Wealth from Wisdom

The Road to Retirement

January 13, 2018
Wealth from Wisdom
The Road to Retirement
Chapters
Wealth from Wisdom
The Road to Retirement
Jan 13, 2018
Carson Wealth
Show Notes Transcript

The Road to Retirement is complicated and confusing, and many people make easily-avoidable mistakes. Learn how to avoid these mistakes, and how to save yourself thousands of dollars in fees.

Speaker 1:
0:00
Okay. And here's the legal Mumbo jumbo, the opinions voiced and welfare wisdom with Ron Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SEC registered investment advisor.
Speaker 2:
0:31
This Doug Morgan 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 200 and feet. The skyrocketing cost of healthcare and retirement could now run 350,000 planning 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.
Speaker 3:
1:10
The road to retirement is riddled. I mean riddled with rules and I wish you were easy, but it's not. You know, it's complicated and it is confusing. There's just so much out there. There's rules for this. There's rules for that. There's rules for rules and it gets really hard to make sure that you're doing the right thing and not making a mistake. And if you're not paying attention and you make one of these mistakes you could trigger. And we see it a lot here at the Carson group, pencil penalties, fees that are just needless, and they can cost you not only a small fortune, but really costs you confidence. And Are you doing the right proactive thanks. Make sure you can get and stay retired and a lifestyle and what you've grown accustom. Welcome to wealth and wisdom. I'm Ron cars off my cohost Paul West, and we're going to have a great show today.
Speaker 3:
2:01
We have some exciting workshops coming up. Uh, but also we're going to send you away today with some very actionable ideas on how not, not to make some of the mistakes that once you get into retirement can be so easy to, to really do. Because I think you get into autopilot, you accumulate assets. You think, okay, I've got a pile of money. I'm going to have the retirement that I want, and then all of a sudden you can start fumbling the ball and they can have a big impact. We're going to talk about social security benefits. There's a penalty, believe it or not, if you do it wrong, we're going to talk about how important it is and wind role in Medicare so you don't avoid, you can avoid penalties. Also withdrawing money from Your Ira, four o one k and other retirement accounts required minimum distributions. You know, there's a 50% penalty if you miss it. We'll talk about that. And just a lot of other actionable ideas. There's just so many trap doors, so many ways to get up and we don't want
Speaker 4:
3:00
you to be blindsided. But Paul, before we get into that, let's talk about some uh, workshops. The tax workshop, I mean, you know, historical tax legislation, but talking about trap doors and complexity, there's a lot to know. It's probably the number one topic that's going on right now. Ron is what should I do about my taxes? And I'm going to tell you right now, if you're going out and just reading an article a and trying to say, Hey, is this gonna apply to me? You're probably making a mistake because you've got to look at your individual sits ga situation a and there's many complications that go along with it. And I'm thinking about taxes and changes and complexities around. And I know when somebody starts talking about something that I don't quite understand, I do one of two things. Either ask them a question to explain more or what are most of us do?
Speaker 4:
3:47
We tune out, we gloss over, we stopped listening in. You can't let that happen with your finances. You can't let it go on. And you know, one of my examples of life and it's been a trend we've seen happening and think about how we consume information now. So many of us are video based. We love videos. That's how we get so much news and information and online. Think of Netflix, think of Hulu. So I was just looking at, I'm still a little bit old school. I still have a cable provider cause I've got access and I went out and looked at and preparing for today's show. You still read a newspaper, right? I do. Yeah. I know that. I mean my, my dad still does. I mean your dinosaurs are out there and join ruin and our our forest. But that's your business. Well I enjoy a cup of coffee and the newspaper on a Sunday morning, but that's all right.
Speaker 4:
4:37
That's my preference. And I'm sure plenty of our listeners do too. That and I, I keep the cable because of the multiple channels and multiple reasons behind it, but I went out because I hadn't looked in a while. How many fees am I getting assessed besides the monthly feet I'm getting hit with look at this for fees, for my TV and Internet service and for my telephone service, I'm getting hit with one, two, three, four, five, six, seven, 11 different fees. Wow. Excise fee, local sales, tax, state sales tax emergency nine one one. FSC, excess charge business and occupation tax, regulatory cost recovery feet, stinking universal service fund fee. I had no idea that there's that many fees that go associated with that. And I think in today's show, Ron, we're going to talk about, so what do I do every month? I look at the total bill.
Speaker 4:
5:24
It's $200 plus a month that comes in. Guess what? It comes automatically out of my account. I don't really worry about it or I look at it briefly, spent seven seconds on it and move on. If it looks okay, you don't dig any further. I don't exactly what if it's, if it's, if it's in a bandwidth, you know, one direction or the other, I'm fine with it. So that's what happens with a lot of people with their portfolios and their financial life. Ron, they're directionally looking at it. Is it okay? But there may be a lot of undercurrents that they're not aware of yet. And I think in today's show we got some great things to share with you that if you actually dig in and spend 30 minutes, an hour to really research these things, you're going to feel a lot more comfortable if you're on the right pathway or if you need to make a change.
Speaker 4:
6:06
And it's a big reason why as we talk about taxes with this new tax reform, we need to make changes but you need to spend some time to look at it. So if you're actually interested, um, due to the snow storm this week, Ron here in Omaha, uh, we had to adjust where having a tax workshop. So we've actually moved it to the 18th here of January at 5:00 PM. And if you're interested, we glad to have you attend. Be Do need to call us at (888) 419-8513 cause we do want you to have an RSVP on the list.
Speaker 3:
6:35
Yeah, it's going to be good. You're going to have real actionable ideas. There's no obligation at all to do business with our firm if you are interested in what you need to know. And then if you want a second opinion, more than happy to give it to you. But you know we're all about the law of abundance. Let's give some good information out there and let people make, yeah, it's her decision. It's actually other CPA professionals throughout the city. Ron Actually helping deliver this presentation. Yes, and we actually have several of our own CPA's right on on our team here in Oman. Let's talk about social security, early enrollment penalty. And I think a lot of people don't think of it as a penalty. They go, I get less benefits. Was that, is that a penalty? It really is. You know, you can start collecting social security at the age of 62, but your payments will be smaller than if you waited until full retirement age, which is depending upon your age or when you were born, somewhere between 66 or 67 and if you start collecting your benefits at 62, you're going to get 25% less every month.
Speaker 3:
7:35
Then had you waited for your full retirement age and it could be 30% less if in fact your retirement age is 67. Now everyone's situation is unique. And here on wealth and wisdom and a Carson group, we always offer, so security analysis and we can offer you that. Um, but just be aware that it is significant. And by the way, with interest rates where they're at today on, they're so low, if you can defer, that's about the highest return you can get anywhere. And you're absolutely taking no risk to get that an incremental return. It accrues at about 8% a year.
Speaker 4:
8:11
Yeah, Ron, it's amazing when you explain that to people because where else can you go to get that, um, post full retirement age of 66, 67 whatever it is for the listeners today. It's a huge number, but it may not be the best number for you. And I know we talked about all the time Ron, but yesterday I had an opportunity to family that listens to the show, came in and brought in their social security's Damon. And you know, like many of us, they, they've, they're at that point, they're close to retirement, they're 60 years old. And can I, do I have enough? You know, and that's the common question is do I have enough money to live in my retirement? And as I think about that, it's, I don't know, and it depends on what the specific situation is and what that looks. So the initial reaction was, well, I do want to retire, but the best way to replace my income is to take social security at age 62 my first chance I can.
Speaker 4:
9:04
And when we showed them there was a reduction and I'd almost rather for a lot of them, Ron, take money out of a taxable or tax deferred account and save up that money because the value of that money and how it's going to return for them is going to be so much stronger. But everybody's different. So and as you're looking at it, understand there is a penalty. It's your money now that your losing. If you go early, and I love your advice Sir Paul because how many people are taking social security early? So then I have to withdraw from an account but really that you're getting a guaranteed return of 8% on social security accruals if you're taking it early. And even if you wait the on the age, it's still grows fast. I think it will, I believe it's up to 70 check me if I'm wrong you, it does grow considerably beyond the point of of when you can take it and get full benefits, you actually start getting a premium in that return.
Speaker 4:
9:56
But it's compelling not to take it from an account unless you're aggressive growth investor and you think stock markets undervalued. I always revert back to what's my risk free return. Yeah, and there's complexities that go along with taxes. So it the tax situation on it, and Ron, we've talked about this before, we're not going to get into detail today, but there may be a benefit of delaying it using your money from your other accounts so that way you don't have to pay taxes on your social security or you pay less taxes because people forget that up to 85% of your sole security income can be taxable. And I know it seems like a number, but it's a big number for a lot of people and if you think about you're on a fixed income and your retirement, that could be the difference on you taking that one trip a year to go to Florida to visit your kids and your grandkids.
Speaker 4:
10:47
It could be that difference in do you really, really want to miss out on that opportunity? Because I can tell you when people want to know if they can live well in retirement, the number one word they're looking for, for fun is travel. Travel is what they want to visit people. That's what they want to do. It's all the little things done right that really add up to something significant. Rarely, especially in taxes, it's hard to find a grand slam, but a lot of singles and doubles and they add up to lots of runs, but you have to execute them. You've got to do them properly and, and those little things can make an enormous difference on what you have left. The other penalty is medicare, late enrollment penalties, feeling to sign up for various parts of Medicare during the month around your 65th birthday can dramatically increase premiums for the rest of your life. So you really gotta be careful there. And we're going to talk more about this when we come up with the next segment, Paul, but also want to just, you know, the, the workshop that you're going to, you're going to have, you know, the Trump tax plan. It is big and it's going to have a lot of impact on people, their mortgages or income business owners, she convert
Speaker 3:
11:54
to a c Corp, say a c Corp S. There's different rules there and how are these going to impact the way you run your portfolios? A way you, what you invest in the mortgage deduction. Lots of big items out there and nobody's exempt from this and there's a lot to learn. Don't just look at the media headlines. You've got to really get into the trenches and learn what it means to you. We can show you how in our workshop, give us a call. It's coming up here on the 18th of January (888) 419-8513 if you can't make it, we have a handout that we can give you that really highlights all of this. Eight eight eight four nine 85 13 remember, it's what you keep, not necessarily what you make that can have a profound impact on your nest egg. Call (888) 419-8513 we have a handout or a workshop on January 18th eight eight eight four nine 85 13 I'm Ron Carson with Paul West and you're listening to wealth from wisdom.
Speaker 2:
12:51
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 of Fame Advisor, Ron Carson. He's a published author and has been featured in Forbes Investment News, the Wall Street Journal, CNBC, and more. Now back to well from wisdom with Barron's hall of Fame Advisor, Ron Carson, half of Americans have absolutely
Speaker 3:
13:15
no idea how much they pay in fees on their IRA 401k or other retirement accounts. It could you be one of them. Welcome back. I'm Ron Carson off my cohost Paul West, and you're listening to wealth from wisdom, hidden fees in your Ira, your four o one k or as Paul said, even in your account, right? With all of the servicing fees and your telephone cable provider, whatever it is, it can be irritating, but more than that it can add up. Hidden fees can be the tip of the iceberg. It can make the difference between having something great and having just a mediocre return on your retirement. There's all kinds of examples out there, and Paul, we're going to get into this because there's some lots of new information people need to be aware of, especially with this DOL thing being really postponed. It's allowing all those, I want to call it gimmicky things that people can invest them with.
Speaker 3:
14:07
Hidden fees and expenses need to be really, really aware of that, but I just want to finish up on the last segment. We talked about the Medicare late enrollment penalty. If you enroll and you you're going to enroll in Medicare and you fail to do it around your 65th birthday, dramatically increase your premiums for the rest of your life and is, there's really nothing then you can do about it. You must sign up starting three months before your 65th birthday or within eight months of leaving a job with grief group health insurance. And if you don't, your medicare part B premium won't increase 10% for every 12 month period. You delay after becoming eligible. That's huge cause that goes on for the rest of your life. The medicare part penalty penalty begins if you go just 63 days without prescription drug coverage and goes up the longer you go without this coverage. So I don't think a lot of people realize that if you're not on top of this, this is something you can't go and ask the IRS for the government for relief on this year, it gets permanently going to have these increase expenses.
Speaker 4:
15:11
Yeah. And it's, it's something simple and it's something your advisor should be reminding you about and you need to be conscientious of it. But it's, it's a simple thing to avoid, but Medicare is not as simple as just filing for it. There are complexities that go along with it. So as you get further into the calendar year and closer to the enrollment period, reach out, work with a professional because it's something that you don't want to mess around with you. You want to make the right decision for you and your family. Yeah, there's a lot of information out there on the Internet, but that's just information people's posted has been best for them. You need to figure out what's best for you. That goes along with it because when I think about, you know, embedded fees are on, um, you know, I talked about, you know, challenges, you know, like with the cable fighters.
Speaker 4:
15:51
Also think about cars when people buy cars, you know, and, and the old world of, Hey, I went into a dealership, I dealt with a dealer and negotiated the price of car. Oof, finish, clap, clap my hands and I'm done. Nope. Then you go in and you say, oh, there's a dealer fee. There's an application fee, there's a sales fee. There's an all of a sudden you're like, what just happened? And so a lot of those things are negotiable in life. And that's one of the benefits of once the car place down the road here from us, that carmax replace the prices. What you get, and it's
Speaker 3:
16:21
have you date? I have not. I have, yeah, I have actually sold a car to them and it was like the easiest transaction in the world and I got to check ride. Oh, it's simple.
Speaker 4:
16:29
Yeah. But the fees were what they were, there was nothing hidden. It wasn't like, and I actually, I'll give the airlines credit, they're better at this. When we used to buy a flight and you'd say $200 and then at the end when you went to go buy it, it was $237 and 50 cents because of fees, at least now on the airline sites, they're forcing them to put the, all in
Speaker 3:
16:47
I said was going to say it's not because they wanted to do it. There were forced to do. True. Very true. But not everyone's forced to do it. That's why you gotta be careful with embedded fees. This here's a quote from Barbara Roper. Now she is the director of investor protection at the Consumer Federation of America. And she says, repealing the rule. And then she's really referring to the rule, the DOL rule where, um, you had to be a fiduciary and there's a lot of things you couldn't do and you had to be transparent really everything you would expect from your financial advisor anyway. But she says repealing the rule frees up advisors and insurance agents and brokers to go back to recommending what's most profitable for them rather than what's best for their clients in a freeze up firms to keep the toxic financial incentives in place that encouraged and rewarded advice that is not in the customer's best interest.
Speaker 3:
17:42
And this is so true and it's one thing I hate about our profession. Paul's, they average advisor or client doesn't. The difference between a fiduciary, which is an ria or a broker, the difference on a fiduciary, we're required to put the clients by law, put the client's interest first. As a broker, you only have to show suitability. And they gave you necessarily a big prospectus or disclosure, all the legal ease, and you somehow, if it was disclosed in there, they can do whatever they want. So it's really back to buyer beware. Yeah. And so many people still don't understand that run. Um, I was explaining a family who was interviewing a bunch of financial advisors and planners, and we were the third group. They were talking to you. And I said, well, how many other of them are the f word? And they looked at me and I said, yeah, fiduciary.
Speaker 3:
18:30
And they said, well, no one else even talked to us about that. I said, warning sign number one. If they're not immediately telling you that they're always going to represent your interest first over theirs, then you got a problem. So let's talk about some of these common fees that I think people need to avoid. One of them is called a 12 B one fee. So it's a little bit of a hidden fee for many of you out there. So if you're a mutual fund or annuity has a fee inside of it, that's called a marketing 12 B one fee, the only one that's benefits, well there's two people at benefits. One, the company that actually built the product that you're in to the salesperson that sold it to you and I use salesperson for a reason. Is, is because they probably didn't disclose this fee that they're getting some portion of for offering that product to you.
Speaker 3:
19:15
And that's a question I would ask her advisor, are you getting paid any 12 B one fees of the industry? The argument to the regulators was, hey, if we put this in here, we can then, um, at, uh, it's a marketing fee we paid to advisors, they can grow their business, it'll get bigger and we'll be able to reduce the fees. And actually mutual fund fees have gone up even though 12 week one fees are there. So it's not, um, it's not benefiting the consumer. Here's an example. So excessive fees and expenses, 67% of Americans don't believe they pay any fees on their 401ks and they're just dead wrong. And here's the kind of, Forbes had a great example here. They said, how much can mutual fund costs eat away at your returns? Here's a simple illustration that Forbes magazine did. It says, suppose you have 100,000 to invest in equities and the markets go up by 8% after you invest, you think he made 8,000 bucks, right?
Speaker 3:
20:09
But if you invested that hundred thousand in mutual funds, your returns could be much less. While the market's increased, 8% returns can be eroded by disclosed cost and nondisclose hidden costs because believe it or not, all costs are required to be in the prospectus. You then have to know to order supplemental, which are not required to give to you upfront, which has a lot of additional hidden costs. They're hidden because they weren't disclosed the first time in my mind, and there's just there, they add up to where in this particular case, a fund that they looked at, it was an 8% that the client receive. What do you think it was? Fall? Probably
Speaker 4:
20:48
three or 4% 1.78% low one. I want to repeat that 8% to 1.78% and you know sometimes, and I'll use a, our firm as an example of clients come in and sell. Our fees are higher now we're just disclosing them all to you, right? He has a big difference there and we're actually not at all, but you're just seeing it and that's, and that's a big deal. Let's give it up people. Another great example of that Ron. So many people love to invest in real estate but maybe you don't have the capital to go buy a bunch of different real estate properties. So a common vehicle many listeners may have is called a real estate investment trust or a re is a very common short form name of that. And you may like it because your financial advisor or broker, whoever told you about it because it's paying you an income stream, it's paying you x percent per month or per quarter based on the value of the real estate.
Speaker 4:
21:42
What you don't know or understand though is when you're putting that money in, there are sales charges or loads and I hope your has done a good job of explaining this to you. So let's just say you put $100,000 in around you and I have looked at hundreds of these products, you know over our lifetimes here. And usually what you actually start investing with, if you put 100,000 in, it's closer to $89,000 of value that you put to work day one for you. Cause the rest of it is coming out in fees and people don't understand it. They're like, well hey I'm still getting 5% Paul. This is great. Not really because you had 11,000 you lost the day one. You made that investment on what they could have had, something like that, right? You're just measuring on how did I do well be able to compare to what you could have actually had.
Speaker 4:
22:29
Here's another, this is a report from us news and World Report. It says how mutual fund expenses can hurt your bottom line. And they went in and they did a study and it showed just trading costs alone because companies can take order flow, backdoor payments. There's all kinds of ways that they cost you cause you don't even see it because it's in the trading 1.44% just an increased trading costs. Paul. Wow. And and on some funds on this study, these are mutual funds. It was 3.17% a year. That's crazy. Crazy. That is crazy. Crazy numbers. And so a lot of times too, people think that another expense to be very, very cautious of is if your company you're working with that's helping manage your money also makes their own products. So Hey, they may be charging you 1% but their products are also making them money. And by the way, they're not putting you in those products because they're always the best performing products. If they are, that's great, but you better be checking. They're making a lot more money off those products and mutual funds that they have used in and run. We just were recently working with a family. They were in this, they didn't believe us. So we ran an allocation tool for them, which showed them their average expense ratio of all their expenses
Speaker 3:
23:46
as the advisor at Wells Fargo was giving them, plus all of the wells Fargo funds they were in. And it was a great way for them to see their true all in cost. And that's why Paul, we always recommend getting a second opinion, understanding, having a forensic really look or x ray taken of your portfolio so you know what you're paying. But the other thing that people are missing is how much down downside risk. We have our digital allocation tool. This is something that can show your upside, your downside, but we can also help you disclose all the fees and expenses in there. And this is something that is so valuable that you should have. And if you're wondering, we just talked about Iras, 401ks mutual funds and all of that. You want to take a look at it, you want to make sure that you get a second opinion.
Speaker 3:
24:33
And we're good at what we do. I mean, you know, we're Barron's hall of fame team. Okay. I have 140 stakeholders. We have 38 people dedicated to research, several CPAS. We have cfas, we have attorneys. We have one point access to be able to really do this stuff right. Our operators are standing by to take your call right now to (888) 419-8513 that's eight eight eight four nine 85 13 if you have an advisor, it doesn't hurt to get a second opinion and Skus. You're the one that's going to suffer the pain and consequences if you don't have the best team on your side. Here in Nebraska, we just got rid of Riley and I of course when we have moves and we have Scott Frost, maybe it's time for you to upgrade your leadership and who's coaching you? Eight eight eight four nine 85 13 I'm Ron Carson with Paul West and you're listening to wealth from wisdom.
Speaker 3:
25:22
How could you make your money go further in retirement? Next unwell from wisdom with Barron's hall of Fame Advisor, Ron Carson. He's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to wealth from wisdom with Barron's hall of fame advisor Von Carson. If you have an IRA 401k or any other type of retirement account required, minimum distributions could needlessly cost you tens of thousands of dollars in taxes, penalties and fees, and possibly a lot more. You're listening to wealth from wisdom. I'm Ron Carson with my cohost Paul West. Creating a sound and thoughtful strategy around these RMDs now could have a huge impact on how much you pay the IRS, how much you keep, how much you put in your pocket. And Paul, this is one that the penalty for not taking out what you should have taken out of your retirement account is 50% of what you should have taken. This is on top of all the other taxes that you have. So this is one you absolutely can't afford to have RMD. No, not at all. And people forget what the rfds are on that with the taxes that go along with it. The biggest change that's happened, especially now with this new tax bill is it creates new opportunities here in 2018 for you. So I just want to talk about one with all of our listeners today, Ron, that's really prevalent with a lot of people who
Speaker 4:
26:44
are either just started retirement or looking forward to retirement is let's say you've been working at your employer 10 years, 20 years, 30 years, whatever it is. Then you have amassed that money. You want $1 million, 2 million, whatever that number is for you. Well, you're trying to decide when to draw upon social security and you're trying to figure out, hey, I got to pay taxes on all this money and I know at age 70 and a half I'm going to have to take money out. What if we did started taking more of that money out now? Or what if we converted that money, paid the taxes on it and moved it into a Roth account? So a Roth, you're gonna have to pay taxes now, but all your future distributions out of it come tax free. So now when that money's coming out tax free and you've got to start taking your social security, you're no longer going to get taxed on it.
Speaker 4:
27:30
And that is a huge planning technique that everybody, especially if you're in your sixties you need to be looking at that right now and talking with your advisor about it because this could save you not tens of thousands run hundreds of thousands of dollars. And so people are like, oh, this is great. I'm paying 3% less per year because of the tax change. You'd be paying 15 to 20% less. Actually, if you do the right move here, what a Christmas gift. So you've got this window to do some planning. I'm just wondering how many people out there that they just won't take the time to do it. A or B. Their tax advisors are so busy that they don't have time to really sit down and do it. So you have to be the one, you have to be an advocate for your own stuff. You know, you have to take some action.
Speaker 4:
28:11
If you're listening to this and does this window, does this conversion. Makes Sense? Boy, that's pretty compelling, Paul. Ron, so I mean everyone was so worried in December about trying to pre pay their local taxes or prepaying charitable contributions. But the interesting thing is, and I've talked to several CPAS here in the Omaha community about this, so many people did that for the tax benefit for them was guest. How much Ron, you know, a 50% tax benefit, 80% zero. For most people that did that and prepaid, there wasn't even a tax benefit of them doing it. They just saw an article or saw something on TV and so they just did. What a lot of people do is they follow the masses. Most people are followers in nature and you just heard what other people were doing. You'd assume you did, but it actually wasn't the right move for them.
Speaker 4:
29:00
And the Roth conversion could be a right move for many of you, but it may not be. You got to work with someone that can really help you think through that. One other way to avoid this potential penalty for retirees, a 70 and a half or older, you can donate an IRA distribution to a qualifying charity and that can help you avoid the our RMD and income tax altogether for that year. So if you're already given to charity, and this is the other thing that confuses me, people give cash, don't give cash, give appreciated stock, make it make the distribution out of your Ira to that qualifying charity because you're not even paying a dollar for the dollar of donation. You're getting your whatever taxable gain is. It's not costing you anything. Yeah, Ron, I was actually having breakfast the other day with a member of the Omaha community foundation and we were talking about what happened in the end of the year, and of course the number of accounts they opened up with significantly higher, but the number of people actually learning this in gifting appreciated securities went up too.
Speaker 4:
29:58
So I'm glad people are being more well educated on this because it does make a huge difference. So if you don't understand these things, again, if you want a next Thursday, January 18th at 5:00 PM you're welcome to come to our tax event. If you want, just RSVP (888) 419-8513 if you want to listen to that. But Ron, I want to just kind of transitioned for a minute into is we're thinking about Iras and how all of these things work. What's the number one concern people have in managing their money in is, is, is a consumer says what's going to keep them up at night. You and I have talked about this all the time. Is, am I going to run out of money in my retirement? Too much life at the end of the money. Yeah. So I just want to share an email we got from a listener cause this is fascinating.
Speaker 4:
30:43
So this tells me about something that I thought was just super fascinating is, Hey Paul, my wife and I were both 66, you know, we've worked hard. We're about ready to retire and we've amassed approximately $2 million of assets in both Iras and taxable accounts. Um, I thought my retirement was going to be a lot more, but unfortunately due to circumstances it was cut. So I am very worried about our future. By all he said he had $2 million. I'm very worried about our future and generating consistent income without going broke. We both have long longevity in our families. You guys have been highly recommended. I don't know what to do anymore. I'm sorry for rambling, but I just don't know what to do it. Here's the thing around, here's what I'm going to say about this. Here's frustrated, panic, scared, all of those things, right? You fork about hitting a big number, yet he's terrified on what am I going to have enough through or my retirement and my advice I give to everyone here is is don't worry about a number.
Speaker 4:
31:42
Yes, a number numbers. Maybe that trigger moment in your mind is at 1 million as a 2 million, whatever your number is. The more important number is how do you want to live your life in terms of living expenses so that you don't run out of money. And you and I have coined this phrase frequently, Ron, is what's what, what's your pillow number? Are you actually able to sleep at night based on all of that? To me, your mental and probably physical health related to sleep and we've talked about sleeps, the most important thing you can do is related to not running out of money in your retirement. That's so well put. And you know, and the big, big, big factor here, Paul I think gets missed a lot. People are so focused on what the market's going to do and everything. It's what they do. It's investor behavior and it's no wonder is right now I'm looking at some predictions. It just came out. So we've got Byron Wein who has been around forever. Byron is saying that the s and P is going to
Speaker 3:
32:40
a dip below 2100 so yeah, 2100 the very next article Grantham sees s and p this year to 3,702 credible people been around for a long time. And so who do you believe? Right? That's a 75% different. And, but the point is if you try to believe either one, you've already failed because that's not the question. The question is do you have an appropriate amount of risk relative to what you want to do? Because as many times as you guys are right, the wrong the market will do whatever it needs to do to prove the largest number of people wrong at any given moment. And this proves that Dalbar every year does he studies and they show what clients actually owned versus what the market did. So for the last, let's just look at equity, mutual funds, Equity Funds for the last 10 years, let's go 20 years, 20 years, the average investor earn 5.19% while the s and p was up 9.85% that's basically double.
Speaker 3:
33:51
And the reason why it was with behavior, they didn't own it at the right time. The last 12 months, there was 8% leg between owning it and what the actual performance was. So its behavior is the most important factor in your success because everybody's got an opinion where all the world's authority on our opinion. But you want to really be careful who you listen to and have a process and a regimented approach by which you follow, follow a game plan for you and your unique needs because right now people are not concerned about risk round but it's a huge concern that's out there. Hey, I want to, I were talking about all kinds of things. Today's penalties, fees, what you should do, getting a second opinion, lots of really good stuff and if you have questions about your specific situation about how and when you should withdraw money from your retirement accounts, how you can avoid all of these taxes, penalties and fees we've been talking about, you can email me directly.
Speaker 3:
34:52
areCarson@carsongroup.com. It's ourCarson@carsongroup.com. We feel dozens of email questions from our listeners every week and we'll and answer every one of them. Again, it's ourCarson@carsonwealth.com and you know we go to our website, take a look of what goes on there and we've got Nelly here today or chief comfort officer. I just did a video with her yesterday. Nelly actually has her own blog. So you know, we not only do you get a human's perspective here at the Carson Group, but you get the nonhuman perspective, which is, which is really unique to what we do and we're going to be coming up on our final segment here. We're going to continue to give you ways to avoid fees and expenses. We also have a tax workshop coming up. We have a women's investing later this month. Give us a call, 888400900 85 (388) 849-8513 I'm Ron Carson with Paul West. And you're listening to wealth and wisdom.
Speaker 2:
35:48
Yeah, trust, transparency, accountability. These are the values that drive Ron Carson and Carson. Well, you're listening to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. Is it possible you could pick fewer taxes in retirement and keep this money for yourself? You put learn right here and right now on wealth and wisdom with Barron's hall of Fame Advisor, Ron Carson.
Speaker 3:
36:14
The road to retirement is riddled with rules that are complicated, confusing, and there's rules for everything. Or was even rules for the rules, but it's not just that, you know, Paul and I are talking about an investor behavior. There's this is a song you should wing. This is something you need to be very intentional, very thoughtful about. You know, you've got the market, you've got the opinions, you've got interest rates that are coming up, but they're still historically low. There are a lot of cross currents out there and you only get one life to live and you want to get to the end of your retirement. Sam, glad I did not. I wish it would have or wish I had being an advocate for your own success because guess what? If you're blind sided and you don't have a full transparent all star team, whether it's us or somebody else, you're the one that's to pay that have the pain and the consequences of doing that.
Speaker 3:
37:00
Welcome back. I'm Ron Carson with my cohost Paul West and Paul along those lines of just the firm, we pride ourselves. I think it'd be really forward thinkers about a lot of things. And we've been talking here at the Carson grew up about crypto currencies for a long time and by no means are we recommending you and invest in a crypto currency, but what's going to be a game changer for our economy? I don't think people will appreciate this and I think it will be on the magnitude of three to four times what the Internet was. Is blockchain a blockchain? Think of blockchain is just a platform that enables crypto currency, but there's so many other things that are going to allow it to actually happen. Actually, there's a pretty decent, um, Netflix piece on your cryptocurrency and some of the like Nick Sevo great podcasts on Tim Ferriss on this topic by the way.
Speaker 3:
37:52
But I would as a consumer, learn what you can because when your investment advisor at some point we're going to come to our clients with how to play the blockchain, I think it's going to be much bigger than mobility, much bigger than the Internet. And you want to figure out what are the fundamental foundational place where you don't have to gress guests about some crazy valuation, a currency like a fluctuate 50 or 80% in a day. But how do ya, you know, we don't need to get, we don't, we don't need to get the the horse right. We want to be the racetrack. Racetrack gets us, it's cut either way, right?
Speaker 4:
38:25
Absolutely. Right. I can't believe how many conversations, and this is a curry right now. Uh, I actually called a friend of mine the other day and you know, first question is what's new? And the individual said, well, Hey, I'm actually sitting here online trying to figure out how much bitcoin I want to buy because my neighbor down the street told me he made $1 million and I want to do the same. And I said, do you want to know a faster way to do that? Go take that same money you're going to invest and go put it on black or red at the casino because you have just as much,
Speaker 3:
38:54
oh, was crypto. That's so true. Today we're actually bringing out, so I, you know, I, uh, I spent a whole week at singularity university last fall, and that by the way, is one of the most incredible experiences of my life. I was with 90 CEOs from all over the world. I was one of 16 from the U s we were 12 hours a day, um, from, from Sunday we checked in and we didn't leave until Friday afternoon. So it was, it was, it went by in a second because some of the best thought leaders from singularity peer, Deon Montas limb is male Ray Kurzwell. Um, and even people like the fauna O'Brien who's going to be actually traveling to Omaha. Um, and we're gonna be doing a workshop with her and a talk on blockchain and she's gonna talk about cryptocurrencies. Wait, when I have a date firmed up yet, but just continue to listen to wealth from wisdom or you can email me and we'll, we'll save your name and we'll make sure you get an invite. Our Carson and Carson group.com or you have any question? It's our Carson and Carson group.com.
Speaker 4:
39:56
Yeah. And we're happy to answer it. People don't understand how big that is. Cause that's, you take any of the largest employers here in the Omaha Metro area. They're not getting a singularity university professor to come out and talk about the what's happening there. So this is going to be fascinating. We'll share that with all of you because many of you have questions and we want to help answer them for you. But this is still, I use the phrase, it's still the wild wild west. It is. It is. It's dangerous. Be careful. People can make money like the gold rush
Speaker 3:
40:26
parallels because look at all the companies that aren't even around crazy. Valuations with the Internet survived. Yeah. So what was a way to actually hold Cisco did pretty good, you know, with the Internet, right? Yeah, you're right. Yeah. You know, trying to pick the right horse that's going to win out as much. It's big winner. Google was a big winner. Um, but pets.com or what do I mean? There's a whole bunch of them out there that, you know, we're flashing of plan. It never amounted to be anything.
Speaker 4:
40:55
So cryptocurrency is, you know, one else people are talking about burrata question we get and far listeners all the time. It is, they want advice on what do we think about the market? So they listened to the TV, CNBC, whatever it is. Um, you've been fortunate, you've been on Fox business several times here last couple of weeks, sharing your insights and what's going on. And you know, as we think about that, it's been an interesting run up here in [inaudible] 17 and I use the B word. I actually call it boring because there's not a lot going on. Historically, there's been over 50 trading days a year where the market moves up 1% or down 1% every day. Last year, you know, I was talking to our chief investment officer, he said there was seven, seven. So there's just no volatility and that's why I call it boring. But that's going to come back at some point once an event happens or things go on.
Speaker 4:
41:45
So as we look out at the future, yeah, the tax reforms. Great. Um, yeah, the economy is looking pretty good, but there's also some significant potential headwinds on the horizon. So one of the things that I thought was interesting, he is how do you frame that in a way that is understandable or consumable for everyone? Um, and so we have a chief investment officer's name, Scott Colby. They actually put together a really cool forecast event that's being broadcast on January 23rd. So again, if you want to participate in that and listen, just leave us your name at eight, eight eight four one nine 85 13 and you can participate in that type of event.
Speaker 3:
42:22
No, I love it. By the way, I saved this quote from buffet. He said, a buffet said, and by the way, he was on the news this week. We'll talk about that in a second. But pessimists about the United States are out of their mind. Um, he said the Dow, he expects the Dow to be over 1 million in a hundred years. And at the time the Dow is at 20 2003 70 and he's right. I mean, I don't know about a million and I don't know about a hundred I won't be around to figure it out, but I think people are insane when they bet against the market and that's where in behavior, because in the short run you do something, it goes down, you get out. We see a lot of people coming to us today that got into cash back during the financial crisis, you know, think about, and then they're just terrified that they're going to do it. Repeat it all over again to see what we're emotional rollercoaster getting into the top, selling out the bottom, doing it all over again, destroying wealth and that's where really having a game plan that makes sense for you and your family index, what's your number that you need to hit all your goals and objectives?
Speaker 4:
43:24
I'm sure there are listeners today that pulled money out in the November election of 2016 and after the election happened, so they're sitting in cash today and going, I cannot believe I just missed the run up that happened post that election. That doesn't mean they need, there was another waiting for a bottom. That doesn't mean it's going to happen. They just need to come in at the right point for them. It's more important for them to be in the market than trying to time the market
Speaker 3:
43:47
correctly. I agree 100% and we've been talking about a lot of things today, Paul, but one of them is you know, saving for retirement. That's the easy part. Now you've got to make great decisions in, it's what you keep, not what you accumulate and how you can reduce the amount of taxes, fees and expenses, all these different fit Paul's yeah, pitfalls that await you, that can just make such a difference in the way you either can or can't be able to retire. And we've got answers to all of these questions and a lot more. With our five step master retirement plan we make, it's simple and it's straightforward and we'll focus on the five strategies that can help you make the most out of every dollar you save for retirement. Our operators are standing by eight eight eight four nine 85 13 that's eight eight eight four nine 85 13 also, you like to attend the tax event, the forecast event. More information on the crypto currency. Give us a call to eight eight eight four nine 85 13 or simply email me. You've got a question or you want information on anything that we're talking about. It's ourCarson@carsonwealth.com that's our Carson and Carson wealth.com. Get a second opinion. You don't have to do anything with it, but the calm an informed investor. I'm Ron Carson with Paul West and you've been listening to wealth from 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
Okay, and here's the legal Mumbo jumbo. The opinions voiced and wealth 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 SCC registered investment advisor.