Retirement Talk Podcast with Laura Stover: Recent Episodes
Redefining Wealth
Retirement talk - Redefining Wealth and Your Money with Laura Stover is a podcast that educates, entertains, and helps prepare our listeners for retirement. It's a show designed for those looking to maximize their financial efficiency and fulfill their lifestyle. It is also geared toward those needing to transition from accumulation to preservation and the necessary shift in how money is managed. Based on Laura’s two decades of experience with financial coaching and consultation to hundreds of individuals across the US, this podcast could make a difference in your retirement income, cutting your taxes, or both! Laura shares thoughts and ideas from today’s premier experts in the field of retirement, as well as the latest in retirement trends to help you make better financial decisions regarding YOUR retirement. In each episode, Laura will share financial news and provide insight and resources on topics such as retirement, retirement income planning, reducing unnecessary taxes, protection from market risk, wealth transfer, estate planning strategies, long-term healthcare, social security and much more. Your host is wealth advisor Laura Stover. Laura is the CEO of LS Wealth Management. She is also the founding partner of LS Tax, a consulting and tax planning firm. Laura is a registered financial consultant and investment advisor. She attended Huntington University, as well as the prestigious Wharton School with a certification in executive leadership, and focus on entrepreneurism. She has been a co-author with Renowned Businessman Steve Forbes as well as a multiple time contributing columnist to many national publications such as the Wall Street journal, CNBC online and USA today. A sought-after speaker and entrepreneur, Laura has close to twenty years of experience as an investment advisor. She has become a well-known financial resource and a go-to advisor for national media outlets and clients across the country. The focus starts with why you plan to retire in the first place, how you will fulfill your dreams and most efficiently organize your assets. You'll plan how to manage the growth necessary to sustain your lifestyle needs throughout your retirement journey. We want to redefine your wealth and money.
Laura Stover, RFC® discusses the concept of time segmentation and its application in allocating retirement savings for a stable income during retirement. Time segmentation involves matching investments with the point in time when they will be needed to meet retirement income needs. This strategy provides clarity, comfort, and control over retirement income and helps mitigate the effects of market volatility.
We cover the four buckets of money in a time segmented approach and emphasize the importance of purpose-based allocation. The benefits of time segmentation include flexibility, optionality, and reduced risk capacity.
It’s important to work with an income specialist to determine the best strategy for individual retirement goals. Key takeaways include the significance of purpose-based allocation, the four buckets of money in a time segmented approach, and the potential benefits of time segmentation in reducing the impact of market volatility and providing flexibility and optionality to long-term growth buckets.
Time segmentation is a strategy to invest for retirement and emphasizes its role in aligning investments with the point in time when withdrawals are needed to meet retirement income needs.
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Simple diversification used to be the go-to plan for a typical portfolio. A balanced plan of stocks, bonds, and cash would simply do the trick. But that type of diversification has been proven less effective in recent years with the abundance of market volatility. Today, Laura Stover, RFC® takes on financial guru Dave Ramsey’s version of a Safe withdrawal rule.
As we approach retirement, our priorities begin to shift. While we still want to grow our money and stay ahead of inflation, protecting what we've accumulated and generating income become top priorities. Traditional diversification, which involves a mix of stocks, bonds, and cash, has proven less effective in recent years due to increased market volatility. A major risk retirees face is having a big market pullback at the same time they're withdrawing their retirement paycheck. This can lead to a negative sequence of returns To mitigate this risk, it is essential to divide assets among different baskets or segments. By separating assets into different time frames and corresponding risk profiles, investors can balance the need for income today with the potential for growth in the future.
It is important to stay informed about market trends and adapt your retirement strategy accordingly. Market volatility and economic conditions will continue to change, requiring investors to explore alternative diversification strategies and consider new factors when constructing their portfolios. By staying proactive and working with a trusted financial advisor, individuals can navigate the complexities of retirement planning and retire with confidence.
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Today Laura Stover, RFC® explores the concept of choice overload and how it can affect your investment behavior and retirement planning. With so many options and information available to us, it's easy to feel overwhelmed and unsure of the best path to take. But today we will provide you with tips and insights to help you navigate through this sea of choices and make informed decisions that align with your goals and aspirations.
Having more choices does not always translate to better decisions. In fact, research has shown that too many options can lead to decision paralysis or option paralysis. When faced with a multitude of choices, we tend to become indecisive and unsure of which path to take. This phenomenon has been observed in studies conducted by Stanford University, where researchers found that customers were more likely to make a purchase when presented with a limited selection of options compared to an extensive selection. Humans are simply not good at making decisions when they are overwhelmed with choices.
As investors, we are bombarded with information and tools that promise to help us make the best financial decisions. However, this abundance of choices can complicate rather than simplify our decision-making process. It can lead to biases and traps that hinder us from making sound investment decisions. Let's explore some of these traps and how to avoid them.
The first trap is inertia. When faced with too many choices, some investors choose to avoid making a decision altogether and do nothing. This can be detrimental to your financial well-being, as doing nothing is still a decision in itself. To overcome this trap, it's important to have a clear understanding of your goals and the purpose behind your investment decisions. By aligning your choices with your overall plan, you can overcome inertia and take action towards achieving your financial goals.
The second trap is naive diversification. This occurs when investors spread their assets among all available investment options without considering their goals, asset allocation, or cost. Naive diversification can lead to a hodgepodge of investments that may not align with your risk profile or financial objectives. To avoid this trap, it's crucial to have a well-defined asset allocation strategy that separates your safe investments from your growth investments. This strategy should be based on your risk profile and long-term goals, rather than simply picking a little bit of everything.
The third trap is opting for attention-grabbing investments. It's easy to get caught up in the latest buzz and choose investments based on what you recently saw on the news or heard from friends and family. However, this can lead to impulsive decisions and overspending on investments that may not be suitable for your unique situation. To avoid this trap, it's important to do your own research and seek advice from trusted sources. Look for content that is backed by reputable research and consider how the investment aligns with your overall plan and risk tolerance.
To navigate through the jungle of choices and make the best financial decisions, it's important to start with a process. This process should involve unpacking the industry jargon and deciphering the content of the information presented to you. Look for trusted sources and limit the number of options available to you. Focus on a few top options that align with your goals and consider the full range of alternatives. By narrowing down your choices and understanding the purpose behind each investment, you can make informed decisions that are in line with your financial objectives.
It's also important to have a strategy call with a financial advisor who can guide you through the decision-making process. A trusted advisor can help you unpack the information and provide you with a vetted selection of options that align with your goals and risk profile. They can also help you understand the implications and potential impact of each choice, ensuring that you are making decisions that are appropriate for your unique situation.
In conclusion, choice overload can be overwhelming and lead to poor investment decisions. By starting with a process, understanding your goals, and seeking advice from trusted sources, you can navigate through the sea of choices and make informed decisions that align with your financial objectives. Remember to focus on the purpose behind each investment and consider the implications and potential impact on your overall plan. With the right guidance and a clear understanding of your goals, you can make the best financial decisions for a successful retirement.
The future outlook for investors is promising, as technology continues to provide us with more tools and information to make informed decisions. However, it's important to stay grounded and focused on your goals. Don't get caught up in the hype or the latest buzz. Instead, rely on a well-defined process, trusted sources, and the guidance of a financial advisor to help you navigate through the choices and make the best financial decisions for your retirement.
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Laura Stover, RFC®, takes on the topic of interest rates today, and how they relate to your financial future. It is important to consider the historical context of interest rates. Over the past few decades, interest rates have been kept artificially low by central banks around the world. This was done in an effort to stimulate economic growth and prevent deflation. However, it was only a matter of time before rates began to rise.
If we look back to the 1970s, interest rates were much higher than they are today, even 19% at one point. This was a period of high inflation and economic instability, and the Fed's actions were aimed at cooling down the economy and reducing inflationary pressure.
In comparison, the current interest rates are still relatively low. While they may feel high for those who have only experienced the last 20 years of low rates, they are nowhere near the levels seen in the past.
When the Federal Reserve raises interest rates, it aims to increase the cost of credit throughout the economy. This makes loans more expensive for businesses and consumers, leading to a reduction in borrowing and spending. The Fed funds rate, which is the rate at which commercial banks charge each other for short-term loans, has a direct impact on the cost of borrowing for individuals and businesses.
Higher interest rates can have a negative impact on the stock market, as businesses may amend or pause plans for growth due to the increased cost of borrowing. However, it is important to note that the relationship between interest rates and the stock market is not always straightforward. In some cases, rising rates can actually be a sign of a strong economy, which can be positive for stocks.
In light of the current interest rate environment, it is crucial to have a well-diversified portfolio that can weather different market conditions. This means having a mix of assets that can provide both growth and stability. One approach to achieving this is through the use of a bucket strategy.
The bucket strategy involves dividing your savings into different buckets, each with a specific purpose and time horizon. The first bucket is for immediate cash needs and should be held in liquid accounts such as high-yield savings or money market accounts. The second bucket is for intermediate-term expenses and can be invested in low-risk assets such as bonds or CDs. The third bucket is for long-term growth and can be invested more aggressively in stocks or other higher-yield investments.
By diversifying your portfolio in this way, you can take advantage of higher fixed rates for your liquid bucket while still having the potential for growth in your long-term bucket. This approach allows you to balance risk and reward and ensure that you have access to funds when you need them while also allowing your savings to grow over time.
In a rising interest rate environment, we also discuss alternatives to traditional bank products. One option is a Treasury Floating Rate Fund (T-Flo), which is a low-cost, fully liquid investment linked to U.S. government debt. These funds can provide a higher yield than traditional bank accounts while still offering the safety and security of U.S. Treasury bonds.
Another option to consider is a Multi-Year Guaranteed Annuity (MYGA), which is a type of fixed annuity that offers a guaranteed interest rate for a set period of time. MYGAs can provide a stable source of retirement income and can be a good option for those looking for a higher interest rate than what is currently available in bank CDs.
Structured notes are also worth exploring as a fixed alternative. These notes are linked to the performance of an underlying asset, such as a stock or index, and can provide a higher yield than traditional fixed-income investments.
While it is impossible to predict the future direction of interest rates with certainty, there are a few key factors to consider. The Federal Reserve has indicated that it plans to continue raising rates in the coming months, although the pace of rate hikes may slow down. Additionally, inflation is currently at historically high levels but is expected to decline in the months ahead.
It is important to stay informed and regularly review your portfolio allocation to ensure that it is aligned with your risk profile and financial goals. Working with a qualified financial advisor can help you navigate the changing interest rate environment and make informed decisions about your retirement savings.
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Laura Stover, RFC® looks at the ongoing Israel-Hamas war and how it might affect interest rates and your financial future.. With ongoing uncertainty about the economy, wars in Europe and the Middle East, and protests at home, it's no wonder that Americans are taking a closer look at their financial plans. In particular, we will explore the potential impact of the Israel-Hamas war on the US, the implications for interest rates, and the threat of inflation. So, let's dive in and unpack these important topics.
One of the biggest questions on everyone's mind is how the escalation of the Israel-Hamas war could affect the US. Could it lead to a wider regional conflict? And what would be the consequences for the US economy? If the conflict deepens and other players such as Hezbollah and Iran become involved, it could send oil prices soaring. This, in turn, would lead to higher costs for gasoline and consumer products that rely on diesel and jet fuel for transport. The fear is that this surge in inflation could plunge the US economy into a recession and trigger layoffs.
Inflation is another major concern for Americans, and rightly so. Despite some reports suggesting that inflation is easing, prices are still rising, albeit at a slower pace. The current core inflation rate stands at 3.2%, down from 6.5% in December 2022. However, this is still significantly higher than the Federal Reserve's target of 2%. It's important to note that we have embedded inflation that is here to stay, and we are currently experiencing 40-year highs in prices. The average American is spending 3.2% more on groceries and facing rising gas prices. If the Israel-Hamas war escalates and triggers a surge in oil prices, the situation could worsen.
The Fed has been on a tightening cycle for the past 17 months, raising interest rates from 5.25% to 5.5%. They have hiked rates 11 times, the highest number in 40 years. The recent cool down in inflation has led to optimism in the markets, and it's highly unlikely that the Fed will start cutting rates anytime soon. They will likely stay the course and continue to monitor the situation.
Given the uncertainty surrounding geopolitical events and their potential impact on the economy, it's crucial to have a comprehensive retirement plan in place. This plan should address future higher taxes, rising healthcare costs, and market volatility. It should also include a strategy for generating income that isn't at risk. Capital preservation should be a primary goal for retirees, as they no longer have the luxury of dollar-cost averaging through contributions to their retirement accounts. By segmenting their assets for growth and utilizing a range of investment tools, retirees can better weather market downturns and protect their nest egg.
While we can't predict the future or control geopolitical events, we can take steps to protect our financial well-being. By staying informed, adjusting our plans as necessary, and working with a team of experts, we can navigate the uncertainties of the global landscape. It's important to remember that the past is not always an accurate predictor of the future, and each economic cycle is unique. However, by having a comprehensive retirement plan in place and being prepared for potential market downturns, we can better position ourselves for a secure and prosperous retirement.
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Laura Stover, RFC® discusses the Federal Reserve's Bank Term Funding Program (BTFP) today, a topic that is often overlooked but has significant implications for our economy.This program, which was introduced in response to the failures of banks earlier this year, has the potential to create new money and impact the value of long-term securities. Let's dive deeper into this issue and explore its implications.
To understand the BTFP, we first need to differentiate it from quantitative easing (QE). QE is a Fed open market operation that involves buying bonds out of the market to ease monetary conditions. On the other hand, the BTFP is a credit facility that allows bondholders to use their bonds as collateral for a loan. While both tools aim to add liquidity to the system, the BTFP specifically targets bondholders with heavy capital losses.
The BTFP is essentially a generous version of the old discount window, providing a direct loan from the Federal Reserve to banks. This program aims to prevent market panic and ensure that banks have the ability to meet the needs of depositors. However, if defaults occur, the BTFP could effectively become a form of quantitative easing.
One of the key concerns with the BTFP is the potential for inflation and interest rate spikes. With inflation running at its highest levels since the 1980s, focusing on financial stability could risk creating further inflationary pressures. Additionally, the BTFP's valuation of collateral at par, regardless of the actual value, could lead to a significant deterioration in the value of long-term securities.
Further, the BTFP raises questions about the need for such a massive backstop. While it was understandable during the financial crisis of 2008, the current economic climate doesn't seem to warrant such a program. The influx of liquidity through the BTFP, combined with the trillions of dollars printed during the pandemic, raises concerns about the long-term impact on the value of the dollar and the sustainability of our economy.
The Federal Reserve's Bank Term Funding Program is a significant development in our financial landscape. While it may not be as well-known as quantitative easing, it has the potential to create new money and impact the value of long-term securities. As we move forward, it's crucial to keep a close eye on the implications of this program and its potential impact on inflation, interest rates, and the overall economy.
By staying informed and working with a qualified financial advisor, you can navigate these uncertain times and make informed decisions about your retirement. Remember to consider all aspects of your financial life and ensure that your retirement plan is well-rounded and aligned with your goals. With careful planning and strategic decision-making, you can achieve the retirement lifestyle you've always imagined.
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Laura Stover, RFC® is discussing the recent decision by the Federal Reserve to leave interest rates unchanged and the potential implications for retirees and investors. We will also explore the ongoing efforts by the Fed to combat inflation and the impact it may have on the economy.
The Federal Reserve recently announced that it would be keeping interest rates unchanged at its October meeting. While the market initially responded favorably to this decision, there is still uncertainty about the possibility of rate hikes in the future. The Fed will meet again in December, and if inflation remains high, there is a chance that rates may be raised.
This week’s featured article from The Washington Post titled "The Fed is Still Pushing to Get Inflation Down. Do People Feel it?" highlights the ongoing efforts by the Federal Reserve to control inflation. The Fed has been raising interest rates in an attempt to cool down an overheating economy and bring inflation back to its target of 2%. However, there is still uncertainty about whether these measures will be effective.
Fed Chair Powell acknowledges that there's still some mystery surrounding the matter.
The decision to raise interest rates can have significant implications for retirees and investors. Bonds, which are often a key component of retirement portfolios, are particularly sensitive to interest rate changes. When rates increase, the prices of existing bonds decline, as new bonds with higher interest rate payments become more appealing to investors.
Bonds are having their own 2008. That doesn't mean you throw the baby out with the bathwater, as they say. Stocks really didn't do all that well last year either. And stocks are starting to come back again led by that magnificent seven.
In light of the current market conditions and the potential impact of rising interest rates, it is crucial for retirees and investors to have a well-diversified portfolio and a risk management strategy in place. Traditional 60/40 portfolios may not be sufficient in navigating these complex market conditions.
You have to have stop loss indicators that are designed with a goal to mitigate downside risk and remove that emotion from the investing process. Your static 60/40 portfolio doesn't do that. Your target date fund doesn't do that. Your 401K, your 403b, many of your mutual funds are not actively managed with those types of algorithms and proprietary intellectual property with rules to help navigate through different market cycles.
When planning for retirement, it is essential to have a comprehensive income plan that takes into account the potential impact of interest rates and inflation. Relying solely on interest rates for generating income may not be sufficient. It is important to explore alternative options such as structured notes, index CDs, and annuities that can provide income guarantees and potentially higher returns.
We are making our world-class CPA’s available to you, even at this busy time of year. You can call LS Wealth at 419-633-0955 or go to redefiningwealth.info.
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Laura Stover, RFC is solo today for a special episode as we cover this week’s featured article from Kiplinger “Consistency Is the Key to Investing When You're Retired.” We need to focus on consistent returns rather than average returns or market fluctuations. While volatility may be advantageous during the accumulation phase, it can be detrimental to retirees who rely on their investments for income.
We also are covering ongoing news events, such as the Israel-Mideast situation andthe debt ceiling. What effects could these events have on investing and retirement? As always, it’s important to use non-correlated strategies and options to hedge against volatility and manage risk.
We hear from other financial authorities in today’s show, including David Walker, the seventh comptroller general of the United States. His book questions whether we will still be a superpower by 2040, and he outlines several things he believes the US Government should do, especially as it relates to the ever-growing debt ceiling.
Today, you’ll also hear from one of my favorite money managers, Jay Pestrichelli, discussing how he’s looking at investments in 2023.
As always, it’s important to have a solid income plan, addressing healthcare costs and taxes in retirement.
Link: America in 2040 - Still a SuperPower? https://www.amazon.com/America-2040-Superpower-Pathway-Success/dp/1665500840
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Laura Stover, RFC® is joined by guest co-host Darlene Tucker, CFP® today. This week’s weekend brief comes from Forbes: “5 Predictions For An Economic ‘Soft Landing’ That Were Totally Wrong.”
With a lot of uncertainty in the world, and now 2 wars going on, investors are asking what that means for their futures. Are we in for a soft landing? Before we answer that, Darlene and I look at some history - 5 times that media called for a soft landing, but got it totally wrong. This happened in 1973, 1980, 1981-1982, 1989-1991, and of course in 2007-2009. In each one of these examples, the “landing” was anything but soft.
Of course, past performance does not guarantee future results. But while some analysts are calling for a soft landing now, in late 2023, there are steps you can take to protect your portfolio and your retirement future.
Much of America’s debt is in credit cards. Darlene reminds us that taking a good hard look at our spending habits can be helpful. And with interest rates higher than just a couple of years ago, that opens more opportunities for investment outside of just the stock market.
As always though, the very best thing you can do is work with a financial professional to create a plan that’s individualized to your circumstances, like we do here at LS Wealth. Our contact info follows.
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In this week’s Retirement Talk podcast, with Laura Stover, RFC®, and Michael Wallin, CFP®, we delve into the major advantages of separately managed accounts (SMAs), a topic that doesn't often make its way into the podcasting world. SMAs can be a game-changer for those nearing retirement or already in retirement.
SMAs offer direct ownership of investments, reduced transaction costs, and the potential for tax harvesting. These benefits set them apart from traditional mutual funds or ETFs, which are more commonly discussed in the financial world. Mutual funds, for example, are essentially a pool of investments shared among many investors, often with low minimum investment requirements. While they offer diversification, they lack individual control over the underlying assets. ETFs, on the other hand, are a hybrid of mutual funds with lower costs but less active management.
The key distinction with SMAs is that they provide personalized investment options tailored to your specific goals and preferences. You have direct ownership of the securities in your portfolio, which allows for more control over your investments and potentially better tax planning. This is especially valuable in the context of tax harvesting, where you can strategically sell assets to offset gains and minimize taxes.
However, SMAs may not be suitable for every investor due to their higher entry requirements. Typically, SMAs require around $150,000 to $200,000 per sleeve of the portfolio. For those with smaller portfolios, a blend of SMAs and other investment options, like ETFs, can be an effective strategy to achieve diversification and control.
We also touch upon the emotional aspect of investing. Emotional reactions to market news and events can lead to impulsive decisions that may harm your long-term returns. Having a well-thought-out investment strategy, as part of a comprehensive financial plan, can help you stay the course and avoid detrimental emotional reactions.
Lastly, it's crucial to remember that investment decisions should align with your overall financial plan, which includes income planning, tax strategies, estate planning, and more. A holistic approach to financial planning, as encapsulated in our six-pillar Life Arc framework, can help you make informed decisions and work toward a more secure retirement.
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Laura Stover, RFC®, and Michael Wallin, CFP®, discuss this week’s featured article from the weekend brief: "Investment Trade Offs: Why You Should Know Your Return on the Hassle Spectrum."
It's a critical consideration for investors, especially in today's financial landscape. We discuss the fascinating story about a couple who decided to invest in real estate back in 2018. They were making around $2,500 a month from their investment property. While that might not sound bad, it came with a price—late-night calls, maintenance, dealing with tenants, and taking on additional debt.
The pivotal question is: Is it worth the hassle when you evaluate the return on investment? This concept, known as "Return on Hassle," urges us to consider not just the expected return from an investment but also the time, effort, and work associated with it. In the case of real estate, it encompasses finding tenants, property maintenance, dealing with debt, and other tasks that are often seen as "hassles" when compared to more traditional investments like stocks and bonds.
Laura and Michael explore the benefits and drawbacks of real estate investing, acknowledging that every investment has its pros and cons. We emphasize the importance of viewing real estate as part of an overall investment portfolio and not in competition with other assets. We also touch on the tax advantages of real estate investing, such as 1031 exchanges, and the potential impact of changes in tax policies.
One of the key takeaways from this discussion is that real estate can offer more control over your investments compared to traditional options. However, we challenge the idea that it's the only asset class that provides such control. Laura highlights the importance of choosing investments in companies that align with your values and have strong growth potential. We emphasize the need for a well-diversified portfolio that includes various asset classes.
In addition to real estate, we close with another alternative asset class—options trading. Options can provide investors with a level of control over their investments while also serving as a form of insurance for their portfolios. We stress the importance of seeking expert guidance when considering options trading, as it requires specialized knowledge.
In summary, this episode encourages you to evaluate your investments not just in terms of potential returns but also the "hassle factor." We believe in the power of diversification and the need to strike a balance between different asset classes to build a resilient and successful retirement portfolio.
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Today, Laura Stover, RFC® and Michael Wallin, CFP® discuss the importance of planning for retirement income and the role of annuities in retirement planning. They start by emphasizing the significance of having a solid plan in place, especially in the face of economic uncertainties like the pandemic, supply chain disruptions, inflation, and market corrections. Over one-third of Americans over the age of 50 regret not having a lifetime income source, as revealed by a recent survey.
We highlight the role of annuities in providing structured, guaranteed income during retirement and stress the need to identify the right annuity product for one's specific situation. Annuities are designed for income purposes rather than accumulation, which makes it important to choose a reputable insurance company.
Laura and Michael discuss various types of annuities, including multi-year guaranteed annuities and fixed indexed annuities. They emphasize that annuities should be a part of a comprehensive retirement plan and not the sole solution. There are potential benefits to using structured notes as part of a diversified investment strategy.
Purpose-based allocation should be the priority, where different financial tools are used to address specific financial goals in retirement. Always seek professional advice and consider individual circumstances when making financial decisions.
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In this episode of Retirement Talk: The Redefining Wealth Show, Laura Stover, RFC® and Michael Wallin, CFP® delve into what clients value most in a financial advisor. They emphasize the importance of effective communication between clients and advisors and the need for a well-defined process that aligns discussions with clients' long-term goals. They also discuss the significance of a seasoned financial advisor with a broad spectrum of knowledge and a team approach to address various financial needs.
The episode highlights the value of behavioral finance in helping clients make informed decisions, particularly in uncertain market conditions. Additionally, the hosts touch on the advantages of working with independent advisors who prioritize clients' interests and provide objective advice.
We spend a few minutes revisiting last week’s topic, annuities, and why it’s important to have a team in place to help you navigate this complex area.
The episode underscores the importance of a comprehensive financial plan tailored to each client's unique situation. The hosts offer complimentary strategy sessions for those seeking personalized financial guidance.
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Today, Laura Stover, RFC® and Michael Wallin, CFP® discuss the importance of planning for retirement income and the role of annuities in retirement planning. They start by emphasizing the significance of having a solid plan in place, especially in the face of economic uncertainties like the pandemic, supply chain disruptions, inflation, and market corrections. They mention that over one-third of Americans over the age of 50 regret not having a lifetime income source, as revealed by a recent survey.
We highlight the role of annuities in providing structured, guaranteed income during retirement. They stress the need to identify the right annuity product for one's specific situation, and how annuities are designed for income purposes rather than accumulation. It’s important to choose a reputable insurance company.
Laura and Michael discuss various types of annuities, including multi-year guaranteed annuities and fixed indexed annuities. They emphasize that annuities should be a part of a comprehensive retirement plan and not the sole solution. They also mention the potential benefits of using structured notes as part of a diversified investment strategy.
Purpose-based allocation should be the priority, where different financial tools are used to address specific financial goals in retirement. Always seek professional advice and consider their individual circumstances when making financial decisions.
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Laura Stover, RFC® and Michael Wallin, CFP® discuss the Baby Boomer Dilemma documentary and its implications for pre-retirees and retirees. The film talks about many topics we routinely cover on the show- the growing national debt crisis, the potential for higher tax rates in the future, and the need for proactive tax planning. The national debt has exceeded $32 trillion and is expected to rise further, potentially leading to higher tax rates in the future. Effective tax rates for Americans could reach 45% by 2030, according to predictions by experts.
We also cover the current state of the economy and the possibility of a recession in 2024. The market is currently experiencing a recovery, but there are concerns about a potential recession next year.
It is crucial to have a well-diversified tax plan that includes a mix of deferred, tax-free, and taxable accounts to optimize retirement income Roth conversions can be a valuable strategy to take advantage of current lower tax rates and create tax-free income in retirement.
It is important to stay informed, work with a team of professionals, and have a comprehensive retirement plan that addresses income, taxes, investments, and estate planning.
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Laura Stover, RFC® and Michael Wallin, CFP® discuss why 1966 was the worst year to retire and why it matters in 2023. They explore the market downturn in 1966 and its impact on retirees, as well as the similarities and differences between that time period and the current economic climate.
The market downturn in 1966 was a harbinger for difficult times ahead, with inflation and recessions following in the years to come. The current economic climate has similarities to 1966, with factors such as civil unrest, war, supply chain issues, and a contracting labor force. The lack of pensions for retirees today makes them more vulnerable to market volatility and the need for a solid income plan. Stress testing and having a diversified investment strategy can help retirees navigate uncertain times and increase their probability of success.
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Investors often underestimate the risk in their portfolio. Today, Laura Stover and Michael Wallin break down 5 common portfolio mistakes, as outlined by Christine Benz in Morningstar. They are portfolio sprawl, when your assets often overlap and have too high a correlation A redundant individual stock portfolio can be risky as well. For example, if you are overly weighted in tech stocks, what happens if there is a chip shortage?
Other risks include also-ran mutual funds, asset allocation not formed by the plan, and suboptimal asset allocation. It is crucially important to develop a plan that works for your individual situation, and stick to it. This includes modifying your portfolio when necessary.
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Timestamps (show notes):
0:00:49 Discussion on common portfolio mistakes
0:02:05 Portfolio sprawl and the importance of diversification
0:03:41 Redundant individual stock portfolios and the risks involved
0:05:59 The drawbacks of relying too heavily on mutual funds
0:07:51 The benefits of diversification and asset allocation
0:12:31 The impact of suboptimal asset location on taxes
0:18:39 The importance of dividing assets into income and growth
0:19:16 The need for a comprehensive retirement plan
0:26:45 The importance of tax alpha in retirement portfolios
Retirement planning involves mitigating risk and understanding the various risks that retirees face. Laura Stover and Michael Wallin break down these risks today, including reduced earnings capacity, visible spending constraint, heightened investment risk, unknown longevity, spending shocks, compounding inflation, and declining cognitive abilities. It is important to have a comprehensive retirement plan that addresses these risks and provides a reliable income stream. Retirees must also be aware of the sequence of return risk, which can deplete wealth rapidly if negative returns occur early in retirement.
Compounding interest can be a great way to grow your nest egg, but triple compounding in reverse can have a significant impact on retirement income. Reliability of income is crucial in retirement, and a solid plan is necessary to ensure a comfortable retirement.
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In this episode, Laura Stover and Michael Wallen discuss the concept of a cookie-cutter retirement portfolio and its implications for retirees. They start by addressing the recent news of the US being downgraded due to its high debt levels. They explain how the ability to pay off debt and the impact of rising interest rates can affect the economy and investors.
The hosts then delve into the topic of cookie-cutter portfolios, which refers to a one-size-fits-all approach to investing. They highlight the limitations of such portfolios, especially for retirees who have different risk profiles and income needs. They emphasize the importance of customization and diversification in investment strategies, as well as the need for adaptability in changing market conditions.
Laura and Michael also discuss the benefits of working with a financial advisor who can provide personalized advice and access to a wide range of investment options. They stress the importance of having a well-rounded retirement plan that includes considerations for healthcare, estate planning, and rising taxes.
Overall, the hosts provide valuable insights into the pitfalls of cookie-cutter portfolios and the importance of a tailored approach to retirement investing.
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Once you make the decision to take the next step toward ensuring a solid financial future, the next is who you should work with. There are all types of financial professionals that provide a variety of services, and one that we get asked about is the registered investment advisor or RIA. Are they an individual financial advisor or is it a company?
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will provide some clarification as to the role an RIA plays in financial planning and uncover why these differences between professionals may be important to you. By understanding and recognizing the type of advisor that’s going to fit your needs, you’ll have the confidence to trust the process and work toward your financial goals.
This will be one of the most crucial decisions you’ll make regarding your money so knowing what an RIA is and how that differs from a CFP®, CPA, broker, insurance agent and others will arm you with the knowledge you need to choose what’s best for you.
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Timestamps (show notes):
2:42 – Here’s how RIAs are defined
5:00 – One of the big differences with LS Wealth Management
8:44 – Commissions
11:06 – How much do RIAs charge in fees?
14:27 – 3 planning options to choose from
19:39 – Why need you need strategies for taxation
24:41 – What is a fiduciary’s responsibility
Big tech has seen strong gains in 2023 and has outpaced most other sectors. In doing so, the S&P 500 has also performed well, but when you take away a handful of tech companies like Apple, Microsoft, Amazon, Meta and others, the S&P 500 is only up 2%. This is a great reminder of why overconcentration can hurt a portfolio.
Being overweight in this tech position feels great when the market is doing really well because returns will be strong, but once we get a little turmoil and volatility, portfolios in that sector of the market really go down at that time. We’re going to unpack this topic with Laura Stover, RFC® and Michael Wallin, CFP® on today’s show and provide some context to this idea of stock market concentration.
This will dovetail right into a discussion on true diversification because when you have your portfolio segmented appropriately, one down year won’t determine the overall success of your investments. We’ll take you through our process and break down the strategy of diversification that we adhere to. That will help keep you from worrying about the direction the market is headed and how top-heavy it’s becoming.
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Timestamps (show notes):
6:00 – Large tech driving the gains in the S&P 500
9:53 – Why the dollars in the portfolio are the problem
11:28 – The gains are very modest for the majority of the S&P 500
15:29 – Resisting the temptation to chase the hot streak
21:58 – How to structure a portfolio for diversification
Every investor, whether you do it yourself or have professional help, needs to understand the fees they are paying because this is one of the most important factors attributing to investment performance overall. Fees can really eat into returns but they might also return better value than you would have achieved without the help.
So let’s unpack this idea a bit more with Laura Stover, RFC® and Michael Wallin, CFP® by taking a look at the most common fee structures you might pay a financial professional and the costs that often come with investing in certain products like mutual funds. The value you are achieving over the long run through various market conditions can help you make an assessment, but there are also many services that need to be accounted for when working with financial planners.
We want to provide you with relevant information on the show today so that you can make smart financial decisions. We’ll break down some of the numbers to give you a better idea of how to evaluate fees and share other considerations like revenue sharing and finding someone that aligns with your values and goals.
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Timestamps (show notes):
3:47 – Getting value for fee rendered
8:11 – Making sure clients know exactly what they’re paying for
10:03 – Pay attention to this particular mutual fund
14:30 – The real cost of owning a mutual fund
23:05 – Revenue sharing
27:52 – Aligning with your goals and values
No one can predict the future of finance, so how do you make sure your portfolio is able to withstand the inevitable swings in the market? The answer is through stress testing, which has proven to be a valuable tool in financial planning.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will walk you through how a portfolio is stress tested and explain what it’s trying to accomplish. The goal is to find out whether you have the most efficient portfolio possible that can give you the most amount of return, with the least amount of risk exposure, and we’ll break down how that’s done.
The planning process is often more important than the plan itself and this is a key part of that process. By evaluating the different planning strategies and testing them against the stresses of the market, you’re better able to segregate and segment the assets in your portfolio to provide the income, growth and other elements necessary for financial security.
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Timestamps (show notes):
5:52 – What exactly is a stress test?
8:59 – How this ties into segmentation
15:42 – The importance of understanding your cash needs
19:59 – Running an analysis based on portfolio design
25:34 – Why planning is more important than the plan
We’re more than halfway through 2023 and we’ve already seen the impact SECURE Act 2.0 has on retirement planning. These first six months have given the financial industry time to identify some of the potential pitfalls that the legislation creates for retirees.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will walk you through these key planning items that SECURE Act 2.0 made adjustments to help you identify areas where you might need to make changes of your own. The reason why these pitfalls exist is because they deal with major planning conversations like Roths, catch-up contributions, and required minimum distributions that are moving back again. All of these things can have a big impact on your long-term success, so we want to stay on top of it now.
We’ll cover all the significant changes you need to be aware of, but we’ll also close out the conversation with insight into Social Security strategies and how to get the most out of your benefits in retirement.
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Timestamps (show notes):
2:52 – Catch-up contributions with different tax implications starting in 2024
8:22 – Investing when your employer doesn’t match contributions
10:44 – The RMD age moving once again and it impacts income planning
14:33 – The flexibility provided by a Roth 401k
17:29 – Other significant changes that you need to be aware of
20:09 – Using Social Security to work as an investment for you
Fiscally conscious investors want to get the most for their money, and when it comes to working with an advisor, it’s important to understand the fee structure and what value they’ll provide. Now that anyone can research and access information at the click of a mouse, this question is extremely important to ask.
With more than 50 years of experience combined, Laura Stover, RFC® and Michael Wallin, CFP® understand the industry and what it takes to provide financial guidance for people working towards retirement. Those relationships, experience, and opportunity to learn from others is a huge benefit to working with someone like Laura and Michael, which is part of what we want to discuss.
In this episode, we’re going to break down the reasons why advisors are worth the fees they charge and how to evaluate the benefits you’re receiving. Returns are important, but the things that can’t be calculated like discouraging market timing and helping you avoid panic selling are two of the critical benefits to having an advisor on your side. They’ll also share some data to go along with these reasons to help paint the picture.
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Timestamps (show notes):
5:21 – The two ways fees are determined based on investments
8:36 – Quantifying the impact of optimal planning decisions
11:58 – Bringing increased returns with less volatility by rebalancing
15:10 – Accessing the research that advisors do
20:19 – Helping with investment strategies
23:20 – Helping clients avoid panic selling
29:09 – Discouraging market timing
31:39 – Saving you significant money in taxes
Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. We’d venture to guess that everyone who is listening to this podcast is very familiar with this concept, but it often gets confused with asset allocation.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will unpack diversification on this show and do so using the analogy of ice cream. We all crave this balance within our investments but you don’t want to over-indulge and reduce the effectiveness of what you’re trying to accomplish.
All investors have to accept the idea of risk regardless of how conservative their portfolio might be, so proper diversification can help prevent too much exposure to any single type of asset or risk. Find out if you’re diversified and learn more about how we help build this into our clients’ portfolios.
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Timestamps (show notes):
5:42 – How do you know if you’re diversified?
10:44 – Why a portfolio might not reflect the returns of the market.
14:53 – Reviewing portfolios and rebalancing investments
19:35 – Is the market the most efficient way to create income?
We know there’s always another market crash in the future, but should we be worried that it’s happening soon? An economist named Henrik Zeberg thinks so. He expects a massive blow-off top for equities in near future, and his belief is that the stock market could be headed to one of its biggest crashes in the coming months because the strength of the dollar is on its way down.
In this episode, Laura Stover, RFC® and Steve Rumsey, CIO of Optimus Advisory Group, will weigh in on this opinion and share their view on the current state of the dollar. How does it stack up against other currencies and is the fear warranted? We’ll explore whether this is a realistic possibility or if this is just another exaggerated headline.
The key, as always, is to have a balanced approach and that starts with a blueprint, a custom income plan utilizing our proprietary LifeArcPlan. We’ll tell you more about how that’s constructed so you don’t fall into the same investor behavior patterns that produce negative results during a down market.
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Timestamps (show notes):
4:56 – What’s our take on this opinion?
7:09 – Should we be concerned about the US dollar?
12:03 – Breaking down investor behavior
15:53 – Steve’s research into the stock market & economy
19:15 – The market becoming more volatile?
25:04 – Is the debt ceiling a bigger concern?
29:12 – Strategies people can utilize for a market crash
You’ll never be able to predict the movement of the market but understanding the cycles will make you a better investor. The market goes through different phases and building out a purposeful portfolio will help you stick to your plan through the ups and downs.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will breakdown a recent article about stock market cycles and how to approach your investments depending on what stage you’re in. When you step into retirement, you shouldn’t still be an active day trader or trying to time the market. By understanding the market and having the type of strategy, you’ll be able to navigate those cycles better.
Join us to get a better understanding of how we build a balanced portfolio that minimizes risk and employs strategic management, and learn more about how that approach evolves in retirement.
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Timestamps (show notes):
2:38 – Is the market up or down right now?
5:16 – Having the right time horizon for your investments
9:09 – The key to making money is minimizing losses and allowing profits to run
12:49 – The accumulation phase of the market
18:16 – Deciding which sectors to be invested in
25:58 – Purpose based allocation inside your portfolio
30:30 – Income planning becomes so important in retirement
Many times we find that retirees only look at that investment pillar with the traditional assets in mind. They focus only on investments and ignore critical areas that also need attention.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will break down an article on an area of diversification that could qualify for income planning, along with tax planning and estate planning. People can be closed minded to new ideas or non-traditional investments but we want to make sure that no option is left behind.
Today’s discussion on life insurance and annuities could benefit you as a volatility buffer or with tax planning, so it’s worth learning more about. The goal is to utilize a fully diversified portfolio and these tools might be part of constructing that during the Redefining Wealth® process.
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Timestamps (show notes):
4:13 – A little history on how retirement income has changed
7:54 – The tax component of this discussion
10:27 – How life insurance fits into a portfolio
14:25 – The modified endowment contract
17:36 – Why a fiduciary is so valuable in this process
23:32 – How the deferred income annuity could benefit you
26:24 – Utilizing a fully diversified portfolio.
We all have our own savings goals and dreams of retirement, but difficult markets and high inflation can be quite discouraging. Sometimes it feels like you’ll never achieve what you’ve hoped for. So what’s the secret to building wealth and reaching those goals?
In this episode, Laura Stover, RFC® is joined by Darlene Tucker, CFP® and Kyle Davis who will break down an article about a path to $10 million and what it takes to reach a milestone like that. For many people, that might seem completely unattainable, but there are steps you can take now to maximize growth and get the best returns on your money.
The key to building long term wealth is consistency, having a plan, and identifying a destination you want to achieve. The numbers show that over time if you have an average rate of return that you’re comfortable with and a consistency in investments, the total returns emphatically produce favorable results. There will always be bumps in the road and issues to navigate, but with a good plan, you can overcome those things.
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Timestamps (show notes):
6:13 – Inflation is top of mind right now
7:51 – Consistency and planning is key
11:06 – Start with process rather than product
14:09 – The magic of compounding interest
18:51 – Steps to take to reach that $10 million goal
22:17 – The value of having a quality team on your side
29:45 – Shifting your mindset as your approach retirement
33:04 – True planning gets into so much more than retirement accounts
Being flexible with spending absolutely matters in financial planning and it often gets overlooked when people step into retirement. Most people look at their budget and the assets that they’ve accumulated and that’s where they stop.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will examine an article by Dr. Wade Pfau that discusses variable spending strategies. Whether it’s inflation-adjusted fixed percentage rule, floor and ceiling rule, the ratchet effect, or others, we’ll provide a thorough explanation of most of the spending strategies included in the article, but we’ll keep it high level to help you take away the important aspects from what we want to convey.
This show might be a little more academic and in-depth than normal, but don’t tune out because this conversation is critical for investing and distribution. As inflation continues at a high rate and the debt ceiling issues continue to linger, you want to make sure you retirement foundation is on solid ground with the proper income plan.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Timestamps (show notes):
5:18 – ROI becomes reliability of income in retirement
7:25 – Constant inflation-adjusted spending
11:41 – Keeping your spending constant can increase risk
15:46 – Why you might shift more distribution into the early years of retirement
17:24 – The fixed percentage rule
21:50 – Why can’t the government come up with a proper spending sstrategy?
28:29 – Income planning is the foundation of a purpose-based allocation
Our relationship with money is much like the other emotional relationships we have in other parts of our lives. We tell ourselves we’re done making the same types of mistakes but end up repeating those same behaviors the next time the situation arises. The same thing happens in terms of how we invest our dollars and how we act when the market isn’t going up.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will dive into a recent article that discusses the behavioral side of investing and share what they’ve seen from people as they navigate the rough economic waters we find ourselves in. They’ll also talk about what’s being done from the Fed to improve market conditions and whether a digitalization of money is coming soon.
It’s important to have a financial professional on your side to help you through the good times and the bad. Understanding how our behaviors play a role in our decisions will hopefully help you avoid repeating those same mistakes both now and in the future.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Timestamps (show notes):
4:43 – What this week’s article says about decisions
7:57 – Understanding portfolio losses
13:02 – Why we feel like ‘this time is different’
18:32 – The investing questions you need to ask yourself
19:27 – The steps the Fed is taking to ease inflation
24:48 – How soon will the digitalization of money happen?
29:45 – The role perception plays in our behavior
We work with people that have investing questions all the time but there are two that investors often boil it down to. They want to know how long they need to be invested to be sure they don’t lose money and how long they need to stay invested to make sure they do better than an alternative investment.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will explain how a successful investment plan has to get measured over the long term to truly evaluate how well it has done. As they discuss, you need to have a long enough duration to let the performance of the solutions you put in place, give you the outcomes you’re looking for.
So how do you do that? Let’s take a look at the historical data and see what some of the bright financial minds have said. Then we’ll talk through the key considerations when building an investment strategy that are aimed at success over the long term.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Timestamps (show notes):
5:36 – How a random walk applies to long term investing
8:54 – Using a football analogy to show how this works
10:20 – What the data shows us
12:58 – Our view on long term investing and the bucket approach
16:07 – The other scenarios you have to consider
19:09 – Why 20 year periods are so important
27:28 – How important are fees?
29:16 – Finding your risk capacity
The market has shown some signs that it might be turning around, but we’ve seen quite a bit of up-and-down over the past few years. These fluctuations have created some nice gains at times for investors, but a lack of tax planning can keep you from maximizing your financial gains.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will delve into the power of tax harvesting and the role it plays in creating a comprehensive tax plan. Throughout the show, they will explain how ex-dividend date, the wash rule, and tax thresholds work and why these things are important for making investment decisions. If you don’t have a professional helping you with this, there are a number of potential pitfalls that we’ll discuss today.
Join us and discover how utilizing tax harvesting can be a powerful tool in your financial planning arsenal, allowing you to make the most of your income and helping you secure a comfortable retirement.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:09 – Is the market turning around?
6:24 – Repositioning assets for tax harvesting
10:37 – How does ex-dividend date fit into this?
13:30 – Understanding the wash rule
18:16 – Tips for avoiding tax thresholds.
25:42 – Expertise needed to execute tax harvesting effectively
A year like 2022 doesn’t come around too often but those significant market corrections we saw in both equities and bonds made many people begin to wonder about the effectiveness of the traditional 60/40 investment mix. Some people are even saying that there is no longer a use for this portfolio structure.
To truly evaluate whether that’s accurate, you have to first understand how to build a proper investment strategy. In this episode, Laura Stover, RFC® and Michael Wallin, CFP® weigh in on this topic and share their insight on building investment plans. They discuss the limitations of the traditional 60/40 portfolio and how a more dynamic bucket approach can help you better navigate the constantly changing economy.
There are many different tools to help you build the right portfolio, and we’ll explain how the LifeArcPlan puts a process in place to help you determine what rate of return you need and how best to achieve that over time by blending tactical management with strategic management. Hopefully this show will give you a clearer picture of how and why a plan is constructed.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:46 – Why the conservative investor was down so much in 2022,
8:19 – People need purpose-based allocations
11:25 – Diversifying into different buckets of money
16:29 – Why was the 60/40 strategy created?
20:11 – Blending tactical management with strategic management
25:37 – Is the US Dollar getting devalued?
The famous boxer Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” He meant it about his opponents, but we can apply that same idea to financial planning in the middle of a volatile market. How will you react when things first get difficult? Should you trust your instincts or stick to a well-defined process that you already put in place?
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will delve into the critical distinctions between risk tolerance and risk perception as it relates to investment strategies. They explore the role of emotions, information consumption, and self-awareness in making investment decisions, and offer valuable insights on creating a comprehensive retirement plan while avoiding common mistakes.
Managing your portfolio through a volatile market all begins the process, and we’ll give you insight into how our Redefining Wealth® process helps you build a plan that avoids these mistakes and helps to secure a stable future for you and your family.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:28 – How do you react when the turbulence first begins?
11:13 – What is the difference between risk tolerance and risk perception?
20:47 – What’s the best way to process all the information and how it applies to you?
25:33 – Putting a process in play and sticking to it.
Reaching retirement doesn’t mean you can put your plan in cruise control because plenty of risks remain. One that all recent retirees are dealing with is the sequence of returns risk. This is an overlooked risk when someone is stepping into retirement that doesn’t get nearly enough attention, in our opinion.
The five years before and the first five years in retirement are the most critical because of the risk that comes from the order (or sequence) from which your investment returns occur. If the market declines a lot in the early years of retirement, your withdrawals could significantly reduce the longevity of the portfolio.
In this episode, Laura Stover, RFC® and Darlene Tucker, CFP® will tackle this risk head-on and explain the impact it can have over the course of your retirement. Plus, they’ll take you through some of the safeguards that can be put in place to protect you from the inevitable downturns in the market to ensure savings can last you throughout retirement.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:06 – What is sequence of return risk and why is it important?
8:52 – What are some of the safeguards you can put in place?
14:57 – You can’t just eliminate market risk altogether
22:11 – Average rate of return vs dollars in the portfolio
28:52 – Segregation of asset types is key
For many people, the goal in life is to have enough wealth that you can pass it on to people or organizations you care most about, and your advisor should be a key partner in helping you with that estate planning. However, not every financial professional is equipped to help you secure your legacy and give you that peace of mind.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will discuss the importance of estate planning and how to ensure your financial advisor is qualified to guide you through the process. Listen to their insights on the consequences of neglecting non-probate assets, the advantages of using a revocable living trust for your IRA, and how to determine the right trust structure for your unique situation.
There’s a lot of great information online to help guide you through this process but if you truly want protection for your estate, you need to make sure you have correct verbiage about how assets go in and when/if they can come out in the future and that’s the role professionals play. Our goal is to help you build a plan that’s effective and efficient, and we’ll share how the LifeArcPlan is designed to help us do that.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:37 – Why the structure of an inheritance is so important.
8:28 – If you receive an inheritance, how do you approach that extra income from a tax standpoint?
12:19 – The benefits of putting a trust in place.
17:54 – Understanding the importance of beneficiaries.
22:32 – The different type of trusts and how they’re structured.
We spend most of our life saving and investing to accumulate as much wealth as possible before retirement, but there’s not nearly as much thought and research given to how you take that money out once you’re in retirement. Decumulation, in our mind, is one of the most important planning challenges because the fundamental nature of decumulation is much different from accumulating assets.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will identify the four unique risks that decumulation presents in retirement: sequence of returns, longevity, taxes and spiking expenses. We’ll take you through each of these individually and explain the potential problems that arise if you haven’t planned for them.
That’s why we make sure our Redefining Wealth® process puts an income plan in place before you step into the decumulation stage. It’s essential to do that before you transition because of these risks and the huge issues they pose. You also want to have the right balance between the different types of investment buckets and the right amount of liquidity in order as you build that plan, and you’ll learn more about that in this show.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:28 – Why decumulation and accumulation are so different
7:24 – Sequence of return risk
12:14 – Longevity risk
14:47 – Tax risk
21:51 – Spiking expense risk
When things are down, everyone’s risk profile gets much more conservative. Emotions shift as the market does, and we spend a lot of time consulting clients to help them keep balance. One of the products that we discuss more in this type of environment is the fixed index annuity, which people often love or hate.
FIAs are designed as competition to banking products, and they’re built to help make sure individuals are not in a position of losing value based upon market conditions. Right now, most people would love to see that hedge of protection around their principle.
That’s why we’re focusing our attention on FIAs for this episode. Laura Stover, RFC® and Michael Wallin, CFP® will help you better understand the role these annuities play in a plan, how they help balance out a portfolio, and the impact market volatility has on this investment.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:24 – Is now the time with interest rates increasing?
8:40 – How bonds and FIAs fit in the same portfolio
13:33 – How volatility factors in to the FIA
18:05 – Floating rate funds
22:25 – Is this the year to add an FIA?
Americans have been falling behind on retirement planning for some time now, and the past two years have only increased the difficulty to save money and grow a nest egg. This recent trend emphasizes the importance of proper planning, and we want to share some of the best retirement strategies to consider in 2023.
Much of what Laura Stover, RFC® and Michael Wallin, CFP® will discuss in this episode involves tax planning along with income and investment planning. Some of the planning items we’ll cover are spousal IRAs, Roth IRAs, IULs, and strategies for small business owners, and all of these aim to benefit you over the long-term.
As we’ll explain throughout our discussion today, tax diversification is every bit as important as investment diversification. Understanding how to best utilize taxable, tax-deferred, and tax-free accounts to build that investment strategy likely will prove to be very beneficial in the years ahead. That’s why take the team approach and rely on the strengths of multiple people to build the best plan for you. If you want to learn more, get in touch and start that conversation.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:36 – Taking advantage of the spousal IRA
5:55 – Weighing the tax benefits of a Roth IRA
12:39 – Consider funding an Indexed Universal Life (IUL)
16:04 – Tax diversification is so important
19:35 – Strategies for small business owners and those who are self-employed
21:45 – The Thrift Savings Plan for federal employees
If you go back to October of 2022, you’ll find the worst 12-month period ever for bonds. With the pressure on the economy, bonds struggled right alongside many other investments.
The last year showed us many investors move to bonds during periods of volatility, and many of those same people couldn’t understand why bonds deteriorated and values declined. Just three years earlier in 2019, the bond market was king and returns were substantial. So these investments are typically thought of as safer, but as we’ve seen, that’s not always true.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will look at the recent history of bonds and help you better understand how they work and how they are utilized in a well-balanced financial portfolio. Plus, they’ll share alternative investments that people might choose to reduce risk.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:54 – Bond returns over the past few years
6:02 – How to determine if bonds are a proper investment
11:16 – How bonds actually work
15:21 – Are we in a recession?
23:05 – Bonds as part of a well-balanced portfolio
27:47 – Investments that might be better for you
For the vast majority of retirees, there will come a time when the IRS comes calling and you’re required to start taking money out of qualified retirement accounts. These required minimum distributions (RMDs) are a great planning opportunity and a chance to have some control over taxation, but you need to be prepared ahead of time.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will get back to the basics and provide a great overview on how to plan for your first RMD. With SECURE 2.0 Act moving the age back to 73 this year, there’s even more time to make planning decisions, like moving dollars into a Roth account.
When it comes time to start taking these RMDs, you’ll need to consider the amount that’s required for the year, which accounts you’ll pull that from, and where you’ll distribute the money to. Our Redefining Wealth® process is strategic in how you approach each of these steps to help you get the most out of the money you’ve saved for retirement while limiting the taxes you’re going to owe the IRS. Whether you’re about to take your first RMD or have already started, understanding these strategies will help put you on the best path for retirement.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
7:17 – Strategies to consider ahead of RMDs.
11:32 – Determining which accounts to pull your RMDs from first.
13:43 – How do you actually take the distribution?
15:18 – Failing to take the RMD results in a costly penalty
19:54 – How this fits into your income plan.
It’s that time of the year where taxes become top of mind as people look through income over the past year to get their filing in order, but taxes need to be at the forefront of your financial planning throughout the year. The problem is tax planning isn’t simple. It takes years of experience and education to have a thorough grasp on what you owe, especially as your income sources expand.
We want to spend some time discussing taxable income on this episode to help you get a better understanding of what you’ll be responsible for in retirement. Taxes come in many different forms in retirement and it takes more than just a yearly check-up to stay on top of what you owe. Laura Stover, RFC® and Michael Wallin, CFP® will take you through the different types of income sources and talk through some of the tools and strategies we utilize with our clients.
Planning is a key pillar of Redefining Wealth® and something we should be mindful of on an ongoing basis. That’s why we have a CPA on the team that helps with discussions around tax harvesting, life insurance, capital gains, Roth conversions and more. By prioritizing tax planning throughout the year, you’ll be in a much stronger position financially in retirement and avoid a huge surprise each April.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:48 – What is taxable income?
11:57 – How do you get more money in the tax-free bucket?
17:31 – Is it too late to make meaningful tax changes if you’ve already retired?
20:24 – How does the death of a spouse impact income and taxes?
24:37 – The tools we use for tax planning
A declining market will make any retiree uncomfortable, and it could put your future in jeopardy if you haven’t thought through your withdrawal strategy. Many retirees struggle to shift their mindset from accumulation to distribution so let’s talk about how to determine how much you should be taking out of your accounts each year in retirement.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will tell you what the data says and explain the considerations you need to make when structuring a retirement income plan. Maybe the biggest factor you’ll face is sequence risk, which is the risk of encountering different market conditions early in retirement which puts a portfolio in jeopardy of not lasting a lifetime. Once you get into retirement, that sequence of return becomes very important because all that you built could go away just as fast depending on the timing of these withdrawals.
Traditional financial strategies say a 4% withdrawal each year is safe, but how accurate is that? Last year’s suggest rate had reduced to 3.3% but that has crept back up to 3.8% this year. These numbers might apply to you, but you won’t know until you build a proper plan. It all starts with a framework and our LifeArcPlan works with clients to input their data to determine a safe withdrawal rate based on a number of factors. We’ll take you through it all on this show to help you protect everything you’ve worked so hard to build.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:19 – Why this topic is so important right now
6:45 – The silver lining for people about to retire
13:36 – How inflation is gobbling up returns
21:03 – Changing your mindset in retirement away from accumulation
25:33 – What you need to consider when building your plan
The recent passing of SECURE Act 2.0 brought about a long list of planning opportunities, but the change in age for required minimum distributions will give advisors a chance to think outside the box on RMD strategies.
Now that the age has increased to 73, retirees and pre-retirees have even more time to evaluate options to start reducing retirement accounts in the most tax efficient way possible. Here’s what you should be asking: what strategies can I put in place that allows my money to be working for me and eliminates my future taxation? In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will share a few of the creative solutions that could be on the table for you.
Taking a tax-proactive approach is one of the pillars of our Redefining Wealth® process and RMDs provide a great chance to accomplish that. Our tax team can provide a wonderful walk-through and help our clients evaluate ways to reduce these accounts down based on your goals and what you’re trying to achieve. Let’s use these SECURE Act 2.0 changes to jumpstart the discussion and help save you the most money possible over time.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:44 – Why the tax rates today might give you more reason to take out more.
6:56 – Taking control of your future taxation by pulling money out ahead of 73.
9:06 – Are pre-RMDs a good strategy?
15:36 – When should you consider a Roth conversion?
21:38 – Using Qualified charitable distributions to lower tax rates
The start of 2023 brought us another round of retirement changes with SECURE Act 2.0 officially taking effect and there are a number of important provisions that retirees need to be aware of.
In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will take you through the changes they’ve identified as being most impactful for retirees and make sure you have a good understanding of what this means moving forward. SECURE Act 2.0 creates additional planning opportunities that you might want and they’ll explain why.
If you haven’t had the chance to look through this new legislation, make sure to listen in to find out more about what’s changing for required minimum distributions, qualified charitable distributions, catch-up contributions, and more. We can’t cover everything in this episode, but this should give you a great starting point for the next conversation with your advisor.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:12 – The required minimum distribution age is moving back again.
7:54 – Catch-up provisions and inflation adjustments
11:04 – An extended RMD credit for qualified accounts
15:45 – Changes to qualified charitable distributions
21:22 – A new exception to the penalty for tax on qualified plan distribution
25:17 – Qualifying for a hardship distribution in retirement accounts
Investors use rate of return to make decisions and evaluate performance all the time, but they often get misled by the average return. With the market showing some positive signs to start the new year, this is a timely topic to discuss on the podcast and we’ll do that by exploring a Kiplinger article about rate of return that we featured in our Weekend Brief.
Laura Stover, RFC® and Michael Wallin, CFP® will sort out the differences between the average and actual rate of return to make sure investors know which to use when building a properly diversified portfolio for retirement. It’s not what happens in a short duration, short period of time that you need to focus on. Instead, you want to look at your average rate of return for an extended period. That way you can evaluate solutions during a down market that will help you get back on track for the rate of return necessary to make your plan successful.
So we’ll walk you through how we integrate rate of return into the Redefining Wealth® process and show you why the bucket strategy and time horizons also play a key role in determining your investment strategy.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:32 – How is average rate of return calculated?
7:47 – Why average rate of return can be misleading for investing.
10:57 – Calculating actual rate of return
14:32 – Sequence of return risk
19:18 – Millenials have a different perspective
21:36 – Measuring your capacity for risk
Despite seeing a few positive days to begin the new year, investors are still in the midst of the longest bear market in nearly 15 years and plenty of economic doubt and uncertainty remains in 2023. This sustained bear market has made investors weary and wondering what they need to do to not only survive, but thrive in these difficult conditions.
Laura Stover, RFC® and Michael Wallin, CFP® will lay out a clearly defined checklist that any investor can follow to position their investments in the best way possible regardless of the current market movement. This structure and framework is core to the Redefining Wealth® planning system and we’ll explain how it all fits into the bear market checklist.
Knowing your time horizons and focusing on the returns that you need to be successful is just a piece of the investment strategy you’ll need to weather whatever this year brings, but knowing exactly how to structure your portfolio will help give you confidence in good times and bad.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
6:58 – Reflecting back on 2022
12:06 – The segmentation of assets
16:32 – Make sure you’re truly diversified
22:05 – Focus on the returns YOU need
25:32 – Investing for the long run.
No matter how experienced you are with money, there’s always room to grow and learn. It’s a characteristic you’ll find in the most successful people, including one of the greatest investors of all time, Warren Buffett. Today’s show will focus on the life and career of the man born in the years following the Great Depression, who displayed his entrepreneurial drive at an early age and turned that into one of the great American success stories.
So what can we learn from Buffett that anyone can apply to their own financial plan? Laura Stover, RFC® and Michael Wallin, CFP® will look back at the path Buffett has taken during his career and the characteristics that have made him so successful. The things he can teach us aren’t just for the wealthiest investors. Buffett rose up through hard work and strict financial discipline to become what he is today, and that story can benefit us all.
As you’ll learn, Buffett had a fierce desire for independence, and the method for that was money. He chased information and education from a young age and relied on experts to further his knowledge in the areas he was most interested in. That hunger for learning, coupled with his approach to investing that focused on value, compounding interest, and consistent returns, is a blueprint for success that we’ll explore on this episode.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:59 – Buffett’s entrepreneurial pursuits started early
8:06 – It begins with the right mindset
13:44 – His obsession with reading and learning
21:55 – A story of racetrack betting that shows his diligence to be analytical
25:39 – Who was his financial role model?
32:19 – Summarizing the lessons learned
The extended downturn in the market has given investors a chance to re-evaluate their portfolio and rethink the strategy that best fits their needs in retirement. Dividend-paying stocks are often a popular choice, especially in times like these, because they can help offset poor returns in a down year. One criteria to use when searching for a strong company is the dividend yield, which is how much a company pays out in dividends each year relative to its stock price.
Where we want to help you out on this episode is by putting into perspective how this yield can be helpful for retirees because some companies offer high growth potential but pay out low dividends while other companies don’t grow as quickly but pay higher dividends. The dividend ratio can help you understand what to expect from your investments so Laura Stover, RFC® and Michael Wallin, CFP® will make sure you have a good grasp on what this yield is and why it matters for your retirement.
We think there should be more than one way to garner income in retirement and these dividends could provide a nice compliment to your other income options. We’ll take you through some of the considerations to make when building your stock basket because dividend yield in conjunction with a total return approach can create a strong investment position for your retirement.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
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Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:45 – How dividends are often distributed.
5:13 – Understanding how dividend yields change based on stock price
8:14 – Putting together your stock basket
11:26 – Generating retirement income through dividends
14:06 – Top performing dividend yields
16:44 – How we structure a portfolio
As we prepare to turn the page to 2023, it’s impossible to ignore the state of the market as we close out a second consecutive year with negative returns. Investor concern seems more elevated than normal, which isn’t a surprise because this situation doesn’t occur often. The market rarely sees a down year followed by another down year, but that’s where we find ourselves right now.
We can’t make predictions on the market, but we can extract data from previous down years and try to make educated assumptions. In this episode, Laura Stover, RFC® and Michael Wallin, CFP® will provide context for this investment environment to help you better understand why we’re going through this extended down period. We’ll also take the current data and analyst projections to try to determine whether another year like this could happen in 2023.
We’ll also discuss the investment strategy that will best position you in markets like these because 2022 reminded us that even ‘safe’ investments aren’t always protected from significant losses. This year will also go down as the worst year for 10-year treasuries in modern financial market history. The only other time we witnessed a double-digit loss on the benchmark US Government bond was 2009, but it show us that proper planning is essential. That’s why we’ll tie it all back into our Redefining Wealth® strategy, which makes sure your money is diversified into multiple buckets based on time horizon so your retirement isn’t impacted by consecutive years of down markets.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:15 – Why it’s difficult to predict
7:37 – What past data tells us about bounce backs
10:06 – Making comparisons to the Great Depression
13:10 – Consumer spending now versus past years
18:53 – The string of bad years from 2000-02
22:10 – The worst year for 10-year treasuries
23:37 – Building a properly diversified portfolio
This past year in the market has been difficult for just about everyone. Even conservative investors, who felt comfortable in bonds or fixed income have seen those returns near 40-year lows. As we look ahead to the new year and work with clients to build out diversified portfolios, we want to spend a little time unpacking bonds and helping you understand the pros and cons for investing in individual bonds versus bond funds.
Laura Stover, RFC® and Michael Wallin, CFP® will discuss the framework needed to put a well-balanced strategy and help you understand how we help people make their investment decisions. They’ll also explain the pros and cons to bonds and bond funds and share some alternatives that might be worth considering depending on your risk appetite.
So much of bond investing depends on interest rates and the state of the market so we’ll also look ahead at 2023. Will the Fed be able to bring inflation back down and to what level? Let’s dive in and take a closer look at the bond market and how they fit into an investment strategy.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:54 – Defining each of these
4:53 – Investors have to make a decision
7:30 – Pros and cons for individual bonds
13:00 – Other fixed rate options
16:32 – Making investment decisions based on news
21:12 – Putting the framework in place to make the best choice
27:35 – Will the Fed get inflation under control in 2023?
This past year in the market has been difficult for just about everyone. Even conservative investors, who felt comfortable in bonds or fixed income have seen those returns near 40-year lows. As we look ahead to the new year and work with clients to build out diversified portfolios, we want to spend a little time unpacking bonds and helping you understand the pros and cons for investing in individual bonds versus bond funds.
Laura Stover, RFC® and Michael Wallin, CFP® will discuss the framework needed to put a well-balanced strategy and help you understand how we help people make their investment decisions. They’ll also explain the pros and cons to bonds and bond funds and share some alternatives that might be worth considering depending on your risk appetite.
So much of bond investing depends on interest rates and the state of the market so we’ll look also look ahead at 2023. Will the Fed be able to bring inflation back down and to what level? Let’s dive in and take a closer look at the bond market and how they fit into an investment strategy.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:54 – Defining each of these
4:53 – Investors have to make a decision
7:30 – Pros and cons for individual bonds
13:00 – Other fixed rate options
16:32 – Making investment decisions based on news
21:12 – Putting the framework in place to make the best choice
27:35 – Will the Fed get inflation under control in 2023?
No matter how well you’ve planned, there’s going to be some level of uneasiness for retirees when the economy struggles like it has over the past year. These volatile times motivate people to take the necessary steps to protect their retirement and proper planning can help you do just that.
Because the market has been so healthy over the past decade or more, many people have gotten complacent and have stuck with their investment allocation. They haven’t taken the time to explore and understand the diversification strategies that can help mitigate risk and preserve capital, which is an important mind shift that pre-retirees and retirees need to make. But that’s not the only misstep you’ll need to avoid. On this episode, Laura Stover, RFC® and Michael Wallin, CFP® will help identify four barriers to break down as you enter this next phase of life and will share the solutions to achieve that.
As we’ll talk about, the true value of holistic planning like our Redefining Wealth® process is not just asset allocation, what stock you’re in, and aggressive or moderate investing. It’s about finding happiness in your life through considering all the different elements that will help you achieve that. By understanding all of the areas of your financial house and taking control of your future, you’ll have peace of mind during the good times and the bad.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:10 – Understanding this is a temporary setback
7:20 – Control what you can control
9:28 – Diversification strategies
13:43 – Holistic planning to bring you happiness
17:10 – Understanding the different advisory services available
21:10 – Services that provide value to you
27:21 – Taking a proactive approach right now
We’ve experienced a lot of market volatility this year and a tremendous rise in interest rates, and people are looking for ways for their dollar to grow to combat inflation. As people explore options for diversifying their portfolio, annuities are becoming a part of that conversation more and more.
In this episode, Laura Stover, RFC® and Darlene Tucker, CFP® will discuss the pros and cons for Fixed Index Annuities (FIA) and use a recent article by David Blanchett to do that. The FIA is a means by which an individual can participate in the gains in the market when it’s going up without actually taking any market risk. And when bond yields are low, the caps on FIAs are going to be relatively low as well. But now that those caps have risen to a level that can provide a nice rate of return, more people are exploring FIAs for income.
If you want to know how an annuity might fit into your income plan, join us to learn more about FIAs and the reasons why they can provide downside protection, capture some upside potential, and even provide tax deferral as we approach the end of the year.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:20 – Background on our discussion today
6:05 – What is a Fixed Index Annuity
9:20 – The demand for FIAs increasing
13:33 – Properly allocating funds to annuities
20:53 – How a fiduciary will help you through this decision
24:30 – Tax deferral to end the year
The COVID pandemic has changed so much of our perspective on life but will it help drive people to pay more attention to the need for long-term care? At the onset of the pandemic in 2020, the last place you’d want to be is trapped in a nursing home, which is why we want to highlight this pillar of the planning process on this episode.
Laura Stover, RFC® and Michael Wallin, CFP® will try to answer those long-term care questions and help determine whether retirees need LTC policies coming out of the pandemic. If you want to understand just how under-prepared most Americans are, let’s start with a couple of stats we found from a recent survey. Only 16% of Americans even have a long-term care plan in place but more than 70% of people over the age of 65 will require a form of long-term care service at some point. Beyond that, fewer than half of the people surveyed had worked with a financial professional to address these needs.
Everyone has a different reason for not prioritizing this in the past, but many people don’t realize that long-term care has evolved and consumers now have a hybrid option that provides the care you need or will pay out in the event you don’t use it. Knowing what options are available might be the push you need to take that step towards getting your planning done. Ultimately, we want to make sure you have proper protection to provide the care and resources needed to get the best care possible without becoming a burden on your family, and our Redefining Wealth® will put together put a robust balance to help you see where the income will come from and how it will be covered.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:06 – Why are people underprepared in this area?
9:07 – Details on the modern LTC policies
16:10 – Putting a balance sheet together
18:56 – How legislation could change long-term care
25:40 – LTC can give you independence
As we prepare for the end of the year, there are numerous financial conversations that will happen as part of the Redefining Wealth® planning process and we want to get you thinking about one of those on this episode.
Many people have sold out of investments this year to move into cash because of volatility and uncertainty, and those choices will have an impact on your taxes for the next year. But even if you’ve been holding your mutual funds throughout the year, you still might have some phantom income that will be taxed because of the moves made within the fund by the money manager. Now is the time to get on top of these things and discuss your obligations and find out if there are any proactive steps you can be taking.
Laura Stover, RFC® and Michael Wallin, CFP® will help you get prepared on this episode by taking you through the factors that most commonly affect taxation when investing in mutual funds like capital gains, harvesting, turnover ratio and more. Make sure you’re mindful of these different issues and factors because they will impact your overall investing success and financial future.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:47 – Mutual funds can create a significant tax burden
7:05 – Turnover ratio
11:03 – Tax Harvesting
17:19 – Capital gains tax rates
21:54 – Taxes could rise after death of a spouse
Not many people expected 2022 to turn out the way it has from an economic standpoint as inflation, rising interest rates, and market declines have been in the headlines all year. The uneasiness has people asking us to explain how it got to this point and when we’ll start to see a turnaround.
We’ll try to do that on this episode as Laura Stover, RFC® and Michael Wallin, CFP® will spend some time touching on a few of the things they discussed with clients during a recent Investor’s Forum. When you look for the root of the issues, all we need to do is go back to the impact COVID had on employment, supply chain issues, and the stimulus money that was injected into the economy. We are now paying the bill for everything that’s taken place the last year or two, and with too much money chasing too few goods, we’ve seen the worst market performances in decades to go with soaring inflation
But history has shown us over the past century that the stock market will rebound and we’ll share some of that data on this show. What people need to remember is that the market is forward-looking and not a reflection of the economy and there are many factors that will play into the overall sentiment. We want to help you better understand a few of those things that will determine when we begin to see that turnaround, and this show will hopefully clear up that and the other questions we’ve been hearing a lot this year.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
1:40 – Why did this year end up this way?
7:54 – Impact of the 2021 bond purchase program
15:06 – What history has taught us about the stock market
18:46 – Reasons why inflation is so high
24:43 – How long will inflation last?
26:57 – Recession and interest rates
The steep decline in the stock market and rising inflation is impacting all Americans but no one is feeling it quite like people that are nearing retirement or those that recently made the transition to retirement. The drop in account value paired with the decline in purchasing power can create a lot of uneasiness about retirement.
On this episode, Laura Stover, RFC® and Michael Wallin, CFP® will help you get a better grasp on retirement income and how vulnerable it is to these unprecedented times. Moving from the accumulation to the preservation and retirement income stage of your life requires you to change your mindset and that can be difficult for people. Planning can ensure you’re making the best decisions about Social Security, pensions, and where to withdraw the money you need.
Instead of feeling like you have to make a move out of fear, people should channel those feelings and use them for motivation to learn what you can do to protect your finances. There’s never one solution or product that is always the right move. Instead, it takes a balanced approach and a process like our Redefining Wealth® to make sure we’re not making the wrong decisions at emotional times.
The steep decline in the stock market and rising inflation is impacting all Americans but no one is feeling it quite like people that are nearing retirement or those that recently made the transition to retirement. The drop in account value paired with the decline in purchasing power can create a lot of uneasiness about retirement.
On this episode, Laura Stover, RFC® and Michael Wallin, CFP® will help you get a better grasp on retirement income and how vulnerable it is to these unprecedented times. Moving from the accumulation to the preservation and retirement income stage of your life requires you to change your mindset and that can be difficult for people. Planning can ensure you’re making the best decisions about Social Security, pensions, and where to withdraw the money you need.
Instead of feeling like you have to make a move out of fear, people should channel those feelings and use them for motivation to learn what you can do to protect your finances. There’s never one solution or product that is always the right move. Instead, it takes a balanced approach and a process like our Redefining Wealth® to make sure we’re not making the wrong decisions at emotional times.
With all the volatility this year, there are a lot of individuals re-examining the value their advisor brings in. Without knowing every option and without understanding how different financial services are structured, it can be difficult to truly evaluate your performance. That’s why we want to provide a clear breakdown of what fees and costs advisors typically charge.
We’ll start today’s discussion with Laura Stover, RFC® and Darlene Tucker, CFP® by unpacking the fees that you’ll often find from Registered Investment Advisory firms. Understanding the ‘wrap’ fee structure and everything it includes is a great start, but it’s very important to know differences you’ll find from institutional versus retail money management. Along with the fees we’ll detail, you should also take into account the added value that comes from having a comprehensive planning team. Being able to lay out a clear plan that you understand and can follow adds significant value to the performance of the portfolio because it eliminates the decisions that typically get made with emotion.
In this modern-day financial planning world, success really relies on the talents of a team to help. Trying to do things on your own or working with someone that doesn’t provide a comprehensive plan like you’ll find with our Redefining Wealth® process will make it more difficult to build a plan that covers every aspect of retirement. Today’s episode should help lay that out for you and set expectations for what to expect from you financial professional.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:53 – Interesting data about female advisors
7:23 – Registered Invest Advisory firms charge a fee
8:04 – What is a wrap fee agreement?
11:16 – Institutional vs retail money management
14:21 – Added value from a comprehensive planning team
18:08 – When you should run for the door
22:25 – Commissioned based advisors
26:35 – So who should you work with?
With all the volatility this year, there are a lot of individuals re-examining the value their advisor brings in. Without knowing every option and without understanding how different financial services are structured, it can be difficult to truly evaluate your performance. That’s why we want to provide a clear breakdown of what fees and costs advisors typically charge.
We’ll start today’s discussion with Laura Stover, RFC® and Darlene Tucker, CFP® by unpacking the fees that you’ll often find from Registered Investment Advisory firms. Understanding the ‘wrap’ fee structure and everything it includes is a great start, but it’s very important to know differences you’ll find from institutional versus retail money management. Along with the fees we’ll detail, you should also take into account the added value that comes from having a comprehensive planning team. Being able to lay out a clear plan that you understand and can follow adds significant value to the performance of the portfolio because it eliminates the decisions that typically get made with emotion.
In this modern-day financial planning world, success really relies on the talents of a team to help. Trying to do things on your own or working with someone that doesn’t provide a comprehensive plan like you’ll find with our Redefining Wealth® process will make it more difficult to build a plan that covers every aspect of retirement. Today’s episode should help lay that out for you and set expectations for what to expect from you financial professional.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:53 – Interesting data about female advisors
7:23 – Registered Invest Advisory firms charge a fee
8:04 – What is a wrap fee agreement?
11:16 – Institutional vs retail money management
14:21 – Added value from a comprehensive planning team
18:08 – When you should run for the door
22:25 – Commissioned based advisors
26:35 – So who should you work with?
There’s nothing quiet about the impact inflation is having on Americans right now, but inflation has long been considered the silent killer for retirement because of its ability to slowly erode your nest egg over time. If you aren’t properly prepared to offset the year-to-year decrease in purchasing power, it might mean trouble for your retirement down the road.
On this episode, Laura Stover, RFC® and Michael Wallin, CFP® will dive into everything surrounding inflation to help you understand how we’ve gotten to this point, determine whether the worst is behind us, and figure out when we might see things return to normal levels. The Fed believed this inflationary issue would be resolved in the short term, but now there’s worry that this could continue well into 2023 and even 2024.
So what can you do to protect your nest egg and keep from falling behind inflation? We’ll tell you a few actions you can take right now and explain how inflation adjustments are built into the LifeArcPlan™ system.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:19 – Interest rates as it relates to national debt
5:42 – Is inflation here for a while?
11:28 – What is causing inflation?
13:08 – Will things be resolved in 2023?
16:18 – How much will your money be worth in 10 or 20 years?
19:27 – What actions can you take right now?
24:44 – 3 things to protect yourself
There’s nothing quiet about the impact inflation is having on Americans right now, but inflation has long been considered the silent killer for retirement because of its ability to slowly erode your nest egg over time. If you aren’t properly prepared to offset the year-to-year decrease in purchasing power, it might mean trouble for your retirement down the road.
On this episode, Laura Stover, RFC® and Michael Wallin, CFP® will dive into everything surrounding inflation to help you understand how we’ve gotten to this point, determine whether the worst is behind us, and figure out when we might see things return to normal levels. The Fed believed this inflationary issue would be resolved in the short term, but now there’s worry that this could continue well into 2023 and even 2024.
So what can you do to protect your nest egg and keep from falling behind inflation? We’ll tell you a few actions you can take right now and explain how inflation adjustments are built into the LifeArcPlan™ system.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:19 – Interest rates as it relates to national debt
5:42 – Is inflation here for a while?
11:28 – What is causing inflation?
13:08 – Will things be resolved in 2023?
16:18 – How much will your money be worth in 10 or 20 years?
19:27 – What actions can you take right now?
24:44 – 3 things to protect yourself
Coming off an incredible decade of growth and returns in the stock market, the feeling among investors isn’t nearly as optimistic in 2022. Darlene Tucker, CFP® joins Laura Stover, CFP® on the show today to help us look forward and determine what lies ahead for the market as the economy comes to a halt. While many things feel similar to the lost decade of the 1970s, there are some notable differences like our declining dependence on foreign oil and supply chain issues that might indicate a better outcome.
While we understand the concern right now, it’s important to remember that recession is a normal part of the business cycle. What we want to try and determine is whether this is just a normal pullback or a sign of larger problems? Our economy today shows promise in a few key areas so the hope is that history doesn’t repeat itself.
That’s why this show will focus on helping you determine what your next steps are as an investor. Part of that discussion includes explaining why the traditional 60/40 portfolio might not be the best approach to investing in this current environment. What we know for sure is that each decade will present new challenges for investors and that’s why it’s critical to make sure you’re doing proper planning with a professional.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:29 – Darlene’s thoughts on what she’s expecting over the next decade
5:44 – What kind of data should we pay attention to?
9:07 – Recession is a normal part of the business cycle
12:14 – What can investors do now?
15:40 – Mailbag question about paying off debt with an old 401(k)
23:57 – Every decade provides different challenges for planning
Coming off an incredible decade of growth and returns in the stock market, the feeling among investors isn’t nearly as optimistic in 2022. Darlene Tucker, CFP® joins Laura Stover, CFP® on the show today to help us look forward and determine what lies ahead for the market as the economy comes to a halt. While many things feel similar to the lost decade of the 1970s, there are some notable differences like our declining dependence on foreign oil and supply chain issues that might indicate a better outcome.
While we understand the concern right now, it’s important to remember that recession is a normal part of the business cycle. What we want to try and determine is whether this is just a normal pullback or a sign of larger problems? Our economy today shows promise in a few key areas so the hope is that history doesn’t repeat itself.
That’s why this show will focus on helping you determine what your next steps are as an investor. Part of that discussion includes explaining why the traditional 60/40 portfolio might not be the best approach to investing in this current environment. What we know for sure is that each decade will present new challenges for investors and that’s why it’s critical to make sure you’re doing proper planning with a professional.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:29 – Darlene’s thoughts on what she’s expecting over the next decade
5:44 – What kind of data should we pay attention to?
9:07 – Recession is a normal part of the business cycle
12:14 – What can investors do now?
15:40 – Mailbag question about paying off debt with an old 401(k)
23:57 – Every decade provides different challenges for planning
It’s difficult to feel settled when markets are falling and uncertainty clouds the future, but we know that corrections are a normal and essential part of the cyclical nature of the market. They release pressure on markets when equities rise too fast, but that doesn’t ease our mind when we’re in the midst of the turbulence. What can help, however, is maintaining the right perspective.
Having a comprehensive plan can really paint the bigger picture and help bring the long-term back into focus. The goal isn’t just your investment returns. It’s about reaching the overall goals you’ve set for your future. Today, Laura Stover, RFC® and Michael Wallin, CFP® will tell you what you need to keep in mind to navigate the market volatility so that you’ll avoid trying to time the market and keep from acting emotionally when the large swings occur. Plus, we’ll tell you why times like these can actually become opportunities for investors with the right perspective.
You can also find out more about an upcoming live appearance in Ohio and how to register as well as a webinar that we’ll be rolling out soon for out-of-town listeners.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:01 – Is Google still a solid company?
6:07 – Historical perspective on the S&P 500
8:01 – Focus on goals, not returns
11:48 – What you need to keep in mind
17:06 – What else can you be doing right now?
20:25 – Importance of asset allocation and diversification
It’s difficult to feel settled when markets are falling and uncertainty clouds the future, but we know that corrections are a normal and essential part of the cyclical nature of the market. They release pressure on markets when equities rise too fast, but that doesn’t ease our mind when we’re in the midst of the turbulence. What can help, however, is maintaining the right perspective.
Having a comprehensive plan can really paint the bigger picture and help bring the long-term back into focus. The goal isn’t just your investment returns. It’s about reaching the overall goals you’ve set for your future. Today, Laura Stover, RFC® and Michael Wallin, CFP® will tell you what you need to keep in mind to navigate the market volatility so that you’ll avoid trying to time the market and keep from acting emotionally when the large swings occur. Plus, we’ll tell you why times like these can actually become opportunities for investors with the right perspective.
You can also find out more about an upcoming live appearance in Ohio and how to register as well as a webinar that we’ll be rolling out soon for out-of-town listeners.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:01 – Is Google still a solid company?
6:07 – Historical perspective on the S&P 500
8:01 – Focus on goals, not returns
11:48 – What you need to keep in mind
17:06 – What else can you be doing right now?
20:25 – Importance of asset allocation and diversification
In a year that’s been highlighted by uncertainty and volatility, iBonds have risen in popularity thanks to a guaranteed interest rate that’s been on the rise alongside inflation. Being able to generate a return of over 9% on your cash is pretty appealing, but should iBonds be a part of your portfolio right now?
Laura Stover, RFC® and Michael Wallin, CFP® will break it all down on this episode and help you understand all of the important details about iBonds, which we didn’t hear much about in 2021 because the stock market was in a strong position. We understand that people are searching for safety and guarantees right now, and iBonds hit a lot of those comfort words that clients talk about.
With a minimum investment of $25 and a maximum of $10,000 each year, it’s a tool that all investors can utilize. But should you? We’ll take you through the fine print, help you understand how they’re used, and then take you through the factors we consider when determining where they fit into a client’s financial plan.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:39 – Specifics on buying iBonds and what they provide
7:43 – Where do iBonds fit into a portfolio?
15:11 – What clients are surprised to learn
18:34 – Cashing out the iBonds
21:40 – Interest rate vs income planning
23:52 – Sequence of return risk
In a year that’s been highlighted by uncertainty and volatility, iBonds have risen in popularity thanks to a guaranteed interest rate that’s been on the rise alongside inflation. Being able to generate a return of over 9% on your cash is pretty appealing, but should iBonds be a part of your portfolio right now?
Laura Stover, RFC® and Michael Wallin, CFP® will break it all down on this episode and help you understand all of the important details about iBonds, which we didn’t hear much about in 2021 because the stock market was in a strong position. We understand that people are searching for safety and guarantees right now, and iBonds hit a lot of those comfort words that clients talk about.
With a minimum investment of $25 and a maximum of $10,000 each year, it’s a tool that all investors can utilize. But should you? We’ll take you through the fine print, help you understand how they’re used, and then take you through the factors we consider when determining where they fit into a client’s financial plan.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
5:39 – Specifics on buying iBonds and what they provide
7:43 – Where do iBonds fit into a portfolio?
15:11 – What clients are surprised to learn
18:34 – Cashing out the iBonds
21:40 – Interest rate vs income planning
23:52 – Sequence of return risk
When it comes to the world of investing, critiquing prior financial choices is a very common practice and it leads to us falling into the trap of hindsight bias. Studies have shown that people will go back and change opinions after the fact and then form new ones that more closely match how reality unfolded. It’s how we justify our past decisions and why it can be so difficult for investors to make better decisions moving forward.
So many of the actions we take are based on yesterday’s headlines, and that can be a completely misleading strategy to follow. This is why we have to put the right financial principles and framework in place rather than trying to time the market and chase returns. We know the market goes up, down and sideways, which is why we try to help clients catch their emotions through setting expectations and building a plan. Investors need to know there will be contractions in the market, and we want to make sure they take the steps to protect their portfolio.
Today we’re going to talk about the difference in strategies and actions between successful investors and imperfect ones. We’ll also discuss the process we use to help people build an investment strategy to outpace inflation and avoid these common pitfalls. Remember, the more you accept your investing imperfection, the closer to perfect you’ll be.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
When it comes to the world of investing, critiquing prior financial choices is a very common practice and it leads to us falling into the trap of hindsight bias. Studies have shown that people will go back and change opinions after the fact and then form new ones that more closely match how reality unfolded. It’s how we justify our past decisions and why it can be so difficult for investors to make better decisions moving forward.
So many of the actions we take are based on yesterday’s headlines, and that can be a completely misleading strategy to follow. This is why we have to put the right financial principles and framework in place rather than trying to time the market and chase returns. We know the market goes up, down and sideways, which is why we try to help clients catch their emotions through setting expectations and building a plan. Investors need to know there will be contractions in the market, and we want to make sure they take the steps to protect their portfolio.
Today we’re going to talk about the difference in strategies and actions between successful investors and imperfect ones. We’ll also discuss the process we use to help people build an investment strategy to outpace inflation and avoid these common pitfalls. Remember, the more you accept your investing imperfection, the closer to perfect you’ll be.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Most people enjoy being in control of their life and it’s hard to let go when it comes to money. That’s why it’s not a surprise that the do-it-yourself approach has cropped up everywhere over the past decade, but is DIY investing a successful strategy? We’re going to explore the idea of building your own retirement plan with a special co-host today, Darlene Tucker, CFP®, who is a colleague and a close friend of ours.
We’ve found that the typical DIY investor is a well-educated professional with reasonable means who prefers to build their own portfolios without help. Having information at our fingertips has given people more confidence to manage their own money, but the savings you’ll generate comes at a high cost to your retirement.
An experienced investment manager can help you navigate volatile periods, keep you from acting emotionally, and help you determine proper allocations as life changes, and that value often greatly outweighs the fees you would have saved from doing it yourself. Plus, there’s a lot more that goes into your retirement plan than investing. Join us as we share the observations we’ve seen and point out the mistakes that often occur when you choose the DIY approach to financial planning.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:13 – The typical qualities a DIY investor has
4:27 – The mistake of following the index
8:09 – The appeal of having control
9:12 – When you worry about fees
17:22 – Investing is just one aspect of planning
20:23 – What happens to your spouse when you die?
23:42 – The value an advisor brings
Most people enjoy being in control of their life and it’s hard to let go when it comes to money. That’s why it’s not a surprise that the do-it-yourself approach has cropped up everywhere over the past decade, but is DIY investing a successful strategy? We’re going to explore the idea of building your own retirement plan with a special co-host today, Darlene Tucker, CFP®, who is a colleague and a close friend of ours.
We’ve found that the typical DIY investor is a well-educated professional with reasonable means who prefers to build their own portfolios without help. Having information at our fingertips has given people more confidence to manage their own money, but the savings you’ll generate comes at a high cost to your retirement.
An experienced investment manager can help you navigate volatile periods, keep you from acting emotionally, and help you determine proper allocations as life changes, and that value often greatly outweighs the fees you would have saved from doing it yourself. Plus, there’s a lot more that goes into your retirement plan than investing. Join us as we share the observations we’ve seen and point out the mistakes that often occur when you choose the DIY approach to financial planning.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:13 – The typical qualities a DIY investor has
4:27 – The mistake of following the index
8:09 – The appeal of having control
9:12 – When you worry about fees
17:22 – Investing is just one aspect of planning
20:23 – What happens to your spouse when you die?
23:42 – The value an advisor brings
The common theme in the market this year has been volatility, and that hasn’t slowed down at all throughout the summer. The month of August saw the S&P 500 drop 4.2 percent after four straight days of declines, which was driven by the expectations stemming from the Fed’s plan for tight policy. We learned more about that during Fed Chair Jerome Powell speech at a conference in Jackson Hole where he spoke on monetary policy and price stability.
The question getting now is when will the volatility begin to reduce and what might be coming through the end of the year and into 2023? This episode will examine the criteria that determines this like supply chain problems, supply and demand economics, and tightening disposable income. Plus, Laura and Michael will give their thoughts on what we’ve learned from this recent market movement and whether we’ll ever return to 3% inflation.
And as always, we want to provide ways that our Redefining Wealth® process helps you address these market concerns by mitigating risk and properly positioning you for whatever happens with Fed policies in the future.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:19 – Driving force behind August volatility
4:48 – Will rate hikes continue in 2023?
5:42 – Criteria that will determine when volatility will start reducing
9:35 – What’s around the corner?
11:41 – Will inflation return to 3% again?
14:15 – What have we learned from the downturn?
18:56 – When is the bottom of this market?
21:08 – Mitigating risk
The common theme in the market this year has been volatility, and that hasn’t slowed down at all throughout the summer. The month of August saw the S&P 500 drop 4.2 percent after four straight days of declines, which was driven by the expectations stemming from the Fed’s plan for tight policy. We learned more about that during Fed Chair Jerome Powell speech at a conference in Jackson Hole where he spoke on monetary policy and price stability.
The question getting now is when will the volatility begin to reduce and what might be coming through the end of the year and into 2023? This episode will examine the criteria that determines this like supply chain problems, supply and demand economics, and tightening disposable income. Plus, Laura and Michael will give their thoughts on what we’ve learned from this recent market movement and whether we’ll ever return to 3% inflation.
And as always, we want to provide ways that our Redefining Wealth® process helps you address these market concerns by mitigating risk and properly positioning you for whatever happens with Fed policies in the future.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:19 – Driving force behind August volatility
4:48 – Will rate hikes continue in 2023?
5:42 – Criteria that will determine when volatility will start reducing
9:35 – What’s around the corner?
11:41 – Will inflation return to 3% again?
14:15 – What have we learned from the downturn?
18:56 – When is the bottom of this market?
21:08 – Mitigating risk
Most people don’t understand the connective tissue that exists between government spending and how that impacts us all because it’s our responsibility to pay that money back. David Walker, the seventh Comptroller of the United States, is one of the handful of well-respected experts that are telling us that America is facing large economic problems due to recent fiscal policy and growing national debt.
As Walker points out in his latest book, becoming a global superpower requires a country gaining power in four areas: economic, diplomatic, military, and cultural. That economic strength being the most important because it impacts the ability to influence through diplomacy, build the military, and increases opportunity to make a cultural impact. And that’s where our country is currently wavering.
In order to address the issue of rising debt and inflation, you have to reduce spending or cut some of the entitlements. That likely means higher tax rates – potentially significant – could be on the horizon and you need to be prepared for that risk. Taking a proactive approach to tax planning right now is critical because of that tax rate risk facing you in retirement based on the fiscal trajectory we’re on as a country. So we’ll take you through the steps that retirees need to consider knowing that this could be the next Black Swan event around the corner and discuss how our planning process helps address these major concerns.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:25 – Similarities between Roman Empire and today’s USA
7:09 – Four things to become superpower and how they’re related
12:49 – The media’s impact
16:42 – What’s in the Inflation Reduction Act?
23:36 – What do you need to do?
26:24 – Planning goes well beyond investing
After years and years of saving money, there will come a point where we need to make withdrawals for retirement income and have to begin taking money out of those IRA accounts and those qualified accounts. The question many pre-retirees and retirees have is how do you know how much you can pull out and spend safely?
This is a topic that’s very relevant to anyone approaching retirement, but even if you don’t think you’ll need to take money out of these accounts any time soon, you absolutely should put a plan in place well in advance so that you know you’ll be pulling money out safely and efficiently. This episode will explore what the research tells about withdrawal rates and take you through the different variables we consider when developing our Redefining Wealth® Custom Blueprint Income Plan.
Understanding income and expenses is critical in times of volatility like we’re seeing now, which is why a combination of income planning strategies is essential to long-term success. We want to make sure you have a process and a purpose for your money so one bad quarter doesn’t derail your retirement plan.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
1:27 – Why this topic is so important to retirement
4:25 – What variables should you consider?
10:15 – Logic vs emotion in decision making
14:53 – What research has found about withdrawals
17:58 – Taking a close look at expenses
23:22 – Safe rates of return
We began the discussion on sequence of return risk on our last podcast and we want to continue addressing some key components to this risk. Not understanding how this impacts your portfolio can present a real threat to your retirement.
In this part of our discussion, we’ll explore the four general spending and investing techniques for managing sequence of returns risk that Dr. Wade Pfau talks about. Plus, we’ll run through the Four L’s (longevity, lifestyle, liquidity and liquidity) that impact the retirement planning process and impact risk. This is a vital discussion that you need to have with your financial advisor and it’s part of our Redefining Wealth Process® that protects retirees throughout all of their retirement.
This episode will also feature a bonus conversation on the Inflation Reduction Act of 2022 and a few of the items that aren’t getting enough attention, including the $74 billion stock tax.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:25 – Defining sequence risk
8:57 – Spending conservatively
11:48 – Laddering bonds into your portfolio
13:36 – Reducing volatility when it matters most
17:10 – The Four L’s
21:24 – Funded ratio
25:28 – Present value of assets vs liabilities
26:24 – Bonus discussion: Inflation Reduction Act
Understanding the sequence of return risk in your portfolio is one of the most important things we can learn about while planning for retirement and yet there is not enough conversation out there on this topic. We need to understanding this risk even more now with a disappointing job report and the current market volatility.
So, what is sequence risk then? It’s the risk that comes with the order in which your investment returns occur. In other words, if the market dips early in your retirement, is the longevity of your portfolio still secure? On today’s episode, we’ll discuss this little-known topic and how the Redefining Wealth Process® protects retirees throughout all of their retirement.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
3:58 – What is sequence risk?
6:59 – Comparing Portfolio A and Portfolio B
11:13 – Going from 4% to 2.6% withdrawal
16:12 – Spending habits are changing
19:14 – How is the market adjusting?
23:31 – Preparing properly with your plan
Believe it or not, the Fed was wrong. It turns out the inflation we’ve been experiencing is not transitory. They thought these high prices would stick around for six months or less. However, that’s certainly not the case and consumer sentiment is very low. With this low confidence it’s expected we’ll continue to see market volatility. So, what can investors do now to protect their portfolios?
If you are in retirement or nearing retirement, you need a flexible and predictable framework. With market swings, inflation, and a possible recession threatening your finances you need a plan that will be adaptable to unfavorable situations. The Redefining WealthSM Process® is built in just this way, to protect you from these unsteady times. Join us on today’s episode as we explore investor patience, market recovery, and investing fees, and much more.
Redefining Wealth® Custom Blueprint Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
2:31 – Defining the meaning of transitory
5:42 – How can we protect our portfolio?
10:00 – Trading volatility with erosion of purchase power
15:58 – V-shaped recover and U-shaped recovery
20:33 – Transparency with fees
26:05 – Identify income and prepare for unexpected events
We are continuing our discussion this week on annuities and the value they have with a balanced portfolio. We’ll focus specifically on the differences between annuities and bonds with our special guest host, Joe Casey.
An annuity is a contract with an insurance company that ensures income in the future. It’s simple and can be valuable to the right investor. On the other hand, bonds are a bit more complex and are reactionary to interest rates. Join us today as we break down these differences and consider which investment is best for you.
Redefining Wealth® Custom Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:48 – What is the foundation of annuities?
8:31 – Index crediting
14:41 – Income riders on annuities
19:35 – Assets and income are different
24:09 – Planning for home healthcare
We’ve been discussing the market and the volatility investors have been experiencing all year long. With this bear market many investors are wondering if they should move to cash because it’s safe. But, with 9.1% inflation rate we need to consider how to balance our portfolio. So, what are some alternatives when it comes to building our income plan?
On the other hand, annuities can be a benefit to many investors, when used properly. However, rising interest rates impact this investment tool. On today’s episode, we’ll break down the relationship between annuities, interest rates, and your retirement plan.
Article mentioned in today’s show: https://www.thinkadvisor.com/2022/03/17/10-fast-facts-about-interest-rates-and-annuities/
Redefining Wealth® Custom Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:37 – What is the purpose of an annuity?
11:58 – How are carriers repositioning?
16:36 – Crediting rate distribution
22:30 – How does the yield curve impact interest rates?
28:04 – How does this impact investors?
The S&P just had its worst half since 1970. With these jarring numbers, every investor is wondering if the stock market is ready to recover in the back half of 2022? None of us can know exactly when the market will recover, but there are some signs we can explore that may give us some insight into the rest of the year.
Obviously, the biggest issue our economy is currently facing is inflation. With the highest rate of inflation since 1980, the Federal Reserve is raising interest rates to slow spending. With the looming threat of a recession, pre-retirees and retirees need to understand how this bear market could impact their portfolio and lifestyles. On today’s show, we’ll break down why the market has fallen so dramatically, whether we are in a recession, the ways to manage your portfolio through the Redefining Wealth Process®, and much more.
Article mentioned in today’s show: https://www.fool.com/investing/2022/07/03/down-21-is-the-stock-market-ready-to-recover-in-th/
Redefining Wealth® Custom Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
4:23 – The reasons we are where we are
8:24 – The drastic difference in costs
12:48 – Looking at our national debt
15:56 – Catalysts determining which way the market goes
21:23 – How should you construct your portfolio?
25:48 – Diversification versus asset allocation
Many of us are desperate to get back to normalcy, especially because of what we’ve experienced over the past two years. But the market seems to keep reminding us that everything isn’t exactly normal and unfortunately, we’ve been in correction mode all year long. On today’s episode, we’ll break down a recent article that explores investor misperceptions, behavior biases, and how these factors hurt our portfolios, especially in times like these.
Loss aversion bias probably harms investors the most, losses hurt your plan twice as much as gains help your plan. This can trigger other behavioral biases, such as the reluctance to sell an investment if it’s trading below the original purchase price. Emotional decision making can be one of the most dangerous factors posed against growth in your retirement plan. So, join us today as we explore emotional decision making, selling at a loss, things you need to avoid doing during market corrections, and much more.
The article mentioned in today’s show: https://blairbellecurve.com/get-even-itis/
Redefining Wealth® Custom Income Plan: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
0:13 – Welcome to episode 111!
4:02 – Trading below the original price
7:23 – Don’t get emotionally attached
10:59 - Holding on for the wrong reason
16:35 – The things you shouldn’t be doing
20:53 – Follow the index and buy cheap
24:06 – Timing the market
Do you truly understand the difference between volatility and risk? Modern portfolio theory was trademarked in the 1950s and is often still used today in our industry. This approach is still viable today and highlights understanding portfolio risk and the proper way to measure volatility. Standard deviation is a mathematical formula we use to measure and estimate risk. While it doesn’t address all major risks, it’s an essential part of protecting your portfolio and following the Redefining Wealth® process.
The risk in your portfolio can come from various areas: business, purchasing power, high interest rates, etc. All of these threats are working against your retirement plan and that’s why we use standard deviation. Our goal is to build a portfolio that takes on the least amount of risk possible and still garners high returns. On today’s episode we’ll break down how we measure risk, beta exposure, and much more.
Redefining Wealth® Inflation Guide: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
1:23 – The difference between volatility and risk
4:30 – Why is standard deviation important?
7:23 – What is high beta exposure?
11:59 – Issues with standard deviation
14:30 – Two groups of investors
19:07 - The best definition of volatility and risk
23:02 – Less risk for more return
Now more than ever, people are realizing the importance of a long-term financial plan. Things can threaten your plan seemingly out of nowhere. A year ago, inflation was hardly a topic of concern, but looking at today’s market has a lot of us worried about the future. As a way to combat rising inflation, the Fed is looking to raise interest rates which could impact our portfolios even more. So, how do we protect our wallets and ensure our shock proof our retirement plan?
If you’re getting close to retirement, we want to insulate you from as much risk as possible. You must have a plan, that we stick to and execute. On today’s episode, we’ll breakdown the core pillars of a shock proof retirement plan and how we can invest with a purpose.
Redefining Wealth® Inflation Guide: https://redefiningwealth.info/schedule/
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
1:21 – Inflation isn’t getting any better
5:46 - Having a plan and sticking to it
10:00 – Investing with a purpose
15:21 – Conservative investors
18:04 – Keeping investor emotions in check
20:22 – Making sure we have guaranteed income
26:29 – Planning for an unexpected shock
30:30 – Having a comprehensive plan
With the current volatility trends in the market, many of us are wondering what to expect in the coming months and years. The S&P is down over 20%, inflation is on the rise, and consumers are concerned. The reality is that many investors are facing major losses. Conservative investors are even experiencing volatility in their fixed-income investments. Despite these fears, the economy is doing well and while we don’t know for certain whether a recession will occur, we know we don’t have a market problem. What we’re facing is an investor and inflation problem.
If you’re approaching retirement this can be an alarming time, but implementing a plan to get through this tough spot is very possible through the Redefining Wealth Process. Everything is going to revolve around income, if inflation is limiting your spending power that’s where our focus should be. Avoiding sequence or timing risk is what impacts returns more than the market. Join us today as Laura and Michael break down the current and future trends we expect to see in the market and how it may impact retirees.
Rate, Review and Subscribe to the Podcast:
https://podcasts.apple.com/us/podcast/retirement-talk-podcast-with-laura-stover/id571347188
How to Connect:
redefiningwealth.info
lswealthmanagement.com
Schedule a Review: https://redefiningwealth.info/schedule/
Timestamps (show notes):
1:23 – What are we seeing in the market right now?
5:28 – For those of us approaching retirement
8:23 - Why are we just now feeling the fallout?
11:22 – Would policy changes help the market?
16:23 – Other considerations for bond replacements
22:14 – De-globalization’s impact on the market
26:36 – What are the scenarios that could occur?
31:37 – If you can withstand, you need to re-evaluate
With 2022 starting out with a lot of volatility, a lot of people are rethinking their portfolio approach. Maybe you are ready for a new advisor or perhaps you are reaching out to a professional for the first time. In any case, how do we go about finding unbiased and independent advisors in such a large industry? On today’s episode, we’ll discuss some of the key components a balanced and competent advisor should have.
Retirement planning is about a lot more than investment performance. Through the years we’ve identified 6 key areas of risk when it comes to retirement planning and you need to have an interconnected plan that addresses those risks, as we do through the Redefining Wealth Process℠. It’s important to seek out an advisor that is transparent about the process they follow, their professional designations and responsibilities, and how they are paid. At the end of the day, you’ll want an experienced advisor that cares about you and your financial goals.
Further reading mentioned in today’s show: https://www.thebalance.com/are-independent-financial-advisors-unbiased-2388432
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Timestamps (show notes):
2:48 – Solely focused on investment performance
5:44 – Transparency about how they are paid
11:26 – Questions to ask your new advisor
13:52 – Breaking down the hourly model
18:03 – Why do you need a guide?
20:35 – Top things to look for in a new advisor
One of the most important components of everyone’s retirement plan is their personalized income plan. So, on today’s episode, we are going to break down the advice of two experts in the financial industry: Wade Fouad and Michael Kitces. Determining how to efficiently tap into your lifelong savings is one of the most important life decisions you are going to make. Choosing an income strategy that mirrors your preferences is key to the Redefining Wealth Process℠.
When you enter retirement, you don’t know what the market is going to do. You have to be able to balance safety and returns, structuring your financial plan around reliable income. Having the right balance between the money you need to patrician and the money you’ll rely on for income comes with our Life Art Planning System, which leans heavily on adaptive goal-based planning. Join us today as Laura and Michael discuss the best strategies for drawing income, preparing for the possibility of longevity, and what return you need to have to be successful in retirement.
Receiving a personalized income plan and gain access to the Life Art Planning System: https://redefiningwealth.info/schedule/
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Timestamps (show notes):
0:13 – Breaking down income planning
4:53 – Market returns versus safety
8:11 – Having the right amount of balance
12:18 – The flexibility to respond versus commitment
20:40 – Planning for longevity in retirement
24:57 – What returns do you need to be successful?
While the data shows a healthy economy (job growth, consumer spending, and business investments are all up) the market is still on a downward trajectory. So, what is causing this decline? Is it Russia’s fault, inflation’s fault, the Fed’s fault, or some other factor? On today’s episode we are going to break down why the market is going down and the key indicators you need to keep your eye on to ensure you are on the right financial planning path while following the Redefining Wealth Process℠.
While we hope this is a normal correction, preparing for the possibility of a recession is necessary. The cost of making money is to be able to endure these moments. Limiting drawdowns, preserving your capital, and ensuring the six core pillars of the Redefining Wealth Process℠ are established within your plan will be necessary to withstand current and future market turns. Within the Redefining Wealth Process℠, we unpack these elements with our clients, evaluating and ensuring they are on the right strategic path that protects them and their investments.
If you’d like to read the Financial Advisor Magazine article discussed on this episode, click here.
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Timestamps (show notes):
2:22 – The economy is still doing well
5:00 – What is going on and will it continue?
12:58 - History is a good indicator of what we can expect
17:06 – Are we in a correction or extended bear market?
21:33 – Protecting your capital in the retirement redzone
25:08 – Being able to build expectations through the Redefining Wealth Process℠
Everyone has in their mind the concept of designing an ideal retirement savings portfolio, but should you be blindly following the same methods that people have always used? Large institutions have been telling people for decades to pump money into their tax-deferred retirement accounts, keep cash in the bank, and get your mortgage paid off. But will these status quo methods help you achieve the financial security you dream about?
The Redefining Wealth Process℠ is all about taking a comprehensive approach to building your portfolio through an income blueprint. Laura and Michael will dispel many of the common planning strategies that are always promoted and break down the process we use to identify the proper financial framework through out proprietary Redefining Wealth Process℠.
The status quo will have you believe there’s nothing more to learn and tries to convince you that trusting others is you best path to success. But just because you haven’t heard of an investment, or a product, doesn’t mean you should close your mind to it. You also need to incorporate a process.
There are ways to design an ideal portfolio to include certain features you desire while maintaining the balance you need. The biggest challenge is remaining open-minded and consider the fact that there might be a better way.
Join us for episode 104 of the Retirement Talk Podcast as we help you understand how to create the ideal retirement savings through our Redefining Wealth Process℠.
If you’d like to read the Kiplinger article discussed on this episode, click here.
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Timestamps (show notes):
1:12 – Background on the article
1:58 – What is the perfect investment?
3:30 – Ways to design an ideal portfolio
5:15 – Story about a recent meeting
8:29 – Examples of mistakes
10:50 – Accumulation tools
14:33 – Relying heavily on tax-deferred contributions
17:40 – Storing too much money in the banks
21:55 – Pay off the mortgage or not?
24:13 – Understanding your investment vehicles
We spend so many years of our lives working to save and accumulate assets to create financial independence for ourselves, but most people don't realize you must plan on how you will spend during retirement. Transitioning from accumulation to the preservation and distribution phase can be a challenge. Do you have the ability to shift your financial mindset from saving to that of income? Having a custom income plan is critical to long-term success and sustainability throughout retirement.
To better understand the key risks, listen as Laura and Michael breakdown the elements necessary for a strong income plan. Why it is essential to have a purpose with knowing your retirement number and not just randomly taking income.
Join us for episode 103 of the Retirement Talk Podcast as we make sure your income plan is constructed to face these retirement risks head on.
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Timestamps (show notes):
1:20 – Background on our topic
3:21 – How the 4% rule started
4:43 – Results of a MetLife study
8:10 – Sequence of distribution
14:11 – Longevity risk
18:14 – Allocations
25:05 – Formulating a process to cover the key risks
28:48 – Our process for determining percentage to withdraw
31:15 – How much are you communicating with advisor?
32:28 – Security concerns
With rising inflation and now an inverted yield curve, are we headed towards a recession? The interest rate paid on our short-term debt has exceeded the interest paid on our long-term debt of the same quality. So, what does this mean for investors? On today’s episode we’ll unpack the inverted yield curve, the concerns investors should be aware of, what to anticipate for the remainder of the year, and the strategies you can implement to protect your plan now and in the future. This inverted yield curve and a contraction in the market could indicate a coming recession, but this is not absolute. We are in a unique situation as we usually don’t see rising interest rates and a contraction in the market at the same time. Typically, when markets contract on the equity side we can find safety in bonds but with rising interest rates that might not be the case this time. However, it’s always important to keep your perspective in check and prevent yourself from making quick, emotional reactions to the market.
The best move to make right now may to be make no move at all. We want to take a long-term view when it comes to our plan. Don’t let news cycles scare you into making poor decisions. If a recession does happen it doesn’t ensure the U.S. stock market will underperform but it’s still important to be prepared. With this volatility, it’s essential to have a balanced portfolio that outpaces inflation while simultaneously withstanding market turns.
Review the article mentioned in today’s show >>
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Prices have been steadily climbing for some time now. What is driving this unprecedented increase in inflation and how can you insulate your financial future from these black swan events? Many retirees are aware of risk and volatility within the market, but inflation itself can be a silent killer that lowers your future buying power when it comes to things like gas, groceries, and health care costs.
We have recently hit a 40-year high with inflation at 8.5%. Most experts still expect us to be facing high inflation rates a year from now, some are even predicting the possibility of a recession. Unpacking inflation and how it can impact your investments and retirement future is essential. If you aren’t incorporating this into your future income plan you may find yourself taking too much risk on in the future to make up for those losses. Bonds and fixed income are also subject to the risk of inflation as they are inversely related to interest rates and an increase in rates can result in a drop. So, how do we make sure our portfolio has the right amount of balance?
We recommend really analyzing your budget and understanding what you are getting for your dollar. This allows you to move into a diversified investment strategy that can garner you a return that will make your budget work during an inflationary period. If you are invested in bonds, think about asking your advisor about the various tools you can use to protect your plan. Find the best rotation of investment tools fit for you. On today’s episode, we’ll break down inflation, its impact on your money, and how you can protect yourself now and in the future.
More Reading on Today’s Topic >>
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Could Joe Biden’s new tax proposal impact you and your retirement plan? On today’s episode, we’re breaking down Joe Biden’s proposal of a 20% billionaire tax, the looming financial crisis, and what you can do to protect yourself and your future against rising taxes. The billionaire tax proposal is expected to reduce the deficit over the next decade. However, this is coming after a $3.9 trillion dollar spending bill, meaning the proposed reduction from the billionaire tax would only be a tiny percentage.
Deficit spending continues to rise but capitalism proves to be the best way to move forward and pay off our national debt. While this proposal is called the “billionaire tax” it would impact anyone with more than 100 million directly. They will pay a minimum of 20% each year on their capital gains. Yet, it’s quite possible average Americans could also feel these effects when it comes to their assets on a granule level.
Along with rising interest rates this proposal could be alarming for many reasons. Your asset value is probably growing, meaning you’ll likely be subject to paying more taxes. Gains in the stock market have provided for countless retirees, improving their quality of life and protecting longevity in their plans. This proposal could incentivize these investors and threatened many Americans' retirement plans. Therefore, we need to insulate ourselves regardless of what the government does moving forward. Join us today as we discuss these issues and the solutions that can mitigate these possible impacts on your financial future.
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Anywhere from 50% to 60% of Americans don’t have a will. Does this surprise you? However, more and more people are becoming more aware of the 6th pillar of the Redefining Wealth Process, estate planning. On today’s episode, we are continuing our conversation on estate planning and why it’s so important for you and your family. We will explore the key documents you need to consider when building out your estate plan and the types of trusts that may be applicable to your situation.
Your Power of Attorney is really the starting point for a sound estate plan. This document is essential for everyone, whether you have a trust or will. You’ll need a Power of Attorney for both your finances and healthcare. You need someone that can step in if incapacitation has occurred. Even with legal documents, sometimes custodians request an order from probate or their own documents. If you’re doing estate planning yourself rather than with a financial professional and attorney, these are the nuances you’ll probably be missing.
State laws seem to change rapidly, so you must review your estate plan on an annual basis. Courts can challenge and scrutinize these documents if they aren’t up to date. Furthermore, giving an agent broad legal authority over principles of property with very little detail instructions may lead to an abuse of power. The Power of Attorney is used for specific circumstances, but is of great value in conjunction with a revocable living trust which can protect you, your family, and your property against these dangers. Join us as we further discuss the documents, trusts, and, professionals you need to be working with to stay protected and safe, financially and beyond.
Further reading mentioned in today’s show >>
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https://redefiningwealth.info/98-the-importance-of-an-estate-plan-part-2/
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No matter your age, having an estate plan is something we all need to think about. On today’s episode, we’ll explore the importance of having an estate plan and some things you may not be considering when it comes to that plan.
Over the past few years, we’ve certainly seen that things can change quickly. Keeping our essential documents updated is more important than ever. A will is a legal document that spells out your wishes when it comes to the care of your children or the distribution of your assets. While many people establish one when their children are born, most of us forget to update it later on in life.
Estate planning isn’t just about your assets, living documents impact you if you become ill as well. It can be costly, time-consuming, and stressful for your loved ones if these documents are not in place. It’s not all about you, don’t leave a mess for your loved ones! Join us today as we explore the importance of an updated will, the difference between a will and a trust, some of the estate planning assumptions you should avoid making.
Further reading mentioned in today’s show >>
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If you’re trying to build wealth, sharp market downturns can be your biggest enemy. But these downturns are not uncommon and we want you to be prepared to overcome these market dips. On today’s episode, esteemed money manager, Jay Pestrichelli joins us to discuss buy and hedge retirement planning. He’s the author of Buy and Hedge as well as the owner and co-founder of ZEGA Financial.
Over the long term the market usually performs well, yet with all the volatility we’ve seen throughout the start of 2022 many of us are getting nervous. Even before this year, Jay notes the S&P has had violent volatility that has evolved over several years. Looking at these turns in the market it really comes in 3-to-5-year waves. The most current starting in February of 2020. What does this mean for investors? It means that volatility comes in cycles and is something that we need to prepare for.
ZEGA and the Redefining Wealth process utilize hedging in a lot of portfolios that can bring nice returns as opposed to a traditional 60-40 broad asset allocation. Hedging is managing stock market risk. It's a long-term investment strategy that is very useful for people approaching and in retirement, people that don’t have the time to withstand this type of market volatility. Join us today as we explore the importance of hedging, developing a plan, and more with Jay Pestrichelli.
Receive Your Complementary Copy of Buy and Hedge by walking through the Redefining Wealth Process: https://redefiningwealth.info/schedule/
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We discuss many different money management tools on our show but having a defined process is perhaps the most important thing investors need to consider when constructing their plan. Having a process allows you and your assets to perform at peak capacity. Customized to each individual a process should cover your income needs, investments, tax planning, estate planning, and liquidity. While many of us may be tempted to chase the market, we want to ensure we have a consistent rate of return, especially as we inch closer to retirement. Your plan needs to cover both inflationary and non-inflationary expenses when constructing a cash flow analysis. Once you know how much cash you need in retirement you can position your assets to achieve those goals.
A financial framework like the one we follow in the Redefining Wealth Process is a financial baseline that gives many clients the confidence they need in both the accumulation and decumulation phase of financial planning. On today's episode, we'll explore the importance of developing a customized process in your financial plan and how it will help you achieve a stable retirement future.
Check out Episode 92 mentioned in today’s show: https://redefiningwealth.info/92-volatility-the-retirement-killer/
Get a free copy of our “How to Survive a Bear Market Guide”: info@lswealthmanagement.com
Strategy consultation and analysis: https://redefiningwealth.info/schedule/
Show notes:
https://redefiningwealth.info/96-the-financial-planning-process/
‘Heads I win, tails you lose.’ In this uncertain time, investors are facing a lot of volatility. We often discuss using tactical management and algorithms to prevent losses but what other tools are available? How can we win when the market goes up and when the market goes down? We can always be certain the market will do one of three things: go up, go down, or go sideways. So we have to prepare and properly protect ourselves for all three outcomes. On today's episode, we'll discuss the value of a tail hedge, managing tail risk, using a tail hedge versus an algorithm, and how this insurance tool fits into your overall portfolio construction.
Facing a black swan event and managing loss becomes much more significant as you reach retirement. In the same way, we protect our home, our car, and our health with insurance we should also be protecting our portfolio. By managing your tail risk, you are able to utilize insurance within your portfolio. This allows you to stay competitive when the market goes up and you will continue to make gains when the market inevitably goes down or sideways.
With a tail hedge, if you experience a 20% loss, your returns are made while the market is going down rather than when it is coming back up. A tail hedge can allow for a 75 to 25 allocation that outperforms the cost of the insurance, mathematically it's a sound decision to implement within your investment strategy. Putting together a diversified and properly allocated plan with budgeting, cash flow, inflation, and protection all taken into account is more essential than ever.
Get a free copy of our “How to Survive a Bear Market Guide”: info@lswealthmanagement.com
Strategy consultation: https://redefiningwealth.info/schedule/
Review the article mentioned in today’s show >>
Today’s episode and show notes can also be accessed by visiting:
https://redefiningwealth.info/95-how-does-a-tail-hedge-protect-you-during-an-uncertain-market/
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Special Guest, CFA, Portfolio Manager David Wagner of Aptus Advisors, joins us on today’s episode to discuss the various factors contributing to market volatility in 2022. As a portfolio manager David is constantly studying the market, understanding the impact it has on investors. Should we expect a recession? What will bring down inflation? David will share his expertise on these topics and more during our show. The market has been in a tailspin and a lot of factors are playing into this. From a geopolitical standpoint, there’s a lot of uncertainty so we are seeing some bearish trajectories. But this may be a buying opportunity according to David.
The Russian invasion of Ukraine could really impact Americans’ wallets when it comes to energy and consumer spending, but only time will tell. We are still expecting rate hikes despite this conflict and David assumes this won’t change. The Fed tends to avoid uncertainty when possible. On the other hand, David sees inflation as mostly a supply problem and something that can be addressed. In the short term, if we see some supply chain relief, we could see prices come down. In the long term, productivity will drive inflation down.
David doesn’t think investors should be worried about a recession in the near future. The economy, which is the basis of the market, is doing very well. If you are getting closer to retirement these events may seem daunting, but having a strong and diversified plan can protect your future.
Get your free copy of “How to Survive a Bear Market Guide” by emailing info@lswealthmanagement.com or https://redefiningwealth.info/
Today’s episode and show notes can also be accessed by visiting:
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Are you dreading this upcoming income tax season? It may be time to switch from tax preparation to tax planning. Strategic planning can reduce your overall tax burden, making this time of the year a lot less stressful. You should be working with a tax professional that is a part of your overall financial planning team.
One of the first steps in tax planning is projecting your future income. This means looking at your accounts, tax brackets, and your projected taxes with an as-is scenario. If you are in your earning years you have to understand the impact of earning even on more dollar and what that does to your overall tax plan. In contrast, a lot of retirees are leaving money on the table. Strategic tax planning can save you stress, time, and money.
We also want to be able to make knowledgeable decisions about our future income, predicting where taxes are going to go and how far. Unfortunately, we can’t predict the future, but there are strategies to proactively pay taxes now instead of waiting for higher taxes in the future. On today’s episode, we’ll discuss these planning steps and a variety of planning strategies that can reduce your overall tax burden.
For a copy of our 2022 tax guide please email: info@lswealthmanagement.com or go to https://redefiningwealth.info/schedule/
Review the article mentioned in today’s show >>
Today’s episode and show notes can also be accessed by visiting:
https://redefiningwealth.info/93-income-tax-season-try-income-tax-planning-instead/
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January ended up being a pretty volatile month in the market. With inflation, geopolitical tension, and rising interest rates we may see more volatility in the near future. What is the danger this poses to our retirement? A fear of outliving your money coupled with recency bias can lead to an unbalanced portfolio. Portfolio failure, running out of money in retirement, is directly related to volatility. However, there are tools and strategies to navigate a choppy market.
Think of standard deviation as a relative risk rating. Lower standard deviation means lower risk or volatility. Using a Monte Carlo simulation spreadsheet, we can forecast the probability of potential failure rates. We have to examine how much risk you are taking in relation to the return you need for a successful retirement. You want to build a plan with the highest probability of success.
How could you still go broke in your portfolio with a 20% return?
If we have two portfolios and put a million in each:
Say Portfolio A made 60% the first year or $1.6 million. In year 2 we lost 40% and our previous $1.6 million is now a net of $960,000.
Portfolio B made 30% in the first year or $1.3 million. In year 2 if we lose 10% our $1.3 million now has is a net of $1,170,000.
Dividing both of these portfolios over 2 years, both portfolios average a 10% return but Portfolio B has more money in it with a gross increase of $210,000. This shows, you could have two portfolios with the same return, but the lower volatility portfolio could mean the difference between success and failure in retirement. Join us as we evaluate standard deviation, the traditional 60/40 portfolio, the benefits of lower volatility portfolios, and more on today’s show.
Email info@lswealthmanagement.com for your guide and report on defending yourself against a bear market.
Complementary portfolio stress test: https://redefiningwealth.info/schedule/
Review the article mentioned in today’s show >>
Today’s episode and show notes can also be accessed by visiting:
https://redefiningwealth.info/92-volatility-the-retirement-killer/
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As we’ve seen in the past month, volatility is back in the market. Why are we seeing this volatility and what can we do to protect our retirement plan? We’ve seen some robust gains in the past few years, but that might soon be changing. With changes from the Fed, interest rate hikes, and geopolitical tension the market is likely to see more ups and downs.
In most cases, people aren’t great at making decisions under pressure, especially when it’s an emotional choice dealing with their own finances. This is the advantage of working with an advisor. You are working with someone that understands volatility and they can keep you level-headed when the market starts to turn. On today’s episode, we’ll explore ways you can protect yourself against a bear market through diversification, risk management, and more.
Review the article mentioned in today’s show >>
Today’s episode and show notes can also be accessed by visiting: https://redefiningwealth.info/91-how-to-defend-against-a-bear-market/
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Timestamps (show notes):
1:57 - What’s causing market volatility?
14:36 – Avoid emotional decision making
18:26 – What does it mean to diversify?
23:47 – Don’t get stuck on a loss
28:25 – Manage your risk and plan for opportunity
32:47 – Have an adaptive retirement plan
For many of us a 401(k) is our primary saving tool for retirement. So, why is the 401(k) now being considered a disaster? Most people don’t have a lot of background in investing when they start saving, defaulting instead to the guidance of their employers. Originally developed to be a bonus in accordance with a pension, the 401(k) was not designed to be a stand-alone account to depend one’s retirement on. However, that's where many people's financial plans stand today.
Consequently, 401(k) plans were never analyzed as a replacement retirement vehicle, therefore, no one scrutinized the long-term practicality of using a 401(k) in this way. As we’ve seen more and more companies step away from pensions, we’ve also seen more investment in this type of account. For big companies and wall street the 401(k) was a big win, for the average American people, not so much. It’s been a poor substitute for a pension plan. On today’s episode, we’ll explore the history of the 401(k) and whether it can be considered a disastrous retirement vehicle.
The book mentioned in today’s show >>
Wealth Unbroken
Today’s episode and show notes can also be accessed by visiting:
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There is no perfect portfolio that will fit everyone’s needs. Instead, we must ask ourselves what the perfect portfolio looks like for our individual lives. The market is a risky endeavor, so you really need to understand how much volatility you are comfortable with and how much is necessary to support the longevity of your retirement. Not everyone will look at risk in the same way. You'll need to think about the entire framework of your plan, updating it when necessary. In order to start building the perfect portfolio, experts suggest focusing on your principles, process, and path.
Do you need professional assistance to help with your plan? This will depend on what they bring to the table, professionals can certainly help prevent blind spots in your plan. Can you pinpoint your comfort zone when it comes to financial gains and losses? Doing so can certainly be difficult if you are used to making emotional decisions. On today’s episode, we’ll explore 7 principles that are necessary to consider when building your perfect portfolio.
Review the article mentioned in today’s show >>
Today’s episode and show notes can also be accessed by visiting:
https://redefiningwealth.info/89-the-7-principles-of-a-perfect-portfolio/
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Everyone has worries in life, especially when it comes to money. Does money have the power to change your life? It certainly can take care of our basic necessities. However, worrying too much can lead to questionable decision-making and unhealthy levels of stress. An obsession with your bank account may be a sign of deeper anxieties that money can’t solve. If you feel this way you are not alone, especially in today’s world.
People may react to returns in their portfolio by taking on more risk. But is this wise? It really depends on where you are in your retirement planning journey. Perhaps you had a bad experience in the market and now you are a conservative investor. Do you really know how much risk you are taking on though? We want to avoid making those emotional decisions when we can, that’s why having a financial advisor is so important. On today’s episode, join us as we discuss the correlation between money, happiness, and our financial future.
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As we are settling into the new year, a lot of economic movement is already happening. The markets are off to a rocky start. We were probably a little spoiled in 2021, especially with the S&P ending the year a little over 28%. Now we are going through an adjustment period. So, what can investors expect in 2022? As a result of supply chain shortages and subsequent inflation, we'll probably be seeing higher interest rates.
Inflation is going to get worse before it gets better. Furthermore, COVID could still play a big impact on investments in the new year. We just don't know what the future holds. Managing volatility will be crucial to your long-term retirement success. On today’s episode, we’ll take a deep dive into the investment outlook for 2022 and what you can do to keep your retirement plan on track.
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Opinions can be pretty split when it comes to annuities. Some people love them and some people see them in a less favorable light. Especially with the onset of the pandemic, we’ve seen a lot of people with insecurities about their retirement. Having too much faith in one product or one type of investment can be dangerous. We want to help you put perspective on this vehicle and investment tool.
There’s a place for everything when investing, but balance is important. Annuities can be used to meet specific needs. However, we need to look at it from an honest point of view. For example, they don’t always keep up well with the pace of inflation. On today’s episode, we will discuss fixed index annuities, their features, and what role they can play in your retirement plan
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Inflation is a dubious topic and a lot of people are searching for answers when it comes to inflation increases in 2021. For many years inflation in the U.S. was so low many people didn’t care about it, but everyone seems to be talking about rising prices this year. So, what’s causing this historic rise?
Coming out of the pandemic, we were simply not ready to see the amount of demand we saw from consumers. Coupled with a new governmental administration, we’ve seen a dramatic delay in our supply chain. These issues along with a variety of other factors: labor costs, asset bubbles, etc. created a perfect storm in 2021 for inflation to rise. On today’s episode, we’ll discuss the cause of inflation, who’s to blame, and how we can protect our financial future against inflation.
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With the "Build Back Better" bill working its way through the Senate, we thought now would be a good time to discuss estate planning and the powerful Irrevocable Life Insurance Trust (ILIT) tool. Originally created when exemption levels were much less than they are today, the ILIT was designed to provide individuals the ability to pass on life insurance through a trust. It is irrevocable so you want to work with a qualified team when setting one up! On today's show, we'll discuss the benefits of an ILIT, some rules to follow for efficiency, and more.
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TIMESTAMPS (SHOW NOTES)
1:36 – Will “Build Back Better” possibly impact estate planning?
3:48 – Why was the ILIT tool created?
5:27 – You can’t serve as trustee of the trust
6:38 – What can go wrong when assigning a trustee?
8:25 – Rules for efficient ILIT use
12:27 – Who is an ideal candidate?
15:23 – Potential complications during the three-year rule
19:30 – How would you dissolve an ILIT?
When you are looking to work with an advisor, what should you pay attention to? Maybe your advisor was referred to you by a friend or family member. Perhaps you began meeting with them when you were in the accumulation phase of your life and now you are in retirement and facing decumulation. Ask yourself what phase of life you are in and if your advisor is still matching your portfolio needs. On today's episode, we'll be discussing what you need to consider before hiring a retirement financial advisor.
The types of planning strategies an advisor implements for young workers is going to look a lot different than it does for those entering the retirement red zone. Furthermore, you want to have a clear understanding of the advisory fees you are paying and what kind of value you are attaining from them. An advisor should know your risks and how those risks align with the income plan you are building for retirement. You don‘t want to work with someone that is only concerned with moving money, but someone that is creating a plan that will match your long term expenses.
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With the recent dip in the market around the holidays, we’re seeing a lot of conversations around the potential changes over the next ten years that lead to the idea of an upcoming rough year for investors.
In this episode, we’re debunking some of the ideas that the 2022 market will be bad for investors based on historical data. Listen in as we discuss a few important details you need to know about your taxes, your investments, and potential changes coming in the next few years.
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redefiningwealth.info/82
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Have you looked into the odds of success with your financial plan? In this episode, we’re exploring the Monte Carlo Success Thresholds, highlighting adjustments in tolerance for spending volatility, and sharing three questions you should be asking yourself as you think through every situation in your retirement planning.
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If you’re planning out the details of your income and life in retirement, you should also consider what your plan looks like for long-term care in retirement. In this episode, we’re discussing the impact that inflation has had on the costs of long-term care, how you should be protecting your assets, and five ways to cover the costs of long-term care in retirement.
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While these unprecedented times have caused inflation, you may also be worried about your investments or potential investments. As we look through historical data, there isn’t a clear sign that inflation will impact your investments.
In today’s episode, we discuss the current state of inflation in the US, the causes of inflation, and the importance of a written plan. Listen in as we highlight some important historical data to clear up any thoughts you may have had about investing, even with a high inflation rate.
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Hyperinflation has had a catastrophic impact on the economy in the past, but now Twitter CEO Jack Dorsey has issued a warning that it will impact the US soon enough. In today’s episode, we’re discussing this recent tweet from the CEO, highlighting what causes hyperinflation, and sharing how pre-retirees and retirees would need to plan for it. Review the article mentioned in today’s show >> Today's episode and show notes can also be accessed by visiting:
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In 2022, we’ll see a major cost-of-living adjustment (COLA) benefit increase for retirees, along with a social security tax increase for high-earning workers. These increased numbers are the biggest we’ve seen in decades. In this episode, we’re discussing the numbers associated with these changes, how it impacts your retirement earnings, and when it goes into effect! Review the article mentioned in today’s show >>
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redefiningwealth.info/77
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Are you familiar with the five year rules for Roth IRAs? It’s important that you understand these somewhat confusing rules whether you’re opening a Roth IRA now, considering converting your traditional IRAs, or you’re inheriting them.
In today’s episode, we explain how these five year rules work, what you need to do for planning, and what your options are for avoiding penalties.
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Do you have questions about taxes and retirement? For many pre-retirees, there are so many unknowns. In today’s episode, we’re exploring 12 common questions that retirees and pre-retirees often get wrong about taxes and retirement.
Listen in as we highlight these twelve questions, share the correct answers, and even reference a few options for different deductions and tax brackets. If you’re ready to get real answers and understand what to expect from taxes in retirement, this episode is for you!
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When planning for your retirement and the strategies you’ll use to plan for it, many firms will have investors complete risk tolerance questionnaires. While these work to get a base-line understanding of where you are, they are an outdated approach for planning.
In this episode, we’re discussing what these questionnaires ask, why they’re outdated, and the three L’s that Dr. Wade Pfau believes you should be concerned about when planning for retirement.
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We talk often about developing a plan for your retirement income and the strategies that go along with it. Have you considered how you’ll manage your the cost of health insurance? In today’s episode, we’re discussing three strategies that early retirees can minimize their health insurance costs.
Listen in as we cover a few investment opportunities, the impacts of certain federal acts, and understanding how to plan for your health insurance cost.
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redefiningwealth.info/73
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Did you know that when social security was introduced in 1935, it was never meant to be used as a primary source of income? Realistically you should consider it supplemental income to be applied to your overall retirement plan.
In today’s episode, we’re discussing a few key details in the 2021 Social Security Report, the impacts the pandemic has had on Social Security, and understanding taxation on your retirement income (including your social security benefits).
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What if we were to ask you what your investing nightmare would be? Do you know? And what have you done to ensure you’re not risking that potential nightmare?
In this episode, we’re discussing potential investing nightmares, the impacts of the market on many investing strategies, and how you can perform a SWOT analysis to make sure you’re not setting yourself up for that nightmare. Listen in as we review the importance of a defined investment process and why we’ve created a proprietary process at LS Wealth Management.
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When considering all of your options for investing in retirement, you’ll likely have to consider what type of tax diversification you want to explore. A big debate comes into play when you’re looking at the benefits of a Traditional IRA vs. Roth IRA.
In this episode, we’re discussing the limits of tax diversification options with investing in Traditional IRAs and Roth IRAs for your retirement. Additionally, we’ll be highlighting a common misconception with Roth IRA Conversions, how they work, and when you should utilize them.
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redefiningwealth.info/70
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Are you planning for the proposed capital gains tax changes that are potentially coming in 2022? These tax changes may not take effect until next year, but they will be retroactive and could impact your current holdings.
In this episode, we’re exploring the proposed tax plan and changes under the Biden administration, who it affects, and how to know if you need to be planning for it.
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redefiningwealth.info/69
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You have a variety of opportunities to consider when planning for retirement. What if someone were to ask you to pick between guaranteed income or annuities? Which would you choose?
In a psychological study conducted by Morning Star, surveyors asked participants a series of questions to understand the impact that psychology and perception has on their financial decision making.
In this episode, our hosts are breaking down the results of this study, along with the different types of annuities you should be aware of when investing in your retirement. Listen in as they share the risks associated with the different types of annuities and bonds, along with why a written income plan is so important.
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We’re told that as long as we’re saving for retirement and making investments, we’ll be set—but that may not be the case. There are a few mistakes you could be making with your financial plan, and not even realizing you’ve made the mistakes.
In today’s episode, our hosts are sharing three retirement mistakes that you may be making right now. Listen in as they discuss an article from Kiplinger highlighting the mistakes you need to avoid.
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As we continue the conversation from last week’s episode, pulling important takeaways from David McKnight’s book, Tax-Free Income for Life, Laura, Michael, and JAG, discuss how the three buckets of tax can impact your investments and retirement. In this episode, they’re also sharing valuable advice by answering a listener’s question about how their investments and legacy are impacted by The Secure Act and Pro-rata Rule.
Listen in as they discuss taxable, tax-deferred, and tax-free investments, along with how important it is to be strategic in your planning for retirement.
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Most experts predict a dramatic rise in tax rates within the next ten years, which has a direct impact on those heading into retirement. Despite your efforts to save, you’rere likely to outlive your money or watch it be taxed into oblivion.
What can you do when traditional retirement distribution strategies won't provide sufficient income in the face of higher taxes? In this episode, we’re discussing some important takeaways throughout David McKight’s book, Tax-Free Income for Life. Listen in as we explain some important details of our nations debt, potential tax plans to reduce debt, and the importance of income in retirement!
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Are you aware of the risk that comes with your retirement investments? If so, have you considered reframing the way you think about risk tolerance?
In this episode, Laura discusses Kitces article on risk tolerance in Think Advisor and why it’s important to understand the benefits of the risks you’re taking. Listen in as she highlights the difference between risk tolerance and risk capacity, along with highlighting the 5 essential pillars in the Redefining Wealth Process for planning for retirement.
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In 2021, we’ve been presented with a unique opportunity to maximize Qualified Charitable Distribution tax benefits! Due to the CARES Act and the COVID Related Tax Relief Act of 2020, this is your last chance to make unlimited contributions from your IRA to charity! In this episode, Laura discusses how this contribution works and what you need to know in order to take advantage of this opportunity.
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While we don’t focus a lot of our time or conversations on decumulation, it’s definitely a topic we need to discuss. Decumulation in retirement is the approach you take to spend down or withdraw from your savings.
In this episode, we’re discussing why it’s important to have a written income plan for decumulation, a few misconceptions you may have about decumulation, and some interesting findings about investors by a new study from PIMCO!
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We’re all familiar with IRA’s, but have you read any recent news about Peter Thiel accumulating $5 billion in a tax-free Roth IRA? Sounds unrealistic, right? But it’s true.
In today’s episode, Laura shares exactly how this happened, what this means for pre-retirees contributing to Roth IRAs, plus she’s sharing a simple “backdoor” strategy for unlimited contributions to your Roth IRA.
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As you’re investing your money and planning for your future, you should be quantifying the risk-return tradeoffs of investing. In this episode, Laura and her co-hosts are sharing about risk vs. return, understanding asset allocation, risk profile, and more when it comes to investing! Listen in as they highlight what the tools and trust you need to discuss with your advisor.
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While you may be familiar with the impacts of inflation on your finances, you may not realize how the history of inflation can impact your investment patterns.
In this episode, we’re discussing the history of inflation over the last 70+ years. Additionally, we’re sharing a few things to consider in how to approach your investments both today and in the future with inflation in mind.
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With over $123 trillion in national debt, it’s important that American’s understand how this impacts both their lives and their taxes. After a global pandemic added nearly $10 trillion to our national debt, the taxation plan to get out of debt is even more aggressive than in years past.
In this episode, Laura and Michael share their thoughts on America’s national debt, the terminology you need to know, and why taxes are important in repaying this national debt.
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Last Week’s Episode: redefiningwealth.info/57
We’re always being asked about what investment class we’d encourage in today’s climate—even more specifically, about gold, silver, or bitcoin. For today’s episode, we brought in Nathan Akers, an expert from National Gold Consultants, to discuss the value and investing patterns of each!
Listen in as we talk through the history of currency, how the feds are monitoring inflation, and thoughts on these three investment opportunities! We’re sharing why they’re all unique, the patterns of value over time, and how you should shift your perspective when investing in each currency.
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If you take a look at history and the trends that led to the Great Depression in 1929, you may see a few similarities to what we’ve experienced in the last few years. This would lead one to believe that there may be another Great Depression on the horizon.
Brian Beaulieu, the CEO and chief economist at ITR Economics, is know for the accuracy of his economic predictions over the years. With an accuracy rate of 95%, one wouldn’t ignore what he has to say. In today’s episode, we’re diving into his thoughts on another Great Depression by 2030 and sharing how you can prepare financially now, whether it happens or not.
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Show Notes
Who is Brian Beaulieu? (1:51)
About the Great Depression in 1929 (3:03)
Trade Imbalance (5:02)
The Accuracy of Brian Beaulieu’s Predictions (6:37)
Traits of a Great Depression (11:56)
Economic History of the United States (13:34)
Winners & Losers in the Great Depression (14:12)
The Impact of a Great Depression on Generation Y (18:55)
Depression Action Plan (25:17)
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Prosperity: The Age of Prosperity in Decline by Brian Beaulieu
You spend nearly your whole life planning and saving for retirement—are your efforts setting you up to avoid paying taxes on your life’s savings?
In this episode, we discuss Ed Slott’s new book, The New Retirement Savings Time Bomb, and share a few things you need to know about The 2019 Secure Act and how it impacts not only your assets in retirement, but your beneficiaries as well!
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Show Notes
Intro (:00 – :38)
The New Retirement Savings Time Bomb by Ed Slott
The Secure Act (4:44)
The Impact on Non-Spousal Beneficiaries with Roths (8:16)
New Planning Alternatives (8:58)
Working with a Tax Coach (10:52)
Why IRAs May Be Moving to the Trash Heap for Estate Planning (17:41)
Building a Cash Value Tax-Free (18:58)
Impact on Estate Inheritance for Farmers (19:07)
Life Insurance is a Cornerstone (20:21)
Trust Work - (23:01)
Self Cancellation Installment Note - SCIN (23:18)
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The New Retirement Savings Time Bomb by Ed Slott
Over the last few years, Congress has introduced new legislation that impacts your retirement and how you should be planning for it. In 2019, the Secure Act was passed, but Congress is at it again and has recently drafted the Secure Act 2.0.
In today’s episode, we’re discussing the impacts that the Secure Act 2.0 may have on your retirement planning and what to look out for if it’s passed.
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Show Notes
Intro (:00 – :38)
About the Secure Act 2.0 (1:18)
History of the Secure Act (5:32)
Four Key Ways the Secure Act 2.0 Will Impact Retirement Planning (12:40)
- Raising the catch-up contribution limits (13:27)
- Require 401k and 403B and Simple Plans to Automatically Enroll Participants Upon Becoming Eligible (17:06)
- Increase the Required Minimum Distribution Age (22:00)
- Expanding Use of After-Tax Contributions to Roth Accounts (23:45)
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In behavioral finance, we can explore how psychology influences our behaviors and decisions in finance and investing. Have you taken the time to explore how behavioral finance can determine what type of investor you are?
In today’s episode, we’re discussing different investor types, and how that will impact your experience with finances and investing! Listen in to determine what type of investor you may be!
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Show Notes
Intro (:00 – :32)
This Week’s Article: Behavioral Finance 16 Ways to Outsmart Your Brain for More Wealth and a Better Retirement (00:38)
Introduction to Behavioral Finance (1:20)
Rule of Loss Aversion(4:25)
Scenario Perception (8:01)
Understanding Your Own Motivations: What’s Most Appealing to You? (9:39)
Behavioral Investor Tendencies (10:51)
Decision Making & Decision Paralysis (14:16)
Anchoring - One Dimensional Approach (19:34)
Links:
lswealthmanagement.com
Weekend Read: redefiningwealth.info
Financial Checklist Challenge: redefiningwealth.info/checklist or call 866-633-0955
Text Knowledge to 474747
In the past, inflation has impacted the economy on many occasions, but more specifically, after a major crisis. As we begin to see our world opening back up after the global pandemic of 2020, we’re already seeing impacts of inflation on everyday items and raw materials.
In this episode, we’re discussing the things you should worry about, the things you shouldn’t, and how this could impact your income in retirement. Listen in as we share historical data from the 1970’s and 2008, where our country came back from a crisis.
Review the article mentioned in today’s show >>
Show Notes
Intro (:00 – :35)
Planning for Vacation (:36)
This Week’s Article: Inflation worries are back. Here’s what you should worry about — and what you shouldn’t. (1:40)
Impact of Economic Crisis on Inflation (2:25)
Pre-Crisis vs Now Inflations in Raw Materials (5:23)
Consumer Price Index (6:24)
Spending Habits Post COVID Crisis (7:27)
Inflationary Worries Post COVID Crisis (9:23)
Inflation Averaging (10:19)
History of Inflation and Price Increases (11:57)
Inflation Impacting Your Budget Today (13:56)
Importance of Considering Inflation in the Diversification of Your Portfolio (15:11)
Segmentation: Episode 51: How to Retire Early (17:45)
What’s Different Now vs. 1970s? (19:43)
Impact of Missed Tax Dollars on International Goods (21:31)
Links:
redefiningwealth.info
lswealthmanagement.com
Weekend Read: redefiningwealth.info
Financial Checklist Challenge: redefiningwealth.info/checklist or call 866-633-0955
Text Knowledge to 474747
Are you doing your research and planning on how to retire early? If you’ve been playing around with the ideal, it’s important to review the potential strategies available to actually find a way to approach early retirement!
In this episode, we’re discussing how to develop a written income plan, the approach we take with our clients to retiring early, and three different planning strategies you need to consider!
Review the article mentioned in today’s show >>
Show Notes
Intro (:00 – :35)
This Week’s Article: How to Retire Early
Plan for the Lifestyle You Want in Retirement (2:01)
Income Planning Recommendations (2:47)
The Written Income Plan (3:45)
Begin with the End in Mind (4:24)
Three Planning Strategies for Early Retirement
- Flooring Income Strategy (5:58)
- Segmentation Strategy (13:24)
- Flexible Withdrawal Strategy (17:30)
Redefining Wealth Process (21:47)
Risks in Retirement (23:30)
Links:
redefiningwealth.info
lswealthmanagement.com
Weekend Read: redefiningwealth.info
Financial Checklist Challenge: redefiningwealth.info/checklist or call 866-633-0955
Text Knowledge to 474747
Your investments into retirement are a valuable and irreplaceable commodity that will impact the rest of your life—do you know the person you’re leaving that responsibility with?
Understanding which financial advisor is right for you is one thing that most investors don’t realize they need to do. If your financial advisor isn’t getting to know you or your unique situation, it’s time to start asking questions.
In today’s episode, we’re discussing what misrepresentation of a financial advisor looks like in the finance industry, sharing the questions you should be asking, and walking through our personalized Redefining Wealth Process at LS Wealth Management.
Review the article mentioned in today’s show >>
Show Notes
Intro (:00 – :49)
Catfishing in the Financial Profession (1:09)
Finding a Financial Advisor that Works for You (2:01)
Questions to Consider When Deciding Who Is Right for You (3:51)
Sales Person vs.. Financial Advisor (5:00)
Allegiance to Investment Firms (8:00)
Fiduciaries (8:26)
Suitable/Suitability (8:47)
Example of Irrevocable Investment by A Captive Company (9:17)
Scalpel vs. Meat Cleaver Example (11:53)
The Redefining Wealth Process: (14:43)
What are your client’s goals? (16:34)
Getting to Know Your Client: (18:15)
Holistic Approach (24:48)
Links:
redefiningwealth.info
lswealthmanagement.com
Weekend Read: redefiningwealth.info
Financial Checklist Challenge: redefiningwealth.info/checklist or call 866-633-0955
Text Knowledge to 474747
Do you understand what taxes you’ll be required to pay in retirement? Under new tax plans, you’ll likely be paying more than you anticipated.
In today’s episode, our team talks through the changes in taxes that have happened over the last year, what this means for you, and how you can plan for them and protect your retirement.
Review the article mentioned in today’s show >>
Show Notes
Intro (:00 – :38)
Subscribe to Weekend Reading (2:38)
Why Preparing for Higher Taxes Is Impactful (3:02)
Where Millionaires are Investing (3:28)
The Problem with Investments & Taxes (4:38)
ERISA - Employee Retirement Income Security Act of 1974 (6:55)
Balancing Act of Money Owned vs. Taxes in Retirement (9:02)
Tax Benefits & Taxing Long-Term Capital Gains (12:37)
Tax for One Million Dollar Income Earners & Their Investments (14:02)
Elimination of the Carried Income Loophole (15:12)
Post-Pandemic Tax Impact on Small Businesses (16:05)
Eliminating the Step-up In Basis (16:50)
The 2021 Golden Year (18:44)
Long-Term Tax Minimization Strategy (21:50)
Life Insurance - IUL (22:57)
Treating Cash Value as A Fixed Income Investment - Episode 48
Components to Consider When Building Your Portfolio (24:15)
Links
redefiningwealth.info
lswealthmanagement.com
Call 866-633-0955 to Request the Checklist Challenge or Stress Test
Text Knowledge to 474747
If you’re investing in an IRA, a 403b, a traditional 401(k), etc., it’s important that you understand the taxation on your savings vehicles, as well as develop a tax diversification plan.
Listen into this episode as we discuss how your taxes could be impacted under the current proposed tax plan, what an Index Universal Life insurance plan offers in comparison to other vehicles, and highlight the importance of working with an expert for your financial planning.
Review the article mentioned in today’s show >>
Show Notes
Intro (:00 – :35)
Subscribe to Weekend Reading (00:50)
This Week’s Article: Treating Cash Value as A Fixed Income Choice
Being Proactive with Tax Planning (2:15)
Health Savings Account (HSA) (2:47)
Capping Out in Your Investments (3:08)
Taxes in IRA, 403b, or 401(k) (3:20)
Concerns in Taxation (4:00)
The Importance of a Tax Diversification Plan (4:20)
Tax Proposal Bill Affects (4:48)
Two Things That Increase a Deficit (6:25)
You Should Be Fully Funding Your Roth IRA (7:24)
IUL - Index Universal Life & Section 7702 (8:05)
Attractive Attributes of an IUL (9:29)
IUL as a Swiss Army Knife (11:05)
IUL Changes in January 2021 (14:43)
Grab Laura’s Financial Checklist Challenge at redefiningwealth.info/checklist or call 866-633-0955 to request the Financial Checklist Challenge!
Make sure you’re subscribed to the Weekend Read at redefiningwealth.info!
Principal Protection (17:26)
Analyzing Risk Assessment (18:11)
Investing in Bonds (19:00)
IUL vs. Bond (19:44)
Cash Value Life Insurance (21:00)
Insurance Companies Can Purchase Bonds that Individuals Cannot (22:18)
Defining the Purpose of Your Money & Plan (24:26)
Feeling Comfort in Uncertain Times (24:58)
Links
redefiningwealth.info
lswealthmanagement.com
Call 866-633-0955 to Request the Checklist Challenge or Stress Test
Text Knowledge to 474747
Have you looked at the probability of success for your retirement projections? Today, we’re discussing the Monte Carlo analysis—a common method used to conduct that probability of success for many preparing for retirement.
Listen in as we share our thoughts on this method, considerations when it comes to interpretation of risk, and how this looks when you’ve divested your portfolio.
Review the article mentioned in today’s show >>
Show Notes
Intro (:00 – :35)
Subscribe to Weekend Reading (00:43)
This Week’s Article: Why 50% Probability Of Success Is Actually A Viable Monte Carlo Retirement Projection
Why You Should Read this Article (1:04)
Straight Line Projections / Monte Carlo Assumptions (2:48)
Monte Carlo Simulations (3:18)
Probability of Success Under 70% (4:27)
Retirement Projections: Factors to Consider (6:12)
Depleting Your Retirement Nest Egg (9:46)
COVID’s Impact (11:45)
Measuring Interpretations of Risk & Understanding the Consistency of Return (12:44)
The Hundred Age Rule / Crude Method (15:30)
Volatility Can Be Your Friend (17:34)
Using Technology as a Tool (19:20)
Divesting Your Portfolios (23:35)
Behind the 8 Ball (25:28)
Links
redefiningwealth.info
lswealthmanagement.com
Call 866-633-0955 to Request the Checklist Challenge or Stress Test
Schedule a Virtual Meeting: lswealthmanagement.com/schedule
Text Knowledge to 474747
Are you scared of outliving your retirement and savings? Many retirees have that same fear, so it’s important to understand how your retirement withdrawals will work for you. One million dollars is the amount most will tell you to save for retirement, but is that enough?
A few considerations to account for include your withdrawal rate, tax impact, and diversification of your investments. In this episode, listen in as we discuss how you should consider planning for your future and the details you need to be looking into regarding your retirement.
Review the article mentioned in today’s show >>
Show Notes
Intro (:00 – :40)
Subscribe to Weekend Reading (:50)
This Week’s Article: Is One Million Enough to Retire?
Financial Experts Recommend 1-1.5 Million (2:24)
How Much Do You Need In Retirement? (3:16)
10,000 Baby Boomers Turn 65 Every Day (4:31)
Single Greatest Retirement Fear: Outliving Savings (5:25)
Withdrawal Rate Recommendations (6:18)
Tax Impact on Your Retirement Nest Egg (8:00)
Importance of a Comprehensive Income Plan & Team Approach (9:40)
Municipal Bonds (10:03)
Addressing Potential Pitfalls for Long-Term Planning (11:15)
Schedule a Review at Redefiningwealth.info
COVID’s Impact on Income, Medicare, & Retirement (13:07)
Fees within Retirement Accounts (15:54)
Review the Contracts (18:15)
Saving $1M Beginning at 25 (19:43)
Compounding Effect on Your Money (21:34)
Asset Allocation and Percentage Returns (23:02)
Allocation, Correlation, and Diversification (24:46)
Links
redefiningwealth.info
lswealthmanagement.com
Call 866-633-0955 or redefiningwealth.info/checklist to Request the Financial Checklist Challenge
Call 866-633-0955 to Request the Stress Test
Schedule a Virtual Meeting: lswealthmanagement.com/schedule
Text Knowledge to 474747
Make sure you’re subscribed to the Weekend Read at redefiningwealth.info!
Have you proactively paid attention to the taxation on your retirement income? The investments you’ve made throughout your life in preparation for retirement all come with their own rules and taxes.
In this episode of Retirement Talk Podcast, Laura, Michael, and JAG discuss how different types of retirement income get taxed and how you can better diversify your tax strategy and prepare for those taxes.
Review the article mentioned in today's show >>
Show Notes
Subscribe to Weekend Reading (:50)
This Week’s Article: How 10 Types of Retirement Income Get Taxed (1:28)
Preparation and Transition (2:33)
Being Proactive in Your Retirement Income Taxes (3:25)
Diversification in Your Tax Strategy (5:06)
Nine States Without a Traditional Income Tax (5:45)
Advanced Advice for Your Investments (6:28)
Ticking Tax Time Bombs with IRA, 401k, & 403b (8:07)
Take Control of Your Future Taxations with a Tax Diversification Plan (9:20)
Impact of National Debt (10:40)
Social Security Tax & Provisional Income (12:00)
Thresholds of Provision Income Taxation (13:31)
Bonds, Stocks, and Mutual Funds (15:49)
Phantom Income in Mutual Funds (16:14)
Dividends & Annuities (18:00)
Qualified Dividend vs Non-Qualified Dividends: Determine How It’s Taxed (19:25)
The Future of Taxation on Dividends (20:14)
Net Investment Income (21:25)
Annuities (22:10)
Links
redefiningwealth.info
redefiningwealth.info/checklist
Lswealthmanagement.com
Episode 44: Does Your Portfolio Need Bitcoin?
866-633-0955 to Request the Checklist Challenge or Stress Test
Review the article mentioned in today's show >>
Are you playing with the idea of adding bitcoin to your portfolio? Whether you're approaching retirement or already there, today on the Retirement Talk Podcast we're sharing the good, bad, and ugly when it comes to adding bitcoin into your investment portfolio. Listen in as we discuss cryptocurrencies, how they're perceived by mainstream investors, and our thoughts on investing in bitcoin. Review the article mentioned in today's show >> Show Notes: Subscribe to Weekend Reading (:40)
This Week’s Article: Does Your Portfolio Need Bitcoin by Morning Star (1:22)
The History of Bitcoin (2:01)
Bitcoin Interest by Mainstream Investors (4:30)
Cautious Investing (5:25)
Where is the value of the dollar now? (5:40)
How Trading with Bitcoin Works & How to Incorporate it as a Fraction of Your Portfolio (6:00)
The Benefits of Bitcoin (7:46)
What if You’re Pre-Retirement or Retired (9:30)
Long Term Inflationary Pressures:
Intrinsic Value (13:42)
Download the Redefining Wealth Checklist Challenge at redefiningwealth.info/checklist or call 866-633-0955 to Request the Checklist Challenge!
Bitcoin Value in Comparison to the Market (17:41)
Cryptocurrency Competitors (19:25)
2021 Tax Code (20:44)
Fees and Transaction Costs (22:00)
Digital Firewall Disadvantages (23:17)
Get in Touch with the LS Wealth Management Team:
Website: redefiningwealth.info
Phone Number: 866-633-0955
Mentioned in this Episode:
redefiningwealth.info
Robinhood
ETF - Bitwise or Grayscale
Coinbase
Visit redefiningwealth.info for full show notes and transcription.
Habits are the result of actions we take repeatedly; when you adopt these three habits, you can whip your finances into the best state that they’ve ever achieved. The first strategy is adopt a Mindful Cash Management to automate your savings and add an accountability partner into the mix to keep you straight. By also investing for income and building up a robust emergency fund, you position yourself for long-term financial success.
With these building blocks in place, the stage will be set for you to bring in a fiduciary financial advisor who can help you minimize taxes, maximize your income and create a retirement income plan for retirement. When you partner with a fiduciary financial advisory firm such as LS Wealth, you ensure that you give yourself the best possible chance to achieve financial security now and in the future. You only retire once – make sure that you give yourself the best chance for success.
https://buff.ly/3nVu1Qz
Personal finance guru Dave Ramsey offers advice to Americans based on a number of financial principals, including budgeting, reducing debt, saving money and spending less than you make. However, for each one of Dave’s fundamental principles, there is a legitimate counter argument. For example, while most Americans budget, they also live paycheck-to-paycheck and can’t come up with the money to cover a $300 emergency car repair. Clearly, this nugget of advice doesn’t work well for most people. While I’m in favor of these basic financial principles, there are alternative ways to wealth, including borrowing to potentially increase your wealth, in the case of growing a business, for example, rather than borrowing to consume. If you don’t want to cut back on your spending, you can increase your take-home pay by working overtime or starting a side business. Finally, investing properly to leverage your savings is a proven way to create a secure and sustainable retirement.
Forbes
https://www.forbes.com/sites/garrettgunderson/2021/01/28/how-well-does-dave-ramseys-advice-hold-up-to-scrutiny/
Poor investing decisions driven by emotions cost the average investor 3 percent a year in returns, according to research by Oxford Risk. Emotional decision-making increases during times of market and economic stress, creating even worse returns. For example, a decision to sell stocks when the market lost more than one-third of its value at the beginning of the global coronavirus pandemic could have cost an investor as much as 6 or 7 percent of their yearly returns. To avoid knee-jerk emotional decisions that can cost you, avoid obsessive monitoring of stock prices and the news. In addition, relying on the objective viewpoint of a financial advisor can help. If you have sold out of the market, reinvest gradually over time to avoid losses that could result from mistiming your re-entry.
Financial Times
Emotions cost investors dear, research finds | Financial Times
Many investors view precious metals as an appealing option when the economy is floundering and inflation is rising. While gold usually gets all the love, silver can also be considered as a safe haven investment in turbulent times. In fact, investors rushed into both gold and silver in August due to concerns about the pandemic and weakening U.S. dollar. Gold prices leapt above $2,000 an ounce for the first time ever and Silver surged to $28 an ounce, 140 percent above its 2020 bottom.
If you’re interested in investing in either gold or silver – or both – there are a few key differences between the two precious metals to keep in mind. Gold tends to be more expensive and more valued than silver because it is more scarce. Also, the demand for silver tends to be more stable than demand for gold since silver has many industrial uses, such as in electronics, solar panels and cars. That means gold is a better bet than silver when it comes to hedging against inflation. Finally, the price of silver tends to be more volatile than that of gold for several reasons, including the small size of the trading market.
Some investors prefer investing in mining stocks rather than direct investment in silver and gold. That’s an option if you’d like to add a commodity to your portfolio. Before you make any decisions, consult with a fiduciary financial advisor who can see how gold or silver fits in with your overall financial or retirement income plan.
Investing in Gold vs. Silver: 3 Key Differences to Know | The Motley Fool
The digital equivalent of the Peasants’ Revolt – why the GameStop story is both beautiful and terrifying | The Independent
The Game Stop story is quintessentially American – the little guy not only beats up on the big guy, but also gets rich and engages in worthy actions with that new-found wealth. The story begins when Ryan Cohen, founder of the online pet food company Chewy, took a large position in Game Stop stock. Game Stop began discussions with Cohen about his idea to pivot Game Stop to specialty online retailing on games and gaming products.
Small investors picked up on the idea on Reddit messenger boards and began piling into the stock at the same time large institutional Wall Street investors began to aggressively short the stock, betting against the idea and Game Stop in general. Short selling involves borrowing shares from big institutions in the hope that the price will fall. If that happens, these investors can make big profits buying the stock back at the new low price. However, as most of you know, Game Stop then went on a wild ride, at one point increasing 700 percent above its pre-Cohen stock price. In the process, many short sellers came out on the short end of the stick, losing millions of dollars.
While the spectacle may be entertaining, speculating in the stock market can be dangerous. The paper profits many gained from Game Stop have already evaporated, as the stock closed at $50.31, down 16.15 percent on Tuesday, Feb. 9.
If you’re still sitting in cash because of fear, it’s time to get a plan to get back into the market. Or maybe you have had fear because of a change in government and the unknown you are thinking I need to sit on the sideline a while and see what happens.
All too often, investors flee the market out of a knee-jerk feeling that the market is headed in the wrong direction. However, you can’t – and shouldn’t – sit on the sidelines forever, because stocks are a part of virtually every type of retirement income plan.
That doesn’t mean you need to dive directly into the stock market, or have misconceptions about certain vehicles being less risky. But you should do something. Often, I tell clients, you are trading one risk for another because there is no way to completely avoid risk, even if you hide all your money under your mattress. Interest rate risk is very real. The erosion of purchase power and not having a proper income plan lead to other types of risk. Longevity risk is the number one risk we will face in retirement. Market risk is only one of many different types of risk. Being lazy isn’t beneficial for anyone, and the same goes for your money.
There is always a place to go with your cash for growth, and you don’t necessarily need to take risk. In the accompanying podcast based on this article we educate listeners on different vehicles that can substitute as a cash alternative. Having some cash in an emergency bucket, but the right amount is a good thing typically 8 months I even suggest 12 months but overweighting retirement funds in cash could create and contribute to other types of risk. You may need to step out of the past and consider tools you might have passed over prior. There’s a reason the front windshield in your car is bigger than the rearview mirror. The most important elements are always in front of you.
https://www.cnbc.com/advertorial/2021/01/04/8-ways-to-invest-confidently-in-retirement.html
Now that inauguration day has passed, a new administration takes over in the White House and a new Congress is ready to take up President Biden’s $1.9 trillion plan to stimulate the economy. This plan includes additional stimulus checks in the amount of $1,400 per American, increased unemployment benefits, an increase in the federal minimum wage, state and local government aid and funding for COVID-19 testing and vaccinations. While there is no guarantee that the legislation as written will become law, it’s still a good idea to prepare just in case.
If you’re like most Americans, your retirement concerns are focused around four key areas: paying for healthcare, saving enough money, maintaining an income stream in retirement and having too much debt. To increase your chances of building a sustainable retirement, you can learn more about healthcare expenses in retirement and make plans for how to pay for them as well as getting a handle on how much money you will need in retirement overall and maximizing your savings opportunities while you are still working. You can close any potential gap in your retirement savings by working a few years longer and waiting to claim Social Security until you are at your full retirement age. Finally, consulting with an experienced retirement income planner or credit counselor may help you figure out how to pay off as much of your debt as possible before you retire.
Bank of America Better Money Habits
https://bettermoneyhabits.bankofamerica.com/en/retirement/top-retirement-concerns
With a New Year many people, are setting mental goals right now, which for many includes deciding whether to seek external financial help. However, it’s not always easy to know what to look for in an advisor. In this column, which I contributed to Forbes, I identify three characteristics that are desirable in a financial advisor. First of all, you need an advisor who specializes in your period of life. For example, if you are a pre-retiree, you want to work with an advisor who has expertise in retirement income planning. This is our shows feature article this week.
Secondly, seek an independent advisor. Many advisors who work for big box financial services firms offer cookie-cutter approaches far to often with product recommendations driven by financial incentives. I explain revenue sharing in the show. Third, hiring a fiduciary-only advisor ensures that you have an advisor who is morally, legally, and ethically required to act in your best interests. Once you’ve filtered your lists of advisors through these three factors, take a look at the five core areas of financial planning that you must address before you retire. We refer to this as our proprietary system is the Redefining Wealth Process: income planning, investment planning, tax planning, healthcare planning, and estate planning. The best retirement income planners will offer a process that includes these key areas. They will provide you with a written plan that baselines the income analysis out and they provide portfolio construction from there.
Forbes
https://www.forbes.com/sites/impactpartners/2020/01/16/do-you-know-how-to-choose-a-financial-advisor/
All too often, it’s easy to put off saving for retirement or under-save because you’re not clear on how you want to spend your retirement. Sure, everyone has generic goals – travel, family, blah, blah, blah.
Or maybe you have plenty saved but aren’t motivated to quit working, or cut back on work, because you’re not clear that retirement presents a better alternative to what you’re doing right now.
The solution to both these problems is to clearly define what you want your retirement to look like – not just on the macro level but also on the micro-level. This means deciding how you want to live in general as well as how you plan to spend your days. When you hone in on specific lifestyle choices, you and your financial advisor can then attach price tags to them, which clarifies your personal and financial goals for retirement.
Bottom line: When you clarify your retirement goals and priorities on a macro and micro level, you set the stage for a rewarding retirement. This planning will help align your costs with your goals and get you excited about the next phase of your life.
Kiplinger article
https://www.kiplinger.com/article/retirement/t047-c032-s014-the-key-to-setting-retirement-goals-details.html
You only get the chance to get retirement right once – that’s why understanding the myriad pieces of the retirement puzzle and how they fit together is critical. It’s impossible to answer questions such as when to claim Social Security, how much to save and how to plan a retirement budget in isolation. Retirement is the ultimate dependent relationship because every aspect of it is related to another aspect – frequently in complex ways that the inexperienced don’t realize. That’s why a consultation with a fiduciary retirement income planner such as LS Wealth is an important step in creating a sustainable retirement plan. This is no time to go it alone because the stakes are so high.
Bottom line: Get a free consultation with an experienced fiduciary retirement income planning firm such as LS Wealth.
Since the 2007-09 financial crisis, the value of money and economics have fundamentally changed as countries issue more and more debt and interest rates go negative. For billionaire investor Warren Buffett, this development has fundamentally changed how he invests. He now believes that inflation will surge in the future because governments are locking themselves in a position where they will never be able to repay their debts.
Buffett’s moves signal that he believes the stock market is grossly overvalued. Trading frequently in bubble territory IPOs and tech stocks is an unwise move that is likely to backfire.
Bottom line: Work with an experienced fiduciary financial professional who can craft a pre-retirement and retirement portfolio designed to avoid costly market declines.
Medium.com
https://medium.com/the-ascent/warren-buffetts-recent-explanation-of-how-money-now-works-is-the-most-important-in-history-2e45461a5969
With the stock market’s strongest month in 43 years in the record books, stocks face an uncertain future. Current valuations are high by historic standards. That being said, with interest rates at historic lows and economic optimism on the upswing due to COVID-19 vaccines, many investors still find the market attractive. Valuations remain around 22 times corporate earnings, a premium that is closed to what was reached during the tech stock bubble 20 years ago.
Arguments against the market continuing its winning streak include current high valuations, corporate profits and profit margins that are still in recovery mode, and negative sentiment on the part of institutional, retail, and foreign investors. On the other hand, industry segments outside of the hard-hit oil, airline, and hotel industries are performing well despite the constraints of the virus.
Bottom line: In a situation like this where the picture is muddled, LS Wealth believes in establishing tactical positions that can benefit from either a rising or declining market. A buy-and-hold position isn’t sustainable over the long term because there is too much potential for a devastating market decline. Optimizing your portfolio with tactical management can ensure that you limit downside risk while maximizing your potential to profit in rising markets.
Forbes
https://www.google.com/amp/s/www.forbes.com/sites/chuckjones/2020/11/30/the-stock-markets-have-a-steep-hill-to-climb-in-2021/amp/
Whether the United States has a divided or united government in 2021-2023 depends on two run-off Senate races that will occur in Georgia on Jan. 5, 2021. Currently, Republicans control the U.S. Senate 50-48 seats. Should the Democrats win both run-off elections, they will control the Senate due to the ability of Vice-President Elect Kamala Harris to break a tie. However, if the Republicans win at least one of these races, they will remain in control of the Senate. Divided government with the Republicans in control of the Senate and the Democrats in control of the House of Representatives and the White House means that it is more likely that the Trump tax cuts enacted in 2017 will remain. These lower individual rates are more beneficial to many high-income taxpayers who may experience higher rates and fewer deductions if President-elect Biden’s tax policies are adopted by a unified Congress and White House.
https://www.forbes.com/sites/davidkudla/2020/11/20/why-the-2020-senate-race-may-impact-your-tax-strategy/?sh=1947a63848d9
As terrible as the pandemic has been, there are a few silver linings. One of those is an enhanced ability to plan for retirement. When America was locked down in the Spring, we all had extra time on our hands. As a pre-retiree, this experience likely gave you an increased understanding of the different ways that you can fill your free time – a great dress rehearsal for retirement. If you’re partnered or married, pandemic restrictions have also given you more tools to figure out how to best manage additional one on one time with your partner, an important part of retirement. As you’ve had to do without many of the activities you are accustomed to engaging in, the pandemic has provided the opportunity to focus on what’s really important – what you need versus what you want. This is great from the budgetary point of view, because it helps you see how your spending will change in retirement. Because the pandemic was so unexpected, it has also likely given you an appreciation for the value of an emergency fund. You may want to consider the other ways that the pandemic has offered you to create a more sustainable plan for the rest of your working years and your retirement.
What do your real estate holdings and life insurance have in common? More than you might think. What this article lacks in the way of substance, it overcomes with an interesting parallel. For many people, their main savings vehicle is their family home, which is real estate. For clients I work with insurance and real estate have been an intricate component tax-savvy accumulation.
We know when you make a leveraged real estate purchase, such as a rental property, it may be years or even decades before you build enough equity to generate a net return on investment. At the same time, when I begin making premium payments to my Index Universal Life policies, it will be at least a decade before I can begin utilizing my cash on a tax-advantaged basis. The longer I wait, the bigger the net return will be.
While I am a fan of both these strategies for sources of retirement income, this can be dangerous advice if utilized in a vacuum. Real estate investing isn’t for the lazy or faint of heart, and cash value life insurance isn’t something everyone can qualify for, especially those who have yet to make their traditional retirement contributions.
https://www.forbes.com/sites/forbesfinancecouncil/2020/10/23/rethinking-the-traditional-retirement-planning-approach-two-alternative-strategies/
Forbes.com
When it comes to retirement income planning, many pre-retirees focus exclusively on “the number.” In other words, they obsess about exactly how much in assets they need to accumulate to avoid running out of money in retirement. Is it $1 million? $2 million or more?
What might surprise you is that the number is not the most important factor involved in building a sustainable retirement. Instead, other factors such as when to claim Social Security, when to retire, taxation rates in retirement, over-spending and employer retirement distribution decisions are quite consequential.
In fact, many Americans don’t realize that they can de-couple the decision to retire and the Social Security claiming question. You don’t have to claim Social Security when you retire – in fact, there may be a better point at which to claim. That depends on your overall financial and tax situation and whether you are married or not.
At LS Wealth, we recommend a consultation with an experienced fiduciary retirement income planner with tax planning expertise. You only retire once – your retirement is too important to be left to chance. A consultation with experts will position you to maximize your resources to create the most sustainable path to a financially healthy retirement.
Difficult times tend to bring the crucial element of the importance of a successful process to the forefront. I have friends across the country who are excellent financial planners. I also am acquainted with some of the most successful financial planners in the country. One of the factors that successful planners share is a well-defined planning process. At LS Wealth, we utilize our proprietary Redefining Wealth Process. We aren’t just throwing things at the wall and working off the cuff. There is a well-defined process designed to ensure that no stone goes unturned to position our clients for sustainable retirement income success.
Defined processes are vital for any retirement plan, not just from a functional perspective, but also for client peace of mind. It’s not your net worth that delivers retirement confidence, it’s knowing that you have sufficient income for a long retirement. To gain that confidence, you need to know that income, investment planning, and healthcare planning to ensure you can handle any unexpected events.
A debate has played out in the media for years regarding President Donald Trump’s tax returns. While I can’t speculate about the particulars of his taxes, I do know one thing for certain: the IRS is pretty serious about tax evasion. If there any inkling of malfeasance arose in the course of an audit, these findings would eventually surface. I don’t want to be political; my intention is to present facts with regard to business provisions that allow deductions and carry-over losses or pass-through income.
With that stated, everyone needs to remember that the American tax system is what is known as a progressive tax system. A progressive tax system imposes higher taxes on those making a higher income and lower taxes on those making less income. If you are a business owner, you pay a variety of taxes depending on your business structure, your number of employees and the sector in which you operate. You likely have professionals manage your accounting and pre-pay taxes to avoid IRS penalties for under payment.
Back to President Trump – there are a variety of provisions that would have allowed him to use business losses in one year to offset income from other years. Even if you aren’t a business owner, there are a number of tax provisions that can help you reduce your income in retirement. For example, contributing to a Roth IRA or 401(k) while you are working means that you won’t have to pay taxes on withdrawals in retirement. In addition, you won’t be subject to required minimum distributions (RMDs) beginning at age 72.
Health savings accounts (HSAs) are another great way to reduce taxes before and in retirement. HSAs are the only type of account that is triple-tax advantaged – you get a tax deduction when you contribute, contributions grow tax free and withdrawals are also not taxable when you use them for qualified healthcare expenses. Other ways to reduce your tax bill in retirement include taking advantage of long-term capital gains rates, using long-term capital losses to offset long-term gains, setting up a charitable remainder trust, tapping home equity and getting a reverse mortgage.
When it comes to hiring a financial advisor, many investors focus on aspects such as performance, personal compatibility, or a personal connection. However, making a decision based on these or other considerations ignores the biggest issue that every investor should consider when hiring an advisor – whether that advisor has a fiduciary duty to their clients – or not. Advisors who possess a fiduciary duty to their clients are required to put their clients’ best interests above their own. Many Americans are shocked to find out that this obligation isn’t required of all advisors. In fact, most advisors aren’t required to act as a fiduciary in all their interactions with a client.
Fiduciaries are independent registered investment advisors who don’t answer to a specific financial services company with its own agenda regarding the investments that are offered to clients. They are unique in that they have a legal and ethical relationship of trust with their clients. This subject can be very confusing because there are some hybrid advisors – I call them fiduciaries in disguise – who sometimes act with a fiduciary obligation and other times don’t. However, they aren’t required to disclose when they aren’t acting in your best interest. In my opinion, working with a fiduciary advisor is only common sense. Why would you want to work with someone who doesn’t have a legal obligation to act in your best interest at all times?
Fiduciary financial advisors build long-term relationships with their clients, seeking to align your goals with your financial plan. Then, they populate the financial plan with investments designed to carry out the plan’s objectives. At LS Wealth, this is what we do each and every day in our work with clients. Like other fiduciary firms, we don’t earn income from sources like commissions, trading bonuses or trailer fees. Fiduciaries have no incentive to sell you products – instead, their goal is to help you meet your financial and life goals through building, executing and adjusting a life-long financial plan.
TonyRobbins.com
https://www.tonyrobbins.com/wealth-lifestyle/man-on-the-street-what-is-a-fiduciary/
The advent of COVID-19 abruptly changed the decision-making around retirement — at least as long as the pandemic lasts. While retirement is mainly a financial decision, it’s also a decision related to time and how you spend it. If you’re thinking about retiring soon, ask yourself: “What do I gain from retiring, and what do I lose from retiring?” In the midst of the pandemic, the leisure activities that many enjoyed are limited, such as travel, visiting family and friends, eating out and shopping. Of course, retirement has a much longer horizon than the next year or two — for many, it will last 25 or 30 years, or longer. If you still want to go ahead with early retirement or retirement at a more traditional time, consider consulting with a fiduciary financial advisor such as LS Wealth that can help you determine whether you can build a sustainable retirement income plan. There are also a number of online tools that can help you get a grip on your readiness for retirement, including AARP’s Early Retirement Calculator, Social Security Benefits Analysis, Medicare Eligibility and Premium Calculator and Networthify’sWhen Can I Retire Calculator.
Regardless of which candidate is elected on November 3, it seems likely that there will be 401(k) plan winners and losers. While both candidates have promised simpler IRS rules, such an outcome is usually elusive as rules tend to get more complex, rather than less. This looks to be especially true if Biden is elected, in which case we are likely to continue down the rabbit hole of additional complexity. Biden’s proposed changes create additional incentives for lower income households to contribute to these plans over Roth IRA accounts.
In contrast, these proposed changes reinforce the argument for higher earning households to favor Roth 401(k)s or IRAs over traditional 401(k) or IRA contributions. I say this because reducing unpredictability in retirement is a major goal of all of our retirement planning at LS Wealth. Clearly, contributing to a Roth IRA or 401(k) creates needed stability in retirement because Roths aren’t subject to taxation in retirement while traditional IRAs and 401(k)s are. While we don’t have a crystal ball, the risk of higher taxation in the future is higher than ever with deficits skyrocketing.
Investor’s Business Daily
https://www.investors.com/etfs-and-funds/retirement/retirement-planning-win-loss-joe-biden-401k-plan/
As lifespans increase, more seniors are living longer in retirement. Most imagine spending that time traveling, pursuing hobbies and spending time with family. While many realize their health will decline, they aren’t setting funds aside to pay for the medications, rehabilitation and long-term care expenses that Medicare doesn’t cover. Not only that, but most seniors have no clue how much out-of-pocket health expenses, including long-term care, are likely to cost them in retirement. Fidelity Investments estimates that the average 65-year-old couple will spend $295,000 on out-of-pocket costs, excluding long-term care, in retirement. Retirees, and soon-to-be-retirees can use this number as a starting place for their own estimates, taking into consideration their ages, health situation, family history and healthcare and long-term care costs in their area. To manage healthcare costs, retirees can use Medicare Advantage Plans while pre-retirees can save and invest in Health Savings Accounts (HSAs), which are triple-tax advantaged.
Forbes
Annuities can offer guaranteed lifetime income in retirement, protecting your income stream from market declines and the risk of outliving your savings. However, during the 10 year bull market that ended earlier this year, many near-retirees and retirees were reluctant to tie up their savings in an annuity due to the potentially higher returns offered by the bull market, according to Wade Pfau, PhD, author of Safety First Retirement Planning: An Integrated Approach for a Worry-Free Retirement. However, when the COVID-19 pandemic struck, confidence in future bull market returns eroded, leaving near-retirees and retirees more willing to consider annuities as a strategy for lifetime income. If you are in a situation where you have sufficient retirement assets, purchasing an annuity can help you fund your financial goals in retirement. These goals must include creating a stream of ongoing income that can cover monthly expenses in retirement. In a bear market situation, deferred annuities can be quite attractive because you can purchase future income today while giving your capital the opportunity to grow.
https://www.forbes.com/sites/wadepfau/2020/04/03/is-buying-an-annuity-in-a-bear-market-a-good-idea/#37a8491658ab
The Wall Street Journal Article
For the first time since World War II, the size of the U.S. debt load will reach or exceed the U.S. gross domestic product. The primary cause? Coronavirus spending, falling gross domestic product and a decline in tax revenue. Even without the pandemic, spending was projected to rise in the coming years due to the retirement of the Baby Boomers, which will cause increased spending for Social Security, Medicare and Medicaid.
It seems inevitable that taxes will rise at some point to increase revenue to counter this increasingly heavy debt load. Therefore, it’s wise to engage in proactive tax planning to prepare for a retirement with higher tax rates. That could include engaging in Roth IRA conversions to take advantage of current low tax rates. By converting traditional IRAs to Roths now, you will position your finances to a lower-tax posture, retaining more of your income for yourself throughout your retirement.
The Motley Fool
https://www.fool.com/retirement/plans/401k/rule-of-55/
If you’re aiming for an early retirement, the Internal Revenue Service’s Rule of 55 can help you plan for that retirement in a proactive way. This rule permits withdrawals from your current — or most recent — 401(k) plan if you leave a job for any reason, including a layoff, quitting, getting fired or early retirement at age 55 without a 10 percent early withdrawal penalty. Early retirement is definitely possible, but the additional expenses involved in a longer retirement mean that you need to save more. Tapping your most recent 401(k) without penalties through the Rule of 55 is one strategy that can help you accomplish that goal.
There are two massive risks retirees will face. The first is tax rate risk, the risk that tax rates in the future will be dramatically higher. This seems likely with whomever is elected in 2020 especially with trillion- dollar stimulus packages and mounting national debt. The second is longevity risk, where you run out of money before you die. This has been a valid concern for years with increased live spans.
Most people are not receiving a balanced approach with their income planning. Most clients are focused solely on rate of return or are not working with a qualified advisor who could balance risk retirees will face such as: analyzing income sources for, escalating healthcare cost, cash flow, and portfolio risk. Retirees face many different types of risk in retirement. You may have saved a lot of money in your retirement account, but if it is all fully tax-deferred now and taxable later you have a partnership with the IRS.
Taxes will be one of the most challenging risks retirees could face moving forward. If you’re mitigating tax rate risk, you should be executing a series of Roth conversions in a way that stretches out your tax liability over time but quickly enough that you get it done before tax rates go up for good. Ideally, try to get your fiscal financial house in order before 2026 if possible.
Forbes
https://www.google.com/amp/s/www.forbes.com/sites/davidrae/2018/09/20/rich-person-roth/amp/
If you’ve been concerned about tax increases in the future, it may happen sooner than you think. This year’s election is a pivotal one for a number of reasons, and one of those is taxes. If you are wondering what that might look like, then look no further.Obviously, a proposal this early in the game is subject to dramatic changes, but it does give us something to ponder. While most of these tax changes will only have a significant impact on the wealthiest of Americans, it would, in the end, increase taxes for everyone as expected – further emphasizing the importance of implementing a tax strategy today to take advantage of our historically low tax rates.
One area of impact you should not overlook would be the elimination of capital assets "step up in basis," projected to increase tax revenues by approximately $40 billion per year. Couple this with the increase in capital gains tax rates, and you can see the benefits of harvesting capital gains sooner rather than later. You may be able to sell assets today and repurchase a similar asset within a specified timeframe, resulting in no current taxation. Your heirs will benefit from a "step up in basis" in case this proposal becomes a reality.
The U.S. economy needs another new stimulus package because US jobless claims and U.S. retail sales confirm the economy is stalling. The IMF is warning about soaring US bankruptcies. Small and mid-sized business bankruptcies are likely to triple if the U.S. government does not provide support it. Basically, American consumers do not have the same confidence they had before Covid-19. They need help. And this help, for the time being, could be through an appropriate stimulus package. Why could social security checks be smaller in the future? We also discuss revenue sharing fees for asset managers.
When you're preparing for retirement, it’s easy to over focus on the big question; “Do I Have Enough Money to Retire?” While that’s obviously an important question, there are many other bad moves that can derail a successful retirement. One of the biggest is the failure to create a written income plan, which describes where your income will come from in retirement. An appropriate retirement income plan accounts for all your income and expenses and identifies any gaps. In the absence of such a plan, it’s all too easy to make mistakes that can sabotage your retirement. Many Americans ignore or underestimate long-term care expenses. That can be costly since 52% of people turning 65 will need some type of long-term care during their lifetimes. In an era with rock-bottom interest rates, putting too much money into interest-bearing bank accounts is another potential problem. Because banks offer deposit insurance protection, you may fail to realize how inflation is eroding your purchasing power. Every retirement income plan must factor in the cost involved in healthcare, inflation, and low interest rates.
With the Coronavirus we saw many changes and laws passed to help the American people recover from the fastest economic shut down in history. Part of the provisions presented came from an IRS revision called the Coronavirus-Related Distribution (CRD). This is any distribution by a person diagnosed with Covid-19, and it can also include a spouse or dependent. If you have been adversely affected by the Coronavirus in some way, for example being furloughed, you may qualify as well.
The CRD allows you to withdraw up to $100,000 from your qualified plan, a 401k, 403b etc. and if you’re younger than 59½, the 10% penalty is waived. Another benefit is you are allowed to pay the money back over the course of the next three years.
The IRS treats this as a rollover instead of a contribution so you’re not constrained by the traditional contribution limits.
This is where the Roth Conversion loophole comes in. We also saw a swift market selloff. Find out how to avoid costly mistakes that can set your retirement back.
This week’s retirement reading is from Forbes, titled "4 Reasons Your Taxes In Retirement May Be Lower Than You Think." We will break down this article and provide some insight as this may not be entirely true. Find out some moves you could make to help you maximize your retirement on this week’s show. Link: https://www.forbes.com/sites/financialfinesse/2020/05/26/4-reasons-your-taxes-in-retirement-may-be-lower-than-you-think/#27bcd4ba5e3c
The Redefining Wealth Framework, offers something of a recipe to ensure nothing is overlooked with the implementation of a retirement strategy. Maybe you’ve covered your emergency fund, income strategy and growth strategy. But what happens if you have a major healthcare crisis requiring assistance and care or an extended stay costing ten thousand dollars a month? Maybe you have investments for long-term growth and an emergency fund, but if the market tanks, where do you get your income while you wait for it to recover? We segment assets , we actively manage the risk side of a portfolio. Learn What steps should you take if you are nearing retirement or are already retired and want to make sure you have the right plan in place? You might be asking yourself, "How much of my portfolio should I have safe vs. risking higher potential gains?" Find out on this episode of The Retirement Talk Podcast.
We are currently facing unprecedented times as well as an event with the global pandemic caused by a novel coronavirus that began in March 2020. In just a matter of weeks, we went from business as usual to almost no business at all. Yes, stocks are "on sale" now, and for some investors, now is an ideal time to ramp up their portfolios. But for others, it could be a huge mistake. Listen to the show as we discuss how to tell if you are among those who should hit the gas or pump or the brakes.
Coronavirus/COVID-19 has sent the market into its worst drop since 1987, with a lot of uncertainty and volatility in a short timeline. If you are an investor working with an advisor, your advisor should be working with you to adjust your investment plan. What about your 401k? What moves do you need to make right now? Many investors hold too much company stock. And many individuals own too much stock overall, needlessly taking too much risk. Stocks move in many different patterns, which is what makes investing so difficult. Yet, many investors think in only one pattern — cyclically. If a stock falls sharply, won't it eventually come back? Not necessarily. Find out more on this episode of the Retirement Talk Podcast. Resources: For more information or to sign up for one of our seminars, text KNOWLEDGE to 474747. All times Eastern. Tuesday April 21st at 2 pm https://us04web.zoom.us/j/528737165?pwd=N2x0VGJUcXBUY3Zya0NWMGlzSmVOUT09 Thursday April 23rd at 7 pm https://us04web.zoom.us/j/879093655?pwd=ZEVCZmxySVBVQ1ArZWk1RDFNbFlhQT09 Saturday April 25th at 9:30 am https://us04web.zoom.us/j/161225227?pwd=Tmx3WGVzY1htMlNDOURWVkdoR0FNUT09 HCM 401k Optimizer https://www.401koptimizer.com/public Video explanation of our Portfolio A/Portfolio B example: https://www.facebook.com/LSWealthManagement/videos/212194330107045/ LS Wealth Management on Facebook: https://www.facebook.com/LSWealthManagement/
Historically, the market’s reaction to fast-moving diseases has often been short-lived. On average (Since WWII), 5-10% declines happen once a year and 10%-20% declines happen every three years. With the market up over 40% from Christmas Eve 2018 to 2/19/2020, a sizable decline was not unexpected. However, human lives are at risk, so this is much more serious than a normal decline. What should investors do during turbulent times? Find out this episode of the Retirement Talk Podcast.
While money itself is unbiased and unemotional, most of us come into adulthood with our own set of beliefs about the management and usage of money. We will examine the three keys areas to financial risk: financial independence, risk capacity, and bias tendencies. We will do a deep dive into the emotional and psychological reasons behind financial decision-making. The failure of most current systems is that they only measure risk tolerance. Find out how this could impact your retirement and investment success over the long haul.
The Financial Market has been at All Time Highs. But an area people do not plan for is legislative risk, tax risk, and income planning in retirement. Investing is not all about which stocks to pick. The Secure Act is the most significant legislation in recent years which was signed into law December 19th, 2019. How will it affect IRA’s and Retirement accounts? Find out on The Retirement Talk Podcast, where we Redefine wealth and your money.
The Financial industry as a whole and Wall Street firms have failed many individuals and families. Our schools do not educate people with financial literacy, and most educated adults are still confused with the many nuances that exist in financial services. We believe you deserve the best information. Your best interest should be served. We are here to help you redefine wealth on The Retirement Talk Podcast with your host Laura Stover.
On this episode of the Retirement talk podcast we will discuss Taxes and IRA’s. How could a tax rate increase of 10% lead to a tax payment increase of over 70%? That’s what we will explore today along with what is the most important line on your tax return. Resources: Math discussed in today's episode: To take a distribution of $3000/month, to allow 20% for taxes, you would need to take out $3,750/month - $3000 to you and $750 (20%) to Uncle Sam. Multiply that by 12 for a total of $45,000 taken out - $36,000 to you and $9,000 to the IRS. If tax rates increase to 30%: To net the same $3,000 per month: You'll need to withdraw an additional $1,286 monthly for a total of $4,286. $3,000 to you, $1,286 in taxes. Multiply that by 12, and to net the same $36,000 annually, you'll need to take out a total of $51,432. $36,000 to you, $15,432 in taxes. The $9,000 you needed for a 20% tax rate is now $15,432 at 30%- an increase of 71% to net the same amount - with only a 10% increase in taxes. If you'd like to know more, or to contact Laura Stover, you can email her at info@lswealthmanagement.com - or call 855-419-PLAN. That's 855-419-7526.
There are three different types of financial advisors and levels of investment help. Do you know the difference between the 3? It's important to find an advisor with the right skillset for your unique needs as well as to ensure they service you in the way that you would like. How do you know which type is right for you? We believe you deserve advice based on your best interest. We will cover some key questions to ask, as well as some red flags to avoid. Sit back take notes and enjoy The Retirement talk Podcast, Redefining wealth, with your host Laura Stover.
Did the financial markets have your attention in August? We assume so. After all, there was an 800-point drop in the Dow. This was the worst day in the U.S. stock market this year. And while many investors missed it, the December 2018 plunge in stock prices capped off a 20% decline which started in October. That could have put a big divot in the plans of folks recently retired or in the late stages of their careers. Even though we have seen a healthy rebound, how do you need to plan to full proof your portfolio? We will discuss the factors that could set you back. All on this week’s Retirement Talk Podcast | Redefining Wealth with Laura Stover.
This week's Retirement Talk Redefining Wealth Show discusses a pending retirement rule change that could Impact your IRA or 401k Account. It could make the IRS Your Biggest IRA Beneficiary! Listen in as Laura Stover breaks down the Secure Act and shares her thoughts.
Retirement Talk Redefining Wealth and your Money with Laura Stover, is a podcast that educates, entertains, and helps prepare our listeners for retirement. It's a show designed for those looking to maximize their financial efficiency and fulfill their lifestyle. If you want to stay current on relevant financial planning and retirement topics, this is the show for you. It is also geared toward those needing to transition from accumulation to preservation and the shift necessary in how money is managed. Subscribe for free in your favorite podcast app, and join you host, Laura Stover, for The Retirement Talk podcast.