Wealth from Wisdom

Hidden Risks that Threaten Your Retirement

July 13, 2019
Wealth from Wisdom
Hidden Risks that Threaten Your Retirement
Chapters
Wealth from Wisdom
Hidden Risks that Threaten Your Retirement
Jul 13, 2019
Carson Wealth
You may fear losing money in the stock market, but there are many other risks that could cut your nest egg in half!
Show Notes Transcript

You may fear losing money in the stock market. But there are many other risks that could cut your nest egg in half! Learn what they are on Wealth From Wisdom.



Speaker 1:
0:00
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. Consulted, qualified professional. All indices are unmanaged, I mean 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 and SEC registered investment advisor.
Speaker 2:
0:30
The 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 skyrocketing cost of healthcare in 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 Barron's hall of Fame Advisor 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 straight forward and objective advice that can help you make the most out of every dollar you've saved for retirement. Welcome to wealth from wisdom with Carson wealth. Hey,
Speaker 3:
1:14
hello for wisdom. I'm Paul West. I'm joined today by Aaron Wood, our vice president of planning. Aaron, welcome to the show here. Thanks for having me again. Yeah, I love to have you on the show, Erin. It's a lot of fun. Um, you know, lots of talk about, uh, we were off last week and so glad to be back again here with everyone. And we're going to talk about today. What are those hidden risks that threaten you and probably more importantly threatened your retirement. But what are those things that can, uh, get ya when you least expect it or are those annoying bug bites that if you don't put on bug spray since now we're in the dog days of summer, right? And they're bad this year. Yeah, they're out. Especially for those of you like yourself who lived down by the river. Yeah, we don't have mosquitoes this year. We have, you know, flying rats.
Speaker 3:
1:58
I don't know. Yeah, you got, it's, you know, obviously, uh, the tragedy that happened earlier this year, the flooding here in the Midwest, but a ramification now with the bugs and the displacement of, if you think about it, uh, the ecosystem there and what happened for everyone. And we're gonna spend time talking about maybe ways that you get displaced in the stock market. Uh, wow. We've had quite a run here in 2019 I'm going to tell you is we're watching people around the country, they're taking on so much risk and more than you can ever imagine. And it's scary to me. I think you need to be calculated in what you do. Um, and by the way, speaking of calculated and speaking of, I want to say congratulations to the, I'm a soccer fan, so congratulations to the u s women's national team, World Cup champions four times over, four stars for them.
Speaker 3:
2:48
Very exciting to see. That is amazing. And as you know, I'm not a big sports person so I, I don't follow things well, but I saw a graphic that had like the last 10 years of where they've placed and it's continual like toddler. Yeah, that's amazing. It's an amazing run. Um, congratulations for all of them and congratulations not just for winning, but I would call it, uh, being inspirational. Uh, if you don't think about it, I mean they inspire another generation of youth. Those people, and I heard this one time, I know you're not into sports, but I'm going to share an allergy here with you that if you think right now, who's your favorite take it if it was your favorite NFL team or your major league baseball team. And if you think right now who it is, and so if you go back in time to when you were approximately seven, eight years old or they say second grade, they actually say your favorite sports team is based on who was good at that period of time.
Speaker 3:
3:44
I absolutely believe that because over the years I've asked people so many times like, how do, how did you become fans of the New York mets? Especially people in my age group. Well, when they were kids, they happen to have a good run. It was one of those that I don't quite understand. I don't, I didn't really know there were mets fans out there, but that's a whole different story. I could name it with almost any team. You know, it is, it's when you are that second, third grade, who was the big names that you heard and saw and yeah, it sticks with them. Of course people love winners and there's a reason why there's a phrase called bandwagon, right? Cause B Paul, uh, love that type of thing. But as we look at people making mistakes in the market, what happens? Retirement. I mean, the biggest mistake we see people make is they assume what was good now or what is good now is going to be what's good later.
Speaker 3:
4:31
And we call that our sequence of returns. And it's no different than sports. So whether the New York mets were good and then the New York Yankees became good and now whoever's good are take NBA. Well the NBA is just a crazy world, I guess it's just you go via free agency to whoever's going to pay you the maximum out of money. There's no allegiance anymore and that's a disappointing. But sequence of return risk is really looking at how can you prevent yourself Aaron, from making a decision now because you've been watching how things had been performing really well and then all of a sudden your, you're, you're not positioned properly and it is a crazy mistake so many people make and I would tell you in financial planning, everyone is dead set on getting to a number. Like, Hey, here's the number I want to get to in retirement.
Speaker 3:
5:21
Um, interesting. I heard an interesting phrase the other day about retirement. You know what they called retirement? No, the power years. Nice. Yeah, I like it. Me Too. Why? A couple of reasons why you have more control than ever before. You have to power to do probably stuff and things and charitable endeavors. You've never spent the time to do that. So you have more power than you've ever had before. I agree. You've heard me say it. I always say that, you know, retirement is that point where you get to choose what you want with who you want, whenever you want. And it is, it's a power year. I love that. I don't know who said it, but we're stealing it. A, it's in a, I'll find it for you cause I just read it recently and uh, I've share on the show, I'm actually studying for, uh, the charter advisor and philanthropy.
Speaker 3:
6:03
So there's one of the books I read for there. I'll get you the direct quote. Um, but it is, I talk about this as you're getting ready for your power years. So let's say you've accumulated amount of money, 1 million, 2 million, whatever the number is, and you say, all right, great, I can retire. But man, this stock market's been great and 17, 18, 19, so I'm gonna keep it growth tilted. But here's the problem. It's grown up until here. You've crossed that finish line from your working life into your power years. But now what if your return turns into 2008 what happens? Yeah, it's going down. Oh yeah, it's going down. But not only is it going down, your likelihood of success of not running out of money in your lifetime goes up, and that's why it's actually smarter to be better position in the early stages of your retirement.
Speaker 3:
6:53
Not In growth mode, but a little bit more in what we call a irreplaceable capital mode. Yup. Yeah. We have to figure out for you is how do you protect yourself from losing capital? You can't afford to because really how you live those three first three to five years of retirement are really the most critical ones that you have in place there. And it's a different mind focus. You know, when you're still working, it's growing the portfolio and when you go into retirement, it's how do I distribute the portfolio? How do you create your own paycheck out of these assets that you've worked so hard? And that is a very different way of looking at it. And so many people plunge into retirement and just go in blind and leave it exactly the same way they do and it's, what was so interesting about that is they hear it from us, like we talk about it on this show all the time.
Speaker 3:
7:40
They see it on TV, but they ignore it. We'll have, I talk about this all the time and by the way, I'm even a guilty party at my own home, but right now I should a picture of your home, Aaron, for all of our listeners, is there a home project that's been on your list to do that's greater than six months? Of course. One year. Well, I've lived in the house for four and they're still not things on the wall, so let's just go with that. You're fired up. Yeah, our producer, Meg's not in her head as well, so I can think. I've been in my home for wow, 15 years now. I can't believe that 15 years. There are still projects that when we first moved in, Oh that would be nice if we get two and is later now. They're not big that what we do is we tend to, oh, it's not bothering me, but those are the things that bother me.
Speaker 3:
8:31
I'll give you an example and maybe I'm lucky or maybe I'm unlucky. You can let me know here. So when we moved in, you do a home inspection, right? And the home inspection said, hey, your air conditioner, you might make it through this summer I bought in June. Or you might make it a year. 15 years later it's still cooking. It's still working. Nice. Yeah. Now they have 10 years that that is luck. I mean, what's the average air conditioner? 10 I know I would say more than that. 1520 maybe I'm not an expert here, but my point is is I didn't do anything with it. And so now what's going to happen though, when it, when it crashes, there's going to be no, there's going to be no fixing. And so I began the investigation of, okay, well how much does the new system, well you, you can have a wide varying range of costs, but I've known about this for awhile, so don't you think I should at least have a fund set up knowing that I'm going to have to pay that at some point around here?
Speaker 3:
9:31
Yes, you should have. All right, well I do. So that's the good news, but not very many people do. Or sometimes when those things happen, you're not prepared and so you need to be, and it's no different for your retirement if you retire and you're like, oh, I've been really smart. You know why I've owned Google and Netflix and apple and I've owned, I'm the s and p 500 at vanguard. I've done awesome. So you know what I've done so good. I don't need to worry about it. And I know, I know you're a big behavioral investor and you're like watching this for people. I mean, what type of biases this, are they just being blind or what's causing them to say, hey, things have been great, so I'm going to ignore all the other pieces. It's a couple thing. You have status quo. Just it's easy to keep doing what we've already been doing.
Speaker 3:
10:21
It's harder to change. Humans are resistance to change, so it's harder to change. But we've talked about the hurting mentality a lot too where, oh, this is what my friends are doing, my friends are doing this, so I'm just going to stay with it. The talking heads on television are still talking about Google and Amazon on a frequent base, and so I'm just going to go with what is hurting around me. Uh, and it is, it's very dangerous. Nobody, you know, this financial plan is going to work because their neighbors worked. It's that you really need to look inward at your house and have that open communication with your spouse about what's important to you and what's your vision of retirement because your neighbors have something completely different and their goals aren't going to get you to yours. Yeah. So I'm going to relate this to condiments.
Speaker 3:
11:06
Okay. Yeah. You want to see how I want to draw this correlation. So I grilled chicken the other night at our house. Right. And so I love grilled chicken. I love to put a little barbecue sauce or some other form of seasoning on it. If you ever gone to the condom and draw on your fridge when you opened it up, it's full. It's full, right? Yeah. But do check on the expiration dates sometimes. Sometimes you can admit, I could see by your three, you probably don't, but how many you listers? Hey brother, you have you been at somebody's house and you go open the door, open it, and they put some things on the table and like, ah, their ranch dressing says it expires in March of 2014 this has happened to be. Okay. Actually, when I go to parties now, I'm so worried about it actually look at the expiration date, all those types of things.
Speaker 3:
11:49
But what happened? Does ranch dressing cost very much money at the store? No. $3. Right. And you can get it, but why do people not do it? Status quo. It's easy. Why should I look at it? They don't. I'm going to call it rebalance all of their condiments they have in the fridge because they're like, oh, I'll just wait until it becomes a problem. Yeah. Well, I'll tell you, people can't do that with your portfolio and especially as you're going from your preretirement years into your power years and your retirement years and all those things work, so here's some that we can do for you if you haven't had your portfolio looked at to see if it needs to be rebalanced or not. We have a quantitative software that just tells you the results and what that looks like. I call it a digital allocation. If you had like one of those from us, (888) 419-8513 that's (888) 419-8513 I'm really learning how you could potentially do more with your money while actually reducing your risk. (888) 419-8513 you're listening to wealth from wisdom.
Speaker 2:
12:49
Do you own an annuity? Inflated fees and commissions could be costing you an 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 health care and longterm care or do you have questions about how to best manage it? Inheritance? We can help call Carson wealth today at (888) 419-8513 and now back to wealth from wisdom with Carson wealth.
Speaker 3:
13:19
Your welcome back to wealth of wisdom. I'm Paul West cohost today is Aaron Wood. Aaron, welcome back to the show. Thanks for having me. Yeah, I'm sure you're glad. I have the first segment that we've got to talk about how condiments are similar to your retirement. I've never drawn that connection before, but you might. You might use it. Yeah, and you're going to now start looking at relish and mustard and ranch and seeing what expiration dates are. I'm afraid to eat anywhere. I'll come a better yet. Actually, that's a great sign if you go to a restaurant. And what if the restaurant puts a bottle of ketchup on your table and it shows outdated? Well then I'm really more concerned about how little this restaurant is. He's getting a lot of thoughts go through your mind. That's a risk. That's a warning sign. And today we're talking about warning signs that can threaten your retirement.
Speaker 3:
14:07
You know, many of our listeners listen to us on the weekend. We can see that what happens from statistics. Um, Erin, here's something that I would say drives me crazy a little bit. Uh, and I call it the Monday morning blues. So earlier this week, uh, edit, take an exam, had to go to a place and when I was going to check in, their computer wasn't working well then they, they, the front desk blamed it on, oh, it's Monday morning. It's slow. That was that. Any different. Often what happens is a lot of people come in Monday and they're tired and we talk about Monday morning blues. I wanted to share an article I read on money that I thought would be good for our listeners today and the real reason why successful people don't get the Monday blues versus why other people have them. And as you think about your life, yes, we know every day ends and why we've all heard that joke 8 million times in our life.
Speaker 3:
15:04
There's really something that when people are more successful, what do they do? They treat Monday like every other day in the work week. They come in prepared. Yeah, they're ready to go. They're not saying, oh, they're going to go spend the first two hours getting their cup of coffee, checking their email, telling everyone else how much they drank all weekend or where they went boating or things like that. They figured out a way to balance out weekend versus weekend time. But here's what they do. They live life every day and they build their list. And I love this phrase. Um, I think, you know, I'm not a huge fan of email. It's a necessary evil, this short, much shorter, the better. And just get to your point, like make your ask at the top of the email. Don't send me 10 paragraphs of questions that you may think about, but email is really the transfer of something that's on my plate over to something to you, to you for a response.
Speaker 3:
16:01
Example, if I sent you an email, hey Aaron, can you come to this meeting at 3:00 PM tomorrow? All I did was transfer my thought to you. Now you need to respond yes or no, correct? Yep. And so that, that's what people do all day long. But when you come in in the morning and you start looking at all your emails, what tends to happen? You Click on one and then you go read that. Then you click on another one, you go read that. Then you skid an article. You're on omaha.com and you're reading about, uh, the new heartwood preserve, which now I saw this earlier this week. They're calling it a, the new downtown of West Omaha when it's being built in the fancy new downtown. Yeah. So we're excited. We at Carson are moving there. Uh, you know, we're still 18 months out, knock on wood, but it's, but you can see how I can get sucked into this vortex of information that's really not what's necessary.
Speaker 3:
16:52
So I'm gonna ask you a question or you're in, so do you get popups on your phone? I don't think so. Dude, you didn't even know what that means, so that's good. All right. Meg, do you get popups on your phone? Like notifications? Yeah. So here's my question is, are the notifications valuable to you? So like I get text messages pop up on my phone. It's a notification, but I don't do email notifications on my phone and I see someone who on my phone. Okay. See there you go. Even taken one further step. A lot of people get news updates. Well I don't need a news update on what the royal family is doing overseas and they just got the Christian pictures taken last weekend. So I do. Interesting. But not important. I do have local news breaking news pops up on my phone. Well, because that's, that's because your family though has been in the medical field.
Speaker 3:
17:42
Right? And been a paramedic. So you're interested in, yes. Okay. So I think that's fair, but that's, that's information you need to know versus the vortex of, Hey, did you see what happened to Cardi B in her concert the other night? And each she threw her wig off and went crazy. You probably didn't see that but I did hear about that and it's true. But those are the types of things that suck people in. And that's why I feel like they get in these Monday morning blues cause they're sucked into this vortex. Um, on what's happening. I think you have to think through your life and I, I'll give you the example to you. So even if you're in retirement is why not plan out your week as well, even though, hey, I'm retiring into, to worry about it. You Still Pete, we're human beings. You have a routine.
Speaker 3:
18:25
Yup. And I would say that people who are the most successful in retirement at that, we see that that transition the best are the ones who actually do have that. They have their, I volunteer on these days, I watch my grandkids on these days. They have something that they're living for. They're not just existing. Yeah, well they find out what works best for them and build a game plan. And maybe they don't have as many restrictions, uh, that they had in the working world, but they still need to be careful of it. So one of the risks though they are going to face is healthcare risks. And so let's talk about that for a moment. Uh, and healthcare can come in a lot of different forms. One can just be cost. Uh, I've yet to ask someone if they think healthcare costs are, let me rephrase this.
Speaker 3:
19:08
I have yet to hear from someone that they think health care costs are going to go down next year. No, no. Or in the next 10 years or 20 year, you can keep going. 30, 40, 50, a. So that's one. But then two, it becomes simpler in theory, but actually more complicated once you start adding in Medicare and medicare supplement supplements and prescription plans. Now there's this myriad of stuff. But if you don't pay attention to it. And by the way Aaron, you and I see this all the time, so every September and October we actually send out education to our clients. We actually host events where we just explain how to file for Medicare. Yeah, I mean, well and in addition to that, I want to take two steps back. One that the cost of insurance people look at it just as, oh, it grows with inflation.
Speaker 3:
19:55
And that's actually not true. If you look at the increased cost of your insurance plus the increase usage as you age, it's really about six and a half percent growth is what people are looking six and a half percent, which is much larger than inflation is. So that includes usage, but we use as we get older. And so that's a big number. And then the second part, people don't understand how their income affects their premium costs of claiming for their medicare premiums. And so, you know, if you're not watching those two years before you retire and all of a sudden you had a big bump in your income that's not normal, or you didn't know how to, you know, sell your business or do some of these things, you could be adding on an additional $325 a month for an additional premium on your medicare to the standard premium.
Speaker 3:
20:39
That's big. Yeah. So let's, I like averages because at least gives people context. So if you're in your seventies right now, the average person spends thousand $566 per year on health care costs. Yeah. So that's just on average, if you live to age 96, you're going to spend $16,145 per year. And, but I'm sure in your budget you don't have that much allocate it, no two there because, well, first of all, we think something's not going to happen to me. A and two, we don't take into account a, we'll use your six and a half percent. Um, growth number, I mean really, let's put that in the terms of investment. So if the stock market being s and p 500 over the last, what 70, excuse me, 80 years has grown by approximately 8% on average. Does that mean it's not going to be 100% invested in stocks to get that?
Speaker 3:
21:33
But yet my, my healthcare costs are going to grow by six and a half percent. And what a two year treasury right now is trading less than 2% yes. So what combination of stocks and bonds do I need to have in order just to pay my healthcare? Yeah, it's a, I'm not asking you a trick question. There's no way. Basically I could figure that out without knowing someone situation. But it, it again, it comes down to what is their life like, what is their health like, are they an average healthy person or do they have other things? If you have diabetes, well you're going to be higher than the average. And so coming back to that individual, how is this going to affect me and not paying attention to my neighbors is really important. Yup. It is. It is. I mean, and there's so many different ways that people try to cover healthcare costs.
Speaker 3:
22:20
Uh, one of them I'm gonna share with you as longterm care and so I always put people in two camps that are either completely for it or they're completely against it. Do you think that's because of the way the insurance industry used to be around longterm care? For sure. Absolutely. Yup. Yeah. The fact that people had a hard time getting money out of it historically, and that is no longer the way those policies are. But I think a lot of people have seen, um, this is what happened to my parents or my grandparents and didn't come back to how is it today? Yeah. I'm going to compare it back to, uh, the ranch dressing bottle in your refrigerator. And here's why. Because I'm going to keep using it until it becomes bothersome or a problem for me. And so this is, they're just, they're avoiding what's coming up.
Speaker 3:
23:03
And I think a lot of it is people don't buy it. I don't see, because they don't have the money. But because I'm going to use the word cheap, they don't, no one likes to spend money and see it go away and disappear. I mean, no one, none of us take a lighter to money and burn it. Right. We don't do it well except for the 4th of July on fireworks. That's a whole different story covered literally blowing. I get up. Yeah. That is, I can't even imagine how much money is made, um, through all the organizations that do that. But as I think about if you light money on fire or you give money to longterm care and you don't go into a longterm care facility, you feel like you got cheated now. Well, you didn't get cheated on. Was peace of mind correct? Because it you peace of mind.
Speaker 3:
23:46
Well in control. I always like to point out the control part of it because I have had numerous clients earlier who could afford to pay for longterm care themselves. But I've had to ask the question of their children, you know, what kind of situation do you want to put your children and do you want your children to make these decisions for you? Or do you wanna make them to yourself? Or do you have children who quite honestly don't see eye to eye all the time? Then you probably don't want to break up the harmony of your family when you could have made these decisions yourself. Yeah, I think you bring up a great point. I mean, I would not, and I'll add one more thing is like, so imagine this year, 82 years old, you need to go to a longterm care facility. Uh, but because you didn't buy a policy, your kids are debating the following things.
Speaker 3:
24:29
What facilities should I put mom in? [inaudible] who's the closest to them? Who is it closest to a but should I just take care of on my own? So just it's I don't want, I don't want to take their money to pay for that. Yup. And now you're creating a predicament for your kids that you could have avoided and there are techniques to help you with that. If you'd like to learn more about that. (888) 419-8513 ask, ask her advisers around the line about modern techniques to help with longterm care. (888) 419-8513 we're not trying to sell you anything. We're trying to educate you. That's the whole point of wealth for wisdom. (888) 419-8513 hey, coming up. Next, we're going to keep talking about these hidden risks that can threaten you, your family,
Speaker 2:
25:12
especially during your 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 (888) 419-8513 do 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. Hey, more and more people are
Speaker 3:
25:49
in their eighties or nineties and even get into 100. Yeah, I mean I can't even fathom that, but at some point there's going to be a lot of people that are a hundred years old or centenarians like we like to call them. And chances are for you listening right now, you're most likely gonna give live a lot longer than you think. Uh, Hey, you're listening to wealth from wisdom. I'm Paul last today joined by Aaron Wood. How old do you think you're going to make it to Aaron? 110 110 and why 110 we have lots of 80 90 year olds in my family. My husband's grandfather is going to be a hundred this November. So he as well has lots of longevity. So one of us will definitely be crossing that out. Okay, so you're going down the genetic side of the equation. Yes. Yeah. So I was talking earlier about like articles and things that are interesting for probably not important.
Speaker 3:
26:42
Uh, for those of you that don't know, I do enjoy Twitter. So that's where I get sucked into information. If you want to follow me on at Paul West coach or Aaron, your Twitter handle is a hoc. Got Ya. Didn't I add Aaron four oh two or something like that. I'll look it up. You would four oh two. Alright, well I'll tweet it out and put a picture. So, uh, but I, I saw two fascinating articles this weekend that pretty much confirmed. I have no clue how long I'm gonna live. Number one was if you drink four more cups of coffee today, you might live longer. Oh, well that's good for you. Yeah, those are, you know what coffee addict wants to say about eight eight. Uh, I'm not sure. I figure if you dual, if you just double up something that's good for you, it should be doubly good for you.
Speaker 3:
27:25
But the other one is if you have, uh, more than five drinks in a week, that you would potentially lose one to two years of your life. That one I did see. Yeah. So unfortunately I may hit both of those and so at least they're not figuring they counteract each other. So, and then I'm just, I'm, I'm a hopefully equal at that standpoint. For me, if I drink 12 cups of coffee a day, I can triple up my longevity. That doesn't sound like a very good, no, that's gonna work. You know what? Uh, I love coffee. I just, I think it tastes good and it's enjoyable for me, by the way. I love a good glass of wine, Bourbon, a really good craft beer, all of those types of things. So we're going to take the good and bad. But your question on your, not your question, but your statement on genetics at the end of the day is, I mean, don't genetics and control the whole equation.
Speaker 3:
28:16
Yeah, definitely. A big part of it. I mean obviously the things we do to ourselves, you couldn't go out be a drug addict and be like, Hey Janelia is going to be, I mean there's always, you know, the fine line of that, but genetics have a huge part on it. If you know your family has heart disease, well then you need to be cognizant of those things that could get possibly in your way. Yeah. Well I mean I obviously I'm a huge believer in you need to exercise, you need to eat well, you need to do those healthy things. Of course those of us that are based here in Nebraska but nationally and really internationally always grant about Warren Buffett's comments about what he eats, you know, from burgers to dairy queen to Cherry coke and maybe things that aren't quite as healthy as others. And you know, people keep cooking along.
Speaker 3:
28:59
And I think we can all relate to family stories of that family member who can eat anything and you feel like don't, don't get waited to meet other people who work out, watch their weight, watch what they eat and they struggle with it. So genetics plays a long role. But why share that with you is genetics is personal. It's all about you. So while something may be great for your brother or sister is not great for you. And one of the biggest risks we see that happen to people in retirement is tax risk. And why I bring that up is taxes are personalized. What is best for Aaron Wood and your family from a tax perspective is not probably the right thing for Paul West and his family. And it doesn't mean we're polar opposites in the tax world. It just means we have different situations. We have different number of dependents, we have different incomes, we have different housing situations, we have different zip codes, all of those types of things that can impact us.
Speaker 3:
29:50
Yet people all the time will turn to their peer and say, Hey, what are you doing about taxes? And I don't get it. It's how much are you withholding that? Yeah, that one always baffles me and I though this is fun. I think many people know this. I have three children. Two of them are twins. They've, you know, just started in the working world. So they get to learn what this FICA thing is. And so that was a lot of fun for them. We took 30% of my paycheck that my good friend Fika is what I call a and, but who cares if I told them one dependent or two parents, three parents. We have to pick the right one for them. And I don't know why other people listen. So that's a huge risk we see. We see in retirement. But another one we see is people saying, Oh, put as much money in your 401k as you can, or you got to invest in a Roth or you have to do whatever.
Speaker 3:
30:42
I don't know what's right for you. The only person that does is somebody who is your trusted advisor who can help put a plan together for you. And here's a great example of this. So let's say someone racked up a bunch of credit card debt while they were in college and they'd come out and they get their first job and someone says, Oh, put as much away as you can into your 401k. And so they sock away 10% which is way more than their employer contribution. And their credit card on the other hand is sitting here at 22% interest. Wouldn't it have made more sense to pay that off than to put the 10% now maybe there's some reason why we wouldn't want to, but most likely that is a perfect example of you should not be putting away as much as you can and then have high debt accumulating behind you.
Speaker 3:
31:24
Yeah, and it's those types of things that drives me crazy because it's people taking advice that is genericized. So by the way, we write a lot of content here at the Carson Group. Our marketing team does a wonderful job. If you want, go to our website, Carson, wealth.com. There's actually something, you know, some really neat tools that things out there, like our retirement readiness survey. Do you want to see if you're really ready for retirement, go take that. It'll give you a great indicator. It's got really cool slider bars on it. You can move them back and forth and look at why at least like it is genericized, but it's also personalized by you going to put your own information in it. But you can go out there and read our blog. We have videos, that's generic information we're sharing for you on the pros and cons of Roth arrays or whatever else we're talking about.
Speaker 3:
32:10
But you got to again figure out what's best for you. Um, and on this, by the way out there, we have a button that says connect with an advisor. So if you don't want to call us and you just want to click, you can click on that. And we've got an inquiry this last weekend and I just want to share with you the s the story behind it. So this person went out there and asked to talk and so it was on a weekend. And we of course connected back with them over the weekend because we know there's no time like the present. And they didn't return a phone call and we sent them an email as well. And they said, hey, my first question for you, you ready for this? Are you a fiduciary? Yes, yes. So I was happy because many of you have listened to our show for a long period of time and know that I beat the fiduciary drum a lot.
Speaker 3:
32:55
Uh, Jamie Hopkins was on here, uh, earlier couple of weeks ago and we talked about all of the, uh, craziness with the sec not adopting the rule. By the way. Jamie would've loved to condominium story and questions because he's a huge advocate of Heinz. So, uh, not the stock, but just Heinz Ketchup over all. So I am certain that if Jamie's listening, he is Heinz Ketchup at home is not outdated. It's brand new. He keeps circulating that all the time. Why I'm happy this person has a fiduciary is that means they asked the right question and I'll share with you if you haven't seen this or got this from us before, we have something that's called 10 questions to ask your advisor. Guess what? One of the questions asks, is your advisor a fiduciary? If you want a copy of that, eight, eight, eight, four, one nine 85, 13, 10 questions to ask your advisor.
Speaker 3:
33:45
But there's other great questions. Tell me about your team. Tell me about your services. How are you paid? Do you get a commission? Do you get a fee? Do you get both a, do you get trail payments? Do you, I mean, there's all this acronyms that you aren't gonna understand as a consumer. And I want to be educated. Think back. So remember your first time you ever went and closed on a home and you, and you remember what happened with the title company and everything. You went into the closing 20 pages. That was exhausting. I'm never good when it's, you know, what, uh, eight inches tall of paperwork. But I remember the first time I read the summary document that itemized all the costs and all the feelings. I got frustrated. Why? Cause I'm like why in the world on my payment was this an underwriting fee, a title for you, the administration fee you have this fee, that fee and all of this fees.
Speaker 3:
34:39
Yeah, comp, whatever. All those things were. So it was frustrating when I saw if I will compliment the individual that walked me through it, at least he explained it to me. That made me feel better at least knowing what all fees I was pain versus man. Imagine if they would have just buried that on page 37 of one 20 well and let's face it, I don't think anyone comes to work with a advisor or fiduciary or plain or whoever it is because they think it's for free. They know they are paying something and I think they want to pay for what the value they receive. Yeah, we all do. I mean, at the end of the day is if we want something for free than you probably should be a do it yourselfer and be careful when bad things happen because you're not watching out for risks like that. But otherwise, if you're willing to be a delegator, there's a cost for delegation, but there's also a gigantic benefit of your free up your time. So what I would tell you is just download that content. 10 questions, ask your advisor if you just want us to email it to you. (888) 419-8513 hey, you're listening to well from wisdom or come back in a moment. We're going to talk about the final risks that could actually severely hinder and [inaudible]
Speaker 2:
35:49
threaten your retirement. 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 risks, 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, welcome back, back
Speaker 3:
36:20
to wealth wisdom. I'm Paul s coast, today's Aaron Wood. And today we pull back that curtain on what are some of those hidden risks that threaten your retirement and really strategies that help protect everything you've worked for. Um, I will tell you though, it's not the culmination and each one of them individually, but how they collectively work at as a whole that are so important for you. And what we want to help you think through is how to best navigate those waters. And so one of the things we're talking about is one of the hidden risks that could threaten your retirement is your expenses. And what I mean is your living expenses. So when people think you're going to retire for some reason, you think you're going to spend less those first couple of years of retirement, you're wrong, you're wrong. So we see it. Not everybody's wrong.
Speaker 3:
37:08
So I don't want to completely make a blanket statement there. But what I do want to share with you is, is two things happen. One you decide to travel more. So you do that. And two, I'm going to call it the, the boredom effect. I call it the honey do list as well. Okay. The honey do list. So those projects that you haven't done in 15 years get done. That's right. You have a long list of things that have built up in money now that you're retired. Get to this. Let me now that you're retired, get to that. Yeah. Yeah. That takes a couple of years to get to that last, that that's a fair list. And all of that. Uh, it's also though is you're sitting around a, you've done whatever your hobbies, you've donated your charities and you're sitting there and two things happen. One, I'm just going to go to the store and walk around or I'm going to get on my iPad and I started looking on Amazon.
Speaker 3:
37:53
And then what happens? Lots more socializing too. You're not going to work to socialize, so you're going to other places to socialize and usually that's food and drink and plays or whatever. But your entertainment costs tend to go way up. Yeah, they do. Um, and, and costs overall. And no matter what stage you are in life, a cost that people either love or hate is the cost of acquiring a new car or a new vehicle. I hate you. Hate it. Yeah. Hmm. So see that blog that I put out not too long ago, I said it's like a splinter under my finger now. Yeah. I just read in your blog the other day. It's called how to buy a car without losing your mind or your wallet. So, hey, buy a, so what do you do? You have to buy a car. So my husband and I do quite a bit of research ahead of time so we know exactly what car we're coming to look for.
Speaker 3:
38:43
But we also do a little bit of good cop, bad cop. I don't like the people bothering me and I just want to see, do I fit in the car? Um, my husband's six four, I am five. Four. So there's quite a bit of height difference between us and as being comfortable in the same vehicles. Not An easy thing to accomplish. Your electric seats that have to go backwards and forwards, have to have a big range there. So having the memory seats one and two super important like that, that to me is an absolute must have. Um, but you know, his head hits the ceiling and a lot of cars too, which I would never think about. Uh, but he actually, his job is to keep the salesperson away from me, so he stays outside of the car, talks about the engine. I, all the stuff I don't really care about and I just sat in the car and touch everything and turn on the radio and can I reach this stuff and can I see, do I have blind spots?
Speaker 3:
39:34
Uh, and then when we get to the room to talk numbers, we actually flip flop. They will automatically talk to my husband because that's who has been talking so far. Uh, and I will have already done all my research. And so when the finance person starts talking or making the deal on the car, my husband says, nope, you're talking to the wrong person. This is all her. That's funny. Yeah. So you're probably the minority of people who do it that way. Yes. And you should read Erin's blog. It's on Carson wealth.com. It's called how to buy a car without losing your mind. So I agree. You said do your research at home control your car status. Most people want to step up. Yes. And step down, have a shopping partner. So you're talked about that. Uh, but no, the numbers, your last step is really know the numbers and the dealers to hear.
Speaker 3:
40:20
Um, and it's hard for people, Aaron, because they don't really understand all of it. They don't want to walk into that environment. I think candidly, that's why carmax and other places that have figured out, hey, people walk in there knowing that they're not getting the car for the least. Uh, but also they don't have a headache. And so they don't have fear. And I think it's a smart move on their behalf and what they do. Uh, here's what I do. I'm not, I'm not a car person, so it's not one of my passions. Uh, but also I know if I start researching it on the Internet, I will get sucked into the internet vortex. Oh yeah. And so then I'll be, I have to go from what are all the sites Blue Kelley's blue book to, I'll just start going to every single one and then I'll have a buyer's remorse at all period of time.
Speaker 3:
41:13
So actually found a service via someone I know that I can say. I'll just give you an example. Like what I did here when, uh, my twins are in 16. Here's the type of, I said I'm looking for a vehicle in this price range and here's my requirements. It's for 16 year old. Um, that helps me keep my insurance costs down to the best it can so it doesn't need to be fast. Uh, and I wanted a rear view camera beside that I was in different and so they came back and then their job was then go find the best possible car they could for the best price that there. And I was willing to fort go x amount of dollars for valuing my time. But also I have peace of mind that, hey, the vehicle they found me was the best possible vehicle for the kids, for safety, um, at the best possible price.
Speaker 3:
42:03
And I didn't have to spend time worrying about the rest of it. Could I have gone online and maybe found a deal for a little bit less? Yeah, probably. I could have spent one hour. I could've spent a hundred hours. I probably would have spent 20 hours. I'm not kidding, because once I get motivated to get something done, well, and that isn't open, let's just say environments and what you're looking in. So I'm looking for a used car for a 16 year old that that opens it up to every car out there for sure. And that type of research, you have no idea. It's never ending. So having someone who specializes in cars and knows, oh, you know, a used car that's 10 years old, the, this brand was better than this brand and this, this is good for this. That would take you forever to try and research that on your own.
Speaker 3:
42:50
Yeah. So here's a huge risk. I'm going to relate this from cars to release in retirement is many people because now you're getting close to retirement injury at 60 and unfortunately it means we may have lost a family member or a parent most specifically. So that means we get some form of inheritance. So now maybe we have a hundred thousand 200,000 a million, whatever the number is come in and we don't know what to do with it. So two things often happen. One, if we're a do it yourself or we let it sit in cash, and so now an doing this or two, we sit and try to figure it out and we do all this research. How do you actually invest the money? And so we throw it in our online, do it yourself account. It sits there. We may dabble and buy $1,000 of Amazon or apple just to say we did something, but all we're doing is no different.
Speaker 3:
43:41
Cars were in research. Hell, at that standpoint, we can't figure out what we want to do. But if you went to, if you figured out, Hey, if I'm a financial delegator and I gave this inheritance money to a certified financial planning company or planner, excuse me, uh, and someone who's from is also a fiduciary, who then has a legal and ethical obligation to tell me what I should do with inheritance when it's right for me. How does that make me feel that, and it's much different. It's talking to you about what's important to you and what are your goals and what are your needs. And then taking that Google of information and narrowing it down to what really impacts you. Yeah. So as someone the other day asked me, said, Hey Paul, I just recently got an inheritance. Uh, what should I do with it? I said, well, hold on.
Speaker 3:
44:28
I need to ask you some questions. They said, well, hey, I was thinking about it. I was going to put it like a 80% stock and 20% bond portfolio. Is that a good idea? I said, I don't know. I said, how, how, how would I know? But I said, if it's all right, can I ask you a few questions? Let's talk about why you need the money. Let's talk about what you want to do with the money. Let's talk about what your goals and inhibit visions are. And it changes the conversation immensely because it's about changing the inheritance to what's going to do. And by the way, what is your parents may be want you to do with the money is an important part versus an 80 20 stock polit split. Hey, if you've had an inheritance recently and you want help thinking through these logistics, give us a call. (888) 419-8513 that's (888) 419-8513 hey, on behalf of Erin Wood, I'm Paul West. We've enjoyed while from wisdom a day and we'll talk with you next week.
Speaker 2:
45:21
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:
45:35
Okay, and here's the legal Mumbo jumbo. The opinions voiced in 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. Consulted, qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk, including possible loss of principal. No strategy is sure of success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm, LLC and SCC registered investment advisor.
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