Your Retirement, Your Way!

Episode 30: Audio automatically transcribed by Sonix

Episode 30: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Welcome to All Things Financial, the show that helps upgrade your financial literacy. Trey Peterson and Yellowish Coots are retirement planning specialists here to provide a unique and conservative approach to managing your money. Now here are your hosts, Trey Peterson and Yellow say coots.

Speaker2:
Good morning. Welcome to all things financial. Trey Peterson.

Speaker3:
Yellow coots.

Speaker2:
And we're excited I think yellow said this is episode number 30.

Speaker3:
Come on man I didn't think we'd make it did you.

Speaker2:
For those yes I did. I did think we'd make it. For those of you that have not joined us before, we have a retirement planning show and it's really set up for those of you that are in and nearing retirement. And today we need to talk about your retirement your way. And we want to talk about some of the things that should be on your to do list for maximizing everything that you've worked so hard for. So before we dive in, if this is your first time, check out all things financial on our YouTube channel. Check us out on any podcast platform that you listen to. Uh, one of my favorites, I think it was episode number seven, was that USA, where we talked about the seven things that we've learned, uh, in seven years of business. Was it 7 or 14, you remember?

Speaker3:
I actually don't I if I had to guess, I thought it was like closer to episode 20.

Speaker2:
Okay, well, check it out. It says, uh, seven. Yeah, seven life lessons that we've learned that, uh, well, maybe share a little bit about who you and I are, but we really have a heart to help people that are in and nearing retirement maximize everything from your Social Security, getting on the right Medicare plan, the right supplemental plans, making sure that you have the right investments, the right risk tolerance, and that you have a financial advisor who's a fiduciary or maybe a CFP like my business partner, Yossi, a certified financial planner. That's making sure that you have all the right pieces and that everything is working together in order to give you financial peace and retirement. So if you have any questions, feel free to reach out. We'll have our emails on the bottom of the screen. Feel free to give us a phone call. We have our office right here in Burnsville, Minnesota. We have clients all over the country. So you say, why don't you jump into our quote of the day, as we like to say, and then I'll kind of talk on the outline of what we're going to talk about today.

Speaker3:
Okay. So this one's by Alan Larkin. Uh, planning is bringing the future into the present so that you can do something about it now. Really good.

Speaker2:
I think one of the things that we hear a lot and a lot of you know this, but you and I and our associate, Ryan, we teach a number of different retirement classes. So we have Social Security and Medicare. We have tax and retirement, which is really focused on minimizing your tax burden in retirement. And then we have an estate planning class and then a class called Retirement planning A to Z. But one of the things that we've found is the people that come to class, they're typically one month to maybe two years out from retirement. And really, what I would love to see as people that are 5 to 7 years out coming to these classes. But what we hear all the time is, oh, I'm, I'm seven years out or I'm five years out. So I'm just getting started. So I don't need all this information to to go further. And it's like, man, the more time you have, the more things that we can get in order for you to maximize what you've worked so hard for. Would you agree on that?

Speaker3:
Yeah. Yesterday, actually, I taught a class and a lady goes, hey, like, this isn't for me. I'm two years out, you know, so it's not always five and seven, like people have no idea. Like. And it's just to me, I think it speaks to how little planning people do in general. Yeah. Yeah. For sure. Get ahead of it.

Speaker2:
Yeah. Well, let's talk about what we're going to talk about. I'm a big fan of, uh, not surprising you. So, uh, one, we're going to talk about ways that retirement has changed. You know, it's not your parents and your grandparents retirement landscape. Inflation is different. Investments are different. The way planning happens is different, especially with the types of software we have. You know, it's no longer just meeting with an advisor, telling you that you're up 8% or 12% or down 15. There's actually planning that happens. And if you've got a retirement planning specialist, you're looking at visuals that shows you how long your money lasts, how much you can spend before maybe you put too much pressure on the portfolio. Other things we're going to talk about is three tips to prepare for retirement. Simple action items. You know, one of our goals is not to give you an hour full of information and you don't know what to do next. We want to give you. Hey, you're a 2 or 3 things that you can do after each podcast that could very possibly impact what your whole retirement looks like. Uh, number three, the best states to retire in in 2024. You'll say, I'm sad to say that Minnesota is not on that list. You know, it's gotta be, uh, so we'll talk about, you know, the best states tax wise, how to keep the most of your money. Uh, most of your money. The top five retirement dreams of most Americans. And then of course, important reminders and updates. Why don't we jump into six ways? Retirement has changed since your parents. Did you always say you want to start us off?

Speaker3:
Well, I think we talk about this a little bit later too, in, in, in the podcast. But, um, one of the biggest ways is probably pensions, I would think. Right. Just the nature of how you save for retirement, the type of planning that you have to do in the in the early years when you're still working. Um, the onus is on you. You have to save for your own retirement. And I think that the difference is, you know, back then I think it was much more common to have a pension. Uh, today, something like 15% of, of the private sector, uh, has the access to, to pension. So I think that that's probably the biggest thing I would say. And of course, you know, you know, the world has changed, right? Just our culture has changed. And, and, and I think politics in general has probably changed a little bit of that too. So it's, you know, it's a different world for sure.

Speaker2:
Absolutely. Uh, the other big thing is people are living longer than ever before. You know, one of the things I heard somebody say recently is that they saved enough planning to live to their eight, their late 70s, and now they're close to their late 70s. And he kind of joked and said, unfortunately, he's in great health, meaning that, you know, he's going to outlive his assets. And so what's interesting is a lot of the families that we meet with, they've never looked to see how long the money lasts. They've never looked to see how much money they can spend before. There's a concern. They kind of just trust somebody to say, yeah, things are good or no, we're running short. So one of the things we encourage people is, you know, don't live wondering if you're going to be okay. Come meet with us. Let's lay out a plan and give you some financial peace. Or if it looks like maybe things don't look as good as you think, let's create a plan that helps you win. Because I think one of the worst things somebody can do is spend 40 plus years working their butt off, and then all of a sudden they spend all of retirement hoping they're going to be okay. I think one of the biggest gifts that we give people through the tools that we use, through showing that we're thinking about things that they've never thought about, is peace of mind, which I think, you know, having peace of mind in retirement really is the goal. Uh, what about point number three, effects of inflation? How are we seeing that impact people that are retiring in 2023, 24, 25?

Speaker3:
So we've you know, we've talked about inflation so much. I was really thinking about just a new way to, to to to bring up the topic, maybe something interesting that people don't really think about. And part of it is a bit of a pet peeve for me. You know, like you always hear, you know, Uncle Billy Bob said he went to the store and eggs are ten bucks for a carton of eggs. You know, can you believe you know, inflation is just really just killing us everywhere? And, um, you know, I don't know how much into the weeds you know, people care for for me to dive into, but. So there's there's 12 districts with the Federal Reserve and the Saint Louis district itself. That's actually who tracks a lot. Actually, the Bureau of Labor Statistics tracks a lot of this stuff. But there's metrics on this, right? You don't have to fall into some of the talking points that, you know, I think a lot of us just get trapped into these soundbites, especially depending on your political leanings of, hey, you know, inflation is out of control. This is how it's affecting us. And it really just I think it panders to a certain crowd sometimes. And I would say you can actually track this stuff. And, you know, America is a big country. The United States is huge. It's maybe doesn't represent you. Like for me and my wife, for instance, we do spend six bucks on a carton of eggs because, uh, you know, I probably know more about eggs than I ever, ever did before I got married. And, you know, now I know that. Hey, if the if the yolk is a little bit darker, it probably means that the chickens had better access to better food. Right? Versus if it's like, you know, a lighter color than then probably they're just eating wheat based food and it's just not that good for you. So we spend a little bit more in our eggs, which, you know, wasn't my plan to talk about, but I.

Speaker2:
Just want to pause and say, that's amazing. You have time to study eggs.

Speaker3:
No, well, that's not the point. The point is everybody brings up eggs, right? Everybody brings up eggs. They bring up butter, milk, cheese, all these things. And like, nobody talks from like, you know what the actual metrics say. So you can look up, say, Saint Louis Federal Reserve and you can look at the price of eggs, and you can actually track to see what the price is today. And actually, I looked this up. I'm trying to find where I wrote it down, but, uh, so the price of eggs as of September is $3.82. And we're talking large grade A eggs. It's kind of like a balanced average of organic, non-organic, cage free, free range and traditional. So like, we don't have to wonder anymore. We don't have to rely on, on on Big Jim down the street who's, you know, going to Whole Foods and freaking out over the price of eggs and just using it as a talking point because, like, we track all these things, they track the price of everything And, you know, we don't need to overstate inflation, you know, because I feel like that's kind of happening a lot lately. You know, inflation is obviously real. You know, I think, uh, during this president's term over the last four years, inflation is up like 20%, right.

Speaker3:
That that's a very real thing that that I think we need to discuss. But if you're having like an honest conversation on inflation and its effects, like you, I think you kind of have to also talk about real wages. And over the last year and a half, real wages have actually outpaced inflation. So like I know everything costs more, right. But if our wages which you know, real wages which are basically adjusted for inflation, if real wages are outpacing inflation, like what matters more. The fact that you're paying more at the grocery store. Or the fact that, like, on average, wages in the country have actually gone up at a faster rate in the last year and a half or so. So, I don't know, I think it's a two sided conversation and it's difficult, you know, especially, you know, we have an election here coming up in a few days. And I think that everybody's really just sticking to their talking points more than ever. And I think it's really difficult sometimes to, to kind of to get to get to the facts because of, you know, like I said, our political leanings and a variety of other things that that affect us. So yeah. Anyways, I'm done with my rant. No. That's good.

Speaker2:
Uh, I think the next thing is, you know, I think people, some people realize, but a lot of people don't think about, you know, your retirement needs to last several decades. And so one of the things that people are looking at, especially people that are considering retiring early, what's interesting is I've had more and more people recently say, man, I'm not going to make it till full retirement, which is 66, 67. I'm going to retire at 62. And and they know that means that there's this big three year gap pre Medicare where they're going to have this big additional expense with health insurance, which as we know is is out of control. But one of the things that is important before you decide to retire is take a look at if you do retire at 60 or 62, you know, that means that your retirement may have to last 30 years, maybe 35 years. If you or your spouse has family members that have lived in their 90s and before pulling the plug on work, making sure that you're thinking about inflation and the cost of health insurance. And, you know, in the beginning, I think one of the things that you and I see a lot is people tell us they can live on a certain level of income, but then they find when they add in travel with friends and remodeling the house and all these additional things, they spend a lot more in those go go years, those first 3 to 5 years, you know, than any other time.

Speaker2:
So we just encourage you, you know, take a look to see can that money last as long as you need? Uh, maybe you leave behind several million to your beneficiaries or a million or a half a million. But look to see that your money lasts as long as you need it to. And, you know, we have some people that they're comfortable knowing that their home that's paid off is going to be added as a retirement asset at the end if they need it. But a lot of people want to see their home and some of their assets, you know, go to their kids or siblings or people they love. So I would just say, do you know how long the money lasts based on the expenses you're living on, not just on your fixed expenses. So I won't spend too much more time on that just because we have a lot to get through. But yeah, I do have a.

Speaker3:
Quick question though, so like, I'm not sure the best way to handle this. Sometimes when when people come in and I go through their budget and they're telling me they want to retire next year, and it's very obvious that they should keep working for a couple more years, like maybe 5 or 10, you know, to make sure they have enough money. How do you handle that conversation?

Speaker2:
Uh, yeah. Well.

Speaker3:
They're so excited. They have the date in mind. They're already telling me. Oh, yeah. Well, and, like, you know, they can't retire.

Speaker2:
Well, here's the deal. Is that I've had some of those hard conversations recently. And I think what's sad is I think a lot of advisors get nervous. They're going to lose the client. So they tell them what they want to hear. Uh, fortunately or unfortunately, that's not me. I've had to tell two different families this year. Hey, one of two things has to happen. Either you have to work longer, or we have to get your expenses down by 1000 a month and show that you can live on that. Or I'm not going to, you know, be able to keep working with you. And that might sound mean, but if you don't have a financial planner that cares enough about you to tell you that your plan is going to fail, then in my opinion, you have a great salesperson. You don't have a great planner. So one of the things I encourage people to do is, man, you've spent 40 plus years working so hard, why not get a second opinion from somebody just to make sure that you have two advisors on the hook telling you that you're going to be okay. So I would strongly encourage that. Uh, because I think that it's too big of a thing to just, uh, agree or understand with one person that's going to be okay. Get a second opinion. I'm a big fan of that. On anything that you do that's significant, Whether it's hiring a landscaper, hiring somebody to build your home, sell your home, always get at least two opinions, because you probably could learn something that maybe you wouldn't have learned from just getting one source.

Speaker3:
Yeah, and I guess something that comes to mind, too. This happened last week. Uh, make sure you disclose all of your investments to your financial advisor. Uh, they don't all have to be under one roof. Like, we're not going to be offended that you have something somewhere else. And the reason why it's important is we you know, we had a real heart to heart with one of our clients. I think it was last week or the week before, and they were kind of in a situation where, hey, if you keep spending at this pace, you're going to run out of money, and there's no way that they didn't want to they didn't want to cut back on their spending, their distributions, their monthly distributions that they were taking from their Charles Schwab accounts. And like we just saw the plan just like it wasn't going to last. Well, we get a call I think it was a couple of days ago, Friday or Thursday from their CPA saying that, hey, they had an unexpected distribution From an account and they have to pay some taxes on it, and they want to utilize the 60 day rollover to get it back into the Schwab IRA. Well, I said, hey, we don't have a Schwab IRA for this person like, and we didn't send them the distribution. It came from another institution and we weren't aware of it. But you know, come to find out, this client had an additional, you know, $100,000 or so at a different institution that they didn't want to disclose. And I think for, you know, probably because, I mean, I actually I actually have no idea maybe you could speculate as to why they didn't want to disclose the amount. But, you know, it's just one of those things that, you know, it doesn't make it, um, you know, it makes our job easier in terms of planning and making sure that we're putting together a good plan for you if we have if we know about all the assets that you have.

Speaker2:
Yeah, absolutely. And the next one is, you know, I think I'm going to jump to rising taxes. You know, one of the big things that we see is in 2020, we had 17.5 trillion in debt. And here we are. End of 2024. And our country has 35.8 trillion. So you know, one of the things that a lot of us expect is that taxes are going to go up. Now, I know you know, one of our candidates, President Donald Trump, is talking about, uh, seriously considering eliminating income tax, which would be shocking and just getting most of our tax dollars from tariffs. But my guess would be is that income taxes are going to have to continue to increase. So one of the things I encourage people is let's plan for taxes to increase and make sure that if that were to happen, that you're going to be okay. And that way, if for any reason that doesn't happen, at least you're ahead of the game and you didn't depend on that going away, what would you add to the rising taxes portion?

Speaker3:
Yeah, I, I don't think taxes are going to be eliminated. And I don't think we can rely fully on tariffs. Obviously a difference of opinion there. Um, especially since because most economists that I that I've looked at say if you, if you rely solely on tariffs or increasing tariffs. Uh, you're going to have a huge increase in inflation. Uh, but right now, one of the reasons why like, you know, it's it's probably taxes probably are only going in one direction is because of our total debt. You know, we talk about, you know, the US debt clock dawg, all the time. Well, total debt is about $35 trillion. And servicing that debt is becoming more expensive like right now in 2024, 17% of our total federal spending goes towards servicing that debt. And the average interest rate on the debt right now is about 3.32%. So a huge amount of our money, I think it's like 1100 and some billion dollars every year goes to maintain that debt. Um, you know, we only raised so much in our tax revenue and the rest we have to borrow to pay for the things that we have here as a country. Right? So it's it's, you know, it's going to be a problem that's not going away. And probably eliminating debt and relying solely on tariffs probably isn't going to happen. I mean, eliminating our our taxes. Um, you know, so more than likely taxes are going to increase, probably in your retirement if you're nearing retirement in the next couple of years. Absolutely. Uh, the.

Speaker2:
Next one actually. Also, I'll give you this one too. Higher health care costs. This is significant.

Speaker3:
Yeah. It's well, I mean, we talk about different measures of inflation. Um, you know, if you just look at the price of, like, medical care, uh, and I think that would include, like, insurance, drugs, you know, all the medical equipment and all that stuff. So since 2000, the year 2000, it's up by 120%. I mean, that's huge. Like if you compare that to just like, you know, consumer goods, if you just look at the regular CPI, which is up by about 86%, that's significantly larger. And who does that impact? Like it impacts retirees. Like that's who's spending the most on on healthcare needs or needs related to healthcare. And we're not even talking about anything related to long term care or nursing home needs. We're just talking about healthcare needs in retirement. I think that's, you know, anyone over the age of 62. And the rate at which those needs, the cost of those needs increases is substantial. So yeah, I think that's you know, that's something that a lot of people really don't build into their plan. And I mean, you kind of know why, right? It's difficult. You don't know if you're going to have a health emergency that's going to, you know, be financially devastating for you. You just don't know. And I think that, you know, just like in a lot of things, you know, some people overinsure some people underinsured, self-insure, you know, there's a variety of ways to mitigate those things. There's probably not going to be a good answer for everybody. You know, there rarely is one glove fits all. But, you know, it's something that you need to discuss with your financial advisor. Yeah, absolutely.

Speaker2:
Uh, one of the big questions I get all the time and I touch on this, but it's so true, is Trey, who are the happiest individuals or families that you serve? And in my opinion, it's those that have the most guaranteed income, whether that's coming from pensions, whether that's coming from real estate rental properties they own, or maybe it's a no fee or a low fee fixed index annuity or maybe it's some sort of income that is just guaranteed. Maybe they've got a contract and they're doing some part time work. But it's not just the people that have the most assets, it's those that have most or the majority of their expenses covered by guaranteed income. That way, no matter what happens to the market, they keep getting a paycheck month over month. And so one of the things that we love to show people is what percentage of their expenses are covered by guaranteed income, and are their investments or income producing or dividend producing investments that could potentially give them more guaranteed income? Do you want to touch on, at least from the security side? You know, for someone that wants more dividends, what we would do to a portfolio that would create that.

Speaker3:
Yeah. So there's there's a number of different ways you can construct a portfolio. And some people absolutely rely on dividend and interest payments. And that's what helps to meet, you know, their financial needs and retirement. Um, other people are more you know, they focus on investments that are more growth oriented. And then they just take distributions as they need them. I would say that more people probably fall into that category because it gives you more flexibility, right? If you need a distribution like we've we've pursued growth and we just distribute what we need whenever we need it. And sometimes it's, you know, it's a recurring monthly payment that's exactly the same. But a lot of times if you if you have those dividend producing investments, um, you know, it kind of it eliminates some of the flexibility that we like to have in our portfolios. You know, good, bad or indifferent, maybe doesn't matter so much what strategy you pursue. But, you know, the thing that that I don't really love, if you have those in an after tax account, then then maybe you're triggering capital gains needlessly if you don't need the income. Um, especially if like, you know, if your distributions are random and they're not the same amount every month, I think that sometimes it makes it easier to, to pursue growth and then take distributions as you need them.

Speaker2:
Yeah. Okay. Great.

Speaker3:
Uh, and.

Speaker2:
Three tips to prepare for retirement. Number one is have a plan. You know, I think one of the things that I probably say most often in my office. And unfortunately, I don't get to say this to everybody as I'll say, hey, you have all of the assets, all of the pension, all of the Social Security that you need for a successful retirement plan, and you could retire today. However, you're missing a plan, and if you don't have a plan in and basically walk with the plan, there's a chance that you run short on assets or that you overspend or, you know, maybe that if we have a correction that you have so much at risk that all of a sudden you fall victim to sequence of returns, and your portfolio takes a devastating loss at the beginning of your retirement versus at the end when you've had a good bull market to grow those assets the first five, 7 or 10 years. So one of the things I'd encourage you is maybe you have a financial advisor that's done a great job growing the assets, and you've had somebody that's helped you with tax preparation. But have you sat down with the retirement planning specialist that puts together an income plan that puts together a plan for minimizing taxes. Those are the things that really matter, what we call the distribution phase. And so I would just say make sure that as your season of life shifts and changes, that you're working with somebody that specializes in retirement, specializes in minimizing taxes, specializes in helping you create more income off of your investments instead of just big returns, because the name of the game in retirement is income. So I would just say, if you've never sat down with a retirement planning specialist that's put together a spend down plan, meaning out of your investments, you have pre-tax post tax, you've got your Roth accounts. Uh, where do you pull from and in what order? We can help with that. What would you add to that yellow say.

Speaker3:
Excuse me. There's there's going to be a lot of variables and and I know we say this a lot like it depends. Your situation depends specifically on you, your goals, objectives where you're hoping to accomplish. I would say that, you know, whoever the news anchor you're listening to, that person is not your financial advisor. The news is relevant. It's important. It matters. They're talking about things that may affect your portfolio, but that person doesn't have an interest in making sure that that you're making good, sound financial decisions that preserve your retirement savings and make sure that you have enough to last you the entirety of your retirement. So I would say that, you know, just as of course, I'm not saying don't listen to the news. The news is important, but don't take your investment decisions or your retirement plan shouldn't come from the guy. That's that's on the news, right? You should sit down with your financial advisor. You should have a realistic conversation. Like sometimes, you know, we're talking about health history. We're talking about your like what you plan to do in terms of your beneficiaries. Like are you leaving things behind to a charity? Uh, do you have children that have, you know, maybe have grandchildren with special needs? Like everyone's situation is completely different.

Speaker3:
Um, typically we start with your fixed sources of income, uh, understanding what your expenses are today and how those might change. Like a lot of retirees, they look to upgrade their vehicle. They look to make all their repairs on their home and upgrade everything they can so that for the next 20 years, they can coast through retirement. So there's a lot of those upfront expenses. Some people really prioritize traveling and and making sure they have as much leisure time in retirement. So sometimes it's a little heavier on the front end. And then they scale back on some of those things in your plan, like whatever you put in place. Like one thing that that I know for sure is it's going to change. You know, whatever you decide, it's going to change, but you're still better off having a plan. And then you can adapt and you can make changes over time to that plan, rather than just like just trying to wing it. Right. People who try to wing it rarely end up where they want to end up, that's for sure.

Speaker2:
Number two, that's a good way to say that they rarely end up where they want to end up if they're trying to wing it, and most people do. Number two, take advantage of Roth accounts. You know, we find that a lot of people have the majority of their retirement in tax deferred accounts. 401 S, 403 B's Tsp's, Which obviously all become IRAs. Traditional retirement accounts are a great way to save for retirement. They lower your taxes throughout the year as you make contributions. However, you have to pay taxes on those earnings. When you start pulling money out at your ordinary income tax rates. What's nice about a Roth account is while you do pay taxes for the money going in, not only do you never pay taxes on that money again, but you don't pay taxes on what you've put in plus on any of the growth. And so one of the things that we help a lot of people with, if they're 2 to 5 years or 7 or 10 years from retirement, is starting to max out the Roth accounts so that they can create more tax free money in retirement. Thoughts on that?

Speaker3:
Yeah. So in the earlier years of retirement, we see people take a couple of different approaches here. So we're talking like, you know, maybe after the age of 62 when you're when when you're eligible to receive a Social Security benefit. And some families, what they do is, hey, like we've just retired, we've been paying taxes for, like, our entire careers, and now we finally get a tax break. We're going to enjoy a tax holiday. Maybe the only source of income you have is Social Security or a pension. Or if you're married, only one of you has turned on that benefit. And you're really just enjoy those earlier years where you don't have to pay a lot in taxes. Other people take a different approach, and I, I lean towards taking a different approach. Don't just take a tax holiday like if you if you if you're still in the 10% or 12% bracket, right. Maybe consider filling that bracket up. Whether you're doing Roth conversions, moving money from your traditional pre-tax accounts to your Roth IRA, and filling up the 12% tax bracket, or simply living off of your retirement savings, or considering living off the retirement savings and letting your Social Security benefits grow like it's going to be. I think it's going to be it's going to serve you well, especially if eventually you get to the point where, hey, now for sure you've reached the age of 70. Both of your Social Security benefits are turned on. If you're married, eventually you reach the age of 72 or 73.

Speaker3:
Now you have required minimum distributions. Certainly your pensions are turned on well before that, and maybe you've gotten a part time job in retirement. And you're in the situation where now you make more money than you did when you were working. And I know that seems crazy, but for a lot of people, that's the case. And you're going to look back at those those years where you were taking a tax holiday and you're going to wish that you did some planning during those years, because now you're paying more in taxes than you wanted to pay. So I would say that, you know, take a look at that, do some projections, make some, put a plan in place. Right. It's it's it's going to a lot of it's going to depend on, on on your preferences. Right. Some of this stuff uh, you know the benefit here isn't necessarily it doesn't graph. Well always right. You can't always put it on a spreadsheet and show the the outcome perfectly. But sometimes it means you end up having more money in a Roth IRA. Sometimes it means that you're passing on money. Your legacy funds what you're passing on to your beneficiaries, like they're receiving it in a better, more tax advantaged way. So depending on what you what you're hoping to accomplish, there's a lot of different things to do. And you know, you might very well decide, hey, I'm just going to take that tax holiday. And that's okay too.

Speaker2:
Yeah. Number three I don't think this is going to be people's favorite yellow yellow say but uh here it is. Number three work a little longer.

Speaker3:
So at the beginning of the podcast, like I don't know how to handle that conversation, especially when someone's like, they can't wait. They're counting down the days. And and I'm listening to everything. I'm taking notes, I'm plugging it into the software and it's like, hey, how do I tell you? Like, you shouldn't retire.

Speaker2:
Well, you know what? Here's what I found. So 12 years of being in the financial services business and sitting down with people, one of the things I found, and it's really interesting, but I've seen a pattern in this, is if somebody knows they can retire today and everything's going to be okay, it makes it easier going to work than feeling like they have to go to work until a certain date. Because one of the things I think that money does and money doesn't solve everything, but it solves a lot. But one of the best things that having money does is it gives you options. And I've had several I mean, dozens and dozens of people, men and women over the last, I would say specifically seven years since we started our office, I've noticed more and more of this, and maybe it's just kind of the day that we're in. But I've had a lot of people say, once you told me that I could retire and I had enough money based on my expenses and everything was great, going to work just became easier. And so one of the things I would say to people that maybe you're burnt out on work or, you know, it bothers you, you have to be there. Give us a phone call. Come sit down with me. Let me show you. If you have the option to retire today. And maybe the answer is you don't. But I've. I've sat with dozens of people that have said, Trey, you're the first person that put together a plan that showed me I could retire.

Speaker2:
And literally going to work the next day was easier, just because I knew that I didn't have to keep going. I had one guy that said Troy. It was it was easy to work another two years after I first met with you, because every day I would say to myself, if my manager excuse the language, what he'd say pisses me off one more time. I knew I could basically retire that day and then everything would be okay, and that made it easier for him to work an extra two years. So I would just say, you know, come and sit down and see what your options are. You know, maybe, maybe working another year or two wasn't a part of your goals. But if you know that you have the option or you know that working another year or two is the difference between being comfortable in retirement or being stressed in retirement, that might be the thing that you need to hear. So I want to encourage you if you've been listening to our podcast, or maybe this is your first one and you've never experienced having a financial advisor put together a spending plan and a minimizing your taxes plan, give me a phone call. We'd love to do that for you. Complimentary. Just to see if there's areas that we can add value that you currently don't have a partner in.

Speaker3:
I would add a couple things. I think that you have a much more balanced approach to this conversation. Whereas for me, it's like I look at all the different variables and how much they can change your expenses, inflation, your rate of return on your investments. And I'm like, hey, like, yeah, you can make it. You know, our software shows you you've got a pretty good chance of success until the age of 90 or 100, whatever that is. But I'm like, hey, you're one financial emergency or disaster away from financial ruin. And depending on what that looks like, like, I love the idea of like, hey, work as long as possible. And I know that that's just, you know, I'm not trying to be fearful on this stuff. I just I think different approaches and you're much more optimistic. And I'm like, hey, you know, there's a couple of things change and they go in the wrong direction. Like we're going to be, uh, we're going to be looking to help you out here.

Speaker2:
Well, I think though, that's where, you know, when we look at our software, uh, what's important for people to know is when you do projections, your outputs are only as good as your inputs. And so one of the things that we do is we plug in numbers that, you know, a group of PhDs in math have said, if you use this for inflation, if you use 4% for returns throughout retirement, well, most of the people that we work with are in portfolios that, you know, are averaging 6 or 8 or 10 or 12%, obviously, depending on their risk level, we're not guaranteeing returns. But if I look over the last nine years I've been in the business, you know, the majority of our clients have a little bit of stock or a lot of stock, and they're averaging, you know, at least 50% or twice as much as we're doing projections for. So, you know, the other side is, is I am more optimistic, but it's because we're using very conservative numbers. I also tell people every year you're not okay, you can't retire. So I'm honest with people, but I do think it's true that I'm more optimistic in using conservative numbers where you know, your your mindset is, we better be ready for World War three.

Speaker3:
And I'm not I'm not talking like of course, like I, I love using historical norms. I love, you know, trusting in the software, putting in all the, you know, conservative rates of return and inflation, all that stuff I'm talking about, like when the outliers happen. And what if you're like the one person that happens to experience a few of the outliers in terms of like a healthcare emergency? Uh, you know, that's what I'm talking about, where it's like, hey, I want to make sure that I have enough cushion not just to, you know, to have a very likely chance of success. I want I want to make sure that there's enough, just in case, like I do, end up experiencing one of these things that are as unlikely as it is. You know, I want to make sure that I'm going to be okay in the event anything happens. That's it. Well, I.

Speaker2:
Think with that mindset that you'll retire at a healthy age of 90 and you'll leave about $20 million to your kids, who will then blow it with an 18 month.

Speaker3:
So I support this. Uh, that's.

Speaker2:
You know, if there's anything left after Alicia, those wives of ours, you know, um, let's end with this. The best states to retire. That way, we can stick to our timeline. But the best states to retire in 2024 versus where people are actually retiring. So are you ready for this? Number one in the best state to retire is Delaware. Would you ever have guessed Delaware?

Speaker3:
When I think of Delaware, I think of like politics. And I think of like a tax haven and tax shelter for people that are trying to get away with that sort of thing. Yeah.

Speaker2:
I didn't know that. What's interesting, though, is even though that's the best, uh, number one is 77.3 thousand people in 2024 new people. Looks like new retirees migrated to Florida, which is actually number eight for for number best. So it's the number one where people are going, but it's the eighth best.

Speaker3:
You're saying most people end up going to Florida by a very wide margin, even though Florida ranks number number eight. Yeah. What's number two? I I'm looking at West Virginia.

Speaker2:
So number two is West Virginia. And for best states to retire when in actuality the second most amount of people. So in 2024, 23,500 new retirees moved to Arizona. Uh, has moved to Arizona. So number two is Arizona, where people actually retired. Number three is Georgia. Best state to retire. But that's not where people are moving. Number three people are moving to Georgia.

Speaker3:
I don't even think of Georgia as as like a retirement state actually. Yeah, I think I know.

Speaker2:
One I know one couple that lives in all of Georgia. Uh, two couples that live in all of Georgia. Huh.

Speaker3:
What's number four? Number four, the is South Carolina, which, you know, I do consider South Carolina. I feel like we hear that from time to time. I actually have some family that moved out there recently. Uh, you know, but the interesting thing is, you know, you look at Florida being number one, number 2 or 3 and the rest of the list, those are very distant second or third place states. You know, we're talking like 30,000 new retirees migrate to Florida. Second place is Arizona with 23,000. Like it's not as high on the list as you would think I would think. Florida and Arizona would have been neck and neck in terms of the entire net retiree migration, but it seems like, uh, Florida really, really has a lot of appeal there. I am surprised.

Speaker2:
I think it just says that people value the ocean over the mountains.

Speaker3:
Oh, yeah. Yeah for sure. I am surprised some of these are even on the list. Like, okay, the best tastes are retired. I know they're looking at cost of living and probably access to healthcare and all that stuff, but some of the states that are a little shocking. Pennsylvania is number seven in terms of best states. What's not shocking is nobody moves there for retirement, but it is among the best states to retire in. Oh. I mean, it's.

Speaker2:
Shocking to me is number five is Missouri. I had an appointment yesterday with a gentleman, and he said he plans to move to Missouri. And I was like, man, I don't even know anybody that lives there. That's amazing.

Speaker3:
I remember you came out of that meeting. You were like, hey, you're not going to believe this. This guy's moving to Missouri.

Speaker2:
Well, apparently there's like, you know, a nice beach there, which maybe you knew that. I didn't know that.

Speaker3:
I didn't know that I didn't I mean, I think of Branson. Branson, Missouri is kind of nice. You know, I.

Speaker2:
Think of Branson. I think of, like, Disneyland for 70 year olds. I hate that.

Speaker3:
Exactly.

Speaker2:
Uh, Mississippi is number six. Pennsylvania. You said number seven. Number eight is Florida. Number nine is Iowa. Man, you couldn't pay me to go to Iowa. And I'm not picking on you if you're from there, I just, you know, if you're in Minnesota, you're basically already in Iowa.

Speaker3:
If I made when I saw the list, I decided I wasn't going to make fun of any of the surrounding states because probably we'll offend somebody in our audience. But you just you went there with Iowa.

Speaker2:
My mom's from Iowa. A lot of our best clients are from Iowa. There's great people. I'm just saying that me moving to Iowa would be like me moving to Into Wisconsin. Like, I'm not going to do it. I'm going to move somewhere different. Right. No, I'm saying it's the same as Minnesota. I'm not going to make a lateral move. If I'm moving. I'm going somewhere warm. You know what I mean? Well, I would.

Speaker3:
Say I was clearly worse than Minnesota.

Speaker2:
Yeah. Number ten is Wyoming. Uh, I said Wyoming sounds awesome.

Speaker3:
I've never been there. It sounds I.

Speaker2:
Think Buffalo are cool, but I don't know that I could look at them every day, you know, like, I need some people around me, man.

Speaker3:
I just like making these broad generalizations. We're having fun doing it.

Speaker2:
So let's end with this. You know, when the top ten places where people are actually retiring, I'm just going to say them in order. Florida is number one, Arizona is two, South Carolina, Texas. I like Texas, North Carolina, Georgia, Alabama, Tennessee. We've we've had a handful of clients move to Tennessee. I'd be open to that. Nevada I know that's huge for taxes and then Kentucky. So those are the top ten.

Speaker3:
They stopped at the top ten I'm sure had they gone to at least 11 or 12, Minnesota would have been on that list.

Speaker2:
Yeah, or probably like putting.

Speaker3:
These things together anyways. Like it needs to be. Yeah.

Speaker2:
Uh, well, let's end with this. If you have not had a retirement plan put together for you, if you've never had somebody look at a tax strategy for you, uh, maybe you have a financial advisor. That's a good person. Uh, but the relationship is like, we had a gal yesterday. I felt so bad. She said to me, she said, you know, I've got it's like a million and a half bucks with my advisor. And we used to meet twice a year, and now I get one phone call a year, because basically he said, I'm one of his smallest clients. You know, what I would say to you is, if you've saved a half a million or three quarters of 1 million or 1 million bucks or a million and a half dollars, and you have a financial advisor that's treating you like you're lucky to work with them. It's time to move on. You've worked way too hard to not have somebody care about you. Serve you. Make sure you're getting the best of everything. You know, I think a lot of the of the greatest firms, they have a half 1 million or $1 million minimum, and I don't I don't I don't disagree that that's not a good business plan.

Speaker2:
But I've got family members that, you know, they worked hard their whole life. Never made more than like, my grandfather never made more than 30,000 a year because he was a hair barber in a small farm town. Man, his his retirement, even though it wasn't a half a million, it mattered. And I'm thankful that there was a financial advisor that said, I'm going to serve you. I'm going to take care of you because we want to make sure that you guys live to be in your late 80s and 90s, and you can do it independently. And he's done that. So, um, I would just say, if you're listening, we definitely serve high net worth clients. But if you're somebody that's being underserved because you have a parent or a family member that is getting you access, but they're treating you like you're in the back row of a plane, man, give us a phone call. We want to give you a first class experience because you matter.

Speaker3:
That that was said very well. And I think when you said, you know, one of these really great firms, I think you meant great in terms of just like their prominence and size. Yeah. Yeah. Right. Because there's lots of advisors that, you know, sometimes we get advisors and others in the industry, they get a bad rep. But there's plenty of people who do a really, really good job who actually care about their clients, no matter the size and the net worth. Like you deserve to be treated well 100%.

Speaker2:
And we're not the only ones out there, but we're some of them. So feel free to shoot me an email. Trey at G wealth shoot yellow saying email yellow say at G wealth yellow and I are business partners and we serve all of our the families that we get to serve. We do it together. Uh, feel free to give us a call (612) 286-0580. We can meet you in our Burnsville office right here on 35 and Burnsville Parkway. We could do a zoom meeting if you live in Iowa or Florida or Tennessee. Uh, and we also have access to our RA office right there in Saint Louis Park, and we can meet you there if you're on the west side. I hope your day is great. Thank you for being a part of episode number 30. More great things ahead. We've got a great plan for 2025, and we're excited to share that in the future. Have a great day.

Speaker1:
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.

Speaker4:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you'd love including automatic transcription software, collaboration tools, automated translation, upload many different filetypes, and easily transcribe your Zoom meetings. Try Sonix for free today.