Let's Not Be Surprised

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Episode Transcript

(00:00):
The advice given on the following programdoes not necessarily represent the views of iHeartMedia
It's management and staff. Since individualsituations canon will be different, Please consider
this when exercising any options given byour guests. It's time to get your
retirement plan in order. Welcome tothe Empowered Retirement Show with Nick Toman and

(00:22):
Caleb Simbolac. Reach out to theEmpowered Financial Team now at six eight two
one two seventy three hundred or ifvisit their website empowered fm dot com.
Now here's your host, Nick Toomanand Caleb Simbolac. We'll happy Saturday everybody.
This is the Empowered Retirement Radio Show. This is your host, Nick

(00:43):
Toman along with Caleb Simbolac, herein studio every Saturday, helping or trying
to make your retirement better. Folks. If you're listening today and you want
to connect with us, you cando that in two ways. You can
call us during the show at sixeight two one two seventy three d and
remember if you call it storing theshow to request an appointment, please leave
your name and number because our staffis off on Saturday. But you can

(01:04):
call a six eight two one twoseventy three hundred, or go to our
updated website retire Madison dot com.Retire Madison dot com. I'm not sure
how long I can continue to sayupdated, but I'm I'm so excited that
we updated that this year. Plentyof good resources, articles, things to
check out. So go to retireMadison dot com. Caleb, how are

(01:26):
you doing on a Saturday morning?Yeah, I'm doing great. Yeah,
it's crazy. We're almostly midway throughAugust. Now we are midway through August,
and I still have that twinge aboutme in middle of August, even
though I've been removed from school forhow many years and you don't go to
school anymore, but there's still thatfeeling. I think that sticks with all
of us that we get to themiddle of August, and especially for schools

(01:49):
who start after Labor Day. Youknow you've got a few more good weeks
and then you're back in school.And for me, I think it's that
twine that the weather's about to turnat some point, because anytime after Labor
Day could snow six inches right inWisconsin, so it could be in October.
Just surprise, right, surprise thatI love that. That's a great
segue into our show today. Sokilled let me ask you this, think
about maybe the last four or fiveyears. What are things in your life

(02:14):
that you would consider big surprises,anything that has happened positive in your life.
That you woke him and said,boy, that was a really pleasant
surprise. Yeah, that my wifesaid yes to marrying me. There you
go, that's a surprise. Uhno, well kind of right. I
mean it's like in retrospect, yes, Okay, in the time, maybe
I was a little over confident.That's that's a good one. And I

(02:34):
think we all like a good ora positive surprise. What about the other
day the person that woke up Ithink it was in Florida that won the
lottery. Congratulations the billions, right, the billion dollars and whatever the case
was. I'm sure that was asurprise. I think back we were talking
about school when I was in collegeand maybe didn't study as hard for a
test. I went in, tooka test and then got the results and

(02:57):
sometimes they were okay, maybe yougot a ninety ninety said, well,
I was really surprised. I didn'tput a lot of effort into it.
But we can think about in ourown lives, ye, loving those little
pleasant surprises that come our way.Maybe it's the birth of our children.
Some people like to find out we'regonna have a boy or a girl.
I know when our kids were born, we didn't. It was a surprise,
and those are always fun things.So in our lives, it's good

(03:20):
to occasionally have that pleasant surprise.But what we don't want to be a
surprise is things that are going tohappen to you in retirement, especially when
when it comes to your money andyour retirement plan. Overall, we want
to eliminate or minimize all those thingsthat pop up that are surprises. Absolutely,
and there's a lot more surprises orjust things people don't consider when going

(03:43):
into retirement. Oftentimes we think,you know, even work in our entire
life, we've been saving up forthe pinnacle of these years and then it's
just going to be hunky dory,and we don't really do too much to
mitigate potential negatives, right, Andso when it comes to retirement planning,
you really got to be thorough.You really got to be checking all of
your blind spots, and oftentimes peopledon't really understand what their blind spots might
be and get stuck with a negativesurprise and it's not ideal. Right,

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So that's what we want to talkabout today. Think about in preparation for
those out there listening that are goingto retire in maybe five years, maybe
two years. You've retired and yousee some of these things pop up that
you didn't expect, the unexpected.It's always going to happen, no matter
what, no matter how well youprepare. But our goal is to help

(04:26):
mitigate some of those things that whenthey do happen, they're surprised. It
doesn't derail your vision for happy retirements. So that's why I would encourage everybody
stay with us throughout the show.Should be a good hour together. As
always, we're here to make yourretirement better. This is Nick Toman Caleb
Simbolack, the Powered Retirement Radio Show. We'll be back on the other side,
talk about helping you not have aretirement full of surprises. Welcome back

(05:00):
everybody to the Empowered Retirement Radio Show. This is Caleb Simbolat here with Nick
Tomans CFP. As always to makeyour retirement better. If you want to
get into contact with us, youcan reach us at six eight two one
two seventy three hundred that is sixeight two one two seventy three hundred,
or you can go online to ourwebsite at retire Madison dot com. I

(05:21):
want to bring some awareness. Weteach retirement courses at MTC and upcoming this
September and October, we're going tohave more courses, so you can check
out our website for the times ofthose. But basically you're going to spend
four hours with us, split upinto two different nights where we just do
a deep dive about the ascenters ofretirement, hopefully providing you the tools that
you need to take the next stepsand understand what's going on. That's right.

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People have asked about those retirement courses. We did a couple of them
in the spring and very well attended, very positive and for people I'll just
give you an example for people thatare planning to retire within three to five
years, maybe even six seven years, whatever, it's never too early to
start thinking about it. Yeah,there's business owners that can get some value
from that if you're looking to transitionaway or maybe sell a business and want

(06:06):
to know what that next phase oflife's all about. And there was some
people that attended that had retired withina year or two, and it was
very much an eye opening opportunity tothink through some of the things maybe they
didn't consider when they attended. Sothere's something there, I think for everybody.
Yeah, who falls into one ofthose categories. So if you go

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to our website, you can registerfor one of those dates in September October,
or you could just call our officeand we will register for you.
Still. But we got a greatshow today, Caleb bit. In that
first segment, we were using thetheme of surprises, and everybody likes a
good surprise, but not necessarily whenit comes to your retirement. So let's
just talk about some of the thingsin retirement're just going to list them off

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and then we'll start going through themone by one. That can creep up
and if we're not prepared accordingly,can catch us off guard. Absolutely.
So the first one, and thisseems to be one. You know,
we have a lot of people comeinto our office. A lot of people
don't take this one into account,but it is the emotional aspect of retirement.
Okay, what are you gonna doto fill your time? Do you
have any hobbies, what do youwant to do? You know, and

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a lot oftentimes people come in andyou know, they know that they want
to retire, they don't know whatthey want to do a retirement, and
so oftentimes they don't have things tofill their time and miserable. They're kind
of sad and miserable in retirement becausethere's nothing for them to do and it
wasn't what they expected. So theemotional aspect of retirement on the objective side
as well, when it comes toplanning and strategizing your retirement plan, because

(07:30):
you do not want to be justtake in the ebbs and flows and you
know, the gusts of win withthe markets. You want to have emotional
stability when it comes to your financesas well. Yeah, and that's a
very looked overlooked, I'm sorry componentfor many people. They don't do intentionally,
but it just is you get tothose those days and you have to
fill your time. We're going totalk about that and a few other things,
and we're going to get to thefinancial part of retirement, and I

(07:53):
think a big one, Caleb isconsidering those areas in your financial life that
at one point we're kind on autopilot, such as earning a paycheck now you're
gonna have to create a paycheck accountingfor your health insurance, health issues in
general, a state planning. Howdoes that look? Taxes just investing differently,

(08:13):
things that maybe we didn't think asmuch about. We set them and
we've forgot them. We just leftthem now not so much. So we're
going to talk about that cash flow. That's a big one. If you've
ever listened to this show, we'realways talking about the cornerstone of retirement and
that is cash flow or what isyour income going to look like? Right?
And so a lot of you listening, you know, we live in
Madison's let a pensions in this area. But if you don't have a pension,

(08:35):
how are you going to replace thatguaranteed paycheck that you've had coming in
and your tire working years up toretirement. How are you going to replace
that to know that you have incometo sustain your quality of life. That's
right, and that's an important ora cornerstone of any type of retirement plan.
And then we'll touch on in thelast segment taxes thinking about those a
little bit differently, retirement, Whyshould we think about them differently? What

(08:58):
we can do? And then whatyour state wishes. So we're gonna tackle
those one at a time. Solet's start with that emotional side of retirement.
As you said a couple of minutesago, it is a very overlooked
part of this whole process. Butit shouldn't. Because you don't have a
vision or a dream, then howis it that you can structure a retirement

(09:18):
strategy or a plan. It's allabout having that dream or visualization of what
that next part of life is goingto look like for you. Absolutely,
and you know, I would saythis is something a lot of people don't
even prioritize, right. People don'tthink about wanting to be you know,
they think they're just going to behappy overall, right. They don't plan
on how that's actually going to playout, whether it's in their hobbies,

(09:39):
whether it's in their finances, andso it just gets entirely overlooked. A
lot of people just end up stayingat home, right. It maybe the
markets down and they'd haven't prepared accordinglyfor their income plan, and so they
just end up staying at home.They're not able to take the vacations they
want them, are able to seetheir grand kids or their family members,
and so understanding that you want toplan to ensure or to try to ensure

(10:03):
that you're going to be mentally happy. Right, that's right, that's huge,
that's huge. You mentioned those things, those fun things you had that
on your list, the hobbies thattravel, even things such as starting a
business. You've always dreamed of apart time business. Maybe it's something completely
different than what you were trained in. I had somebody come in years ago

(10:24):
and wanted to take that woodworking hobbyof his and in retirement start a little
bit of a business. It couldbe part time working doing something you really
enjoy, or the opposite, Calebis having absolutely zero schedule. I've had
people say I just want retirement tobe about not having to get up and
do anything. Whatever it is.The important thing is to one think through

(10:45):
this and again, when you havea vision and it starts in your head
to be mapped out that vision,that dream, then you can start filling
in the pieces, start designing thestrategies. On other shows, we've talked
about the dangers of one maybe spendingtoo much, but the opposite is true,
is not spending enough or enjoying retirementin its entirety because your vision again

(11:09):
doesn't match up with some of thestrategies to put in place. Absolutely,
we talk about it, you know, putting purpose to your money. There
you go. You have to havesome objectives in mind when it comes to
retirement. If you don't have anyobjectives in mind, whether it just be
personally, you know, how doyou know what you're going to purpose your
money towards? Right? How doyou know you want to set aside a
certain amount of funds so that youcan travel in this year with your family?
Right? How do you know thatyou're going to set aside a certain

(11:31):
amount of funds that you can startthat business that you wanted maybe like word
working, etc. But when itcomes to purposing your money, there has
to be a goal in mind.That's right. And the bucket that you've
created, you've been good savers forall these years, it should have a
purpose. I'll give you another example. Some people really want to and feel
it's important to leave a legacy tokids and grand kids, and there's nothing

(11:52):
wrong with that. Then there's theopposite where there are folks that will say,
I want to have a good retirement, I want to be able to
spend freely and whatever is available toleave. I'm okay doing that. Neither
is right or wrong, it's justthat is going to help dictate in many
cases, how you separate your money, how you purpose your money, the

(12:13):
strategies to put in place. Somethingas simple as that is, do I
have a legacy wish? Do Inot have a legacy wish? And then
fill in the rest the hobbies,the travel, Do I want to work
part time until I'm sixty six?Do I want to have zero schedule?
The point here and all of thisis to think through this, discuss this,
and then from a year to year, your thoughts may change. You
know, healthmate, dictate what happensin your life, family dynamics. You

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know, many of the people thatcome in, they're in that spot where
their kids have just graduated from college, but now their parents need assistant.
So you're always changing and having topivot. Folks, if you're listening to
this and you're thinking, you wantsomebody to come alongside. If you We've
helped a lot of people who arelike, I don't know what I want
to do in retirement, I don'thave any hobbies, and they actually fight
back a little bit and they're like, I just want to survive. I

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know you haven't gotten in the cuttyyet, but folks, if you're thinking
you want somebody to come alongside everyin retirement, you can give us a
call at six o eight two andtwo seventy three hundred. And you can
also, Caleb, if you wantgo to our website or retire Madison dot
com. You can do both.And as I said at the top of
the show, if you do callus and would like to meet with one
of our advisors for about an hour, you'll have to leave your name and

(13:20):
number, and then on Monday,Caleb, you'll reach back out to him
to get that on the calendar.But let's just be clear, if you
come in have a discussion with us, is really an opportunity over a cup
of coffee for us to talk,get to know each other some before we
can decide on any next steps.In that first visit together at last about
an hour, maybe an hour andfifteen minutes, it's a chance for you
to share with us what's on yourmind, what keeps you up at night,

(13:41):
what are some of the things thatyou've thought about, And maybe as
you talk with us, we getthose juices and those thoughts flowing. We
have a good conversation and a dialogue, so you can really start to hone
in on what that vision and thatdream of retirement's all about. It's helping
create that vision first and then fillin the pieces identifying the gaps. So
if you spend an hour with us, the only decision we're going to make

(14:05):
during our time together is should wego on to a second visit. And
by the way, both these visitsare complimentary. You're not paying us to
come in and do this. Wesit down, we get to know you
a little bit, and in thatsecond meeting, if we decide to do
that kill, that's where we digin. We'll start asking for a little
homework. We'll start looking at thefinancials, figure out where some of those

(14:26):
gaps maybe, and then we gettogether and talk about that. And if
at that point, if what youneed in your life right now is what
we do and that's what you want, then we can move forward and formalize
the client advisor relationship. But it'sreally a good hour we spent together and
if anything, it will give yousome peace of mind knowing I'm on the

(14:46):
right track, or if we're notthe ones to be able to assist,
we can always direct to somebody thatit's a better fit. So call us
today six eight two on two seventythree hundred if you'd like to schedule that
time together. Yeah, I thinkthat's a good point. It's no,
we're no, we're low pressure peopleright at the very least. We can
just help guide you in the rightdirection. That's what this is all about.
But I do enjoy those first fewtimes together because this is the things

(15:09):
we talk about. We can andthere are times to dig deep into the
finances. Certainly, that's a bigpart of retirement. There's things, as
I said a few moments ago,that no longer can just be automatic.
They cannot be on an autopot Wehave to figure those out, figure out
where those blind spots are. Butif you can define for us and define
for yourself, especially if you're married, what life's going to be about.

(15:31):
Maybe you're now an empty nester andyou're just starting to explore those hobbies together
and you want to maybe reconnect yourspouse. You've been going a million miles
an hour. I know, whenyou have kids and you're going through college,
life gets hectic and it's gonna looka lot different when you're in your
late fifties and sixties and seventies.So let's talk about what that's going to
look like and then help try tofill the gaps. And you know,

(15:52):
Nick, a lot of those gapsare going to come from things that have
been autopilot throughout the entirety of people'slives. Right. So, like income,
we talked about it a little bit, how are you going to replace
your paycheck when it comes to investments? Okay, are you still going to
be as risky as you have beenin the past. You're going to try
to be a little bit risk adverse. Maybe you're going to purpose some of
your investment money. Healthcare taxes.You have a big nest egg in which
you have a lot of tax liability. How are you going to reduce that

(16:15):
so that the government doesn't get allof your money? Right? Healthcare,
that's a big one. People don'tthink about it. People don't want to
think about being putting a long termcare facility. Long term care facilities are
very expensive. What are you goingto do about it? So there's a
lot of things they've just kind ofbeen on autopilot that people don't really think
about how they're going to fill thatgap. And they don't plan for it.
That's right, and a lot ofthings are going to surprise you.

(16:36):
And that is the theme of theshow is we love a pleasant surprise in
our life, but not necessarily whenit comes to a surprise in retirement.
So that's going to be what we'regoing to continue talking about through the remainder
of the show, is how tomitigate some of that risk and not be
so surprised, help fill those gapsand make your retirement better. That's what
we do. That's what we dohere every Saturday. That's what we're going

(17:00):
to continue to do when we teachour retirement courses coming up here in September
in October. By the way,folks, if you do want to attend
one of those upcoming courses, goto our website retire Madison dot com.
We have the dates listed in Septemberand October. A good time, good
information for everybody who's approaching that nextpart of their life. So folks,
join us on the other side,we're going to continue to talk about ways

(17:22):
to not be surprised in retirement.This is Nick Tooman Caleb Simbolac, the
Empowered Retirement Radio Show here to makeyour Retirement Better. Are here in jot
Welcome back everybody on a Saturday morning. This is Nick Tooman Caleb Simbolac,

(17:45):
the Empowered Retirement radio show, hereto make your retirement Better. You can
reach us at six O eight twoone two seventy three D. Visit our
website at retire Madison dot com.You know, Caleb, we've been talking
throughout the show about everyone liking agood surprise, a pleasant surprise, but
not necessarily in retirement because we wantto create that vision and that dream and

(18:07):
we don't want to derail that visiondream. And one of the cornerstone pieces
of a good retirement plan as youprepare is having that paycheck, going from
the years of earning your paycheck tonow creating a paycheck. So let's talk
about that because I think it isin our mind and always will be the
cornerstone of a good retirement plan.Yeah, in retirement is all about income

(18:33):
planning, right, Like how manypeople want to lower their quality of life
for no reason. You want tomake sure that you have a guaranteed paycheck
coming in, right, that's moreor less principal protected. It's it's not
going to EBB and flow, right, it's not going to be a thing
of maybe you're withdrawing from your investmentsand you have a you're drawing four percent
a year for your income to makeup for no longer having a paycheck.
Well, it's okay if the market'sdown thirty percent. Are you going to

(18:55):
be comfortable sustaining your quality of lifeand withdrawing from your investments and at a
loss to do everything that you wantto do, And so making sure that
you are getting income from somewhere whereit's predictable and it's guaranteed that you can
plan out your year, your yearsaccordingly's right. It's going to be there
is the driver of retirement. That'sright. And I think over the last

(19:15):
twenty years, Caleb, based onthe people that I've had the chance to
serve and to talk with, thatmindset shift has happened where if we think
about our parents and their retirement,it used to be they retired, they
would collect some social security, manyof them had a pension, and they
would ride off into the sunset andlife was just a little bit simpler.

(19:37):
And in the last twenty thirty fortyyears, that burden of creating a paycheck
has now shifted from the employer whoprovided those pensions to the employee or the
business owner that sells their business totake their resources, all the wealth that
they've created and now turn that intoa regular stream of income for the next
twenty five thirty or so. Ifwe're living long, we're having to make

(20:00):
that money last longer. And sothat's why we emphasize the cornerstone of a
good retirement plan is income. We'renot discounting investments, and we're not discounting
taxes or anything else. But ifyou don't know what your budget and your
cash full looks like, everything elsegets a little bit disjointed. Yea.
And so let's start with just gostep by step through some of the principles

(20:25):
in a good income plan or agood income foundation. And it does start
with a budget. And I knowthat's not very sexy, and I know
everybody wants to talk about investments andthat's kind of a boring. Well,
okay, budget, nick, Iget it. I know what I spend,
it's in my head. But havinga written budget. I was telling
you before the show that you know, our philosophy about having a budget or

(20:49):
just preparing for retirement differs from guysmaybe like Dave Ramsey who say a lot
of good things, but there's alot of things that we differ on.
But one thing we can agree onis to understand your money is going yes
to the dollar and have that writtenout, because if you don't understand,
then how do you even begin tofigure out what your income needs to look

(21:10):
like. So for the purpose ofwhen do you take yourself security benefits?
What kind of a pension election doyou have? What other tools would you
use to fill the gap? Youneed to understand that first, folks,
and then everything else can jump offthat. Absolutely, you need to know
what you need to uphold your qualityof life, right if you don't know
that, and a lot of people, honestly, the amount of people that

(21:32):
come in to our office that havea set and established budget, it's not
too high. And sometimes it's intheir head right and they'll say, I
know it, but it's not written. But it's not written down. And
like we said, income is thedriver of retirement, So you need to
know how much money that is guaranteedthat is going to be coming into you
like a paycheck, that is goingto uphold your quality of life. Because

(21:52):
again, the emotional aspect comes intothis. You want to be happy in
retirement. You don't want to reduceyour quality of life drastically, and to
not do that, you need toknow how much income you need to replace.
That is exactly right. So onceyou do that, the second thing
is understand your puzzle pieces. Bythat, I mean understand the tools in
your tool belt, the things thatyou have, the resources that you've accumulated.

(22:15):
What is your social security going tolook like? You can go on
to the Socicurity site and get aprojection of what that's going to be at
full retirement age if you delay totaking it until age seventy. Do you
have a pension many people in thisarea do have a pension. Do you
have investments? Do you have annuities? Do you have life insurance? Do
you have cash? Do you havehome equity? What are your pieces?
Lay them out on the table literally, so okay, these are the things

(22:37):
I have. It's going to bedifferent from my coworker. Yeah, we
go to our coal workers all thetime and say what did you do?
When did you take social Security?But their puzzle pieces are different. So
quite simply, one, you establishedyour budget. Now two you lay your
puzzle piece your financial puzzle pieces onthe table number three. Where do we
go from there? You need todetermine your income security score. Right,

(23:00):
So we've been talking about predictable guaranteedincome a lot. Why do we say
that because you don't want to bea spending way over your means. You
want to make sure that you're coveringyour expenses. Okay, when it comes
to retirement, Like guys, you'dbe surprised how much more maybe like a
thousand dollars a month has on yourcash flow over the course of twenty years.
That's right, Okay, So makingsure that you have guaranteed income that

(23:22):
is covering majority of your fixed expenses, etc. That's really important, That's
right. An income security score ifwe wanted to find that is the amount
in your budget or monthly budget thatis covered by those sources you use the
word guaranteed or we could say predictablesources of income as well. What percentage
of that budget is covered in thatway? So, for instance, if

(23:45):
your budget is five thousand dollars amonth of expenditures, fixed expenses, your
known discretionaries, I go to dinnerevery Friday with my spouse, whatever,
how much of that is a threethousand, four thousand, two thousand is
covered by your pensions, your socialsecurity, maybe have annuities. What ever,
is predictable and reliable, not random. I'm not talking about your investment
accounts. Then you can go towork determining to fill the gaps. So

(24:07):
if you have three thousand dollars ofpredictable income every month and your budgets five,
you have a gap of two thousand. Now you can figure out what
tools work best. And I wouldencourage everybody to shy away from taking that
two thousand dollars from an account that'sfluctuating and it's random, because if you
happen to have to take that moneyin a down year in the market's down

(24:29):
twenty percent, you're not locking inthose losses. And I get up until
twenty twenty two. We've had athirteen year run of good times. And
if you're making ten twelve percent everyyear, it's not as critical that you
avoid that variable account for distributions.But if you have one or two or
three bad years early in your retirement, it can devastate you. Yeah,
and if you made the point alittle bit earlier, it's going to look

(24:51):
different for everybody. There is noSiller bullet. There is no general rule
that is going to apply to everybody'ssituation. So, folks, if you
have a lot of puzzle pieces,you don't know how to fill the gap,
maybe you even just need setting abudget. You can give us a
call at six O eight two andtwo seventy three hundred, or you can
inquire online or retire Madison dot com. We talked a bit about it in
the previous segment. It's really justa forty five to one hour time slot

(25:12):
where you come in, we getto know you. We're low pressure people
at the very least. If we'renot a fit, we'll just send you
in a direction that is going tobe beneficial for you. So give us
a call at six eight two andtwo seven three hundred, or like I
said, go online to retire.And the thing is, and that's a
great point, Caleb. The thingis, we can do these visits,
these get to know you meetings inperson at our office out near Greenway Station,

(25:36):
or we can do a zoom meetingif it's more convenient. We love
for the folks to come in andwe get to meet him in person,
and if at the end of thattime together it seems as though what we
do is what you need and whatyou want. Then we're going to ask
you to come back a few weeksafter yea and in the interim we're going
to dive deep into the sandbox withYou're going to look at the finance.

(25:56):
That's where we lift up the hoodkind of think of a car. You
lift up the hood, see what'sgoing on, figure out where those gaps
are, tell you where those are, give you some ideas as to how
we'd fill those, and then decidehow we can work together in the future.
So, folks, we have agood show going. We encourage you
to stay with us. For thelast segment. We're going to continue to
talk about those surprises in retirement,how to mitigate some of those things.

(26:18):
This is Nick Toman Caleb Simbolac,the Empowered Retirement Radio Show here to make
your retirement better. Welcome back everybodyto the Empowered Retirement Radio Show. This

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is Caleb Simbolac with Nick Tomans CFPas always to make your Saturday and retirement
better. Folks. You can reachus at six oz eight two one two
seventy three hundred, or you cango online to retire Madison dot com Today,
we've been talking about surprises. Inthe beginning, we talked about good
surprise, surprising with my wife sayings, But the main subject is not wanting

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surprises in retirement and how you canplan accordingly to ensure there aren't. We
talked about having a purpose in retirement, right, the emotional aspect, what
do you actually want? Do youwant to have a hobby that where you
start a new job? Right?Do you want to go travel all the
world? Right? You have tohave specific goals and minds that you could
purpose your money accordingly. And thenwe talked about the driver of retirement,
which we believe to be as income, having that predictable check coming in so

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that you know it's there and thatyou can uphold your quality of life.
So now we're going to finish outtwo things that I know people overlook because
when you think of money and youthink of this next part of life and
enjoying all those things and traveling inhobbies, it's about the investments and it's
about the income and the emotional pieceonce you visualize what this is going to

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be all about. But let's getinto the nitty gritty and some of those
areas that if not dealt with theright way, can creep up and be
a shock down the road. Andthe first one is going to be taxes.
Yeah, and taxes in retirement.I think Caleb has been something we've
been taught to think that as weget older and we leave our career are

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going to automatically be lower. AndI want to stress don't get fooled into
thinking automatically that taxes are going tobe lower for several reasons. Okay,
let's talk about why we think there'sa good chance, a real possibility,
that taxes will not be lower insomeone's retirement. Yeah, so people think
I'm not working anymore, so I'mgoing to be paying less in taxes.

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Well, what's the problem with that. If you're paying taxes, paying less
in taxes, then you're not bringingin as much income as you previously did,
which means what your quality of lifeisn't being sustained in retirement. A
really key aspect of retirement is sustainingyour quality of life. Nobody wants to
take a seventy percent pay cut justbecause they're not working anymore. Right,
If somebody's been taught that automatically whenthey retire, they're going to take a

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twenty percent pay cut and they're okaywith it. Do you really want to
be okay with especially early in thosegogal years. We see many people that
are retiring early in their early sixties, late fifties, early sixties. Those
are those go go years. Everyday is a Saturday. In retirement,
you spend more. Where are youtaking that money from? In most cases
when you retire, deferred your nestegg which are accounts that have tax deferral

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to them, meaning when you takethem out, it's taxes ordinary income.
So the idea you're just going totake this pay cut, I'm going to
spend less, so my taxes aregoing to be less. That may or
may not be true, But likeyou said, nobody wants to automatically have
to take the pay cut. Thesecond thing is just think of all the
things in our country that we haveto pay for. We talked about this

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last week, the debt clock thatcontinues to grow by the minute, and
we're over thirty three trillion dollars ofdebt. Point being that when the current
tax rates sunset after twenty twenty five, there is a real possibility that those
tax brackets do go up and theydo increase just because we have things that

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we have to pay for. It'sjust not sustainable to spend the way we
do and not increased taxes. Soyou might not have been budgeting for that.
But if we have a tax bracketincrease along with not taking a pay
cut, that could cause a realchallenge. Yeah, and folks, don't
don't take the trap that maybe aspecific political candidate is going to leavi at
you of all your tax burdens,because the reality of it is so we

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abolished the debt ceiling back in June. We have already printed over one point
two trillion dollars and tack that ontoour debt and there is still no ceiling.
It is only going to keep gettinghigher. Well, it's debt,
somebody is going to have to payfor it, like you said, with
the tax rising setting in twenty twentyfive, and are spending going up dramatically

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higher and there's no end in sight. Right, we're just containingly printing and
spending. Who's going to be onthe hook for that? You and I
the taxpayer, right, and soplanning accordingly and making sure that you're not
going to put yourself in a positionwith right, your nest egg. You
have loved deferred money that the government'snot just going to be in a position
where they can take all that isextremely important. It's tax infestations. So

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we've taken advantage of the tools availableover the last thirty forty years, the
four oh one case that our employershave offered us, the four oh three
bs. Those are fine tools.But if you then don't start transitioning and
preparing and what we call tax engineeringyour wealth properly, this could be a
nightmare down the road. So understandfirst and foremost your budget and your income

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needs. Once you established that,we talked about this in the last segments,
so go back and listen to it. Once you've established that, then
you can begin to tax engineer yourwealth by that. What I'm talking about
is doing things like roth conversions.Most people listening have heard roth conversions.
Some have done that, but mostpeople have heard of that term, and
that is simply shifting money from yourtax to fur bucket, your traditional four

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oh one ks, or your irasin this case, into a roth ira.
Which the advantage of that row ira, just in real simple terms,
is that if done properly, whenyou distribute that money in the future,
you've already paid the tax on it. It's tax free, and the earnings
are tax free, and the rawthiras do not have required minimum distribution requirements

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later in life. So if youdon't need that money, you can let
it grow if you want to passit on in your airs. So starting
to engineer your money to take advantageof tax favorable tools. And just like
anything, Caleb, there's no onesize fits all, very customized when you
go down this road exactly. There'swhat we call a tax tolerance, right,
like how much money can you stomachseeing on your tax liability? And

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so what engineering might look like.I'll give like an easy example. So
let's say you're a married couple andyou're in the twenty two percent tax bracket.
What we have is the standard deduction, Okay, so that's a twenty
five thousand dollars deduction that we canutilize on our tax liability. So what
it might look like is utilizing thatstandard deduction, converting up to the maximum
that we can convert in that twentytwo percent tax bracket, so that we're

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only hunting and converting that over towrath money, and just doing that little
by little each year, understanding yourliability so that ultimately you're paying the same
amount attacks on the money you're convertingas you are the rest of it.
But as you just explained with thewrath, you're getting all the benefits of
that in the future. That's right, and when you customize it and you
consider your income for that year,it does look so much different for everybody.

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So, for instance, another exampleis if you're someone that works a
commission job your career is about earningmoney as a commission structure, or you're
a business owner. From year toyear your income could vary substantially, so
you need to be strategic about whenyou do those conversions. Sometimes there are
opportunities to do larger amounts in oneyear in less than next. All at

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once point being is that it's specificto every individual, every household, and
you just have to take your situationand consideration, but go back, find
that budget, get that budget done, understand what your income needs, and
then systematically start working to tax engineer. You're well so, folks, if
you're out there listening today and youhaven't even begun this process or you've thought

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about it, you've heard that termroth conversion thought maybe I should do that,
maybe I should make this a partof my overall strategy. But you
haven't done that yet, and you'dlike to understand how call us today at
six O eight two one two seventythree hundred for a complimentary one hour visit
with one of our advisors. Comeinto the office. First of all,
talk to us. Share with uswhat your vision of retirement is going to
look like, what you've done tothis point, what's you feel good about,

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what you're a little nervous about,what's keeping up at night. So
schedule a time with one of ouradvisors to meet with us at our office
out in Greenway Station or via zoom. It's a one hour visit together.
And when we're done, if wewant to continue exploring how we can help
fill those gaps, how we canhelp implement strategies that make your wealth more

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tax favorable. We can do thatwith a second complementary visit. But if
you call us today because our staffis off on the weekends, just leave
your name and number and let usknow you want to advantage of that.
And then Caleb, you can reachback out to the folks on Monday to
get that on the calendar. Orthen go to retire Madison dot com.
So a lot of good stuff,Caleb, We've been talking about throughout the
show to avoid surprises in retirement.The last thing I want to touch on

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before we wrap up here in afew minutes is a state planning. And
one of the things I think thatdoes surprise most people, and you are
in the majority if this surprises you, and that is that maybe having a
will that you did years ago,maybe you had younger kids and you did
a will regarding too may not knowany longer be enough to support your estate

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wishes. Yeah, and I thinkyou know, there's a there's a couple
of things when it comes to wills, right, Like oftentimes it's like,
you know, I had a willdone twenty five years ago. It has
been updated, which is just interesting, right because I mean, your assets
of change has been a whole lotof different things that have happened in your
life that might not be in thatwill, and you should and you should
really update it. I think wetalked about it in the retirement courses,
some of those websites where people justget wills done really cheap, right,

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and you know, we talked tolawyers about it and they're like a lot
of those not only will. Firstoff, wills go to probate, which
means that they're public and they goto the court. But oftentimes, like
those contracts are written so poorly thatthey're almost like the disbursements aren't good,
right, right, there's a lotof loose ends to those and they are
outdated in many cases. And againyou're in the majority if you haven't updated

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your state for years or even begunthat process, because sometimes it just can
feel intimidating. We don't want tothink of our own mortality, and when
we say a state, that's whatit feels like. So I get it.
I've had people for successful people overthe years have a really good strategy
in preparing for retirement, but thatwas a void and we don't want that
to be avoid But that's surprise ofthat will not being enough anymore because of

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what you said. If you havea will and something happens to you and
that's all you have, probate's goingto be involved, and that's really just
a public process, a time consumingprocess of the court's getting involved. And
even if you have a will,they still have to validate that will and
help distribute your assets, so weteach people there are other options. For
example, one option could be havinga living trust that is very customized to

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your wishes. You can design thespecially if you have maybe a special needs
child or you have special wishes forgrandchildren, and distributing money on a timely
basis. Something like a living trustcan be put in place while you're living.
It can customize to what you wantto have happen when you pass away,
and when that time comes, it'svery clean for the trustee or the

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executor to help distribute that money andget it in the hands of the people
you intended. And by the way, overall, it's much more cost effective
than letting your state go to probate. By the way, Yeah, that's
the point I wanted to attention thatit seems that the biggest gatekeeper of people
using wills as opposed to trust isthat trust or you know, it's like
three to four thousand dollars. It'sa bit more expensive out of pocket in

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the beginning, right, But thereality of it is, like you said,
when the will goes to probate,that whole process actually is more expensive
than you just setting up a trustinitially, How to you know paying out
a pocket. Well, the attorneysthat we talked to say on average about
five percent of the value of theestate nationally in terms of probay costs.
So think about that in terms ofhaving that in place versus a trust.

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So, but a lot of goodthings that we just wanted to touch on.
These we didn't get a chance totake a deep dive, but it
is an opportunity to think through someof the things that could surprise you as
you get to that next part oflife, which should be fantastic. And
we're here to help as always everySaturday. Remember we got some upcoming retirement
courses in September and October. Checkthat out on our website retire Madison dot

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com. Caleb, this hour,as always, goes fast. We will
be back next Saturday to make yourretirement better. This is Nick Toman,
Caleb SYMBOLAC the Empowered Retirement Radio Show. Have a fantastic weekend. Investment advisory
services offered through Track Capital Management,LLC and SEC registered Investment advisor. Information

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presented is for educational purposes only andit should not be considered specific. Investment
advice does not take into consideration yourspecific situation and does not intend to make
an offer or solicitation for the saleor purchase of any securities or investment strategies.
Investments involved risk and are not guaranteed, and past performance is no guarantee

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of future results. For specific taxadvice on any strategy, consults with a
qualified tax professional before implementing any strategydiscussed here in