The Retirement Detective: Recent Episodes
Philip Mock
This is The Retirement Detective podcast, where we dive into cases with Philip Mock, Chartered Financial Analyst and CERTIFIED FINANCIAL PLANNER™ professional, to solve common retirement and financial planning questions. Get insight into how to solve quandaries that appear on the path to and through retirement, ideas on how to approach saving and investing for retirement, and how to plan for retirement in a tax-efficient manner.
The Retirement Detective podcast is going on temporary hiatus while the podcast is renamed, re-branded, and re-launched. Stay subscribed for updates!
In this episode, we talk about four financial scams to be on the lookout for in 2024. We'll also talk about the #1 financial scam from 2023, according to the FTC. In addition, we'll talk about some basic cybersecurity and common sense steps you can take to protect yourself. We conclude with a discussion of a new financial scam that is on the rise this year.
In this episode, we discuss some important things to gather for your accountant at tax time that go beyond the forms you receive in the mail like 1099's and W-2's. For instance, we discuss the items needed to gather if you make 529 plan contributions, make qualified charitable distributions or make a 60 day IRA rollover. There are many items that simply require you to keep good notes and deliver those to your accountant - no form will arrive to explain it for you. We discuss several of these in this episode.
In this episode, we walk through four prudent steps to take if you receive a inheritance or other financial windfall. Initially, receiving a large sum of money suddenly can be overwhelming. We cover four key steps that include taking time to become mentally comfortable with the money before using it, focusing on pre-existing goals and more. In addition, we discuss why it might be helpful to include a CPA, a financial planner, and a mental health professional on your team as you navigate how best to utilize your newfound assets.
In this episode, Philip walks through the personal example of dealing with a water leak to illustrate the importance and peace of mind that comes with having adequate insurance coverage.
You'll get your investment 1099's by January 31st right? Wrong! In this episode, we discuss common 1099 myths - debunk them - and walk through the different 1099 forms you can expect to receive this tax season and when you'll receive them. Lastly, we'll discover why some investors may be forced to extend their tax filing each year!
In this episode, we discuss an important investing topic: risk. And specifically, an investor's tolerance for risk. In general, each person has a unique tolerance for risk and that should translate to a specific level of risk taken within their investment portfolio. We disucss the three elements of risk: risk appetite, ability to take risk and need to take risk and how they work together. Lastly, we discuss how you can tune in to your risk tolerance without necessarily taking a quiz or questionnaire to find out.
In this episode, we discuss how transferring securities from one brokerage (or custodian) to another works. Back in the 1960s and before, securities trades and transfers were done on paper. This led to a multitude of chaos, confusion, mistakes and investor costs. As a result, several entities were formed to centralize and standardize the settlement and transfer of securities - the more modern versions of which we still use today.
In this episdoe, Philip reviews the provisions of the 2022 SECURE 2.0 Act that take effect in 2024. While many of the provisions took effect in 2023, some were delayed to take effect in 2024. We review those provisions in today's episode, as well as their implications on your financial and tax planning for this year.
In this episode, we discuss the top 3 most downloaded episodes on the podcast in 2023. If you haven't listened to them, check them out!
We discuss episodes on social security, tax penalties, and the differences between investment advisors and brokers.
Check out our website at: https://www.retirementdetective.com/
In this episode, Philip discusses some basic planning documents you can put in place to help children out in emergencies once they become adults. Once a child becomes an adult, they retain adult priveleges for their health information, financial information, data, etc. Putting certain documents in place like powers of attorney, living wills, etc can help you manage your child's affairs in an emergency - even once they're an adult.
The documents discussed in this episode are:
1) Healthcare power of attorney
2) Durable power of attorney
3) Medical directives / Living Wills
4) HIPAA Waivers
5) FERPA Waivers
In this episode, Philip discusses five financial planning moves to make before the end of the year:
1) Tax Planning
2) Portfolio Rebalancing and Tax Loss Harvesting
3) Check Account beneficiaries
4) Review employer benefits
5) Set goals for next year.
In this episode, we pay homage to Charlie Munger, the prolific investor and vice-chairman of Berkshire Hathaway that passed away on November 28, 2023. Philip shares some of his favorite Charlie Munger quotes, and the learning lessons from each.
In this short Thanksgiving episode - I reflect on being thankful, and encourage you to do the same.
In this episode, we'll discuss the so-called "rules of thumb" for withdrawal rates in retirement. These "rules of thumb" can range from 4% withdrawal rates to, most recently, 8%. We'll discuss why such rules-of-thumb are probably not appropriate for most investors. We'll discuss two concepts: sequence of return risk, and the difference between geometric and arithmetic returns in an effort to explain why these rules-of-thumb should be used with caution.
In this episode, we'll walk through 5 signs that you need a new advisor. Most of these would apply to not just financial advisors, but also other professional advisors like attorney's and CPA's. The items we'll cover are: communication, keeping promises, consistent expectations, innovation and keeping you comfortable.
In this episode, we examine donor advised funds. Donor Advised Funds are a vehicle investors can use to donate to charity in a unique way. Donor advised funds hold charitable donations for investors so that they can be invested and donated to charity at later date. This can be advantageous for timing charitable deductions for taxpayers. We'll discuss the pros and cons of donor advised funds in this episode.
Let's Talk Mortgage Rates
Episode 39
As of this recording, the 30 year fixed mortgage rate average in the United States is 8%. Rates have moved upward dramatically over the last 2 years. We offer some scenarios to help you understand exactly how much this will impact your mortgage and also how it may impact the housing market.
Using Pre-Tax Money to Pay for Medical Expenses with HSA's and FSA's
Episode 38
In this episode, we'll talk about Flexible Spending Arrangements (FSA's) and Health Savings Accounts (HSA) and how you can use them to pay for medical expenses with pre-tax dollars. Additionally, HSA accounts present other unique opportunities in retirement that we'll explore.
Alternative Investments Pt. 6: Hedge Funds
Episdoe 37
In this episode we wrap up our series on Alternative Investments by talking about hedge funds. Hedge funds is sort of a catch-all term to include many different strategies like merger arbitrage, market neutral, global macro and other strategies. We'll talk about a few of the more commone ones in this episode.
Alternative Investments Pt. 5: Managed Futures
Episode 36
In this episode, we discuss managed futures, another type of alternative investment strategy. Managed Futures are funds that purchase futures contracts, a type of derivative, to invest in a variety of asset classes - as opposed to actually buying the asset classes. Managed Futures are also typically a momentum or "trend following" strategy whereby they attempt to identify and follow trends in the markets. We'll discuss the pros and cons of Managed Futures in this episode.
Alternative Investments Pt. 4: Private Equity
Episode 35
In this episode, we continue our series on alternative investments by talking about private equity. Private equity is a vehicle by which investors can invest in smaller non-public securities in a diversified manner. Private equity is riskier than investing in public markets, and also requires your investment to be effectively locked-up for many years. That said, for investors that are sophisticated and can withstand these risks, private equity can be an attractive asset class. We'll also discuss other risks, fees, and more in this episode.
Alternative Investments Pt. 3: Commodities
Episode 34
In this episode, we continue our series on Alternative Investments with an introduction to commodities. Commodities include things like oil & gas, grains, livestock and metals. We discuss the unique aspects of investing in commodities and some of the challenges.
Alternative Investments Pt. 2: Real Estate
Episode 33
In this episode, we disucss the first alternative investment type for this series: real estate. Real Estate can be invested in through a number of different formats and vehicles and we discuss those in this episode. We discuss investing in real estate debt (ie. mortgages) and real estate equity through a vehicle like a REIT. We also discuss some of the pros/cons of investing in real estate.
Alternative Investments Pt. 1: Factors to Consider
Episode 32
In this episode, we set up our multi-part series on alternatives by discussing some of the factors to consider when investing in alternative assets or asset classes. These would include costs, liquidity concerns, due diligence challenges, and challenges in benchmarking alternative investments.
The Basics of Correlation and Why We Own Multiple Asset Classes
Episode 31
In this episode, we walk through the basics of correlation, a statistics concept that explains how two data sets, or variables, might be related. This has important implications for portfolio construction and sets up some upcoming episodes on alternative investments.
How to Reduce Mutual Fund Expenses Through Share Class Exchanges
Episode 30
In this episode, we walk through how to do a process called a share class exchange to change from an expensive share class of a mutual fund to a less expensive one. When done correctly, such exchanges can often be tax-free. However, there are areas to watch out for and those are discussed as well.
If you have a large position in a legacy mutual fund in an expensive share class, and hefty capital gains that prevent you from selling it, a share class exchange could be a way for you to reduce your fund expenses while retaining the holding.
Check out our website: https://www.retirementdetective.com/
5 Financial Wellness Tips for Back-to-School season
Episode 29
The back-to-school season is a great time to do a check-up and re-assessment of your own financial condition... whether or not you actually have kids or grandchildren headed to school. In this episode, we walk through 5 quick tips to accomplish some mid-year housekeeping.
1.) Check-up on education savings for kids and grandkids.
2.) Take stock of your personal savings accounts and rates.
3.) Do an overall rebalance of your investment accounts.
4.) Check-up on debt, rates, and assess if payoffs make sense.
5.) Begin tax planning for 2024.
Check out our website: https://www.retirementdetective.com/
Investigating I-Bond Buyers Remorse
Episode 28
Over the last 24 months or so, lots of investors purchased I-Bonds... a type of treasury bond that has an inflation adjustment to its interest rate. With inflation cooling, some investors are starting have buyers remorse. In this episode, we explore why that is, what investors and do about it, and generally touch on the characteristics and things to consider when selling or redeeming an I-Bond.
Check out our website: https://www.retirementdetective.com/
Calculate the value of your I-Bond: US Treasury I-Bond Calculator
The Case of the US Credit Rating Downgrade
Episode 27
In this episode, we discuss and analyze the recent downgrade of the United State's credit rating from AAA to AA+ by Fitch. Fitch is one of the three major credit rating bureaus in the United States. Fitch is not the first to downgrade the U.S. as S&P downgraded the U.S. from AAA to AA+ in 2011. We compare and contrast the two downgrades and what all of this is likely to mean for investors and retirees.
Check out our website: https://www.retirementdetective.com/
Investigating Beneficiary Designations
Episode 26
In this episode, Philip Mock, CFA, CFP(R), dives into beneficiary designations. Beneficiary designations are a simple and free update you can make to your estate plan to make sure accounts with named beneficiaries are set up properly. Typically accounts like retirement accounts and assets like insurance policies will require designated beneficiaries to receive those accounts and assets if the account holder passes away.
Often beneficiary designations are set up when the account is opened, and then forgotten. As life happens with births, deaths, divorces, and marriages, the beneficiary designations can quickly become stale and outdated.
We discuss in this episode why it is so important to set your beneficiary designations correctly, and we discuss some pitfalls to avoid when naming your designated beneficiaries.
Check out our website! https://www.retirementdetective.com/
Analyzing Trading Costs and How to Reduce Them
Episode 25
In this episode, we cover the basics of trading costs and some tips on how to reduce them. Trading costs are the costs associated with making trades in your investment portfolio. Some costs are explicit like commissions, transaction charges, taxes, etc., and other costs are implicit such as bid-ask spreads, market movements, etc.
All else equal, it is prudent to reduce trading costs when managing your portfolio and making trades. However, compared to more frequently-discussed topics like advisor fees and mutual fund / ETF management fees, transaction costs are not as frequently discussed. Nonetheless, they are an important component of your portfolio management costs to mitigate, and over time can add up to be significant.
Check out the website: https://www.retirementdetective.com/
Investigating How to Take a Charitable Deduction Even if You Take the Standard Deduction
Episode 24
In this episode, we'll examine how using the Qualified Charitable Distribution provisions of the tax code can allow you to effectively take a charitable deduction even if you use the standard deduction, as opposed to itemizing deductions on your tax return. With recent changes in the tax laws, the standard deduction is much larger than it was several years ago, and as a result many taxpayers that once itemized deductions no longer meet the threshold to itemize.
For those over age 70.5, the QCD represents an opportunity to further reduce your taxable income in addition to taking the standard (or even itemized) deduction. The QCD strategy does have some quirks though, so tune in to learn all of the details.
Our website: https://www.retirementdetective.com/
Please consult your tax advisor before implementing any new tax strategy.
Examining Social Security Benefits Part II: Factors to Consider on Benefits from Spouses
Episode 23
The episode is the second part of a two-part series on Social Security benefits. In this episode, we discuss filing strategies and considerations for individuals based on benefits derived from others: spousal benefits, ex-spouse benefits, and survivor benefits.
While Social Security filing strategies are a commonly discussed and written-about topic in financial planning, it is nonetheless important and I wanted to share my thoughts. We'll discuss the basics of filing dates and the nuances around filing for spousal benefits, ex-spouse benefits and survivor benefits.
Most importantly, you must keep in mind that analyzing Social Security benefits is a very individualized decision. There is not a rule-of-thumb that works for everyone. So, this episode walks through some of the issues for you to consider, but will not be the recipe that necessarily suits your individual needs and circumstances.
Social Security Website: https://www.ssa.gov/
Our website: https://www.retirementdetective.com/
Examining Social Security Benefits Part I: Factors to Consider on Your Benefits
Episode 22
The episode is the first part of a two-part series on Social Security benefits. In this episode, we discuss filing strategies and considerations for individuals' own benefits based on their earnings history. Next week, for Part 2, we'll discuss strategies and considerations for benefits based on other's earnings/situation: survivor benefits, spousal benefits, and ex-spouse benefits.
While Social Security filing strategies are a commonly discussed and written-about topic in financial planning, it is nonetheless important and I wanted to share my thoughts. We'll discuss the basics of filing dates and the importance of understanding the trade-offs and rewards for taking benefits early vs. late, respectively.
Most importantly, you must keep in mind that analyzing Social Security benefits is a very individualized decision. There is not a rule-of-thumb that works for everyone. So, this episode walks through some of the issues for you to consider, but will not be the recipe that necessarily suits your individual needs and circumstances.
Social Security Website: https://www.ssa.gov/
Our website: https://www.retirementdetective.com/
Investigating How You Should View Asset Allocation
Episode 21
In this episode of the Retirement Detective Podcast, we discuss the importance of analyzing your investment portfolio from an asset allocation perspective. We start by looking at the overall asset allocation, which includes cash, equity, fixed income, and alternatives, and breaking down each pie piece further.
We discuss three ways to analyze your equity portfolio: size perspective, country exposure, and sector perspective. For fixed income, we discuss analyzing the portfolio based on fixed income sectors, credit quality, and a maturity/duration standpoint.
It is important to analyze your investment portfolio from an asset allocation perspective and to understand what you own. By doing so, you can make informed decisions about reallocating and rebalancing your portfolio to achieve your retirement goals.
Check out our website!
https://www.retirementdetective.com/
Solving the Mystery of Money Market Funds: How They Work and What to Expect
Episode 20
In this episode of the Retirement Detective Podcast, we discuss the risks and benefits of money market funds as compared to other relatively safe liquid investments such as cash, CDs, and US treasuries. We start by explaining the differences between these investments.
We then delve into the safety and liquidity of these investments. The safety of CDs and treasuries depends on the FDIC limits and the government's ability to pay, respectively. That said, money market funds invest in a broad basket of short-term securities, inherently offering diversification. Plus, with daily liquidity, they do not have the lock-ups to maturity that CD's and Treasuries possess. Money market funds have objectives to remain stable and keep the price at $1.00, through buying high-quality securities, remaining diversified, and keeping the maturity profile of the underlying investments rather short.
Lastly, we discuss the risks, and namely that they are not exactly the same as cash and can experience a lack of or delay of liquidity during times of crisis. This is detailed in the prospectus, which is recommended reading prior to investing in money market funds (or any funds for that matter).
Check out our website! https://www.retirementdetective.com/
Episode 19: Cracking the Code of Financial Advisor Designations
In this episode of The Retirement Detective Podcast, I dive into the varying levels of rigor among financial advisor designations. With over 200 different designations being "claimed" out there, not all of them are created equally. Some designations are extremely rigorous and take years to complete, while others may only require a short test after a short webinar. I stress the importance of investors understanding what these designations mean and assessing whether they are satisfied with their advisor's designation. In this episode, we walk listeners through some of the most common designations and provides insight into their levels of rigor and what they may indicate about an advisor's expertise. The designations discussed in this episode include: the CDFA, CTFA, ChFC, CPA, CFA, CFP, AAMS and AIF, but as noted, there are many more out there.
I believe that it's crucial for individuals to understand the different designations when working with an advisor or when interviewing potential advisors. We'll lastly discuss a tool that individuals can use to look up what designations mean and assess whether it's the sort of designation they're happy with their advisor having.
Links mentioned in episode:
Check out our website! https://www.retirementdetective.com/
FINRA Broker Check: https://brokercheck.finra.org/
SEC IAPD: https://adviserinfo.sec.gov/
FINRA Professional Designation Search: https://www.finra.org/investors/professional-designations
In this episode, we investigate two tax "loopholes" within the estate and gift tax laws to give gifts that exceed the annual exclusion amount, but don't eat away at your lifetime gift and estate tax exemption. For those with potentially large estates that could be taxable, a common strategy is to try to "reduce" the size of your estate. However, a consequence of this is that it typically reduces the amount of your estate gift tax exemption to give gifts that exceed the annual exclusion amount. That said, there are two options written into the tax code to avoid this predicament, and we examine them in today's episode. Of course, since this is tax related, please discuss with your accountant and estate tax attorney before considering this strategy.
In this episode, I share my thoughts on the current debt ceiling debacle. We'll take a brief look at the quasi-default in 1979 as well as the US credit downgrade in 2011 as reference points for how a default might look today.
Inflation remains a hot-button topic in the news today. However, there are lots of different measures of inflation running around out there. In this episode, we will examine the two major inflation measures: Consumer Price Index ("CPI") and Personal Consumption Expenditure ("PCE"), as well as the "core" variants of each in an effort to help you better understand how inflation is measured. The two measures are not identical and the media tends to prefer to report CPI. However, the Federal Reserve tends to prefer to watch PCE, specifically "core" PCE. You'll learn in today's episode how all of these measures are different and why that matters.
In this episode we will discuss one of the most common cognitive errors in investing: confirmation bias. Confirmation bias is when we tend to find, retain, and promote data that is in alignment with a particular viewpoint or thesis. We'll discuss this in detail and discuss how confirmation bias can lead to poor investment decisions and how to avoid these errors.
Direct Indexing is a popular equity investing strategy that involves replicating a stock index using the individual stocks that comprise the index as opposed to buying a fund that tracks the index. Direct indexing has been around for some time, but has increased in popularity in the last several years. In this episode, we'll disucss the pros and cons of direct indexing as well as what sort of investors may want to consider if direct indexing is appropriate for them.
In this episode, we analyze the basics of estate planning. Estate planning is a core component of a solid overall financial plan. In this overview episode, we will discuss wills, trusts, powers of attorney, advanced directives and how they all work together in unison to create an estate plan.
In this episode, we investigate and analyze tax penalties. We discuss how you can avoid the most common tax penalty - underpayment penalties - by taking advantage of the "safe harbor" provisions. Making sure you avoid tax penalties is an important part of tax planning. Through paying estimated taxes and through making correct tax witholdings, you can work to avoid having to pay underpayment penalties.
The Federal Reserve has been in the news a considerable amount lately with markets on edge to hear if the Federal Reserve will "raise rates" or "lower rates". When they raise and lower rates, they are actually raising and lowering a rate called the "Federal Funds Rate" or "Fed" Funds Rate. In this episode, we examine what the Fed Funds Rate is, why it is important, and how it impacts investors when the Federal Reserve decides to change that rate.
In this episode, we discuss Backdoor Roth Conversion strategies and what can go wrong when rules like the "pro-rata" rule are not closely followed. This is a common pitfall when implementing a Backdoor Roth Conversion, and we examine that in this episode.
FDIC Insurance has been a major topic in the news lately. In this episode, we analyze the FDIC by looking at its origins, how it operates today, and we summarize how the FDIC Insurance works as it relates to bank deposits.
This is the final episode in our multi-part series on fixed income. For the episode, we examine the "income" part of fixed income. We discuss how to determine the amount of income from a bond, how to define its yield-to-maturity, yield-to-call, and coupon rate and why those are all important. Lastly, we briefly discuss how these yield measures helpt construct fixed income portfolios to meet objectives.
In this episode, we continue our mulit-part series on Fixed Income. This episode focuses on Interest Rate Risk and duration and how both are important to understand when managing fixed income portfolios. Additionally, we consider the current events in the SVB Bank failure, and how that can serve as a lesson as it relates to interest rate risk.
This is the second in a multi-part series on Fixed Income investments. This podcast episode discusses the importance of understanding credit risk and the risks of default when investing in fixed income.
This is the first in a multi-part series on Fixed Income investments. This podcast episode introduces fixed income and covers some of its basic forms and features.
In this episode, we will work to solve one of the most common questions in the investment advice universe: What is the difference between an Investment Advisor and a Broker?
In this episode, we investigate mutual fund fees and dive into what they are, how different types of mutual fund fees differ and how you can research this information yourself.
Congress recently passed significant legistlation impacting retirees and investors dubbed "SECURE 2.0". We'll investigate the Top 5 changes in this legislation, and how they might impact retirees or those planning for retirement.
There are so many types of IRAs. Traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP-IRAs... what are the differences? We solve this question in this episode.