Wealth from Wisdom

The Answers to Your Retirement Questions, Doubts and Concerns

May 05, 2018
Wealth from Wisdom
The Answers to Your Retirement Questions, Doubts and Concerns
Chapters
Wealth from Wisdom
The Answers to Your Retirement Questions, Doubts and Concerns
May 05, 2018
Carson Wealth
Show Notes Transcript

Have you ever wondered if you’ve saved enough for retirement? How much you can afford to spend? Or if you’ll run out of money? Ron Carson and Paul West will answer your biggest questions on Wealth From Wisdom and share 7 strategies that could make your money go a lot further than you thought possible.



Speaker 1:
0:00
Okay, and here's the legal Mumbo jumbo, the opinions voiced and Wellframe 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 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, an SEC registered investment advisor.
Speaker 2:
0:30
This Doug mark, it 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 for retirement. Today is now a whole new ball game. 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 bear and 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.
Speaker 3:
1:10
You have doubts, concerns. Everybody does. They're wondering what's retirement going to be like? Do you have that little voice in your head that says, you know what am I going to be okay and have I saved enough and will I maybe run out of money? And if you're not asking yourself these questions, you should be asking yourself these questions today because if you wait too long, ask these questions. It could be way too late to do anything about it. You're listening to wealth and wisdom. I'm Ron Carson with my cohost Paul West, and this is the only place where you can count on straightforward, objective advice about investing for your retirement. New clients ask us these questions all the time in every day and the different news for different clients. Some find out that, you know what, I could've retired years ago and for many they don't have it taken the necessary steps in order to put themselves in that position.
Speaker 3:
2:07
And so you want to not have a surprise. And Paul, I think about some of the clients that come in here that could have, if they don't love what they do and they could have retired long ago while others come in and think you know there are well on track and they don't realize just how much it costs to actually live. And we're going to talk about that today. We're going to address a lot of the questions that we get and we're going to talk about seven strategies that can help you put you in a position to have a great retirement. Yeah, Ron. I mean I think a lot of people, we always forget what's most important to us cause we let it slide down and we just go let everyone else dictate our priority list. And if I think about that is think about your emails. What happens with your emails? What are you doing? You're responding to what everyone else is asking you to do. You're not controlling your own destiny. And this makes me think about all those things going on life. And I think we all have that house project, house projects
Speaker 4:
3:00
that doesn't get done. And I'll give you one, for example, Courtney and I moved into our home what, 13 years ago and it had a completely unfinished basement. What happened? We kept saying, we're going to get to that. We're going to get to that. We're going to get to that. Well, you know what I did in October of 2017 I finally got to it 13 years later. But that's, that's life. Right? And Brian, I think you know my least favorite word in the vocabulary, busy. And you let all these other priorities happen. It's no different than people's financial life. I hate stories like that. Ron, where someone knows they want to retire, they're tired again, the grind they get in their car and just dreading, actually use a phrase with alarm clocks. If people are waking up in their alarm clocks and they got to hit the snooze button more than once. It's a cancer on your enthusiastic. Yeah, absolutely. And so what if you're going in, but you don't have to, but the reality is you don't know, but maybe you do. But once you're there, a piece of mind knowing if you do or your don't, rather than this complete gray world you're operating in of your, in, you're in the sleepy, Donald Trump's, what was that movie with Bill Murray? Groundhog's Day. Yeah. And then you're in that movie at this point when you don't need to be in that movie, get out of it.
Speaker 3:
4:11
Well, and I, and I find people that aren't sure, just keep piling and piling and piling on and then they are miserable and they don't know how to spend money. They don't know how to enjoy themselves. And so we're going to talk, we're going to talk about a lot of these things, but there's some basic basic things that you can do today in one is create a budget and then test drive that budget for six months. And this is something I recommend a lot of people do to say, yeah, I think that would work. Or I think I could live on that amount, but why not two years, three years? Say, you know what, let's just pretend. Here's the amount of resources that my advisor says I'm going to have. Let's take that amount and that's actually live that life for six months and try it on for for comfort.
Speaker 4:
4:56
Yeah. I'd be curious how you feel after that, Ron, when people have gone through this exercise and you know, if they find out they can spend way less than they actually thought they ever could because priorities and things just it's, it's like a vacuum cleaner. It gets sucked up all over the place and you don't know where it all goes, but it actually, if you track it and monitor it and set an objective, and so if you don't want to know what to do, I'll give you, I'll give you a phrase here of probability take 70% or if it's easier, math take 75% so if you're spending $5,000 a month, let's even do, let's do eve, is her math wrong? Let's do 4,000 then. So that's 20% you're spending 80% of f four try that for six months. Does your life really changed that much? Is it for the better as if it might actually not be for the worse. It could definitely
Speaker 3:
5:46
the better then I, you know what, I get this a lot from clients. I liked more money. I have the, there's that saying money doesn't buy happiness, but it makes being miserable a lot more fun. And then I heard one recently, he said money doesn't buy happiness, but it does pay my bills. Uh, but there was a point of diminishing return and the more money, sometimes this has a lot of complications. So you're not going to, I get Maslow's hierarchy of needs that, you know, at the very, very bottom we want to provide for our most basic, basic, basic needs, food, water, shelter, and then its safety and safety is really all about making sure we can provide for all of those food, water, shelter. So this is, this is where the very, very, very first thing that you want to do is you want to have a plan.
Speaker 3:
6:35
What is it? You know, test driving the, the retirement budget for six months gives you an idea because the plan won't tell you exactly where you're going to be, but it's going to give you a pretty good minimum, maximum, best case expected case scenario. Yeah. Well it's definitely the case is going to help you analyze it and it's going to help you feel comfortable around him. And I know a lot of our listeners are in what we call that pre retirement stage and they're trying to figure out, have I saved enough? Should I save more? But then life happens, right? A kid moves back at home with you or a kid needs financial help with their family, with their education. You need a plan just to make sure you're on the right track with all of them. And it doesn't need to be a guessing game.
Speaker 3:
7:19
I think most of us around, we're going to default to take care of our family first. You know, let all of the other needs, including our retirement tends to fall by the wayside because we're not going to let our family struggle or help. But there's maybe a better combination for you to look at. And I think that's what's part of having a financial plan is you can know the impact of those major decisions you make and what the life trade off is to help out and go through that. And I think of, you know, what's an analogy? I think you know around like my analogies here now that you do. Yeah, but I think we have to make the complex simple for people and it's no different. It's springtime here, right? In the Midwest. So what are most people doing? They're doing their spring cleanup, both in the house, their garage, cleaning out their garage, but also in the yard.
Speaker 3:
8:06
They're getting rid of all of those extra leaves that somehow made it way in the backyard through the winter. They're getting rid of the dead grass, they're putting down new molds, they're doing all these things. But everyone who does it, you know, almost writes out their own plan. Here are the things I want to do tiff, my yard looking pristine for the year. But are you doing the same thing with your financial plan? Are you making sure your taxes are planned properly for the year? Do you have that plan in place? You're looking at it and are you making sure it all works well together? So here's, here's maybe one of the most important decisions you're gonna make as it relates to your financial future is being on the same page with your spouse. I'm gonna give you an example. Paul family, friends of ours, um, several children, one of the children gets divorced, doesn't have enough assets.
Speaker 3:
8:54
You need to decide up front. I mean, you have other kids. Are you going to sacrifice your retirement because they didn't plan? Now let's get the tower right. We have our kids, we love our kids, we love our family. And I've seen it go both ways. I've seen, but talk about it ahead of time. It's like with even in the family, it's like, we're going to help you as much as we can, but we're, we've got a core that we need to live on. And you, you know, if, if you guys have difficulties, a lot of that you're going to have to take care of yourself. Yeah. And it is such an important part of conversations life, especially for spouses is, and by the way, Ron Courtney and I've had this same conversation of how much do we fund for our children's education and as we look at college and do I want to pay for state school, do we want to pay for all of private school?
Speaker 3:
9:44
What about okay, graduate degrees and postgraduate degrees. And I think all of us as parents struggle with that. Um, and what's the right amount? The good news is there's no right answer and there's no wrong answer. Here is no, there's a right answer planned for it. Yeah, we'll decide what it is planned for it. Yeah. There's no silver bullet here. It's, it's your, it's your financial situation, but it's also your heart, your feel and what you want to sacrifice. You can be hard nosed and say, Nope, I'm not paying for anything. And they get to learn the same life lessons my mom and dad taught me or vice versus I want to give him everything. And there's pros and cons to each one of those scenarios. But what can share with you is everybody who outlines what those are, they feel much better than those listeners and callers round we've had in the past that they're just doing it based on guests.
Speaker 3:
10:32
They're the ones that don't succeed. It's amazing. You know, when you talk about when people write things down and have their plan or their goal down, how many more of them succeed, and I know we've talked about that on the show all the time. Your likelihood of success when you actually have a written plan in place. Well, yeah, I mean having goal setting those goals, do the six most every night before you go to bed. And one of those can be, you know, checking in on your financial plan, your retirement plan, and have you taken the necessary means in order to set yourself up to have a successful retirement. The gift of struggle for kids, by the way, is, and we've talked about this and I talk about it with my kids all the time and today they come back and said, dad, thanks. I didn't like it at the time, but it's made me, it's made me much, much better, um, in making decisions and a much more responsible than a lot of people that I know.
Speaker 3:
11:19
Yeah, I think you're definitely right there on it was, let me let you make the decision, but let them make their decision too. So maybe you are a good saver, but you still ask them doubts and concerns and you keep asking yourself these questions is, am I going to be okay? And when can I retire and have I saved enough and could I possibly run out of money? One thing's for sure is you do need answers to these questions. Well, before you think about calling it quits. So I'm inviting you to take that first step right now. Let us show you how we can help you make the most out of your money. A five step retirement action plan. We make the complex simple. By focusing on five critical things, it can have the biggest impact on your money and investments, including taxes, asset allocation, income, social security in this big one.
Speaker 3:
12:06
Healthcare in this analysis won't cost you a dime. Give us a call. (888) 419-8513 that's 888400900 85 13 when you call, there's no sales pitch. There's no products to buy. We simply will take your name and your contact information. Eight eight eight four nine 85 13 it's what we call listening session. In a listening session, you sit down and what? Who has a plan that can not withstand a second opinion. You owe it to your family. You owe it to yourself to have a second opinion. How can you make the most out of your money and have it go further and retirement? We're going to continue to reveal what these critical pillars are to your financial plan. I'm Ron Carson with Paul West and you're listening to wealth and wisdom,
Speaker 2:
12:48
the trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth from wisdom with Baron Hall of Fame Advisor, Ron Carson. He's a published author and he's 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, do you ever have doubts or concerns about
Speaker 3:
13:13
saving for retirement or just in general for your future and do you ever find yourself asking yourself these questions? Am I going to be okay? Have I saved enough? Could I run out of money? You're listening too often. Wisdom. I'm Ron Carson with my cohost Paul West, where you can always count on straightforward, objective advice. Today we're talking about the most frequently asked questions and concerns about saving for retirement and this segment we're going to continue to talk about ways that you can protect yourself. The first is having a comprehensive plan, having a plan, and Paul keeping that plan updated. Gone are the days where we've had clients as an example come in. They had a hundred page plan, 99% of it with canned. You want to have something that's interactive that changes with technology today. You can have some great experience. I have a dashboard so you can see exactly where you're at. So there are absolutely no surprises about about what what I have
Speaker 4:
14:11
along with my financial world. Yeah. Let me, let me share a story on that Ron. I mean this is real world here. What we're experiencing in life. So what's been going up over the last 15 months in the financial market? Interest rates, right? So what does interest rate do? They lower the price of bonds. And so what happens is is yields go up and interest rates go up. What's attractive in the marketplace? And one of our portfolio managers, Brett this week had a really astute observation run, which was actually many people invest because of dividends and you go online if you do it yourself or as you go online and you search for who has got the best yield and who's got the best dividends. But now actually the s and p
Speaker 3:
14:53
dividend percentage is just being crossed over by the two year. So was the two year treasury actually more beneficial for you than an s and p dividend and how many of you are actually going to change your portfolio? I'd be willing to wager very few of you because you don't. But here, here's a real world example. Why are people using dividends, income? They want cashflow. They think it's the smart thing. So let's use an example. This just purely illustrative here. So let's take cocacola. I know we talked actually about Charles Koch last week. So let's move to Coca Cola this week. Yeah, no relation. If you haven't listened to last week's show, it's on podcast is tremendous. It shares Ron and I's observations about meeting with Charles. Koch has really good learning for everyone, but coq so coq currently trades approximately, you know, call it 21 times earnings. Um, but that's giving you a dividend yield of 3.6% but if it reverts back to 15 times earnings, you lose 27% or what that correlates into is seven and a half years worth of income.
Speaker 3:
15:55
What's been cokes? Average PE back to 15 so it's training. Yes. So sorry, I didn't want exactly right is you can mentally, and I, and this is one of the things that people struggle with, fall is total the concept of total return. You don't really care, you shouldn't care whether your income is coming from capital gains are coming, come interest dividends. And then the next step is actually capital gains are treated better than dividends and interest. So that we want to look at your portfolio and say, is it maintaining its value and not get so focused on income? There used to be these mutual funds back in the late eighties early nineties paid huge interest rates. They wrote covered calls against uh, bonds in the portfolio and people receive all this, but they, they, the principal declined anywhere from 40, 50, 60% over about a 10 year period. And actually they didn't realize that they were withdrawing principle because these bonds are writing these, these bonds.
Speaker 3:
17:01
They were getting a big premium forum. They were getting called away, right? Because interest rates were declining during that whole time and it devastated the portfolio. So you want to pay attention to what's my balance? If you have $100,000 portfolio at the beginning of the year, you end the year at a hundred thousand and you took 4,000 out. That's beautiful. Right? But if you started 100,000 and you had dividends of 6,000 and your portfolio is worth 90,000 you actually went backwards. 4,000 you didn't. That was phantom income but really wasn't real income that you've got all of the portfolio. I hope our listeners and if you're doing it on your own, that's fine. That's your prerogative and just be smart and calculated. But if one of your core searches right now is you identify stocks or funds based on dividends and dividend yield, you better be careful because of happening in the marketplace
Speaker 4:
17:50
today. Um, and so I look at it is, is it Ron, our listeners today doing on their own are thinking that way. They're going to be done, listen to the show and like, hey, that was a great idea around on Paul gave us, but they're not going to do anything with it. So do something with it. You can call us at (888) 419-8513 we're happy to talk with you about it to make it easier, but this reminds me of here's what's going to happen. I remember ever playing the telephone game when growing up or in school, you tell somebody one thing, then they tell their friend the next, then you go around the room and you have to hear the phrase that the initial person started with. Right. You remember doing this? I do. Okay. Just want to make sure I wasn't cleaning anymore. I just use this example in a meeting yesterday, but I wasn't actually, that's what I was thinking about what's pulling them so it never comes back anywhere close.
Speaker 4:
18:41
And so if you're going to go tell your friend or other about, hey, I heard this on the radio today, are you going to actually be able to explain it? And I bet you're not. I bet. I bet you're not going to be able to explain it in the exact same way. And they're going to go tell their friend. And the sad part about this, Ron, is, is somebody actually going to make a life decision on this? It without consulting us as humans, we look for shortcuts all the time, right? Yeah. Well, because we trust other people. We take meetings with professionals like us. Yes, it is. Well, we take meetings with people like you, me or anybody else on the wealth from wisdom radio network because we already assumed they're competent, but what do we want to do? We want to trust them as a human being and that's why we engage in the meeting, but if you don't engage in a meeting, you're never going to get that trust with someone.
Speaker 4:
19:28
I think. Think about anything you do. Why do people want to figure out the best doctor if they have a health issue, somebody who's competent but also they trust is going to do what's best for them. Another example is, I think about this all the time. One of my least favorite places to go in the world is when that light comes on in my car. Yes, I have to get one car analogy in here for you. Ron is the check engine light. I hate it when that comes on in the car because all I see is dollar signs. I actually don't see anything wrong with a car. All I see is I'm going to go take my car into the service place. They're going to come back and tell me something. I have no idea if they're telling me the truth or not, but there's nothing else I can really do about it cause I don't know enough.
Speaker 4:
20:12
I am not educated enough and many people, that's how you feel about your financial adviser. But it shouldn't be that way. It should be where you trust inherently what they're saying. But they're transparent. They take you back, show you the hood, show you the cost, what's going to take some time. But that doesn't happen all the time and that's why Ron and I use the fiduciary word versus the brokers that are out there. If your advisor's transparent and showing you those no different than if I'm going in to get my car serviced. If they actually took me back around to the garage and showed me exactly what was wrong and why this certain service person they think is to take an hour and a half of time,
Speaker 3:
20:49
I'd feel a lot better than them slide into a piece of paper across to me and saying, that's going to cost you $800 Paul. Yeah. Yeah. Think about that transparency difference. You want it and we're in a society today. I love the Reagan quote, trust but verify. Trust with everybody. Everybody you do visit with Paul. One of the things people struggle with is they've been accumulating their whole life. How do I withdraw money and they don't have no idea what the concept of how do I take it out? What's the mechanism of taking it out and this is something to mentally get your arms around saying, well, what's your ultimate goals? Are you better off having a monthly income or do you want to have so much? You just have in your account and your replenish it. Once a year you look how much you draw up or down.
Speaker 3:
21:28
That's something stylistics each you want to get right because it will influence your behavior and how you feel about how you're allocating your portfolio. Where do the dividends go to? They get reinvested or do they get paid out or they get paid into a separate account? Do you have check writing and account? Do you have a credit card attached to it? These are little things you need to think through because a lot of people are like, well, I'm not even sure how that actually works. Yeah. Monthly, quarterly, semiannual, annually. I mean those are the four traditional ones around that everyone chooses for the retirement paycheck. And laughing while you're telling this, because actually we got a phone call earlier today, Michelle, one of our advisors said to me, she's like, Paul, you'll laugh about this. But somebody came in and said, hey, I need you. This person likes just to call in and they like to take chunks as I call it, a of money out of their account.
Speaker 3:
22:15
That's their paycheck. But it was, they were a bonus based professional, so they were in sales. So they were used to getting large chunks and then you know, balancing the next six, 12 months of their financial life. And he called in and said, well, I'm broke again, so I need to take another chunk of money out. But that's how he was used to getting his paycheck and his life. So we've structured his portfolio that way, that he can get chunks as he needs them for his lifestyle. So getting the mental aspect of of planning as right, taking the test drive six months is great. Also having appropriate amount of risk, what's your risk budget? Getting that right is critical and making everything work. So today Paul people are, I mean, interest rates are still low, they're moving higher. I think there's an enormous amount of money that just gets left setting in money market accounts.
Speaker 3:
23:02
It's earning still to this day almost nothing. And you can put that in a real high quality, short term bond ladder, you know, increase your income dramatically. Or even by short term treasuries right now if you're retired and you're afraid of the market, don't just sit in the bank earning zero, at least get some yield out of that. And this comes back to having an appropriate, what is my risk budget? How much downside risk can I take? Treasuries, um, high quality munies could be and may be a really critical part of protecting the downside in the portfolio. Yeah, no, it definitely is Ron. I mean, and it's like same thing as putting the air in your tires or gas in your car. You got to make the right decisions for that part of time here. But it also is getting the income out of this. Um, Ronald, you gotta remember we are living longer than ever before so we can't make the same assumptions and you gotta have a plan put together.
Speaker 3:
23:55
You and I can tell stories all day long about people who didn't plan well enough and what do they do? They, they are at a point, and I just had one the other day, Ron, it was a family that, you know, had enough money to live off of, just call it a couple of million and they just keep taking money out and keep in touch, taking money out. And so what conversation to has to happen between an advisor and them? You're not going to make it. No, no. How was that feeling? That's no fun. I have it soon. And one of those really Paul's around Social Security, conventional wisdom tells people again, a mistake. They should delay taking the social security to maximize the benefits. But that strategy could cost you an absolute fortune and there's a lot more than to claim social security than anybody thinks the best outcome to the worst outcome.
Speaker 3:
24:41
The gap is huge and ultimately could cost you thousands of dollars and possibly more. We have a five point customized social security analysis and we go through things like when to take it to get the most out. Who should coordinate with your husband and wife and when and who should take what amount? A discussion around the impact medicare premiums. Also minimizing the taxes on social security and a lot of people come in, they don't realize they qualify for benefits. They never applied for a five point analysis at eight eight eight four nine 85 13 give us a call. (888) 419-8513 I'm Ron Carson was Paul West and you're listening to Wolfden wisdom.
Speaker 2:
25:21
He seemed good times and bad times and he's got the gray hair to prove it. You're listening to wealth from wisdom with Barron's hall, the same advisor, Ron Carson, he's a published author and he's 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. You're saving and investing for retirement.
Speaker 3:
25:45
Maybe you're trying to achieve a certain number, but you're still in the back of your mind are saying, is that enough? Have I saved enough? Is it going to last? Is there any chance I could run out of money in retirement? What's a probability of it lasting? You're listening to wealth and wisdom. I'm Ron Carson with my cohost Paul West and this is the only show where you can always count on straightforward, objective, transparent advice today or talking about a lot of the questions, a lot of the hurdles, both behavior and actually technical hurdles that people have in dealing with retirement and Paul. This next one is having a strategy for health care and longterm care and this is one. If you wait too long, you definitely can put yourself in a position. By the way, my stance on this, get this out there. My stance on insurance is because I've heard people say, Ron gushy you, you hate insurance.
Speaker 3:
26:34
I don't hate it. I hate it when it's a solution for everything. Insurance as a way to transfer risk to somebody else or risks that you cannot afford to bear on your own for something you can afford known as a premium. And I carry, you know, life insurance. I have a large umbrella liability policy, um, on things that I just don't want to take the risk even if I could afford it, if something were to happen to it. I have fire insurance on my house and also I have health insurance and longterm care insurance because these are the areas that are absolutely devastating if you don't have
Speaker 4:
27:12
coverage. Yeah. And, and if you don't run, I'm just going to tell your listeners today, make sure you have $275,000 in your bank account. Why to 75 because that's the average you should expect to spend on healthcare during your retirement. So if you don't have a plan to mitigate that risk, then you're in trouble. And so the best way to do that is through insurance. And I couldn't agree with you more, but I do get frustrated on insurance because it does provide such a benefit and value people, but it's gotta be used the right way. If you, if you're meeting with someone who's pushing an insurance product to you day one and doesn't know you, again, broker not putting your interest first. There's many companies out here like Northwestern mutual and others that have been pushing that way from day one and there's others though that use it in the right way.
Speaker 4:
28:02
So just figure out is it the right solution for you. I can't imagine us as an advisor saying to someone, Oh, you should only have insurance for every cash accumulation vehicle, your investment you vehicle. I can't imagine saying to people, annuities are the only way to go. It does. It doesn't make sense to me, Ron, it's but can shoot to a hammer. Everything looks great, but then you need to ask yourself if it, in that scenario, how much does this cost me? What are the limitations? Can I get out of this? And more partly what's the tax consequences, especially if I want to get out of this because none of us like paying taxes and you create a scenario for yourself you don't want, but let's go back to healthcare. So healthcare is, we don't think it's going down right. And the, and the cost of healthcare, that's for sure.
Speaker 4:
28:52
And it's actually, I'm really sad sometimes thinking about this wrong, the state of our society is when someone gets sick now and they may be need help. They get worried about the cost of healthcare. So should they go to an urgent care and no, no one wants to call an ambulance because they know that's immediately $1,000, you know, cost to them that they're going to have to bear. Um, I liked some of the new technologies coming out of this new Teladoc type services. The Teledyne, yeah. Have you used it? But I have, yeah, it's simple. I love that we're advancing that way, but we shouldn't have to live in a world where people are debating where should I go to the doctor or not because this is going to cost me too much because what price do you put on your life and your family and those things go with it. And I say the same thing as what price do you put on your retirement? Then if you don't structure healthcare insurance
Speaker 3:
29:42
or longterm care appropriately where many of the things you want to do go away because of you don't have that $275,000 CD and around. So me share a story with you. So we just brought on a new office in Sioux Falls, South Dakota, um, Kevin neighbors up there as our, as our partner and his CFA, one of his portfolio managers. Um, he was telling me when I was up there a few weeks ago that he actually sells longterm care for the organization. He goes and he's just so passionate about it. And I go, well, there's a story there. And he goes, where is his? Um, his grandparents evidently had no coverage and he saw the enormous strain that it put on his parents, right? So when you actually get to experience something that happened, it makes you that much more, um, convicted and whether or not people should have it.
Speaker 3:
30:36
So longterm care is expensive. Um, health insurance is expensive and it's less. It's not so not cheap, but it's less you give you the certainty of Peyton, a certain amount of money to transfer that risk away is a way to, to ensure that that's not going to be the thing that runs you out of money. I know you're a contributor to Forbes. Ron, and I was reading this recently that seven out of 10 people, seven out of 10 of you who are age 65 or greater will require some form of long term care. Seven out of 10. And I don't know about you, but that's, that's greater than 50%. And my math calculation on that, Ron. So that tells me a lot on how people need to plan for scenarios like that. Let's also talk about taxes. Paul, we've covered this before, but it's one of those areas that it's not nearly enough.
Speaker 3:
31:28
Time goes into planning for taxes and how much, how much you're going to have to pay. And we, and we always talk about these categories. The tax always attacks tax later, the tax rarely, and then having to take money out. Sometimes when you don't want to take money out, you have to take your required minimum distribution at the absolute wrong time. And that can create a higher tax rate, which puts stress on the portfolio, which can contribute to actually not having enough. We're running out of money in retirement. Yeah. So Ron, what does that all of that mean often for people. So let's think about it. You've got your 401k or you've rolled it over into an IRA because you're retiring, but age 70 and a half, not here yet for your RMD. So it may be best for you actually to take a distribution earlier because you're in a way lower tax bracket and we see this all the time, right?
Speaker 3:
32:19
I mean it's a family come in, they're retiring, they're so happy working, you know, 35 years plus of their life and but almost all of their money is in their IRA so it makes sense in an age 70 and a half, their tax bill is going to go up significantly, which then guess what now their tax on social security, now they had a higher medicare premium. It just created that domino effect. But what we showed them was is let's take some of that out earlier, keep your tax rate lower, but also if you need the money, we put in an a downside protection investment approach, which made them feel good because what they didn't want is, oh, let's pull out the s for example here $100,000 they didn't want, if they needed that money and the markets that you know near historic all time highs right now, if that 100,000 was worth 75 and they needed it, they love that it's still invested in the market could grow, but they're not.
Speaker 3:
33:15
When they need the money, the most going to be pulling out 80% of the value. And that goes a long way. And it helped them from taxes cause they paid way less. So I love your text always tax later or tax. Rarely. Here's another example where I had a client who came in and they became a client. They had all these medical expenses. They were going to have to start taking money out of their retirement accounts. Why not lump sum? Because they had more than the 2% that we're going to have a lot that they were going to be able to write off, offset that against the distribution and that year. So you'll be aggressive. Take those opportunities. Um, and as far as the IRS goes, I mean, you're entitled to take every deduction. That's illegal. I mean, you don't, you're not required to pay taxes just because you're a good guy.
Speaker 3:
34:02
You know, we're over $1 billion a year is needlessly paid in taxes because somebody is not paying attention or there's not enough planning this big that's gone on in the past. Yeah. And I know many people do it on their own. Ron and use many of the tax softwares and the technologies that are out there and that's fine. That may help the majority of your people and just remember though, what are you doing? Data entry, what are you doing? Your recording information. Here's the past, the past, what's you're not doing is thinking about, Oh I am 65 years old. I got this major tax bill coming in five and a half years. Your tax calculators not thinking of that. Who is a tax p word planner is helping you think through that, so be careful when you use those technologies because they're not going to identify those planning opportunities.
Speaker 3:
34:53
This brings right into Iras. A 401ks. I mean for a lot of people that's the largest asset they have and you're not going to like what we continue to tell you, but requirement minimum distributions could force you to withdraw money out of these plans. Whether or not the market is up or down, whether or not you really want to take the money or not, or even need it for that matter and could trigger a lot of taxes if you're not using some of these strategies we've talked about, but it doesn't have to be this way. There are lots of little strategies that you can use to maximize your deduction to get these assets out and offset them against other tax deductible dollars. The one phone call that could help you save thousands of dollars in your retirement accounts is (888) 419-8513 that's eight eight eight four nine 85 13 if you don't make the call you software the pain and consequences. Eight eight eight four nine 85 13 I'm Ron Carson with Paul West and you're listening to wealth. Wisdom.
Speaker 2:
35:52
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. Is it possible you could pay fewer taxes in retirement and keep this money for yourself? You could learn right here and right now, unwelcome wisdom with baron, tall of boom advisor, Ron Carson,
Speaker 3:
36:13
can I retire? How much can I afford to spend every single month? And I've have I saved enough money while I run out of money. And this is the questions that we ask ourselves all the time. You ask your advisor, you should know the answer. Plan for the worst. Hope for the best. Welcome back. I'm Ron Carson off my cohost, Paul West. And you are listening to wealth and wisdom today we're addressing the most frequently asked questions and concerns about am I going to have enough and I'm I going to run out of money. And it's a core of a Paul. That's why all of his work, you know, we have this insecurity about what f, you know, I suffer from a scarcity just by the way I grew up, grew up on a farm, had some parents and had some really rough times and a, and I get where people come from. It's what drives me being so conservative even to this day.
Speaker 4:
37:01
Yeah. So I, I've, I've a wager in my mind here. I'm a so I'm gonna ask you a question. I'm curious the answer. Okay. All right. You ready for this yet? So I'm sure you've been in a situation where you've gotten your car and the gas light was on. How willing were you to push it and did you actually push it far enough where you ran out of gas? And so you're stranded on the side of the,
Speaker 3:
37:22
I bet you you're going to not guess the correct. Well, here I'll tell you, I'm going to guess that has not happened to you. Oh my gosh, Paul. I Bet I've run out of gas 20 times in my life. Right? I don't know you well enough. Here's why though. Here's why is I'm a maximizer, right? Well, that part I thought about yesterday is a great example as out west, I was, I'll say my grandson Carson and my gauge said seven miles to empty. So I'm right next to a gas station. But I'm thinking, well, I got to go back to the office all full up by Hivee by the office. And as I pulled in, I have zero on. Perfect. Right. Perfect. Yeah, and I have not run out it just so our listeners know and not a complete idiot. I haven't run out in years, but when I was first starting in this business, I was always late for appointments.
Speaker 3:
38:13
I mean I was, when I started this business out of my college dorm room, I put on 56,000 miles my first year. One year, one year. Wow. Lost my license for speeding tickets to 16 points, Nebraska out 12 so you can run up a lot more if you do in a hurry. And I actually got great. That's a great, well maybe the only guy in Nebraska, they got a ticket the same day from the same two two tickets from the same a highway patrolman. Yeah, you're right. You're, you're on their wall of fame then. I know, but I ran out of gas because I was, I was always pushing it. But you're right. You would think based on that, I'd be so conservative. So I struggle with, I'm ultra conservative in some areas, but when it comes to maximizing my time and you're right, listen and go, well that doesn't maximize.
Speaker 3:
38:58
It creates all kinds of, it did. So I got better and smarter about it, but I still enjoy the, and I have not, like I said, I'm not run out and 20 plus years, well Kramer from a famous Seinfeld episode as well known for this and how far can you make it and actually the endorphins, you again, you do. How close is all genie could tell you all kinds of stories. I drove her crazy about doing that. Like 30 miles were coming back from Iowa city a couple of years ago. I had some leg surgery there and I'm laying in the back. I can't really move and she goes, I want to pull over for gas. Well, what's it say? [inaudible] 30 I said, you can go to the next accident. Well, it turns out it was further than we thought and we're driving about 10 miles on zero. I'm in the back would have been absolutely no help to her.
Speaker 3:
39:40
Hey, let's talk about inflation. Paul, this is one of those that is like high blood pressure. It's a silent killer. If you're not careful and it sneaks up on you and it, you'll people, they, they, um, really underestimate how devastating even a small inflation rate can be over a long period of time. And that's why you want to pay attention to what purchasing power actually isn't. Get this, in 1930, the average cost of a pound of hamburger was 12 cents. 2013. It's $4 and 68 cents. That's what I would call inflation. Yeah. I tell you, every time I go to the grocery store, I can't believe what a gallon of milk costs, what a dozen eggs costs, but it shouldn't surprise me is because it just, it is kind of rise over time and it's going to take, I'll bet you paid more for your last car of that you did your first house.
Speaker 3:
40:29
Uh, not quite. I did. I did. Yeah. Um, I probably had a cheaper house in you, so I'm pretty cheap house. I had a very cheap first car. I had a very, at a very cheap, cheap house. Um, the dollars lost 21% of its purchasing power in the last decade. Wow. I mean just that's just 10 years. It's had a 21% decline and these fixed income, you know, and so you've had people that don't want to take much. I quote unquote risk and we could do a whole show on risk. But what is truly risk? Cause I don't want to be risky. They give themselves a certainty or running out of money because things are going up and they're earning next to zero, uh, on cash today. Yeah, well I think about, I've been fortunate to travel overseas a couple of times and one of my favorite places I've ever been around is Ireland. And we went many years ago, actually Courtney studied their first semester. It was fun to go back and see all the places she went. But it was also thinking about things denominated in other dollars is your cost of your trip one year, the next could be a 20% difference. So
Speaker 4:
41:34
even though same flight cost of say it costs you $500 round trip to fly over there because of exchange rates and people can see that people understand it, but I don't think it changes people's trips. What people don't see is inflation. It just, it happens. It comes up and bites you. And that's why we like to call it the silent killer because especially in retirement, and this is one of the problems with some annuities, not all, but some of them have the same fixed dollar amount for the rest of your life. So again, if you're getting $2,000 a month, but you live 20 years later, what's that? $2,000 a month going to buy you? Not much. Not as much, that's for sure. You're going to get less eggs, less milk or whatever you're buying at that, right.
Speaker 3:
42:16
Less, less everything. Yeah. Right. Inflation is real. And it, it just thinking about the retired person experiences more inflation than the, you know, the cost of living increase you get because healthcare is such a big, you know, it goes up so fast, so much faster than just general inflation that it really has a devastating impact. Yeah. Hey, before we get into, I was just a shout out to bill moves. I had an opportunity yesterday go down and have a meeting. I just had not had a chance to actually meet him. And this is where, who's Bill Moose? Bill Moose. Athletic director from Nebraska. So I just threw the whole world, listen to the show would know what a what a what a neat guy. I mean what uh, uh, you know, a lot of parallels alleys that was an entrepreneur. I was an auctioneer when I was in school.
Speaker 3:
43:07
I guess I was impressed by the time we took the get to know me, but his leadership, um, is going to be so appreciated here at husker nation and, and a great hope for the future. I can't wait. I mean, I know and I'm not expecting it. And he says, you know, we're not going to turn things around on a dime. I don't think anybody in husker nation expects that. But hope for the future provides power in the present, right. Hope to the future provides power in the present and the power to say, Hey, we've got lead. It's all about leadership and whether it's your financial advisor providing leadership, the partners that they partner, providing leadership, your athletic director, your football coach. It all starts with leadership and not a lot. Great. Not a lot of good things can happen without strong leadership.
Speaker 4:
43:50
Well, I love what you're sharing during the break though, Ron, was how much he planned for the meeting. Yeah. So his first time to ever meet you and you two had a chance to just chat and how much he knew about you. And I think about if you're going to come in and meet with an advisor and go through your personalized game plan first is going to be confidential. Second, it's going to be private. Third, we're not going to share data anywhere. We're going to be conscious of that. But fourth, most importantly, people prepare. And advisors that prepare. They're not going through the same spiel. They're going through the one that's right for you and your family. That's what a personalized game
Speaker 3:
44:22
planets. That's a great planning, a moment of planning as worth days, weeks, maybe months of actually doing something and for today there's one takeaway. One thing you need to remember, it's that it's planning. You need to plan for your future, as my dad would say, Ronnie, today's the first day of the rest of your life. Make the most of it. Vow to do it now. Don't put it off. Come in for listening session. Get a second opinion on what you're doing. I've never seen a plan that could withstand a second opinion. Even if you take it back to whoever you're working with to implement that. If we add value, we'll be happy. There's no sales pitch, there's no product for sale. When you call, we'll simply set up a time to have this listening session. Eight eight (841) 900-8513 that's eight eight eight four nine 85 13 I'm Ron Carson with Paul West. And you're listening to wealth and wisdom
Speaker 2:
45:15
risks, social security, income taxes, estate planning. Every week we talk about how to make your money go further in retirement right here on wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson.
Speaker 1:
45:29
Oh, okay. Can here's the legal Mumbo jumbo, the opinions voiced and wealth and 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 mean not be invested into directly investing involves risk, including possible loss of principle. No strategy is sure success or protects from loss. Past performance is no guarantee of future results. Advisory services offered through CW m L L C an SEC registered investment advisor.
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