Whose Longevity Should You Be Concerned About? Episode 101

Welcome to this episode of Wisdom and Wealth. Have you ever worried about you or your spouses longevity? Have you ever been concerned that you'd outlive your money? Today I give some helpful reminders about longevity. I also discuss the coming "Gray wave" amongst advisors and how this affects our listeners.  

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JOSH KLOOZ, CFP®, MBA
WEALTH ADVISOR

Phone 281.719.0036
Text 281.699.8691
Fax 281.719.0156
jklooz@carsonwealth.com

1780 Hughes Landing | Suite 570
The Woodlands, TX 77380

Music by bensound.com

Transcript

Welcome, again to another wisdom and wealth podcast. As always, I'm Josh Klooz, the senior wealth planner for Carson wealth here in The Woodlands, Texas. 

So if you've spent any time around my kids, you may hear them say they've often heard me say that I aspire to be the coolest old dude they have ever met. The problem with that is they think that I'm talking about me today. But by that, I mean, I want to be as active as I possibly can, later in life, both mentally and physically willing. And I'm saying that, by way of introduction of today's podcast is going to be longevity. And I want to think about some of the things that we aren't thinking about, you know, when we think of longevity, we, we tend to think of our finances and our health. But you know, what about our relationships, and there's one in particular that I think we should probably dive into, but I want to go ahead and talk through the first one that comes up to my top of mind, and that is our health. So many people are concerned with their longevity. And, you know, ultimately, when they say that they're talking about, you know, their health being greater than their their financial resources, or outliving their money. And, as the case may be, those who worry about that the most typically had the least worry about, probably not in all cases, of course, but you get my point, I hope. And I'll be the first to admit to you that most of the time people underestimate how long they're going to live. In a recent study done with a Social Security Administration, they found that a couple who is both reached the age of 65, and neither of smoke, there's 75% chance that at least one of the couple in question is going to live to the age of 85. And they haven't won a 49% chance that one of them is going to live to the age of 90. Furthermore, there's a 20% chance that one of them will live the age of 95. And there is a 4% probability that if you are currently the ages at the age of 65, and you don't smoke, that you're going to live to 100. Think about that for a minute. changes the way you think about things, you know, maybe the expenses that you think are going to be there 30 years from now, 35 years from now. 

That's, that's a significant shift in just your mindset. And so the question that I often ask myself is, you know, hey, if I'm gonna have all this longevity, am I going to enjoy it? Right? What can I do today, that's going to take care of the body that I have been gifted with, that's going to help me enjoy those additional years that are really a blessing when you think about it. If you go on to human progress.org, or any of these other sites, and you realize just the mortality rates, the different things that plagued us, even 20 years ago, are very different today, and will continue to be different, most likely in the future. So I want to make sure that clients are planning for longer than they think they need to, so that they're pleasantly surprised. I want them to focus on their health, because what good is money if you can't enjoy the physical health to enjoy it, right? You don't have the mobility or the vitality that you want to have. It's one of the reasons why we encourage people to do a lot of their experiential, things that they have planned, you'll experience some of those experiential goals earlier in life than later. Because we're not promised tomorrow, we're not promised that the time itself, but we're also not promised the vitality that we have, right. 

So, you know, if you hang around me, for any period of time, you'll hear me maybe mentioned, Peter, Atia will come up at some point. And so it'll be a reference to, you know, intermittent fasting or things of those nature, things of that nature. But ultimately, it's all about trying to prepare myself or, you know, a future life as long as possible. And I want our clients to enjoy the things that they've earned as much as possible. 

So that covers your health. But one of the things that I think people don't take into consideration one of the things that I don't think they factor in when thinking about longevity is the person the longevity of the person sitting across the table with them at their financial review. Now, I know I may be hitting on a sore subject for some, but I wouldn't be doing my job if I didn't go there. So, studies have shown a recent JD Power study this is done actually into Doesn't it mean so not that recently, but it found that that time that 20% of financial advisors were over the age of 65. If you just wanted to go on to the certified financial planners website, and see the breakdown of CFP designations by age across the country, you would find that currently by age, it shows that 44% of us CFP holders are over the age of 50. 

You may think, Oh, 50, that's not that bad. Well, let's think about that in connection with a 35 year retirement, or even a 40 year retirement. Four years of independence means that you know, someone that is 50, or going to the, you know, the absolute most conservative estimate, is probably going to be looking to retire, you know, and when they're 60, or 65. Okay, maybe even 70. So, in the midpoint of your financial independence, your retirement, you're going to be working with a different advisor at some point. 

The question you have to be asking yourself is, is there a succession plan in place with who you are partnered with or potentially thinking of partnering with? And if there's not, that should probably give you a little bit of pause? There's so many things that go into into play there. And you want to make sure that, yes, we again, we're thinking of longevity, as if we plan this out, and we have those additional 10 or 15 years of time to figure that out. But what if there's no succession plan in place? And what if there is, you know, there's not time, you know, the hit by a bus imagery, if I get hit by a bus, I know that my clients are taking care of, you know, internally here within our Carson office locally, there's already a plan in place for that. 

But what if there's, there's not? What if you're, you know, putting the odds on favorite that whoever is going to take over your, your relationship will be whoever is, whoever is the first to knock on the branch managers door. What if it's somebody that you've never even met, ie, it's someone with another office that that has to come in. And again, it could work, it could be a good thing. But it's less than ideal. And there's no relational equity built up at that point in time. This might not be the right analogy, but it would be as if you were climbing training to climb Pikes Peak in Colorado and you train and you trained for that trek. And for that ascent up the summit, and, you are, say, a few miles into the ascent up. You know, that trail, he basically had, you know, they said, We're, we're going to change out guides, and we're going to have somebody else guide you up. And it doesn't mean that that person is not qualified, it doesn't mean that that person is not equipped to take you the rest of the way. But what does that do to your emotions? What does that do to your confidence level, it just shifts things ever so slightly. 

So I'm bringing this all up as a point of due diligence, that we as an industry are very top heavy. From a demographic perspective, there's going to be you've heard of all of the wealth that changes hands from one generation to the next. But what about the wealth that changes management from one hand to the next as that is another thing that doesn't get talked about enough. So I would encourage you to make sure that whoever you are partnered with, has openly talked to you about their succession strategy has openly shared with you what it is. And if they're not proactively making that a part of what they're bringing to the table, I've got to believe that that might not be the best of indications about their current planning process. 

So again, I want those who we work with, and those friends and neighbors that I have to enjoy their their life with as few unplanned speed bumps as they possibly can have, in the event that they do have those speed bumps, I want them to already be equipped with the resources necessary to meet those challenges. But this is this particular last point that I've mentioned with the longevity of the advisor community is definitely one that can be planned for and should be something that is top of mind for all of us going forward. Again, if you have any questions about today's conversation, please don't hesitate to reach out and we look forward to talking with you again in sometime in the future.