Simply Money

Episode Transcript

Speaker 1 (00:00):
Prepare to make a right the road to the White House,

(00:02):
and you're writing shotgun.

Speaker 2 (00:04):
What do we look forward?

Speaker 3 (00:05):
Do we listen to fifty five krs the talk station
tonight the biggest fears that others have about retirement and
maybe how you can avoid them, regardless of if you're
retiring next year, we're in twenty years.

Speaker 4 (00:28):
You're listening to.

Speaker 3 (00:28):
Simply Money presented by all Worth Financial. I mean me
Wagner along with Steve Ruby, doesn't matter right twenty years
away from retirement, two months away from retirement. Most people
have generally the same fears, and so I think it's
important to talk through what they are so first of all,
they don't catch you off guard.

Speaker 4 (00:46):
And number one on that.

Speaker 3 (00:49):
List always in every bit of research and with every
person that we sit across the table with, is.

Speaker 4 (00:56):
Running out of money in the retirement.

Speaker 2 (00:57):
Yeah.

Speaker 1 (00:57):
One of the main goals of financial planning that I
tell folks that I work with is making sure that
we develop a plan where you can live the lifestyle
that you want to live today, but ensure that you
have the financial freedom that makes sure that your money
is going to last longer than you do. Always with
the expectation that you might be around a lot longer
than you think you will be.

Speaker 3 (01:17):
Talking to an investor last week who is actually an
airline pilot for years and years and years managed the
family's own money, did a really good job. The problem
was when he was about a year out from retirement,
he had all kinds of anxiety about do I have
enough that I do everything that I should? Is there
something that I'm missing? And he ended up coming to

(01:38):
work with us and we had this conversation and he said,
I went from not being able to sleep at night
to knowing I have a team of people helping me
make these decisions. And every time I worry that I'm
going to run out of money someday, I pick up
the phone.

Speaker 2 (01:52):
Right.

Speaker 3 (01:53):
We run the scenarios for him again and he's like,
and I am once again sleeping.

Speaker 4 (01:58):
And I think that's a very common thing.

Speaker 3 (02:00):
There's so much research out there over this that shows
when you get to about the age of sixty, whether
you're retired or not, for most people, the number one
money concern that you have is just outliving your money
and how do you do that and how do you
sleep at night when you're worried about it? Well, you
have a plan in place, and I think one of
the things that I love that we do is we

(02:21):
run some worst case scenarios, you know, and it's like, okay,
you can literally throw anything at this plan and say, okay,
if the market's absolutely tanked for the next fifteen years,
if you got you know, ex return in the market,
if you had to buy a brand new house, whatever
it is. If you can do and your plan withstands
those things, you should probably be able to sleep it.

Speaker 1 (02:42):
I have a lot of fun with those conversations. Yeah,
stress testing the plan, trying to find a way to
blow it up, that's what I call it, because you know,
I'll throw people a couple more years of life in
the plan. I'll reduce returns for like you said, ten
or fifteen years. I'll change let's say that all of
a sudden, life throws at your curveball and now you're

(03:02):
going to be spending x more dollars each for the
rest of your life. So that there's ways that we
can stress test a financial plan when we have one
built that ensures your money will last longer than you do,
because that is the number one concern of many, I
would say most retirees and.

Speaker 4 (03:20):
For those two are visual people.

Speaker 3 (03:22):
The good thing about this plan is, first of all,
it's right in front of you, but there's a percentage
chance of your plan holding up that comes up every
time we change one of those variables.

Speaker 4 (03:32):
So you can be sitting in the room with us, right,
what about this? What about that?

Speaker 3 (03:35):
And we will come up with some terrible scenarios too.
And if you're looking at this plan and there's a
ninety percent chance and a ninety two percent chance and
a ninety five percent chance and it's going to be okay,
I think you should probably walk over away from that
conversation feeling pretty good.

Speaker 2 (03:51):
Yeah.

Speaker 1 (03:51):
And when you're working with a fiduciary financial planner, there's
there's different financial planning software that we use in the industry.
So what you're talking about here is the probability of
success that your money will last longer than you do.
It's running simulations against certain scenarios, and like I said,
I get a lot of fun in that because if
we can't blow the plan up, then you should sleep

(04:12):
at night.

Speaker 3 (04:12):
Quite Yes, you're listening to Simply Money presented by all
Worth Financial.

Speaker 4 (04:16):
I mean you Wagner along with Steve Ruby.

Speaker 3 (04:17):
As we talk about some of the largest concerns that
we see people having when it gets close to retirement.

Speaker 4 (04:23):
If this is you, or maybe you haven't.

Speaker 3 (04:25):
Thought about these yet, there's some proactive steps we would
say you can take right now to make sure this
is something you don't have to worry about. And of
course the number one thing on that list is fear
of running out of money. But the next thing is
navigating health insurance. And this is especially if you are
planning on retiring before the age of sixty five.

Speaker 1 (04:44):
Yeah, most of us get our health insurance through our employment,
so what employment ends, we need to think about transitioning
to some other form of healthcare when you retire prior
to reaching age sixty five, which is when we're eligible
for Medicare. There's opportunities to close that gap, either by
going to the exchange having COBRA, but you need to
take into consideration that COBRA is oftentimes five times the

(05:09):
premium that you're paying currently.

Speaker 3 (05:11):
I'm going to tell you right now you are probably
very spoiled by your work benefits, including that health insurance.
Most people, on average pay ten percent of what your
employer is paying to carry that coverage for you. You
no longer have your employer picking up that large part
of the tab.

Speaker 4 (05:30):
Suddenly it's all in your lap.

Speaker 3 (05:31):
It's eye opening for a lot of people, and for
so many that's kind of the biggest obstacle to retiring
early is do I have a plan for health insurance
that can cover me through Cobra can last up to
eighteen months after you separate from your current employer, But
one hundred percent of the tab is on you.

Speaker 4 (05:49):
Is it something that you can afford?

Speaker 3 (05:51):
And if you want to retire at sixty one or
sixty two, it's still.

Speaker 4 (05:56):
Not enough time to get you through to that medic.

Speaker 1 (05:57):
Carry Now, I want to make sure that we're not
gearing people away from attempting to retire early age.

Speaker 4 (06:03):
What you need to think thrill?

Speaker 1 (06:04):
Yeah, building a financial plan will shine light and give
you expectations, I should say, of what these expenses will
look like for you. Because there are folks that I
work with that they're so scared of transitioning away from
a constant paycheck and the medical coverage that they get
through their employer, that I show them on paper that
you can retire five years ago and your money will

(06:27):
last longer than you you ever could because if you
lived to one hundred and ten, it's still going to
be there. And people are sometimes so petrified to pull
the trigger in retirement because of the transition to a
different type of insurance.

Speaker 3 (06:39):
It's not only though, the fact that when you you
have to have a plan up until the age of
sixty five, but also I think there's many people who
get to the Medicare age and think, well, this covers
I've been paying it to this program forever.

Speaker 4 (06:51):
This covers one hundred percent.

Speaker 3 (06:55):
Majorly wrong, and that can be majorly eye opening for
a lot of people. Medicare can cost a lot more
to get kind of comprehensive coverage like you're used to.
I know people who've been even in our profession for years,
and when they're retiring themselves and actually looking at their
numbers in front of them, it's like, oh, it's a
lot more than I had really expected to pay.

Speaker 1 (07:15):
Yeah, a fiduciary financial planner is going to help you
navigate making that transition to Medicare because there's part A,
Part B.

Speaker 5 (07:23):
Yeah, what are they all?

Speaker 1 (07:25):
Your Part A is your hospital coverage, Your Part B
is your medical coverage. There's meticap insurance, there's pharmacy coverage.
So it's making sure that you have a plan laid
out in front of you that's going to set expectations
about how much you're spending on these insurance, on the
cost of insurance, and how you're going to supplement it
to make it more in line with what you are

(07:46):
used to as far as what we receive from our employers,
because if you're not supplementing Medicare, it's probably not going
to be the same standard that you've grown used to.

Speaker 3 (07:55):
Another major issue, and I know this is going to
be mine, even though I'm probably twenty years away from retiring,
is mentally transitioning from putting money into savings, into those
retirement accounts to then taking it out. You're actually kind
of flipping a switch in your head. You're no longer

(08:15):
accumulating that money. You're starting to.

Speaker 4 (08:17):
Spend it down.

Speaker 3 (08:18):
I know myself that is going to be a tough one,
and it's a tough one for a lot of us.

Speaker 1 (08:23):
Yeah, and there are some legitimate fears tied to generating
a paycheck from your portfolio assets, because it's just that
it's portfolio assets, which means it's invested. And if we
retire and then the markets get kicked in the teeth
and we aren't prepared for that by having different buckets
of money to pull from to buy against time, which

(08:47):
really that's what the emergency fund is. When you transition
to retirement, you're buying you're buying time against needing to
take money out of a portfolio that just got rocked.
So that's a legitimate concern if you haven't created different
buckets to pull from in retirement, such as your emergency fund,
roth pre tax after tax, brokerage accounts.

Speaker 3 (09:07):
The more options you give yourself, I think, the more
flexibility you.

Speaker 4 (09:10):
Have in retirement.

Speaker 3 (09:11):
And then a lot of the considerations when it comes
to transitioning from working to being retired don't necessarily have
to be financial. They don't have anything to do with money.
One of the big ones is what are you going
to do with your time?

Speaker 2 (09:23):
Right?

Speaker 4 (09:23):
Battling boredom?

Speaker 3 (09:25):
Was just talking to someone the other day and he
was talking about how difficult it was for him. Initially,
he had a big job, he had lots of responsibilities,
he had a big team that reported him, lots of meetings,
and he went from that to like kind of drumming
his fingers every day at the kitchen table, like, what
am I supposed to do? He took up a really
interesting sort of hobby painting, and he paints rocks really yes,

(09:48):
actually goes out and hikes and searches for certain kinds
of rocks.

Speaker 1 (09:52):
There's a really good rock right there. I could get that.

Speaker 4 (09:54):
And then he goes home to his basement and paints
the rocks. And he's like, this sounds like the weirdest
thing in the world. I understand, but he's.

Speaker 3 (10:00):
Like, I find a lot of fulfillment from doing this.
It's nothing I did when I was in my working years.
I would have made fun of myself my working years
if this was what I thought.

Speaker 4 (10:09):
I would do.

Speaker 3 (10:10):
But he's like, I actually really enjoy it. It's like,
I'm never going to do anything with your strong because
I'm never going to sell them.

Speaker 1 (10:15):
But he's like, he could do it at the Etsy
store and get some hobby income out of it.

Speaker 3 (10:20):
Maybe that's a fantastic idea, but the point is you
never know what you're going to take to but you've
got to try things and you've got to figure it out.
And I think for people who have a plan kind
of before it makes the transition a little bit easier
from oh my gosh, day one, I've got all these hours,
no meetings, no commute.

Speaker 4 (10:38):
What am I going to do with my Yeah, you
said it yourself.

Speaker 1 (10:40):
It can be scary if you're use If a big
part of your identity is your working life, If you
carry a lot of weight in your job and it's
keeping you occupied throughout the week and sometimes nights and weekends,
and you no longer have that, you need to have
a plan when you make that transition into retirement. It's
very important to have it. And you don't just want
to say I'm going to golf more. That's not an

(11:01):
actual agenda. It's more like, you know, I'm gonna golf
twice a week. I'm going to volunteerin this league, ye yeah,
for ten hours a week. I'm going to tutor students
in my grandchild's school. I'm gonna go get coffee with
friends three mornings a week. You know, it's actually having
some kind of an agenda, some kind of structure that

(11:22):
makes sure that, yeah, that we don't get complacent, get
bored and just kind of sit around.

Speaker 4 (11:28):
That's not fun.

Speaker 3 (11:29):
It's not only though, having a plan with your time.
It's also having a plan with your spouse. And I
think this takes lots of conversations. I remember several years ago.

Speaker 4 (11:38):
I had a neighbor where the husband had.

Speaker 3 (11:40):
Retired for several several years, but the wife actually retired.

Speaker 4 (11:45):
And I'm not lying.

Speaker 3 (11:47):
It was two or three weeks into that retirement that
she sent me a text and she said, is all
worth hiring?

Speaker 4 (11:51):
And I was like, what do you know someone who's
looking for a job. I can't. I cannot be here
with him all day every day. I love him, but
I will kill him.

Speaker 3 (11:59):
And she said, I I've got to come back at
least part time. And I've thought, oh, for some people,
it's a much tougher dynamic when you're both home looking
at each other all day every day. So what is
the conversation. What are both of our schedules going to
look like? What are we going to do together.

Speaker 4 (12:14):
And what are we going to do separately? All of
that has to be part of the conversation.

Speaker 1 (12:18):
Yeah, just like a lot of other financial topics, it's
just communication. Yeah, it's setting expectations with your spouse as
you make that transition into retirement, to make sure that
you're not wrangling each other's next.

Speaker 3 (12:28):
Yeah, so I think there's a lot of financial considerations,
but a lot of conversations and planning that go into this. Right,
you get it all right, and the transition is going
to be much easier for you.

Speaker 4 (12:38):
Here's the all Worth advice.

Speaker 3 (12:40):
Knowing what you could face and retirement can be an
important kind of first step toward that smooth transition to
a world after work. Coming up next, we've got the
two largest retirement expenses you need to make sure you're
planning for. Right now, you're listening to Simply Money, presented
by all Worth Financial here in fifty five KRC, the
talk station.

Speaker 5 (13:01):
From the U treed Fear and Pride where economics equilibrium.
Would I buy this if no one ever saw it?

Speaker 4 (13:08):
That's your test on the pride.

Speaker 5 (13:10):
Button right and financial finesse.

Speaker 4 (13:12):
If your only.

Speaker 2 (13:13):
Button to push is money, that's great.

Speaker 3 (13:15):
Our music to his ears When you get desperate the
Ramsey Show.

Speaker 2 (13:19):
Just about twenty seconds later, after I get desperate, I
get stupid, and right after I get stupid, I get broken.

Speaker 5 (13:25):
Desperate leads to stupid leads to break. Tonight at seven
on fifty five KARC, the talk station. All Worth Financial,
a registered investment advisory firm. Any ideas presented during this
program are not intended to provide specific financial advice. You
should consult your own financial advisor, tax consultant, or a
state planning attorney to conduct your own due diligence.

Speaker 4 (13:52):
If you're listening to.

Speaker 3 (13:53):
Simply Money presented by all Worth Financial, I Meany Wagner
along with Steve Ruby. If you can't listen to our
show every night, you do not I have to miss
a thing that we talk about. We've got a daily
podcast for you, so just search Simply Money. It's right
there on the iHeart app or wherever you turn to
to get your podcasts.

Speaker 4 (14:09):
Coming up at six forty three from questions.

Speaker 3 (14:12):
About five twenty nine plans to raw for owen Kys,
we are asking the advisor that's coming up, and we
talk a lot about retirement. We were just discussing all
the things that you kind of need to be thinking about.
But there's two major expenses that if you have a
plan for these, that transition is going to be so
much easier. And I would say, regardless of how old,

(14:33):
if you're planning for them now, you're going to be
in good shape.

Speaker 4 (14:36):
Number one on that list.

Speaker 1 (14:37):
Housing, Yeah, when your home is fully paid off, that asset,
it's totally under control. You can manage your investments, but
the direction of the stock market is not in your hands.
Paying off your home gives you options in retirement, but
we do need to make sure that we are keeping
it in good shape throughout the years. Regular maintenance upkeep
make it not only a better place to live, but

(14:58):
obviously something that you can sell easy if you decide
to relocate.

Speaker 4 (15:02):
Regardless of what age you are, think about your bills.

Speaker 3 (15:05):
Now, for most of us, the largest chunk of change
that we shell out every month is for our mortgage.

Speaker 4 (15:11):
If you have a plan.

Speaker 3 (15:13):
To get that paid off by the time you retire,
talk about peace of mind. Money not going out is
the same as money coming in. You're giving yourself a
raise of whatever that mortgage payment is every month. Now,
if you are close to retirement and you have recently
bought a house or built a house, it might make.

Speaker 4 (15:31):
Sense to do the opposite.

Speaker 3 (15:32):
It might make sense to stretch out those payments over
a longer amount of time. But if there's any way
to kind of plan ahead, I would say best case
scenario for most of us is to have that mortgage
paid off in retirement. And then to your point, Steve, though,
what you have to also be planning for is the
maintenance over the course of retiring. And one of the
things I remember the first financial plan that I ever

(15:52):
did years ago, was making sure that there was money
built into it for a new roof in retail, and
I remember thinking, like, gosh, you know, that's interesting, not
something that you think about necessarily when you're in your
twenties or thirties, but it's an expensive bill to have
to pay.

Speaker 1 (16:09):
Well, you better believe that. In the financial plans that
I build with the folks that I work with, the
it's huge. There's most of the time I'm going to
encourage some kind of a goal tied to a major
maintenance upkeep. Whether it's roof, whether it's windows, maybe it's
just painting or remodeling. It's a goal that I put
into a financial plan to make sure that that is

(16:30):
money that's accounted for leaving the plan, because the reality
of the situation is you're going to be putting money
into your home even if it's paid off in retirement,
you know.

Speaker 4 (16:40):
And I also have to hand it to my parents.

Speaker 3 (16:42):
I was in college when they decided to build a
new house and they decided to build a ranch, and
I was like, why are you building a ranch? We've
always had kind of two story floor plans. They weren't old,
you know, they were in their late forties.

Speaker 1 (16:53):
At the time, and they were planning on being old.

Speaker 3 (16:55):
Of a bet, you were planning on getting old in
that house, and it has worked out so well to
have that one story with that they're on. And then
I think about a family member of mine who has
a medical situation where she has to be in a wheelchair,
so she still lives in a two story home, but
she hasn't seen me upstairs in the years.

Speaker 4 (17:15):
It's just wasted space.

Speaker 3 (17:16):
So kind of planning ahead for what you think your
sort of housing needs will be and retirement, even if
you're fifteen twenty years out, can make a lot of sense,
can really pay off.

Speaker 1 (17:25):
I ask those questions, Yeah, I really do, because if
you're planning and living in the same home for the
rest of your life and it's a two story home
but there's no bedroom on the first floor, then what
are you going to do trying to navigate those stairs.
It's a real topic of conversation that people need to
plan for now. Other things to consider, And we've talked
about this on the show before. What types of home

(17:47):
improvements are maybe better than others. Catch, Yeah, that's exactly
what I'm getting at here, your kitchen improvement improvement. It's
not often that you're able to recoup what you actually
put in to that if you make us if you
sell the property, it's like maybe fifty percent you can
get back. So if you know that you're going to
be sticking around for a long time and you want to,

(18:08):
you know, have the kitchen of your dreams, more power
to you. But if you're going to be selling in
the next five years, maybe reconsider putting a ton of
money into something that may not be someone else's favorite.

Speaker 3 (18:19):
And something else to think about is I love Cincinnati.
I am born and raised here, super passionate about this community.
I hate winters here, I absolutely hate.

Speaker 1 (18:30):
Them, and so mild compared to Cleveland, where I'm from.

Speaker 4 (18:33):
It's true. I guess it's all the perspective, right.

Speaker 3 (18:36):
So I always dream about having a house somewhere south
of here someday, And you know, my husband and I
always I get I get Zillo emails all the time
looking at certain areas and then we were talking recently
about the fact that but we would need to look
into what it would cost to ensure like hurricane insurance.
If we were looking at it made price us out
of being able to make a move like that. So

(18:57):
being really kind of logical about, Okay, if I'm going
to make a mover, have a second house, a vacation
home in retirement, have we thought through every part of that.
That's also a big part of this equation. And then
medical expenses are a huge one.

Speaker 1 (19:11):
Yeah, Medical is this is the other major expense that
you're going to have in retirement, especially as we get older,
things happen, we need to shell out more money to
pay for those things. And the other unfortunate reality here
is that inflation hits healthcare expenses more quickly than anything else.

Speaker 3 (19:32):
Absolutely, And I think the latest numbers that I've seen
out of Fidelity or the average couple retiring today would
spend I think it's between two hundred and fifty and
three hundred thousand dollars.

Speaker 4 (19:42):
Over the course of your retirement on healthcare expense average.

Speaker 1 (19:46):
Too, there are outliers that you can certainly fall into
that category. So making sure that you are taking care
of yourself I mean this is something that you've heard
from friends, families, friends, family, doctors your whole life. You know,
if you're getting cataracts, where sunglasses, pre diabetic, manage your
sugar intake. Yeah, get regular checkups while you're working to

(20:06):
stay healthy.

Speaker 3 (20:08):
And I am a huge proponent of a health savings account, right, So,
if you have a high deductible health care plan, this
can be a great retirement planning tool when it comes
to your medical expenses. If you have a large enough
emergency fund, you pay for your medical expenses now. You
make sure that money that HSA is invested and then
it has time to grow. So when you get to
the point of these astronomical medical bills and retirement, you

(20:30):
have a place to pull from that HSA and you
take the money out for eligible medical expenses. You're never
taxed on that money. There's nothing else like it. It's
a great option for retirement planning when it comes to
those expenses.

Speaker 4 (20:43):
Here's the all Worth advice.

Speaker 3 (20:44):
One of the most important parts of retirement planning involves
investing in yourself.

Speaker 4 (20:49):
Coming up next. When you use credit cards to pay
for large purchases.

Speaker 3 (20:53):
And the warning that goes along with it, you're listening
to Simply Money present of by all Worth Financial here
on fifty five KRC the station in a year twenty
twenty four, in a day, in the next twenty four,
in an instant right.

Speaker 1 (21:06):
Now now is the time constant cover.

Speaker 2 (21:08):
At twenty four to seven three sixty five round mclock
in twenty twenty four year round this twenty four fifty
five krs.

Speaker 4 (21:16):
The talk stage took.

Speaker 3 (21:18):
This is fifty five KARC an iHeartRadio station listening to
simply let me some of my all Worths Financial. I'mmi
Wagner along with Dee Ruby Will. We talk a lot
about credit cards and being smart and using them as
a tool. So if you're getting ready to make a
major purchase, is it smart to put it on your

(21:40):
credit card? Or is there somewhere else you should turn?
Joining us night is our credit expert Brit Scares. But
I think this is something that most of us face.
When does it make sense to use those cards and win?

Speaker 4 (21:50):
Doesn't it?

Speaker 3 (21:51):
Well?

Speaker 2 (21:51):
I mean, you know, certainly these could be great tools.
You have to have a lot of respect for these
because they can also get you in a lot of trouble.
So as I'm talking about this, I don't want everybody,
you know, if you're kind of struggling living paycheck to paycheck,
we don't even need to be talking about getting into
you know, credit card debt. Okay. So, but if you're

(22:13):
someone who you know could certainly pay off whatever you
would charge on a credit card, and you want to
use the credit card as a tool to maybe you know,
get some of their perks, but you would have the
ability to stroke out a check and pay it off
at any time if you know, if need be. That's
when you kind of consider this sort of thing. I

(22:33):
know a lot of people like to utilize you know,
cards for you know, Let's say you have a big
purchase that you know you're going to be making, and
you happen to have a credit card that gives you,
you know, five percent cash back or one percent cash back,
or that gives you miles or something of that nature,
and you know that, hey, I'm just going to put
it on this thing, and I'm going to pay it
off in sixty days, you know, just take advantage of

(22:56):
their free perks. That is not a necessarily a bad
use of one of these credit cards. But again I
caution everyone about you know, getting into the debt. One
of the reasons why credit card companies offer these types
of perks is they hope that you kind of get

(23:17):
a balance on there exactly, and then maybe you're not
able to pay it off. And keep in mind the
interest rates on most credit cards are close to twenty percent,
if not over twenty percent.

Speaker 1 (23:27):
Yeah, when you use how they properly. When used properly,
a credit card can come with massive benefits. So we're
not against using credit cards, but being cautious, like you said,
I think is key here. Talk about some of the
risks for those that maybe haven't been cautious.

Speaker 2 (23:43):
Well, for one thing, let's let's say you get one
of these great officers offers that say zero percent for
you know, eighteen months or twelve months, and you say, hey,
you know, I'm gonna I'm about to buy four thousand
dollars worth of airline tickets, you know. So if I
could just put that on a card at zero percent
and then pay that off throughout the year, you know,
at zero percent interests, you know, and you know, I

(24:06):
can just kind of divide up the months and say, Okay,
I'm going to pay it off the month before the
zero percent is up. But Here's what a lot of
people don't realize. If you miss that payoff time, a
lot of times they go back and charge you interest
from day one.

Speaker 1 (24:20):
That can be a monster unexpected expense.

Speaker 2 (24:24):
Yeah. I've seen people do the zero percent offers at
a lot of the appliance stores and places like that,
that they missed the payoff by a day and all
of a sudden, instead of them paying it off and full,
they now owe another five or six hundred dollars from
the back interest.

Speaker 4 (24:40):
Great, which makes no sense.

Speaker 3 (24:41):
I think A great way to look at this is, Okay,
if you're going to make a major purchase. You mentioned,
you know, four thousand dollars in airline tickets, or you're
buying a huge appliance, you have that money already set
aside in a fund, and you're using the credit card
to take advantage of the perks of the credit card,
one of them being rewardds and then of course you
pay it off that month. But another is in the

(25:04):
fine print of a lot of credit cards has some
travel insurance in there. It has some extended warranties on
things like appliances, so you don't have to spend those
extra dollars you know. So what are your thoughts on
taking advantage of those kinds of perks as well?

Speaker 2 (25:21):
I think those are those are great opportunities, you know,
taking you know, the benefits of some sort of like
maybe if they throw in travel insurance like you said,
or sometimes they'll even throw in if you pay with
this particular card, you'll get free checked bags, like you said,
purchase protection, things, extended warranty, stuff that you normally wouldn't
I wouldn't normally recommend that people you know, purchase, but

(25:43):
if it's covered on the card, just by simply making
the purchase with the card, why not have that extra
little benefit. And if you're able to pay it off,
you know, the next month or without paying interest, then
you're gaming the system. And that's when it makes sense.
Like you said, a lot of the airline miles and

(26:03):
that sort of thing also can raped up pretty quickly
too if you're making a large purchase like that.

Speaker 1 (26:09):
So you're advocating for if you have money on the
side set aside ready for a big purchase, rather than
using that money funnel that expense through your credit card
to get the added benefits that exist and then pay
it off before there's any interest that you're actually owing.

Speaker 2 (26:25):
That's exactly right. And as we said, there's a bunch
of different rewards type cards out there that you can
certainly take advantage of. A lot of them will pay
one percent to five percent, you know, cash back for
everything that you purchase, and as long as you pay
it right off without interest, you know you're basically getting
free money that way. But I do caution again, if

(26:46):
you're someone who's living paycheck to paycheck and there's a
chance that you might end up revolving that balance, not
a good idea.

Speaker 3 (26:53):
I also like being really intentional about what kind of
rewards card.

Speaker 1 (26:56):
Do you use.

Speaker 4 (26:57):
I mean, you just mentioned there's options.

Speaker 3 (26:59):
I think about Brian James, one of our advisors, I
think one of the most brilliant money things I've ever
heard was he said he found a rewards card that
put a percentage into a five twenty nine. They opened
that credit card when they're when they're oldest, right before
she was born, and ended up accruing over the course

(27:20):
of all of those years of them growing up, twenty
plus thousand dollars because every credit card purchase went on
that credit card was paid off every month, and then
they had you know, a year's tuition for college already
paid for, just with stuff they had already bought. So
I think it's really smart to look at what options
are out there. Again, you have to pay the cards

(27:40):
off every month or the rewards are out the window.
But I think at different ages and stages of your life,
different kinds of rewards cards can really make sense.

Speaker 2 (27:50):
I would agree. And you know, my first advice to
folks is to always have you know, six months of
an emergency fund, six months worth of expenses set aside,
you know, having the money you know somewhere, and utilize
these free perks you know, from these credit card companies.
I mean, they're going to make plenty of money on
the people that aren't going to pay it off every month.

(28:12):
But if you have the discipline and you're financially savvy
enough to utilize these, there's certainly some benefit there for you. Now,
I will tell you that I I as I talk
to you know, people that are very financially successful, you know,
very few of them ever tell me that they owe
it all, you know, all their success to their you know,
to their rewards card. So use these, you know, sparingly.

(28:36):
Don't don't don't think that this is something that you
should that you're necessarily missing out on. But if you're
a financially savvy person and you have one of these
cards that do pay you some of these perks, and
you know, if you're going to spend the money anyway,
and you're going to just put it right on that
card and then pay it right off, hey why not
take advantage?

Speaker 1 (28:56):
So what are the most common, large, perfect purchases that
you would recommend Folks you know use credit cards.

Speaker 2 (29:00):
For well, I personally don't like to use debit cards online,
so when I make online purchases specifically, we were just
talking about airline tickets. So when I buy airline tickets,
We're planning a trip out West this summer, and I'm
sure that'll be a three or four thousand dollars expense,
I'll put that on a card that you know, provide

(29:22):
some benefit, you know, in protections online that you know,
if for some reason there were to be some sort
of a hack or something, it's it's being put on
my credit card and not coming out of my check account.
So I certainly would would recommend using credit cards for
online purchases as long as you're able to pay them
right off immediately.

Speaker 3 (29:42):
It's funny that you mentioned that, Brittany, because I will
have people come up to me and say, you would
be so proud of me. We paid off all of
our credit cards, then we cut them all up, and
I'm like, oh, you know, I think the best way
to use a credit card as a tool you paid
off every month. But for that kind of protection that
you're talking about of using a debit card versus a
credit card, you've got much more protection with that credit card.

Speaker 4 (30:05):
Can you talk about that quickly?

Speaker 2 (30:08):
Yeah? Absolutely. I mean, you know I've had that personally
happened to me, where you know there are protections for
your debit card, but you know, if you don't report
that quick enough, you could be on the hook. We're
on a credit card, you know, it's a simple dispute,
and you know, you fill out the forms and you
know they end up doing their investigation and it you know,
and it gets taken off of your account. But if

(30:29):
it's coming out of your checking account, well it could
be weeks before that gets replaced back into your checking account.

Speaker 3 (30:36):
So it's just so much easier using that credit card. Yes,
and using those additional protections great advice as always from
brit Scars, our credit expert. You're listening to Simply Money,
presented by all Worth Financial here on fifty five KRC
the Talk station.

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Speaker 3 (31:41):
You're listening to Simply Money. If you then am I
all worths Financial?

Speaker 4 (31:44):
I mean you Wagner along with Steve Ruby, straight ahead, how.

Speaker 3 (31:47):
To make something that's extremely important but for most of
us not so fun.

Speaker 4 (31:51):
We're talking about the B word budgeting. Maybe you can
make it a little fun. We'll tell you how.

Speaker 3 (31:57):
And if you have a financial question you want us
to answer, there's a button you can click on where
you're listening to the show. It's right there on the
iHeart app recorde your question and it's coming straight to us.
Our first question tonight comes from Andrea, who lives in
Liberty Township. Hey, guys, love your show. We love to
hear that, Thanks Andrea. Our kids are four and six.
We're trying to see for their college expenses. So should

(32:18):
we use a five to twenty nine plan or a
roth IRA?

Speaker 1 (32:22):
I love this question more now than ever because there's
been some recent changes with Secure Act two point zero
that open the door up for some unique opportunities in
the future. Now, with that said, should we use a
five twenty nine or roth ira? I am an advocate
for the five twenty nine. If you live in Ohio
and you're making a contribution to the five twenty nine,
then there's a tax right off of uptat up to

(32:42):
four thousand dollars per year on your state taxes. So
when you contribute to a roth ira, that is not
a deductible contribution to any means whatsoever. However, when you're
investing in either of these vehicles tax free games. Now,
the exciting change with Secure Act two point zero is
that if the dollars are never spent in the five

(33:04):
twenty nine there's some stipulations has to have been in
the account for ten or fifteen years. You can only
transition up to thirty five thousand dollars over the life
of the individual. But eventually you're able to take the
five twenty nine dollars once the child has earned income
and start sliding them into a roth Ira in their
own name.

Speaker 4 (33:20):
It becaves like a de facto right roth Ira. Yeah.

Speaker 3 (33:23):
I like this question because I like that you're thinking about,
you know, how to pay.

Speaker 4 (33:27):
For those or help pay for those college expenses.

Speaker 3 (33:30):
I'm a huge fan of the five twenty nine plan,
and I think sometimes on the show right we kind
of laugh about some changes that come out of Washington
that don't make a lot of sense. But over the
past several years, I actually give kudos to Washington and
the fact that Congress has made some changes to the
five to twenty nine plan giving us more and more flexibility.
One of those things is if you are paying for

(33:50):
high school for your kids. You can pull money out
of that five to twenty nine to help cover those expenses.
Now you think about it, if you're starting a five
to twenty nine when your kids are born, you only
have eighteen years right for that money to grow to
pay for college.

Speaker 4 (34:03):
If you're taking money out of it before then to pay.

Speaker 3 (34:05):
For private education, it doesn't have the time to grow
in compounds, so that may not make as much sense.

Speaker 4 (34:11):
But there's lots of flexibility. Our kids have them.

Speaker 3 (34:14):
We've got one that's already drawing from her five to
twenty nine. It covers tuition, room and board. You can
pull money out of it even for laptops and technology
and things like that that you're going to need for college.

Speaker 4 (34:24):
Lots of flexibility for these accounts.

Speaker 2 (34:26):
Yea.

Speaker 3 (34:27):
And if you have the most brilliant child in the world,
and I know we all do, and they get a
full ride to college, yes, Now that money can either
be transitioned into retirement funds for them or it can
be transferred into someone else's name.

Speaker 1 (34:39):
Yeah, that didn't go away.

Speaker 3 (34:40):
That's still exacting, y, So that is still an option
for you. So just think lots of flexibility with a
five to twenty nine. It's a great thing. Next question
coming from Peter who lives in Florence. Thanks for taking
my question. How do I choose the best investments for my.

Speaker 4 (34:54):
Four O one K?

Speaker 3 (34:55):
So?

Speaker 1 (34:55):
A four O one K is an absolutely fantastic vehicle
for saving for retirement, but unfortunately, when we have one,
the investments are oftentimes limited to what your employer gives
you to pick and choose from. Those investments can come
with very low costs oftentimes, you know, I've seen people
that start at four to one K. They look at
the past returns and they say this one had the best,
so they pick that. That's the way not to do it,

(35:17):
just to be clear, because that's not going to be
a diversified portfolio most of the time. There are I
don't like to advocate too much for him. Steve Sprovac
used to call them good enough funds. It was the
target day retirement funds of life cycle fund If you're
not going to be managing your your portfolio to any capacity,
if you're not going to be picking and choosing and

(35:37):
meeting different subasset classes and rebalancing, then maybe that type
of investment is good for you. It's kind of like
taking a bus to retirement. You put it into you
put all of your balance into one target date retirement fund,
and it's managed to get safer the older you get.

Speaker 3 (35:52):
I want to give you some perspective. I think on
the flour one K because this drives me crazy. Most
of us spend more time planning our in vacation, our
trip to the beach then.

Speaker 4 (36:02):
We do thinking about our four to one K.

Speaker 3 (36:04):
Your retirement is on you, So I think getting this
right is incredibly important. Target date funds are an option.
They're an option that a lot of people choose. I
do not like them. I think we have we don't
have a one size fits all retirement, and this is
a one size fits all approach to how you're investing
for retiring. Find yourself a fiduciary advisor, or I had

(36:24):
a friend who came to me and their fees for
their four one K. We're a little bit more expensive,
but there was someone that came to the office that
met with them put them in some great, diverse, perfect
kind of funds for them. So sometimes you're paying a
little more, but if you're getting extra help, I think
it can all pay off. Let's get to one more
question tonight from Corey, who lives in Edgewood. My mom

(36:44):
and dad are in their mid sixties. Is it too
late for them to look at buying a long term
care policy?

Speaker 1 (36:50):
It's certainly on the high end as far as what
these expenses are going to look like. It's incredibly expensive
the older you get. Yeah, when you're purchasing long term care,
it's worth sitting down with a fiduciary financial planner to
determine whether or not it's even a need. If I'm
being completely honest, Oftentimes people will self ensure they'll plan
for Medicaid. That's not the ideal situation, but it's worth

(37:11):
sitting down, building a plan and making sure it's even
a need before you pull the trigger on making a
purchase of a policy that's going to have some pretty
high premiums at that point.

Speaker 3 (37:19):
Coming up, if you hate budgeting, we've got some apps
that can change all that. We'll tell you what they
are next. You're listening to Simply Money, presented by all
Worth Financial here in fifty five KRC, the talk.

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Speaker 3 (38:19):
You're listening to simply money, because I'm by all worth financial,
I mean me Wagner a low whisky Ruby. I would
venture to say most people aren't excited about budgeting. It's
like the dreaded B word that goes along with money.
Not the most fun thing. But there are some apps
out there that can either make it easier or maybe
at least a little more fun, a little more enjoyable

(38:39):
to budget. So we've done our research for you and
kind of sifted through and.

Speaker 4 (38:43):
We would say here's some of the best of the
best that we like.

Speaker 3 (38:46):
If you try one of these and it's not working
for you, I would say try another one and see
if you can find a better fit.

Speaker 1 (38:52):
I must feel like I'm punishing folks I work with
when I hand them a little budget booklet. The thing
is so unappeal Yes, I know that. I'm glad that
there's a niche where people are stepping up and that
they're creating technology and apps that we can use to
make it a little more entertaining. First one is called LUCY.
It stands for Let's Use Compound Interests. It's actually set

(39:14):
up kind of like a space travel game. It takes
you through setting and achieving savings goals and paying down debt.
There's courses that you can take to learn more about
managing your money, and it's free.

Speaker 4 (39:26):
I think this is a kind of know yourself situation.

Speaker 2 (39:28):
Right.

Speaker 3 (39:28):
If you like kind of playing games on your phone,
this can be a great one that can lead to
some better money habits.

Speaker 4 (39:36):
And if you also like kind of a pat on.

Speaker 3 (39:38):
The back, right, it kind of shows you, you know,
sort of as you.

Speaker 4 (39:41):
Hit each goal, some progress there. That can be a
great thing.

Speaker 3 (39:45):
Cleo is an interesting app and this is I think
for those who have a kind of different sense of humor.
It actually uses artificial intelligence to either kind of give
you a hype, you know, send you messages Okay, you
saw you, you know, put some more money into your
savings account, good for you, or hey, loser, you spent

(40:06):
one hundred bucks last week on eating out?

Speaker 4 (40:09):
Was that the smartest decision that you could make.

Speaker 1 (40:11):
This app will actually roast you if you make that
financial decisions, which I live.

Speaker 4 (40:16):
With four teenagers.

Speaker 3 (40:16):
I don't need anyone roasting me anymore than I have
on a daily basis. But hey, if this sounds good
to you, Cleo is definitely an option.

Speaker 1 (40:26):
Yeah, if you have younger children, busy kids. It's an
app specifically for children. It helps It helps people save
a little bit of money by doing the chores that
they do, and tries to make it entertaining. So it's
an option for children.

Speaker 3 (40:38):
I'd like it in the sense too that it gets
kids thinking about budgeting, not that every dime that comes
in from their chores needs to be spent immediately on
legos or whatever it is, but introducing them to hey,
maybe yes, spend a little bit of this, but also
save a little bit or donate a little bit to
church or a cause is near and dear to your heart.

Speaker 4 (40:58):
So I like that it takes you through all those things.
One thing that.

Speaker 3 (41:01):
Drives me absolutely crazy in this day and age is
how many subscription services we all have.

Speaker 4 (41:07):
And there's another app out there called Rocket Money, not.

Speaker 3 (41:10):
Specifically about budgeting, but it helps you manage all of
those subscriptions, and let's face it, if you can keep
track of those, that can be saving money.

Speaker 1 (41:17):
Oh yeah, because it can help you identify which ones
you're not using and you can unsubscribe and save that
cash flow. Zeta that's a budgeting app. It's built specifically
for a family unit, so family members they create combined
budgets and track they're spending together. They can also do
it separately, but it's it's a means to have an
open line of communication, which is a trend. I'm always
talking about the importance of communication when it comes to

(41:40):
your money, So using an app to track it all
together as a family could be beneficial as well.

Speaker 3 (41:44):
Keeping everyone on the same page right, working towards the
same goals makes a lot of sense. Thanks for listening tonight.
You've been listening to simply money because I'm by all
Worth Financial here on fifty five KRC the talk station.

Speaker 5 (41:56):
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Day, next twenty four hours, twenty four hours a day, in.

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An instant right now, moment to moment.

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Now is the time constant coverage everything everywhere, all the time,
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Day, changing by the hour.

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In twenty four hours year round twenty four to seven,
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Four fifty five krs E the talk station get more
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