July 8, 2026 • 28 mins
Tom and Don tackle one of retirement’s hardest questions: how much can you safely spend from your portfolio without blowing up the rest of your life? They walk through the familiar 4% rule, flexible withdrawal strategies, why a flat 10% withdrawal is usually fantasyland, and why the “right” spending rate depends heavily on your age, timeline, and tolerance for adjusting in bad markets. They also answer a listener question about a 22-year-old’s investment allocation and close with a timely discussion of the latest Social Security trust fund warning, what it actually means, and the only real ways Congress can fix it.
00:12 — How much can you safely spend in retirement? Tom and Don tee up the big question: 4% rule, 5% flexible rule, or something more personalized.
02:08 — Survey shocker: many people think they need 30 years of income saved before retiring comfortably.
03:03 — Longevity math: how long retirement might actually last, and why that matters for withdrawal rates.
04:40 — Can you really withdraw 10% a year? Tom and Don push back on overly aggressive retirement spending assumptions.
05:59 — Why generic withdrawal rules fall apart in real-life retirement planning.
06:25 — Every retiree needs a personalized withdrawal strategy based on their own timeline and circumstances.
07:17 — Retiring at 60 vs. 70: why earlier retirement makes even “safe” withdrawal rates riskier.
09:04 — Why it’s worth having a professional review your retirement withdrawal plan, even if you’ve used calculators.
09:58 — The case for flexible withdrawals: spending more in strong markets and less in weak ones.
10:20 — Three common retirement planning mistakes: not saving enough, not knowing your needed return, and taking the wrong amount of risk.
12:16 — Listener question: a 22-year-old with $28,500 invested wants to know if his allocation makes sense.
13:28 — Breaking down DFAW, VT, and VTI: overlap, diversification, and whether the portfolio is too complicated.
16:21 — The bigger story: a 22-year-old already has a terrific head start on retirement savings.
17:56 — Social Security update: the trust fund could run short in 2032 if nothing changes.
18:37 — The only real ways to fix Social Security: raise taxes, cut benefits, or some combination of both.
19:52 — Why scary Social Security headlines should not automatically push people to file early.
21:22 — One possible fix: raising or removing the payroll tax cap.
23:27 — The demographic problem under Social Security: too few workers supporting too many retirees.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_02 (00:05):
You're gonna do a really great financial feature.
Tom and Don are talking realmoney.
SPEAKER_01 (00:12):
Many of you, particularly those of you who
listen to Talking Real Money,are exemplary savers and
sometimes actually even decentinvestors, although sometimes
not.
So here's the question.
When you get to retirement andyou want to start living off of
your assets, how much moneyshould you spend?
(00:35):
Should you stick with the 4%rule or the 5% flexible rule?
Or are there times when you cango a little crazy?
Do a little more.
Get down tonight?
No, no, I'm sorry.
I'm sorry, I was got the weddingthing again.
Uh hi everybody.
(00:56):
Don here at uh the Talking RealMoney Florida headquarters.
Tom there in the Model MilitaryAircraft Museum in beautiful
Duval, Washington, where uh thetourists are lining up for the
uh the the weekend opening whenthey can all get to come in and
stare at the planes.
SPEAKER_00 (01:12):
Dan Hutt.
We're ready, sir.
SPEAKER_01 (01:14):
Ticket prices are are rising, so you might want to
get your tickets soon.
SPEAKER_00 (01:17):
Or as we like to say here, let the bombing begin.
So there's a lot of people.
SPEAKER_01 (01:20):
Because remember, we want you to help Tom be able to
spend even more money onvacation and retirement.
And so uh how much should youspend?
That's really a big question.
Some people say less than fourpercent, some people say four,
some people say five, somepeople say no, you're not
spending enough.
What's the right answer?
(01:41):
Yeah, there is no right answer.
So thanks a lot, then nevermind.
SPEAKER_00 (01:46):
Yeah, and you know, I mean, all joking aside, I
spent I don't like it.
I spending too much money rightnow.
Every day I look at the bills.
No, don't no, no, no, oh, okay,they already spent that, can't
stop it.
But interesting survey from theprincipal financial group where
they asked uh private sectorcompanies about how much they
asked people, how much do youthink you need saved?
(02:06):
Now, 56%, that's almost six outof ten, think they need 30 years
of income saved before they canretire comfortably.
SPEAKER_01 (02:14):
Okay, stop there.
That's a big number.
That's wait.
So hold on.
That's really an optimisticnumber.
SPEAKER_00 (02:21):
Yeah, it really is.
SPEAKER_01 (02:22):
You're gonna live a long time.
Let's see.
Let's say retirement is well, itused to be 65, but I guess we
should say 67 now.
SPEAKER_00 (02:34):
Well, no, there's some in politics who say it's
gonna be 69.
Okay, but that's right.
Now that's later, maybe.
But no, I think if you looked atthe average still is about 65.
I think that's we looked that upnot long ago.
Is it really?
It is still about 65.
I think most that's the kind ofdown the middle.
Average person retires at age 65in in America.
(02:55):
I think that's a good one.
SPEAKER_01 (02:56):
Okay, so all right, let's go with 65.
A sixty-five-year-old man has a75% chance of reaching 75.
Okay, that's pretty good.
Okay.
(03:17):
Half.
Half this is where your mediancomes in, are gonna make 85.
Which is pretty lengthylifestyle.
Life, I think.
10% are gonna make it to 95.
SPEAKER_00 (03:31):
Yeah.
It's optimistic.
Yeah, you're right.
And and but that's men.
SPEAKER_01 (03:36):
Now, women, of course, get a little bit better
chance because again, back to mytheory, women kill us off
earlier so they can enjoy sometime.
So they can enjoy some timewithout us bugging them.
SPEAKER_00 (03:46):
I I can't blame them.
Uh so yeah, this okay, but goingback to the beginning of all
this, the survey, um, 30 yearsworth of income, that would I
mean, you could everybody canrun the number themselves, but
that would be a lot of moneysaved.
The the average, of course, ismuch, much.
I can't even say enough umenough much to go as far down
below that would be.
SPEAKER_01 (04:07):
Well, no, although if you use the 4% rule and you
have a 50-50 portfolio, we'verun lots of Monte Carlos, and
the money tends to last.
It does 30 years more and more.
If invested.
If invested, yes.
SPEAKER_00 (04:21):
Sequence of return.
There's some ifs in there thatcan that can hamper uh what
happens, but yeah, it it doeskind of work.
But here's the other part.
More than half believe they canrestrict where they find these
people.
More than half think they cantake out 10% a year of their
savings and things will workout.
10%.
That's a pretty sizable increasefrom the forecast.
SPEAKER_01 (04:43):
Pretty sure, pretty sure that uh you've got to be
making better than seven oreight percent on your money to
make that last.
SPEAKER_00 (04:55):
That was a getting to that, right?
Because there are those uh whoare out there as financial
commentators who say, Wait, aslong as you're you're you're
you're you're making more thanyou're taking off, and if you
there's a one mutual fund thatpays you twelve percent of your
hands.
You're talking Dave Ramsey.
Ah, thank you.
You broke the code there.
SPEAKER_01 (05:10):
Say it.
SPEAKER_00 (05:10):
Okay.
They're gonna make it.
SPEAKER_01 (05:11):
And you know that's Ramsey with his silly, I don't
know where I know where he gotthe number.
He got the number from Americanfunds, from a uh you know
growth-oriented fund that haddone 12 percent per year, but
not over a hundred years becauseit didn't exist.
We have a hard time findinganything that over a hundred
(05:32):
years would have returned betterthan ten percent per year.
Trevor Burrus, Jr.
SPEAKER_00 (05:36):
Well, not to pick on Mr.
Ramsey, he does not sit acrossthe table from any recent
retirees or people been retired.
He's just the the informationcomes from his mouth and goes
out to the great uh all of us.
And uh at the great unwashed,that's all I think I was not
gonna say that.
The thing is, it's differentwhen you do this one-on-one and
you have to talk to peoplethrough all of this.
(05:57):
It's a that's a toy.
SPEAKER_01 (05:59):
And you have to face them when they're in their late
80s and they're out of money.
SPEAKER_00 (06:03):
Yeah, and or the market's gone down 40%, or what
you know, whatever thing.
So, anyway, going back to this,so yeah, 10%, that would be a
very aggressive withdrawalstrategy.
And if you're one of the 10%that lives to your mid-90s, it
probably will not work.
No, uh, maybe your mid-70s,maybe, but 10% is a very
aggressive amount.
(06:24):
So, um, but this is this is allconjecture.
This is all guessing.
This is we don't know because wedon't know the future, but more
importantly, we don't know you.
Every person, Don knows this,has their own withdrawal
strategy.
My withdrawal strategy is not todo it for a long time.
Uh, and that's that compresses.
(06:45):
I for a number of years, I'm notI'm not planning on it because I
think I'll keep working if Ican't, if you'll still have me
on this wonderful program you'vecreated here, and don't sub Roxy
or somebody else in for me, assome people suggest.
Uh I'll keep working.
So I'm not gonna have to drawfor a time.
That's good.
I I'm happy about that.
But every individual or coupleshould have a plan, and you
(07:09):
shouldn't be relying onguesswork or polls or anything
else.
That is an extremely dangerousway to handle your retirement.
SPEAKER_01 (07:17):
And uh the there also have to be a number of
other factors that come intoplay, and and there's one of
them that gets very, very littlediscussion.
And that is if you startearlier, if you if you retire at
60 or 65, you're startingearlier, your money has to last
(07:39):
a lot longer.
So you really must be moreconservative with your
withdrawals.
SPEAKER_00 (07:43):
And I'm seeing that more and more, more and more
people write me in their late50s and say, I want to pull the
pull the trigger.
SPEAKER_01 (07:48):
Well, if you pull the trigger then, though, it
starts it starts becoming alittle more dicey on even the
four or the five percent rule,potentially if we have
protracted downturns in themarket, and that's where you
have to become moreconservative.
Whereas those of us, and I'mlooking at us, yeah, uh, who are
(08:10):
waiting into their 70s beforegiving up some of work, probably
not all of it, even then.
Well, when we actually purelyretire, we're gonna have a lot l
a lot less life ahead of us.
So we can afford to be a littlemore aggressive with our
spending.
SPEAKER_00 (08:31):
It only follows.
I can spend less because I won'tneed these fancy clothes, I
won't need these nice ties allthe time, right?
I can just dress more DonMcDonald-ish, if you will.
Sir.
Yeah.
SPEAKER_01 (08:42):
When was the last time you bought a new suit?
SPEAKER_00 (08:44):
I buy one tie now every year for retirement.
SPEAKER_01 (08:46):
And when was the last time you bought a new suit?
SPEAKER_00 (08:52):
No, clothing.
SPEAKER_01 (08:53):
Uh clothing expense.
No.
Uh let's see, biggest expensefor you it's gonna say the
house, but not.
I'm going for vacations.
SPEAKER_00 (09:02):
Yeah, it probably is.
It probably is going forvacations.
SPEAKER_01 (09:04):
Yeah, I think you're right.
So you take some nice assvacations.
SPEAKER_00 (09:07):
I do.
I admit it.
So, okay, but going back to justa withdrawal rate and people
trying to figure this out.
Number one, anybody, and I don'tcare if you've done any of the
online calculators, they're outthere, some are pretty good.
Anybody should have a look by aprofessional.
That's my advice anytime, andyou can get it for very
inexpensive, or in some cases,if you've really done all the
(09:27):
legwork, probably nothing.
But somebody should look thatover.
Number two, and this comes fromChristine Benz, who I still love
this quote the only correctwithdrawal rate we know will be
after you're dead.
Then you'll know whether youtook too much or too little,
right?
And and the the survey pointsout most people end up taking
too little, which is a goodthing.
SPEAKER_01 (09:45):
And here's the beauty of the the uh the
flexible withdrawal rate.
Even if it's a higher withdrawalrate, even if you take it up to
like six, seven, eight percentper year.
Flexible.
Yep.
That means in bad years you takeless, and in great years you
take a lot more.
(10:05):
It's gonna be very hard to runout of money because you you're
not drawing down much more thanyou're you're making on average
over a long period of time, andit would take a protracted
downturn in the market, whichhas never happened to that
extent, to really hurt you.
So your odds are pretty, pretty,pretty good.
SPEAKER_00 (10:23):
Yeah.
Uh and let me mention a coupleother mistakes I see.
Um, this one happens a lot topeople, especially it seems a
lot of people start saving andthen family stuff gets in the
way, right?
I got the kids, I got, etcetera, et cetera.
And they don't know how muchthey should save.
And you we've recommended manytimes 10 to 15% of your gross
salary should be saved in someway.
(10:44):
But that can be very difficultwhen you're in those formative
years when you got a family, etcetera.
But that's number one.
The other one that I see almostevery single time for people who
are close to retirement, theydon't know what rate of return
they need on their money tosustain their portfolio.
They don't know if it needs tobe 7% or 10 or 12%, whatever it
is.
Uh you got to know that.
And then the other one that Isee on a very regular basis, in
(11:07):
addition to that, is too much ortoo little risk.
Most people are either taking aton of risk, um, and I could go
through the examples if youlike, but you know who you are,
or you've got it all stashedaway in cash somewhere, waiting
for whatever to happen in theworld or the market, and it's
not making really anything.
So those are two few of the bigproblems I see as a practitioner
(11:30):
every day.
SPEAKER_01 (11:32):
Yeah, and uh again, it it has to be right for you.
That's really the trick.
And that's why we believe ineverything being personalized.
Even the the uh the stuff wetalk about on the show, which is
why we love your questions.
We love it when you send usquestions at
talkingrealmoney.com on the aska question button thing there
that's on the screen.
(11:52):
Just do that.
Type it up, send it in.
Uh Tom will read them on theshow.
Sometimes he'll even call youand talk about it with you.
And uh you can also go there andrecord your question that is
used during the Friday QAepisode.
But today, it's summer, thequantity has declined slightly.
So Tom has one very special typetree killing question.
SPEAKER_00 (12:18):
Yeah, and the good news is the trees are weaker now
because they're getting thirsty,so things are drying out.
So this is an easy time to cutthem down, take advantage of the
pulp making process.
Uh so this comes from Anonymous.
First name and last name,Anonymous Anonymous.
Anonymous Anonymous.
Yeah.
But uh mentioned the city, JohnsCreek, Georgia.
I'm not which I'm not familiarwith.
(12:39):
Don't know it.
I know Don's Creek, Georgia,because I've been there many
times, but not Johns Creek,Georgia.
Um, hi, Don and Tom.
I would appreciate your adviceregarding my 22-year-old son's
current investment allocationand whether any changes would be
appropriate for long-termgrowth.
I'll say.
He's accumulated savings frominternship jobs, which is great,
(13:00):
by the way.
I was reading the uh market thisyear.
Very tough on young people thatare trying to get between school
kind of jobs, not easy at all.
Um, he recently graduated, willstart a full-time job in
September.
Yay, that's really great.
Here are current investments.
He has a brokerage account of$10,000, and he has a Roth IRA
of$18,500 in the brokerage.
(13:22):
Wow.
It's 80% uh DFAW and 20% VT.
SPEAKER_01 (13:27):
Hmm.
Interesting.
Okay.
SPEAKER_00 (13:29):
And then in the Roth, it is 25% DFAW.
That's dimensionals.
Equity, 25% VT, which is theVanguard total uh global
portfolio, and then 50%, so 25DFAW, 25 VT, and 50% VTI, which
I believe is the VanguardInternational Fund, right?
SPEAKER_01 (13:48):
Yeah.
SPEAKER_00 (13:48):
Uh I always forget that they always mix that one up
because it's got the I in it,and then I think so then I think
it's international, and thensomebody said, no, no, that's
the No, I think that's the U.S.
SPEAKER_01 (13:58):
Let me just double check.
Yeah, that's the U.S.
I was pretty sure that was theU.S.
So that's the U.S.
So he's heavy U.S., heavierlarge cap U.S.
Let me just finish the question.
SPEAKER_00 (14:08):
Says given his age and investment portfolio, would
like to know whether thisallocation is appropriate.
If there's unnecessary overlapbetween these funds, I'll say.
Whether adjustments couldimprove diversification or cost
efficiency.
Any can tax considerationsbetween the brokerage and Roth
recommend going strategy goingforward for both accounts.
So remember, 10,000 in thebrokerage, 18,500 for the
(14:29):
Rothschild.
SPEAKER_01 (14:29):
Again, are you not going to quibble?
I will.
No, don't quibble, really,because one, if you quibble, um
he he mentioned expense ratios.
So if you quibble, and I knowthe quibble you're gonna make,
expense ratios are gonna go upfractionally.
They're gonna go up a little.
They are.
Uh there is overlap, but but andhe's overweighted in because of
VT and VTI, U.S.
(14:51):
large cap, of course.
Trevor Burrus, Jr.
SPEAKER_00 (14:54):
I'm just gonna quibble a bits.
Is that okay?
A bit.
You can quibble a bit.
Trevor Burrus, Jr.
Quibble and bits, you get that.
Anyway, um uh too many funds.
SPEAKER_01 (15:03):
For$28,000.
Yeah.
Trevor Burrus, Jr.
SPEAKER_00 (15:05):
It's just it's a lot of work.
Uh so and I mean you could justgo with DFAW, period.
That's what I'm saying.
There's kind of a lot of overlapbetween DFAW and VT, right?
Because those are both they bothown the United States and and
more.
SPEAKER_01 (15:17):
Um say The only thing you're doing is reducing
your expense ratio a little bit.
SPEAKER_00 (15:22):
Yeah, because VT is in the single digits, right?
SPEAKER_01 (15:25):
Yeah.
SPEAKER_00 (15:25):
DFAW is probably point twenty-four twenty-four,
something like that.
Um so you so yeah, um Ipersonally, if it was my money,
I'd have uh I here's you okay,you really want some
diversification?
Here you go.
I would go A V G E in thebrokerage account and DFAW in
the Roth.
How about that?
unknown (15:44):
Okay.
SPEAKER_01 (15:44):
Two different companies.
You're really diversifying.
SPEAKER_00 (15:46):
Yeah, that's right.
SPEAKER_01 (15:47):
Between Avantis and Dimensional.
SPEAKER_00 (15:49):
Yeah, because they both love me.
Oh, I meant to get and we getnothing from them, okay?
Just so you know.
SPEAKER_01 (15:54):
Oh, I know, but it sure sounds like we do, doesn't
it?
Uh no, we don't get anything.
SPEAKER_00 (15:59):
24, I was dead on.
Yeah, you know.
24 basis points.
So you so you're paying more,uh, and the hope is you're gonna
make more, but you know, wedon't know that heading forward.
SPEAKER_01 (16:07):
Well, historically, these asset classes have in the
past made more.
Oh, look, AVGE is only 23 basispoints.
SPEAKER_00 (16:16):
Oh, two three.
How about that?
Yeah.
So good for you.
SPEAKER_01 (16:22):
Saving the kid money.
Yeah.
Uh yeah, no, what a great start,though.
Oh, I think it's fabulous.
Yeah, eight thousand dollars inyour twenties.
SPEAKER_00 (16:30):
Uh, if you did nothing more and just let that
grow in a global portfolio andmake ten percent a year, that's
a lot of money by the timeyou're sixty-five.
I think in you think in 40 yearsyou should be able to retire at
sixty.
SPEAKER_01 (16:43):
How old is he?
SPEAKER_00 (16:44):
22.
SPEAKER_01 (16:45):
22.
No, let's say uh it's fifty,let's see, twenty-two.
SPEAKER_00 (16:50):
Forty five years.
So sixty.
I would say forty-five years.
Yeah.
So that's still a pretty heftyamount of um I I'd I'd
personally think you're gonnaprobably have to wait till
sixty-eight, sixty-nine in 40years to retire, but that's my
take.
SPEAKER_01 (17:05):
So I'm doing the math here.
Let me just run the numbershere.
Oh, you're gonna actually runthe number.
Over 45 years.
Let's assume uh I'm gonna assumea 10% return.
Which is historical, but onenever knows.
Um let's see.
That's gonna be a mere uh twomillion dollars without adding
(17:26):
anything.
SPEAKER_00 (17:27):
And after inflation, it'll be 47 cents.
So that's still good becausethat'll buy you half a piece of
gum.
SPEAKER_01 (17:33):
Listen to the differences.
At 8 percent, it's I want DaveRamsey, then sign me up, please.
At 8 percent, it's less than amillion.
It's about 900,000.
No.
SPEAKER_00 (17:41):
Okay.
SPEAKER_01 (17:41):
At 12 percent, it's 4.6 million.
All right.
SPEAKER_00 (17:45):
I'm I'm I'm no offense to you because you know
I care about you, but I'm gonnajoin the Ramsey bunch because 12
is You're going for the 12.
SPEAKER_01 (17:52):
Way more.
That looks better.
Plus, I get whatever you want todo.
You're an old guy.
We expect insanity out of you.
SPEAKER_00 (17:58):
I can get away with it.
SPEAKER_01 (18:00):
So uh before we go, we have news that there's a send
some news about when SocialSecurity is gonna run out of
money.
I hate this because it alsoWell, not money, not all the
money, just the trust fund, justthe trust.
SPEAKER_00 (18:13):
So most of the money comes in and goes out the back
door.
Most.
Right.
But the trust, right now, ifnothing is done, they just move.
SPEAKER_01 (18:21):
The trust is supplementing the benefits.
SPEAKER_00 (18:23):
Correct.
And if they don't do anything,if they don't fix it anyway, uh,
according to a new uh look bythe trustees, it'll run out of
money in late 2032, which by mycalculation is about six years,
just in time for me probably toneed it.
SPEAKER_01 (18:35):
Let's do let's here's a little exercise for
you.
Because right now, Congress andthe White House have really
shown very little interest infinding a reasonable solution to
the problem.
And there are really only twosolutions to this problem.
Two solutions.
Two.
You only get the choice of two.
(19:00):
No, that's one of the two.
SPEAKER_00 (19:01):
Oh, okay.
SPEAKER_01 (19:02):
One is raise taxes.
Okay?
SPEAKER_00 (19:07):
Yeah, that's one.
Again, let's describe what thatis exactly.
Hang on, let me give my twofirst.
SPEAKER_01 (19:13):
Okay, then you can my two for my kills.
Raise taxes to reduce benefits.
Those are the only two.
SPEAKER_00 (19:21):
There's a lot that fits in under both of those.
Right, exactly.
SPEAKER_01 (19:24):
But but yeah, there are there are uh variations on
those themes, but you gotta doone of the two or both of the
two in one way or another.
SPEAKER_00 (19:33):
That's what's gonna end up happening.
By the way, you made a greatpoint when we talked about this
before we did the program thatpeople now being elected to the
U.S.
Senate will have to do somethingabout this in this term.
SPEAKER_01 (19:45):
They will have to do it because they're in there for
six years until 2032.
Bingo.
SPEAKER_00 (19:51):
So they're gonna have to um so we're running out
of time, in other words.
And by the way, I still here'sthe reason I hate to bring this
up because you've we've seen thenumbers.
More and people go file earlywhen they hear this.
They think I better get my moneynow because it's gonna go away.
Right.
But think about it just for amoment.
The fact that half of peoplethat are retired get the
majority of their income fromSocial Security, right?
(20:12):
That's 71 million people aredependent on this.
Do you think they're gonna justlet something like that go away?
I mean, it's gonna say, oh,well, that was that was great
while it lasted, but it's notgonna that is so unlikely.
So unlikely.
Even in politics, they can'tmake that one fly.
So, Don, when he says raisingtaxes, okay, getting rid of the
(20:32):
cap on social security, rightnow which is now 184,000, I
think.
If you make anything above that,then you don't pay into the
system anymore.
If you get rid of that, and itit that fixes it overnight.
One, that's gone, that's over.
But I personally think it'll besome combination of a slight
change there, and probably hateto say it, people don't like it,
(20:53):
and it's not gonna be asdramatic as it's been in other
countries, but probably movingthat 62 starter date maybe to 63
or 64.
You gotta wait a little longer.
Remember, this was set up in the1930s, which is coming up on 100
years ago.
People are living longer.
System's not designed for peopleto be retired for uh 30 years at
all.
So probably have to wait alittle longer to get your money.
(21:15):
That's my guess.
But who Yeah, I was right.
SPEAKER_01 (21:17):
It was$184,500.
You're on it today.
Um and so that means that everypenny over that, you don't pay
anything.
Yeah.
It's and you still pay inMedicare, but that's one of the
easiest things to fix becauseall of us who earn slightly
above 184 and we're in thatgroup now.
(21:38):
Yes, we are.
For most of our life we were notin that group.
That's true, too.
But now we are.
Uh, thankfully.
I'm I'm I'm I'm very pleased.
But the fact is, for most of theyear I am used to seeing that
taken out of my paycheck.
I am used to living on the netincome that I see every two
(21:59):
weeks.
In my paycheck.
I'm used to seeing that.
SPEAKER_00 (22:02):
Taking out the seven point six.
SPEAKER_01 (22:05):
Now, when the fall comes and I have surpassed 184,
I it's a windfall.
That's not all you to take me tolunch.
That's the same thing.
I was living fine before.
So, you know, psychologically,that may be the least painful of
(22:26):
all of the options from apsychological standpoint because
we already pay it.
It's the easiest, it's thesimplest.
It's it's not from a messagingstandpoint because it sounds
like raising taxes, but it'sjust not reducing them at 184.
That's my spin.
(22:47):
I got a seat for you in the Imean there's no there's no cap
on Medicare.
Oh, by me by the way, Medicareis teetering on the brink, too.
Um Medicare Well, but Medica itjust means that those who are on
Medicare will have to pay higherpremiums.
Period.
That's just all that means.
SPEAKER_00 (23:05):
Yep.
That's coming.
SPEAKER_01 (23:07):
Yeah.
So there's gotta be a solution.
And folks, here's the thing.
We know our audience.
Yes, some of you are in your 20sand 30s, but you're not the
majority, sorry.
The majority are 50s, 60s, 70s.
You guys, gals, old people,unite.
You gotta pester yourcongresspeople.
(23:29):
That's your members of the Houseof Representatives and your two
senators in every state in theUnion.
They gotta do something, andthey've gotta do something
really soon.
SPEAKER_00 (23:40):
Yeah, that's not very long from now.
Here's the other thing that weneed to pester the young people
for.
You gotta have more kids.
You gotta have more kids.
This is demographic.
SPEAKER_01 (23:48):
Or you've got to get better jobs.
I'm sorry.
SPEAKER_00 (23:51):
Pay in more.
This is demographic in a lot ofways because we're not replacing
the population enough, sothere's not enough people paying
in.
unknown (23:57):
Yeah.
SPEAKER_01 (23:57):
That's part of the problem.
There's another political issuehiding under all that, too.
SPEAKER_00 (24:02):
Fully aware of that, of course.
SPEAKER_01 (24:03):
Yeah.
unknown (24:04):
Yeah.
SPEAKER_00 (24:04):
We can't talk about sex on the program.
SPEAKER_01 (24:06):
No, I wasn't talking about sex.
I was talking about immigration.
SPEAKER_00 (24:08):
Ah, yes.
Well, gosh, don't go there,please, because I can't handle
cards and letters anywhere.
SPEAKER_01 (24:13):
Well, no, I'm just saying that, you know, it's not.
Shut it down.
SPEAKER_00 (24:17):
Yep.
SPEAKER_01 (24:18):
I know.
I'm with you.
We've got to have more peoplepaying the tax somehow.
I don't know how to do it.
Unless we're going to just say,hey, China, give us more social
oh wait, you don't pay any.
Sorry.
unknown (24:28):
Don't pay any.
SPEAKER_00 (24:29):
So no dice.
Anyway, so we'll see how itplays out.
But it's interesting, as yousaid, I think you made the best
point of the day.
People being elected to the U.S.
Senate in this particular yearwill have to face this issue
during their term.
We'll see what happens.
SPEAKER_01 (24:45):
No choice.
You gotta do it.
Or AA the AARP crowd is gonna bemad.
And by the way, the AARP crowdalready believes.
It's like it's only 40% whobelieve Social Security is gonna
last.
SPEAKER_00 (25:00):
No, I think it's a small number.
And by the way, speaking of thatcrowd, I was given a cane 35
years ago.
I still have it, so I'll beprepared to use it.
Not sugarcane either.
SPEAKER_01 (25:09):
So you'll be raising a cane?
SPEAKER_00 (25:13):
Exactly.
And you can count on that too.
SPEAKER_01 (25:15):
Thank God I live 3,000 miles away from you.
Your wife's gonna beembarrassed, not me.
SPEAKER_00 (25:22):
But it would not be the first time with that either.
So we'll be okay there.
SPEAKER_01 (25:25):
We uh hope you'll send us some questions because
we'd have more of them if youdid.
Go to talkingrealmoney.com,click ask a question, type it
in, speak it in.
Those get answered on Fridays.
And keep listening to the show.
Give us your solution to sellingprinting.
SPEAKER_00 (25:39):
We'll take that too.
SPEAKER_01 (25:40):
If you have a solution, why not?
I'll hear it.
SPEAKER_00 (25:42):
Yeah, one.
SPEAKER_01 (25:43):
I'm telling you, there are only two.
SPEAKER_00 (25:44):
Okay.
It's raise taxes or cutbenefits.
SPEAKER_01 (25:46):
Raise taxes or cut benefits.
SPEAKER_00 (25:48):
I'd like to see.
SPEAKER_01 (25:49):
Or the two of them together.
Do both.
SPEAKER_00 (25:53):
Sure.
SPEAKER_01 (25:54):
Anyway.
And if you have a uh portfoliofrom which you would like to
determine the best in way to thebest way to get an income stream
and the best income stream,yeah, you're pretty good with
everything else.
You just want a little help?
Meet with one of our advisors.
They're fiduciaries.
They're not gonna charge youanything, they're not gonna
(26:14):
pressure you to become a client,promise.
They're just gonna help becauseeverybody associated with this
program really truly wants tohelp you be better with your
money.
And that's why we have for avery long time called this show
Talking Real Money.
SPEAKER_02 (26:33):
The opinions and views expressed on this podcast
were current on the daterecorded.
Opinions, estimates, forecasts,and statements of financial
market trends that are based oncurrent market conditions
constitute our judgment and aresubject to change without
notice, including anyforward-looking estimates or
statements which are based oncertain expectations and
assumptions.
Although information andopinions given have been
obtained from or based onsources believed to be reliable,
no warranty or representation ismade as to their correctness,
(26:54):
completeness, or accuracy.
Information presented on thepodcast is not personalized
investment advice from OppelloWealth.
The views and strategiesdescribed may not be suitable
for everyone.
This podcast does not identifyall the risks, direct or
indirect, or otherconsiderations which might be
material to you when enteringany financial transaction.
We hope you realize that theinformation provided on Talking
(27:16):
Real Money is for informational,educational, and hopefully
enjoyable purposes only.
The podcast is not trying to getyou to buy or sell any financial
products or security.
Instead, the program is providedas a public service by Apello
Wealth, a fee-only registeredinvestment advisor.
Please see Appello Wealth's ADBPart 2A on our website for
information regarding Appello'sfees and services.
Apello Capital, LLC DBA AppelloWealth, is an investment
(27:37):
advisory firm registered withthe Securities and Exchange
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The firm only transacts businessin the states where it is
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Registration with the SEC or anystate securities authority does
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Appello does not provide tax orlegal advice, and nothing either
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Thanks for listening, and pleasevisit TalkingRailMoney.com for
(27:59):
more information and importantdisclosure related to
performance of any specificindex or fund quoted in this
podcast.
And the lawyers get richer.
You're gonna do a really great financial feature.
Tom and Don are talking realmoney.
SPEAKER_01 (00:12):
Many of you, particularly those of you who
listen to Talking Real Money,are exemplary savers and
sometimes actually even decentinvestors, although sometimes
not.
So here's the question.
When you get to retirement andyou want to start living off of
your assets, how much moneyshould you spend?
(00:35):
Should you stick with the 4%rule or the 5% flexible rule?
Or are there times when you cango a little crazy?
Do a little more.
Get down tonight?
No, no, I'm sorry.
I'm sorry, I was got the weddingthing again.
Uh hi everybody.
(00:56):
Don here at uh the Talking RealMoney Florida headquarters.
Tom there in the Model MilitaryAircraft Museum in beautiful
Duval, Washington, where uh thetourists are lining up for the
uh the the weekend opening whenthey can all get to come in and
stare at the planes.
SPEAKER_00 (01:12):
Dan Hutt.
We're ready, sir.
SPEAKER_01 (01:14):
Ticket prices are are rising, so you might want to
get your tickets soon.
SPEAKER_00 (01:17):
Or as we like to say here, let the bombing begin.
So there's a lot of people.
SPEAKER_01 (01:20):
Because remember, we want you to help Tom be able to
spend even more money onvacation and retirement.
And so uh how much should youspend?
That's really a big question.
Some people say less than fourpercent, some people say four,
some people say five, somepeople say no, you're not
spending enough.
What's the right answer?
(01:41):
Yeah, there is no right answer.
So thanks a lot, then nevermind.
SPEAKER_00 (01:46):
Yeah, and you know, I mean, all joking aside, I
spent I don't like it.
I spending too much money rightnow.
Every day I look at the bills.
No, don't no, no, no, oh, okay,they already spent that, can't
stop it.
But interesting survey from theprincipal financial group where
they asked uh private sectorcompanies about how much they
asked people, how much do youthink you need saved?
(02:06):
Now, 56%, that's almost six outof ten, think they need 30 years
of income saved before they canretire comfortably.
SPEAKER_01 (02:14):
Okay, stop there.
That's a big number.
That's wait.
So hold on.
That's really an optimisticnumber.
SPEAKER_00 (02:21):
Yeah, it really is.
SPEAKER_01 (02:22):
You're gonna live a long time.
Let's see.
Let's say retirement is well, itused to be 65, but I guess we
should say 67 now.
SPEAKER_00 (02:34):
Well, no, there's some in politics who say it's
gonna be 69.
Okay, but that's right.
Now that's later, maybe.
But no, I think if you looked atthe average still is about 65.
I think that's we looked that upnot long ago.
Is it really?
It is still about 65.
I think most that's the kind ofdown the middle.
Average person retires at age 65in in America.
(02:55):
I think that's a good one.
SPEAKER_01 (02:56):
Okay, so all right, let's go with 65.
A sixty-five-year-old man has a75% chance of reaching 75.
Okay, that's pretty good.
Okay.
(03:17):
Half.
Half this is where your mediancomes in, are gonna make 85.
Which is pretty lengthylifestyle.
Life, I think.
10% are gonna make it to 95.
SPEAKER_00 (03:31):
Yeah.
It's optimistic.
Yeah, you're right.
And and but that's men.
SPEAKER_01 (03:36):
Now, women, of course, get a little bit better
chance because again, back to mytheory, women kill us off
earlier so they can enjoy sometime.
So they can enjoy some timewithout us bugging them.
SPEAKER_00 (03:46):
I I can't blame them.
Uh so yeah, this okay, but goingback to the beginning of all
this, the survey, um, 30 yearsworth of income, that would I
mean, you could everybody canrun the number themselves, but
that would be a lot of moneysaved.
The the average, of course, ismuch, much.
I can't even say enough umenough much to go as far down
below that would be.
SPEAKER_01 (04:07):
Well, no, although if you use the 4% rule and you
have a 50-50 portfolio, we'verun lots of Monte Carlos, and
the money tends to last.
It does 30 years more and more.
If invested.
If invested, yes.
SPEAKER_00 (04:21):
Sequence of return.
There's some ifs in there thatcan that can hamper uh what
happens, but yeah, it it doeskind of work.
But here's the other part.
More than half believe they canrestrict where they find these
people.
More than half think they cantake out 10% a year of their
savings and things will workout.
10%.
That's a pretty sizable increasefrom the forecast.
SPEAKER_01 (04:43):
Pretty sure, pretty sure that uh you've got to be
making better than seven oreight percent on your money to
make that last.
SPEAKER_00 (04:55):
That was a getting to that, right?
Because there are those uh whoare out there as financial
commentators who say, Wait, aslong as you're you're you're
you're you're making more thanyou're taking off, and if you
there's a one mutual fund thatpays you twelve percent of your
hands.
You're talking Dave Ramsey.
Ah, thank you.
You broke the code there.
SPEAKER_01 (05:10):
Say it.
SPEAKER_00 (05:10):
Okay.
They're gonna make it.
SPEAKER_01 (05:11):
And you know that's Ramsey with his silly, I don't
know where I know where he gotthe number.
He got the number from Americanfunds, from a uh you know
growth-oriented fund that haddone 12 percent per year, but
not over a hundred years becauseit didn't exist.
We have a hard time findinganything that over a hundred
(05:32):
years would have returned betterthan ten percent per year.
Trevor Burrus, Jr.
SPEAKER_00 (05:36):
Well, not to pick on Mr.
Ramsey, he does not sit acrossthe table from any recent
retirees or people been retired.
He's just the the informationcomes from his mouth and goes
out to the great uh all of us.
And uh at the great unwashed,that's all I think I was not
gonna say that.
The thing is, it's differentwhen you do this one-on-one and
you have to talk to peoplethrough all of this.
(05:57):
It's a that's a toy.
SPEAKER_01 (05:59):
And you have to face them when they're in their late
80s and they're out of money.
SPEAKER_00 (06:03):
Yeah, and or the market's gone down 40%, or what
you know, whatever thing.
So, anyway, going back to this,so yeah, 10%, that would be a
very aggressive withdrawalstrategy.
And if you're one of the 10%that lives to your mid-90s, it
probably will not work.
No, uh, maybe your mid-70s,maybe, but 10% is a very
aggressive amount.
(06:24):
So, um, but this is this is allconjecture.
This is all guessing.
This is we don't know because wedon't know the future, but more
importantly, we don't know you.
Every person, Don knows this,has their own withdrawal
strategy.
My withdrawal strategy is not todo it for a long time.
Uh, and that's that compresses.
(06:45):
I for a number of years, I'm notI'm not planning on it because I
think I'll keep working if Ican't, if you'll still have me
on this wonderful program you'vecreated here, and don't sub Roxy
or somebody else in for me, assome people suggest.
Uh I'll keep working.
So I'm not gonna have to drawfor a time.
That's good.
I I'm happy about that.
But every individual or coupleshould have a plan, and you
(07:09):
shouldn't be relying onguesswork or polls or anything
else.
That is an extremely dangerousway to handle your retirement.
SPEAKER_01 (07:17):
And uh the there also have to be a number of
other factors that come intoplay, and and there's one of
them that gets very, very littlediscussion.
And that is if you startearlier, if you if you retire at
60 or 65, you're startingearlier, your money has to last
(07:39):
a lot longer.
So you really must be moreconservative with your
withdrawals.
SPEAKER_00 (07:43):
And I'm seeing that more and more, more and more
people write me in their late50s and say, I want to pull the
pull the trigger.
SPEAKER_01 (07:48):
Well, if you pull the trigger then, though, it
starts it starts becoming alittle more dicey on even the
four or the five percent rule,potentially if we have
protracted downturns in themarket, and that's where you
have to become moreconservative.
Whereas those of us, and I'mlooking at us, yeah, uh, who are
(08:10):
waiting into their 70s beforegiving up some of work, probably
not all of it, even then.
Well, when we actually purelyretire, we're gonna have a lot l
a lot less life ahead of us.
So we can afford to be a littlemore aggressive with our
spending.
SPEAKER_00 (08:31):
It only follows.
I can spend less because I won'tneed these fancy clothes, I
won't need these nice ties allthe time, right?
I can just dress more DonMcDonald-ish, if you will.
Sir.
Yeah.
SPEAKER_01 (08:42):
When was the last time you bought a new suit?
SPEAKER_00 (08:44):
I buy one tie now every year for retirement.
SPEAKER_01 (08:46):
And when was the last time you bought a new suit?
SPEAKER_00 (08:52):
No, clothing.
SPEAKER_01 (08:53):
Uh clothing expense.
No.
Uh let's see, biggest expensefor you it's gonna say the
house, but not.
I'm going for vacations.
SPEAKER_00 (09:02):
Yeah, it probably is.
It probably is going forvacations.
SPEAKER_01 (09:04):
Yeah, I think you're right.
So you take some nice assvacations.
SPEAKER_00 (09:07):
I do.
I admit it.
So, okay, but going back to justa withdrawal rate and people
trying to figure this out.
Number one, anybody, and I don'tcare if you've done any of the
online calculators, they're outthere, some are pretty good.
Anybody should have a look by aprofessional.
That's my advice anytime, andyou can get it for very
inexpensive, or in some cases,if you've really done all the
(09:27):
legwork, probably nothing.
But somebody should look thatover.
Number two, and this comes fromChristine Benz, who I still love
this quote the only correctwithdrawal rate we know will be
after you're dead.
Then you'll know whether youtook too much or too little,
right?
And and the the survey pointsout most people end up taking
too little, which is a goodthing.
SPEAKER_01 (09:45):
And here's the beauty of the the uh the
flexible withdrawal rate.
Even if it's a higher withdrawalrate, even if you take it up to
like six, seven, eight percentper year.
Flexible.
Yep.
That means in bad years you takeless, and in great years you
take a lot more.
(10:05):
It's gonna be very hard to runout of money because you you're
not drawing down much more thanyou're you're making on average
over a long period of time, andit would take a protracted
downturn in the market, whichhas never happened to that
extent, to really hurt you.
So your odds are pretty, pretty,pretty good.
SPEAKER_00 (10:23):
Yeah.
Uh and let me mention a coupleother mistakes I see.
Um, this one happens a lot topeople, especially it seems a
lot of people start saving andthen family stuff gets in the
way, right?
I got the kids, I got, etcetera, et cetera.
And they don't know how muchthey should save.
And you we've recommended manytimes 10 to 15% of your gross
salary should be saved in someway.
(10:44):
But that can be very difficultwhen you're in those formative
years when you got a family, etcetera.
But that's number one.
The other one that I see almostevery single time for people who
are close to retirement, theydon't know what rate of return
they need on their money tosustain their portfolio.
They don't know if it needs tobe 7% or 10 or 12%, whatever it
is.
Uh you got to know that.
And then the other one that Isee on a very regular basis, in
(11:07):
addition to that, is too much ortoo little risk.
Most people are either taking aton of risk, um, and I could go
through the examples if youlike, but you know who you are,
or you've got it all stashedaway in cash somewhere, waiting
for whatever to happen in theworld or the market, and it's
not making really anything.
So those are two few of the bigproblems I see as a practitioner
(11:30):
every day.
SPEAKER_01 (11:32):
Yeah, and uh again, it it has to be right for you.
That's really the trick.
And that's why we believe ineverything being personalized.
Even the the uh the stuff wetalk about on the show, which is
why we love your questions.
We love it when you send usquestions at
talkingrealmoney.com on the aska question button thing there
that's on the screen.
(11:52):
Just do that.
Type it up, send it in.
Uh Tom will read them on theshow.
Sometimes he'll even call youand talk about it with you.
And uh you can also go there andrecord your question that is
used during the Friday QAepisode.
But today, it's summer, thequantity has declined slightly.
So Tom has one very special typetree killing question.
SPEAKER_00 (12:18):
Yeah, and the good news is the trees are weaker now
because they're getting thirsty,so things are drying out.
So this is an easy time to cutthem down, take advantage of the
pulp making process.
Uh so this comes from Anonymous.
First name and last name,Anonymous Anonymous.
Anonymous Anonymous.
Yeah.
But uh mentioned the city, JohnsCreek, Georgia.
I'm not which I'm not familiarwith.
(12:39):
Don't know it.
I know Don's Creek, Georgia,because I've been there many
times, but not Johns Creek,Georgia.
Um, hi, Don and Tom.
I would appreciate your adviceregarding my 22-year-old son's
current investment allocationand whether any changes would be
appropriate for long-termgrowth.
I'll say.
He's accumulated savings frominternship jobs, which is great,
(13:00):
by the way.
I was reading the uh market thisyear.
Very tough on young people thatare trying to get between school
kind of jobs, not easy at all.
Um, he recently graduated, willstart a full-time job in
September.
Yay, that's really great.
Here are current investments.
He has a brokerage account of$10,000, and he has a Roth IRA
of$18,500 in the brokerage.
(13:22):
Wow.
It's 80% uh DFAW and 20% VT.
SPEAKER_01 (13:27):
Hmm.
Interesting.
Okay.
SPEAKER_00 (13:29):
And then in the Roth, it is 25% DFAW.
That's dimensionals.
Equity, 25% VT, which is theVanguard total uh global
portfolio, and then 50%, so 25DFAW, 25 VT, and 50% VTI, which
I believe is the VanguardInternational Fund, right?
SPEAKER_01 (13:48):
Yeah.
SPEAKER_00 (13:48):
Uh I always forget that they always mix that one up
because it's got the I in it,and then I think so then I think
it's international, and thensomebody said, no, no, that's
the No, I think that's the U.S.
SPEAKER_01 (13:58):
Let me just double check.
Yeah, that's the U.S.
I was pretty sure that was theU.S.
So that's the U.S.
So he's heavy U.S., heavierlarge cap U.S.
Let me just finish the question.
SPEAKER_00 (14:08):
Says given his age and investment portfolio, would
like to know whether thisallocation is appropriate.
If there's unnecessary overlapbetween these funds, I'll say.
Whether adjustments couldimprove diversification or cost
efficiency.
Any can tax considerationsbetween the brokerage and Roth
recommend going strategy goingforward for both accounts.
So remember, 10,000 in thebrokerage, 18,500 for the
(14:29):
Rothschild.
SPEAKER_01 (14:29):
Again, are you not going to quibble?
I will.
No, don't quibble, really,because one, if you quibble, um
he he mentioned expense ratios.
So if you quibble, and I knowthe quibble you're gonna make,
expense ratios are gonna go upfractionally.
They're gonna go up a little.
They are.
Uh there is overlap, but but andhe's overweighted in because of
VT and VTI, U.S.
(14:51):
large cap, of course.
Trevor Burrus, Jr.
SPEAKER_00 (14:54):
I'm just gonna quibble a bits.
Is that okay?
A bit.
You can quibble a bit.
Trevor Burrus, Jr.
Quibble and bits, you get that.
Anyway, um uh too many funds.
SPEAKER_01 (15:03):
For$28,000.
Yeah.
Trevor Burrus, Jr.
SPEAKER_00 (15:05):
It's just it's a lot of work.
Uh so and I mean you could justgo with DFAW, period.
That's what I'm saying.
There's kind of a lot of overlapbetween DFAW and VT, right?
Because those are both they bothown the United States and and
more.
SPEAKER_01 (15:17):
Um say The only thing you're doing is reducing
your expense ratio a little bit.
SPEAKER_00 (15:22):
Yeah, because VT is in the single digits, right?
SPEAKER_01 (15:25):
Yeah.
SPEAKER_00 (15:25):
DFAW is probably point twenty-four twenty-four,
something like that.
Um so you so yeah, um Ipersonally, if it was my money,
I'd have uh I here's you okay,you really want some
diversification?
Here you go.
I would go A V G E in thebrokerage account and DFAW in
the Roth.
How about that?
unknown (15:44):
Okay.
SPEAKER_01 (15:44):
Two different companies.
You're really diversifying.
SPEAKER_00 (15:46):
Yeah, that's right.
SPEAKER_01 (15:47):
Between Avantis and Dimensional.
SPEAKER_00 (15:49):
Yeah, because they both love me.
Oh, I meant to get and we getnothing from them, okay?
Just so you know.
SPEAKER_01 (15:54):
Oh, I know, but it sure sounds like we do, doesn't
it?
Uh no, we don't get anything.
SPEAKER_00 (15:59):
24, I was dead on.
Yeah, you know.
24 basis points.
So you so you're paying more,uh, and the hope is you're gonna
make more, but you know, wedon't know that heading forward.
SPEAKER_01 (16:07):
Well, historically, these asset classes have in the
past made more.
Oh, look, AVGE is only 23 basispoints.
SPEAKER_00 (16:16):
Oh, two three.
How about that?
Yeah.
So good for you.
SPEAKER_01 (16:22):
Saving the kid money.
Yeah.
Uh yeah, no, what a great start,though.
Oh, I think it's fabulous.
Yeah, eight thousand dollars inyour twenties.
SPEAKER_00 (16:30):
Uh, if you did nothing more and just let that
grow in a global portfolio andmake ten percent a year, that's
a lot of money by the timeyou're sixty-five.
I think in you think in 40 yearsyou should be able to retire at
sixty.
SPEAKER_01 (16:43):
How old is he?
SPEAKER_00 (16:44):
22.
SPEAKER_01 (16:45):
22.
No, let's say uh it's fifty,let's see, twenty-two.
SPEAKER_00 (16:50):
Forty five years.
So sixty.
I would say forty-five years.
Yeah.
So that's still a pretty heftyamount of um I I'd I'd
personally think you're gonnaprobably have to wait till
sixty-eight, sixty-nine in 40years to retire, but that's my
take.
SPEAKER_01 (17:05):
So I'm doing the math here.
Let me just run the numbershere.
Oh, you're gonna actually runthe number.
Over 45 years.
Let's assume uh I'm gonna assumea 10% return.
Which is historical, but onenever knows.
Um let's see.
That's gonna be a mere uh twomillion dollars without adding
(17:26):
anything.
SPEAKER_00 (17:27):
And after inflation, it'll be 47 cents.
So that's still good becausethat'll buy you half a piece of
gum.
SPEAKER_01 (17:33):
Listen to the differences.
At 8 percent, it's I want DaveRamsey, then sign me up, please.
At 8 percent, it's less than amillion.
It's about 900,000.
No.
SPEAKER_00 (17:41):
Okay.
SPEAKER_01 (17:41):
At 12 percent, it's 4.6 million.
All right.
SPEAKER_00 (17:45):
I'm I'm I'm no offense to you because you know
I care about you, but I'm gonnajoin the Ramsey bunch because 12
is You're going for the 12.
SPEAKER_01 (17:52):
Way more.
That looks better.
Plus, I get whatever you want todo.
You're an old guy.
We expect insanity out of you.
SPEAKER_00 (17:58):
I can get away with it.
SPEAKER_01 (18:00):
So uh before we go, we have news that there's a send
some news about when SocialSecurity is gonna run out of
money.
I hate this because it alsoWell, not money, not all the
money, just the trust fund, justthe trust.
SPEAKER_00 (18:13):
So most of the money comes in and goes out the back
door.
Most.
Right.
But the trust, right now, ifnothing is done, they just move.
SPEAKER_01 (18:21):
The trust is supplementing the benefits.
SPEAKER_00 (18:23):
Correct.
And if they don't do anything,if they don't fix it anyway, uh,
according to a new uh look bythe trustees, it'll run out of
money in late 2032, which by mycalculation is about six years,
just in time for me probably toneed it.
SPEAKER_01 (18:35):
Let's do let's here's a little exercise for
you.
Because right now, Congress andthe White House have really
shown very little interest infinding a reasonable solution to
the problem.
And there are really only twosolutions to this problem.
Two solutions.
Two.
You only get the choice of two.
(19:00):
No, that's one of the two.
SPEAKER_00 (19:01):
Oh, okay.
SPEAKER_01 (19:02):
One is raise taxes.
Okay?
SPEAKER_00 (19:07):
Yeah, that's one.
Again, let's describe what thatis exactly.
Hang on, let me give my twofirst.
SPEAKER_01 (19:13):
Okay, then you can my two for my kills.
Raise taxes to reduce benefits.
Those are the only two.
SPEAKER_00 (19:21):
There's a lot that fits in under both of those.
Right, exactly.
SPEAKER_01 (19:24):
But but yeah, there are there are uh variations on
those themes, but you gotta doone of the two or both of the
two in one way or another.
SPEAKER_00 (19:33):
That's what's gonna end up happening.
By the way, you made a greatpoint when we talked about this
before we did the program thatpeople now being elected to the
U.S.
Senate will have to do somethingabout this in this term.
SPEAKER_01 (19:45):
They will have to do it because they're in there for
six years until 2032.
Bingo.
SPEAKER_00 (19:51):
So they're gonna have to um so we're running out
of time, in other words.
And by the way, I still here'sthe reason I hate to bring this
up because you've we've seen thenumbers.
More and people go file earlywhen they hear this.
They think I better get my moneynow because it's gonna go away.
Right.
But think about it just for amoment.
The fact that half of peoplethat are retired get the
majority of their income fromSocial Security, right?
(20:12):
That's 71 million people aredependent on this.
Do you think they're gonna justlet something like that go away?
I mean, it's gonna say, oh,well, that was that was great
while it lasted, but it's notgonna that is so unlikely.
So unlikely.
Even in politics, they can'tmake that one fly.
So, Don, when he says raisingtaxes, okay, getting rid of the
(20:32):
cap on social security, rightnow which is now 184,000, I
think.
If you make anything above that,then you don't pay into the
system anymore.
If you get rid of that, and itit that fixes it overnight.
One, that's gone, that's over.
But I personally think it'll besome combination of a slight
change there, and probably hateto say it, people don't like it,
(20:53):
and it's not gonna be asdramatic as it's been in other
countries, but probably movingthat 62 starter date maybe to 63
or 64.
You gotta wait a little longer.
Remember, this was set up in the1930s, which is coming up on 100
years ago.
People are living longer.
System's not designed for peopleto be retired for uh 30 years at
all.
So probably have to wait alittle longer to get your money.
(21:15):
That's my guess.
But who Yeah, I was right.
SPEAKER_01 (21:17):
It was$184,500.
You're on it today.
Um and so that means that everypenny over that, you don't pay
anything.
Yeah.
It's and you still pay inMedicare, but that's one of the
easiest things to fix becauseall of us who earn slightly
above 184 and we're in thatgroup now.
(21:38):
Yes, we are.
For most of our life we were notin that group.
That's true, too.
But now we are.
Uh, thankfully.
I'm I'm I'm I'm very pleased.
But the fact is, for most of theyear I am used to seeing that
taken out of my paycheck.
I am used to living on the netincome that I see every two
(21:59):
weeks.
In my paycheck.
I'm used to seeing that.
SPEAKER_00 (22:02):
Taking out the seven point six.
SPEAKER_01 (22:05):
Now, when the fall comes and I have surpassed 184,
I it's a windfall.
That's not all you to take me tolunch.
That's the same thing.
I was living fine before.
So, you know, psychologically,that may be the least painful of
(22:26):
all of the options from apsychological standpoint because
we already pay it.
It's the easiest, it's thesimplest.
It's it's not from a messagingstandpoint because it sounds
like raising taxes, but it'sjust not reducing them at 184.
That's my spin.
(22:47):
I got a seat for you in the Imean there's no there's no cap
on Medicare.
Oh, by me by the way, Medicareis teetering on the brink, too.
Um Medicare Well, but Medica itjust means that those who are on
Medicare will have to pay higherpremiums.
Period.
That's just all that means.
SPEAKER_00 (23:05):
Yep.
That's coming.
SPEAKER_01 (23:07):
Yeah.
So there's gotta be a solution.
And folks, here's the thing.
We know our audience.
Yes, some of you are in your 20sand 30s, but you're not the
majority, sorry.
The majority are 50s, 60s, 70s.
You guys, gals, old people,unite.
You gotta pester yourcongresspeople.
(23:29):
That's your members of the Houseof Representatives and your two
senators in every state in theUnion.
They gotta do something, andthey've gotta do something
really soon.
SPEAKER_00 (23:40):
Yeah, that's not very long from now.
Here's the other thing that weneed to pester the young people
for.
You gotta have more kids.
You gotta have more kids.
This is demographic.
SPEAKER_01 (23:48):
Or you've got to get better jobs.
I'm sorry.
SPEAKER_00 (23:51):
Pay in more.
This is demographic in a lot ofways because we're not replacing
the population enough, sothere's not enough people paying
in.
unknown (23:57):
Yeah.
SPEAKER_01 (23:57):
That's part of the problem.
There's another political issuehiding under all that, too.
SPEAKER_00 (24:02):
Fully aware of that, of course.
SPEAKER_01 (24:03):
Yeah.
unknown (24:04):
Yeah.
SPEAKER_00 (24:04):
We can't talk about sex on the program.
SPEAKER_01 (24:06):
No, I wasn't talking about sex.
I was talking about immigration.
SPEAKER_00 (24:08):
Ah, yes.
Well, gosh, don't go there,please, because I can't handle
cards and letters anywhere.
SPEAKER_01 (24:13):
Well, no, I'm just saying that, you know, it's not.
Shut it down.
SPEAKER_00 (24:17):
Yep.
SPEAKER_01 (24:18):
I know.
I'm with you.
We've got to have more peoplepaying the tax somehow.
I don't know how to do it.
Unless we're going to just say,hey, China, give us more social
oh wait, you don't pay any.
Sorry.
unknown (24:28):
Don't pay any.
SPEAKER_00 (24:29):
So no dice.
Anyway, so we'll see how itplays out.
But it's interesting, as yousaid, I think you made the best
point of the day.
People being elected to the U.S.
Senate in this particular yearwill have to face this issue
during their term.
We'll see what happens.
SPEAKER_01 (24:45):
No choice.
You gotta do it.
Or AA the AARP crowd is gonna bemad.
And by the way, the AARP crowdalready believes.
It's like it's only 40% whobelieve Social Security is gonna
last.
SPEAKER_00 (25:00):
No, I think it's a small number.
And by the way, speaking of thatcrowd, I was given a cane 35
years ago.
I still have it, so I'll beprepared to use it.
Not sugarcane either.
SPEAKER_01 (25:09):
So you'll be raising a cane?
SPEAKER_00 (25:13):
Exactly.
And you can count on that too.
SPEAKER_01 (25:15):
Thank God I live 3,000 miles away from you.
Your wife's gonna beembarrassed, not me.
SPEAKER_00 (25:22):
But it would not be the first time with that either.
So we'll be okay there.
SPEAKER_01 (25:25):
We uh hope you'll send us some questions because
we'd have more of them if youdid.
Go to talkingrealmoney.com,click ask a question, type it
in, speak it in.
Those get answered on Fridays.
And keep listening to the show.
Give us your solution to sellingprinting.
SPEAKER_00 (25:39):
We'll take that too.
SPEAKER_01 (25:40):
If you have a solution, why not?
I'll hear it.
SPEAKER_00 (25:42):
Yeah, one.
SPEAKER_01 (25:43):
I'm telling you, there are only two.
SPEAKER_00 (25:44):
Okay.
It's raise taxes or cutbenefits.
SPEAKER_01 (25:46):
Raise taxes or cut benefits.
SPEAKER_00 (25:48):
I'd like to see.
SPEAKER_01 (25:49):
Or the two of them together.
Do both.
SPEAKER_00 (25:53):
Sure.
SPEAKER_01 (25:54):
Anyway.
And if you have a uh portfoliofrom which you would like to
determine the best in way to thebest way to get an income stream
and the best income stream,yeah, you're pretty good with
everything else.
You just want a little help?
Meet with one of our advisors.
They're fiduciaries.
They're not gonna charge youanything, they're not gonna
(26:14):
pressure you to become a client,promise.
They're just gonna help becauseeverybody associated with this
program really truly wants tohelp you be better with your
money.
And that's why we have for avery long time called this show
Talking Real Money.
SPEAKER_02 (26:33):
The opinions and views expressed on this podcast
were current on the daterecorded.
Opinions, estimates, forecasts,and statements of financial
market trends that are based oncurrent market conditions
constitute our judgment and aresubject to change without
notice, including anyforward-looking estimates or
statements which are based oncertain expectations and
assumptions.
Although information andopinions given have been
obtained from or based onsources believed to be reliable,
no warranty or representation ismade as to their correctness,
(26:54):
completeness, or accuracy.
Information presented on thepodcast is not personalized
investment advice from OppelloWealth.
The views and strategiesdescribed may not be suitable
for everyone.
This podcast does not identifyall the risks, direct or
indirect, or otherconsiderations which might be
material to you when enteringany financial transaction.
We hope you realize that theinformation provided on Talking
(27:16):
Real Money is for informational,educational, and hopefully
enjoyable purposes only.
The podcast is not trying to getyou to buy or sell any financial
products or security.
Instead, the program is providedas a public service by Apello
Wealth, a fee-only registeredinvestment advisor.
Please see Appello Wealth's ADBPart 2A on our website for
information regarding Appello'sfees and services.
Apello Capital, LLC DBA AppelloWealth, is an investment
(27:37):
advisory firm registered withthe Securities and Exchange
Commission.
The firm only transacts businessin the states where it is
properly registered or excludedor exempt from registration
requirements.
Registration with the SEC or anystate securities authority does
not imply a certain level ofskill or training.
Appello does not provide tax orlegal advice, and nothing either
stated or implied here should beinferred as providing such
advice.
Thanks for listening, and pleasevisit TalkingRailMoney.com for
(27:59):
more information and importantdisclosure related to
performance of any specificindex or fund quoted in this
podcast.
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