704
00:32:40,760 --> 00:32:42,920
Speaker 4: And he's wondering, how do you build up liquidity without

705
00:32:42,920 --> 00:32:43,840
Speaker 4: blowing up the plan.

706
00:32:43,960 --> 00:32:47,200
Speaker 1: Bob, Well, the words that's out to me in this

707
00:32:47,320 --> 00:32:48,800
Speaker 1: question is blowing up the plan.

708
00:32:48,880 --> 00:32:49,960
Speaker 2: And here's what I mean, Aaron.

709
00:32:50,040 --> 00:32:54,760
Speaker 1: The plan needs to include a gradual transition of some

710
00:32:54,880 --> 00:32:57,960
Speaker 1: of these ill liquid you know, assets and accounts into

711
00:32:58,000 --> 00:33:01,760
Speaker 1: something that can create liquid income. So I think the

712
00:33:01,840 --> 00:33:04,680
Speaker 1: plan needs to be re examined. And the big thing

713
00:33:04,760 --> 00:33:06,880
Speaker 1: that I tell folks all the time is you don't

714
00:33:06,880 --> 00:33:12,480
Speaker 1: have to make wholesale decisions and movements in one fell swoop,

715
00:33:12,600 --> 00:33:14,280
Speaker 1: you know, in one year, because if.

716
00:33:14,120 --> 00:33:17,760
Speaker 2: You do that, that will blow up your tax.

717
00:33:17,520 --> 00:33:22,040
Speaker 1: Return in the way of unnecessary taxation. So I think

718
00:33:22,080 --> 00:33:24,840
Speaker 1: you got to sit down, especially as it relates to

719
00:33:25,200 --> 00:33:29,400
Speaker 1: illiquid assets such as real estate or a business. You know,

720
00:33:29,440 --> 00:33:32,720
Speaker 1: there's a process, there's a timeline that you got to

721
00:33:32,760 --> 00:33:37,360
Speaker 1: develop that matches your desire for liquidity with your personal

722
00:33:37,480 --> 00:33:42,680
Speaker 1: desires in retirement and craft a gradual strategy to transition

723
00:33:42,840 --> 00:33:46,080
Speaker 1: your net worth into something that's going to meet your needs,

724
00:33:46,160 --> 00:33:48,280
Speaker 1: you know, when you no longer want to work.

725
00:33:48,480 --> 00:33:49,880
Speaker 2: Hope that helps, all right?

726
00:33:50,000 --> 00:33:53,040
Speaker 1: Ron and Mason says, we've got multiple iras and four

727
00:33:53,040 --> 00:33:57,360
Speaker 1: to one k's spread across different institutions. What's the cleanest

728
00:33:57,400 --> 00:34:03,320
Speaker 1: way to consolidate them without losing cost basis, data or protection. Fortunately,

729
00:34:03,360 --> 00:34:06,520
Speaker 1: this is a relatively easy one, Brian softball for me.

730
00:34:06,600 --> 00:34:09,480
Speaker 4: So the way to handle the cost basis of an

731
00:34:09,480 --> 00:34:11,239
Speaker 4: IRA or a four oh one K is to it

732
00:34:11,280 --> 00:34:13,960
Speaker 4: ignore it entirely because it doesn't mean anything at all,

733
00:34:14,680 --> 00:34:17,040
Speaker 4: you know. So, I mean, unless you're in a situation

734
00:34:17,120 --> 00:34:18,920
Speaker 4: where maybe you work for Procter and Gamble. If you're

735
00:34:18,920 --> 00:34:22,120
Speaker 4: looking at something called a net unrealized appreciation type of

736
00:34:22,160 --> 00:34:24,640
Speaker 4: a transaction, yes, then then the cost basis will matter.

737
00:34:24,800 --> 00:34:27,440
Speaker 4: But most people simply have you know, mutual funds or

738
00:34:27,719 --> 00:34:30,440
Speaker 4: exchange traded funds in those types of retirement plans, and

739
00:34:30,560 --> 00:34:33,680
Speaker 4: so therefore the cost basis is irrelevant the tax treatment

740
00:34:33,680 --> 00:34:36,160
Speaker 4: of the account. If it's pre tax then that simply

741
00:34:36,239 --> 00:34:38,799
Speaker 4: means that are traditional IRA or four O one K.

742
00:34:38,880 --> 00:34:40,719
Speaker 4: That simply means that any nickel that comes out of

743
00:34:40,719 --> 00:34:42,239
Speaker 4: it is going to get taxed as income to you.

744
00:34:42,560 --> 00:34:44,640
Speaker 4: If it's WROTH, then it's not going to be taxed

745
00:34:44,680 --> 00:34:46,399
Speaker 4: at all, as long as you've met a couple simple

746
00:34:46,480 --> 00:34:48,759
Speaker 4: rules with regard to timing and some other things that

747
00:34:48,800 --> 00:34:51,600
Speaker 4: are relatively simple to get passed, so you can consolidate

748
00:34:51,640 --> 00:34:55,560
Speaker 4: all those into one account without really losing any information.

749
00:34:55,640 --> 00:34:57,880
Speaker 4: Not to mention, let's say you're not talking about an IRA.

750
00:34:58,040 --> 00:35:01,320
Speaker 4: Cost basis only is a relevant in a taxable account.

751
00:35:01,560 --> 00:35:05,279
Speaker 4: If the custodian has that information, it will transfer over

752
00:35:05,360 --> 00:35:08,800
Speaker 4: from one financial institution to another. Sometimes it takes a

753
00:35:08,800 --> 00:35:10,680
Speaker 4: week or two to get it all there, but they

754
00:35:10,680 --> 00:35:12,920
Speaker 4: do have to communicate that if they have it, if

755
00:35:12,960 --> 00:35:15,719
Speaker 4: you handed them a certificate thirty years ago that represented

756
00:35:15,760 --> 00:35:17,240
Speaker 4: some stock, then they don't.

757
00:35:17,000 --> 00:35:18,400
Speaker 2: Know either what you paid for it.

758
00:35:18,480 --> 00:35:21,279
Speaker 4: So hope that helps one more question here, and we're

759
00:35:21,280 --> 00:35:23,400
Speaker 4: going to move on to Paul and Anderson.

760
00:35:23,719 --> 00:35:26,080
Speaker 2: This is not a softball, Paul says.

761
00:35:26,320 --> 00:35:29,560
Speaker 4: His CPA mentioned the secure two point zero rules for

762
00:35:29,600 --> 00:35:32,319
Speaker 4: inherited iras Bob, and he's asking, does the ten year

763
00:35:32,400 --> 00:35:35,279
Speaker 4: rule mean equal withdrawals or can you still manage the time?

764
00:35:35,320 --> 00:35:37,040
Speaker 4: I guess this one's not too bad, but could be

765
00:35:37,040 --> 00:35:38,160
Speaker 4: a bit of a rabbit hole, Bob.

766
00:35:38,680 --> 00:35:41,520
Speaker 1: Yeah, there's a couple of different rules to consider here, Paul,

767
00:35:41,560 --> 00:35:44,000
Speaker 1: and I'm going to assume we're talking about a non

768
00:35:44,040 --> 00:35:47,000
Speaker 1: spouse beneficiary. So the first thing to know is when

769
00:35:47,040 --> 00:35:50,840
Speaker 1: does the proverbial clock start running. That ten year clock

770
00:35:51,400 --> 00:35:55,120
Speaker 1: starts running the year following the death of the original

771
00:35:55,200 --> 00:35:57,680
Speaker 1: IRA owner. That's the first thing to keep in mind.

772
00:35:58,360 --> 00:36:02,120
Speaker 1: After that, it comes down who was the person that

773
00:36:02,280 --> 00:36:06,879
Speaker 1: passed away already in there require minimum distribution stage where

774
00:36:06,920 --> 00:36:09,120
Speaker 1: they already taking annual rmds.

775
00:36:09,640 --> 00:36:12,799
Speaker 2: If so, then you are required.

776
00:36:12,280 --> 00:36:16,520
Speaker 1: To stay on that same schedule based on the decedents

777
00:36:16,719 --> 00:36:19,799
Speaker 1: you know, age and that whole formula, and then in

778
00:36:19,800 --> 00:36:23,040
Speaker 1: addition to that, the whole thing needs to be paid

779
00:36:23,040 --> 00:36:26,640
Speaker 1: out completely in ten years. So what that situation can

780
00:36:26,760 --> 00:36:28,440
Speaker 1: end up looking like is you got to take a

781
00:36:28,440 --> 00:36:30,560
Speaker 1: little bit out every year, and then if you do

782
00:36:30,680 --> 00:36:33,600
Speaker 1: not manage it, you know, in year ten you might

783
00:36:33,640 --> 00:36:35,960
Speaker 1: get a bigger you know, lump sum coming out and

784
00:36:36,000 --> 00:36:38,200
Speaker 1: a bigger tax bill than you might want to see.

785
00:36:38,640 --> 00:36:42,840
Speaker 1: The other option is if the person that passed away

786
00:36:43,680 --> 00:36:46,560
Speaker 1: had not started annual rmds, well, then you got a

787
00:36:46,600 --> 00:36:49,000
Speaker 1: ton of flexibility as long as you meet that ten

788
00:36:49,080 --> 00:36:51,520
Speaker 1: year rule. You don't have to take anything out until

789
00:36:51,600 --> 00:36:53,480
Speaker 1: year ten if you don't want to. But then in

790
00:36:53,560 --> 00:36:55,399
Speaker 1: year ten you got to pull the whole thing out.

791
00:36:55,719 --> 00:36:58,560
Speaker 1: It's all taxable income. You owe all the taxes. So

792
00:36:59,000 --> 00:37:01,680
Speaker 1: depending on what you're sitting, situation is, you know, that's

793
00:37:01,719 --> 00:37:03,719
Speaker 1: where you want to sit down with your advisor and

794
00:37:03,800 --> 00:37:06,960
Speaker 1: your CPA and map out an income strategy to make

795
00:37:07,000 --> 00:37:11,640
Speaker 1: this withdrawal UH situation as tax efficient as possible. There

796
00:37:11,719 --> 00:37:13,799
Speaker 1: are a lot of moving parts there, but if you

797
00:37:13,840 --> 00:37:16,719
Speaker 1: if you understand what you're dealing with, you know from

798
00:37:16,719 --> 00:37:19,560
Speaker 1: the get go you can manage the situation. You know,

799
00:37:19,640 --> 00:37:22,040
Speaker 1: without a whole lot of complexity.

800
00:37:21,840 --> 00:37:22,560
Speaker 2: Coming up next.

801
00:37:22,600 --> 00:37:25,719
Speaker 1: I've got my two cents and some additional thoughts on

802
00:37:25,880 --> 00:37:28,560
Speaker 1: the whole long term care planning discussion we had a

803
00:37:28,600 --> 00:37:31,480
Speaker 1: little bit earlier. You're listening to Simply Money, presented by

804
00:37:31,480 --> 00:37:34,760
Speaker 1: all Worth Financial on fifty five KRC, the talk.

805
00:37:34,560 --> 00:37:36,640
Speaker 2: Station, Mark Levin.

806
00:37:36,880 --> 00:37:39,760
Speaker 5: Let me tell you some The Internet is breeding evil,

807
00:37:39,960 --> 00:37:43,120
Speaker 5: breeding evil, and TikTok is the main culprit. And I

808
00:37:43,120 --> 00:37:45,600
Speaker 5: don't know what's happening with TikTok, but that damn thing

809
00:37:45,640 --> 00:37:47,520
Speaker 5: needs to be sold now and it needs to be

810
00:37:47,560 --> 00:37:49,520
Speaker 5: cleaned up. And I don't want to hear about free

811
00:37:49,520 --> 00:37:52,760
Speaker 5: speech and everything else. It's a private company. The company

812
00:37:52,800 --> 00:37:55,359
Speaker 5: needs to clean it up because this is crazy. Bet

813
00:37:55,440 --> 00:37:58,640
Speaker 5: meen the communist Chinese and all the crap that people put.

814
00:37:58,480 --> 00:37:59,120
Speaker 2: On this stuff.

815
00:37:59,160 --> 00:38:02,319
Speaker 3: Mark Levin tonight at ten oh six on fifty five

816
00:38:02,440 --> 00:38:04,200
Speaker 3: KRC the talk station.

817
00:38:04,640 --> 00:38:05,560
Speaker 2: Hiks, Ryan Thomas.

818
00:38:05,560 --> 00:38:07,680
Speaker 7: Next month, I have to choose between groceries for my

819
00:38:07,760 --> 00:38:09,280
Speaker 7: kids or gas for my car.

820
00:38:09,480 --> 00:38:12,960
Speaker 3: Talk about it here fifty five KRC, the talk station.

821
00:38:17,320 --> 00:38:19,880
Speaker 1: You're listening to Simply Money, presented by all Worth Financial.

822
00:38:19,960 --> 00:38:23,520
Speaker 1: I'm Bob Spondseller along with Brian James. Brian I want

823
00:38:23,520 --> 00:38:25,600
Speaker 1: to I want to talk a little bit more, you know,

824
00:38:25,719 --> 00:38:29,160
Speaker 1: just piggybacking on our prior discussion about this whole long

825
00:38:29,280 --> 00:38:32,319
Speaker 1: term care planning process. And what I want to talk

826
00:38:32,360 --> 00:38:34,960
Speaker 1: about here is, you know, assuming we get to the

827
00:38:35,000 --> 00:38:40,040
Speaker 1: point where it is time to start looking at a

828
00:38:40,120 --> 00:38:43,920
Speaker 1: long term care facility, you know, moving into a facility,

829
00:38:44,520 --> 00:38:48,560
Speaker 1: you know, there's some important considerations to factor in and

830
00:38:48,840 --> 00:38:51,680
Speaker 1: some important questions to ask, and a couple of those

831
00:38:51,800 --> 00:38:54,360
Speaker 1: questions I think these are good ones. What's the staff

832
00:38:54,480 --> 00:38:58,160
Speaker 1: to resident ratio at night? Because look, if you just

833
00:38:58,239 --> 00:39:01,160
Speaker 1: schedule a tour and go in there, it's like any

834
00:39:01,200 --> 00:39:03,600
Speaker 1: other tour you go on GONA. They're gonna put their

835
00:39:03,600 --> 00:39:07,360
Speaker 1: best face on the whole situation. The thing's fully staffed,

836
00:39:07,400 --> 00:39:10,240
Speaker 1: it's been cleaned. It's all that you want to talk about.

837
00:39:10,320 --> 00:39:13,040
Speaker 1: You know, what are things look like at night when

838
00:39:13,120 --> 00:39:15,120
Speaker 1: when a lot of this care is really needed, so

839
00:39:15,239 --> 00:39:19,120
Speaker 1: staffed a resident ratio at night? And then also what's

840
00:39:19,160 --> 00:39:22,120
Speaker 1: the staff turnover rate? They should be willing to share

841
00:39:22,160 --> 00:39:26,160
Speaker 1: that kind of information with you, because if the staff

842
00:39:26,239 --> 00:39:28,840
Speaker 1: is moving in and out and it's a constant turnover,

843
00:39:29,520 --> 00:39:31,919
Speaker 1: I don't think that's good. I think our loved one

844
00:39:31,960 --> 00:39:35,240
Speaker 1: wants to know who they're dealing with develop a relationship.

845
00:39:35,520 --> 00:39:37,560
Speaker 1: They need to get to know what the ins and

846
00:39:37,600 --> 00:39:42,040
Speaker 1: outs of what the needs really are for our loved one,

847
00:39:42,200 --> 00:39:46,080
Speaker 1: so that if the staff's turning over at a breakneck pace,

848
00:39:46,480 --> 00:39:48,480
Speaker 1: that's not a really good thing. And then I would

849
00:39:48,480 --> 00:39:51,759
Speaker 1: also say, are they doing background checks on all of

850
00:39:51,760 --> 00:39:53,759
Speaker 1: their caregivers at the facility?

851
00:39:53,760 --> 00:39:55,319
Speaker 2: I know you want to jump in here as well.

852
00:39:55,920 --> 00:39:58,200
Speaker 4: Yeah, so I think this is probably one of the

853
00:39:58,200 --> 00:40:02,080
Speaker 4: most important places where we're of mouth feedback is the

854
00:40:02,120 --> 00:40:04,520
Speaker 4: most valuable. You know, the brochures are lovely, but they're

855
00:40:04,520 --> 00:40:07,480
Speaker 4: not gonna not be lovely, So look under every stone

856
00:40:07,480 --> 00:40:09,719
Speaker 4: for stories. I would be looking on social media and

857
00:40:09,760 --> 00:40:11,839
Speaker 4: just search for the you know, search for the for

858
00:40:11,880 --> 00:40:14,280
Speaker 4: the name of the facility, and bear in mind obviously

859
00:40:14,320 --> 00:40:16,160
Speaker 4: you're gonna see stories. You know, people don't tend people

860
00:40:16,160 --> 00:40:17,680
Speaker 4: who are super happy don't tend to talk about it

861
00:40:17,760 --> 00:40:19,840
Speaker 4: very much, versus people who are raging over something.

862
00:40:20,280 --> 00:40:21,480
Speaker 2: Then it could come up there.

863
00:40:21,520 --> 00:40:23,759
Speaker 4: But again, just look under every stone, find people who

864
00:40:23,800 --> 00:40:26,120
Speaker 4: live there. You might even you know, catch somebody who

865
00:40:26,360 --> 00:40:29,200
Speaker 4: perhaps looks younger walking out of the facility. Perhaps this

866
00:40:29,320 --> 00:40:31,399
Speaker 4: is the adult child of someone who lives there, stop

867
00:40:31,440 --> 00:40:33,719
Speaker 4: them in the parking lot and just ask how it's gone.

868
00:40:34,239 --> 00:40:36,640
Speaker 4: You know, this is an extremely important one. So I

869
00:40:36,680 --> 00:40:38,480
Speaker 4: think you look under every stone for every piece of

870
00:40:38,480 --> 00:40:39,960
Speaker 4: information you can possibly get.

871
00:40:40,480 --> 00:40:43,920
Speaker 1: Or just network around with your friends and folks. I mean,

872
00:40:44,040 --> 00:40:47,000
Speaker 1: everybody knows someone who has needed this kind of care.

873
00:40:47,160 --> 00:40:50,760
Speaker 1: Don't don't just rely on the internet and online reviews.

874
00:40:50,800 --> 00:40:53,200
Speaker 1: Get out there and talk to somebody, because the sad

875
00:40:53,280 --> 00:40:56,799
Speaker 1: truth is you can spend a fortune and still get

876
00:40:56,920 --> 00:41:01,200
Speaker 1: poor care if you have not vetted this city situation carefully.

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Speaker 2: Thanks for listening tonight.

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00:41:03,000 --> 00:41:05,080
Speaker 1: You've been listening to Simply Money, presented by all Worth

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00:41:05,080 --> 00:41:08,080
Speaker 1: Financial on fifty five KRC, the talk station.

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00:41:09,360 --> 00:41:12,479
Speaker 3: Some people only hear what they want to hear these days.

881
00:41:12,520 --> 00:41:13,960
Speaker 2: You need to keep an open mind.

882
00:41:14,160 --> 00:41:16,560
Speaker 3: We only deal in what you need to hear.

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00:41:16,719 --> 00:41:19,000
Speaker 2: Everybody needs the truth of the facts. You need the

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00:41:19,080 --> 00:41:22,160
Speaker 2: information that matters. We need to know if there were

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00:41:22,239 --> 00:41:23,200
Speaker 2: warning signs.

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00:41:23,320 --> 00:41:26,239
Speaker 5: You need it around the clock today, tomorrow, and for

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00:41:26,280 --> 00:41:27,240
Speaker 5: the rest of life.

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00:41:27,320 --> 00:41:29,400
Speaker 2: In the no twenty four hours a day. You don't

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00:41:29,440 --> 00:41:31,839
Speaker 2: need to go anywhere else. And that's something that people

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00:41:31,840 --> 00:41:33,320
Speaker 2: already know for certain.

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00:41:35,480 --> 00:41:39,880
Speaker 3: What fifty five KRS the talk station.

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Speaker 2: This month