1 00:00:03,960 --> 00:00:08,039 Speaker 1: Tonight some financial decisions that might seem a bit boring 2 00:00:08,119 --> 00:00:11,440 Speaker 1: on the surface, but the tend to matter most on 3 00:00:11,520 --> 00:00:13,960 Speaker 1: the road to financial freedom. You're listening to Simply Money, 4 00:00:13,960 --> 00:00:16,800 Speaker 1: presented by All Word Financial on Bob Sponseller along with 5 00:00:16,840 --> 00:00:21,280 Speaker 1: Brian James. Well, when people think about financial success, they 6 00:00:21,360 --> 00:00:26,799 Speaker 1: usually think big, big picture items and exciting decisions. But 7 00:00:26,880 --> 00:00:30,240 Speaker 1: after years of working with families, Brian and I know 8 00:00:30,320 --> 00:00:32,640 Speaker 1: you and I have both been doing this for decades now, 9 00:00:33,360 --> 00:00:37,839 Speaker 1: especially with successful families, We've learned something. These decisions that 10 00:00:38,000 --> 00:00:42,240 Speaker 1: actually matter the most are always the ones that seem 11 00:00:42,360 --> 00:00:45,839 Speaker 1: kind of boring on the surface. And what's interesting is 12 00:00:45,880 --> 00:00:49,760 Speaker 1: this becomes even a bigger, bigger issue as net worth 13 00:00:49,960 --> 00:00:53,440 Speaker 1: actually grows. And we're going to illustrate this tonight with 14 00:00:53,520 --> 00:00:57,680 Speaker 1: a few hypothetical situations. As we always say, then the 15 00:00:57,760 --> 00:01:00,800 Speaker 1: names have been protected to the names have been hidden 16 00:01:00,840 --> 00:01:02,760 Speaker 1: to protect the innocent. But let's walk through a couple 17 00:01:02,840 --> 00:01:06,280 Speaker 1: hypothetical situations on what we're talking about here. 18 00:01:06,319 --> 00:01:08,760 Speaker 2: Brian, Yeah, think the point of this whole segment here 19 00:01:08,880 --> 00:01:11,240 Speaker 2: is that championships are won in the off season in 20 00:01:11,280 --> 00:01:13,679 Speaker 2: the weight room, not not when we're staring at the 21 00:01:13,680 --> 00:01:16,520 Speaker 2: market every day looking at you know, wondering what's what's 22 00:01:16,560 --> 00:01:17,280 Speaker 2: coming next here. 23 00:01:17,319 --> 00:01:18,919 Speaker 3: So let's go through some examples. 24 00:01:19,040 --> 00:01:22,759 Speaker 2: Hypothetical Number one here is the great investor, bad outcome family. 25 00:01:22,880 --> 00:01:25,800 Speaker 2: So let's picture somebody in their early sixties, done everything right. 26 00:01:25,840 --> 00:01:29,200 Speaker 2: They're great savers, invested consistently. Maybe they've built four and 27 00:01:29,240 --> 00:01:32,080 Speaker 2: a half million dollars over retirement accounts, broker's accounts, some 28 00:01:32,120 --> 00:01:35,479 Speaker 2: company stock. So that means they look fantastic on paper, right, 29 00:01:36,000 --> 00:01:39,039 Speaker 2: and anybody would be envious of this situation. But here's 30 00:01:39,080 --> 00:01:41,520 Speaker 2: the boring decision they never revisited that comes back to 31 00:01:41,560 --> 00:01:44,280 Speaker 2: haunt them. Beneficiaries that four toh one k well that 32 00:01:44,360 --> 00:01:47,560 Speaker 2: still names each other and no contingent beneficiary, So they 33 00:01:47,560 --> 00:01:50,640 Speaker 2: got that one halfway right. They're old ira well that 34 00:01:50,680 --> 00:01:53,520 Speaker 2: has a trust that was replaced years ago. One account 35 00:01:53,560 --> 00:01:56,200 Speaker 2: still has an adult child listed from decades earlier. Now 36 00:01:56,360 --> 00:01:59,360 Speaker 2: just imagine something happens suddenly then that this had nothing 37 00:01:59,360 --> 00:02:01,280 Speaker 2: to do with the invest strategy. That's the part they 38 00:02:01,280 --> 00:02:03,280 Speaker 2: focused on. That's what I was saying. You know, these 39 00:02:03,320 --> 00:02:05,920 Speaker 2: are the little things. Now they've got a mess where 40 00:02:06,000 --> 00:02:08,800 Speaker 2: assets went to family members that they didn't intend. It 41 00:02:08,840 --> 00:02:10,760 Speaker 2: was not balanced, it wasn't spread out the way that 42 00:02:10,800 --> 00:02:15,000 Speaker 2: they wanted. That trust had different beneficiaries listed on it, 43 00:02:15,000 --> 00:02:17,160 Speaker 2: it had some charities they were no longer interested in, 44 00:02:17,360 --> 00:02:20,240 Speaker 2: so that one account went the wrong direction. And there's 45 00:02:20,280 --> 00:02:25,000 Speaker 2: really no way to explain to your errors why this happened, 46 00:02:25,040 --> 00:02:28,160 Speaker 2: because it wasn't intentional and you aren't around. 47 00:02:27,919 --> 00:02:28,560 Speaker 3: To clear it up. 48 00:02:28,600 --> 00:02:32,440 Speaker 2: So this was a paperwork problem, not an investment problem. 49 00:02:33,000 --> 00:02:34,959 Speaker 1: And Brian, I'm going to give you credit where credit 50 00:02:35,040 --> 00:02:36,720 Speaker 1: is due here. You and I were actually in a 51 00:02:36,720 --> 00:02:40,680 Speaker 1: meeting last week that you know, this exact topic you 52 00:02:40,720 --> 00:02:44,000 Speaker 1: know resurfaced and it's a client that that I've worked 53 00:02:44,000 --> 00:02:46,679 Speaker 1: with for several years. We update the plan every year, 54 00:02:46,720 --> 00:02:50,280 Speaker 1: We ask about beneficiaries every year, but this year, for 55 00:02:50,360 --> 00:02:54,679 Speaker 1: some reason, things changed in their family. And I'll give 56 00:02:54,720 --> 00:02:58,120 Speaker 1: credit to you. You asked the right questions and it 57 00:02:58,240 --> 00:03:00,760 Speaker 1: brought to the surface some things that needed to be 58 00:03:00,800 --> 00:03:05,360 Speaker 1: addressed in regards to beneficiaries, whether to use the trust 59 00:03:05,440 --> 00:03:08,400 Speaker 1: or not use the trust versus leave money directly to 60 00:03:08,440 --> 00:03:12,000 Speaker 1: the kids. It spawned a wonderful conversation that would never 61 00:03:12,120 --> 00:03:16,040 Speaker 1: have happened, and things would never have gotten executed according 62 00:03:16,040 --> 00:03:19,080 Speaker 1: to what the family's wishes. You know, updated for twenty 63 00:03:19,120 --> 00:03:22,000 Speaker 1: twenty six, are had you not asked a couple of 64 00:03:22,120 --> 00:03:26,079 Speaker 1: you know, great, you know, pointed questions. So, yeah, I'm 65 00:03:26,160 --> 00:03:29,600 Speaker 1: always surprised at how much this actually comes up. We're 66 00:03:29,639 --> 00:03:33,079 Speaker 1: worried about taxes, returns, you know, talking about different investment 67 00:03:33,160 --> 00:03:37,400 Speaker 1: products and strategies. That's all the sexy, exciting stuff. But boy, 68 00:03:37,960 --> 00:03:40,640 Speaker 1: just forgetting to talk about where and how you want 69 00:03:40,640 --> 00:03:42,880 Speaker 1: to leave this money to your heirs after you're gone, 70 00:03:43,160 --> 00:03:45,760 Speaker 1: that tends to get ignored and swept under the rug. 71 00:03:46,040 --> 00:03:48,760 Speaker 2: Yeah, and I think another one that comes up from 72 00:03:48,800 --> 00:03:51,720 Speaker 2: time to time is the remarried couple, you know, with 73 00:03:51,760 --> 00:03:53,160 Speaker 2: account spread all over the place. 74 00:03:53,160 --> 00:03:54,080 Speaker 3: Two people who have had. 75 00:03:54,000 --> 00:03:57,040 Speaker 2: Long careers, divorced later in life and then maybe remarried. 76 00:03:57,360 --> 00:03:59,400 Speaker 2: Never think about those beneficiaries. Well, that's going to be 77 00:03:59,400 --> 00:04:02,840 Speaker 2: a super off word conversation when all of the assets 78 00:04:02,880 --> 00:04:05,000 Speaker 2: go to the x spouse when when it was all 79 00:04:05,040 --> 00:04:07,400 Speaker 2: supposed to have been split up years ago. So you 80 00:04:07,440 --> 00:04:09,480 Speaker 2: need to make sure that all that stuff says what 81 00:04:09,600 --> 00:04:12,720 Speaker 2: you wanted to say. And the reason we do this 82 00:04:12,720 --> 00:04:14,880 Speaker 2: this is kind of human nature. This isn't fun. These 83 00:04:14,880 --> 00:04:17,920 Speaker 2: are boring decisions. That's why that's why we're talking about 84 00:04:17,920 --> 00:04:22,080 Speaker 2: these boring hypotheticals here, no immediate feedback, no, no immediate gratification, 85 00:04:22,200 --> 00:04:24,800 Speaker 2: And God knows, in this country we love our instant gratification. 86 00:04:25,040 --> 00:04:26,400 Speaker 3: Doesn't feel like you're doing anything. 87 00:04:26,440 --> 00:04:29,039 Speaker 2: Nobody leaves these meetings excited because they made a big 88 00:04:29,080 --> 00:04:31,800 Speaker 2: decision or are moving on in a big way. So 89 00:04:32,279 --> 00:04:35,679 Speaker 2: that but these still are very obviously, very very important decisions. 90 00:04:35,720 --> 00:04:37,720 Speaker 2: They may not feel important at the moment at the time, 91 00:04:37,920 --> 00:04:40,320 Speaker 2: but when things change quickly, they will become the most 92 00:04:40,320 --> 00:04:41,440 Speaker 2: important decision in the room. 93 00:04:41,880 --> 00:04:44,880 Speaker 1: All right, Well, let's get into a hypothetical situation number two, 94 00:04:44,920 --> 00:04:47,520 Speaker 1: and we'll talk about, you know, two couples with the 95 00:04:47,560 --> 00:04:52,800 Speaker 1: same net worth, but possibly two very different retirement outcomes 96 00:04:53,360 --> 00:04:56,880 Speaker 1: based on their withdrawal strategy. You know, let's say these 97 00:04:56,920 --> 00:04:59,520 Speaker 1: folks retire at sixty two, will throw out a net 98 00:04:59,520 --> 00:05:03,920 Speaker 1: worth of say five million dollars. Couple A focuses solely 99 00:05:03,960 --> 00:05:06,839 Speaker 1: on investmentry returns. They want to come in and talk 100 00:05:06,839 --> 00:05:09,680 Speaker 1: about performance all the time, and that's all they are 101 00:05:09,680 --> 00:05:14,320 Speaker 1: worried about, how did everything perform from a gross return standpoint. 102 00:05:14,800 --> 00:05:18,800 Speaker 1: Couple BE focuses on their withdrawal strategy. They ask, Hey, 103 00:05:18,839 --> 00:05:21,880 Speaker 1: which account should we spend from first, how do we 104 00:05:21,920 --> 00:05:26,080 Speaker 1: actually manage taxes between now in age seventy three when 105 00:05:26,120 --> 00:05:29,159 Speaker 1: those require minimum distributions are going to crop up? And 106 00:05:29,279 --> 00:05:33,120 Speaker 1: how do we create a steady income without getting into 107 00:05:33,120 --> 00:05:36,320 Speaker 1: a situation where we're we start to panic if we 108 00:05:36,400 --> 00:05:41,240 Speaker 1: see market volatility. So again, a difference between these two families. 109 00:05:41,440 --> 00:05:44,640 Speaker 1: One is doing some you know, often what can seem 110 00:05:44,680 --> 00:05:48,000 Speaker 1: like boring discussions. You know, when it comes to taxes. 111 00:05:48,080 --> 00:05:51,359 Speaker 1: Nobody wants to talk about taxes. But man, you fast 112 00:05:51,440 --> 00:05:55,480 Speaker 1: forward ten years later, Couple B will feel much calmer, 113 00:05:55,920 --> 00:05:59,479 Speaker 1: even if their returns were identical on a gross basis, 114 00:05:59,560 --> 00:06:03,000 Speaker 1: or maybe even slightly less than couple A, because they 115 00:06:03,000 --> 00:06:06,640 Speaker 1: were taxed smart in how they planned for their withdrawal strategy. 116 00:06:06,640 --> 00:06:08,960 Speaker 1: It makes a big difference. But you got to have 117 00:06:09,040 --> 00:06:11,039 Speaker 1: the conversation and you got to do the planning. 118 00:06:11,279 --> 00:06:13,320 Speaker 2: Yeah, i'm're Bob. I'm working with a case right now 119 00:06:13,400 --> 00:06:18,440 Speaker 2: where we've got a one de see spouse. This is 120 00:06:18,520 --> 00:06:20,280 Speaker 2: later in life. One to see spouse who had an 121 00:06:20,320 --> 00:06:22,720 Speaker 2: IRA took all of it and threw it in one 122 00:06:22,839 --> 00:06:25,920 Speaker 2: stock at some point unbeknownst to the rest of the family. 123 00:06:25,960 --> 00:06:28,080 Speaker 2: This is before we ended up working with these particular 124 00:06:28,120 --> 00:06:31,640 Speaker 2: assets and then passed away and had to scramble to 125 00:06:31,640 --> 00:06:34,840 Speaker 2: get a required minimum distribution out because the surviving spouse 126 00:06:34,920 --> 00:06:36,960 Speaker 2: was never involved in any of these decisions, didn't know 127 00:06:37,320 --> 00:06:40,560 Speaker 2: what to do, and there was the company holding the 128 00:06:40,560 --> 00:06:43,480 Speaker 2: account was just not any help at all whatsoever. So 129 00:06:43,480 --> 00:06:45,320 Speaker 2: we had scrambled get that done. And then we noticed 130 00:06:45,320 --> 00:06:47,320 Speaker 2: along the way that that one stock, this is a 131 00:06:47,360 --> 00:06:48,560 Speaker 2: lot of money. By the way, we started off a 132 00:06:48,560 --> 00:06:50,320 Speaker 2: little over a million dollars in the IRA. That one 133 00:06:50,360 --> 00:06:53,800 Speaker 2: stock during last year actually doubled. This is not that 134 00:06:54,200 --> 00:06:57,080 Speaker 2: this is a lucky story, but a white knuckle story too. 135 00:06:57,400 --> 00:06:59,280 Speaker 2: So now what they're looking at is that the R 136 00:06:59,360 --> 00:07:01,919 Speaker 2: and D that the surviving spouse just got used to 137 00:07:01,960 --> 00:07:04,320 Speaker 2: from having done it once, it's now twice as much 138 00:07:04,680 --> 00:07:07,280 Speaker 2: because that's stock double. So we got a couple problems here. 139 00:07:07,440 --> 00:07:10,160 Speaker 2: We got a gigantic tax obligation. We did have a 140 00:07:10,160 --> 00:07:12,120 Speaker 2: million dollars drop out of the sky. So that's that's 141 00:07:12,160 --> 00:07:14,000 Speaker 2: not a bad thing at all, but not a bad 142 00:07:14,080 --> 00:07:16,680 Speaker 2: problem to have exactly as problems go, one of the 143 00:07:16,680 --> 00:07:20,200 Speaker 2: good ones, but anyway, still very a lot of whiplashes. 144 00:07:20,240 --> 00:07:23,360 Speaker 2: This surviving spouse lost, of course, their beloved spouse and 145 00:07:23,480 --> 00:07:25,240 Speaker 2: has to get used to all of this crazy, and 146 00:07:25,280 --> 00:07:27,400 Speaker 2: it's just scary as all as I'll get out for 147 00:07:27,600 --> 00:07:29,640 Speaker 2: people to look at these numbers, especially in this case. 148 00:07:29,920 --> 00:07:33,080 Speaker 2: She's this person is not an aggressive investor. They never 149 00:07:33,120 --> 00:07:35,880 Speaker 2: would have invested on their own like this. However, that's 150 00:07:35,920 --> 00:07:38,360 Speaker 2: what they've been handed. And we're literally talking as we 151 00:07:38,400 --> 00:07:41,000 Speaker 2: speak about how to go forward, what's the right path 152 00:07:41,040 --> 00:07:44,480 Speaker 2: going forward? Now that it's it's just a single spouse situation, 153 00:07:44,600 --> 00:07:46,760 Speaker 2: so anyway, lots to pay attention to there. 154 00:07:47,320 --> 00:07:50,440 Speaker 1: All right, let's jump into hypothetical situation number three, and 155 00:07:50,480 --> 00:07:53,360 Speaker 1: we'll call this the tax window. A lot of people, 156 00:07:53,880 --> 00:07:57,080 Speaker 1: unfortunately miss or don't even want to talk about. And 157 00:07:57,160 --> 00:07:59,280 Speaker 1: this is a big one, Brian, we see all the time. 158 00:07:59,360 --> 00:08:02,600 Speaker 1: Imagine some when retiring at age sixty and they have 159 00:08:02,680 --> 00:08:05,520 Speaker 1: a large four oh one K balance and some modest 160 00:08:05,560 --> 00:08:10,080 Speaker 1: taxable savings. They haven't started taking Social Security yet, and 161 00:08:10,160 --> 00:08:13,600 Speaker 1: this is a golden tax window. If you take advantage 162 00:08:13,640 --> 00:08:16,600 Speaker 1: of it, your income is lower because you just retired, 163 00:08:16,880 --> 00:08:21,000 Speaker 1: flexibility is sky high. But instead of planning, a lot 164 00:08:21,080 --> 00:08:23,760 Speaker 1: of folks will say, hey, we'll deal with taxes later, 165 00:08:24,160 --> 00:08:28,680 Speaker 1: or they celebrate because they're paying next to nothing in 166 00:08:28,680 --> 00:08:31,920 Speaker 1: income taxes. You know, right now they're spiking the football 167 00:08:31,960 --> 00:08:35,960 Speaker 1: where you know, looming in the background here is fast 168 00:08:35,960 --> 00:08:39,160 Speaker 1: forward to their mid seventies when these rmds kick in. 169 00:08:39,640 --> 00:08:41,800 Speaker 1: You know, that's going to jump them up a tax bracket. 170 00:08:41,880 --> 00:08:44,199 Speaker 1: It's going to create you know, irma cer taxes on 171 00:08:44,240 --> 00:08:48,960 Speaker 1: their social security meaning Medicare premiums jump and suddenly taxes 172 00:08:49,320 --> 00:08:52,760 Speaker 1: are higher in retirement years than the last couple of 173 00:08:52,800 --> 00:08:56,640 Speaker 1: years they were working. So it could be a very 174 00:08:56,720 --> 00:08:59,960 Speaker 1: boring decision to come in and do some proactive tax planning, 175 00:09:00,440 --> 00:09:03,240 Speaker 1: and that would have changed everything. Brian, We see this 176 00:09:03,320 --> 00:09:08,080 Speaker 1: happen way too many times. People aren't aware of, you 177 00:09:08,080 --> 00:09:11,320 Speaker 1: know what we'll call that golden window between say age 178 00:09:11,400 --> 00:09:14,960 Speaker 1: sixty or sixty two. In age seventy three to seventy five, 179 00:09:15,000 --> 00:09:18,520 Speaker 1: there's a lot of opportunity there to be very efficient 180 00:09:18,840 --> 00:09:21,360 Speaker 1: when it comes to taxes and your withdrawal strategy. 181 00:09:21,440 --> 00:09:23,720 Speaker 2: That's right, but you got to understand how it works. Right, 182 00:09:23,760 --> 00:09:27,720 Speaker 2: spiking the football and celebrating a zero or ten percent 183 00:09:28,080 --> 00:09:31,360 Speaker 2: effective tax rate in this during this gold window period, 184 00:09:31,520 --> 00:09:34,000 Speaker 2: that is not something to celebrate. That's a missed opportunity. 185 00:09:34,200 --> 00:09:35,559 Speaker 2: These are the years where you really ought to be 186 00:09:35,600 --> 00:09:39,520 Speaker 2: thinking about roth IRA conversions, you know, maybe some charitable 187 00:09:39,760 --> 00:09:42,320 Speaker 2: things if you don't advise funds those types of things 188 00:09:42,840 --> 00:09:46,679 Speaker 2: to buy yourself some tax efficiency in the future. Not 189 00:09:46,760 --> 00:09:50,760 Speaker 2: taking advantage of this opportunity never means that you've won 190 00:09:50,840 --> 00:09:52,880 Speaker 2: the game, because all you're doing is you're just deferring. 191 00:09:53,120 --> 00:09:54,600 Speaker 2: Taxes are going to come do the way they are. 192 00:09:54,679 --> 00:09:57,360 Speaker 2: There are ways to mitigate and reduce, but you're not 193 00:09:57,360 --> 00:10:00,000 Speaker 2: going to eliminate anything. If you're paying zero percent tax 194 00:10:00,120 --> 00:10:03,000 Speaker 2: is in these years from a retirement to the r 195 00:10:03,080 --> 00:10:05,520 Speaker 2: MD window, then that means you're gonna pay significant taxes 196 00:10:05,559 --> 00:10:07,840 Speaker 2: when once you hit age seventy three or seventy five, 197 00:10:08,040 --> 00:10:12,600 Speaker 2: when those require minimum distributions kick in. So go ahead, 198 00:10:12,640 --> 00:10:13,960 Speaker 2: you look at you look at you want to respond 199 00:10:13,960 --> 00:10:14,079 Speaker 2: to that. 200 00:10:14,160 --> 00:10:14,880 Speaker 3: I'll also no. 201 00:10:15,160 --> 00:10:17,520 Speaker 1: I'm just gonna say, you know, this reminds me of 202 00:10:17,559 --> 00:10:20,120 Speaker 1: a few meetings I've had over the years where you know, 203 00:10:20,200 --> 00:10:22,199 Speaker 1: people come in and they do they have that four 204 00:10:22,280 --> 00:10:25,480 Speaker 1: or five six million dollar you know, portfolio balance, and 205 00:10:25,520 --> 00:10:28,200 Speaker 1: they know that they have enough money. You know, that's 206 00:10:28,240 --> 00:10:31,120 Speaker 1: not the issue they and I tell them straight up, 207 00:10:31,160 --> 00:10:35,480 Speaker 1: I'm saying, you don't need a financial advisor to you know, 208 00:10:35,960 --> 00:10:38,520 Speaker 1: not outlive your money. You won You could do that, 209 00:10:38,679 --> 00:10:40,800 Speaker 1: whether you work with us or not. You don't need 210 00:10:40,840 --> 00:10:45,360 Speaker 1: a financial advisor, you know, and I recognize nothing feels broken. 211 00:10:45,679 --> 00:10:49,199 Speaker 1: The markets are good, life is good, money's coming in. Uh, 212 00:10:49,280 --> 00:10:53,120 Speaker 1: you might want a financial advisor from the standpoint of 213 00:10:53,160 --> 00:10:57,319 Speaker 1: an efficiency standpoint, you know, managing these taxes and really 214 00:10:57,320 --> 00:11:00,480 Speaker 1: getting strategic on how you use your money. And then 215 00:11:00,520 --> 00:11:02,520 Speaker 1: people have a decision to make whether they want to 216 00:11:02,559 --> 00:11:05,400 Speaker 1: engage in those kind of discussions and that kind of planning. 217 00:11:06,280 --> 00:11:08,960 Speaker 1: Most of the time people do. Sometimes they're like, hey, 218 00:11:09,200 --> 00:11:10,800 Speaker 1: I don't want to deal with it. I just would 219 00:11:10,880 --> 00:11:14,160 Speaker 1: rather go play golf and you know, watch Netflix or whatever. 220 00:11:14,240 --> 00:11:17,000 Speaker 1: But you know, there's a lot of opportunities out there 221 00:11:17,120 --> 00:11:19,120 Speaker 1: if you're willing to do a little bit of planning 222 00:11:19,679 --> 00:11:21,920 Speaker 1: and work with a good fiduciary advisor. 223 00:11:22,200 --> 00:11:23,599 Speaker 2: Yeah, I think there's a lot to be said for 224 00:11:23,960 --> 00:11:27,120 Speaker 2: the idea of sitting down and figuring out realizing that 225 00:11:27,240 --> 00:11:31,080 Speaker 2: sometimes sometimes the best thing to do for tax planning 226 00:11:31,120 --> 00:11:33,640 Speaker 2: is actually to pay a little more. This sounds stupid, 227 00:11:34,160 --> 00:11:36,240 Speaker 2: but you know, again, in that window where you're in 228 00:11:36,240 --> 00:11:38,640 Speaker 2: the lowest tax bracket you've seen in decades, it may 229 00:11:38,760 --> 00:11:41,640 Speaker 2: very well make some sense to go ahead and voluntarily 230 00:11:41,640 --> 00:11:43,440 Speaker 2: put yourself in a higher bracket with some of these 231 00:11:43,480 --> 00:11:46,360 Speaker 2: techniques we're talking about, because that will reduce the bracket 232 00:11:46,400 --> 00:11:48,480 Speaker 2: you're going to be dealing with in the future there 233 00:11:48,520 --> 00:11:51,439 Speaker 2: and more importantly, it'll reduce the bracket your airs will 234 00:11:51,440 --> 00:11:53,840 Speaker 2: deal with, rather than just continuing to let it pile 235 00:11:53,920 --> 00:11:55,000 Speaker 2: up and up and up and open up. 236 00:11:55,679 --> 00:11:59,160 Speaker 1: Here's the all Worth advice. The boring financial decisions don't 237 00:11:59,200 --> 00:12:02,760 Speaker 1: feel very important today, but they're the ones that can 238 00:12:02,960 --> 00:12:07,040 Speaker 1: really impact your future down the road. Coming up next, 239 00:12:07,240 --> 00:12:10,679 Speaker 1: we move on to the financial risks no one tends 240 00:12:10,720 --> 00:12:13,319 Speaker 1: to talk about. You're listening to Simply Money, presented by 241 00:12:13,320 --> 00:12:21,080 Speaker 1: Allworth Financial on fifty five KRC, the talk station. You're 242 00:12:21,120 --> 00:12:23,800 Speaker 1: listening to Simply Money presented by all Worth Financial Lumpop 243 00:12:23,840 --> 00:12:27,040 Speaker 1: sponseller along with Brian James. If you can't listen to 244 00:12:27,040 --> 00:12:31,120 Speaker 1: Simply Money live every night, subscribe and get our daily podcasts. 245 00:12:31,160 --> 00:12:34,600 Speaker 1: Just search Simply Money on the iHeart app or wherever 246 00:12:34,679 --> 00:12:38,520 Speaker 1: you find your podcast. Straight ahead of six forty three, 247 00:12:38,600 --> 00:12:43,080 Speaker 1: we're tackling asset location myths, early planning moves that can 248 00:12:43,160 --> 00:12:46,680 Speaker 1: pay off for decades and why managing risk is often 249 00:12:46,760 --> 00:12:51,720 Speaker 1: about behavior, not which products you use. All right, Brian, 250 00:12:51,760 --> 00:12:53,800 Speaker 1: we spent a lot of time talking on the show 251 00:12:53,800 --> 00:12:58,400 Speaker 1: about markets, returns, volatility, interest rates. But here's the truth. 252 00:12:58,720 --> 00:13:02,839 Speaker 1: For most successful families, markets are not the biggest risk 253 00:13:03,200 --> 00:13:07,440 Speaker 1: to their financial plan. The risks that actually derail good 254 00:13:07,520 --> 00:13:10,960 Speaker 1: plans are the ones people don't like to talk about 255 00:13:11,200 --> 00:13:15,360 Speaker 1: because they're uncomfortable. They're personal, and they don't show up 256 00:13:15,400 --> 00:13:17,760 Speaker 1: on a chart or a graph. Let's get into some 257 00:13:17,840 --> 00:13:18,840 Speaker 1: of those tonight, Brian. 258 00:13:19,240 --> 00:13:21,400 Speaker 2: Well, the first one this done would seem to be 259 00:13:21,480 --> 00:13:24,520 Speaker 2: a good thing, right, living longer than expected. We have 260 00:13:24,559 --> 00:13:26,600 Speaker 2: all the time, you know, as we're walking people through 261 00:13:26,640 --> 00:13:30,760 Speaker 2: their potential, you know, financial outcomes throughout retirement, lots of 262 00:13:30,760 --> 00:13:33,240 Speaker 2: people will will look at us. We usually budget into 263 00:13:33,480 --> 00:13:36,840 Speaker 2: mid nineties or so, and you know, people will say, wow, no, 264 00:13:37,080 --> 00:13:38,480 Speaker 2: I'm never going to live that long. And then we 265 00:13:38,480 --> 00:13:40,480 Speaker 2: get the laundry list of uncle Charlie died here, and 266 00:13:40,480 --> 00:13:41,760 Speaker 2: here's when my aunt Betty. 267 00:13:41,520 --> 00:13:42,520 Speaker 3: Died, and my mom and dad and. 268 00:13:42,520 --> 00:13:46,160 Speaker 2: All this stuff and all that's that's great, that's valuable information. 269 00:13:46,640 --> 00:13:48,720 Speaker 2: But at the same time, you can have you know 270 00:13:48,760 --> 00:13:50,560 Speaker 2: the problem that we're about to discuss right now. What 271 00:13:50,679 --> 00:13:53,160 Speaker 2: happens if it doesn't work that way? Lots of people 272 00:13:53,200 --> 00:13:55,240 Speaker 2: have plenty of money to die young. That's not the 273 00:13:55,360 --> 00:13:57,760 Speaker 2: challenge as an advisor. I'm worried that we've we've got 274 00:13:57,760 --> 00:14:00,720 Speaker 2: the ability to finish the race. So you know, let's 275 00:14:00,720 --> 00:14:02,959 Speaker 2: talk about you know, imagine a couple retiring at sixty 276 00:14:03,000 --> 00:14:04,800 Speaker 2: two with say four and a half million dollars. They 277 00:14:04,840 --> 00:14:07,200 Speaker 2: feel confident they've built up this machine that can pay 278 00:14:07,240 --> 00:14:08,920 Speaker 2: them for a long time. They plan for twenty five 279 00:14:09,000 --> 00:14:11,160 Speaker 2: years worth of retirement. One of them lives in their 280 00:14:11,160 --> 00:14:14,640 Speaker 2: mid nineties. Suddenly retirement isn't twenty five years, it's thirty 281 00:14:14,640 --> 00:14:15,199 Speaker 2: three years. 282 00:14:15,440 --> 00:14:17,720 Speaker 3: Now. They went wrong. They didn't overspend, This didn't sneak 283 00:14:17,800 --> 00:14:19,160 Speaker 3: up on them. They just didn't die. 284 00:14:19,240 --> 00:14:21,760 Speaker 2: The market didn't collapse, none of these crazy things happened 285 00:14:21,760 --> 00:14:25,120 Speaker 2: to them. They just live longer than expected. So longevity risk, well, 286 00:14:25,120 --> 00:14:27,560 Speaker 2: that's not scary at sixty two, but try thinking about 287 00:14:27,600 --> 00:14:30,120 Speaker 2: it at eighty eight, when when resources may be dwindling. 288 00:14:31,440 --> 00:14:34,600 Speaker 1: Yeah, and I do think this longevity risk is a 289 00:14:34,640 --> 00:14:37,360 Speaker 1: real thing. I mean, just with health care technology and 290 00:14:37,400 --> 00:14:40,600 Speaker 1: people being healthier and having access to more medications and 291 00:14:41,120 --> 00:14:44,400 Speaker 1: you know, health care remedies, people are living longer. I 292 00:14:44,400 --> 00:14:47,680 Speaker 1: mean just anecdotally, Brian. I don't know about you, but 293 00:14:48,240 --> 00:14:50,640 Speaker 1: for the clients that I've worked with for decades now, 294 00:14:50,720 --> 00:14:53,640 Speaker 1: you know, if someone does not have, you know, some 295 00:14:53,720 --> 00:14:56,920 Speaker 1: kind of you know, debilitating illness, you know, say cancer 296 00:14:57,120 --> 00:14:59,680 Speaker 1: or heart disease or something like that. I'm seeing people 297 00:14:59,760 --> 00:15:04,160 Speaker 1: live easily into their late eighties, if not early nineties, 298 00:15:04,600 --> 00:15:07,840 Speaker 1: and that's different. You know, the generation prior to that, 299 00:15:08,040 --> 00:15:11,560 Speaker 1: most of the time, did not live that long. And yeah, 300 00:15:11,600 --> 00:15:13,440 Speaker 1: I agree with you. Some people want to hear that 301 00:15:13,560 --> 00:15:16,840 Speaker 1: and some people don't. But you better plan for it 302 00:15:16,920 --> 00:15:20,680 Speaker 1: because just living that extra six seven eight years, or 303 00:15:20,720 --> 00:15:23,760 Speaker 1: even if you don't live that long, your spouse lives 304 00:15:23,800 --> 00:15:27,000 Speaker 1: that extra five six seven eight years, it can really 305 00:15:27,040 --> 00:15:29,920 Speaker 1: make a huge difference down the road, you know, to 306 00:15:30,200 --> 00:15:33,000 Speaker 1: how things work from a financial standpoint. And if you 307 00:15:33,000 --> 00:15:36,360 Speaker 1: don't plan for it, then unfortunately, you're relying on your 308 00:15:36,440 --> 00:15:39,640 Speaker 1: kids and other relatives to come in and that opens 309 00:15:39,720 --> 00:15:43,400 Speaker 1: up a whole other potential Hornet's nest of issues and problems. 310 00:15:43,400 --> 00:15:46,560 Speaker 1: So longevity risk is real and it needs to be 311 00:15:46,560 --> 00:15:49,000 Speaker 1: addressed in a financial plan. And the good thing is 312 00:15:49,040 --> 00:15:52,120 Speaker 1: you can adjust that every year like we do every 313 00:15:52,120 --> 00:15:55,280 Speaker 1: other assumption in a financial plan, if you do update 314 00:15:55,280 --> 00:15:58,080 Speaker 1: your plan every year. All right, let's get into hypothetical 315 00:15:58,160 --> 00:16:00,240 Speaker 1: number two, you know, and this kind of goes along 316 00:16:00,280 --> 00:16:04,640 Speaker 1: with what we just talked about, that healthcare gap before Medicare. 317 00:16:04,680 --> 00:16:07,640 Speaker 1: And here, Brian, we're talking about people that step away 318 00:16:07,680 --> 00:16:11,120 Speaker 1: from work, maybe in their late fifties, early sixties, and 319 00:16:11,160 --> 00:16:13,040 Speaker 1: they got a little bit of time before they can 320 00:16:13,080 --> 00:16:16,200 Speaker 1: go on Medicare. And I think people sometimes get sticker 321 00:16:16,280 --> 00:16:19,920 Speaker 1: shock here on what it actually costs to pay for 322 00:16:20,280 --> 00:16:22,680 Speaker 1: medical insurance in those intervening years. 323 00:16:22,920 --> 00:16:23,560 Speaker 3: Yeah, that's right. 324 00:16:23,600 --> 00:16:26,080 Speaker 2: Though the number week we often use is about three 325 00:16:26,200 --> 00:16:28,880 Speaker 2: hundred thousand dollars, it can cost three hundred thousand dollars 326 00:16:28,960 --> 00:16:33,080 Speaker 2: over the remaining right life during that three decade retirement period. 327 00:16:33,720 --> 00:16:35,400 Speaker 3: And that's just your normal. 328 00:16:35,600 --> 00:16:39,760 Speaker 2: Out of pocket costs on Medicare premiums and a supplemental 329 00:16:39,800 --> 00:16:43,520 Speaker 2: policy and different procedures, office visits, copais, those. 330 00:16:43,440 --> 00:16:45,600 Speaker 3: Kinds of things that is not long term cred. 331 00:16:45,680 --> 00:16:47,360 Speaker 2: That sounds like a huge amount of money, but we 332 00:16:47,440 --> 00:16:49,960 Speaker 2: tell people to budget a married couple, for example, ten 333 00:16:50,000 --> 00:16:53,080 Speaker 2: to twelve thousand dollars for healthcare expens just routine annual 334 00:16:53,080 --> 00:16:56,160 Speaker 2: healthcare expenses including Medicare premiums. Cut that in half for 335 00:16:56,160 --> 00:16:58,880 Speaker 2: a single person, Well, there's three hundred thousand dollars right there. 336 00:16:59,000 --> 00:17:02,280 Speaker 2: If long term care kicks in, then that's that's an 337 00:17:02,280 --> 00:17:06,520 Speaker 2: even different situation, especially looking at the kind of situations 338 00:17:06,560 --> 00:17:09,680 Speaker 2: you may have in a long term care situation Alzheimer's, Parkinson's, 339 00:17:09,680 --> 00:17:11,359 Speaker 2: those kinds of things that are very different than the 340 00:17:11,400 --> 00:17:13,960 Speaker 2: normal I need help with my activities of daily living. 341 00:17:14,400 --> 00:17:16,680 Speaker 2: So we need to make sure that we understand what 342 00:17:16,720 --> 00:17:18,480 Speaker 2: that actually looks like. If we're going to spend a 343 00:17:18,480 --> 00:17:22,080 Speaker 2: bunch of money early on in retirement because we've retired early. 344 00:17:22,280 --> 00:17:24,360 Speaker 2: First of all, I'm all for it, don't We don't 345 00:17:24,400 --> 00:17:26,200 Speaker 2: have to wait. There's no rule that says you must 346 00:17:26,200 --> 00:17:28,720 Speaker 2: wait until medicare. That is not a hard and fast rule. 347 00:17:28,840 --> 00:17:31,520 Speaker 2: You have to understand what the expenses are and most importantly, 348 00:17:31,720 --> 00:17:33,880 Speaker 2: be willing to write that check. You can buy insurance 349 00:17:33,920 --> 00:17:37,119 Speaker 2: off off the rack. It might cost you, you know, 350 00:17:37,160 --> 00:17:39,680 Speaker 2: ten thousand dollars a year a piece, something like that 351 00:17:40,200 --> 00:17:42,000 Speaker 2: before Medicare, but that doesn't mean you can't afford it. 352 00:17:42,200 --> 00:17:45,520 Speaker 2: Liking writing the check is very different than your ability 353 00:17:45,520 --> 00:17:48,320 Speaker 2: to pay for it. But understand what that forecast means 354 00:17:48,440 --> 00:17:50,080 Speaker 2: and what that really looks like and what the impact 355 00:17:50,080 --> 00:17:51,840 Speaker 2: will be down the line, and you can be okay 356 00:17:51,880 --> 00:17:53,920 Speaker 2: doing these things, but again, planning is key. 357 00:17:53,960 --> 00:17:55,359 Speaker 3: Make sure you know what to expect. 358 00:17:56,600 --> 00:17:59,080 Speaker 1: A third hypothetical that I think it's critical we get 359 00:17:59,080 --> 00:18:02,120 Speaker 1: into tonight, Brian, and is the one you know, involving 360 00:18:02,240 --> 00:18:05,760 Speaker 1: cognitive decline. Here's a risk no one wants to think about, 361 00:18:05,920 --> 00:18:08,520 Speaker 1: no one wants to talk about. You know, imagine a 362 00:18:08,640 --> 00:18:12,760 Speaker 1: very financially savvy spouse who's always handled all the money. 363 00:18:12,800 --> 00:18:17,040 Speaker 1: They're smart, they're engaged, they're detail oriented, and then slowly 364 00:18:17,640 --> 00:18:21,520 Speaker 1: decision making gets harder. You know, small bills are missed, 365 00:18:21,560 --> 00:18:26,160 Speaker 1: accounts get confusing, mistakes start happening. The money didn't change 366 00:18:26,160 --> 00:18:29,000 Speaker 1: at all, the strategy didn't change, the plan didn't change, 367 00:18:29,000 --> 00:18:33,040 Speaker 1: but the person managing it did. And if there's no system, 368 00:18:33,440 --> 00:18:37,639 Speaker 1: no delegation, no accountability, structure and plan in place and 369 00:18:37,680 --> 00:18:42,480 Speaker 1: no backup, this risk can really snowball fast. And unfortunately, Brian, 370 00:18:42,600 --> 00:18:45,760 Speaker 1: I've run into this situation more than a few times 371 00:18:46,160 --> 00:18:48,920 Speaker 1: over the last three or four years, and no situation 372 00:18:49,200 --> 00:18:52,520 Speaker 1: is the same. There's no playbook or handbook on how 373 00:18:52,520 --> 00:18:55,199 Speaker 1: to manage it other than to say, you know, we 374 00:18:55,320 --> 00:18:57,439 Speaker 1: got to get out in front of it, you know, 375 00:18:57,560 --> 00:19:01,359 Speaker 1: with the other spouse and with fa family members and 376 00:19:01,560 --> 00:19:05,840 Speaker 1: just help navigate this family through this when that, you know, 377 00:19:06,040 --> 00:19:09,160 Speaker 1: especially in a situation where the primary spouse that had 378 00:19:09,200 --> 00:19:14,160 Speaker 1: been handling all the money is sometimes rapidly entering into 379 00:19:14,240 --> 00:19:17,160 Speaker 1: a situation where they just simply can't manage it anymore. 380 00:19:17,320 --> 00:19:19,399 Speaker 2: This is what powers of attorney are for, and they 381 00:19:19,400 --> 00:19:22,200 Speaker 2: should be set up when you and your loved ones 382 00:19:22,200 --> 00:19:24,399 Speaker 2: are all of sound mind and ready to have a 383 00:19:24,440 --> 00:19:26,840 Speaker 2: good conversation. Here's the decisions I want you to make 384 00:19:26,880 --> 00:19:29,159 Speaker 2: for me, and tell me what you want me to 385 00:19:29,160 --> 00:19:30,680 Speaker 2: do for you, and so on and so forth, and 386 00:19:30,720 --> 00:19:32,600 Speaker 2: then get all this stuff documented so that when the 387 00:19:32,600 --> 00:19:34,199 Speaker 2: time comes, you're ready to move on it. 388 00:19:35,080 --> 00:19:37,320 Speaker 1: Here's the all Worth advice. The biggest threats to your 389 00:19:37,320 --> 00:19:41,600 Speaker 1: financial plan often aren't market swings. There are the life 390 00:19:41,840 --> 00:19:46,879 Speaker 1: risks you don't prepare for coming up next, remodeling projects 391 00:19:46,920 --> 00:19:49,679 Speaker 1: that offer the best return on investments. And we're not 392 00:19:49,760 --> 00:19:52,840 Speaker 1: just talking about kitchens and bathrooms here. You're listening to 393 00:19:52,840 --> 00:19:55,840 Speaker 1: simply Money, presented by all Worth Financial on fifty five KRC, 394 00:19:56,320 --> 00:20:03,800 Speaker 1: the talk station you're listening to Simpoint Money presenta by 395 00:20:03,800 --> 00:20:06,879 Speaker 1: all Worth Financial. I'm Bob sponseller along with Brian James, 396 00:20:06,960 --> 00:20:09,960 Speaker 1: joined tonight by our good friend in real estate expert, 397 00:20:10,000 --> 00:20:12,840 Speaker 1: Michelle Sloan, owner of Remax Time. 398 00:20:13,280 --> 00:20:15,840 Speaker 3: Michelle, great as always to be with. 399 00:20:15,720 --> 00:20:19,040 Speaker 1: You tonight, and I know you want to talk about tonight. 400 00:20:19,240 --> 00:20:22,200 Speaker 1: What are some of the what we'll call high return 401 00:20:22,840 --> 00:20:26,240 Speaker 1: remodeling or home fix up things? You know, maybe even 402 00:20:26,280 --> 00:20:31,080 Speaker 1: aside from the traditional kitchen and bath remodel that really 403 00:20:31,119 --> 00:20:34,439 Speaker 1: does bring value to the table as people fix up 404 00:20:34,440 --> 00:20:36,200 Speaker 1: their homes and want to get their money out of 405 00:20:36,280 --> 00:20:37,000 Speaker 1: it when they sell. 406 00:20:37,680 --> 00:20:41,159 Speaker 4: Absolutely so, now is a great time to take a 407 00:20:41,200 --> 00:20:43,480 Speaker 4: look around your house and see what is old and 408 00:20:43,560 --> 00:20:45,760 Speaker 4: dingy and what needs to be remodeled. A lot of 409 00:20:45,800 --> 00:20:49,520 Speaker 4: people will always tell you kitchens and baths will sell 410 00:20:49,560 --> 00:20:53,560 Speaker 4: your home, and that is not wrong. That is absolutely correct. 411 00:20:53,640 --> 00:20:55,440 Speaker 4: You want to make sure that your kitchen and bath 412 00:20:55,560 --> 00:20:58,360 Speaker 4: is looking great. But at the same time, there are 413 00:20:58,400 --> 00:21:00,800 Speaker 4: a number of other things that you could be doing 414 00:21:00,840 --> 00:21:02,760 Speaker 4: around the house and that you can get quotes for 415 00:21:03,000 --> 00:21:06,920 Speaker 4: right now, because a lot of these are not as 416 00:21:06,960 --> 00:21:11,560 Speaker 4: sexy as a kitchen and bathroom remodel. Kitchens and baths 417 00:21:11,680 --> 00:21:15,800 Speaker 4: are very important, and you can spend thousands of dollars 418 00:21:15,880 --> 00:21:20,080 Speaker 4: on doing those updates. But at the same time, you could, 419 00:21:20,280 --> 00:21:24,080 Speaker 4: let's just say, how old is your front door, what 420 00:21:24,119 --> 00:21:27,000 Speaker 4: does your front door look like? That's that curb appeal. 421 00:21:27,560 --> 00:21:30,680 Speaker 4: You know, a new steel front door will give you 422 00:21:30,840 --> 00:21:36,679 Speaker 4: one hundred percent return on that investment, and that a 423 00:21:36,680 --> 00:21:39,480 Speaker 4: lot of people are like, wow, you know, so maybe 424 00:21:39,480 --> 00:21:41,479 Speaker 4: a thousand dollars or less you can get a new 425 00:21:41,520 --> 00:21:43,880 Speaker 4: front door. Now, if you're gonna get something super fancy 426 00:21:43,920 --> 00:21:46,920 Speaker 4: with lights and windows and all that kind of thing, 427 00:21:46,960 --> 00:21:49,400 Speaker 4: it could be more than that. But that front door 428 00:21:49,560 --> 00:21:52,560 Speaker 4: really says a lot about your home. So whether it's 429 00:21:52,600 --> 00:21:55,520 Speaker 4: a steel front door or a fiberglass front door, you're 430 00:21:55,520 --> 00:21:57,800 Speaker 4: gonna get most of that back when you go to 431 00:21:57,840 --> 00:21:58,560 Speaker 4: sell your house. 432 00:22:00,080 --> 00:22:04,200 Speaker 2: Question about this, because as I've gone through life, you know, 433 00:22:04,320 --> 00:22:07,040 Speaker 2: you're in different people's houses and you can see who 434 00:22:07,080 --> 00:22:09,720 Speaker 2: has updated and looks pretty, you know, nice and looks 435 00:22:09,760 --> 00:22:12,920 Speaker 2: like modern colors. And then there's the pink bathroom tile 436 00:22:13,000 --> 00:22:16,200 Speaker 2: with the pink toilet, with the pink shower cap carpet 437 00:22:16,200 --> 00:22:17,399 Speaker 2: thing on the you know, I haven't seen one of 438 00:22:17,400 --> 00:22:19,880 Speaker 2: those a long time, but they still exist. But how 439 00:22:20,600 --> 00:22:25,640 Speaker 2: how jarring is that to see that sixties seventies bathroom? 440 00:22:25,840 --> 00:22:27,679 Speaker 2: Do I really have to rip out the tile of 441 00:22:27,720 --> 00:22:30,320 Speaker 2: the avocado the pink stuff or the all yellow bathroom? 442 00:22:30,440 --> 00:22:32,440 Speaker 3: Do people actually do that? Michelle? 443 00:22:32,520 --> 00:22:35,399 Speaker 1: What Brian's really trying to ask you here? Is it 444 00:22:36,119 --> 00:22:38,879 Speaker 1: still okay that he has a purple front door? 445 00:22:39,000 --> 00:22:40,800 Speaker 3: Is that going to negatively impact? 446 00:22:40,880 --> 00:22:43,120 Speaker 4: The purple front door's got to go at the very least. 447 00:22:43,160 --> 00:22:45,320 Speaker 4: We need to paint that. And that's the one thing 448 00:22:45,320 --> 00:22:47,320 Speaker 4: you want to connect with your real estate agent who 449 00:22:47,359 --> 00:22:50,560 Speaker 4: knows and has the pulse of the market. Now, I 450 00:22:50,640 --> 00:22:54,119 Speaker 4: will tell you those sixties and seventies bathrooms with the 451 00:22:54,200 --> 00:22:58,200 Speaker 4: pink tile or the yellow tile, to me, they're retro 452 00:22:58,480 --> 00:23:01,320 Speaker 4: and they are sort of back in style. So you 453 00:23:01,359 --> 00:23:03,880 Speaker 4: can do some updates in that bathroom. And the other 454 00:23:03,920 --> 00:23:07,840 Speaker 4: thing is to those bathrooms when they were installed, the 455 00:23:07,960 --> 00:23:10,639 Speaker 4: tile on the floors and on the walls of the 456 00:23:10,800 --> 00:23:13,960 Speaker 4: of that tub are on there. 457 00:23:14,200 --> 00:23:16,000 Speaker 3: I mean they are stuck so hard. 458 00:23:17,080 --> 00:23:21,080 Speaker 1: Yeah, so is the forty year old mold in the 459 00:23:21,160 --> 00:23:22,080 Speaker 1: corner of the top. 460 00:23:22,760 --> 00:23:26,040 Speaker 3: That's my pink fortress of solitude. Bob, don't install me 461 00:23:26,400 --> 00:23:27,360 Speaker 3: that pink bathroom. 462 00:23:27,520 --> 00:23:30,239 Speaker 4: Honestly, you know, when I go into homes and I 463 00:23:30,280 --> 00:23:33,760 Speaker 4: see so many homes around the Cincinnati area that are 464 00:23:33,920 --> 00:23:36,800 Speaker 4: older and they have the pink or the yellow or 465 00:23:36,880 --> 00:23:40,720 Speaker 4: the maybe the baby blue tile, And a lot of times, 466 00:23:40,720 --> 00:23:43,040 Speaker 4: if the tiles in good shape and they're not cracked, 467 00:23:43,760 --> 00:23:46,720 Speaker 4: I tell people to leave it and just paint around it, 468 00:23:46,800 --> 00:23:49,199 Speaker 4: not on the tile, but paint the rest of the 469 00:23:49,280 --> 00:23:53,320 Speaker 4: room as sort of a homage to the past. 470 00:23:53,920 --> 00:23:58,240 Speaker 2: Maybe some velvet rope across the door, exactly, a plaque 471 00:23:58,240 --> 00:23:58,760 Speaker 2: on the wall. 472 00:23:59,640 --> 00:24:02,920 Speaker 4: Yeah, it's not something that you have to change. Again, 473 00:24:03,400 --> 00:24:05,840 Speaker 4: it depends on the condition of the tile. If the 474 00:24:05,920 --> 00:24:09,960 Speaker 4: tile is cracked on the floor, absolutely, If the tile 475 00:24:10,040 --> 00:24:12,760 Speaker 4: is cracked in the tub or maybe the tub the 476 00:24:12,920 --> 00:24:16,840 Speaker 4: faucets don't work or whatever, then yes, it's time to 477 00:24:16,880 --> 00:24:21,800 Speaker 4: go ahead and spend the money and update that. There's 478 00:24:21,840 --> 00:24:24,280 Speaker 4: so many ways that you can update a bathroom, So 479 00:24:25,160 --> 00:24:27,199 Speaker 4: you want to just look at all of your options. 480 00:24:27,640 --> 00:24:30,440 Speaker 4: And like I said, it's important because if you're working 481 00:24:30,520 --> 00:24:32,960 Speaker 4: with me or another agent who's been in the business 482 00:24:32,960 --> 00:24:35,600 Speaker 4: for a long time, we're going to put together a list, 483 00:24:36,200 --> 00:24:38,000 Speaker 4: and in that list, it's going to be the most 484 00:24:38,080 --> 00:24:41,000 Speaker 4: important all the way down to if you have time, 485 00:24:41,080 --> 00:24:43,159 Speaker 4: and you've got a little extra money, go ahead and 486 00:24:43,200 --> 00:24:47,560 Speaker 4: do it. So we're going to prioritize that list. Here's 487 00:24:47,600 --> 00:24:52,119 Speaker 4: another great idea. If you have hardwood flooring, real hardwood 488 00:24:52,160 --> 00:24:56,000 Speaker 4: in your home, and if you want to get that refinished. 489 00:24:56,600 --> 00:25:00,320 Speaker 4: A lot of times hardwood, really it can take a 490 00:25:00,359 --> 00:25:03,720 Speaker 4: beating and over the years, it may fade, it may 491 00:25:03,720 --> 00:25:06,600 Speaker 4: have scratches from dogs and kids and all of those things. 492 00:25:06,840 --> 00:25:11,280 Speaker 4: If it's real hardwood and you get the hardwood floors refinished, 493 00:25:11,760 --> 00:25:14,239 Speaker 4: you can recover. Now this is a big number. It's 494 00:25:14,280 --> 00:25:17,679 Speaker 4: the biggest number. One hundred and forty percent return on 495 00:25:17,760 --> 00:25:22,199 Speaker 4: investment on that refinish of the hardwood floors. So that 496 00:25:22,280 --> 00:25:25,720 Speaker 4: one is really a good one. Now it's a messy job. 497 00:25:25,840 --> 00:25:27,920 Speaker 4: You have to hire someone to do it, because if 498 00:25:27,920 --> 00:25:30,640 Speaker 4: somebody who doesn't know what they're doing does a really 499 00:25:30,680 --> 00:25:33,480 Speaker 4: bad job on your hardwood floors, then that's going to 500 00:25:33,520 --> 00:25:34,760 Speaker 4: be worse than doing it at all. 501 00:25:35,119 --> 00:25:37,520 Speaker 3: So you an estimate of the expense of that. 502 00:25:38,119 --> 00:25:40,280 Speaker 4: Well, it depends on the square footage, right, So it's 503 00:25:40,320 --> 00:25:42,800 Speaker 4: going to be based on if it's just a hallway 504 00:25:43,359 --> 00:25:46,560 Speaker 4: or maybe a hallway into a kitchen, it's going to 505 00:25:46,600 --> 00:25:49,280 Speaker 4: be maybe four or five thousand dollars. Again, it really 506 00:25:49,320 --> 00:25:52,320 Speaker 4: depends on how bad and how far they have to 507 00:25:52,359 --> 00:25:55,000 Speaker 4: say and what you're planning on doing as far as 508 00:25:55,080 --> 00:25:58,120 Speaker 4: color on the on the top of that refinish. So 509 00:25:58,359 --> 00:26:01,280 Speaker 4: it's something that you really want to get a couple 510 00:26:01,280 --> 00:26:05,680 Speaker 4: of quotes on and see the work that the contractors 511 00:26:05,720 --> 00:26:10,119 Speaker 4: are doing before you give them any money or before 512 00:26:10,119 --> 00:26:12,240 Speaker 4: you give them okay to get started. 513 00:26:12,680 --> 00:26:15,280 Speaker 1: All right, Michelle, we have time for maybe one more 514 00:26:15,359 --> 00:26:17,760 Speaker 1: quick one. You've talked about the front door investment, you 515 00:26:17,760 --> 00:26:20,160 Speaker 1: talked about the hardwood and that what would be another 516 00:26:20,320 --> 00:26:22,600 Speaker 1: third one at the top of your list is in 517 00:26:22,720 --> 00:26:24,880 Speaker 1: terms of rate of return on investment. 518 00:26:25,480 --> 00:26:27,560 Speaker 4: Again, I told you it's not sexy, but I'll tell 519 00:26:27,600 --> 00:26:32,480 Speaker 4: you what insulation Upgrading your insulation, especially you know, in 520 00:26:32,520 --> 00:26:36,440 Speaker 4: your walls, in your attic, making your house more energy efficient. 521 00:26:37,960 --> 00:26:40,480 Speaker 4: You can't see it, it's not going to be that visual. 522 00:26:41,000 --> 00:26:43,000 Speaker 4: But if you have it, and then you can prove 523 00:26:43,160 --> 00:26:47,919 Speaker 4: that your Duke bill is lower, people are going to 524 00:26:48,000 --> 00:26:53,840 Speaker 4: appreciate that. So insulation upgrades is a huge addition to 525 00:26:53,880 --> 00:26:56,440 Speaker 4: a home. The other thing one more is a garage 526 00:26:56,480 --> 00:26:59,359 Speaker 4: door front door. Garage, just like your front doors. 527 00:27:00,520 --> 00:27:01,880 Speaker 3: Are big all. 528 00:27:01,880 --> 00:27:05,520 Speaker 1: Right, good stuff as always, Michelle, thanks for joining us tonight. 529 00:27:05,520 --> 00:27:07,880 Speaker 1: You're listening to Simply Money presented by all Worth Financial 530 00:27:07,880 --> 00:27:16,199 Speaker 1: on fifty five KRC, the talk station. You're listening to 531 00:27:16,200 --> 00:27:19,119 Speaker 1: Simply Money presented by all Worth Financial on Bob Sponsorer 532 00:27:19,200 --> 00:27:22,280 Speaker 1: along with Brian James. Do you have a financial question 533 00:27:22,320 --> 00:27:24,440 Speaker 1: you'd like for us to answer. There's a red button 534 00:27:24,440 --> 00:27:26,720 Speaker 1: you could click while you're listening to the show. If 535 00:27:26,800 --> 00:27:30,520 Speaker 1: you're listening on the iHeart app, simply record your question 536 00:27:30,680 --> 00:27:34,160 Speaker 1: and it will come straight to us. All right, Brian 537 00:27:34,200 --> 00:27:36,960 Speaker 1: get ready for Terry in Madeira. He says, We've always 538 00:27:36,960 --> 00:27:40,240 Speaker 1: focused on net worth, but lately I'm more interested in 539 00:27:40,280 --> 00:27:43,720 Speaker 1: how much control we actually have over our money. How 540 00:27:43,720 --> 00:27:46,720 Speaker 1: do you plan for control not just growth? 541 00:27:47,560 --> 00:27:49,639 Speaker 2: Yeah, this is pretty common because most of us we 542 00:27:49,680 --> 00:27:52,840 Speaker 2: spend time focusing on networth. We spend decades focusing on 543 00:27:52,920 --> 00:27:55,720 Speaker 2: networth because when we get started we have zero networth. 544 00:27:55,920 --> 00:27:58,240 Speaker 2: So that becomes you can't make any big decisions until 545 00:27:58,280 --> 00:27:59,639 Speaker 2: you got something to care about, so you have to 546 00:27:59,640 --> 00:28:02,600 Speaker 2: focus on that first. But eventually, as Terry has experienced, 547 00:28:02,600 --> 00:28:04,640 Speaker 2: you get to a point where the decisions changed because 548 00:28:04,640 --> 00:28:08,680 Speaker 2: now you have networth. So I think that The suggestion 549 00:28:08,800 --> 00:28:11,359 Speaker 2: here is that to separate wealth from access. So a 550 00:28:11,440 --> 00:28:15,199 Speaker 2: high networth tied up in retirement accounts, real estate, private investments, 551 00:28:15,440 --> 00:28:18,000 Speaker 2: and other business opportunities that might grow nicely, but it 552 00:28:18,080 --> 00:28:20,920 Speaker 2: limits when, how, and at what tax costs you can 553 00:28:20,960 --> 00:28:21,760 Speaker 2: do anything with it. 554 00:28:22,000 --> 00:28:23,240 Speaker 3: So control comes. 555 00:28:22,960 --> 00:28:25,720 Speaker 2: From having assets that are available on your timeline, not 556 00:28:25,760 --> 00:28:27,960 Speaker 2: the IRS's or the market. So make sure you understand 557 00:28:28,080 --> 00:28:31,240 Speaker 2: those different changes across your assets. And second, think in 558 00:28:31,320 --> 00:28:35,040 Speaker 2: terms of the optionality you have. So if something changed 559 00:28:35,040 --> 00:28:38,760 Speaker 2: next year, ask yourself this maybe job loss, health issue, opportunity. 560 00:28:38,760 --> 00:28:41,240 Speaker 2: How many choices do we have before we are forced 561 00:28:41,240 --> 00:28:43,840 Speaker 2: into a bad tax or a bad market decision, meaning 562 00:28:44,000 --> 00:28:46,040 Speaker 2: got to eat a bunch of taxes, or the market's 563 00:28:46,080 --> 00:28:48,400 Speaker 2: not cooperating. But this thing happens, so we got to 564 00:28:48,400 --> 00:28:50,760 Speaker 2: deal with it. Therefore, got to sell a loss. So 565 00:28:50,800 --> 00:28:55,000 Speaker 2: that means maintaining taxable assets alongside retirement accounts. It is 566 00:28:55,080 --> 00:28:57,640 Speaker 2: okay and fairly common for people to back off on 567 00:28:57,680 --> 00:29:01,000 Speaker 2: four oh one K contributions later in life, once they 568 00:29:01,080 --> 00:29:03,760 Speaker 2: realize that they've got nothing but pre tax dollars in 569 00:29:03,760 --> 00:29:05,520 Speaker 2: their forewing. Key cause that's all they've done for decades. 570 00:29:05,520 --> 00:29:07,880 Speaker 2: You're allowed to change that around. Just don't give away 571 00:29:07,880 --> 00:29:09,720 Speaker 2: the free money. At least be putting enough in there 572 00:29:10,120 --> 00:29:11,680 Speaker 2: to get the match and all that kind of stuff. 573 00:29:11,800 --> 00:29:14,360 Speaker 2: But it's okay to look at to invest in taxable 574 00:29:14,360 --> 00:29:18,000 Speaker 2: accounts to give yourself for more flexibility, liquidity buffers that 575 00:29:18,080 --> 00:29:21,000 Speaker 2: cover multiple years of spending. Figure out what your goals are. 576 00:29:21,120 --> 00:29:23,600 Speaker 2: When is what pile of money going to be required? 577 00:29:23,920 --> 00:29:25,640 Speaker 2: Maybe there's a I don't know, a balloon payment on 578 00:29:25,640 --> 00:29:27,160 Speaker 2: the mortgage, or you got a wedding coming up, or. 579 00:29:27,160 --> 00:29:28,520 Speaker 3: You know you've got to buy a car or something. 580 00:29:28,720 --> 00:29:31,920 Speaker 2: Make sure that you're well aware of that well before 581 00:29:31,920 --> 00:29:34,840 Speaker 2: it happens, so that you can time those investment type decisions. 582 00:29:35,200 --> 00:29:37,680 Speaker 2: So the bottom line here is growth builds wealth, but 583 00:29:37,840 --> 00:29:40,600 Speaker 2: control protects your freedom. That strong plan is going to 584 00:29:40,640 --> 00:29:43,360 Speaker 2: optimize both of them, but in later stages, control is 585 00:29:43,400 --> 00:29:45,440 Speaker 2: often harder to get to if you don't plan properly. 586 00:29:46,040 --> 00:29:48,320 Speaker 2: Mark in Indian Hill, Bob Mark says that he's heard 587 00:29:48,360 --> 00:29:51,600 Speaker 2: the taxable accounts should be invested differently than retirement accounts. 588 00:29:51,680 --> 00:29:53,360 Speaker 3: But how different are we really talking? 589 00:29:54,760 --> 00:29:58,440 Speaker 1: Well, Mark, like a lot of answers to these financial questions, 590 00:29:58,520 --> 00:30:01,920 Speaker 1: I'm going to throw out the standard. It depends answer, 591 00:30:02,040 --> 00:30:05,360 Speaker 1: because it depends on what your assets need to do 592 00:30:05,440 --> 00:30:08,320 Speaker 1: for you. And when allow me to explain. We've got 593 00:30:08,360 --> 00:30:11,640 Speaker 1: some folks that you know, in their taxable accounts, they 594 00:30:11,720 --> 00:30:14,000 Speaker 1: they know that they've got enough money coming in from 595 00:30:14,040 --> 00:30:18,960 Speaker 1: other sources, say, require minimum distribution, social Security, maybe a pension, 596 00:30:19,320 --> 00:30:23,200 Speaker 1: they never need to spend any of that taxable account money. 597 00:30:23,240 --> 00:30:26,720 Speaker 1: And that's money that has been compounding for years and 598 00:30:26,920 --> 00:30:30,240 Speaker 1: has a lot of embedded capital gains, you know, in 599 00:30:30,320 --> 00:30:34,960 Speaker 1: the portfolio, so you could take advantage of long term 600 00:30:35,000 --> 00:30:38,320 Speaker 1: capital gain rates and just as importantly a stepped up 601 00:30:38,360 --> 00:30:42,600 Speaker 1: basis at death by just staying growth oriented in that 602 00:30:42,760 --> 00:30:45,680 Speaker 1: taxable account, you know, especially if you never think you're 603 00:30:45,680 --> 00:30:48,920 Speaker 1: gonna need or want to touch it. So that's a 604 00:30:49,000 --> 00:30:51,560 Speaker 1: scenario where hey, you might want to go, you know, 605 00:30:51,680 --> 00:30:54,760 Speaker 1: more extreme growth in the taxable accounts for the reasons 606 00:30:54,800 --> 00:30:57,800 Speaker 1: I've already mentioned, and then be a little more conservative 607 00:30:58,200 --> 00:31:00,800 Speaker 1: with the retirement accounts that are actual paying the bills 608 00:31:00,800 --> 00:31:05,360 Speaker 1: every month. Another situation, however, is this is where you 609 00:31:05,400 --> 00:31:09,560 Speaker 1: get into you know, some proactive tax analysis on what's 610 00:31:09,600 --> 00:31:15,920 Speaker 1: the most efficient way to generate a retirement income you know, 611 00:31:16,040 --> 00:31:19,080 Speaker 1: cash flow, and you might be surprised to know that. 612 00:31:19,640 --> 00:31:22,360 Speaker 1: You know, as Brian talked about in an earlier segment, 613 00:31:22,400 --> 00:31:24,800 Speaker 1: it's not a sin to pay some taxes now and then, 614 00:31:25,080 --> 00:31:26,880 Speaker 1: especially if you can pay them at a lower rate. 615 00:31:27,000 --> 00:31:29,600 Speaker 1: So you know, I think those are two scenarios where 616 00:31:29,640 --> 00:31:32,320 Speaker 1: you want to look at it, and depending on what 617 00:31:32,400 --> 00:31:34,520 Speaker 1: you need to do, what you need your money to 618 00:31:34,560 --> 00:31:37,920 Speaker 1: do for you, and when and why, that might dictate 619 00:31:38,040 --> 00:31:43,840 Speaker 1: some slightly different investment strategies for taxable versus non taxable accounts, 620 00:31:44,160 --> 00:31:47,320 Speaker 1: or it might not. It depends on your situation, all right, 621 00:31:47,400 --> 00:31:50,640 Speaker 1: Mary and Villa Hill says, our advisor mentioned that early 622 00:31:50,760 --> 00:31:55,479 Speaker 1: decisions matter more than later ones, which decisions, Brian, are 623 00:31:55,520 --> 00:31:59,160 Speaker 1: the ones that really have long term consequences and therefore 624 00:31:59,280 --> 00:32:00,480 Speaker 1: need to be made earlier. 625 00:32:00,880 --> 00:32:02,640 Speaker 2: Well, I happen to agree with that advisor, and that 626 00:32:02,720 --> 00:32:05,120 Speaker 2: sounds like something we would say, Bob. So the reason 627 00:32:05,240 --> 00:32:07,960 Speaker 2: is the subject that comes up all the time, and 628 00:32:08,000 --> 00:32:10,480 Speaker 2: you kind of just talked about it and its compounding 629 00:32:10,600 --> 00:32:15,080 Speaker 2: of investments in time. Really, so some decisions compound restraints, 630 00:32:15,200 --> 00:32:18,120 Speaker 2: not just returns. Once those constraints are locked in, later 631 00:32:18,200 --> 00:32:20,520 Speaker 2: optimization just doesn't help as much. So, you know, the 632 00:32:20,520 --> 00:32:23,360 Speaker 2: big one here is account structure. Earlier in your career. 633 00:32:23,720 --> 00:32:26,760 Speaker 2: Where you save often matters more than how you invest. 634 00:32:26,840 --> 00:32:30,120 Speaker 2: Over concentrating in tax deferret exam accounts, for example, like 635 00:32:30,160 --> 00:32:32,400 Speaker 2: four to oh one k that can look really efficient 636 00:32:32,440 --> 00:32:35,080 Speaker 2: at forty, but at age seventy it can mean much 637 00:32:35,240 --> 00:32:39,360 Speaker 2: much higher income, forced income taxes, higher Medicare premiums, and 638 00:32:39,440 --> 00:32:42,880 Speaker 2: limited flexibility because once you hit that required minimum distribution age, 639 00:32:42,920 --> 00:32:45,920 Speaker 2: you've kind of lost control over your income streams and 640 00:32:45,960 --> 00:32:48,040 Speaker 2: you're gonna pay You're gonna pay taxes at whatever rate, 641 00:32:48,080 --> 00:32:50,040 Speaker 2: and there's no magic that fixes that. We'll have people 642 00:32:50,040 --> 00:32:52,080 Speaker 2: come in and they'll say, I want to minimize my 643 00:32:52,160 --> 00:32:56,080 Speaker 2: income for so I can avoid these Medicare premium hikes 644 00:32:56,680 --> 00:32:59,080 Speaker 2: the via IRMA. And the answer to that is that's 645 00:32:59,080 --> 00:33:01,400 Speaker 2: something you should have done ted fifteen years ago, rather 646 00:33:01,440 --> 00:33:03,680 Speaker 2: than continuing to plow money into the pre tax side 647 00:33:03,680 --> 00:33:05,640 Speaker 2: of your four oh one k roth conversion and so 648 00:33:05,680 --> 00:33:07,320 Speaker 2: on and so forth. Not a ton that can be 649 00:33:07,360 --> 00:33:09,760 Speaker 2: done after the fact. That's not nothing, but at the 650 00:33:09,800 --> 00:33:13,160 Speaker 2: same time, it's something you have to remember that once 651 00:33:13,200 --> 00:33:13,760 Speaker 2: the horse is out of. 652 00:33:13,760 --> 00:33:14,680 Speaker 3: The barn, there's not a whole lot. 653 00:33:14,760 --> 00:33:17,840 Speaker 2: You can do one more here and we'll move on 654 00:33:17,920 --> 00:33:20,080 Speaker 2: to Sam and Montgomery, and Sam says he owns a 655 00:33:20,120 --> 00:33:22,440 Speaker 2: mix of bond funds and individual bonds and he's not 656 00:33:22,480 --> 00:33:25,360 Speaker 2: totally sure what the purpose of them are, what each 657 00:33:25,360 --> 00:33:27,880 Speaker 2: one's supposed to be doing. And he says, how do 658 00:33:27,920 --> 00:33:31,280 Speaker 2: I figure out if they're overlapping or actually complementing each other? 659 00:33:32,480 --> 00:33:34,600 Speaker 1: Well, Sam, I would say this, first of all, you know, 660 00:33:34,960 --> 00:33:38,200 Speaker 1: there's usually two reasons why people have bonds at all 661 00:33:38,240 --> 00:33:41,280 Speaker 1: in their portfolio. One is to generate income, you know, 662 00:33:41,400 --> 00:33:45,920 Speaker 1: on a relatively safe basis, consistent cash flow and income 663 00:33:46,000 --> 00:33:49,920 Speaker 1: that the person plans to spend. Another reason to own 664 00:33:50,040 --> 00:33:54,280 Speaker 1: bonds or bond funds is a non correlated asset class 665 00:33:54,320 --> 00:33:57,880 Speaker 1: that tends to be less volatile than the stock market, 666 00:33:57,960 --> 00:34:01,640 Speaker 1: you know, again as a hedge against risk. So I 667 00:34:01,680 --> 00:34:04,320 Speaker 1: think you need to be asking your why in terms 668 00:34:04,320 --> 00:34:06,920 Speaker 1: of why you own these bonds in the first place, 669 00:34:07,040 --> 00:34:09,560 Speaker 1: what are they supposed to be doing for you and when? 670 00:34:10,320 --> 00:34:14,279 Speaker 1: And then you know, layer that into your overall retirement 671 00:34:14,320 --> 00:34:18,359 Speaker 1: cash flow strategy. And once you've, once you've figured out 672 00:34:18,440 --> 00:34:21,120 Speaker 1: that the answers to those questions, then you could start 673 00:34:21,160 --> 00:34:23,319 Speaker 1: to take a look at you know, if we look 674 00:34:23,320 --> 00:34:26,319 Speaker 1: at your font bond funds and individual bonds, is their 675 00:34:26,400 --> 00:34:30,440 Speaker 1: overlap and is the composition of those bond funds and 676 00:34:30,520 --> 00:34:34,040 Speaker 1: bonds really doing what you wanted to do based on 677 00:34:34,160 --> 00:34:37,160 Speaker 1: your why on you know, why you have these in 678 00:34:37,239 --> 00:34:40,600 Speaker 1: the portfolio in the first place, So you know that's 679 00:34:40,640 --> 00:34:43,960 Speaker 1: what a financial plan and an investment strategy is really 680 00:34:44,040 --> 00:34:47,080 Speaker 1: meant to do. Be proactive about why you own these 681 00:34:47,120 --> 00:34:50,000 Speaker 1: things in the portfolio and make sure they're doing for 682 00:34:50,040 --> 00:34:52,760 Speaker 1: you exactly what they're meant to do at all times. 683 00:34:53,280 --> 00:34:55,880 Speaker 1: Coming up next, I've got my two cents on another 684 00:34:56,000 --> 00:34:59,959 Speaker 1: what I'll call risk, you know, involving decisions that people 685 00:35:00,280 --> 00:35:02,640 Speaker 1: just tend to avoid and not want to talk about 686 00:35:02,960 --> 00:35:07,359 Speaker 1: that can really potentially derail a long term financial plan. 687 00:35:07,440 --> 00:35:10,120 Speaker 1: You're listening to Simply Money presented by all Worth Financial 688 00:35:10,120 --> 00:35:18,200 Speaker 1: on fifty five KRC, the talk station. You're listening to 689 00:35:18,239 --> 00:35:21,040 Speaker 1: Simply Money presented by all Worth Financial. I'm Bob Sponseller 690 00:35:21,080 --> 00:35:25,200 Speaker 1: along with Brian James Well Brian. Earlier in the show tonight, 691 00:35:25,239 --> 00:35:27,839 Speaker 1: we talked about some of these risks that people tend 692 00:35:27,840 --> 00:35:31,320 Speaker 1: to avoid and not address, you know, apart from market risks, 693 00:35:31,360 --> 00:35:34,399 Speaker 1: things like that that everybody wants to talk about, and 694 00:35:34,960 --> 00:35:37,839 Speaker 1: the risks that can really throw a financial plan off 695 00:35:37,840 --> 00:35:39,319 Speaker 1: in the long term. And I want to bring up 696 00:35:39,400 --> 00:35:42,719 Speaker 1: one more that I feel very strongly about. And you know, 697 00:35:43,000 --> 00:35:45,040 Speaker 1: maybe I talk about it too much on the show, 698 00:35:45,080 --> 00:35:48,560 Speaker 1: but it just has to do with preparing our heirs 699 00:35:48,960 --> 00:35:52,359 Speaker 1: to actually handle money, you know, when when it comes 700 00:35:52,480 --> 00:35:55,719 Speaker 1: time to handle an inheritance down the road. And I 701 00:35:55,719 --> 00:35:58,480 Speaker 1: I'm just speaking from personal experience. Now. You know, my 702 00:35:58,600 --> 00:36:01,920 Speaker 1: wife and I have three adult sons, you know, early 703 00:36:02,000 --> 00:36:05,239 Speaker 1: thirties down to mid twenties, and so we're watching them, 704 00:36:05,760 --> 00:36:09,080 Speaker 1: you know, grow up and move into adulthood. They're getting married, 705 00:36:09,120 --> 00:36:13,600 Speaker 1: they're buying homes, they're starting their adult life. And you know, 706 00:36:13,680 --> 00:36:15,879 Speaker 1: it's interesting, as we all know, all of our kids 707 00:36:15,920 --> 00:36:19,920 Speaker 1: are different, and that's okay. You know, one of our sons, 708 00:36:19,960 --> 00:36:22,719 Speaker 1: they they want me to be their financial advisor. He 709 00:36:22,760 --> 00:36:25,200 Speaker 1: and his wife are very diligent about it. They have 710 00:36:25,320 --> 00:36:28,759 Speaker 1: regular meetings. You got another kid who does not want 711 00:36:28,800 --> 00:36:32,600 Speaker 1: to talk to dad about the money, you know, and 712 00:36:32,840 --> 00:36:35,239 Speaker 1: maybe they're worried I'm gonna make comments or you know 713 00:36:35,280 --> 00:36:38,000 Speaker 1: what have you. We've all been there. But here here's 714 00:36:38,000 --> 00:36:40,400 Speaker 1: where I put a stake in the ground, is I 715 00:36:40,440 --> 00:36:43,360 Speaker 1: want to make sure all of my kids at least 716 00:36:43,480 --> 00:36:47,520 Speaker 1: have a financial advisor where they're building a financial plan 717 00:36:47,640 --> 00:36:51,799 Speaker 1: and they're learning how to budget and handle money. And 718 00:36:51,840 --> 00:36:53,960 Speaker 1: if they because if they don't do that in their 719 00:36:54,000 --> 00:36:56,440 Speaker 1: twenties and thirties, and my wife and I have not 720 00:36:56,520 --> 00:36:59,839 Speaker 1: talked to them about what they might inherit someday, but 721 00:36:59,880 --> 00:37:01,719 Speaker 1: I want to make sure, you know, even if that 722 00:37:01,880 --> 00:37:05,080 Speaker 1: number is zero, I want to make sure that they're 723 00:37:05,120 --> 00:37:10,000 Speaker 1: prepared to be responsible citizens handling their money. And then 724 00:37:10,040 --> 00:37:12,839 Speaker 1: if they're fortunate enough or blessed to have some money 725 00:37:13,920 --> 00:37:17,160 Speaker 1: fall into their lap here maybe in their late sixties, 726 00:37:17,600 --> 00:37:20,000 Speaker 1: you know, that's all the more reason to have a 727 00:37:20,040 --> 00:37:22,840 Speaker 1: financial plan in place and be on the road to 728 00:37:22,880 --> 00:37:26,239 Speaker 1: being financially responsible. And Brian, I don't know about you, 729 00:37:26,280 --> 00:37:29,160 Speaker 1: but I find all too often this is just a 730 00:37:29,239 --> 00:37:33,000 Speaker 1: topic that gets ignored. You know, within families, it's almost 731 00:37:33,040 --> 00:37:36,640 Speaker 1: a taboo thing to even talk about money. And I 732 00:37:36,680 --> 00:37:40,759 Speaker 1: think that's unfortunately unfortunately, especially when we see people that 733 00:37:40,800 --> 00:37:44,480 Speaker 1: have worked decades to build a fairly large net worth 734 00:37:45,000 --> 00:37:47,000 Speaker 1: and then kind of leave it all the chance after 735 00:37:47,040 --> 00:37:49,520 Speaker 1: they die on whether the money's just going to evaporate 736 00:37:50,000 --> 00:37:52,520 Speaker 1: because the people weren't prepared to handle it. 737 00:37:52,600 --> 00:37:54,920 Speaker 2: Yeah, and I think this thing's something I've been thinking 738 00:37:54,920 --> 00:37:56,680 Speaker 2: about a lot lately, because I have a lot of 739 00:37:56,680 --> 00:37:58,600 Speaker 2: situations where it has occurred to me that the people 740 00:37:58,640 --> 00:38:01,160 Speaker 2: I'm talking to, the ones with the wealth, are a 741 00:38:01,200 --> 00:38:03,480 Speaker 2: little surprised by what they've built. As a matter of fact, 742 00:38:03,520 --> 00:38:05,600 Speaker 2: this is just about every meeting I have. People look 743 00:38:05,600 --> 00:38:07,480 Speaker 2: at their net worth and what they've managed to build, 744 00:38:07,480 --> 00:38:09,719 Speaker 2: and their retirement accounts and so forth, and they seem 745 00:38:09,719 --> 00:38:13,080 Speaker 2: a little bewildered. And what I've realized over the last 746 00:38:13,239 --> 00:38:16,000 Speaker 2: several years is that they were raised by people who 747 00:38:16,000 --> 00:38:20,040 Speaker 2: did not have that situation, because that prior generation didn't 748 00:38:20,040 --> 00:38:22,280 Speaker 2: build money in the stock market. They worked toward pensions 749 00:38:22,320 --> 00:38:24,040 Speaker 2: and so forth. And of course we never talk about 750 00:38:24,080 --> 00:38:26,360 Speaker 2: money in this country anyway, so nobody ever talked about anything. 751 00:38:26,480 --> 00:38:28,640 Speaker 2: But now you've got two groups of people who grew 752 00:38:28,680 --> 00:38:31,839 Speaker 2: up in very different environments. So yes, talk to your kids. 753 00:38:31,840 --> 00:38:33,960 Speaker 2: Talk to your kids about how you built it, how 754 00:38:34,000 --> 00:38:35,719 Speaker 2: you got it where it is, and how they can 755 00:38:35,760 --> 00:38:37,920 Speaker 2: follow your path too, so that they make the right 756 00:38:37,920 --> 00:38:39,720 Speaker 2: decisions early on in their lives. 757 00:38:40,800 --> 00:38:43,120 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 758 00:38:43,200 --> 00:38:46,520 Speaker 1: presented by all Worth Financial on fifty five KARC, the 759 00:38:47,040 --> 00:38:47,560 Speaker 1: talk station