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Speaker 1: Tonight, why smart people still make dumb money decisions. You're

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Speaker 1: listening to simply Money present up by all Worth Financial.

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Speaker 1: I'm Bob sponseller along with Brian James. All Right, have

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Speaker 1: you ever made a financial decision that looking back makes

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Speaker 1: zero sense even though you knew better. We've all been there.

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Speaker 1: But here's the twist. The smarter you are, the more

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Speaker 1: likely you are to make some of the worst money

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Speaker 1: decisions ever. And if you've built real wealth, well the

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Speaker 1: stakes only get higher. Brian.

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Speaker 2: Yeah, So what we know here is that brains are

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Speaker 2: not bulletproof. One of the biggest miss in finance, Bob,

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Speaker 2: is this idea that being smart means I'm never going

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Speaker 2: to make a financial mistake in my life. That's just

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Speaker 2: not the case, and research shows it so that this

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Speaker 2: surface is in a lot of ways in flawed decision

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Speaker 2: and we tend to get confident in ourselves and kind

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Speaker 2: of double down on it. So one of the things

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Speaker 2: we run across is something called confirmation. By this is

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Speaker 2: when we find ourselves seeking out groups or people or

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Speaker 2: searching everything until we find the opinion that we already

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Speaker 2: have and then we can go see CC, I know

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Speaker 2: I was right this isn't just a financial thing. This

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Speaker 2: surface is in a lot of areas that surfaces and

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Speaker 2: politics and family discussions and so forth. So it's one

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Speaker 2: of the challenges though that can cause us to make

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Speaker 2: bad financial decisions and get us in trouble.

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Speaker 1: Well, Brian, you know you mentioned politics, and you took

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Speaker 1: the words out of my mouth. I think with this,

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Speaker 1: you know, very divided political environment we're in and the

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Speaker 1: way the whole media business is structured. Now, you know,

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Speaker 1: we can all live in our little echo chambers and

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Speaker 1: only consume news and information that fits our you know,

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Speaker 1: preconceived biases, and that only feeds that confirmation bias. And

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Speaker 1: I've seen that confirmation bias just grow and grow and grow,

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Speaker 1: i'd say, over the last ten years, and it's something

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Speaker 1: we really got to be aware of.

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Speaker 2: Yeah, there's a lot of passion out there too, because

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Speaker 2: that's just where Honestly, my personal opinion is that our

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Speaker 2: political leadership and our media is making an awful lot

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Speaker 2: of money and gaining an awful lot of power out

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Speaker 2: of keeping us angry and terrified at all times. And

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Speaker 2: this leads to conversations at the dinner table that you

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Speaker 2: didn't want to have. It leads to decisions maybe made

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Speaker 2: with your spouse, where you're having arguments over things that

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Speaker 2: really may not have been that important to you, but

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Speaker 2: for whatever reason, we're all just kind of geared to

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Speaker 2: fight first nowadays. So the best thing to do is

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Speaker 2: whenever your face was one of these challenges is take

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Speaker 2: a breath, sleep on things. Don't make a decision right now,

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Speaker 2: but just make sure you're not doing something just off

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Speaker 2: the cuff just because you feel the pressure to make

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Speaker 2: that decision.

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Speaker 1: Here's another behavior we come across a lot, and that

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Speaker 1: will just call that the state of inertia, and we

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Speaker 1: go back to Newton's first law of motion. An object

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Speaker 1: in motion will stay in motion, an object at rest

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Speaker 1: will stay in rest. At stay at rest Brian, and

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Speaker 1: that we find that to be a common thing among

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Speaker 1: especially highly intelligent, high net worth people. In other words,

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Speaker 1: doing nothing even when you know you need to act.

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Speaker 1: It happens, you know, when the stakes are high, the

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Speaker 1: fear of making a wrong move just becomes paralyzing and

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Speaker 1: people do nothing. And this comes up all the time,

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Speaker 1: especially in the area of estate planning.

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Speaker 2: Yeah, procrastination. As always, whenever there's a big, scary decision

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Speaker 2: to be made it's easier not to do anything. I

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Speaker 2: look at this option and it's got pros and cons.

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Speaker 2: And here's another option and there's pros and cons there.

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Speaker 2: You know what, I'm gonna talk about this. I'll think

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Speaker 2: about this some other time because I just can't make

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Speaker 2: a choice.

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Speaker 3: And you're right. This leads to.

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Speaker 2: Situations where clients will walk in with a will that

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Speaker 2: was written thirty five, forty years ago and maybe doesn't

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Speaker 2: include half the children that they now have because they

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Speaker 2: didn't know the steps to take and they were busy

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Speaker 2: that week and can't get to it, and then that

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Speaker 2: stretches into months and years in frankly decades. So but

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Speaker 2: that can also obviously lead to problems. That's when we'll

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Speaker 2: hear from eventually we'll hear from the airs where they

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Speaker 2: had a situation that they'll come in and they'll say,

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Speaker 2: I don't want to do this to my children. Mom

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Speaker 2: and dad just didn't get around to organizing things to

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Speaker 2: make it easy, and we had to go through an

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Speaker 2: awful lot to get things retitled, Things had to go

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Speaker 2: through probate that could have been easily avoided, and that

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Speaker 2: kind of thing, and they'll say, I don't want to

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Speaker 2: do this for my children, and we'll give them a

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Speaker 2: list of a checklist. Here, go do these things, and

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Speaker 2: then it'll take them themselves months to complete it. These

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Speaker 2: decisions are hard, but they're not going to go away.

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Speaker 2: And it does involve some discipline. It's really no different

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Speaker 2: honestly than personal training or a diet or whatever. If

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Speaker 2: you want the results, you've got to put in the work.

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Speaker 1: Another emotional behavior, or emotionally driven behavior we got to

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Speaker 1: fight against is that feeling of overconfidence. And Brian, I'm

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Speaker 1: sure you've been there. I've been there too with clients

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Speaker 1: and really personally as well. You know, we're all very smart,

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Speaker 1: we're well read, we've done research, and we think we

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Speaker 1: can outsmart everything out there. In other words, you know,

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Speaker 1: I built this business from nothing. I know I can

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Speaker 1: manage my own investments, or I can I can perform

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Speaker 1: orthopedic surgery or brain surgery. Certainly, I know how to

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Speaker 1: allocate an investment portfolio. I don't need a second opinion.

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Speaker 1: I don't need any help. I know what I'm doing,

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Speaker 1: you know, on and on and on.

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Speaker 2: Yeah, and because YouTube videos, right, I can do surgery

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Speaker 2: because there's a YouTube video on there about about how

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Speaker 2: to do it and not that what we do every

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Speaker 2: day is rocket science.

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Speaker 3: It's it's not simple either. But at the same time, there.

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Speaker 2: If there were a list bob of steps everyone should

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Speaker 2: take right, if it was just a checklist process, these

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Speaker 2: are all good things and here's all the bad things

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Speaker 2: to avoid. If it was the same for everybody, then yeah,

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Speaker 2: you could do it. It would everybody would do their financial

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Speaker 2: planning off of a blog somewhere that has that checklist

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Speaker 2: to follow. I think the notion that a lot of

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Speaker 2: people have is that I'm a hard worker. I'm willing

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Speaker 2: to do more research than the next guy. So if

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Speaker 2: I just look at this next page about cryptocurrency and

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Speaker 2: how to make a bazillion dollars, then I'm gonna be

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Speaker 2: all set. And none of that leads to leads to

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Speaker 2: good places. I can remember when I got started in

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Speaker 2: this industry, it used to be about my guy or

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Speaker 2: my lady who gave me a good stock tip twenty

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Speaker 2: years ago, and then we hang on that. I remember

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Speaker 2: my dad and my uncles would pass around their brokers

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Speaker 2: that would give them this great stock idea, and none

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Speaker 2: of them were good for maybe one or two in

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Speaker 2: a row, and eventually that kind of colored my career

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Speaker 2: and I started off when at the very beginning, thinking

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Speaker 2: that that's all they need to do, just be the

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Speaker 2: guy with the hot stock tip. Well, none of that works,

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Speaker 2: and I quickly figured out that it's all about planning

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Speaker 2: because that's what people really are worried about.

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Speaker 3: Am I gonna run out of money?

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Speaker 2: That's all anybody cares about, not the hot stock tip

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Speaker 2: from yesterday. But there is this notion that if I

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Speaker 2: just do a little more research than the next guy,

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Speaker 2: and I know I'm capable of that because I'm smarter

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Speaker 2: than the next guy, then I'm gonna be bulletproof.

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Speaker 3: And that's just not the case.

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

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Speaker 1: I'm Bob sponseller along with Brian James. All Right, we've

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Speaker 1: identified a couple of you know, mindset driven behaviors that

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Speaker 1: we all experience. Brian, let's get into what we need

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Speaker 1: to do about it. You know it starts with a

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Speaker 1: mindset shift, right, Yeah, and.

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Speaker 3: I'm complaining about what the problem is. What do we

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Speaker 3: do about it?

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Speaker 2: Let's be proactive. So first off, let's accept that intelligence

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Speaker 2: is not a defense against your emotion. Emotion is going

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Speaker 2: to drive the day in a lot of cases, and

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Speaker 2: just being a smart person, which most people certainly are.

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Speaker 2: Not everybody, but a lot of people certainly are. But

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Speaker 2: that often is not enough to fight off the emotion.

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Speaker 2: So think about Warren Buffett. Warren Buffett is probably the

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Speaker 2: most emotionless investor in history. That's how he got to

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Speaker 2: where he is. So the reason he's done that is

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Speaker 2: he's built systems and he has a trusted team around

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Speaker 2: him to help him override his instincts and help him

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Speaker 2: figure out when he might be going a little too

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Speaker 2: far down a rabbit hole of his own creation.

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Speaker 1: So that gets into one of the things we always

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Speaker 1: recommend for our clients here at all Worth build an

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Speaker 1: actual personal investment policy. What does that mean. It's like

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Speaker 1: having a written blueprint for how you're going to invest.

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Speaker 1: We assess what kind of assets you have, your tax situation,

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Speaker 1: how much risk you're comfortable with, when to rebalance having

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Speaker 1: a written plan, and the benefit when emotions run hot,

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Speaker 1: like what when we experience volatility allah the first couple

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Speaker 1: weeks in April, people can go back and refer to

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Speaker 1: their actual place and that keeps people from making emotional

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Speaker 1: or headline driven decisions, you know, in a rush, and

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Speaker 1: keeps us on track and avoids big, big time you know,

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Speaker 1: mistakes that we can't oftentimes recover from if we make

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Speaker 1: them and don't.

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Speaker 3: I don't view this, you know, an investment policy statement.

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Speaker 2: Some of you might be recognizing those words as big

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Speaker 2: fancy talk from a committee meeting or something like that.

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Speaker 2: I'm not really talking about a big, formal, laid out

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Speaker 2: policy that is separate from your financial plan, and often

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Speaker 2: oftentimes it can be just part of your financial plan,

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Speaker 2: because you know, if you have a financial plan, that

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Speaker 2: means you've looked at here's where we are right now,

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Speaker 2: and we need to get to hear in five, ten, fifteen,

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Speaker 2: twenty years. That's really the basic point of a plan.

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Speaker 2: Along the way, stuff is going to happen. Life is

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Speaker 2: going to happen, The market's going to happen. How will

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Speaker 2: we react when it does. If you've done a proper plan,

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Speaker 2: then you know you will have stress tested your goals,

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Speaker 2: you will have figured out Okay, if nothing bad happens,

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Speaker 2: then here's how it looks. But if crazy stuff happens

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Speaker 2: in the short run, this is the impact, and here's

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Speaker 2: when we need to worry. But more importantly, here's when

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Speaker 2: we need to when we I we don't have to

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Speaker 2: worry because we've done the stress test. So again, just

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Speaker 2: make sure that you understand what you're trying to accomplish

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Speaker 2: in the first place.

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Speaker 3: That can be an investment policy.

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Speaker 1: Another thing we'd like to talk to clients about with

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Speaker 1: Brian is to purposely and intentionally introduce a little friction

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Speaker 1: or short term delay to making big decisions when it

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Speaker 1: comes to money. For example, you know you feel like

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Speaker 1: dumping a stock that you've got a large position in

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Speaker 1: set of at least a twenty four to forty eight

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Speaker 1: hour rule. You know, internally saying hey, I'm not gonna

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Speaker 1: I'm not gonna make that decision until I sleep on it.

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Speaker 1: Let a little time pass, Maybe get some advice, pray

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Speaker 1: about it, make sure you discuss it with your spouse.

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Speaker 1: Something where you're not just making that mouse click and

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Speaker 1: making a huge financial decision. It can often her role

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Speaker 1: just to have that twenty four to forty eight.

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Speaker 2: Hours that's yeah, that's the slower role rule. Just make

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Speaker 2: sure you're not moving in something just within pure passion

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Speaker 2: and no logic. You have to have a little bit

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Speaker 2: in the little mixture of both something else. And when

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Speaker 2: you come up with these ideas, bringing a devil's advocate,

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Speaker 2: bounce it off somebody.

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Speaker 3: Smart.

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Speaker 2: People actually love being challenged intellectually right. People love to

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Speaker 2: have discussions about you know, politics and just ideas they

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Speaker 2: have and that kind of thing. But financially we don't

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Speaker 2: like to do that at all. We are all raised

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Speaker 2: that finances were to be kept private within the family

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Speaker 2: and so forth, so we never really talk to each

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Speaker 2: other and we wind up in our own little echo

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Speaker 2: chambers when it comes to big, huge financial decisions, which

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Speaker 2: makes things.

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Speaker 3: An awful lot harder.

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Speaker 2: So look for somebody out there that you can bounce

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Speaker 2: these ideas. Obviously a spouse who should probably be in

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Speaker 2: the mix anyway on these bigger decisions. Maybe you have

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Speaker 2: an advisor or even a peer, just somebody you know

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Speaker 2: is think similarly to you and has the same kind

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Speaker 2: of you know, similar challenges, that kind of thing. Say, hey,

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Speaker 2: I was thinking about this. What am I not seeing?

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Speaker 2: I'm too close to my own trees so I can't

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Speaker 2: see the whole forest. Help me understand what I might

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Speaker 2: be missing. And this isn't about getting yourself talked out

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Speaker 2: of something that's you know, it could be a great idea,

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Speaker 2: but it's about just hearing a counterpoint that you may

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Speaker 2: not have thought about from somebody who's an arms length away.

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Speaker 2: Super super helpful for business owners who are used to

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Speaker 2: call on the shot solo as well.

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Speaker 1: Here's one last piece of advice, and something I think

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Speaker 1: virtually nobody does, but this is a great idea for

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Speaker 1: those that do some journaling and writing things down. Schedule

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Speaker 1: an annual what we call a bias review. In other words,

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Speaker 1: once a year. Ask yourself, did I ignore advice because

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Speaker 1: it didn't match my you know, my viewpoint or my presupposition.

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Speaker 1: Did I delay action because I was uncomfortable? Did I

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Speaker 1: trust my gut when I should should have run the

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Speaker 1: numbers first. Those are great questions to ask and write

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Speaker 1: those answers down because oftentimes it will save us from

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Speaker 1: some mistakes and put you in a better position, you know,

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Speaker 1: in which to make decisions moving forward.

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Speaker 2: And work with a fiduciary advisor. A good advisor is

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Speaker 2: not there to be smarter than you. They're there to

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Speaker 2: help outmaneuver your biases. We all have them. Advisors have

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Speaker 2: them have them too. We make the same human mistakes

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Speaker 2: we just know exactly the dumb things that we're doing

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Speaker 2: while we're doing them.

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Speaker 1: Here's the all Worth advice. The most financially successful people

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Speaker 1: we know don't go it alone. They build teams, They

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Speaker 1: build systems and structure because they know that at the

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Speaker 1: end of the day, they're just human like everyone else.

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Speaker 1: If you're on deck for retirement, what's your biggest worry?

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Speaker 1: See what your peers say about it. Next, you're listening

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

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

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Speaker 1: presented by Allworth Financial. I'm Bob Sponsller along with Brian James. Hey,

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Speaker 1: if you can't listen to Simply Money every night, subscribe

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Speaker 1: to get our daily podcast. You can listen the following

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Speaker 1: morning during your commute, maybe at the gym. And if

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Speaker 1: you think your friends could use some financial advice, tell

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Speaker 1: them about us as well. Search Simply Money on the

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Speaker 1: iHeart app or wherever you find your podcasts. How much

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Speaker 1: risk should you really be taking if you already have

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Speaker 1: enough to retire comfortably? Well? Answer that question and more

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Speaker 1: coming up at six forty three tonight, Brian, we pay

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Speaker 1: homage to Gen X. The folks who were born between

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Speaker 1: nineteen sixty five and nineteen eighty, they're inching closer and

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Speaker 1: closer to retirement, and they've seen it all, dot com bubbles,

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Speaker 1: the two thousand and eight crash, COVID inflation, you name it.

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Speaker 1: But the biggest concern right now that gen xer seemed

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Speaker 1: to have as retirement looms isn't just about money. It's healthcare.

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Speaker 2: Yep, you're talking about me, Bob. I am gen X,

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Speaker 2: and I think you might be. You might be as well.

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Speaker 2: But it's funny, I remember whenever I'm whenever that topic

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Speaker 2: comes up, I still feel like the first time I

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Speaker 2: heard gen X was talking about my generation, how we

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Speaker 2: were going to change the world and so forth, And

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Speaker 2: now I'm the establishment and all the ones behind me

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Speaker 2: are going to change the world. So anyway, I think

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Speaker 2: every generation pasted the nineties honestly, has has come up

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Speaker 2: through chaos the eighties and the nineties. My opinion that

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Speaker 2: was the that was the anomaly, because really nothing bad

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Speaker 2: happened for twenty straight years, and this drives a lot

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Speaker 2: of the generational differences between opinions on how things should work.

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Speaker 2: Baby Bombers didn't see a whole lot of bad stuff

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Speaker 2: during their primary earnings years and their primary savings years,

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Speaker 2: and then starting around two thousand, we started to see

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Speaker 2: a heck of a lot more chaos as things returned

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Speaker 2: to the mean. So, but a lot of people out

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Speaker 2: there are worried about this. So Gen xers are feeling

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Speaker 2: like they are behind. About fourteen percent of Americans between

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Speaker 2: forty four and age fifty nine believe they've saved enough.

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Speaker 2: This is coming from a Schroeder survey that was done recently.

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Speaker 1: That's a low number.

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Speaker 2: That is a very low number, but it kind of

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Speaker 2: reflects you know, when I talk to my peers, I

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Speaker 2: know that a lot of them are concerned about these things.

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Speaker 2: And we don't talk numbers because that's again that's not

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Speaker 2: something we do in this country. But you can kind

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Speaker 2: of see behind their eyes that they've got some concerns.

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Speaker 2: Most are estimating they're going to need over a million dollars,

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Speaker 2: but the average Gen Extra Bob expects to retire with

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Speaker 2: about six hundred thousand.

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Speaker 3: So that's quite a gap to cross there.

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Speaker 1: Well, and add to that the fact, you know, studies

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Speaker 1: we see say that you know, a couple retiring today

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Speaker 1: at age sixty five could need on average about three

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Speaker 1: hundred thousand dollars just to cover medical expenses over the

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Speaker 1: rest of their lifetime. And Brian, that number doesn't even

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Speaker 1: include long term care, which, as we know, can wipe

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Speaker 1: out a nest egg in very short order if you're unprepared.

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Speaker 3: Yeah, and let's be really clear about that.

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Speaker 2: So when we talk about this all the time, three

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Speaker 2: hundred thousand dollars for to cover healthcare, that's about one

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Speaker 2: hundred thousand of that is just going to be the

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Speaker 2: premiums themselves over thirty years on Medicare and some kind

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Speaker 2: of supplemental policy, with the rest being out of pocket expenses,

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Speaker 2: doctor's visits and all those kinds of things. But again,

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Speaker 2: let's reiterate, I want to say this very loudly, that

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Speaker 2: is not the cost of long term care. That if

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Speaker 2: that occurs to someone, that's going to be itself about

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Speaker 2: another three hundred thousand based off of an approximately one

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Speaker 2: hundred and fifteen thousand dollars two and a half year stay.

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Speaker 2: So why is Generation X fueling this so strongly? First

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Speaker 2: generation ever to pretty much mostly retire without pensions. Right, So,

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Speaker 2: a lot of our parents, a lot of our grandparents,

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Speaker 2: retired with pensions, and that was that became their definition

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Speaker 2: of what retirement is. I'm going to turn on my

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Speaker 2: pension and I'll get my check and I'll go fishing.

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Speaker 1: Well.

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Speaker 3: This generation is the first to.

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Speaker 2: Where the majority will have to make their own pension

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Speaker 2: and you can't do that overnight.

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Speaker 3: That has to have been done over your entire working career.

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Speaker 2: Plus, Bob, it's also the Sandwich generation helping kids and

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Speaker 2: often parents. This is going to go on for a

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Speaker 2: very long time. Many generations are going to go through

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Speaker 2: this because of life expectancy being so much longer. You've

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Speaker 2: got kids that you're trying to get started. You've got

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Speaker 2: your parents that may need your help as well. So

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Speaker 2: that's double financial duty and that's going to suck up

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Speaker 2: a lot of your own retirement planning.

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Speaker 1: Yeah. Another thing adding to some of the stress for

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Speaker 1: this generation of you know, pre retirees is we've had

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Speaker 1: some volatile income years. I mean, flat wages during the

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Speaker 1: two thousands, two major recessions and a pretty big bout

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Speaker 1: with inflation have made saving considerably harder. And now they're starting,

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Speaker 1: you know, staring down these rising health costs and all

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Speaker 1: the Sandwich generation stuff. It's a lot to overcome, but

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Speaker 1: we got to keep encouraging these folks. Don't just bury

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Speaker 1: your head in the sand and you know, just declared defeat.

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Speaker 1: You got to make some adjustments here and get things

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Speaker 1: back in order before it becomes too late.

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Speaker 2: So let's talk about that. What can we do about it?

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Speaker 2: First off, estimate your own health care costs. Talk to

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Speaker 2: a fiduciary financial advisor, somebody who understands Medicare and long

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Speaker 2: term care planning and preferably has worked with a lot

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Speaker 2: of individuals and clients who have gone through these who

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Speaker 2: have gone before you. I think that's the most value

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Speaker 2: any advisor can bring is to be able to say,

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Speaker 2: here are what people who look like you but are

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Speaker 2: a little bit older, further down the path, here's how

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Speaker 2: they dealt with it.

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Speaker 3: So, but some tactical things.

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Speaker 2: If you are eligible, a health savings account is one

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Speaker 2: of the best tools out there. Triple tax protected, tax

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Speaker 2: deductible contributions, tax free growth, and tax free withdrawals.

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Speaker 3: From medical expenses. Also consider don't buy, but consider long

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Speaker 3: term care insurance. Learn about it.

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Speaker 2: If you're going to do it. The earlier you do it,

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Speaker 2: the lower the premiums. Are going to be and don't

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Speaker 2: hold often too your sixties. If you're concerned, what other

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Speaker 2: ideas you have, Bob, Well.

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Speaker 1: One idea is to stay healthy. You know. One of

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Speaker 1: the ways to combat these, you know, looming health care

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Speaker 1: costs is don't let yourself get in a situation where

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Speaker 1: you're vastly overweight and are dealing with you know, adult

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Speaker 1: onset diabetes. Maybe cut back on the alcohol and the smoking,

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Speaker 1: get some exercise, you know, put yourself in a situation

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Speaker 1: where you are healthy and that has a lot of benefits,

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Speaker 1: financial benefits and just overall lifestyle and happiness benefits. The

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Speaker 1: key here is to stay healthy so that you bring

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Speaker 1: down these future health care costs as much as you can. Obviously,

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Speaker 1: there are things that are out of our control, but

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Speaker 1: there's still a lot of things that are in our

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Speaker 1: control and we need to take advantage of that. Here's

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Speaker 1: the all Worth advice. A solid retirement plan doesn't just

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Speaker 1: grow your money, it protects you from the rising cost

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Speaker 1: of health care. All Right, you've made your money, Now

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Speaker 1: what next? How to build a per personal brand that

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Speaker 1: keeps you relevant after dialing it down a bit following

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Speaker 1: a successful career. You're listening to Simply Money presented by

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Speaker 1: all Worth Financial on fifty five KARC, the talk station.

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Speaker 1: You're listening to Simply Money presented by Alworth Financial. I'm

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Speaker 1: Bob Sponseller along with Brian James, and we're joined right

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Speaker 1: now by our career expert and our good friend Julie Bouk,

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Speaker 1: who's going to talk to us today about building a

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Speaker 1: personal brand as you start to wind down a very

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Speaker 1: successful career, but you're not quite yet ready yet to

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Speaker 1: get completely out of the workforce. Julie, I'm sure you

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Speaker 1: are counseling a lot of people in this area right now.

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Speaker 1: Tell us what that looks like out there.

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Speaker 4: You know, when we start to get to that point

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Speaker 4: where we have to really think about what's next, we

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Speaker 4: see the end of the road workwise. The most important

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Speaker 4: thing to do is start building your post work life

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Speaker 4: while you're still working. Because I'm going eighty miles an

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Speaker 4: hour and then I'm going to throw the brakes on

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Speaker 4: fully is really jarring. It is not the healthiest way

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Speaker 4: I go about it, and it's why over the years,

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Speaker 4: many people who have poured everything into their careers died

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Speaker 4: soon after retirement because they've lost their sense of purpose

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Speaker 4: and so you don't wait until the last day to

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Speaker 4: start thinking about your next stage. You think about it

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Speaker 4: before so that you're actually retiring to something instead of

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Speaker 4: just from something.

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Speaker 1: You talked about high achievers, and we deal with a

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Speaker 1: lot of those here at All Worth. You know, you're

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Speaker 1: going eighty miles an hour to quote you know what

437
00:20:42,160 --> 00:20:45,359
Speaker 1: you just said, it's very hard to be going ninety

438
00:20:45,400 --> 00:20:49,280
Speaker 1: miles an hour and then hit stop and come up

439
00:20:49,280 --> 00:20:51,359
Speaker 1: and say, well, now what do I do? What are

440
00:20:51,480 --> 00:20:54,920
Speaker 1: some of the biggest challenges you face as you counsel

441
00:20:55,040 --> 00:20:59,159
Speaker 1: folks when they're trying to rewire so to speak, instead

442
00:20:59,200 --> 00:20:59,920
Speaker 1: of just retire.

443
00:21:01,720 --> 00:21:04,719
Speaker 4: So the people that have the hardest time with this

444
00:21:04,800 --> 00:21:11,160
Speaker 4: transition or people who solely or mostly identify with their careers.

445
00:21:11,640 --> 00:21:15,760
Speaker 4: So we see this in Washington with politicians hanging on

446
00:21:15,760 --> 00:21:18,920
Speaker 4: on both sides way too long, and that happens in

447
00:21:18,960 --> 00:21:22,560
Speaker 4: the private sector as well. And so the more you

448
00:21:22,640 --> 00:21:26,440
Speaker 4: identify is Joe Blow from the Jones Company as your

449
00:21:26,480 --> 00:21:30,400
Speaker 4: primary source of your identity, the harder that the herder

450
00:21:30,480 --> 00:21:34,119
Speaker 4: that moving away is going to be. And so moving

451
00:21:34,200 --> 00:21:36,920
Speaker 4: into thinking about what do you want to be known

452
00:21:37,000 --> 00:21:40,640
Speaker 4: as after you retire, So it could be you could

453
00:21:40,640 --> 00:21:43,120
Speaker 4: be a thought leader on something you could have an

454
00:21:43,240 --> 00:21:45,879
Speaker 4: area of expertise that served you well in your career.

455
00:21:46,359 --> 00:21:49,960
Speaker 4: So it's switching that mindset from I'm the person in

456
00:21:50,080 --> 00:21:53,359
Speaker 4: charge to I potentially I'm going to coach and mentor

457
00:21:53,680 --> 00:21:57,280
Speaker 4: and be an example for those in charge, and we

458
00:21:57,440 --> 00:22:04,560
Speaker 4: overstay are welcome because no one really recognizes. It's like

459
00:22:04,600 --> 00:22:08,120
Speaker 4: your parent never recognizes themselves when it's time to give

460
00:22:08,200 --> 00:22:11,880
Speaker 4: up driving, but everybody around it, everybody around you see

461
00:22:12,000 --> 00:22:15,600
Speaker 4: that way before you do, and so it's it's really,

462
00:22:15,800 --> 00:22:18,800
Speaker 4: you know, it's really important to have those people around

463
00:22:18,840 --> 00:22:21,720
Speaker 4: you that help you think about how can I take

464
00:22:21,760 --> 00:22:25,080
Speaker 4: what I've accomplished in the last forty years, take a

465
00:22:25,119 --> 00:22:29,240
Speaker 4: piece of that that really really likes my fire, and

466
00:22:29,240 --> 00:22:32,560
Speaker 4: then how can I build around that so that I'm

467
00:22:32,600 --> 00:22:37,639
Speaker 4: not necessarily stopping all work after I retire. But maybe

468
00:22:37,720 --> 00:22:41,959
Speaker 4: I'm drilling down to the stuff I'm best at and

469
00:22:42,000 --> 00:22:44,640
Speaker 4: I've focus on growing that while I'm also doing other

470
00:22:44,720 --> 00:22:45,600
Speaker 4: things I'm interested in.

471
00:22:46,080 --> 00:22:48,359
Speaker 2: See, one of the things with that we've almost always

472
00:22:48,359 --> 00:22:50,159
Speaker 2: come up with and when helping someone figure out how

473
00:22:50,160 --> 00:22:52,879
Speaker 2: to retire is we discovered that they've spent almost no

474
00:22:53,040 --> 00:22:54,960
Speaker 2: time thinking about what life is going to be like,

475
00:22:55,040 --> 00:22:56,520
Speaker 2: you know, kind of what you were just hinting at,

476
00:22:56,760 --> 00:22:58,399
Speaker 2: what will life be like when I'm when I'm not

477
00:22:58,440 --> 00:23:00,440
Speaker 2: the big, the big, big person in the room anymore,

478
00:23:00,920 --> 00:23:03,000
Speaker 2: And they start to think. You know, a lot of

479
00:23:03,000 --> 00:23:04,960
Speaker 2: people kind of get distracted by the idea that I'm

480
00:23:05,000 --> 00:23:07,120
Speaker 2: just exhausted, I got nothing left to make the finish line,

481
00:23:07,160 --> 00:23:09,320
Speaker 2: and they start to think about, you know, I just

482
00:23:09,400 --> 00:23:11,320
Speaker 2: want to be done, and then we point out there's

483
00:23:11,359 --> 00:23:13,560
Speaker 2: an awful lot of time you know that you're going

484
00:23:13,640 --> 00:23:16,200
Speaker 2: to have to spend doing nothing. One of the things

485
00:23:16,200 --> 00:23:18,119
Speaker 2: that they'll start to think is that, well, I'll just

486
00:23:18,280 --> 00:23:20,119
Speaker 2: I can work on an arrangement. I'll work less hours

487
00:23:20,119 --> 00:23:22,800
Speaker 2: doing the same job. That always seems to end badly

488
00:23:22,880 --> 00:23:24,960
Speaker 2: in my opinion. That's why I'd like to get your opinion,

489
00:23:25,160 --> 00:23:27,560
Speaker 2: because you know, the people still dump the same amount

490
00:23:27,600 --> 00:23:29,760
Speaker 2: of stuff on your desk because you are determined to

491
00:23:29,760 --> 00:23:31,760
Speaker 2: be that person. You are the person who does the things,

492
00:23:31,800 --> 00:23:33,600
Speaker 2: and nobody cares that you're only working twenty hours a

493
00:23:33,640 --> 00:23:36,520
Speaker 2: week nowadays. So my advice is to go somewhere where

494
00:23:36,520 --> 00:23:38,320
Speaker 2: you can use your skills but still be the dumbest

495
00:23:38,320 --> 00:23:40,919
Speaker 2: person in the room in terms of not being that person.

496
00:23:41,200 --> 00:23:43,280
Speaker 2: Does that make am I giving good advice there?

497
00:23:43,359 --> 00:23:44,880
Speaker 3: Or do you ever run across that situation?

498
00:23:45,960 --> 00:23:51,800
Speaker 4: No, you absolutely are giving great advice. We absolutely do

499
00:23:51,960 --> 00:23:55,040
Speaker 4: not give enough attention to how to make that transition.

500
00:23:55,560 --> 00:23:59,160
Speaker 4: And everybody I know over sixty says, this is way

501
00:23:59,200 --> 00:24:01,439
Speaker 4: harder than I it was going to be, because I

502
00:24:01,560 --> 00:24:04,440
Speaker 4: really thought that I was just going to go sit

503
00:24:04,520 --> 00:24:06,960
Speaker 4: on the porch somewhere. Well, after a few weeks of

504
00:24:07,000 --> 00:24:10,520
Speaker 4: doing that at most, you realize that by seven thirty

505
00:24:10,560 --> 00:24:13,439
Speaker 4: eight o'clock you've had your coffee, you've caught up all

506
00:24:13,560 --> 00:24:15,879
Speaker 4: the things you'd like to read in the morning. Maybe

507
00:24:15,880 --> 00:24:17,920
Speaker 4: you can play golf a couple of days a week,

508
00:24:18,000 --> 00:24:21,879
Speaker 4: but that's not probably going to be enough. And so

509
00:24:22,080 --> 00:24:26,160
Speaker 4: starting to imagine how you're going to spend your weeks

510
00:24:26,560 --> 00:24:28,159
Speaker 4: and start to saying, you know, maybe I might like

511
00:24:28,200 --> 00:24:30,440
Speaker 4: to work, I might like to try something new, or

512
00:24:30,480 --> 00:24:33,000
Speaker 4: I might like to take a section of what I've

513
00:24:33,000 --> 00:24:35,720
Speaker 4: done in the past and really build maybe a practice

514
00:24:35,760 --> 00:24:39,400
Speaker 4: around it where I work, where where I only say

515
00:24:39,480 --> 00:24:42,880
Speaker 4: yes to the things that I'm absolutely going to love

516
00:24:42,920 --> 00:24:45,040
Speaker 4: and look forward to. And I think at this stage

517
00:24:45,080 --> 00:24:47,879
Speaker 4: of life there's a really big question you have to

518
00:24:48,000 --> 00:24:52,199
Speaker 4: understand the difference between what you can do and what

519
00:24:52,240 --> 00:24:55,800
Speaker 4: you want to do, and that there's a real big

520
00:24:55,800 --> 00:24:57,720
Speaker 4: difference because we get really caught up and why I

521
00:24:57,720 --> 00:24:59,480
Speaker 4: could do this or I could do this. So the

522
00:24:59,520 --> 00:25:02,000
Speaker 4: truth is you don't want to do all those things equally.

523
00:25:02,600 --> 00:25:05,240
Speaker 4: So getting really clear around if I could spend if

524
00:25:05,400 --> 00:25:08,959
Speaker 4: I'm only going to spend two days a week in

525
00:25:09,200 --> 00:25:12,040
Speaker 4: active work related to what I did in the past,

526
00:25:12,240 --> 00:25:15,399
Speaker 4: what would I do during those dates? What would I

527
00:25:15,440 --> 00:25:17,359
Speaker 4: do and what would I avoid? What was I yes to?

528
00:25:17,480 --> 00:25:19,240
Speaker 4: What would I say no to? Now? How am I

529
00:25:19,320 --> 00:25:20,960
Speaker 4: going to fill the rest of that time? If you

530
00:25:20,960 --> 00:25:25,560
Speaker 4: don't actively plan how to fill your time, then you

531
00:25:25,680 --> 00:25:29,520
Speaker 4: will fall back into what you no And it gets

532
00:25:29,560 --> 00:25:32,200
Speaker 4: to e said earlier. If you don't have a good

533
00:25:32,240 --> 00:25:35,080
Speaker 4: relationship with your partner and home is not a place

534
00:25:35,080 --> 00:25:37,720
Speaker 4: where you want to spend more time, or you don't

535
00:25:37,760 --> 00:25:40,840
Speaker 4: have anything in the community you're involved in in any way,

536
00:25:42,160 --> 00:25:46,080
Speaker 4: if you've been one hundred percent work person, retirement is

537
00:25:46,119 --> 00:25:48,560
Speaker 4: going to be very, very painful for you. And so

538
00:25:48,680 --> 00:25:50,840
Speaker 4: instead of kicking the can down the road and waiting

539
00:25:50,880 --> 00:25:55,119
Speaker 4: until the day when it's become obvious to everyone, maybe

540
00:25:55,119 --> 00:25:58,320
Speaker 4: accept you that it's time for you to go. You

541
00:25:58,480 --> 00:26:01,680
Speaker 4: have to start thinking about your gainful exit and then

542
00:26:01,800 --> 00:26:04,639
Speaker 4: what do you mosta what do you most firmly want

543
00:26:04,680 --> 00:26:07,600
Speaker 4: to do in this last section of your life? Because

544
00:26:07,640 --> 00:26:10,160
Speaker 4: really that's what it is. Can I recommend a book

545
00:26:10,600 --> 00:26:14,840
Speaker 4: Wisdom at Work? Wisdom at Work by Chip Conley is

546
00:26:14,840 --> 00:26:17,240
Speaker 4: the best book I've read to help you go through

547
00:26:17,280 --> 00:26:20,840
Speaker 4: that and figure that out. How do you transform yourself

548
00:26:20,880 --> 00:26:22,680
Speaker 4: into a wise mentor instead of a doer?

549
00:26:23,119 --> 00:26:25,800
Speaker 1: You're listening to Simply Money presented by all Worth Financial

550
00:26:25,880 --> 00:26:34,720
Speaker 1: on fifty five KRC the talk station. You're listening to

551
00:26:34,720 --> 00:26:37,840
Speaker 1: Simply Money presented by all Worth Financial. I'm Bob Sponseller

552
00:26:37,880 --> 00:26:40,919
Speaker 1: along with Brian James. Do you have a financial question

553
00:26:41,000 --> 00:26:43,320
Speaker 1: for us? There's a red button you can click while

554
00:26:43,320 --> 00:26:46,160
Speaker 1: you're listening to the show right there on the iHeart app.

555
00:26:46,240 --> 00:26:49,680
Speaker 1: Simply record your question and it'll come straight to us.

556
00:26:50,200 --> 00:26:53,480
Speaker 1: Speaking of questions, Brian, the first one comes from Dan

557
00:26:54,240 --> 00:26:57,840
Speaker 1: in Mount Washington and he asks how much risk should

558
00:26:57,880 --> 00:26:59,840
Speaker 1: I really be taking if I already have enough to

559
00:27:00,160 --> 00:27:01,040
Speaker 1: tire comfortably?

560
00:27:01,480 --> 00:27:03,879
Speaker 2: Yeah, this is a great question because it comes up

561
00:27:04,000 --> 00:27:06,439
Speaker 2: every single time where we do a financial plan for somebody.

562
00:27:07,080 --> 00:27:10,199
Speaker 2: If you've put yourself in a strong position, then you

563
00:27:10,280 --> 00:27:12,880
Speaker 2: might find yourself feeling like you've got more than enough

564
00:27:12,920 --> 00:27:16,280
Speaker 2: to make it and you don't have to take any risk.

565
00:27:16,320 --> 00:27:18,280
Speaker 2: And that's a perfectly logical As long as you've done

566
00:27:19,359 --> 00:27:22,000
Speaker 2: done the research and made sure you've done some stress

567
00:27:22,040 --> 00:27:24,200
Speaker 2: testing and those kinds of things, then it's very fair

568
00:27:24,240 --> 00:27:25,720
Speaker 2: to say, I don't need to take much risk. I

569
00:27:25,720 --> 00:27:28,160
Speaker 2: want to put this in super safe investments and maybe

570
00:27:28,240 --> 00:27:29,960
Speaker 2: just keep up with inflation and otherwise not.

571
00:27:29,880 --> 00:27:30,600
Speaker 3: Worry about it.

572
00:27:30,840 --> 00:27:34,040
Speaker 2: And that's a perfectly sound financial plan as long as

573
00:27:34,040 --> 00:27:36,959
Speaker 2: the math works. Now, what you will wrestle with at

574
00:27:37,000 --> 00:27:38,760
Speaker 2: some point you're gonna go, wait a minute, this money's

575
00:27:38,800 --> 00:27:41,600
Speaker 2: gonna sit here for twenty twenty five, thirty years, and

576
00:27:41,760 --> 00:27:43,720
Speaker 2: I'm gonna spend the interest. But otherwise it's just gonna

577
00:27:43,760 --> 00:27:45,440
Speaker 2: kind of sit there, and aren't I kind of taking

578
00:27:45,440 --> 00:27:47,360
Speaker 2: it out of my kid's mouths if I don't let

579
00:27:47,359 --> 00:27:50,000
Speaker 2: it grow. So a lot of times people come to

580
00:27:50,040 --> 00:27:52,119
Speaker 2: that conclusion, and the answer intends to be somewhere in

581
00:27:52,119 --> 00:27:53,600
Speaker 2: the middle. I don't need to lock it down and

582
00:27:53,640 --> 00:27:55,520
Speaker 2: bury in the backyard, but I also don't need to

583
00:27:55,520 --> 00:27:57,439
Speaker 2: throw caution to the wind. So maybe I'll take a

584
00:27:57,480 --> 00:28:00,000
Speaker 2: sort of mid range risk position, so I'm still great

585
00:28:00,080 --> 00:28:02,040
Speaker 2: rowing it over time. But again it all comes down

586
00:28:02,080 --> 00:28:04,840
Speaker 2: to stress testing and understanding those the possible outcomes of that.

587
00:28:05,680 --> 00:28:08,840
Speaker 1: Well, and it's not just the financial outcomes, but it's

588
00:28:09,280 --> 00:28:11,520
Speaker 1: how can you sleep at night and actually enjoy your

589
00:28:11,520 --> 00:28:14,760
Speaker 1: retirement without worrying about money every day? That's right.

590
00:28:15,160 --> 00:28:17,280
Speaker 3: The pendulum swings both ways.

591
00:28:17,359 --> 00:28:19,960
Speaker 2: Right, You'll have those sleepless nights when we're having scary headlines,

592
00:28:19,960 --> 00:28:22,040
Speaker 2: but also you'll question yourself when the market is going

593
00:28:22,080 --> 00:28:24,960
Speaker 2: great guns. Both of those things will happen several times

594
00:28:25,160 --> 00:28:27,520
Speaker 2: throughout the remainder of your life. So again, just set

595
00:28:27,560 --> 00:28:30,040
Speaker 2: your course according to what you're comfortable with. Next question,

596
00:28:30,160 --> 00:28:32,919
Speaker 2: Don and Montgomery asks, what's a smarter way that I

597
00:28:32,920 --> 00:28:35,800
Speaker 2: can plan for long term care rather than just buying insurance?

598
00:28:35,840 --> 00:28:36,399
Speaker 3: What do you think of that?

599
00:28:36,400 --> 00:28:39,520
Speaker 1: Bob, Well, I'd say to Don, you know, obviously not

600
00:28:39,640 --> 00:28:42,960
Speaker 1: buying insurance, your self insuring, And yeah, there's a lot

601
00:28:42,960 --> 00:28:44,640
Speaker 1: of ways to do that if you get out in

602
00:28:44,680 --> 00:28:46,840
Speaker 1: front of it, you know, ahead of time, and plan

603
00:28:47,000 --> 00:28:50,480
Speaker 1: one way. And Brian talked about this in a prior segment.

604
00:28:51,000 --> 00:28:53,800
Speaker 1: Take full advantage of that health savings account. If you're

605
00:28:53,840 --> 00:28:57,239
Speaker 1: in a high dedictable healthcare plan, you can suck that

606
00:28:57,360 --> 00:29:01,040
Speaker 1: money away pre tax, let it grow, don't spend it

607
00:29:01,120 --> 00:29:04,800
Speaker 1: every year, Let that stuff stockpile. So you've got that

608
00:29:04,920 --> 00:29:07,719
Speaker 1: three to four hundred thousand dollars account built up on

609
00:29:07,760 --> 00:29:10,720
Speaker 1: a tax free basis, and you've got that sitting there

610
00:29:11,120 --> 00:29:14,640
Speaker 1: ready to use when the time comes for healthcare expenses

611
00:29:14,680 --> 00:29:18,360
Speaker 1: in retirement. You know, another thing is to set aside

612
00:29:18,360 --> 00:29:22,160
Speaker 1: a separate account that you're building just for healthcare expenses.

613
00:29:23,080 --> 00:29:25,240
Speaker 1: And a good way to do that on a tax

614
00:29:25,280 --> 00:29:28,160
Speaker 1: efficient way, that is to have an account separate from

615
00:29:28,200 --> 00:29:30,840
Speaker 1: your retirement plan, your four to one K and iras

616
00:29:31,480 --> 00:29:34,760
Speaker 1: that is in a tax efficiently managed portfolio where you

617
00:29:34,760 --> 00:29:38,400
Speaker 1: can draw that money out for healthcare costs and not

618
00:29:38,640 --> 00:29:40,880
Speaker 1: jack up your tax exposure when you do it. So

619
00:29:40,920 --> 00:29:43,160
Speaker 1: those are two thoughts off the top of my head.

620
00:29:43,200 --> 00:29:45,480
Speaker 2: Brian, Yeah, and Bob, I would add on the front

621
00:29:45,560 --> 00:29:47,240
Speaker 2: end of this before you even get to those steps,

622
00:29:47,280 --> 00:29:49,560
Speaker 2: I would understand your situation to begin with.

623
00:29:49,640 --> 00:29:51,000
Speaker 3: There's a lot of people out there.

624
00:29:51,360 --> 00:29:53,520
Speaker 2: Well, the headlines are scary, of course, because that makes

625
00:29:53,560 --> 00:29:55,800
Speaker 2: for good to keeps your eyes on the screen and

626
00:29:55,800 --> 00:29:57,320
Speaker 2: reading things but there's a lot of people out there

627
00:29:57,320 --> 00:29:59,360
Speaker 2: who are going to be able to self ensure. If

628
00:29:59,360 --> 00:30:01,480
Speaker 2: you're somebody who's made it to retirement with a million,

629
00:30:01,520 --> 00:30:03,640
Speaker 2: million and a half, you know, maybe more than that,

630
00:30:04,120 --> 00:30:06,320
Speaker 2: then that math that has gotten you to that point

631
00:30:06,360 --> 00:30:09,080
Speaker 2: is going to continue. Your assets are going to continue

632
00:30:09,080 --> 00:30:11,240
Speaker 2: to grow. You may be able to self ensure. And

633
00:30:11,360 --> 00:30:13,320
Speaker 2: don't think that when we say you're going to need

634
00:30:13,360 --> 00:30:15,520
Speaker 2: to spend an extra hundred thousand on long term care,

635
00:30:15,720 --> 00:30:18,560
Speaker 2: that that's layered on top of all your other expenses. Remember,

636
00:30:18,600 --> 00:30:20,560
Speaker 2: long term care is a stay in a nursing home.

637
00:30:20,680 --> 00:30:23,000
Speaker 2: You're not going to the grocery store anymore. You're going

638
00:30:23,000 --> 00:30:25,160
Speaker 2: you're not traveling, You're not doing all those other things.

639
00:30:25,240 --> 00:30:27,120
Speaker 2: You may have sold the house, the mortgage may be gone,

640
00:30:27,280 --> 00:30:29,920
Speaker 2: you won't have property taxes, housing expenses. It's not a

641
00:30:29,920 --> 00:30:32,680
Speaker 2: pure hundred thousand layered on top. You may very well

642
00:30:32,720 --> 00:30:35,320
Speaker 2: be able to fund it without worrying about insurance, but

643
00:30:35,480 --> 00:30:38,480
Speaker 2: understand your situation to begin with, then worry about whether

644
00:30:38,520 --> 00:30:39,360
Speaker 2: you need to take steps.

645
00:30:39,760 --> 00:30:42,840
Speaker 1: Well, what you just explain is running some different scenarios

646
00:30:42,880 --> 00:30:45,400
Speaker 1: based on assumptions, so that you're going into this with

647
00:30:45,560 --> 00:30:48,200
Speaker 1: what eyes wide open, and you actually have a plan,

648
00:30:48,360 --> 00:30:51,440
Speaker 1: not just leaving it to chance. All right, Brian Michael

649
00:30:51,480 --> 00:30:54,480
Speaker 1: and Fort Thomas asks, what's the best way to pass

650
00:30:54,480 --> 00:30:59,440
Speaker 1: a vacation property to my kids without causing drama? Yeah?

651
00:30:59,440 --> 00:31:00,640
Speaker 3: This is so fir us off Michael.

652
00:31:00,640 --> 00:31:02,760
Speaker 2: I want to thank you for defending us in Fort

653
00:31:02,800 --> 00:31:04,720
Speaker 2: Thomas from those people in Fort Wright. I always wonder

654
00:31:04,720 --> 00:31:06,360
Speaker 2: if they shoot at each other down there. But anyway

655
00:31:06,560 --> 00:31:09,680
Speaker 2: a good way to send vacation property to the kids

656
00:31:09,720 --> 00:31:12,680
Speaker 2: where I would start here, honestly, make sure your kids

657
00:31:12,760 --> 00:31:15,600
Speaker 2: want that property. I think everybody needs to be open

658
00:31:15,640 --> 00:31:18,239
Speaker 2: minded that something that means a lot to you, it

659
00:31:18,240 --> 00:31:19,760
Speaker 2: may mean a lot to your children, but it may

660
00:31:19,800 --> 00:31:22,160
Speaker 2: not mean as much if you're not there. If the

661
00:31:22,240 --> 00:31:25,560
Speaker 2: family truly loves wherever this destination is and they want

662
00:31:25,560 --> 00:31:27,760
Speaker 2: to go for the memories and all that, then that's fantastic.

663
00:31:27,960 --> 00:31:30,520
Speaker 2: But it's very often that I hear that somebody inherited

664
00:31:30,560 --> 00:31:33,200
Speaker 2: something that they just don't value. We remember, we loved

665
00:31:33,240 --> 00:31:34,920
Speaker 2: going there with mom and dad, but we've been there

666
00:31:34,920 --> 00:31:36,960
Speaker 2: our entire lives. Mom and Dad aren't here anymore, so

667
00:31:37,000 --> 00:31:39,680
Speaker 2: it's it just doesn't have the same meaning. So before

668
00:31:39,720 --> 00:31:41,720
Speaker 2: you get too wound up, and deciding how they're going

669
00:31:41,800 --> 00:31:43,960
Speaker 2: to own it. Make sure your children want to own

670
00:31:44,000 --> 00:31:46,480
Speaker 2: it in the first place. Bring them into the conversation,

671
00:31:46,760 --> 00:31:49,400
Speaker 2: determine whether they want that. Then you can take appropriate steps.

672
00:31:49,560 --> 00:31:51,080
Speaker 2: You may find that they say, we love it, we

673
00:31:51,120 --> 00:31:53,680
Speaker 2: appreciate you taking us here in this, that's this benefit

674
00:31:53,680 --> 00:31:55,560
Speaker 2: we've had, but after it's gone, we don't think we'll

675
00:31:55,600 --> 00:31:57,720
Speaker 2: use it. There's your answer, and be okay that you've

676
00:31:57,720 --> 00:32:00,000
Speaker 2: made them happy. You're going to give them cash by

677
00:32:00,080 --> 00:32:01,880
Speaker 2: selling it and they can do what they want with it,

678
00:32:02,080 --> 00:32:04,160
Speaker 2: rather than burdening with something that they were being too

679
00:32:04,160 --> 00:32:06,840
Speaker 2: polite to tell you they didn't want. Have that conversation first.

680
00:32:07,240 --> 00:32:09,840
Speaker 1: I totally agree. I mean, all these complex you know,

681
00:32:09,960 --> 00:32:13,120
Speaker 1: trusts and all that can be great, but it really

682
00:32:13,160 --> 00:32:17,160
Speaker 1: comes down to proactive communication with your family, you know,

683
00:32:17,160 --> 00:32:20,520
Speaker 1: knowing what everybody wants in advance, and that's so key.

684
00:32:21,400 --> 00:32:23,680
Speaker 1: All right, Brian, here's another one for you. VICKI and

685
00:32:23,720 --> 00:32:27,480
Speaker 1: blue Ash asks, should I set up a trust even

686
00:32:27,520 --> 00:32:30,200
Speaker 1: if I'm not planning to leave a huge inheritance?

687
00:32:30,840 --> 00:32:33,920
Speaker 2: Very very common question, right, Bob. We hear this very frequently.

688
00:32:34,000 --> 00:32:37,000
Speaker 2: People associate a decent amount of money with I must

689
00:32:37,000 --> 00:32:39,440
Speaker 2: have a trust in the mix here. Trusts are rarely bad.

690
00:32:39,960 --> 00:32:42,479
Speaker 2: That that's not the case that I'm going to make here,

691
00:32:42,520 --> 00:32:44,800
Speaker 2: but they also sometimes can be a sledgehammer to kill

692
00:32:44,840 --> 00:32:47,600
Speaker 2: a nat You know, it really kind of depends if

693
00:32:47,800 --> 00:32:50,760
Speaker 2: a lot of times you can accomplish what you need

694
00:32:50,800 --> 00:32:53,480
Speaker 2: to by simply naming your beneficiaries. If you have a

695
00:32:53,520 --> 00:32:56,600
Speaker 2: simple situation, a couple kids, maybe they're adults, they're doing

696
00:32:56,600 --> 00:32:58,040
Speaker 2: fine on their own, and you trust them to make

697
00:32:58,040 --> 00:33:00,240
Speaker 2: good decisions, and it's pretty obvious, you know, we're who's

698
00:33:00,240 --> 00:33:02,040
Speaker 2: gonna inherit all the money. You may not need a

699
00:33:02,080 --> 00:33:04,680
Speaker 2: trust just because there's a lot of money involved. When

700
00:33:04,720 --> 00:33:07,960
Speaker 2: in my mind, trusts come in when there are different concerns,

701
00:33:07,960 --> 00:33:10,440
Speaker 2: there are moving parts. Perhaps this is a second marriage

702
00:33:10,520 --> 00:33:13,240
Speaker 2: and there's you know, two spouses have their own sets

703
00:33:13,280 --> 00:33:14,960
Speaker 2: of kids. You have to you do have to be

704
00:33:15,040 --> 00:33:17,360
Speaker 2: very careful. That's where you can get some very unexpected

705
00:33:17,360 --> 00:33:19,240
Speaker 2: outcomes if you don't pay attention to that. But that's

706
00:33:19,240 --> 00:33:22,239
Speaker 2: so that's the whole show in itself. But otherwise, just

707
00:33:22,280 --> 00:33:24,440
Speaker 2: because you have money doesn't mean you have to have

708
00:33:24,480 --> 00:33:27,040
Speaker 2: a trust. Just make sure you understand what it is

709
00:33:27,040 --> 00:33:30,160
Speaker 2: that you want. A trusted attorney will advise you, I

710
00:33:30,160 --> 00:33:32,600
Speaker 2: gotta be careful here. We are not attorneys, but we

711
00:33:32,640 --> 00:33:34,520
Speaker 2: can kind of share some stories. So but at the

712
00:33:34,520 --> 00:33:36,880
Speaker 2: same time, don't assume you must have a trust.

713
00:33:37,680 --> 00:33:40,400
Speaker 1: All right. Coming up next, we hear the bottom line

714
00:33:40,440 --> 00:33:43,920
Speaker 1: from Brian where he's gonna teach us about blending wroth

715
00:33:44,120 --> 00:33:47,680
Speaker 1: and regular contributions within your four to one k plan.

716
00:33:48,320 --> 00:33:51,040
Speaker 1: You're listening to Simply Money presented by all Worth Financial

717
00:33:51,080 --> 00:33:58,720
Speaker 1: on fifty five KRC the talk station at this moment,

718
00:33:59,280 --> 00:34:01,920
Speaker 1: you're listening this Simply Money presented by all Worth Financial

719
00:34:01,960 --> 00:34:06,000
Speaker 1: Lombob spond Seller along with Brian James. All Right, Brian,

720
00:34:06,040 --> 00:34:07,720
Speaker 1: give us your bottom line.

721
00:34:08,320 --> 00:34:10,120
Speaker 2: So my bottom line here, Bob, I want to talk

722
00:34:10,160 --> 00:34:12,560
Speaker 2: about something that comes up very frequently when we're sitting

723
00:34:12,560 --> 00:34:15,040
Speaker 2: with clients and people who are within maybe two three

724
00:34:15,080 --> 00:34:17,799
Speaker 2: years of retiring. A lot of times they'll point out that, Hey,

725
00:34:17,800 --> 00:34:18,960
Speaker 2: you know what, I feel like I don't have a

726
00:34:18,960 --> 00:34:21,000
Speaker 2: lot on the wroth side. I feel like I should

727
00:34:21,000 --> 00:34:21,959
Speaker 2: have some tax free stuff.

728
00:34:22,040 --> 00:34:22,759
Speaker 3: Ryan, what do you think?

729
00:34:23,000 --> 00:34:24,960
Speaker 2: And my answer is usually, look, you're you're in that

730
00:34:25,040 --> 00:34:28,200
Speaker 2: you didn't make a mistake right, You probably started your career.

731
00:34:28,239 --> 00:34:30,800
Speaker 2: If you're looking at retiring right now. You probably started

732
00:34:30,840 --> 00:34:32,879
Speaker 2: your career back when the only thing you could do

733
00:34:32,960 --> 00:34:34,600
Speaker 2: in your four oh one K was pre tax and

734
00:34:34,640 --> 00:34:37,320
Speaker 2: that's what you did. Did good job. So but people

735
00:34:37,400 --> 00:34:40,520
Speaker 2: now nowadays four oh one k ROTH, I'm not talking

736
00:34:40,640 --> 00:34:42,600
Speaker 2: roth Ira. You can also do it inside a four

737
00:34:42,640 --> 00:34:45,759
Speaker 2: oh one K four oh three B nowadays, that's fairly ubiquitous.

738
00:34:45,800 --> 00:34:48,359
Speaker 2: It's mostly available over the last five to seven years,

739
00:34:48,400 --> 00:34:50,719
Speaker 2: it seems like, so people are questioning, I've only got

740
00:34:50,719 --> 00:34:52,920
Speaker 2: a couple of years left. I've got a good pile

741
00:34:52,960 --> 00:34:54,440
Speaker 2: built up on my pre tax side, but I really

742
00:34:54,480 --> 00:34:55,960
Speaker 2: don't have any on the ROTH side. What should I

743
00:34:56,000 --> 00:34:58,400
Speaker 2: do about that? Should I start putting in the wroth. Well,

744
00:34:58,440 --> 00:35:00,880
Speaker 2: there's a couple moving parts to that. First off, remember

745
00:35:01,280 --> 00:35:04,520
Speaker 2: roth Ira, WROTH four oh and k or Ira contributions

746
00:35:04,560 --> 00:35:06,720
Speaker 2: are not deductible. So if you're in a high bracket,

747
00:35:07,360 --> 00:35:09,000
Speaker 2: which is a good chance of that because you're in

748
00:35:09,040 --> 00:35:11,719
Speaker 2: your print, your peak earning years, you're gonna be paying

749
00:35:11,760 --> 00:35:14,759
Speaker 2: taxes on those dollars, not additional taxes. You just don't

750
00:35:14,800 --> 00:35:17,080
Speaker 2: get an induction, right, So that would be a that

751
00:35:17,080 --> 00:35:18,880
Speaker 2: would be a downside to it. The other thing I

752
00:35:18,880 --> 00:35:21,279
Speaker 2: would suggest to think about is if ROTH is on

753
00:35:21,320 --> 00:35:23,160
Speaker 2: your mind, and it really should be for everybody. It

754
00:35:23,200 --> 00:35:24,960
Speaker 2: may not make sense right now, but it should be

755
00:35:25,040 --> 00:35:27,840
Speaker 2: on the horizon to at least consider, consider and learn about.

756
00:35:28,040 --> 00:35:30,880
Speaker 2: What I might suggest is maybe try to start building

757
00:35:30,920 --> 00:35:33,719
Speaker 2: up some cash somewhere else in a taxable account, and

758
00:35:33,760 --> 00:35:36,880
Speaker 2: what you might do with this taxable account after you retire.

759
00:35:37,120 --> 00:35:39,440
Speaker 2: There will be likely a window of time where you

760
00:35:39,480 --> 00:35:42,000
Speaker 2: have a very low bracket. So you your spouse are retired,

761
00:35:42,040 --> 00:35:44,160
Speaker 2: you're not bringing in salaries like you used to because

762
00:35:44,200 --> 00:35:46,640
Speaker 2: you don't have to anymore. Maybe you can pay the

763
00:35:46,640 --> 00:35:48,719
Speaker 2: bills with savings for a little while and not even

764
00:35:48,719 --> 00:35:51,640
Speaker 2: turn on Social Security. That is a time where you

765
00:35:51,680 --> 00:35:54,080
Speaker 2: will be in the lowest bracket that you've seen in decades,

766
00:35:54,120 --> 00:35:56,560
Speaker 2: and that's the time to be thinking about Roth conversions.

767
00:35:56,920 --> 00:35:59,160
Speaker 2: So now where we're sitting here, two three, four years

768
00:35:59,200 --> 00:36:01,759
Speaker 2: out for retirement, it may behove you to build up

769
00:36:01,760 --> 00:36:04,560
Speaker 2: some savings in a taxable not on not traditional or

770
00:36:04,680 --> 00:36:07,120
Speaker 2: not IRA, not pre tax, not WROTH, just a plain

771
00:36:07,160 --> 00:36:10,400
Speaker 2: old taxable account with which you will pay the taxes

772
00:36:10,440 --> 00:36:13,640
Speaker 2: on WROTH conversions when you reach that point where you're

773
00:36:13,680 --> 00:36:16,040
Speaker 2: in that low bracket again. So it doesn't have to

774
00:36:16,080 --> 00:36:19,000
Speaker 2: be contributed now to get you some WROTH access. If

775
00:36:19,000 --> 00:36:21,960
Speaker 2: you plan now, you can trigger that later and in

776
00:36:22,000 --> 00:36:23,880
Speaker 2: that window of time where things get a little bit

777
00:36:23,960 --> 00:36:26,920
Speaker 2: cheaper for you, you can do some significant WROTH conversions.

778
00:36:27,120 --> 00:36:30,080
Speaker 2: The window there is when you've started your low income

779
00:36:30,120 --> 00:36:34,319
Speaker 2: tax years and until you reach your required minimum distribution age,

780
00:36:34,360 --> 00:36:37,040
Speaker 2: which is either seventy three or seventy five depending.

781
00:36:36,640 --> 00:36:40,040
Speaker 3: On when you were born. That's my bottom line, all right.

782
00:36:39,920 --> 00:36:42,200
Speaker 1: Brian, And just piggybacking off of that. And I've seen

783
00:36:42,239 --> 00:36:44,279
Speaker 1: this a few times myself, and I'm sure you have

784
00:36:44,360 --> 00:36:48,440
Speaker 1: as well. Sometimes very high earning people in the peak

785
00:36:48,480 --> 00:36:52,320
Speaker 1: earning years right before they retire, they hear about WROTH

786
00:36:52,680 --> 00:36:55,840
Speaker 1: four oh one K and they just automatically gravitate to that.

787
00:36:56,560 --> 00:36:58,600
Speaker 1: And we got to remind folks that, you know, the

788
00:36:58,640 --> 00:37:01,960
Speaker 1: WROTH four oh one K worked great. You know, putting

789
00:37:02,760 --> 00:37:05,719
Speaker 1: after tax contributions in it works better and better the

790
00:37:05,800 --> 00:37:08,720
Speaker 1: longer runway. You have to allow that money to grow.

791
00:37:09,239 --> 00:37:11,640
Speaker 1: And if you're in a very high tax bracket, we

792
00:37:11,719 --> 00:37:15,040
Speaker 1: oftentimes tell people just stick with what you're doing, take

793
00:37:15,080 --> 00:37:18,759
Speaker 1: the pre tax approach, and then do what you just

794
00:37:18,840 --> 00:37:21,760
Speaker 1: talked about, you know, set aside that after tax non

795
00:37:22,040 --> 00:37:25,719
Speaker 1: retirement plan asset, you know, to do the tax planning with,

796
00:37:25,880 --> 00:37:29,080
Speaker 1: because if you pay too much taxes more than you

797
00:37:29,160 --> 00:37:32,640
Speaker 1: should be in those very high earning years, you know,

798
00:37:32,680 --> 00:37:36,560
Speaker 1: we're kind of we're kind of working in reverse of

799
00:37:36,560 --> 00:37:38,799
Speaker 1: what we're trying to do in terms of tax efficiency.

800
00:37:39,400 --> 00:37:40,560
Speaker 3: Yeah. I think that's a great point.

801
00:37:40,680 --> 00:37:43,400
Speaker 2: It does come up people question it, but understand the

802
00:37:43,400 --> 00:37:44,239
Speaker 2: pros and kinds of it.

803
00:37:45,320 --> 00:37:47,960
Speaker 1: Thanks for listening. You've been listening to Simply Money, presented

804
00:37:48,000 --> 00:37:51,520
Speaker 1: by all Worth Financial on fifty five KRC, the talk

805
00:37:51,600 --> 00:37:51,880
Speaker 1: station