Wealth from Wisdom

Critical Ways Timing Could Make or Break Your Retirement

April 05, 2019
Wealth from Wisdom
Critical Ways Timing Could Make or Break Your Retirement
Chapters
Wealth from Wisdom
Critical Ways Timing Could Make or Break Your Retirement
Apr 05, 2019
Carson Wealth
Learn how to navigate the timing of critical issues that could make or break your retirement.
Show Notes Transcript

Your success or failure in retirement … will be determined by one thing. And that one thing … is timing. On this episode, learn how to navigate the timing of critical issues that could make or break your retirement.

Speaker 1:
0:00
Okay, and here's the legal Mumbo jumbo. The opinions voiced and well from wisdom with Rod Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory services offered through CW m L L C an SEC registered investment advisor.
Speaker 2:
0:29
This stock market hit another all time records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 250 the skyrocketing cost of healthcare and retirement could now run 350,000 words hard and save for retirement. That's great, but it's what you do with that money that really matters. Welcome to wealth from wisdom with Carson wealth. Carson wealth is a bear and hall of fame advisor or recognized by Forbes magazine as one of America's top wealth advisors and they're right here in Omaha. This is where you can count on straightforward and objective advice. They can help you make the most out of every dollar you save for retirement. Welcome to well from wisdom with Carson wealth, your success or failure in retirement is going to be determined by one thing.
Speaker 3:
1:18
You really know what that one thing is. You're not going to believe this. It's timing. Timing of when you retire. Timing of when you withdraw money from Your Ira, your four o one k or other retirement plan vehicle that you have in place. Timing could be when you actually claim your social security benefits. Timing could be many things but one thing's for sure if you ignore the timing with all of these critical things related to your retirement plan. There could be, and I want to say could be, there will be financial consequences that actually happened. Hey, welcome to well for wisdom on Paul West. I'm super excited. Got a new guest on today. We have a professor on the show, Professor Hopkins, Jamie Hopkins, nationally acclaimed, been in many publications. Of course we're going to talk about your book today. Uh, talk about you being a professor and what you say or, so Jamie, welcome to the shelf and thanks for having me on today, Paul.
Speaker 3:
2:13
I'm really excited to be here. Yeah, I'm just going to have you be here. You don't look as nervous as you did five minutes ago before we started, so I'm sure. I'm sure you'll be great here too. Just sweating bullets for it, right? Yeah, that's okay. We've got an extra towel on the side. So you talk about this all day long and in today's show we're really going to help share some ideas for people about how they can be better in their retirement and how they approach it and what they do. Um, you wrote this book that's done pretty darn well for his call itself and no, it's not spelled incorrectly just to make sure our listeners understand, but it's called rewire Matt. And walk me through that. Why did you write the book and what is it about for our listeners? Yeah, so a lot of people, as you said, it's not spelled wrong, it's called rewire mint.
Speaker 3:
2:53
And the idea there is rewire the way we think about retirement planning. And this really came from some of my, that I was doing initially on literacy rates of Americans and now is looking at what do they know about retirement, what they don't know. And what we found out actually is that people know less about retirement planning. Then they know about basic finances. And you know, it doesn't say that was totally shocking, but it was discouraging and people didn't know as much as we'd hoped about. So security about Medicare, these decisions that come back to timing that we have to make them and when we make them as very important. So I really wrote the book kind of for consumers to try to help in areas that I saw, misconceptions, biases creeping in, creating less secure retirements. And how can we transform those? How can we take it to clients so then they can be right.
Speaker 3:
3:39
The one making the right decisions. The one understanding what to do and have a better outcome. And so that's really where the book came from. And yet it's been the, it's actually been a better than I thought it was going to be. You know, everyone wants to write a book now days and uh, but it's, uh, you know, it had a positive impact on the world, so that's a good thing. It's a good use of time. Yeah. So first, congratulations to you. So I know you're happy. Besides your family, other people bought it. No. Nationally a claim to mean and Ginnie Mae I think about, I mean, how many talks have you given over your career here? Just for, to professionals and to families? Well, I did three yesterday. Um, so more than three. I know I've been on the road 66 nights are ready in 2019 and a quarter of the year.
Speaker 3:
4:22
He had a quarter of the year, so we're just into April. Uh, I think last year I did over 150 different individual speaking engagements. Uh, that's a lot. Uh, as you said, I do have a family. So, uh, you know, my wife is kind of a hero on our side. Right. Cause I'm only able to do those because somebody else supports me in being able to do those families. Very supportive and yeah, I love talking to people. It's kind of what I do for a living. I talk to advisors, I talked to insurance professionals, I talked to regular Americans all across the country. And sometimes I even get to go to other countries and talk to people. I was in Toronto a couple of weeks ago and you know, it's amazing that people are people and a lot of different places, right? They worry about a lot of the same things. I usually ask groups who in the room is not worried about their finances at all.
Speaker 3:
5:07
I've done that hundreds of times and I don't think I've ever seen a person raised their hand. Not One. Not One yet. No. It doesn't matter how much money you have, if you have a lot, you don't feel like you have enough it, you still worry about this. Right. It's cause it's drives what you can do in life, right? It, the money is just a means to an end. But if you want to, you know, retire, if you want to, you know, grow your farming business. If you want to send your kids your grandkids to school, that requires money at some point. So everyone worries about it. They do. But what we see and we talk about all the time here, I'll well from wisdom Jamie, is people let this really important thing in their life fall down on their priority list. They just, they don't make it happen.
Speaker 3:
5:47
And I'm sure you see it. And that's why you took trends you were seeing just trying to educate people. People will never make a move and do something until they're educated. And a lot of times when they hear about retirement plans, and I know you did the session for us here in Omaha earlier this week, and she even explained the difference between simple versus a set versus an individual. 401K again, if I'm a business owner listening, they all sound interesting and they could be important to me, but do I want to spend my time looking at it? But what they forget or don't know, maybe more importantly is that they're costing themselves thousands and thousands of dollars to their own personal wealth. Not by evaluating that decision yet. They'll go explore a new sale for for how long? Yeah, we it. And that's a very interesting behavior, right? We look at people and how do you behave?
Speaker 3:
6:38
Well, will you drive an extra five miles to save $5 on a calculator? Um, the answer is probably yes. Right? If you knew that down the road, right, you could drive down dodge and save an additional $5 on a $10 item, would you go do it? And the answer is probably yes. You probably would. Now, if you could save an extra thousand dollars on your taxes, on your retirement planning, would you take the time to do it? And a lot of people don't. Um, it's, it's a very interesting thing. And part of it is that it feels challenging. So part of what you have to understand is right, that advisors and advice is out there to help you. Right. It's, it's a lot like other areas. Like, I'm not great at cars, so I don't try to fix my own car. Could I save money perhaps by fixing my own car?
Speaker 3:
7:22
I really thought you would have been good at that. I just had this feeling. Yeah. I feel, I thought everybody from Philly. Yeah. It works on their own cars. That's, that's actually pretty true. Um, yeah, we, we do a lot of our car work there, but you don't, what do you do that right? You'd go out and you find somebody who's qualified to work on your car. You outsource it, you pay for that assistance to, you know, have your car fixed. Um, and you do that for a lot of things in life and finances can be the same thing. You either do it yourself or you should outsource. If you're doing it yourself and you're having less than optimal outcomes for you, you're not real thrilled with it, then you should be looking at, you know, partnering with somebody, finding somebody that can help you.
Speaker 3:
7:58
Now, I think a very important way. Now, how do you get there? Right? Like you, you know, one, you got to find somebody that you want to work with that you trust, that you know was good at doing what they say that they're good at doing. And another part is it, you're really investing back in yourself when you're getting help with your finances. And I think that also means you have to care about what I use this term, your future self. You have to care about that person. You also need to know that person, right? I don't want to save for somebody in 30 years that I've never met before that I've never thought about that I don't care about. So if you start thinking about, you know, what is it that you want to accomplish? What are your kids going to be doing in 30 years?
Speaker 3:
8:33
Your grandkids, what are you going to be doing? And you're really kind of set those goals. You take 10 minutes and think about it, you're going to be more likely to go do something for that person, right? Yeah. Because that's who you're really, you know, when you're doing financial planning, it's further future. It's not just for today. Now sometimes we can help you out today too, but a lot of times it's for this future version of yourself. So you got to that, you care about that person up front. And if you do, then we can, you know, kind of get something in place. I think you'd make a great point. I love to use car analogies on the show since now you're going to use one here too. But if you're driving down the road, do you look out your front windshield or your rear view mirror bar?
Speaker 3:
9:14
And I think I look out my front window more than my right. I hope you do. Otherwise. Are you driving backwards all the time? I have a lot anymore. I'm in a lot of, uh, you know, uh, other people, uh, you know, shared vehicles and shared vehicles and uh, uh, but I hope they're looking out the front more, right? That's the rear view mirrors is for one reason only to protect on what's behind you. So I would say your memory, it helps protect you for what's behind you, but your future goals need to be based on where you want to go. I mean, I think so many people are so worried about what happened in the past and we talked about all the time. The past is over. It's done. I mean, and you may have seen, we've been having some commercials running lately is, and I talk about tax prep versus tax planning.
Speaker 3:
9:57
All tax prep is you're recording the past last year. Nothing you can do about it by the way. Um, you know this, a lot of us here in Omaha or Nebraska fans, football season last year, it's over. There's a lot of excitement for the future, you know, now there's of course a major excitement for us from a basketball perspective. We have a new coach too. So guess what happened? The pain of not making the NCAA tournament, that's gone. But people, some reason when it starts about their own money or their own personal situation, they can't get rid of that pain. And it's a very interesting behavioral thing. And so what did they choose to do? Nothing. And they sit and let it go idle. And you're a cardiology is great because if you don't know what to do, you don't know how to fix your car. You don't, I certainly don't.
Speaker 3:
10:40
You take it to an expert and here we are, uh, you know, spring season. So of course it's pothole season and happening. So we've got to do, you got to go get it fixed. You don't really have a choice or you keep driving it until it's eventually on the side of the road and you're walking somewhere. Yeah. And the same situation. I look at your own financial situation. If you don't fix it and you may keep going down the highway, you still may be driving, but you're not getting to where you want to go and not certainly at the speed you want to get there. And where she at. You don't want to be that person and we've all seen them. Right. We're driving down the street or the freeway and they have that red tank of gas. Yeah. Walking and they're walking a little bit like the walk of shame.
Speaker 3:
11:21
They're like, what's going to happen though is none of us want to be 85 years old full of life and broke and, and I think that's what I think is so interesting, you know, reading your rewiring and is helping people get to change their mind on how they think about it and letting those past misconceptions. I agree with you on. So if you have a calculator, $10 you get $5 off and I can go five miles away, I may do it. But in 2019 you know, if I can get that same calculator for $8 from Amazon and they ship it directly to my house, is that incremental $3 worth it or not? Yeah. I don't know. I mean, but I got to look at where the future is and what happens and it really, I'd say, yeah, we're really, Jamie made me think this is a lot of the car.
Speaker 3:
12:05
How do you get from point a to point B? Let's just simplify this for everyone. And the road for retirement for so many people has a lot of critical choices. You make social security, medicare taxes, your IRA, your 401k, your pension. I can keep going for a long period of time as you, I'll too, but one of the things that's beautiful is you'd, like you said, Jamie, and you work with a professional, you get pointed in the right direction. If you want help making sure you're going in the right direction, call us. (888) 419-8513 that's (888) 419-8513 hey, don't make a critical decision that you're potentially going to regret later. (888) 419-8513 we'll be back in a moment on wealth from wisdom.
Speaker 2:
12:49
Do you own an annuity and flighted fees and commissions could be costing you and arm. And a leg get straightforward and objective advice from Carson wealth by calling (888) 419-8513. Are you caring for an aging parent? Are you concerned about the skyrocketing cost of healthcare and long term care? Or do you have questions about how to best manage an inheritance? We can help call Carson wealth today at (888) 419-8513 and now back to wealth from wisdom with Carson. Wealth contributed. We
Speaker 3:
13:20
need your money to an IRA or four. One K is actually pretty easy even for some of you listening and it may be a default investment, uh, when you start with an employer. But when you get to the other side and you get this money out during your retirement, well that's a whole different approach. And if you don't have this wealth thought out strategy, you could trigger something that gives you a lot of pain. No, not heartburn taxes. And what happens with that? And really do you want to be that person who's left with not all the money you've worked so darn hard your entire life to achieve a welcome dwell from wisdom. I'm Paul West. Hey, I'm very lucky today, my cohost today, author of requirement, Jamie Hopkins, or should I call you professor Hopkins? I love professor. Hap Gets Ph professor Hopkins. So, uh, you know Jamie enjoyed getting to know you here on the show a little bit in our first segment and let's get it in and talk about retirement and what's important.
Speaker 3:
14:15
I mean, that's why you're the guest on the show today. You're a nationally acclaimed speaker, author. Um, do you have any books here in Omaha? Maybe if we, I could help people out with them. We do have books here, uh, at right at Carson wealth office and a, yeah, we can happy to sign them if anyone wants one a, I guess, you know, that would reach out to you and uh, yeah, we're happy to get them a free book. It's nice. Was so somebody wants a book, we'll send it to you. (888) 419-8513 professor Hopkins requirement. Well, let's get to something here. I'm going to, I'm going to, I'm going to give you a question. It's really challenging here because I'm curious where you're going to go with this, so it's so simple if you say it, but the reality of is so complex, but how would you describe what retirement income planning really is?
Speaker 3:
14:59
Yeah, and you gave us kind of a great intro that most people know saving for retirement is right. You set aside money for your, if you put your money in your one k is what most people think of it as. Yeah. He put money in 401k IRA, your bank, wherever you're putting your money and you're saving for the future. Now, income planning and retirement is so much different and the way that I describe it as like trying to hit a moving target in the wind, right? Your target is your retirement goals. It's what you want to accomplish, what you want to do, what you want to spend your money on, leave to your kids, spend your time doing right. Going to Nebraska Games when they're winning, all of those things are built in and you need money for tickets. That's your goal. That creates that target and that we're trying to achieve that target.
Speaker 3:
15:38
And I said, it's moving, it's moving up and back because of longevity. We don't know how long we're going to spend in retirement. We don't know how long we're gonna live now. We can make some pretty strong educated guesses on that, but we don't exactly know. You might spend one day in retirement, really unfortunate or you might spend 35 40 years in retirement that makes planning for this so much more challenging. A lot of people just dropped their drinks. They were holding when they said 35 to 40 years in retirement because they haven't thought that before. So my, uh, my, my friend and a code director when I was at the American College, uh, you know, his name's Professor David Hotel and his dad lived to 103 mom was early nineties. David was an Olympic fencer. I know that your most popular Olympic sport, right? Fencing, but you know, he's an Olympian so he's obviously had pretty good genes and health.
Speaker 3:
16:29
And he was a college tennis player too. And His dad lived to over a hundred mine was in his 90 or her nineties and when you talk to somebody like David, you know, he realizes that and you know he could spend 40 years in retirement. Right? Yeah. It's a possibility. I mean, and so he's built a plan for himself that addresses that he's, he knows that he has to deal with that aspect of longevity that he does not want to run out of money and his 80s and nineties right. So he's built a retirement income plan that addresses that. It's actually probably kept them in the workforce and additional year two, which is very helpful. And then kind of going back to wrapping up what I was talking about, there is a, it's, you know, we're trying to hit this moving target in the wind and the wind's a very important piece here too.
Speaker 3:
17:17
Cause things are going to change along the way. Yeah. It's a lot easier to kick a field goal, hit a golf ball when there's no wind, but, right. Think about a 30 year time period. How many things are going to change over the next 30 years? Look back over the last 30 years and think about all the things that didn't exist 30 years ago, right? I mean, if you go back 40 years ago, most of the things in this room didn't exist. Then the IPAD turned nine. The iPad turned nine years old this week, if you can believe it. Yeah, right. What does the iPhone 11 years now or something? Um, you know, twittered in exist. Facebook was barely off the ground 10 years ago, right? I mean, most of the, those types of things weren't around self driving cars. Tesla wasn't in existence yet, right?
Speaker 3:
17:59
I mean, uh, most of the largest companies, Amazon was losing billions of dollars a year or two years ago. Right? They were like one of the most unprofitable companies in existence. And you look at the largest companies, the new industries that have popped up the different ways we do things in that change so quickly. Well imagine, right? Other things that are going to change your retirement, social security, medicare, taxes. Well guess what? Our taxes in 2017 there were a lot different than they were in 2018. Right? And a lot of those roles change in 20 at the end of 2025 if nothing's done. So either one will pass new laws or they're going to change automatically based off the laws that are in place by the end of 2025. So we have built in changes essentially that will occur. And that's usually not a shock to most people.
Speaker 3:
18:46
Right. People know that change occurs. Right? Whether we like it or not, change occurs hopefully for the better. I know that people are hoping for some positive change from, you know, maybe as some of the Nebraska teams next year. I think I'm good luck though. I went to one game last year and that was the Minnesota game and we, you know, we won that game. Uh, so I think that was the first one in the season to, uh, we were, we were glad to have you there, but I don't know if you've got full credit for it, but, uh, taking 50% credit with Frost says, see 50 ACL split. I'm sure you guys can split his income too if you'd like. I don't think he's, I don't think he agrees on that and he's probably not going to be that generous to you on it. So I love statistics.
Speaker 3:
19:24
So here's, here's one that goes along with his debut been, so life expectancy between 1800 and 1900 grew 9%, however, between 1900 and 2000. So the next hundred years of grew 42%. So what do you think, I'm not gonna say the next hundred years. What do we think's going to happen the next 30 with all these things that are happening? Yeah. So there's actually some doctors and researchers out there that believe the person who's going to hit age 200 is being born right around now. And that's not to be a producer, Alex. Yeah. Well and they all bags was important haven't today, but you know he's talented. But yeah, they're saying, and obviously that's part of technology, right? That technology is creating these advancements in longevity that we really have never seen before. Now another really interesting thing about that, right, that we were having this growth. People are living longer and still many people underestimate how long they're going to live.
Speaker 3:
20:21
And here's a kind of a statistic or a number that I find really amazing is that, so if you're, you know, you have a couple, two spouses, right, that are alive at 65 right? Kind of, if you're just looking at averages, there is a 50% right around 50% likelihood that at least one of them will still be alive at 90 so if you're talking about right planning at 65 you actually should be expecting that. What are the spouses at a is going to be there at 90 right? And there's still a very good chance that two of them will be live at 90 and I think that shocks people because most people don't view the world is I'm going to live to 90, 94 95 but that's becoming a much more common thing. We have lots of people breaking a hundred now. That's becoming much more common.
Speaker 3:
21:07
Almost every one I know can tell me a story about someone who is reached age to a hundred now in 2015 there was 500,000 centenarians. So people were a hundred. So now they're projecting by 2050, there will be 3.7 million and that's just here in the United States. Yeah. So there, there's definitely some growth there, right? And you know, the lifestyle or those people are going to start to change too. And the lifestyle of our retirees are changing, right? The gig economy is changing things, right? That we talked about it earlier, right? I ride mostly in car sharing, uh, kind of apps and opportunities. Now that's going to open up mobility for people who are in their seventies eighties, nineties that otherwise weren't driving, that were having difficulty moving from one place to another and all of a sudden now a car shows up, picks you up, takes you your location, drops you off and picks you back up.
Speaker 3:
21:59
That's pretty cool eventually. Right? I'm in the mindset there will be self driving cars. How quickly dial. No, but there'll be on the road at some point. I think most people kind of get that the adoption can range, but at some point we're going to have that too. Now all of a sudden I don't have to rely on a person to come pick me up. A car is going to come pick me up when I'm 85 and take me to a new location to go see my doctor. Yeah, I mean it's, it's a big difference. That's a change. I mean I think you just, you can drive anywhere in the country. Let's just take where we are in Omaha and Nebraska. Um, or at least where you are a lot of the time to anybody. I'm hearing all the time is, I mean if you just go look at the number of healthcare facilities that continue to go up and people think healthcare, they think what doctor hospital, but really you should be thinking assisted living, longterm care, memory care, all of those things that go with it and I feel like everywhere you turn there popping up on every corner, why?
Speaker 3:
22:53
Because the future is going that direction. It, it, it's, it's inevitable based on everything that we see happen. I want to give you some real stories here of what I see in the financial planning world of what I do with a lot of our families. So I run, like you said, most people say, Oh, age 90 so actually every time I put up on the screen we run a to age 95 minimum. However, for others that actually feel and believe in the longevity story, we'll run it to a hundred they just did the one the other day to 110 of showing them what it looks like because again, now here you are. I love your analogy of, Hey, I'm using Uber and I'm 94 years old, but now I can get around, I can go do stuff and I'm happy. And I told the story several weeks ago, you weren't on the show with me.
Speaker 3:
23:37
I got a chance to meet legendary hall of fame announcer here from Omaha. Um, his name is Jack Payne, and he was, what, I can't remember, 93 or 94 years. Um, and he was flying through the airport by himself and he, I would have never guessed his age, but he was just going and I think we're going to keep seeing more and more and more of that in what happens here. Um, so one thing I asked you, Jamie, is, is like how do people actually get over this? Like how do they understand? Because most people are like, I'm black. It's not gonna Happen to me. I'm going to die early. But you don't know. I mean, unless they got some crystal ball I'm not aware of. I mean, I think two real quick things there, right? One is right, what's the downside of planning to a hundred?
Speaker 3:
24:19
Right? Why don't the downside is of running out of money at 90 when I'm still alive. And my great grandmother lived to 102 and when she was 98 that's actually when uh, her husband died. And I remember she went to my grandfather and she said, how am I okay with money? And my grandfather said, dad left you enough. You'd be fine to 105, no change in your lifestyle. She goes, well what do I do after that? Yeah, what do you, when you get five or seven years from it, it's pretty important than, and we can't have that situation where we run out of money. We can't know. So Hey Jamie, I mean I appreciate this. You've been talking with us about requirement. I just heard. So we have 20 books remaining. So the next 20 callers we'll give you a free complimentary copy of Jamie's book. (888) 419-8513 that's (888) 419-8513 hey, come on back. We're going to give you some more ideas on how to rewire your
Speaker 2:
25:14
retirement. Any major decision in life is worth getting a second opinion and financial planning is no exception. Let's talk about how you could make your money go further in retirement than you ever thought possible. Called Carson wealth. Just schedule your free initial analysis now at eight eight eight four one nine yes,
Speaker 3:
25:31
85 13
Speaker 2:
25:33
did you have a lot of assets but are short on cash? Learn how you can leverage your assets to free up cash with Carson wealth by calling (888) 419-8513 and now back to wealth from wisdom with Carson wealth. Welcome back to wealth for wisdom. I'm Paul West, just
Speaker 3:
25:50
joined by Professor Jamie Hopkins here, leading author of a book called requirement while the phones rang a lot there. So thank you everyone. I'm giving you a copy of the book. Um, but we've been spending some time talking about we're just what true income planning is. Most people do income or excuse me, retirement planning in terms of contributing. Then we just talked a little about distributing, but one of the things that we need to spend some time on, I'd like to ask you because it's a part important part of your book and I will tell you in working with families across the country and you know what irritates them the most? Tea taxes, yes, yes. Over anything else, returns, insurance, all of that. Pretty simple. You told the story earlier like, Hey, who actually you've had, you've done, you know, all these speaking, you know, all three years.
Speaker 3:
26:39
I mean, I can't believe you've been over 60 nights this year on the road and, and a quarter. So again, bless your wife for that, uh, that, you know, people don't feel like they're truly comfortable. If I can tell you one thing, I've asked a similar question in front of audience, but I had a different question. Hey, how many of you want to pay more in taxes? Anybody raised their hand? No, of course not. No one wants to, it's is like this thorn in your side that you can't ever get to go away, but you want to minimize the amount of pain. So as you look at and you've thought about and rewire moment in how important tax planning is not tax prep, what would you share, you know, as part of your thought processes is like how important is tax planning and tax diversification for everyone?
Speaker 3:
27:29
Yeah. And you just gave a great term there at the end. The rest of it was all good too. But the last of the things, that's all you heard actually. So I'm glad you're back with my dad. Just wait to the last word and go off of that. And that was tax diversification. Pineapple and pineapple is also delicious. Okay. Uh, but that they don't grow well here and uh, it's hard to believe you can get insight plants, but that's a different story. Uh, so when we think about taxes, right? People don't like paying taxes. We know that right? The, this country was almost founded because we don't like paying taxes right now. This is a really, uh, kind of fun thing. Do you know how much a right, so, you know, when we have Boston tea party and Brea revolted from Great Britain and to break wasn't quite alive, but I've read a lot about it.
Speaker 3:
28:15
You've heard about this, right? It occurred at some point in our history and uh, you know, most people know that they, you know, one of the complaints then was paying essentially the colonies were paying back taxes to Great Britain without representation. Eventually became kind of a phrase right now, do you know how much they were paying in taxes? Then you want to take a guess, it kind of, it, it's not perfect a accounting system, but from a percentage standpoint, a percentage of what we would call income today, 52% 52% actually it was great last night. I ask, same question. I got 54% so this is a, you know, so smart people must kind of think alike here. One to 2%. Yeah. They paid one to 2% in [inaudible] 52% of 2% yeah. Right. So yeah, right there. Like 1.1% real close, almost hit it right on the head.
Speaker 3:
29:03
And it's amazing, right? Our founding fathers would revolt if they saw the taxes today. Right now obviously the government provides more services than it used to do. The colonies a little more little more. Right. And it's actually one of those things they revolted and they were actually paying less taxes than they were in Great Britain when they move here, right? No, they still move to a lower tax area. Got Mad about it. People just don't like paying taxes, period. Now. So what that means is you don't tax prep, right? As you said, you know, is last year we do the best we can on that. But tax planning is important because we're doing something for the future that we don't like paying. And what that means is we should pay the least amount of taxes as we're legally required to pay. That's it. Right? And that's not avoiding taxes.
Speaker 3:
29:51
It is doing planning and the government wants to encourage us via taxes to take certain behavior. So one of the great tax planning vehicles out there is tax diversification through things like Roth savings accounts, doing Roth conversions. And if these are terms you haven't heard before, um, you know, it's time to learn about them. And Roth savings is amazing because really what it is, you pay taxes today but then your investments get to grow tax deferred and then as long as you meet certain requirements to the account, you can pull the money out in retirement, right, without paying any more taxes. And that's really cool. And retirement because your income in retirement, your taxes will also can also cause your medicare premiums to be higher and your social security benefits to be taxed at a higher rate. So Roth call that the triple whammy. Yeah, it's the, the, the tax torpedoes.
Speaker 3:
30:41
When all of a sudden we have, you know, distributions causing things to be taxed. But if we do tax planning ahead of time, we can lower our medicare premiums and lower overall tax bill in retirement. So we have more money to spend on the things we like spending it on. I had a, you know, a client that I was working with with an advisor one time and he said, I'm okay with, uh, you know, by advisors. And he was talking mostly about a CPA at this point. I'm saying I'm okay with my advisors and CPAS and attorneys making mistakes. I get everyone makes mistakes, but they can't make six figure mistakes because we had just shown him that he could save six figures in taxes over the course of her retirement through planning that he wasn't being given advice on at that time. Yeah. And I'm sure how he felt when he left that room was injured.
Speaker 3:
31:29
Yeah. He was happy and upset at the same time. You're on both ways and the emotion and, and I think what happens again is people let their life get, I can't use the B word, um, of busy. So the, I, it's always gotta be prioritized. Many people of course, it all behind. I mean, they've heard me speak about this is, you're so right. And I think that's where people need to stop. And if they can do a Roth great, you know, tax deferral to become tax for free. That's fun, right? That's, I call it fun. It is fun because I don't wanna pay taxes. So I love your story about, you know, we're all wired from as a human, it seems like they, we don't care when it is where it is. We don't care at what percentage or dollar with a 52% or 1% that we don't ever want to pay attack.
Speaker 3:
32:17
So why we don't spend time to look at how we maximize this. And I'll give you another example. So sometimes people think, oh, well I want to be invested in real estate or I want to, um, you know, get income from other sources and they don't care. They wanted at any, but they don't think about the taxes or they don't think about the net tax effect. Um, or worse yet, I'll share it. I'll share this with you. So I'm going to say right now. So if you retired right now, and let's just again for illustrative examples, say you had $1 million, but you needed to get, you know, gins, use simple math here, $50,000 a year out for the rest of your life. However, what if you decide to retire now? And like a lot of people, they love to chase risk in terms of return.
Speaker 3:
33:09
So we, and so now it was all in a 401k. So you're rolled it into an IRA and you kept your asset allocation yourself because you wanted to, for whatever reason, 2020 we have a 2008 event and the market drops 35% and your 1 million goes to 700,000 guess what? You still need 50,000 a year. You've got less money to do it from less likely to success, but you're paying taxes. So it's like you've created this situation and maybe it would have been better do a Roth conversion or a partial Roth, and I'm sure you talk about this in the book, is you got to look at all elements here, not just one pathway. Yeah. And that's the whole thing with taxes is that it, you can't make these decisions when you're doing tax planning. And what I say a silo, right? Like we can't shut off the blinders and say, yeah, we just want to do this and invest in real estate, or we just want to do this and do you know, whatever it is, we have to look at the overall picture because taxes impact everything, right?
Speaker 3:
34:09
It's just, it's, it's just overarching umbrella across everything. So when we're making decisions about one asset, one investment, one distribution, it's having a longterm impact on our taxes, especially from retirement accounts. As we start hitting required minimum distribution, age of 70 and a half, we're now being forced into taxes, right? Like we all have to start paying taxes on stuff that's coming out of this account. And if we didn't do planning prior to that, we could be forced into higher taxes than had we just done planning the five years prior. Right. And I don't like paying taxes any more than anyone else does. And I definitely don't like being forced into higher taxes because I didn't do planning. Yeah. So let me share with you. So I have somebody who's got some, you know, profit sharing plans. They have some taxable accounts, they have a little bit of Roth and there's 62 and they're contemplating that retirement decision.
Speaker 3:
35:02
So I visually show them again [inaudible] 95 or they can run out of money or not. But also I run a five year quick cashflow to show them simple. It's, it's complicated behind the scenes, but what you see is simple. But I always go out to age 71 why? Because I want to show him that little line item that shows them the distribution from their account that they're forced to take. And nobody again likes that like pay and taxes. And so as I think about this, if you want a free customized tax reduction analysis that could show you how you could save thousands of dollars like Jamie just shared with you, give us call (888) 419-8513 we've got advisor standing by to help answer your questions. That's (888) 419-8513 you've been listening to Professor Hopkins and I'm Paul West and this is well from wisdom.
Speaker 2:
35:51
Have you ever wondered how do other people get away with paying fewer taxes than everyone else? Learn how you could save thousands of dollars in taxes by calling Carson wealth at (888) 419-8513 social security risk, taxes and healthcare. This is where you can count on straightforward and objective advice on the biggest challenges with investing for retirement. And now back to wealth from wisdom with Carson wealth.
Speaker 3:
36:20
Hey, welcome back to wealth from wisdom. I'm Paul West. My cohost today has been Jamie Hopkins. Jamie, it's been a lot of fun having you on, uh, author book called requirement. And we've been spending some time talking about taxes. Our favorite topic there, income planning. We've been talking a little bit about your returns and what things look like. Um, but I think you know, really is you look at retirement and I think what's so fascinating, why I'm glad you're on the show here today is this, you speak, you get to talk to people throughout the country. So we're not isolated here in the Midwest. Um, those of us, you know us here at Carson wealth, we're a nationally ranked and Barron's and Forbes top advisors across the country. We're work with a lot of families, but what we see is the same principles apply in a lot of things.
Speaker 3:
37:06
And especially about financial decisions. I don't always mean about real estate or your football choice or your basketball choice or whatever that is. But when we look at things that happen, people tend to think financially in a, in a, in a vacuum or in a silo, like you said earlier, Jamie. And so what happens when people, I call it, they have their blinders on of what's happening. And I would say one blinder that's on, and I'd love to hear your take on how it impacts retirement for people is blinders with the reality of there are such things as bear markets and recessions that happen. Cause right now we have this huge recency bias. We're on a 10 year run and then people just forget that their accounts can go down fourth quarter, 2018 did give them a little bit of reminder, a little bit of pain, but this sharp jumped back up his completely wipe that from their memory banks again.
Speaker 3:
37:56
Yeah, I mean, and this is a serious topic, right? And it touches on a lot of different things. Uh, I think it's a topic that I'm getting more and more questions about what I'm out talking to people again. Um, I'd say for the last six years it really hasn't been much of a topic, but it's coming back recession. And you know, it's a scary word to a lot of people because people still remember 2008, 2009, 2010 but we also now remember an amazing nine year period here in the United States where, you know, job, you know, jobless, you know, NIST has just been dropping down, down, down. People are getting employed. Um, you know, debt has been a little bit better in some, in some ways by looking at it. The stock market has just been on an upward trend. Everything felt strong. Then all of a sudden we're starting to see some indicators of slow down, right?
Speaker 3:
38:50
Um, some of the GDP growth might be slower in this quarter. We saw some of the job growth slow down and then we saw something that a lot of economists look at to help predict recessions. And that's the, what we call the bond curve or bond yield. And what really, what we worry about is that, you know, the long term bonds when investors are essentially saying, I don't want to take that longterm position anymore. And it kind of inverts and uh, we're actually getting paid kind of less for long term than short term. And that no in normal kind of investing shouldn't be occurring. And that's occurring right now. Now that doesn't mean that a recession is going to start tomorrow. It doesn't mean that one's going to start in six months, but it's an indicator. It's something to think about. Now the big takeaway recession is you can't control recession.
Speaker 3:
39:37
The Fed can't control recessions. The president can't control recessions. So part of the Michael [inaudible], you're sure, I'm pretty sure on this, it's part of the market cycle. It's actually to some degree healthy for markets to have recessions. It causes companies to go back and get lean so they can grow again. Um, and it occurs. And so if we have one again that's, we're going to certify this, if at all is, well, it depends if you're still alive for it, right? But yeah, if you live through another, we're going to live a long time and we just talked about it earlier. So when we go through another one, right, if that's starting to worry you, you start seeing news articles, she starts hearing people like us talk about it and it concerns you. What that means is not that you can stop a recession from occurring, but that you need to stop what's worrying you from occurring.
Speaker 3:
40:28
Yeah. Right. Yeah. That's what you're in charge. You need to do something about that thing that bothers you but you don't do a darn thing about it. Yeah. I hope that made sense in the way you say it is that thing on your to do list or your honey do list or your task list or whatever you want to call it that you know is super important. But if you just get it done. We actually, here at the Carson Group, we use a philosophy called traction. It helps us to be effective as leaders in our organization and there's a technique called Ids, you know, figure out the issue, discuss it and solve it and I'm going to tell you Jamie, I love when you get to that soft part and something's done cause guess what? You move on to the next thing, but you feel so good.
Speaker 3:
41:12
I gave him until you and I look at this, how many people come in this door, call us and they have a trust that was written in 1997 or a will that was written in 1997 and they still think is applicable day. But how many tax law changes if we had then many different presidents and certainly styles of administrations that we had since then and is probably not modern. I'm going to tell you is not. So it's not going to work. There's going to be huge misses in there and you have to think about, um, and especially now if or when you know this downturn in the market happens, it is this gigantic impact to you, case in point, I have a local professional, again going to retire later this year as enough money to live the rest of their life. At least the way they want to.
Speaker 3:
42:02
Like we built their financial plan. It looks like that. But guess what? They love to take a little bit of risk. You know, they love the by themselves. Some individual stocks. I don't like to talk about individual stocks on this just for compliance reasons mainly, but is that's okay. But again, just think of the big name stocks you seeing all the time like in the Fang analogy or others that people love to buy. But I said, what if, what if, again, this downturn in the market happens and all those great high flying stocks had been awesome the last several years aren't flying that way anymore. How are you going to feel? Not good, not good at all. So the only way to avoid this is control what you can control. I like, I like what you said. I can't control every session. I can't control the bond curve.
Speaker 3:
42:49
I can't even control bond price. So why am I, why am I thinking that I can't control if I buy a Muni versus corporate, and again, I know we talked about taxes or whatever, but there's another mistake I see people make all the time. I don't want to pay taxes so I'm going to buy Munies, but they don't actually run the analysis. Is the Muni or the corporate actually more beneficial for you on tax rates? Yeah, huge mistake. People make why a corporate may be more beneficial from you from a total return perspective or really a net return perspective, uh, after your tax payments. But not everyone thinks that way. Why? Because you've got those blinders are getting, must not pay taxes, therefore must only buy municipal bonds. Yeah. Yeah. So, hey, you know, I've enjoyed having you on the show today. Jamie, any parting thoughts you want to share nationally acclaimed author?
Speaker 3:
43:36
Um, you've been talking with our group about requirement. Um, uh, good news is, is I did find, they just texted me here that we have 17 more books left in the back of, they found a few more besides the initial 28, eight, eight four one nine 85, 13, if you'd like a copy of Professor Hopkins' book called Rewire meant eight eight eight four one nine 85, 13. But any last thoughts for our listeners today, Jamie, and just what you see in the world of rewiring? I'm going to give you a three and I'll be quick one right at, you know, have a plan for your debt, right? That's very simple, but a lot of people don't. So if you have debt, credit card, debt, healthcare, whatever, have a plan for it to have a plan for saving for retirement and three, right? Enjoy yourself, right?
Speaker 3:
44:22
That a lot of people forget that money's there, right? As a means to an end. So make sure that those things lead to something that you enjoy. Yeah, I love it. Live your life by design, not by default. Enjoy your time here. I, I gave a speech the other day and I talked about it. We all have three decisions to make while work currently employed or are heading towards retirement. Either I have my business goals, I have my family goals are my personal goals and personal goals for a lot of people fall to the end of the list and not saying that's a bad thing, but they cannot be forgotten because when they're forgotten, you need to refill your own bucket of your energy, your exercise. Food are superfoods are secret, superfoods or whatever they are. Um, exercise, but also your personal financial situation if you want us to help. Look at it. (888) 419-8513. Hey professor, I've enjoyed having you on the show today. Can you, will you come back to wealth and wisdom again for us? Yeah, absolutely. So happy to be on. All right, thanks Jamie. We'll talk to you all soon.
Speaker 4:
45:22
Risks, social security, income taxes, estate planning. Every week we talk about how to make your money go further in retirement right here on wealth from wisdom with Barron's hall of Fame Advisor Ron Carson.
Speaker 1:
45:36
Okay. And here's the legal Mumbo jumbo. The opinions voiced and wealth from wisdom with Rod Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC. An SCC registered investment advisor.