April 4, 2026 • 41 mins
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Speaker 1 (00:00):
News Talk eleven w y s and welcome to the program.
It's called The Retirement Clinic and it's hosted by Aaron
Cowall with Creative Planning. I'm Paul Cronforce. Good morning to you, Aaron.
I know, a busy, busy show today. Also happy yes
two morning, Happy Easter.
Speaker 2 (00:18):
Erin, Happy Yeah, Happy Easter to you and your family.
It's a wonderful a wonderful season.
Speaker 1 (00:26):
Indeed, it is Final four tonight. We're just talking off
here all the stuff Masters is coming up for sports fans. Wow.
And it's the first show of spring for the Retirement Clinic.
Lots of cover on today's show. How you bet Erin?
Speaker 2 (00:42):
Oh, I've been great. I've been great. I'm always great though,
But yeah, it's a great season. Family is doing fantastic.
You know, we're talking about you Final four and all that.
And there's a I saw something online that you know,
I don't know. I think it's real. My cursory inspections
showed that it was. It was this furniture store I
(01:06):
assume out of Connecticut. They they had a free furniture
promotion that they are running from January twentieth to March
first of this year. So before the tournament started, they
said free furniture. If the men's and women's Yukon basketball
teams both play, not win, both play in the twenty
(01:27):
twenty six National Championship game, everything.
Speaker 3 (01:30):
You buy is free. Oh and they're both in the
final four.
Speaker 1 (01:35):
Oh boy, that's there's another guy down in. What company
is this that did this?
Speaker 2 (01:40):
Aaron Mattress Mack. Well, this one is Jordan's furniture. That
was Mattress Mack.
Speaker 1 (01:45):
That's who does that, Mattress Mason. That's in Houston. You're yeah,
thanks for the reminder. That is uh, that's a bold
thing to do, you know, because we won't know until
after tonight obviously. But the final four. Yeah, and the
Badgers bought out so early in that first round. But
some of these games like that that Yukon final shot
by the freshman to beat Duke, oh, knocking off number
(02:08):
one Duke. Just that's why they call it March madness.
How about the markets and it's insane? Does it correlate
to your world these days?
Speaker 2 (02:20):
Well, that's what we deal with every day, right, market madness,
we do. And you know, and so that's you know,
that's how that's how it always is so we're used
to that. And but it's but it's it's great. The
long term, everything will be just fine. I believe so
at least it always has been.
Speaker 4 (02:39):
Uh.
Speaker 1 (02:40):
And you look to history to be an indicator of things,
whether it's war, whether it's you know, things that are
are new to us. But we want to learn from
history obviously not to panic as longtime investors when any
little thing happens, you know, and and when you see
panic and social media and mainstream news, you tend to
(03:00):
see other people panic and it's snowballs and you're the
you're the voice of reason erin to talk about this
because it does markets seem to be cyclical.
Speaker 2 (03:10):
I tell my wife that all the time. Yes, I
tell my wife all the time that I have the
voice of reason. Doesn't really always agree with me?
Speaker 1 (03:16):
Does it work?
Speaker 3 (03:18):
Maybe she loves it when I say that she's mad.
Speaker 1 (03:20):
You know, I am the voice of reason, the calling voice.
Speaker 2 (03:25):
Well that's right up there, that's right up there with
your your acting more like your mother, you know, that's uh.
I think she she would react the same way. Smart
use that.
Speaker 1 (03:35):
I would never use that. I may have thought that before,
but I would never say that out loud don if
you're listening, just so you know. Okay, now what we
have to dress today. First off, to tease the show,
the Retirement Clinic dot com Creative Planning dot com for
more information. Phone calls are always welcome, so you can
directly call to six' two five two two forty forty
(03:58):
for all the locations in, Town Blue Mount road And.
Brookfield then you've Got, Delafield Racine, Port, Washington, wisconsin Creative
planning license in all fifty. States you've got other offices
In phoenix and also In Cape, Coral. Florida So, aaron
you have clients all over the. Country but as we
go back to two thousand and, one together with The
Kowal Investment group and Now Creative, planning you've GOT i
(04:22):
guess more tools in that tool belt is WHAT i
use every. Week that's the resources you. Have it's. Unbelievable, yeah, IT.
Speaker 2 (04:30):
I mean it is, crazy the amount of resources that
we have from you, know we've always BEEN i think
done a great job of working with individuals and high networth,
people but the tools That Creative planning has at their,
disposal at our disposal is. Tremendous there's a lot of
professionals that we can lean. On we've got in house,
(04:53):
council in house estate, planning in house tax, prep and, many,
many many services that go in. THERE i, mean you
can spend a whole show on the services provided. There,
uh you, know and and it's. FANTASTIC i, mean there's
a reason that The Wall Street journal recently named us
as the best financial planning uh financial advisory firm in the,
(05:16):
country and that's you, know there's no there's a reason
for that because it's the level, care the level of
service that we provide for our clients every single, day
and that's never going to. Change that's why we joined
up with you, know with with the. Best and so
we've got some good topics. Today you, KNOW i THOUGHT
(05:36):
i bring in just getting into The march madness Theme i've,
got you, Know so we've we've got some great. Topics
so bracket, management see WHAT i did their bracket. Management
why MOST i noticed what you did? There why why
most of the tires are still paying overpaying? Taxes, uh we've
(06:00):
got some market concentration, risks so you, know we talk
about the magnificent, seven you, know and what it means for.
Retirees and then my. Dad Jeff kohals has something for us.
Today and then we have in the wealth management segments
of acid protection planning what actually works versus, myths and
(06:24):
so we've got a lot of good things to talk
about and.
Speaker 3 (06:29):
We can jump. Right oh and also here we'll start with.
Speaker 1 (06:32):
Recommending, YES i wanted to mention What jeff is going.
To this is after the first commercial, break so fifteen
twenty minutes from now we'll get Into jeff got a
segment on taking social SECURITY i think at age, seventy
in other, words waiting putting it. Off so that's All i'll.
Say but it's a good segment on social, security and
you do have your choices there and when you can take.
(06:53):
IT i, know it's a big part of what you
do when you do a rep retirement. Plan when do
you want to start taking Social and it's it's interesting
when you can start at, six you know.
Speaker 2 (07:06):
It, is and so there's arguments to be. Made and
actually that ties into my first, topic you, know bracket,
management because it really does matter when you take Social,
security and so you know there's some argue take it
at sixty, two some at, seventy and depends on what
you want to focus. On do you want to have
(07:28):
a focus on getting as much income as possible or
having as Much i'm, sorry having as little tax as.
Possible so you, know so because we'll get into it,
then you, know because most retirees or people closer retirement
think in terms, of you, know pay as little tax
as possible this, year AND i do feel that's the wrong.
(07:52):
Mindset we should be thinking about lifetime. Taxes sometimes paying
more today saves a lot. Later it is, hard, Though.
Paul it is hard to to intentionally pay more today
when you, know uh that you're going to have to
pay more down the. Road and, so, uh you, know
(08:13):
we got to get out of that.
Speaker 3 (08:13):
Mindset.
Speaker 2 (08:14):
Uh you know that that so that changing that that shifts.
That you, know that shift changes. Everything it's the core
of good. Planning you. Know tax brackets are, progressive you
pay more more income you, have but retirees don't use them.
Strategically many leave lower brackets unused and get forced into
higher brackets later, on especially once rm ds. Hit that's
(08:36):
avoidable with, planning so roth conversions can be the primary
tool for bracket. Management you intentionally fill up lower tax
brackets and this reduces future required. Distributions it also creates
tax free income. Later done, right it's incredibly. Powerful so
you could fill up those lower, brackets get to a
higher tax. Bracket don't go into that higher tax bracket
(08:57):
with THESE roth. Conversions uh and then you will have
a lot of tax free income in. Retirement the mistake
is converting too much at. Once that can push you
into higher tax brackets. Unnecessarily so it's you, know good
planning is. Precise you don't want To you want to
top off brackets and not blow through. Them so it
requires annual, monitoring which you, know which we, do, uh
(09:21):
you know for for. Clients Uh, So so security timing
plays a big. Role taking it early versus delaying changes
your tax. Picture it has an impact on provisional income,
calculations and that affects how much is. Taxed it's not
just about the benefit.
Speaker 3 (09:38):
Size Uh.
Speaker 2 (09:40):
So r M d s are the biggest tax. Trap
once they, start you lose. Control they can push you
into higher brackets. Automatically that's why pre r M d
planning matters so. Much you want to shrink that future.
Problem Uh AND irma brackets create hidden. CLIFFS a small
in increase in income can Raise medicare premium. Significantly that's
(10:04):
effectually a stealth tax. Bracket management must INCLUDE. Irma most
advisors ignore, this uh and SO, uh this is what
ierma is that there's certain certain break points where if
your income it hits over a certain, amount you you'll
be paying more in your medical Uh medicare taxes which you,
(10:24):
know which Your medicare, PREMIUMS i should, say which is
not normally an ideal.
Speaker 3 (10:28):
Outcome.
Speaker 2 (10:31):
Right capital gains stack on top of ordinary. Income so
and that surprises many. Retirees SELLING. Uh selling investments can
push you into higher. Brackets and timing, Matters asset location matters.
Too married couples have wider brackets than single. Filers but
eventually one spouse, passes and so you need to you
(10:55):
need to, plan you, know plan for. That the surviving
spouse faces compressed rackets and that's a major long term tax.
Speaker 3 (11:01):
Issue planning needs to account for.
Speaker 2 (11:03):
It many retirees hold too much in pre tax accounts
that limits. Flexibility every dollar withdrawn is taxble This, uh
this creates a tax. Bottleneck diversification solves. This we have
we talked about. That i've talked about that with clients
in on the radio show for. Decades it's weird to say,
decades you, know because you know you have you talk
(11:27):
about diversification between stocks and bonds and you KNOW us
and foreign you, know all over the. Place and so
you want, to you, know make sure that you have
your taxes in different buckets so that you can pull
and minimize what you're paying in in taxes so uh
(11:48):
or or or do it strategically so that you're not
hitting different income levels that you don't want. To, so you,
know the many, retories LIKE i, said to hold too
much in pre tax and limits. Flexibility every dollar withdrawn
is taxbill and creates a tax. Bottleneck and so we'd
(12:08):
see a lot of clients have their money in their
home and their four AND k and so we want
to be looking at different options if there's a wroth
forrow AND k or uh doing back back to a
wroth conversions and we're trying to trying to get, that,
uh that pre tax dollar amount down so that you
can invest in post tax and let that let that grow. AGGRESSIVELY.
(12:33):
Uh tax los harvesting is under used in. Retirement it
can offset gains and reduce, taxes especially valuable and tax will.
Accounts it's not just for younger. Investors it still. Matters you,
KNOW i do this with my my own. Investments you,
know it's you have, heavy heavy accountant and and we're
(12:54):
using tax los. Harvesting it's, uh it's really the efficient
where we do it. Automatically now with the tax loss,
harvesting it's it's called we use direct. Indexing so you're
buying the index or buying several, indices and if there's
tax opportunities to realize gains offset, losses it automatically takes
(13:17):
care of, that automatically, sells automatically Buyas So i'm not
making any. Recommendations but if you own, coke for, example
and there's an opportunity to sell, it you you don't sell,
it just sit and. Cash you sell coke and buy,
pepsi which is very very, similar but it's not. Identical
(13:38):
and uh it's and you're still. Invested and then there's
something called the wash.
Speaker 1 (13:42):
Rule to be, clear we're talking about the, stock, Right,
Aaron we're not talking about buying the. Car BECAUSE i prefer.
Speaker 3 (13:48):
COKED i prefer pepsi.
Speaker 2 (13:52):
Overcoat do you really and my, Wife oh, yeah my
wife prefers doctor pepper Overbil.
Speaker 1 (13:57):
Oh doctor pepper is now. SURGING i think it's a
number one soft drink in the. Country it.
Speaker 3 (14:01):
Is it's. Amazing it's. Crazy, yeah and not many places very.
Speaker 1 (14:07):
Good if you go and just order, one just do
a little a social, experiment you'd be shocked at how
many places still don't offer, it and yet it's the
number one beverage. Soul but, anyway just to back up
a little, bit talking about those, STOCKS i said something
stupid and, silly BUT i had to jump. In it's
coch OR pepsi your. FAVORITE I, ALSO i heard you
throw our own acronyms, again SO i want to explain
(14:29):
what they are because OUR r AND d is often
mentioned on the. Show you deal with this stuff every, day.
Right it means required minimum distribute, distribution, right, yes so
you got.
Speaker 3 (14:41):
It.
Speaker 2 (14:41):
Distribution so the taxman wants their pound of flesh and
uh and so what's your you, know certain age depending
on how old you, are you, know seventy, two seventy
and a half for a long, time seventy three now for,
Something so you have to you you were required as
(15:03):
the name, implies requirement. Distribution you you have to take
money out a certain percentage of your assets out of
a four out of A I ra.
Speaker 3 (15:16):
And you you have you.
Speaker 2 (15:17):
Have take them out and pay tax on. Them you
don't have to spend. Them it's also a lot of
people THINK i spend. It, no, no you can reinvest. It
but they want, that they want their pound of, flesh
and so then you have to uh pay the tax
on that and so.
Speaker 3 (15:33):
If you but it can be pretty.
Speaker 2 (15:35):
High it, starts you, know it starts off relatively, low
but as you get, older the percentage of shift takeout
goes higher and so you so those taxes can get
get to be very. High then you're you could get you,
know INTO irma territory if you're taking out too, much
if you're required to take out too. Much so which
is IN irma is a higher premium surcharge that stands
(15:59):
for income really monthly adjustment.
Speaker 1 (16:01):
Amount am glad you mentioned income related monthly adjustment. Amount you,
know some might say it's a good problem to. Have
i'm required to take distribution out of money THAT i
saved AND i worked so hard and all these years
went By, aaron that's a good. THING i, mean it's
a good problem to. Have but just you must be
aware certain you're going to pay tax on it. Eventually
(16:24):
the beauty of a wroth when we talk about, wroth
is you pay the tax up front at the time
typical four to one. K it's going to be WHEN
i take that, distribution.
Speaker 2 (16:32):
Right, yes, yeah and so you're you have to take
you have to take. That you're gonna have to pay
the tax. Man you got to plan out in advance
and that just let it, be not let it, happen
to be proactive about.
Speaker 1 (16:46):
It, yeah and not be.
Speaker 2 (16:47):
Surprised we do very in depth planning and we are
resources that we have At Creative. Planning we can do
a tax projection for you to see what you, know
to see how much you're going to be, owing and
we end the will create a strategy for.
Speaker 3 (17:01):
You and that's part of what we do for.
Speaker 2 (17:02):
You it's it's you're not going to find that really anywhere,
else you, know and so the you, know we want
to avoid the taxt torpedo From Social. Security you, know
as is income, rises more benefits become, taxable and it
creates very high effective tax. Rates it catches people off,
Guard so planning avoids. It good bracket management is. Ongoing
(17:23):
it's not a one time. Decision markets change, laws change income.
Changes you need to adjust the annually and that's where
most people fall.
Speaker 3 (17:31):
Short so if.
Speaker 1 (17:33):
People have questions about any of, these if you've if
you're not working with an, advisor want to meet with,
somebody just feel free to reach. Out Contact Creative planning
at two six two five two two forty. Forty this
show The Retirement. Clinic pretty easy website to. Remember The
Retirement clinic dot com shows are podcasted and information on
(17:54):
all the locations to reach OUT uh with your. Questions
aaron didn't want to interrupt you because you good stuff
and coming up. Soon Jeff cole all talking About Social
security as well that. Time everything's about. Timing but would
you say no two clients are like everybody's a custom
situation right from your point of, VIEW i Think aaron.
Speaker 2 (18:12):
Right every portfolio is custom crafted for the. Client it's
not model. Portfolios it's custom crafted that we BUILD uh
based off of principles that we believe. In, okay so
next that WE i want to talk about is market
concentration risk and what it means for retire. REASON a
lot of people think that they're invested in the market
in you know in different areas that or just straight
(18:35):
UP s AND p five, hundred that they're that they're,
diverse and that sometimes you want to be concentrated in some,
areas sometimes you don't want to be constrated in some.
Areas and that's why we custom craft, these uh for
for our. Client so, uh you, know, uh there's something
called The magnificent. SEVEN i think that was a, movie
(18:56):
but that's not What i'm.
Speaker 3 (18:57):
Referring it.
Speaker 1 (18:58):
Was who is?
Speaker 2 (19:01):
It, well that's a whole other. Topic This magnificent seven
is you know is uh was the fanying. Socks now
it's called the mag. Seven it's so it's Alphabet, amazon
which Is. Google Alphabet's, Amazon i'm, Sorry alphabet it Is.
Google h Have, Amazon Apple meta which Is, Facebook, microsoft
(19:21):
In nvidia And. Tesla so they but together they represent
about thirty three percent THE s AND p five five hundred,
index as you know as earlier this, year so they
drive a huge portion of market. Returns it is not
an evenly evenly distributed. Index, now there are indexes out
there that you, know each it's. Equal it's called equal,
(19:44):
share so where each stock has an equal, share you,
know but this is THE sp five hundred is not.
That so you, know a lot of a lot of
the performance of THE s AND p is driven by
those seven, socks and a lot of people don't know.
That so it creates concentration. Risks so even if you
own an index fun you're still heavily. Exposed you could
be heavily, exposed and a lot of people don't realize.
(20:04):
That this level of concentration is historically. Unusual it's not,
unprecedented but it is. Notable markets have seen similar periods
potentially before. Corrections i'm not saying we're heading into a.
Correction that doesn't mean a crash is, coming but risk
could be, elevated and retirees are especially vulnerable to. This
they can't afford large draw downs and secrets of. Return
(20:26):
risk becomes. REAL a down term early in retirement is,
damaging and concentration amplifies that. Risk so manyfolio portfolios are
unintentionally overweighted. Tech even diverse fied funds lean heavily that,
way it's baked into the. Index you may think you're
diversified when you're. Not that's a hidden. Issue the performance
(20:46):
has been, strong which reinforces behavior investors chase what's working
that increases concentration. Further it's a feedback. Loop eventually that can.
Reverse you, know what was a virtuous, cycle you, know
becomes the off and so so eventually that that stops
In Canon, Winde so rebalancing is the simplest. Solution trim
(21:10):
winners add to underweighted. Areas it feels wrong, emotionally but
it's discipline. Investing this is where advisors add. Value you,
know it does feel. Wrong oh this is you, know
the stock is, Up i'm going to sell. It it's, like,
wait what are you? DOING i Think Warren buffett said
that stocks are the only asset that people don't want
to own when they're on. Sale so it's, like, well,
(21:32):
wait this stock is down twenty? Percent why would why
WOULD i buy? This, WELL i mean when you go
to the grocery store and see that eggs are nine
nine cents for a dozen or fifty cents for a,
DOZEN i would.
Speaker 3 (21:43):
Buy more eggs you're. Buying but, yeah but, stocks it's, like,
wait that's. DOWN i don't want.
Speaker 2 (21:49):
That even if the you, know you do your homework
and the underlying fundamentals are, strong you, know it is,
emotional so you, know He buffett also you'll be greedy
when others are fearful and feel fearful when others are.
Greedy Uh, so but you have to be, diverse you.
Know Peter maluke talks about that all the.
Speaker 3 (22:10):
Time is to be.
Speaker 2 (22:11):
Diverse you can't time the. Markets you can't and is
incredibly difficult to beat the. Markets so let's invest in
and take advantage of the good growth in the, markets
and and we manage the risk end of. That so
rebalancing is is a. Solution it's disciplined. Investing you. Know
equal weight strategies are getting more. Attention they reduce concentration,
(22:34):
risk but they also behave. Differently investors need to understand trade.
Offs it's not a free. Lunch you don't get the same.
PERFORMANCE i mean potentially, could but you. Don't you don't
get the it's not perfectly correlated uh, performance you, Know
and but it is you are having less risk if
it's if it's weighted. Differently international exposure is often. UNDERWEIGHTED
(22:57):
us dominance has been, strong but cycles shift. Overtime diversification
includes geography as. Well most portfolios are TO us. Centric
fixed income is finally attractive, again higher yields changes the
equation bonds can actually provide income now and they also
reduce equity. Risk this matters for. Retirees the biggest risk
(23:17):
is doing, nothing letting winners run on. Check that creates
portfolio in balance and overtime risk builds quietly then shows
up all at. Once behavior of bias plays a big,
role and recncy bias keeps investors in. Winners it also
keeps them in losers and keeps them out of the market.
Too and the markets have been have been beat. Up
(23:38):
is that it's, like well it's been, terrible now it's
going to continue to be. Terrible that's not always the.
Case so bottom line is that concentration has helped, returns
but it increases risk going. Forwards retirees need to manage that,
proactively not react after a.
Speaker 1 (23:53):
Downturn much of what you talk about as being, proactive,
right we talk about it all the, time getting ahead of,
things understanding the tax. Ramifications after the, Break jeff is
going to join us talking about social. Security when to take?
It you, know what's the earliest, again just for the
record here aeron.
Speaker 3 (24:11):
Sixty, two, right sixty, Two, yeah.
Speaker 1 (24:14):
And THEN i have to take it by a certain age.
Too right.
Speaker 3 (24:19):
Seventy by.
Speaker 1 (24:20):
Seventy, okay it'll. Kick you got that eight year, window
so that'll be, interesting so stay tuned for. That jeff's
you're going to come, back and Then, aaron you've got
in our wealth management and preservation. SEGMENT a good topic, Today.
Speaker 2 (24:34):
Yeah asset protection, planning what actually works versus Myth so
it's about legal structures and not hiding. Assets so we'll
get into all that different structures of protecting your.
Speaker 1 (24:47):
Assets it's all coming up On The Retirement clinic two
sixty two five to two forty forty to reach out
to creative planning On monday Through friday during The dani o'donald,
show during those three and FIVE pm news blocks with
those daily market updates whereas oil going this week up,
down The iran, situation so many things factor into the,
markets and those updates are done twice a, Day monday Through.
(25:09):
Friday of, course this show Every saturday since two thousand and,
one it's The Retirement clinic With Aaron. Kowal I'm paul
kronforst ON W i n will be.
Speaker 5 (25:19):
K i ran into this article about WHY i waited
until seventy to start Collecting Social security it got my.
Attention there are a number of our clients.
Speaker 4 (25:31):
THAT i have to make that. Decision for some they
don't have a.
Speaker 5 (25:34):
Choice they have to Take Social security early because they
need the, money or they lost their, job whatever. Happened
we have some clients that that was the. Case but
sometimes it makes sense to wait until age. Seventy Tom,
wilke this is again The baron's. Article Tom wilke is
a retired journalist From, Pittman New, jersey and he said
(25:59):
that he waited until eight seventy collect Social. Security let's
dive into. It he, says waiting isn't for. Everyone some
people need the income earlier in retirement to make ends.
Meet others may be in poor health and doubt that
they will live long.
Speaker 4 (26:12):
Enough to benefit from.
Speaker 5 (26:13):
Waiting, still others don't trust the government to deliver full,
benefits given social, scurities long term funding, challenges or the
possibility of congressional changes to shore up the. System, AGAIN
i think a couple of those are valid poor, health
doubt they might not live long. Enough, yeah start collecting.
(26:33):
Earlier especially if you have a history of long livers
in the, family you might want to delay. It but
if you have a history of people in your, family
or if your health isn't, such it may it isn't,
great it may make sense for you to take it
a little bit. Early back to the, ARTICLE i learned
(26:53):
that most had claimed benefits sometime between sixty two and
full retirement.
Speaker 4 (26:57):
Age of directly.
Speaker 5 (26:59):
Twenty PEOPLE i, asked only two waited until age. Seventy
that tracks with national data about ninety percent of New
Social security claims come from people younger than age seventy
according to The Social Security.
Speaker 4 (27:12):
Administration, okay now this is Again tom wilk saying why he.
Speaker 5 (27:20):
Waited based on financial and personal considerations and the suggestion
from our financial, ADVISOR i resolved not to take Social
security age sixty two and waited until at.
Speaker 4 (27:30):
Least full retirement.
Speaker 5 (27:31):
Age for a lot of, PEOPLE i think that makes
a lot of, sense and that's what we advise our
clients as. Well BUT i resolved not to take it
at age sixty, Two so full retirement for him was
sixty six years and two months after reaching full retirement
in twenty twenty, TWO i decided to hold off for
nearly four more.
Speaker 4 (27:48):
Years for, me the decision came down to a few.
Speaker 5 (27:51):
Factors first of, all he increases the survivor's benefit for his.
Wife so she is six years and four months than he,
is and this extra income could come in handy for.
Her what's, more he, Says, elizabeth it's his wife AND
i were fortunate to financially be prepared for. Retirement her
full time job covered our health, insurance so she was
(28:14):
still working full, time AND i supplemented our income with
contract work for newspapers and.
Speaker 4 (28:19):
Magazines that's a key.
Speaker 5 (28:21):
Point her still working gives him the ability to wait
until age seventy as. Well back to the. Article to
supplement our, INCOME i began taking penalty free monthly distributions
from THE Sep Individual Retirement account at age. SIXTY i
later tapped my WROTH ira for monthly checks starting at sixty.
(28:41):
Three this is WHERE i would start to disagree with.
Him was this a good? Idea i'm not sure markets
have been great had he left that money in the
WROTH ira for the last several, years chances are that
would have taken off, dramatically especially with our. Clients we
like to have most of growth in the ROTH ira
(29:01):
because it's tax free. Forever you cannot Transfer Social security
beyond your, spouse but you can transfer, assets and wroth
iras are one of those, assets and the individual retirement
account those are assets that you can transfer to other.
Speaker 4 (29:20):
People So i'm not SURE i would have done.
Speaker 5 (29:22):
That he felt that that was the best way to
do it to increase the amount of money that his
wife would, get to increase amount of money he was
going to get From Social security by waiting to age.
Seventy i'm not SURE i would have done. That back
to the article no. Regrets RECENTLY i found A Social
security statement from late twenty. Seventeen had they claim benefits
in twenty, EIGHTEEN i would have received seventeen hundred dollars a,
(29:45):
month about twenty two forty two two and forty two
dollars In january of twenty six. Dollars a full, retirement
my benefit would been twenty nine to. Eighty by waiting till,
seventy my benefit is just under four thousand. Dollars, now
this is a key. Thing my break even, point the
age at WHICH i will receive as much benefits and
(30:06):
BENEFITS i would have HAD i claimed WHEN i was first,
eligible is somewhere around eighty one or eighty, two depending
on cost of living. Increases that's WHERE i haven't even
had discussions with a friend of mine who's a, physician
a great. Guy he, SAYS i see people in their
eighties and they don't care whether they're breaking even at that.
(30:27):
Time they would rather have taken the money at age
sixty two or sixty five rather than waiting and waiting.
Speaker 4 (30:35):
Till eighty one or eighty two to break.
Speaker 5 (30:37):
Even on, that everybody's, different and that's why it's important
to work with a financial.
Speaker 4 (30:41):
Advisor there's no perfect time to take.
Speaker 5 (30:44):
It when people, ask what should you start, collecting let
me know when you're gonna, die and that would be
THEN i can tell you when the perfect time. Is,
well people don't know, That so the best thing to
do is see one of our great fiduciary advisors at
The Creative planning give our office call too six two
five two to four zero four zero two six two
five two to forty or go to The Retirement.
Speaker 4 (31:07):
Clinic dot com and work with one of our great.
Speaker 5 (31:10):
Advisers we can do a cash flow projection it's called
a vision builder to help you with your decisions on
Social security and everything else in your retirement.
Speaker 1 (31:18):
Plan, okay it's that time with the bare naked ladies
love that. SONG i always have IF i had a million,
Dollars why do we play?
Speaker 3 (31:25):
That?
Speaker 1 (31:25):
Well this is called the wealth management and the keyword preservation.
Segment Aaron cohal is back on The Retirement clinic And
I'm paul Crown. Forest what do you got for us
This saturday?
Speaker 2 (31:36):
Morning so we talked about. This, yeah asset protection planning
what actually works versus. Myths so asset protection is about legal,
structure not hiding. Assets if it feels like you're hiding,
something it's probably.
Speaker 3 (31:51):
Wrong courts see through.
Speaker 2 (31:52):
That proper planning is transparent and, compliant and that's the.
Foundation timing matters more than. Structure planning must be done
before a claim, arises and once there's a known, risk
options are. Limited courts can unwind lead. Transfers early planning is,
key you. Know so it's, like if you know you're
going to lose a, lawsuit don't go transferring all your
(32:14):
assets and, say, OH i don't have. Anything they'll unwind
that and you'll just be getting other people in trouble then,
too or may not even just, lawsuit but of debtors as.
Well so irrevocable trusts are one of the strongest. Tools
assets placed properly are outside your, estate but you give up.
(32:34):
Control that's a trade off many people do struggle with that.
Speaker 3 (32:40):
Is giving up.
Speaker 2 (32:41):
Control revocable trusts do not provide asset, protection and this
is a common. Misconception they help with the state, planning
not creditor. Protection it's an important, distinction and maybe many
people get this.
Speaker 3 (32:55):
WRONG i think.
Speaker 2 (32:56):
That if they have a revocable trust or their home
in a revocable, trust that it is somehow immune to.
Creditors that's you, know that's not the. Case h LLCs are,
useful but they're. Limited they protect inside, liability not always.
Outside so personal guarantees can pierce the protection structure, matters
(33:17):
and it's not. Bulletproofs but if you have a, business
then you HAVE uh your your business in AN llc
and you have a, loan you, know loan for your
business if you're building a, building or buying another company
or or. Whatever you, know there's a million things you
can use loans FOR, uh and you have AN llc
figuring you're not personally. EXPOSED a lot of these loans
(33:39):
come with a personal guarantee where you have to say,
YES i will put up my personal assets uh as
collateral in order to get this. Loan and and so
that is something people, think you, know don't really think
of that's. Personal you, know it's a it's not, personal
it's in AN. LLC, uh what's limited liability. Corporation well
(34:03):
that's not always the case because that that personal guarantee pierces.
That so you, SAY i don't care if about THE,
LLC i am still. Liable and banks will do that
because they'll, SAY i don't care if you have, That
i'm getting my money back from. YOU i will go
after after you. Personally and there's no way. Round and
(34:24):
you will have to agree to this if you want my.
Loan if, Not i'll find somewhere else that'll that will
give you that will not want a personal, Guarantee you're
not going to find.
Speaker 3 (34:32):
Anybody.
Speaker 2 (34:33):
Uh and so insurance is the first line of. Defense
umbrella policies are. Inexpensive you, know we live in such
a litigious. Society people suit at the drop of a.
Hat always get. That there's very few things in financial
planning THAT i can, say you, know always get almost
always say get an umbrella liability. Policy you you get
(34:58):
it's it's cheap insurance dependings on the dollar get at
least a million. Dollars we do an analysis for you
that that can look and see how much you really,
need and you, know and they cover many common, risks you,
know you. Know then legal structures are a second, layer
but both are, needed you. Know domestic domestic acid protection
(35:20):
trusts have mixed. Effectiveness some states allow, them not all
states recognize, them creates uncertainty us them. Carefully offshore trusts
are stronger, legally but more complex and. Expensive they also raise.
Scrutiny they're not for. Everyone best for high risk situations.
There you know it's, expensive but you're going to be paying,
(35:40):
more and you, know if it's, offshore you run risk
of other governments getting getting. Involved gifting strategies can reduce,
exposure but must be done. Properly fraudulent conveyance rules, apply
intent matters and documentation is. Key retirement accounts often have strong.
(36:00):
PROTECTION arisa plans are very well. Protected i ras have
varying protection by. States you got to know the rules
and don't, assume, uh you, know don't assume. Anything you,
know the like like FOUR o one k's are pretty
well protected against creditors that they are for retirement and
not current, assets you, know and so you got to,
(36:24):
uh you, know you've got to be aware of the
laws and it's. You that's what another reason people work
with us is we have access to, this we know
what's going, on we know the, laws and we can
help make sure that you're setups that you don't have
to deal with a lot of this.
Speaker 3 (36:37):
Stuff.
Speaker 2 (36:38):
Uh joint ownership can create. Risk one spouse's liability can
have an impact on shared. Assets so tidally matters more
than people, realize and it's often, overlooked and then business
owners have higher. Exposure proper entity structure is is. Critical
(36:59):
so separating still in business assets. Matter co mingling is very, Dangerous.
Paul so you you don't really want to have you,
know your personal and your business, expenses, uh in the same.
Company you definitely want to have some sort of legal
structure set up if you're if you're in business at,
all because IF i mean if if it doesn't have
(37:20):
to be a big, business if it's just, you if
you're in the, trades if you're handyman or, whatever and
you don't have, asset you have have the business structures
and somebody something fails and you couldn't even be might
not even be your, fault but some uh something fixed. Fails,
uh it could be a faulty you, know made. Product,
yep you could be held. Liable so you got to have,
(37:43):
that you, know that legal structure set up in, place
uh to shield you from. That so the biggest myth
Is i'm too small to worry about. This no False
uh lawsuits don't target only the ultra. Wealthy mid level
wealth is often target because it's collectible and so good
(38:05):
asset protection is layered, insurance legal, structures and. Planning no
single solution is. Enough it's about reducing, exposure not eliminating it.
Speaker 1 (38:14):
Entirely this is why you may need help or assistance
from a financial, advisor a CERTIFIED a certified financial, Advisor Creative,
planning big shout out with What Wall Street journal recognized
you as the best in the country for the registered investment.
Advisor we have a thing at the end of the
show that congratulates you From Wson. Management we've been mentioned
(38:37):
in this for three. Weeks it's a very big. Deal
so if you want to reach out To Creative, planning
talk To Aaron cohal or one of the many advisors
all these locations around, Town Creative planning dot, com The
Retirement clinic dot com or call two six two five
two to forty forty With aaron On Paul. Kronforest there's
more coming up on wisn wys In Retirement. Clinic as
(38:59):
we come to a close This, saturday we are back Next.
Saturday Every saturday morning at ten. O'clock Aaron kolewall great.
Stuff IF i have a, Question.
Speaker 2 (39:10):
If you have a, question give us a call two
six two five two two.
Speaker 3 (39:15):
Four zero four.
Speaker 2 (39:16):
Zero reach Out Creative, Planning Creative planning dot, com The
Retirement clinic dot. Com Follow Creative planning on all the.
Socials there's some fantastic information that gets put out, there
and you, know reach out to.
Speaker 3 (39:29):
Us we're here to.
Speaker 2 (39:29):
Help uh AND, UH i think we do a, tremendous tremendous.
Speaker 1 (39:33):
Job with locations all over Southeast, Wisconsin, brookfield right On
Blue Mountain road In. Delafield We'recine, Port, Washington. Wisconsin In Cape, Coral, Florida, Phoenix,
arizona license in all fifty. States The Retirement clinic Dot
com behalf Of Aaron. Kolewall thanks for joining. Us, everybody
have a Blessed easter. Tomorrow enjoy your family and enjoy
(39:56):
Your easter tomorrow as. Well we're back Next. SATURDAY Wism
Milwaukee news is coming up.
Speaker 6 (40:01):
Next Creative planning was ranked By The Wall Street journal's
byside as the best INDEPENDENT ira for comprehensive wealth management
In february twenty twenty. Six this ranking is not based
on any specific time. Period the preceding program is furnishd
By Creative, planning AN sec registered investment advisory. Firm Creative,
planning along with its Affiliate United Capital Financial, advisors currently
(40:23):
manages or advises on a combined three hundred and twenty
five billion dollars in assets as Of june, thirtieth twenty twenty.
Four the host works For Creative, planning and all opinions
expressed by the host and or their guests are solely
their own and do not necessarily represent the opinion Of Creative.
Planning the show is designed to be informational in nature
and does not constitute, investment tax or legal. Advice different
(40:43):
types of investments involve varying degrees of, risk and there
can be no assurance that the future performance of any
specific investment or investment strategy including those discussed on the,
show will be profitable or equal any historical performance. Levels
the information contained herein has been obtained from first deemed,
liable but is not. Guaranteed if you would like our,
help request to speak to an advisor by going to
(41:04):
creative planning dot. Com Creative, planning tax and legal are
separate entities that must be engaged.
Speaker 3 (41:10):
Independently
News Talk eleven w y s and welcome to the program.
It's called The Retirement Clinic and it's hosted by Aaron
Cowall with Creative Planning. I'm Paul Cronforce. Good morning to you, Aaron.
I know, a busy, busy show today. Also happy yes
two morning, Happy Easter.
Speaker 2 (00:18):
Erin, Happy Yeah, Happy Easter to you and your family.
It's a wonderful a wonderful season.
Speaker 1 (00:26):
Indeed, it is Final four tonight. We're just talking off
here all the stuff Masters is coming up for sports fans. Wow.
And it's the first show of spring for the Retirement Clinic.
Lots of cover on today's show. How you bet Erin?
Speaker 2 (00:42):
Oh, I've been great. I've been great. I'm always great though,
But yeah, it's a great season. Family is doing fantastic.
You know, we're talking about you Final four and all that.
And there's a I saw something online that you know,
I don't know. I think it's real. My cursory inspections
showed that it was. It was this furniture store I
(01:06):
assume out of Connecticut. They they had a free furniture
promotion that they are running from January twentieth to March
first of this year. So before the tournament started, they
said free furniture. If the men's and women's Yukon basketball
teams both play, not win, both play in the twenty
(01:27):
twenty six National Championship game, everything.
Speaker 3 (01:30):
You buy is free. Oh and they're both in the
final four.
Speaker 1 (01:35):
Oh boy, that's there's another guy down in. What company
is this that did this?
Speaker 2 (01:40):
Aaron Mattress Mack. Well, this one is Jordan's furniture. That
was Mattress Mack.
Speaker 1 (01:45):
That's who does that, Mattress Mason. That's in Houston. You're yeah,
thanks for the reminder. That is uh, that's a bold
thing to do, you know, because we won't know until
after tonight obviously. But the final four. Yeah, and the
Badgers bought out so early in that first round. But
some of these games like that that Yukon final shot
by the freshman to beat Duke, oh, knocking off number
(02:08):
one Duke. Just that's why they call it March madness.
How about the markets and it's insane? Does it correlate
to your world these days?
Speaker 2 (02:20):
Well, that's what we deal with every day, right, market madness,
we do. And you know, and so that's you know,
that's how that's how it always is so we're used
to that. And but it's but it's it's great. The
long term, everything will be just fine. I believe so
at least it always has been.
Speaker 4 (02:39):
Uh.
Speaker 1 (02:40):
And you look to history to be an indicator of things,
whether it's war, whether it's you know, things that are
are new to us. But we want to learn from
history obviously not to panic as longtime investors when any
little thing happens, you know, and and when you see
panic and social media and mainstream news, you tend to
(03:00):
see other people panic and it's snowballs and you're the
you're the voice of reason erin to talk about this
because it does markets seem to be cyclical.
Speaker 2 (03:10):
I tell my wife that all the time. Yes, I
tell my wife all the time that I have the
voice of reason. Doesn't really always agree with me?
Speaker 1 (03:16):
Does it work?
Speaker 3 (03:18):
Maybe she loves it when I say that she's mad.
Speaker 1 (03:20):
You know, I am the voice of reason, the calling voice.
Speaker 2 (03:25):
Well that's right up there, that's right up there with
your your acting more like your mother, you know, that's uh.
I think she she would react the same way. Smart
use that.
Speaker 1 (03:35):
I would never use that. I may have thought that before,
but I would never say that out loud don if
you're listening, just so you know. Okay, now what we
have to dress today. First off, to tease the show,
the Retirement Clinic dot com Creative Planning dot com for
more information. Phone calls are always welcome, so you can
directly call to six' two five two two forty forty
(03:58):
for all the locations in, Town Blue Mount road And.
Brookfield then you've Got, Delafield Racine, Port, Washington, wisconsin Creative
planning license in all fifty. States you've got other offices
In phoenix and also In Cape, Coral. Florida So, aaron
you have clients all over the. Country but as we
go back to two thousand and, one together with The
Kowal Investment group and Now Creative, planning you've GOT i
(04:22):
guess more tools in that tool belt is WHAT i
use every. Week that's the resources you. Have it's. Unbelievable, yeah, IT.
Speaker 2 (04:30):
I mean it is, crazy the amount of resources that
we have from you, know we've always BEEN i think
done a great job of working with individuals and high networth,
people but the tools That Creative planning has at their,
disposal at our disposal is. Tremendous there's a lot of
professionals that we can lean. On we've got in house,
(04:53):
council in house estate, planning in house tax, prep and, many,
many many services that go in. THERE i, mean you
can spend a whole show on the services provided. There,
uh you, know and and it's. FANTASTIC i, mean there's
a reason that The Wall Street journal recently named us
as the best financial planning uh financial advisory firm in the,
(05:16):
country and that's you, know there's no there's a reason
for that because it's the level, care the level of
service that we provide for our clients every single, day
and that's never going to. Change that's why we joined
up with you, know with with the. Best and so
we've got some good topics. Today you, KNOW i THOUGHT
(05:36):
i bring in just getting into The march madness Theme i've,
got you, Know so we've we've got some great. Topics
so bracket, management see WHAT i did their bracket. Management
why MOST i noticed what you did? There why why
most of the tires are still paying overpaying? Taxes, uh we've
(06:00):
got some market concentration, risks so you, know we talk
about the magnificent, seven you, know and what it means for.
Retirees and then my. Dad Jeff kohals has something for us.
Today and then we have in the wealth management segments
of acid protection planning what actually works versus, myths and
(06:24):
so we've got a lot of good things to talk
about and.
Speaker 3 (06:29):
We can jump. Right oh and also here we'll start with.
Speaker 1 (06:32):
Recommending, YES i wanted to mention What jeff is going.
To this is after the first commercial, break so fifteen
twenty minutes from now we'll get Into jeff got a
segment on taking social SECURITY i think at age, seventy
in other, words waiting putting it. Off so that's All i'll.
Say but it's a good segment on social, security and
you do have your choices there and when you can take.
(06:53):
IT i, know it's a big part of what you
do when you do a rep retirement. Plan when do
you want to start taking Social and it's it's interesting
when you can start at, six you know.
Speaker 2 (07:06):
It, is and so there's arguments to be. Made and
actually that ties into my first, topic you, know bracket,
management because it really does matter when you take Social,
security and so you know there's some argue take it
at sixty, two some at, seventy and depends on what
you want to focus. On do you want to have
(07:28):
a focus on getting as much income as possible or
having as Much i'm, sorry having as little tax as.
Possible so you, know so because we'll get into it,
then you, know because most retirees or people closer retirement
think in terms, of you, know pay as little tax
as possible this, year AND i do feel that's the wrong.
(07:52):
Mindset we should be thinking about lifetime. Taxes sometimes paying
more today saves a lot. Later it is, hard, Though.
Paul it is hard to to intentionally pay more today
when you, know uh that you're going to have to
pay more down the. Road and, so, uh you, know
(08:13):
we got to get out of that.
Speaker 3 (08:13):
Mindset.
Speaker 2 (08:14):
Uh you know that that so that changing that that shifts.
That you, know that shift changes. Everything it's the core
of good. Planning you. Know tax brackets are, progressive you
pay more more income you, have but retirees don't use them.
Strategically many leave lower brackets unused and get forced into
higher brackets later, on especially once rm ds. Hit that's
(08:36):
avoidable with, planning so roth conversions can be the primary
tool for bracket. Management you intentionally fill up lower tax
brackets and this reduces future required. Distributions it also creates
tax free income. Later done, right it's incredibly. Powerful so
you could fill up those lower, brackets get to a
higher tax. Bracket don't go into that higher tax bracket
(08:57):
with THESE roth. Conversions uh and then you will have
a lot of tax free income in. Retirement the mistake
is converting too much at. Once that can push you
into higher tax brackets. Unnecessarily so it's you, know good
planning is. Precise you don't want To you want to
top off brackets and not blow through. Them so it
requires annual, monitoring which you, know which we, do, uh
(09:21):
you know for for. Clients Uh, So so security timing
plays a big. Role taking it early versus delaying changes
your tax. Picture it has an impact on provisional income,
calculations and that affects how much is. Taxed it's not
just about the benefit.
Speaker 3 (09:38):
Size Uh.
Speaker 2 (09:40):
So r M d s are the biggest tax. Trap
once they, start you lose. Control they can push you
into higher brackets. Automatically that's why pre r M d
planning matters so. Much you want to shrink that future.
Problem Uh AND irma brackets create hidden. CLIFFS a small
in increase in income can Raise medicare premium. Significantly that's
(10:04):
effectually a stealth tax. Bracket management must INCLUDE. Irma most
advisors ignore, this uh and SO, uh this is what
ierma is that there's certain certain break points where if
your income it hits over a certain, amount you you'll
be paying more in your medical Uh medicare taxes which you,
(10:24):
know which Your medicare, PREMIUMS i should, say which is
not normally an ideal.
Speaker 3 (10:28):
Outcome.
Speaker 2 (10:31):
Right capital gains stack on top of ordinary. Income so
and that surprises many. Retirees SELLING. Uh selling investments can
push you into higher. Brackets and timing, Matters asset location matters.
Too married couples have wider brackets than single. Filers but
eventually one spouse, passes and so you need to you
(10:55):
need to, plan you, know plan for. That the surviving
spouse faces compressed rackets and that's a major long term tax.
Speaker 3 (11:01):
Issue planning needs to account for.
Speaker 2 (11:03):
It many retirees hold too much in pre tax accounts
that limits. Flexibility every dollar withdrawn is taxble This, uh
this creates a tax. Bottleneck diversification solves. This we have
we talked about. That i've talked about that with clients
in on the radio show for. Decades it's weird to say,
decades you, know because you know you have you talk
(11:27):
about diversification between stocks and bonds and you KNOW us
and foreign you, know all over the. Place and so
you want, to you, know make sure that you have
your taxes in different buckets so that you can pull
and minimize what you're paying in in taxes so uh
(11:48):
or or or do it strategically so that you're not
hitting different income levels that you don't want. To, so you,
know the many, retories LIKE i, said to hold too
much in pre tax and limits. Flexibility every dollar withdrawn
is taxbill and creates a tax. Bottleneck and so we'd
(12:08):
see a lot of clients have their money in their
home and their four AND k and so we want
to be looking at different options if there's a wroth
forrow AND k or uh doing back back to a
wroth conversions and we're trying to trying to get, that,
uh that pre tax dollar amount down so that you
can invest in post tax and let that let that grow. AGGRESSIVELY.
(12:33):
Uh tax los harvesting is under used in. Retirement it
can offset gains and reduce, taxes especially valuable and tax will.
Accounts it's not just for younger. Investors it still. Matters you,
KNOW i do this with my my own. Investments you,
know it's you have, heavy heavy accountant and and we're
(12:54):
using tax los. Harvesting it's, uh it's really the efficient
where we do it. Automatically now with the tax loss,
harvesting it's it's called we use direct. Indexing so you're
buying the index or buying several, indices and if there's
tax opportunities to realize gains offset, losses it automatically takes
(13:17):
care of, that automatically, sells automatically Buyas So i'm not
making any. Recommendations but if you own, coke for, example
and there's an opportunity to sell, it you you don't sell,
it just sit and. Cash you sell coke and buy,
pepsi which is very very, similar but it's not. Identical
(13:38):
and uh it's and you're still. Invested and then there's
something called the wash.
Speaker 1 (13:42):
Rule to be, clear we're talking about the, stock, Right,
Aaron we're not talking about buying the. Car BECAUSE i prefer.
Speaker 3 (13:48):
COKED i prefer pepsi.
Speaker 2 (13:52):
Overcoat do you really and my, Wife oh, yeah my
wife prefers doctor pepper Overbil.
Speaker 1 (13:57):
Oh doctor pepper is now. SURGING i think it's a
number one soft drink in the. Country it.
Speaker 3 (14:01):
Is it's. Amazing it's. Crazy, yeah and not many places very.
Speaker 1 (14:07):
Good if you go and just order, one just do
a little a social, experiment you'd be shocked at how
many places still don't offer, it and yet it's the
number one beverage. Soul but, anyway just to back up
a little, bit talking about those, STOCKS i said something
stupid and, silly BUT i had to jump. In it's
coch OR pepsi your. FAVORITE I, ALSO i heard you
throw our own acronyms, again SO i want to explain
(14:29):
what they are because OUR r AND d is often
mentioned on the. Show you deal with this stuff every, day.
Right it means required minimum distribute, distribution, right, yes so
you got.
Speaker 3 (14:41):
It.
Speaker 2 (14:41):
Distribution so the taxman wants their pound of flesh and
uh and so what's your you, know certain age depending
on how old you, are you, know seventy, two seventy
and a half for a long, time seventy three now for,
Something so you have to you you were required as
(15:03):
the name, implies requirement. Distribution you you have to take
money out a certain percentage of your assets out of
a four out of A I ra.
Speaker 3 (15:16):
And you you have you.
Speaker 2 (15:17):
Have take them out and pay tax on. Them you
don't have to spend. Them it's also a lot of
people THINK i spend. It, no, no you can reinvest. It
but they want, that they want their pound of, flesh
and so then you have to uh pay the tax
on that and so.
Speaker 3 (15:33):
If you but it can be pretty.
Speaker 2 (15:35):
High it, starts you, know it starts off relatively, low
but as you get, older the percentage of shift takeout
goes higher and so you so those taxes can get
get to be very. High then you're you could get you,
know INTO irma territory if you're taking out too, much
if you're required to take out too. Much so which
is IN irma is a higher premium surcharge that stands
(15:59):
for income really monthly adjustment.
Speaker 1 (16:01):
Amount am glad you mentioned income related monthly adjustment. Amount you,
know some might say it's a good problem to. Have
i'm required to take distribution out of money THAT i
saved AND i worked so hard and all these years
went By, aaron that's a good. THING i, mean it's
a good problem to. Have but just you must be
aware certain you're going to pay tax on it. Eventually
(16:24):
the beauty of a wroth when we talk about, wroth
is you pay the tax up front at the time
typical four to one. K it's going to be WHEN
i take that, distribution.
Speaker 2 (16:32):
Right, yes, yeah and so you're you have to take
you have to take. That you're gonna have to pay
the tax. Man you got to plan out in advance
and that just let it, be not let it, happen
to be proactive about.
Speaker 1 (16:46):
It, yeah and not be.
Speaker 2 (16:47):
Surprised we do very in depth planning and we are
resources that we have At Creative. Planning we can do
a tax projection for you to see what you, know
to see how much you're going to be, owing and
we end the will create a strategy for.
Speaker 3 (17:01):
You and that's part of what we do for.
Speaker 2 (17:02):
You it's it's you're not going to find that really anywhere,
else you, know and so the you, know we want
to avoid the taxt torpedo From Social. Security you, know
as is income, rises more benefits become, taxable and it
creates very high effective tax. Rates it catches people off,
Guard so planning avoids. It good bracket management is. Ongoing
(17:23):
it's not a one time. Decision markets change, laws change income.
Changes you need to adjust the annually and that's where
most people fall.
Speaker 3 (17:31):
Short so if.
Speaker 1 (17:33):
People have questions about any of, these if you've if
you're not working with an, advisor want to meet with,
somebody just feel free to reach. Out Contact Creative planning
at two six two five two two forty. Forty this
show The Retirement. Clinic pretty easy website to. Remember The
Retirement clinic dot com shows are podcasted and information on
(17:54):
all the locations to reach OUT uh with your. Questions
aaron didn't want to interrupt you because you good stuff
and coming up. Soon Jeff cole all talking About Social
security as well that. Time everything's about. Timing but would
you say no two clients are like everybody's a custom
situation right from your point of, VIEW i Think aaron.
Speaker 2 (18:12):
Right every portfolio is custom crafted for the. Client it's
not model. Portfolios it's custom crafted that we BUILD uh
based off of principles that we believe. In, okay so
next that WE i want to talk about is market
concentration risk and what it means for retire. REASON a
lot of people think that they're invested in the market
in you know in different areas that or just straight
(18:35):
UP s AND p five, hundred that they're that they're,
diverse and that sometimes you want to be concentrated in some,
areas sometimes you don't want to be constrated in some.
Areas and that's why we custom craft, these uh for
for our. Client so, uh you, know, uh there's something
called The magnificent. SEVEN i think that was a, movie
(18:56):
but that's not What i'm.
Speaker 3 (18:57):
Referring it.
Speaker 1 (18:58):
Was who is?
Speaker 2 (19:01):
It, well that's a whole other. Topic This magnificent seven
is you know is uh was the fanying. Socks now
it's called the mag. Seven it's so it's Alphabet, amazon
which Is. Google Alphabet's, Amazon i'm, Sorry alphabet it Is.
Google h Have, Amazon Apple meta which Is, Facebook, microsoft
(19:21):
In nvidia And. Tesla so they but together they represent
about thirty three percent THE s AND p five five hundred,
index as you know as earlier this, year so they
drive a huge portion of market. Returns it is not
an evenly evenly distributed. Index, now there are indexes out
there that you, know each it's. Equal it's called equal,
(19:44):
share so where each stock has an equal, share you,
know but this is THE sp five hundred is not.
That so you, know a lot of a lot of
the performance of THE s AND p is driven by
those seven, socks and a lot of people don't know.
That so it creates concentration. Risks so even if you
own an index fun you're still heavily. Exposed you could
be heavily, exposed and a lot of people don't realize.
(20:04):
That this level of concentration is historically. Unusual it's not,
unprecedented but it is. Notable markets have seen similar periods
potentially before. Corrections i'm not saying we're heading into a.
Correction that doesn't mean a crash is, coming but risk
could be, elevated and retirees are especially vulnerable to. This
they can't afford large draw downs and secrets of. Return
(20:26):
risk becomes. REAL a down term early in retirement is,
damaging and concentration amplifies that. Risk so manyfolio portfolios are
unintentionally overweighted. Tech even diverse fied funds lean heavily that,
way it's baked into the. Index you may think you're
diversified when you're. Not that's a hidden. Issue the performance
(20:46):
has been, strong which reinforces behavior investors chase what's working
that increases concentration. Further it's a feedback. Loop eventually that can.
Reverse you, know what was a virtuous, cycle you, know
becomes the off and so so eventually that that stops
In Canon, Winde so rebalancing is the simplest. Solution trim
(21:10):
winners add to underweighted. Areas it feels wrong, emotionally but
it's discipline. Investing this is where advisors add. Value you,
know it does feel. Wrong oh this is you, know
the stock is, Up i'm going to sell. It it's, like,
wait what are you? DOING i Think Warren buffett said
that stocks are the only asset that people don't want
to own when they're on. Sale so it's, like, well,
(21:32):
wait this stock is down twenty? Percent why would why
WOULD i buy? This, WELL i mean when you go
to the grocery store and see that eggs are nine
nine cents for a dozen or fifty cents for a,
DOZEN i would.
Speaker 3 (21:43):
Buy more eggs you're. Buying but, yeah but, stocks it's, like,
wait that's. DOWN i don't want.
Speaker 2 (21:49):
That even if the you, know you do your homework
and the underlying fundamentals are, strong you, know it is,
emotional so you, know He buffett also you'll be greedy
when others are fearful and feel fearful when others are.
Greedy Uh, so but you have to be, diverse you.
Know Peter maluke talks about that all the.
Speaker 3 (22:10):
Time is to be.
Speaker 2 (22:11):
Diverse you can't time the. Markets you can't and is
incredibly difficult to beat the. Markets so let's invest in
and take advantage of the good growth in the, markets
and and we manage the risk end of. That so
rebalancing is is a. Solution it's disciplined. Investing you. Know
equal weight strategies are getting more. Attention they reduce concentration,
(22:34):
risk but they also behave. Differently investors need to understand trade.
Offs it's not a free. Lunch you don't get the same.
PERFORMANCE i mean potentially, could but you. Don't you don't
get the it's not perfectly correlated uh, performance you, Know
and but it is you are having less risk if
it's if it's weighted. Differently international exposure is often. UNDERWEIGHTED
(22:57):
us dominance has been, strong but cycles shift. Overtime diversification
includes geography as. Well most portfolios are TO us. Centric
fixed income is finally attractive, again higher yields changes the
equation bonds can actually provide income now and they also
reduce equity. Risk this matters for. Retirees the biggest risk
(23:17):
is doing, nothing letting winners run on. Check that creates
portfolio in balance and overtime risk builds quietly then shows
up all at. Once behavior of bias plays a big,
role and recncy bias keeps investors in. Winners it also
keeps them in losers and keeps them out of the market.
Too and the markets have been have been beat. Up
(23:38):
is that it's, like well it's been, terrible now it's
going to continue to be. Terrible that's not always the.
Case so bottom line is that concentration has helped, returns
but it increases risk going. Forwards retirees need to manage that,
proactively not react after a.
Speaker 1 (23:53):
Downturn much of what you talk about as being, proactive,
right we talk about it all the, time getting ahead of,
things understanding the tax. Ramifications after the, Break jeff is
going to join us talking about social. Security when to take?
It you, know what's the earliest, again just for the
record here aeron.
Speaker 3 (24:11):
Sixty, two, right sixty, Two, yeah.
Speaker 1 (24:14):
And THEN i have to take it by a certain age.
Too right.
Speaker 3 (24:19):
Seventy by.
Speaker 1 (24:20):
Seventy, okay it'll. Kick you got that eight year, window
so that'll be, interesting so stay tuned for. That jeff's
you're going to come, back and Then, aaron you've got
in our wealth management and preservation. SEGMENT a good topic, Today.
Speaker 2 (24:34):
Yeah asset protection, planning what actually works versus Myth so
it's about legal structures and not hiding. Assets so we'll
get into all that different structures of protecting your.
Speaker 1 (24:47):
Assets it's all coming up On The Retirement clinic two
sixty two five to two forty forty to reach out
to creative planning On monday Through friday during The dani o'donald,
show during those three and FIVE pm news blocks with
those daily market updates whereas oil going this week up,
down The iran, situation so many things factor into the,
markets and those updates are done twice a, Day monday Through.
(25:09):
Friday of, course this show Every saturday since two thousand and,
one it's The Retirement clinic With Aaron. Kowal I'm paul
kronforst ON W i n will be.
Speaker 5 (25:19):
K i ran into this article about WHY i waited
until seventy to start Collecting Social security it got my.
Attention there are a number of our clients.
Speaker 4 (25:31):
THAT i have to make that. Decision for some they
don't have a.
Speaker 5 (25:34):
Choice they have to Take Social security early because they
need the, money or they lost their, job whatever. Happened
we have some clients that that was the. Case but
sometimes it makes sense to wait until age. Seventy Tom,
wilke this is again The baron's. Article Tom wilke is
a retired journalist From, Pittman New, jersey and he said
(25:59):
that he waited until eight seventy collect Social. Security let's
dive into. It he, says waiting isn't for. Everyone some
people need the income earlier in retirement to make ends.
Meet others may be in poor health and doubt that
they will live long.
Speaker 4 (26:12):
Enough to benefit from.
Speaker 5 (26:13):
Waiting, still others don't trust the government to deliver full,
benefits given social, scurities long term funding, challenges or the
possibility of congressional changes to shore up the. System, AGAIN
i think a couple of those are valid poor, health
doubt they might not live long. Enough, yeah start collecting.
(26:33):
Earlier especially if you have a history of long livers
in the, family you might want to delay. It but
if you have a history of people in your, family
or if your health isn't, such it may it isn't,
great it may make sense for you to take it
a little bit. Early back to the, ARTICLE i learned
(26:53):
that most had claimed benefits sometime between sixty two and
full retirement.
Speaker 4 (26:57):
Age of directly.
Speaker 5 (26:59):
Twenty PEOPLE i, asked only two waited until age. Seventy
that tracks with national data about ninety percent of New
Social security claims come from people younger than age seventy
according to The Social Security.
Speaker 4 (27:12):
Administration, okay now this is Again tom wilk saying why he.
Speaker 5 (27:20):
Waited based on financial and personal considerations and the suggestion
from our financial, ADVISOR i resolved not to take Social
security age sixty two and waited until at.
Speaker 4 (27:30):
Least full retirement.
Speaker 5 (27:31):
Age for a lot of, PEOPLE i think that makes
a lot of, sense and that's what we advise our
clients as. Well BUT i resolved not to take it
at age sixty, Two so full retirement for him was
sixty six years and two months after reaching full retirement
in twenty twenty, TWO i decided to hold off for
nearly four more.
Speaker 4 (27:48):
Years for, me the decision came down to a few.
Speaker 5 (27:51):
Factors first of, all he increases the survivor's benefit for his.
Wife so she is six years and four months than he,
is and this extra income could come in handy for.
Her what's, more he, Says, elizabeth it's his wife AND
i were fortunate to financially be prepared for. Retirement her
full time job covered our health, insurance so she was
(28:14):
still working full, time AND i supplemented our income with
contract work for newspapers and.
Speaker 4 (28:19):
Magazines that's a key.
Speaker 5 (28:21):
Point her still working gives him the ability to wait
until age seventy as. Well back to the. Article to
supplement our, INCOME i began taking penalty free monthly distributions
from THE Sep Individual Retirement account at age. SIXTY i
later tapped my WROTH ira for monthly checks starting at sixty.
(28:41):
Three this is WHERE i would start to disagree with.
Him was this a good? Idea i'm not sure markets
have been great had he left that money in the
WROTH ira for the last several, years chances are that
would have taken off, dramatically especially with our. Clients we
like to have most of growth in the ROTH ira
(29:01):
because it's tax free. Forever you cannot Transfer Social security
beyond your, spouse but you can transfer, assets and wroth
iras are one of those, assets and the individual retirement
account those are assets that you can transfer to other.
Speaker 4 (29:20):
People So i'm not SURE i would have done.
Speaker 5 (29:22):
That he felt that that was the best way to
do it to increase the amount of money that his
wife would, get to increase amount of money he was
going to get From Social security by waiting to age.
Seventy i'm not SURE i would have done. That back
to the article no. Regrets RECENTLY i found A Social
security statement from late twenty. Seventeen had they claim benefits
in twenty, EIGHTEEN i would have received seventeen hundred dollars a,
(29:45):
month about twenty two forty two two and forty two
dollars In january of twenty six. Dollars a full, retirement
my benefit would been twenty nine to. Eighty by waiting till,
seventy my benefit is just under four thousand. Dollars, now
this is a key. Thing my break even, point the
age at WHICH i will receive as much benefits and
(30:06):
BENEFITS i would have HAD i claimed WHEN i was first,
eligible is somewhere around eighty one or eighty, two depending
on cost of living. Increases that's WHERE i haven't even
had discussions with a friend of mine who's a, physician
a great. Guy he, SAYS i see people in their
eighties and they don't care whether they're breaking even at that.
(30:27):
Time they would rather have taken the money at age
sixty two or sixty five rather than waiting and waiting.
Speaker 4 (30:35):
Till eighty one or eighty two to break.
Speaker 5 (30:37):
Even on, that everybody's, different and that's why it's important
to work with a financial.
Speaker 4 (30:41):
Advisor there's no perfect time to take.
Speaker 5 (30:44):
It when people, ask what should you start, collecting let
me know when you're gonna, die and that would be
THEN i can tell you when the perfect time. Is,
well people don't know, That so the best thing to
do is see one of our great fiduciary advisors at
The Creative planning give our office call too six two
five two to four zero four zero two six two
five two to forty or go to The Retirement.
Speaker 4 (31:07):
Clinic dot com and work with one of our great.
Speaker 5 (31:10):
Advisers we can do a cash flow projection it's called
a vision builder to help you with your decisions on
Social security and everything else in your retirement.
Speaker 1 (31:18):
Plan, okay it's that time with the bare naked ladies
love that. SONG i always have IF i had a million,
Dollars why do we play?
Speaker 3 (31:25):
That?
Speaker 1 (31:25):
Well this is called the wealth management and the keyword preservation.
Segment Aaron cohal is back on The Retirement clinic And
I'm paul Crown. Forest what do you got for us
This saturday?
Speaker 2 (31:36):
Morning so we talked about. This, yeah asset protection planning
what actually works versus. Myths so asset protection is about legal,
structure not hiding. Assets if it feels like you're hiding,
something it's probably.
Speaker 3 (31:51):
Wrong courts see through.
Speaker 2 (31:52):
That proper planning is transparent and, compliant and that's the.
Foundation timing matters more than. Structure planning must be done
before a claim, arises and once there's a known, risk
options are. Limited courts can unwind lead. Transfers early planning is,
key you. Know so it's, like if you know you're
going to lose a, lawsuit don't go transferring all your
(32:14):
assets and, say, OH i don't have. Anything they'll unwind
that and you'll just be getting other people in trouble then,
too or may not even just, lawsuit but of debtors as.
Well so irrevocable trusts are one of the strongest. Tools
assets placed properly are outside your, estate but you give up.
(32:34):
Control that's a trade off many people do struggle with that.
Speaker 3 (32:40):
Is giving up.
Speaker 2 (32:41):
Control revocable trusts do not provide asset, protection and this
is a common. Misconception they help with the state, planning
not creditor. Protection it's an important, distinction and maybe many
people get this.
Speaker 3 (32:55):
WRONG i think.
Speaker 2 (32:56):
That if they have a revocable trust or their home
in a revocable, trust that it is somehow immune to.
Creditors that's you, know that's not the. Case h LLCs are,
useful but they're. Limited they protect inside, liability not always.
Outside so personal guarantees can pierce the protection structure, matters
(33:17):
and it's not. Bulletproofs but if you have a, business
then you HAVE uh your your business in AN llc
and you have a, loan you, know loan for your
business if you're building a, building or buying another company
or or. Whatever you, know there's a million things you
can use loans FOR, uh and you have AN llc
figuring you're not personally. EXPOSED a lot of these loans
(33:39):
come with a personal guarantee where you have to say,
YES i will put up my personal assets uh as
collateral in order to get this. Loan and and so
that is something people, think you, know don't really think
of that's. Personal you, know it's a it's not, personal
it's in AN. LLC, uh what's limited liability. Corporation well
(34:03):
that's not always the case because that that personal guarantee pierces.
That so you, SAY i don't care if about THE,
LLC i am still. Liable and banks will do that
because they'll, SAY i don't care if you have, That
i'm getting my money back from. YOU i will go
after after you. Personally and there's no way. Round and
(34:24):
you will have to agree to this if you want my.
Loan if, Not i'll find somewhere else that'll that will
give you that will not want a personal, Guarantee you're
not going to find.
Speaker 3 (34:32):
Anybody.
Speaker 2 (34:33):
Uh and so insurance is the first line of. Defense
umbrella policies are. Inexpensive you, know we live in such
a litigious. Society people suit at the drop of a.
Hat always get. That there's very few things in financial
planning THAT i can, say you, know always get almost
always say get an umbrella liability. Policy you you get
(34:58):
it's it's cheap insurance dependings on the dollar get at
least a million. Dollars we do an analysis for you
that that can look and see how much you really,
need and you, know and they cover many common, risks you,
know you. Know then legal structures are a second, layer
but both are, needed you. Know domestic domestic acid protection
(35:20):
trusts have mixed. Effectiveness some states allow, them not all
states recognize, them creates uncertainty us them. Carefully offshore trusts
are stronger, legally but more complex and. Expensive they also raise.
Scrutiny they're not for. Everyone best for high risk situations.
There you know it's, expensive but you're going to be paying,
(35:40):
more and you, know if it's, offshore you run risk
of other governments getting getting. Involved gifting strategies can reduce,
exposure but must be done. Properly fraudulent conveyance rules, apply
intent matters and documentation is. Key retirement accounts often have strong.
(36:00):
PROTECTION arisa plans are very well. Protected i ras have
varying protection by. States you got to know the rules
and don't, assume, uh you, know don't assume. Anything you,
know the like like FOUR o one k's are pretty
well protected against creditors that they are for retirement and
not current, assets you, know and so you got to,
(36:24):
uh you, know you've got to be aware of the
laws and it's. You that's what another reason people work
with us is we have access to, this we know
what's going, on we know the, laws and we can
help make sure that you're setups that you don't have
to deal with a lot of this.
Speaker 3 (36:37):
Stuff.
Speaker 2 (36:38):
Uh joint ownership can create. Risk one spouse's liability can
have an impact on shared. Assets so tidally matters more
than people, realize and it's often, overlooked and then business
owners have higher. Exposure proper entity structure is is. Critical
(36:59):
so separating still in business assets. Matter co mingling is very, Dangerous.
Paul so you you don't really want to have you,
know your personal and your business, expenses, uh in the same.
Company you definitely want to have some sort of legal
structure set up if you're if you're in business at,
all because IF i mean if if it doesn't have
(37:20):
to be a big, business if it's just, you if
you're in the, trades if you're handyman or, whatever and
you don't have, asset you have have the business structures
and somebody something fails and you couldn't even be might
not even be your, fault but some uh something fixed. Fails,
uh it could be a faulty you, know made. Product,
yep you could be held. Liable so you got to have,
(37:43):
that you, know that legal structure set up in, place
uh to shield you from. That so the biggest myth
Is i'm too small to worry about. This no False
uh lawsuits don't target only the ultra. Wealthy mid level
wealth is often target because it's collectible and so good
(38:05):
asset protection is layered, insurance legal, structures and. Planning no
single solution is. Enough it's about reducing, exposure not eliminating it.
Speaker 1 (38:14):
Entirely this is why you may need help or assistance
from a financial, advisor a CERTIFIED a certified financial, Advisor Creative,
planning big shout out with What Wall Street journal recognized
you as the best in the country for the registered investment.
Advisor we have a thing at the end of the
show that congratulates you From Wson. Management we've been mentioned
(38:37):
in this for three. Weeks it's a very big. Deal
so if you want to reach out To Creative, planning
talk To Aaron cohal or one of the many advisors
all these locations around, Town Creative planning dot, com The
Retirement clinic dot com or call two six two five
two to forty forty With aaron On Paul. Kronforest there's
more coming up on wisn wys In Retirement. Clinic as
(38:59):
we come to a close This, saturday we are back Next.
Saturday Every saturday morning at ten. O'clock Aaron kolewall great.
Stuff IF i have a, Question.
Speaker 2 (39:10):
If you have a, question give us a call two
six two five two two.
Speaker 3 (39:15):
Four zero four.
Speaker 2 (39:16):
Zero reach Out Creative, Planning Creative planning dot, com The
Retirement clinic dot. Com Follow Creative planning on all the.
Socials there's some fantastic information that gets put out, there
and you, know reach out to.
Speaker 3 (39:29):
Us we're here to.
Speaker 2 (39:29):
Help uh AND, UH i think we do a, tremendous tremendous.
Speaker 1 (39:33):
Job with locations all over Southeast, Wisconsin, brookfield right On
Blue Mountain road In. Delafield We'recine, Port, Washington. Wisconsin In Cape, Coral, Florida, Phoenix,
arizona license in all fifty. States The Retirement clinic Dot
com behalf Of Aaron. Kolewall thanks for joining. Us, everybody
have a Blessed easter. Tomorrow enjoy your family and enjoy
(39:56):
Your easter tomorrow as. Well we're back Next. SATURDAY Wism
Milwaukee news is coming up.
Speaker 6 (40:01):
Next Creative planning was ranked By The Wall Street journal's
byside as the best INDEPENDENT ira for comprehensive wealth management
In february twenty twenty. Six this ranking is not based
on any specific time. Period the preceding program is furnishd
By Creative, planning AN sec registered investment advisory. Firm Creative,
planning along with its Affiliate United Capital Financial, advisors currently
(40:23):
manages or advises on a combined three hundred and twenty
five billion dollars in assets as Of june, thirtieth twenty twenty.
Four the host works For Creative, planning and all opinions
expressed by the host and or their guests are solely
their own and do not necessarily represent the opinion Of Creative.
Planning the show is designed to be informational in nature
and does not constitute, investment tax or legal. Advice different
(40:43):
types of investments involve varying degrees of, risk and there
can be no assurance that the future performance of any
specific investment or investment strategy including those discussed on the,
show will be profitable or equal any historical performance. Levels
the information contained herein has been obtained from first deemed,
liable but is not. Guaranteed if you would like our,
help request to speak to an advisor by going to
(41:04):
creative planning dot. Com Creative, planning tax and legal are
separate entities that must be engaged.
Speaker 3 (41:10):
Independently
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