11/29: Retirement Readiness Checklist

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Episode Transcript

Speaker 1 (00:00):
Hello, and welcome to Money Talks with Terry Sanmble and
Lake Sanmdble and Terry, you've got quite a topic picked
out for us for this time of year.

Speaker 2 (00:08):
Well, it's a topic that is pretty timely for a
lot of people. It's entitled Retirement Readiness Checklist, and a
lot of people do get thinking about retirement. This is
the time of the year when people are I would
say the biggest times are at the end of the
year and right at the beginning of the new year.
Some people wait until the beginning so they can maybe

(00:30):
get some of their sick pay, some of their vacation pay,
and then they put in their notice that type of thing.
Some people are say they've used it all up. They
don't know if they're going to get it at the
begend of the year, and they're looking forward to their
first few months of retirement to sit back in December
or December, January, February and not have to go outside

(00:51):
and go to work. That type of thing. So or
that's when that's spring vacation that they've never taken time
to do becomes a reality. So as you wrap up
this year, it's a natural time to step back and
really look at your financial picture, and especially when it
comes to retirement, because whether you're just starting to think
about it or you're only a few years away or

(01:13):
a few months away, it's still a perfect moment to
check in and make sure you're on track. We always
tell people the earlier to start, the better. It's kind
of like you can redirect your future if you look
at it early enough, and you know today we're going
to go through a retirement readiness checklist, walking through key
questions that every individual should be asking themselves and today

(01:34):
in this busy world at the end of the year,
this might not be on everybody's list, but it should
be something that we can help you with as well,
so you don't have to take it on all by yourself.
Some people right now are busy with the holiday season,
and they should be, and this might be put off
to the side, but we don't should put it off
months and months and months and months or years and

(01:55):
years and years and years, because you know, the longer
you wait to prepare for retirement, some people have that
stress level does jump up a bit, and then they're
hoping for a really excellent return in the short amount
of years to make up the difference for them because
they did not plan it accordingly.

Speaker 3 (02:13):
Would you say, Blake, Yeah, I think that is a
stigma for some people. And you know it's the reality is,
you know, the from a planning standpoint, it should be
reversed on that so that you can't count on just
the portfolio alone to make that up. And I think
that's where as you mentioned Terry, the more time you
have on your side to create that plan and go

(02:34):
through that process, the better.

Speaker 4 (02:36):
But there's no time like the present.

Speaker 2 (02:38):
And when we talk about retirement and retirement income and
lump sums of money and what are your retirement income goals?
Some people say how much is enough? You know, they
don't know what that number is, and not everybody will
have the same number, so there's not a one number
answer in this situation.

Speaker 3 (02:55):
We get asked that so many times, don't we And
it would be the first question coming in, how much
do I need to retire? I said, well, we need
to go through this process, Tore and stand that a
little bit.

Speaker 2 (03:04):
And lifestyles are some very interesting stories in regards to
where people come in and the one that I will
one that comes to mind is a person he was
about a one year away from retirement. He was making
three hundred thousand dollars a year income, so a very
successful person and had not worked with any financial planners
at all. Ever, one year from retirement, sat down with them.

(03:27):
I said, at what level would you like to retire?
He said about the same income level, about three hundred
thousand a year. He says, well, let's take a look
at your portfolio. This was the very first appointment. He
had saved almost three hundred thousand dollars. So he says, so,
I'm here because I want you to help me make
sure that I can do this. And it's like, well,

(03:49):
we have one year, you make three hundred, you only
have three hundred saved. You do have one year retirement
ready for you. And he looks at me and he's said, well, no, no, no,
I want you to make this really work. And I
had to have a reality type of meeting with him
and say, you know, next year might not be the year.
And he says, what, I'm pretty set on that. It's like, well,

(04:12):
we can show you a lesser income level option and really,
look at are you going to phase out and work
part time? You really should keep on going. If you
have a high goal, You're going to have to have
high dumbers to make it all work. So and on
the other hand, we've had people that have made fifty
thousand dollars a year as their max, but they've made
and saved over a million bucks and with Social Security

(04:34):
and then just supplementing it a little bit, they can
have a raise and income instead of cutting back. So
it's really what is your lifestyle, what are your goals?
What is your budget? Your pluses and your minus is
on the board. You know, if you have a big
mortgage and you're highly highly leveraged, then everything has to
go just right to make it all work. So I

(04:57):
think it is interesting. That's why it's important to sit
down with somebody like us. We can put this on paper,
not just in your thoughts. Is it really going to work?
You know, because for a lot of people, they're just
hoping it works when they go in and say I'm
going to retire. Are you feeling confident when you go
into your employer and say I'm ready to retire, or
you're crossing your fingers behind your back hoping it's really

(05:19):
going to work. So very very important to take that on.
Not everybody we talk about this all the time. Like
not everybody wants to sit down and do a retirement
cash flow analysis and look at their financial future. But
that's what we do for people, and we help them
be prepared. And as we have went through this last
year here this year, one thing that we have found

(05:42):
out is there's been even more health issues with people
in retirement than we've ever seen before. So the uncertainties
of preparing for health care costs, long term care costs,
early deaths for one of the couple if there is
a couple, those types of things, there's planning that needs
to be not done for the uncertain things that can

(06:02):
take place.

Speaker 3 (06:04):
Yeah, I think it's been a prime example this year
of you know, a lot of holistic planning one with
world events too, with health type events. And you know,
we've seen a number where, you know, proper planning with.

Speaker 4 (06:17):
Life insurance as an example, in the case of a death.

Speaker 3 (06:20):
You know, you can be amazed in that case how long,
how far that can go, and how important that is.
And you know we've seen others where weren't properly insured
on that and it's a large financial hardship for people
where it's you know, it's tough to go into that
and saying, Okay, you had a love one die based
off your planning, Now you need to look at selling
your home. That's a tough conversation to have and you know,

(06:43):
but but with proper planning, you can you can go
through that and say, yep, you know, we plans unfortunately
for this type of events, but that's that's what insurance
can do and help take care of. So, you know,
I think it is a great reminder to people to
look at those stress has, you know, look at life
insurance policies, you know, when you're younger, and you know,

(07:05):
it's been something that we've as a firm and stressing
more and more with our younger clients as well as
well as older clients.

Speaker 4 (07:12):
But you know, I think younger people in general.

Speaker 3 (07:14):
Have sense of infallibility that nothing, nothing can happen to us,
right yeah, and you know, little planning goes a long
way from that standpoint, so right time to be looking
at all that.

Speaker 2 (07:27):
Yeah. The one thing that is a very important part
of what we do is sitting down with the surviving
spouse or sitting down with the surviving children of a
parent that has passed away, and knowing that we are
here to help them throughout their financial future as well.
For many couples. The thing that we feel quite good

(07:48):
about is when one of our clients passes away, the
spouse is feeling confident that they do have a financial
future that's going to keep on going because we have
talked to them. We've talked to both of them. We
just don't talk to one of them because we want
to really engage them in if something happens to him
or if something happens to her, here's how this will

(08:10):
map out for you, and we are here to help
and that's the next chapter of your future.

Speaker 4 (08:15):
So I you know, we.

Speaker 2 (08:18):
I've just met with two, actually three people surviving spouses
in the last month. Came into the office. Some came solely,
which is very hard to do. Some came with their
children and the children are coming in to make sure
mom's okay or that type of thing. In this case,
it was three men that passed, okay, two from cancer,

(08:42):
one from heart issues, you know, and it's and it's
like at the beginning of the year, all three of
them were doing pretty well and I've saw all I
saw both of them up until two three months ago
and then bang, something happened very quickly and all of
a sudden the world has changed. Are you prepared for
something like that. It's something that is a tough question

(09:03):
to ask, but most people get quite nervous with the answer.
So the planning process is something we can help with
and you don't have to take it on by yourself.
And we've been doing this for thirty nine years. We
have clients that are newborn to in their middle or
late nineties right now, and you do need money management
and financial planning all the way through to make it

(09:25):
the best it can possibly be for you. So give
us a call if you like a no cost review
or consultation, our conversation on the phone just to get
started or to interview us. We're here to earn your business,
is the bottom line. Our number is nine five two
five four four two eight three seven. Again it's nine
five two five four four two eight three seven. We're

(09:49):
right here in Minnetaka Minnesota, as they would say, but
we have clients all over the country, so we can
help you no matter where you are at throughout the country.
Today we're doing a money Talks mayorl of the Week
which is entitled seven Principles of long term investing. Give
us a call if you'd like your copy.

Speaker 1 (10:07):
Today you're listening to Money Talks with Terry Sandbold and
Blake sand Bold and it's the retirement Readiness Checklist and
there's a few significant items on there.

Speaker 2 (10:20):
Yeah, but we're going to go through quite a few
things today, but we're just touching on the surface. So
one question that always comes up, and it's a general question,
what are your retirement income goals? So some people guess
at a lump sum that they need to have, but
we can help you with a retirement income cash flow
analysis to project out at what level can you spend
and feel comfortable and are you getting are you working

(10:42):
your way towards your ultimate number for you? So it
really starts with the income needs. What do you need
to achieve in regards to being able to make your
budget work for you. We want the word budget to
be a positive thing, not a negative thing. So determine
your monthly ann you'll spend, housing, utilities, healthcare, travel, gives, taxes,

(11:03):
et cetera. All those things are pieces to looking at
a budget because let's face it, you're creating your paycheck
for the rest of your life. When you get to retirement,
So are you prepared to do that? Do you have
the dollars and cents to make it happen well?

Speaker 3 (11:18):
And I think a way that you know, we we
liked talking about a lot of times and thinking about
it is you know, realizing that there may be multiple
phases to retirements on what spending may look like. And
you know, we've talked a lot about the go go years,
meaning maybe your first ten fifteen years in retirement where
it's very active, there could be a lot of travel,
uh slow goo years, maybe not as much, maybe it's

(11:39):
a larger family trip and no go years.

Speaker 4 (11:42):
And where it's kind of more more around.

Speaker 3 (11:44):
Home, you know, maybe less mobile, a lot of family
time hopefully in there.

Speaker 4 (11:49):
But it's it's.

Speaker 3 (11:50):
Interesting during each of those cycles. You know, we've seen
different cases where you know, having a second home or
not has been a different type of conversation where maybe
in the earth years it was really nice to move
south Snowbird, and maybe in the later years you don't
want to do that anymore and you want to be
at home closer to family. So it's kind of interesting

(12:11):
how some of that shapes and evolves over time. But
I think it's you know, it's important to be have
some of that in mind. And you know, especially if
you're kind of thinking about being on you know, somewhat
of a fixed budget during retirement, saying you know this,
I've accumulated this nest egg.

Speaker 4 (12:26):
It needs to last.

Speaker 3 (12:28):
Planning for different stages like that is important. You know,
what are variable costs that can come up to you know,
is it a new car every five, ten, fifteen years,
you know, how do you think about being able to
allocate for that? So a couple key considerations there.

Speaker 2 (12:45):
Yeah, and we can help you analyze the idea. Even
if a person was looking at along the way like
a second home or a cabin or those types of things,
we can we can put together a projection of the
cash of your cash flow to look at does it
work into your overall planning process, how big of a
dent might it put into your income scenario. And on

(13:07):
occasion we've had to sit down with some and say, oh,
you're extending way too far. This is right on the
edge of not working. If something happened, something came up,
it may not work. So really really consider that. But
I think we can be a coach on that and
help you walk through some of those types of scenarios
very very important to look at it before you make
those big decisions. So when you're at retirement and you're

(13:32):
looking at where will your income come from, you know
some of the big pieces might be your four one
K or retirement plan through work. Social Security, of course,
is a major one when you're kind of backing up
to the four one K. Just for a second, if
your age fifty nine or a half, fifty nine and
a half or older and still not retired. One of

(13:53):
the things you can look at, because it usually is
one of your biggest pieces of your retirement future, is
the idea of being able to do an in service
rollover in service rollover to an IRA while still working
or at retirement. Look at you want to keep it
in the plan, you want to move it out of
the plan. Almost all people do tend to move it
away from their employer because in most cases there's limited choices,

(14:18):
and if you were rolling out to an IRA, an
IRA is not a product, it's just the tax label,
and underneath that you can put all different types of investments,
so you have tens of thousands of options to choose
from in there. That's what we can help you with.
But the four one K is very important to manage
all the way through social Security analyzing it. Should you

(14:40):
take it as early as you can, which is sixty two.
Should you take it at full retirement age for most
of you listening, that might be sixty seven, or take
it at full at the max which is age seventy.
You will not get a higher benefit waiting past seventy.
It does not accumulate any higher, So that would you'd
want to start it right away at seventy if that

(15:01):
was your goal. But also for a lot of people,
they think about should I take it a little bit earlier?
And the idea behind that is social Security cannot your
kids cannot inherit social Security, but they can inherit your investments.
So in some cases some people may take it at
full retirement versus waiting till seventy, take less out of

(15:22):
their investment pool. And we can help you sort all
that out as well. Pensions, if you're if it's applicable
to you, some pensions have lumps some options versus monthly
options to choose from, So a lump some would be roll.
You could roll that over to an IRA and then
create your own flexible income per month if you wish

(15:44):
to do that. So these are things we all help
you analyze. Personal savings and non retirement investment accounts. Of course,
different text strategies on them. Some have capital gains rates
depending on what you have on a savings account that's
ordinary income tax rates, So we help you build short term,
mid range and long term investment strategies for those. Real

(16:07):
estate is also a possibility if you have passive passive
income from them. How does that fit into retirement? There
are other products, some companies or even four or three
b's sometimes using a nuity product, or you can use
your own annuity product, and some of them have guaranteed
income options on those, so you can almost create your

(16:28):
own pension lookalike in that case. Diversification is key. That's
where the money management comes in, not relying too heavily
on one source, because if all your money's in a
pre tax scenario, for example, then you're right in the
waves is what are the tax rates going to be
in the future. So if you have some short term,

(16:50):
mid range, long term money, some under a RAS scenario,
which is tax free distributions, then we can help you
look at taking from which pot makes the most sense
keeping your tax making a taxi fishing for you.

Speaker 3 (17:04):
Yeah, I think that's the nice blend, you know, during retirement,
you know, having having multiple buckets out there, having the
after tax, having the wroth, having the pre tax side.
You know, I think for a lot of people in
the past, the notion was, well, I'm put in my
four oh one K and that plus those security that's
probably gonna be good enough.

Speaker 4 (17:22):
And you know, in.

Speaker 3 (17:23):
Certain cases maybe it is. But that's that's really the
goal of looking at a plan. Early on, I was saying,
you know, is that right? Are there other tax.

Speaker 4 (17:32):
Buckets that we should do in there?

Speaker 1 (17:33):
Yeah?

Speaker 3 (17:34):
So, you know, I think the next question for a
lot of people is are are you saving enough today?
And you know a couple of different things to look
at their contribution limits. So for the current year, you
can look at for for those over fifty, can look
at a total contribution for a four oh one K

(17:57):
of thirty one thousand dollars, which is the twenty three
thousand dollars twenty three thousand, five hundred dollars standard limit
plus a seventy five hundred dollars catch up. Then if
you're sixty to sixty three. You can place a total
of thirty four thousand and seven to fifty in there,
which is the twenty three thousand, five hundred standard plus
the eleven two hundred and fifty super catchup again.

Speaker 4 (18:18):
Just for those years.

Speaker 3 (18:19):
So it's kind of a unique bucket in there, but
a reminder with all of that as well, you know
that could go into the pre tax or the wroth
side for the base contribution. So I think that's regardless
of income, which is a big distinguisher on that, and
that kind of catches a lot of people as well.

(18:39):
So a lot I think, well, I make too much,
I can't do the wroth. Well you may not be
able to do a roth ira, but you can do
a wroth four oh one K at any income level.

Speaker 2 (18:47):
Yeah, So that the best thing is to if you're
not sure, call us and we'll go through that with you,
because like you said, like a lot of people might
have missed that for quite a few years and then
all of a sudden they find out they could have
done that, yeah, and then they're like, oh, I wish
I would have known that earlier. Right, very very important
to look at that. It's our job to help you
with that, so other.

Speaker 3 (19:10):
Limits we have iras seven thousand dollars standard limits plus
for those over fifty and additional one thousand dollars, so
total of eight thousand dollars that can be contributed.

Speaker 4 (19:20):
Simple irays for those.

Speaker 3 (19:23):
Fifty to fifty nine and sixty four plus is twenty thousand,
which is a sixteen thousand, five hundred standard limit plus
a thirty five hundred dollars catch up. Well sixty to
sixty three, it's twenty one thousand and seven fifty which
is the sixteen thousand, five hundred standard limits and two
hundred and fifty dollars super catchup. So I think that's

(19:45):
going to be an interesting factor for a lot of people.
Look at lots of numbers. If you'd like to get those,
give our office a call at nine to five to
two five four four two eight three seven, or go
online to sandfld FG dot com.

Speaker 1 (20:01):
Welcome back to Money Talks with Terry Sambold and Blake
Samboled And today it's the retirement checklist, and there's a
lot to go through.

Speaker 2 (20:09):
There is and a lot of choices to make. Some
of them are permanent choices, some of them you can
diversify along the way. So it's very important too, we
feel work with an advisor group that can help provide
the right information to you to make the right decisions
and help you with the recommendations going forward and be
proactive about it instead of reactive about it. So today

(20:29):
we have a Money Talks bailer that week entitled seven
Principles of Long Term Investing. If you'd like your copy,
give us a call today at nine five two five
four four two eight three seven. Again that's nine five
two five four four two eight three seven. One of
the top one of the questions on our list today
also is when do you want to retire? And somebody

(20:53):
might say, oh, I'd like to retire at fifty or
fifty five or sixty or sixty five, but are you
really ready to be able to financially retire at those ages?
So retirement age drastically changes financial outcomes. Of course, a
person that wants to retire, say at sixty or sixty five,
say the most common might be around sixty five. They

(21:15):
might have been in their career thirty or forty years. However,
some of them could be in retirement up to thirty
or forty years. You know, the way the world is
going to So it's not like saying, well, my parents
only live ten or fifteen years into retirement, so that's
as long as I'm going to live too. I had
one guy come in one time. He had a projection

(21:35):
from another company and he says, well, it looks like
I have plenty of money. I says, can I take
a look at your projection that was done? And he says,
and he was sixty five at that time. And I said, well,
let me show you what this. I'm going to walk
this one through. This was done by another firm, and

(21:56):
I said, it shows here that you have a pretty
high income however, or they projected this at you always
achieving a minimum of twelve percent per year. And then
the other thing on the back page is it shows
that you run out of money at age seventy seven.
Are you willing to die at seventy seven? And he

(22:16):
looked at me, he says, what do you mean. I says,
that's what your projection shows here, and you'd run totally
out of money at twelve percent at seventy seven. I said,
what if you live to eighty seven? What if you
live to ninety seven? And what if you don't get
twelve percent every single year, and he's like, gosh, I
never looked at it that way. I just looked at
the front few pages and thought I was okay. I said, no,

(22:39):
we really need to relok at this. Let's rebuild this.
Let's use a little bit more conservative rate. Our goal
would be to do double digit numbers every year. But
you don't want to say that you have to do
that every year just to make it work, because the
world isn't that certain. Otherwise everybody would lean back in
their chair and not do much type of thing. So

(23:01):
we rebuilt that, and he looked at it more seriously.
But we want you to get a realistic projection and
overachieve it as the goal. Yeah, but yeah. Discuss the
implications of retiring early versus waiting. A lot of times
when we project out what we call a retirement income
cash flow analysis, we'll say what is your first choice

(23:23):
of age, what would be your second possible choice, And
what we're trying to show there is if somebody says, well,
I'd really like to retire as early as sixty two,
but maybe sixty five or sixty six is more realistic,
what we would do is do a projection on both
ages and show the difference it can make for you.
And a lot of people just kind of guess at it.

(23:46):
They don't have any analysis at it. But we can
do the analysis for you and show you the difference
it does make. And some might say, gosh, it makes
that much difference waiting four years.

Speaker 4 (23:55):
I think I'm going to keep on going.

Speaker 3 (23:56):
Yeah, well, in a lot of cases, it will surprise
you how much even one year of a difference can make.

Speaker 4 (24:01):
In certain cases, you know.

Speaker 3 (24:02):
A sixty two versus sixty three can be a surprisingly
large difference. So I think it's it's great, you know,
to really look at multiple scenarios on that so you're
fully informed before making that decision. And you know, I
think there's certain people out there, well they'll just run
the one projection the way you asked for it and
say yes or no on that's but you know, that's

(24:24):
what we always do is try to come back with
different ideas, alternatives and just give you more information to
make that decision.

Speaker 2 (24:30):
Yeah, and some people will go from full time corporate
world to part time consultation world, you know, and then
we'll build that into the cash flow and look at
that as well. Or if you're a business owner and
you're busy running your business and you're like, well, I'm
going to retire down the road, how do I make
my life in retirement income work? Because everything was dedicated

(24:51):
to the company, and I invested everything in the company
and then maybe save enough, but I might sell it.
I'm not sure. You know, we can help walk through
all of those areials too for them, and that can
be very helpful for a business owner to look at
how they can phase out of the business, so to speak.
So it's very very important to understand that.

Speaker 3 (25:10):
Well, I think that leads to really a great point
in conversation we do have with a lot of our
clients too. That's just you know, frankly, what do you
what's a normal routine going to look like for you?
And you know, we try to help coach through and
discuss that because you know, for certain people, especially that
we've seen that are heavy, high octane business, corporate type people,

(25:32):
there hasn't always been a thought, you know, it's just
getting off the treadmill, so to speak, of that corporate routine.
But I think, you know, making sure you're in a
mindset to actually think through you know, Okay, what do
you do when you get up in the morning each day.
Don't need to have it all plotted out, but you
do need to start thinking towards that.

Speaker 4 (25:51):
Yeah.

Speaker 2 (25:51):
And sometimes when a couple sitting in front of us,
and one may retire earlier than the next, or in
some cases one is the income earner and the other
one is stay at home type person. I turned to
the one that has been at home. I says, are
you really ready for this person to be home full time?

Speaker 4 (26:12):
You know?

Speaker 2 (26:13):
And it's like, no, I'm really not. I got to
change my whole lifestyle because yeah, it's coming home now,
I'm going to stay home. So I mean, and you
can ask them what is your goal? Oh, I'd like
to travel and the second person says, I don't want
to travel at all. I've been traveling for work. I
just want to sit home.

Speaker 4 (26:31):
Yeah.

Speaker 2 (26:31):
It's like, well we got to there's emotional decisions going
on in financial decisions, so it's all really important how
it all fits together. So very important to do your
planning accordingly. At Samville financi who we can help absolutely.

Speaker 1 (26:45):
So what's next on our list?

Speaker 4 (26:46):
Guys?

Speaker 3 (26:48):
Well, next one, how much investment risk are you taking?
I think this is a big factor for a lot
of people and something everyone should be looking at.

Speaker 4 (26:58):
And you know, a way to think about a lot of.

Speaker 3 (27:00):
Times is risk tolerance versus risk capacity. And I think
a lot of the times it just gets commingled as one, well,
I feel like I can do this, and you know,
the emotions the you're feeling around it. That really is
the risk tolerance. You know, if I have a five
ten percent draw down in the markets, am I comfortable

(27:20):
with that? Or is that keeping me up every single night?
And I'm looking, you know, every penny versus risk capacity?
How much volatility can you actually take on? And you know,
in retirements there's certain cases where you can get to
a certain number and saying okay, based off the balance
of my portfolio, you know, I can stay retired as

(27:42):
long as I don't have a draw down and it's
you know, as long as it's a lower growth type number,
I'm okay with that.

Speaker 4 (27:47):
That's going to keep me retired.

Speaker 3 (27:50):
On the other hand, someone may look at and say,
I've got enough money in different buckets where for a
portion of my funds I can still be fully aggressive
with that. You know, maybe maybe I'm looking at somewhere
it's going to be a legacy type plan and I
want that to grow for the next forty years still,
so I think it is important to look at and
evaluate which bucket you know, is that assigned to you,

(28:13):
What is the distribution timeline for each one of those?
You know, after tax funds ira Roth, there may be
a different time when you're trying to use each one
of those. So there could be three different risk profiles
depending on your type of account. And you know, it
doesn't it's important to look at the overall basket for

(28:33):
what the risk looks like, but there there may be
risk bucketing to consider.

Speaker 2 (28:38):
Yeah, so that comes into the next question is do
you have a withdrawal strategy? So most people do not.
They just think they're going to take interest off of
everything and then hope it all works out, so to speak. Right,
they may be paying much more in taxes than they
need to using that approach. So we can help them.
What the we and we use this phrase and we

(28:59):
built thousands and thousands of these books. Retirement income cash
flow analysis is what we that's the general wording for it.
But what we do is we'll sit down with the
client and we'll be right at the conference table, if
you come into the office and we'll show and map
this out how we build this, and then we can
do work through scenarios right in front of you on

(29:20):
the screen, which is important for people to see. Should
I do ROTH conversions between sixty five and RMD age
meaning seventy three at this point, and so when you
get to required minimum distribution age, you don't have to
take as much out. You have some of that over
into a ROTH iray and growing tax free for the
future for you and for your benefici race. So the

(29:43):
withdrawal order as we talk about, some will have capital
gains rates, some will have ordinary income tax rates. Our
goal is to help you minimize taxes across your lifetime,
not just in the current year. So the tax strategies
on distribution is very very important well, and having different
pots of money will provide more flexibility for you along

(30:05):
the way as well.

Speaker 1 (30:06):
Absolutely, we have more money talks coming up. Welcome back
to Money Talks with Terry Sandbold and Blake Sandbold, and
we are talking today about retirement readiness checklists and there's
a lot on there.

Speaker 3 (30:21):
Blake, there's a lot to go through today. And to
kick it off, we've got a great Money Talks smailer
of the Week entitled seven Principles of long Term Investing
goes through Alkan and assets taken, advantage of opportunities when
to start trick is now. So a lot of great

(30:42):
materials in there. So if you like your copy, give
her office a call nine to five to two five
four four two A three seven, or go online to
Sandbold fg dot com and let us know you'd like
the most recent money talksmailer perfect.

Speaker 2 (30:55):
So as we think about retirement, one of the key
things for a lot of people is are you prepared
for health care and long term care costs? And when
you think about it, it's a topic that a lot
of people don't want to talk about, is the need
for long term care because you could live a very
long life. Will some of it be under assist of

(31:16):
living or home care, some of it under nursing home care.
People are living longer in general, but the percentage of
people using assist of living or nursing home care is increasing,
not decreasing because of people living longer. So the high
cost of that, you know, it can be something that's
a bit daunting for people when you sit and think

(31:37):
about in today's costs. For example, you could be dealing
with adult day adult day healthcare, so to speak. You
could be looking at three to four thousand dollars per
month on that you could be assist of living. Right
now is the average projected out ten years from now
will be as high as well eight to twelve thousand

(32:00):
dollars per month, not per year, but per month. And
then nursing home care right now is for a semi
private room, the average in twenty twenty four was twelve thousand,
one hundred and sixty seven dollars. In ten years it's
projected as the average to be sixteen thousand, three hundred
and fifty one dollars per month. That's two hundred thousand

(32:20):
dollars a year roughly so. And in the private room
currently probably around thirteen thousand dollars a month, and that's
projected to be seventeen thousand to eighteen thousand per month
ten years from now, and that might be low actually,
So if you had to come up with two to
two hundred to two hundred and fifty thousand dollars per
year for care, and all your money's in a four

(32:44):
to oh one k or an ira, and you have
to pay tax on that money first to spend you know,
to get to fifty, you might have to I'm just roughing,
you might have to take four hundred thousand dollars I'll
pay the tax to get two fifty. How many of
those years do you really have? How many of those
years do you want to pay for it out of pocket?
So the other side to it is insurance is an option.

(33:06):
There are what are called hybrid You can do long
term care insurance by itself. You buy a certain amount
of benefit per day, buy a certain amount of years
of coverage, and you can put an inflation cost of
living increase on those either three or five percent increase
per year, So what you buy today will step up
three to five percent per year for the future. But

(33:29):
a lot of people are looking at that and say, well,
what if I buy that and I never ever use it.
So the hybrid policies that are becoming more and more
popular are you buy a life insurance amount death benefit,
and then that can be used for, depending on the policy,
home care, assist at living or nursing home coverage. So
if you had a million dollar policy, I'm just using

(33:50):
that as an example, you could turn around and say okay,
I'm going to start. If you qualify, you have to
go through qualifying for receiving the benefit. But an example
could be maybe you're taking out one hundred thousand dollars
a year for ten years, you could use the death benefit.

(34:10):
Start spending that down for care. It's income tax free
if you use it for care as well, and then
if you don't use it all up, the balance of
it is a regular death benefit or life insurance death benefit.
So you're taking money out tax free for long term
care needs. But the balance that you did not use
is not wasted away. It doesn't disappear. It goes as

(34:32):
a death benefit to whoever your beneficues are lined up for.
So it's a way to leverage your dollars protect the
income or the investments that you work so hard to grow.
But we do recommend people to look at it. We're
not saying it's right for everybody to have it, but
we do recommend everybody should at least look at it
and then decide. Because what does it cost, you have

(34:54):
to look at your budget make sure it fits into
that as well. But because people are living longer, the
need is ever increasing and the costs are not going
to go down for care.

Speaker 3 (35:05):
Yeah, well, you know, I think it's it's definitely important
to look at and understand those types of policies because
they're they're very different than how long term care policies
used to be. And you know, I think a lot
of people have looked at past long term care policies
and said, well they you know, a lot had large
premium increases year over year for a number of years.

(35:25):
These policies are different, so they're you know, I think
it's worth looking at exploring for a lot of people
to understand what it actually is, how the benefits are paid,
how the premiums are structured on there different type of chassis.
The other thing that I thought i'd mentioned as well,
to look at the long term care cost projections that
we had. Gen Worth is actually has a wonderful website

(35:47):
on that and so Jenworth is one of the large
long term care companies out there.

Speaker 4 (35:52):
You can actually go to their.

Speaker 3 (35:53):
Websites and it has you know, an end consumer side
that you can plug in your zip code and it
can show you know, across the country what current costs
are and what current costs are projected in the future
based off where you live, so it can be really helpful.
The numbers we went through today, we're obviously on Minneapolis
type area.

Speaker 4 (36:12):
You know, if you're in.

Speaker 3 (36:13):
North Dakota, it's going to be different than being in
New York, so important to look at those numbers as well.

Speaker 2 (36:20):
Yeah, so the thing that we emphasize is analyzing it first,
then making the decision second. Get the data, yep, absolutely so.
Other things to keep in mind on the checklist would
be are your documents and beneficiaries up to date, So
keep in mind beneficiaries can override a will or a
trust if you have named beneficiaries, and this is really

(36:42):
important when you're looking at reviewing your documents. The importance
of a state documents such as a will or trust,
or power attorney or healthcare directive. If these are terms
you're not familiar with, they are ones you should become
familiar with, and we can help you direct you to
the right attorney for drafting the wills and trusts those
types of things. Do you have a plan for the unexpected?

(37:04):
You know, looking at different things, how do you handle
if the market has a downturn, or health events or
family needs or job losses. There's a lot of companies
that are downsizing their employees too, So if you're not prepared,
you might be sitting there without any emergency fund. So
really actions to think about. Review your documents, review your beneficiaries,

(37:28):
really look at your timeline to retirement, make sure you
are on track. Request a retirement projection, give us a call.
We will put that together for you. Very very helpful,
we feel, because otherwise you're kind of guessing it's going
to work. We can show you data wise how it
can work for you, and then look at your long
term care needs and plans along with your healthcare because

(37:51):
as everybody knows, healthcare premiums are not inexpensive now, they
can put a big dent in your financial future. And
if you're working with advice or with an advisor, make
sure they're earning your business, is the bottom line. We
do talk with our clients and I would say, on
an average four times a year, are you getting the
attention you deserve if you're not team up with a

(38:14):
company like us that will earn your business, And I
think that's really important. Important you're making a decision who's
going to be on your team for the rest of
your life. Ideally, and because we have advisors all ages
and stages. We can say that we're going to help
you throughout your whole lifetime, which is also important.

Speaker 1 (38:31):
To know absolutely. Any last thoughts Blake on this well.

Speaker 3 (38:36):
I think key takeaway is the time to take action
on this is now. You know, the more data you have,
the better prepared you're going to be. And there's no
age that's too early to start looking at this. You know,
the more time you have on your side, the better
the more informed you'll be. But you know there's there's
always planning, options and changes that you can make as

(38:57):
you go with things, and I think informed is the
right stance to.

Speaker 1 (39:01):
Take absolutely, And the best way to get started would
be

Speaker 3 (39:04):
To what give us a call nine five two five
four four two a three seven or go online to
sandfold f g dot com