Significant time on getting this thing really crafted.
And then they drop a bomb on me
at the end of it. And they're like,
I got, you know, 200000 dollars of gold
too. And I'm like,
that would have been nice to know what
the be. Right information. Yeah. Because,
that can completely changes the entire picture here
and you are super stressed out this whole
time about, you know, your financial plan, and
you're willing to actually spend
on some of that gold that you have.
Well that changes everything and now that lifestyle
that you want is very doable.
What's going on everybody? This is Matt dixon,
and with me in studio today for the
True Wells radio show is. Justin Bro.
Justin.
Wow, this is what
3 part series now. 3... Or 3 weeks
in a row. Yeah. So we are on
a roll. We've been going over a lot
of really good material we've got more of
that good material for you today. Mh. Justin
talked me a little bit about what's on
the agenda for today's show. What can listeners
kind of expect. Yeah. We're gonna talk about
what...
Well,
the pros of having a financial plan
and what is included in a financial plan?
I think that's a really important thing for
us to talk about because
a lot of the times when I'm fielding
a phone call from someone who is just
inquiring to the firm.
You know, they have a lot of questions,
and they don't necessarily know how to ask
those because they don't really know what it
is. They're looking for because they don't really
know
what goes into a retirement plan. And so
you get a lot of
comments, like, you know, I have some assets,
like, in my retirement account, and I've got
some savings,
But, you know, I'm 6 years away from
where I think I might be able to
retire, but I don't know if I can
retire Can to retire. I need answers to
these questions.
So I think
this is a really good show because people
don't know what they can expect. Right. So
talk to me a little bit about some
of the things that kinda go into a
financial plan or kind of that comprehensive
wealth management, what does that really look like,
Justin? Right. And so I guess to start
up,
what is a financial plan? So we're even
gonna go to the actual definition because
it can be interpreted a lot of different
ways. But The process of assessing
the current financial situation
and future goals and how to achieve from.
I think that's a big 1 the the
future goals part because a lot of the
time you know, people are just looking at,
what do I have and is that good
enough? But Right they're not looking at, what
is it that I actually want to achieve,
not what is it that I feel like
I just have to achieve. And the best
part about financial planning is
1, it's subjective and 2, it is different
for every person Mh. There's not a
cookie cutter, you know, just save this amount,
and that'll... You know, you'll be fine. Which...
Yeah. There's a dollar amount that probably is
fine. But, I mean, you have differences in
clients. Some clients are spending
15000
dollars a month in retirement. And others are
spending 3. Right. So looking at where you
at currently versus where do you want be
in the future and trying to run some
projections
based on on those numbers. And also adding
things into it that can break
plan. Mh. Or, you know, a death
is a big 1 that can really break
a plan, but a good plan will should
have you know, stated insurance coverage for situations
like that. Mh. But to kinda start out
with how what's all incorporate rated inside of
a financial plan is
the first part is,
what is your income and what are your
expenses?
And are they expected to, you know, have
a big change in the next couple years?
Because maybe,
you are pretty confident you're coming up on
a significant raise. Right. You know, and if
you omit that from your plan,
that could really change the dynamic of a
conversation. And it can change, like, maybe how
much savings it is to get. To where
you want to even be. Mh. You could
be in this job
searching where you're kind of bouncing around some
job kind of finding the what you wanna
do for the rest of your life scenario.
Well, and I wanna bring up something that
just kinda hit my brain. 1 of the
things that I've noticed is a lot of
times, people wait until the 11 hour, and
they're like, alright. I'm ready for my financial
plan, and I'm, like,
if you had only come in 5 years
ago, we could have crafted things
to look so much differently today,
because there's not very many levers that we
can pull. You kind of backed herself into
a corner. There... And now we only have
so many option sets. Yeah. Because you shift
the time horizon. Right lot. Right. So because
that's an example, what if you wanted to
retire early. Right? Maybe you should have saved
a little bit into a savings account, a
joint account, some brokerage account where you have
access to money that's outside of a retirement
account. Exactly. So I think getting into the
financial planning
piece a little bit maybe earlier than you
naturally think that you should. Yep. Might really
benefit. And it could even be as typically,
they'll say, you know, you should review your
financial plan every single year.
Right. But so say you're in your early
twenties or, you know, even early thirties at
that point is, maybe it doesn't need to
be looked at every year. Maybe it's every
3 years every 5 years. Yeah. It doesn't
have to be every single or, you know,
a quick update, you know, not a lot
of changes. Even starting at that young as
they mean, maybe you get married, Maybe Mh,
you know, Have children.
And children shift the planning.
Yeah. But
you know, maybe you're saving to buy your
first home. Maybe you're saving to buy your
second home. Well, a lot of the times
people don't really know what they're saving for.
Brandon makes them a lot less
likely to even save in the first place
because they... Like, say it's a married couple.
Right? Have you actually sat down face to
face with your spouse and says, what is
it that we want our lives to look
like in 5 years? Because if you look
at each other cross side, like, why would
you even be saving in the first place
because you don't have a plan. Right? So
I think setting a financial goal is a
really, really big piece. Yes. And you don't
have to start with anything exotic Through a
lot of people, honestly,
it's as simple as hey, we don't have
6 months of our income saved up. We
don't have a nest egg. Right. So I
can say, hey, maybe that's a good spot
to start Or, hey, you have you got
behind on your credit cards.
You've got credit card debt and you're getting
hammered at 30 percent interest.
Pick... Dad make that the goal, but at
least have a goal. Right? And I think
that's where a lot of people fall short.
They don't have short term goals. They don't
have long term goals. And so that
where's is the money going and what's it
doing? There's not really, like, a use case
or a purpose for those assets? Because it's
a lot of... There's a lot of baby
steps involved in it? Yes. I mean, it
may not be as, you know, if you're
swimming in some debt,
and you... You know, you don't have an
established emergency fund,
you don't need a financial plan. You need
to accomplish those goals first. Mh.
Then graduate,
you know, to the planning aspect because
it's also you run the risk of
too much information where people will just
be in like, paralysis, I guess, as you
just do not
Yep. And so establishing those goals are very
important. But, you know, when it starts with,
you know, the income via expenses,
any assets you have versus liabilities you have
to get your network. Well, an I'll challenge
the person that already has the network. Right?
Because how many times have you ran into
the person and they have a lot of
assets or they have a considerable estate. And
then they walk in and they're, like,
I'm just saving. I'm I'm going hard at
it, and they're doing wonderful. Right? Like, they're
knocking it out of the park. But then
when you ask them, well why did you
save all this money.
Right. They look at you cross, And they're
like, well, I don't know. And I don't
know what I'm gonna do with, and I
don't know when I wanna
and they don't... They've never thought about it.
They just put their nose as the grinds
stone, and they just hammer hammer or hammer.
And then they never stopped smell the roses
along the way or do any of the
fun stuff or, you know, they don't know
what it's for. Yeah. And then you can
wind up 75, 80 years old 1 day
and you're like,
you know, you you've really slowed down and
you're like,
Well, gosh, darn it. I wish I would
have done something back when I was 65
or Right. 60 years old, but time flies
by and if we don't stop to analyze
this stuff.
It'll go buy in and hurry. Well, what
is the most common thing you hear when,
you know, even we have clients come in
and we're doing
you know, planning is I should've have came
in earlier. Oh, yeah. Should've have started earlier.
Yeah. Because it's it's harder to play Catch
up. Right. And if they had just, like,
contributed in an extra 200 dollars a month.
Yeah. I can make a drastic difference. Right.
Or, you know, maybe they had way this
sounds kinda weird. Maybe they
almost over contributed. You had a retirement accounts.
And they have no, like, money on hand.
Yeah. And so it's all wrapped up into
something that they can't touch. Yeah. They can
go it without without penalties or something. So
there's so many different little tiny areas or,
like,
little rabbit trails that you can go down.
And you end up in kind of a
bad spot. And you're like, well, I just
didn't know. And that whole ignorance says bliss
doesn't really apply to your finances.
Ignorance is not bliss. And what I've noticed
that works the best, and I think is
the most important is scheduling the those goals.
Yeah. And stating what they are. In short
term and long term. Right? Because if your
only goal is, I wanna have
2000000 dollars in retirement assets, when I'm 65.
Mh.
That's great, and that'll get you there. You're
missing everything else in between. Mh. Where
you know, maybe it is I don't have
a home, so you didn't say the way
you're supposed to do. Sp should have. Mh.
You know, and you're renting for 30 years.
When money could have been used to
some of that money some of that are
purchasing.
Yeah.
And then having the balance of short and
long term is we'll, have some within 1
year goal. Yep. Have 2 year, 5 year,
10 year goals. And then have retirement. Well,
and I hate to say it, but a
lot of people look at this and they're
like, I just talked to this 1 guy
that's 1 time
And he said to kinda do this? And
so I do it. And, like, do you
know what you're in? Right? Like, do you
know what type of retirement account you run
and is that beneficial for your unique tax
situation. Right? Because maybe you don't need the
tax savings today as So maybe the roth
could be a better option for you. Or
maybe you're in a really, really high tax
bracket today and you need?
Some tax savings and so,
and you don't even necessarily have to be
in a really high tax, but you don't
Just means you may have cash sitting on
the sidelines. Mh. And you're eligible to be
contributing to something that will save your taxes.
Maybe you have a small business, and your...
And you're kinda jamming your future self by
not letting that business make some contributions on
your behalf. There's so many different ways.
That you can, like, screw it up in
a small way. Yes. You know what We
realize no. You didn't know that you were
doing it. But it's because you never took
the time to talk to someone. So in
the event, you do wanna talk to someone
and you need someone, you know, work around.
This is... I know you.
Like, little john f s dot com. You
can you can look us up, You can
even text the office line, I believe. So
you know, if you wanna shoot us a
text message and say, hey, I need some
help
on
retirement planning, you can do that too. The
phone number to text is
54137
05:08
9 8. Like how I plugged that in
Justin. I appreciate him that. And also, I
mean, even if it's... Even if it's... It
can be not retirement plan.
Yeah. It can
be anything that's money relates it. Mh.
Then there's so many different options based on
how much risk tolerance you have. Right? Like,
if you're a super aggressive
investor versus a really conservative investment
investor, there's so many options out there and
most people don't know what those options are.
You you talk to someone. Right? Like, it's
not and is intimidating. I think as you
would
assume that it is. Right. Like, I can't
tell you how many times I've had someone
call. They're not a a good fit for
what we're doing. But I've been able to
have a 40 minute conversation with them on
the phone. I'm not charging them for that,
and I'm just giving them all the information.
That they need in order to go make
the right move for them. And then sometimes
people call thinking that they don't need our
services at all, and they just have a
question, and then we get to talking and
they're like, and Well, like, that's kind of
above what I'm comfortable doing, do you mind
just doing it for us? Right. And I'm
like, yeah. We probably can. So it just
depends on your situation. And the majority of
people are more than capable of figuring all
this out. But do they want to spend
the time? Well, do they have to or
out the time? Yeah. And sometimes that's just
the case. I don't want I don't have...
I know how to spray. I I know
how to spray for bugs around my house.
Right. But guess what? Pay. I don't have
the time to do it. And so I
pay someone to make sure the ants aren't
in my house because of... The cost of
me having to hear my wife complain about
Handsome the house is not worth it to
me. I would rather pay the 30 dollars
a month. To have someone do it. And
so I farm that out. And a lot
of people decide, hey, I don't have the
time to watch the stock market.
I don't have the time to, you know,
be in the loop on this stuff. I'm
just gonna farm that out, and that's okay.
Yeah. And so establishing the short term and
the long term goals as it extremely important.
Because if you just have long term goals,
you never...
You don't you don't know if you accomplish
tell you. K. So Justin, here's what I
wanna do. I wanna talk a little bit
more about retirement planning and what goes into
it. K.
But I think we need take an obscene
profit break. Perfect So let's go ahead and
take that break. And then when we get
back, we're gonna talk a little bit more
about
retirement plans and all that other fun stuff.
You guys are listening to 93 9 fm
and 12:40 k q, and the true well
show will be right back.
Alright, everybody. Welcome back to the True wells
radio show where
myself, Matt Dixon and Justin B. Are bringing
you everything that you need to know about
retirement plans.
And do you need 1?
Is it time for 1? What actually goes
into 1? Well, all that more. So hopefully,
you caught the first part of the podcast
if you did not. You can always go
check that out? It's gonna be on our
website little john f s dot com.
Justin. Where did we leave off and where
the heck are we going? Yeah. Well, we
got through which number 1,
assessing your current financial situation. Number 2 is
setting the financial goals.
And number 3 that we're kinda getting into
right now is the retirement planning aspect of
it.
Okay. Which... And then this is 1 is
there's always a rule of thumb,
you know, you save enough money to try
to replace between 70 and 90 percent of
your pre retirement income.
It changes for everybody... Well, and I think
it also correct me if I'm wrong, but
I look at this. And I'm like, it's
also kind an an estimate because inflation. Right?
Like,
I they... They're gonna claim inflation was blank
percentage. Last year and I'm gonna just say,
I don't believe it because I feel like
it was more than whatever you're gonna claim
that it was. And
So if you get a lot of years
of back to back inflation, maybe you need
more of than that 70 percent or
80 percent or whatever they're recommending people are
probably feeling not about now. Right? Like, I
feel bad for you if you just retired
and then you're in your first little wave
of time to pull extra because
inflation hit me it pretty hard, but we're
all feeling that. Yeah. The hardest things that
I've noticed to really project out was 1
inflation. I mean, you can use historical averages,
2 is health care costs
or how long you plan to live? And
longevity is the other 1. That's a huge
1 right like, the difference of you living
to age 75
versus 95.
Like that changes the picture dramatically. I just
went through this a couple times, you know,
these these last couple weeks with people where
we're looking at the numbers
And, you know, they wanna retire early, and
then I'm, like, okay. Well,
what if you lived at, you know,
95 instead of a hundred. It made a
difference. Right? The the last 5 years, especially
as things continue to get more expensive. And
that's why you gotta take the retirement plan
with a grain of salt. I feel like,
because there are so many things
that you have to assume in order to
make a financial plan. Yeah. And mean, you
plan for, you know, the alternatives is, you
know, we you can plan for higher inflation.
You know, the lot of scenarios, what if
inflation how are... Well, what if tax rates
changed? Because trying to estimate taxes
30 years down the road. Well, and this
is why I like what you say. Right?
Like, plan like worst case scenario. Yep. Don't
try and justify
your whole retirement plan on a best case
scenario because,
what if you have 5 years of a
down market. Yep. Or what if we actually
have World war 3, and it takes 6
or 7 years for us to get through
that. And your retirement accounts aren't what they
were, you know, yesterday.
There's so many different things that play a
factor in this. Mh. And I think that
airing on the side of caution a little
bit.
Can be a good thing. Yeah. And you
can even kind of put guard rails around
it and putting it this... Alright. This is
if things go extremely well. Right? This is,
you know, your cap of kind of what
you should take on a monthly basis, and
then you have the other end, is this
is.
And this is why because your low point.
When you say it's really important to be
lucky, Like, especially in retirement?
It's really important to look at this thing
on a yearly basis
because if you have, for example, a bad
year in the markets, maybe you're drawing a
little bit less out of your accounts. Mh.
Or on the flip side of that, if
you have a really, really good year,
maybe you go ahead.
Yeah. You actually take that trip to Europe
that you really wanna take. You don't take
the trip necessarily on the year where things
are down, but maybe you take the trip
on a year, that's good.
And so being flexible, I think in retirement
is a really big piece. And I even
like for where people
try
to do the plan to retire a little
bit early
earlier than you even expect. Mh.
And because that is if things go great,
Yeah, Maybe it'll work. But then if you're
just planning for that 1 point and you
don't
get there. Mh. Then you can just be,
you know, mortified and just defeated. And so
that's never a good thing either. Well, it
looks like I wanna retire at 50. 55
would be great. But if I have to
do 60, 65.
Yep. Why not? And what about, you know,
there's also the potential sometimes for
even though you have a officially retired, maybe
you do some part time job. Mh. That
you love and it's your passion,
and it keeps you active out in the
community, it makes you a little bit of
income, and then you're not stressing that retirement
account.
As much or maybe you're not depending on
that social security as much as you were
before, that can be an alternative too. And
so depending on your unique circumstances and what
you're willing to do or what you want
your life to look like, it can make
a big difference because some people, you know,
what you want your life to look like,
circumstances they're like, hey. I just wanna garden.
I just wanna stay home. I don't wanna
travel.
I wanna hang out with the garden. I
wanna have my grandkids over.
And it's simple. It's cheap,
and
the... That's what they want. But some people
are not content with that. They wanna travel,
And so that lifestyle cost, that kinda goes
back, I think to what we talked about,
you know, what the first part of the
show was, setting some goals and really being
honest with yourself. Because if you go in
and you make this financial plan but you're
not being honest with yourself. If you come
in and your eye, I'm gonna spend 3000
dollars a month. That's easy. Mh. But you're
not being truthful. Your actual
spending is, like, 5000 dollars a month.
Well,
your financial plan might not pencil how you
hoped it would. So being realistic spending with
yourself is a very big piece of that.
Being realistic and transparent
because if you plan for something in your...
You know, like what you just said is,
I want 3, but I need 5 You
need playing for 3. Yeah. You're you're gonna
be in a world of hurt. Whoa,
you just mentioned it again transparency. I did
a financial plan for someone, and
we got to the end of this thing,
and we had spent some, you know, significant
time on getting this thing really crafted, and
then they drop a bomb on me at
the end of it, and they're like, I
got, you know, 200000 dollars of gold too.
And I'm like, pick
that would have been nice to know what
the
Information. Yeah. Because
that can completely changes the entire pick sure
here, and you are super stressed out this
whole time about, you know, your financial plan,
and you're willing to actually spend
on some of that gold that you have.
Well that changes everything
and now that lifestyle that you wanted is
very doable.
And most commonly what?
I've ran into and I've seen is
which... This is being very generic saying somebody's...
Somebody retire at 65.
Oh then, if you retired 65, typically you
have about 12 years or where you actually
are spending more money.
You know, you're traveling. You're spending time with
the grandkids,
typically when people get in their late seventies
early eighties, they don't tend to do
as much. Right? So maybe the need in
your eighties isn't the same as the need
in your sixties.
True. And so you can account for that.
And that can change in some of, it
as some people say, well, I can't retire.
Well, you can.
Whether you should or not is a different
story. Absolutely. It's a matter of adjusting the
numbers to be realistic
because it might
things change. Mh. And if you're especially on
a fixed income retirement, if you have to
put any new roof on your home?
That can change it quick. Right?
So it can benefit you to plan for
you for the new vehicle.
Yeah. Can change
especially even without... It's If you're a new
car buyer.
Another 40, 50000 dollar cars and now that
can change
the expenses and retirement tremendous. Yeah. And I
think 1 of the other big pieces too,
especially as you're getting older is looking at,
what is it that I ask actually want
my estate to do over a long period
of time? Do I have errors? Mh. What
do I want them to get if anything
and then who gets what? And that can
really actually shift the dynamic of how you
handle those those assets.
And sometimes especially like, if you live in
Oregon, and it's not a real super tax
friendly state for...
You know, when you pass away. Yeah state
taxes and stuff. You know, maybe that kind
of changes the narrative, you if you have
a larger date, maybe you're looking at something
like gifting some assets away,
or being strategic with where how you set
things up so that
the the tax implication is less and the
errors get more. And it could be as
much as
moving your primary residence out of state.
We've seen that people are a considerable amount
of money. Yep. And then the, you know,
another important 1 is especially
retirement planning is choosing the right accounts.
No and is,
you know, when does
pre tax investment,
you know, makes sense versus post tax investments.
Like the difference between
traditional Ira or Roth ira.
Some 04:01 k have
roth options,
whether that makes sense now or not or
maybe it saves money to convert later. Sure.
And makes a difference.
So we can really drastically change the type
of accounts. And again, like, There's no magic
number. It's different for everybody, but figure out
what that number is you need in retirement
on a monthly basis, and then you can
plan around that, Mh.
And then you gotta throw in some curve
balls in there too. But justin I have
some more curve balls actually that I wanna
talk about now that you mentioned it.
But before we get to those, do you
mind if I take and I'm seeing profit
break?
No. Okay. Alright. Everybody. Welcome back to the
True World Radio show where Justin and I
are covering retirement plans, and we're super stoked.
To give you all the stuff that you
need to know. Well, maybe not all of
it, but how about a lot of it?
Some of it. Some of it. Okay? Because
there's a lot that goes into a retirement
plan.
And everyone does it a little bit differently.
Right? Like, no 2 plan are probably identical
to each other. No.
And we kinda talked about maybe some of
the key points that goes into building 1.
But, Justin,
when we were heading into the break there,
we were starting to get into
talking a little bit about kind of the
strategy, Mh.
Portion of this thing, you know, looking at
at your risk and how often do we
need to kinda go over things. Do you
wanna kinda
continue talking about that a little bit for
us. Yeah. So the investments well, it also
depends on
what
What the goals are. Mh. So, I mean,
time Horizon is a big thing with regards
to investment strategy.
Yeah.
So depending on what those goals are and
what your time horizon is, it may shift
how much risk you're willing to take. Because
I mean, if you have 30 year time
horizon where you don't even have access, like,
in a retirement plan,
you may
be more risky with those
assets.
Yeah. Than
saving out to purchase a home. Okay?
And so it can drastically shift, but you're
people have typically a risk tolerance,
How much risk they are willing to take,
and it does not necessarily mean that that
is
for every single account. It's for the blend
of everything.
Just kinda stay within a risk tolerance.
Okay. Depending. Yeah.
And then, you know, asset
allocation, you know, diversifying assets,
you know, having some stocks, some bonds and
maybe some real estate involved.
Can be
preferred, I guess with how it would be...
I have the ability to have assets strung
out over different areas. It just It goes
back to that comment, I think I made
earlier about all the different levers that you
can pull. Mh It's like, well, if you
have a bunch of money in your retirement
account,
but you're 45 years old. Right.
And you
need a hundred grand because whatever,
that... But if you had maybe a rental
property that you had equity in. Mh. And
you're, like, I have to get to this
money, and I didn't expect to have to
spend a hundred thousand dollars.
Okay. I'm gonna let this piece of real
estate go. Right now I have access to
the money that I needed, to and then
you didn't have to deal with the penalties
around that retirement account that you had. So
like you said, it's really beneficial to if
you can,
have money in different places Yeah. So that
you can,
you know, be a little bit more liquid
on your feet. Yeah. And then there's there's
people that are
you know, they like to have a lot
of the money and and, you know, stocks
bonds those assets. And then there's other people
that really like their money in real estate.
Mh. Because it... And they may be over
concentrated in real estate, but that's what they
know. Sure. And there's nothing wrong with that.
At all.
It's just understanding that the risks
that come along with either 1. Yeah.
In access a lot of time when people
wanna retire early can be problematic
because
of the 59 and a half rule for
Ira
where you can access the money without penalty.
Some 04:01 case have different rules in them
that if you're 55 in retired deal of
access. But for the majority of it as
a blanket statement, I guess you could say
59 and a half is kind of a
ballpark to be able to access retirement funds.
Mh.
And so retiring earlier than that takes strategy.
Right. And here's the thing I think a
lot of people don't think about is what
if you're not gonna be taking your social
security until... You know, you, maybe even take
it early. You take it at 62.
Yeah. What are you gonna do for the
bait roughly those 2 years in between where
you don't have social security.
And you're no longer contributing the social security
Exactly. Which can change the numbers a little
bit too. And sometimes people really need to
wait till retirement age in order to start
drawing on their social security because they are
really dependent on the income. Right? Like, some
people doesn't matter. They're like, hey, I've got
all these pensions over here. That's enough income
to meet my needs Right. To pay the
bills. And then the other stuff is the
fluff, but not all people are like that.
Sometimes you are income dependent and that's why
it's really important to look at the whole
thing and say, wait a minute. Let's be
tactical about how we do this. Right. And,
you know, longevity is another 1 that with
social security that is a big difference. Yeah.
Like, your health is shot. It's like, well,
maybe it's okay to take it early. Yeah.
But Does it may make sense. Maybe
everyone in your family has lived to a
hundred and 10, and, you know, like,
well maybe let's delay this till 70. I
don't know.
But I think you're right. The strategy there
is really important. 1 thing that I look
at and say is also really important is
insurance. Right.
Because
now, does everyone need it? And that's not
what I'm saying. But I'm saying in certain
circumstances,
insurance plays a huge role.
Especially health insurance. Just 1 we don't talk
about a whole lot. But man, if you
end up in the hospital,
and you got a million dollar bill, and
you didn't have
health insurance.
I mean, it's possible that you end up
Medically bankrupt. Right? No. I have a million
dollar child with medical events. And I am
thankful for insurance. And you're in years is
an example of of those things where it's
like, you were being careful. It was a
fluke accident. Right? Like, you weren't... You on
a 4 wheeler, but you were just putting
around and make yelling hard running something
out of the blue happens, and then it's
a million dollar medical bill, But you had
the insurance.
And so, look, you're not medically bankrupt.
Congratulations. And now I get to never complain
about the cost of insurance. But the right
matters in there. Yeah.
But, you know, help insurance is just 1
piece of the mix. You know, you'd also
gotta look at life insurance. Right? I look
at this personally.
Now I look at my own situation and
I'm like, health Okay. I know what our
bills are. I know I have a child,
and
I just know my my family dynamic and
I'm like, if something happens to me,
and I'm out of the equation. That's a
really big income hit for my wife and
that completely
would change
the way that, you know, she's able to
raise our child. Mh. And I look at
that. And I'm like, I need to have
adequate life insurance because in the event that
something happens to me, I wanna make sure
that not only is my wife taken care
of. But my kids taken care of, and
not just taking care of, but I like,
I want her to be able to mourn
me being gone. She... I I don't want
her hat to have to go to work
Right? Like, I want her to be able
to just stay home, be a mom
raise the child and not have to worry
about money. So I'm willing to pay
that extra amount
to make sure that she's taken care of
that the kid is taken care of of.
And it doesn't have to be forever. Riley.
I he needs to just be able to
be old enough to be out of the
house. So realistically,
he needs to be, you know, they both
me to be kinda covered and taken care
of until he's 18 or 20 years old,
and he's out kinda doing his thing. You
know, maybe she wants to go back to
work or do something or maybe she wants
to go back to work even sooner. I
just want her to have the flexibility
to do whatever she feels like is best
Mh. And not have to let money
make
the decision for her. I mean, me and
we we both have life insurance. Yeah.
It's not enough live of insurance for my
wife to be financially set for the rest
of her life. That's not the point. Mh.
The point of it is, you know, pay
off, you know, debts and things we have
and then be have give for the ability
to live and take care of the service.
You don't wanna how I worry about a
mortgage or a car payment Right. Or any
of that stuff. Yeah. And there's a lot
of life insurance
that is great in a lot of different
ways. And it can do a lot of
cool things. Mh. Is even having
you know, you can use life insurance for
business reasons,
so say, you know, you're a partner in
a company, and
1 of the owner owners passes away.
Right. You can have a policy on them
to be able to say, purchase the rest
of the company
No
outright. Right.
And then differences in, like, pensions with survivors
benefits.
The difference in the pension
may be cheaper to just go buy a
20 year term policy.
Yeah. To cover if something happens to you
because if you're liable
you... It's still gonna pay. Mh.
So,
and then there's just kinda of math and
figuring out if that cost makes sense. So
it life insurance is awesome. Yeah. And it
can be used in a lot of different
ways
strategically.
Yeah. Because there is no blankets. Like everybody
needs a 20 year term policy when they
hit 20 years old.
No.
But It's not necessarily true. Well, and what...
I mean, here's the other thing to think
about too. Maybe you don't have a wife
and a in a kid. Maybe it's just
you. Mh. And you're like, you know what?
No one's really depending on this income. Right?
I don't need the life insurance or
maybe.
You don't have anyone that's dependent on you,
but in the event that you die you
wanna leave something behind is someone that you
love. Or maybe it's you have enough assets.
Where yeah. There's no need. That's true too.
Yeah. You're sitting on 10000000 dollars,
Maybe you don't need of half a million
dollar life insurance policy.
So there's a lot of really great things
life insurance can do.
It's not necessarily for everybody.
But
it's unique in the things that it can
do. Yeah.
You know,
Okay. So we've kinda talked about, you know,
going back over this. We've talked about setting
some goals and we've talked about knowing your,
you know, you what your unique financial situation
is. We've talked about kind of planning.
Getting in and doing that maybe a little
bit earlier than you thought. We've talked a
little bit about investment strategy and insurance,
I kinda wanna transition us over into, you
know you're at that point where,
you know, maybe you're approaching retirement really quickly
and you're ready to start or even you're
even ready to start pulling some of those
assets out of a retirement plan. I wanna
talk about taxes.
Right? Mh. And everyone's probably listening to this
and insane. I don't wanna talk without taxes.
Yeah. Well, well, let's... Talk about maybe how
you can pay less in taxes, but
we've gotta take. I'm seeing profit breaks. So
when we get back, Justin, I'm gonna ask
you to talk to our listeners about how
can they be savvy and pay
less in taxes.
Are you ready for that? I'm ready. K.
This is the true L3I show you're listening
to 93 9 fm m or 12:40AM
on K q we'll be right back? Justin,
we're back on the air and we're wrapping
up an awesome segment on everything you need
to know about a financial plan or a
retirement plan.
And when we left off,
I gave you a little bit of a
cliff hanger saying, hey,
talk to me about tax planning.
How do taxes.
Yeah. Taxes,
our favorite subject.
Talk to me about maybe, like, how you
can navigate that. In a smart way. Well,
it'll really depend on what assets are available
and what type of accounts that they are
in. Yeah. If you only have 1 account
in social security,
we probably can't get super exotic.
Yeah probably.
Maybe depending.
But even... So where does this is blanket,
like, assuming, you know, somebody has a roth
ira, a 04:01 k.
And some after tax assets. Right?
So it can be a strategy of in
retirement,
especially so say you retire early. Where there's
no income. You're not taking social security.
There's no pension. You just have this gap
years. Okay.
That can be a potential as is I
have no income. Yeah. That's when you can
start pulling a lot, some out of buyer
rates. Right?
Traditional Ira or 04:01 kids. Sorry. Not not
necessarily raw ira because that's going to be
tight. You were gonna start talking about roth
convergence, and I'm like... Maybe. Yeah.
But depending on if it's necessary or not,
because maybe your income needs aren't that high,
and you just want to drive down your
04:01 k assets, and then you can use
it,
you know, the tax free stuff later.
It's very unique for every single person Mh.
Roth conversions are agreed too in that same
scenario.
Whereas,
I have no income. Let's take a distribution,
we'll convert it to
Roth,
pay the taxes on it as long as
you wait 5 years.
Salt tax free. Right. And the growth
The road. Yeah. And that's the big 1.
Right? Like, say you managed to get a
hundred thousand dollars out of you know, your
traditional account whereas it grows,
So does the amount that you gotta pay
taxes on. But if you get it over
into that roth, and then you can let
that thing grow over the next 10 years
or something?
And then you get to access all of
it without paying taxes. Mh. Well, if you
wanted to buy the beach house, and
you know, all you had was your traditional
account. If you gotta pull 300000
dollars out in order to make that purchase
happen,
Well, that's gonna suck because you're gonna lose
a lot of its taxes. Right if it
was over there cl in the roth and
growing over there.
Maybe you go pull it out of that
account where you're not gonna drive up your
income for the year. Right. So there's a
lot of different things that you can do.
And I that's 1 of the reasons why
you actually pay your financial adviser. Yeah. Right?
Like because everyone gets hung up on this
fee. Lot I'm paying this guy 1.2 percent
or I'm paying this guy 1 percent or
whatever that fee is. Right? And then it's
like, well, did the guy...
That was charging you 1 percent, do any
planning for you at all? Or did he
just say I'm gonna manage your assets?
What was it worth the 0.2
percent?
That you're paying extra to the other guy
in order to, you know, set you up
toward you're saving thousands of dollars on potential
taxes. Right. Right. And so, like, I think
that's also 1 of the things I look
at when I try and evaluate is this
person worth it because sometimes they're not. Right.
But sometimes they are, and it really depends
on what is it that they're offering you
and what is it that you're looking for?
And
especially with not understanding how the taxes, can
and
imp things. Mh.
Yeah. I change. That it may be a
30000
dollar savings in tax.
Or maybe your estate was in bad order.
Right. And
because you didn't have a trust and everything
was set up. Or not set up at
all. Maybe you were gonna pay the state
an extra hundred thousand dollars and the state
taxes just because
you were never pushed or prompt
to take care of your estate. So there's
a million different ways
that you can, you know, pay more than
you necessarily should in either taxes
or whatever.
Penalties,
there's there's a bunch of ways that you
can kind of, stay the. State planning is
another big 1, and even the most of
part of an estate plan to me to
you personally. Yeah.
Is
updating
beneficiaries.
Right. Or because that can change and it
can cause a mess.
It can. And so you don't want
you can update your beneficiaries at any time.
So if you're not sure, please go and
check. Yeah.
Because, you know, things happen, families change, the
dynamics of family change,
and you want things to go where you
want them to go. Yeah. That's that's just
a big piece of the thing is making
sure that, you know,
your estate is honored the way that you
want it to be honored. And there are
ways that you know, you can set things
up to where
I,
you just... You feel good about to how
you've done it and what the plan is
and it takes a lot of stress off
of people when they know that things are
in order.
So there's that.
You know, for me for Amy, you just
mentioned that a big thing for you is
making sure beneficiaries are are in line. I
look at this and I also say,
1 of the big things for me is
going back ever so often and looking at
what the plan is. Right? And then saying,
are we in alignment with Right. With what
the plan really is. Right? Because sometimes people
they get older, and they're
plans change or something happens in their life,
and you'd need to be able to adjust
your goals and your strategy and and review
things and say, you know, my risk
is lower today than it was. Right. 5
years ago, or, you know, the market has
really slid down and I've got cash on
the side, I wanna be more aggressive
because I wanna try and buy this thing
cheap. Yeah. And so I think re, you
know, meeting with your advisor and talk and
establishing a plan and reviewing that, you know,
at least every year is a really good
way to make sure that
everyone's on the same page and that you're
in the right spot. And then another 1
that's kind of important which is going back
to.
Risk tolerance. Mh.
Is just because you're retired.
Yep. Doesn't
necessarily mean your wrist tolerance should drop tremendously.
Right. Because what if you have so much
that you're never gonna run out of money,
and you wanna be very...
Well, I'm dropping the word,
you wanna be very like,
liberal with your giving to others. Right? You
wanna you wanna bless other people.
So and even more afford to take a
little more risk. Even more of that as
too as, say you live into your nineties.
You'll still have a 30 year time horizon.
That's a long time. Even in that's a
lot of market cycles. And even in the
economic conditions we're in right now, when you
have, you know, inflation,
going crazy. Mh.
And you're not able to capture some of
that upside with what's going on, you can
find yourself going backwards.
Right as even though you're spending the same
amount of money,
everything's gotten so much more expensive,
you may need to take more
Your wrist tolerance may be higher to capture
of the upside. Yeah, parts of it to
be able to ride you to 90 and
a hundred. Mh.
That's true.
Okay. Well, just and I hate to break
it to you, but we're out of time.
So