October 3, 2025 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian bust some of the biggest money myths that could sink your financial future — from “I’ll just work forever” to “downsizing my house will give me a windfall” to “Medicare will cover long-term care.” They’ll explain why these assumptions can derail even the best-laid retirement plans and how to replace wishful thinking with solid math. Plus, are we already in an AI bubble, and why investors aren’t panicking yet? And as always, they’ll answer your questions about RMDs, Medicare premiums, direct indexing, buffered ETFs, tax planning, and more.
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Episode Transcript
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Speaker 1 (00:05):
Tonight some of the money myths we tell ourselves that
could sink a financial future. If you're listening to Simply
Money presented by all Worth Financial, I'm Bob Sponseller along
with Brian James. Well, we human beings. Brian, we are
really good at rationalizing our own behavior, especially when it
comes to money. We just mentally smooth things over and
(00:27):
what we say, it'll all be fine, and before you
know it, you've built your entire retirement plan on a myth.
Tonight we're gonna call out some of those most common
money myths that we run into all the time. Let's
get into it.
Speaker 2 (00:41):
Bob, I love what I do.
Speaker 3 (00:42):
I love doing this radio show with you, and I'm
gonna do it till I'm one hundred and fifty.
Speaker 2 (00:46):
How does that sound? That's one of our miss I'm
gonna work forever.
Speaker 1 (00:49):
I'm in. I got bad I got bad news for you.
I think I'm gonna retire at age one. We're gonna
have to do this for two years by yourself. But
last two years are gonna be rough.
Speaker 3 (00:58):
Yeah, but yeah, So maybe you do want to keep working, right,
Maybe you do love what you do, and that's fantastic,
That's the dream, by the way, right, enjoying what you
do and not dreading having to go to that place
to go do it every day.
Speaker 2 (01:09):
That is what we all should be able to be
exposed to. But here's the reality.
Speaker 3 (01:12):
Lots of people don't get to decide when that career ends.
Health issues intervene either you or a loved one. Maybe
it's a spouse, maybe it's your parents. You just can't
squeeze it all in, so you have to make different decisions. Obviously,
we can get layoffs, corporate downsizing, caring for spouses, parents,
all that stuff just comes out of nowhere and hit suddenly,
and suddenly I want to work forever becomes I need
to get out of here so I can take care
(01:33):
of these other things.
Speaker 2 (01:34):
I wasn't planning on. Statistics back this up, too, Bob.
Speaker 3 (01:37):
So the Employee Benefit Research Institute, which we rely on
all the time for research like this, said they say
about forty percent of retirees leave the workforce earlier than
they planned, meaning that only sixty percent of people get
to call their shot. The other forty are informed by
something else that they have to make a change, and
this is usually because of health or a job loss.
That's almost half of people out there who are thinking
(01:58):
they get to call their shots in it doesn't work
out that way. Planning to work forever isn't a plan,
it's a wish. You may not get to act on it.
So don't assume that your career is your insurance policy.
Your portfolio and your financial plan are going to have
to carry the weight because you may not be employed
as long as you think you will.
Speaker 1 (02:14):
Yeah, I have to ad miss admit that forty percent
numbers seemed high to me and it surprised me so,
but it's always good to have research. And yeah, roughly
half the people don't get to call their own shot.
It's good to call that out. All right, let's move
into myth number two, and Brian, this is one of
my favorites. I'll quote unquote downsize my house and pocket
(02:34):
the difference. People assume that selling the big house in
the suburbs and moving to a quote unquote smaller place
will unlock a windfall. Brian, I don't know about you.
Every single person I've ever worked with that has come
in and talked about doing this, invariably, very few, if any,
end up spending less money. The square footage of the
(02:57):
house might be smaller, but people don't sell their current
home and buy a thirty or forty year home. The
year old home, even if it's quote unquote smaller, it's newer,
and they want to refurbish it and get new furnishings
and blinds and drapes, and before you know it, people
have spent not less, but sometimes more than they were
(03:20):
spending on their quote unquote big house. Do you find
the same thing happening?
Speaker 2 (03:24):
Oh, every time.
Speaker 3 (03:25):
So people who say people who come in with that
myth are there, I always know they're not that close
to pulling the trigger on this because obviously they haven't
at all done any research on what the right piece
of real estate might be, because they will learn in
that first fifteen minutes of searching for houses or condos
or whatever they're looking for, they'll learn that it just
doesn't work that way. You're gonna you're not gonna want
to downsize the lifestyle, right, You're gonna want maybe a
(03:48):
smaller place, but you're gonna want a cooler neighborhood, closer
to amenities, things like that, or you know, just maybe
an upgraded facility to live in. All that stuff costs money.
You're not gonna save a nickelon doesn't mean don't do it,
but don't bank on pulling up a couple hundred thousand
dollars out of your housing situation.
Speaker 1 (04:02):
So here's what. Yeah, I just say take your time
here and don't make an emotional decision because the meetings
that make me very nervous are when it's say, well, Bob,
we got to update you on what we did, we
did this, we're doing this, and they haven't run the numbers.
They just assume it's all gonna work out. But again,
not to belabor that point too much, get us send
(04:23):
a myth number three.
Speaker 3 (04:25):
So myth number three is that if I need long
term care, that's not a problem because Medicare, the government
will come along and save me. Well, the reality is,
and this does get a little confusing, Medicare will cover
about thirty days of a long term care situation, but
not because it's long term care. They just classify that
as short term rehab. So this is we're not talking
about years of assisted living, memory care, those kinds of things.
That's for you know, if that's where you're gonna need
(04:46):
insurance or you're gonna need to be able.
Speaker 2 (04:47):
To cover it out of your own portfolio. That's so
this is a very very.
Speaker 3 (04:51):
Dangerous myth for people to believe in. You should run
your financial plan and know what those expenses.
Speaker 1 (04:55):
Will look like.
Speaker 3 (04:55):
Model that out and make sure you can cover it.
Long term care insurance may or may not be some
you need to do. Don't instantly go there, but you
need to understand the math behind it. So a strong
retirement plan doesn't ignore long term care. It takes it
head on, look at it, model it out, make sure
you've got a way to cover it before it's too late.
Speaker 1 (05:13):
Yeah. Myth number four, and this is a fun one
to talk about. You know the quote unquote, well, I
really don't spend that much on travel. In reality, travel
is one of the biggest retirement line items, especially for
wealthier families, and there's nothing wrong with that. It's great
to travel, but you got to plan for it. And
the problem is pretending that that number is going to
(05:34):
actually be smaller than it really is, because if you
underbudget for it or don't budget for it at all,
you might run into a problem later on or guilt
yourself into cutting back on the thing you most love
to do. Brian, I run into It's usually one of
two extremes. Extreme number one is we almost have to
talk people into doing some traveling and having a little
(05:56):
fun because they're afraid of spending any money. And these
are folks that are just warehousing a big pile of
growing assets that they're not having any fun with. Then
you got the other extreme, where you know, they don't
even plan for travel. And then again, just like the
house downsizing thing, the topic comes up in the annual
review meetings and they're just throwing out, well, I gotta
(06:17):
I got a cruise to you know, wherever, I got
a trip to Australia, and you start adding up the
numbers and it's huge, and they never even put this
into their retirement budget and we got to kind of
walk them off the ledge on that extreme is that
is that similar to what you find, oh, one hundred percent, Bob.
Speaker 3 (06:34):
And then that's mostly when when we sit down people
and build financial plans.
Speaker 2 (06:37):
If they listen to this show, if they're aware that
we exist, and they.
Speaker 3 (06:40):
Are already people who have been seeking out financial education
information for a long time and they've probably got themselves.
Speaker 2 (06:46):
It's much more about efficiency than it is success. Or failure.
But that tends to me that it tends to me.
Speaker 3 (06:50):
They get themselves bald up over I don't, I don't,
I don't want to spend I can't spend this money.
Speaker 2 (06:54):
It's it's for it's for raindy day, for rainy day.
Speaker 3 (06:56):
Well that rainy day never comes, and they they wind
up squeezing a lot of years out that could have
been a lot more enjoyable they had they had a
clear picture of their financial plan. So but yeah, if
you want to travel, do it.
Speaker 2 (07:06):
That's your thing. Do it, budget for it, put it
in your plan and do it.
Speaker 1 (07:10):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James. All Right, the
next myth the kids will take care of me? We
talk about, you know, so many of these older baby
boomer family they're spending money on their kids, helping to
fund some of these things that cost a lot of
(07:31):
money for young adult kids. And then in the next
breath they come and say, well, our kids are going
to take care of us if we run out of money.
Let's face it. We love our kids, but relying on
them financially is risky. Life is expensive. For them too.
You know, a lot of them have student loans, trying
to get a down payment for a house, raising their
own kids, and even in wealthy families, the expectation the
(07:55):
kids will foot the bill for mom and dad. That
is just outdated and can be dangerous.
Speaker 3 (08:01):
Yeah, I definitely wouldn't want to rely on this, and
just for the fact that I think the bigger part
of this is life is just going to be a
lot more expensive for my kids than it was for me.
It was more expensive for me than my parents, and
that's just kind of the way things roll, and that
seems to be accelerating.
Speaker 2 (08:13):
I don't want to burden them.
Speaker 3 (08:14):
I don't want to put them in a position where
not only do they have to deal with a reality that.
Speaker 2 (08:18):
I never did, they got to worry about me. That's
not fair to them.
Speaker 3 (08:21):
So, speaking of generational financial issues, the assumption that I'll
get an inherent inheritance, this can be dangerous because you don't.
Speaker 2 (08:29):
Know when that's going to come.
Speaker 3 (08:30):
A lot of people will come in and as part
of the plan, they'll say, well, I'm going to get
a few million dollars for mom or dad. Well, okay,
how old are mom and dad? Oh, they're in their
seventies and they're doing pretty good.
Speaker 2 (08:37):
That's great.
Speaker 3 (08:38):
That could be thirty years from now that this money
is coming, at which point you yourself will be in
your early seventies. So we can't plan on that. If
you're sixty and your parents are eighty five and healthy,
that's gonna be another fifteen twenty years down the road,
and you don't know how much is going to be left.
They might spend more than you think. It's their money,
not yours. Maybe they need long term care, which means
it now belongs to a medical facility. They may choose
(08:59):
to leave part of it to charity. Those plans can change.
So just treat an inheritance as a bonus, but don't
count on it. It's a gift, but that should never
ever be the plan.
Speaker 1 (09:09):
All right. Another myth that we need to dive into
is the quote unquote, I will spend less in retirement.
In reality, Brian, in the first ten to fifteen years
of retirement, many retirees actually spend more because they finally
have time to travel, get into some of their hobbies,
do some home remodeling, and then, like we talked about
(09:29):
helping kids and grandkids, all that stuff adds up. Let's
face it, when people have disposable time, they tend to
find ways to spend money as part of using that time.
And you got a plan for that. Yeah.
Speaker 3 (09:42):
So this is where I always have conversations with people
that when when a lot of times we have when
I have a new client come in, they'll come in
and they'll say, all right, we've got a budget, we're
gonna we're gonna build a vegetable garden, we're gonna eat
out of that, and we're never gonna leave the house.
And my response to that is always that that sounds
like an absolutely miserable retirement.
Speaker 2 (09:56):
Let's go the other direction.
Speaker 3 (09:58):
Let's I mean, nothing wrong with vegetable garden, but let's
not count on that for the next thirty forty years
of our lives.
Speaker 2 (10:02):
Retirement is a long time.
Speaker 3 (10:04):
Let's not start it by forcing ourselves into some kind
of budget they may or may not even be necessary
before we've put.
Speaker 2 (10:10):
Together a financial plan. I like to go the other way.
Speaker 3 (10:13):
Since we're just throwing spaghetti at the wall, Let's build
a financial plan that includes absolutely everything you considered doing.
You may not actually do. It doesn't matter. We're throwing
fake expenses together. So let's just see if it works.
If you can pull it off, great, maybe you'll be
pleasantly surprised. If you can't pull it off, well, you
weren't really sold on it to begin with, so then
it becomes more comfortable to go ahead and pair things
(10:33):
down that you weren't all that convicted on to begin with,
rather than let's spend nothing and assume we'll be happy
and two three years later we'll spend money wildly because
we kind of made ourselves miserable in the first early
years and then convinced ourselves that we deserve some things.
Think through. It's okay to want to spend what you've
built for yourself. You are allowed, all right.
Speaker 1 (10:52):
In the final myth we want to touch on tonight.
You know folks that say retirement means I'll finally relax ah.
In reality, many think they'll stop worrying about money or
anything else once they retire. In reality, without a clear
plan not only for income and spending, but just your
overall purpose in life how to spend your time and energy,
(11:13):
retirement actually increases stress for people if they don't have
a plan and haven't thought through things. This is a
critical thing because, let's face it, after people have worked
thirty five, forty fifty years, I mean they do. I
hate to use the word deserve, but we want people
to be able to enjoy their retirement years. But it
(11:35):
requires doing a little planning and maybe taught, getting some
objective advice from a good fiduciary advisor so that folks
can actually relax and take those trips and not focus
on what the stock market's doing every day.
Speaker 2 (11:49):
Yeah.
Speaker 3 (11:49):
I think this is a really important one because this
is what I find myself paying attention to the most.
I always told myself that along the way of my
thirty forty year career, I was going to pay attention to.
The happiest people are the ones who really had a
clear financial plan and also a plan to know what
they were gonna do, how they're gonna spend the time.
The most stressed out ones that seem to be disappointed
in retirement didn't have a.
Speaker 2 (12:10):
Plan not only for finances, but.
Speaker 3 (12:12):
For all of that huge expansive time that they have.
Speaker 1 (12:16):
Here's the allworth advice. The stories we tell ourselves can
derail even a great nest egg of assets. Swap the
myths for math in a clearly constructed plan and your
future will thank you. Are we in an AI bubble?
Why investors aren't panicking yet? Just yet? Plus the first
(12:37):
luxury crew setting sale across the Great Lakes, and we
answer a big money question before the week's over. You're
listening to Simply Money presented by Allworth Financial on fifty
five KRC the talk station. You're listening to Simply Money
presented by Allworth Financial on Bob Sponseller along with Brian
(12:59):
James from Madeira to Mason. You've got questions, We've got answers.
Don't miss tonight's Ask the Advisor segment coming up at
six forty three. It's a question many in the financial
world are asking at this point. Are we in the
middle of an AI bubble? Well, according to recent data
from Google Trends, I have to laugh, the speculation might
(13:23):
have peaked. Brian walked through some of the data that
Google is tracking, because after all, Google knows everything about
everything that we do, and that can be a scary proposition.
Speaker 2 (13:34):
Yeah.
Speaker 3 (13:34):
So, Google Trends is a part of the Alphabet owned
Google metroplex where they just basically say here's what's in
people's brains that's coming out through their keyboards, just basically,
and if.
Speaker 1 (13:44):
You don't have the right thing, and if you don't
have the right things in your brains, we will insert
it into your brain for you. But there you go.
Speaker 2 (13:51):
That's exactly right.
Speaker 1 (13:52):
Yeah.
Speaker 2 (13:52):
So anyway, so what they were looking for.
Speaker 3 (13:55):
The number of web searches for the term AI bubble
has plummeted over the past month. This this is a
reaction to what we've been talking about AI for it
feels like a couple of years now, and it came
out of nowhere in terms of being a topic of
daily discussion. But then all of a sudden, everybody's quickly
gotten up to speed on how it can help them.
So of course that makes it an investment opportunity, so
let's pay attention to it. But it seems to be
(14:16):
the interest in the topic seems to be backing off
a little bit.
Speaker 2 (14:20):
Search traffic for the phrase AI bubble peaked.
Speaker 3 (14:23):
On August twenty first, and this was right after a
report from MIT some smart brains out in Massachusetts appeared
to suggest that they that hardly any organizations were truly
seeing a return on investment for whatever they're doing in AI.
And at the same time, open AI CEO Sam Altman,
He's the guy behind chat GPT, But he suggested that
investors might be getting a little too excited about this
(14:43):
to begin with. Although acknowledging you know, this technology is
going to have a transformational impact, he thinks that we
might have run a little too far in terms of
our assumption that things are going to just kick off
and everything's gonna be wonderful from here forward.
Speaker 1 (14:56):
Well, Brian, I think stories like this I pretty much
dismiss them entirely. You tell me if I'm flawed here,
because you know, all searches on the internet and all
that that has nothing to do whatsoever about the underlying
fundamentals of these companies. And I think it's safe to
say that AI is here to stay. It's ubiquitous, it's growing,
(15:18):
it's going to change the way we live and do business,
and all that's a good thing. The key watch out
here is you just got to be careful on where
you place your money and don't be afraid of AI
on the one on the one hand, But don't get
all your eggs in one basket either and just pile
into everything at the top. Uh, stay diversified. Ignore some
(15:41):
of this noise out here and just stay with a
good fundamental discipline investment strategy.
Speaker 2 (15:48):
Yeah, so this is I agree with you.
Speaker 3 (15:50):
But at the same time, there, I think there's room
for data in here, just just to figure out what
are people doing. I do like the idea that the
Google trend's ability of knowing what people are thinking about
that does help, I think with decision making for companies
and so forth.
Speaker 2 (16:04):
So I think there's some useful tools in here.
Speaker 1 (16:06):
Well. The smartest thing I saw from this report and
I believe this, and we saw this, you know, when
the Internet bubble happened, you know, and this theory and
this report states that new technology is adopted in stages
innovation stage, inflated expectation stage, disillusionment stage, I even as
det going down, I don't know, seventy percent enlightenment and
(16:30):
then finally new productivity. That's kind of the way things work,
and it'll work this time with AI two. Am I
wrong there, Brian, No.
Speaker 3 (16:40):
Everything that happens, all these kind of tools, these become
a catalyst for investment, right, It's an opportunity for companies
to make things more efficient. I think the assumption when
we first started talking about artificial intelligence. We thought the
army of robots was going to show up tomorrow to
really literally take jobs away and so forth. And I
do think that's going to happen in certain corners of
the economy, because there are things AI can do simply
(17:02):
better than a human being and with less risk and
so forth.
Speaker 2 (17:06):
But for the most part, I think it's.
Speaker 3 (17:07):
Going to simply complement what a human being can do
and make us more productive. I can speak directly to
my own daily routine. I do use a chat GPT,
and I use because it's a much better way to
put together chunks of information from different places to help
save me time to come to a conclusion without having
to go back and do a doctoral research paper on
some obscure financial planning topic. It does connect points A
(17:31):
and point B a lot more quickly, but it doesn't
remove me from the need to deliver advice to another
human being who wants to look somebody in the eye
and hear that it's going to be okay.
Speaker 2 (17:40):
Because of these seven reasons, AI is.
Speaker 3 (17:42):
Never going to do that any more than any other
computer based financial planning tools or no load index funds
or all the other things that we're going to end
my career over the past thirty years.
Speaker 1 (17:50):
All right, switching gears here. If you're decigning what to
do from a travel planning standpoint next year, this could
be a cool trip, a cruise around the Great Lakes, Brian,
I have I have virtually no interest in spending my
hard earned money getting into a boat and sailing to Cleveland, Ohio.
But please fill us in on this exciting new travel
(18:13):
opportunity that's coming in May of twenty twenty six.
Speaker 3 (18:16):
Well, you need to expand your world then, because there's
more to the Great Lakes than Cleveland, Ohio.
Speaker 2 (18:21):
If you've never been to the Upper Peninsula, then you
gotta go.
Speaker 1 (18:23):
I've been there, I've been to the Michigan It's.
Speaker 2 (18:26):
They're just grumpy.
Speaker 1 (18:27):
Bob.
Speaker 2 (18:27):
Well, this is for the non Bobs out there, for
the non grumpy.
Speaker 3 (18:30):
People who like to see the world. So this is
the cruise Lines Aget. There's three itinerar areas coming. There's
a Great Lakes and Thousand Islands crews that'll go between Syracuse,
New York Cleveland.
Speaker 2 (18:39):
Bob won't.
Speaker 3 (18:39):
Bob won't be on that one because it's got Cleveland
in it. That'll go through Lake Ontario. Lake Erie Excursions
and all these other things, a shipwreck cruise to on
a glass bottom boat and Niagara Falls as well, and
some other ones out there too. There's a there's a
two week long one that runs between Cleveland and Milwaukee.
So basically, these are luxury cruises, right. They're putting you
in a comfortable spot. It's kind of like the idea
(19:01):
of going down to the Caribbean, except with a little
bit different viewpoints. So let's talk money so much of the.
Speaker 1 (19:06):
So you mean I can get on a glass bottom
boat and look at all the debris buried in the
Cuyahoga River. Is that actually an opportunity I can take
advantage of?
Speaker 2 (19:15):
Well, open your mind, Bob. These these are things for fun.
Speaker 1 (19:18):
People maybe talk about Mcina Island, talk about.
Speaker 3 (19:21):
That Mcina Island, Mackinac is a lovely place to be.
So these are a little on the pricey side. That's
where the word luxury comes in. So these cruises start
about eighty six seventy five per person eight thousand, six
seventy five based on double occupancy. So this includes meals, drinks,
and the typical things you would include. But you're gonna
want to budget for it. If we're gonna pull the trigger.
Speaker 1 (19:41):
All right? Should you be using AI to just help
you blindly buy stuff? Our cybersecurity expert is in to
discuss that. Next. 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
(20:03):
lunebopspond Seller along with Brian James, joined today by our
tech and AI and cybersecurity guru, mister Dave Hatter. Dave,
I can't wait to get your thoughts on this topic.
We came across an article recently where these AI tools
now you can tell them, for example, go out and
(20:24):
find me the best pair of jym shoes for under
one hundred dollars. Find the best quality pair of GYM shoes,
find it, buy it, ship it to us, put it
on my visa card. Dave, I'll tell you right now,
there's no way in hell I'm gonna let some computer
do that for me.
Speaker 2 (20:42):
What say you?
Speaker 1 (20:43):
And what could possibly go wrong with this kind of
quote unquote new and exciting technology out there?
Speaker 4 (20:50):
Well, guys, as always, thanks for having me on and
I'm glad you guys came up with this as a
topic to discuss because it touches on a couple of things.
There's this whole sort of new ish field and AI
called agentic AI or a AI AGENTICS. You'll hear people
say it both ways. And this goes beyond things like
chat ept or crock or other chatbot type systems where
(21:15):
you sit down and type in a prompt. The idea
of a gentic AI is it essentially can act like
a human being and take take action on tasks. It
has agency, right, hence the name agentic And this is
sort of all the rage and the business. Now when
you hear people talk about how AI is going to
put people out of work and so forth, and when
(21:36):
they're not talking about super intelligence and artificial general intelligence,
they're generally talking about agentic AI, that these things are
going to be set up in this AI will talk
to that AI and it'll do all of this stuff
and work and we won't need people anymore. Now, will
we get there eventually? Maybe I'm calling bs on it
at the moment. And to answer your question specifically, Bob, No,
(21:57):
there is absolutely not a chance in hell I would
give any sort of AI agent access to my bank
accounts or any financial system and then let it act
on my behalf and I'll tell you why. So, guys,
I spent twenty five years in this business before I
sort of transitioned into cybersecurity. As a software engineer, I
(22:19):
wrote millions of lines of code, built every kind of
thing you could imagine. And how many times do you
think I created a bug in software and there were
unintended consequences? The answer is a lot. I don't know
how many. How many times do you think I did
that on purpose? Well, the answer is never. But I'm
a human being. I make mistakes. And you know, one
of the key problems with AI to date is you
(22:42):
have this idea of hallucinations or confabulations where they just
make things up. So the idea that I'm going to trust.
Speaker 1 (22:48):
Some AI that's a black box.
Speaker 4 (22:50):
I can't know what it does or why it does
it to control my money and take actions on my
behalf that involve my finances as far as I'm concerned,
completely insane, and there is no chance I would do that.
Speaker 1 (23:00):
Kind of like asking Brian how many times he's taking
a client's money and put it in the stock market
and implied that there's no way you could lose money
and then the stock market goes down eight percent. Is
that kind of what you're talking about.
Speaker 4 (23:13):
Well, I don't know if i'd put Brian on the
spot like that, but yeah.
Speaker 1 (23:17):
Be right back.
Speaker 2 (23:17):
I got to cancel a lot of calls here.
Speaker 4 (23:21):
I'm not saying there may not come a time in
the future. I mean where I might trust something like this,
although I'm super skeptical and again, spent twenty five years
writing software right now, not AI software, but writing software,
and in many cases, despite extensive testing, there were still
things that didn't work quite right, just miss something over here,
or someone used the software in a way I did
(23:43):
not anticipate, and thus it didn't do what I expected
and something bad happened. So the idea that I'm going
to have a black box where I can't really know
how it works and it has known faults, right, So
from this article it came from market Watch. I encourage
people they should go read this for themselves if they're
thinking this is a good idea. They do a really
good job of touching on many of the problems I
(24:04):
would see with something like this. But I just want
to read this idea. The tendency for AI to makes
seemingly confident but potentially wrong assumptions is getting worse. And
this is the idea of hallucination or confabulation, that they
just make things up. Recent analysis by The New York
Times reveals a troubling paradox. The most advanced AI systems
are becoming more convincing, yet are still more prone to hallucination.
(24:24):
Open AI's newest quote reasoning models unquote invent facts fifty
one to seventy nine percent of the time, compared with
forty four percent for older version, while Google engineers report
the reducing hallucination is now the quote fundamental blocker unquote
to wider AI deployment. So when you know this going
into it, and you know that often it will not
(24:45):
only hallucinate, this is all well documented. Guys will not
only hallucinate, but then work hard to convince you what
it's telling you, which is patently false, is correct. As
a problem not to mention the privacy issues of this,
the issues with these things being hacked. The idea that
you know, if a hacker could somehow get into your account,
whether they hack the back end of the agentic AI
(25:06):
or they just take over your account, that suddenly you
could have an avalanche of spending. You know, are these
things really making the best decisions on your behalf or
is there a bias in the models where they're actually
picking more expensive things rather than buying the thing.
Speaker 2 (25:18):
That would be the best fit for you.
Speaker 4 (25:20):
Hard to say, those are all risks. And again, guys,
I'm just telling you now. Everyone that knows me knows
I'm the ten foil hat guy. I'm always the doom
guy because I know how this stuff works. To a
large extent, I've been doing this for a long time. Again,
at some point in the future, would there become a
time where I might trust something like this. Maybe, but
we are still barely in the infancy of this, and
(25:43):
I there is absolutely zero chance I would let any
sort of AI agent act on my behalf with anything financial.
Speaker 3 (25:50):
So first thing I want to say is I do
use AI. I use chat, GPT, we use copilots sometimes.
It really is a wonderful tool for like Google on steroids,
when trying to put a puzzle together for some or
answer questions about how some works or whatever. It is
a fantastic tool for that. However, can you imagine choosing
a surgeon or some kind of medical advisor whose stated
(26:10):
goal in the short term is to reduce the hallucinations.
It really seems like not the greatest idea, but I
want to take this in a slightly different direction. So Dave,
you've expressed your concerns from the technological standpoint, and that
makes it a lot of sense.
Speaker 2 (26:21):
We appreciate you're on this side with us to help
us understand that. Part.
Speaker 3 (26:25):
My brain goes to the regulatory stuff, so I am
not permitted to send out an email to all of
my clients without it being having it being reviewed by
you know a lot of compliance departments and legal people
who help us protect ourselves and our clients and so forth.
You know, there are good processes in place for that.
I have to get I have to take continuing education
(26:46):
to keep up on my Certified Financial Planner degree and
all these other things. Some people are licensed, and there's
lots of requirements there who at some point one regulatory body,
and there are many of them. The sec or fin
or whoever is going to have to say, hey, wait
a minute, these roos are providing advice and people are
apparently listening to it. We probably got to have eyeballs
on that. And then they're going to look under the
hood to figure out what is the motivation. So I'm
(27:07):
looking at this part of this article that refers to
sponsored results, meaning what stops somebody from throwing you know,
a language model out there that will gear somebody towards
certain products. That's illegal for a fiduciary advisor to do.
But what stops a computer? You know, the regulators are
going to have to step in on this. Have you
heard anything on the regulatory side of that kind.
Speaker 4 (27:27):
Of thing, not specifically, but I'll answer that at a second.
You brought up a really good point. You know, I
use this stuff myself. I prefer Rock in general, you know,
copilots built into the Microsoft platform. And I would tell
folks from a chatout perspective again, forget these automated agents.
You know, if you understand the risks of your data
(27:48):
being exposed to the model to someone else, of getting
you know, false answers and things like that, they can
be like Rocket tool for you.
Speaker 1 (27:55):
I from a productivity.
Speaker 4 (27:56):
Standpoint, So I'm not suggesting to people there's no value
in this they should avoid AI in general. In fact,
I encourage everyone check it out for themselves. You'll have
a better understanding of where this stuff is at. But
this identic AI again, this black box thing that's going
to act on your behalf. And then to your point, Brian,
about the fiduciary aenngle of this, Yeah, I mean, this
whole agentic thing is still new. I've not heard any
(28:18):
sort of rumblings about the fiduciary aspect and regulation around
the financial interface of this. I mean, for the most part,
all this stuff is still the wild wild West. You know,
we're kind of in a race with other adversarial nations
like China to try to be first on some of
this stuff so that it doesn't become a strategic advantage
and potentially a military advantage. But you know, there's really
(28:39):
almost no regulation around any of this. And I think
you make a really good point. The whole idea in
that article they call it sponsored results risk. Yeah. Again,
these things are a black box. And even if you
didn't have algorithmic bias in the agent, there might be
bias in the training data or someone behind the scenes,
because it would be very difficult to figure out. I mean,
that's one of the risks they point out, and I
(29:01):
think legitimate one and another reason why I would never
use anything like this in the near future.
Speaker 1 (29:05):
As always from our tech expert Dave Hatter, Thanks as
always for joining us. You're listening to Simply Money presented
by Allworth Financial on fifty five KRC the talk station.
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. Do you have
(29:25):
a financial question you'd like for us to answer? There
is a big red button you can click while you're
listening to the show right on the iHeart app. Simply
record your question and it will come straight to us.
All right. David in Columbia Tusculum leads us off Brian.
He asks, how do I avoid being pushed into hire
Medicare premiums because of my RMD distributions?
Speaker 3 (29:48):
So, David apparently is run into that time of life
where the financial questions are no longer so simple. I
always tell my younger clients, Hey, you know, when you're
twenty and thirty years old, you're just trying not to
make a mess. Be aggressive with your investments, don't panic
when the market wobbles, and don't make a mess of
your credit. Do that for thirty years and you'll be fine.
Then you run into questions like what David has, where
obviously there's enough money that's coming out where his rmds
(30:10):
might be pushing him into a situation where the Medicare
organization says, hey, you need to pay a little bit
more for care. So the way this works, there's something
out there called ierma IRMAA and that covers that is
basically a calculation that looks at your Medicare premiums and
it will look for if you're married, income a two
hundred and six thousand dollars and half of that one
hundred and three thousand. If you're single, you go above
(30:31):
that income wise, and your rmds, I'm sorry, your Medicare
premiums are going to start to rise a little bit.
So required minimum distributions are a whole other concept. They
this is what happens if you have a pre tax
IRA or four oh one K, and then the IRS
eventually is going to force you to start taking money
out of that. And IRS doesn't care what you do
with it. They're simply saying you have to remove it
(30:51):
from the tax shelter, and then some percentage of that
total amount is going to be taxed. It's in the
ballpark of four percent maybe of your prior year end IRA.
In other words, I you've got a million dollar IRA, then yes,
you have forty thousand dollars worth of taxable income that
can push those IRMA Medicare premiums up.
Speaker 2 (31:08):
What am I gonna do about it?
Speaker 3 (31:09):
This is where roth conversions in your sixties, right that
window between when you have really low income. I've retired,
maybe I'm living off savings best case scenario, or maybe
it's only Social Security. Therefore I'm in the lowest bracket
I've seen in forever. Do some ROTH conversions use up
some of those low brackets. You'll lower your future rmds.
You can also do qualified charitable distributions. This is a
This is your RMD your requirement of distribution going straight
(31:31):
to a charity, but it keeps it out of your
modified adjusted gross income. To help you avoid that, and
then figure out how to do your withdrawals tax efficiently.
Coordinate your taxable and your ROTH accounts first to smooth
over that income. All right, long underd answer there, but
let's move on to Elaine and Madeira.
Speaker 1 (31:45):
Bob's I feel like David just got a full blown
retirement seminar in about three minutes. But sentiment, all right,
come all right, Elaine and Madeira, and I'll take this one.
Was she says, with so many options right now, ET BUFFERDTSS,
direct investing, how do I or direct indexing? How do
I pick the best core investment strategy for a three
(32:08):
million dollar portfolio? Well, you bring up a lot of
good stuff here, Elaine. You know involving taxes, you know
with direct indexing, BUFFERDTS has to do with managing investment volatility.
We need to know how much of that money is
in qualified accounts iras four oh one ks versus taxable accounts.
There's a lot to balance here. And I don't want
(32:30):
to make this sound overwhelming, but you know you need
to sit down and develop your risk tolerance, your cash
flow needs, and then have that result in an investment
strategy that dovetails with a good, solid, tax efficient income
distribution strategy. And that's where sitting down with a good
fiduciary advisor that could walk you through all that might
(32:53):
be of help here. That'd be my recommendation. If this
is something you don't feel like you want to take
on yourself, get get some help. Partner with a good
fiduciary advisor. All right, Tom and Anderson Township asks, are
actively managed funds ever worth it if I already own
the indexes and I'm in a higher tax bracket.
Speaker 2 (33:15):
Yeah, So this is this is a pretty common question.
Speaker 1 (33:17):
You know.
Speaker 3 (33:18):
What we're talking about active versus passive. Active means there's
a person or a group of persons sitting on top
of a pile of money saying we like this investment,
we want we don't like this investment, We're going to
buy this and sell that, versus a passive investment which
simply follows an index. So an index such as the
S and P five hundred, which is nothing more than
the five hundred largest companies in the United States. So
I would say, yeah, there are times where active management
(33:40):
is worth it, but I don't view that in terms
of beating the market quote unquote. Where where we have
at times employed active management is in when we have
kind of unique situations and we want human brains versus
a blind indexes. So, for example, we have we've have
a generation and a half of people who have really
never seen interest rates doing what they're doing. Over the
past three years. Prior to that, interest rates went down
(34:01):
and sat on the floor forever. Now, all of a sudden,
we're in a different situation. We've got fiscal policy and
monetary policy moving in directions we haven't ever had before.
Speaker 2 (34:09):
A lot of politicization of things.
Speaker 3 (34:10):
I want active management sitting on top of some of
these bonds to basically protect from some risk as opposed
to just sitting on an index.
Speaker 2 (34:18):
That's how I currently feel.
Speaker 3 (34:19):
I'm happy with that, but I think that's a place,
you know, again, for very unique situations, for a corner
of the portfolio. I don't need a human brain to
tell me it's a good idea to own the S
and P five hundred though. All right, we got time
for one more, So we're gonna throw it to Ken
and Mason. Ken's wondering how far out he needs to
think when it comes to tax planning. Is tax planning
just a this year thing? Or do I need to
think out into the future?
Speaker 1 (34:38):
Bob, Yeah, I think you need to go out you know, one, five,
ten years, even twenty or thirty years. And here's what
I mean by that. We're talking about what is that
RMD situation going to look like going out longer term?
And this is where the more proactive you can get
with your actual financial and cash flow plan and tax planning,
(35:00):
the better off you're gonna be. So definitely sit down
and map out some strategies and model it out. If
I do this, how does it look one year, five year,
ten years, fifteen years from now? And that typically results
in some pretty good planning. All right? Are folks choosing
love over money or money over love? For a growing
(35:21):
number of Americans, they're trying to juggle both and it
gets very complicated. We'll explain what we mean next. You're
listening to Simply Money presented by all Worth Financial fifty
five KRZ the talk station. You're listening to Simply Money
presented by all Worth Financial Onbob Sponseller along with Brian James.
(35:43):
There are a zillion studies out there that show that
money is a major stressor in relationships. We see it
every day, but for some Brian, money ends up being
the glue that holds marriages or relationships together. There's a
new survey out you know from Chime and Talker research. You,
(36:04):
being this sharp gen X gentleman that you probably live
on chime every day, talk about this study. Tell us
what we're talking about here?
Speaker 3 (36:14):
I don't know what chime is, but thank you for
the stereotype there, Bob, My goodness.
Speaker 2 (36:19):
Anyway, So, yeah, new survey here.
Speaker 3 (36:21):
This basically is one in five Americans say they're staying
in a romantic relationship because of financial reasons. And this
there's always loaded guns to this, right. This is never
as simple as it sounds. So this is we're talking
about shared bank accounts, a mortgage with two names on it.
You know, the cost of splitting up, generally is keeping
people together, whether the romance is there or not. Now
I'm dealing with a situation in this case right now,
(36:43):
and the sometimes it's the headline is it's the finances
keeping together.
Speaker 2 (36:48):
But I'm gonna get serious here for a second. It's
really the kids.
Speaker 3 (36:51):
Because you know, if you're you're trying to make it
in today's world, life is expensive, and the kids cost
what they cost. And all of a sudden, now we
have to split up the same amount of in come.
Because people don't change their jobs over this usually because
you kind of can't. But now all of a sudden
that you have to figure out how these two incomes
are going to support two households in which the same
group of kids is going to live, and it is
extremely hard.
Speaker 2 (37:10):
This is not just struggling young adults. This happens at.
Speaker 3 (37:13):
Every stage, right people with the relationship falls apart. Toward
the end, it can get even scarier because then there's
real assets, very complex portfolios out there.
Speaker 2 (37:21):
So there's a lot.
Speaker 3 (37:23):
Of things that are that can come out, real estate investments,
estate plans, all of this stuff.
Speaker 2 (37:27):
It all has to kind of work together over time.
Speaker 3 (37:30):
Money can hide these problems, either if there are too
much if there's you know, I don't know if there's
any sex of things. Too much money, but the plenty
of assets to rely on can mask the fact that
the that there are holes underneath the surface that we
can't see. So if you've kind of combined your finances
but you have two different, very different financial lifestyles, that's
gonna go that's gonna surface eventually and be a real problem.
Speaker 2 (37:52):
I'm sure you've seen this too, Bob.
Speaker 1 (37:53):
Yeah, I'm dealing with a situation right now where this
couple has pretty much been separated for seventy eight eight
years and they're just now getting around to actually finalizing
a divorce, and it's everything you just talked about. You know,
they want to keep the kids stable. There's affordability issues
with keeping the house, a lot of things that where
(38:14):
money issues have just caused this relationship not to end. Uh,
probably when it should have. And that comes by I
guess this comes back to the major point. You know,
aligning your values you know when it comes to money
is a key part of your marriage. And the sooner
you can do that, the better. Here's the all Worth
advice is, if money is keeping you together, make sure
(38:36):
it's also bringing you closer. Thanks for listening. You've been
listening to Simply Money, presented by all Worth Financial on
fifty five KR see the talk station
Tonight some of the money myths we tell ourselves that
could sink a financial future. If you're listening to Simply
Money presented by all Worth Financial, I'm Bob Sponseller along
with Brian James. Well, we human beings. Brian, we are
really good at rationalizing our own behavior, especially when it
comes to money. We just mentally smooth things over and
(00:27):
what we say, it'll all be fine, and before you
know it, you've built your entire retirement plan on a myth.
Tonight we're gonna call out some of those most common
money myths that we run into all the time. Let's
get into it.
Speaker 2 (00:41):
Bob, I love what I do.
Speaker 3 (00:42):
I love doing this radio show with you, and I'm
gonna do it till I'm one hundred and fifty.
Speaker 2 (00:46):
How does that sound? That's one of our miss I'm
gonna work forever.
Speaker 1 (00:49):
I'm in. I got bad I got bad news for you.
I think I'm gonna retire at age one. We're gonna
have to do this for two years by yourself. But
last two years are gonna be rough.
Speaker 3 (00:58):
Yeah, but yeah, So maybe you do want to keep working, right,
Maybe you do love what you do, and that's fantastic,
That's the dream, by the way, right, enjoying what you
do and not dreading having to go to that place
to go do it every day.
Speaker 2 (01:09):
That is what we all should be able to be
exposed to. But here's the reality.
Speaker 3 (01:12):
Lots of people don't get to decide when that career ends.
Health issues intervene either you or a loved one. Maybe
it's a spouse, maybe it's your parents. You just can't
squeeze it all in, so you have to make different decisions. Obviously,
we can get layoffs, corporate downsizing, caring for spouses, parents,
all that stuff just comes out of nowhere and hit suddenly,
and suddenly I want to work forever becomes I need
to get out of here so I can take care
(01:33):
of these other things.
Speaker 2 (01:34):
I wasn't planning on. Statistics back this up, too, Bob.
Speaker 3 (01:37):
So the Employee Benefit Research Institute, which we rely on
all the time for research like this, said they say
about forty percent of retirees leave the workforce earlier than
they planned, meaning that only sixty percent of people get
to call their shot. The other forty are informed by
something else that they have to make a change, and
this is usually because of health or a job loss.
That's almost half of people out there who are thinking
(01:58):
they get to call their shots in it doesn't work
out that way. Planning to work forever isn't a plan,
it's a wish. You may not get to act on it.
So don't assume that your career is your insurance policy.
Your portfolio and your financial plan are going to have
to carry the weight because you may not be employed
as long as you think you will.
Speaker 1 (02:14):
Yeah, I have to ad miss admit that forty percent
numbers seemed high to me and it surprised me so,
but it's always good to have research. And yeah, roughly
half the people don't get to call their own shot.
It's good to call that out. All right, let's move
into myth number two, and Brian, this is one of
my favorites. I'll quote unquote downsize my house and pocket
(02:34):
the difference. People assume that selling the big house in
the suburbs and moving to a quote unquote smaller place
will unlock a windfall. Brian, I don't know about you.
Every single person I've ever worked with that has come
in and talked about doing this, invariably, very few, if any,
end up spending less money. The square footage of the
(02:57):
house might be smaller, but people don't sell their current
home and buy a thirty or forty year home. The
year old home, even if it's quote unquote smaller, it's newer,
and they want to refurbish it and get new furnishings
and blinds and drapes, and before you know it, people
have spent not less, but sometimes more than they were
(03:20):
spending on their quote unquote big house. Do you find
the same thing happening?
Speaker 2 (03:24):
Oh, every time.
Speaker 3 (03:25):
So people who say people who come in with that
myth are there, I always know they're not that close
to pulling the trigger on this because obviously they haven't
at all done any research on what the right piece
of real estate might be, because they will learn in
that first fifteen minutes of searching for houses or condos
or whatever they're looking for, they'll learn that it just
doesn't work that way. You're gonna you're not gonna want
to downsize the lifestyle, right, You're gonna want maybe a
(03:48):
smaller place, but you're gonna want a cooler neighborhood, closer
to amenities, things like that, or you know, just maybe
an upgraded facility to live in. All that stuff costs money.
You're not gonna save a nickelon doesn't mean don't do it,
but don't bank on pulling up a couple hundred thousand
dollars out of your housing situation.
Speaker 1 (04:02):
So here's what. Yeah, I just say take your time
here and don't make an emotional decision because the meetings
that make me very nervous are when it's say, well, Bob,
we got to update you on what we did, we
did this, we're doing this, and they haven't run the numbers.
They just assume it's all gonna work out. But again,
not to belabor that point too much, get us send
(04:23):
a myth number three.
Speaker 3 (04:25):
So myth number three is that if I need long
term care, that's not a problem because Medicare, the government
will come along and save me. Well, the reality is,
and this does get a little confusing, Medicare will cover
about thirty days of a long term care situation, but
not because it's long term care. They just classify that
as short term rehab. So this is we're not talking
about years of assisted living, memory care, those kinds of things.
That's for you know, if that's where you're gonna need
(04:46):
insurance or you're gonna need to be able.
Speaker 2 (04:47):
To cover it out of your own portfolio. That's so
this is a very very.
Speaker 3 (04:51):
Dangerous myth for people to believe in. You should run
your financial plan and know what those expenses.
Speaker 1 (04:55):
Will look like.
Speaker 3 (04:55):
Model that out and make sure you can cover it.
Long term care insurance may or may not be some
you need to do. Don't instantly go there, but you
need to understand the math behind it. So a strong
retirement plan doesn't ignore long term care. It takes it
head on, look at it, model it out, make sure
you've got a way to cover it before it's too late.
Speaker 1 (05:13):
Yeah. Myth number four, and this is a fun one
to talk about. You know the quote unquote, well, I
really don't spend that much on travel. In reality, travel
is one of the biggest retirement line items, especially for
wealthier families, and there's nothing wrong with that. It's great
to travel, but you got to plan for it. And
the problem is pretending that that number is going to
(05:34):
actually be smaller than it really is, because if you
underbudget for it or don't budget for it at all,
you might run into a problem later on or guilt
yourself into cutting back on the thing you most love
to do. Brian, I run into It's usually one of
two extremes. Extreme number one is we almost have to
talk people into doing some traveling and having a little
(05:56):
fun because they're afraid of spending any money. And these
are folks that are just warehousing a big pile of
growing assets that they're not having any fun with. Then
you got the other extreme, where you know, they don't
even plan for travel. And then again, just like the
house downsizing thing, the topic comes up in the annual
review meetings and they're just throwing out, well, I gotta
(06:17):
I got a cruise to you know, wherever, I got
a trip to Australia, and you start adding up the
numbers and it's huge, and they never even put this
into their retirement budget and we got to kind of
walk them off the ledge on that extreme is that
is that similar to what you find, oh, one hundred percent, Bob.
Speaker 3 (06:34):
And then that's mostly when when we sit down people
and build financial plans.
Speaker 2 (06:37):
If they listen to this show, if they're aware that
we exist, and they.
Speaker 3 (06:40):
Are already people who have been seeking out financial education
information for a long time and they've probably got themselves.
Speaker 2 (06:46):
It's much more about efficiency than it is success. Or failure.
But that tends to me that it tends to me.
Speaker 3 (06:50):
They get themselves bald up over I don't, I don't,
I don't want to spend I can't spend this money.
Speaker 2 (06:54):
It's it's for it's for raindy day, for rainy day.
Speaker 3 (06:56):
Well that rainy day never comes, and they they wind
up squeezing a lot of years out that could have
been a lot more enjoyable they had they had a
clear picture of their financial plan. So but yeah, if
you want to travel, do it.
Speaker 2 (07:06):
That's your thing. Do it, budget for it, put it
in your plan and do it.
Speaker 1 (07:10):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponseller along with Brian James. All Right, the
next myth the kids will take care of me? We
talk about, you know, so many of these older baby
boomer family they're spending money on their kids, helping to
fund some of these things that cost a lot of
(07:31):
money for young adult kids. And then in the next
breath they come and say, well, our kids are going
to take care of us if we run out of money.
Let's face it. We love our kids, but relying on
them financially is risky. Life is expensive. For them too.
You know, a lot of them have student loans, trying
to get a down payment for a house, raising their
own kids, and even in wealthy families, the expectation the
(07:55):
kids will foot the bill for mom and dad. That
is just outdated and can be dangerous.
Speaker 3 (08:01):
Yeah, I definitely wouldn't want to rely on this, and
just for the fact that I think the bigger part
of this is life is just going to be a
lot more expensive for my kids than it was for me.
It was more expensive for me than my parents, and
that's just kind of the way things roll, and that
seems to be accelerating.
Speaker 2 (08:13):
I don't want to burden them.
Speaker 3 (08:14):
I don't want to put them in a position where
not only do they have to deal with a reality that.
Speaker 2 (08:18):
I never did, they got to worry about me. That's
not fair to them.
Speaker 3 (08:21):
So, speaking of generational financial issues, the assumption that I'll
get an inherent inheritance, this can be dangerous because you don't.
Speaker 2 (08:29):
Know when that's going to come.
Speaker 3 (08:30):
A lot of people will come in and as part
of the plan, they'll say, well, I'm going to get
a few million dollars for mom or dad. Well, okay,
how old are mom and dad? Oh, they're in their
seventies and they're doing pretty good.
Speaker 2 (08:37):
That's great.
Speaker 3 (08:38):
That could be thirty years from now that this money
is coming, at which point you yourself will be in
your early seventies. So we can't plan on that. If
you're sixty and your parents are eighty five and healthy,
that's gonna be another fifteen twenty years down the road,
and you don't know how much is going to be left.
They might spend more than you think. It's their money,
not yours. Maybe they need long term care, which means
it now belongs to a medical facility. They may choose
(08:59):
to leave part of it to charity. Those plans can change.
So just treat an inheritance as a bonus, but don't
count on it. It's a gift, but that should never
ever be the plan.
Speaker 1 (09:09):
All right. Another myth that we need to dive into
is the quote unquote, I will spend less in retirement.
In reality, Brian, in the first ten to fifteen years
of retirement, many retirees actually spend more because they finally
have time to travel, get into some of their hobbies,
do some home remodeling, and then, like we talked about
(09:29):
helping kids and grandkids, all that stuff adds up. Let's
face it, when people have disposable time, they tend to
find ways to spend money as part of using that time.
And you got a plan for that. Yeah.
Speaker 3 (09:42):
So this is where I always have conversations with people
that when when a lot of times we have when
I have a new client come in, they'll come in
and they'll say, all right, we've got a budget, we're
gonna we're gonna build a vegetable garden, we're gonna eat
out of that, and we're never gonna leave the house.
And my response to that is always that that sounds
like an absolutely miserable retirement.
Speaker 2 (09:56):
Let's go the other direction.
Speaker 3 (09:58):
Let's I mean, nothing wrong with vegetable garden, but let's
not count on that for the next thirty forty years
of our lives.
Speaker 2 (10:02):
Retirement is a long time.
Speaker 3 (10:04):
Let's not start it by forcing ourselves into some kind
of budget they may or may not even be necessary
before we've put.
Speaker 2 (10:10):
Together a financial plan. I like to go the other way.
Speaker 3 (10:13):
Since we're just throwing spaghetti at the wall, Let's build
a financial plan that includes absolutely everything you considered doing.
You may not actually do. It doesn't matter. We're throwing
fake expenses together. So let's just see if it works.
If you can pull it off, great, maybe you'll be
pleasantly surprised. If you can't pull it off, well, you
weren't really sold on it to begin with, so then
it becomes more comfortable to go ahead and pair things
(10:33):
down that you weren't all that convicted on to begin with,
rather than let's spend nothing and assume we'll be happy
and two three years later we'll spend money wildly because
we kind of made ourselves miserable in the first early
years and then convinced ourselves that we deserve some things.
Think through. It's okay to want to spend what you've
built for yourself. You are allowed, all right.
Speaker 1 (10:52):
In the final myth we want to touch on tonight.
You know folks that say retirement means I'll finally relax ah.
In reality, many think they'll stop worrying about money or
anything else once they retire. In reality, without a clear
plan not only for income and spending, but just your
overall purpose in life how to spend your time and energy,
(11:13):
retirement actually increases stress for people if they don't have
a plan and haven't thought through things. This is a
critical thing because, let's face it, after people have worked
thirty five, forty fifty years, I mean they do. I
hate to use the word deserve, but we want people
to be able to enjoy their retirement years. But it
(11:35):
requires doing a little planning and maybe taught, getting some
objective advice from a good fiduciary advisor so that folks
can actually relax and take those trips and not focus
on what the stock market's doing every day.
Speaker 2 (11:49):
Yeah.
Speaker 3 (11:49):
I think this is a really important one because this
is what I find myself paying attention to the most.
I always told myself that along the way of my
thirty forty year career, I was going to pay attention to.
The happiest people are the ones who really had a
clear financial plan and also a plan to know what
they were gonna do, how they're gonna spend the time.
The most stressed out ones that seem to be disappointed
in retirement didn't have a.
Speaker 2 (12:10):
Plan not only for finances, but.
Speaker 3 (12:12):
For all of that huge expansive time that they have.
Speaker 1 (12:16):
Here's the allworth advice. The stories we tell ourselves can
derail even a great nest egg of assets. Swap the
myths for math in a clearly constructed plan and your
future will thank you. Are we in an AI bubble?
Why investors aren't panicking yet? Just yet? Plus the first
(12:37):
luxury crew setting sale across the Great Lakes, and we
answer a big money question before the week's over. You're
listening to Simply Money presented by Allworth Financial on fifty
five KRC the talk station. You're listening to Simply Money
presented by Allworth Financial on Bob Sponseller along with Brian
(12:59):
James from Madeira to Mason. You've got questions, We've got answers.
Don't miss tonight's Ask the Advisor segment coming up at
six forty three. It's a question many in the financial
world are asking at this point. Are we in the
middle of an AI bubble? Well, according to recent data
from Google Trends, I have to laugh, the speculation might
(13:23):
have peaked. Brian walked through some of the data that
Google is tracking, because after all, Google knows everything about
everything that we do, and that can be a scary proposition.
Speaker 2 (13:34):
Yeah.
Speaker 3 (13:34):
So, Google Trends is a part of the Alphabet owned
Google metroplex where they just basically say here's what's in
people's brains that's coming out through their keyboards, just basically,
and if.
Speaker 1 (13:44):
You don't have the right thing, and if you don't
have the right things in your brains, we will insert
it into your brain for you. But there you go.
Speaker 2 (13:51):
That's exactly right.
Speaker 1 (13:52):
Yeah.
Speaker 2 (13:52):
So anyway, so what they were looking for.
Speaker 3 (13:55):
The number of web searches for the term AI bubble
has plummeted over the past month. This this is a
reaction to what we've been talking about AI for it
feels like a couple of years now, and it came
out of nowhere in terms of being a topic of
daily discussion. But then all of a sudden, everybody's quickly
gotten up to speed on how it can help them.
So of course that makes it an investment opportunity, so
let's pay attention to it. But it seems to be
(14:16):
the interest in the topic seems to be backing off
a little bit.
Speaker 2 (14:20):
Search traffic for the phrase AI bubble peaked.
Speaker 3 (14:23):
On August twenty first, and this was right after a
report from MIT some smart brains out in Massachusetts appeared
to suggest that they that hardly any organizations were truly
seeing a return on investment for whatever they're doing in AI.
And at the same time, open AI CEO Sam Altman,
He's the guy behind chat GPT, But he suggested that
investors might be getting a little too excited about this
(14:43):
to begin with. Although acknowledging you know, this technology is
going to have a transformational impact, he thinks that we
might have run a little too far in terms of
our assumption that things are going to just kick off
and everything's gonna be wonderful from here forward.
Speaker 1 (14:56):
Well, Brian, I think stories like this I pretty much
dismiss them entirely. You tell me if I'm flawed here,
because you know, all searches on the internet and all
that that has nothing to do whatsoever about the underlying
fundamentals of these companies. And I think it's safe to
say that AI is here to stay. It's ubiquitous, it's growing,
(15:18):
it's going to change the way we live and do business,
and all that's a good thing. The key watch out
here is you just got to be careful on where
you place your money and don't be afraid of AI
on the one on the one hand, But don't get
all your eggs in one basket either and just pile
into everything at the top. Uh, stay diversified. Ignore some
(15:41):
of this noise out here and just stay with a
good fundamental discipline investment strategy.
Speaker 2 (15:48):
Yeah, so this is I agree with you.
Speaker 3 (15:50):
But at the same time, there, I think there's room
for data in here, just just to figure out what
are people doing. I do like the idea that the
Google trend's ability of knowing what people are thinking about
that does help, I think with decision making for companies
and so forth.
Speaker 2 (16:04):
So I think there's some useful tools in here.
Speaker 1 (16:06):
Well. The smartest thing I saw from this report and
I believe this, and we saw this, you know, when
the Internet bubble happened, you know, and this theory and
this report states that new technology is adopted in stages
innovation stage, inflated expectation stage, disillusionment stage, I even as
det going down, I don't know, seventy percent enlightenment and
(16:30):
then finally new productivity. That's kind of the way things work,
and it'll work this time with AI two. Am I
wrong there, Brian, No.
Speaker 3 (16:40):
Everything that happens, all these kind of tools, these become
a catalyst for investment, right, It's an opportunity for companies
to make things more efficient. I think the assumption when
we first started talking about artificial intelligence. We thought the
army of robots was going to show up tomorrow to
really literally take jobs away and so forth. And I
do think that's going to happen in certain corners of
the economy, because there are things AI can do simply
(17:02):
better than a human being and with less risk and
so forth.
Speaker 2 (17:06):
But for the most part, I think it's.
Speaker 3 (17:07):
Going to simply complement what a human being can do
and make us more productive. I can speak directly to
my own daily routine. I do use a chat GPT,
and I use because it's a much better way to
put together chunks of information from different places to help
save me time to come to a conclusion without having
to go back and do a doctoral research paper on
some obscure financial planning topic. It does connect points A
(17:31):
and point B a lot more quickly, but it doesn't
remove me from the need to deliver advice to another
human being who wants to look somebody in the eye
and hear that it's going to be okay.
Speaker 2 (17:40):
Because of these seven reasons, AI is.
Speaker 3 (17:42):
Never going to do that any more than any other
computer based financial planning tools or no load index funds
or all the other things that we're going to end
my career over the past thirty years.
Speaker 1 (17:50):
All right, switching gears here. If you're decigning what to
do from a travel planning standpoint next year, this could
be a cool trip, a cruise around the Great Lakes, Brian,
I have I have virtually no interest in spending my
hard earned money getting into a boat and sailing to Cleveland, Ohio.
But please fill us in on this exciting new travel
(18:13):
opportunity that's coming in May of twenty twenty six.
Speaker 3 (18:16):
Well, you need to expand your world then, because there's
more to the Great Lakes than Cleveland, Ohio.
Speaker 2 (18:21):
If you've never been to the Upper Peninsula, then you
gotta go.
Speaker 1 (18:23):
I've been there, I've been to the Michigan It's.
Speaker 2 (18:26):
They're just grumpy.
Speaker 1 (18:27):
Bob.
Speaker 2 (18:27):
Well, this is for the non Bobs out there, for
the non grumpy.
Speaker 3 (18:30):
People who like to see the world. So this is
the cruise Lines Aget. There's three itinerar areas coming. There's
a Great Lakes and Thousand Islands crews that'll go between Syracuse,
New York Cleveland.
Speaker 2 (18:39):
Bob won't.
Speaker 3 (18:39):
Bob won't be on that one because it's got Cleveland
in it. That'll go through Lake Ontario. Lake Erie Excursions
and all these other things, a shipwreck cruise to on
a glass bottom boat and Niagara Falls as well, and
some other ones out there too. There's a there's a
two week long one that runs between Cleveland and Milwaukee.
So basically, these are luxury cruises, right. They're putting you
in a comfortable spot. It's kind of like the idea
(19:01):
of going down to the Caribbean, except with a little
bit different viewpoints. So let's talk money so much of the.
Speaker 1 (19:06):
So you mean I can get on a glass bottom
boat and look at all the debris buried in the
Cuyahoga River. Is that actually an opportunity I can take
advantage of?
Speaker 2 (19:15):
Well, open your mind, Bob. These these are things for fun.
Speaker 1 (19:18):
People maybe talk about Mcina Island, talk about.
Speaker 3 (19:21):
That Mcina Island, Mackinac is a lovely place to be.
So these are a little on the pricey side. That's
where the word luxury comes in. So these cruises start
about eighty six seventy five per person eight thousand, six
seventy five based on double occupancy. So this includes meals, drinks,
and the typical things you would include. But you're gonna
want to budget for it. If we're gonna pull the trigger.
Speaker 1 (19:41):
All right? Should you be using AI to just help
you blindly buy stuff? Our cybersecurity expert is in to
discuss that. Next. 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
(20:03):
lunebopspond Seller along with Brian James, joined today by our
tech and AI and cybersecurity guru, mister Dave Hatter. Dave,
I can't wait to get your thoughts on this topic.
We came across an article recently where these AI tools
now you can tell them, for example, go out and
(20:24):
find me the best pair of jym shoes for under
one hundred dollars. Find the best quality pair of GYM shoes,
find it, buy it, ship it to us, put it
on my visa card. Dave, I'll tell you right now,
there's no way in hell I'm gonna let some computer
do that for me.
Speaker 2 (20:42):
What say you?
Speaker 1 (20:43):
And what could possibly go wrong with this kind of
quote unquote new and exciting technology out there?
Speaker 4 (20:50):
Well, guys, as always, thanks for having me on and
I'm glad you guys came up with this as a
topic to discuss because it touches on a couple of things.
There's this whole sort of new ish field and AI
called agentic AI or a AI AGENTICS. You'll hear people
say it both ways. And this goes beyond things like
chat ept or crock or other chatbot type systems where
(21:15):
you sit down and type in a prompt. The idea
of a gentic AI is it essentially can act like
a human being and take take action on tasks. It
has agency, right, hence the name agentic And this is
sort of all the rage and the business. Now when
you hear people talk about how AI is going to
put people out of work and so forth, and when
(21:36):
they're not talking about super intelligence and artificial general intelligence,
they're generally talking about agentic AI, that these things are
going to be set up in this AI will talk
to that AI and it'll do all of this stuff
and work and we won't need people anymore. Now, will
we get there eventually? Maybe I'm calling bs on it
at the moment. And to answer your question specifically, Bob, No,
(21:57):
there is absolutely not a chance in hell I would
give any sort of AI agent access to my bank
accounts or any financial system and then let it act
on my behalf and I'll tell you why. So, guys,
I spent twenty five years in this business before I
sort of transitioned into cybersecurity. As a software engineer, I
(22:19):
wrote millions of lines of code, built every kind of
thing you could imagine. And how many times do you
think I created a bug in software and there were
unintended consequences? The answer is a lot. I don't know
how many. How many times do you think I did
that on purpose? Well, the answer is never. But I'm
a human being. I make mistakes. And you know, one
of the key problems with AI to date is you
(22:42):
have this idea of hallucinations or confabulations where they just
make things up. So the idea that I'm going to trust.
Speaker 1 (22:48):
Some AI that's a black box.
Speaker 4 (22:50):
I can't know what it does or why it does
it to control my money and take actions on my
behalf that involve my finances as far as I'm concerned,
completely insane, and there is no chance I would do that.
Speaker 1 (23:00):
Kind of like asking Brian how many times he's taking
a client's money and put it in the stock market
and implied that there's no way you could lose money
and then the stock market goes down eight percent. Is
that kind of what you're talking about.
Speaker 4 (23:13):
Well, I don't know if i'd put Brian on the
spot like that, but yeah.
Speaker 1 (23:17):
Be right back.
Speaker 2 (23:17):
I got to cancel a lot of calls here.
Speaker 4 (23:21):
I'm not saying there may not come a time in
the future. I mean where I might trust something like this,
although I'm super skeptical and again, spent twenty five years
writing software right now, not AI software, but writing software,
and in many cases, despite extensive testing, there were still
things that didn't work quite right, just miss something over here,
or someone used the software in a way I did
(23:43):
not anticipate, and thus it didn't do what I expected
and something bad happened. So the idea that I'm going
to have a black box where I can't really know
how it works and it has known faults, right, So
from this article it came from market Watch. I encourage
people they should go read this for themselves if they're
thinking this is a good idea. They do a really
good job of touching on many of the problems I
(24:04):
would see with something like this. But I just want
to read this idea. The tendency for AI to makes
seemingly confident but potentially wrong assumptions is getting worse. And
this is the idea of hallucination or confabulation, that they
just make things up. Recent analysis by The New York
Times reveals a troubling paradox. The most advanced AI systems
are becoming more convincing, yet are still more prone to hallucination.
(24:24):
Open AI's newest quote reasoning models unquote invent facts fifty
one to seventy nine percent of the time, compared with
forty four percent for older version, while Google engineers report
the reducing hallucination is now the quote fundamental blocker unquote
to wider AI deployment. So when you know this going
into it, and you know that often it will not
(24:45):
only hallucinate, this is all well documented. Guys will not
only hallucinate, but then work hard to convince you what
it's telling you, which is patently false, is correct. As
a problem not to mention the privacy issues of this,
the issues with these things being hacked. The idea that
you know, if a hacker could somehow get into your account,
whether they hack the back end of the agentic AI
(25:06):
or they just take over your account, that suddenly you
could have an avalanche of spending. You know, are these
things really making the best decisions on your behalf or
is there a bias in the models where they're actually
picking more expensive things rather than buying the thing.
Speaker 2 (25:18):
That would be the best fit for you.
Speaker 4 (25:20):
Hard to say, those are all risks. And again, guys,
I'm just telling you now. Everyone that knows me knows
I'm the ten foil hat guy. I'm always the doom
guy because I know how this stuff works. To a
large extent, I've been doing this for a long time. Again,
at some point in the future, would there become a
time where I might trust something like this. Maybe, but
we are still barely in the infancy of this, and
(25:43):
I there is absolutely zero chance I would let any
sort of AI agent act on my behalf with anything financial.
Speaker 3 (25:50):
So first thing I want to say is I do
use AI. I use chat, GPT, we use copilots sometimes.
It really is a wonderful tool for like Google on steroids,
when trying to put a puzzle together for some or
answer questions about how some works or whatever. It is
a fantastic tool for that. However, can you imagine choosing
a surgeon or some kind of medical advisor whose stated
(26:10):
goal in the short term is to reduce the hallucinations.
It really seems like not the greatest idea, but I
want to take this in a slightly different direction. So Dave,
you've expressed your concerns from the technological standpoint, and that
makes it a lot of sense.
Speaker 2 (26:21):
We appreciate you're on this side with us to help
us understand that. Part.
Speaker 3 (26:25):
My brain goes to the regulatory stuff, so I am
not permitted to send out an email to all of
my clients without it being having it being reviewed by
you know a lot of compliance departments and legal people
who help us protect ourselves and our clients and so forth.
You know, there are good processes in place for that.
I have to get I have to take continuing education
(26:46):
to keep up on my Certified Financial Planner degree and
all these other things. Some people are licensed, and there's
lots of requirements there who at some point one regulatory body,
and there are many of them. The sec or fin
or whoever is going to have to say, hey, wait
a minute, these roos are providing advice and people are
apparently listening to it. We probably got to have eyeballs
on that. And then they're going to look under the
hood to figure out what is the motivation. So I'm
(27:07):
looking at this part of this article that refers to
sponsored results, meaning what stops somebody from throwing you know,
a language model out there that will gear somebody towards
certain products. That's illegal for a fiduciary advisor to do.
But what stops a computer? You know, the regulators are
going to have to step in on this. Have you
heard anything on the regulatory side of that kind.
Speaker 4 (27:27):
Of thing, not specifically, but I'll answer that at a second.
You brought up a really good point. You know, I
use this stuff myself. I prefer Rock in general, you know,
copilots built into the Microsoft platform. And I would tell
folks from a chatout perspective again, forget these automated agents.
You know, if you understand the risks of your data
(27:48):
being exposed to the model to someone else, of getting
you know, false answers and things like that, they can
be like Rocket tool for you.
Speaker 1 (27:55):
I from a productivity.
Speaker 4 (27:56):
Standpoint, So I'm not suggesting to people there's no value
in this they should avoid AI in general. In fact,
I encourage everyone check it out for themselves. You'll have
a better understanding of where this stuff is at. But
this identic AI again, this black box thing that's going
to act on your behalf. And then to your point, Brian,
about the fiduciary aenngle of this, Yeah, I mean, this
whole agentic thing is still new. I've not heard any
(28:18):
sort of rumblings about the fiduciary aspect and regulation around
the financial interface of this. I mean, for the most part,
all this stuff is still the wild wild West. You know,
we're kind of in a race with other adversarial nations
like China to try to be first on some of
this stuff so that it doesn't become a strategic advantage
and potentially a military advantage. But you know, there's really
(28:39):
almost no regulation around any of this. And I think
you make a really good point. The whole idea in
that article they call it sponsored results risk. Yeah. Again,
these things are a black box. And even if you
didn't have algorithmic bias in the agent, there might be
bias in the training data or someone behind the scenes,
because it would be very difficult to figure out. I mean,
that's one of the risks they point out, and I
(29:01):
think legitimate one and another reason why I would never
use anything like this in the near future.
Speaker 1 (29:05):
As always from our tech expert Dave Hatter, Thanks as
always for joining us. You're listening to Simply Money presented
by Allworth Financial on fifty five KRC the talk station.
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. Do you have
(29:25):
a financial question you'd like for us to answer? There
is a big red button you can click while you're
listening to the show right on the iHeart app. Simply
record your question and it will come straight to us.
All right. David in Columbia Tusculum leads us off Brian.
He asks, how do I avoid being pushed into hire
Medicare premiums because of my RMD distributions?
Speaker 3 (29:48):
So, David apparently is run into that time of life
where the financial questions are no longer so simple. I
always tell my younger clients, Hey, you know, when you're
twenty and thirty years old, you're just trying not to
make a mess. Be aggressive with your investments, don't panic
when the market wobbles, and don't make a mess of
your credit. Do that for thirty years and you'll be fine.
Then you run into questions like what David has, where
obviously there's enough money that's coming out where his rmds
(30:10):
might be pushing him into a situation where the Medicare
organization says, hey, you need to pay a little bit
more for care. So the way this works, there's something
out there called ierma IRMAA and that covers that is
basically a calculation that looks at your Medicare premiums and
it will look for if you're married, income a two
hundred and six thousand dollars and half of that one
hundred and three thousand. If you're single, you go above
(30:31):
that income wise, and your rmds, I'm sorry, your Medicare
premiums are going to start to rise a little bit.
So required minimum distributions are a whole other concept. They
this is what happens if you have a pre tax
IRA or four oh one K, and then the IRS
eventually is going to force you to start taking money
out of that. And IRS doesn't care what you do
with it. They're simply saying you have to remove it
(30:51):
from the tax shelter, and then some percentage of that
total amount is going to be taxed. It's in the
ballpark of four percent maybe of your prior year end IRA.
In other words, I you've got a million dollar IRA, then yes,
you have forty thousand dollars worth of taxable income that
can push those IRMA Medicare premiums up.
Speaker 2 (31:08):
What am I gonna do about it?
Speaker 3 (31:09):
This is where roth conversions in your sixties, right that
window between when you have really low income. I've retired,
maybe I'm living off savings best case scenario, or maybe
it's only Social Security. Therefore I'm in the lowest bracket
I've seen in forever. Do some ROTH conversions use up
some of those low brackets. You'll lower your future rmds.
You can also do qualified charitable distributions. This is a
This is your RMD your requirement of distribution going straight
(31:31):
to a charity, but it keeps it out of your
modified adjusted gross income. To help you avoid that, and
then figure out how to do your withdrawals tax efficiently.
Coordinate your taxable and your ROTH accounts first to smooth
over that income. All right, long underd answer there, but
let's move on to Elaine and Madeira.
Speaker 1 (31:45):
Bob's I feel like David just got a full blown
retirement seminar in about three minutes. But sentiment, all right,
come all right, Elaine and Madeira, and I'll take this one.
Was she says, with so many options right now, ET BUFFERDTSS,
direct investing, how do I or direct indexing? How do
I pick the best core investment strategy for a three
(32:08):
million dollar portfolio? Well, you bring up a lot of
good stuff here, Elaine. You know involving taxes, you know
with direct indexing, BUFFERDTS has to do with managing investment volatility.
We need to know how much of that money is
in qualified accounts iras four oh one ks versus taxable accounts.
There's a lot to balance here. And I don't want
(32:30):
to make this sound overwhelming, but you know you need
to sit down and develop your risk tolerance, your cash
flow needs, and then have that result in an investment
strategy that dovetails with a good, solid, tax efficient income
distribution strategy. And that's where sitting down with a good
fiduciary advisor that could walk you through all that might
(32:53):
be of help here. That'd be my recommendation. If this
is something you don't feel like you want to take
on yourself, get get some help. Partner with a good
fiduciary advisor. All right, Tom and Anderson Township asks, are
actively managed funds ever worth it if I already own
the indexes and I'm in a higher tax bracket.
Speaker 2 (33:15):
Yeah, So this is this is a pretty common question.
Speaker 1 (33:17):
You know.
Speaker 3 (33:18):
What we're talking about active versus passive. Active means there's
a person or a group of persons sitting on top
of a pile of money saying we like this investment,
we want we don't like this investment, We're going to
buy this and sell that, versus a passive investment which
simply follows an index. So an index such as the
S and P five hundred, which is nothing more than
the five hundred largest companies in the United States. So
I would say, yeah, there are times where active management
(33:40):
is worth it, but I don't view that in terms
of beating the market quote unquote. Where where we have
at times employed active management is in when we have
kind of unique situations and we want human brains versus
a blind indexes. So, for example, we have we've have
a generation and a half of people who have really
never seen interest rates doing what they're doing. Over the
past three years. Prior to that, interest rates went down
(34:01):
and sat on the floor forever. Now, all of a sudden,
we're in a different situation. We've got fiscal policy and
monetary policy moving in directions we haven't ever had before.
Speaker 2 (34:09):
A lot of politicization of things.
Speaker 3 (34:10):
I want active management sitting on top of some of
these bonds to basically protect from some risk as opposed
to just sitting on an index.
Speaker 2 (34:18):
That's how I currently feel.
Speaker 3 (34:19):
I'm happy with that, but I think that's a place,
you know, again, for very unique situations, for a corner
of the portfolio. I don't need a human brain to
tell me it's a good idea to own the S
and P five hundred though. All right, we got time
for one more, So we're gonna throw it to Ken
and Mason. Ken's wondering how far out he needs to
think when it comes to tax planning. Is tax planning
just a this year thing? Or do I need to
think out into the future?
Speaker 1 (34:38):
Bob, Yeah, I think you need to go out you know, one, five,
ten years, even twenty or thirty years. And here's what
I mean by that. We're talking about what is that
RMD situation going to look like going out longer term?
And this is where the more proactive you can get
with your actual financial and cash flow plan and tax planning,
(35:00):
the better off you're gonna be. So definitely sit down
and map out some strategies and model it out. If
I do this, how does it look one year, five year,
ten years, fifteen years from now? And that typically results
in some pretty good planning. All right? Are folks choosing
love over money or money over love? For a growing
(35:21):
number of Americans, they're trying to juggle both and it
gets very complicated. We'll explain what we mean next. You're
listening to Simply Money presented by all Worth Financial fifty
five KRZ the talk station. You're listening to Simply Money
presented by all Worth Financial Onbob Sponseller along with Brian James.
(35:43):
There are a zillion studies out there that show that
money is a major stressor in relationships. We see it
every day, but for some Brian, money ends up being
the glue that holds marriages or relationships together. There's a
new survey out you know from Chime and Talker research. You,
(36:04):
being this sharp gen X gentleman that you probably live
on chime every day, talk about this study. Tell us
what we're talking about here?
Speaker 3 (36:14):
I don't know what chime is, but thank you for
the stereotype there, Bob, My goodness.
Speaker 2 (36:19):
Anyway, So, yeah, new survey here.
Speaker 3 (36:21):
This basically is one in five Americans say they're staying
in a romantic relationship because of financial reasons. And this
there's always loaded guns to this, right. This is never
as simple as it sounds. So this is we're talking
about shared bank accounts, a mortgage with two names on it.
You know, the cost of splitting up, generally is keeping
people together, whether the romance is there or not. Now
I'm dealing with a situation in this case right now,
(36:43):
and the sometimes it's the headline is it's the finances
keeping together.
Speaker 2 (36:48):
But I'm gonna get serious here for a second. It's
really the kids.
Speaker 3 (36:51):
Because you know, if you're you're trying to make it
in today's world, life is expensive, and the kids cost
what they cost. And all of a sudden, now we
have to split up the same amount of in come.
Because people don't change their jobs over this usually because
you kind of can't. But now all of a sudden
that you have to figure out how these two incomes
are going to support two households in which the same
group of kids is going to live, and it is
extremely hard.
Speaker 2 (37:10):
This is not just struggling young adults. This happens at.
Speaker 3 (37:13):
Every stage, right people with the relationship falls apart. Toward
the end, it can get even scarier because then there's
real assets, very complex portfolios out there.
Speaker 2 (37:21):
So there's a lot.
Speaker 3 (37:23):
Of things that are that can come out, real estate investments,
estate plans, all of this stuff.
Speaker 2 (37:27):
It all has to kind of work together over time.
Speaker 3 (37:30):
Money can hide these problems, either if there are too
much if there's you know, I don't know if there's
any sex of things. Too much money, but the plenty
of assets to rely on can mask the fact that
the that there are holes underneath the surface that we
can't see. So if you've kind of combined your finances
but you have two different, very different financial lifestyles, that's
gonna go that's gonna surface eventually and be a real problem.
Speaker 2 (37:52):
I'm sure you've seen this too, Bob.
Speaker 1 (37:53):
Yeah, I'm dealing with a situation right now where this
couple has pretty much been separated for seventy eight eight
years and they're just now getting around to actually finalizing
a divorce, and it's everything you just talked about. You know,
they want to keep the kids stable. There's affordability issues
with keeping the house, a lot of things that where
(38:14):
money issues have just caused this relationship not to end. Uh,
probably when it should have. And that comes by I
guess this comes back to the major point. You know,
aligning your values you know when it comes to money
is a key part of your marriage. And the sooner
you can do that, the better. Here's the all Worth
advice is, if money is keeping you together, make sure
(38:36):
it's also bringing you closer. Thanks for listening. You've been
listening to Simply Money, presented by all Worth Financial on
fifty five KR see the talk station
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