Winning in Retirement

Choices in Retirement Plans

• Akers Financial Group

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Brian Akers and his son Noah, both financial advisors at Akers Financial Group, discuss the importance of retirement planning. They emphasize starting early, such as contributing to a 401(k) at age 21, to benefit from compounding. They explain the differences between pre-tax and Roth contributions, noting that Roth is better for younger individuals due to its tax-free growth. They also discuss the significance of maximizing employer matches and the potential to contribute to multiple plans. Additionally, they highlight the importance of understanding withdrawal rules, such as the age 59.5 penalty and the age 55 rule for certain plans.

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 Noah AKERS, financial advisor from AKERS Financial Group. Good morning, Noah. Good morning, Dad. How are you, Dad? You call me Dad. All right, so Noah is my son. Noah AKERS is my son, and he's older son. He's like

Noah Akers:

the only son.

BRIAN AKERS:

So we do have a show today that's called Important Retirement Plan Choices. That's one of the specialties that Noah has as a financial advisor here at AKERS Financial Group. He's been with AKERS Financial Group for 11 years officially, but he did clean the trash of the offices back when he was four.

Noah Akers:

Yeah, I remember that, and it was some dirty work. I

BRIAN AKERS:

know you're billing me for that time still, but we're still.. we're not going to pay you for that.

Noah Akers:

Could it contribute to my retirement plan at that age? Unfortunately,

BRIAN AKERS:

correct. Absolutely. Today is a show about retirement plan, and so what we're trying to do here is

this:

we're going to explain important choices that are out there, and we want you to understand that retirement - your retirement is something that's going to be your responsibility, with the help of a coach, the help of a financial advisor. So, understanding important, important retirement plan choices is all the show is going to be about, and so no, we try our best to explain things, and then offer people to call to ask questions, so we can try to help them wherever they may be to understand what they have, where they're working, or what they might not have, and what to do next.

Noah Akers:

I feel like a lot of what we have to do is convince people to do what's best for themselves, and that can be very difficult, telling them, like, oh, maybe I can't take as much income, I'm skipping a little head right now, I can't take as much income now, but in the future I will have that for me then, and so we really want to help people prepare for their future as well, take care of what's happening on right now, it's very important.

BRIAN AKERS:

All right, so let's talk about people. Get a job, and then at a certain age, usually 21 they're offered a retirement plan at the work at work, where they're whatever they're doing for their job. Not all companies offer retirement plans, so they could do some of it on their own, but the idea we're gonna cover first would be through your work. That sounds good.

Noah Akers:

Yeah, yeah, yeah. You definitely want to. Usually, they'll give you a spiral bound piece of paper stack, and they'll tell you, like, welcome, you're allowed to enroll into your data, your 401 k, your 450 7b and you're allowed to start saving for retirement. And when you're 21 what's the last thing you're thinking about?

BRIAN AKERS:

Retirement is three lifetimes away. Yeah,

Noah Akers:

like I've got plenty of years, I'm just trying to build my career, I'm trying to see if I like it right this career, but it's important to start putting that money away now because of compounding and just letting it grow, grow, grow, and so you have to have that mentality of what's life going to be like for me in 40 years.

BRIAN AKERS:

One of the amazing things of math, of compounding of investments, is that if you put that money into a retirement plan between, in your 20s, you have to, you would not have to put in anywhere near as much in the 30s. On

Noah Akers:

the

BRIAN AKERS:

missing your 20s is a big deal. So, getting somebody started early is very, very important.

Noah Akers:

I would love to hear, do you remember your first retirement plan at one of your first career jobs that you had?

BRIAN AKERS:

I was 401 k, and I was 21 at that time, and there was a match, so I did the match right away.

Noah Akers:

Good,

BRIAN AKERS:

the I did a regular investment account, just trying to save money in my personal name.

Noah Akers:

Yeah,

BRIAN AKERS:

that was something I did before I, before I ever bought a house, ran down college. So, yeah, I really try to learn to save right away. That's, I've been doing this since I was 19, though. That you just talked about was it's in your name, like this retirement is yours, and you get to carry it from job to job. Yeah, and it's my money. The hard part is that it's, it's expensive money. If you ever need it prior to 59 and a half, you got to pay taxes and a penalty. So, if we do this idea of putting money into a retirement plan pre-taxed, then you have to pay penalties and all this stuff to get out, and there's a lot of rules you got to understand. I know. Can you explain pre-tax and how that works?

Noah Akers:

Yeah, pre-tax is when you're not taking that income in that year, you are instead of taking the money from your employer, you're then kicking it into a retirement account, like a traditional IRA or traditional 401 k, those kind of things, and you're kicking the tax down the field, you can access that money early if you hit that penalty, and you also have to pay ordinary tax, ordinary income tax on that money. If you were to try to draw it out early, we usually recommend it's best to let that grow, grow, grow, because you're not realizing that income that year. That's what pre-tax is, realizing it later when.

BRIAN AKERS:

We withdraw it right, so there's a lot of rules out here on retirement plans, and we're going to try to give you general ideas, but understanding that a financial advisor can guide you into what's best in your exact situation. Our answer is going to be a multiple buckets of money approach, rather than let's fill 100% pre-tax. One of the biggest mistakes we find is someone who's done pre-tax their entire career, they invested in stocks and they had multiple doubles, and they're in that two to $4 million pre-tax retirement account, and all sudden retirement, we're trying to figure out how to pull that out without paying all this extra tax, because the concept in the 19 early 1980s when ERISA came out and created contributory plans, which allowed for 401 ks, which took instead of pensions, it put the benefit, put the benefit from the employer onto the employee to save, and then that the idea was you save money now and you save it pre tax, and then when you retire, you're gonna be the lower tax bracket,

Noah Akers:

I know in many cultures their retirement plan is their family, right? But now that people are living longer and longer, do you, do you want to live with your kids for 30 years in retirement? Most people don't want to.

BRIAN AKERS:

I did my 20 some years with my kids. Yeah, you did. I would say that a lot, lot of people still do. Some people move their parents in later in life just because they have to those finances. One of the things about retirement planning, and why we need to save money, and the idea of the pre-tax, pre-tax is paying tax and taking a deduction now, paying tax later. And one of the premises that I don't like is that we assume we'll be in a lower tax bracket later versus now. I believe that that is a false assumption in this environment that we're in.

Noah Akers:

The

BRIAN AKERS:

tax law changes over the last few years have created a tax bracket that I think is going to be like the low bar for tax brackets as we see the future as a country has to address debt and everything else down the road, where we could see tax brackets go up some point in time. They are permanent, permanent under the tax law, so it will take an act of Congress. So, I think they might be more creative, adding extra fees and things like that for different people, like they did under the Affordable Care Act. But I generally believe the idea of pre-tax should be the lower bracket might be in certain cases where you're making a lot of money now, and you're going to be okay with living off less. That might be a great time to do pre-tax. You might have a little window of time, you're gonna make a lot of money, and then lower later. Yeah, depends on your situation. If

Noah Akers:

I'm, if I'm in the seat of the government, and I'm thinking about tax money, and when I'm getting it from these employees all across America, the normal jobs will have an inflationary raise like each year, but if their money is getting tax deferred into a retirement account and that's growing like eight 910 11 12% each year, like which one's going to make you more money in the long term, government doesn't think long term. No, they want it now.

BRIAN AKERS:

That's why they came up the Roth in 1998 Yeah, 1998 was actually a design when Bill Clinton was president and Newt Gingrich ran Congress. And then they had a balanced budget because they did. Roth was one of the reasons that they actually got more tax money in. They actually had all kinds of plans to spread it out over four years, all these ideas of creating a Roth. Now, Roth is a big deal, and under the current law, Roth allows us to put money in after-tax, pay tax now and never again. And so the growth ends up being tax-free, and if we are going to be at the same bracket or or higher, I think the math is always Roth, but that's not grow tax free, but the word always should never be said, because our clients are all different, they're all individual unique fingerprint that we have to sit and talk to them about their situation, and that causes us some years to be Roth and some years not to be Roth, based on what they're doing.

Noah Akers:

Yeah, so when a client comes in and they ask, what should I do? Yeah, I think it's a really funny finance joke that they, the answer is always, it depends. It depends on what's going on, it depends on what you have already. And so I see what you just said, and what we're talking about is that there's the pre-tax, and we're talking about the Roth, and they're almost two ends of the spectrum. Do I want to pay tax now or do I want to pay tax later down the road,

BRIAN AKERS:

right? And I believe the younger we are, the better the Roth is, because if you're going to double, triple, quadruple your money over 40 years, making that tax-free sounds incredibly wonderful.

Noah Akers:

Yeah, the tax systems, like you said, it's been pretty good as of late, and the fact that they wrote it in to be permanent, of course, we always joke that permanent with the IRS is written in pencil, because it can be erased easily and law can be changed, and so I think it's very important to understand that where we are, even if you think you're paying a lot in taxes, it could always get worse.

BRIAN AKERS:

Yeah, absolutely, and it could be worse in many different ways. And then 2034 they're going to have a whole talk about what to do about social security. Are they going to make that means tested? Are they going to shrink benefits, change when you can get it? There's a lot of things going to change in the future. The idea is what to do right now. Now, what we're trying to do today is that we have a show called Important retirement plan choices. Our first topics are just the idea of you need to save your money, no one else is going to save for you. You need to save money and put aside. The next thing is you're not to decide between pre-tax or Roth. Then there's a concept called after-tax, just pure after tax, where you can put money in over and above your contribution limits, and it grows tax deferred. And then when you retire or move out of that company, you can actually take the after-tax contribution to a Roth, so that's something called Mega Roth, which is a lot of fun if you have extra money that you can save.

Noah Akers:

That's a really fun conversation when we have the right client that can do that, right? Because then you get to introduce Mega Roth, and oh, what is that? That sounds fantastical,

BRIAN AKERS:

fantastical,

Noah Akers:

fantastical, really. Yeah,

BRIAN AKERS:

don't do the mega Roth again like that. It was a low, like the

Noah Akers:

mega, you

BRIAN AKERS:

gotta go lower. I

Noah Akers:

don't have that deep of

BRIAN AKERS:

mega Roth. The idea there is you do a regular Roth contribution, but you could do more, and the more is an after-tax. Some companies offer this as a great thing when it comes to being the same for your long-term companies, only match your regular contribution, not after tax. They do match Roth. That match can be pre-taxed most of the time. And then there's ways under the 2026 law where you can actually make your employer piece the match be Roth, but that can be expensive. We're covering so many things today. You got to stay tuned throughout our time at AKERS Financial Group. We love working with you. We love helping you. What happens when it comes to retirement plan choices is we need to know what you're doing now. Where do you work? How does it work? What is your plan? Give us the documents, give us your benefits, give us all your choices, so we can then think that we are you, and think about these things, go through it, and make sure you're going to be okay. What we do at AKERS Financial Group is we take the ideas of what's out there and available to you and we turn it into financial planning. We love doing that. We love figuring out what's best for your situation. Now, if you're an owner of company, we help design that. If you work for people, we help you understand what your choices are. We don't try to sell you something. What we try to do is help you and guide you into what is best. So, at AKERS Financial Group, we welcome you to sit down and talk with us with a free financial planning review that would be about you. It's gonna be all about you and your financial situation. So, give us a call at 833 win, retire, schedule an in-person meeting with one of our team of advisors at 830 3w I N R E T I R E, that's 833-946-7384 or go to our website at AKERS Financial group.com Is there a way to maximize your savings into two contribution plans? Let's 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 BRIAN AKERS. Here with me today is Noah AKERS. We work with AKERS Financial Group. Yes, the AKERS start to rhyme after a while, because Noah is my son, and he's been a financial advisor for a few years here. He's been running my AKERS Financial Planning team and working with clients as a financial advisor, and become one of our experts in retirement plans, and also runs the tax company. And so, Noah has a lot of diverse areas after he finishes MBA, and as a me being the father, and I'm very, very proud of the abilities that you bring to our company. No,

Noah Akers:

thanks, Dad. Thanks for all right, we're done. We're done. That was nice. I was nice from hearing up a little bit.

BRIAN AKERS:

Oh yeah, that's okay. Sorry, people are listening to radio, driving on. Oh man, I should turn the channel right now. No, keep it on, because we're talking about important retirement plan choices, and you're going to hear us talk from a couple different perspectives. One is, and I've been doing this 39 years. 39 years is can be considered a long time. I love my job, I want to keep doing it. I have a son that got into the business, and he enjoys it, and he loves the idea of helping people achieve their goals. Is that fair to say? No.

Noah Akers:

Yes, very much. So, I like to be help people be a good steward of what they are given, right? And to help them know what decisions that they can make. In today's world, everybody tries to search up on the internet things, and what the internet can't tell you is what exactly what you need, what you need. They only can figure out what you're giving them, what you're prompting them,

BRIAN AKERS:

all the information out there, which is what we've had as software forever. And the idea is that that's just software, and we, we give that away for free a lot of times, this quick analysis stuff. But the idea is, what do you do with the information, the value add with financial planners? Says your unique financial fingerprint. This is what's going on in your life. These are your choices. This is what to do.

Noah Akers:

Yeah, we have to be inquisitive people. Absolutely, part of our job is just asking as many questions as we can come up with, and what's typical for people situations. We've seen so many situations that a lot of people will get from one career, one workplace, then they'll have their friend come over, because we helped them, right. And then we'll continue to work out different workplaces and teachers, government workers, all of that,

BRIAN AKERS:

right. And so, by seeing this through the years and helping people in different situations, we have lots of things to talk about. Now, this topic of the second quarter is an interesting thing. It's called, is there a way to maximize your savings into two contribution plans? So that's a sentence that says, "Wow, is there a way to fund two plans at once? And the answer is, "What? No, yes or no?

Noah Akers:

Yes. Yes, there is.

BRIAN AKERS:

For everyone,

Noah Akers:

just about. It depends on where you work, right? Depends on where you work. So, if your work already offers you like a 401 k, right, you can also do outside into like a brokerage account, like a Roth IRA or traditional IRA. Anyone, how much

BRIAN AKERS:

income you make,

Noah Akers:

and that's one way to, yes, have two

BRIAN AKERS:

plans, right? It

Noah Akers:

depends, as the joke I made in the first quarter was, and so you want, you can double dip the Roth, you can do both, both the regular Roth and your 401 k, and then just the Roth and the brokerage, and there's also income

BRIAN AKERS:

limit, there,

Noah Akers:

yeah, there is, and a contribution limit as well for both of them,

BRIAN AKERS:

but to have two plans at work, you really, that's only a certain job that could offer something where you could put in 24,000 or 24 five plus ketchup into two separate plans is a special situation.

Noah Akers:

Yeah, extra retirement savings, and so I've heard tell tales of those who will work in, so it's very popular in hospitals and teachers, right? They're able to do these four 3b and 457 457 BS as well, and so they can not double dip, but they can contribute to two separate plans, right? They can do a profit sharing plan and a defined contribution plan.

BRIAN AKERS:

A lot of, a lot of these plans don't have matches,

Noah Akers:

right,

BRIAN AKERS:

and so they wanted to provide ways of deferring. So, generally out there, the four 1k is usually a, you can do pre-tax, or most companies have after, or you put a Roth there, and now pretty much you have to, based on your size. The thing that happened over the years is they had a basically a deferred comp plan, deferred compensation plan that was designed, and that deferred compensation over the years is the 457 and that has different versions and flavors, where you defer money, and depending on the organization, a deferral could last for five years until you retire, bunch of different choices, depending what's going on.

Noah Akers:

Yeah, so there's a couple different ones, like you were just talking about, there's the 457 there's also a 401 a, a 401 k, a 403 B, and those are the popular ones.

BRIAN AKERS:

Why four? Where are these four? Yeah, these

Noah Akers:

are all about the tax code.

BRIAN AKERS:

So the actual tax code is 401 letter K,

Noah Akers:

right?

BRIAN AKERS:

And 401 A tells you about another one. Yeah, section 403 B does the nonprofit because covers the plans that are available there. Yeah, it's exciting

Noah Akers:

reading the IRS. They don't even have to add pictures to their code, because it's so interesting reading all these different rules. That's the first time you've heard that joke

BRIAN AKERS:

from you. It's the first time I heard it from you. I've said that joke years ago. It's pretty funny. The section, the section 400 of the IRS, if you ever need a good long sleep, it's a great thing to read, but what we try to do is this: you want to save money, and let's say you're 55 years old, you wake up in the morning, you know what, I want to retire. Oh, I didn't save enough yet. How much can I put away? And there are lots of different numbers out there, and you're going to find that your employer has a choice, and then the employer, through the benefit plan, you might have some other choices they just don't know about, and we try to find them out and get you saving more, and then we save. Can we save outside? Can we do non-deductible IRA and 8606 forms? Make sure we can. We do a backdoor Roth. What ideas can we come up with to help you save for retirement? Not that all your money needs to go into retirement. I really think you need multiple buckets of money, you need cash money, you need money set aside in taxable accounts that you can have access to any time in your life. So, someone's young and they're, let's say, to live with their parents, they're able to save 50% of their money, throw some to the future retirement Roth, and then put money in an account that can grow for the neck for the first house.

Noah Akers:

Yeah, it is really good to try to get that client in here early, because then we have so much room to grow with, and we can fill up our different buckets, we can fill up our tax deferred, our after-tax, and our taxable buckets. That way, in retirement, we have the option to pick and choose what tool we need for that year, because tax law, tax systems, uh. It's from the january 1 to december 31 right. So we have that whole year to play with your tax return, and as financial advisors, we have that ability to type in numbers, and then to see, okay, if we moved money like this, what will your tax situation look like now? What will it look like later with our projection softwares that we have, right? And so it's really great way to kind of play with your different options and see what could be the best one for that client.

BRIAN AKERS:

All right, so federal government has TSP, thrift savings plan to put money in, and then they match TSP. The last, some really last 10 years has really transformed the options and choices and made it a lot better plan. There's still limits on investing, limits on withdrawals, limits on charitable contributions, or charitable distributions. Yes, they could do

Noah Akers:

in-plan conversions now, right? To Roth,

BRIAN AKERS:

think that just happened.

Noah Akers:

Yeah, that was a recent change. Many

BRIAN AKERS:

times we have to guide them through their website, the employee

Noah Akers:

guiding them through that understanding, pre-tax, after-tax, Roth, also how to, how to allocate their funds, like so many times we see a client come in, they're like, oh, Brian, this account isn't growing at all, but this one's just growing far beyond what I ever thought it could do.

BRIAN AKERS:

Yep,

Noah Akers:

what do you think? You hear those words, what do you think immediately?

BRIAN AKERS:

I believe that if it's not growing, they're in an extremely diversified, most likely a target date plan that's geared towards a more current target date, which has a high piece in bonds, which have been flat to negative, while the S and p5 100, it's more than doubled, and so the difference

Noah Akers:

is the two.

BRIAN AKERS:

We, as a company, don't want to use a target date plan, we want to grow your money with the money in the market, for until you need to start slowing down. You don't need to slow down in your 20s. You don't need to have a 2% allocation to cash, 9% the bonds. You don't need that in your 20s, 30s, 40s. I think you need money in stock funds. So we use the idea of examine all fan, all the options inside of a plan, give us money in large cap, mid, small, give us a dash of international, not as high as target date right now. Target date, a lot of them are 35% international.

Noah Akers:

Yeah, yeah,

BRIAN AKERS:

I've always been a 16% cap based on the 80s studies on international diversification that adds value and lowers risk until you add too much of

Noah Akers:

it.

BRIAN AKERS:

I've never gone away from that as a premise in deciding how to allocate, and then I, if I have other things I can add in, I do. Most 401 k plans have zero things that are safe, zero things that are protected, zero options besides a money market, and so it's not a great place for me to keep money as clients retire, because I need 40, 50% 60% of their money with no downside to be able to provide the income,

Noah Akers:

yeah, that's some of the cons when we come to retirement plans, is that they have very limited investment options, like when you do, like a rollover, when someone retires. So, what do I do with this account? We can aggregate them all together into an IRA, and within the IRA, we have the investment opportunity to go into pretty much any stock, any mutual fund, any ETF that we want to buy.

BRIAN AKERS:

Yeah, I really believe there's two ways of looking at one is the existing money in the portfolio, how to manage that, and then the contributions. I believe contributions need to be a diversified stock, as much as stock as possible, 100% of it, if you can, where you're buying the volatility of the market, and we want the market to go down when we're contributing. We want to buy a lower market, which most people get really upset when it goes down, but if we're a 401 k tsp for 3b people, and we're putting money every paycheck, you don't want it high, you want to buy low. Bring it, bring it down, so I can buy it. Is the mindset, and so if we get clients to go from, oh, I don't want to lose a dime, my 401 k to the opposite of, hey, let it go down, so I can buy more low, and it all depends on age too, right? Yeah, if someone's a year away from retirement, five years away from retirement, we got to dial it back and not expose the whole portfolio, but I might change the portfolio to be 50% no risk, and then the contribution stays stock, because we're owning stock in retirement, we got to beat inflation over time.

Noah Akers:

I've had some people come in, and they're just curious to how do I maintain this growth, but also slow it down, so then I'm safe, and that's exactly what we're just talking about.

BRIAN AKERS:

There's lots of choices, and we have an hour long show to try to cover some of them. These are important retire plan choices that we've been talking about today, as we're talking about retirement plans through your work, retirement plans that are available, and really trying to get you guys to understand. Let's talk about it. Let's figure out what you have. What are your choices, and what is best for you and your family, and what are your goals? We think retirement plans are an incredible way to save money, and we just got to know the benefits. We do love matching. Matching is free money. We're going to talk about that more as we keep going on the show. At AKERS Financial, at 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 Lutherville, Farsill, clients all around the Mid-Atlantic region, 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 to schedule your free meeting with one of our team of advisors by calling 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. Are you ready to retire? Of course you are. Right? Are you financially independent now? Of course you are. Maybe let's talk about that 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.

BRIAN AKERS:

Welcome to Winning Retirement. This is the second half. I'm BRIAN AKERS, President and Founder of AKERS Financial Group, and here with me today is financial advisor Noah AKERS. No AKERS is the son of the founder, BRIAN AKERS, and we welcome you to the second half of the show. You good, Noah?

Noah Akers:

I'm doing well, founder. Thank you.

BRIAN AKERS:

When you were playing sports, I know you played college soccer. Were you an orange at halftime type of guy, or no fruit at all. It wasn't

Noah Akers:

surprisingly enough. That wasn't in college, maybe like eight years old, nine years old.

BRIAN AKERS:

In college, they don't feed you at half the best.

Noah Akers:

The best was orange slices, because then you can eat the pulp and then throw out, throw away the rinds into the nice, like right behind you in the soccer field, something. So,

BRIAN AKERS:

what was college? They just give you water and Gatorade, or whatever your sponsor was,

Noah Akers:

we weren't, we were d, so we weren't that special. Okay, we just had classic water, and you go in and talk about, was it good, was it bad, how should we do better? Yeah, yeah,

BRIAN AKERS:

all right, that sounds cool. All right, so when we're, when I bring up things like this, imagine that there's things throughout your life, there's moments in your life that are very important. One of those very important moments is when you begin to save money for your retirement. This show we're doing today is called Important Retirement Plan Choices. Many people just don't bother until a certain time of life, and they'll say, "Oh, I'll start now, and we give away free money, we give away opportunity, we give away our own future by not taking, making this a very important thing. Your retirement plan choices are extremely important to you. You need to understand what's available and how to use it, and that's the role of financial advisor, understanding what we can do to help you.

Noah Akers:

I do not want to throw away free money.

BRIAN AKERS:

Free money is a match, right? Yes. So, like an AKERS Financial Group, we have a match. Once you're here a year, you get a match. The match comes in. The way we designed it is, it's your match. There's no vesting period. What's a vesting period? No. Can you investing

Noah Akers:

period is if you're allowed to get this money from the employer? Sure, but they will limit when you get it, and so sometimes they'll use it to retain you as an employee, and so they'll say, well, if you stay here for three years, then you'll get this much percentage, or if you save for five years, you get all 100% but when it's a safe harbor plan, usually they require them to have at least a 3% match, then they have to be fully invested that first year when they start contributing,

BRIAN AKERS:

right,

Noah Akers:

and so that's a really good thing, that's what you want, that's really good for both the employer and the employee. The employer can get employees that come in and can start participating, and the employee can say, "Oh, I can start putting money away now. Right, that is fantastic.

BRIAN AKERS:

It's their money, and then the match comes later.

Noah Akers:

Yes.

BRIAN AKERS:

All right, so there's many choices out there. Financial planning, we like to see your tax returns, like see your plans, like see your plan choices, your group benefit plans, your benefits - all they offer that all your companies offer or not don't offer. So we can decide if we need to get it through the company or do we need to find it on our own. Now we'll cover a lot of numbers this quarter, because we're going to try to talk about this thing. Are you retirement ready? I joked about, are you ready to retire? Are you, are you financially independent now? Now, the thing is, is what if you're not? How can you save money? And also, if I retired early, when, how can I take money out? So, let's talk about those two basic topics. All right, so contributions, contributions are what now for people under age 50 for just basic 401 k. So,

Noah Akers:

if you have a 401 K for 2026 tax year and you're under 50 years old, so all those F's, then you can contribute up to $24,000 524 five,

BRIAN AKERS:

so a little bit of like if you get paid twice a month 1000 bucks a pay could go,

Noah Akers:

yeah, a lot of money, but

BRIAN AKERS:

that money set get set aside and put it, put away for your long-term future, and that can be a very good thing, especially down the road.

Noah Akers:

Yeah, and then the government understands that we're humans, we all like to procrastinate at least a little bit, and so they kind of give these catch-up contributions that you're allowed to do, and so if you're under 5020-four, five is your number, if you're. Over 50, then it goes up to the 32 five, and then there's a special, extra special provision for those ages 60 to 63

BRIAN AKERS:

and that's where they can put another 5200 away.

Noah Akers:

Yeah, it is really great. They can do 35 750 and that's so we started at 24 500 and then it ends with a 35 750 but once you turn 64 you no longer get that.

BRIAN AKERS:

Yeah, absolutely. So, what I, what I always look to look at people as their tax returns, I look at their W-2 to see in the previous years, did they max out? Not everyone maxes out like they think they do, they thought they maxed out, or they maxed out too early. We question if people get proper, proper allocation of matching when you max out too early in the year, because if you're contributing, a lot of companies, if you contribute money, they'll put the match in as you contribute. If you stop contributing, there's no match. So, in the math of it all, do you really get your fair match if you max out too early, should we spread out our contributions evenly throughout the year? A bunch of little tricks, you got to just make sure you're getting all the money you can.

Noah Akers:

Yeah, so if I'm a client and I'm coming to you and you're telling me that I really want to max out what I can contribute this year, how do I get that done? Who do I need to talk

BRIAN AKERS:

to? Oh, we got to go your website first. A lot of times the websites is the design. Now they push us there, they don't give us people to talk to anymore, but financial advisors are that people to talk to. We can go on the website with you, you can change your contributions there, you can escalate it once, 1% a year, which is not a bad option to choose. You can choose pre-tax or Roth, you can see how it's contributed, you can manage the money all inside the website, and we can help you with that, as long as you bring your own passwords, and you get us into it.

Noah Akers:

That's something that I really like about our financial firm, is that we don't have any robots. When you call in, you talk to a human, then they swing you over to a human that can answer your questions,

BRIAN AKERS:

and then we work through it. And sometimes you gotta schedule time in the meeting and get it done. It just takes time. We've been blessed with a lot of brilliant people, a lot of great people that can help our clients with where they are, guide them into good decisions, and make sure we have all the little things done properly. So we're talking about contributions, what you could put away. And last quarter we talked about you could have two plans and be able to max out two. You can also do outside and have your own Roth IRAs and other ways of putting money into IRAs and non-deductible IRAs and backdoor Roth, lots of shows we've had about those topics. Please go to our AKERS Financial group.com website on the radio podcast, you can see some of those topics written out there, so you can actually find out more and more. So, as financial advisors, our goal is to guide you into these decisions, so now people, as they want to retire early, everybody wants to talk about retiring early.

Noah Akers:

Yep,

BRIAN AKERS:

if you're saving a lot early on in life, you have a chance.

Noah Akers:

You do have a chance.

BRIAN AKERS:

Now, there's rules to when you can touch your money,

Noah Akers:

yeah,

BRIAN AKERS:

without an extra tax penalty. What are some of these rules?

Noah Akers:

Yeah, so there's the age 59 and a half in order to touch your traditional, I'm talking about the pre-tax money, you have to be 59 and a half in order to pull those funds out without an extra 10% penalty. Mind you, that money that you're taking out, that pre-tax money has to get taxed, so ordinary tax, right? And then a penalty on top of that,

BRIAN AKERS:

10% 5% but no state penalty,

Noah Akers:

no correct. Yeah, which is nice, not for our state, at least,

BRIAN AKERS:

right? In some states, like Pennsylvania, when you pull out an IRA at a certain age, it's tax-free,

Noah Akers:

right? Right, it works out very well as a Pennsylvania resident.

BRIAN AKERS:

Yeah, the joke right there is where if you save in Maryland, pre-tax, and you go up to Pennsylvania and pull it out at retirement, it's tax free, but then Pennsylvania taxes if you die, so before you pass away, you got to jump back to Maryland.

Noah Akers:

There's a game I've played that game with myself, calculating like exactly how much I can save by being in which state I want to have, but retirement plans, we're talking about, so age 59 and a half, and then we also have this age 55 rule.

BRIAN AKERS:

Age 57 explain that

Noah Akers:

the speed limit sign is what we joke about. So, age 55 is the rule where if you retire and you're allowed before the age of 4059, and a half, then you're allowed to, with like a 401 k or four 3b you're allowed to do a withdrawals at age 55 and not get that extra 10% penalty.

BRIAN AKERS:

So, one of the biggest mistakes of someone in their 50s is to have a financial rep investment person roll all their 401 k immediately to an IRA. IRAs, the rule is 59 and a half. There is some little catches we'll cover in a minute about, though, getting other money out of there, but if you keep money in your, if you retire early, a young age, before 55 and the 55 years old, you can start using money directly from the plan and take that money to live on and not have to pay a penalty, but it can't be rolled to an IRA first, has to be in the plan,

Noah Akers:

right, right, and then for those people. Have the 450 sevens that we're talking about in the first two quarters, they, when they retire or when they move out of working for that governmental entity or a non-government entity, right, they can take that money out without that 10% penalty

BRIAN AKERS:

at 52 or 55

Noah Akers:

yeah,

BRIAN AKERS:

both, yeah, depending on there's different qualifications for age limits, like 52 Just automatically, if you're thinking out there, you're retiring early, and you work for a government agency, and you have money in different types of plans. There's different rules. Don't just automatically say yes to a full rollover of your money, understanding there'll be a handcuff on the withdrawal till 59 and a half. So, make sure you know the rules, so you might work this out.

Noah Akers:

Yeah, we like to talk a lot about finance and gardening illustrations. Yeah, and so it's really good to have not all just one big shovel. You want the hand shovel, you want a hand brake, you want a tiller, you want to get all of the different tools for retirement comes around.

BRIAN AKERS:

And my son's growing up, he's got a tool shed now, and obviously he's learning.

Noah Akers:

Yeah, you got to have them all, yeah.

BRIAN AKERS:

Well, that's the cool thing about acquiring the your shed full. I did it through yard sales,

Noah Akers:

yep, yep,

BRIAN AKERS:

that was the best place to get all the tools that you need. Yeah, it's very

Noah Akers:

helpful, get them cheap, but sometimes almost broken.

BRIAN AKERS:

The neatest thing about this is that tools, investments are tools, retirement plans are all tools to help us retire, help us live our financial life. You need to understand what tools are available to you, how they work, and what applies to you, and what are you missing. That's what a financial advisor comes in and helps and guides you do, is helps you to understand what's going on. Financial independence is a great place to be when you're totally ready to retire. Financial independence, you work because you want to, not because you have to. By doing it that way, then we can say, hey, if you retire tomorrow, you can take money from these buckets. Understanding the buckets and building this wealth over time gives you all your choices. So, how to have choices in retirement is by making choices, wise choices, as you contribute.

Noah Akers:

Yeah, that's why it's great to come in and talk to us. If someone comes in and they say, I want to retire before 59 and a half, how can I have money to pull out? We can walk them through this. This plan is this rule. This plan does not have that rule.

BRIAN AKERS:

And we have 30 years, they have this couple of been clients since they turned 30, and they're like 37 with a goal of retiring 45 Yeah, so we've been building and guiding them, and where to save money, how to allocate across the board, so we have money from 45 to 5050, to 5555 to 60, and then have it all ready for them if they choose to retire.

Noah Akers:

Yeah, layering out those accounts, and then also those investments.

BRIAN AKERS:

All right, every quarter is flying by, Noah, but we thank everyone for listening to here in the third quarter. Remember that the best part of retirement is getting your time back. 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 in retirement. Go to our website at AKERS Financial group.com or scroll to the schedule a meeting section, and let us know you'd like to schedule your free consultation with one of our team of advisors right there, that's AKERS Financial group.com a k e r s financial group com, or call us at 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 akersfinancial group.com or call us at 833-946-7384 to start planning for your retirement now. When are you ready to have the retirement talk with a financial advisor? Let's start with that. When we return with more 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. Welcome to the fourth quarter. I'm BRIAN AKERS. Here with me today is Noah AKERS. We're both financial advisors with AKERS Financial Group. We have offices in Lutherville, Forest Hill. We work with clients all around the Mid-Atlantic region, all around the country, and even a few around the world. On today's show, it's called Important Retirement Plan Choices. We've been covering some of them, trying to talk through some ideas on the main ideas. You really, really need to understand what you're offered and make sure you know what you need to do by having an advisor. The fourth quarter here, we're going to point to our website at AKERS Financial group.com that's a K E R S Financial group.com The radio podcast tab, you can get the recordings right there on any of your, any of your favorite podcast locations. All right, Noah, you ready to go? Fourth quarter.

Noah Akers:

Yes, sir.

BRIAN AKERS:

Fourth quarter is winning time.

Noah Akers:

Yeah.

BRIAN AKERS:

Now, how do people win in retirement? And I believe the answer is answering the following question now. The lead

in questions is this:

When are you ready to have the retirement talk with a financial advisor?

Noah Akers:

I, I would love to answer this question.

BRIAN AKERS:

Go ahead, Noah. I think

Noah Akers:

I think I'm glad you said my full name there. That was helpful.

BRIAN AKERS:

I didn't add the middle name. No, you

Noah Akers:

didn't. That's only when I'm in trouble. When are you ready to have that retirement talk? I'm going to say always, no, always ready to. You're a

BRIAN AKERS:

young guy, why should you have a retirement talk?

Noah Akers:

It is so good to always be planning for the future, to always be thinking. I mean, you always have to plan for the day. Yeah, plan for the week. What are you doing next month? What are you doing a year from now? What are you doing 1020 30? You don't always know what you're going to do exactly, but it's good to start the thought process together. And so, when it talks about meeting with a financial advisor, it's getting someone who can, who's already walked with people who've started off working and then gotten to their pre-retirement years, so then started those conversations of what is retirement can look like for you, and then we have those who are in early retirement, middle, I think you call it the go-go, the slow go, and the no-go faces. We've got clients and all of that, so why not talk to someone who's seen all those? Right, I didn't think you would agree with me, so I was hoping

BRIAN AKERS:

we'd be able to go back and forth, I thought you're gonna pick an age, like ancient age 50, you know.

Noah Akers:

Oh yeah, maybe 3030. is pretty, pretty old.

BRIAN AKERS:

No, that's coming right up on you. All right, so, so the idea is this is when is it the right time to have a retirement talk? Now, the word retirement, it would be, is the retirement talk of actually retiring. That talk, of course, going to be as we get close and get you lined up, get you financially independent, so that you can be FIRE, which is basically being able to retire early. That's a great thing to be able to financially independent. Retire early is what FIRE stands for. But getting money organized, the only way to have money organized is via money saved. So, the retirement talk begins with a conversation with a financial advisor, no matter what age. So, Noah was right, of course, and that's when you start. You start yesterday.

Noah Akers:

I would love to start talking about, like, the concept of beginning to save. I think in my early childhood, the first time I realized, like, oh, I don't have the money for something now, but I have a desire that I know I'm gonna want to have. Yep, it was a Lego set,

BRIAN AKERS:

yeah, it

Noah Akers:

was Lego set, that of course, in today's prices of Legos, 120 bucks doesn't get you very far nowadays,

BRIAN AKERS:

yeah,

Noah Akers:

but it was a pretty good Lego set. I remember I had about $50 I knew that I had to work to get some money in order to do that, of course, when you're a kid working is birthdays and Christmas,

BRIAN AKERS:

right? So I had to wait till

Noah Akers:

birthdays and Christmas, and then I could get my Lego set,

BRIAN AKERS:

and I thought that was a very good trait. How old were you? Do you remember

Noah Akers:

seven, maybe?

BRIAN AKERS:

All right, so I thought it was a good trait that you, the concept of saving first, then buying.

Noah Akers:

Yeah,

BRIAN AKERS:

because I would say, as a financial advisor for the last 39 years, turning people's mindset into that, become a saver to then buy what you want, you're buying what you really want, and then you're happy with it. You still have that Lego set.

Noah Akers:

Yeah, I do. It's in your basement, actually, and

BRIAN AKERS:

it's set up for the next generation. It is g3 Yeah, do you remember your first like big thought process of, "Oh, I've got to save, or are you more of a "I'll spend a little bit. Oh my goodness. Well, there's two different ones. One is where I was actually making money at seven. I was producing paper puppets and selling them for a quarter.

Noah Akers:

Wow.

BRIAN AKERS:

And then by nine years old, we had a play set to buy in the backyard, and the idea was we had to contribute a certain amount of it to have before we allowed to buy it, because we wanted the big play set, and so I had to come up with ways to make money, chores with my grandmother, and whatever I could do, and we put it in a can until it filled up enough. Yeah, so that, that just a little simple thing of saving, not buying now. The American way is buying now with your credit card, pay off whenever you can. You end up paying 30, 40% more for the thing you bought than you should have, when you have cash, usually you get a discount, but the idea here is

this:

the retirement talk, and when you start saving, the idea is the mindset of savings has to begin the first dollar, the first dime. The actual retirement talk to retire needs to begin five to 10 years before you retire on how we're going to draw money, where it's going to come from. What do you want the retirement to look like, and what is your number? What do you want it to? What's your need going to be? I believe retirement is all about cash flow. Cash flow is money coming in, money going out, but life's about cash flow, money coming in, money coming out. So, the idea is spending beyond what you make is not going to work, won't work today. You can't spend your way into it. It might be the government way, but not the way we are, because we can't print the money.

Noah Akers:

Yeah, the financial planning term that they usually use is the wage replacement ratio, and so they talk about the math behind of what is your wage now and what is it going to be in the future. Of course, they are very much in the realm of everything's definitive, everything's gonna remain the same as it is,

BRIAN AKERS:

everything's a fixed cost, and we don't have any variability in life. No, and I tell you, life is all about variability. Yeah, you need, you need money just to be ready for variability. Yeah. All right, so what's the ratio of wage, the

Noah Akers:

wage replacement ratio I.

BRIAN AKERS:

Let me say another one. My idea is, hey, what are you bringing home right now exactly? Let's replace what you bring home. You're going to, because you're saving, you have taxes, you have social security. What you bring home is what you're trying to make it on. If you're able to save within that while you're working, I think you can make it in retirement, unless you really have a lot of large extra expenses. You want to travel multiple places. Our savers that are out of debt do extremely well in retirement. Our people that have lots of debt, they struggle making sure they pay their bills, they get, they struggle a lot of what they have bills after one passes away. I'm really concerned about retiring single, about 62% of Americans retire single, and how can they pay bills without having all the debt paid off, yeah. And so this whole concept of retirement planning and plan and important retirement plan choices is that you need to know your work, know how you can save money, because you're saving for your future self, nobody else. Only you can make sure there's money set aside for you. The government with the social security, it could change by 2034 Your pension at work is going to keep changing. They're going to offer different things if they're offering more matching. Typically, they're taking away pensions. Healthcare will cost more taxes. I think down the road could be higher and will be higher. We need to be ready for that with the way we plan, the way we do pre-tax, where we do Roth, those kind of things.

Noah Akers:

When you were talking about people coming in about 10 to 15 years before retirement, and that's when they begin to have the ideas of, oh, I need to, like, if I want to get out of work every single day that I'm beginning to get tired of, I need to have a plan. Yep, but for those 20 and 30 year olds, you were just talking about the Roth, and how great that is, but they have questions, at least those really forward thinkers, like I have no clue what I'm going to do at 40 to 50 years.

BRIAN AKERS:

It doesn't matter what you need money, right?

Noah Akers:

No, you're going to need money, and so might as well start setting some counts aside, let them grow,

BRIAN AKERS:

let the money double, triple, quadruple over those years, even more. It's amazing when we invest long term in the stock market, what's provided for us. It's a great way to set aside money for the future. All right, so today's show has been all about important retirement plan choices. We began the show by talking about pre-tax. What's pre-tax again, though?

Noah Akers:

Pre-tax is when we don't take the income this year, we kick it down the road.

BRIAN AKERS:

All right, so you take a deduction, yeah, and then that, and you put the money in, it grows tax deferred, but fully taxable as you retire. The common mistake there is, they put all their money that way, and so all of it's taxable in retirement. They end up being at a higher bracket because of successful investing. They end up with a different tax problem in retirement years, with Irma taxation on Medicare, and also RMDs. When they start, you have to start

Noah Akers:

drawing money out. Some lot of people come in with that. I got a letter from my iRacing. I have to have to take money out, and it's like, oh, this is a terrible year to start doing that. Well, if we have different buckets, we can kind of plan better for it.

BRIAN AKERS:

Yeah, so if you had to listen to the show and you're saying, well, what's the bottom line? The bottom line, let's diversify how we save money. Let's maximize our match at work. After you maximize your match at work? Hey, can you do a Roth IRA? Let's do it for you and your spouse. Let's max those out. Once we max those out, do we can we go back to another plan at work and save there, or should we build up a brokerage account on the side just to get money some tax-efficient portfolio building, which I think is a great idea. You do all this combination, all sudden we're reaching every goal you might have. So our show has been about the Roth, the pre-tax. Then we got into with four 1k's the whole 400 series, 450 743, B's. How to contribute to two plans, we got into a little bit into 59 and a half, 5552 all these ideas of when you can start withdrawing the money. The plan is your plan, because you are unique, you are an individual person with a certain career that you have, you've chosen your ability to save and your ability to let that money grow and allow it to be at risk will dictate how much that money can be for you in your future. So, what we want to recommend is this: a financial advisor alongside is

Noah Akers:

what it's really good to always have that financial advisor there to help you along this journey that you're trying to do, like you just said, lots of different account types, lots of different times to begin investing. Then you get into the conversations of what investments do I need for what purposes, and that's really where our financial planning takes root.

BRIAN AKERS:

When we know the purpose, you can dictate how to invest the money. It's really not a terrible thing.

Noah Akers:

Yeah, and they almost tell us how we can help them the best and let the money work for them instead of against them.

BRIAN AKERS:

Absolutely. So, the show today is going to be on our website at AKERS Financial group.com that's a K E R S Financial group.com and you can check out the podcast section and listen to the show. Any final words of advice for, let's call them younger, hardworking people, what would you say they need to do right now?

Noah Akers:

Yeah, you're talking about our website. They should go to that website and punch some numbers into the retirement calculator that we have on there, let them see what the, if they start contributing now, what that money will look like, and that's under resources, right? Yeah, and the resources tab of our website.

BRIAN AKERS:

All right, that sounds good. Also, getting started. Started giving us a call, is all a good thing now. No, I appreciate your advice for all of

Noah Akers:

us. Yeah, thanks for having me.

BRIAN AKERS:

I'm glad to have you here. No, this shows has gone by quickly. The show is about important retirement plan choices. Understanding what's there for you and how to take advantage of it is a very, very important thing that you need to do right now. So, 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 this 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 a meeting section, and let us know you'd like to schedule your free meeting. That's AKERS Financial group.com or you can call us at 833 win retire. That's 833 W 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 Arkadios Capital and SIPC and Finra member firm. Advisory services are provided through Arkadios Wealth. AKERS Financial Group and Arkadios do not share any common ownership. Neither Arkadios 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, and/or 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.