10/11: The Retirement Playbook

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Episode Transcript

Speaker 1 (00:00):
Hello, and welcome to Money Talks with Terry Sandbold, who's
actually off today, and Blake Sandbled Blake, how are you?

Speaker 2 (00:06):
I'm doing great, Kelly. How are you doing today?

Speaker 1 (00:08):
Oh? You know, it's a good one. It's always a
good one. I love this time of year.

Speaker 2 (00:13):
I know we've been waiting for it. So it's finally fall.
And it's as this Minnesota came here in a hurry.
Once it finally decided to come, it seems.

Speaker 3 (00:20):
Like, yes, sure did came, screeching.

Speaker 2 (00:23):
In, screeching in.

Speaker 1 (00:24):
Yeah.

Speaker 2 (00:25):
So well, I'm excited about this today, Kelly. So we
had our seminar presentation this last week going through the
retirement playbook, and you know, it was very well attended
and we had a lot of requests from people to say, well,
can you actually do something on air. So that's what
we're going to do today. We're going to go through
a lot of the contents that we discussed this last week.

(00:45):
So very excited to go through it. It was a
lot of fun, very engaged crowd. But I think in general,
this is a very common time of year where people
are starting to think about retirements. And we say that
every year where people are closing out and saying, you know,
is is this going to be the year or I retire?
Or it just starts thinking, oh, how many of these

(01:06):
do I have left? So a number of topics we
go through today are applicable, you know for people in retirements,
going into retirements, or several years out from retirement, just
starting to think about how should we conceptualize some of
this for the future. So very excited to be going
through this today.

Speaker 3 (01:21):
Yeah, no, me too.

Speaker 1 (01:22):
And you know, you do such a good job, both
of you guys do when you present, and it is fun.
It's like, I mean, I've been to attended many over
over these many years, right, and it's just it's so
interesting to see a topic that I'm sorry most people
would say it's a little dry, but it's always fun
and everybody always gets so into it because there's all

(01:42):
these little nuggets in there, like really, so, yeah, let's
let's share it with the radio audience today.

Speaker 3 (01:47):
I think this would be great.

Speaker 2 (01:48):
Well, that's that's always my goal with things to say.
If everyone can come away taking away one or two things,
even if that's all you do, you learn something and
that should be worth it worth some time. So for sure. Yeah,
So items that we will run through today, the general
retirement landscape, the big picture, determining retirement income needs, sources

(02:10):
of income, planning strategies such as maximizing tax advantage, accounts,
roth conversions, charitable giving, post retirement strategies, state and legacy planning,
value planning. So we got we.

Speaker 3 (02:22):
Can do that in an hour.

Speaker 2 (02:23):
We've got a lot on our dockets. We did it
in an hour and a half earlier this week. So
we'll get to work and see what you're run through with. Okay,
So the big part that I always like to do
is set the stage. And you know, I always like
history and storytelling. I guess. So if you think about
some of the current challenges that are facing people today,
you've got longevity, inflation, healthcare costs, market volatility, geopolitical environments

(02:49):
as we're seeing a new wave of again right now.

Speaker 3 (02:52):
You bet.

Speaker 2 (02:53):
So every day is a new day, but you think
about those, those are big topics. And longevity, let's start
with that. So this is kind of interesting, and I
put a pull out to our audience last week, and
if you looked at average longevity, you know in nineteen
fifty versus what it is today. So within the US.

(03:16):
You know, average person lived at about age sixty five.
You know, an average between male and female in nineteen
fifty today, that's that's roughly age seventy five. So it
peaked around seventy seven, came back a little bit. But
you think about that over the last seventy years on average,
an extra decade of life, and you know, you think,

(03:37):
from a from a health standpoint, what a wonderful thing.
You know that some of that's been extended, but it
does have planning implications, and you know, both from an
individual planet standpoints, you know, making sure that you are
saving for a probably a proportionally larger nest egg. Maybe
it's retiring later as well in that timeframe. But you

(03:58):
start to see some of those and it makes sense
to say, well, here, here's why solid security is having issues.
One of the factors in it. You know, people are
living longer. It's a longer draw on solid security. Yes,
there's replacement issues and everything like that. We're not having
as many kids in a country as we need to,

(04:18):
but longevity is an interesting factor. There's an extra ten years.
You look at inflation, so this is from the site
True Inflation, which we've talked a lot about You love that.
I love it. You know, it's a very good live
data plug in. And well, we're seeing some some data
reports delayed during the shutdown. Here here's a different area

(04:39):
you can look but trueflation. And again I put this
out as a poll looking at inflation over the last
five years. So since January first, twenty twenty, you had
cumulative inflation around twenty eight twenty nine percent. Wow, So
you think about that in a five year stretch. You know,
prices have gone up by roughly a third. That's that's

(05:00):
that's big. You know, that's very big, and you know
it kind of said, you know, you go to the
grocery store and it feels like more than that. But
for an overall basket, that's kind of where it's falling.
Current inflation we see somewhere on two point two percent,
so it's it's coming down some but still steep. Healthcare
costs another large one for a lot of people. We

(05:22):
just started getting angular renewals for next year for health
insurance premiums, healthcare premiums, and it's not looking pretty. I mean,
there's large increases on that that people are going to see.
So for retirees, think about a fixed income bucket during retirement.
That's going to be incredibly important to focus on. Lastly,
market volatility. You know, you look at this year, we

(05:45):
had one of the five fastest selloffs in the last
fifty years. Subsequently we had one of the fastest recoveries
and it's actually been a good market. So a big
factor with that. Stay calm, yeh right, but you look
at that, that really speaks to the fact on why

(06:06):
planning matters. And you know, coming for myself where I
focus so much on the investment side for our firm,
it's more than just that, you know, it's really holistically
how does this fit together? You know, how can we
look at success for your plan based off your goals,
objectives and risk outstanding out there?

Speaker 1 (06:22):
So absolutely well, and you know, I'm really glad that
you brought that cumulative inflation number up, Blake, because I've
wondered that because everybody thinks, oh, well, you know, we
hit that nine percent level a couple of years back,
and everybody's like, well now it's two point two percent.

Speaker 3 (06:37):
Yeah, but nothing receives right, right, you.

Speaker 2 (06:40):
Know, don't go back right very rarely. Yeah, So it's
really it is thinking we're at a new pricing level
is how I like to talk about it. And you know,
the forward growth on that is changing and decelerating, but
there is still some inflation out there, so it is
a big distinction. And I hear that every time when

(07:01):
I'm out talking about inflation. They're like, well, you're saying
us coming down, Blake, but it's not going back now.
The Ford rate of change is flowing. That's it, right,
So big factor for sure. But you know, we also
talk a lot about you know, think about retirements and
planning in general, saying make the most of the things
that you can control. So if you think about it,

(07:22):
things you can control, saving versus spending, acid allocation and location.
So what it means by acid allocation and location is
if you've got different buckets of money. So it's called
it a roth iray traditional ira after tax funds HSA.
You know there there potentially may be a different risk
objective in each one of those. You know, you think

(07:43):
about a roth ira as an example for a lot
of people, that might be the last dollars that you use.
And because it's it's tax free growth in retirements if
you use the full proper way, So why not say
I'm going to use that last and get as much
tax free income as I can on that, and use
other dollars first. So Roth's, you know, may be more

(08:05):
aggressive from a bucketing standpoint than something like you're after
tax type dollars. Maybe you're using those first, so those
might need to have a broader mix in there. So
you can control those things. Things that are out of
our control, as much as we'd like to say they're
in our control, market returns and tax policy. You know,

(08:25):
we can advocate for things, but we're a little bit
at the whim for other events occurring out there, and
things we have some control on employment during employment, earnings
and duration, so you can control to an extent how
long we work. You know, if we're getting more and
more educated advancing, we have an impact on our wage

(08:47):
growth over time. So important to keep all of those
in mind and isolate what we can control what we can't.
I mean, I think so often we think about spend
all the time thinking about the things we can't control.
But you know, from a planning standpoint, you can do
a lot. You can do a.

Speaker 1 (09:01):
Lot, absolutely, I mean, and that's the thing first, even
just thinking about that stuff, right, you know, just laying
it all out on the table for consideration for yourself
is very helpful, and I know that that's definitely one
of the things that you all, everyone at Sandble Financial
Group does with with your you know, prospective clients and
all of your existing Let me just ask you this, Blake,
we need to take a quick break here on Money Talks.

Speaker 3 (09:24):
Do we have a Money Talks mailer of the week.

Speaker 2 (09:27):
We do, so, We've got our presentation for this week
as well as introductory materials on our firm. So we've
got a lot of fun different slides in here. Everyone
who knows me knows how much I love charts. There's
some great information in here. So if you'd like that
and so to learn a little bit more about our company,
give our office a call at nine to five two
five four four two eight three seven or go online

(09:47):
to Sandbold FG dot com.

Speaker 1 (09:52):
Welcome back to Money Talks with Blake Sandbold today. Terry
sandbl that is taking a well deserved Saturday off and Blake,
we're talking about the retire Wirement Playbook today. And it's
not just from one person who's like five minutes for retiring.

Speaker 2 (10:04):
No, No, it's really covers topics across the spectrum, so
people in retirements right leading up to it, and several
years pre retirements. I mean, it covers the gamut. I mean,
I would even argue that this is this is powerful
information to consider for people in their twenties and thirties
from a long term standpoint. So there's a lot to

(10:26):
think about. And you know, retirements is changing so much,
you know, one from the dollars in sent side, but
two from the standpoint of goals and objectives that people
had in retirements. And we see that so much with
our client base right now where you know, in the
past twenty thirty years ago, a lot of our clients
we wanted the gold Watch, moved down to Florida, enjoy

(10:48):
the time on the beach, and you know, there's still
some of that out there, but I mean so so
much more. We see that people they've accumulated incredible knowledge,
skill sets, and you know, like staying engaged in different
ways than they had in the past, where you know,
whether that be through nonprofit involvements or consulting work. I mean,

(11:10):
the work environment right now has given so many additional
options there. And you know, even for people that financially
don't need to work another day in their life. You know,
it's just a different way to stay plugged in. So
fascinating to see some of that. So it's ever evolving
and will continue to change in the future for sure.

(11:31):
So one of the next slides that we had kind
of around this theme is about managing expectations for retirements
and this is really interesting. So this was a study
that was done. JP Morgan led this actually looking at
expectations of workers versus retirees, and seventy percent said they

(11:54):
expect to retire at age sixty five or older. Okay,
in the study the reality was only twenty eight percent did.
So you saw a massive amount asher retiring before age
sixty five. And you look at that and say, okay,
forty two percent swam things. That's worth trying to understand.

(12:16):
You know, what is leading to that. You know, different
reasons cited in the survey. It had thirty two percent
for changes at a company downsizing so for a not
good reason, right, thirty one percent health problem or disability,
again not a great reason. Thirteen percent, care of a
spouse or family member ten percent another work dated work

(12:39):
related reason, eight percent outdated skills. So you look at
those I mean there's some high numbers on there that
are not positive reasons positive ones. Thirty nine percent in
this scenario said they could afford to that's great, nineteen
percent want to do something else, thirteen percent early retirement package.
So you look at those again there, you know, some

(13:00):
of those are things you can control, some of those
things are things you can't control. But I think that's
that's a good good reminder to have. And you know
that's where when we run retirement scenario is for a
lot of our clients, we'll show it at several ages
just so you can see and you know it could
be someone you know, scenario retire at fifty five, sixty

(13:21):
sixty five, semi retirement buddled in there. We do a
lot of different scenarios like that, but it's it can
be eye opening to a lot of people to say, well,
what is that extra dollar worth? And you know you
can say, well, yeah, I'm going to have more if
I if I continue to do it, but what is
quality of life? Et cetera. So it leads to all
those types of conversations, and you know that's where it

(13:44):
really is a holistic understanding of what your goals and dreams.

Speaker 3 (13:48):
Are for sure, very critical piece.

Speaker 2 (13:51):
Yeah, So next part that we had is looking at
a little bit of social security. So as you're looking
at a full financial plan, it's very important to understand that.
So if you look at you know, claiming early versus
full retirement age, which for most people coming up full
retirement age is going to be between sixty six and

(14:11):
sixty seven. You know, sixty two is the earliest that
you can claim under most scenarios. There's widowed scenarios other
stuff like that where you can claim earlier, but if
you look at it, it's about a twenty five to
thirty percent less than full retirement age amount. Claiming early
just important to understand. Now, if you continue to work

(14:33):
before your full retirement age, there's income limits. So as
an example, before your full retirement age, the earnings test
withholds one dollars for every two dollars in income over
twenty two three hundred twenty dollars. So you think about that.
You know, if you're making forty three hundred and twenty dollars,
you're twenty thousand dollars over, you get a ten thousand

(14:56):
dollars reduction in solid security benefits. So it's fairly punitive
from that standpoint. So that's where you know, we really
talk through with our clients. You know, what is what
is goal for retirement and is it truly fully retired?
Is it semi retired? Understand that the laws and the
rules around some of this.

Speaker 3 (15:14):
Yeah.

Speaker 2 (15:16):
In addition to that tax is an income coordination. You
can have up to eighty five percent taxable and that
includes IRA income, wage income, et cetera. So whenever I
say that, people always ask, so I'm taxed at eighty
five percent? Right, No, just eighty five percent of it
is taxable, fifty percent is not.

Speaker 3 (15:36):
Yeah, well that's a relief.

Speaker 2 (15:39):
That's a relief. There's something out there. But you know,
if you looked at it. As an example, so for
most people, if you're born nineteen sixteen later, full retirement's
age sixty seven, it switched over to sixty six if
you're born between nineteen forty three and fifty four, and
then kind of grades after that. Yeah, So if you
haven't looked at it, you can go on to Social

(16:00):
Securities website. You can see exactly what your retirement agees,
pull up your projection and see what your firm numbers are.
So it's kind of interesting. If we look at average
age of claiming the retirement it's changed over time. And
you know, if you look at going back to nineteen

(16:21):
ninety eight is around age sixty three and a half
on average. If you look to today, it's about sixty
four and a half, sixty four point seven roughly, So
it's gotten a little bit later, but not a ton
over the last couple decades.

Speaker 1 (16:37):
So that's a big number of people that are claiming
prior to reaching their full retirement age exactly.

Speaker 2 (16:44):
It's a large number before that. And that's where it's interesting.
That kind of speaks to the other slide that we
had talked about, whereas more and more people are retiring early,
you know, they're leaving the workforce earlier and using this
to help supplement. So it's interesting to see how it's
playing out.

Speaker 3 (17:01):
Yeah.

Speaker 2 (17:02):
Sure, so let's see here in general, as you know,
as you skip ahead and think about retirement planning, you
know there's a number of different things to think about
ways to do it. First, As an example, a common
strategy that has been out there for a long time
is what's called the four percent role, and what you

(17:24):
do with this is essentially look at your overall portfolio
balance and say it's two million dollars to use kind
of an easy example on this, So the first year retired,
you could say, well, I'm going to take four percent
of that, so it ends up being eighty thousand dollars
and that's my starting balance and essentially take an inflation
adjustment every year thereafter. Is how much you could sustainably

(17:47):
take on your portfolio during retirement years. That's one one
rough way to look at it, and you know, I
think it's it's important to look at it that way
as well as understanding, you know, do we need to
look at things more flexibly? You know, what if life changes,
and that's what we've talked for a long time. That's
pretty much the one thing we have certainty in life
will change. And you know when when we look at

(18:11):
a lot of plans, that that is something that we
try to troubleshoot or stress test in there. Now every
couple of years, maybe you're going to have a new
car payment, maybe every five years you want to take
the family on a large trip, whatever that may be.
You know, plan for some variability in there. And that's
why it's not just to set it and forget it.
Looking at retirements. I mean you want to be actively

(18:33):
engaged looking at your financial plan, understanding your sequencing and
understanding updating what your goals are.

Speaker 3 (18:41):
Yeah, for sure.

Speaker 2 (18:43):
So overall as well, you want to think about rm
ds and tax efficiency, so required minimum distributions. You know, again,
for most people right now, if you're entering rmdh is
it'll be aged seventy three. In twenty thirty three, it
will jump out to age seventy five in the future.
That'll be a little bit later, but that leads to a

(19:05):
lot of planning opportunities. You know, if you're retiring, you know,
as an example, around age sixty, and you don't have
to start taking out of your IRA for another thirteen
or so years. I guess at that point it'd be
fifteen years if you're just reaching that. Now, which buckets?
You know, having multiple tax buckets? Have you got pre
tax money, your WROTH after tax as an example, They're

(19:26):
gonna be planning opportunities in there. And you know, for
a lot of people, if you have those three buckets,
we may say, well, we're going to try to live
on the after tax money first, very tax efficiently, and
convert IRA money to wroth dollars, so do that while
you're in a low tax bracket year and have tax
free growth on the other side of it. So there's

(19:46):
a lot of tax smoothing essentially that we can do.

Speaker 1 (19:49):
Okay, and that's an important thing to do, Like when
you do your reviews here at sample financial group with everybody.
You know, as people's lives change and evolve and everything else,
you need to revisit that aspect of the planning phase,
right Blake.

Speaker 2 (20:02):
Oh, totally. And it's a very constant, dynamic thing to
look at, and you know, it ends up being kind
of fourth quarter this year, first quarter of next year
are very common times people like thinking about that, and
that's really where we sit down and say, Okay, what
worked well this last year from a planning standpoint, how
are your income needs an expensive spats? Are there any

(20:22):
plans and changes you have coming up for next year?
Here's what we had talked about. Is it still looking
appropriate or not? And you know a lot of times,
you know, first quarter of the year we'll start looking
at saying here here's an idea for how much we
think we should do in a rough conversion. Let's confirm
with your CPA and see if they're seeing anything different
on how it may impact your taxes. And a lot

(20:43):
of times you'll finalize that conversion during the fourth quarter
of the year just in case anything came up during
the year that we hadn't anticipated at that time. You know,
it can be dynamic and moving around, because it's tough
to say, well, we already did this full conversion first quarter.
Life happens, we need to take this this large tax
events and now I'm getting hit twice. So give yourself

(21:04):
a little bit of flexibility during that planning, and I
think a better way to go.

Speaker 3 (21:09):
Oh, it makes a lot of sense.

Speaker 1 (21:10):
Absolutely, Let's go ahead and take a quick break here
on Money Talks. Do a little bit of news and
we'll be back on the other side. This is Money
Talks with Blake Sandbled today. Mister Terry Sandbold has taken
a day off and we hope he's having a good time.
And Blake, we're going through the material that you presented
last week at the Retirement Playbook Live seminar that you

(21:32):
did here.

Speaker 2 (21:33):
Yeah. Absolutely, so it was a great event. We love
doing those. Well attended in a very engaged crowd. So
we had a lot of quests though for people afterwards
saying well if I couldn't attend, you know what are
some other distribution methods we can do it. So that's
what we're doing today. We're going through through the conversation
that we had. If you would like to see the

(21:54):
exact materials that is our money Talks mail of the
week as well as some information on our firm. So
just give our office a call at nine to five
to two five four four two eight three seven or
go online to sandfled fg dot com.

Speaker 3 (22:07):
Perfect.

Speaker 2 (22:09):
So big thing that we're looking at with the retirement
is you know what what are additional ways to increase
success and from a planning standpoint, and you know, one
additional key theme is having diversified sources of retirement funding.
So as an example, you think about we'll start with
this a health savings account that is an incredible instrument

(22:29):
for people to look at at all ages. If you're
part of a high deductible healthcare plan, and that's the
key distinction. You do need to be part of that
type of plan to be eligible to contribute to an HSA,
but if you think about it, you can contribute get
a tax deduction for the funds going in, you can
pull it out. You know a lot of them will

(22:51):
either let you write a check have a debit card
to pay for qualified medical expenses, which is immensely broad
classification now, or you can also invest the funds in
the meantime and then use it for medical expenses down
the road. So you know, you think about that from
a planet standpoint. You get a tax deduction, it grows
tax deferred, and distributions are tax free. I mean it's

(23:16):
for that type of expense if you're going to have
health experiences. Most of us are in some capacity, especially
if you look at the list of qualifying things, it's
an incredible tool to use, So something definitely worth looking
at and you know, seeing if there's ways to max
that out. Next bucket roth four O one k roth
ir eight dollars. You know, if you think about that,

(23:38):
the growth on that is you don't get a tax
deduction upfront, gross tax deferred distributions if you've had it
for greater than five years and over age fifty nine
and a half income tax free. That's incredible. I mean
you think about younger people twenties thirties having that tax
free growth, that's huge We talked earlier about a conversion idea.

(23:59):
You know, can averting IR eight dollars four one K
dollars to the wroth side. You know, maybe they're in
a retired or semi retirement type phase. You know, think
about that from a legacy standpoint as well. That can
grow tax free, and errors can receive it income tax free.
Large estates. There could still be state implications, but that's
a big deal. You know, I think about a taxable account,

(24:23):
a broken account, a trust account potentially different ways. You know,
there are certain periods where you could have taxes, empt
to interest, ordinary events, qualified dividends, capital gains implications, long term,
short term. There's a lot of different buckets in that space.
So just be aware and cognizant of what you're owning,

(24:44):
why you're owning it in there, and what the goals
objectives are. You know, there are some special tax advantages
as I mentioned with capital gains if you hold for
longer than a year, but just just understand watch that
and be cognizance. Last bucket pre tax four and k
traditional IRA again, you get that tax deduction out front,

(25:05):
everything grows tax deferred, but everything on the way out
as fully taxable as ordinary income, so it hits you
on that side. So but that's where I think looking
at those you know, a lot will give different benefits
at different stages of your life. So just be intentioniable
why you're doing it and understand what those implications are.

(25:26):
So without it'd be helpful as well to look at,
you know, directory retirements. We had talked about some of
that income or expense volatility, what are some areas that
may change, and so we have a list put together
for people to give a conversation starter. So if you
think about it, yeah, yeah, so everyone should call in
and get this because it is kind of a fun list.

(25:48):
But you know, you think about things decreasing. As an example,
savings most people you're not saving for retirement anymore, that
can be a very large bucket FIICA payments, maybe your
mortgage is ending. You know, that's a common thing for people.
You know, in the past, it used to be always
I want to go into retirement without a mortgage debt free.

(26:09):
And I know a lot of our clients they're they're
sitting pretty happy on a two and a half three
percent mortgage saying I'm okay keeping that, yep. But some
to be aware of lower income meaning lower income taxes,
automobile costs maybe dipping due to less driving some people.
Maybe it's going to increase, but it you know, it
depends work related expenses. Maybe don't. Maybe your clothing attire

(26:34):
is a little bit different.

Speaker 3 (26:36):
Yoga bands are cheaper than a suit, you know, Yeah, right.

Speaker 2 (26:40):
Right, Well, I guess maybe this point was more valid
a couple of years ago. I guess how many people
are working from home. Maybe it's the same. I don't know.

Speaker 1 (26:48):
Well, you know, and let's just be honest. The workplace
has gotten a lot more casual.

Speaker 2 (26:51):
It has. It's changed a lot. I mean, you know,
as an example, I look at Terry my dad. I
did not think I'd ever seen them not in a suit,
and you know, he was. He used to joke that
casual Friday meant that he took his pocket square out
of his suit, and that was that was true. That
was him.

Speaker 3 (27:08):
He used to wear suits to the shows on Saturdays.

Speaker 2 (27:11):
Blake he did.

Speaker 3 (27:12):
He always It's like he had to put his like
persona on, you know, to come in. And yeah, it
was so funny.

Speaker 2 (27:19):
Yeah. We we did a video kind of kind of
montage one time and it showed him getting out of
bed and it was like this silk pajama suit that
we had. Yeah, our team did that one year for
kind of like a holiday mock of the show of
the Office, and it was it was kind of fun.

(27:40):
Let's see. On the other hand, you know, things that
maybe increasing during retirements, vacation and travel costs. It was
very well made. Maybe going up hobby costs. There may
be additional things you're doing, cars, golf, pickleball now whatever
it may be well cost for a second home, lifestyle changes.

(28:03):
Healthcare costs oftentimes are increasing, especially if you've been on
an employer plan forever that there was covered. You know,
it's important to understand what that may look like. Costs
of supporting adult children, you know, are they staying at
home at for a period or not. You know, other
costued inflation, property tax, groceries, maybe there's gifts of family

(28:26):
members you want to do. So just try to give
a couple of different ideas on things that we've seen
over the years. That the change for people, it could
be very different for anybody, but way to think about
it absolutely, and that really extends into saying that's not
necessarily it's not linear necessarily from a planning standpoint. You
know a lot of people, you know, we like bucketing

(28:50):
to different types of retirement years. You know, the go
go years, slogo years, no go years, and you know
there's going to be different spences attached to each one
of those different lifestyle goals choices, et cetera. You know,
I think about the go go years, that could be
the first ten to fifteen, maybe twenty years. During retirements,

(29:12):
you're more active, travel, hobby, higher spending in general, slowgo years,
maybe some of the a little more moderate activity, maybe
spending slows, maybe a little more time at home. We've
seen some in that space, interestingly, have gone from having
that second home to saying, you know, I've had that
fun the last fifteen years, two decades. I want to

(29:34):
come back and I need to be a little bit
closer to family and back to that nuclear units doesn't
always happen, but we have seen that happen a number
of times. Later years, the nogo years, more limited activity,
higher health and care costs. So, you know, I think
it's from a planning standpoint, it's helpful to think of
different ones in there, and that's where a lot of
times that's what we'll do is we'll have different discretionary

(29:56):
expenses bucketed out at different stages and can build it
out a acordingly for sure. So that kind of leads
into this was we get asked from a lot of people,
well how much do I actually need? And you know,
the truest scenario is we want to build out a
full financial plan. Everyone's different. You know, we have clients
that can retire on a million dollars, we have clients

(30:17):
that need eight million dollars to retire, and you know,
it all depends what you want that lifestyle to look like.
But you know, to give an idea, this is something
Fidelity puts together a number of years ago, and it's
how much do I need to retire? How much do
I need to pace at at different age milestones to
reach retirement. So the idea was at age thirty to
have one times your salary age, thirty five, two times

(30:40):
your salary age, forty three times forty five, four times,
fifty six times fifty five, seven times your salary, sixty
eight times your salary and they had put it at
age sixty seven to have ten times your salary saved.
And that's kind of what they looked at for a
general milestone for retirements, and I think there are some

(31:04):
good truth in those numbers, but it also again does
depend on your lifestyle and what you want to make
of it.

Speaker 1 (31:09):
And you know what I like about this, Blake too,
is it kind of it puts it into very good
lay persons terms, like the graphics on these are great.
So I would highly, highly encourage everybody to call in
for the Money Talks maailer of the week because you
can see all this stuff and it helps you understand
it way better when you can see it. So just
give us a call at nine five two five four
four two eight three seven or go online to request

(31:32):
it to sandboldfg dot com. You're listening to Money Talks
with Terry Sandbold and Blake Sandbold and Terry has taken
this Saturday off, so Blake, you're in charge.

Speaker 2 (31:47):
Well we'll get through a Kelly So always fun doing it.
And you know, this is really a follow up to
us a seminar that we did this last week talking
about retirement planning ideas, concept strategies and always a fun
one to go through, and you know it's kind of interesting.
I think one of the next parts I want to
talk a little bit about is charitable giving ideas and concepts,

(32:09):
and I would say this is definitely something to be
very focused and intentional on. And you know something, I
love assisting our clients and our firm with. You know
something Terry and I are both very passionate about in
our personal life as well. So if there's ways we
can help maximize gifts and donations go further, if you're
so inclined to do so, I bet you'd want to know.

(32:30):
So you know, one of the simple strategies is qualified
charitable distributions. And this is kind of interesting. So how
the rule used to work on this was the idea
that when you reached rm D ah so it used
to be seventy and a half was when rm d's
used to start, and they would say, instead of taking

(32:52):
that money, you could in turn give that money directly
to a nonprofit your ARM and D and used to
be up to a hundred thousand now it's one hundred
and eight thousand dollars a year on your arm D.
You can give directly to a nonprofit. If you give
it direct and don't take receipt of it, you avoid
all taxation on that and it ends up just being

(33:12):
a full benefit for the nonprofit. So if you are
a charitably inclient, that's a huge deal. What was interesting
is when they changed the RMD age required minimum distribution
age to seventy three, they didn't change the age for
qualified charitable distributions, So for whatever reason, that stayed at
seventy and a half. So when you're seventy and a

(33:33):
half an older, you can still do the scenario even
if you're not taking your rm D yet. So what
I tell people is if you're if you are already
making annual charitable contributions from whatever bucket, that might be
one of the most efficient ways to do it because
it's taken one of your least tax efficient assets and
giving that away the charity. They don't have to pay

(33:56):
tax on that, So that's that's great for them to
receive those dollars. It's like for that, it's like receiving
any other dollar that's a tax advantage they have as
a nonprofit. Uh So that's uh can be a great scenario.
Uh you know, for you, it's going to be a
lot more efficient than writing a check as an example.
Uh So, it's it's just a way to leverage your
assets and have those dollars go a little further.

Speaker 1 (34:16):
Yeah, And I think I think it's it's fair to
note I love this because I'm so proud of you
for doing it. You have a particular designation for this.
I mean you you added this to the lines of
letters behind your name. Just kind of explain that quick.

Speaker 2 (34:28):
Yeah. So it's a CAP certification Chartered advisor in philanthropy
and UH absolutely love philanthropic giving strategies. And you know,
it's something where it's it's a large personal passion. Uh.
You know, Terry and I and our families are are
very involved with a number of nonprofits around here, and
you know, I look at it. You know, I share
a local nonprofit and from that standpoint, nonprofits need help

(34:52):
and being educated about ways to talk to donors. And
you know that that's that was part of my passion
of saying, you know, other ways were where I can
try to help connect those those barriers, so to speak.
And you know, I think you look at the amount
of charitable giving that goes on in the United States
every year, it's it's truly staggering how much wealth is
given away and there's so much generosity out there, and

(35:16):
that's really been our goal is to say, if we
can help people leverage their passions further from that standpoints
and understand which assets to give away and how to
do it efficiently, that's going to help everybody. You know
that that helps a client, it helps a nonprofit, and
it might help your legacy better in a number of ways.
So fun passion to work on. So I think, next, Kelly,

(35:40):
let's get ahead to some of the risk managements that
we talked about. And this is really looking at life
insurance and long term care insurance. And it's not everyone's
favorite topic, but we have some great stats in here
on long term care needs. So this was put together,
I believe by gen Worth. So they said nearly seventy
percent of Americans age sixty five and older will require

(36:03):
some form of long term character in their lifetime. Okay,
that was Fidelity. Actually you think about that, that's pretty staggering.
So coverage gap over one hundred and two million need
more protection. Currently, fifty two percent of Americans have life insurance,
but a stagrant one hundred two million individuals go without

(36:23):
coverage or require additional protection. Wow, that's pretty stagreing. And
what Genworth has on their website, so I'll give a
plug in for everyone. This is a great site to
go on a checkout. So if you go to Jenworth's
long term care, you can look online at this. You
can pick your zip code anywhere in the country, type

(36:44):
it in and we'll see what the average cost is
right now this year. Oh really, okay, yeah, anywhere in
the country. What's cool is you can dial it ahead
to the future and say, okay, what is it can
cost ten years from now, what's the projection for that,
fifteen years from now, twenty years from now, and allows
you to help change the inflation amount, so you can
kind of conceptualize it. So if you look at it

(37:05):
right now, I plugged it in for Minneapolis home healthcare
currently this year roughly eight thousand and eight dollars a month.
Twenty thirty four, it's expected to be ten thousand, seven
hundred and sixty two dollars a month. Whoa adult daycare
currently about two thousand and four hure and ninety two
a month, expected to be three thousand, three hundred forty

(37:27):
nine dollars. Assisted living one bedroom two hundred and forty
month expected to be eight thousand, three hundred and eighty
six in a decade. Wow, this is where it really jumps.
Nursing home care semi private room currently about twelve thousand,
one hundred and sixty seven dollars, expected to jump to
sixteen thousand, three hundred and fifty one dollars.

Speaker 3 (37:48):
Oh my word, that's a lot of money.

Speaker 2 (37:50):
Yeah, private room twelve thousand, eight hundred five expected to
jump to seventeen thousand, two hundred and nine. Wow. You
think about that, that's a staggering amount of money. And
for anybody you know that, that's a large consideration factor
to be thinking about. So that's where you know, we
think it is importance to at least look at and understands,
you know, long term care and what are what are

(38:11):
the risks? What does it do? You know, in the
past there were a lot of standalone long term care
policies and that that industry has really dwindled and changed.
But but what's out there a lot right now are
life insurance policies with long term care riders. And you
know what a lot of people like from that is
really the viewpoint of saying I'm going to get a
benefit one way or another. It's either it's going to

(38:32):
help me stay in an assisted living and nursing home
type facility or at home care, or if I don't
use it, it's going to go as tax free income
to my beneficiaries. So it's kind of a best of
both worlds, trying to isolate some of those risks out there.
So something worth considering, but it's a pretty substantial costs.

Speaker 3 (38:51):
Yeah sure, wow, Yeah, So.

Speaker 2 (38:54):
I think, you know, Kelly, maybe one of the last
things we'll talk a little bit about is some of
the estate planning. And you know, I think this is
something important for everyone to look at. You know, state
rules have changed quite a bit over the years, and
you know, I think everyone thinks, well, state planning, that's
just for old people, And you know, the reality is
it's important to look at at all ages and really

(39:15):
understand what a will is, what a trust is, what
a power of attorney does and doesn't do, and how
to have accounts titled. And you know, I think it's
very common. I've seen this number of times where people
have said, well, I did all I established a trust,
and the next question I usually asked is saying, well,
what did you do after you established that? Did you

(39:37):
change your titling on anything. Did you fund the trust? No,
but I've got my trust documents. Well let's take it
a step further and make sure that it's fully done.
And you know, as an example, you know, you can
have some people like putting a home and a trust.
Some people like putting, you know, an after tax account

(39:57):
into a trust. But if you if you don't and
you keep the beneficiary of something else, it's contract law.
You know, those will follow. However, the beneficiars are designated,
so it's important to review your beneficiary designations. We recommend
at LISA annually, you know, look at your employer plan,
look at your life insurance, look at your brokerage accounts,

(40:18):
et cetera, and make sure that it is titled exactly
how you want. And you know, the estate tax exemption
has been extended, which is you know, nice to see
for a lot of people. You know, next year will
be looking at a fifteen million dollar per person exemption,
so up to thirty million dollars total, so pretty stagury

(40:39):
number to look at. And then you know, an additional
number that a lot of people like to see is
the annual gifting number. So you can do nineteen thousand
dollars a year right now, so it's a pretty or
into next year, it will be nineteen thousand dollars a year,
and meaning that you can give that much away to
anybody without any gratifications. As a married couple, you can

(41:01):
multiply that by two, so it be thirty eight thousand
dollars a year. When you go above that, that's where
you'd end up finding filing a gift tax return. Now,
the key part is with that that doesn't necessarily mean
a gift tax is due at that point. It just
goes against your gift lifetime exemption amount, So it's kind
of like a ledger that you keep that kind of

(41:22):
just tallies it down over time, which currently, as I mentioned,
is the same as the estate exemption. So you've got
you know, fifteen or thirty million dollars if you're single
or married, So it just starts reducing that number and
benefit over time. Okay, Yeah, so a lot of money
that you can give away. I know, it's a lot
of content that we covered a lot, a lot of

(41:43):
things to go through. We went through even more, but
you know, I think this hopefully gives a good primer
on realizing the true power of planning around things, and
you know, it's very important to get focused early at
this and understand what the rules are, what the regulations are,
what are all these planning considerations, and you know, these

(42:05):
are some of the facts, but there's so many more
abstract things to really think through under beneath as as
you're looking at a holistic plan.

Speaker 1 (42:12):
Absolutely well, you can get a copy of all the
great documentation in the charts and it's really a tremendous presentation. Blake,
What do people need to do to get their copy?
And some great information on Sandbold Financial Group?

Speaker 2 (42:24):
Yeah, easy enough to give our office call at nine
five two five four four two eight three seven or
go online to Sandbold FG dot com.