1 00:00:05,480 --> 00:00:09,920 Speaker 1: Tonight the best and the worst money advice we've ever 2 00:00:09,960 --> 00:00:13,200 Speaker 1: heard at a party. You're listening to simply money that 3 00:00:13,200 --> 00:00:15,960 Speaker 1: had about all worth financial. I'm Bob Sponseller along with 4 00:00:16,079 --> 00:00:19,080 Speaker 1: Brian James. Well, I'm sure a lot of people are 5 00:00:19,120 --> 00:00:21,799 Speaker 1: gonna be going to some form of a Super Bowl 6 00:00:21,880 --> 00:00:25,080 Speaker 1: party this coming Sunday, and we've all been around those 7 00:00:25,160 --> 00:00:28,880 Speaker 1: people who love to talk about money at parties. And 8 00:00:29,000 --> 00:00:32,479 Speaker 1: for those people that think they're successful, everyone at the 9 00:00:32,560 --> 00:00:35,560 Speaker 1: table will likely nod and wish they'd shut up, and 10 00:00:35,840 --> 00:00:38,240 Speaker 1: you know, but they have to sit there and listen 11 00:00:38,320 --> 00:00:42,560 Speaker 1: to them, dispense with their wisdom handed down like coming 12 00:00:42,640 --> 00:00:45,559 Speaker 1: down from Mount syin I about how successful they are, 13 00:00:46,240 --> 00:00:50,000 Speaker 1: and then the ongoing advice spills out. What's dangerous is 14 00:00:50,080 --> 00:00:52,519 Speaker 1: this won't be bad advice from people who don't know 15 00:00:52,600 --> 00:00:56,440 Speaker 1: anything about money, Brian. Sometimes this comes from people who 16 00:00:57,000 --> 00:01:02,600 Speaker 1: others perceive as highly successful folks like doctors, business owners, lawyers, 17 00:01:03,040 --> 00:01:06,520 Speaker 1: and corporate executives. Let's get into it. What's some of 18 00:01:06,600 --> 00:01:10,360 Speaker 1: this advice that is typically dispensed around the table and 19 00:01:10,520 --> 00:01:12,640 Speaker 1: what do we need to listen to and more importantly, 20 00:01:13,080 --> 00:01:14,280 Speaker 1: what do we need to ignore? 21 00:01:14,760 --> 00:01:15,920 Speaker 2: Yeah, and I think the problem is. 22 00:01:16,360 --> 00:01:19,600 Speaker 3: It's not necessarily that these points in this advice is wrong. 23 00:01:19,840 --> 00:01:21,959 Speaker 3: It's just that we all tend to take this as 24 00:01:22,040 --> 00:01:23,840 Speaker 3: a one size fits all. You know, if there was 25 00:01:23,959 --> 00:01:26,960 Speaker 3: really a step by step, you know, ten step process 26 00:01:27,040 --> 00:01:29,600 Speaker 3: to financial success for each and every situation out there, 27 00:01:29,680 --> 00:01:31,640 Speaker 3: then we would all rely on one brochure that would 28 00:01:31,640 --> 00:01:33,800 Speaker 3: get passed around or one internet video. 29 00:01:33,920 --> 00:01:35,559 Speaker 2: So but you got to look on their own situation, 30 00:01:35,600 --> 00:01:36,839 Speaker 2: your own opportunities and risks. 31 00:01:37,000 --> 00:01:39,399 Speaker 1: And have you ever had to listen to somebody at 32 00:01:39,440 --> 00:01:42,679 Speaker 1: a party talk about how they lost money or mistakes 33 00:01:42,760 --> 00:01:44,600 Speaker 1: that they've made. Do you ever hear anybody do that? 34 00:01:45,080 --> 00:01:47,960 Speaker 3: Yeah, yeah, it will, I do. And but it's a 35 00:01:47,960 --> 00:01:50,640 Speaker 3: little bit different. It's not them, it'll be the opposite. 36 00:01:50,680 --> 00:01:53,240 Speaker 3: It'll be well, uncle Charlie lost money in the stock market, 37 00:01:53,320 --> 00:01:55,440 Speaker 3: so I'm not touching that stock market. And to that one, 38 00:01:55,520 --> 00:01:57,400 Speaker 3: I love that one because to that one, I say, well, 39 00:01:57,480 --> 00:01:59,520 Speaker 3: I'm looking at the stock market and it's pretty much 40 00:01:59,560 --> 00:02:01,560 Speaker 3: still here, and I can prove that it's been here 41 00:02:01,640 --> 00:02:04,280 Speaker 3: for a couple hundred years. So Uncle Charlie was gambling 42 00:02:04,360 --> 00:02:06,360 Speaker 3: on something. He didn't lose it on the stock market. 43 00:02:06,520 --> 00:02:08,920 Speaker 3: He lost it on something that doesn't exist anymore because he. 44 00:02:08,960 --> 00:02:09,799 Speaker 2: Tried to take a flyer. 45 00:02:10,600 --> 00:02:12,560 Speaker 3: So let's get into some of these some of these 46 00:02:12,800 --> 00:02:15,519 Speaker 3: these things that are passed along as great advice that 47 00:02:15,840 --> 00:02:18,560 Speaker 3: may not necessarily apply, one of which is I don't 48 00:02:18,600 --> 00:02:21,880 Speaker 3: need bonds anymore. Well, this does sound logical, comes from 49 00:02:22,280 --> 00:02:25,240 Speaker 3: a decent point of well, stocks have done great, bonds 50 00:02:25,280 --> 00:02:27,320 Speaker 3: do feel boring, and interest rates had been so low 51 00:02:27,440 --> 00:02:29,399 Speaker 3: for so long I'm talking about prior to the last 52 00:02:29,639 --> 00:02:32,920 Speaker 3: couple three years, bonds just did nothing and actually suffered. 53 00:02:33,040 --> 00:02:34,880 Speaker 3: And there is some truth to the fact that bonds 54 00:02:34,919 --> 00:02:37,200 Speaker 3: have started to move in a similar direction to the 55 00:02:37,240 --> 00:02:38,840 Speaker 3: stock market. It used to be one with zig and 56 00:02:38,880 --> 00:02:40,360 Speaker 3: the other with zag, and that makes for a good 57 00:02:40,400 --> 00:02:43,560 Speaker 3: diversified portfolio. But now the more intense things have gotten, 58 00:02:43,919 --> 00:02:48,760 Speaker 3: the more information is quickly ascertained out there, everything tends 59 00:02:48,800 --> 00:02:51,359 Speaker 3: to move somewhat in the same direction. So bonds, no, 60 00:02:51,520 --> 00:02:53,120 Speaker 3: they don't support the way they used to, but that 61 00:02:53,160 --> 00:02:54,560 Speaker 3: doesn't mean they don't support at all. 62 00:02:55,560 --> 00:02:57,440 Speaker 1: This is where this is where you're supposed to talk 63 00:02:57,480 --> 00:02:59,880 Speaker 1: about buffert ETFs. I know you're dying to do it. 64 00:03:01,120 --> 00:03:03,399 Speaker 3: Well, well, that's a good point. There there are things 65 00:03:03,400 --> 00:03:05,520 Speaker 3: out there, and that's part of the reason. So bufferdtfs 66 00:03:05,560 --> 00:03:08,880 Speaker 3: are things out there that can support a portfolio because 67 00:03:08,919 --> 00:03:11,280 Speaker 3: they put a floor underneath and they put a roof 68 00:03:11,360 --> 00:03:13,920 Speaker 3: over the top, but they rely ultimately on the returns 69 00:03:13,919 --> 00:03:16,080 Speaker 3: of the stock market. So that is a good example 70 00:03:16,160 --> 00:03:17,720 Speaker 3: of why, you know what, you might not need bonds, 71 00:03:17,760 --> 00:03:20,200 Speaker 3: but you may need something out there to offset the 72 00:03:20,280 --> 00:03:22,239 Speaker 3: ups and downs of the stock market. So you know, 73 00:03:22,680 --> 00:03:24,840 Speaker 3: for families with a lot of money, bonds aren't about 74 00:03:24,960 --> 00:03:25,880 Speaker 3: maximizing returns. 75 00:03:25,919 --> 00:03:27,280 Speaker 2: They're about maintaining control. 76 00:03:27,639 --> 00:03:29,239 Speaker 3: You might say, you know what, here, we've got a 77 00:03:29,280 --> 00:03:30,880 Speaker 3: lot of money, but now I know we have these 78 00:03:30,919 --> 00:03:33,120 Speaker 3: expenses coming up. I'm going to need this exact amount 79 00:03:33,120 --> 00:03:35,200 Speaker 3: of dollars. Maybe it's ten thousand dollars a month, twenty 80 00:03:35,240 --> 00:03:36,040 Speaker 3: thousand something like that. 81 00:03:36,440 --> 00:03:37,040 Speaker 2: Well, that's fine. 82 00:03:37,160 --> 00:03:39,720 Speaker 3: If we know that's coming due, then maybe we carve 83 00:03:39,800 --> 00:03:42,440 Speaker 3: off a few hundred thousand dollars of your multimillion dollar 84 00:03:42,560 --> 00:03:44,520 Speaker 3: portfolio and we put it in a bond ladder or 85 00:03:44,520 --> 00:03:47,040 Speaker 3: a CD ladder, and then we know for sure that 86 00:03:47,240 --> 00:03:49,040 Speaker 3: that money is coming due. It will not be at 87 00:03:49,040 --> 00:03:51,280 Speaker 3: any risk of headlines because it's in something that is 88 00:03:51,360 --> 00:03:53,600 Speaker 3: very secure and it will come due. We will shove 89 00:03:53,640 --> 00:03:55,440 Speaker 3: it into your checking account, you can go pay your bills. 90 00:03:55,640 --> 00:03:58,640 Speaker 3: That means the money that is riding the waves is 91 00:03:58,680 --> 00:04:01,360 Speaker 3: at least three years out or so from actually needing 92 00:04:01,400 --> 00:04:02,119 Speaker 3: to be tapped into. 93 00:04:03,160 --> 00:04:05,600 Speaker 1: All right, here's another little piece of advice that we 94 00:04:05,680 --> 00:04:09,160 Speaker 1: can sometimes hear about, and this is for the management 95 00:04:09,280 --> 00:04:12,720 Speaker 1: class of you know, corporate executives that have a boatload 96 00:04:12,800 --> 00:04:15,240 Speaker 1: of company stock and they'll sit around and say, I'm 97 00:04:15,320 --> 00:04:18,680 Speaker 1: keeping all of my company stock. I'm never selling any 98 00:04:19,160 --> 00:04:21,280 Speaker 1: of it. And the reason is taxes. I don't want 99 00:04:21,320 --> 00:04:25,200 Speaker 1: to pay any taxes. And the implication there is that 100 00:04:25,520 --> 00:04:29,680 Speaker 1: good sound financial planning is all about never paying taxes 101 00:04:30,080 --> 00:04:33,080 Speaker 1: at all, you know, avoiding paying taxes at all costs. 102 00:04:33,720 --> 00:04:36,159 Speaker 1: And what we would counter that is it's all about 103 00:04:36,240 --> 00:04:38,960 Speaker 1: paying the right amount of taxes at the right time, 104 00:04:39,520 --> 00:04:44,240 Speaker 1: and that usually means diversifying gradually out of that high 105 00:04:44,440 --> 00:04:50,880 Speaker 1: concentrated company stock position and getting the portfolio properly diversifying. 106 00:04:51,080 --> 00:04:54,680 Speaker 1: And this is where a strategy like direct indexing using 107 00:04:54,800 --> 00:04:58,680 Speaker 1: some tax loss harvesting strategies can really come into play 108 00:04:58,880 --> 00:05:02,760 Speaker 1: because they can really soften the blow of just paying 109 00:05:02,800 --> 00:05:05,360 Speaker 1: a bunch of capital gain taxes to do what we 110 00:05:05,480 --> 00:05:08,839 Speaker 1: all know we probably should be doing. And that's properly 111 00:05:08,960 --> 00:05:10,320 Speaker 1: diversifying a portfolio. 112 00:05:11,360 --> 00:05:11,760 Speaker 2: That's right. 113 00:05:11,880 --> 00:05:13,800 Speaker 3: So you know, and I think those are these are 114 00:05:13,839 --> 00:05:15,920 Speaker 3: important things to make sure that we're paying attention to. No, 115 00:05:16,080 --> 00:05:19,520 Speaker 3: don't don't look past and anything further away than Dirk 116 00:05:19,600 --> 00:05:21,800 Speaker 3: Yager and Procter and Gamble. In the early two thousands, 117 00:05:21,839 --> 00:05:23,960 Speaker 3: the market hated him. He had a seventeen month tenure. 118 00:05:24,000 --> 00:05:27,000 Speaker 3: The stock fell fifty percent in an otherwise strong environment. 119 00:05:27,080 --> 00:05:30,280 Speaker 2: So don't make that mistake. My CPA handles all of that. 120 00:05:30,400 --> 00:05:31,159 Speaker 2: I don't need to think. 121 00:05:31,200 --> 00:05:33,080 Speaker 3: I have a person with letters behind his name that 122 00:05:33,160 --> 00:05:34,919 Speaker 3: does all or her name, that does all this stuff 123 00:05:34,960 --> 00:05:37,520 Speaker 3: for me. CPAs are very important, but they look they 124 00:05:37,600 --> 00:05:40,200 Speaker 3: tend to look backwards. They're primarily paid. I'm talking about 125 00:05:40,200 --> 00:05:43,800 Speaker 3: the ones that work on personal financial situations. They're primarily 126 00:05:43,880 --> 00:05:46,920 Speaker 3: paid to prepare your taxes for you. Financial planning has 127 00:05:47,000 --> 00:05:47,799 Speaker 3: to look forward. 128 00:05:48,560 --> 00:05:48,800 Speaker 2: Again. 129 00:05:48,880 --> 00:05:51,640 Speaker 3: These are their complementary You really need both of them. 130 00:05:52,160 --> 00:05:55,320 Speaker 3: CPAs tend to focus have to focus on a couple 131 00:05:55,360 --> 00:05:57,560 Speaker 3: of deadlines throughout the year, you know, mostly April and 132 00:05:57,640 --> 00:05:59,640 Speaker 3: then October. That's probably eighty percent of the work that 133 00:05:59,680 --> 00:06:02,440 Speaker 3: they do because they need to get these taxes done 134 00:06:02,480 --> 00:06:04,640 Speaker 3: for individual households as well as businesses. 135 00:06:05,360 --> 00:06:06,000 Speaker 2: They don't have. 136 00:06:06,160 --> 00:06:08,640 Speaker 3: Much time in all of that to say what should 137 00:06:08,640 --> 00:06:10,320 Speaker 3: you be doing right now in this year? Should you 138 00:06:10,400 --> 00:06:13,000 Speaker 3: adjust your withholding? Should you switch from a pre tax 139 00:06:13,240 --> 00:06:15,640 Speaker 3: four to one K contribution to a row side. That's 140 00:06:15,760 --> 00:06:18,279 Speaker 3: tax planning and it takes a lot of inputs. Somebody 141 00:06:18,360 --> 00:06:20,480 Speaker 3: has to be looking not at this year, but it 142 00:06:20,560 --> 00:06:23,080 Speaker 3: had ten, fifteen, twenty years at what your situation might 143 00:06:23,120 --> 00:06:25,240 Speaker 3: look like to decide what you need to do now. 144 00:06:25,480 --> 00:06:28,640 Speaker 3: Your CPA is extremely important. I have strong relationships with 145 00:06:28,720 --> 00:06:31,280 Speaker 3: my client's CPAs, but I know that CPA does not 146 00:06:31,400 --> 00:06:33,120 Speaker 3: have the time to do the things that I feel 147 00:06:33,160 --> 00:06:35,440 Speaker 3: like need to be done with regard to planning till 148 00:06:35,440 --> 00:06:37,880 Speaker 3: we can make decisions based on something that might happen 149 00:06:38,000 --> 00:06:38,960 Speaker 3: well into the future. 150 00:06:39,839 --> 00:06:42,320 Speaker 1: Yeah, and you mentioned the operative word there, and it's time. 151 00:06:42,440 --> 00:06:46,160 Speaker 1: I mean, good solid CPAs are in short supply these 152 00:06:46,279 --> 00:06:49,920 Speaker 1: days and it's hard to find a good one. And 153 00:06:50,080 --> 00:06:53,480 Speaker 1: the good ones out there they are just swamped. They're busy, 154 00:06:53,920 --> 00:06:56,560 Speaker 1: and so to your point, Brian, they are not They're 155 00:06:56,640 --> 00:06:59,000 Speaker 1: just trying to get these tax returns prepared and out 156 00:06:59,080 --> 00:07:02,160 Speaker 1: the door. So you have to have a good relationship, 157 00:07:02,880 --> 00:07:07,279 Speaker 1: working relationship throughout the year, and the best situations I find, Brian, 158 00:07:07,320 --> 00:07:09,520 Speaker 1: and you've already alluded to this is where we are 159 00:07:09,640 --> 00:07:12,560 Speaker 1: reaching out to the CPA, we are partnering with him 160 00:07:12,720 --> 00:07:16,280 Speaker 1: or her on our client situation, and we're saying, hey, 161 00:07:16,360 --> 00:07:19,480 Speaker 1: here's some things we're looking at, some strategies we're considering. 162 00:07:20,600 --> 00:07:23,320 Speaker 1: Run this through your software and tell us if we're 163 00:07:23,440 --> 00:07:26,240 Speaker 1: on the right track or whether we want to tweak 164 00:07:26,360 --> 00:07:29,920 Speaker 1: some of these potential strategies. And that's where that partnership 165 00:07:30,000 --> 00:07:32,960 Speaker 1: can come into play. And what I find, Brian, is 166 00:07:33,480 --> 00:07:36,440 Speaker 1: if we all communicate with one another, the CPAs love 167 00:07:36,560 --> 00:07:39,440 Speaker 1: that because they all want to do the right things 168 00:07:39,520 --> 00:07:42,520 Speaker 1: for the clients and they want to they love, you know, 169 00:07:42,640 --> 00:07:45,560 Speaker 1: creating a tax efficient situation. It just comes down to 170 00:07:45,680 --> 00:07:49,720 Speaker 1: time and availability. So sometimes our role is to facilitate 171 00:07:49,880 --> 00:07:53,400 Speaker 1: that dialogue throughout the year, not just in the last 172 00:07:53,440 --> 00:07:55,080 Speaker 1: couple of weeks when we're trying to get the tax 173 00:07:55,200 --> 00:07:58,440 Speaker 1: return out the door. It's a critical part of the 174 00:07:58,520 --> 00:08:03,119 Speaker 1: financial planning process. Speaking of taxes, talk about the next one, Brian. 175 00:08:03,200 --> 00:08:06,120 Speaker 1: We occasionally have people that say, well, I'm gonna definitely 176 00:08:06,200 --> 00:08:09,160 Speaker 1: be in a lower tax bracket when I retire. That's 177 00:08:09,240 --> 00:08:10,080 Speaker 1: not always the case. 178 00:08:10,560 --> 00:08:12,880 Speaker 2: Yeah, that can be the case, but not always. 179 00:08:12,920 --> 00:08:14,640 Speaker 3: And there's definitely a point where you might be right 180 00:08:14,720 --> 00:08:17,600 Speaker 3: back where you were with regard to tax brackets. You've 181 00:08:17,640 --> 00:08:21,160 Speaker 3: got social Security coming in, investment income, rental income. 182 00:08:21,280 --> 00:08:22,680 Speaker 2: You know, maybe you're doing some consulting. 183 00:08:22,680 --> 00:08:24,320 Speaker 3: A lot of people think I'm gonna retire and I'll 184 00:08:24,320 --> 00:08:25,680 Speaker 3: be fine, and I'm gonna sit in a rocking chair 185 00:08:25,680 --> 00:08:27,160 Speaker 3: and it's gonna be wonderful because I won't have any 186 00:08:27,160 --> 00:08:30,200 Speaker 3: more meetings. Then they quickly realize that I really can't 187 00:08:30,240 --> 00:08:32,079 Speaker 3: shut off yet. My brain is not ready to not 188 00:08:32,600 --> 00:08:35,920 Speaker 3: be useful anymore, and so they may go back to 189 00:08:36,000 --> 00:08:38,640 Speaker 3: this consulting type work and the income runs right back up, 190 00:08:38,840 --> 00:08:40,800 Speaker 3: and maybe some decision you made four or five years 191 00:08:40,800 --> 00:08:42,760 Speaker 3: ago now doesn't make sense because you're not in the 192 00:08:42,840 --> 00:08:44,760 Speaker 3: lower tax bracket that you thought you were going to be. 193 00:08:45,240 --> 00:08:47,680 Speaker 3: And I'll throw this out there, there is a whopper 194 00:08:47,760 --> 00:08:50,599 Speaker 3: coming for anybody who has worked for a you know, 195 00:08:50,679 --> 00:08:53,080 Speaker 3: a corporation that where they put money into a pre 196 00:08:53,200 --> 00:08:54,839 Speaker 3: tax four oh one K or a four or three 197 00:08:54,880 --> 00:08:56,559 Speaker 3: B or something like that, which is most of the 198 00:08:56,640 --> 00:09:01,040 Speaker 3: working population that's required minimum distribution. When you are age 199 00:09:01,080 --> 00:09:03,720 Speaker 3: seventy three or seventy five, depending on when you were born, 200 00:09:04,280 --> 00:09:06,320 Speaker 3: you're gonna have to start taking money out of those. 201 00:09:06,200 --> 00:09:08,440 Speaker 2: Pre tax iras and four oh one k's and such. 202 00:09:08,679 --> 00:09:10,760 Speaker 3: You're gonna have to pay income taxes on it on 203 00:09:10,960 --> 00:09:13,559 Speaker 3: top of whatever you already have happening in your situation 204 00:09:13,760 --> 00:09:16,320 Speaker 3: income wise. So you may find yourself in a situation 205 00:09:16,400 --> 00:09:19,880 Speaker 3: if there's a significant amount out there that you're in 206 00:09:19,960 --> 00:09:22,079 Speaker 3: the same bracket that you had been out of. You 207 00:09:22,200 --> 00:09:24,360 Speaker 3: left it maybe for ten years after you retired, but 208 00:09:24,440 --> 00:09:27,240 Speaker 3: now you're right back there. Because another thing that happens 209 00:09:27,280 --> 00:09:28,920 Speaker 3: here too is this is the time that we tend 210 00:09:28,960 --> 00:09:31,560 Speaker 3: to inherit our own parents pre tax iras, and there 211 00:09:31,600 --> 00:09:34,640 Speaker 3: are income requirements off of those. So just make sure 212 00:09:34,679 --> 00:09:36,839 Speaker 3: that you haven't made every decision off the assumption that 213 00:09:36,880 --> 00:09:39,920 Speaker 3: taxes are going to be low forever after retirement, because 214 00:09:39,960 --> 00:09:40,280 Speaker 3: they're not. 215 00:09:40,720 --> 00:09:41,959 Speaker 2: This is why we have jobs. 216 00:09:42,240 --> 00:09:46,559 Speaker 3: So another assumption here. Let's move on here, Bob to 217 00:09:47,200 --> 00:09:48,720 Speaker 3: my kids are gonna deal with it for me, right, 218 00:09:48,760 --> 00:09:49,520 Speaker 3: I don't even think about this. 219 00:09:49,600 --> 00:09:51,400 Speaker 2: My kids will sort it out. Tell me about that. 220 00:09:51,520 --> 00:09:54,800 Speaker 1: Yeah, well, we see this all too often, and I'm 221 00:09:54,920 --> 00:09:58,360 Speaker 1: just sharing my opinion. Here, it's our clients money. It's 222 00:09:58,400 --> 00:10:01,040 Speaker 1: not our clients. But I sometimes I sit back in 223 00:10:01,160 --> 00:10:04,680 Speaker 1: amazement when people come in and they've worked their tails 224 00:10:04,760 --> 00:10:07,959 Speaker 1: off for decades to build a healthy networth three four, five, 225 00:10:08,080 --> 00:10:11,880 Speaker 1: ten million dollars, and yeah, yeah, the plan is healthy. 226 00:10:11,960 --> 00:10:13,839 Speaker 1: It's going to take care of mom and dad throughout 227 00:10:13,880 --> 00:10:18,719 Speaker 1: their retirement. But there's been zero discussion, no planning, no 228 00:10:18,960 --> 00:10:23,280 Speaker 1: passing down of values, no guardrails, no expectations set on 229 00:10:23,360 --> 00:10:27,240 Speaker 1: the kids. They literally say, make sure the beneficiaries are updated. 230 00:10:27,440 --> 00:10:30,600 Speaker 1: We got no problem just dumping, you know, three million 231 00:10:30,679 --> 00:10:33,480 Speaker 1: dollars on our kid that's never even built a financial 232 00:10:33,520 --> 00:10:37,480 Speaker 1: plan on their own. I mean, it doesn't matter what 233 00:10:37,600 --> 00:10:41,079 Speaker 1: I think. I'm just saying I'm surprised at the attitude 234 00:10:41,120 --> 00:10:44,640 Speaker 1: that some people have about that, because you're taking decades 235 00:10:44,760 --> 00:10:49,000 Speaker 1: upon decades of work, and you know, with a little 236 00:10:49,040 --> 00:10:52,880 Speaker 1: bit of discussion and pre planning and education, you might 237 00:10:52,960 --> 00:10:55,880 Speaker 1: actually be able to help your kids and grandkids really 238 00:10:56,120 --> 00:11:00,400 Speaker 1: leverage those dollars that you're leaving to them, rather than 239 00:11:00,440 --> 00:11:03,640 Speaker 1: seeing them melt away quickly because no one ever taught 240 00:11:03,679 --> 00:11:07,040 Speaker 1: them how to handle money. Do you find similar situations? 241 00:11:07,240 --> 00:11:09,120 Speaker 3: Yeah, I mean I think there's an assumption that if 242 00:11:09,160 --> 00:11:11,040 Speaker 3: I just work my tail off and this is working, 243 00:11:11,120 --> 00:11:12,920 Speaker 3: so I'm just gonna keep building this giant pile of 244 00:11:12,960 --> 00:11:15,080 Speaker 3: money in this business and I'll give it to my kids, 245 00:11:15,160 --> 00:11:16,800 Speaker 3: and that's all they need to have as a giant 246 00:11:16,800 --> 00:11:18,480 Speaker 3: pile of money, and I will have done my duty. 247 00:11:18,760 --> 00:11:18,920 Speaker 2: Well. 248 00:11:19,000 --> 00:11:22,199 Speaker 3: If those kids never understood why you were gone a lot, 249 00:11:22,320 --> 00:11:24,640 Speaker 3: why you worked so hard, why what it took to 250 00:11:24,720 --> 00:11:26,280 Speaker 3: build what you built, then they are not Then you 251 00:11:26,360 --> 00:11:27,520 Speaker 3: haven't done them any favors. 252 00:11:27,679 --> 00:11:29,040 Speaker 2: They may be perfectly good people. 253 00:11:29,080 --> 00:11:30,839 Speaker 3: This doesn't indicate that they're bad people, but they have 254 00:11:30,960 --> 00:11:33,199 Speaker 3: no idea what those guardrails are. They don't know and 255 00:11:33,360 --> 00:11:36,600 Speaker 3: understand the sacrifices that you made. If you never talk 256 00:11:36,679 --> 00:11:38,719 Speaker 3: to them about what you were building, why you made 257 00:11:38,760 --> 00:11:39,960 Speaker 3: the decisions that you made, and what. 258 00:11:40,040 --> 00:11:41,400 Speaker 2: You did, then they're gonna come. 259 00:11:41,600 --> 00:11:43,840 Speaker 3: If they take over that business, maybe they're not gonna 260 00:11:43,840 --> 00:11:46,360 Speaker 3: have that same sense of duty that you did. And 261 00:11:46,440 --> 00:11:48,520 Speaker 3: if they have no idea where you went all day, 262 00:11:48,600 --> 00:11:50,040 Speaker 3: and if you never talk to them about what you 263 00:11:50,160 --> 00:11:53,319 Speaker 3: did for a living, they will have spent decades growing 264 00:11:53,440 --> 00:11:55,720 Speaker 3: up thinking that mom or dad does something that's boring 265 00:11:55,800 --> 00:11:57,400 Speaker 3: and has no interest in talking about I don't want 266 00:11:57,440 --> 00:11:59,440 Speaker 3: anything to do with it, so they've got no connection 267 00:11:59,559 --> 00:12:01,120 Speaker 3: to it other than it's a pile of money. 268 00:12:01,400 --> 00:12:04,319 Speaker 2: So sit down, have honest conversations with your children. 269 00:12:04,080 --> 00:12:06,079 Speaker 3: About why they live, they get to live the way 270 00:12:06,080 --> 00:12:08,360 Speaker 3: they do, and how you built it, what sacrifices that 271 00:12:08,440 --> 00:12:11,120 Speaker 3: you made in exchange for the benefits that the family got. 272 00:12:11,200 --> 00:12:12,880 Speaker 2: Make sure they understand at least a little bit of that. 273 00:12:13,920 --> 00:12:17,080 Speaker 1: All Right, here's the Allworth Advice super Bowl party advice 274 00:12:17,200 --> 00:12:20,640 Speaker 1: can be fun, but don't let it call the plays 275 00:12:20,880 --> 00:12:24,760 Speaker 1: in your personal financial plan. Speaking of the super Bowl 276 00:12:25,000 --> 00:12:28,120 Speaker 1: and in say financial advice, why you might want to 277 00:12:28,240 --> 00:12:31,679 Speaker 1: cheer for the Seahawks. Talk about that. Next. You're listening 278 00:12:31,760 --> 00:12:34,080 Speaker 1: to Simply Money, presented by all Worth Financial on fifty 279 00:12:34,120 --> 00:12:42,120 Speaker 1: five KRC, the talk station. You're listening to Simply Money 280 00:12:42,200 --> 00:12:45,120 Speaker 1: presented by Allworth Financial on Bob Sponsller along with Brian 281 00:12:45,280 --> 00:12:50,200 Speaker 1: James Rough Conversions and Hair died Iras and your Retirement 282 00:12:50,280 --> 00:12:53,520 Speaker 1: Income Strategy. We're going to tackle all those questions from 283 00:12:53,600 --> 00:12:56,320 Speaker 1: listeners who want to make the most out of their money. 284 00:12:56,720 --> 00:13:00,679 Speaker 1: Although that's coming up at six forty three. All right, 285 00:13:00,760 --> 00:13:02,959 Speaker 1: tax season is underway, and if you're counting on a 286 00:13:03,040 --> 00:13:06,000 Speaker 1: refund this year. Here's what you need to know. Some 287 00:13:06,320 --> 00:13:10,160 Speaker 1: refunds may take longer than expected to be received. What 288 00:13:10,480 --> 00:13:12,160 Speaker 1: is going on here, Brian. 289 00:13:12,200 --> 00:13:13,760 Speaker 3: Well, for those of you who are happy to hear 290 00:13:13,840 --> 00:13:17,199 Speaker 3: the recent headlines that this administration forced a lot of 291 00:13:17,320 --> 00:13:20,480 Speaker 3: staffing cuts and expense cuts within the IRS, well that's 292 00:13:20,520 --> 00:13:22,199 Speaker 3: going to come through this year in the form of 293 00:13:22,440 --> 00:13:25,320 Speaker 3: delayed return So the IRS now has fewer people processing 294 00:13:25,400 --> 00:13:27,960 Speaker 3: returns do to all those cuts and answering phones. If 295 00:13:28,000 --> 00:13:30,600 Speaker 3: your return does need that extra review because maybe there's 296 00:13:30,600 --> 00:13:32,880 Speaker 3: a number of something doesn't match the ten ninety nine 297 00:13:33,080 --> 00:13:35,800 Speaker 3: or whatever, or a new credit, or you're just missing information, 298 00:13:35,840 --> 00:13:37,160 Speaker 3: well it's going to go into a queue and it's 299 00:13:37,160 --> 00:13:38,800 Speaker 3: going to sit a little bit longer than normal. Now 300 00:13:38,800 --> 00:13:40,319 Speaker 3: I will say I did have a conversation with the 301 00:13:40,360 --> 00:13:42,600 Speaker 3: IRS to help a client answer question. I've never found 302 00:13:42,600 --> 00:13:44,560 Speaker 3: them to be bad people to talk to. I found 303 00:13:44,559 --> 00:13:46,280 Speaker 3: them to be very helpful, and we weren't on hold 304 00:13:46,320 --> 00:13:47,199 Speaker 3: at all with They picked. 305 00:13:47,080 --> 00:13:47,560 Speaker 2: Up right away. 306 00:13:47,600 --> 00:13:50,920 Speaker 3: Now this was before tax season, so anyway, a little 307 00:13:50,920 --> 00:13:52,600 Speaker 3: shout out for anybody who works with the IRS. 308 00:13:52,679 --> 00:13:53,640 Speaker 2: It's not all bad there. 309 00:13:54,160 --> 00:13:58,000 Speaker 1: But second, one more reason to adjusture with holdings. You 310 00:13:58,120 --> 00:14:01,880 Speaker 1: talked about this earlier this week, so that the irs 311 00:14:01,960 --> 00:14:05,480 Speaker 1: doesn't owe you money, you owe them money. You want 312 00:14:05,480 --> 00:14:06,439 Speaker 1: to be on that part of it. 313 00:14:06,559 --> 00:14:08,559 Speaker 3: You want to be on that if you really want 314 00:14:08,600 --> 00:14:10,880 Speaker 3: to play, Yeah, adjuster withholding, so you owe them a 315 00:14:10,920 --> 00:14:12,840 Speaker 3: little bit of money and then file an extension as 316 00:14:12,880 --> 00:14:14,680 Speaker 3: soon as you can and ignore the whole thing until 317 00:14:14,720 --> 00:14:17,880 Speaker 3: October if it's a simple situation. So, but there's also 318 00:14:18,000 --> 00:14:20,600 Speaker 3: we're moving away from paper refund checks, so they do 319 00:14:20,720 --> 00:14:22,320 Speaker 3: want refunds going out by direct deposits. 320 00:14:22,320 --> 00:14:23,040 Speaker 2: I'm a big fan of this. 321 00:14:23,160 --> 00:14:25,480 Speaker 3: I hate paper anymore. Paper is more risky than anything else. 322 00:14:25,720 --> 00:14:29,000 Speaker 3: Electronic money movement has time stamps and breadcrumbs and all. 323 00:14:29,000 --> 00:14:29,520 Speaker 2: Kinds of stuff. 324 00:14:29,680 --> 00:14:32,960 Speaker 3: Papers paper, So if your bank information is wrong or outdated, 325 00:14:33,040 --> 00:14:34,680 Speaker 3: or that account is closed, well that's going to slow 326 00:14:34,720 --> 00:14:36,520 Speaker 3: things down significantly because you're gonna have to find a 327 00:14:36,640 --> 00:14:39,280 Speaker 3: human being and you have to fix this with paper. 328 00:14:39,320 --> 00:14:41,800 Speaker 3: Amended returns often to have to be filed with paper 329 00:14:42,480 --> 00:14:44,880 Speaker 3: this time around, so some of them bear in mind. 330 00:14:46,320 --> 00:14:48,880 Speaker 1: Talk about the new tax rules and credits this year, 331 00:14:49,160 --> 00:14:49,600 Speaker 1: Oh of course. 332 00:14:49,680 --> 00:14:52,800 Speaker 3: Yeah, So anytime you know, Congress adds new deductions or credits, 333 00:14:52,880 --> 00:14:56,120 Speaker 3: then Obviously that's new opportunities for fraud. People are going 334 00:14:56,200 --> 00:14:58,520 Speaker 3: to find loopholes in all these new rules, and so 335 00:14:58,640 --> 00:15:00,600 Speaker 3: the IRS has to put extra filter in place to 336 00:15:00,640 --> 00:15:02,520 Speaker 3: look for this. So that means more returns are going 337 00:15:02,600 --> 00:15:05,880 Speaker 3: to get flagged for manual review for new reasons. Right, 338 00:15:05,960 --> 00:15:08,000 Speaker 3: that's the big thing. So all these reviewers may have 339 00:15:08,080 --> 00:15:09,440 Speaker 3: been you know, they may have been reviewing for a 340 00:15:09,480 --> 00:15:11,080 Speaker 3: long time. They know what they're doing, but they have 341 00:15:11,240 --> 00:15:13,000 Speaker 3: new things to look at, and there's gonna be questions. 342 00:15:13,080 --> 00:15:15,400 Speaker 3: Even when nothing is wrong, it's still going to get 343 00:15:15,400 --> 00:15:18,040 Speaker 3: flagged for that review and it'll get through eventually, but 344 00:15:18,120 --> 00:15:19,400 Speaker 3: they're going to have to figure it out. 345 00:15:19,600 --> 00:15:21,240 Speaker 2: So this is a bigger deal for higher. 346 00:15:21,080 --> 00:15:25,320 Speaker 3: Income households because obviously there's more complicated returns investment income, 347 00:15:25,520 --> 00:15:27,720 Speaker 3: business income, which a lot of times it's just that 348 00:15:27,840 --> 00:15:31,120 Speaker 3: those are just stated income types of situations, stock sales, 349 00:15:31,200 --> 00:15:34,720 Speaker 3: complex deductions. You know, your your return is already getting 350 00:15:34,760 --> 00:15:37,880 Speaker 3: more scrutiny because there is so much flexibility in what 351 00:15:38,120 --> 00:15:40,720 Speaker 3: is considered a deduction for a business than there is 352 00:15:40,840 --> 00:15:43,800 Speaker 3: for a for a household or a personal individual income. 353 00:15:44,280 --> 00:15:45,840 Speaker 3: Then now we're gonna layer that was always true. Now 354 00:15:45,840 --> 00:15:47,600 Speaker 3: we're gonna layer new rules on top of that, and 355 00:15:47,640 --> 00:15:50,040 Speaker 3: all of a sudden, precision becomes much more critical. 356 00:15:50,360 --> 00:15:52,320 Speaker 2: Be meticulous, but also dump it in. 357 00:15:52,360 --> 00:15:55,320 Speaker 3: Somebody else's lap, have a preparer to do it professionally, 358 00:15:55,400 --> 00:15:57,120 Speaker 3: and do it earlier than you normally would. 359 00:15:58,200 --> 00:16:00,320 Speaker 1: All right, on a much lighter top end. Have you 360 00:16:00,360 --> 00:16:02,600 Speaker 1: ever heard of the Super Bowl Indicator. It's one of 361 00:16:02,640 --> 00:16:06,400 Speaker 1: those fun pieces of market folklore that comes out every 362 00:16:06,520 --> 00:16:09,960 Speaker 1: February right before the Super Bowl. The basic idea is this, 363 00:16:10,240 --> 00:16:13,160 Speaker 1: if the NFC team wins, the stock market will finish 364 00:16:13,280 --> 00:16:16,440 Speaker 1: higher for the year, but if the AFC team wins, 365 00:16:16,560 --> 00:16:19,520 Speaker 1: the market will finish lower. I can tell you right 366 00:16:19,560 --> 00:16:22,920 Speaker 1: now our executive producer, Joe Strucker is already well aware 367 00:16:23,080 --> 00:16:26,600 Speaker 1: of this phenomenon, and for that reason and others that 368 00:16:26,760 --> 00:16:29,600 Speaker 1: have maybe more to do with football, he has already 369 00:16:29,680 --> 00:16:32,880 Speaker 1: disclosed he's got a sizeable bet on the Seattle Seahawks, 370 00:16:32,960 --> 00:16:36,200 Speaker 1: So you know, I know which side he's on. But 371 00:16:36,800 --> 00:16:41,120 Speaker 1: let's talk about this, the data behind this Super Bowl indicator. 372 00:16:41,200 --> 00:16:44,320 Speaker 3: Brian, Well, the most important indicator of all this is 373 00:16:44,360 --> 00:16:46,400 Speaker 3: that is that one Joe Strucker has a two digit 374 00:16:46,520 --> 00:16:49,400 Speaker 3: bet on the Seahawks and they are in the NFC, 375 00:16:49,560 --> 00:16:50,080 Speaker 3: and that's good. 376 00:16:50,200 --> 00:16:50,880 Speaker 2: Joe is bullish. 377 00:16:50,960 --> 00:16:52,800 Speaker 3: So the whole idea behind what we're talking about now, 378 00:16:53,000 --> 00:16:55,480 Speaker 3: if the NFC team wins, the stock market's going to 379 00:16:55,520 --> 00:16:57,880 Speaker 3: finish the year higher, but if the AFC team. 380 00:16:57,800 --> 00:16:59,240 Speaker 2: Wins, the market finishes lower. 381 00:16:59,280 --> 00:17:01,040 Speaker 3: So we want to shout out to the Bengals for 382 00:17:01,120 --> 00:17:03,440 Speaker 3: losing all three of their Super Bowls, you know, and 383 00:17:03,520 --> 00:17:04,600 Speaker 3: helping us out in those years. 384 00:17:05,359 --> 00:17:06,680 Speaker 2: And now this is a stupid theory. 385 00:17:06,760 --> 00:17:09,080 Speaker 3: We're we're just pulling out two things that happen in 386 00:17:09,200 --> 00:17:11,080 Speaker 3: history and slapping together how they might be. 387 00:17:11,119 --> 00:17:12,000 Speaker 2: Related to each other. 388 00:17:12,640 --> 00:17:15,040 Speaker 3: But in any case, throughout the seventies and the eighties, 389 00:17:15,119 --> 00:17:17,960 Speaker 3: it coincided with market direction more often than not, so 390 00:17:18,000 --> 00:17:21,720 Speaker 3: it didn't mean anything. Since the two thousands, a little 391 00:17:21,760 --> 00:17:23,720 Speaker 3: bit better than a coin flip. In the twenty years 392 00:17:23,760 --> 00:17:26,520 Speaker 3: from four to twenty three, it's only been right about 393 00:17:26,560 --> 00:17:28,399 Speaker 3: fifty percent of the time, which is, you know, literally 394 00:17:28,440 --> 00:17:29,080 Speaker 3: a coin flip. 395 00:17:29,160 --> 00:17:29,960 Speaker 2: So there's no body. 396 00:17:31,400 --> 00:17:31,760 Speaker 1: Ignore it. 397 00:17:31,800 --> 00:17:34,520 Speaker 2: A stupid things to talk about on a Friday, All right. 398 00:17:34,560 --> 00:17:37,119 Speaker 1: Every Sunday you'll find our all Worth advice in the 399 00:17:37,200 --> 00:17:40,480 Speaker 1: Cincinnati Inquiry. And here's a preview of what you'll see 400 00:17:40,560 --> 00:17:44,159 Speaker 1: in the Sunday Paper. Jim in Loveland says, we have 401 00:17:44,240 --> 00:17:47,360 Speaker 1: a decent sized amount of savings and investments. But I've 402 00:17:47,400 --> 00:17:50,840 Speaker 1: heard that big retirement accounts can cause tax problems later. 403 00:17:51,440 --> 00:17:54,000 Speaker 1: What can we be doing now to avoid that? 404 00:17:54,160 --> 00:17:56,320 Speaker 2: Brian gamble it on the Super Bowl. 405 00:17:56,440 --> 00:18:00,720 Speaker 3: Jim followed Joe's lead and place giant bets on the Seahawks, 406 00:18:00,800 --> 00:18:01,680 Speaker 3: push market higher. 407 00:18:02,720 --> 00:18:05,520 Speaker 1: Pay pre fifty nine penalty taxes to do it. 408 00:18:05,760 --> 00:18:07,399 Speaker 2: There you go. That's right, Yeah, it's worth it. Right, 409 00:18:07,960 --> 00:18:09,520 Speaker 2: You got to break some eggs and make an omelet. 410 00:18:11,040 --> 00:18:12,680 Speaker 2: So all right, all serious. 411 00:18:12,720 --> 00:18:15,080 Speaker 3: Let's answer Jim's question here, which will also show up 412 00:18:15,480 --> 00:18:17,400 Speaker 3: in a couple of days in the enquire But big 413 00:18:17,480 --> 00:18:19,320 Speaker 3: retirements can cause tax problems later. 414 00:18:19,400 --> 00:18:20,320 Speaker 2: Yeah, that's a little true. 415 00:18:21,119 --> 00:18:23,879 Speaker 3: But basically what he's referring to here is required minimum 416 00:18:23,920 --> 00:18:27,040 Speaker 3: distributions if you have a sizeable account. Some people retire 417 00:18:27,080 --> 00:18:29,360 Speaker 3: with two million, three million, sometimes five million or even 418 00:18:29,400 --> 00:18:32,480 Speaker 3: more in their retire in their four to one k's iras, 419 00:18:32,880 --> 00:18:35,680 Speaker 3: and when they reach age seventy three seventy five, remember 420 00:18:35,720 --> 00:18:36,760 Speaker 3: there's usually a gap there. 421 00:18:37,040 --> 00:18:37,600 Speaker 2: Somebody like that. 422 00:18:37,640 --> 00:18:39,880 Speaker 3: Probably is going to retire in their early mid sixties, 423 00:18:40,240 --> 00:18:42,919 Speaker 3: possibly even earlier, and those dollars are going to continue 424 00:18:42,960 --> 00:18:46,439 Speaker 3: to grow, so these can be huge accounts. Required minimum 425 00:18:46,480 --> 00:18:49,720 Speaker 3: distributions kick in as mentioned earlier about seventy three or 426 00:18:49,760 --> 00:18:52,280 Speaker 3: age seventy five, depending on your year of birth currently, 427 00:18:53,160 --> 00:18:55,760 Speaker 3: and you need to take out something like four to 428 00:18:55,920 --> 00:18:59,080 Speaker 3: five percent of whatever the prior year end amount was 429 00:18:59,600 --> 00:19:02,399 Speaker 3: value for that whole account. So obviously, if I've got 430 00:19:02,440 --> 00:19:04,639 Speaker 3: a five million dollar four oh one k then and 431 00:19:04,760 --> 00:19:06,880 Speaker 3: I've reached that RMD stage, that means I've got two 432 00:19:06,960 --> 00:19:09,959 Speaker 3: hundred and fifty thousand dollars worth of taxable income before 433 00:19:10,000 --> 00:19:12,040 Speaker 3: i get out of bed on New Year's Day. That's 434 00:19:12,080 --> 00:19:15,040 Speaker 3: the tax problem we're referring to. So the solution here 435 00:19:15,119 --> 00:19:17,720 Speaker 3: is take advantage of those years between when you retire 436 00:19:17,800 --> 00:19:20,840 Speaker 3: and that big salary goes away, but before you are 437 00:19:20,920 --> 00:19:24,680 Speaker 3: taking income like Social Security or these rmds themselves. That's 438 00:19:24,720 --> 00:19:26,880 Speaker 3: the lowest bracket you'll see for the rest of your life. 439 00:19:26,920 --> 00:19:30,440 Speaker 3: Probably don't spike the football and just be happy that 440 00:19:30,520 --> 00:19:32,760 Speaker 3: you're in a low bracket, or even a zero bracket. 441 00:19:32,960 --> 00:19:35,440 Speaker 3: A zero bracket is a missed opportunity. You should be 442 00:19:35,560 --> 00:19:39,160 Speaker 3: using those lower brackets to convert to roth IRA. Find 443 00:19:39,160 --> 00:19:41,840 Speaker 3: a financial professional fiduciary advisor who will help you do 444 00:19:41,920 --> 00:19:43,879 Speaker 3: the math and figure out what the right amount is. 445 00:19:43,960 --> 00:19:46,040 Speaker 3: There is no right amount, there's a comfortable amount. 446 00:19:46,080 --> 00:19:48,920 Speaker 1: Figure out what that is for you. Coming up next, 447 00:19:49,040 --> 00:19:53,000 Speaker 1: how to navigate career decisions as a couple, especially when 448 00:19:53,119 --> 00:19:57,040 Speaker 1: one spouse might be earning significantly more than the other spouse. 449 00:19:57,440 --> 00:19:59,399 Speaker 1: You're listening to Simply Money. Present up at all Worth 450 00:19:59,440 --> 00:20:07,520 Speaker 1: Financial on fifty five KRC, the talk station. You're listening 451 00:20:07,600 --> 00:20:09,760 Speaker 1: to Simply Money. You said about all Worth Financial on 452 00:20:09,840 --> 00:20:13,080 Speaker 1: Bob's con Seller along with Brian James. Joined tonight by 453 00:20:13,280 --> 00:20:16,720 Speaker 1: Julie Bauki or Infamous Julie on the Job. You want 454 00:20:16,760 --> 00:20:20,959 Speaker 1: to talk about treating your career as a family business. 455 00:20:21,160 --> 00:20:22,159 Speaker 1: I love this topic. 456 00:20:22,480 --> 00:20:24,399 Speaker 4: You know. One of the things that I think has 457 00:20:24,560 --> 00:20:28,920 Speaker 4: really changed over the last five plus years is that 458 00:20:29,320 --> 00:20:32,920 Speaker 4: because of technology, there really never is depending on the 459 00:20:33,000 --> 00:20:36,040 Speaker 4: job you're in, but there really never is an end 460 00:20:36,240 --> 00:20:40,400 Speaker 4: of your work day because you can be contacted at 461 00:20:40,520 --> 00:20:44,879 Speaker 4: any time and whether or not you respond. There's something 462 00:20:44,960 --> 00:20:49,200 Speaker 4: about getting that black message, getting that text. And so 463 00:20:49,440 --> 00:20:53,320 Speaker 4: before technology really ruled our lives, including our work lives, 464 00:20:53,760 --> 00:20:56,639 Speaker 4: you had the ability maybe you'd come home and I 465 00:20:56,720 --> 00:20:59,360 Speaker 4: Remember my dad had blueprints out, you know, at nighttime 466 00:20:59,359 --> 00:21:03,439 Speaker 4: after dinner, working, But it was it was you really had. 467 00:21:03,480 --> 00:21:06,520 Speaker 4: That was a choice. And we're in a world now 468 00:21:06,560 --> 00:21:09,800 Speaker 4: where it feels like twenty four to seven, and so 469 00:21:09,960 --> 00:21:14,360 Speaker 4: the impact on your family, the impact on everything else 470 00:21:14,440 --> 00:21:17,040 Speaker 4: in your life, that ripple effect can get out of 471 00:21:17,160 --> 00:21:19,840 Speaker 4: control and you can get out of whack to the 472 00:21:19,920 --> 00:21:23,320 Speaker 4: point that not only are you damaging your health, which 473 00:21:23,320 --> 00:21:25,359 Speaker 4: you're also damaging those key relationships. 474 00:21:26,040 --> 00:21:28,800 Speaker 2: Hey, Julie, that actually hits pretty close to home for me. 475 00:21:28,920 --> 00:21:31,000 Speaker 3: About a couple of decades ago, I did have my 476 00:21:31,119 --> 00:21:34,760 Speaker 3: own financial planning practice, basically running it out of the house, 477 00:21:34,800 --> 00:21:37,320 Speaker 3: and you just described me. I was a worse husband 478 00:21:37,400 --> 00:21:39,680 Speaker 3: and a worse father for that experience because I could 479 00:21:39,760 --> 00:21:41,840 Speaker 3: not turn it off. I could not come out of 480 00:21:41,840 --> 00:21:43,639 Speaker 3: the office because I always felt like there was something, 481 00:21:43,880 --> 00:21:45,639 Speaker 3: you know, anything can blow up. I could lose this 482 00:21:45,720 --> 00:21:47,440 Speaker 3: one client at that moment, and then that was that 483 00:21:47,600 --> 00:21:50,840 Speaker 3: that stuff would ruin dinner. So, if you're somebody who 484 00:21:50,920 --> 00:21:53,680 Speaker 3: finds themselves in that situation, how have you helped people 485 00:21:54,359 --> 00:21:56,600 Speaker 3: avoid making that decision in the first place because it's 486 00:21:56,640 --> 00:21:58,480 Speaker 3: not the right fit or if that's where they were 487 00:21:58,840 --> 00:21:59,879 Speaker 3: how do you help them get out of it? 488 00:22:00,640 --> 00:22:03,320 Speaker 4: You know, so often I've got across from men, and 489 00:22:03,400 --> 00:22:07,879 Speaker 4: it's usually men who either they lose their job, they're retiring, 490 00:22:08,160 --> 00:22:11,680 Speaker 4: and they have they're hanging on to their job because 491 00:22:11,680 --> 00:22:14,600 Speaker 4: they have no relationship with their kids or their spouse. 492 00:22:15,440 --> 00:22:18,000 Speaker 4: Because when we put all of our best energy and 493 00:22:18,080 --> 00:22:22,440 Speaker 4: focus into work, then we are sending a clear signal 494 00:22:22,960 --> 00:22:25,760 Speaker 4: to the other portions of our lives, of our life 495 00:22:25,840 --> 00:22:29,000 Speaker 4: that that work is what matters. And then it's really 496 00:22:29,160 --> 00:22:32,879 Speaker 4: unrealistic to say, okay, well I'm retired now, now, okay, 497 00:22:33,119 --> 00:22:36,040 Speaker 4: now everybody love me. Doesn't work that way, And so 498 00:22:36,160 --> 00:22:38,240 Speaker 4: I think what I will say to people is, depending 499 00:22:38,240 --> 00:22:41,320 Speaker 4: on how old you are, let's look ahead a period 500 00:22:41,359 --> 00:22:44,159 Speaker 4: of time that makes sense for you. Is it five years, 501 00:22:44,520 --> 00:22:47,919 Speaker 4: is it ten years that you know the kids are 502 00:22:47,960 --> 00:22:49,200 Speaker 4: going to be out of the house, and all of 503 00:22:49,280 --> 00:22:52,119 Speaker 4: a sudden, you're home with a spouse or a partner 504 00:22:53,000 --> 00:22:56,200 Speaker 4: and you don't know each other. The kids are gone, 505 00:22:56,280 --> 00:22:58,280 Speaker 4: they went away to college, they've moved on, they come 506 00:22:58,359 --> 00:23:00,400 Speaker 4: back home. You don't have anything to talk I'm about. 507 00:23:00,400 --> 00:23:02,720 Speaker 4: So I always say you have to take yourself out 508 00:23:02,800 --> 00:23:06,160 Speaker 4: of the moment and look ahead. Five ten years whatever 509 00:23:06,240 --> 00:23:08,480 Speaker 4: makes sense, and say what do I want my life 510 00:23:08,520 --> 00:23:12,080 Speaker 4: to look like them? And then step back and say 511 00:23:12,200 --> 00:23:15,600 Speaker 4: what am I doing now to make sure that to 512 00:23:15,680 --> 00:23:18,520 Speaker 4: make sure that I'm building towards that. And you know, 513 00:23:18,920 --> 00:23:21,800 Speaker 4: it's of course it's generational. I look at my parents, 514 00:23:21,840 --> 00:23:25,439 Speaker 4: you know, greatest generation, and it was very clear lines 515 00:23:25,520 --> 00:23:28,960 Speaker 4: at work and home, and my mom was at home, 516 00:23:29,080 --> 00:23:31,800 Speaker 4: my dad was working. But there was a price to 517 00:23:31,880 --> 00:23:36,080 Speaker 4: pay for that after he retired in terms of relationships. 518 00:23:36,560 --> 00:23:38,800 Speaker 4: But now we've got gen z on the other end. 519 00:23:39,000 --> 00:23:40,840 Speaker 4: You know, I want to be a good partner, a 520 00:23:40,920 --> 00:23:44,359 Speaker 4: good spouse, a good community member. And so the newer 521 00:23:44,480 --> 00:23:48,960 Speaker 4: generations are really are really embracing that idea that life 522 00:23:49,080 --> 00:23:52,920 Speaker 4: is not all about work and I'm not going to 523 00:23:53,000 --> 00:23:55,200 Speaker 4: wait until I'm sixty some years old to start doing 524 00:23:55,280 --> 00:23:58,600 Speaker 4: other things. And so they're really starting to lean into that, 525 00:23:58,680 --> 00:24:02,080 Speaker 4: which is quite confounded and to the older generations who 526 00:24:02,119 --> 00:24:03,680 Speaker 4: still in some ways operate that way. 527 00:24:05,280 --> 00:24:07,760 Speaker 1: Hey, Julie, speaking of the folks that are in their 528 00:24:07,840 --> 00:24:11,880 Speaker 1: twenties and thirties starting to have families and have growing careers, 529 00:24:11,960 --> 00:24:14,000 Speaker 1: I mean, you know, you want to talk about parents 530 00:24:14,119 --> 00:24:17,199 Speaker 1: that are burning the candle literally at both ends. I mean, 531 00:24:17,400 --> 00:24:19,600 Speaker 1: we're in a day and age now where most of 532 00:24:19,600 --> 00:24:24,560 Speaker 1: the time both spouses are working, we're sharing caregiving responsibilities, 533 00:24:24,600 --> 00:24:27,560 Speaker 1: we're managing careers, we're managing the growth and raising of 534 00:24:27,600 --> 00:24:30,840 Speaker 1: our kids. Talk about some coaching that you've given to 535 00:24:31,000 --> 00:24:33,560 Speaker 1: young families on the things that you should probably sit 536 00:24:33,680 --> 00:24:35,960 Speaker 1: down and talk about. I mean, you mentioned a five 537 00:24:36,040 --> 00:24:38,720 Speaker 1: to ten year timeframe. I think a lot of folks 538 00:24:39,160 --> 00:24:41,720 Speaker 1: in their twenties and thirties can't think past the next 539 00:24:41,800 --> 00:24:44,200 Speaker 1: six months to a year and a half, the less 540 00:24:44,280 --> 00:24:47,680 Speaker 1: ten years. How do you coach people to just make 541 00:24:47,800 --> 00:24:50,800 Speaker 1: sure that you're on the same page in any given 542 00:24:50,880 --> 00:24:54,000 Speaker 1: time as a family, so that some of this regret 543 00:24:54,160 --> 00:24:56,680 Speaker 1: doesn't creep in, you know, as you mentioned twenty or 544 00:24:56,720 --> 00:24:57,760 Speaker 1: thirty years down the road. 545 00:24:58,160 --> 00:25:00,159 Speaker 4: I would say even I'm sure you guys advise this 546 00:25:00,280 --> 00:25:02,720 Speaker 4: as well. Even before you get married or partner up 547 00:25:02,760 --> 00:25:05,280 Speaker 4: with someone, you have to make sure that sit down 548 00:25:05,320 --> 00:25:08,600 Speaker 4: with a financial planner, figure out what are your goals 549 00:25:08,600 --> 00:25:11,280 Speaker 4: as a couple and what's your money personality. So if 550 00:25:11,280 --> 00:25:14,159 Speaker 4: there's somebody who's like a scripper and a favor and 551 00:25:14,280 --> 00:25:18,080 Speaker 4: somebody who's just spending like crazy, that's not cute. Anymore 552 00:25:18,119 --> 00:25:20,159 Speaker 4: as you get married, and so making sure you're on 553 00:25:20,200 --> 00:25:23,600 Speaker 4: the same page when you look at what is what's 554 00:25:23,640 --> 00:25:27,680 Speaker 4: our priority today, knowing that when you are in those 555 00:25:27,760 --> 00:25:31,000 Speaker 4: peak earning years. I always say, look, I tell people look, 556 00:25:31,440 --> 00:25:33,879 Speaker 4: it's always about looking ahead to that next page. So 557 00:25:33,920 --> 00:25:35,680 Speaker 4: if you say we don't have kids, who are not 558 00:25:35,760 --> 00:25:37,440 Speaker 4: going to have kids, you're going to be able to 559 00:25:37,480 --> 00:25:39,320 Speaker 4: save more and you may be able to have more 560 00:25:39,440 --> 00:25:43,200 Speaker 4: career choices early. But if you are putting all of 561 00:25:43,400 --> 00:25:46,399 Speaker 4: your money, all your available resources, if you're spending it 562 00:25:46,480 --> 00:25:49,680 Speaker 4: as fast as you get it for whatever reason, you're 563 00:25:49,760 --> 00:25:51,959 Speaker 4: going to be so sorry by the time you get 564 00:25:51,960 --> 00:25:55,000 Speaker 4: in your fifties and you're exhausted. So you have to 565 00:25:55,160 --> 00:25:59,119 Speaker 4: make it a part of your conversation, say what is 566 00:25:59,320 --> 00:26:02,280 Speaker 4: right now. We might say, okay, we just had a baby, 567 00:26:02,840 --> 00:26:05,160 Speaker 4: juniors at home. One of us is going to stay 568 00:26:05,160 --> 00:26:08,200 Speaker 4: home with Junior for two years. Okay, so what can 569 00:26:08,320 --> 00:26:11,360 Speaker 4: we do to cut back so that we are still 570 00:26:11,440 --> 00:26:13,320 Speaker 4: saving and what can we do to make sure that 571 00:26:13,800 --> 00:26:16,080 Speaker 4: at every step of the way. Where it can feel 572 00:26:16,080 --> 00:26:17,920 Speaker 4: a little bit like whack a mole, but that's what 573 00:26:18,080 --> 00:26:22,480 Speaker 4: life is, and so it and what's so hard is 574 00:26:22,600 --> 00:26:26,359 Speaker 4: people in their twenties have no idea what their thirties, 575 00:26:26,440 --> 00:26:29,480 Speaker 4: forty fifties and even sixties are going to bring career wise, 576 00:26:29,600 --> 00:26:32,080 Speaker 4: and so you and financially, and so you always have 577 00:26:32,280 --> 00:26:35,040 Speaker 4: to be talking to each other. My son and daughter 578 00:26:35,080 --> 00:26:37,280 Speaker 4: in law are amazing at this, really talking to each 579 00:26:37,320 --> 00:26:40,440 Speaker 4: other and saying where what matters to us most right 580 00:26:40,520 --> 00:26:42,680 Speaker 4: now because that might change in a year or two, 581 00:26:43,119 --> 00:26:45,680 Speaker 4: and then you make your financial and career decisions accordingly. 582 00:26:46,320 --> 00:26:49,560 Speaker 1: All right, Yeah, that's that's good stuff. And like you said, 583 00:26:50,280 --> 00:26:53,000 Speaker 1: everybody's goals are different, and it's like a lot of 584 00:26:53,080 --> 00:26:55,600 Speaker 1: things Brian and I talk about on every topic on 585 00:26:55,720 --> 00:26:59,600 Speaker 1: this show, and it's just proactive communication. Get in a room, 586 00:26:59,640 --> 00:27:03,320 Speaker 1: spend the time together, share how everybody's thinking and feeling. 587 00:27:03,440 --> 00:27:05,520 Speaker 1: And yes, the finances are a big part of this, 588 00:27:05,720 --> 00:27:10,240 Speaker 1: but proactive communication is so important. Julie. Do you find 589 00:27:10,320 --> 00:27:13,960 Speaker 1: that people that regularly sit down and have these important 590 00:27:14,000 --> 00:27:17,720 Speaker 1: discussions really do head off some of these bigger issues 591 00:27:17,800 --> 00:27:20,240 Speaker 1: that could really derail a family and a marriage down 592 00:27:20,280 --> 00:27:20,600 Speaker 1: the road. 593 00:27:20,920 --> 00:27:23,080 Speaker 4: Yeah. I remember talking to this one guy and he 594 00:27:24,000 --> 00:27:26,080 Speaker 4: had a really big job. He was probably in his 595 00:27:26,680 --> 00:27:28,800 Speaker 4: mid to late thirties, had a really big job lots 596 00:27:28,840 --> 00:27:33,720 Speaker 4: of money, absolutely miserable, absolutely miserable, And I just said, Okay, 597 00:27:33,840 --> 00:27:35,560 Speaker 4: this is great. You're making good money. How can you 598 00:27:35,680 --> 00:27:37,560 Speaker 4: start to bank some of that money? But then look 599 00:27:37,600 --> 00:27:40,040 Speaker 4: ahead and say, I can't do this for the next 600 00:27:40,119 --> 00:27:42,600 Speaker 4: three to five years. So let's set a goal to 601 00:27:42,680 --> 00:27:45,840 Speaker 4: say that I'm going to change jobs in twelve to 602 00:27:45,920 --> 00:27:48,720 Speaker 4: eighteen twenty four months, and so what will that mean 603 00:27:48,920 --> 00:27:51,720 Speaker 4: for our finance? It is because I want to give 604 00:27:51,760 --> 00:27:54,520 Speaker 4: myself room to take a job that maybe pays less 605 00:27:54,760 --> 00:27:56,440 Speaker 4: or I'm going to have a better quality of life. 606 00:27:56,680 --> 00:27:58,399 Speaker 4: My bank account may not be as big, but I 607 00:27:58,480 --> 00:28:00,720 Speaker 4: can make that up because I'm only in my Just 608 00:28:00,800 --> 00:28:02,880 Speaker 4: really about playing both a short game analog game. 609 00:28:03,680 --> 00:28:06,680 Speaker 1: Now that's great, a lot of important topics to discuss 610 00:28:06,800 --> 00:28:09,520 Speaker 1: and a lot of great advice tonight from our career 611 00:28:09,640 --> 00:28:13,080 Speaker 1: expert Julie Bauki. You're listening to Simply Money presented by 612 00:28:13,119 --> 00:28:16,359 Speaker 1: all Worth Financial on fifty five KRC the talk station. 613 00:28:21,760 --> 00:28:24,440 Speaker 1: You're listening to Simply Money presented by all Worth Financial 614 00:28:24,520 --> 00:28:27,440 Speaker 1: on Bob Sponseller along with Brian James. Do you have 615 00:28:27,480 --> 00:28:30,040 Speaker 1: a financial question you'd like for us to answer. There's 616 00:28:30,119 --> 00:28:32,280 Speaker 1: a red button you can click while you're listening to 617 00:28:32,359 --> 00:28:35,760 Speaker 1: the show. If you're listening on the iHeart app, simply 618 00:28:35,880 --> 00:28:39,200 Speaker 1: record your question and as always, it will come straight 619 00:28:39,320 --> 00:28:43,480 Speaker 1: to us. All right, Brian, get ready for Tom from Marymont. 620 00:28:43,560 --> 00:28:47,280 Speaker 1: He says, our advisor said, our portfolio's risk adjusted return 621 00:28:47,400 --> 00:28:51,480 Speaker 1: looks great, but our actual returns have been pretty average. 622 00:28:51,880 --> 00:28:55,800 Speaker 1: How do you interpret risk adjusted metrics without fooling yourself 623 00:28:55,920 --> 00:28:57,120 Speaker 1: or overthinking things? 624 00:28:58,280 --> 00:29:01,280 Speaker 3: Now, this can be a common and pretty important disconnect here. 625 00:29:01,480 --> 00:29:04,160 Speaker 3: It usually means that the metric that's being used doesn't 626 00:29:04,200 --> 00:29:06,160 Speaker 3: have enough context to it. So figure out what what 627 00:29:06,280 --> 00:29:09,360 Speaker 3: does risk adjusted returns actually measure? You know, are you 628 00:29:09,440 --> 00:29:13,040 Speaker 3: really getting into stuff like sharp ratios, sortino ratios or 629 00:29:13,120 --> 00:29:15,440 Speaker 3: information ratios that don't tell you you know exactly how 630 00:29:15,520 --> 00:29:16,080 Speaker 3: much money you made? 631 00:29:16,080 --> 00:29:17,080 Speaker 2: Are you really getting into that? 632 00:29:17,440 --> 00:29:20,240 Speaker 3: A lot of people really will compare two portfolios that 633 00:29:20,320 --> 00:29:22,480 Speaker 3: are apples and oranges. So I'll have people come to 634 00:29:22,560 --> 00:29:24,000 Speaker 3: me and they'll say, you know, my four oh one 635 00:29:24,040 --> 00:29:26,080 Speaker 3: K is underperforming what you guys are doing for me, 636 00:29:26,240 --> 00:29:28,760 Speaker 3: or vice versa. Well, are you if you're running your 637 00:29:28,800 --> 00:29:30,760 Speaker 3: own four oh one K, are these identical? I mean, 638 00:29:30,840 --> 00:29:32,600 Speaker 3: are they are you comparing them? And or are we 639 00:29:32,640 --> 00:29:34,680 Speaker 3: trying to compare, you know, say the New York Yankees 640 00:29:34,760 --> 00:29:36,720 Speaker 3: with the San Francisco forty nine ers, if there's two 641 00:29:36,760 --> 00:29:38,920 Speaker 3: different events, and also with four oh one k is, 642 00:29:38,920 --> 00:29:40,880 Speaker 3: I'll throw in if you're putting money in every couple 643 00:29:40,920 --> 00:29:43,800 Speaker 3: of weeks, that can and will have an impact on 644 00:29:43,960 --> 00:29:46,320 Speaker 3: the cash flowing in or out of either of those 645 00:29:46,360 --> 00:29:48,640 Speaker 3: portfolios on a regular basis is definitely going to have 646 00:29:48,680 --> 00:29:51,120 Speaker 3: an impact on the performance numbers. So don't go too 647 00:29:51,240 --> 00:29:53,760 Speaker 3: deep trying to put two things right next to each 648 00:29:53,760 --> 00:29:56,200 Speaker 3: other and figuring out whether they're you know, whether they're 649 00:29:56,200 --> 00:29:59,400 Speaker 3: truly identical, whether they can be compared. So figure out 650 00:29:59,440 --> 00:30:01,920 Speaker 3: what benchmars that you're you're shooting for is it? Is 651 00:30:01,960 --> 00:30:04,240 Speaker 3: it something that's just the S and P five hundred. 652 00:30:04,440 --> 00:30:06,680 Speaker 3: Be real careful. If you have a conservative portfolio or 653 00:30:06,720 --> 00:30:09,360 Speaker 3: your advisor tells you we're investing for income or conservatively, 654 00:30:09,560 --> 00:30:10,960 Speaker 3: don't put that next to the S and P five 655 00:30:11,000 --> 00:30:12,240 Speaker 3: hundred because they're two different things. 656 00:30:12,840 --> 00:30:12,960 Speaker 2: You know. 657 00:30:13,040 --> 00:30:14,920 Speaker 3: On the other hand, if maybe that is the case, 658 00:30:15,040 --> 00:30:17,400 Speaker 3: and maybe it is truly a growth type portfolio, that's 659 00:30:17,400 --> 00:30:17,920 Speaker 3: a good thing to. 660 00:30:17,920 --> 00:30:18,880 Speaker 2: Measure against the S and P. 661 00:30:19,200 --> 00:30:21,640 Speaker 3: So understand truly what your own, what you own and 662 00:30:21,720 --> 00:30:24,320 Speaker 3: what is the appropriate benchmark to look at. Don't just 663 00:30:24,440 --> 00:30:27,040 Speaker 3: let your advisor or yourself throw out the term risk 664 00:30:27,120 --> 00:30:31,720 Speaker 3: adjusted returns without understanding what that actually means mathematically. If 665 00:30:31,720 --> 00:30:32,960 Speaker 3: we're going to get into the numbers, you got to 666 00:30:33,040 --> 00:30:35,840 Speaker 3: understand the components that go into it. So we'll move 667 00:30:35,880 --> 00:30:40,680 Speaker 3: on to Chris and Fort Thomas and Chris is has 668 00:30:40,800 --> 00:30:43,240 Speaker 3: been kept up at night thinking about it Roth conversions 669 00:30:43,280 --> 00:30:44,880 Speaker 3: over these next few years, but they also want to 670 00:30:44,920 --> 00:30:47,160 Speaker 3: kind of push out Social Security, So how do you 671 00:30:47,280 --> 00:30:49,880 Speaker 3: move all these things out? And you know, how do 672 00:30:49,920 --> 00:30:52,680 Speaker 3: you model these multiple tax decisions that kind of magnify 673 00:30:52,760 --> 00:30:53,720 Speaker 3: each other. What do you think about that? 674 00:30:53,760 --> 00:30:58,240 Speaker 1: Bob Well, Chris, without sounding like a complete smart alec, 675 00:30:58,280 --> 00:31:00,200 Speaker 1: I think you've already answered your own question. And you 676 00:31:00,320 --> 00:31:03,600 Speaker 1: got to model out different scenarios. The key is, you know, 677 00:31:03,720 --> 00:31:07,000 Speaker 1: how do you do that? And that's where sitting down 678 00:31:07,040 --> 00:31:10,880 Speaker 1: with a good financial advisor or a CPA or ideally 679 00:31:11,120 --> 00:31:15,080 Speaker 1: both can help you know, construct and model out these 680 00:31:15,160 --> 00:31:17,840 Speaker 1: different scenarios so you can make some good decisions. And 681 00:31:17,960 --> 00:31:20,280 Speaker 1: I think that's where you got to start. And I'm 682 00:31:20,320 --> 00:31:22,680 Speaker 1: not making light of this at all. These decisions are 683 00:31:22,720 --> 00:31:26,440 Speaker 1: getting tougher and tougher each year, as we always talk 684 00:31:26,520 --> 00:31:29,040 Speaker 1: about trying to make the tax code simpler and it 685 00:31:29,200 --> 00:31:32,200 Speaker 1: ends up getting more and more complex and difficult every year. 686 00:31:32,400 --> 00:31:36,240 Speaker 1: But in answer to your question, find a good fiduciary 687 00:31:36,280 --> 00:31:39,720 Speaker 1: advisor and hopefully find a good CPA and make sure 688 00:31:39,760 --> 00:31:42,600 Speaker 1: they're talking to one another. I know you know what 689 00:31:42,760 --> 00:31:45,320 Speaker 1: Brian and I do is we'll run these scenarios. We've 690 00:31:45,360 --> 00:31:48,720 Speaker 1: got some sophisticated software that we use to run both 691 00:31:48,800 --> 00:31:52,600 Speaker 1: financial plans and text strategies, and we'll come up with 692 00:31:52,720 --> 00:31:55,160 Speaker 1: some thoughts and ideas. But before we ever pull the 693 00:31:55,240 --> 00:31:59,480 Speaker 1: trigger on anything, we always contact our clients CPA and 694 00:31:59,600 --> 00:32:03,080 Speaker 1: we say, hey, here's what we're thinking. Are you thinking 695 00:32:03,200 --> 00:32:06,440 Speaker 1: something different? Are we missing something? Poke holes in this 696 00:32:06,760 --> 00:32:10,480 Speaker 1: and getting a good collaborative effort in here on the 697 00:32:10,560 --> 00:32:14,160 Speaker 1: front end before major decisions are made can can prevent 698 00:32:14,320 --> 00:32:19,240 Speaker 1: some costly mistakes from being made, and more importantly, put 699 00:32:19,280 --> 00:32:22,880 Speaker 1: a good solid plan together so everybody knows what we're 700 00:32:22,920 --> 00:32:26,080 Speaker 1: going to do and when and why, and that usually 701 00:32:26,200 --> 00:32:30,000 Speaker 1: results in a good situation for everybody. All Right, Aaron 702 00:32:30,240 --> 00:32:33,960 Speaker 1: and Mason says, we have several inherited accounts with different 703 00:32:34,080 --> 00:32:37,760 Speaker 1: tax rules. How do you design an investment strategy when 704 00:32:37,800 --> 00:32:43,040 Speaker 1: each account has its own withdrawal requirements and IRS Timeline Brian, 705 00:32:43,160 --> 00:32:45,680 Speaker 1: we're talking about I guess inherited IRA accounts. 706 00:32:46,080 --> 00:32:47,880 Speaker 2: Yes, and yeah, that's usually we could. 707 00:32:48,280 --> 00:32:50,120 Speaker 3: Let's knock some things down first of all, So so 708 00:32:50,320 --> 00:32:53,520 Speaker 3: iras are really you know that, that's really where this 709 00:32:53,600 --> 00:32:55,600 Speaker 3: comes from. When people have to start thinking and understanding 710 00:32:55,600 --> 00:32:57,480 Speaker 3: the rules. If you're inheriting, you know, something out of 711 00:32:57,520 --> 00:33:00,560 Speaker 3: a trust or just taxable assets that's usually cut and drive. 712 00:33:00,640 --> 00:33:03,080 Speaker 3: You're going to take those assets. Most likely you're going 713 00:33:03,160 --> 00:33:05,520 Speaker 3: to step up the cost basis to whatever it is, 714 00:33:05,840 --> 00:33:08,000 Speaker 3: whatever it was worth on the day that the decedent 715 00:33:08,080 --> 00:33:09,800 Speaker 3: passed away, and then that's the end of it. It's 716 00:33:09,840 --> 00:33:11,960 Speaker 3: yours is if you bought it on that day. IRA 717 00:33:12,200 --> 00:33:14,719 Speaker 3: is very very different. So first thing to figure out 718 00:33:14,760 --> 00:33:17,240 Speaker 3: here is and like Aaron says, he's got several different 719 00:33:17,280 --> 00:33:19,600 Speaker 3: inherited accounts, well, that means these are obviously coming from 720 00:33:19,640 --> 00:33:22,400 Speaker 3: two different decedents who died at two different times. So 721 00:33:22,480 --> 00:33:24,720 Speaker 3: let's go ahead and make this more complicated than maybe 722 00:33:24,760 --> 00:33:26,200 Speaker 3: it even is. But I have a feeling this is 723 00:33:26,280 --> 00:33:29,000 Speaker 3: the problem. One of these decedents may have died prior 724 00:33:29,080 --> 00:33:32,200 Speaker 3: to twenty twenty. That means that that's under the old 725 00:33:32,280 --> 00:33:35,480 Speaker 3: inherited IRA rules, and that means that Aaron is able 726 00:33:35,600 --> 00:33:39,040 Speaker 3: to stretch that out, stretch those distributions out. There's a 727 00:33:39,160 --> 00:33:40,880 Speaker 3: table that has to be used to do the calculation, 728 00:33:41,200 --> 00:33:43,520 Speaker 3: but Aaron has to take that out over the remainder 729 00:33:43,560 --> 00:33:45,080 Speaker 3: of his own lifetime. Is it we don't know how 730 00:33:45,120 --> 00:33:47,560 Speaker 3: old Aaron is. Let's say he's forty something. That's going 731 00:33:47,640 --> 00:33:51,280 Speaker 3: to be a you know, a fifty year timeframe that 732 00:33:51,360 --> 00:33:52,760 Speaker 3: he's going to pull that out over. That's going to 733 00:33:52,800 --> 00:33:55,560 Speaker 3: be a fairly small required distribution every year. Now, on 734 00:33:55,640 --> 00:33:57,640 Speaker 3: the other hand, let's assume that there is a second 735 00:33:57,720 --> 00:33:59,920 Speaker 3: deceedon out there, as Aaron has implied. In this person 736 00:34:00,200 --> 00:34:03,840 Speaker 3: died after twenty twenty, this is literally a second inherited IRA. 737 00:34:04,000 --> 00:34:06,520 Speaker 2: There are two inherited iras in Aaron's. 738 00:34:06,160 --> 00:34:08,440 Speaker 3: World that I'm kind of making up here, but that 739 00:34:08,680 --> 00:34:11,239 Speaker 3: IRA for the person who died after twenty twenty, that 740 00:34:11,400 --> 00:34:15,040 Speaker 3: one has got to be liquidated within ten years of death. So, Aaron, 741 00:34:15,080 --> 00:34:16,879 Speaker 3: you are right to figure out that this is pretty 742 00:34:16,920 --> 00:34:19,360 Speaker 3: complicated when you've got multiple situations like this going on. 743 00:34:19,800 --> 00:34:21,960 Speaker 3: Figure out the clock on each of those accounts and 744 00:34:22,000 --> 00:34:24,120 Speaker 3: then mark your calendar for which needs to happen when 745 00:34:24,640 --> 00:34:24,960 Speaker 3: all right. 746 00:34:25,040 --> 00:34:28,000 Speaker 1: Coming up next, how to think about risk when you've 747 00:34:28,080 --> 00:34:30,920 Speaker 1: already won the game, so to speak, in terms of 748 00:34:31,040 --> 00:34:34,840 Speaker 1: hitting all your desired financial goals. You're listening to Simply 749 00:34:34,880 --> 00:34:37,640 Speaker 1: Money presented by all Worth Financial on fifty five KRC, 750 00:34:38,120 --> 00:34:45,440 Speaker 1: the talk station. You're listening to Simply Money presented by 751 00:34:45,480 --> 00:34:48,440 Speaker 1: all Worth Financial on Bob Sponseller along with Brian James. 752 00:34:49,360 --> 00:34:52,120 Speaker 1: We talk a lot about growing wealth on this show. 753 00:34:52,160 --> 00:34:54,759 Speaker 1: But what happens when you've already won the game. You've 754 00:34:54,920 --> 00:34:59,360 Speaker 1: saved well, you've invested wisely, your portfolio is looking strong, 755 00:35:00,239 --> 00:35:03,800 Speaker 1: and your advisor has always already said, hey, with a 756 00:35:03,880 --> 00:35:06,800 Speaker 1: high degree of confidence, we know you're on track to 757 00:35:06,920 --> 00:35:10,560 Speaker 1: hit all your financial goals. The question really becomes, why 758 00:35:10,680 --> 00:35:13,800 Speaker 1: are you still swinging for the fences? Brian? We have 759 00:35:13,960 --> 00:35:16,200 Speaker 1: a few people like this that we talk about, not 760 00:35:16,320 --> 00:35:18,560 Speaker 1: a lot, but a few. Let's get into what we're 761 00:35:18,600 --> 00:35:22,520 Speaker 1: talking about here, playing playing too much offense, air raid 762 00:35:22,640 --> 00:35:26,200 Speaker 1: offense when you're already up four touchdowns in the fourth quarter, 763 00:35:26,239 --> 00:35:27,640 Speaker 1: I think is what we're talking about here. 764 00:35:27,800 --> 00:35:30,160 Speaker 3: Yeah, these are our spreadsheet friends. Got my spreadsheet one 765 00:35:30,239 --> 00:35:32,680 Speaker 3: update my spreadsheet every day. So let's say you're in 766 00:35:32,719 --> 00:35:35,480 Speaker 3: your early sixties and you maybe have accumulated five or 767 00:35:35,520 --> 00:35:38,000 Speaker 3: six million dollars in your retirement income plan that you've 768 00:35:38,040 --> 00:35:41,120 Speaker 3: been following for a long time. Is very positive and 769 00:35:41,120 --> 00:35:43,680 Speaker 3: you're pretty confident you're not going to run out of money. Congratulations, 770 00:35:43,719 --> 00:35:47,320 Speaker 3: you've won the game. But that portfolio, it's still aggressive 771 00:35:47,400 --> 00:35:49,640 Speaker 3: eighty percent stocks, and we're sitting here on the tail 772 00:35:49,760 --> 00:35:52,160 Speaker 3: end of three years of fantastic growth after one of 773 00:35:52,200 --> 00:35:54,000 Speaker 3: the more one of the more scary years we've had 774 00:35:54,040 --> 00:35:57,640 Speaker 3: in twenty twenty two. But that's that you're still tracking 775 00:35:57,640 --> 00:36:00,279 Speaker 3: the S and P five hundred, glued to CNBC, sending 776 00:36:00,280 --> 00:36:02,399 Speaker 3: to all that financial pornography out there, and your shelf, 777 00:36:02,440 --> 00:36:04,160 Speaker 3: thinking how do I beat the market even though you've 778 00:36:04,200 --> 00:36:06,760 Speaker 3: already won the game. This is kind of like sprinting 779 00:36:06,880 --> 00:36:09,839 Speaker 3: that another quarter mile after you already broke the tape 780 00:36:09,960 --> 00:36:12,920 Speaker 3: first place, and keep going around the track. That can 781 00:36:13,000 --> 00:36:14,600 Speaker 3: be very hard to shake because we've been doing this 782 00:36:14,719 --> 00:36:17,800 Speaker 3: for thirty forty years by this timeframe, and there's nothing 783 00:36:17,840 --> 00:36:19,960 Speaker 3: wrong with it. If you sit down with you know, 784 00:36:20,160 --> 00:36:22,160 Speaker 3: with your spouse, if that's the situation, or you know, 785 00:36:22,280 --> 00:36:25,400 Speaker 3: whoever else is directly impacted by your asset allocation decision. 786 00:36:25,440 --> 00:36:27,640 Speaker 3: It can be perfectly okay to say, you know, yes, 787 00:36:27,760 --> 00:36:29,799 Speaker 3: we're in our sixty seventies or whatever, but I want 788 00:36:29,840 --> 00:36:32,320 Speaker 3: to stay aggressive because we've got plenty of money and 789 00:36:32,520 --> 00:36:34,560 Speaker 3: I don't I'm not really worried about these dollars. They're 790 00:36:34,600 --> 00:36:36,480 Speaker 3: not coming out anytime soon. I don't need them. I 791 00:36:36,560 --> 00:36:38,600 Speaker 3: may as well grow them. That is a logically thought 792 00:36:38,600 --> 00:36:41,640 Speaker 3: out conclusion. It's also logical to say we've got enough money, 793 00:36:41,680 --> 00:36:44,160 Speaker 3: we don't need more growth, let's get off the roller coaster, 794 00:36:45,000 --> 00:36:46,520 Speaker 3: or you know, the third option is you know what. 795 00:36:46,719 --> 00:36:48,600 Speaker 3: Both of those make a little sense, so let's back 796 00:36:48,680 --> 00:36:50,719 Speaker 3: off a little bit. But the important thing is not 797 00:36:50,840 --> 00:36:53,640 Speaker 3: to necessarily make a change. It's to sit down and think, 798 00:36:53,840 --> 00:36:54,919 Speaker 3: is this still what I want? 799 00:36:55,000 --> 00:36:56,799 Speaker 2: I've won the game. Do I still need to play 800 00:36:56,840 --> 00:36:58,680 Speaker 2: it the same way I've been playing it for thirty years? 801 00:37:00,080 --> 00:37:02,719 Speaker 1: Yeah. Another way to say it is a you only 802 00:37:02,800 --> 00:37:04,719 Speaker 1: need to get rich once. You don't want to have 803 00:37:04,880 --> 00:37:07,400 Speaker 1: to do a redo in your sixties. That is no 804 00:37:07,840 --> 00:37:10,320 Speaker 1: fun at all. And Brian, I don't know about you. 805 00:37:10,480 --> 00:37:12,960 Speaker 1: I occasionally have people come in the office and they 806 00:37:13,040 --> 00:37:15,640 Speaker 1: want to ask well, what a most people do? What 807 00:37:15,800 --> 00:37:19,120 Speaker 1: do other people do that are in my situation? I 808 00:37:19,160 --> 00:37:22,560 Speaker 1: always tell them it doesn't matter. The same thing is, 809 00:37:22,719 --> 00:37:25,839 Speaker 1: it really doesn't matter what the S and P index does. 810 00:37:26,400 --> 00:37:29,360 Speaker 1: What matters and I'll call the client gym. All that 811 00:37:29,480 --> 00:37:33,480 Speaker 1: matters is the gym and index or the Diane Index. 812 00:37:33,640 --> 00:37:37,120 Speaker 1: In other words, are we on track to meet, if 813 00:37:37,200 --> 00:37:40,560 Speaker 1: not exceed, all of your financial goals with a very 814 00:37:40,680 --> 00:37:44,800 Speaker 1: high probability of set success in spite of any market 815 00:37:44,960 --> 00:37:48,600 Speaker 1: volatility that comes down the road. That's what winning looks like. 816 00:37:49,160 --> 00:37:52,000 Speaker 1: Here's the all Worth advice. Once you've built wealth, protecting 817 00:37:52,080 --> 00:37:55,560 Speaker 1: it becomes, you know, a higher and higher priority. Thanks 818 00:37:55,640 --> 00:37:58,360 Speaker 1: for listening tonight. You've been listening to Simply Money, presented 819 00:37:58,400 --> 00:38:00,960 Speaker 1: by Allworth Financial on fifty five k r C, the 820 00:38:01,320 --> 00:38:01,839 Speaker 1: talk station