Episode Transcript
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Speaker 1 (00:07):
All right, good afternoon. Yet it is afternoon, well after
twelve on a Saturday in beautiful sunny skies and upstate
New York. Hopefully everybody's having a great Labor Day weekend
so far just the beginning. GI have two more days
if you're fortunate to have Monday off, So be careful,
(00:29):
don't drink and drive, enjoy yourself, but don't do foolish things.
But today I'm here, I'm live, and I'm going to
talk about a topic that we hear consistently with our
existing clients and also future clients prospective clients that come in,
(00:52):
And we're going to talk about this new world that
we live in on how do you turn your life
savings into a retire income plan. You know, we live
in a world today where most of us ninety percent
of us almost now do not have pension benefits, and
it's a kind of a scary landscape as far as
(01:14):
how do you create a retirement income distribution plan. So
hopefully today I'm going to enlighten you, give you some
ideas and concepts and how you can turn your life
savings and the money that you've accumulated over your lifetime
into a sustainable income stream to cover your expenses during
(01:39):
your retirement. You know, what we're starting to see, folks,
is that a lot of people are living a hell
of a lot longer than what they anticipated. I know
what the data says that our life expectancies are going down.
But I can tell you, as the president of the
Retirement Planning Group, and this is my forty third year
(02:00):
on it, we have a lot of clients in their
eighties and nineties and you would never know that they're
in their eighties and nineties. You would think that they're
in their sixties and seventies. So with that being said,
today our topic, I think is critical that you understand
that you need to develop a plan that has a
solid foundation for your income needs that could possibly last
(02:24):
for twenty five to thirty years. You could possibly be
in retirement longer than the number of years that you
were employed. So we'll talk a little bit about what
you desire as a retiree. But approximately forty percent of
(02:45):
American adults today forty which is staggering, report not having
a savings account for retirement. Forty percent. Nearly half of
all working Americans lack access to an employer sponsored retirement plan.
(03:09):
So what does that mean? That means that if you
do not have a sponsored employer retirement plan, you better
get a knock in and try to figure out how
you're going to do it yourself. The plumber, the electrician.
You know, I can go through the whole laundry list
of my family members that work, hard working savers that
(03:33):
don't work for XYZ Corporation, that have their own self
employed business. Twenty twenty five found that forty percent of
US adults do not have any money invested for retirement.
(03:54):
Forty So what does that mean? That means that you
better either get going or you're going to work for
the rest of your life. There's a lot of aryan
factors which we'll talk about today, but we're going to
talk about a guide for you. You know, I'm a
big believer, and I say this over and over again
(04:15):
every individual that comes into the retirement planning group, it's
the same common denominator. We say the same thing consistently.
We'll see, Dave, what do you think? What should we do?
What's our problem right now? And the answer to that
is pretty easy. It's always the same answer. You're flying
(04:37):
by the seat of your pants. You do not have
a what plan. You have no guideline. If I'm building
a house, I have a blueprint. If I'm going into
a football game, I have a game plan. If I'm
going into a basketball I have a game plan. You
have to have a strategy. You have to have a
(04:58):
game plan, and most of you will just fly by
the seat of your pants, and you'll wait to the
very end and you'll say, oh, geez, we better go
see Dave, or we've better go see Joe, or you
go see Bob or Pete or whoever it may be, Susan, Billy, Andrea,
and figure out how we're going to now build out
a plan that will last us throughout our golden years.
(05:21):
You're already behind the eight ball if you if that's
your plan after forty three years of doing it, you
have to determine, determine your specific retirement lifestyle and the
needs that you're going to have to have what we
call realistic income during your retirement years. We'll do a
(05:45):
guestimate of what your future expenses are going to be.
Think about just healthcare, folks, think about healthcare today. What
was healthcare five ten years ago versus what it is today?
What was your cost of goods and service? What was
your cost for your taxes? You have to make sure
(06:08):
that you can ensure to meet your needs with the
capital that you have accumulated over your lifetime. Sounds kind
of corny, right, but that's the bottom line. So you've
got to rely on a lot of sources. You're fortunate.
(06:30):
There's a huge wealth transfer that's going on right now,
estimated to be about eighty five trillion dollars of money
that will pass from the boomer generation to our client
or not to our clients, to our children and also
our grandchildren. So if you're early in the process, you
might be one of the lucky people that receives a
(06:53):
significant amount of wealth transfer. But if you're not, what's
your social security? Are you one of the fortunate people
that are out there that have pensions? Do you have
a retirement accounts either through your employer or ones that
(07:14):
you have set up yourself. And are your investments set
up in order to have financial stability? How much do
you have allocated in go go versustable and guaranteed? And
then finally, the last couple, you need to have a
(07:34):
sustainable withdrawal plan. You can't come in and say, listen, Dave,
I've got two hundred thousand dollars. I need to get
fifteen percent off of this. I need thirty thousand dollars
a year throughout my retirement in order to satisfy my needs. Okay,
and I need to fly to the moon and you
know what, I'm going to win lottery tonight. You have
(07:55):
to have realistic expectations and then finally, you got to
revisit your plan as you get closer to the time
that you're walking out the door. And I'll tell you, folks,
I'd like to say to you that everybody walks into
the retirement planning group, it's a panacea. We're able to
say to them, we're going to change your life and
(08:16):
we're going to make everything great. You're going to be
able to go out into retirement when you want to.
That's not the case. Sometimes the screwdriver me, that's my nickname,
the Screwdriver. I have to go in and tell people
things that they don't want to hear. I have to
tune them up. And when I say tune them up,
I have to tell them things that they don't want
(08:37):
to hear. We've all been there. Conversations with our children
with her family, with our loved ones, with our employees.
You have to be realistic as far as what your
goals and what your objectives are. And there's a lot
of other variables. Divorce very high divorce rate for people
that are about ready to retire. The divorce, they've been
(09:00):
separated for a long period of time. They get together
for a period of time and he says to her
and she says to him, eh, I don't think I
want to spend as much time with you as say
we're doing right now. We're in the camp that you
should stagger your retirements. You should have one of the
(09:21):
spouses retire, then six eight ten, twelve months later the
other spouse passes onto a retirement. So we come back,
we're going to be talking about our step by step
guide to building retirement income. I'm Dave Kopec. This is
the Retirement Ready Show. We'll be back after this quick message.
(09:51):
Are you ready for retirement or just hoping it works out?
Don't leave your future to chance. At the retirement Planning Group,
we hope you create a personalized retirement pl so you
can relax knowing you are prepared take action today called
eight eight eight five eight zero one nine one nine.
That's eight eight eight five eight zero one nine one nine,
or visit us at our website rpgretire dot com to
(10:14):
schedule your complementary consultation. Your future will say thank you.
You've spent a lifetime saving for retirement. Now it's time
to make that money work for you. Here's the secret
most people miss. You have to create your own retirement
income plant. Social security is not enough, pensions are rare.
You need a strategy that turns savings into monthly income
(10:35):
that will last a lifetime. At the Retirement Planning Group,
we build customized income distribution poins so you can retire
with confidence, retire smart, live well. Call eight eight eight
five eight zero nine one nine for your complementary consultation.
We are living through the greatest wealth transfer in the
history of mankind. Trillions of dollars of wealth will change
(10:55):
hands from one generation to the next. Your money to
our beloved children and ranchl Are you ready? Your future
is written by chance, it's written by action. Now's the
time to build your plan, protect your assets, and position
yourself for the opportunity. Don't wait, take action. The future
favors those that are prepared. Call eighty eight five eight
(11:16):
zero one nine one nine. That's eighty eight five eight
zero one nine one nine. Retirement is in a Sunday thing.
It's a now thing. Whether you're just starting out or
nearing the finish line. The best time to build your
retirement plan is today. Don't wait for the right moment.
Let's create a plan that works for you. Secure your
(11:36):
future and the freedom that comes with it. Call my
office today and take action. Eighty eight five eight zero
one nine one nine. That's eighty eight five eid zero
one nine one nine, and your future will thank you.
(11:59):
All right, good afternoon, on this beautiful Saturday in Upstate
New York, August thirtieth, it's hard to believe that we're
almost through the summer. Tuesday, the rubber hits the road,
a lot of the kids go back to school, a
lot of my wife's friends are going back to teaching,
and of course, the financial services industry will be full
(12:23):
throttle after this holiday weekend. So enjoy it. Enjoy this
absolutely spectacular weather that we're going to have an Upstate
over the next few days, and get ready, get ready
to do some things in order to put yourself in
a better position for your retirement. So today, as I
sit here and I talk about creating retirement income plans,
(12:47):
one of the things that I want to overemphasize procrastination
is not your friend, folks. Procrastination is not your friend.
You know. I hear people say to me over and
over again, I know I should have done this sooner.
I know I've listened to you Dave for years on
the radio, and I should have picked up the phone
and called you. Well, my answer to you is one,
(13:13):
but it's easy sometimes to sit on the fence and
do nothing. The do nothing plan. The do nothing plan,
really you have no consequence right until all hell breaks loose.
So we help you determine your retirement goals. Right. We
have a three appointment process at the retirement at the
(13:37):
retirement planning group, we have the first meeting is to
try to figure out who you are, what you are,
and what you want to do. The second appointment is
these are ideas and concepts that you should probably consider
in some of our suggestions. And then the third typically
is when we put the rubber to the road and
(13:58):
we actually take action, take action, start building out your plan.
So establishing your retirement goals is the first thing and
creating not only your overall retirement plan, but the most
critical one is your retirement income distribution plan. So you
(14:18):
got to think about what you want with your retirement,
what it looks like, and here are some things that
you need to start thinking about. At what age? At
what age do you want to retire? Everybody wants to
retire earlier. Right ken you retire, there's your genetics ready
(14:42):
for you to walk out the door and play golf,
go to the beach, do all the things around the
house that you've been procrastinating about. Some people can't do it.
So at what age do you think you can retire
and feel content and happy? Second, what kind of lifestyle
do you envision for yourself during your retirement years? Is
(15:04):
it here in upstate New York, throughout the Capitol District region?
Is it outside Carolina's Tennessee, Florida where it may be.
We're in twenty eight states with clients. Where do you
want to be in your retirement Because not only does
that affect your estate planning, it also affects your income
distribution planning because every state is different and how they
(15:27):
tax and how they basically handle Medicaid and also a
state tax don't say I'm going to go here until
you figure out the consequences of going there, and then
you get in the mud and you have an event,
and now you say, oh, why did I come here?
(15:49):
Do you travel a lot or do you stay close
to home? Does it make sense to have a home
or do now? I just talked to a client this morning,
called me in my car when I was driving to
the radio station, and basically he said to me, we're
out of here. I'm not doing this house anymore. It's
too much. I can't do it anymore. We're going into
(16:11):
an apartment. I said, that's fine and dandy, but is
that really a good choice. He says, well, I just
don't want the maintenance. And I said, hey, Rick, doesn't
it make sense maybe to look at a condom? And
then you're locking into your fixed expenses. Yeah, you're gonna
have some variables as far as taxes and hoa, but
maybe not as dramatic as you would have with rents.
(16:32):
Rents have gone through the roof, folks. I have clients
that are squealing right now that started at twelve thirteen,
fourteen hundred dollars a month. Now they're at twenty five
twenty six hundred dollars a month to Saint Dave. We
can't afford these increases. So will you relocate downsize stay
in your current home? What makes sense for you financially,
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financially not emotionally, financially, with your current and future considerations.
You know, a lot of us have hobbies and activities
that we want to pursue. A lot of people want
to do certain things with the churches, hospitals. They want
to volunteer, which I think is phenomenal. God bless you,
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God bless you. But how does that fit into your
overall plan? And where do you want to do it.
I have a friend of mine was a cook up
here have a chef at a restaurant. Now he's in Florida,
he's in the villages. What does he do now? He
spends three out of his five days during the week
at a church at their food bank, basically cooking food
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for the parishioners and the people in the community. And
he loves it. So he's found some activity that he
can pursue in his retirement that keeps him busy, and
it's also a passion for him because he knows that
he's doing God God's work. So going into retirement is
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much more complicated than just managing your money. Much more
complicated than just managing your money. Retirees are going to
face some shortfalls because they've had improper planning. They haven't
done the right planning on the front end, and because
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of that, a lot of times rising healthcare costs, uncertain
stock market and bond market conditions. You know how many
people over the last five, six, seven, eight nine years
that went into retirement they didn't want to have a
lot of risk in their portfolio that went in They said, well,
we're going to go to the bank, or we're going
to get a CD, or we're going to get a
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guaranteed rate. And you went to the bank and they said,
we're going to give you one percent on your money.
Who the hell can live on one percent? So you
got to have a wealth craft, have to retirement income plan,
income plan that mitigates these risks and ensures that you
remain financially strong and independent. You don't want to have
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to call your kids and say, hey, listen, things didn't
work out. Mom and Dad are coming over to spend
the rest of our lives. Not the weekend, but the
rest of our lives. So a retirement income distribution plan
is a financial strategy designed to provide consistent and sustainable
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income streams that will cover your expenses after you stop working,
you stop getting a check, you need to create a check.
You stop getting a check now that you need to
create a check. Right. Sounds simplistic, but it isn't, folks.
It involves a lot of work as far as managing
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your savings and investments, other types of income sources to
ensure that you have enough money such as social Security,
if you have the income from properties, you're a trust
fund baby, whatever it may be. The goal is to
have a plan that provides steady income, consistent income to
support your lifestyle essential expenses. That's why I always get
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a kick out of these people that talk about when guarantees,
you know, whatever it may be, guarantees you know, they say,
don't get guarantees because you know what, they're smart. They
can manage money, and they can do the right thing
every single time and never go underwater. That's a pinocchio,
because I've seen the stress of individuals when they walk
(20:41):
into my office and they basically have gone through a
downturn in the financial markets, and they're basically saying, what
do we do? What I say to them, you didn't
set it up right as far as you're planning in
the front end. You don't know what your baseline income is.
You have no idea the volatility or portfolio. You basically
(21:02):
listen to mister and missus Pinocchio as far as their
ability to manage assets. Now you're in a situation that
you don't know if you can take distributions anymore off
your portfolio because it's down thirty percent for the year,
and now you need to take five or six percent
off the portfolio or eight percent or nine percent in
order to facilitate what you need for income. Isn't that
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a fun retirement That just sounds dandy. So you need
to set it up right on the front end so
you don't have to worry about it during your what
I call the golden years, your go go years. So
(21:43):
once you have a clear idea of what your baseline
retirement income goals are, you've got to assess your financial
situation to basically understand how are your money's allocated in
order to meet those needs. Most of us, because of
(22:03):
the world that we lived in the boomer generation, we
do not have pension benefits. If we did or if
we do. A lot of times we work for the
state or municipality or work for an organization, but most
of your businesses. You were unique here in the Capitol
(22:24):
District region because we have such a high concentration of
state workers. We have a high concentration of people that
work for municipalities, school districts, etc. So there's a lot
of people here in the Capitol District region. You go outside,
you go to Syracuse, Oneana, Buffalo, etc. We do a
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lot of work with National Grid, one of our big
accounts that we do a lot of work with. You know,
they have the ability to manage their assets and retirement
their four O one K and also their cash balance account.
So what's your balance your contributions are they going to
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meet the pool of money that you think is going
to be necessary to facilitate what's going to be necessary
in order to pay the bills? As I said, do
you have other investments real estate? Do you have a
trust fund? Do you work on the side. Is there
(23:33):
something that you're going to do in retirement that will
generate additional income? And the bottom line is is that
we live in a society today that it's easy for
people to have debt, lots of debt. There's lots of debt,
all sorts of debt out there and credit cards. Ideally,
you want to enter into retirement with a minimal amount
of debt. Now loaded up with debt, and you can
(23:55):
do that the old Dave Ramsey greens and beans. You
might have to make some heart decisions in order to
facilitate that. I'm in the camp I used to say
five to seven years. Now I say seven to ten years.
If you're gonna retire within the next seven to ten years,
get going to have a plan. Break down your current
(24:16):
expenses into essential indiscretionary. Do you need the vote, Do
you need the BMW? Do you need the fancy suits?
Sometimes you're gonna have to make hard decisions. So we're
gonna talk a little bit more when we come back.
This is a quick half hour. I'm Dave Kopec. This
(24:37):
is Retirement Ready. We'll be right back. Okay, we are back.
(25:04):
Dave Covic, your host, President of the Retirement Planning Group.
This is Retirement Ready, which is a topic specific show.
We talk about certain ideas solutions for your pre and
post retirement years. Today we're talking about retirement income planning.
How do you create a retirement income plan for your
(25:28):
post working years. You stop receiving a check and now
you have to create a check. So here we talked
about two topics so far. We talked about number one,
what's your goals, what's your objectives? What do you want
to do all day long when you retire? What's your
(25:50):
current financial situation with your retirement accounts, other investments, debt.
Now we're going to talk about as far as your
retirement expenses. I have a cousin right now called me
the other day, worked hard, was a meat cutter, accumulate
(26:10):
a few hundred thousand dollars as far as retirement. Thought
it was more than enough, and went into retirement feeling
pretty good about himself, got married. And he called me
the other day and he says, I got a problem.
I so, what's your problem? He says, I can't cover
my expenses right now. And I said, well, you need
(26:33):
to probably spend a little bit more money of your
retirement assets in order to facilitate what you're looking for
as far as housing, healthcare, your daily living expenses, your lifestyle,
you know, and what kind of debt are you carring.
But like I said earlier in the beginning of today's show,
(26:58):
think about five fifteen years ago. I mean, the average
retiree right now is expected to live anywhere between twenty
to thirty years in retirement. Think about what it costs
for you to live twenty to thirty years ago, as
far as you're fixed expenses, the cost of groceries, transportation, insurance, clothing,
(27:23):
and other essentials. What your premium is going to be
for medicare, your supplemental insurance, you're out at pocket expenses.
Fidelity currently says that you're gonna need about one hundred
and seventy two thousand, five hundred dollars for a sixty
five year old male or female, and that doesn't include
(27:44):
long term care cost out of pocket expenses. Out of
pocket expenses, so you're gonna need a lot of money.
You're gonna need a lot of money in order to
facilitate what's going to be necessary for healthcare. Common rule
of thumb is that you'll need somewhere between seventy to
(28:07):
eighty percent of your pre retirement income to maintain your lifestyle.
Seventy to eighty percent, I will say while I was
making eighty thousand dollars, Dave, does that mean that I
have to do seventy to eighty percent of the eighty thousand. No,
because you were paying federal state, you were paying for
(28:29):
your contribution to your four oh one k your net.
If you were living comfortable on your net, seventy to
eighty percent of your net should be more than adequate
enough to facilitate what you're going to need when you
add in your Social Security benefit. Where it is the
money come from? Where's your money coming from? We already
(28:54):
talked about about fifty percent of people do not have
any zero, zippo, not a zip retirement assets. So that
means that those individuals are going to rely on what
Social Security benefits in order for them to have quality
of life. And it provides the big thing, of course,
(29:16):
lifetime incompayments. But it will be more than adequate enough.
It's based on your earnings history and at the age
in which you go into retirement in order to claim
your benefit. If you have a pension, God bless you.
Like I said, there's a lot of people here locally
(29:36):
that work for the state, municipalities, etc. They have a
pension benefit. You need to sit down with your financial
team to basically go through the numbers to see when
it makes sense for you to pull the trigger start
taking the benefit and all the options that are available
as far as spouse spousal pop up. You can go
(29:59):
through the whole laundry of different options that are available
for individuals. They got to remember, once you pull the trigger,
once you pull the trigger, once you start receiving benefit,
the horses out of the barn and they can't go back,
So you better make sure you're making the right decision.
Pensions are critical for a lot of individuals in order
(30:21):
for quality of life, especially especially for the spouse that
did not work, because what happens is that when the
first spouse passes away, you lose one of the social
security benefits depending on what the pension selection was, and
then whatever other additional asset you have, and I raise
(30:43):
four O one case, et cetera, in order to supplement
the money that is lost at the first death. Typically
it's anywhere from twenty five to thirty percent we see
when the first spouse passes away as far as guaranteed
income that will no longer come in the door. Now,
for some of you that do not have pension benefits.
(31:06):
There's a little thing out there called annuities that can
provide guaranteed lifetime income streams in your retirement. All your
investment banking firms say today, whether it's Schwab, Fidelity, all
breakdown list Vanguard. Individuals that do not have pension benefits
should consider buying an annuity because it does that one
(31:29):
little thing that nobody else can do. It guarantees you
lifetime income a stream of dollars in your retirement. We
are major advocates of annuities. We believe in them. There's
changed dramatically over the last few years. They're so diverse
and different it would take hours to go through these
(31:52):
different types of investments that are associated with annuities. Don't
pooh pooh them because of the pinocchios, because a lot
of them make a lot of sense. If you get
barons or if you have access to barons. A week
or two ago they had article in there about the
one hundred best annuity contracts. If you get a chance
down read it, do your own independent work and study
(32:14):
on it. And research I think you'll find out is
that you'll be kind of shocked on what some of
these benefits can be provided for you and your family.
Parents loved ones sometimes will leave assets in a trust
to provide for their children, grandchildren interests. At the times,
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you have to benulation to how they supplement your retirement
income needs. And as I said earlier, some of you
will choose to work part time to supplement your income,
either for financial reasons or to keep your insanity or
keep your sanity that insanity, keep your sanity personal fulfillment.
(33:02):
So working part time for me, believe it or not,
I think is a great way for future retirees to
basically stay in the action, get a few extra bucks.
And also, you know everybody needs social social connection. Guy
(33:27):
came in the other day. He's got about one point
two million dollars in assets. This is Dave, how much
can I take off of this portfolio making sure that
the retirement lasts as long as he does. You know,
everybody's heard about the four percent rule. You know, modern
(33:47):
portfolio theory came out with this common approach. Four percent
of your portfolio as far as retirement income distribution and
the money doesn't go away before you go. Well, we
can get five six percent guaranteed right now, depending on
the asset. So why do I take four if I
can get five or six? But you're talking over a
(34:08):
period of thirty years. The four percent row, I think
it's a dinosaur. It's time is coming on. The Retirement
Planning Group will use what we call a bucketty bucket strategy.
The bucket strategy divide your assets and the management into
three different buckets based on ultimately when you're going to
(34:29):
need the funds. There's a short term cash bucket, there's
a medium term bucket, there's a long term bucket, and
then there's a RMD bucket. Okay, short term bucket is
usually cash and cash equivalents. Medium is usually a balanced portfolio,
moderate growth. Long term is your growth portfolio that we allocate.
(34:50):
Then the R and D have to take into consideration
because when once you reach the age of seventy three,
you've got a plan, it's called the government's plan. You
need to start taking district is not because you want to,
but because the government is forcing you to liquidate those accounts.
You need. WANTA Wiver emphasize you need to incorporate these
(35:11):
r and ds into your withdrawal plan. Huge A lot
of people don't. Most of you don't. Of course, inflation.
Inflation is the cancer for retirement, especially during a long retirement.
(35:35):
It's important to include investment strategies to combat inflation for
your retirement income distribution plan. So such portfolios that we
just talk about the buckets approach that have the potential
to outpace inflation is critical. Typically, we run our inflation
(35:56):
report somewhere between three and three and a half percent,
and we run a net return to the investor somewhere
between six and seven percent based off of the allocation
of the stocks, mod's, alternative investments and guarantees. And when
we talk about unexpected expenses, what's the big one? Of course,
(36:17):
it's healthcare. You know, healthcare is through the roof. If
you had told me that healthcare would be as expensive
as it is today ten years ago, I would say
that you're, you know, going to fly to the moon tomorrow.
Healthcare is probably the one thing that can derail your
retirement and complaint if you are unprepared. And I'm telling
(36:41):
the people that are listening that are young today, that
are driving in the car, sitting on the beach, sitting
by the pool, that are listening to the show, if
you have the ability to do a high deductible, high
deductible HSA account. Do it, it will pay dividends for
the years to come. Welcome back after this quote break.
(37:04):
I'm Dave Kopek. This is retirement ready. Now. We are
living through the greatest wealth transfer in the history of mankind.
Trillions of dollars of wealth will change hands from one
generation to the next. Your money to our beloved children
and grandchildren. Are you ready? Your future is written by chance,
(37:26):
it's written by action. Now's the time to build your plan,
protect your assets, and position yourself for the opportunity. Don't
wake take action. If future favors those that are prepared,
call eighty eight five eight zero one nine one nine.
That's eight eight eight five eight zero one nine one nine.
You've spent a lifetime saving for retirement. Now it's time
to make that money work for you. Here's the secret
(37:48):
most people miss. You have to create your own retirement
income plant. Social Security is not enough, pensions are rare.
You need a strategy that turns savings into monthly income
that will last. A lifetime. Retirement planning group we build
customized income distribution plans so you can retire with confidence,
Retire smart, Live well. Call eight eight eight five eight
(38:09):
zero nine one nine for your complementary consultation. Are you
ready for retirement or just hoping it works out? Don't
leave your future to chance. At the Retirement Planning Group,
we hope you create a personalized retirement plan so you
can relax knowing you are prepared. Take action today called
eight eight eight five eight zero one nine one nine.
(38:30):
That's eight eight eight five eight zero one nine one nine,
Or visit us at our website rpgretire dot com to
schedule your complementary consultation. Your future will say thank you.
Retirement is in a Sunday thing. It's a now thing.
Whether you're just starting out or nearing the finish line,
the best time to build your retirement plan is today.
(38:54):
Don't wait for the right moment. Let's create a plan
that works for you, secure your future and the free
him that comes with it. Call my office today and
take action eighty eight five EID zero one nine nine.
That's eighty eight five EID zero one nine nine, and
your future will thank you. Portions of the following program
will be recorded. All right, we are back ho everybody's
(39:32):
having it absolutely fantastic day and enjoying this long holiday weekend, Saturday, Sunday, Monday.
If you're fortunate to have Monday off. Like I said,
just be careful, folks. Don't you can drive if you're
gonna go out and have some refreshments, have a d
D designated driver or get an OUVER. No reason, zero
(39:57):
reason for anybody to get a DWY. So today we're
talking about a retirement income distribution plan. When you stop
receiving a check, what are you going to do? How
are you going to start creating a check? Do you
have a financial strategy to ensure that steady, sustainable income
is coming in, whether it's a good day, a bad day,
(40:20):
a bad stock market, a good stock market, a good
bond market, a bad bond market, volatility, you know, a
black Swan event. Here's the thing that most of us
get caught up with. And for a lot of high
networth people, you know, the Retirement Planning Group works with people.
(40:40):
We have no minimum. I don't care if you've got
ten dollars or ten million dollars. We'll help you out.
I just feel like it's necessary for us to do that,
especially if we're on radio and I know that you
listen to the show throughout the Capitol District region, but
it also is being throughout the United States. We're in
(41:01):
twenty eight different states that we have clients in. But
as I always say over and over again, we will
work with you no matter what your net worth is.
I feel it's an obligation on our part. I might
not be able to spend as much time with you
as I would like, but I have extremely competent people
(41:23):
that work with me that I feel one confident in
that they're going to be able to put you in
the right spot. But taxes can have a substantial impact
on your retirement income and your zip code. I always
ask people what will your zip code be during the retirement?
(41:46):
Is it New York? Is it Vermont? Is it Massachusetts?
Is a Virginia? Is it Tennessee? Is it the Carolinas?
Is it Florida? Blah blah blah blah blah. Different income
sources are taxed differently depending on the state and the
zip code. You know, a lot of your state retirees
(42:09):
leave to go to the Carolinas and go, hey, I
didn't realize that my income was taxed state in the Carolinas. No,
it is it is. It's not taxed here in New
York because you were fortunate that you work for the
state and you're exempt from state income tax. What about
(42:30):
my Social Security? Your total income will determine if your
Social Security benefits or tax. Thirty two thousand dollars for
a joint twenty five thousand for a single I've been
in business now, folks, for forty three years. It hasn't
changed an inch. Those are the same numbers. There's never
been any kind of an adjustment based on inflation with
(42:52):
those numbers, which I think is bs traditional four oh
ink and I ray withdrawals. These withdrawals from these accounts
are always one one hundred percent subject to ordinary income text.
It's the greatest achilles heel for most of us, most
of you. If you look at your net worth, your
(43:14):
financial statement, you're going to have two assets that will
make up seventy to eighty percent of your net worth.
And it's IRA four OK and C equity in your home.
So how are you going to tap into it? And
when you're sitting there chewing on your MAPO and staring
(43:37):
out the window because you're in eighty ninety years old,
you're not mobile, You've got some health and you're getting
these large checks for eighty ninety one hundred thousand dollars,
not because you want the distributions, but because the government
now has their plan. It's called to do nothing plan.
I did nothing. Now I'm in R and D, and
(43:58):
now I have to take these large with rows, not
because I want them, but because I'm forced to take
these withdrawals. So what's the alternative for the people that
are younger, they're in the forties and fifties that are
listening today's show. If you're not funding roth ira and
for a one k's, you're doing yourself a huge disservice.
(44:20):
Withdrawals are tax free. Money grows tax free, your spouse
gets a tax free, and when your kids get it,
they have to take R and DS. But it's tax free,
tax free, tax free, tax free. How do you like
that one? I love that one. I love tax three.
(44:42):
And of course dividends, interest, capital gains are all subject
different tax rates. I'm not going to sit here and
boy you and go through the tax code. But the
bottom line is is that the more money you can
have what we call tax preference money Wroth Wroth for
a one k HSA health savings accounts, tax free municipal bonds.
(45:05):
You're going to dance in the street because when you
go into the bucket to get the cash, the cash
is dollar for dollar. It's not a dollar minus the
mortgage the tax. Let's do state in federal So let
me overemphasize the most excuse me, the most tax efficient
(45:30):
withdrawal strategy that could minimize your taxes allowing to keep
more of your income is going to be created by
the financial team that you work with that created the
plan that took into consideration all the tax implication on
(45:53):
your withdrawals. If you're not doing it, you're playing Russian roulette.
You're just to pass away a lot of money that
doesn't necessarily have to go to our friends in Washington
and the state that you live in. Because you didn't
take action. It was easier for you to do nothing,
to know nothing planned then to motivate and do something.
(46:18):
And of course, the biggest thing that we deal with
right now, folks, I don't have to tell you is
healthcare Medicare. Right now, Medicaid Medicare. Medicare is typically covers
health care costs retirees and you get the supplement. Medicare
is supplement. And of course, the one thing that nobody
wants to talk about. Nobody. I don't care who it is,
(46:39):
some people do because they've been caregivers is long term care.
Long term care is not covered by Medicare. Long term
care is not covered by Medicare. Let me say that again.
Long term care is not covered by Medicare. So it's
important for you to consider how you pay for those
services if needed. Right now, the Capitol strictets anywhere from
(47:01):
like sixteen to eighteen thousand dollars a month for a
long term care facility, and that's basic coverage. So a
lot of people will go and we'll do an irrevocable
Medicaid trust thinking that that's the answer, that's the panacea.
You're fooling yourself about that too, And I can go
into that in great detail. So there's a lot of options.
(47:22):
You can buy long term care insurance, you can do
the health seating these accounts, like I told you, while
you're working, you could basically act as a bumper. You
can self fund some of the responsibility. But long term
care is the greatest risk for all of us as
we age because it's changing. A lot of the states
are getting much more aggressive. New York State is getting
(47:42):
much more aggressive going after iras. There's different ways that
they calculate the distributions. It's not R and D. It's
based on life expectancy. You could be in a position
that you can impoblish your spouse because you do nothing.
You sit on the fence. You don't educate yourself on
what needs to get done. Let me summarize. You need
(48:05):
to sit down and regularly go over where you are,
what your goals are, what your circumstances are, and you
can modify and adjust based off of economic conditions, your family,
tax laws, etc. You need to sit down with your
retirement team at least once a year to ensure that
(48:29):
it remains aligned with what your current situation is, your goals,
your health, etc. Market fluctuations, I guarantee it will happen.
There will be another sell off in the markets. Guaranteed.
I've been doing for forty three years. I've seen numerous
downturns and downdrafts in the market. It will happen again.
(48:51):
Are you prepared? Are you prepared for life changing events,
change in health, unexpected expenses? Do you have a nine
to one to one portfolio. Are you tracking your spending?
Do you need to adjust a lot of our clients say, hey, Jesus, Dave,
you know we're getting too much money, well let's adjusted.
(49:11):
Or Dave, we're not getting enough money, well let's adjust it.
Seek professional guidance, whether it's with the retirement Planning Group,
anybody that comes into the retirement planning group, we always say,
go kick the tires to somebody else and see if
they can help you. Go see what the alternative is
(49:32):
to the retirement planning group, because we want to make
sure that you are comfortable with our investment style, how
we develop our strategies, and how we ultimately want to
protect you and your family from what is really the
last chapter of your life as far as financial management,
and that's retirement. And as I've said, creating a retirement
(49:54):
and condition distribution plan excuse me, is more than a assets.
It's strategically manning this money throughout your lifetime in order
to take the distributions that's necessary and building a plan
that will last a lifetime. It's an ongoing process. Hopefully,
(50:16):
enjoy today's show. If we could be assistance eight eight
eight five eight zero one nine nine, give us a
call God bless everybody. Enjoy your weekend. The information or
services discussed on this show is for informational purposes only
(50:36):
and is not intended to be personal financial advice. The
investments and services offered by US may not be suitable
for all investors. If you have any doubts as to
the merits of an investment, you should seek advice from
an independent financial advisor.
All right, good afternoon. Yet it is afternoon, well after
twelve on a Saturday in beautiful sunny skies and upstate
New York. Hopefully everybody's having a great Labor Day weekend
so far just the beginning. GI have two more days
if you're fortunate to have Monday off, So be careful,
(00:29):
don't drink and drive, enjoy yourself, but don't do foolish things.
But today I'm here, I'm live, and I'm going to
talk about a topic that we hear consistently with our
existing clients and also future clients prospective clients that come in,
(00:52):
And we're going to talk about this new world that
we live in on how do you turn your life
savings into a retire income plan. You know, we live
in a world today where most of us ninety percent
of us almost now do not have pension benefits, and
it's a kind of a scary landscape as far as
(01:14):
how do you create a retirement income distribution plan. So
hopefully today I'm going to enlighten you, give you some
ideas and concepts and how you can turn your life
savings and the money that you've accumulated over your lifetime
into a sustainable income stream to cover your expenses during
(01:39):
your retirement. You know, what we're starting to see, folks,
is that a lot of people are living a hell
of a lot longer than what they anticipated. I know
what the data says that our life expectancies are going down.
But I can tell you, as the president of the
Retirement Planning Group, and this is my forty third year
(02:00):
on it, we have a lot of clients in their
eighties and nineties and you would never know that they're
in their eighties and nineties. You would think that they're
in their sixties and seventies. So with that being said,
today our topic, I think is critical that you understand
that you need to develop a plan that has a
solid foundation for your income needs that could possibly last
(02:24):
for twenty five to thirty years. You could possibly be
in retirement longer than the number of years that you
were employed. So we'll talk a little bit about what
you desire as a retiree. But approximately forty percent of
(02:45):
American adults today forty which is staggering, report not having
a savings account for retirement. Forty percent. Nearly half of
all working Americans lack access to an employer sponsored retirement plan.
(03:09):
So what does that mean? That means that if you
do not have a sponsored employer retirement plan, you better
get a knock in and try to figure out how
you're going to do it yourself. The plumber, the electrician.
You know, I can go through the whole laundry list
of my family members that work, hard working savers that
(03:33):
don't work for XYZ Corporation, that have their own self
employed business. Twenty twenty five found that forty percent of
US adults do not have any money invested for retirement.
(03:54):
Forty So what does that mean? That means that you
better either get going or you're going to work for
the rest of your life. There's a lot of aryan
factors which we'll talk about today, but we're going to
talk about a guide for you. You know, I'm a
big believer, and I say this over and over again
(04:15):
every individual that comes into the retirement planning group, it's
the same common denominator. We say the same thing consistently.
We'll see, Dave, what do you think? What should we do?
What's our problem right now? And the answer to that
is pretty easy. It's always the same answer. You're flying
(04:37):
by the seat of your pants. You do not have
a what plan. You have no guideline. If I'm building
a house, I have a blueprint. If I'm going into
a football game, I have a game plan. If I'm
going into a basketball I have a game plan. You
have to have a strategy. You have to have a
(04:58):
game plan, and most of you will just fly by
the seat of your pants, and you'll wait to the
very end and you'll say, oh, geez, we better go
see Dave, or we've better go see Joe, or you
go see Bob or Pete or whoever it may be, Susan, Billy, Andrea,
and figure out how we're going to now build out
a plan that will last us throughout our golden years.
(05:21):
You're already behind the eight ball if you if that's
your plan after forty three years of doing it, you
have to determine, determine your specific retirement lifestyle and the
needs that you're going to have to have what we
call realistic income during your retirement years. We'll do a
(05:45):
guestimate of what your future expenses are going to be.
Think about just healthcare, folks, think about healthcare today. What
was healthcare five ten years ago versus what it is today?
What was your cost of goods and service? What was
your cost for your taxes? You have to make sure
(06:08):
that you can ensure to meet your needs with the
capital that you have accumulated over your lifetime. Sounds kind
of corny, right, but that's the bottom line. So you've
got to rely on a lot of sources. You're fortunate.
(06:30):
There's a huge wealth transfer that's going on right now,
estimated to be about eighty five trillion dollars of money
that will pass from the boomer generation to our client
or not to our clients, to our children and also
our grandchildren. So if you're early in the process, you
might be one of the lucky people that receives a
(06:53):
significant amount of wealth transfer. But if you're not, what's
your social security? Are you one of the fortunate people
that are out there that have pensions? Do you have
a retirement accounts either through your employer or ones that
(07:14):
you have set up yourself. And are your investments set
up in order to have financial stability? How much do
you have allocated in go go versustable and guaranteed? And
then finally, the last couple, you need to have a
(07:34):
sustainable withdrawal plan. You can't come in and say, listen, Dave,
I've got two hundred thousand dollars. I need to get
fifteen percent off of this. I need thirty thousand dollars
a year throughout my retirement in order to satisfy my needs. Okay,
and I need to fly to the moon and you
know what, I'm going to win lottery tonight. You have
(07:55):
to have realistic expectations and then finally, you got to
revisit your plan as you get closer to the time
that you're walking out the door. And I'll tell you, folks,
I'd like to say to you that everybody walks into
the retirement planning group, it's a panacea. We're able to
say to them, we're going to change your life and
(08:16):
we're going to make everything great. You're going to be
able to go out into retirement when you want to.
That's not the case. Sometimes the screwdriver me, that's my nickname,
the Screwdriver. I have to go in and tell people
things that they don't want to hear. I have to
tune them up. And when I say tune them up,
I have to tell them things that they don't want
(08:37):
to hear. We've all been there. Conversations with our children
with her family, with our loved ones, with our employees.
You have to be realistic as far as what your
goals and what your objectives are. And there's a lot
of other variables. Divorce very high divorce rate for people
that are about ready to retire. The divorce, they've been
(09:00):
separated for a long period of time. They get together
for a period of time and he says to her
and she says to him, eh, I don't think I
want to spend as much time with you as say
we're doing right now. We're in the camp that you
should stagger your retirements. You should have one of the
(09:21):
spouses retire, then six eight ten, twelve months later the
other spouse passes onto a retirement. So we come back,
we're going to be talking about our step by step
guide to building retirement income. I'm Dave Kopec. This is
the Retirement Ready Show. We'll be back after this quick message.
(09:51):
Are you ready for retirement or just hoping it works out?
Don't leave your future to chance. At the retirement Planning Group,
we hope you create a personalized retirement pl so you
can relax knowing you are prepared take action today called
eight eight eight five eight zero one nine one nine.
That's eight eight eight five eight zero one nine one nine,
or visit us at our website rpgretire dot com to
(10:14):
schedule your complementary consultation. Your future will say thank you.
You've spent a lifetime saving for retirement. Now it's time
to make that money work for you. Here's the secret
most people miss. You have to create your own retirement
income plant. Social security is not enough, pensions are rare.
You need a strategy that turns savings into monthly income
(10:35):
that will last a lifetime. At the Retirement Planning Group,
we build customized income distribution poins so you can retire
with confidence, retire smart, live well. Call eight eight eight
five eight zero nine one nine for your complementary consultation.
We are living through the greatest wealth transfer in the
history of mankind. Trillions of dollars of wealth will change
(10:55):
hands from one generation to the next. Your money to
our beloved children and ranchl Are you ready? Your future
is written by chance, it's written by action. Now's the
time to build your plan, protect your assets, and position
yourself for the opportunity. Don't wait, take action. The future
favors those that are prepared. Call eighty eight five eight
(11:16):
zero one nine one nine. That's eighty eight five eight
zero one nine one nine. Retirement is in a Sunday thing.
It's a now thing. Whether you're just starting out or
nearing the finish line. The best time to build your
retirement plan is today. Don't wait for the right moment.
Let's create a plan that works for you. Secure your
(11:36):
future and the freedom that comes with it. Call my
office today and take action. Eighty eight five eight zero
one nine one nine. That's eighty eight five eid zero
one nine one nine, and your future will thank you.
(11:59):
All right, good afternoon, on this beautiful Saturday in Upstate
New York, August thirtieth, it's hard to believe that we're
almost through the summer. Tuesday, the rubber hits the road,
a lot of the kids go back to school, a
lot of my wife's friends are going back to teaching,
and of course, the financial services industry will be full
(12:23):
throttle after this holiday weekend. So enjoy it. Enjoy this
absolutely spectacular weather that we're going to have an Upstate
over the next few days, and get ready, get ready
to do some things in order to put yourself in
a better position for your retirement. So today, as I
sit here and I talk about creating retirement income plans,
(12:47):
one of the things that I want to overemphasize procrastination
is not your friend, folks. Procrastination is not your friend.
You know. I hear people say to me over and
over again, I know I should have done this sooner.
I know I've listened to you Dave for years on
the radio, and I should have picked up the phone
and called you. Well, my answer to you is one,
(13:13):
but it's easy sometimes to sit on the fence and
do nothing. The do nothing plan. The do nothing plan,
really you have no consequence right until all hell breaks loose.
So we help you determine your retirement goals. Right. We
have a three appointment process at the retirement at the
(13:37):
retirement planning group, we have the first meeting is to
try to figure out who you are, what you are,
and what you want to do. The second appointment is
these are ideas and concepts that you should probably consider
in some of our suggestions. And then the third typically
is when we put the rubber to the road and
(13:58):
we actually take action, take action, start building out your plan.
So establishing your retirement goals is the first thing and
creating not only your overall retirement plan, but the most
critical one is your retirement income distribution plan. So you
(14:18):
got to think about what you want with your retirement,
what it looks like, and here are some things that
you need to start thinking about. At what age? At
what age do you want to retire? Everybody wants to
retire earlier. Right ken you retire, there's your genetics ready
(14:42):
for you to walk out the door and play golf,
go to the beach, do all the things around the
house that you've been procrastinating about. Some people can't do it.
So at what age do you think you can retire
and feel content and happy? Second, what kind of lifestyle
do you envision for yourself during your retirement years? Is
(15:04):
it here in upstate New York, throughout the Capitol District region?
Is it outside Carolina's Tennessee, Florida where it may be.
We're in twenty eight states with clients. Where do you
want to be in your retirement Because not only does
that affect your estate planning, it also affects your income
distribution planning because every state is different and how they
(15:27):
tax and how they basically handle Medicaid and also a
state tax don't say I'm going to go here until
you figure out the consequences of going there, and then
you get in the mud and you have an event,
and now you say, oh, why did I come here?
(15:49):
Do you travel a lot or do you stay close
to home? Does it make sense to have a home
or do now? I just talked to a client this morning,
called me in my car when I was driving to
the radio station, and basically he said to me, we're
out of here. I'm not doing this house anymore. It's
too much. I can't do it anymore. We're going into
(16:11):
an apartment. I said, that's fine and dandy, but is
that really a good choice. He says, well, I just
don't want the maintenance. And I said, hey, Rick, doesn't
it make sense maybe to look at a condom? And
then you're locking into your fixed expenses. Yeah, you're gonna
have some variables as far as taxes and hoa, but
maybe not as dramatic as you would have with rents.
(16:32):
Rents have gone through the roof, folks. I have clients
that are squealing right now that started at twelve thirteen,
fourteen hundred dollars a month. Now they're at twenty five
twenty six hundred dollars a month to Saint Dave. We
can't afford these increases. So will you relocate downsize stay
in your current home? What makes sense for you financially,
(16:55):
financially not emotionally, financially, with your current and future considerations.
You know, a lot of us have hobbies and activities
that we want to pursue. A lot of people want
to do certain things with the churches, hospitals. They want
to volunteer, which I think is phenomenal. God bless you,
(17:19):
God bless you. But how does that fit into your
overall plan? And where do you want to do it.
I have a friend of mine was a cook up
here have a chef at a restaurant. Now he's in Florida,
he's in the villages. What does he do now? He
spends three out of his five days during the week
at a church at their food bank, basically cooking food
(17:45):
for the parishioners and the people in the community. And
he loves it. So he's found some activity that he
can pursue in his retirement that keeps him busy, and
it's also a passion for him because he knows that
he's doing God God's work. So going into retirement is
(18:08):
much more complicated than just managing your money. Much more
complicated than just managing your money. Retirees are going to
face some shortfalls because they've had improper planning. They haven't
done the right planning on the front end, and because
(18:28):
of that, a lot of times rising healthcare costs, uncertain
stock market and bond market conditions. You know how many
people over the last five, six, seven, eight nine years
that went into retirement they didn't want to have a
lot of risk in their portfolio that went in They said, well,
we're going to go to the bank, or we're going
to get a CD, or we're going to get a
(18:49):
guaranteed rate. And you went to the bank and they said,
we're going to give you one percent on your money.
Who the hell can live on one percent? So you
got to have a wealth craft, have to retirement income plan,
income plan that mitigates these risks and ensures that you
remain financially strong and independent. You don't want to have
(19:12):
to call your kids and say, hey, listen, things didn't
work out. Mom and Dad are coming over to spend
the rest of our lives. Not the weekend, but the
rest of our lives. So a retirement income distribution plan
is a financial strategy designed to provide consistent and sustainable
(19:34):
income streams that will cover your expenses after you stop working,
you stop getting a check, you need to create a check.
You stop getting a check now that you need to
create a check. Right. Sounds simplistic, but it isn't, folks.
It involves a lot of work as far as managing
(19:58):
your savings and investments, other types of income sources to
ensure that you have enough money such as social Security,
if you have the income from properties, you're a trust
fund baby, whatever it may be. The goal is to
have a plan that provides steady income, consistent income to
support your lifestyle essential expenses. That's why I always get
(20:21):
a kick out of these people that talk about when guarantees,
you know, whatever it may be, guarantees you know, they say,
don't get guarantees because you know what, they're smart. They
can manage money, and they can do the right thing
every single time and never go underwater. That's a pinocchio,
because I've seen the stress of individuals when they walk
(20:41):
into my office and they basically have gone through a
downturn in the financial markets, and they're basically saying, what
do we do? What I say to them, you didn't
set it up right as far as you're planning in
the front end. You don't know what your baseline income is.
You have no idea the volatility or portfolio. You basically
(21:02):
listen to mister and missus Pinocchio as far as their
ability to manage assets. Now you're in a situation that
you don't know if you can take distributions anymore off
your portfolio because it's down thirty percent for the year,
and now you need to take five or six percent
off the portfolio or eight percent or nine percent in
order to facilitate what you need for income. Isn't that
(21:22):
a fun retirement That just sounds dandy. So you need
to set it up right on the front end so
you don't have to worry about it during your what
I call the golden years, your go go years. So
(21:43):
once you have a clear idea of what your baseline
retirement income goals are, you've got to assess your financial
situation to basically understand how are your money's allocated in
order to meet those needs. Most of us, because of
(22:03):
the world that we lived in the boomer generation, we
do not have pension benefits. If we did or if
we do. A lot of times we work for the
state or municipality or work for an organization, but most
of your businesses. You were unique here in the Capitol
(22:24):
District region because we have such a high concentration of
state workers. We have a high concentration of people that
work for municipalities, school districts, etc. So there's a lot
of people here in the Capitol District region. You go outside,
you go to Syracuse, Oneana, Buffalo, etc. We do a
(22:46):
lot of work with National Grid, one of our big
accounts that we do a lot of work with. You know,
they have the ability to manage their assets and retirement
their four O one K and also their cash balance account.
So what's your balance your contributions are they going to
(23:09):
meet the pool of money that you think is going
to be necessary to facilitate what's going to be necessary
in order to pay the bills? As I said, do
you have other investments real estate? Do you have a
trust fund? Do you work on the side. Is there
(23:33):
something that you're going to do in retirement that will
generate additional income? And the bottom line is is that
we live in a society today that it's easy for
people to have debt, lots of debt. There's lots of debt,
all sorts of debt out there and credit cards. Ideally,
you want to enter into retirement with a minimal amount
of debt. Now loaded up with debt, and you can
(23:55):
do that the old Dave Ramsey greens and beans. You
might have to make some heart decisions in order to
facilitate that. I'm in the camp I used to say
five to seven years. Now I say seven to ten years.
If you're gonna retire within the next seven to ten years,
get going to have a plan. Break down your current
(24:16):
expenses into essential indiscretionary. Do you need the vote, Do
you need the BMW? Do you need the fancy suits?
Sometimes you're gonna have to make hard decisions. So we're
gonna talk a little bit more when we come back.
This is a quick half hour. I'm Dave Kopec. This
(24:37):
is Retirement Ready. We'll be right back. Okay, we are back.
(25:04):
Dave Covic, your host, President of the Retirement Planning Group.
This is Retirement Ready, which is a topic specific show.
We talk about certain ideas solutions for your pre and
post retirement years. Today we're talking about retirement income planning.
How do you create a retirement income plan for your
(25:28):
post working years. You stop receiving a check and now
you have to create a check. So here we talked
about two topics so far. We talked about number one,
what's your goals, what's your objectives? What do you want
to do all day long when you retire? What's your
(25:50):
current financial situation with your retirement accounts, other investments, debt.
Now we're going to talk about as far as your
retirement expenses. I have a cousin right now called me
the other day, worked hard, was a meat cutter, accumulate
(26:10):
a few hundred thousand dollars as far as retirement. Thought
it was more than enough, and went into retirement feeling
pretty good about himself, got married. And he called me
the other day and he says, I got a problem.
I so, what's your problem? He says, I can't cover
my expenses right now. And I said, well, you need
(26:33):
to probably spend a little bit more money of your
retirement assets in order to facilitate what you're looking for
as far as housing, healthcare, your daily living expenses, your lifestyle,
you know, and what kind of debt are you carring.
But like I said earlier in the beginning of today's show,
(26:58):
think about five fifteen years ago. I mean, the average
retiree right now is expected to live anywhere between twenty
to thirty years in retirement. Think about what it costs
for you to live twenty to thirty years ago, as
far as you're fixed expenses, the cost of groceries, transportation, insurance, clothing,
(27:23):
and other essentials. What your premium is going to be
for medicare, your supplemental insurance, you're out at pocket expenses.
Fidelity currently says that you're gonna need about one hundred
and seventy two thousand, five hundred dollars for a sixty
five year old male or female, and that doesn't include
(27:44):
long term care cost out of pocket expenses. Out of
pocket expenses, so you're gonna need a lot of money.
You're gonna need a lot of money in order to
facilitate what's going to be necessary for healthcare. Common rule
of thumb is that you'll need somewhere between seventy to
(28:07):
eighty percent of your pre retirement income to maintain your lifestyle.
Seventy to eighty percent, I will say while I was
making eighty thousand dollars, Dave, does that mean that I
have to do seventy to eighty percent of the eighty thousand. No,
because you were paying federal state, you were paying for
(28:29):
your contribution to your four oh one k your net.
If you were living comfortable on your net, seventy to
eighty percent of your net should be more than adequate
enough to facilitate what you're going to need when you
add in your Social Security benefit. Where it is the
money come from? Where's your money coming from? We already
(28:54):
talked about about fifty percent of people do not have
any zero, zippo, not a zip retirement assets. So that
means that those individuals are going to rely on what
Social Security benefits in order for them to have quality
of life. And it provides the big thing, of course,
(29:16):
lifetime incompayments. But it will be more than adequate enough.
It's based on your earnings history and at the age
in which you go into retirement in order to claim
your benefit. If you have a pension, God bless you.
Like I said, there's a lot of people here locally
(29:36):
that work for the state, municipalities, etc. They have a
pension benefit. You need to sit down with your financial
team to basically go through the numbers to see when
it makes sense for you to pull the trigger start
taking the benefit and all the options that are available
as far as spouse spousal pop up. You can go
(29:59):
through the whole laundry of different options that are available
for individuals. They got to remember, once you pull the trigger,
once you pull the trigger, once you start receiving benefit,
the horses out of the barn and they can't go back,
So you better make sure you're making the right decision.
Pensions are critical for a lot of individuals in order
(30:21):
for quality of life, especially especially for the spouse that
did not work, because what happens is that when the
first spouse passes away, you lose one of the social
security benefits depending on what the pension selection was, and
then whatever other additional asset you have, and I raise
(30:43):
four O one case, et cetera, in order to supplement
the money that is lost at the first death. Typically
it's anywhere from twenty five to thirty percent we see
when the first spouse passes away as far as guaranteed
income that will no longer come in the door. Now,
for some of you that do not have pension benefits.
(31:06):
There's a little thing out there called annuities that can
provide guaranteed lifetime income streams in your retirement. All your
investment banking firms say today, whether it's Schwab, Fidelity, all
breakdown list Vanguard. Individuals that do not have pension benefits
should consider buying an annuity because it does that one
(31:29):
little thing that nobody else can do. It guarantees you
lifetime income a stream of dollars in your retirement. We
are major advocates of annuities. We believe in them. There's
changed dramatically over the last few years. They're so diverse
and different it would take hours to go through these
(31:52):
different types of investments that are associated with annuities. Don't
pooh pooh them because of the pinocchios, because a lot
of them make a lot of sense. If you get
barons or if you have access to barons. A week
or two ago they had article in there about the
one hundred best annuity contracts. If you get a chance
down read it, do your own independent work and study
(32:14):
on it. And research I think you'll find out is
that you'll be kind of shocked on what some of
these benefits can be provided for you and your family.
Parents loved ones sometimes will leave assets in a trust
to provide for their children, grandchildren interests. At the times,
(32:39):
you have to benulation to how they supplement your retirement
income needs. And as I said earlier, some of you
will choose to work part time to supplement your income,
either for financial reasons or to keep your insanity or
keep your sanity that insanity, keep your sanity personal fulfillment.
(33:02):
So working part time for me, believe it or not,
I think is a great way for future retirees to
basically stay in the action, get a few extra bucks.
And also, you know everybody needs social social connection. Guy
(33:27):
came in the other day. He's got about one point
two million dollars in assets. This is Dave, how much
can I take off of this portfolio making sure that
the retirement lasts as long as he does. You know,
everybody's heard about the four percent rule. You know, modern
(33:47):
portfolio theory came out with this common approach. Four percent
of your portfolio as far as retirement income distribution and
the money doesn't go away before you go. Well, we
can get five six percent guaranteed right now, depending on
the asset. So why do I take four if I
can get five or six? But you're talking over a
(34:08):
period of thirty years. The four percent row, I think
it's a dinosaur. It's time is coming on. The Retirement
Planning Group will use what we call a bucketty bucket strategy.
The bucket strategy divide your assets and the management into
three different buckets based on ultimately when you're going to
(34:29):
need the funds. There's a short term cash bucket, there's
a medium term bucket, there's a long term bucket, and
then there's a RMD bucket. Okay, short term bucket is
usually cash and cash equivalents. Medium is usually a balanced portfolio,
moderate growth. Long term is your growth portfolio that we allocate.
(34:50):
Then the R and D have to take into consideration
because when once you reach the age of seventy three,
you've got a plan, it's called the government's plan. You
need to start taking district is not because you want to,
but because the government is forcing you to liquidate those accounts.
You need. WANTA Wiver emphasize you need to incorporate these
(35:11):
r and ds into your withdrawal plan. Huge A lot
of people don't. Most of you don't. Of course, inflation.
Inflation is the cancer for retirement, especially during a long retirement.
(35:35):
It's important to include investment strategies to combat inflation for
your retirement income distribution plan. So such portfolios that we
just talk about the buckets approach that have the potential
to outpace inflation is critical. Typically, we run our inflation
(35:56):
report somewhere between three and three and a half percent,
and we run a net return to the investor somewhere
between six and seven percent based off of the allocation
of the stocks, mod's, alternative investments and guarantees. And when
we talk about unexpected expenses, what's the big one? Of course,
(36:17):
it's healthcare. You know, healthcare is through the roof. If
you had told me that healthcare would be as expensive
as it is today ten years ago, I would say
that you're, you know, going to fly to the moon tomorrow.
Healthcare is probably the one thing that can derail your
retirement and complaint if you are unprepared. And I'm telling
(36:41):
the people that are listening that are young today, that
are driving in the car, sitting on the beach, sitting
by the pool, that are listening to the show, if
you have the ability to do a high deductible, high
deductible HSA account. Do it, it will pay dividends for
the years to come. Welcome back after this quote break.
(37:04):
I'm Dave Kopek. This is retirement ready. Now. We are
living through the greatest wealth transfer in the history of mankind.
Trillions of dollars of wealth will change hands from one
generation to the next. Your money to our beloved children
and grandchildren. Are you ready? Your future is written by chance,
(37:26):
it's written by action. Now's the time to build your plan,
protect your assets, and position yourself for the opportunity. Don't
wake take action. If future favors those that are prepared,
call eighty eight five eight zero one nine one nine.
That's eight eight eight five eight zero one nine one nine.
You've spent a lifetime saving for retirement. Now it's time
to make that money work for you. Here's the secret
(37:48):
most people miss. You have to create your own retirement
income plant. Social Security is not enough, pensions are rare.
You need a strategy that turns savings into monthly income
that will last. A lifetime. Retirement planning group we build
customized income distribution plans so you can retire with confidence,
Retire smart, Live well. Call eight eight eight five eight
(38:09):
zero nine one nine for your complementary consultation. Are you
ready for retirement or just hoping it works out? Don't
leave your future to chance. At the Retirement Planning Group,
we hope you create a personalized retirement plan so you
can relax knowing you are prepared. Take action today called
eight eight eight five eight zero one nine one nine.
(38:30):
That's eight eight eight five eight zero one nine one nine,
Or visit us at our website rpgretire dot com to
schedule your complementary consultation. Your future will say thank you.
Retirement is in a Sunday thing. It's a now thing.
Whether you're just starting out or nearing the finish line,
the best time to build your retirement plan is today.
(38:54):
Don't wait for the right moment. Let's create a plan
that works for you, secure your future and the free
him that comes with it. Call my office today and
take action eighty eight five EID zero one nine nine.
That's eighty eight five EID zero one nine nine, and
your future will thank you. Portions of the following program
will be recorded. All right, we are back ho everybody's
(39:32):
having it absolutely fantastic day and enjoying this long holiday weekend, Saturday, Sunday, Monday.
If you're fortunate to have Monday off. Like I said,
just be careful, folks. Don't you can drive if you're
gonna go out and have some refreshments, have a d
D designated driver or get an OUVER. No reason, zero
(39:57):
reason for anybody to get a DWY. So today we're
talking about a retirement income distribution plan. When you stop
receiving a check, what are you going to do? How
are you going to start creating a check? Do you
have a financial strategy to ensure that steady, sustainable income
is coming in, whether it's a good day, a bad day,
(40:20):
a bad stock market, a good stock market, a good
bond market, a bad bond market, volatility, you know, a
black Swan event. Here's the thing that most of us
get caught up with. And for a lot of high
networth people, you know, the Retirement Planning Group works with people.
(40:40):
We have no minimum. I don't care if you've got
ten dollars or ten million dollars. We'll help you out.
I just feel like it's necessary for us to do that,
especially if we're on radio and I know that you
listen to the show throughout the Capitol District region, but
it also is being throughout the United States. We're in
(41:01):
twenty eight different states that we have clients in. But
as I always say over and over again, we will
work with you no matter what your net worth is.
I feel it's an obligation on our part. I might
not be able to spend as much time with you
as I would like, but I have extremely competent people
(41:23):
that work with me that I feel one confident in
that they're going to be able to put you in
the right spot. But taxes can have a substantial impact
on your retirement income and your zip code. I always
ask people what will your zip code be during the retirement?
(41:46):
Is it New York? Is it Vermont? Is it Massachusetts?
Is a Virginia? Is it Tennessee? Is it the Carolinas?
Is it Florida? Blah blah blah blah blah. Different income
sources are taxed differently depending on the state and the
zip code. You know, a lot of your state retirees
(42:09):
leave to go to the Carolinas and go, hey, I
didn't realize that my income was taxed state in the Carolinas. No,
it is it is. It's not taxed here in New
York because you were fortunate that you work for the
state and you're exempt from state income tax. What about
(42:30):
my Social Security? Your total income will determine if your
Social Security benefits or tax. Thirty two thousand dollars for
a joint twenty five thousand for a single I've been
in business now, folks, for forty three years. It hasn't
changed an inch. Those are the same numbers. There's never
been any kind of an adjustment based on inflation with
(42:52):
those numbers, which I think is bs traditional four oh
ink and I ray withdrawals. These withdrawals from these accounts
are always one one hundred percent subject to ordinary income text.
It's the greatest achilles heel for most of us, most
of you. If you look at your net worth, your
(43:14):
financial statement, you're going to have two assets that will
make up seventy to eighty percent of your net worth.
And it's IRA four OK and C equity in your home.
So how are you going to tap into it? And
when you're sitting there chewing on your MAPO and staring
(43:37):
out the window because you're in eighty ninety years old,
you're not mobile, You've got some health and you're getting
these large checks for eighty ninety one hundred thousand dollars,
not because you want the distributions, but because the government
now has their plan. It's called to do nothing plan.
I did nothing. Now I'm in R and D, and
(43:58):
now I have to take these large with rows, not
because I want them, but because I'm forced to take
these withdrawals. So what's the alternative for the people that
are younger, they're in the forties and fifties that are
listening today's show. If you're not funding roth ira and
for a one k's, you're doing yourself a huge disservice.
(44:20):
Withdrawals are tax free. Money grows tax free, your spouse
gets a tax free, and when your kids get it,
they have to take R and DS. But it's tax free,
tax free, tax free, tax free. How do you like
that one? I love that one. I love tax three.
(44:42):
And of course dividends, interest, capital gains are all subject
different tax rates. I'm not going to sit here and
boy you and go through the tax code. But the
bottom line is is that the more money you can
have what we call tax preference money Wroth Wroth for
a one k HSA health savings accounts, tax free municipal bonds.
(45:05):
You're going to dance in the street because when you
go into the bucket to get the cash, the cash
is dollar for dollar. It's not a dollar minus the
mortgage the tax. Let's do state in federal So let
me overemphasize the most excuse me, the most tax efficient
(45:30):
withdrawal strategy that could minimize your taxes allowing to keep
more of your income is going to be created by
the financial team that you work with that created the
plan that took into consideration all the tax implication on
(45:53):
your withdrawals. If you're not doing it, you're playing Russian roulette.
You're just to pass away a lot of money that
doesn't necessarily have to go to our friends in Washington
and the state that you live in. Because you didn't
take action. It was easier for you to do nothing,
to know nothing planned then to motivate and do something.
(46:18):
And of course, the biggest thing that we deal with
right now, folks, I don't have to tell you is
healthcare Medicare. Right now, Medicaid Medicare. Medicare is typically covers
health care costs retirees and you get the supplement. Medicare
is supplement. And of course, the one thing that nobody
wants to talk about. Nobody. I don't care who it is,
(46:39):
some people do because they've been caregivers is long term care.
Long term care is not covered by Medicare. Long term
care is not covered by Medicare. Let me say that again.
Long term care is not covered by Medicare. So it's
important for you to consider how you pay for those
services if needed. Right now, the Capitol strictets anywhere from
(47:01):
like sixteen to eighteen thousand dollars a month for a
long term care facility, and that's basic coverage. So a
lot of people will go and we'll do an irrevocable
Medicaid trust thinking that that's the answer, that's the panacea.
You're fooling yourself about that too, And I can go
into that in great detail. So there's a lot of options.
(47:22):
You can buy long term care insurance, you can do
the health seating these accounts, like I told you, while
you're working, you could basically act as a bumper. You
can self fund some of the responsibility. But long term
care is the greatest risk for all of us as
we age because it's changing. A lot of the states
are getting much more aggressive. New York State is getting
(47:42):
much more aggressive going after iras. There's different ways that
they calculate the distributions. It's not R and D. It's
based on life expectancy. You could be in a position
that you can impoblish your spouse because you do nothing.
You sit on the fence. You don't educate yourself on
what needs to get done. Let me summarize. You need
(48:05):
to sit down and regularly go over where you are,
what your goals are, what your circumstances are, and you
can modify and adjust based off of economic conditions, your family,
tax laws, etc. You need to sit down with your
retirement team at least once a year to ensure that
(48:29):
it remains aligned with what your current situation is, your goals,
your health, etc. Market fluctuations, I guarantee it will happen.
There will be another sell off in the markets. Guaranteed.
I've been doing for forty three years. I've seen numerous
downturns and downdrafts in the market. It will happen again.
(48:51):
Are you prepared? Are you prepared for life changing events,
change in health, unexpected expenses? Do you have a nine
to one to one portfolio. Are you tracking your spending?
Do you need to adjust a lot of our clients say, hey, Jesus, Dave,
you know we're getting too much money, well let's adjusted.
(49:11):
Or Dave, we're not getting enough money, well let's adjust it.
Seek professional guidance, whether it's with the retirement Planning Group,
anybody that comes into the retirement planning group, we always say,
go kick the tires to somebody else and see if
they can help you. Go see what the alternative is
(49:32):
to the retirement planning group, because we want to make
sure that you are comfortable with our investment style, how
we develop our strategies, and how we ultimately want to
protect you and your family from what is really the
last chapter of your life as far as financial management,
and that's retirement. And as I've said, creating a retirement
(49:54):
and condition distribution plan excuse me, is more than a assets.
It's strategically manning this money throughout your lifetime in order
to take the distributions that's necessary and building a plan
that will last a lifetime. It's an ongoing process. Hopefully,
(50:16):
enjoy today's show. If we could be assistance eight eight
eight five eight zero one nine nine, give us a
call God bless everybody. Enjoy your weekend. The information or
services discussed on this show is for informational purposes only
(50:36):
and is not intended to be personal financial advice. The
investments and services offered by US may not be suitable
for all investors. If you have any doubts as to
the merits of an investment, you should seek advice from
an independent financial advisor.
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