All Episodes

October 1, 2023 • 44 mins
None
Mark as Played
Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
In your corner, saving one investorat a time. I'm working for clients,
not companies, all while bullyproofing portfolios, totally committed to sharing academic truths
of botimistic always representing Main Street andnot Wall Street. Team, it's your
Sun Money team. Then this isthe Sun Money Investment Show, with drawn

(00:22):
financially by theirs. Hello and welcometo the Sound Money Investment Show with Brown
Financial Advisors. I'm Greg Brown andI'm James Fourth and we are a registered
investment advisory firm. We are independentand we do our for clients, not
companies, tricy. If you're acomplimentary and personalized financial income plan, give

(00:42):
us a call. Five one threefive seven five nine six five four.
Perhaps you're seeking advice on an oldfour one K four three B, some
type of employer sponsor plan even inanyway analysis for some Well here's the point.
If you're longer with the company,than as a rule, your money
should not be there either, Sowe can help you roll that out,
take control tax neutral I RAY ormaybe split that out with the NUA fun

(01:07):
number again. Five one three,five seven, five nine six five four.
Visit our website Brown Financial Advisors Dotcom email team at Brown Financial Advisors
dot com and our home office isin Milford, Boat West up locations in
Blue Ash, Westuster and Florence.Greg all right. Also, while you're
on the website, be sure togo to seminars and you'll see that we
have a lot of public events foodfund in finance, and what we'll do

(01:32):
is we'll talk about all things retirement, have a meal together, and then
invite you in for this compliment orreview a second opinion on the health of
your wealth. We'll look at everythingthat you currently have, align that with
your goals, your objectives, seewhat risk you're supposed to be taking versus
that that you are actually exposed to, and then look at the internal spread,

(01:53):
spees, margins, loads, andall those other hidden expenses that are
layered on top of whatever advisory feeyou may be paying, which could be
lost lead. But it's all aboutyour total cost of investing, which could
be well much higher than you think, and it could be a drag factor,
could cause you to lag and returns. It could be causing you to
take on excessive risk in exchange forlower returns and just be outright incompatible with

(02:16):
your goals. Your financial goals.So all that is just as James mentioned,
we have a complimentary review and thatwill be first appointments just all about
you. And then guess what thesecond appointment is also all about you,
but it will include a complete financialplan, big overview plan, income planning,
the assessment of all your investments,the recommendations, nothing held back on

(02:38):
what you should consider doing, alllined with your risk, your purpose as
your goal, your objectives to succeedon purpose and not happenstance. Also,
James mentioned that we're unique in somuch that we're financial fudiaries. We put
your interest first in every situation.That means we work literally for you,
not the company, So we're youradvocates doing things with you and for you,

(03:00):
not to you. Big difference betweenthe brokerage community and all those big
names that you know can't help,but just remind you those big names that
have Super Bowl commercials and football's namesnamed after them is not in your best
interest if you've just been just amicro second there, just to think about
that. And today, not tosound like a shock jock, keepan in
the intro, but shocking retirement statisticsis what we're going to be discussing and

(03:24):
things you should be aware of becauseunderstanding the importance of planning ahead to avoid
today's daunting retirement. Statistics or doesthat word statistics gettle? Statistics they can
play They can play a large role. Statistics play a large role in our
life. This like the benchmark andmeasurement of all things us, kind of
boils down to a number if youthink about it. You just think about

(03:46):
the natural laws God put in placethat boils down to that reality. I
heard a recent testament. It justkind of all struck me. It's simplicity,
it's simple wisdom that someone just became, let's say, aware of a
creation. And it kind of wentlike this. He was an Asian student,
a very bright gentleman, really intoscience and math, and there seems
to be a proclivity for math andscience and certain hemispheres of the globe regions

(04:11):
of the world. But that aside, he just kind of thought, you
know, religion was fooie and theconcept of God was just not his thing,
more sci fi. But as hegot to thinking about it, as
he broadened his mind, went onto college, he had these Christian friends
that kind of kept tugging on himand and he had this realization as epiphany
one day. Everyone kind of comesto having their epiphany, even when it
comes to the statistics of retirement.Well, his statistical reality was, you

(04:34):
know what, he loved math andhe realized that that we didn't create math,
someone left it here for us todiscover it. And that was his
big change. And we want tohelp you have an eye opening experience.
I'm just looking at some things moreclosely that you're not as aware of that
you don't work with under the hoodevery day. That were your local mechanic

(04:56):
to help you get this right thefirst time, because it doesn't necessarily come
with with doovers. Right. Solet's look at this now, whether it's
a job or education, sports,or it's just mentioned even the concept of
you know, the big picture,broad reality of religion, you name it.
Statistics are everywhere. And the insuranceindustry, whether it's medical, life,
home, other types of insurance,those companies they use statistical models to

(05:18):
calculate the risk of giving and offeringinsurance coverage based on what do we know
that is actuary tables, you know, the law of large numbers. They
don't lie. Well, you know, there are exceptions like cataclysmic events,
and we oftentimes remind people all ofus could have a day after, which

(05:39):
means what you could have some badnews, You could have a circumstance or
situation arise that you just wish youyou could avoid. But sometimes the best
way to get past something is togo through something and to get to the
other side. And whether that bethe day after, that also implies there's
a day before. So maybe allof you listening today, you're sitting out
there and this is your day before, and we have an opportunity to address

(06:00):
the risk factors that we know statisticallycan happen in the area of finance,
in the area of retirement, inthe area of investing to produce and create
the cash flow you need. Becauseof retirements about cashlists, you have sufficiency
so you don't outlive your money andit does all the things you need to
do throughout the rest of your forever. So when you apply numbers and statistics
into the sports world, or youknow, whether it's the real world of

(06:20):
sports where the fantasy sports that areout there, analytics a big part of
it. You see websites and dataand media trends and things all tracking you
down to the cookie that you representon where you go, what you like,
what you think, you know,what draws you in all that being
analyzed and repackaged and sold, andit just goes on and on. So,

(06:43):
needless to say, statistics or everywhere, and we can certainly use them.
They can be our friend or theycould be our foe. And so
retirement can be daunting and so canthe statistics are related to it. So
helping you understand the ways to avoidbeing one of those people that fit in
the category of detrimental statistics. JanWell, let's get to the thought provoking
questions that tie into today's show.So, approximately, how much does the

(07:05):
average person have save for retirement?How much should preretirees expect to spend on
healthcare costs in retirement? What aresome ways to create confidence in retirement?
Confidence, you know, for yourfinancial also for your medical for your healthcare,
for your peace of mind, yourpsychological well being. How much money

(07:26):
will I or the collective we needto live comfortably in retirement. Well,
it's maybe the keyword there is comfortably. What does that actually mean? How
often do employees take the full employermatch that means in your four one K
plans? Your four three B plans, et cetera. What does the employer
offer for matching? And do youtake advantage of that or you just simply

(07:47):
turn down the free money. It'slike turning down a raise. Sounds logical
deadn't it? And should I contributebeyond the employer match maybe max out those
four one K four three contributions orif you're above the age of fifty,
take advantage of the ketchup contribution rulesand soon to come is the super Ketchup

(08:09):
contribution rules via the Secure two pointzero Act. What are the drawbacks of
taking money from the retirement savings early? This is like if you have those
unexpected emergencies that occur, you know, unexpected versus expected emergencies, right,
where should you take the money from? And what's the advantages or maybe the
disadvantages of taking it from your employersponsored plans or even perhaps your individual retirement

(08:33):
savings plans. What percentage of peoplehave a plan set up for the retirement?
So once again, what percentage ofpeople actually have a retirement plan versus
once it do not? Will socialSecurity benefits continue to stay I'll just say
as they are unreduced? Or what'sthe likelihood perhaps the possibility or probability of

(08:56):
reductions coming up soon for social securitybenefits. What's a major factor in why
so many more seniors seem to bedeclaring bankruptcy now versus what they were maybe
just one or two decades ago.And what are some of the key benefits
of planning ahead for retirements? GregAny thoughts, Yeah, bankruptcy because they

(09:16):
paid half of America's taxes their adultworking life, and now that it's their
turn, there's nothing in the basketfor them. That was kind of like
a pessimistic view. But hey,there's a statistic. I'm sure to support
it as you see. You know, don't become a statistic. Not true,
We're all as statistic. It's justdon't become like that catchphrase, are
a detrimental statistic. All of whatyou presented, there are reasonable explanations for

(09:39):
each person's involvement in all of thosethought provoking questions, James, And each
situation is different. Sometimes even whenthey're similarities, there are still slight differences
that are nuances that could be aMaxwell smart moment where you missed it by
this much, that much, whateverthat much is measured by you well,
for example, when we get tothe four one K fourth three B recommendations

(10:03):
for your contributions. Part of that'sa tax consideration when you look at what
are the advantags tax wise of contributingmaybe perhaps beyond the employer match. Or
now we get into maybe another segue, which is should we make contributions to
the traditional four one k or maybeto the roth four one k or should
we do a little bit of combinationof both, yeah, or just take

(10:24):
it as take home pay and dosome private investing in after tax buckets of
money. Again, situations are different. We need a plan for you,
not your neighbor or your buddy atthe water cooler. Statistics in and s
well statistics about retirement, which ismore the focus here people saving for retirement.
Let's just look at some of thestats as it applies to this and

(10:46):
avoid the detrimental numbers that can becomesomeone's statistic. Teams our funder about the
office five one three, five sevenfive nine six five four call us.
We can help, but stay tuneyou listening to the Sound Money Investment Show
with Brown Financial Advisors zero fifty fivecarecy. The tax station opinions expressed are
solely those of Brown Financial Advisors andshould not be interpreted as specific advice.

(11:09):
Materials presented are believed to be fromreliable sources, and no representations can be
made as to its accuracy. Allideas and information should be discussed in detail
with one of our qualified investment advisorsprior to implementation. Market based investments involve
risk, and past performance is noguarantee of future results. Insurance based investments
offer guarantees based upon the claims payingability of the issuing company. All insurance,

(11:30):
tax and mortgage services are offered throughBrown Insurance and Tax Advisors LLC.
Brown Financial Advisors and Brown Insurance andTax Advisors are affiliated companies and may only
transact business in those states and whichregistered or were otherwise legally permitted. All
right, welcome back to Sound ManyInvestment Show with Brown Financial Advisors. I'm
Greg Brown and I'm James Barton.We are independent area that's a registered investment

(11:52):
advisor firm. We do our forclients, not companies. That's Main Street
and not Wall Street. Full numberfive one three, five seven, five
six five four, website, BrownFinancial Advisors dot Com, email team at
Brown Financial Advisors dot Com and ourhome offices in Milford, but we also
have locations in Blue Ash, Westchesterand Florence. Greg I was just thinking,

(12:13):
I like the music intros, particularlythe kiss intro, and then mister
announcer man kind of bores me.Bottom line is investing can be risky.
We're here to help you. Wework for clients, not companies. We're
diversifieding so much as that we're holistic. We're helping each area. Taxes,
investments, financial planning, income planning, socicurity maximization, pension maximization. You
bring it all together, some insuranceadvisory, tax advisor, tax preparation,

(12:35):
a state planning where the not theclub med but the mail clinic of financial
services. And you know, weget a lot right, don't get a
lot wrong. And if we ifwe make a mistake, it's you're right,
we're wrong, we're sorry, andwe fix it and just stand up
and on our word. And it'sa good place for you to be.
So there is my mister announcerman substitutionfor why you should just give us call

(13:00):
and come on in. We'll helpyou. And we're talking about the statistics
of retirement and you know they're detrimentalstatistics. And then there's good ones and
we want you to be on thegood side of this balancing act or this
scale. And James tell us moreabout all you want to be successful in
retirement. Well, that's also whyone of our songs is about having peace

(13:20):
of mind. So when it comesto stress, yeah, no one wants
to stress about retirement or even worse, stress out in retirement. And that's
why when we say you know success, how do you define success? What
does it mean to be successful orto have success and retirement. Maybe it's
as simple as this, did yourun out of money prior to running out

(13:41):
of life? Or if you arethe unlucky type that you wind up in
a nursing home, it's like,did you run out of money before you
run out of live and wind upin a nursing home all at the same
time. Right, So many ofthe numbers that we're talking about today are
based on the outcomes of people notbeing prepared or planning for retirement. So

(14:01):
when you're working, race and family, Yes, it can be tough to
focus on things such as the future, planning for retirement, saving for retirement,
and you know, life happens,We get it, money gets tied,
people get busy doing other things,but at some point you really can't
neglect it, because if you don'twant to be i'd say unprepared for retirement,
you need to have a plan orat least start the planning process.

(14:24):
Doesn't mean you have to have everythingcompleted before retirement, just need to be
on the road to planning for retirement. So any questions that you have or
concerns arise from today's show, that'sthe point we encourage it to give us
a call, schedule a complimentary consultation. Will be happy to answer any of
these questions or concerns you have andhelp you better understand retirement. Make sure

(14:46):
that you know you're being proactive aboutthe next twenty thirty years of your quote
unquote constructive unemployment also known as yourgolden years, also known as your permanent
vacation, a time that you shouldenjoy. So whether you're hearing for retirement
or already in retirement, it's nottoo late to start building a plan.
Give us a call five one,three, five, seven, five nine

(15:07):
six five four again five one three, five, seven, five nine,
six five four call us. Wecan help Greg. I got this autographed
guitar thingy from Paul Stanley. Hedoes art. He's the lead singer Kiss,
been around fifty plus years. Secondtime I mentioned him. It's not
a plug, but I was justthinking life is music in a way constructive
unemployment. Yeah, that's I don'tknow of a song like that. But

(15:28):
Golden years you I've heard one permanentvacation. You remember back in eighties the
debut album from the Go goes permanentvacation. I mean, life is music,
and you want a beautiful life,and you want it to be beautiful
music. We look at one andhere, this could be not so beautiful
music. James one and three.Americans have virtually nothing saved for retirement.
They're going to be permanently employed,not permanent vacation. We don't want that.

(15:52):
We want the inverse that, becauseyou know what, you just can't
work forever. It's not everything thatyou can do always and forever. It's
a Taylor Swift plug right there,I guess. But anyway, music day
here and yeah, old sound manyinvestment show. The first statistic to bring
to light is this one, thelack of preparedness and are retirement. According
to multiple surveys, new and old, the trend is well established. Over

(16:17):
half of Americans have less than tenthousand dollars saved up for retirement, thirty
three percent have less than five thousandsaved for retirement, and twenty one percent
have virtually nothing saved at all.There's that approximate one third no Women are
twenty seven percent more likely to havelittle to no retirement savings. A lot
of factors for that. We knowoftentimes as we recite these, they're the
ones that oftentimes pick up the slacktaking care of adult family members, even

(16:40):
their spouses, interrupting vacations, yougot it, and were interrupting their careers
to have what looks like their permanentvacation, which also impacts their build up
towards social security prior to maybe takingon the spousal benefit later in life where
they get to keep the larger thetwo which is typically not their own.
So you know, two thirds,two thirds, sixty five percent have nothing
saved or less than ten thousand dollarscompared to fifty two percent of men.

(17:03):
Sixty five percent of women versus fiftytwo percent of men have less than ten
thousand dollars prepared for savings. Nowby households, the median household retirement savings
out there abroad medium means the bigpicture average fifty thousand dollars fifty thousand dollars
less than one year's average lower incomeMiddle America average income less than one year

(17:27):
in reserve equivalent. Think about that, and we just talked about, Hey,
retirement could be a constructive unemployment ofyou for twenty three, twenty to
thirty years in the future down theroad. So the median meaning equal middle
number translation, fifty percent of householdshave less than fifty thousand dollars saved.
Fifty percent have more than fifty thousandsaved. But what could that mean?

(17:48):
That could be fifty thousand and onedollar and above, right, it's not
like the dam's breaking is gushing forwardwith all kinds of cash. The numbers
are, however, a bit higherfor the older generations Baby boomers one hundred
fifty two thousand dollars, Generation xerssixty six thousand, and the average from
the millennials twenty three thousand. Albeittime is on their side, right,

(18:11):
They're just we've only just begun rightthere another song, But millennials with at
least thirty thousand student loans, Soweigh that out you throw, you PLoP
on the scale what they've done sofar on the saving side average medium twenty
three thousand. But wait, PLoPon the other side, the old scale,
a larger, heavier number, anddown goes a scale filled with thirty
thousand dollars an average student loans thatend up on average, holy Moly,

(18:36):
three hundred twenty five thousand dollars lessin retirement savings than their debt free peers.
Debt is a weight. We allknow it. The best way to
deal with debt is before you getin debt. Second best way is to
get out of debt once you getin debt with a systematic approach. Never
believe it's too late, never believeit's too much. It can't be done.
It will never be done unless youstart, and you start now well.

(19:00):
And also compare and maybe contrast todayversus maybe twenty years ago. And
this is where the difference of wherepeople had a pension and social security and
that really helped to provide a reliableincome in retirement. Today's landscape, of
course, has changed dramatically. Pensionsare increasingly scarce, dwindling down to somewhere

(19:21):
between ten and twelve percent. Peoplewho actually have a pension. Social Security
i'd say definitely has some question marks. And you hear the saber rattling from
Congress once in a while, usuallyabout two or three times a year that
says, if we do nothing,social Security will go bankrupt. Well,
how about this, If Congress actuallydoes nothing for a change, that might
be an improvement. It might meanthis if they don't raise additional taxes in

(19:47):
their program. Wait a minute,did you say additional taxes. Yes,
every single year Congress raises taxes onthe Social Security program. But what we're
talking about is if they start raisingadditional taxes, or they start making additional
bait and switch tactics, such asraising the retirement age. It's already two
years more that you have to work. Think about almost like servitude right where

(20:11):
it just to be age sixty fiveyou would get your full retirement benefits.
Now you have to work two moreyears to get to the same full retirement
benefits. Sounds like a fair trade, right. Anyways, back to the
point, it's up to you tosave and build a nest egg for retirement.
That's kind of where the responsibility hasbeen shifted via the pensions to the
follen K plan from a defined outcomeor defined benefit plan to a define contribution

(20:37):
plan. The outcome far from beingpredetermined or determined anyways. So according to
the National Institute or Retirement Security,it's estimated that the nation's retirement savings gap
is between seven and fourteen trillion dollars. That's a pretty big gap when you
say, well, it could beseven or it could be fourteen, and
then te what the t for trillion? The takeaway from these statistics is it's

(21:00):
safe to say that most people aresimply not saving enough for retirements. Greg
I just I hear the typical goto playbook tear out the page approach for
politicians is tax, increased tax tooffset gaps. Wrong. Wrong, wrong,
You can only tax so much,right. I mean, I look
at California, and I'll be boldand say most liberal cities and or states

(21:23):
with liberal forms of leadership failed,failed projects, failed experiments, from a
social perspective to crime to socioeconomic economicTrying to balance budgets of more taxes,
you see an outflow of people givingup their property and moving to other states

(21:44):
surrounding states, leaving some of themost beautiful places in our continental United States.
Why because it just is just failedeconomics and James. You may not
know this, but here in ourlittle town Milford, word has it on
the streets. There's a there's amovement to increase taxes up for it's a
forty seven percent over the next coupleof years property taxes. Now, I

(22:06):
don't know about you, but Iwant a big old dump truck to bring
me. Say I have a halfacre lot and it's going to go up
forty percent on property taxes. Iwant another forty percent more dirt dumped in
my yard so I get forty percentmore properties so I can pay for more
property tax on that dirt and feelgood about it. Well, it's one

(22:27):
thing if the property values go upby forty percent or the tax rate simply
goes up by forty percent. Sothose are details to be washed, you
know, I guess to be ironedout later. Are well, it's time
for a break. Our fund numberfive one, three, five seven,
five ninety six five four call us. We can help, but stay tune
you listening to the Sound Money InvestmentShow with Brown Financial Advisors here on fifty

(22:48):
five KRC the Tax Station. Welcomeback to the Sound Many Investment Show.
A Brown Financial Advisors. I'm GreggBrown and I'm James Barton. We are
independent Ria registered investment advisor firm workingfor a client's not companies. And it

(23:11):
really does all start with the plan. That actually means having a plan,
knowing what you own and why youown it. So whether you're seeking to
Boston old four one K four threeb IRA rollover, investment planning, retirement
planning, income planning, tax planning, social security maximization, our Roth conversion
analysis, anyway analysis and for someperhaps even in service rollover all those are

(23:34):
more we can help five one three, five seven, five nine, six
five four Our website Brown Financial Advisorsdot com, email team at Brown Financial
Advisors dot com, and our homeoffice is in Milford, but we also
have locations in Blue Ash, Westchesterand Florence. Y'all all right, schucking
retirement statistics that you should be awareof. You're gonna skim this stone across

(23:55):
the old farm pond. Get movingstatistic number two Americans are losing twenty four
billion per year and unclaimed four weekfour three B company matches. Sounds like
those unclaimed assets that you just yougo when your research and lo and behold
there's money with your name on it. Well sort of kind of, you
know, people not saving enough forretirement is one real statistic leads to this
other one. What contributes to that, Well, part of the contribution is

(24:17):
not making a contribution or a sufficientcontribution, or maximizing your contribution relative to
the match and your employer sponsored plan. Wherein let's say that you do six
percent up to six percent of yourannual pay as a contribution. Let's say
they're doing fifty percent of that upto a max of three percent, and
you're not doing enough to get thefull three percent. You're leaving money on
the table because the money that thecompany matches would be considered free money.

(24:41):
Free money you're leaving behind each inevery single year, plus the time value
of money multiplied out can be ahuge amount and impact over time because there's
a huge number of people not doingjust that, essentially leaving the free money
behind. Typical employee is missing outon nearly fifteen hundred dollars of free money
each every year, which extrapulates tobe about forty five thousand dollars over twenty

(25:03):
year period. So in general,no contribution equals no employer match. Let's
see your company again, We'll doa three percent match some higher and of
your actual pay and you're putting threepercent of your paycheck towards the company plan
each pay period. Your employer wouldbe matching that three percent. So really
it's your three they're three, that'ssix or it's not, and it should

(25:25):
be. You know, whether youdo anything above that, we get it.
You're just putting more money into apotentially trapped tax trapped bucket of money,
money that's not going to be taxedtill later. Now, James mentioned,
unless you do a roth version ofyour four week which you pay the
taxes now, you're paying it onthe seed, not the harvest, the
bountil full harvest later. That canmake a lot of sense. We want

(25:47):
it to be the right number,the right mix, for the right purpose,
according to the right plan for you. James. Well, and if
this helps any of the government's aboutto force people to start doing more rough
contributions, which can be a blessingin disguise. Nevertheless, when it comes
to the level of your contributions,if you have sufficient cash flow, and
again it's all part of having aplan in the first place. You know,

(26:08):
have a discussion with someone such asas your financial advisor to find out
maybe what is the best approach.Is it to max out your one case,
your four three b's or is itto start splitting out your investments and
privatizing your investments with iras and othertypes of non IRA investments. So yes,
remember this a non IRA or justa regular Plano brokerage account can also

(26:33):
be a retirement account depending upon whatphase of life that you're in. Now,
going back to the contribution numbers,this has just kind of change the
percentages to dollar amounts. Maybe sometimesthis helps as far as the math is
concerned. Is in terms of dollars, what does three percent mean? So
if your annual salary, let's justsays sixty thousand dollars, three percent of
that is eighteen hundred dollars, whichis one hundred and fifty dollars per month.

(26:56):
Employer, then matches. If yoursalary is one hundred thousand dollars,
a three percent contribution is three thousanddollars, which is two hundred fifty dollars
a month. Remember plus the matchright, so far sounds pretty doable.
And your older self, if youthink about going back in time and you
say well, your older self willthen thank your younger self how many down

(27:17):
the years that you have to retirementfor having done this. Now, when
we get to the why does thiseither happen or why does it not happen,
A common answer or maybe an excusethat we hear for people who don't
participate is that they need the moneynow and they can't afford the hit to
their cash flow. That right thereis the number one reason where I should

(27:40):
say excuse of why we have sucha large retirement savings gap. There are
ways to reduce costs and expenses inyour everyday life and that will help you
save more for retirement. You justneed to be willing to build a plan
so that you can be prepared orat least better prepared for retirement. Greg
Well Statistic four. Actually, yeah, let's just kind of continue. I

(28:03):
guess I'm jumping ahead a bit becausewe've we've talked about the number of seniors
jumping into or falling into bankruptcy.Very sad the age sixty five and older
filing bankruptcy has It was like twopoint one percent of seniors eight sixty five
and above in the mid nineties,and that has escalated to a much larger
number. Why well, inflation,not being able to keep up with enough

(28:26):
cash flow in retirement, spending more, bailing out loved ones, taking care
of healthcare needs with the larger increasein healthcare is a portion of inflation than
other, and then being in anage group where you need more of it.
Okay. Another statistic would be thirtypercent of Americans have taken in early
withdrawal from their retirement account. Whatimpact does that have? Well, since

(28:48):
the topic of four one ks andretirement planning is relevant to maximize your contribution,
receive your match, we'll watch outfor the trap of when three and
ten America can dip into retirement savings. There are consequences. It reverses the
time value of money, the buildingthat you're doing towards retirement. You're tapping
into something that unless you take itfor the proper reasons of certain hardship criteria

(29:12):
or conditions, it's going to comeat a cost of being at taxed withdrawal.
So you have the money coming outthat's affecting your future, you have
the money coming out that's being taxed, and you have the money coming out
that maybe taxed is being an earlydistribution if you're not fifty nine and a
half, so incurring penalties in thesedistributions and in that effect on your future

(29:33):
retirement saving. So a couple ofcommingled things there we talk about thirty percent
of Americans taking or the withdrawals fromtax deferred accounts like their four own case,
and through in there that the impactof age sixty five and better people
filing bankruptcy at higher levels. Verysad combination of statistics right there, James,
Well, a thought on the insteadof taking it from your retirement accounts,

(29:56):
maybe still look at the bank ortaking out a loan from the bank
as an option. I know it'sa cost of money issue, but yes,
when you say, well, tappinginto your home equity using a mortgage,
and again this is assuming that you'rea homeowners, that you have a
mortgage or the ability to take outa loan against your home. Look at
the interest rates and I know thatthe interest rates has spiked up recently.

(30:19):
The cost of money is a factorhere. But if your cost of money,
let's just say, is seven percentwith the bank, which is not
an unreasonable number, compare that towhat your income tax rate would be.
And on top of your income taxrates. What happens if you get penalized
another ten percent on top of that, So if you're in the twenty two
percent federal tax bracket, you alsohave the factor in the state, so

(30:42):
maybe you're looking more like twenty fivepercent, and then on top of that
you have a ten percent penalty,So it's almost like you have a thirty
five percent charge or tax on whatyou've taken out of your retirement account.
And then on top of that,you're using that as your cash flow.
So there's the opportunity cost of nothaving those future funds for retirement because you've

(31:03):
used them now. So that's wherethis kind of becomes again. This is
why it's so important to actually havea plan in place, is maybe again
get a second opinion so on fromyou know, from such as US that
can help you make this decision andmaybe make a better decision about where you
should get these funds from now.The next one, and this is I

(31:26):
think Gregg touched on before about thenumber of seniors declaring bankruptcy has more than
tripled. And yes, maybe thisis compared to what compared to WIN,
but going way back in time tothe nineteen nineties, only two percent of
seniors age sixty five and above.Is what we mean by the seniors we're
filing bankruptcy. Fast forward a courseto a couple of decades later, the

(31:48):
rate has more than tripled. Oneof the main reasons is because of medical
expenses. Yes, this is alarmingnumber to see considering that the limited number
of options at seniors have to makemoney or to replace the money or replenish
the money. But according to theEmployee Benefit Research Institute quote unquote, without
a job or or reliable income streamto convinced lenders otherwise, seniors may have

(32:14):
a hard time opening credit cards,securing transportation, or even running a home.
So we just talked about some statisticsthat relate to people not saving enough
for retirement. Now we're talking aboutpeople who are filing for bankruptcy in retirement.
The math unfortunately starts adding up.Yeah, when you look at another
statistic, eighty seven percent of babyboomers got a D grade on the retirement

(32:37):
quiz. So boomers those are bornbetween nineteen forty four and sixty four means
they're currently between ages fifty eight throughseventy nine. According to study the American
College of Financial services. Eighty sevenpercent of baby boomers who responded to a
quiz a survey their score it couldnot be above it was not above a
D. And that is based ontheir traditional grading skill. You know,

(32:59):
like A through F D is notgood D. I'm not saying D equals
dumb. And you know you can'teven say stuff like that anymore, you
realize that. Or you could say, the person who graduated from medical school
with the score of sixty five,the D stands for a doctor. Yeah,
your doctor. Now, doctor's outthere. That's not meant to find.
That's an old joke. And canwe can we have some levity here

(33:20):
just for a moment, because wehave other you know, we could pick
on our own practice or own financialservice industry. We could not leave the
attorneys out. You know, everyonelikes to throw in an attorney joke,
etcetera, etcetera. So, butnearly sixty percent of retirees, you know
what, don't budget for entertainment andactivities. Those are some of those expenses
that before, you know, couldthey just sneak right up? Well,
I want to do that, andI want to do that. I want
a good seat, not a badseat, and I want you know,

(33:42):
I want the food and the beverageand all the stuff that goes with it.
And how about a little VIP experience. Why not? And it's just
some of those areas of a budgetget blown out, gobble up cash,
and there's no wonder people fail tosucceed at a score better than a D.
But the takeaway statistic in this isdon't become a statistic in this area.

(34:05):
Back to planning, back to understandingretirement cash flow needs forms of income,
ways to solve the gap of incomefrom investments and have some kind of
budget in the fixed income phase ofyour life, that being retirement. You
should trademark that one. You knowabout the statistic not becoming a statistic.
Anyways, our funder about the officefive one three, five seven, five
nine six five four call us wecan help, but stay tuned. Listening

(34:28):
to the Sound Mighty Investment Show withBrown Financial Advisors here on fifty five cars
the talk station. Welcome back tothe Sound Money Investment Show with Brown Financial
Advisors. I'm Gregg Brown and I'mJames Burton. We are a registered investment

(34:49):
advisory firm. We are independent.We do work for clients, not companies.
Our fund number five one three,five seven, five nine, six
five four. Website Brown Financial Advisorsdot com. Email team at Brown Financial
Advisors dot com. Our home officeis in Milford, Blue, all sub
locations in Blue, Worcester and Florence. You know, if you're out there
listening and you're thinking, gosh,this is I just don't know where to

(35:10):
go, what's the next step?Discontact us. We'll get your second opinion
the health of your wealth, completeplanned recommendations, full analysis. It is
without obligation. That means no cost. You come in, spend a little
time. We'll invest time and resourcesin you. Help you out. Be
clear, share all the recommendations.You're free to use in any way you
choose, including if you see afit, want to work with us?
All right here for you. Ifyou're out there looking at rolling over four

(35:35):
and one K, if you're outthere confronted with a company buy out where
it's time to leave the company andthey have a package for you to assess.
If you're looking at pension decisions,lump sun, monthly payments, some
combination, whatever it might be,we can help you. We will help
you, and would like to dothat. James kind of a recap of
things so far on these statistics,Oh, those termatistics. So one in

(35:58):
three Americans have virtually nothing safe forretirement. That was the first one we
talked about. Number two, Americansare leaving behind at least twenty four billion
a year in unclaimed company matching.That means of your four in case your
four three, these other types ofemployer sponsored plans not contributing up to the
match people will be leaving behind atleast twenty four billion dollars a year.

(36:21):
Number three, thirty percent of Americanshave taken early distributions from their retirement accounts,
so they're cannibalizing their retirement accounts tomake ends meet for today. There's
a problem with that. Number four, the number of seniors declaring bankruptcy has
more than tripled. Number five eightyfive percent, I'm sorry, eighty seven
percent of baby boomers scored a Don the retirement quiz. So education is

(36:46):
lacking when it comes to retirements andretirement planning. Number six, that's where
we're up to now. Forty sixpercent of Americans are just guessing at how
much money they will need for retirement. So this is where nearly half of
all workers surveyed acknowledge that they weresimply winging it or guessing at how much
are going to need to save forretirement. Only twelve percent had used a

(37:07):
retirement calculator or worksheet or done sometype of analysis to help them get an
accurate estimate. Gen xers baby boomersestimated they would need about five hundred thousand
for retirement. Millennials, I guessare more frugal. They estimated that they're
only going to need four hundred thousanddollars. Multiple studies, however, put
the average cost of retirement at arobust seven hundred fifty thousand dollars. And

(37:30):
if you reside somewhere what they i'dsay a higher cost of living, you're
likely going to need at least amillion dollars when it comes to retirement.
Big factor here is longevity. Soif you're one of the forty six percent
guessing, well, start by guestingor estimating how long you expect to live,
and then perhaps add another five toten years to that figure. So,

(37:52):
according to the Socialecurity Administration, menaged sixty five so think but this
way, you've already made it toage sixty five. Now you have a
seventy eight percent likelihood you're going tolive at least ten more years. Women
have an eighty five percent likelihood ofagain making it at least ten more years.
And there's also a twenty five percentchance you'll live past the age of

(38:15):
ninety and a ten percent chance you'lllive past the age of ninety five.
So if you go back and youthink about the typical retirement age being in
your mid sixties and you're needing tofund or being able to afford a retirement
that could last not just two decadesbut three decades, that's an expensive price
tech. And don't forget about inflation. Add at least three, maybe even

(38:39):
five percent annually when estimating your annualliving expenses, and what's the cost going
to be not just this time nextyear, but in five to ten years
from today. Okay, next statisticwould be something it might surprise you.
A couple will spend about two hundredand sixty thousand dollars on healthcare throughout retirement.
You might think, well, we'rehealthier, so it's going to be

(39:00):
less now. Sometimes you know,just statistically speaking, if you're healthier,
you live longer, you have moreopportunity over a longer period of time to
spend some of your money on healthcare, which will eventually increase the older you
get towards the end of life cycle. So to yes, no, maybe,
will you spend less because you're nothealthy, Well, if you're not
around long enough to spend much,that could be true overall, Will you

(39:21):
spend less because you are healthy?Nope, We just pinpointed that eight sixty
five and above will spend a goodamount of money, about a quarter of
a million dollars because the fact thatthey have more time to spend it on
things like copays, deductibles, medicalrelated prescription expenses. All the primary reasons
alone. And that's even before youget to the component known as long term
care, which will be a blowoutof expenditures for one either one or both

(39:44):
of you need a plan of somekind. Don't just change addresses one day,
go to the nursing home and think, oh, now, what are
we going to do? We wantto help you with all the above,
So just kind of scooting right throughthat one. Healthcare expenses in retirement Now,
it doesn't mean you have to havemaybe the traditional long term care insurance,
although that is an option, andif you already have that type of
insurance protection. Certainly, don't cancelit yet before you talk to a qualified

(40:07):
financial advisor. But when you lookat different ways to potentially pay for nursing
home stay, maybe a way todo this is look at something called an
asset protection plan that means you havean asset such as either life insurance or
an annuity, but again some typeof an insurance plan. And then with
that there's a writer that would helppay for potential nursing home costs. Either

(40:30):
way, have a plan because mostall long term care solutions are extremely expensive,
but so is long term care unplannedfor. Hey, you know sleep
good at night money. We havea lot of sleep good at night solutions.
James tell us about why you knowpeople lose sleep and you don't have
to. Yes, fifty six percent. That's a next statistic. Fifty six
percent of Americans lose sleep when theythink about retirement. This is about the

(40:52):
stress, right, so you knowthis is part of the planning process.
The final this is what we wantto bring up to day. Is that
dealing with the financial star retirement,but more about the mental side. According
to Greg's favorite the Ramsey solutions,about fifty percent not a fan. Not
a fan, go ahead, there'sirony there. So fifty six percent of

(41:14):
Americans are losing sleep when they thinkabout retirement. Anxiety is the main feeling
they requate with their financial future.And on the flip side of this,
if you have a solid financial planset of retirement, you'll likely not only
rest easier, but you'll sleep goodat night. Unfortunately, today we see
many people who do not have aplan, and therefore they're the ones that

(41:34):
are losing sleep about it. Sothat's that's where we are today and that's
where we can help Greg. Yeah, if you want some sleep good at
a night solutions, it can besome of our Puffort index strategies where it
absorbs from the downside, participate inthe upside. I'm not talking about an
annuity. Of course. If youwant fully insured investments, which half of
your money you're willing to lose,will that happen? Maybe fully insure against

(41:57):
market risk. Also get some guaranteesof in come. Like income writers.
You want the best product. Itpays you the feature and benefit, not
a bunch of commissions to an insurancesales Termite think we're excellent source for solutions
because we're your financial advocate where yourfinancial fishery will help your solutions, like
even a self funded pension so youcan I'm guaranteed income every month for the
rest of your forever. That couldhelp with some sleeping better or if you

(42:20):
like some guaranteed rates, we havesome CD rate type annuities rates north of
like five point three percent for threeyear and upwards a five point five five
point six better in the bank onfive year solutions. You know, just
mix it all around. In sometraditional market risk of appriate risk over time
for the reward. You need tohedge inflation, have liquidity, balance out
your plan. We're balanced planning typepeople. So therefore the importance of planning

(42:43):
before and during your retirement, notto take away from today's show, should
be plan ahead, avoid any kindsof negative impact in your retirement. Think
about that even just for a second. Whether it's you need to travel,
You got to plan a trip,right. More people plan their next vacation
they do retirement. That's another statistic. Don't be one, you're your spouse,
whoever it's going to lead in thearea of finance. We want to
bring everyone along over the course oftime. So something happens to the quarterback

(43:06):
go down in the final plays ofthe game, we can step in and
bring the home team onto victory.You know, if you're yourselfer, this
financial phase of life will disappoint you. You may have been brave all seasons,
a good season market investor, notafraid of market risk, doing it
in your own way. Well,please know this financial phase is different.

(43:27):
You don't go to pediatrician anymore.You probably seek the help and guidance of
a financial professional at specializens. Inthis financial phase of life, you could
do the exact same thing you didin accumulation phase and have a complete failure
as a result in the distribution phaseof retirement, just based on sequence returns
alone and other risk. Do notwing this. You have not done it
before. You may get one shotat it best, and if you fail,

(43:51):
there's no do over. We wantto be literally your GPS, your
compass, your guide through a placethat we've been before. We can take
you through with a high level ofprobability and success versus you attempting this at
home, or you trying to usea broker or a bank or some platform
that doesn't really work for you.It all matters. Plan for your retirement

(44:13):
life today. It's never too late. It's never too early to do the
right thing. Our funder about theoffice five one three, five, seven,
five nine six five four again fiveone three, five, seven,
five nine six five four call usWe can help now on behalf of Greg
myself, James, thank you forlistening today, Have a great week and
remember this sound money where good thingsare believable, achievable and true for you.
Advertise With Us

Popular Podcasts

Stuff You Should Know
Dateline NBC

Dateline NBC

Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com

The Bobby Bones Show

The Bobby Bones Show

Listen to 'The Bobby Bones Show' by downloading the daily full replay.

Music, radio and podcasts, all free. Listen online or download the iHeart App.

Connect

© 2025 iHeartMedia, Inc.