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