Wealth from Wisdom

5 Strategies to Help You Get More from Social Security

May 31, 2019
Wealth from Wisdom
5 Strategies to Help You Get More from Social Security
Chapters
Wealth from Wisdom
5 Strategies to Help You Get More from Social Security
May 31, 2019
Carson Wealth
Learn 5 specific strategies that could help you get more out of your Social Security benefits on Wealth From Wisdom.
Show Notes Transcript

How is it that two different people in nearly identical scenarios receive dramatically different amounts in Social Security benefits? Learn why on this episode of Wealth From Wisdom.



Speaker 1:
0:05
Okay, and here's the legal Mumbo jumbo. The opinions voiced in wealth from wisdom with Ron 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 assure success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SEC registered investment advisor.
Speaker 2:
0:34
Let's do it. Market hit another all time. Records as much as $10 billion in social security benefits go unclaimed every single year. The Federal Reserve announced that they will raise interest rates by 250 skyrocketing cost of healthcare and retirement could now run 350,000 words hard and for retirement. That's great, but it's what you do with that money that really matters. Welcome to weld from wisdom with Carson wealth. Carson wealth is a Barron's hall of fame adviser and 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 that could help you make the most out of every dollar you save for retirement. Welcome to well, from wisdom with Carson wealth when you retire risk his enemies,
Speaker 3:
1:20
number one. And the most effective way for you to defend against risk against yourself is through what we like to call here on wealth from wisdom diversification. I welcome back. I'm Paul last. So glad to have you on this week's show. Hey, my Co's today, the one and only Jim Caldwell. Jim, welcome back to the show. Thanks Paul. Yeah, glad you're here and you're looking Tan. So somewhere must be off to a flying start here.
Speaker 2:
1:42
Feeling good. Uh, you know, I love college baseball. So this past week we have the big 10 championships here in Omaha. So I took in a couple of games.
Speaker 3:
1:50
Yeah, it's fun to watch and uh, just, you know, first of all, college athletics is great because the spirit, the motivation, just the, I call it the purity of what happens there. And today's show, we're going to spend some time talking with everyone. Um, you know, I guess baseball, you have your game plan, right? You have your lineup, you figure out who's going to do what. Well, in life you need a financial game plan, but everyone thinks it's, hey, it's about what you make, but it really, it's more about what you keep, what you earn and making sure it lasts throughout your lifetime. So you have to think about all sorts of things. Taxes, income, investment returns. But really one of the most common mistakes we see people make right now is diversification. And Jim, on the show, we're gonna spend some time talking about that a little bit in terms of, uh, I like to call it the dial.
Speaker 3:
2:38
Um, you know, and when people tend to turn up the heat, so, uh, what what I mean by heat is the heat of returns. They weren't chasing returns. Yes, there we go. It is, it's, it's um, hey, maybe over trying to over boil water as fast as you possibly can, or, um, hey, you know what, maybe I can cook those steaks on the grill a little bit hotter just to get to be done a little bit faster. But do you need to, and so when we look at, I think that most expensive mistakes people make are one, getting gouged by taxes to losing their clothes and a stock market correction. By the way, from any of you listening, you maybe have already forgot that those types of things happen and three, not producing enough income in retirement. So let's talk about these. And Jim, I'm going to call him diversification.
Speaker 3:
3:26
Blind spots. So I have two new 16 year old drivers in my home and that's been a lot of fun. Uh, from a car insurance perspective, 252% increase. Yeah. So from, from a life perspective, Jim, I'll tell you, there's nothing more fun than watching those kids how excited they are to go out and drive by themselves. You know, it's funny about it is is they want to go, hey, we're going to go get food. Um, uh, but the chance, it's a sense of freedom. Uh, but there has to be rules around the freedom that's for sure in terms of who gets the car. When I'm, by the way, uh, who's going to refill the car with gas, uh, and all those other fun decisions that go with it. But I want to talk about Jim here, back to the show about risk. And so first blind spot we see.
Speaker 3:
4:15
And by the way, I did have to teach 16 year olds about blind spots and cars and what those are. You know, I don't know a lot about cars. It's not my specialty, but I didn't know when we were on the search and actually I engaged professional to help me find a car. It was easy. It makes sense. And I told them that, hey, I don't know enough about this. So I'm entrusting you. The funny part is actually Jim, that's similar to our business model. As a fiduciary, we have a legal and ethical interest to always do what is in our clients' best interests. So when people give us money to manage, I have to make the best decision for them versus me. So let's talk about that first blind spot and that is people's investment allocation doesn't match their risk. I can't stress this enough.
Speaker 3:
5:00
It is crazy to me how this happens and we're, we're in this situation right now, Jim, where because 2019 has been off to such a great start that many people are comfortable with buying more stocks than ever before or Brian, more equity based ETFs. If you don't know what an ETF is, an exchange traded fund. But the reality is is they don't need to be taking that much risk. But they don't know that. And Jim, I think you, you see this all the time, they don't even have a clue that that they've actually turned up the heat on their risk dial.
Speaker 4:
5:37
Most people don't understand what they own, Paul and they don't have any rhyme or reason for why they own it. Example, we had a household and we've been working with, they're retired now teacher and another gentleman, he had a four o one k and a four 57 plan where he worked and he, based on taking a risk questionnaire with us, which everybody has a version of that. Obviously everybody thinks there's this, the best. Ours I think is very accurate. Uh, and it only takes two to three minutes to do. Once we did that and we did a side by side with where he was, he had, he had a total misconception of where he was in those two retirement plans. Yeah. Good news is we were able to roll those out of there in the appropriate way and diversify based on what he really needs now moving forward in retirement. Yeah.
Speaker 3:
6:25
As I said, Jim, I mean as he sees it a bit like how did he make that decision? Like what, what was the information that became available to him? Cause I think that's important for our listeners is each one of you an advisor or planner, a fiduciary, they can give you that information but you still have to make the decision. You still have to be comfortable. So how did he actually make that decision?
Speaker 4:
6:46
So that's a great point. So we see it all the time where people bring in statements and they just kind of slap him on our table and they're waiting for us to just go in there and kind of tear it to shreds or at least, you know, put that second set eyes on there and that does it work. What we did in this situation and in most situations is we just did a quantitative analysis. We just kind of brought him up to date using our technology as to, hey, here's your world as it sits today. Now do you see anything here that makes you uncomfortable or what do you like? Or what don't you like? Or what would you like me to educate you on? So that at that point it's a lot of open ended questions. And what really got him over the hump was when we then took all that data and did a simple side by side with, okay, based on your risk tolerance, based on this quantitative analysis and based on our solutions that we feel work well for our families. How does this look to you? And I mean, it was like the wife immediately said, I liked that a lot better. And the husband had, he couldn't even talk. So at the end of the day it worked out very well.
Speaker 3:
7:54
Yeah. That's good to hear, Jim. So I think you and I both can maybe share with people. So besides, I want to share some of these blind spots. Uh, we're both in Chicago last week. Um, you know, we, we look at this wonderful world of financial services. Um, I actually tell people I don't feel like I work. I love what I do. And so I enjoy educating people. I enjoy making change happen in our industry. I enjoy making sure that successful people and families actually carry out their life switches, that we, we hold an event because of what we look at doing is, we were in Chicago last week at what we call our excel media. It's, I want to share some stories. We have some phenomenal speakers. Colonel Arthur Athens, we had Michael Dubin, the founder of Dollar Shave Club, uh, Avery Johnson, you know, successful NBA coach, all of those things, Alabama.
Speaker 3:
8:49
Um, but one of the things I will share with you is people keep doing the thing over and over again and making mistakes and don't get tired of it, or more importantly, don't want to make a change. So let me just give you an example. Last week, you know, how many of you out there know about Dollar Shave Club gym? Yeah, yeah, yeah. I mean, we all do. It's a story. Um, it's interesting. You're like, how can I have razors for a dollar? Well, of course shipping was actually $2 when that happened back, you know, five years ago. But they're really a full service product company. But I had a chance to interview Michael Dubin and Jim, I'm going to tell you, you a fascinating entrepreneur, but what he said was his, how did he figure out to start this company? He said, when you experience a problem, you're not the only one experiencing it.
Speaker 3:
9:40
So what I will tell you is, is his story was, you know what, what does everybody do with razors? They sit there and if you go to a pharmacy, somebody's got to go unlock it. It's like 20 bucks for four or five blades. So then what do you do your shaving with it? And you know it's dull but you don't want to go back to the darn store and you don't want to pay four bucks a blade. So what do you do? You keep using it, using it until you cut yourself or there's a problem. And so that's what everybody did. So he said, hey, why don't we take the decision on when you go to the store, out of the equation where if it's just refilled automatically and it shows up at your doorstep. So that was the problem you solved was interesting. If you haven't looked at his videos, he, he uses humor for his marketing.
Speaker 3:
10:24
Uh, so you know, that helped build his brand and his identity, but he helped solve a problem. Now of course they're in many other lines in between soap and body wash and all those things. But why I bring this up is so many consumers today have a problem of they bought some stocks or bought some funds or bought something and now they don't want to go through the exercise of actually identifying are they taking too much risk or not? So what do they do? Nothing. Zero. They got quiet just like Jim did there. They do down the road. Yeah. So they keep using this dull razor on their portfolio. But what's going to happen, it's going to cut at some point. What Co means to you is, is if you're taking too much risk, you're going to start bleeding. At some point we will have another economic downturn.
Speaker 3:
11:20
We will have another abnormal world event happen that creates challenges out there. But don't let those blind spots happened to you. And I think I love the story from the Dollar Shave Club is, is let's figure out ways to solve problems for people. But importantly, you know, if you're standing in front of the mirror right now and you get up in the morning and if you look in the mirror and you think about you and your family, are you really making all the right financial decisions? Most people would probably say kind of maybe I don't think anybody would, yes or no. Yeah, I think they would Jim. But you know, on a y because of ego. So, and I, I love this, I heard this phrase all Chicago, I'm going to talk about him and a little bit, his name is Chris Davenport, world famous skier, world champion skier.
Speaker 3:
12:07
And one of the best things he said and the entire time is do not let your ego or your bias get in the way of good decision making. Do you not let your ego or your bias get in the way of good decision making? And he's such hands on. Correct on that. And I would say the same thing about your portfolio. Don't let that happen. So if you want someone to help you look at whether or not you should have your portfolio rebalance or it's time to update it, I know it's been several years. We can help. (888) 419-8513 that's (888) 419-8513 if you're the type of person that really wants to maximize the most out of every dollar you've saved for retirement, give us a call. (888) 419-8513 you're listening to well from wisdom.
Speaker 2:
12:53
Do you own an annuity? Inflated fees and commissions could be costing you an arm and a leg. Good, 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 longterm 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.
Speaker 3:
13:27
When you hear the word diversification, you immediately think of investment diversification. But really diversification is so much more than that. It's not just a mix of stocks, bonds, mutual funds. This commonly overlooked pillar or financial planning also plays a critical role in what we call income generation. If all of your eggs are in just one income basket, it could actually turn out to be a financial disaster for you. Hey, welcome back to wealth and wisdom on Paul asked, my cohost today is Jim Caldwell. And today we're talking about these five diversification blind spots, but more importantly, how to avoid them and coming out in this segment, we're gonna continue to give you strategies and real world investment advice on how to make it happen. Also going to share some great stories. We run a national event, it's called Excel, uh, helping people get better. Uh, so let's talk about blind spot number one was diversification.
Speaker 3:
14:21
So blind spot number two is not consistently updating your plan. And so the key really to managing risk is we often look at as rebalancing. And rebalancing is really a key to maintaining your risk levels over time. And really the goal of diversification is not to, you know, excel or I would call boost your performance gym. But it's really more about protecting yourself from losses and protecting yourself from not being able to live out life the way you want to. So see this all the time, Jim, right? I mean, what do people do? I mean, I can't imagine saying, Hey, oh, I mentioned in the last I'm going to have two recent 16 year olds. I have to continually update the car plan, right? I gotta put gas in it, I gotta change the oil, I gotta get the brakes fixed or what happens? I got a problem. Yes, I got a car wreck. I create danger. I create lack of safety. The same thing as not consistently updated your financial plan. You're putting yourself in dangerous situations and you're creating a safety concern for you and your family. You wouldn't do that in your car. So why the world wouldn't you do that on your financial plan?
Speaker 4:
15:31
Well, because people adore that. I mean, they let their ego get in the way. I mean as a fiduciary we are required to meet with our families at least once a year and with that, the ones that do have a financial plan we have, we are required in their best interest and ours also is to update their planning paperwork because all of that paperwork, there's an area that you check boxes as to what you want to cover or what you want to make sure they understand and that the, the the dots connect accordingly and you go through that together with them to make sure that things haven't changed or additional items need to be added. So very important to keep that up to date.
Speaker 3:
16:08
Yup. It is. I mean, and I know we stress on the show, I'll, I can tell all of you is this I, I can't, I can't describe it. How many times I get introduced to someone and I asked them when was the last time their plans updated? They're like, oh it is. I said, okay, well what's your will look like? Yeah, give me a copy. Exactly. Give a cup your will. Jim. Last week, 45 year old has a child under the age of two. They don't have a will. We see it all the time. I mean, I mean it gives me the shakes. I know right now somebody who's listening is shuttering and what are you doing? You just looked away. You just, you just want to shut off the radio because you don't want to deal with it. But no one wants to think about the inevitable, which is death.
Speaker 3:
16:54
But you, you have two choices. Either you can embrace it, understand it's going to happen, but you better at least prepare for it. And one of the ways you prepare for it is actually putting a plan in place. And if you don't, you're just, you're making a serious, serious mistake. And the, and the funny part of it's not funny actually. It's, it's serious. So bad use of words there. The scary part of this for me is, is when you ask people what's most important to them, what do people say? Their family. Family, yeah. It's, we don't even have to think about it. This is a no brainer. So families, most number one important thing to you. And yet from a financial and legal perspective, you don't protect them then is it really, I'm going to challenge you to think that way because what we don't see people doing, I just need to be transparent with all of you, is you gotta make that happen.
Speaker 3:
17:44
So that's why it's a blind spot. And why is it a blind spot? Is, is because you think if he did eight years ago, 10 years ago, I mean I just got another will and the other day it was 1991 27 years ago, the world's changed. Things have been updated. And so those are the types of things that we want consumers and people to look at. So Jim, let's move into blind spot number three. Um, and this is one that I, you know, it's not as easy to deal with when you're working, but when you move into retirement, it's easier. Uh, and that is people don't diversify their income. So I mean, and by the way, diversification is so much more than just investments. A diversification is your income. So, I mean, if you think about retirement, you have your retirement plan or your assets. So it's funny, it's like your whole life, you get paid from your employer. If you're a business owner, you pay yourself, but then when you get into retirement, you now have to start paying yourself for money that you've saved over your lifetime.
Speaker 4:
18:44
Sure. And the key there is, and we've talked about this before, to me, would be the tax ramifications of where you take that money from. And we've talked about how tax planning differs from tax preparation. People don't have that tax planning. They don't take it from the correct buckets and they end up paying more money to the government in retirement than they probably did when they were working.
Speaker 3:
19:06
Yep, they did. And so let's think about that. So what are some income sources? So your retirement accounts, social security, for many of you, by the way, um, you know, it actually ensures the success for so many people is actually delay taking social security. Correct. Why? Because it grows into mar and you and you get more and, and so, um, I'm not saying that's the right decision for everyone, but there's empirical evidence. We have a gentleman who joins me on the show frequently. His name is Jamie Hopkins. He's our director of retirement research and he loves to talk about that and cause he's right, but the, the challenges is people don't listen. Ah. So we want people to listen. Um, but also income, you know, people throw money into a bank account. I mean, and if your money is sitting there in a money market, in a bank, unless you moved into the highest earning, highest yielding account, which very few people do, what happens
Speaker 4:
20:00
makes you basically lose buddy.
Speaker 3:
20:02
Yeah. Well cause inflation runs a little over 2% and if you're making less than 2%, so the best way people can understand this is a gem. It's summer season's upon us Memorial Day weekend. Uh, probably going to be a few barbecues this weekend. I know for me either will be, and what do we do? We go grill. So what do we do? People love to grill. They pick up some chicken or salmon or of course steak or Burgers or whatever you're picking up. But what are people say? Oh man, I can't believe how expensive that was. I can't believe how expensive ground beef is right now, or whatever. The thing they're saying is expensive. Why that's called inflation. Things increase in price. Why to produce it, to pay the people that make it, to pay the packaging plant to be, you know, all those things. So there's a natural cost increased and that's called inflation, but you see it probably most prevalently at the grocery store. Yeah. So Jim, I mean I would say one of the things we look at from income for people is w have to make sure people don't spend down their retirement in a way that creates anxiety. And so what are other methodologies? So besides social security and retirement and account, are there other ways that people can generate income in their retirement?
Speaker 4:
21:20
So you could look it up, your portfolio and maybe you have predominantly dividend paying stocks. That's a nice way to, to generate income. Another way to generate income would be if you have solutions in your portfolio that are non correlated to the APP, to the market. What I mean by that is if the market goes up or down, it doesn't matter. It's totally a separate bucket. You can generate income off of that. So there's, there's two areas. I mean the big thing I think Paul would be, you see a lot of people that come in here with heavy four o one k and retirement plan numbers and to be able to start planning to take some of that money out in their sixties so that when they hit 70 and they take social security then and then they have to take their RMDs, that tie tacks bites going to be a lot less.
Speaker 3:
22:04
Yeah, no, it will be. And I mean, I think, um, Jim, a lot of people, I'm going to talk about this for an income perspective here, utilize, um, real estate, um, and especially a lot of, um, people say, oh, I'm going to go buy homes and I'm going to flip them, or I'm going to go buy homes and I'm going to rent them. And I see our producer Meg's gritty and they were there. So maybe she's debating it at this moment. And so here's, we're going to tell you, I am a huge believer in people make decisions with their heart and their soul more than they do on running. I'm going to call it the, the economic analysis. So what did I say earlier? Don't let ego or bias get in the way of good decision making. Where are we right now in the residential real estate cycle in terms of what that looks like?
Speaker 4:
22:56
I think we've made a comeback at this point I made. It's not where, it's not as bad as it was, but I don't think we've hit the top yet. That's my opinion.
Speaker 3:
23:04
Well, I'm, I'm going to be, I'm going to disagree with, go you the way that, um, I, I think we're in, I've used this analogy here on the show before. I'm a shared again, I think we're in the eighth inning of a baseball game. So since we got the big 10 tournament town, I'm just bring it up. Uh, so if we're close to the end, and again, I don't know if it's a nine inning game attending a game or an 18 end game, that, here's what I'm going to say. There's a famous bias out there that I've talked about on the show before. It's called the herd by us. And what does the heard by us mean? That means people tend to follow others who they've had success. And I shared this as no one wants other people who they feel aren't as smart as them to make money.
Speaker 3:
23:46
Let me say it another way. I'll just be direct. If you feel you're talking to someone who you feel is dumb. I know it sounds bad, but I'm just going to be directly, yeah, yeah. I'm trying to look at how in the world did they make money off of something like that. I know I could do it. Now what do we have we ever heard by US based on other people that have done things. So therefore they think they should do them. And I just bring this up to all of you because I don't disagree. Real estate can be a good income source for you, but you've better have experience. You better not put all of your eggs into that basket. Um, and you better be able to understand, um, the challenges that go into real estate income, whether it's single family rental homes, um, be super careful of rates.
Speaker 3:
24:31
They can be loaded and ladled with fee after fee after fee. Again, you need to talk to a professional. And by the way, if they don't put it in writing to you what their fees are for their rates or other, um, real estate type projects, then I get run. Right. Does, don't, don't walk away from this. Yeah. So, I mean, I think a lot of people successful retirement is they realize that it's not built on how much money you saved, but it's really built on their income and their ability to generate income in retirement. If you want, how are we actually have what we call a free income analysis? If you'd like us to run that for you personally? Again, it's always confidential. (888) 419-8513 that's (888) 419-8513 he really, if you're that type of person that wants to make the most out of every dollar you've saved for retirement, (888) 419-8513 we'll be back in a moment.
Speaker 2:
25:23
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 (888) 419-8513 do you have a lot of assets but are short on cash? Learn how you could leverage your assets to free up cash with Carson wealth by calling eight 88419008513 and now back to wealth from wisdom with Carson wealth. Hey, welcome back.
Speaker 3:
26:02
Do Wealth and wisdom. This is Paul West, managing partner at Carson wealth. I am joined with Jim Caldwell, one of our financial advisers. Jim, glad to have you here chatting with me today. Thanks Paul. Yeah. Uh, even though you're an Ohio state fan, I want to hold that too much against you and today's show and somehow it's not even quite memorial day and you look like you're in mid season, 4th of July. Tan going there.
Speaker 4:
26:23
Hey, I'm the joy in life. All right. I wanted to make a comment about planting since you brought up Ohio state. So I was sitting when I go to a baseball game and I love baseball and uh, but I, I always liked to watch the pitchers and catchers and I watched the pitching coach. If I can sit where I can see them and we talk about planning and preparation and everything. And it was interesting in one of the highest states in Ohio State, Michigan game, I was sitting behind the pitching coach and he had a huge notebook and every day at time of different batter came up, he flipped the page and we talk about the importance of planning. It wasn't that they were just winging it out there as to what pitches and what situations and where to throw it and what location. They had a plan. Paul and [inaudible], if you execute that plan, you win the baseball game. And obviously they did it well because they held Michigan to one hit in one run.
Speaker 3:
27:10
Wow. Yeah. So it's one thing you have to have a plan, but then you actually got to execute on the plan. Exactly. Um, and you bring it up. I mean, there's a famous movie of course, called Moneyball, right? I'm sure you've seen it. I seen that. And that really started the genesis of planning because what they do, they solved a problem. The problem was scouts, baseball, scouts sat around in the room and what do they do? They based it purely on what they thought. People who had athletic talent. Okay. So who looked at the biggest, the strongest and the fastest. Therefore they got the best contracts right when they were coming out of high school, college, et Cetera. Whether Audi is the world's actually moved into data interior of, and it's interesting how like Major League Baseball, that professional organization that all of these teams now are, are investing a lot of money in data and figuring out how to pay their players based on who actually brings the most value of the team.
Speaker 3:
28:06
Not just in home runs and Rbis, but all those other factors that go with it. And then data for pitching and figuring out how's the best way to pitch to people. What does it look like? Like you had the player stuff to carry it on the field, but they're building a game plan based on the data that creates the most likelihood of success. There was fun for me last week. Um, I was with one of our clients and he was telling me, you know, his son had this, the opportunity, you know, he actually now is employed with a major league baseball team and he's working on this project for the team. And that is, you know, how to pay their players based on overall performance and using data to look at it. So actually measurable statistics based on base percentage errors, all those things instead of, oh well we think this, this person deserves the most, so therefore, uh, we're going to pay them the most.
Speaker 4:
28:55
That's the old way of the open market value, right?
Speaker 3:
28:58
Yes. And don't get me wrong, and they're probably still be some of that because how do you rank, um, brand? You know, there's some intangibles in there that go along with it. But it's interesting that that's just, that's how the world's evolving and I, and I think it's a very cool thing. A to c. So now let's talk about Jim, you're talking about blind spots here on the show today. And I'm enjoying this because we want people to watch out for their blind spots. Um, because guess what? If you ever got in a car accident and you got an a duty, your blind spot, what happens now where your car insurance rates are going to go? Yeah, that's definitely going to happen. But you're going to check your blind spot every time now because you made a mistake. Right? And isn't it true for all of us as human beings that when we make a mistake, we learn a lot more?
Speaker 3:
29:45
I can certainly tell you as a leader and entrepreneur, I've learned more from my mistakes in my life. Then often you do from your successes. So blind spot number four I want to talk about today is the diversification of your taxes. I don't know what I mean by that is your, what do you think your biggest expense is going to be in retirement, Jim? Besides travelling to baseball games? Yeah, exactly. The food I eat there, the food health care expense, Paul, that's my biggest concern. Taxes I can work to figure out with, you know, my tax prep, prepare how to minimize it. I'm worried about healthcare. Okay. So you answer how most people answer. And your answer, you're more educated than most people on this could be. Correct. But it's not necessarily correct. Ah, so most people think it's either health care or their mortgage, but the reality is, is taxes, for many people tend to be your greatest expense in retirement.
Speaker 3:
30:43
Why you work so darn hard your whole life. And you put money in your four one k plan in your four zero three B plan, but you deferred it, attack. You defer the taxes on that forever. Now guess what? You've got to take it out. So not only taken out on that, what also is taxable to you, so scarcity, what else can be taxable? Interest, income. So now you have all of these things. So you actually, if you looked at it, and if you're getting $100,000 plus a year in income, um, and you're pulling $100,000 a year from your retirement account or 30,000 or just call it 70,000 pulling $30,000 a year from social security, you're now paying taxes, right? So whatever that number is for you for the year is a lot more than probably what you're paying for your mortgage or anything else. So it's something that you've got to be very conscientious.
Speaker 3:
31:37
A and w what I think one of those blind spots related to taxes is everybody says, I got I, I have a CPA or I got this handled myself. So what do they do? You know what are popular online programs? Quicken, right? Turbo tax, I don't know about turbo charges be one. People want to turbo charge, paying less taxes. The sure that people do it on their own. Why to save money saving money doesn't mean to save taxes. All you're doing is saving a tax prep fee. Huge difference. I'm going to talk to you all you, all of this right now, there's huge difference between tax prep and tax planning, tax prep. You're just doing the following. You are recording information. You're just, you're just scribing and writing down what happened in the past. The tax planning that is actually making decisions to influence what you're going to scribe next year in filing your tax return.
Speaker 3:
32:36
And in gym. It's so interesting when people send us a copy of their last two years worth of tax returns, if they're doing it on their own, almost every time we're able to point out something in value to them that they're missing and be like, we're not doing anything illegal. We're just helping educate them on better ways to do that. So a, by the way, if you want us to look at your tax returns and help, again, it's confidential. Um, if you don't want to do business with us, that's fine. Um, what we actually do an income tax return return analysis for you if you want that eight eight, eight, four one nine 85, 13. I know it's personal, but we are a fiduciary, so I have a legal and ethical obligation to you that of course includes your privacy, um, and those types of things.
Speaker 3:
33:22
But I'm going to share a story from Time magazine here and you have, this one's interesting. There's a $2 trillion tax bill coming do $2 trillion tax bill. Did you hear about this yet? No, no. You're like, Oh God, what Paul [inaudible], Paul Gallen with us this. So there's a $2 trillion tax bill. And by the way, if, if you're a baby boomer, I'm talking about you. Why? Because you all have what's called an RMD required minimum distribution coming up. So we, when when they look at the world, it looks like about there's a $2 trillion tax bill due from RMDS that are coming up here shortly because why? You're forced at age 70 and a half, you have to start taking money out of your Ira, your 401k, etc. And so you have to start taking this money. And so that's why this tax bill is due and people don't even realize it.
Speaker 3:
34:18
So when I look at tax diversification for families, there's really three ways to look at it. One is you can have accounts that are taxed always. Oh that's your brokerage accounts, your bank, your checking, your savings, blah, blah, et cetera, et cetera. You pay all your taxes on your dividends, your interest, your capital gains, you're gonna have accounts that are taxed later. So that'd be like your 401k, your Ira, your four one, three B, and then you're gonna have a counselor tax, rarely your Roth Muni bond interest, some life insurance, etc. But in order to take control, you've got to figure out what's the right amount of diversification to have in all of those. Um, and by the way, if you think you're alone, you're not, most people feel like they get clobbered by taxes in their retirement. But do you want to have that actually happened to you?
Speaker 3:
35:08
And Jim though, again, the only way I tell people to do is actually to do tax planning versus tax prep. So I shared, we do have a tax reduction analysis if you want help. And by the way, we'll just show you simple and actionable. I'm not going to go try to over talk you. I want to make it clear, concise, and something that you can actually act upon if you want that free tax analysis right now. (888) 419-8513 (888) 419-8513 don't let the government punish you just because you've been a great saver. Do something about it. Get up. Don't avoid it. Don't fall into that blind spot. Help yourself solve your tax problem. Not even solve a tax problem, but avoid future ones. Put more money in your own pocket. (888) 419-8513 you're listening to wealth and wisdom and we'll be back
Speaker 2:
36:03
in a moment. 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 well 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. Hey, guess what? You think you've got
Speaker 3:
36:45
all the top performing ETFs or mutual funds in your investment portfolio. But according to an article recently out of the Wall Street Journal, most top rated funds turn out to be dogs, not good. And I don't mean dogs in a bad way, or dogs in a good way. I mean, just things that aren't working well for you. Hey, you're listening. Well for wisdom. I'm Paul West, joined by Jim Caldwell and today we've been talking about five blind spots that we're trying to get people to avoid. And coming out in this final segment, we're really gonna talk about why one of the most critical mistakes people make related to their blind spots. But Jim, before I get to that, um, I want to talk about, uh, last week and I mentioned I was in Chicago. Um, you know, we've talked about, we had a chance to meet Michael Dubin, the founder of Dollar Shave Club.
Speaker 3:
37:34
Uh, you know, Avery Johnson was there, um, mirror. We'll check, um, founder and partner of Cogo labs, one of the most preeminent, uh, artificial intelligence and data collection. She told me something like they're collecting 10 billion rows of data a day. Billion. Wow. Everything is so fascinating. I'm not going to talk about on today's show, she's one of those people that you met and I was interviewing her from stage. We had a one on one fireside chat in front of the room and I'm sitting there talking to her, interviewing her gym. You, you've met those people that, you know how Uber smart they are, that they're trying to talk to you, but you can see their brains processing at a level that the rest of us don't even operate at. It's ever happened to you cause you're usually that person. I get it. I'm just humble. Yeah, that, there you go.
Speaker 3:
38:25
She said it sounded really interesting to me. And that is so your, your eyes, your eyes can process information at 10 megabytes per second. All right, you following me here? You're looking at me. So you're listening. You're pressing 10 megabytes per second. Your ears can only process 0.8 megabytes per second. So what does this tell you? What? We all fought, but now it's backed up by data. They say you understand something better if you can visually see it versus if you hear it, you don't always remember it or doesn't always stay retained. But now there's actually data that it shares that is actually 10 times more powerful for you to visually see something than to do that. So I think that was something that was super interesting that I wanted to share with our listeners. But also, um, we had a chance, we had a keynote session.
Speaker 3:
39:21
I was truly my honor, I got to introduce him up on the stage a world renowned a skier, um, by the name of Chris Davenport. Um, and I shared earlier, you know, he shared a story about climbing Everest. Um, and today he flies all around the world with people. They hire him to go skiing and he lays out the plan and build the plan for them. But he used the phrase, do not let your ego or your bias get in the way of good decision making. And here we are in the month of May. I saw, unfortunately there was a tragedy on Everest. You know, people pass away. It happens every year. You have to make decisions in every point in time. And Chris told his story about going up Everest and how every day he had to make the decisions on the safety of him, the safety of his team, and importantly to all the safety of all the people that were around them and how they approached it.
Speaker 3:
40:12
So one of the things he talked about and he shared what we called was the team method. All right, so here and he talked about risk. He said the biggest thing I'm trying to do on the mountain is avoid risk, right? I'm trying to prevent it. I'm trying to look out for it. I'm constantly thinking. So of course I was thinking about all the similarities between what we do in financial planning, but he had the team method. So the t stood for transfer. How does he transfer risk? He, how does he eliminate risk a, does he have to accept risk or em, how does he mitigate it? So I think it's a good thought process. Which one of those we were able to transfer, eliminate, except or mitigate one of the risks. Then I see this today with investors all the time with their blind spots is blind spot number five, transferring risk to making a decision based on past performance.
Speaker 3:
41:08
That is to me, um, scary. It's sad. Uh, so when you log into your 401k and you log into that portal, your four o three B, What Your Ira, whatever portal you're logging into. So what do people do if you're listening, listen carefully here because I'm gonna tell you, most people do this. You log in, you check out your return, then you go click on to see all returns of all the investment choices in there. And then you go look at it and you're like, Dang it, I didn't see that large cap value was the best. Or I didn't see that mid cap growth was the best, or I didn't see the bonds were the best in that down corner, whatever it was, down quarter. So then you make a change. Why? Because of past performance that has a matter. What you have to be looking at is the future.
Speaker 3:
42:05
And so there's a reason why successful advisers and people tell you past performance is no guarantee of future results. We don't have a crystal ball. I at least I don't have one. Do you have one gym? No, not in regards to investment returns. So why do people think that they should go online? Um, and by the way, I get asked this all the time and I'm sure you do Jim. So what do you do? So somebody says to you, Hey Jim, I want to see Carson's historical performance over the last five years. What do you say to them? Okay,
Speaker 4:
42:39
we see it all the time. But I mean, my, my thoughts on that is, hey, it's like the weather, the weather was a certain way the last couple of weeks. That doesn't mean the weather's going to be that way the next couple of the next couple of weeks. So I mean, to me, you've got to have a higher level of education to be able to give advice. We see this with a lot of do it herself or is that like to base every decision they make on the past. And it just doesn't work. It's not the most optimal way to set up your portfolio.
Speaker 3:
43:09
Yeah. So I love your weather analogy. Um, but I also, I mean I look at a lot of things here, so yeah, I want to make sure if I look at past performance that okay, at least they, they better have been in the game. You know, I'd love for if they exceeded, um, their benchmark. Uh, but at the end of the day that that's bedrock because if I need them to look out on the future, case in point, we've talked about this before. If I would have looked at a past performing great company, I could have looked at blockbuster video making tons of cash building up like crazy all across the country. But if I would have bet on them versus Netflix several years ago, even though on paper, blockbuster luck a lot better in terms of revenue and profitability, what would happen to me be in trouble? I'd be squashed, squashed, smooshed feet, put in your favorite, where'd the gym?
Speaker 3:
44:09
Why? Because I would have based my entire decision on the past and the world changes so quickly now that I need to make decisions on how we project out for the future. Taking a point. China, I mean, it feels like there's new news on China, right? Every single day. Yep. Couple of times a day. Yeah. Um, whether how much it's going to be in tariffs, whether is there radar know they're real return accurate or not. Um, and so I have to make decisions on what I think the future looks like versus the past. And I think that is one of the biggest mistakes. And many of you may be used, there's this tool out there called morning star and they do one to five star ratings. Well, here's what's interesting is, um, if, if you get a coveted five star rating, which is the best, only 12% of them did well enough over the next five years to earn a top rating, 10% of them actually did so poorly the next five years they went to a one star, which is the worst category. What does that tell me, Jim? Same thing. There's empirical evidence that past performance does not predict the future, but what you have to do is have a po portfolio designs that works for you, works for your income plan, helps protect you, your spouse, if you're married, your kids, your grandkids, and most people don't do this, so don't let that happen to you. Make a choice. Make a decision. (888) 419-8513 that's (888) 419-8513 we can help you out to avoid all these blind spots. Hang on, Paul. Last and thanks for listening to wealth from wisdom
Speaker 2:
45:45
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:
45:59
Okay. And here's the legal Mumbo jumbo. The opinions voiced and wealth from wisdom with Ron 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, an LLC, an SCC registered investment advisor.
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