October 14, 2025 • 15 mins
Scott Brown with Edgewater Family Wealth first answers questions from the members of the show before explaining if your firm is “Vertically Integrated," and what that means and why it matters.
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Episode Transcript
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Speaker 1 (00:04):
That is tony as hells. Congratulations. My son warned to
step on our bed and then he ran off the
edge of it and landed on his head, and now
he's an accountant. That's true. Okay, that was fun with
(00:25):
us nights evil out.
Speaker 2 (00:28):
Hang you, buddy, don't say that word.
Speaker 3 (00:29):
You almost said.
Speaker 4 (00:31):
Seven seven zero three. You want to you text us,
don't forget cash. C Ash is your six o'clock keywork.
Get over to real radio dot of him and send
that away for your chance in a thousand bucks.
Speaker 2 (00:42):
I'm Jim. There's deb Hello, Brian Holmes here today with us,
which we greatly appreciate. Saus that he's here as well.
That is true. Let's do It's only money, oh, perd
People passionate about planning for the future, rise above investment
myth to build. Isn't that really just common sense financial advice?
(01:07):
Oh okay, dude's all money.
Speaker 4 (01:11):
Wis Scott thrown from family goodbody's got bridwitterphilllywealth dot com
a fiduciary in town for thirty eight plus years, making
sure that your money is gonna last you a long time,
and to teach you a little bit how to manage
it a little bit better, skint. How you doing, buddy,
Oh as good as mic on here?
Speaker 2 (01:32):
Yeah, my fault, my fault. You know, Ryan, we've been
together a long time. Come on, yeah, you know what
you did? They spend years now.
Speaker 3 (01:43):
Yeah, I'm excited Ryan's here, right, you know its scotten
so long.
Speaker 2 (01:47):
I'm very exciting. Yeah, the o g He's the greatest,
is the greatest. Grind's like my man there for sure.
Speaker 3 (01:52):
I've made a lot of bad financial scisions since the
last time.
Speaker 2 (01:55):
I say, yeah, we'll talk about that later.
Speaker 4 (01:57):
He was telling me about it, and I gotta tell y'all,
they are really bad.
Speaker 2 (02:01):
They are like comically bad. I don't even know about
ship by that earlier. Oh yeah, no, it's bad.
Speaker 3 (02:07):
I do my own investing, and for a minute, I
seem like a genius, to be.
Speaker 2 (02:11):
Perfectly honest with you.
Speaker 3 (02:13):
And that's when I was doing It's Only Money podcast
with Scott and I was like, look at me, Scott,
I'm doing so good. And then since then, uh, it
turns out that I have no idea what I'm doing
and I shouldn't be allowed to have access to my
money at all, which is what I.
Speaker 2 (02:27):
Told you from the get going. All right, you're right. Yeah,
you'll listen this time. I mean, there's no better endorsement
than that, right man. Like I was listening to him
and I was killing it. Yeah, I stopped and now
it sucks. Now it's killing me. Yeah. It turns out
options are a bad option for me. Yeah, yeah. Yeah.
Speaker 4 (02:43):
Scott drops by on Tuesdays around this time to talk
about things happening in the world of finance and how
you can make your life better by tending to your
money a little bit better. We do have some live
events coming up soon. We'll talk about those in a
little bit. We also have a question from the listeners
as well. How you doing, buddy, I'm doing awesome. Good,
Good to be in the studio, Good to see everybody.
Speaker 2 (03:01):
Yeah. So we had a question last week.
Speaker 5 (03:02):
Somebody said, what I think the question was, I don't
have access to a standard four oh one K What
I assume. What I assume they meant is their employer
doesn't offer one, and that there's about thirty percent, thirty
to forty percent of employers who don't, which is unfortunate.
So the question if we answered that question, which is
I work somewhere, I get a W two, but I
don't have a four oh one K. Obviously, the iray
(03:24):
is a great option for you. You can put up
to seventy five hundred dollars a year into your own IRA.
The traditional IRA is deductible, as everybody knows, or you
can do a roth IRA, which is not deductible, but
your assets grow tax free forever. So you know, you
could choose from one of those two options. You can
go to your local bank, your credit union, your local brokerage, whatever.
There's numerous places you can open that up. The other
(03:45):
point to maybe make their is if you're self employed,
you have your own plumbing business, your own electrical contract
or whatever it is you do, you poor concrete, whatever
the thing may be, you may say, well could I
have my own four A one K? And surprisingly the
answer is yes, you can develop your own four.
Speaker 2 (03:59):
O one K. There solo ks out there.
Speaker 5 (04:01):
There's a step program, a simplified employee pension program. These
are all available through your local again brokerage firm, your bank,
or your credit union. So if you feel like, well,
I don't have access to these things, you can pretty
much mimic at mimic that effect basically with a four
oh one K on your own if you're self employed,
or through an IRA or a roth IRA if you're
(04:22):
employed but don't have access.
Speaker 4 (04:23):
Right right and in IRA, when you start putting money
in that thing, is that is that a withdrawal or
do you have to do that yourself? Do you set
that up to your employer, like, Hey, I've opened up
an IRA, and can you do that for people? Like
if they came to you and wanted to do that?
Is that something you do? I'm not one hundred percent
sure on that. Yeah, one hundred percent.
Speaker 2 (04:37):
We can do that.
Speaker 5 (04:38):
And in fact, that's how my career was built. You know,
back in the day you could only put two back
in nineteen eighty seven, when I started one hundred years ago,
you can only put two thousand dollars a year into
an IRA. And I did a lot of that. It
was one hundred and sixty seven dollars a month. I
know it by heart right that number has improved or
increased since that time, So yes, you can again, you can.
Speaker 2 (04:58):
You can set it up.
Speaker 5 (05:00):
People used to do it through an auto draft, like
I know when I started out in business, I just
did an auto draft from my bank account into my
IRA every month. That way, I knew I would do it,
sure right, it was gone. I couldn't bring it back,
and I couldn't touch it until I was fifty nine
and a half, which I thought was a long way away.
Now that I'm sixty, apparently it isn't as far away
as it used to be.
Speaker 2 (05:19):
In fact, I passed. I learned that's young. Yeah, thank
you making up for ground there.
Speaker 5 (05:24):
So yeah, So the reality is you can do that,
and you should do that if you don't have access
to one through your employee.
Speaker 4 (05:32):
You know, we were talking a little bit earlier before
the show and you were like, I want questions from
you guys, right, yeah, and I actually do have a
question for you. I'm not gonna put you on the spot,
but I do have an interesting question for you because
when you're online, and you know, we've talked about this
a lot. People go online, they go on their Instagram
and they'll see people who do the you know, I'm
a financial advisor, formal financial advisor. Here's what I would
(05:52):
do if I had two million dollars I wanted to
do this, blah blah blah blah blah. One of the
things I hear over and over and over these days
is taking your Social Security benefit at sixty two years
old and not waiting till a full benefit of sixty
seven and a half. For people my age, people a
little bit younger than me, it's different. And they keep
making these arguments about how you take the benefit early,
(06:13):
and it is a gross cut of benefit. Sure, Now,
when you hear stuff like that as a fiducia air
and somebody's been doing this, damn near forty years of
your life. When you hear stuff like that, and this
is for people who go online and see the same stuff,
that's really what we're trying to kind sepit Right, you.
Speaker 2 (06:27):
See it as well? Right, what do you when you
see stuff like that? Is any of that valid? Scott?
Speaker 4 (06:32):
Or are are they trying to just sell you something?
What is the purpose that people would say that for?
Speaker 2 (06:37):
Is it true?
Speaker 5 (06:38):
I think that what it is is trying to buck
traditional wisdom. I think somebody's saying, I'm clever, I have
discovered that it's better to take it early. And the answer, really,
the reality is there.
Speaker 2 (06:48):
Is no better. Right.
Speaker 5 (06:49):
If you want to know when to take it, tell
me when you're gonna die, right, if you can tell
me what day you're gonna die, I can tell you
exactly when to take your social security. You're a genius,
right right, If you plan on going parachuting without a
parachute it on a particular day, then that we will
determine how to best take your social security. Short of that,
I have always subscribed to the idea of you know,
and we've gone through this period of time where mortalities increase.
(07:11):
We're all living longer. You know, the average person lives
to be, you know, eighty eighty one. It's not uncommon
for somebody to live to be ninety or one hundred.
The argument I think people are now making, and I'm
not saying it's totally invalid. I think the argument they're making, well,
if from sixty to seventy or sixty to seventy five,
those are your optimal years health wise in terms of
your retirement years, right once you get around eighty or less, mobile,
(07:33):
we're gonna travel less. So I think that's a valid
thing to think about. I think it's a fair thing.
But you know, if you're a female, the odds are
you're going to live well into your mid eighties, right,
so I think that you need to think about the
reduction in your income over that period of time. And yes,
I think on average, if you don't live to be
past say age seventy eight or seventy seven, you probably lost.
(07:55):
But you're also dead and don't care, right, so you're
not gonna have any regrets at that point. So I
would say again, look at the mortality of your family.
If you got if your mom's ninety three and your
dad's ninety two and they're still driving around and doing
stuff and playing shuffle board or whatever they're doing, you
probably want to hold out.
Speaker 2 (08:11):
Right.
Speaker 5 (08:11):
Conversely, if people and your family die it's sixty eight
on a regular basis, I think it makes sense to
consider taking it early. I don't one size does not
fit all. I will tell you the conventional wisdom in
my career has always been to wait and get the
maximum benefit. I know that now Instagram and places like that,
you'll find people saying the conventional wisdom is wrong, and
a lot of that I will tell you just to
get attention.
Speaker 2 (08:31):
Yeah.
Speaker 5 (08:32):
The reality is it varies, and it depends on mortality
and what's your expectations for your life span.
Speaker 4 (08:38):
And one of the reasons I wanted you to say
that is you know you're at forty years in this business.
You've been successful for forty years at doing this, having
people who listen to the show and are on social
media se stuff like this. I wanted somebody with a
clarification that would really do it without really wanting.
Speaker 2 (08:54):
Anything for it, because you're right.
Speaker 4 (08:55):
I mean, obviously it says, you know, go to my
bio or go go and click below, you know out
more about what I'm saying and what I'm doing and stuff.
Speaker 2 (09:02):
So it's obviously a pitch.
Speaker 4 (09:03):
I just want people to understand when they see and
hear stuff on Instagram, TikTok, whatever the case may be,
they probably should do some research on that from people
who have actually done this, from people for many, many years.
Speaker 2 (09:12):
Yeah, Ryan, Yeah, two questions.
Speaker 3 (09:16):
You're talking about iras four one ks, Like I get
a four oh one K with my company here, right,
and I put money into that. Am I locked in
with like Iheart's version or could I go to like
Edgewater Family Wells and take it there?
Speaker 2 (09:29):
So there's a maybe, So let me answer that for you.
Speaker 5 (09:32):
So probably not for you because you're younger, right, So
once somebody most four oh one k's I won't say all,
but most somewhere around age fifty five sixty sixty five.
Those are the generally the target areas where they will
allow you to roll your money out. So let's say
hypothetically you got five hundred thousand dollars in your four
oh one K. You been a great saver. You're sixty two,
(09:52):
and you say, you know, I'm getting close to the
end zone here, I'm in the red zone.
Speaker 2 (09:56):
I want to make sure I'm doing exactly what I
need to do.
Speaker 5 (09:58):
I'm going to give the money to a financial advisor
that I trust and believe in. You can take the
money out of your four o one K. Every document
is different, right, so there's no rule about when you
can or cannot do that. It's up to the individual plans.
So if for the people listening, if you're sixty and
you say, you know, I'd really like to move my
money to my financial advisor. This four oh one CA
(10:18):
has been great to me, but I think I need
more options, or I need more oversight, or whatever your
reasons are. You would go to your HR person say
what does the document allow? Because each document is different
and they can tell you yes. And there are many
plans here in town. Disney Darden Lockey that allow a
person to take their money out at age fifty five
or sixty and move it to their financial advisors.
Speaker 2 (10:39):
So yes, you can do that.
Speaker 5 (10:40):
Younger age is probably prior to the age of sixty
in most cases maybe definitely prior to the age of fifty.
Speaker 4 (10:46):
You probably can't let me. Let me add on that
real quick, So let's let you do that. I'm at
that age, right, Let's say I look and I go,
you know what, it's about that time. I'm going to
go give my money to Scott. Do I still keep
contributing to my four oh one k? Here oncy? You
just still keep and I just give you the mass
bulk of it, invest it and then start providing dividends
type thing.
Speaker 2 (11:02):
How does that? What happens after I give it to you? Typically?
Speaker 5 (11:04):
So I just I just dealt with somebody from Disney.
They came in and they had a million dollars in
a four oh one K. They've done, obviously an awesome
job of saving. But sometimes it's one hundred grand, sometimes
it's fifty grand, right, but this person happened to have
a million. They took the million out, we invested it
because they've been my client for twenty years and they've
been waiting to do this.
Speaker 2 (11:18):
Well, did they draw snow white? They did? It was
Walt Disney himself. Yeah, like almighty.
Speaker 5 (11:25):
So you'd be surprised how many million dollars four one
k's there are out there.
Speaker 2 (11:30):
But so what.
Speaker 5 (11:31):
Continues to happen is they continue to contribute, Disney continues
to match that contribution, and then when they finally leave
for good, they're gonna take whatever's left. The twenty or
thirty or fifty or whatever is left at that point
will finally come over. But in the meantime, to make
their planning more thorough in detail, they've moved the money
over to us because we do all of their planning
for them. So absolutely you can do that, and I'm
(11:53):
not saying you should always do that. That's up to
you and your comfort with your advisor or your comfort
with the four oh one k. But it has to
do with your plan, right, You've said that from the
very onset of this segment. Really it has to do
with what you want. The hardest question in humanity is
what do you really want? So what you would go
is like I would come to you and I'd go, hey, look,
you know I've got this much my four oh one k.
Speaker 4 (12:12):
This is what I'd like to do, you know, for
the rest of my existence. What's the plan, and then
you can obviously advise on what we should do from
that point.
Speaker 5 (12:19):
Yeah, I mean, I think it makes it easier for
the advisor, not that you need to make it easier
on the advisor, but it does help them do what
they do because now they're controlling the assets and where
the money. If I say to you, you need to
earn six percent or four percent or whatever the number is,
and we've developed a plan to do that, but inside
the four oh one k I really can't match.
Speaker 2 (12:35):
The asset allocation I've designed for you.
Speaker 5 (12:38):
Then obviously it makes sense for me to to us
to at least discuss moving that money.
Speaker 2 (12:42):
Over to the allocation we've built over here. Yeah. Wow,
that's crazy.
Speaker 4 (12:45):
Scott Brown in with us Edgeward Family Wealth Edgewarterfamilywealth dot com.
Speaker 3 (12:49):
Yes, Ryan, So I get a lot of my financial
news from TikTok of course, of course, and there are
a lot of scammers. There's a lot of people out
there that like every time that day have something, you
go click.
Speaker 2 (12:58):
On their profile. They're selling some kind of class looking
at you tyler pis Yeah, well that guy's in a
lot of trouble right now. Good. But uh, like they're
always offering like numb like a number.
Speaker 3 (13:09):
They'll be like, I can get you ten percent, Like
what is the predatory number that I should be looking
out for. It's like somebody's saying, like, hey, I'm doing
this plan ten percent every time, guaranteed. I mean because
you just said six percent, yeah, which is like like.
Speaker 2 (13:21):
What I from my understand, pretty normal number. When does it?
When do you get great? When do the red flags
go out? That's a great question, by the way.
Speaker 5 (13:27):
Well, first of all, any guaranteed number, if somebody says
I can get you six percent or eight percent or
ten percent guaranteed, go the other direction, right, because that
anybody who's this, we don't live in a guaranteed world period, right.
Interest rates go up and down, bank rates go up
and down, the Fed changes, policy changes, markets change. We
know historically the S and P five hundreds earned about
(13:47):
seven or eight percent a year for eight hundred years,
come right now. So so if so if somebody says
I'm gonna get you ten your alarms ought to be
going off in your head.
Speaker 2 (13:56):
Right. Well, wait, a minute.
Speaker 5 (13:57):
If the stock market itself has earned seven or eight percent,
and you're telling me you can get that, obviously that's
not This is why I tell people all the time.
People say, well, Scott, you'll tell me when to buy
and when to sell, right, I'm like, if do you think.
Speaker 2 (14:08):
If I knew that?
Speaker 5 (14:09):
First of all, if I knew exactly when to buy
and exactly when to sell, I would be living on
my private island right now. I would not be talking
to you. So again, oh you're still talculous. Come on,
I'm I might talk. I talk to them. So the
reality is anybody who's guaranteeing listen the old adage. I
know it's a cliche. If it sounds too good to
(14:30):
be true, it probably is. And I know there's a
ton of garbage on TikTok. I know there's a ton
of garbage on Instagram. There's no absolutes. That's the one
thing that frustrates me when somebody says this is good
or this is bad, or this is going to be
guaranteed and this is going to be terrible. Listen, it's
a variable world. The markets are variable. We know over
the long term how things turn out, but guaranteeing somebody
(14:51):
a number that's like eight or ten or twelve or
fifteen something ridiculous?
Speaker 2 (14:55):
Is Bernie made off?
Speaker 3 (14:56):
All?
Speaker 4 (14:56):
Right, let's we don't get a few minutes. And I
know we want to talk about vertical integration. So what
is vertical integration and why would we need to know that?
Speaker 5 (15:03):
Yeah, so if you're if you have an investment firm
that on average, most investment firms are not vertically integrated.
Local firms are just not. And what that means is
when you go to a financial advisor, they're perfectly nice people.
I'm not I have many friends in the business. They're
wonderful people. But they are salespeople, right, So they're selling
you a mutual fund. They come in and say you
need to earn eight and then they pick a bunch
of mutual funds and then they put you in those
mutual funds or ETFs or annuities or whatever it is, right,
(15:25):
and then they go on about their business. They're not
vertically integrated. And what I mean by that is that
my firm, we manage the money, we don't use products,
we don't sell mutual funds, we don't sell It happens
occasionally for reasons that I can't go into, but on
average we don't do that. So the reason that's important
is because if we manage the money in house, that
(15:45):
reduces the cost to the investor.
Speaker 2 (15:47):
Right.
Speaker 5 (15:47):
So, if you go to an advisor and they say
I'm going to charge you one percent, okay, cool, But
then they're also going to put you in some product.
That is tony as hells. Congratulations. My son warned to
step on our bed and then he ran off the
edge of it and landed on his head, and now
he's an accountant. That's true. Okay, that was fun with
(00:25):
us nights evil out.
Speaker 2 (00:28):
Hang you, buddy, don't say that word.
Speaker 3 (00:29):
You almost said.
Speaker 4 (00:31):
Seven seven zero three. You want to you text us,
don't forget cash. C Ash is your six o'clock keywork.
Get over to real radio dot of him and send
that away for your chance in a thousand bucks.
Speaker 2 (00:42):
I'm Jim. There's deb Hello, Brian Holmes here today with us,
which we greatly appreciate. Saus that he's here as well.
That is true. Let's do It's only money, oh, perd
People passionate about planning for the future, rise above investment
myth to build. Isn't that really just common sense financial advice?
(01:07):
Oh okay, dude's all money.
Speaker 4 (01:11):
Wis Scott thrown from family goodbody's got bridwitterphilllywealth dot com
a fiduciary in town for thirty eight plus years, making
sure that your money is gonna last you a long time,
and to teach you a little bit how to manage
it a little bit better, skint. How you doing, buddy,
Oh as good as mic on here?
Speaker 2 (01:32):
Yeah, my fault, my fault. You know, Ryan, we've been
together a long time. Come on, yeah, you know what
you did? They spend years now.
Speaker 3 (01:43):
Yeah, I'm excited Ryan's here, right, you know its scotten
so long.
Speaker 2 (01:47):
I'm very exciting. Yeah, the o g He's the greatest,
is the greatest. Grind's like my man there for sure.
Speaker 3 (01:52):
I've made a lot of bad financial scisions since the
last time.
Speaker 2 (01:55):
I say, yeah, we'll talk about that later.
Speaker 4 (01:57):
He was telling me about it, and I gotta tell y'all,
they are really bad.
Speaker 2 (02:01):
They are like comically bad. I don't even know about
ship by that earlier. Oh yeah, no, it's bad.
Speaker 3 (02:07):
I do my own investing, and for a minute, I
seem like a genius, to be.
Speaker 2 (02:11):
Perfectly honest with you.
Speaker 3 (02:13):
And that's when I was doing It's Only Money podcast
with Scott and I was like, look at me, Scott,
I'm doing so good. And then since then, uh, it
turns out that I have no idea what I'm doing
and I shouldn't be allowed to have access to my
money at all, which is what I.
Speaker 2 (02:27):
Told you from the get going. All right, you're right. Yeah,
you'll listen this time. I mean, there's no better endorsement
than that, right man. Like I was listening to him
and I was killing it. Yeah, I stopped and now
it sucks. Now it's killing me. Yeah. It turns out
options are a bad option for me. Yeah, yeah. Yeah.
Speaker 4 (02:43):
Scott drops by on Tuesdays around this time to talk
about things happening in the world of finance and how
you can make your life better by tending to your
money a little bit better. We do have some live
events coming up soon. We'll talk about those in a
little bit. We also have a question from the listeners
as well. How you doing, buddy, I'm doing awesome. Good,
Good to be in the studio, Good to see everybody.
Speaker 2 (03:01):
Yeah. So we had a question last week.
Speaker 5 (03:02):
Somebody said, what I think the question was, I don't
have access to a standard four oh one K What
I assume. What I assume they meant is their employer
doesn't offer one, and that there's about thirty percent, thirty
to forty percent of employers who don't, which is unfortunate.
So the question if we answered that question, which is
I work somewhere, I get a W two, but I
don't have a four oh one K. Obviously, the iray
(03:24):
is a great option for you. You can put up
to seventy five hundred dollars a year into your own IRA.
The traditional IRA is deductible, as everybody knows, or you
can do a roth IRA, which is not deductible, but
your assets grow tax free forever. So you know, you
could choose from one of those two options. You can
go to your local bank, your credit union, your local brokerage, whatever.
There's numerous places you can open that up. The other
(03:45):
point to maybe make their is if you're self employed,
you have your own plumbing business, your own electrical contract
or whatever it is you do, you poor concrete, whatever
the thing may be, you may say, well could I
have my own four A one K? And surprisingly the
answer is yes, you can develop your own four.
Speaker 2 (03:59):
O one K. There solo ks out there.
Speaker 5 (04:01):
There's a step program, a simplified employee pension program. These
are all available through your local again brokerage firm, your bank,
or your credit union. So if you feel like, well,
I don't have access to these things, you can pretty
much mimic at mimic that effect basically with a four
oh one K on your own if you're self employed,
or through an IRA or a roth IRA if you're
(04:22):
employed but don't have access.
Speaker 4 (04:23):
Right right and in IRA, when you start putting money
in that thing, is that is that a withdrawal or
do you have to do that yourself? Do you set
that up to your employer, like, Hey, I've opened up
an IRA, and can you do that for people? Like
if they came to you and wanted to do that?
Is that something you do? I'm not one hundred percent
sure on that. Yeah, one hundred percent.
Speaker 2 (04:37):
We can do that.
Speaker 5 (04:38):
And in fact, that's how my career was built. You know,
back in the day you could only put two back
in nineteen eighty seven, when I started one hundred years ago,
you can only put two thousand dollars a year into
an IRA. And I did a lot of that. It
was one hundred and sixty seven dollars a month. I
know it by heart right that number has improved or
increased since that time, So yes, you can again, you can.
Speaker 2 (04:58):
You can set it up.
Speaker 5 (05:00):
People used to do it through an auto draft, like
I know when I started out in business, I just
did an auto draft from my bank account into my
IRA every month. That way, I knew I would do it,
sure right, it was gone. I couldn't bring it back,
and I couldn't touch it until I was fifty nine
and a half, which I thought was a long way away.
Now that I'm sixty, apparently it isn't as far away
as it used to be.
Speaker 2 (05:19):
In fact, I passed. I learned that's young. Yeah, thank
you making up for ground there.
Speaker 5 (05:24):
So yeah, So the reality is you can do that,
and you should do that if you don't have access
to one through your employee.
Speaker 4 (05:32):
You know, we were talking a little bit earlier before
the show and you were like, I want questions from
you guys, right, yeah, and I actually do have a
question for you. I'm not gonna put you on the spot,
but I do have an interesting question for you because
when you're online, and you know, we've talked about this
a lot. People go online, they go on their Instagram
and they'll see people who do the you know, I'm
a financial advisor, formal financial advisor. Here's what I would
(05:52):
do if I had two million dollars I wanted to
do this, blah blah blah blah blah. One of the
things I hear over and over and over these days
is taking your Social Security benefit at sixty two years
old and not waiting till a full benefit of sixty
seven and a half. For people my age, people a
little bit younger than me, it's different. And they keep
making these arguments about how you take the benefit early,
(06:13):
and it is a gross cut of benefit. Sure, Now,
when you hear stuff like that as a fiducia air
and somebody's been doing this, damn near forty years of
your life. When you hear stuff like that, and this
is for people who go online and see the same stuff,
that's really what we're trying to kind sepit Right, you.
Speaker 2 (06:27):
See it as well? Right, what do you when you
see stuff like that? Is any of that valid? Scott?
Speaker 4 (06:32):
Or are are they trying to just sell you something?
What is the purpose that people would say that for?
Speaker 2 (06:37):
Is it true?
Speaker 5 (06:38):
I think that what it is is trying to buck
traditional wisdom. I think somebody's saying, I'm clever, I have
discovered that it's better to take it early. And the answer, really,
the reality is there.
Speaker 2 (06:48):
Is no better. Right.
Speaker 5 (06:49):
If you want to know when to take it, tell
me when you're gonna die, right, if you can tell
me what day you're gonna die, I can tell you
exactly when to take your social security. You're a genius,
right right, If you plan on going parachuting without a
parachute it on a particular day, then that we will
determine how to best take your social security. Short of that,
I have always subscribed to the idea of you know,
and we've gone through this period of time where mortalities increase.
(07:11):
We're all living longer. You know, the average person lives
to be, you know, eighty eighty one. It's not uncommon
for somebody to live to be ninety or one hundred.
The argument I think people are now making, and I'm
not saying it's totally invalid. I think the argument they're making, well,
if from sixty to seventy or sixty to seventy five,
those are your optimal years health wise in terms of
your retirement years, right once you get around eighty or less, mobile,
(07:33):
we're gonna travel less. So I think that's a valid
thing to think about. I think it's a fair thing.
But you know, if you're a female, the odds are
you're going to live well into your mid eighties, right,
so I think that you need to think about the
reduction in your income over that period of time. And yes,
I think on average, if you don't live to be
past say age seventy eight or seventy seven, you probably lost.
(07:55):
But you're also dead and don't care, right, so you're
not gonna have any regrets at that point. So I
would say again, look at the mortality of your family.
If you got if your mom's ninety three and your
dad's ninety two and they're still driving around and doing
stuff and playing shuffle board or whatever they're doing, you
probably want to hold out.
Speaker 2 (08:11):
Right.
Speaker 5 (08:11):
Conversely, if people and your family die it's sixty eight
on a regular basis, I think it makes sense to
consider taking it early. I don't one size does not
fit all. I will tell you the conventional wisdom in
my career has always been to wait and get the
maximum benefit. I know that now Instagram and places like that,
you'll find people saying the conventional wisdom is wrong, and
a lot of that I will tell you just to
get attention.
Speaker 2 (08:31):
Yeah.
Speaker 5 (08:32):
The reality is it varies, and it depends on mortality
and what's your expectations for your life span.
Speaker 4 (08:38):
And one of the reasons I wanted you to say
that is you know you're at forty years in this business.
You've been successful for forty years at doing this, having
people who listen to the show and are on social
media se stuff like this. I wanted somebody with a
clarification that would really do it without really wanting.
Speaker 2 (08:54):
Anything for it, because you're right.
Speaker 4 (08:55):
I mean, obviously it says, you know, go to my
bio or go go and click below, you know out
more about what I'm saying and what I'm doing and stuff.
Speaker 2 (09:02):
So it's obviously a pitch.
Speaker 4 (09:03):
I just want people to understand when they see and
hear stuff on Instagram, TikTok, whatever the case may be,
they probably should do some research on that from people
who have actually done this, from people for many, many years.
Speaker 2 (09:12):
Yeah, Ryan, Yeah, two questions.
Speaker 3 (09:16):
You're talking about iras four one ks, Like I get
a four oh one K with my company here, right,
and I put money into that. Am I locked in
with like Iheart's version or could I go to like
Edgewater Family Wells and take it there?
Speaker 2 (09:29):
So there's a maybe, So let me answer that for you.
Speaker 5 (09:32):
So probably not for you because you're younger, right, So
once somebody most four oh one k's I won't say all,
but most somewhere around age fifty five sixty sixty five.
Those are the generally the target areas where they will
allow you to roll your money out. So let's say
hypothetically you got five hundred thousand dollars in your four
oh one K. You been a great saver. You're sixty two,
(09:52):
and you say, you know, I'm getting close to the
end zone here, I'm in the red zone.
Speaker 2 (09:56):
I want to make sure I'm doing exactly what I
need to do.
Speaker 5 (09:58):
I'm going to give the money to a financial advisor
that I trust and believe in. You can take the
money out of your four o one K. Every document
is different, right, so there's no rule about when you
can or cannot do that. It's up to the individual plans.
So if for the people listening, if you're sixty and
you say, you know, I'd really like to move my
money to my financial advisor. This four oh one CA
(10:18):
has been great to me, but I think I need
more options, or I need more oversight, or whatever your
reasons are. You would go to your HR person say
what does the document allow? Because each document is different
and they can tell you yes. And there are many
plans here in town. Disney Darden Lockey that allow a
person to take their money out at age fifty five
or sixty and move it to their financial advisors.
Speaker 2 (10:39):
So yes, you can do that.
Speaker 5 (10:40):
Younger age is probably prior to the age of sixty
in most cases maybe definitely prior to the age of fifty.
Speaker 4 (10:46):
You probably can't let me. Let me add on that
real quick, So let's let you do that. I'm at
that age, right, Let's say I look and I go,
you know what, it's about that time. I'm going to
go give my money to Scott. Do I still keep
contributing to my four oh one k? Here oncy? You
just still keep and I just give you the mass
bulk of it, invest it and then start providing dividends
type thing.
Speaker 2 (11:02):
How does that? What happens after I give it to you? Typically?
Speaker 5 (11:04):
So I just I just dealt with somebody from Disney.
They came in and they had a million dollars in
a four oh one K. They've done, obviously an awesome
job of saving. But sometimes it's one hundred grand, sometimes
it's fifty grand, right, but this person happened to have
a million. They took the million out, we invested it
because they've been my client for twenty years and they've
been waiting to do this.
Speaker 2 (11:18):
Well, did they draw snow white? They did? It was
Walt Disney himself. Yeah, like almighty.
Speaker 5 (11:25):
So you'd be surprised how many million dollars four one
k's there are out there.
Speaker 2 (11:30):
But so what.
Speaker 5 (11:31):
Continues to happen is they continue to contribute, Disney continues
to match that contribution, and then when they finally leave
for good, they're gonna take whatever's left. The twenty or
thirty or fifty or whatever is left at that point
will finally come over. But in the meantime, to make
their planning more thorough in detail, they've moved the money
over to us because we do all of their planning
for them. So absolutely you can do that, and I'm
(11:53):
not saying you should always do that. That's up to
you and your comfort with your advisor or your comfort
with the four oh one k. But it has to
do with your plan, right, You've said that from the
very onset of this segment. Really it has to do
with what you want. The hardest question in humanity is
what do you really want? So what you would go
is like I would come to you and I'd go, hey, look,
you know I've got this much my four oh one k.
Speaker 4 (12:12):
This is what I'd like to do, you know, for
the rest of my existence. What's the plan, and then
you can obviously advise on what we should do from
that point.
Speaker 5 (12:19):
Yeah, I mean, I think it makes it easier for
the advisor, not that you need to make it easier
on the advisor, but it does help them do what
they do because now they're controlling the assets and where
the money. If I say to you, you need to
earn six percent or four percent or whatever the number is,
and we've developed a plan to do that, but inside
the four oh one k I really can't match.
Speaker 2 (12:35):
The asset allocation I've designed for you.
Speaker 5 (12:38):
Then obviously it makes sense for me to to us
to at least discuss moving that money.
Speaker 2 (12:42):
Over to the allocation we've built over here. Yeah. Wow,
that's crazy.
Speaker 4 (12:45):
Scott Brown in with us Edgeward Family Wealth Edgewarterfamilywealth dot com.
Speaker 3 (12:49):
Yes, Ryan, So I get a lot of my financial
news from TikTok of course, of course, and there are
a lot of scammers. There's a lot of people out
there that like every time that day have something, you
go click.
Speaker 2 (12:58):
On their profile. They're selling some kind of class looking
at you tyler pis Yeah, well that guy's in a
lot of trouble right now. Good. But uh, like they're
always offering like numb like a number.
Speaker 3 (13:09):
They'll be like, I can get you ten percent, Like
what is the predatory number that I should be looking
out for. It's like somebody's saying, like, hey, I'm doing
this plan ten percent every time, guaranteed. I mean because
you just said six percent, yeah, which is like like.
Speaker 2 (13:21):
What I from my understand, pretty normal number. When does it?
When do you get great? When do the red flags
go out? That's a great question, by the way.
Speaker 5 (13:27):
Well, first of all, any guaranteed number, if somebody says
I can get you six percent or eight percent or
ten percent guaranteed, go the other direction, right, because that
anybody who's this, we don't live in a guaranteed world period, right.
Interest rates go up and down, bank rates go up
and down, the Fed changes, policy changes, markets change. We
know historically the S and P five hundreds earned about
(13:47):
seven or eight percent a year for eight hundred years,
come right now. So so if so if somebody says
I'm gonna get you ten your alarms ought to be
going off in your head.
Speaker 2 (13:56):
Right. Well, wait, a minute.
Speaker 5 (13:57):
If the stock market itself has earned seven or eight percent,
and you're telling me you can get that, obviously that's
not This is why I tell people all the time.
People say, well, Scott, you'll tell me when to buy
and when to sell, right, I'm like, if do you think.
Speaker 2 (14:08):
If I knew that?
Speaker 5 (14:09):
First of all, if I knew exactly when to buy
and exactly when to sell, I would be living on
my private island right now. I would not be talking
to you. So again, oh you're still talculous. Come on,
I'm I might talk. I talk to them. So the
reality is anybody who's guaranteeing listen the old adage. I
know it's a cliche. If it sounds too good to
(14:30):
be true, it probably is. And I know there's a
ton of garbage on TikTok. I know there's a ton
of garbage on Instagram. There's no absolutes. That's the one
thing that frustrates me when somebody says this is good
or this is bad, or this is going to be
guaranteed and this is going to be terrible. Listen, it's
a variable world. The markets are variable. We know over
the long term how things turn out, but guaranteeing somebody
(14:51):
a number that's like eight or ten or twelve or
fifteen something ridiculous?
Speaker 2 (14:55):
Is Bernie made off?
Speaker 3 (14:56):
All?
Speaker 4 (14:56):
Right, let's we don't get a few minutes. And I
know we want to talk about vertical integration. So what
is vertical integration and why would we need to know that?
Speaker 5 (15:03):
Yeah, so if you're if you have an investment firm
that on average, most investment firms are not vertically integrated.
Local firms are just not. And what that means is
when you go to a financial advisor, they're perfectly nice people.
I'm not I have many friends in the business. They're
wonderful people. But they are salespeople, right, So they're selling
you a mutual fund. They come in and say you
need to earn eight and then they pick a bunch
of mutual funds and then they put you in those
mutual funds or ETFs or annuities or whatever it is, right,
(15:25):
and then they go on about their business. They're not
vertically integrated. And what I mean by that is that
my firm, we manage the money, we don't use products,
we don't sell mutual funds, we don't sell It happens
occasionally for reasons that I can't go into, but on
average we don't do that. So the reason that's important
is because if we manage the money in house, that
(15:45):
reduces the cost to the investor.
Speaker 2 (15:47):
Right.
Speaker 5 (15:47):
So, if you go to an advisor and they say
I'm going to charge you one percent, okay, cool, But
then they're also going to put you in some product.
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