Wealth from Wisdom

How to Approach Benefits Enrollment at Your Workplace

October 26, 2019
Wealth from Wisdom
How to Approach Benefits Enrollment at Your Workplace
Chapters
Wealth from Wisdom
How to Approach Benefits Enrollment at Your Workplace
Oct 26, 2019
Carson Wealth

Benefits enrollment is coming up at workplaces across the country. If you’re like me, your life isn’t exactly what it was last year. Many of us have health changes, family changes, income changes. You’ve at least gotten a year older! 

Bottom line: your life is different at this time this year than it was last year. 

Benefits enrollment is a good time to take a look under the hood of your finances. Are you getting the best benefits from your employer? Do you understand how those benefits work best? Are your contributions to your retirement plan on target? Will they get you where you need to be by your retirement date?

On this episode of Wealth from Wisdom, we’re going to talk through benefits enrollment and how you can get the most out of those employer plans. Don’t leave money on the table, and make sure you’re prepared for what life could throw at you in 2020.



Show Notes Transcript

Benefits enrollment is coming up at workplaces across the country. If you’re like me, your life isn’t exactly what it was last year. Many of us have health changes, family changes, income changes. You’ve at least gotten a year older! 

Bottom line: your life is different at this time this year than it was last year. 

Benefits enrollment is a good time to take a look under the hood of your finances. Are you getting the best benefits from your employer? Do you understand how those benefits work best? Are your contributions to your retirement plan on target? Will they get you where you need to be by your retirement date?

On this episode of Wealth from Wisdom, we’re going to talk through benefits enrollment and how you can get the most out of those employer plans. Don’t leave money on the table, and make sure you’re prepared for what life could throw at you in 2020.



Speaker 1:
0:00
Okay, and here's the legal mumbo jumbo. The opinions voiced in wealth from wisdom with Ron Carson are 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 and may not be invested into directly. Investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory services offered through CWM, LLC and sec registered investment advisor.
Speaker 2:
0:30
The stock market hit another all time records. It's $10 billion in social security benefits go unclaimed every single year. The federal reserve announced that they will raise interest rates by 250,000 rocketing cost of healthcare and retirement could now run 350,000 you've worked hard and saved 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 at 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 can help you make the most out of every dollar you've saved for retirement. Welcome to wealth from wisdom with Carson wealth benefits. It's
Speaker 3:
1:14
enrollment is coming up at many workplaces across the country, and if you're like me, your life isn't exactly the same as it was last year. Many of us have maybe had a health challenge or a change or family change. Something's gone on in your life, income's gone up, or maybe it's gone down. You have more debt, you have less than a bare minimum, and you've at least gotten a year older. That's a fact that we know that's happened. Hey, welcome to wealth or wisdom. This is Paul last today. My cohost is Jim Caldwell. Jim, welcome back to the show. Nice to see you, Paul. And yes, I am a year older. Yeah, well we all are. That's a natural thing, but you don't look a year older, so congrats to that joke. Yeah, I think it's your tan. It just can makes you look just continuously young at all points in time this morning in the gym that it was fading.
Speaker 3:
1:57
So I don't know what I'm gonna do about that. Well, it is winter time here in the Midwest, so we're not winter quite yet. Fall, let, let's call it that. Yeah. Um, you know, for a lot of people that the reality is Jim life's different now than it was a year ago. And you're, you're probably sitting back listening right now saying, wow, what really changed? I want you to think what has changed. Has anything changed in your family life? Anything change in your health, anything changed in your employer? Uh, anything change, a new home, you know, a lot of exciting things. Did you have a unfortunate loss of someone? And so, you know, one of the things you're gonna have to think about, especially if you work and not in retirement, is you're upon benefits enrollment season. And as a really good time to take a look at under the hood of all of your finances.
Speaker 3:
2:44
Uh, Jim, I can't believe this next year is the year 20, 20, 20, 20. You've been saying that for about a year. I know why. Cause I can't believe where there, I mean I remember there was all of the concern, right, of uh, one, one of 2000 effecting computers and systems across the country. And now 20 years have gone by two decades. And so we always talk about on welfare wisdom live in your earlier life to the fullest, being free of letting your financial concerns weigh you down. And one of the ways that people just kind of keep a rolling with the punches is related to their workplace. What are great in benefits enrollment. Um, and I think people think about what happened to them is representative of what happens to everyone else. And I'll tell you, show where we're going to actually explain that. Jim, I'll give you a great story here.
Speaker 3:
3:37
So when I first started in the workforce and for me it was in the 90s and I'll never forget that when I was sitting there talking with my grandmother and telling her about my first job. You know, it's like that proud moment you are as a grandkid and I'm sure for those of you grandparents listening, you love talking about your grandkids. I actually love seeing it. If I go to a coffee shop or anywhere people love talking about their grandkids. But I remember telling my grandmother about my job and what I was doing at that point. You remember what you went on? Her first question was to me, how much are you making? No. Oh, neat. Well, what time are your coffee breaks every day, right? She must've worked for the state or something at some point in time. No, she actually was a farmer. Um, and then ultimately her husband did work for a city court system.
Speaker 3:
4:25
Uh, that it was perception. But I mean if you work in facilities and you know, you're working in a manufacturing company, you have scheduled times their break times and their things. And so what works for some people it doesn't, you know, we're in a service based business, there's no whistle blowing at 10 o'clock. You take time as you need it. So I share this with you is because just because you, your medical plan at your employer was right for you, doesn't mean it's right for Jim Caldwell or Jamie or producer or anyone else that's out there. Um, and w when deciding to accept the job offer, I want to share a statistic from just works. And this is from just works.com that 88% of employees said the quality and options of their health benefits were important. And only 41% of players actually offer health insurance. So everyone thinks that it's a guarantee.
Speaker 3:
5:18
It's not. Um, and so one of the things we want people to do is understanding are you getting the best benefits from your employer? Do you really understand how those benefits work or your contributions to your retirement plan? Are they on target or not? Um, will you get there when, where you need to be by your retirement day? Nothing worse than wandering aimlessly right now. All right, Jim. So let's talk about that for a moment. In gym, you know, you help, you're a wealth advisor here at the Carson group. I mean, so when you're talking with your families and you know, they're, let's say either one or both spouses are actively employed, they're in the, you know, stage of life where they're in wealth accumulation because they're trying to save money to get to retirement someday. You know, how often does benefits come up in your conversation as you're talking through financial planning? So
Speaker 4:
6:10
basically it's part of our, you know, mental checklist that we go through with, with our families that we work with because it's, it's an integral park. It's almost a core. It's not, you know, just about investing their money. But when, like when we do a wealth plan, Paul, one of the biggest things we need is copies of all their benefit packages, everything, the group term, the, the health part to 401k if it applies everything. So it's really, really important.
Speaker 3:
6:35
Yeah, it's gotta be, I mean, it's, um, it's just every element of what we're doing. Um, and it, it all adds up. So let's talk about understanding your balance. You're really, your benefits plan. And of course health insurance is, is it the first thing that comes to mind? A part of a benefit plan. Maybe pay time off and vacation and we'll talk about that a moment. But people really need to understand your deductible versus your out of pocket max. And not everyone understands that. Um, and one of the coolest investment vehicles we have today, um, and Aaron Woods on the show frequently and so, uh, she'd be pounding the drum related to making sure you contribute appropriately to your health savings account or your HSA for short cause this is one of the best vehicles. Um, I'm a believer in, again, if it's right for you and your family, I'm not saying this right is, uh, you know, my preference is to get as much money in the HSA as possible. I like to keep my monthly premiums as low as possible, but deal with the ramifications of a higher right. Um, deductible. I'm okay with that because if I put money in my health savings account, then I've got the ability to pay for it. But if I, for some reason, hopefully, you know, knock on wood here, don't have to have very many medical claims in a year, then my HSA can keep growing. I paid the lowest premium possible for me, that creates a double winning scenario. Oh,
Speaker 4:
8:03
they're so [inaudible] and you make a good point. You know, I look at your situation in mind. You have three children, so maybe your thought process as to what levels of deductibles you choose in your plan would be different than myself. Whereas just by wife and I and so we can we go with the highest deductible possible. We try to take care of ourselves, we work out and we don't have the, we don't mind about the little stuff, but with children there seem like they're always getting sick or they're always needing something. Right. You understand that? Yeah. But I think, I give a great example. We talk about the HSA and we had a family and a couple of weeks ago and we were evaluating their tax tax return, doing some tax planning for retirement coming up. What was really neat was our, our team here was able to determine that they could contribute $8,000 to an HSA, get that done this year before they retire next year and take full advantage of that,
Speaker 3:
8:56
that deduction there. So yeah, pretty cool stuff. And when you're looking at making your decisions on what's the right plan for you, let's just give you some ideas here. So one, you know, we started talking about what are your potential medical and dental costs, but Jim brought up a good point. If you're younger, are you planning on having another child in 2020? If yes, then that's obviously a huge consideration. Are your kids entering the lovely braces age and are you going to potentially have that? Are there any surgeries you're going to have happen that you have to repair a meniscus or anything else? When should you do it? Should you do it now? Um, I know, uh, last year our family had a surgery in December and they call it the run of December. Um, so a lot of the medical professionals, they just get a ton of people because they've hit their deductible for the year.
Speaker 3:
9:44
So they're trying to maximize and get in and get that last surgery done before the end of the year so they don't get, uh, moved over into the new year. So are there other expenses coming up? Uh, do you have trips coming up and do you need to calculate for that? Um, you know, making sure you have all of your correct, uh, shots and all those types of thing. So another thing I want you to do is if you have multiple plans, meaning both of you are employed and both of you have a plan in place, you really need to assess what both plans are. Absolutely. Because it may be beneficial. You think it's an all or none. But Jim, correct me if I'm wrong here, but don't you have families that oftentimes the recommendation is, well, Hey, one of you should just do employee option on their plan, but the other one should do employee option on their plan because there's often a better deal than trying to do employee plus one or employee plus family.
Speaker 3:
10:43
Sure. Because in some cases, let's say at one company the, let's say for whatever the wife, maybe the, hers is 100% paid for, maybe she works for the federal government or something. Those are really rich plans and I've looked at those where you get a lot of extra benefits. So she should, she should keep being on there as an individual and then look and see what her husband or partner or whoever, what their options are. You just have to help them coordinate it and then go from there. Yeah. So here's an interesting fact. We got from, actually, this is from the Bureau of labor statistics here in 2019 that insurance benefits average $3 and 19 cents per hour worked or actually 8.7% of your total compensation. So, I mean it's amazing to me. Um, and of that almost all of it was for health insurance. Very little was for short term disability or long term disability.
Speaker 3:
11:35
But I mean, so one of the things you have to look on, everyone gets infatuated with your salary, right? And your salary plus bonus, but your total compensation is more than that because you have to look at the net effect of what your costs are for insurance. But also some of the other benefits, and we'll walk through those here in a few minutes, but it's for me and evaluating this, looking at it, don't assume, um, here's what happens. Your employer often rolls this out in November or December when they're finished with their negotiations with their group insurance provider and you just rushed through it. You want to get done and you're like, Oh, what I do last year? Okay, great. I'll do it this year. That doesn't, that doesn't make sense. The box sit down for 15 minutes, 30 minutes, talk to a professional, have them help you. You know, one of the things we actually have, Jim, is it's our family guide called budget, the family budget, financial empowerment at your fingertips in something new here on wealth from wisdom. You actually text us if you still, if you'd like a copy of this text, three three four four, four so 33 four four four and text the code WFW dash budget and we'll get that budget sent over to you. A great way for you to look at that. 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 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:
13:20
Welcome back to Altran wisdom. This is Paul West cohost, today's Jim Caldwell. And it's, we're talking about Jim, some of these things, this is why we do this on wealth from wisdom is we're trying to educate people on things that matter. And it's the sum of all these little things done correctly that make people so successful. Um, often we get asked why, why do people get rich? Cause that's the word they like to use. Or why do they get wealthy? It's not because they won the mega millions or the Powerball is because they made a lot of good decisions throughout their lifetime. One of the most critical ones is saving, but two, it's controlling their expenses. So everyone again thinks of expenses as what going out to eat, going on trips, uh, uh, my house payment, right? Yes. All that stuff. Gasoline, all of uh, those types of living expenses.
Speaker 3:
14:13
But reality is, is there's a lot of other expenses. And in segment, you know, this first one we were talking about health insurance. So health insurance is one of the greatest expenses you have. Actually, Jim, here's a trivia question for you. I love it. Yeah. So what is the greatest expense you have every single year for yourself? For myself, for me, it's probably a majority of Americans with my grocery bill. Okay. I'm going to say your liquor store bill. But that was what it was going to go. Yeah, that's probably a rank second. Got it. Have both. So no, for the majority of Americans, they don't think about this, but their number one expense every year's taxes because why you gotta pay your ordinary income tax, you're paying your social security tax, you're paying your Medicare tax, all that is being employed. But another major expense. You know, people immediately go to their home, right?
Speaker 3:
15:04
So home, absolutely. But another one absolutely can be their health insurance. It can be a significant dollar amount every single year that if they don't account for it. And why they don't account for it is because it comes directly out of their paycheck for the majority of Americans. So if that's the case, they don't even look at it. And we know what happens when people don't look at things. They just don't have a clue what's going on. If they don't know what's happening. So one of the things that again we want people to focus on is pay attention. Use those moments of time. Jim, I got an interesting email the other day in a, we've got um, our corporate system in place and I got this email from Microsoft and since we use a lot of the Microsoft products, you know, outlook and PowerPoint and Excel and now because of the data they collect, it gave me anS said, Hey, how much time you are actually focused versus looking at things.
Speaker 3:
15:59
And so it's scary to see that number and I see the grin on your face, but it's, the reality is is we see people, if you can actually find time to focus and gets things completed. And Jim, I know you talk about this all the time, so what do you do? A lot of times you ask families to put together a family budget. How do they best get that and how do they actually put it together? Because them finding 30 minutes to sit down probably doesn't happen often. So how do they actually think about this and put that together?
Speaker 4:
16:32
What we tried to do is we give them an outline of different, different areas that that they can put an expense to and we don't ask them to give us an exact number, Paul, because that would take hours on top hours for most people. Just give us a ballpark to get us started and then once we get those ballpark numbers, then we can pair it down and get a little deeper into the numbers as we progress.
Speaker 3:
16:53
Yeah, and a lot of times to Jim, I recommend they do the following, go to a spot in their house where it's quiet, leave your phones in another room and sit down and say, Hey, it's 8:00 PM we're going to have this done by eight 30 and if you actually set a timeline for yourself that you're going to complete it, but set a reward. Hey, we want to watch the next episode on Netflix of game of Thrones, or we want to watch the baseball game or whatever we want to do. Set a timeline at a goal for yourself and your Mo very likely to actually accomplish it. And the budget is challenging for people. I mean they don't want to get to it, but when they sit down and look, there's things they can carve out. It's probably amazing. Oh, I have a subscription to Showtime, HBO, Hulu, Pandora, and all of a sudden they're looking at their entertainment expenses and they're at $400 a month and they had no idea how they got there.
Speaker 3:
17:47
And the reality is they don't use all of those. So we've actually created a family budget. It's a quick guide on how you can actually have financial empowerment at your fingertips if you'd like this for us, there's two ways. One, if you just want to text us, three, three, four, four, four. So 33 four, four, four and putting the following phrase, WFW dash budget. If you put in WFW standing for wealth for wisdom dash budget will automatically email you a copy of it and what it looks like. So if you'd rather just have a send it to, you can also go to our website, click on connect with us and we'll send it to you. Or if you want to send an email, I prefer text, but Hey, whatever you want to do, email info@carsonwealth.com a great free tool to help you out. Hey Paul, I got something for you here.
Speaker 3:
18:33
All right, so fire away. This is in the best interest of our viewers because we all appreciate your listening to the radio show and you know the problem is sometimes when it's over where people just go on to live in their normal life and they forget about some of the things. But I want to give you a couple of numbers that I think will, that'll put a little urgency to this. The average cost per family for health insurance is up 5% to over $20,000 now it's 5% increase in your health insurance, whereas wages have only gone up 3.4 and inflation's around 2% so the importance of evaluating your health insurance plan and your situation's important. I saw a number of the other day where 82% of the people out there are renewing their health insurance, uh, increased their deductible. So that just shows your costs are going up.
Speaker 3:
19:19
People don't want to pay the higher premium. So they're bumping their deductible and hoping they don't have a ton of claims. Yeah, it's, it's amazing. So again, talking about the past is the past. So let's talk about 2020. Does that seem to be maybe a favorite year to talk about until you show? So HSA contributions for 2020 are going up to 3,550 for an individual or 7,100 for a family pan plan. So Jim, to your point, so most likely, what does that mean? Deductibles are going to go up. That's just a natural part of the cost of health insurance. So if I say to myself, if I was putting in X dollars a month into my HSA or FSA in 2019 and I don't make any adjustments, I'm probably now behind schedule. Yes, most likely that because why? I took the easy route though. Just do what I did before.
Speaker 3:
20:08
That works well, now you're potentially hurting yourself. You potentially have more money coming out of your pocket and where's she at? You're now paying more in taxes than you actually needed to then that's a mistake. So one of the mistakes people make is not understanding the differences between an HSA and an FSA. Um, and the big thing about the HSA is, is if you have the ability, you have the high deductible plan, um, you get the ability to get the tax benefits, you get the, the carryover effect, um, and these actually can become investible. So there's a, a great strategy in place, but most people FSAs also can and do work for you and your situation. But please that FSA, so F as in Frank, stand for or F as in, Oh, I liked this word better fiduciary is a use it or lose it mentality.
Speaker 3:
20:56
So they're important things. And FSA goes for medical and health insurance is pretty normal. It can actually help with transportation. It can help with parking, childcare, wait a minute. Tax free daycare. Is that such a thing, Jim? It is. Right. So it can be, um, or there's other limited purpose reasons and I'm not going to cover all the details on the FSA. I don't want to bore all of you, but that's something you need to look at if your plan offers it and what it says. So here, here's another stat. So you think, Oh man, I can't believe how much I pay it on health insurance or I have to put into my FSA or I have to put into my HSA. So at Kaiser family foundation survey found that the average family premiums for employers are now over $20,000. So think about that. If you're paying $300 a month or $400 a month or $800 a month, whatever it is, let's just call it $500 a month times 12 you're paying $6,000 a year.
Speaker 3:
21:55
But your employers often paying three times that. So there's a lot of benefits you're getting that you may be, can't see, cause they don't make it visible to you. Those of you that have had to buy insurance out in the marketplace and those of you who are listening know who you are, you realize how complicated, how expensive that can be. Um, and Jim, right? The hassle. One of the things Jim used this phrase, I want to ask you a question here is you talk about making the complex simple. So for self employed in business owners, what's one of the biggest frustrations they see related to insurance? The cost of obtaining health insurance. I mean it's, it's off the charts for smaller companies, 10 or less, five or less or even that self employed person. So you know, in those situations you're just hoping that, you know, if you're married, your spouse, if they're in the worst workforce, has it, has a good plan you can hook into.
Speaker 3:
22:49
Otherwise, you know, you, you maybe have to look into Obamacare or something else to be able to find coverage. Yeah. And I would say that the second thing is obviously cost is the biggest factor, but I'm going to tell them a factor that they don't realize is their time, the time they have to spend. Looking into it, the time they have to search for things. That'd be, give you an example Jim. So people fall in two camps with regards to cars. Either they love looking for a new car or they hate looking for a new car. Right? Which camp do you fall in? Uh, I don't like shopping in general, so I wouldn't want to glue the fruit. Okay. So you're in the, Hey, I don't want to spend time on that. So you either engage someone else to do it. You go for the CarMax philosophy of Hey, no hassle or I just keep changing the oil and rotate the tires and keep, keep driving.
Speaker 3:
23:36
You're praying that that car lasts forever. Not a bad strategy there. But um, same way things happen for vacations. Some people love for vacations, some people can't stand it. Um, but what you have to do is when you're dealing with your insurance, you have to plan for it. And when, when it was self employed people. And by the way, my niche is I work with a lot of business owners across the country, certainly plenty here in the Midwest. And our a state of Nebraska is they hate, hate having to spend time on frequently non revenue generating activities so they don't have a lot of fun searching for an employee or how a health plan, that's why they outsource it to, you know, local agents or people to help find it for them. It still takes a lot of time, energy and effort. Um, and they have to think through it.
Speaker 3:
24:29
And so getting your right benefits worked out, structuring your financial future planning for your retirement. These are all complex issues. Uh, but our team here at Cartia group, we have a lot of expertise in personal finance to the larger movements of the market, but also things that matter, like employee benefits. Um, and how can we actually help you put all these things together. One of the things we actually do for all of our listeners here is if you want a complimentary consultation on what piece of your financial life is important to you now at the moment, go to Carson wealth.com right now. Um, there's actually an appointment button on there. Or if you just want to hit Carson wealth.com forward slash appointment, then you can get a completely complimentary consultation set up today by a fiduciary firm like we are here to help give you advice.
Speaker 2:
25:13
Hey, you're listening to wealth from wisdom. 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. Call Carson wealth. Just schedule your free initial analysis now at (888) 419-8513 do you have a lot of assets but our short on cash? Learn how you could 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.
Speaker 3:
25:51
Hey, welcome back to wealth and wisdom. This is Paul last joined by Jim Caldwell today. He, Jim, where we're talking about, uh, making sure you're making the right decisions in your financial life and today about all of the different non um, let's call them, uh, investment oriented decision you make. But other ones, uh, we're talking about benefits from your employer talking about your health insurance plan and there's a new thing that's out there that a lot of people don't know about Jim that are called H R A's. We've talked about H SAS and F S A's that share a little guidance with our listeners today about this new trend with [inaudible]. Sure. So first thing I would have you just Google up health reinsurance arrangement. I'm not going to go into all the details, but basically it was finalized in June, 2019 and it will be effective in 2020. So it allows employers
Speaker 4:
26:45
to contribute to the cost of the employees coverage in the individual market. So, in other words, let's just say you work for XYZ company and you've decided, Hey, I don't really like our plan, or I think I can go out and get a cheaper or whatever. Um, they're going to allow you to be able to do that. So it's kinda kind of opened up the marketplace a little bit, make things a little bit more competitive. You know, I see it also that if you're the employer and maybe you have some unhealthy employees, this would give you a chance to maybe find them some individual coverage outside, still be able to pay for it, but it could reduce your insurance premiums to your group from an oval all affect.
Speaker 3:
27:29
Yeah. And it'd be interesting to see, um, where employers go with this gym, uh, because, uh, you know, these HRHS are new. Um, and it'll be a very interesting to see, uh, how many employee ploy years and their leadership or their head of HR, uh, embrace this. And what happens? And here's the good news is, can you have an HRA and an FSA? And the answer is yes, you can. So an employer and employee can have both the health reimbursement arrangement that HRA and a health flexible spending account at the same time. However, guess what the same expanse cannot be reimbursed from both accounts. Um, I'll ask this as otherwise specified in your plan document. A lot of, a lot of fine print to read through there. Just be aware HRA new term, you need to be understanding and knowledgeable this cause it could be a great benefit to you.
Speaker 3:
28:30
So now let's talk about some other benefits that are out there. And so the one traditionally people go and want to talk about is their retirement plan. Uh, so this again, most people will recognize this term as your 401k plan, but if you work at a hospital, a school system, you'll often see it as a four Oh three B. There's a few other types of plan. Um, while this really isn't a benefit enrollment, you really need to look at your retirement plan contribution every single year. And Jim, what's some advice you give to people related to their employer retirement plans?
Speaker 4:
29:10
So this is, this is very, very important because we see it all the time where people just ignore it. They just get their statement every quarter they get an email and it says, you've made this much. They have no idea what's in it, how much risk Paul they're taking on whatever. But there's a couple things we like to do. We like to be able to obtain statements and put it in some of our technology here and just really determined for them what's inside the 401k and is it within their risk budget, are they comfortable with what they're taking on? We usually like to help them with the match, you know, are they cause is important. Some employers will match up to three, so you need to take advantage of that. Put at least 3% in there if they're going to match you to three because that's free money. Um, I mean we can talk about the tax planning and some of that later in the show, but that's, those are some of the highlights we discuss.
Speaker 3:
30:09
Yeah. And so Jim, a lot of times people will say, Hey, ah, I need the money. I can't put it in the plan. I mean, do you have a, uh, an answer for that? What should people do?
Speaker 4:
30:22
So what we tried to do there is figure out, at least put something in there, try to get to the match level, whether it's 1%, 2% or 3% because if you, if you don't start contributing when you're young, you're never going to do it. And if you take money out of a 401k because you need it for an emergency, the odds are you're not going to put it back. So really kind of put the hammer on how the 401k reduces taxes, which is very, very important because as we said, that's the hidden expense you talked about earlier is taxes. So be able to say, okay, if you put X amount of money into your 401k or even into a traditional IRA or whatever, how much will that reduce your taxes on your tax return?
Speaker 3:
31:05
Yeah, I mean, I love the free money. So right now on the table here, if I reached into my wallet and said, Hey Jim, if you're going to invest $100, I'll match you and I'm going to put a hundred dollars down here on the table, what would you do? I'm all in on that one. You do it. So if I would say match you 200 you do it. If I say match your 300 right, you would do it. And you'd be like, okay, I want to keep throwing out as much as possible. So then that way you could do it there. Look right? Jamie's eyes
Speaker 4:
31:33
lighten up. Our producer, I mean she's just thinking shopping center here I come,
Speaker 3:
31:37
okay, but I, but I put a couple of hundred dollar bills there on the table cause I wanted to show you, your eyes lit up. Our producer's eyes lit up. Um, and she's now trying to reach for all the money, but it's, I, I point this out for a reason. If somebody says, I'll put in 1%, that's a number. That doesn't really mean anything. But now I have real money here on the table. And all of a sudden everyone got very interested because why? It's tangible and real. Why did casinos give you chips? Because they don't feel real. And so all of a sudden your money can fade away. Um, what's the beauty of Venmo? You can share money back and forth with people very easily, right? Great way to do it. Well, it's not the beauty of Venmo. It's almost seems like it's too easy because you're now sharing money that doesn't really feel like money because it's not coming from your bank account. I'm paying Jamie $10 for going and buying Jimmy John's or I'm paying you $20 because I lost a golf bet or whatever. Those battles are never happen so, well, I don't think it will either, but I'm just trying to give illustrate examples of what happens there. So Jim, I mean is we look at, this is first of all getting the free money, but that second know if you can max out your contributions. There's a magic age. So what's the magic age? 50 and above, right?
Speaker 4:
33:11
Because you can add another for 20, 19 $6,000. So 19 grand plus six, you could put up to $25,000 in this year if you're over 50 years old.
Speaker 3:
33:22
Yeah. And that if you're able to do that, and by the way, at that point in your life, your kids may be out of high school or college, your, your house payment may be gone there. So why not maximize the amount that you can put into your plan cause it keeps working for you and it keeps reducing your tax bill. It can be become a double win. But then also you need to look at what investments you're in and how you're approaching it. Because Jim, you and I see this all the time, they don't, um, often realize how much risk they are or are not taking.
Speaker 4:
34:01
And, and I'll tell you from experience, you asked me earlier about how do you convince people to put money in. So the ones who are trying to do it themselves and maybe they go to the annual meeting and the 401k guy comes out and says, anybody have any questions? Well, nobody has any questions because they don't understand enough to ask a question. Right. Any buddy wants to enroll the, then they leave. They never see them again. So now you go online, you log in and you say, okay, I don't know anything about these funds. People that work with a trusted advisor, a fiduciary for sure. And to be able to sit down and go through that list of choices and be able to map out using our technology, what fits for them. Those are the people that Paul I work with and you work with that will put more money away into that 401k and feel good about doing it.
Speaker 3:
34:50
Yeah. And why is that?
Speaker 4:
34:53
Because they understand it. They've been educated, we've taken the complex, made it very simple for them and they're more than willing to continue to contribute.
Speaker 3:
35:01
Yeah. So what happens when we don't understand something we ignore? Exactly. Yeah. Or we run away. We go the opposite direction. Most people are conflict avoiders so therefore they avoid conversation. Same thing happens with information they don't understand. They avoid or they go the opposite way. So budgets is something people ignore. If you want a copy of a budget spreadsheet, give us a text, 33 four 44 so text that number and then the code to use is WFW dash budget. If you send that to, we'll send you a complimentary guide helping you with your budget, helping you think through it, because these are all the factors as you look at your life, your money, how you make the best decisions
Speaker 2:
35:49
for you. Have you ever wondered how do other people get away with paying fewer taxes than ever? One else? Learn how you could save thousands of dollars in taxes by calling Carson wealth at (888) 419-8513 social security risk, taxes, and healthcare. This is where you can count on straightforward and objective advice on the biggest challenges with investing for retirement and now back to wealth from wisdom with Carson wealth. Hey, we've already talked
Speaker 3:
36:20
about health savings accounts and thinking about the tax savings is huge when it comes to your medical expenses. We've talked about four oneK plans and retirement plans and taking advantage of your free money, but also not taking more risk than you're comfortable with. There's also some new trends going on. Um, and I want to share these with you. Uh, so Jim, one of them is wellness plans and you love to work out. It's one of the things you're passionate about. You talk about, um, so a lot of employers have moved to, uh, what we call wellness plans and they often will now give you credit for your gym membership or somebody in or having you wear a fitness device to have you figure out. And you may think that's creepy that they're tracking your movements and things like that. Uh, but they're just trying to help you be more healthy.
Speaker 3:
37:08
And by the way, you being more healthy helps sweat your insurance premiums. So there's the, uh, combo effect of what happens. The gym, I mean, when you're talking to people and they go at their workout facility, a lot of times they do it because Hey, they love it, they passionate about it. Um, but a lot of times people do it because, um, they, they not only want to, but also they may be B get a financial benefit. Like, Hey, if they go X amount of times per year, then they get fully reimbursed or other incentive based systems that employers have put in place for them. But have you heard of those types of things? Sure.
Speaker 4:
37:46
As a couple of things I hear as you said, people love it because it's a routine. It's a way to start your day or end your day. Um, number two, they do it because maybe in their family history of health history that there are some negatives there. Maybe there's some hard issues. Maybe there's, there's other things. And so they're working out a to stay alive, let's say. You know, they have to do that. And then we hear all the time people get so much money a month depending on how many times they go. Or maybe they, it's reimbursed at the end of the year or maybe it's just a set dollar amount that that'll go through it, go to you so that you can, you know, work out and get something reimbursed.
Speaker 3:
38:27
Yeah. And I think it's a good way for people to do that. Other wellness programs or just looking at, um, food and, uh, how they approach that. Um, how they, uh, I'm going to call them mental health programs, uh, family services. Hey, it's, you know, people have challenges. They go home, they have a trouble child, they have a troubled parent and they need help. They need people to talk to. So there's other programs like that are out there that could really, um, assist. And I think a lot of times we get stuck on the, um, tangible or the fixed quantifiable measures of what's my healthcare costs, what are those look like? But these other programs that people put in place could be, you know, very useful for you at a time. You need it most. I, I, I talk about this all the time. So Carson wealth, we're a financial planning company.
Speaker 3:
39:21
We're in the business of providing advice for a fee. We're not in the business of charging you commissions. We're a fiduciary. We do. It's always in your best interest. Um, and we want to help take a look at the big picture as part of that is when you need our help. It's you want help now you want an answer. Um, I think back couple of weekends ago I got a message from one of my personal clients and I called him back on a Saturday morning at 8:50 AM and we talked for five minutes and eight seconds. Well Jim, how do I remember was five minutes, eight seconds. Cause I remember when I clicked off my phone, that's what it said, the duration of the call. And that gave him a weekend of comfort, a weekend not worrying about that little financial question, which was big to him. It was little in the scheme of life but it was big in that moment.
Speaker 3:
40:09
So sometimes these um, non, um, qualified or non financial related items can be super beneficial for you and some just the peace of mind. So have you looked at, does your employer offer short or longterm disability plans? Parental leave, you know, if you're having, um, a new child, I mean in both by the way, maternal and paternal, um, do they set up basic life insurance for you? Is it no cost? Uh, I'm Jim and I think you see a lot of people also have the ability to buy a life insurance as supplemental cost, right? Correct.
Speaker 4:
40:45
Yeah. I mean cause basically in your group plan, it's normally going to be one times your salary or two times your salary or something. And you know, if you're healthy and you're younger and you can qualify for insurance outside of that, you should go max that out. Whatever that optimal number is that you come up with, with your trusted advisor as to how much insurance you need. Because someday when you retire or leave that company, that group term insurance Paul is, you know, is not portable.
Speaker 3:
41:12
Yeah. Jim, I'm still amazed to this day. Um, how many people walk through our doors or have conversations or we do a lot of virtual meetings. We use like zoom technology. join.me. Of course, most people know WebEx. Um, but when I'm talking to people and I ask them, walk me through your insurance coverage, and then they look away, Oh, what do I know? They don't have any or they don't have enough or what I call is, they don't have the optimal amount. If you go to a life insurance agent, they're most likely going to try to sell you the maximum. Um, and others don't dabble in it. So therefore, and I, I view it as I have to help give you guidance on what's the most optimal. But in doing so is it's just to help you out. It's a benefit, um, that protects you, your family and your life.
Speaker 3:
41:58
So let's talk about other benefits that you may be seeing. Employers, I mean, there's a lot of crazy stuff out there. I mean, gym like Google, they have onsite guitar lessons for people. Um, you hear about ping pong rooms, you know, uh, uh, bars are, you know, or drinking lounges are becoming more prevalent for after work, for, um, employees. Uh, the company Isana has a nap room area on campus as an employee benefit. Um, but as I think about, you know, what are the benefits you have for you and your family, then you get them through your employer, things like this. But where do you go to relax? Where do you get peace of mind? And Jim, uh, we're in the process of building a new building, which a lot of fun for us. I mean, and I think for all of us, um, as stakeholders, it's interesting to hear, you know, we got to go through, so what are we thinking about the layout of the building?
Speaker 3:
42:48
How are we going to have wellness, daycare? Are we having, um, what type of food, what type of cafeteria is it, how food, um, which, which the best coffee vendor for us to have there. All of those types of things. And we have to think about pay, not just what Jim Caldwell likes or Paul Wes likes, but what does everybody want? What do our clients want? What do our employees want and how do we look at that? And those are all gonna be super important decisions we make in gym. One of the things we do in our offices, and I want to have you talk about this, is we actually have digital whiteboards inside of our client meeting rooms. And we use those all the time. And the big reason why we use it is because we want to teach you, most importantly gym. You do it. And I've seen you do this because you and I had a meeting together the other day is to help personalize it for a family. Um, so when you're sitting in and you're talking through all these complicated features, why do you sit there and draw the picture for them? What's the reason or rationale why?
Speaker 4:
43:48
Well, the statistics will show that we're, we all learn more visually with our eyes obviously than we do with our ears. When we hear something, it resonates. It sticks. It makes more sense. So not only do you want to paint a picture for that person in the room that you're chatting with, but we've, we had those touchscreens that go along with it. So it's fun to have. If we're with husband and wife or whatever, have one of them go up and actually hit the buttons themselves or slide the screen up and down and it, it kinda gets them really involved as to what was going, what's going on.
Speaker 3:
44:20
Yeah, it does and it's, it's, it's amazing. Like when you're involved in the decision, you're going to feel more comfortable and you have to be involved in your decision related to all the benefits that you and your family are looking for, but not missing out on opportunities. Hey, listen, the benefit to your offered through your employer, maybe you're in an association, all could be impactful for you. Whether it's part of your retirement plan, whether it's investments, whether it's health insurance. If you need help sorting through all of this and you want a complimentary consultation from us at Carson, just go to Carson wealth.com. Click on connect with us. You'll be able to set up an appointment and get your complimentary consultation. Um, or if you really liked what we taught you about budgets today, you can text us at 33, four four four, put in the code WFW desk budget. It's 33, four four four WFW dash budget and we'll be able to help send that to you to help you make more impactful decision on your life. Hey Jim, thanks a lot for being on today's show. You've been listening to wealth from wisdom
Speaker 2:
45:20
risk, 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:
45:33
Okay. And here's the legal mumbo jumbo. The opinions voiced in wealth from wisdom with Ron Carson are 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 and may not be invested into directly investing involves risk including possible loss of principle. No strategy ushers success or protects from loss. Past performance is no guarantee of future results. Advisory services offered through CWM, LLC and sec registered investment advisor.
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