October 22, 2025 • 41 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian challenge the myth of the "magic number" in retirement planning. Just because you've hit $2 million or even $5 million doesn’t mean your future is locked in. Plus, hear stories of high-net-worth individuals navigating the pitfalls of poorly structured wealth. Later, they discuss new research showing that early retirement might actually shorten your life, how to use your empty nest phase for a financial makeover, and whether it’s possible to be too diversified. Finally, as always, Bob and Brian take on real listener questions—from restricted stock units to the right time to downsize.
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Episode Transcript
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Speaker 1 (00:00):
The voices. You know what, I'm gonna give you a
piece of my mind.
Speaker 2 (00:03):
It's gross, gross incompetence of October.
Speaker 3 (00:06):
People are scared fifty five krs the talk station.
Speaker 1 (00:17):
Tonight, the retirement mirage. While your quote unquote number might
be a lie. You're listening to simply Money presented by
oh Worth Financial on Bob Sponseller along with Brian James.
You've worked hard, save well, maybe maybe even hit that
magical I don't know, five million dollar number you've had
circled for a decade and now you're there. But here's
(00:40):
the potential curveball. Now that you've quote unquote won the game,
You're not sure the scoreboard actually matters. What are we
talking about here, Brian, Well.
Speaker 4 (00:50):
There's always the myth of the magic number out there.
Speaker 5 (00:53):
There's a lot of people who in a lot of
companies who promote the idea that everybody has a number
out there, and that may that may be true, that
may not be. But I think it's way too easy
to simply say, here's the finished line that I got
to get to and then everything is smooth sailing from here.
Because God tend to thinks he's funny, and life will intervene,
so that moving on or that that magic number may
move on you. So there might be two million, could
(01:14):
be five million, but you have to we have to
account for lifestyle tax obligations for both of those things
to change.
Speaker 4 (01:21):
The complexity of your holdings.
Speaker 5 (01:22):
The more complicated your portfolio is, the more out of
left field type of things you could have happen. For example,
you know, you give me two people with five million dollars,
they could have completely different outcomes depending on where that
money is. Is it pre tax, Bob, is it you know,
like four to oh one k they've just worked a
long time for another company, or is it after tax?
Maybe they sold their own company, inherited something, a combination
of everything, real estate, other business entities, that kind of thing.
(01:45):
All of it changes the calculus on what that magic
number might be and whether it stays that magic number.
Speaker 1 (01:51):
Well, and it all depends on how you choose to
turn those assets into income, because let's face it, at
the end of the day, no matter what your net
worth is and how it's comprised, we all, Brian, need
to take this pile of stuff, as you said, whether
it's real estate, equity, business ownership, investment, we need to create.
We need to turn that into a paycheck to replace
(02:12):
our day job if we really want to retire. And
planning and doing the most tax efficient strategy on converting
all that pile of assets into income is really where
the magic happened. And it requires some planning. It it
requires some proactive planning. All right, another yeah, no, go ahead.
Speaker 4 (02:32):
So let's yeah, So let's talk about taxes here. Let's
kind of break these down.
Speaker 5 (02:35):
What are the different things that could drive different outcomes. Well,
if you let's say you're somebody who has worked for,
you know, a big company for a long time. This
is a Procter and gamble folks around town or maybe Kroger,
those kinds of things. Uh, you know, you might have
five million dollars in your four oh one k. Well,
if that's all pre tax dollars, because for somebody who
has worked in one place that long, that was the
only choice when you first started, pre tax was the
(02:57):
only option you had.
Speaker 4 (02:58):
There was no wroth, you know, there were no other options.
Speaker 5 (03:01):
So that if that's a pre tax number, that might
really only be three and a half million dollars after taxes,
depending on the asset types that are in there. So
what that means is you are set up for significant
required minimum distributions at age seventy three or seventy five,
depending on when you were born.
Speaker 1 (03:16):
That's going to.
Speaker 5 (03:17):
Affect your Social Security tax ability. You're probably going to
be facing something called IERMA in those years because you
will have a significant minimum amount of income. If you
got five million in a pre tax account at age
seventy three, you're looking at probably two hundred and forty
two hundred and fifty thousand dollars worth of distributions that
you have to pay tax on. That's gonna definitely put
you into the second tier of IRMA. And so for example,
(03:37):
that's something you might want to be thinking about. What
can I do about that before I get to that age,
And the answer is pretty much, let's look at roth conversions,
or in the case of some companies Procter and Gamble
being a big one, you can do something called a
net unrealized appreciation transaction, which basically means you pull out
some of that Procter and Gamble shares from your profit
sharing side from the PST side, and you will pay
(04:00):
capital gains tax on them if it's done properly, not
income tax. And you will have removed it from the
four oh one K. So, and that's not limited to
Procter and Gamble. That's just a very prominent example of
a company that has that feature. If you've got company
stock in your four oh one K, you might look
at something called net unrealized appreciation.
Speaker 4 (04:17):
Whether or not you work at Procter and Gamble, for sure, that.
Speaker 1 (04:20):
Can make a huge difference. All right. Another thing that
tends to get overlooked is something we've we've talked about
before on this show, something called sequence of return risk.
And what we mean there is volatility in your portfolio
when that portfolio actually has to start creating monthly or
annual income. Here's what we mean. You know, when you're
(04:40):
accumulating money in your retirement plan and you're just working
and socking money away, you really don't care much about volatility.
All you care about is the average long term return
thing because let's face it, you're not spending any of
that money. So if the market goes down eight, twelve,
fifteen percent, we know, if we're still working and putting
(05:01):
money away, it's always going to recover it. Usually it
always does, and you can kind of put that out
of your mind and just keep piling away and working
and socking money into your plan. Well when you when
it comes time to turn this into a monthly income stream,
Volatility matters a lot, and we've you know, it's just math.
(05:21):
We've run studies depending on what that volatility is.
Speaker 3 (05:25):
Uh.
Speaker 1 (05:25):
Even if your average long term return stays the same,
if you don't manage volatility while you're pulling money out
of a portfolio, that can really deplete your asset base
even though the long term return didn't change at all.
It's counterintuitive, you know, for a lot of people until
you actually see these numbers in action. And that's why
(05:47):
it's important when it comes time to retire, to sit down,
you know, with a good fiduciary advisor and walk through
your income strategy and make sure that you've got some
money out of harm's way to that you're going to
spend the money you're gonna spend then the next say,
one to three years. That gives you some protection against
this what we call sequence of return risk, because it
(06:10):
is a real risk out there. It's just playing old mathematics.
Speaker 5 (06:13):
Yeah, And a good mechanical way to test this is
by doing something we call a stress test, put together
your financial plan, figure out what your spending needs to be.
Fluff it if you want a little bit, just add
a little bit more and build inflation to it over
the years and figure I would also say, figure out
which goals you have, what spending goals you have that
won't exist forever. There's a mortgage in the mix that's
(06:34):
not going to be there. You know, if you're going
to retire at sixty and you have a mortgage for
another few years, that's not going to be there when
you're ninety. Don't bake that into your living expenses. It's
going to make things look unnecessarily negative. But then, so
run your numbers with a standard rate to return an
it's conservative, say five six percent. You should be able
to get more than that out of a decent investment program.
But we're simply projecting conservative projections here. So then once
(06:56):
you've done that, do it again, but take off, say
twenty percent of your financial networth.
Speaker 4 (07:00):
Just make it go poof.
Speaker 5 (07:01):
Lower the numbers by twenty percent, don't change anything else,
and run all the numbers again. That will tell you
if you can handle what some people went through in
twenty twenty one.
Speaker 4 (07:09):
Anybody retired in twenty twenty one. We immediately went over the.
Speaker 5 (07:12):
Cliff in twenty two and most people, if they didn't panic,
have recovered nicely and are okay. People who did panic
and decide that I'm now retired, this is scary. I
have to protect my assets. Well, then they probably changed
permanently the trajectory of their retirement plan. So do that
before illustrate it, before those kinds of things happen.
Speaker 4 (07:29):
Your number may come up that could happen to you.
Speaker 5 (07:31):
There's only so much you can do in moving investments
around to protect from it. We need to be able
to withstand it and maneuver ourselves around the stress of
that happening. So just run those numbers with that happening
and make sure your plan still floats.
Speaker 1 (07:44):
All right. Another factor to consider it, no matter how
big your quote unquote pile of assets is, is just
longevity and potential family obligations. Here's what I mean. And
I see this more and more happening, Brian. I don't
know if you do, but I see this happening a lot.
Many high net worth families are simply becoming multi generational banks.
(08:07):
And you know, I'm sure when they sat down fifteen,
twenty twenty five years ago. They never expected to be
in a situation where they're supporting their adult children, maybe
more or beyond what they had planned. They never expected
to have to support financially their own parents or other relatives.
(08:27):
And once that bank, you know, is shown to become
available and you start dispensing money, you know, human nature
being what it is, the assumptions can be, well, this
support is always going to be permanent, and if that's
really the case, you got to factor that into your plan.
If it's not the case, you got to do some
heavy duty communicating. But you first got to look at
(08:50):
the numbers and say, what can we board to continue
to do if some of this support that we hadn't
planned to be generating continues, and then you know, make
adjustments as needed. Do you see that happening more and
more with your clients, Brian, because I certainly.
Speaker 5 (09:06):
Do, absolutely, And I find myself thinking about all, right,
I know, I've I've got three kids who are that
are just getting to their own level of independence, and
I worry about that all the time. I think about
it a lot more, I think than my parents had
to because it was a little easier to get started
in those days. So but I think I think Bob
would be easiest. We went through some examples. We've got
some examples prepared here of actual client situations, real people,
(09:26):
but fake names, and it's just kind of how they've
navigated things and how they get to where they've gotten to.
Speaker 1 (09:32):
So first off, yeah, run us through one.
Speaker 4 (09:34):
Yeah, So let's take Steve. Steve was sixty seven years old.
Speaker 5 (09:36):
He's got a net worth of six point two million dollars,
most of that having come up come from a having
sold a business about five years ago, and about four
million of that networth is now tied up.
Speaker 4 (09:46):
In real estate.
Speaker 5 (09:47):
He's got a couple rental properties, vacation home, and then
about one point two is in his pre tax for
O one kay million dollars in a taxable broker's account there.
So he basically came in thinking that six million means
set for life and didn't have to worry about it.
Speaker 4 (10:00):
And mathematically, yeah, that's usually you know in the ballpark.
Speaker 5 (10:03):
But the problem is that rental income is not consistent
and it's it's become a bit of a burden to
maintain those properties rights. It's one thing to look at
a piece of paper that says you own a couple
of nice rental properties and here's the rental that they average.
You know, but if it's inconsistent and you're dealing with tenants,
that changes everything because you're the one that has to
pick up the phone. So the point was what brought
(10:25):
him in was the idea that he wants to He
wanted to change his six million dollars worth of assets
around to make it simpler. And so the challenge was
how do we do this and generating the income that
he needs without relying on so much of a business
in the rental real income. He had already ruled out
the idea that, well, I could hire a property manager
to do all this, but then that really kind of
sucks all the return out of owning a real estate
(10:47):
in the first place and makes it kind of just
not that impactful in terms of generating income net income.
And so basically his problem was he had a lot
of net worth but just about no flexibility. So that
retirement number he had identified, a six million dollars set
for life figure didn't really work for him anymore because
of the asset location, because of what he did. So
we helped him basically get through the idea of let's
(11:09):
consider selling these properties, change your mindset from what you
thought was going to be the best way to go,
and then let's just look at things a little bit
differently to give you a less involved quote unquote business
of retirement. And he's been pretty much happy ever since.
And all we did was shine a bright light on
situation you're in. In the situation, you could be in
good stuff.
Speaker 1 (11:27):
All right, we'll run through one more actual example. We'll
call this couple Denise and Mark. They're sixty four and
sixty six. They have a net worth of about five
million dollars. They retired in late twenty twenty one after
strong markets boosted their portfolio, and their advisor said, yeah,
you're totally fine withdrawing two hundred thousand dollars a year.
Your plan will quote unquote work assuming six percent average
(11:51):
returns continue forever. The problem, as we all know, twenty
twenty two was a down year. The stock market was down,
the bond market was down. That five million dollar portfolio
dropped to a little over four million dollars, and they
still pulled the two hundred thousand dollars out. So that's
a real withdrawal of over seven percent of their capital
in a down market, and that just compounds the losses
(12:15):
the the The answer to this is proactively in advance,
have a bit of a bucket strategy where you've got
some assets not subject to market volatility that can supply
your income needs over that one two three year time
frame where you're not subject to all that down downside
(12:36):
sequence of return risk. It makes a huge difference. And
these folks finally got the message and they're living happily
ever after now because they've got some money set aside
in different places for different reasons, and they're taking some
of that short term spence of return risk off the table.
Here's the all Worth advice. Your retirement success isn't about
(12:57):
how much you've saved, It about how that money is
actually put to work to achieve your actual goals. A
lot of people dream of early retirement, but what if
stopping work too soon actually hurts your health and shortens
your life. We've got new research to discuss on that topic. Next,
you're listening to Simply Money, presented by all Worth Financial
(13:20):
on fifty five KARC the talk station. Yes full shutdown
in American history.
Speaker 5 (13:27):
President Trump can deploy National Guard troops to Portland, Oregon.
Speaker 1 (13:30):
Day's news we will send in the national Guide.
Speaker 3 (13:33):
He's on fifty five KRC, the talkstation.
Speaker 6 (13:36):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 1 (13:56):
You're listening to Simply Money by all Worth Financial, our
Bob sponsorer, along with Crime and James. If you can't
listen to Simply Money live every night, subscribe and get
our daily podcasts. Just search Simply Money on the iHeart
app or wherever you find your podcast. Straight Ahead, Eric's
wrestling with a big tax hit on new stock appreciation Unit,
(14:17):
Karen's portfolio just got too complex to manage on our own,
and Joe's wondering if downsizing makes sense Right now real
questions will hopefully provide some smart answers. Straight Ahead at
six forty three, So many Americans, maybe even you, dream
of retiring early. Get out of the rat race. No
(14:38):
more meetings, no more commutes, just absolute freedom. But there's
a new conversation taking place Brian, And it's not about
whether you can retire early based on whether you have
enough money. It's about whether you should because it might
not be as good for you as you think.
Speaker 4 (14:57):
Well, I don't think that's a new conversation.
Speaker 5 (14:58):
That's in a conversation that I have every single day
in my office, and I'm sure you do too through
the planning process. But USA Today picked up on it,
so therefore it's new to them anyway. So so polling
coming from USA today, a sixty percent of Americans say
that their dream is to retire early. But we get
some figures that from the National Bureau of Economic Research
that did a study of people in China, a little
(15:20):
bit of a different mindset over there. But when they
take early retirement over there, through this new pension program
they have, they see about a thirteen percent drop in
cognitive performance, memory, attention span, brain function, you know, the
kind of stuff that actually can make retirement fun if
it's in good order. And that's this is why we
all say we want to retire earlier here in the
United States. Well over there, it's such a work driven
(15:42):
economy that as soon as it was gonna say on, yeah, if.
Speaker 1 (15:44):
I lived in China, Brian, I think I'd want to
be retired too, but go ahead.
Speaker 5 (15:48):
Yeah and so, but basically the brain shut off, and
I'm just gonna go out on a limb here and say,
there just might not be as much of a dream
of retirement and freedom and all that kind of thing
over there in China as there is here. So the so, yeah,
how do we compare that to the United States? Well,
similar results. So there was a study published by the
Journal of Epidemiology and Community Health found that people in
the United States who retired at fifty five were twice
(16:11):
as likely to die early compared to those who are
retired at sixty five. Now that this don't don't assume
that this means that your job is the only thing
standing between you and the great beyond. But what it
does suggest, though, is that retirement when it's early and unstructured.
In other words, I miserable, hate this job. Got to
get out of this and I'll figure out what I'm
gonna do later. Without a plan, that can lead to
a lot of isolation, which leads to less daily movement
(16:33):
physical movement, and fewer reasons to stay mentally sharp. And
all of a sudden, the hill the downhill ride is
kind of steepening on you a little bit.
Speaker 1 (16:41):
Yeah, Brian, I think you raised a good point before.
I mean, we when we have people come in and
talk about retirement now, very few people are saying, Hey,
I can't wait to just quit my job and do
nothing and sit in a rocking chair on the front porch,
or just play golf, you know, sixteen hours a day.
You know, people are already more thoughtful about this. People
(17:03):
are talking about what am I going to do with
my time and energy and my mind, you know, to
your prior point in advance. So I think we've seen
a healthy evolution in this whole retirement processing in advance.
But uh, for those that maybe are starting to think
about this, uh, here's three questions to ask yourself. Do
(17:23):
you want to stop working or just stop doing your
current job? And how how will you stay mentally and
socially active if you do retire early? Those are big
questions to answer and hopefully answer in advance. In other words,
is early retirement your really your goal? Or is just
flexibility having more flexibility and freedom in your life your
(17:46):
real priority. I think those are three wonderful questions to ask.
Speaker 5 (17:50):
Yeah, and I think a lot of times, you know
it's exactly that, and you know, a lot of people
wind up frustrating their careers. You know that they've gone
as far as they want to, or maybe as far
as they can, or maybe the writing is just on
the wall and the company's kind of moving on beyond
there in their level of interest. But that doesn't mean
they're ready to retire yet either. So I think the really, really,
really important thing to be thinking about is we all
tend to hide behind the dollars and waiting until you know,
(18:12):
I think I have enough perceived money that I can
actually get away with retirement, and we tend to focus
on that to the detriment of the time because once
we do get that, oh by the way, hey, people
who focus on that number tend to work too long
and they wind up surpassing that number because they didn't
have a plan to begin with. So they might hit
that number and plow right past it because now they
(18:34):
don't know exactly what they want to do, and retirement
just becomes terrifying. So start to think about what it
is you might do. Are there smaller organizations where your
skills would be valuable and you could potentially go work
for them for some level of income. But remember the
whole point of this is you don't need the salary anymore,
and you probably don't need the benefits as much as
you used to either. So think big, think outside the box.
(18:55):
Go on websites like indeed and type in random words
of stuff you're interested in. Just a keyword search, see
what kind of jobs here that are out there. You'd
be shocked at the kind of things that people will
pay you to do to take advantage of the skills
that are in your brain that you developed over all
those years. But don't focus only on the light at
the end of the tunnel. I got to get out
of this job and I'll worry about the rest later.
That hits like a freight train. You really have got
(19:17):
to spend some time thinking about how you will fill
the vacuum of time that you will have when you
no longer have to work.
Speaker 1 (19:24):
Yeah, the real sweet spot here to me, Brian, is
being in a position where you can make decisions based
on what you want to do and feel called to do,
not what you feel like you have to do. That's
really retirement freedom, and there's a lot of factors that
go into that. Obviously money is won, but you got
to plan ahead and kind of look around here at
(19:46):
how you're going to fill your time and energy, because
at the end of the day, whether it's your work,
volunteer work, you know, relationships in the community. Everyone wants
to have some purpose and meaning in their life and
they want to have contact with other people. And if
you don't have those things, some true community in your life,
(20:07):
I don't care whether you're worth five dollars or fifty
million dollars, your life's going to be empty. Here's the
all Worth advice. If you're dreaming of early retirement, that's great,
but make sure you're planning for more than just financial freedom.
Plan for purpose too. Coming up next, we've got the
money makeover for all you empty nesters out there. You're
listening to Simply Money, presented by all Worth Financial on
(20:28):
fifty five KRC, the talk station.
Speaker 6 (20:30):
What's Happening, Presidents, Olenski's coming in five KRC and iHeartRadio station.
Speaker 1 (20:41):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller along with Brian James. There's this moment
every parent eventually hits it. You after the last kid
moves out when you walk past that empty bedroom and
it just socks you right in the mouth. Oh, while
it's quiet in there. I've experienced that, Brian, my wife
(21:03):
has as well. And right after that you start thinking, Okay,
what do we do with all this space and potentially
what do we do with all this money we've been
spending on travel, baseball and college tuition and all that.
So you know, the point we're trying to make tonight
and kind of walk through is when you hit that
empty nester phase, it's not time to just you know,
(21:27):
go out and spend all that extra money you might
have have laying around or think you have laying around.
It's time to take some inventory on where does life
actually pan out right now, and maybe some some tune
up work that needs to be done to your overall
financial plan.
Speaker 5 (21:44):
Yeah, so an empty nester money makeover, I think, is
what you're referring to there. So you already refer to
the expenses that may be gone, all those things that
the kids were into that you know aren't costing money anymore.
Speaker 4 (21:54):
So let's talk about the house.
Speaker 5 (21:55):
So the structure of the house, of course, is still
the same in congratulations, because it's still standing that's good thing,
but you don't need all that space.
Speaker 4 (22:02):
So what about that old bedroom. Maybe it becomes a
yoga room.
Speaker 5 (22:05):
Or a guest suite or the sports bar, but probably
what it will become first is a glorified storage unit
for you know, twenty band, twenty years of marching band
trophies and old posters, legos and that kind of thing.
So money works the same way. When the kids are gone.
It's sort of like you just cleared a giant room
in your financial house. So what do you want to
do with those resources that you have next? Well, one
(22:25):
of the first things to look at is that cash flow.
So as we mentioned, a lot of those regular expenses
are gonna disappear. Your grocery bill is gonna drop when
they hit a certain age. Eventually, your car insurance is
gonna drop, you'll hand off their cell phones, college payments
go away. But without some kind of planning those extra
the absence of those expenses is gonna give you extra
spendable money, and it could result in we've got this stuff,
(22:48):
so we might as well blow it on things, and
you maybe you wind up with a fancy of your car,
more eating out, and then you may wind up regretting
that you didn't really have a plan for it.
Speaker 4 (22:56):
So just think about it in advance. Think about it
like this.
Speaker 5 (22:58):
If you take down a wall of your house, you
could fill that new space with clutter, or you could
open it up and make it more functional for something
you actually want to do. But the point is you
will have thought in advance for what you want to
do with those new added resources that you have. So
maybe it's funding those Ketchup contributions in your four one okay,
increase that amount, or IRA contributions roth IRA backdoor contributions.
Speaker 4 (23:19):
If that's something that you're familiar with.
Speaker 5 (23:22):
If you're over fifty, you can put in a little
extra each year, and for those in their early sixties,
there's even a new Ketchup. So these dollars sometimes aren't
present at the moment, but remember these opportunities when you
do hit this empty nest stage of life.
Speaker 1 (23:36):
Well, Brian, speaking of taking that wall down and having
the option of just having a bunch of clutter, My
wife and I are living this right now, so I'm
giving you a preview of what your life is likely
going to become. All three of our kids are out
of college, they're all living on their own now in
their own separate homes and dwellings, but a lot of
their crap is still in our house. You know. It's funny.
(23:58):
We my wife will go through a wonderful job of
keeping our home clean and clutter free, but she'll periodically
go through and find all you know, you use the
analogy of marching band trophies. I mean, whether it's that
or athletic trophies, are just close, you know, stuff laying
around and she'll go to the kids and say, hey,
you moved out. Are you going to take this stuff
with you? Nope, don't have room for that. Can you
(24:20):
keep it? So it is a lot of the stuff
never goes away. It's a process, all right. Speaking of
the house, and this is a topic that comes up
a lot. People talk about wanting to downsize or write
size their home. This is a big emotional and financial topic.
Some people dream about downsizing, while others love their current
(24:44):
home and plan to stay put even if they have
two or three bedrooms that are completely empty. The point
I make here, Brian, is a lot of times people
talk about downsizing. I don't know about you. I have
yet to see the client, and I've been doing this
for thirty five years. I've yet to see somebody sell
their primary residence and move somewhere that ends up costing
(25:08):
less money. It might be smaller, but it ends up
being newer with you know, with nice, with nice furniturings.
It never costs less money. People want to rationalize this
by making it, you know, calling it downsizing. It's really
not when it comes to finances. So just you know,
(25:28):
buyer beware out there when you start talking about the
whole downsizing conversation. Does this ring true with you and
your clients as well?
Speaker 5 (25:35):
Most there's no such thing as a financial downsizing When
it comes to your house.
Speaker 4 (25:39):
There's an effort and work downsizing.
Speaker 5 (25:41):
You can reduce the amount of work you got to
put into it, but you're not gonna save any money.
Even if you buy a smaller house, it's most likely
going to be in a nicer neighborhood or an area
you always wanted to live in, that kind of thing,
and you're probably not the only one who wanted to
live there. Therefore, the expense the purchase it goes up.
So don't think money when you think downsizing.
Speaker 1 (25:58):
So what do we do about this?
Speaker 5 (25:59):
Well, well, you can do what's called a retirement rehearsal.
So once the hew you've noticed the house is quiet
and that budget is a little lighter, well that's the
time for a test drive. So maybe live for six
months on what you think your expected retirement income is
gonna be. And that might be so security, pension, investment withdraws,
or rental real estate income, that kind of thing. See
how that feels, and you're gonna learn quickly if the
plan works, because you'll know right away when you're dipping
(26:22):
into more than what you thought you were going to.
And then you're gonna be because this is you're not
making a real sacrifice at this time.
Speaker 4 (26:28):
You're just kind of test driving, so.
Speaker 5 (26:29):
You're gonna you'll know if you need a little tune
up before that paycheck stops. So it's kind of like
taking the RV on a weekend trip right before you
actually buy it for real, before you hit the road
full time. You're gonna want to test it before you're
thousand miles from home and see if you run across
any problems you didn't anticipate.
Speaker 1 (26:43):
One more thing. I think that is a wonderful idea,
and I wish more people did this and I'm in
the middle of crying to do this right now, you know,
with my wife actually constructing a budget and looking at
what this is really gonna look like, if life's gonna
resemble what we think it might resemble. I think it's
really good to test drive this in advance. But go on.
Speaker 5 (27:06):
Yeah, and so one more thing to do when you've
got this free time you're gonna be Remember the whole point
of this is that the kids are going they're out
on their own. You're gonna start paying attention to what
it is they do and how they live their lives.
That's gonna be a bit of an estate planning tune
up for you. So you're gonna need help sooner or later.
Someday you're probably already in a situation where you yourself
are helping your own parents, and so this is the
time to learn which kid might make the best executor,
(27:28):
who is the one who can make decisions on your behalf.
This is yes, this is years into the future, but
you sooner you put this stuff into place, the sooner
you cannot think about it, enjoy and enjoy retirement more.
And then you'll be thinking about which of my kids
are good on their own, and I can trust them,
you know, inheriting money at my death, which of them
made me have some more challenges and may require a
little extra care for which I might need a trust
(27:50):
and a trustee in place. So estate planning isn't just
about passing that money. It's about making life easier for
the family later, especially for those of you who have
been through a difficult estates process, for maybe your own parents.
So think of it like labeling those boxes in that
remodeled home. You're saving everyone from chaos down the road
by planning ahead.
Speaker 1 (28:08):
Here's the all Worth advice. An empty nest is your
chance to reimagine and possibly refill your future. You know
you should be diversified, But what does being quote unquote
two diversified look like. It's one of the questions we'll
answer next. You're listening to Simply Money presented by All
with Financial on fifty five KRC the talk.
Speaker 4 (28:29):
Station Mark Levin.
Speaker 2 (28:32):
We Americans, we patriots, are irrational people. Irreasonable people, the
people who know good from either right from wrong. We
also know hustlers and Marxists and fascists in Islamists who
endanger our country Every damn day. We're destroying our culture
into civil society. Who are breeding a youth that hates
America and embraces the wrong thing?
Speaker 3 (28:51):
Mark Levin tonight at ten oh six on fifty five KRC,
the talk station.
Speaker 1 (28:57):
Hey, your opinions are welcome to here. Why do we
cat letting thousands of people come over and do nothing
about it?
Speaker 4 (29:02):
My family's safety is at risk.
Speaker 3 (29:04):
Fifty five KRS the talk station.
Speaker 1 (29:12):
You're listening to Simply Money, presented by all Worth Financial.
I'm Bob sponseller alone with Brian James. Do you have
a financial question you'd like for us to answer. There's
a red button you can click while you're listening to
the show right on the iHeart app. Simply record your
question and it will come straight to us. All right,
Brian tim and Hyde Park says, our advisor keeps saying
(29:32):
we're on track, but it doesn't feel that way to us.
What's the difference between being mathematically fine and being truly
financially free? This is a great question.
Speaker 5 (29:42):
Yeah, I really think so. So this if you if
it doesn't feel that way. First of all, that's not
that's not necessarily a negative thing. That's that you know,
that's that Jiminy cricket on your shoulder telling you to
be careful. That's the same voice that that that has
been telling you all along to save, safe, save. It
can be hard to tamp that voice down and turn
that freighter around psychologically, which is a very slow process
(30:04):
to spending your assets from putting nuts away for the winner.
So the difference between mathematically fine and being truly financially free,
Tim is confidence. So it sounds like you just need
to go through your plan some more, and who knows,
maybe the advisor is missing something.
Speaker 4 (30:17):
We're all humans. Sometimes things don't go well.
Speaker 5 (30:19):
So if there's something you mathematically agree with, pinpoint that
for the advisor and ask them to explain it again
and again until you understand it. But again, that's the
difference between mathematically fine and financially free is confidence. Yes,
I see this plan, and I understand that things the
light doesn't always work out that way. But I have
stress tested this plan several different times for many reasons,
(30:40):
and now I feel confident that anything crazy that comes
out of left field we can handle.
Speaker 4 (30:44):
Confidence is the difference.
Speaker 5 (30:45):
Tim David in Blue Ash David has a question for you, Bob,
and he says, we always talk about being diversified. But
is it possible to be too diversified, and if so,
what does that look like?
Speaker 1 (30:54):
Bob Well David, The most common situation we come across is,
you know, people feel diversified, but they might have you know,
thirteen to seventeen different large cap mutual funds or ETFs,
either in their retirement plan or in their broker's account.
They've just been collecting these products over time, and people
have the sense of, you know, the more funds or
(31:17):
investment options I own, I'm automatically diversified. Well, true diversification
is having some non correlated asset classes to complement, you know,
in my example, the large cap growth positions, so a
little bit of bonds, a little bit of small cap,
a little bit of international, maybe some private equity, maybe
(31:37):
some buffer ETFs thing. You know. The whole idea behind
having a long term uh diversified portfolio is to have
a portfolio that over time gives you the highest rate
of return per unit of risk. That's what that modern
portfolio theory that you know, all financial advisors should be
modeling portfolios after it. That's what that's how and why
(31:59):
it works. So we have to define what diversified means,
and the only way to do that is kind of
look under the hood and see what you actually own.
But that's my answer. Oftentimes people feel diversified by having
a bunch of options in one particular asset class, and
that's where you might feel like you're diversified, but you're
(32:21):
really not. Hope that helps, all right, Eric and Fort
Mitchell says, my company just offered me restricted stock units,
and I don't fully understand how they're taxed. How do
I build a plan around something like that that fluctuates
in value?
Speaker 5 (32:35):
Bron So, first off, congratulations, because you obviously you work
for a company it's been successful enough it wants to
reward its employees by giving them a little piece of
the action.
Speaker 4 (32:43):
So that's fantastic.
Speaker 5 (32:44):
So those can be an excellent form of compensation, But
they do have unique tax and planning challenges because their
value depends on one company's stock price, and there's just
no way to tell what direction one company is going
to go or what the market's going to do to it.
Speaker 4 (32:58):
So, but here are the facts.
Speaker 5 (33:00):
When you're granted those restricted stocks units, you don't owe
any taxes yet because you technically don't own anything they're
restricted until they're not, so they're just a promise, so
that transaction at the very beginning is not a taxable one.
They all have a vesting date, though, and once they
vest they hit that date.
Speaker 4 (33:15):
Now they're yours.
Speaker 5 (33:16):
Now the value of them is treated as ordinary income,
just as if they had increased your salary a little bit.
So the value of those shares are going to be
added to your W two income. Federal, state, and payroll
taxes are going to apply, and they will be withheld.
Oftentimes you'll have a choice though through what they call
share withholding, or they're going to sell some shares to
cover and then after those vests, so you've paid income
(33:37):
taxes for what you're sitting on now, you just down stock. Now,
you just down shares as if you had bought them
on your own. And if you sell them within a
year of having been granted them, then if there's any
gains above what you paid for when they were when
they came unvested, then you're going to pay income taxes
on that as a short term gain. If you sit
on them for more than a year, now you get
the lower capital gains. Right now, it's always a crapshoot
(33:59):
as to whether you should hold sit on them. Only
you'll know your company better than anybody else. Treat it
like an investment hit if you had bought it on
your own or inherit it or whatever, then think about it.
That's something you want to keep for the long term.
But hopefully that helps with some of the questions you
might have had out there. And again, congratulations for the
future windfall. So moving on to Karen and Loveland, Karen
says they've been careful with money, but now they're in
(34:20):
that sandwich generation where they're helping. They're spending more helping
their own aging parents, not to mention keeping their own
situation afloat.
Speaker 4 (34:26):
So how do you how do you spread it all out?
Speaker 1 (34:28):
Bob?
Speaker 5 (34:28):
How do you support those aging parents without sacrificing their
own security?
Speaker 1 (34:33):
Great question, Karen, here's my answer. Don't just leave it
to chance. And here's what I mean. First, build build
a financial plan and update it if you already have one,
and run some different scenarios. What do our aging parents?
You know, what are they going to we think we're
going to need and for how long? And put those
expenses into your plan and then factor in your own
(34:55):
social security. As you pointed out your question, have a plan,
run different scenarios, and stress test that plan and see
how it's gonna work. And usually one of three things
you know might need to happen. You know, if you
and or your spouse might need to work maybe one
or two or three extra years in order to pull
(35:15):
all this off. You might have to spend a little
bit less money in order to help your aging parents.
There's a lot of different variables there, and the important
thing is get out in front of it. Now. Run
those scenarios so you have more control over those levers
that you pull. And then i'd say the last thing
is communication. You know, if you get to the point
(35:37):
where you can't just bankroll everything for your aging parents,
the sooner you can sit down and have those tough
conversations right now, the better everything's gonna be, you know,
down the road. I don't know. If you have siblings
that are in the mix, you know it might involve
some communication with them. But that's my answer. Run a
good financial plan and then communicate. Communicate, communicate. Don't just
(36:00):
hope all this works out at the end. You'll make
some adjustments now when you have the ability to do so. Next,
I've got my two cents on picking a financial advisor.
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the talk station.
Speaker 7 (36:17):
In order to love your dream doesn't always involve a
pay cut, invest your time. Sometimes it involves a pay
cut to get moving and then move.
Speaker 4 (36:24):
Up and invested in your future.
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But I would want a path to make more than
I made, not less than I made. Dave Ramsey, There's
a lot of people need help in this world. I
want you to get clear. I want you to spend
some time very carefully going through what are your talents,
what are your passions, what are your skills? You know,
what is it you value?
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I am so worried that next month I have to
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Talk about it here fifty five krs the talk Station.
Speaker 1 (37:00):
Listening to Simply Money. He thought about all Worth Financial
on Bob Spondseller along with Brian James. All Right, Brian,
we talk all the time about having a properly diversified
investment portfolio, but you know, from time to time we
run into folks that think it's a good idea to
be diversified in terms of the number of quote unquote
(37:20):
financial advisors they have, and I want to touch on
that a little bit. I rarely, if ever, find this
to be a good idea where people are getting ideas
from four to five different quote unquote advisors, when really
all they are is just people that they've bought product
from over the years. And you know, at the end
(37:42):
of the day, a lot of these clients aren't really
looking for an advisor. They're looking for a bunch of
different ideas and they want to be their own advisors.
So the analogy I want to use is, you know,
because of a heart valve, you know thing that I
was born with.
Speaker 2 (37:58):
Uh.
Speaker 1 (37:58):
I've seen a cardiologist for shoot thirty years now, and
when it comes time to having somebody keep me alive,
I'm not googling it. I'm not talking to six different cardiologists.
I asked around. I found a good one and then
I let him manage my care over the long term.
And I don't need to get into all the details,
(38:19):
but he's done a wonderful job of keeping my heart healthy.
It's because I found a good cardiologist. I trusted him,
I trusted his process. I trusted the fact that he
has always ordinated my care with my primary physician and
it's been a good outcome. The same thing should apply
to your financial advisor. A big thing that we run into,
(38:44):
Brian is there's no coordination from a tax standpoint, you know,
with a client CPA or even proactive tax strategy. And
I'll say, if even if you've got five different quote
unquote advisors out there and no one's doing an proactive
tax planning and coordinating with your CPA, you do not
(39:04):
have a good financial plan. You got a couple of
good ideas, you got a bunch of people trying to
retain wallet share in terms of your assets under management,
but you really don't have a good financial plan. So yeah,
go John.
Speaker 5 (39:18):
I want to lean on your your your cardiologist example there,
because I've had a similar situation where I've got a
minor thing going on that is a'ty to worry about,
but I got to pay attention to it. And when
it first surfaced about fifteen years ago, I went to
the closest place because I really wasn't I didn't know
how to think about this stuff, and It took probably
about six months before I realized that that was not
their specialty, and they were kind of flailing a little
(39:38):
bit trying to figure out that this wasn't a traditional cardiologist.
It was somebody recommended to me by by the hospital
for the in the er that I went to. And
I realized that, you know what, I really need somebody
who does this all day long and that's all that
they do. And I figured out that that was a
very different experience, and they got me squared away and
I go every few years and they say, go away,
you're in pretty good health, but let us know anything
(39:59):
else happens, which is a goo thing. Same thing with
financial advisors. Figure out what your challenges are. If your
financial advisor isn't teaching you things that you didn't already know,
they're not doing you any good.
Speaker 4 (40:08):
They're probably just selling you product they should be. It shouldn't.
Speaker 5 (40:12):
A financial advisor should never tell you exactly precisely, here's
what you need to do, in black and white terms.
If you have built a solid financial situation for yourself,
that should mean you have options, and options come with
pros and cons, and it's not for an advisor to
tell you which to do. It's for the advisor to
help you clearly understand the pros and cons because they're
all good ideas. One of them will be better than
the others. That is your call, but you need an
(40:33):
advisor there to tell you which to do. It's never
black and white. When you've reached a level of financial success.
Speaker 1 (40:39):
Yeah, and to use your example, and it's one that
I lived through with that cardiologist as well. I mean,
you get to a certain point where I had a
high degree of respect for someone that says, hey, I've
reached the limits of what I'm able to do personally.
I'm going to refer you to this specialist over here.
That's good advice. Thanks for listening tonight. You've been listening
to Simply presented by all Worth Financial on fifty five KRC,
(41:02):
the talk station.
Speaker 6 (41:04):
I'm super grateful that I was able to leave him
financially giving thanks.
Speaker 1 (41:09):
It wasn't a good situation for me and my kids,
and I just have you to think for that.
Speaker 4 (41:14):
For all the advice I told myself I wasn't going
to cry, and.
Speaker 1 (41:17):
The guidance to make good decisions.
Speaker 7 (41:19):
You got control of your life and I gave you
choices I'm proud of you.
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The Ramsey Show. It's definitely hard to get started, but
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your lunch every day and.
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Not drink Starbucks. Weekdays at seven on fifty five KRC,
The Talk Stay
The voices. You know what, I'm gonna give you a
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Speaker 2 (00:03):
It's gross, gross incompetence of October.
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People are scared fifty five krs the talk station.
Speaker 1 (00:17):
Tonight, the retirement mirage. While your quote unquote number might
be a lie. You're listening to simply Money presented by
oh Worth Financial on Bob Sponseller along with Brian James.
You've worked hard, save well, maybe maybe even hit that
magical I don't know, five million dollar number you've had
circled for a decade and now you're there. But here's
(00:40):
the potential curveball. Now that you've quote unquote won the game,
You're not sure the scoreboard actually matters. What are we
talking about here, Brian, Well.
Speaker 4 (00:50):
There's always the myth of the magic number out there.
Speaker 5 (00:53):
There's a lot of people who in a lot of
companies who promote the idea that everybody has a number
out there, and that may that may be true, that
may not be. But I think it's way too easy
to simply say, here's the finished line that I got
to get to and then everything is smooth sailing from here.
Because God tend to thinks he's funny, and life will intervene,
so that moving on or that that magic number may
move on you. So there might be two million, could
(01:14):
be five million, but you have to we have to
account for lifestyle tax obligations for both of those things
to change.
Speaker 4 (01:21):
The complexity of your holdings.
Speaker 5 (01:22):
The more complicated your portfolio is, the more out of
left field type of things you could have happen. For example,
you know, you give me two people with five million dollars,
they could have completely different outcomes depending on where that
money is. Is it pre tax, Bob, is it you know,
like four to oh one k they've just worked a
long time for another company, or is it after tax?
Maybe they sold their own company, inherited something, a combination
of everything, real estate, other business entities, that kind of thing.
(01:45):
All of it changes the calculus on what that magic
number might be and whether it stays that magic number.
Speaker 1 (01:51):
Well, and it all depends on how you choose to
turn those assets into income, because let's face it, at
the end of the day, no matter what your net
worth is and how it's comprised, we all, Brian, need
to take this pile of stuff, as you said, whether
it's real estate, equity, business ownership, investment, we need to create.
We need to turn that into a paycheck to replace
(02:12):
our day job if we really want to retire. And
planning and doing the most tax efficient strategy on converting
all that pile of assets into income is really where
the magic happened. And it requires some planning. It it
requires some proactive planning. All right, another yeah, no, go ahead.
Speaker 4 (02:32):
So let's yeah, So let's talk about taxes here. Let's
kind of break these down.
Speaker 5 (02:35):
What are the different things that could drive different outcomes. Well,
if you let's say you're somebody who has worked for,
you know, a big company for a long time. This
is a Procter and gamble folks around town or maybe Kroger,
those kinds of things. Uh, you know, you might have
five million dollars in your four oh one k. Well,
if that's all pre tax dollars, because for somebody who
has worked in one place that long, that was the
only choice when you first started, pre tax was the
(02:57):
only option you had.
Speaker 4 (02:58):
There was no wroth, you know, there were no other options.
Speaker 5 (03:01):
So that if that's a pre tax number, that might
really only be three and a half million dollars after taxes,
depending on the asset types that are in there. So
what that means is you are set up for significant
required minimum distributions at age seventy three or seventy five,
depending on when you were born.
Speaker 1 (03:16):
That's going to.
Speaker 5 (03:17):
Affect your Social Security tax ability. You're probably going to
be facing something called IERMA in those years because you
will have a significant minimum amount of income. If you
got five million in a pre tax account at age
seventy three, you're looking at probably two hundred and forty
two hundred and fifty thousand dollars worth of distributions that
you have to pay tax on. That's gonna definitely put
you into the second tier of IRMA. And so for example,
(03:37):
that's something you might want to be thinking about. What
can I do about that before I get to that age,
And the answer is pretty much, let's look at roth conversions,
or in the case of some companies Procter and Gamble
being a big one, you can do something called a
net unrealized appreciation transaction, which basically means you pull out
some of that Procter and Gamble shares from your profit
sharing side from the PST side, and you will pay
(04:00):
capital gains tax on them if it's done properly, not
income tax. And you will have removed it from the
four oh one K. So, and that's not limited to
Procter and Gamble. That's just a very prominent example of
a company that has that feature. If you've got company
stock in your four oh one K, you might look
at something called net unrealized appreciation.
Speaker 4 (04:17):
Whether or not you work at Procter and Gamble, for sure, that.
Speaker 1 (04:20):
Can make a huge difference. All right. Another thing that
tends to get overlooked is something we've we've talked about
before on this show, something called sequence of return risk.
And what we mean there is volatility in your portfolio
when that portfolio actually has to start creating monthly or
annual income. Here's what we mean. You know, when you're
(04:40):
accumulating money in your retirement plan and you're just working
and socking money away, you really don't care much about volatility.
All you care about is the average long term return
thing because let's face it, you're not spending any of
that money. So if the market goes down eight, twelve,
fifteen percent, we know, if we're still working and putting
(05:01):
money away, it's always going to recover it. Usually it
always does, and you can kind of put that out
of your mind and just keep piling away and working
and socking money into your plan. Well when you when
it comes time to turn this into a monthly income stream,
Volatility matters a lot, and we've you know, it's just math.
(05:21):
We've run studies depending on what that volatility is.
Speaker 3 (05:25):
Uh.
Speaker 1 (05:25):
Even if your average long term return stays the same,
if you don't manage volatility while you're pulling money out
of a portfolio, that can really deplete your asset base
even though the long term return didn't change at all.
It's counterintuitive, you know, for a lot of people until
you actually see these numbers in action. And that's why
(05:47):
it's important when it comes time to retire, to sit down,
you know, with a good fiduciary advisor and walk through
your income strategy and make sure that you've got some
money out of harm's way to that you're going to
spend the money you're gonna spend then the next say,
one to three years. That gives you some protection against
this what we call sequence of return risk, because it
(06:10):
is a real risk out there. It's just playing old mathematics.
Speaker 5 (06:13):
Yeah, And a good mechanical way to test this is
by doing something we call a stress test, put together
your financial plan, figure out what your spending needs to be.
Fluff it if you want a little bit, just add
a little bit more and build inflation to it over
the years and figure I would also say, figure out
which goals you have, what spending goals you have that
won't exist forever. There's a mortgage in the mix that's
(06:34):
not going to be there. You know, if you're going
to retire at sixty and you have a mortgage for
another few years, that's not going to be there when
you're ninety. Don't bake that into your living expenses. It's
going to make things look unnecessarily negative. But then, so
run your numbers with a standard rate to return an
it's conservative, say five six percent. You should be able
to get more than that out of a decent investment program.
But we're simply projecting conservative projections here. So then once
(06:56):
you've done that, do it again, but take off, say
twenty percent of your financial networth.
Speaker 4 (07:00):
Just make it go poof.
Speaker 5 (07:01):
Lower the numbers by twenty percent, don't change anything else,
and run all the numbers again. That will tell you
if you can handle what some people went through in
twenty twenty one.
Speaker 4 (07:09):
Anybody retired in twenty twenty one. We immediately went over the.
Speaker 5 (07:12):
Cliff in twenty two and most people, if they didn't panic,
have recovered nicely and are okay. People who did panic
and decide that I'm now retired, this is scary. I
have to protect my assets. Well, then they probably changed
permanently the trajectory of their retirement plan. So do that
before illustrate it, before those kinds of things happen.
Speaker 4 (07:29):
Your number may come up that could happen to you.
Speaker 5 (07:31):
There's only so much you can do in moving investments
around to protect from it. We need to be able
to withstand it and maneuver ourselves around the stress of
that happening. So just run those numbers with that happening
and make sure your plan still floats.
Speaker 1 (07:44):
All right. Another factor to consider it, no matter how
big your quote unquote pile of assets is, is just
longevity and potential family obligations. Here's what I mean. And
I see this more and more happening, Brian. I don't
know if you do, but I see this happening a lot.
Many high net worth families are simply becoming multi generational banks.
(08:07):
And you know, I'm sure when they sat down fifteen,
twenty twenty five years ago. They never expected to be
in a situation where they're supporting their adult children, maybe
more or beyond what they had planned. They never expected
to have to support financially their own parents or other relatives.
(08:27):
And once that bank, you know, is shown to become
available and you start dispensing money, you know, human nature
being what it is, the assumptions can be, well, this
support is always going to be permanent, and if that's
really the case, you got to factor that into your plan.
If it's not the case, you got to do some
heavy duty communicating. But you first got to look at
(08:50):
the numbers and say, what can we board to continue
to do if some of this support that we hadn't
planned to be generating continues, and then you know, make
adjustments as needed. Do you see that happening more and
more with your clients, Brian, because I certainly.
Speaker 5 (09:06):
Do, absolutely, And I find myself thinking about all, right,
I know, I've I've got three kids who are that
are just getting to their own level of independence, and
I worry about that all the time. I think about
it a lot more, I think than my parents had
to because it was a little easier to get started
in those days. So but I think I think Bob
would be easiest. We went through some examples. We've got
some examples prepared here of actual client situations, real people,
(09:26):
but fake names, and it's just kind of how they've
navigated things and how they get to where they've gotten to.
Speaker 1 (09:32):
So first off, yeah, run us through one.
Speaker 4 (09:34):
Yeah, So let's take Steve. Steve was sixty seven years old.
Speaker 5 (09:36):
He's got a net worth of six point two million dollars,
most of that having come up come from a having
sold a business about five years ago, and about four
million of that networth is now tied up.
Speaker 4 (09:46):
In real estate.
Speaker 5 (09:47):
He's got a couple rental properties, vacation home, and then
about one point two is in his pre tax for
O one kay million dollars in a taxable broker's account there.
So he basically came in thinking that six million means
set for life and didn't have to worry about it.
Speaker 4 (10:00):
And mathematically, yeah, that's usually you know in the ballpark.
Speaker 5 (10:03):
But the problem is that rental income is not consistent
and it's it's become a bit of a burden to
maintain those properties rights. It's one thing to look at
a piece of paper that says you own a couple
of nice rental properties and here's the rental that they average.
You know, but if it's inconsistent and you're dealing with tenants,
that changes everything because you're the one that has to
pick up the phone. So the point was what brought
(10:25):
him in was the idea that he wants to He
wanted to change his six million dollars worth of assets
around to make it simpler. And so the challenge was
how do we do this and generating the income that
he needs without relying on so much of a business
in the rental real income. He had already ruled out
the idea that, well, I could hire a property manager
to do all this, but then that really kind of
sucks all the return out of owning a real estate
(10:47):
in the first place and makes it kind of just
not that impactful in terms of generating income net income.
And so basically his problem was he had a lot
of net worth but just about no flexibility. So that
retirement number he had identified, a six million dollars set
for life figure didn't really work for him anymore because
of the asset location, because of what he did. So
we helped him basically get through the idea of let's
(11:09):
consider selling these properties, change your mindset from what you
thought was going to be the best way to go,
and then let's just look at things a little bit
differently to give you a less involved quote unquote business
of retirement. And he's been pretty much happy ever since.
And all we did was shine a bright light on
situation you're in. In the situation, you could be in
good stuff.
Speaker 1 (11:27):
All right, we'll run through one more actual example. We'll
call this couple Denise and Mark. They're sixty four and
sixty six. They have a net worth of about five
million dollars. They retired in late twenty twenty one after
strong markets boosted their portfolio, and their advisor said, yeah,
you're totally fine withdrawing two hundred thousand dollars a year.
Your plan will quote unquote work assuming six percent average
(11:51):
returns continue forever. The problem, as we all know, twenty
twenty two was a down year. The stock market was down,
the bond market was down. That five million dollar portfolio
dropped to a little over four million dollars, and they
still pulled the two hundred thousand dollars out. So that's
a real withdrawal of over seven percent of their capital
in a down market, and that just compounds the losses
(12:15):
the the The answer to this is proactively in advance,
have a bit of a bucket strategy where you've got
some assets not subject to market volatility that can supply
your income needs over that one two three year time
frame where you're not subject to all that down downside
(12:36):
sequence of return risk. It makes a huge difference. And
these folks finally got the message and they're living happily
ever after now because they've got some money set aside
in different places for different reasons, and they're taking some
of that short term spence of return risk off the table.
Here's the all Worth advice. Your retirement success isn't about
(12:57):
how much you've saved, It about how that money is
actually put to work to achieve your actual goals. A
lot of people dream of early retirement, but what if
stopping work too soon actually hurts your health and shortens
your life. We've got new research to discuss on that topic. Next,
you're listening to Simply Money, presented by all Worth Financial
(13:20):
on fifty five KARC the talk station. Yes full shutdown
in American history.
Speaker 5 (13:27):
President Trump can deploy National Guard troops to Portland, Oregon.
Speaker 1 (13:30):
Day's news we will send in the national Guide.
Speaker 3 (13:33):
He's on fifty five KRC, the talkstation.
Speaker 6 (13:36):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 1 (13:56):
You're listening to Simply Money by all Worth Financial, our
Bob sponsorer, along with Crime and James. If you can't
listen to Simply Money live every night, subscribe and get
our daily podcasts. Just search Simply Money on the iHeart
app or wherever you find your podcast. Straight Ahead, Eric's
wrestling with a big tax hit on new stock appreciation Unit,
(14:17):
Karen's portfolio just got too complex to manage on our own,
and Joe's wondering if downsizing makes sense Right now real
questions will hopefully provide some smart answers. Straight Ahead at
six forty three, So many Americans, maybe even you, dream
of retiring early. Get out of the rat race. No
(14:38):
more meetings, no more commutes, just absolute freedom. But there's
a new conversation taking place Brian, And it's not about
whether you can retire early based on whether you have
enough money. It's about whether you should because it might
not be as good for you as you think.
Speaker 4 (14:57):
Well, I don't think that's a new conversation.
Speaker 5 (14:58):
That's in a conversation that I have every single day
in my office, and I'm sure you do too through
the planning process. But USA Today picked up on it,
so therefore it's new to them anyway. So so polling
coming from USA today, a sixty percent of Americans say
that their dream is to retire early. But we get
some figures that from the National Bureau of Economic Research
that did a study of people in China, a little
(15:20):
bit of a different mindset over there. But when they
take early retirement over there, through this new pension program
they have, they see about a thirteen percent drop in
cognitive performance, memory, attention span, brain function, you know, the
kind of stuff that actually can make retirement fun if
it's in good order. And that's this is why we
all say we want to retire earlier here in the
United States. Well over there, it's such a work driven
(15:42):
economy that as soon as it was gonna say on, yeah, if.
Speaker 1 (15:44):
I lived in China, Brian, I think I'd want to
be retired too, but go ahead.
Speaker 5 (15:48):
Yeah and so, but basically the brain shut off, and
I'm just gonna go out on a limb here and say,
there just might not be as much of a dream
of retirement and freedom and all that kind of thing
over there in China as there is here. So the so, yeah,
how do we compare that to the United States? Well,
similar results. So there was a study published by the
Journal of Epidemiology and Community Health found that people in
the United States who retired at fifty five were twice
(16:11):
as likely to die early compared to those who are
retired at sixty five. Now that this don't don't assume
that this means that your job is the only thing
standing between you and the great beyond. But what it
does suggest, though, is that retirement when it's early and unstructured.
In other words, I miserable, hate this job. Got to
get out of this and I'll figure out what I'm
gonna do later. Without a plan, that can lead to
a lot of isolation, which leads to less daily movement
(16:33):
physical movement, and fewer reasons to stay mentally sharp. And
all of a sudden, the hill the downhill ride is
kind of steepening on you a little bit.
Speaker 1 (16:41):
Yeah, Brian, I think you raised a good point before.
I mean, we when we have people come in and
talk about retirement now, very few people are saying, Hey,
I can't wait to just quit my job and do
nothing and sit in a rocking chair on the front porch,
or just play golf, you know, sixteen hours a day.
You know, people are already more thoughtful about this. People
(17:03):
are talking about what am I going to do with
my time and energy and my mind, you know, to
your prior point in advance. So I think we've seen
a healthy evolution in this whole retirement processing in advance.
But uh, for those that maybe are starting to think
about this, uh, here's three questions to ask yourself. Do
(17:23):
you want to stop working or just stop doing your
current job? And how how will you stay mentally and
socially active if you do retire early? Those are big
questions to answer and hopefully answer in advance. In other words,
is early retirement your really your goal? Or is just
flexibility having more flexibility and freedom in your life your
(17:46):
real priority. I think those are three wonderful questions to ask.
Speaker 5 (17:50):
Yeah, and I think a lot of times, you know
it's exactly that, and you know, a lot of people
wind up frustrating their careers. You know that they've gone
as far as they want to, or maybe as far
as they can, or maybe the writing is just on
the wall and the company's kind of moving on beyond
there in their level of interest. But that doesn't mean
they're ready to retire yet either. So I think the really, really,
really important thing to be thinking about is we all
tend to hide behind the dollars and waiting until you know,
(18:12):
I think I have enough perceived money that I can
actually get away with retirement, and we tend to focus
on that to the detriment of the time because once
we do get that, oh by the way, hey, people
who focus on that number tend to work too long
and they wind up surpassing that number because they didn't
have a plan to begin with. So they might hit
that number and plow right past it because now they
(18:34):
don't know exactly what they want to do, and retirement
just becomes terrifying. So start to think about what it
is you might do. Are there smaller organizations where your
skills would be valuable and you could potentially go work
for them for some level of income. But remember the
whole point of this is you don't need the salary anymore,
and you probably don't need the benefits as much as
you used to either. So think big, think outside the box.
(18:55):
Go on websites like indeed and type in random words
of stuff you're interested in. Just a keyword search, see
what kind of jobs here that are out there. You'd
be shocked at the kind of things that people will
pay you to do to take advantage of the skills
that are in your brain that you developed over all
those years. But don't focus only on the light at
the end of the tunnel. I got to get out
of this job and I'll worry about the rest later.
That hits like a freight train. You really have got
(19:17):
to spend some time thinking about how you will fill
the vacuum of time that you will have when you
no longer have to work.
Speaker 1 (19:24):
Yeah, the real sweet spot here to me, Brian, is
being in a position where you can make decisions based
on what you want to do and feel called to do,
not what you feel like you have to do. That's
really retirement freedom, and there's a lot of factors that
go into that. Obviously money is won, but you got
to plan ahead and kind of look around here at
(19:46):
how you're going to fill your time and energy, because
at the end of the day, whether it's your work,
volunteer work, you know, relationships in the community. Everyone wants
to have some purpose and meaning in their life and
they want to have contact with other people. And if
you don't have those things, some true community in your life,
(20:07):
I don't care whether you're worth five dollars or fifty
million dollars, your life's going to be empty. Here's the
all Worth advice. If you're dreaming of early retirement, that's great,
but make sure you're planning for more than just financial freedom.
Plan for purpose too. Coming up next, we've got the
money makeover for all you empty nesters out there. You're
listening to Simply Money, presented by all Worth Financial on
(20:28):
fifty five KRC, the talk station.
Speaker 6 (20:30):
What's Happening, Presidents, Olenski's coming in five KRC and iHeartRadio station.
Speaker 1 (20:41):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller along with Brian James. There's this moment
every parent eventually hits it. You after the last kid
moves out when you walk past that empty bedroom and
it just socks you right in the mouth. Oh, while
it's quiet in there. I've experienced that, Brian, my wife
(21:03):
has as well. And right after that you start thinking, Okay,
what do we do with all this space and potentially
what do we do with all this money we've been
spending on travel, baseball and college tuition and all that.
So you know, the point we're trying to make tonight
and kind of walk through is when you hit that
empty nester phase, it's not time to just you know,
(21:27):
go out and spend all that extra money you might
have have laying around or think you have laying around.
It's time to take some inventory on where does life
actually pan out right now, and maybe some some tune
up work that needs to be done to your overall
financial plan.
Speaker 5 (21:44):
Yeah, so an empty nester money makeover, I think, is
what you're referring to there. So you already refer to
the expenses that may be gone, all those things that
the kids were into that you know aren't costing money anymore.
Speaker 4 (21:54):
So let's talk about the house.
Speaker 5 (21:55):
So the structure of the house, of course, is still
the same in congratulations, because it's still standing that's good thing,
but you don't need all that space.
Speaker 4 (22:02):
So what about that old bedroom. Maybe it becomes a
yoga room.
Speaker 5 (22:05):
Or a guest suite or the sports bar, but probably
what it will become first is a glorified storage unit
for you know, twenty band, twenty years of marching band
trophies and old posters, legos and that kind of thing.
So money works the same way. When the kids are gone.
It's sort of like you just cleared a giant room
in your financial house. So what do you want to
do with those resources that you have next? Well, one
(22:25):
of the first things to look at is that cash flow.
So as we mentioned, a lot of those regular expenses
are gonna disappear. Your grocery bill is gonna drop when
they hit a certain age. Eventually, your car insurance is
gonna drop, you'll hand off their cell phones, college payments
go away. But without some kind of planning those extra
the absence of those expenses is gonna give you extra
spendable money, and it could result in we've got this stuff,
(22:48):
so we might as well blow it on things, and
you maybe you wind up with a fancy of your car,
more eating out, and then you may wind up regretting
that you didn't really have a plan for it.
Speaker 4 (22:56):
So just think about it in advance. Think about it
like this.
Speaker 5 (22:58):
If you take down a wall of your house, you
could fill that new space with clutter, or you could
open it up and make it more functional for something
you actually want to do. But the point is you
will have thought in advance for what you want to
do with those new added resources that you have. So
maybe it's funding those Ketchup contributions in your four one okay,
increase that amount, or IRA contributions roth IRA backdoor contributions.
Speaker 4 (23:19):
If that's something that you're familiar with.
Speaker 5 (23:22):
If you're over fifty, you can put in a little
extra each year, and for those in their early sixties,
there's even a new Ketchup. So these dollars sometimes aren't
present at the moment, but remember these opportunities when you
do hit this empty nest stage of life.
Speaker 1 (23:36):
Well, Brian, speaking of taking that wall down and having
the option of just having a bunch of clutter, My
wife and I are living this right now, so I'm
giving you a preview of what your life is likely
going to become. All three of our kids are out
of college, they're all living on their own now in
their own separate homes and dwellings, but a lot of
their crap is still in our house. You know. It's funny.
(23:58):
We my wife will go through a wonderful job of
keeping our home clean and clutter free, but she'll periodically
go through and find all you know, you use the
analogy of marching band trophies. I mean, whether it's that
or athletic trophies, are just close, you know, stuff laying
around and she'll go to the kids and say, hey,
you moved out. Are you going to take this stuff
with you? Nope, don't have room for that. Can you
(24:20):
keep it? So it is a lot of the stuff
never goes away. It's a process, all right. Speaking of
the house, and this is a topic that comes up
a lot. People talk about wanting to downsize or write
size their home. This is a big emotional and financial topic.
Some people dream about downsizing, while others love their current
(24:44):
home and plan to stay put even if they have
two or three bedrooms that are completely empty. The point
I make here, Brian, is a lot of times people
talk about downsizing. I don't know about you. I have
yet to see the client, and I've been doing this
for thirty five years. I've yet to see somebody sell
their primary residence and move somewhere that ends up costing
(25:08):
less money. It might be smaller, but it ends up
being newer with you know, with nice, with nice furniturings.
It never costs less money. People want to rationalize this
by making it, you know, calling it downsizing. It's really
not when it comes to finances. So just you know,
(25:28):
buyer beware out there when you start talking about the
whole downsizing conversation. Does this ring true with you and
your clients as well?
Speaker 5 (25:35):
Most there's no such thing as a financial downsizing When
it comes to your house.
Speaker 4 (25:39):
There's an effort and work downsizing.
Speaker 5 (25:41):
You can reduce the amount of work you got to
put into it, but you're not gonna save any money.
Even if you buy a smaller house, it's most likely
going to be in a nicer neighborhood or an area
you always wanted to live in, that kind of thing,
and you're probably not the only one who wanted to
live there. Therefore, the expense the purchase it goes up.
So don't think money when you think downsizing.
Speaker 1 (25:58):
So what do we do about this?
Speaker 5 (25:59):
Well, well, you can do what's called a retirement rehearsal.
So once the hew you've noticed the house is quiet
and that budget is a little lighter, well that's the
time for a test drive. So maybe live for six
months on what you think your expected retirement income is
gonna be. And that might be so security, pension, investment withdraws,
or rental real estate income, that kind of thing. See
how that feels, and you're gonna learn quickly if the
plan works, because you'll know right away when you're dipping
(26:22):
into more than what you thought you were going to.
And then you're gonna be because this is you're not
making a real sacrifice at this time.
Speaker 4 (26:28):
You're just kind of test driving, so.
Speaker 5 (26:29):
You're gonna you'll know if you need a little tune
up before that paycheck stops. So it's kind of like
taking the RV on a weekend trip right before you
actually buy it for real, before you hit the road
full time. You're gonna want to test it before you're
thousand miles from home and see if you run across
any problems you didn't anticipate.
Speaker 1 (26:43):
One more thing. I think that is a wonderful idea,
and I wish more people did this and I'm in
the middle of crying to do this right now, you know,
with my wife actually constructing a budget and looking at
what this is really gonna look like, if life's gonna
resemble what we think it might resemble. I think it's
really good to test drive this in advance. But go on.
Speaker 5 (27:06):
Yeah, and so one more thing to do when you've
got this free time you're gonna be Remember the whole point
of this is that the kids are going they're out
on their own. You're gonna start paying attention to what
it is they do and how they live their lives.
That's gonna be a bit of an estate planning tune
up for you. So you're gonna need help sooner or later.
Someday you're probably already in a situation where you yourself
are helping your own parents, and so this is the
time to learn which kid might make the best executor,
(27:28):
who is the one who can make decisions on your behalf.
This is yes, this is years into the future, but
you sooner you put this stuff into place, the sooner
you cannot think about it, enjoy and enjoy retirement more.
And then you'll be thinking about which of my kids
are good on their own, and I can trust them,
you know, inheriting money at my death, which of them
made me have some more challenges and may require a
little extra care for which I might need a trust
(27:50):
and a trustee in place. So estate planning isn't just
about passing that money. It's about making life easier for
the family later, especially for those of you who have
been through a difficult estates process, for maybe your own parents.
So think of it like labeling those boxes in that
remodeled home. You're saving everyone from chaos down the road
by planning ahead.
Speaker 1 (28:08):
Here's the all Worth advice. An empty nest is your
chance to reimagine and possibly refill your future. You know
you should be diversified, But what does being quote unquote
two diversified look like. It's one of the questions we'll
answer next. You're listening to Simply Money presented by All
with Financial on fifty five KRC the talk.
Speaker 4 (28:29):
Station Mark Levin.
Speaker 2 (28:32):
We Americans, we patriots, are irrational people. Irreasonable people, the
people who know good from either right from wrong. We
also know hustlers and Marxists and fascists in Islamists who
endanger our country Every damn day. We're destroying our culture
into civil society. Who are breeding a youth that hates
America and embraces the wrong thing?
Speaker 3 (28:51):
Mark Levin tonight at ten oh six on fifty five KRC,
the talk station.
Speaker 1 (28:57):
Hey, your opinions are welcome to here. Why do we
cat letting thousands of people come over and do nothing
about it?
Speaker 4 (29:02):
My family's safety is at risk.
Speaker 3 (29:04):
Fifty five KRS the talk station.
Speaker 1 (29:12):
You're listening to Simply Money, presented by all Worth Financial.
I'm Bob sponseller alone with Brian James. Do you have
a financial question you'd like for us to answer. There's
a red button you can click while you're listening to
the show right on the iHeart app. Simply record your
question and it will come straight to us. All right,
Brian tim and Hyde Park says, our advisor keeps saying
(29:32):
we're on track, but it doesn't feel that way to us.
What's the difference between being mathematically fine and being truly
financially free? This is a great question.
Speaker 5 (29:42):
Yeah, I really think so. So this if you if
it doesn't feel that way. First of all, that's not
that's not necessarily a negative thing. That's that you know,
that's that Jiminy cricket on your shoulder telling you to
be careful. That's the same voice that that that has
been telling you all along to save, safe, save. It
can be hard to tamp that voice down and turn
that freighter around psychologically, which is a very slow process
(30:04):
to spending your assets from putting nuts away for the winner.
So the difference between mathematically fine and being truly financially free,
Tim is confidence. So it sounds like you just need
to go through your plan some more, and who knows,
maybe the advisor is missing something.
Speaker 4 (30:17):
We're all humans. Sometimes things don't go well.
Speaker 5 (30:19):
So if there's something you mathematically agree with, pinpoint that
for the advisor and ask them to explain it again
and again until you understand it. But again, that's the
difference between mathematically fine and financially free is confidence. Yes,
I see this plan, and I understand that things the
light doesn't always work out that way. But I have
stress tested this plan several different times for many reasons,
(30:40):
and now I feel confident that anything crazy that comes
out of left field we can handle.
Speaker 4 (30:44):
Confidence is the difference.
Speaker 5 (30:45):
Tim David in Blue Ash David has a question for you, Bob,
and he says, we always talk about being diversified. But
is it possible to be too diversified, and if so,
what does that look like?
Speaker 1 (30:54):
Bob Well David, The most common situation we come across is,
you know, people feel diversified, but they might have you know,
thirteen to seventeen different large cap mutual funds or ETFs,
either in their retirement plan or in their broker's account.
They've just been collecting these products over time, and people
have the sense of, you know, the more funds or
(31:17):
investment options I own, I'm automatically diversified. Well, true diversification
is having some non correlated asset classes to complement, you know,
in my example, the large cap growth positions, so a
little bit of bonds, a little bit of small cap,
a little bit of international, maybe some private equity, maybe
(31:37):
some buffer ETFs thing. You know. The whole idea behind
having a long term uh diversified portfolio is to have
a portfolio that over time gives you the highest rate
of return per unit of risk. That's what that modern
portfolio theory that you know, all financial advisors should be
modeling portfolios after it. That's what that's how and why
(31:59):
it works. So we have to define what diversified means,
and the only way to do that is kind of
look under the hood and see what you actually own.
But that's my answer. Oftentimes people feel diversified by having
a bunch of options in one particular asset class, and
that's where you might feel like you're diversified, but you're
(32:21):
really not. Hope that helps, all right, Eric and Fort
Mitchell says, my company just offered me restricted stock units,
and I don't fully understand how they're taxed. How do
I build a plan around something like that that fluctuates
in value?
Speaker 5 (32:35):
Bron So, first off, congratulations, because you obviously you work
for a company it's been successful enough it wants to
reward its employees by giving them a little piece of
the action.
Speaker 4 (32:43):
So that's fantastic.
Speaker 5 (32:44):
So those can be an excellent form of compensation, But
they do have unique tax and planning challenges because their
value depends on one company's stock price, and there's just
no way to tell what direction one company is going
to go or what the market's going to do to it.
Speaker 4 (32:58):
So, but here are the facts.
Speaker 5 (33:00):
When you're granted those restricted stocks units, you don't owe
any taxes yet because you technically don't own anything they're
restricted until they're not, so they're just a promise, so
that transaction at the very beginning is not a taxable one.
They all have a vesting date, though, and once they
vest they hit that date.
Speaker 4 (33:15):
Now they're yours.
Speaker 5 (33:16):
Now the value of them is treated as ordinary income,
just as if they had increased your salary a little bit.
So the value of those shares are going to be
added to your W two income. Federal, state, and payroll
taxes are going to apply, and they will be withheld.
Oftentimes you'll have a choice though through what they call
share withholding, or they're going to sell some shares to
cover and then after those vests, so you've paid income
(33:37):
taxes for what you're sitting on now, you just down stock. Now,
you just down shares as if you had bought them
on your own. And if you sell them within a
year of having been granted them, then if there's any
gains above what you paid for when they were when
they came unvested, then you're going to pay income taxes
on that as a short term gain. If you sit
on them for more than a year, now you get
the lower capital gains. Right now, it's always a crapshoot
(33:59):
as to whether you should hold sit on them. Only
you'll know your company better than anybody else. Treat it
like an investment hit if you had bought it on
your own or inherit it or whatever, then think about it.
That's something you want to keep for the long term.
But hopefully that helps with some of the questions you
might have had out there. And again, congratulations for the
future windfall. So moving on to Karen and Loveland, Karen
says they've been careful with money, but now they're in
(34:20):
that sandwich generation where they're helping. They're spending more helping
their own aging parents, not to mention keeping their own
situation afloat.
Speaker 4 (34:26):
So how do you how do you spread it all out?
Speaker 1 (34:28):
Bob?
Speaker 5 (34:28):
How do you support those aging parents without sacrificing their
own security?
Speaker 1 (34:33):
Great question, Karen, here's my answer. Don't just leave it
to chance. And here's what I mean. First, build build
a financial plan and update it if you already have one,
and run some different scenarios. What do our aging parents?
You know, what are they going to we think we're
going to need and for how long? And put those
expenses into your plan and then factor in your own
(34:55):
social security. As you pointed out your question, have a plan,
run different scenarios, and stress test that plan and see
how it's gonna work. And usually one of three things
you know might need to happen. You know, if you
and or your spouse might need to work maybe one
or two or three extra years in order to pull
(35:15):
all this off. You might have to spend a little
bit less money in order to help your aging parents.
There's a lot of different variables there, and the important
thing is get out in front of it. Now. Run
those scenarios so you have more control over those levers
that you pull. And then i'd say the last thing
is communication. You know, if you get to the point
(35:37):
where you can't just bankroll everything for your aging parents,
the sooner you can sit down and have those tough
conversations right now, the better everything's gonna be, you know,
down the road. I don't know. If you have siblings
that are in the mix, you know it might involve
some communication with them. But that's my answer. Run a
good financial plan and then communicate. Communicate, communicate. Don't just
(36:00):
hope all this works out at the end. You'll make
some adjustments now when you have the ability to do so. Next,
I've got my two cents on picking a financial advisor.
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the talk station.
Speaker 7 (36:17):
In order to love your dream doesn't always involve a
pay cut, invest your time. Sometimes it involves a pay
cut to get moving and then move.
Speaker 4 (36:24):
Up and invested in your future.
Speaker 7 (36:26):
But I would want a path to make more than
I made, not less than I made. Dave Ramsey, There's
a lot of people need help in this world. I
want you to get clear. I want you to spend
some time very carefully going through what are your talents,
what are your passions, what are your skills? You know,
what is it you value?
Speaker 3 (36:42):
Weekdays at seven on fifty five KRZ The Toxic.
Speaker 1 (36:47):
I am so worried that next month I have to
choose between groceries for my kids or gas for my car.
Speaker 3 (36:52):
Talk about it here fifty five krs the talk Station.
Speaker 1 (37:00):
Listening to Simply Money. He thought about all Worth Financial
on Bob Spondseller along with Brian James. All Right, Brian,
we talk all the time about having a properly diversified
investment portfolio, but you know, from time to time we
run into folks that think it's a good idea to
be diversified in terms of the number of quote unquote
(37:20):
financial advisors they have, and I want to touch on
that a little bit. I rarely, if ever, find this
to be a good idea where people are getting ideas
from four to five different quote unquote advisors, when really
all they are is just people that they've bought product
from over the years. And you know, at the end
(37:42):
of the day, a lot of these clients aren't really
looking for an advisor. They're looking for a bunch of
different ideas and they want to be their own advisors.
So the analogy I want to use is, you know,
because of a heart valve, you know thing that I
was born with.
Speaker 2 (37:58):
Uh.
Speaker 1 (37:58):
I've seen a cardiologist for shoot thirty years now, and
when it comes time to having somebody keep me alive,
I'm not googling it. I'm not talking to six different cardiologists.
I asked around. I found a good one and then
I let him manage my care over the long term.
And I don't need to get into all the details,
(38:19):
but he's done a wonderful job of keeping my heart healthy.
It's because I found a good cardiologist. I trusted him,
I trusted his process. I trusted the fact that he
has always ordinated my care with my primary physician and
it's been a good outcome. The same thing should apply
to your financial advisor. A big thing that we run into,
(38:44):
Brian is there's no coordination from a tax standpoint, you know,
with a client CPA or even proactive tax strategy. And
I'll say, if even if you've got five different quote
unquote advisors out there and no one's doing an proactive
tax planning and coordinating with your CPA, you do not
(39:04):
have a good financial plan. You got a couple of
good ideas, you got a bunch of people trying to
retain wallet share in terms of your assets under management,
but you really don't have a good financial plan. So yeah,
go John.
Speaker 5 (39:18):
I want to lean on your your your cardiologist example there,
because I've had a similar situation where I've got a
minor thing going on that is a'ty to worry about,
but I got to pay attention to it. And when
it first surfaced about fifteen years ago, I went to
the closest place because I really wasn't I didn't know
how to think about this stuff, and It took probably
about six months before I realized that that was not
their specialty, and they were kind of flailing a little
(39:38):
bit trying to figure out that this wasn't a traditional cardiologist.
It was somebody recommended to me by by the hospital
for the in the er that I went to. And
I realized that, you know what, I really need somebody
who does this all day long and that's all that
they do. And I figured out that that was a
very different experience, and they got me squared away and
I go every few years and they say, go away,
you're in pretty good health, but let us know anything
(39:59):
else happens, which is a goo thing. Same thing with
financial advisors. Figure out what your challenges are. If your
financial advisor isn't teaching you things that you didn't already know,
they're not doing you any good.
Speaker 4 (40:08):
They're probably just selling you product they should be. It shouldn't.
Speaker 5 (40:12):
A financial advisor should never tell you exactly precisely, here's
what you need to do, in black and white terms.
If you have built a solid financial situation for yourself,
that should mean you have options, and options come with
pros and cons, and it's not for an advisor to
tell you which to do. It's for the advisor to
help you clearly understand the pros and cons because they're
all good ideas. One of them will be better than
the others. That is your call, but you need an
(40:33):
advisor there to tell you which to do. It's never
black and white. When you've reached a level of financial success.
Speaker 1 (40:39):
Yeah, and to use your example, and it's one that
I lived through with that cardiologist as well. I mean,
you get to a certain point where I had a
high degree of respect for someone that says, hey, I've
reached the limits of what I'm able to do personally.
I'm going to refer you to this specialist over here.
That's good advice. Thanks for listening tonight. You've been listening
to Simply presented by all Worth Financial on fifty five KRC,
(41:02):
the talk station.
Speaker 6 (41:04):
I'm super grateful that I was able to leave him
financially giving thanks.
Speaker 1 (41:09):
It wasn't a good situation for me and my kids,
and I just have you to think for that.
Speaker 4 (41:14):
For all the advice I told myself I wasn't going
to cry, and.
Speaker 1 (41:17):
The guidance to make good decisions.
Speaker 7 (41:19):
You got control of your life and I gave you
choices I'm proud of you.
Speaker 1 (41:22):
The Ramsey Show. It's definitely hard to get started, but
once you get going, it's super duper easy to pack
your lunch every day and.
Speaker 3 (41:29):
Not drink Starbucks. Weekdays at seven on fifty five KRC,
The Talk Stay
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