January 9, 2026 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian reveal why your retirement plan may no longer match your reality—especially after three strong years in the market and inflation sticking around 3%. Then, the millionaire’s income problem: building wealth was the easy part—how you draw it down could make or break your retirement. The guys dig into Roth ladders, tax-smart income planning, and whether muni bonds or dividend portfolios really make sense at your tax bracket. Also tonight: Why your Social Security claiming strategy isn’t “set it and forget it,” how illiquid real estate could wreck your retirement flexibility, and the honest conversation every couple needs to have: “What happens if I die first?” Plus, practical tips on modernizing inherited investments, stress-testing DIY portfolios, and whether retiring overseas is really the dream—or a future headache.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Tonight, your retirement number just changed, but have you adjusted?
You're listening to simply money, said by all Worth Financial.
I'm Bob Sponseller along with Brian James Well. Twenty twenty
five was another big year. Markets were up nicely again
and while inflation stayed around three percent, and I know
we're talking about how sticky it still is. You know,
(00:29):
the markets have gone on up for the third year
now in a row, and that combination may have changed
the maths on your retirement plan, whether you realize it
or not. And then there are those who have a
financial plan that they haven't looked at or changed or
adjusted perhaps four years. That could be a problem. And
it's really the point of tonight's segment. Brian walk us
(00:52):
through what we're talking about here.
Speaker 2 (00:54):
Well, by let's start with inflation stayed steady right around
three percent all year. Not scary and tear terrifying like
it wasn't twenty two when we hit nine percent and
everybody got excited about ibonds briefly, but still enough to
erode our purchasing power.
Speaker 3 (01:07):
Right, three percent isn't what we want. We really want
to be closer to the load to low twos.
Speaker 2 (01:12):
If we could be there at all, and we're in
the ballpark, which means it's not time to panic about it.
Speaker 3 (01:16):
But at the same time, it's having an impact.
Speaker 2 (01:18):
So you know, for example, if you're a couple and
you've saved three million dollars and you're targeting about one
hundred and fifty thousand dollars in retirement spending in twenty twenty,
that might have been enough to get you through for
a thirty year retirement, but with that high inflation that
came immediately after that and then kind of sticking around
now that same lifestyle costs even more and you don't
even realize it, right, two percent three percent increase on
(01:39):
one hundred and fifty million dollars is almost another ten
million off off of your base rate there.
Speaker 3 (01:45):
Yeah.
Speaker 1 (01:45):
Can I see that come up periodically with client reviews, Brian,
I'm sure you do too. I mean, we build these
plans and we have these spending numbers in place, and
people occasionally come in as say, man, I just did
not expect this or that to be expect to it
as it is, and therefore we have to adjust those numbers.
And for those folks that are just sticking with that,
(02:07):
I'll call it decades. All rule of thumb of hey,
just take a four percent withdraw rate on your money
and set it and forget it. I think that's oversimplifying things,
to be sure, and because of some of the sticky inflation,
it could be draining your purchase eat power and therefore
your portfolio over time if you don't make some adjustments.
Speaker 3 (02:28):
That's exactly right.
Speaker 2 (02:29):
So you know, we've talked for a very long time
about what what can we get away with? And the
important part is the first of all, I think most
people just really haven't even taken.
Speaker 3 (02:38):
The time necessarily figure out what they do need.
Speaker 2 (02:41):
So you know, if you if you have to understand,
you know exactly what the needs are and how to
combine them with the resources, then you'll understand where that
gap is and that door swings both ways. There are
people out there who who have no idea what they need,
and there are people out there who haven't taken the
time to simply sit down and look at it, and
therefore just assume that there's not enough and they and
(03:02):
they wind up you know, working a heck of a
lot longer than they need to. So that's the point
of a financial plan, where we make sure that you
understand what the resources are and how you're going to
meet the gaps with whatever you've built on your own
between your needs and your Social Security pensions and all
those kinds of things.
Speaker 1 (03:16):
Yeah, and I'll pound the table off that point one
more time. I feel like I do it once a
week right now. But I continue to be shocked at
the number of people that come into the office. And
I'm talking about people that are worth three four five
million dollars and they have no idea what they actually spend.
And we joke around a little bit about it, you know,
I said, I don't care how much you spend on
a haircut or a pick a ball racket or anything
(03:39):
like that. Those are just rounding airrors. But we do
need to at least know what you're spending in aggregate,
you know, on a monthly basis or an annual basis,
just to make sure we keep this financial plan on track.
That and that's just you know, one of my call
outs here for twenty twenty six for those that haven't
looked at this in a while. Make sure you just
(04:00):
take stock of what you're gonna need or want in
the way of income and make sure your financial plan
is updated accordingly. All right, Brian, let's switch gears to
social Security, because with a lot of these tax law
changes and the nuances of some of the senior deductions
and ARMA taxes and everything else out there, you really
do need to look at that social security claiming strategy
(04:24):
rather than just assume, Wow, I'm gonna take it at
sixty two or sixty five and not even look at
the numbers.
Speaker 3 (04:29):
Yeah, that's right.
Speaker 2 (04:30):
So if your number has changed, meaning if you've determined
that you've got a different a dollar amount in mind
that is your go time, then that also is going
to affect your social security claiming strategy. And it's not
always about delaying to seventy anymore. Right, So let's set
the table here for those who might not be quite
as up to speed. The earliest anybody can file for
(04:50):
Social Security is age sixty two. That is the lowest
check that you'll ever get, of course, but you can
if you want to. The latest you can file age seventy. Now,
what that means is that there's no benefit to waiting
beyond seventy anymore. But between sixty two and seventy you
literally get an eight percent increase and you can see
this on your Social Security report. You can work in
(05:11):
a math out for yourself eight percent increase for simply
delaying every single year, and better than that, Bob, It's
actually not an annual increase. It's a monthly increase. So
if you wait six months, then you're going to get
a four percent increase for example. So that means there
are benefits and drawbacks to doing this. You know a
lot of people might you might have more room to
draw from your investments a little earlier, or let your
(05:31):
benefits continue to grow, meaning still retire early, but rely
on your own investments and savings and let those benefits
continue to grow by simply not filing for them. Or
if you're trying to reduce your RMD require minimum distribution
exposure a little bit later, you might actually want to
take Social Security sooner and then start converting those dollars
while you're in those lower brackets. There's a lot of
(05:51):
lot of different pros and cons, a lot of different
paths that the people can take here. But again it's first.
It all starts with what do we need to make
sure the ship floats? You got to pay your bills first,
paying your bills and generating the income necessary to do
that will put you in a floor bracket anyway, right,
nobody's gonna avoid that. Then on top of that you
can layer possible wroth conversions, and then also the decision
(06:13):
to look into whether you want to file for Social
Security now versus later.
Speaker 3 (06:16):
When I do these.
Speaker 2 (06:17):
Analyzes for clients to help them to determine what is
the right situation for them, what we look at this
is for people who you know, are in a situation
where we've kind of won the game, there's gonna be enough.
But that actually makes things a little more complicated because
now we're comparing good versus better versus best, as opposed
to bad idea.
Speaker 3 (06:33):
Versus good idea.
Speaker 2 (06:34):
That is a lot harder because now we've got to
make a decision between the three. The way I look
at it there is after we've modeled all those outcomes,
is when in a given situation, what gives me the
biggest pile of money in the future, taking Social Security
earlier or taking it later, that's the best way to
determine what the You know, there's a lot of math involved,
but to me, that's the best way to determine the
(06:55):
most the most advantageous will.
Speaker 3 (06:57):
Be time to file for Social Security for a given couple.
Speaker 1 (07:00):
All right, Brian, I'm gonna put you on the spot
here for a second.
Speaker 3 (07:02):
Are you ready? Sure?
Speaker 1 (07:04):
Hit me all right, because I know you're an absolute
ninja when it comes to these wroth conversion strategies. So
you know, you just you just spewed out a lot
of things to think about, a lot of math, a
lot of moving parts. Can you walk us through an
actual client meeting that you've conducted, say over the last
six to twelve months, where maybe walking in the door,
(07:25):
some of the presuppositions that perhaps you and the client
had about when to take social Security actually changed once
you look looked under the hood, put the car up
on the rack, so to speak. It took a look
at what the impact is to taking it at sixty two,
sixty five, and seventy and and maybe some surprises that
came out of that discussion.
Speaker 3 (07:46):
Yeah. It's one thing to.
Speaker 2 (07:47):
Watch TikTok videos and Instagram videos of other people using
random numbers to make these calculations. But it's another thing
entirely to see your own iras and your own social
Security reports and your own dat figured into one plan. Right,
None of this stuff is a black and white everybody
should go do this. If that was the case, then
there would then we could all rely on TikTok videos
(08:09):
because the advice would be the same for absolutely everybody.
But the situation differs greatly, and the difference between the
two in terms of timing of social Security tends to
be what do your assets look like?
Speaker 3 (08:18):
Otherwise, if you have the ability to draw.
Speaker 2 (08:21):
On assets that are either wroth or or in a
taxable account meaning not pre pre tax IRA, not pre
tax four Okay, then that tends to favor Okay, go
ahead and spend your investments down a little bit and
push social Security out. On the other hand, if all
of your assets or the majority of them are pre tax,
then the math tends to favor turn on social Security later,
because if all that's going to be ordinarily income taxed,
(08:44):
and that's going to take a larger chunk earlier in
your life than it should. That's the That's the most
basic rule of thumb that I can give, is that
you're if you're gonna be relying on pre tax assets,
that's going to favor filing for Social Security earlier. And
then the opposite is true as well. But that's not
even a rule of thumb. I don't believe in rules
of thumb. But that's usually the pivot point in the math.
But again, what we do is most people will come
(09:04):
in and they've either got the idea that I'm going
to go at sixty two because it's going away, which
that's that's a whole fallacy anyway, or they're gonna say
I'm going to wait till seventy if I can, because
then I'll get the biggest check ever.
Speaker 3 (09:15):
Well, a lot of times, the phrase I always use
is that I have.
Speaker 2 (09:19):
A lot more fifty five year olds to talk about
waiting till seventy than sixty five year olds are. Our
thinking tends to change as we age, and you start
not to want, not wanting to fight the government so
much anymore, and just to get what's there while it's
there because of the way your life is, you know,
is going so yeah, a lot of.
Speaker 1 (09:34):
The money, Show me the money, Brian, give it to me. Now,
that's all right, right, Hey, another topic to bring up,
you know, just another thing that comes up and we
need to address. This is just the whole issue of
real estate and illiquidity. You know, Brian, you and I
both have clients that went out and bought that vacation home,
you know, tied up a million or more dollars in
(09:55):
various pieces of real estate, whether it be rental properties,
lake houses, some even and invest in commercial buildings. But
the question here, if you update your financial plan and
take the time to do it, the question you got
to ask is can you access that money in a
timely manner when you actually need it, Because, let's face it,
during COVID and the pandemic, you know, we could flip
(10:18):
real estate in days, if not hours, and oftentimes at
a handsome profit. Things have slowed down a little bit. Rates,
interest rates and buyer demands have changed. And if real
estate is part of your retirement equation, the money you're
relying on to replace your paycheck in retirement, have you
thought of a plan b if we have a market downturn,
(10:41):
and do you have a plan to access liquidity. It's
something we need to continue to talk to folks about,
you know, especially after this big three year run up
in the market, because we talk about all the time.
It's not a matter of if, it's a matter of
when we get another correction in the stock market or
recession or something else coming down the pike that we
(11:01):
can't even guess or know about today.
Speaker 3 (11:04):
That's absolutely true.
Speaker 2 (11:05):
And then the important point is hopefully you're already in
a position to take that on. Because we just said
the same thing a year ago, We just said the
same thing two years ago. The market's been at a
peak for basically non stop for the last three years.
Speaker 3 (11:16):
So yes, there's always.
Speaker 2 (11:17):
Something coming around the corner, but it's not necessarily the
next corner. So let's just make sure that our plan
is in a position where if it happens tomorrow, that's
not that.
Speaker 3 (11:25):
Big of a deal.
Speaker 2 (11:25):
And the way we do that is by, just like
Bob said, make sure you've got liquidity. If that money
is tied up in real estate, you know, for folks
out there with a paid off home and maybe thinking
about selling it kind of sort of maybe someday, but
haven't really pulled the trigger. Make sure you have a
home equity line of credit in place. Nobody wants to
borrow against their house. But at the same time, if
we go through another twenty two where the stock market
is down, your investments are down, you're going to be
(11:47):
a lot happier having borrowed against your house, maybe ten
twenty thousand dollars or something, just just a deal with
a short term situation and then as things recover.
Speaker 3 (11:55):
Pay it off.
Speaker 2 (11:55):
It's that's something like that is not going to cost
you nearly as much an interest as you might think.
Lot of people come to this and they think, I
don't want to bar against the house. That's a mortgage,
that's a thirty year mortgage with eighty percent of my house.
Speaker 3 (12:05):
No it's not.
Speaker 2 (12:06):
It's a credit card against your house that sits at
zero until you use it. It's the best kind of
debt you could give yourself access to in an emergency.
And again, the whole point is not to use it.
The point is to have a parachute. They have parachutes
and airplanes that I hope I never use, but I'm
glad they're in there.
Speaker 1 (12:21):
Here's the all Worth advice. Your retirement plan is not
just a number. It's a constantly moving target. And if
you haven't adjusted it lately, now now's the time to
dust it off and take a look. Coming up next,
we tackled the millionaire's income problem, because pulling money out
the wrong way can cost you big in taxes, penalties,
(12:42):
and perhaps lost opportunities. You're listening to Simply Money presented
by all Worth Financial on fifty five KRC the talk station.
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. Are you still
picking your own stocks? Wondering how to turn company shares
(13:04):
into real retirement income? From withdrawal strategies to covered call ETFs.
We tackle smart investing moves of all kinds straight ahead
at six forty three. Let's paint a picture here. You
did everything right, She saved diligently, You invested wisely, and
now you're sitting on say three million, five million, shoot,
(13:25):
maybe even eight million dollars heading into retirement. But here's
the twist. No one tells you about. Getting money out
of your portfolio is a whole lot trickier than putting
it in. We'll call this the millionaire's income problem if
we can call an eight million dollar net worth of problem. Brian,
what are we talking about here?
Speaker 2 (13:44):
Well, once you stop getting that paycheck from some employer,
you know, like what I like to call other people's money.
Oh pm, Well, you got to create your own. Now
it's your own money. The risk isn't just running out
of money, it's triggering massive tax bills, Medicare penalties, maybe
even undoing decades of careful investing you've worked very hard
to put in place. So we're gonna go through a
few strategies today that you can go you can use
(14:04):
to turn income on the smart way. Here's a fun one.
ROTH conversion ladders after retirement. We see this all the time.
Clients retire at sixty two and are looking for more
tax efficient Man, I have a few low income tax
years here before social Security and rm ds kick in.
So if I'm retired, I don't have salary anymore. That
means a significant source of income and income taxation has
(14:25):
now gone away.
Speaker 3 (14:26):
And what else can we do? So this is a
tax planning window.
Speaker 2 (14:30):
These are the best years to convert money from traditional
to a ROTH. Of course, Yes, you're gonna you're paying taxes, right,
you are taking money from pre tax to post tax.
Of course, that means the only way to get there
is to pay taxes.
Speaker 3 (14:42):
Right.
Speaker 2 (14:42):
A lot of people will come in and they'll say, Hey,
I got this pile of money, I want to poof
turn it into a roth.
Speaker 3 (14:46):
Ira.
Speaker 2 (14:47):
Well that's not that that is a math calculation. It
is very very much a sacrifice in exchange for a
game later. It can be a great idea, but don't
come in thinking it's just, hey, I'm gonna make everything
a wroth.
Speaker 3 (14:56):
Ira doesn't work that way.
Speaker 2 (14:58):
But anyway, if it does, if you do the those conversions,
of course that money is now growing tax free and
it comes out tax free. Also will not count against
Medicare premium thresholds via IRMA.
Speaker 3 (15:07):
That is a big big deal.
Speaker 2 (15:08):
Your requirementimum distributions out of your pre tax I rays,
those absolutely will affect your Medicare premiums.
Speaker 1 (15:15):
Let's talk about another strategy, evaluating municipal bonds versus dividend portfolios.
You know, from when it comes to generating income. And
let's face it, a lot of folks have built a
lot of wealth the right way. They have invested diligently
and have been very disciplined, and they've done those dividend
reinvestments for years and years, if not decades and decades,
(15:37):
and they now want to say, hey, we want to
win from all this work we put in. Let's just
turn on the income stick it from dividend stocks. And
that's not a bad strategy unless they mess with your
tax efficiency if you're not careful. And this is where
you know, and Brian, you know, bonds tend to be
a very boring topic that a lot of people don't
(15:58):
understand and they don't take the time time to evaluate.
For higher networth, high income people. Here we're talking about
municipal bonds. It's something to at least consider for folks
in high tax brackets. The interest, just as a reminder,
from municipal bonds is generally tax free at the federal level,
and if you buy in state bonds, they're often tax
(16:19):
state tax free as well. So it's it's a good
time to sit down and look at the after tax
yield on what you could get from you know, let's
be real here, some safer income alternatives like municipal bonds
versus just taking dividend income from stocks, where the stocks
can become volatile. You know, they will move up and
(16:41):
down and sometimes violently. And if you just rely on
dividends from stocks to generate the income that you need,
you might end up with a more way, more volatile
portfolio and retirement than you want to hold.
Speaker 2 (16:55):
You could too And while we're talking about municipal bonds, Bob,
I want to throw another thought out there. I frequently
we'll see people who maybe are in a low bracket
right now because they just don't have any They don't
have much in the way of income. They might have
millions in their retirement plans and sitting in the bank
and all that, but they haven't turned on any of
their income streams. And then I'll see that they're sitting
on a bunch of municipal bonds that are maybe yielding
(17:15):
them three percent or something like that, when they could
be in a corporate bond portfolio that's spitting out five percent.
So the idea is not to poke the irs in
the eye by not paying any taxes. If you're in
a low bracket and you have municipal bonds, you're leaving
a lot of money on the table. I'd rather pay
taxes on five percent worth of income and get four net,
then get three without paying any taxes at all. So
(17:38):
be sure you understand the purpose of your municipal bond.
Speaker 3 (17:40):
I'll be honest.
Speaker 2 (17:40):
Unless you're in the thirty two percent bracket, which is
close to four hundred thousand for a married couple, or
two hundred or So for an individual, if you're in
the thirty two percent bracket, then yes, you're gonna see
your tax equivalent yields be worthwhile. But if you're underneath that,
unis might not be helping you as much as are hurt.
Speaker 1 (17:56):
Yeah, great point. And for folks with larger portfolios, this
is where a laddered bond strategy with individual bonds makes
a lot of sense because you can actually see how
the sausage is made, you can actually see the bond
you own, you can stagger the maturities, so you're not
locking in anything for the long term because things do
and will change in terms of tax policy, interest rates,
(18:19):
all of that. So laddered bond portfolios, and as you said,
mixing and matching various sources of that bond income can
be a great thing to take a look at. Let's
talk about real estate, Brian. We occasionally have people that
want to live off of rental income from you know,
rental homes that they've acquired over the years, and they
are used to fantastic cash flow. There are pros and
(18:42):
cons to taking that strategy into retirement.
Speaker 2 (18:46):
So yeah, a rental income, of course, can be a
fantastic source of cash flow, right, there's no income like
passive income. However, those of you who own real estate
or have in the past, you know there is nothing
passive about owning rental real estate. You got maintenance, you've
got vacancies, and worst of all, you've got the human
being communications with the tenants. Those can all create headaches.
(19:07):
There's no timing, there's no rationality to them other than
the way the universe works. All this stuff tends to
blow up when you don't have the time for it
to blow up. So this is where you know, people
might consider hiring a property manager or maybe shifting to
just plain investments like real estate investment trusts also known
as rets for some exposure real estate without taking the
toilet plumbing responsibilities. So these can be okay publicly traded reads.
(19:28):
Private real estate funds can throw off steady income and
you know, systematically and predictably, and they give you some
diversification lasso across a lot of things, commercial properties, apartments,
business locations, and those kinds of things. Not having to
deal with that phone call about the broken water heater
or whatever. Rather than locking money into an annuity. Now
this can be a better alternative and annuities are okay,
(19:49):
but they can also limit your flexibility. They've got high
fees involved and can underperform. You can design your own
income stream through these different portfolio pieces, but you have
to understand how all the puzzle pieces together, the benefits
you're getting and the sacrifices you're making.
Speaker 3 (20:04):
Here's the all Worth advice.
Speaker 1 (20:05):
Just because you're wealthy doesn't mean you can't make sometimes
very expensive mistakes. Income planning is where fortunes are either
preserved or slowly drained. This is a hard conversation, but
maybe the most important one you can ever have with
your spouse. What happens if I die first? How to
(20:25):
prepare your partner emotionally and financially. Next, you're listening to
Simply Money presented by all Worth Financial on fifty five
KRC the talk station. You're listening to Simply Money presented
by all Worth Financial on Bob's fond Seller along with
Brian James. Well, this is one of those segments that
(20:46):
might be uncomfortable to hear, but it might be exactly
the one you'll be grateful you listen to later on
down the road. We're gonna call this the if I
die First segment, and it's not meant to be drum,
it's meant to be honest and practical. This is important stuff, Brian,
and it's an important topic to get out in front
(21:07):
of you and I have both lived through this situation
with clients many times.
Speaker 3 (21:12):
What are we talking about here, Well, this is important stuff.
Speaker 2 (21:15):
So if you're in a partnership, maybe a marriage, or
some other kind of domestic arrangement, well, somebody's going to
go first. And unfortunately, whether you're the money spouse, the
one who pays attention and makes the decisions and knows
where all the bodies are buried, or the one who
prefers to stay out of the financial details and only
be informed of the big picture, you know, like what
what we call, like to call the CEO versus the
CFO in a household.
Speaker 3 (21:35):
Well, we've seen far too many.
Speaker 2 (21:36):
Cases where that surviving spouse is not only left grieving,
which is hard enough as it is, but completely financially unprepared,
which can just be overwhelming to go through all that
at once. So let's talk about the you know, the
different roles that spouses tend to play that we see
in these planning relationships that we have, Well, one spouse,
and it's usually but this is going to sound sexist,
(21:56):
this is the way it works. It's usually, but not always,
the husbandand one spouse is normally the one who really
wants to take care of I would say this is
probably three out of four times one spouse wants to
take care of all the finances, the other one wants
nothing to do with it. And this is a relationship
that actually works pretty well. You know, show me two
people who want to be neck deep in every part
of the household, and I'll show you two people aren't
gonna stay married.
Speaker 3 (22:17):
For very long.
Speaker 2 (22:18):
Separation of duties is very important, But that's the one
who handles the investments, taxes, pays the bills, runs the budget.
The other spouse perfectly capable of it, but just isn't
involved and therefore doesn't know the day to day and
there's gonna be a run up to kind of a
learning curve to understanding how that household worked. So this
can be by choice. Maybe they chose that, or maybe
they were just told don't worry, I'll take care of it,
and they didn't push back at the time. Well, the
(22:39):
risk here is that if the money spouse dies first,
obviously there's enough going on with the grief, but also
this person is suddenly a CFO when maybe they've never
had that role in their entire lives.
Speaker 1 (22:49):
Brian, I've told this story at least once on this show,
and I think it's worth repeating. One of my first
ever clients, and they were wonderful people, wonderful marriage. But
you know, they really did live, you know, in what
I would call the Flintstone generation. The husband did everything.
The wife was just a great mother and took care
of the home, you know, more of an old time
(23:11):
traditional way of doing things. And all this husband told
his wife was if I die, call Bob. Well, she
called me on my cell phone at four fifteen in
the morning one day and said, you know, my husband
died and and these people, Brian, they were worth several
million dollars back in nineteen ninety two, so that's a
lot of money. And her first and only question to
(23:35):
me was do I have enough money to go down
to the UDF and buy some eggs and milk. And
it was a very sad conversation to have because to
your point that you just made, she's grieving the loss
of her husband. She has no idea whether she's penniless
and can even afford groceries that day. That is a
very sad situation to put someone in. It wasn't it
(23:58):
wasn't done intentionally. Again, wonderful marriage, but there was no
planning put in place whatsoever to prepare this woman to
be the new financial CEO over home. It was a
sad I will never forget that phone call, and I
try to help people avoid that situation.
Speaker 3 (24:16):
At all costs.
Speaker 1 (24:17):
So let's pivot to what we should be doing for
our loved ones.
Speaker 2 (24:20):
So the very first thing is make sure everybody knows
where all this stuff is, right, don't overthink this. The
very first thing we need to do is just make
sure we're clear where the inventory is. So maybe something
like a financial instruction manual that would contain a list
of all your investment accounts, bank accounts, maybe the.
Speaker 3 (24:37):
Last year end statement. It can be this easy.
Speaker 2 (24:39):
Every December, grab that or January when the statements show up,
grab that statement, throw.
Speaker 3 (24:43):
It in a folder and you don't have to worry.
You don't even have to look at it.
Speaker 2 (24:46):
You know, even if this is just a digital folder
or something on dropbox, you don't even have to look
at it's just a place where you can say, oh,
here's what it was, you know whatever December. This account
existed at one point and then you're surviving spouse and
whoever is helping them organize things will know where to look.
They can always go get the latest information, but they
just need to know that the account exists. Passwords, and
this is a little bit tougher because I used to
(25:09):
try this years ago when the Internet was first a thing,
but passwords nowadays changed so often there's just no way
and it's actually dangerous to be writing them down on
a piece of paper. Or what really frightens me, bob
the shared spreadsheet in Google docs or something like that
that has the keys to your kingdom somewhere out there online.
But you know, so there's a little tougher. Different things
have to happen there. I would suggest again, just just
(25:30):
make sure everybody knows where the accounts are and the
individuals can contact those financial institutions one by one and
make sure they get the appropriate access.
Speaker 3 (25:39):
But here's an important one.
Speaker 2 (25:40):
If there's a financial advisor in the mix, where if
there's some central point who knows where all this stuff is,
please make sure your spouse knows who that person is
and ideally can pick them out of a crowd. I
do have a handful of clients where the non money
spouse is so far away from the money they don't
even want to come in and meet me. And that
scares me to death because this person is going to
call me in tears wanting to know if they can
afford eggs. That's not a good thing. Make sure your
(26:02):
spouse knows where your advisor is. You're a state attorney,
your CPA, and anybody else you're working with, business cards
in a fold or something like that.
Speaker 1 (26:09):
Well, I'm gonna jump on that point you just made
because I think it's a critical one. You know, it's
not just about money and passwords and account numbers. Both
spouses or both partners should know these advisors, not just
know their names or how to pick them out of
a lineup. They should know them a little bit. They
should have attended a few meetings because at the end
of the day, when that spouse who passes away is
(26:31):
no longer here, it is going to come down to
do I connect with these advisors and the surviving spouse.
If they have no relationship with those advisors, they haven't
built any trust. They haven't gotten to know one another.
Things can change in a hurry, and the whole plan
that this couple put together for decades could get unwound
(26:52):
overnight if you fall into the hands of a you know,
unscrupulous advisor, or just get bad advice, or get non
informed advice because there was not a relationship for him.
You can tell I'm on my high horse here. I
think this is a really important thing. Both spouses need
to attend these meetings, even if one spouse has no
(27:12):
interest in the numbers and the spreadsheets and all that,
simply to feel comfort level with who the advisory team
is because it will come into play very quickly, and
it's important.
Speaker 3 (27:24):
It's important to get it.
Speaker 2 (27:25):
Even if you don't understand the numbers or how it
go works together and you hate hate this stuff, you
should get a vibe from the advisor do you like
them or not? Because that person one day was going
to have to be your partner, whether you like it
or not.
Speaker 1 (27:37):
Here's the all Worth advice. The best gift you can
leave your spouse isn't just money. It's clarity, stock options,
smarter withdraws, and income strategies. All of the above Coming
up next, we break down real world money moves for
investors with more to lose if they don't plan accordingly.
(27:58):
You're listening to Simply Money present by all Worth Financial
on fifty five KRC, the talk station. You're listening to
Simply Money presented by all Worth Financial Unpop sponseller along
with Brian James. Do you have a financial question you'd
like for us to answer. There's a red button you
can click while you're listening to the show. If, if,
(28:20):
and only if you're listening to the show on the
iHeart app, simply record your question there and it will
come straight to us. All right, Brian, here's Allan from
Milford who says we inherited a whole mix of investments
from my parents and honestly, I don't know what half
of this stuff is. How do you modernize a portfolio
(28:41):
without completely blowing it up?
Speaker 2 (28:43):
Well, the first thing is don't rush into any decisions.
The biggest mistake that people often make is thinking you
gotta fix everything at once. This was mom and dad's portfolio.
This is a portfolio for little elderly people, and that's
not me. So I need to change everything right now today.
Speaker 3 (28:56):
You might not understand what it is.
Speaker 2 (28:58):
So start with a full invent every holding, every fun class,
all the stocks, most importantly cost basis, and understand how
the impact of this works. If those assets got to
step up in bases at death, that often gives you
it's going to give you a tax.
Speaker 3 (29:12):
Free reset button.
Speaker 2 (29:13):
Most of the stuff that is not inside of some
kind of retirement plan that should have come to you
in a taxable portfolio, which means it's as if you
bought it the day your benefactor passed away, so you
get at the moment you inherit it, you should be.
Speaker 3 (29:27):
At a pretty low cost basis. Don't let those run
forever though.
Speaker 2 (29:30):
Matter of fact, I look at those first, because people
will come in two years after the fact going well
I didn't really like these investments.
Speaker 3 (29:36):
I wanted to make some changes.
Speaker 2 (29:37):
Well they've gone up a bit, so now we have
taxes where if we had looked at it a little
more quickly, we could have made the adjustments that are
more appropriate before the tax bite happened.
Speaker 3 (29:46):
And then you'll put these into buckets.
Speaker 2 (29:47):
Right you might have keepers and stuff that you're not
sure about and stuff you're going to dump right away.
The keepers would be your low cost index funds, diverse
fight ETFs. Questionable stuff is anything with a high internal fee,
like expensive mutual funds, maybe old share classes B shares
or heaven Forbid C share or something like that. Those
might not make any sense, and then exit candidates would
be those little spinoffs. You know, everybody who has P
(30:09):
and G also got smuckers in a handful of other
little tiny positions. You might not want to deal with
that stuff at all. It's all gonna spit out little
tiny things, so tidy it up. But it's nothing to
be afraid of. You don't have to do it immediately.
But at the same time, don't let it go for twoe, three,
four or five years. It's not going to be very
efficient to handle it that way. Okay, moving on to Greg.
Greg's down in Fort Thomas loved the forts down there.
(30:29):
I always picked my own stocks. But now our portfolio
is get a little bigger and he's wondering if they've
got any blind spots. Well, how do you know when
doing it yourself becomes too risky?
Speaker 3 (30:39):
Well risk, Greg?
Speaker 1 (30:40):
It all comes down to do you have a financial plan?
In other words, what does your money need to do
for you? And win so you know, we start there,
do you have a financial plan and if not, maybe
think about getting one. In terms of stock picking, there's
nothing wrong with doing it yourself, you know, in terms
of building a portfolio, as long as the portfolio is
going to accomplish. Again, back to that financial plan, what
(31:03):
you needed to do and win a couple of blind
spots that typically come up with folks that you know,
I see that are doing it yourself and buying individual stocks.
Speaker 3 (31:13):
This this comes into.
Speaker 1 (31:14):
Play, you know, more often with men than women, because
men tend to tie we tend to tie our ego
to everything is we love to look at those winners
on that spreadsheet that we've owned for years, if not decades,
and we can get lulled to sleep. Think, you know,
seeing a three four gain on a spreadsheet, and you
love looking at the fact that you picked a winning stock. Well,
(31:36):
maybe most of that return happened, you know, in the
last ten or twenty years, and maybe the stock has
declined or just been flat or kind of dead money
for the last three, five or ten years. So you know,
looking at performance, you know, not just over the last
thirty years, but what's likely to happen going forward, and
how how are things you know moving right now, and
(31:56):
what are some of the other alternatives out there, uh
that you might be considering. That's a blind spot to
take a look at. I know people never want to
sell a stock because of taxes. Again, this comes back
to your financial plan. Are you charitably inclined? Do you
do some regular charitable giving? This is where you know
you could take some of those appreciated shares fund a
donor advice fund, or give the shares directly to charity.
(32:19):
It's a great way to diversify a portfolio. So those
are two. You know, a third one would just be
stress tests portfolio. There's wonderful software out there that would say, hey,
what happens if any of these stocks or you know,
twenty percent of your individual stocks go down thirty or
forty percent, Because that's a real possibility in any economic situation.
(32:41):
So sometimes when people see that portfolio actually stress tested,
the light belt, the bells and whistles go off and say, wow,
I don't want that kind of exposure. Let's talk about
how to responsibly diversify over a reasonable period of time
with reasonable tax exposure.
Speaker 3 (32:59):
Hope that helps Greg all.
Speaker 1 (33:01):
Right, Paul and Oxford Bryan says, we've been told that
our withdrawal plan should quote unquote adapt to markets.
Speaker 3 (33:07):
What does that actually look like in real life.
Speaker 2 (33:10):
Well, a lot of people think of retirement withdrawals as
a fixed paycheck. We're all used to fixed paychecks because
we've been getting one every month or every two weeks
or every week for however long. But when it's my
own money, then I can kind of turn this bigot
on and off as I need.
Speaker 3 (33:24):
And then then the question becomes, how do I know
when I need what?
Speaker 2 (33:27):
Well, the safest financial plans offer or have the ability
to kind of breathe with the markets. They flex They
kind of contract when the markets are rough, and they
open up when.
Speaker 3 (33:37):
Markets are strong.
Speaker 2 (33:38):
So the thinking here would be make sure you're stay flexible.
People get so tempted to I just want I want
to never worry. Right, I didn't have to worry when
I had a paycheck, and I don't want to worry anymore.
So I want to just program this in and just
make sure I have this exact amount coming in every
month and then never think about money again. Well, unfortunately,
if you have money, then you're going to be thinking
about it for the rest of your life, because once
you retire, you've won freedom. But freedom means now you
(34:00):
own your own company whose product is you making sure
you're financially stable. So where it's tempting to say I
want X amount of dollars every single month on this
date to cover absolutely everything, I think that's great, but
I think we really should focus on what's the money
we know we are going to spend. Let's focus on that.
Let's make that predictable. Then the rest of it can
be flexible, and that gives you the ability to keep
(34:22):
things invested when the markets are running and you don't
need the money. But also if we've also taken the
step of setting aside and being aware of what expenses
are coming up via financial plan, then we will have
already carved out the dollars we know we're gonna need,
Versus saying here's what I'm gonna spend I think this
year and then dividing that by twelve every single month.
The fixed costs, yes, do that, But the stuff you
might maybe do but you also might rule out, don't
(34:45):
lock that into your income plan.
Speaker 3 (34:46):
Keep that flexible.
Speaker 1 (34:48):
Coming up next to real pros and cons of retiring
overseas and what you need to consider before you pack
that suitcase. You're listening to Simply Money, presented by All
Word Financial on fifty five KRC the talk station. You're
listening to Simple Money. You've got to buy all Worth Financial,
(35:08):
Bob's fund seller along with Brian James. The dream of
retiring overseas has never been more popular, especially with Americans
looking to lower cost chase adventure, or just escape the
US healthcare system. But there are real financial and lifestyle
considerations that come with that dream. Let's break some of
(35:29):
those down, Brian. What are the pros and cons of
retiring abroad?
Speaker 3 (35:34):
Yeah, so the biggest one will you can you can
find a lower cost of living. There are people who go.
Speaker 2 (35:39):
Who move down to you know, Central America, nice places
with beaches and monkeys. You can get a lower cost
of living down there, and that's where we come up
with these ideas. So five thousand dollars a month can
go a lot further than it does here in the
United States. You know, places like Portugal.
Speaker 1 (35:52):
Answer to AI, Brian is just retired down in the
Southern Hemisphere and get a few monkeys to do your
chores for you.
Speaker 2 (36:00):
In monkeys, everybody needs a monkey Barler, Right, isn't that
the hidden dream?
Speaker 3 (36:03):
Yep?
Speaker 2 (36:04):
But yeah, those countries all show up on the list
for all those reasons because of the cost of living
down there. Another plus can be tax advantages. Some countries
have favorable tax treaties with the United States, or maybe
they don't tax foreign retirement income at all. In a
lot of cases, your Social Security benefits still get paid overseas. Now,
for those of you who might be frustrated with, you know,
just things in general here and are thinking the heck
(36:25):
with it, We're just gonna not be American anymore. We're
gonna go away. There are a handful of people like
that out there. Google the term exit tax. You don't
get to take all your money and run away. You're
gonna have to pay taxes on it, just as if
you were just gonna liquidate everything and put it in
a suitcase. Not that easy exit tax what you want
to look at.
Speaker 3 (36:40):
Let's talk about lifestyle, Bob, This is all you Well,
I'll give you an actual example of what we're talking about.
Speaker 1 (36:47):
I was on a flight a month or so ago
with a lady who was flying back to Cincinnati for
her fiftieth high school reunion. She went to Walnut Hills
High School and very nice lady. But here's the interesting part.
She she and her husband are preparing right now as
we speak, to retire in Portugal. And we had an
(37:09):
opportunity to talk about that, you know, on the flight
from Denver to Cincinnati. And I'll tell you this, Brian,
she had no stress on her face whatsoever about any
of this stuff. They had to the prior points we
brought up early in the show. They have been test
driving this thing for months. They found the right neighborhoods,
(37:30):
the right community of people, found their healthcare solution. I mean,
she was all jacked up and ready to go, and
so it's very doable if you do your homework in advance,
and she and her husband had clearly done that. Portugal,
I guess, is the new place to check out. Never
been there I heard that before. So those are those
(37:51):
are all the good reasons that people want to do this.
So what are the cons? Well, Bob just kind of
hinted that at healthcare is a big one. It can
be cheaper, but is it as good?
Speaker 3 (37:58):
Are you going to have access to specialists? Is there
a language barrier? That's a huge one.
Speaker 2 (38:01):
Specialists can be great, but not if you're not speaking
the same language. Medicare well, that doesn't travel. You're generally
on your own there. Here's a huge one if you're
from Cincinnati, specifically the West Side, where things a little
tighter over there. Well, distance from family, that's huge. What
seems fun at sixty five might feel really really isolating
at seventy five.
Speaker 1 (38:20):
You know, hard to go to an elder football game
when you live in Portugal Brian virtually impossible.
Speaker 2 (38:25):
You can stream those games now, it's not as hard
as it used to be, but at the same time,
you know you're still gonna have to, you know, have
your price Hill chili shipped out to you over overseas.
Speaker 1 (38:33):
Those are just a couple things to think about. Here's
the all Worth advice. Retiring overseas can stretch your dollars
and expand your horizons, but make sure your money, your healthcare,
and your expectations can handle the move. Thanks for listening tonight.
You've been listening to Simply Money Present up by all
Worth Financial on fifty five KRC, the talk station
Tonight, your retirement number just changed, but have you adjusted?
You're listening to simply money, said by all Worth Financial.
I'm Bob Sponseller along with Brian James Well. Twenty twenty
five was another big year. Markets were up nicely again
and while inflation stayed around three percent, and I know
we're talking about how sticky it still is. You know,
(00:29):
the markets have gone on up for the third year
now in a row, and that combination may have changed
the maths on your retirement plan, whether you realize it
or not. And then there are those who have a
financial plan that they haven't looked at or changed or
adjusted perhaps four years. That could be a problem. And
it's really the point of tonight's segment. Brian walk us
(00:52):
through what we're talking about here.
Speaker 2 (00:54):
Well, by let's start with inflation stayed steady right around
three percent all year. Not scary and tear terrifying like
it wasn't twenty two when we hit nine percent and
everybody got excited about ibonds briefly, but still enough to
erode our purchasing power.
Speaker 3 (01:07):
Right, three percent isn't what we want. We really want
to be closer to the load to low twos.
Speaker 2 (01:12):
If we could be there at all, and we're in
the ballpark, which means it's not time to panic about it.
Speaker 3 (01:16):
But at the same time, it's having an impact.
Speaker 2 (01:18):
So you know, for example, if you're a couple and
you've saved three million dollars and you're targeting about one
hundred and fifty thousand dollars in retirement spending in twenty twenty,
that might have been enough to get you through for
a thirty year retirement, but with that high inflation that
came immediately after that and then kind of sticking around
now that same lifestyle costs even more and you don't
even realize it, right, two percent three percent increase on
(01:39):
one hundred and fifty million dollars is almost another ten
million off off of your base rate there.
Speaker 3 (01:45):
Yeah.
Speaker 1 (01:45):
Can I see that come up periodically with client reviews, Brian,
I'm sure you do too. I mean, we build these
plans and we have these spending numbers in place, and
people occasionally come in as say, man, I just did
not expect this or that to be expect to it
as it is, and therefore we have to adjust those numbers.
And for those folks that are just sticking with that,
(02:07):
I'll call it decades. All rule of thumb of hey,
just take a four percent withdraw rate on your money
and set it and forget it. I think that's oversimplifying things,
to be sure, and because of some of the sticky inflation,
it could be draining your purchase eat power and therefore
your portfolio over time if you don't make some adjustments.
Speaker 3 (02:28):
That's exactly right.
Speaker 2 (02:29):
So you know, we've talked for a very long time
about what what can we get away with? And the
important part is the first of all, I think most
people just really haven't even taken.
Speaker 3 (02:38):
The time necessarily figure out what they do need.
Speaker 2 (02:41):
So you know, if you if you have to understand,
you know exactly what the needs are and how to
combine them with the resources, then you'll understand where that
gap is and that door swings both ways. There are
people out there who who have no idea what they need,
and there are people out there who haven't taken the
time to simply sit down and look at it, and
therefore just assume that there's not enough and they and
(03:02):
they wind up you know, working a heck of a
lot longer than they need to. So that's the point
of a financial plan, where we make sure that you
understand what the resources are and how you're going to
meet the gaps with whatever you've built on your own
between your needs and your Social Security pensions and all
those kinds of things.
Speaker 1 (03:16):
Yeah, and I'll pound the table off that point one
more time. I feel like I do it once a
week right now. But I continue to be shocked at
the number of people that come into the office. And
I'm talking about people that are worth three four five
million dollars and they have no idea what they actually spend.
And we joke around a little bit about it, you know,
I said, I don't care how much you spend on
a haircut or a pick a ball racket or anything
(03:39):
like that. Those are just rounding airrors. But we do
need to at least know what you're spending in aggregate,
you know, on a monthly basis or an annual basis,
just to make sure we keep this financial plan on track.
That and that's just you know, one of my call
outs here for twenty twenty six for those that haven't
looked at this in a while. Make sure you just
(04:00):
take stock of what you're gonna need or want in
the way of income and make sure your financial plan
is updated accordingly. All right, Brian, let's switch gears to
social Security, because with a lot of these tax law
changes and the nuances of some of the senior deductions
and ARMA taxes and everything else out there, you really
do need to look at that social security claiming strategy
(04:24):
rather than just assume, Wow, I'm gonna take it at
sixty two or sixty five and not even look at
the numbers.
Speaker 3 (04:29):
Yeah, that's right.
Speaker 2 (04:30):
So if your number has changed, meaning if you've determined
that you've got a different a dollar amount in mind
that is your go time, then that also is going
to affect your social security claiming strategy. And it's not
always about delaying to seventy anymore. Right, So let's set
the table here for those who might not be quite
as up to speed. The earliest anybody can file for
(04:50):
Social Security is age sixty two. That is the lowest
check that you'll ever get, of course, but you can
if you want to. The latest you can file age seventy. Now,
what that means is that there's no benefit to waiting
beyond seventy anymore. But between sixty two and seventy you
literally get an eight percent increase and you can see
this on your Social Security report. You can work in
(05:11):
a math out for yourself eight percent increase for simply
delaying every single year, and better than that, Bob, It's
actually not an annual increase. It's a monthly increase. So
if you wait six months, then you're going to get
a four percent increase for example. So that means there
are benefits and drawbacks to doing this. You know a
lot of people might you might have more room to
draw from your investments a little earlier, or let your
(05:31):
benefits continue to grow, meaning still retire early, but rely
on your own investments and savings and let those benefits
continue to grow by simply not filing for them. Or
if you're trying to reduce your RMD require minimum distribution
exposure a little bit later, you might actually want to
take Social Security sooner and then start converting those dollars
while you're in those lower brackets. There's a lot of
(05:51):
lot of different pros and cons, a lot of different
paths that the people can take here. But again it's first.
It all starts with what do we need to make
sure the ship floats? You got to pay your bills first,
paying your bills and generating the income necessary to do
that will put you in a floor bracket anyway, right,
nobody's gonna avoid that. Then on top of that you
can layer possible wroth conversions, and then also the decision
(06:13):
to look into whether you want to file for Social
Security now versus later.
Speaker 3 (06:16):
When I do these.
Speaker 2 (06:17):
Analyzes for clients to help them to determine what is
the right situation for them, what we look at this
is for people who you know, are in a situation
where we've kind of won the game, there's gonna be enough.
But that actually makes things a little more complicated because
now we're comparing good versus better versus best, as opposed
to bad idea.
Speaker 3 (06:33):
Versus good idea.
Speaker 2 (06:34):
That is a lot harder because now we've got to
make a decision between the three. The way I look
at it there is after we've modeled all those outcomes,
is when in a given situation, what gives me the
biggest pile of money in the future, taking Social Security
earlier or taking it later, that's the best way to
determine what the You know, there's a lot of math involved,
but to me, that's the best way to determine the
(06:55):
most the most advantageous will.
Speaker 3 (06:57):
Be time to file for Social Security for a given couple.
Speaker 1 (07:00):
All right, Brian, I'm gonna put you on the spot
here for a second.
Speaker 3 (07:02):
Are you ready? Sure?
Speaker 1 (07:04):
Hit me all right, because I know you're an absolute
ninja when it comes to these wroth conversion strategies. So
you know, you just you just spewed out a lot
of things to think about, a lot of math, a
lot of moving parts. Can you walk us through an
actual client meeting that you've conducted, say over the last
six to twelve months, where maybe walking in the door,
(07:25):
some of the presuppositions that perhaps you and the client
had about when to take social Security actually changed once
you look looked under the hood, put the car up
on the rack, so to speak. It took a look
at what the impact is to taking it at sixty two,
sixty five, and seventy and and maybe some surprises that
came out of that discussion.
Speaker 3 (07:46):
Yeah. It's one thing to.
Speaker 2 (07:47):
Watch TikTok videos and Instagram videos of other people using
random numbers to make these calculations. But it's another thing
entirely to see your own iras and your own social
Security reports and your own dat figured into one plan. Right,
None of this stuff is a black and white everybody
should go do this. If that was the case, then
there would then we could all rely on TikTok videos
(08:09):
because the advice would be the same for absolutely everybody.
But the situation differs greatly, and the difference between the
two in terms of timing of social Security tends to
be what do your assets look like?
Speaker 3 (08:18):
Otherwise, if you have the ability to draw.
Speaker 2 (08:21):
On assets that are either wroth or or in a
taxable account meaning not pre pre tax IRA, not pre
tax four Okay, then that tends to favor Okay, go
ahead and spend your investments down a little bit and
push social Security out. On the other hand, if all
of your assets or the majority of them are pre tax,
then the math tends to favor turn on social Security later,
because if all that's going to be ordinarily income taxed,
(08:44):
and that's going to take a larger chunk earlier in
your life than it should. That's the That's the most
basic rule of thumb that I can give, is that
you're if you're gonna be relying on pre tax assets,
that's going to favor filing for Social Security earlier. And
then the opposite is true as well. But that's not
even a rule of thumb. I don't believe in rules
of thumb. But that's usually the pivot point in the math.
But again, what we do is most people will come
(09:04):
in and they've either got the idea that I'm going
to go at sixty two because it's going away, which
that's that's a whole fallacy anyway, or they're gonna say
I'm going to wait till seventy if I can, because
then I'll get the biggest check ever.
Speaker 3 (09:15):
Well, a lot of times, the phrase I always use
is that I have.
Speaker 2 (09:19):
A lot more fifty five year olds to talk about
waiting till seventy than sixty five year olds are. Our
thinking tends to change as we age, and you start
not to want, not wanting to fight the government so
much anymore, and just to get what's there while it's
there because of the way your life is, you know,
is going so yeah, a lot of.
Speaker 1 (09:34):
The money, Show me the money, Brian, give it to me. Now,
that's all right, right, Hey, another topic to bring up,
you know, just another thing that comes up and we
need to address. This is just the whole issue of
real estate and illiquidity. You know, Brian, you and I
both have clients that went out and bought that vacation home,
you know, tied up a million or more dollars in
(09:55):
various pieces of real estate, whether it be rental properties,
lake houses, some even and invest in commercial buildings. But
the question here, if you update your financial plan and
take the time to do it, the question you got
to ask is can you access that money in a
timely manner when you actually need it, Because, let's face it,
during COVID and the pandemic, you know, we could flip
(10:18):
real estate in days, if not hours, and oftentimes at
a handsome profit. Things have slowed down a little bit. Rates,
interest rates and buyer demands have changed. And if real
estate is part of your retirement equation, the money you're
relying on to replace your paycheck in retirement, have you
thought of a plan b if we have a market downturn,
(10:41):
and do you have a plan to access liquidity. It's
something we need to continue to talk to folks about,
you know, especially after this big three year run up
in the market, because we talk about all the time.
It's not a matter of if, it's a matter of
when we get another correction in the stock market or
recession or something else coming down the pike that we
(11:01):
can't even guess or know about today.
Speaker 3 (11:04):
That's absolutely true.
Speaker 2 (11:05):
And then the important point is hopefully you're already in
a position to take that on. Because we just said
the same thing a year ago, We just said the
same thing two years ago. The market's been at a
peak for basically non stop for the last three years.
Speaker 3 (11:16):
So yes, there's always.
Speaker 2 (11:17):
Something coming around the corner, but it's not necessarily the
next corner. So let's just make sure that our plan
is in a position where if it happens tomorrow, that's
not that.
Speaker 3 (11:25):
Big of a deal.
Speaker 2 (11:25):
And the way we do that is by, just like
Bob said, make sure you've got liquidity. If that money
is tied up in real estate, you know, for folks
out there with a paid off home and maybe thinking
about selling it kind of sort of maybe someday, but
haven't really pulled the trigger. Make sure you have a
home equity line of credit in place. Nobody wants to
borrow against their house. But at the same time, if
we go through another twenty two where the stock market
is down, your investments are down, you're going to be
(11:47):
a lot happier having borrowed against your house, maybe ten
twenty thousand dollars or something, just just a deal with
a short term situation and then as things recover.
Speaker 3 (11:55):
Pay it off.
Speaker 2 (11:55):
It's that's something like that is not going to cost
you nearly as much an interest as you might think.
Lot of people come to this and they think, I
don't want to bar against the house. That's a mortgage,
that's a thirty year mortgage with eighty percent of my house.
Speaker 3 (12:05):
No it's not.
Speaker 2 (12:06):
It's a credit card against your house that sits at
zero until you use it. It's the best kind of
debt you could give yourself access to in an emergency.
And again, the whole point is not to use it.
The point is to have a parachute. They have parachutes
and airplanes that I hope I never use, but I'm
glad they're in there.
Speaker 1 (12:21):
Here's the all Worth advice. Your retirement plan is not
just a number. It's a constantly moving target. And if
you haven't adjusted it lately, now now's the time to
dust it off and take a look. Coming up next,
we tackled the millionaire's income problem, because pulling money out
the wrong way can cost you big in taxes, penalties,
(12:42):
and perhaps lost opportunities. You're listening to Simply Money presented
by all Worth Financial on fifty five KRC the talk station.
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James. Are you still
picking your own stocks? Wondering how to turn company shares
(13:04):
into real retirement income? From withdrawal strategies to covered call ETFs.
We tackle smart investing moves of all kinds straight ahead
at six forty three. Let's paint a picture here. You
did everything right, She saved diligently, You invested wisely, and
now you're sitting on say three million, five million, shoot,
(13:25):
maybe even eight million dollars heading into retirement. But here's
the twist. No one tells you about. Getting money out
of your portfolio is a whole lot trickier than putting
it in. We'll call this the millionaire's income problem if
we can call an eight million dollar net worth of problem. Brian,
what are we talking about here?
Speaker 2 (13:44):
Well, once you stop getting that paycheck from some employer,
you know, like what I like to call other people's money.
Oh pm, Well, you got to create your own. Now
it's your own money. The risk isn't just running out
of money, it's triggering massive tax bills, Medicare penalties, maybe
even undoing decades of careful investing you've worked very hard
to put in place. So we're gonna go through a
few strategies today that you can go you can use
(14:04):
to turn income on the smart way. Here's a fun one.
ROTH conversion ladders after retirement. We see this all the time.
Clients retire at sixty two and are looking for more
tax efficient Man, I have a few low income tax
years here before social Security and rm ds kick in.
So if I'm retired, I don't have salary anymore. That
means a significant source of income and income taxation has
(14:25):
now gone away.
Speaker 3 (14:26):
And what else can we do? So this is a
tax planning window.
Speaker 2 (14:30):
These are the best years to convert money from traditional
to a ROTH. Of course, Yes, you're gonna you're paying taxes, right,
you are taking money from pre tax to post tax.
Of course, that means the only way to get there
is to pay taxes.
Speaker 3 (14:42):
Right.
Speaker 2 (14:42):
A lot of people will come in and they'll say, Hey,
I got this pile of money, I want to poof
turn it into a roth.
Speaker 3 (14:46):
Ira.
Speaker 2 (14:47):
Well that's not that that is a math calculation. It
is very very much a sacrifice in exchange for a
game later. It can be a great idea, but don't
come in thinking it's just, hey, I'm gonna make everything
a wroth.
Speaker 3 (14:56):
Ira doesn't work that way.
Speaker 2 (14:58):
But anyway, if it does, if you do the those conversions,
of course that money is now growing tax free and
it comes out tax free. Also will not count against
Medicare premium thresholds via IRMA.
Speaker 3 (15:07):
That is a big big deal.
Speaker 2 (15:08):
Your requirementimum distributions out of your pre tax I rays,
those absolutely will affect your Medicare premiums.
Speaker 1 (15:15):
Let's talk about another strategy, evaluating municipal bonds versus dividend portfolios.
You know, from when it comes to generating income. And
let's face it, a lot of folks have built a
lot of wealth the right way. They have invested diligently
and have been very disciplined, and they've done those dividend
reinvestments for years and years, if not decades and decades,
(15:37):
and they now want to say, hey, we want to
win from all this work we put in. Let's just
turn on the income stick it from dividend stocks. And
that's not a bad strategy unless they mess with your
tax efficiency if you're not careful. And this is where
you know, and Brian, you know, bonds tend to be
a very boring topic that a lot of people don't
(15:58):
understand and they don't take the time time to evaluate.
For higher networth, high income people. Here we're talking about
municipal bonds. It's something to at least consider for folks
in high tax brackets. The interest, just as a reminder,
from municipal bonds is generally tax free at the federal level,
and if you buy in state bonds, they're often tax
(16:19):
state tax free as well. So it's it's a good
time to sit down and look at the after tax
yield on what you could get from you know, let's
be real here, some safer income alternatives like municipal bonds
versus just taking dividend income from stocks, where the stocks
can become volatile. You know, they will move up and
(16:41):
down and sometimes violently. And if you just rely on
dividends from stocks to generate the income that you need,
you might end up with a more way, more volatile
portfolio and retirement than you want to hold.
Speaker 2 (16:55):
You could too And while we're talking about municipal bonds, Bob,
I want to throw another thought out there. I frequently
we'll see people who maybe are in a low bracket
right now because they just don't have any They don't
have much in the way of income. They might have
millions in their retirement plans and sitting in the bank
and all that, but they haven't turned on any of
their income streams. And then I'll see that they're sitting
on a bunch of municipal bonds that are maybe yielding
(17:15):
them three percent or something like that, when they could
be in a corporate bond portfolio that's spitting out five percent.
So the idea is not to poke the irs in
the eye by not paying any taxes. If you're in
a low bracket and you have municipal bonds, you're leaving
a lot of money on the table. I'd rather pay
taxes on five percent worth of income and get four net,
then get three without paying any taxes at all. So
(17:38):
be sure you understand the purpose of your municipal bond.
Speaker 3 (17:40):
I'll be honest.
Speaker 2 (17:40):
Unless you're in the thirty two percent bracket, which is
close to four hundred thousand for a married couple, or
two hundred or So for an individual, if you're in
the thirty two percent bracket, then yes, you're gonna see
your tax equivalent yields be worthwhile. But if you're underneath that,
unis might not be helping you as much as are hurt.
Speaker 1 (17:56):
Yeah, great point. And for folks with larger portfolios, this
is where a laddered bond strategy with individual bonds makes
a lot of sense because you can actually see how
the sausage is made, you can actually see the bond
you own, you can stagger the maturities, so you're not
locking in anything for the long term because things do
and will change in terms of tax policy, interest rates,
(18:19):
all of that. So laddered bond portfolios, and as you said,
mixing and matching various sources of that bond income can
be a great thing to take a look at. Let's
talk about real estate, Brian. We occasionally have people that
want to live off of rental income from you know,
rental homes that they've acquired over the years, and they
are used to fantastic cash flow. There are pros and
(18:42):
cons to taking that strategy into retirement.
Speaker 2 (18:46):
So yeah, a rental income, of course, can be a
fantastic source of cash flow, right, there's no income like
passive income. However, those of you who own real estate
or have in the past, you know there is nothing
passive about owning rental real estate. You got maintenance, you've
got vacancies, and worst of all, you've got the human
being communications with the tenants. Those can all create headaches.
(19:07):
There's no timing, there's no rationality to them other than
the way the universe works. All this stuff tends to
blow up when you don't have the time for it
to blow up. So this is where you know, people
might consider hiring a property manager or maybe shifting to
just plain investments like real estate investment trusts also known
as rets for some exposure real estate without taking the
toilet plumbing responsibilities. So these can be okay publicly traded reads.
(19:28):
Private real estate funds can throw off steady income and
you know, systematically and predictably, and they give you some
diversification lasso across a lot of things, commercial properties, apartments,
business locations, and those kinds of things. Not having to
deal with that phone call about the broken water heater
or whatever. Rather than locking money into an annuity. Now
this can be a better alternative and annuities are okay,
(19:49):
but they can also limit your flexibility. They've got high
fees involved and can underperform. You can design your own
income stream through these different portfolio pieces, but you have
to understand how all the puzzle pieces together, the benefits
you're getting and the sacrifices you're making.
Speaker 3 (20:04):
Here's the all Worth advice.
Speaker 1 (20:05):
Just because you're wealthy doesn't mean you can't make sometimes
very expensive mistakes. Income planning is where fortunes are either
preserved or slowly drained. This is a hard conversation, but
maybe the most important one you can ever have with
your spouse. What happens if I die first? How to
(20:25):
prepare your partner emotionally and financially. Next, you're listening to
Simply Money presented by all Worth Financial on fifty five
KRC the talk station. You're listening to Simply Money presented
by all Worth Financial on Bob's fond Seller along with
Brian James. Well, this is one of those segments that
(20:46):
might be uncomfortable to hear, but it might be exactly
the one you'll be grateful you listen to later on
down the road. We're gonna call this the if I
die First segment, and it's not meant to be drum,
it's meant to be honest and practical. This is important stuff, Brian,
and it's an important topic to get out in front
(21:07):
of you and I have both lived through this situation
with clients many times.
Speaker 3 (21:12):
What are we talking about here, Well, this is important stuff.
Speaker 2 (21:15):
So if you're in a partnership, maybe a marriage, or
some other kind of domestic arrangement, well, somebody's going to
go first. And unfortunately, whether you're the money spouse, the
one who pays attention and makes the decisions and knows
where all the bodies are buried, or the one who
prefers to stay out of the financial details and only
be informed of the big picture, you know, like what
what we call, like to call the CEO versus the
CFO in a household.
Speaker 3 (21:35):
Well, we've seen far too many.
Speaker 2 (21:36):
Cases where that surviving spouse is not only left grieving,
which is hard enough as it is, but completely financially unprepared,
which can just be overwhelming to go through all that
at once. So let's talk about the you know, the
different roles that spouses tend to play that we see
in these planning relationships that we have, Well, one spouse,
and it's usually but this is going to sound sexist,
(21:56):
this is the way it works. It's usually, but not always,
the husbandand one spouse is normally the one who really
wants to take care of I would say this is
probably three out of four times one spouse wants to
take care of all the finances, the other one wants
nothing to do with it. And this is a relationship
that actually works pretty well. You know, show me two
people who want to be neck deep in every part
of the household, and I'll show you two people aren't
gonna stay married.
Speaker 3 (22:17):
For very long.
Speaker 2 (22:18):
Separation of duties is very important, But that's the one
who handles the investments, taxes, pays the bills, runs the budget.
The other spouse perfectly capable of it, but just isn't
involved and therefore doesn't know the day to day and
there's gonna be a run up to kind of a
learning curve to understanding how that household worked. So this
can be by choice. Maybe they chose that, or maybe
they were just told don't worry, I'll take care of it,
and they didn't push back at the time. Well, the
(22:39):
risk here is that if the money spouse dies first,
obviously there's enough going on with the grief, but also
this person is suddenly a CFO when maybe they've never
had that role in their entire lives.
Speaker 1 (22:49):
Brian, I've told this story at least once on this show,
and I think it's worth repeating. One of my first
ever clients, and they were wonderful people, wonderful marriage. But
you know, they really did live, you know, in what
I would call the Flintstone generation. The husband did everything.
The wife was just a great mother and took care
of the home, you know, more of an old time
(23:11):
traditional way of doing things. And all this husband told
his wife was if I die, call Bob. Well, she
called me on my cell phone at four fifteen in
the morning one day and said, you know, my husband
died and and these people, Brian, they were worth several
million dollars back in nineteen ninety two, so that's a
lot of money. And her first and only question to
(23:35):
me was do I have enough money to go down
to the UDF and buy some eggs and milk. And
it was a very sad conversation to have because to
your point that you just made, she's grieving the loss
of her husband. She has no idea whether she's penniless
and can even afford groceries that day. That is a
very sad situation to put someone in. It wasn't it
(23:58):
wasn't done intentionally. Again, wonderful marriage, but there was no
planning put in place whatsoever to prepare this woman to
be the new financial CEO over home. It was a
sad I will never forget that phone call, and I
try to help people avoid that situation.
Speaker 3 (24:16):
At all costs.
Speaker 1 (24:17):
So let's pivot to what we should be doing for
our loved ones.
Speaker 2 (24:20):
So the very first thing is make sure everybody knows
where all this stuff is, right, don't overthink this. The
very first thing we need to do is just make
sure we're clear where the inventory is. So maybe something
like a financial instruction manual that would contain a list
of all your investment accounts, bank accounts, maybe the.
Speaker 3 (24:37):
Last year end statement. It can be this easy.
Speaker 2 (24:39):
Every December, grab that or January when the statements show up,
grab that statement, throw.
Speaker 3 (24:43):
It in a folder and you don't have to worry.
You don't even have to look at it.
Speaker 2 (24:46):
You know, even if this is just a digital folder
or something on dropbox, you don't even have to look
at it's just a place where you can say, oh,
here's what it was, you know whatever December. This account
existed at one point and then you're surviving spouse and
whoever is helping them organize things will know where to look.
They can always go get the latest information, but they
just need to know that the account exists. Passwords, and
this is a little bit tougher because I used to
(25:09):
try this years ago when the Internet was first a thing,
but passwords nowadays changed so often there's just no way
and it's actually dangerous to be writing them down on
a piece of paper. Or what really frightens me, bob
the shared spreadsheet in Google docs or something like that
that has the keys to your kingdom somewhere out there online.
But you know, so there's a little tougher. Different things
have to happen there. I would suggest again, just just
(25:30):
make sure everybody knows where the accounts are and the
individuals can contact those financial institutions one by one and
make sure they get the appropriate access.
Speaker 3 (25:39):
But here's an important one.
Speaker 2 (25:40):
If there's a financial advisor in the mix, where if
there's some central point who knows where all this stuff is,
please make sure your spouse knows who that person is
and ideally can pick them out of a crowd. I
do have a handful of clients where the non money
spouse is so far away from the money they don't
even want to come in and meet me. And that
scares me to death because this person is going to
call me in tears wanting to know if they can
afford eggs. That's not a good thing. Make sure your
(26:02):
spouse knows where your advisor is. You're a state attorney,
your CPA, and anybody else you're working with, business cards
in a fold or something like that.
Speaker 1 (26:09):
Well, I'm gonna jump on that point you just made
because I think it's a critical one. You know, it's
not just about money and passwords and account numbers. Both
spouses or both partners should know these advisors, not just
know their names or how to pick them out of
a lineup. They should know them a little bit. They
should have attended a few meetings because at the end
of the day, when that spouse who passes away is
(26:31):
no longer here, it is going to come down to
do I connect with these advisors and the surviving spouse.
If they have no relationship with those advisors, they haven't
built any trust. They haven't gotten to know one another.
Things can change in a hurry, and the whole plan
that this couple put together for decades could get unwound
(26:52):
overnight if you fall into the hands of a you know,
unscrupulous advisor, or just get bad advice, or get non
informed advice because there was not a relationship for him.
You can tell I'm on my high horse here. I
think this is a really important thing. Both spouses need
to attend these meetings, even if one spouse has no
(27:12):
interest in the numbers and the spreadsheets and all that,
simply to feel comfort level with who the advisory team
is because it will come into play very quickly, and
it's important.
Speaker 3 (27:24):
It's important to get it.
Speaker 2 (27:25):
Even if you don't understand the numbers or how it
go works together and you hate hate this stuff, you
should get a vibe from the advisor do you like
them or not? Because that person one day was going
to have to be your partner, whether you like it
or not.
Speaker 1 (27:37):
Here's the all Worth advice. The best gift you can
leave your spouse isn't just money. It's clarity, stock options,
smarter withdraws, and income strategies. All of the above Coming
up next, we break down real world money moves for
investors with more to lose if they don't plan accordingly.
(27:58):
You're listening to Simply Money present by all Worth Financial
on fifty five KRC, the talk station. You're listening to
Simply Money presented by all Worth Financial Unpop sponseller along
with Brian James. Do you have a financial question you'd
like for us to answer. There's a red button you
can click while you're listening to the show. If, if,
(28:20):
and only if you're listening to the show on the
iHeart app, simply record your question there and it will
come straight to us. All right, Brian, here's Allan from
Milford who says we inherited a whole mix of investments
from my parents and honestly, I don't know what half
of this stuff is. How do you modernize a portfolio
(28:41):
without completely blowing it up?
Speaker 2 (28:43):
Well, the first thing is don't rush into any decisions.
The biggest mistake that people often make is thinking you
gotta fix everything at once. This was mom and dad's portfolio.
This is a portfolio for little elderly people, and that's
not me. So I need to change everything right now today.
Speaker 3 (28:56):
You might not understand what it is.
Speaker 2 (28:58):
So start with a full invent every holding, every fun class,
all the stocks, most importantly cost basis, and understand how
the impact of this works. If those assets got to
step up in bases at death, that often gives you
it's going to give you a tax.
Speaker 3 (29:12):
Free reset button.
Speaker 2 (29:13):
Most of the stuff that is not inside of some
kind of retirement plan that should have come to you
in a taxable portfolio, which means it's as if you
bought it the day your benefactor passed away, so you
get at the moment you inherit it, you should be.
Speaker 3 (29:27):
At a pretty low cost basis. Don't let those run
forever though.
Speaker 2 (29:30):
Matter of fact, I look at those first, because people
will come in two years after the fact going well
I didn't really like these investments.
Speaker 3 (29:36):
I wanted to make some changes.
Speaker 2 (29:37):
Well they've gone up a bit, so now we have
taxes where if we had looked at it a little
more quickly, we could have made the adjustments that are
more appropriate before the tax bite happened.
Speaker 3 (29:46):
And then you'll put these into buckets.
Speaker 2 (29:47):
Right you might have keepers and stuff that you're not
sure about and stuff you're going to dump right away.
The keepers would be your low cost index funds, diverse
fight ETFs. Questionable stuff is anything with a high internal fee,
like expensive mutual funds, maybe old share classes B shares
or heaven Forbid C share or something like that. Those
might not make any sense, and then exit candidates would
be those little spinoffs. You know, everybody who has P
(30:09):
and G also got smuckers in a handful of other
little tiny positions. You might not want to deal with
that stuff at all. It's all gonna spit out little
tiny things, so tidy it up. But it's nothing to
be afraid of. You don't have to do it immediately.
But at the same time, don't let it go for twoe, three,
four or five years. It's not going to be very
efficient to handle it that way. Okay, moving on to Greg.
Greg's down in Fort Thomas loved the forts down there.
(30:29):
I always picked my own stocks. But now our portfolio
is get a little bigger and he's wondering if they've
got any blind spots. Well, how do you know when
doing it yourself becomes too risky?
Speaker 3 (30:39):
Well risk, Greg?
Speaker 1 (30:40):
It all comes down to do you have a financial plan?
In other words, what does your money need to do
for you? And win so you know, we start there,
do you have a financial plan and if not, maybe
think about getting one. In terms of stock picking, there's
nothing wrong with doing it yourself, you know, in terms
of building a portfolio, as long as the portfolio is
going to accomplish. Again, back to that financial plan, what
(31:03):
you needed to do and win a couple of blind
spots that typically come up with folks that you know,
I see that are doing it yourself and buying individual stocks.
Speaker 3 (31:13):
This this comes into.
Speaker 1 (31:14):
Play, you know, more often with men than women, because
men tend to tie we tend to tie our ego
to everything is we love to look at those winners
on that spreadsheet that we've owned for years, if not decades,
and we can get lulled to sleep. Think, you know,
seeing a three four gain on a spreadsheet, and you
love looking at the fact that you picked a winning stock. Well,
(31:36):
maybe most of that return happened, you know, in the
last ten or twenty years, and maybe the stock has
declined or just been flat or kind of dead money
for the last three, five or ten years. So you know,
looking at performance, you know, not just over the last
thirty years, but what's likely to happen going forward, and
how how are things you know moving right now, and
(31:56):
what are some of the other alternatives out there, uh
that you might be considering. That's a blind spot to
take a look at. I know people never want to
sell a stock because of taxes. Again, this comes back
to your financial plan. Are you charitably inclined? Do you
do some regular charitable giving? This is where you know
you could take some of those appreciated shares fund a
donor advice fund, or give the shares directly to charity.
(32:19):
It's a great way to diversify a portfolio. So those
are two. You know, a third one would just be
stress tests portfolio. There's wonderful software out there that would say, hey,
what happens if any of these stocks or you know,
twenty percent of your individual stocks go down thirty or
forty percent, Because that's a real possibility in any economic situation.
(32:41):
So sometimes when people see that portfolio actually stress tested,
the light belt, the bells and whistles go off and say, wow,
I don't want that kind of exposure. Let's talk about
how to responsibly diversify over a reasonable period of time
with reasonable tax exposure.
Speaker 3 (32:59):
Hope that helps Greg all.
Speaker 1 (33:01):
Right, Paul and Oxford Bryan says, we've been told that
our withdrawal plan should quote unquote adapt to markets.
Speaker 3 (33:07):
What does that actually look like in real life.
Speaker 2 (33:10):
Well, a lot of people think of retirement withdrawals as
a fixed paycheck. We're all used to fixed paychecks because
we've been getting one every month or every two weeks
or every week for however long. But when it's my
own money, then I can kind of turn this bigot
on and off as I need.
Speaker 3 (33:24):
And then then the question becomes, how do I know
when I need what?
Speaker 2 (33:27):
Well, the safest financial plans offer or have the ability
to kind of breathe with the markets. They flex They
kind of contract when the markets are rough, and they
open up when.
Speaker 3 (33:37):
Markets are strong.
Speaker 2 (33:38):
So the thinking here would be make sure you're stay flexible.
People get so tempted to I just want I want
to never worry. Right, I didn't have to worry when
I had a paycheck, and I don't want to worry anymore.
So I want to just program this in and just
make sure I have this exact amount coming in every
month and then never think about money again. Well, unfortunately,
if you have money, then you're going to be thinking
about it for the rest of your life, because once
you retire, you've won freedom. But freedom means now you
(34:00):
own your own company whose product is you making sure
you're financially stable. So where it's tempting to say I
want X amount of dollars every single month on this
date to cover absolutely everything, I think that's great, but
I think we really should focus on what's the money
we know we are going to spend. Let's focus on that.
Let's make that predictable. Then the rest of it can
be flexible, and that gives you the ability to keep
(34:22):
things invested when the markets are running and you don't
need the money. But also if we've also taken the
step of setting aside and being aware of what expenses
are coming up via financial plan, then we will have
already carved out the dollars we know we're gonna need,
Versus saying here's what I'm gonna spend I think this
year and then dividing that by twelve every single month.
The fixed costs, yes, do that, But the stuff you
might maybe do but you also might rule out, don't
(34:45):
lock that into your income plan.
Speaker 3 (34:46):
Keep that flexible.
Speaker 1 (34:48):
Coming up next to real pros and cons of retiring
overseas and what you need to consider before you pack
that suitcase. You're listening to Simply Money, presented by All
Word Financial on fifty five KRC the talk station. You're
listening to Simple Money. You've got to buy all Worth Financial,
(35:08):
Bob's fund seller along with Brian James. The dream of
retiring overseas has never been more popular, especially with Americans
looking to lower cost chase adventure, or just escape the
US healthcare system. But there are real financial and lifestyle
considerations that come with that dream. Let's break some of
(35:29):
those down, Brian. What are the pros and cons of
retiring abroad?
Speaker 3 (35:34):
Yeah, so the biggest one will you can you can
find a lower cost of living. There are people who go.
Speaker 2 (35:39):
Who move down to you know, Central America, nice places
with beaches and monkeys. You can get a lower cost
of living down there, and that's where we come up
with these ideas. So five thousand dollars a month can
go a lot further than it does here in the
United States. You know, places like Portugal.
Speaker 1 (35:52):
Answer to AI, Brian is just retired down in the
Southern Hemisphere and get a few monkeys to do your
chores for you.
Speaker 2 (36:00):
In monkeys, everybody needs a monkey Barler, Right, isn't that
the hidden dream?
Speaker 3 (36:03):
Yep?
Speaker 2 (36:04):
But yeah, those countries all show up on the list
for all those reasons because of the cost of living
down there. Another plus can be tax advantages. Some countries
have favorable tax treaties with the United States, or maybe
they don't tax foreign retirement income at all. In a
lot of cases, your Social Security benefits still get paid overseas. Now,
for those of you who might be frustrated with, you know,
just things in general here and are thinking the heck
(36:25):
with it, We're just gonna not be American anymore. We're
gonna go away. There are a handful of people like
that out there. Google the term exit tax. You don't
get to take all your money and run away. You're
gonna have to pay taxes on it, just as if
you were just gonna liquidate everything and put it in
a suitcase. Not that easy exit tax what you want
to look at.
Speaker 3 (36:40):
Let's talk about lifestyle, Bob, This is all you Well,
I'll give you an actual example of what we're talking about.
Speaker 1 (36:47):
I was on a flight a month or so ago
with a lady who was flying back to Cincinnati for
her fiftieth high school reunion. She went to Walnut Hills
High School and very nice lady. But here's the interesting part.
She she and her husband are preparing right now as
we speak, to retire in Portugal. And we had an
(37:09):
opportunity to talk about that, you know, on the flight
from Denver to Cincinnati. And I'll tell you this, Brian,
she had no stress on her face whatsoever about any
of this stuff. They had to the prior points we
brought up early in the show. They have been test
driving this thing for months. They found the right neighborhoods,
(37:30):
the right community of people, found their healthcare solution. I mean,
she was all jacked up and ready to go, and
so it's very doable if you do your homework in advance,
and she and her husband had clearly done that. Portugal,
I guess, is the new place to check out. Never
been there I heard that before. So those are those
(37:51):
are all the good reasons that people want to do this.
So what are the cons? Well, Bob just kind of
hinted that at healthcare is a big one. It can
be cheaper, but is it as good?
Speaker 3 (37:58):
Are you going to have access to specialists? Is there
a language barrier? That's a huge one.
Speaker 2 (38:01):
Specialists can be great, but not if you're not speaking
the same language. Medicare well, that doesn't travel. You're generally
on your own there. Here's a huge one if you're
from Cincinnati, specifically the West Side, where things a little
tighter over there. Well, distance from family, that's huge. What
seems fun at sixty five might feel really really isolating
at seventy five.
Speaker 1 (38:20):
You know, hard to go to an elder football game
when you live in Portugal Brian virtually impossible.
Speaker 2 (38:25):
You can stream those games now, it's not as hard
as it used to be, but at the same time,
you know you're still gonna have to, you know, have
your price Hill chili shipped out to you over overseas.
Speaker 1 (38:33):
Those are just a couple things to think about. Here's
the all Worth advice. Retiring overseas can stretch your dollars
and expand your horizons, but make sure your money, your healthcare,
and your expectations can handle the move. Thanks for listening tonight.
You've been listening to Simply Money Present up by all
Worth Financial on fifty five KRC, the talk station
Simply Money News
Popular Podcasts
Two Guys, Five Rings: Matt, Bowen & The Olympics
Two Guys (Bowen Yang and Matt Rogers). Five Rings (you know, from the Olympics logo). One essential podcast for the 2026 Milan-Cortina Winter Olympics. Bowen Yang (SNL, Wicked) and Matt Rogers (Palm Royale, No Good Deed) of Las Culturistas are back for a second season of Two Guys, Five Rings, a collaboration with NBC Sports and iHeartRadio. In this 15-episode event, Bowen and Matt discuss the top storylines, obsess over Italian culture, and find out what really goes on in the Olympic Village.
iHeartOlympics: The Latest
Listen to the latest news from the 2026 Winter Olympics.
Milan Cortina Winter Olympics
The 2026 Winter Olympics in Milan Cortina are here and have everyone talking. iHeartPodcasts is buzzing with content in honor of the XXV Winter Olympics We’re bringing you episodes from a variety of iHeartPodcast shows to help you keep up with the action. Follow Milan Cortina Winter Olympics so you don’t miss any coverage of the 2026 Winter Olympics, and if you like what you hear, be sure to follow each Podcast in the feed for more great content from iHeartPodcasts.