September 25, 2025 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian explain why inflation and interest-rate cycles look scarier in headlines than they are for long-term investors—zooming out from Volcker to near-zero rates to today to show how markets normalize. They turn that history into action: how to position cash and bonds as rates shift, match time horizons to risk, and avoid headline chasing. Plus, the Social Security number that really matters (your FRA), a candid long-term-care playbook (insurance vs. self-funding and family coordination), and Ask the Advisor on LTC costs, cyber fraud basics, trusts vs. PODs, and Roth vs. pre-tax 401(k).
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Tonight.
Speaker 2 (00:05):
Why inflation and rate cycles usually look way bigger in
the headlines than they really mean to investors. You're listening
to Simply Money, presented by all Worth Financial on Bob
Sponseller along with Brian James. Inflation, interest rate hikes and
cuts dominate financial headlines. The talking heads love to talk
about all that stuff. They are definitely emotional triggers for
(00:28):
investors who have more assets exposed to markets, are closer
to our in retirement, or just more sensitive to volatility,
or just like to read everything, Brian, read everything that
comes out, and often overreaction to all this noise is
a result. But what we want to talk about tonight
is zooming out. Taking more of that fifty thousand foot
(00:52):
view reveals a much calmer, more reassuring picture, and that's
what we really should be focusing on for longer term investors.
Speaker 1 (01:01):
Well, Bob, you know me and I do love data
because I like being able to point to something that
is black and white. There's very little about financial planning
and investing, in personal financial decisions, behavioral finance that is
black and white. So let's look us some data tonight, right, Bob.
So the US began tracking inflation regularly in nineteen thirteen.
Since then, we've had everything from deflation in the Great
Depression to double digit inflation in the nineteen seventies and
(01:22):
early eighties that gave us stagflation, and along the way,
World War One drove inflation to nearly twenty percent in
nineteen eighteen. We thought we had it bad a few
years ago, but twenty percent was more than twice as
much as what we had during COVID nineteen thirties. The
Depression brought deflation. Prices fell apart because economic activity stopped,
and when demand falls apart, supply goes with it, falling
(01:45):
prices by about much as ten percent per year. And
then after World War Two, inflation ticked up again. So
this was when we basically built the juggernaut that the
United States has become ever since, and that drove inflation
as we started to catch up with the demand started
to catch up with a supply.
Speaker 2 (02:01):
All henry and that is all great data, but that's
pre this fed involvement and going off the gold standard
and all the things that have happened, you know, since
the Great Depression. Walk us forward since the nineteen fifties,
because I think this brings us back to you know,
reality in terms of what kind of economic environment and
(02:22):
government involvement were we really are dealing with today.
Speaker 1 (02:25):
Yeah, and that has shaped where we are today. But
there's a through line that runs through all of it.
There are decisions being made today that are rooted in
things that happened one hundred and hundred and fifty years ago.
So yeah, you're right. Since the nineteen fifties, that's back
when the Federal Reserve began actively using interest rates as
a policy tool to trigger to affect certain outcomes. In
the early eighties, this was Paul Volker fed hiked rates
(02:46):
to over fifteen percent to beat inflation. If any of
you remember going out and getting a mortgage and being
happy that it was fourteen percent, then that this is
the era that you're talking about. It works, but it
did trigger recessions, and that was kind of intentionally because
we had to beat stagflation down. So it worked.
Speaker 2 (03:02):
But you raise rates to fifteen percent, heck, yeah, you're
gonna get a recession.
Speaker 1 (03:07):
You're gonna kill the economy side. But okay, fine, but
what is the opposite? What is doing nothing? Doing nothing
is going I guess inflation is permanent. I don't know
anybody that thinks that Paul Vulker made a mistake. We
had to get out of the seventies somehow, some way,
and that begat the Reagan administration in a much more
business friendly environment. It was a mess, for darn sure.
But we've had our messes before, all right.
Speaker 2 (03:27):
I didn't mean to take you off track, take us
from two thousand and eight to current, because now we
love this.
Speaker 1 (03:33):
Now we just print our way out of it. Brian,
I'm gonna look at your face and were just pulling
through data because no, you just it's not hard to
get me triggered on this stuff. But go ahead. I'm
so glad we use zoom. I can see you now.
Twenty eight to twenty two. This is historically low rates. Mean,
most people listening to this are gonna remember this is
the time that they had the best mortgage they'll ever
(03:53):
have in their lives. Rates were near zero most of
the time. Our mortgage is between two and three percent. Now.
The Fed has of course reverse course again, raising rates
pretty quickly to start to cool off this inflation, and
now we're back to starting to lower them again. So
we've seen this before. This isn't new. It's all part
of the cycle of battling inflation, keeping it, getting it
off the mat. When things aren't going well, we need
(04:14):
to park up the economy and tapping the brakes when
things are going a little bit too quick.
Speaker 2 (04:19):
Here's the main point I think we're trying to drive
home here. Brian and I do.
Speaker 1 (04:22):
Appreciate the historical data.
Speaker 2 (04:24):
It's very helpful and it helps open our eyes to
look longer term, which is what we're trying to do here.
The key point here is inflation is episodic. It's not endless.
The economy goes in cycles, and every spike has been
followed by normalization.
Speaker 1 (04:41):
It usually takes twelve.
Speaker 2 (04:42):
To twenty four months or even a few years, but
inflation always comes back down. Meanwhile, real return survive even
in the high inflation eras equities stocks often outperform everything
else in the long run. Why companies raise prices, they innovate,
and markets a just Historically, the S and P five
(05:04):
hundred is generated strong real and by real we mean
after inflation returns across many different inflation regimes, regardless of
which political party is in power.
Speaker 1 (05:18):
You know, amidst.
Speaker 2 (05:19):
Particularly moderate inflation that two to four percent rate that
I would say is normal when we don't have these
spikes either up or down. And I think that's the
key point that we're trying to make here is stick
with your long term plan. Ignore a lot of this
headline noise because the media has to find something to
talk about every day, and just keep in mind that
(05:41):
these cycles do repeat.
Speaker 1 (05:43):
They do. And I think this is a great time
for me to tell one of my favorite stories that
I frequently use my clients to help people understand why
why is it this way? Well, about four hundred years ago,
there was something called the Dutch East India Company, and
the whole purpose of it was to allow people to
invest in chunks of different types of investments. So think
of it this way. If I'm a merchant and I
own one ship and it sinks on its way across
(06:05):
the ocean, i am screwed. If I own ten percent
of ten ships, then I'm gonna make a lot of
money even if three of them sink. That was the
very origin of the stock market. It was four hundred
years ago. Since then, we have never come up with
a way a better way to increase capital and make
investments and grow money. Than by pulling together assets for
some kind of economic venture. That's all the stock market
is and never was, and that's why we still talk
(06:26):
about it today. There are a lot of things out
there that purport to protect from the ups and downs.
There are annuities out there that have these income riders
and all this other fun stuff. But every time the
market comes back to an all time high, which it
usually is, it's usually at an all time high, all
of those safety valves, all of those different bells and
whistles that purport to be protective are irrelevant. They're not
necessarily bad, but they're not helping that much. When the
(06:48):
market does tend to come back to an all time high,
as it does again and again and again.
Speaker 2 (06:52):
You're listening to Simply Money presented by all Worth Financial
on Bob spond Seller along with Brian James. All right,
let's fast forward to today. What we're dealing with right now.
I mean, we've got corporate earnings, you know, starting to
come out here in the next couple of weeks, and
we've got a potential short term government shutdown happening next week.
There's a lot of things happening right now, So let's
(07:14):
get down to what we should be doing as investors
right now, based on what we know today. What are
the basic blocking and tackling fundamental things we should be
doing with our asset allocation and financial plan in today's environment.
Speaker 1 (07:29):
Brian, run outside and run around in a circle with
your hands over your head, screaming because everything is terrifying.
That's the best advice I can give anybody, you know,
a little little stress reliever now. So we're not chasing
headlines here. Your plan should already be built to absorb
any interest rate volatility up or down in inflation cycles.
If it isn't, well make it that way. That's the fix,
not reacting to Jerome Powell or whatever anybody else has
(07:50):
to say in the headlines. You have to know what
all the outcomes are out there. There's a lot of
history to say, here's what the market does, here's what
investments do, here's what bonds do, and so on and
so forth during different environments. Understand that history and understand
how your portfolio is currently configured to that. So, for example,
use the moment higher interest rates can be looked at
as a gift after this whole decade of financial repression.
That means your piles of cash sitting in the bank
(08:12):
are actually paying you something. We forgot that you're allowed
to earn interest on depository accounts. That's great, but now
we're in a declining rate environment, it might be a
good idea to lock in something. Maybe you stick some
of that in a one year, two year, maybe three
year CD. After that, the yield curve starts to kind
of get in the way a little bit. But I
would definitely be looking if you're just going to sit
on that cash, lock it into something. If you know,
(08:33):
if you bought them, if you bought a house in
the last couple three years, now's the time to start
paying attention to possibly refinancing. Maybe you can get below
that seven percent mortgage. Don't rush out and do it
right now today, but it is okay. And people did
it to refinance three four times over a two year
period right that. When rates were coming down that low
over the past fifteen years, that was pretty common. We
would see, you know, waves of people applying for mortgages
(08:56):
and banks because interest rates were just moving in that direction.
Stay nimble, stay on your eat and understand how that'll
help you. If you do refinance your mortgage, do yourself
a favor and calculate what those savings are. Don't let
don't let them just pile up in the checking account,
because you're gonna spend them. Either continue to make the
exact same payment at a lower interest rate, which means
you'll pay it off sooner, or take those dollars and
(09:16):
stick them in a roth ira or stick them in
your four O. Okay, do something productive with them. All
you've done is rearrange the furniture. Your life doesn't change,
but you're moving the ball forward in a lot of
different areas of your wealth. Yeah.
Speaker 2 (09:27):
And the other thing that we've mentioned often on this show,
and I want it bears repeating again is for folks
that have large lump sum, you know, outlays of cash
coming up for a vehicle purchase or home repairs or
college tuition or something like that, get that money out
of harm's way meaning short term volatility because we never
(09:49):
know what's coming down the pike in the short term,
and just responsible financial planning is to match your time
horizon with the risk tolerance that you're willing or should
be taken with those assets. I mean case in point today, Brian,
Earlier this morning, we got the second quarter final GDP
print out and the number was three point eight percent.
(10:11):
The estimates were three point three percent. That's a huge
beat to the upside. Durable goods orders were better than expected,
jobless claims numbers were better than expected. I mean, who
knows how this is going to impact the Federal Reserve
as far as how many and if we get any
more rate cuts this year, So.
Speaker 1 (10:29):
It's all trying to outguess the Fed.
Speaker 2 (10:31):
Or short term interest rates is a fool's Errand in
my opinion, just stick with long term, good solid financial
planning principles and you won't make mistakes from which it's
hard to uncover from.
Speaker 1 (10:45):
Yeah, I didn't use to believe this when I started
this industry. I got in during the first Internet wave,
back when Yahoo in America online. Where the where the
darlings of the industry now, I don't know where they are,
but in any case, my thought then was, well, this
is you turned a bunch of money in a small
pile of money into a giant pile of money, and
that's what financial planning is. Fortunately, somebody, an older advisor,
(11:06):
got a hold of me and basically said that is
not the way you're gonna do it. And he explained
to me how oil and gas partnerships in the eighties
blew up on people, and there's always there's just always
something shiny to go chase. And I've seen that time
and time again ever since. And pets dot com. Pets
dot com would be one of them, you know, I
would call it be once Bob. I once had a
conversation with a lady who said, you know what, I
like these mutual funds you're explaining to me, But I
(11:27):
really like beanie babies too. I really can't decide which
ones to go do. And I said, ma'am, you should
do beanie babies. You have learned the secret to wealth.
You've beaten me. And I never talked to her again,
but I hope she cornered the market and beanie babies
and is doing well. I mean, over a reasonable period
of time.
Speaker 2 (11:41):
She probably beat the s and p return with beanie
babies for a.
Speaker 1 (11:45):
Period for a couple of years exactly. Yeah, for sure.
Speaker 2 (11:48):
All right, here's the all Worth advice from fifty thousand feet.
Inflation and interest rate swings are just part of the terrain,
not reasons to panic, but reminders to stick with your
long term play. All right, there's a number hiding in
your social security paperwork that could change how and when
you retire. Many people get this wrong. Are you one
(12:10):
of them? Stick around and find out. You're listening to
Simply Money presented by all Worth Financial on fifty five
KRC the talk station. You're listening to Simple Money presented
by all Worth Financial on Bob Sponseller along with Brian James.
If you can't listen to Simply Money live every night,
(12:30):
subscribe and get our daily podcasts. And if you think
your friends or family could use some financial advice, tell
them about us as well. Just search Simply Money on
the iHeart app or wherever you find your podcast. Straight
ahead of six forty three, we'll tackle your toughest financial questions,
from trust to taxes to knowing when it's safe to retire.
Speaker 1 (12:53):
Less than ten years.
Speaker 2 (12:54):
That's how much time is left before the Social Security Trust.
Speaker 1 (12:58):
Fund runs out of money. It wouldn't all of.
Speaker 2 (13:00):
Your benefit would go away, but possibly a quarter of it.
And there's something amazing we figured out when we looked
at the data. Brian, I know you love to look
at data, and you've got some ready for us.
Speaker 1 (13:13):
On social Security and I know you love listening to me.
Look at it. I do love it. Yeah, So one
quick thought, it drives me nuts whenever we are anybody else.
We talked about the SoC Security Trust Fund running out
of money unless they stop billing people for fight attaxes
on the top of their pay stuffs. It's never going
to run out of money. It's the surplus we're talking about.
AnyWho off my soapbox. So here's what we figured out.
(13:34):
Since nineteen ninety three, there have been one hundred and
forty six proposals to tweak or change the program. This
is not sneaking up on us. Congress is well aware
that the math don't math, and there's a hole in
the bucket. One hundred and forty six times something is
at the floor to attempt to fix this problem. And
you would have thinked that one of them would have
made it through. But this is literally such a hot
potato that no member of Congress wants the blood on
their hands if they do anything about this Trust Fund situation,
(13:57):
because the only way that we can fix it is
by forcing someone to sacrifice something. There are a bazillion
ways we can fix this. Every one of them is
a combination of reducing benefits on retirees or increasing taxes
on workers. That's why we kick the can, because I
can't push that and then run for office and expect
to get elected again.
Speaker 2 (14:14):
Well, Brian, speaking of kicking the can down the road,
I heard an interview earlier this week. I think the
gentleman's name is Frank Bellasaro if I excuse me or
pardon me if I mispronounce his last name, but he's
the current head of the Social Security Administration, and I
heard him interviewed on this topic, and they were talking about,
you know, in approximately eight years, us running out of money,
(14:36):
what are you guys doing about it? You know, under
the current administration. And you know, he threw around the
normal stuff like raising the payroll limit on where taxes
are levied, or extending the retirement Social Security age, but
then in the next breath he said, hey, we've got
eight years to do this. No one's in too much
of a hurry. So it was just more of a
(14:58):
kick that can mine mindset because to your point, it's
a political hot potato. I've rual I can virtually guarantee
you no one's gonna talk about this between now and
the midterms, you know, next year. So you know, to
your point, we just kick the can down the road
yet again. And it's at some point we might fix it.
(15:19):
When we're heading toward a crisis, you know, Mike, that happens,
nothing will happen.
Speaker 1 (15:23):
My guy tells me, Bob, as we're gonna wait until
our back is against the wall, and then the first
thing we're gonna do is argue about whose fault it was,
even though we've seen this train coming at us in
slow motion for about eighty years. But who what do
I know? Well? Anyway, so what are we gonna do
about this? So today's tip is all a control let's
stop ranting and give useful information. We'll rant after we
get off the air. Uh. Anyway, today's tip is about
(15:44):
knowing your full retirement age or fr A believe it
or not. For a lot of Americans, getting this wrong
could cost you thousands of dollars in retirement benefits. Your
full retirement age is the age at which you're entitled
to one hundred percent of your Social Security retirement benefit.
So let's go through those very quickly. At age sixty two.
There's lots of magic ages for so Security sixty two
is the earliest you can claim anything. That's also the
(16:06):
lowest check you'll ever get. Seventy is the latest at
which it doesn't benefit you to wait any longer. If
every year you wait between those years, and you can
look at your Social Security report that you can get
from SSA dot Gov in a MYSOI scurity profile, if
you do the math between those years sixty two to seven,
you'll see a calculated eight percent increase. Every year you
(16:27):
continue to not file for it, you'll get an eight
percent increase. So where that comes from. That amount is
based on your thirty five highest earning years. And here's
the kicker. Your full retirement age depends on your birth year.
So if you were born before nineteen fifty five, for example,
your full retirement age or FRA is sixty six nineteen
sixty or later. And this is important, it's sixty seven.
(16:48):
So for everybody listening to me right now, your full
retirement age is somewhere between sixty six and sixty seven.
A lot of people think sixty five. That's another magic age,
but that's tied to Medicare. Medicare eligibility starts at age
sixty five, but they have different timelines. If you act
based on the wrong assumption, it could permanently reduce your benefits.
So make sure you understand what you get into before
you pull the trigger on these things.
Speaker 2 (17:09):
Yeah, another good piece of advice here is is to
go ahead and log onto that SSA dot gov website
and create an account, because Brian, correct me if I'm wrong.
The Social Security Administration, I think a couple of years ago,
stopped mailing out these annual paper statements, you know, for
security reasons, identity theft reasons, and to save money. But
(17:30):
they want everybody to create an account on SSA dot gov.
And it's actually a pretty darn good website as a taxpayer.
Speaker 1 (17:37):
As a taxpayer, I appreciate that we don't send out
three hundred million reports that nobody reads. So I'm glad
that if you want it, you got to go chase it.
Speaker 2 (17:44):
But you want, you want to open up an account
and be able to look at your statement at least
every one or two years, and just make sure the
calculations are being derived properly, because, as you said, it
is based on your highest thirty five years worth of earnings,
and you want to make sure you know those numbers.
Look correct and if they aren't, get out ahead of
it before you know, it's time to claim benefits.
Speaker 1 (18:05):
Yeah, and as I always encourage my clients to pull
that every now and then. For yeah, we know you
pulled it five years ago. We built it into your plan.
But it just make sure it's capturing everything correctly and
what can go wrong here? You know, we all think
that all this data is out there and everything's wonderful,
but remember this is the federal government we're talking about.
Sometimes not the most efficient tool in the box. So
what can happen for people who, for example, move from
(18:27):
a state type employment to the private sector or vice versa.
Social Security can miss a beat. Sometimes it misses that
you or it doesn't get your salary right, or if
you move from state to state you have a lot
of job changes. Sometimes the HR department doesn't report what
they need to correctly, and that takes a long time,
but it filters into your Social Security report. So just
look at those all of those years of earnings. It
(18:48):
will show you what it thinks you have earned over
your entire working career of thirty five to forty years.
Just make sure that it makes sense, because that is
absolutely factoring into your retirement benefits. And one more thing
I'll throw out there. It does not hurt you. A
lot of people get confused by this. It does not
hurt you to take a lower paying job for the
final few years before retirement. Remember the math is your
(19:10):
thirty five highest earning years. So if you take a
lower paying job in your last few years before retirement
and it offsets something you did in high school because
it's bigger, that actually helps you. Yeah.
Speaker 2 (19:21):
And one more reminder on the whole work thing with
social Security benefits. Remember, if you take Social Security benefits
before your full retirement age and keep working, you could
get a pretty stiff penalty on your Social Security benefit.
Just another watch out there. Here's the all Worth advice.
Social security is not a one size fits all proposition.
(19:42):
Know your full retirement retirement age, Know what your benefits
look like, because it is the foundation of making the
right timing decision on when to claim benefits. Coming up next,
we're going to tackle the unknown disruptor in wealth planning.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
(20:07):
Simply Money presented by all Worth Financial on Bob Sponseller
along with Brian Chames. Tonight, we want to talk about
what can become a very difficult topic for families, and
that's long term care. What a loaded topic, Brian, and
we want to start with a hypothetical story. We're going
to talk about a lady named Terry, you know, obviously
(20:28):
a fictitious name. Her estate plan was meticulous. She had
worked closely with her advisors to build a multi generational strategy, trust,
taxi optimization, charitable giving, you know, the whole nine yards.
Speaker 1 (20:43):
Everything was in order until it wasn't. What happened next, Brian, Well,
what happened next, Bob, was life And this is yes,
this is a fictional name, but I think I've probably
heard this story twenty times over my financial planning career,
so obviously you might see this coming already. But healthcare
are health problems popped up and that really changed the
trajectory of her retirement. What happened was she had a
(21:04):
stroke and while she did survive that her recovery was
not complete. So she did wind up meeting daily support
helping her get around first at home and then on
down the line in a private care facility, and just
like that, the plan that everybody thought was all chip
shape and you know, rock solid, was right back on
the table because all of a sudden we had this,
you know, this shot from left field that didn't see coming.
(21:27):
So her adult children, who we were thinking, they were acting,
you know, with care and urgency. This is what they
needed to do. So they started making decisions that they
themselves had never thought about. Because Mom was still young
and healthy at this point, right up until the stroke.
So what do we do? How do we manage her
care while protecting this trust. Should we sell the investment
property to cover the costs or is it better to
hang on to the investment property in case it continues
to grow, which will help us cover more costs. Are
(21:49):
these the things she would have wanted us to do?
And how long is this going to last? And what
happens to the rest of the plan. So these these
aren't really financial problems in the traditional sense. This isn't
a how are we going to pay for this type
of a situation. It was much more about efficiency. Where
are all these things and how do they help us?
Is this the right approach to take it? Or are
there better things that we are not seeing, so they
(22:09):
ended up with a lot of planning gaps, created a
lot of tension and uncertainty and unexpected trade offs, and
all of a sudden, siblings who who got along right
until this point, all of a sudden were pushed to
a point where they felt like they didn't know each
other anymore.
Speaker 2 (22:21):
Yeah, Brian, and I've I've had to deal with situations
like this, unfortunately several times now in my career. Having
done this as long as I have, I got a
lot of clients who are in their mid to late eighties,
and I have watched and tried to help people walk
down this path. And I would say the first thing
that you know, you can get rid of all the
(22:42):
spreadsheets and taxes and all that. It just comes down
to communication with the family. At the first sign that
there's any cognitive impairment or in this case, a sudden
impairment physical and mental due to stroke, you got to
get the family together and just talk and find find
out where everybody's at, what they're looking for, what they
(23:03):
can do in the way of helping, because everybody's situation
is different in terms of kids and their spouses and shoot, Ryan,
people are spread all over the country now in terms
of where they live.
Speaker 1 (23:15):
It just takes a lot of coordination.
Speaker 2 (23:17):
From a communication standpoint, because you know, in virtually every
case I've seen, people are less worried about the money
I'm talking about the kids. They're worried about how do
we take care of mom or dad? And everybody's got
to be real, honest and upfront, and hopefully the family
works together in providing the care. And once you determine
(23:40):
what the family is capable of or not capable of,
then it's time to look at professional help. Have you
have you seen something similar in the clients you deal with.
Speaker 1 (23:50):
Yeah, but it takes a long time for everybody to
come to that conclusion. All the siblings have to decide,
you know what, we really want to get this done right,
but we really have got to have some help here.
All right, Well, let's talk about what that help looks like.
Speaker 2 (24:02):
What are the things that we need to plan for
in advance or in this case, once a short term
or immediate need comes out of thin air and now
we got to deal with it, what are the things
that we need.
Speaker 1 (24:16):
To sit down and tackle well, and lots of people
can listening to us, can see this coming Obviously, the
first thought is, well, we must have to buy long
term care insurance. That's how we're protected. We will protect
from this risk, and yeah, that's a solution. Today's options
are more flexible than ever and they've evolved well beyond
the traditional policies where you throw a bunch of money
into it and if you don't ever have the need
(24:36):
for coverage or for care, then you lose those dollars.
But there are ways to get around that now. Now,
when it's used strategically, long term care insurance provides a
predictable source of liquidity that's not correlated to the market.
If you're not talking about an investment here, you're talking
about an insurance policy that will kick in with a
certain trigger that the insurance company has identified, and those
have to do with things such as being able to
(24:56):
get yourself out of bed, feed yourself, dress yourself, so forth.
Those are called the activities of daily living, and that's
how an insurance company will determine that yes, you indeed
qualify for care, and then the money will show up
to provide that you can. It can be integrated with
trust gifting strategies, other philanthropic plans, and it can also
be used in support of a trustee who's making decisions
(25:16):
or espouse during these health events. And and but sometimes
it doesn't work that way. Sometimes long term care insurance
maybe maybe you're uninsurable. Sometimes long term care insurers will
they don't they don't look at death as you know,
so in other words, they may not care so much
that you're a smoker. They care much more about the
things that will keep will keep you around for a while.
But but but require around the clock care. For example,
(25:38):
if there's a history of say Parkinson's or Huntington's or
Alzheimer's in your family, then that's the.
Speaker 2 (25:44):
Fact surgery, Yeah, all that too, something that replacement.
Speaker 1 (25:48):
Yeah, it's not the same things that can disqualify you
from life insurance. But regardless, sometimes you're uninsurable. So and
self funding is the solution there, which is quite literally
a fancy word for we're just going to eat this
cost and we'll deal with our Sometimes that can make
more sense because some clients will prefer having that flexibility
of modeling their own care scenarios using their own capital
money they already have. Others may field me may just
(26:10):
not agree with the idea of giving risk to an
insurance company if they feel like they can manage it,
because they feel like the insurance company is just there
to make money. So how do we close that gap
between attention and reality? Bob? How do you kind of
match these decisions to the outcome? Well, I think there's
a couple ways to do that.
Speaker 2 (26:27):
I mean, you can sit down and set aside some
money based on if you need care, how much money
do you need? And I'm talking about wealthier families that
can afford to self ensure this kind of stuff and
have the resources to do it. Again, the data says,
current data about seven and ten individuals turning age sixty
five today will require some form of long term care.
Speaker 1 (26:49):
That's pretty high odds.
Speaker 2 (26:50):
Meanwhile, more than two and ten of those individuals will
need care for five years or longer. So you know,
without trying to play god here, you can build into
your plan what that might look like. So you know,
you run different scenarios financially. But again, you want to
make sure you're communicating with your family in advance and
(27:10):
saying if the situation A or B happens to mom
and dad, how are.
Speaker 1 (27:16):
We prepared to deal with it?
Speaker 2 (27:17):
So there's an emotional and care aspect to this, and
also a financial aspect. Get out in front of it early,
work with your family, work with your spouse, work with
your advisors, and don't just bury your head in the
sand and assume nothing like this is ever going to
happen to you, because chances are it will.
Speaker 1 (27:36):
Here's the all Worth advice.
Speaker 2 (27:37):
However you cover long term care, insurance, self funding or
a mix, the goal is resilience, a plan that protects
your family and provides you with peace of mind. Next,
your biggest money questions answered, from retirement readiness to protecting
against fraud. You're listening to Simply Money presented by all
(27:57):
Worth Financial on fifty five KR see the talk station.
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller 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. Simply record your
(28:21):
question and it will come straight to us. David and
Blue Ash leads us off tonight.
Speaker 1 (28:26):
Brian.
Speaker 2 (28:26):
He says, we've saved about one point eight million dollars,
but we have no long term care coverage. How do
we protect ourselves from a nursing home bill that could
wipe us out?
Speaker 1 (28:38):
Well, David, I think the first thing to understand is
what could what could that bill be? So let's talk
some numbers here here, so here in this area, here
in the Ohio Kentucky, Indiana area, if we wound up
with a nursing home stay. First off, that average length
of that stay is about two and a half maybe
three years, and the average cost is let's call it,
about one hundred and fifteen maybe one hundred and twenty
thousand dollars. First thing I would throw out is a
(28:59):
lot a lot of people look at this and they say, oh,
my gosh, that's one hundred and twenty thousand dollars just
for one of us in a married couple, on top
of all our of other expenses. And that's not really
the case. Right, we were talking nursing home. So your
life has pretty much changed. You're going to be in
a place where you know you're not going in and
out a whole lot, You're not buying groceries anymore, and
potentially it's just not as much as you might think. However,
(29:21):
you've got this one point eight million, and you do
if you do want to use those assets in a
way to protect first thing I would look for is
do you happen to We don't really have details here,
but if you happen to have some of this cash
tied up in an insurance policy. Maybe you bought a
policy a long time ago, thinking you needed to protect
the kids, the mortgage and all that kind of stuff,
but those goals have all been accomplished and are no
longer risks. If you have an old policy with cash
(29:44):
in it, you can do something called a ten thirty
five exchange and move that into a policy that, yes,
has a death benefit, just like a life insurance policy,
but it's a reduced death benefit in exchange for being
able to tap into it should a long term care
need arise. This is my absolute favorite thing to get
to do for clients when the situation arises, because these
are assets we're not using otherwise. Let's redeploy them in
(30:04):
a non taxable manner. That's what a ten thirty five
exchange is. And now all of a sudden, I have
long term care coverage where there was none before, and
if I don't use it, somebody's still getting a death benefit.
Maybe that helps you, but I'd also say at one
point eight you might be okay even considering just self insuring.
So that's what a financial plan is for. I find
a fiducial advisor to help you determine that. Bruce in Lovelnd,
(30:25):
this one's for you, Bob, coming your way. Bruce is
worried about cyber fraud and identity theft, you know, even
more than market risk at this point, and he's wondering
how wealthy and families, how wealthy families protect against that.
Speaker 2 (30:35):
Well, Bruce, there's the obvious things. You know, watch which
browser you're using. We did a segment yesterday about, you know,
the dangers of sharing all your information with Google.
Speaker 1 (30:45):
Don't click on those texts.
Speaker 2 (30:46):
That come through from the Ohio Bureau of Motor Vehicles
and things like that. I think those are relatively obvious
things now that most people are aware of.
Speaker 1 (30:56):
I'm going to give.
Speaker 2 (30:57):
A plug to our good friend Dave Hatterer. I'd say
follow Dave on both x and LinkedIn. He does a
great job of putting out a lot of good, no
cost information, you know, just to help you protect yourself
and give you a few things to think about.
Speaker 1 (31:15):
And then if you need more protection beyond that.
Speaker 2 (31:18):
Dave is available, you know, for hire to help look
at your individual situation or the situation for your company.
If you need to get more pardon me in depth
on putting in some some more technology or protection.
Speaker 1 (31:32):
But it's a real topic out there, Bruce.
Speaker 2 (31:35):
I think you're very wise to dig in and look
at that.
Speaker 1 (31:39):
Dave Hatter is a great resource for that topic.
Speaker 2 (31:42):
All right, Lisa and Anderson, our estate is two point
two million dollars. Do we still need a trust at
our level? Or is a simple will and just beneficiary
designations enough? Brian, great question is a great question. And
the first thing we've got to say is we are
not lawyers. We're just talking heads on a radio.
Speaker 1 (31:58):
But at the same time, as a certified and in
answer planners, charter financial counselors, this is what we do,
so we can still kind of guide here. But so
let's talk about when when a trust might make sense. Well, well,
a trust will avoid probate. That's pretty important. But all
that's not that hard to do if you simply have
you know, if your goal is really to just avoid
probate and keep your estate simple for your heirs, then
all you have to do is make sure that beneficiaries
(32:20):
are clearly labeled on all of your all of your
assets wherever you can. Some are easier than others, your IRA,
your four oh one K. Basically you're forced to do
it when you set it up. So those probably already
have beneficiaries. The goal there is make sure they're up
to date. Other accounts such as your your plan old,
you know, maybe you have a joint savings account, bank accounts.
Banks will do this too, but you have to ask
them for it. So if you're in if you want
(32:41):
to talk to your bank, you're talking to you're you're
going to ask them for a POD payable on death designation,
which is just a piece of paper that says if
I get hit by a bus, these assets go to
these people. That simple step naming beneficiaries will avoid UH,
will avoid probate. You can get it done that easily.
Speaker 2 (32:57):
Beyond Brian, I had I had a meeting, you know,
with a client yesterday on this exact topic. And they
had several million dollars in jointly titled mutual funds that
they've owned for almost fifty years. And we had this
exact conversation with them, and the attorney that was sitting
at the table. We advise them to just add payable
(33:18):
on death designations to their mutual fund accounts so that
at the death of the second spouse we have named beneficiaries.
In this case, we are leaving it to a trust,
but we avoid we avoid probate on everything just by
taking care of those pod designations. It's pretty simple and straightforward.
(33:39):
Unfortunately a lot of people don't think about it. Yeah,
you're right, and I had a situation.
Speaker 1 (33:43):
Actually, I've had several of these recently where people just
have built up assets, they haven't paid much attention to
the titles of the accounts. This stuff isn't super important
in our brains when we're setting up things, you know,
thirty years in the past, just getting started. But now
I have married couples who each have individual not iras,
but just individually titled accounts, amounts of money in them.
And what's going to happen unless we fix that. At
(34:03):
least name a beneficiary, if not name it joint. There's
moving parts to that in any marriage, but at least
name a beneficiary and these individually titled accounts. Otherwise a
grieving spouse is going to have to sit through probate
simply to get assets to move from one side of
the dinner table to the other. Name your beneficiaries. I
had lots of information there, so at least hopefully that helps.
We've got time for one more quick when Tony and
(34:25):
fort Wright Bob, he's got a million and a half
and he's still working. He's wondering should he be using
his wroth side of his four O one k or
stick with that pretext.
Speaker 2 (34:32):
Well, Tony, I think you need to sit down with
a good fiduciary advisor in coordination with a CPA and
run different scenarios because you know, we don't know how
much you make, we don't know how long you're gonna work.
But you want to run different scenarios to just sketch
this out ahead of time and with reasonable assumptions you
can pretty quickly and easily come up with a good
(34:52):
plan moving forward. Coming up next, we've got Brian's bottom line.
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 spont
Seller along with Brian James and Brian, I'm laughing because
(35:15):
nothing goes nothing pairs quite as well together as Jimmy
Buffett and what you're going to talk about next.
Speaker 1 (35:23):
To Secure two point two point oho Act. You might
be reaching there a little bit. And I don't think
we're stepping on a pop tops with this one, but
important adult information. We need to know things as grown ups,
and here's one of them. So Secure Act two point
oh came out a few years ago. We've kind of
forgotten about it because there's a lot of bridge a
water under the bridge ever since. But it had a
lot of bells and whistles in it that I think
(35:44):
sometimes we forget about. So the one we're gonna talk
about today is employer sponsored emergency savings accounts. So our Congress,
with the love and care and affection that they have
for all of us, realizes that not a lot of
us can put our hands on a thousand bucks, and
so they're trying. They try. I had to set up
ways to make it, to entice people to do it,
and set up benefits just to set aside money. One
(36:04):
of those was the ability for an employer to offer
an emergency savings account for up to twenty five hundred
dollars that allows workers to stash short term savings alongside
their retirement accounts. The hope is if we can kind
of automate this and make it like a four to
oh one, kay, but allow access to it during life
before you retire, then maybe people will put themselves in
a better position and have a little bit of cash
(36:25):
which functions as oil in the engine, as opposed to
having to run up credit cards or eat penalties and
taxes on retirement plan distributions. If bad stuff happens, I
can say, you want to say something, Bob, Yeah, do
you have.
Speaker 2 (36:36):
Any idea how many companies have these accounts in place?
And then how many employees are taking advantage of them?
I'm curious, to my knowledge none. But that's not a
correct statement. I'm just saying I haven't run across it.
So the revolution starts today, Bob. That's why we're talking
about it on the radio.
Speaker 1 (36:53):
But no, that's why. So if you are an employer,
and maybe you are an employer, and you know some
of your employees are in this situation, maybe either asking
for advances on their paychecks, those kinds of things, and
if you're someone who cares and you want to help them. Well,
this might be a bell and whistle that you could
put in place. So here's how it works. You can
allow employees to stave into a side account that's tied
to your plan up to twenty five hundred bucks, separate
(37:15):
from retirement and accessible in emergencies, funded by payroll deductions. Right,
this is important because that makes it that kind of
locks it in. We all forget about our four to
one K contributions and then poof, thirty years later, we
got a lot of money. Well, this is a way
that we can kind of in the background, the back
of our minds be funding our emergency savings accounts. And
if you wanted to, and you've got the ability as
the employer, you can set up matching or even seed contributions.
(37:38):
You throw in a hundred bucks, I'll throw in a
hundred bucks, or everybody gets a little bit of money
to entice people to put themselves in this position. Now,
there's of course trade offs, there's liquidity instead of locking
it in, and there's potential tax treatment rules those kinds
of things, But I think overall it's a good idea
in general for people to simply have a better option
than credit cards, payday loans, and four to oh one
(37:59):
K penalizable distributions to pay those bills that come up
in crazy times. I actually love the idea.
Speaker 2 (38:07):
I mean, let's face it, we got a lot of
people out there living paycheck to paycheck and they need
some forced savings mechanisms in place, you know, just to
put everything on autopilot. It's a great way to operate.
And let's face it, human beings respond to incentives. So
if the company's going to kick in a little bit
of money here, you know, a matching contribution for an
emergency fund, I think more people would be prone to
(38:28):
take advantage of that, and that's a good thing. 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.
Speaker 2 (00:05):
Why inflation and rate cycles usually look way bigger in
the headlines than they really mean to investors. You're listening
to Simply Money, presented by all Worth Financial on Bob
Sponseller along with Brian James. Inflation, interest rate hikes and
cuts dominate financial headlines. The talking heads love to talk
about all that stuff. They are definitely emotional triggers for
(00:28):
investors who have more assets exposed to markets, are closer
to our in retirement, or just more sensitive to volatility,
or just like to read everything, Brian, read everything that
comes out, and often overreaction to all this noise is
a result. But what we want to talk about tonight
is zooming out. Taking more of that fifty thousand foot
(00:52):
view reveals a much calmer, more reassuring picture, and that's
what we really should be focusing on for longer term investors.
Speaker 1 (01:01):
Well, Bob, you know me and I do love data
because I like being able to point to something that
is black and white. There's very little about financial planning
and investing, in personal financial decisions, behavioral finance that is
black and white. So let's look us some data tonight, right, Bob.
So the US began tracking inflation regularly in nineteen thirteen.
Since then, we've had everything from deflation in the Great
Depression to double digit inflation in the nineteen seventies and
(01:22):
early eighties that gave us stagflation, and along the way,
World War One drove inflation to nearly twenty percent in
nineteen eighteen. We thought we had it bad a few
years ago, but twenty percent was more than twice as
much as what we had during COVID nineteen thirties. The
Depression brought deflation. Prices fell apart because economic activity stopped,
and when demand falls apart, supply goes with it, falling
(01:45):
prices by about much as ten percent per year. And
then after World War Two, inflation ticked up again. So
this was when we basically built the juggernaut that the
United States has become ever since, and that drove inflation
as we started to catch up with the demand started
to catch up with a supply.
Speaker 2 (02:01):
All henry and that is all great data, but that's
pre this fed involvement and going off the gold standard
and all the things that have happened, you know, since
the Great Depression. Walk us forward since the nineteen fifties,
because I think this brings us back to you know,
reality in terms of what kind of economic environment and
(02:22):
government involvement were we really are dealing with today.
Speaker 1 (02:25):
Yeah, and that has shaped where we are today. But
there's a through line that runs through all of it.
There are decisions being made today that are rooted in
things that happened one hundred and hundred and fifty years ago.
So yeah, you're right. Since the nineteen fifties, that's back
when the Federal Reserve began actively using interest rates as
a policy tool to trigger to affect certain outcomes. In
the early eighties, this was Paul Volker fed hiked rates
(02:46):
to over fifteen percent to beat inflation. If any of
you remember going out and getting a mortgage and being
happy that it was fourteen percent, then that this is
the era that you're talking about. It works, but it
did trigger recessions, and that was kind of intentionally because
we had to beat stagflation down. So it worked.
Speaker 2 (03:02):
But you raise rates to fifteen percent, heck, yeah, you're
gonna get a recession.
Speaker 1 (03:07):
You're gonna kill the economy side. But okay, fine, but
what is the opposite? What is doing nothing? Doing nothing
is going I guess inflation is permanent. I don't know
anybody that thinks that Paul Vulker made a mistake. We
had to get out of the seventies somehow, some way,
and that begat the Reagan administration in a much more
business friendly environment. It was a mess, for darn sure.
But we've had our messes before, all right.
Speaker 2 (03:27):
I didn't mean to take you off track, take us
from two thousand and eight to current, because now we
love this.
Speaker 1 (03:33):
Now we just print our way out of it. Brian,
I'm gonna look at your face and were just pulling
through data because no, you just it's not hard to
get me triggered on this stuff. But go ahead. I'm
so glad we use zoom. I can see you now.
Twenty eight to twenty two. This is historically low rates. Mean,
most people listening to this are gonna remember this is
the time that they had the best mortgage they'll ever
(03:53):
have in their lives. Rates were near zero most of
the time. Our mortgage is between two and three percent. Now.
The Fed has of course reverse course again, raising rates
pretty quickly to start to cool off this inflation, and
now we're back to starting to lower them again. So
we've seen this before. This isn't new. It's all part
of the cycle of battling inflation, keeping it, getting it
off the mat. When things aren't going well, we need
(04:14):
to park up the economy and tapping the brakes when
things are going a little bit too quick.
Speaker 2 (04:19):
Here's the main point I think we're trying to drive
home here. Brian and I do.
Speaker 1 (04:22):
Appreciate the historical data.
Speaker 2 (04:24):
It's very helpful and it helps open our eyes to
look longer term, which is what we're trying to do here.
The key point here is inflation is episodic. It's not endless.
The economy goes in cycles, and every spike has been
followed by normalization.
Speaker 1 (04:41):
It usually takes twelve.
Speaker 2 (04:42):
To twenty four months or even a few years, but
inflation always comes back down. Meanwhile, real return survive even
in the high inflation eras equities stocks often outperform everything
else in the long run. Why companies raise prices, they innovate,
and markets a just Historically, the S and P five
(05:04):
hundred is generated strong real and by real we mean
after inflation returns across many different inflation regimes, regardless of
which political party is in power.
Speaker 1 (05:18):
You know, amidst.
Speaker 2 (05:19):
Particularly moderate inflation that two to four percent rate that
I would say is normal when we don't have these
spikes either up or down. And I think that's the
key point that we're trying to make here is stick
with your long term plan. Ignore a lot of this
headline noise because the media has to find something to
talk about every day, and just keep in mind that
(05:41):
these cycles do repeat.
Speaker 1 (05:43):
They do. And I think this is a great time
for me to tell one of my favorite stories that
I frequently use my clients to help people understand why
why is it this way? Well, about four hundred years ago,
there was something called the Dutch East India Company, and
the whole purpose of it was to allow people to
invest in chunks of different types of investments. So think
of it this way. If I'm a merchant and I
own one ship and it sinks on its way across
(06:05):
the ocean, i am screwed. If I own ten percent
of ten ships, then I'm gonna make a lot of
money even if three of them sink. That was the
very origin of the stock market. It was four hundred
years ago. Since then, we have never come up with
a way a better way to increase capital and make
investments and grow money. Than by pulling together assets for
some kind of economic venture. That's all the stock market
is and never was, and that's why we still talk
(06:26):
about it today. There are a lot of things out
there that purport to protect from the ups and downs.
There are annuities out there that have these income riders
and all this other fun stuff. But every time the
market comes back to an all time high, which it
usually is, it's usually at an all time high, all
of those safety valves, all of those different bells and
whistles that purport to be protective are irrelevant. They're not
necessarily bad, but they're not helping that much. When the
(06:48):
market does tend to come back to an all time high,
as it does again and again and again.
Speaker 2 (06:52):
You're listening to Simply Money presented by all Worth Financial
on Bob spond Seller along with Brian James. All right,
let's fast forward to today. What we're dealing with right now.
I mean, we've got corporate earnings, you know, starting to
come out here in the next couple of weeks, and
we've got a potential short term government shutdown happening next week.
There's a lot of things happening right now, So let's
(07:14):
get down to what we should be doing as investors
right now, based on what we know today. What are
the basic blocking and tackling fundamental things we should be
doing with our asset allocation and financial plan in today's environment.
Speaker 1 (07:29):
Brian, run outside and run around in a circle with
your hands over your head, screaming because everything is terrifying.
That's the best advice I can give anybody, you know,
a little little stress reliever now. So we're not chasing
headlines here. Your plan should already be built to absorb
any interest rate volatility up or down in inflation cycles.
If it isn't, well make it that way. That's the fix,
not reacting to Jerome Powell or whatever anybody else has
(07:50):
to say in the headlines. You have to know what
all the outcomes are out there. There's a lot of
history to say, here's what the market does, here's what
investments do, here's what bonds do, and so on and
so forth during different environments. Understand that history and understand
how your portfolio is currently configured to that. So, for example,
use the moment higher interest rates can be looked at
as a gift after this whole decade of financial repression.
That means your piles of cash sitting in the bank
(08:12):
are actually paying you something. We forgot that you're allowed
to earn interest on depository accounts. That's great, but now
we're in a declining rate environment, it might be a
good idea to lock in something. Maybe you stick some
of that in a one year, two year, maybe three
year CD. After that, the yield curve starts to kind
of get in the way a little bit. But I
would definitely be looking if you're just going to sit
on that cash, lock it into something. If you know,
(08:33):
if you bought them, if you bought a house in
the last couple three years, now's the time to start
paying attention to possibly refinancing. Maybe you can get below
that seven percent mortgage. Don't rush out and do it
right now today, but it is okay. And people did
it to refinance three four times over a two year
period right that. When rates were coming down that low
over the past fifteen years, that was pretty common. We
would see, you know, waves of people applying for mortgages
(08:56):
and banks because interest rates were just moving in that direction.
Stay nimble, stay on your eat and understand how that'll
help you. If you do refinance your mortgage, do yourself
a favor and calculate what those savings are. Don't let
don't let them just pile up in the checking account,
because you're gonna spend them. Either continue to make the
exact same payment at a lower interest rate, which means
you'll pay it off sooner, or take those dollars and
(09:16):
stick them in a roth ira or stick them in
your four O. Okay, do something productive with them. All
you've done is rearrange the furniture. Your life doesn't change,
but you're moving the ball forward in a lot of
different areas of your wealth. Yeah.
Speaker 2 (09:27):
And the other thing that we've mentioned often on this show,
and I want it bears repeating again is for folks
that have large lump sum, you know, outlays of cash
coming up for a vehicle purchase or home repairs or
college tuition or something like that, get that money out
of harm's way meaning short term volatility because we never
(09:49):
know what's coming down the pike in the short term,
and just responsible financial planning is to match your time
horizon with the risk tolerance that you're willing or should
be taken with those assets. I mean case in point today, Brian,
Earlier this morning, we got the second quarter final GDP
print out and the number was three point eight percent.
(10:11):
The estimates were three point three percent. That's a huge
beat to the upside. Durable goods orders were better than expected,
jobless claims numbers were better than expected. I mean, who
knows how this is going to impact the Federal Reserve
as far as how many and if we get any
more rate cuts this year, So.
Speaker 1 (10:29):
It's all trying to outguess the Fed.
Speaker 2 (10:31):
Or short term interest rates is a fool's Errand in
my opinion, just stick with long term, good solid financial
planning principles and you won't make mistakes from which it's
hard to uncover from.
Speaker 1 (10:45):
Yeah, I didn't use to believe this when I started
this industry. I got in during the first Internet wave,
back when Yahoo in America online. Where the where the
darlings of the industry now, I don't know where they are,
but in any case, my thought then was, well, this
is you turned a bunch of money in a small
pile of money into a giant pile of money, and
that's what financial planning is. Fortunately, somebody, an older advisor,
(11:06):
got a hold of me and basically said that is
not the way you're gonna do it. And he explained
to me how oil and gas partnerships in the eighties
blew up on people, and there's always there's just always
something shiny to go chase. And I've seen that time
and time again ever since. And pets dot com. Pets
dot com would be one of them, you know, I
would call it be once Bob. I once had a
conversation with a lady who said, you know what, I
like these mutual funds you're explaining to me, But I
(11:27):
really like beanie babies too. I really can't decide which
ones to go do. And I said, ma'am, you should
do beanie babies. You have learned the secret to wealth.
You've beaten me. And I never talked to her again,
but I hope she cornered the market and beanie babies
and is doing well. I mean, over a reasonable period
of time.
Speaker 2 (11:41):
She probably beat the s and p return with beanie
babies for a.
Speaker 1 (11:45):
Period for a couple of years exactly. Yeah, for sure.
Speaker 2 (11:48):
All right, here's the all Worth advice from fifty thousand feet.
Inflation and interest rate swings are just part of the terrain,
not reasons to panic, but reminders to stick with your
long term play. All right, there's a number hiding in
your social security paperwork that could change how and when
you retire. Many people get this wrong. Are you one
(12:10):
of them? Stick around and find out. You're listening to
Simply Money presented by all Worth Financial on fifty five
KRC the talk station. You're listening to Simple Money presented
by all Worth Financial on Bob Sponseller along with Brian James.
If you can't listen to Simply Money live every night,
(12:30):
subscribe and get our daily podcasts. And if you think
your friends or family could use some financial advice, tell
them about us as well. Just search Simply Money on
the iHeart app or wherever you find your podcast. Straight
ahead of six forty three, we'll tackle your toughest financial questions,
from trust to taxes to knowing when it's safe to retire.
Speaker 1 (12:53):
Less than ten years.
Speaker 2 (12:54):
That's how much time is left before the Social Security Trust.
Speaker 1 (12:58):
Fund runs out of money. It wouldn't all of.
Speaker 2 (13:00):
Your benefit would go away, but possibly a quarter of it.
And there's something amazing we figured out when we looked
at the data. Brian, I know you love to look
at data, and you've got some ready for us.
Speaker 1 (13:13):
On social Security and I know you love listening to me.
Look at it. I do love it. Yeah, So one
quick thought, it drives me nuts whenever we are anybody else.
We talked about the SoC Security Trust Fund running out
of money unless they stop billing people for fight attaxes
on the top of their pay stuffs. It's never going
to run out of money. It's the surplus we're talking about.
AnyWho off my soapbox. So here's what we figured out.
(13:34):
Since nineteen ninety three, there have been one hundred and
forty six proposals to tweak or change the program. This
is not sneaking up on us. Congress is well aware
that the math don't math, and there's a hole in
the bucket. One hundred and forty six times something is
at the floor to attempt to fix this problem. And
you would have thinked that one of them would have
made it through. But this is literally such a hot
potato that no member of Congress wants the blood on
their hands if they do anything about this Trust Fund situation,
(13:57):
because the only way that we can fix it is
by forcing someone to sacrifice something. There are a bazillion
ways we can fix this. Every one of them is
a combination of reducing benefits on retirees or increasing taxes
on workers. That's why we kick the can, because I
can't push that and then run for office and expect
to get elected again.
Speaker 2 (14:14):
Well, Brian, speaking of kicking the can down the road,
I heard an interview earlier this week. I think the
gentleman's name is Frank Bellasaro if I excuse me or
pardon me if I mispronounce his last name, but he's
the current head of the Social Security Administration, and I
heard him interviewed on this topic, and they were talking about,
you know, in approximately eight years, us running out of money,
(14:36):
what are you guys doing about it? You know, under
the current administration. And you know, he threw around the
normal stuff like raising the payroll limit on where taxes
are levied, or extending the retirement Social Security age, but
then in the next breath he said, hey, we've got
eight years to do this. No one's in too much
of a hurry. So it was just more of a
(14:58):
kick that can mine mindset because to your point, it's
a political hot potato. I've rual I can virtually guarantee
you no one's gonna talk about this between now and
the midterms, you know, next year. So you know, to
your point, we just kick the can down the road
yet again. And it's at some point we might fix it.
(15:19):
When we're heading toward a crisis, you know, Mike, that happens,
nothing will happen.
Speaker 1 (15:23):
My guy tells me, Bob, as we're gonna wait until
our back is against the wall, and then the first
thing we're gonna do is argue about whose fault it was,
even though we've seen this train coming at us in
slow motion for about eighty years. But who what do
I know? Well? Anyway, so what are we gonna do
about this? So today's tip is all a control let's
stop ranting and give useful information. We'll rant after we
get off the air. Uh. Anyway, today's tip is about
(15:44):
knowing your full retirement age or fr A believe it
or not. For a lot of Americans, getting this wrong
could cost you thousands of dollars in retirement benefits. Your
full retirement age is the age at which you're entitled
to one hundred percent of your Social Security retirement benefit.
So let's go through those very quickly. At age sixty two.
There's lots of magic ages for so Security sixty two
is the earliest you can claim anything. That's also the
(16:06):
lowest check you'll ever get. Seventy is the latest at
which it doesn't benefit you to wait any longer. If
every year you wait between those years, and you can
look at your Social Security report that you can get
from SSA dot Gov in a MYSOI scurity profile, if
you do the math between those years sixty two to seven,
you'll see a calculated eight percent increase. Every year you
(16:27):
continue to not file for it, you'll get an eight
percent increase. So where that comes from. That amount is
based on your thirty five highest earning years. And here's
the kicker. Your full retirement age depends on your birth year.
So if you were born before nineteen fifty five, for example,
your full retirement age or FRA is sixty six nineteen
sixty or later. And this is important, it's sixty seven.
(16:48):
So for everybody listening to me right now, your full
retirement age is somewhere between sixty six and sixty seven.
A lot of people think sixty five. That's another magic age,
but that's tied to Medicare. Medicare eligibility starts at age
sixty five, but they have different timelines. If you act
based on the wrong assumption, it could permanently reduce your benefits.
So make sure you understand what you get into before
you pull the trigger on these things.
Speaker 2 (17:09):
Yeah, another good piece of advice here is is to
go ahead and log onto that SSA dot gov website
and create an account, because Brian, correct me if I'm wrong.
The Social Security Administration, I think a couple of years ago,
stopped mailing out these annual paper statements, you know, for
security reasons, identity theft reasons, and to save money. But
(17:30):
they want everybody to create an account on SSA dot gov.
And it's actually a pretty darn good website as a taxpayer.
Speaker 1 (17:37):
As a taxpayer, I appreciate that we don't send out
three hundred million reports that nobody reads. So I'm glad
that if you want it, you got to go chase it.
Speaker 2 (17:44):
But you want, you want to open up an account
and be able to look at your statement at least
every one or two years, and just make sure the
calculations are being derived properly, because, as you said, it
is based on your highest thirty five years worth of earnings,
and you want to make sure you know those numbers.
Look correct and if they aren't, get out ahead of
it before you know, it's time to claim benefits.
Speaker 1 (18:05):
Yeah, and as I always encourage my clients to pull
that every now and then. For yeah, we know you
pulled it five years ago. We built it into your plan.
But it just make sure it's capturing everything correctly and
what can go wrong here? You know, we all think
that all this data is out there and everything's wonderful,
but remember this is the federal government we're talking about.
Sometimes not the most efficient tool in the box. So
what can happen for people who, for example, move from
(18:27):
a state type employment to the private sector or vice versa.
Social Security can miss a beat. Sometimes it misses that
you or it doesn't get your salary right, or if
you move from state to state you have a lot
of job changes. Sometimes the HR department doesn't report what
they need to correctly, and that takes a long time,
but it filters into your Social Security report. So just
look at those all of those years of earnings. It
(18:48):
will show you what it thinks you have earned over
your entire working career of thirty five to forty years.
Just make sure that it makes sense, because that is
absolutely factoring into your retirement benefits. And one more thing
I'll throw out there. It does not hurt you. A
lot of people get confused by this. It does not
hurt you to take a lower paying job for the
final few years before retirement. Remember the math is your
(19:10):
thirty five highest earning years. So if you take a
lower paying job in your last few years before retirement
and it offsets something you did in high school because
it's bigger, that actually helps you. Yeah.
Speaker 2 (19:21):
And one more reminder on the whole work thing with
social Security benefits. Remember, if you take Social Security benefits
before your full retirement age and keep working, you could
get a pretty stiff penalty on your Social Security benefit.
Just another watch out there. Here's the all Worth advice.
Social security is not a one size fits all proposition.
(19:42):
Know your full retirement retirement age, Know what your benefits
look like, because it is the foundation of making the
right timing decision on when to claim benefits. Coming up next,
we're going to tackle the unknown disruptor in wealth planning.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
(20:07):
Simply Money presented by all Worth Financial on Bob Sponseller
along with Brian Chames. Tonight, we want to talk about
what can become a very difficult topic for families, and
that's long term care. What a loaded topic, Brian, and
we want to start with a hypothetical story. We're going
to talk about a lady named Terry, you know, obviously
(20:28):
a fictitious name. Her estate plan was meticulous. She had
worked closely with her advisors to build a multi generational strategy, trust,
taxi optimization, charitable giving, you know, the whole nine yards.
Speaker 1 (20:43):
Everything was in order until it wasn't. What happened next, Brian, Well,
what happened next, Bob, was life And this is yes,
this is a fictional name, but I think I've probably
heard this story twenty times over my financial planning career,
so obviously you might see this coming already. But healthcare
are health problems popped up and that really changed the
trajectory of her retirement. What happened was she had a
(21:04):
stroke and while she did survive that her recovery was
not complete. So she did wind up meeting daily support
helping her get around first at home and then on
down the line in a private care facility, and just
like that, the plan that everybody thought was all chip
shape and you know, rock solid, was right back on
the table because all of a sudden we had this,
you know, this shot from left field that didn't see coming.
(21:27):
So her adult children, who we were thinking, they were acting,
you know, with care and urgency. This is what they
needed to do. So they started making decisions that they
themselves had never thought about. Because Mom was still young
and healthy at this point, right up until the stroke.
So what do we do? How do we manage her
care while protecting this trust. Should we sell the investment
property to cover the costs or is it better to
hang on to the investment property in case it continues
to grow, which will help us cover more costs. Are
(21:49):
these the things she would have wanted us to do?
And how long is this going to last? And what
happens to the rest of the plan. So these these
aren't really financial problems in the traditional sense. This isn't
a how are we going to pay for this type
of a situation. It was much more about efficiency. Where
are all these things and how do they help us?
Is this the right approach to take it? Or are
there better things that we are not seeing, so they
(22:09):
ended up with a lot of planning gaps, created a
lot of tension and uncertainty and unexpected trade offs, and
all of a sudden, siblings who who got along right
until this point, all of a sudden were pushed to
a point where they felt like they didn't know each
other anymore.
Speaker 2 (22:21):
Yeah, Brian, and I've I've had to deal with situations
like this, unfortunately several times now in my career. Having
done this as long as I have, I got a
lot of clients who are in their mid to late eighties,
and I have watched and tried to help people walk
down this path. And I would say the first thing
that you know, you can get rid of all the
(22:42):
spreadsheets and taxes and all that. It just comes down
to communication with the family. At the first sign that
there's any cognitive impairment or in this case, a sudden
impairment physical and mental due to stroke, you got to
get the family together and just talk and find find
out where everybody's at, what they're looking for, what they
(23:03):
can do in the way of helping, because everybody's situation
is different in terms of kids and their spouses and shoot, Ryan,
people are spread all over the country now in terms
of where they live.
Speaker 1 (23:15):
It just takes a lot of coordination.
Speaker 2 (23:17):
From a communication standpoint, because you know, in virtually every
case I've seen, people are less worried about the money
I'm talking about the kids. They're worried about how do
we take care of mom or dad? And everybody's got
to be real, honest and upfront, and hopefully the family
works together in providing the care. And once you determine
(23:40):
what the family is capable of or not capable of,
then it's time to look at professional help. Have you
have you seen something similar in the clients you deal with.
Speaker 1 (23:50):
Yeah, but it takes a long time for everybody to
come to that conclusion. All the siblings have to decide,
you know what, we really want to get this done right,
but we really have got to have some help here.
All right, Well, let's talk about what that help looks like.
Speaker 2 (24:02):
What are the things that we need to plan for
in advance or in this case, once a short term
or immediate need comes out of thin air and now
we got to deal with it, what are the things
that we need.
Speaker 1 (24:16):
To sit down and tackle well, and lots of people
can listening to us, can see this coming Obviously, the
first thought is, well, we must have to buy long
term care insurance. That's how we're protected. We will protect
from this risk, and yeah, that's a solution. Today's options
are more flexible than ever and they've evolved well beyond
the traditional policies where you throw a bunch of money
into it and if you don't ever have the need
(24:36):
for coverage or for care, then you lose those dollars.
But there are ways to get around that now. Now,
when it's used strategically, long term care insurance provides a
predictable source of liquidity that's not correlated to the market.
If you're not talking about an investment here, you're talking
about an insurance policy that will kick in with a
certain trigger that the insurance company has identified, and those
have to do with things such as being able to
(24:56):
get yourself out of bed, feed yourself, dress yourself, so forth.
Those are called the activities of daily living, and that's
how an insurance company will determine that yes, you indeed
qualify for care, and then the money will show up
to provide that you can. It can be integrated with
trust gifting strategies, other philanthropic plans, and it can also
be used in support of a trustee who's making decisions
(25:16):
or espouse during these health events. And and but sometimes
it doesn't work that way. Sometimes long term care insurance
maybe maybe you're uninsurable. Sometimes long term care insurers will
they don't they don't look at death as you know,
so in other words, they may not care so much
that you're a smoker. They care much more about the
things that will keep will keep you around for a while.
But but but require around the clock care. For example,
(25:38):
if there's a history of say Parkinson's or Huntington's or
Alzheimer's in your family, then that's the.
Speaker 2 (25:44):
Fact surgery, Yeah, all that too, something that replacement.
Speaker 1 (25:48):
Yeah, it's not the same things that can disqualify you
from life insurance. But regardless, sometimes you're uninsurable. So and
self funding is the solution there, which is quite literally
a fancy word for we're just going to eat this
cost and we'll deal with our Sometimes that can make
more sense because some clients will prefer having that flexibility
of modeling their own care scenarios using their own capital
money they already have. Others may field me may just
(26:10):
not agree with the idea of giving risk to an
insurance company if they feel like they can manage it,
because they feel like the insurance company is just there
to make money. So how do we close that gap
between attention and reality? Bob? How do you kind of
match these decisions to the outcome? Well, I think there's
a couple ways to do that.
Speaker 2 (26:27):
I mean, you can sit down and set aside some
money based on if you need care, how much money
do you need? And I'm talking about wealthier families that
can afford to self ensure this kind of stuff and
have the resources to do it. Again, the data says,
current data about seven and ten individuals turning age sixty
five today will require some form of long term care.
Speaker 1 (26:49):
That's pretty high odds.
Speaker 2 (26:50):
Meanwhile, more than two and ten of those individuals will
need care for five years or longer. So you know,
without trying to play god here, you can build into
your plan what that might look like. So you know,
you run different scenarios financially. But again, you want to
make sure you're communicating with your family in advance and
(27:10):
saying if the situation A or B happens to mom
and dad, how are.
Speaker 1 (27:16):
We prepared to deal with it?
Speaker 2 (27:17):
So there's an emotional and care aspect to this, and
also a financial aspect. Get out in front of it early,
work with your family, work with your spouse, work with
your advisors, and don't just bury your head in the
sand and assume nothing like this is ever going to
happen to you, because chances are it will.
Speaker 1 (27:36):
Here's the all Worth advice.
Speaker 2 (27:37):
However you cover long term care, insurance, self funding or
a mix, the goal is resilience, a plan that protects
your family and provides you with peace of mind. Next,
your biggest money questions answered, from retirement readiness to protecting
against fraud. You're listening to Simply Money presented by all
(27:57):
Worth Financial on fifty five KR see the talk station.
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller 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. Simply record your
(28:21):
question and it will come straight to us. David and
Blue Ash leads us off tonight.
Speaker 1 (28:26):
Brian.
Speaker 2 (28:26):
He says, we've saved about one point eight million dollars,
but we have no long term care coverage. How do
we protect ourselves from a nursing home bill that could
wipe us out?
Speaker 1 (28:38):
Well, David, I think the first thing to understand is
what could what could that bill be? So let's talk
some numbers here here, so here in this area, here
in the Ohio Kentucky, Indiana area, if we wound up
with a nursing home stay. First off, that average length
of that stay is about two and a half maybe
three years, and the average cost is let's call it,
about one hundred and fifteen maybe one hundred and twenty
thousand dollars. First thing I would throw out is a
(28:59):
lot a lot of people look at this and they say, oh,
my gosh, that's one hundred and twenty thousand dollars just
for one of us in a married couple, on top
of all our of other expenses. And that's not really
the case. Right, we were talking nursing home. So your
life has pretty much changed. You're going to be in
a place where you know you're not going in and
out a whole lot, You're not buying groceries anymore, and
potentially it's just not as much as you might think. However,
(29:21):
you've got this one point eight million, and you do
if you do want to use those assets in a
way to protect first thing I would look for is
do you happen to We don't really have details here,
but if you happen to have some of this cash
tied up in an insurance policy. Maybe you bought a
policy a long time ago, thinking you needed to protect
the kids, the mortgage and all that kind of stuff,
but those goals have all been accomplished and are no
longer risks. If you have an old policy with cash
(29:44):
in it, you can do something called a ten thirty
five exchange and move that into a policy that, yes,
has a death benefit, just like a life insurance policy,
but it's a reduced death benefit in exchange for being
able to tap into it should a long term care
need arise. This is my absolute favorite thing to get
to do for clients when the situation arises, because these
are assets we're not using otherwise. Let's redeploy them in
(30:04):
a non taxable manner. That's what a ten thirty five
exchange is. And now all of a sudden, I have
long term care coverage where there was none before, and
if I don't use it, somebody's still getting a death benefit.
Maybe that helps you, but I'd also say at one
point eight you might be okay even considering just self insuring.
So that's what a financial plan is for. I find
a fiducial advisor to help you determine that. Bruce in Lovelnd,
(30:25):
this one's for you, Bob, coming your way. Bruce is
worried about cyber fraud and identity theft, you know, even
more than market risk at this point, and he's wondering
how wealthy and families, how wealthy families protect against that.
Speaker 2 (30:35):
Well, Bruce, there's the obvious things. You know, watch which
browser you're using. We did a segment yesterday about, you know,
the dangers of sharing all your information with Google.
Speaker 1 (30:45):
Don't click on those texts.
Speaker 2 (30:46):
That come through from the Ohio Bureau of Motor Vehicles
and things like that. I think those are relatively obvious
things now that most people are aware of.
Speaker 1 (30:56):
I'm going to give.
Speaker 2 (30:57):
A plug to our good friend Dave Hatterer. I'd say
follow Dave on both x and LinkedIn. He does a
great job of putting out a lot of good, no
cost information, you know, just to help you protect yourself
and give you a few things to think about.
Speaker 1 (31:15):
And then if you need more protection beyond that.
Speaker 2 (31:18):
Dave is available, you know, for hire to help look
at your individual situation or the situation for your company.
If you need to get more pardon me in depth
on putting in some some more technology or protection.
Speaker 1 (31:32):
But it's a real topic out there, Bruce.
Speaker 2 (31:35):
I think you're very wise to dig in and look
at that.
Speaker 1 (31:39):
Dave Hatter is a great resource for that topic.
Speaker 2 (31:42):
All right, Lisa and Anderson, our estate is two point
two million dollars. Do we still need a trust at
our level? Or is a simple will and just beneficiary
designations enough? Brian, great question is a great question. And
the first thing we've got to say is we are
not lawyers. We're just talking heads on a radio.
Speaker 1 (31:58):
But at the same time, as a certified and in
answer planners, charter financial counselors, this is what we do,
so we can still kind of guide here. But so
let's talk about when when a trust might make sense. Well, well,
a trust will avoid probate. That's pretty important. But all
that's not that hard to do if you simply have
you know, if your goal is really to just avoid
probate and keep your estate simple for your heirs, then
all you have to do is make sure that beneficiaries
(32:20):
are clearly labeled on all of your all of your
assets wherever you can. Some are easier than others, your IRA,
your four oh one K. Basically you're forced to do
it when you set it up. So those probably already
have beneficiaries. The goal there is make sure they're up
to date. Other accounts such as your your plan old,
you know, maybe you have a joint savings account, bank accounts.
Banks will do this too, but you have to ask
them for it. So if you're in if you want
(32:41):
to talk to your bank, you're talking to you're you're
going to ask them for a POD payable on death designation,
which is just a piece of paper that says if
I get hit by a bus, these assets go to
these people. That simple step naming beneficiaries will avoid UH,
will avoid probate. You can get it done that easily.
Speaker 2 (32:57):
Beyond Brian, I had I had a meeting, you know,
with a client yesterday on this exact topic. And they
had several million dollars in jointly titled mutual funds that
they've owned for almost fifty years. And we had this
exact conversation with them, and the attorney that was sitting
at the table. We advise them to just add payable
(33:18):
on death designations to their mutual fund accounts so that
at the death of the second spouse we have named beneficiaries.
In this case, we are leaving it to a trust,
but we avoid we avoid probate on everything just by
taking care of those pod designations. It's pretty simple and straightforward.
(33:39):
Unfortunately a lot of people don't think about it. Yeah,
you're right, and I had a situation.
Speaker 1 (33:43):
Actually, I've had several of these recently where people just
have built up assets, they haven't paid much attention to
the titles of the accounts. This stuff isn't super important
in our brains when we're setting up things, you know,
thirty years in the past, just getting started. But now
I have married couples who each have individual not iras,
but just individually titled accounts, amounts of money in them.
And what's going to happen unless we fix that. At
(34:03):
least name a beneficiary, if not name it joint. There's
moving parts to that in any marriage, but at least
name a beneficiary and these individually titled accounts. Otherwise a
grieving spouse is going to have to sit through probate
simply to get assets to move from one side of
the dinner table to the other. Name your beneficiaries. I
had lots of information there, so at least hopefully that helps.
We've got time for one more quick when Tony and
(34:25):
fort Wright Bob, he's got a million and a half
and he's still working. He's wondering should he be using
his wroth side of his four O one k or
stick with that pretext.
Speaker 2 (34:32):
Well, Tony, I think you need to sit down with
a good fiduciary advisor in coordination with a CPA and
run different scenarios because you know, we don't know how
much you make, we don't know how long you're gonna work.
But you want to run different scenarios to just sketch
this out ahead of time and with reasonable assumptions you
can pretty quickly and easily come up with a good
(34:52):
plan moving forward. Coming up next, we've got Brian's bottom line.
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 spont
Seller along with Brian James and Brian, I'm laughing because
(35:15):
nothing goes nothing pairs quite as well together as Jimmy
Buffett and what you're going to talk about next.
Speaker 1 (35:23):
To Secure two point two point oho Act. You might
be reaching there a little bit. And I don't think
we're stepping on a pop tops with this one, but
important adult information. We need to know things as grown ups,
and here's one of them. So Secure Act two point
oh came out a few years ago. We've kind of
forgotten about it because there's a lot of bridge a
water under the bridge ever since. But it had a
lot of bells and whistles in it that I think
(35:44):
sometimes we forget about. So the one we're gonna talk
about today is employer sponsored emergency savings accounts. So our Congress,
with the love and care and affection that they have
for all of us, realizes that not a lot of
us can put our hands on a thousand bucks, and
so they're trying. They try. I had to set up
ways to make it, to entice people to do it,
and set up benefits just to set aside money. One
(36:04):
of those was the ability for an employer to offer
an emergency savings account for up to twenty five hundred
dollars that allows workers to stash short term savings alongside
their retirement accounts. The hope is if we can kind
of automate this and make it like a four to
oh one, kay, but allow access to it during life
before you retire, then maybe people will put themselves in
a better position and have a little bit of cash
(36:25):
which functions as oil in the engine, as opposed to
having to run up credit cards or eat penalties and
taxes on retirement plan distributions. If bad stuff happens, I
can say, you want to say something, Bob, Yeah, do
you have.
Speaker 2 (36:36):
Any idea how many companies have these accounts in place?
And then how many employees are taking advantage of them?
I'm curious, to my knowledge none. But that's not a
correct statement. I'm just saying I haven't run across it.
So the revolution starts today, Bob. That's why we're talking
about it on the radio.
Speaker 1 (36:53):
But no, that's why. So if you are an employer,
and maybe you are an employer, and you know some
of your employees are in this situation, maybe either asking
for advances on their paychecks, those kinds of things, and
if you're someone who cares and you want to help them. Well,
this might be a bell and whistle that you could
put in place. So here's how it works. You can
allow employees to stave into a side account that's tied
to your plan up to twenty five hundred bucks, separate
(37:15):
from retirement and accessible in emergencies, funded by payroll deductions. Right,
this is important because that makes it that kind of
locks it in. We all forget about our four to
one K contributions and then poof, thirty years later, we
got a lot of money. Well, this is a way
that we can kind of in the background, the back
of our minds be funding our emergency savings accounts. And
if you wanted to, and you've got the ability as
the employer, you can set up matching or even seed contributions.
(37:38):
You throw in a hundred bucks, I'll throw in a
hundred bucks, or everybody gets a little bit of money
to entice people to put themselves in this position. Now,
there's of course trade offs, there's liquidity instead of locking
it in, and there's potential tax treatment rules those kinds
of things, But I think overall it's a good idea
in general for people to simply have a better option
than credit cards, payday loans, and four to oh one
(37:59):
K penalizable distributions to pay those bills that come up
in crazy times. I actually love the idea.
Speaker 2 (38:07):
I mean, let's face it, we got a lot of
people out there living paycheck to paycheck and they need
some forced savings mechanisms in place, you know, just to
put everything on autopilot. It's a great way to operate.
And let's face it, human beings respond to incentives. So
if the company's going to kick in a little bit
of money here, you know, a matching contribution for an
emergency fund, I think more people would be prone to
(38:28):
take advantage of that, and that's a good thing. Brian,
thanks for listening tonight. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station
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