Simply Money

Episode Transcript

(00:00):
And The Ramsey Show. What you'rerunning into is what you want versus reality
week Days at seven fifty five Arc. Tonight, We've got the top questions
you need to ask your financial advisorand we'll tell you how we would answer

(00:22):
them. You're listening to Simple Moneybecause I'm by all Worth Financial. I
mean you Wagner along with Steve Ruby. I think we should start the show
off by kind of level setting here, Steve, because you know I've been
We've both been doing this for along time. I've got had the privilege
of speaking in front of a numberof groups of people about money, and
I always ask the same question first, how many of you grew up in

(00:44):
a house where you talked openly aboutmoney, and maybe in a room full
of fifty people, there's one ortwo. And then I'll ask the follow
up question, how many of youhad a class in high school or college
dealing with personal finance? Usually acouple of hands. Yeah, So most
people go into adulthood and dealing withmoney with very little background, and so

(01:07):
you don't even necessarily know the questionsto be asking the person that you're working
alongside with and trusting with your money. And I don't know why that is,
but I think so many people arealmost like afraid to admit they don't
know, so they're also afraid toask some really good, tough, deep

(01:29):
questions when it comes to working withan advisor. Yeah, and it's very
important to come into these meetings.The first time you're ever meeting with a
financial advisor, it might be intimidating. It's crossing a new threshold that you've
never been across before. In noparticular order, there's a series of questions
we want to go through. Firstone, what is your approach to financial
planning? What does that really mean? Understanding what you're getting out of that

(01:52):
relationship from thirty thousand feet is extremelyimportant because there's there's different kinds of advisors
out there. And talked about thisa lot over the years. If you
go to a brokerage firm, adiscount brokerage firm, then you're going to
get the products and solutions offered bythat firm. If you go to an
insurance company, it's you know,we have a size six, you wear

(02:13):
a size eight, will make itwork, and they'll do it using only
insurance solutions. If you go toa registered investment advisory firm. This is
where oftentimes you're going to be sittingacross the table from a fiduciary financial planner,
a credentialed advisor CFP, CFA.There's a couple of others that you
want to look for that actually divedeep into financial planning. I love that

(02:36):
you started there because I absolutely agreemost financial advisors using that word or that
title don't necessarily mean the same thing, and they can work for very different
companies that have very different ways ofhelping you plan for retirement. In the
fiduciary, being the one who putsyour best interests ahead of theirs, I

(02:57):
think is probably the best fit formost us long term. And then when
you look at this question of what'syour approach to financial planning, you're not
asking how are you going to managemy investments? Because we do have a
number of people that come through thedoor and that's their only focus. What
kind of return can you get me? And I don't think that if you
are looking for a long term relationshipwith a financial advisor, that should be

(03:21):
the first question. The first questionshould be how do you plan? What
does a plan look like? Andwhat does this relationship look like? Yes,
the investment part of it is apiece of it, but it's really
a small piece compared to everything else. The financial plan is the blueprint to
how your money will work for you. Your investments are the building blocks.

(03:43):
The more building blocks you have,the more robust your financial plan can be.
I'll be the first to admit itobviously can be a little bit intimidating
the first time you sit down andmeet with an advisor, especially when you
get the follow up homework, becausewhen we're partnering, and this is oftentimes,
you know, kind of an industrystandard when we're doing real financial planning
because it doesn't just look at investments. It looks at a state planning,
It looks at insurance, it looksat debt management, cash flow, tax

(04:09):
tax taxing strategies. Yeah, andyou know, the homework assignment when somebody
decides that they want to partner withsomebody that does holistic financial planning is daunting
because we need statements for your investments, savings accounts, thoughts about current and
future spending goals, insurance docks,estate planning documents. The more information we
have, the better we are equippedto then help provide you with guidance and

(04:32):
advice on your investments. Because whenyou talk about when you talk about needing
those things, I think it's importantto say that we also understand that we
are asking you to get naked financially. Yeah, we're asking you to bear
it all. And for some peoplethat's incredibly uncomfortable. Right. There's debt,
there's past bad decisions with money,and we're asking you to put it

(04:56):
all out on the table. Andwe understand that that you know, can
be can feel embarrassing. But firstof all, like your doctor, we
have seen it all and we can'treally help you until we fully understand your
picture, your full financial picture,so that financial plan and you're talking about
the homework. But the first fewsteps in this process can be a little

(05:17):
bit uncomfortable, maybe from your perspectiveas you come to the table, But
it doesn't have to be, youknow. I mean, if you're truly
seeking help, people want to helpyou. But we have to have that
information, yeah, and we usethat information to help with the investments.
So the next thing you want todo, you want to have an understanding
when you're working with a financial advisorwhat their investment philosophy is because there's obviously

(05:43):
a ton of different ways to builda portfolios from. Again from thirty thousand
feet. Strategic acid allocation looks atyour long term financial needs and goals,
finds the optimal asset allocation for youbased on your risk tolerance, and doesn't
typically make a whole lot of shifts. We're not trying to time the market.
A lot of advisors believe that themarkets are already efficient, so using

(06:05):
low cost exchange traded funds, forexample, to cast a wide net and
maybe some small tactical shifts here andthere, as opposed to some people are
expecting their advisors to have a crystalball, pull them out of the market,
put them back in the market,pull them out, put them back.
That's not typically how it works.But there are those out there that

(06:25):
will say they can do it.Yeah. Well, and I think if
those people are saying they can doit, you probably want to run fast
in the other direction. I mean, I've heard from people who've worked with
advisors who've said they promised me atwelve percent return every year and no downside,
and then they later find out that'sactually a Ponzi scheme and that doesn't

(06:46):
really exist, right, So anyonemaking promises like that you need to run
fast in the other direction. ButI'll tell you too, you know,
at all words, we kind oflook at it like we're trying to figure
out if we're a good fit foryou, and also if you're a good
fit for and if you're someone who'sconstantly chasing returns and you want to time
the market, that's not what wethink is the best thing for you.

(07:06):
So we probably it's not going tobe a great fit for us because we
think that the long term financial planmakes the most sense. And for anyone
who listens to the show very often, one of the huge benefits that we
have is we have truly I mean, he's I really think he's pretty brilliant
Andy Steller chief investment Officers, who'smaking these decisions on investments that he's taking

(07:27):
in like reams and reams of informationevery week and you know, in digesting
it and figuring out what the bestinvestment philosophy for our investors are. But
you know, he'll tell you everyMonday when he's on the show, regardless
of whatever the economic data is comingin that week, we're not making huge
changes in anything that we invest inbecause we don't think that's the answer for

(07:49):
the investors that we work with.Yeah, that's a good point, because
pulling in and out of the marketit's not the way to get it done.
Nobody has that crystal ball, youknow, Andy Stout and the investment
can make behind them. They makethe hard decisions about the investment strategies.
Building the financial plan will tell ushow much at the end of the day,
the financial plan we want to helpprotect your net worth, grow it

(08:11):
and make sure that you can livethe lifestyle that you've grown used to continue
to live that lifestyle too and throughretirement, and make sure that your money
lasts longer than you do. Obviously, the investments are part of that,
but it's not the only thing tohelp us achieve that, you know,
And there's also some groundwork that youcan do here. Before you sit across
from someone and I say, thefirst place you go is brokercheck dot org,

(08:33):
because you can have you know,someone coming to you saying, oh,
I work with this advisor. They'regreat, great returns, blah blah
blah, and they might actually havesome past issues that they've been disciplined for
that you have no idea about thatyou know, aren't necessarily going to be
disclosed to you if you're sitting acrossfrom them. So I think that's where
you start when you're looking to workwith an investment advisor, because you would

(08:56):
be shocked. I mean, youknow how many people out there in our
industry unfortunately aren't necessarily always operating onthe app and app. So I think
that's kind of where you start,and then you can ask them additional questions
about their credentials and how they operateand their philosophies, also understanding what the
relationship will really look like moving forwards. For example, how often are you

(09:20):
meeting when we're building a holistic financialplan. I'm pretty honest with the folks
that I begin relationships with. Isay there's six to eight meetings in the
first year two years where we're coveringall of your bases, making sure you
have that solid financial foundation. Fromthere on out, it's maybe two meetings
a year, minimum of one.If you're a really busy person and it's

(09:41):
hard to get away from your jobbecause you're still working. Sure we can
get away with one meeting a year, but ask how often you're going to
meet so that everybody is on thesame page. I think we're kind of
bearing the lead here a little bit, and as a journalist I never like
doing that. But I think oneof the most important questions you can actually
ask when you're meeting, especially withan advisor for the very first time,

(10:03):
is how do you get paid?That has to be one of the biggest
questions because you can learn so muchfrom that question. If they're kind of
tap dancing around this one and oh, well, you know, no,
you need to be very direct.How do you get paid? How does
the company you work for get paid? If I take these recommendations right that

(10:24):
you're making to me, you needto know if they're trying to sell you
a commission product, you know,or if it's fee based where okay,
they take a percentage out of whatthey're managing for you in fees, but
hey, you're also a little bitaligned here because when your investments are doing
well, they're going to make alittle more, and when your investments are
doing as well, they're not goingto make as much. So really understanding

(10:46):
that question, I think is ahuge one. This can be uncomfortable for
people to sit down and ask anadvisor across the table, how do you
get paid? But you need toask that question. Do you get commissions,
do you get bonuses? What dothose commissions look like? What drive
those commissions? Because with that insight, you're able to uncover the behaviors that

(11:09):
you can expect from the advisor thatyou're working with. When again, when
you're and I've worked at these placesthat you know, I started my career
in a big brokerage firm and youknow, they trained the Hackettia. I
got five securities licenses, became acertified financial planner, but my hands were
tied. I wasn't really doing financialplanning. It was financial sales. And
that's frustrating. You know, Idon't feel you're really helping people. You

(11:31):
know, I did help people,but my hands were tied to help in
the way that I feel like peopledeserve, which is with their best interest
front and center. And when whenyou're when you're with a bank financial advisor,
I've been there too. You're forcedto sell the solutions that your own
company offers as opposed to a registeredinvestment advisory firm. You know, all
Worth isn't the only one. There'sthere's many out there where you're working with

(11:54):
credential advisors and it's fee based financialplanning, and you pay for assets under
managed, and then they can helpyou find the best solution that's available out
there. Your hands aren't tied.So having that understanding of how people are
paid, not shying away from thatquestion, it can give you a lot
of information. Yeah, if theyare not being upfront, right, if

(12:16):
you feel like they're not being upfrontwith you, run fast in the other
direction. I've been shocked so manypeople through the years when I've asked,
you know, oh, the advisoryou worked with before, how are they
getting paid? I didn't pay them. They liked me. You know what
I'm saying. It is like,no, No, it just wasn't ever
clear to you how you were paying. They're not no commission exactly exactly.
Here's the all Worth advice. Onceyou feel comfortable with the answers to these

(12:39):
questions, we would say, okay, then you found an advisor that you
can feel safe working with. Thenyou start building that comprehensive financial plan.
Have you up next? The stepsto take If your advisor tells you you
finally found a good one and they'reretiring, what do you do next?
You're listening to simply money because I'mmy all Worth Financial here in fifty five
KRC the talk station from the UCHealth Traffic Center. See all Worth Financial

(13:05):
a registered investment advisory firm. Anyideas presented during this program are not intended
to provide specific financial advice. Youshould consult your own financial advisor, tax
consultant, or a state planning attorneyto conduct your own due diligence. You're
listening to Simply Money presented by allWorth Financial. I mean you Wagner along

(13:26):
with Stee Ruby. If you can'tlisten to our show every night, you
do not have to miss a thing. We've got a daily podcast for you,
of course, it's called Simply Money. Just search Simply Money on the
iHeart app or wherever you get yourpodcasts. Coming up, we've got a
lot to tackle, a flour oneK transfer, mutual funds and fees and
much more in are Ask the Advisorsegment that's coming up at six forty three.

(13:50):
You know, I think taxes foreveryone. It feels like it should
be kind of the great. Itjust fare across the board to everyone.
But you think, okay, wellthe more money you have, the more
you pay in taxes. What weknow that's just not how it works.
There's a bunch of millionaires out thereand huge corporations that really don't seem to
be paying their fair share, andthe IRS now is trying to crack down.

(14:11):
Well, they're successfully cracking down.Since twenty twenty two, the IRS
actually up their enforcement on businesses andsuper those that are super wealthy and delinquent
on their taxes, and they've actuallymanaged to collect a half billion dollars from
these people. The IRS is notoriousright for being understaffed. You try calling
and you expect that you're going tobe on there for about twenty two hours

(14:33):
waiting for someone to come through.And so, yeah, so the US
government has thrown a lot of moneytheir way and said, listen, we
know we have issues bringing in moneyto the federal government, and here we
have large corporations and really rich peoplewho aren't paying their fair share, and
to go after them, we needmore boots on the ground. And so

(14:56):
they're paying for more boots on theground. And to your point, it's
working. Yeah, it is.And you know, I guess better going
after them than the little guy,because I've certainly had folks I've worked with
over the years that had no reasonfor them to be audited. It was
frustrating to see the situation that theyfound themselves in, and it's like,
come on, you know, there'sthere's these big companies that aren't paying and

(15:18):
I guess this is a good thing. I don't like the irs like anybody
else, but if they're going togo after somebody, may as well be
some of these big companies that aren'tpaying their taxes. Well, and you
see the headlines, right, there'sthe company, ginormous company. They make
x millions or billions of dollars ayear, and then you're looking at like
the percentage they pay in taxes,You're like, how is that even fair?
Well, they have floors literally floorsof tax accountants and attorneys and things

(15:43):
like that that know how to youknow, work the system. And so
I like, now that, okay, we're going to try to you know,
balance the playing field out there forall of us that maybe do not
have, of course, the wholeteam of people helping us figure out how
to best pay our taxes. Itis a little funky when you know Jeff
Bezos of secretary has a lower effectiveor higher effective tax rate than Bezos himself.

(16:04):
Right, few red flags there fewred flags, and I'm glad they're
doing this. Yes, you're right, the irs doesn't almost have the best
reputation, but I think this issomething that should be moving the needle in
the right direction. You know,we've been talking a lot during this show
about the relationship that you should havewith your advisor and the questions you should
be asking in order to find theright fit for you. But once you've

(16:25):
found that fit, and especially afteryou've been working with someone for years,
gosh, I think about you know, the clients and investors that we get
to work with that come in andthey open up their lives to us and
they're showing us grandkids' pictures and youknow, my son or daughter just you
know, graduated from the school,and they really let us into their lives,
and then all of a sudden,it's time for one of us to

(16:48):
retire, you know, the advisorthat you're working with. Now, what
do you do? Yeah, Imean, there was a research study done
recently that showed that almost four andten of advisors are going to retire in
the next decade. That's a that'sa big number. That's a nice chunk
of people planning on retiring so havingan understanding of what your advisor's succession plan

(17:11):
is is important. You know,I myself, unfortunately I'm not one that
will be retiring in the next decade, but I do appreciate it when folks
I work with ask me about it. My doctor retired last year, and
you know, there's yeah, there'speople that we trust to have our backs,
and yes it's fair, but peopleretire. I help people retire every

(17:33):
day. That's what I do fora living, so I get it.
But making sure there's that plan inmotion and understanding what that transition is going
to look like is very valuable foryou. Yeah, And I think regardless
of how old you are, whetheryou're you know, forty five or sixty
five, when you start working withan advisor, that could be one of
the questions that you ask, whatdoes the succession plan look like around here?

(17:56):
Especially if it's a really small firmand you're not seeing all these other
advisors there. Right, if thatperson leaves, what's going to happen next?
And you know, we just gotto see how Steve Sprovac right,
they're former co host of the showafter working for decades for the same company,
and he is he had some clientsthat have been with him since close

(18:17):
to the very beginning, and sohe started planning this transition more than a
year before he actually left. Hestarted having conversations with them. And then
because you've been working or he hadbeen working with so many of these clients
for so many years, he knewthem so well. So then he was
hand picking the advisor that they wouldwork with based on their individual needs to

(18:40):
make sure that it was a reallygood fit. In a lot of time
and planning and thought went into thatprocess. And on the other side of
it, I haven't heard from anyonewho hasn't been happy. And of course
we all miss Steve, you know, but he's helped every one else retire.
Well, now he gets to retire. I was front and center in
a lot of these meetings. Soit was one of the reasons why I

(19:02):
was brought on with all Worth asa company, is because we had a
couple of advisors that had been herefor twenty plus years retiring. So I've
been in part of a lot ofthese meetings helping transition these these client relationships
over the past couple of years.Where the expectation had been set by Steve
for example, Hey, mister andmissus client. You know I've worked with

(19:23):
you for twenty years. I'm retiring, but you know we have young Steve,
new and improved Steve as Yeah,Steve two point zero. That's stepping
up to the plate. He's aCFP. He's going to continue the relationship
in the way that you've grown usedto. So having an expectation with your
advisor when the time comes about whatthat transition might look like is important.

(19:45):
The same study that we talked abouthere a moment ago, it showed that
advisors with less than ten years leftin the business one in ten planned for
an external sale, meaning when theyretire, they're going to sell their b
of business their client relationships to anotherfirm. Three inten identified a successor within

(20:06):
their practice case in point, likeSteve, another three intent had no formal
plan at all. The key isright, you find someone you like,
ask them what their plan is.Here's the all Worth advice. If you
do trust your current advisor, youshould feel good about who your next advisor
will be. So make sure toask the tough questions. It's your life

(20:26):
savings after all. Coming up next, we've got a deep dive into estate
planning documents, what you really need. You're listening to Simply Money, present
of my all Worth Financial here infifty five KRC, the talk station during
your iHeartRadio station. You're listening toSimply Money and presented by all Worth Financial

(20:48):
Immi Wagner along with Steve Ruby.Okay, so you go through the financial
planning process. We've been talking aboutthat a lot during the show. What
that looks like, who you're workingwith? One part of it is,
Okay, maybe you've built up somewealth. What happens with that money after
you're gone? While you need asolid estate plan, and we would say
it doesn't matter how old you are. These are there's key components of this

(21:11):
that you need to have. Yeah, everybody needs to have an estate plan
that there are too many curve ballsthat life can throw us that can derail
our financial situation. Something unexpected happens. We want to know what happens with
our money if we are gone.And this is how you get your head
wrapped around it. So first fallingagain, in no particular order. Power

(21:32):
of attorney. This is a legaldocument allowing somebody else This is the power
of attorney. That's who that personis to make financial decisions if you become
incapacitated. This is something that goesaway at death. It is only in
life. A lot of folks thatI work with, I will ask them,
and the older folks, I willask them to bring in children or

(21:53):
a trusted friend, somebody that theyknow has their best interests in mind,
and establish that power of attorney inthe event that I need to talk to
somebody else on behalf of the client. It's important to understand what these are
and how these work, because it'snot even necessarily if you become incapacitated.
Like I think about a friend ofmine who had adult sons who were actually

(22:18):
going out to hike the Appalachian Trail. So as two sons were doing that
together and they had, you know, already graduated from college, they had
jobs, they had their own places, they had those coming in. They
made their father their power of attorneybecause they were on this trail for a
couple of months, a couple ofbills came in, a couple of inquiries
financially that could have really impacted theircredit score in a negative way, and

(22:41):
he was able to take care ofthose. So, you know, sometimes
it's just having this because anything couldhappen and life circumstances could change, or
you could actually plan to kind ofbe out of pocket for a while,
and it gives someone else the abilityto make sure that nothing kind of falls
through the cracks. Yeah, that'sa great point. So again power of
attorney they terminate in death. Sosomething that doesn't start until after you die

(23:02):
is your will. Now we draftthis in life. It's a piece of
the estate plan that appoints an executorthat will distribute your assets to your beneficiaries
as noted in the will per yourdirection. So it's a way to make
sure that the property that you have, for example, goes to the people
that you want it to go to. But it doesn't avoid probate. So

(23:23):
this is something that we typically wantto avoid because that's a public process that's
open available. That information is outthere, and it can be there can
be added costs associated with it,but at minimum, we do want to
have that in place so that ourwishes are met if something were to happen
to us. And understand this aboutyour will, this is not a one
and done situation. I always,you know, I'm always like, oh,

(23:47):
every time I ask someone you know, do you have a will.
Yes, yes, we absolutely havea will twenty five years ago exactly,
and I'm like, okay, soyour children were three and five at the
time. Right now they're almost thirty. You know, things have changed,
and so this is something I wouldsay that every five years you're kind of
revisited. Some years you're going tosay, oh, okay, everything is

(24:08):
the same, we don't need toupdate it. But in some cases you
will want to update it, andyou want it to reflect your current situation.
And right along with the will,I would say also very important a
healthcare directive. Have this conversation withyour family, but also make sure that
you have someone set up that islegally this person if you are incapacitated,

(24:29):
you know, very ill in thehospital, someone who can help make decisions
for you about your treatment. Andyou know, if this is an end
of life situation, decide or makethe call for you. Do you want
extraordinary measures done in order to tryto keep you alive? You know,
those are the kinds of things thatyou have to have these conversations with someone
because it's an incredibly emotional time,right and so not having that conversation with

(24:52):
the other you know, and youcan have it set out in a legal
document as well, but also identifyingwho that person is, because I've seen
far too many times you'll have anumber of kids and they're not on the
same page. One of them let'sdo everything we can to keep Dad here,
and the other one is, wow, I just don't think Dad would
want that, right. Make itvery clear. This is actually, I
think an act of love for yourloved ones and making sure that you find

(25:15):
the person that you trust to makethat decision on your behalf. See that,
Yeah, that is key because itcan be it can put the person
that is named in your healthcare directiveas in a difficult place, so trusting
that they're going to make your wishescome true is important. Speaking of trust,
that is another document that is animportant part of a state planning.

(25:36):
Thank you, I appreciate that.So you know, it's an optional document
just like everything else. You know, you can get a lot, you
can get a lot of your estateplan handled via will and establishing appropriate beneficiaries.
A trust document goes into a littlebit more depth, and in my
opinion, when I see this asas a major benefit is when you have
minor children. For example, ifyou have a family member with special needs

(26:00):
that you are overseeing if you areremarried and have children from previous marriages.
So this is a way that wecan have more complex financial planning needs met
via that trust document. And assomeone right who's part of a blended family,
you know, we you know,my husband and I redid our estate

(26:22):
planning, you know, once wegot married a few years ago, and
it was you know, some peoplesay, I don't know if you have
to work with an attorney. Thatsounds so expensive. No, I guess
sometimes you don't. There's things onlinethat are available to you, but a
trust is something that is more complex. And also I found a huge benefit
in working with an estate planning attorneywho's been doing this with so many other
families. I had never been ina situation before we were a blended family,

(26:47):
and what are the nuances of that, and what are the things that
we need to think through? Andthere was some just fantastic advice and things
that honestly I wouldn't have thought aboutthat came to the table because of that,
And I left that meeting feeling reallygood about where we ended up.
But we would have never gotten thereif it was just my husband and I
trying to figure these things out.Yeah, they're more complex the situation,

(27:07):
the more you benefit by actually partneringwith an attorney. But obviously the expense
of this get a little bit higherwhen when you're working with an attorney,
when you're putting together a trust.Can you do this all by yourself?
Sure? I mean you don't needa lawyer to do a will. There
are websites online that can help guideyou through creating some of these estate planning
packages. If you're not going tomeet with an attorney, start there,

(27:30):
Please do something. Yes, thereare. Yeah, there are too many
situations where where people haven't had properestate planning done. And you know,
this happened to my own family.I had bugged a family member for years
to do the stuff. She didn't. She passed and everything went through probate,
and I was the one that dealtwith it. And I know you
know people that have had similar experiences. It's all too often that people just

(27:55):
put this conversation on the back burnerbecause it's hard to have. It's confusing,
you don't know who you want tohelp you make these decisions when you're
unable to. But it's important atminimum at minimum, make sure that your
beneficiaries in your accounts are up todate. This is where other horror stories

(28:17):
have happened, where beneficiaries supersede whatis named in your will. That is,
what is the number one determining factoron who you leave assets behind.
Two and I have seen situations overthe course of my career where people had
to leave assets to those that theydidn't want to exis for exams. Yes,

(28:40):
wasn't originally part of the plan.They just overkind of looked that part.
And you made a point earlier aboutthe healthcare directive to choose wisely.
Right in that situation, you wantsomeone that maybe remains level headed during a
time that's incredibly emotional. But alsowhen you're thinking about who you want your
executors to be, choose wisely thereas well. This is one who needs

(29:00):
to be detail oriented, that doesn'tget overwhelmed easily. Right. So,
if you've got several children, it'snot like you're picking your favorite child.
You would just be picking the onethat you think has the best sort of
gifts and talents that align with thesethings. But I think the best thing
that you can do in any situation, once you have your state plan set
up is to communicate with your lovedones, right. It is the best

(29:22):
thing that you can do if youdon't care after you're gone, if they're
biting each other's heads off, Idon't say a word to them. Let
them figure it out all later.But for most of us, that's not
what we want. We don't wantto surprise our kids when we're gone,
So make sure that there are nosurprises when you're gone. Here's the all
Worth advice creating an estate plan.This is just a crucial part of the
financial planning process. Please please donot underestimated or put it off. Coming

(29:45):
up next, you've got questions,We've got answers. We're going to ask
the advisor. You're listening to SimplyMoney because thatented by all Worth Financial here
on fifty five KRC the talk station. So your opinions are welcome to here.
Why do we keep letting thousands ofpeople come over and do nothing about
it? My family's safety is atrisk. Fifty five KRC the talk station.

(30:11):
You're listening to Simply Money percent ofby all Worth Financial, Amini Wagner
along with Steve Ruby. Straight ahead. If you are heading out on a
cruise, this year. How tomake the most of that trip. Make
sure you've got some smooth sailing ahead. If you've got a financial question you'd
like for us to answer, well, there's a red button. You can
click them while you're listening to theshow. It's right there on the iHeart
app record. Your question is comingstraight to us. We're talking about some

(30:36):
of these questions tonight. The firstone is from John and Montgomery. I
was recently laid off and I planon moving my old four oh one K
into a personal IRA. But thecontribution limits for ira is are, of
course so much less. I wantto contribute what I was putting into my
four oh one K before. Sowhat should I do? Sorry to hear
that. John, Sometimes like rosescurveballs, and this is certainly one of

(31:00):
them. You know, when youleave an employer, whether or not you've
made that decision on your own,you have options with what to do with
your old four oh one K.Now, one of the challenges is that
when we have a four toh oneK, it's tied to our When we
have an active four one K,it's tied to our employer. And the
benefit is that the contribution limits aremuch higher. Than that of an IRA,

(31:22):
which we have to have earned incometo contribute to. Anyways, in
this situation, the amount that youcan contribute will go down unless you get
another job that offers a four toone K. I do think though,
if you are tied to say roughlythe annual contribution for four oh one K
to max it out is about twentythousand, right for an individual, it's

(31:45):
about where it is, you know, so you've got an IRA, of
course, which is much less thanthat. If you want to be putting
twenty thousand in. If your newjob offers a high deductible health care plan
with a health savings account, right, so they're not offing the four one
k like your old company did.Max out that IRA, then also look

(32:05):
at maxing out that health savings accountwhich can go to qualified a healthcare expenses.
This is triple tax advantage. Youput the money in tax free,
it grows tax free, and aslong as you're taking out for qualified medical
expenses also tax free. There's nothinglike it out there. So I'm a
huge, huge fan, huge proponentof HSA's I would say that's an option
for you. Plug in your favoriteinvestment vehicle. I Honestly, I don't

(32:30):
like I think HSA should pay melike they just pay me because I am,
but I'm legitimately a proponent of them. We've used them in our family
for years. We pay the outof pocket expenses on the medical cost as
we go and we're just putting itaside. And this is another retirement account
for us. So John, itcould be a good option for you.
And then it's not a sexy word, but a taxable account, you know,

(32:50):
taxable brokerage account. It's taxed adifferent way, and if you keep
that money in there invested for morethan a year, your taxed long term
capital gains rates, which could havea huge advantage to you. So you
can still be putting aside that money. And I would actually say maybe a
benefit of this would be it's indifferent kind of accounts with different tax treatments,
which gives you more flexibility and retirement. So I love that you're saying

(33:13):
I want to keep saving and investingas much as I was before, and
I think maybe this will give youeven a little more flexibility than you have.
That doesn't shut the door. Itdoesn't shut the door in your ability
to save because there are other vehiclesthat you can use. Great points.
So Judith and Tim and Dell highTownship, we want to buy some mutual
funds. What do we need toknow about the expense ratios? I would
ask why mutual funds. There's Athere's A shares, there's C shares.

(33:37):
The A shares are are for thosethat are going to hold it over the
long term because they have a higherupfront cost or show shares or level level
sales charge. So it's for thosethat, you know, shorter term holdings.
But exchange traded funds exist where youcan invest in the market, just
like in a mutual fund, butat a very low expense ratio, which

(33:58):
is essentially the skim off the topbefore the returns are ever reported. So
you know, if you want tobuy mutual funds, go for it.
But with exchange traded funds out thereand very accessible to most investors, I
say go that rout. This islike an advanced investor question. I like
that they're asking this because it showsthat they understand that they are paying right.

(34:19):
There are expenses, you know,aligned with investments, and I think
some people don't truly understand that.But yeah, we just had something a
segment on the show recently talking aboutthese actively managed accounts and how many times
they actually don't do as well asthe indexes that they're held up. Again,
so you can invest in an ETFand exchange traded fund the tracks say

(34:39):
the S and P five hundred,the five hundred biggest companies that make up
the American economy, and most yearsthat fund is going to do better than
someone who's in there buying and sellingconstantly trying to beat the index. So
to your point, I would lookat other options, maybe beyond a mutual
fund, with you know, lowerexpense ratios and often higher returns. They

(35:04):
often end up being kind of awin win. Next question comes from who
lives in Warren County. He's sixtytwo, not married, no kids.
Do we need to be doing anythingspecial with my retirement planning? I mean
special? The thing that comes inmind for me is a state planning.
Who will your money go to whenyou are gone? And maybe that's a

(35:24):
little crass, but it's an importantpart of the conversation to understand what's going
to happen there, because at theend of the day, you still need
to look at all the same thingsthat other investors need to look at what
do you need to spend it inretirement, what income you're going to generate,
where's that going to come from?A pension, social security investments that
you've gathered. I think making sureyou know where that money is going to

(35:44):
go when you're gone is worth alook. Yeah. Also long term care
insurance planning for that with you know, not with the not having a spouse
or kid that might take care ofyou if something happens. Coming up next,
we've got the keys to smooth sailingon your next trip. You're listening
to Simply Money presented by all WorthFinancial here in fifty five KRC the talk
station stage this month, I haveto choose between groceries for my kids or

(36:07):
gas for my car. Talk aboutit here fifty five KRC the talk station
listening to Simply Money present all WorthFinancial. I Meani Wagner along with Steve
Ruby. Steve, you vier beenon a cruise not my entire life really,
yep. Yeah, I have acouple of times, and I learned

(36:30):
some certain like tricks, rules ofthe road for these and so that's kind
of what we're talking about here.Ways to make that next cruise as smooth
sailing as possible. And it's funnybecause there's two different ways to look at
it. One is you should bookreally early, and the other one is
that you should book at the lastminute. Yeah, so polar opposites in
the situation. But the earlier youbook, the more options you're going to

(36:52):
have. You can lock in somepretty low prices there. But in the
event that some of these cruises don'tsell out, that's where waiting till the
last minute can be in your benefit. Obviously, we need to have a
little bit more flexibility when we're waitingtill the last minute, because that also
means that maybe you don't get onthat cruise. The first cruise I ever

(37:13):
won, I've only been on acouple in my life, but the first
one was right after college. Ihad just gotten my first job. My
college roomate and I decided to go. We had no money, and so
we did. We weeded until thelast minute. We got a heck of
a deal, you know. Ithink we went to three different islands.
It was a lot of fun.One of the things though, that we
knew up front was what was includedin what was not included in the cost

(37:37):
of that cruise. If you aresomeone who likes pina coladas or a glass
of wine with did the recent collegegraduate. I imagine there were a few
pina coladas a couple what we did, and I'm not saying that the cruise
ship would probably agree with me sayingthis, but we had no money.
We bought a box of wine,put it in our luggage, and after

(37:59):
dinner every night we would buy oneglass of wine, win dinner, and
then go and fill it up fromour box of wine. I'm not necessarily
advocating for that, but I amadvocating for understanding what is and is not
covered in the cost of that cruise, because I have heard horror stories of
people who paid more for alcohol thanthey actually did for the entire cruise.
So doing your research ahead of time. And that also applies to the excursions,

(38:22):
because a lot of the excursions thatthey're offering you on the cruise right,
they're getting a portion of that theywant you to do their excursions.
You can work with someone and atravel agent outside or even I have waited
until we've gotten off the boat anda port and just said to like some
locals, what do you guys liketo do? Was a fun place to
go. It had some great experiencesthat didn't involve, you know, seven

(38:45):
hundred dollars to swim with a dolphin. Yeah, that's a nice fan you
have there. Can you take me? Okay, I didn't say that.
I actually did do that one timeand it worked just fine with us.
Yeah, what about a spa onport days? I actually saw a tip
about this, because when you're outto see everybody wants the special treatment.
But when everybody else is going onthose excursions, that's when you can book

(39:07):
spot treatment for cheaper. Yeah.That's a great tip. Yeah, that's
a great tip as well. Andanother one, speaking of tips, is
a tip accordingly, right, you'retipping all the people that you interact with,
the person who's serving you dinner,and the people who are cleaning your
room every day. There's two optionsthere. You can tip up front or
you can wait until the end andsee what kind of service. Just don't
forget that part. Thanks for listening. You've been listening to Simply Money presented

(39:30):
my all Worth Financial here in fiftyfive KRC. The talk station