Winning in Retirement

Are You Retirement Ready?

• Akers Financial Group

Share episode

Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.

0:00 | 51:52
Unknown:

The following is a pre recorded show, welcome to winning in retirement with your host, Brian AKERS, Certified Financial Planner, professional and founder of AKERS Financial Group now helping you win in your retirement. Here's Brian AKERS,

BRIAN AKERS:

welcome to winning in retirement. I'm Brian AKERS, president and founder of AKERS Financial Group. Here with me today is Jeff AKERS, Vice President of AKERS Financial Group, and we look forward to our day together. And the opportunity to bring our show, our radio podcast, to you, the listener, winning in retirement, is put on by AKERS Financial Group. Our website's AKERS financial group.com and we welcome Jeff AKERS, Certified Financial Planner, professional, to the mic. Hello, Jeffrey, good morning, Brian. Thank you very much for being here today. My pleasure absolutely is your pleasure. I understand that, and everybody out there listening. Jeff AKERS has same last name. We have the same grandmother, different fathers and mothers, but our fathers are brothers, but we're not that'll do that. Yeah. And they call that cousins out there saying so with the show today, we have a very special topic, and that's one of our favorite topics. We've done for years. Oh yeah, and but we got to redo it, do it right? Oh yeah, all right. Are you retirement ready? That's a great question. So the question is, you're driving around, you'll be driving your vehicle, driving your lawnmower, you can be sitting in a chair, whatever's going on. Are you retirement ready? You might already be retired. You might say, Yep, I better be ready. I'm retired. Or you might say, I wish I really was better ready. I'm better prepared. So the idea in the show is we're gonna put together a lot of information, and we're gonna talk about the AKERS Financial Group and how we handle that question for people, and make sure that you've been thinking about this, because there's a lot going on, and what happens is sometimes the retirement isn't by our own choice, it's by the choice of others. That's true, and then we have to be ready for those kind of moments. And that's really one of the key things in the show is, are you retirement ready? Right?

Jeff Akers:

We want to prepare for retirement so that we can plan on when, but we also want to be ready in case retirement is thrown upon us.

BRIAN AKERS:

All right? So as financial planners, financial advisors, we actually calculate the numbers, we figure out the spreadsheets. We walk you through all the different choices and bringing retirement for you. That's the numbers. And then there's a second part, and you're very good at this, Jeff, what's the second part of the big decision?

Jeff Akers:

Yeah, the second part is, are you emotionally ready to retire? I'm not, Jeff, don't keep bringing this up. I know you are not. Yeah. Brian loves working. He's been at this for gosh, has it been 40 years now? No, 38 Okay, closing in on 40.

BRIAN AKERS:

Yeah, let's not round up. 38 seems like a long time, but it seems like a, like a, like a blur. It's so fast.

Jeff Akers:

But you've done a lot of stuff to help people get ready for retirement with the numbers and with it, the emotion of, okay, I can do this.

BRIAN AKERS:

Yeah, every decision involves two parts. Do the numbers work out, and then are you really ready? I mean, do you know what you want to do? Do you want to stop doing what you're doing, or do you want to keep doing it? Now we sometimes we get choices, and we call that financial independence, which is our first phase of retirement planning. Financial Independence is where you know you've saved, you know you put money away, you paid off all your debts, you got your budget organized, cash flow organized, and you're ready to go. Financial Independence is, I'm ready to go, but I want to work more anyway, right?

Jeff Akers:

That the numbers make up the financial independence. So that's, that's step one. Get the numbers right.

BRIAN AKERS:

It's a financial independence would be our goal for everybody. It's out there is be financially independent, so that you can have whatever fit comes at you in life, where you might be told your job ends or not right, or our division or our company or is moving to another one or changing, and then you have the opportunity your cards are there. Hey, I could do something different,

Jeff Akers:

right? Once you've got that financial independence in place. I've heard people say, All right, well, if my boss does this one more time to me, that's it. I'm done. And there's a freedom in knowing that that's true, that you can stop whenever you want to, because they need you more than you need them. That's financial independence.

BRIAN AKERS:

Yeah, you're making the decision to stay, and then you play the cards right the way whenever you want to, and be able to start retirement on your own terms. And that's the dream most people have, right? I'm not everybody gets that right, sometimes about two or three years earlier than you want it. You get to knock on the door or the can you come to my office? Type of comment, sometimes it comes with an offer, yeah, sometimes paperwork, sometimes not, right? Sometimes someone gets on TV and says something, and everyone has a different job, right?

Jeff Akers:

Sorry, yeah, that can happen. All kinds of things can happen, but we want to be ready with the numbers. All right, so

BRIAN AKERS:

let's, let's talk about this. So, all right, emotionally ready. I believe in retirement, you need to know what you're going to do. You. To have an idea. If you say I'm just quitting, what are you gonna do? I don't know. What's your next purpose? Make sure we're retiring to something, retiring to something that's going to motivate and get us, something to wake up and keep going on,

Jeff Akers:

right? I've, I've got a client that I worked with recently that, you know, it's time. She knows that she needs to retire. She the work is just she doesn't like it anymore, but she's done it her whole life, and so just the emotion of not doing it anymore, financially, she'll be fine. That won't be an issue at all. But she's right now planning on, what do I do next? You know that next step?

BRIAN AKERS:

All right, so what's that conversation like? What is her answer? Does she have an answer?

Jeff Akers:

She has an answer. There's things that she can do, volunteering, there's part time work that she can do right now. There's not really grandkids to take up her time, but that could be in the future. So right now, she's got her next step for the next year or two, but then she'll have to plan beyond that, just the next step. And then the next step, some people, they want to travel a bunch when they retire.

BRIAN AKERS:

And my favorite one on that was she retired on a Thursday and left for a six month combination cruise that she planned for two years on the Friday. And so we're having her sign stuff throughout the world as she was moving and getting her income set up, but she, I'm retired, and she's I'm traveling and I'm retired. Thursday I'm gone. On Friday, I'm leaving. That's the only one like that that I know that they were gone for six months like that. In my history of

Jeff Akers:

things, ideally, you give yourself a month to get ready for the trip. But well,

BRIAN AKERS:

sometimes in pensions nowadays, you don't know if you're gonna get that pension first month of retirement, right. Some of these estimates are done by some government agencies are saying in three to four months before you get your first check, and then they'll figure it out and make it great over the next couple

Jeff Akers:

Yeah. And it can go up and down for a while until they figure out the real number.

BRIAN AKERS:

And so the idea is this, you might need to figure out where you want to live. Are you gonna stay where you are? Do you have other ideas of second homes? Maybe you don't want second home. You just want to move somewhere else after retirement, right?

Jeff Akers:

Some people want to move somewhere warmer. Some people want to move somewhere with lower taxes. Most people end up wanting to be near grandkids if they have them, yeah.

BRIAN AKERS:

So the idea is planning that fits your goals, retirement planning, what we want is to have these talks prior to their retirement date. We've had a couple cases. Somebody calls, I just retired a couple weeks ago, and I'm ready to come in now, right? And we're like, Oh no, because we know when we see the papers and the numbers that they shouldn't have retired, right?

Jeff Akers:

But we at we show all of that, what it's going to do for them, and we ask them the most important question, I think, in retirement is, what do you spend? What are you going to spend?

BRIAN AKERS:

Cash flow. Cash flow is the name of game of retirement. It's not a number on top your head. They used to be commercials where they had numbers on top of people's heads. Well, that's my number. I gotta get to that number. The reality is, you got to know your monthly number. That's right. My trick this, I should have a drum roll for this one. But the trick in planning is this, what's your net bring home, pay now.

Jeff Akers:

Okay, so what are you bringing home after taxes, after right now?

BRIAN AKERS:

Are you happy with that? Do we want to add a layer of travel on top of like sliver or travel, whatever you call it, and then there's our number to begin with, and then we can do a deep dive into your expenses and things like that. Generally, over two years in retirement, you're going to come into with a general budget, and you'll feel the flow from the investments coming out, and you'll know that what room you have where it is. But what's fun is, we talk about, are you retirement ready? Is, does everything in your plan provide the same net income you have now? Yeah.

Jeff Akers:

And honestly, you mentioned before, it's not just a number off the top of your head. You know, there are plenty of folks that come and say, Well, I'm going to spend about and they give a number, and it's always lower than what they actually spend, right? And so we have to work through that and figure out what's the real number that you actually spend

BRIAN AKERS:

for years. I've said, if you walk in our doors with your mortgage paid off, we'll tell you, yes, you can retire in a reasonable time period, right? If you walk in with a mortgage, no matter what the reason it's not the same? It's not gonna be the same. Quick answer, right?

Jeff Akers:

There's gonna have to be some other work done in order to get to retirement ready?

BRIAN AKERS:

Yeah. I mean, if you have a two or $3,000 a month mortgage, all sudden you need to have half 1,750,000 be able to pay the tax and get the net to pay the mortgage. And so one of our advice is to be out of debt. It makes the retirement very simple, right?

Jeff Akers:

When your expenses are low, so you suddenly don't need a whole lot of income to cover your basic expenses, then you do what you want to do, right? You've got extra then to do the trips, do whatever you want, absolutely.

BRIAN AKERS:

So the idea is this, we are you retirement ready? Well, I don't know, right? We have to talk to you about it. Yeah, so it's not going to be a chart or a graph that we can run for free, that those are simple things and go anywhere, even the AI. You can run your numbers on AI nowadays. But the idea is to take the real, real numbers, the real, deep numbers that are going on on your life, wherever you have money, wherever you owe, whatever the goals are, and get ready to retire. One of my big deals is, what's in your cash? What are your next big expenses? Know, what all of them are, what's going to break soon have been the house 25 years? What's on that list, the roof, the who knows, HVAC, all kinds of things. And something

Jeff Akers:

that people tend to forget as they go into retirement is they're still going to need health insurance of some kind. And there's a cost to

BRIAN AKERS:

that. Yeah, I'd like to say your mortgage payment becomes your health insurance payment. There you go. Don't like that, but I say it, it's a fact of life. So the idea is this, are you retirement ready? And then we talk about just getting yourself ready, and then how you're thinking about it. And the idea is you just got to think and prepare and look at the numbers and then think about, what do you really want to retirement to be? And then write it down. And then, let's get started that that

Jeff Akers:

right? We are financial planners, and so we want to plan your financial future so that you can win in retirement.

BRIAN AKERS:

Yeah, so winning in retirement is probably two years in. They come in and they relax, and then they lean back in their chair like, this is good. I love it when they do that. And, yeah, and the idea is, what they worked hard for was to have the freedom, the ability to basically not have a agenda the next day. They have what they want to do. They have some general things they want to work on and try and volunteer at. But, but not rig. Not rigged.

Jeff Akers:

Rigid. Sorry, not rigid. Okay.

BRIAN AKERS:

English language fails me many times. Give me some numbers. I love the numbers. Oh man, the numbers out AKERS Financial Group. We're local. We're independent. We don't report to a big company on Wall Street. We report to you. We do have offices in farsill, Lutherville. We meet clients all around the mid Atlantic region, clients all around the country, and even a few around the world. It's so easy to begin winning in retirement, just give us a call and schedule your free meeting with one of our team of advisors by calling 833, win, retire. That's a three, 3w, I n, r, e, t, I R, E. We will give you a call on Monday to schedule your free in person meeting. Go to AKERS financial group.com or call us at 833-946-7384, to start planning for your retirement. Now, who will pay you in retirement? We will explain when we return

Unknown:

you're listening to a pre recorded show, welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS,

BRIAN AKERS:

welcome back to winning in retirement. I'm Brian AKERS, president and founder of AKERS Financial Group. Here with me today is Jeff AKERS. We are both certified financial planner professionals, and we're here from AKERS Financial Group. We serve our clients as financial advisors, and we enjoy doing a radio show podcast called winning in retirement. Oh yeah, we have a good time talking. And that's Jeff AKERS on a microphone. Jeff AKERS been with working with me for 25 years. Jeff, Wow, you're a young youngster back I was a youngster back then, that was very true. Now the show is called, Are you retirement ready? That's today's show. How are you retirement ready? Have you thought about it? Are you prepared to answer that question? Do you know that you're not? Do you think you are? Do you hope you are? Are you at least working towards it? Are you in retirement saying, I wish I was like, there's so many comments about, are you retirement ready? What we want, as advisors, for you to understand is, we want to have that conversation. The conversation is, are you retirement ready? Let's check everything out, and we'll come back and say the numbers look good. And then you got to figure out if, emotionally, you're ready to go, or if you're retired, how to be better prepared for what's going on,

Jeff Akers:

right? What's coming next. I think about the the idea that the old you is going to look back at the young you, and is he going to be happy with the young you, or is it going to be mad at the young you?

BRIAN AKERS:

Most recently this week, I was sitting down with a couple in their mid 50s, and we're talking about where they are, and they're like, oh, we'll never retire. This isn't going to work out. And I said, Well, tell me about your story. So we started listing assets, putting them into the planning software, and then told tell me about where you've worked. And then they tell me, Oh, they have a little pension from here, a little bit from there. And then let the Social Security estimates, yeah, let's put that in there. And then we look at the investments, and it's been a really good last 10 years for investments. So put it all together. And I said, Well, how much money think you're going to need? We plugged that in, and then we said, well, let's, let's just target 67 Okay, 67 is so security full retirement. Let's see how that works out. Ran the numbers, and I said, Well, can you live off of 10,000 a month? And they're like, We don't live off that now. Know? And I said, Well, I think we finding the range of that you can retire was sometimes 67 or maybe earlier, right? So we started with a first number, 67 and we're moving it down. So the concept was, are they retirement ready? They walked in thinking they're never going to retire. Right now, we're preparing to give them a ready. And then what's fun is when you pick a date with like, if like, let's say, as in the next few years, they pick 6265 you know, whatever age. And then we target that and go,

Jeff Akers:

yeah, there are folks that do a great job of saving and not having a lot of debt, but they don't really think about, how is this going to work in retirement? And so like the folks you're talking about, they're like, oh, we'll never retire. We'll have this income, and we'll just keep going. But then when we show them that, yes, retirement can be a reality, that age starts coming down, and they start getting excited about, okay, I can retire, and I can retire way sooner than I thought that I could.

BRIAN AKERS:

Yeah, I had a really, really nice couple that's incredible savers, and they are, like, still nervous, are they able to retire, right? And the reality was, they've saved so well, they're the multi, multi million dollar for 1k people. They create their own other problems, right? The other problems are this whole idea of taxation, yeah. So one of the thing is, who will pay you in retirement? So if you have put the money aside, you need to live off this money, you got to say, well, what is the effect of each account? So this, these, these clients have Roth IRAs, they have pre tax retirement. They have the matching. They have a little, they have Social Security, a little in pension. They might have pension, yeah. So they have all these pieces. So what I walked them through was the beginning, well, we're gonna turn things on. You get the pension right away, right? What's that number? Take taxes, take health care, and then they finally got all the way down. Almost half the money was gone after that. Here's your real number. Yeah, it looks all that 1500 was that number? Okay? Well, that's not enough, right? So where are we taking the rest of the money from now? In their case, because of being multi million dollar for 1k people, right? I have to have a Roth conversation, right? So what's the Roth conversation go like?

Jeff Akers:

Jeff? Well, the Roth conversation has to do with the idea that a traditional IRA, or traditional assets like that, have a required minimum distribution age, you're going to have to start taking money out of it and paying taxes. And so if we can take some money out of those traditional accounts, convert them to Roth now, while tax rates are lower and we can maximize a tax bracket now, then when we get to retirement or RMD age, then you're the tax you're going to pay then is less, because you've taken some money out of that multi million dollar for 1k right?

BRIAN AKERS:

So 2.5 million, you're at $100,000 RMD minimum, and that's if it doesn't grow the next five, eight years that they have,

Jeff Akers:

right? So you've got a lot of money that's going to come out, and you're going to pay tax on in the future. And right now, we have pretty good tax rates.

BRIAN AKERS:

It's permanent. One big, beautiful bill. It's permanent. It's permanent until they vote to change it. Exactly right? But you need a majority to vote to change it, so the brackets are permanent. Most everything else has got only three or four years out. That's right? Another sunset, but, but let me get back to my story. My story. My back to my story is this multi million dollar for 1k people, a little bit pension income. We need some cash. Do they draw Social Security now or wait? Because he's like, 66 years old, and I'm like, Well, let me give you two scenarios here. One is, if we wait till you're 70, it gives us three calendar years to do Roth conversions on a mega level. Okay. So what I meant by that was, here in 25 is your final year work, too much money being made. Roth conversions. Doesn't make sense, unless we want to max the 24 bracket, which is around 420 right before the deduction. Okay, so I calculate$400,000 they get convert for that, okay, if they draw Social Security, that's the income that comes in. And when our conversion ability would knock down by 30, 40,000 of the Social Security. And so if we don't take Social Security, if they don't need the money for a year, we can convert even more. Okay? And so in a between three years, I think we can get, if it's worth 2.5 now, we get half a million or more out of that pre tax and over to the

Jeff Akers:

Roth side, right? And that'll bring down that future required distribution. It does.

BRIAN AKERS:

The hardest part would be, is we have to have money to pay the bills every month, and paid a tax. So they did what we wanted, and that was, they saved cash, they saved Roth they saved pre tax. Okay? We had multiple buckets, right? Multiple choices. That's the dream world of retirement planning, is we get to move the buckets around. Yeah, so we went down and we're talking about Social Security, and I said, I think we always go January, right after you turn 69 you turn 70 that year, it's a little earlier than 70, but let's draw Social Security at 70. That's. Convert the three years before, and I didn't try to overwhelm them with it, but they, they said, that sounds like a really good plan for the next three years. Okay, and we had enough cash to find any dream, they have, any hope, anything they want to do. So that was

Jeff Akers:

great. They could pay the tax on the conversion, and still had cash available after correct

BRIAN AKERS:

and we can, we can use this 22 bracket, 24 bracket, and really settle things out pretty well in there and get them into a future estimate of 22% bracket for life was the concept, unless we outgrow with the investment side itself. You know, like you do real well investments on the pre tax, right? It runs out taxable later. It's better to have all your growth in the Roth and let that double and triple, yeah, because it doesn't hurt you later. That's more fun, all right. So that's, that's that kind of story, but the buckets Now, Jeff, tell me a story about someone that did not have the all the different places of money. It's all pre tax. That's their only source of retirement, a retirement plan, poor basically. Tell me a story about

Jeff Akers:

that, right? So they got a lot of money. That was in a 401, K, we roll that over to a traditional IRA. And now they're retired. They're like, I got all this money. It's like a million dollars in their 401, K, and they want to buy a car. So they go out over the weekend and they find the car that they like. And it was several years ago, so the car was $30,000

BRIAN AKERS:

that's a long time ago. Yeah, it was

Jeff Akers:

so they call and said, All right, I found a car. I need $30,000 we resigned the papers over the weekend, and I said, okay, in order to get the$30,000 we're gonna have to take a distribution of about 45 or$50,000 so we can pay the tax, and then we'll net you that$30,000 and there was this pause, just silence, like you mean my $30,000 car is going to cost 45 or 50? Yes, it is. And that's because you don't have all the buckets that Brian's talking about going into retirement. We want to have all three. We want to have some pre tax that you're going to pay tax later. We want to have some that was already taxed with the Roth, and you're not going to pay tax later. And we want to have some that's not either of those not qualified. It's just regular investment accounts that you could use before 59 and a half. And also, the taxes are different. You just you're paying tax on capital gains, dividends, interest, that kind of thing, and you can use that to buy the car without such a big tax hit.

BRIAN AKERS:

In that scenario, you have someone already living on retirement, and then the only way it can have money would come out of the IRA taxable, right? They didn't have the other two buckets. And so let's say they're in a 22% bracket, and then they want to take more out. You can go, maybe pass the bracket into the 24% so it's not like extra extra tax. It's just painful taxes. Yes, fair, right?

Jeff Akers:

That's fair. And they could be, well, the top of the 24 bracket is pretty high, but the next one up is 32 Yeah, you don't want to cross that threshold.

BRIAN AKERS:

That's if you want to add a client, want to give money to buy, the client their kid to buy a house they wanted, like 150 and I said, All right, by Team Tommy, paid the pad tax and work this all out. What's going to happen is you're gonna be in 32% bracket. So I did a three year plan on distribution, right? So mentally, I like three year as a combo, as a paying off a car, paying off a debt, trying to keep your brackets if you're stuck in a retirement all in one type thing, a pre

Jeff Akers:

tax right? So these are some of the advantages of seeing an advisor, because we can help you with where the money comes from. From a tax standpoint, the more money that you take out from investments that you're paying tax on, the higher social security, the more of your Social Security gets taxed, and potentially you end up paying more on Medicare as well, and that's stair stepped up, and it's like another tax on top. So we want to avoid those, or at least minimize those, as much as we can.

BRIAN AKERS:

We want to minimize the expense, but we want to maximize our bracket, right? Maximizing our bracket 12% 2224 helps us fit things underneath a certain bar, and then we're not jumping to another level and paying more tax than we ever should. So if we're maximizing our lifetime of withdrawals, maximizing our money, that means each and every year, we want to make sure we're paying a certain amount of tax. Like when someone says, Oh, I haven't paid tax in years. I'm like, is that really the best thing? Right? You're in your 60s, most likely you should be paying some tax. Let's pay something, right? Because if we don't pay in our 60s, we're going to pay in our 70s sooner or later. And that's called planning. And so what we've been talking about is this, how do you draw your money out? Financial Planning is where we sit down and talk about your exact situation where your money is, and then we figure out how we can help you. We love doing this. Planning for these kind of income, the streams and where to get the money from, is one of the favorite things that we do. We want you to be comfortable in your retirement. We want to guide you with decisions. We want to do the paperwork. We want to get the organization. We want to withhold. We want to send. The checks monthly or lump sum. We want it all taken care of by everybody here at AKERS Financial Group. So at AKERS Financial Group, we want you to know that we want you to win in your retirement years. So go ahead and give us a call at 833 win retire, call and schedule a free in person meeting with one of our team of advisors. That's 830 3w, I N, R e, t i r e, 833-946-7384. Or visit our website at AKERS, financial group.com What does milking a cow have to do with your retirement? We'll talk about that in the second half of winning in retirement,

Unknown:

you're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement. Once again. Here's Brian AKERS,

BRIAN AKERS:

indeed. Welcome back to winning in retirement. It's the second half of our winning in retirement radio podcast show put on by Brian and Jeff AKERS. Jeff AKERS a CERTIFIED FINANCIAL PLANNER professional and so am I,

Jeff Akers:

yep, you've been one for a long time. 1991 that's the second time I gave you a hard time.

BRIAN AKERS:

Hey, it's okay. I'm it's It's okay. I'm all right with that. All right. So are you retirement? Ready to name our show today? We have so many topics we like to do, but one of my favorites I got to bring out. Jeff, yeah, I know you're better prepared than I am, but we're going to talk about, what does milking a cow have to do with your retirement? But you have to admit that you grew up on a very small farm with a cow.

Jeff Akers:

Yes, we had a cow for a while, and we milked the

BRIAN AKERS:

Jew. Jeff AKERS, Milk the Cow.

Jeff Akers:

Yes, I was, I was very young, but yes,

BRIAN AKERS:

all right, so that would that started your love for milk.

Jeff Akers:

I do love Milk. Milk doesn't always love me, but that's beside the point.

BRIAN AKERS:

This is like, this is radio, Jeff. We don't want to talk about this kind of thing if we're talking about, alright, so you milked a cow. Yep, right now, I don't mean be mean to your cow, but if you had hamburgers at lunch from that same cow, Can you milk the cow the next day? Nope, the cow's gone. All right. So try to explain our milking the cow concept, and then I will correct you after that.

Jeff Akers:

Well, we have to understand here that Brian likes drawing pictures of cows, so you're going to need to come see him to see his picture. But the idea behind milking a cow is you take the milk, you use it, you live on it, and then you come back the next day and you milk the cow again. The cow's still there. It's still producing twice a milk. It can be twice a day. And so you've got things to live on, milk, cheese, ice cream, that's personal favorite. So there's always Butter. Butter. Yeah, so there's we're getting something from the cow, without harming the cow, without killing the

BRIAN AKERS:

cow. And so what does that mean for financial planning? It means that

Jeff Akers:

it's going to last a long time when we kill the cow. Well, okay, you know, the farmers will call and say, you don't kill a milk cow or eat it, whatever. But in our scenario, you kill the cow, you eat steak, but you're not getting any more milk, so you'll eat really good for a short period of time, but then you run out. And we don't want to be in a position where we've run out.

BRIAN AKERS:

That's when you're using principle on withdrawal too early in your lifetime. Yep. And that means that the cow has a life expectancy. Then, instead of being money for a lifetime, our plan is to do financial planning, take care of the worst case scenarios and invest for forever. Invest for a lifetime, right? And so the idea is, make that money last a lifetime. And that's why milking the cow, not killing the cow, is the key thing. So cows are things where we save our money. Your first job, everything you do in your career, you need to build some cows in your life, right name, some cash cows.

Jeff Akers:

So 401, K is a cash cow. That's a pretty easy one. You get a job, you get a match. Maximize the match, and sock some money away there, right on your own. Do a Roth IRA, maximize that. And then after that, save to some sort of non retirement account, especially when you're young, because if you want to retire before 59 and a half, you're going to have to have some money that's not in retirement plans in order to do it, because you'll pay up pay a penalty if you take money before 59 and a half and other things.

BRIAN AKERS:

Yeah. So every cow has different shapes, sizes, rules, yep. And so one of the things what planners do is we know all the types of cows that are out there. When we use the word cow, we're talking about investments. We're talking about insurance, we're talking about anything that can create money for you, pension, Social Security. We know the rules, how to apply it, how to draw, when to draw, and how to help

Jeff Akers:

you, right? And just so you know, Brian's been chomping at the bit to talk about milking cows this whole show. So he's really excited.

BRIAN AKERS:

I did not say it last quarter. I really wanted to. We're talking about, I'm drawing money out of 401, K's. And we had different buckets. I wanted to say buckets. I didn't do it. We held it off. Is as simple as this. You want to retire. Where's your money going to. Come from, and you're not quite sure where to draw from first, that's what that's what we figure out,

Jeff Akers:

right? And that's where we come in to help and say, Okay, right now, taxes are high, so let's not take it from a traditional IRA. Let's do it from a non retirement account. I usually like to let Roth IRAs go a long time and let it multiply over time so that that tax free benefits greater down the road. But you know, that could be an option, and then there might be a year where taxes are lower. Okay, let's maximize the tax bracket. Take money out of the traditional types of investments.

BRIAN AKERS:

Yeah. So the way it works is this, are you retirement Ready? Ready? And we figure it out. We say yes, yes, you are. Then we're going to ask about what money you want monthly? Do you want it to show up once a month, twice a month? What do you want,

Jeff Akers:

right? You said earlier in the show that you can plug numbers into any number of little calculators, but most of them say, all right, how much money do you have saved? But they're not asking, is it traditional IRA? Is it Roth IRA? Is it non retirement? Whatever, and that makes a huge difference in how long the money is going to last, because the amount you have to give away to Uncle Sam is money that you don't get to live on absolutely so we need to figure out which cow the money is going to come from.

BRIAN AKERS:

And so we create this income stream. This income stream, we like to basically make sure that some of it's going to last a lifetime, guaranteed. We like to make sure there's layers to it. We have different sources, different cows that we're milking and it's flowing, and then there's also a portion that's going to grow. The reason we want that extra portion to grow is we want to be able to keep up with inflation over time. Keeping up with inflation over time is the true real rate of return. It's truly what's going to matter every 10 years, 12 years in your retired life, is, can you afford tomorrow, right?

Jeff Akers:

Yeah, the money that you're going to need to live on now and over the next couple of years, your biggest risk, or most significant risk, for that money, is market risk, because if you need the money, you don't want it to go down in value, and then you have to take a withdrawal from it. But over time, you get beyond 10 years, your biggest risk at that point is inflation. And so that's what Brian saying. You need something to keep up with inflation, he told me years ago, and I stole this from him because I liked it. But he said that our expiration date rubbed off when we were born, we don't know how long we have, so we want to plan like we're going to live forever when it comes to our investments, even though we know that we're not going to but we want to plan that way.

BRIAN AKERS:

I think my story was, we're not a milk jug. We don't have an expiration it must have, must have rubbed off when we were born. I think that was part of my joke a long time

Jeff Akers:

ago. Yeah, it was a while ago, but I liked it so well.

BRIAN AKERS:

The concept is, if we had math, like a you know you're going to expire a certain day, you know exactly how much money you take out now, it would mess with your mind. Yeah, I didn't want to know. So we don't want to know that answer. But what's the key thing in retirement planning, is making sure you have your money last a lifetime. Now, in reality, the the practical side of it is longevity risk. Longevity is how long might we live? And my thing is, let's add five years to that, right? If you think, if so, Security says 82 and 84 men, 82 women, 84 I say 90, right? And if the numbers work, at 90, we're gonna be fine. We'll be all right. If you say I'm going to 100 let's run the numbers at 100 Yeah, if you say 105 let's do that. That. It's a plan. It's your plan. We we don't have a cookie cutter already sitting on the shelf. We work together. Let's make it work.

Jeff Akers:

Life Insurance illustrations now go to 120 so the actuaries are looking at, Okay, what if you go to 120 because it's not impossible, correct? That's a long time.

BRIAN AKERS:

Yeah, our oldest client ever was 107 okay? She was doing poetry to 106 that was pretty awesome. Wow. So the idea of this wonderful retirement life, you could end up retired more than you ever

Jeff Akers:

worked, right? So, Milk the Cow, don't kill it, so that you've got money for those later you

BRIAN AKERS:

money's got to last a lifetime. That might I don't like eating the cow in your in your 60s, when you're 60 year old, right? When you retire, I want to live off the flow. Don't get too carried away and start chunking it out too fast.

Jeff Akers:

And that's where the planning comes in. If you're going to have some big expenses when you first retire, we got to save that money before you retire?

BRIAN AKERS:

Oh, I had to do the letter again, Jeff. Oh, you know what I mean by the letter. Tell me what you mean by the letter. All right, so you know, when someone's retired and they're taking too much out. Oh, and I had to write a letter saying it stop at this day if we need to slow down, right? I've ended up they were taking extra out every month beyond what we're already sending them. And I showed them every date they asked for more money,

Jeff Akers:

yeah. You, you might not have an expiration date. When your money was your cat, your cow has an expiration date, yeah?

BRIAN AKERS:

But what happens is, you, you take an extra draw once, oh, that was fun, and you do it again, and you do it again, all sudden. I. Oh, this is fun. It's like, free money. It becomes a habit. And so the reality is, you've turned a whole spigot on, the buckets gonna be empty in three years, and there's nothing like you're working, like, if that person is working part time, I have to keep working the rest of your life, right? And that's hard to do as you get older, the money has to work for you. The money has to be there if you're working part time your early years of retirement. Do you really need to touch your investments? If you saved a lot, you can if you say minimal, we need that to grow, right?

Jeff Akers:

It's got to grow over time, so that 10 years from now, you've still got money to live on.

BRIAN AKERS:

So your situation and an advisor will guide you into what you should be doing and how to pull money and not to pull money. We will tell you the truth, and you need to hear which is not fun for those that have not saved well, but for those that saved, well, we're gonna tell you the opposite, which is, go shopping. Congratulations. But that's a rare person that's not a normal American, a normal American, it's gonna live on Social Security only and not have any money saved. Yeah. But some of my favorite meetings or when people come in and they say, I really like to take this trip, but it costs this much money, I don't know if I can do it, and they've done a really good job saving, and I get to say, Go, do it, take pictures. And that's a wonderful thing, the plus side. But when people are listening to a radio show, some are listening hoping this to make a change in their life. And so what I want that change to be is you got to start now saving something to your future, right? If you're doing social security retirement only, that's a poverty level. That's not going to be something that's going to what you'll want to do. I believe Social Security is going to suffer to keep up with inflation over time, based on Medicare costs and other issues to the future. We need to know how to milk cows, how to take money, but you have to have the cow there if we don't save it now, there won't be a cow there,

Jeff Akers:

right? You have to save while you're working. We all have a certain pot of money that comes in every month. We need to carve some of that out that we save first

BRIAN AKERS:

lives. Live, live within your means now, and you'll be able to live within your means later. Right? To building good habits? Yes, and I wish every listener would make that a habit right now. Try your best to get things better off. Know where your money's going get started

Jeff Akers:

as a rule, Americans have a hard time with good habits.

BRIAN AKERS:

I wish I would say that talk is for any for the low income people, it's not it's for the high income, especially our high income people, will actually spend so much that we have to have the exact same talk because they want to live off half a million a year, and that they can't because we did not save enough to do half a year.

Jeff Akers:

They've got $2 million saved. Half a million is gone pretty

BRIAN AKERS:

quick. Yeah. So we want the best part of retirement to be where we get our time back, where we know where everything is handled and taken care of we want, where the time is, where you decide how to use it. Before retirement, your time is tied up with other commitments, you know, mainly your job. A lot of that goes away. In retirement, your time is now consumed by things that you want to do. It's so easy to begin winning retirement. Go to our website at AKERS, financial group.com, scroll to the schedule meeting section. Let us know you like to schedule a free meeting right there. That's a k, e, r, s, financial group.com, or you can call us at 833 win retire. That's 830 3w. I n, r, e, t, I R, E, we'll call you on Monday to schedule your free in person meeting. Quick decisions have long consequences. We'll talk about this and the fourth and final quarter of winning in retirement.

Unknown:

You're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS.

BRIAN AKERS:

Welcome back to winning in retirement. This show is put on by AKERS Financial Group. I'm Brian AKERS, and here with me today is Jeff AKERS. We're both certified financial planner professionals from AKERS Financial Group. That means we are financial advisors. We're here to advise you on your retirement, but it's general nature. On the radio, we ask you to call us and come in meet with one of our team of advisors to give us help us be able to give you the very best advice that fits your needs. Today we've been talking about, are you retirement ready? You can go to our website, at AKERS, financial group.com that's a k, e, r, s, financial group.com Check the radio podcast tab, and you can hear our past shows. Hear this again, and you can listen to it slowly, or speed us up. If you really want to enjoy speeding us up and hear the topics you need to hear, then give us a call to go ahead and set up that free time where we can talk about what we can do for you. Yeah. All right, Jeff, so are you retirement ready? That's a question everybody's got to think about. Yep, it's important, and our advice this quarter is going to be quick decisions have long consequences.

Jeff Akers:

Yes, some do go job. All right, so I'm just going to take the easy one, the low hanging fruit, sure, Social Security. If you take Social Security at 62 and you live to 90, then you did wrong. You did yourself wrong, and you can't change it. Once you take Social Security, you've got one year to change your mind and. It's not easy, because in that one year, you've got to pay back everything they paid you and then say, okay, I didn't really take it well, most people that took it at 62 don't have the money to pay it back, so now they're stuck with that for the rest of their life, a lower benefit because they took it early. So Social Security is one of those decisions that you make once and it lasts the rest of your life. And it's a huge decision. I forget the exact number now, but it's like$800,000 over the course of a lifetime. It's a big decision when you take it. So it's important to see someone to make sure you're doing the right thing at the right time.

BRIAN AKERS:

We have software where you can plug in your numbers and figure out a break even, right? The hard part with that is that's a nice little in the calculation, but there's so much more in that decision on when to draw Social Security,

Jeff Akers:

right? Oh, yeah, absolutely. Well, one thing is your health. If someone comes in and they've got some sort of terminal issue or something that's going to cut their life short, then we're more inclined to take Social Security early, right? But if someone says, Yeah, my parents both lived until their mid 90s, let's wait. Let's take it later. Yeah, we'll get a higher benefit.

BRIAN AKERS:

All right, so I got to cover things like pension choices, okay, so when we get ready to retire, there's these pension packages. And the packages might say lump sum, and it might say single life, yeah, maybe joint life, right? Might be joined with a pop off, pop up. Pop off, pop up, pop up. Well, it's pop off first, then pop up. What I'm saying is this, if, let's say you, you're the pension person, and your spouse is the other one. You take a penalty for adding your spouse now, if they pop off, then your benefit palettes are back up. So that's why I say it that way. That's terrible, but you pay up. You pay money for that. So what happens is this a quick decision. Is this, oh, I just saw I picked something on my pension. And we're like, what did you pick? Right? We've had cases where we could have told them that their medical condition is terrible and they really should choose joint life, but they come in already selecting single life in their pension. And we're like, what do we do now?

Jeff Akers:

Right? Your spouse is going to be left without when you die. Oh, I

BRIAN AKERS:

get 8% more. Like, that's nice, but your wife gets zero right for the rest of her life.

Jeff Akers:

You get 8% more for three years, and she's gonna live 20 past that.

BRIAN AKERS:

This is person is this is a couple. It was hard. I can't fix it right after that's done, I would tell you there's been three or four cases like that where we come in after the fact. This is what we did in one case, the husband had passed away already. So the very large pension lasted two years, and then was gone. We're talking a very large number and zero. And then the money was supposed to be for the kids. And I'm like, no, no, this money is for you now, right? Because that pension is gone, there is nothing else. There's no other cows to milk. You've got to live on this, right? And that was another advisor had said, choose single life. We got enough money. But then they all, they always assume that both spouses are going to live together the whole

Jeff Akers:

time. Oh, yeah, you talked about before software that you plug stuff into, if you plug in that, both spouses live the whole time, all the way to 90. Yeah, great. You took the single life. That's the most money you're going to get. But it's not taking into account what happens if that spouse dies before the other spouse the survivor and that that puts the survivor in a difficult position,

BRIAN AKERS:

right? So let's go with the concept. You go to somebody that sells investments, and you say, Should I take a lump sum or pension? What advice are they going to give? Are they going to really lean towards the pension like we

Jeff Akers:

do? Right? I can't promise that they're going to do the math, do the math, or planning. Care about anything other than, Oh, I can have this much under my management.

BRIAN AKERS:

Well, what they what they might say, is that, oh, you control the benefit to your kids. We can get close to that number on your own, right? If you don't need money, you can let it grow more. Those are all reasons to take a lump

Jeff Akers:

sum, right? But there are numbers to run to make sure which one is the best option,

BRIAN AKERS:

absolutely, and depending on the health care, and if you're not in the pension, do you still keep the health care? There's just different catches with every company. And you see, can't you can't just say this is a standard answer.

Jeff Akers:

And sometimes folks come in and say, Well, this is the company offering the pension, but I don't trust the company, right? I think there might be a problem there. Okay, well, that might be a reason to take a lump sum and you're not tied to them anymore.

BRIAN AKERS:

It goes pension benefit guarantee funds out there to provide a federal guarantee on pensions at a limit for the person that worked, not for the spouse.

Jeff Akers:

Yeah. So the personal you mentioned pop up before. My personal favorite is you take the joint 100% Survivor with a pop up. Because yes, you get a reduced amount from that single life number, but it's going to pay as long as either one of you is alive, and if your spouse passes away before you do, then it's going to pop up to that single life number for the rest of your life.

BRIAN AKERS:

And that's a standard thing on federal pensions that happens because they charge you of basically a cost every month for the spousal when, if that goes away, comes right back up, right comes back. So knowing these pensions from every company is basically planning, getting information, gathering it all

Jeff Akers:

together, right? And the default on a lot of pensions is a joint and 50% survivor, so you've got to take into account that. Okay, here's my number. This is fantastic, but if you die, your spouse is going to get half of that. Is that going to be enough? Do they have other resources to make up the difference?

BRIAN AKERS:

All right, how about this? One quick decision, long consequence, person. This is going to be not a client story. It's okay. It's, let's call it the one of their kids, okay, I'm covid. It's covid hit. They decided I can be remote. I'm selling a house, and we're going to be in a camper. We're gonna go around the country and be being a camper for the next few years. Okay, so, RV right? Fun Time, good time. A few years. The hard part is RVs are depreciating, right? And in that case, if you have a family and you a lot of kids, things could break, yeah, and your value would drop down very quickly. And they took all the money from the house to buy the or longer have real estate, which we love, real estate, right? We think owning real estate, and if you want to RV Life, keep your real estate, is the general answer to this, right? But a quick decision, a let's go on the road we can has a long consequence in that the fact that this RV, after three years, is done, and they need to do something else, and they got to basically start all over again. Oh, the house money. What was good? Equity was all used and driven away and

Jeff Akers:

gone. I thought you were going to say that he got the notice that he had to come back to the office.

BRIAN AKERS:

Well, he got that too, oh yeah. Then I'm supposed to help the parents try to help them come up with an answer to make it all work. Oh yeah. So that was a tough one, but generally, what happens in planning is this, I like real estate. I like, I like when you own real estate, I rather own real estate and never sell it unless you buy in another one. I'd like 1030, ones, tax free, exchange to more to other real estate, right? But if you get into something, or go to rental or go another direction, all sudden, you no longer have that asset. And real estate is an asset.

Jeff Akers:

It is an asset, and it's not being made anymore. No, there's land out there, and if you own a piece of it, then that's not changing. It's going to have a value.

BRIAN AKERS:

Yeah, you might not ever want to sell it, so it's hard to cash in, right? But if you need the money again, right? But the reality is, this is, we make decisions that might be, that might seem quick, and then all of a sudden it sounded good. And a few years later is like, Oh, I wish I didn't do that. The concept we want to get across is this, understand your core financial needs, understand the fundamentals of finance, and what you're doing with your money. Are you putting it all into a depreciating asset? Are you? Are you spending every dime you have? Are you going into debt every month? What's what's is happening here? And make sure you know, spending

Jeff Akers:

all your money on a depreciating asset. Some people just like to buy cars, and they just buy the next car and the next car and the next car, and it's like, drive a car for a while, save your payment.

BRIAN AKERS:

Jeff's not talking about the collectors, because collectors are different. That's more of a side business that. But we're talking about, we got to have the new car every two years, or you lease and got to get the new car every two years. The hard part there is, there's a magical way, if you don't spend the money, you can save the money,

Jeff Akers:

right? Yeah, what is that? A penny saved is a penny earned. Yeah, I heard that growing up. My eye. In this case, it's $50,000 saved is$50,000 earned.

BRIAN AKERS:

So the idea here, are you retirement ready? And then, as you're making these decisions, are you really retirement ready? Some of you might be losing your job right now, and you got to understand, are you retirement ready? Well, give us a call. Let's sit down and see, can you retire or do you need to go find another job?

Jeff Akers:

Right? Let's take a look at that. Yeah, and we've talked about some of these things, you know, making knee jerk reactions. Sometimes we see, oh, our neighbor did this, or our friend did that, and we're like, oh, I want to do that too well. Just because they did it doesn't mean it's right for

BRIAN AKERS:

you. What's their story? Right? Like, what, what is the circumstance they're putting themselves into that we don't know?

Jeff Akers:

Right? You see one part of it, you don't necessarily see the whole picture, so let's make sure that we look at your whole picture and do the right thing for you. It's like,

BRIAN AKERS:

if you go fishing, you caught the biggest fish ever, you know, talking about another eight hours that you got sick on the boat and all the other stuff. I like anything. I like telling those stories. And because I don't ever catch anything, I. But, but generally, the idea is this, retirement planning has to be your plan, your plan with an advisor that's looking at for your situation. That plan is something where you write down, you talk, you put it all together, then you implement the plan. You manage the money with your advisor, and they handle that money, and they take care of you from here to eternity, or at least

Jeff Akers:

for the rest of your life, yeah, and then your surviving spouse after that.

BRIAN AKERS:

All right, Jeff, thanks very much for a good show about Are you ready for retirement? Retirement ready. Truly, retirement ready. That's what we covered today. We do look forward to meeting with you. We want you to win in your retirement by taking advantage of the opportunity to begin planning with us at AKERS Financial Group to schedule your free meeting with one of our team of advisors. Go to our website at AKERS financial group.com scroll to the schedule meeting section and let us know you'd like to schedule your free meeting right there. That's AKERS financial group.com or you can call us at 833 wind retire, that's 830 3w. I n, r, e, t, I R, E, we'll give you a call on Monday to schedule a free in person meeting with one of our team of advisors. Start planning for your retirement now. Go to AKERS financial group.com or call us at 833-946-7384, thank you for listening. I'm Brian AKERS from AKERS Financial Group, and we want you to be winning in retirement.

Unknown:

You've been listening to winning in retirement with your host, Brian AKERS of AKERS Financial Group. AKERS Financial Group offers securities through arcadios capital, an SIPC and FINRA member firm. Advisory services are provided through arcadios wealth. AKERS Financial Group and arcadios do not share any common ownership. Neither arcadios nor AKERS Financial Group provides tax or legal advice. Advice given on winning in retirement is general in nature, and one should seek further advice from their financial advisor, broker, attorney andor tax accountant before investing, be sure to read each prospectus carefully to understand all the risks associated with each investment. Examples and scenarios shared are meant to be for illustrative purposes only past performance is not indicative of future results.