Wealth from Wisdom

Your Biggest Expense In Retirement

February 09, 2019
Wealth from Wisdom
Your Biggest Expense In Retirement
Chapters
Wealth from Wisdom
Your Biggest Expense In Retirement
Feb 09, 2019
Carson Wealth
Show Notes Transcript

Your biggest expense in retirement isn’t what you think… On this episode of Wealth From Wisdom, Paul and Jim discuss the piece of the retirement puzzle that you are probably overlooking.

Speaker 1:
0:00
Okay. And here's the legal Mumbo jumbo. The opinions voiced and from wisdom with Ron Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm, LLC and SEC registered investment advisor
Speaker 2:
0:31
Doug market hit another old time. Records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 250 the skyrocketing cost of healthcare and retirement could now run 350,000 planning for retirement today is now a whole new ballgame. It's loaded with challenges, obstacles, and trap doors that you can do this and we can be your guide. Welcome to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. Straightforward and objective advice and how you could make your money go further in retirement. And now here's your host, Ron Carson, IRA's and 401k's social security dividends from stocks and bonds, pension, annuities. You know, these are some of your potential income sources in retirement, but if you just start taking money from these sources without any rhyme or reason, you're going to get hammered in taxes. Yeah, hammered. I said, yeah, that's right on the radio and you'll never ever get this money back.
Speaker 2:
1:29
Hey, welcome to wells from wisdom. I'm Paul West and today we're sharing strategies with you that could really help minimize or avoid pain, thousands and thousands of dollars in taxes and retirement. My cohost today is one of our wealth advisor, Jim Caldwell. Jim, welcome to the show. Thanks Paul. Yeah, glad to have you. Hey, we know taxes will likely be your biggest expense in retirement. No, not your house, not your travel, not you're eating out budget, not your golf budget. Jim, not ever what it is, but taxes could be the biggest expense in retirement. But guess what? There is good news here about that. I know you're the sane. What? There's good news about paying taxes in retirement. Well, the good news is, is you have more control than ever before. You know why? Because your hands are on the wheel, you gotta drive, you gotta help make some of these decisions.
Speaker 2:
2:18
So on today's show we're going to talk to you about how you can control these income sources and minimize your taxes in retirement. And we're really going to think about ways that the biggest missteps retirees make when they withdraw money from their IRA, their four zero oneK or other retirement accounts. We're also gonna talk about how to avoid unnecessary taxes, penalties and fees with the dreaded RMDs or required minimum distributions, or there's also a new hidden gem in the new tax plan that could be actually a financial windfall for you in your retirement. Jim is just like all these things going on with taxes, but I'm going to say, you know, there's excitement of the air falls almost here. Football season's going on and I couldn't be more excited and it's probably no better thing is everyone's undefeated at the moment right now, right?
Speaker 2:
3:08
I mean there's zero zero for all the teams out there. And just that smell of in the air, I call it the smell of excitement, the smell of confidence that goes along. Hey, what about the smell? The tailgates, burgers, brides, beer, bloody Mary's chips did all the above. All of those things that are fun. And as I think about football, you know, anyone in football, you have to have a game plan in place, but who has to, who ultimately has responsibility for the game plan? The coach, coaches the coach at the end of the day, they're, they're held accountable for everything they do, but they've got to figure out ways to really calculate what's best. And I was, I was thinking about taxes, thinking about it's football season, gym. So there's a lot of coaches. So of course, you know, we're based here in Omaha. There's a slight allegiance in this state.
Speaker 2:
4:00
When I say slight gigantic allegiance in the state to Nebraska, Cornhusker football, um, I will tell all the listeners, Jim, who your favorite team is, which is Ohio's. Yeah, be careful what you say. They're big 10 always root for your big 10 conference. So you told me Nebraska is your second favorite team. I'm actually going to go out and buy some gear this week. Sorry. Well I've got plenty to provide to you. But as you think about, and I know you spent some time coaching your life, I helped coach my children's activities, not football, but in figuring out what's the best decision to make when you're coaching athletics. A coach has to take all the data and information they make. So let me give you an example. When you're working on your taxes and if you're doing it on your own, so you're using turbo tax or whatever it is, all you're doing is taking your data, plugging it in, and then either paying money to the IRS or getting a refund back from the IRS.
Speaker 2:
4:58
But let me think about this. So in football it's gotten really more complicated. So what happens in the day, there are stats right at the end of the game, how many rushes for, how many rushing yards and how many yards precarious did you get? How many passes did you throw? How many completed, how many yards, penalties, penalties, although those things. But what does a statistician, dude, there's now statisticians on all of these football teams. What do they do? They document the numbers, they assemble them, they compile them, and then the numbers are the numbers, right? Cause that's what exactly happened. However isn't a coach's job then to go look at those numbers and make adjustments so that in the future the numbers can move in a direction that they want them to. And people don't do that with their taxes. They just let the stats lined up. So are you a statistician right now with your own personal tax situation? Or are you actually a coach? Well, going back to what you said earlier about a game plan, Paul,
Speaker 3:
5:58
you know, I look at coaching and being a wealth advisor is really the, the same type of approach. You know, coaching, you're dealing with players, wealth advisors, you're dealing with players, but a different type. But the whole thing is you gotta have a plan in both situations. You've got to put your players in a position to be successful. We always talk about that now as a wealth advisor, you're working with households. Your goal is to put them into a position to be successful. And you do that with an appropriate game plan.
Speaker 2:
6:28
Yeah, you do. I mean, I think one of the things is we talk about taxes here today and really how to help make sure people could save thousands and thousands of dollars is my analogy of being a statistician versus a couch. You have to be able to look forward. But in looking forward, that creates what I call tax efficiency in figuring out the best ways to approach it. So what are you always going to be taxed on your brokerage accounts, your checking accounts, your savings accounts. Hey, Jim, do you think people actually realize that if you have money in a CD or your bank account, that you get taxed on it? Most people don't, or they look at that interest payment. They're like, oh, okay. Actually we do. Um, then there's another category we call tax later. So this is what, it's deferred. You're waiting, you know, like you defer to the second half to receive right?
Speaker 2:
7:14
Or to make your decision. You're deferring this decision to later on paying taxes. You're 401k behaves like this, your Iras, your four O, three B real estate or other assets. And then lastly your those are that are rarely tax unique situations. So your Roth interest from Muni bonds and actually, you know, certain types of life insurance that happened there. But I think as you look at what goes on, you have to be forward thinking. And all of these, and I look at this, unless you use Nebraska here, so they just released in the last week, Jim, they're starting lineup and their depth chart. So thinking of forward thinking, they want to win now, I mean there's, there's, I'm gonna say some pressure on Scott Frost here to do winning, but he made a forward looking decision and decided to start the first true freshmen in the history of University of Nebraska football.
Speaker 2:
8:07
Now he had to do that thinking about the here and now, but I'm sure going through Scott's head is he said, you know what, I want to do really well this year, but I want to build the program for the future. I want to bring Nebraska back to where it was before. So he had to do a forward looking thought to say, all right, this person's numbers and stats because I have zero of them may not be the best compared to others. However, if I'm going to take a forward looking approach and what are going to improve our stats here and certainly, uh, the losing record, the team had a year ago to hopefully a winning this year and to the national championships games to beyond, he had to take a forward looking approach with who we selected on the depth chart.
Speaker 3:
8:47
And Paul, you could, you can use the same analogist where you look at investment returns versing versus building a quality portfolio. Too many people
Speaker 2:
8:56
are short sighted. They want to see instant gratification, six months, 12 months. That's not always the best case. You gotta be looking longer term with your investment returns as well as your tax planning. Yeah, you do. I mean, so I mean, as an example of that, I'm, Jim is, I mean people think longterm, well if you're below 60, there's one number you need to be thinking about. And that's 59 and a half because that's really the first time you can begin withdrawing money out of your account without paying that 10% penalty. You still may be retaining taxes still tax. All right, so then we get into what social security can begin after age 62 you got to do a social security analysis. We've talked about that many times. 65 and we talk about Medicare and then what also happens age 70 and a half or so.
Speaker 2:
9:40
If you're at RMDS, all of these things are milestones to help you get to there. So again, let's go to milestones and football. What do you, what is usually a team's goal when your division, exactly. If you in your division in the big 10 what gets to happen? Get to play in a conference championship. Yeah. So your goal then is to what win that game and hopefully a birth and national championship only we've seen as of last year, that doesn't always pan out. Yeah, it's tough. I mean, well, hey, especially if you look at the big 10 conference with the number of quality teams, that's not easy to do. But if you set the goal, they'd be the same way is if the tax system change. So if you did everything correctly, you planned out your year and you did all those things correctly, then you got to put your plan in place for what the field's dealing you.
Speaker 2:
10:27
And if something changes in the rules, like this craziness on, you know, driving a quarterback into the ground or things like that that are, you know, maybe changing the game, your tax situation could change based on a new tax plan. Hopefully they're all very beneficial, like our most recent one. But you've got to really think about how you're contributing money to your own financial future. So I'll give you a feel good story. Household. We're working with, uh, get ready to retire. They're there. They're asking the same questions that you've just touched on. And fortunately we were able to start in the early sixties to do some planning so they don't have to wait until 70 so what we're doing is they're going to be able to retire for all the good reasons and we're going to take some of their qualified money and we're going to use that to bridge the gap right now.
Speaker 2:
11:12
Their Iras or 401k's because they don't have as much taxable income in their mid and upper sixties and qualified. You mean they've contributed pretax but they're going to get taxed on this later. Exactly. It's, it's, it's, it's all a taxable event. Okay. So we take some out now that way they can differ. So security until 70 so they'll get a little bit more bump there and we'll smooth out the tax liability moving forward here. Again, tax planning versus just tax returns and they're very pleased with that. Yeah, and I think that that's a good example, Jim. I mean, and if they wouldn't, what happens? They're going to end up pain. I mean in that situation, I think we were talking off air. I mean that could have cost him an additional what, 10 $15 per year. So imagine right now, do you went to the bank and put, you know, drew 10 withdrew $10,000 later on the table and then just throw in the trash or burn it.
Speaker 2:
12:02
How are you going to feel or trigger or tried to beat you in golf that do with that it just beat, be careful what you do, their gym. And so I want everybody to think about this. Are you really being a coach and you're sitch tax situation? Are you just being a statistician or are you just taking the numbers, plugging them in? Or are you actually taking them and projecting in the future? And there's pain. If you don't, I mean, we're talking thousands and thousand dollars of pain. You know, who's gonna enjoy that? The government, they're going to really appreciate you contributing more to them from a tax situation. So we actually here at the Carson group, specialize in creating forward looking tax strategies. Give us a call. (888) 419-8513 remember, it's not what you make. It's what you keep. (888) 419-8513 you're listening, right?
Speaker 4:
12:50
Well, from wisdom, he seemed good times and bad times and he's got the gray hair to prove it. You're listening to wealth from wisdom there and tell the same advisor, rod Carson, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to well from wisdom with Barron's hall of Fame Advisor, Ron Carson. If you withdraw money from various income sources in retirement without any rhyme or reason, the reason
Speaker 2:
13:17
you could actually get hammered with your taxes and you're never going to get this money back, the never words pretty strong, isn't it, Jim? Hey, this is Paul West and welcome back to wealth from wisdom and we really have a great show for you today. If talking about football, we're talking about taxes. We're talking about ways that you can make small changes to improve your life. And really as we think about this, we want to help you minimize or avoid pain, thousands and thousands of dollars of taxes in retirement. And he had in this segment, we're going to reveal the differences between pretax and after tax retirement accounts. Plus which one of these should you actually tap first in retirement? And Jim, I think about, you know, fees and pain too much you ever had, you know those just painful fees. Let's think about businesses. You had a painful fee that guess what aren't around anymore.
Speaker 2:
14:07
Blockbuster late fees, right? Yes. Late fees drove yet crazy. Absolutely. So what happens, other companies, Amazon in particular figuring out a way Netflix to Oh have digital content and no late fees, huge change and avoided pain for the consumer. Well at the end of the day, if you have money and you haven't paid taxes on it, the IRS is going to want to get some point of it, some part of it, and you have to figure out what's the best way to approach it. So part one is what's called a tax deferred account and that is your ability to take money and defer it until later. So you're four o one k and your IRA are two of the most you common utilizations of this strategy of tax deferral.
Speaker 3:
14:56
And Paul, we see that all the time people we work with, and this might be similar to some of our listeners out there, this this pain point, so to speak, where we're about 90 or 80% of their assets are in 401k and retirement plans. So down the road you got a big time tax problem. Um, you know, we talk about possibly adjusting and we've done that with some people adjusting the amount they put in and setting up a systematic, uh, into other investments or even trying to incorporate a Roth. So if you're out there and you are putting all that money and 401k's, that might not be all the best way to do it.
Speaker 2:
15:34
Yeah. Well, and I think Jim, we're also, now we are running in the longest bull market in history. So what's happening, you're 401k plans have grown like you've never seen before. And if you're a younger investor, if you're listening to us today and you're below the age of 40 you probably not ever, and I'd say probably you haven't experienced a time like this. You grew up in the two thousands which was a very challenged decade because of 2001 and then the 2008 financial crisis. Some of those days are going to happen again. I know it may not feel like it, but those are going to happen again. And you really got to protect yourself. You've gotta be careful. And Jim, this reminds me of, you know, we're talking football, we got to, it's fall. So who's usually the most highest paid position player in football? In the NFL quarterback. Yeah. Why? Because he makes it, he makes the decisions decisions. So who's usually the second most paid person?
Speaker 3:
16:32
Well, it's, it's going to be the tackle that protects his backside. So if you have a right hand quarterback, you're going to have, your left tackle is going to be your, we'll call it a blind side. He'll be the highest second highest paid.
Speaker 2:
16:42
Yeah. And obviously there's a famous movie about that Jim called the blind side movie. Yeah, it's a lot of fun. But I mean I even love the began that movie. They replay what happened between Lawrence Taylor and Joe Theismann. Oh, you know, I don't like to visualize that. What actually transpired there, but it really relayed the importance of protection and risk avoidance and protect people's blind side. So here's something that's interesting. So from the snap of the ball to actually the snap of Joe's bone, how long did that take? About three and a half seconds. Yeah. Well just a little bit under four. So you're close, you're probably maybe close to an I am thought it was finally going to get one number, right? You did well. But think about this. Joe Theismann had played 163 straight games, a record for the Redskins. He had led their team to two Superbowls and he won it in 1983 and then in four seconds, not only Joe, but the Redskins had lost their biggest asset.
Speaker 2:
17:44
And I think about is your portfolio right now? If the market goes down again, is it really protected? Especially if you're over 55 right now and you've been riding this fund with, you know, Amazon and apple and Netflix and alphabet and Microsoft recently and all these things that have done extremely well, but are they positioned that if we run into that next bear market that you're going to be okay and let's think about this and the fall of 2008 America experience a similar challenge to their blind side. When the stock market experienced the largest point drop in his history, we actually lost 10 point 2 trillion. Yeah, a t Jim trillion. Not you're not Jim Tressel by the way. I learned your Jim Caldwell, so that's good to know. Good to know. But just put that into perspective. That was one fifth of the world's GDP at that point in time.
Speaker 2:
18:41
Everybody's assets set aside for financial security or retirement. We're essentially a race. They were lessened significantly. That's a career ending blow or were shit, I actually would call it the [inaudible] gym. That's a career extending below. Cause what does that mean? If you're working, you're going to have to keep working, keep working. Sure. You know, a couple of things I think to address here, I mean we talk all the time about people blindly trust in their financial advisor and I think that's where you can get into a big problem and that that did happen a lot to a lot of people in 2008 but you go back to the fives when story they had what people don't know. They had a bunch of injuries to their offensive line. So they were put in a position of doing two things. They were just going to blindly trust that new second left tackle that came in.
Speaker 2:
19:27
Or they could have helped him out with a better game plan to maybe chip a little bit or help out against Lawrence Taylor with a tight end or running back. And they took it for granted. He could handle Lawrence Taylor one-on-one and they paid the price. Yeah. And so I think it a good analogy. I mean blindly trusting anyone, Jim. I mean trust but verify, right? A very famous that's out there. But if your financial advisor cannot give you your data points, I mean, I'm gonna say within minutes, I don't mean days, I mean minutes. If, if you call them up and say, hey, how am I doing this year? And if they say, Oh, you're great, or you're good, or at the front, I'm going to say not so good. Actually, if they tell you not so good, I would continue to trust them because they're telling you the truth.
Speaker 2:
20:15
They're telling you exactly what you need to hear versus you want to hear. But if you're person said, oh, well let's wait till your next statement comes out. The data is there today. The stats, you know, like the statistician and football, they're real time. I mean, you're giving everybody that information. They then have responsibility of giving it to you in a timely manner. So let's talk about, you know, how these things work. And we were talking about being tax deferred gym in, you know, once you're over 70 and a half, you're, you're forced into what's called an RMD required minimum distribution. And by the way, if you don't pay attention this the penalty. Yeah, listen to this, to have the final d could be 50% ouch. That's not a five yard penalty and football. That's not a 10 yard or 15 yard game changer. That's like a game eg ejection here because it completely changes everything and you don't want that to happen to you.
Speaker 2:
21:12
So don't let that. But also what happens there is you're marginal income tax bracket increases dramatically. So be very, very cautious. So the other part that we want to talk about is taxable accounts. So people forget that if you sell in an investment such as your stock, your bond mutual fund, even real estate, they're taxed at capital gain rates. But this really depends on the length that you hold that specific stock. And people, Jim, forget about that all of the time. I think it's a big reason why, you know, fiduciary companies like ours have to, one, give people advice on not only is it best to hold that specific security, but what's the best tax decision in relation to hold that security.
Speaker 3:
21:59
I couldn't agree more with that. I'll give you another thought when we talk about the planning part. And you know, a lot of people now are going to work longer. They're going to work into their seventies so when you're doing the tax planning in the early sixties, some of the little tricks you can do after they're 70 and a half to have to take their RMDS, required minimum distributions like you said. But if they're still working in, they have earned income, they could contribute to a Roth IRA, which could come in valuable down the road with regards to leaving money to children or to your wife or whatever when you pass.
Speaker 2:
22:30
Yeah, it makes a huge difference. And so, you know, one of the simple ways people do it, Jim, is just take money out of their checking account every single month and ACH it into an investment account or even their bank. I think that's a good thing, but it's better than letting it sit there. Cause otherwise I think we're all, we're all guilty of that money that sits in our wallet in cash. So you'd go to the ATM cash. It's just funny how it, uh, how am I going to say? Slowly disappears quickly disappears. Look in our producer right now, Andrew, and he's looking like you hope that happens to him all the time. It does to all of us because the a cup of coffee or like, oh I'll go buy, you know, a dozen donuts for the coworkers, all, you know, all these nice things. But it just tends to dissipate rather quickly.
Speaker 2:
23:16
No different than, and I give an example of what I've heard about the University of brassicas football team this year is the amount of time and effort that they've actually spent in the weight room is going to pay off a ton because they're stronger, they're faster. But why? They paid attention to their game plan. They didn't get lax on it. They made sure they followed through and they held each other accountable in Jamaica. This is interesting. So I know you're a super early riser Europe, way more than most people. Like almost count on having a text message from you in the morning before I get up, which is the reason why my phone doesn't go in my bedroom. I don't want to see those or look at those for people and then all of the night. But successful people are people that stick to a plan are often early risers, like yourself, Jim, pretty early to farmers, others that you actually are good cognitively thinking in the morning and ready for the day. And I know Scott Frost adopted that with the football program is hey, let's get up early, let's be engaged. And also smart because it prevents people from making bad decisions the night before.
Speaker 3:
24:20
Yes, I, I like what he's doing. I like his approach on that. And I think you need to have a routine w not just with your personal life but with your financial world too. I mean, you've got to have a checks and balance and you've got to have a checklist you can go through to make sure you're staying on track to where you want to be down the road.
Speaker 2:
24:36
Yeah, you do. I mean it's, it's, it's helpful. And by the way, accountability partners or some of the best things, but financially a, are you and your spouse, your own accountability partner? I'm going to guess not. So right now, if you're not, if you want an accountability partner, give us a call. (888) 419-8513 or at least at minimum will help set you if you're on the right track for success because making a mistake here with your taxes could cost you tens or hundreds of thousands of dollars and you don't want that to happen. And this analysis, by the way, we're going to give you to help you think through this. There's no costs. Zero for you to do that. (888) 419-8513 (888) 419-8513 I'm Paul West and you're listening the wealth from wisdom radio network.
Speaker 4:
25:22
How could you make your money go further in retirement? Learn how next. Unwell from wisdom with Barron's hall of Fame Advisor Ron Carson, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. Hey, I have some good news for you. You have more control over how much, how
Speaker 2:
25:45
much you pay in your taxes in retirement than any other time in your life, and this could be your best opportunity in over 40 years. You could save thousands of dollars in taxes in retirement. Yeah, that's true. Hey, this is wealth and wisdom radio network. I'm Paul West and we just have a great show we've been talking about with you today and coming up in this segment, we're really gonna talk about the strategies to help you minimize paying all these taxes and in this segment to talk a little bit about Roth Iras and best strategy of the work, but also in the little known strategy that can help you avoid being taxed on as much as 85% of your social security benefits. Jim, and we would spend some time on the fun movie, the blind side and talk about that, but I actually asked our listeners, do you have a financial blind side right now?
Speaker 2:
26:29
Is What is it? Is it your investment plan? Is it your insurance plan? Has Your will's been updated recently? Recently? What about your trust? Do you have trust set up so you can avoid probate or your beneficiaries actually set up correctly on your 401k plan or your Iras or your other accounts. And Amazes me, have you actually got a land valuation recently? Um, had you have the right amount of insurance? What are all of those things? Everyone I believe has some form of weakness in their financial blind side. And what are you doing to protect it? And on today's show we're going to keep talking about all of those things. And Jim, I think you're doing something really interesting. You know, your job is as you help provide advice to people and making sure they don't have a financial blind side and using that term again in many different ways. But I thought you're doing an interesting series here this fall that you could share with our listeners.
Speaker 3:
27:20
Sure. Uh, you know, talking about financial, I call it financial phases. We started out with the first video is called Jimmy's jam. You can find it on Linkedin or you can go to Twitter and look up, you know, at Caldwell wealth and they're only a minute long. But I feel like they've added value. A lot of people have gotten back to me, they really like it. But the one we just did addresses what Paul just said about balance and we talk about offense, defense and special teams. Those are the three phases and in a football game and the offense needs to be able to run the ball and throw the ball, obviously be balanced. Defense needs to stop the run and prevent the long pass. But the special teams is the most important that you're kicking game and they kicking game could, could flip the field for you, so to speak. Same thing with your financial plan or portfolio. Do you have that ability to flip the field or rebalance that portfolio at any given time?
Speaker 2:
28:14
Yeah, I mean it makes a huge difference. And um, and I've had a chance to watch a couple of high school games already. Jim and kicking is amazing to watch trucks with the high school level. Uh, the ones that have figured it out, their game changer for them. They, I, I th I say it's like they're running on a tilt downhill and the other teams run on a tilt up hell because of mistakes they're making and people do this all the time with their own financial decisions they make. But are you tilted uphill or downhill and your decisions, if you're stuck making you know, decisions because you read an article somewhere or you heard something from a friend, I'm going to tell you right now, you're running it on a tilt uphill. There is no doubt in my mind, and actually there's been a study done by vanguard that shows if you do this all on your own without financial help, that it's 2.92% net of the advisor's fee that you do worse.
Speaker 2:
29:11
You know, let me say that again. If you do this all on your own and just read articles and make all your own decisions, it's called the advisors Alpha that you would perform 2.92% net less. Why? There's a lot of different reasons, asset location decisions, but a big part is behaviourally helping people make the right decisions or avoid making mistakes. And we're talking a lot about football today. It's that time of year. And I think about Jim, a coach's job is to actually help players not make, right? Correct. So if you're a defensive back coach, what are you trying to do? Teach them not to get burnt. Don't get beat over the top. Yeah. And but also plagued us, extended on the outside, they do a running play, a sweep, whatever it is. How do you contain, right? Because often the running back is much larger or faster than even the potentially the cornerback. So their job is to help protect, right? And help make sure this person doesn't get passed to them in a quick jaunt down to the end zone of that occurs.
Speaker 3:
30:12
And that goes back to what we opened with today about the game plan. Because in your game plan you're going to have different situations where you're going to run certain fronts or certain the eight guys up closer to live scrimmage and how you're going to tie it in with your defensive backs. That's an ever changing throughout four quarters. You're making adjustments just like in your portfolio or in your personal wealth plan. It's not static. It's ever changing.
Speaker 2:
30:38
Yeah. Well I think about, you know, running an offense, and it's certainly over the last 20 years, Jim, people love to throw the football now and the college football game. I mean it's just, yeah, it does sell tickets, but it doesn't always win championships. What wins? Championships. Offense and special teams. Yeah, all day long because people make sense. But when you're trying to come back, so let's say this, let's say you've, Matt made some bad investment decisions over your life or you've made some recent bad decisions and so now you want to catch up. What do you do? You throw the ball a lot, you throw it deep down the field trying to help connect. I think there's a pretty famous play call. It's called the Hail Mary Hail Mary White. Yeah, but why is it called the Hail Mary? Because it's basically a prayer. Yeah, it is.
Speaker 2:
31:23
But our people, Jim, if somebody made a mistake and they're 401k, maybe they took too much risk in an area and now they're trying to, what I call his play catch up. So they're throwing the ball way too much when they shouldn't. Or are they figuring out, now you know what? It does sell tickets, but I completely believe this. And look at all of college football, the price tickets, looking at what college football coaches get paid now, however, at the end of the day, they're all judged by one thing. Winning, winning, winning is what it looks like. So think about that. How are you winning in your own financial life? So have you been throwing the ball for a long time and are you up in the game? Do you need to actually change your offensive scheme from throwing the ball to get him back in that power I formation and just pounding the ball slowly but surely down the field, getting three to four yards per rush. But You keep getting first downs and while it doesn't look pretty, it's taken the clock and helping ensure that your money lasts throughout their lifetime just as you want to win the game by keeping the clock running and doing what's right. So me don't make a mistake by trying to play too much off fence when you don't need to or making an adjustment to your offense when you may be shouldn't have.
Speaker 3:
32:42
And looking at it from here, again a a football perspective about playing a little bit of defense. We had a household come in and we went through and did a plan forum where we talked about some of their pain points and concerns in the lady's biggest concern was, hey, I'm gonna retire this February, maybe march at the latest. You know, what happens if we do have this market correction that everybody's talking about? So you know, as a wealth advisor or a coach, you can only give them advice. And the advice I gave was, hey, we can do an inservice distribution. We can take that money out of your 401k rolled into a traditional IRA. And I said, what do you think of that? And she said, I'll go with that. So she ultimately made the decision at the end of the day, we just gave her the tools and or the playbook to make that call.
Speaker 2:
33:29
Yeah. So you saw that she was going to miss the tackle. She was going to say, see you coached her on a way to avoid missing the tackle, but she had to actually get out on the field and make and make the tackle. Yeah. And she made and she made it. So that's really fun to see. And I think as we look at today's world, you know, something we're a little bit cautious about Jim and I'll talk about this as we've seen interest rates continue to rise and that's going to keep most likely happening. That's what the ads are showing us today. But also I think people are now, you know, the housing market, maybe beginning to show some weakness or at least for home builders and some related industries. But thinking about people who are borrowing money for the first time, so are, you know, have borrowed money.
Speaker 2:
34:10
But having an awhile, uh, they're borrowing money for this new house, but we're also, they doing, they're borrowing money for furniture and all of these other things and they're extending themselves and they're taking a lot of risk. But do they need to be, I dunno, I mean it's going to depend on that situation. I'd feel a lot better if they had a financial game plan in place to make sure the risk they're extending. Whether use your example, if they get eight people up front on defense or uh, do they know the other team's going to throw a hail Mary, so they have eight people playing defensive back and just protecting them from getting the end zone. You two and your own financial situation got to be looking at those types of things. So for example, I look at, you know again how Amazon and alphabet and Netflix and Google and apple and Microsoft performed.
Speaker 2:
34:59
Is it actually time to maybe take some of your chips off the table? I don't know. Now you may have tax situations to think about, but talk with a professional. There may be a way to take some of them off of their eliminate or reduce the amount of taxes you paid, but also help protect you, especially in retirement, that causing your social security to be taxed up to 85% by as you generate more and more income throughout your retirement. If you are in a help thinking about this, give us a call. (888) 419-8513 that's (888) 419-8513 your best defense is to really ensure you get every nickel out of your retirement. Give us a call. Eight eight eight four one nine 85 to 13 (888) 419-8513
Speaker 4:
35:48
trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth from wisdom with and Taller theme advisor, Ron Carson. Is it possible you could pick fewer taxes in retirement and keep this money for yourself? You put learn right here and right now. Unwelcome wisdom with baron, tall of foam advisor, Ron Carson, IRA's and yeah.
Speaker 2:
36:13
401K's social security dividends from your stocks and bonds, pensions and annuities. These are actually some of your potential income sources in retirement, but if you just start taking money from these sources without any rhyme or reason, you could actually just get heritage your taxes, and by the way, you're never ever going to get this money back again. Hey, welcome back. I'm Paul West and you're listening to welfare wisdom. I'm joined by my cohost, Jim Caldwell, and thanks so much for joining us today. We're having a lot of fun today talking about football, talking about finance, talking about making the best decisions, and we're going to keep revealing strategies that can help you minimize or, or at least at bare minimum, avoid pain, thousands of thousands of dollars of taxes in retirement in gym. That's it makes me think about a quote. So it is, we're thinking about life. People when they think about taxes tend to go the avoidance route when it comes time to actually put together your financial plan.
Speaker 2:
37:11
What if people do avoid it when it comes to time to update your will or your trust? What up most of you do you avoid it. You don't want to do it. I'm to share a quote with you. This is from Andy Andrews. Self discipline is the ability to make yourself do something you don't necessarily want to do to get a result you would really like to have. I think about that. If you don't want to do something but you know you need to do it because you want that result. If you're self disciplined, you're going to make that happen. I think about football, what happens? The kids, the families, the coaches that put in what I call discretionary effort when it's maybe not convenient for them to do so in the off season, on the weekend at night, they make those things happen, but guess what? It helps them generate the result they want to have.
Speaker 2:
38:04
How many times have you been kicking that can down the road of making a decision of updating your will or having your insurance portfolio we looked at or whatever that may be. Don't do it. You're going to feel so much better. And Jim, I actually share a story of what we, I like to call selfless versus selfish. I know we talked about Colonel Athens several weeks ago, but he was an individual that talked about, you know, the best people actually are in their financial situation, their selfless, the partner with professionals because they're actually more selfish if you try to do everything on your own because are you really protecting your family by not bringing in experts, even if they're just coaches or consultants to give you guidance along the way versus making individual decisions all on your own. And so I was actually talking with a family last week, Jim, a little bit about this and it was interesting is you know, they've done actually a really good job.
Speaker 2:
39:06
They set up their will, you know, they set up their trust, you know, to help protect children. Um, they have money invested in several different locations. However, the challenge they have is, is there's one family member, in this case, the spouse that knows where everything is and knows what the game plan looks like. But Jim, do you know where the game plan is? Do you think it's written down? No. No, it's in his head. It's all in his head on how this works. So I looked right at the individual and I said, so what happens if you're not here? What does this do for your family? And I got silence just like hear on the radio is I got to stare. And that was, I don't know what am I gonna do about that? And I said, well that's where you needed to talk with a professional to make sure that they don't necessarily have to manage everything for you, but someone else better be there to protect your family. I couldn't imagine leaving my family in a situation where I was so darn selfish that I didn't at least share my financial plan with someone else. So that way it can be carried out for my family if I wasn't here.
Speaker 3:
40:13
And so Paul looking at it, that's why we feel like it's so imperative that both husband and wife attend the meetings when they come in here and visit with us. Cause we want everybody involved. We want both inputs. Okay. Very, very important. And I know there have been instances where we haven't taken on a new household just because we didn't feel like we had both parties fully engaged. Yeah, well I think
Speaker 2:
40:38
Sammy, so that'd be like saying, Hey, um, you know, we're going to coach Nebraska football team, but the offensive coach isn't going to talk to the defensive coach. I've seen that. Well, what's going to happen? They're not going to be successful. Not good things. And you may think, oh well they're completely different, but they actually work together.
Speaker 3:
40:56
Well, I'll give you a great example of that. All right, this is, this goes back to, you know, today we talk about offense selling tickets because they're throwing the ball all the time. So your defense, you're out there on the field, you're playing a really tough opponent, your defense is tired. It's the fourth quarter, they've been on the field for 80 snaps and you go out there and you three and out, you throw the ball, you don't think about, hey, we got to run the ball a little bit here to run some clock and give our defensive kids time to rest. So we can make that one stopped to win the game. You gotta be working hand in hand.
Speaker 2:
41:28
They do. And I think you have to make the right decision. And by the way, sometimes or many times if you're today, are you the offensive coach? Are you the defensive coach in your spousal relationship related to money? I don't want to talk about overall because I'm certainly not a guidance counselor for marital advice here for the people in, in terms of thinking about authentic and defensive. Some people love to take risk and some don't. And actually many decisions you're going to face. And as we talk about taxes, so let's talk about specific companies have four one k plans, but some actually have pension plans, gym, and in a pension plan, sometimes you get offered a choice between continuing the pension plan or getting a lump sum buyout. So of course the lump sums more money in terms of what you get today, but you need to actually do an analysis.
Speaker 2:
42:20
Don't make a decision in 32 seconds, oh, this looks better. You need to think through it because there's a lot of information that go through this decision. For example, it will actually the pension plan and that company, what is their duration look like? How comfortable are you with it? But if you get the money and you take the lump sum, what are you going to do with it? Are you comfortable? You're going to manage it yourself or you're going to send it to a professional? How are you going to approach it? You got a lot of different decisions to make. No different than choosing what formation do I run an offense or what defensive scheme plan do I put in on defense? And a lot of times in those situations, people do make those decisions far too quickly and they need to be able to have a outside professional analyze all the possibilities.
Speaker 2:
43:08
It's no different than a, when you, when you're in a game, you've got not just your coaches on the sideline, but you've got coaches up in the press box and they're getting a different perspective from being able to see from up there versus down on the field. Especially when you get older and you don't see as well as you used to. True Yours. You're only speaking about yourself to get by myself. That's so nice to, I don't know. I actually, I did Lasik a 10 plus years ago. Jim and I love it and I think is a great decision. Um, but I can tell, uh, the long distances, uh, starting to fade. So the glasses or contacts are probably not that far out for my future. Um, but you know, its future and looking at a pension plan, don't forget about the taxable nature of your pension plan.
Speaker 2:
43:51
So especially if you're taking a pension payout, most private and government pension plans are taxable at your ordinary income rate. Think about that. Not, not capital gains rate, but your ordinary income. So that assumes you didn't make any after tax contributions. Maybe you did, but most of you probably did not. I can't say that again right now. If you're going to get a pension plan and they're going to pay you whatever it is called, $1,000 a month, think about your taxes then and what your tax rate. So you subtract that is what your actual net is going to be. So you actually have to look at your after tax decision and I mean and that's where the benefit of that's your head coach. You control your family's decision, but does your head coach actually help you think through the right offer, sensitive and defensive strategies that go along with it to ultimately help you build that five step retirement action plan. And that's something we do here at the Carson Group. If you want a free customized analysis, give us a call. (888) 419-8513 (888) 419-8513 hey Jim, I really enjoyed talking with you today to football and finance stories, helping people make the right offer, pensive MDC, defensive decisions for their own investors kicking game. Be careful about special teams as well. Give us a call if you want to talk further. (888) 419-8513 you've been listening to wealth from wisdom
Speaker 4:
45:16
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:
45:30
Okay. And here's the legal Mumbo jumbo. The opinions voiced and Wellframe wisdom with Rod Carson or for general information only, and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk, including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SEC registered investment advisor.