Simply Money

Episode Transcript

(00:00):
The main question is to see what'scoming, whether it's a decline that permanent.
Mark Levins and Night at ten ohsix on fifty five KRZ. Tonight,
we're talking the true habits of thosewho are really successful investors, The
Magic of Your flour one K andeverybody's favorite game, Retirement Factor Fiction.

(00:25):
You're listening to Simply Money because I'mby all Worth Financial. I Meani Wagner
along with Steve Ruby. If youare dreaming of the day when Monday comes
along and you no longer have todrag yourself out of bed and acrosstown to
that job, or maybe you justwant to tell your boss to take that
job and shove it, there arecertain things that you have to do to
be able to have that choice aboutwhether you're going to retire or whether you're

(00:49):
going to continue working. And sothat's what we're going to focus on here.
Like, if you are someone whotruly is working toward retirement as being
a major goal, these are thethings you've got to be focusing on.
Yeah, and you don't have tobe a millionaire to develop these habits,
but it can certainly help you developinto a millionaire. And you know,
the first step really it's common sensealmost, and that's finding somewhere to start

(01:11):
saving that it's getting a handle onyour financial situation, understanding how you're spending,
how much you're earning, and spendless than you earn. It's as
simple as that. I remember whenI was in college, someone came and
spoke to a class and it actuallywasn't a personal finance class, but was
talking about the power of compounding.And at the time, I remember being

(01:33):
like, oh, I'm still goingto do that. I'm STI going to
do that. And then the firstjob came round and I was getting literally
paid I think in peanuts, andI mean there was not a dime leftover
to be saving for in the fourto one k and so I, you
know, made up all the excusesin the world like people do, and
didn't start saving until several years afterthat. When I did, after a

(01:53):
couple of years after that, lookingat my floural one case statement, I
was like, oh, this isit, right, the power of compounding
in the you know, I didn'tstart when I should have, but I
did start. And I have talkedto many people through the years who will
say, well, yeah, Iget it, and I'm putting a little
bit aside. But you know,when my kid finishes playing travel soccer,

(02:15):
or we're going to take this bigfamily vacation this year. Next year,
yep, next year. There's alwaysa reason that you can find or reasons
that you can find why saving rightnow just is an option. But that
isn't accurate. There are ways thatwe can If you have a four to
one K, if you have accessto a four one K, if you
have access to free money via acompany match, it doesn't matter how small

(02:38):
you start. Just start put inthat one percent, put in that two
percent, even if it takes acouple of years to get up to the
full company match. Find a wayto make it happen by having an understanding
of how you're spending, how muchyou're earning, and just spending a little
bit less than that. Sony,I was talking to a friend of mine
recently who feels very intimidated about moneybecause of budgeting, like she hates the

(03:00):
thought of it, and she's picturing, you know, these color coded spreadsheets,
and I said, I think agreat place to start is like the
fifty to thirty twenty sort of wayof living right fifty percent towards your needs.
So it's your mortgage and the billsthat you have to pay, and
then thirty percent is your once.But the key here is the twenty percent
that you're saving. The thirty percent. That's the squishy part. If you

(03:22):
don't have thirty percent that can gotowards the things that you want to that
are fun, then you might haveless to go to that. But the
key is that you're automatically saving twentypercent. It was the craziest thing.
It was like a light bulb wentoff in her head. She was like,
that's it. Yeah, yeah,And it's like, gosh, it's
so easy. It doesn't have tobe complicated. But you have to make
saving a regular part of what youdo, and it has to be automatic.

(03:45):
It can't be okay, well atthe end of the month, yes,
I have right. You're never goingto have anything left at the end
of the month. It is savefirst. What's left at the end of
the month, that's what you decideI'm going to eat out on or I'm
going to plan something fun with.But you got to make the savings automatter.
I like that. You call itthe squishy part, the thirty percent
that's where there's wiggle room to makebetter decisions with how you're spending your money,

(04:10):
because finding somewhere to get started isbetter than not getting started. And
I think when we talk about savings, one kind of subcomponent of that,
of course, is having a wellfunded emergency fund. Of course, we
would say start there three to sixmonths of those critical expenses. That way,
it's not if something goes haywire.It's when you know something unexpected,
a medical diagnosis, or something breaksdown. You have the money and so

(04:31):
you're not pulling it out of yourfollowing life place on a credit card.
Life will throw your curveball. Somaking sure that you are planning accordingly with
that emergency fund. And speaking ofa plan, you know, let's say
you're at a point in your lifeyou have competing financial priorities. You're trying
to understand how to balance debt withsupporting children and maybe older parents that need
your help, or whatever that mightbe. Again, there's always reasons that

(04:55):
we can find why now is notthe best time to save. But if
you sit down with a fiduciary financialplanner that can help you organize your financial
needs and goals and priorities so thatyou can have a better understanding of what
you need to save for to maintaina standard of living in the long run,
then that is a great step inthe right direction because think of your
financial plan as a blueprint for yourmoney. You're listening to Simply Money presented

(05:19):
by all Worth Financial. I MeaniWagner along with Steve Ruby as we talk
about the fact that if someday youwant financial independence, to choice to either
continue working or to walk away fromthat job, the things that you have
to do to get there and tobe successful. You mentioned developing a plan,
and I think that is the foundationof it all because you lay out

(05:41):
what your goals are with your money. It's like giving your money a job.
And I know plenty of people whoreally struggle, Like they'll say,
yeah, I do want to retire, but I want to go on trips
too, and I really want anew car, and I really want XYZ.
If you are someone who has tobe visual, I have seen this
work for people whatever retirement, goingto look for it, like for you,
if it's your grandkids, if itis going to the beach or traveling.

(06:04):
More often, put a picture ofit in your wallet or in your
mirror. Something that is every timeyou look at it, it's going to
remind you that's my goal. Andit's kind of like your touch tree here.
It's like you keep going back tothat, and then you measure up
all the other money decisions against them. Do I really need these things on
Amazon? Do we really need toeat out for the third night this week?

(06:25):
No? Because I really want tobe able to help our kids pay
for college. I really want tobe able to retire or choose to retire
when I'm sixty two. It justkeeps taking you back, and it's a
very visual way of saying, no, here's my goal, and I think
your plan has to be a bigpart of that. I would say that
a robust, holistic financial plan thatlooks at your entire financial situation in a

(06:47):
perfect world, it will enable youto continue living the life that you want
to live up into and through retirement. Yeah, so ideally we find ways
to not make sacrifices well still savingenough. Of course, there needs to
have You need to have the meansto be able to do that, but
a financial planner is going to helpyou organize that to and through retirement.

(07:08):
Most of us have had our leanyears where we ate Ramen, noodles and
taco bell when we were in college, right or maybe during that first job.
No one wants to think about goingback to that when you retire.
Yeah, no, thank you,I'm good without that. Exactly great,
and they're done that. This iswhy we need to have a long term
mindset as well. So this issomething that is concerning to me. I

(07:30):
saw data recently that showed that theaverage holding period for US stocks was just
ten months in twenty twenty two,down from about five years all the way
back in the seventies. That isa big concern for me, because people
attempting to time the market and notfocusing on the long term can throw a
wrench in their financial plan. AndI was thinking about this a little bit.

(07:51):
I almost feel like it's probably asymptom of easier access to information that
the internet, social media, ornews outlets. It's important to remember that
these places that are trying to getyou to watch a video, to click
on something on social media, theydon't have a fiduciary responsibility to make sure
you're making the best decision for yourself. So focusing on the long term and

(08:13):
blocking out some of the noise isa means to it's a way to be
successful over the long run. Iremember when I was in college, I
had a friend who, even atthat time, was heavily invested in stocks,
and so whenever you went into hisapartment, it was always the stock
ticker at the bottom of the screen, right. He had to seek that
out. Gonner. Those days,you literally jump online, you literally jump

(08:39):
on social media, whatever it is. We're bombarded with information, and I
think it's really easy to feel likeyou have to do something with that information.
Yes, especially not with your money, because you've set that long term
plan, you've got the long termmindset, and making adjustments to that weekly,
daily, monthly is going to takeyou far off of the right path.

(09:01):
And I know it almost feels likeyou should be doing something, but
it's the exact office. Charlie CharlieMunger. He was Buffett's right hand man.
He's a smart guy. Yeah,long term vice chairman of Berkshire Hathway.
Unfortunately he passed away last year.He was in his nineties and he
almost side hundred years old. Nonetheless, he was a proponent of long term
investing and obviously the power of compounding, and his quote was investing is where

(09:24):
you find a great few companies andthen sit on your behind. Yeah he
didn't say behind, but whatever onthe radio. So I'm being careful.
It's important to have that long termmindset, no matter what noise is out
there, because if you have along term plan, and most of us
do. We want to make sureour money lives longer than we do at
the end of the day, thennot making decisions based on short term noise

(09:46):
is extremely important. And a hugepart of that is being diversified. Right
your four to one K, yourinvestments aren't necessarily in single companies. They're
you know, index funds attract thingslike the S and P five hundreds,
so that you own pieces of alot of the large companies that make up
the American economy. And then beyondthat, not just stocks, but we're

(10:07):
talking about bonds, and then maybeyou've got larger companies, smaller companies,
international companies, but really being trulydiversified, because there are going to be
some years where it's a bad yearfor tech companies, it's a bad year
for you name it, and thenif you're diversified, hopefully it's a good
year and another sector and that kindof makes up where your losses are and

(10:28):
you know, hopefully it is thereality of the situation. I want to
point out because if you look atreturns of different subasset classes, one year
one's going to be great, anotheryear it's going to be awful. And
that means that volatility is also atime for buying. There's opportunities to rebalance.
If you have cash on the sidelines, there's opportunities to put it to

(10:48):
work. When we're investing for thelong term and we do run into some
volatility, remember that we can treatthose those potential downturns as opportunities, especially
when we have a diversified portfolio.I think for those who are truly successful
when it comes to money, whenyou hear the word taxes, you don't
think about just tax preparation, right, that's what you do to get ready
to file your taxes in April everyyear. I'm talking about tax planning,

(11:11):
which happens year round, and it'sa strategy. I mean, for those
of you who love sports, right, there's always a strategy behind the winningest
teams. This is a strategy thatyou have for your money, and it's
understanding the system. And I'm notsaying you get to beat the system,
but the more you understand it,the more money you get to keep in
your own pocket. And I thinkthis also can be part of long term

(11:33):
planning and retiring successfully. Here's theall Worth advice. It's not easy,
but if you are going to adoptthese habits, you're going to have a
lot more choices later in life,and hopefully they don't involve eating ram of
noodles like you did in college.Coming up next, is there such a
thing as good debt? Will answerto that question for you. You're listening
to Simply Money, presented by allWorth Financial here in fifty five KRC the

(11:56):
talk station say Worth Financial a registeredinvestment advisory firm. Any ideas presented during
this program are not intended to providespecific financial advice. You should consult your
own financial advisor, tax consultant,or a state planning attorney to conduct your
own due diligence. You're listening toSimply Money present of I all Worth Financial,

(12:20):
I mean Wagner Law with Steve Ruby. If you can't listen to our
show every night, you do nothave to miss the thing. We've got
a daily podcast for you. Ohyou've got to do search simply money on
the iHeart app or wherever you getyour podcasts coming up at six forty three
retirement fact or fiction, so thatyou know the truth and can retire better.
When it comes to thinking about retirement, most of us the number one

(12:43):
vehicle that we use is our fourO one K. I mean, if
someone were to ask you, youknow, what are you using or how
important is your four one K?Most people would agree my four O one
K is pretty important. The problemis how much do you know about your
four oh one K? I wouldventure to guess that most of you spend
far more time planning your summer vacation. I'm talking like doing your research on

(13:05):
restaurants and excursions and things like that, then really looking at your floral and
case statement. It's more fun.It's way more fun, I guess.
But then what's not fun is whenyou get to retirement and you can't do
anything because you didn't pay attention toyou. That's fun at all. No
more travel for you. How oftendo you look at your statements? Well,
I mean I look at him moreprobably than I should you do.
I'm pretty aware of what's in there, but only and I would only say

(13:30):
this as if within the past tenyears, right, since I've been working
here, And I'm not saying Iobsess about it, but I know it,
and I know it well because Ialso know how important it is.
My grandpa had a pension he retiredfrom Cincinnati Millicron. He didn't have to
pay attention to the little details becausethey were taking care of for him.
Yeah, we don't have pensions.It's on me, it's on you,
It's on anyone with a floral oneK to pay attention to the details.

(13:52):
Yeah, I mean, I certainlywouldn't recommend looking at you at your statements
daily. It's a good way toget ourself ulcers or you know, loose
sleep at night because the markets arelike walking up the stairs while playing with
the yo yo. Nathan Backgrach usedto say that I steal it because I
love it. It's a great analogy. And your statements buyde law. You're
going to get them sent quarterly.Honestly, I try to practice what I

(14:13):
preach. We've done segments on thisin the past where looking at your four
to one K balance once maybe twicea year puts you in a better mental
position because more often than not you'regoing to see green numbers rather than red
numbers. And you're talking about thenumbers, and that's one key thing that
you're looking at right. You needto be checking to say how much should

(14:33):
I put into this over the lastquarter, how much did it grow or
how much did I lose? Andit doesn't mean that you necessarily do anything
in response to that, but it'sgood information to know. And then there'll
usually be another tab on there.I mean, mine's my statements online,
or there's another sheet in what's mailedto you in your statement that looks at
what you're invested in. And thereare times when you know, if the

(14:56):
stock markets are having a really reallygood year, all of a sudden,
you're taking on a lot more exposureto the stock market than maybe you had
anticipated. And then so maybe thenext time you get that statement or you
wait, you know, another year, then you rebalance to get back to
what you truly had meant to beas far as a stock bond, you
know, allocation. Yeah, whatyou're talking about is called portfolio drift,

(15:18):
and it's going to happen when themarkets are on a tear. Your stocks
are going to perform better than yourbonds over the long term. So if
you start with a seventy percent stockthirty percent bond, before you know it,
that might be eighty percent stock twentypercent bond. And if you're not
paying attention to it on your statement, you're going to miss it. Yeah,
So at minimum, keeping an eyeon maybe the summer resection of your

(15:39):
statement that's going to show you thecurrent asset allocation. Now, paying attention
to the investment options is important aswell, because there's there's some out there.
You know, as Steve Sprovac usedto call it, a good enough
fund, your your target date retirementfund, your life cycle your life cycle
fund, that's the one that hasa year tied to it, that's supposed
to correlate to the year that yousee yourself retiring. And it's kind of

(16:00):
like taking a bus to retirement.It gets, it gets it's a form
of active management, but it's doneso passively and that it gets more conservative
the older that you get all byitself, which is not necessarily a bad
concept, but I would say thatfor most of you, the closer that
you get to retirement, that's sortof one size fits all approach. You
might need a tailored approach exactly.It's not like if you and I were

(16:22):
planning to retire in the same year, we would have the same goals,
we would have the same plans.I mean, retirement's going to be a
very individual sort of unique thing dependingon the person. So for everyone to
use the same investment vehicle right toget there, or to use the same
investments to get there, doesn't makea lot of sense. So I think,
you know, target day funds canbe great if you're in your twenties
or thirties, you're really far awayfrom retirement. At least you're saving somewhere.

(16:47):
But I also think a great pointthat Steve Sprovac used to make too,
is you know, a lot oftimes there's like stinkers that are put
into those investments. You know,so you wouldn't necessarily choose to invent and
that fund, but there's a numberof funds that are thrown in there.
They're going to throw some good onesand some not so good ones in there,
right because they have to have somepeople investing in these things. And

(17:08):
so that can be where really lookingat your investment choices, working alongside a
fiduciary advisor can make a really bigdifference. Yeah. One of the great
features of a four to one Kplan is having access to low costs what
are called institutional funds, So youcan conceivably build your own target date retirement
fund in a sense, using fundsthat may have lower expense ratios as well.

(17:32):
So it's not only a way toget a more tailored approach stepping away
from the target date retirement fund,but it also can lower the inherent fees
of investing inside your four O onK. But I will say that this
puts added responsibility on you to makesure that you're keeping an eye in your
statement so that you're not having portfoliodrift like you were talking about earlier.
Another thing here is to understand withyour four one K, are you getting

(17:55):
a full company match? Are youputting at least the maximum amount into that
four one K to get the maximumnumber of dollars out of your boss's hands.
I didn't do that for the firstfew years that I was working in
GOSH. I wish I would have. I mean, if you want to
talk about regrets and going back toredo things in your life, that would
be probably the number one thing thatI would do because I think about how

(18:17):
much money that would be Now Igot a financial calculator, sho, No,
I don't even want to know.I won't sleep for the next three
weeks. Yeah, there's a lotof compounding interests that you miss out on
if you're leaving that free money onthe table that the company you work for
is willing to give you. Now, I will say on the flip side,
it's important, and we don't seethis all that often, but if
you're one of the fortunate people that'sable to max out your four oh one

(18:40):
K, which if you're over fiftyyears old, it's over thirty thousand dollars
now with your catchup contributions. Thereis such a thing as hitting the limit
too early if your plan, ifyour four O one K plan doesn't have
what's called a true up feature.I have seen it over the span of
my career where people are so excitedthat they're hitting the limit in their four
to one K, their contribution shutoff when they hit the limit, and
then they lose that match. Soit's a problem that you can come across

(19:04):
on the opposite end of the spectrum. If you're not saving enough, then
you may not get that money.If you're saving too much. You may
not get that money, yeah,kind of ridiculous. No, it doesn't
seem fair, but it could bethe way that your four one K is
built. And so that's that's thekey, right, We're talking about things
that you need to understand about yourfloural one K to make sure that you

(19:26):
are maximizing it for your retirement.I think about, you know, every
January when I step back into thegym if it's been a while, right,
it's like, oh, it's justyou know, it just feels it
doesn't feel natural anymore. And you'retrying to relearn and get so familiar with
your floural one K that every timethat statement comes quarterly and we're saying you
don't have to check it more thanthat that you know how to read those

(19:48):
graphs, so you know how tolook at the investments that you know how
to make sure to look at itin a way to say, Okay,
I am using this and the bestway that I can to save the most
that I can for my future.Here's the all Worth advice. Your four
one K is likely your biggest vehicleas you think about retiring, so just
make sure you're taking full advantage ofyours coming up. Some people think they'll
work forever. Not so fast.Well, look at how to react if

(20:11):
you suddenly get laid off. Next, you're listening to Simply Money presented by
all Worth Financial here on fifty fiveKRC the talk station. This was a
Nassio station. You're listening to SimplyMoney presented by all Worth Financial. I
mean me Wagner along with Steve Ruby. Of course, nobody wants this to

(20:33):
happen, but we've seen it happenmore time, more times than we can
count. You're knocking on the doorto retirement, you're doing everything you can
to save, to invest, andall of a sudden, you come into
work one day and your boss saysyou're done. Uh. It can hit
you from out of nowhere, andit can completely derail a lot of you.
So let's talk about this is avery emotional time, Steve, but
there's some very uh you know,fact based decision making that has to happen.

(20:57):
Yeah. So I'm going to gothrough a list of what happens when
you have an unexpected layoff to highlightthe importance of planning accordingly, because when
you're laid off unexpectedly, it's upthere with unchecked credit card debt, expensive
chronic health conditions. You need tothink about your income, your health insurance,

(21:18):
life insurance, disability bills, shortterm savings. It's terrifying. There
are a lot of problems that hityou in the face immediately when you are
unexpectedly laid off. So what dowe need to do first? What do
you need to do immediately upon somethinglike this happening? First is understanding when

(21:40):
your income stops. So this isan understanding of your final paycheck, whether
that's through regular income flow, bonus, some kind of variable compensation. You
need to understand when that paycheck isgoing to stop. This is emotional for
so many people, right for manyof you. If this happens, you've

(22:00):
worked with that company. You've giventhem your blood, sweat and tears for
years, in some cases decades,and so this can feel like you're coming
into work one day and all ofa sudden this news, and it is
so overwhelming and so emotional that youforget to ask questions. It's like being
in a doctor's office and you geta diagnosis that is like completely unexpected,
and you get home and you're thinking, I've got a hundred questions I did

(22:22):
not ask that doctor. This isoften that case. So if you miss
asking these questions, call HR immediatelyright, call them back and say,
ask these questions. There's no shameand asking more questions. How long does
my medical insurance last? I havetwenty days of unpaid PTO? Is that
going to be rolled onto this lastcheck? When? Yes, exactly,

(22:45):
ask the questions. And oftentimes I'mnot saying there's complete flexibility here, but
sometimes they will work with you onsome of these things. So asking and
maybe pushing a little bit in adirection isn't necessarily the worst thing once you
get the answers, once you knowhow much to expect, and when that
last paycheck is coming in. Okay, now you've got something that you can

(23:07):
work from. Yeah, And understandingyou know when your benefits kick in is
important obviously here. And you needto know when your your income from from
your job is going to stop first, because oftentimes your unemployment can't start,
and this depends on what your state, what state you live in, but
your unemployment won't start until severance ispaid out, for example. Yeah,

(23:27):
and I think the key is understandingyou know each of those components of it.
And then I think This is whenthat like pain really comes in because
once you figure out, okay,how much is coming in and when does
it stop coming in? Okay,and here's the benefits that I have moving
forward, then you have to lookat your own spending and it feels unfair.
You didn't do anything to ask.Yeah, I don't have to make

(23:48):
these changes. Yeah what's this?Yeah, but yeah you have to.
And so it starts with pulling outyour bank account. And I would say
if you are someone who puts alot in a credit card, your credit
card statement and looking at what nonessentials you are spending money on the list
of subscriptions that you have, youmay have to cut a number of those.
You may have to have difficult conversationswith your family members if you have

(24:10):
kids, it maybe we're not eatout as much, or you got a
brand new pair of Nike's for Christmas, so we're not going to get any
for a while. You know,it can affect the entire family, and
I think treating it in a waythat it doesn't is only going to be
more harmful. Yeah, that's that'sa good point. I like that.
And looking at it is when you'resitting down and you're scrubbing your bank statements

(24:32):
to find out where cash flow isgoing and identifying ways that we can kind
of trim the fat. Remember thatit's short term. This is not your
new norm here. This is astop gap while you find ways to spend
less until you have regular cash flowagain. So this is a temporary speed
mump. But having a plan ofattack in the event that life throws you

(24:53):
one of these unexpected curve balls isvery important because it is much better to
to plan accordingly than it is to, for example, dip into retirement assets
if and when life throws us oneof these curveballs. That's why we talk
about the importance of emergency funds forexample. Well, and you also talked
about having a plan. And ifyou have a financial plan that exists before

(25:18):
right this layer. Yeah, really, then it's like this is if you
think about your financial plan as amap, then you've got a detour you're
working from. Okay, how doesthis impact my financial plan if for four
months I'm not working, If forfour months, I'm not putting that money
into a four to one k,right, it's so much easier to have
that to start from. Then tohave this overwhelming situation that's very emotional,

(25:40):
and you literally have no idea whereto turn or where to even start because
you never had a financial plan inthe first place. And if you do
have a financial plan, and I'veseen this happen over the span of my
career, this this curveball happens,and then it actually doesn't derail anything.
Yeah, because we have plans inplace, we have that emergency fund,
we have a finger on the pulseof our spending. We already live below

(26:02):
our means, so that there's obviouslyan emotional subject that is you know,
can be unexpected, but it's notsomething that you can't get through if you
if you plan accordingly, and ifyou attack it in the way that we're
talking about today. And I thinkwhat you have to do is to focus
on what's next, what is thenext right thing to do, because it

(26:23):
can I've said this several times,but I can't say it enough. It's
an incredibly emotional time. I mean, you feel like someone is turning their
back on you. I mean youfeel like, how could this possibly happen?
I've worked so hard in the midstof kind of processing those emotions.
You have to somehow divorce yourself fromthem and say, Okay, regardless of
what I'm feeling about this, Ihave to make the best decisions for my

(26:45):
family at this point, and itis figuring out what are the facts,
what do we have to work fromhere? And also, you know,
we've got Julie Balki. You knowJulie on the Job on the show regularly,
and she always has some great adviceabout for people who are in this
situation of looking for jobs. Andshe also says, don't immediately run out
and just apply to seven thousand openpositions and you take the first one that

(27:07):
comes in. Sometimes there can bea silver lining in these situations, even
though they can be hurtful at first, to say, Okay, actually,
now that I think about it,I didn't love something about that job that
I came from, So how doI make sure I end up in a
better situation moving forward? And you'rereally intentional about writing down and thinking through
what's the best case scenario for memoving forward? And once you figure that

(27:29):
out, that's what you work toward. You give yourself a minute to process
it and to think about, Okay, ideally, yeah, if I can
an ideal world, what does thatnext job look like and sometimes it's a
blessing in disguise. Ye've seen thatas well, where you find yourself an
even higher paying job with more satisfaction. And I also think, as we

(27:49):
were talking about the fact that youcan't take on all of the stress of
it yourself, you have to talkto the family openly, to your spouse,
to your children about what this meansto all of you. Family can
actually end up in a better situationfinancially moving forward, because all the extra
things that maybe you thought you needed, all of a sudden everyone realizes we
didn't need that great stuff. Youknow, it can be a nice little

(28:11):
silver lining, a nice little byproductof what started out to be a not
so great situation. Here's the allWorth advice. No question to layoff is
painful. Take a deep breath,though, follow these steps and understand this
too shall pass. Coming up nexta little fun. We're playing some retirement
fact or fiction so you can getto the truth of the matter for when

(28:33):
you retire. You're listening to SimplyMoney presented by all Worth Financial here on
fifty five KRC the talk station.Absolutely reliable information and of course not just
one sided view. Muse that affectsyou at the top end bottom of the
hour fifty five KRC. The talkstation you're listening to Simply Money and presented

(28:59):
by all worthinancial I mean you Wagneralong with Steve Ruby. If you have
a financial question that you and yourspouse just cannot get on the same page
on, or maybe something that's keepingyou up at night, there's a red
button you can click on while you'relistening to the show. It's right there
on the iHeart app record. Yourquestion is coming straight to ask. We'd
love to help you figure it out. Coming up, you've heard some famous
investing quotes, right. We talkedabout some earlier in the show. We've

(29:21):
got more coming your way, andthese are like words to live by when
it comes to your money. Ifwhen you're thinking about making a money decision,
you think about some of these quotes, you might decide some things a
little bit differently, and they couldbe game changers. We'll get to that
in a few minutes. Right now, it's time to play retirement fact or
fiction. Here's the first one foryou, Steve Ruby Factor Fiction. When

(29:42):
you turn fifty nine and a half, you should go ahead and start taking
distributions from your investment accounts. Fiction, How can that even be fact immediately?
Yeah? I mean sure, yes, the early withdrawal penalty that exists
goes away when you turn fifty nineand a half. But if you're still
working, why would you need topull from that? Yeah. We talk

(30:03):
about the power of compounding all thetime here on the show, and it's
essentially the less time or the moretime that money has to grow, the
better off you are. So touchingthe money the second you can get your
hands on it penalty free doesn't makeany sense at all. Yeah, And
it's a tax planning nightmare as well, because in this situation, again,
if you're still working and you justpull money out for the sake of pulling

(30:26):
money out, then you're paying potentiallyhigher taxes on those dollars than if you
allowed them to grow tax deferred,like that vehicle is designed to do.
We use the words plan and strategya lot here, Right, that's just
not the best strategy for you.Here's another one factor fiction, there's eighty
different strategies to collecting social care.Well, what's that number. It's gets

(30:48):
close to eighty. I think it'seighty one. Is it eighty one?
And I think that's also for couples, and it looks at timing, looks
at ways to collect to collect suchsecurity. So realistically there's only a handful
that people use. But sure fact, yes, there's a ton of different
ways to collect it. But wewant to when we're making that decision,

(31:08):
understand our financial situation, needs andgoals as they currently are today and mapped
out in the future. That's whyworking with a fiduciary financial planner is important
to build that financial plan for youbecause social security clearly is an important decision
and you want to maximize how muchyou're going to get back from what you
already put into it. So makingthe right decision one of those eighty ish

(31:29):
options, it's important, but realisticallythere's only a handful that most people leverage.
It's like what we were just talkingabout, right, should you take
your investments out or money out ofyour investments when you turn fifty nine and
a half? Probably not? Shouldyou claim social security the day you turn
sixty two? I don't know.It's going to be different for everyone,
and so I think making sure thatyou understand how this works in a way

(31:52):
that you can absolutely maximize it andin the wrong decision can cost you thousands,
tens of tens of thousands. Youknow, I've seen that happened,
so really understanding how the system works, and I think that number eighty eighty
plus can sound very overwhelming, butit doesn't have to be. It does
not have to be at all.Here's the next one fact or fiction.
If you have a different beneficiary onyour retirement accounts than what you have listed

(32:15):
in your will, the beneficiary listedon your retirement accounts will get the money.
Yeah, so this is one thatmight come as a surprise. It
is fact. So your beneficiary isa supersede other documentation that you have out
there, and this can create nightmarescenarios where unfortunately, I have heard stories
in this industry where ex spouses receivedmoney even though somebody was remarried and had

(32:39):
children, and one of those dollarsto go to children from retirement accounts,
but it went to the X becausethey never made the update on the beneficiaries
and their old four to O oneK plan. Well, it almost doesn't
make sense, right. It's like, well, I did my will and
everything's laid out in the will,so you know it should be fine.
I don't have to go back andlook at old four to one k's or
old iras, and that's exactly wrong. You have to go back, I

(33:01):
would say periodically. Like we talkabout, you know, your estate planning.
You can't say, oh, yeah, I had a will, we
wrote it twenty years ago. Wedon't need to update it. No things
change in your life, and thisis one of the things you need to
revisit. I don't know if Iwould say annually, but at least every
couple of years to say, okay, are the beneficiaries I have listed on
all of these accounts. Have alist of That's that's part of that meeting

(33:23):
with an attorney. Your attorney isgoing to ask you, or even better,
slide a piece of paper across thetable that says, this is based
on our conversations, how you needto have beneficiaries listed in all of your
accounts. Important to understand that andthen to update those accordingly. Yeah.
Factor fiction. When you leave acompany, you will get any unvested funds

(33:44):
in your four one K fiction.The unvested portion goes back to your former
employer. It's the vested that youreceive. So this is important to pay
attention to your vesting schedule in theevent that you are thinking about making a
change. If you have a threeyear cliff vest schedule, for example,
that means that none of the companymatch becomes yours until you have fulfilled that

(34:06):
time frame of employment. There's there'svesting schedules where you get twenty percent more
per year up to five years,So if you leave in year three,
then you only get sixty percent.So that is free money that you may
end up leaving on the table.It doesn't mean that you have to stay
in a job that you don't likeor because you know you found a better
opportunity, you don't accept it becauseyou're leaving free money. But you need

(34:28):
to have that. You need torecognize that if you don't meet your vesting
schedule, then that money does notgo to you, goes back to the
ford or employer. This is oneof those things that we say you need
to know your four one K.This is definitely one of the things about
your four one K that you needto understand. I feel like the show
is one where Amy tells all thebad decisions I've made with money through my
life. But I had this happenearlier in my career. I don't tell

(34:51):
these stories because I haven't made anybad financial desia. I know you are
perfect, thank you. I knowyou are, so I'll just I'll just
roll mine out there. But yeah, I left a job. I thought
I I had X number of dollarsin my flour to one K that I
was going to roll over into mynew four one K. And then when
I saw the statement, I waslike, we lost some money from here
to there, come to find outit wasn't fully vested. I think your
point, Steve, is like,it's just having the knowledge so that you

(35:15):
can make an informed decision about this. You know, I have a family
member several years ago who could workthree more months and she was going to
get several thousand dollars more than ifshe retired when she had originally planned.
We talked it through. She decidedit wasn't worth it to her, and
that's absolutely fine. But she madean informed decision. It wasn't that she
retired and she thought she had thismoney and then she no longer did.

(35:37):
Coming up next, We've got somefamous words to live by. If you
want to be smart about your money, you're listening to simply money, because
I'm all worth Financial. Here infifty five KRC the talk station, May
Kings are welcome to years, notthe voting that we have to fear.
It's the counting fifty five KRC,the talk station you're listening to simply money

(36:02):
because I'm I all worth financial,I mean E. Wagner along with Steve
Ruby. Words to live by,Right, we all have those quotes that
we identify with that we share withothers, with our kids. Well,
tonight we're sharing some of our favoritewords of wisdom when it comes to money
and investing. You live by these, you remember these, You're probably going
to end up in pretty good shape. I like this one, John Bogel.

(36:27):
Don't look for the needle and thehaystack, just by the haystack.
How many times have you talked tosomeone who said, like, it's this
individual stock and I have a goodfeeling about it or whatever it's like.
Don't try to find the one company. Invest in the S and P five
hundred, for example, the fivehundred biggest companies that make up the American
economy. Some of them are gonnahave good years, some of we're gonna
have bad years, and you're gonnaend up being okay. Yeah, John

(36:50):
Bogel. He's Vanguard, So thisis somebody that they do have a good
point. Buying a low cost indexfund and casting a large net is a
heck of a lot better than sittingon one or two individual stocks that can
technically lose all of their value,all of it. If one stock goes
belly up inside of an index fundthat has five hundred different stocks, it's
barely going to feel it. It'snot going to move the needle. So

(37:14):
I completely agree with this. I'mnot a big advocate for investing in too
many individual stocks because there is inherentrisk. Casting a large net brings down
the risk and can still get usgood returns over the long run. Here's
some other really good words, especiallyfor those of you who struggled taking on
risk. How many millionaires do youknow who have become wealthy by investing in

(37:36):
savings accounts? I rest my case, I rest my case, he answers
to the ques. Answer is zero. Yeah. I mean, it's a
guaranteed way to lose money safely.Yeah, it's going broke safely because inflation
is going to take a bigger andbigger chunk out of that money, especially
during times right now. You canmove your money into a higher yield savings
account and maybe make three or fourpercent, but most of the time over

(38:00):
I can think of the course ofthe history. Since I've been old enough
to save money in a savings accountant'slike point zero zero zero one percent,
money will erode. We've been spoiledbecause of the high interest rate environment that
we've been in since yeah, recently, and even leveraging that for long term
investments is a bad idea because yourstocks are consistently the way to be inflation

(38:22):
over the long run. The nextone, I think you can look at
and say, specifically for someone whowas maybe the first lines of investing in
cryptocurrency, the individual investor should actconsistently as an investor and not as a
speculator. I think what you haveto ask yourself when it comes to things
like bitcoin cryptocurrency is what is theintention for this money? Right? If

(38:45):
it's long term money that you needfor retirement, you don't speculate with that
money. You invest that money.If it's play money that you have on
the side, and you know you'regood for retirement and you're good for maybe
helping your kids pay for college orwhatever, where those financial goals are that
you have well, then fine,put some money into crypto. If it
doesn't go well, it doesn't gowell. Yeah. Another quote, investing

(39:07):
should be more like watching paint dryor watching grass grow. If you want
excitement, take eight hundred dollars andgo to Las Vegas. I don't disagree
with you that you know it's okayto have some play money in these speculative
investments, but putting your entire portfolioand something speculative can derail your retirement plan.
Yeah, that's a luxury, notsomething that everyone has. Extra money.

(39:28):
Thanks for listening tonight. We've beenlistening to Simply Money, presented by
all Worth Financial here in fifty fiveKRC, the talk station. Remember when
they said the new normal and wesaid new normal. I don't want a
new normal. I just want normal. The side effects you feel while listening
to Glenn Beck, they're normal.You don't even remember what normal was like.
It's normal to experience fits of rageand also moments of extreme clarity because

(39:49):
you're already accepting this new normal whereI can't do what I want. This
is just the beginning of things.It's not going back. It take as
recommendation tomorrow and nine's a new I'mgoing to show you your life is changing
On fifty five KRC, the talkstation braudio attack