Episode Transcript
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Speaker 1 (00:06):
Tonight, is retirement actually a stupid idea? A prominent political
commentator thinks, so should you. Of course, we'll tell you
what we think. You're listening to Simply Money, presented by
all Worth Financial Amami Wagner along with Andy Shaeffer. Okay,
so lots of people having big responses. Andy to what columnist, lawyer, author,
(00:27):
political commentator? He's got a lot of titles. Ben Shapiro
said on his podcast recently, I'll just give you the
quote and then I'll let you react. He said, frankly,
I think retirement itself is a stupid idea unless you
have some sort of health problem. Uh yeah.
Speaker 2 (00:44):
He might not be in touch with the reality of
everyday workers.
Speaker 1 (00:49):
The people who get out of bed every Monday and
count how many more Mondays they have to until they
can retire.
Speaker 3 (00:55):
Right, I mean, so, what is this guy?
Speaker 2 (00:57):
He gets up at what ten am, makes his coffee
and gets on a podcast. I mean, that's yeah, it's
easy for him to say that, you know, he doesn't has,
you know, probably work until he's you know, eighty, by
just talking on the uh, you know, on the computer.
So I think it's a little misguided, you know, I
don't think he's taken into.
Speaker 3 (01:16):
Account blue collar workers.
Speaker 2 (01:17):
I have a lot of family and friends that are
blue collar workers, you know, I have a lot of
clients that are blue collar workers. And you know, you
start getting into your mid to late fifties, particular, if
you're blue collar and your your body just can't handle
it anymore. I have one client in particular I'm thinking about.
He has an HVAC company, and he's in his late fifties,
and he's he tells me every time I see him,
(01:38):
he says, man, I don't I just don't know how
much longer I can go. And so, you know, I
understand what he's saying. People are living longer, you know,
and if you enjoy your job and you like to
be productive, I understand that. But to make a blanket
statement like that, I think is reckless.
Speaker 1 (01:53):
Yeah. First of all, mister Shapiro, he's forty years old,
He's worth like fifty million dollars. He has a media empire, right,
he probably could retire today if he wanted to, And
he could retire today and be just fine. So yeah,
I think he's a little out of touch. You know,
you go back to when retirement even began. I mean,
it used to be that most Americans worked on farms
(02:16):
and until they could no longer get to the field,
and then it was like maybe they just like expired
while they were in the middle of the corn rows,
like that's how it used to be. And then people
started working, to your point in blue collar jobs like
factories making cars for Ford, and Ford realized, you know,
first of all, you have to pay people so much
(02:37):
as they continue to work and work and work. So
they figured out that the pension system was actually better
for them. Second, twenty four year olds on a factory
line probably going to be faster and in better shape
than maybe you are going to be when you're seventy
four years old. So the whole system sort of made sense.
We sort of changed as an entire country and economy.
(02:58):
And then I think about, you know, mister, have you
thought about pilots. Do you want a pilot piloting the
airplane that you're on who's ninety seven years old?
Speaker 3 (03:07):
Probably not.
Speaker 1 (03:09):
You know, do you want a doctor who can no
longer see diagnosing you? Probably not. So whatever you think
about this man's political viewpoints, you know that aside, I
would question what he is saying about retirement as a
concept here. But I will say some of the points
that he went on to make, in my opinion, are
(03:33):
not super far from the mark.
Speaker 2 (03:36):
Yeah, and I think that, you know, when you know,
some of the things that I think he was actually
trying to say.
Speaker 3 (03:42):
Doesn't really reflect you know, that quote.
Speaker 2 (03:45):
And I think what he was trying to say is
that we just really shouldn't rely on social security when
we retire. You know, my grandparents' generation, like you said, Amy,
you know that that generation, they got out of high school,
they worked one job, they worked it for thirty years,
and their their retirement was social security and a pension.
Speaker 3 (04:03):
Yeah.
Speaker 2 (04:04):
Uh, you know, my grandparents, you know, didn't have two
nickels to rub together, and that's what they depended on.
Speaker 3 (04:10):
You know.
Speaker 2 (04:11):
But you know, I think his thoughts, you know, were
also about people losing their edge, you know, if you
if you stop working. And I can understand that. I
remember early in my career, I accepted a new position
at another broken's firm, and between the one that job
that I had and the one that I was starting,
there were three weeks that I had him between those
two jobs. The first week was great, you know, I
(04:32):
was being lazy bones scouts data. It was awesome. The
next week, you know, I started feeling like I wanted
to get back into the workforce.
Speaker 4 (04:39):
In the third week, I was crazy.
Speaker 2 (04:40):
I felt like I wasn't being productive. I felt like
my mind was kind of turning them much to some degree.
So I do understand some of his points about staying active,
trying to find you know, activities, and retirement to keep
keep your mind sharp, keep your body sharp. Uh, but
I think his delivery was just off base.
Speaker 1 (05:00):
One of the points that he makes about social security is,
first of all, you shouldn't plan on living off of that.
I agree. Actually, the system was never set up to
support more than forty percent of what you're bringing home.
You know, and you're talking about our parents, our grandparents' generation,
they had what was referred to in retirement as a
three legged stool. They had the pension which their employer
(05:22):
was taking care of. They had one hundred percent of
their promised Social Security benefits. So if the third leg,
which was the part that was on them right, their
personal savings for retirement came up a little short, well,
that was okay, we don't have a three legged stool
to anymore. Most of us don't, right. I mean, one
of those legs, pension for many of us is completely gone.
(05:42):
Then you talk about social security and the fact that
that's certain leg and now all of a sudden, the
leg that you're contributing to becomes so very important, and
so you know that it has to be on you
to save and plan for retirement. But one of the
things he says is, and he's a proponent of, is
raising full retirement age to the age of seventy. When
(06:06):
this system was first set up in the nineteen thirties,
full retirement age was sixty five. Guess what, most Americans
didn't live to sixty five at that time. No one
got to the point where they were claiming. There have
been so many medical advancements since then, most of us
are living longer. And so I don't necessarily think that
raising full retirement age is the worst idea. What we
(06:29):
know is that there is a social security crisis, and
if something doesn't happen before the year twenty thirty four,
you're likely going to get seventy five eighty percent of
your promise benefit. This is a really this is a
political hot potato. You know, we've been so lucky on
this show that we have had us senators come on
the show many times and and sort of weigh in
with different issues and things that are going on in Washington.
(06:52):
Every single one of them. I have brought up the
social security issue. And you want to talk about watching
a man's tap dance? Wow, I mean, it just didn't
want to go there. And I would ask repeatedly and
many times and very pointedly, you know, and it is
something that has to be addressed, and it is not
you know, any way that you go. Whether you're raising
(07:13):
full retirement age, whether you're taxing people who have saved
better for retirement, all of these things are going to
be unpopular. But you got to think back, this has
been done before, raising full retirement age, and we've all
survived it, right, We've all been okay. And so I
don't think that what Ben Shapiro saying about raising full
(07:34):
retirement age as an option for saving the Social Security system,
it's terrible. It is one option that I think it
needs to be on the table and needs to be considered. Now,
what he's saying about retirement overall completely off base. You're
listening to simply money presented by all Worth Financial Imemi
Wagner along with Andy Schaeffer. Sometimes we just see things
in the headlines and things that people are talking about
(07:55):
when it comes to your money and your retirement and
your investments, and we have to sound off, right, We
have to add our voice to the conversation. And so
you know this, this huge political pundit is sounded off
saying he thinks retirement is a joke and if you retire,
you're going to lose your edge. For many people, I
see incredibly fulfilled lives in retirement. I mean, I wonder
(08:17):
what he is referring to when he's saying losing your edge.
For most people, they want to spend more time with grandkids,
They like to travel more. Are they mentally not as
sharp as they were before?
Speaker 2 (08:29):
I don't think so well, Especially if you have grandkids.
Speaker 3 (08:32):
You know they'll keep you active. You know, they'll keep
you sharp.
Speaker 2 (08:35):
You know, when I'm around my nieces and nephews, you know,
the intelligence that they have keeps.
Speaker 3 (08:40):
Me on my toes.
Speaker 2 (08:42):
You know, they'll recognize things and point things out. And
you know, sometimes I underestimate their intellectual capabilities and they
surprise me all the time. But you know, I think
you know, to another degree. You know, when you talk
about retirement, that doesn't necessarily mean that you're not going
to be productive. Most of Michael when they retire, even
if they retire early, they find other things that they
(09:04):
are interested in. I have one client that works at LLBAN.
I have another client that started woodworking and now he
builds guitars, you know.
Speaker 3 (09:15):
And I have another client.
Speaker 2 (09:16):
It was funny because he and his wife decided that
they wanted to work in Low's garden center. The neat
thing about that older generation, and to the detriment of
them to some degree, is that they just wanted to
work twenty hours a week. Said, you know, Andy, we're
just going to work twenty hours a week. The problem
is is that generation, super disciplined, shows up on time,
(09:36):
and before you know it, they're asked to be the
manager and they're working forty hours a week. So if
you do decide that you want to find something that
you enjoy, whether it's working on a golf course or
volunteering or things like that, make sure you set boundaries
and guidelines for the hours that you want to put
in because that generation particularly is very disciplined, works very hard,
(09:57):
and so you want to make sure that you do
have guidelines if you do go back to work.
Speaker 1 (10:01):
To some degree, I think retirement means different things to
different people. I mean, for some, you've been working forty
fifty sixty hours for years now and you just want
to be done. You don't ever want to have to
clock in, you don't ever want to have to be
responsible for anything, and you're not worried about a paycheck.
That's great if that's what works for you. To your point, Andy,
there's a number of people that use it as a
(10:22):
way to pivot. Maybe you know, you've been doing something
for years that you're no longer passionate about, but in
the background, you actually really love woodworking and making guitars
and music, and so that gives you the opportunity to
do that if you make a little extra money on
the side. Absolutely. I was in Subway last week with
my son. He was grabbing a sandwich between basketball games,
(10:43):
and the man in front of us and line said,
you know, are you Amy Wagner. I listened to you
all the time, and he said, I'm retired. Well, I'm
kind of retired. He said, I actually have a small
lawn cutting business. And he said, and I do that
to pay for my Bengals tickets. Cool, brilliant, Right, Bengals
tickets aren't cheap, right, any any admission tun NFL Stadium
(11:05):
never cheap. He enjoys that. I don't know if he
could afford it with his retirement or not, but he
does something on the side that it's fun, he says,
my wife loves it. It gets me out of the house,
pays for my Bengals tickets. Win win. You know, I
don't know if he considers that fully retired. He still
got some paycheck coming in. But he has the flexibility
to do what he wants to do. And I don't
(11:26):
think you can overstate that. So, mister Shapiro, we don't
agree with you when it comes to retirement. We think
it means lots of different things to different people. I
do not think it means losing your edge, and I
do also, though, agree, social Security is a system that
we need to look at that may include raising full
retirement age. Who knows. We'll see what they come up
with in Washington. Here's the all Worth advice. We believe
(11:47):
everyone's financial journey is unique, not one size fits all.
Coming up next, we're gonna tackle specific mindsets that could
hurt your financial progress. You're listening to Simply Money presented
by all Worth Financial here in fifty five K see
the talk station. You're listening to Simply Money presentably all
Worth Financial. I mean, we Wagner along with Andy Schaefer.
(12:08):
If you can't listen to our show every night, you
do not have to miss a thing. We have a
daily podcast where you just search simply Money. It's right
there on the iHeart app or wherever you get your podcasts.
Coming up at six forty three, we've got four questions
that we would say that you and your spouse need
to be asking each other, especially maybe if you have
just retired. We'll get into that. Okay, so financial independence
(12:31):
it requires making smart money decisions. But there's a mental
component to this as well. Andy. It's having the right
kind of mindset. And you know, we kind of come
across some mindsets, you know, after working with people for
so many years, and you're like, yeah, that's probably not
going to cut it. Let's get into some of those.
Speaker 2 (12:48):
Yeah, it's interesting that and this is something that is
interesting to me too. The psychological aspect of money is
something that I'm learning more and more about the way
that you think about money, how you approach money, and
a lot of times it can be counterintuitive to the
way that you should really approach it. You know, a
lot of times people say, you know, more money will
(13:10):
solve all my problems. Well, that mindset can be harmful
because it can lead to neglecting non financial aspects of
your life. So, just because you strive to make more money,
that is not going to make whatever problems that you
have in your life go away.
Speaker 3 (13:28):
That is not the answer. You know, you want to make.
Speaker 2 (13:30):
Sure that you do prioritize a little bit of continuing
growth in your financial plan, but you don't want that
to take precedence over, you know, the expense of your
personal relationships, your health, and.
Speaker 3 (13:44):
Your personal fulfillment.
Speaker 2 (13:46):
So it's really important to find a balance between money
and happiness, you know. You know, I work with a
lot of people that you know, enjoy simple things in life.
Speaker 3 (13:56):
I like going to.
Speaker 2 (13:56):
Frish's that doesn't cost a lot of money. So, you know,
just because you've accumulated more money, that is not the
answer to your health, of your life and the problems
that you might be dealing with from every day challenges.
Speaker 1 (14:10):
Well, I think you can make more money, but you
can also spend more money. So it's this vicious cycle
that you're never going to get out of. So I
think you have to figure out how to have a positive,
really healthy relationship with money. And if you don't, and
you're continuing to spend and you're in debt and you're thinking, well,
you just need more, more money will help solve these problems.
(14:31):
Absolutely not. You've got to figure out exactly what the
problems are and solve them yourself. But there's also been
research done on money and happiness and it shows you know,
after you get passed, it depends from year to year
seventy to ninety thousand dollars in income, you're no happier.
So you might think if I make more, I'll be
(14:51):
less stressed, right, and that's going to make no, no, no, no,
it actually doesn't. It doesn't solve any more problems. There's
research that shows this, so terrible minds that to have
money doesn't not solve problems. You have to solve your problems,
and if you have them with money, they're not just
going to go away on their own. Lots of people
also have this mindset, I'm going to get to retirement later.
I'm gonna start saving for it later. You know, I
(15:13):
think about Andy, you and I we're both in our forties,
and you know, for many who have you know, kids
at this age, it's you know, they played travel sports
and it's expensive, or you think you're going to start
saving after they finish with this sport, or you're going
to start saving after you finish that big trip to
Europe next year. Well, there's always going to be a
next thing, and so you have to start now. And
(15:36):
even if you're starting small, it's better than nothing.
Speaker 2 (15:39):
Yeah, I think the most important thing is just getting
in good habits. You know, when I was a kid,
I remember my mom and dad just putting a little
bit away when I was a kid, whatever they could do,
even if it was five dollars a month, right, just
to get in those good saving habits. Now that being said,
I will say this, and this is the case in
(16:00):
my fam in my parents' case as well. Most people
actually don't start accumulating real wealth until their forties and fifties.
And so I get it right, It's hard, especially if
you're raising a family and you have kids. You know,
most people are just trying to keep their head above water,
trying to pay the bills, you know, make sure that
their kids are taken care of, and a lot of
(16:21):
those things. And usually once the kids are out of
the house and hopefully off the payroll, that's when you
start accumulating real wealth. So I do see that occurring
with my experiences with my clients. However, again, I think
it's important to getting good saving habits and being able
for a little bit of money away when you can,
and also increasing those savings as you continue on. You know,
(16:44):
if you get a raise at your job, reward yourself
with a little bit of extra money in your bank account,
but also try to add a little bit more to
your four to one k. You know, after the first
couple of months of those savings, you're not going to
miss that money.
Speaker 3 (16:58):
So I think there is a sweet well, I.
Speaker 1 (17:01):
Think if you think about it, if you're someone who's like,
I'm gonna wait until the kids get out of college
and then I'll start saving, many of us are having
kids later and later in life, so that runway between
your child graduating and you retiring is becoming shorter and shorter,
and you are missing out on that sort of magical
power of compounding. So I love the point that you
(17:22):
made about your parents. Even if they're saving just five
dollars a month, it's something. And then that money has
more time to grow. So, and here's another one that
can really get you in a hole. Spending less is
the same as saving more. Now I say this often
money not going out is the same as money coming in.
So you know, if you pay off your mortgage before retirement,
(17:44):
you're essentially giving yourself a raise. However, not spending money
is not the same as investing that money in giving
that money the chance to grow, you can put it
under your mattress. Great, you know it's not ever going
to outpace inflation that way.
Speaker 2 (18:01):
Yeah, and this is where the psychology gets interesting to me.
You know, when you think about save spending less is
the same as saving more. The psychology behind this mindset
can limit your financial growth. And one of the ways
that it can do that is it can prevent you
from seeking growth and exploring opportunities to increase your income.
(18:22):
It can hinder your drive to continue to achieve and
exceed your financial expectations from an income point of view.
So if you think, well, instead of trying to achieve
my financial goals through hard work, discipline, capitalistic approaches. Instead
of achieving those types of goals, I'm just going to
(18:44):
limit my outflows that can hinder some of your personal
growth and financial growth. So that's the type of psychology
and mindset that is very curious to me, but it
does make sense.
Speaker 3 (18:56):
To me as well.
Speaker 1 (18:57):
Another harmful mindset is about keeping up with the Joneses. Now,
I'm betting if I asked one hundred of you, if
you actually try to keep up with the Joneses, you'd
be like, no, I do not. And I'm gonna call
BS on that one. Because most of us are on
social media and there is just something that gets in
and you may not even be aware of it, but
you start to think, wait a second, I went to
college with him, and he can afford that house. I
(19:19):
should be able to afford that house, or that vacation
or that kind of car. You don't know what I
will say. If they could put on Social Security what
someone's credit score is or credit card debt, then maybe
you could say, okay, should we should be able to
afford that? But don't try to keep up with the Joneses.
Here's the all Worth advice. The key to financial freedom.
It's really not just about money. It's about how you
(19:40):
think of those dollars and what you'll ultimately do with them.
Coming up next, the rules of thumb when deciding who's
going to become your power of attorney. It's incredibly important.
You're listening to Simply Money and presented by all Worth
Financial here on fifty five KR see the talk station
(20:03):
listening to Simply Money, presented by all Worth Financial. Immi
Wagner along with Steve Riby. I think this is something
that's probably on your list of things to do if
you don't have all of your estate planning documents in order,
one that maybe people tend to put off, but it's
incredibly important. Tonight we're joined by Mark Reckman, our state
planning expert from the law firm of Wood and Lamping,
(20:23):
talking about a power of attorney. Mark, I want to
get into what exactly the power of attorneys are, why
you need them, and also, more importantly, how do you
know who to choose?
Speaker 4 (20:34):
Oh? Exactly And a lot of people are confused by
the phrase power of attorney because they think it requires
a lawyer. And while a lawyer prepares this document, the
document actually is designed to appoint someone else to be
your agent to make decisions for you, and it isn't
usually the lawyer.
Speaker 1 (20:54):
So when would you talk Let's talk about when you
would need these.
Speaker 4 (20:58):
So this would act on your behalf, if you're on vacation,
if you're sick, if you are temporarily indisposed for any
particular reason. Also, sometimes in partnerships or in marriages, you
have one party who does most of the money managing
or most of the financial decisions, and if the other
(21:20):
partner in the marriage signs of power of attorney, then
the acting partner can sign for both of them and
make decisions for both of them, which for many people
that's constructive. For other people, they prefer to make their
own decisions.
Speaker 1 (21:35):
Lots of reasons. Right as you mentioned why you would
want these. I think you even brought up one time
your son was hiking the Appalachian Trail, not so easy
to be found there. He made you his power of attorney.
Speaker 4 (21:46):
Well, and most people who hike the trail try to
minimize their weight and carrying a cell phone. And you know, nowadays, Amy,
I think people probably do carry a cell phone. But
ten years ago you didn't carry a cell phone. You
didn't carry anything you didn't need every day. But a
power of attorney was very helpful to my son because
(22:06):
it took him four months to walk that trail from
end to end, and something came up while he was gone,
something that he didn't really expect. It was a glitch.
He had eye surgery before he did it, so that
he didn't have to wear contacts, and he had set
up the payment plan for the surgeon, and sometime while
he was gone, the payment plan failed for some reason.
(22:28):
I don't remember what, but I was able to call
the bank and call the doctor and get the thing
right back on track, and everyone was in good shape.
In that case, he picked me to be his agent.
He was single at the time, and I was available
and glad to do it for him.
Speaker 1 (22:44):
And you know, I think many people think of a
power of attorney as sort of end of life, you know, incapacitated,
that sort of thing. You know, and you are going
to need in that situation, someone who can make decisions
for you, both both medical and financial.
Speaker 4 (23:01):
Well, that's exactly right. And for married people it's usually
the spouse, but it doesn't have to be. It's often
children and when, as you said, if you're elderly or infirm.
Your kids may be the logical place to go for this,
if they're adults and they're good at this. And what
I tell people is that it's important to pick someone
that you trust to act in your best interest. And
(23:23):
this is one of what I call the seven rules
of choosing an agent in your power of attorney. You
got to start with the single most important thing, and
that's trustworthiness. People have to act honestly, deliberately, and transparently,
and that list is everybody. Most people know someone who
can do that, and for those people who don't, you're
(23:45):
going to need to get professional help.
Speaker 1 (23:47):
I think another part of this, too, Mark, is this
needs to be someone who can remain level headed in
a time of crisis. Now, with the example of your
son and the applation Chail, that was not a crisis.
But if it is your parent or your spouse, your
loved one in a you know, a medical emergency, you
(24:07):
know you can't talk to them, and this person just
you know, cannot keep it together, cannot remain cool in
order to make you know, smart decisions, probably not your person.
Speaker 4 (24:19):
And I think I think that's right, amy of course,
but I think it also comes down in sort of
two ways that that's important. One, the person has to
have the emotional capacity, which is what you're talking about,
the ability to stay level headed and make decisions that
are tough and do so promptly. But also it's important
that someone has the time, had the emotional capacity, and
(24:39):
the time to take to find out what they need
to know before making decisions.
Speaker 1 (24:45):
I think about my best friend who is incredibly cool,
calm and collected under the worst kinds of circumstances, and
when she makes a decision, she she's on it like
she's decisive, she will execute, She's insanely organized and thinking.
Those are probably all great characteristics for someone if you're
looking for in this kind of situation.
Speaker 4 (25:07):
Well and being well organized is important. On my list,
it's item number three on my seven lists of an
item list. But that doesn't mean that they need to
be an accountant. They don't need to be a lawyer
or a financial planner like you. They just you can
hire those skills. They just need to be organized enough
to know where to get the help they need.
Speaker 1 (25:27):
I think sometimes you know, for parents, particularly parents who
have multiple children, if you're trying to think through which
ones should act in this kind of a way right
as a power of attorney, And sometimes I think that
there's no agreement among the kids, like why did you
choose that one. One component of it is if there's
other kids that are out of town, but one that's
closer to you, it just makes it easier.
Speaker 4 (25:50):
You know, that's becoming less and less important, but it
certainly is still relevant to most of us, helpful at
least important. It's just playing easier for someone who lives
in your community to go to the banks, to collect
to add your accounts, to collect your mail. There's a
lot of very routine day to day things if you're
(26:12):
sick that you can't handle. If there's someone local, it's easier. Now,
that's a lot can be said for setting these things
up out of town. Both of my boys are strong technologically.
They can do things from afar that I can't do here,
So I don't want to rule that out, but it
is an advantage to be close by.
Speaker 1 (26:32):
And what about too, I kind of mentioned if you've
got multiple children and you're choosing one, should you worry
about the fact that someone else might get their feelings
hurt or is it going to stir up any kind
of controversy in the family.
Speaker 4 (26:46):
Well, sure you do think about that, but you really
can't be controlled by that. I think it's important to
be sensitive to the members of the family who are
included or excluded. On the other hand, you have to
pick the person based on these objective criteria that you
and I are talking about. You can't try to avoid
looking like you're playing favorites. I'm a big fan of
(27:09):
using co agents, and what I mean by that is
that you have one person that you name, and then
you name another person as a backup. I am not
a fan of having two simultaneous agents. That is a nightmare.
You don't want to have two people acting at the
same time. On the other hand, it is important to
have a primary agent and then a backup agent. And
(27:31):
if you have two kids, then they're that way, they're
both involved. Or if you have more than two kids,
you know that you can list two or three backups. Eventually,
you can include everybody if it's not a gigantic family.
But again I would not include people who are not
well suited for this kind of work. There are people
who just aren't interested in the drudgery of balancing people's
(27:53):
checking accounts. And paying bills online and this is not
fun stuff. Yeah, so don't hesitate to skip somebody who's
not good at it or not interested in it.
Speaker 1 (28:07):
Mark. For those listening who were saying, well, I'm young, healthy,
this is not something I need to worry about, what
do you say to.
Speaker 4 (28:14):
Them, Well, I'm a big fan in having these things
done for everybody. As I said before when we were
talking about my son being on the Appalachian Trail that
he was probably twenty five at the time. I tell people,
as soon as you get eighteen, you ought to have
your kids sign a power of attorney. And amy this
conversation is about financial powers of attorney. There are powers
(28:36):
of attorney for healthcare as well. That's a different document,
but those documents are just as important because if you're injured,
somebody needs to make medical decisions for you. And so
I tell people, when your kids turn eighteen nineteen twenty,
you ought to have them signed both a financial POA
as well as a medical POA.
Speaker 1 (28:55):
Great advice as always from our estate planning expert, Mark
Rekman from the law firm of Wood and Lamping. Everyone
needs a power of attorney. How to make sure that
you choose the right agent for you. You're listening to
Simply Money presented by all Worth Financial. You're in fifty
five KRC, the talk station. You're listening to Simply Money
(29:17):
presented by all Worth Financial. I Meani Wagner along with
Andy Schaefer. If you've got a financial question, it's keeping
you up at night. You and your spouse maybe just
aren't on the same page. There's a red button you
can click them while you're listening to the show. Right
there on the iHeart app record your question. It's coming
straight to us and straight ahead signs you may be
addicted to costco and spending too much money there. I
(29:39):
actually know from people that I could say, I think
you have a bit of an addiction. We talk all
the time about the importance of talking about money in
your relationships, and we've said it in the past, like, hey,
when you're getting ready to or your children or grandchildren
are getting ready to get married, that has to be
a conversation with that person. And it's not though even
you know getting married and then you're going to have kids.
(30:01):
It is an ongoing conversation that continues throughout the course
of that relationship, even later in life, even when you
get to retirement, and so I just want to give
some some ways to figure out maybe if this is
a healthy conversation that you're having in what it should
look like. And one of them is how often do
you talk about it. I'm not saying this has to
be a daily basis, which probably in my house, my
(30:22):
people would be like, oh my gosh, mom's talking about
money again. And that's just how my brain works. But
you know, I think about people like Al Riddick that
we have on our show, right from game time budgeting.
I think he and his wife sit down monthly and
they run their home like a business. They look at
cash flow, you know, they look at their net worth
and they say, you know, have we given our dollars
(30:43):
a job? And they're they're very serious about that. What
do you guys do?
Speaker 3 (30:47):
Well, we have a very specific approach.
Speaker 2 (30:51):
I pay the bills and she pays for all the
fun things that we do.
Speaker 1 (30:55):
Right, so you keep money separate.
Speaker 3 (30:57):
We do keep money separate.
Speaker 2 (30:58):
And so you know, my my our focus is you know,
when I tell Kender, I say, listen, you know, she
works two jobs. She's a very hard worker, and for her,
she has specific goals that she wants to achieve. You know,
we just recently moved into a new house and one
of her financial goals was I want to pay for
all the new furniture. And I think that's great, right,
(31:21):
So we just divide kind of our approach. You know,
I take care of certain bills and she takes care
of other bills. We don't have a joint bank account,
and I think people will always ask.
Speaker 4 (31:34):
Her, why wouldn't you have a joint bank account.
Speaker 2 (31:36):
She always says, well, I don't want Andy to know
what I'm spending my money off.
Speaker 1 (31:40):
Whatever works for you. But I also noticed that we
are talking about this. You're telling me what financial goals are.
You're aware of what each other's goals are. I'm sure
that you have some that line up with each other.
And that's part of an ongoing conversation. If you're never
talking about money goals, how are you going to get
any closer to accomplishing them? Right, So figure out what
(32:01):
your financial plan is. And for couples who it's really
difficult to get on the same page, I like to
look at this from like a values based standpoint, figuring
out maybe two or three things that are important to
both of you. If you both love travel, if you
prioritize family, if you have family, and maybe education is
(32:21):
one of those. Okay, then you look at how you're
spending money through those lenses. Is it helping us, you know,
spend time together as a family, or are we getting
to take these trips if we want to help our
kids get educated, are we putting money into a five
twenty nine to help them do that?
Speaker 4 (32:35):
You know?
Speaker 1 (32:35):
And if someone comes up with something out of left field,
like I want to join a country club because I
want to play golf, well I don't think so if
the money isn't there because it doesn't line up with
what we've talked about, kind of that we're on the
same page with. So I think that's one thing that
you can do. Investment risk, Are we on the same page?
This is a tough one. As you know my ex
husband and I, he didn't have a ton of risk tolerance.
(32:58):
He was super conservative. I'm not, you know, I'm like, gosh,
I'm in my forties. I've got plenty of time to save.
But it is it happens quite often where not everyone's
on the same page.
Speaker 2 (33:09):
Yeah, And when I meet with people for the first time,
it's interesting, you know, going through a risk tolerance you know,
exercise and a lot of times you'll you'll see surprise
on each each spouse's face when they are a little
bit unaligned, and it forces couples to start to have
conversations about, you know, how aggressive can we be? What
(33:32):
is our risk tolerance? Is there a sweet spot there?
And you can tell that these conversations haven't been had before.
But I think that's why it's important to go through
exercises like this so it develops discussion and conversation. It's
okay to have differing opinions, but I think having an
assion is healthy and coming to some type of conclusion
(33:54):
is good for everybody.
Speaker 1 (33:56):
I'm going to tell you something that I've seen happen
several times, and that is where I say, Okay, you
have your own floral one k at work, and you
have your own floral one k at work. If you
want to be conservative, you be a little more conservative
in yours. And if your spouse tolerates more risk, let
them take on more risk. And the funny thing is
it ends up sort of evening itself out, not only
just because of what they're invested in, but also over time,
(34:19):
as they're communicating. In times that markets are up, the
one that's more conservative is like, you're starting to amass
more money in your account than I am. On the
flip side, when the markets are down, the one who
is more risky is looking at the other one. So
they tend to kind of come to the middle over time.
If they're talking about those things. Another good thing to
figure out is are we keeping good financial records? Right
(34:41):
if something were to happen to one of the other ones,
do we know where everything is? Are we keeping good records?
That's all incredibly important. And I also just think both
of you understanding what the plan is so that if
one of you is incapacitated, the other one can just
jump in and not skip a beat.
Speaker 2 (34:58):
Yeah, it's important to both have some exposure and participation
in financial matters, particularly within your investment portfolio and your
total financial portfolio. I always encourage my clients to come
together as a couple. Usually what you see is there's
one particular spouse that is the driver for most financial decisions,
(35:19):
and they handle most of those conversations. But as you
continue to get older, it's important that the other spouse
is on the same page. So that not only do
they know who to go to talk to, but where
the records are, how the accounts are titled, how they're registered,
what about.
Speaker 3 (35:35):
Our state documents and so on.
Speaker 2 (35:37):
So I know a lot of times that people kind
of divvy up those roles. But as you age, I
think it's important that you get on the same page
and include the other one in those financial decisions.
Speaker 1 (35:47):
Here's the all Worth advice. Consistent communication along with an
understanding of how the other person feels about money, can
go a long way toward achieving financial freedom. Together, it
is a place where you can get carried away and spend,
spend and sped, how to cut back and how to
know whether it's time to cut back. Next, you're listening
to Simply Money presented by all Worth Financial. Here on
(36:07):
fifty five krs the talk station. You're listening to Simply
Money presented by all Worth Financial a Memi Wagner along
with Andy Schaeffer. Costco is so popular it almost has
like a cult like following. And if if you or
someone you know goes there, you may actually have an addiction.
We'll talk about what that looks like. In my family,
(36:28):
we were kind of late adapters, late adopters to a Costco.
We got a membership about a year and a half ago.
I can see how it's really dangerous to go in.
You get certain things that you know that you're saving on,
but then like something pops up in the middle of
that store and it's just cool and you want to
buy it, And I think that's where you can get
(36:49):
into a little bit of trouble. You said you recently
got a Costco membership.
Speaker 2 (36:53):
Yeah, my wife and I got a Costco membership, you know,
but we live kind of out in the country, so
there's really not a lot of Costcos around, but we
use their delivery service for paper goods and things like that.
I've often wanted to go into those stores to kind
of see what it's like. My sister is a Costco enthusiast.
She's you know, even bought tires and trips and things
from from Costco, So I get it. But my wife
(37:16):
and I don't have kids, so we don't really have
a big need for bulk products, and you know, we
want to make sure that we do a good job
of not being wasteful, so we haven't really taken full
effect of everything that Costco has to offer. But I'm
sure we'll probably step in there pretty soon.
Speaker 1 (37:32):
Yeah, all right, Well this is going to sound like
the beginning of a joke. But you know you have
a problem when it comes to Costco if you cannot
resist their limited time offers. Right, It just that sense
of urgency gets you every time. You may not even
need it, but it's not going to be there in
a month, so you should buy it now. Don't buy
that if you don't need it. If you are going
there all the time, even unplanned trips, just to see
(37:54):
what they've got in the store, or maybe your pantry
looks actually like a Costco warehouse itself, and you could
never eat or use all of that stuff before it expires.
It just makes zero sense. And if you're trying to
justify unnecessary purchases, if I would say, this is the
lens that you look at everything, do we need it?
(38:15):
Do we need it?
Speaker 3 (38:15):
If we don't?
Speaker 1 (38:16):
No, I mean I was even telling you golf balls
are actually a good deal at Costco. Well, if you're
gonna buy golf balls anyway, and they're a good deal there,
of course, by them there. If you don't need golf balls,
don't buy the golf balls.
Speaker 2 (38:27):
Well, you always need golf balls, and we have read
the show Birthday's Christmas, whatever, happy to get golf Well, we.
Speaker 1 (38:36):
Will leave the show with that you'll always need golf balls.
Thanks for listening, even listening to Simply Money presented by
Always Financial here in fifty five KRC, the talk station
Tonight, is retirement actually a stupid idea? A prominent political
commentator thinks, so should you. Of course, we'll tell you
what we think. You're listening to Simply Money, presented by
all Worth Financial Amami Wagner along with Andy Shaeffer. Okay,
so lots of people having big responses. Andy to what columnist, lawyer, author,
(00:27):
political commentator? He's got a lot of titles. Ben Shapiro
said on his podcast recently, I'll just give you the
quote and then I'll let you react. He said, frankly,
I think retirement itself is a stupid idea unless you
have some sort of health problem. Uh yeah.
Speaker 2 (00:44):
He might not be in touch with the reality of
everyday workers.
Speaker 1 (00:49):
The people who get out of bed every Monday and
count how many more Mondays they have to until they
can retire.
Speaker 3 (00:55):
Right, I mean, so, what is this guy?
Speaker 2 (00:57):
He gets up at what ten am, makes his coffee
and gets on a podcast. I mean, that's yeah, it's
easy for him to say that, you know, he doesn't has,
you know, probably work until he's you know, eighty, by
just talking on the uh, you know, on the computer.
So I think it's a little misguided, you know, I
don't think he's taken into.
Speaker 3 (01:16):
Account blue collar workers.
Speaker 2 (01:17):
I have a lot of family and friends that are
blue collar workers, you know, I have a lot of
clients that are blue collar workers. And you know, you
start getting into your mid to late fifties, particular, if
you're blue collar and your your body just can't handle
it anymore. I have one client in particular I'm thinking about.
He has an HVAC company, and he's in his late fifties,
and he's he tells me every time I see him,
(01:38):
he says, man, I don't I just don't know how
much longer I can go. And so, you know, I
understand what he's saying. People are living longer, you know,
and if you enjoy your job and you like to
be productive, I understand that. But to make a blanket
statement like that, I think is reckless.
Speaker 1 (01:53):
Yeah. First of all, mister Shapiro, he's forty years old,
He's worth like fifty million dollars. He has a media empire, right,
he probably could retire today if he wanted to, And
he could retire today and be just fine. So yeah,
I think he's a little out of touch. You know,
you go back to when retirement even began. I mean,
it used to be that most Americans worked on farms
(02:16):
and until they could no longer get to the field,
and then it was like maybe they just like expired
while they were in the middle of the corn rows,
like that's how it used to be. And then people
started working, to your point in blue collar jobs like
factories making cars for Ford, and Ford realized, you know,
first of all, you have to pay people so much
(02:37):
as they continue to work and work and work. So
they figured out that the pension system was actually better
for them. Second, twenty four year olds on a factory
line probably going to be faster and in better shape
than maybe you are going to be when you're seventy
four years old. So the whole system sort of made sense.
We sort of changed as an entire country and economy.
(02:58):
And then I think about, you know, mister, have you
thought about pilots. Do you want a pilot piloting the
airplane that you're on who's ninety seven years old?
Speaker 3 (03:07):
Probably not.
Speaker 1 (03:09):
You know, do you want a doctor who can no
longer see diagnosing you? Probably not. So whatever you think
about this man's political viewpoints, you know that aside, I
would question what he is saying about retirement as a
concept here. But I will say some of the points
that he went on to make, in my opinion, are
(03:33):
not super far from the mark.
Speaker 2 (03:36):
Yeah, and I think that, you know, when you know,
some of the things that I think he was actually
trying to say.
Speaker 3 (03:42):
Doesn't really reflect you know, that quote.
Speaker 2 (03:45):
And I think what he was trying to say is
that we just really shouldn't rely on social security when
we retire. You know, my grandparents' generation, like you said, Amy,
you know that that generation, they got out of high school,
they worked one job, they worked it for thirty years,
and their their retirement was social security and a pension.
Speaker 3 (04:03):
Yeah.
Speaker 2 (04:04):
Uh, you know, my grandparents, you know, didn't have two
nickels to rub together, and that's what they depended on.
Speaker 3 (04:10):
You know.
Speaker 2 (04:11):
But you know, I think his thoughts, you know, were
also about people losing their edge, you know, if you
if you stop working. And I can understand that. I
remember early in my career, I accepted a new position
at another broken's firm, and between the one that job
that I had and the one that I was starting,
there were three weeks that I had him between those
two jobs. The first week was great, you know, I
(04:32):
was being lazy bones scouts data. It was awesome. The
next week, you know, I started feeling like I wanted
to get back into the workforce.
Speaker 4 (04:39):
In the third week, I was crazy.
Speaker 2 (04:40):
I felt like I wasn't being productive. I felt like
my mind was kind of turning them much to some degree.
So I do understand some of his points about staying active,
trying to find you know, activities, and retirement to keep
keep your mind sharp, keep your body sharp. Uh, but
I think his delivery was just off base.
Speaker 1 (05:00):
One of the points that he makes about social security is,
first of all, you shouldn't plan on living off of that.
I agree. Actually, the system was never set up to
support more than forty percent of what you're bringing home.
You know, and you're talking about our parents, our grandparents' generation,
they had what was referred to in retirement as a
three legged stool. They had the pension which their employer
(05:22):
was taking care of. They had one hundred percent of
their promised Social Security benefits. So if the third leg,
which was the part that was on them right, their
personal savings for retirement came up a little short, well,
that was okay, we don't have a three legged stool
to anymore. Most of us don't, right. I mean, one
of those legs, pension for many of us is completely gone.
(05:42):
Then you talk about social security and the fact that
that's certain leg and now all of a sudden, the
leg that you're contributing to becomes so very important, and
so you know that it has to be on you
to save and plan for retirement. But one of the
things he says is, and he's a proponent of, is
raising full retirement age to the age of seventy. When
(06:06):
this system was first set up in the nineteen thirties,
full retirement age was sixty five. Guess what, most Americans
didn't live to sixty five at that time. No one
got to the point where they were claiming. There have
been so many medical advancements since then, most of us
are living longer. And so I don't necessarily think that
raising full retirement age is the worst idea. What we
(06:29):
know is that there is a social security crisis, and
if something doesn't happen before the year twenty thirty four,
you're likely going to get seventy five eighty percent of
your promise benefit. This is a really this is a
political hot potato. You know, we've been so lucky on
this show that we have had us senators come on
the show many times and and sort of weigh in
with different issues and things that are going on in Washington.
(06:52):
Every single one of them. I have brought up the
social security issue. And you want to talk about watching
a man's tap dance? Wow, I mean, it just didn't
want to go there. And I would ask repeatedly and
many times and very pointedly, you know, and it is
something that has to be addressed, and it is not
you know, any way that you go. Whether you're raising
(07:13):
full retirement age, whether you're taxing people who have saved
better for retirement, all of these things are going to
be unpopular. But you got to think back, this has
been done before, raising full retirement age, and we've all
survived it, right, We've all been okay. And so I
don't think that what Ben Shapiro saying about raising full
(07:34):
retirement age as an option for saving the Social Security system,
it's terrible. It is one option that I think it
needs to be on the table and needs to be considered. Now,
what he's saying about retirement overall completely off base. You're
listening to simply money presented by all Worth Financial Imemi
Wagner along with Andy Schaeffer. Sometimes we just see things
in the headlines and things that people are talking about
(07:55):
when it comes to your money and your retirement and
your investments, and we have to sound off, right, We
have to add our voice to the conversation. And so
you know this, this huge political pundit is sounded off
saying he thinks retirement is a joke and if you retire,
you're going to lose your edge. For many people, I
see incredibly fulfilled lives in retirement. I mean, I wonder
(08:17):
what he is referring to when he's saying losing your edge.
For most people, they want to spend more time with grandkids,
They like to travel more. Are they mentally not as
sharp as they were before?
Speaker 2 (08:29):
I don't think so well, Especially if you have grandkids.
Speaker 3 (08:32):
You know they'll keep you active. You know, they'll keep
you sharp.
Speaker 2 (08:35):
You know, when I'm around my nieces and nephews, you know,
the intelligence that they have keeps.
Speaker 3 (08:40):
Me on my toes.
Speaker 2 (08:42):
You know, they'll recognize things and point things out. And
you know, sometimes I underestimate their intellectual capabilities and they
surprise me all the time. But you know, I think
you know, to another degree. You know, when you talk
about retirement, that doesn't necessarily mean that you're not going
to be productive. Most of Michael when they retire, even
if they retire early, they find other things that they
(09:04):
are interested in. I have one client that works at LLBAN.
I have another client that started woodworking and now he
builds guitars, you know.
Speaker 3 (09:15):
And I have another client.
Speaker 2 (09:16):
It was funny because he and his wife decided that
they wanted to work in Low's garden center. The neat
thing about that older generation, and to the detriment of
them to some degree, is that they just wanted to
work twenty hours a week. Said, you know, Andy, we're
just going to work twenty hours a week. The problem
is is that generation, super disciplined, shows up on time,
(09:36):
and before you know it, they're asked to be the
manager and they're working forty hours a week. So if
you do decide that you want to find something that
you enjoy, whether it's working on a golf course or
volunteering or things like that, make sure you set boundaries
and guidelines for the hours that you want to put
in because that generation particularly is very disciplined, works very hard,
(09:57):
and so you want to make sure that you do
have guidelines if you do go back to work.
Speaker 1 (10:01):
To some degree, I think retirement means different things to
different people. I mean, for some, you've been working forty
fifty sixty hours for years now and you just want
to be done. You don't ever want to have to
clock in, you don't ever want to have to be
responsible for anything, and you're not worried about a paycheck.
That's great if that's what works for you. To your point, Andy,
there's a number of people that use it as a
(10:22):
way to pivot. Maybe you know, you've been doing something
for years that you're no longer passionate about, but in
the background, you actually really love woodworking and making guitars
and music, and so that gives you the opportunity to
do that if you make a little extra money on
the side. Absolutely. I was in Subway last week with
my son. He was grabbing a sandwich between basketball games,
(10:43):
and the man in front of us and line said,
you know, are you Amy Wagner. I listened to you
all the time, and he said, I'm retired. Well, I'm
kind of retired. He said, I actually have a small
lawn cutting business. And he said, and I do that
to pay for my Bengals tickets. Cool, brilliant, Right, Bengals
tickets aren't cheap, right, any any admission tun NFL Stadium
(11:05):
never cheap. He enjoys that. I don't know if he
could afford it with his retirement or not, but he
does something on the side that it's fun, he says,
my wife loves it. It gets me out of the house,
pays for my Bengals tickets. Win win. You know, I
don't know if he considers that fully retired. He still
got some paycheck coming in. But he has the flexibility
to do what he wants to do. And I don't
(11:26):
think you can overstate that. So, mister Shapiro, we don't
agree with you when it comes to retirement. We think
it means lots of different things to different people. I
do not think it means losing your edge, and I
do also, though, agree, social Security is a system that
we need to look at that may include raising full
retirement age. Who knows. We'll see what they come up
with in Washington. Here's the all Worth advice. We believe
(11:47):
everyone's financial journey is unique, not one size fits all.
Coming up next, we're gonna tackle specific mindsets that could
hurt your financial progress. You're listening to Simply Money presented
by all Worth Financial here in fifty five K see
the talk station. You're listening to Simply Money presentably all
Worth Financial. I mean, we Wagner along with Andy Schaefer.
(12:08):
If you can't listen to our show every night, you
do not have to miss a thing. We have a
daily podcast where you just search simply Money. It's right
there on the iHeart app or wherever you get your podcasts.
Coming up at six forty three, we've got four questions
that we would say that you and your spouse need
to be asking each other, especially maybe if you have
just retired. We'll get into that. Okay, so financial independence
(12:31):
it requires making smart money decisions. But there's a mental
component to this as well. Andy. It's having the right
kind of mindset. And you know, we kind of come
across some mindsets, you know, after working with people for
so many years, and you're like, yeah, that's probably not
going to cut it. Let's get into some of those.
Speaker 2 (12:48):
Yeah, it's interesting that and this is something that is
interesting to me too. The psychological aspect of money is
something that I'm learning more and more about the way
that you think about money, how you approach money, and
a lot of times it can be counterintuitive to the
way that you should really approach it. You know, a
lot of times people say, you know, more money will
(13:10):
solve all my problems. Well, that mindset can be harmful
because it can lead to neglecting non financial aspects of
your life. So, just because you strive to make more money,
that is not going to make whatever problems that you
have in your life go away.
Speaker 3 (13:28):
That is not the answer. You know, you want to make.
Speaker 2 (13:30):
Sure that you do prioritize a little bit of continuing
growth in your financial plan, but you don't want that
to take precedence over, you know, the expense of your
personal relationships, your health, and.
Speaker 3 (13:44):
Your personal fulfillment.
Speaker 2 (13:46):
So it's really important to find a balance between money
and happiness, you know. You know, I work with a
lot of people that you know, enjoy simple things in life.
Speaker 3 (13:56):
I like going to.
Speaker 2 (13:56):
Frish's that doesn't cost a lot of money. So, you know,
just because you've accumulated more money, that is not the
answer to your health, of your life and the problems
that you might be dealing with from every day challenges.
Speaker 1 (14:10):
Well, I think you can make more money, but you
can also spend more money. So it's this vicious cycle
that you're never going to get out of. So I
think you have to figure out how to have a positive,
really healthy relationship with money. And if you don't, and
you're continuing to spend and you're in debt and you're thinking, well,
you just need more, more money will help solve these problems.
(14:31):
Absolutely not. You've got to figure out exactly what the
problems are and solve them yourself. But there's also been
research done on money and happiness and it shows you know,
after you get passed, it depends from year to year
seventy to ninety thousand dollars in income, you're no happier.
So you might think if I make more, I'll be
(14:51):
less stressed, right, and that's going to make no, no, no, no,
it actually doesn't. It doesn't solve any more problems. There's
research that shows this, so terrible minds that to have
money doesn't not solve problems. You have to solve your problems,
and if you have them with money, they're not just
going to go away on their own. Lots of people
also have this mindset, I'm going to get to retirement later.
I'm gonna start saving for it later. You know, I
(15:13):
think about Andy, you and I we're both in our forties,
and you know, for many who have you know, kids
at this age, it's you know, they played travel sports
and it's expensive, or you think you're going to start
saving after they finish with this sport, or you're going
to start saving after you finish that big trip to
Europe next year. Well, there's always going to be a
next thing, and so you have to start now. And
(15:36):
even if you're starting small, it's better than nothing.
Speaker 2 (15:39):
Yeah, I think the most important thing is just getting
in good habits. You know, when I was a kid,
I remember my mom and dad just putting a little
bit away when I was a kid, whatever they could do,
even if it was five dollars a month, right, just
to get in those good saving habits. Now that being said,
I will say this, and this is the case in
(16:00):
my fam in my parents' case as well. Most people
actually don't start accumulating real wealth until their forties and fifties.
And so I get it right, It's hard, especially if
you're raising a family and you have kids. You know,
most people are just trying to keep their head above water,
trying to pay the bills, you know, make sure that
their kids are taken care of, and a lot of
(16:21):
those things. And usually once the kids are out of
the house and hopefully off the payroll, that's when you
start accumulating real wealth. So I do see that occurring
with my experiences with my clients. However, again, I think
it's important to getting good saving habits and being able
for a little bit of money away when you can,
and also increasing those savings as you continue on. You know,
(16:44):
if you get a raise at your job, reward yourself
with a little bit of extra money in your bank account,
but also try to add a little bit more to
your four to one k. You know, after the first
couple of months of those savings, you're not going to
miss that money.
Speaker 3 (16:58):
So I think there is a sweet well, I.
Speaker 1 (17:01):
Think if you think about it, if you're someone who's like,
I'm gonna wait until the kids get out of college
and then I'll start saving, many of us are having
kids later and later in life, so that runway between
your child graduating and you retiring is becoming shorter and shorter,
and you are missing out on that sort of magical
power of compounding. So I love the point that you
(17:22):
made about your parents. Even if they're saving just five
dollars a month, it's something. And then that money has
more time to grow. So, and here's another one that
can really get you in a hole. Spending less is
the same as saving more. Now I say this often
money not going out is the same as money coming in.
So you know, if you pay off your mortgage before retirement,
(17:44):
you're essentially giving yourself a raise. However, not spending money
is not the same as investing that money in giving
that money the chance to grow, you can put it
under your mattress. Great, you know it's not ever going
to outpace inflation that way.
Speaker 2 (18:01):
Yeah, and this is where the psychology gets interesting to me.
You know, when you think about save spending less is
the same as saving more. The psychology behind this mindset
can limit your financial growth. And one of the ways
that it can do that is it can prevent you
from seeking growth and exploring opportunities to increase your income.
(18:22):
It can hinder your drive to continue to achieve and
exceed your financial expectations from an income point of view.
So if you think, well, instead of trying to achieve
my financial goals through hard work, discipline, capitalistic approaches. Instead
of achieving those types of goals, I'm just going to
(18:44):
limit my outflows that can hinder some of your personal
growth and financial growth. So that's the type of psychology
and mindset that is very curious to me, but it
does make sense.
Speaker 3 (18:56):
To me as well.
Speaker 1 (18:57):
Another harmful mindset is about keeping up with the Joneses. Now,
I'm betting if I asked one hundred of you, if
you actually try to keep up with the Joneses, you'd
be like, no, I do not. And I'm gonna call
BS on that one. Because most of us are on
social media and there is just something that gets in
and you may not even be aware of it, but
you start to think, wait a second, I went to
college with him, and he can afford that house. I
(19:19):
should be able to afford that house, or that vacation
or that kind of car. You don't know what I
will say. If they could put on Social Security what
someone's credit score is or credit card debt, then maybe
you could say, okay, should we should be able to
afford that? But don't try to keep up with the Joneses.
Here's the all Worth advice. The key to financial freedom.
It's really not just about money. It's about how you
(19:40):
think of those dollars and what you'll ultimately do with them.
Coming up next, the rules of thumb when deciding who's
going to become your power of attorney. It's incredibly important.
You're listening to Simply Money and presented by all Worth
Financial here on fifty five KR see the talk station
(20:03):
listening to Simply Money, presented by all Worth Financial. Immi
Wagner along with Steve Riby. I think this is something
that's probably on your list of things to do if
you don't have all of your estate planning documents in order,
one that maybe people tend to put off, but it's
incredibly important. Tonight we're joined by Mark Reckman, our state
planning expert from the law firm of Wood and Lamping,
(20:23):
talking about a power of attorney. Mark, I want to
get into what exactly the power of attorneys are, why
you need them, and also, more importantly, how do you
know who to choose?
Speaker 4 (20:34):
Oh? Exactly And a lot of people are confused by
the phrase power of attorney because they think it requires
a lawyer. And while a lawyer prepares this document, the
document actually is designed to appoint someone else to be
your agent to make decisions for you, and it isn't
usually the lawyer.
Speaker 1 (20:54):
So when would you talk Let's talk about when you
would need these.
Speaker 4 (20:58):
So this would act on your behalf, if you're on vacation,
if you're sick, if you are temporarily indisposed for any
particular reason. Also, sometimes in partnerships or in marriages, you
have one party who does most of the money managing
or most of the financial decisions, and if the other
(21:20):
partner in the marriage signs of power of attorney, then
the acting partner can sign for both of them and
make decisions for both of them, which for many people
that's constructive. For other people, they prefer to make their
own decisions.
Speaker 1 (21:35):
Lots of reasons. Right as you mentioned why you would
want these. I think you even brought up one time
your son was hiking the Appalachian Trail, not so easy
to be found there. He made you his power of attorney.
Speaker 4 (21:46):
Well, and most people who hike the trail try to
minimize their weight and carrying a cell phone. And you know, nowadays, Amy,
I think people probably do carry a cell phone. But
ten years ago you didn't carry a cell phone. You
didn't carry anything you didn't need every day. But a
power of attorney was very helpful to my son because
(22:06):
it took him four months to walk that trail from
end to end, and something came up while he was gone,
something that he didn't really expect. It was a glitch.
He had eye surgery before he did it, so that
he didn't have to wear contacts, and he had set
up the payment plan for the surgeon, and sometime while
he was gone, the payment plan failed for some reason.
(22:28):
I don't remember what, but I was able to call
the bank and call the doctor and get the thing
right back on track, and everyone was in good shape.
In that case, he picked me to be his agent.
He was single at the time, and I was available
and glad to do it for him.
Speaker 1 (22:44):
And you know, I think many people think of a
power of attorney as sort of end of life, you know, incapacitated,
that sort of thing. You know, and you are going
to need in that situation, someone who can make decisions
for you, both both medical and financial.
Speaker 4 (23:01):
Well, that's exactly right. And for married people it's usually
the spouse, but it doesn't have to be. It's often
children and when, as you said, if you're elderly or infirm.
Your kids may be the logical place to go for this,
if they're adults and they're good at this. And what
I tell people is that it's important to pick someone
that you trust to act in your best interest. And
(23:23):
this is one of what I call the seven rules
of choosing an agent in your power of attorney. You
got to start with the single most important thing, and
that's trustworthiness. People have to act honestly, deliberately, and transparently,
and that list is everybody. Most people know someone who
can do that, and for those people who don't, you're
(23:45):
going to need to get professional help.
Speaker 1 (23:47):
I think another part of this, too, Mark, is this
needs to be someone who can remain level headed in
a time of crisis. Now, with the example of your
son and the applation Chail, that was not a crisis.
But if it is your parent or your spouse, your
loved one in a you know, a medical emergency, you
(24:07):
know you can't talk to them, and this person just
you know, cannot keep it together, cannot remain cool in
order to make you know, smart decisions, probably not your person.
Speaker 4 (24:19):
And I think I think that's right, amy of course,
but I think it also comes down in sort of
two ways that that's important. One, the person has to
have the emotional capacity, which is what you're talking about,
the ability to stay level headed and make decisions that
are tough and do so promptly. But also it's important
that someone has the time, had the emotional capacity, and
(24:39):
the time to take to find out what they need
to know before making decisions.
Speaker 1 (24:45):
I think about my best friend who is incredibly cool,
calm and collected under the worst kinds of circumstances, and
when she makes a decision, she she's on it like
she's decisive, she will execute, She's insanely organized and thinking.
Those are probably all great characteristics for someone if you're
looking for in this kind of situation.
Speaker 4 (25:07):
Well and being well organized is important. On my list,
it's item number three on my seven lists of an
item list. But that doesn't mean that they need to
be an accountant. They don't need to be a lawyer
or a financial planner like you. They just you can
hire those skills. They just need to be organized enough
to know where to get the help they need.
Speaker 1 (25:27):
I think sometimes you know, for parents, particularly parents who
have multiple children, if you're trying to think through which
ones should act in this kind of a way right
as a power of attorney, And sometimes I think that
there's no agreement among the kids, like why did you
choose that one. One component of it is if there's
other kids that are out of town, but one that's
closer to you, it just makes it easier.
Speaker 4 (25:50):
You know, that's becoming less and less important, but it
certainly is still relevant to most of us, helpful at
least important. It's just playing easier for someone who lives
in your community to go to the banks, to collect
to add your accounts, to collect your mail. There's a
lot of very routine day to day things if you're
(26:12):
sick that you can't handle. If there's someone local, it's easier. Now,
that's a lot can be said for setting these things
up out of town. Both of my boys are strong technologically.
They can do things from afar that I can't do here,
So I don't want to rule that out, but it
is an advantage to be close by.
Speaker 1 (26:32):
And what about too, I kind of mentioned if you've
got multiple children and you're choosing one, should you worry
about the fact that someone else might get their feelings
hurt or is it going to stir up any kind
of controversy in the family.
Speaker 4 (26:46):
Well, sure you do think about that, but you really
can't be controlled by that. I think it's important to
be sensitive to the members of the family who are
included or excluded. On the other hand, you have to
pick the person based on these objective criteria that you
and I are talking about. You can't try to avoid
looking like you're playing favorites. I'm a big fan of
(27:09):
using co agents, and what I mean by that is
that you have one person that you name, and then
you name another person as a backup. I am not
a fan of having two simultaneous agents. That is a nightmare.
You don't want to have two people acting at the
same time. On the other hand, it is important to
have a primary agent and then a backup agent. And
(27:31):
if you have two kids, then they're that way, they're
both involved. Or if you have more than two kids,
you know that you can list two or three backups. Eventually,
you can include everybody if it's not a gigantic family.
But again I would not include people who are not
well suited for this kind of work. There are people
who just aren't interested in the drudgery of balancing people's
(27:53):
checking accounts. And paying bills online and this is not
fun stuff. Yeah, so don't hesitate to skip somebody who's
not good at it or not interested in it.
Speaker 1 (28:07):
Mark. For those listening who were saying, well, I'm young, healthy,
this is not something I need to worry about, what
do you say to.
Speaker 4 (28:14):
Them, Well, I'm a big fan in having these things
done for everybody. As I said before when we were
talking about my son being on the Appalachian Trail that
he was probably twenty five at the time. I tell people,
as soon as you get eighteen, you ought to have
your kids sign a power of attorney. And amy this
conversation is about financial powers of attorney. There are powers
(28:36):
of attorney for healthcare as well. That's a different document,
but those documents are just as important because if you're injured,
somebody needs to make medical decisions for you. And so
I tell people, when your kids turn eighteen nineteen twenty,
you ought to have them signed both a financial POA
as well as a medical POA.
Speaker 1 (28:55):
Great advice as always from our estate planning expert, Mark
Rekman from the law firm of Wood and Lamping. Everyone
needs a power of attorney. How to make sure that
you choose the right agent for you. You're listening to
Simply Money presented by all Worth Financial. You're in fifty
five KRC, the talk station. You're listening to Simply Money
(29:17):
presented by all Worth Financial. I Meani Wagner along with
Andy Schaefer. If you've got a financial question, it's keeping
you up at night. You and your spouse maybe just
aren't on the same page. There's a red button you
can click them while you're listening to the show. Right
there on the iHeart app record your question. It's coming
straight to us and straight ahead signs you may be
addicted to costco and spending too much money there. I
(29:39):
actually know from people that I could say, I think
you have a bit of an addiction. We talk all
the time about the importance of talking about money in
your relationships, and we've said it in the past, like, hey,
when you're getting ready to or your children or grandchildren
are getting ready to get married, that has to be
a conversation with that person. And it's not though even
you know getting married and then you're going to have kids.
(30:01):
It is an ongoing conversation that continues throughout the course
of that relationship, even later in life, even when you
get to retirement, and so I just want to give
some some ways to figure out maybe if this is
a healthy conversation that you're having in what it should
look like. And one of them is how often do
you talk about it. I'm not saying this has to
be a daily basis, which probably in my house, my
(30:22):
people would be like, oh my gosh, mom's talking about
money again. And that's just how my brain works. But
you know, I think about people like Al Riddick that
we have on our show, right from game time budgeting.
I think he and his wife sit down monthly and
they run their home like a business. They look at
cash flow, you know, they look at their net worth
and they say, you know, have we given our dollars
(30:43):
a job? And they're they're very serious about that. What
do you guys do?
Speaker 3 (30:47):
Well, we have a very specific approach.
Speaker 2 (30:51):
I pay the bills and she pays for all the
fun things that we do.
Speaker 1 (30:55):
Right, so you keep money separate.
Speaker 3 (30:57):
We do keep money separate.
Speaker 2 (30:58):
And so you know, my my our focus is you know,
when I tell Kender, I say, listen, you know, she
works two jobs. She's a very hard worker, and for her,
she has specific goals that she wants to achieve. You know,
we just recently moved into a new house and one
of her financial goals was I want to pay for
all the new furniture. And I think that's great, right,
(31:21):
So we just divide kind of our approach. You know,
I take care of certain bills and she takes care
of other bills. We don't have a joint bank account,
and I think people will always ask.
Speaker 4 (31:34):
Her, why wouldn't you have a joint bank account.
Speaker 2 (31:36):
She always says, well, I don't want Andy to know
what I'm spending my money off.
Speaker 1 (31:40):
Whatever works for you. But I also noticed that we
are talking about this. You're telling me what financial goals are.
You're aware of what each other's goals are. I'm sure
that you have some that line up with each other.
And that's part of an ongoing conversation. If you're never
talking about money goals, how are you going to get
any closer to accomplishing them? Right, So figure out what
(32:01):
your financial plan is. And for couples who it's really
difficult to get on the same page, I like to
look at this from like a values based standpoint, figuring
out maybe two or three things that are important to
both of you. If you both love travel, if you
prioritize family, if you have family, and maybe education is
(32:21):
one of those. Okay, then you look at how you're
spending money through those lenses. Is it helping us, you know,
spend time together as a family, or are we getting
to take these trips if we want to help our
kids get educated, are we putting money into a five
twenty nine to help them do that?
Speaker 4 (32:35):
You know?
Speaker 1 (32:35):
And if someone comes up with something out of left field,
like I want to join a country club because I
want to play golf, well I don't think so if
the money isn't there because it doesn't line up with
what we've talked about, kind of that we're on the
same page with. So I think that's one thing that
you can do. Investment risk, Are we on the same page?
This is a tough one. As you know my ex
husband and I, he didn't have a ton of risk tolerance.
(32:58):
He was super conservative. I'm not, you know, I'm like, gosh,
I'm in my forties. I've got plenty of time to save.
But it is it happens quite often where not everyone's
on the same page.
Speaker 2 (33:09):
Yeah, And when I meet with people for the first time,
it's interesting, you know, going through a risk tolerance you know,
exercise and a lot of times you'll you'll see surprise
on each each spouse's face when they are a little
bit unaligned, and it forces couples to start to have
conversations about, you know, how aggressive can we be? What
(33:32):
is our risk tolerance? Is there a sweet spot there?
And you can tell that these conversations haven't been had before.
But I think that's why it's important to go through
exercises like this so it develops discussion and conversation. It's
okay to have differing opinions, but I think having an
assion is healthy and coming to some type of conclusion
(33:54):
is good for everybody.
Speaker 1 (33:56):
I'm going to tell you something that I've seen happen
several times, and that is where I say, Okay, you
have your own floral one k at work, and you
have your own floral one k at work. If you
want to be conservative, you be a little more conservative
in yours. And if your spouse tolerates more risk, let
them take on more risk. And the funny thing is
it ends up sort of evening itself out, not only
just because of what they're invested in, but also over time,
(34:19):
as they're communicating. In times that markets are up, the
one that's more conservative is like, you're starting to amass
more money in your account than I am. On the
flip side, when the markets are down, the one who
is more risky is looking at the other one. So
they tend to kind of come to the middle over time.
If they're talking about those things. Another good thing to
figure out is are we keeping good financial records? Right
(34:41):
if something were to happen to one of the other ones,
do we know where everything is? Are we keeping good records?
That's all incredibly important. And I also just think both
of you understanding what the plan is so that if
one of you is incapacitated, the other one can just
jump in and not skip a beat.
Speaker 2 (34:58):
Yeah, it's important to both have some exposure and participation
in financial matters, particularly within your investment portfolio and your
total financial portfolio. I always encourage my clients to come
together as a couple. Usually what you see is there's
one particular spouse that is the driver for most financial decisions,
(35:19):
and they handle most of those conversations. But as you
continue to get older, it's important that the other spouse
is on the same page. So that not only do
they know who to go to talk to, but where
the records are, how the accounts are titled, how they're registered,
what about.
Speaker 3 (35:35):
Our state documents and so on.
Speaker 2 (35:37):
So I know a lot of times that people kind
of divvy up those roles. But as you age, I
think it's important that you get on the same page
and include the other one in those financial decisions.
Speaker 1 (35:47):
Here's the all Worth advice. Consistent communication along with an
understanding of how the other person feels about money, can
go a long way toward achieving financial freedom. Together, it
is a place where you can get carried away and spend,
spend and sped, how to cut back and how to
know whether it's time to cut back. Next, you're listening
to Simply Money presented by all Worth Financial. Here on
(36:07):
fifty five krs the talk station. You're listening to Simply
Money presented by all Worth Financial a Memi Wagner along
with Andy Schaeffer. Costco is so popular it almost has
like a cult like following. And if if you or
someone you know goes there, you may actually have an addiction.
We'll talk about what that looks like. In my family,
(36:28):
we were kind of late adapters, late adopters to a Costco.
We got a membership about a year and a half ago.
I can see how it's really dangerous to go in.
You get certain things that you know that you're saving on,
but then like something pops up in the middle of
that store and it's just cool and you want to
buy it, And I think that's where you can get
(36:49):
into a little bit of trouble. You said you recently
got a Costco membership.
Speaker 2 (36:53):
Yeah, my wife and I got a Costco membership, you know,
but we live kind of out in the country, so
there's really not a lot of Costcos around, but we
use their delivery service for paper goods and things like that.
I've often wanted to go into those stores to kind
of see what it's like. My sister is a Costco enthusiast.
She's you know, even bought tires and trips and things
from from Costco, So I get it. But my wife
(37:16):
and I don't have kids, so we don't really have
a big need for bulk products, and you know, we
want to make sure that we do a good job
of not being wasteful, so we haven't really taken full
effect of everything that Costco has to offer. But I'm
sure we'll probably step in there pretty soon.
Speaker 1 (37:32):
Yeah, all right, Well this is going to sound like
the beginning of a joke. But you know you have
a problem when it comes to Costco if you cannot
resist their limited time offers. Right, It just that sense
of urgency gets you every time. You may not even
need it, but it's not going to be there in
a month, so you should buy it now. Don't buy
that if you don't need it. If you are going
there all the time, even unplanned trips, just to see
(37:54):
what they've got in the store, or maybe your pantry
looks actually like a Costco warehouse itself, and you could
never eat or use all of that stuff before it expires.
It just makes zero sense. And if you're trying to
justify unnecessary purchases, if I would say, this is the
lens that you look at everything, do we need it?
(38:15):
Do we need it?
Speaker 3 (38:15):
If we don't?
Speaker 1 (38:16):
No, I mean I was even telling you golf balls
are actually a good deal at Costco. Well, if you're
gonna buy golf balls anyway, and they're a good deal there,
of course, by them there. If you don't need golf balls,
don't buy the golf balls.
Speaker 2 (38:27):
Well, you always need golf balls, and we have read
the show Birthday's Christmas, whatever, happy to get golf Well, we.
Speaker 1 (38:36):
Will leave the show with that you'll always need golf balls.
Thanks for listening, even listening to Simply Money presented by
Always Financial here in fifty five KRC, the talk station
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