September 25, 2025 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian share the biggest regrets wealthy retirees face — and how to avoid them. They also cover how to turn severance into strategy, ways to protect your privacy from Google, listener questions on direct indexing and estate planning, and Brian’s bottom line on the Secure Act 2.0.
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Episode Transcript
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Speaker 1 (00:08):
Tonight, what wealthy retirees regret the most and what you
can learn from them. You're listening to Simply Money present
up by all Worth Financial. I'm Bob Sponsller along with
Brian James. You've done everything right. You've maxed out your
four oh one K for years, if not decades, You've
built a portfolio worth two million, five million, ten million
(00:29):
dollars or maybe even more, and now you've got the
financial green light to retire. But here's the twist. For
some retirement isn't quite the reward they expected. Brian, there's
a lot of other things to consider here before we
pull the ripcord and venture into this new world called retirement.
Speaker 2 (00:49):
Well, let's start with the most common mistake that we
see when we're doing financial plans for people, and a
lot of times this is we have people who have
retired maybe before we put a financial plan together, which
is okay, but maybe not the best idea. So what
that means is that they don't really have a clear
idea of what they can get away with, right, So
we have to start with, but what's the minimum?
Speaker 3 (01:06):
How do I keep my household a float?
Speaker 2 (01:08):
So we don't have that level of financial stress and
then what's the surplus that's left over so I can
go do the fun stuff that I've been wanting to
do for years. So this happens a lot, especially when
people retire younger or after selling a business, when there's
just this huge influx of cash and it finally feels
like you have time and freedom and money. Right, that's
the trifecta we all hope for. You don't get them
all at the same time. You know, suddenly there's a
(01:28):
new house in Florida, You're doing some luxury travel, helping
out the kids and whatever.
Speaker 3 (01:32):
This is where the income planning matters, right.
Speaker 2 (01:34):
Just because you have the portfolio of the size that
you always dreamed of, doesn't mean you can withdraw from
it without a plan and just fling money all over
the countryside.
Speaker 4 (01:42):
Willy nilly.
Speaker 1 (01:45):
Yeah, yeah, I've seen this happen a couple times, even
this year. You know, folks finally retire and these are
hard working people. They've just put their nose to the
grindstone here for decades and they've built up sizable amounts
of money big net worse. But boy, as soon as
they retire, they see that big account balance that they
(02:05):
probably haven't stared at or looked at for years, and
then all of a sudden, we see, all right, we're
not gonna buy one, but for luxury collector cars, we're
gonna build a I don't know, a barn to hold
ten cars in hopes of building a collection. You mentioned
the new house in Florida. I mean, people see that
big dollar amount staring at them, and they feel like
(02:27):
it's time to just spend, spend, spend, And sometimes we
gotta pull back, put the put the brakes on and say, hey,
let's make sure we're still following a financial plan, just
because the numbers on that net work statement appear to
be high and sometimes are Yeah, And so one of the.
Speaker 2 (02:45):
Things that comes along, you know, when we're doing those
is you know, maybe you've got the money to do
these things, but all of a sudden, you've got a
multiple different kinds of tax treatment. That's something we called
asset location, meaning what type of account is this particular
asset in that you're gonna draw. And one of the
biggest regrets that we hear is why didn't I do
more roth conversions earlier from our older clients, And those
(03:07):
are folks.
Speaker 3 (03:07):
Who maybe celebrated those years.
Speaker 2 (03:11):
There's kind of a doughnut hole between when you retire
and maybe you haven't turned on Social Security yet, maybe
you're living off of savings. Some people, literally, you know,
wind up with a couple hundred thousand dollars of cash
in a savings account, Spend that down for a while
and celebrate the fact that they're in a zero percent
tax bracket. I don't have any income, therefore I'm literally
not paying any taxes. What a heavenly life. Meanwhile, there's
a gigantic pretax four oh and k or Ira sitting
(03:33):
out there being ignored when it could have been getting
converted into wroth iras. So don't miss those types of
opportunities to understand how a roth conversion works, in what
the taxes would be, and more importantly, what the benefits are.
Not only to you, because you'll be reducing your required
minimum distributions, which are aged seventy three or seventy five.
That's when Uncle Sam has a gun to your head
makes you start paying taxes on those dollars. You can
(03:54):
reduce those with Roth conversions. And also, not only does
it grow tax free for you during retirement, your kids
are going to inherit it, or whoever your errors are,
they will get ten years to continue to let that
thing grow tax free after they've inherited.
Speaker 5 (04:09):
Yeah.
Speaker 1 (04:10):
Another opportunity out there that people don't look at nearly
enough is the opportunity to take advantage of a zero
long term capital gains tax rate if your income really drops,
as you mentioned, Brian, in those first couple of years
of retirement up to over like ninety six thousand dollars
of taxable income. This is an opportunity in those first
(04:30):
couple of years of retirement to maybe slowly diversify out
of a concentrated stock position, and in some cases Brian,
pay nothing in capital gains taxes and use some of
that those stock proceeds to live on, you know, to
support your income for a couple of years. We've seen
this happen several times just this year, where folks just
(04:51):
look at us like, hey, we didn't know we could
do that, And it kills the proverbial. You know, multiple
birds with one stone entering some income, you're avoiding taxes,
and you're properly diversifying your portfolio.
Speaker 2 (05:06):
Yeah, and I want to reiterate that. So what we
just discussed there was two different points. If you truly
hit that doughnut hole where you've got enough assets to
live on without generating any real income just spending down savings,
then yeah, you're gonna be in a zero percent bracket.
That gives you two opportunities, one on the IRA side,
the pre tax side to do rotten versions. And where
Bob was talking about capital gains, that means if you've
got some stocks sitting in a taxable account that you
(05:27):
maybe you've had P and G forever and you've always
wanted to diversify a little bit out of it and
use those dollars, but you've been terrified of the of
the tax hit. Then now you're in an opportunity when
you have that little income, you literally could be paying
no capital gains tax if you can control that amount.
So moving parts to that, but definitely worth looking into.
Speaker 1 (05:44):
Yeah, it just comes down to having a strategy as
far as where your income sources are going to come from,
and make sure you don't make the mistake of just
selling the wrong assets first, because it's counter intuitive, counterintuitive
sometimes Bryant for people that have just sought away for
decades pre tax savings into these four oh one ks
and iras it almost feels sacrilegious to do a row
(06:09):
because I gotta pay some taxes.
Speaker 4 (06:10):
I gotta pay some taxes.
Speaker 1 (06:11):
I've always been told for twenty thirty forty years, never
pay any taxes, where in reality, paying a little bit
of taxes now can, as you've already pointed out, can
pay big dividends down the road, not only for you,
but for your heirs. You're listening to Simply Money presented
by all Worth Financial. I'm Bob Sponseller along with Brian James.
All Right, we talked a little bit about some of
(06:33):
the financial watchouts here, Brian, as we approach approach retirement,
let's get into some of the more psychological watchouts. You know,
talk about losing purpose and structure and just you know,
the adjustment to no longer being a big shot in
a big company and having a whole lot going on
and a lot of people to manage and suddenly going
(06:55):
to nothing. That's a big adjustment for some people.
Speaker 2 (06:59):
It is a lot of times we hide behind the
notion that, you know what, I can't retire, that don't
have enough money, got to build more, build build, build,
build build, And we really never give any thought to
the non financial psychological shifts that we're going to go
through when we do retire. When the world changes, world
gets a little bit smaller, the walls might close in
a little bit. Sounds fantastic to have all that free time,
but on the other hand, you are giving up something.
(07:20):
You're going to have a vacuum of time to fill
with something, and what's the something going to be. So
we've seen this with ultra successful professionals, CEOs, physicians, entrepreneurs.
They retire and then they struggle, and also happens with
you know, really anybody out there. You go through this,
the calendar goes from a full and I got a
lot of stuff going on. It's been four days since
I've seen a human being because I've been sitting in
(07:40):
the house for a week. So if studies show that
the retirees that don't have structure are at greater risk
for cognitive decline and mental health challenges, you might be
thinking of people that you've met, family members and friends
that have gone through this and you notice a change
in them when they just didn't have anywhere to go
all of a sudden after a couple of weeks, that
kind of sets in and so that's why we work
so much with how do we with retirees and how
(08:01):
do we structure this? What are you going to get
involved in that once we've solved the financial problem? Now
what think about what happens once you've spiked the football
that the financial solutions will work for you?
Speaker 1 (08:12):
Yeah, Brian, I've been blessed to have more than a
few older gentlemen in my life that have influenced me greatly.
Folks that you know, fifteen twenty years older than me
and have walked down the road that I'm about to
walk down. And it's important to have people like that
in your life. And I can think of one really
impactful thing one gentleman told me a few years ago.
(08:33):
He said, Hey, when you move toward retirement, you just
move from a stage of achievement to a phase of influence.
You've got to think about influence. Who do you want
to influence and why and how are you going to
go about doing that?
Speaker 4 (08:50):
And the people that are able to.
Speaker 1 (08:51):
Make that transition focusing on influencing others, influencing your kids, grandkids,
the world in general for good. If those are the
people that are living fulfilled lives, you can only play
so much golf and watch so much Netflix and celebrate
celebrate being retired. Sooner or later, you've got to have
some purpose in your life. And Brian, I find that
(09:14):
the retirees that have done that are really living rich
and meaningful lives and they're enjoying that, you know what,
out of their retirement years because they're serving other people.
Speaker 3 (09:25):
Yeah, I think so too.
Speaker 2 (09:26):
And so some of you let me move on to
another story just occurred to me, uh is. And this
is the ones that come expressing regret over not having
trained their own family members, their children on how finances work,
so not thinking generationally, you know, and they'll say things
like I wish we talked more about legacy. So if
you do have a healthy network, there's a high likelihood
your money is going to outlive you. That was kind
(09:47):
of the point, right, So the whole question is what
happens to that when you're gone. So this can be
you know, this might be philanthropy, family education, gifting strategies
to charities that are important to you, and you can
involve your family in these. You know a lot I
know a lot of families. It'll have a you know,
it's an excuse to get everybody together, or maybe a
tradition at the holidays that we're all going to decide,
you know, where this family foundation that we have or
(10:08):
the donor advice fund that we set up years ago,
who are we going to support with that this year.
Let's talk about that as a family and make decisions.
And then that way, when the matriarch patriarch people are gone,
then there is a tradition to fall back on. The
children will remember that, Hey, this is something was important
to mom and dad. It's not all about us living
our lives with us this good fortune they've given us.
We want to support other things too, and we remember
(10:29):
what our family cited was important to us over these
holiday gatherings and it gives something to continue a tradition there.
Speaker 1 (10:35):
Yeah, and it's not even necessary to share exact dollar
amounts if you don't want to go there just yet,
just sit down, like you said, with your kids and
even grandkids and just talk about the things that you're.
Speaker 4 (10:47):
Doing with money and time.
Speaker 1 (10:50):
A lot of times the kids they don't know what
a donor advised fund is.
Speaker 4 (10:54):
They don't know that you.
Speaker 1 (10:55):
Serve on a charitable board because you know, let's face it,
a lot of folks humble. They don't brag about these things.
They just do it. It's part of their lifestyle. I
think you owe it to your kids and grandkids to
share a little bit about your life and what you're doing.
And I think a lot of times, Brian, for the
families that are willing to do this, the light bulb
goes off for their kids. They say, ah, now we
(11:19):
know what mom and dad have been up to. And
you know, you can't make them do everything that you've done,
nor do you want to make them do that.
Speaker 4 (11:26):
But hey, if they develop a little bit of a.
Speaker 1 (11:29):
Vision for how they want things to run in their
own life down the road, you can coach them through that.
You can model it for them, show them how to
do that. And that's a huge form of legacy to
leave for your family, you know, on top of just
leaving them a big pile of money with no direction.
Here's the all Worth advice. Retirement isn't the finish line.
(11:52):
It's simply the launchpad for the next phase of your life.
Speaker 4 (11:56):
Next.
Speaker 1 (11:57):
How to turn severance into strategy of void costly mistakes
and set up your next chapter with purpose and precision.
You're listening to simply money presented by all Worth Financial
on fifty five KRC.
Speaker 4 (12:09):
The talk station.
Speaker 1 (12:12):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James. One point five
million dollars in a four to one k two point
six million with kids still on the payroll, and one
point nine million and ready to semi retire. These are
just some of the questions we're gonna deal with straight ahead.
At six forty three. Well, it appears the labor market
(12:35):
is weakening somewhat and Kroger and P ANDNG have made
layoff announcements. In today's economic and corporate landscape, even senior
executives and top tier professionals at Fortune five hundred firms
are not immune to workforce reductions. For high earners with
significant wealth, a forced transition can bring a lot of
(12:57):
challenges and a lot of opportunity too, Brian, let's get
into that.
Speaker 2 (13:02):
Yeah, So this is where a situation where the labor marketing,
the labor market is quieting down a bit here, so
you might you might be in a situation where you're
hearing rumblings of pink slips and we've seen we've heard
that as you mentioned. We've heard that around here from
Kroger and p ANDNG so forth. So even senior executives,
top tier professionals that Fortune five hundred firms are not
safe from this.
Speaker 4 (13:20):
Uh.
Speaker 2 (13:20):
You know, the companies are making decisions that they need
to make to maintain those profit margins at the end
of the day.
Speaker 3 (13:25):
That's that's what keeps things afloat. So this happens to you.
Speaker 2 (13:28):
If it's ringing a bell that this might be in
your world, let's talk about what you should do in
the short term. First of all, don't don't rush into anything, pause,
post process, and reframe. Right, So this just means take
a breath from any executives. Your entire identity is associated
with your with your professional career, and you're also just
your personal worth. I'm not talking about networth. I'm talking
(13:48):
about the reason you get out of bed in the morning.
Losing that role at the top can feel very, very disorienting.
So you have to take a breath and just acknowledge that, yes,
this sucks, this hurt, but also, now, what are the
things that bothered me about out my past situation, Because
here's a giant opportunity to go find a situation that
has more pros and less cons than my old situation.
Speaker 1 (14:09):
Yeah, Brian, I'm thinking of one couple in particular where
one of the spouses had a significant income, a real
strong leadership position in a firm, and that firm downsized
and she was left without that big leadership position. And
as you already pointed out, Brian, it's a gut punch.
It's an emotional time. And the thing that we like
(14:30):
to make sure we assure people of is if we
can get you in the in here and look at
your overall financial plan and just remind you that the
financial plan to sound, then oftentimes that can allow people
to just do what you just said, pause and process
for a little bit and not feel like they've got
to make any short term drastic decisions, because it does
(14:54):
take time and mental energy and networking and just processing
to figure out what those next steps are. I mean, granted,
when you have one of these unexpected you know, life
changes come up. Yeah, the linear spreadsheet is gonna go
according to what we mapped out, you know, two years ago,
for the next twenty years. But that doesn't mean that
(15:15):
life has come to an end and you're gonna go broke.
You just got to kind of call an audible redirect
and assess. So it's important to just make sure everything's
okay from a financial standpoint, and that way, I think
people can take that time, that time and emotional space
that they need to reprocess those next steps.
Speaker 2 (15:36):
Yeah, and it is just making sure that you understand
to take that time. That's a very important way that
you just put it there. So and part of what's
going to take some of that time is making sure
that you're you're you do have to make sure that
the puzzle piece is all still fit right. So we
always want to make sure that we're in a position
where we can cover the bills. That's making sure we've
got a liquid assets available and moving on to understanding
(15:58):
what your severance package is, what's the payment structure. You're
gonna get a lump sum out of that, or they're
gonna be staged installments. If you're in a top tax bracket.
Installment payments can can spread that out and keep that
from hurting too much if you've got any control over it,
and reduce some of the tax drag on those assets.
Equity and incentive awards, restricted stock units, performance shares, all
this stuff. Options fanom equity. Each of those have different
(16:20):
vesting treatments and tax treatments, and all of them are
gonna have to be considered in terms of when are
you gonna need dollars and how are you gonna get
to them to pay your bills, and to make sure
you're not blindsided come April when it comes time to
unwind the taxes on all these things.
Speaker 1 (16:33):
Yeah, what you're getting into now, Brian, is some of
the actual blocking and tackling that a good fiduciary advisor
should be sitting down with you and going over because again, emotionally,
people don't want to look.
Speaker 4 (16:46):
At this stuff.
Speaker 1 (16:46):
They don't want to pull out these deferred comp statements
and incentive award statements and all that they're they're worried
about the fact that they just lost their job. But
again it's this is why you hire an advisor to
go look at what you've got, look at the timing
on some of these distributions, and then at least help
you come up with a strategy oftentimes maximizing tax efficiency,
(17:10):
you know, to make sure you just don't make some
poor decisions at a bad time because you're emotionally wrapped
up in the job change situation, and you just overlook
some of these benefits that you've worked so hard to
build for many years. We want to make sure you
take full advantage of them. You you already mentioned one.
What are a couple of the other things that we
(17:31):
need to be looking at with people that are in
this situation, Brian, when.
Speaker 2 (17:36):
I look for opportunities first a tax loss harvesting. If
the market has dropped, right a lot of times that
it can happen at this time when the when when
If your company is trying to slow down and trying
to reduce costs, that might mean that this is happening
at a time where the economy has weakened a bit
and uh and they're they're Therefore, the stock market may
have pulled back, so you can look for some opportunities
to tax loss harvest which will which basically means selling something,
(17:58):
looking through your portfolio and finding something sitting at a
lost position, and then offsetting whatever gains you have to
generate with those assets that have or those benefits and
things that have vested, you can offset some of that
with tax loss harvesting. So also always take a look
at your diversification because you're going to be moving stuff
around anyway. This is a great chance to make sure
that you're not overweighted in a certain area. If you've
(18:18):
made any money in the last ten twenty years, you
probably have an overweight to the technology sector.
Speaker 3 (18:22):
It's kind of tough to have avoided that.
Speaker 2 (18:24):
So look for that and take the opportunity with the
new cash that's coming from these other things unwinding to
make sure that your portfolio is back in balance. And
then of course the comprehensive wealth planning right this is
another great time. You're going to have some free time here,
so take that time to make sure that the trusts
that you've set up are funded the way you wanted
them to be, and they're written the way you wanted
them to be, so that everybody understands in advance this
(18:46):
was the mom and dad's intent in getting these assets distributed.
It's these people in these charities. And make sure that
what is written on that piece of paper matches what
is in your head. Do those gifting strategies reflect those
latest exemption thresholds, you have your philanthropic beliefs changed at all?
Are their different organizations? And also make sure you've got
(19:06):
a coordinated advisory team involved.
Speaker 3 (19:08):
Here.
Speaker 2 (19:08):
You have a financial advisor, that's the quarterback who can
kind of be a mile wide and an inch deep.
That person will help you figure out what other specialists
you need. You might need a CPA, you might need
an attorney, you might need an insurance specialist. These are
all things that you should be thinking about when you
find yourself in this situation.
Speaker 1 (19:23):
And ideally we have all of that team of advisors
working together, coordinating together. That's where the secret sauce is
made and where we can really deliver.
Speaker 4 (19:33):
Some tremendous benefit. Here's the all Worth advice.
Speaker 1 (19:36):
A forced layoff doesn't erase financial security. It just simply
gives you an opportunity to redefine the strategy by addressing
immediate needs while simultaneously refining long term structures. You protect
what you've built and you create the foundation for what
comes next. Speaking of next, how Google makes billions of
(19:58):
dollars off of you, and.
Speaker 4 (19:59):
How to opt out.
Speaker 1 (20:00):
You're listening to Simply Money presented by Allworth Financial on
fifty five KRC the talk station. You're listening to Simply
Money presented by all Worth Financial on Bob Sponseller along
with Brian James joined tonight by our good friend, our
cybersecurity and technology expert, mister Dave Hatter.
Speaker 4 (20:21):
Dave, thanks as always for carving out some time for
us tonight.
Speaker 1 (20:25):
And you've got a topic to discuss tonight that I
think everybody is going to be interested in.
Speaker 4 (20:31):
And it's our.
Speaker 1 (20:31):
Good friend Google who's built their entire business model to
just make billions and billions of dollars off of our
personal information. And you've got some updates here on how
to actually opt out of this whole arrangement.
Speaker 4 (20:45):
Lay it honest, Dave.
Speaker 5 (20:48):
Yeah, So, Google, which you know is now part of
parent company Alphabet makes an enormous amount of money off
of your data. And I'm not saying that's necessarily the
various guys. You just have to understand the model here.
We'll call it survance capitalism. And the bottom line is,
whether it's Google, Meta, Facebook's parent company, or other companies
that deal primary in your data, you are not the customer.
(21:10):
You are the product. Right. If you're not paying with money,
you're paying with data. Now, again, I'm not saying it's
necessarily nefarius. You just need to understand the trade off.
And the good news is there are privacy frimly options
out there. I'll get to that in a minute, but
to give you some scale of this, so Wired magazine
did a really good video that explains this in a
lot of detail, and they show some stats in here
(21:31):
and says in twenty twenty four, Google made nearly seventy
five percent of their revenue off of your data. Things
like YouTube and the videos you watch, the Google Chrome,
the Google search engine, Google advertising, all that sort of stuff.
Do sell other products like Android phones and such, but
roughly seventy five percent of their revenue is coming from
(21:51):
your data. And you know they're not looking to protect
your privacy, despite one of the side by side comparison
that I encourage people to do this all the time.
If you go to the Apple App Store. You know,
Apple a few years ago caused the big shake up
in the industry because they started requiring people that want
to deploy apps like the Gmail app for your phone
(22:13):
from Google, for example, or the Google Chrome browser or
the Brave browser. They made developers start putting it together
what they call a privacy label. Think of it like
the nutrition label on a can in the store, that
tells you the data they want to collect and I
just encourage you go take a look at the Google
Gmail app or the Chrome app versus like the Brave
(22:35):
browser and see the AMLA data it collects, and then
ask yourself, well, why does it need all of this
incredibly sensitive and granted or data about me to do X,
y or Z. Now I to say this TikTok. There's
plenty of egregious examples out there. That's one of the
reasons why I'm not a TikTok fan. But when you
look at these things, it starts to paint a real
clear picture that you know, you are their product. They're
(22:56):
making enormous amounts of money off of you. And my
real issue was this is not so much the money
or the data even, it's how that data can be
sold used downstream. And I'll bet every one of you,
and probably both of you, have recently gotten a letter
telling you your data's been breached somewhere. I just got
my latest, one of about nine now from our good
friends to TransUnion. You know, do I do business with TransUnion?
(23:20):
Not directly, but they're a credit union or a credit bureau,
so they have all my data already, and now it's
been leaked yet again. And this is not helpful to
you as a consumer. So the point is, rather than
continue to feed the monster of these giant companies, the
Metas of the world, the Googles of the world, because again,
this isn't just a Google slash alphabet issue. There are
(23:41):
privately friendly options you can use in many cases at
low cost or free that will provide I would argue
functional parody the same capabilities, but are much more focused
on your privacy. And now, you guys know I'm a
intential hack guy, but I encourage every one of your
listeners to start to think about how can you disconnect
from the machine and how can you start to focus
(24:03):
on limiting the amount of data about you that's out
there and still get the services and features and functions
you need.
Speaker 2 (24:09):
Hey, Dave, So let's so, I think we're talking to
a lot of people who probably fell in love with
Google twenty five years ago when it became so much
better and when it became such an easy way to
search and get the information that you need, and then
that kind of sucked everybody into the vortex here a
little bit. What if if you've been doing that for
years and your data is all as out there, can
you do anything to unwind that I remember, you know,
(24:30):
discussions of the right to be forgotten and all that
kind of thing. Is that a thing in the United States?
Can I go back and tell them to forget everything
I've ever told them?
Speaker 5 (24:38):
Well, sort of. It's a good question. Like in Europe,
you've got the GDPR, the General Data Protection Regulation that's
got some very stringent privacy regulation. There's a hodgepodge quilt
of laws in the US. About nineteen states have some
kind of law. Californias is very stringent relatively speaking, and
it's kind of similar to the GDPR. You know, I
(24:59):
like to drive my good friends in Ohio because you know,
I live in Kentucky. Kentucky actually has to consumed the
data privacy law that goes into effect in January. It's
not great, but it's a lot better than nothing, which,
unless something has changed recently, is what you have in Ohio. So,
believe it or not, Kentucky actually be to hire to
serve the useful, probably for the first time ever. But
that said, you know, it is hard. I mean, you know,
(25:20):
once your data is in any electronic form, it's difficult
to scrub. You can go around individually to different companies
and like delete your browsing history, delete the you know,
the location tracking of of the maps apps that you're using.
You know, Google has the capability to get in and
see this stuff and turn it off, which I have done,
by the way, and I recommend and in general I
try to avoid using anything from Google. You know your
(25:42):
point though, I mean, Google is almost synonymous with search.
People don't say I'm going to go search the internet
or search the web. To say I'm going to Google
something I had literally become a verb. Despite the fact
that there are plenty of other more privacy friendly search
engines out there, like the brain Start, the Brave search engine,
or the start page search in so there are many options, right,
and again I'll come back to those in a second.
(26:04):
But to your point, you know, there's no right to
be forgotten per se, or you can just go out
and say erase me from all of this stuff. You
can do it individually. It's super time consuming and in
most cases they use dark patterns to make it really
difficult for you to even figure out how to ask
for it and then actually say delete my stuff. There
are private companies that claim to do this. You pay
(26:26):
them and they go out and erase your data. About that, Again,
it's not in these companies' interests to make it easy
for you to erase your data and order to stop
the tracking, because again, that's where the bulk of their
revenue comes from.
Speaker 1 (26:41):
All right, Dave, In the about a minute and a
half we got left, I'm going to ask a self
serving question here, just for my own gratification. I started
about a year ago using a search engine called duck
Duck Go. For the reasons that you've already stated, is
that one of the good ones.
Speaker 4 (26:57):
Does that keep me more secure?
Speaker 5 (27:02):
Let's separate privacy and security very briefly, right, they're not
the same thing.
Speaker 4 (27:06):
Privacy privacy.
Speaker 1 (27:07):
I meant to say, Yeah, it's better.
Speaker 5 (27:12):
You know, there are so I put together list guys,
and you know, if if folks follow me on social
media LinkedIn or x in particular, I'm always talking about
this stuff, trying to share information. I put a blog
post together on LinkedIn. You can easily find it. It's
it's called my Privacy Friendly Personal Technology Stack, and I
sent you guys a link to it. I'll post it
with the show notes since so forth tonight when you
(27:33):
guys put this out. But I've got a list of
all of the tools I use from a personal standpoint, right,
not business personal like I use Proton email. I for
search engine, I like Brave Best Duck dout goes a
better choice than Google than Google. Start page, and you'll
see in my notes here on the page anything except
Google web browser. You know, I use the Brave browser
(27:55):
or the Safari browser. I don't use Google Chrome. So
I've got a whole list of things here, my recommendations,
my personal choices. I encourage people to check it out
and start to make the shift.
Speaker 1 (28:05):
All right, this is great. You've already given us the
all Worth advice for this segment. Follow Dave Hatter on
x or LinkedIn and take advantage of these free resources
he's putting out to everybody.
Speaker 4 (28:17):
Thanks so much, Dave.
Speaker 1 (28:18):
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
Simply Money presented by all Worth Financial on Bob Sponsorer
along with Brian James. Do you have a financial question
you'd like for us to answer. There's a red button
you can click while you're listening to the show right
on the iHeart app.
Speaker 4 (28:40):
Simply record your question and it will come straight to us.
All right, Brian, you ready to roll here?
Speaker 3 (28:47):
Let's hit it, hit me. We got questions I think,
don't we?
Speaker 1 (28:50):
Mark in mount Lookout says we're worth around one point
five million dollars and most of it is invested in
mutual funds. Should we be considering direct indexing to achieve
some tax efficiency?
Speaker 2 (29:03):
Well, Mark, that's a great problem to have, isn't it.
It's still a little bit of a problem because there's
an opportunity here. So you're worth one and a half
million dollars. Mark's not saying though, whether we don't know
the tax treatment right, asset location is very important. We
don't know the tax treatment of these dollars. Is this
inside an IRA four ohe K orre these taxable accounts?
Speaker 5 (29:20):
Uh?
Speaker 2 (29:20):
And so what we're what we're thinking of there is
opportunities to move things around and as investments move up
and down, can we do uh, you know, some tax
loss harvesting? The best most efficient way to do that
is with direct indexing, meaning you're still following the processes
of having, you know, a diversified index based portfolio. However,
rather than in one mutual fund, you've got the individual
(29:42):
holdings there that are each of them doing whatever they do,
and therefore you can move you can move them around
accord and you need to gain some tax benefits. So
with mutual funds you can't do that because you can't
control what's inside them. What I would suggest Mark is
understand first of all, what is the tax treatment? If
if these are in taxable accounts, then absolutely you want
to it's it's probably time to start looking at in
a more efficient process. Especially you know every December when
(30:03):
we start looking at capital gain distributions, direct indexing will
not will not have that effect on it. So that
is definitely something I would I would learn about. All Right,
so we're gonna move.
Speaker 3 (30:11):
On to Robert and Villa Hills.
Speaker 2 (30:13):
Roberts says they're worth about two and a half two
and a half million dollars and they've got adult kids
all over the country. So how did they set up
their a state plan so it's easier for their kids
to administer from afar And I'm thinking they probably had
to deal with this with their own parents.
Speaker 3 (30:24):
Bob, what what do you got for us?
Speaker 1 (30:26):
Well, a couple of things you want to you want
to take a look at what the state inheritance tax
laws are. And really the key thing, Robert, is from
a state inheritance tax standpoint, where you live and where
you and your wife pass away, that's gonna drive things
as far as any state inheritance tax. So as far
as administration goes to me, the key here is to
(30:50):
have the right person as your executor or your success
or trustee if you have a trust in place. And
I actually dealt with this situation early today a longtime
client in their late eighties, they have four adult kids.
The person that they have designated to handle all this
stuff for them executor and successor trustee, happens to live
(31:12):
in Colorado. So I knew that this gentleman was coming
in town to visit, and I took advantage of that,
and we had a meeting today with the couple and
this executor successor trustee from Colorado who's in his late
fifties early sixties, brought the attorney in. We coordinate already
(31:33):
with the CPA, and we were able to just walk
through the estate plan in person in a room, so
we know how it's all going to work. Everybody understands it.
And look in this world of Zoom today. As long
as you've got a good responsible advisor helping your kids,
even the product custodian, if you've got beneficiary designations in
(31:56):
place and all that, a lot of these meetings can
happen on zoom, email and everything else.
Speaker 4 (32:01):
It's not that hard to administer.
Speaker 1 (32:03):
It's just having the right you know, people in place,
the right folks, and the right position on the field,
if you will. So I think that's the key point
here is figure out which of your kids is the
right person to administer this thing and follow the wishes
that you and your wife have set out in your
state plan. Hope that helps, all right, Olivia and Fort
(32:24):
Thomas says, We've saved one point nine million dollars and
I'd like to semi retire and consult part time. How
do we build a plan that blends work income with
investment withdraws Brian.
Speaker 2 (32:36):
Yeah, consulting can be a great opportunity for retirees. Is
almost kind of like a pre retirement, meaning I still
got my head in the game. I'm still talking to
my network contacts and all that, but I'm not really
nine to five anymore, and I'm kind of doing it,
you know, from wherever I want, which is great.
Speaker 3 (32:50):
That's a great opportunity for you.
Speaker 2 (32:52):
So the first thing you need to do, Olivia is is,
hopefully you've sat down. I don't know if you're single
or oh you said we so I guess there's another
person in the mix. But anyway, oh yeah, how do
we build a plan that blends income with investment withdraws?
Speaker 3 (33:03):
Well, first of all, figure out what the target is.
Speaker 2 (33:05):
Have you sat down and figured out exactly what it
costs you to a keep your household afloat, but b
do all the things that you'll want to do with
your extra free time, which oftentimes comes along with spending.
Speaker 3 (33:15):
So make sure you understand what that is.
Speaker 2 (33:17):
And then you're going to want to look at the
notion of here's how much I can generate from consulting,
and I would lean into spending those dollars. First you've
paid income taxes on them. I'm presuming you're going to
do this in some kind of like a ten ninety
nine or some or sole prop kind of environment where
you're your own little business. Yes, there are opportunities to
plan for retirement. You can set up your own little
retirement plan if you wanted to. You may not have
(33:37):
to because you've saved a good amount. Don't get too
hung up on I must be in the mindset of
always saving. And also rid yourself of the notion that
it is evil to pull money out of my pre
tax iras because I have to pay taxes and those
are to be avoided.
Speaker 3 (33:50):
There is no way to avoid them.
Speaker 2 (33:51):
You will pay taxes eventually, but presumably your income will
be dropping as part of the ship. So make sure
you're comfortable with the idea you're going to pay income taxes,
and then just figure out again exactly what you need.
And there's a way to make sure you stay under
the brackets. Maybe you just want to try to stay
under the twenty two percent bracket or something like that
as a target, so I would look into that. We've
got time for one more. So let's do a Lisa
(34:12):
and Montgomery. We've got about two million dollars saved, Bob,
but our spending habits are not very consistent, and they
want to know about building a retirement plan that works
even if a lifestyle is somewhat unpredictable.
Speaker 1 (34:22):
Well, Lisa, as you sit down and do your plan,
and what I always try to do is separate what
part of our lifestyle is in fact unpredictable, And I'm
taking that to mean like vacations and gifts to kids
and all that, versus just the basic expenses that you
know you're going to have, the cable bill, the utility bill,
(34:42):
the property taxes, all the food, all the stuff that
you know you're going to have, and segregate those two
things and then stress test a financial plan to put
some boundaries around what that unpredictable portion is capable of being.
And that way you'll you can have some flexibility and
make sure you don't upset the Apple card at the
same time. All right, Coming up next, Brian has his
(35:05):
bottom line on the Secure Act two point oh. You're
listening to Simply Money presented by all Worth Financial on
fifty five KRC the talk station. You're listening to Simply
Money presented by all Worth Financial on Bob Sponseller along
with Brian James, and it's time for Brian's bottom line. Brian,
you've got some thoughts on the Secure Act two point oh.
(35:29):
Always interested in hearing your insights and research.
Speaker 4 (35:33):
Break it down for.
Speaker 2 (35:33):
Us Secure Act two point oh. We're gonna We're gonna
a little blast from the past here. This was put
in place a few years ago, but it had some
different provisions that kicked in over time. So we have
to kind of go back and review everything make sure
we don't get blindsided by some of these, because there
are some features kicking in here in twenty twenty five
and again in twenty twenty six. So, first off, for
folks between the ages of sixty sixty and sixty three,
(35:56):
the law now allows what's called a super catch up contribution,
what you're familiar with ketchup contributions.
Speaker 3 (36:01):
If you're over fifty, you can throw a little more in. Well.
Speaker 2 (36:04):
Now between sixty and sixty three, you get to throw
in an extra two hundred and fifty dollars in your
four oh one K this.
Speaker 3 (36:10):
Year, provided that your employer allows it.
Speaker 2 (36:12):
That's something to look into you if you are of
those ages and you're feeling like there's a surplus cash
laying around, whether you might be able to either defer
those taxes or maybe sneak it into the roth side
and never pay taxes again. So here's another one, an
important change. This one's coming in twenty twenty six. If
your income is above one hundred and forty five thousand.
Any ketchup contributions you make will have to be done
on the WROTH side. This is the post tax side.
(36:34):
You're not going to get a deduction, but it'll go
in and grow tax free from that day forward, including
ten years beyond your death, as long as it stays
in the roth ira that would result from all of this.
Speaker 3 (36:45):
So again the rules are tightening a little bit on
this stuff.
Speaker 1 (36:48):
Well, Brian, you called out this WROTH provision, you know,
earlier this week on the show, So I think the
real correct me if I'm wrong here, the real to
do item is if you find yourself falling into this category.
You know, as we approach twenty twenty six, now's the
time to go to your HR department and say, hey,
does our four oh one K plan allow for ROTH contributions?
(37:10):
And you better push them hard to make sure it does,
because if they don't act on this and allow those
WROTH contributions to take place within their plan, these higher
income folks are going to miss out big time on
some potential retirement savings. Right, Brian, this is an important
feature that's you know, the clock's running here. We're getting
to the end of twenty twenty five we got to
(37:31):
get all our ducks in a row now.
Speaker 2 (37:33):
Exactly, And this is this is how because we don't
want to be sitting at this time next year realizing
there was something we could or should have been doing
all year long.
Speaker 3 (37:39):
So what we're what we're doing right now.
Speaker 2 (37:41):
This is called tax planning, figuring out what's going on
this year, what should I still do while I have time,
versus tax preparation, which is here's what happened last year,
and I got to settle up with the irs.
Speaker 3 (37:51):
So another less discussed but real risk here.
Speaker 2 (37:54):
You know, in tougher economic times, employers often will try
to cut or maybe suspend that four to oh one
K match to reduce costs, to try to make whatever
numbers they've committed to you for that year. That's not
a guarantee, but being mentally prepared is really a good
idea to make sure that you know if that does happen,
If your company is kind of hitting the skids a
little bit, that match gets reduced, you might want to
(38:15):
try to shore up the savings that you're putting in
there so you can kind of stay in that stay
in that window. So let's kind of summarize here. If
you're sixty to sixty three and your plan allows for it,
look to boost those contributions with that super catchup. If
you're a high earner and you are so inclined, you
ought to look at ROTH versus traditional stimulations. Now take
a look at which approach might be better under these
(38:36):
new rules. Don't assume that the defaults are optimal. Choose
your allocation right. Make sure you understand exactly where these
dollars are landing.
Speaker 1 (38:44):
Great stuff, Brian, thanks for listening tonight. You've been listening
to Simply Money, presented by all Worth Financial on fifty
five KRC, the talk station
Tonight, what wealthy retirees regret the most and what you
can learn from them. You're listening to Simply Money present
up by all Worth Financial. I'm Bob Sponsller along with
Brian James. You've done everything right. You've maxed out your
four oh one K for years, if not decades, You've
built a portfolio worth two million, five million, ten million
(00:29):
dollars or maybe even more, and now you've got the
financial green light to retire. But here's the twist. For
some retirement isn't quite the reward they expected. Brian, there's
a lot of other things to consider here before we
pull the ripcord and venture into this new world called retirement.
Speaker 2 (00:49):
Well, let's start with the most common mistake that we
see when we're doing financial plans for people, and a
lot of times this is we have people who have
retired maybe before we put a financial plan together, which
is okay, but maybe not the best idea. So what
that means is that they don't really have a clear
idea of what they can get away with, right, So
we have to start with, but what's the minimum?
Speaker 3 (01:06):
How do I keep my household a float?
Speaker 2 (01:08):
So we don't have that level of financial stress and
then what's the surplus that's left over so I can
go do the fun stuff that I've been wanting to
do for years. So this happens a lot, especially when
people retire younger or after selling a business, when there's
just this huge influx of cash and it finally feels
like you have time and freedom and money. Right, that's
the trifecta we all hope for. You don't get them
all at the same time. You know, suddenly there's a
(01:28):
new house in Florida, You're doing some luxury travel, helping
out the kids and whatever.
Speaker 3 (01:32):
This is where the income planning matters, right.
Speaker 2 (01:34):
Just because you have the portfolio of the size that
you always dreamed of, doesn't mean you can withdraw from
it without a plan and just fling money all over
the countryside.
Speaker 4 (01:42):
Willy nilly.
Speaker 1 (01:45):
Yeah, yeah, I've seen this happen a couple times, even
this year. You know, folks finally retire and these are
hard working people. They've just put their nose to the
grindstone here for decades and they've built up sizable amounts
of money big net worse. But boy, as soon as
they retire, they see that big account balance that they
(02:05):
probably haven't stared at or looked at for years, and
then all of a sudden, we see, all right, we're
not gonna buy one, but for luxury collector cars, we're
gonna build a I don't know, a barn to hold
ten cars in hopes of building a collection. You mentioned
the new house in Florida. I mean, people see that
big dollar amount staring at them, and they feel like
(02:27):
it's time to just spend, spend, spend, And sometimes we
gotta pull back, put the put the brakes on and say, hey,
let's make sure we're still following a financial plan, just
because the numbers on that net work statement appear to
be high and sometimes are Yeah, And so one of the.
Speaker 2 (02:45):
Things that comes along, you know, when we're doing those
is you know, maybe you've got the money to do
these things, but all of a sudden, you've got a
multiple different kinds of tax treatment. That's something we called
asset location, meaning what type of account is this particular
asset in that you're gonna draw. And one of the
biggest regrets that we hear is why didn't I do
more roth conversions earlier from our older clients, And those
(03:07):
are folks.
Speaker 3 (03:07):
Who maybe celebrated those years.
Speaker 2 (03:11):
There's kind of a doughnut hole between when you retire
and maybe you haven't turned on Social Security yet, maybe
you're living off of savings. Some people, literally, you know,
wind up with a couple hundred thousand dollars of cash
in a savings account, Spend that down for a while
and celebrate the fact that they're in a zero percent
tax bracket. I don't have any income, therefore I'm literally
not paying any taxes. What a heavenly life. Meanwhile, there's
a gigantic pretax four oh and k or Ira sitting
(03:33):
out there being ignored when it could have been getting
converted into wroth iras. So don't miss those types of
opportunities to understand how a roth conversion works, in what
the taxes would be, and more importantly, what the benefits are.
Not only to you, because you'll be reducing your required
minimum distributions, which are aged seventy three or seventy five.
That's when Uncle Sam has a gun to your head
makes you start paying taxes on those dollars. You can
(03:54):
reduce those with Roth conversions. And also, not only does
it grow tax free for you during retirement, your kids
are going to inherit it, or whoever your errors are,
they will get ten years to continue to let that
thing grow tax free after they've inherited.
Speaker 5 (04:09):
Yeah.
Speaker 1 (04:10):
Another opportunity out there that people don't look at nearly
enough is the opportunity to take advantage of a zero
long term capital gains tax rate if your income really drops,
as you mentioned, Brian, in those first couple of years
of retirement up to over like ninety six thousand dollars
of taxable income. This is an opportunity in those first
(04:30):
couple of years of retirement to maybe slowly diversify out
of a concentrated stock position, and in some cases Brian,
pay nothing in capital gains taxes and use some of
that those stock proceeds to live on, you know, to
support your income for a couple of years. We've seen
this happen several times just this year, where folks just
(04:51):
look at us like, hey, we didn't know we could
do that, And it kills the proverbial. You know, multiple
birds with one stone entering some income, you're avoiding taxes,
and you're properly diversifying your portfolio.
Speaker 2 (05:06):
Yeah, and I want to reiterate that. So what we
just discussed there was two different points. If you truly
hit that doughnut hole where you've got enough assets to
live on without generating any real income just spending down savings,
then yeah, you're gonna be in a zero percent bracket.
That gives you two opportunities, one on the IRA side,
the pre tax side to do rotten versions. And where
Bob was talking about capital gains, that means if you've
got some stocks sitting in a taxable account that you
(05:27):
maybe you've had P and G forever and you've always
wanted to diversify a little bit out of it and
use those dollars, but you've been terrified of the of
the tax hit. Then now you're in an opportunity when
you have that little income, you literally could be paying
no capital gains tax if you can control that amount.
So moving parts to that, but definitely worth looking into.
Speaker 1 (05:44):
Yeah, it just comes down to having a strategy as
far as where your income sources are going to come from,
and make sure you don't make the mistake of just
selling the wrong assets first, because it's counter intuitive, counterintuitive
sometimes Bryant for people that have just sought away for
decades pre tax savings into these four oh one ks
and iras it almost feels sacrilegious to do a row
(06:09):
because I gotta pay some taxes.
Speaker 4 (06:10):
I gotta pay some taxes.
Speaker 1 (06:11):
I've always been told for twenty thirty forty years, never
pay any taxes, where in reality, paying a little bit
of taxes now can, as you've already pointed out, can
pay big dividends down the road, not only for you,
but for your heirs. You're listening to Simply Money presented
by all Worth Financial. I'm Bob Sponseller along with Brian James.
All Right, we talked a little bit about some of
(06:33):
the financial watchouts here, Brian, as we approach approach retirement,
let's get into some of the more psychological watchouts. You know,
talk about losing purpose and structure and just you know,
the adjustment to no longer being a big shot in
a big company and having a whole lot going on
and a lot of people to manage and suddenly going
(06:55):
to nothing. That's a big adjustment for some people.
Speaker 2 (06:59):
It is a lot of times we hide behind the
notion that, you know what, I can't retire, that don't
have enough money, got to build more, build build, build,
build build, And we really never give any thought to
the non financial psychological shifts that we're going to go
through when we do retire. When the world changes, world
gets a little bit smaller, the walls might close in
a little bit. Sounds fantastic to have all that free time,
but on the other hand, you are giving up something.
(07:20):
You're going to have a vacuum of time to fill
with something, and what's the something going to be. So
we've seen this with ultra successful professionals, CEOs, physicians, entrepreneurs.
They retire and then they struggle, and also happens with
you know, really anybody out there. You go through this,
the calendar goes from a full and I got a
lot of stuff going on. It's been four days since
I've seen a human being because I've been sitting in
(07:40):
the house for a week. So if studies show that
the retirees that don't have structure are at greater risk
for cognitive decline and mental health challenges, you might be
thinking of people that you've met, family members and friends
that have gone through this and you notice a change
in them when they just didn't have anywhere to go
all of a sudden after a couple of weeks, that
kind of sets in and so that's why we work
so much with how do we with retirees and how
(08:01):
do we structure this? What are you going to get
involved in that once we've solved the financial problem? Now
what think about what happens once you've spiked the football
that the financial solutions will work for you?
Speaker 1 (08:12):
Yeah, Brian, I've been blessed to have more than a
few older gentlemen in my life that have influenced me greatly.
Folks that you know, fifteen twenty years older than me
and have walked down the road that I'm about to
walk down. And it's important to have people like that
in your life. And I can think of one really
impactful thing one gentleman told me a few years ago.
(08:33):
He said, Hey, when you move toward retirement, you just
move from a stage of achievement to a phase of influence.
You've got to think about influence. Who do you want
to influence and why and how are you going to
go about doing that?
Speaker 4 (08:50):
And the people that are able to.
Speaker 1 (08:51):
Make that transition focusing on influencing others, influencing your kids, grandkids,
the world in general for good. If those are the
people that are living fulfilled lives, you can only play
so much golf and watch so much Netflix and celebrate
celebrate being retired. Sooner or later, you've got to have
some purpose in your life. And Brian, I find that
(09:14):
the retirees that have done that are really living rich
and meaningful lives and they're enjoying that, you know what,
out of their retirement years because they're serving other people.
Speaker 3 (09:25):
Yeah, I think so too.
Speaker 2 (09:26):
And so some of you let me move on to
another story just occurred to me, uh is. And this
is the ones that come expressing regret over not having
trained their own family members, their children on how finances work,
so not thinking generationally, you know, and they'll say things
like I wish we talked more about legacy. So if
you do have a healthy network, there's a high likelihood
your money is going to outlive you. That was kind
(09:47):
of the point, right, So the whole question is what
happens to that when you're gone. So this can be
you know, this might be philanthropy, family education, gifting strategies
to charities that are important to you, and you can
involve your family in these. You know a lot I
know a lot of families. It'll have a you know,
it's an excuse to get everybody together, or maybe a
tradition at the holidays that we're all going to decide,
you know, where this family foundation that we have or
(10:08):
the donor advice fund that we set up years ago,
who are we going to support with that this year.
Let's talk about that as a family and make decisions.
And then that way, when the matriarch patriarch people are gone,
then there is a tradition to fall back on. The
children will remember that, Hey, this is something was important
to mom and dad. It's not all about us living
our lives with us this good fortune they've given us.
We want to support other things too, and we remember
(10:29):
what our family cited was important to us over these
holiday gatherings and it gives something to continue a tradition there.
Speaker 1 (10:35):
Yeah, and it's not even necessary to share exact dollar
amounts if you don't want to go there just yet,
just sit down, like you said, with your kids and
even grandkids and just talk about the things that you're.
Speaker 4 (10:47):
Doing with money and time.
Speaker 1 (10:50):
A lot of times the kids they don't know what
a donor advised fund is.
Speaker 4 (10:54):
They don't know that you.
Speaker 1 (10:55):
Serve on a charitable board because you know, let's face it,
a lot of folks humble. They don't brag about these things.
They just do it. It's part of their lifestyle. I
think you owe it to your kids and grandkids to
share a little bit about your life and what you're doing.
And I think a lot of times, Brian, for the
families that are willing to do this, the light bulb
goes off for their kids. They say, ah, now we
(11:19):
know what mom and dad have been up to. And
you know, you can't make them do everything that you've done,
nor do you want to make them do that.
Speaker 4 (11:26):
But hey, if they develop a little bit of a.
Speaker 1 (11:29):
Vision for how they want things to run in their
own life down the road, you can coach them through that.
You can model it for them, show them how to
do that. And that's a huge form of legacy to
leave for your family, you know, on top of just
leaving them a big pile of money with no direction.
Here's the all Worth advice. Retirement isn't the finish line.
(11:52):
It's simply the launchpad for the next phase of your life.
Speaker 4 (11:56):
Next.
Speaker 1 (11:57):
How to turn severance into strategy of void costly mistakes
and set up your next chapter with purpose and precision.
You're listening to simply money presented by all Worth Financial
on fifty five KRC.
Speaker 4 (12:09):
The talk station.
Speaker 1 (12:12):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James. One point five
million dollars in a four to one k two point
six million with kids still on the payroll, and one
point nine million and ready to semi retire. These are
just some of the questions we're gonna deal with straight ahead.
At six forty three. Well, it appears the labor market
(12:35):
is weakening somewhat and Kroger and P ANDNG have made
layoff announcements. In today's economic and corporate landscape, even senior
executives and top tier professionals at Fortune five hundred firms
are not immune to workforce reductions. For high earners with
significant wealth, a forced transition can bring a lot of
(12:57):
challenges and a lot of opportunity too, Brian, let's get
into that.
Speaker 2 (13:02):
Yeah, So this is where a situation where the labor marketing,
the labor market is quieting down a bit here, so
you might you might be in a situation where you're
hearing rumblings of pink slips and we've seen we've heard
that as you mentioned. We've heard that around here from
Kroger and p ANDNG so forth. So even senior executives,
top tier professionals that Fortune five hundred firms are not
safe from this.
Speaker 4 (13:20):
Uh.
Speaker 2 (13:20):
You know, the companies are making decisions that they need
to make to maintain those profit margins at the end
of the day.
Speaker 3 (13:25):
That's that's what keeps things afloat. So this happens to you.
Speaker 2 (13:28):
If it's ringing a bell that this might be in
your world, let's talk about what you should do in
the short term. First of all, don't don't rush into anything, pause,
post process, and reframe. Right, So this just means take
a breath from any executives. Your entire identity is associated
with your with your professional career, and you're also just
your personal worth. I'm not talking about networth. I'm talking
(13:48):
about the reason you get out of bed in the morning.
Losing that role at the top can feel very, very disorienting.
So you have to take a breath and just acknowledge that, yes,
this sucks, this hurt, but also, now, what are the
things that bothered me about out my past situation, Because
here's a giant opportunity to go find a situation that
has more pros and less cons than my old situation.
Speaker 1 (14:09):
Yeah, Brian, I'm thinking of one couple in particular where
one of the spouses had a significant income, a real
strong leadership position in a firm, and that firm downsized
and she was left without that big leadership position. And
as you already pointed out, Brian, it's a gut punch.
It's an emotional time. And the thing that we like
(14:30):
to make sure we assure people of is if we
can get you in the in here and look at
your overall financial plan and just remind you that the
financial plan to sound, then oftentimes that can allow people
to just do what you just said, pause and process
for a little bit and not feel like they've got
to make any short term drastic decisions, because it does
(14:54):
take time and mental energy and networking and just processing
to figure out what those next steps are. I mean, granted,
when you have one of these unexpected you know, life
changes come up. Yeah, the linear spreadsheet is gonna go
according to what we mapped out, you know, two years ago,
for the next twenty years. But that doesn't mean that
(15:15):
life has come to an end and you're gonna go broke.
You just got to kind of call an audible redirect
and assess. So it's important to just make sure everything's
okay from a financial standpoint, and that way, I think
people can take that time, that time and emotional space
that they need to reprocess those next steps.
Speaker 2 (15:36):
Yeah, and it is just making sure that you understand
to take that time. That's a very important way that
you just put it there. So and part of what's
going to take some of that time is making sure
that you're you're you do have to make sure that
the puzzle piece is all still fit right. So we
always want to make sure that we're in a position
where we can cover the bills. That's making sure we've
got a liquid assets available and moving on to understanding
(15:58):
what your severance package is, what's the payment structure. You're
gonna get a lump sum out of that, or they're
gonna be staged installments. If you're in a top tax bracket.
Installment payments can can spread that out and keep that
from hurting too much if you've got any control over it,
and reduce some of the tax drag on those assets.
Equity and incentive awards, restricted stock units, performance shares, all
this stuff. Options fanom equity. Each of those have different
(16:20):
vesting treatments and tax treatments, and all of them are
gonna have to be considered in terms of when are
you gonna need dollars and how are you gonna get
to them to pay your bills, and to make sure
you're not blindsided come April when it comes time to
unwind the taxes on all these things.
Speaker 1 (16:33):
Yeah, what you're getting into now, Brian, is some of
the actual blocking and tackling that a good fiduciary advisor
should be sitting down with you and going over because again, emotionally,
people don't want to look.
Speaker 4 (16:46):
At this stuff.
Speaker 1 (16:46):
They don't want to pull out these deferred comp statements
and incentive award statements and all that they're they're worried
about the fact that they just lost their job. But
again it's this is why you hire an advisor to
go look at what you've got, look at the timing
on some of these distributions, and then at least help
you come up with a strategy oftentimes maximizing tax efficiency,
(17:10):
you know, to make sure you just don't make some
poor decisions at a bad time because you're emotionally wrapped
up in the job change situation, and you just overlook
some of these benefits that you've worked so hard to
build for many years. We want to make sure you
take full advantage of them. You you already mentioned one.
What are a couple of the other things that we
(17:31):
need to be looking at with people that are in
this situation, Brian, when.
Speaker 2 (17:36):
I look for opportunities first a tax loss harvesting. If
the market has dropped, right a lot of times that
it can happen at this time when the when when
If your company is trying to slow down and trying
to reduce costs, that might mean that this is happening
at a time where the economy has weakened a bit
and uh and they're they're Therefore, the stock market may
have pulled back, so you can look for some opportunities
to tax loss harvest which will which basically means selling something,
(17:58):
looking through your portfolio and finding something sitting at a
lost position, and then offsetting whatever gains you have to
generate with those assets that have or those benefits and
things that have vested, you can offset some of that
with tax loss harvesting. So also always take a look
at your diversification because you're going to be moving stuff
around anyway. This is a great chance to make sure
that you're not overweighted in a certain area. If you've
(18:18):
made any money in the last ten twenty years, you
probably have an overweight to the technology sector.
Speaker 3 (18:22):
It's kind of tough to have avoided that.
Speaker 2 (18:24):
So look for that and take the opportunity with the
new cash that's coming from these other things unwinding to
make sure that your portfolio is back in balance. And
then of course the comprehensive wealth planning right this is
another great time. You're going to have some free time here,
so take that time to make sure that the trusts
that you've set up are funded the way you wanted
them to be, and they're written the way you wanted
them to be, so that everybody understands in advance this
(18:46):
was the mom and dad's intent in getting these assets distributed.
It's these people in these charities. And make sure that
what is written on that piece of paper matches what
is in your head. Do those gifting strategies reflect those
latest exemption thresholds, you have your philanthropic beliefs changed at all?
Are their different organizations? And also make sure you've got
(19:06):
a coordinated advisory team involved.
Speaker 3 (19:08):
Here.
Speaker 2 (19:08):
You have a financial advisor, that's the quarterback who can
kind of be a mile wide and an inch deep.
That person will help you figure out what other specialists
you need. You might need a CPA, you might need
an attorney, you might need an insurance specialist. These are
all things that you should be thinking about when you
find yourself in this situation.
Speaker 1 (19:23):
And ideally we have all of that team of advisors
working together, coordinating together. That's where the secret sauce is
made and where we can really deliver.
Speaker 4 (19:33):
Some tremendous benefit. Here's the all Worth advice.
Speaker 1 (19:36):
A forced layoff doesn't erase financial security. It just simply
gives you an opportunity to redefine the strategy by addressing
immediate needs while simultaneously refining long term structures. You protect
what you've built and you create the foundation for what
comes next. Speaking of next, how Google makes billions of
(19:58):
dollars off of you, and.
Speaker 4 (19:59):
How to opt out.
Speaker 1 (20:00):
You're listening to Simply Money presented by Allworth Financial on
fifty five KRC the talk station. You're listening to Simply
Money presented by all Worth Financial on Bob Sponseller along
with Brian James joined tonight by our good friend, our
cybersecurity and technology expert, mister Dave Hatter.
Speaker 4 (20:21):
Dave, thanks as always for carving out some time for
us tonight.
Speaker 1 (20:25):
And you've got a topic to discuss tonight that I
think everybody is going to be interested in.
Speaker 4 (20:31):
And it's our.
Speaker 1 (20:31):
Good friend Google who's built their entire business model to
just make billions and billions of dollars off of our
personal information. And you've got some updates here on how
to actually opt out of this whole arrangement.
Speaker 4 (20:45):
Lay it honest, Dave.
Speaker 5 (20:48):
Yeah, So, Google, which you know is now part of
parent company Alphabet makes an enormous amount of money off
of your data. And I'm not saying that's necessarily the
various guys. You just have to understand the model here.
We'll call it survance capitalism. And the bottom line is,
whether it's Google, Meta, Facebook's parent company, or other companies
that deal primary in your data, you are not the customer.
(21:10):
You are the product. Right. If you're not paying with money,
you're paying with data. Now, again, I'm not saying it's
necessarily nefarius. You just need to understand the trade off.
And the good news is there are privacy frimly options
out there. I'll get to that in a minute, but
to give you some scale of this, so Wired magazine
did a really good video that explains this in a
lot of detail, and they show some stats in here
(21:31):
and says in twenty twenty four, Google made nearly seventy
five percent of their revenue off of your data. Things
like YouTube and the videos you watch, the Google Chrome,
the Google search engine, Google advertising, all that sort of stuff.
Do sell other products like Android phones and such, but
roughly seventy five percent of their revenue is coming from
(21:51):
your data. And you know they're not looking to protect
your privacy, despite one of the side by side comparison
that I encourage people to do this all the time.
If you go to the Apple App Store. You know,
Apple a few years ago caused the big shake up
in the industry because they started requiring people that want
to deploy apps like the Gmail app for your phone
(22:13):
from Google, for example, or the Google Chrome browser or
the Brave browser. They made developers start putting it together
what they call a privacy label. Think of it like
the nutrition label on a can in the store, that
tells you the data they want to collect and I
just encourage you go take a look at the Google
Gmail app or the Chrome app versus like the Brave
(22:35):
browser and see the AMLA data it collects, and then
ask yourself, well, why does it need all of this
incredibly sensitive and granted or data about me to do X,
y or Z. Now I to say this TikTok. There's
plenty of egregious examples out there. That's one of the
reasons why I'm not a TikTok fan. But when you
look at these things, it starts to paint a real
clear picture that you know, you are their product. They're
(22:56):
making enormous amounts of money off of you. And my
real issue was this is not so much the money
or the data even, it's how that data can be
sold used downstream. And I'll bet every one of you,
and probably both of you, have recently gotten a letter
telling you your data's been breached somewhere. I just got
my latest, one of about nine now from our good
friends to TransUnion. You know, do I do business with TransUnion?
(23:20):
Not directly, but they're a credit union or a credit bureau,
so they have all my data already, and now it's
been leaked yet again. And this is not helpful to
you as a consumer. So the point is, rather than
continue to feed the monster of these giant companies, the
Metas of the world, the Googles of the world, because again,
this isn't just a Google slash alphabet issue. There are
(23:41):
privately friendly options you can use in many cases at
low cost or free that will provide I would argue
functional parody the same capabilities, but are much more focused
on your privacy. And now, you guys know I'm a
intential hack guy, but I encourage every one of your
listeners to start to think about how can you disconnect
from the machine and how can you start to focus
(24:03):
on limiting the amount of data about you that's out
there and still get the services and features and functions
you need.
Speaker 2 (24:09):
Hey, Dave, So let's so, I think we're talking to
a lot of people who probably fell in love with
Google twenty five years ago when it became so much
better and when it became such an easy way to
search and get the information that you need, and then
that kind of sucked everybody into the vortex here a
little bit. What if if you've been doing that for
years and your data is all as out there, can
you do anything to unwind that I remember, you know,
(24:30):
discussions of the right to be forgotten and all that
kind of thing. Is that a thing in the United States?
Can I go back and tell them to forget everything
I've ever told them?
Speaker 5 (24:38):
Well, sort of. It's a good question. Like in Europe,
you've got the GDPR, the General Data Protection Regulation that's
got some very stringent privacy regulation. There's a hodgepodge quilt
of laws in the US. About nineteen states have some
kind of law. Californias is very stringent relatively speaking, and
it's kind of similar to the GDPR. You know, I
(24:59):
like to drive my good friends in Ohio because you know,
I live in Kentucky. Kentucky actually has to consumed the
data privacy law that goes into effect in January. It's
not great, but it's a lot better than nothing, which,
unless something has changed recently, is what you have in Ohio. So,
believe it or not, Kentucky actually be to hire to
serve the useful, probably for the first time ever. But
that said, you know, it is hard. I mean, you know,
(25:20):
once your data is in any electronic form, it's difficult
to scrub. You can go around individually to different companies
and like delete your browsing history, delete the you know,
the location tracking of of the maps apps that you're using.
You know, Google has the capability to get in and
see this stuff and turn it off, which I have done,
by the way, and I recommend and in general I
try to avoid using anything from Google. You know your
(25:42):
point though, I mean, Google is almost synonymous with search.
People don't say I'm going to go search the internet
or search the web. To say I'm going to Google
something I had literally become a verb. Despite the fact
that there are plenty of other more privacy friendly search
engines out there, like the brain Start, the Brave search engine,
or the start page search in so there are many options, right,
and again I'll come back to those in a second.
(26:04):
But to your point, you know, there's no right to
be forgotten per se, or you can just go out
and say erase me from all of this stuff. You
can do it individually. It's super time consuming and in
most cases they use dark patterns to make it really
difficult for you to even figure out how to ask
for it and then actually say delete my stuff. There
are private companies that claim to do this. You pay
(26:26):
them and they go out and erase your data. About that, Again,
it's not in these companies' interests to make it easy
for you to erase your data and order to stop
the tracking, because again, that's where the bulk of their
revenue comes from.
Speaker 1 (26:41):
All right, Dave, In the about a minute and a
half we got left, I'm going to ask a self
serving question here, just for my own gratification. I started
about a year ago using a search engine called duck
Duck Go. For the reasons that you've already stated, is
that one of the good ones.
Speaker 4 (26:57):
Does that keep me more secure?
Speaker 5 (27:02):
Let's separate privacy and security very briefly, right, they're not
the same thing.
Speaker 4 (27:06):
Privacy privacy.
Speaker 1 (27:07):
I meant to say, Yeah, it's better.
Speaker 5 (27:12):
You know, there are so I put together list guys,
and you know, if if folks follow me on social
media LinkedIn or x in particular, I'm always talking about
this stuff, trying to share information. I put a blog
post together on LinkedIn. You can easily find it. It's
it's called my Privacy Friendly Personal Technology Stack, and I
sent you guys a link to it. I'll post it
with the show notes since so forth tonight when you
(27:33):
guys put this out. But I've got a list of
all of the tools I use from a personal standpoint, right,
not business personal like I use Proton email. I for
search engine, I like Brave Best Duck dout goes a
better choice than Google than Google. Start page, and you'll
see in my notes here on the page anything except
Google web browser. You know, I use the Brave browser
(27:55):
or the Safari browser. I don't use Google Chrome. So
I've got a whole list of things here, my recommendations,
my personal choices. I encourage people to check it out
and start to make the shift.
Speaker 1 (28:05):
All right, this is great. You've already given us the
all Worth advice for this segment. Follow Dave Hatter on
x or LinkedIn and take advantage of these free resources
he's putting out to everybody.
Speaker 4 (28:17):
Thanks so much, Dave.
Speaker 1 (28:18):
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
Simply Money presented by all Worth Financial on Bob Sponsorer
along with Brian James. Do you have a financial question
you'd like for us to answer. There's a red button
you can click while you're listening to the show right
on the iHeart app.
Speaker 4 (28:40):
Simply record your question and it will come straight to us.
All right, Brian, you ready to roll here?
Speaker 3 (28:47):
Let's hit it, hit me. We got questions I think,
don't we?
Speaker 1 (28:50):
Mark in mount Lookout says we're worth around one point
five million dollars and most of it is invested in
mutual funds. Should we be considering direct indexing to achieve
some tax efficiency?
Speaker 2 (29:03):
Well, Mark, that's a great problem to have, isn't it.
It's still a little bit of a problem because there's
an opportunity here. So you're worth one and a half
million dollars. Mark's not saying though, whether we don't know
the tax treatment right, asset location is very important. We
don't know the tax treatment of these dollars. Is this
inside an IRA four ohe K orre these taxable accounts?
Speaker 5 (29:20):
Uh?
Speaker 2 (29:20):
And so what we're what we're thinking of there is
opportunities to move things around and as investments move up
and down, can we do uh, you know, some tax
loss harvesting? The best most efficient way to do that
is with direct indexing, meaning you're still following the processes
of having, you know, a diversified index based portfolio. However,
rather than in one mutual fund, you've got the individual
(29:42):
holdings there that are each of them doing whatever they do,
and therefore you can move you can move them around
accord and you need to gain some tax benefits. So
with mutual funds you can't do that because you can't
control what's inside them. What I would suggest Mark is
understand first of all, what is the tax treatment? If
if these are in taxable accounts, then absolutely you want
to it's it's probably time to start looking at in
a more efficient process. Especially you know every December when
(30:03):
we start looking at capital gain distributions, direct indexing will
not will not have that effect on it. So that
is definitely something I would I would learn about. All Right,
so we're gonna move.
Speaker 3 (30:11):
On to Robert and Villa Hills.
Speaker 2 (30:13):
Roberts says they're worth about two and a half two
and a half million dollars and they've got adult kids
all over the country. So how did they set up
their a state plan so it's easier for their kids
to administer from afar And I'm thinking they probably had
to deal with this with their own parents.
Speaker 3 (30:24):
Bob, what what do you got for us?
Speaker 1 (30:26):
Well, a couple of things you want to you want
to take a look at what the state inheritance tax
laws are. And really the key thing, Robert, is from
a state inheritance tax standpoint, where you live and where
you and your wife pass away, that's gonna drive things
as far as any state inheritance tax. So as far
as administration goes to me, the key here is to
(30:50):
have the right person as your executor or your success
or trustee if you have a trust in place. And
I actually dealt with this situation early today a longtime
client in their late eighties, they have four adult kids.
The person that they have designated to handle all this
stuff for them executor and successor trustee, happens to live
(31:12):
in Colorado. So I knew that this gentleman was coming
in town to visit, and I took advantage of that,
and we had a meeting today with the couple and
this executor successor trustee from Colorado who's in his late
fifties early sixties, brought the attorney in. We coordinate already
(31:33):
with the CPA, and we were able to just walk
through the estate plan in person in a room, so
we know how it's all going to work. Everybody understands it.
And look in this world of Zoom today. As long
as you've got a good responsible advisor helping your kids,
even the product custodian, if you've got beneficiary designations in
(31:56):
place and all that, a lot of these meetings can
happen on zoom, email and everything else.
Speaker 4 (32:01):
It's not that hard to administer.
Speaker 1 (32:03):
It's just having the right you know, people in place,
the right folks, and the right position on the field,
if you will. So I think that's the key point
here is figure out which of your kids is the
right person to administer this thing and follow the wishes
that you and your wife have set out in your
state plan. Hope that helps, all right, Olivia and Fort
(32:24):
Thomas says, We've saved one point nine million dollars and
I'd like to semi retire and consult part time. How
do we build a plan that blends work income with
investment withdraws Brian.
Speaker 2 (32:36):
Yeah, consulting can be a great opportunity for retirees. Is
almost kind of like a pre retirement, meaning I still
got my head in the game. I'm still talking to
my network contacts and all that, but I'm not really
nine to five anymore, and I'm kind of doing it,
you know, from wherever I want, which is great.
Speaker 3 (32:50):
That's a great opportunity for you.
Speaker 2 (32:52):
So the first thing you need to do, Olivia is is,
hopefully you've sat down. I don't know if you're single
or oh you said we so I guess there's another
person in the mix. But anyway, oh yeah, how do
we build a plan that blends income with investment withdraws?
Speaker 3 (33:03):
Well, first of all, figure out what the target is.
Speaker 2 (33:05):
Have you sat down and figured out exactly what it
costs you to a keep your household afloat, but b
do all the things that you'll want to do with
your extra free time, which oftentimes comes along with spending.
Speaker 3 (33:15):
So make sure you understand what that is.
Speaker 2 (33:17):
And then you're going to want to look at the
notion of here's how much I can generate from consulting,
and I would lean into spending those dollars. First you've
paid income taxes on them. I'm presuming you're going to
do this in some kind of like a ten ninety
nine or some or sole prop kind of environment where
you're your own little business. Yes, there are opportunities to
plan for retirement. You can set up your own little
retirement plan if you wanted to. You may not have
(33:37):
to because you've saved a good amount. Don't get too
hung up on I must be in the mindset of
always saving. And also rid yourself of the notion that
it is evil to pull money out of my pre
tax iras because I have to pay taxes and those
are to be avoided.
Speaker 3 (33:50):
There is no way to avoid them.
Speaker 2 (33:51):
You will pay taxes eventually, but presumably your income will
be dropping as part of the ship. So make sure
you're comfortable with the idea you're going to pay income taxes,
and then just figure out again exactly what you need.
And there's a way to make sure you stay under
the brackets. Maybe you just want to try to stay
under the twenty two percent bracket or something like that
as a target, so I would look into that. We've
got time for one more. So let's do a Lisa
(34:12):
and Montgomery. We've got about two million dollars saved, Bob,
but our spending habits are not very consistent, and they
want to know about building a retirement plan that works
even if a lifestyle is somewhat unpredictable.
Speaker 1 (34:22):
Well, Lisa, as you sit down and do your plan,
and what I always try to do is separate what
part of our lifestyle is in fact unpredictable, And I'm
taking that to mean like vacations and gifts to kids
and all that, versus just the basic expenses that you
know you're going to have, the cable bill, the utility bill,
(34:42):
the property taxes, all the food, all the stuff that
you know you're going to have, and segregate those two
things and then stress test a financial plan to put
some boundaries around what that unpredictable portion is capable of being.
And that way you'll you can have some flexibility and
make sure you don't upset the Apple card at the
same time. All right, Coming up next, Brian has his
(35:05):
bottom line on the Secure Act two point oh. You're
listening to Simply Money presented by all Worth Financial on
fifty five KRC the talk station. You're listening to Simply
Money presented by all Worth Financial on Bob Sponseller along
with Brian James, and it's time for Brian's bottom line. Brian,
you've got some thoughts on the Secure Act two point oh.
(35:29):
Always interested in hearing your insights and research.
Speaker 4 (35:33):
Break it down for.
Speaker 2 (35:33):
Us Secure Act two point oh. We're gonna We're gonna
a little blast from the past here. This was put
in place a few years ago, but it had some
different provisions that kicked in over time. So we have
to kind of go back and review everything make sure
we don't get blindsided by some of these, because there
are some features kicking in here in twenty twenty five
and again in twenty twenty six. So, first off, for
folks between the ages of sixty sixty and sixty three,
(35:56):
the law now allows what's called a super catch up contribution,
what you're familiar with ketchup contributions.
Speaker 3 (36:01):
If you're over fifty, you can throw a little more in. Well.
Speaker 2 (36:04):
Now between sixty and sixty three, you get to throw
in an extra two hundred and fifty dollars in your
four oh one K this.
Speaker 3 (36:10):
Year, provided that your employer allows it.
Speaker 2 (36:12):
That's something to look into you if you are of
those ages and you're feeling like there's a surplus cash
laying around, whether you might be able to either defer
those taxes or maybe sneak it into the roth side
and never pay taxes again. So here's another one, an
important change. This one's coming in twenty twenty six. If
your income is above one hundred and forty five thousand.
Any ketchup contributions you make will have to be done
on the WROTH side. This is the post tax side.
(36:34):
You're not going to get a deduction, but it'll go
in and grow tax free from that day forward, including
ten years beyond your death, as long as it stays
in the roth ira that would result from all of this.
Speaker 3 (36:45):
So again the rules are tightening a little bit on
this stuff.
Speaker 1 (36:48):
Well, Brian, you called out this WROTH provision, you know,
earlier this week on the show, So I think the
real correct me if I'm wrong here, the real to
do item is if you find yourself falling into this category.
You know, as we approach twenty twenty six, now's the
time to go to your HR department and say, hey,
does our four oh one K plan allow for ROTH contributions?
(37:10):
And you better push them hard to make sure it does,
because if they don't act on this and allow those
WROTH contributions to take place within their plan, these higher
income folks are going to miss out big time on
some potential retirement savings. Right, Brian, this is an important
feature that's you know, the clock's running here. We're getting
to the end of twenty twenty five we got to
(37:31):
get all our ducks in a row now.
Speaker 2 (37:33):
Exactly, And this is this is how because we don't
want to be sitting at this time next year realizing
there was something we could or should have been doing
all year long.
Speaker 3 (37:39):
So what we're what we're doing right now.
Speaker 2 (37:41):
This is called tax planning, figuring out what's going on
this year, what should I still do while I have time,
versus tax preparation, which is here's what happened last year,
and I got to settle up with the irs.
Speaker 3 (37:51):
So another less discussed but real risk here.
Speaker 2 (37:54):
You know, in tougher economic times, employers often will try
to cut or maybe suspend that four to oh one
K match to reduce costs, to try to make whatever
numbers they've committed to you for that year. That's not
a guarantee, but being mentally prepared is really a good
idea to make sure that you know if that does happen,
If your company is kind of hitting the skids a
little bit, that match gets reduced, you might want to
(38:15):
try to shore up the savings that you're putting in
there so you can kind of stay in that stay
in that window. So let's kind of summarize here. If
you're sixty to sixty three and your plan allows for it,
look to boost those contributions with that super catchup. If
you're a high earner and you are so inclined, you
ought to look at ROTH versus traditional stimulations. Now take
a look at which approach might be better under these
(38:36):
new rules. Don't assume that the defaults are optimal. Choose
your allocation right. Make sure you understand exactly where these
dollars are landing.
Speaker 1 (38:44):
Great stuff, Brian, thanks for listening tonight. You've been listening
to Simply Money, presented by all Worth Financial on fifty
five KRC, the talk station
Simply Money News
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