Retire Smarter by Avoiding These Critical Mistakes

Episode 7 : Audio automatically transcribed by Sonix

Episode 7 : this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
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Producer:
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Producer:
Welcome to All Things Financial, the show that helps upgrade your financial literacy. Trey Peterson and Yelisey Kuts are retirement planning specialists here to provide a unique and conservative approach to managing your money. Now here are your hosts, Trey Peterson and Yelisey Kuts.

Trey Peterson:
Welcome to All Things Financial podcast. Trey Peterson and Ryan Moffett. And I'm excited today because we have, uh, one of our advisors, Ryan Moffett. Joining me is Yelisey is finalizing and studying for his CFP, which is next Tuesday. And if you don't know what that is, that is, uh, the license to be a certified financial planner. And in our industry, it's probably considered the top, if not one of the top two designations that somebody can achieve. So we're cheering Yelisey on as he adds that certification, uh, which is significant. Uh, but welcome, Trey Peterson, Ryan Moffett, today we're going to be talking about retiring smarter by avoiding five mistakes. And we're going to focus on those before we do. If you're new, uh, you can go to ATF Podcast.com. This is episode number seven and you can check out the first six, as I think that, uh, we're having a good time. And I think there's a lot that people can learn as they jump in, um, really quick. If you go to YouTube and you type in All Things Financial, you'll see different clips of us there in addition to our website. And really, our goal, uh, through this podcast is to help educate people so they can retire once and retire. Well, so if you're in the Burnsville, Lakeville, uh, within about an hour of us, uh, we can meet in person. If you're outside of that. We love doing zoom appointments. And if you're preparing for retirement and you don't have a retirement planning specialist that does holistic planning, whether it's Social Security, Medicare, investments, tax strategy, we have experts and we do everything in one place.

Trey Peterson:
So, uh, feel free to get a second opinion from us. You can find us at G wealth.com. And you can reach out to my team at (612) 286-0580. So today five mistakes to avoid so that you can retire smarter and happier. We're going to talk about why Americans love pensions, whether it's from the company or a self pension. Uh, we found that people are happy with guaranteed income. We're going to talk about why now is the time to build your retirement plan. If you're in that 50 to 60 range and you know that, you know, really you can see the light at the end of the tunnel, we're going to talk about what are things that you should be doing if you're five years, ten years out and 15 years from retirement. And then we'll also focus on what if what if you're within two years, whether that's three months or two years, what should you be doing to make sure that you're set up to retire? Well, and then we're going to talk about top vacation destinations for retirees, which is maybe different for people in different areas. Uh, but we're going to talk about what that looks like. So, Ryan, why don't you start us off with the quote of the week.

Producer:
And now for some financial wisdom. It's time for the quote of the week.

Ryan Moffett:
Yeah, absolutely. Uh, Warren Buffett, we all know the name, uh, one of just the absolute masterminds when it comes to looking at the market and investing and financial planning, etc.. Uh, he has a quote, and I think this is probably some of the best advice you can have, period. Right. But it's good to learn from your mistakes. But it is better to learn from other people's mistakes. And Lord knows we've all made mistakes and hopefully have learned from all of those. But wow, when you learn to start learning from other people's mistakes, you can avoid them on your own. Life gets a lot better and a lot smoother. Absolutely.

Trey Peterson:
Uh, I think the other thing, too, is you want a retirement plan that gives you a clear vision for what your retirement plan is going to look like. I think a lot of people think that retirement planning is just knowing what you have in assets and an idea of what your expenses are. And I think it's so much more than that. So we're going to focus on that. We're going to talk about Social Security. You know, I think Social Security is one of those areas that so many people think it's synonymous with retirement. They retire and they turn it on. And we're going to talk about how you can use your Social Security to be strategic. Then we're going to talk about an income plan. One of the things that I would say is if you ask me, Trey, I'm within two years of retirement, what's the number one thing that I need to do? You need what I would call as a spend down plan, knowing which buckets to pull from and in what order. And really what you need is a sound investment strategy that's flexible, that can be adjusted as your health. Changes that maybe you move states as you downsize as you upsize. So we're going to talk about all those key components. But Ryan what would you say. Mistake number one is that we see most often.

Ryan Moffett:
Yeah. Mistake number one. And honestly, this this seems, uh, you know, like like almost too easy, but just simply failing to plan, period. Right. If you, if there's no plan in place, many people we meet with constantly just go day by day, month by month, year by year. And they know retirement is coming. They know that eventually they will shift from one phase to the next, right? They'll work and save years, uh, to the preservation and spend years enjoyment years. But without a plan, it's it's misguided, for sure. And without a plan, uh, you encourage more mistakes. Uh, it was, uh, here a little while back, probably a year ago or so, and I met with a great couple who came into my office and just getting to know them a little bit, and I said, great. What are your goals? What can we accomplish today? And, you know, they were telling me a little bit about themselves. And she said, well, I've been retired for 2 to 3 years, you know, semi-retired. And he said, well, and I retired two weeks ago. And then there was this long pause, and she looks at me and she says, and we're trying to figure out if that was the right decision or not. So no pressure on the meeting at that point in time, right? Uh, but honestly, just simply not thinking about it, not looking ahead, not saying, hey, what do all of these pieces to the puzzle look like once we actually pull the trigger and look to retire? So simply moving forward day by day, month by month, without any type of plan really is that mistake number one. And I see it frequently, you know. Yeah.

Trey Peterson:
Well, I think that's true. Uh, many people know that saying is, you know, failing to having or how to say failing to plan is planning to fail. So do you have a retirement plan that's different than just hopefully your advisor makes you money this year. So, uh, mistake number two, mismanaging your tax advantaged retirement accounts. So a couple of the mistakes that we see people make often is they borrow money from the 401 K, whether that's to purchase a vehicle to pay themselves the interest to purchase that boat that they've been waiting on to add on, uh, that beautiful four season porch to their house to remodel their kitchen. It's very common that people borrow against the 401 K, but one of the mistakes that we see is that they don't manage the timeline and they end up retiring before the loan's paid off. And now when they retire, they have to pay all of that off. Basically, when they quit contributing to the 401 K. So you either have to, uh, basically pay it all out of pocket or you have to take it as income. So if you borrowed 30,000 and you owe 15,000 and you retire and you haven't paid that back and you make 100,000 a year, now they're going to add that $15,000 to your income.

Trey Peterson:
And now obviously you're paying more taxes versus having just paid it back, uh, without the tax piece. So that's mistake number one. I think mistake number two is we see people take early withdrawals. You know, one of the things, Ryan, that you and I have seen is the people that have done a great job saving, uh, I don't want to say they've been lucky, but there's been a little bit of luck. Uh, there's a book called The Millionaire Next Door by Thomas J. Stanley. And one of the things that he talks about is that a lot of average Americans were successful in not having gaps in their careers. Now, obviously, you and I don't have total control over that, but one of the things that we've seen is people that have not been successful is they had two, three, four pay gaps where for six months or a year at a time, they had to borrow from their 401 K to stay afloat because they didn't have income.

Ryan Moffett:
Yeah. Mistake number three. Uh, right along with mistake number one is not planning, but not planning specifically for Social Security. There's a lot of information and a lot of different rules and strategies that we see that can really benefit people when it comes to when is the best time to take Social Security. So turning on Social Security is not always synonymous with when you retire, right. You can delay Social Security beyond that. Um, sometimes people will scale back their working and start collecting Social Security. It depends on what type of industry you're in. It depends on how much, uh, energy you have left at the end of the day, etc.. Right. But when you look at Social Security and coming up with a plan for that, it's just as impactful as what your 401 K or your IRAs or your Roth or whatever the case may be, is, um, many people rely on Social Security, I would almost say too heavily. Uh, so when you look at your plan, you know, for example, if you're married, what are the spousal benefits that you may be eligible for if eligible at all? Right. When you look at it and say, hey, one spouse has a large benefit, one, a spouse has a smaller benefit. Is there a strategy there so that when one. Passes, the remaining spouse can be in as good of shape as possible. Uh, Trey, you referenced this all the time, and I love the way you communicate this. But, you know, if somebody with a small benefit amount.

Ryan Moffett:
Right, maybe they were a stay at home parent or they, um, helped out caretaking for their own aging parents, and they have a much smaller Social Security benefit. You know, typically what we see is they take earlier rather than delay it all simply because they're not trying to get as much of their benefit before they're gone. They're trying to get as much of their benefit before their spouse is gone, because if their spouse passes first, they end up with their spouse's larger benefit. Right? So if if, uh, you go with the water cooler talk and it's, hey, just take your Social Security as early as possible, you'll never get as much back as you paid into it. Right. And I think we've all heard comments like that, but that may not be the best long terme strategy. I think some of the other things that we see and Trey, you can dive into this because you know it well, but the other things that we see is just the taxation on it and is there a plan within that spend down plan to say, hey, if we take Social Security now versus if we have one person take now and one person delay for a period of time, what does that do to the taxation component? I think that as part of your spend down plan is a huge component that is oftentimes overlooked if you're not working with a professional, if you don't know what provisional income calculation is, etc..

Trey Peterson:
Well, I think one of the other components that a lot of people don't know, that the Old Age and Survivors Insurance Trust Fund that supports Social Security right now is only fully funded until 2033. After that, it's funded at 77%. So that means that if Social Security doesn't make any changes, your Social Security benefit in only ten years, which, Ryan, I remember talking about this, you know, eight years ago and thinking, we've got 18 years and it's coming fast, but right. If you if Social Security doesn't figure some things out, your Social Security is going to get a 23% pay cut for the rest of your life. So one of the things that I tell people is. Have you sat down and looked at a plan to say, if Social Security gets reduced by 23%, how does that impact our retirement? If you have not had an analysis done projecting something like that which is likely to happen, we'd love to sit down with you and show you how you can plan for that gap. My phone number is right on the screen, but what I would do is I would call in and let one of my administrators know that you would like to do a Social Security and a retirement analysis, and we can show you how is your plan changing or how does it change based on Social Security not being able to pay you out for the rest of your life? So we'd love to help with that. Mistake. Number four emotional investing. Ryan, you want to jump into that? Yeah.

Ryan Moffett:
Emotional investing. So this is a really interesting component. And we referenced Warren Buffett earlier. And there are some of the other big ones out there. John Bogle, he was basically the founder of Vanguard. Right. And he actually has a quote, this isn't the quote of the day, but I like it. And he when he talks about emotional investing, when he talks about people pulling the trigger and saying, hey, I am really nervous about the market and I'm going to move all my funds from here to there, etc.. Uh, John Bogle is actually quoted saying that the evidence is overwhelming, that statistically, the longer you're in your funds, meaning don't get emotional about it, uh, that the more money you'll make. Long terme. Right. So ultimately, what we oftentimes see is as the market goes up and down, we're also looking at investor confidence. We're also looking at it and saying, hey, what is the emotional piece to this? Are we confident in the market right now or are we nervous about the market right now? And we actually, uh, tray, you and I just had this conversation with a gentleman, uh, last week, and he was I hate to say it this way, but he's kind of bragging about how he pulled all of his funds out. Um, and he had, like, 1.1, 1.2. He pulled everything out, and he shifted it when the market was going to go back, go backwards, and then, uh, you know, time to just.

Ryan Moffett:
Right. Went back in when the market was down and he made all this money and and those things can happen. Right. But if you're not, uh, if you're not doing this every day, just like anything else, right? For me, when I look at it and I say a home project, I have some landscaping that I want to get done. And I'm looking at saying like, okay, do we put a retaining wall in here? Do we? What do we do? Well, sure, I can research it and I can probably figure out how to install a retaining wall, but I don't think my wife or my kids, and it's probably not my neighbors for sure. They don't want me doing the work because they know that probably 1 to 3 years down the road, that retaining wall is not going to look as good as if I would have had a professional doing it. And the only reason I would do it is just the emotional aspect of it. I love the hard work of it. Hey, it's something that I can be proud of. It's something that, hey, I made this decision, I designed it, all these other things, but ultimately it's not necessarily the better decision when you're saying, what's gonna make sense here?

Trey Peterson:
And I think it's impressive because I'm so proud when I come home and somebody already did the work. Uh, it's so.

Trey Peterson:
Great, you know?

Trey Peterson:
Yeah, I, I'm a huge fan of, you know, you talk about there's a book called The Five Love Languages and mine is Acts of service from others, meaning that I love paying for somebody else to get things done with excellence for me. I'll never forget my first townhouse. I remember thinking just because my dad was in a handyman doesn't mean that I can't learn these skills. And, uh, I watched all these YouTube videos on how to take the popcorn off the ceiling of my townhouse, and I was like, I can do this. Just because my dad isn't good at this doesn't mean I have to be bad at this. So I watched all these videos and I soaked the ceiling and I scraped it. And if you've never scraped a popcorn ceiling, I think it's the messiest job that anybody could probably do. And I ended up not just ripping the popcorn, but I, like, destroyed the sheetrock and I hired someone else after I attempted it. And they go, hey, you know, it's going to cost us more to repair the things you've broken. It would have been cheaper had you just called us in the first place. So I learned my lesson. I said I can either get better or I can just hire people to do this. And, um, so the other thing that I'd say on emotional investing is, over the last eight and a half years, I've met with hundreds of families.

Trey Peterson:
And really, at the end of the day, even though that we're talking about taxes and Social Security and Medicare and expenses, really, at the end of the day, the name of the goal is financial peace. And one of the things I love about what we do is we don't have what I would call as a sales funnel or a sales process. We have an education process. But I think what people like about walking through that education process is if everything's going well, Ryan, we're not scared to tell people, man, you're managing the money really well, but we could potentially help you on the tax piece or you're doing great with taxes, but your investments are underperforming. How would you like having a partner that after fee has had a better average return than when you've currently been in? Now, obviously, past performance doesn't guarantee future performance, but one of the things I love is that we get to demonstrate the. A value that we add to people before they make a decision to come work with us. And one of the things I tell everybody is as you prepare for retirement, one of the things that you have to shift in your mind is you're going from 35 or 40 years from saving and being growth focused to now having a preservation focus, a distribution plan, a tax strategy, knowing which buckets to pull from and what order to make sure that you're not adding cost to your Medicare, to make sure that you're not triggering taxes, that pull in more of your Social Security to be taxed.

Trey Peterson:
In fact, if you're taking notes and you're in the on the podcast right now, I would encourage you to write down something called provisional income. Your provisional income is the formula for how Uncle Sam taxes you on your Social Security. And many of you know, if you're in Minnesota listening, uh, Minnesota just made a big change that I think is really positive is they, uh, were one of 13 states that only the taxes on Social Security. But one of the changes that we've made is if you're a married couple filing jointly and your AGI, your adjusted gross income is under $100,000, you no longer have to pay state taxes on your Social Security. And I think that's going to benefit a lot of people. They've talked about it for decades, and they finally implemented it here in 2024. If you're single, Ryan, what's the number? If you're single, your AGI needs to be under.

Ryan Moffett:
$78,000.

Trey Peterson:
78,000. And if it is, your Social Security is now, uh, tax free in the state of Minnesota, obviously you still have federal taxes. But one of the things I'll say kind of wrapping up, mistake number four on the emotional investing is, you know, over the last 12 years, as I've met with people, if the market's really good, you know, we're seeing great returns. And even though since Covid we've had a lot of volatility really outside of 2022 the market's been gangbusters. But what's interesting is when the market is good, almost everybody that I meet with tells me how they're comfortable with risk. Uh, they're okay knowing that even though they only have 25 years to 30 years, higher risk is going to pay off over time. But in 2022 and kind of that February, March of 2020, when the market was down, people had come in and they go, I'm preservation focused. I care more about protecting assets than growing the assets. So I think, you know, we have two jobs as retirement planning specialists. One of those jobs is to help people stick to a discipline. We want to help understand what your long tum goal is. And then when the market is up or down, we want to help you stick to the plan so that you're successful. Long terme. And we're not making big adjustments every six months.

Trey Peterson:
And then in three years or five years we look back and we didn't accomplish the goal. It actually reminds me of a couple that that we used to serve Ryan and, uh, during 20 20th February, right when the market dropped, this couple came in and they said, hey, we have, you know, two thirds of our money in the investments, uh, at Charles Schwab, we have a third of them in, uh, no fee annuities that has no risk. We'd like to move more of our assets into these no fee annuities. And they said, actually, we'd like to move it all there. And I said, well, here's the deal. We work under something called a fiduciary model. And based on our model, we have to do what's best for you. And, well, it's good to have some of your assets in an investment that, uh, you know, that doesn't lose funds. It is important also that you have some money in at least a conservative portfolio that's going to have higher returns over time. And so you'll say, uh, who's not on the podcast today? Who oversees all of the money at Charles Schwab? He stepped into the appointment and I said, yeah, I'll say, here's what these guys are wanting to accomplish. My concern is that we're going to move away from doing what's best for them.

Trey Peterson:
And yellow say, and I agreed that they needed to leave some of their assets in the market. And the couple leaned over to me and they said, actually, he did. He said, well, if you don't do what we want to accomplish, we're going to go somewhere else. And I said, hey, I said, uh, I understand that you're scared. I understand that it's it's nerve wracking that the market's down as much as it is. And many of you know, this February of 2020, during Covid, we had a significant downturn for about a month. And I said, but Long Terme, you're going to be thankful that I helped you stay disciplined and stick with the plan. And, uh, we stuck with that plan and they were thankful because the market came back and the market over the last couple of years, even though it's been volatile, they, you know, they've they've made great money. So I say that to say is that everybody is okay with risk when the market's doing well. But when the market's down they want safety. So you need a plan that is designed for you to win in a bull market and to win in a bear market. Ryan, anything you want to add to that?

Ryan Moffett:
Yeah, I think, uh, you know, the biggest thing that I would add to that is that in every area of, of life, it's always good to have someone in your corner rooting for you, right? Whether that's your career, whether it's, you know, you're working towards a promotion, whether it's, uh, you know, your spouse rooting you on, you're rooting your spouse on, uh, even kids. Right? My, a couple of my kids are old enough now where, uh, even even they root me on, which is kind of a cool thing. You know, my kids are like, entering these early teen years and everything, and they can even kind of root on dad. But you always need someone in your corner, I think, in every area of your life. And going back to, you know, the the original quote is learning from other people's mistakes is when you've got the right people in your corner in every area, they can also point out the mistakes that they've seen so that you can avoid them. So I really think that that's a imperative component to, uh, you know, when you're looking at retiring and saying, hey, what is our plan here? Absolutely.

Trey Peterson:
Well, that reminds me, uh, many of the listeners know, but many of you probably don't. When I was in high school, I had the privilege and the honor of wrestling for Apple Valley High School. And back in 2000, what would have been 2004 to 2007? Uh, yes. I'm in my mid 30s only, uh, but during that time we were ranked number two in the country, uh, for all wrestling, high school wrestling, and we were ranked number one in the state three out of four years. We took, uh, first out of, uh, the Minnesota State wrestling tournament, but I'll never forget my senior year. We had like 34 wrestlers in the varsity room, and we had 17 coaches, and many of them were all Americans, which means that for their college, they placed in the top six in the country, which is, you know, really your top, like less than 1% of athletes. And I'll never forget because one of my coaches, he was in his 50s. And when you're in high school, that's like an old guy. And, uh, in his 50s, he owned a construction company. And I looked up to him not just because he was a successful wrestler, but he was a successful business owner. And he said, Trey, and I'll never forget because he told me on a Saturday at a wrestling tournament where my wrestling partner, Jake Greeley, and I were doing sprints in a hallway until we basically were going to pass out because we were just working on cardio.

Trey Peterson:
But he said something to me that actually really helped me through high school, through college, and now in my business career. And he said, Trey said, you don't have to be the best at everything, but you need to partner with somebody who is, because in your life, a lot of your success is going to be dependent upon the people that are coaching you and the people that you do your life with. And so one of the things I found is in every area of my life, if I wanted to get fit, I needed to hang out with friends of mine that had patterns that made them more fit. If I wanted to be financially successful, I needed to talk with business people that had been financially successful. If I want to be a great father, I've had to have conversations with friends and with people that are older than me, that I've watched them have kids that have grown up to be great kids because I know there were things that they did that contributed to their kids success. And I think financial planning is the same way. A lot of the families that we serve, they did a really great job saving. And really, if you do a great job saving and investing, what that does is it provides options for you.

Trey Peterson:
But a lot of those families, they manage their money in a 401 K or in an IRA or with an outside advisor for 30, 35, 40 years. But what they don't have is an expert in their corner on Social Security, on Medicare, on estate planning. Most people don't have a tax adviser. One of the things that we found is most people have a tax preparer, and maybe that's you. Maybe you're using TurboTax and things are going great, but most people have a tax preparer and they think they have a CPA who's doing strategy when really their CPA is doing what I would call as, uh, plugging in information to a software program. They're doing tax prep, not tax strategy. And then they have a financial advisor, and their tax preparer and their financial advisor are not speaking to each other, and they're the middle person. So all of their tax strategy is on them. So one of the things I'd encourage you is if that's you, we'd love to do a tax analysis for you to show you some of the opportunities that are available to help you maximize what you've worked so hard for. And if you're listening and you're a big reader like, I am one of the people that I would encourage you to follow.

Trey Peterson:
His name is Ed Slot Slot. He's a CPA and he has a team of CPAs. They are the leading authority in America on how to pay the least amount of taxes on your IRA dollars. So what I would say is, uh, buy a couple of his books, start reading on how do we minimize our taxes? And you, you and I would agree on this, Ryan. We're blessed to live in America. In my opinion, we live in the greatest country in the world. We want to pay every dollar that we owe, but we don't want to leave any money on the table. So one of the things we encourage people is if you want to make sure that you're not giving more of your money to the government, and you want to protect it for the people that you love your spouse, your kids, that church, that charity. I highly recommend getting what we call as a tax analysis and a spend down plan that's complimentary. And what's nice about that is we educate you on the areas that we could potentially help you. What we found is about 80% of people that walk through that process have tax holes that they're not aware of, or tax loopholes that we can help them with. So, Ryan, what would you like to add to that?

Ryan Moffett:
You know, I think, uh, when we look at the total picture, we've talked a lot about Social Security, we've talked a lot about these different mistakes. And I think the, the, the last mistake to talk about is actually kind of a fun one, actually, because really the point is that retirement is not just about the finances, right? Retirement is about planning and saying, hey, I have worked five days a week or maybe even six days a week, right? I worked Monday through Friday, I had a Saturday and a Sunday, and now all of a sudden I've got six Saturdays and a Sunday, right? You've got all this additional time, you've got the time to do those home projects. You've got the time to visit the friends, the family, the grandkids, whatever it may be. You've got time to take the trips, to explore, to adventure. You've got all of these different things now ahead of you. Maybe you want to learn to play an instrument or whatever the case is, right? You've got this time now, and I think that's a huge component of planning out your retirement right now. Great. We're talking about the fun that we get to have in retirement. But how does that apply to my financial plan? How does that apply to my Social Security, etc.? Well, ultimately what we'll find is that especially in those early years of retirement, when you find that now I have all this time you're going to spend more than you think you will, at least for a period of time.

Ryan Moffett:
Right? And so saying, hey, what are the things that I want to accomplish? What are my dreams and goals? What are the things that I've always, always desired to do that now I can accomplish those needs to be planned out from a financial perspective, just as much as all the other components that we've been talking about, both today and in previous episodes. So looping those things in and kind of starting with the end in mind, saying, hey, I want to spend ten years traveling, you know, I want to do route 66 or I want to go to Europe or whatever it is, you know, mapping those things out and saying, if I need an extra ten grand a year on top of my normal expenses, I need an extra 15 or 25, whatever that number is. What does that look like from a tax perspective? Do I change brackets? Is there a strategy where I can minimize my taxation on those different areas? So I mean, really the most fun part about planning your retirement really is also correct. Uh, directly tied to, uh, the financial piece of your retirement plan as well. So where will you live? And we'll get into some of the conversation of where the best places to travel are, or even where the best places to retire, uh, as it relates to income tax and things like that. Um, and how do you just plan to fund your fun retirement?

Trey Peterson:
Yeah, that's really well said. I think, you know, one of the things that we see too is people plan for the financial aspect. Uh, but unfortunately, most people spend more time planning a vacation than they do their retirement. I think one of the things that we see, uh, of like, if you were to ask me. When you see people retire today, who is retiring with peace and who is retiring with stress, wondering what to do next. And I think one of the important things that isn't related to finances, but really it's related to what I would call financial peace or peace in retirement, is do you know what you're going to do when you no longer are spending 40 or 50 or 60 hours a week working? And I think one of the habits that we've seen of successful retirees is they've already started doing the things they want to do. They're just giving themselves the ability to spend more time doing them. And the people that retire and I would say look unhappy or look like they're lost, are people that waited until retirement to find their thing. So one of the best tips that I can give our listeners that's not related to finance, but really it's related to happiness, it's related to joy, is find how you're going to spend your time before you retire, whether that's volunteering at the Humane Society, whether that's volunteering at church, whether that's serving in your favorite nonprofit. My wife and I are six year old son had a big event last year where, as you know, Ryan, in the fall, we found out that he had a brain tumor and we were at Children's Hospital in Minneapolis.

Trey Peterson:
And we just decided, like, hey, we're going to start, uh, this year and we're going to pick like one weekend and we're going to go serve in the Ronald McDonald House to families that are going through hard things, because there was families serving there when we were there serving breakfast, serving lunch, serving dinners. And really they were just there to say like, hey, we're thinking about you. Uh, quietly. Some of them would say, we're praying for you. And, um, I say that to say is, you know, we pre-decided going through that, that we're going to make this a part of our annual volunteer time. So, uh, start finding those things now. Don't wait. The other thing I tell people is, you know, maybe instead of retiring, going from 60 hours a week or 50 hours a week to zero hours a week, consider going part time. If you're in a job or a career where you can do that. I think one of the surprising things is I've had a lot of clients that they were at a job, that they were getting burnt out, and so they decided to downsize. And they went from going they went from going, uh, they went from being an employee to a contractor. And what's wild is a lot of them started making the same amount 20 hours a week as a contractor as they were making for as a full time employee.

Trey Peterson:
And they're like, man, I should have done this three years ago, five years ago, ten years ago. Now, obviously it's not all about money, but if you can downsize your career over time instead of going from full bore to nothing, I also think that's really helpful. So last couple things I want to touch on. How what are you going to do during your retirement years? How are you going to spend your time? Who are you going to spend that time with? Be intentional about it. Uh, where are you going to live? We see people all the time that they have this dream of living somewhere, but they don't plan for it, and then they end up. I would say, talking about it and never making it happen. And so do you have a plan for where you're going to live, or are you going to upsize, or are you going to downsize? Uh, when you do downsize, almost everybody thinks they're going to save money, and they move into a brand new townhouse and spend the same or more, even though it's half the size. Do you have a plan to be talked with an advisor about that? If you've never talked with an advisor about downsizing and how that impacts your finances and your overall plan? Uh, I got to do that with a wonderful family yesterday. And one of the things that we found is when they sell their house, uh, they only owe 60,000. They're going to have like $600,000 of equity. The homes that they're looking at are only $400,000.

Trey Peterson:
So they got excited. They go, we're going to have an extra $200,000 to add to our retirement. Maybe that's some money that we don't invest for us because they don't need it, but they invest it based on their kids timing and when they're going to use it, which is a little higher risk. And they want to grow that money. So have you thought through some of those things or are you waiting for that to start when you retire? I want to encourage you to plan ahead. Uh, we've just found that people are happier when they walk and do a plan instead of retire and go, what is the plan? Uh, before we wrap things up, we got a couple other things that I want to touch on. Number one is some retirement tax strategies for tax season. And Ryan you're welcome to jump in. But April 15th is tax day. As many people know if you do not have somebody to prepare your taxes we've got a tax team here at Guardian Wealth Strategies. Uh right. Our partner from All Things Financial that's the Ria. We also have Guardian tax. Uh so if you don't have somebody preparing your taxes that's doing tax strategy, you can reach out to me through the website, through email or on our phone number. And we would be more than happy to introduce you, one of our tax preparers, to see if that's a great fit and if they can add more value than what you're already getting. But two things that I want you to consider.

Trey Peterson:
In preparing for retirement. Have you had an analysis done on your Roth account? Meaning are you maximizing the Roth? Are you planning for upcoming conversions? And then two, when is the last time that you're reviewed that life insurance policy to see if it still fits your current season of life? Last week we had five of the families that we serve that have joined our family here at Guardian over the last, uh, really just several months that we reviewed their life insurance policies, and we found that a couple of them no longer had a need for the life insurance because they're now self-insured, and they were able to move those policies into something that, uh, help them with long tum care insurance because they didn't have any coverage for long tum care. And then we had others that just said, hey, we've done such a great job saving and growing the assets. Let's just roll the cash value into into an investment because the house is paid off. We've got great assets. And then we had one that said, you know what, I still have a need for life insurance. But we replaced their old policy with a new policy that had the same coverage for half the monthly cost. So have you reviewed your life insurance recently? If you haven't, we've got a great team and we'd love to help you see if we can improve that. In case you're overpaying over or in case you are over insured. Ryan, anything you want to add to that?

Ryan Moffett:
Well, I think when you look at especially the tax piece of things, I know we referenced it earlier, but that Social Security component is an important factor in it. But really, when it comes to whether it's a tax advisor or whether it's a tax strategist, a financial planner, etc., oftentimes there's this barrier where people just have this notion that, gosh, it's probably expensive to have a strategist on my side and, you know, in my corner or it's probably expensive out a financial planner in my corner, etc.. But I just want to encourage you that, again, when you look and say, hey, what are all the pieces of my puzzle? Having that professional really map it out for you, walk through what the cost actually are and like Trey referenced earlier, what you're looking to find out is what is the value there for me and is having all this work done on my behalf and finding improvements in my plan and finding potholes that I can avoid. Now. Is that worth it to me? Yes or no? And nine out of ten would absolutely say yes to that. When they find a professional they enjoy meeting with, uh, it's their type of person, you know, and you can now say, hey, we get it. We we think the same way. This person is improving my situation and it's well worth, well worth any of the cost associated. Because ultimately you're paying to have your taxes done. Whether it's if even if you're doing it on your own TurboTax, you're paying a financial fees, if it's in your 401 K, right. So it's not like it's free as it stands anyway, right? Trey? I mean, these things already have a cost associated with them. So really that that benefit in finding and saying, hey, these other things that I've never looked into because I always thought I was going to cost too much. And now all of a sudden you find a ton of value that you may not have even thought was there.

Trey Peterson:
Absolutely.

Trey Peterson:
Uh, two things I want to share. Uh, number one is if you're having a great day, don't go to this website. But if you're if you're interested, there's a website that is also sharing our national US debt. And it gives an update second by second, which right now, by the way, is at $34.4 trillion. But if you go to US debt clock.com, you can look at that. And the only reason I share that is to say you don't have to be worried or be fearful fearful, but you need to have a plan where if the government does decide to increase taxes on 401 S, 403 B's Tsp's 47, which is very likely, do you have a plan for how you're going to respond to that and where your money is going to come from? And if less of that nest egg is actually yours, have you looked to see if you're in the next highest tax bracket because they push us up? How long does the money last? We'd love to help you review that. You can subscribe to our podcast, All Things Financial, wherever you listen to podcasts, and you can jump on our website at All Things Financial. Uh, actually it's ATF Podcast.com or Guardian Wealth Strategies G wealth.com. So g wealth.com.

Trey Peterson:
Um, the last two things I want to mention I've got these pulled up here, but uh, number one is you need a partner that's going to make sure that all of the pieces of your retirement plan are working together. Do you have a holistic plan or. Ryan, one of the things that I think is fun about today is typically when Melissa and I are on the podcast, I'm the story guy, and he's the, uh, statistician sharing about all the stats and all the findings and all the research. And today our, our listeners get two storytellers. And so, uh, you probably missed some of the the engineers probably missed some of the most recent stats, uh, from USA, who, you know, has that engineer mom. Um, but we shared a lot of different stories about families that have been successful and families that have made mistakes. And really, at the end of the day, the reason that we've launched this podcast is because we're passionate about education. One of the things I've found in my life is that when my money is in order, everything else in life is easier. And really our goal is to help you get your money in order. For a lot of our listeners, it's likely especially for those of you that are married, that your partner may be the person, or maybe you're the person that's running the investments in the finances.

Trey Peterson:
But if something to happen happen to you, your spouse wouldn't know what to do next. For those listeners, one of the things I'd encourage you if you love managing your investments, but you don't have a plan for what if something happened to you? We're a great firm for starting that relationship, just coming in to meet with us so that if something happens to you, your wife, or if you're the a woman running the investments so that your husband has a partner to take over because they may not be able to pick the funds like you do, they may not be able to run the expenses like you do. So I would say, do you have a plan for your spouse, a succession plan to make sure that your plan is is taken care of when maybe the person who's owning it can no longer own it? So you can reach us at gmail.com. My number is going to be on the screen. Ryan, anything that you'd like to add to today? I think we've had a lot of fun. We've covered a lot of topics.

Ryan Moffett:
Yeah. I think the, uh, the last couple things I'll just mention. And for the engineers out there, uh, this will be a bit of a stat, but, you know, looking at the plan and saying, hey, how do we cover every single piece? And the the mentality of, hey, Social Security gets cost of living adjustments. It's no problem. I've got news for you. It doesn't keep up with inflation. Right. Uh, this year is 3.1, last year 8.7. The year before that 5.9. And the year before that 1.3. So these are all the cost of living adjustments that we get on Social Security. But inflation every year has been more than that. Right. So it's designed to to pace but not keep up with. Right. And I think that's one of the things, uh, that we like to pay attention to. And, you know, we look at it and we say, hey, if we need some additional information, if we need to dive into those specifics, then that's what we really look to do, especially as you're planning your, hey, where do I want my retirement to be? Where do I want 90% of my retirement days to be? Do I want it to be in Minnesota where Trey and I are? Do I want it to be in Arizona or California or, you know, whatever state that may be? Or maybe it's just even traveling, uh, you know, overseas, you know, Mexico is obviously very popular, especially in the northern state, uh, population. Uh, but some people have that dream trip of going to Europe or Italy or France, Spain, etc.. Uh, and I think there's a lot of reasons, uh, that, you know, you need to make sure that those dreams can come true, but ultimately you worked hard. You deserve it. And you need to have a partner on your side for those plans. Yeah, I just.

Trey Peterson:
Wrote a stat that I can't remember what the source is, and we should always have the source, but 9,090% of Americans have a 401 K or a retirement plan. So I think it's actually really positive. The the part that isn't positive is that when the 401 K was designed, it was really designed to give us more flexibility for planning. But unfortunately they didn't do a great job of educating people. So what ended up happening is in 1989, 89.5% of companies in America offered a pension plan. And in 2019, only 8.5% of companies still offered that pension. Now, the nice thing about pensions is that when you retire and you have a pension, people don't have to worry about the market, meaning they have guaranteed income coming in on top of Social Security every single month. And when you look to see that, that number is dropped by basically 80%, there's a lot of people that have saved, but now their money's in something that's volatile, right? There's good years, uh, bull market years. There's barriers. Do you have a plan like in 2022, we're on the market drops, you know, where are we going to pull money from? Can we pull it from stocks? Can we pull it from bonds? I read an article.

Trey Peterson:
Uh, and actually, you could Google this. Uh, fidelity said that in 2022 alone that bonds were down 13 to 15%. Now, Ryan and I, uh, we manage the safe money at All Things Financial, and our partner LSA manages the risk money. But imagine if you didn't have a CD, or if you didn't have a fixed annuity or a fixed indexed annuity that can't lose money. And now you have to sell stocks or bonds at a loss because you need a paycheck. That's not a great plan for a bear market. So one of the other things I want to mention is maybe for you, annuities, a bad word. Maybe you're that word. And you think of what we call variable annuities, which are typically high fee, high commission products. There are good products out there for people that want. Want some safety that have low fees and no fees. Uh, nationwide actually has a wonderful product as well that instead of having instead of being so heavy in bonds, you have access to something that has less risk. Uh, has reinsurance through the Minnesota Guarantee Fund, and you can pull from it when the market's down where it's designed outside of fee not to lose any money. So if you've never reviewed some of the no fee annuities and maybe you don't like that word, but you're like, you know what? I've never heard of the no fee annuities.

Trey Peterson:
Now might be a great time to review. Would it make sense to have a portion of my assets in something that's safe? So anyways, we covered a lot today. We appreciate your time. I love teaching these classes, uh, whether it's in person or whether it's in a podcast, because we know that people have worked hard for their finances. We know that you're trying to do everything you can to steward what you've saved, and we want to be a part of helping you steward those funds, whether it's through our education process, the podcast, the classes, or whether it's through a partnership, because we can add value to you that you're not currently getting. So I'll just end with this. If you've never had a second opinion from Ryan, myself, or Yellow Coots, my business partner, I highly recommend getting one if things are going well where they're at. We have no problem telling you that if things can be improved, we'd love to point those things out to Ryan. Anything you'd like to say to wrap things up today?

Ryan Moffett:
No, it was a pleasure and an honor being part of the podcast today. Uh, to anyone listening looking for that second opinion, I look forward to meeting you, I truly do.

Trey Peterson:
Wonderful. Have a great day. Thanks for joining us. G wealth com and ATF Podcast.com. Have a great day.

Producer:
Thanks for listening to All Things Financial. You deserve to work with retirement planning specialists who care about your money, and take a unique approach to your financial and retirement needs. Visit All Things Financial.com and set an appointment today. Fixed indexed annuities can help protect your retirement savings against market ups and downs. Nationwide's peak ten can help protect against market risk and provide guaranteed income for life. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal. Apply to your income benefit base. Call us now at (612) 286-0582. That's (612) 286-0582 to connect with a qualified advisor. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio.

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