June 13, 2026 • 41 mins
The Kowal team help plan your retirement
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Speaker 1 (00:00):
News Talk Eleys and the Retirement Clinic is underway today,
hosted by Jeff Kowal, the og host of this program ogst.
Speaker 2 (00:13):
Wow, it's ofg oh, no, he's here again.
Speaker 1 (00:17):
No, Oh my god. Oh, there's so many acronyms. I
joke often every week in fact, about the acronyms in
your business Certified Financial Planner CFP. Then there's r mds.
It goes on. There could be twenty of them. Off
the tip of my tongue, Jeff, that I come up with.
Speaker 2 (00:33):
All kinds of stuff.
Speaker 1 (00:34):
Yep, Well, what do we focus on the Retirement Clinic?
On your retirement? Just a little tease. It's going to
be a good show, not just because Jeff is your hosting,
because we're talking about retiring early. Also Generation X that's
me by the way, I'm an exer, might be delaying retirement.
Speaker 2 (00:54):
Yeah. It's an interesting two different ways to look at it,
because somewhere anxious and out early and some are saying, hey,
I can't afford let's I got to stick around a while.
So we'll cover both sides of a couple of different articles,
a couple of things I looked at and research. I
think it pretty interesting.
Speaker 1 (01:09):
Good stuff, Jeff, we should talk about Creative Planning. Of course,
for many, many years the co Waal Investment Group and
a part of this show. Boy we go way back
two thousand and one, twenty five years. Pretty good, pretty
good run and still going strong. Now it's with Creative Planning,
and about a year and a half ago we joined
Creative Planning.
Speaker 2 (01:27):
A great team, great partnership with them. We can cover
everything comprehensive wealth management, investment advisory service, retirement planning services,
legal accounting, insurance, trust services. We wanted to Aaron Kohal
and I wanted to get everything under one roof. We
either had to build it out ourselves and do all
(01:49):
these things or go with somebody who's been doing it
for twenty five years. Creative Planning has been doing it.
Is still fiercely independent. We act as produciers, always putting
our client's interests first. But the partnership with Creative Planning
has been great. And again doing the radio show. If
you want to look at listen to podcasts, you can
listen to it on Spotify. You can go to the
Retirement Clinic dot com and listen to our podcast as well.
Speaker 1 (02:12):
Good that's a good source to go to. If you
forget the phone number, just remember the Retirement Clinic dot
com or Creative Planning dot com as well. Locations have
not changed at all. Nothing's really changed except as you said,
joining forces with Creative Planning. So you're in Brookfield, Jeff
right on Blue Mountain in Racine, Delafield. Also up in
(02:33):
Port Washington, Mizauki County. Clients. Great location, Cape Coral, Florida, Phoenix, Arizona.
Here is something you should know, folks. Licensed in all
fifty states. That's big for people that retire and maybe
travel or we.
Speaker 2 (02:46):
Are blessed that our clients have. We were licensed to
co oed Vesper Group was licensed to twenty eight states.
Now we're licensed at all fifty states. And again we
were blessed because our clients would work with us here
and if they went somewhere else, either part time or
for the full year to live somewhere else, they stayed
with us. UH and next generation is staying with us.
We've got the manpower and the people in our office
(03:09):
with the next generation at place. So it's really a
lot of fun, great partnership. Give our office a call.
Two six two five two two four zero four zero
or go online at the Retirement Clinic dot com.
Speaker 1 (03:20):
I'm glad you mentioned the number. All reiterate that throughout
the hour instead of calling us here during the show.
Please any questions that come up, either if you need
services or if you just have a question about our
topic today. Two six two five two two forty forty.
That's enough about us, Now we talk about you and
your retirements.
Speaker 2 (03:39):
Let's start with this baron's article, and there are two
of them. One was Fox Business and one barons this
parent's articles Retiring early considered these three things. Elizabeth O'Brien
is one of the UH is the author of this,
and she's written a lot of good things over the
last several years about retirement, so I always go back
to her and always get some pretty interesting things. But
now it's about retiring early on. One of the things
(04:00):
you have to consider, it says older workers. Older workers,
I feel like I got slow down. I'm talking a
mile a minute. Older workers are colleay it quits in
droves job data shows before you join them. Make sure
you've cunched the numbers. It can be a hard decision
to reverse. And that's right. Create a planning. We want
(04:22):
you to retire once. We want it to be a
that you know that you can do it, that your
numbers are in place, that you feel good about the decision,
you have things planned in retirement, that you retire once.
But the shaff of Americans age fifty five and older
who are in a labor force fell to thirty seven
point one percent in April from forty point two percent
(04:43):
in January of twenty twenty. So in twenty twenty, forty
point two percent of the workforce were people over fifty five.
Now it's down to thirty seven percent. That's according to
a Bureau of Labor Statistics. It says it's the lowest
participation rate for an age group and roughly twenty.
Speaker 1 (05:00):
But it sort of makes sense with the boomers all aging, right,
the largest generation. Now the millennials have taken over that
in size. They're the largest generation, right.
Speaker 2 (05:09):
But they say that the percentage wise, regardless of the numbers,
percentage wise, the fifty five and older had always been
about forty percent. Now it's down with thirty seven percent.
Speaker 1 (05:18):
So we're just getting lazy.
Speaker 2 (05:20):
Well, they were retiring, they said, retiring baby boys could.
Speaker 1 (05:23):
Be or we're just trying to They could enjoy life
and family a little bit.
Speaker 2 (05:28):
But the youngest boomers are turning sixty two this year,
and that is you know, the baby boys are part
of the story. But members of Gen X who succeed
them are also leaving the workforce earlier than expected. Some
workers don't have a choice. Employee Benefit Research Institute says
hardships push a lot of people out of work earlier,
(05:48):
and this year serve a forty six percent of respondent's
retired earlier that planned. Of those forty six percent that
retired earlier, forty one percent retired reported health concern or
a disability. Thirty five percent cited changes in the company,
so they didn't like the changes in the company.
Speaker 1 (06:07):
I'm a cost of living? Is that on the list
at all?
Speaker 2 (06:09):
That's more with the next article where we talk about
some gen xers are staying longer because of the cost
of living. So I'll get to that on a second.
But for those who workers who are calling the shots,
three important factors that you have to consider before you
pull the pin and leave work. What is healthcare? Health
insurance can be the budget buster for retires under the
(06:31):
Medicare eligibility. Under Medicare eligibility sixty five. So if you're
leaving and you're under sixty five, you got to watch
out for healthcare costs. If you don't have retiree health
benefits or espouses health insurance plan, make sure you price
out your options before you leave. We have some clients
that are paying more than the mortgage payment. They're paying
(06:51):
more than two thousand dollars a month for health insurance.
You got to be careful with that.
Speaker 1 (06:57):
At least do that research before you pull the plug.
I can walk in and say I'm done, I'm retiring.
Speaker 2 (07:02):
Yep, and they see some of the Obamacare previums have
more than doubled in the year.
Speaker 1 (07:08):
So the Affordable Care Act is not so far.
Speaker 2 (07:11):
That so affordable. It replaces a mortgage pain, which is
kind of nuts. Portfolio adequacy I thought this one is
kind of interesting. So the first one is make sure
you look out for healthcare. Second thing is your portfolio.
Three plus years of blockbuster stock returns have brought early
retirement to reach for some workers. There's no magic number,
but a separate survey this year by Employee Benefit Research
(07:37):
Institute said that Americans need about one point four to
six million.
Speaker 1 (07:41):
I remember when it was a million.
Speaker 2 (07:43):
Yeah, so about a million and a half now, and
one general rule says that you just multiplayer expected annual
expenses by twenty five to arrive at that ballpark saving school,
so you could take up four percent of the portfolio. Okay,
let me put that numbers. Dollars times twenty five means
you need a million and a half. If you need
(08:03):
one hundred thousand dollars of your times twenty five, it
means you need two and a half million dollars to
walk away with comfort. So you just got to be
careful with that. Make sure you have enough money before
you retire, and make sure your finance and a lot
of it. It's not just the amount of money you have,
it's the amount of money you spend. So if you
live frugally, if you don't have any debt, those types
of things, then you're okay. It's not just about the
(08:24):
million and a half or two and a half million.
Last thing it says, so the first one's healthcare, Second
is your portfolio amount of assets. Third is your purpose.
As the saying goes, it's good to retire to something,
not just from your job. This means figuring out what
you'll do when you get out of bed in the morning.
Ideally before you're in position. In that position, you would
(08:46):
have taken a look at that, thought it through and
know that you have opportunities volunteer or activities or golf
or you know, it's part time work.
Speaker 1 (08:58):
Whatever it says, busy, whatever it is.
Speaker 2 (09:00):
This is an act of a plan for it, not
just get you know, because I know some people who
who were counting it down and really didn't plan it
much after retirement. Fortunately it's all turned out okay. For
those that just didn't have any plans it all day,
didn't know what they do in retirement, it says they
have so much they will know how they ever had
time to do these things.
Speaker 1 (09:20):
You almost have to find a new routine. Jeff, I've
changed my schedule. You know that. I'm so I'm an exer.
I can maybe we can use me as an example, Jeff,
I turned sixty on June third.
Speaker 2 (09:31):
Okay, today is what the thirteenth birthday?
Speaker 1 (09:34):
Thank you, Jeff. To me, it's just a number. I
don't feel sixty. I may look at but I don't
feel sixty. Okay, grandparent, I am just like you, Jeff.
I'm getting into the point where I was able to
a wisn continue on my weekend shows. It's kept me
very busy about three days a week, right, but it's
not six days a week which I was working.
Speaker 2 (09:55):
But you have a purpose and if you can control that.
You were talking earlier about how you can contro old
the hours of the days that you work and condensa.
So if you have babysitting duties, I'd say thursdays.
Speaker 1 (10:05):
Which I do, and I love life changes. But am
I am I the norm? Am I? I don't know, Jeff.
Not many six year olds can pull back. So I'm
not retired, but I have pulled back a bit. There
is something too. I think that process of weaning yourself
away not just cold turkey. But not everybody can do that.
Speaker 2 (10:25):
You're right, and there's a recent ARP survey found that
some Americans are unretiring due to high costs and desire
to stay active. In reality, it can be very hard
to return it to work and a comparable salary to
the one you left behind.
Speaker 1 (10:40):
And mentally, so you're one hundred percent checked out and retire.
You have the party, they get the cake, and then
just like that, it's over. You're retired. Then you gotta
go back.
Speaker 2 (10:51):
When you leave and you're yelling at the boss and
your way out and you say, ooh, maybe they need
to come back to work.
Speaker 1 (10:56):
Never do that.
Speaker 2 (10:56):
I think that's true.
Speaker 1 (10:57):
Yeah, I know it's emotional, but I've seen it in
my thirty five years here people on their way out,
exploitive line.
Speaker 2 (11:06):
Yeah, that's not good.
Speaker 1 (11:07):
I tell that even. Yes, of course, nobody likes being fired, Jeff,
nobody likes being to let go. But it's business. Business
is business.
Speaker 2 (11:16):
Let me do this other article because I thought it
was pretty interesting too. This is from Fox Business. Nearly
half of gen X workers are delaying retirement as rising costs,
stagnant wages drained savings. This is by Kristin Aultus from
Fox Business. At gen X born between nineteen sixty five
and nineteen eighty, so people between forty six and sixty one.
(11:38):
That's just you, Paul born in sixty six, Yep, so
that's the gen xers. Nearly half are delaying retirement for
a generation. It should be as peak savings years. The
prospect of retiring on time has shifted from a plan
to a prayer. That's according to Kristin Altus, a newly
foreign employee financial Wellness survey found that fifty percent of
(12:02):
gen X employees are pushing back the retirement dates, sighting
stagnant wages, rising every day costs, and lack of liquidity.
Companies are looking for profitability. You may not be getting those,
you know, when you're at the peak of your income,
and you may not be getting the same raises that
you were on your way up. Additionally, only thirty eight
percent of gen xers believe they can retire when they
(12:23):
originally planned thirty eight percent. Again, that's the reason to
work with us with creative planning. We make sure that
you can retire once. Make sure the numbers are good.
And I think a big part of that, Paul, we
do cash flow projections for our clients. What happens if
there's a healthcare issue, long term care issue that's going
to last four years or longer, What apples if kids
need help, What if you want to do gifting, What
(12:44):
if you want to do aggressive travel? All these things
can be planned for and reduce it to writing. Don't
just kind of eyeball and say, yeah, this is I
think I'm a travel more in retirement. No, make sure
so that if you want to delay retirements because you
know what the numbers are, and you know you're happy
working in different things like that. But the driver, the
(13:05):
primary driver of this retirement delay is the inability to save.
Is inflation eats away at monthly expenses. Twenty five percent
in this report, twenty five percent of total workforce is
living without a buffer. In nearly half cannot make basic
household expenses.
Speaker 1 (13:23):
When you say twenty five percent without a buffer, that
just means they've got.
Speaker 2 (13:27):
Nothing nothing paycheck to paycheck. Yes, that's age forty six
to sixty one, twenty five percent of those people. I
thought that was fairly high too. Uh. Nearly half a
gen X workers are deleaying retirement. According to the report,
forty nine percent say their compensation is in keeping up
with costs.
Speaker 1 (13:46):
I thought, I hear that a lot. Yeah, I just
everybody's talking about it, the cost of everything.
Speaker 2 (13:50):
Yeah, this I thought was interesting. I have a highlighted
start and everything else. As a result, what gen X
just cannot afford to leave the current jobs The entrrent
entire corporate ladder stalls, creating business risks with companies facing
higher costs as older talent refuses to leave. They didn't
say that refuse to leave on payroll longer than expect it.
(14:14):
So now they've got higher costs of these people. They
can't hire you, they can't backfill with younger people.
Speaker 1 (14:19):
And probably benefits. You know that employees can be expensive
to companies that are trying to scale back when you
can have a twenty five year old perhaps do the
same job for a lot less money.
Speaker 2 (14:30):
Yeah, so so be careful with that. The findings also
show a significant portion forty one percent of workforce feel
that they were never given the tools to magic crisis
of magnitude. That's kind of on them too. I mean,
you could go to an advisor. You could say, yeah,
my company didn't tell me that i'd be wouldn't have
enough money. Well, there are tools available in your timement
(14:51):
plan companies like ours.
Speaker 1 (14:53):
It's your own personal responsibility, Jeff, your retirement. An advisor
is there to help creative planning. Your advisors are there
to help. And that's kind of what we've been preaching
for the last twenty five years. The only people are
gonna care about your retirement is you. Companies can help.
Companies could give you access to it at work and that,
but you're ultimately responsible for that. And we found that
(15:15):
over the last twenty five years and even started before that.
When the trend is going away from pensions to four
to one k. Basically, the companies were saying, we're going
to dump the responsibility if you're retirement planning onto you.
It got too expensive to do pensions, so do four
to one case.
Speaker 2 (15:32):
We'll match. We'll do some sort of company match to
help you.
Speaker 1 (15:35):
A match is significant free money.
Speaker 2 (15:37):
Absolutely, but they say, ultimately it's your responsibility. If you
won't put money in, you don't get the match.
Speaker 1 (15:43):
You don't so it is your responsibility. Is an entirely
different topic. But these new Trump accounts for babies are
just fascinating to me. Jeff, time will tell if they
work out. Yeah, it's kind of like a four to
one K for a baby. Yes, you gotta be careful
how you do those.
Speaker 2 (15:58):
So there's gonna be more information on those funding them
to see how this plays out. Yeah, it's gonna be
pretty cool.
Speaker 1 (16:04):
We will be talking about those we already have on
some programs. If you haven't heard of them, Trump.
Speaker 2 (16:09):
Accounts, Yeah, we'll talk. I don't think we're going to
talk about that today too much.
Speaker 1 (16:15):
I'm not just thinking listen I'm thinking, like you know,
August September, and we're looking for things to talk about.
Speaker 2 (16:21):
Well, there will be a time to do that. But
I agree with you those are gonna be great accounts.
The last thing on this article is employees define financial
wellness simply less stress, fewer surprises, and the freedom to
make financial choices with confidence. And for employers, that's the
opportunity to try to give the employees the opportunity to
(16:42):
do all those types of things and do your planning.
It's a big deal. You have to uh, and then
and then match expectation with reality. Working long and this
is a Kiplinger little piece. Kiplinger does these things each month.
It's called Information to Act on. I'll look at the
articles and their articles. Yeah that's good. Yeah, that's kind
(17:02):
of interesting. And then you get to the information to
act and I think this stuff is brief to the
point that this is expectation versus reality. Working longer is
one of the most effective ways to reduce the risk
that you run out of money in retirement. Unfortunately, many
older workers overestimate how long they'll be able to stay
in the job. According to Employee Benefit Research, the twenty
(17:23):
twenty six survey found that forty six percent of retireers
left the work workforce earlier than planned. Forty percent of
workers said he planned to work to age seventy or older.
Only ten percent of retiers said they actually worked that long.
So forty percent think they'll work to seventy, only ten
percent actually do that.
Speaker 1 (17:44):
Seems I mean, that's just me. That seems pretty long.
Seventy seventy.
Speaker 2 (17:48):
Yeah, not other people are doing it, especially if you're talented,
people are healthier. Social Security benefits you max out age seventy.
That's the highest. You can't get any higher than that, so.
Speaker 1 (17:59):
You can out start. Let's review that.
Speaker 2 (18:00):
You can start at sixty two social Security two. There's
a reduction fairly significant. But the numbers say that if
you start at sixty two, it's the full retirement age.
It takes you till the early eighties for you to
break even what's considered full retirement age. Draft for most
people now it's around sixty seven, sixty six years, eight months,
(18:21):
sixty seven right around that, and then from sixty seven
to seventy it increases by eight percent a year to
your Social Security benefits. So some people say, well, I
think I'll stick around for a couple more year stage
seventy and make sure that when I retire, I can
retire with the highest Social Security benefit possible.
Speaker 1 (18:38):
And everybody's got a different you look at your client's draft.
Everybody's different. You customize a retirement plan. Some people might
be business owners, they may own, you know, tangible assets
or landlords. Then there's police officers and teachers. Some might
get pension at fifty three.
Speaker 2 (18:54):
That's right.
Speaker 1 (18:55):
Everybody's different. Everybody's income is different, our goals are different.
Speaker 2 (18:58):
Yeah, my wife, she worked for Ameritech first and at
and T, and they were thirty years that you could
qualify that you invest in your pension after your retirement plan,
after benefits after thirty years, so we had health insurance
benefits all the way to sixty five. So it was
for us, and they've discontinued that since a lot of
(19:19):
companies have. It's got to be very expensive today, people
living longer, the cost going up. But we were lucky.
But you're right, thirty years and out for a lot
of companies and police officers, others thirty years and you
invest in pensions on.
Speaker 1 (19:31):
That you always factor and inflation and cost of living, Jeff.
When you do and project. Let's say it thirty year
old comes to see you, Jeff, I want to use
creative planning for my retirement plan. And there's all kinds
of factors, but you must include the cost of living,
right of course.
Speaker 2 (19:45):
Yeah, assumed interest rate and cost of living. We usually
do about thirty percent three percent, three percent cost of living,
about six percent growth rate. Six percent for long term
is probably pretty good, especially in retirement. Prior retirement, you
could use a larger one, but nonetheless, and then three
percent inflation if you go back one hundred years, that's
(20:07):
a pretty good number. There are times, you know, like
a couple of years ago when it was nine percent,
but times like now it's two and a half percent.
So inflation has come down now. I think it's edged
up a little bit because of the cost of oil,
but that'll come down too.
Speaker 1 (20:21):
Yeah, the Iran thing is a fluid situation, but I
don't think it's permanent. It's clearly not permanent. I just
hope it kind of stops soon. That's just everybody does.
Everybody does. But that's an X factor. We don't know.
There's always going to be that though, Jeff. War Over
the years, things that cause oil and gas prices to
go up. Look at home prices have skyrocketed.
Speaker 2 (20:43):
Yes, that's great if you're a seller and availability. And
we talked about this too. It used to be us
baby boomers were clogged, just like with we were just
talking about employees. When the employees are staying longer so
that people can't move up the ranks because you know,
the gen xers are staying a little.
Speaker 1 (21:02):
Bit longer, and I know where you're going. People are
staying in their in.
Speaker 2 (21:04):
Their homes longer because they don't want to part with
the two and a half or three percent mortgages. It
used to be as baby boomers that were doing it,
but now thirty year olds late late twenties. No, but
they you know, they could be moving up and their
houses getting larger houses, their families are growing, going to
part with that two and a half or three percent
mortgage that they locked in a couple of years ago.
Speaker 1 (21:27):
Yeah, and that may change, it may not. If you're
at two point six why would I buy a house
at six percent? Right now?
Speaker 2 (21:34):
A little bit, there's such a backlog. Real estate in
lock cases is worse, is worse it's been in twenty years,
and the new Fed Chairman Kevin Wor should be good
for that. I'm sure he wants to look at the
numbers that I don't want to look at, look like
he's a puppet of the Trump administration and just lower
interest rates. But I think there probably are going to
be good reasons coming out to justify lowering interest rates.
(21:56):
And you know, you get those interest rates under five percent,
especially if you ever get them under four percent. Oh,
I think that's going to free up a lot.
Speaker 1 (22:03):
Katie bar the door. I don't know where that phrase started.
I could google it, I don't care, but everybody knows
what I mean if it gets under for jeff my goodness,
I think if they get into the fives or low fives,
psychologically there's going to be movement. And then if you
get into the fours or even high fours, there's just
a lack of inventory. Like you said, people aren't moving
for that obvious reason. Enough, if you've got your house
(22:24):
paid for. This is a whole, entirely different topic. But
by the time I retire, is that a goal to
have no mortgage?
Speaker 2 (22:31):
I think it's a good thing, but a lot of
times people still hang on to the mortgage. Again, one
because of lower interest rates. But also they look at
cash flow in retirement and your cash flow as such
with perhaps a pension, but four oh one K social security,
if your cash flow investment income. If your cash flow
is good enough that can support a mortgage payment, and
(22:54):
you have a low interes strate why pay it off.
Sometimes for a lot of people, though, there are things
that make economic sense and things that make emotional sense.
Economic sense says, boy, I have a two and a
half or three percent mortgage. I'm not paying it off.
Emotional sense says I don't care if it's three percent.
I still have that mortgage hanging over my head, and
I have those monthly payments hanging over my head. So
(23:16):
sometimes emotional sense outweighs economic sense. It may make sense
economically to hang on to it, but emotionally you want
to have it all paid off. That makes sense too.
Speaker 1 (23:24):
Great advice, Great topics on generation delaying that retirement Generation X,
I should say delaying that retirement now when we come back,
a lot more coming up in the meantime questions or
maybe you're like sitting there driving in your car right now,
you're listening to Jeff Cohal in the retirement Clinic and going,
oh boy, you know, it's something I've been putting on
the back burner, almost like I don't know a trust
(23:44):
or a state plan. People delay things. Jeff, Absolutely, retirement
plan is something once you start it, if you can start,
if it's a four to one k you almost it's
just I don't want to say set it and forget it.
Speaker 2 (23:54):
It's never that you have to. We're already halfway through
the year. Some people might have said, when when the
calendar slips over, then for sure I'm gonna start working
on it. And then you go on vacations or you're
away for the winter, or you just don't want to
do it. And now you're in spring and now you're
doing plantings, and then summer you're might have summer vacation.
So there's never a good time. Pick up the phone,
call us casually. Call Chauncey. He's a great guy.
Speaker 1 (24:16):
To this show last week.
Speaker 2 (24:18):
He does great job. Give him a call, Give me
a call two six two five two two four zero
four zero, give Aaron Kola call. We'll make sure we
get the right the advisor to you. But make sure
you start planning right now. Don't delay, don't put it
off because something else is sure to come up, so
make sure that you get well.
Speaker 1 (24:37):
There's also a reason, Jeff, it's summer now, well technically
June twenty first, you know what I mean, it's summer,
it's the two hundred and fiftieth birthday of the country.
July fourth is busy. There's always stuff going on. I
think it's just so important you cannot put off your
retirement plan two six two five to two forty forty.
Creative Planning dot com a great resource to podcasts around
(24:57):
the retirement Clinic dot com. Jeff, Oh, well, what's coming
up next?
Speaker 2 (25:02):
We're gonna talk a little bit about a loan but
not lonely. So you know how people, especially after they retire,
they're not necessarily as lonely as you might think.
Speaker 1 (25:15):
Well, there's the internet and everything else. Right now, there's
AI I don't know if that's where you're going with it,
but there's all kinds of social activities to keep one busy.
I don't think I would ever have a problem with that.
Speaker 2 (25:26):
Yeah, and a lot of people are more socially active
even after they retire, and they've got a group of friends.
And we'll talk about that after the break.
Speaker 1 (25:32):
Sounds good, Jeff. If anything, I'll just be honest. Some
days I look forward. I just want three hours by myself.
That's right area, Maybe on a movie, maybe just sit
back and backyard, just by myself.
Speaker 2 (25:43):
It's nice when you have nothing planned once in a while.
Speaker 1 (25:45):
It is those days are I think refreshing, yep, and
probably mentally good for your health.
Speaker 2 (25:51):
I think you're right.
Speaker 1 (25:51):
Jeff Cowle is here all this good stuff with Jeff
a wsn's Retirement Clinic. I'm Paul Crown Force News Talk
eleven thirty WICN. We're back after this. It's WYSN and
the Retirement Clinic. Always a pleasure having Jeff Kowaal hosting
the show, you know, originally going back, Jeff, we've been
doing the show since two thousand and one. I mentioned
that how long have you been doing this? The co
(26:14):
investment more than forty years?
Speaker 2 (26:15):
I mean, and I tell you seven We started a
co investment group specializing in retirement planning, typically working with
those with a million, two million, five million dollars or more.
That's been our specialty over the years. We e merge
with Creative Planning about a year and a half ago.
Everything under one roof, especially the retirement planning, cash flow projections,
investment management, all those things with regard to the retirement
(26:36):
estate planning, making sure those of trust get done.
Speaker 1 (26:38):
And information online. If you've got questions, go to the
retirement Clinic dot com or Creative Planning dot com. Better yet,
you want to talk to somebody, pick up your phone
call two six two five two two forty forty. What's
up next?
Speaker 2 (26:52):
Jeff? Three quick item Paul. One is alone but not lonely.
The second one is a state planning, and the third
one is the forced forced roth IRA. That's where high
income earners are forced to put the money and it
could be really good things. We'll talk about that first
one kiplingers again alone but not lonely. More than fifteen
(27:17):
million Americans age fifty five and up don't have children
or a partner. But many of those solo agers as
they call them, have a strong network of family and
friends rely on. According to a survey by the Society
of Actual Society of Actuaries Research Institute, sixty seven percent
of the solo age of survey said they were confident
(27:40):
their support network would reliably support them as they age.
That's sixty seven percent, sixty six percent of those surveyed
said family members are part of support network, followed by
friends forty nine percent and neighbors thirty two percent. I
think that's pretty good. I mean you look at you know,
you maintain really relationships over your lifetime with family, friends,
(28:02):
feel comfortable going and so, yeah, it'd be nice if
you had family or kids or a partner, but if
you don't, that's not the worst thing. Three quarters of
solo age of survey said they live in a home
they own a rent. Eighty eight percent said they were
somewhat of very confident that they'll be able to remain
in the current residence for the foreseeable future. Agent place.
We've been talking about that for the last twenty years too,
(28:25):
you know, building your home, remodeling your home so that
you know, a lot of people back twenty years ago,
they're saying a lot of people are going to go
to the nursing homes. No, people who would prefer to
have assisted living or you know, stay in their homes.
Speaker 1 (28:38):
So and it's not just the grab bar by the toilet.
Remodeling has gone way to the next level. Yeah, just
to make it easier to live everything with no little bumps,
you know, to get into the next room, wider doorways, yep,
everything on one four.
Speaker 2 (28:51):
Yeah, yeah, that's great. Society is published No. Three Corps
of solo age of survey. They own a rent, stay
there for seeable future. So that's the article about solo agers.
The next one is a state playing. Also in kiplingers,
older Americans are sitting on one hundred and ten trillion
(29:12):
of wealth trillion. Now. While I say that, the next
thing I talk about in the wealth management preservation segment
that says, you know, don't wait for that trillion dollars
to come to you. It may not becoming so expected inheritance.
That's right, So I stay playing. Older Americans are sitting
on trillion million, but the adult children probably shouldn't quit
(29:34):
their day job, says the wal Tree Journal. Booking Institute
economists told the journal that age group with the most
aggregate wealth in twenty twenty one was fifty five to
sixty four years old. American women at age sixty four
can't expect to live another twenty years.
Speaker 1 (29:52):
So American women, you said.
Speaker 2 (29:54):
Yeah, American women sixty four. So I expected to live
another twenty years, and that's where all the wealth is,
So they says so kids, don't hold your breath. Don't
quit your day, John.
Speaker 1 (30:03):
Mom, mom's living longer.
Speaker 2 (30:05):
Folks yes or grandma yeah, so yes, you may get it,
but don't count on it now, and don't quit your
job now.
Speaker 1 (30:12):
You have said that for years in the show. Never
plan or count on your parents' inheritance because even though
it may happen, there's factors in.
Speaker 2 (30:20):
Life, right, that's right, long term care issues, inheritance, taxes, disability,
I mean, health is a huge one, all kinds of
things that might happen. Okay, here's the last one in
this segment, Paul, this is uh. I don't remember where
I got this from Kiplinger's Personal Finance Catherine Palmer I
(30:40):
wrote this. This is really good, and we talk about
this time and time again. I love Wroth. Irays Wroth,
irays Wroth. For one case, you paid the taxes up front,
grows tax free forever. But as of twenty twenty six,
if you're fifty year older and made more than one
hundred and fifty thousand dollars last year, any catchup contributions
you make to her four oh one k must go
(31:01):
into a roth. For one k, you can't put it
into the traditional one, so that means you pay taxes
on the money up front instead of getting the usual
tax break. This is one of the situations where something
that feels painful at the beginning might end up being
actually pretty good.
Speaker 1 (31:17):
Because when you take that money.
Speaker 2 (31:18):
Out, you're not paying free.
Speaker 1 (31:20):
That's right, when taxes are more than likely than not
going to be high.
Speaker 2 (31:23):
That's you're looking at my notes here, Paul, because key
benefits are that the protection against future tax increases. You
pay taxes at today's rates on the ketchup a months. Yeah,
it might be at top tax bracket now, but who's
not to say that if you're making a lot of
money now, you won't be in the future. You might
still be making a lot of money and those tax
rates might go up, so protect protection against future tax increases.
(31:47):
Participants who earn more than one hundred and fifty thousand
fiight of wages in twenty twenty five are considered high
earners for twenty twenty six. For twenty twenty seven, you're
considered a high earner. More than that threshold, like a
little bit higher due to inflation. So it's probably gonna
be one hundred and fifty five thousand something like that,
and fighter wages and plan providers are required to begin
(32:08):
begin implementing this change of twenty twenty six and must
be fully compliant by twenty twenty seven. And some people
are grumbling about it, but again, this forced roth end
up could end up being one of the best things
for you in retirement. Again, just a couple of things
before we go to break poll tax free growth and withdrawals.
All the earnings on are tax free because you already
(32:30):
paid the tax on. You already paid your power the flesh.
You're good to go. No requirement of distributions. We see
that people have a lot of money accumulating their iras
in four to one case, and you have to take
requirement of distributions pushes them into a higher tax bracket.
They are mds, that's right. No rm ds on roth iras,
(32:51):
stronger inheritance. If you pass it down to your kids,
chance that your kids will get at the peak of
their income. If it's tax free to them, they'll love
you for it. So it really helped a lot of people.
You may grumble about, But the new four one K
rule may you may appreciate a lot later. And why again,
the new four to one k catchup rule might be
doing you a favor in the long run by leaving
(33:12):
you with more retirement money, and it's all tax free
and might be a real winner for you.
Speaker 1 (33:18):
In your experience, Jeff, you see more employers offering the
wroth four oh one K.
Speaker 2 (33:23):
Yeah, a lot of them are mandated that they have
to over but yes, and a lot more people are
taking advantage.
Speaker 1 (33:29):
I mean, I get the grumbling, I don't want to
pay taxes up front. Yes, but you're going to be
taxed anyway better now than when you take it out.
Speaker 2 (33:36):
And a lot of individuals don't make a conscious Decisiontiven,
think about they think I need the tax break. No,
you might not. It might be okay to put money
or even split at fifty to fifty half half of
your money go into the wroth, half of it going
to the traditional So you get a break now on
some of it. You get a big break later later
on when all that money in the wroth four O
(33:57):
one K is tax free.
Speaker 1 (33:58):
These are all things that you may need in Adviser
four to point out to you when you do your
planning for retirement.
Speaker 2 (34:04):
Absolutely give our office call two six two five to
two four zero four zero or go to the Retirement
Clinic dot com.
Speaker 1 (34:11):
The Weekly Wealth Management and Preservation segment is coming up
next as we continue with Jeff Colewal. I'm Paul Crownforth's
News Talking Love and thirty wis and it's the Retirement
Clinic and we'll be right back the Bare Naked Ladies
with her. If I had a million dollars, Jeff, we
play that for this segment. We should mention welcome back.
This is the Retirement Clinic with Jeff Coolewal. This is
(34:31):
the weekly Wealth Management and Preservation segment.
Speaker 2 (34:34):
Jeff. This show us for everybody, but this particular segment
for those with a million dollars or more. Once you
to accumulate some wealth, say a million dollars or more,
you reach the point if you have a million, two million,
five million, ten million dollars or more, how do you
preserve it? Grow it, take income from it, and pass
it on to your air So that's and a lot
of people think that's not me. But if you again,
(34:57):
if you have million dollars or a half million dollars
or four to one k, if you have a five
hundred thousand dollars home, if you have other investments, if
you settle a lawsuit, if you sell your business. There
are any number of ways that you can accumulate a
fair amount of wealth and be over a million dollars.
But this is an Investorpedia article. Investopedia the average inheritance revealed.
(35:19):
Here's how much people receive. This is Rebecca Rosenberg article
Investipedia large estates fifteen million dollars per individual in twenty
twenty six are subject to federal estate taxes. For a
husband and wife fifteen million dollars. Times too, you could
shelter thirty million dollars. The kicker is at over thirty
(35:39):
million dollars is tax at forty percent, so you get
nailed after that. Kentucky, Maryland, Nebraska, New Jersey and other
states imposed inheritance taxes, so you got to be aware
of that. Forty did you say forty forty four zero?
That's just ridiculous. It's almost half. Yeah. And then if
you have an IRA as part of that, there may
(36:01):
be taxed ordinary incomes that may be more than that.
Speaker 1 (36:03):
Penalizes for being successful and doing things right in America.
Speaker 2 (36:07):
That's right, they say thirty million dollars. That's likely to
go up, but with inflation. But again inheritance can be
life changing, from payoff debt to investing in the future.
It's a financial turning port for many families. But according
to Federal Reserve data, on average, on average American households
(36:27):
inherit forty six dollars. We talk about the trillions that's available,
but the numbers in flayed by large amounts passed down
in wealthy families.
Speaker 1 (36:37):
With that, you know, when you break it down, that's
just not that much. I mean, come on, yeah, maybe
maybe buy a car, not even a new one with that.
Speaker 2 (36:45):
Don't quit your day job. No, No. You might think
that your prayers have a lot of money and unless
you talk to them about it directly, but it involves
direct monetary assets, real estate investments and other things. The
first thing is that be aware more just loans and
other financial liabilities probably have to be paid off before
you get the inheritance. So we were talking about it earlier.
(37:07):
If you get inheritance, jeez, mom, mom and dad's house
is worth a million bucks, but if there's a seven
hundred and fifty thousand dollars loan on that, maybe it's
not worth as much.
Speaker 1 (37:17):
You're not just still got to pay for that house.
Speaker 2 (37:19):
That's right. Legal tax implications. Inheritance involves a legal process
called probate, which confirms a will and distributes the assets.
And there might be some surprises in there. There might
be a homeless shelter or a hause, or know, some
other charity that might be getting a fair amount of money,
(37:41):
and you might get something less. Taxes can be reduced
again with its state taxes fifteen million for an individual
thirty million dollars. Other factors geographic location where the decease
live may affect how much you inherit and how much
tax you pay. I mentioned some of the states. The
estate and inheritance tax for states. There's none in Wisconsin,
(38:05):
but across the country there might be, and we mentioned
a couple of those states can be anywhere from ten
percent to sixteen percent a state inheritance tax. General differences.
Around eighty four trillion in assets will change hands, but
much of the so called great wealth will come from
baby boomers and will pass on to their heirs. People
are living longer now. The transfer of wealth will have
(38:27):
other notable market effects step up in basis for investments.
In other words, they use this exactly. Think as a
great example. For example, clients holding over a million dollars
in apple stock originally bought for fifty thousand dollars. The
people inherited can now sell it tax free after the inherited,
so that's a big plus.
Speaker 1 (38:47):
It is.
Speaker 2 (38:47):
It's called step up in basis where the capital gains,
that nine hundred and fifty thousand capital gains is wiped
out at death. So there are some good things. You know. Again,
don't plan on the inheritance, no, because.
Speaker 1 (38:59):
That forty six dollars, and you mentioned that's just not
that much for most American families. And by the time
the tax with every thousand, all of a sudden, that
sounds like twenty six thousand.
Speaker 2 (39:09):
Again, there are some great planning techniques that are available.
You want to preserve those that thirty million dollars. You
want to make sure that you do your planning so
it gets to the people that you intended to go to.
Speaker 1 (39:20):
I like what you said, Jeff. If the inheritance happens
and it's there, maybe it's significant, that's great, but never
plan and assume that it's coming your way.
Speaker 2 (39:28):
That's right.
Speaker 1 (39:28):
Good stuff. Jeff Cowal on Wysin's retirement Clinic Creative Planning
Dot com or check out the Retirement Clinic dot com.
How to get the ball rolling with an advisor. We'll
talk about that when we come back on wysin. How
do you get that ball rolling, Jeff? With the retirement plan,
even if you've got one, you're not happy, you want
to update it whatever. To reach out to creative.
Speaker 2 (39:50):
Planning, you must reduce it to writing. And we have
everything under one roof legal accounting, retirement plan and cash
flow projections investments. We manage over fourage a billion of
assets with creative planning. So we've got the wherewithal to
do that. Do give our office a call two six
to two five two to two four zero four zero,
or go online at the Retirement Clinic dot com. Again,
(40:12):
it's time to schedule a time to do it, not
just think about doing it.
Speaker 1 (40:16):
Always a pleasure having Jeff Cowaal on the Retirement Clinic.
Jeff uh, thank you so much. Enjoy the rest of
your weekend. Thanks you too, Paul, and I'm Paul Crown
Forced with Jeff Kowal. Now quick break for news. We
are back next Saturday. Every Saturday at ten o'clock on
the Retirement Clinic. Don't forget Monday through Friday. Those daily
market updates on the Dan O'Donnell Afternoon Show three five
(40:36):
pm News blocks. We'll see you next week, WISA Milwaukee.
Speaker 3 (40:40):
The preceding program is furnished by Creative Planning at SEC
registered investment advisory firm. Creative Planning, along with its affiliate
United Capital Financial Advisors, currently manages or advisors 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 theirs are solely their own and do not
(41:02):
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 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
(41:25):
been obtained from sources deemed reliable, but is not guaranteed.
If you would like our help, request to speak to
an advisor by going to creative Planning dot com. Creative Planning, tax,
and legal are separate entities that must be engaged independently.
News Talk Eleys and the Retirement Clinic is underway today,
hosted by Jeff Kowal, the og host of this program ogst.
Speaker 2 (00:13):
Wow, it's ofg oh, no, he's here again.
Speaker 1 (00:17):
No, Oh my god. Oh, there's so many acronyms. I
joke often every week in fact, about the acronyms in
your business Certified Financial Planner CFP. Then there's r mds.
It goes on. There could be twenty of them. Off
the tip of my tongue, Jeff, that I come up with.
Speaker 2 (00:33):
All kinds of stuff.
Speaker 1 (00:34):
Yep, Well, what do we focus on the Retirement Clinic?
On your retirement? Just a little tease. It's going to
be a good show, not just because Jeff is your hosting,
because we're talking about retiring early. Also Generation X that's
me by the way, I'm an exer, might be delaying retirement.
Speaker 2 (00:54):
Yeah. It's an interesting two different ways to look at it,
because somewhere anxious and out early and some are saying, hey,
I can't afford let's I got to stick around a while.
So we'll cover both sides of a couple of different articles,
a couple of things I looked at and research. I
think it pretty interesting.
Speaker 1 (01:09):
Good stuff, Jeff, we should talk about Creative Planning. Of course,
for many, many years the co Waal Investment Group and
a part of this show. Boy we go way back
two thousand and one, twenty five years. Pretty good, pretty
good run and still going strong. Now it's with Creative Planning,
and about a year and a half ago we joined
Creative Planning.
Speaker 2 (01:27):
A great team, great partnership with them. We can cover
everything comprehensive wealth management, investment advisory service, retirement planning services,
legal accounting, insurance, trust services. We wanted to Aaron Kohal
and I wanted to get everything under one roof. We
either had to build it out ourselves and do all
(01:49):
these things or go with somebody who's been doing it
for twenty five years. Creative Planning has been doing it.
Is still fiercely independent. We act as produciers, always putting
our client's interests first. But the partnership with Creative Planning
has been great. And again doing the radio show. If
you want to look at listen to podcasts, you can
listen to it on Spotify. You can go to the
Retirement Clinic dot com and listen to our podcast as well.
Speaker 1 (02:12):
Good that's a good source to go to. If you
forget the phone number, just remember the Retirement Clinic dot
com or Creative Planning dot com as well. Locations have
not changed at all. Nothing's really changed except as you said,
joining forces with Creative Planning. So you're in Brookfield, Jeff
right on Blue Mountain in Racine, Delafield. Also up in
(02:33):
Port Washington, Mizauki County. Clients. Great location, Cape Coral, Florida, Phoenix, Arizona.
Here is something you should know, folks. Licensed in all
fifty states. That's big for people that retire and maybe
travel or we.
Speaker 2 (02:46):
Are blessed that our clients have. We were licensed to
co oed Vesper Group was licensed to twenty eight states.
Now we're licensed at all fifty states. And again we
were blessed because our clients would work with us here
and if they went somewhere else, either part time or
for the full year to live somewhere else, they stayed
with us. UH and next generation is staying with us.
We've got the manpower and the people in our office
(03:09):
with the next generation at place. So it's really a
lot of fun, great partnership. Give our office a call.
Two six two five two two four zero four zero
or go online at the Retirement Clinic dot com.
Speaker 1 (03:20):
I'm glad you mentioned the number. All reiterate that throughout
the hour instead of calling us here during the show.
Please any questions that come up, either if you need
services or if you just have a question about our
topic today. Two six two five two two forty forty.
That's enough about us, Now we talk about you and
your retirements.
Speaker 2 (03:39):
Let's start with this baron's article, and there are two
of them. One was Fox Business and one barons this
parent's articles Retiring early considered these three things. Elizabeth O'Brien
is one of the UH is the author of this,
and she's written a lot of good things over the
last several years about retirement, so I always go back
to her and always get some pretty interesting things. But
now it's about retiring early on. One of the things
(04:00):
you have to consider, it says older workers. Older workers,
I feel like I got slow down. I'm talking a
mile a minute. Older workers are colleay it quits in
droves job data shows before you join them. Make sure
you've cunched the numbers. It can be a hard decision
to reverse. And that's right. Create a planning. We want
(04:22):
you to retire once. We want it to be a
that you know that you can do it, that your
numbers are in place, that you feel good about the decision,
you have things planned in retirement, that you retire once.
But the shaff of Americans age fifty five and older
who are in a labor force fell to thirty seven
point one percent in April from forty point two percent
(04:43):
in January of twenty twenty. So in twenty twenty, forty
point two percent of the workforce were people over fifty five.
Now it's down to thirty seven percent. That's according to
a Bureau of Labor Statistics. It says it's the lowest
participation rate for an age group and roughly twenty.
Speaker 1 (05:00):
But it sort of makes sense with the boomers all aging, right,
the largest generation. Now the millennials have taken over that
in size. They're the largest generation, right.
Speaker 2 (05:09):
But they say that the percentage wise, regardless of the numbers,
percentage wise, the fifty five and older had always been
about forty percent. Now it's down with thirty seven percent.
Speaker 1 (05:18):
So we're just getting lazy.
Speaker 2 (05:20):
Well, they were retiring, they said, retiring baby boys could.
Speaker 1 (05:23):
Be or we're just trying to They could enjoy life
and family a little bit.
Speaker 2 (05:28):
But the youngest boomers are turning sixty two this year,
and that is you know, the baby boys are part
of the story. But members of Gen X who succeed
them are also leaving the workforce earlier than expected. Some
workers don't have a choice. Employee Benefit Research Institute says
hardships push a lot of people out of work earlier,
(05:48):
and this year serve a forty six percent of respondent's
retired earlier that planned. Of those forty six percent that
retired earlier, forty one percent retired reported health concern or
a disability. Thirty five percent cited changes in the company,
so they didn't like the changes in the company.
Speaker 1 (06:07):
I'm a cost of living? Is that on the list
at all?
Speaker 2 (06:09):
That's more with the next article where we talk about
some gen xers are staying longer because of the cost
of living. So I'll get to that on a second.
But for those who workers who are calling the shots,
three important factors that you have to consider before you
pull the pin and leave work. What is healthcare? Health
insurance can be the budget buster for retires under the
(06:31):
Medicare eligibility. Under Medicare eligibility sixty five. So if you're
leaving and you're under sixty five, you got to watch
out for healthcare costs. If you don't have retiree health
benefits or espouses health insurance plan, make sure you price
out your options before you leave. We have some clients
that are paying more than the mortgage payment. They're paying
(06:51):
more than two thousand dollars a month for health insurance.
You got to be careful with that.
Speaker 1 (06:57):
At least do that research before you pull the plug.
I can walk in and say I'm done, I'm retiring.
Speaker 2 (07:02):
Yep, and they see some of the Obamacare previums have
more than doubled in the year.
Speaker 1 (07:08):
So the Affordable Care Act is not so far.
Speaker 2 (07:11):
That so affordable. It replaces a mortgage pain, which is
kind of nuts. Portfolio adequacy I thought this one is
kind of interesting. So the first one is make sure
you look out for healthcare. Second thing is your portfolio.
Three plus years of blockbuster stock returns have brought early
retirement to reach for some workers. There's no magic number,
but a separate survey this year by Employee Benefit Research
(07:37):
Institute said that Americans need about one point four to
six million.
Speaker 1 (07:41):
I remember when it was a million.
Speaker 2 (07:43):
Yeah, so about a million and a half now, and
one general rule says that you just multiplayer expected annual
expenses by twenty five to arrive at that ballpark saving school,
so you could take up four percent of the portfolio. Okay,
let me put that numbers. Dollars times twenty five means
you need a million and a half. If you need
(08:03):
one hundred thousand dollars of your times twenty five, it
means you need two and a half million dollars to
walk away with comfort. So you just got to be
careful with that. Make sure you have enough money before
you retire, and make sure your finance and a lot
of it. It's not just the amount of money you have,
it's the amount of money you spend. So if you
live frugally, if you don't have any debt, those types
of things, then you're okay. It's not just about the
(08:24):
million and a half or two and a half million.
Last thing it says, so the first one's healthcare, Second
is your portfolio amount of assets. Third is your purpose.
As the saying goes, it's good to retire to something,
not just from your job. This means figuring out what
you'll do when you get out of bed in the morning.
Ideally before you're in position. In that position, you would
(08:46):
have taken a look at that, thought it through and
know that you have opportunities volunteer or activities or golf
or you know, it's part time work.
Speaker 1 (08:58):
Whatever it says, busy, whatever it is.
Speaker 2 (09:00):
This is an act of a plan for it, not
just get you know, because I know some people who
who were counting it down and really didn't plan it
much after retirement. Fortunately it's all turned out okay. For
those that just didn't have any plans it all day,
didn't know what they do in retirement, it says they
have so much they will know how they ever had
time to do these things.
Speaker 1 (09:20):
You almost have to find a new routine. Jeff, I've
changed my schedule. You know that. I'm so I'm an exer.
I can maybe we can use me as an example, Jeff,
I turned sixty on June third.
Speaker 2 (09:31):
Okay, today is what the thirteenth birthday?
Speaker 1 (09:34):
Thank you, Jeff. To me, it's just a number. I
don't feel sixty. I may look at but I don't
feel sixty. Okay, grandparent, I am just like you, Jeff.
I'm getting into the point where I was able to
a wisn continue on my weekend shows. It's kept me
very busy about three days a week, right, but it's
not six days a week which I was working.
Speaker 2 (09:55):
But you have a purpose and if you can control that.
You were talking earlier about how you can contro old
the hours of the days that you work and condensa.
So if you have babysitting duties, I'd say thursdays.
Speaker 1 (10:05):
Which I do, and I love life changes. But am
I am I the norm? Am I? I don't know, Jeff.
Not many six year olds can pull back. So I'm
not retired, but I have pulled back a bit. There
is something too. I think that process of weaning yourself
away not just cold turkey. But not everybody can do that.
Speaker 2 (10:25):
You're right, and there's a recent ARP survey found that
some Americans are unretiring due to high costs and desire
to stay active. In reality, it can be very hard
to return it to work and a comparable salary to
the one you left behind.
Speaker 1 (10:40):
And mentally, so you're one hundred percent checked out and retire.
You have the party, they get the cake, and then
just like that, it's over. You're retired. Then you gotta
go back.
Speaker 2 (10:51):
When you leave and you're yelling at the boss and
your way out and you say, ooh, maybe they need
to come back to work.
Speaker 1 (10:56):
Never do that.
Speaker 2 (10:56):
I think that's true.
Speaker 1 (10:57):
Yeah, I know it's emotional, but I've seen it in
my thirty five years here people on their way out,
exploitive line.
Speaker 2 (11:06):
Yeah, that's not good.
Speaker 1 (11:07):
I tell that even. Yes, of course, nobody likes being fired, Jeff,
nobody likes being to let go. But it's business. Business
is business.
Speaker 2 (11:16):
Let me do this other article because I thought it
was pretty interesting too. This is from Fox Business. Nearly
half of gen X workers are delaying retirement as rising costs,
stagnant wages drained savings. This is by Kristin Aultus from
Fox Business. At gen X born between nineteen sixty five
and nineteen eighty, so people between forty six and sixty one.
(11:38):
That's just you, Paul born in sixty six, Yep, so
that's the gen xers. Nearly half are delaying retirement for
a generation. It should be as peak savings years. The
prospect of retiring on time has shifted from a plan
to a prayer. That's according to Kristin Altus, a newly
foreign employee financial Wellness survey found that fifty percent of
(12:02):
gen X employees are pushing back the retirement dates, sighting
stagnant wages, rising every day costs, and lack of liquidity.
Companies are looking for profitability. You may not be getting those,
you know, when you're at the peak of your income,
and you may not be getting the same raises that
you were on your way up. Additionally, only thirty eight
percent of gen xers believe they can retire when they
(12:23):
originally planned thirty eight percent. Again, that's the reason to
work with us with creative planning. We make sure that
you can retire once. Make sure the numbers are good.
And I think a big part of that, Paul, we
do cash flow projections for our clients. What happens if
there's a healthcare issue, long term care issue that's going
to last four years or longer, What apples if kids
need help, What if you want to do gifting, What
(12:44):
if you want to do aggressive travel? All these things
can be planned for and reduce it to writing. Don't
just kind of eyeball and say, yeah, this is I
think I'm a travel more in retirement. No, make sure
so that if you want to delay retirements because you
know what the numbers are, and you know you're happy
working in different things like that. But the driver, the
(13:05):
primary driver of this retirement delay is the inability to save.
Is inflation eats away at monthly expenses. Twenty five percent
in this report, twenty five percent of total workforce is
living without a buffer. In nearly half cannot make basic
household expenses.
Speaker 1 (13:23):
When you say twenty five percent without a buffer, that
just means they've got.
Speaker 2 (13:27):
Nothing nothing paycheck to paycheck. Yes, that's age forty six
to sixty one, twenty five percent of those people. I
thought that was fairly high too. Uh. Nearly half a
gen X workers are deleaying retirement. According to the report,
forty nine percent say their compensation is in keeping up
with costs.
Speaker 1 (13:46):
I thought, I hear that a lot. Yeah, I just
everybody's talking about it, the cost of everything.
Speaker 2 (13:50):
Yeah, this I thought was interesting. I have a highlighted
start and everything else. As a result, what gen X
just cannot afford to leave the current jobs The entrrent
entire corporate ladder stalls, creating business risks with companies facing
higher costs as older talent refuses to leave. They didn't
say that refuse to leave on payroll longer than expect it.
(14:14):
So now they've got higher costs of these people. They
can't hire you, they can't backfill with younger people.
Speaker 1 (14:19):
And probably benefits. You know that employees can be expensive
to companies that are trying to scale back when you
can have a twenty five year old perhaps do the
same job for a lot less money.
Speaker 2 (14:30):
Yeah, so so be careful with that. The findings also
show a significant portion forty one percent of workforce feel
that they were never given the tools to magic crisis
of magnitude. That's kind of on them too. I mean,
you could go to an advisor. You could say, yeah,
my company didn't tell me that i'd be wouldn't have
enough money. Well, there are tools available in your timement
(14:51):
plan companies like ours.
Speaker 1 (14:53):
It's your own personal responsibility, Jeff, your retirement. An advisor
is there to help creative planning. Your advisors are there
to help. And that's kind of what we've been preaching
for the last twenty five years. The only people are
gonna care about your retirement is you. Companies can help.
Companies could give you access to it at work and that,
but you're ultimately responsible for that. And we found that
(15:15):
over the last twenty five years and even started before that.
When the trend is going away from pensions to four
to one k. Basically, the companies were saying, we're going
to dump the responsibility if you're retirement planning onto you.
It got too expensive to do pensions, so do four
to one case.
Speaker 2 (15:32):
We'll match. We'll do some sort of company match to
help you.
Speaker 1 (15:35):
A match is significant free money.
Speaker 2 (15:37):
Absolutely, but they say, ultimately it's your responsibility. If you
won't put money in, you don't get the match.
Speaker 1 (15:43):
You don't so it is your responsibility. Is an entirely
different topic. But these new Trump accounts for babies are
just fascinating to me. Jeff, time will tell if they
work out. Yeah, it's kind of like a four to
one K for a baby. Yes, you gotta be careful
how you do those.
Speaker 2 (15:58):
So there's gonna be more information on those funding them
to see how this plays out. Yeah, it's gonna be
pretty cool.
Speaker 1 (16:04):
We will be talking about those we already have on
some programs. If you haven't heard of them, Trump.
Speaker 2 (16:09):
Accounts, Yeah, we'll talk. I don't think we're going to
talk about that today too much.
Speaker 1 (16:15):
I'm not just thinking listen I'm thinking, like you know,
August September, and we're looking for things to talk about.
Speaker 2 (16:21):
Well, there will be a time to do that. But
I agree with you those are gonna be great accounts.
The last thing on this article is employees define financial
wellness simply less stress, fewer surprises, and the freedom to
make financial choices with confidence. And for employers, that's the
opportunity to try to give the employees the opportunity to
(16:42):
do all those types of things and do your planning.
It's a big deal. You have to uh, and then
and then match expectation with reality. Working long and this
is a Kiplinger little piece. Kiplinger does these things each month.
It's called Information to Act on. I'll look at the
articles and their articles. Yeah that's good. Yeah, that's kind
(17:02):
of interesting. And then you get to the information to
act and I think this stuff is brief to the
point that this is expectation versus reality. Working longer is
one of the most effective ways to reduce the risk
that you run out of money in retirement. Unfortunately, many
older workers overestimate how long they'll be able to stay
in the job. According to Employee Benefit Research, the twenty
(17:23):
twenty six survey found that forty six percent of retireers
left the work workforce earlier than planned. Forty percent of
workers said he planned to work to age seventy or older.
Only ten percent of retiers said they actually worked that long.
So forty percent think they'll work to seventy, only ten
percent actually do that.
Speaker 1 (17:44):
Seems I mean, that's just me. That seems pretty long.
Seventy seventy.
Speaker 2 (17:48):
Yeah, not other people are doing it, especially if you're talented,
people are healthier. Social Security benefits you max out age seventy.
That's the highest. You can't get any higher than that, so.
Speaker 1 (17:59):
You can out start. Let's review that.
Speaker 2 (18:00):
You can start at sixty two social Security two. There's
a reduction fairly significant. But the numbers say that if
you start at sixty two, it's the full retirement age.
It takes you till the early eighties for you to
break even what's considered full retirement age. Draft for most
people now it's around sixty seven, sixty six years, eight months,
(18:21):
sixty seven right around that, and then from sixty seven
to seventy it increases by eight percent a year to
your Social Security benefits. So some people say, well, I
think I'll stick around for a couple more year stage
seventy and make sure that when I retire, I can
retire with the highest Social Security benefit possible.
Speaker 1 (18:38):
And everybody's got a different you look at your client's draft.
Everybody's different. You customize a retirement plan. Some people might
be business owners, they may own, you know, tangible assets
or landlords. Then there's police officers and teachers. Some might
get pension at fifty three.
Speaker 2 (18:54):
That's right.
Speaker 1 (18:55):
Everybody's different. Everybody's income is different, our goals are different.
Speaker 2 (18:58):
Yeah, my wife, she worked for Ameritech first and at
and T, and they were thirty years that you could
qualify that you invest in your pension after your retirement plan,
after benefits after thirty years, so we had health insurance
benefits all the way to sixty five. So it was
for us, and they've discontinued that since a lot of
(19:19):
companies have. It's got to be very expensive today, people
living longer, the cost going up. But we were lucky.
But you're right, thirty years and out for a lot
of companies and police officers, others thirty years and you
invest in pensions on.
Speaker 1 (19:31):
That you always factor and inflation and cost of living, Jeff.
When you do and project. Let's say it thirty year
old comes to see you, Jeff, I want to use
creative planning for my retirement plan. And there's all kinds
of factors, but you must include the cost of living,
right of course.
Speaker 2 (19:45):
Yeah, assumed interest rate and cost of living. We usually
do about thirty percent three percent, three percent cost of living,
about six percent growth rate. Six percent for long term
is probably pretty good, especially in retirement. Prior retirement, you
could use a larger one, but nonetheless, and then three
percent inflation if you go back one hundred years, that's
(20:07):
a pretty good number. There are times, you know, like
a couple of years ago when it was nine percent,
but times like now it's two and a half percent.
So inflation has come down now. I think it's edged
up a little bit because of the cost of oil,
but that'll come down too.
Speaker 1 (20:21):
Yeah, the Iran thing is a fluid situation, but I
don't think it's permanent. It's clearly not permanent. I just
hope it kind of stops soon. That's just everybody does.
Everybody does. But that's an X factor. We don't know.
There's always going to be that though, Jeff. War Over
the years, things that cause oil and gas prices to
go up. Look at home prices have skyrocketed.
Speaker 2 (20:43):
Yes, that's great if you're a seller and availability. And
we talked about this too. It used to be us
baby boomers were clogged, just like with we were just
talking about employees. When the employees are staying longer so
that people can't move up the ranks because you know,
the gen xers are staying a little.
Speaker 1 (21:02):
Bit longer, and I know where you're going. People are
staying in their in.
Speaker 2 (21:04):
Their homes longer because they don't want to part with
the two and a half or three percent mortgages. It
used to be as baby boomers that were doing it,
but now thirty year olds late late twenties. No, but
they you know, they could be moving up and their
houses getting larger houses, their families are growing, going to
part with that two and a half or three percent
mortgage that they locked in a couple of years ago.
Speaker 1 (21:27):
Yeah, and that may change, it may not. If you're
at two point six why would I buy a house
at six percent? Right now?
Speaker 2 (21:34):
A little bit, there's such a backlog. Real estate in
lock cases is worse, is worse it's been in twenty years,
and the new Fed Chairman Kevin Wor should be good
for that. I'm sure he wants to look at the
numbers that I don't want to look at, look like
he's a puppet of the Trump administration and just lower
interest rates. But I think there probably are going to
be good reasons coming out to justify lowering interest rates.
(21:56):
And you know, you get those interest rates under five percent,
especially if you ever get them under four percent. Oh,
I think that's going to free up a lot.
Speaker 1 (22:03):
Katie bar the door. I don't know where that phrase started.
I could google it, I don't care, but everybody knows
what I mean if it gets under for jeff my goodness,
I think if they get into the fives or low fives,
psychologically there's going to be movement. And then if you
get into the fours or even high fours, there's just
a lack of inventory. Like you said, people aren't moving
for that obvious reason. Enough, if you've got your house
(22:24):
paid for. This is a whole, entirely different topic. But
by the time I retire, is that a goal to
have no mortgage?
Speaker 2 (22:31):
I think it's a good thing, but a lot of
times people still hang on to the mortgage. Again, one
because of lower interest rates. But also they look at
cash flow in retirement and your cash flow as such
with perhaps a pension, but four oh one K social security,
if your cash flow investment income. If your cash flow
is good enough that can support a mortgage payment, and
(22:54):
you have a low interes strate why pay it off.
Sometimes for a lot of people, though, there are things
that make economic sense and things that make emotional sense.
Economic sense says, boy, I have a two and a
half or three percent mortgage. I'm not paying it off.
Emotional sense says I don't care if it's three percent.
I still have that mortgage hanging over my head, and
I have those monthly payments hanging over my head. So
(23:16):
sometimes emotional sense outweighs economic sense. It may make sense
economically to hang on to it, but emotionally you want
to have it all paid off. That makes sense too.
Speaker 1 (23:24):
Great advice, Great topics on generation delaying that retirement Generation X,
I should say delaying that retirement now when we come back,
a lot more coming up in the meantime questions or
maybe you're like sitting there driving in your car right now,
you're listening to Jeff Cohal in the retirement Clinic and going,
oh boy, you know, it's something I've been putting on
the back burner, almost like I don't know a trust
(23:44):
or a state plan. People delay things. Jeff, Absolutely, retirement
plan is something once you start it, if you can start,
if it's a four to one k you almost it's
just I don't want to say set it and forget it.
Speaker 2 (23:54):
It's never that you have to. We're already halfway through
the year. Some people might have said, when when the
calendar slips over, then for sure I'm gonna start working
on it. And then you go on vacations or you're
away for the winter, or you just don't want to
do it. And now you're in spring and now you're
doing plantings, and then summer you're might have summer vacation.
So there's never a good time. Pick up the phone,
call us casually. Call Chauncey. He's a great guy.
Speaker 1 (24:16):
To this show last week.
Speaker 2 (24:18):
He does great job. Give him a call, Give me
a call two six two five two two four zero
four zero, give Aaron Kola call. We'll make sure we
get the right the advisor to you. But make sure
you start planning right now. Don't delay, don't put it
off because something else is sure to come up, so
make sure that you get well.
Speaker 1 (24:37):
There's also a reason, Jeff, it's summer now, well technically
June twenty first, you know what I mean, it's summer,
it's the two hundred and fiftieth birthday of the country.
July fourth is busy. There's always stuff going on. I
think it's just so important you cannot put off your
retirement plan two six two five to two forty forty.
Creative Planning dot com a great resource to podcasts around
(24:57):
the retirement Clinic dot com. Jeff, Oh, well, what's coming
up next?
Speaker 2 (25:02):
We're gonna talk a little bit about a loan but
not lonely. So you know how people, especially after they retire,
they're not necessarily as lonely as you might think.
Speaker 1 (25:15):
Well, there's the internet and everything else. Right now, there's
AI I don't know if that's where you're going with it,
but there's all kinds of social activities to keep one busy.
I don't think I would ever have a problem with that.
Speaker 2 (25:26):
Yeah, and a lot of people are more socially active
even after they retire, and they've got a group of friends.
And we'll talk about that after the break.
Speaker 1 (25:32):
Sounds good, Jeff. If anything, I'll just be honest. Some
days I look forward. I just want three hours by myself.
That's right area, Maybe on a movie, maybe just sit
back and backyard, just by myself.
Speaker 2 (25:43):
It's nice when you have nothing planned once in a while.
Speaker 1 (25:45):
It is those days are I think refreshing, yep, and
probably mentally good for your health.
Speaker 2 (25:51):
I think you're right.
Speaker 1 (25:51):
Jeff Cowle is here all this good stuff with Jeff
a wsn's Retirement Clinic. I'm Paul Crown Force News Talk
eleven thirty WICN. We're back after this. It's WYSN and
the Retirement Clinic. Always a pleasure having Jeff Kowaal hosting
the show, you know, originally going back, Jeff, we've been
doing the show since two thousand and one. I mentioned
that how long have you been doing this? The co
(26:14):
investment more than forty years?
Speaker 2 (26:15):
I mean, and I tell you seven We started a
co investment group specializing in retirement planning, typically working with
those with a million, two million, five million dollars or more.
That's been our specialty over the years. We e merge
with Creative Planning about a year and a half ago.
Everything under one roof, especially the retirement planning, cash flow projections,
investment management, all those things with regard to the retirement
(26:36):
estate planning, making sure those of trust get done.
Speaker 1 (26:38):
And information online. If you've got questions, go to the
retirement Clinic dot com or Creative Planning dot com. Better yet,
you want to talk to somebody, pick up your phone
call two six two five two two forty forty. What's
up next?
Speaker 2 (26:52):
Jeff? Three quick item Paul. One is alone but not lonely.
The second one is a state planning, and the third
one is the forced forced roth IRA. That's where high
income earners are forced to put the money and it
could be really good things. We'll talk about that first
one kiplingers again alone but not lonely. More than fifteen
(27:17):
million Americans age fifty five and up don't have children
or a partner. But many of those solo agers as
they call them, have a strong network of family and
friends rely on. According to a survey by the Society
of Actual Society of Actuaries Research Institute, sixty seven percent
of the solo age of survey said they were confident
(27:40):
their support network would reliably support them as they age.
That's sixty seven percent, sixty six percent of those surveyed
said family members are part of support network, followed by
friends forty nine percent and neighbors thirty two percent. I
think that's pretty good. I mean you look at you know,
you maintain really relationships over your lifetime with family, friends,
(28:02):
feel comfortable going and so, yeah, it'd be nice if
you had family or kids or a partner, but if
you don't, that's not the worst thing. Three quarters of
solo age of survey said they live in a home
they own a rent. Eighty eight percent said they were
somewhat of very confident that they'll be able to remain
in the current residence for the foreseeable future. Agent place.
We've been talking about that for the last twenty years too,
(28:25):
you know, building your home, remodeling your home so that
you know, a lot of people back twenty years ago,
they're saying a lot of people are going to go
to the nursing homes. No, people who would prefer to
have assisted living or you know, stay in their homes.
Speaker 1 (28:38):
So and it's not just the grab bar by the toilet.
Remodeling has gone way to the next level. Yeah, just
to make it easier to live everything with no little bumps,
you know, to get into the next room, wider doorways, yep,
everything on one four.
Speaker 2 (28:51):
Yeah, yeah, that's great. Society is published No. Three Corps
of solo age of survey. They own a rent, stay
there for seeable future. So that's the article about solo agers.
The next one is a state playing. Also in kiplingers,
older Americans are sitting on one hundred and ten trillion
(29:12):
of wealth trillion. Now. While I say that, the next
thing I talk about in the wealth management preservation segment
that says, you know, don't wait for that trillion dollars
to come to you. It may not becoming so expected inheritance.
That's right, So I stay playing. Older Americans are sitting
on trillion million, but the adult children probably shouldn't quit
(29:34):
their day job, says the wal Tree Journal. Booking Institute
economists told the journal that age group with the most
aggregate wealth in twenty twenty one was fifty five to
sixty four years old. American women at age sixty four
can't expect to live another twenty years.
Speaker 1 (29:52):
So American women, you said.
Speaker 2 (29:54):
Yeah, American women sixty four. So I expected to live
another twenty years, and that's where all the wealth is,
So they says so kids, don't hold your breath. Don't
quit your day, John.
Speaker 1 (30:03):
Mom, mom's living longer.
Speaker 2 (30:05):
Folks yes or grandma yeah, so yes, you may get it,
but don't count on it now, and don't quit your
job now.
Speaker 1 (30:12):
You have said that for years in the show. Never
plan or count on your parents' inheritance because even though
it may happen, there's factors in.
Speaker 2 (30:20):
Life, right, that's right, long term care issues, inheritance, taxes, disability,
I mean, health is a huge one, all kinds of
things that might happen. Okay, here's the last one in
this segment, Paul, this is uh. I don't remember where
I got this from Kiplinger's Personal Finance Catherine Palmer I
(30:40):
wrote this. This is really good, and we talk about
this time and time again. I love Wroth. Irays Wroth,
irays Wroth. For one case, you paid the taxes up front,
grows tax free forever. But as of twenty twenty six,
if you're fifty year older and made more than one
hundred and fifty thousand dollars last year, any catchup contributions
you make to her four oh one k must go
(31:01):
into a roth. For one k, you can't put it
into the traditional one, so that means you pay taxes
on the money up front instead of getting the usual
tax break. This is one of the situations where something
that feels painful at the beginning might end up being
actually pretty good.
Speaker 1 (31:17):
Because when you take that money.
Speaker 2 (31:18):
Out, you're not paying free.
Speaker 1 (31:20):
That's right, when taxes are more than likely than not
going to be high.
Speaker 2 (31:23):
That's you're looking at my notes here, Paul, because key
benefits are that the protection against future tax increases. You
pay taxes at today's rates on the ketchup a months. Yeah,
it might be at top tax bracket now, but who's
not to say that if you're making a lot of
money now, you won't be in the future. You might
still be making a lot of money and those tax
rates might go up, so protect protection against future tax increases.
(31:47):
Participants who earn more than one hundred and fifty thousand
fiight of wages in twenty twenty five are considered high
earners for twenty twenty six. For twenty twenty seven, you're
considered a high earner. More than that threshold, like a
little bit higher due to inflation. So it's probably gonna
be one hundred and fifty five thousand something like that,
and fighter wages and plan providers are required to begin
(32:08):
begin implementing this change of twenty twenty six and must
be fully compliant by twenty twenty seven. And some people
are grumbling about it, but again, this forced roth end
up could end up being one of the best things
for you in retirement. Again, just a couple of things
before we go to break poll tax free growth and withdrawals.
All the earnings on are tax free because you already
(32:30):
paid the tax on. You already paid your power the flesh.
You're good to go. No requirement of distributions. We see
that people have a lot of money accumulating their iras
in four to one case, and you have to take
requirement of distributions pushes them into a higher tax bracket.
They are mds, that's right. No rm ds on roth iras,
(32:51):
stronger inheritance. If you pass it down to your kids,
chance that your kids will get at the peak of
their income. If it's tax free to them, they'll love
you for it. So it really helped a lot of people.
You may grumble about, But the new four one K
rule may you may appreciate a lot later. And why again,
the new four to one k catchup rule might be
doing you a favor in the long run by leaving
(33:12):
you with more retirement money, and it's all tax free
and might be a real winner for you.
Speaker 1 (33:18):
In your experience, Jeff, you see more employers offering the
wroth four oh one K.
Speaker 2 (33:23):
Yeah, a lot of them are mandated that they have
to over but yes, and a lot more people are
taking advantage.
Speaker 1 (33:29):
I mean, I get the grumbling, I don't want to
pay taxes up front. Yes, but you're going to be
taxed anyway better now than when you take it out.
Speaker 2 (33:36):
And a lot of individuals don't make a conscious Decisiontiven,
think about they think I need the tax break. No,
you might not. It might be okay to put money
or even split at fifty to fifty half half of
your money go into the wroth, half of it going
to the traditional So you get a break now on
some of it. You get a big break later later
on when all that money in the wroth four O
(33:57):
one K is tax free.
Speaker 1 (33:58):
These are all things that you may need in Adviser
four to point out to you when you do your
planning for retirement.
Speaker 2 (34:04):
Absolutely give our office call two six two five to
two four zero four zero or go to the Retirement
Clinic dot com.
Speaker 1 (34:11):
The Weekly Wealth Management and Preservation segment is coming up
next as we continue with Jeff Colewal. I'm Paul Crownforth's
News Talking Love and thirty wis and it's the Retirement
Clinic and we'll be right back the Bare Naked Ladies
with her. If I had a million dollars, Jeff, we
play that for this segment. We should mention welcome back.
This is the Retirement Clinic with Jeff Coolewal. This is
(34:31):
the weekly Wealth Management and Preservation segment.
Speaker 2 (34:34):
Jeff. This show us for everybody, but this particular segment
for those with a million dollars or more. Once you
to accumulate some wealth, say a million dollars or more,
you reach the point if you have a million, two million,
five million, ten million dollars or more, how do you
preserve it? Grow it, take income from it, and pass
it on to your air So that's and a lot
of people think that's not me. But if you again,
(34:57):
if you have million dollars or a half million dollars
or four to one k, if you have a five
hundred thousand dollars home, if you have other investments, if
you settle a lawsuit, if you sell your business. There
are any number of ways that you can accumulate a
fair amount of wealth and be over a million dollars.
But this is an Investorpedia article. Investopedia the average inheritance revealed.
(35:19):
Here's how much people receive. This is Rebecca Rosenberg article
Investipedia large estates fifteen million dollars per individual in twenty
twenty six are subject to federal estate taxes. For a
husband and wife fifteen million dollars. Times too, you could
shelter thirty million dollars. The kicker is at over thirty
(35:39):
million dollars is tax at forty percent, so you get
nailed after that. Kentucky, Maryland, Nebraska, New Jersey and other
states imposed inheritance taxes, so you got to be aware
of that. Forty did you say forty forty four zero?
That's just ridiculous. It's almost half. Yeah. And then if
you have an IRA as part of that, there may
(36:01):
be taxed ordinary incomes that may be more than that.
Speaker 1 (36:03):
Penalizes for being successful and doing things right in America.
Speaker 2 (36:07):
That's right, they say thirty million dollars. That's likely to
go up, but with inflation. But again inheritance can be
life changing, from payoff debt to investing in the future.
It's a financial turning port for many families. But according
to Federal Reserve data, on average, on average American households
(36:27):
inherit forty six dollars. We talk about the trillions that's available,
but the numbers in flayed by large amounts passed down
in wealthy families.
Speaker 1 (36:37):
With that, you know, when you break it down, that's
just not that much. I mean, come on, yeah, maybe
maybe buy a car, not even a new one with that.
Speaker 2 (36:45):
Don't quit your day job. No, No. You might think
that your prayers have a lot of money and unless
you talk to them about it directly, but it involves
direct monetary assets, real estate investments and other things. The
first thing is that be aware more just loans and
other financial liabilities probably have to be paid off before
you get the inheritance. So we were talking about it earlier.
(37:07):
If you get inheritance, jeez, mom, mom and dad's house
is worth a million bucks, but if there's a seven
hundred and fifty thousand dollars loan on that, maybe it's
not worth as much.
Speaker 1 (37:17):
You're not just still got to pay for that house.
Speaker 2 (37:19):
That's right. Legal tax implications. Inheritance involves a legal process
called probate, which confirms a will and distributes the assets.
And there might be some surprises in there. There might
be a homeless shelter or a hause, or know, some
other charity that might be getting a fair amount of money,
(37:41):
and you might get something less. Taxes can be reduced
again with its state taxes fifteen million for an individual
thirty million dollars. Other factors geographic location where the decease
live may affect how much you inherit and how much
tax you pay. I mentioned some of the states. The
estate and inheritance tax for states. There's none in Wisconsin,
(38:05):
but across the country there might be, and we mentioned
a couple of those states can be anywhere from ten
percent to sixteen percent a state inheritance tax. General differences.
Around eighty four trillion in assets will change hands, but
much of the so called great wealth will come from
baby boomers and will pass on to their heirs. People
are living longer now. The transfer of wealth will have
(38:27):
other notable market effects step up in basis for investments.
In other words, they use this exactly. Think as a
great example. For example, clients holding over a million dollars
in apple stock originally bought for fifty thousand dollars. The
people inherited can now sell it tax free after the inherited,
so that's a big plus.
Speaker 1 (38:47):
It is.
Speaker 2 (38:47):
It's called step up in basis where the capital gains,
that nine hundred and fifty thousand capital gains is wiped
out at death. So there are some good things. You know. Again,
don't plan on the inheritance, no, because.
Speaker 1 (38:59):
That forty six dollars, and you mentioned that's just not
that much for most American families. And by the time
the tax with every thousand, all of a sudden, that
sounds like twenty six thousand.
Speaker 2 (39:09):
Again, there are some great planning techniques that are available.
You want to preserve those that thirty million dollars. You
want to make sure that you do your planning so
it gets to the people that you intended to go to.
Speaker 1 (39:20):
I like what you said, Jeff. If the inheritance happens
and it's there, maybe it's significant, that's great, but never
plan and assume that it's coming your way.
Speaker 2 (39:28):
That's right.
Speaker 1 (39:28):
Good stuff. Jeff Cowal on Wysin's retirement Clinic Creative Planning
Dot com or check out the Retirement Clinic dot com.
How to get the ball rolling with an advisor. We'll
talk about that when we come back on wysin. How
do you get that ball rolling, Jeff? With the retirement plan,
even if you've got one, you're not happy, you want
to update it whatever. To reach out to creative.
Speaker 2 (39:50):
Planning, you must reduce it to writing. And we have
everything under one roof legal accounting, retirement plan and cash
flow projections investments. We manage over fourage a billion of
assets with creative planning. So we've got the wherewithal to
do that. Do give our office a call two six
to two five two to two four zero four zero,
or go online at the Retirement Clinic dot com. Again,
(40:12):
it's time to schedule a time to do it, not
just think about doing it.
Speaker 1 (40:16):
Always a pleasure having Jeff Cowaal on the Retirement Clinic.
Jeff uh, thank you so much. Enjoy the rest of
your weekend. Thanks you too, Paul, and I'm Paul Crown
Forced with Jeff Kowal. Now quick break for news. We
are back next Saturday. Every Saturday at ten o'clock on
the Retirement Clinic. Don't forget Monday through Friday. Those daily
market updates on the Dan O'Donnell Afternoon Show three five
(40:36):
pm News blocks. We'll see you next week, WISA Milwaukee.
Speaker 3 (40:40):
The preceding program is furnished by Creative Planning at SEC
registered investment advisory firm. Creative Planning, along with its affiliate
United Capital Financial Advisors, currently manages or advisors 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 theirs are solely their own and do not
(41:02):
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 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
(41:25):
been obtained from sources deemed reliable, but is not guaranteed.
If you would like our help, request to speak to
an advisor by going to creative Planning dot com. Creative Planning, tax,
and legal are separate entities that must be engaged independently.
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