June 25, 2026 • 30 mins
Why do so many retirees struggle to spend money they’ve spent decades saving? Don and Tom explore the psychology behind retirement spending, including the fear of running out of money, the reluctance to touch principal, and how guaranteed income sources like Social Security, pensions, and even simple immediate annuities can make retirees more comfortable enjoying their wealth. They discuss practical strategies for creating spending confidence, the importance of comprehensive retirement planning, and why delaying meaningful experiences can be riskier than spending. The episode also answers a listener question about setting up a Roth IRA for a teenager and examines the latest uncertainty surrounding 529-to-Roth transfers.
0:05 Introduction: Why retirees struggle to spend money they can afford to spend
1:36 Fear of running out versus fear of missing out in retirement
2:52 Why even millionaires worry about spending their savings
3:51 The saver mentality and the challenge of switching to spending mode
4:47 Research shows many retirees barely touch their nest eggs
5:29 YOLO, aging, and the reality of declining mobility later in life
6:02 Why retirees prefer spending Social Security, dividends, and interest over principal
8:04 Travel, aging, and the danger of postponing experiences
8:49 Creating confidence through retirement planning
9:56 Using Social Security and RMDs to cover essential expenses
10:12 Flexible withdrawal strategies for retirement spending
11:39 Could a simple immediate annuity help retirees spend more confidently?
12:42 Healthcare costs, aging, and changing spending patterns
13:30 Recency bias and how it distorts retirement decisions
14:48 Why lifelong savers have trouble becoming spenders
16:27 Summer slowdown and a request for more listener questions
17:58 Listener question: Setting up a Roth IRA for a 19-year-old daughter
19:16 Evaluating Avantis ETFs and M1 Finance for a young investor
19:48 Why a single-fund solution may be better for small accounts
20:56 The importance of emerging markets exposure
22:40 Understanding 529-to-Roth IRA transfer rules
24:33 The unanswered question of beneficiary changes and the 15-year rule
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:05):
You're gonna do a really great financial future.
Tom and Don are talking realmoney.
SPEAKER_01 (00:12):
Tom, you're elderly.
Spend your damn money.
You're you are.
Face it.
I know you hate it.
I hate it too.
I was just having thisdiscussion with my wife this
morning.
She's going, I'm old.
I said, Yes, you're old.
Get over it.
SPEAKER_02 (00:26):
You know when I when I really feel it?
I I so you know this so wellbecause every day, all the day
there's the pain of that.
But the but when I see thepictures, for example,
yesterday, um, as you know, Iwent into the lake at 59
degrees.
SPEAKER_01 (00:42):
Uh we shot the water still 59 degrees in June.
unknown (00:46):
No.
SPEAKER_02 (00:47):
But it's fed from springs above or something.
But um, when I got out, my wifeshot a video because we wanted
to prove to my daughter becausethe challenge was you're gonna
go in.
So this was shot in May.
So I told her, I go in everyMay.
Well, blah, blah.
Anyway, so I saw the video andI'm looking going, Who's the old
guy?
It's like, uh, that's you, sir.
It's painful, man.
(01:08):
Painful.
So yeah, I know.
Spend your money, you're old,because uh you can't take it
with you.
SPEAKER_01 (01:13):
Yeah, and that's a thing uh these days.
It really is.
A lot of folks who have beenvery successful earners and
savers and investors are gettinginto retirement and they're
afraid to spend, Tom.
Now you understand this becauseyou're one of them.
SPEAKER_02 (01:34):
I know.
Uh uh, you know, I uh you trustme, you're not the only one
saying this in my ear.
I got other people.
SPEAKER_01 (01:40):
I think you probably have one other person
particularly.
SPEAKER_02 (01:43):
Yeah, the the the younger, because she knows we're
getting ready to spend a lot onher education, which is which is
great because she's we saved alot.
We've got we're in good.
SPEAKER_01 (01:51):
You find twenty-nine most of that, though.
Well, not most.
SPEAKER_02 (01:54):
It's about half.
SPEAKER_01 (01:55):
Well, that's still a lot.
SPEAKER_02 (01:58):
It's about a quarter of retirees who say they are not
confident that they have enoughmoney.
So that means 75% believe theyare, right?
Have enough money.
And these things change.
I personally, this you took thisnext year during a bear market,
you're gonna get the opposite,my take.
Oh, running out of money, it'snot gonna last, right?
(02:19):
Right.
Uh, but everybody basically inretirement, because we talk to a
lot of people, has well, youknow FOMO, right?
Fear of missing out.
SPEAKER_01 (02:26):
Right.
SPEAKER_02 (02:27):
How about fear of running out?
Full full row.
Foro.
Oh my gosh.
SPEAKER_01 (02:32):
Another four there's fear of losing out.
That's folo, fear.
Fear of running out, fear ofmissing out.
Yep.
Oh my gosh.
SPEAKER_02 (02:41):
Anyway, so uh let's talk, let's let's unpack this a
little bit.
SPEAKER_01 (02:45):
Fear of dying out.
SPEAKER_02 (02:46):
Yeah, well, you can you can pretty much check that
box, it's coming.
Um, but why?
Why are people who have saved insome cases millions?
Right.
And that's a lot of ouraudience.
They've saved a lot of ouraudience.
I get it.
They they're worried.
Why are they worried?
Because, well, like everybody,how long am I gonna live?
(03:07):
How much is healthcare gonna be?
How's the economy?
How's the market?
Am I gonna make you know 10% ayear every year?
No, you're not.
Um, to get over it.
And and still, you and I havehad this discussion.
We have different feelings aboutit, but basically, everybody I
talk to one-on-one says, I wantto leave something to my kids.
SPEAKER_01 (03:27):
The ingrates.
Why would you want to do that?
SPEAKER_02 (03:29):
You already left something.
Did they earn it?
Well, kinda, in my case, becausethey had to be around me all
these years.
SPEAKER_01 (03:36):
Well, but they also got the benefit of that, too.
There was your wisdom and yourcharming personality.
SPEAKER_02 (03:43):
Wow.
SPEAKER_01 (03:43):
That's what I meant.
I didn't mean the fact that youmake good money.
SPEAKER_02 (03:46):
Oh, I thought it was just about the fact that the
lights are still on.
SPEAKER_01 (03:50):
Um I appreciate it.
SPEAKER_02 (03:54):
This is a fascinating topic, though,
because for most people that wetalk to, because people who
haven't saved anything generallydon't call us because there's
not that much to talk about.
It happens sometimes.
I get calls from people who arefifty-five and they're saying,
What should I do?
And I say, put your head down,get to work, save this much,
invest it properly, and giveyourself a shot at you know 70.
(04:14):
It does happen.
So you shouldn't give up.
SPEAKER_01 (04:16):
By the way, by the way, it can happen.
Absolutely.
It's just more work if you waitlonger, but it still can be
done.
I had to start over at 50.
SPEAKER_02 (04:26):
You know that.
Well, we both kind of did.
Yeah.
SPEAKER_01 (04:28):
I mean, it was uh it was in our fifties.
SPEAKER_02 (04:31):
Gave away a lot of money to somebody else, had to
start over, blah, blah, blah.
It was not pretty.
SPEAKER_01 (04:36):
So But but i it it's the folks who are are in their
sixties or their seventies nowwho are putting off spending for
what?
SPEAKER_02 (04:48):
Well, uh for the aforementioned worries about
health care, whether themarket's going to provide, et
cetera.
It's six of ten people who havefive hundred thousand or more
saved that a decade later stillhave basically all that money.
They haven't spent it.
And and we do encourage people,you've come to my office, I've
talked to you, to spend yourmoney.
Um, I think the other part is ofthis that I see, and maybe this
(05:11):
is part of my problem, is I Ithink I'm gonna live forever
because the only reality I knowis the one with me in it.
So I'm like, well, I'll spend itlater.
SPEAKER_01 (05:18):
Oh, I thought of another OLO that goes with this.
Yeah, please.
When it comes to your money,remember, you truly do.
We talked about this with photo.
YOLO, you only live once.
SPEAKER_02 (05:31):
Yeah, that's a good point.
SPEAKER_01 (05:33):
You don't get a second chance to spend the
money, and I'm telling you.
When you're in your nineties, mmost of us.
I mean, okay, there may be thethe amazing uh exception to the
rule, but most of us are gonnabarely be getting up out of our
wheeling chair.
(05:53):
I know I visited my mother inthe nursing home.
They're all these 90 your 90somethings are they're they're
not spending it except on healthcare.
SPEAKER_02 (06:02):
Yeah.
So healthcare, that that that'san issue and that should be put
into your plan.
But here's the part that'sperhaps more fascinating.
It it turns out that um whenthey test people about all these
kinds of things, when they theythey sit down and they they say,
What about this?
What about that?
Retirees in an experiment spentless than they could afford,
preferring to live off SocialSecurity, dividends, and
(06:24):
interest rather than dippinginto the principle of their
savings.
So if you get if you're gettingmoney from Social Security,
which if you're retired, I hopeyou are, although depends on
your plan.
If you have a pension as well,people have a tendency to feel
good because that's that's aregular paycheck.
That's just like the old days,right?
When I was working, I'm gettingthese checks, they're coming
into my account, I'm spendingthat money.
SPEAKER_01 (06:44):
People have interest and dividends feel like paycheck
in there.
SPEAKER_02 (06:48):
Exactly.
So there's a guaranteed natureof all that.
Um, and it feels like, as Isaid, like a paycheck.
When it comes to taking moneyout of your accounts and
spending it, um, people justthey they they blanch at it.
They it it it's upsetting tothem because it's like, well,
wait a minute.
That's money, those are mysavings.
I don't want and I used to talkto my mom about this, about she
(07:10):
didn't want to touch theprincipal.
And I always said, Well, let'sjust go through the fan.
You got lawyer, lawyer, collegeprofessor, and I'm the black
sheep as the you know, financialadvisor.
Um, you know, so they're alllook like they're gonna be okay.
So really leaving money toothers is not necessary, but she
ended up dying, and yes, leavingmoney to others and not in the
(07:31):
middle of the year.
SPEAKER_01 (07:32):
But it wasn't millions, it wasn't seven
figures.
SPEAKER_02 (07:35):
No, it wasn't seven figures.
Nope, it wasn't.
SPEAKER_01 (07:37):
I think seven figures is counterproductive.
Leaving your kids a few hundredthousand.
Okay, there's no way.
I I joke about spending the lastdollar, but the reality is
there's there's no way you canreally do that effectively.
SPEAKER_02 (07:50):
You raised a very good point, though.
You raised a very good pointaround how long we get.
Um people have a tendency to putthese things like spending on
vacations, like doing thingsthat they wanted to do because
they think I'll do it tomorrow.
Um you may not have tomorrow.
Right.
As painful as that is, but whenyou get to like 70, uh, you
(08:12):
know, how many more years areyou gonna want to go on a plane?
I just ran into a relative whotold me I'm never gonna go to
Europe again.
He's 81 or something.
He said, I just don't, I don't,I don't like it.
I don't like getting on theplane sitting there for 12
hours, it's not comfortable, andI don't want to do it.
I don't want to judge around.
Yeah.
You don't even like flying toSeattle.
SPEAKER_01 (08:30):
No, not unless I'm in the front of the bus.
SPEAKER_02 (08:34):
And even then I don't like it all that much.
Well, travel is not what it oncewas.
But let's talk about some of thethings that might make it easier
for you to spend, right?
SPEAKER_01 (08:43):
Okay.
Okay.
Give me some ideas.
SPEAKER_02 (08:44):
Well, okay, the first one is one that we have
mentioned a few times.
Having a plan, running thenumbers, and see if it all
works.
SPEAKER_01 (08:52):
Because well, because the plan, when it
becomes when you codify theprocess, for example, the taking
money from both your incomestream and your principal or the
gains of your principal, uh, ifyou codify that, then it feels
more like a paycheck and lesslike I'm I'm I'm I'm cashing up
(09:13):
my nest egg.
SPEAKER_02 (09:14):
Yeah, couldn't agree more.
Uh and so yeah, having, and bythe way, you can do this on your
own.
We've talked about this.
You can go to Bolden, there'sother planning sites where you
can do it on your own.
I personally, because I I guessbecause I'm in the industry and
I've seen people even who aredoing their own planning, having
a third party that looks at itand says, Yeah, that works, no,
(09:35):
that doesn't, that can give youa lot of permission, right?
Because they've looked at thenumbers, they said, You're
you're you're gonna be okay,quit worrying so much about
this.
SPEAKER_01 (09:43):
And spend your and you've got somebody else to
blame if it goes wrong.
SPEAKER_02 (09:46):
Yeah.
I hadn't thought that through,but that's good.
How soon till I retire?
Is that like tomorrow?
Uh so uh here's another one.
Um having a set amount of here'sthe way I I want to do it in
retirement.
Having the Social Securityincome, and in my case, because
I probably will still have otherincome before these, the
required minimum distributions.
(10:08):
When you add that to SocialSecurity, I want that to pay the
data to the bills.
SPEAKER_01 (10:13):
So Social Security and the RMDs to pay the bills.
SPEAKER_02 (10:17):
To pay the bills, right?
That that's it.
And then what you could do isthen you have this hopefully
other savings.
I'm gonna have it, Don's got it,hopefully you've got it.
I don't know if you're gonnahave to do that.
That's where you can say that'swhere you can say I'm gonna take
money from that on a you knowfixed or flexible amount, right?
A percentage, to do the otherstuff I want to do for as long
(10:38):
as I want to do it.
That I think is a reasonablestrategy that people could live
with, and it will allow them tospend more than a lot of time.
SPEAKER_01 (10:44):
So what you're saying basically is the premise
behind the flexible withdrawalstrategy.
You're using the requiredminimum distributions and maybe
the income from your bonds andyour dividends and your social
security to pay the bills.
And if you want to do somethinggood and the portfolio's doing
all right, you splurge.
SPEAKER_02 (11:06):
Yeah.
SPEAKER_01 (11:06):
I think you want to do something special.
SPEAKER_02 (11:08):
JP Morgan found that uh people with comparable levels
of total wealth, 60 percent, 60to 80 percent of that wealth
coming from guaranteed sourcesof income.
In other words, like I justmentioned, Social Security,
pensions, that kind of thing,they're more comfortable
spending money because they knowthey have this regular amount
coming in from a sort ofguaranteed by the way, pensions
(11:29):
aren't always guaranteed becausewe've seen places where they
didn't get paid forever.
SPEAKER_01 (11:34):
Would that be one of those cases where maybe, and
we're not big fans, but wheremaybe a single premium income
annuity might make sense?
SPEAKER_02 (11:43):
I think so.
SPEAKER_01 (11:44):
Because it's because then that's the giving, again,
saying here's that income.
That's right.
And now that other money, notfor a hundred percent of your
money, but for a portion of it,to get that that guaranteed to
get that psychological incomestream at a level you feel
comfortable with.
SPEAKER_02 (11:59):
Totally agree.
And this is a plain vanilla, lowfee, not no building.
Joint life.
Yeah, it's not gonna becomplicated.
It's easy, it's it's there, andyou're gonna get it.
So it would be in that case,then your uh Social Security
income, I guess you could throwin your RMDs there, and then
that immediate annuity that issupplying the regular and the so
(12:21):
that comes in, the bills getpaid, maybe there's a little bit
less left to do something elseon top of that.
But it but it gives youpermission, I think, to spend
that money.
And we know that people who aregetting that regular income just
feel better about things.
They don't they don't worryabout uh you know drawing down
their portfolio as much.
We have other people, by theway, that have no we had a guy
who retired a few years ago andhe's been spending like crazy.
(12:42):
So it does happen.
But most people are very carefulabout these things.
Most.
SPEAKER_01 (12:47):
Well, and we're you have to remember one of the
things we panic about is thefact that we're going to be
spending so much on health care,on on advanced care, on uh
nursing care.
But remember, you're also goingto be spending less on other
expenses when you get to thatpoint.
So it may not be as ponderous asan added expense as you think it
(13:10):
is.
And that's something, again, agood plan can sort of inform by
looking at what all of thesecosts might be in retirement and
uh then sort of guessing a bit.
SPEAKER_02 (13:22):
Yeah, there's a bit of that.
Here's the other part of thisthat I think most people
struggle with.
They have a tendency to get shutdown by recency bias.
Whatever's happened in the lastsix months or a year, especially
with their money, they have atendency to extrapolate that.
That's gonna keep happening,right?
Both the spending side, themarket, blah, blah, blah.
Can't make anything in bonds, Iremember a few years ago, et
(13:43):
cetera, et cetera.
That's gonna continue forever.
Nothing continues forever.
You need to look at retirementas a 20 to 30 year situation,
right?
As uh project it and not getworried.
This I see this a lot wherepeople retire, market goes down
a little bit.
Oh, I'm gonna shut down mydistributions.
I'm not gonna do that this year,I'm not gonna do that.
Remember, this is gonna go onfor a long time.
(14:05):
So you can't just say the lastsix months are going to equal
what the retirement's going tolook like.
Yes, so having the plan can giveyou permission.
I love sort of the fixed incomesources, and maybe you're right,
Don, you include an annuitythere that pays the regular
bills because that gives you thecomfort of knowing that
everything's taken care of.
SPEAKER_01 (14:21):
And then I spiel I spoke blasphemy almost.
Which was?
I said annuity.
SPEAKER_02 (14:26):
I yeah, I know.
You're gonna we're gonna takeyou out back and give you the
lash after this, and you'll welldeserve it.
Don is now, for those of you whodon't know, in addition to a
great author, he sells annuitieson Sunday, so you've got to call
a special number for that.
SPEAKER_01 (14:38):
Uh fixed indexed annuities.
SPEAKER_02 (14:41):
Fixed indexed annuities.
So those things can help, but atthe end of the day, it this is
um this is not easy for mostpeople that have been savers
because it's just a mentality.
It it's just who you are.
You've always been my dad wasrelatively cheap.
I mean, he wore the same pair oftennis shoes for 25 years, etc.
(15:01):
He drove Chevrolet Vega.
I mean, a doctor driving around.
SPEAKER_01 (15:06):
No, he was he was a depression baby.
SPEAKER_02 (15:08):
He was, yeah.
So most of those people are gonenow.
Most, not all, but pretty much.
Well, we just looked up thenumber of a living U.S.
World War II veterans.
SPEAKER_01 (15:17):
It isn't very many.
SPEAKER_02 (15:18):
It's tiny, tiny, tiny out of the 1.6 million that
served.
SPEAKER_01 (15:21):
So it's larger than the number of Civil War veterans
left, though.
SPEAKER_02 (15:25):
Which is you're more interested in because they might
buy your book.
SPEAKER_01 (15:28):
Maybe just insane.
SPEAKER_02 (15:29):
Which I still love.
SPEAKER_01 (15:31):
Sales haven't been as you know, they haven't been
blockbuster, but they've beengood.
They've been good.
SPEAKER_02 (15:35):
Telling you what, you should read it.
So three or four, three or foura day.
Have the plan, consider the wayto pay the regular bills, and
think of this in a long-termnature.
This is not something that'sgoing to be the next year or
two, and in my case, evenlonger, because my wife's
younger, I expect her to livelonger.
She's going to need the moneyfor a whole bunch more after I'm
gone.
(15:56):
And she is the spender in thehousehold.
And yes, regularly she does say,you should just why are you
being so cheap about things?
You know, you got the money.
And my take is, yeah, buthealthcare markets.
SPEAKER_01 (16:07):
You're going to be on a spending spree with her on
this uh European vacation, youand Chevy Chase and the family.
SPEAKER_02 (16:15):
God, we hope we're not going to reenact that
debacle.
So anyway, those are goodthings.
SPEAKER_01 (16:20):
It is, by the way, it is the warm season of the
year, even though the water isstill cold for Tom anyway.
And you know, it's funny thingabout the warm season, the world
tends to slow down.
And we've mentioned this everysummer.
The world slows down.
And the number of questions wereceive at talkingrealmoney.com
slows down a little bit.
(16:41):
Really?
Which is why our new thing thatwe started a few months ago when
we killed the radio show hasalso waned along with it.
And that's Tom's calls with you.
His conversations with you havewaned because the number of
typed up questions has fallenpretty precipitously.
So uh if you want those to comeback anytime soon, you need to
(17:04):
start asking some questions.
And you need to go totalkingrealmoney.com to do that
and just go to that button thatsays ask a question.
It's right there at the top ofthe page.
Just ask a question, type themup.
If it's a if it's an appropriateone, Tom's gonna get on the
phone with you and we'll use itin the show.
Otherwise, he's just going toturn them into bits of pulped
(17:24):
tree and uh under underincandescent, old-fashioned
incandescent Edison bulbs,because he's a Luddite.
SPEAKER_02 (17:34):
Those are new bulbs there.
Come on.
SPEAKER_01 (17:35):
Are you sure?
SPEAKER_02 (17:36):
I don't know.
I'm not sure.
SPEAKER_01 (17:37):
You actually have LEDs now.
SPEAKER_02 (17:39):
You know, and thanks to you, I just got off a call
where a guy who called metechnologically challenged.
I said, you can't say that inour first conversation.
That's like a third conversationkind of thing.
But you are.
Okay, I guess so.
I don't know where these slidescame back.
So sorry facing up.
SPEAKER_01 (17:53):
I hate to do this to you, but you don't.
That's not the point.
You don't hate to ask thequestion.
Uh so What's the question?
This means the show will beshorter, so that's good.
SPEAKER_02 (18:03):
Hopefully, we'll hopefully we'll have a good
answer.
And in this case, uh hopefullyhave a solution, because this
question comes from saline,Michigan.
Do you like that?
Saline solution.
Uh Eric writes Oh, saline, likesaline like salty.
Yeah, right.
Yeah.
Okay.
So hopefully we'll have asolution.
Um thank you.
That was a real stretch for ajoke.
But aren't they all?
(18:24):
Hi, found you guys four monthsago and have listened to every
episode since.
So thank you for that.
SPEAKER_01 (18:29):
We we appreciate that.
You only have about 1,800 backto go.
SPEAKER_02 (18:33):
You got a little catching up to do, as they say.
My question about setting up aRoth for my 19-year-old daughter
with her summer job money.
By the way, interesting aside, Ijust read in the Wall Street
Journal that summer jobs thisyear are really tough for
teenagers, hard to find one.
So um, my daughter, of course,has been working very hard at
the local pizza place, buthopefully uh it works out for
(18:54):
your daughter.
SPEAKER_01 (18:54):
I was thinking about it It's all your fault because
you mow your own darn lawn.
You don't let the neighborhoodkids do it.
See, you're hurting the economy.
SPEAKER_02 (19:01):
Taking everybody down with it.
Uh my thinking is opening it atM1 Finance with 25% in each of
the following.
A V L C, which is the AvantisLarge Cap, A V U V, which is the
Avantus US small cap value,AVIV, which is the
international, and A V D S,which is another, they think
it's the international small.
SPEAKER_03 (19:22):
Yeah.
SPEAKER_02 (19:22):
Um, question Is M1 a good choice?
I like their easy rebalance toolfor my daughter.
And would you change any of thefour ETFs?
Truly open to your advice, notjust looking for assistance that
I know what I'm doing.
Thank you so much for all youdo, guys.
You guys do.
SPEAKER_01 (19:37):
Here's the thing.
I think you're making unlessthis is a learning experience,
unless that was the the intent,you're making this too hard for
a small account.
It's a small account.
Thank you.
It should just be A V G E or A VG V.
SPEAKER_02 (19:56):
Yeah.
E or V at the end, or because welove them equally, uh like your
children, uh D F A W would be.
SPEAKER_01 (20:04):
Or D F A W and And then the the the rebalancing
becomes truly automatic.
You don't even have to thinkabout it.
And given the size of this, Idon't see a bit unless you want
to increase the internationalallocation.
SPEAKER_02 (20:21):
Because you're getting less than 40 percent,
right?
SPEAKER_01 (20:23):
Yeah, it's a 30-something percent uh with
Avantis and DFW.
I think DFW is a little higher,DFAW is a little higher than
Avantis, a little.
But they're both in thatthirties range.
Unless you wanted to go 50-50like I like.
I like 50-50.
SPEAKER_02 (20:38):
Paul, by the way, Paul Merriman still does 50-50,
so you guys are in the sameasset allocation pool.
SPEAKER_01 (20:45):
So that would be the only reason to do this other
allocation.
The force the fore fund.
And the thing you're missingwith the fore fund, well, you're
missing a few things, but thething you're really missing is
emerging.
You got no emerging.
SPEAKER_02 (20:58):
Which I know Don't get mad, but it's been a hot
asset class the last year orsomething.
SPEAKER_01 (21:03):
Well, and that's the thing, is that it becomes a hot
asset class when you leastexpect it will be.
SPEAKER_02 (21:08):
You're too late.
SPEAKER_01 (21:09):
You just want to always be there.
We're never telling you to timeit and to try to be in the right
place at the right time.
You just always want to be therebecause being there means you
get to pro you get to takeadvantage of the good times,
which are unpredictable.
Trevor Burrus, Jr.
SPEAKER_02 (21:24):
Yeah.
You don't know when they'regonna show up.
It's like the US small cap valuepremium.
It just uh all of a sudden it'sthere one day and then it's
gone, but you gotta be in it allthe time.
SPEAKER_01 (21:32):
Well, we went through over a decade on this
show where people were saying,Why are we buying value stocks?
They're not doing anything.
Why are we buying small?
They're not doing anything.
Because they don't always dothings.
SPEAKER_02 (21:44):
You gotta be patient.
So and I don't know M1, I knowPaul Merriman.
Paul loves M1, but I don't Idon't know what the costs are
associated with that.
SPEAKER_01 (21:53):
There's no costs.
SPEAKER_02 (21:54):
Okay.
SPEAKER_01 (21:54):
So you can buy you can buy those funds the same as
you could go buy anything elsetoday.
It's just a much smallercustodian.
SPEAKER_02 (22:00):
So um that would be keep it simple.
Yep.
SPEAKER_01 (22:03):
Be more maybe a little more diversified and
again um And the auto rebalancein this case i again if the goal
is to get more internationalexposure then the auto rebalance
at M1 would make sense.
SPEAKER_02 (22:15):
And I think with AVGE, is it rebalanced like
every day?
Yeah, it's always rebalancing.
Okay.
SPEAKER_01 (22:22):
So money comes in, they're constantly rebalancing
as money's coming in.
SPEAKER_02 (22:25):
There you go.
So I think Eric that would bethe simpler one, and I hope
that's the right solution forSaline, Michigan.
SPEAKER_01 (22:30):
It's a decent solution.
unknown (22:32):
Okay.
SPEAKER_01 (22:32):
But it's not salty.
SPEAKER_02 (22:34):
Sorry about that.
I'm sorry.
SPEAKER_01 (22:36):
You're not feeling salty in Saline.
Let's see.
Oh, one other thing we wanted todo.
Yeah, speaking of no speaking ofuh Roth IRAs.
One of the big advantages to 529plans is the silly little thing,
which which is a good thing.
SPEAKER_02 (22:51):
It's silly.
SPEAKER_01 (22:52):
It is silly.
It makes no sense.
SPEAKER_02 (22:53):
Trevor Burrus, Jr.
SPEAKER_01 (22:54):
529s were designed originally to just be for
education and their usage hasexpanded.
Trevor Burrus You can use it foralmost anything.
But then they added the Rothconversion.
If the account is held for 15years, then the money's
conversion, just Roth dopecontribution.
(23:16):
Well they can be moved into aRoth.
They can become Roth they canbecome Roth contributions and
maintain their tax-free status,which is a lovely benefit.
Yeah.
But there's that 15-year holdingperiod.
SPEAKER_02 (23:30):
So that means that would you have to have the Roth
set up at a very early age for ayoung person to be able to take
it out and move it to a Roth529, pardon me, very young, so
that you can take it out andmove it to a five uh Roth IRA,
pardon me.
I know I'll get this righteventually, uh, when they're in
their twenties, hopefully.
Right.
SPEAKER_01 (23:49):
So if they're if they're twenty-one years old and
they've got a job and they wantto move money from their 529
into the Roth, that money neededto be put into the Roth, the
money that they'd be moving whenthey were six.
SPEAKER_02 (23:59):
Yeah.
SPEAKER_01 (24:00):
It had to have been there for when they were six.
But what if you give the becauseyou're allowed to change the
beneficiary of a plan.
What if you decide, well, it I'mgiving it to the six-year-old,
but ten years later you go, youknow what, I think I'm gonna
give it to this three-year-oldthat was just.
Or I'm gonna give it to thisten-year-old of the for this
(24:21):
other, you know, this othergrandkid, because I don't like
this kid anymore.
Uh they're a deadbeat.
Whatever.
Uh what happens to that 15-yearholding period?
SPEAKER_02 (24:30):
Does it start over again?
SPEAKER_01 (24:33):
We don't know.
SPEAKER_02 (24:35):
This is one of those things again where we have to
figure it out.
SPEAKER_01 (24:39):
This is where our government sort of spaces out.
They write these and and ifyou've ever seen a printed bill
from Congress, they they areliterally usually inches thick.
And in all of those inches ofpaper, literally it looks like a
ream or two of paper.
(24:59):
Nowhere in there did somebodythink, well, what if you change
beneficiaries?
Does the 15-year holding periodhave to restart?
Wait, so there's not an inchthick one on that as well?
No, they haven't determined thatyet.
They're saying they're supposedto determine that soon, but they
haven't.
So you want to if to be safe, ifyou want a kid to convert and
(25:22):
you've got like 12 yearsalready, or 10 years, or
whatever, don't change thebeneficiary just yet.
It's gonna make it.
Leave it alone, or you mayrestart the clock.
We do not know, but you mightrestart the clock.
Don't do it.
SPEAKER_02 (25:36):
Yeah.
It's that thick.
I it fascinating.
I was watching a uh documentaryon the first world war because I
don't know much about it.
My wife asked me a question.
I was like, I don't really knowthat.
She goes, Well, you knoweverything.
I not that.
So they're famously when the USArmy was tasked with I think
attacking Bretton Woods, one ofthe big battles of World War II,
(25:58):
World War I, pardon me.
The French had a 600-page battleplan for the attack.
By the way, they also had a400-page uh plan for being going
on the defensive.
So I guess he went to thebiggest.
SPEAKER_01 (26:10):
Wonder that war dragged dragged on for years and
years and years.
SPEAKER_02 (26:15):
You just go that direction and kill anybody in
your way.
But anyway.
So yeah, that's ridiculous.
But be I I agree with you.
Be conservative there so it allworks out.
SPEAKER_01 (26:24):
If if the goal you got this extra money and you're
going, I want that kid toconvert to be able to put that
in a Roth, well, don't changebeneficiaries on them.
You could really could.
Maybe it won't.
We don't know.
Literally, we don't know.
But it's important for you toknow that we don't know so you
don't know, so that you knowwhat you don't want to do.
SPEAKER_02 (26:43):
I have to write that down and then read it a couple
times and make sure I got thatstraight.
But it sounds good.
SPEAKER_01 (26:48):
Yeah.
If you have any questions forus, send them in.
Talkingrealmoney.com, hit the uhask a question button.
Or if you like, speak them.
Just click the mic in the lowerright hand corner.
Those will go on the Friday QApodcasts that I do.
And if you want to have ameeting with one of our 100%
fiduciary advisors, whichincludes Tom, by the way, just
because he likes doing them, yougo to talkingrealmoney.com and
(27:11):
you click on the button thatsays meet an advisor, and you
can meet with an advisor at nocost.
And they're not gonna try andsell you anything.
You're just gonna get to getsome information for nothing.
So go do that.
And um anything else you want toplug while we're here.
Shameless plug.
SPEAKER_02 (27:29):
Yeah, I do.
Yeah.
I will say it again.
I've said it several times.
I've read it, I bought a bunchof copies to give to my friends.
Read, purchase first, then readthe line uncrossed.
Purchase first, then read.
That might be my suggestion.
Uh, I'm sure there's bootlegcopies up there you couldn't
have to pay anything for, butlet's line Don's pocket a little
bit just to be sure.
(27:50):
Are there bootleg copiesalready?
Probably.
Probably not.
I haven't looked.
Used.
I should go put mine up.
Used copy of lost.
SPEAKER_01 (27:57):
My pocket doesn't line all that much.
I think the hardcover gives mefive dollars and fifty cents.
Okay.
And the Kendall book gives meabout three bucks.
SPEAKER_02 (28:05):
We were just we were just saying something about
saving money in your retirement.
I mean spending money inretirement.
Go free.
Feel free.
Go crazy.
Go on and have a big cup ofcoffee or something.
SPEAKER_01 (28:14):
Um and um be feel free to leave a review.
Love it or hate it.
Hopefully you love it, but leavea review on Amazon because those
do uh help people find things.
Did we cover everything?
SPEAKER_02 (28:27):
I think we covered everything today.
SPEAKER_01 (28:28):
Thank you all for being there.
We really do appreciate you, andwe hope you'll tell some friends
or ten.
And be here almost every day,even though it's summer and we
don't have as many questions,because even if you don't ask
questions, we well, we'll try tobe here, except when on
vacation, talking real money.
SPEAKER_00 (28:47):
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 oursubjects change without notice,
including any forward-lookingestimates or statements which
are based on certainexpectations and assumptions.
Although information andopinions given have been
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no warranty or representation ismade as to their correctness,
(29:08):
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The views and strategiesdescribed may not be suitable
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This podcast does not identifyall the risks, direct or
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(29:34):
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(29:56):
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(30:18):
podcast.
You're gonna do a really great financial future.
Tom and Don are talking realmoney.
SPEAKER_01 (00:12):
Tom, you're elderly.
Spend your damn money.
You're you are.
Face it.
I know you hate it.
I hate it too.
I was just having thisdiscussion with my wife this
morning.
She's going, I'm old.
I said, Yes, you're old.
Get over it.
SPEAKER_02 (00:26):
You know when I when I really feel it?
I I so you know this so wellbecause every day, all the day
there's the pain of that.
But the but when I see thepictures, for example,
yesterday, um, as you know, Iwent into the lake at 59
degrees.
SPEAKER_01 (00:42):
Uh we shot the water still 59 degrees in June.
unknown (00:46):
No.
SPEAKER_02 (00:47):
But it's fed from springs above or something.
But um, when I got out, my wifeshot a video because we wanted
to prove to my daughter becausethe challenge was you're gonna
go in.
So this was shot in May.
So I told her, I go in everyMay.
Well, blah, blah.
Anyway, so I saw the video andI'm looking going, Who's the old
guy?
It's like, uh, that's you, sir.
It's painful, man.
(01:08):
Painful.
So yeah, I know.
Spend your money, you're old,because uh you can't take it
with you.
SPEAKER_01 (01:13):
Yeah, and that's a thing uh these days.
It really is.
A lot of folks who have beenvery successful earners and
savers and investors are gettinginto retirement and they're
afraid to spend, Tom.
Now you understand this becauseyou're one of them.
SPEAKER_02 (01:34):
I know.
Uh uh, you know, I uh you trustme, you're not the only one
saying this in my ear.
I got other people.
SPEAKER_01 (01:40):
I think you probably have one other person
particularly.
SPEAKER_02 (01:43):
Yeah, the the the younger, because she knows we're
getting ready to spend a lot onher education, which is which is
great because she's we saved alot.
We've got we're in good.
SPEAKER_01 (01:51):
You find twenty-nine most of that, though.
Well, not most.
SPEAKER_02 (01:54):
It's about half.
SPEAKER_01 (01:55):
Well, that's still a lot.
SPEAKER_02 (01:58):
It's about a quarter of retirees who say they are not
confident that they have enoughmoney.
So that means 75% believe theyare, right?
Have enough money.
And these things change.
I personally, this you took thisnext year during a bear market,
you're gonna get the opposite,my take.
Oh, running out of money, it'snot gonna last, right?
(02:19):
Right.
Uh, but everybody basically inretirement, because we talk to a
lot of people, has well, youknow FOMO, right?
Fear of missing out.
SPEAKER_01 (02:26):
Right.
SPEAKER_02 (02:27):
How about fear of running out?
Full full row.
Foro.
Oh my gosh.
SPEAKER_01 (02:32):
Another four there's fear of losing out.
That's folo, fear.
Fear of running out, fear ofmissing out.
Yep.
Oh my gosh.
SPEAKER_02 (02:41):
Anyway, so uh let's talk, let's let's unpack this a
little bit.
SPEAKER_01 (02:45):
Fear of dying out.
SPEAKER_02 (02:46):
Yeah, well, you can you can pretty much check that
box, it's coming.
Um, but why?
Why are people who have saved insome cases millions?
Right.
And that's a lot of ouraudience.
They've saved a lot of ouraudience.
I get it.
They they're worried.
Why are they worried?
Because, well, like everybody,how long am I gonna live?
(03:07):
How much is healthcare gonna be?
How's the economy?
How's the market?
Am I gonna make you know 10% ayear every year?
No, you're not.
Um, to get over it.
And and still, you and I havehad this discussion.
We have different feelings aboutit, but basically, everybody I
talk to one-on-one says, I wantto leave something to my kids.
SPEAKER_01 (03:27):
The ingrates.
Why would you want to do that?
SPEAKER_02 (03:29):
You already left something.
Did they earn it?
Well, kinda, in my case, becausethey had to be around me all
these years.
SPEAKER_01 (03:36):
Well, but they also got the benefit of that, too.
There was your wisdom and yourcharming personality.
SPEAKER_02 (03:43):
Wow.
SPEAKER_01 (03:43):
That's what I meant.
I didn't mean the fact that youmake good money.
SPEAKER_02 (03:46):
Oh, I thought it was just about the fact that the
lights are still on.
SPEAKER_01 (03:50):
Um I appreciate it.
SPEAKER_02 (03:54):
This is a fascinating topic, though,
because for most people that wetalk to, because people who
haven't saved anything generallydon't call us because there's
not that much to talk about.
It happens sometimes.
I get calls from people who arefifty-five and they're saying,
What should I do?
And I say, put your head down,get to work, save this much,
invest it properly, and giveyourself a shot at you know 70.
(04:14):
It does happen.
So you shouldn't give up.
SPEAKER_01 (04:16):
By the way, by the way, it can happen.
Absolutely.
It's just more work if you waitlonger, but it still can be
done.
I had to start over at 50.
SPEAKER_02 (04:26):
You know that.
Well, we both kind of did.
Yeah.
SPEAKER_01 (04:28):
I mean, it was uh it was in our fifties.
SPEAKER_02 (04:31):
Gave away a lot of money to somebody else, had to
start over, blah, blah, blah.
It was not pretty.
SPEAKER_01 (04:36):
So But but i it it's the folks who are are in their
sixties or their seventies nowwho are putting off spending for
what?
SPEAKER_02 (04:48):
Well, uh for the aforementioned worries about
health care, whether themarket's going to provide, et
cetera.
It's six of ten people who havefive hundred thousand or more
saved that a decade later stillhave basically all that money.
They haven't spent it.
And and we do encourage people,you've come to my office, I've
talked to you, to spend yourmoney.
Um, I think the other part is ofthis that I see, and maybe this
(05:11):
is part of my problem, is I Ithink I'm gonna live forever
because the only reality I knowis the one with me in it.
So I'm like, well, I'll spend itlater.
SPEAKER_01 (05:18):
Oh, I thought of another OLO that goes with this.
Yeah, please.
When it comes to your money,remember, you truly do.
We talked about this with photo.
YOLO, you only live once.
SPEAKER_02 (05:31):
Yeah, that's a good point.
SPEAKER_01 (05:33):
You don't get a second chance to spend the
money, and I'm telling you.
When you're in your nineties, mmost of us.
I mean, okay, there may be thethe amazing uh exception to the
rule, but most of us are gonnabarely be getting up out of our
wheeling chair.
(05:53):
I know I visited my mother inthe nursing home.
They're all these 90 your 90somethings are they're they're
not spending it except on healthcare.
SPEAKER_02 (06:02):
Yeah.
So healthcare, that that that'san issue and that should be put
into your plan.
But here's the part that'sperhaps more fascinating.
It it turns out that um whenthey test people about all these
kinds of things, when they theythey sit down and they they say,
What about this?
What about that?
Retirees in an experiment spentless than they could afford,
preferring to live off SocialSecurity, dividends, and
(06:24):
interest rather than dippinginto the principle of their
savings.
So if you get if you're gettingmoney from Social Security,
which if you're retired, I hopeyou are, although depends on
your plan.
If you have a pension as well,people have a tendency to feel
good because that's that's aregular paycheck.
That's just like the old days,right?
When I was working, I'm gettingthese checks, they're coming
into my account, I'm spendingthat money.
SPEAKER_01 (06:44):
People have interest and dividends feel like paycheck
in there.
SPEAKER_02 (06:48):
Exactly.
So there's a guaranteed natureof all that.
Um, and it feels like, as Isaid, like a paycheck.
When it comes to taking moneyout of your accounts and
spending it, um, people justthey they they blanch at it.
They it it it's upsetting tothem because it's like, well,
wait a minute.
That's money, those are mysavings.
I don't want and I used to talkto my mom about this, about she
(07:10):
didn't want to touch theprincipal.
And I always said, Well, let'sjust go through the fan.
You got lawyer, lawyer, collegeprofessor, and I'm the black
sheep as the you know, financialadvisor.
Um, you know, so they're alllook like they're gonna be okay.
So really leaving money toothers is not necessary, but she
ended up dying, and yes, leavingmoney to others and not in the
(07:31):
middle of the year.
SPEAKER_01 (07:32):
But it wasn't millions, it wasn't seven
figures.
SPEAKER_02 (07:35):
No, it wasn't seven figures.
Nope, it wasn't.
SPEAKER_01 (07:37):
I think seven figures is counterproductive.
Leaving your kids a few hundredthousand.
Okay, there's no way.
I I joke about spending the lastdollar, but the reality is
there's there's no way you canreally do that effectively.
SPEAKER_02 (07:50):
You raised a very good point, though.
You raised a very good pointaround how long we get.
Um people have a tendency to putthese things like spending on
vacations, like doing thingsthat they wanted to do because
they think I'll do it tomorrow.
Um you may not have tomorrow.
Right.
As painful as that is, but whenyou get to like 70, uh, you
(08:12):
know, how many more years areyou gonna want to go on a plane?
I just ran into a relative whotold me I'm never gonna go to
Europe again.
He's 81 or something.
He said, I just don't, I don't,I don't like it.
I don't like getting on theplane sitting there for 12
hours, it's not comfortable, andI don't want to do it.
I don't want to judge around.
Yeah.
You don't even like flying toSeattle.
SPEAKER_01 (08:30):
No, not unless I'm in the front of the bus.
SPEAKER_02 (08:34):
And even then I don't like it all that much.
Well, travel is not what it oncewas.
But let's talk about some of thethings that might make it easier
for you to spend, right?
SPEAKER_01 (08:43):
Okay.
Okay.
Give me some ideas.
SPEAKER_02 (08:44):
Well, okay, the first one is one that we have
mentioned a few times.
Having a plan, running thenumbers, and see if it all
works.
SPEAKER_01 (08:52):
Because well, because the plan, when it
becomes when you codify theprocess, for example, the taking
money from both your incomestream and your principal or the
gains of your principal, uh, ifyou codify that, then it feels
more like a paycheck and lesslike I'm I'm I'm I'm cashing up
(09:13):
my nest egg.
SPEAKER_02 (09:14):
Yeah, couldn't agree more.
Uh and so yeah, having, and bythe way, you can do this on your
own.
We've talked about this.
You can go to Bolden, there'sother planning sites where you
can do it on your own.
I personally, because I I guessbecause I'm in the industry and
I've seen people even who aredoing their own planning, having
a third party that looks at itand says, Yeah, that works, no,
(09:35):
that doesn't, that can give youa lot of permission, right?
Because they've looked at thenumbers, they said, You're
you're you're gonna be okay,quit worrying so much about
this.
SPEAKER_01 (09:43):
And spend your and you've got somebody else to
blame if it goes wrong.
SPEAKER_02 (09:46):
Yeah.
I hadn't thought that through,but that's good.
How soon till I retire?
Is that like tomorrow?
Uh so uh here's another one.
Um having a set amount of here'sthe way I I want to do it in
retirement.
Having the Social Securityincome, and in my case, because
I probably will still have otherincome before these, the
required minimum distributions.
(10:08):
When you add that to SocialSecurity, I want that to pay the
data to the bills.
SPEAKER_01 (10:13):
So Social Security and the RMDs to pay the bills.
SPEAKER_02 (10:17):
To pay the bills, right?
That that's it.
And then what you could do isthen you have this hopefully
other savings.
I'm gonna have it, Don's got it,hopefully you've got it.
I don't know if you're gonnahave to do that.
That's where you can say that'swhere you can say I'm gonna take
money from that on a you knowfixed or flexible amount, right?
A percentage, to do the otherstuff I want to do for as long
(10:38):
as I want to do it.
That I think is a reasonablestrategy that people could live
with, and it will allow them tospend more than a lot of time.
SPEAKER_01 (10:44):
So what you're saying basically is the premise
behind the flexible withdrawalstrategy.
You're using the requiredminimum distributions and maybe
the income from your bonds andyour dividends and your social
security to pay the bills.
And if you want to do somethinggood and the portfolio's doing
all right, you splurge.
SPEAKER_02 (11:06):
Yeah.
SPEAKER_01 (11:06):
I think you want to do something special.
SPEAKER_02 (11:08):
JP Morgan found that uh people with comparable levels
of total wealth, 60 percent, 60to 80 percent of that wealth
coming from guaranteed sourcesof income.
In other words, like I justmentioned, Social Security,
pensions, that kind of thing,they're more comfortable
spending money because they knowthey have this regular amount
coming in from a sort ofguaranteed by the way, pensions
(11:29):
aren't always guaranteed becausewe've seen places where they
didn't get paid forever.
SPEAKER_01 (11:34):
Would that be one of those cases where maybe, and
we're not big fans, but wheremaybe a single premium income
annuity might make sense?
SPEAKER_02 (11:43):
I think so.
SPEAKER_01 (11:44):
Because it's because then that's the giving, again,
saying here's that income.
That's right.
And now that other money, notfor a hundred percent of your
money, but for a portion of it,to get that that guaranteed to
get that psychological incomestream at a level you feel
comfortable with.
SPEAKER_02 (11:59):
Totally agree.
And this is a plain vanilla, lowfee, not no building.
Joint life.
Yeah, it's not gonna becomplicated.
It's easy, it's it's there, andyou're gonna get it.
So it would be in that case,then your uh Social Security
income, I guess you could throwin your RMDs there, and then
that immediate annuity that issupplying the regular and the so
(12:21):
that comes in, the bills getpaid, maybe there's a little bit
less left to do something elseon top of that.
But it but it gives youpermission, I think, to spend
that money.
And we know that people who aregetting that regular income just
feel better about things.
They don't they don't worryabout uh you know drawing down
their portfolio as much.
We have other people, by theway, that have no we had a guy
who retired a few years ago andhe's been spending like crazy.
(12:42):
So it does happen.
But most people are very carefulabout these things.
Most.
SPEAKER_01 (12:47):
Well, and we're you have to remember one of the
things we panic about is thefact that we're going to be
spending so much on health care,on on advanced care, on uh
nursing care.
But remember, you're also goingto be spending less on other
expenses when you get to thatpoint.
So it may not be as ponderous asan added expense as you think it
(13:10):
is.
And that's something, again, agood plan can sort of inform by
looking at what all of thesecosts might be in retirement and
uh then sort of guessing a bit.
SPEAKER_02 (13:22):
Yeah, there's a bit of that.
Here's the other part of thisthat I think most people
struggle with.
They have a tendency to get shutdown by recency bias.
Whatever's happened in the lastsix months or a year, especially
with their money, they have atendency to extrapolate that.
That's gonna keep happening,right?
Both the spending side, themarket, blah, blah, blah.
Can't make anything in bonds, Iremember a few years ago, et
(13:43):
cetera, et cetera.
That's gonna continue forever.
Nothing continues forever.
You need to look at retirementas a 20 to 30 year situation,
right?
As uh project it and not getworried.
This I see this a lot wherepeople retire, market goes down
a little bit.
Oh, I'm gonna shut down mydistributions.
I'm not gonna do that this year,I'm not gonna do that.
Remember, this is gonna go onfor a long time.
(14:05):
So you can't just say the lastsix months are going to equal
what the retirement's going tolook like.
Yes, so having the plan can giveyou permission.
I love sort of the fixed incomesources, and maybe you're right,
Don, you include an annuitythere that pays the regular
bills because that gives you thecomfort of knowing that
everything's taken care of.
SPEAKER_01 (14:21):
And then I spiel I spoke blasphemy almost.
Which was?
I said annuity.
SPEAKER_02 (14:26):
I yeah, I know.
You're gonna we're gonna takeyou out back and give you the
lash after this, and you'll welldeserve it.
Don is now, for those of you whodon't know, in addition to a
great author, he sells annuitieson Sunday, so you've got to call
a special number for that.
SPEAKER_01 (14:38):
Uh fixed indexed annuities.
SPEAKER_02 (14:41):
Fixed indexed annuities.
So those things can help, but atthe end of the day, it this is
um this is not easy for mostpeople that have been savers
because it's just a mentality.
It it's just who you are.
You've always been my dad wasrelatively cheap.
I mean, he wore the same pair oftennis shoes for 25 years, etc.
(15:01):
He drove Chevrolet Vega.
I mean, a doctor driving around.
SPEAKER_01 (15:06):
No, he was he was a depression baby.
SPEAKER_02 (15:08):
He was, yeah.
So most of those people are gonenow.
Most, not all, but pretty much.
Well, we just looked up thenumber of a living U.S.
World War II veterans.
SPEAKER_01 (15:17):
It isn't very many.
SPEAKER_02 (15:18):
It's tiny, tiny, tiny out of the 1.6 million that
served.
SPEAKER_01 (15:21):
So it's larger than the number of Civil War veterans
left, though.
SPEAKER_02 (15:25):
Which is you're more interested in because they might
buy your book.
SPEAKER_01 (15:28):
Maybe just insane.
SPEAKER_02 (15:29):
Which I still love.
SPEAKER_01 (15:31):
Sales haven't been as you know, they haven't been
blockbuster, but they've beengood.
They've been good.
SPEAKER_02 (15:35):
Telling you what, you should read it.
So three or four, three or foura day.
Have the plan, consider the wayto pay the regular bills, and
think of this in a long-termnature.
This is not something that'sgoing to be the next year or
two, and in my case, evenlonger, because my wife's
younger, I expect her to livelonger.
She's going to need the moneyfor a whole bunch more after I'm
gone.
(15:56):
And she is the spender in thehousehold.
And yes, regularly she does say,you should just why are you
being so cheap about things?
You know, you got the money.
And my take is, yeah, buthealthcare markets.
SPEAKER_01 (16:07):
You're going to be on a spending spree with her on
this uh European vacation, youand Chevy Chase and the family.
SPEAKER_02 (16:15):
God, we hope we're not going to reenact that
debacle.
So anyway, those are goodthings.
SPEAKER_01 (16:20):
It is, by the way, it is the warm season of the
year, even though the water isstill cold for Tom anyway.
And you know, it's funny thingabout the warm season, the world
tends to slow down.
And we've mentioned this everysummer.
The world slows down.
And the number of questions wereceive at talkingrealmoney.com
slows down a little bit.
(16:41):
Really?
Which is why our new thing thatwe started a few months ago when
we killed the radio show hasalso waned along with it.
And that's Tom's calls with you.
His conversations with you havewaned because the number of
typed up questions has fallenpretty precipitously.
So uh if you want those to comeback anytime soon, you need to
(17:04):
start asking some questions.
And you need to go totalkingrealmoney.com to do that
and just go to that button thatsays ask a question.
It's right there at the top ofthe page.
Just ask a question, type themup.
If it's a if it's an appropriateone, Tom's gonna get on the
phone with you and we'll use itin the show.
Otherwise, he's just going toturn them into bits of pulped
(17:24):
tree and uh under underincandescent, old-fashioned
incandescent Edison bulbs,because he's a Luddite.
SPEAKER_02 (17:34):
Those are new bulbs there.
Come on.
SPEAKER_01 (17:35):
Are you sure?
SPEAKER_02 (17:36):
I don't know.
I'm not sure.
SPEAKER_01 (17:37):
You actually have LEDs now.
SPEAKER_02 (17:39):
You know, and thanks to you, I just got off a call
where a guy who called metechnologically challenged.
I said, you can't say that inour first conversation.
That's like a third conversationkind of thing.
But you are.
Okay, I guess so.
I don't know where these slidescame back.
So sorry facing up.
SPEAKER_01 (17:53):
I hate to do this to you, but you don't.
That's not the point.
You don't hate to ask thequestion.
Uh so What's the question?
This means the show will beshorter, so that's good.
SPEAKER_02 (18:03):
Hopefully, we'll hopefully we'll have a good
answer.
And in this case, uh hopefullyhave a solution, because this
question comes from saline,Michigan.
Do you like that?
Saline solution.
Uh Eric writes Oh, saline, likesaline like salty.
Yeah, right.
Yeah.
Okay.
So hopefully we'll have asolution.
Um thank you.
That was a real stretch for ajoke.
But aren't they all?
(18:24):
Hi, found you guys four monthsago and have listened to every
episode since.
So thank you for that.
SPEAKER_01 (18:29):
We we appreciate that.
You only have about 1,800 backto go.
SPEAKER_02 (18:33):
You got a little catching up to do, as they say.
My question about setting up aRoth for my 19-year-old daughter
with her summer job money.
By the way, interesting aside, Ijust read in the Wall Street
Journal that summer jobs thisyear are really tough for
teenagers, hard to find one.
So um, my daughter, of course,has been working very hard at
the local pizza place, buthopefully uh it works out for
(18:54):
your daughter.
SPEAKER_01 (18:54):
I was thinking about it It's all your fault because
you mow your own darn lawn.
You don't let the neighborhoodkids do it.
See, you're hurting the economy.
SPEAKER_02 (19:01):
Taking everybody down with it.
Uh my thinking is opening it atM1 Finance with 25% in each of
the following.
A V L C, which is the AvantisLarge Cap, A V U V, which is the
Avantus US small cap value,AVIV, which is the
international, and A V D S,which is another, they think
it's the international small.
SPEAKER_03 (19:22):
Yeah.
SPEAKER_02 (19:22):
Um, question Is M1 a good choice?
I like their easy rebalance toolfor my daughter.
And would you change any of thefour ETFs?
Truly open to your advice, notjust looking for assistance that
I know what I'm doing.
Thank you so much for all youdo, guys.
You guys do.
SPEAKER_01 (19:37):
Here's the thing.
I think you're making unlessthis is a learning experience,
unless that was the the intent,you're making this too hard for
a small account.
It's a small account.
Thank you.
It should just be A V G E or A VG V.
SPEAKER_02 (19:56):
Yeah.
E or V at the end, or because welove them equally, uh like your
children, uh D F A W would be.
SPEAKER_01 (20:04):
Or D F A W and And then the the the rebalancing
becomes truly automatic.
You don't even have to thinkabout it.
And given the size of this, Idon't see a bit unless you want
to increase the internationalallocation.
SPEAKER_02 (20:21):
Because you're getting less than 40 percent,
right?
SPEAKER_01 (20:23):
Yeah, it's a 30-something percent uh with
Avantis and DFW.
I think DFW is a little higher,DFAW is a little higher than
Avantis, a little.
But they're both in thatthirties range.
Unless you wanted to go 50-50like I like.
I like 50-50.
SPEAKER_02 (20:38):
Paul, by the way, Paul Merriman still does 50-50,
so you guys are in the sameasset allocation pool.
SPEAKER_01 (20:45):
So that would be the only reason to do this other
allocation.
The force the fore fund.
And the thing you're missingwith the fore fund, well, you're
missing a few things, but thething you're really missing is
emerging.
You got no emerging.
SPEAKER_02 (20:58):
Which I know Don't get mad, but it's been a hot
asset class the last year orsomething.
SPEAKER_01 (21:03):
Well, and that's the thing, is that it becomes a hot
asset class when you leastexpect it will be.
SPEAKER_02 (21:08):
You're too late.
SPEAKER_01 (21:09):
You just want to always be there.
We're never telling you to timeit and to try to be in the right
place at the right time.
You just always want to be therebecause being there means you
get to pro you get to takeadvantage of the good times,
which are unpredictable.
Trevor Burrus, Jr.
SPEAKER_02 (21:24):
Yeah.
You don't know when they'regonna show up.
It's like the US small cap valuepremium.
It just uh all of a sudden it'sthere one day and then it's
gone, but you gotta be in it allthe time.
SPEAKER_01 (21:32):
Well, we went through over a decade on this
show where people were saying,Why are we buying value stocks?
They're not doing anything.
Why are we buying small?
They're not doing anything.
Because they don't always dothings.
SPEAKER_02 (21:44):
You gotta be patient.
So and I don't know M1, I knowPaul Merriman.
Paul loves M1, but I don't Idon't know what the costs are
associated with that.
SPEAKER_01 (21:53):
There's no costs.
SPEAKER_02 (21:54):
Okay.
SPEAKER_01 (21:54):
So you can buy you can buy those funds the same as
you could go buy anything elsetoday.
It's just a much smallercustodian.
SPEAKER_02 (22:00):
So um that would be keep it simple.
Yep.
SPEAKER_01 (22:03):
Be more maybe a little more diversified and
again um And the auto rebalancein this case i again if the goal
is to get more internationalexposure then the auto rebalance
at M1 would make sense.
SPEAKER_02 (22:15):
And I think with AVGE, is it rebalanced like
every day?
Yeah, it's always rebalancing.
Okay.
SPEAKER_01 (22:22):
So money comes in, they're constantly rebalancing
as money's coming in.
SPEAKER_02 (22:25):
There you go.
So I think Eric that would bethe simpler one, and I hope
that's the right solution forSaline, Michigan.
SPEAKER_01 (22:30):
It's a decent solution.
unknown (22:32):
Okay.
SPEAKER_01 (22:32):
But it's not salty.
SPEAKER_02 (22:34):
Sorry about that.
I'm sorry.
SPEAKER_01 (22:36):
You're not feeling salty in Saline.
Let's see.
Oh, one other thing we wanted todo.
Yeah, speaking of no speaking ofuh Roth IRAs.
One of the big advantages to 529plans is the silly little thing,
which which is a good thing.
SPEAKER_02 (22:51):
It's silly.
SPEAKER_01 (22:52):
It is silly.
It makes no sense.
SPEAKER_02 (22:53):
Trevor Burrus, Jr.
SPEAKER_01 (22:54):
529s were designed originally to just be for
education and their usage hasexpanded.
Trevor Burrus You can use it foralmost anything.
But then they added the Rothconversion.
If the account is held for 15years, then the money's
conversion, just Roth dopecontribution.
(23:16):
Well they can be moved into aRoth.
They can become Roth they canbecome Roth contributions and
maintain their tax-free status,which is a lovely benefit.
Yeah.
But there's that 15-year holdingperiod.
SPEAKER_02 (23:30):
So that means that would you have to have the Roth
set up at a very early age for ayoung person to be able to take
it out and move it to a Roth529, pardon me, very young, so
that you can take it out andmove it to a five uh Roth IRA,
pardon me.
I know I'll get this righteventually, uh, when they're in
their twenties, hopefully.
Right.
SPEAKER_01 (23:49):
So if they're if they're twenty-one years old and
they've got a job and they wantto move money from their 529
into the Roth, that money neededto be put into the Roth, the
money that they'd be moving whenthey were six.
SPEAKER_02 (23:59):
Yeah.
SPEAKER_01 (24:00):
It had to have been there for when they were six.
But what if you give the becauseyou're allowed to change the
beneficiary of a plan.
What if you decide, well, it I'mgiving it to the six-year-old,
but ten years later you go, youknow what, I think I'm gonna
give it to this three-year-oldthat was just.
Or I'm gonna give it to thisten-year-old of the for this
(24:21):
other, you know, this othergrandkid, because I don't like
this kid anymore.
Uh they're a deadbeat.
Whatever.
Uh what happens to that 15-yearholding period?
SPEAKER_02 (24:30):
Does it start over again?
SPEAKER_01 (24:33):
We don't know.
SPEAKER_02 (24:35):
This is one of those things again where we have to
figure it out.
SPEAKER_01 (24:39):
This is where our government sort of spaces out.
They write these and and ifyou've ever seen a printed bill
from Congress, they they areliterally usually inches thick.
And in all of those inches ofpaper, literally it looks like a
ream or two of paper.
(24:59):
Nowhere in there did somebodythink, well, what if you change
beneficiaries?
Does the 15-year holding periodhave to restart?
Wait, so there's not an inchthick one on that as well?
No, they haven't determined thatyet.
They're saying they're supposedto determine that soon, but they
haven't.
So you want to if to be safe, ifyou want a kid to convert and
(25:22):
you've got like 12 yearsalready, or 10 years, or
whatever, don't change thebeneficiary just yet.
It's gonna make it.
Leave it alone, or you mayrestart the clock.
We do not know, but you mightrestart the clock.
Don't do it.
SPEAKER_02 (25:36):
Yeah.
It's that thick.
I it fascinating.
I was watching a uh documentaryon the first world war because I
don't know much about it.
My wife asked me a question.
I was like, I don't really knowthat.
She goes, Well, you knoweverything.
I not that.
So they're famously when the USArmy was tasked with I think
attacking Bretton Woods, one ofthe big battles of World War II,
(25:58):
World War I, pardon me.
The French had a 600-page battleplan for the attack.
By the way, they also had a400-page uh plan for being going
on the defensive.
So I guess he went to thebiggest.
SPEAKER_01 (26:10):
Wonder that war dragged dragged on for years and
years and years.
SPEAKER_02 (26:15):
You just go that direction and kill anybody in
your way.
But anyway.
So yeah, that's ridiculous.
But be I I agree with you.
Be conservative there so it allworks out.
SPEAKER_01 (26:24):
If if the goal you got this extra money and you're
going, I want that kid toconvert to be able to put that
in a Roth, well, don't changebeneficiaries on them.
You could really could.
Maybe it won't.
We don't know.
Literally, we don't know.
But it's important for you toknow that we don't know so you
don't know, so that you knowwhat you don't want to do.
SPEAKER_02 (26:43):
I have to write that down and then read it a couple
times and make sure I got thatstraight.
But it sounds good.
SPEAKER_01 (26:48):
Yeah.
If you have any questions forus, send them in.
Talkingrealmoney.com, hit the uhask a question button.
Or if you like, speak them.
Just click the mic in the lowerright hand corner.
Those will go on the Friday QApodcasts that I do.
And if you want to have ameeting with one of our 100%
fiduciary advisors, whichincludes Tom, by the way, just
because he likes doing them, yougo to talkingrealmoney.com and
(27:11):
you click on the button thatsays meet an advisor, and you
can meet with an advisor at nocost.
And they're not gonna try andsell you anything.
You're just gonna get to getsome information for nothing.
So go do that.
And um anything else you want toplug while we're here.
Shameless plug.
SPEAKER_02 (27:29):
Yeah, I do.
Yeah.
I will say it again.
I've said it several times.
I've read it, I bought a bunchof copies to give to my friends.
Read, purchase first, then readthe line uncrossed.
Purchase first, then read.
That might be my suggestion.
Uh, I'm sure there's bootlegcopies up there you couldn't
have to pay anything for, butlet's line Don's pocket a little
bit just to be sure.
(27:50):
Are there bootleg copiesalready?
Probably.
Probably not.
I haven't looked.
Used.
I should go put mine up.
Used copy of lost.
SPEAKER_01 (27:57):
My pocket doesn't line all that much.
I think the hardcover gives mefive dollars and fifty cents.
Okay.
And the Kendall book gives meabout three bucks.
SPEAKER_02 (28:05):
We were just we were just saying something about
saving money in your retirement.
I mean spending money inretirement.
Go free.
Feel free.
Go crazy.
Go on and have a big cup ofcoffee or something.
SPEAKER_01 (28:14):
Um and um be feel free to leave a review.
Love it or hate it.
Hopefully you love it, but leavea review on Amazon because those
do uh help people find things.
Did we cover everything?
SPEAKER_02 (28:27):
I think we covered everything today.
SPEAKER_01 (28:28):
Thank you all for being there.
We really do appreciate you, andwe hope you'll tell some friends
or ten.
And be here almost every day,even though it's summer and we
don't have as many questions,because even if you don't ask
questions, we well, we'll try tobe here, except when on
vacation, talking real money.
SPEAKER_00 (28:47):
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 oursubjects change without notice,
including any forward-lookingestimates or statements which
are based on certainexpectations 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,
(29:08):
completeness, or accuracy.
Information presented on thepodcast is not personalized
investment advice from Apello.
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.
(29:34):
The podcast is not trying to getyou to buy or sell any financial
products or securities.
Instead, the program is providedas a public service by Apello
Wealth, a fee-only registeredinvestment advisor.
Please see Apello Wealth ADBPart 2A on our website for
information regarding Appellosfees and services.
Apelled Capital, LLC, DBA ApelloWealth, is an investment
advisory firm registered withthe Securities and Exchange
Commission.
The firm only transacts businessin the states where it is
(29:56):
properly registered or excludedor exempt from registration
requirements.
Registration with the FCC or anyState Securities Authority does
not imply a certain level ofskill of training.
Apello does not provide tax orlegal advice, and nothing either
stated or implied here should beinferred as providing such
advice.
Thanks for listening, and pleasevisit talkingrealmoney.com for
more information and importantdisclosure related to
performance of any specificindex or fund quoted in this
(30:18):
podcast.
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