Simply Money

Episode Transcript

Speaker 1 (00:00):
Yes, tonight, comparing today's stock market volatility to past market volatility.
You're listening to Simply Money, presented by all Worth Financial.
I'm Bob Sponseller along with Steve Ruby, who is in
for Amy Wagner tonight. Well, lately, obviously there's been a

(00:23):
lot of anxiety in the markets, a mix of tariffs,
geopolitical tensions and more, and people are starting to wonder
are we in the midst of a major downturn? I
guess it's a fair question, Steve. But before jumping to conclusions,
let's look back at some of the biggest market declines
in history, what really caused them and does today's environment

(00:48):
even remotely match up with anything we've seen in the past.

Speaker 2 (00:51):
Yeah, it's important to look at history to make sure
that we're learning from history, and you know, comparing some
of these actual past financial crist says to today, I
think is valuable. So let's look at two thousand and eight. First.
You know, that was a little more systemic. You had massive,
massive amounts of leverage, banks were overexposed to subprime mortgages.

(01:12):
Financial products were so complex that a lot of folks
had no idea what they were actually getting into.

Speaker 1 (01:19):
Until Wall Street sold them to sold them to them well.

Speaker 2 (01:22):
And then they were buying them without understanding. I mean
people were selling them. Imagine they've been selling them and
people were buying them that shouldn't have been buying them.
But you know, collapse of Layman Brothers, that was the spark. However,
one could argue that the gasoline had been slowly poured
out for years with some of these other things that
I've mentioned. Layman Brothers was the catalyst for the big collapse.

Speaker 1 (01:46):
And let's be honest, there's nothing in today's market based
on what we know today. I mean, things can and
do change daily. There's nothing in today's market that looks
anything like that kind of systemic financial risk. In the
overall economy, the banking system, it's more regulated now, capital
reserves are stronger, lending is more controlled. We actually ask

(02:10):
people to qualify for a mortgage nowadays.

Speaker 2 (02:13):
That you make four dollars an hour, you can have
a five hundred thousand dollars loan. You know that that's
not happening anymore.

Speaker 1 (02:21):
Yeah, you can make minimum wage and buy a condo
in Florida before it's even built and flip it before
the closing for a profit, right, what.

Speaker 2 (02:29):
An amazing time to be alive. Obviously was not a
good idea, and you know, it all blew up in
our faces. So you know, currently tariffs that they might
shake up earnings, but they're not going to take down
the global financial system like we saw in two thousand
and eight.

Speaker 1 (02:45):
Well, we read these headlines that we see, you know
about a potential loss decade in stocks. I mean, let's
talk about the dot com bust, which really did precipitate
a lost decade in stock market returns. I mean, Steve,
it's easy to look in the rear view mirror, but
it's also easy to look at fundamentals that crash back

(03:06):
in two thousand. That was pure speculation, right, companies with
no revenue, no business model, that just had dot Com
behind their name. It was a disaster.

Speaker 2 (03:17):
Yeah, sky high valuations for companies that weren't actually earning
anything or making anything yet it was just tied to names.
You put dot com after the name of your business
and money was being thrown at you. Pre I po
was a really speculative you know, you bring up a
good point. Today, the fundamentals are certainly different. There's valuations

(03:37):
that are high in places, but the profits are real,
the businesses are sustainable. It's a whole different beast that
we're that we're experiencing today as opposed to the dot
com bust, which was it was just loaded with speculation.

Speaker 1 (03:52):
Well, and let's look at the performance of some of
these AI and tech stocks. I mean, we talk about
this all the time. It had been a pretty good
three year run in tech stocks and AI stocks and things.
Valuations from time to time can get out a little
ahead ahead of their ski, so to speak. And the
market is a wonderful correcting mechanism for valuation, and we're

(04:14):
seeing it right now.

Speaker 2 (04:15):
And it's also an argument why you don't want to
have too much of one stock making up your entire portfolio.
We're not advocating, you know, we're not saying that, you know,
fundamentals are solid, so put all your money in the
Magnificent seven. Absolutely not. What we are saying is that
it is different now than it was in their early
two thousands because these these Magnificent seven, they are well

(04:36):
established companies that have solid fundamentals. But there is still
incredible risk of being over exposed to a single company.
But again, what we are experiencing today is nothing like
the immense speculation that existed before the dot com bust.

Speaker 1 (04:54):
Yeah, these companies have actual, real profits, real sustainable business models.
The question just is at what price do you buy them?
So it is a different environment. Steve walk us through
Black Monday nineteen eighty seven.

Speaker 2 (05:09):
Black Monday, October nineteenth, nineteen eighty seven, to be precise,
this is when the Dow dropped more than twenty two
percent in a single day. Twenty two percent. Now, this
was also different because it was largely technical, so computerized trading,
portfolio insurance strategies. They triggered a cascade in selling all
at once. It wasn't about the economy, what was going

(05:32):
on in the economy. It was triggered by technical factors
that caught people off guard and created that panic selling cascade.

Speaker 1 (05:43):
Well, and that's one thing that I think has only
increased since nineteen eighty seven. It hasn't decreased the amount
of program trading, computerized buying and selling. I mean, we've
seen it as recently as a couple of weeks ago,
where the S and P or Nasdaq hit certain levels
on the upside or the downside, and it triggers a
lot of movement, a lot of volatility, and that can

(06:04):
be unsettling for investors.

Speaker 2 (06:06):
So you heard it here first Black Monday is the
closest to today? Is that what you're saying, Bob.

Speaker 1 (06:12):
I'm just saying that markets can and do move quickly
based on computerized Yeah, you're right. But the point we're
trying to make here fundamentally, there was nothing fundamental that
had to do with nineteen eighty seven. It was all
based on speculation and computerized trading.

Speaker 2 (06:29):
Am I naive to trust some of the technology that
exists today versus that of thirty years ago?

Speaker 1 (06:35):
You should trust all of it?

Speaker 2 (06:36):
Steve? Yeah, I just again, I'm trying to specially TikTok. Sure, Well,
I'm trying to point out in this situation it doesn't
line up. Yeah, you bring up good points, because there
are algo traders out there that that trigger you know,
buys and sells at certain levels based on technical charts.
But you know this was this was all new at

(06:56):
the time.

Speaker 1 (06:57):
Yep, you're listening to simply money presented by all were
financial I'm Bob sponseller along with Steve Ruby, who's in
for Amy Wagner tonight, Steve, let's talk Finally about COVID.
You know, compare the COVID crash of twenty twenty to
what's going on today.

Speaker 2 (07:13):
So COVID is an interesting one because this is this
is fresh and a lot of our memories. So, you know,
we lived through a global pandemic. Markets fell thirty four
percent in thirty three days. You know, that was the
fastest bear market in history. However, it was the fastest
recovery in history.

Speaker 1 (07:31):
And that's thanks to record setting government spending and Federal
Reserve action. And that's where we say all the time,
never underestimate the power of government and the Fed to
intervene to let keep things from getting too far off
the tracks. Right, But we saw an unprecedented amount of

(07:52):
money flowing into the system during COVID.

Speaker 2 (07:55):
I think stimulus checks may have contributed slightly to inflation.
On the flip side, there are consequences to some of that.
But the COVID crash is unique because it was so fast,
it was it came out of left field. Nobody expected
a global pandemic. Obviously, global supply chains were disrupted. That's
going to be a challenge for countries to navigate globally. Yeah,

(08:18):
stimulus checks went out to help, you know, create that
that support. So people continued to spend, which was helpful
and get us to nine percent inflation exactly. Yeah, but
how can we compare today to a global pandemic. I
don't think we can. And that's what we're talking about today.
We're looking at past crashes to see if any of
that is like what we are seeing right now with

(08:40):
tariffs for example.

Speaker 1 (08:42):
Well, and I always say for the most dangerous words
in investing are this time is different. And you know,
the things that caused the market to move down significantly
over a short period of time, they always are different.
But it's also goes in cycles. So let's bring it
back to today. Let's talk about the fundamental economic environment

(09:06):
we live in today based on some of these situations
that we've already covered this morning.

Speaker 2 (09:11):
Well, I think it's clear that there's no collapse in
consumer spending, there's no breakdown in the financial system that exists,
there's not mass layoffs. The FED is actually pivoting towards
rate cuts, not hikes. This is a fantastic sign for
the strength of the economy. So while there might be
a correction which is totally normal, or a rocky few

(09:32):
months while we wait to see how tariffs shake out.
None of what's happening right now resembles any kind of
a lead up to those crashes that we've already talked
about today. You know tariff's political backdrop. Sure there's things
to be spooked about, but again you said it yourself.
We don't want to act on emotion thinking that this
time is different, because that is incredibly risky. The thing

(09:55):
that these crashes that we have talked about today all
have in common is that the markets have returned to
all time highs anyways, So whenever we do have a crash,
the question is does it really matter at the end
of the day. If you have a solid financial plan,
if you understand what your goals are, if you are
diversified in your investments, you should be able to stomach

(10:17):
any kind of correction that we actually do have.

Speaker 1 (10:21):
Great point, here's the all words that advice. Every major
market drop had a different cause, but in every case
the market eventually recovered. The key is to have a good,
sound financial plan in place in advance. Next, we tackle
a key decision many are facing. Should you add an
annuity to your retirement portfolio. You're listening to Simply Money

(10:45):
presented by all Worth Financial on fifty five KRC, the
talk station. You're listening to Simply Money presented by all
Worth Financial Bob Sponsorer along with Steve Ruby. If you
can't listen to Simply Money every night, you can listen

(11:06):
to our podcast download that. Just search Simply Money right
there on the iHeart app or wherever you find your podcasts.
Straight ahead of six forty three. What is missing from
a traditional retirement plan that you need to shore up?
All right, Steve, Tonight, we're diving into a topic that
has been gaining traction among retirees and soon to be retirees,

(11:31):
and that is the subject of annuities.

Speaker 2 (11:34):
So it's really easy to sell an annuity when there's
volatility in the markets. So you bring up the fact
that there's an uptick. That's one of the reasons why
now remember annuities. Simply put, that's it's a contract with
an insurance company essentially where you're making a lump sum
payment or a series of payments in exchange for regular
payments to you beginning either immediately or at some point

(11:57):
in the future. Those payments can last for some said
amount of time, all the way up to your life
or even the life of a loved one that you
helped support. So there's guaranteed income that you are paying
a premium for that will last no matter what the
markets are doing. A lot of people think they need.
A recent survey found that seventy percent of non retired

(12:18):
workers would consider selecting an inplan annuity in for a
one K plan annuity or workplace retirement plan annuity if
they were available. And again, I think that's a symptom
of recent volatility.

Speaker 1 (12:30):
Well, I also think, would you not agree, Steve, it's
also a symptom of the defined benefit pension plan being
a thing of the past.

Speaker 2 (12:39):
Yeah, we don't have the three legged stool anymore. We
have the one and a half legged stool.

Speaker 1 (12:42):
Yeah. People are left of their own devices out there
to save and invest and contribute to a four to
one K plan and then figure out how to put
all this together to generate an income stream when they
retire that's going to replace their paycheck for So I
totally understand the set meant around. You know, seventy percent
of non retirement workers considering an annuity. Let's talk about

(13:07):
some of the watch outs when you actually look at
buying one of these things. What do we need to
be aware of?

Speaker 2 (13:13):
Yeah, I mean the same things that annuity salespeople pitch
about benefits, you know, tailoring products to fit your needs,
you know, having some kind of a long term care
rider attached to it. There's also some some hidden costs oftentimes.
I'm talking fees that are extravagant administrative fees, mortality expense,
risk charges, fees for these optional riders that sometimes you

(13:37):
don't realize they're going to be a heck of a
lot higher than you thought they were. A lot of
them are hidden behind the scenes that erode any potential
returns over time. There's caps on earnings oftentimes for what
you can actually expect to see as far as growth
is concerned in these annuity products. The unfortunate reality that
I come across is a lot of buyers remorse. I

(13:59):
see it almost every day, you know, when I'm meeting
with folks that come in to see if there's a
fit to work with us for financial planning and investment management.
There are very frequent situations where somebody says, hey, I
bought these annuities. Can you take a look at them?
And it's like, all right, well, yeah, if you sell
out of them anytime in the next ten years, there's

(14:20):
going to be a surrender charge that just is extravagant,
So you're probably not going to want to make any changes. Well,
I thought that I bought a contract that would support
me for life, but it's only for ten years, or
I thought it was going to be you know, my
wife would be a benefit, have the benefit as well,
But it's just me. I didn't know what I bought.
I didn't understand what I bought. This is a symptom

(14:41):
of commissioned salespeople just doing that, making a sale to
somebody that was spooked about the markets. Obviously, I'm coming
from a perspective of bias here because I've seen so
many situations where people have had buyers remorse for annuity products.
But that doesn't mean there's not a place for them
in a well thought out rounded financial plan.

Speaker 1 (15:02):
Yeah. I think one of the first questions anyone needs
to ask before getting involved with one of these things
is ask the person pitching it to you or recommending it,
ask them how they get paid, Because if the answer
is any kind of commission, there is an inherent, uh,
you know, conflict of interest. Built into the entire thing,

(15:24):
and that means you're not necessarily getting the advice that
is in your best interest one hundred percent of the time,
and that's what separates salespeople from true one hundred percent
fiduciary advisors. Talk about some of the other things, you know,
when you've had people come go ahead.

Speaker 2 (15:43):
Yeah, I have a buddy. He works for a competitor
registered investment advisor Firmantown. We come from the same place.
You know. We both got our securities licenses once upon
a time at a big brokerage firm nearby, and we
both became cfps while he worked there. As we rose
through the ranks, came you know, you want to sit
in the big boy chair. All you're going to do
is sell annuities. So we both left and found our

(16:05):
own paths elsewhere.

Speaker 1 (16:07):
I came from the same background. I know, I know
how the game's played thoroughly.

Speaker 2 (16:11):
Yeah, you can spend time at some of these places
and learn the type of advisor that you don't want
to be, which is kind of fascinating. But but this guy,
he told me a story. It was pretty He was
pretty new at the r A in the r A space,
and you know that this guy's smart. He's also a lawyer.
You know, he has his MBA, he's a CFP. He's

(16:33):
not big in annuities. He he's he's against them, I
would say. But the place that he worked offered them
as a solution, and somebody came in and they said,
I am pretty much demanding an annuity. I want an annuity.
I understand the consequences, but I also want to buy
one from somebody that knows what they're doing and isn't
just chasing a commission. So my buddy had to disclose

(16:55):
to him that this the size of the annuity that
this guy was buying with with a four oh one
k rollover get a forty thousand dollars commission to sell
it to him. Yeah, and what happened when he disclosed
that the guy still paid it? He really did. This
guy really wanted an annuity, and my friend, who I
know puts a client's best interest ahead of his own,

(17:16):
disclosed the heck out of it and said, look, I'm
going to be able to pay for college and buy
for one of my kids for a couple of years
and buy a boat with the decision that you're making,
Is this what you still want. And at the end
of the day, this gentleman that bought the annuity, he
understood what he was getting, He really wanted it. He
was terrified of the markets. My friend presented alternative solutions
that could fulfill the same end result, and the guys

(17:39):
like I want annuity. So oftentimes you're not going to
run across somebody selling annuities that will disclose it to
the level that my buddy did. They're not going to
tell you some of these hidden fees. They're not going
to tell you the downsides. They're not going to tell
you the fact that you're locked in and if you
have buyers or moorse too bad, so sad.

Speaker 1 (17:56):
And a lot of these folks don't have the kind
of alterner solutions to an annuity that your friend did. So,
I mean it sounded like he did. He did his job, He.

Speaker 2 (18:06):
Did all right.

Speaker 1 (18:07):
Here's the all Worth advice. It is crucial to consult
with a fiduciary financial advisor to determine if an annuity
aligns with your personal retirement objectives. Next, how to treat
your mortgage as you enter retirement, and beyond. You're listening
simply money presented by all Worth Financial on fifty five KARC.

(18:28):
The talk station you're listening to Simply Money, presented by
all Worth Financial. I'm Bob Sponseller along with Steve Ruby,
and we have a special guest tonight, our credit expert
Britt Scarce, who's going to walk through how to handle
our mortgage and other debt as we approach and move

(18:51):
into retirement, Brit. Interesting topic one that comes up all
the time for our clients. What do you talk about
with your clients when it comes to what if anything
changes with regard to your mortgage and overall debt situation
as you approach retirement.

Speaker 3 (19:11):
Well, I think in a perfect world, we would enter
into retirement with with no debt, with having our mortgage
paid for and you know, be able to you know,
have a nice nest egg to live on. And you know,
if people have pensions and you know, social Security and
all that and that's all where you know, you as
financial planners you kind of help people along with that.

(19:32):
Now with mortgages, you know, we've we've been in a
situation a few years back where rates went to the
twos and threes and fours and a lot of people
are very much concerned that Hey, you know, I'm getting
more than three or four or five percent return in
my investment portfolio, should I pay off my mortgage? And well,

(19:57):
I would say it depends, you know, And I hate
those kind of answers because it does kind of depend
on what your cash flow is going to look like
going into retirement. I certainly am a fan of no debt,
but there are opportunities that if you continue to invest
and get a better return than what your mortgage interest

(20:18):
you know, is charging you, you could at some point
be able to you know, at any time, once you
get enough money invested, you could certainly pay off the
mortgage at will if you need it to. So you know,
the answer is it kind of depends. I would prefer
to have someone with no mortgage payments at all going
into retirement, but there are some situations, and it also
depends on the timeline the horizon of when you're going

(20:41):
to retire as well.

Speaker 2 (20:44):
I like that that's your answer. I'll be honest, because
sometimes when you ask a certified financial planner a loaded question,
the answer is, I don't know. It depends that we
need more information.

Speaker 1 (20:53):
You got to answer all the time, Steve, just like
Brett and Amy just you know, nails me on it
all the time because he likes her little you know, well,
I'm joking.

Speaker 2 (21:03):
Yeah, it depends.

Speaker 1 (21:05):
Is often a great answer, and it leads to why
every person's situation is different and every financial plan should
be customized.

Speaker 2 (21:14):
It's kind of fascinating sometimes because you run the financial
plan and let's say you run into somebody who is
more of a risk taker. They're comfortable letting their money
work hard for them. They have a very low mortgage rate,
and in a situation like this where they have the
extra investments that they could wipe out the mortgage. Oftentimes,
when they're investing more aggressively and they have a longer

(21:34):
time horizon, at the end of the plan, you're gonna
have more money by investing with those dollars as opposed
to paying off the mortgage. But when your plan works wonderfully,
it doesn't really matter. I've done that before, where somebody
they were gonna have twenty five million dollars at the
end of their plan if they paid off or if
they kept their money invested rather than paying off the mortgage.

(21:55):
If they paid off the mortgage, they were gonna have
twenty four million, and they said, I'm paying off the mortgage.
I want to be debt free because it gives me
peace of mind.

Speaker 1 (22:02):
Yeah, I think we're all kind of singing off the
same sheet of music here, Britt. Wouldn't you agree that
it depends on the rate of interest you're paying on
that debt. A two point seven eight percent thirty year
fixed mortgage is a whole different ball of wax than
a ten point three percent interest rate on an RV
purchase or something like that.

Speaker 3 (22:22):
Right, you are exactly right, exactly, and that's you know,
obviously you can outpace the returns. You know, if you're
in the twos and the threes most likely, you know,
you guys being investment advisors, you can probably over a
long period of time, get someone a much better return
on that money.

Speaker 2 (22:43):
So I've heard about hidden costs of holding no debt?
You know, does this hold water? Is avoiding all debt
the best financial strategy in your opinion?

Speaker 1 (22:51):
Then well.

Speaker 3 (22:53):
I'm a I'm a big fan of no consumer debt.
You know, if you if you're talking about what we
in many cases referred to as good debt or bad debt,
good debt being something that is secured by say, real
estate Uh, you know that's financed at a very low
interest rate. You know, that kind of debt could actually
give you the ability to leverage and get a much

(23:15):
more uh higher return on your on your money. And
right now, you know and uh investing in real estate.
Real estate is not getting any cheaper. So you know,
obtaining a mortgage to obtain an asset that's going to
appreciate in value, Uh, I don't see, uh you know
a problem with that. Now if you're going to go
out and get personal loans and like you said, buy

(23:38):
r vs and and cars and go to get stuff
that's going to go down in value, that's that that
I'm not a big fan of, Bret.

Speaker 1 (23:47):
What are you seeing coming across your desk here, you
know right now, current topics people trying to upgrade their home,
you know, move to Florida, what have you. What kind
of conversations are you having most commonly, if there is
such a thing as it relates to how to handle
debt right now relating to real estate, Yeah.

Speaker 3 (24:10):
There is a little bit of a lock in effect
right now. We're talking about the low interest rates that
a lot of people have on their on their homes
if they're in the two threes fours, you know, there's
there's not a lot of desire to move up or
you know, get rid of that particular mortgage and go
to something now that's in the going to be most

(24:30):
likely in the sixes. You still have people that are
buying houses, you know, first time home buyers. There's still
opportunities for that. We have some people that are still
looking at second homes. That's still uh you know something
that's that's available out there. Uh, people, you know, I don't.
I don't think you see a whole lot of you know,

(24:51):
people trying to refinands because you know they're they're if
they're already in the low you know, three fours and fives,
that doesn't make a lot of sense reefinants if you're
trying to manage debt. Some people are tapping into home
equity through home equity loans and leaving the lower interest
rate debt on the first mortgage in place. But I've

(25:12):
also seen people that have depending on their debt structure.
And again this goes back to our it depends type
of answer. You have someone with a lot of equity
in their home and they decide, hey, you know, I
do want to either downsize to a different house, or
I want to move up to my dream home. If
they're able to sell a house that has a lot
of equity in it, put a lot of money down

(25:32):
on the next house, even if the new rate's going
to be perhaps in the sixes, sometimes they can still
make those numbers work where the mortgage is still comfortable,
and or they could buy a different house, downsize a
little bit, and use some of that home equity to
pay off debt. So again, there's a lot of different

(25:52):
answers for a lot of different people, and it depends
on your particular situation and what your goals are.

Speaker 2 (25:58):
Got it. So I want to hear your perspective on,
you know, the conversations you have for for helping set
expectations around transferring property to to to loved ones, passing
down real estate strategically as part of your state plan.
What do you talk about with people?

Speaker 3 (26:16):
Yeah, I mean there's there's definitely ways to do that.
You uh, you have to be careful. You don't want
to do this when when everybody when you know, let's
say mom and dad are looking to uh pass on
assets maybe homes, you know, to their kids. You don't
want to wait till they're like getting ready to head
into the nursing home to try to start doing that

(26:36):
type of planning. You want to think ahead. First off,
everyone should have a will and uh that kind of
gives everybody an idea of what you plan to do
with the property. Uh that that really removes a lot
of a lot of challenges. Now there are there are ways,
like you know, establishing trusts ahead of time. There's also

(26:58):
uh the ability to maybe sell a property to a
loved one, you know, at a fair market value. You know,
you do have to worry about some of the you know,
things like the Medicaid five year look back and that
sort of thing. This is this is why people really
should if you have assets, if you have homes in
real estate that you're looking to pass down to your errors,

(27:19):
you need to get an attorney and a state planning attorney,
and you need to put in place things like wills
and consider things like trusts or whether it makes sense
to add them to deeds and do you know transferrent
death deeds or or doing you know, revocable trusts or
irrevocable trusts and things like that. Those are things that

(27:40):
in a state attorney would be able to really walk
you through.

Speaker 1 (27:44):
Great stuff at all. As always from our credit expert,
Brit Scarce. You've been listening to Simply Money presented by
all Worth Financial on fifty five KRC the talk station.
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Steve Ruby. Do you have

(28:08):
a financial question you'd like for us to answer? There
is a red button you can click while you're listening
to the show right there on the iHeart app. Simply
record your question and it'll come straight to us. All right, Steve.
Retirement it's a time we all look forward to the
moment when you can finally kick back and enjoy all

(28:28):
the fruits of your hard work. We often think of
it purely in financial terms. You know how much you've saved,
what your assets are worth, whether or not you'll outlive
your money. But tonight we want to take a deeper
look into what's often missing from a traditional retirement plan. Yeah.

Speaker 2 (28:47):
I mean this is something that I've come across time
and time again, where people work so hard to not work,
they make the transition to retirement, They're like, Okay, what
the heck do I do? Now you know, it's important
because it isn't a emotional time. There can be major
psychological impacts. You kind of face an identity crisis when
you leave the workforce. You know, when you spend decades working,

(29:07):
it can be jarring to shift from having a specific
role with routines and purpose to somebody without any structure.
If you didn't plan accordingly to create that structure, you know,
people kind of ask what am I without my job?
What do I do? Now? A lot of folks that
I've seen over the years, many of their friendships are

(29:29):
through their work, Like, all right, all my friends are
at work, and now I'm retired. What the heck do
I do?

Speaker 1 (29:36):
Yeah, I've helped dozens of people retire at this point
in my career, at.

Speaker 2 (29:40):
Least ten or twenty probably right.

Speaker 3 (29:44):
More.

Speaker 1 (29:44):
Yeah, Well, I have gotten these phone calls, you know,
and a lot of clients I've worked with now for
over thirty years, they're now in their mid to late eighties,
and I can tell you from personal experience, it has
been a bit of an adjustment for some folk folks
to leave the workforce. So this is a significant issue,
and I've had I've had people call me Steve and

(30:06):
actually say I need something to do. I mean, it's
that serious of an issue. So let's get into some
of the things that we can and should be doing
in preparation for retirement, to get out in front of
these what I'll call surprises that might rear their ugly
head if we don't think about them and plan for
them in advance.

Speaker 2 (30:26):
Well, when when I'm building financial plans, and when fiduciary
financial planners are building financial plans, oftentimes we're looking at
when when we track expenses and project expenses and retirement,
I look at your needs, your wants, your wishes, your needs.
That's your house and utilities, groceries, gas, that's your health
care expenses, your wants. That's that's how you want to

(30:48):
spend your days. I mean, is that is that traveling?
Is that golfing? Is that volunteering? Is it donating you know,
to to charitable causes that you believe? And this is
where I want people to lean on as heavily, because
that's what gives you that purpose when you're no longer working.
It's it's how will you be fulfilled as you make
that transition into retirement. That that's why a lot of

(31:09):
places out there that you know, if you just google
how much will I need to retire, You're going to
see things like eighty percent of your pre retirement income.
That is a generality, that is not a one size
fits all. Oftentimes I'm baking in higher expenses for some
of these wants and maybe wishes like you know, buying
a home in Florida or North North Carolina. You know,

(31:30):
maybe where your children, your grandchildren go to college, whatever
that is. You need to plan accordingly to make sure
that you aren't going to make that transition into retirement
and just sit around.

Speaker 1 (31:43):
Yeah, and advice that I give to folks all the
time as they prepare for retirement. And again this is
just with the benefit of hindsight actually watching people retire
for decades now, you know, clients.

Speaker 2 (31:55):
Dozens and dozens of people.

Speaker 1 (31:58):
I ask people to take, you know, one to two
week vacation while they're working, you know, use your one
to two week vacation time and simulate retirement. You know,
use your vacation as I'm gonna test drive retirement. Where
am I gonna go? Who am I going to spend
my time with? What am I going to do? And

(32:18):
that gives people kind of a glimpse as far as
what will life look like when I turn a temporary
vacation into a permanent vacation ie retirement.

Speaker 2 (32:29):
You're going to revert back to teenager and just stay
up watching TV all night and then sleep till one pm.
You know that's not you don't want to find that
being what happens when you when you transition to retirement.
But you know, we also need to make sure that
that we're preparing accordingly for some of these expenses too,
to ensure that we are able that our money is

(32:50):
able to live longer than us. It's about finding a balance.
You need to have something to do. But you know,
when I talk about needs, wants, wishes, you also have
to be able to fulfill your needs. Healthcare expends are
getting more and more costly than ever before. Average sixty
five year old couple might need about three hundred thousand
dollars for healthcare expenses and retirement. So planning accordingly to

(33:10):
find that balance between supporting your needs and making sure
that you have wants and wishes to work towards so
that you have social connections, so that you have an
active lifestyle. This is very important and it is. It
is part of a financial advisor's job to ensure that
you are living that that rich and meaningful life when
you make that transition into retirement.

Speaker 1 (33:31):
Yeah, it's at least worth having the conversations. And I
think having the conversations with both spouses present is important
because when one spouse retires and the other is still working,
that's an adjustment, you know, to the household in terms
of the daily rhythm of the household, you know, the
same as if both spouses retire. So it's important to

(33:53):
have those conversations in advance so no one's disappointed when
we actually, you know, do walk out retire.

Speaker 2 (34:00):
It's kind of amazing too, because I've facilitated some of
these conversations dozens of times in fact, probably where I'll
ask the question, so, how do you how do you
want to spend your time in retirement? How do you
want to spend your time in retirement? And the spouses
will have completely different goals, and it's like, all right,
well you guys talk about this amongst yourselves, will circle back.

Speaker 1 (34:20):
Yeah, but you're at least teeing up the conversation.

Speaker 2 (34:22):
You almost feel like a marriage counselor sometimes yeah.

Speaker 1 (34:25):
For sure. All right, here's the all Worth advice. Don't
forget to plan for the things that really matter. Money
isn't everything, it's just the foundation. Next, we're going to
take a trip inside my own brain, which is scary
in and of itself. Actually, I'm going to take you
inside Bob's World of Wealth. You're listening to Simply Money,

(34:45):
presented by all Worth Financial on fifty five KRC, the
talk station. You're listening to Simply Money presented by all
Worth Financial. I'm bob sponsorller along with Steve Ruby. All right, Steve,
I'm I'm going to spend a few minutes in my

(35:06):
Bob's World of Wealth segment here, sticking with our last
topic because it's such an important one, and that's the
psychological and emotional part of preparing for retirement. Sure, and
I know you're trying to drive home the point of
how old I am and how many times I've done this,
But I have done this to your point, does this
and dozens of times? And all joking aside. I think

(35:29):
these discussions about simulating what retirement really is going to
look like, and having both spouses on board for those discussions,
I think it is critical as critical as the financial
part of preparing for retirement. What say you, mister Steve.

Speaker 2 (35:50):
You know, like I said that, sometimes it almost feels
like we're marriage counselors in a sense to make sure
that that within the household, we help people will come
to realize what their shared goals are and sometimes what
their separate goals are and make sure that we can
plan accordingly to help them achieve them.

Speaker 1 (36:09):
Yeah, and I mean, we're not qualified to be marriage counselors,
And I know you're kind of saying that tongue in cheek,
but I do think our job is to tee up
these conversations in some of our meetings that we're having
as we prepare clients to actually retire, and it's mainly
just facilitating both spouses to talk through what their lifestyle

(36:31):
is going to be in retirement. Because I think, Steven,
you made the point in the prior segment and I've
seen this as well, when you actually put some of
these questions on the table and have both spouses react
to how you're going to spend your day, where do
you want to travel, who do you want to spend
your time with some of the answers that different spouses

(36:52):
give can be surprising, and that's what warrant's going back
and having the spouses talk through that together so that
we're prepared for the actual retirement date.

Speaker 2 (37:04):
I think at the end of the day, when you're
hiring a fiduciary financial planner to help you navigate through
some of these big conversations and big emotions, what you're
really paying for is peace of mind and having somebody
in your corner that can help you navigate these big
choices and help get you on the same page as
your spouse or navigate ways to have separate goals from

(37:27):
the same resources. There's a heck of a lot of
value in that because at the end of the day,
the job is to make sure that you live that
rich and meaningful life without running out of money, and
the expectation is that you're always going to live a
lot longer than you think you are. We need to
stress test the heck out of your plan to ensure
that curve balls don't derail what possibilities are ahead.

Speaker 1 (37:47):
Yeah, a rich and meaningful life involves many many things
apart from just money. Thanks for listening. You've been listening
to Simply Money presented by all Worth Financial on fifty
five KARC, the talk station