Stop Worrying You're Retired!
Stop Worrying You're Retired from the Northstar Financial and Retirement Planning team spotlights financial opportunities and challenges you may encounter throughout your retirement journey. Heading the Northstar team is company founder George Fossing. More than two decades ago, George set out to put together a team of specialists to work with those retired or about to be. The Northstar team now includes Certified Financial Planner Zach Jenkins and CPA Travis Smith.
Stop Worrying You're Retired!
Navigating retirement in an uncertain market
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George Fossing and Zach Jenkins with Northstar Financial and Retirement Planning break down essential strategies for a secure retirement. This episode covers how to plan for a multi-decade retirement, why you should be cautious about current market valuations, the critical importance of long-term care planning, and practical tips to ensure your savings support the lifestyle you've earned.
For the next number, learn about the mental strategies to make the most of your retirement dollars and live the retirement life you've been waiting for. So let's get started. Stop worrying you're retired. Good morning and welcome to Stop Worrying You're Retired with the team from North Star Financial and Retirement Planning. We have a lot coming up on the show today. You can't predict what the stock market will do or when exactly, but is there a formula that might give us a clue? We'll dive into that. And we'll also discuss why more and more extended families are choosing to live under the same roof. Good morning, George and Zach.
SPEAKER_00Good morning, Cheryl.
SPEAKER_04Well, we have a lot to talk about. Where shall we begin?
SPEAKER_00Let's do the uh, I think what's the biggest concern or mistake that people uh seem to uh be making.
SPEAKER_04You know, I did see something on that from the president of wealth management at U.S. Bank, and he was asked about the biggest retirement mistake he's seeing people make. I wonder if it's the same one that you're seeing.
SPEAKER_00Well, I've been doing this for 30 years now, so yeah, what happens in 30 years is you have a timeline. The biggest thing it's uh what I've seen is especially amongst us men, Cheryl, is not thinking we're going to be retired that long or the length of retirement can last anywhere from 20 to 40 years. That's a long time. It's sure. I was looking at it this way, it's it's 20 to 40 years of unemployment. Okay. Well, like it's true. And making sure your money lasts so you can maintain your living style, right? And I think that's important. Uh we're all getting a dose of inflation nowadays. That's very real, the gas pumps and at the food store.
SPEAKER_03In a recent meeting that I had, the the husband, he's not in that great a shape.
SPEAKER_00Yeah.
SPEAKER_03But he's like, hey, my wife is in great shape. And you know, she actually does most of the financial stuff. She's kind of taken out the reins of that, you know, in their relationship. And and they both, you know, just point blank said, hey, he might not live as long, but she could live to see her early or mid-90s, you know, reasonably so. And this is something that I had read some time ago, just looking at some actuarial uh tables, this article I read stated that if a married couple, if uh both of them live to be 65 years old and are in average health, there's almost a 50% chance that one of them, or at least one of them, would live to see 91. And and that was some time ago that I read that. But a lot of times people retire at 65. You know why, Cheryl?
SPEAKER_04Because they get social security. Uh well, Medicare, not social security anymore. Because that could be 67, right?
SPEAKER_03Right. But so the big one there, as you mentioned, is Medicare. So they'll line it up with their health care costs. You know, it's a good time to retire, you know, health care won't be too expensive. Medicare, you know, great health care. But if you retire at 65, and let's just say you started working at 21 or 22, and you live to be 90 or 95, almost a third of your life is spent retired, and you almost would have been retired almost as long as you worked. You retired something.
SPEAKER_00I think the the engaging part with this for folks to consider is you know the old saying, you want to spend your last nickel and your last breath.
SPEAKER_04Yes.
SPEAKER_00Right?
SPEAKER_03It doesn't work out that way, obviously. I like it when people say make the last check bounce.
SPEAKER_00Yeah, right? Yeah. Uh the problem with that is you just don't know when we're gonna fly away. And you can't be spending down your principal like that. Uh, because what if you run out of money and you're in your 80s? That is terrifying.
SPEAKER_02Yes, it is.
SPEAKER_00And being forced maybe do a reverse mortgage or sell your house or have it to move in with kids, even though you don't want to, and the kid your kids are raising their kids, and this is really this burden thing that that really happens. So it's it really is so important, folks. Yeah. And then don't think, well, I'm not going to. Don't you you have to plan for a long retirement.
SPEAKER_03And in doing this job, what I've noticed over time is when we estimate someone's expenses, you know, we'll talk about the go-go years and the slogo years. I think that it's dialed in pretty close there for people. You know, they have a good idea of what they'd want to spend. If anything, we would like to estimate them spending, you know, more in those go-go years and slogo years than maybe they think they're going to spend. Uh, but we do have some clients that really don't spend much money because they're in those no-go years, and they're pretty happy with you know, minimal, you know, out and about and travel. I mean, they're they're just doing what they want to do, but they might be in their early or mid eighties and they're just not as busy as they were 10 years ago. And they're not doing as much, and that's fine. But what could come up that could really derail that is from a cost standpoint, a major medical deal because somebody doesn't have to receive care for a long time for it to be expensive. I mean, medical bills add up very quickly, you know.
SPEAKER_00We're gonna revisit this in a few minutes down the rest of the program. I think we talk about one of our topics is going down that path just a little bit more. But again, just wrapping this up, it is so important that consider a lengthy retirement. Again, I I brought this up several weeks ago. It's pretty amazing. Uh, client came in, her parents just celebrated their 75th wedding anniversary. You ask anybody that they'd be anybody who would be around for 75 years married. That's that's just incredible. And it's how it happened to them, and they're an assisted living and it's expensive, et cetera, et cetera. So you want to plan for that. It doesn't mean it's gonna happen, but if it does happen, you want to be prepared.
SPEAKER_04Well, you know, George, that's another question that I believe his name is Scott Ford. He spent 27 years in the financial space. He is the president of wealth management at US Bank, and he was asked, what retirement conversations are most people too afraid to have, but desperately need to have. And he said people may not talk honestly about what retirement will look like day to day with their spouse or partner. And that's sort of something you were alluding to there is what are you gonna do every day?
SPEAKER_00Yeah, I mean that's that's the big thing. It's what we hear. Um, people stop working, and uh what are you going to do? Um, reading books, working in the garden, of course, things like that. But if you want to go out have hobbies and things like that and travel, you have to take into account that you've got all this time now and you want to do things, and in a lot of cases it costs money, so you need to plan for that. As I said earlier, the the go-go years, right? That's when you're you're retired, you're healthy, you want to do things and hit the bucket list, if you will, and considering this. But when you you're done with that, there's the next phase, right? The slogo years and the no-go years. When we build a plan for people, a lot of times they haven't had the conversation amongst each other. They're just we're going into retirement and what will it look like, and we start going, Zach sits down and puts a plan together for somebody, and it's 25, 30 years out, and we won't be around that long. Well, our job is to ensure if you are, you're gonna still be okay. You don't want to make living a long time a penalty, having a long life expectancy in your 90s and making that a punishment, which would be money becomes a big factor in your quality life. So that's part of what we're hired to do. To make sure if you're around, you're gonna be okay.
SPEAKER_04And if someone already has a retirement financial plan, you would be happy to take a look at it if they would like a second pair of eyes on it.
SPEAKER_00Well, it it's not me being happy about it. It's it's important to the listener who wants to come in being happy about it and having another set of eyes look at it and say, here you go. We do that multiple times, probably one out of four that come in here. They're all systems go, they're doing a great job. We have a case right now where somebody came in five years ago and they were all set, they didn't really need our services, they just call back and they want to start using our services now because they're that much older and they just want to say we just need somebody to really make sure uh where we are now, it continues to be okay.
SPEAKER_04So if you think that that is something that could benefit you, you can certainly give us a call at North Star Financial and Retirement Planning. The number is 864-671-4717, or you can reach out at Northstar65.com as well. But the number again is 864-671-4717. George, before the show, we were talking about some of the stories we wanted to discuss today, and one of them is the Schiller Cape Ratio. And you said, Hey, I know that guy.
SPEAKER_00You know, I've I've met him a couple times. He's been a speaker and uh got in a small conference room with him and uh Nobel Prize winner, of course. He's pretty sure well known in our industry. Uh very grounded, makes a lot of sense. And he came up with his uh the Schiller index, which is really uh the ratio, excuse me, which is basically he went and looked at this. He goes, Okay, stocks are one of two things, usually overvalued or undervalued, which means basically they're very expensive to buy, but they're popular, so people are still paying for it, even though you know what exactly are you buying when you buy a stock? You're buying into a company with the hope that it's gonna continue to grow, stock value and the company value, so it's gotta be in tune. So you've got to have earnings off of this, it's gotta feed itself. These companies are like almost living beings, and you've got to look at that and say, okay, am I paying too much for this for the risk I'm taking, or not, or is it undervalued? It's a big factor with people, put it this way. Am I getting in too late? Right? It's it's overpriced. You look at jeeps out there. People are buying these Jeeps and they're they're way overpriced for what you're getting. Right. Okay, at some point you need to sell this thing and you can you can take a bath. It's just something to that nature. So what they're looking at, what they do, and I don't want to get technical with this, but basically he divides the current market price of an index, like say, let's say the SP 500, and adjusted for inflation and adjusted for earnings over the past 10 years. What he's saying there is let's not just look at one year, let's go back 10 years and just look at the value on these stocks, are they worth it or not? Give you an idea of the metrics, folks. The average is 17, it's kind of a healthy thing. It's around 40 right now. And when it's between 25 and 30, if you look at it at his regard as overvalued, and it's at 40 right now. The dot-com burst in 2000, the Cape Schiller was at 44. Why are we talking about this?
SPEAKER_04Well, it it does appear if it's near 40, that maybe we're in for what a correction?
SPEAKER_00Yes, very much so. And this man is he's got a common sense approach, very well respected, he's been acknowledged by winning Nobel Prize in finance. You look at this and going, okay, what should you be doing now? Well, there's some good news is bond rates have gone up due to inflationary concerns. So you might want to consider taking some of the winnings off the table, which we've been doing. It doesn't mean you get out of the market, folks. It's just basically, hey, we've done really well. I'm concerned with people out there. Uh the market's been on a tear recently again, right? And everybody wants in again. Anything wrong with that? No. But but with your head not over it. And so when you're looking at this, we're actually going ahead, not maybe maybe selling off these positions, but taking profits that's done well and putting into short duration bonds, it's getting five, six percent. It doesn't make sense, right? Just don't think the party's gonna go on forever. It doesn't work that way. What were you gonna say, Zach?
SPEAKER_03I just quickly typed in current PE ratio on the SP. Uh that's uh so PE ratio is just price to earnings. And it's funny how some of the metrics that we're used to looking at they are the same as the Schiller, for example. You said that the average for the Schiller cape index is around 17, and it's currently hovering over 40 or around 40. The SP typically trades somewhere around 17, 18 times earnings, and it's at 32.
SPEAKER_02Yeah.
SPEAKER_03So there's two things that have a track record right there that say that the current market from a price standpoint, when you're comparing it to earnings, is abnormally high.
SPEAKER_00Yeah. Stocks are expensive right now.
SPEAKER_03I think the hardest thing is you're trying to gauge what attributes to that growth, how much of that is, you know, from some of these bigger tech companies because there's so much unknown there because people are paying these absorbent prices for these stocks, and some of them haven't even they're not even cash flow positive companies. No, it's put away the way so it's kind of like uh I believe in all that stuff. You know, I I believe with this you know progression of technology, some good, some bad, but it's happening. But at some point, somebody's gonna say, well, that's enough. Like I I'm not gonna pay any more than that, and you don't want to be the last person paying the highest price, because then that's when it uh uh correct.
SPEAKER_04Um, you in you know, you see the stock market doing well, and of course your your instinct is to I I'd like to be part of that, I'd like to get some of that.
SPEAKER_00Again, it's it's uh the market. If if you're playing with emotion, it's the worst thing ever for anybody. Fear and greed takes over and it will dominate and it will ruin people out there. And right now, there's more sophistication out there in the investment world than you can shake a stick at. What that's telling you, if you're not engaged in that, you don't stay current with it, uh you don't have a chance. Rich are gonna get richer, and the poor are gonna be poorer because you know people are out there wanting to take your money. That's not a uh scare tactic, folks. It's the truth. People are being told a bill of goods, and it sounds good, and you look at the track history of there, but are you overpaying for something? You need to be aware of that. And uh we're all older. Every day we get a little bit older, retirement becomes a little bit more real, and you're playing the game with keeping up with your neighbors, you good luck. It could be very, very dangerous. This is why you need a plan. This is where we preach, coming in there and holding true to it. And uh over the years we've had some people uh leave us. You know why? Because we weren't risky enough. Not risky enough. We weren't making enough money, and that we're not gonna go away from that. You can have your fun account out there, don't get me wrong. If you want some long-term growth and such, that's fine. But you know, you're worried about making more money as opposed to preserving what you have, preserving your lifestyle and not being pulled into that orbit where you flame out. Uh it's easy to get into. It's really easy for people to fall into, especially with the the markets when they're hot.
SPEAKER_04Well, we call the show Stop Worrying, you're retired. Actually, George, that's your title for this show. You came up with that years ago.
SPEAKER_00On the fly.
SPEAKER_04But I love that. Stop worrying, you're retired. And that's what really putting together a plan is designed to do, to allow you to stop worrying and retire and enjoy it and not have that fear of running out of money.
SPEAKER_00Yeah, I mean, put it in our perspective too. We've got the responsibility of many, many families are depending on us to get them through their retirement, not get it wrong. What happens if you get it wrong?
SPEAKER_03Well, you either well you could go back to work.
SPEAKER_00Yeah, not because you want to, because you have to.
SPEAKER_03Or you uh have to take a significant cut in your lifestyle.
SPEAKER_00Yeah.
SPEAKER_03You're not crossing things off the bucket list because you did them, you're crossing them off because you can't afford to do them.
SPEAKER_00Yeah. I've been through the cycles, folks. I've been through the 01s and the eights and all this other stuff that's in between, and it really comes down to sticking with the plan and understanding like this cape ratio. There's a reason people in our industry respect this man and what he's doing, because it's got the track record out there and it's showing that it's overpriced out there right now. It doesn't mean you run away, but it's a good time to really re-evaluate and maybe de-risk, take some profits off the table, put it in cash. So if the markets do adjust, down, a couple things would occur. One is you can buy back in at a lower price, right? Also, if it's prolonged, you can still take these vacations and do what you want to do until the markets recover, right? Makes sense.
SPEAKER_03Sure. You know, you're talking about what are some of the those biggest mistakes, you know, before this. Well, I've met with a couple people in the last month or two who have said, you know, I haven't really adjusted my 401k holdings, those allocations in in years. Yes. And one of them said that she had never adjusted them. And I looked at the performance on her portfolio so far this year, and she's up. It's actually done pretty well. But there was a period of about six weeks there where she even brought it up. She's like, I was actually really nervous. You know, I was down almost 20%. Well, it it was because of all this Iran stuff.
SPEAKER_00Yeah.
SPEAKER_03And it really hit her portfolio. Luckily, it has come back and actually has exceeded where it was before all that stuff started. But that's just not a ride to be on when you're within a few years of retirement or even early on in retirement when you're wanting to start taking income from the portfolio.
SPEAKER_00So, you know, you can make one of two wrong decisions here. One is you go ahead and you pull back some of the risk, right? And the markets continue to go up higher. Well, you're gonna miss out on some of those gains, right? And that's that's shoot, I should have stayed in.
SPEAKER_02Right.
SPEAKER_00But you didn't. Okay, so you're not getting all the gains. You're still doing okay. The other wrong decision would be what? You stay in, right? And the markets go down.
SPEAKER_04Right. Boy, that would happen.
SPEAKER_00That's the point. And you're gonna make one of two wrong decisions. You're gonna ask yourself which one do you want to make? I guarantee this, you're up, and uh us men have a tendency of beating our chest going, Oh, look at us, we're up this amount of money. Take a lot of ego who's based around net worth and making money and doing this, and we get it. But meanwhile, your spouse is nervous Nelly about the market things going on in the world. I mean, you just turn on the TV in the morning, it's terrifying. You know, it's just a lot of stuff going on. So, really going out there and saying, give yourself peace of mind. Do you have peace of mind? Okay, are you prepared for when the markets tank? And they will, you're gonna be okay. You've got to bulletproof your retirement.
SPEAKER_04You know, George and Zach, we got a call this week among our many listeners who have given us a call. This particular gentleman said he really appreciates the way you explain the topics that we bring up on the show, but also your approach to retirement planning.
SPEAKER_00Yeah, I mean, it's something that's evolved over time. Thirty years ago, the world was different. What I was doing was different, same field, but it just evolved. And again, it's gotten a lot more sophisticated, a lot more ways to make money and lose money.
SPEAKER_03You know, I just read in a Wall Street Journal, I think it was Wall Street Journal article, they were talking about how there's now going to be options trading available on with for Bitcoin. Yeah. And I mean it just it just kind of keeps going. And just for new ways to get your money. Yeah. Yeah. I mean, and there'll be people that make a lot of money off that that know what they're doing, and then there'll be people that lose a lot of money. As always.
SPEAKER_04As always. Yes. 864-671-4717. If you'd like to call and reach out to the North Star team, that's North Star Financial and Retirement Planning, George Fossing, Zach Jenkins, Travis Smith, and the rest of the team at North Star. If you would like to take advantage of a complimentary retirement roadmap, you can give us a call if you'd like to just get a second opinion on a financial plan that you already have in place. You may also give us a call. If you think we can be of help to you, call 864-671-4717. The number of Americans who list health care costs, the deficit and inflation, as big problems has really gone up over the last year. That's according to a Pew Research Center study.
SPEAKER_00Yeah. Well, you know, the the big thing, you know, looking at problems that are out there, you know, healthcare costs, like we said, and deficit and inflation. I think this is hitting home for just about everybody out there. I mean, deficit you don't see, right? But health care costs. So I know there are millions of people made some adjustments with the subsidies for health care. I think there was millions of people are chosen not to have health care. So now they're taking a huge risk out there. Not because they want to, they're forced to. Or they're taking higher deductibles. I think that a lot of these deductibles are $7,500. You have a family, you know, it could be a family plan deductible, it could be a lot higher, it could be per individual. $7,500 is a hit, right? It's a chunk of change out there. Used to be $2,500. Now you now you're on the hook for an extra $5,000. That's real. I people even see that. And when you need it, that's when you're gonna get the bill. It's gonna be, ouch, the deficit out there, that should be something we all pay attention to. Uh we're running a two trillion dollar a year deficit, and uh it doesn't matter who's in office, just spending this money away. Where does this two trillion dollars how do they pay for this? Well, they could print money, they could tax you. Mm-hmm. Well, they're selling bonds, right? They're selling the debt. Okay, they're having people saying, You give us the money, give us a two trillion dollars, we're gonna pay you back X amount. Well, the cost of paying back now is coming up on six percent. So basically, two trillion dollars at six percent, that's just to pay the interest. On that comes out of what? So the debt becomes even bigger. Next year, $2 trillion you've got to start paying back. I think where are we at? $26 trillion right now? Well, yeah, it's something like some dumb number like that. You can't it really doesn't matter what I say. You can't put your arms around trillion. But it's just a huge number that's it's just getting bigger, and as interest rates go up, that becomes more real, so which leads to inflation uh next. And inflation is real. Yeah, you go to the pumps, holy cow. That's just something that we see.
SPEAKER_03Yeah, I almost paid a hundred dollars the other day. I was almost out of gas and to fill it up, it's almost a hundred bucks.
SPEAKER_00Oh yeah.
SPEAKER_03Yeah. Um I use the least expensive gas.
SPEAKER_00Yeah. Yeah. It's it's just crazy. And so what does that mean? Well, it means you you have less in your pocket, might mean you're not going out for dinner as often or whatever, or saving as much. Putting your kids through school. It's just nuts what the costs are nowadays. And it becomes more real. Things get more expensive. What does that mean? So basically for most people, that means less saving or more spending, which both have uh implications out there. People are seeing this and realizing you said it's it's you know inflation is a silent killer, it's that by a thousand cuts. All of a sudden you realize your budget, if you're on a budget set income, you know what I'm talking about. And people out there listening right now, you have social security is yourself a major source of income plus your savings. Man, it's real, up close and personal. So again, bringing up the obvious, what's the point? The point is you have to be smarter with your money, with what you do have. Understand, okay, where can you cut costs? There's a limit to that. So what you're trying to do is more performance out of your money. Putting in a bank CD is not going to do it. Getting two or three percent at the bank, maybe a little bit higher now with rates going up, not much more, but barely, if at all, keeping track with inflation, you need to revisit that. And we're getting lots of calls of people coming, hey, do you have some options besides what I'm getting at the bank? We've got client up clients up in uh North Carolina. We told them what we can get them, and they they looked at this and they got the money out of the bank. It was about $300,000, and we're getting an extra two percent than they were at the bank. That's six thousand dollars a year. That's five hundred dollars more a month just by reallocating, not more risk or anything like that. They realize this. We need to get more mileage on this. You need to re-evaluate where you are and where your money is.
SPEAKER_04George and Zach, what is the value of putting together a financial plan? What can you spot that maybe we would not see?
SPEAKER_00That's a good question to ask our clients, right? Ones that come in here. Well, what's the value? They're gonna work with us. There better be value. There has to be value there. Sure. Like, hey, we like you, so we're gonna give you the bit. That's not the case. You need to bring something to the table. I think the biggest thing out there is we we show multiple models, multiple situations. If this happened to you, if this happened over here, if you were retired 35 years, and what would it look like in your mid-90s? If we had another meltdown in the stock market, financial world, what's it gonna look like for you?
SPEAKER_02Yeah.
SPEAKER_00Right? If you have a long-term care event, what's it gonna look like for you and your family?
SPEAKER_03I remember we were building a model out for a client, and I remember we pointed out to them based on pretty reasonable expectations, based on what we knew that day, by them doing some Roth conversions, we were gonna be able to save them a very large amount. And we were just kind of comparing that amount to the size of their portfolio and what our fees looked like. Yeah. And either you or Travis, somebody said, Well, you know, if we're able to save you that much on taxes over the lifetime of your retirement, that's gonna more than pay our fee. It would pay our fee for like 30 years. Yeah, remember that. You you point out health care cost again. Sometimes there's just as much value in avoiding these potholes and just being more efficient than there is in picking some winners in the market.
SPEAKER_00Right. You know, it's it's when you talk about fees and such, people go, well, this guy's only charging this or whatever. One thing is it negotiable? No, our fee is not negotiable because we have to give the same service for everybody. It's tiered, so the more we we work with, okay, we we adjust it uh based on the first five hundred thousand, next five hundred, etc. etc. So we're going in there and showing it's got to be a value-based example for people. And if it's under a certain amount, we really can't work with you. You know why?
SPEAKER_03We wouldn't build a service.
SPEAKER_00Well, we can't give you the service you need. If we everybody was doing it for this amount of money, we we couldn't do what we're saying we're gonna do. So going in there and having a very upfront real conversation about okay, I'm kind of going off the tangent here, but a little bit bringing the value in there, building these models, showing people that, okay, this happens, you're gonna be this is what we're gonna do. This gives peace of mind. It keeps harmony in the family, keeps people, especially if you're married, and you both have maybe different thoughts about what retirement what your concerns are, what worries you. Might be a little bit different. We want to pull that together and make sure both parties are satisfied, they're they're they're content and they're prepared.
SPEAKER_04I was just thinking, I wonder how far apart you've had two people and then were able to pull it together for a plan that they both thought was a positive, good plan going forward.
SPEAKER_00Oh yeah, and that's it's m most people. Um course you might hit a topic where they both stare at each other, they turn their heads, we're crosses and they look at each other, but that's a question that might not have been addressed before.
SPEAKER_04That's what I'm wondering.
SPEAKER_00Okay, and that's really um, I hate to say it's but a little bit of that financial counseling that we bring to the table and bringing up there. Well, what if this w how Bob, how would this play out with you? Well you what do you think? Well, I think we can da-da-da-da. You know, uh Betty, what do you think? And da-da-da-da-da. Okay, so what we're saying is this you're you're both are concerned with the cost of something. Yes, okay, well, let's take a look at some options for you. And it might not be an either or, it could be both or neither. But again, having this conversation and bringing it to the forefront, that's what it's about. It's not about I can get you one percent more. That's ridiculous, right? I mean, listen to other radio programs, if that's what they're talking about. I mean, run away. No one predicts the markets. We don't know. Our job is to make sure you do not get hurt.
SPEAKER_04If that's something that resonates with you, you can give us a call at 864-671-4717. That's the North Star financial and retirement planning team. It includes George, of course. George Fossing is the founder, Zach Jenkins is a certified financial planner and CPA Travis Smith. So if you'd like to call, here's the number 864-671-4717. Now you can also reach out at Northstar65.com. George and Zach, are you having enough fun?
SPEAKER_00Heck yeah.
SPEAKER_04I ask because the Talker Research Group did a survey of about 5,000 adults here in the U.S. And almost half of them said that they are lacking in the fun department. They just don't think they're having enough fun.
SPEAKER_00I guess you need to define fun, right?
SPEAKER_04I guess.
SPEAKER_00What I've seen, and talk about myself, I'm 64, I'm not going to retire. I love what I do. And uh retirement is knowing you can stop work, it doesn't mean you have to, right? But it allows me to be able to, what's my definition? I love to travel. I love to explore, I like to meet people outside of the comfort zone. That to me is fun. It's engaging. And uh, you know, I think part of fun is being engaged. That always ha ha ha fun, but you wake up excited in the morning. You're excited about the trip, you know, the the river tour you're gonna be taking in the fall. I think it's important to have something to look forward to.
SPEAKER_04Right?
SPEAKER_00Whatever that looks like.
SPEAKER_04I could use more fun. What about you, Zach?
SPEAKER_03I could always use more fun, but I typically think I do a pretty good job of trying to make sure I'm gonna have fun.
SPEAKER_00Yeah, everybody here is well balanced. We we make sure we take time and uh you know working till you die. Uh yeah, I've seen people like that. We all I think we we all know somebody like that. I remember this is really interesting, folks. I haven't brought this up in a long time. When I first moved here from Wilmington, North Carolina, it's going close to 24 years now. When I got here, I met this individual. It was Down. He was a really, really nice man, and he'd worked for one of the big companies for many years. He wasn't a skilled employee, he was doing manual work. He'd done an incredible job putting away his retirement Nasdaq. His bragging point was he never took a vacation, he worked every day. Wow. I've never met anybody like that. And this is a real person. He just this is what he did. I mean, he had his weekends off and such, but basically worked, never cold and sick. Very proud of that. He had accumulated a lot of money. And I remember meeting with him, and his son was with him. And I go, What are you looking forward to? He goes, George, I'm scared to death. I've never gotten any hobbies. I don't know what I'm going to do. Work was his life. And he was content, but it really was an eye-opener. What if he just had passed away and never got to enjoy anything and going out there? But that's his own world, right? Who are we to judge? But it was really interesting because he didn't know how to start retirement. And I said, Well, what do you like to do? Well, I like to hunt. Well, okay. And his son was smiling. I said, I gotta get dad out in the woods. And start sort of really was kind of like a kick in the tail to get him going out there. But a lot of times look at this and you go, okay, what's important to you? And our job is so cool because we get to help them fulfill their dreams. We have this multiple conversations, and you need to spend more where people are you're doing well. You know, right now the markets are great. Let's take some money, put it in the bank, and get yourself on a trip. I remember this one. You this is a great story, too. Client came in, his wife got to retire before him by about seven years. And he was a little pouty about this because he really wanted to retire. Okay. But he had to finish up and for his pension and everything like that. And we started talking. He goes, Man, it's just, you know, I got the weekend, all I do is take care of the house. He did the landscape and all like that. I said, I'd rather be doing other things. I said, Well, let's make that happen. He goes, What do you mean? I go, how much would you think lawn care runs a month?
SPEAKER_03A couple hundred bucks.
SPEAKER_00Right? Like we, I think what budget back then was like 350 bucks.
SPEAKER_03Okay.
SPEAKER_00So we took out, we had an account, set it up, and it was generating $350 a month of income. And that $350 went into his checking account. And guess what that $350 did? He wrote to check out pay for the lawn service. So he gave some of his money a job. It was very uh lucid when you look at that because it was watching. Here's what we need. Give it a we're not touching the principal. It's generating interest and dividends of $350 after taxes going into his checking account, and that money goes right out. Now he's got what? He just recovered six hours, whatever, ten hours over a month for him to go play, right? And it was like, this is just so cool. It's a great illustration, though, of not wearing out your money, not spending it down, but just giving it a job and giving it an assignment. You do it for vacations, whatever. And uh it also got him ready for retirement by doing this. Showing him, say, you've done really well. This is why you saved. Savings, your 401ks and such folks, that is your your testament for self-discipline. And this is your reward for retirement, is not just staring at it, but having it work for you now and generating that income so you can go out and play.
SPEAKER_04I love the sound of that. Going out and playing.
SPEAKER_00Yeah.
SPEAKER_04And having the confidence to do that.
SPEAKER_00It takes time for people to get used to that whole used to accumulating and gathering and doing that and generating, and we hear that all the time, by the way. It's not George and Zach talking. They actually tell us, I said, how's it feel? Not working. They say, It's weird.
SPEAKER_04I bet, right?
SPEAKER_00And watching the money just deposit into their account, like their social security check. Now they have some income coming off their investments each month. Hey, go spend it. That's go spend it money.
SPEAKER_04Go spend it money. If you'd like to reach out to the North Star financial and retirement planning team, easy to do. Here's the number 864-671-4717. Or, of course, anytime reach out at Northstar65.com. You know, PlayBill is a great place to live and retirement. The North Star team is here to help you make the most of your retirement savings and live the retirement life you've been waiting for. Right here we have to take up the North Continental and Retirement Line.com. Now back to the retirement. Good morning, along with George and Zeke. I'm Cheryl White. I want to ask you guys about long-term care insurance. You know, we were talking about health care costs going up, and I expect they'll continue to go up in the future. Would you agree, George and Zek?
SPEAKER_00Yeah, I mean absolutely. You need to look at this, and again, why do we talk about this? It's necessary, folks. It's so important. You work so hard for where it is, and you have the wrong, I call it the wrong illness, wrong disease, your life can be massively changed. And again, this would involve the whole family because if somebody has a stroke, what's covered and what's not covered? Okay, your hospitalization will be covered, a certain amount of rehab will be, but that's not infinite. Basically, you got a hundred days and you're on your own. If you become where you need full-time care, who's that burden going to come onto? And you realize Medicare doesn't cover this stuff. There's never designed to cover that long-term care aspect of it.
SPEAKER_04Well, here's why I brought it up is because I saw a question on Market Watch. Someone wrote in and said, you know, I want to retire at age 55. I'm not interested in long-term care insurance because I've seen with my friends and family that their long-term care plans are basically useless. Is that true?
SPEAKER_03I guess I would want to understand exactly what he means by that. You need to know more of the story. But I would say, I know for George, since he's been doing this over 30 years, but just since I've been in this business for almost 13, 14 years, that's probably changed more than anything else, is that sector and planning for that. I mean, we're outliving our minds these days. I mean, you see people who, you know, you know, maybe have the unfortunate diagnosis of dementia, Alzheimer's, or something like that, and you can live 10 or more years, you know, with something like that. So it's almost like the body is outliving the mind, you know, and and that's scary for many reasons. But, you know, some of these older plans, they were significantly mispriced, and insurance companies had to go back to that pretty quickly when they figured that out. And some of these plans did not cover your expenses, you know, for in-home care because people weren't really receiving in-home care. People would have a stroke or they would you know get very sick and they would go to a facility. Well, now you're seeing people aging in home or aging in place, they'll call it, but they're aging and being taken care of in their homes. That was not happening 30 or 40 years ago when these products came along. So there's what we call the old long-term care insurance. In fact, one of our team members, Mary Elise, she came on board with us. Her job was to talk to people about long-term care planning and insurance and the cost and stuff like that. She didn't sell one long-term care policy. I don't know the last time you sold one, George, but uh, I haven't sold one in 10 years. But you've got to have a long-term care plan, right? So, what I think that gentleman's referring to, and I'm not really trying to get defensive about it or anything, but I think he's referring to some of those older plans where you're paying an annual or monthly premium, and if you don't use it and qualify for the benefits, right, from the insurance company, it just goes away. Like somebody dies without using it or they don't have all the money you spent on it's gonna be. Yeah, it's just gone. The insurance company keeps it. Well, that's how the insurance company can afford to provide $400,000 of long-term care benefits to someone that maybe only paid into it for 10 or 15 years, is because there are people who die without using it. That doesn't really sit well with people if they're not the ones that are using it. They would like to either see that money come back to them or come back to their family and the industries address that. And there's some of these instruments out there that whether you need the income for long-term care or not, maybe you just want to start taking income off of the policy, that's out there. And if you're married, it'll pay a joint benefit till the survivor passes away, even if you never needed the long-term care. But if you need long-term care services in the home or you go to a facility, it's got a mechanism inside of the policy that triggers and it doubles the payout for up to five years on the one that I'm speaking about. And it's it's an insurance policy. And let's say you purchase it today and you fund it right up front, and 10 years from now you want to start taking income. Let's just say you put in $100,000 and now it's paying you $1,000 a month 10 years later. And 10 years after that, you know, you're now into your mid-70s or early 80s, something like that, and you have a long-term care claim. Well, now that $1,000 a month goes to $2,000. There are these different instruments or these contracts out there that didn't exist 30 or 40 years ago. And we are passionate about that because just this year we've had two clients pass away who were receiving long-term care benefits from their policy. It's a real world. And one of these clients, their daughter, came in about 10 days after she passed away and said, Thank goodness we had that. Even though they didn't need it financially, she's like, that was a big deal because then it made paying for this stuff a lot easier. Because the reason they have all they have is mom and dad were frugal, right? They didn't want to pay for this stuff. Well, it was a no-brainer then. It was coming out of the insurance company's pocket, right? So we are very uh passionate about that. George says that's his story, how he got into the business. That was his way in was through long-term care. So it's something that we really care about and you have to bring up. And I'll just end with this as I'm drawing on. Educate yourself on it. You need to learn about free family. Yeah, because you can see and you will hear there are more people that lose their homes and file for bankruptcy in this country because of health care costs more than any other reason out there. So, you know, you can watch a nest egg that took 30 or 40 years worth of work and diligence to build. If you don't think you can see that go away in just a year or two because of long-term care cost, then go to a facility and and ask, hey, how much does it cost to be in memory care? How much does it cost to, you know, if I was putting my mom or dad in some sort of uh, what would they call it, just like assistance, assisted living. Assisted living. What does that run? And you'll see that a nice place nowadays around our area can run seven or eight thousand dollars a month on the low end.
SPEAKER_00It needs to be addressed. Any retirement planning advisor, if they're not having this conversation with you, is is not doing you a service. Give you an idea to show how important that was. Uh clients or uh family, uh husband and wife took one of these policies out years ago. And we're talking 14 years, 15 years ago. And uh he's he's since passed away, but mom's still alive. But both daughters came in over the past uh several years and wanted to purchase the same policy that the parents had because it did what it was supposed to do. And it really helped them as being the children caregivers and the parents to have have that extra money coming in to provide the services and they're so they're able to be care managers, not just caregivers. They're in their 60s now. You know what they're saying is we're we don't want our kids to have to go through anything, but you you know you set my parents up, so it helped us as the children, as the daughters, and we want to be able to offer the same thing to our kids. It's a pretty pretty cool story out there. Good stuff there, Zach. And I think it's just the importance of uh understanding and making this party a checkbox for time.
SPEAKER_03You want a dark joke to make this a little lighter?
SPEAKER_00Okay.
SPEAKER_03Uh-huh. We'll shock the horse and beat it again. This is really important.
SPEAKER_04Well, don't you guys have an educational event coming up soon?
SPEAKER_00We do. Early June. It's gonna be here in the Greenville office. We're gonna have a uh 1230 and a 6.30 session, and we're gonna introduce and give quotes out to people to show, hey, this is what you can do with this amount of money. You can use IRA money after tax money, it doesn't really matter. And we're gonna show it to you, you're gonna do these plans, and so the only way you come out with putting less money in what's gonna pay out is if you're surrendered to the policy early, and that would be your choice. But like we didn't know these options were available. And the people that are gonna show up already know the risks because they probably have their own story. Yeah, we we're not gonna sit spending a lot of time, you need to have this. We're gonna simply show people who say, I don't want this to happen to my family. I'd like to learn about my options. This is what that's gonna be about. I'm gonna share with you solutions.
SPEAKER_03And we hear a lot of times people say, Well, you know, I'm not really concerned about that. I'll just pay for it. Most of the people we work with could just pay for it, but it's also just about you know the leverage of you know your money, you know, having it go twice as far or just doing smart stuff. I remember one time a guy said he's like, you're in a position to really do some smart stuff. Let me tell you about what some other people are doing that are in a position like you're in. Because a lot of people out there, they wouldn't be a big deal for a quarter of a million or half a million dollars over a couple of years to pay for long-term care. But if there's a way that you could leverage that or reduce that amount of outflow and keep that in your family circle, then that's a smart thing.
SPEAKER_00Well, because the uh thing, the same thing. A lot of people can let me know what it is, housing prices got stupid, but they've had their house paid off and they have enough capital assets to rebuild if the house burned to the ground. Yet they continue to carry their insurance insurance on their home. Yeah. Same same type of thing. The difference. Here is if you never need it, you get your money back.
SPEAKER_03I mean, if you want to pay to burn your house down, all you have to do is cancel your insurance and your house will burn down the next day. Right?
SPEAKER_00Like the umbrella story, right? Yeah. Yeah, you don't carry the umbrella around, it's gonna rain, you carry the umbrella, it doesn't rain.
SPEAKER_04Well, I'd like to give the phone number right now if someone would like to reach out to you and talk about this or anything that we discuss here on the show. The number is 864-671-4717. That's for North Star Financial and Retirement Planning. You can speak with George. George is the founder or Zach. Zach is a certified financial planner. Travis Smith is in the office too, and Travis is a CPA. But all of you guys are financial planners, and so you can help look at plans or create a retirement plan for someone. 864-6714717. I have one more thing on the topic of long-term care. Maybe not specifically that, but estate planning. What happens if you do need assistance, but you have no one to speak for you? What if you get to a point where you're unable to make decisions for yourself, but you don't have a spouse and you don't have children? They call that solo aging.
SPEAKER_03Well, a lot of times people will lean on you know professionals they've worked with, you know. For some clients, we're in uh that role for them, or maybe it's you know management of assets once they're gone, you know, help the next generation or two. But for people who don't have children, then it might be being that person that can help with like those health care directives and stuff like that.
SPEAKER_00Yeah, I mean a charitable giving, where is your sake going to go? I bring this up every once in a while, but it's kind of interesting. We have very intimate conversations with people. It is very private, of course, and confidential. But how often when we sit down with people and they've never married, but they have nieces and nephews, and they go, Well, we never hear from them. They sent them cards or something, and they never they never reciprocate over and over and over. And then like all it would take is one niece or nephew in the crowd to pay attention, check in on your aunt or uncle doesn't have kids, and believe me, wink, wink, nod, nod, there probably would be a will leaving everything to that person because they were like seriously, they cared, you know. Yeah, and uh it's it's sad how many conversations I've had over the years with people again in the situation and never married and have any children by choice. And uh they're just going it'd be be nice if somebody did this, otherwise I'm just leaving it to charity, which is great as well. Of course, I need to pick on that. But it is really important to do that if something happens to you, having a plan in place and saying, Okay, I I want to make sure I'm taking care of myself, but you taking care of yourself in advance and having that taken care of. And believe me, it's uh there's a few listeners out there know what I'm talking about, and the importance of taking the time and the old the old thing is, well, I'm not gonna be right, I don't care. You know go back and forth on that all day. Of course you don't care, you're not here. But there's a legacy out there saying it would just be nice if something there was a plan in place to to address these issues. That's all.
SPEAKER_04Of course. So if you'd like to talk more with uh George and Zach about that, you can certainly give us a call. And you can also ask them to review your plan. Or if you don't have a plan for retirement, talk with them about that because as you go through retirement, you really want to have something in place that tells you what could happen and are you in a good position to handle that. There are so many challenges, George and Zach, that pop up as you go through time. So a plan has to be flexible enough to respond to those challenges.
SPEAKER_00That's exactly right.
SPEAKER_04Okay, well, let me give you the number, and here it is. It is 864-671-4717. That's how you reach out to the North Star team. It's 864-671-4717. Ask about a complimentary retirement roadmap. And they'll sit down with you and talk about your situation, what you have, what you'd like to do in retirement, and then talk about ways to make that happen. 864-671-4717. Or you can reach out at Northstar65.com.
SPEAKER_00What's concerning for people out there right now? The big thing, it's it's inflation. Healthcare costs with high deductibles become a big concern for people. And again, a lot of times it's not a big deal until it's a big deal. So something happens to you, and you realize what kind of coverage you have and what's going on. So same thing when you retire, folks. If you're not retired and listening to this program, you go on that fixed income and uh you really start noticing inflation because you know your checks may you might get a cost of living with your social security, but that's about it. And a lot of times that gets gobbled up with your Medicare surcharge. So you really need to be aware of that and building into a plan, I think, is necessary. And again, it's probably the least you know interesting thing for people as far as topics. They're like, oh yeah, I know that. But the importance of it, of planning ahead for things becoming more expensive, it truly is critical for them.
SPEAKER_03I think people that might be five or ten years away from retirement, they're concerned about social security being there for them.
SPEAKER_02Yeah.
SPEAKER_03And I had this client, been working with him a few years, and for the last couple years we've talked about, hey, is this the year? Is this the year? You know, as far as turning on his social security, and finally he did this year. And I just remember last week when I was talking to him, he's like, you know, I'm getting my first social security check. Yeah. And I never actually thought I would get that. He's like, even 30 years ago, you know, getting into you know my career, didn't think that I would ever have social security. I didn't plan on it being there.
SPEAKER_00Yeah. I think the important part too, Zach, is a lot of people are very comfortable right now because the markets have been relatively kind. One thing we could do, it's like we can do a stress test to show you what it would look like if another 2008 was to occur. So here's a good example. Getting ready to retire, I'm thinking maybe a year or two. I have X amount saved on my 401k, got an I already done, you know, necessary planning. If I stopped working, and and be honest with yourself too, just don't look at your expenses. So when you retire, you want to do things, right? That's part of the deal. Uh so maybe travels in corporate in there or doing trips with their grandkids, I don't know, whatever. But being realistic to say this is my lifestyle expense, including your cost of living, the old paycheck versus and your play check. Looking at that, say, okay, if the market dropped like it did in 08 in 16 months the the S P 500 dropped over 50% to 5-0, what would that look like for you? Take in mind that it took almost four years to get back to where it was before when a crash happened, just to get back to where it was. So that's a good thing to really take a look at. Take a hard look at that.
SPEAKER_04And you know, some of us may have had a stress test at the doctor's office, and so this is the same kind of thing. You're putting a little stress on the plan to see how it might hold up under different scenarios. And if you'd like to call and talk with George and Zach or another member of the North Star team, here's the number. It's 864-671-4717. 864-671-4717. You can also reach out at Northstar65.com. Advisory services offered through Delta Investment Management LLC, an SEC registered investment advisor. Investing involves risk, including risk of loss. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims planning ability of the issuing company and are not offered through Delta Investment Management LLC.