Wealth from Wisdom

7 Mistakes Made in Retirement

March 10, 2018
Wealth from Wisdom
7 Mistakes Made in Retirement
Chapters
Wealth from Wisdom
7 Mistakes Made in Retirement
Mar 10, 2018
Carson Wealth
Show Notes Transcript

As you get closer and closer to retirement, you will be bombarded with thousands of decisions. In this episode, Ron and Brook cover the 7 mistakes most people make in retirement, and how to avoid them.

Speaker 1:
0:00
Okay. And here's the legal Mumbo jumbo. The opinions voiced and wealth from wisdom with Rod Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. 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.
Speaker 2:
0:31
It hit another all time. Records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 250 the skyrocketing cost of healthcare and retirement could now run 350,000 for retirement. Today is a whole new ball game. It's loaded with challenges, obstacles, the 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. As you plan for retirement, you'll be faced with endless number of decisions. Yep. You think they're never going to, and
Speaker 3:
1:16
decisions about risk, income, taxes, and then there's more what I do with social security. How do I protect against inflation, my estate planning? Is it current? Does it need to be updated? And then there's even decisions about how do I take my money out? I've got required, required minimum distributions. They've got to worry about healthcare. I got to worry about longterm care. And really the list goes on and on and it can seem overwhelming. Um, it, there's just a lot going on and you need someone to help you or you really need to pay attention to it and take the time to make the right decisions to suffice. Suffice to say, there's just a lot more to it now than ever before. And if you make a wrong turn along the way, it is going to make a big difference. Matter of fact, I like to tell clients that's a little things done exactly right, that ensure that you're going to have enjoyable.
Speaker 3:
2:11
I hate to the term retirement, really a secure financial future because I feel like I did that early on in my life. It's the moment that you get to do the things you love to do versus a things you have to do. You're listening to wealth and wisdom. I'm Ron Carson and thanks for joining us and I have a special cohost today, Brooke Thomson, one of our financial advisers here at the Carson Group. If you're the kind of person who needs to make the most out of every single dollar you save for retirement, the last thing you need at this stage of the game is a major financial setback because you may never see that money again and you sure don't have time to make it back again. And we see a ton of mistakes and we're going to talk today about seven grave mistakes that you may not see.
Speaker 3:
2:57
Common Huddle, avoid them. An ounce of prevention is worth a pound of cure book. That's what my mother always said growing up and I think, you know, just just doing some planning on the front end is so critical here. Yup, absolutely. Run. What are some of the biggest mistakes that you're seeing happening right now? Well, one is I'll get to it when I get to it. Meaning that I'm just gonna do what I'm doing and then all of a sudden I'm going to, and we, and I've seen this over my career, someone just shows up and says, well I retired and I want to do a rollover and you know, and I'm like, wait a minute, we've never even worked together. Do you have a plan as someone worked through all the issues, can you afford to retire? What's your standard of living? And they're like, oh, I thought I'd work.
Speaker 3:
3:40
I always knew it was going to, I've drove by dodge street all these years. I knew something bad was going to work with you. And they just come in and they already dis like, wait a minute, can you get your job back if we get three when we go through all this analysis and realize it, you're not going to be able to live the kind of life you want to be able to live. And that is a big one. I don't care what your age is, even if you're young, even if you're maybe in your upper thirties, early forties, I mean, having you, it doesn't take a ton of time to have some good basic decisions. I was going through this with my daughter Maddie today. She actually owns Carson's cookie fix. Um, and by the way, and I know I'm bias, they are the best cookies in the world.
Speaker 3:
4:21
Um, the by though you may not know this, I'm going to put a plug in for Matty here. She ships thousands of dozens all over the country. They have their location in Miracle Hill, but I mean, corporations all over the country use them for birthday gifts and all that. So anyways, shut up. We love the women now in businesses around here. We do. She's a millennial and I think that's how many cool things about her story. So today she's plying for line of credit. She's expanding her business. And to her credit, she's, and my kids, you know, I said, hey, come in. You need to pick a financial advisor. Don't want it to be your dad can sit there and work through this process and she's in her twenties, you know, Maddie is 27 years of age and she's like, Dad, do I need an estate plan yet?
Speaker 3:
5:07
Absolutely. You've got assets, you have a business. Um, and she's like, well, should I borrow the money or should I pay cash? I said, well, what did Teresa say? This is her financial adviser, right? There's all kinds of questions. And even at that age that you should start directionally making good decisions. And there are some things, everybody should have a will everybody, there's no, there's no reason not to have a well either having a state problem or you have an estate problem, right? That's right. And you don't want someone else deciding who should receive the assets. So this is, this is the one that we talk about it, we harp on it, but those clients that I have seen that have absolutely done the best in their life are those that listen to advice diff. They're part of developing the plan. And of course that plan adjust because things change. Life happens. There are variables that you didn't count on. Some are positive, some are negative, but then having, being able to plug and change as we go and they say everyday that goes by, that's bad rut bedrock that's permanent. It's not going to change, but then it will maybe make force us to make a different decision for the future. Okay.
Speaker 4:
6:22
You made a really interesting point too when you were talking about your daughter and having her work with somebody else, not you is her advisor and I think that uh, is with everything that you just said about having a good plan, it comes down to having the conversations, right? It's being willing to talk about it and some of those family conversations are tough to have and sometimes your family members plans actually impact your plans and you don't know about it because you're too scared to have the conversation. We see that a lot here at Carson wealth where we actually help generations of families to talk about how one generation's estate plan is going to impact the next generation's plan for their future.
Speaker 3:
7:03
You bring up a good point that I didn't really even think about, and that was the other day I was having this conversation about she has money in the bank. She's got about $65,000 she wants to expand and buy some additional equipment because of demand around the country shipping these cookies. And she goes, Dad, I just want to, you know, I really don't want to spend my cash so I want to borrow it and I go, Maddie, this really doesn't make sense to be getting basically zero to bank and then paying the bank the call of 5% and that's where, and I counsel my clients all the time, if you don't have to do what's in the dollars and cents vested interests, do what's emotionally make sense to you and she goes down, I just feel a lot better having that cash and just being a dad.
Speaker 3:
7:48
It's like, wait a minute, these are the dollars and cents reasons why, and that's why let them have their own decisions. One of the greatest gifts I think you can give to a child as a gift, a struggle. Let them figure this out. Be there when they really need you, but let them figure a lot of it out along the way. And I'll make one more comment. We'll move on from this. I was so proud of few months ago, they lost all the energy, electricity to their building and she had it, all of our product go bad. And so I said, what are you doing? She goes, well, first of all, I've looked at my insurance, who was covered? I pulled up my Lisa Ceo's responsible. I mean, these are things you just can't teach right in the end. And she ended up, um, having all of her losses reimbursed by insurance, but it's like you just, that's an a life experience as a business owner, as an entrepreneur, that is so valuable.
Speaker 4:
8:36
It's a huge lesson to learn. And we see that all the time where parents, you know, they want to put their kids first, they want to take care of them, they want to solve all of their problems for them so they don't have to struggle. But having that struggle is so good for anybody, whether you're a business owner or not, so that you have a handle and you have control over your own personal finances. Plus tell people, putting your kids first financially is actually pretty selfish because then what you're ultimately doing is just expecting them to take care of you. When you get older. Maybe you didn't do a great job of saving. Right.
Speaker 3:
9:05
And Brooke, I want to, I want to, um, we're going to move on here to the next item, but for something we trademark, uh, here at the Carson grew up in Carson wealth. Uh, sometimes you're assigned by Carson Group, by the way, you know, we have, we're three companies here. Carswell's our retail Carson Group partners. We have financial advisors that we do their investing for all over the country. And then we have a coaching consulting group for financial advisors. So that all falls under the Carson grip. So your herb Brooks say Carson Wealth here me say Carson Group. Um, but the vore the value of the relationship and we'll, we'll be rolling out new software for our clients are going to be able to see a timeline of all the key decisions that were made over their life. And I think this is helpful to have confidence in the advice that was given in the past and what that meant to you and then decisions you can make in the future.
Speaker 3:
9:49
And that is really the key to having what we call planning alpha, where you can literally see the financial gain from financial planning decisions that were made as a result of the comprehensive financial plan that we're putting together. Number two on the list is ignoring asset allocation. People in unintentionally either are way too conservative and they have the certainty of not Minoa to live the life they want or they're way too aggressive and people miss specialty strategies. I mean, there's, I think people feel like I gotta be in the market. There are so many great things now, don't be confused with things that are, you know, fully loaded with lots of hidden fees, backdoor payments when I am talking about real good advisory products that really don't care about what the market does and those are dramatically under utilized, but just also not paying attention to what your risk budget is, can create you doing the wrong thing at the wrong time because of market volatility.
Speaker 4:
10:50
There are people who probably have heard that term, that risk budget term and you know, that's really how much risk can you afford to take and not lose sleep at night. Right? Exactly. Yes. And we see so many people when we're doing our free reviews of their portfolio, uh, when they call in or they come in from hearing us here on the show and we're doing a free portfolio review and they're just, they have this old school asset allocation of 60, 40,
Speaker 3:
11:17
60, 40. We're going to talk more about that too, Brooke and our next segment. But I want to really hit on the fact that retirement is a big deal. You've got a great start, but now what do you do? What do you do with the money? Remember, we've already talked about too that are really critical things that really matter and we want to make sure that you're getting the most out of your retirement. For example, we're going to talk a little bit later about social security benefits. It's one of the pillars also, how do you turn your investments into an income workhouse in retirement today? There are really great ways that you can earn a lot higher income than you realize and and in one example, you don't have to tie it up for more than a year, and I think that's really misunderstood. We have this five step retirement master plan.
Speaker 3:
12:05
We make the complex simple. You're going to get it. There are five strategies that will help you make the most out of every dollar throughout retirement. Give us a call to schedule this analysis right now. (888) 419-8513 that's eight eight eight four nine 85 13 what you learn in the simple analysis could literally save you thousands of dollars in retirement and possibly more eight eight eight four nine 85 13 that's 888400900 85 13 coming up in our next segment where we'll talk about that 60 40 split broken. Also, we're going to continue to go through the grave mistakes that we see people making in the retirement. I'm Ron Carson with Brooke Thompson and you're listening to wealth and wisdom, trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth from wisdom with baron tall. If fame advisor, Ron Carson, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more.
Speaker 3:
13:07
Now back to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. There are absolutely no second chances when it comes to retirement or making decisions later in life. As a way I'd like to refer to it as so you have to get it right the first time and there are no mulligans for you golfers out there. If you make one simple mistake, you overlook one minor detail, it could cost you a small fortune, it could be the dearest [inaudible] a worry free retirement, and you're really having to pay attention to all the expenditures you have. Welcome back, you're listening to wealth from wisdom. I'm Ron cars off my cohost Brooke Thompson today. Could you be on the verge of making a big financial mistake that could cost you a small fortune in retirement? It you may be, we've already talked about the critical importance of having a comprehensive financial game plan. Also ignoring asset allocation, being too conservative to aggressive or just not using specialty strategies out there that really have nothing to do with whether the market goes up or goes down the is get a much better income. And Brooke, you were talking about an asset allocation of the old 60 40 for a lot of our listeners who may not know what that even means.
Speaker 4:
14:15
So when I first got in the business, it was pretty standard. You know, if you're getting close to retirement, we're going to have you and 60% stocks, 40% bonds, and then why not throw in some annuities for good measure. I had to create that pension or that paycheck. And you know what I would say is if you're in your car listening right now, how many of you are still using a map to get around town? Probably not a whole lot of us. Right? Everybody? Yeah. I don't know. I hope not actually. I'm distraction generation can even read a map. I doubt it. Yeah. Yeah. So everybody's using their gps and you know, if you think about it, not even 10 years ago, we didn't have gps in our cars. Now we, that's what we're used to. That's the new way of doing things. You're not using a fax machine to communicate anymore.
Speaker 4:
14:56
You're using your instant messaging. And, and the fact is is that technology is not the only thing that's improved. Um, you know, our, our investments in the way that we allocate our money has also improved over the last 10 years, even over the last five years, four years. And so if you haven't looked at your plan or if you feel like you're in that the whole 60, 40, and I've got some annuities in there and I don't know if I'm paying too much or if this is the right thing for me, it's probably time to look at it and see if there's something better, cheaper, less expensive with better benefits out there for you.
Speaker 3:
15:25
You bring up an excellent point, Brooke. Really a lot of these strategies have been around forever, but they haven't been available to people of modest means. But because costs have come down dramatically, technology's improved, you can do things that only the very wealthy could do. You could only, you know, some of the strategies when I first got in the business, like irreplaceable capital, we actually hedge the downside. You may have to have $10 million to invest today. You can do that for $5,000 where I think $10,000. So, you know, that's, and I think people get stuck with what they've had available their whole life and they don't realize there's a whole other frontier of new things that, that are now available to them. But I've got to ask a question to Andrew. Um, do you know, can you read them out pretty well? You can. Okay. He's smiling down. Can most your friends read a map? No. No. Alright. So there you go. We got, we got that right. Number three, you don't have a tax efficient investment strategy. If you optimize the, the way that your assets and your harvest gains going forward. There's lots of studies out there. It can make up to 2% a year improvement in your net returns that you get to keep. And if you're paying a financial advisor feed, I can more than cover costs and an advisor fee just by optimizing has a tax efficient investment strategy.
Speaker 4:
16:43
Absolutely. And we love our accountant friends here in Omaha. Um, but the, the feedback that we get some hints from our advisors, is it the not getting this advice from their CPA, right. You really need to talk to work with a team, work with a trusted team that would include your CPA, um, include your trusted financial advisor so that you can find all of these different tax savings with your investments.
Speaker 3:
17:04
Well, and a big question I would have for your financial advisors, what kind of software do you use? You know, today we actually here at Carswell of course group do it manually. We'll be plugging into brand new, um, system that will optimize this to make it even better than what it was in the past. So we can move completely away from the manual side of it. But that alone, especially in a lower return environment that we're in today, that is significant amount of additional return that you're able to get. Number four on the list is having a strategy to withdraw money from your IRA 401k. And when you combine this with sequencing of tax, you know, some assets have already had the taxes paid on it, other assets, you're going to have to start taking it at a certain time. You may have a pension that's going to turn on a certain time. So really having the order of which you're going to, especially on the assets that you can control, can make a huge difference in what your effective tax rate and don't, by the way, adopt the philosophy or it's all going to be about the same in the long run. It's not, I mean, by sequencing it, you can make a 10 15 point difference in your effective tax rate.
Speaker 4:
18:11
Even if you're already in retirement, you can make changes to what you're paying and your taxes right now, and if you think you pay, you hate paying taxes during your working years, just wait until you're retired and you have to pay taxes.
Speaker 3:
18:22
Yeah, absolutely. Yeah, absolutely. I would do, I do want to touch on something here and it's really not one of the seven mistakes, but I want to touch on it because it happens and that is yours. We're talking about right before we went on the air here, clients that are afraid to take even what their portfolio will support. Right. And I've seen that. I had a client who lived in Blair, Nebraska when he passed away. He was in his eighties he had several million dollars, but he lived on his social security. He had no relationship with his kids and soon as he passed, they blew through the money like you can't believe. And I think, Gosh, here he did, he sacrificed not really for his kids because he was afraid of running out of money. And so that's where doing some modeling to say what is your absolute worst case scenario?
Speaker 3:
19:15
And we tried to do that. So sometimes you can't eat. I guess it also depends on how they grew up. Did they live? He lived through the depression. My grandmother lived through the depression, so they're permanently scarred and just can't make themselves spend any money. And then we have the opposite end of the spectrum where people are overstressing their portfolio so they're taking too much out. And I see these rules of thumb, you can take x percent do not fall into that trap because it really has to do with what you're invested in and what your risk appetite is. Okay.
Speaker 4:
19:47
It's your personalized game plan that's going to dictate that. It's kind of funny. My aunt retired not too long ago and um, she was joking that, you know, every day is Saturday for her. You know, when you're working, you only, you know, you got, you spend the most money on Saturday when you go run all your errands and do all your shopping and for her, do you spend the most money on Saturday? I have ideal. Yeah. I probably, or you know on Amazon if I've had a couple glasses of wine at night glamazon stage right on Amazon almost every day. Yup. I just bought dog food a little bit ago. Now they just need to have to figure out how we can hide those boxes right in the front door. To me it's like Christmas. I love
Speaker 3:
20:22
Amazon. Oh No. Yeah. So, um, here's the other myth that I seen retirement or you're going to only spend 80%. That's not true. Depends when you were tired and what you're planning on doing. I see clients spend more than they earned and they fully know, hey, I'm going to overspend my portfolio for the first 10 years and then I'm not going to, I'm going to be a certain age. I'm not going to do all these things. That's, we call that as you plan for it. Right. And for it, we call it the Gogo this logo in the note. Yeah. I like it. That is, that is well said. Also, number five, just taking the social security face value. Now, Paul and I hit on this every show and we continue to see people making big mistakes here. The, uh, the social security office is probably going to give you the wrong scenario.
Speaker 3:
21:11
I can even give you the right, you know, and not 4% of the time they gave an example where they, they gave the wrong advice or told someone they couldn't do what they could do. You need to have an advocate that can back it up with a software program that shows exactly the options that if they tell you you can't do it, then you asked her if someone else to wait on you. Yep. Absolutely. Yeah. Social Security is an absolute biggie. That's, that's like the one guarantee most of the time that we have in retirement and so we want to make sure that we get that one right. For sure. And for most people it may in fact be the single, they don't think of it as an asset, but when you look at the income stream that you're entitled to, it is a major asset.
Speaker 3:
21:52
It is absolutely probably the biggest asset that you're going to have. And the Delta between the best and the worst case is like $300,000 so it's a, it's a big deal. Getting social security right. And I used to think to, again, this is where I make lots of mistakes in my career is my wealthy clients really wouldn't care whether they, they maximize social security and I realize they care just as much. I've got this, by Golly I paid into it. I'm going to get every bit that I can out of social security. It's the difference that it can make between how you file and when you file is staggering. Just solid. Last week. That was $150,000 of difference. That's a true asset. 150,000. I had one, it was close to $300,000 difference between the best case and the worst case. So real, real, real dollars here, number s number seven.
Speaker 3:
22:47
Um, somehow I missed six along the way, not having a bullet proof. It's like where did I miss them for sex? There we go. Yes. So income, um, so we have a rising interest rate environment today a rates are probably going to go up even further. So people have I think, um, uh, misplaced belief that I just shouldn't buy bonds. No, you shouldn't buy long dated bonds with rates going up, but you can do what's known as a bond ladder and you can actually even look at the sensitivity to interest rates going up. Sand even if they go up this ladder will actually perform better. You can do a Muni ladder. If you're in a high tax bracket, you can do a corporate ladder. But if you have money sitting in a bank, there is no reason why you should be sitting in cash. Cause you can do a really conservative bond ladder and then it gives you plenty of dry powder to either position back into the market in the event of a decline or as interest rates go up you can continue to roll that ladder over. Yeah, absolutely.
Speaker 4:
23:47
And as you mentioned, there's other, you know, non correlated things that you can, um, that you can purchase that in terms of investments, it'll give you some income, you know, the art tied to the market. And so it's just knowing what your options are.
Speaker 3:
23:59
Right on, you know, there's one takeaway from today's show is you're listening and we have this volatility. We had a very volatile day all through the week, this last week or all, most days were very volatile. So you really need to pay attention to rebalancing, figuring out what that risk budget is, what you're going to have its specialty, fixed income, equity investments, rebalance it. And this isn't something you can put off or should put off to tomorrow. It's something you should do right now because if you put it off, then you could end up suffering the pain of consequences because you're either not appropriate allocated or you have way too much risk in your portfolio and you have the decline and then you sell your lock in a permanent loss and you're permanently reduce the amount of income that you're going to be able to pull out of your portfolio for the future. Let us show you how you potentially can do more with your investments while reducing your risk. We make the complex simple and it doesn't cost you anything. What we'll show you through our digital allocation system is how much downside risk you have in your current portfolio, how you could re optimize it to get a higher return from that portfolio. There's no cost, there's no obligation. Eight eight 84985138884 nine 85 13 that's eight eight eight four nine 85 13 I'm Ron Carson with Brooke Thompson and you're listening to welcome
Speaker 2:
25:20
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 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 well from wisdom with Barron's hall of Fame Advisor Ron Carson. You blindly take your social security
Speaker 3:
25:43
benefits at face value and you're paying through the nose in taxes in retirement, or you ignore the rules on how you can withdraw money from Your Ira, four o k or other qualified plan. And these are all critical investment mistakes that could cost you thousands of dollars and oftentimes there's no turning back. You don't get a do over. Welcome back. You're listening to wealth and wisdom. I'm Ron Carson if my cohost today, Brooke Thompson, thanks for joining us. There's no room to make a financial mistake and retirement and we've covered a bunch of them so far. Brook, but the seventh and the final one is not having a plan for skyrocketing health care and longterm care and health care is so expensive. Matter of fact, today this morning I went in, I've had several surgeries on my knees. I had to go have an MRI and Mris are expensive and, and we've got good insurance here.
Speaker 3:
26:36
It's like, my goodness, what if I didn't have an insurance plan to cover the cost of that? Um, I had my sister and her husband were, he got sick in uh, uh, Jamaica here last week. Talk about, you know, down there they, they ended up going through about $10,000 in cash, got no treatment, finally got back here to the u s or none of it insurance covered them. So again, if you're in travel out of the country and make sure you've got an insurance plan to actually cover that, uh, and you know, if you can afford, and you know, people have different philosophies on insurance, I believe that it's a real philosophical choice. You either insure everything or Dolan shirt, anything. And the only way you cannot insure anything is if you've got the financial resources to do it. Even if you do have the financial resources to self insure, you may want the mental ability to say, I just want to cover it. And I do. I tend to ensure everything cause I don't want to go, wow, you know, my house burnt down and I can't, I can't afford to rebuild it. Um, how longterm care is a biggie because a lot of people are going to face, you know, the extreme cost of, of longterm care and you need to have, you need to have a, you'd have a plan in place. What do you, when you're meeting with clients that are in their 50s or are they pretty receptive to starting a longterm care plan?
Speaker 4:
27:59
More and more? Yeah, it's very common that we're at, we have the conversation with everybody. They come then when we're doing the financial planning, what are you planning on doing for longterm care? Um, and how are you planning on covering that? And when we show the numbers and we show, you know, just the facts that 70% of people who live to age 65 are going to require some form of longterm care and the expenses are staggering. And, and the, the inflation, um, for the long term care costs are going up. I think I read it like 7% a year. So I'm way faster than the rest of the inflation for the country is going. And so you look at those, those facts that we do know and, and you have to plan for it because that can quickly wipe out your entire nest egg.
Speaker 3:
28:45
And if you start earlier, it takes a much smaller investment in order to ensure, so yeah, pay a lot later. Yup. Or the other issue is you may not even be insurable later. So start taking on those risk transference mechanisms today, I e insurance as young as you possibly. Yeah.
Speaker 4:
29:04
Yeah. So you know, life insurance, that's something, you know, the younger you are, the more healthy you are, the cheaper it's going to be. Longterm care. There seems to be kind of a sweet spot there for premiums after 40 but before 55 ish when you start to have some health and medical concerns. So, but no matter where you are in the spectrum, it's something that we can talk about and something that we need to look at and we'll help to advise and guide on what the right time is. But that in place,
Speaker 3:
29:27
let's, let's talk about some local events. So we've covered the seven deadly sins, right, or fatal mistakes that retirement. Um, but also, you know, you have to really be aware of, you can go do all this planning who you're really dealing with and Wells Fargo this week in the news, again, Wells Fargo wealth unit under federal scrutiny and you know, they're talking about stuff that is just awful. Whistleblowers claimed that the banks wealth management business was pushing products or services with an eye toward earning more compensation rather than finding the best fit for the customer. This comes from the Wall Street Journal and you would think with all of the awful things that wells Fargo has been in the news for, they would have been like towing the line, being a true fiduciary, putting clients' interests ahead of their own. But here they are in the news again. Um, and they, and they rate reached a settlement of $185 million with regulators in 2016 and it seems like they've been hit with one issue after another. You have to wonder how does it, how does a brand that I always thought was a really good consumer brand? How does it turn so negative so quickly and, or did it happen over a long period of time and no one really noticed? I think it has to be,
Speaker 4:
30:49
yeah, it has to come down to the culture and it has to happen over a period of time. And it stems from greed and it stems from, you know, not following that fiduciary standard that we're so proud of here.
Speaker 3:
30:58
Yeah, no, I agree with that. I mean, the fiduciary standard is, and you need to understand what that is. Yesterday, there was a pretty good debate going on on Linkedin, and I'm on linkedin every day. If you're, if you're out there, you're on Linkedin, I'd love for you to link in with me. There's a lot of different things that I put out on Linkedin, but there was a debate around a true to be a true fiduciary or so would you be duly registered? And here's a comment from an advisor here in Omaha that's right across the street from us. So it's no surprise this can happen any duly registered from where commissions and conflicts are on the table. Why would anyone work with a broker over fiduciary is beyond me. So that's partially true. Um, and then another advisor who I know well comments back, it says many clients don't have a choice when they have legacy business that they can't unwind or it's not in their best interest to unwind.
Speaker 3:
31:54
So here's where we come down on it. At the Carson group, we believe being a hybrid is in the client's best interest, right? For us, it's a royal pain in the backside because we have all of our new, all of our business is, is advisory business. But we have clients that have legacy stuff and we don't want to say, well, we don't really want to help you with that. And, or, or you're gonna need a five 29 plan, we're not going to do that because it's not an advisory solution for you. I mean, who's really being served, not the quote unquote pure fiduciary. So we have a, we have a fiduciary obligation to accommodate legacy brokerage assets that client's invested in. And maybe they weren't the best decision at the time, but in, um, and one of these broke is annuities. They have living benefits that at the time the insurance company issued them.
Speaker 3:
32:47
They were a great deal. Matter of fact, if you could go back to in time and get those guarantees that they offered today and just so you know how good they were, insurance companies about what broke. I mean there are billions and billions of dollars and they're trying to buy people out of those contracts today. Well this food, quote unquote fiduciary across the street had a client going, cause we got to see it afterwards, cashed in all of their annuities because they wanted the fiduciary assets, quote unquote and ruined about just under 300,000 in value for the client. And when we found out about it and we tried to reverse it, it was too late. So you know, ask how that's in somebody's bed stand. Well exactly. And I don't think they did it intentionally. I just think that a true fiduciary is really understanding the products that you're actually dealing with and being super careful.
Speaker 3:
33:36
Because all of these guaranteed things that are out there from the past, the insurance companies are looking for ways to get the heck out of it. And if you make one mistake, matter of fact, there's youth, there's limits on how you can allocate those, offend the v eight if you're not up to speed on what that is, you can blow the whole thing up and devastate all those guarantees that the client had actually accumulated. So I, you know, I, if you're going to just pick one broker fiduciary, obviously fiduciary, but we believe what's in your best interest is really having a combination of both. And it's also important that you're working with someone that has active and passive strategies. Cause what do you believe in more? And also the specialty strategies that we're talking about. Um, earlier, imagine if your retire broke and you're forced like the volatility we're having right now to sell investments in your IRA 401k during the stock market meltdown.
Speaker 3:
34:30
Or You just do it because you just get afraid. This is exactly what can happen to many Americans do to required minimum distributions. They can be forced to sell in a bear market and that is permanently locking in a loss. None of his want to see you do that. You for sure don't want to do that. So if you don't have a strategy to take out your required minimum distributions, the same thing may happen to you. The way to avoid this as having an RMD strategy, but it's critical. You do it now and not later. We'll show you how our little known strategies can legally help you save thousands of dollars when you withdraw money from Your Ira 401k in retirement, there's no costs. You absolutely have nothing to lose. If give us a call, eight eight eight four nine 85 13 we've got people standing by. They can schedule your initial analysis now. Eight eight eight four nine 85 13 you can pay more to the IRS or you can keep that money for yourself. Give us a call. (888) 419-8513 we come back. Brooke, we're going to continue to talk about what's going in the marketplace today. The Marcus were really volatile on Wednesday, all because of something that Donald Trump said. Of course, he wrote, he's bridal demarcus before and he's doing it again. I'm Ron Carson with Brooke Thompson. You're listening to wealth and 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 Barron's hall of Fame Advisor Ron Carson. When you retire, you'll be faced with endless
Speaker 3:
36:16
a number of decisions. Watsa decisions about everything. Risk. How are you going to generate income decisions on when to take and how to take and how to structure social security taxes. Healthcare. Medicare is so much more. Welcome back. You're listening to wealth and wisdom. I'm Ron Carson from my cohost today. Brooke Thompson. Thanks for joining us. Unfortunately, there are many trap doors along the way. Retirees will needlessly make bad financial decisions and will cost them a fortune. Coming up on our final segment, we're going to continue to talk about all the issues and we've covered them in this program. And actually you can go to iTunes and listen to our program if you've missed any one of them. But Brooke, I want to talk a little bit about what's gone on this last week in the markets. And a big one is in it is a bad leading indicator if it doesn't get taken care of.
Speaker 3:
37:10
And that is a trade war. I understand where Donald Trump's coming from, the US hasn't been treated fairly. Um, but also in, we heard, uh, our chief investment officer on Monday through our macro Monday. Talk about whenever there's been protection because on one hand I was out in Vail and one of my clients out there this weekend, it's like, well, because there's going to be all this infrastructure spending and Trump raise a tariffs. He's just protecting. Aren't these companies is going to do really well? Maybe in the short run, right? But a lot of other people are going to do worse, right? The cost of everything goes up. But I thought Scott made a really interesting point. He said if you go back and look at companies that were protected in the past and then all of a sudden they had to compete globally, they fell flat on their face because they didn't innovate.
Speaker 3:
38:00
They did not reinvest. The textile industry is a great example of that. So be careful what you wish for. Um, you know, there are some segments of winners or your steel worker in the short run it's going to be really good. But I just think trade wars are bad in general, you know, for, you know, just just for the u s United States of America. The other thing that hit me broke as a lot of my older clients are talking about or getting divorced and it, it's crazy. It's, and um, you know, when you're, you know, you, you do a lot of work just in the women segment. Yes. Do you have an opinion on why all of a sudden women in, and I think it's more of the woman decide, I don't want to be married anymore than it is a guy. Is that my, is that a fair perception or is that off base?
Speaker 4:
38:57
It's interesting. Um, I would say I haven't seen that as much. So we've switched balance. It's very balanced. Yes. Um, we've seen actually three women in the last two weeks here at Carson wealth who are over the age of 55 and going through a divorce for the first time in their life. And one of them is just very financially empowered. She feels great about where she's at and she doesn't need her. Um, you know, this guy that she's been married to forever and she, you know, kind of looks at it as like dead weight at this point. Um, which is unfortunate, but the other two were how many years that loud? That 35. Wow. Yeah. Wow. So, uh, the other two women were both in the same situation where they actually stayed at home, didn't work, didn't have the spousal IRA that we're always preaching.
Speaker 4:
39:47
And like, if you're, if you're lucky enough to get to stay home, make sure you're still planning for your own retirement. And these two women were lucky enough to get to stay home, support their husband's careers and now, um, are, are not going to be a in that marriage any longer and also don't have anything that they set aside for themselves for their retirement. And so, you know, they were looking forward to these retirement, they had this picture in their head of what that was going to look like and now, you know, chop that in half at least. And how do we rebuild from there, especially at a point where you know, what are they going to fall back on?
Speaker 3:
40:23
Yes. Also when there's the division of assets, I've seen recommendations or they come in and this is what they've offered when you're, if you're going through a divorce or thinking about going through a divorce, all assets are created equal. I remember I had an example recently where the, the, she was going to get most of the retirement assets and we're going to do a quad row to split it. And he was going to take some real estate investments that had a high cost basis. Right. And so when he sold that it wasn't going to pay much of any taxes and what he would pay would have been longterm capital gains and she was going to get stuck with all of his retirement assets that have ordinary income tax rates attached to it. And there was no adjustment being made. I'm like, your attorney fell asleep at the switch here. This is absolutely a bad deal for you. So make sure that when you're doing the division, you're looking at what is the effective asset that you're going to get after tax.
Speaker 4:
41:25
Yeah, and no matter how old you are, like you said it, it doesn't matter when you're looking at making those longterm decisions because even if you're in your 50s you could still easily have 50 years of life. The need to make sure that you have that money for it and mingle the forecast that to be able to look out into the future. You know, we don't have a crystal ball here run, but we do have really great technology and we're able to forecast a lot of different life events and see what they're going to look like. A wonder how many
Speaker 3:
41:52
people stay married just because they can't afford to get divorced. You know, it's like they just stay. I mean I want everybody listening and I have this wish for everybody that I love in my life is get to the end and say I'm glad I did not. I wish I had and sometimes it just doesn't make sense I guess, but do something about it or have a game plan. But I feel for those that are maybe in a relationship because they financially can't afford to get divorced. Let's talk about something here. It's along those lines is the world is getting more older. People are getting divorced at an older age. There are more people age 65 and older than ever before and the 600 million individuals are placing pressures on a Saturday waste retirement systems. A World Bank, this is worldwide by the way. The World Bank estimates that by 2050 the global elder population will be 2.1 billion making retirement security, one of the most pressing social issues facing the world in the next 30 years and sadly the US is losing ground.
Speaker 3:
42:53
I'll think of this. United States of America is losing ground when it comes to retirement security among the leading nations for retirement security. The US ranks 17 according to the 2017 global retirement index. And at this rate, retirement is more of a fantasy than a reality for many people in this country. This comes from my buddy at CNBC, Jim Pavio. Um, and this is scary. I mean, we already know it's putting enormous pressure, that void, teach it to your kids, vow to do it. Now get started, have a plan, start sacrificing a little bit now so you can have financial security in the future and broke people may live a heck of a lot longer and then you don't have nearly enough money for the life that they may have.
Speaker 4:
43:40
Well, they're not willing to make the adjustments necessary or they don't even know. You know, what they need to adjust. So rip the bandaid off, figure out what you need to change in your life in order to be successful and then change. Make some changes.
Speaker 3:
43:51
Yeah. And I always, I love doing it. Going through the analysis to say of everything bad happens, what can we pare down? What's the bare minimum? Because I you never going to mind if you have more than you expect it for retirement. If you have a lot less, that's what's going to be a big issue. And if you're out there and you've got the market volatility, you're looking at social security, you're looking at all of these things and all these decisions. We've got a lot of subject matter experts here at Carson wealth, Cpas, CFPs, cfas, attorneys all over the place. So we really have a really capable team of solutions and the big one now, if market volatile to get the balance right and know what your downside risk is, if you can accept the downside, the upside will 100% absolutely. Take care of itself. Give us a call and get a second opinion. Eight eight eight four nine 85 13 that's (888) 419-8513 be accountable. Take charge of your financial future. Eight eight eight four nine 85 13 call now. Eight eight eight four nine 85 13 I'm Ron Carson with Brooke Thompson. And you've been listening to wealth and wisdom
Speaker 2:
45:13
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. Okay.
Speaker 1:
45:28
And here's the legal Mumbo jumbo. The opinions voiced and wealth and wisdom with Rod Carson over general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk, including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory services offered through CW m L L C an SCC registered investment advisor.