June 19, 2025 • 24 mins
We examine essential mid-year financial steps that could help you finish the year strong and brighten your financial future. Time flies by quickly, making it crucial to check in on your financial goals periodically rather than putting them off indefinitely.
• Consider saving for retirement early, even if in small amounts, to harness the power of compound interest
• Check your workplace retirement plans - many now offer automatic enrollment at 3%, but experts recommend aiming for 10-15% contribution rates
• Consider taking advantage of catch-up contributions at age 50 ($7,500 extra in 401k) and the new higher limits between ages 60-63 ($11,250 extra)
• Are you planning for a potentially 30+ year retirement, as people are living longer but retiring earlier?
• Consider Roth accounts for tax-free growth - even opening one with minimal contributions starts the important 5-year clock
• Have you developed a tax strategy for retirement as most retirement savings are in tax-deferred accounts requiring future taxation?
• Are you prepared for healthcare costs averaging $165,000 per person during retirement?
• Have you ensured your estate planning documents are current and properly prepared?
• Is it time to rebalance your investment portfolios to match your risk tolerance and time horizon?
Schedule a complimentary consultation at masterplanretire.com or call 770-980-9262 to get comprehensive retirement planning reports that show if you're on track.
Have a topic or question you'd like Mark and Evan to address in a future episode? Email us at info@masterplanretire.com or call 770-980-9262.
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Advisory services offered through MasterPlan Retirement Consultants, Inc., a Registered Investment Advisor in the state of Georgia. Insurance, tax and commodities services offered through Fricks and Associates, Inc. dba MasterPlan Retirement Consultants. The aforementioned are affiliated companies.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Evan (00:05):
Are you caught up with your mid-year financial goals?
Hi folks, thanks again forjoining us.
Welcome to Retirement Roadmapwith Master Plan Retirement
Consultants.
My name is Evan and with me, asalways, retirement Planner Mark
Fricks.
As hard as it is to believe, weare halfway through the year.
During the show, we're going toexamine some mid-year 2025
(00:27):
financial steps that could helpyou finish the year strong and
brighten your 2026.
I tell you, Mark, I think I'mavoiding the calendar.
I don't want to know that it'shalfway through 2025.
Mark (00:38):
I cannot believe it is halfway through 2025.
And you know, great show, Ithink for the time it is, but
again, time flies.
It's amazing.
We'll be singing jingle bellshere before we know it.
Evan (00:50):
No kidding, and I think it's important to have a show
like this to check in, because,especially when it feels like
time is just going quicker andquicker and I have two little
kids at home, so it also feelsexponentially fast to me- Not so
little anymore, though.
Four and six.
But you know they say what'sthe saying.
My wife reminded me last nightof the saying and it's the days
(01:11):
are long and the years are short.
And that's kind of how it feels,you know, when you got the
little kids, all theresponsibilities.
Sometimes it can feel, I meanit's beautiful, but sometimes
the days can feel like, oh, mygoodness, I don't know how I'm
gonna get through the end ofthis day.
But then, before you know it,another birthday for a kid.
Mark (01:25):
It's wild.
Well, you know the saying.
What's that?
Life is like a roll of toiletpaper.
The closer you get to the end,the faster it spins.
Evan (01:33):
That's true.
That's good, actually.
Write that one down.
Mark (01:36):
Maybe we can put up a diagram of that or something.
Evan (01:39):
But it's a great thing to do is to check in, because time
does get away from us andespecially with financial goals,
it's so easy to say "I'll start, I'll start next month or "I
need to put away more.
Or I need to check in on myinvestments or I'll.
I don't have time right now,I'll think about it next month
and then, pretty soon, we couldbe years down the road and there
are also very specific thingsto accomplish each year that you
(02:03):
can get behind on, and if youstay on top of them, they can
exponentially really set you upfor a strong retirement.
Mark (02:08):
Well, I can say from personal experience, just
talking about time, you know,when I was in my twenties and
thirties and had my firstcorporate jobs and began
starting some businesses and I'mlike, first of all, I'm
probably not going to make it toretirement, right, that's kind
of your feeling when you'reyounger.
But more importantly was, it'sso far away and I've got
priorities.
Now I've got little kids athome, like you're talking about,
I've got a new house payment,I've got you know, all this kind
(02:34):
of stuff going on.
And then that turns into ooh,my kids now have cars and I have
insurance.
Oh, now, now my kids are incollege and it's just, it's not
good.
If you put it off because ofthose kinds of reasons, you'll
never do it.
So go ahead and just startsmall.
Start with, you know, 2% atwork or something.
If you get a raise, at leasttake half of that and put it
into something at work orpersonal account or whatever.
I have a short-term savings andthen the long-term savings,
(02:56):
short-term being for that airconditioning is going to go out,
right.
The long-term is, like I said,is for retirement and hopefully
your employer or if you'reself-employed, you can do your
own thing.
But just start small.
Start with something, becauseif not, somewhere down the road
it could be 50, it could be 60.
You're going to panic andyou're going to be like I've not
(03:17):
done anything or I've done waytoo little.
And we have a lot of folks thatcome in here that have done a
great job.
We had other folks come in herethat have practically nothing
and they're in their 60s andwe're just saying we'll do
everything we can, but you'regoing to have to work this many
more years, you're going to haveto do this, and what if their
health doesn't hold out?
So we're not trying to scareanybody, we're just trying to
(03:39):
talk reality here, and so Ithink today's show is so vital
and I hope folks are listeningand I hope they take it to heart
.
Evan (03:47):
Yeah, it's never too early to start, and we'd like to say
it's never too late, I wish thatwere always true.
I wish that were always true,and that's the sober reality,
you know, there are alwaysstrategies, no matter what
situation you're in, but there'sso much more flexibility, so
much more freedom and controlthe earlier you take the reins
on the situation, which bringsus to the very first thing you
(04:07):
said, and putting away as muchas, even if it's starting small,
putting away as early aspossible.
Keep contributing folks andstay informed.
So making regular contributionsto your retirement account is
essential, but also stayingaware of changing rules can help
you avoid missed opportunitiesand grow your savings more
effectively.
Now the SECURE Act 2.0 hasoffered some new catch-up rules.
(04:31):
There are new auto-enrollmentrules.
First of all.
Starting in 2025, manyretirement plans will
automatically enroll workers ata 3% contribution rate.
That's increasing annually upto 10% to 15%, but this doesn't
apply to all plans, especiallysmaller or older ones, so you
may need to enroll yourselfmanually, especially if you've
(04:52):
been contributing for a while orbeen at this job for a while.
Avoid missing out on savingsand employer matches.
Regardless, always try to checkin, at least annually, with
your plan.
Mark (05:04):
Yeah, I've talked to so many folks that didn't even
realize, especially when you'reyounger.
You graduate from college orget into the workforce.
You go to work for a companyand maybe you don't even realize
they have a plan.
You don't really realize whatit's for.
The word retirement is almostforeign to you because you're so
young.
Be proactive, check it out.
If you're working for acorporation, if they haven't
(05:26):
alerted you to their plan, askthem, do something.
You will be so happy as you age.
If you start early, whether itbe small or not, the magic of
compound interest is amazing.
And so you know.
Plus you know if a companymatches things of that nature,
and so you know.
Plus you know if a companymatches things of that nature If
(05:47):
you start early.
And, by the way, if you'rechecking in at work or even if
you've been participating atwork.
Check on the Roth option.
Most companies now have a Rothoption.
I would much rather you putyour money into the Roth portion
.
You don't get a tax deduction,but hey, don't worry about it.
You'll never pay taxes on thatmoney again, ever, that's right.
And your kids won't pay taxeson that money if and when they
(06:07):
inherit it.
So but ask, check, be proactive.
Take a little bit of time outof your week and do that, and
again at this six month junctureof this year might be a great
time to take a day and just lookat all of this stuff.
Evan (06:20):
So with that new auto, enroll at 3%, that's fantastic.
However, 3% is not the finishline.
So if you're automaticallyenrolled, don't assume that's
enough.
Experts suggest aiming for 10to 15% contribution rate.
That can be difficult for a lotof people, but even small
increases over time can make abig difference.
Just as you said, mark, you getthat raise.
(06:42):
Maybe only take half of it homeand do something with the other
half, or live on the samebudget if you can and put away
as much as you can from thatraise.
Mark (06:50):
And if you are behind, there are the catch-ups at age
50 and there's a significantamount of money $7,500, I think
more that you can put in.
Over that $30,000, give or takethat you can put in.
And then certain ages ages 60through 63, you can do up to
$11,000 and some change.
That's exactly my next point.
Evan (07:10):
Catch up.
Mark (07:11):
Exactly right, but the point is this is that as you get
into your 50s, hopefully someof your expenses are coming off
the books.
Maybe the kids are gettingthrough college, maybe you're no
longer paying for their carinsurance and things like that.
So as these expenses fall off,don't just say, hey, now we can
buy that Mercedes or whatever.
(07:33):
It may be Not saying anythingwrong with that, buy a used one,
maybe, I don't know.
But a little bit of sacrificeso you can have that kind of
retirement that would really Idon't know, just be special.
I mean something maybe youthought was out of grasp just a
few years ago.
So use those those years.
Uh, if you are behind, don'tlose hope.
And so go ahead and get intothose numbers on what you're
(07:55):
saying.
Evan (07:55):
Our goal for retirement for all of our clients,
regardless of where they comefrom, is to try to get them as
close as possible to peace ofmind, and I and I think that
should be the goal for everybodywho wants to stop working and
then have just as much stress oranxiety in your life when
you're trying to maximize yourgolden years.
Mark (08:13):
And that peace of mind comes from two things.
Number one is knowing you'vesaved enough money, and that's
one thing we do with our reports.
Folks can go tomasterplanretirecom schedule a
complimentary consultation andone of the reports we'll run is
do you have enough money to lasta lifetime in retirement?
And we're going to include whatyou're saving from now until
retirement as well, so you havea real clear picture.
(08:35):
And then we will of course dosome stress testing.
Masterplanretirecom schedule nowbutton and basically these
reports will illustrate not only, hey, it will last a lifetime,
but what if taxes go up?
And maybe not even what if, butwhen taxes go up, what about
higher inflation?
What about bear markets?
What about long-term caresituations, healthcare
(08:57):
situations, all of these things,so that we kind of know what to
work on, so to speak.
So a great thing to takeadvantage of masterplanretirecom
schedule now button or give usa call at 770-980-9262.
But I mean having a clearerpicture of, hey, I'm headed in
the right direction or maybe Ineed to save a little bit more.
(09:18):
We'll again give you peace ofmind now, but also, because of
the planning we do peace of mindin retirement as well.
That's right.
Evan (09:28):
So, speaking of those catch-up rates, so at age 50 in
a 401k, you can contribute anadditional $7,500 to your 401k.
Also, in IRAs and Roths thatare individually held, you've
got an extra thousand dollarsthere.
So that 50 and up is a reallyimportant milestone.
Age of okay.
I have the opportunity to put alot more away in these
(09:49):
retirement accounts.
Am I able to do that?
How can I maximize that?
Now with Secure Act 2.0,there's new age contribution
bonuses between 60 and 63, andit is 150% of that 7,500, which
comes to $11,250 in your 401k asadditional catch-up bonus.
(10:10):
So that brings the total limitto 401ks in those age ranges to
$34,750 in 2025.
Mark (10:18):
If you're able to do that now that's another question
because that's a lot of money tobe able to put away, but the
opportunity being there isreally powerful for retirees,
again a great, a great catch-uptime and maybe you can't do it
starting age 50, but as youagain get into your mid-50s, as
again more expenses hopefullydrop off, um, you know, maybe
even at that point, as the kidsbegin leaving the nest, think
(10:39):
about maybe downsizing, spendinga little bit less money on your
house and your, yourelectricity and all that kind of
stuff.
Maybe you know, I mean, I lovenew cars, I love new used cars,
but maybe not having one everythree to four years, maybe, like
my last one.
I made it last, uh, ten and ahalf years.
Yeah, you know when I, when thedashboard started looking like
christmas trees, yeah, it wastime to to make a change.
(11:01):
But you know it felt nice nothaving a car payment for you
years type of thing, so that wasextra money I could save.
So it's the little things and Idon't want to get up here and
sound like, hey, live on breadand water or whatever, but track
your spending for a couple ofmonths and see where your
money's really going.
That Starbucks coffee for sixbucks I can make it at home for
(11:23):
50 cents.
Again, not fussing, not tryingto make people feel bad, but if
you really want to think aboutyour future.
It's the little things.
Get those credit cards paiddown.
Not only do you not want thatdebt in retirement, but what
you're paying for them whileyou're working.
The interest rates are crazy.
House payments I'm fine withYou're paying interest,
(11:45):
typically lower, on somethingthat's increasing in value Cars,
if you have to, okay, butdefinitely the credit cards and
those high-interest loans.
Stay away from those as much asyou can.
I'm just talking about againhaving a family meeting and
going over your budget andsaying this is really what we're
spending.
What do we not need to bespending money on?
Not trying to make you suffer,but a little bit of sacrifice
(12:08):
now could be a great 25, 35-yearretirement.
Evan (12:12):
A couple extra notes on the employer plans and then
we'll move on.
There's faster 401k access forpart-timers.
So part-time employees nowqualify for 401k plans after two
years, which was threepreviously, as long as they work
500 hours each year, even smallcontributions from part-time
work can compound intomeaningful retirement savings.
Then the last thing I'll say ifyou have a pension, if you are
(12:35):
blessed enough to have a pension, know your numbers, know your
projections, know your estimates, know what to expect.
That's going to go a reallylong way, especially when you
start getting down to planningyour income in retirement.
Next point, and we'll move awayfrom the 401k.
Mark (12:52):
I got to say something real quickly, though.
We do have a client that is Ithink he may be 80 now and he
works part-time.
Not because he needs to,they're fine.
He just keeps them younger,keeps them active, gets them out
of the house and he contributesto a 401k plan.
At work, you have theopportunity why wouldn't you?
And probably all of it, all ofhis income, is probably going
(13:13):
into the 401k plan because hereally doesn't need it.
Is he maxing out the Roth?
I don't remember.
I hope so We've talked about itTime to schedule a meeting.
Exactly.
But yeah, he doesn't need thetax deduction, so certainly I've
told him to put it that way.
But yeah, 80 years old andcontributing to a 401k.
Evan (13:32):
Yeah, that's great.
So plan for a long retirement.
That would be my next point.
Especially right now you'reabout halfway through the year,
many people underestimate thatretirement can last potentially
30 plus years and growing.
With a strategy to fund decadesof living, health care,
inflation, well-preparedretirees can fall short.
(13:53):
Working a little longer canalso boost savings and benefits,
and I think that's the biggestthing is understanding that our
time horizon, no matter who youare across the board, is
typically growing.
Now we have health concerns.
Some people have family historywhere they've passed earlier,
but with health care advances,technology advances, we're
seeing people project their agesmore and more and more higher,
(14:16):
higher, higher.
That's not going away.
Hopefully it's not going away,but that's the reality we live
in right now.
Mark (14:21):
Well, and you're seeing really both ends of the spectrum
.
People are living longer, butthey're also retiring earlier,
yep.
So now you get another two tofive years retiring earlier.
In many cases I know federalworkers who we work with a good
bit.
Evan (14:35):
People retiring in their 50s.
That's half your life.
Mark (14:37):
They can retire at 56, 57 years old, if they have enough
years in with a full pension andfull benefits.
That's a long time.
And then you live longer andyou know, maybe or maybe not,
those last few years may not bethe best years because we are
living longer, but they're.
You know this is causing morecomplications Alzheimer's,
dementia, mobility you knowproblems as well, which means
(15:02):
more health costs, and so it'sreally expanding a problem.
That and social security is.
You know it's not reallykeeping up with inflation.
So there's just a lot of thingsto look at and that's where
those reports come in as well.
The complimentary consultationreports will reveal all of this,
and so, again, you'll know notwhat to worry about.
(15:25):
It's like going to a doctor.
They tell me I have high bloodpressure.
I can go home and worry aboutit.
I can say, all right, doctor,tell me what to do about it.
That's what I want to do, asopposed to just kind of hiding
my face, closing my eyes andhoping for the best.
Evan (15:38):
Yeah.
Do you have an income plan?
Have you began projections onan income plan?
Have you even considered that?
Start by taking stock of yourretirement income sources social
security, do you have a pension?
Do you have a 401k, iras, roths?
Where can you create incomewhere there currently is none in
your retirement?
Have a plan.
If you've not done that foryourself, I highly recommend you
(16:01):
go to a retirement professional.
Obviously, we'd be happy tohave those reports ran for you,
but an income plan is, by andlarge, one of the most important
things as far as your longevityin retirement is concerned, and
make sure you go to someonethat is a true retirement
planner, not just an investor,not just an advisor that manages
(16:26):
your money.
Mark (16:27):
They really need to understand all the areas of
retirement.
I've counted between 12 and 15different areas that need to be
addressed in retirement.
Not everyone applies toeverybody, but most of them do
apply, and so you got to look atall these areas because they
all fit together.
I used the illustration theother day with a client that
it's like these old 500 piecepuzzles that my mom used to put
(16:50):
together when I was a kid andshe'd leave it set up for weeks
on a card table.
She'd come by and put in threeor four pieces at a time, just
when she wanted a break orsomething.
But your retirement picture isvery similar.
It's a puzzle and all thepieces have to come together and
the worst thing is basically Ifyou miss them two or three
pieces.
It's pretty frustrating whenyou finish the polo.
(17:11):
So anyway, it is many piecescoming together.
So make sure.
The whole point is make surethat you have somebody that can
sit down and run all thesedifferent reports.
Don't leave anything out.
Evan (17:23):
One of our favorite words Roth.
Okay, do you have a Roth?
Are you currently contributingto a Roth?
You're halfway through the year.
You have Roth contributionlimits for the year.
Are you able to maximize those?
Are you able to take advantageof this year as much as you can?
You have until, technically,until April of next year to
contribute for 2025.
(17:44):
Are you maximizing your Roth Ifyou do not have a Roth?
If you can't, even if you areunable to contribute to a Roth,
at least open a Roth.
Why is that, Mark,?
Mark (17:53):
You want to start the clock ticking, okay.
So there are certain penaltiesin a Roth in the first five
years.
So if you get it open, put $100into it or whatever, just to
get that date of it opening.
Then the five-year clock startsticking.
After five years it's totallypenalty-free if you're 59 1⁄2
and older, okay.
So even if you're 50 orwhatever, I'd open one and start
(18:15):
putting $25 a month into it orsomething, just to get that ball
rolling.
Evan (18:24):
But there is a clock ticking that has penalties on it
, and the Roth is just a smallportion of the overall tax
strategy.
Do you have a tax strategy inretirement?
Have you considered that foryourself?
Have you looked at what yourprojected tax bracket will be in
retirement?
Whether you look at it or not,I guarantee you one thing you
don't know what it's going to be.
We need a tax strategy in place.
We need a conversion strategy.
The simple truth of the matteris the majority of baby boomers
(18:46):
and retirees for the next 10plus years or more all have a
tax problem because the vastmajority of workers in today's
American workforce society haveput away their money in
tax-deferred vehicles, meaningevery withdrawal that they
intend to take in retirement isgoing to be taxed at whatever
rate they are at at the time,and every withdrawal adds to
(19:09):
that total income tax burden.
Mark (19:12):
And just so we're clear.
You know you're saying well,have I put money away in a tax
deferred?
If you're in a 401k traditional, if you're in a traditional
403b, a traditional thriftsavings plan, a traditional 457,
these are all pre-tax accounts.
You get a deduction but you'regoing to pay taxes, as Evan said
, as it comes out.
And, by the way, over those 30years, 40 years, it's grown very
(19:34):
large as well.
Even if you don't need thatmoney, the IRS slash government
forces you to start taking itout between the ages of 73 and
75, forced taxation.
And so again, those Roth typeaccounts, whether it be a
traditional Roth or some otheraccounts that we use, that money
is coming out tax free and theydon't force you to take it out.
(19:55):
So if you do need it, itdoesn't matter what your tax
bracket is, it's coming out free.
So they're so powerful, that'sright.
Evan (20:02):
Another point rebalance your portfolio with age.
Everyone has a different timehorizon.
When are you going to retire?
What's your risk tolerance?
Are you going to be using yourinvestments immediately in
retirement, or are they going tobe able to season longer
because you have other sourcesof income at your immediate
retirement?
Everyone's got a differentsituation.
Everyone has a different timehorizon for their investments,
(20:24):
but you need to make sure thatyour portfolios are rebalanced
to your risk tolerance and yourtime horizon.
Mark (20:32):
Yeah, and that's something that you probably need help
with.
Again, that's something we canhelp you with.
It's not just as simple, andmost accounts, or 401ks, things
like that, will have what wecall life cycle funds or freedom
funds or whatever.
Target date funds Target datefunds and you just say, okay, if
I'm going to retire in 2040,I'm going to put all my money in
(20:52):
the 2040 fund.
Nothing wrong with that.
I think that's probably a nicechoice if you don't pay much
attention to your account.
If you do pay more attention oryou need more help, I think
there are better ways.
But that's definitely betterthan just sticking in a money
market or two or three funds orone fund and just letting it
ride.
So we help our folks every daywith their at-work accounts,
(21:15):
making sure that they areproperly allocated.
Evan (21:19):
Two more points.
We're going to try to rushthrough these while still
keeping some good information inhere.
Number one you've got to planahead for health care costs, and
again, that's just saving andputting away.
Many retirees underestimateout-of-pocket medical expenses.
We've said this before.
The average is about $165,000over one lifetime, so that's
$330,000 for a couple.
That's healthcare costs alone,not including long-term care
(21:43):
costs, which is a whole otherconversation.
Both of those healthcare andlong-term care need a strategy.
Some of the older strategies nolonger work, so talk with a
professional.
That has to be part of youroverall retirement plan and then
finally have open legacyconversations.
Talk to your loved ones aboutyour financial values and legacy
wishes.
Start with general goals.
(22:04):
Expand the conversation overtime.
Include your financial advisorto ensure alignment and clarity.
Ensure alignment and clarity.
Here's a question, a check-infor the mid-year for you Are all
of your estate documentscurrent?
Do you have estate documents?
If not, that needs to happen.
Mark (22:18):
Yesterday, you know, one of the things we see all the
time when folks come in to seeus is if they have documents.
They were created back whentheir kids were little or they
were getting ready to take atrip or something like that.
Now their kids have it Nowtheir kids are yeah, exactly,
and so the documents have oldlanguage.
They don't have the right taxlanguage.
They don't have today'slanguage about digital.
(22:41):
You know items, how you can getinto somebody's bank account
things like that.
Evan (22:46):
I had a conversation with someone the other day who also
and a lot of people believe thisstill believe you can just
write something on a piece ofnotebook paper and have it
notarized and that that countsas a will.
There are so many wills gettingkicked out of probate these
days.
Make sure you do it the rightway.
Don't cut corners on somethingas important as your estate
documents.
Mark (23:05):
And even documents done by an attorney if they're not a
specialist in estate planning.
We're seeing mistakes there aswell, and it's not just the
documents.
You need to plan around thedocuments, by the way, get
documents, but we build the planaround to make sure
beneficiaries match up with yourwishes, to make sure we reduce
taxes, reduce probate whichreduces probate cost and
(23:27):
problems and your will beingadvertised all over the place.
So have a plan around it aswell.
We do that as part of ourholistic planning, so don't put
it off.
That's really important.
I'm glad you brought that up.
As far as the documents Don'tleave your family a mess, you
may think you have a long lifeahead.
I hope you do, but I could walkout tomorrow and pass away and
(23:50):
I want to make sure my stuff'stogether.
Evan (23:52):
That's right.
Mark (23:57):
That and pass away, and I want to make sure my stuff's
together.
That's right.
That's your mid-year checklistfor 2025, folks, thanks for
joining us.
Glad you did join us and untilwe see each other again, plan
well and prosper.
Take care.
This was Retirement RoadmapRadio with Mark Fricks of Master
Plan Retirement Consultants.
To schedule a complimentaryconsultation, go to
masterplanretirecom or call770-980-9262.
Thanks for listening andremember plan well and prosper.
Speaker 3 (24:20):
All matters discussed during this show are for
informational purposes only.
Each individual situation mayvary and the opinions expressed
here may not apply to everyone.
Materials presented arebelieved to be from reliable
sources and no representationscan be made as to its accuracy.
All ideas and informationshould be discussed in detail
with one of our qualifiedrepresentatives prior to
implementation.
Advisory services offered byMaster Plan Retirement
Consultants.
A registered investment advisorin the state of Georgia, mark
(24:41):
Fricks, and Master PlanRetirement Consultants are not
affiliated with or endorsed bythe Social Security
Administration or any othergovernment agency.
Are you caught up with your mid-year financial goals?
Hi folks, thanks again forjoining us.
Welcome to Retirement Roadmapwith Master Plan Retirement
Consultants.
My name is Evan and with me, asalways, retirement Planner Mark
Fricks.
As hard as it is to believe, weare halfway through the year.
During the show, we're going toexamine some mid-year 2025
(00:27):
financial steps that could helpyou finish the year strong and
brighten your 2026.
I tell you, Mark, I think I'mavoiding the calendar.
I don't want to know that it'shalfway through 2025.
Mark (00:38):
I cannot believe it is halfway through 2025.
And you know, great show, Ithink for the time it is, but
again, time flies.
It's amazing.
We'll be singing jingle bellshere before we know it.
Evan (00:50):
No kidding, and I think it's important to have a show
like this to check in, because,especially when it feels like
time is just going quicker andquicker and I have two little
kids at home, so it also feelsexponentially fast to me- Not so
little anymore, though.
Four and six.
But you know they say what'sthe saying.
My wife reminded me last nightof the saying and it's the days
(01:11):
are long and the years are short.
And that's kind of how it feels,you know, when you got the
little kids, all theresponsibilities.
Sometimes it can feel, I meanit's beautiful, but sometimes
the days can feel like, oh, mygoodness, I don't know how I'm
gonna get through the end ofthis day.
But then, before you know it,another birthday for a kid.
Mark (01:25):
It's wild.
Well, you know the saying.
What's that?
Life is like a roll of toiletpaper.
The closer you get to the end,the faster it spins.
Evan (01:33):
That's true.
That's good, actually.
Write that one down.
Mark (01:36):
Maybe we can put up a diagram of that or something.
Evan (01:39):
But it's a great thing to do is to check in, because time
does get away from us andespecially with financial goals,
it's so easy to say "I'll start, I'll start next month or "I
need to put away more.
Or I need to check in on myinvestments or I'll.
I don't have time right now,I'll think about it next month
and then, pretty soon, we couldbe years down the road and there
are also very specific thingsto accomplish each year that you
(02:03):
can get behind on, and if youstay on top of them, they can
exponentially really set you upfor a strong retirement.
Mark (02:08):
Well, I can say from personal experience, just
talking about time, you know,when I was in my twenties and
thirties and had my firstcorporate jobs and began
starting some businesses and I'mlike, first of all, I'm
probably not going to make it toretirement, right, that's kind
of your feeling when you'reyounger.
But more importantly was, it'sso far away and I've got
priorities.
Now I've got little kids athome, like you're talking about,
I've got a new house payment,I've got you know, all this kind
(02:34):
of stuff going on.
And then that turns into ooh,my kids now have cars and I have
insurance.
Oh, now, now my kids are incollege and it's just, it's not
good.
If you put it off because ofthose kinds of reasons, you'll
never do it.
So go ahead and just startsmall.
Start with, you know, 2% atwork or something.
If you get a raise, at leasttake half of that and put it
into something at work orpersonal account or whatever.
I have a short-term savings andthen the long-term savings,
(02:56):
short-term being for that airconditioning is going to go out,
right.
The long-term is, like I said,is for retirement and hopefully
your employer or if you'reself-employed, you can do your
own thing.
But just start small.
Start with something, becauseif not, somewhere down the road
it could be 50, it could be 60.
You're going to panic andyou're going to be like I've not
(03:17):
done anything or I've done waytoo little.
And we have a lot of folks thatcome in here that have done a
great job.
We had other folks come in herethat have practically nothing
and they're in their 60s andwe're just saying we'll do
everything we can, but you'regoing to have to work this many
more years, you're going to haveto do this, and what if their
health doesn't hold out?
So we're not trying to scareanybody, we're just trying to
(03:39):
talk reality here, and so Ithink today's show is so vital
and I hope folks are listeningand I hope they take it to heart
.
Evan (03:47):
Yeah, it's never too early to start, and we'd like to say
it's never too late, I wish thatwere always true.
I wish that were always true,and that's the sober reality,
you know, there are alwaysstrategies, no matter what
situation you're in, but there'sso much more flexibility, so
much more freedom and controlthe earlier you take the reins
on the situation, which bringsus to the very first thing you
(04:07):
said, and putting away as muchas, even if it's starting small,
putting away as early aspossible.
Keep contributing folks andstay informed.
So making regular contributionsto your retirement account is
essential, but also stayingaware of changing rules can help
you avoid missed opportunitiesand grow your savings more
effectively.
Now the SECURE Act 2.0 hasoffered some new catch-up rules.
(04:31):
There are new auto-enrollmentrules.
First of all.
Starting in 2025, manyretirement plans will
automatically enroll workers ata 3% contribution rate.
That's increasing annually upto 10% to 15%, but this doesn't
apply to all plans, especiallysmaller or older ones, so you
may need to enroll yourselfmanually, especially if you've
(04:52):
been contributing for a while orbeen at this job for a while.
Avoid missing out on savingsand employer matches.
Regardless, always try to checkin, at least annually, with
your plan.
Mark (05:04):
Yeah, I've talked to so many folks that didn't even
realize, especially when you'reyounger.
You graduate from college orget into the workforce.
You go to work for a companyand maybe you don't even realize
they have a plan.
You don't really realize whatit's for.
The word retirement is almostforeign to you because you're so
young.
Be proactive, check it out.
If you're working for acorporation, if they haven't
(05:26):
alerted you to their plan, askthem, do something.
You will be so happy as you age.
If you start early, whether itbe small or not, the magic of
compound interest is amazing.
And so you know.
Plus you know if a companymatches things of that nature,
and so you know.
Plus you know if a companymatches things of that nature If
(05:47):
you start early.
And, by the way, if you'rechecking in at work or even if
you've been participating atwork.
Check on the Roth option.
Most companies now have a Rothoption.
I would much rather you putyour money into the Roth portion
.
You don't get a tax deduction,but hey, don't worry about it.
You'll never pay taxes on thatmoney again, ever, that's right.
And your kids won't pay taxeson that money if and when they
(06:07):
inherit it.
So but ask, check, be proactive.
Take a little bit of time outof your week and do that, and
again at this six month junctureof this year might be a great
time to take a day and just lookat all of this stuff.
Evan (06:20):
So with that new auto, enroll at 3%, that's fantastic.
However, 3% is not the finishline.
So if you're automaticallyenrolled, don't assume that's
enough.
Experts suggest aiming for 10to 15% contribution rate.
That can be difficult for a lotof people, but even small
increases over time can make abig difference.
Just as you said, mark, you getthat raise.
(06:42):
Maybe only take half of it homeand do something with the other
half, or live on the samebudget if you can and put away
as much as you can from thatraise.
Mark (06:50):
And if you are behind, there are the catch-ups at age
50 and there's a significantamount of money $7,500, I think
more that you can put in.
Over that $30,000, give or takethat you can put in.
And then certain ages ages 60through 63, you can do up to
$11,000 and some change.
That's exactly my next point.
Evan (07:10):
Catch up.
Mark (07:11):
Exactly right, but the point is this is that as you get
into your 50s, hopefully someof your expenses are coming off
the books.
Maybe the kids are gettingthrough college, maybe you're no
longer paying for their carinsurance and things like that.
So as these expenses fall off,don't just say, hey, now we can
buy that Mercedes or whatever.
(07:33):
It may be Not saying anythingwrong with that, buy a used one,
maybe, I don't know.
But a little bit of sacrificeso you can have that kind of
retirement that would really Idon't know, just be special.
I mean something maybe youthought was out of grasp just a
few years ago.
So use those those years.
Uh, if you are behind, don'tlose hope.
And so go ahead and get intothose numbers on what you're
(07:55):
saying.
Evan (07:55):
Our goal for retirement for all of our clients,
regardless of where they comefrom, is to try to get them as
close as possible to peace ofmind, and I and I think that
should be the goal for everybodywho wants to stop working and
then have just as much stress oranxiety in your life when
you're trying to maximize yourgolden years.
Mark (08:13):
And that peace of mind comes from two things.
Number one is knowing you'vesaved enough money, and that's
one thing we do with our reports.
Folks can go tomasterplanretirecom schedule a
complimentary consultation andone of the reports we'll run is
do you have enough money to lasta lifetime in retirement?
And we're going to include whatyou're saving from now until
retirement as well, so you havea real clear picture.
(08:35):
And then we will of course dosome stress testing.
Masterplanretirecom schedule nowbutton and basically these
reports will illustrate not only, hey, it will last a lifetime,
but what if taxes go up?
And maybe not even what if, butwhen taxes go up, what about
higher inflation?
What about bear markets?
What about long-term caresituations, healthcare
(08:57):
situations, all of these things,so that we kind of know what to
work on, so to speak.
So a great thing to takeadvantage of masterplanretirecom
schedule now button or give usa call at 770-980-9262.
But I mean having a clearerpicture of, hey, I'm headed in
the right direction or maybe Ineed to save a little bit more.
(09:18):
We'll again give you peace ofmind now, but also, because of
the planning we do peace of mindin retirement as well.
That's right.
Evan (09:28):
So, speaking of those catch-up rates, so at age 50 in
a 401k, you can contribute anadditional $7,500 to your 401k.
Also, in IRAs and Roths thatare individually held, you've
got an extra thousand dollarsthere.
So that 50 and up is a reallyimportant milestone.
Age of okay.
I have the opportunity to put alot more away in these
(09:49):
retirement accounts.
Am I able to do that?
How can I maximize that?
Now with Secure Act 2.0,there's new age contribution
bonuses between 60 and 63, andit is 150% of that 7,500, which
comes to $11,250 in your 401k asadditional catch-up bonus.
(10:10):
So that brings the total limitto 401ks in those age ranges to
$34,750 in 2025.
Mark (10:18):
If you're able to do that now that's another question
because that's a lot of money tobe able to put away, but the
opportunity being there isreally powerful for retirees,
again a great, a great catch-uptime and maybe you can't do it
starting age 50, but as youagain get into your mid-50s, as
again more expenses hopefullydrop off, um, you know, maybe
even at that point, as the kidsbegin leaving the nest, think
(10:39):
about maybe downsizing, spendinga little bit less money on your
house and your, yourelectricity and all that kind of
stuff.
Maybe you know, I mean, I lovenew cars, I love new used cars,
but maybe not having one everythree to four years, maybe, like
my last one.
I made it last, uh, ten and ahalf years.
Yeah, you know when I, when thedashboard started looking like
christmas trees, yeah, it wastime to to make a change.
(11:01):
But you know it felt nice nothaving a car payment for you
years type of thing, so that wasextra money I could save.
So it's the little things and Idon't want to get up here and
sound like, hey, live on breadand water or whatever, but track
your spending for a couple ofmonths and see where your
money's really going.
That Starbucks coffee for sixbucks I can make it at home for
(11:23):
50 cents.
Again, not fussing, not tryingto make people feel bad, but if
you really want to think aboutyour future.
It's the little things.
Get those credit cards paiddown.
Not only do you not want thatdebt in retirement, but what
you're paying for them whileyou're working.
The interest rates are crazy.
House payments I'm fine withYou're paying interest,
(11:45):
typically lower, on somethingthat's increasing in value Cars,
if you have to, okay, butdefinitely the credit cards and
those high-interest loans.
Stay away from those as much asyou can.
I'm just talking about againhaving a family meeting and
going over your budget andsaying this is really what we're
spending.
What do we not need to bespending money on?
Not trying to make you suffer,but a little bit of sacrifice
(12:08):
now could be a great 25, 35-yearretirement.
Evan (12:12):
A couple extra notes on the employer plans and then
we'll move on.
There's faster 401k access forpart-timers.
So part-time employees nowqualify for 401k plans after two
years, which was threepreviously, as long as they work
500 hours each year, even smallcontributions from part-time
work can compound intomeaningful retirement savings.
Then the last thing I'll say ifyou have a pension, if you are
(12:35):
blessed enough to have a pension, know your numbers, know your
projections, know your estimates, know what to expect.
That's going to go a reallylong way, especially when you
start getting down to planningyour income in retirement.
Next point, and we'll move awayfrom the 401k.
Mark (12:52):
I got to say something real quickly, though.
We do have a client that is Ithink he may be 80 now and he
works part-time.
Not because he needs to,they're fine.
He just keeps them younger,keeps them active, gets them out
of the house and he contributesto a 401k plan.
At work, you have theopportunity why wouldn't you?
And probably all of it, all ofhis income, is probably going
(13:13):
into the 401k plan because hereally doesn't need it.
Is he maxing out the Roth?
I don't remember.
I hope so We've talked about itTime to schedule a meeting.
Exactly.
But yeah, he doesn't need thetax deduction, so certainly I've
told him to put it that way.
But yeah, 80 years old andcontributing to a 401k.
Evan (13:32):
Yeah, that's great.
So plan for a long retirement.
That would be my next point.
Especially right now you'reabout halfway through the year,
many people underestimate thatretirement can last potentially
30 plus years and growing.
With a strategy to fund decadesof living, health care,
inflation, well-preparedretirees can fall short.
(13:53):
Working a little longer canalso boost savings and benefits,
and I think that's the biggestthing is understanding that our
time horizon, no matter who youare across the board, is
typically growing.
Now we have health concerns.
Some people have family historywhere they've passed earlier,
but with health care advances,technology advances, we're
seeing people project their agesmore and more and more higher,
(14:16):
higher, higher.
That's not going away.
Hopefully it's not going away,but that's the reality we live
in right now.
Mark (14:21):
Well, and you're seeing really both ends of the spectrum
.
People are living longer, butthey're also retiring earlier,
yep.
So now you get another two tofive years retiring earlier.
In many cases I know federalworkers who we work with a good
bit.
Evan (14:35):
People retiring in their 50s.
That's half your life.
Mark (14:37):
They can retire at 56, 57 years old, if they have enough
years in with a full pension andfull benefits.
That's a long time.
And then you live longer andyou know, maybe or maybe not,
those last few years may not bethe best years because we are
living longer, but they're.
You know this is causing morecomplications Alzheimer's,
dementia, mobility you knowproblems as well, which means
(15:02):
more health costs, and so it'sreally expanding a problem.
That and social security is.
You know it's not reallykeeping up with inflation.
So there's just a lot of thingsto look at and that's where
those reports come in as well.
The complimentary consultationreports will reveal all of this,
and so, again, you'll know notwhat to worry about.
(15:25):
It's like going to a doctor.
They tell me I have high bloodpressure.
I can go home and worry aboutit.
I can say, all right, doctor,tell me what to do about it.
That's what I want to do, asopposed to just kind of hiding
my face, closing my eyes andhoping for the best.
Evan (15:38):
Yeah.
Do you have an income plan?
Have you began projections onan income plan?
Have you even considered that?
Start by taking stock of yourretirement income sources social
security, do you have a pension?
Do you have a 401k, iras, roths?
Where can you create incomewhere there currently is none in
your retirement?
Have a plan.
If you've not done that foryourself, I highly recommend you
(16:01):
go to a retirement professional.
Obviously, we'd be happy tohave those reports ran for you,
but an income plan is, by andlarge, one of the most important
things as far as your longevityin retirement is concerned, and
make sure you go to someonethat is a true retirement
planner, not just an investor,not just an advisor that manages
(16:26):
your money.
Mark (16:27):
They really need to understand all the areas of
retirement.
I've counted between 12 and 15different areas that need to be
addressed in retirement.
Not everyone applies toeverybody, but most of them do
apply, and so you got to look atall these areas because they
all fit together.
I used the illustration theother day with a client that
it's like these old 500 piecepuzzles that my mom used to put
(16:50):
together when I was a kid andshe'd leave it set up for weeks
on a card table.
She'd come by and put in threeor four pieces at a time, just
when she wanted a break orsomething.
But your retirement picture isvery similar.
It's a puzzle and all thepieces have to come together and
the worst thing is basically Ifyou miss them two or three
pieces.
It's pretty frustrating whenyou finish the polo.
(17:11):
So anyway, it is many piecescoming together.
So make sure.
The whole point is make surethat you have somebody that can
sit down and run all thesedifferent reports.
Don't leave anything out.
Evan (17:23):
One of our favorite words Roth.
Okay, do you have a Roth?
Are you currently contributingto a Roth?
You're halfway through the year.
You have Roth contributionlimits for the year.
Are you able to maximize those?
Are you able to take advantageof this year as much as you can?
You have until, technically,until April of next year to
contribute for 2025.
(17:44):
Are you maximizing your Roth Ifyou do not have a Roth?
If you can't, even if you areunable to contribute to a Roth,
at least open a Roth.
Why is that, Mark,?
Mark (17:53):
You want to start the clock ticking, okay.
So there are certain penaltiesin a Roth in the first five
years.
So if you get it open, put $100into it or whatever, just to
get that date of it opening.
Then the five-year clock startsticking.
After five years it's totallypenalty-free if you're 59 1⁄2
and older, okay.
So even if you're 50 orwhatever, I'd open one and start
(18:15):
putting $25 a month into it orsomething, just to get that ball
rolling.
Evan (18:24):
But there is a clock ticking that has penalties on it
, and the Roth is just a smallportion of the overall tax
strategy.
Do you have a tax strategy inretirement?
Have you considered that foryourself?
Have you looked at what yourprojected tax bracket will be in
retirement?
Whether you look at it or not,I guarantee you one thing you
don't know what it's going to be.
We need a tax strategy in place.
We need a conversion strategy.
The simple truth of the matteris the majority of baby boomers
(18:46):
and retirees for the next 10plus years or more all have a
tax problem because the vastmajority of workers in today's
American workforce society haveput away their money in
tax-deferred vehicles, meaningevery withdrawal that they
intend to take in retirement isgoing to be taxed at whatever
rate they are at at the time,and every withdrawal adds to
(19:09):
that total income tax burden.
Mark (19:12):
And just so we're clear.
You know you're saying well,have I put money away in a tax
deferred?
If you're in a 401k traditional, if you're in a traditional
403b, a traditional thriftsavings plan, a traditional 457,
these are all pre-tax accounts.
You get a deduction but you'regoing to pay taxes, as Evan said
, as it comes out.
And, by the way, over those 30years, 40 years, it's grown very
(19:34):
large as well.
Even if you don't need thatmoney, the IRS slash government
forces you to start taking itout between the ages of 73 and
75, forced taxation.
And so again, those Roth typeaccounts, whether it be a
traditional Roth or some otheraccounts that we use, that money
is coming out tax free and theydon't force you to take it out.
(19:55):
So if you do need it, itdoesn't matter what your tax
bracket is, it's coming out free.
So they're so powerful, that'sright.
Evan (20:02):
Another point rebalance your portfolio with age.
Everyone has a different timehorizon.
When are you going to retire?
What's your risk tolerance?
Are you going to be using yourinvestments immediately in
retirement, or are they going tobe able to season longer
because you have other sourcesof income at your immediate
retirement?
Everyone's got a differentsituation.
Everyone has a different timehorizon for their investments,
(20:24):
but you need to make sure thatyour portfolios are rebalanced
to your risk tolerance and yourtime horizon.
Mark (20:32):
Yeah, and that's something that you probably need help
with.
Again, that's something we canhelp you with.
It's not just as simple, andmost accounts, or 401ks, things
like that, will have what wecall life cycle funds or freedom
funds or whatever.
Target date funds Target datefunds and you just say, okay, if
I'm going to retire in 2040,I'm going to put all my money in
(20:52):
the 2040 fund.
Nothing wrong with that.
I think that's probably a nicechoice if you don't pay much
attention to your account.
If you do pay more attention oryou need more help, I think
there are better ways.
But that's definitely betterthan just sticking in a money
market or two or three funds orone fund and just letting it
ride.
So we help our folks every daywith their at-work accounts,
(21:15):
making sure that they areproperly allocated.
Evan (21:19):
Two more points.
We're going to try to rushthrough these while still
keeping some good information inhere.
Number one you've got to planahead for health care costs, and
again, that's just saving andputting away.
Many retirees underestimateout-of-pocket medical expenses.
We've said this before.
The average is about $165,000over one lifetime, so that's
$330,000 for a couple.
That's healthcare costs alone,not including long-term care
(21:43):
costs, which is a whole otherconversation.
Both of those healthcare andlong-term care need a strategy.
Some of the older strategies nolonger work, so talk with a
professional.
That has to be part of youroverall retirement plan and then
finally have open legacyconversations.
Talk to your loved ones aboutyour financial values and legacy
wishes.
Start with general goals.
(22:04):
Expand the conversation overtime.
Include your financial advisorto ensure alignment and clarity.
Ensure alignment and clarity.
Here's a question, a check-infor the mid-year for you Are all
of your estate documentscurrent?
Do you have estate documents?
If not, that needs to happen.
Mark (22:18):
Yesterday, you know, one of the things we see all the
time when folks come in to seeus is if they have documents.
They were created back whentheir kids were little or they
were getting ready to take atrip or something like that.
Now their kids have it Nowtheir kids are yeah, exactly,
and so the documents have oldlanguage.
They don't have the right taxlanguage.
They don't have today'slanguage about digital.
(22:41):
You know items, how you can getinto somebody's bank account
things like that.
Evan (22:46):
I had a conversation with someone the other day who also
and a lot of people believe thisstill believe you can just
write something on a piece ofnotebook paper and have it
notarized and that that countsas a will.
There are so many wills gettingkicked out of probate these
days.
Make sure you do it the rightway.
Don't cut corners on somethingas important as your estate
documents.
Mark (23:05):
And even documents done by an attorney if they're not a
specialist in estate planning.
We're seeing mistakes there aswell, and it's not just the
documents.
You need to plan around thedocuments, by the way, get
documents, but we build the planaround to make sure
beneficiaries match up with yourwishes, to make sure we reduce
taxes, reduce probate whichreduces probate cost and
(23:27):
problems and your will beingadvertised all over the place.
So have a plan around it aswell.
We do that as part of ourholistic planning, so don't put
it off.
That's really important.
I'm glad you brought that up.
As far as the documents Don'tleave your family a mess, you
may think you have a long lifeahead.
I hope you do, but I could walkout tomorrow and pass away and
(23:50):
I want to make sure my stuff'stogether.
Evan (23:52):
That's right.
Mark (23:57):
That and pass away, and I want to make sure my stuff's
together.
That's right.
That's your mid-year checklistfor 2025, folks, thanks for
joining us.
Glad you did join us and untilwe see each other again, plan
well and prosper.
Take care.
This was Retirement RoadmapRadio with Mark Fricks of Master
Plan Retirement Consultants.
To schedule a complimentaryconsultation, go to
masterplanretirecom or call770-980-9262.
Thanks for listening andremember plan well and prosper.
Speaker 3 (24:20):
All matters discussed during this show are for
informational purposes only.
Each individual situation mayvary and the opinions expressed
here may not apply to everyone.
Materials presented arebelieved to be from reliable
sources and no representationscan be made as to its accuracy.
All ideas and informationshould be discussed in detail
with one of our qualifiedrepresentatives prior to
implementation.
Advisory services offered byMaster Plan Retirement
Consultants.
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