Winning in Retirement

Retirement Conversation

• Akers Financial Group

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Brian Akers and Nick Molite discuss retirement planning on their radio show. They emphasize the importance of understanding one's financial situation, using tools like E money software, and addressing concerns such as longevity, inflation, taxes, and market volatility. They highlight the significance of having a balanced portfolio, including safe investments like fixed annuities and Treasury bonds, and the need for regular portfolio reviews. They also discuss the impact of inflation on costs, such as Disney World tickets, and the importance of Roth conversions while tax rates are low. The goal is to create a tailored financial plan that ensures a comfortable retirement.

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 from AKERS Financial Group. I'm the president and founder of AKERS Financial Group, and today I have Nick Malini. He's a financial advisor from AKERS Financial Group. Welcome Nick. Hey, thanks, Brian. Good to be here. I'm glad to have you. I'm really glad that you're here to be able to talk about retirement. Nick and I have been talking about a lot of things, and over the years, what's happened is Nick is a retirement financial advisor at AKERS Financial Group. Him and I have been doing public seminars and talking to people about retirement, and then Nick does a lot of one on one conversations. And so what we wanted to do, Nick is just have a little talk and call it retirement Convo. So that's like, the cool way to say conversation, right? I guess so. Yeah. Have you ever used Convo in a sentence before, only in text, only in text on All right, so we're actually going over the radio airways of Convo, meeting conversation for those that aren't as cool as Nick, yeah, right. All right. So Nick, you've been on financial planning advice for like, 16 years. I think it's about Yeah, all right, and then I doubled that. I think I'm 32 plus 3437

Nick Molite:

It's only that. It's safe to say you have a few years of experience,

BRIAN AKERS:

yeah, but them, how do you say it? They all roll up, and you just learn a little bit more. The crazy thing about financial planning careers, the more you learn, the more you think you need to learn more. There's always more to learn.

Nick Molite:

It's fun, yeah? Well, and I feel like I always learn from my clients too, because no financial plan or no situation is the same. So every new client that I that I meet, I feel like I'm gaining more knowledge and more experience as well.

BRIAN AKERS:

So exactly right. So what we've been doing over the last few weeks, few months, is actually having public talks with club, a group of people, and then having individual conversations. And so the retirement con, though, is a very important thing. It's a retirement conversation. That conversation is where we cover different aspects, different points of view, where we begin where you are and prepare you for all that you may face as you get ready to retire. So when you're thinking about retirement, I don't really care what age you are, if you're just have that thought you got to prepare and get things ready. So what we want to do today is sort of have that conversation. Nick and I are going to have it. We're going to bring up what we think are big concerns. We're going to try to give you some of the solutions, and always know that you're you're welcome to give us a call at AKERS financial you go to our website, AKERS financial group.com just check us out there and and have that free initial conference, a conversation with us. All right, so retirement and conversations. What kind of questions do you get when you're talking to people just generally?

Nick Molite:

Well, I think the main question that I really get from clients that are that are really preparing for their retirement, and they haven't put in the work yet, yeah, is the main question is, am I going to be okay? Are we going to be okay? Are we going to satisfy our goals in retirement and be able to do what we want to do and not run out of money?

BRIAN AKERS:

Absolutely, absolutely. The hardest part is a lot of times them understanding what they do have, yeah, and then being able to quantify it. Or sometimes they've never looked at it all together, and we use E money software to provide that for them, right?

Nick Molite:

Nick, yeah, well, I think for these clients, right, they don't always see what we see, right? We do this every day, and we enjoy it, and we help clients build these plans, and oftentimes they can't see the big picture, right? And software like E money that helps us paint that picture for the client and customize it so they can understand it and bring it down to their specific level, their needs. Yeah.

BRIAN AKERS:

So what happens is, normally, when people call us and we have that initial conversation, we begin by talking about their situation, where they are now, and then we start gathering information that gathering of information really helps us understand how to answer your questions. But normally when we talk retirement, we got to talk about four basic things. One of them is what happens when you retire. So when that, when we're talking to people about that, they're going to basically stop getting paychecks right Nick they're going to start drawing money. So they go from accumulating money to withdrawing money, they have to generate their own income from the portfolio if they don't have pensions, or they got to elect the right pension. They got to go on Social Security and sign up for that. Then they got to protect this income to make it last a lifetime. So what are your thoughts when you're talking to people about all those concepts?

Nick Molite:

Well, there's, what I tell clients is, there's so many different things that that we have to consider when building their retirement plans and putting together a roadmap, and we can't adjust for all of the variables. There's just so many of them. But the longevity outliving your money, right? Inflation, the cost of goods continuing to rise, taxes, i. Which aren't going anywhere anytime soon, and clients ask about stock market volatility all the time. So with these seminars and these opportunities to get in front of groups of clients, those are some of the main pain points that we focus on, because they can make a big impact on successful or unsuccessful plan. Yeah.

BRIAN AKERS:

So when we have people that are saving their money and they built it, building, building. The ability to start drawing from it is a very important piece of this retirement conversation. But when I when I see people, when they come in, I always like to ask them, what is their main question? And a lot of times that always has to do with, are we ready? Yet we have enough? How do you answer that kind of question?

Nick Molite:

So, well, that's a, that's a loaded question, right? And I don't, I don't know yet. We need to, we need to get to know our clients, right? Yeah, in order to give them a confident response, I mean, it's like going to the doctor, right? You walk into the doctor's office, he's not going to be able to diagnose you right away, is he? You have to tell him a few things.

BRIAN AKERS:

It depends. Well, yeah, I guess the sad part is, in financial advice out there, people have a solution. There might be a one trick pony with one solution, and they're trying to push that solution on the person, no matter what size or whatever they're doing. Financial Planning dictates that we listen to them to find out where they are, what they have built and then really designed from there what is best for them. The hardest part with for retirement conversations is really understanding from both both point of views of the husband and wife, and listening to what they want and when they want it, and who wants to retire and who might not want to retire. And then I always like to know what's next, because I think it's very valuable to know what's next and retirement planning, so that they have a little bit of a plan on what they're going to be doing on Monday, at the Monday after retirement type thing.

Nick Molite:

What are you going to retire to? Yeah, that's a huge question, and you're right, Brian, it doesn't come down to just the money and cash flow. Comes down to your lifestyle, and what do you plan on doing, and your lifestyle is going to dictate how much money you're going

BRIAN AKERS:

to spend. Yeah, that. So the cash flow, I think, should, is a prior priority when it comes to calculating. Are we good enough, like number wise, but you're never going to be able to calculate every variable when it comes to retirement, but you want to have, do we meet our nut, our monthly bill? What do you call your monthly bill? You call it the nut, or you call something different, the burn rate. The burn rate, okay, it's not a bad one. I like burn rate. I'll go with that. So cash burn rate. A lot of companies don't know. They burn it quickly, so, but in retirement, what you don't want to do is to burn your cash too quickly. You want to have a flow that flow, sometimes you have to create it. And that's how we design withdrawals, and we create portfolios to just to give that income over time. But the idea is this, you're thinking about retirement, the conversation with the financial advisor, sometimes people are worried about the fees more than do they connect with that person, like, and they worry about, well, how much you're going to charge me? And then they're trying to relate the charging of the fee to actually, what's going on with the person themselves. Like, what do they want? What do they need? That kind of thing.

Nick Molite:

Well, you know, Brian, and I think that's more of a cost versus value statement, right? When you look at it and you say, Okay, this is the cost. But what am I getting from this? If clients are really focused on the cost and not the value, all right, of what you're getting when it comes to a financial plan and really what that does for you, you know you need to reconsider what the what the plan really can do for you.

BRIAN AKERS:

I like to say it this way. I like to say, we must add value to your life to earn a fee, if we're just doing a certain part of the job and managing money, that's going to be just like a normal fee and anywhere you invest your money. But for financial planners to charge a fee, financial advisors, we need to add value, and that value might be the fact that you can lean back and breathe and go. I'm retired. I feel good. I enjoy that. When a client comes in after retirement and they have their first on vacation trip after retirement, they come come in and they like relax, they lean back, then they know they're okay. That's a great place to be. The hardest part in a retirement conversation is giving people that vision of where they're going to be in time, and trying to tell them that it takes time to get there.

Nick Molite:

Well, with anything else, especially with a with a big life event, you know? I mean, I think it takes, it does take time, right? You need that real world application and go out and go on that vacation and go grocery shopping, go get your nails done, do the things that you want to do, and see how your plan stacks up with how your lifestyle is. And sooner or later, if your plan is financially sound, you can do the things that you want to do, and you'll be able to lean back. And I think you may see it too Brian, every time you see the client again and again. 10 quarterly or annually. Do they get a little bit more comfortable each time?

BRIAN AKERS:

Because I believe from the retirement day takes two years to where things are normal. Okay, so almost like retirement normal? Yeah. And then they make the comment, I don't know how I ever worked, right? Then I know they're good. When they say, I don't know how I ever worked, I know they're good. That means. They're active, they're busy, they're enjoying it. Settled in. Settled in. Now, some people, they are their job. If you describe who they are, it's their job. Like, what do you do? I'm a doctor, I'm a baseball player, and that's all they that's all they are. They don't have other hobbies, other things that's hard to fix for them, of course. I mean, we can't do that. We're financial planners. We do the numbers like weeks I explained we do the numbers. You handle the emotional side. We got to handle the financial side. We're hoping that the financial don't add to the emotional side. We're hoping that just the financial side is just our side of the job, the idea of what you do when you wake up each morning. Some people like the fact that it feels like a Saturday. Some people like the fact they can breathe and relax and don't have the pressures. All of those things lead to a good and long term retirement, especially if you find a way to stay healthy and be active and really do the things you might not been able to do while you're working.

Nick Molite:

No, of course, of course. And you know, money concerns, they take up a lot of headspace. So if you're uncertain, you know, just like the market doesn't like uncertainty, right? If you're uncertain about your success, your ability to win in retirement, and you're retired, you know you're going to spend your days worrying, and you're not going to be doing the things that you retired to do, right?

BRIAN AKERS:

Yeah, I had a guy when he soon as he retired, he charted the value of his investments every day in a notebook every day, and about two years in, he didn't even bring the notebook to the meeting. It was great. So I enjoyed that. Now, AKERS Financial Group we designed as a financial planning firm. 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 Forest Hill and Lutherville, clients all around mid Atlantic region, around the country and even a few around the world. It's so easy to begin winning in retirement. You just give us a call and schedule your free meeting with one of our team of advisors. You call 833 win retire. That's 830 3w. I n, r, e, t, I R, E, we'll 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. What was the price of the Disney World ticket in 1977 we'll talk about that 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 your host. Brian AKERS, president and founder of AKERS Financial Group. I'm a financial advisor with AKERS Financial Group, and also is Nick Malini. He's our co host with me today. Welcome to second quarter. Nick, thanks. Brian. You ready to go? Here? I am ready to go. All right, I got a hard question for you. As we're talking today, we're trying to come up with a show that's called the retirement Convo, the retirement conversation. So we've been doing public talks, and I'm doing individual talks with clients and really going through things and have retirement conversations with people about how to get them ready, and what we want to do here in this second quarter of the show is really talking about some important things, usually depressing things. But Nick's going to do that. I'll keep I'll keep the happy side. He gets to do the depressing stuff. But I think what I have to ask you, Nick is, this is what was the price of the Disney World ticket in 1977

Nick Molite:

so do you want me to take a guess, or should I just read off the sheet here?

BRIAN AKERS:

Well, let's go ahead and just read it off the sheet.

Nick Molite:

So well, back then it was, it was $6 for an adult day pass to Disney World.

BRIAN AKERS:

Yeah, I think I forgot what year at that? Don't think 71 they actually started. And what happened was they had, like fairgrounds, you'd have tickets. You'd buy tickets to ride each ride too, almost like what they're doing now, because what's, what's today's price? I think it's what 119 $119 that's just getting in the door, but getting in the door, and then they're charging for everything. Now they used to be free fast passes. Now they have something called lightning lanes. They charge you. It's almost like surge pricing. The prices are up and down every day, and you have to pay just to get into a line to make sure you can ride a ride.

Nick Molite:

Yeah, of course, it's like going to the movie theater, right? You pay a ticket to get in, but then you pay $20 for a medium sized popcorn,

BRIAN AKERS:

yeah, but I like some of those new movie theaters where you go and they give you all you can eat popcorn, but you don't want to leave the go get it. They're in a movie. They know that,

Nick Molite:

yeah, and they give you the all you can eat popcorn, so you go back for refills on your drinks too.

BRIAN AKERS:

Now, the funniest thing you said in the seminar recently was that if you think about the prices, the inflation and the cost of living. And if you think about water and Disney World, water is like six bucks, right?

Nick Molite:

Well, I say, yeah, what used to be a day pass in Disney World in 1977 now gets you basically a bottle of water.

BRIAN AKERS:

You can't even buy the little ice cream. I like, I like the Disney Mickey ice cream at cost, like 750 I think, or something. Oh, gosh, it's more than six bucks.

Nick Molite:

What about a What about a Dole Whip? Are you a fan of that's my wife's

BRIAN AKERS:

favorite dole I think that's you get a home equity loan for that one right now, but they're good, though, and get them in a few places now, different flavors, but they're good.

Nick Molite:

But I think that, I think the main thing, though, I mean, that's real, real world numbers right there, right? That's a pretty dramatic increase in the cost of something that is pretty widely used

BRIAN AKERS:

absolutely and so the importance of inflation for retirement is, we're going to retire, and what we want is a 2030, year retirement, right?

Nick Molite:

Yeah, of course. And I think, you know, yeah, exactly. So inflation, when it comes to financial planning is your the purchasing power of your dollar today is not going to be the same as a purchasing power of your dollar 25, 3040, years from now, and we need to show you that so again, much like we talked in the earlier segment about giving the clients perspective, allowing them to be able to see what Their plan looks like when we're adjusting for their dollars and they say, Hey, Nick I want 7000 $6,000 a month in retirement. Well, we're gonna have to increase that over time projection, right?

BRIAN AKERS:

Otherwise, yeah. Well, the some of the crazy things is that we had a lull of low inflation for a long time, 1520, years, so a lot of people weren't requiring more and more money. But I tell you, in the last six years, since some covid, the exact price, the insurance, the taxes, the real estate tax, the all the costs of regular bills, are squeezing people. And when I start out our conversation, so when you're retired and you come see us, first question is, is, how you doing? Second question is, is, how's your cash? Because I like to look at the bank accounts, and if they're they're checking, if it needs to be 20 or 30,000 not checking, but then their bank minimum, and they're below that. And I say, it sounds like you might, it looks like you might be a little short every month. And then they say, Oh yeah, we're a little short because everything's up. And so the idea of inflation, in reality of retirement is you got to track that, and you got to make sure you have enough money flowing in. Now I think there's lots of examples of inflation. I always like forever stamps. I think they're a great investment. Forever stamps, when they came out, I bought as many as we could and made sure we don't spill water on them. Nowadays, the stamp is how much?

Nick Molite:

Oh, gosh, so well nowadays is, I think it's about 78 cents, all right?

BRIAN AKERS:

And then back in 1977 a stamp was how much Nick go ahead and say it was 10 cents. 10 cents. Now you don't have to guess. You got the chart right. That's right in front of me. So, so what happens is that from 10 to 78 cents, that seems like a lot. 77 I'm not gonna be mean to my younger sister, who was born at 77 but that was a while ago. Oh, yeah, almost 50 years the next year. Yeah, 49 this year. Now, inflation is truly the cost of living, to be able to pay your bills, to pay your nut or have your burn rate, right? Keeping her, keeping you up.

Nick Molite:

Well, what I what I like to focus on as well, and I think this is important for a lot of our clients, especially in this this environment with different interest rates changing as well, is the cost of a home nationally, and how much that's gone up as well. The average cost of a home now is 380,000 right? And depending on where you live, you know what state that can it can buy a lot or not, not a whole lot. And compared back to 1975 cost of home was 38,000 Right, right? A lot of our listeners, a lot of our clients out there that are looking to either downsize or purchase a new home or or, you know, get into the owning their own real estate. You know that that prices has gone up a lot

BRIAN AKERS:

absolutely so younger people want to enter in with high interest rates. Makes it a lot more costly than just a couple years ago. The idea of cost of things one major piece of retirement. The second major piece is income taxes. Now, income taxes, you might say that last year's one big, beautiful Bill locked in rates for a longer period of time, which they officially did, but we do believe rates could go up, taxes could go up, right?

Nick Molite:

Yeah, absolutely. So, you know, you'd said something important, Brian, which was we saw inflation spike after covid. That was a major global event. So anytime in history that we've seen major global events, you know, war, wars, pandemics, depressions, things like that. What? What ultimately happens, right? Interest rates go up.

BRIAN AKERS:

Interest rates go up. People in. More money the government needs more money.

Nick Molite:

Costs of Goods go up. Yeah, so then the likelihood of taxes going down is right.

BRIAN AKERS:

So if we lock tax brackets and the idea that tax rates aren't going up, I believe that there will be a time when rates will go up. So this makes an important time in planning that these might be the lowest tax years we ever face right here in front of us, and it's important to prepare for that. And then our federal government has a lot of debt, about 38 point 5 trillion. But the was that the US debt clock, or you can track that if there's a like to know about that,

Nick Molite:

oh yeah, there's a there's a real world link that you can get on the US debt clock. And it is, it is always active.

BRIAN AKERS:

How about in retirement the volatility of the stock market? How do you explain downturns in the market to people?

Nick Molite:

Well, number one, they're inevitable. Yep, right. So you have to be prepared for it, emotionally and financially, I think definitely emotionally. But there's a couple of things, a don't risk something you have for something you don't need. That's one of my that's one of my lines. It's one of my Warren Buffett quotes from the seminar. And that's important when it comes to volatility, because we've seen the market spike and go up, but we've seen it drop pretty dramatically. And I think it's important that you understand how hard it is to climb back from a big drop.

BRIAN AKERS:

Yeah, I like the math that you explain. Go over that math,

Nick Molite:

yeah, I'll keep it pretty straightforward. So let's say, for example, you have a million dollars in a portfolio it's invested in, say, the s, p5, 100, and the market drops by 50% All right?

BRIAN AKERS:

So a million dollars minus 50 $500,000$500,000

Nick Molite:

so you wake up Monday morning and your accounts, you know, down 50% by the end of the day. That's that's a pretty tough, tough pill to swallow. Yeah, I don't

BRIAN AKERS:

believe that'll happen based on market. Market. Basically, they're different ways that they preserve the market over time, but it takes time. Last time the market dropped between oh eight and oh nine was 68% Yeah.

Nick Molite:

And during covid, I mean, the tech market dropped 38% close to 40. So it's it's there, but that was in a month. Yeah, it was a 22 I think it was about 22 trading days. So, yeah, yeah, right, right. So all right. So here we are now at half a million dollars. You're down 50% and next day, wake up. Good news. Market turns around. We're up another 50% Yeah, great, great. Back where you started. No, no.

BRIAN AKERS:

50% times 500,000 is only you at 750,000 Exactly. So you're like, only halfway back to

Nick Molite:

home, you're back to 750 so you have to, you take one giant step back. You have to take two really strong steps forward, 100% Yeah, you got to get 100% rate of return from the 50% right?

BRIAN AKERS:

I think back though 809, back, back when March, I think March 9 of 2009 was the low on the Dow Jones. And then it took till like October of 13, something like that, for the S, P and the Dow to get all the way back to where it was. And so sometimes people will quote, returns based on the down to the up. Look how good we did. But if you, if you fall into a hole like that, million goes a half a million, you try to get back to a million, takes you four or five years. What's your rate of return? The real rate returns zero, because you're just getting your your old money back. And so the hard part when this math of investing is when markets do a volatility. You want to invest in that. But as you get closer to retirement, you might want to do things a little different. You might want to be ready for the cost of living, be ready for taxes, be ready for volatility in the market. By the way you invest your money and that stuff we're gonna be talking about the second half of this show. We'll be covering a lot of different pieces. The key thing for anything that we talk about in retirement is you have a conversation about where you are. That's where you are right now. We talk about the concerns we have that we need to invest, we need to be in the stock market to be able to beat inflation over time, but not everything in the stock market. We got to balance ourselves out. We got to be ready for taxes by understanding and maybe doing Roth conversions early, if we can, so that we can have some tax free in our retirement years. The hardest part when it comes to just getting this all ready for your retirement years, is really, truly planning within what you need and what you want. At AKERS Financial Group, we really want to be your advisor, and what we want to do is sit down and talk with you and have a retirement conversation that's about you, and then we invest the money, and we do the planning, about you, not about us. That's all very, very important. The way you can reach us is going to our website, AKERS, financial group.com that's a k, e, r s, financial group.com or you can give us a call at a three three, win, retire. That's a three 3w, I n, r, e, t, I R, E, Will. Give you a call on Monday to schedule a free in person meeting you go to AKERS financial group.com, or call us at 833-946-7384, to start planning for your retirement now. Are taxes going up or down? We'll talk about this when we return in a moment.

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, indeed.

BRIAN AKERS:

Welcome back to winning in retirement. I'm Brian AKERS. I'm president, founder of AKERS Financial Group. Here with me today is financial advisor Nick palini. Both of us are from AKERS Financial Group. Our goal is to be a financial advisor for those that call upon us to sit down with them, go over their situation. We call that their financial fingerprint, and we have a conversation. That conversation is what this show is all about. Today. We're calling it the retirement Convo, the retirement conversation, where we talk about where you are now and what you need to do so that you can retire and stay retired. Now. This is second half of our show. And Nick Malini is a coach, mainly a soccer coach. Is that true?

Nick Molite:

True? Nick among other things, but yeah, predominantly soccer right now. All right,

BRIAN AKERS:

so soccer coach. So halftime? Are you a big time halftime speech guy, or do you just throw orange at them? What do you do at halftime with your teams?

Nick Molite:

I'm all about the motivational, motivational speech. You got to fire them up. It's all about

BRIAN AKERS:

energy, not about strategy or strategy or new setups in the soccer alignment,

Nick Molite:

a dash strategy, but it depends on where we are in the game. Yeah, right. Score time and score Exactly. Motivation, energy levels,

BRIAN AKERS:

all right, so imagine you're a coach, and you're coaching financial planning, just saying, and it's coaching retirement. So you're coaching you're having retirement conversation with people. What kind of motivation do you give people when it comes to retirement? I mean, how do you speak life into their retirement hopes and dreams. What kind of conversation do you have with them? That's a That's a loaded question. Yeah, that's what I wanted to do. Is Right? Yeah, I tell you ahead of time, but give you one where a coach you get to, you get to apply your coaching to your job.

Nick Molite:

Uh huh. Well, I think, like anything else, sports specific, financial planning, specific, if you help the client to visualize their goal and see the light at the end of the tunnel, if you will, or see the path, and then give them the tools and the motivation to get them there and then to guide them Right as a coach, we don't, you know, force anybody into anything. We guide and try to help enhance. So I think with these clients specifically, you know, with their financial fingerprints, they all have individual needs. And if we can help them paint that picture and say, Look, you can actually do these things, yeah, you know, and then you can do this. And then my favorite is when the clients find out that they're in a good spot, and they're actually the guard comes down a little bit, and they start thinking about some of the things that they really want to do.

BRIAN AKERS:

You know, one of my favorites was I went to Florida, a little south of Jacksonville. I pulled up my rental car to my clients new house in Florida. They had just moved in, and they opened up the door and they go, Welcome home, Brian, this is your new house. Really got me a house, you know, you got us a house. And it was, it was, it was an incredible moment of we worked together to accomplish their goal, and they were there, and I got to see it. It was just a great conversation, and I got that feels and all that stuff about reaching their goal and how important it is coaching people into retirement. So a retirement conversation like we're having on the show today is about getting you ready, wherever you are now, to what you need to do to be ready so you can retire and stay retired. Now we do talk taxes, inflation, all kinds of things. Now this quarter, we are talking about taxes, our taxes going up or down. And one of the things is the one big, beautiful Bill made the tax brackets flat, right Nick and so tax brackets are flat. So for now, we feel it's a good time to pay some tax. It's a good time to do Roth conversions, a good time to figure out how you're going to lay out their income for your retirement years so that you can pay the right amount of tax try to avoid Irma. What's Irma? Do you remember Irma? Income related, monthly adjustment amount the Medicare piece. Well, what's your comment about Little Miss Irma?

Nick Molite:

Just to simply put is, the more money that you make in retirement, the more costly your your medical health insurance or your medical coverage could be.

BRIAN AKERS:

It's means testing of Medicare, which and what that means is like use that the board means is that if you make, if you're married filing jointly and 2026, you basically make 220 or higher, you start to pay more premium than the regular premium of two or 240 it goes up based on income levels. And can increase really quickly, so you got to watch that.

Nick Molite:

Yeah, it's not necessarily a terrible thing, I know. Essentially, when it comes to planning, I guess a good problem to to have, not a

BRIAN AKERS:

bad problem. And to make money, and they have to pay tax on the money. But when you pay tax, and then they throw in some more fees and costs, it gets very painful. We always like to to reduce taxes as retired plan, right?

Nick Molite:

Well, yeah, if you want to be ideally, you're proactive and you're ahead of the game. But again, it's just like when clients have concerns about taxes, right? That means you have income, absolutely.

BRIAN AKERS:

So taxes, what? Nick just says that taxes can be a good thing means you have income, yeah, so it's not a terrible thing, right? All right. So now I want Tilly chain subjects on you, Nick, I want you to go through with us what the word sequence of returns is, and give us an example of how you explain it to people.

Nick Molite:

Yeah, okay, that's great. So sequence of returns, and this is, this is a slide, actually multiple slides, that I go through in our retirement seminars as well. And this paints a picture for your clients or for yourselves on drawing money out of your accounts in retirement, and how different times and market volatility can affect that. And essentially what we do is we have two hypothetical examples of two investors, Steve and John, and they basically both have the same situation. Steve has $500,000 John has $500,000 they both have the same withdrawal rate. They're both taking out $30,000 per year to supplement their income in retirement, and they're both hypothetically fully invested in the s, p5, 100. Now the reason why sequence of returns is important because it's the timing, it's when they took their money out. So essentially, John retires first in 1990 and he starts taking money out of his half a million dollar retirement account. He's withdrawing $30,000 per year, right? So if the market goes down, but we have

BRIAN AKERS:

questions, yeah, but half a million saying 30,000 right now, I don't really like that ratio. It's a 6% withdrawal rate. That's a little high. It is. But he was full market in this example, right? Yes, totally invested. So this happens a lot that some brokerage firms or they'll put you full, full in the market, and you just pull from the market, and you experience the market on your withdrawals. We would say, spend down. We're going to talk about why this might not be the right way to handle things. This. John s, p5, 100, 100% of the money all invested, drawing 6% out, 30,000 a year.

Nick Molite:

Go ahead. Yeah, exactly. And I should reiterate so neither of these gentlemen here have any type of income plan right? Didn't, lock in any gains. They didn't position any of this money for guaranteed income. They're really the market goes up, they're selling and taking money out. The market goes down. They're selling and taking money out because they need that consistent income. That's part of their retirement plan. They need that $30,000 so yeah, so for John the first 10 years, and we're hypothetically going back from 1990 to 1999 there were really only two bad years. The first year was down 6.6% 1990 1994 was down 1.5% so in this particular situation, and drawing at that rate, John ends up with $1.2 million at the end of 1999

BRIAN AKERS:

that was those 90s. The 90s are incredible with technology. And then then the money, I'm sort of 2000 that's when your example ends. That mark was at his peak. So I worked the numbers were, got great for John, right? That was Brother John, correct.

Nick Molite:

Okay, that's John. So yeah. So then here we are now, 10 years later, and Steve retires, and he's starting at a different decade. Okay? So again, same needs, though. He's taking 30,000 out. Yeah, he's invested exactly the same way. So he's still pretty aggressive.

BRIAN AKERS:

So fundamentally aggressive investing. And he's taking 6% withdrawal rate, which we disagree with on the beginning. What do you think is a good withdrawal rate? Four to five, depending how you invest your money, and if you have other sources, and if you're savings, if you're out of debt, all kinds of variables there. Sometimes I get them out of debt and we take a little bit of extra money out over a three year period. Really depends. But generally four to five would be more sustainable in your 60s, maybe a little higher in your 70s, and go for broken or 80s. Yeah.

Nick Molite:

Well, that's good. And I mean, at a lower withdrawal rate, the likelihood of you dipping into your investment basis, right? As opposed to, you know, living off the investment income, right? Right? The milking the cow, if you will, as you use all the time. Yeah, I like milking the cow, not eating the cow, yeah. Well, if you take too much out of your portfolio, there's no cow, you end up eating the cow, right?

BRIAN AKERS:

Yeah. So, so you have Steve, the second brother. He's fully in the market, just like John, because John was successful, correct? But he's in the 2000 2000 2010 so what happened to him?

Nick Molite:

Well, many of us know what happened in early 2000 market drop, the womp. Womp. So 2000 2001 2002 down. 10% down. 13% down. 23 Percent. Now, as we talked in the previous segment, if the market drops by 50% you need 100% return to come back. So if you're down and you don't need the money, you have to wait. But in this situation, we're down, but he needs the money, so he's selling anyway.

BRIAN AKERS:

So he's taking it down and then taking and then locking in the loss, selling and not getting the upside on the way back.

Nick Molite:

You're realizing, right? The loss, you're seeing it now. It's no longer a paper loss, because you're selling and taking the distribution, taking the income. So three back to back, down years, plus, he's taken $90,000

BRIAN AKERS:

out of his portfolio. Right? Where does he stand after that?

Nick Molite:

Well, in 2003 he's down to $263,000

BRIAN AKERS:

so almost half of what he started with, he had 100,000 that or 90,000 years, but he lost the rest in the market, because he was fully in the market and withdrawing, yeah, exactly.

Nick Molite:

I mean, 2002 was down 23% and he had 238,000 the very next year. He's up 26.4% and he's only at 263 Right, right. Again, that's just a that just really highlights how hard it is to climb back. And even in 2003 456, and seven, we have a good run. 26% return, 9% return, 3% return, 13% return, and 2007 he's down to 205,000 and then we hit another bad year, down 38.5% wonderful 2008 market crash, right?

BRIAN AKERS:

And so in that market crash towards the end of the decade, made the s and p5 100 negative for the decade, and negative for the decade, taking your sequence of returns, sequence of withdrawals led to them having how much money at the end $96,485 yeah. So that example is an example of sequence of returns on how the returns dictate what income you can draw. One of the things to learn from that is how you invest your money and how you withdraw. Both of them are extremely important now at AKERS Financial Group, will this year be the year you finally have a plan to achieve your financial freedom? Financial freedom can be achieved when you have a proper plan for retirement, a plan that is as unique as your fingerprint. We have helped hundreds of families in Maryland plan for for retirement, our goal is for you to have a plan that will allow you to have a true financial freedom. We designed that plan with you, monitor and adjust as needed. We are local. We are independent. We don't report to a big company, to Wall Street. We report to you our clients. We make we want you to make this year the year that you achieve your financial freedom. So give us a call at 833 when retire, and schedule an in person meeting with one of our team of advisors. That's 833-946-7384 or go to our website at AKERS financial group.com scroll down to the bottom of our homepage and request a meeting right there. So call 833 when retire, or go to our website AKERS financial.com is your portfolio designed for your retirement years? We'll talk about this 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. Welcome to the fourth quarter of winning retirement. I'm this is Brian AKERS here with me today is Nick Malini on fourth quarter is winning time and all good sports events and some winning time, but the four up in the air, and that means you got to make the plays to win. If you got the lead, you got to hold on. If you're behind, you got to make a comeback with height, with in basketball coaching, I do a lot of pressing. The idea is this, the same thing happens in retirement. Sometimes you have a retirement conversation with your financial advisor, and you might be behind in the fourth quarter, you might need to come back from behind. You might be ahead, might be okay. And so financial advisors can guide you home so that you can really get ready for your retirement years to make your money last a lifetime. So today's show is called retirement conversation, to have that coaching talk with a financial advisor, to sit down with you and talk about what can affect your retirement years like the lovely inflation and taxes and stock market volatility, longevity, how long we're going to live? How long does our money have to last? We've talked about that. We talked about so much this time. If you missed any of it, you go to our website at AKERS financial group.com that's AKERS financial group.com on that website, you can see the radio podcast. You click that button, and then what happens is you will actually be able to see all the shows that we've had over time, and you can listen right there, so go there if you missed anything today, and you can always give us a call at 833. Win retire to have a conversation with us or with our team of advisors about your situation. All right, in the fourth quarter, we're talking about portfolios that are designed for the retirement years. So Nick I got to welcome you back to fourth quarter and. Portfolios being designed for retirement years. When you think about that, what's some of your thoughts?

Nick Molite:

Well, in the spirit of gameplay, yeah, right, this is where you you design your playbook, right? You got to have the right plays. You got to you got to be able to make the right decisions. You got to have the right people in place, the right players, the right investments, right? To make everything come together. And fourth quarter is where you, you know, you leave it all out on the field, right? You put your best foot forward. And that's, that's really what we do with our clients, right? I mean, look at it from a retirement standpoint, right? You're getting ready to retire soon. You're, you're in your your your working fourth quarter, right? And you want to put all the right tools together, and you want to get that playbook designed right so you can, so you can be winning.

BRIAN AKERS:

Yeah, right, yeah. The winning part is where you feel like you know what's coming in, you know what you need, you know your numbers, and you know there's enough. I call it financial independence. Financial Independence is where we might be still working and truly know that we're okay. What we do is we do a review where we find out if you're retirement ready, is everything good, and then you design what you want to do on your retirement and how do you want to retire.

Nick Molite:

And portfolio review, I really enjoy this part of meeting with clients, because there's so many different ways that you can go about allocating your investments. I've seen so many clients. They'll get the paperwork when they're filling out their retirement plans for work, and they'll check the box that they're aggressive or conservative, and more often than not, they're put in some type of target date fund. A target date fund, for those who don't know, is something that starts off, you know, if you have many years, say it's a target date, say 2050 you start off very aggressive, and then it just gets more conservative as you get closer to that, that retirement date. But there's so many other options out there, and this is where we can look at our clients portfolios. And what I say is, I like to identify any inefficiencies that I may see you might be over invested in a certain area or sector, and it's important that we address it, we thoughtfully give it the attention that it needs, and we adjust if necessary. You can't, you know, it can't just be all run plays, right?

BRIAN AKERS:

Yeah, definitely be nice to have some good run plays, though. The idea, really, when it comes to this retirement is looking at, what are your offerings at your work? And a lot of times there's target date, and then there's some other funds, usually limited choices. You got to work on that. Now, the hard part is that the younger you are, you only have the choice of your company, and you might get a target date fund. And we're not a big plan a fan of target a funds when we think people should be aggressive and stay aggressive until the last few years, because generally, a target a fund does adjust with the assumption that lower risk is moving to bond funds. And what do you think of having bond funds as your solution for lowering your risk?

Nick Molite:

I think your safe money should be safe, right, right, avoiding any losses. Specifically when it comes to that's the money that you're going to be drawing or using as income.

BRIAN AKERS:

Yes, that makes the piece at the four, 1k is four, 3b, same TSP, these G funds, the stable value funds are the money markets. Those are the truly never lose. But what we've seen over the years is that whenever there's a big event on the stock market, there's always a big event on the bond market, and that causes losses in both categories. And so you experience bigger losses than you ever thought on the money that was supposed to be lower risk.

Nick Molite:

Well, was it 2022? Yep. Interest rates were skyrocketing and bond prices were

BRIAN AKERS:

going the opposite, like a seesaw. Interest rates go up. Your bond values go down. So bond funds do that. That's what happened in 22 and happened a bunch of different times, especially since, if you think about from 819, 80s until now, interest rates have been coming down, and so for 40 years, there's this bond fund would make total return, which was interest plus growth, because bonds were always making money because interest rates were going down. Now, in the short run here, we've seen a little bit going down, and we should see that throughout 2026 but the problem would be, is, what's next? Will rates start to move back up, and will lower risk, have more risk than we planned. And that's why we want people to really think about things that have low risk or no risk.

Nick Molite:

Yeah, absolutely. I mean, it's, it's all about understanding what, what risk reward is. You know, as my dad would always say, you know, is the juice worth the squeeze, right? And with bond, with yields being relatively low and volatility bringing your returns down, it's not really worth taking that type of risk. You're essentially going to lose on something that's supposed to be safe, and there's especially when there's all alternative options out there that can really give you much more value. And. And what just the bond

BRIAN AKERS:

fund can do, those are things that can protect your principal. Things that protect principal could be things provided through the bank that are FDIC insured. Could be provided through the US Treasury, treasury bonds, Treasury notes that are individually, individual bonds where you know the maturity dates. Or it could be things like fixed annuities that have guaranteed corporations around them, or fixed index that are tied to principal protection, but you have to commit certain level of time. So these are all things that could be protected where the downsides protect it, designing portfolios with those in mind and with also money in stock market. We need to stay in the stock market to beat inflation over time, but you don't want to have your money in the stock market that you need next week, correct? We believe you should be one year ahead with the money, the cash flow, since you already have that, that milk already squeezed out. So when the markets up, you take money out of the stock market. When markets down, you take money out of the fixed side, and then you build and take the withdrawals, keep, keep funding your buckets, so you have a good flow.

Nick Molite:

Yeah, well, each, each investment that you choose when it comes to making a retirement plan is essentially goals based, you know, every investment product or every investment choice that you make should have some reasoning behind it. This, this is, you know, this allocation, this portion is going to be fixed. You know, I had a client say to say to me once, Nick, I want return of my money for this portion, not return on my money.

BRIAN AKERS:

He was listening to Will Rogers 1930s that was a quote from Will Rogers 1930

Nick Molite:

Well, I mean, it really does a funny with a tone, though, right?

BRIAN AKERS:

Yeah, it's, I want return of my I don't need return on my money. Return of my money. That was right after the Great Depression and the big crash on the market, and the banks had no organization until 1940 and the FDIC was set up. So these are all things that people had to learn and live through. Design their retirement. We want your retirement to last a lifetime. We call that winning in retirement. The way to win is to know that your finances are in order so that you can go out and do as you like, and you can have the money to provide for you, the money that's going to be there to provide for the good days and the bad days. That's what the whole piece is all designed around. So so far, you've depressed us with things like inflation, about the Disney prices and how much they've gone up, talking about bottled water, how much that costs. We talked about taxes actually in a good spot right now, based on tax brackets and the one big, beautiful bill, but we do think rates will probably go up in the future. That gives us a time period now of conversions and paying some tax and trying to max out brackets is a nice thing to

Nick Molite:

do, yeah. Well, you see the opportunity, right? And that's where a good financial planner makes sense, right? Where you can be proactive and see the opportunity in what's going on in the whole market, in the tax brackets, where, if a client can take advantage of that and make that Roth conversion so that future them is in a better state than they currently are.

BRIAN AKERS:

Instead of minimizing your tax bracket, try to maximize the current bracket you're in. That can be done, usually later in the year, once you know about all your income, is a good piece to do when you talk about retirement. So this retirement conversation, it's usually a one on one with your financial advisor. And so what would happen be is you call AKERS Financial Group, you have a free meeting with them, with a financial advisor like Nick You go over their situation, you gather information, and then you start having this conversation about what they want it to be, right? What do they want to look like? Look like, right?

Nick Molite:

Oh, precisely. And as we call it, the financial fingerprint, and it's where we uncover the specifics of the client needs Sure, right? And that's how we can tailor that financial plan and customize it to their retirement. So having that conversation, getting very detail oriented with the specifics, having realistic understanding of how much you're going to spend, how much you're going to need in terms of income, adjusting or allotting for taxes, allotting for inflation. So we can map this out decades down the road, so you have an idea, so there's no unpleasant surprises, right? That's that's all that goes so amongst so many other things. But that's a lot of what goes into these one on one conversations.

BRIAN AKERS:

By building a base financial plan, getting everything covered so the worst case scenarios are taken away, you think and build a plan that'll last your lifetime, and then you handle with constant review, having one or two meetings a year with your advisor.

Nick Molite:

I like to think that the financial plan is a living, breathing document, if you will, because things change, and it's going to be there to adjust and to adapt as well. And if a major life event occurs that we weren't planning for, we can revert back to that plan and say, Okay, how does this impact us long term?

BRIAN AKERS:

And then we gather information and sort of almost start over again, sometimes just trying to reset what is needed as life changes.

Nick Molite:

It's a great benchmark. I'd rather have it and not need it than need it and not have it. Yeah.

BRIAN AKERS:

So this show's coming very quickly to an end. The retirement conversation is what we talked about today. This will be on our website at AKERS financial group.com you can check us out right there. Nick, thank you very, very much for a good show. I appreciate. Get it all pleasure to be here. Thanks, Brian, thanks for having me. No problem. 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 a 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 when retire. That's 830 3w, I N, R e, t, I R, E, we'll give you a call on Monday to schedule your 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 our kidios capital and 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.