December 17, 2025 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian explore a simple phrase that could mean the difference between financial freedom and struggle: “the sooner the better.” They unpack new data around Gen X’s looming retirement crisis and what it means to be the first generation largely retiring without pensions. Then, they dive into a compelling new study showing how saving—not spending—could be the true key to financial happiness. Plus, career expert Julie Bauke joins to dissect “the executive dilemma”—when a promotion might not actually be the best next move. Finally, Bob and Brian answer real listener questions on managing capital gains, tapping into dividends, and planning for long-term care.
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Episode Transcript
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Speaker 1 (00:06):
Tonight a simple phrase that could be the difference between
financial freedom and financial struggle. You're listening to simply Money,
presented by all Worth Financial on Bob's spondseller along with
Brian James. What is that simple phrase? The sooner the better?
And tonight we have some new data that explains all
of this. It all centers around the group of people
(00:29):
who are in the on deck circle Brian for retirement,
the gen X group.
Speaker 2 (00:37):
That's my group, Bob, So let's talk about the problem
that my generation has here.
Speaker 1 (00:41):
So talk about all the dysfunction going on with your group.
Speaker 2 (00:45):
Yeah, well, I don't think it's quite fair to label
everybody with a generational label and say that everybody's a mess.
But here are the common problems that are coming up
with with with this generation. By the way, this is
a generation we really never talk about because we're one
of the smallest generations there are. I read a study
a long time ago that said that basically looked at
(01:06):
over all the generations and when people are born and
all that kind of stuff, and therefore how long do
they have to be in control in terms of when
that generation would take control of Congress, that kind of thing,
and it was literally like an eighteen month period before
with gen X is quickly overwhelmed by this ensuing generations.
But we'll have our moment in the sun anyway. So
(01:26):
we were talking about gen X today because this is
the first generation that's going to be funding retirement largely
without private pension plans.
Speaker 3 (01:32):
So those are and I think of myself there.
Speaker 2 (01:36):
My wife and I are somewhat fortunate to have old
pensions from old jobs from million years ago, but not anymore.
But I do remember vividly my grandpa who worked He
was a facilities maintenance guy for what was then CG
and E now then Synergy and now Duke Energy.
Speaker 1 (01:51):
But we would.
Speaker 2 (01:52):
Fight as cousins to mark off the red xes on
his calendar, which were the day that he had his
thirty years of time in and was sixty five. I
think is how it worked. But anyway, that that kind
of countdown doesn't really exist for gen X because there
isn't really a clock unless you've built your own. Not
everybody has the same, you know, without a private pension plan,
(02:13):
it's basically whatever you've put together on your own. And
that's exactly what this generation is going through. And is
that with that as the measuring stick, you know, not
so good here. Gen X workers on average have saved
about a median of about one hundred and seven thousand
dollars in total household retirement accounts and sixty five hundred
dollars in emergency savings. This is coming from the nonprofit
(02:34):
trans America Center for Retirement Studies in collaboration with trans
America Institute, Big insurance company out there, a total of
two and ten have already or twenty percent have already
dipped into their retirement savings by taking a hardship withdrawal
or in early withdrawal. And these are people who the
oldest among us was born in nineteen sixty five. So
we're on the very very early edge of retirement here
(02:54):
and already dipping into retirement savings. That retirement balance compares
with you know, the estimated one and a quarter million
dollars that Americans generally think they need to retire comforty.
That one comes from Northwestern Mutual. So gen X maybe
has a bit of a tough hill to climb here, Bob, Well, let's.
Speaker 1 (03:10):
Get into why this is happening. And I always hate,
as you know, Brian, to paint with a broad brush
take a whole generation of folks and take the mean
or average numbers, and you know it's not always representative
of exactly everything that's going on here. But in reality,
let's talk about what this generation of folks has had
(03:31):
to endure. From an economic standpoint and just from a
family dynamics standpoint. Many members of Gen X graduated college
or high school during a recession. They got their first
jobs when four oh one k's were in their infancy,
you know, pre hating the Internet and lacking the educational
resources that at least some or maybe even many plans
(03:54):
offer today. And let's face it, from an investor confidence standpoint,
the Gen X generation, well, they had to endure the
dot com bust, the Great Recession, and the COVID pandemic.
Those are three really big gut punches, and that all
takes big swipes it what I'll call investor confidence. I mean, shoot,
(04:15):
when you see, you know, the market go down fifty
five sixty percent in very short order more than once,
you know over a decade, that's going to make you
scratch your head and say, wow, is it? Does this
really still work? Brian, and I think as a result,
auto enrollment in four oh, one k's maybe declined a
little bit. The auto escalation features of savings in those
(04:38):
four to one k's declined, you know, tack on high
student loan debt in some cases. And then you know,
a lot of these folks and and you you live
through this, and I know our clients, do you know
the Generation X folks are literally living in that sandwich
generation where they're trying to support their own live, their
(05:01):
kids and sometimes their parents and other loved ones. It's
a lot of stuff to take on, both emotionally and financially.
Speaker 2 (05:09):
Yeah, And I think all the generations have different experiences
for what they go through and for the things that
they point to as the formative experiences of their lives.
Speaker 3 (05:18):
And a lot of times that's in conflict.
Speaker 2 (05:20):
And I think really the conflict that Gen X has
between that and the prior generation comes from the i'd
say the eighties and the nineties, right, So we had
the nineteen seventies where we had stagflation, we had a
rough economy there obviously one of the rougher periods economically speaking,
and that was the formative time. That's when the Baby
Boom generation was starting to make its own. But then
(05:41):
the pendul swung back the other way, and we had
the eighties and the nineties where really nothing bad happened,
and that was the beginning of the really what has
become the technology boom over the past several decades.
Speaker 3 (05:51):
So I think we had a.
Speaker 2 (05:52):
One generation and the Baby Boomers that feels like that
did pay their dues in the seventies and were rewarded
with the eighties and the nineties, and Generation X is
looking at that and going, yeah, we've had twenty years
worth of chaos with the payoff periods have come with
massive market upswings, but only three four years at a
time before chaos ensues versus the straight twenty years of
(06:14):
really nothing scary happen.
Speaker 3 (06:15):
And that's nobody's fault.
Speaker 2 (06:17):
That's just how it works, and that's everybody's perspective in
terms of how they see it. And every generation likes
to think it's the one suffering the most. I think
every single generation out there, with the exception of maybe
the Silent generation, which is aptly named, has opinions on that.
Speaker 3 (06:30):
So but any case, yeah, I mean, everybody.
Speaker 1 (06:33):
Are you are you gonna be one of those Gen
xers that sit down with your kids and talk about
the woe is me? I had to walk uphill both
ways to school, three miles in the snow. Are you
gonna be one of those old curmudgeon folks blaming all
of your ills on someone else or the weather.
Speaker 2 (06:50):
I don't think so, but I guess what remains to
be seen. Maybe that'll happen, depends on the mood I'm
in that day that that conversation comes up.
Speaker 1 (06:57):
I don't know, all right, in this in this spirit
of controlling what we can control, and that's all we
can do is control what we can control. What are
the what are some of the things that we need
to talk to folks of any generation, including generation X,
on how to take ownership of your own retirement situation
and you know, get the trains back on the proverbial
(07:20):
tracks here and move us forward.
Speaker 3 (07:23):
Well, I think it's just like anything else.
Speaker 2 (07:24):
I mean, like you said, controlling what you can control,
and that that's true for absolutely anybody of any gender
gen That's generationally irrelevant because everybody has their own situation
to deal with. If you've got your own resources, your
own goals, and it simply means, Matt, understand what you are,
what you have available to and what you're trying to accomplish,
and that's all financial planning, right, So so step back
(07:45):
and understand, you know, what are my limitations, what are
my opportunities, my strengths, weaknesses, and so forth, and then
build some kind of financial plan out of that and
then operate accordingly. And the thing we shouldn't be doing
is trying to, uh, you know, follow some kind of
uh you know, a blueprint that somebody else has written
up for everybody to go do.
Speaker 3 (08:03):
It doesn't work that way.
Speaker 2 (08:04):
You have to understand your own situation, which is going
to be very different from that of other family members, neighbors,
and so forth, and then operate accordingly within those those limitations.
Speaker 1 (08:14):
So if you do sit down with a good fiduciary advisor,
which Brian and I highly recommend, and take you do
an assessment of where things are today. I mean, let's
face it, you really only have three levers to pull
at the end of the day. You can save more,
you can spend less, or you can work more years
or a combination of all three. And that's where we
(08:36):
get into some of the planning and when people actually
see some numbers and how pulling those different levers can
really move the needle in a hurry. That at least
gives people a track to run on, and oftentimes, Brian
gives them a lot more confidence instead of just flying
blind and hoping it all works out. And for folks
that are in their fifties, man, this is prime catchup time.
(08:58):
You know, to the extent you can handle it from
a cash flow standpoint, make those extra contributions, revisit your
acid allocation, Maybe take on a little bit more investment
risk to get a little more growth or juice in
your portfolio if your time horizon allows for that. Brian
talk about for folks in their sixties, a lot of
(09:19):
these folks are wanting to retire in the next five
years or so. What are some things those folks can
be doing well.
Speaker 3 (09:24):
This is the leading edge of gen X here.
Speaker 2 (09:26):
So now it's time to start thinking about how are
you going to optimize your social security timing? You know,
if you're if you're there's not there's there. There aren't
as many levers to pull here as there used to be. Right,
we're not talking about tricks anymore, about file and suspend
and all that.
Speaker 3 (09:39):
That's that's been gone for ten years. But that doesn't
mean there aren't.
Speaker 2 (09:42):
Decisions to be made when you're What you're trying to
do is optimize social security timing alongside withdrawals from your
investments from your portfolio, because in a given situation, it
may make sense to turn on social security early in retirement,
it may make sense to push it. And that has
everything to do with the taxation of the of the
other assets you have if everything you have is pre
(10:02):
tax because that's just where you set up your four
one K, that's where your retirement savings are. That itself
is the pivot point between when you should whether you're
gonna file for SoC security earlier versus later, versus if
you maybe if you focus more on the wroth you've
got tax free assets, or if you have assets outside
of retirement plans entirely in taxable type of accounts, then
(10:22):
that will push the that could push the social security
pens in one one direction versus the other. So we
do see all the time we have people who have
this who feel like they're behind and they leave after
having done a financial plan, you know, realizing they're actually
in a good spot.
Speaker 3 (10:37):
So give yourself a chance. If you're listening to this
show and.
Speaker 2 (10:40):
You're aware of all worth or or other financial education
resources out there. You're probably in better shape than you
already have. So give yourself a break. People who have
been seeking out that kind of information for a long
time usually have put themselves in a good place. They've
just never stepped back to look at the the you know,
forest instead of the individual trees.
Speaker 1 (10:59):
Yeah, and speaking of giving yourself a break, I mean,
this is a good time, you know, to throw out
a reminder here, Brian, of a topic we cover all
the time on this show, and that's just managing the emotions.
If you are in that Sandwich generation, and here's what
I mean by that, You know, you don't have to
carry the whole world on your shoulders if you get
out in front of this and communicate a little bit.
(11:20):
For example, if you if you feel just this moral
obligation to pay, you know, one hundred percent of the
cost of a private education for your kids, you might
have to pump the brakes on that a little bit
and compromise in the spirit of, you know, maintaining your
own retirement viability. Same thing with aging parents or other relatives.
(11:42):
You know, if people are expecting you to help, you
got to set a little bit of boundaries there to
make sure you don't, you know, impoverish yourself in order
to help you know, parents or aunts or uncles or
other relatives that you might perceive, you know, need some money.
So it's not just running numbers, it's you know, balancing
(12:02):
and managing the behavioral aspects of all this and all
joking aside. You know, there are a lot and a
lot of folks in this generation x UH generation that
are really uh carrying a lot of weight here, both
emotionally and financially, and sometimes working with a good financial
advisor is just that other set of eyes and ears
(12:24):
that can help you think objectively and again get yourself
in a good place moving forward. Here's the all Worth advice.
The earlier you act, the more options you'll have. But
even later in life, smart planning and smart communication can
make all the difference. Coming up next, one data supported
money move that could boost your happiness. You're listening to
(12:46):
Simply Money presented by all Worth Financial on fifty five
KRC the talk station. You are listening to Simply Money
presented by all Worth Financial on Bob Sponzell along with
Brian James. Hey, if you can't listen, to Simply Money
live every night. Subscribe and get our daily podcasts. And
if you think your friends or family could use some
(13:09):
financial advice, especially during this uh, you know, volatile, you know,
uncertain times that we live in, tell them about us
as well. Just search Simply Money on the iHeart app
or wherever you find your podcast straight ahead of six
forty three real questions from real people will weigh in
with insight hopefully that you can use no matter where
(13:31):
you are on your financial journey. Well, we all want
to be happy, Brian, I know I do, don't. Don't
you want to be happy?
Speaker 3 (13:40):
Yes, yes, I do, Bob, Thanks for reminding me of that.
Speaker 1 (13:44):
Well, talk to us about a new you gov poll
that found something very interesting when it comes to money
and how we use money.
Speaker 3 (13:54):
Well, I'm about it. This new poll came out.
Speaker 2 (13:56):
Instead of whopping, seventy two percent of Americans, including sixty
nine nine percent of high income earners, say they know
they'd be happier if they saved or invested more money.
Speaker 3 (14:04):
Now that I think is that is just a that's
just an earth shattering statement right there.
Speaker 2 (14:09):
But only about twenty one percent said spending would make
them happier. Spending more would make them happier. So this
is good in a sense of people were realizing I
think that they'd be happy that people are saying, I'd
like to know that I have a bigger cushion, and
it's maybe not so many say they'd like to be
spending more of that cushion.
Speaker 3 (14:27):
Just kind of a mindset saying.
Speaker 2 (14:30):
That I'd like to know that I've got a little
more shock absorber to kind of handle the crazy stuff
that like and throw at us from a pole. That
was done for market Watch of about twenty five US
adults in late October, and it was people with a
household income of more two hundred and fifty thousand dollars.
With those, they were more more likely to agree that
(14:50):
it was important to keep up in terms of saving,
though they were also more likely than average to agree
that it was important to keep up with spending. So
you know a little bit of I think we got
a lot opinions in there. But at the same time,
it's interesting that that we're pivoting more towards saving makes
us happier than spending. That is that is different than
what I have heard my entire life.
Speaker 1 (15:09):
It seems like, yeah, this reminds me of a cartoon
I used to watch when I was a kid, and
I can't even remember what it was, Brian, but I remember,
you know, it was a cartoon that had two little
kind of elves or voices, you know, standing on a
guy's shoulder. And what I mean is we always have,
you know, two voices in our heads, one thinking saying,
(15:30):
long term, man, I really should be saving and investing
in building for the long term. And then that other
voice is saying, yeah, but I really want to take
that trip. I really want a new car. I really
want the iPhone seventeen pro. You know. There there's always
these conflicting voices going on, and I think that's what
that study is getting at. I'm more interested in this
(15:51):
hearing from an expert, you know, who actually studies behavior.
And we're going to cite some comments from Arthur Brooks
and an actual Harvard professor and writer who studies happiness professionally, Brian.
And he says, there's five ways you could basically move
use money. You can buy things, you can buy experiences,
(16:13):
you can buy time, you can give money away, or
you can save it. And he says only the last
four of those five things actually brings happiness. He wrote
a summary of an article in a LinkedIn post earlier
this year, and his point is, hey, stuff, even if
it gives us that dopamine hit in the short term,
(16:33):
stuff always wears off. But saving money is progress, and
progress makes us happy, along with buying experiences and buying time,
which is what saving money ultimately gives us. What do
you say about that those comments from Professor Brooks, I
think those are pretty spot on myself.
Speaker 3 (16:52):
Yeah, I think it makes a lot of sense.
Speaker 2 (16:53):
And again, having done a lot of financial planning for
people where the big goal in life is that house
in Hiltonhead or the or I'm gonna buy myself a
nice car when I retire. Those when I hear, when
I hear those things not coupled with other greater, you know,
experience oriented or family oriented plans, I know that's somebody
who's probably not gonna wind up super happy if that's
(17:15):
the only thing they're focused on. But I want to
move on to the next thing he says here, which
which is he kind of determined that there is no
ideal savings rate for happiness, but the research suggests that
a golden mean exists between security and deprivation. So that's
a lot of fancy college talk for basically saying save
enough so that you feel secure, but not so much
that you are ruthlessly illiquid.
Speaker 3 (17:36):
Ruthlessly I liquid.
Speaker 2 (17:37):
I've never heard that phrase before, but I'm thinking of
people that I've met in my planning career who just
do nothing but save, safe, save, and just will not
spend and have their the main purpose for getting out
of bed is to go update their spreadsheet as to
how much money and whatever their investments did yesterday, and
there's really not much else going on in their lives.
I run across these people every now and then, and
(17:58):
they are just not the happiest people at all.
Speaker 1 (18:01):
Yeah, and on the flip side, we've got those folks
who really do need to be saving more and putting
more away. I mean, the last you know, data we
saw on the personal savings rating in the United States,
or the share of income left after spending and paying taxes,
was a very low four point seven percent in September.
And the analogy that comes to mind here, Brian, back
(18:23):
to your point of that finding that balance of feeling
secure or feeling ruthlessly I liquid, It's kind of like
you know, knowing you need to lose thirty pounds and
putting a goal out there that I'm gonna lose, you know,
seventeen pounds in the next twenty seven days. And boy,
you go off, you know, you know, you know, running
around the neighborhood six times a day or whatever. And
(18:45):
guess what. After about three days, you're exhausted. You say,
there's no way I can do this. It's not gonna
work for me, and you stop, you quit. And I
think the point that the Professor Brooks here is making
is small incremental changes in you know, implement over time
is what's really going to move the needle here. And
there are forces at play out there that make this
(19:08):
harder for people. Let's talk about what some of the
things that maybe might be getting in our way mentally.
And I'm talking about social media, Brian. It's a real
influence out.
Speaker 3 (19:19):
There, fear of missing out.
Speaker 2 (19:21):
Social media has made it easier than ever to measure
our own lifestyle against other peoples. But only seventeen percent
of respondents pulled by you gov for market Watch that
we referenced earlier, only about seventeen percent agreed that it
was important to keep up with our peers in terms
of spending, but at the same time, twenty eight percent
that it was important to keep up with them and
to keep up with their peers in terms of saving regardless.
(19:41):
I don't care whether you're keeping up in terms of
spending or saving. If you're paying that much attention to
other people, you're probably not going to wind up in
a happy spot anyway. Understand what your situation is and
what your goals are and focus only on that, and
get off of social media in terms of a measuring
stick for your own life.
Speaker 1 (19:56):
Here's the all Worth advice. Happiness for money is it
about what you by. It's about the security and options
that you build over time. Focus on goals that truly
bring you peace of mind. You've worked your way up
the ladder and you've perhaps made even some great money,
but opportunity comes calling in the form of an executive
(20:17):
position or a big promotion should you move up that
corporate ladder. We'll talk about the quote unquote executive dilemma
coming up next. You're 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
(20:38):
on Bob Sponseller along with Brian James, joined tonight by
our career expert Julie Bauki. Julie, thanks, as always for
carving out some time for us tonight. We want to
talk about something we're gonna call the executive dilemma, staying
put versus jumping to the next big, big thing. Let's
say you're in a great role right now. You love
(21:00):
your job, you're obviously doing very well at it, but
opportunity comes knocking. What's the right move and how do
you evaluate whether to make a move?
Speaker 4 (21:10):
Yeah, I can kind of speak in generality because I've
worked with a lot of people in this situation, and
the first question I would ask is why would you
consider this move? So, in other words, what are the
compelling things about this move? And sometimes what I find
when people start listing out compelling things more salary, you know,
a higher level title. My next question would be, are
(21:32):
you sure that those are the things that really matter
to you? Because it's very it's very ingrained in us
that jumping for the next big thing, more money, more
title equals more happiness and career satisfaction. But I know
for sure that's not true, and so when you look
at why did that appeal why did that role appeal
(21:54):
to you in the first place, and then ask yourself,
are those things that really matter to me at this point?
I always from a point of what matters most to
you right now in your life, and then bring the
career conversation into it. And because if you are going
to get that bigger title and more money, does it
also mean that you have to travel more?
Speaker 2 (22:12):
Does it mean you have.
Speaker 4 (22:12):
To work weekends? And how does that fit into what
your priorities are? And so it's so that's the big
question is why would you And then take a look
at what is it about where you are now that
might be sticking in your gut as to why it
even makes sense to look for something else? And what
are you missing where you are? If you could change
(22:35):
some things about your current situation, would that solve that?
Would that solve that? It's you're getting to move on.
But I think just a really good critical analysis of
the why behind both where you are, the whis and
the what both behind where you are and what the
opportunity is in front of you is really really important
(22:56):
because we can get super caught up in Yeah, but
it's a director title. Yeah, but it's a VP title
without really thinking about what am I getting up, what
am I giving up to get that? And then how
does that work against what my whole life priorities are
right now? So a career decision has to be made
on a bigger platform than in a vacuum.
Speaker 2 (23:16):
Julie, I think a lot of people learn the hard
way exactly what you just said, because we get this
so ingrained in us that I got it. If I'm
getting off of this position, well, clearly I'm fantastic. Obviously
they love me, and I should take advantage of these benefits.
But people do tend to learn the hard way that whoops,
maybe I caught my limit. Maybe I don't want that
next level because my other things in my life have
taken priority.
Speaker 3 (23:35):
So how do people unwind it?
Speaker 2 (23:37):
For those people who feel like they may have done
that in that position, how can what's what are some
ways to unwind that?
Speaker 4 (23:42):
Yeah, so you're saying like, if you've already taken that.
Speaker 2 (23:45):
Role, yeah, and you didn't, and you just didn't occur
to you that, you know what, I didn't really want
this extra level of work. I just didn't think it through.
I just thought it was another accomplishment.
Speaker 4 (23:53):
So the first thing, It kind of depends on a
lot of things. If you have so let's say you
have a very stable career history. You've worked a long
time at one place, and you've jumped to this other place,
and you've been there nine months to a year, and
you say, this isn't exactly what I thought it was
going to be. You can successfully and confidently pivot at
(24:17):
that point versus a person who's had three two year
jobs in a row. Now you have to Now it
starts to be what story does your career tell? And
that's what I would add, because you want to picture yourself.
You're now interviewing for a new job beyond the one
that you took by accident. You've got to explain yourself.
(24:38):
You've got to explain your career. And it's perfectly okay
to say they contacted me it sounded like exactly what
I wanted. When I got there, I realized that lava
blah blah blah. I've done a lot of thinking and
now I know exactly what I want and which is
why I applied for this role. And so that is
just that's a good explanation. But if you are somebody
(25:02):
who has a history. If you are somebody who has
a history of jumping without really thinking about what I've done,
and therefore you have kind of a checkered history, you
probably need to take a breath and build up, build
up some capital there where you are, so that as
you move to the next thing, you've got a better
story to tell. So it's kind of a big fat
(25:22):
It depends. It's really what does your whole career story
say about.
Speaker 1 (25:25):
You, Julie. I want to go back to the situation
where somebody's, you know, considering a move, they haven't pulled
the trigger yet, and they're wondering how to evaluate this.
And I'm going to make an assumption here. You correct
me if I'm wrong. Oftentimes people just haven't been coached
on how to walk into that, you know, the boss's
office or the executive suite, and just be clear about
(25:47):
what you love about working where you are. A couple
things that you would like to see tweaked. And I think,
especially in today's labor market where it is really hard
to find good, seasoned, hard working people, aren't people amazed,
you know, if if they're coached by someone like you
on how to go in and broach that conversation. Oftentimes
(26:09):
you can walk out of that office, you know, if
if you're if your requests or reasonable, getting exactly what
you really need to be truly happy where you are
instead of making a completely you know, new move and
complete jump to a new company. Am I am I
on target there at all?
Speaker 4 (26:27):
Yes? A very much. So we always say try to
fix it where you are first. Yeah, because jobs are
as painful, and transitioning to a new, unknown job, as
exciting as it may sound on the surface, can also
be really painful and surprising. And so getting it doing that,
doing that clarity, that looking at everything that's on your
plate and saying and really saying, what do I like
(26:52):
about my current role? What are the things that if
I had a magic wand and can move them off
my plate, I would What would I like to see
more of less of in my role? And how how
do I then approach that. Once you get clarity on that,
then you have a better Then you have a framework.
(27:13):
Then you have talking points to go in and say,
you know, I've been in this role as COO for
three years and what I really love is integrating new ideas,
new systems, new technologies and then working across the organization
to help implement those and bring those delights. I do
get to do some of that in my role, but
(27:33):
as I look at my next role, I would love
to be more involved in those types of initiatives. And
that's the kind of conversation that you should be having.
And we are so afraid to have those conversations because
we feel like it's going to make us look less
than committed or that we're going to automatically end up
(27:55):
on the layoff list. And you've got to assess your situation.
If you have the type of leader, do you feel
like it really is risky to have those conversations that
might be different than if you feel like somebody your
leader really is open to you, are valued, and your
leader is looking to retain you. I think it's up
to you to go in and begin that conversation about
(28:16):
what next might look like for you. Leaders are so
busy and yet they should be coming to you and
initiating these conversations, but they aren't because they're getting squeezed.
And I always say, the career fairy isn't coming. And
so if you want more or different out of your career,
start where you are. Try to get it where you are,
or at least put a plan together to get it
where you are. Especially in a job market like we're in,
(28:40):
that's always going to be the place where it's going
to be least stressful to move.
Speaker 1 (28:45):
That is great advice. Julie, you're listening to Simply Money
presented by all Worth Financial on fifty five KARC the
talk station. You're listening to Simply Money presented by all
Worth Finance Bob Sponsorer along with Brian James. Do you
have a financial question you'd like for us to answer.
There's a red button you can click if you're listening
(29:08):
to our show from the good old iHeart app. Simply
record your question and it will come straight to us.
Mark and Milford leads us off tonight. Brian. He says,
We've got several old tax lots in our brokerage account,
and I'm not sure how to unwine them without triggering
huge capital gains. How do you modernize a portfolio without
(29:30):
burning the tax house down? I love how he phrased that.
Speaker 3 (29:34):
Yeah, this is a common question, especially this time of years.
People are kind of taking stock.
Speaker 2 (29:37):
Of their overall situation and what changes should I make
by the end of by the end of New Year's Eve.
Speaker 3 (29:42):
Here, So when you're modernizing a.
Speaker 2 (29:44):
Taxable portfolio, you've got these old, highly appreciated positions. The
goals usually to separate what you want to own from
what you can afford to sell. There's usually kind of
four steps to this. First off, make sure you understand
what your embedded gains are. Think in terms of gain
per dollar sold. Two positions with the same dollar can
have very very different tax impacts, maybe if one has
a much lower cost basis, So don't necessarily think only
(30:05):
about the dollar positions, think about the cost bases of
what the tax it is. And in second, you're gonna
you're gonna want to upgrade through additions before you upgrade
through the actual sales, new savings, dividends, and interest into
parts of the portfolio you want to build before you
worry about selling and rejiggering the existing positions.
Speaker 3 (30:20):
That'll help the legacy positions gradually.
Speaker 2 (30:22):
Become a smaller percentage, and so that that's going to
help you modernize your portfolio. As you said before, before
you're actually creating taxable events. And then the third step here,
use that tax calendar to your advantage realizing gains in
controlled increments, harvest losses in volatile years. If things are
going way up and way down, then you're going to
intentionally fill your lower brackets during retirement, you'll want to
(30:43):
cap those gains to stay under the zero or fifteen
percent threshold. It is possible to do that and make
sure you're not generating much more income that'll push you
into higher brackets. And then finally, remember that appreciation itself
is going to create some flexibility. If a position keeps growing,
you can donate those shares to meet some chared goals
and you'll get a deduction on the back end of them.
So I hope that helps in a few steps there
(31:05):
for you to look at over the next couple of weeks.
Speaker 3 (31:08):
And so now we're going to move on to Brian
and Montgomery.
Speaker 2 (31:11):
Brian says, we've always reinvested these dividends, but now that
we're getting close to retirement, does it make sense to
actually use the dividends for income rather than just reinvesting.
Speaker 3 (31:18):
What's the tipping point? How do you how do you
know when it's time to make that decision?
Speaker 1 (31:22):
Well, Brian, great question. I would say the tipping point
is proactive tax planning. Here's what I mean. There are
some folks out there, and this is not a bad thing,
you who are just addicted to these, you know, reinvested
dividend programs, and they've used them for years, if not decades.
And you know, there's a saying out there that says, well,
you know, only spend your dividends and interest by no
(31:44):
means ever touch any principle or ever sell anything. And
and I know in principle that works. I mean, it
keeps you from drawing down your principle. But you asked
the point about, you know, the what's the tipping point here?
And my answer is proactive tax planning. Here's what I mean.
It might make some sense to actually, God forbid, have
a little bit of capital gains you know, going on
(32:06):
or recognition going on in your portfolio, because it might
allow you to move your overall tax rate that you
pay down. So, you know, depending on what the components
of your investment portfolio are and where you need or
want to derive your income from, sit down with somebody
and actually run the numbers and create a proactive income
(32:28):
plan that gets you the money that you need to
have while balancing the risk of your overall portfolio and
hopefully making this as tax efficient as possible. There's a
lot of options out there to consider. Make sure you're
at least evaluating all of your choices, all right, Olivia
in Blue ass says, we're starting to think about long
(32:48):
term care, but I've oh, I'm overwhelmed by how many
options exist. How do you decide between self funding, insurance
or some hybrid of the two.
Speaker 2 (33:00):
Well, this is always This is a combination of matching
your resources, your risk tolerance, and your control and make
sure that you understand what the needs are.
Speaker 3 (33:09):
You might be able to self fund.
Speaker 2 (33:11):
You know, there's a lot of people out there who
are actually in a stronger position than they've ever let
themselves believe. And when we do financial plans, frequently somebody
will say, okay, so we're in good shape right now,
but what if this happens? What if I need to
take on a long term care type of a situation,
And do I really need to layer on an extra
ten to twelve thousand dollars a month of expenses? Because
that is about that that's the cost of a nice day.
(33:32):
So with a comparison I always make here is let's
make sure that we understand what the real cost is
and what does it take away. So, in other words,
if the average stay in a nursing home, we're talking
end of life care, by the way, and we're not
talking Alzheimer's, your Parkins's Huntington type situation.
Speaker 3 (33:49):
That's very different.
Speaker 2 (33:50):
Those are eight to ten stays, and that is a
life changing event, but those are a.
Speaker 3 (33:55):
Little more rare.
Speaker 2 (33:56):
But for your average two and a half to three
year stay, you're looking at about ten to twelve thousand
dollars per month in a nice home for one individual.
So that's going to average somewhere in the three hundred
and fifty thousand dollars range. But the thing to remember, though,
is you're not necessarily layering those expenses on top of
everything else. If you've built a financial plan and you
know you've got your expenses out there, you know what
(34:17):
you spend. Well, remember you're not going to the grocery
store anymore, you're not traveling anymore.
Speaker 3 (34:21):
You know, you're not taking on the same lifestyle that
you are now.
Speaker 2 (34:25):
When we're planning for something that could happen fifteen years
down the line, so you know, it's very possible that
you could actually sell fund when you remember that that
this whatever that expense is, isn't necessarily layered on top
of everything else. But if that's not the case, then
you can consider traditional long term care insurance. That's where
you write a check, you know, once a year, and
it's kind of like term insurance. And then finally, there's
(34:46):
also something called hybrid insurance, which my favorite thing to
do is to take a cash value life insurance policy
and pull the cash out of it, move it via
a ten thirty five tax free exchange to another life
policy that also has a long term care writer. If
you've got the ability to look into that, I would
highly recommend considering considering doing.
Speaker 1 (35:04):
Those All right, good stuff Coming up next, I've got
my two cents from an actual client meeting I had yesterday,
one of these gen X couples we talked about earlier
in the show. I'm going to walk you through the
actual contents of that meeting I had yesterday and how
we got these people all set up and feeling good
about things moving forward. You're listening to Simply Money, presented
(35:27):
by all Worth Financial on fifty five KRC, the talk station.
You're listening to Simply Money presented by Allworth Financial on
Bob Sponseller along with Brian James. Now Brian, we spent
several minutes earlier in the show today talking about all
the dilemmas that the Gen X generation faces, and I
(35:49):
just wanted to share, you know, hopefully give people a
little bit of hope out there. You know, I wanted
to share the actual content from a meeting I had
yesterday with a couple that falls into that generation, and
you know, they want to retire in the next you know,
about a year and a half to two years, and
they've they've saved well, they've done a lot of great things,
and we've run the plan, maintained it for years and years,
(36:11):
and now that it's kind of starting to get down
to crunch time, they came in yesterday and just wanted
to take a look at the numbers because this whole
thing is turning from hypothetical into real now. And it
was an interesting meeting because the one thing I asked
them to do is take the next eighteen months and
really look hard and what they actually spend now that
(36:35):
the kids are through college and it's just the couple,
you know, we really wanted to find what their actual
lifestyle is and Brian, I get this response often. You know,
they're like, that requires a lot of work. We got
to track this and that and whatever. And then in
the next breath they're talking about something they call the
(36:55):
credit card game, where they they have two or three
credit cards, they pay them off every month, but they've
been playing this credit card points game where they they've
become experts, getting free meals at luxury restaurants, free flights,
you know, upgraded rooms on cruises. And my response is,
you guys are spending all this time and you've become
(37:18):
experts at playing the credit card points game, but you
won't take thirty minutes just to look at what you
actually spend every month. And kind of the you know,
they looked at me like, you know what, you're right,
we're kind of being you know, penny wise and pound foolish. Potentially, here,
the point I wanted to make is when we started
to look at subtle differences in spending up or down
(37:40):
when they retire, it makes a huge difference in the
viability of their long term retirement plan. And the meeting
ended with them agreeing with me that, yep, it does
make sense to take a look at this because we
don't want any surprises down the road, you know, by
going into retirement, assuming we're going to spend when we
(38:01):
really might end up spending. Why And that's a bad
time to make an adjustment after you've pulled the trigger
on retirement, Brian, any feedback? Did I do it right?
Do you have any other comments to add?
Speaker 2 (38:13):
I think my favorite thing that you did there, which
is what we've spent and I need this myself every
now and then. Right, sometimes we're all too close to
our own to our own forest, and we keep staring
at these individual trees. One little thing in that case,
it was their credit card, and there's nothing wrong with that.
Speaker 3 (38:27):
Look, I play I play.
Speaker 2 (38:28):
Some credit card games myself just to get reward points
and all that kind of stuff. Got to pay the
bills anyway, might as well get paid to do it.
But you're gonna put that much energy into it and
ignore the other sides of your financial plan, then yeah,
you might need somebody to pull you back so you
can see the whole forest a limit.
Speaker 1 (38:41):
So I think we all got a good chuckle out
of it. And these are smart people. They'll do the
right thing, all right. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC the talk
station
Tonight a simple phrase that could be the difference between
financial freedom and financial struggle. You're listening to simply Money,
presented by all Worth Financial on Bob's spondseller along with
Brian James. What is that simple phrase? The sooner the better?
And tonight we have some new data that explains all
of this. It all centers around the group of people
(00:29):
who are in the on deck circle Brian for retirement,
the gen X group.
Speaker 2 (00:37):
That's my group, Bob, So let's talk about the problem
that my generation has here.
Speaker 1 (00:41):
So talk about all the dysfunction going on with your group.
Speaker 2 (00:45):
Yeah, well, I don't think it's quite fair to label
everybody with a generational label and say that everybody's a mess.
But here are the common problems that are coming up
with with with this generation. By the way, this is
a generation we really never talk about because we're one
of the smallest generations there are. I read a study
a long time ago that said that basically looked at
(01:06):
over all the generations and when people are born and
all that kind of stuff, and therefore how long do
they have to be in control in terms of when
that generation would take control of Congress, that kind of thing,
and it was literally like an eighteen month period before
with gen X is quickly overwhelmed by this ensuing generations.
But we'll have our moment in the sun anyway. So
(01:26):
we were talking about gen X today because this is
the first generation that's going to be funding retirement largely
without private pension plans.
Speaker 3 (01:32):
So those are and I think of myself there.
Speaker 2 (01:36):
My wife and I are somewhat fortunate to have old
pensions from old jobs from million years ago, but not anymore.
But I do remember vividly my grandpa who worked He
was a facilities maintenance guy for what was then CG
and E now then Synergy and now Duke Energy.
Speaker 1 (01:51):
But we would.
Speaker 2 (01:52):
Fight as cousins to mark off the red xes on
his calendar, which were the day that he had his
thirty years of time in and was sixty five. I
think is how it worked. But anyway, that that kind
of countdown doesn't really exist for gen X because there
isn't really a clock unless you've built your own. Not
everybody has the same, you know, without a private pension plan,
(02:13):
it's basically whatever you've put together on your own. And
that's exactly what this generation is going through. And is
that with that as the measuring stick, you know, not
so good here. Gen X workers on average have saved
about a median of about one hundred and seven thousand
dollars in total household retirement accounts and sixty five hundred
dollars in emergency savings. This is coming from the nonprofit
(02:34):
trans America Center for Retirement Studies in collaboration with trans
America Institute, Big insurance company out there, a total of
two and ten have already or twenty percent have already
dipped into their retirement savings by taking a hardship withdrawal
or in early withdrawal. And these are people who the
oldest among us was born in nineteen sixty five. So
we're on the very very early edge of retirement here
(02:54):
and already dipping into retirement savings. That retirement balance compares
with you know, the estimated one and a quarter million
dollars that Americans generally think they need to retire comforty.
That one comes from Northwestern Mutual. So gen X maybe
has a bit of a tough hill to climb here, Bob, Well, let's.
Speaker 1 (03:10):
Get into why this is happening. And I always hate,
as you know, Brian, to paint with a broad brush
take a whole generation of folks and take the mean
or average numbers, and you know it's not always representative
of exactly everything that's going on here. But in reality,
let's talk about what this generation of folks has had
(03:31):
to endure. From an economic standpoint and just from a
family dynamics standpoint. Many members of Gen X graduated college
or high school during a recession. They got their first
jobs when four oh one k's were in their infancy,
you know, pre hating the Internet and lacking the educational
resources that at least some or maybe even many plans
(03:54):
offer today. And let's face it, from an investor confidence standpoint,
the Gen X generation, well, they had to endure the
dot com bust, the Great Recession, and the COVID pandemic.
Those are three really big gut punches, and that all
takes big swipes it what I'll call investor confidence. I mean, shoot,
(04:15):
when you see, you know, the market go down fifty
five sixty percent in very short order more than once,
you know over a decade, that's going to make you
scratch your head and say, wow, is it? Does this
really still work? Brian, and I think as a result,
auto enrollment in four oh, one k's maybe declined a
little bit. The auto escalation features of savings in those
(04:38):
four to one k's declined, you know, tack on high
student loan debt in some cases. And then you know,
a lot of these folks and and you you live
through this, and I know our clients, do you know
the Generation X folks are literally living in that sandwich
generation where they're trying to support their own live, their
(05:01):
kids and sometimes their parents and other loved ones. It's
a lot of stuff to take on, both emotionally and financially.
Speaker 2 (05:09):
Yeah, And I think all the generations have different experiences
for what they go through and for the things that
they point to as the formative experiences of their lives.
Speaker 3 (05:18):
And a lot of times that's in conflict.
Speaker 2 (05:20):
And I think really the conflict that Gen X has
between that and the prior generation comes from the i'd
say the eighties and the nineties, right, So we had
the nineteen seventies where we had stagflation, we had a
rough economy there obviously one of the rougher periods economically speaking,
and that was the formative time. That's when the Baby
Boom generation was starting to make its own. But then
(05:41):
the pendul swung back the other way, and we had
the eighties and the nineties where really nothing bad happened,
and that was the beginning of the really what has
become the technology boom over the past several decades.
Speaker 3 (05:51):
So I think we had a.
Speaker 2 (05:52):
One generation and the Baby Boomers that feels like that
did pay their dues in the seventies and were rewarded
with the eighties and the nineties, and Generation X is
looking at that and going, yeah, we've had twenty years
worth of chaos with the payoff periods have come with
massive market upswings, but only three four years at a
time before chaos ensues versus the straight twenty years of
(06:14):
really nothing scary happen.
Speaker 3 (06:15):
And that's nobody's fault.
Speaker 2 (06:17):
That's just how it works, and that's everybody's perspective in
terms of how they see it. And every generation likes
to think it's the one suffering the most. I think
every single generation out there, with the exception of maybe
the Silent generation, which is aptly named, has opinions on that.
Speaker 3 (06:30):
So but any case, yeah, I mean, everybody.
Speaker 1 (06:33):
Are you are you gonna be one of those Gen
xers that sit down with your kids and talk about
the woe is me? I had to walk uphill both
ways to school, three miles in the snow. Are you
gonna be one of those old curmudgeon folks blaming all
of your ills on someone else or the weather.
Speaker 2 (06:50):
I don't think so, but I guess what remains to
be seen. Maybe that'll happen, depends on the mood I'm
in that day that that conversation comes up.
Speaker 1 (06:57):
I don't know, all right, in this in this spirit
of controlling what we can control, and that's all we
can do is control what we can control. What are
the what are some of the things that we need
to talk to folks of any generation, including generation X,
on how to take ownership of your own retirement situation
and you know, get the trains back on the proverbial
(07:20):
tracks here and move us forward.
Speaker 3 (07:23):
Well, I think it's just like anything else.
Speaker 2 (07:24):
I mean, like you said, controlling what you can control,
and that that's true for absolutely anybody of any gender
gen That's generationally irrelevant because everybody has their own situation
to deal with. If you've got your own resources, your
own goals, and it simply means, Matt, understand what you are,
what you have available to and what you're trying to accomplish,
and that's all financial planning, right, So so step back
(07:45):
and understand, you know, what are my limitations, what are
my opportunities, my strengths, weaknesses, and so forth, and then
build some kind of financial plan out of that and
then operate accordingly. And the thing we shouldn't be doing
is trying to, uh, you know, follow some kind of
uh you know, a blueprint that somebody else has written
up for everybody to go do.
Speaker 3 (08:03):
It doesn't work that way.
Speaker 2 (08:04):
You have to understand your own situation, which is going
to be very different from that of other family members, neighbors,
and so forth, and then operate accordingly within those those limitations.
Speaker 1 (08:14):
So if you do sit down with a good fiduciary advisor,
which Brian and I highly recommend, and take you do
an assessment of where things are today. I mean, let's
face it, you really only have three levers to pull
at the end of the day. You can save more,
you can spend less, or you can work more years
or a combination of all three. And that's where we
(08:36):
get into some of the planning and when people actually
see some numbers and how pulling those different levers can
really move the needle in a hurry. That at least
gives people a track to run on, and oftentimes, Brian
gives them a lot more confidence instead of just flying
blind and hoping it all works out. And for folks
that are in their fifties, man, this is prime catchup time.
(08:58):
You know, to the extent you can handle it from
a cash flow standpoint, make those extra contributions, revisit your
acid allocation, Maybe take on a little bit more investment
risk to get a little more growth or juice in
your portfolio if your time horizon allows for that. Brian
talk about for folks in their sixties, a lot of
(09:19):
these folks are wanting to retire in the next five
years or so. What are some things those folks can
be doing well.
Speaker 3 (09:24):
This is the leading edge of gen X here.
Speaker 2 (09:26):
So now it's time to start thinking about how are
you going to optimize your social security timing? You know,
if you're if you're there's not there's there. There aren't
as many levers to pull here as there used to be. Right,
we're not talking about tricks anymore, about file and suspend
and all that.
Speaker 3 (09:39):
That's that's been gone for ten years. But that doesn't
mean there aren't.
Speaker 2 (09:42):
Decisions to be made when you're What you're trying to
do is optimize social security timing alongside withdrawals from your
investments from your portfolio, because in a given situation, it
may make sense to turn on social security early in retirement,
it may make sense to push it. And that has
everything to do with the taxation of the of the
other assets you have if everything you have is pre
(10:02):
tax because that's just where you set up your four
one K, that's where your retirement savings are. That itself
is the pivot point between when you should whether you're
gonna file for SoC security earlier versus later, versus if
you maybe if you focus more on the wroth you've
got tax free assets, or if you have assets outside
of retirement plans entirely in taxable type of accounts, then
(10:22):
that will push the that could push the social security
pens in one one direction versus the other. So we
do see all the time we have people who have
this who feel like they're behind and they leave after
having done a financial plan, you know, realizing they're actually
in a good spot.
Speaker 3 (10:37):
So give yourself a chance. If you're listening to this
show and.
Speaker 2 (10:40):
You're aware of all worth or or other financial education
resources out there. You're probably in better shape than you
already have. So give yourself a break. People who have
been seeking out that kind of information for a long
time usually have put themselves in a good place. They've
just never stepped back to look at the the you know,
forest instead of the individual trees.
Speaker 1 (10:59):
Yeah, and speaking of giving yourself a break, I mean,
this is a good time, you know, to throw out
a reminder here, Brian, of a topic we cover all
the time on this show, and that's just managing the emotions.
If you are in that Sandwich generation, and here's what
I mean by that, You know, you don't have to
carry the whole world on your shoulders if you get
out in front of this and communicate a little bit.
(11:20):
For example, if you if you feel just this moral
obligation to pay, you know, one hundred percent of the
cost of a private education for your kids, you might
have to pump the brakes on that a little bit
and compromise in the spirit of, you know, maintaining your
own retirement viability. Same thing with aging parents or other relatives.
(11:42):
You know, if people are expecting you to help, you
got to set a little bit of boundaries there to
make sure you don't, you know, impoverish yourself in order
to help you know, parents or aunts or uncles or
other relatives that you might perceive, you know, need some money.
So it's not just running numbers, it's you know, balancing
(12:02):
and managing the behavioral aspects of all this and all
joking aside. You know, there are a lot and a
lot of folks in this generation x UH generation that
are really uh carrying a lot of weight here, both
emotionally and financially, and sometimes working with a good financial
advisor is just that other set of eyes and ears
(12:24):
that can help you think objectively and again get yourself
in a good place moving forward. Here's the all Worth advice.
The earlier you act, the more options you'll have. But
even later in life, smart planning and smart communication can
make all the difference. Coming up next, one data supported
money move that could boost your happiness. You're listening to
(12:46):
Simply Money presented by all Worth Financial on fifty five
KRC the talk station. You are listening to Simply Money
presented by all Worth Financial on Bob Sponzell along with
Brian James. Hey, if you can't listen, to Simply Money
live every night. Subscribe and get our daily podcasts. And
if you think your friends or family could use some
(13:09):
financial advice, especially during this uh, you know, volatile, you know,
uncertain times that we live in, tell them about us
as well. Just search Simply Money on the iHeart app
or wherever you find your podcast straight ahead of six
forty three real questions from real people will weigh in
with insight hopefully that you can use no matter where
(13:31):
you are on your financial journey. Well, we all want
to be happy, Brian, I know I do, don't. Don't
you want to be happy?
Speaker 3 (13:40):
Yes, yes, I do, Bob, Thanks for reminding me of that.
Speaker 1 (13:44):
Well, talk to us about a new you gov poll
that found something very interesting when it comes to money
and how we use money.
Speaker 3 (13:54):
Well, I'm about it. This new poll came out.
Speaker 2 (13:56):
Instead of whopping, seventy two percent of Americans, including sixty
nine nine percent of high income earners, say they know
they'd be happier if they saved or invested more money.
Speaker 3 (14:04):
Now that I think is that is just a that's
just an earth shattering statement right there.
Speaker 2 (14:09):
But only about twenty one percent said spending would make
them happier. Spending more would make them happier. So this
is good in a sense of people were realizing I
think that they'd be happy that people are saying, I'd
like to know that I have a bigger cushion, and
it's maybe not so many say they'd like to be
spending more of that cushion.
Speaker 3 (14:27):
Just kind of a mindset saying.
Speaker 2 (14:30):
That I'd like to know that I've got a little
more shock absorber to kind of handle the crazy stuff
that like and throw at us from a pole. That
was done for market Watch of about twenty five US
adults in late October, and it was people with a
household income of more two hundred and fifty thousand dollars.
With those, they were more more likely to agree that
(14:50):
it was important to keep up in terms of saving,
though they were also more likely than average to agree
that it was important to keep up with spending. So
you know a little bit of I think we got
a lot opinions in there. But at the same time,
it's interesting that that we're pivoting more towards saving makes
us happier than spending. That is that is different than
what I have heard my entire life.
Speaker 1 (15:09):
It seems like, yeah, this reminds me of a cartoon
I used to watch when I was a kid, and
I can't even remember what it was, Brian, but I remember,
you know, it was a cartoon that had two little
kind of elves or voices, you know, standing on a
guy's shoulder. And what I mean is we always have,
you know, two voices in our heads, one thinking saying,
(15:30):
long term, man, I really should be saving and investing
in building for the long term. And then that other
voice is saying, yeah, but I really want to take
that trip. I really want a new car. I really
want the iPhone seventeen pro. You know. There there's always
these conflicting voices going on, and I think that's what
that study is getting at. I'm more interested in this
(15:51):
hearing from an expert, you know, who actually studies behavior.
And we're going to cite some comments from Arthur Brooks
and an actual Harvard professor and writer who studies happiness professionally, Brian.
And he says, there's five ways you could basically move
use money. You can buy things, you can buy experiences,
(16:13):
you can buy time, you can give money away, or
you can save it. And he says only the last
four of those five things actually brings happiness. He wrote
a summary of an article in a LinkedIn post earlier
this year, and his point is, hey, stuff, even if
it gives us that dopamine hit in the short term,
(16:33):
stuff always wears off. But saving money is progress, and
progress makes us happy, along with buying experiences and buying time,
which is what saving money ultimately gives us. What do
you say about that those comments from Professor Brooks, I
think those are pretty spot on myself.
Speaker 3 (16:52):
Yeah, I think it makes a lot of sense.
Speaker 2 (16:53):
And again, having done a lot of financial planning for
people where the big goal in life is that house
in Hiltonhead or the or I'm gonna buy myself a
nice car when I retire. Those when I hear, when
I hear those things not coupled with other greater, you know,
experience oriented or family oriented plans, I know that's somebody
who's probably not gonna wind up super happy if that's
(17:15):
the only thing they're focused on. But I want to
move on to the next thing he says here, which
which is he kind of determined that there is no
ideal savings rate for happiness, but the research suggests that
a golden mean exists between security and deprivation. So that's
a lot of fancy college talk for basically saying save
enough so that you feel secure, but not so much
that you are ruthlessly illiquid.
Speaker 3 (17:36):
Ruthlessly I liquid.
Speaker 2 (17:37):
I've never heard that phrase before, but I'm thinking of
people that I've met in my planning career who just
do nothing but save, safe, save, and just will not
spend and have their the main purpose for getting out
of bed is to go update their spreadsheet as to
how much money and whatever their investments did yesterday, and
there's really not much else going on in their lives.
I run across these people every now and then, and
(17:58):
they are just not the happiest people at all.
Speaker 1 (18:01):
Yeah, and on the flip side, we've got those folks
who really do need to be saving more and putting
more away. I mean, the last you know, data we
saw on the personal savings rating in the United States,
or the share of income left after spending and paying taxes,
was a very low four point seven percent in September.
And the analogy that comes to mind here, Brian, back
(18:23):
to your point of that finding that balance of feeling
secure or feeling ruthlessly I liquid, It's kind of like
you know, knowing you need to lose thirty pounds and
putting a goal out there that I'm gonna lose, you know,
seventeen pounds in the next twenty seven days. And boy,
you go off, you know, you know, you know, running
around the neighborhood six times a day or whatever. And
(18:45):
guess what. After about three days, you're exhausted. You say,
there's no way I can do this. It's not gonna
work for me, and you stop, you quit. And I
think the point that the Professor Brooks here is making
is small incremental changes in you know, implement over time
is what's really going to move the needle here. And
there are forces at play out there that make this
(19:08):
harder for people. Let's talk about what some of the
things that maybe might be getting in our way mentally.
And I'm talking about social media, Brian. It's a real
influence out.
Speaker 3 (19:19):
There, fear of missing out.
Speaker 2 (19:21):
Social media has made it easier than ever to measure
our own lifestyle against other peoples. But only seventeen percent
of respondents pulled by you gov for market Watch that
we referenced earlier, only about seventeen percent agreed that it
was important to keep up with our peers in terms
of spending, but at the same time, twenty eight percent
that it was important to keep up with them and
to keep up with their peers in terms of saving regardless.
(19:41):
I don't care whether you're keeping up in terms of
spending or saving. If you're paying that much attention to
other people, you're probably not going to wind up in
a happy spot anyway. Understand what your situation is and
what your goals are and focus only on that, and
get off of social media in terms of a measuring
stick for your own life.
Speaker 1 (19:56):
Here's the all Worth advice. Happiness for money is it
about what you by. It's about the security and options
that you build over time. Focus on goals that truly
bring you peace of mind. You've worked your way up
the ladder and you've perhaps made even some great money,
but opportunity comes calling in the form of an executive
(20:17):
position or a big promotion should you move up that
corporate ladder. We'll talk about the quote unquote executive dilemma
coming up next. You're 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
(20:38):
on Bob Sponseller along with Brian James, joined tonight by
our career expert Julie Bauki. Julie, thanks, as always for
carving out some time for us tonight. We want to
talk about something we're gonna call the executive dilemma, staying
put versus jumping to the next big, big thing. Let's
say you're in a great role right now. You love
(21:00):
your job, you're obviously doing very well at it, but
opportunity comes knocking. What's the right move and how do
you evaluate whether to make a move?
Speaker 4 (21:10):
Yeah, I can kind of speak in generality because I've
worked with a lot of people in this situation, and
the first question I would ask is why would you
consider this move? So, in other words, what are the
compelling things about this move? And sometimes what I find
when people start listing out compelling things more salary, you know,
a higher level title. My next question would be, are
(21:32):
you sure that those are the things that really matter
to you? Because it's very it's very ingrained in us
that jumping for the next big thing, more money, more
title equals more happiness and career satisfaction. But I know
for sure that's not true, and so when you look
at why did that appeal why did that role appeal
(21:54):
to you in the first place, and then ask yourself,
are those things that really matter to me at this point?
I always from a point of what matters most to
you right now in your life, and then bring the
career conversation into it. And because if you are going
to get that bigger title and more money, does it
also mean that you have to travel more?
Speaker 2 (22:12):
Does it mean you have.
Speaker 4 (22:12):
To work weekends? And how does that fit into what
your priorities are? And so it's so that's the big
question is why would you And then take a look
at what is it about where you are now that
might be sticking in your gut as to why it
even makes sense to look for something else? And what
are you missing where you are? If you could change
(22:35):
some things about your current situation, would that solve that?
Would that solve that? It's you're getting to move on.
But I think just a really good critical analysis of
the why behind both where you are, the whis and
the what both behind where you are and what the
opportunity is in front of you is really really important
(22:56):
because we can get super caught up in Yeah, but
it's a director title. Yeah, but it's a VP title
without really thinking about what am I getting up, what
am I giving up to get that? And then how
does that work against what my whole life priorities are
right now? So a career decision has to be made
on a bigger platform than in a vacuum.
Speaker 2 (23:16):
Julie, I think a lot of people learn the hard
way exactly what you just said, because we get this
so ingrained in us that I got it. If I'm
getting off of this position, well, clearly I'm fantastic. Obviously
they love me, and I should take advantage of these benefits.
But people do tend to learn the hard way that whoops,
maybe I caught my limit. Maybe I don't want that
next level because my other things in my life have
taken priority.
Speaker 3 (23:35):
So how do people unwind it?
Speaker 2 (23:37):
For those people who feel like they may have done
that in that position, how can what's what are some
ways to unwind that?
Speaker 4 (23:42):
Yeah, so you're saying like, if you've already taken that.
Speaker 2 (23:45):
Role, yeah, and you didn't, and you just didn't occur
to you that, you know what, I didn't really want
this extra level of work. I just didn't think it through.
I just thought it was another accomplishment.
Speaker 4 (23:53):
So the first thing, It kind of depends on a
lot of things. If you have so let's say you
have a very stable career history. You've worked a long
time at one place, and you've jumped to this other place,
and you've been there nine months to a year, and
you say, this isn't exactly what I thought it was
going to be. You can successfully and confidently pivot at
(24:17):
that point versus a person who's had three two year
jobs in a row. Now you have to Now it
starts to be what story does your career tell? And
that's what I would add, because you want to picture yourself.
You're now interviewing for a new job beyond the one
that you took by accident. You've got to explain yourself.
(24:38):
You've got to explain your career. And it's perfectly okay
to say they contacted me it sounded like exactly what
I wanted. When I got there, I realized that lava
blah blah blah. I've done a lot of thinking and
now I know exactly what I want and which is
why I applied for this role. And so that is
just that's a good explanation. But if you are somebody
(25:02):
who has a history. If you are somebody who has
a history of jumping without really thinking about what I've done,
and therefore you have kind of a checkered history, you
probably need to take a breath and build up, build
up some capital there where you are, so that as
you move to the next thing, you've got a better
story to tell. So it's kind of a big fat
(25:22):
It depends. It's really what does your whole career story
say about.
Speaker 1 (25:25):
You, Julie. I want to go back to the situation
where somebody's, you know, considering a move, they haven't pulled
the trigger yet, and they're wondering how to evaluate this.
And I'm going to make an assumption here. You correct
me if I'm wrong. Oftentimes people just haven't been coached
on how to walk into that, you know, the boss's
office or the executive suite, and just be clear about
(25:47):
what you love about working where you are. A couple
things that you would like to see tweaked. And I think,
especially in today's labor market where it is really hard
to find good, seasoned, hard working people, aren't people amazed,
you know, if if they're coached by someone like you
on how to go in and broach that conversation. Oftentimes
(26:09):
you can walk out of that office, you know, if
if you're if your requests or reasonable, getting exactly what
you really need to be truly happy where you are
instead of making a completely you know, new move and
complete jump to a new company. Am I am I
on target there at all?
Speaker 4 (26:27):
Yes? A very much. So we always say try to
fix it where you are first. Yeah, because jobs are
as painful, and transitioning to a new, unknown job, as
exciting as it may sound on the surface, can also
be really painful and surprising. And so getting it doing that,
doing that clarity, that looking at everything that's on your
plate and saying and really saying, what do I like
(26:52):
about my current role? What are the things that if
I had a magic wand and can move them off
my plate, I would What would I like to see
more of less of in my role? And how how
do I then approach that. Once you get clarity on that,
then you have a better Then you have a framework.
(27:13):
Then you have talking points to go in and say,
you know, I've been in this role as COO for
three years and what I really love is integrating new ideas,
new systems, new technologies and then working across the organization
to help implement those and bring those delights. I do
get to do some of that in my role, but
(27:33):
as I look at my next role, I would love
to be more involved in those types of initiatives. And
that's the kind of conversation that you should be having.
And we are so afraid to have those conversations because
we feel like it's going to make us look less
than committed or that we're going to automatically end up
(27:55):
on the layoff list. And you've got to assess your situation.
If you have the type of leader, do you feel
like it really is risky to have those conversations that
might be different than if you feel like somebody your
leader really is open to you, are valued, and your
leader is looking to retain you. I think it's up
to you to go in and begin that conversation about
(28:16):
what next might look like for you. Leaders are so
busy and yet they should be coming to you and
initiating these conversations, but they aren't because they're getting squeezed.
And I always say, the career fairy isn't coming. And
so if you want more or different out of your career,
start where you are. Try to get it where you are,
or at least put a plan together to get it
where you are. Especially in a job market like we're in,
(28:40):
that's always going to be the place where it's going
to be least stressful to move.
Speaker 1 (28:45):
That is great advice. Julie, you're listening to Simply Money
presented by all Worth Financial on fifty five KARC the
talk station. You're listening to Simply Money presented by all
Worth Finance Bob Sponsorer along with Brian James. Do you
have a financial question you'd like for us to answer.
There's a red button you can click if you're listening
(29:08):
to our show from the good old iHeart app. Simply
record your question and it will come straight to us.
Mark and Milford leads us off tonight. Brian. He says,
We've got several old tax lots in our brokerage account,
and I'm not sure how to unwine them without triggering
huge capital gains. How do you modernize a portfolio without
(29:30):
burning the tax house down? I love how he phrased that.
Speaker 3 (29:34):
Yeah, this is a common question, especially this time of years.
People are kind of taking stock.
Speaker 2 (29:37):
Of their overall situation and what changes should I make
by the end of by the end of New Year's Eve.
Speaker 3 (29:42):
Here, So when you're modernizing a.
Speaker 2 (29:44):
Taxable portfolio, you've got these old, highly appreciated positions. The
goals usually to separate what you want to own from
what you can afford to sell. There's usually kind of
four steps to this. First off, make sure you understand
what your embedded gains are. Think in terms of gain
per dollar sold. Two positions with the same dollar can
have very very different tax impacts, maybe if one has
a much lower cost basis, So don't necessarily think only
(30:05):
about the dollar positions, think about the cost bases of
what the tax it is. And in second, you're gonna
you're gonna want to upgrade through additions before you upgrade
through the actual sales, new savings, dividends, and interest into
parts of the portfolio you want to build before you
worry about selling and rejiggering the existing positions.
Speaker 3 (30:20):
That'll help the legacy positions gradually.
Speaker 2 (30:22):
Become a smaller percentage, and so that that's going to
help you modernize your portfolio. As you said before, before
you're actually creating taxable events. And then the third step here,
use that tax calendar to your advantage realizing gains in
controlled increments, harvest losses in volatile years. If things are
going way up and way down, then you're going to
intentionally fill your lower brackets during retirement, you'll want to
(30:43):
cap those gains to stay under the zero or fifteen
percent threshold. It is possible to do that and make
sure you're not generating much more income that'll push you
into higher brackets. And then finally, remember that appreciation itself
is going to create some flexibility. If a position keeps growing,
you can donate those shares to meet some chared goals
and you'll get a deduction on the back end of them.
So I hope that helps in a few steps there
(31:05):
for you to look at over the next couple of weeks.
Speaker 3 (31:08):
And so now we're going to move on to Brian
and Montgomery.
Speaker 2 (31:11):
Brian says, we've always reinvested these dividends, but now that
we're getting close to retirement, does it make sense to
actually use the dividends for income rather than just reinvesting.
Speaker 3 (31:18):
What's the tipping point? How do you how do you
know when it's time to make that decision?
Speaker 1 (31:22):
Well, Brian, great question. I would say the tipping point
is proactive tax planning. Here's what I mean. There are
some folks out there, and this is not a bad thing,
you who are just addicted to these, you know, reinvested
dividend programs, and they've used them for years, if not decades.
And you know, there's a saying out there that says, well,
you know, only spend your dividends and interest by no
(31:44):
means ever touch any principle or ever sell anything. And
and I know in principle that works. I mean, it
keeps you from drawing down your principle. But you asked
the point about, you know, the what's the tipping point here?
And my answer is proactive tax planning. Here's what I mean.
It might make some sense to actually, God forbid, have
a little bit of capital gains you know, going on
(32:06):
or recognition going on in your portfolio, because it might
allow you to move your overall tax rate that you
pay down. So, you know, depending on what the components
of your investment portfolio are and where you need or
want to derive your income from, sit down with somebody
and actually run the numbers and create a proactive income
(32:28):
plan that gets you the money that you need to
have while balancing the risk of your overall portfolio and
hopefully making this as tax efficient as possible. There's a
lot of options out there to consider. Make sure you're
at least evaluating all of your choices, all right, Olivia
in Blue ass says, we're starting to think about long
(32:48):
term care, but I've oh, I'm overwhelmed by how many
options exist. How do you decide between self funding, insurance
or some hybrid of the two.
Speaker 2 (33:00):
Well, this is always This is a combination of matching
your resources, your risk tolerance, and your control and make
sure that you understand what the needs are.
Speaker 3 (33:09):
You might be able to self fund.
Speaker 2 (33:11):
You know, there's a lot of people out there who
are actually in a stronger position than they've ever let
themselves believe. And when we do financial plans, frequently somebody
will say, okay, so we're in good shape right now,
but what if this happens? What if I need to
take on a long term care type of a situation,
And do I really need to layer on an extra
ten to twelve thousand dollars a month of expenses? Because
that is about that that's the cost of a nice day.
(33:32):
So with a comparison I always make here is let's
make sure that we understand what the real cost is
and what does it take away. So, in other words,
if the average stay in a nursing home, we're talking
end of life care, by the way, and we're not
talking Alzheimer's, your Parkins's Huntington type situation.
Speaker 3 (33:49):
That's very different.
Speaker 2 (33:50):
Those are eight to ten stays, and that is a
life changing event, but those are a.
Speaker 3 (33:55):
Little more rare.
Speaker 2 (33:56):
But for your average two and a half to three
year stay, you're looking at about ten to twelve thousand
dollars per month in a nice home for one individual.
So that's going to average somewhere in the three hundred
and fifty thousand dollars range. But the thing to remember, though,
is you're not necessarily layering those expenses on top of
everything else. If you've built a financial plan and you
know you've got your expenses out there, you know what
(34:17):
you spend. Well, remember you're not going to the grocery
store anymore, you're not traveling anymore.
Speaker 3 (34:21):
You know, you're not taking on the same lifestyle that
you are now.
Speaker 2 (34:25):
When we're planning for something that could happen fifteen years
down the line, so you know, it's very possible that
you could actually sell fund when you remember that that
this whatever that expense is, isn't necessarily layered on top
of everything else. But if that's not the case, then
you can consider traditional long term care insurance. That's where
you write a check, you know, once a year, and
it's kind of like term insurance. And then finally, there's
(34:46):
also something called hybrid insurance, which my favorite thing to
do is to take a cash value life insurance policy
and pull the cash out of it, move it via
a ten thirty five tax free exchange to another life
policy that also has a long term care writer. If
you've got the ability to look into that, I would
highly recommend considering considering doing.
Speaker 1 (35:04):
Those All right, good stuff Coming up next, I've got
my two cents from an actual client meeting I had yesterday,
one of these gen X couples we talked about earlier
in the show. I'm going to walk you through the
actual contents of that meeting I had yesterday and how
we got these people all set up and feeling good
about things moving forward. You're listening to Simply Money, presented
(35:27):
by all Worth Financial on fifty five KRC, the talk station.
You're listening to Simply Money presented by Allworth Financial on
Bob Sponseller along with Brian James. Now Brian, we spent
several minutes earlier in the show today talking about all
the dilemmas that the Gen X generation faces, and I
(35:49):
just wanted to share, you know, hopefully give people a
little bit of hope out there. You know, I wanted
to share the actual content from a meeting I had
yesterday with a couple that falls into that generation, and
you know, they want to retire in the next you know,
about a year and a half to two years, and
they've they've saved well, they've done a lot of great things,
and we've run the plan, maintained it for years and years,
(36:11):
and now that it's kind of starting to get down
to crunch time, they came in yesterday and just wanted
to take a look at the numbers because this whole
thing is turning from hypothetical into real now. And it
was an interesting meeting because the one thing I asked
them to do is take the next eighteen months and
really look hard and what they actually spend now that
(36:35):
the kids are through college and it's just the couple,
you know, we really wanted to find what their actual
lifestyle is and Brian, I get this response often. You know,
they're like, that requires a lot of work. We got
to track this and that and whatever. And then in
the next breath they're talking about something they call the
(36:55):
credit card game, where they they have two or three
credit cards, they pay them off every month, but they've
been playing this credit card points game where they they've
become experts, getting free meals at luxury restaurants, free flights,
you know, upgraded rooms on cruises. And my response is,
you guys are spending all this time and you've become
(37:18):
experts at playing the credit card points game, but you
won't take thirty minutes just to look at what you
actually spend every month. And kind of the you know,
they looked at me like, you know what, you're right,
we're kind of being you know, penny wise and pound foolish. Potentially, here,
the point I wanted to make is when we started
to look at subtle differences in spending up or down
(37:40):
when they retire, it makes a huge difference in the
viability of their long term retirement plan. And the meeting
ended with them agreeing with me that, yep, it does
make sense to take a look at this because we
don't want any surprises down the road, you know, by
going into retirement, assuming we're going to spend when we
(38:01):
really might end up spending. Why And that's a bad
time to make an adjustment after you've pulled the trigger
on retirement, Brian, any feedback? Did I do it right?
Do you have any other comments to add?
Speaker 2 (38:13):
I think my favorite thing that you did there, which
is what we've spent and I need this myself every
now and then. Right, sometimes we're all too close to
our own to our own forest, and we keep staring
at these individual trees. One little thing in that case,
it was their credit card, and there's nothing wrong with that.
Speaker 3 (38:27):
Look, I play I play.
Speaker 2 (38:28):
Some credit card games myself just to get reward points
and all that kind of stuff. Got to pay the
bills anyway, might as well get paid to do it.
But you're gonna put that much energy into it and
ignore the other sides of your financial plan, then yeah,
you might need somebody to pull you back so you
can see the whole forest a limit.
Speaker 1 (38:41):
So I think we all got a good chuckle out
of it. And these are smart people. They'll do the
right thing, all right. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC the talk
station
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