Plan With The Tax Man

A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to serious financial mistakes. Today, we're walking through five common examples of wishful thinking that can quietly damage your retirement and how you can build a plan that protects your future instead of relying on luck.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc: A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to some serious financial mistakes. So we want to talk about a few ways wishful thinking could possibly damage our retirement this week on Plan with the Taxman.   What's going on, everybody? Welcome into the podcast. Thanks for hanging out with Tony Mauro and myself as we talk invest and finance in retirement. Tony is a CPA, CFP, and an EA with 30-plus years of experience, and he is the Tax Doctor at Tax Doctor Inc., serving you all around the, well, Iowa and other areas as well. He's got clients all over the place. But we appreciate your time here on the podcast. And this week, we got a few wishful ways that, wishful thinking ways, I guess, that maybe could damage us, Tony. And there's nothing wrong with being optimistic and hopeful. Well, that's all good stuff. But you want to not kind of carry that so far, I guess, that it clouds your judgment and costs you in the end, right?   Tony Mauro: That's right.   Marc: Yeah.   Tony Mauro: Some of these topics are some we hear all the time.   Marc: All the time? Well, we'll try to tackle some of the biggest ones for you.   Tony Mauro: Yeah.   Marc: You doing all right this week?   Tony Mauro: I'm doing good. Yeah. I mean, we're getting ready to spend a little more time outside, although the weather here is cool.   Marc: I think it's cool across the country, actually, a little bit.   Tony Mauro: Yeah.   Marc: In some places.   Tony Mauro: A lot of rain and stuff.   Marc: Yeah.   Tony Mauro: Hoping for something warmer.   Marc: Yeah. Yeah, for sure. Well, that's wishful thinking, right?   Tony Mauro: That's wishful thinking on my part. Yep.   Marc: Well, let's get into a couple of these and talk about it. We got to go with a standard classic, really, financial myth, I think, and that's the wishful thinking thought of, "I'll be in a lower tax bracket once I retire, so that's going to help me out from my cost savings standpoint," or whatever. And Tony, I've been talking with you for years and lots of other financial professionals, and they all tell me the same thing, that more times than not, people are in the same tax bracket when they retire, not a lower one. What's your thoughts?   Tony Mauro: That's correct. Yeah, we find that too. It's the same or sometimes even higher depending on what they have coming in and how that is going to be taxed. And I mean, the traditional thinking is that, "Hey, my expenses are going to go way down, my income is going to go way down, and so therefore my bracket will go way down." But a lot has changed even with the brackets. There's not as big of a spread in each one, so they don't go down by that much. But a lot of times, people that have definitely planned and saved and are bringing in money, passive income from retirement sources, that a lot of times is the same or higher income than when they were working, which is a great thing, but they don't drop tax brackets, so we got to be very efficient about taking it out.   Marc: Yeah. Okay. And that's the point. So it's the income strategy, where you're pulling it from and at what time, that's going to kind of dictate this a little bit, right?   Tony Mauro: Yes.   Marc: So that's when you start getting into the, which horse are you riding? The Social Security horse or your own, the 401(k)'s over here that you have or what on pulling out the income gap, kind of shoring up that income gap. Because they don't just, getting to Medicare, when you're 65, they give you Medicare. It'd be cool if they said, "Hey, you're 65. You're automatically in a lower tax bracket." But you don't get it as a retirement bonus. So if you want to be in a lower bracket, you have to strategize for it.   Tony Mauro: You got to strategize, and you got to pull money out of the right buckets at the right time which I think is where a planner, if you're working with one, is going to really help you in that regard besides just trying to get the most return for whatever you're doing, whether you're taking some of the principal or just interest or whatever.   Marc: What's the culprit that keeps us in that tax bracket the same? Is it typically the RMD withdrawals?   Tony Mauro: I find it's the RMD withdrawals and then other income. People will go back and work a little bit. And then what they don't realize is that sneaky Social Security being taxed is that they bring in this income from other sources. And oh, by the way, now all of a sudden, a lot of my Social Security is taxed, and they weren't ready for that. They thought they were going down in income, which they are a little bit, but then that Social Security creeps back in for taxation purposes, and it screws up a lot. I just saw a lot of it this year. We had a lot of retirees that went out and had RMDs, and then they were also, a lot of them went back to work. You could look at their comparisons on their tax returns, and last year, hardly any of their Social Security was taxable. This year it was the full max, 85% of it, and all of a-   Marc: Because of the income pullout.   Tony Mauro: Yeah. Because of the income pullout.   Marc: Yeah.   Tony Mauro: And so you got to watch that. And you can plan some of that away a little bit, but that's the culprit that I saw this year with the Social Security.   Marc: And that's where, again, some of that strategy comes in. And then when you do bump that income up higher, also with the Social Security, that then also affects the IRMAA conversation, right, the IRMAA penalty.   Tony Mauro: Yeah. Yeah, it affects that. And then that obviously affects the tax bracket. And it's very sneaky because the clients, like I say, none of them realize that about the Social Security.   Marc: Well, you kind of mentioned it, so we won't dive into it, but another one that was on my list was I'll spend less money when I retire because I'm no longer going to work and stuff. But I mean, you kind of touched on that. I think I sum it up all the time with the way my dad said it to me many, many years ago, which I've shared on this podcast before. And he was like, "Hey, retirement's great. I'm digging it. Every day's a weekend." I was like, "Awesome." He's like, "Yeah, but I spend all the money on the weekends." Right?   Tony Mauro: Yeah. That's right. Yep.   Marc: So you just got to be careful. Right?   Tony Mauro: That's a good saying. Yeah, I like that.   Marc: Yeah. And he, unfortunately, passed away, wasn't retired for very long. But it's always stuck with me because I was 15 or 16, something like that. I was like, "Okay, well, every day in retirement's a weekend, and you spend a lot of money on weekends, so be careful." So don't assume that that's, and again, wishful thinking, being well, like this next one, "Well, as long as I keep getting this good return, Tony, that I've had for the last, let's say 10 years, then my plan will work." Well, that's wishful thinking. I mean, as we saw this year, obviously, we had a new administration, we had the tariffs come in, made things pretty rocky. Now it's smoothed out there. We're almost back to all-time highs, but still, don't go into things with the assumption that every single year the market's going to give you 20% returns or 12% returns or whatever.   Tony Mauro: Yeah. And I think most retirees shouldn't be looking at that like that anyway, because it's time to be more conservative. And if you're banking on that, and we have a prolonged, we haven't had a lot of it in the last, what, prolonged 15 years?   Marc: 17 years?   Tony Mauro: Yeah, 15 years. Yeah. We've had little blips, yes, and some months of-   Marc: I mean big blips, but they didn't last long, right?   Tony Mauro: No, it didn't last long. And if you're not prepared for that or worse, you're not diversified, and you've got a lot of stuff, meaning your retirement income or not income, but your nest egg in something a little more aggressive, and that particular sector has a bad three to five years, that's going to blow that whole thing right up. You won't be just fine.   Marc: Yeah. And so the wishful thinking, again, being, "As long as this and this and this happen, I'm good." Right?   Tony Mauro: You're right.   Marc: Well, you can't control this and this and this, so get a good strategy to hopefully retire in any economy. And maybe what you were talking about there a little bit, right, is sequence of risk return, right? Or sequence of return risk. Because if you literally retired in the down market, and it lasted for a couple years, obviously those accounts are going smaller, and you're pulling money out. That's what you're talking about, right?   Tony Mauro: That's what I'm talking about. As I always preach to people, I can't control what the market does. Nobody can. All we can do is make sure we're invested in the right things that, over time and depending on what your plan is, that's going to get you to where you need to go. But I definitely would not, say somebody comes in and says that to me, it's like, "Whoa, we got to change your thinking real fast here because that's going to get you into some trouble."   Marc: Yeah. Yeah, for sure. All right, so let's see. What else have we got on this list? Well, okay, let's piggyback off of that one. "Well, if things go south, I'll just keep working." The wishful thinking of, "Well, if it all goes to crap in a hand basket, I'll just go back to work." Maybe you can, but maybe you can't. Your body may not let you, your company may not want you, or you may not be able to make the kind of living that you thought you were going to make.   Tony Mauro: I agree with all of those, and what I see is the biggest ones are my health or abilities won't allow me to do that. When I was working, things were different. I don't have that skill set that a lot of people were looking for, but I do see a lot of it, even though nobody admits it, is age discrimination. Nobody wants to hire.   Marc: Right? Isn't it funny?   Tony Mauro: Yeah. A 70-year-old.   Marc: But it's easy to go, "Well, we just don't have anything." Or whatever. Even if you're sharp as a tack. Yeah, it definitely exists out there.   Tony Mauro: There's a car dealer here that the drivers that drive me back for when I have my car.   Marc: Oh, like the shuttle service thing?   Tony Mauro: Yeah. They were telling me that they are driving for this company because the last company said they have a mandatory retirement age of 70. We don't want you if you're 70 or above and you have to get out.   Marc: I wonder if that's an insurance thing because we don't want to have to cover the insurance that it's going to cost in case you have a driving, an accident.   Tony Mauro: In case you wreck. Yeah.   Marc: Because your response isn't fast enough. It's not as fast as it used to be, your motor skills or whatever. So yeah, it's a fine line. So they think they can cry safety for the public, but it's also bordering on age discrimination. So we're in a weird world.   Tony Mauro: It really is. It's very weird.   Marc: We're in a strange world.   Tony Mauro: I do see that though.   Marc: No, for sure.   Tony Mauro: If a 70-year-old-   Marc: Airline pilots. I've got a client that does a podcast, Tony, he's an airline pilot, and they have mandatory retirement. I think it's 65. They can't be in the skies anymore, right?   Tony Mauro: Yeah. For controllers it's 56.   Marc: Oh, there you go.   Tony Mauro: The only reason I know that is because I do fly, private pilot, that is, and it's funny because you're kind of in tune with all that and the whole air traffic control issues that they've got, and I don't think they pay those people enough.   And then of course they have a limited shelf life because they make them get out so early.   Marc: I guarantee it's insurance-based. What do you want to bet that some lawyers and some insurance people somewhere said, "Let's just reduce our risk mitigation here?"   Tony Mauro: Risk, yeah, very well could be.   Marc: Yeah. Interesting. So yeah, I mean, again, back to the topic, wishful thinking. I'll just go back to work is not a great strategy either. So could you? Maybe, but don't plan on it. And right along with that, Tony, is maybe we want to make this the last one is, "My kids will cover it. My kids will help me if it's bad." And a lot of us get in that situation. I mean, I help my mom. She's not living the retirement she wanted, but it was not a conversation we ever had. And she's in this position not by, well, sort of by choice, but at the same time, don't just assume that your kids are going to go, "Yeah, no problem. I'm going to help you out." Because they're probably raising their family at that point, and they may want to, but they may not be able to actually do much more than maybe drive you around or something like that.   Tony Mauro: Yes, I agree. I'm trying to think when you were talking about it, if I've had any clients that actually have ever said that my kids are going to help me. A lot of them think they're going to help them, but nobody's ever come out and said, "Yeah, my kid, he's just doing everything for me." I do think that's very wishful thinking, and I think that's a lot of burden to throw on a child.   Marc: I'm glad you said that. That's a funny, because when we do those surveys to potential retirees, what's the top five things? Almost always one of the top five, Tony, and I'm sure you'll agree with this, is, "I don't want to be a burden on my family."   Tony Mauro: Exactly. That's right up there.   Marc: Yet these wishful thinking things, folks, that we're talking about this week also come from retirees. These are actual literal sentences from retirees that we surveyed. So to say, on the one hand, I don't want to be a burden on my kids, but then on the other hand, well, if all else fails, the kids will help me. It's a weird dichotomy. So just get a strategy so that you don't have to put them in that spot.   Tony Mauro: Absolutely. And a plan will certainly help you with that. And so will certain types of insurance and understanding some of that toward the end of life, so you have options so that you're not in that situation. And then if you wishful think that and the kids aren't able to help you, well now you're in a real pickle because you've got all kinds of not probably too desirable ways to live and take it around and it's bad.   Marc: The options are not super, super fantastic. So look, wishful thinking, again, good stuff can be there, but if you don't put it into practice or if you don't put a backup plan or a strategy in practice and then the wishful thinking is the backup plan, then you're maybe setting yourself up. And a lot of these, again, are kind of normal. There's a lot of other ones. We won't spend a lot of time on it because they're very similar, but it's, "I'll be in the lower tax bracket." Or, "I'll spend less money when I retire." Or, "The kids will help me." Or, "I'll just keep working." Or, "I'll sell the house and downsize." Right? That's another one that happens sometimes. Why go with the worst case scenario if this happens wishful thinking instead of getting a good strategy into plan together and saying, "Okay, let's run some stress test scenarios if this happens, and then let's run some if that happens." And that's what you guys are doing when you're starting to build these plans.   Tony Mauro: That is, and it's much better to be in that situation rather than, "Well, if this, this, and this happens, I'll be okay." I mean, I don't like to have three or four things that have to happen and everything line up for you to be okay. We want to make sure you're okay if nothing happens. And then if some of those things do happen, that's great.   Marc: Well, and you run those scenarios. So let's say you run the scenario and, "Mr. and Mrs. Smith, it looks like, based on this, here's what you're going to need to make this goal happen." Maybe that's working a little longer. Maybe that's saving a little more. So you have all those options laid out. Or plan B is, "You do have enough, right? It is going to make it, but here's what happens if one spouse passes early." So you get all these different kinds of outlooks to structure your life around versus just hoping.   Tony Mauro: I agree. I agree 100% because again, relating it back to the real world, I've got some family that haven't done this, they haven't planned, and they're getting ready to retire, and they have a lot of these wishful thinkings going through their mind. I'm trying to set them straight saying, "You're planning on too much. You got too many things that have to go right." And we sat down, I told them the, well, it wasn't the truth that they wanted to hear, but it's the facts. And they're now, we're working to get some things in alignment according to a plan that they can handle and at least they know.   Marc: Yeah, that's good. And it happens, right? I mean, you're in the industry and you have family that doesn't listen or whatever or didn't listen for a while. So we all have that in walks of life, mechanics. It's like, "Oh, my wife's car's falling apart." And it's like, "Well, you're a mechanic." "Well, I don't have time to fix it, and she never listens to me." That kind of thing. So it happens in all walks of life.   But what do you need to do? You got to do the best things for yourself. And a lot of times that starts with sitting down, getting an analysis done, and looking at what it's going to cost you. Often it's not nearly as expensive as people think it is, and the reward and the risk reward ratio is much, much better. So if you need some help, get yourself some time with a qualified professional like Tony Mauro and his team at Tax Doctor Inc. Find them online at yourplanningpros.com. That is yourplanningpros.com.   But don't forget to subscribe to the podcast and share it with others who might benefit and enjoy the message as well. And that's Plan with the Taxman on Apple or Spotify or whatever podcasting app you like using. Again, Plan with the Taxman, with Tony Mauro. Tony, my friend, thanks for hanging out. Have yourself a great week. I'll talk to you a little bit later on this month.   Tony Mauro: All right. You do the same, and we'll talk to you next time.   Marc: We'll see you next time here on Plan with the Taxman.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Are you saving so much for retirement that it's squeezing your life today? In this episode, we're answering a smart viewer question about finding the right balance between preparing for the future and living fully in the present.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc: Are you saving so much for retirement that it's squeezing the life today out of you? And in this episode, we're going to answer an interesting question from a listener about the right balance between future savings and living in the moment. Am I saving too much for retirement? Let's find out this week here on Plan With The Tax Man.   Hey, everybody. Welcome into the podcast. Thanks for hanging out with Tony and myself as we talk, investing, finance and retirement. Of course, Tony is a CPA, CFP, and an EA of 30 plus years and the big kahuna over there at Tax Doctor Inc. And if you guys got questions and need some help, reach out to him at yourplanningpros.com before you take any action from something, from our podcast or any others, you always want to check with a qualified professional with the experience to help you get to and through retirement. And that is Tony. So yourplanningpros.com or 844-707-7381. Tony, my friend, is there such a thing as saving too much for retirement? And let's talk about it. How you doing?   Tony Mauro: I'm doing good. It's post tax season and I figured this would be a good topic because we don't hear this that much, but it is possible to be doing too much of this.   Marc: Okay.   Tony Mauro: And normally we're always talking about saving more, saving more.   Marc: Right. Yeah, yeah. That's why I thought it was kind of an interesting question. So here's the question from the listener. He says, "My wife and I bring in about $200,000 a year." Very nice. I'm assuming obviously that's combined, wife and I.   Tony Mauro: Yeah.   Marc: And he says, "We max out our two 401Ks and HSA, a 457B and still put some into brokerage accounts." Very cool. Right? He's doing a very good job.   Tony Mauro: That's good.   Marc: Yeah.   Tony Mauro: Yeah.   Marc: He said, "Yet I still feel like, honestly, sometimes we live paycheck to paycheck." Very interesting. "We also are not living in our dream home, just FYI, because I've prioritized retirement savings versus a bigger chunk down for a down payment or a mortgage or whatever. So my question is are we saving too much for retirement? I feel like it would be nice to live a little bit more in the moment." So that's the question, Tony. So, I mean, the first thing that jumps out to me is does this gentleman have a plan because... or is because we've been kind of beat up in the head to say save, save, save, like you just said a minute ago... Has he been doing all that without really truly knowing what his numbers look like?   Tony Mauro: Exactly. And that's what comes to my mind, is if you're asking this question, obviously you must not have a plan other than-   Marc: Save.   Tony Mauro: ... the only plan is I'm just saving, saving, saving.   Marc: Right, right.   Tony Mauro: And I think if we zoom out a little bit, the thing is, well, there's not a whole lot of risk for over-saving, but there can be some because you're feeling like you're feeling.   Marc: Yeah.   Tony Mauro: In other words, you feel like you're not living enough, you're making maybe too many sacrifices. And so it's not maybe a financial risk, but it's an emotional one for sure.   Marc: Right. Okay. Yeah, yeah. That makes sense. Well, we've got this... and let me know what you think about this. So I guess the question for the listener would be how can you tell, right? Without coming in, sitting down with a qualified professional, obviously running the numbers. That's certainly going to be the easiest way to do it.   Tony Mauro: Right.   Marc: But how can you tell if you're ahead of schedule financially? What do you think about those online benchmarks and online things that you can use? Like we've got one from T. Rowe Price here. We'll throw a link into the show notes description this week if people want to go check that out for themselves. Just click on the link. But it gives you that... How much do you have from your salary going here and there and that kind of stuff. Do those things, are they helpful?   Tony Mauro: I think they're helpful. I mean, if somebody's just asking me off the cuff, I point them to those types of things just as a benchmark.   Marc: Okay.   Tony Mauro: I always tell them, keep in mind benchmark means benchmark and if you really want to narrow it down for you specifically, that's when I think you need a full-fledged plan because I think that's what's really going to help you the most, but at least it can get you started.   Marc: Yeah, I mean, it's like the back of the napkin math when you're doing how much withdrawal rate and that kind of thing. It gets you kind of a launching pad. And, Tony, you and I are about the same age. We heard growing up we needed to put 10% away in order to be ready for retirement. Generations now. I mean, my daughter, she's 28, so she's being told 15% and even any kids that are like 20 now are being told maybe 20%. Right?   Tony Mauro: Right. Yeah.   Marc: So how do you kind of balance that paycheck to paycheck feeling in life? I mean, it's tough.   Tony Mauro: It is tough. And that's why having a moving and active, live, plan is going to help you the most because everybody's going to be different. I think that depending on what you want, long term, is going to determine that percentage.   Marc: Right.   Tony Mauro: And I think just throw a blanket out there, it's probably a little too presumptuous there. But I think with the younger people, 20% seems awfully strong to me.   Marc: Well, it seems tough to do, right?   Tony Mauro: Yeah. And very tough to do for the young people if we told them that, they'd really have to... I mean they would definitely be feeling like this if they were trying to save 25%, something like that.   Marc: Right. Yeah. And live. Right? Of course.   Tony Mauro: And live, yeah.   Marc: Yeah. Well, all right, so for the listener here... So he's got a lot coming in, he's putting a bunch into different accounts. Right? If you're saving too aggressively, right? I mean, given into the fact that we take a plan... Let's say this person came in, you ran the numbers for them, okay? And we'll try to put some context to this. And you could certainly see that they were on target to be just fine based on the numbers he's already put away. How would you then counsel things. All right, let's kind of back this down? Or do we want to start looking at tax efficiency because we've saved so much or where would we go?   Tony Mauro: Well, where we would start would be what their end game is and what the number looks like for them. And then start working backwards and use the planning software to basically show them, okay, well you're already going to hit what you just told me and then some.   Marc: Right.   Tony Mauro: So if that's still going to be your mark, let's start talking about some of your other goals that you feel like you've missed and let's prioritize those and let's start backing off the savings a little bit and put some towards those.   Marc: When you say number, Tony, do you mean income? Do you mean what their assets would generate monthly for an income?   Tony Mauro: That's what I mean there, yeah.   Marc: Okay. Yeah.   Tony Mauro: I mean, we'll start with what do you want monthly when you retire and then based on what you have in your nest egg now and forecast out what it's going to grow to...   Marc: It could generate that, right, okay.   Tony Mauro: It could generate that easy.   Marc: Right.   Tony Mauro: And then start going from there. And I would actually at least suggest to them if these other goals are important to you, you already know you're going to be okay when you hit the distribution stage in retirement. Let's start knocking some of these things out a little bit.   Marc: Yeah.   Tony Mauro: Because the thing I always point to... And I'm going through it right now with my sister-in-law who just retired at 65. And she's got a lot of health problems and she just had a recent bout in the hospital on dialysis, on a breathing machine.   Marc: Oh no.   Tony Mauro: Almost to a point where you don't know how long, of course, you're going to live is where I'm going with that.   Marc: Right.   Tony Mauro: And if you save it all to the end and something does happen like that, or worse, you pass away, what was it really all for? So I'm one of those guys that I like to balance, hey, you got to live a little now and take care of the future as well. But I think some people go the other way and this guy sounds like he's gone maybe too far the other way because he's asking a lot of questions   Marc: Yeah and he's obviously interested in and maybe living a little bit more. And so that's kind of where I wonder. It's like, okay, well how do we go about breaking that down? Now, granted, obviously coming in and running the numbers, but for the sake of the podcast, sharing that with other folks, how do we go about accomplishing that? So do some analysis. Right? So I guess what you say. What's your current income level and then what's your current spending level? And is that where you want to be in retirement as well? Let's say it's $10,000 a month, just for an easy number.   Tony Mauro: Yeah.   Marc: Well, does what you've generated create $10,000 worth a month in income, which you were just talking about. And then of course people... We hear that, well, you're only going to need about 80% or 85% in retirement, but if you don't want to go backwards in lifestyle and you feel like you've not been living enough anyway, then I would say you want to keep it higher, correct?   Tony Mauro: High. Yeah. I'd keep it at 100%.   Marc: Okay. Yeah.   Tony Mauro: And just keep it high and we can always adjust it downward, but I find that most of the time... And we've talked about it before, that your expenses and living don't go down quite as much as you thought when you were young and dreaming about it. When you get there, you don't want to back that off too much.   Marc: No, for sure. So determine if you're saving too aggressively, right? Look at your rates, look at some of the things that you're bringing in. Again, that monthly income. What's it generating. Then start looking at... I don't know, maybe that's where you can use some of the automation, right? If this person is still working, then maybe you can back down contributions-   Tony Mauro: Back down.   Marc: ... or does that make sense because you want a dollar cost average still too? Right? So it's an interesting math question.   Tony Mauro: It's an interesting math question. And there's also got to throw in taxes there because obviously if you back down some of this pre-tax stuff, if he's got it. His taxes are going to go up a little bit. So it's a delicate balancing act, but I think it can be done in a tax efficient manner with some help and planning.   Marc: So if you were going through and trying to help this person, they came into the office, the first thing you would do is start running the numbers, put all these things in play into your software that he's got because he's got a lot, which is very cool.   Tony Mauro: Yeah.   Marc: And then see where they're at and then what? Tax efficiency would be next, and then what's after tax efficiency? Maybe the legacy side or what?   Tony Mauro: I would say after the tax efficiency, I would ask them about the legacy side, what their plans are there and if we're still in good shape with what they want to do there. And then I would make them list their goals of some of the things they want to do between now and the time they do retire and let's start tax efficiently trying to make that happen.   Marc: Well, he mentions the dream home. He mentions the dream home. So that could be interesting too, right? So it's like is that still high on the list?   Tony Mauro: Right.   Marc: Let's say this person is in great shape, they have saved maybe over amount to what their goal, their target, was. Not that, I guess, there's such thing as being over. But they've hit their target, but they kind of want to take the dream home into account. So, again, you got to factor that in, right? Because we know that pricing is still high for homes. Interest rates are higher, what are you going to get for the old one? What's it going to cost you for the new one? And, again, this is where that whole, complete, financial analysis is really going to come into play.   Tony Mauro: It really will. I don't know anything about this couple, but I would ask them strongly, depending on what their age is, about that dream home unit. Is that really high on the list? Because that that's a large, large expenditure and maybe the home you're in is fine, especially if you own it. And maybe you want to take that money and do something else with that. But who knows. They might be dead set on something like that and then it's up to us try to help them make it work.   Marc: Right, yeah. So plugging in a lot of numbers, doing the X's and O's trying to get it all there. So I guess to kind of circle back to the whole initial thing, can you save too much for retirement? I mean, it's probably not... I feel like fundamentally you got to say no, right? Because if you save too much, all you're going to be able to do is either enjoy yourself more in retirement or leave a nicer legacy to your kids, right?   Tony Mauro: Yes. Yeah. And the true answer is no. I don't think you can ever save too much. I do think though that what we've just talked about and with him, he's feeling it... is don't neglect enjoying life a little bit along the way.   Marc: Yeah, yeah.   Tony Mauro: And that's where a plan is going to come in for sure because he's just -   Marc: It was a while back, Tony, we did a... God, it's been a while. We did a personality type podcast and we talked a little bit about, I can't remember all of them, but one of them was the miser, right?   Tony Mauro: Yeah, yeah.   Marc: Not saying that this person's a straight-up scrooge or a miser, but the person that just got into such a groove and a rhythm of saving and being so aggressive that they forgot to enjoy life. Right? And I don't know that this person's that far, but he kind of framed his question that way. How do you work with people like that? How do you help them kind of see that it's okay to spend some of that money?   Tony Mauro: I think the biggest thing for us is showing them, in real numbers, that they are going to be okay so they can wrap their head around it. Because, for many of them, depending on how they grew up and were raised, it's tough for them to change that. And it takes a little work and it takes some real discipline going the other way to spend some money. And most of my clients, it seems like, especially on the distribution stage, when they get older, they tend to automatically start wanting to not spend as much. And so if you're already there and then you go into retirement, boy, I would hope you wouldn't do that because you're even going to be worse off than you are now.   Marc: Yeah.   Tony Mauro: And, in other words, you're going to have all this money and you don't want to even go enjoy a penny of it.   Marc: Yeah.   Tony Mauro: Defeats the whole purpose of planning.   Marc: Well, I mean, this is really where the black and white helps. The old rubber meets the road kind of thing, right?   Tony Mauro: Yeah.   Marc: Because no matter what your emotional mindset is, if we see the data, then our brain sometimes goes, okay, all right, now, all right, I see this now all laid out. Tony, you could run a stress test for this individual and go, okay, based on what you've saved, based on the goals we've talked about, the things you want to accomplish, this is when you would roughly expect to run out of money, age 100 or whatever.   Tony Mauro: Yeah. Yeah.   Marc: And then that gives, I think, that peace of mind to people to go all right. All right, maybe I can loosen up the purse strings now a little bit and go enjoy myself.   Tony Mauro: Yeah. At least let them know that. And if they choose-   Marc: Not to. Right. Yeah.   Tony Mauro: ... not to, then that's their decision at the end of the day.   Marc: The good thing too is the spouse... He mentioned his spouse, obviously, you got the other person who also gets to see it and go, wait a minute now. Stop being so tight.   Tony Mauro: Yeah. Right.   Marc: I want to go have some fun too, or whatever.   Tony Mauro: Yeah. Yeah. It's fun with when you have the spouses in there because, yeah, you might have a different personality there or somebody that says, I've worked all my life and now I want to go enjoy some things before something happens.   Marc: Yeah. Yeah, don't be such a penny pincher or whatever. And again, not that any of that is wrong. Everybody's going to be different. Just based on this person's question, he seems like he's realizing, Hey, we've done a really good job saving, but I'd like to kind of enjoy life a little bit more. The thing that worried me a little bit most was I feel like I'm living paycheck to paycheck and it's like you're making a good salary. So, yeah, I mean, run the numbers. Look at what you're spending each month. Look at what you're saving because, I mean, there could be some expenditures that are out of control too, right? And it's not hard to do in today's world, right? It seems like Amazon shows up at everybody's house every other day.   Tony Mauro: Yeah. Right. I just ordered some stuff before this podcast.   Marc: Well, there you go. Proved my point.   Tony Mauro: Yeah. Yep. Yep.   Marc: So run the numbers. Come in, sit down, have a conversation with a qualified professional. Make sure you're talking with somebody like Tony. Again, he's a CPA and a CFP and an EA with 30 plus years of experience. So he's looking at the tax side of things, he's looking at the investment side of things, he's looking at the whole puzzle piece. And if you need some help, reach out to him. Yourplanningpros.com. That's yourplanningpros.com for that complimentary consultation and review. And don't forget to subscribe to us on whatever podcasting app you enjoy using. Apple, Spotify, and the like. Tony, thanks for hanging out, my friend. Always appreciate you.   Tony Mauro: All right. We'll see you next time.   Marc: We'll see you on the next episode of Plan With The Tax Man with Tony Mauro from Tax Doctor Inc.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

April Fool's Day is all about jokes and pranks, but when it comes to retirement planning, getting fooled can cost you real money. Today, we're uncovering the beliefs that fool retirees and pre-retirees into making bad financial moves.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: It's time once again for another edition of Plan With The Tax Man. And April Fool's Day is around us, all about the jokes and the pranks, but when it comes to retirement strategies, we want to make sure we don't get fooled in a way that can cost us any real money. So let's talk about that this week here on the show.   What's going on everybody? Welcome into the podcast. This is Plan With The Tax Man, with Tony Mauro from Tax Doctor Inc. Serving folks all around the Iowa area. If you've got some questions, some concerns, need some help, please check him out and go talk with a qualified professional like Tony online. You can get some time on this calendar@yourplanningpros.com. That's yourplanningpros.com, or you can call him at 844-707-7381. We'll have information of the podcast if you'd like to click on those as well. Tony's got 30 years of experience helping people get to and through retirement, and a great resource for you to tap into. So, Tony, it is April Fool's Day-ish at the time we're dropping this. I think we're dropping this like maybe a few days beforehand, but are you a big prankster?   Tony Mauro: I'm a huge prankster.   Speaker 1: Are you?   Tony Mauro: It's my second favorite holiday, yeah.   Speaker 1: Oh, okay. All right. So does your wife get tired of it?   Tony Mauro: My wife gets tired of it, my son, my dad, everybody.   Speaker 1: Okay.   Tony Mauro: But they play them on me too, so yeah, we have a lot of fun with April Fools.   Speaker 1: Good. That's good. Yeah, my dad was pretty bad about it when he was with us. He was always pulling something on his family members, so it was like, all right, now you had to be on guard whenever it rolled around.   Tony Mauro: Absolutely.   Speaker 1: You knew he was up to something. But let's talk about a few categories here from a financial standpoint where we don't want to get fooled, Tony. We want to make sure, and look, it's super easy right now. Right. I mean, between the news headlines, social media, the polarization of people, whether you're left or right, you like the administration, you don't like the administration. Everybody's got an opinion every six seconds of the day. Right. And so it's very, very easy to see a bunch of stuff that maybe kind of gets you all worked up. Right.   So we want to make sure that we're not just stepping in something just because we're having a visceral reaction to some sort of media bombardment or whatever. So let's start with the high returns since obviously right now, Tony, we had a choppy March, right? So the markets were choppy. I think it's easy when we find it, we all love it when it's high, right? So we all love the market when it's doing well, and we've had a pretty good market for, let's be honest, we haven't really had a prolonged downturn, right? Since 08, 09. If you think about it, we're closing in on 20 years since we've had a sustained prolonged downturn.   Now we've had blips, we've had the COVID downturn, and we had different things. 22 was rough for a little bit as well, but it's not been sustained more than a couple of months, right? So I think people that are kind of get lulled into the, Hey, the market's beating you up, let's get you into this product that's got guaranteed high returns. Be careful of that, right? Make sure you're really doing your diligence and reading the fine print.   Tony Mauro: Yeah, you do have to have that, because it is, and I always know when maybe the markets are possibly too high, when everybody, especially people that are just tax clients, aren't wealth management clients are saying, "What do you think about this stock? What do you think about that stock?"   Speaker 1: Right.   Tony Mauro: And,-   Speaker 1: Or should I get into an annuity or whatever?   Tony Mauro: Yeah.   Speaker 1: Yeah.   Tony Mauro: All that kind of stuff, because they think that because where we've been for the last 20 or so years, returns are easy and there's some foolishness to that, I would say.   Speaker 1: Some fool, yeah, fool's goal, I think that's a good way. Yeah.   Tony Mauro: Because you got to look at it this way. High returns do come with volatility and some risk. And so whether it's in a stock or you're locking yourself up in an annuity, which is a whole different type of product, then you certainly got to understand what those risks are and have that explained to you. And if that's not your appetite for obtaining that return, which we always work off, we're trying to get you the best return based on how you want to get to point B, so to speak, with the least amount of volatility and the least amount of potential tax consequences. Now that may not be, and even come close to say S&P 500 returns, but for you that might be good, but for somebody else,-   Speaker 1: Good point.   Tony Mauro: It might not be.   Speaker 1: Yeah.   Tony Mauro: But don't just say, well, I want the highest return out there because there's always something new. Nobody, in my opinion, can accurately predict what the market is going to do tomorrow in the short term. Now, a lot of them, obviously, it's pretty easy to say, well, over the long term, that the market's the place to be.   Speaker 1: Oh, the market always comes back, right? I just saw this earlier today. We were just chatting about it, you and I, before we jumped on the podcast, and it was like, people are freaking out. "Oh, I'm losing my retirement because of this 10% correction we've had in March." And it's like, okay, first of all, and the immediate comment from someone is, "Well, don't worry. The market comes back." And they freak out and they go, "Well, I don't have time to wait for it to come back." Well, if you didn't have a strategy in place and you were planning on retiring and a 10% correction crippled you, then you weren't in good shape to begin with anyway.   Tony Mauro: No.   Speaker 1: Right.   Tony Mauro: And you shouldn't have been in the market if you're ready to retire or you should,-   Speaker 1: Not at 10%. Yeah. Yeah.   Tony Mauro: Not there. So it is,-   Speaker 1: Exactly.   Tony Mauro: We constantly battle that with tempering and making people understand and get their whole plan in front of them, just so they're not so focused on what's going on today,-   Speaker 1: Right. Right. Yep.   Tony Mauro: In the news.   Speaker 1: Yep. Which is the point of this podcast this week is, the April Fools, not that it's April Fools that they're pulling a prank, so to speak, but it's just kind of being fooled into things because of the constant bombardment of the media. You and I talked on the last podcast that in the course of the same day that we were chatting, the news cycle ran from the sky is falling earlier in the morning with the market to, oh, the outlook is looking pretty good because the inflation numbers came in and were down a half a point or a point.   Tony Mauro: Yeah.   Speaker 1: So they just run with whatever's going to get them eyeballs. So just make sure we're, I think we all know that, but whenever we start to panic a little bit, that's when that little devil on our shoulder kind of creeps up and taps us and says, Hey, be worried. So let's talk about the next one, which is the tax time bomb. Getting fooled into underestimating taxes on your account. And here's the angle I wanted to take on this, Tony. So again, regardless of what your political slant is, if you find yourself, and here's, let me set this up. It's going to take a second, folks, but I think it'll, hopefully it'll make sense.   I'm one of those people, Tony, that my personal health and the family history says I'm going to probably pass away young, right, in my 70s. Now I could totally plan to liquidate and blow through all my money and have big fun and spend it all by 72 when I think I'm going to croak. But if I'm wrong, right, I'm going to be screwed. I'm going to be screwed, right, because I'm not going to have anything. Well, if you're right now, if you're all excited about the no tax on social security, no tax on tips or the conversation about abolishing the IRS or getting away with, great. Look, if that happens and they get rid, I think I'm sure we'll all be dancing in the street if they get rid of the IRS.   However, if they don't, don't you think you should have a strategy for dealing with the tax time bomb that you're probably sitting on, right? And that's my point, right? If you've got a million dollars sitting in a 401K, don't just kind of like go fool's gold and think, Hey, Trump's going to eliminate all the taxes and Bob's your uncle and you're going to get to keep all that money. Be smart in the event that you still have to pay your RMDs or whatever.   Tony Mauro: And I mean, you look back through all of history. Now, keep in mind what I tell people when they start talking like this is, tell me where you think that this, the biggest arm, the only arm almost for collecting the accounts receivable for the US government is, which is the IRS. They're going to go away. How do you think the government will function? Now, maybe they'll, like you said, maybe they'll come up with something over time.   Speaker 1: Sure.   Tony Mauro: And,-   Speaker 1: Maybe the tariffs will be the end of the solution, whatever, right?   Tony Mauro: Maybe it will.   Speaker 1: Right.   Tony Mauro: But history points to, it's probably not. And many, many of us, I can't remember how many trillions is probably in the 401Ks right now, but we have,-   Speaker 1: That's a lot. Yeah.   Tony Mauro: We all have an IOU.   Speaker 1: Oh, yeah. It's almost 40 trillion, Tony. I'm glad you mentioned that.   Tony Mauro: It's 40 trillion?   Speaker 1: Yeah. Because the debt's 36 trillion, and they're always talking about the target that is, the retirement accounts is about 40 trillion out there.   Tony Mauro: We got 40 trillion. It's all in traditional 401Ks and of course,-   Speaker 1: A lot of tax money.   Tony Mauro: A lot of tax money. The IRS wants it. We all have an IOU to Uncle Sam with that money. And they know that and they want pieces of it. Hence, they're changing rules as we speak, that nobody seems to pay attention to when somebody dies and you inherit some of this stuff because they want their money.   Speaker 1: Yeah. Oh, yeah. And look, regardless of your stance, if DOGE does a good job and gets rid of some of the debt and some of the spending and our national debt's able to come down, maybe we don't have to tax ourselves into oblivion. Maybe that's the upside, right? Instead of going, we're in historically low tax rates, right, with the TCJA.   Tony Mauro: Just going to say that. Yeah.   Speaker 1: And at the time we're here taping this, Tony, we still don't know if that's going to get extended or not, right? Maybe it does, that's the prevailing wind, but maybe it does, maybe it doesn't. But at least if nothing else, if it does, then we don't have to necessarily go up in taxes. But you're still going to have to have a strategy for being tax efficient, because that's a big chunk of your retirement money.   Tony Mauro: And that's what we focus on, is trying to be as tax efficient as possible, especially from the tax angle side, from being tax people that we want to make sure that they're not getting any more than they have to.   Speaker 1: Right.   Tony Mauro: And so you have to, especially on the distribution stage, really be strategic about it and make sure you're following the rules and that you're not overpaying just because you don't know any better. And I think that's really the gist of it. And I would also encourage anybody go out and google the history of the tax rates. And you're right, we're at historically low tax rates compared to where we were just even in the 80s.   Speaker 1: Oh, yeah.   Tony Mauro: And so,-   Speaker 1: Well, even during the prior administration. If the TCJA expires, right, we're going back to what it was under Obama administration tax code. So even that goes up a little bit, so.   Tony Mauro: But that goes up. Now one could say, well the way to fix all this is just raise taxes. Well,-   Speaker 1: And nobody wants, I mean, look how we whine about,-   Tony Mauro: Nobody's going to do it.   Speaker 1: Yeah. I mean, we get all bent out of shape about the stock market dropping 10%. You want to pay 10% more in taxes? Of course not.   Tony Mauro: Yeah. No. Nobody wants that. Nobody politically seems to want that. And of course, if you can't, it's like in business, if you can't control your spending, it doesn't matter how much you bring in.   Speaker 1: Yep. That's what,-   Tony Mauro: Right. I mean,-   Speaker 1: Right.   Tony Mauro: You got to do something.   Speaker 1: Isn't it wild where we're at as a society? We all know we got to control spending, yet when you get somebody in there that starts doing it, they start screaming foul and going, why are you cutting spending? It's like, because we have to. We're $36 trillion in debt. That's crazy.   Tony Mauro: That whole thing is,-   Speaker 1: We're in the goofiest time period.   Tony Mauro: Hours.   Speaker 1: Yeah.   Tony Mauro: Yeah. It's just crazy. But we have to, as advisors and as the public, we got to work with what we have.   Speaker 1: Right. You got to play by the rules. Yep.   Tony Mauro: We got to make it try to work for us and I think that's importance of planning.   Speaker 1: Yeah. I've said forever and a day, that it's their chessboard. We have to play by the functioning rules of the chess piece, right? If we're that chess piece is able to move one step at a time, then that's all we can do, right? So,-   Tony Mauro: We're done.   Speaker 1: We have to do those different pieces. So again, no matter what your political slant is, the point of this is you don't want to kind of fall for any one thing, one side or the other. You want to have a good strategy in the event that it does come through, or the event that it doesn't come through. Because you want to make sure that you can hopefully retire as efficiently as possible in any administration or any economy or whatever the case might be. So final one, we'll wrap it up this week just on a couple of things to be careful with, because we knew these were going to be some big ticket items Tony, is Medicare misunderstanding.   We'll switch gears and go to this one. Especially for the folks that are getting close to retirement, their first time stepping into it. My brother just got to 65. He's trying to get his bearings with understanding Medicare and the different things that it does. My mom's 80, in her mid 80s and she's quite used to it, so she's trying to school him on some things, but there's a lot of miscommunication out there on what it covers and what it doesn't.   Tony Mauro: There's tons of it and it's very complex. And then you add on to the top of it the federal government bureaucracy, and it makes it kind of a nightmare for a lot of retirees. But I can tell you this, it certainly doesn't, do not be fooled, it does not cover everything in retirement.   Speaker 1: Correct. Right.   Tony Mauro: You've got to make sure that you have some of these gaps and things covered.   Speaker 1: Yeah.   Tony Mauro: And that's where what I do is I have a Medicare specialist that I consult with for clients because I can't keep up on all those rules and he helps me with clients. And now of course, if he ends up selling them some insurance they need, well, obviously that's how he gets paid. But nevertheless, he really has the ins and outs of what it does and doesn't cover. And then also, okay, if something's not covered, are you willing to spend X to get it covered? And,-   Speaker 1: Good point.   Tony Mauro: Like everything else, you got to make a decision. Do you want to keep that as a gap and take that risk, or is that risk too big? But boy, Medicare, I mean, it serves a good base, but it does not cover everything and you really need to be on that.   Speaker 1: Yeah. Even within the same category too. And don't forget that they changed the way it's set up and providers can shift too. Like my mom recently, I think in the last couple of years she's gone through three different dentists because something happens with the program and the dentist she was going to says, "Well, we no longer accept it." Right. So, which is, I didn't think you could do that, but apparently you can. So different places can accept different things at different levels. So you have to kind of see who's in network, right, and who's out, all that kind of stuff.   Tony Mauro: My dad's like that. And like I say, he's 83 and he is over insured in this area because he like buys everything just because he doesn't want any gaps. And I think he, we tried to get him not to do that and because he's actually kind of wasting a little money.   Speaker 1: Sure. Sure.   Tony Mauro: But sometimes it does work in his favor.   Speaker 1: Makes him happy, right? So,-   Tony Mauro: Makes him happy.   Speaker 1: He walks in and he's covered, I guess, so.   Tony Mauro: He's covered. Yeah, I mean, he's got coverage, but to your point, sometimes it changes and then he sees a lot of different doctors and whatnot, not because he wants to, because like the plan change covered and they say, "Nope, you got to go over here now."   Speaker 1: Yeah, exactly. She sees the same thing. So a lot of misunderstandings when it comes to Medicare as well. So just make sure that you're working with some professionals who can help you. Most advisors, offices, if they don't have a Medicare person on staff, they usually have someone they refer people out to so they can kind of, especially someone who does this in and out every day, they kind of know the nitty-gritty a little bit better. So if you need some help with that, as always, make sure you're reaching or any of the stuff that we talk about, make sure that you're talking with a qualified pro like Tony and his team at Tax Doctor Inc. You can find them online at yourplanningpros.com. That is yourplanningpros.com.   Don't forget to subscribe to us on Apple or Spotify here at Plan With The Tax Man. Simply type the name of the podcast into the search box. You can find it that way. Or just go to the website, make it easy on yourself, yourplanningpros.com. We'll have links in the descriptions below. And as always, we appreciate your time. Tony, thanks for hanging out my friend. And don't be too hard on folks when you pull some pranks on them in April.   Tony Mauro: Oh, no. No, I'll just get my family and we'll see what happens. I'll let you know on the next podcast.   Speaker 1: All right. Let me know how it goes. Yeah, my dad was crazy. He would pull something that got a little mean-spirited sometimes. It's like, all right, now you need to back it off a little bit there, bud. So have yourself a good one, folks. We'll see you next time here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Ever wonder what other people talk about with their financial advisors? Well, we're going to discuss that this week here on the podcast, from a new survey of nearly 400 experienced advisors and what they see in their offices, and we're going to share that with Tony and see how that relates to and what he thinks about it, compared to his practice.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: Ever wonder what other people talk about with their financial advisors? Well, we're going to discuss that this week here on the podcast, from a new survey of nearly 400 experienced advisors and what they see in their offices, and we're going to share that with Tony and see how that relates to and what he thinks about it, compared to his practice. Let's get into it here on Plan With The Tax Man. Hey, everybody, welcome into the podcast. Thanks for hanging out with Tony Mauro and myself, as we talk investing, finance, and retirement, and we're going to break down this new survey. Well, it's not new. It actually came out December of '24, Tony, but we're going to run through this from Financial Advisor Magazine. So they did this interesting survey, so I'm going to get your thoughts on this, and we'll break down some data and see what you think. How you doing, bud?   Tony Mauro: I've been doing good.   Speaker 1: Yeah?   Tony Mauro: Spring is here   Speaker 1: Yeah, baby,   Tony Mauro: As we're recording this, it's staying light a little longer. It's kind of nice.   Speaker 1: Yeah. I know, right? So, everybody's just constantly with the time change thing, "Keep it. Don't keep it. Keep it. Don't keep it." All I know is seven o'clock, it's still light outside, and I'm happy.   Tony Mauro: That's right. I like it. Yeah.   Speaker 1: And you and I were just chatting at the time we're taping this podcast. In my neck of the woods, it is quite warm today, so I am totally digging it, so hope everybody has a good day and a good week. And don't forget to subscribe to us on whatever podcasting app you like using, by the way. Apple or Spotify or whatever, you can just simply type in Plan With the Tax Man in the app, or of course you can find the information at yourplanningpros.com. All right, Tony. Are you familiar with Financial Advisor Magazine?   Tony Mauro: I read it regularly, so yeah, I'm familiar.   Speaker 1: Okay. Well, they've got this new survey in there, like I was saying earlier in the tease there. 400 experienced advisors revealed biggest concerns, challenges, things of that nature from their clients, and everybody had an average of 20 plus years in business, so these are folks that have been around for a little while, so they've seen some ups and downs, so I'm going to give you some data here. Let's just talk through it a little bit. So seeking out a financial professional. Advisors in the survey said about 52% of their clients are looking for financial advice when it comes to retirement strategies. The other 34%, I know that's not totally 100, but 34% said they were just looking for someone to build wealth with. So, does those numbers strike you as interesting at all?   Tony Mauro: For us, I'd say our numbers are a little more skewed towards most of our clients are coming to us for retirement planning. Whether they're in the accumulation stage, that would be the accumulation stage, but I mean, the distribution stage, obviously, they're already there, but most of our clients, I mean, 34% sounds high for just-   Speaker 1: For just for wealth, yeah.   Tony Mauro: ... Building wealth. We're just asking them, "Well, okay. If you want to build wealth, and the next question is for what?" Then, of course they always say retirement, so maybe I'm just beating that a little wrong.   Speaker 1: Right, right. Well, now, to be fair, this is a wide range of ages, so it's not just retirees only that answered these questions, so it could be some younger folks too, right? So, that would make sense if you're in your thirties or forties, and you're just looking for wealth building, but I think if you find yourself in a position where, even if you're in your forties or even in your early fifties, if you're not starting to feel the need to discuss other things than just the wealth building, are you maybe working with the right person, right?   Tony Mauro: That's correct, because as you get, especially in the forties and, of course, in the fifties, there's other questions about the end game, which is retirement, but there's many, many other things that we tend to ask them and they started thinking about some of these stuff, anything from taking social security, to healthcare costs, to long-term care costs, where they want to be and how do they feel about it? There is ways to protect yourself and do things, and then as long as we give them that information and we feel like we help them understand for some of these upcoming big decisions they've got to make.   Speaker 1: Yeah, like RMDs, right? I mean, they'll be coming down the pike. What are you going to do with them? What does it do to your taxable situation? All those little things that we talk about often here on the program, so interesting that, again, 52%, about half the people surveyed, were looking for someone with help for retirement planning, which is good. I think maybe those numbers should be a little bit higher, but again, depends on the age of the person answering. Now, we often hear about people are woefully under-prepared for their future life, their elderly selves, but in the survey, over half of the advisors said the average client they see has around $760,000 saved for retirement, so three quarters of a million bucks, that's not chump change, so that's kind of encouraging to hear that there's over half the people that come in to see financial pros like yourself, Tony, are in pretty good shape.   Tony Mauro: Yeah, they are. I mean, for us, I would say our assets average is probably around that, but I would say it's a little bit skewed on the top end, because some of our clients end up having a lot more than that. Normally though, if you take the bulk of our clients, have assets well below that. Mostly what we're seeing, again, we're here in Iowa, but anywhere from $100,000 to $400,000, $500,000 is what they have saved at the time we end up talking about it, but we are generating a lot of interest from young people that really don't have much, and they're just starting out in that wealth building stage, and we don't turn them away. We don't have minimums that we require for assets. We just try to set the expectations of, your planning is going to be a little different than somebody that might come, that has more, one, because of the complexity, and two, because of just that you don't need that much hands-on advice.   Speaker 1: And every demographic. I mean, there's different cities, different demographics, but I think just in general it's good to see that on average, again, people are a little bit better, in pretty good shape, and I think that's what winds up happening often, Tony, when people do come in to see financial pros like yourself, most of them come in, going, "I don't know if I have enough," or "I don't know if I can retire." Then, when the numbers are ran, more times than not, and I talk to advisors all across the country, hundreds of them, and they all say the same thing. More times than not, people are in better shape than they realize.   Tony Mauro: I think so. Depending on their situation, we find that too, when we start running the numbers is, depending on what your goals are, as long as they're not outlandish-   Speaker 1: Right, right.   Tony Mauro: ... You're better off than you think, especially when you put the numbers to it and explain it to them, because generally, nobody does. If they want to do more, then that's when the planning comes in.   Speaker 1: And a lot of people, I do think they feel like, "Well, I got to get to the million." We've talked about that millions of times, as it is, but depending on what your situation is, as a couple, maybe somebody's got a pension, maybe you've got a good numbers in social security, maybe a million doesn't need to happen. Maybe $700,000 does get it done or $500,000 or whatever, but on average, I think it's still pretty good encouraging to see that people's asset totals are a little bit better than I would've thought, so that's nice to see. Top concerns, check this out. Surveyed advisors say their top concern, no surprise here, Tony, 38% outliving their assets. That's always the top dog, right?   Tony Mauro: For us, yeah. Well, actually, for us, it's the second one here, the reliable income streams.   Speaker 1: Oh, really?   Tony Mauro: Yeah. Just for us. Then, it's outliving the assets, but those two are the top two by far.   Speaker 1: Well, it was 38% for outliving their assets. 31%, right? So, pretty close for the reliable income streams. I mean, they kind of go hand in hand, right?   Tony Mauro: They do, because whether you're young or in your forties or fifties, that's the most important thing, because it's the end game of, do you want to spend every cent of your retirement income? And if so, that's a crapshoot a little bit because, depending on what you do, you could outlive them, and then you could end up with not a whole lot, but most of our retirees want to make sure that their assets, they've worked so hard to accumulate, that they can get a reasonable income stream from them, and then it goes hand in hand with so they don't outlive their assets, because they want to live off the income mostly.   Speaker 1: Well, think about, we were just talking about the number, the pot of money, the $760,000 or the million or whatever you put your number at, and the big bucket pot is not as important as the income streams, right?   Tony Mauro: That's correct.   Speaker 1: So again, $500,000 might get it done if the income streams are there that you need, so if you're both got a pension, maybe both got good social security or something like that, then you probably don't need as much, again, back to that point.   Tony Mauro: Back to that point of it all working it together, which comes back to the financial plan and knowing what those numbers are. My wife just got her, here in Iowa they have IPERS, so guess it's the government funded pension, which she's been in for a long time. I went and ran my own numbers again the other day, just about, here's the number that she's going to have that's going to come in when she's X age, and then what I wanted to know was, "Well, I want the number that we both can't outlive," and then I factored that in with social security and what else we have and say, "Okay." I mean, it was just a quick math, because I do it all the time. We're still in good shape.   Speaker 1: Nice, nice.   Tony Mauro: We're going to hit our goals.   Speaker 1: Nice.   Tony Mauro: So, that's what the planning is all about, but most people don't have even that starting point, because they've never taken the time to figure it out, and I think that's where the planner can help out a lot.   Speaker 1: Yeah, I would agree. Yeah, definitely. Now, the next one on here, Tony, pretty interesting. Again, keep in mind this survey was done December of '24, but future stock market downturns was only 12.5% as a concern. Now, today, if that was done this week, that we're taping this podcast, it might be a little different; however, I do want to bring up at the time we're talking right this second, Tony, the market's been about down about 10%. You and I were just chatting about that at the time we're taping this podcast, but at the time, I just pulled it up while we're chatting, it's up right now 1% today on the news that the inflation numbers were a little bit better than expected.   They came in a little bit better, and it's funny because I was looking at the news articles. Just type in S&P 500, and you get the immediate news responses, right? And this morning it was all the sky is falling doom and gloom. Here, this afternoon, and this is just after one o'clock. We're taping this eastern time, and the inflation numbers came out, and now all the news stories are, "Outlook, much better. Market wraps. Three things that could spark a quick recovery." All the news is positive, so you got to be really careful with that stuff, right? Because they're just in it to kind of capitalize on whatever the thing at that moment happens to be.   Tony Mauro: It is. With the news, as fast as it comes out, that's exactly what it is. Really, a lot of this, of course, we try to explain to our clients, take the long-term view. This is very short-term.   Speaker 1: Yeah. 10% is a normal correction. If that's all it winds up being, right? That's not a big deal in the grand scheme, right?   Tony Mauro: It is, and I just sent out, basically, a chart that I just got out of one of the research magazines, and you've probably seen them before, but I just sent it out to all of our clients, just the old cost of timing the market, and they have a chart, January of 3 to now, "You just invested $10,000 and just left it in a S&P 500 ETF. You would have $64,000, and now if you missed the 60 best days in all those 10 years, you would actually have lost money and only have $4,205," so-   Speaker 1: It is a long-term proposition, right?   Tony Mauro: It's a long-term proposition. You miss the 10 best days, and you only have $29,000, so you can't afford to try to say, "The market's coming to an end. Let's get out. Let's go all to cash." In my opinion. We tend to try to keep clients focused on that long-term goal, because short-term Fluctuations are just part of it.   Speaker 1: Yeah. Not to get too political or get off on a tazza, but I feel like sometimes we kind of give people a little bit of both sides of the coin. I was just watching somebody talking, who typically they're slant when they're interviewing or they're asking questions is typically right leaning, but they decided to kind of jump on the market downturn and said, "Hey, listen. With a lot of the layoffs that are happening in the government, people are obviously concerned about retirement, and now the market's been falling. It's kind of hard to factor in, kind of feel confident that you could even retire."   They took it from that angle for people being laid off, and it just occurred to me, through all the years of talking with you, and it's like if people being laid off today are worried about the stock market, like this week, they probably didn't have a good strategy in place, because typically your market monies are your later monies, right? So, if you're thinking about early retirement, and this was the conversation piece, was the early retirement buyout, should that be a factor, Tony? Should the market monies be a factor if you're thinking about an early retirement buyout? Because it's still going to be later money. God willing, you're going to be retired for 20 or 30 years, right?   Tony Mauro: It is, and I think you have to keep that retirement type money in that mindset. There's a lot of people. Obviously, it's getting a lot of news in the federal government.   Speaker 1: Sure, and nobody likes it when it goes down. I get it. Right.   Tony Mauro: And nobody likes to see people in masse losing their jobs, let alone in the private sector, but the bad part is it's part of life, and we have to kind of wait and see how all this is going to shake out. It's kind of only been going on for, what? 2, 3 months here?   Speaker 1: 30, 40 days. Yeah.   Tony Mauro: Yeah, and so we just have to kind of wait and see, and hopefully, at the government level, if things get to a point, they've got the mechanisms in place to help turn it around. That's what they're all they're, supposed to be doing.   Speaker 1: Right, and I guess my stance on that was, really my question more was I think people, sometimes it's when we have downturns, we immediately focus on the negative.   Tony Mauro: Oh, yeah.   Speaker 1: And again, it's a human reaction, because nobody likes to see it go down, but if you have a plan and a strategy in place, you do realize that these are your later monies. It's a little easier not to completely freak out, right? At least hopefully, and again, 10% is a normal correction. Now, we don't know if this is the end. We don't know if it'll continue to drop or not at the time we're taping this, but it's just simply pump the brakes a little bit and realize that we were super over-weighted anyway, so some kind of correction was due anyhow.   Tony Mauro: It was, and you look at most individual company stocks, valuations were really high.   Speaker 1: They're all high, all the PEIs are high.   Tony Mauro: Oh, boy.   Speaker 1: And tech, really. Tech was really bad.   Tony Mauro: Really bad, and if you're in mutual funds, and that's their objective to go buy those, they're buying these at high valuations, and all this stuff kind of comes into play. But I agree with you. I think that this is all the more reason to have a plan, number one, and keep an eye on it, mark, watch it, and work with your advisor.   Speaker 1: Sure. Yeah. If you need to de-risk a little bit, hey, nothing wrong with that, right?   Tony Mauro: Yeah, no.   Speaker 1: But we've also been saying that for a while now. I mean, you're talking about the S&P. That's usually the average. That's the index that people cut and your industry use. The all time, 52-week high was at 6,100, and it's at 56 and some change right now. So, again, it's only about 500 points off of that. So again, not a massive downturn, but it's all about perspective and maybe peeling some risk off, which again, a lot of advisors have been saying for a while now, "Hey, the market's been up 22 plus percent the last number of years. Maybe it's time to take a little bit off the top there, just to kind of think about that."   Tony Mauro: Right.   Speaker 1: So, anyway, I won't beat that horse any longer. We'll move on. Healthcare costs was only an 8.5% as a top client concern, Tony. 8.5% on a healthcare cost; however, the advisors, themselves, feel like it should be more like 50% of their perspective client base should be thinking about healthcare costs. What do you think about that?   Tony Mauro: I think, for me, most of our clients that we work with are really concerned about healthcare costs and what it's going to be when they retire, and I think many clients, my older clients are starting and they think about it in their fifties, but I think even the young, which are not thinking about it, and they're still in the accumulation stage, should at least make that part of their plan as that boogie man, so to speak, is out there, from what we know today and make sure that you're factoring that in. But yeah, some of these costs are, as we always say, nothing goes down, but it seems like healthcare costs, and of course cost of education seem to go up way more.   Speaker 1: They always stay up. Yeah.   Tony Mauro: And so, I think it's a big concern, because you got to factor that in when you get off your company's healthcare plan or whatever you've got, and you've got to make it work. It seems like most of these people, like my dad included, who's now 83, boy, he uses the healthcare system a lot, because he's constantly at the doctor.   Speaker 1: For sure, and if you're not having the conversation, only eight and a half percent find it to be a top concern, then you could be setting yourself up for some heartache a little later on when an incident does happen, or if not to you, to your spouse, right? Because that's oftentimes what happens when we talk with advisors, is they don't get a plan together, especially for long-term care. One half of the relationship gets nailed with it, and the other half winds up suffering at the end, right? So got to have a strategy. You at least got to be talking about it. I know it's no fun.   Tony Mauro: At least talking. Yeah.   Speaker 1: Yeah. I know it's no fun, but you at least got to start putting some things together in that grouping. One more thing here, and then we'll wrap it up this week on the podcast for this, Tony, but working in retirement. According to the survey, excuse me, an average of 63% of clients surveyed that are age 55 or older, plan to work beyond age 65. They plan to work into their seventies. Interesting, right? So, 63%, more than half, want to work or are going to work past 70.   Now, the reasons are not necessarily because they were panicked about the market, because again, this was done last year, the December of last year, but I think there was two main things that stuck out. They felt like they didn't know if they had enough to totally feel comfortable retiring. 48% of those clients felt that their savings maybe weren't quite enough to live on, and the other 40% said, "Well, they were doing it for the health insurance," to our point a second ago. So this is where, again, a plan and the strategy's got to come into play, get the numbers ran, so you can even find out where you stand.   Tony Mauro: Yeah, because if you don't, then you are really just grasping at straws there, and you're just hoping that it works out.   Speaker 1: And you want to keep working, but what if your body goes new?   Tony Mauro: Yeah, your body goes new. And then, I would say, for us, probably on average, our percentage of clients, 55 to 65 that say they want to work for us, I would say it's probably around 35, 40%, but our clients that are 65 and older, our average is well above this 30% that are actually still working. Ours is probably closer to about 45%, but it's because they want to. They have a plan.   Speaker 1: Which is totally great, yeah.   Tony Mauro: And they just want to get out of the house.   Speaker 1: Sure.   Tony Mauro: So, they actually love it. They don't have to work for the money. They just want to do something and just stay involved in the world a little bit.   Speaker 1: Right, and I think that's where we want to be, right? That's where we'd like to be, having that work optional decision, but I think finding out that a lot of people are doing it for the health insurance coverage, certainly a little daunting there to think about, or they just don't know that their numbers are good enough to retire, like we started out with.   Tony Mauro: Yeah. I always wonder, when I see an older retiree working somewhere, if they're there because they want to or they have to, especially if they're at somewhere where you'd see, I don't know, maybe an extreme example in maybe the fast food industry.   Speaker 1: More physically demanding job? Yeah.   Tony Mauro: Yeah, yeah. More physically demanding. It's like maybe you just always wanted to do this, and just have no stress and just wanted to get out of the house, or are you really working because you have to?   Speaker 1: Now, that's an interesting point. Now, I've got a friend of mine who retired from a very stressful, big corporate position, managing a lot of people, so on and so forth, and he took a job at a supermarket, stocking the shelves, right? Literally, goes in, six o'clock in the morning, something like that. Works for four hours a day. They grab the baskets of stuff he needs to refill, and he goes out and stocks the shelves, and he said, "Dude, I am so happy. I don't have to manage anyone. No one's reporting to me. I know what I'm supposed to do. They trust me to just grab my stuff and do it."   I said, "But it sounds like such a," sometimes we have this stigma. It's like, "Oh. He must be working stocking shelves because he has to, because he's in his late sixties."   Tony Mauro: Right, right.   Speaker 1: And it's like, no, he's doing it because it gets him out of the house. He's like, "For me, the menial tasks helps me free my mind up," because he didn't have to think. He just does, so everybody's got their thing, right? It's like, don't judge somebody, just because you see them doing something.   Tony Mauro: Absolutely not, yeah. That's why I always want to ask them, because I don't want to judge them, but from what I hear from our clients, those types of work, which is most of the clients that I have, that's what they do is that kind of stuff. It is just menial stuff, because the one on one thing is I don't want a lot of pressure, I don't want to have to think.   Speaker 1: Right.   Tony Mauro: I just want to get out, do something, feel like I'm contributing, and talk to people.   Speaker 1: Your body gets to move. He gets to talk to people. Yeah.   Tony Mauro: And they enjoy it. The same type of retiree, he drives for the shuttle at my car dealer, and he absolutely loves it. He's like 78. He works for about five hours a day. He drives people around and talks to them, and he goes home. He loves it.   Speaker 1: No stress, no fuss, no muss, right?   Tony Mauro: Nope, nope.   Speaker 1: So yeah, so interesting stuff in today's conversation around this survey done from Financial Advisor Magazine. We'll put a link into it in the show descriptions if you'd like to check it out for yourself. That way, you can read the online survey as well, but at the end of the day, Tony, you just got to see what it is that you have and what it is that you need for your situation, because everybody's situation is different. Tony's is different than mine, and mine's different than yours, and so on and so forth, right? So, get yourself onto the calendar folks. Have a conversation with Tony at Yourplanningpros.com. That is Yourplanningpros.com. He's got more than 30 years of experience helping folks. He's a CPA, CFP, and an EA. He's got all the credentials there. So if you've got some questions, reach out to him and get started today. Don't forget to subscribe to us on Plan With the Taxman. I know we went a little long this week. Thank you for your time, folks. We always appreciate it. Tony, my friend, have yourself a great week.   Tony Mauro: All right. We'll see you next time. Thanks.   Speaker 1: Yes, sir. We'll see you next time here on the podcast. We'll catch you later here on Plan With the Tax Man with Tony Mauro.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

If you've spent years successfully managing your own investments, do you really need a financial advisor? That's the question Bob, one of our listeners, sent in. He's got an MBA, knows the markets well, and has always handled his portfolio solo. So, is working with an advisor just an extra expense, or could it actually add real value? In this episode, we break down when and why even experienced investors might benefit from professional guidance and when they're probably fine on their own.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: If you've spent years successfully managing your own investments, do you really need a financial advisor? That's a question that one of our listeners sent in, and it works really well, because earlier this month, we had a similar question, but from a business owner's standpoint. So let's tackle it now from the other side and see if we can help you break it down here on Plan With The Tax Man.   Hey everybody, welcome to the podcast. Thanks for hanging out with Tony and myself as we talk investing, finance and retirement. Of course, Tony here is the star of the show, if you will. He's the CPA and the CFP, he's the big kahuna. He's an EA with 30-plus years of experience helping folks get to and through retirement. And Tony, we had an email question that came into the website, yourplanningpros.com, you get lots of emails for things, and this one was based off the podcast. But either way, it was still interesting this month, so we tackled really two of them this month, in the month of February, thinking about the business owner's standpoint from our last episode for a question that had come in about, hey, I've built a nice business, but how do I make a retirement plan out of that? So if folks didn't check that out, feel free to go check out that prior episode, Plan With The Tax Man, on whatever app you like using. You can also find that information on his website at yourplanningpros.com.   And this week, we're going to do a similar question, but this is from Bob, and it's more the DIY, just do the normal thing retirement planning yourself. So Bob's question, Tony, says, "I have an MBA and I understand investments well. I've always handled my portfolio myself instead of having professional help, and I've done pretty good at it, if I'm being honest. So in your honest opinion," he says, "Is there really any reason for someone like me to work with someone like you, an advisor?" So we get a lot of this, and the DIY movement's been very popular the last couple of years.   Tony Mauro: It has, yeah.   Speaker 1: And so, it's certainly a fair question, because a lot of people definitely have taken this route. And Tony, I'll set you up this way, I'll let you just jump right in and tackle it how you want to with his question. But to me, the biggest piece is, is it the accumulation phase he's been working on or the distribution phase? Because it sounds like the accumulation, just based on this question, and that is a whole lot easier, I think, than the preservation, distribution, AKA the retirement phase. But anyway, what do you think?   Tony Mauro: The honesty is it depends, because if he truly is savvy enough that he thinks he is and basically doesn't have a lot of worries about what he's doing and how he's progressing and he feels good about it, we would tell him, "Hey, look," if we were sitting... What we do, the first phase of our whole planning process is we sit the client down and have them basically answer 10 extremely easy questions and we score it, and if they don't, based on their own responses, show some anxiety or worry or need for help, I tell them, "I don't really know why you're here in this meeting because it looks like you've got it under control." So then you have a conversation from there, "Tell me why you are here," and let it go from there.   But I think that where we can lend value, even in the accumulation phase... Because I try to convince people right off the bat, it's not about what investments or whatnot we pick, it's basically about setting a plan, let's make sure all the bases are covered, whether it's accumulating to a certain amount, your estate plan, making sure we're doing it with some tax efficiency, whatnot, and then let's check in regularly and let's make sure that this plan's still on track, and that's really what you're paying for. The investments we choose, we tell them, "Look, if you want to go choose your own, you go ahead. You'll just pay us a fee, just like you would your attorney." If you want us to help you manage that a little bit and you want to give us an asset-based management fee, we do it, but it's fee-only, no matter what. And so, we leave it to the client.   So I do think there's some benefit to a good financial advisor, but you have to understand as a client, any financial advisor that's worth their salt wants to do more than just give you ideas for investments.   Speaker 1: And so, let's look at it from that standpoint, Tony, because yeah, Bob sounds like a very smart gentleman, sounds as though he's able to handle things himself just fine, and many people are in that same boat, and that's great if you're thinking about one section of your finances, your money. So I want to look at it from a couple of different places to give Bob some reference. So the questionnaire and the thing you talked about, that's fantastic, helping people break it down. Is it just the portfolio? Because that's what he mentions, the portfolio. Okay, fine, you've got investment skills, you've done well managing your portfolio, but what about all the other pieces, Tony? So the stuff that we talk about here on the show quite often that maybe a lot of DIY people, A, don't consider, or B, really have much knowledge in or even thought about, like estate planning, just that piece of it, or tax efficiency, retirement income, any of those pieces. Wherever you want to go next, just jump in there. But I feel like those are a lot of things you go, whoa, I didn't even think about that.   Tony Mauro: All those things make sense as far as us as advisors being able to help with. And I think a lot of other things too, as far as somebody brings us their portfolio and they're all chest out and pumped up about look how good I did, and we try to run it through some computer models, just to maybe address some of their risks that they didn't think about maybe. It might be they're overly concentrated in a few securities that doesn't really line up with their overall goal or risk assessment. And then, most of the time, the people that do it themselves generally are trying to time markets to an extent.   Speaker 1: Or match the market, right, they're trying-   Tony Mauro: Or match.   Speaker 1: Yeah, I got 22% in the last two years, so I want to make sure I get that 22%, but your risk exposure is awful high.   Tony Mauro: It's awful high. So we always ask them, "In order to get that, what did you have to do, what did you have to risk to get that, and is that really truly what you want?" And then, the other thing is, let's take taxes into that. If you're investing inefficiently, are taxes knocking down your returns? So a lot of it goes into that, especially on the technical side. But let's say he passes all that and he still thinks he's in good shape and we say, "You know what? You are." And then it's up to the client to say, "Am I going to get some real value out of working with this guy or gal?" And hopefully, it's something that they can definitely do and be better off with us than without us.   Speaker 1: Yeah. And as a CPA, I would imagine, Tony, that one of the things, if the DIYers... Again, accumulating your wealth is a little bit easier nowadays, technology is very helpful, there's a lot of just some good stuff out there. Let's be honest, we've had basically a 16-year bull run. Yeah, we've had a couple of blips through the... But we haven't had a prolonged downturn since '08/09, right?   Tony Mauro: Correct.   Speaker 1: Not a long one, no more than a couple of months. The COVID thing was pretty short-lived, it was a little down in 2021, 2020, obviously, shortly there after COVID as well, little blips here and there. But for the most part, we haven't had a prolonged downturn. But let me get back to the CPA point, from a CPA standpoint, if you're doing really well as a DIYer on the accumulation, have you thought about the tax advantages or disadvantages that you're just not aware of? Especially as you get closer to retirement, pulling your money out from what income sources and what that does to your income, and maybe that triggers IRMA, that's another one that people don't think about often. So there's all these little nuances that we're just not normally aware of.   Tony Mauro: Yes, that's true. And I think another big one that we hear a lot of clients talking to us about is they think that they are doing themselves a great favor by, they hear something on TV or the internet and they'll start pulling money out of their IRA and transferring it to a Roth or their 401(k) into the Roth conversion, but what they don't realize is it's much more tax efficient to just fill up your current tax bracket bucket and then postpone the rest until the next year, because you're needlessly costing yourself taxes when you could spread this out a little bit, and sometimes that can add up to large amounts of money.   Speaker 1: Oh, yeah. And we've talked about Roth conversions here, and I think we think they're a good idea, I don't want to speak for you again. But you've got to Roth it correctly, not just wholesale Rothing, but Rothing over time, for example.   Tony Mauro: Over time, yeah. Because I think a lot of people miss, and certainly outside the tax community, the tax efficiencies or inefficiencies that you can do in investing. Now, is it going to kill you? No. But why leave money on the table, so to speak, and give it to the government, when legally you may not have to?   Speaker 1: Yeah, for sure. All right, Bob, so here's another thought process for you to go through, to work on. Is this what you want to do in retirement? I think that would be another piece. Or even let me go one more, what about Mrs. Bob? Is this what she wants you to do in retirement, or does she have plans? So I think that's the other thing about the DIY side of things. It's great, we can do a lot of wealth accumulation a lot easier, Tony, than we used to could. But when it gets to the preservation phase, which is retirement, A, it's more complicated, B, do you want to spend your time doing that, or do you want to be with your grandkids and your spouse and fishing and golfing and whatever it is that's on your list?   Tony Mauro: And if you don't like it, and I mean really like it, you're going to end up putting it off, and then you're going to miss some things, both in the accumulation stage and definitely in the distribution stage. That's where, like you said before, it does get tricky, especially as you age. And then, you've got to think about long-term planning and some things there, and of course taking an income and distributing properly. And so, I always say it's two stages in life, like you said, it's accumulation, distribution, and each are vastly different.   Speaker 1: Yeah, for sure, totally different animals. And boy, the first time you miss your RMD, you're going to be real mad about that.   Tony Mauro: Real mad about that, and you're going to have to beg the IRS to forgive the penalty.   Speaker 1: Right. One of the other questions that we posed in the earlier podcast this month when we were talking about the business side was the succession plan. So I'll ask Bob, and people like Bob, the same question here, Tony, what is your succession plan? Now, by that, you say, "Well, what do you mean? I don't need a succession plan, I'm my own advisor." Yeah, but you're going to die, we're all going to die, and if you pass away first, which statistically is the case, and again, Mrs. Bob, she might not want to do any of this, she might not have any interest whatsoever, so what is your succession plan for having her taken care of, or vice versa, whatever?   Tony Mauro: Yeah, vice versa. And even if you have this all laid out, whether it's on the computer or a life book, she may not have the same enthusiasm that you do with this and it's going to be difficult for her. I've had clients with this, the husband dies, the husband did it all. Most of the cases, the wife has no idea, not what's going on, but how to manage it and whatnot, nor do they want to. And so, I think that's where an advisor could certainly lend a lot of value in that case as well, and you want to start that relationship before something happens to you preferably, not after.   Speaker 1: Yeah. When you're grieving, it makes it easy to know, hey, when I'm gone, reach out to Tony and his team, they're going to help you.   Tony Mauro: Yeah.   Speaker 1: That kind of thing. Or whoever it might be, but that's the idea. So I'll wrap it up with this. So look, you started off by saying if you're just picking items in your portfolio. And it's still funny, because the term advisor is so loose now across different kinds of fields, many investors believe advisors do just that, Tony, that the only thing that they do is help them pick stocks. And so, what would you say to folks who think, well, I'm going to do it myself because I can pick my own stocks? Because as we've touched on, there's so much more to what you do than just that. But what's your final thoughts?   Tony Mauro: I think my final thoughts there is that I would challenge anybody out there to try to not only match but beat the S&P 500 over long periods of time, and/or match what professional advisors can do. Now, that term is loose,, yes, I'm an advisor, but I'm not an investment advisor out sitting in a mutual fund researching individual stocks and bonds all day.   Speaker 1: Right, not run a broker, right, yeah. And you're not day trading, right?   Tony Mauro: No, we're not doing that. I would challenge you though to see if you can match those things year in, year out, when they're sitting there, who have much more knowledge and access to information than we do as Joe Public. And so, I would say that I don't think you could do it, I really don't, I haven't met anybody yet that can do it over long periods of time. And so, the idea for having someone like us is to keep you on track and get you where you want to go outside of the investment portion of it. If you want to go choose your own investments, again, that's great, but I think you need somebody that deals with the planning portion, day in and day out, to keep you on track.   Speaker 1: Yeah. And think about a company like Vanguard, which is a very low-cost option for people who want to buy and do their own thing, they even talk about the value that advisors bring, they rounded about 3% annually. And they also talk about, from the behavioral analysis side, one of the big pieces that they even talk about that advisors bring to the table with working with folks is that behavioral modification, because we are our own worst enemy.   So Bob might be doing a great job, but what if, all of a sudden, he's been reading a while about some new tech thing or some new cyber coin or whatever, and all of a sudden, you want to risk too much? Having that sounding board is a great idea, not only for Bob, but for Mrs. Bob as well, because it could be like, hey, we're on two different pages when it comes to leaving money to the kids. Bob wants to balance his last check so that him and the Mrs. can spend it all and have a great time, but she wants to leave a bunch to the kids or whatever, or the grandkids. So it's all those other pieces that, I think, having that... Well, Tony, basically that sounding board, sometimes you're like a counselor as well as an advisor.   Tony Mauro: We are, and I can't mention how many times... I like to mention it to the clients who will call up and say, during the good times, "Well, we don't feel like we got as much return as we needed in the previous year," or something. Or the best one is a client or a prospect will say, "Well, I'm going to divide up my between you and another advisor, we're going to see who does the best." And I'd say, "We're not in that game." Not that we're not focused on returns, we are, but I like to tell clients, "Our job is to keep you grounded, especially when the bad news comes out." Because clients, it's inevitable, bad news starts coming out, the markets go down a little bit, they're calling, "Maybe we should go all to cash." And I said, "Based on what? Who said that? And then, when do we get back in? Who's going to tell us, the news?"   And so, just keeping them from blowing themselves up, which they don't really ever see, but I like to sit in the background and say, like you said, "The last, what, 15, 16 years, we kept you in the markets, when many times..." Pick the subject that came out, COVID was the big one, we've got to get out, the markets going to hell and we've got to go all to cash. And it's proven that that didn't need to be the case. We did take a little blip, but they're so far ahead of that now that it's crazy.   Speaker 1: Well, and look at the turmoil that we're in right now too. So we've got a new administration, they're doing things that have never been done before, whatever the side of the aisle you find yourself on, there's a lot... We're $6 trillion in a deficit, that's annual, so we're $35 trillion in debt, but we operate at a $6 trillion annual deficit. You can't run your house that way. If you were running your house, Tony, that every year, you were losing $60,000, let's say, you wouldn't survive real long, unless you're mega, mega rich. And the government's been operating like it's mega, mega rich, and it's not.   However, I digress, point being is that there's a lot of things happening, and the market is reacting fast. There's all this AI stuff, there's this new DeepSeek version of AI from China that says they can do it cheaper and less energy and so on and so forth. Then you've got the fact that tech markets are massively overweighted, and they have been for a number of years. It feels very much like there's a bubble, similar to '08/09 with the housing bubble, and we've got all this stuff happening, and to your point about the markets, people can be edgy and they can be like, "Well, I'm going to panic and jump out." Well, okay, well, if you're 40 years old, that's insane.   Tony Mauro: Yeah, that's absolutely insane.   Speaker 1: Because you've still got plenty of time. And maybe even if you're 55 years old, it's insane. But how do you know if you don't have a plan?   Tony Mauro: Yeah, you don't. I just had a client, he's 55, for example, we've done well, and basically, he watches too much TV. I always get the little hairs on the back of my neck stand up when he's calling, because he's calling now saying, "You know what? I want to be more aggressive. I really think that the markets are going to be booming." I'm like, "What? You're starting to get where I'm thinking maybe we should go a little bit of the opposite, not all, but as you get a little closer to retirement, let's give up some of that risk for more steady returns." And so, it's weird, because when people want to get in, generally, if you ever read anything about it, of course, that's the time to be a little bit spooked. And then, when everybody's euphoria or when the market is tumbling and the blood's in the water, that's obviously when you want to be going like gangbusters and putting money in. But that's short-term stuff. Really, the plan is to stay long-term-focused.   Speaker 1: Yeah, and that's a great point. The market's about the longevity in it, not jumping in and out and so on and so forth. And I get that it's been booming for a while and that's very enticing, so all that stuff we talked about, comes back to having that ear to lean into, "Hey, Tony, what do you think about this? Is this a good idea, bad idea? And could my portfolio handle this, or could it handle that?" And so on and so forth. "And what does that do to my retirement?" And so on and so forth. And then, we didn't even touch on long-term care, so that's another whole piece there, Bob.   So again, you may be doing a great job, but it also may be worthwhile to sit down with an advisor and have an hour conversation and say, "Hey, what are some things that could be missing?" To Tony's point, they can walk you through those steps. They can put you through a questionnaire and just see where you're at. You may be doing a great job, in which case, they're going to pat you on the back, shake your hand and send you on your way. But you may be shown some areas where there could be some improvement, or maybe you just, at some point, decide you just don't want to deal with all of it anymore.   Either way, if you've got some questions, you need some help, hopefully you enjoyed the content this week, we certainly appreciate it, reach out to Tony and his team at yourplanningpros.com. That's yourplanningpros.com. You can find all the information in the show links below of the episode, and you can find us on Apple or Spotify or whatever platform you like using. Just subscribe, the Plan With The Tax Man, with Tony Mauro, from Tax Doctor, Inc. Tony, thanks for hanging out and breaking it down, my friend.   Tony Mauro: All right. We'll see you next time.   Speaker 1: Always appreciate you. We'll catch you guys a little bit later on in the next month. We'll be back in March for more with Tony Mauro.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

You've built a successful business, but now the big question is, how do you turn that into a retirement plan? If you're like many entrepreneurs, you've spent years reinvesting in your business, but what happens when it's time to step away? Can you sell it? Can you create passive income from it? Or should you start saving in other ways right now? In this episode, we're breaking down strategies for business owners who need to turn years of hard work into long-term financial security.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    You've built a successful business, but now, the big question is, how do you turn that into a retirement plan? If you're like many entrepreneurs, you've spent years reinvesting in your own business, but not in yourself. This week on Plan With The Tax Man, let's talk about that. Let's get started. Hey, everybody, welcome into the podcast. Thanks for hanging out with Tony and myself as we talk investing, finance, and retirement. Of course, Tony Mauro is the man to turn to here in the Iowa area at Tax Doctor, Inc. He's a CPA, CFP, and an EA of 30 plus years experience, and a great resource for you to tap into if you've got questions about this week's topic, for example, which is what to do now, if you've sunk all of your efforts and your money into your business. And Tony is a business owner. I know you can probably relate, as many of us can. So it's a great question was we actually got a question in from a listener who's also a business owner kind of posing this, and you and I thought it'd be a good idea to have that conversation. How you doing? I've been good. Well, there's been good here, and just getting ready for tax season as we tape this. Yeah, yeah. It's coming fast and furious, so of course, as you're aware, but I'll share it with the listeners so they can kind of set the table for them, if you will, Dan, a longtime listener and a business owner sent a question that might sound familiar to others who are in the same situation, Tony. He says, "I haven't saved much for retirement, because I'm self-employed and I've always pumped most of my money back into the business. But now, I'm not sure how to turn that into retirement income, as it's creeping up on me fast. Have you worked with folks in a similar situation?" And obviously, Tony, I'm sure that you have. So let's talk about some of the key aspects to that. First of all, what'd you think about the question? I think it's a good question, and almost every one of our business owners are in the same predicament or if we're doing, whether it's just their tax return or their monthly accounting for them, they all face this. And so, it is something on business owners' minds. And what happens to us all as owners is, as we get into our... It's our baby, right? We pump everything into it. They pump everything into it, but I kind of rebut that. Because what they say is, "All my money is in my business." And then, I start asking questions to them when we're trying to do some planning and say, "Well, what's your business worth?" "I don't know," they say. And I said, "Well, even if it's worth, let's say, X, you may not get all of that money up front for it and you may not get what you think." Everybody, since it is our babies, thinks it's worth well more than it actually is. Our kids better looking than anybody else's kid, right? So it is difficult, and we also try to put some numbers to it and tell them, "Well, if your business is worth," I'm just going to use an example, "a million dollars, could you live on that?" And number one. Number two is is, "What if it took 10 years to get that million? Maybe you better start doing some other things in lieu of. Because I think the business itself is icing on the cake, but I wouldn't just count on it for your retirement." Again, everybody's different. No, for sure. And we've got several things kind of in that line and some other stuff. So I'll dive into some of these thoughts here. So what are some smart strategies for turning a business into an asset? So to that point that you just made, Tony, should Dan and people like Dan, should they look at selling? Should they transition to passive ownership? Or is there another approach? I think this is the biggest reason to be talking to your advisor on something like this, because I think all three of them could have merit. Sometimes business owners get burned out and then they want to sell, but basically, it kind of depends. Without knowing more about his financials, it's hard to say. But let's take, for example, if he's fairly successful, earning a good income and still wants to stay in the business, probably, he might want to make sure, and again, this is a more business owner talk than financial talk, but make sure his business is running on systems, so that it is going to be very sellable when he sells it, not just reliant on him. Because they're generally not worth as much if you're doing all the work. And most of these business owners are, they get to be self-employed, and really, they become an employee in their own business and they're slaves to it. That's a great point. And sometimes, even if you're thinking about selling it, maybe you are the business. What happens when you leave? Would it do as well? Yeah. Would it do as well? And if the clients are only used to dealing with you and you leave, well then, that, again, that doesn't bode well for money coming in for you. But I think the way to turn it into a retirement asset is to get it systemized, get it into something, where maybe you can go into passive ownership. Because then it's worth a lot more. Good points. What about just going ahead and maybe, okay, if you're aware of it, you get to this situation, Dan sent this message in, other people are getting there, he doesn't say how far away his retirement is, just that it's nearing, is it maybe time to stop pumping everything into it and look at some 401k options or something for yourself? Maybe if selling it's not on the horizon, is it time to start feeding what, like a SEP, things of that nature? I would definitely say that. That's one of our biggest key planning points with business owners is that whole retirement area, because a couple things can happen. One, they can cut their taxes while they're doing it, and then, the other thing is they can track better employees. And then, of course, the whole, we've been over it time and time again, about saving for the future allows them to pile up massive amounts of money that the ordinary guy sometimes can't do. And I think they need to do both. We try to get them to definitely do one of those things once we talk about how much money they want to try to put aside. Okay, because there's what? SEP IRAs out there? Solo 401ks? Yep. Simple IRAs. You've got the old fashioned type of pension plans, which are expensive, but very good if you've got a ton of cash flow. So there's like 5, 6, 7 options out there, depending on how much flexibility and how much you want to try to sock away, which you can find something that fits you. Yeah, yeah. Well, so obviously, he prioritized reinvesting in his company over traditional savings, which many people do. So to my question a second ago about, hey, it's time to maybe make a change and start paying yourself and your future self, how do you guys help people kind of prioritize that, right? Because I know that that's probably the concern, if left to his own devices, Dan may just keep pumping into the business, does it require maybe that third party person like yourself to say, "Okay, you need somebody to kind of help you stay accountable?" Or what's your thoughts? I think it definitely does, and I think this kind of bodes to some of the facts of monthly accounting and making sure that you understand, each and every month, exactly what happened in the business and then, year over year, of course. And that generally comes somebody else doing your accounting, because most business owners either don't do it at all or don't do it correctly. And then, of course, it's hard to make good decisions. But once that's done, then yes, it's extremely important for your advisor or your accountant, like in our case, to be trying to tax plan with you and retirement plan at the same time. So it all kind of blends into one for us business owners. So that you're seeing that you're not hurting the business, but you're also seeing, "Hey, I'm actually doing something for me too." Exactly. Yeah. And having, I think, a third party or a second set of eyeballs, whatever you want to call it, kind of helps a little bit, because we do get blind... With all the other conversations we have, Tony, typically, we're our own worst enemies, right? That's right. When it comes to just about anything. So, all right, so if Dan wants to eventually sell the business as part of his retirement plan, what's some things for people who are looking to kind of step out of it? Because like succession plan is important. We don't know what kind of business it is, Tony, but I imagine, for your own business, you probably have a succession plan or you're working on one for sure. Exactly. Yeah. In my own business, my succession plan now is my son, who is in the business and learning. So that's my succession plan, and then, I have a plan B from there. If he decides to change his mind, what's going to happen? But business owners need to have a succession plan of some kind. And if you're in business with a partner or a brother, sister type thing, you better have a buy sell in place, so in case somebody wants out would be another one. The other one would be, like I said before, is trying to make sure that your business is running on as many systems as possible, and it's just not reliant on you. Because I think that's going to basically maximize its value. And then, of course, on top of that, if you could show that you're steadily growing the business, you've got good accounting records and processes in place, that's going to bode very well for a particular buyer to come in and buy themselves an income that they can replicate what you're doing and make money, all while possibly paying you off. That makes sense, Tony. And is there a value in, obviously, getting your company evaluated, evaluated for what it's worth, what they call that evaluation, right? Evaluation, yeah. What's a window for that? Should you do that just anytime, just so you know where you stand? Or if you're thinking about selling it, should you do that a year ahead of time or six months? Or what's your thoughts? My thoughts when people ask me that are a year to two ahead of time, so that you can basically start out the easy way and just try to use some free resources for that. And then, as you get a little closer, you've got to go from basically just looking around at what's selling in your industry, basically from the internet or brokers, to really maybe going out and get a professional evaluation done of the business. And there are companies that do that and they charge a fee and then they go out and do that, kind of like an appraiser would for real estate. And you can find mid range and upper range, just kind of depending on what you're looking for, they can get a little bit pricey, depending on the situation. But then again, maybe not, you may not feel it's pricey at all, so it could be worthwhile. So yeah, I think you got to start getting your ducks in a row, just like anything in retirement, whether you're self-employed or working for somebody else, right? It's all about having a plan and a strategy. So reach out to somebody like Tony and have a conversation, who is a CPA, right? And a CFP. So kind of thinking about both sides of the aisle there, taxation as well as financial planning for the future. And if you've got those questions, need some help, reach out to Tony at yourplanningpros.com, that's yourplanningpros.com, to get started today, get some time on the calendar. Or call him at 844-707-7381 if you're not already working with us. And if you're listening to the podcast and you work with Tony, that's great. If you're not and you're just catching this, feel free to consider subscribing to the podcast, so you can catch future episodes when they come out, on Apple or Spotify or whatever platform you like using. We'd certainly appreciate the support as well. Tony, anything else that I didn't catch on this? Any thoughts you might have? Other than just, like you said, if you need anything, to the listeners, reach out, because this is something for business owners. We love to work with them and make sure that they can get to where they want to be in their financial lives. For sure. So yeah, don't hesitate. Yeah, it gets a little more complicated, I suppose, sometimes than just the normal straight approach. But still, you got to have a plan, no matter what side that you're working with, whether you work for somebody else, like I said, or for yourself. So get on the calendar, and we'll see you next time here with Tony Mauro. Plan With The Tax Man, that's the name of the podcast. We'll catch you a little bit later on.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Financial mistakes can happen at any age, but they can have a particularly significant impact in your 60s. This episode offers five common financial blunders to avoid during this pivotal decade.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian: Welcome into another edition of Plan With The Taxman. We're going to talk about financial mistakes to avoid in our 60s. Financial mistakes can happen at any age, but certainly have a bigger impact in our 60s. So let's get into it this week here on Plan With The Taxman. Hey, everybody, welcome into the podcast. Thanks for hanging out with Tony and myself as we talk investing, finance and retirement. And we got a list of a few financial blunders we want to try to avoid in this very pivotal decade for us when it comes to retirement. So Tony, we'll dive right in this week. I hope you're doing well, but I'm just going to kick it off and get us rolling. So unnecessary spending, let's just start right there. If we're into our 60s at this point, we want to be focused on making sure that we're getting remaining debt down and things of that nature. We're probably not necessarily looking to be on a budget per se, but let's just not be doing anything super crazy, right? Tony Mauro: I would definitely say that this is the best time to make sure that you're on the same page as your advisor with your spending and with how much you've got coming in. And definitely try to avoid some of the unnecessary things. Not saying you can't go out. We talked a little bit about on the last podcast, going out and spending a little bit. Marc Killian: Sure, yeah. Live it up a little bit, because that's what it's there for. Tony Mauro: Right. But you want to definitely limit and avoid that type of stuff that might be unnecessary. Now, how do you do that? Well, we talked a little bit about that on the last one. Marc Killian: Well, you go to number two. Tony Mauro: Yeah. Marc Killian: Well, number two on my list is ignoring retirement planning, right? Tony Mauro: Right. Marc Killian: So how do you avoid unnecessary spending? Well, you don't have a plan. Tony Mauro: You don't have a plan. So yeah, ignoring retirement planning, if you're already in your sixties, you better get something together quick, even if it's just a snapshot of where you're going to be. Marc Killian: Yeah, true. Tony Mauro: You may not have as long obviously, as somebody that's younger to plan, but at least you've got an idea to what you are going to have coming in. Because then you can certainly try to avoid the unnecessary spending if you know what you have coming in. Marc Killian: Well, Tony, if you're 60 and you're thinking that retirement is on the 65, 66, 67 radar for you, is it too late? I mean, I don't think so. I don't think it's ever really too late, it's just you have to be realistic, in the fact that options will be more limited the longer you wait and the closer you get to retirement. Tony Mauro: That's it. I agree totally. I always encourage people to start saving. And we will get that from clients that say, "Well, it might be just too late." It's never too late, but it's managing your expectations like you said. Marc Killian: Yeah, start planning. Tony Mauro: Because as long as you're realistic and start planning, you're going to know what you have. Now, it's not going to be the same as if you've been doing it for 35 years, but that's beside the point now. Marc Killian: Sure, you're there. But don't wait any longer, right? Tony Mauro: Yeah, don't wait any longer. Marc Killian: All right, number three, overlooking healthcare costs. Again, the topic being mistakes to avoid in our sixties. Hopefully, we're not overlooking these, but there's more of them coming. Maybe you're dealing with other little things that you didn't realize and insurance costs going up, whatever it might be. Tony Mauro: And depending on what your health situation is, you start with just the insurance costs and all the [inaudible 00:03:24] that's coming down the pike with that. And as you get to 65 with Medicare and all its supplements and whatnot. But I think you got to look beyond that, especially if you have some ailments and things like that of what other out-of-pocket costs you might have and the cost of care to help you with those. If you don't look at that, again, and it goes back to the other one, if you don't have a plan and budget that in, it's going to be very eye-opening if you need some of that care. Marc Killian: Oh, for sure. Yeah. And we all know healthcare costs are continuing to climb, so you've got to make sure you're having those conversations, looking at social security, the different options there, what that's going to all look like and so on and so forth. Number four, is going to certainly be right up your alley, Tony, one that I'm sure you stress quite often. And that's failing to utilize the tax benefits and being tax efficient. Again, in our sixties, and this could be a big make or break for your retirement strategy, is how tax efficient you are. Tony Mauro: And it's one of the biggest things we stress for ourselves compared to maybe some of the other types of advisors, is we basically being tax people first, definitely the backbone of everything we do is tax efficient investing and tax efficient withdrawals. Because boy, you can cost yourself a lot of money if you just haphazardly take from the wrong pots of money at the wrong time. And so we're constantly trying to work with clients in their sixties about taking money the most tax efficient way to minimize that. Because if you're doing that over 20 years or so, that could be a big number. Marc Killian: Oh yeah, for sure, right? And so tax efficiency, whether it's for you while you're here or even how you leave a legacy, that can be a big make or break piece. And there's so many little facets and parts to the tax efficiency, Tony, that's not even funny. We don't even really realize what it is as lay folks, because we don't do this every day. But you obviously know all the different pieces that you're looking at and it can stack up. I mean, whether it's IRMAA issues when it comes to that tax issue, just the Medicare tax, depending on how you're taking your social security, so on and so forth. Just a lot of little moving parts. Tony Mauro: I think that's one of the biggest areas. I mean, it all fits together. And if you continue to overlook that tax stuff, like I say, you're really going to do your heirs a disservice, I think. Marc Killian: Yeah, for sure. Well, speaking of social security, so that's the next one on my list here. Number five, delaying social security benefits without a plan. So now I said delaying, not turning it on. A lot of the times we hear people say, "Hey, I'm going to turn it on right at 62," and that's a conversation we have. But this is delaying social security benefits without a plan. So if you're trying to max it out at 70, and that may be fine, but have you run the numbers to see what makes the most sense? What's your break-even point? Things of that nature. Tony Mauro: And I'm going to put in a shameless plug here, because we do- Marc Killian: Go for it. Tony Mauro: For ourselves. If you're listening and you want to be on one of our webinars that we do about social security planning and when you should take social security, just shoot me a line and we'll get you on the list for the next one. But we do about four of them a year. But really we go over this in detail in this webinar. It's about 35 minutes. There are a lot of calculators. We have one that we use, and basically, it runs a client through every facet of that, based on their age, what other money they have, their life expectancy based on just their family history and things. So we can give people options of when to maximize that. Because a lot of people just get it stuck in their head of, "Well, I'm going to take it at 62, the earliest, or I'm going to take it at 65 or whenever my full retirement age is." And sometimes it's better to be in between one of those, or maybe even delaying out till max retirement age at 70, when they make you take it. So it's good to have all that in front of you. Social security's not going to give you all that. They are going to give you a report, which is nice, but they don't know the rest of it. They're just going to give you a report on what your benefit would be. But we take that along with everything else we gather, and give you a nice discussion about what is the best time to take that. So at least you got all of your options and you understand it. Marc Killian: And if somebody wants to get involved with one of those, what's the easiest way to do that? Email the office, go to the website, yourplanningpros.com? What's the suggestion there? Tony Mauro: Yeah, I would say go to yourplanningpros.com, my site, and just in the contact me thing, type in your email address, say, "Hey, I want to be included on the social security benefits webinar." Marc Killian: Okay. All right. So again, go to yourplanningpros.com and they're right there under contact. There, you can just click on the box there. You can fill out the information. You can also email Tony, his email address is on there as well. So just let him know that you want to attend. But filling out the little contact form, it's probably be the easiest way to attend one of those and get that webinar information. All right, let's see, what else can we do here? We'll do one or two more and then we'll wrap it up this week, Tony. So underestimating your longevity. Okay, so if you've made it to your sixties, there's some interesting stats out there that you have a pretty high percentage of making it to your eighties, which is wild. Tony Mauro: That's right. Yeah, if you've made it into your sixties, there's a very good chance, and you could just do a Google search just for fun and watch what it pulls up based on male or female. And it may or may not be that accurate, but it's going to give you an idea. But most of the time, we're trying to plan for at least 20 years in retirement and sometimes it's even more than that, based on family history. Because most people, once they get into their sixties, have a really good chance of making it another 20 years. And if it falls short and something happens before then, well at least you've got a great plan that you could pass on to your heirs. But I think most of us when they're in the planning stages, especially early on, don't think they're going to live that long. And the statistics point to otherwise. That's just raw data there. So I don't think you can underestimate that or ignore that. Marc Killian: Yeah, no, for sure. Social Security Administration projects that 69% of people who survive to age 65 will live to 80. So basically, almost 70% of people, if you make it to 65, you're going to make it to 80. It's another 15 years, right? So thinking about longevity and planning for that is an important piece as well. And we'll wrap it up with this final one, and that is just don't forget to work on and build an estate plan, a legacy of some kind. If you're in your sixties, I know we just talked about longevity being there, but there also still is the probability that something could happen and you could pass away. We see a lot of people passing away in their sixties and seventies as well. So just make sure that you've got those estate documents and those legacy documents and things taken care of. Tony Mauro: And most people think of estate planning, it's only for the ultra wealthy. Marc Killian: Right. Tony Mauro: They're not going to have estate tax problems, and you may not. But even without that, like you're saying, a will, you want to have that. You want to have some medical directives, some power of attorneys, things like that, so that you can rest assured that your estate will be handled efficiently and the way that you want it, let alone if you want to really do some planning and start talking about trusts and some other things. I think a lot of people overlook that, thinking they don't have enough and then they leave a mess for their heirs. But I think another thing too, is we didn't really even talk about it, but planning your estate, especially if you need long-term care later on, and that's a whole different discussion. But I think to do that, even people here in Iowa, what a lot of them don't realize, is they may escape federal estate tax, but Iowa has an estate tax with fairly low limits. And if you don't pass everything to a direct heir, anything above $25,000, there's an Iowan inheritance tax. And a lot of people get blindsided by that. So depending on what state you're in, you got to check your state laws too with some of those taxes. Marc Killian: Definitely, definitely. So again, some financial mistakes to avoid in your sixties. Hopefully, that we've got a good plan by the time we get to 60, we've got a good strategy in place, and we can definitely benefit from that. But if you don't, again, don't wait any longer. It doesn't mean you've done anything necessarily wrong. You do have limited options. They're going to be a little bit reduced, but so many people still get a good financial strategy in place, even at 60. So reach out to a qualified pro like Tony today, at yourplanningpros.com, that's yourplanningpros.com, to get started with Des Moines Professional Alternative at Tax Doctor Inc. You can reach out to Tony and his team at yourplanningpros.com. And don't forget to subscribe to us on Apple, Spotify, and YouTube. Tony, thanks for hanging it out and breaking it all down for us. As always, we appreciate your time. Hope everybody has a great week and we'll see you on the future episodes of Plan With The Tax Man. Speaker 6: Securities offered through Avantax Investment Services SM, member FINRA SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.  

As we kick off 2025, a lot of people consider what they want the year to look like and how to put their best foot forward, especially financially. Think: “new year, new me!” To figure out what the new “you” is all about, sometimes it helps to reflect first on what you've done in the past and what you want to change moving forward. Today, we'll talk about the financial decisions and habits you've maybe had in the past and what changes you can make this year to embrace the new you.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: New year, new me is the topic of conversation this week on Plan With The Tax Man. As we get firmly into 2025, let's look at ways where we can put the old self to bed and work on our new self from a financial standpoint. Since everybody likes to do that as a New Year's resolution, let's do that financially as well. Let's get into it here on Plan With The Tax Man. What's up, everybody? Welcome into the podcast. Thanks for hanging out with Tony Mauro and myself as we talk investing, finance, and retirement with the big dog, the big kahuna over there at Tax Doctor Inc. Tony Mauro, what's going on, my friend? How are you? Tony Mauro: I'm doing good. Coming off the new year and getting ready for tax season. Speaker 1: Yeah, I bet. Yeah. Tony Mauro: Very relaxed. Yeah. Speaker 1: Yeah. Well, I'm glad you're relaxed, because I'm sure it's going to get hectic right soon-like, you know? So it'll be all up in your business with all that good stuff, but that's all right, because that's what you do. You've been doing this for 30 years, man. You've got a lot of experience. So you ready to go? Tony Mauro: I'm ready to go. We got some good topics to start out this new year. Speaker 1: Yeah. So are you a resolution-y kind of guy? Tony Mauro: Yeah. I have a few, but I tend to write them down, so- Speaker 1: Okay. That helps. Tony Mauro: Yeah, does help. Well, for me, it's a few financial, few personal, and try not to make too big of a list, because otherwise, we don't get it done. Speaker 1: Exactly. Yeah. I spent most of my life not being one, got into my 50s, and then decided last year to write down four, to your point. I only did four, and I was able to accomplish all four, and it made a difference, so I was like, "All right, not bad." You know? But I did forget, actually, there was a lot of things going on, and I didn't do it this year to walk into 2025, so I'm going to see if starting late makes a difference. But I am starting, I just started 10 days late. But there's this thing called Quitter's Day, which you can look up. People make resolutions and then they quit. I want to say I think it's the 16th, which I think is when we're dropping this podcast if I'm not mistaken. So I thought it would be interesting for us to go ahead and continue that trend by saying, okay. We're not going to do the Quitter's Day thing because we're going to launch this after maybe people have kind of weeded themselves out, and do this podcast on new year, new me. So what I'm going to do here is I'm going to give you the old you financial kind of statement, Tony, somebody who might find themselves in one of these categories, and then I want you to give us the new you spin, like what you should try to focus on if you're trying to go in a more positive direction. Okay? Tony Mauro: Sounds good. Speaker 1: All right. So the old you might say, for example, "I overspend, and I know it, and I live beyond my means." Well, kudos, first of all, if you can get yourself to admit that, right? Because that's a tough step right there. But if you are living beyond your means, that's the old you in 2025, the new you should be doing what? Tony Mauro: I think the best thing for the new you really should be to, number one, you have to track your spending so that you know what you're spending money on, so again, so you can prioritize and maybe purge out some of this overspending. But you have to identify what you're spending on first, otherwise you have no idea. And so rather than trying to just come up with that word that I hate, but you think most accountants like it, is budget, I like to just call it a spending plan. And basically, you've got to prioritize and list what you value most and what you can cut out because that is going to be the biggest thing to help you curb that spending. And I'm guilty of it too. I'm kind of an impulse buyer as well from time to time. And you just have to keep that in check because I think that's why so many Americans run up their bills or credit card bills and everything else because they just keep spending thinking that they're going to pay for it later. That doesn't bode well for a good financial plan and good financial health, if you will. Speaker 1: Yeah. And I know people don't like the B-word, but again, you can do a list of wants versus needs or whatever, something to where you can kind of see what it is. Is it still aligning with your priorities? Do you really need it, or is it just a want, right? And try to curb some of those impulse buys. That'll certainly help on that living beyond our means. So good job. All right. Good job with that one. How about this one? That last one could be anybody, people that are a little younger listening to our podcast, people that are a little bit older, whatever. This next one maybe fits a little bit more, Tony, with people who are getting really close to retirement or even in retirement, and they've been saving really, really well for a long time, to a fault, even. The old you is saying, "Look, I saved to a fault, and now I'm afraid to enjoy it," right? And I know that's a real hurdle for some people. They build this nest egg, they get to retirement, and then they don't want to spend it. They don't want to touch it. And so part of your job as an advisor is to go, "Hey, go enjoy yourself. You're going to be okay." Tony Mauro: You're going to be okay. And I've actually said this to clients before that have told me this, and jokingly, but really getting them to think a little bit is when they say that, that they don't want to go spend any of their money. And we keep telling them, "Look, we've been planning and doing a lot of the right things, and you're going to be okay. The numbers say you're going to be okay." What I tell them is, "You know what? As soon as you leave here, go to a nursing home, and just ask if you can walk the halls. And take a look around, or go to a hospital, and look at the people that are sick," and they'd give anything to have their health, number one. But the point of it is, someday it could be taken from us. We don't know. We don't have a magic card that says when we're going to basically be at the end. And so I think I try to get them to understand and prioritize again with some of the things that are most important to them that they want to do before they die, and let's pick off one or two here and there. And it's challenging for them, but most of them end up doing it if they only have to do one at a time. But I do think that sometimes it can be a fault. We're always trying to get people to save, save, save. And for the people that really save, most people are looking at them and saying, "Well, gosh. That doesn't sound like a problem to me," but it is for them, because they save it all and then they can't enjoy it. And that's the whole purpose of having it, right? Is to somehow enjoy it a little bit. I mean, that's what life's about. So a little more psychological, but yes. That's a big one. Speaker 1: Yeah. And I get that it's tough, right? And that's where we're seeing the stuff written form. Coming in and doing the reviews, Tony, that's where you can kind of see, look, all right, maybe you got to take somebody who's in this mode, and you say, "Okay. Spend just a little bit, and then let's see how that happens." "And then we will do the review. We'll do that annual review, and you'll see that you're still in good shape," and maybe that helps them start to learn it's okay to enjoy some of this money that you work so hard for. And as the fun, old saying goes, if you don't fly first class at some point in your retirement, in your life, your kids will, right? Tony Mauro: That's right. Yeah. Speaker 1: They're going to enjoy it. Tony Mauro: That's exactly right. That's a great saying, because that's what's going to happen. Yup. Speaker 1: So that's the importance, that's the value. Well, one of many values really of working with a financial professional. So don't beat yourself up. It's understandable, you worked hard for it, but you also got to enjoy it. You got to have a little bit of fun there as you get into retirement. All right. So next old you statement might be, "I don't know what I have or really where I have it." And that sounds weird to people to think you don't know where your money is, but there's a lot of folks out there, Tony, who maybe don't quite understand what it is they have and where they have it, so what should the new you be doing if this is where you find yourself? Tony Mauro: Well, the short answer is you need to work with a financial pro. But what I mean by that, because that's self-serving a little bit, I understand, is most advisors are now working throughout their plans that they work with clients on, one of the things they do, and it's all online on a portal now, as long as you as the client help the advisor as to everything you have, they're going to create for you a list of where all your accounts are, the amounts, and basically put together a net worth statement for you that's always updated. And you'll want to review that with them once a year to kind of go over it, so at least you can see here's where we were at last time when we talked, here's where we're at now. Now, if you have your investments with that advisor, that's going to update automatically. But you would, in other words, if you're working with an advisor, you don't have to go out and try to create that on your own. You certainly can use a spreadsheet, you can use some personal finance software, that sort of thing. But if you don't want to do that, you certainly can have your advisor help you with that. But the reason it's important, like you said, is you've got to know what your net worth is, or at least close at all times, especially in retirement, when you get on that fixed income, which will help you identify if maybe you are overspending and some things like that, and your balances are going down. Maybe you can pinpoint some of those things, where that money's seeping out. But I do think it's important, and I don't think it has to take a lot of time to create that. You just got to figure out which way you want to go with it. Speaker 1: No, that's a good point, and there's some good things to think about there. And again, it's understandable sometimes because we're so busy with life, and people say, "Well, it's not my thing, finance and math," or whatever, but you got to have a good working knowledge of what you got going on. So this is the new year. It's a good time to take some of those lessons that Tony just gave and put that plan into action. And what about folks that find themselves like this, Tony? That are in this category, the old you saying, "I'm going to pause my investments until things settle down." Saw a lot of email questions come in. The last three or four months of the last year of 2024, people saying, "Well, until the election happens, or this, that, or the other, I'm not going to pump in." Maybe you're still working. "I'm not going to continue to pump into my 401k until things settle down in case the market has a downturn." And to me, first of all, that's just crazy, right? Because there's a couple of reasons why you shouldn't do that. But if anything we've learned in the last five years, Tony, when the hell does anything settle down, right? There's always something- Tony Mauro: It's never settled. Speaker 1: ... going on, right? Tony Mauro: Yeah. I was just at an investment conference with a couple of colleagues over the weekend, and it was interesting that one of the assistants there, so this is an investment advisor's colleague, or assistant, excuse me, that actually said, and so I'll give you both sides of the political spectrum here for a second. She said that she was moving out of Massachusetts because there's too many liberals and she can't stand it. So one advisor on the other hand said he has a client that said they want to move to Portugal because of the current political situation, so both kind of sides of the fence there, but to your point, doesn't really matter who's president. We're not going to get into all of that. They don't really have direct control of your life. So to plan your life around something like that or something similar, I think, is crazy, especially when you're talking about your finances. Because I looked it up, and I shared this stat with them over the weekend, and I'll share it here, but people that want to try to time the market usually don't have good success. Who's going to say when to get back in? And then I always show them my old cost of timing since '03 to about '23, if you missed even the 60 best days in the S&P, I mean, your return is 93% lower than if you just stayed invested the whole time. And we've had a lot of weird stuff happen, if you think about it, since '02. Speaker 1: Since 2000, really. Tony Mauro: Yeah. Since 2000. You start naming off the big events, and yes, the market goes down at times and then it comes back. So I think by pausing, you or your advisor, I would challenge you. You're not going to beat the market. If anything, you're going to lag it, and then when you miss the best days, I think it's really going to cause you harm. Speaker 1: I mean, even just the basic principles, Tony, your dollar cost averaging, right? So yes, the market's going to dip down. But if you're still working, for example, not only are you not getting the company match because you've paused it, so you're losing money there, but you're also not buying whatever it is that you're set up in on the dips, right? So, yeah. I mean, it's scary, I understand that, but it's a bad strategy. There really is no positive spin on saying, "I'm just going to pause things until it settles down," because nothing ever really settles down. That's why you have a plan. That's why you have a strategy. Then you don't have to necessarily worry about things settling down. And that really feeds to our last one, Tony, which is the old you just says, "My parents didn't have a plan and it worked out for them. I don't have a plan. I'll just hope for the best," right? That's just silly too, because your parents probably had a wholly different set of circumstances than you do, first of all, and hope is not an option. Tony Mauro: I don't think hope's an option in today's world, you know? When our- Speaker 1: Not from a financial standpoint, no. Tony Mauro: Yeah. From a financial standpoint, for sure. Back when the parents, people worked for the same employer generally for 30, 40 years, many had pensions that they can't outlive. Those days are all gone now, and it's up to us. Can't depend on the government or anybody else to finance our retirement. And so I think if you don't have a plan, yeah. There's a chance that you could make it, but I think the risk is there that you may not have the kind of retirement that you thought you would've, and why not just plan? It's not painful. It just takes a little bit of work. Especially if you have an advisor, they're going to kind of guide you and tell you what you need to give them. And then if they're good, they're going to say, "Hey, look. We want to meet once, twice a year, we want to go over this, we want to make changes, so you'll always know where you're at." I wouldn't want to risk my retirement with no plan. I mean, if you do, who knows? Speaker 1: Yeah, exactly. That's the whole point, right? You're kind of just playing with those things that you don't need to play with. I mean, in today's era, there's just really kind of no excuse for it, right? So get yourself a strategy put together. The days of thinking you have to be uber rich to have a financial advisor are long over, and most people are in better shape than they realize when they do sit down for an initial consultation with financial professionals. If you've done a modest job of being a responsible financial steward of your money, you're probably in better shape than you realize. I think a lot of people find themselves in that category. So do yourself a favor, get a plan, get a strategy, focus on the new year, new you financially, and reach out to Tony and his team at YourPlanningPros.com. That is YourPlanningPros.com. He's got 30 years of experience in the industry. He's a CPA, a CFP, and an EA, and a great resource for you to tap into. Don't forget to subscribe to the podcast on Apple or Spotify or whatever platform you like using. It's Plan With The Tax Man with Tony Mauro, and again, you can find all that information at YourPlanningPros.com. Tony, my friend, thanks for hanging out and breaking it down as always. I will see you in a couple of weeks. Tony Mauro: All right. Talk soon. Speaker 1: We'll catch you next time here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Today, we're unveiling the 2025 Method to transform your money mindset. Whether you're overwhelmed by debt, stuck in a savings rut, or simply stressed about money, this episode is packed with actionable strategies to help you think differently and achieve financial comfort.    Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: Today we're going to tackle the money mindset transformation method. Hopefully to get us on the right path for thinking in 2025, some positive thoughts and some resolutions maybe, if you will, here on Plan With The Tax Man.   What's going on everybody? Welcome into the final episode of the 2024 calendar year of Tony and myself's podcast here. Plan With The Tax Man. Of course, Tony is the tax man, Tony Mauro. He is Des Moines professional alternative at Tax Doctor Inc., of course, he serves clients all over. So if you've got some questions, need some help, reach out to Tony and his team at Tax Doctor Inc., online at yourplanningpros.com. That's your planningpros.com. He's a CPA, a CFP and an EA of 30 plus years experience in the industry. So great resource for you to tap into.   And Tony, you and I were talking about trying to eat better and get healthy and so on and so forth. And it is that time of the year, right? The end of the year going into the new season where we all want to do some sort of resolution or mindset change. And so we thought it'd be a good idea to maybe talk about that from a money standpoint. How to take some of the negative thoughts that kind of permeate our brains and find a positive better way to spend those. And so I thought that'd be fun this last episode. How you doing?   Tony Mauro: I'm doing good. Coming off Christmas and yeah, everybody's thinking about the old New Year's resolution, so this is perfect timing.   Speaker 1: Do you consider yourself a glass half empty or glass half full kind of person?   Tony Mauro: I'm the glass half full for sure.   Speaker 1: Okay, good.   Tony Mauro: And I do spend some time every year just kind of going through what I want to do for the upcoming year, both my wife and I, even on a personal level, whether it's vacations or just stuff needed around the house to financial moves. It's a time of year to put them down and see what happens.   Speaker 1: Yeah, for sure. Yeah, so if you've got any tips on how to change your mindset along the way and building new habits, well obviously it's a great time to share them. So what I'll do, Tony, is I'll give you kind of the negative thought that we tend to hear in the industry and then you give us maybe the more positive upbeat way of thinking about it, try to change that mindset. Okay?   Tony Mauro: Okay.   Speaker 1: All right. So we'll just jump around on my list here because Lord knows there's plenty of them. So let's start with a negative thought that's certainly been bothering people this past year with inflation being so high and the cost of living going up and credit card debt got a little out of control. People will say, "Hey, debt, it's ruining my life." They can't see past some of the charges they've ran up. What's a way to reframe those negative thoughts, if debt is ruining your life or you feel like it is?   Tony Mauro: You feel like it is, yeah. Well, and you hear that a lot and most of the time people say that because they look at their credit card statements because that type of debt can be ugly to start looking at. Certain types of debt really aren't as bad as people think. Mortgages are something most of us need. We can't buy our houses for cash. Student loans with low interest rates allow us to get further ahead and make more money with our educations. And so both of these generally are paying for assets that you can use in the future to hopefully help you increase your wealth and get to your goals. Now, the happy-   Speaker 1: It's an investment in yourself, right? Yeah.   Tony Mauro: It's an investment in yourself. If you do have the bad debt though, you need to work with somebody, even if it's bad, there are ways that you can tackle that bad debt. So eventually you're not going to be having that bad thought of it's ruining your life. You got to take action and do something about it.   Speaker 1: Yeah, it's true. So looking at the other types of debt and saying, "Hey, these are an investment in me," that's a positive way of doing that. And maybe that flows right along with this one too, which is the negative thought is, well, because it's so expensive right now, I don't earn enough to save, let alone invest. I'd like to, right? I'd like to save more. I'd like to invest, but God, I'm just living paycheck to paycheck. I don't earn enough to do so. And that's a tough one, especially when we're younger, so when we're in our twenties or even thirties, but we've got to find a way to turn that negative positive.   Tony Mauro: You do. And really the easiest way is to start very small. Well, I should back up a minute. The easiest way is you need to work with somebody I think, to figure out what you've got coming in and what you've got going out every month and literally detail it out. Because there are some small, small cuts that we all can make on things we blow money on to at least divert into some savings. I mean, if it's 20, 30 bucks a month-   Speaker 1: Exactly.   Tony Mauro: ... or 50 bucks a month, it gets you on the road to saying, okay, I can do this. And for most of us, whether it's a pack of cigarettes, a case of beer or Starbucks, whatever, once you start itemizing some of that out, you're thinking, oh gosh, we spend a lot of money on that.   Speaker 1: Amazon orders, right?   Tony Mauro: Amazon's another one. And so I think you got to take that mindset of surely you can find a couple of bucks, especially if you sit down and analyze it. Because if you start young enough, even small amounts can add up to big numbers over 20, 30, 40 years.   Speaker 1: Oh yeah, well think about something, I don't know, let me go with something as simple as like Netflix. It's a $30 a month subscription. So do you really need it? How much do you actually watch it? Now, I'm not saying that budgets are fun, but if you find yourself in that negative thought, out of that, I can't put anything away, $30 a month. If you're younger, well even if you're a little bit older, that adds up. 30 times 12. And putting in that something that's growing a little money, well then that's even better. So that's how you get that way.   And actually I'll use that one to jump to the next one. I'm going to jump around on my list here, Tony. But budgets, right? People are like, oh, budgets suck. They're restrictive. I don't want to have to live that way. And you could look at this whether you're a pre-retiree, which is a lot of our demographic, or retiree or even a little bit younger, you've probably lived on a budget throughout every stage of your life, but for some reason, retirees, they hate this word. They feel like, oh, I've worked really hard. I want to be able to enjoy myself in retirement. A budget doesn't mean necessarily that you can't enjoy yourself.   Tony Mauro: That's right. And everybody thinks that. If I create a budget and actually detail it out, that I can't go over this budget. That is so far from the-   Speaker 1: It's restrictive.   Tony Mauro: ... truth.   Speaker 1: I don't want to have to live on a plan. But you've always lived on a plan.   Tony Mauro: Whether you wrote it down or not, you've always had a plan. It may have been a bad plan, but if you ask anybody, in my opinion, what they.... They can kind of give you, "Well, I take in this much roughly, and I spend this much, and I don't know what I spend it on, but I know I do." That's kind of a half budget there. But if you can detail it out, all it is it points out things to help you make decisions. Do I still want to keep spending money on that or maybe I don't and want to divert it somewhere else? I have a budget. I mean, if you're really ultra into it, you need to use some financial software, in other words, Quicken, Mint, or some other ones, and have every transaction that comes in your household, every transaction goes out, detailed out in a little mini P&L or monthly saving or earning and spending report, so you can see.   For us, where we tend to spend a lot of money for example, is dining out. And sometimes we look at our thing and say, "Well, we spent a lot of money last month dining out, that's kind of over where we want to be. Maybe let's try to fix that."   Speaker 1: Reigning that in a little bit.   Tony Mauro: That's all budget is, is just reigning it in.   Speaker 1: Take that negative thought of it being restrictive and switch it to a budget is a tool for freedom. It gives me the freedom to go out to dinner, to your point you just made, because I know what my limits are. So we can go out and have ourselves a good time, but it also keeps me from getting myself into trouble. So again, taking the negative thoughts and reframing them in a positive manner. And look, you can play word association games if you want. A lot of people, instead of calling it a budget, they call it a spending plan, right? It's like, okay, fine, call it whatever you want. Call it hopscotch for all I care. But just realize that it can be a useful tool so that you don't get yourself into bad shape.   Okay, good. Good stuff. Let's see, what else could we talk about? Let's jump around different things. Taxes. So one of your favorite topics. So look, the negative thought is taxes suck. They're complicated, right? I don't get it. They eat up my income. They're taking so much of my money, right? Yes, it's hard to argue this one, Tony. It's frustrating, but how can we be a little bit more positive, at least as far as dealing with the fact that we don't have a whole lot of choice. We have to play this game.   Tony Mauro: You have to play the game. And taxes, you're exactly right, they're complicated. They are one of our biggest expenses. However, as bad, and sometimes I get on the government and everything, it's not like the old English where they just come around and say, pay us X, like to a king type of thing. They give us all kinds of laws that a lot of times, especially if you're trying to do things on your own, you don't take advantage of. Because there is some opportunities that they give you to save for retirement. They give you opportunities for deductions if you're out spending on a new house with a mortgage, student loan interest, some of that stuff we all talked about with the debt. So you've got to be able to take advantage of some of that because that is tax efficient investing and also spending. So while it's a bad thing, you got to use it to whatever laws are on the books at the time to the best of your advantage and to try to grow your wealth using that part of the game.   Speaker 1: Yeah, exactly.   Tony Mauro: It's part of it.   Speaker 1: And right along with that is the structure of the system that we have is investing. The negative thought being, man investing is so risky, it's so complicated. Same kind of feeling. A lot of people are like, I want to do it, but I don't understand it enough or it intimidates me. So we've got to be able to be positive because it's still a great way for you to grow your wealth and obviously outpace inflation. So what's the positive spin?   Tony Mauro: I think the positive spin on that is your best bet is to work with an advisor of some kind so that they can explain how over the long term, it reduces your risk over time, especially with diversification.   Speaker 1: With a strategy, right?   Tony Mauro: With a good strategy. It's one of the only ways you're going to be able to grow your wealth for the future. There are other ways. You can have your own business, you can get into rentals. There's all kinds of ways to make money, but you got to be able to save some of that money for the future. And I think that's where some people get a little intimidated, especially with the 24/7 information we have coming at us all the time. I mean, whether it's TV, internet, everything else, it's really not that complicated, especially if you have a long-term goal.   Speaker 1: I was going to say, the key I think I took from you there was the long-term approach. If you've got a straightforward long-term approach, you don't have to be trying to day-trade or be some sort of Wall Street whiz kid, but a simple longterm approach can significantly reduce the risk concerns that you have. Now, you're still going to have money at risk. That's the point. So that you can kind of grow and outpace inflation. But I think it doesn't have to be nearly as intimidating as many of us initially make it out to be. My wife says the same thing. She's like, "Oh, I don't want to mess with that stuff. It just scares me too much." So I started showing her some simpler things and she's like, "Oh, this is not so bad." So it's just a matter of coaching.   Tony Mauro: Training. It is. And really with today's, especially in the funds area, mutual funds, they make it pretty easy, and they have great portfolios, many of them, and make it very easy for a small investor to just get started and it's pretty set it and forget it. You got to have a plan in place, but you definitely want to keep a long-term approach. And I wouldn't let that get you too down about it.   Speaker 1: Yeah, yeah, for sure. All right, well I'm going to do one last one, negative thought. I'm going to combine two because they kind of work together to me. But the negative thought people have is just around money in general. I'm terrible with it. It's stressful. I make bad decisions with it. Whatever. Whatever you kind of find yourself feeling about money. Like, "This thing, I stink at it. It just stresses me out." Well, there's a simple way to think, you've got to change your mindset about money because it's obviously something that we have to use in society. So what's the positive thought about it?   Tony Mauro: I think the most positive thought that I always think about, and I tell my son this too, everybody wants to achieve whatever level of wealth that they can. But it really just is a tool, I call it a tool to use for experiences that I want to do while I'm on this planet and give me the time that I can go out and do them while I still have-   Speaker 1: Yeah, it's a tool. Exactly.   Tony Mauro: ... some decent health.   Speaker 1: It's no different than a hammer. If you're trying to build a house, you need a hammer. If you're trying to build a life, you need money. It's a tool.   Tony Mauro: It's a tool. I mean, it would be great if we all could do whatever we want and there was no money and we just did whatever we wanted and we could do it. Well, that's not the way the world works.   Speaker 1: You just showed up at Disney World and they let you go around and do whatever you want. Unfortunately, somebody has to pay for the maintenance, right?   Tony Mauro: Somebody has to pay for all that. So it shouldn't be stressful for you. It shouldn't be the root of your problems. But I think this is where some of the stuff we've talked about in the past and even today, about staying on track and having a plan and having someone help you so that you don't feel stressed out about this money stuff because it really shouldn't be stressing you out.   Speaker 1: Well, as we go into the new year, making resolutions is something we all do. So start trying to be more positive, I think, in not just necessarily making a resolution or a wish, because is it a reality if you don't act on it? Maybe write some things down. That goes a long way for people, have success doing that. Maybe write down some goals that you want to attain and then take some action steps on how to do that. And maybe for many people, the money side of things is just finally working with someone who can shine the light on the stuff that we're just not used to doing day in and day out because we're so busy living our lives. But we do need that tool, that tool called money.   So get yourself on the calendar, reach out to Tony and his team at yourplanningpros.com. Get some time to talk with them in the New Year at yourplanningpros.com. And don't forget to subscribe to us on Apple or Spotify or YouTube, whatever platform you like listening to podcasts on, and that way you catch new episodes when they come out. Tony, thanks for hanging out my friend. Have a great New Year and I'll see you in the New Year.   Tony Mauro: We'll see you in the New Year and everybody else have a great New Year as well. Stay safe.   Speaker 1: Yeah, absolutely. We'll catch you next time here on Plan With The Tax Man with Tony Mauro from Tax Doctor Inc.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

The holiday season is here, and while you're stuffing stockings for your loved ones, don't forget to stuff your own financial stocking with tips that can bring you closer to a secure retirement. Today, we're unwrapping 10 bite-sized, actionable ideas to help you save smarter, invest better, and plan for the future you deserve.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: The holiday season is upon us. And while you're stuffing stockings for your loved ones, don't forget to stuff your own financial stocking with hopefully some tips that can bring you closer to a secure retirement. Today on Plan With The Tax Man, let's look at some financial freedom and some best stocking stuffers in 2024.   Hey everybody, welcome in to the podcast. Thanks for hanging out with Tony Mauro and myself as we talk investing, finance, retirement. We thought we'd have a little fun here. As this is our early December episode, we're going to unwrap a few action items to hopefully help you be a little bit better on your way towards retirement with Tony and just have a little fun with this concept since it's that time of the year. What's going on, my friend? How are you?   Speaker 2: I'm doing good. Just off of Thanksgiving and a quick vacation. So although it's getting cold here, it's the holidays, so. My favorite time of year.   Speaker 1: It is what it is. I mean, it's that time of the year and it comes fast and furious too. It's like soon as one starts, it just, well, snowballs, no pun intended, but it just snowballs its way through to the end of the year. But anyway, well, I'm glad you're doing well. Hopefully our listeners are also. And so let's have a little fun here. Why we might want some of these things as financial stocking stuffers, okay? Is it a good idea as a stocking stuffer? Is it a bad idea? That kind of thing. Have a little fun with it, wherever you want to take it.   Speaker 2: All right.   Speaker 1: All right, so I'll give you the item. You tell us what you think. All right, so the first one, maxing out your retirement contributions. Is this something you'd like to have in your stocking, is to max those out?   Speaker 2: I would say definitely, yes. And for those of the people listening that are in the Iowa area, I actually brought the newspaper article in to share with my staff and it was an article about people that are mostly in the central Iowa area just living on social security. And it's a sad article and I'd encourage people to read it, but the point of it was you don't want to end up just living off social security, which means that, and I tell people this literally like a broken record every tax season, you need to increase your retirement contributions to whatever you're doing. And if you haven't started, you need to start because nobody's going to be there to take care of you and social security, while it's a safety net, it's not a very good existence. And so I would definitely say that's number one on my list.   Speaker 1: Yeah, max it out. Especially as we get to 50. 50 plus, you get those catch up contribution stages, making more money than ever hopefully, kids are off the payroll hopefully. So max those jokers out. Certainly a good idea for a stocking stuffer. All right, diversifying your investments. If somebody says, "Hey, Tony, for Christmas this year, I'm going to help you diversify your investments." That sounds like a pretty good stocking stuffer.   Speaker 2: Absolutely. It goes right along with number one that you definitely don't want to have too much of your investments, of course, concentrated in one area. The old adage, and you still hear some people having it where I've got all my 401(k) wrapped up in my own company's stock. That's probably not the best, that's an extreme example. But I do think you need to be diversified. This is where an advisor can certainly help you and provide some value to make sure you're adequately diversified so that you've always got something in your portfolio that might be doing well when other sectors may not be.   Speaker 1: Yeah, yeah. And to kind of have fun and play on the holiday spirit here, again, you said you want a qualified professional, an advisor to help you. Yes, that is the preferred thing. Not just having Cousin Eddie from the Vacation movies. You don't want Cousin Eddie helping you diversify.   Speaker 2: We don't want Cousin Eddie. No, no.   Speaker 1: We don't want that. We want a qualified like Tony helping us. Same with all of these. So what about reviewing our social security strategy? So good time to think about that and say, "Hey, you know what? For Christmas, I want to make sure my social security strategy is sound as a pound."   Speaker 2: And of course all of these coming around Christmas, it's kind of coming into the new year where people start to think about this. But social security strategy and when to take it, that's always a big question on people's minds as they approach 50 and beyond. And there's some nice calculators that we have that can help you and that we can discuss that on what's the best optimization strategy for you because it's different for everybody. Yes, social security, you can take it early at 62 and then you've got a full retirement age and then of course the latest. But depending on your situation and longevity and all kinds of other things, I think it's important to review that. And believe it or not, social security administration does make it relatively easy to go out and get your report online. And if you can't get it, we'll help you get it, but I do think that's very important.   Speaker 1: Yeah, that's a great point for sure. And speaking of optimization, our next one is optimizing tax efficiency. Well, as a CPA, I know you're all on board for that one.   Speaker 2: I am. This is my big pet peeve, because I talked to a lot of people about yes, you might be working with an advisor or maybe you're not, but are you planning with a tax efficiency slant or making sure you optimize or reduce, let's put it should be, taxes because it's usually the biggest thing in our whole life is paying these taxes, whether it's now or deferred. And you really have to try to maximize your tax savings all throughout the investment life. So that's the one we hit on, is that and everything we talk about.   Speaker 1: Yeah, I mean, tax efficiency is going to go a long way. I mean, none of us want to pay taxes. We don't like the... We get taxed to death as it is, but the rules are the rules, so we have to adhere and follow along. But you can be efficient and hopefully pay as little as legally possible.   Speaker 2: Exactly, you got to use them to your advantage.   Speaker 1: That's right.   Speaker 2: Yep.   Speaker 1: Play the game as best you can.   Speaker 2: Best you can, yeah.   Speaker 1: Yeah, for sure. Okay, so another stocking stuffer idea, Tony, would it be a good thing to boost that emergency fund?   Speaker 2: I would definitely say yes. Another thing we talk about with every client that we work with is it's amazing how many people don't have emergency funds and it's never a bad idea to boost it to a level where between you and your advisor agree upon. It's a little different for everybody, the old adage three to six months of income, but it could be different for different things. But boy, it's essential to have that at least until you're at retirement age and then you can back it down some, but it's not a bad idea to even have it in the wealth distribution stage just for those things that pop up. So we do like to go over that. We do like to make sure that people, even if it's just a few bucks every month to get that boosted every year.   Speaker 1: Got you, okay. I'm going to throw a bonus one or two in here at you as well, Tony, catch you off guard a little bit. Not that you don't talk about this enough stuff, you'll be just fine, but based on what you were kind of talking about right there, it made me think about something else. Should we, at the end of the year, we're thinking this is our early December, we're talking stocking stuffers. What about rebalancing our portfolio? Is it a good idea calendar wise, maybe every December or every January to just kind of take a look at things and make sure we're rebalanced properly if we don't have someone like yourself doing it for us?   Speaker 2: I definitely think it is. If you are working on it on your own, you definitely want to go in and rebalance toward the end of the year right after the first to make sure that you're continuing with your original investment philosophy. And because what happens is is if you've got say 10 different investments over 10 different sectors, some of those sectors are going to do very well during the year and some are going to do worse.   Speaker 1: And the market's done great, the last year.   Speaker 2: Yeah, market's done great.   Speaker 1: But you may have a couple of dogs in there.   Speaker 2: Yeah, and so what you want to try to do is rebalance so that two to three years go by and all of a sudden, let's say for example, your growth sector is now 75, 80% of your portfolio, that might be out of balance with what you originally wanted to have in the overall strategy. And so by doing that, you also in essence kind of sell high and buy low, because you're going to rebalance and you're going to keep that balance so that when sectors that were doing poorly start to perform, you're adequately invested in those. So I do think that's a very, very good idea.   Speaker 1: Yeah, and it's been doing really well. The market has to give and take. The market rebalances, if you think about it, that concept of you want to rebalance your own portfolio, well, the market has to rebalance itself and we're probably going to see some volatility coming into the new year with new changes and things happening and administration changes. And I think ultimately, I think if you look at the statistics, Tony, just about every presidency, the market tends to go up, but there is going to be some shakes along the way. That's what it does. It's par for the course.   So rebalancing is a good way, especially at the end of a good run like we're seeing right now to maybe make sure you're still aligned with your risk tolerance and all those good things. So good conversation piece to have. Let's do two more and then we'll wrap it up this week, Tony. How about considering Roth conversions to reduce future taxes, especially now that we may see, we don't know yet, we'll see probably in the first a hundred days, but we may see the current tax cuts and jobs acts extended moving past '25, which it was set to expire on. So that could be a good stocking idea.   Speaker 2: It could be a real good stocking idea. I'm big on the Roth conversions to reduce future taxes. Especially what we do is basically fill up the same tax bracket of clients in, convert some tax deferred to tax-free, which is the Roth conversion, and then try to do that every year and not bump them into the next tax bracket where they're paying more taxes. But I agree, depending on what happens, whether these things are extended beyond '25 or not, it could make more sense than ever to maybe start doing that depending on the news that comes out.   Speaker 1: Because if they don't make a change, your window's pretty limited. You've got basically just a year left to do some conversions and you want to do that smartly so that you're not bumping tax brackets. But if they extend it, well now you can get back to that Roth-ing over time conversation.   Speaker 2: Exactly. And if they don't extend, going back to that's the whole optimizing for tax efficiency is making sure that you're getting enough into the tax-free bucket, but doing it wisely and not needlessly overpaying on taxes, it's not going to ruin you. But why pay more in taxes than we need to?   Speaker 1: And so many people aren't clear on how the steps work. You want to fill up the steps before you go to the next bracket.   Speaker 2: Exactly, exactly. So they don't understand. They forget about the progressiveness of the tax rates, where that comes into play and when we can show them that they can, if we only fill up this bracket, then we can save quite a bit of taxes and trying to do it all at once.   Speaker 1: If you're in the 22% tax bracket, someone's like, well, every dime I make is taxed at 22% and that's not accurate.   Speaker 2: True. Yeah, it's not accurate. And as soon as you go a dime over the limit, now everything beyond that limit is 24.   Speaker 1: Beyond that limit, exactly. So even if you did pop a bracket, it may not be the worst thing. It just depends on how much. So again, it's about filling up the brackets and doing it properly. So that's where again, you want to work with a qualified professional to help you with that stuff because it can get a little tricky. And the IRS make things tricky, no. So yeah, definitely work with someone like Tony's, a CPA and a CFP. And that brings me to my last one, which is just schedule a conversation. So for a stocking stuffer, it's a good stocking stuffer, schedule an annual financial checkup, or maybe even a first time checkup, Tony, with a qualified pro to see where you're at.   Speaker 2: I agree. And of course I have a skin in the game because what we do for a living, but obviously if you have a financial professional already, hopefully they've reached out to you or you're at least getting an annual meeting out of that, because you do need a financial checkup to see how things have gone throughout the year for you. And even if you're on your own, a lot of people will provide free financial checkups or at a small fee and you can bring them in your portfolio and everything else you've got going. And they can sit and tell you, number one, I mean, returns and diversification, some of this other stuff we've talked about, but they may hit on some things in a plan that you haven't thought about. We don't have a lot of time to talk about today, whether it be insurance, long-term care, social security planning, some things like that. Maybe a legacy and estate planning as well. So it's definitely worth at least getting an unbiased opinion.   Speaker 1: Yeah, definitely. And so certainly would be a good stocking stuffer for yourself to say, "Hey, I'm going to get off my duff and I'm going to go talk with a qualified professional and see what's going on, see where I'm at." Maybe it's a second opinion on a plan you got a couple of years ago. Maybe it's a first opinion, or maybe it's just an annual checkup with your advisor, but you haven't talked to him for a little bit and you're thinking, "I want to make sure things are all set up. My ducks are all in a row, so to speak." So that's our podcast this week. So hopefully you guys had a little fun and enjoyed the conversation with Tony and I as usual to try to highlight some useful nuggets of information when it comes to getting ready for retirement.   And as always, if you need some help, reach out to Tony and his team at yourplanningpros.com. That's yourplanningpros.com or call him at (844) 707-7381. We'll have that information in the show description links as well and you can check all that good stuff out. Tony, my friend, thanks for hanging out. I always appreciate you and I guess we'll talk right after Christmas, so I'll say Merry Christmas to you.   Speaker 2: Yeah, Merry Christmas to you and anybody listening. Have a great holidays.   Speaker 1: Absolutely. And we'll see you next time here on Plan With The Tax Man. Don't forget to subscribe to us on Apple or Spotify or whatever app you like using. Just type in Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.  

It's hard to believe that election season is over and Thanksgiving is almost here! This week on Plan with the Tax Man, we're diving into the future of the Tax Cuts and Jobs Act now that the election results are in. Join us as we explore what changes could be on the horizon and what to expect moving forward.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: This week on Plan With The Tax Man, let's talk about the future of the Tax Cuts and Jobs Act, the TCJA now that we know the results of the election. So let's get into what could be on the horizon in the coming years here this week on Plan With The Tax Man. Welcome into the podcast everybody. Thanks for hanging out with Tony Mauro and myself. Tony of course, a CPA, CFP, and EA with 30 plus years in the industry helping folks get to and through retirement. And he's at the Tax Doctor, Inc. You can find them online at yourplanningpros.com. That's yourplanningpros.com. And Tony, happy Thanksgiving, my friend. We are taping this a little before and dropping this podcast just a few days before Thanksgiving. So happy Turkey Bird Day to you, my friend.   Tony Mauro: Yeah, same to you and everybody else.   Speaker 1: Absolutely.   Tony Mauro: It's getting that time of year.   Speaker 1: Absolutely. Exactly.   Tony Mauro: Yeah.   Speaker 1: So hope everybody enjoys the holiday and hopefully we're just going to do a little speculation here this week, Tony. We know now, obviously President Trump is the, Trump President-elect, right, coming in here in January. And so one of the big questions and one of the big things I think that has people, especially in our demographic and the people that you serve and your clientele is what that might mean for the future of tax cuts. Right. So all through the Biden administration, we kind of wondered were they going to make any tax cuts changes or tax rate changes or anything. They never did. And then of course the big kind of question was, well, if Harris wins, will we see the Tax Cuts and Jobs Act go ahead and expire at the end of 25 like it's supposed to, or would we see a new tax program?   Well, now that we know Trump is coming back in, I think it's probably a safe assumption to say that he's going to try to either extend the TCJA or maybe even make it permanent. Right. So there's conversation around that. So I thought we could talk a little bit about what that might mean for retirees, pre-retirees, and just from a planning and thought kind of process should that happen.   Tony Mauro: Yeah. And I think now that hopefully everybody's emotions are calming down a little bit, depending on,-   Speaker 1: We hope.   Tony Mauro: Won or lost.   Speaker 1: We hope. Right.   Tony Mauro: Half of everybody is mad and half of everybody is happy. And I think the big thing with all of this is, and I've been putting it out in our newsletter since the election is even though it may not have gone your way, life is not going to change all that much for you. I mean, you need to be aware of some of these things and how it impacts you and how to use it to your best benefit. Because the end of the day, we go back to doing what we do and trying to make the best of what we've got and so,-   Speaker 1: Right. And we know that fiscally our country's in really bad shape and whatever changes they're going to be working on is not going to happen overnight. It is going to take a little time. They're going to break some eggs along the way. It's not going to be a totally smooth process. I mean, we're in pretty bad shape, Tony fiscally. Right. So it's going to take a lot of work to kind of right the ship. And obviously the voters voted for hoping that prices come down, getting a better grip on the economy. That was one of the biggest poll movers, I suppose, in that conversation. So with that in mind, let's talk a little bit about that TCJA standpoint. If again, this is if, but since they're going to have the House and the Senate, it appears there's a likelihood that they're going to get this passed through at least if nothing else, an extension. Let's just start there. That's good from the fact that tax rates are historically low, right, for the common everyday working American tax rates are historically low. So that's a good place to start.   Tony Mauro: It's a good place to start. Yeah. And from a taxpayer standpoint, who doesn't like low taxes?   Speaker 1: Right.   Tony Mauro: And me included. And so that's beneficial. Now the big picture, like you say, our financial situation as a country, we already know, everybody knows that Congress tends to spend way more than they take in. And that,-   Speaker 1: Sure.   Tony Mauro: I just read an article the other day about the TCJA, that if they extend it, it could, it could add another 2.6 trillion to the deficit over the next 10 years.   Speaker 1: Correct.   Tony Mauro: Which from a fiscal standpoint, it's like, ooh boy, we're already in bad shape. This is going to make it worse but,-   Speaker 1: Well, okay, so let's kind of talk about that. Let's break that down a little bit for a second. So if you think about it, the reason they put it in the way they did, right, for the number of years, what was it, seven years I think when they put it in?   Tony Mauro: Yeah, seven years.   Speaker 1: Was because they said they were worried about it ballooning the deficit. Well, obviously the deficit's gotten out of control anyway, so,-   Tony Mauro: It is.   Speaker 1: Keeping the TCJA is I think it's, we talk often, Tony about having a three-legged stool for retirement. Right. And I think that's what the leaders are going to have to do from a government standpoint. One is going to be promoting job growth and keeping tax rates low for paying Americans. So again, maybe extending the TCJA, but to your point, it could add to the deficit. So spending has to get under control. I think that's the second piece. Like the conversation, don't like the conversation, but the idea of this department of government efficiency that's being tossed around out there and cutting some of this incredibly wasteful spending that we do, and let's be honest, we waste a lot of money, could make a huge impact and maybe offset some of that cost of the TCJA plus the tariff conversation. Right.   Tony Mauro: Yeah. I think all that is part of what I feel like are,-   Speaker 1: The big picture, right?   Tony Mauro: Policy decisions, yeah, that has to be made by this and future administrations and try to work towards figuring this out to.   Speaker 1: Right. Because it's $36 trillion. You can't fix it with just one thing. Right.   Tony Mauro: No, you cannot.   Speaker 1: So that in mind, that in mind about the ballooning, just from that standpoint, we get that as far as a bigger picture that they have to work on. But what does it mean for everyday Americans? Well, I think one of the places, Tony, besides just having low tax rates, which is good, and the narrower brackets versus going back to the wider is the conversation about, well now it gives you more time to Roth over time. Right. Because if people were talking about doing Roth conversions at these historic low tax rates, well you only had until the end of 2025 to get them done. So your window was narrowing. If again, if they extend the TCJA, that could make planning a lot easier for you for your clients if they do need to do Roth conversions over time.   Tony Mauro: Absolutely. And we're looking at it from that standpoint now that it's over, that we're going to be harping on our clients, assuming they extend this, is to take advantage of this because we don't know when they're going to either reverse it. And I always liked that word, you mentioned it earlier, permanent. Of course, Congress changes stuff.   Speaker 1: Right. Nothing's ever permanent. Yeah.   Tony Mauro: Never really permanent, but it's harder to change when it's permanent rather than just let it expire. So it's important to take, like I say, it doesn't matter who's in office, we have to take advantage of what they are allowing us to do or giving us or legally.   Speaker 1: Sure.   Tony Mauro: And making sure that from a financial planning standpoint, it helps all of us if on these Roth conversions and whatnot, because I'm a big fan of them, is to set yourself up for a good retirement, for that end game. So I think that's extremely important.   Speaker 1: Yeah. And it does give you guys a lot more of a window to plan, again, it's the devil that you know. Right. So if we know the tax rates, let's just, we're working off an assumption, but think about when you sit down with a financial professional, they're putting information into the software. They're still working off of assumptions, right, assuming that you don't lose your job or assuming this, this or this and that you can run scenarios for social security at this amount, plus you could run social security projections at the lower amount should they not fix that. Right.   So a lot of what you guys do is assumptions, right? You can put some good educated guesses and you can put stuff in the software and get a good picture, but life changes, things happen. So let's just again, run the assumption that the TCJA gets at least extended through four more years. Let's just say if nothing else through Trump's presidency. Well then that gives you four years of planning strategy around some things to try to get done while we are again in these historic low tax rates. And that can be very valuable.   Tony Mauro: I think so. Yeah. And going to the other side of it a little bit,-   Speaker 1: Sure.   Tony Mauro: Let's say they let them sunset.   Speaker 1: Okay.   Tony Mauro: Now, America's tax bill increases by 2.6 trillion over the next decade, which will help cut into the deficit, but it's going to impact consumption and growth and everything else because if everybody's paying more taxes, then they're going to stop spending, which poses problems from,-   Speaker 1: The economy standpoint. Right.   Tony Mauro: From the economy standpoint.   Speaker 1: Yeah.   Tony Mauro: And so it really is a tough job to try to balance all this.   Speaker 1: Oh, for sure.   Tony Mauro: And try to make it work.   Speaker 1: And we're not even talking about the conversation that they're having as far as maybe lowering corporate tax rates even a bit more. So under Trump's first presidency, he brought it down to where it's currently at, at the 21, I think it's 21%,-   Tony Mauro: Yeah.   Speaker 1: For corporate tax. That brought a lot of business back to the country. Right. A lot of companies, I mean, think about the Apple conversation. Apple brought $250 billion back in when that happened. By lowering that to 15, yes, there's the worry of ballooning the deficit, but again, the idea is to spurn on job growth and economic growth. Then again, coupling that with tariffs on certain things, which again, the tariffs he put in place, the Biden administration, they left them in place. So obviously they were working in that regard. So again, I think it's one of these pieces where it's going to take a while for us to see the end results of this, but I think we can, it feels optimistic that we could make a dent, right, in this massive debt by doing some of these things and also pull the country a bit forward.   Now, who knows, there's a long way to go, right, Tony, and of course the big key, the first thing is going to be the energy dependency. And that's of course, that's one of Trump's big things, is on day one he's going to get the drill baby drill going again. Right. And so people think about that. If we start getting more energy independent right from day one that he takes office, we're not going to feel that in the streets for a little while. Right. Transportation costs and stuff like that, they'll come down, which will bring groceries down eventually, but it will take a few months.   Tony Mauro: It's going to take a little while. Yeah. I mean, nothing they're going to do, like you said before, is going to have an immediate impact. I think for most of us, you want to see, like you said, country moving potentially in the right direction. Of course, everybody's got their own opinion on what that direction is, but,-   Speaker 1: At least fiscally anyway, right?   Tony Mauro: Yeah. Yeah. Fiscally, I think we all can agree that nobody likes to see this kind of deficit and whatnot and constant different administrations continuing to,-   Speaker 1: Yeah, add to it.   Tony Mauro: Yeah, add to it, not do much about it. Then we've got all these problems on the side that nobody really seems to tackle until it's really at the last minute.   Speaker 1: Because we're really mortgaging, not necessarily you and I, Tony, our future, but we're certainly mortgaging our grandkids future,-   Tony Mauro: Absolutely.   Speaker 1: At $36 trillion and climbing. Somebody's paying this bill somewhere at some point. And we think back to the deficits we've had before, and we kind of took care of that into the Clinton administration. And I was talking with, we talked about this before, I was talking with former US comptroller, David Walker, who was part of that, and he's like, "Bill Clinton was the last fiscally responsible president we had." That says something. Not from a party standpoint, but from the fact that we've had multiple administrations since Bill Clinton and none of them have been fiscally responsible. So we've got to get back there. And yes, Trump was already president and they weren't necessarily fiscally responsible. So hopefully he's learned as well. And we try to get in that regard because think about again, what you guys do. If you are trying to help somebody plan for retirement and they come in and you've got the X's and O's, the exact number, what's happening with their income and they're not being fiscally responsible, their retirement strategy is not going to work.   Tony Mauro: Not going to work. We're the ones that have to break that to them and try to figure out some options to help them try to make something work.   Speaker 1: And they have to make changes. Right. Your options are spend less, right?   Tony Mauro: Yep. Yeah.   Speaker 1: Save more. So there's only certain things you can do, and that's where we're at as a country as well.   Tony Mauro: I think it is. And I think you go to the countryside and say, well, okay, you can tell the politicians to spend less if you can get them to do that. But then I think they tend to divert things to other things that they want to do rather than spending less. But I think where they really fall down is, and sometimes it's the tough decision when we're talking to our clients where you have to save more is sometimes they may have to say, look, guys and gals or country, we've got to raise taxes or we got to come up with some ways to make some money somehow, and this is what we've come up with. And nobody likes to hear that.   Speaker 1: Oh, for sure. I mean, I got a feeling that they're going to take a look at this and while we might extend the TCJA, they do want to make some changes. The SALT tax, there's some changes there. They're talking about putting itemization back in, which could be very helpful for citizens into their tax planning. But we could be looking at a slight brazen Medicare tax. Right. So that may be necessary as well in order to help fund that whole situation. So you're not going to make an omelet without breaking a few eggs.   Tony Mauro: That's right. That's right. And we've got all kinds of issues. I think, like you say, social security is one of them. Coming down the pike that's going to get more and more attention as we get closer to those deadlines and yeah, they're got to make some tough decisions. And sometimes they're going to be a little bit unpopular, but I think they probably could do a better job of at least when they do come up with some things, conveying it to the American people a little better.   Speaker 1: Well, the TCJA is going to be a big focal point. We'll see how that goes. Probably within the first 100 days we might see something there. We may not. Right. Because it doesn't expire until the end of 25, but obviously that's starting next year. So I got a feeling it's going to be early on the docket, so it could be something that happens in the first 100 days. And again, we're just speculating, spitballing a little bit here this week on the podcast. So we'll certainly keep an eye on it Tony. As the administration starts and executive orders start to fly, we'll start to kind of see how these things affect not just the market, but other pieces. And when you think about the market standpoint, it obviously reacted very favorably to the election. It slowed a little bit, but I think it seems to be fairly positive for now.   Tony Mauro: I think so for now is right. I think yeah, that election euphoria has kind of subsided a bit, but nevertheless, we're still chugging along. The economy even with higher prices and whatnot is doing pretty well. I think it'll help if rates come down and,-   Speaker 1: Yeah, our unemployment numbers have been climbing obviously, and there was some fudgery there, so I think we've got a little bit more unemployment than we hoped for, but we'll see as the year winds down. I know there's some companies out there laying off and hopefully they'll be able to, and again, I think that's the idea behind some of the job growth. Right. Keeping the tax rates low will help spurn on the job market. So it's a fine line. It really is incredibly complex when you start to think about it. And it's the same thing with what you guys do, helping people plan for retirement.   Tony Mauro: Yeah. And I've only been to Washington DC a couple of times both on business and got a chance to get in front of our Iowa Congress people, and it's fascinating to see how, we all complain about them, but how our government, how massive it is and how it does seem to work with all of its problems, we plot along and it's just an incredible beast.   Speaker 1: Yeah.   Tony Mauro: You have to try to get things done and make decisions.   Speaker 1: It really is. Yeah. And some would say maybe a little too big, so,-   Tony Mauro: Yeah. Yeah. Maybe.   Speaker 1: Too big a government is not a good thing. So hopefully we'll see some of the reduction in there. And that could help. And again, this is going to be like a three-legged kind of milking stool, same kind of idea. They're going to have to do multiple moving parts to get us in a better space, but we'll keep an eye on things. We'll talk about things here on the podcast and try to shed some light on them. But at the end of the day, you really, as Tony said, to start this whole thing off, you have to kind of build and structure a plan, Tony, that's going to weather whatever administration and whatever happens to come down the pike because we don't have a lot of control.   Yes, we used our voice to vote. Obviously that was very resounding this year for Republicans. They won all three. It appears as well as the majority vote, the popular vote. So we'll see, right? I mean, but we can do that job there. But at the end of the day, you still want to strategize and have a plan that kind of deals with the ups and downs of life because life will keep trucking along.   Tony Mauro: You do. I would say after the first year, my advice would be to get with your advisor or find one and have them explain some of this to you and how it could affect you individually, whether it's on taxes or how it's going to affect your financial life.   Speaker 1: Absolutely. Yep. So if you need some help, reach out to Tony and his team at Tax Doctor, Inc. Again, he's been helping families for 30 plus years. He's a CPA, a certified financial planner and an EA. So great resource for you to tap into. Just give them a jingle or reach out to them online. We'll have all the links in the show notes here for you to check out. But you can go to yourplanningpros.com to get started. That's yourplanningpros.com to get started. And again, we'll have that information in the show descriptions of the podcast. And don't forget to subscribe to us if you would be so kind on Apple or Spotify or whatever platform you like using. If you enjoy the content and find it useful, you can also share that with others who might benefit from the messages as well. And we'll see you next time here on Plan With The Tax Man. Happy Thanksgiving once again to everybody out there and Tony, you as well, my friend.   Tony Mauro: All right, we'll see you next time.   Speaker 1: We'll see you in December here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

You wouldn't necessarily expect Mike Tyson, Shaquille O'Neal, or Lindsay Lohan to dispense valuable insights about financial planning matters. In fact, you'd probably expect the opposite. But with a little bit of creativity, we can get some financial planning pearls of wisdom from even the most unlikely of sources.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: This week on Plan With the Tax Man, we're going to talk about unlikely financial wisdom you wouldn't expect from the likes of Mike Tyson or Shaquille O'Neal or even Lindsay Lohan. So let's find out what we're talking about this week here on Plan with the Tax Man with Tony Mauro.   What's going on everybody? Thanks for tuning into the podcast. We're dropping this about a week after the election, and we taped it ahead of the time, Tony, just in case the world was goofy. Plus you went out of town, so you were smart.   Tony Mauro: Yes.   Speaker 1: You ran away during the week of the election. You did your voting prior to, so very cool. And then you got out for a little trip and just tuned out the noise. I bet that was genius. I'm jealous. How you doing, my friend? You doing all right?   Tony Mauro: I'm doing well, yeah. Well rested and yes, I didn't plan the vacation like that back when I planned it, but it kind of worked out.   Speaker 1: It kind of worked out. Yeah. So since you're catching this after the election, but we're taping it beforehand because Tony is leaving, as I just mentioned, that we don't have a conversation for that. So, we'll probably save that for the next podcast to talk about what's going on in the world. So for now, we thought we would do one that was simple and easy and just do some unlikely financial wisdom with some characters we might not have expected financial advice from.   And look, they weren't saying these quotes to be financial advice, but with a little bit of creativity, I think Tony and I can turn those into some. So, let's start with a child actress who had some trouble as a teen, I guess, or a young adult or whatever, got herself into quite a bit of trouble and very scandalous kind of character in the Hollywood scene. And that was Lindsay Lohan, right? So, wound up making some movies when she was younger. Then she wound up getting into some trouble and kind of being very polarizing and so on and so forth.   Here's a quote, and it's a great quote, and it's especially when someone who's struggling with whatever they're struggling with in life, Tony. She said, "I'm my own worst enemy, and I know that." And that's key to fixing whatever problem you have in your life, be it your Hollywood career or your finances. If you know you're your own worst enemy, it can really help you not make more mistakes by maybe getting involved with someone like yourself who can help you battle yourself, if you will.   Tony Mauro: I agree. And with Lindsay Lohan, I'm sure... Well, I think it's a profound statement by her because obviously I don't really follow her much other than what I used to see when she was in trouble, but obviously she must have found some wisdom to make a statement like that, to at least recognize that she had some issues. And hopefully, I think she's got them cleaned up now. I don't know. But in relation to financial planning, there's a lot of truth to this because most people are their own worst enemies because one, they tend to overreact, they tend to be very emotional, especially if they're trying to dive in and out of the markets and time it and things like that.   And then they become their own worst enemy because they overthink things and they really tend to over time, a lot of times if they're doing it themselves, they don't realize great returns or any returns for that matter. And it's generally because they're their own worst enemy and they're trying to do it themselves and they're messing it up.   Speaker 1: For sure. And I think a lot of times we do that, right? Because look, we know that we're supposed to buy low and sell high, but often we panic and do the opposite. I mean, that's just the basic core fundamental that most of us screw up. Not because we don't know better, but because emotionally we freak out and we're like, "I just can't handle it. I just can't stomach it. The market's had a bad week and I've lost $10,000," or whatever it might be. And you're like, "Ah, get me out of here." And that's usually not the right thing to do.   And it could be a myriad of other kinds of situations financially speaking, where you just know that you're not supposed to do XY, or Z, but you do it anyway because your emotions get the better of you. And Tony, that's where you guys come into play. Some of the best value, the biggest value that financial professionals provide is being that sounding board to go, "Hey, look, I get it. All right, but here's why you're going to be okay, just to stay the course," or whatever. Or, "You're right, let's make some tweaks." You guys are that sounding board.   Tony Mauro: I mean, you're exactly right. We have to be the sounding board. And sometimes that's not what people want to hear. But it's [inaudible 00:04:40]-   Speaker 1: I mean, it could be as simple as calling you up and going, "Tony, talk me off the ledge. I'm about to do something dumb. I want to throw all my money into... Or I want to throw 20% of my portfolio into X or Y, or whatever." And you're like, "Okay, let's talk about that." At the end of the day, you're not the money police. If that's what they want to do, it's what they want to do. But again, you're going to give them the pros and cons of the situation and then they can make that informed decision.   All right, well, good job, Lindsey. And good job, Tony. Next one here is from Chuck. We got to go with Charles Barkley. Guy just says all sorts of great stuff. He's hilarious and has some pretty interesting quotes. He said, "I don't create controversies. They are there long before I ever open my mouth. I just bring them to your attention." And I think maybe you guys can do that too, right? It's like, "Look, I didn't create this tax problem you have. I'm bringing it to your attention, but let's now talk about how to address it."   Tony Mauro: Exactly. We do this all the time. This is a great quote from him because part of our job is to, not to tear people apart, but to tell them where we think they need to improve in their financial area of their lives. And so they create some of these controversies, whether it be taxes, whether it be they're behind on retirement planning or whatever else, they don't have any insurance. It's just our job to let them know this and how to fix them the best way so that they can get on the right track. And that's the whole reason for the financial planning process, is to get yourself and to try to stay on track. But like he says, and he does say some crazy things, but he is entertaining.   Speaker 1: And he's got some pretty good wisdom too.   Tony Mauro: He really does. He really does. And I think in order to solve these problems, first of all, you got to admit you have them and then you got to make a plan to get them fixed. It's really in its simplest terms.   Speaker 1: Yeah. Well, I'm going to jump to the Shaq one because it really works well as the follow-up to the Chuck one here. Especially with them both being on a same show for a long time with the NBA on the TNT. So if you're talking about the controversy or the problem that Chuck was just talking about and bringing it to the attention, Shaq says, "I never worry about the problem. I worry about the solution."   And I think that's great advice financially speaking too. Maybe not the term never, talking in absolutes, but why worry so much about the problem? Because a lot of times we can't control the problem. We can't control what the government does for taxation rates or what's going on with inflation, but we can worry about the solution.   Tony Mauro: You can, and just like with the election, half of the people in the country are going to be happy, half of them are not going to be. Doesn't matter where you're at. And we tend to focus on, like you say, these minute problems that are most of the time out of our control, all we can do is set up our process, so we're in the mode of trying to be successful. And it's all the time with taxes. I mean-   Speaker 1: Oh yeah, it never ends.   Tony Mauro: ... everybody worries about, "Oh yeah, taxes this, taxes that." Forget about all that. Just worry about how can we take them and use them legally to our advantage to pay the least amount of tax possible. That's just tax avoidance. That's not illegal. [inaudible 00:07:58]-   Speaker 1: Here's the rules of the chess board. We know the chess rules. Now what's the moves we can make with inside the game, right?   Tony Mauro: Yeah. And it's the same on the financial planning side. Same way, they're constantly changing laws and putting new things into place about retirement when you can take money and the deductibility of money. So, you just have to come up with a plan that's best for you and work it to your advantage and really more focus on the process, I think, rather than some of these annoying little things you can't control.   Speaker 1: And even if you feel like, "Oh, they're really big things," yes, but there are things that are never going to... I mean, even like this election, to your point, and well, what's going to happen with the market and what's going to happen with the economy and blah, blah, blah. This is what administration, if you're just now retiring, let's say, and you're retired for 20 or 30 years, guess what? There's only an administration for four years, eight tops. So, you're going to see multiple administrations, which means you're probably going to see multiple tax code changes.   Tony Mauro: Exactly.   Speaker 1: So, you might as well not stress too much over that and instead get a strategy and a plan together to help you weather whatever comes down the pike. Because again, we're all pawns on the chessboard. We have to move within the parameters that the chess piece allows us, right? Chessboard allows us. I think it's a good way of thinking about that. Don't worry about the problem, worry about the solution.   All right, final one here. We'll finish off with one more sports person. I realize we only did one actress or actor, but we were going to go a little bit more sports. Tony and I are sports guys as well, but they're just really good. Sports works so well from a coaching standpoint. Mike Tyson, everybody's probably heard this one and it's a fantastic quote, and it's dead on. "Everybody has a plan until they get punched in the mouth." And of course he said this back in the day when people were like, they're going to beat him. They figured out how to beat him in the ring.   And he is like, "Yeah, everybody's got a plan until I punch them in the face," and you get woke up real quick. And that's life, Tony. That's dead on for any aspect of life. We can all make a plan and then you get punched in the mouth and you got to change that plan. And so while we're talking about getting people to get a financial strategy and a plan together here on the podcast, you do realize that life is going to still life and throw you curve-balls. That's why you have reviews and that's why you make tweaks and changes.   Tony Mauro: That's right. And I like Mike Tyson. You study him and his life and what a story that has been. Where he came from-   Speaker 1: Had a lot of trouble too, but yeah.   Tony Mauro: Yeah. He had a lot of trouble in his life, was on top of the world as far as money wise. Ended up losing a lot of it to all kinds of things. And I read an article about him when one of his kids were saying that they were to box, and he was telling them, "Why would you ever want to do this with all I've been punched in the face for you, so you wouldn't have to do this."   But taking it back to the financial arena. Yeah, it's exactly that, and we see it all the time. We ask tax clients, "What's your plan for retirement?" They say, "Well, I'm going to retire at 66." I said, "That's it, that's the plan?" And they have not taken it one step further than that. And that's really not a plan, that's just an age you're going to retire. There's all kinds of things that you need to think about is what are you [inaudible 00:11:19]-   Speaker 1: Oh yeah, I'm going to turn on my social security at 62 and I'm going to start pulling out my retirement accounts at whatever, 67 or whatever it is that then they walk away from the job and hope for the best, right?   Tony Mauro: That's right.   Speaker 1: And it's like, well, that's really not... That's just the basics. That's just the age requirements that you're allowed to do stuff. You got to strategize, man.   Tony Mauro: Exactly. I have a client right now that I'm meeting with in November that is right along these lines. He's 63, she's 62, and they've kind of played a lot in their life, bought a lot of toys and whatnot, don't have a ton of income, just the average American family, but they all of a sudden want to retire and now all of a sudden, they're scared because they didn't have a plan. Now, retirement, in essence is kind of punching them in the mouth saying, well, it's here now. And they don't know if they've got enough money to do it. I don't think they do, I think-   Speaker 1: Which is a lot of people. A lot of people fall into this category.   Tony Mauro: A lot of people, yeah. I mean, that's what I'm talking about. They had a plan, but they didn't really have a plan. They said they did, but they really don't.   Speaker 1: Well, yeah, the back of the napkin stuff, which we all do and there's nothing wrong with it, but at some point you've got to put it into play. I think you said they were in their mid-60s, right? Or early-60s.   Tony Mauro: Right. Is it too late to start planning then? Maybe not, but sometimes it can be. To your point, Tony, you just said, they may not be able to pull off what they want to pull off. They may have to make some tweaks to get it done. So, the sooner you can kind of start... And I think most of us, and I've talked about this a million times, but I think it's a good analogy to think about, even though we're now into November, is that at the age of 50, I think we start waking up a little bit more to the idea of, "Oh crap, it's going to be here quick. When did I get to 50?"   And so you start maybe getting a... And there's a lot of things in place to help you do some of that. Contribution limits get raised and there's hopefully the kids are coming off the payroll, all these things we've talked about before. And so you can hopefully start stocking away more. And that's a great time to start talking with a professional. Have a five, seven, ten-year window to get some planning done, right? It makes a big difference.   It makes a huge difference. And I tell the young people, even if you are not working with a planner in your 20s and 30s, the best advice I can give you is just start saving. Use the Roth IRA. Use your 401(k)s. A lot of them have Roth options now.   Speaker 1: Oh yeah, for sure.   Tony Mauro: Just get in the habit so that when you do start getting a little more serious about it, I'm not saying you shouldn't be early, because you're ahead of the game, but-   Speaker 1: Yeah. 50 bucks a month, man, would make a huge difference if you started in your 20s, early 20s.   Tony Mauro: Yeah. Just get the ball rolling so you've got something. So we're not sitting here when you are 50 and you say, "I really don't have much in anything. Help me out." And we can help everybody, it's just you may not want to hear, which we just talked about, what I have to say. I'm just pointing out some of these gaps and what you'll have to do [inaudible 00:14:23]-   Speaker 1: You can't magically make the money appear that's not there, right?   Tony Mauro: No. I can't just magically create it.   Speaker 1: Yeah, exactly. But you can lay out a strategy to go, "Okay, and Mr. and Mrs. Smith or Mr. and Mrs. Jones, whatever, you wanted to retire here in the next, let's say two years. Based on what we've got, based on what you've put together, it's not going to happen. However, if we do XY, and Z, we might could get this done by the next five years," kind of thing or whatever that looks like.   Or the opposite also happens a lot, Tony, which I think people are terrified of, is that people come in to see you for that first time and they're afraid they're going to hear some of the news like you were just talking about, but they actually hear, "Yeah, you guys are in really good shape. With a couple of minor tweaks, you guys are right on time." Or even better, "You guys could actually retire sooner." So, it happens a lot.   Tony Mauro: It does happen a lot. A lot of times people underestimate what they have coming in and they're in better shape than they thought, and they are relieved when they understand not only we have a good nest egg, but that we can live a long time and it's not going to deplete. And now we can start thinking about what are we going to do for our kids and some other thing, grandkids and things when we're gone.   Speaker 1: Yeah, exactly. So what do you do, right? You take these quotes from these unconventional folks, and you listen to it for a second and you go, "Yeah, you know what? I need to get a plan. I don't want to get punched in the mouth by life," or any of these other little fun quotes we had this week. So do yourself a favor, do your retirement a favor. Sit down with qualified professionals, somebody like Tony and his team. He's a CPA and a CFP and an EA with 30 years of experience.   So, get on the calendar with the team at Tax Doctor Inc. at yourplanningpros.com. That's where you can find them online, at yourplanningpros.com. Check the show note descriptions in this week's podcast for information and links, and don't forget to subscribe to us on Apple or Spotify or whatever platform you like using and catch new episodes of Plan with the Tax Man. Tony, my friend, have yourself a great week. Thanks for hanging out and I will see you just right before Thanksgiving.   Tony Mauro: All right, sounds good. Have a great one.   Speaker 1: We'll catch you next time here on Plan with the Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Every firm has distinct principles that guide its approach to financial planning. In this episode, we take you behind the scenes to explore the core values and unique processes that set our firm apart. We'll walk you through how we get to know our clients on a deeper level, create personalized financial strategies, and how our approach redefines what it means to have a successful financial planning experience.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: This week on the podcast, we're going to talk about what makes Tony's process and the team's process unique at Tax Doctor, Inc. Let's talk about that this week here on Plan With The Tax Man.   Hey, everybody, welcome in to the podcast. Thanks for hanging out with Tony and I for a few minutes, as we talk investing, finance, and retirement. On this episode, we're going to maybe walk behind the scenes just a little bit, talk some core values, things of that nature, on what Tony and his team do at Tax Doctor, Inc. I thought it would be a good idea to refresh this a little bit. I think we probably talked about this stuff once or twice before over the last couple years of doing the podcast. But it's important I think, to go back to some of the roots, if you will. Some of the basics, if you will. We're going to have a little conversation with Tony.   What's going on, my friend? How are you doing this week?   Tony: I'm doing well. Getting ready to start the week, and weather's still looking good here.   Speaker 1: Yeah.   Tony: Everyone is happy.   Speaker 1: Well, we're taping this the last week of October, dropping it on Halloween. So Happy Halloween! Get your candy on.   Tony: That's right, get your costumes and candy.   Speaker 1: Do you have a favorite candy? I'm in my 50s now, Tony, but I still have a favorite candy. Do you?   Tony: Still the favorite, which I think is the number one for Halloween, and that's Reese's.   Speaker 1: Okay, all right. Yeah. That's one or two. You see it goes back and forth. Snickers, I'm a Snickers guy. I think those are usually the top two right there.   Tony: Right.   Speaker 1: I don't know, black licorice.   Tony: I was just going to say ... Go ahead.   Speaker 1: I was going to say, I was going to ask you a question about black licorice. Do you eat it? Have you ever eaten it?   Tony: I have never eaten it. In fact, oh, it's bad.   Speaker 1: Right?   Tony: To me.   Speaker 1: I don't even know, why do they still make it? Does anybody like it? I don't know.   Tony: Somebody must like it.   Speaker 1: They must. But I have never met anybody, in all my travels, that likes black licorice. Hey, if you like black licorice and you're checking out the podcast, shoot us a message, let us know. I'd be really curious to find out how many people like black licorice.   Tony: I would, too.   Speaker 1: But anyway, you were going to say something?   Tony: I was going to say I just heard, it was actually on the way to work, I don't know if this accurate, but it was on Sirius XM. They were saying the estimated spending on Halloween this year is approaching $11 billion.   Speaker 1: Isn't that crazy?   Tony: Between the candy, the costumes, and all the parties. Boy, that's just a big number.   Speaker 1: Isn't that nuts? That's just nuts.   Tony: On a day that just really you go out, and beg for treats, and get scared.   Speaker 1: Well, I think with the craziness of the world all the time, sometimes we just have to hang on to some of those few traditions, and some of those things that maybe just give us a little fun, a little reprieve, a little whatever.   Tony: Yeah.   Speaker 1: I guess it could be worse. But yeah, that's some crazy ... I think Valentine's Day, too. Crazy numbers that come in on Valentine's Day.   Tony: Yes. That's another one, yeah.   Speaker 1: It's pretty wild.   But anyway, let's get into our topic this week. Tony, let's talk about your core values. What mission statement, if you will, or to go Jerry Maguire for a second here, if you were writing out a mission statement about your patient process, what is the core principles that you and your team try to exude?   Tony: Yeah. Probably the biggest one is we take the approach that you have to do all of your planning with I call it tax-centric or tax in mind. One of the biggest things that people I think lose track of, even though they're always complaining about all the taxes they pay, is taxes over your lifetime are one of the biggest expenses you'll ever pay. You want to make sure, in your planning process, that you're taking all that into account. I think that some advisors don't do that. Obviously, some of them don't have tax backgrounds, which is why they don't do that. I think that you need to use that in there with your process because that is going to make a big difference on that end goal and number.   When we're working through our plans, we always are trying to keep that in mind. Every time we meet with clients to go over their plans, we're discussing that as well. I think if you don't get anything out of this podcast, make sure that you are doing that in your own situation, because that is real key for us.   Speaker 1: Yeah. I think that's an interesting point because not to say that advisors who aren't also CPAs are tax-focused are doing a bad job.   Tony: Exactly.   Speaker 1: But you do have to have this other layer of you're working a financial professional who says, "Okay, here's the things we're doing. Now run that by your CPA to make sure everything's groovy." Granted, to be fair, a lot of financial advisors are very tax smart and very tax efficient. But you have that extra layer there, as a CPA, CFP, and an EA. Of course, it gives you the ability to not only think about it now, which I guess would be the CPA side, but then also the future looking tax implications, which is marrying both of those worlds.   Tony: Yeah. I love 401Ks and everything else, and tax deferred savings.   Speaker 1: Sure, sure.   Tony: A lot of people that are accumulating large balances in those tend to forget that they have an IOU to Uncle Sam toward the end.   Speaker 1: Yeah.   Tony: Now with the new rules, when you die you have to take it out faster and things, it's just something to think about when you're planning.   Speaker 1: Yeah. Let me ask you a question, Tony. I don't know if I've ever asked you this. Which one were you first? Were you a CPA first, or a CFP first? Were you an accountant or a financial advisor?   Tony: I started out as an accountant.   Speaker 1: Okay.   Tony: Early on, when I was working for somebody else, this was 30 years ago plus, all the partners got to talk about all the good stuff. We were just the grunts, if you will. I always wanted to do that-   Speaker 1: The adding machines, yeah.   Tony: Yeah, yeah. We were the operations, and they were the people that got to talk with the clients, and do all the things, and the planning.   Speaker 1: Right.   Tony: I wanted to be that. This was well before even the CFP stuff, and financial planning was even a thing.   Speaker 1: Gotcha.   Tony: It just was one of those things, "I want to be able to do that." That's how I got into it, way back in the day.   But yeah, in answer to your question, I was an accountant first.   Speaker 1: Okay. Again, the role of the CPA typically, it's revisionist history. They're doing their job, they're doing their job well. They're looking at the tax situation that's just expired, the past year. They're going back, and they're helping you do all that kind of stuff. I think by having that hat, and then moving yourself into the CFP, it probably gave you a really interesting and unique approach, which is probably why you set your business up the way you did. To say, "Look, I want to do this not only for the current calendar year, but we've got to be tax efficient through all the years moving forward because that's really where we're going to make a real dent." Is that a fair assessment?   Tony: That's a fair assessment. With tax clients, we already know, at least on the financial side, a lot about them, doing their tax over the years.   Speaker 1: Sure, yeah.   Tony: You know where they're at. You can even back into what they have or haven't saved. It's easy to have conversations about, "You need to start thinking about," say for example, retirement. "Oh, by the way, we have to try to do it tax efficiently." That's how the conversations generally start. If they're not working with somebody, then that's when we will introduce ourselves and say, "Let's try to put something together."   I think most planners are this way, especially us. If people have an outside relationship, we are definitely not out there trying to step on anybody's toes, or steal clients.   Speaker 1: Right, right. There's enough folks out there.   Tony: Number one, it's not good business ethically.   Speaker 1: Yeah.   Tony: It's not good if somebody else is doing a good job. We're basically looking at the tax clients and others that don't have that.   Speaker 1: Sure.   Tony: Or some of the people have retired, or they don't hear from them, that kind of thing, is where we come in.   Speaker 1: Well, I think the new numbers ... We've been hearing for a while now that, it was what 10,000 Boomers a day retiring. We've been hearing that for a couple years. Well, I think now, in 2024 going in 2025, I think it's now at maximum peak. They're calling it Peak 65 that's been making the rounds on some of the media lately, you might have saw that. It's 12,000, I think, people a day are eligible for retirement. That's a huge number. Granted, that's globally. But still, that's a big number. Plenty of business to go around, to your point.   Tony: Yeah.   Speaker 1: There's no reason to go poaching, so to speak.   Tony: No.   Speaker 1: Let's talk about customization and client education. How do you help clients build that strategy and make those informed decisions? Because education clearly is a big piece of this. Some people really want to come see a professional like you, Tony, and say, "Okay, teach me what I don't know, help me understand this stuff." Others will come to you and say, "I don't care, just handle it."   Tony: Right.   Speaker 1: You have to balance that customized plan to, I guess their individual wants and needs, as far as even just knowing the information.   Tony: Really, right off the bat, before we even agree to work with someone is, after we've had a conversation or two and they want to move forward, we basically have them in, and we go through ... It is basic. There's literally 10 or 12 things. We just have them check a box saying, "Does this thing worry you?" Then we score it. Then based on that, I don't show this to the clients, but I basically say, "Yeah, you probably do need some help." Or, "You've pretty much got everything under control by the way you answered this." Then I'll ask them, "Why are we even talking?" But most of them have some anxiety and some pain, so we start there.   Once that's determined, then we go into the plan. Of course, we use software, like most everybody does.   Speaker 1: Sure.   Tony: Then we have some more detailed things to try to get to know them. I always tell people, just like your doctor, I'm uncomfortable with recommending things until I know more about you. I've got the tax stuff.   Speaker 1: Yeah.   Tony: I need to know what some of the emotional stuff is. Your goals, what you want out of life, and all of this, before we can make recommendations. Because I think a lot of people think all we sit around and do is make recommendations, and mine could be further from the truth.   Speaker 1: Yeah. Pick this stock, pick that fund. Right, yeah.   Tony: Yeah. Not it.   Speaker 1: That's definitely not the case. Well, Tony, you said something a minute ago. Let me expand on that. You've been doing this for 30 years, in different capacities. You've been in the financial services world. If somebody walked in for their initial consultation, and handed you their files, their basket of stuff. Like a lot of advisors and professionals who've been doing this a long time, I imagine that you probably could look it over, and probably pretty quickly, within five or 15 minutes, have a rough idea of what they should or shouldn't be doing. But to your point about, "I don't know you yet," that's not the best way to give a recommendation. Could you do it because you have the skillset? Yeah, you probably could.   Tony: Yeah.   Speaker 1: But you need to learn more about ... You can see all the data, but now let's find out about who the person is. I think that's the real happy marriage in that relationship.   Tony: It is. Once you design a plan for them, and I walk them through it on a basic level. We don't like to talk in jargon, or anything like that. We just set some goals. No different than you'd do, whether it's your business, whether it's your fitness. We monitor those goals and say, "Where are we?" When we meet again, are we progressing toward that goal? Or has it changed and we need to reassess?   Speaker 1: Yeah.   Tony: Because that'll tell us a lot about are we in the right things, as far as investments go, to meet those goals. Or maybe, we need to switch things up. Really, I like to call us we want to be the financial quarterback of your financial situation. Yes, we're going to have some investments in there and some different things, but we want to make sure you're covered from start to end. And not only investments. It could be charitable giving. It could be you're under-insured. It could be you're concerned about putting things in trust for some grandkids, things like that. It gets people talking about some things that sometimes they never thought about, for sure.   Speaker 1: Well, that really brings me to my last point, which is how do you value, or how do you assess success for your clients? Yeah, obviously we could go with the basic financial metrics.   Tony: Right.   Speaker 1: That's pretty much a given. Hey, is the plan solid? Is it going to get you ... "We've run the numbers, you're going to be able to make it until 99 before running out of money," or whatever, something like that.   Tony: Yeah.   Speaker 1: But what other metrics do you guys use to measure success for a client?   Tony: Well, besides that stuff, which is a given, we have some little charts that we call the Client Happiness Charts. We have clients fill this out at different times along their journey. Then toward the end, when they're retired. Because we want to make sure that they're checking of the boxes that really matter to them, as far as what they consider success. For some of them it's "Hey, I'm now able to travel, I've always wanted to do it." For some of them it's, "I've got this little menial job, I love going to it." There's about 25 of them there.   As we go through the process, it's fun to see, especially if somebody started say in their 30s. We've had a few. I pull them out, they're now retired. To show them, "Well, here's what was important back to you back when you were 35, this was 15, 18 years ago. Now look what you're doing." Just show them the progress.   That's what gives us the most joy, is to see them doing what they want to do. Obviously, some of that takes money, and that's the whole point of trying to grow it. It's that, and making sure that they understand how much they can take out each year and not outlive their money, because that's a big issue with all of our retiree clients.   Speaker 1: Yeah. To your point a second ago as well, are you happy with all the other different pieces? Have we addressed and dealt with the legacy conversation?   Tony: Right.   Speaker 1: Just checking off the bucket list stuff. There's all these little pieces that go into valuing or measuring success for the client. Is it a pleasant experience? Do you look forward to coming in, and talking with your advisor? And saying, "Yeah, I feel like we're buddies. We don't hang out and go to dinner together, but I feel like we have a good rapport." I think that's really important in a lot of business relationships in life, but certainly when you're talking about your money.   Tony: Absolutely.   Speaker 1: With your doctor, too. Some people dread seeing their doctor because they don't like their personality. It's like, well, maybe get a different doctor so that you can have a conversation with them that you're going to take to heart, and it also resonates with you. I think same thing financially. If you go see an advisor, and they don't click with you, and they're giving you good information but you just don't like them, and therefore you don't follow through with it or do anything, you're just wasting your own time. You know what I mean?   Tony: Exactly. Yeah.   Speaker 1: It's important. Good stuff. Well, good conversation, man. Thanks for hanging out with us and chatting a little bit about what makes you guys unique. People in general are unique, so every situation's going to be different. Certainly, there's those big generalities, Tony, that affect all of us in the financial world. Social security, and taxation, and inflation, and blah, blah, blah. All the big core tenets that we have to deal with, that's certainly a part of the game that we have to run through. But every person's little puzzle is different from the next. You and I are completely different people, so our strategies are going to be different.   If you need some help, get on the calendar. Have a conversation with Tony and his team. Or if you're already working with him, and you've got some friends or loved ones that maybe should have that chat for themselves, let them know. Let them check out the podcast. Or just reach out to Tony and his team at yourplanningpros.com. That is yourplanningpros.com for a complimentary consultation and conversation with the team at Tax Doctor, Inc.   Tony, thanks for hanging out, my friend. Good conversation.   Tony: All right. We'll see you next time.   Speaker 1: Always appreciate it. Of course, it's Halloween as we're dropping this, so happy Halloween to everybody. Stay stay and sane. Don't forget to get out there and vote, because it's just around the corner. We'll see you next time here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

A random, retired YouTuber did a simple video exploring the top 5 regrets from other retirees he interviewed (all in their 70s). It blew up to almost half a million views (and counting). Let's see what regrets made the list and, more importantly, explore what proactive steps you can take to avoid having the same regrets when you retire.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: A random retired YouTuber did a very simple video explaining the top five regrets from other retirees he interviewed all in their seventies. This week we're going to talk about those regrets here on Plan With The Tax Max and see how they line up with clients that come in to C & Tony. Let's talk about it. Here we go.   Hey everybody, thanks for tuning into the podcast. Thanks for hanging out with Tony Morrow and myself as we talk investing, finance, retirement here on Plan With The Tax Man. He has been doing this for many, many years and he's a qualified professional to help you with your retirement situation as a CPA, a CFP, and an EA of 30 plus years in the industry. Again, a great resource for you to reach out to.   And Tony, I thought I'd share this with our listeners and stuff out there. We'll put a link to the video for folks who want to check it out. It was a very simple video. Nice guy. Seemed very pleasant, just asking some other retirees. I think he was maybe around 65 or so. These folks were all over their seventies. It's got like a half million plus views of this video to talk about the things they regret now that they're further into retirement. And maybe so we can share some proactive steps because you do this day in and day out of ways to avoid having some of those similar regrets when our folks or our listeners retire. Okay?   Tony: Sounds good.   Speaker 1: And of course if you haven't checked it out, go check it out folks. Like I said, it's a pretty good video.   But number one, and I think this is probably fairly not surprising across the board there, they wish they had retired earlier. Thinking about that, if they're in their seventies, they probably got to where they're like, "Hey, this is pretty great. I wish we would've been able to do this a little bit sooner." And I know more and more people want to retire earlier, but it certainly is a math problem you're going to have to solve for if that's a regret you don't want to have.   Tony: And I have watched the gentleman's video and I would encourage everybody to go watch it because it is informative. And almost all of these, I can relate back to my own father, but many clients as well. But really a lot of people, if you don't have this on your mind and you're not planning for it ... And it all comes back to what we always talk about is enlisting the help of your advisor to help you with this.   But if you wait too long, generally what people are saying is, I continue to want to work and I thought that I would just push it off and everything's going to be okay. Maybe not financially, and my own father worked too long. He worked till he was 80 years old. And that now all of a sudden stuff starts happening, whether you lose a spouse or your health deteriorates and then you feel like you can't enjoy it like you thought you were going to. And a lot of people have this regret because of that. And a lot of them, I think my father included, didn't really have a plan in place to say, okay, this is the end date I'm going to now start the next chapter of my life. And they wake up one day and they're into their retirement and they can't do what they wanted to do.   Speaker 1: And all five of these, you literally can link them together and see how fixing a one or two things could possibly fix all of these or eliminate these regrets.   Tony: Exactly.   Speaker 1: Wishing you retired earlier, well, A knowing that you've got the funds to do so is going to probably be, I think, paramount there because you don't want to get into retirement too early and then obviously run out of money. That's the number one fear for most people.   Number two, Tony was they wish they had spent more when they did first retire. I think to me, this comes right back to that math problem of they got into retirement ... Or like many people do, they get to retirement. Maybe they fudge the math, a little back of the napkin math or whatever, and they're like, "Yeah, we can make this work, but we'll just play it a little close to the chest in retirement," and then they don't wind up maybe doing those things that were on their bucket list early on. Then they realize, hey, we are going to be fine. But now our bodies, to your point a minute ago, won't let us go do the things. I wish we'd have done that sooner. So again, this to me all comes down to having a spending plan and a strategy.   Tony: Yes. And we do this with every single retiree that we work with, is come up with a spending plan. We come up with a list of their bucket list. Even if it doesn't ever get checked off, at least we have it in the background and we want them to spend some of their money, obviously, according to the plan and according to their lifestyle.   And the other thing I think that's important at least that we do, is we run a lot of analysis to make sure that they're comfortable knowing if we spend X, how long before our money runs out, if ever. And then that way they can feel good about spending money without having to worry about, I don't know when I'm going to run out of money and I don't want to, so therefore I'm going to keep it all. And like you said, then you get too far along and you can't enjoy it. But that is the most important thing in that whole area.   Speaker 1: Oh, for sure. Well, and number three is they wish they had taken better care of their health. Again, see, these all play together obviously, right?   Tony: Yes.   Speaker 1: Because if you took a little bit better care of your health and you planned properly, you might've been able to retire earlier, possibly, and then of course spent more and done more of those go-go phase things.   Tony: As I age, and I watched my father age, he's now 83, you see, especially, at least I do with him, he just can't do things that he used to do. And he's in fairly good health, but he's got the normal issues. But boy, if you've got a lot of health problems and some of them you can't control, I realize, but some you can, and I'm not saying you just have to constantly be just eating salads every day or something, but you do have to try to watch it. And as you get older, I don't know, at least with me, more cognizant of what my blood pressure is, what my weight is, and things like that.   Speaker 1: Mobility. Mobility is a big one, Tony, keeping those knees and stuff moving and those hips because again, think about the downtime that happens to so many seniors when they have a hip replacement or a knee replacement, especially if they've been kind of sedentary in their life. It makes it even tougher.   Tony: And we all think we're going to retire in perfect health and we're going to be able to go out and do things well into our eighties and for many, many, that doesn't happen. So it goes back to some what we just talked about, trying to stay healthy so you can retire earlier so you can enjoy.   Speaker 1: Unfortunately, our laws and a lot of things that we have in place don't make it any easier. So we even have to make the even harder choices because it is easy to get such crap food and do things to put in our body that's not great.   We were just having this conversation and made a joke last night and had family in for my mother's birthday as well Tony, she's the same age as your dad, and she asked if the dogs could have peanut butter. And it's like, well, sure, everybody knows that dogs love peanut butter, but there's a chemical in peanut butter. I think it's Zytitol or something like that. I'm probably saying it wrong. It's not great for them, so you should not give them too, too much peanut butter or go with natural peanut butter, like all natural peanut butter. And I made this joke and I thought, this chemical that's in peanut butter, it's not good for dogs. It's not safe for dog consumption, but apparently it is for humans because they allow it to be in peanut butter for us to eat.   We have these crazy, crazy chemicals that we put into a lot of our food, which does not help our health situations either. So smart eating, to your point, not necessarily a salad every day, but smart diet, mobility, things of that nature go a long way in order to helping you feel better in retirement so that you can go back to doing more of those things that you want to do.   And maybe that flies into this one here, number four, which is many of those folks on there, they said they wish they had taken up a hobby. And I think maybe these are the workaholic type people out there, Tony, that are so wrapped up in their work that said, that's who I am. So many of us do that. My job is my thing. It's my entity, so to speak. And when you retire, if you don't have that hobby or if you hadn't fostered one along the way, you have that, what do I do now mentality?   Tony: Yeah. This happened to my own father because his only hobby really was golf. And he's played golf, but now at 83, he wants to play, but he's had some heart issues and some other things he can't play anymore. But he now really regrets that he didn't have other things he was doing.   Speaker 1: Sure.   Tony: And it doesn't have to be necessarily sports. It could be anything. It could be reading. It could be [inaudible 00:08:51].   Speaker 1: Stamp collecting. Whatever.   Tony: Anything, just something that you have a passion for that you want to do is, I think it's important too to have something to keep your mind sharp rather than just going out and doing, say a golf type thing because studies have shown that your mind starts to go a little bit when you don't exercise it. And I think with a lot of retirees, they tend to be by themselves some if they've lost a spouse and their mind starts to slip a little bit because they aren't, other than watching TV, really challenging it a little bit. So I think it's important for people to have some kind of hobby. It could be anything. Especially with today, you could do everything online if it just occupies some of your time and it's helpful to you.   Speaker 1: I agree. Absolutely. And having that hobby or whatever that case is certainly again, helps with the mobility, helps with the mental, just like you pointed out.   And again, all of these work together because the fifth one, Tony, was they wish they had traveled more. Well, again, look at all five of these and put them together and you can certainly see where these regrets all line up. If you had a strategy, if you had a plan, if you had taken a little bit better care of yourself, maybe you would be able to do all the things on this list and not have the regrets. Now life is always full of regrets. You're going to probably have some, but at least you could check some of these off. And of course, travel is one that many people have. But to your point earlier, maybe they don't feel like that number two, they didn't spend as much, so they're holding onto it. They're keeping the money tight to the chest. They get a little older and now their health won't let them maybe go take that travel trip around the world or over to Italy or whatever.   Tony: And I just returned from Hawaii about a week and a half ago, and I was just mentioning to my wife some of the elderly people that are still trying to travel, and they come in the plane on those little plane type of wheelchairs and whatnot. But they don't make travel easy for the elderly. If you can't walk fast and get down those ramps and-   Speaker 1: Oh yeah. Especially if you've got a layover.   Tony: Then it's a whole other topic.   Speaker 1: Especially if you're stuck on a layover.   Tony: Then you got a layover in some giant airport. Let alone when you get somewhere having to walk. So that's the physical stuff. I think a lot of people, like you said, they don't plan some of this other stuff, and then they always wanted to travel and they get too far along. My dad right now is afraid to travel because he doesn't want to get sick and get laid over and have something happen in even another state's hospital, let alone in our country.   Speaker 1: Oh, sure.   Tony: And he just is very fearful of that. And I think physically he could do it, but he's afraid.   Speaker 1: And hey, the mental aspect goes a long way to keeping you, I guess, stuck. You can't get out of that cycle. You can't get your own brain out of the way.   Tony: I've told my brothers with him, I don't see him ever traveling again unless it was some kind of miracle because he just gets too afraid. And that's, I think, more mental with him. But I know he regrets because he worked too long that he wish they would've traveled more.   Speaker 1: Oh, yeah. I can't get my mom on a plane either, so I'm with you there. If she wants to see my sister, my sister has to come to her or I have to drive her there. And that's like a 14-hour drive, so it's not easy to do.   So if you don't want to have these regrets again, you got to have a strategy in place and it's not just for the X's and O's, the money. Obviously that's super important. But Tony, what you guys do is you help people go through and strategize and plan and stress test, and think about the different scenarios that come up in retirement because it's our only retirement when we come in to see someone like yourself. But you've helped hundreds or thousands of families, so you guys have great insights on that.   Tony: And we've seen a lot of different things, so we could certainly share a lot of different things that we've seen both good and bad.   Speaker 1: Sure.   Tony: And try to help people.   Speaker 1: And a strategy and a plan, that's where it all starts so that you know what you got, why you've got it, and how you're going to be able to use it when you get to retirement. And maybe part of that plan is also getting yourself healthy, sitting down with a financial professional, especially once you get to 50 or a little higher, it's a great time. I think we start all focusing a little harder on, hey, my golden years are coming. Many people I know my age fifty-plus are starting to get in better shape and so on and so forth because they don't want to be in the same situation that their parents are in.   So if you need some help, sit down and talk with a qualified like Tony and his team at Tax Doctor, Inc, they are here to help. So you can plan with the Tax Man. Find him online at yourplanningpros.com. That's yourplanningpros.com for a complimentary review and strategy session of your own. Tony, thanks for hanging out and I appreciate you my friend, as always.   Tony: All right, we'll see you next month. Thanks.   Speaker 1: We'll see you next time here on Plan With The Tax Man. Go check out the video as well and make sure that you got a plan in place so that you don't have any of those regrets when you get into your seventies as well. And we'll see you next time here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Remember the thrill of shaking a Magic 8 Ball to get answers to your childhood questions? Would we ace that math test? Would we be famous someday? Well, today, we're bringing a bit of that magic back. But instead of asking about pop quizzes and playground crushes, we're turning to the Magic 8 Ball for advice on something much more important: your retirement planning! What would the Magic 8 Ball have to say about these common retirement questions if it had the wisdom of a financial advisor?   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: Do you guys remember the thrill of shaking that magic eight ball that we had when we were kids and we would hopefully get the answers we were looking for and sometimes be disappointed when not? Well, let's have a little fun this week here on Plan with the Tax Man and go with the magic eight ball's guide to retirement planning. Let's get into it. Speaker 2: Look up in the sky. Speaker 3: It's a bird. Speaker 4: It's a plane. Speaker 5: No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for Plan with the Tax Man. Speaker 1: Hey everybody, welcome into the podcast. Thanks for hanging out with Tony and myself as we talk investing, finance and retirement. And Tony, I'm going to let you break out your magic eight ball and plan some financial stuff with us. I think sometimes people maybe actually approach their finances with this old idea. Sometimes they just don't quite do the things they should be doing, and I thought it'd be kind of fun, be kind of humorous to, I'll ask you some questions. You give us a magic eight ball answer, but then you also obviously elaborate on that for us. What do you think? Tony Morrow: I think that's good. Going back to the magic eight ball, I'm old enough to have had one of those. So for those of you that are young listening, you should look it up on the internet and see what kind of toys we had as kids. Speaker 1: Well, actually they still make it. Tony Morrow: Do they still make it? Oh my goodness. Speaker 1: Yeah, they still make it. Yeah. So the idea popped up with one of our producers or writers because they have little ones and they saw it and I was like, oh, well, there you go. I didn't know they still made that thing, but very cool. Yeah, so some of the really cool toys still exist, so that's always good to see, right? They're not all going the way of the Dodo Bird. I don't think Stretch Armstrong exists anymore, but I loved my Stretch Armstrong. Do you remember that? Tony Morrow: I remember the Stretch Armstrong. We had that and then we cut him and... Speaker 1: To see what was inside it? Tony Morrow: We wanted to see what was inside. Yeah, that was... Speaker 1: Just sort just some sort of goop? Tony Morrow: Yeah, some sort of goop. We liked The Six Million Dollar Man and all that. The bionic eye... Speaker 1: Oh, yeah. Six Million Dollar Man and his a little bionic eye. That was so cool. Tony Morrow: Yeah. So it didn't take much to entertain us. Speaker 1: No, it didn't because we didn't have these stupid phones, which was great. So anyway, let's have a little fun. Let's go back in time here. Tony, let's get it started. Should I start saving for retirement now? What does the magic eight ball say and what does Tony say? Tony Morrow: I have to agree with the magic eight ball because it's going to say yes. Definitely right now. It's never too late. And now it doesn't matter where you're at on the spectrum because you're going to need this. I was just in a meeting with my employees talking to them about that, about state of affairs today. Employers are not going to take care of you. This isn't the day of the pension, the old-fashioned pension, and where you work for somebody for 40 years and retiring at this monthly income, you can't outlive. I mean, it's all on us. So if you procrastinate this, the longer you do, the more you're going to have to save to get to your goals, and you need to have some goals anyway, but that is a short down and dirty on that. Speaker 1: Right. Yeah, no, I agree. And thinking about the magic eight ball too. So it had an assortment of answers, right? It had the yes, definitely. It had a bunch of, I guess what we would call the greens or the positives. Without a doubt. It's decidedly so. Outlook good. And then it had things like reply hazy or can't predict now. Had some of that middle ground. And it had some of those reds, right? My reply is, no, don't count on it. So on and so forth. So kind of thinking about those, Tony as you're shaking that and giving us some answers. But yeah, there's no better time than now no matter where you're at. Waiting another day only makes things even more complicated. So should I start saving now? Yes, definitely. Is a million dollars enough to retire on magic eight ball? Tony Morrow: Magic eight ball says, "Reply hazy. Try again." I'm going to answer. I think what they're talking about there is it depends. And ironically too, I was just reading an article this morning in a financial magazine saying that the new retirement numbers like 1.8, 1.9 million. Now again, that's just somebody's opinion and they make their piece for it. Speaker 1: Sure. Well, how you live, where you live, that's going to change all that. Tony Morrow: That's going to change all that. I think probably it depends on where you live, but it could be enough If you want a modest lifestyle, you're definitely not going to be destitute if we're just talking real general terms. But depending on what you want, what your goals are, that certainly may not be enough in today's world to do what you want to do. But that's kind of the number that still everybody's got in their mind, they like to shoot for. We as advisors like to take that a step further and say, "Look, let's really talk about what you want and see if that's enough or not." I think that's the help of an advisor. Speaker 1: Yeah, I mean, Tony, we're two different people here on this podcast. A million dollars might work for you, and it might be more than I needed to get to. I could work too long and not enjoy my retirement if because I didn't need that much because maybe I have a pension and you don't to your point earlier. Tony Morrow: Right. Speaker 1: Right? Tony Morrow: Yeah. Speaker 1: Or maybe my lifestyle is much more significantly lower than yours or whatever the case might be. So is a million dollars enough? You have reply hazy great because well, maybe and maybe not. So retirement's a math problem. Tony Morrow: It is. Speaker 1: You got to solve the math. So maybe you've got to work to get to the million and maybe you could retire sooner, or maybe you got to work to get to 2 million, but you're not going to know until you run those numbers so definitely make sure that you're sitting down with a qualified professional like Tony on that. Magic eight ball, can I rely on social security for my retirement? Tony Morrow: I've got it in front of me. I looked it up on the internet. I wanted to see, and the first picture is the answer and it says, "Outlook not so good," and I agree with that. Social security that could be a whole topic and it's discussed a lot. I do a lot of webinars on it and I send out a lot of information on it. It is an important piece, especially for those that are getting closer to it, especially when they take it type of thing. But if you're relying on that, social security wasn't meant to be what some people think it is, and it really was an insurance policy to keep people from being destitute and dying in the streets way back when it was [inaudible 00:05:52]. Speaker 1: And we had much less people and all that. All the things we know. And I think Tony, let ask you to this way, can you do it? Yes, I've got a family member who's surviving solely on social security. Are they happy about it? No. Right? Tony Morrow: Right. Speaker 1: What kind of retirement do you want? And if you want the bare minimum, then yeah, it probably can be done because I mean many thousands of people, millions of people are probably doing it, but it's not the ideal thing, right? Tony Morrow: It's not the ideal thing. And this is where you want to have a plan. It can be part of your plan. Now, obviously, if you're at the end, and like you said, that's all you have, it's better than nothing, obviously. Speaker 1: Sure. That was the point. Tony Morrow: I've got an uncle who just passed away and they didn't do any planning. And ironically, he had a pension plan from the state, but he took the highest payout. So once he died, the pension's over, he does have a spouse that's still living. She's in her late eighties, and so they're down to $1,800 a month in social security net, and their rent is 1400. Now that's leaves $400 for everything else. That probably doable, but not great at all. So I mean, you want to probably stay out of that. And then looking forward, in about 10 years, social security trust fund is going to be paying out well more than it's taking in. They're going to have to fix it. That's why the outlook is really not that good. I don't think they'll let it go by the wayside, but it might look different in 10 to three years from now. Speaker 1: I definitely think it's going to look different for anybody under the age of 40. Tony Morrow: Yeah, absolutely. Speaker 1: It's going to almost have to. All right, so let's do a couple more here, Tony. Magic eight ball, can I expect to have fewer expenses in retirement compared to when I'm working? Tony Morrow: Yeah, don't count on it. Speaker 1: Yeah, that's the same thing. That's- Tony Morrow: That's the eight ball answer. Speaker 1: That's the same thing that Marsha Smith said to me when I asked her out to the eighth grade dance. She said, "Don't count on it." People often think this, Tony, they come in and see a financial professional like yourself, and they're like, "Well, listen, we think we got enough to retire on because we're going to spend less money in retirement than we are now." So they're kind of like fudging the math to make themselves feel good about maybe getting into retirement, but they don't truly have that plan. And as you've seen, because you've been doing this for many, many years now, do you want to live a lesser lifestyle in retirement, then don't count on it. Just because expenses change doesn't mean they're necessarily lower. Tony Morrow: Yeah. And then everybody that I see entering retirement two years in, they all are telling me the same thing is my expenses are higher. And it really is, comes down to a couple of things. One, healthcare costs rise tremendously, and two, they're doing more because [inaudible 00:08:22] they're actually out and they're spending more money, which is the whole idea. But the old adage, like you say, of, oh yeah, I can retire and I won't have any expenses. Some will go away, but others will increase. Speaker 1: Others come on. Yeah. Tony Morrow: Yeah. And so you got to watch that when you got to plan it. Speaker 1: Yep, so don't count on them. Don't count on it. It's a great response there from the magic eight ball. And again, all of this is going to come back to that, this is the point of why you need a full strategy design for specialty for yourself, because every situation is going to be a little bit different. So dialing it in, we can get all those generalities because we all do suffer from the same kind of universal questions when it comes to retirement. But then how each puzzle kind of plays out for person to person is different. And that's why it's so important, again, to sit down and talk with qualified professionals like Tony and his team at Tax Doctor Inc. All right, one or two more here, Tony. We'll wrap it up. Will my retirement play and be affected by future changes in tax laws? What might the magic eight ball say? Tony Morrow: Magic eight ball says, "Signs point to yes." I got to think that. Of course, I say that all the time because tax laws change almost all the time now, especially with administrations. And some of them were drastic. Back in the day, I remember tax laws were, major things were pretty few and far between. Now everything changes so quickly. And I definitely think you need to stay on top of that. Obviously you have your advisor for that to help you with that. But if you're not taking that into account that really could blindside you retirement, if you're not careful. Speaker 1: Well, you think about what the tax implications are going to do to us with our retirement plan. And it's one of those ones that can really scalp your plan. So it's like, Hey, we thought we've got a good plan in place, but then taxation rates come along or change or get higher. And obviously with the debt that we have, the signs are certainly likely that that's going to happen. I was just on an interview last week, Tony, with former Comptroller General of the US David Walker, and asked him the question, can we just tax our way out of this debt? And he's like, "No." I mean, even just taxing people to the hilt is not going to get it done. There's going to have to cut spending and there's going to have to be changes in order to fix all this. And the problem is finding politicians that will actually do it and [inaudible 00:10:29] be fiscally responsible. And he was talking about the fact that there hasn't been a fiscally responsible president since Bill Clinton. He said none of the presidents since Bill Clinton have been fiscally responsible. And I thought, well, that's kind of stark, right? So yeah, are we going to be affected by future tax changes? I would say signs certainly point to yes. I think magic eight ball's right on the money there. Okay. Let's see. Should I review my retirement plan annually, magic eight ball? Pretty easy one, I think? Tony Morrow: Without a doubt. Speaker 1: Without a doubt. Tony Morrow: Eight ball. And obviously that's an easy one. I mean, if you're not doing that, really then going to end up getting probably off track, especially if you don't do it for long periods of time. Speaker 1: Yeah. Tony Morrow: This is where I believe that an advisor can offer the most value, is to at least meet with your advisor, I would recommend this at least once a year. Make sure you're still on track. Make sure that your plan is still performing the way you want it to. And gives you a chance to make changes because maybe even your goals are something change. And if you just, especially in the accumulation stage when you're younger, you're just planning pretty easy to skip this and just hope for the best. And you don't want to do that because obviously as things change and a lot of the stuff that we just talked about comes into play, suddenly you could be way off. Speaker 1: Very true. Tony Morrow: Not even know it until it's a little bit too late. Speaker 1: Yeah, I mean, course corrections along the way are important. That's why you have those, so certainly, yep, certainly a good idea to do and we'll make this last one a layup here. So should I consider working with a professional as I near retirement? The magic eight ball's got to say yes. Tony Morrow: Magic eight ball says, "Yes." Yeah, he's popping out saying yes. Speaker 1: That's right. That's right. Tony Morrow: I think especially as you get near towards retirement, your focus changes less on accumulation maybe to more of income distribution. Do I have enough to live on and how's this going to look for me? And that's where I think advisor can help not only continue to build things after retirement and making sure you're getting the income you need along with a little bit hopefully of growth and expense management. So I definitely would say yes. I'm not saying that you shouldn't work [inaudible 00:12:28] advisor even if you're young, but it's all the same, I think order to get to where you want to go, have that good plan in place. I think an advisor is a necessity in my opinion. Speaker 1: Yeah, especially as you do near retirement, we get older. Can you get by DIY-ing and building your wealth when you're younger? Yeah. I mean, many people do, and it's a little bit easier to build it than it is to do the preservation stage, which is retirement. But as you get closer to it, there's a lot more to deal with, which we obviously talk about on the regular and that's why you need to turn to a qualified professional like Tony, who's got 30 plus years in the industry. He's a CPA, a CFP, and an EA so he's a great resource for you to tap into. If you're listening to the podcast and you're not already working with him, consider reaching out to them at yourplanningpros.com. That is yourplanningpros.com. And don't forget to subscribe to the podcast so you can catch new and future episodes by subscribing on Apple or Spotify or whatever platform you like using. You can find all that information again at Tony's website yourplanningpros.com, and get yourself onto the calendar with he and his team at Tax Doctor Inc. Tony, thanks for hanging out my friend and walking down the nostalgia path with the old magic eight ball here. Tony Morrow: Yeah, sounds good. We'll see you next time. It was a lot of fun. Speaker 1: Always appreciate you and we'll catch you next time here on Plan With the Tax Man with Tony Morrow. Speaker 7: Securities offered through Avantax Investment Services SM, member FINRA SIPC. Investment advisory services offered through Avantax Advisory services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.  

Life can throw unexpected challenges our way, and dealing with a tough medical diagnosis is one of the hardest. In today's episode, we'll discuss a real case study of a young family dealing with the heartbreaking reality of a terminal illness. Listen in as Tony shares practical steps to take when faced with such difficult news, including handling taxes, planning for the future of a business, and ensuring loved ones are financially secure.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc Killian: This week on Plan With The Tax Man, let's talk about tough medical diagnosis and financial situations that unfortunately maybe come out of the blue and how to handle those. So we're going to spend some time looking at a case study with Tony here on Plan With The Tax Man.   Hey, everybody. Welcome into the podcast with Tony Mauro and myself as we're talking investing, finance and retirement. Tony is the owner at Tax Doc Inc, and he's CPA, CFP and EA with 30 plus years of experience and a great resource for you to tap into and turn to if you need some help with situations. And unfortunately, situations like the one we're going to discuss this week. Tony, you want to share a little bit on some tough times, financial planning and dealing with things when the unexpected pops up. And in this particular case, you wanted to share some things about a tough diagnosis if you've unfortunately received one of these, what that might look like and how that might change things. How are you doing this week, by the way?   Tony Mauro: I'm doing fantastic. Thank you for asking. And yeah, some of these types of things creep up on us, and so I wanted to just take a break from what we normally talk about. It still has some financial planning relevance, I think everybody can get something out of.   Marc Killian: Well, and I think these things are also very important because it's life, right?   Tony Mauro: Right.   Marc Killian: Unfortunately, things happen to us in life and we can't see them coming and they're heartbreaking and then unfortunate, but we still have to deal with them or our families might be left behind to deal with them. So why don't you just go ahead and jump in and lay this out for us and share some things?   Tony Mauro: Okay. Well, as we've done taxes for such a long time, you do see a lot of this kind of thing. And it's funny, it even affects us, but in a different way than if our own family, this was happening to because sometimes my aunts are here and then they're not.   Marc Killian: Yeah, and you form relationships with folks and it's like them finding out bad news is obviously heartbreaking for them and their family, but it's very personal for you guys as well, especially when you're a boutique firm where clients... It's cliche, but clients become friends.   Tony Mauro: They do. They become friends and in this situation, this is a younger family in their 40s, and we have them as an accounting client. They have a small business and we also do some financial planning for them. So they're in the wealth accumulation stage with where they're at. They've got three little kids.   Marc Killian: Okay.   Tony Mauro: Husband is a firefighter, and anyway, they got a horrible diagnosis last year that the wife has brain cancer and she's not going to make it. She's got maybe a year and a half left. So they've got a business they're trying to run. He is going to have work for a long time, but he is going to be left with three small children to have to take care of. You start thinking of some of this stuff.   Marc Killian: Right? That's daunting.   Tony Mauro: And they're trying to figure out... Well, let me back up a minute. On top of that, before we got them, they had a few issues that they still have some unpaid taxes with the IRS. We're trying to get that caught up and paid, but we've really shifted years immensely from, okay, trying to operate the business as a profit, accumulating things for retirement, to 180 degree turn of what are you going to do with the business when you're gone? Husband's not going to run it because he's a firefighter.   Marc Killian: He's busy. Yeah.   Tony Mauro: How's this going to look for them and whatnot? And he's going to have to carry on. We've basically been working with them on three areas. One, make up with a plan to make sure that we get the back taxes paid so the IRS is not hounding him several years down the line.   Marc Killian: Right.   Tony Mauro: Now, two, how are you going to sell this business? Because that's what we're looking at is trying to find a buyer either internally or externally to [inaudible 00:04:00].   Marc Killian: So you're going through valuation processes and so on and so forth there.   Tony Mauro: Yeah. And then now the shift has been in the financial planning area. It's really been more so a little bit towards advising on, well, how do we wrap up her affairs when she's gone? And then he's got to continue on and try to keep saving and build his own retirement plan. That's going to look much different than I'm sure... You just put yourself in that situation, just even mentally, what that would look like by yourself and possibly having a lot of years by yourself. I think to tie this to financial planning, I think we all... I don't care what age you are, I think you need to have a few things in place. One, a will. Two, a life book. We've talked about that before, and both spouses need to know what's going on with the finances and everything else so that if something like this were to happen, besides all the grief and all of that, you can carry on as best as possible.   Marc Killian: Well, that's a good point, Tony because you mentioned being in their 40s. When I was 41, I had to have a quadruple bypass and it came out of the blue and it was like, "Okay, if I don't survive this surgery," and the odds were pretty good of surviving it, but there still was risks. Obviously when there're completely opening you up and doing stuff, it's like, "We don't have any of these things in place yet," because I was thinking, "I'm 41, I got plenty of time." Right? And I think people do tend to do that. And that was the point of having this conversation today is that we're all one blood test away from maybe being uninsurable or being hit with devastating news and you start scrambling. And so that's again, the importance of working with somebody so that God willing, you're not going to get these kinds of news.   Tony Mauro: Right.   Marc Killian: But if you do, you've got some pieces already in place, which will hopefully make it a little smoother. Yeah?   Tony Mauro: I think so. And I always tell everybody, and I tell my own wife that too, my motto, everybody that's married, is that one day one of us is going to be alone.   Marc Killian: Yes.   Tony Mauro: And meaning that one of us is... We're probably not going to die together and we're going to be faced with that and carrying on, whatever age that might be.   Marc Killian: Indeed.   Tony Mauro: And we have to have a plan, and my own personal plan, besides the will and some of that legal stuff because that's a given, is really having a playbook, if you will, especially in this digital age of where everything's at, especially if the spouse is the one that doesn't do the finances.   Marc Killian: Well, let's drill that down for just a second, Tony. So think about that. Everything we have out there nowadays, if one person's in charge of it, and let's just for the sake of the argument say that unfortunately this person that received the terrible diagnosis is the one that handles that, and they may no longer be here sooner than expected. You've got to get the other person up to snuff, right? They've got to get up on all the things. Where are the accounts? Passwords, geez. Think about the complicatedness of that.   Tony Mauro: Yes.   Marc Killian: Or even just someone even passing unexpectedly, a car accident, and you don't even know how to get into some accounts, or even into their computer maybe, right?   Tony Mauro: That's it.   Marc Killian: So a lot of these things, you really got to put together. And I know a lot of advisors provide tools and resources to help their clients with that kind of stuff.   Tony Mauro: We do. With our advising clients, we spend a lot of time, and part of every annual meeting, we talk about that, of just these kinds of things is, "Have you checked this off that you've got a password keeper?" So to speak.   Marc Killian: Right.   Tony Mauro: And they know where it's at.   Marc Killian: Or a notebook somewhere where everyone knows where it's at. Right? Is it in the sock drawer and everybody knows which one it is? Or something.   Tony Mauro: Right. So I think a lot of that, sometimes... Well, I know people don't think about it, not to the extent that I go into it with them, but it's just going to make... I think if you have some devastating news or just all of a sudden, like you were talking about, hit by a car or a car accident type thing, where you're just here today, gone tomorrow, at least these people have a little bit of time to at least plan. You got to think about some of these things because I think it's going to make that transition a whole lot... I don't want to say easier, but at least tolerable, I guess.   Marc Killian: Yeah, it's tough sometimes to find the right word, right? It's like you've got to be able to... Like it or not, life moves on. Right? Life continues on for the people left behind, and I think we all go through the... Obviously there's the stages of grief. Right? I sat there in the hospital, but they kept me a full... I want to say 36 hours before they actually did the surgery. And when my wife and daughter left for a little bit to go pick up some things to come to be with me, and it was maybe no more than an hour and a half by myself, but boy, your mind goes through a whole lot of stuff in that hour and a half. And you find yourself going, "How are they going to get on without me?" And then you kind of go, "Well, they are going to have to move on without me." And then you feel like, "Well, all the things I'm going to miss," and you get angry and you get sad, and you're all over the map on that kind of thing.   But I think once you had a chance to... In this situation you've brought up today, unfortunately that's not a lot of time left for this individual, and the heart certainly breaks for them, but maybe it gives them time to at least get some of these things checked off and planned, versus something like a car accident or an emergency surgery that you don't wake up from.   Tony Mauro: I agree. A lot of times, even with this situation, and I ask my staff that, is, "Put yourself in this person's situation. How would you elect to spend the next year and a half or two? What would you do?" And just let that settle in a little bit as the person receiving the diagnosis.   Marc Killian: True.   Tony Mauro: Obviously there's some planning to do, but there's all kinds of emotions.   Marc Killian: And they want to enjoy their time that they have left. Right?   Tony Mauro: Yeah.   Marc Killian: So unfortunately, and if you are caught a little off guard, maybe you're a little younger and this happens, you are having to do some work, some scrambling to some of the things that you're helping this young couple with, but at the same time, knowing that you and your staff want to make that as efficient and painless as possible so that the person can enjoy, maximize their time that they have left with their loved ones. You and I talk every... Twice a month, we do a podcast and we do some fun stuff. We do some serious stuff, but we go all over the map in the podcast. But ultimately, at the end of the day, what you guys do is very, very serious. Whether it's dealing with folks' retirement money and a good long life that they've enjoyed to the fullest or bad situations or whatever the case is.   But what you guys do is very, very serious and important stuff when you really stop and think about it, because we get to a point in life where you don't have that time on your side anymore to this, that, or the other, whatever that might be in your little world. And so it's really important to be working with somebody, I think that can help you, again, to my point a second ago, be as efficient as possible so that you can maximize your time, because even if you get blessed with a long life, Tony, do you really want to sit around and stress over your finances in your retirement years when you could be hopefully living that up and enjoying those years that you have left? Whether it's a short amount of time, like this poor unfortunate person, or a nice 30-year retirement. Whatever the case is, you probably want to spend that doing the things that you love doing.   Tony Mauro: As much as possible. Yeah, I would agree totally. Because even if you are blessed enough to get into retirement, have a long one, the key is generally, the health starts going down a little bit and how much of that is really good time versus total time?   Marc Killian: Sure. Yeah. My mom's 83 in about a month, and her mobility is now starting to suffer a little bit more, and she's pretty frustrated by it, but you've got to find... Like everything in life, we have to find these silver lining points where we can.   Tony Mauro: That's right. That's right, because my dad's going through the same thing at 83, and he is still relatively healthy, but he cannot do the things he did 10 years ago.   Marc Killian: Even five years ago.   Tony Mauro: Yeah. He's had to readjust and find new things that he can like to do. So yeah, it's all over the board, but it just was a good... I don't want to say story, but-   Marc Killian: Definitely not a good story, but an important one I think, because folks, again, you never know what's going to happen. We're all literally one blood test away from terrible news sometimes or whatever the case is.   Tony Mauro: [inaudible 00:12:47].   Marc Killian: Or one diagnosis going in. I just went in because I was like, "Hey, I'm winded. Why am I winded? I'm a little fat, but I shouldn't be that winded at 41." And they're like, "You're not winded. You have four massive blockages. You can't leave." They wouldn't let me leave the hospital. So you just never know when these things are going to happen, and that's the importance of... Even if you feel like you're in a place in life, Tony, where, "Hey, I am not quite ready for a financial professional yet," maybe you are, and maybe it's worth looking at a little sooner than... I think a lot of people feel like, "Hey, I don't need to talk to a retirement professional until I get over 50." But to your point, luckily for these folks, I guess a little silver lining, if you will, as they were already tax clients. So they had you there now to help start guiding them with some of these other pieces.   Tony Mauro: Yeah, yeah. No, I agree because I do think the younger people certainly don't give it as much thought as they need to.   Marc Killian: No, and understandable. None of us do.   Tony Mauro: No.   Marc Killian: We're all invincible till we're not.   Tony Mauro: Yeah. That's it.   Marc Killian: Yeah. Well, folks, again, it's terrible to have to share stories like this, but it is part of life and it's why it's important to have a team on your side, some people that are there to help you finding the right financial professionals for the time of life that you're in, and the things that you might need to tackle events, whether it's traditional retirement or a sped up timeline, like this situation, this story here. So if you need some help, reach out to Tony and his team at yourplanningpros.com, yourplanningpros.com. Don't forget to subscribe to the podcast on Apple or Spotify, whatever platform you like using. We're on all the major ones there, so just type in, "Plan With The Tax Man," in the search box, and you can find it that way. Or of course, just go to Tony's website, yourplanningpros.com. Tony, all my best, my friend, and thank you so much for sharing the story and the very best to these folks as well.   Tony Mauro: See you on the next episode.   Marc Killian: All right, my friend. We'll see you the next time, right here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Imagine your retirement plan as a sports jersey, customized just for you. Today, we're exploring how every detail from numbers to names can define your financial future.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc Killian: Imagine your retirement plan as a sports jersey, customized just for you. Well, today we're going to explore how every detail, from numbers to names, can define your financial future, here, on Plan With The Tax Man.   Speaker 2: Look up in the sky.   Speaker 3: It's a bird.   Speaker 4: It's a plane.   Speaker 5: No, it's the tax man. He may not be a superhero, but Tony Mauro has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for Plan With The Tax Man.   Marc Killian: Hey, everybody, welcome into the podcast, Tony Mauro and myself here to talk about tailoring your financial jersey for the perfect retirement fit. How's that for a little metaphor? Action going on? Tony and I are going to have some fun. It's preseason football time, and so I figured, hey, what the heck, right? Let's have a good conversation about this kind of stuff, Tony. And people are getting excited, geared up for the new sports seasons coming around. Hockey will be back. I'm a hockey fan. So, hockey will be back in about two months. So, why not? We'll have a little fun with this stuff. How you doing, my friend?   Tony Mauro: I've been good. We're approaching the end of summer here, so state fair time here, and everybody knows that everybody goes out and has fun at that, but then everybody gets into the fall mode. So I figure, yeah, like you, football season around the corner, college football for us here, and everybody gets excited this time of year.   Marc Killian: Yeah, yeah. We're taping this second week of August, I guess. So, we'll be dropping this this week, I believe. Yeah. So, it's right around that time. College football, professional football's about to hit us. Like I said, several other sports will be back soon. So, good stuff. Of course, baseball's obviously going. Seems like baseball goes forever anyway.   Tony Mauro: Forever.   Marc Killian: But let's have a little fun with this analogy, Tony. So, every jersey, well, has a number, I guess, unless... Well, wait, the Yankees don't have names, right?   Tony Mauro: No.   Marc Killian: But they have their numbers, right?   Tony Mauro: Yeah. Numbers, no names. Yeah.   Marc Killian: All right. So in some sports, though, the jersey number is dictated by the position you play, or at least it used to be. I still have trouble sometimes with some of the football stuff nowadays. It used to be linemen only wore certain numbers, like fifties, sixties, seventies, that kind of thing. And quarterbacks were always 19 and below, kickers, punters. But it's gotten a little looser, I guess, with the restrictions on some of that stuff nowadays.   I think some of the players, when they came from college, where I don't think those rules applied as much, I think they were really adamant about keeping their number if it was particularly lucky for them or whatever. So, therefore, they wanted to keep it, right? You might have a wide receiver that's a number two, even though that didn't used to be the norm. They used to be... Mostly, all receivers were in the eighties, right?   Tony Mauro: Yep.   Marc Killian: That was the norm for that position. Anyway, so if you've got numbers tied to the jerseys, well, you're probably definitely going to have numbers tied to your retirement account. At least you hope you do, anyway.   Tony Mauro: You hope you do. And back to football for a second, some of these contracts these players are getting-   Marc Killian: Oh, man.   Tony Mauro: ... with enormous money being spent, and they only have a very short career in the NFL, of course. It's not like baseball where you can play it a long, long time. But nevertheless, I don't know if that dictates some of the getting away from some of the traditional jersey stuff because they're making so much they get to decide, but anyway.   Marc Killian: Oh, well, yeah, you're paying somebody $250 million, I'm pretty sure they let them do whatever you want, right?   Tony Mauro: Whatever they want. But I do think, I mean, obviously, everybody's got their own number in their head about how much they should have for retirement. And really, I think what we work with them a lot of times on is they tend to focus on the wrong number. It's an important number. Know what you're going to have your nest egg, or your stash, whatever you want to call it. But I think they tend to focus too much on that.   Marc Killian: Oh, for sure. Yeah.   Tony Mauro: Yeah. The more important number, really, is whatever you have, what income is that going to throw off? Because that's what you're going to use to pay your bills and whatnot. And if that's not enough, how much do you need to get into the principal or your stash to have a retirement?   Marc Killian: I like that, stash.   Tony Mauro: And-   Marc Killian: I like that, the retirement stash. That's pretty good. I like that.   Tony Mauro: Yeah. The stash, your nest egg.   Marc Killian: That's right.   Tony Mauro: And a lot of people don't end up adding up properly. I mean, we do it with them. Because you got to take income from all sources, not just your 401(k). I mean, there's your social security. There might be a pension in there. There might be something else. Maybe you've just got an account sitting. So, it's important to go over everything so that you know what the right number is and then what that first number is that you focus on because that is important. It's part of it.   Marc Killian: Yeah. Well, and think about players, taking it back to that. Like I said, sometimes players, they come out of college, and they're adamant that they want to keep their college number for whatever reason, sentimental value or an attachment, good luck, whatever the case is. And so, sometimes we do kind of get attached to thinking a specific number is what we need to have, and maybe that is the wrong viewpoint of doing it.   And you got other players that are like, "Hey, I'm going to this team," and let's say that number is tied to an all-time legend or something. And it's like, "A, you're not getting that number, first of all, or B, have to ask their permission," or whatever the case is. And they're like, "You know what? It's not that big a deal. Let me focus on just having a good career here no matter what my number is." And I think that's maybe the message in your retirement number. While it's okay, I guess, to shoot for a specific, let's just go with the million dollar thing, while it's okay to maybe want to shoot for having a million dollars when you get to retirement, I wouldn't let that be the complete hang-up, right? That's what you're saying.   Tony Mauro: What I'm saying, yeah, is because depending on where you're at, and hopefully you're working with your advisor on these goals and things, you may not be able to achieve that number. And so, your number might be a little different, even though it's in your head, "I'm going to try to get to a million," there just may not be enough time and money to put aside to be able to do that. So, you got to adjust.   Marc Killian: Yeah, got to adjust. All right. Well, actually, so I guess thinking on that point, we'll go to the next point, which is, typically, jerseys always have the name on the back. As we just established, the Yankees don't do that. And actually, the Indiana Hoosiers don't do that either.   Tony Mauro: That's right.   Marc Killian: They don't put players' names on the back of the jerseys. But, and this might sound dumb, Tony, the way I'm going to word this, but obviously, it's important for your retirement plan to have your name on it. Now, that might scratch somebody's head for a second and go, "Well, yeah. Hello." But think about those places where basically they're providing almost the same exact plan from person to person to person. Is it really your plan or is it one that the company, this larger broker firm or whatever, has deemed a good fit for 80% of people or something like that?   Tony Mauro: And it's so important to have an individual plan. I think that's where we're going with this, just like the name. And you're right, it has to have your name on it, meaning that it has to be specific to you and your circumstances and what you've got going on in your life, not just be-   Marc Killian: Yeah. Not like a rubber stamp kind of thing.   Tony Mauro: Yeah. Yeah, just not the run-of-the-mill, "Well, here, you should be fine. Do this," type of thing. Maybe in most cases you will be, but you want to know. I mean, that's the whole value of working with an advisor, I think, is you want to have a unique plan, and it needs to be based on your set of circumstances, not just run-of-the-mill. Some of it you can apply to everybody-   Marc Killian: Of course. Yeah.   Tony Mauro: ... basically, but others you really can't because everybody's got different goals and different lifestyles and what they want out of retirement. So, definitely, it's-   Marc Killian: Well, I think in a world where we have crafted so much stuff, Tony, to be applicable to a large number of people, and I get it, businesses, no matter what the business, tries to make their product, if you will, applicable to as many people as they can because then, stands to reason, they get a chance of making more money, right? Because, hey, if everybody can fit into this jersey, for example, we'll just stick with that, if everybody can wear an extra large, or the majority of people can wear this particular size, then they know they're going to print more of those because they're going to sell more of those, right?   And so, if you're thinking about the brokerage places, if they're like, "Hey, we've got this pretty good plan that really works pretty well for 75% or 80% of people. We'll just rubber stamp names on this and send them in and out the door and make this a little bit more turnstile, turnkey, if you will." And maybe, to your point, maybe that does work for someone, but why risk it when you could get a truly customized plan from more of an independent boutique firm like yourself than just some big box cookie cutter thing?   Tony Mauro: I agree. And we tell clients it's similar... And you're right, businesses are out to make money. And I always use McDonald's, who's been very successful over the years, but you buy a McDonald's hamburger here versus where you're at or even versus overseas, they all taste the same.   Marc Killian: Should, right. Yeah.   Tony Mauro: That's how they make money.   Marc Killian: Right.   Tony Mauro: And you don't get to go to McDonald's and say, "Well, you know what? I don't really want what you have. I want this eight ounce fillet with such and such." They're going to shake it out and vice versa. But so tying that back to financial planning, really, is you have to, in my mind, have some individuality. Can't go off that standardization type of thing because I don't think you're going to really... You're certainly not going to get the value out of your advisor if you're doing that.   Marc Killian: True. That's a good point. That's a good point. All right. So, we would be remiss if we didn't talk about some jerseys, they're pretty hot, right? They look pretty good. You're like, "Okay, these are nice looking jerseys." And then, there's some that are just god awful, right? I'm looking at you, 1980s Astros, with some of the most hideous jerseys ever known to man. Or if you're a fan of the Pittsburgh Steelers, hey, no offense, but sorry, those jailbird ones from the '20s or '30s-   Tony Mauro: Oh, yeah. I-   Marc Killian: ... they use them to throwback, or they call them the bumblebees sometimes, not a good look. But the jerseys might be hot, they might look great, but the team, it's going to stink this year.   Tony Mauro: It's going to be bad.   Marc Killian: They've lost players, whatever. They're in a rebuild mode, whatever the case might be, right? So think about the White Sox of the '80s, right? They often get lauded for their jerseys, but they didn't have a single winning season during that entire period, right? The pinstripe. Or not the pinstripe, the Chicago White Sox of that era... Well, no, they did have some pinstripes too, but different than that.   Tony Mauro: I think they did have it.   Marc Killian: Yeah, different than the Yankees. But anyway, so I mean, you want a good... I guess, Tony, do you want a good-looking plan, or do you want an effective plan? I guess that's where I'm going with this.   Tony Mauro: Yeah. Well, I think overall you want an effective plan. It doesn't really matter if it looks good or not.   Marc Killian: How many pie charts are in it?   Tony Mauro: Yeah, how many pie charts, how fancy it is, which is kind of funny. I was just in Denver last weekend visiting my son, and we stayed right near Coors Stadium there for the Rockies.   Marc Killian: Okay.   Tony Mauro: He informed me, "I don't follow them," that, "I think they have a second-worst record in baseball right now. The White Sox, I think, are in the cellar, and they've only won like 28 games," he said, "which is awful." But the Coors Stadium there, I went there, and it's cool. It's right in the middle of downtown. I mean, it's got a great vibe to it. But obviously, the product, the team right now is not very good.   So, getting that back to our talk, you're right, I mean, just you have some plan and it's filled with fancy pie charts and things that maybe you don't understand, and maybe it's even thick, so it feels like you really got something, is it effective for you and your situation, like we just talked about? Because if it's not, none of that really matters. At the end of the day, what matters is are you going to get to your goal and be able to do what you...   Marc Killian: Yeah, exactly. Are you going to be able to? It doesn't matter how good it looks, all the boilerplate stuff that's in there. And even if you've got a good effective plan that looks really nice, if it's more complicated, then you can really, I guess, deal with, or it's not resonating with you, are you going to be as effective with it, right? So, just some things to bear in mind with that.   And look, we'll end it with this one. I'll just tie this last one here together, Tony. Jerseys change over time to the point of some jerseys look good, they go through periods where they do redesigns, and so on, and so forth, whether it's to do the classic throwbacks, or modernize them, or whatever the case might be. And that's why, because the marketing office, the head, somebody in the office somewhere said, "Hey, we need to overhaul. We want to freshen up," whatever. Well, the same thing with your retirement plan. I mean, it's pretty easy, low-hanging fruit here, but that's the reality of doing reviews. That's the reality of getting those annual, or more than maybe annually, conversations in with your advisor so that your plan is fresh, I suppose, and up-to-date, because the financial world is ever-changing.   Tony Mauro: It's changing. That's the only thing that's the constant there is that. And if you just again go with, like we talked about, some type of plan that is a boiler point or... What do you call it? Boiler, just standard-   Marc Killian: Boilerplate. Yeah.   Tony Mauro: Boilerplate. And as things change, and as your life changes, and the economy changes, and all of that, that even tax laws, because, obviously, they're set to maybe have some major changes at the end of next year, that if you're not going to make these changes and change with things as your circumstances change, you're going to be left behind. Not that you're going to end up in financial ruin-   Marc Killian: Sure.   Tony Mauro: ... but you may not end up with meeting your goals or really having the type of retirement I think that you want. And this is the whole purpose of, I think, being able to work with an advisor and having those annual, maybe more, meetings, talk about that kind of stuff. Most advisors, they're not just going to come in and just basically just talk about the weather and things like that. Most of them are using financial planning software. Most of them are going to be able to tell you where you're at right now, "What's going on? Are we still on track?" after you talk about the craziness in the market and all that.   Marc Killian: Yeah, yeah. I mean, there's always going to be those one-offs, and the market's always going to do its thing. It's going to be moving around. So, little adjustments are required here and there. Sometimes your life's going to change. Somebody, a daughter's getting married, and it's going to be a bigger deal than you thought, and you were going to pay for the whole thing, and now you got to look at the best structure to change this or that. Even if you've got a great plan put together with Tony and his team, life changes, right? So, you may have to update that.   And of course, for many people, they've been doing it themselves because it's been fairly easy, I guess, for the last little bit when the markets overall have been pretty good on a fairly long run. It's definitely had some blips, and some sizable blips, over the last couple of years, but still, I think a lot of people have been doing the DIY mode for a while. And if you're growing your wealth, Tony, it's a lot easier to be in DIY mode than when you get to actual retirement or getting close to it because it's, again, when you pull one lever in retirement, it affects so many other things. How you pull your income, from where and when, it changes a lot of stuff. And that's where, I think, people start to go, "Okay, this is maybe more complicated than I realized."   Tony Mauro: Yeah, I agree. And for us, it's using what we call tax-intelligent type of planning so that especially on the distribution stage, like you're saying, there are ways to minimize taxes, because taxes are the biggest chunk that could be taken from you. So, if you just haphazardly start doing that, it's going to work, but you could end up paying a lot more to Uncle Sam than you really needed to legally. So-   Marc Killian: Yeah, absolutely.   Tony Mauro: ... keep that in mind.   Marc Killian: Yeah, it's definitely important to get on with an advisor, have a conversation. As always, if you need some help and you've got some questions, reach out to Tony before you take any action. You always want to do that no matter what you hear on any kind of financial thing. Whether it's big talking heads or little talking heads like us, whatever the case might be, you certainly want to have a conversation with a qualified pro. And Tony's been doing this for 30 plus years. He's a CPA, CFP and an EA. And if you're already working with him, you already know that.   If you're already listening to the podcast, thank you so much for checking out our episodes when we do these, and hopefully they provide you with some good nuggets of information and things to think about. And don't forget to share the podcast with others that might benefit from the message as well. They can find it on Apple, or Spotify, or YouTube, and you can find all the information at yourplanningpros.com. That's yourplanningpros.com. You can also just check the show notes of each episode. There's usually some little details in there as well. You can click on the links that way to subscribe to Plan With The Tax Man on whatever app you like using. So Tony, thanks for hanging out, my friend, and getting into the sports feel of this thing, and hopefully your college team does well this year.   Tony Mauro: So yeah, we'll see you on the next one. My college team, my true love is, of course, Notre Dame, and, of course, then the Hawks.   Marc Killian: Okay.   Tony Mauro: Everybody starts out, sky-high expectations, and then it just starts dwindling.   Marc Killian: Well-   Tony Mauro: We'll see.   Marc Killian: Yeah. What is it? Hope springs eternal, and I think that certainly applies to sports fans. They're always like, "It's a new season. We got a shot."   Tony Mauro: Oh, yeah.   Marc Killian: Even if walking into it, you know your team doesn't look good on paper, the true fans are like, "Yeah, we don't look that great on paper, but you know what? You can't measure. Paper doesn't measure heart, so we're going to see how they do," or something like that. All right, folks, well, thanks for hanging out with us again. Don't forget to subscribe to us, and we'll catch you next time here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Imagine retiring comfortably on just $42 per month—sounds too good to be true, right? Well, it's exactly the assertion you might have seen in the headline of a recent article online. So today, we'll dive into the sensational claim and uncover what it really takes to build your retirement nest egg.   Article https://www.fool.com/the-ascent/buying-stocks/articles/you-can-retire-on-4167-a-month-if-you-do-these-2-things/   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc Killian: Retire on $42 a month. Let's talk about that this week here on the podcast. This is Plan With The Tax Man with Tony Mauro. Is the article clickbait or is it possible? Let's get into it.   Marc Killian: Hey everybody, welcome to the podcast. Thanks for hanging out with Tony Mauro and myself as we talk investing, finance and retirement. And we're going to talk about this interesting article that we found here that we want to run through and just kind of see if this stuff, is this kind of stuff just clickbait? Probably is. Or is it something that is worthwhile for people to seriously think about? So we're going to get into that chat this week here with Tony, and we'll share links to the article so you guys can check it out for yourself. And I think that realistically, Tony, this thing probably is clickbait. So I want to jump right forward into the conversation because one of the big things is talking about advisors all across the country for years have been saying, "Hey, you got to put at least 10% away in order to save for retirement."   Now, that new number has changed to maybe 15%. And one of the things talks about how it's really difficult for... I mean, it's easy to do if you have a long timeline to retire on $42 a month, but if you don't have that timeline and you haven't started early, makes this really difficult to pull off. Don't kind of walk yourself down that line of, well, I just won't do anything because I'm never going to get there anyway. Something's better than nothing at any age. Would you agree from your years of experience or am I crazy?   Tony Mauro: Nope. I would agree a hundred percent. And when you, even in your scenario, 10 years or no, you said 17 years-   Marc Killian: 17, yeah.   Tony Mauro: And you can get to 10% if you can do that, you're going to have a decent size nest egg. Now, it may not coincide with the goals you thought you wanted, but maybe instead of just living off the income, well, you had to spend some principle. Or maybe you need to work a little bit in retirement, but at least you know, but you'd definitely be so much better off than if you didn't do anything that it's never really too late to start.   Marc Killian: All right, so let's kind of look at some more of these pieces here, Tony. The article mentions a 10% average annual return from the stock market on investments. All right. How realistic is this expectation over a long period? I mean, any kind of data you want to share with us over that 10% IED. It sounds great. How feasible is it?   Tony Mauro: I would say I tried to use a little lower percentage. I mean, if you look back all the way back to the beginning of the stock market or the S&P 500, you can kind of get around that, but I think there's much more to it than that. There's tax efficiency, there's some risk factors. Maybe you're not a real risk-taker. So maybe realistically, I always tell them maybe we should start out with a little bit lower projection for that. That way if we end up at 10% over long-term, we are even better off. But let's not assume that. So I think that's a little, I don't want to say far-fetched because it is probably a round that. But again, not everybody wants to take those types of risks. So I don't like to go with that because then once you tell people that, boy, when it doesn't happen every year, they're upset. That's not the purpose.   Marc Killian: They throw this AI stuff at us left and right all the time now. So every time you do something, you're going to get some information from it. So take that with a grain of salt. But just kind of quickly to follow up on your information there, Tony, since the S&P 500's average annual return has been around 10.5% since its inception in 1957, a hundred years, a hundred-year average, 10.6 average yearly return, or 7.4 when adjusted for inflation. Now, so I wanted to touch on that because okay, you could sit there and say, "Okay, maybe realistically over 50 years of working towards retirement, I should be averaging 10%."   But then you got to factor in inflation, which is okay, according to this, it's about 7% you're now bringing in. Then you got to start thinking about things like sequence of returns risk, right? So I want you to explain that a little bit to folks, Tony, if you would, because if you retired in 2001, guess what? You went through the lost decade where the market didn't return anything. So there's 10 years out of this 40 or 50 year plan you had that were just shot to hell.   Tony Mauro: Exactly. So I think when it, depending on, again, when you start, I think it's naive to just use that overall 10% number in projections. And another thing stepping back to it is that's assuming A, that you're in the S&P 500, maybe an ETF or something. But let's say that you get to little skittish and you decide to get out of the market five or 10 times or 20 times over 30 years, the best days, and you miss those, what that does to returns.   And so our job is to try to, wherever our clients are at, is to keep them focused on the end goal and not let them do that. But there's a lot to it. Then you jump ahead to inflation, which a lot of clients don't ever take into consideration. We always do because we're saying, it's what you get to keep, what we're shooting for and inflation we have no control over. And that's going to average what it has. And so that's why we're trying to get a little bit better returns rather than just leaving money in a cash account or something. Because inflation is just going to erode that future value of that so badly that your nest egg's not going to be anywhere near what it would be if we can get decent returns over the long haul.   Marc Killian: Very true, very true. So what is sequence of returns risk that I mentioned for folks who are not familiar with that?   Tony Mauro: The sequence of returns risk, you mean talking about when they pull money out or?   Marc Killian: Yeah, so like if you were putting money in your portfolio, but depending on when you retire, what the economy's doing, what it can do to you, right, what can happen?   Tony Mauro: Oh, you're talking about that part.   Marc Killian: Yeah.   Tony Mauro: Yes. Yeah. Well, it is just like you're talking about the decade of lost returns and you started saving for retirement, say in 2000, you went 10 years and didn't have any returns, versus a guy who started saving, I don't know, say 20 years earlier. Yeah, he's had the same decade of lost returns, but he's already well ahead of you even if you chose the same investments just because of the timing and the sequencing of returns. I mean, I went through it. I continue to invest my own money. And boy, I remember it, that 10 years I was always complaining to my wife is, "Boy, these investments, they're just not growing. I mean, we've lost 10 years now." In theory we did, but I kept investing dollar cost averaging just like we tell our clients to do. And so now the last 15 years, boy, I've seen some nice rewards for that-   Marc Killian: Okay, gotcha.   Tony Mauro: ... by keeping in the market, keeping investing because it wasn't good. So there's all of that that comes into play as well, which is why I like to use a lower average even going in because it depends on when you start. If somebody's starting today, well, we're kind of at market highs. They could come in and say, "Well, geez, the market's too high." I think it's going down over the next three years. It's been everything else that's going on in the world into it. And yeah, maybe they're right, maybe they're not. But I tell them, you got to get started. Forget about all that. The important key is to get going. And if we have a downturn, then you'll end up rewarded the next upturn.   Marc Killian: Yeah. And so you kind of think about it, you've probably seen things like this folks, these breakdowns on this where you have two different people, person A and person B. They both have a million dollars on retirement. They plan on pulling 45,000 out a year or 40,000 out a year, 4%, whatever you want to call it, easy math. And the first person has positive returns in the first three or four years of retirement. The market is up those three or four years, but then they experience a couple of downturns a little later. It has a dramatic effect versus this person B, who's first three or four years of retirement, the market's down every year because it winds up. That's what really starts to wind up hurting. And it really changes the longevity of your plan, right, Tony? That's where you guys have to run stress tests in various scenarios.   Okay, what happens if we retire on an up market? What happens if we retire on down market? How long does this nest egg last? And then that way you're able to speculate out and then maybe make some adjustments or have plans in line for such events, right? Because you can't control what the market's going to do, but here's the projecting that we think is going to happen should you retire with this, this, or this. And then that comes back to taking money from what accounts and when, right? Maybe that's changing when social security gets turned on. Again, pulling one lever and a bunch of other ones get impacted.   Tony Mauro: The stress testing, while that sounds like a bad word, it's actually a lot of fun.   Marc Killian: Yeah. It's not stress testing your heart.   Tony Mauro: Yeah, it's not going to kill you. But the computers make it very easy now to run scenarios in the matter of seconds. And really what it spits out, a long story short is the percentage of time, or say for example, based on where we're at now, taking worst case scenarios, best case, how much money you want to take out. You've got to say, I'm just using an example, 90% chance of your money lasting you to 95.   Marc Killian: Okay.   Tony Mauro: And that's through thick and thin. And when people hear those percentages, they can resonate with that. They say, "Well, that's pretty good," versus, well, you only got a 40% chance. They're like, oh boy, we got to do something different. But I don't like to get people lost in all the calculations. I like to just go with it based on here. This is the percent that we think. And if that's above 85%, you're in good shape and you can feel pretty good about what you're going to do.   Marc Killian: Okay. Well, so overall, and again, we'll share links to this article. We kind of got a little bit sidetracked, but I think the idea still being fairly sound and having a chat about this, do you think articles like this, Tony, ultimately help or hurt folks thinking about retirement, right? Is it an oversimplification? Is it information overload? What do you think?   Tony Mauro: I think it's information overload. I mean, they disguise the headline as simple. So that's pretty simple. But I think there's so much more to it that when you get down, like we just discussed it for what, 15 or so minutes and we just touched the surface, that there's a lot of information that has to go into it before you make a good decision. So I think it's probably a little too much. It does get the juices flowing about maybe asking some questions to your advisor, and you could have the same type of discussion that we just had and get yourself online or in line if you're not. But I think it's a little too much info trying to be simple. But obviously the goal of it is to probably market and to probably try to get the phones to ring or emails to be coming in.   Marc Killian: Yeah, if it gets you, I think articles in general, in our current world that we live in with everything online all the time, that if it gets you motivated to take some action, I think that you can find a positive there. But I think if you just run with it without vetting the information with a proper resources, truly like a trained professional, then you can be hurting yourself and doing a disservice. So, hey, if it causes you to listen to this podcast because you saw this headline and then you then decided to call up Tony and say, "Hey, can I retire on saving $42 a month?" Then great. Because now, you've taken action. But just temper that with a grain of salt. So when Tony comes back and says, "Not if you just started saving $42 a month and you're 55 years old, no."   Tony Mauro: Yeah, right.   Marc Killian: I mean, yes, you can retire, but it's probably going to be more heavily on social security than you might've wanted. I think I use my mother often, Tony, on these conversations because she's retired solely on social security. She's 83 now, and is she surviving? Is she okay and comfortable? Yes. Is it the retirement she wanted? No. Right. She doesn't get to take trips or didn't as before. She's gotten to the point where her body's not letting her, but she didn't get to take the trips that she wanted to. She doesn't get to do some of the things that she wanted to, that she probably had plans or dreams for. But she is okay, right? She is surviving, she is comfortable, she is overall happy, but she also does require some help from her children. And I think most of us don't want to be there. She certainly doesn't. She tells me all the time, "This was not my plan." So that's the point of having a plan in my opinion. And I'm sure yours as well.   Tony Mauro: I think so. That's the whole point of having a plan, is a story like that. And at least, like I say, I usually don't have much to say good about the government and taxes and everything, but they do have program and social security is one of them. And yes, it has problems and that's a whole another story, but at least it makes people comfortable and helps them along those lines. And otherwise, I mean, what other options would she have if she didn't have that? She maybe out in the streets or her family would really have to take care of her and have her move in maybe. But so yeah, it is those types of stories that you hear about. I got an aunt and uncle that are going down that same path. They're in their 70s. They had their own business, didn't really put a lot into the system for social security. So their social security benefit's very small. No savings. So they'll get by, but definitely not what they had thought a long time ago where they would be.   Marc Killian: Not what you hoped for. Yeah, exactly. Well, all right folks, that's going to do it for us this week. So again, we'll post links in the show notes there so you can check out the article if you'd like as well. But I think at the end of the day, when we see salacious headlines or interesting things, hey again, if it gets the juices flow into what make you want to learn more or find out more about the situation for your unique needs, then great. But definitely vetted out and walk through that conversation with a qualified professional. Somebody like Tony, who again is 30 years experience in the industry. He's a CPA and a CFP and an EA and a great resource for you to tap into.   So he's in the Iowa area, but he's got clients all over. So if you're listening to the podcast and you're from someplace else, don't hesitate. Still reach out to them, go check him out online at your planningpros.com, that's your planning.pros.com. Tax Doctor Inc. is the name of the company. Lots of good tools, tips and services there. You can check out, you can get in contact with them, you can subscribe to the podcast, all that good stuff. Drop a line into the team, whatever you need. So go check them out at your planningpros.com. Tony, my friend, have yourself a great remainder of this month, which is just about over and I will catch you a little bit later.   Tony Mauro: All right, we'll see you on the next episode.   Marc Killian: We'll see you on the next episode of Plan With The Tax Man with Tony Mauro.   Speaker 7: Securities offered through Avantax Investment Services SM, member FINRA, SIPC, investment advisory services offered through Avantax Advisory Services, insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Are you telling yourself financial lies? Discover the top 5 lies people often tell themselves about money and retirement. Some of these could be severely holding you back, so stay tuned!   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc Killian: Are you telling yourself financial lies? Well, this week on the podcast, discover some of the top lies we often tell ourselves about money and retirement, some of these could be severely holding you back, right here on Plan with the Tax Man.   Hey everybody, welcome to the podcast, Tony Mauro and myself back to talk investing, finance and retirement. And we're going to talk about some money lies we maybe tell ourselves about how we deal with things and handle things. I think it's something that we all do in various walks of life. We kind of, I don't know, little white lie ourselves, kid ourselves, whatever you want to kind of call it. I think we all can probably admit that we do it about various different things, and certainly money is one of those ones where we can do that.   So I thought this would be a good conversation for Tony and I to dive into today because, Tony, you see people doing these kinds of things on the regular. They kind of come in and you hear these different excuses that we make or things of that nature. It doesn't mean you're a bad person or a bad investor or anything like that. It just means it could be something that's causing you to not be as efficient or where you'd like to be in your retirement journey. So I thought it was a good idea to talk about that. How you doing bud?   Tony Mauro: I've been doing well. How about you?   Marc Killian: Doing pretty good. So do you kind of see these kinds of things often where people, they kind of rationalize, maybe that's a better word. We kind of rationalize how we have made choices we've made or how we feel about certain things in our money standpoint. You have to kind of show them how it's holding them back from reaching their goals.   Tony Mauro: We do. We hear it all the time. And we can make probably a list of 50 of these babies and we could be here all day.   Marc Killian: Okay, well we'll just do five. How about that?   Tony Mauro: Yeah, I picked top five, but you're exactly right. People say these kinds of things all the time because obviously they do them.   Marc Killian: Sure.   Tony Mauro: And most of them go against your bigger goal and your plan. So that's why I wanted to talk about some of these today.   Marc Killian: All right, well let's jump in and do the first one. I love this first one for the fact that you got to be honest with yourself folks as you're listening to this. The first one is, I'll pay back the money that I've taken out of my savings or borrowed from my own 401k. All right, come on. Let's be honest. How many times through your life have you said, "All right, I'm going to take some money out of whatever account to do some thing and I'm going to put it back." We never pay ourselves back. I shouldn't say never, but many people wind up... Life always gets in the way, Tony. And so it's kind of hard sometimes to truly pay yourself back.   Tony Mauro: It is. And just like you said, I would never say never, but I almost never see clients do that and pay themselves back. Hardly ever.   Marc Killian: I guess the 401k, you kind of have to, if you did the loan thing, right?   Tony Mauro: If you did the loan thing, you have to. But many times they'll just say, "I just took money out of my 401k," and we'll ask them why, and it's not really an emergency. And they'll always tell us, "But don't worry, I'll pay it back." And a year or two goes down the road, they haven't paid it back.   Marc Killian: And boy, that's like a triple whammy. Well, I guess it could be, depending on your age, right? If you hit with the tax, the penalty plus the loss of compound.   Tony Mauro: Yeah. All that comes into play. And then you also have to, if you take all that in and really do the math, you have to pay more back than you borrowed or that you took out if you factor it in. But the big key we try to tell people in this area is you're saving money for different goals. If you're planning your whole financial life properly, you shouldn't have to borrow from these things or take it out for something that is not that goal. And so it might be a bigger problem that we have to help you try to solve there so that you don't do this. Because if you are constantly doing this and going backwards, you're really not getting any closer to your goals.   The big example I have, and this is true life, happened right here in Des Moines, Iowa. I have an accounting and payroll client who we do the 401k advising for. A young kid, and he calls up a couple weeks ago and says, "I'm not making any money in my 401k. All my money does is go down. But yet the people that I work with," which is only about two or three others, "...they had a great year last year. Why is that?" So he pulled up his account and what he'd been doing is putting in like $200 a paycheck, and every two weeks, he'd take it out. So he actually withdrew everything out that he put in except for like a hundred dollars. And he wonders why last year in the market specifically most funds and everything else went up. He did not. And so it was a very simple conversation of you have to stop pulling money out of this. Why are you even putting it in if you got to pull it out?   Marc Killian: Yeah, he's sabotaging himself.   Tony Mauro: Yeah, sabotaging himself. So he's a laborer and he did not know that he was supposed to leave it in there. And I said, "Well, what do you think you're... Why are we even doing this?" And so I had him come in, had a long talk about finances and where he wanted to go and whatnot, and I think we've got him on the straight and narrow. But he actually just thought that this was a temporary savings and then he was to pull it out when he needed it. And so that kind of stuff goes on. I mean, everywhere. Not to that extent, but...   Marc Killian: Right, but it's how we get in our own way. And again, the point is these things can severely hold us back or even wreck our strategies. So we certainly don't want to do that. And it's always hard to pay ourselves back. I mean, it's bad enough this old adage about not borrowing money from or not loaning money to family, right? Because they know, "Well, you're family. I shouldn't have to pay you back." That kind of thing. Same kind of thing with yourself sometimes. "I shouldn't have to pay myself back."   But again, you're kind of paying future you back, or you're not paying future you back, I suppose, by not doing it. So, all right, good one there. That's certainly a good one to think about. All right, let's go to the next one here. And it's, "You'll only live once. Might as well spend it now." There's a bunch of people who can certainly, I can even identify with this somewhat, Tony. I mean, there's lots of times where you're thinking, what is the old saying, Tony?   There's not a Brinks truck following the hearse, right? On the way to the funeral or to the cemetery, so might as well enjoy it. And we want to enjoy it, but you got to be a little bit responsible. And this is the point of a strategy or a plan because it seems like people fall in two categories. They either have saved fantastically, they got a ton of stuff that they'll never be able to use, and then they're still afraid they can't use it so they don't enjoy their retirement. Or you got the ones who blow it a little too much and they're worried about not making it all the way through retirement. You got to find a happy ground in there somewhere.   Tony Mauro: Yeah, the keyword, you just mentioned it, is balance. And you have to balance everything there, which is why you want to have a plan in the first place. So I look at this one as this is the people that don't even start with the last topic we just discussed. They don't even save any money to even pull it out. They're just spending every dime.   Marc Killian: They're just big wheeling it. Okay.   Tony Mauro: Yeah. And I agree that, yes, we can't control when the end is for each one of us, and so I get it. And this is a great topic where if you get a plan in place and then learn to live without, you can have a little of both and still have some fun in life and have a great retirement towards the end. But you can't do that. You can't just live above your means and constantly not save. You'll never get to where you're going. And believe it or not, we have a lot of tax clients that they've gone all their lives and they're now in their late seventies, early eighties, and they've done this. And only now are they scratching their head saying, "Man, I probably messed up a little bit. I shouldn't have done all that and I did it incorrectly." And they don't have any more time. So for them, it is what it is and you got to take what you have. But especially the young, you got to get out of that habit.   Marc Killian: Gotcha. Well, talking about young, let's go to our next one here. "I'm too young to start saving for retirement." So that fits very well to what you were just saying. But man, I got a 27-year-old daughter, she's had a good career now in last three or four years, and I've been harping on her. You're in a great place. Put more away than you think you can while you can because you don't have any kids and things of that nature right now. That stuff's going to change. And so don't act like, "Well, I'm 27, I'm young, I'm having fun, blah." Great, but still. Put 15% away, man, don't be a dolt.   Tony Mauro: Yeah, I think it's never too young to start saving. Even if it's 10, 20 bucks a paycheck, get in the habit of saving.   Marc Killian: Heck yeah.   Tony Mauro: You can always add more as you make more. But as you said, life starts getting in the way. Kids start coming for the young people, marriage, all kinds of things, and-   Marc Killian: Of course, look at the cost of housing now, right? They're terrified they can't even afford to buy a house. So they feel like, "Well, how am I going to save for retirement when I'm trying to save for a house?" I get it. But to your point, God willing, future you is still standing down the road waiting, Tony. At some point, you're going to be 70 and you're going to really wish that younger you wouldn't have been a goober and not put anything away.   Tony Mauro: It's interesting too, you get with an advisor and start asking them, "Well, if I put away say a hundred dollars a month now and what I'll have at say age 70 versus if I start in five years from now, what will I have?" And let them show you what those differences are, and they are pretty large. So delaying is a bad tactic because it's going to cost you a lot more. You're just going to have to spend up, and we're going to talk about that in a second. You're going to have to save more later and it's going to be a lot more and it's going to be a lot more painful.   Marc Killian: Yeah, very true. And we don't want that, right? The painful part is what we're trying to avoid by hopefully-   Tony Mauro: Try to avoid that, yeah.   Marc Killian: ... building a nest egg early on. And again, to your point, and you can go do some crazy, you can go out there and look at some really cool interesting things. You can use some calculators. Just putting away 30 bucks a month starting at 18 or 20, what it can do by the time you're 65 is crazy. Some good stuff out there that you can certainly be doing even when you can't afford it. But especially if you are in your twenties and you are making a decent living and you can put a little extra away because you don't have some of those extra things going on and maybe it cuts back your partying or your going out or your whatever. It's worth it in the long run. Just a little bit here and there to do that so that you can kind of let that compounding interest really kick in over the next 35 or 40 years. So never too young.   All right, let's see, what else have we got here, Tony? Like you said, there's like a list of 50 of these we could go through. So let's do this one here. "I can make up for lost time." Okay, and here we go. So I didn't start young. I'm too young, so I'm not going to start. Well, you rolled yourself into number four here, which is, "I can make up for lost time by saving more later on." This is almost like the paying myself back conversation. Are you going to make up for lost time? If you spent 30 years not getting ready for retirement and then you went, "Oh, crap, I'm 55, I better get started." Yeah, it's never too late. I suppose we need to say that, and there's definitely ways you can do some things and there's catch up contributions and things that allow us to make up some ground, but maybe this is more of a willpower conversation, Tony. Are you going to actually put the effort in this time?   Tony Mauro: Yeah. Are you going to do that, put the effort in? And then if you're going to say that and we show you the numbers, now you're talking a lot of pain, because if you can have the willpower to do it, you are going to have to start saving a lot more. And then you are going to have to really make some tough decisions in your life as to whether I want to get to the end with a certain goal in mind, and do I want to give up that kind of money, not give up, but save that kind of money? Will my lifestyle afford that?   Marc Killian: Yeah, alter your lifestyle for a little while going into it. I mean, nobody wants to go backwards in their retirement lifestyle. From the ideal, I mean, ideally, Tony, when we're 50-plus, we're hopefully making the most money, right? This is all common sense stuff. We're hopefully making the most money we have in our professional careers. Hopefully the kids are out of the house, we're working our way towards the house being paid off. So yes, there are ways. And you are in a good spot to save more, but how badly have you damaged yourself by not doing any prep ahead of time? Some people it's a little, some people it's a lot. So you may have to truly decide, what am I cutting out to get this extra savings in? It may have to be more than you planned on, so just be prepared for that.   And I'm sure that you've seen people in various stages of this, right? I mean, and so many of us walk into a financial advisor's office for the first time and I think it's pretty overwhelming. I want to say it's like seven out of every 10 people or whatever feel like they walk in and they're already filled with dread because they're like, "I know I'm not in a good spot, I'm not in good shape." And oftentimes they're actually pretty pleasantly surprised to find out they're in better shape than they realize, which is good. Do you see that as well?   Tony Mauro: We do see that, and I think a lot of people think they're going to walk out of here and we're just going to beat them up over, "Well, you haven't done all this. You didn't start early enough, blah, blah, blah." But it really isn't about that. It really is, "Here's where you're at, and if you want to be here, here's what it takes to get there. How can we do that?" And at least you know, well, maybe my goal is too farfetched or maybe I'm better off than I thought I was and this isn't going to be too bad. And it's good to walk out having some sort of plan.   Marc Killian: It's a minor tweak, it's a major tweak. It's no tweaks. It could be anything.   Tony Mauro: Yeah, could be anything. And then try to work that plan and feel like you have somebody on your side helping you with that. And then if you do get off a little bit where you might be tempted to pull some money out of savings to take a vacation, we can be at least a sounding board. Obviously at the end of the day, it's your decision. It's always your money. But yeah.   Marc Killian: Okay. Well, speaking of advisors, let's wrap it up with this one, Tony. For a long time, and it's definitely gotten better, but here even in 2024, you'll still hear people go, "I don't earn enough or have enough," or whatever, "...to hire a financial advisor. I'm not rich." I think there used to be a stigma about, definitely was a stigma about financial advisors and certainly something like a trust where, "Well, that's only for the really wealthy." And that has changed so dramatically. I mean, so many people in various walks of life have financial professionals that help them out because it's a coach. It's like coaching to be better at golf or your baseball swing or whatever.   Tony Mauro: Yeah. And I like this one because when I hear that, I try to ask clients or potential clients, "Well, what have you heard? How do you think that we are paid and how much do you think we're paid?" Because it's, most advisors today are either fee only or asset-based, which is a form of a fee. And even if you start young and you don't have particularly a lot to get started with, most advisors are going to help you. The fees are not going to be as high as somebody that has a lot of money, but the complexity is not going to be there either.   Marc Killian: Sure. Well, you're talking stages of life, right? Because you may hear some people, you'll hear somebody say, "Well, this advisor only works with somebody who has a million dollars saved. And I don't have that, so I'm not rich," or whatever the case is. But again, you're talking about various different types of advisors or professionals out there and what stage are you at? So it's looking for the professional that's maybe helping you with climbing the mountain versus helping you with descending the mountain. You're going to be in both of those points, but find the right person to help you with where you're at currently, right?   Tony Mauro: That's it. And you want to ask the advisor, you want to know what they're getting paid just like you would any place else, whether you take your car somewhere or buy it, go buy a piece of clothing, you want to know what you're paying. And you also want to know what you're getting because I think that's the most important point because as long as the expectations are lined up and you find value there, then you're going to be in good shape. Now if you're going into an advisory relationship and you're just starting out and say you're going to start with an IRA and put five, $6,000 a year in it, you can't expect your advisor to meet with you 15 times a year and you're calling, bouncing stock ideas off them, because they just can't be profitable like that. But as long as they set up saying, "Here's what we're doing for you at this stage of life," and you're good with that and aligns with whatever you're paying them, it's a win-win.   Marc Killian: Yeah, okay. All right. And like I said, we've seen this financial lie or myth or whatever get better through the years where more people are certainly waking up to the idea that they can provide value. And even if you're a do-it-yourselfer, think about the fact that Vanguard, which is one of the cheapest options out there for do-it-yourselfers to use, Tony. They even publish fairly often their findings that advisors bring real value to the table, often in the area of behavioral management, just keeping us from being our own worst enemy. Back to that number one where we take money and do something incorrectly with it.   Tony Mauro: That's what we're getting paid for these days. And I say this, and this goes against a lot of advisors type of talk, but you really don't need an advisor to go pick investments. I mean, there's so much information out there.   Marc Killian: So much technology, yeah.   Tony Mauro: And what you need us for is what we just talked about and trying to keep you on plan and making sure you're trying to hit your goals. That's what you're paying for. And the investment part, even if you go do that part on your own and you're still paying an advisor just a fee, it's really that coaching slash consulting throughout the different stages of life.   Marc Killian: Yeah. And Tony, and don't sell yourself short too though. I think the downside, the down, I shouldn't say downside. The downward trek from the mountain, it's coming down off the mountain, which is retirement where we're now pulling money out. There's a lot of levers being moved at this point, and it's how these things all play together. It's a lot easier to build wealth than it is to preserve it and then distribute it throughout retirement. That's really where I think the rubber meets the road as well.   The behavioral thing is certainly there because when we get, because we're nervous, right? I don't want to be 80 and without any money, so I want to make sure I don't make any mistakes. And often we wind up making mistakes trying to not make mistakes because we get scared of whatever. So I think it's really both those pieces in my mind, the value you guys bring into the table is that how do all these pieces now play together in this thing called retirement along with the behavioral coaching to say, "Okay, now I get why you're nervous, but let's not do this or that or whatever without really thinking it through."   Tony Mauro: You're right. That's the favorite part that I like the most anyway, is once you do get to these goals, which is usually around retirement, is okay, now everything changes. Now we got to try to figure out how do we make this money last and so you can enjoy what you just spent a lifetime building. And you're right, there's a lot of different pieces then. And obviously people want to earn as much as they can on the money that they've got accumulated so that they can use this in the ways that they want. So that's where it becomes difficult.   Marc Killian: Well, and then the behavioral management comes in of don't risk pushing for big earnings and putting yourself in this vulnerable state where you can also lose a lot because you're taking on more risks than you really need to. Hey, the plan says you're good. We've built this plan and you can get by on or not even get by, but you can be successful on 6% return or, I'm just making up a number here. So why are you risking serious pain for 12%? Yeah, I get it. We all would love 12% year over year. It's not realistic, so why risk it?   Tony Mauro: No, I agree with that.   Marc Killian: Yeah, okay. All right, well there you go. And of course then there's the tax lever, right? So I'm going to wrap it up here. But basically when we're thinking about retirement, and Tony, obviously as a CPA and a CFP, you've got both sides of this going on in your head there. But when we're building wealth, it's a whole lot easier just kind of putting the stuff in there and blah, blah, blah. But when we're starting thinking about retirement, when you pull one lever about where you take money from and when, it affects three or four other levers. So tax efficiency becomes a big part of this conversation as well.   Tony Mauro: Big part of the conversation. Absolutely.   Marc Killian: Yeah. All right. Well, that's going to do it. So five lies we might tell ourselves about money. And of course, if you need some help, especially on that behavioral side, I've been kidding myself, or I've been leading myself around by the nose, maybe I should stop doing that. Well, reach out to Tony and his team if you've got questions, need some help. As always, before you take any action, check with a qualified professional like Tony. Again, he is a CPA and a CFP and EA of 30-plus years in the industry. So great resource for you to tap into. Subscribe to the podcast Plan with the Tax Man. You can find all the information you need at yourplanningpros.com. That's yourplanningpros.com. Tony, thanks for hanging out buddy.   Tony Mauro: Okay, we'll see you next time.   Marc Killian: I always appreciate you. We'll catch you a little bit later here on Plan with the Tax Man with Tony Mauro from Tax Doctor Inc.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.    

Very often, we see people who know that the financial decisions that they're making aren't the best decisions, but they try to create excuses or explanations for why they're doing what they're doing. Let's talk about why these excuses usually don't hold water.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc Killian  00:00 Very often we see people who know that the financial decisions that they're making aren't the best decisions, but they try to create excuses to explain why they do what they do. So let's talk about that this week. You're on playing with the tax man. Look up in the sky. It's a bird.   Announcer 2  00:17 It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:31 Hey, everybody, welcome into the podcast, Tony myself here to talk investing finance and retirement, Tony and myself and on the Why can't talk this week, to have a conversation about popular excuses for poor financial decision making. And really, Tony, I think I've just got like five basic questions here. Look, we are all really good at saying well, I did this because of that, right. And sometimes we know, it's a bunch of BS that we're just, we're just throwing some junk out there. Because we didn't think it through or we rush to a decision. And certainly that's part of life, it's part of being human. But when it comes to the financial stuff, especially as we're getting closer to retirement, you know, we really don't want to be making excuses for bad decisions, because we don't really have the time to fix these bad decisions. So let's maybe try to get it right the first time. Right. Okay. Yeah, no, I agree with that. It makes sense, right? I mean, it makes your job easier to write when we can get it right the first time because it makes it easier for you to build that plan for us, right.   Tony Mauro  01:27 So let's talk about a few places where we might get this wrong and make an excuse. And obviously, we're going to start with Social Security. Clearly, the whole turning and on at 62 thing, the excuse being, I want to get it back before it's gone, or whatever thing you want to grab on to, other than just saying, I truly need the money. That's why I'm turning it on. Okay, that's a valid reason, right? But just saying they owe me it's mind, whatever I'm turning it on, well, fine. But you could be costing yourself a ton of money if you do that. A ton of money. The other the other excuse it goes along with that, as you know, they're going broke. Right, right and apply. And, and I just had an email this morning from a tax client asking this very question. And his email went, you know, I, my wife is 67 or thinking about wait until 70. I've asked different people, they'll give me different answers. Of course they do. And they want to know about when they should take it. Now, most people at the younger ages, you know, they may want the money, that's a valid reason. And there's all kinds of things that go into it. But what I can say from a financial planning standpoint is, and we have this and we utilize this for our clients and your visor should have this is there's some sophisticated software that we can run and punch numbers in to show you basically, you know, here's what you're gonna get over your lifetime. If you take it at 60, to full retirement age 70, whatever you want, and show you how long it takes to break even because that's most of the time, what you're asking is, how long do I have to live, but to break even actually come out? Ahead? And there's a lot of factors and there's no wrong answer. But don't just rush to take it at 62. Because you think that, you know, you're gonna get the government, you know, you're gonna show them and listen   Marc Killian  03:14 to them, ya know, and you're thinking to yourself, if you do this wrong, right,   Tony Mauro  03:18 you're staying to yourself, because every year you you wait all the way up to the max, which is 70, they give you a little bit of an incentive to wait because they increase it by about 8%. And then people get confused. And they say, Well, yeah, but I didn't get it for eight years or five years, you know, and that's where we could show them with some software and make it very easy with some calculations. And obviously, we're going to show them in layman's terms, not not show them all this other stuff, right. But it's easy to show somebody you know, if you wait till this, here's your life, you know, based on your average life, yeah, how much you you actually could come out ahead, and then it's up to the course the client to decide, you know, there's there's a lot of factors that go into this. There's health, there's longevity in your family, things like that. And like you said, if you really need or want the money now, no one's gonna say you can't do it. It just might be a bad decision. Yeah,   Marc Killian  04:09 I mean, that's what the stress test is for. Right? So Security Maximization, right? You guys can go through that and and see where you, you know, where it stands, where what makes the most sense, right? What is your breakeven point? So don't just make that excuse, you know, get the answer and then make the decision. Number two, when someone's taking too much risk with their money, often we'll hear excuses like, well, I got behind, right, I'm making up for lost time, right, which is normal. We all feel that way. We feel like we didn't get enough save for retirement. But a lot of times, Tony, you'll hear this when somebody comes in for that initial consultation, and you're looking through their portfolio and you're kind of working on, you know, building something with them. And they're like, you're like, Oh, you're taking way more risk than you probably should be at this age. And they're like, Yeah, that's because I got behind. Well, that's the point of the evaluation is that maybe you're taking more risk and you don't actually have to maybe you're not as bad of shape as you thought you were. That's right.   Tony Mauro  04:58 And you know, it all comes down to trying to figure that out and backing into it from a good plan a good starting point because that's what their goals are and whatnot. And if they haven't defined that in at least sit down with them, and come up with those goals and what they're, you know, what they actually say their risk tolerance is compared to what they're doing. And I hear this all the time, we tried to tell them, Well, maybe we can get to these goals by you just saving a little more, because you know, the risk you're taking might be far too large. And risk is the risk, you know, if that risk does not pay off, you really going to be in a real bad spot, versus maybe we better back it down a little bit. Yeah, you might not get to where you need to be, but you're gonna have something. That's what we try to go over   Marc Killian  05:42 there. Yeah, great point, you know, so again, you want to make sure that, you know, if you're feeling behind, first find out if you truly are before you start swinging for the fences, right? Yeah. And then if you need to take your visor is going to say, okay, look, we are a little bit behind, here's some of that, here's a couple of strategies that we may need to do to get you to your goal, versus just, you know, willy nilly taking the risk, when you may not need to, or as much risk or more risk than you need to. So sitting on too much cash, right, they'll often explain it, well, you know, I don't want to lose it, like I lost in less than the market went down. Now, I realize that that's changed a little bit these past couple of years with cash, finally paying a little something. But if you're still being pretty hesitant to be in the market, for your long term monies, you're doing yourself a disservice. Because ultimately, even the cash that we're getting right now, 20, which is better, still doesn't keep up with inflation. So you've got to have some growth monies,   Tony Mauro  06:35 you got to have some some growth monies. And this is where a good plan comes into place. Because hopefully, you know, you can be diversified. Yes, you can keep some additional monies in cash, especially these days, because it's it is better than it's been, but long term wise, it's not going to get you to your growth goals, especially if you're a little younger. I mean, it's a little different for retirees. But, you know, at the same time, most of the time, we'll we'll ask them, Well, if you lost all your money, you know, the quote, last time, what were you actually doing? Were you trying to do all this yourself and took too much risk, which we just were talking about, and you had a bad, you know, short term fluctuation in the market, you panicked and sold everything, you know, so we try to get them off of that, you know, trying to time the market and not worry so much about that, and, and base it off? what their plan is?   Marc Killian  07:26 Yeah, definitely. Right. And, you know, I get it, I get having that feeling of, Oh, I feel better seeing X amount of dollars in the bank, or whatever the case is. But again, basic conversation is that you're losing money safely. Even though if even if you are getting four or 5%, which is you know, what we can kind of see right now, it's still not truly keeping up with what we know, inflation, real inflation to be not just those CPI numbers. Okay, number four, when someone has no idea what they're invested in, or what their money is even doing for them? Well, the excuse sometimes is, I don't know, I just I pick this or I did that or, but it's not my thing. So just it's look good. You know, whatever excuse you want to kind of pick, you've got to understand what it is you have and why you have it. Even if it's not your thing, you need a basic understanding of that. And I think a good advisor is going to help you explain that to you. Why they're recommending what they've recommended, and what it's doing for you.   Tony Mauro  08:18 That's exactly it. I mean, it this is my favorite, especially when people come in and they've have money in their 401k different investments, they have no idea what it is in or even what it's done. Yeah. And that, just like you said, that is where it just like we talked about on the last episode, a financial advisor that you're paying a fee to, is going to be able to help you.   Marc Killian  08:41 Well think about like because this is our thing. Yeah, I think about like this, you know, how many people get in, get into a stock? Because they hear it's cool, or because the dad loved it. You know, whatever, right? Like dad had coke, I want coke. That's not an endorsement for Coke, by the way, folks. You know, Coca Cola. Okay, I'll clarify. But you gotta meet like, or GM or whatever, right? You know what Dad always drove Chevy. So I love GM, you know, stock or something like that. That's fine. But is it really like, is it beneficial in your overall strategy? There's, I guess there's nothing wrong with having some favorites. But whenever you're sitting down to craft a plan with your advisor, let them know that there's some personal attachment to that, but also be open to hearing the fact that maybe you shouldn't have this percentage in just that thing, right? Because it's not helping you or whatever the cases. Yeah, I mean, and we have clients that did want certain types of investments for sentimental reasons. Wrong, like you say, right. But it's, it's just part of the overall plan. But if you're just kind of out there, willy nilly and say, Well, I've   Tony Mauro  09:44 got this I've got that because of this or you know, your quote, excuse that may not be or have anything to do with getting you to where you need to be Yeah, with your goals and in your plan. Yeah. And so that needs to be looked at and again, that's, that's where it ends. lasers gonna hold   Marc Killian  10:00 true if sometimes we'll hear stuff like, Well, that went to three means I went to three different companies bought three different mutual funds. So therefore I'm I'm diversified because I don't really understand this, but I figured that God has me covered, right? So I've covered myself by buying three different funds from three different companies and somehow thinking that you're diversified. And oftentimes you're not you've really bought three mutual funds with the same junk in them. Same, you know, the same holdings? Yeah, absolutely. Exactly. So, all right, last one, Tony, if you're working with a professional and advisor, broker, whatever, and you're not sure that you want to move on, but you kind of feel like you should. First of all, if you're already asking yourself that question, if you're already saying, Maybe I need to be looking for more out of my advisory relationship, then something's clearly bugging you, right? And you need to get to the bottom of that with the current one. But if you're not willing to walk away, just because the you know, you've had a good relationship, or it's been a long relationship, the excuse sometimes is I just don't want to be hurtful, or they've always done me right, or whatever the case is. And I make this joke often, Tony, but that's like saying, Well, I keep going to my pediatrician, even though I'm 60 years old, just because he's a good guy, or a good gal. Well, they're not the right doctor for you anymore. They work with kids. I mean, so you need to see a doctor who's, you know, helping older folks and things of that nature that specializes in that. And I think the same thing applies with what you guys do, whether it's a specialty thing, or if it's just, you're not getting out of the relationship, what you should be, at this time of your life. Don't be afraid to, you know, look around for a new one.   Tony Mauro  11:30 Yeah. And I think, you know, if you're asking yourself that question, just like you were mentioning, something is bothering you, I think what you need to do is, first of all, figure out what that is, there's some part of the of the value proposition that you're not getting as a client, and that you maybe think you should, first thing you probably should do if you really want to want to bug out in the open is talk to the adviser about it, and just tell him or her that, hey, I think I should be doing this it. Is this fit in what you do and how we're doing it. And if not, don't be afraid to say, well, you know, I think I need that. And I may want to go to somebody else. That's that's the first thing. Because obviously, it's not going to get better unless something has its address. Yep. Communication or something. I had a client like that. And he came over and as a relationship developed, really, I found that he did not want he did not want to do financial planning. All of a sudden, you know, he came in Oh, yeah. Oh, that's great, blah, blah, blah. But really, all he wanted to do was he was a he was a TV watcher, and he constantly wanted us to find equities for him that outperformed the s&p. And we just finally said, You know what, we can't do that. I can admit it. You know, I'm not a stock picker. I'm   Marc Killian  12:48 a planner. Right. Right. And if, if you're not a day trader, you know, you're not a day trader, or a broker. Yeah, no.   Tony Mauro  12:54 Yeah. You know, I, it's just not where I want to be and tried several times to get him and his wife together to, you know, to lead the plan didn't have any interest in that. Finally, I told him, I said, you know, what, I can't be a value to you, you need to go either. Do what you want to do on your own and find another advisor, because I so I kind of actually severed the relationship, because I said, I, I'm, as a fiduciary, we talked about that a little bit earlier, I can't provide you any value. I, you're, you're paying me a fee. And I can't give you what you want.   Marc Killian  13:26 Right? So no, and that's great, right? I mean, you've got to have the right relationship for what it is that you're looking for, and being able to receive, right. So even if you are older, and you know, you need a financial advisor who specializes in retirement or, you know, building those kinds of strategies, but you're not willing to receive that information, and or work the plan that you guys create together, then you're just wasting everybody's time and money, right. So money. Yeah. So you know, it's good to have an advisor that can give you look, we all want to have our handheld from time to time, but you also need that person that says, that gives it to you straight, like I changed my cardiologist, you know, after having heart surgery, because the other guy I had, well, we'll find doctor, his delivery style didn't work for me told me I didn't, you know, like, it wasn't communicating well for me to do the things I needed to do for my, you know, for my recovery. So I switched to a different cardiologist, and this guy got tired of my junk, and he started getting in my face. And it worked. Because that's what I needed, right? I needed someone to be a little bit more stern with me. You'd think that you would need someone to be starting with you and dealing with a heart situation, but I did and so therefore I had to find the right doctor. Same thing, right, same exact thing. Same thing.   Tony Mauro  14:41 Absolutely. And there's you know, obviously everybody knows there's a lot of advisors out there you got to find somebody that is going to be your style so to speak. Yep. And because otherwise relationship you know, it's like any other relationship just like you were saying doesn't work doesn't   Marc Killian  14:56 work starts to fizzle, you dread going you don't really fall go through with things, whatever. Right? So those are some things to think about folks, you know, on a conversation this week, don't make excuses for yourself. We all you know, we're humans, we can do it pretty darn easily. But when it comes to your finances, try to try to eliminate those so you can get it right the first time and have that happy in enjoyable retirement future that we all want. And if you need some help with that, you need to find the right person for you. Well sit down for a consultation with Tony and his team and see if they are the right fit for you at your planning proz.com That's your planning proz.com Tony has been doing this for 30 plus years a great resource for you to tap into. He's a CPA, a CFP, and n e AE. And again a great resource for you to reach out to at your planning proz.com Don't forget to subscribe to the podcast so you can catch future episodes as well as past episodes. And Tony, my friend. Thank you for hanging out. All right, we'll   Tony Mauro  15:48 see you on the next episode. Yes, sir. We'll   Marc Killian  15:50 catch you next time here on plan with the tax man with Tony Morrow.   Walter Storholt  15:59 Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional  

Uncover the critical mistakes many make when choosing a financial advisor. We're cutting through the noise to highlight what often goes wrong—from misplaced trust in big names to overlooking the fine print. This episode is your essential guide to avoiding those pitfalls and making informed decisions that align with your financial goals   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian  00:01 On this edition of the podcast, we're going to uncover some critical mistakes many make when choosing a financial advisor, we'll try to cut through the noise and figure out where we go wrong when it comes to finding the right financial advisor here on plan with the tax man. Look up in the sky. It's a bird.   Announcer 2  00:18 It's a plane. No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:33 Hey, everybody, welcome to the podcast, Tony and myself here to talk investing financial retirement, and mistakes made when choosing a financial advisor is the topic of conversation. See if we can go through a couple of things here I got a I got a pretty long list. But we'll do at least a few of these, Tony and see how we can highlight some stuff for folks, how you doing?   Tony Mauro  00:51 And well, how   Marc Killian  00:52 about you hanging in there looking forward to a good conversation with you, as always, in getting ourselves into the groove with our podcast here, everything's going well for you.   Tony Mauro  01:03 It's going good, you know, tax season is as we're recording this now behind us, we have a few clients that we still they still owe us some information to get those done. But everybody is kind of taken care of and course around here now that the sun is shining a little bit everybody's getting outside more so like everybody's always a little happier. You don't want to come around. I'll   Marc Killian  01:26 tell you what, my neck of the woods, it's rained for like six days straight and about over it. Yeah, ready for some sunshine, we had a lot of sunshine for it. So I guess can't complain too much. But let's get into our topic today. Here. I've got a bunch of these, like I said, I don't know, we could easily turn this into a two parter. We'll see how it goes. But let's let's get started. See if we can run through some mistakes that people make when choosing a financial advisor. First and foremost, not understanding how the advisor gets paid. Look, this doesn't have to be a taboo thing, right? I mean, you guys don't work for free. But certainly as the client or potential client, it's okay for us to ask and understand how do you get paid? That's   Tony Mauro  02:01 right. And I think you do have to ask that to, you know, have your advisor. And you know, when you're choosing advisors, they should be able to tell you exactly how they're how they're doing that right. commission based fee based what right? Yeah, and you know, it's a little it's in yet you, what you need to do is maybe take a step further and ask for an explanation, if you don't understand most advisors today are either that they're either commission fee based or asset based, you know, and what we try to do is stay away from the commission based, you know, if at all possible, and what we do is we go kind of go over it and writing with our clients, you know, here's the way we get paid. And they have a choice, basically, at least with us, is they can just pay us a financial planning fee, just like they would if I put on my accountant hat and pay for that. Or they can and then go take and then invest and manage the assets themselves. Or like a lot of advisors, they call it an asset based fee, it's usually between a half and 1%. And what that is, is, you know, based on the amount you have invested, say it's $10,000, the advisor then makes you know, a half to 1% of that as his or her fee for, you know, helping you with your plan. And then you know, so you both grow together, but it's not based on any types of commissions or anything like that. Gotcha, gotcha, key, yeah, it's just really get it out in front of you. And, and then make sure you understand it, and ask a lot of questions.   Marc Killian  03:31 Exactly. And there's, people get a little weird sometimes when asking about that part of things, which I don't nearly understand in the financial services world, but it does happen. You go to you go to your mechanic, you ask him how much they're gonna charge you to fix the car, right? So I don't understand, sometimes you will get a little bit, you know, trepidatious around dealing with the how do you get paid question when it comes to financial advisors, but certainly nothing wrong with it, they expect it. So don't make that mistake, folks, and just talk it through and make sure that it's the right type of fee structure for you. Alright, number two, what about putting too much trust in big name brands, Tony, like, you know, I think the with the way it works now, with so many independent financial advisors, like yourself all across the country, you know, it doesn't necessarily mean because you're working with this person's smaller practice, that they can't do the same things that a big national brand can do, especially when a lot of times, you know, you guys are middle of people are going through fidelity or or whoever as the backing? Is it make a difference? does is it needed any more to go with the big name brand?   Tony Mauro  04:29 Short answer? No, I would say, right, well make it easy, you know, and that not to knock the big, big houses and things like that. They certainly have a name and brand recognition and things like that. But these days, you know, every financial adviser has access to depending on on how they're licensed and whatnot, how access to pretty much every types of of investment, you know, whether it be stocks, bonds, mutual funds, all the way across the board. And so what it really comes down to in my mind is the relationship Forget about names, and make sure you have a good relationship. You understand what this advisor is going to do from you, regardless of where you're at, you know, I think the, you know, in the old days, you know, when everybody was you watch the movies and whatnot, and you see those big wire houses and things, peddling individual investments and things like that. It's not like that anymore. You know, it's about the planning and whatnot. But I don't think it's, you know, it's putting too much trust in or maybe even lack thereof of I don't think in any of us are a better option than the other just because of a name, I guess.   Marc Killian  05:38 Yeah. And I like that, too. It's about the relationship. Right? You know, you can certainly go to one of the big name places, but they also do have sometimes agendas, right. So they may have quotas that they're asking of their, their franchises across the nation, or whatever. And so sometimes you look like a, you know, a nail, because they, they've been given a hammer to use, right. So you want to make sure that you're having those conversations as well. And, you know, when you're talking about making mistakes here, as the end user, as the client, if you're sitting there meeting with an advisor, you're going through the the initial consultation period to find out if it's the right fit, don't just sit nod your head and smile. If you don't truly understand something, don't be afraid to look like you don't understand, right? There's nothing wrong with that. That's why you went to see them and to begin with, because this is not your forte. So ask clarifying questions, right? You do, you   Tony Mauro  06:25 got to ask a lot of questions. And it's any advisor that is comfortable in what they're doing. We're not afraid to answer questions, because like you said, that's what you're paying us for. Otherwise, you go out, and you certainly can do these days on your own. And   Marc Killian  06:39 you know, and it's only if the advisor is, is is over talking right? Maybe over explaining or using, you know, terminology that you're not used to, you know, a that's part of the feeling out process, okay, maybe you decided that this person is not going to be the right fit for you during that consultation period, because they're not explaining it to you in a way you can understand. But they also might just be give them the benefit of the doubt that they might just be so used to talking in that way that they need you to kind of say, Hey, I'm not quite fall on you. Can you explain that more? And I think an advisor worth their salt is going to be absolutely no, no problem. Absolutely. Let me back that down and talk to you about it. Right. Absolutely. And I think that's something that we got to be comfortable with as the end user that, you know, that's why the that's why all advisors that I know really do offer that consultation, and conversation that thing complimentary, because it's like, it's a feeling out process. Does my communication style work for you? Does it work? You know, do you receive it? Well, actually, I'll just go to that one. Next on my list, covering expectations and the communication style. Tony, I'll jump around on here. Yeah, I think that's a great one too, right? Because if you meet with someone, you say, okay, hey, what are the expectations for us getting together? How often are we doing this, right? So that you don't feel like later on? Well, my, my guy or gal never calls me that kind of thing.   Tony Mauro  07:52 Exactly. And any advisor that is worthwhile, in my opinion, is going to lay this out, even in the initial consultation, it's what we do, we basically go over, you know, here's what you can expect of us. And here's how we like to communicate. And it's not just, you know, in generalities, we say, we're going to meet this many times a year, right. And if you prefer communications in person, that's what they will do them, if you want zoom calls, we'll do them that way, or even phone calls. But we are going to set up an agenda. And here's what we do all the way through the plan and then monitoring the plan. So they understand what they're getting. Because obviously, we're here to provide value. And if we can't show that we're providing that value, for the fee that they're paying, you know, obviously, they're not going to be real comfortable with that. But in that respect, also, you have to understand too, as as a client, that if you, you know, obviously, advisors are like everybody else, the more work you do, the more you expect to be paid. And so it's different, because you're talking about, you know, clients that their advisor never calls them, well, there could be a reason for that. Because, you know, if you're a client, let's say, and you're putting, for example, by $1,000 $6,000, into a Roth IRA every year, which is great, you should have the expectation that your advisor should at least be meeting with you, I would say annually, maybe a little more. But if you're calling that advisor expecting a meeting every month, they may tell you and they should upfront we do is that that's that's not this relationship, because of the fact that we meet that many times if there's no way that the advisor can be profitable. And I think that's where some of this, you know, voodoo and nobody wants to disclose fees, because there's that disconnect between the value given and the fee earned. And if you're upfront with clients, you know, and they understand that upfront, I think it just sets the tone for a much better relationship. You take the same investor that has say $2 million and a complex situation. Well, they well not only is the advisor going to make more Yes, but they probably need more meetings. But some people, we get it a lot, you know, where it's the young person wants to come in, and they want to talk about stocks. And every time they see us, you know, something on TV, they want to call on talk about it. Well, you know, the advisor might say, Well, wait a minute, you know, that's great and all but, you know, we can't really write to add value with that. And, you know, time is of the essence all the time. And so, the more we're upfront with people with that, I think, the better the relationship is,   Marc Killian  10:32 and to me, that sounds like maybe a bit more of a broker type relationship than looking for a financial advisor, financial advisor, really helping you kind of build, you know, your, your wealth, not only building the wealth, but also obviously, the preservation side of it, which actually really walks me into this next piece, which is picking someone with the wrong specialty. So part of that communication issue could be the fact that you know, you're younger, and you don't need a financial advisor per se, that specializes in retirement or whatever, you need someone who specializes in just wealth accumulation. Or maybe you just need a broker. But if you're over 50, you probably don't want a broker anymore, you want someone who's going to be talking to you about the other piece is like Social Security and like legacy, and so on and so forth.   Tony Mauro  11:16 Yeah. And it lends itself to even if you are a young client, it may start out fairly simple, you know, with a Roth IRA. And that's true, as you you know, as you grow, and as you get older, then it morphs into a different type of relationship more like you say, on the, on the planning side. And I think, you know, there are, it's a question to ask an advisor in the initial consultation is, you know, who basically, do you work with most of that time?   Marc Killian  11:44 Yeah, that's where I was gonna go, I was gonna say, Tony, ever, everybody's different. And you being also having the tax practice of the CPA and stuff, I imagine, there's, there's two types of clients that you guys have that might be good on that front, but they're really not the they're not in the right spot, or they don't need to pay you for the financial side of things yet, because it's just not where they're at right? Now.   Tony Mauro  12:03 It's not where they're at in their life. And we get it a lot of times with the young tax clients that they, they want to they want to bounce ideas off of us, you know, and they're just, they want to say, you know, I want to go out and buy some stocks, I want you to tell me what you think, right? Well, you really don't need us for that there's so much information out there, we have access to pretty much the same information you do. That probably is not a good fit for us. But right, maybe it is for somebody else.   Marc Killian  12:28 Exactly. Yep. Yeah. So there's nothing wrong with specialty, right? You don't go to the PD pediatrician anymore when you're 50. Right. Lily, yeah, you could you go to a different kind of doctor. Right. So same kind of thing, financially speaking. You know, how important is it to check their credentials? You know, it kind of ties back into the speciality, maybe, right, making sure. Are they a fiduciary? Is that what you need? Right? Do you need someone who's insurance only? Or need someone who can do both sides? Right, both, you know, equities and insurance products and things of that nature?   Tony Mauro  13:01 I think so I think it's important that you have an advisor that can do all of that. I mean, it's not necessary, but it's easier as a client. I think, the fiduciary it's been a big term in the financial planning circles. Now. I think it's important. I mean, this is just my opinion. Of course, I'm biased, because you know, I have to be held to that as you are one. Yeah. Because I am one in you really, all that means is that, you know, we're supposed to put the client interest before our own meaning that we should not be biased, as to the fact that well, we will, we're going to do this for you, Mr. Mrs. Client, because we earn more money on that, right. That's where we're, we're advisors whether or not telling people because it it, you know, it might look bad, right?   Marc Killian  13:46 Well, so Tony, think about this way, tell me if I'm wrong here. So like, if you're not a fiduciary, if your suitability only right, and you have three options to put client a into, and of those three options, you get a bigger perk as the as the person handling it as the suitability advisor, by putting him in option C, you get a bigger perk, or maybe even a trip or something like that, you can do that. Because technically, it's still a suitable investment for the end for the client a, but you also get to kind of reap the benefit on picking the better one, whereas the fiduciary, that's not the case, you have to tell client a the absolute, you know, this is the reason why this is the one you must be using, regardless of what how it benefits you, correct? That's correct.   Tony Mauro  14:29 I mean, that's it in a nutshell, and which is why most advisors now are leaning towards, you know, fee only or asset based fee, because then it takes all that off the table. You know, it's just we're making the same no matter what we do. We're more interested in making sure you have a full plan, right? And we're, you know, you're getting to your goals. Now. There's a couple of things out in the investment world, though that still aren't like that. And one of them is Insurance insurance. There's a few products out there where It's, you know, it's a flat fee, but most of the companies are going to pay Whoever sells you that policy, some sort of commission. And we disclose that right up front, we tell them what we're making. And it's a one time deal. But you shouldn't be even asking on those types of products, because it does lend itself to, you know, even with somebody with a fiduciary duty, you know, maybe they're not following their fiduciary duty, which they're gonna get themselves in real trouble if they don't Great point. But, you know, it lends itself to well, I'll do this for the client because of that, like, incentive, you know, yeah,   Marc Killian  15:34 that's a great point, for sure. Well, let me finish it off with this last one here, Tony, which I think maybe is something we wouldn't be thinking about normally, but it might be worth asking, when looking for a new advisor or looking for a financial advisor. You know, typically, the industry is starting to get younger, as far as the advisors out there, they're starting to get younger and which is good. Because it has been an industry where primarily, it was definitely ran, you know, it was older folks, right? You know, advisor has been around a long time, not young and Spry, like yourself, right? But it's it's worthwhile question to say, Hey, what is your succession plan? Because if you do meet with an advisor, and you do like them, and maybe they are a little older, right? What's their plan for stepping away from their own practice? Do they have someone that's going to be taking over? Do they have Junior advisors or people that you know that it's going to continue to serve you? Should that person retire? Nothing wrong with that question?   Tony Mauro  16:23 No, absolutely not. I think it's one of the most important because you're exactly right, is if you know, you and a lot of us advisors, especially when you go out into the smaller towns around America, it's just them. And yeah, you know, as they do age, you want to ask that, because like you said, if that something happens to them, you know, inadvertently or they just want to retire, it's gonna be a lot easier if you can stay in that firm, at least until you feel like you know, you want to move if the relationship isn't the same. Rather than getting, you know, no advice, no help, kind of not knowing who to call, things like that. So I think every advisor should be able to explain their succession plan to you. We I have one in place for myself, I have one Junior advisor, and I have two support staff. And if something happened to them that I have a backup, she has an outside adviser, a friend of mine in town, yep, that could handle these these clients, if something happens to me, because yeah, you don't know. And most advisors, you know, like you say they are at least 40 Plus ish. A lot of us are in our 50s. And even even, you know, there's   Marc Killian  17:33 there's a lot older a lot. Yeah, a lot in their 60s as well, and even even some 70s. So, I mean, you've been doing this 30 years, Tony, I mean, you're you know, you're in your 50s like I am, but you've been doing this a long time, you know, you're a CPA and a CFP and an EA, but it's still important to have to ask that question, right? You know, even if they're even if you're the advisor you found is 30 years old, you still want to ask because I mean, life, you know, a bust can come out of nowhere for anybody. Yes. Right?   Tony Mauro  17:58 It is yeah. And even at 30, you know, something could happen. And again, you could be left with nothing. So I think the team approach works better. I think to it, it's weird. Now that I am in my 50s, the old the older, my retiree clients look at me as young and you know, oh, yeah, you're gonna be in the business forever. The young people look at me, like, they'll ask that question. It's like, well, gosh, you know, you you're a little old. And we want to know, you know, when when you kick the bucket or whatever, who's gonna help us? And so it just depends on where you're at. But it is a great question. And I think it should be asked every advisor   Marc Killian  18:34 All right, well, there you go. So there was some mistakes that you might make when choosing a financial advisor. But again, the consultations and conversations are just about everybody I know. They're always complimentary. And that's the feeling out process to ask them questions, get your questions asked and answered not only about your own situation, but about how it's going, your interaction with them is going to go very, very important stuff. So make sure that you you know, think about that when you sit down and talk with someone. And of course, if you're already working with Tony Williams, you don't have to worry about that because you're already working with him. But if you're not considering doing so, make sure you reach out and have a conversation get onto the calendar at your planning proz.com That's your planning proz.com Let him know you'd like to have a conversation and a consultation about your retirement journey. Tony, thanks for hanging out with me, my friend. Always appreciate you. Alright, we'll   Tony Mauro  19:19 see you on the next one yet.   Marc Killian  19:20 We'll see on the next one. And don't forget to subscribe to us playing with the tax man on Apple, Spotify or YouTube platforms. You can just type it into the search box of those apps or just go to Tony's website you're planning proz.com.   Announcer 1  19:36 Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional

Just like an annual checkup is important for maintaining good health, performing regular financial checkups is an essential part of planning for a healthy and successful retirement. By regularly assessing your budget, goals, and progress, you can make informed decisions to keep your finances on track. Although financial wellness is going to look different for everyone, we'll share some areas you should be paying attention to in today's episode.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian: Just like an annual checkup is important for maintaining good health, performing regular financial checkups is essential part of the planning process for successful retirement health. So on this podcast of Plan With the Tax Man, Tony and I are going to talk about your financial wellness checkup. Hey everybody, welcome into the podcast this week as Tony Mauro and myself talk about getting our finances, getting a little checkup, getting a little tuneup if you will, some things to think about to make sure that stuff is working the way it should because financial wellness is going to look different for everybody. We want to highlight a few areas where maybe we all should pay attention to various things on this week's episode. So what's going on, Tony? How you doing, my friend? Tony Mauro: I'm doing well. Spring is here, and so I can't wait to talk about this because everybody wants to be outside here pretty quick. And I think besides having physical checkups, depending on where you're at, I think the financial checkup is always well in order. Marc Killian: Oh, yeah. Tony Mauro: So it's a good topic. Marc Killian: Definitely. I mean, you think about reviews that you do with your advisors or you do with your clients, it's kind of the same kind of thing. But we'll kind of tie it into the medical analogy just for fun as well. But first and foremost, let's say you're trying to lose weight or you're trying to get healthy. So many of us are. You want to review your goals, so you want to discuss the importance of whatever your retirement goals are with your financial professional so that you guys can be on the same page. Tony Mauro: Exactly. And really every piece of this whole presentation we're going to talk about today is in essence, when we dig deep into it, it's the financial plan itself. We're only going to touch on a few topics and lightly, but one of the things we do with every client that wants to be a client of ours is we go through a plan with them. Now a lot of them say, "Well, I don't really want that. I just need this." And I tell them, "You don't go to your doctor and just say, 'Well, I just need this, or this ailment.' I mean, they check you out. They ask you questions. They want to know what's wrong with you before they can diagnose something." And that's exactly what we're trying to do. But the very first thing is trying to figure out what do you want? What are your goals? Because that's where we have to start and then see where everything else fits. Because without that, the whole thing really is useless. So we start there in our plan, and we're going to go through some other steps here too, but it's so important because we go back to that at every meeting and visit that because goals change. And so we have to adjust our plan. Marc Killian: Yeah. So I mean, you got the outline if you will, which is the retirement goals and what you want to do and so on and so forth. But then you kind of dive into a little bit like you're going to check those vital signs, if you will, which typically is going to be the income and the outgoing, what's coming in, what's going out. Tony Mauro: Right. So once you know the goals, then we have to start working on the how do we get there? And much of it is dependent upon how much you're bringing in, how much you're spending. Maybe you have trouble spending maybe a little too much. We have to rein that in a little bit. Otherwise, these goals are never going to be met. And so we work with them on trying to get them to track their expenses and their income and making sure that they have a little bit of money left at the end of each month. Living below their means is really what it comes down to because it doesn't matter how much you make if you're spending $1 more, then you're really not building any wealth. So that's second. Marc Killian: Right, yeah. Because you've got to make sure that you're keeping track of that. I know nobody likes the B word, but again, you've got to have an understanding of what's coming in and what's going out just so that you can make sure that you're staying within the grounds of the goals that you're trying to accomplish. You don't want to overspend, but you also don't want to not enjoy yourself and take advantage of the stuff that you've done. And other little things. I mean, I don't know, is it worthwhile to check your credit score often, Tony, or is there other little things to do in this kind of wellness checkup area? Tony Mauro: I would check your credit score once a year-ish I mean, at minimum. Some people I think maybe get a little too overboard with that, but I tend to tell them, "Check your credit score once a year." I tell them to monitor that. I also tell them to pull when we get in to start talking about financial planning, is to pull their Social Security statement from the administration once a year. It's free. May take a look at it, see what your projected benefit is, and making sure that all your money or all your earnings have been credited and things like that. Just little things that should be on the calendar once a year when we're going through this exercise that you do. Marc Killian: Yeah, for sure. The next piece here, so you got to build some financial immunity. So we're talking to keeping this health analogy, got to build up your tolerance, your immunity system, your immune system, if you will. And this is probably going to be in the form of having some liquidity, yeah? Tony Mauro: It is. And one of the things in the plans that we designed, and we're pretty adamant about this, we're pretty easy going on most things, but I'm pretty adamant that if you're going to work with us, we have to at least have you start what they call an emergency fund, we've talked about it before, to make sure that you are ready for the unexpected. I mean, it could be an emergency. It could be your car completely dies, whatever that emergency is. You lose your job is the biggest one. And then making sure that you're ... even if we only are doing $50 a month, putting something into that emergency fund until we get it to a certain level. Because if you don't, it's a recipe for disaster. It derails everything we're talking about. If you've got all of a sudden shift and allow one minor mishap in life, ruin everything. And so that's what we want to do there. Marc Killian: Well, so we're talking determining the appropriate size of the emergency fund. Maybe automate some savings to help get you there. That could be another way to do it. And then of course, just to your point, replenish it as take stuff out as situations come up that you access it. And taking a cruise at the last minute, pulling it from the emergency fund is not really an emergency. That's stuff you should- Tony Mauro: That's not an emergency. Marc Killian: That's stuff you should be planning for, right? Tony Mauro: Yeah, you should have a vacation fund for that. Marc Killian: Right, right, in fact. Tony Mauro: So we get into some of these funds and different things so that you can start allocating money for things that you want to do. Absolutely. Marc Killian: Okay. Well, let's give our portfolio a good screening here, doc, if you will, so make sure that the investments are doing what they're supposed to be doing. Tony Mauro: They are. We take people through. We ask them to bring us everything that they have in terms of statements. Let's see where you're at now and see how you're invested because we've got to make sure after we kind of know a little bit about your risk tolerance, about how you're diversified and your goals is what you're doing now, what you have, is it going to get you there or not? Or maybe you just took something off the TV and it sounded good and maybe it's too aggressive for you or something like that. This is probably where the rubber meets the road is. Obviously we're trying to get you to save some money, but then we have to make it earn as much as you're comfortable with. And that's the investment strategy. Marc Killian: Exactly. You got to make sure that that strategy is going to fit the risk level that you're comfortable with and all those pieces that we've talked about a bunch of times. But if you're talking about just keeping this and this fun little analogy here, you got to have that screening, that review of the portfolio to make sure that you're adjusting it along the way. And then you might want to take a look at diagnosing the debt that you've got clearly. So if we're thinking about debt, obviously there's these schools of thought of don't have any, it's okay to have some, blah, blah, blah, blah, blah. Right? Tony Mauro: It is. And debt is the biggest thing that stands in people's way because most people have what I consider too much. I'm kind of in the camp of let's try to work towards eliminating all your debt eventually, not living real skinny to do it and not having any fun, but let's work that into the plan to make sure that we can get the highest debt paid down. Then other things and maybe the car and then maybe even the home. Because once you do that and you're debt free, I mean you could really free up a lot of cash flow. Hopefully you can either save or have some fun with along the way. That's a big issue in the plan. Marc Killian: Yeah, I mean, are you making progress and getting those debts paid off or are you not? Are you kind of trying to avoid some things? Have you explored other consolidation strategies if that's on the docket? Have you talked with an advisor and said, "Okay, here's what I got. Can you help me? Or if not, point me in the direction of someone that maybe can help me." Because obviously debt can be a huge piece to this whole equation. So make sure that you're absolutely diagnosing that for sure. Preventative measures. So now we're talking about getting a little more proactive. If we're kind of moving through this as stages, you got to discuss the proactive, you got to discuss the future stuff. It's not all just about what do I have today and what am I doing? It's also what's this going to look like through the next number of years, 10, 15, 20, and the various pieces that come with that. Tony Mauro: Yeah. And some of the most important pieces of that looking towards the future, and you can kind of guess what these are. It's the rising cost of healthcare. Where will taxes be in 15 years? I mean, right now we don't seem to be paying our bills as a nation. Taxes I would say could be up. And then of course you've got the infamous we're all living a lot longer and you potentially could need some care toward the end of life, long-term care, assisted living, things like that. So are you factoring these into the overall plan and just as contingencies, especially healthcare and long-term care? I mean, you can say what you want about taxes. I always say that I think they're going up and somehow I'm wrong completely because they keep going down, but I don't know how they can keep doing this. But I guess what we're trying to do in this stage of the plan for us is we're planning for the worst. And then if that doesn't happen, then we're well protected in our plan. Marc Killian: Right. I mean, because you've got to have the conversations about potentially healthcare expenses in the future. They're obviously going to go up. What's the plan and the long-term financial impacts of that? And clearly obviously Tony, what you do with what taxes. I mean, it's the end of April here, so hopefully you're all done with the tax season. You can have some stragglers here and there, but tax efficiency, man, I mean that can really make or break it. Tony Mauro: It can. Tax efficiency is backing up to the investment strategy really is where we fit in, trying to make sure that your portfolio is as tax-efficient as possible. A lot of people don't really take that into account and they think, "Ah, that's not really real." It really is real once you start showing people what the tax effect on some things are. Marc Killian: Yeah, I mean again, taxes are going to make or break it. So make sure that you're definitely having that as part of the conversation. And reach out to Tony, of course, if you need some help at yourplanningpros.com. Tony, insurance coverage I guess could be another place to talk about this. There's lots of schools of thought. Do you need it? Is it adequate for you? But I mean, insurance products in general have changed, so there could be some useful things here. So certainly doing a review of this is not a bad idea. Tony Mauro: Definitely not a bad idea. No. And again, part of the plan that we do, a lot of people don't like to talk about insurance because they think you're going to talk to them into maybe a lot of life insurance or something like that. But I think it goes a lot deeper than that. It's the health. It's your auto and home. Of course, life fits in there. Liability insurance may be an umbrella, certainly disability insurance, the long-term care aspect of it, all that fits into the plan because boy, if you're not adequately insured, something bad happens, that could destroy you completely. Marc Killian: Do you find that people are more interested in talking about it as an option than they used to be because they have made so many changes? I mean, there's a lot of ways where insurance could play a really pivotal role or an insurance product, I suppose I should say, of some kind in your overall strategy. Tony Mauro: I think so. If we're keeping it to the investment/retirement strategy, it definitely can. I still like some of the whole life type of policies are issued that build up some cash value. Yes, they have gotten a bad name because I believe been sold where they weren't needed. But in certain instances I think that's very good. I think annuities still have a place in certain situations. I mean, it's technically an insurance project, but I consider it more of an investment product. But things like that definitely could help in certain situations. You hear on TV, of course with the insurance, if you're talking to like the whole old, I don't know who coined that. Was that ... I can't think of the company. Marc Killian: Prudential? Tony Mauro: Who was buy term and invest the difference, that was that ... Marc Killian: Oh yeah. Tony Mauro: Way back when. Marc Killian: Yeah, I'm not sure who that was, buy term, invest the rest or something like that. Tony Mauro: Yeah, something like that, which that has its place too. But I do think cash value products do have, depending on, because it's a permanent type of policy, a place in people's plan if it fits. Marc Killian: Yeah, if it fits. That's the key word right there. So again, and being open. We talked on a prior podcast about just being open to the fact, especially if you're having retirement stress, open to suggestions or ideas or things because sometimes people will definitely walk in and say, "I don't want to talk about X, Y, or Z" when X, Y, or Z might be the thing that actually helps you get accomplish what you're after. So make sure you go through a plan and then also follow up with that plan. We'll kind of finish it there. Just like any wellness check, you want to kind of check back in, whether you're losing weight or dieting or whatever, you want to kind of keep track of this stuff and set some goals and then see how you're tracking, see how you're doing. Tony Mauro: Yeah, you're doing, yeah. And with today's technology in the planning process, all of this, a client's plan is basically out there for them 24/7. In other words, they see what I see. And as their investment products change, that's reflected, but their overall goals and plan are out there. And so it isn't like it's a surprise when we visit. They have an idea of what we're going to talk about and what we're going to go over, and then we make changes and then it's instantly updated. So I think that that is one of really the cornerstones of why you're paying an advisor is really what we talked about. Obviously much more in depth when you're in an advisory meeting, but this is what you want out of the relationship is right here. Marc Killian: Yeah, for sure. So have yourself a financial wellness plan and kind of go through and find that relationship as Tony was just kind of finishing that up. The whole point is to find someone that resonates with you. That's why it's important to come in and kind of get started with that complementary review that advisors offer, Tony certainly does the same thing, to see if it's the right fit all the way around. There's usually no cost or obligation for these things, and it's just a good chance to see, hey, does your philosophy match my philosophy? Can we work together? Because you've got to be able to hear the advice and be able to work that plan, but at the same time, the advisor's got to know that you're receptive to that as well. Otherwise, you guys are just banging your head against the wall. So you want to make sure that you've got a good strategy with a good person that works well for you and a good team, and that's what Tony and his team strive to do. So if you need some help, reach out to him. Don't forget to subscribe to the podcast on Apple or Google or YouTube or ... I say Google, but it's YouTube or Spotify or whatever. You can find all the information at yourplanningpros.com. That's yourplanningpros.com. Tony is a CPA, a CFP, and an EA with 30 plus years of experience in the industry. So a great resource for you to reach out to at Tax Doctor Inc, again at Tax Doctor Inc, but the website is yourplanningpros.com. Tony, my friend, thanks for hanging out and I always appreciate your time and I'm glad that tax season is behind you. Looking forward to talking to you in May. Tony Mauro: All right, sounds good. Take care. Until next time. Marc Killian: We'll see you next time right here on Plan With the Tax Man.   Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.    

Psychologists have determined that retirement is one of the most stressful events that some people will experience in life. In this episode, we'll look at the ways to proactively deal with the stress surrounding the retirement process.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian: Psychologists have determined that retirement is one of the most stressful events that some people will experience in life. On this episode, we'll look at the ways to proactively deal with the stress surrounding the retirement process here on Plan With The Tax Man. Hey everybody. Welcome back to the podcast. Tony Mauro and myself here to talk about steering clear of retirement stress here on this episode with Tony. We're going to see if we can help you guys figure out a couple of key places hopefully to help reduce some of that stress. Tony, what's going on my friend? How are you? Tony Mauro: Yeah, I'm doing good. We were just talking before we came on, it's actually cold and snowy here today. Of course, we're still in the tax season, so bad weather has not quite left us. Marc Killian: Yeah. It's trying. Spring is trying to completely pop up. Tony Mauro: Trying, yeah. We've had good weather, so I can't complain. Marc Killian: You guys were just warm not too long ago at the time we're taping this too. Tony Mauro: We were, yeah. Marc Killian: It's been all around the map. Yeah, for sure. Well, but you know what? It can be a little stressful though, if we want to tie that into our conversation, Tony, right? So it's like, "Oh, good days, good days. Oh, bad days." And then it's like, "Man, I just really want some good days." You get a little stressed kind of waiting for it hopefully to show up and stay around. So let's kind of transition that into some of this retirement stress that we were talking about and that I was teeing up, and kick it off with just understanding the fact that this is a significant gear change. I mean, often we get so focused on the X's and O's of, is my money good, Tony, for retirement, that we kind of forget about some of the little things like, "Oh yeah, my whole life is about to change." Tony Mauro: It is. And we've been conditioned to work our whole lives. And at least the people I see are not used to it and sometimes have a trouble adjusting outside of all the money stuff. I mean, that's part of it that causes them stress. But we're so used to, at least in America I think, compared to other countries, we're always stressed. We're always running to the next thing and work life, personal life. I mean, you name it. You talk to people and they're stressed out. Retirement's supposed to be, let's move away from that a little bit. So these are just going to be some good topics to talk about today. Marc Killian: Yeah. And so if you're thinking about that gear change, I mean, first and foremost, yeah, it's great because you're no longer on the clock, but there's still some stress that comes with it. Tony Mauro: There is. I mean, even though for most of the retirees, you're not working, there still is... I think the first thing that hits my clients is, "Now I have no purpose." And they get stressed out about that right off the bat. And then little things start creeping in, such as anything from grandkids and things like that, to if they pick up a part-time job, being able to make sure they make that. Just to the normal everyday life things. What I think we need to do really is sit down and plan our days a little bit, just like we were when we were working, to alleviate some of that stress, and make sure that you understand that you still do have a purpose and you are still going out and doing things, even if you're not working, Marc Killian: Right. Because I mean, on the one hand you go, "Yeah, no clock, no meetings, no annoying coworkers, this all sounds fantastic." But sometimes humans don't do that great with change. And then you start kind of stressing and going, "Okay, so what do I do with my time? Or how do I run here? Or what am I going to do there?" Blah, blah, blah. So it can just add a layer of stress that you maybe weren't totally thinking about. Because I think we're also creatures of habits, so sometimes even though those other things from the work life that I just mentioned can be annoying, they do provide us with some structure, and sometimes humans really kind of crave structure, even if they don't think they do. So just something to be aware of. Second one is embracing the opportunity now to face some new challenges. Well, okay. So we are here, so let's take a look at some things that we might want to do. Tony Mauro: That's right. And a lot of people, they've always had things that they... You talk to them about it, "Well, I'm going to do this when I'm retired and that when I'm retired." But some of that stuff is challenging. And I think you should definitely sit down with your advisor and kind of go over some of those things as what do you really want to do? And take that and embrace it. And the good news is, I think the way at least I'm looking forward to feeling is, whatever that challenge is, it's not work where you have to go out. I mean, because we have been trained since when to go out and trade our money for time and of course our jobs. You don't have to worry about that stress anymore. It's whatever this challenge is, well, even if you struggle with it, whether it be a hobby or work or something, it's okay, because it's just part of life. And I think retirees I see that do take on challenges, I think they fare better with their mental state, their personal health, and their physical state as well, rather than just not doing anything. Marc Killian: No, I definitely agree with you there. So having those challenges and being open to some new challenges, even though sometimes, again, change can be hard. But it's going to help keep you engaged and active. And so now think about going into retirement, being a little stressed or whatever, but you got to keep those options open. Because it's not like life is always just going to go, "Oh, you're retired and everything's going to be totally perfectly smooth." So you got to be willing to roll with the punches too. Tony Mauro: I think you do. I think that a lot of times these challenges and some of the stuff we want to do, you get into it, I know I have, it's like, "Wow, this is not what I really thought it would be." Unlike when you're at maybe a job that you have to say, "Well, I got to keep working because I got to pay my bills." You can just say, "Hey, look, pivot. This wasn't what I thought. Let's move on to something else." It could be as little as basically... I mean, I don't plan on ever relocating permanently, but if I get somewhere and I don't like the weather or something or whatnot, well, I'm just not going to go back there the next year. Or if I'm doing some volunteer work and it's just not fulfilling, I'm going to change it. So the good news is you have options. You got to keep them open. Keep an open mind. Because it's pretty easy to stress yourself out over stuff that probably isn't really, I don't want to say that important, but it's not the end of the world. Marc Killian: Well, and you think about keeping the options open. So if we're talking about getting into some of the finance, some people, the dream is to move down to Florida, for example. But then after a little while you go, "Well, this actually kind of sucks." It's too hot, it's too busy, it's too sticky, it's too whatever. And so then you may want to move someplace else or whatever. And so you just got to keep those options open, and also be talking with your advisor on that stuff so that you're making sure that you're being careful when it comes to whatever it might be that's going to change during those golden years. So just got to be flexible in there. And also keep a sense of perspective. If we're keeping our options open, let's also keep things in perspective. It's easy to watch a commercial and think a bunch of commercials and everything's going to be great, or your neighbor's got it made. But you got to be realistic about the fact that life is life. Tony Mauro: Life is life. And we all dream of retiring and being healthy and being able to do all the things we wanted to do, and sometimes that doesn't happen. But more times than not, most of the retirees are still fairly healthy, the ones that I see. And I think it's kind of a weird thought to think that us living as long as we're living now wasn't always the case. I mean, 150 years ago, nobody was living this long. Retirement wasn't even kind of real. You just worked till the end and that was it. Generally you died. And now we've got so many millions of baby boomers. And I read a stat the other day, I can't remember it, but how many are going to be retired by the year 2040. It's just a big, big number. Marc Killian: Oh, yeah. I just literally saw one that said something about 4 million were on the docket to apply for something in the month of April this year of 2024 just alone. I was like, holy moly. And that doesn't mean that they're going to, but I guess based on age of turning either... I can't remember if it was either turning eligible for early or full retirement age. But either way, it was being eligible for social security. Tony Mauro: Yeah. And so I think if you're fortunate enough to have your health, and the whole reason for this even conversation is to get with your advisor and then of course, plan some of this stuff out so that you can enjoy the later years in your life as long as you can. I mean, I always kid with clients and I tell them, "Don't you wish life was kind of reversed?" In other words, you got to do all the fun stuff you want to do in retirement when you're young when your body can maybe handle it, maybe when you're healthier, versus at the end. And you work at 40 some years to what, maybe enjoy 10, 15, 20. Again, perspective is everything. And I think you got to try, in my mind, enjoy what you can while you can. Marc Killian: Yeah. And when it comes down to it, your going to have to have some help. Because again, we wind up focusing so much on the X's and the O's, which again, the dollars and the cents, that we don't sometimes start thinking about some of the other pieces that are going to go into it. And often, Tony, the biggest piece, and we'll just finish up with this, is just the fact that it is that big gear shift. People often just go, "Well, now how do I turn all the stuff that I've done into checks and whatnot because I'm not getting a paycheck anymore? So how do I turn it into that? How do I make sure that I'm going to be okay?" Because money is the biggest cause of stress that humans deal with pretty much all the time. I mean, it's kind of the number one problem for just about everything is how you feel about money or how things are going to go. So having a good financial professional maybe will hopefully eliminate some of those worries. Tony Mauro: I would say so for sure. I mean, as a retiree, you want a good financial planner or advisor in your corner that can help you do just that. And it really is trying to set up your monthly income stream, whatever that is for you, so that it's stress-free, it comes the same time every month, you know what it is. And get in and visit with your planner two to four times a year and make sure everything's still on track. And make adjustments as you see fit, as you're out there trying to enjoy life. Because last thing you want, like you've mentioned, is to be worrying about money. We've worried about money for all our lives, and in retirement, this is the last thing I think you want to be worried about. And I think you need to keep your finances fairly simple. And simple by meaning, try to get everything on auto-pay, and then the money coming in on auto deposit, so that you don't have to spend tons of time managing this stuff, and it flows pretty seamlessly. Marc Killian: And that's really the ending piece, is taking the time to get it started. Because often that's where we struggle. Once you get it moving, you go, "Oh, this is actually pretty good. This is not so bad." But you wind up having that kind of... I mean, well, honestly, if we're talking about stress, sometimes there's just stress in thinking about having to deal with the finances or dealing with the retirement. "Oh man, I really need to go see somebody, but I don't think I'm going to be in good shape," or, "I'm afraid of what they're going to tell me," or whatever. And that causes stress. So sometimes you just got to bite the bullet, have the conversation, especially when often you can get these... Most financial advisors do complementary reviews for that reason. So you can go through the process, find out if what they do is a good fit for you and if you're a good fit for them. And to maybe take a little bit of that stress off the table when you start working together. So as always, if you need some help steering clear of retirement stress, well, a plan, a strategy, is a great way to do that. And that's what Tony and his team do at Tax Doctor, Inc. So get on the calendar and plan with the tax man at yourplanningpros.com. That's yourplanningpros.com. We are taping, this is April, Tony's right in the middle of taxes. So I'm not going to keep you. I'm going to let you go so you can get back to it. Tony Mauro: A couple of weeks left. Marc Killian: A couple of weeks left for tax season, but you hang in there. And we'll see you guys next time here on the podcast with Tony Mauro. Again, visit him at your planningpros.com.   Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.    

Unpack the toolbox of technology that's promising to redefine retirement planning, but does it deliver? This episode takes a critical look at the wave of innovations, from personal finance management software to online calculators, and questions whether they truly simplify the planning process or introduce new complexities   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc Killian  00:01 Let's unpack the tool box of technology that's promising to redefine retirement planning. But does it actually deliver? So on this episode of playing with the tax man will take a critical look at the wave of innovations, from personal finance management software, to online calculators and more. Stick around for this episode playing with a text.   00:22 Look up in the sky. It's a bird.   Announcer 2  00:24 It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:38 Hey, gang, what's going on this week here, Tony Morrow and I back once again to talk investing finance and retirement. And Tony is going to help us talk about you know, technology, is it and how is it redefining retirement planning? What are some pros and cons of various different things we'll run through and how does he feel about it as a seasoned professional, a CPA, a CFP and an EA of 30 plus years? What does he think of all this tech and the things that he's seen through his many years of helping folks to and through retirement? So that's on the docket? We're gonna get into it with Tony this week. What's going on? Brother? How are you?   Tony Mauro  01:10 I'm fantastic. Looking forward to talking tech. I love tech.   Marc Killian  01:14 Yeah. Big tech guy.   Tony Mauro  01:16 I'm a big tech guy. Okay, sometimes to my own detriment.   Marc Killian  01:19 Aren't we all?   Tony Mauro  01:20 Yeah,   Marc Killian  01:21 that is certainly the case. Well, you know, like I said, You've been doing this a long time, Tony. So you've certainly we've seen this tech boom. And I'm not trying to make you sound old, by the way. Because I know you're not, but you just been doing this a long time. And there's been a obviously a huge boom, in various different things in the last 20 years, from a tech standpoint. So it should be an interesting conversation to have, because many of your clients and the folks that check out our podcasts and things, they are 50 over, I'm 52, right, we're starting to get older, and I'm pretty tech savvy as well. But you know, you have friends that are the same age or maybe a few years older, and you can see that some people just aren't as up with it or something, you're think you're tech savvy, then something even newer comes out. And you're like, Man, I'm I'm so tired of this stuff. I don't want to learn one more new thing, right? So it can be daunting. So let's, let's talk about a few here. Let's start with the simple big elephant, 800 pound, gorilla, whatever you want to call it. In the room, which is Google, everybody, Google something at some point, and it has certainly altered how we look up information, what's your take on it from the financial standpoint, or   Tony Mauro  02:27 from the financial standpoint, I think it can be good, you know, and I'll try to do goods and Bad's of of each of these that we hit. But you know, obviously, the ease of it is you can get a lot of financial questions possibly answered. Very quickly, you have many, many choices. Many people obviously, don't scroll down very far. They take about the first two or three and take that as gospel. And I think that's where sometimes it could get you into trouble a little bit on the financial side is is what you're reading from somebody what I would consider authoritative. In other words, somebody that you know, really knows what they're talking about? Or is this just some guy or   Marc Killian  03:08 gal and it's hard to tell the paid ads? Yes, from the resources, right, because they've gotten so good. And allow now a lot of times, they better will say sponsored or something, you might notice that in the fine print or whatever. But just be careful. Again, I think it's a great way of looking at it to get some general information rolling Google's fantastic. I think at this point, it's obviously changed our world entirely. You know, there's certain things that the cell phone the smartphone, obviously changed us, I think, as a species and as as a society on all the things that change that way. But then there's certain things with inside that and Google being one of those. That is I don't know that anybody doesn't use it on a regular somewhat regular basis. So just grain of salt, right? Don't you know, don't go too far or don't believe everything you see that your Google right away. That's   Tony Mauro  03:56 true. I started using and really have been into and it's very, very new, you know, is the AI the artificial intelligence and chat GPT especially for accountants, sure. And financial planners, where it's actually spooky to ask it things and it gives you answers that you have to read them. But it isn't like Google, you don't have to search it gives you answers. And I don't like to say it's just scary. Interesting.   Marc Killian  04:25 Yeah, very true. Yeah. Well in that regard, in that regard, then let's go to the next one, which is robo advisors, which kind of is using AI and predictive elements. So as an advisor yourself what's what's your take on the Robo?   Tony Mauro  04:38 Well, Robo since they're, you know, competitors, I gotta say, I don't like him. No, I think that they have a use. I've looked at them and you know, they do a pretty good job or a simple things, especially now I'm sure it'll it's gonna get better as time goes on and whatnot. And, you know, I don't think they'll ever rip Replace the human advisor. I think that most of the facts are good. But I think what the robo advisors aren't showing me yet is, you know, is this in tune with, you know, the most tax effective strategy? You know, how often can a person change a plan? It doesn't seem like there's a lot of flexibility, but they do have some appeals probably, especially to the younger people who are very used to just wanting all that they don't want human interaction, they just want to deal with somebody, you know, something quick.   Marc Killian  05:28 Yeah, quick and easy. And I'm with you, I think there's certain industries where I can see where people say, hey, if it's the computer, the computer is not going to try to take advantage of me, but it also is not going to be able to understand you, or, you know, relate with you as a human to a human. So there's, it's a double edged sword, right, dealing with humans does have its pros and cons. But it you know, when you find the right one, I think we all can probably agree that there's there's relationships where it's truly more beneficial, because you are working with another person. So   Tony Mauro  05:58 I think so. I mean, I think it's an emotional factor with human beings, at least with our clients. You can relate. Yeah, an emotional thing. Yeah,   Marc Killian  06:05 you know, what I'm going through, you've been there to your you know, your fellow breathing human. online calculators, Tony, super popular, you can online calculate just about anything and mortgage retirement accounts, all sorts of stuff. I don't know, kind of a useful tool, but do you want to take them to, you know, to super hard or what, I don't know, what do you think, you know, I   Tony Mauro  06:25 have a lot of them on our website. And I do like them for a quick hitters, you know, that people can go out now and calculate all kinds of things, whether it's a future value, like you're saying mortgage, amortization schedule, even some tougher things, you know, I mean, if you go out to like, calculator.net, they have got just a ton of free and I'm talking stuff, it can calculate your, you know, your body mass index, they got everything. And it is cool to play with, I think it's good for quick hitters, especially for talking in the financial area. And then I think you need to try to incorporate that with your advisor, and help implement it into your plan. But at least it gives you an idea of some things that were very difficult to calculate, you know, in previous years. And so I use them a lot, but I use them in the context of our overall financial plan. But it is nice to add it to show closure.   Marc Killian  07:18 Yeah, yeah. And again, something like that kind of thing can be a very useful tool to start kind of getting yourself quickly dialed in or walking into your advisor and saying, okay, hey, I did some quick online calculators with this, this and this. You know, here's what I'm seeing, you know, how do we break this down? What are you seeing? What do you think? And that way, when you're stress testing, various scenarios, you guys can kind of be on the same page. So great use, yeah. What do you think about platforms like Scottrade, or trade or any of that stuff that's out there. You know, it's certainly very appealing to the do it yourselfer, as well, and, you know, fidelity and so on and so forth. So, and clearly not going anywhere. What's your take on it as a as a CFP?   Tony Mauro  07:56 Well, I think some people look at him and say, Well, you know, these are, you know, there's I have no use for my advisor, you know, and whatnot, because I don't need you to trade what you really don't I mean, every product is available to you without an advisor. I think so the goods of them are they have all across the industry, even with us, it's brought costs to do things down. And I think that's good for the end user, the investor or the client. But I think though, that and they do, some of them offer a lot of information. Now, probably maybe information overload. But I think, you know, if you're going to use those kinds of things, you know, you just use those to execute trades. And you know, that kind of thing. I still think there you need a plan with an advisor or on your own. And, you know, work that plan. Those are just platforms to execute transactions in my in my opinion, we basically one of our financial planning packages is we do the plan. And if you don't want us to help you manage the assets on an ongoing basis, you paid us for the plan, but you can certainly go out and manage that part on your own not through a Scottrade e trade or something, and then just have check ins with us, you know, we're all fee based anyway. So it is it doesn't really matter where you hold the assets if you want them with us in advisory fee, you can but it's not necessary either. So I think they have their place even for working with guys like us.   Marc Killian  09:24 Yep, never very true. Right. And so there's so many things you can do there. And obviously, many clients want to build a plan. They want to build a strategy, Tony that's going to help them feel good sleep at night, have that peace of mind all those things, and have that good, strong financial plan together. But they still also want to dabble a little bit. They do kind of enjoy the you know, picking some stocks or doing some things and that's cool too. So having an account to do that is great. Just again, make sure you're working with your advisor on what those things are you're doing and make sure that it's speculative. Make sure it's something that you can sort of fund money if you will, and if you hate if you knock one out of the park, that's great, but if you Do something it's not going to derail the retirement. Right? Yep. Okay. Well, you know, podcasts, for example, can be added now to economic and business news. Certainly 24 hour news channels have been the thing for a long time. But think about that for a minute. Even just financial, economic and business news, Tony, 24 hours a day, multiple channels seven days a week. They have to and we know the nature of news anymore is they have to be creative. Right, where it's constantly they have to, they have to fill all this time with some sort of content. And that kind of gets sometimes a little sensate. Well, not a little they get a lot sensationalistic or whatever, because they just need to get eyeballs. So, you know, be careful. And it's certainly changed people's view on finance, right? Because think about it, you'll you'll turn on the news. And you'll say, you know, see the market, you know, suffered a, you know, a crashing day today. And it's down like 1%. Right. And it's like, really, is that really worth the crushing headline?   Tony Mauro  11:07 Yeah, I think this for us, as an advisor, at least for me, in my opinion, is kind of somewhat the bane of our existence. Because people do watch too much of it, I think. And it gets them all worked up. And if you let yourself get like that, the whole idea of all these things we're talking about is to try to make your life easier and simpler. And if you let yourself just believe all of everything you hear about verifying it, which I think that's where the adviser steps in and puts some, you know, some expectations and some truth to it, is you can let yourself go down weird rabbit holes. And then if you're actually following some of this advice, which I think these most of these people are journalists, they're there, like you said, to get eyeballs, they're not doing financial plans everyday, they may come off like they do. Yeah, but they really aren't. And so I always say take that with a grain of salt, double check, you know, what they're saying with your advisor? For sure.   Marc Killian  12:06 What do you think as a professional, what do you think about personal financial software like Quicken, for example,   Tony Mauro  12:11 I like Quicken, I really like personal financial software from the more from the accounting standpoint of knowing where you're at with your personal finances at every step of every month, just like everything else. And all the software it's gotten very, very good. It can pull bank feeds in it's not cumbersome. Like it used to be. But I think a lot of people get confused with it. Stop using it because they sometimes can't figure it out. And they just throw up their hands and say, I don't like it now Quicken again, I have a love hate relationship with their, their company, which is into it. I mean, into it's been around, I do like into it. But I think sometimes they try to make it again, all encompassing, kind of like the trading platforms where they're trying to steer you along your financial way. It basically by answering some yes, no questions. And I think there's a lot more to it than   Marc Killian  13:01 that. Even good software companies, the new business model of constantly updating or subscription based, that stuff can can certainly get annoying. Definitely. But yeah, it's it can be a love hate thing. But I think overall, it can be a useful tool.   Tony Mauro  13:16 I think it'd be a very useful tool. Absolutely. I would recommend anybody using Quicken mints, whatever else they can find that they like, keep track of their personal monthly finances, ya   Marc Killian  13:26 know? And yeah,   Tony Mauro  13:27 I think, you know, the, the downsides are minimal. You know, the other thing I don't like is, we were talking about it on the last episode, because we didn't touch on this is, you know, the data mining that these companies do with us, they get us all in there. And they know everything about us. And they can, you know, mine our data and market us, but that's part of it. I think you're better off with personal finance software than without, okay. Well,   Marc Killian  13:50 and we'll finish with kind of staying in that sort of space. Right? So that's personal software, maybe you've downloaded or maybe it's you know, now nowadays, it's definitely just, you know, over over the web, mobile banking apps, right. I mean, just, you know, 10 years ago, seven years ago, you know, maybe half the people I knew felt confident or comfortable using the, the mobile banking app right from their phone. Now, it's virtually everybody. It's just, it's just faster and   Tony Mauro  14:13 easier, faster and easier. And you can really pretty much do everything on the mobile app, now that you could inside a bank, you can even now take pictures of cheque you get and mobile deposits. It's up to a certain amount, I think, at least with my bank, but you really don't need to visit the bank, but the bank is still there. And you've got that mobile app, check. Check balances paid bills, right from your phone, again, with the idea of trying to make your life easier this this whole thing is if you use all this tech properly, you can really simplify your life but you can also go down and it just you feel overwhelmed. So I think you need to get with your advisor. We help clients with their tech. We're trying to make their life as easy as possible and they basically can run their life we always tell them we want you to run your life from your phone. And no matter what age you are, you want to be confident to do it. We want to help   Marc Killian  15:04 them do that. Yeah, for sure. And finally, Tony, if you're talking about digital space and doing some of these things, what do you think about the digital estate planning services, you know, online wills trust or Legal Zoom? Like, I don't know, you know, I kept feeling back and forth with some of this stuff. It's this kind of world where it's quick and easy. And maybe if it's really basic, maybe that's okay. But, you know, it's still worthwhile to see a professional, if you need something a little more complicated.   Tony Mauro  15:30 I definitely agree with that. 100%, I try to steer people away from that, let's say just need something very, very basic. The attorney is, in my mind, I know they get a bad rap, we always, always make fun of them. But I think that they are essential in you know, wills, trusts, things like that by cells, whatever, to make sure all your bases are covered. Now, I just had my own will updated, you know, and I went to my attorney, you know, and they're talking to me, just like I talked to clients about stuff that I, you know, kind of brushed over and I don't know, if I would have got it online, maybe I would have maybe I wouldn't have but you know, my financial power of attorney, my advanced directives, you know, my medical power of attorney, all that stuff, that I you know, unless you're answering the boxes in the questions, right, and online, you may not have that, and you may not even know it. So again, having a real life, bro, it's a human, I think is better off in that area. 100%   Marc Killian  16:32 Yeah, yeah. And again, there's so many facets to this stuff nowadays, it's certainly changing everything in the world. So you know, just kind of wrapping it up. It's, it's just something to be cognizant of, it's, we have to think about, think about COVID. And people having to go to zoom for so many things, and especially even seeing their financial professional or whatever. And we had to do things online. And in the first couple of months, talking with advisors, people, you know, clients were very leery to have to use the portal and then be sharing and talking online, right on Zoom, if you will. And then as time went by now, people actually prefer it, because now they're like, I it's time for my annual review. I don't need to come into the office, right, we can just do this over zoom, you know. So we   Tony Mauro  17:12 do it really literally today is our day in and this is mostly seniors, and this deals with tax clients. But we have a day where the seniors who just can't get on the portal because we normally have our tax clients e sign, you know, they look at their tax return and there's a page they sign it's it's legal for us at the IRS says that that serves as their signature, but some just can't, can't do it. And so we have a day where they come in and they make an appointment, and they come in just to sign which again, I think is a waste of time, but their time that is right, right. But it's not everybody's gonna be able to adapt to the technology. But I you know, we have many, many seniors that I It surprises me   Marc Killian  17:54 that they're okay with not driving, and they're like, yeah, we'll just do it online.   Tony Mauro  17:58 They do it online. Yeah. I mean, they more and more of them, you know, are adapting to this, which tells me that they haven't thrown up their hands yet and says, I don't want to learn anything, because the world's forcing them to do it came true,   Marc Killian  18:10 very true. My mom's 82 And she's pretty good with a lot of stuff, a lot of digital and online stuff. So which I didn't see coming, you know, so kudos to, to her. But you know, I think yeah, sometimes though, you know, some people just like, hey, I still want to, I still want to look somebody in the eye and shake a hand. So, and there's nothing wrong with that, either. Oh,   Tony Mauro  18:31 nothing wrong with that.   Marc Killian  18:32 There you go. All right. Well, how was technology redefining retirement planning? It is there's no way around it. It's changing it a lot has been and of course, you know, we have to adapt or get left behind. But I think there's still a way to have a happy medium. And of course, if you need some help, you know, kind of finding that balance. I mean, a retirement plan is about balance. So also in the way you're using tech to work with your retirement plan. It could be about balance. Tony and his team are here to help you're planning proz.com That's your planning proz.com. He's got 30 plus years of experience helping folks get to and through retirement. As I said earlier, he's a CPA, a CFP and an EA. So a great resource for you to tap into. So give him a call. Get on the calendar, stop by whatever you need to do if you need some help. And don't forget to subscribe to us on Apple, Google, Spotify. Guess what YouTube now instead of just Google, they've merged everything over to there but either way, find us on whatever podcasting app you like by simply searching it out playing with the tax man or visiting in his website. You're planning proz.com Tony, my friend, have yourself a great week. Aren't you the same. We'll see on the next episode. We'll see you in April. Hopefully you won't be too too swamped with tax season, but we'll catch you next time here on plant with the Texas.   Announcer 1  19:47 Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated insurance Agency investment strategies discussed in this episode may not be suitable for all investors please consult with a financial professional  

As much as any other threat, recognizing and avoiding scams has become a necessary skill for today's retirees to develop. Join us as we explore crucial steps you can take to safeguard your financial well-being against the growing tide of scams and identity theft. Learn from real-life stories and gain practical advice to keep your finances secure in this digital era, all from the perspective of a seasoned financial professional.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian  00:01 As much as any other threat recognizing and avoiding scams has become a necessary skill for today's retirees to develop. Join us this week on plan with the tax man as we explore some crucial steps to hopefully safeguard your financial well being against the growing tide of scams and identity theft. Look up in the sky. It's a bird.   Announcer 2  00:21 It's a plane. No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:36 Hey, everybody, welcome into the podcast. It's playing with a tax man with Tony Morrow and myself here to talk about your financial fortress, practical strategies for retirees against scams and fraud. And for this month of March, I think Tony and I are going to kind of stay with tech as our theme. We're going to talk about some scams and stuff. This week, we're going to talk about some other technological, you know, retirement planning things on our next episode. So we're gonna kind of use that as our theme this month in March. What's going on my friend, how are you?   Tony Mauro  01:03 I'm doing well. How   Marc Killian  01:04 about you hanging in there? You and I were talking offline, as we got started that it's just you know, it's March already. And   Tony Mauro  01:10 we're busy, busy, busy, busy. And I thought these two topics that we're going to talk about in these next couple episodes be? Yeah, like I said, very, very timely, it's tax season. There's   Marc Killian  01:19 all kinds of things going on. Yes, sir. You're hear a lot from clients. So yeah, looking forward to sending information back and forth doing this, you know, the scammers they love to come out in force at different times of the year, certainly around Christmas, right. That's a good one springtime tax time, right? They tend to kind of come out there, oh, you, you know you, your tax bill is this or, you know, you owe this and use your tax, you know, return to pay for it, all these kinds of things. Right? always something going on. So let's jump in and talk about a few things. And, you know, I got this first a little news example here, Tony, that I wanted you to kind of listen to this and check this out. And then tell me things that you've seen similarly or heard, you know, within your own practice, right. So there was this news example, little synopsis here is the lady named Marjorie 77 years old, lost $660,000 to a Tech Support Scam, where the fraudsters posed as bank officials and somehow convinced her to wire her funds into crypto to protect her money from suppose a theft. Well, of course, they stole their money. Americans over 60 lost $3 billion last year in cyber fraud crazy, absolutely   Tony Mauro  02:30 crazy. It really is. And I think to elaborate on it, you know, most of the time the seniors tend to be the bigger targets but it can happen to anybody. And with all this tech going on and really sitting behind computers and phones all day it comes at us and you know we were just talking about how busy we are and sometimes you you're busy and you're not paying attention and you just go with it and then some potentially could happen the worst case I've seen in our own practice is we had a an elderly lady several years back just that she just uh you know, annual tax climb but she came in and she had said that she had gotten calls from somebody saying that they needed money they were pretending to be somebody she knew and they wanted paid in some kind of visa gift cards. Yeah, she kept going Yeah, going to Walgreens and getting visa gift cards anyway, at the end of it all before she found this out she was out about $11,000 and this poor lady you know, didn't have much to begin with and just a sad case and that is what is going on leading to these huge numbers is stuff like that people are getting our clients are getting robo calls and scam calls from people pretending to be the IRS and the IRS comes out and says they never will call you exactly always a letter Yep. And you know don't fall for it but people people do sir you know and it's it's all over I just had a call actually wasn't a call was an email yesterday directly to me saying that the person's name and says I need access to my portal please help. I looked her up on our system. She's not even a client of ours. I you know, that's a scam email coming in? Oh, wow. directly to me. Yeah, as a business not just individuals, but businesses to businesses, we you know, we clients don't realize it, but how much we spend dollar wise, and, and also timewise and trying to protect their data, because it's all out on portals. Now, you know, all this tax data, we got to be very careful with and it's difficult. But I think from a large, big picture view, you've really got to pay attention to what you're reading. And we'll get to some some more examples here in a second, but it's terrible. And I think it's only gonna get worse because we are getting into a society where we're not even using real money a lot of times anymore, you know, it's all it's all transfers and EFTPS and credit cards.   Marc Killian  04:53 Yeah, exactly. And that we're gonna Yeah, that's a great point because like with your credit card, or excuse me your gift card comment where Gotta run through some of this stuff, right? So let's go, let's kind of break some of these things down for folks and give some examples. We'll put a link into the show notes as well, that gives kind of more examples of some of the things from Thompson's routers, article from Thomson Reuters on there, that might give a few more ideas for people to look through as well. But, you know, so there's, we've, a lot of us have heard of phishing, right? We know about phishing emails. So there's phishing vishing. So that's phishing with a V. And smishing. This is hilarious how we make up these words, right? Yeah. But anyway, so let's, let's run through those three real fast. So phishing, of course, we just mentioned, you just talked about it yourself, emails and websites trying to steal your data. That's one, right. So be Be diligent there, I think we've gotten a lot better about those. But, you know, again, keep your head on the swivel, exactly,   Tony Mauro  05:44 because I mean, emails are coming at us so fast, that again, a lot of times, we're not reading them, and we're just flying through them very easily to be deceived, I would definitely check out you know, the headers of your email, make sure it's coming from somewhere you kind of recognize that's, that's the big one. And even   Marc Killian  06:02 with that, Tony, I would say be still be very careful, right? Because we're seeing these kinds of scams. We've talked about this a little while back, where, you know, you get an email from Amazon, for example, since it's so massive, and everyone uses it and says, there's a problem with your order, click here to sort it out, or we'll help you get it taken care of, don't do that. I don't care if it you know, if it says Amazon, and it looks like their logo and everything looks fantastic. Immediately just delete the email, and then log in to your personal web, you know, Amazon account, go on the web, whatever, you know, you go there versus a link, they provided you to go there, right. And that way, you're going directly to the horse's mouth to see if there's an issue nine times out of 10, there isn't one, it's just someone trying to scam you. So definitely be careful there. What's vishing, Tony, or   Tony Mauro  06:48 visiting is if you actually get a call. And a lot of times these will come in through your cell phone, because everybody's using the cell phones, and they're trying to trick you into providing personal information. And they're very good at it, you know, and most of the time, I mean, the easiest way to do this is, if you don't recognize him, I would probably just hang up, it would be my best advice. If it's somebody you know, or somebody that really needed your personal information, they're either going to call back, or they're going to get it some other way. But this is where I think my dad's got a lot of these calls. He's a senior, he gets them at home a lot on his landline. And they're asking him for his information. They're pretending to be either a credit card company, or somebody soliciting and they're asking him for his course, they know his name, but they want his address. Sometimes they'll ask for credit card information. Some of them have even asked him for his social security number. Yeah. Obviously, you do not want to give that stuff out. No bank information, do not give that out nothing. And   Marc Killian  07:42 they try some of that stuff to this is the IRS calling or that kind of stuff, right? And it's just that's not the case, right? They're gonna send you certain certified letters, they're gonna send you appropriate things of that nature. So smishing is also cell phones. This is just through text. And that's obviously the big one now too, right? Because it's like, again, it could even be the Amazon thing. There's a text from Amazon saying, there's a problem with your order, click this link to sort it out. You know, yeah,   Tony Mauro  08:07 I just, I just had one of these yesterday, I pulled it up on my phone to for this call. It was from a person, I get a text that says, Hi, my dear friend, it's been a long time since I've heard from you. Have you been? I have no idea who this this number is. So I texted them back said who is this? And she said, It's Diana. And you saved my number. And I said, I think you have the wrong number. And then she started asking me questions about my personal information. And that's like, why do you need this? I was playing with her a little bit, and finally got her to just stop. But I think she was fishing for some personal information from me pretending to be an old friend. And oh, yeah. And that that's just a little bit too fishy, you know? Exactly.   Marc Killian  08:49 No pun intended, right? Yeah.   Tony Mauro  08:51 It's just so you gotta watch it because they will, you know, they will. I've seen clients bring stuff in with text, pretending to be credit card companies. Again, your your card has been declined at least call or at least provide information. Things like that. Haven't seen too many from the IRS, the IRS scammers usually call or send emails, but it's probably possible that they could start data again, the IRS doesn't text at all, they're very old fashioned with their communication. So you know, be be careful with that, too. So there's three three areas you got to be careful of. Yeah, exactly. They are just crazy. And what's at stake, right, Tony is obviously identity theft, financial loss, credit damage, motional stress, right?   Marc Killian  09:31 So the obvious kinds of things. So let's provide a couple of examples here. And I said, um, as I mentioned, we'll put the link in here to the Thomson readers that give some more details on each of these. But let's run through kind of a few bullet points of the styles of scams that are going around government imposters big one right? Because people get immediately scared Oh crap, I gotta take care of this. It's the government you know, and often that's what they're they're preying on that and praying for you to also be like, just scared and immediately do Whatever, because you don't want to, you know, have some sort of government problem. Yeah, we   Tony Mauro  10:03 haven't we have a commercial here, for example, from the Polk County Sheriff, saying that, you know, we will don't fall victim to scams that somebody calls you from the sheriff's office demanding money or you're going to jail, you know, that, that kind of thing. So they're, you know, they're, what do you want to call it? In an authority figure? Yeah. And that scares people, just like the government. And so they actually are taking their time and money to run commercials, because it's going on around here right now that people are getting scammed like that. And police would be another one,   Marc Killian  10:35 I would say, yeah, right. We've seen those kinds of things to where if you don't pay this amount, sheriff's department's on his way out to lock your house to lock you out, you know, for some sort of, and that's like, that's all crap, right? Don't fall for that stuff. They do not do that you're going to certainly be properly notified through certified mail. You know, so don't fall for that governmental imposed imposters, sweepstakes. I don't know if I see these as much anymore. But certainly like, hey, you've won something kind of thing.   Tony Mauro  10:59 I haven't seen a lot of people complaining about this. But you could see how this would work. I mean, you know, somebody calls says you want something and oh, by the way, give us all your information and your credit card to collect the prize or something you've already won, which should send up red flags right away. But again, people especially maybe the you know, the elderly, or people that are alone, a little little more craving for some contact, and conversation. So gotta be careful there as well.   Marc Killian  11:25 Yeah. Computer Robo scams, you talked about that robo calls and phone scams, the robo calls. So this big one here, folks is and Tony, like, I know, you know this as well make sure that you don't say yes, you know, when you get these phone calls, where they're like, Hi, this is such and such, you know, blah, blah, blah, I'm having trouble hearing you. Can you hear me? And you go? Yes. And they record that? Yes. And now they plug that in to whatever automated thing where would you like to buy, you know, $5,000 worth of whatever. And they plug in your little voice saying yes. And therefore you're kind of screwed. So don't say yes, just say, I can hear you. Right or something like that.   Tony Mauro  12:02 That's right. I, my brother, again, I've got so many examples of this. But it's a robo call kind of phone scam, where the scammers are recording people's voices. And then they're using AI to create that voice in a conversation. And my brother had an insured who called him up, because he's trying to get basically wanting to know if there's any insurance coverage for this. But the client received a call that he swore was his son, it was his exact voice and everything saying he had been picked up, he was in jail, and he needed him to wire him $5,000. And the other guy did it. And it was a scam. And the guy was trying to see if he could get some insurance coverage. But insurance company said no way. Yeah. But this guy, I mean, he's not elderly. He swore it was his son. Now, he left a voicemail. And then you know, the father panicked a little bit saying, Well, I can't call him he's in jail. I'm going to I'm going to wire this money right now. And he did. So that's a that's an extreme example, but it does happen. And with his AI, if they hear me talk a little bit, they probably can somehow, you know, clone my voice and make make words up for   Marc Killian  13:15 Exactly. And that's kind of similar Tony to the grandparent scam, which is on my list. fairly similar. It's a loved one scam of some form, right? Where, to your point, you know, you get this message or an email saying, Hey, grandma, grandpa, it's, you know, Suzy, and they've got the information. And you know, I got in an accident, and I've got to pay $3,000 to for bail or you know, whatever. Right? Yeah. And people will jump to that. So don't do that. Don't worry about definitely don't go down that route. The computer tech support scams. We just talked about that for Lady Marjorie, who fell victim to that. Be very careful with tech support of any kind, they are hoping that seniors will be like, I don't understand this thing. So let me get some help. And again, don't go through any links or information that you've gotten via email or text. If you really are having a tech issue with your computer or a specific app or software. Go directly to that company for tech support. Don't go through a link that some you know that you especially unsolicited link, right. Unsolicited links. Yeah, yeah. Okay. To your point about the grandparent scam, I'll actually or to you, excuse me, you're talking about that person that was messaging you and acting like they knew you. That's a new one to a romance scam.   Tony Mauro  14:28 Yeah, this very well. Could have been that, you know, I don't know, I didn't get that far with it. But yeah, you really don't know. You know, maybe they're trying to scam you. And again, with the ability of you think about it on the phones with a romance scam. What I'm thinking of is somebody send you maybe a provocative pic of whatever, and people are gonna say, Oh, well, you know, what's that? Let's take a look. And then all of a sudden you're in a conversation with somebody you don't even know. And you know, then all of a sudden you've given out some information you should know   Marc Killian  14:56 while they're playing. They're playing on the fact that they're hoping that you're lonely especially Yeah, because they can find out if you're widowed or something like that, right? Yeah, single person. So So those are some examples. And we'll give a few more things telling you this so we won't get too too long in the episode. Let's go through kind of rapid fire or some ways to better recognize the signs of the scam. I'll start with a simple one age old thing that grandma taught us a long time ago, if it's too good to be true, probably is.   Tony Mauro  15:21 Yeah. And I think another one I mean, I'll rapid fire the next one. You know, if you if you get links, and you start reading an email, you need to look at the link. I definitely wouldn't open attachments. That's a rule in business for us for sure. Eating on a personal pewter. That's how all this stuff creeps in.   Marc Killian  15:39 Yep. So be very careful about that. Does it look suspicious? Yeah, exactly. Is it we mentioned it a second ago. Is it unsolicited? You know, is you're getting some random thing, asking you for personal information or to solidify something that you may or may not have done, and you don't recall it. If you've sent solicited, then that's a good sign. Yeah.   Tony Mauro  15:59 I think another one with that is if you get an email, and it's the paragraphs don't make a lot of sense. Or wording. Oh, spelling error? Things like that. Yeah, definitely. Then look up top seat, you know, I   Marc Killian  16:13 mean, who does that that's a great point. Another one. A lot of scams originate from overseas in different countries. And so therefore, their wording or their their English translation may not give me that click right. Right. Something looks off, you're thinking? Well, it to your point earlier about the pictures or something like that, you're thinking, well, this person looks, you know, or says they're from Florida, for example, right. But yet the wording in the language tells you that maybe they're not, you know, or something like that. So that's great point, actually, are they requesting a small amount of money in order for you to get a bigger amount of money? This one? I think most people are wise to this, Tony, it makes me think about the one from since of anyone around the 90s. Right that that prints in Nigeria that will give you $40 million? If you you know, that was so old, but there's still things going like that going around.   Tony Mauro  16:59 They must on that. I don't see that very often anymore. But every once in a while I will. It's a must. Somebody must be doing that still. Exactly. Yeah. What else you got? Well, you know, one is, like I said before, you know, most legitimate companies aren't going to have you pay them in gift cards. Yeah. And so be very careful of that. Because just like my little story with my little tax client, I mean, that's almost for sure. A scam? Yeah. Just just don't do that.   Marc Killian  17:28 Yep. Okay, so let's, let's beyond like spotting those red flags. Let's talk about some protections, we'll wrap it up with some protections here to avoid being a scam victim. Obviously, in today's day and age, we're all sick to death of passwords. I get it. But it is the world we live in. So create some strong, unique passwords. And for God's sakes, folks, if it's financially related, please change them regularly.   Tony Mauro  17:51 Absolutely. I always encourage clients to get a password keeper that randomly generates passwords have different passwords for every site. Because if you have the keeper, you don't need to know that you just need to know your master. And, you know, I so many clients have the same password for every single site. We've all heard it. And then like you I hate them, too. I hate multifactor authentication, but it's the world we live in. And it'll certainly protect you a lot better than having, you know, your first and last name as your password. I mean, yeah, it doesn't take very long for hackers to break the hip stuff. Exactly.   Marc Killian  18:26 And I get it. We all hate it at this point. But you got to do it, man, especially when it comes to your financial stuff, monitor your bank statements and credit card transactions regularly, folks, we can probably tie these two here together, Tony, turn on those fraud alerts, right with your credit cards. I mean, every time I make a transaction, it's annoying to get that extra message. But so what you know, hey, you charge $47 Well, if I know that I did it, then I ignore the email. But if I say I charge $47 And I don't recall doing it, it allows me to think well let me go dig into this.   Tony Mauro  18:58 Yeah, I think if you don't have that on your credit cards with the tech that they have, and we'll offer you with that, that's just plain silly. And then I think we always tell our clients even personal clients, you need to be reconciling your bank statement and credit cards every month now many don't do it and that's when you're going to miss something that may be slipped through on that bank statement and you didn't know about because all you're doing is you know living off of the last ATM slip you got right you had this much money in your bank account. Yep. And that's how things go unnoticed in small amounts because the good the good ones with bank accounts they'll slip stuff in very small odd amounts so to hopefully go unnoticed yeah, great point Tony. Great point they're not big big dollar amounts and then next thing you know you've got 15 charges say from like a Google yeah of $12.50 over five months you know and that's how they do it and then once you catch on they   Marc Killian  19:52 move to the next Yeah, for sure. I just got one myself from from there's a I know there's a gaming service. I know it's a legitimate service. called Twitch, but I've never used it and there's no teenagers in my house. And all of a sudden, I had three random twitch $7 Not a big deal, you know, but I'm like, well, that's not I didn't do that. So of course, I immediately talked to the credit card company, and they got it reversed. So somebody gets your information. And yeah, to your point, they're hoping you will just be like, Oh, $7 Oh, I don't remember what that was and move on. And then it's, it's a reoccurring monthly charge? Well, you got three of them now 21 bucks a month, every month? Hey, you know, that adds up. So and if they're doing that to 100 people, well, they're making bank. So you got let me ask you is as a tax professional and a financial professional, Tony, what do you think about, you know, retirees, pre retirees, or really anybody freezing their credit, especially like, if you're set as a retiree or a pre retiree, if you're over 50, there's a good chance that you're not planning on opening any new lines of credit soon? If that's the case, is it worthwhile to freeze your credit,   Tony Mauro  20:52 I think depending on your situation, and the amount of money you have, I think it's, it's worth looking at, absolutely, because you're not gonna always unfreeze it, and you don't have any need to run out and get credit. And it's just gonna make make it that much harder for somebody to really get one over on you or, you know, get credit cards out there, it is a little bit more work to then go get some credit to unfreeze it. But again, you're not in any any real rush. So   Marc Killian  21:20 I think they've made this technology better, too, right? I think you can go on to your, to these credit rating places and just put a hole, put a freeze on it. And that basically just means nothing new can be opened under your name until you unfreeze it. And I don't think the steps are all that complicated now. So no, not like they used to be Oh, yeah. For sure. You know, just a couple little really extra steps logging in and, and Firefox and freezing it. Yeah. Yeah. So it could be worthwhile. It's a great way to protect yourself. So last piece, we'll wrap it up. I know, we're getting a little long here, folks, but just some digital housekeeping real quick. Keep your anti virus software up to date. That's a good one. What else? Tony?   Tony Mauro  21:57 I'd avoid using public Wi Fi, you know, especially definitely don't use it. And access to any type of bank info or any personal data. Yeah, you're gonna do that good point. Like, you probably   Marc Killian  22:07 have a public Wi Fi there at the office, you know, many doctors offices, lawyers, offices, so on and so forth. Right? They offer public Wi Fi while you're waiting, especially doctor's offices, right? Because you're there hours or whatever. And you want to jump on your phone and do something, well, fine. If you're using that. But keep that real basic. If you're jumping on to check your Twitter or something fine. Maybe right. But certainly don't go check. Don't go checking your bank, don't go into your banking app while you're on unsecured public Wi Fi. That's a that's a no, no, let's not do that. No, no. And then finally, you know, you talked about passcodes. And then we talked about passwords, well, make sure that you've got something on your phone that way too, right. Don't use your address as your passcode. You know, some people like to use their fingerprint, and that's fine, you know, or that design thing where you got to draw some weird pattern to unlock your phone, but just consider having secure your phone lock it up to   Tony Mauro  22:59 Yeah, even even now with the iPhone. The face ID is better than just know nothing at all. Yeah, the   Marc Killian  23:06 things would still weirds me out, though, right? I don't know how I feel about that. It's like,   Tony Mauro  23:12 I don't trust it.   Marc Killian  23:12 I don't need it. And then you got my face too. But of course, I guess at this point, everybody's posted pictures of themselves on Facebook at some points or faces or everywhere anyway. Yeah, interesting stuff. But you know, there's that two factor stuff, too, right. A lot of companies now are almost forcing you to do that. Yeah. So we make them for our payroll clients, you know, to get into their portals, we   Tony Mauro  23:32 have the two factor authentication. Yeah, for every every payroll, clients, employees, you know, and some employees really don't like it, but we tell them we're not shutting it off. Because if somebody gets in and changes your bank account information, you know, then that's going to be bad for you. And so it's for your own protection. So,   Marc Killian  23:51 definitely, well, you know, final summary folks, you know, there's a lot of scams out there. If you do think you're a victim immediately start calling the companies you need to talk to if you're working with a financial professional like Tony, for example, reach out to them and let them know so they can immediately take steps if you feel like your information has been compromised, of whatever level and of course if it's egregious enough for your concern, call the police. Whatever the case is, but take steps to protect yourself so Hopefully, this helps you out a little bit here on this episode, the financial fortress and Tony anything else where we go Oh, that's   Tony Mauro  24:22 it looking forward to next meeting.   Marc Killian  24:25 Yeah, yeah, I mean, we're gonna keep continue on with the tech stuff here again, because it is that time of year, tax season is upon us and the scammers do come out and for So protect yourself out there, folks. And if you need some help reach out with Tony and his team at your planning proz.com You're planning proz.com Don't forget to subscribe to us on Apple, Google Spotify, and we'll see you next time here on plan with the taxman.   Walter Storholt  24:52 Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered Are through a VAT tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors please consult with a financial professional  

Every generation likes to talk about how much harder things used to be when they were kids. Like all of the people who used to have to walk five miles to school, in the snow, uphill both ways. But they had at least one thing that was EASIER…and that was retirement planning. Let's continue our conversation about why on today's episode.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian  00:00 On the prior podcast we talked about every generation likes to talk about how things were harder for them than it is now. And we're gonna continue our conversation with retirement planning. Is it harder than it used to be? Here on this episode of planet tax man with Tony Morrow? Look up in the sky? It's a bird.   Announcer 2  00:19 It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man. Hey,   Marc Killian  00:33 folks, Welcome to part two here have a conversation on is retirement planning harder today than it used to be? And I think in a lot of ways, we've certainly in the first half, we've ascertained that Yeah, it definitely is. But there's also some things that do make it easier. And I'm sure that's going to continue to be the theme throughout this episode, as well. But we certainly appreciate you and welcoming you into the podcast. And if you did not check out the prior one, feel free to do so you don't have to listen to one day to enjoy the other. But it's certainly not a bad idea. And of course, you can do so by simply subscribing to the podcast playing with the tax ban on Apple or Spotify or Google whatever platform you like to use a simply just stop by Tony's website to find those links and to take yourself right there and check out the tools tips and resources at your planning proz.com. That's your planning proz.com. Of course, you can always just type playing with the tax man in the search box of whatever app you like using as well. Funny, my friend what's going on, buddy? How are you this week?   Tony Mauro  01:30 I'm doing good, you know, in the throes of tax season and dealing with a lot of that, you know, but so far, it's been rough, smooth filing? Yeah,   Marc Killian  01:39 yeah, for sure. And it's late February. So did you were you good? Did you to take care of things for Valentine's Day, get your wife something nice or give her some flowers or anything?   Tony Mauro  01:49 We did do that. And we went out to eat this year, which was a little bit of a change. And so we enjoyed it. Yeah, it was but pretty pretty laid back and casual. Yeah,   Marc Killian  01:57 for sure. Well, I hope everybody had a good holiday or good Valentine's Day. I don't know if it's, I guess it's a holiday at this point. But but let's get into our conversation here on the next five of our conversation around, you know, is retirement planning harder. So let's go with number six here, healthcare costs, man, this has to be a no brainer, it's clearly back then it had to be a lot easier. Now we're facing massive escalating costs here. But we do have better technology for longer life, which is going to tie into another one here in a little bit. But, you know, again, it's all kind of this weird, double edged sword, we have way more tech and way more stuff. That's good, you know, for our healthcare side, but it is not cheap.   Tony Mauro  02:36 It's not cheap. You know, and I forgot to mention this on the last episode, but I thought about it after we had gotten off. But now that we're talking about, you know, we're in our 50s is, do you ever stop and think about? Boy, I'm so glad I'm not, you know, young and just starting out anymore, you know, because you always feel like after they got it, they're gonna have it really hard. And I wonder if our parents thought that two way back in their day, but we we survive, you know, and we adapt. But yeah, I think today, with the health care costs, I've just had a meeting with my benefits guy for our group health. And, of course, costs are going up again, they always do. He always acts like he's scared to tell me and I already know, you know, costs are going up. And I think it's, you know, a byproduct of, you know, we're living longer. We've got all this technology. And it does allow us probably, if it's not abused to live a healthier life. But yeah, the costs are just astronomical. And I think, as opposed to our parents who weren't living that long, and there wasn't, it always seems like there's a lot of different weird elements. I'm going to talk about cancer and things like that, that nobody seemed to have back 50 years ago. But nevertheless, I think that healthcare becomes a big issue in financial planning, especially as you're nearing retirement, once you get into it. You've got the whole Medicare thing, supplements and making sure you're covered. And it's a big cost for a lot of these retirees. So I think it's harder today than it was a long time ago. Yes. Yeah. And   Marc Killian  04:09 then think about some of the issues with facilities, right. So you know, facilities. On the one hand, we have nicer better facilities now, especially for seniors, right, or, or for folks with advanced seniors than we did you know, in the 80s or so. But, again, it also cost a ton like these continuing, whether they call them continuous care communities. I mean, these things are pricey, right? So if you're not talking about it, which many people like to avoid the conversation of, of aging and needing some sort of long term care, then you really put yourself even more behind the eight ball when the event happens. And now where you where you get the money from right now you're at a time to even plan or strategize. So, gotta talk about it right got to figure out what to do, because it is affecting more of us because of number eight, which we'll get to in just a second is that the longer you know, the life expectancy, but before we get there, let's talk about number seven. which is the sandwich generation, which many of us are, I was in this mode for a little while, I had my senior, my elderly mother living with us, and our daughter was still home, you know, before she went off to college, you know, now both have moved on to, you know, daughters in the Navy, and mom's got herself in a senior apartment complex, kind of, like we just talked about. But you know, that's tough, right. And especially right now, in this environment, we're in financially here in 2024, Tony, you know, I mean, everything is costly, you know, so if you're trying to take care of three generations in the same house, boy, that's rough, it   Tony Mauro  05:33 is rough, and it ties into what we just talked about with health care. And then what we're next going to talk about, with people living too long is, and I see it every day, and I you know, luckily for me, and my dad is still alive, and he's going to be 83. But II, we have planned for him. And he knows that. And it his biggest fear is, you know, obviously, they don't want to go into a full fledged nursing home. And they want to be able to live on their own as long as they can. But luckily, you know, for him, it's got the planning that was done and the means to do it. But I think a lot of people, I would just had somebody in here yesterday as well, he's in his 50s. And he is mom and dad didn't plan, they have dementia, he doesn't know what to do with them, it's really taken an emotional strain on him to try to take care of his aging parents, they're in their late 80s. And, you know, he doesn't know what to do with it. And not only consumes a lot of money, but a lot of emotional stress as well, if you will. So I think it's very, very challenging today. And many, many are going through it. I mean, I talk with friends my age, and they're, you know, they're, they're either their parents are aging, you know, or they need full time care. And it's, I only think it's probably going to get maybe a little worse, but because I don't think people are planning enough, like we were talking about the last topic for that, that eventual need of, you know, long longer term type of care.   Marc Killian  07:06 Well, and think about, you know, obviously, you've got the cost of aging care, right, so advanced age here, and you've got the cost of college, right, and then you get the cost of all these things out of control. So you end up with your college age kids at home, your parents, you know, elderly parents at home with you, as well. And it's just, you know, and then the grocery bills up through the roof now, because you got all these people there, and you know, groceries are out of control, you know, things have got to shift, and I'm not sure how we're going to make some of these changes from from our leadership standpoint, they just, they just seem to be, you know, comfortable with, again, kicking the can down the road, we'll we'll just make minor adjustments to my bring temporary ease, but it just makes for harder problems later on. So it's very tough, right? I mean, you're gonna have to have a, you've got to think your way through some of this stuff, instead of just kind of reacting in the moment. And I think that's certainly something that all of us have got to do in different walks of life. And you find yourself thinking, hey, look, I didn't get all the way to this point to have to keep making these hard decisions. I'm, you know, I'm getting close to retirement, I just want to relax. And it's like, well, that's how you get there to relax as you gotta make some of the hard decisions along the way. And certainly long term carriers and things of that nature are one of those. So good points, for sure. So life expectancies, well, we were living shorter, right, my dad passed away at 63. Back in the early 90s. You know, and so, you know, most of the men in my family have passed away early, but it doesn't mean that I'm going to so I've got to plan on being around longer, because we do have all these medical advances that we talked about a minute ago.   Tony Mauro  08:41 Yeah, we do, you know, and would our parents were alive. I mean, I still have one parent alive. And you know, he's 83. And, but earlier generations, you know, they didn't need as much because they weren't living as long. So the retirement didn't have to last. Now, when we plan with, with our clients, we're planning out to 90 for sure. And then if they've got some longevity in in the family, even a little longer, believe it or not, and then if it doesn't, is not needed, that it's not needed. But with that, and the fact that medically in some of the technology that we've already talked about, are keeping people alive longer, that are going to need their funds for a longer period of time versus 5060 years ago, generally. And so it all comes back to like you were talking about is is getting the proper plan and making sure that, you know, this plan is going to work for you, which all this stuff, people look at advisors saying, well, all you're doing is just picking investment. No, it's It's this kind of stuff that's more important than what you actually have your particular portfolio in, per se, you know, and so this is kind of stuff that I don't think you can overlook, and that's   Marc Killian  09:49 one of them. Yeah, definitely. You know, and so you think about the, you know, the aging process, right? So we, we tend to kind of do that thing and say, Well, you know, I don't have longevity so You know, just like I was referring to myself, I don't have longevity. So I'm not going to worry about it and think about what's happening to the younger generation right now. They see all these things, we're constantly being hit with this information and stuff saying, Yeah, you know, we're going, the world's going to collapse and blah, blah, blah, and you're not going to be 20 years from now, and so on and so forth. And so you've got younger people. And when I say younger, I mean, into the 30s, you know, doing this whole YOLO thing, right. And I know, it's a little bit of a dated term, but you know, you only live once, kind of deal and they're, they're kind of, they're not thinking about the future in we have to still do that. Because it seems like every time we turn around, Tony, there's always something where, oh, it's, we're not going to make it another 40 years, or this, that the other and then 40 years goes by in the blink of an eye and you're like, Wow, I'm hungry. And I have nothing. I know it. It's a, it's a weird spot.   Tony Mauro  10:46 It's a weird spot, I actually have a living uncle who is right in that spot. You know, he's 80 years old, that basically just living on Social Security. And it's not much because they were self employed. And they, you know, they didn't really put a lot in. So, you know, it's just not a very good existence, you know, to go all that time. But I agree.   Marc Killian  11:09 Well, you know, so let's talk about Social Security. Because that is, obviously that wouldn't change, you know, it same kind of conversation we were having, you know, our leaders just go I don't want to deal with that thing, punt it down the road, let somebody else deal with it. And we're out here going, you know, what's it gonna do to us? Look at what happened in France last year, right. So they, they call it pension air program there, right. So they changed their pension air program, all they did was right, move it to yours. And you had riots in the streets from people that which made no sense to me that people in their 20s and 30s, really, two years, you're 40 years away from being 60 in your writing over something that's going to maybe have you worked two years longer, you know, so it's kind of crazy. But again, to that point, we've kind of brainwashed people, or allowed them to kind of go down this path   Tony Mauro  11:57 of, of, you know, I don't want to have to make things any harder than they already are. And unfortunately, that's just how life goes. And if we keep making these short term decisions financially, life is going to be harder, it'll be harder. And I think social security, we could do a whole prior to our podcast, on this topic, and all kinds of things. But what what the deal is today really is because some of our older people, obviously they're living longer, don't have as many people in the workforce as we once did. And the families that, you know, we're going to be running out of oil, the trust fund is going to be depleted, I think, by the year 2034. What that will mean, and I agree with you, Congress, you know, just keeps kicking the can down roads to having meaningful, you know, talks about this and try to come up with something bipartisan to fix this. But they'll there'll be a last minute patch, like they always do, which I don't agree with. But the biggest problem with Social Security is we don't have as many people contributing, and then we got a lot of people taken. But like you said, though, you know, people in their 50s, even though I'm not counting on it, you know, you kind of feel like, well, I have been contributing for 40 years or 30 years. If you're not going to give it if if the benefits not gonna be there for anyone, just give me my money. And I'll go go my separate way. But I mean, there's a lot a lot of mixed feelings on that from people that have contributed a long time. I just read this morning, in it was an investment article about there's a proposal out from the investment community, that if they would basically take away the tax deductibility of all 401, k's and or IRAs that can that would contribute like 1.3% of the GDP, and they could use that to fund so you know, to make up for Social Security. I mean, it's, it sounds out there, but it's an idea. I don't know if I agree with it, but it just people need to come up with some ideas, you know, and on how to fix that. For the next, you know, 100 years. Yeah, so yeah,   Marc Killian  14:00 and it's all those little pieces, right. To your point, like, I mean, even talking about the France thing, is that gonna go, you know, we have 62 is early retirement, well, what if they just pushed that back to 64? or eliminated it, you know, you know, and just said, 66, is it or 67, depending on your age, there's talk of moving that, you know, to 70, making that the thing, so there's about a million ways they can do it. You know, there's the means testing conversation. To me, it seems like they should just grandfather things in for people and say, 50, you know, birthday 50 and younger or whatever, yeah, you're gonna probably not be eligible for early retirement, we're going to remove that 62 Altogether, or make it push it back to yours and supposedly funds it for 100 year so they just no one wants to touch it because they don't want to be the person who gets you know, labeled as either, you know, destroying it or removing it or whatever you think, Hey, if you're the one who fixes it, though that can be it can be a big win for you. So   Tony Mauro  14:51 yeah, and it's not going to be an easy and not everybody's gonna be happy. No, for sure. So they just they've got to, they've got to come up with something because I don't think Until let let it just, you know, eventually fail. But there'll be some. I just Yeah, I don't want to get into that   Marc Killian  15:06 and get to right. Yeah, we as they were definitely, we're definitely already soapbox a little bit on these episodes right now. So yeah, it's hard not to write because our lines have blurred so much, how do you talk about just simply the X's and O's of finance without looking at the bigger picture of what's going on in our world, with our leaders, and so on and so forth. So it's, it's tough, right? We're in this interest? Well, and that actually works really well, for this last point, Tony, number 10, is, you know, easier to achieve financial literacy. You know, in the past, I don't think a lot of individuals felt they needed to be highly financially literate, to get it done, because it was easier. But nowadays, you really do need to be well versed in so many things. I mean, right. I mean, if you turn a blind eye to what's happening politically, that's not smart. But then again, you don't want to go too far in because then people get so opinionated. And so they shut down and they get so frustrated, or they, you know, I mean, we just fight or whatever the case is. So you gotta have a good knowledge base, I think on a lot of things. Now, in our world, in our society, no matter your age, and certainly financially, that's gotten much better, it is way easier to get a lot more information and context. Now you can get that overload a little bit. But you can certainly find a lot more information to kind of build your knowledge base, and then take that to a pro like yourself, who you find that you is the right fit for you that you want to work with and say, Okay, now help me make it all make sense and, and understand them when they're talking to you.   Tony Mauro  16:25 That's it right there is, you know, there's, there's so much information out there, that you shouldn't just turn away from it, you should learn something on your own. But I caution people to when they go overboard, like you were talking, it's because it's it's at us 24/7 Now that you go down rabbit holes, like you would when you're maybe spending too much time on Facebook or something, and you get yourself all confused. And then sometimes either a you're gonna make bad decisions, or you're paralyzed and make no decisions. And so you need to maybe not just take whatever your advisor is telling you, you know, and never pay attention or outside wrap, right? I'm saying, you know, take some time learn about things. And then it's best to bounce it off an advisor, I would say this is where advisors earn, what they get paid if they're if they're doing their jobs properly. Because this is I mean, it's a relationship that, you know, the advisor, hopefully is trying to take you from wherever you're at to wherever you want to be. And everything in between, and all these stuff. These things   Marc Killian  17:28 we've been talking about, well, especially if it's a if it's a sip, what's the word I'm looking for a typical, is that right? relationship, right? Where it's not something where you're just saying, Okay, I'm giving, you know, this person money, and they're giving me advice, but I've given them money, they've given me advice and a plan, but they also generally want me to succeed because when I succeed, they succeed. You know, that kind of thing, right? So it's trying to build is trying to find that right? person, that right firm, that get that chemistry going so that you can work through all these more complicated things that do affect us in today's world. And so that's gonna wrap up our podcast series over the last two here. Is retirement planning harder than it used to be? Yeah, because I think society right now is a little harder than it used to be. It's also easier than it used to be so you know, just like anything is it's a double edged sword. We know life is not. What did I say? Relief was roses and thorns. There you go. That's right. It can be both of well, Tony, thanks for hanging out my friend. We got a little deep here. We got a little interesting, but sometimes you got to do that. Right. So we'll be back with more episodes in the future. Don't forget to subscribe to us here on playing with the tax man on Apple, Spotify, YouTube, all that good stuff. And of course, if you need some help reach out to Tony and his team at your planning proz.com. He is a CPA CFP and an EA have 30 plus years experience helping families get to and through on this journey. So give him a call and reach out to him. You're planning proz.com And we'll see you next time. Thanks, Tony.   Walter Storholt  19:00 Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional

Every generation likes to talk about how much harder things used to be when they were kids. Like all of the people who used to have to walk five miles to school, in the snow, uphill both ways. But they had at least one thing that was EASIER…and that was retirement planning. Let's talk about why on today's episode.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian  00:01 Every generation likes to talk about how much harder things used to be when they were kids. You know, we've all gone uphill both ways to school in the snow, all that good stuff, right? But we want to make sure that we're talking about the things we need to do for retirement planning. And is it truly harder than it used to be? So that's going to be our podcast for the next couple episodes. Right here on plan with the tax man with Tony Morrow. Look up in the sky. It's a bird. It's a plane. No,   Announcer 2  00:27 it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:40 Hey, everybody, welcome into the podcast. Tony and I are here to talk investing finance, retirement and retirement planning. Is it harder than it used to be? So we're going to break this into we get 10 points that we're going to cover over the next two episodes. We're going to break this into five and five atony and talk about these a little bit. And just see is it that that last couple of miles you know, like I said, the uphill going into snow both ways to school. So my dad used to tell me right, he's like, he's like, You guys have it so easy. I used to walk uphill both ways. I was like, wait, what? Yeah, go uphill both ways. What's going on my friend how you doing this week?   Tony Mauro  01:16 I've been good. You know, as we're recording this starting tax season, and it's kind of a weird thing, because our weather is was very, very cold. And we got a lot of snow and now it's all gone. And it's 60 degrees as we're taping this so it's weird. It's a weird February's Yeah,   Marc Killian  01:31 really? Yeah, you're warmer than I am today. If you're 60 right now, so I'm, like 52 here. And I'm in the south. So go figure, right?   Tony Mauro  01:39 Yeah, it's just odd to see the sun and this in February, we hardly ever get this. I'll   Marc Killian  01:44 take it and enjoy it. Right. Right. Right, take it and run with it. Well, I hate talking about the snow, right? So at least you gotta get rid of some of that with that sun. So enjoy it while you can. Well, let's dive into it. And like I said, we're gonna break this up into five and five. So we'll do the first five here and and see what, you know, our things are things harder now. Right. I think in some ways, they definitely are. And I think in others, we might see that there is some easier things, but it's all a matter about having a strategy and a plan that will I'm sure that's going to be obviously the overarching theme here. But let's jump in, let's start with the first one job stability and company loyalty, clearly way different now than what it was for our, you know, I mean, we're gonna we're in our 50s. So clearly different than it was for our parents or even our grandparents, for sure. That's   Tony Mauro  02:28 true. Yeah. And the reason that is, is because, you know, back in our parents days, and grandparents, you went to work for somebody for your entire career, you know, and a lot of times that was a goal, right? Yeah, that was that was it. And so people stayed at the same job. And I don't meet too many either on the tax side, or the financial planning side that have I mean, I've been with not only just maybe one or two employers, many, many that get into their 50s. They've been with 1015, sometimes more over their career. And so that's leads to a lot of I would say that that makes it a little harder, because people are jumping around more, you're moving 401 K's that sometimes they don't even get in them. Right. And they don't get that benefit of the old time. I think we're going to cover later but also to is, you know, a lot of these companies don't have the same type of old fashioned pensions,   Marc Killian  03:23 right? Well, there was the stability there. Right, like so if you if you did work that that long, 30 year job or whatever the same place, you did, not only did you have the stability of the job, but you also had the stability of the pension and the retirement plan that they that company tended to offer, right, which definitely made life a little easier. In that respect for retirement strategizing, right, because you had your three, three legs of a milking stool if you want, right, Tony, so you had your pension from that job for 30 years. You had your Social Security, and then maybe a modest little savings, it's you accrued a lot of weight. And you were good.   Tony Mauro  03:57 You were good. Yeah, you know, and some of these other topics will lend itself to that. But that's what you had. And today, you don't have that you've got basically the other two, and I will talk about them. And   Marc Killian  04:08 they're definitely harder the other two to deal with. So yeah, that first one, I definitely think that, in that respect, it's harder now than it used to be for sure. Let's go to housing market stability. All right. So number two here on our list, you know, was it more general? It'd be more stable and predictable? Yeah. I mean, I think there's definitely been times in our, in our society over the last, what, 60 years where home prices have been more stable than they currently are. They've obviously gotten out of control here over the last little bit. I don't know what's your take care?   Tony Mauro  04:38 I agree with that. I mean, I you know, back in the older days, it was, I think, a little more stable, you know, but I think the offset to that we you know, they had higher interest rates back then, for the most part. And I think that, again, though, most of our parents they didn't move around much like we do, and especially our kids, the younger people and so I'd never like to use the home as an asset or a source of income, I guess I should say, when we're retirement planning, it's nice to have the equity. It's nice to have all that. But unless we could turn it into some kind of repeatable and reliable income, everybody's got to have a place to live. And whether it's predictable, or volatile, or whatnot, I still like homeownership, or clients. And you know, and I know a lot of people, young people, especially will fight me on that. Well, I guess I'm old school too. Well, so   Marc Killian  05:32 for a little comparison here, right? So thinking about housing, and you're talking about rates? Just I'm sure you don't remember, no, this totally off the top of your head, but I'll throw it at you for fun. What was the US Treasury bond rate in 1980? Right, so do you have a guess? I'm gonna say it was around eight 9%. The low was nine, the average yield was 11. Point 4.4. And so for having something safe, right, in a bond or whatever. And so you'd go Okay, so we've got that we've got our civility of our job we just talked about, and we've got our home. Well, what was your home mortgage rate? By   Tony Mauro  06:04 the mortgage? Very, very high. Yeah, yeah. I'm   Marc Killian  06:06 gonna say 12 13%. You're right, sir. 13.74, in 1980, was the average. Right? So I mean, considerably higher, right. And now granted, the home prices were a heck of a lot lower. And that's the difference than what we're dealing with now. Right? You're talking six, seven, and 8%. Maybe you're five to 8% on mortgages right now, because of the interest rate rise that we had. But, you know, the prices are out of control. So that I think that's where it also is making it harder right now. I mean, if you're younger person trying to buy a house is pretty daunting. It's   Tony Mauro  06:36 very daunting. My son and his wife have been married a couple of years, they are thinking about buying a home, you know, and when they start looking at it, you start putting the numbers together. And it's hard to make that work as a young person. Get that mortgage in there. I know when I built my first house, and this was in my lifetime. It was 36 years ago. We built it with the land. And it was a small house. Sure, but it was $77,000. Crazy right then. Yeah, crazy. And your truck probably cost that now. Your cars are costing that, you know, in the average home, even here and in Iowa, you know, it's up there a couple 100,000 Oh,   Marc Killian  07:15 yeah, I think the average right man was somewhere between 350 and 450. Yeah.   Tony Mauro  07:19 Which is great. Well, we're in depending on where you live, yeah, part of the country. So it is I think it's rates are low. And I think it's a stretch for these younger people or anybody to get into them, especially the first time. Well,   Marc Killian  07:31 right now the old days are too low. We're we're losing here in the modern era from, it'd be an easier, let's go to three less reliance on personal savings. Well, we touched on that with the milk stool, right? So you had those other two pieces, so you didn't have to have as much saved personally. And obviously, that's completely flipped. Look at all the secure Act changes. I mean, the government, everything is saying, hey, you need to build your personal savings, because that's what you know, that's the ticket, you're gonna have to have that you are and   Tony Mauro  07:58 like, say, totally on us now as as Oh, yeah, investors, you know, it's not, we can't count on our employers. We'll talk a little bit about Social Security here in a little bit. But it's, if we don't save, and we get to the end of the road retirement, it's not going to look very pretty for us. And I do think it's, it's was a lot easier back then only because they had those pension plans. I would make the case, though, that a lot of people back then and we'll talk about a little later as well, is they didn't really know about saving and whatnot like we do today. But and we'll cover that. And that's true. And we've gotten better at that. But we've also had to write, we've had to because there's just there's, we have to rely on ourselves and our advisors, to help us out to get to get us to where we want to be because it's all on personal savings. Now in my my opinion,   Marc Killian  08:49 for sure. And that really leads into number four, which is it was a simpler investment landscape back then your options were way less. So it was a little maybe a little easier to navigate. Obviously, now we've got way more complexities going on. But in some ways, it's also easier to navigate now because we have the technology and we have a lot of different things. And we have a lot more options and a lot of cases maybe better options. But what happens is it gets confusing, because now there is just so many simpler, you know, sometimes can be good, right? So like, Well, what we used to have was just less less options. Now we've got so many options. It's kind of overkill, but we have created a lot of good things. I mean, think about it, Tony, like even ETFs right. I mean, they've only been around since the 90s. You know, so that was a great change from mutual funds, because ETFs are just a little bit faster. There's the little technology allowed that kind of thing to happen. Does that make sense? It did. Yeah.   Tony Mauro  09:42 I mean, they did and I think even with the vast array of investment products available, there are a lot more options to suit specific needs. Yeah, you can really, you can really dial it in now. Right? You can you can dial it in. I mean you know a lot of people Talk orally about annuities and you know, they do have their place, depending on the situation and back way back. Those options were, if they had them, it wasn't like they have today the you know that you've got fixed, you got variable, you got it, you got everything under the sun just in that arena. Yeah, let alone 1000s, maybe now of mutual funds and all of that. So I agree, I think both sides of the fence there, it was simpler. So it was easier. But I think today, we have more options to help us. You got to learn about them and get yourself educated. But yeah,   Marc Killian  10:32 you can really fine tune your your, your investing landscape now, which I think is really necessary leading back to that prior one, right, that personal savings, you know, how you're building your and it's not just the word savings? It's not like money in the savings account? Right? It's your personal, you know, wealth. It's your portfolio that you've built, right, which we know. So you've got to use the tools, you've got to be invested. I mean, you really do because you got to keep up with inflation, right? So it's, it's all this, we talked about it a million times, Tony, it's all this big puzzle that you do have to build. And so I think the technology and the tools certainly have helped in that landscape side of that thing, too. That works well. And in my opinion, it gives you more options to help people build all that personal wealth.   Tony Mauro  11:12 I think, too, you know, even in my case, compared to 1520 years ago, you know, when I was younger in this part of the business, right? We don't have the technology even you know, we have it today. But it's advancing so fast that, you know, we can really dial in people's finances in their plans, with basically just getting the data and getting it in there. And then you could run so many different scenarios so quickly through we used to have to do that by hand.   Marc Killian  11:42 Tony was That was not fun. Don't he was having hand cramps. Were I right all the time. Right. Yeah,   Tony Mauro  11:46 you know, and then then the spreadsheets came along. You tried to do it in spreadsheets, but now you've really got a lot of technology where in the client can be involved, you know, with that they can always see where they're at see their plan, which is great. So yeah, yeah, there's there's a lot of things. Good things I like about the technology,   Marc Killian  12:03 for sure. Are you at the 30 year market? I know you've been doing this quite a while i is 30 years. 30 years? 31 years? 31? All right, yeah. 31 years. Yeah. So yeah, I mean, a lot has changed, right? In the industry. You know, you're a CPA, a CFP, and an EA. And, again, you've seen a lot of changes that, you know, you don't go so far back at where you're just using the abacus. But no, but when I got out of college, when I went to work for a CPA firm, I literally had two pencils and an adding machine on my desk. Nice. Nice, good stuff, right there. All right, well, let's talk about the last one higher interest rates since you know, we, interestingly enough 2022 In parts of 2023. And even still right now, but certainly felt like this interesting, you know, what's that saying? History doesn't repeat itself. But it often rhymes. Well, everything felt like the 70s all over again, you know, in in a very interesting way. And not in a great way either. Gas prices are high interest rates were high, you know, shortages, all these kinds of things, we were seeing a lot of stuff, then it kind of throwing back to that. And so we just talked about the bond rates and the housing rates, you know, back in the 80s, they were quite high, even compared to now. And so, you know, it's great to salt a little bit, right was like, Oh, I'd love to get 13% on a CD. But you'd also be paying probably 13 to 16% on the mortgage. So take your poison. Yeah. And then you had you had rapid inflation back then as well. Right. And we have that now. But, you know, that 5% Right now, I mean, you know, four or 5% on a CD or even a fixed indexed annuity, some different things like that. I mean, there's some decent numbers now versus what we even saw just a couple years ago, Tony, but again, you got to have a, you got to have, you know, like, it's like Thanksgiving dinner, it's like that plate, right? You got a little bit of everything in order to have a really good Thanksgiving meal on your plate. If you just had turkey and mashed potatoes, it might get a little boring. Yeah,   Tony Mauro  13:50 I remember when my mom in this was in 87, her data just died. And she had some money, and we stuck it in the mutual or money market mutual fund that was paying like 9%. And, you know, back then, you know, I think with the higher interest rates, what's happened over the years is, you know, inflation has come way down rates have come way down, and for saving for retirement, especially last 20 or so years, except for a few peaks here. And there, it's never been eight or 9%, five, and everybody's jumping up and down, is you know, it's been around one or 2% on the safe side with CDs and things like that. And, you know, people save for retirement have had to say, Look, I can't build anything, you know, what with those kinds of rates, and so they've had to move to other types of investments. But I like the low interest rate environment. I mean, I think it's better for a lot of different things. I know retirees, you know, obviously they want as much as they can, but that whole interest rate thing intrigues me and I know I just watched on 60 minutes they were talking about you know, possibly lowering rates again, the Fed and and where we're going to be at with that had to try to keep inflation in check. And yeah, and bring us back to some sort of normalcy. Yeah, they're, you know, they're talking about it, but it just seems like we continue. And the problem is, is that what we've gotten into society with our leaders and everything else? And again, just my opinion, but we keep making short term decisions versus long term decisions, right?   Marc Killian  15:18 They do. And so we kind of we were very reactionary versus looking at things when a longer picture, and then it winds up being problematic later, and there's like, well, it's somebody else's problem to fix later. Right. And at some point, we kind of have stopped doing it. And you don't want to do that when it comes to your retirement. Well, I'll make a short term decision, and I'll deal with the, you know, deal with the rest of it later. Well later runs out, right.   Tony Mauro  15:41 I mean, like Tony, and I just said, we're in our 50s. Now later starting to get shorter, you know? Yeah. And our government unfortunately does too much of that. If we try that, like you say, we're really going to end up on the short end, which is why we're going over all this, you know, is to hopefully instill some, some visions, some aha moments, something you know, to make sure you're, you're staying on top of your plan. Yep, definitely.   Marc Killian  16:05 And that's why you got to strategize, folks. That's why you got to have somebody in your corner, helping you work through things, it's not as easy as it used to be. Certainly, retirement planning is harder now. Maybe some would argue than ever, you know, there's definitely a lot of things that can be helpful in today's in a environment and era, but a lot of complications as well. So, gotta have a strategize a strategy, and gotta have a plan to help you strategize, a planner, I should say, to help you strategize. So, reach out to Tony and his team and get onto the calendar, if you're not already working with him, share the podcast with others that might benefit from our content here that when we do these every couple of couple times a month, you can find us on Apple, Spotify, YouTube, all that good stuff. So reach out and let them know if you need some help you're planning proz.com All the tools, tips and resources are there at your planning proz.com And subscribe, at least definitely so that you can get the next episode, which we'll continue this conversation on, Tony, thanks for hanging out, buddy. All right, we'll   Tony Mauro  17:00 see you next time.   Marc Killian  17:01 Yep, we'll see you next time right here on playing with the tax band with Tony Morrow.   Walter Storholt  17:10 Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional

We're back to wrap up our conversation which might be a bit counterintuitive. We're going to question the real impact of common financial habits. Are the strategies you consider beneficial actually working in your favor? We explore the pros and cons of practices like paying off debt early and keeping up with financial news. Join us for a practical discussion, as we uncover the unexpected effects of everyday money decisions. Are your good money habits holding you back?   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian  00:00 Part Two of our prior conversation on our good money habits holding you back, we're going to continue to have the conversation about the real impact of common financial habits. And are those strategies that you consider beneficial actually working in your favor? So join us here on playing with the tax man with Tony Morrow.   Announcer 2  00:17 Look up in the sky. It's a bird. It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:35 Welcome back into part two of our conversation on those good money habits. are they holding you back? Tony and I back again to talk investing finance and retirement of course, Tony is the CPA CFP a and in the big kahuna over there at tax Doctor Inc. And if you guys have questions, need some help get onto the calendar and have a conversation with him at your planning. proz.com He and his team are here to help you get to and through retirement at your planning proz.com What's going on my friend? How are you?   Tony Mauro  01:03 I am good in tax season is upon us now. So it's gonna be a little busier.   Marc Killian  01:08 I was gonna say I feel like I feel like that's gonna be the theme. I hear from you for the next couple of weeks. When we talk as tax season. It's tax season. Oh, yeah, it's tax season.   Tony Mauro  01:18 Now, it's, you know, the IRS, right, it has kind of delayed the start of the tax season, they always do this. And they kind of cram it into, sometimes less and less time. So it's always that that crunch, you know, and we don't well, we don't work ourselves to death, like we used to. And you know, so we have some cut offs there. And so it's not as bad, you know, as long and stuff as it used to be. But nevertheless, it's busy.   Marc Killian  01:43 Exactly, exactly. Well, I won't keep you long we'll finish our conversation. That way you can get back in and work on these things we got to do. But we started off with our first five right on some good money habits, are they holding us back. So we're gonna continue and of course, you don't have to listen to the prior podcast folks to check this one out, or enjoy or pick up some nuggets of information from this one. But it certainly isn't a bad idea. So make sure you go by and check that out. You can find it at your planning proz.com or subscribe to us on Apple, Google, Apple, YouTube or Spotify. Just type in playing with the tax man in the search box. Alright, so let's go to number six here have our total 10. Tony paying off debt early. Hey, you know, good habit, right? Reduces long term interest payments can provide a nice mental boost, especially when you pay something off, you're like, oh, yeah, you feel really good about that. But Why might it be bad to pay off debt early? This can be interesting.   Tony Mauro  02:33 I think, you know, I definitely advocate paying off high interest debt, of course, and get rid of all of that. But sometimes, especially in the mortgage area, you know, some of us that have had a mortgage over the last, what, 710 years where you've got low interest rates, if you pay it off early, you know, you could be, you know, basically using that money. In other words, you you take cash flow out of your out of your monthly budget to pay that off. And you could be using that to get higher returns elsewhere. And still, the net is quite a bit of a plus for you. So if you've got a low interest loan, you got to take a look at it work with your advisor to see if this is the best thing for you. I do advocate staying out of debt and being out of debt. But every once in a while, it's not that bad of a deal, especially on like, say on home mortgages.   Marc Killian  03:22 Right? Yeah, you know, so you got to kind of take a look at how you're dealing it and really kind of the debt thing will kind of play into that lazy money conversation, maybe right, some of that extra money sitting in savings right now or something like that. Right? So because, you know, if you're, you're thinking, Okay, I'm getting, you know, I can get 4% on the CD, because the numbers have been better, because we talked a little bit about the fact that the feds are probably going to cut rates this year in 2024. But you know, you're paying off your house more, if you're lucky enough to have like a 3% mortgage, right? Well, yeah, you're making 1%. But could that be better use someplace else? Right? So let's, let's say you're gonna drop 50 grand on your mortgage, and you know, and you still weren't paying it off, you were just gonna get it knocked down a good chunk or something like that. Could that 50 grand be making you more money someplace else? safely, of course, I get that we want to, you know, find a vehicle that, you know, kind of works well for our risk tolerance. But again, that's why maybe paying off too much debt early. Bad debt, probably certainly a good idea to get rid of quickly, right? Yeah. Does that make sense? Yeah. Okay, cool. Make sure I wanted to make sure I was following you there. Number seven, staying informed by watching and reading financial news or listening to podcasts. Right. So another way to do it. Good side, right. Financial education is important. Not a bad idea to be up on various different things. That's why we try to that's why I always say, you know,   Tony Mauro  04:43 hopefully you picked up a useful nugget or two of information from our show. But be careful, right, because there's an awful lot of talking heads ton of it, especially I mean, you got podcasts like we're doing of course, stuff you view the internet everything everybody's got an opinion right in it. It tends to be if you tend to get too far into it, maybe information overload, I think could be bad, I think you could end up making some rash decisions, I would say, if there's nothing wrong with listening and gathering as much info as you can, I would definitely say, to, you know, run it by your advisor, you know, because they are going to be the ones that can, you know, lend some credibility to some of that stuff you hear, and whether it fits into you know, what you're trying to do. So just be careful. And the other thing is, unless you really enjoy getting information overload, eminent just just for your own time sake, you know, go do something else. It's fun, unless, again, unless you really enjoy it, it's yeah, it's   Marc Killian  05:41 so funny how our society is so geared that we have all this tech, we have so many things that, you know, making our life, you know, supposedly easier, but they're really time socks. And the next thing, you know, you go, why the hell the day go, you know, right. And it's just, it's amazing. Like, again, the wife and I were on this diet, you know, it's still January, and we're still hanging in there. And, and it's cooking healthy takes so much time, you know, yes. And so it's no wonder that our society is a little heavier, because it's easy to run to Taco Bell, and so on and so forth. Right. And I think the same thing financially, sometimes, sometimes it's easy to think, Okay, well, I'll just, you know, I'll just Google something real quick. And then I'll just, you know,   06:25 the first two or three things is the what, probably what I'll go with, but it might not be the right thing for you, right? Just kind of like that taco. It tastes good, but it might not be the right thing. That's right. You know, speaking of that healthy eating not only takes a long time, it's generally more expensive. Oh, Wally, way more expensive, way more expensive. Yeah. And I'm actually tonight, I'm in charge of going home, and I gotta go get the ingredients. So you   Marc Killian  06:50 got to go out and get the ingredients. Hmm. I   Tony Mauro  06:53 And but it is, it is painful, you know, to go out and do that. And you. You cook it in now? Yeah, it's gone in about 1520 minutes. Yeah. Well,   Marc Killian  07:03 I don't want to go down that avenue, because that's what the wife's complain about Thanksgiving. I'm like, Yeah, but it's so good. She's like, I spent all day on this. And I was like, yeah, man, it's good. I tell you what, the healthy thing right, I know, we're off on a tangent. But that's the point of the podcast is just talking about life in general as well. And how it relates to finance but thinking about like even just wastefulness. So help this healthy eating out to your point, it's expensive. And so the other day, she bought one of these vegetable things, as already, it's all kind of pre cut stuff already. It's already kind of sealed up in the plastic and blah, blah, blah, right? It's about you know, a smorgasbord of vegetables already kind of pre done for you to make your was a call that meat crop or whatever the whenever you're making your stuff for food. And as soon as she opened it, she pulled the lid off of it. And the smell hit us like a ton of bricks. This was brand new, and the vegetables were were bad. They didn't look bad, but it wreaked. Right. And so it was like, well, that's total money gone down, right down the drain, you know, and so and so I was joking with the wife has said, you know, what, never, you know, gets mushy and smells really terrible and goes bad like that. And she's like, What, like doughnuts.   Tony Mauro  08:10 That's like so much preservatives. And   Marc Killian  08:13 she's like, You suck. And I said, I know. I know. But you know, it is it's expensive. So you definitely you got to be on your toes when you're trying to do you know, financial stuff, and healthy eating right? Learn a lot of stuff out there. Alright, so that was informative news. Let's go to number eight. global diversification. That sounds good. Tony spreads out the risk, right? You can capture growth and different economies. Give me some negatives to think about here? Well,   Tony Mauro  08:37 I think the one thing with the negatives is while it you know, depending on what you're doing, and which countries you're investing in, it definitely could add to the complexity, because a lot of these different countries have different laws, different regulations for their securities and whatnot. And the other thing is, is it does increase your risk, because obviously, there's a lot of volatility, generally, when, when a certain country is doing well, other countries are not, and vice versa. And it would behoove you definitely to get with your advisor, maybe even choose a fund versus individual securities, if you're going, you know, globally, because it's impossible for us sitting here, wherever we are, to get any type of what I would call, you know, in depth research and even if you have it, are you gonna be able to understand it, it's different accounting rules, different laws, everything else. So be very, very careful there and make sure that you get the diversification you need. I'm not opposed to global diversification. I think it needs to be done wisely. Okay. All right.   Marc Killian  09:37 Yeah. So cuz you're definitely exposed to more volatility. So Right. So if you're not comfortable with volatility, got to take that into consideration. All right. Number nine, that emergency fund constantly building it? So you know, we've talked about this before, but like you got 100 grand sitting in the savings account? What kind of emergency Do you have, that's going to cost $100,000? You know, did you get your you know, did you get your dog kidnapped, gotta pay Have 100 grand to get it back, right? So it's a great safety net to have. But just be careful, right? Because obviously, the downside of this is that your your basically, your savings account, even with the higher interest rates, were in telling your savings accounts not paying you four or 5%. So you're losing money safely.   Tony Mauro  10:15 You're losing money safely. And you certainly can continue the good habit, but maybe just reroute that money to something that could earn you a little bit more put it to work for you. Right. Yeah, be a put it to work better for you. You know, it's great to build up a really good emergency fund. But after that's done, like you say, there's no sense of just keep putting money into that you got to you got to keep it working better for you.   Marc Killian  10:37 Yeah. And, and if you're a retired person, obviously, the emergency fund conversation is completely different than if you're still working, right? Yes, yeah. And it's also that comfort, that comfort Tommy level of like, what's the amount in the savings account, a savings account that makes you both feel good to sleep at night, find that number kind of something fair for eat for both of you. Because it can be one something where one party in the marriage wants, you know, a big number and the other party is fine with less? And you know, so you want both to be comfortable, but you got to again, not have it, you know, being ineffective, too. Right? Okay. All right. Number 10 final one here, patients making financial decisions and building a plan. Now, again, this is kind of like our fifth one on the prior segment. In some cases, delaying your decisions, to get more information or to you know, check things out, can lead to better outcomes, right, it could lead to making impulsive decisions, I bought something over the holiday Christmas break, I shouldn't have. Right, and get some more information. But when, when that patients turns to do nothingness, which humans are really, really good at procrastination,   Tony Mauro  11:41 it can certainly harm you, it can harm you, because you can't get off the sidelines. And sometimes you tend to overthink slash over analyze, like say there's nothing wrong, being patient, getting all the facts, working with your advisor. But at some point, you're going to, you know, make your goals, you're going to have to make some decisions, and you're going so, and hopefully the advisors, you know, and that's what part of what you're paying them for is you know, to keep you on track. Get you going keep you going. Yeah, because we are as humans tend to not want to change.   Marc Killian  12:10 We're really, really good at procrastination, aren't we? Yeah. You know, and not like, I know that some people are really, you know, the opposite. That's great. But I think a good portion of us are pretty darn good at procrastination, and it may be in different arenas, right? Some people are really on the ball about this, but procrastinate the heck out of that right, you know, so on and so forth. So it's a treat, we all kind of carry around so just be careful. So that's our podcasts were good habits can sometimes maybe hold us back. Hopefully you found that informative. And of course, as always, if you got questions need help. Before you take any action, always check with a qualified professional like Tony as I mentioned earlier, he's a CPA, a CFP and an EA He's got the whole alphabet soup, right there on his business cards. If you need some help, reach out to him at your planning proz.com That is your planning proz.com And subscribe to play with the tax ban on Apple, Spotify and YouTube. Tony, my friend. Thanks for hanging out and good luck with dinner tonight. All right, thank   Tony Mauro  13:07 you. We'll see you next time. Yeah, we'll   Marc Killian  13:08 catch you next time. It'll be into February here on plan with the tax man with Tony Morris.   Walter Storholt  13:18 Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional

This episode might be a bit counterintuitive. We're going to question the real impact of common financial habits. Are the strategies you consider beneficial actually working in your favor? We explore the pros and cons of practices like ignoring account statements and strict budgeting. Join us for a practical discussion, as we uncover the unexpected effects of everyday money decisions. Are your good money habits holding you back?   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian  00:00 This episode might be a bit counterintuitive, but we're going to question the real impact of common financial habits. Are your good money habits holding you back this week here on plan with the tax man? Look up in the sky. It's a bird.   Tony Mauro  00:14 It's a plane.   Announcer 2  00:16 No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:29 Hey, everybody, welcome to the podcast mark here with Tony once again to talk investing finance in retirement. And actually we're gonna do this over a two part episode. This week's and our next episode we're going to do are those good money habits you have holding you back and basically I've got some good money habits that if we're doing good things, hey, there's nothing wrong with that. But could there be a disadvantage? Or could we be maybe going a little too far in one direction and we want to make sure we have some balance in there so that's gonna be the topic of the conversation this week with Tony here on plant with the tax man, my friend what is going on? Welcome to the new year. This is we're taping this here in early January. So I know we've all gone through the New Year stuff but Happy New Year, my friend. Same to you.   Tony Mauro  01:09 It's good to be back tax season will be here before we know it. And as we're taping this, we got a lot of snow coming down. Yeah, that's   Marc Killian  01:16 what you're telling me. You're getting Blizzard Blizzard fi so yeah, and we're getting heavy, heavy winds and storms and possible tornadoes later. So it's, it's an interesting day for us to be talking. But that's alright. We'll get in there. We'll get in here. That's how that's how determined we are in to do a good podcast, right?   Tony Mauro  01:31 That's right.   Marc Killian  01:32 Ray. What are we like the the what is it? The Postal Service? We're rain or snow? Tony and I are doing a podcast? That's right. Or good stuff? Well, Tony, this is our 100th episode, by the way. So not only are we getting hit with storms, you and I in different kinds of storms in different locations, but we're celebrating our 100th episode. So kudos to you, my friend. I feel like we need a drink or something.   Tony Mauro  01:56 We need a little celebration. As it seemed like it's been that long.   Marc Killian  02:00 I know you guys need some balloons or some scotch and or drinks or something. I'll well we won't do that. We'll keep it straight. But you know, Anyway, congratulations, and thanks, folks, for hanging out with us here for you know, whatever episodes you happen to catch, and how long have you been watching or listening? Excuse me listening to us. We certainly appreciate you. And hopefully you'll enjoy this week's content. Well, let's get into these money habits. So Tony, I want to break this up. I've got 10 of them. Okay, I want to break it up over the next two episodes, we'll do five this week. And I'll kind of give you the good okay, I'll kind of set up the the main piece here and kind of give the good you know, way of thinking about the good habit. And then you kind of maybe give us the counterpoint as to some things to think about it to where we don't drifted into a bad habit. Does that make sense? Okay. Yeah. Okay. Sounds good. All right. So let's start with ignoring our account statements, easy to do, right? We get these statements, we get things all the time. And some folks, they just, you know, open the financial drawer and toss them in there. And I guess the good side of that would be like, it avoids overreacting to short term fluctuations, right? Because you're not looking at it. Right? So you don't have to get all upset every time you go, Oh, man, it's down a little bit. Right. But why might that be a   Tony Mauro  03:08 bad idea? Well, it's, you know, it's sometimes a bad idea for a number of reasons. You know, one thing is, you may get into such a good habit, which you never look at them, and you really never know how you're doing. The other thing is, is, if there's some changes that have gone on in the account, maybe something that doesn't look right, you know, I hate to use the word fraud, but it's not, you know, it's possible in today's age, that that can be going on. There's other issues such as well, you know, you're gonna miss an opportunity maybe, to make any types of adjustments to the portfolio. So it's while it's a good idea, and I hear a lot of clients say that I don't like to look at my statement, especially if after I've watched the news, but I think you'd probably need to keep it on the good side, you need to review it at least once a quarter, you know, and not just throw them in and never review them at all, because I think you're doing yourself a disservice by doing that. And hopefully your advisor won't let you do that either. Or asking you for for a meeting every every so often. And worst case, they're going over it with you so you can at least understand what's happening.   Marc Killian  04:10 Exactly right. I mean, it's they can get confusing, I get it, but we shouldn't just always throw that stuff in the junk drawer, the financial junk drawer and not look at it. Okay, keeping a strict budget. Okay, now, this sounds like a good habit to have, right? Certainly, it helps you ensured some discipline on your spending and your saving helps you achieve your financial goals. But strict budget Oh, be careful, right. So what's some bad things to think about here? But   Tony Mauro  04:34 I think sometimes people that really love budgets, and frankly, you think an account like B would love budgets, I really don't. I don't I don't follow one I kind of do and I do in my own personal life, but I don't let it get to be too restrictive because obviously, you know, if it's too restrictive, it gets too stressful. Sure. You feel like you can't have any fun in life. And you know, I think you miss out on Some things so I'd say set a budget. Don't go overboard and feel like, you know, if you miss on some things, you really beat yourself up because it's, you know, it has to be a flexible.   Marc Killian  05:10 Yeah, exactly. The flexible diets Exactly. Yeah, exactly. Here, we're in a new year, or you're probably on some sort of diet, maybe people are right, so five people, you know, and I think that's the key to like, we get emails all the time from people, they're like, you know, I just got to retirement. And I'm really like, or the fear of like, I've been saving and been really good about saving, now I have to pull money back out, and it stresses me out, right. So they're on a budget, and they kind of maybe, then they get a little too tight. But to your point, you've saved all this money to enjoy it. And retirement, having a strategy and a plan is going to help you especially laid out in black and white, it's going to help you feel good about actually pulling that money out and using it for things that you want to so Exactly, yeah. Okay. Number three, investing in familiar stocks, again, sounds like good and practice, right? So invest in what you know, has always been sage advice over the years. And it's certainly easier to understand, you know, things when you have a familiar arity to them. But you know, I mean, all you could just, I could just throw out the word Enron as a reason why it could be bad, right? So, you know, just don't want to go overboard. And in any one thing.   Tony Mauro  06:14 Yeah. And with with your example, with Enron, for example, I mean, you what you really lack if you stick to just a few things, you know, then you lack diversification. And if any one of those particular securities in that case, you know, you mentioned Enron go bad, which went bad in a real bad way, big way, I should say. And, you know, that's really going to hurt your overall portfolio. So, you know, while you want to stick with, you don't want to get too into exotic investments and do that kind of thing. You want to work with your advisor, on diversifying your portfolio, not only for the number of types of securities, but also based on your risk, and also based on tax efficiency. So yeah, definitely. I think that that that particular one could go bad in a hurry, you   Marc Killian  07:02 know, yeah, exactly. You know, and it's like, and sometimes Well, again, I'll use some examples where we get emails and Tony to the show into to your website, where people are, like, you know, hey, I was left some, you know, an inheritance when I was left some money from or less some stock from mom or dad, you know, and dad had, you know, stock X for 40 years. And you know, he really loved that, I really love them, I don't want to sell them. And yet, you're looking at it thinking this is probably not a good thing for you to hang on to, right. And that's why I'm not gonna pick any particular company. But again, you've got like this attachment to it. And it may not be the best thing for your financial situation.   Tony Mauro  07:34 It really is. I just had a big accounting client that we do their monthly accounting for. And he's very reluctant. He's a young guy to get a 401k going for his business. And his biggest fear is that he watched his mom and dad, they worked for a company here locally, for almost all their lives. And they all of their investment, or their retirement savings was in that stock inside the 401. And it went under. Yeah, so he's very skittish of the market because of that. Yeah.   Marc Killian  08:03 I mean, I understand that, but but he's the owner of this company. Right. So he's, he's a control versus his parents who work there and didn't have control. So didn't have control. But I mean, yeah, I   Tony Mauro  08:13 mean, but the important thing is, I keep trying to tell him, as I tell most clients is, like you, we're going to, we're going to diversify, we're not just going to end up in one type of security here. Because that's recipe for potential disaster. Indeed, yeah. So I mean, again, you know, the   Marc Killian  08:26 idea here, you know, there's, there's good habits, right, investing in familiar stocks can sound like a good habit, but you gotta be careful to not let it cloud you or restrict you, again, maybe a little too much. Number four, embracing automation. So you know, we're all probably AI to death. At this point. We're tired of hearing about AI at this point. It's everywhere, and everything and every marketing thing is seems like but automation does have some good points. And certainly investing and saving simple saving stuff, right? I mean, just you know, having your money come out of your check, go right to if you're still working as a pre retiree, going right into accounts, hey, that makes things easy ensures that timely bill payment, right? You don't to worry about extra fees, because you didn't pay the light bill on time, you know, or whatever. So there's certainly some good things to automation. But I would imagine the downside, it would be maybe disengagement told me where you're again, you're no longer paying attention, like you should be.   Tony Mauro  09:19 It's that and then, you know, I think to effectively kind of ignoring technology and just refusing to maybe learn or embrace anything new. I mean, especially for retirees, my dad included, you know, he's now in his 80s he's getting like that where he don't and so I can make fun of him a little bit, but he, you know, technology, he refuses to kind of embrace it and learn it. And you know, with an AI, I think AI and all of this stuff is only going to get more and more in depth as we all age, but he's at a point where he feels like well, I don't want to learn anything new. I don't, I don't want to embrace that but then he ends up with things It's like he just had it where he accidentally turned on the. And this has nothing to do with finance. But he accidentally turned on the closed captioning on his TV and can't get it off. And nobody   Marc Killian  10:10 might come to like it. I love it. I'm only 52. And I use it all the time.   Tony Mauro  10:14 He likes it. So yeah, I mean, so he's mad about that. But again, he, he struggles with technology. But I think it's one thing to you know, especially as you get older, maybe you don't want to get too far into it. But I do think you need to keep up. Yeah. And at least tight, you know, don't ignore it completely. terms, and   Marc Killian  10:31 I'm with you there my mom's 82. And she actually has, she actually has a pretty good grasp on some technology. And she does pretty well with it. But then at some other times, I'm like, you know, she'll ask me the same question like for the 30th time, and I'm like, How can you remember all this other stuff? If you can't remember this? I don't know. Yeah, at me alone?   Tony Mauro  10:49 Well, right. But like my, my dad, you know, with in most advisory firms, and really, even if you're doing it on your own, you know, you're logging into a portal, you're looking at your account. If you can't do that, you know, yes, you will get a statement. But everything's going to online. And like said, You gotta at least be able to function and do some of that stuff.   Marc Killian  11:12 Yeah, definitely. So I mean, again, automation can be really useful. So just make sure you're also not, you know, setting and I think think about like this too, right, Tony, the set it and forget it mentality that we talked about sort of with the statements can also kind of bite you here on the digital side, too. Right? You might set up your target date fund, for example, 15 years ago, or something like that. And you're like, it's gonna take care of it for me, and it kind of does. But could there be better options? Right? Could it be better things for you to be doing? So? Alright, and then also the fifth one here, we'll wrap it up this week, then we'll come back in a couple of weeks and do the other five of good money habits. So patients patients getting into the stock market? Well, no, scratch your head a little bit. Good. The good side? Well, I mean, that means I'm not making a mistake, I'm thinking things through, right. I mean, I'm not being irrational or anything like that, right. But you can also pretty obvious here, you can also just sit with your thumb in your ear forever and not do anything, right. You gotta be careful with your patients levels,   Tony Mauro  12:09 as in the first thing that pops into my mind is the whole market timing. Yeah, and people that want to try that and think that they can out smart the market as a whole, it's impossible to do. And, you know, there's, you can just go out and Google things like now and you'll find the studies if you missed the best five days, 10 days in the market, or whatever, timeframe over the elbow, or whatever timeframe you want to use, and you'll see how low your returns are. And so you don't want to be too patient and try to be too picky. The best thing probably, is to dollar cost average and constantly be putting money in good times and bad into whatever you plan, I'd say the market but whatever, right? You are investing in, yep, to avoid that to avoid, you know, getting that emotion into it. And just, you know, make it a habit. A lot of times you can do it through your paychecks, we've talked about it before 401, KS, and that kind of thing. But that's really what you're forcing yourself to do is to not not get stuck in that rut,   Marc Killian  13:11 L for sure. Because sometimes people will see these questions too, where it's like, hey, the markets kind of doing bad. I think I'm gonna pull back on my, you know, my contributions to right, you know, and it's like, but I'll pick it back up whenever things, you know, tip the other way. It's like, No, you're looking at that entirely wrong. Right? Yes. Yeah, it's dipping a little bit. And that's not the most pleasant thing, but you're getting it on the cheaper your dollar cost average. And so keep pumping it in. Right?   Tony Mauro  13:34 It is it's funny that we have clients with their employees that do it in their 401 K's that will say that exact thing is, you know what, I'm gonna I'm gonna pull this back. Mark's not doing very well. So in other words, you're trying to time it because you think that because the markets down? Like you said, that's the exact worst time you want to do it. You want to be in there. What, Why, why you're where your money goes a little further. So we try to talk them out of it. Some of them do, some of them don't. And then the bad thing too, is sometimes people will forget to change it back. Exactly. Yeah. Contributing? Yep. Um, so that's a tough one to see. And I don't advise doing that. Yep, for sure. Do that people   Marc Killian  14:09 do it? Yep. That's where, and that's where some of these good habits sometimes can, you know, best intentions, right. But they wind up kind of maybe backfiring a little bit too. So you always, you know, life is long. You know, life is designed to stay on the ball. You know, we can we can let things slide a little bit here. My wife and I were just laughing about when I had open heart surgery almost 11 years ago. Now. I had to go on this diet. And we're dieting right now in the new year, to your point a second ago in your tongue, being flexible. And it's like, you know, for you to just this diet we're on right now is actually working pretty well. And it's not too bad. And we're actually kind of doing all right with it's like, why didn't we do this versus that hardcore crashing? I had open heart surgery. So we went to the extreme level with some extreme diet, right? And it didn't stick and here we are 13 or excuse me 11 years later, you know, and starting all over again. And it's like it could have been As if we did just, you know, moderation if we would have gone with a reasonable diet versus some extreme thing. And I think that's what happens sometimes financially, we'd have some big a moment financially that happens to us. And we get a little extreme instead of being a little more prudent or being calculating with our moves. I suppose that makes sense. I think so. Yeah. Cool. Well, good. So that's open that translated?   Tony Mauro  15:22 I mean, I think you're exactly right, that whole new year's resolutions and dieting and everything else people try. I mean, we could talk for an hour on just that kind of stuff not even related to   15:33 right. But it means thinking about your findings, or look at the market, for example. So in December, we'll wrap it up here with this, Tony, but in December, right, so you know, late in the fourth quarter, the Fed had their their meetings, right. And they talked about various different things. And they're like, Well, we're gonna not we didn't do anything, and then we're gonna see you, and we're gonna hit pause, and we're gonna wait. And then in December, they go, Oh, we're gonna cut rates probably in 2024. Well, the market loves that idea. Right. So the market got very excited as the year went on down, but then January started, and and some of the reasons why they started, I think, maybe, you know, the prognosticators or whatever, sort of looking at some of the reasons why the Fed was thinking about cutting rates. And then they went, Oh, well, maybe it's not that great, after all. So the markets been off to a rough, rocky, rocky start here, this first part of the year, you know, and I just was on a call yesterday, where, you know, basically, it's a market update from basically our advisory firm, you know, and they've been talking about this for a couple of months. But I think this goes back to our points about the, what they're calling The Magnificent Seven stocks of the s&p 500, that actually accounted for almost all of its gains in 2023. And you know, they were playing it well. But yeah, but if those weren't in there, then the gains would have only eroded or the return would only been X. And, you know, I'm sitting there thinking over these months, everybody interprets these numbers a little differently. You can you can slant them any way to make whatever you're talking about   Tony Mauro  16:56 look good. And I think that back to our big point of people need to be investing regularly, in good times and bad because if you're trying to, you're trying to handpick, and again, market time and do everything else, you're gonna end up with not a lot of return, and definitely not going to meet your goals. Definitely,   Marc Killian  17:15 definitely. So again, so good habits can be, you know, be very helpful, but they can lead us astray sometimes. So be careful with that. That's gonna wrap it up this week here on the podcast, we'll be back with the second half, and just a couple of weeks, so don't forget to subscribe to us here on playing with the tax man at your planning proz.com. That's you're planning proz.com. You can find a lot of tools, tips and resources at Tony's website. And of course, you can check him out on Apple, Google Spotify. I keep saying Google, but it's it's really YouTube now. So Apple, Spotify, and they've converted everything to YouTube. So either way, you can find all the information that you're planning. proz.com Tony, thanks for hanging out, my friend. I'll see you in a couple weeks. All right, we'll see you next time. We'll catch you next time right here on playing with a tax man with Tony Morrow.   Walter Storholt  18:03 Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.  

Welcome to part 2 of our discussion on easy wins in personal finance! It's important to eventually get a comprehensive financial plan for yourself, but sometimes even just a few minor adjustments in your portfolio can make a big difference. Let's discuss a few more easy places to start...   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc Killian  00:00 We're picking up with part two of easy wins and personal finance. With Tony Morrow this week, we're gonna pick up where we left off on our conversation for the prior podcast, going through 10 places where hopefully you can make some adjustments to get you into better shape. So that's the focus of the podcast this week here on playing with the tax man. Look up in the sky. It's a bird.   Announcer 2  00:21 It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:36 Hey, everybody, welcome into the podcast, Tony and I wrapping up 2023. With our second half of the conversation on easy wins and personal finance. And Tony where you can you know, we're taping this, about two or three days before Christmas. I tried to finish up work this week before we all get out of here and and celebrate the holidays. But can you believe 23 is almost over crazy.   Tony Mauro  00:58 I can't believe it. I know it seems like the older I get, the faster these years go by. And it's interesting, but I you know what, the older I get to though, the more I look forward to the holidays, and spending time with family. So hopefully, everybody can, you know, can relate to that get that done as well, as they can expose? Yeah, well, if   Marc Killian  01:18 you're checking out the podcast, we're dropping this on Thursday, the 21st. So you got just a couple of holiday shopping days left. So hopefully, you've already got that stuff out of the way. And you don't have to run around like a crazy person. But if you do, be safe, and be sane, and all that good kind of stuff out there. And for now, just hang out with us and then listen to a couple more things here. So we're gonna go through six through 10. Tony, on our list of 10 things to work on. So let's let's pick it up with number six, which is certainly right in your wheelhouse. It's the tax efficiency of your investments. So not all investments are tax efficient, right. And so this could be a great place that you could do some tweaks and make some changes, working with your professional, your advisor to you know, really get some good wins.   Tony Mauro  02:03 Yeah, and you know, this time a year, for us, you know, a lot of our clients are asking these these types of questions and tax efficiency. I mean, you know, they get a little confused when they hear it, whether it's, you know, on the news or wherever, and really, it comes down to, you know, being able to analyze what you have, and making sure that, you know, it's not causing you any ill effects tax wise. I mean, and there's a number of ways, you know, that we do that. I mean, for our clients, I mean, we have some, some software and some calculations and whatnot, but you know, you can run it with your advisor, or at least inquire but, you know, not all assets are basically equal in terms of the way that you know, that they're taxed, and how they're treated for taxes. I mean, a lot of times we think, you know, clients will ask us, Well, you know, I've got such and such stock, or sometimes even bonds, you know, that I can sell and take a loss on. But a lot of times, you know, we'll do some tax planning with clients, and then we'll get their statements. And all of a sudden, they'll have some kind of huge capital gain that they didn't tell us about maybe maybe not even unknown about you, and especially in funds. And so then that goes on their tax return, you know, and then all of a sudden, they have a higher tax bill. The other interesting culprits are high dividend paying stocks, which we advocate. And then also interest in bonds and or other types of investments. And those two things are treated differently for taxes. So you got to kind of watch out for that, because bonds and CDs and stuff like that are taxed at normal tax rates, and which is generally higher than stocks. So you've got to make that this this whole thing part of your plan. Like say, if nothing else for taxes. Yeah,   Marc Killian  03:43 and exactly. And this is, I mean, I think outside of having the income plan so that you know how much you've got coming in, you know, each month in retirement, I think this is probably the number two spot, right? I mean, this is where you can truly make or break a strategy. So being tax efficient. And you know, you started out with saying people get a little confused here, and that's exactly why they should turn to professionals in this regard. Because if you've been DIY in it, right, you can, you can grow the wealth. We talked about that all the time, you can grow the wealth a lot easier. You know, certainly over the last number of years, it's a little easier to kind of build up money versus that preservation phase that distribution phase which is retirement and boy being tax efficient could make a big ol big ol swing there so it can over long periods of time especially Yeah. 2530 year retirement that's a long time so so tax efficiency number six number seven, check those beneficiary designations Now we talked about easy wins. So you might guess you could make the argument Mark taxes aren't that easy for me to fix? Okay, fine, fair. So we're cleaning that one up with number seven which is tax or check beneficiary designations. This is an easy win to anybody can get done and should do Tony this. This should not happen like those stories that just about every advisor has about someone getting remarried and then passing away and the ex spouse still being on some accounts on place. and they shouldn't happen, because it's just so easy. You can fix this stuff in like five minutes, you   Tony Mauro  05:04 can, and this, to me needs to be part of everybody's, you know, annual, I guess, review slash plan wherever they do, you need to add this one because it is easy to fix. Now, obviously you got to know where what you have and where it's at. And then you've got to contact, you know, custodians and things like that to, you know, just to double check. It would behoove you, though, to make a list of everything you have, keep it on your own, right what your beneficiaries are, that's what I do. And then it's part of my review process just for my own self. And we do it for every client, as well as, here's the beneficiaries you had last year, anything changed anything, you know, that we need to add? Because, like you say, things do happen. And I think I might have mentioned this on the last show or a while back, I was just checking mine as part of this year, and I found one that I did not have, yeah, you did. Yes, son. Yeah, as a contingent beneficiary. So you know, I just missed it. And, you know, easy change took about 10 minutes did it right online, and fixed it. But if you don't do this bad things can happen. And some of the worst generally are what like, say when a spouse dies? Or a divorce? Yeah. And then it's just a real ugly legal mess.   Marc Killian  06:15 So don't let that happen. Because this is this is an easy one. Yeah, for sure. Yeah, this one, the one, we don't spend much time on this, just get it done. If you've got a professional you're working with, just ring them up and say, Hey, I'm getting a divorce got a divorce, you're probably talking to them anyway, I need to make some changes, or you know, somebody's passed away, and you want to remove them or whatever the case is, just just take five minutes and do it. So Alright, number eight, rebalance the old portfolio. I feel like I should because it's Christmas time, I should say like rebalance ye portfolio. Yield portfolio. You know, rebalancing, I think some of us kind of feel like this happens automatically. And maybe, depending on how things are set up, it could, but you know, is it rebalancing the way that you really, truly need it to? And how easy is this to do? Tony? Like, I think in today's world, right, with so much stuff on these online portals, you probably can go rebalance some of this stuff yourself pretty easily. If you know what you're   Tony Mauro  07:07 doing. Yeah, yeah, if you know what you're doing, you definitely can, you know, it's, it's wise to, you know, make sure that your your rebalance strategy fits your needs, rather than just a general, you know, 60% or 15%. Yeah, you know, in in each type of fund or investment, because what happens is, again, in the investment, world rebalancing, that's kind of some, some, maybe lingo that people don't understand, but what happens is, if you've got your money, you know, diversified in different types of sectors, or, you know, asset classes, some do very well and others don't. And so then you get out of balance, meaning that you might have too much in one sector or asset class, because it did so well. And you want to rebalance that. So in other words, you know, you've kind of taken advantage of, you know, the old, the real thing, you know, buying high and selling low is, you know, you want to rebalance and keep your same percentages, so that based on, you know, whatever your plan is, it doesn't get too out of whack, because we've had it too, or some people will come in they haven't rebalanced for years, and all of a sudden, they have much, much more exposure to, you know, higher risk type of operator investments. And, and they're nearing retirement. And so, you know, luckily, in the cases I've seen, nothing bad has happened, but it could before you get it rebalanced. Sure.   Marc Killian  08:26 Yeah, definitely. So, again, get it done, you know, talk to your advisor, this is something that can be pretty quick. If you're using an online portal, you probably could go in there and make a couple changes and, or even just look at the automation is there to a lot of times, you know, there's I think there's like even checkboxes to automate for rebate is Yeah, yeah,   Tony Mauro  08:43 a lot. A lot of portfolios now, especially if they're using individual fund managers will rebalance automatically. It's their job to go in and do it, you know, rather than having to have you worry about doing it. So if that's available, it's worth looking at. Okay.   Marc Killian  08:56 All right. Number nine, are you under estimating your proper emergency fund? Now, when we did the one last time, right, we kind of framed the conversation on, the first one was keeping the right amount of cash. And we kind of talked about that from a standpoint of maybe being retired, right, just having some cash on hand, I think the emergency funds side of this conversation, you could kind of maybe make the argument that this is pretty similar. But let's talk about this one, if you're still working if you're a pre retiree, right, so understanding your proper emergency fund balance, if you're a pre retiree, in case you do lose your job, especially with a lot of the things that are happening here as the years winding down, you know, there's still a lot of talk that 2024 is gonna be a fairly rough year and businesses have been cutting, you know, cutting people already, right. So you want to make sure you got that emergency fund set, in case, you know, you got to float yourself for a couple of months.   Tony Mauro  09:43 Yeah. And generally, in the financial planning realm, you know, the ego out and Google things and you're gonna get a lot of different answers, but kind of the standard is, you know, three to six months of your monthly living expenses, and that's a good start, but I Do you think you need to take it a step further as work with your advisor on truly what your, you know, lifestyle is and what your expenses are, because maybe you want to up that a little bit, maybe you've underestimated just how much that really is. So six months, you know, what you thought might have been doable might be Ooh, boy, you know, that's a lot to try to try to get to, I still think you should shoot for it. But like you say, in the corporate world, especially with with cuts and things like that you never know, when you could possibly be out of a job. And you know, how hard it is to find a new one. I mean, generally, these days everybody's looking for looking for employees, but that doesn't mean you know, you're going to just grab something real quick. And so I think it's a lot easier to, you know, to figure this out. And I, we asked everybody at tax time, even our retail tax clients, and very, very few even have one, number one, we talked about that last time, but once you have one, you gotta be able to fund it. And you gotta be able to adjust it as your as your lifestyle changes,   Marc Killian  11:00 for sure. Yeah, I mean, think about the different lessons we've learned over over the last few years, right, with the COVID situation, people getting locked out of work and whatnot, you know, and having to have some money to float and get by. So if you're still working and getting good idea, rule of thumb, sure a three month thing is is a great place to start with the rule of thumb rule of thumb, but just also do some a little bit extra digging, just to make sure that that is the right amount for you. Like you said, you can shoot for six, that's even better. So yeah, absolutely. All right, final one here, number 10. automate your savings. We just talked about automation a little bit with the portfolio, but automating the savings, right? So an easy win to get yourself where you want to be. I just what was this I just saw something the other day, Tony, where somebody said, I am blown away by the fact that, you know that if I over the course of time, if I've saved like $100,000, you know, from from a long, long period of time starting younger, that it can easily turn into a million by the time I'm older due to compounding, right. And so it's the idea of, you know, consistently putting money away all through our life, for our retirement well on all these automated things we have now can really help that along as well. So if you're still working, pre retiree, or even some, you know, share this message in a lot of our audiences, you typically, you know, retirees and pre retirees but share it with your grandkids too, right? Hey, automate those savings, you're out in the workforce now, start automating this stuff, and you'd be surprised what happens when you get older.   Tony Mauro  12:20 Yeah, it really is true. And with with today, especially with the technology to be able to do this fairly easily. And you're never gonna amazes me, you're never gonna never, never miss it, you got to learn to live without it. We're such a society, at least in America, you know, want want want everything. Right, that delayed satisfaction, I   Marc Killian  12:40 just I that was almost like, Charlie is almost like Charlie Brown's teacher, right there, you see, wow,   Tony Mauro  12:45 yeah, we just want want, and I'm reading a book, it has to do with physical activity and whatnot. But it's a great saying, and you can apply it here, really, to any of these, and that is that, you know, when you make hard choices, life becomes easy. When you make easy choices, life's can get very hard, which means, you know, in the text of, you know, you have to be able to do some of these things, which seem hard, they're really not, but it takes some discipline, it takes some delayed satisfaction, which is, you know, saving, number one is that, but automating it will help you learn to live without it. And, you know, you forget about it, you know, and then the next thing you know, you know, 3040 years go by, and all of a sudden life is easy for you. And whereas if you don't do this, and as you know, you know, most of us, you get your paycheck, you've got bills to pay, and then you pay your bills, and then you always pay yourself last. And that's exactly the wrong thing to do. This forces you to pay yourself first. And I can't stress that enough, whether it's through your paycheck with with your retirement plan, or even outside of that, it's pretty easy to set up any type of investment to just go into a bank account or savings and, or whatever you tell it to pull out, you know, and put it in the investment as you go. I mean, nobody's doing it for us, right. And it's right, very few of us have have those, those pension plans anymore, so it's up to us. So we've definitely got to try to take care of   Marc Killian  14:12 And then wonder if you can automate this stuff, and like I said, you're never gonna see it, then great. And most again, most of you're still working 401 K plans and things of that nature. And you can certainly, obviously, automate this stuff. But you know, you can automate some additional savings too, especially if you're still working. And you feel like you're behind and we've talked many times about little things like the ketchup contributions and various different things. So you know, if you're in a position where you can put a little extra way, there's nothing wrong with feathering the nest for later on down the way right,   Tony Mauro  14:39 that's right, especially just like the last one just talk about automate the emergency fund get it got a little money you know, going in every single month, and again, you won't miss it and then all of a sudden that's that's kind of on autopilot and hey, you know, before long then now you have what you need.   Marc Killian  14:54 Exactly. That's a great point to automate that. That urgency fun, good stuff. All right. Well, Tony, thank you, my friend for hanging out with me. Thanks for hanging out with me all year long as we've gone through is hopefully hopefully shared right some useful nuggets of information. Yeah, the listeners. And of course if you haven't subscribed or you have and you know somebody else who might could benefit from you know the podcast and picking up some, you know some useful tidbits along the way, let them know that they can subscribe to plan with a tax man on Apple, Google Spotify and whatever platform you like using, just type that into the search box or have them go by and we'll give them this website right here. You're planning proz.com That's your planning proz.com where you can find a lot of good tools, tips and resources. Stop by there yourself if you're not already working with Tony and check out some things there. And don't forget to subscribe to us on the podcast as well. And that way you can catch future episodes as well as check out some past episodes and we'll be back with new episodes in 2024, which is really weird to say, Tony,   Tony Mauro  15:52 I know Yeah, I'm looking forward to it and hopefully everybody else's to I've enjoyed the year and hope everybody has a great Christmas.   Marc Killian  16:00 Yeah, indeed have a great holiday season all the way across the board. And Tony and I will be back in January here on a plan with the taxman.   Walter Storholt  16:16 Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency  

It's important to eventually get a comprehensive financial plan for yourself, but sometimes even just a few minor adjustments in your portfolio can make a big difference. Let's discuss a few easy places to start...   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian  00:00 It's important to eventually get a comprehensive financial plan for yourself. But sometimes just a few minor adjustments in the portfolio can go a long way. This week on the podcast easy wins in personal finance with Tony Morrow. Look up in the sky. It's a bird.   Announcer 2  00:15 It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:30 Hey, everybody, welcome in to plan but the tax man with Tony Morrow and myself here to talk easy wins in personal finance. With Tony we're gonna get into it. We're gonna make this a two parter for the month of December, as we're wrapping up the year here. So we're gonna go through a few pieces this week on the podcast. And then we'll do the rest of them about a week or so before Christmas. So we will share a few nuggets of information with you guys. As we're winding down the year, Tony, my friend, what's going on? How are you this week,   Tony Mauro  00:57 I'm doing wonderful, you know, getting ready for winter and getting ready for Christmas.   Marc Killian  01:02 Now doing pretty good and pretty much the same thing. It'll be it'll be here in a hot flash, we you know, it's got about three weeks to go at the time we're dropping this podcast, but you know, that'll that'll go by in the blink of an eye. So make sure you get all your stuff done and ready because it'll I'm sure it's gonna be goofy out there to people running around crazy. So keep your head on a swivel. That's for sure. I get this week I got some, like I said, I guess some easy wins for us, Tony, I want to go through a couple of things here. Just give some people some places to think about things where they can make little tweaks. Sometimes, folks think, Oh, I gotta go see a financial professional or I got to talk to a financial person. That's gonna be this major pain is hefty overhaul? You know, sometimes it's just little things, right? So let's talk about the little things like cash. Let's start with cash. Cash, is King cash King this time of the year, right? We tend to spend a little bit more cash, maybe we've been piling it up. And so yeah, maybe it's dwindling down for the holiday season. But if you do have some piling up, you know, just be careful where you got it. Right. Don't Don't let it sit there and be too lazy, especially with the considering the fact that the times that we're in right now, it's only when maybe a money market for a smaller amount for short term, or even a CD could be a good option versus what it has been versus just leaving it in the savings account. It's   Tony Mauro  02:13 because the savings accounts are still doing pitiful, right? Things counts and checking accounts. Yeah, really awful. Nothing, right. But so these are like a like a 12 or an 18 month might be okay. I just saw it, you know, and for years, you know, from our end of it, you know, for people that are looking for fixed income, you know that FDIC insurance, you know, we've had to say, hey, look, it's terrible, you know, you're not going to be able to live now all of a sudden, I mean, I just saw one in the paper on Sunday, 5.35, for 1718 months, something like that. But the point there, though, is, this happens more with my retiree clients, my dad being one of them, he'll stockpile a lot of cash in his checking account. Next thing, you know, he's got $100,000 in his checking account, you know, and it's paying zero. So we have to try to convince those types, that, hey, you know, we're not saying take it all out and invest it, we're just saying, let's put it to work for you. Maybe you know, 60 70,000 In his case, and still remain very safe and whatnot. So even if you're working, you know, I never advocate having tons and tons of money just sitting in the checking. Now a lot of people will say, Well, I'm saving that for a rainy day, well, then that should be in a rainy day fund, that should not be in your operating account. You know, you're just like we do with businesses. We call it the OP X, you know, don't don't just let that money sit there and make it work for you a little bit, even if it's money market rates, you know, yeah, they're not   Marc Killian  03:36 bad start to add up over time. Yeah, yeah. Yeah, for sure. And we'll kind of keep this in a different context. Because all my list also is an emergency fund. So we'll talk about this cash, the cash amount, maybe from the retirement standpoint, because you're not really, you know, the emergency fund conversations a little bit different when you're retired, is it's all coming in, right. But if you're still working, or you're retired only, again, you know, sometimes it just makes you feel good to have $100,000 in cash sitting in the savings account. But is it really the best thing for your portfolio for your plan? When it's just not doing it? It's not it's lazy. It's not doing a whole lot. We don't want lazy money. So   Tony Mauro  04:12 we don't want that. No, and you gotta get clients over the fact that we still have the money. It's just a different account now. Yeah. And it's a lot easier for them if they can see it, because a lot   Marc Killian  04:23 of money markets liquid, right, versus like a CD where you're maybe tied up for 12 months or something a little different. There will differ,   Tony Mauro  04:29 you know, money markets, very liquid, you know, CDs, even if I mean, they're not as liquid, but you're not going to get really hurt too much. If you have to get out early. But yeah, there's a little bit difference in liquidity there. All right.   Marc Killian  04:41 All right. Good to know. All right, number two, cleaning up old life insurance policies. So again, this is, you know, this is an easy win, right? So if you got got an old life insurance policy sitting there that you've had for 20 years, it might be worth taking a look to see if you can get better coverage at a cheaper rate.   Tony Mauro  04:55 Yeah, even though you know, you're much older maybe you know, Because the rates have changed a lot in this area over the last 2025 years. Now, I think it's a good idea to review your policies like we were talking on the last episode as part of your year end plan, but you should clean some of these up. Because one, you may have bought a an older policy that you don't need any more. Or like you were saying, you may be able to get more coverage or the same amount of coverage for a lot less, and extend out that term. If you're, you know, if you've got term insurance, but even the whole lifers in the universal policies have changed, you might be able to roll that into it, you know, whatever cash value, you may have, roll that into a newer policy with better benefits. And so yeah, I wouldn't overlook that, for sure. It's pretty easy.   Marc Killian  05:41 Now think about TVs nowadays, right? You know, TVs are, they're so throwaway, right? You know, the prices are so far down, that if something happens to one, you know, you just go and replace it. And they're not that expensive, versus like our old ones from the 70s 80s or 90s. Right? Where it's like a piece of furniture. Yeah, these furniture had weighed 500 pounds. Yeah, and you'd have to probably service it before you'd replace it right? Well, nowadays, replace it. So before you throw it out, you know, double check those old life insurance policies and stuff like that, clean those up. Liban speaking of cleaning up, number three, cleaning up and consolidating old 401 Ks, you know, if you've got one or two of those, from an old job, it's gonna not only make your life a little happier, but also your financial professional, clean that stuff up, put   Tony Mauro  06:22 them together. Yeah, clean it up, it's easy to do it's paperwork, it takes a little time, I've seen people, as many as like five or six of these, you know, bouncing around, they get statements from different, you know, the, the person is bouncing around over the years, you know, and then next thing, you know, they've got all of these different 401, K's with small balances, you can easily consolidate those either in possibly your new company's 401k. Or if nothing else, a rollover IRA and get it all in one spot. Yeah, make it a little easier to monitor and have more choices. Really?   Marc Killian  06:53 Yeah, tons. And again, it's worth talking to your financial pro about what you know, like, what's the best strategy for doing that and everything and getting it put together. But it is pretty easy to do. And it will give you just a lot more options. So consider doing that as well. Number four reconsider that that managed account you may have may not have a lot of management going on. So if right, for example, Tony, if you're working with someone who's got you into mutual funds, for example, and it's just been that way for 10 years, well, there's not a lot of management happening there, they just kind of let it be right. And maybe there's some better options.   Tony Mauro  07:26 Yeah, and I think they're the key is, is you've got to have a good relationship with your advisor, and they have to be doing something for the management fee, even if they're not changing investments, which, you know, sometimes we're in, you know, a basket of mutual funds, that we tend to rebalance. And so we're at least rebalancing, number one. And number two is we're meeting with the clients four times a year, and then that last meeting, you know, making revisions to the plan, because that's really what you're paying for is trying to keep that advisor or coach, if you will keep a new on track, right. If you're not getting that whether it's, you know, it's sometimes you're right, you need goals have changed, risks have changed, we need to reposition a little bit. But if you're not getting any of that, well, then you're really ended up paying for something for you. No, no, no real value added. Exactly.   Marc Killian  08:19 is speaking to the mutual funds. Tony, my fifth one on here, that will do five for this week, and the likes that we'll do the remaining for the next podcast. But it is Ricans, it's considering replacing those high expense mutual funds, because that is typically the conversation piece. I just saw something a couple of weeks ago, I think it was from New York Times, but I'm not 100% talking about the death of the mutual fund. And so while they don't think they're gonna go away anytime soon, because there's so much money in there from a you know, especially I mean, the institutional thing, but ETFs really have just, you know, clearly taken over in this space over the last 20 years. And just about every advisor, I know really talks more to their clients about ETFs versus mutual funds for a myriad of reasons. Can you kind of break that down a little bit for us?   Tony Mauro  09:04 Well, we do two, we're in that that camp, I mean, most of you know, the funds that we use, you know, our ETFs are a variation of them. You know, Vanguard is a big family, the real thing there is, and I love mutual funds from an advisor standpoint, don't get me wrong. But if you can take different ETFs and get the same diversification, you know, you're basically mirroring the returns and or losses of those particular indexes. And most of the time, the studies have shown that the best minds can't outperform the market consistently year in year out and they lag a little bit. And then their manager fees tend to drag down the returns a little bit. You're talking about the expense ratios and the fee for management. Right, right. And the next thing you know, you're you're a little bit less, and then you've got an advisor maybe in their way to half or 1%. And so, you know it does it drags down the return heard. So we try to, you know, use them. Because basically, if they're paying us a half to 1%, for, like we just talked about, you know, for management and help, we want to keep those other fees as low as possible. And you could do that with ETFs. Now, I could see mutual funds. You're right. I   Marc Killian  10:18 mean, they've got so much money in them that they're not going to go away. But I think more and more advisors at least, and even people doing it on their own right are starting to understand, hey, this is a real option. Yeah, it seems like it's more in the institutional space for a lot of folks. Because ETS, I mean, they trade like a stock, right? I mean, so you're not waiting. We're not waiting till the end of the day before, you know, the total information. And it changes like a mutual fund. The fees are certainly the conversation piece for many people, that typically tend to be a significantly lower when working with an ETF. And it's just technology change, right? I mean, mutual funds were created in the 1920s, you know, and it took till the 1990s, before two ETFs came along, and it could it really took that technology boom, it to create the ETF. So I mean, mutual funds have been great for a very long time. But if there's a better option out there, again, to the point of this conversation, easy wins, it may be worth it to take, you know, to rethink those high expense mutual funds, right? And is that something that you guys do like when you you're doing a review, somebody's coming in new for the first time and you're going through their portfolio portfolio, one of the things you're looking at is fees and stuff and like how to, you know, evaluate and get the best value there? We do   Tony Mauro  11:27 when somebody is coming in new we that's what we look at, we don't really focus on, on returns. And that sounds kind of counterintuitive. But we're like everybody else, you know, we're not doing this, right. Yeah, we're not chasing that. We're we want to get the best return for the client based on their risk portfolio, or risk tolerance and their tax, you know, preference.   Marc Killian  11:50 Yeah. Does that mean tax efficiency, that's going to be next on our list. But that was, I would say to that point, right? fees, and taxes are usually where you guys make, you know, that's where you guys really earn your keep along with, I think the behavioral management of it, because that's where somebody will tend to lose our money.   Tony Mauro  12:06 It does, you know, and it's, I remember back when, when mutual funds you to buy a mutual fund, you know, you paid an 8% to load, as they call it, you know, to go into them. I remember those days. Yeah. And that if we can keep fees, you know, as much as possibly as low as possible. I think, you know, again, at the end of the day, just only going to help your portfolio. And that's, that's what you're paying us to do, right? Yes. Is that's part of it. Yeah,   Marc Killian  12:33 for sure. All right. Well, there you go. So there's the first five of our easy wins in personal finance, some things to certainly ponder there. And as I mentioned it, stop the tax. And we'll talk about that on the next half when we come back a little later in December and pick up the final pieces of this conversation to wind down the year. So don't forget to subscribe to us on whatever podcasting app you like using Apple or Spotify, or now Google, I think, is merged everything. So it's all under the YouTube banner. But either way, you know, you've got all that stuff typically pre installed on your phone. So whichever one you like to use, just type in plan with the tax man in the search box, and add to your podcasting or streaming list of things to check out. And of course, Tony is a CPA and a CFP. And an EA was 20. Well, actually close to 30 years now. Right, Tony? That cost? Yeah, I've experienced doing that, sir. There you go. So if you need some help, they are certainly here to help at tax Dr. Inc. You can find them online at your planning proz.com. That is your planning proz.com where you can also find the links for the podcast of as well. So a lot of good tools, tips and resources there, go check them out and see if they can help you with your situation. You're planning proz.com All right, my friend. Thanks for hanging out. Thanks for running through these first five with me. And I'll talk to you again in a couple of weeks just before Christmas, and we'll do the other half. All right. Well, sounds good. And   Tony Mauro  13:51 we'll look forward to talking to you then.   Marc Killian  13:52 All right, we'll see you next time. We'll hang out with Tony Morrow right here on plan with the tax man with Tony Morrow from tax doctoring.   Walter Storholt  14:05 Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a VAT tax advisory services insurance services offered through an event tax affiliated Insurance Agency  

Join us for a thoughtful episode where we unpack our 2023 edition of key year-end planning strategies for those nearing or embracing their retirement years. We'll explore the nuances of optimizing your investment portfolio, safeguarding your assets, and ensuring a stable, rewarding lifestyle in the years to come. Together, we'll navigate through essential topics like managing RMDs, exploring tax-saving opportunities, and even touching on the often-overlooked emotional aspects of this pivotal life transition.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Marc Killian  00:00 Just a thoughtful episode this week here where we unpack our 2023 addition of key year in planning strategies for those nearing or embracing their retirement years. That's up on the docket this week on plan with the tax man for end of year planning for 2023. Look up in the sky. It's a bird. It's a plane.   Announcer 2  00:19 No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man. Hey, everybody,   Marc Killian  00:33 welcome into the podcast. It's playing with the tax man with Tony Mauro and myself here to talk investing, finance, retirement and end of the year conversation. We got some things to go through this week, here on the podcast that you might want to ask your advisor about or reach out to your financial professional about if you're not already working with Tony and his team. Certainly something to have on your radar. So we're gonna dive in lost a cover this week on the show. What's going on my friend, how you doing? I'm doing well. How about you hanging in there doing pretty well, you and I are just chatting. We're taping this a couple of days before Thanksgiving. So Happy Thanksgiving to you a bit early. You'll be we'll be celebrating later this week. So hopefully all our listeners have a good Thanksgiving as well. That's   Tony Mauro  01:12 correct. Yeah. And it's not, you know, we're getting a lot of things on the docket, because tax season will be here. Before we know everybody's you know, focused on the holidays. But season is upon us.   Marc Killian  01:25 That's right. It'll fly by right. I mean, Thanksgivings in a couple of days, like I just mentioned, and the next thing you know, it's Christmas, and then boom, the new year. And then Hello, 24. Right. So dry. Well, let's get into some stuff. And we'll talk about it. And we'll try to keep our food conversation to a minimum. So we don't get hungry before everybody can feast on the makes themselves super full coming later on this week. We'll get into some good stuff here on this side of the thing on the side of the coin. Let's talk about general Planning and Investment Strategies. Let's start there, Tony, what a cut what's a couple items that folks might want to have on their end of year checklist in this arena? Well, I   Tony Mauro  02:00 think the first thing is, you know, as we're taping this, there's still time for this is to look at this kind of more tax planning, but look at possibly increasing or maxing out your contributions to your retirement plans. If of course you're working, because that is going to save you some tax dollars. And you know, obviously, it's going to get you a little closer to that retirement savings goals. So that's when we talk to a lot of people about this time of year, especially our business owners even, you know, they've got plans that they haven't put maybe as much in as they could, and they're looking for tax deduction. And that's a great way to do it. That's that's one thing. The other thing we look at with more of our individuals, but really everybody is at the end of the year, generally, we try to do a lot of rebalancing of our clients portfolios, along with looking at you know, where they're at on the risk spectrum. And that sounds complicated, but it really isn't, it's basically just taking a look at what grew what didn't and keeping, you know, adjusting things to keep the same balance in the portfolio, as we had at the start of the year and gotten the theory there is really is you know, you're you're taking and keeping that balance the same and the things that underperformed, you know, you're gonna rebalance and put some stuff in there because not everything generally goes up at the same time. And it's a good way to, you know, make sure that we're staying on goal. But I think the bigger thing we tried to do is go back through our risk assessment software. And, you know, we make our clients basically kind of re answer a few easy risk questions, if something's changed in their life, you know, it could be something big. And maybe maybe we need to adjust some things on the risk spectrum as well. Yeah,   Marc Killian  03:43 that's great point for sure. So rebalancing, and risk is one maxing out contributions is another when we're thinking about a couple of general planning ideas for the end of the year. And I think you started to touch on this for a second when you mentioned taxes. So let's talk about taxes. Next, obviously, tax loss harvesting this time of the year, we started thinking about these things as the years winding down going into next year, correct?   Tony Mauro  04:04 That's correct. Yeah. And a lot of people tend to overlook that. And a lot of people don't like to sell or get out of things that they're down. I mean, harvesting really is just about, you know, taking things that maybe don't make sense in the portfolio or, you know, maybe being down and selling those at a loss to offset gains, is really all that is, and it's a great strategy. It's easy to do. You just got to get by the fact that, you know, well, I don't want to I don't want to admit that it's down and I want to hold on to it forever. Because you know, who knows, right? That's one thing. You know, I think it's it's good. There's also a lot of tax credits coming on the book, the energy credits are coming back. That's more of a tax related issue rather than than financial, but it does help. And there's still the Roth conversions, you know, that you can make and, you know, for a lot of people I particularly liked those Roth conversions, even the backdoor IRAs as well, to get some money out. Have the IOU that you're going to owe Uncle Sam, you know, eventually.   Marc Killian  05:03 Yeah, you're right, exactly. And speaking of Uncle Sam, and owing them also RMDs, right. So as the years winding down, don't forget, especially if you have not started, if you're already in the pipeline of doing RMDs, you're pretty much groovy, right? This is going to count this is going to happen. But if you haven't started yet, do not forget it, especially since the rule change. And it's 73. Now, right?   05:24 Yes, it's 73. And so you definitely want to make sure that you get to your, your advisor, and make sure that they get those started. So you don't have to deal with a potential penalty letter and fighting with the IRS and all of that, right. And with the winding down telling us what 1231 is the deadline, but let's be honest, right, right. Places are closing people are off. There's, you know, a couple of weeks, actually, yeah, Thanksgiving week, Christmas week, so   Marc Killian  05:48 on and so forth. Exactly. I   Tony Mauro  05:50 mean, you know, with with everybody, it seems like yeah, not not a lot gets done in December. I mean, it's a little VIP, right? It's weird here, because you think like now after, like, 15/17. Boy, it's really hard to get things done. And if you're going to do RMDs, you want to make sure that that's set up properly, not wait until the last minute and risking it. But if you're just gonna reach out to your advisor, you know, we get a report, of course, for everybody that's turning 73. So we kind of know we reach out to them. But if your advisor hasn't reached out to you, and you're going to be turning, make sure you talk about that.   Marc Killian  06:25 Yeah, definitely. Okay. Because again, it's it's a hefty penalty if you don't do it. So if you've not started, make sure you're having that conversation. If it's the first one. Tony, you can continue this on technically you can your first RMD you can pay it into the next year. Right. You've got that very first time. I think it's until April of next year, but just be cognizant that that means you have to do to next year end to Yeah, so   Tony Mauro  06:48 you can kick the can down the road a bit. But yes, and you're going to have that one year where you're going to have to do two and depending on how much you need to take out. Right. It can be heavier. Yeah. Yeah. Could be hefty. Yeah. I   Marc Killian  06:59 mean, let's say let's say, Yeah, let's say hypothetically, Tony, you got a million dollar for a one or an IRA. And you've got to pull under the calculations kind of wonky. But for keeping it simple for folks, it tends to be somewhere between around right around three and a half percent or so that first time it grows, obviously, based on mortality tables, but I mean, let's let's, you know, that's 35 grand, right? And if you had to do that twice, like in the next calendar year, that could be that could kick you up a tax bracket. So just be careful. It could Yeah, absolutely. Okay. So good stuff to remember, for the end of the year, make sure you're having that conversation about your RMDs. Anything on insurance or health care or health care planning sign, Tony,   Tony Mauro  07:38 the other thing I would say there, I mean, there's a lot you could go into, I would just double check, again, with your advisor, hopefully you're talking about this just kind of reviewing, what you have is Does it still make sense? A good thing is to check beneficiaries on insurance policies. I actually was going through my my own this was actually on my retirement accounts, just double checking as part of my own due diligence every year when checklist and I found one that I did not have my son on as a contingent, you know, so I added him. So, you know, there's that kind of stuff, you want to make sure that your coverages are still complete, especially if you're on Medicare, and things like that. And there's not something you might need. I always tell people, it's a tough talk, but to evaluate, potentially, if you're still able and willing to look at the needs for long term care policy for that potential, you know, that you may end up in some sort of assisted living or full blown nursing care. Yeah, I mean, there's a good chance of that, right.   Marc Killian  08:37 I mean, the numbers are what they are, we're living longer, it's adding more to it. So certainly worth having a conversation. And during the holiday season, I mean, maybe not the most fun of conversations, but when everybody's together, you know, you know, have some of those chats, right? So to kind of bring some of those things out, especially if you've got elderly parents. I mean, I'm, you know, I'm 52 Tony and my mom's 82. And, you know, those are conversations, we start having more now versus various little things like that, right? Because it's just part of life, right? So it's part of life,   Tony Mauro  09:05 and I'm sitting down with my own son this this Christmas, because believe it or not, you know, I've got to think a little bit about succession planning. I mean, I'm not going to be around forever. And I gotta be thinking about my clients that if if something happened to me early, you know, who's gonna take care of the clients, I got to make sure that that's done. And so, again, that's a little more on the business, but kind of a long,   Marc Killian  09:31 extended family though, right? Yeah. Yep. So you're looking out for your clients, aka extended family. That's pretty cool, right? I mean, so businesses want to make sure that's another thing too, when you're working with a finance professional, you know, the the industry is really aged right? About that for years. They're starting to be younger people coming into it. But if you know if you're working with an elder, elderly advisor, make sure they get a succession plan as well so that your something happens to him. You know, my CPA was that way. He kept telling only for a couple of years. He's like, Yeah, I'm getting ready to get ready to retire. And but don't worry, I've got it covered right for someone else to come in. And then of course, it was a nice transition period. And if you're listening to the podcast, and you're wondering why I talked to Tony, every week or every month, twice a month, and he don't use him as my CPA, it's only because I don't live nearby. Oh, yeah. I'm on the other side of the country. But yeah, you know what, it's one of those things, but if you need a CPA, hey, Tony's here to help. As always, don't forget, he's a CFP, and a CPA. So he's dealing with both sides of the aisle. So if you got some questions, need some help, as always, check with a qualified professional before you take any action. And Tony is here to help at your planning proz.com. That's your planning proz.com? What about income and lifestyle? Obviously, a lot of those things we just talked about, Tony are things you're going to need to talk with your professional with. But income and lifestyle is probably some places where we can make a few changes ourselves, without having to get too crazy into it. I mean, I just think about we were talking about Thanksgiving, and where we're at this time of year, and just, you know, home budgeting or whatever, people have been tightening up the belts, because inflation has been rough. I know my wife came home and said, look at the price of this turkey like she was blown away. Right? Yeah,   Tony Mauro  11:09 yeah. And I think, again, at the end of the year is, you know, we're always thinking about those New Year's resolutions, I think one of them should be as you get to the end of the year, put it on your checklist, to maybe review your budget, you know, your monthly spending, also your income, you know, that you've got coming in, and maybe more so with your advisor on. Okay, we didn't have that great of a year, maybe in the markets, are we still on track to you know, meet our goals? You know, that's just a basic, basic thing. And I think that I wish, I guess I don't think I wish I had more clients that really could say, here's how much I'm bringing in every month, here's how much I'm spending the people that are working or retired. And they don't take the time to do that. They just kind of ballpark it. But even if you're ballpark it, it's better than nothing. And I, it's a good time to review that. I also started checking, even though it's kind of a slippery slope, we could talk hours about it. My Social Security earnings statement every year, I like to look at that once a year and just see, you know, what's going on there. And, you know, I can say, there's all kinds of issues coming down the pike with that, and then nevertheless, it's a good thing to check out. Yeah,   Marc Killian  12:20 I mean, we, nobody likes the P word. I get it. When we get close to retirement, we talked about that about a million times, but you still know you have one to a certain degree, right? You don't just super go hog wild. And in with the fourth quarter, you know, holiday shopping, things of that nature, it's just good to have on your end of your checklist to make sure you're keeping it within, you know, the parameters that you set out. That's right, nothing wrong with that. Real Estate, anything there real estate or relocation? I know, obviously, you know, home prices are still high. And, you know, loan rates are still are obviously really high compared to what they had been. But anything there that in case somebody did have this on their radar, you   Tony Mauro  12:56 know, I mean, it's a big decision, you know, but for the people a little closer to retirement, you know, some of them are starting to think downsizing, you know, maybe getting into something smaller, I definitely would talk to your adviser about it. Because it all sounds good. But there are some things to consider, you know, some goods and Bad's of it? And are you really going to accomplish what you need to by doing it. So I think that's a big decision you should talk to them about because it's not as easy as just changing your budget, right? I mean, you got to get to maybe sell a place, buy a place, you get resettled, and you start scratching your head saying, Whoa, what just happened there, and I didn't really accomplish anything. And, but for certain people, it may be in the cards, and it might be something that, you know, you should look at dealing I know, I'm not I think I have myself I have too much house, it's just me and my wife. Right, right. You know, once you once you own it, it's like, well, well, I don't want to I don't want to go to something else right now. So I think there's a lot to that.   Marc Killian  13:53 Yeah, yeah. And even with the prices being higher and things right now, if it was on your you know, kind of your plan and your strategy, just make sure don't just wholesale chuck it just because you know, you're you're here in the you know, home rates are 8% or whatever, right? Have the conversation, look at the numbers because you to your point about downsizing, you may make enough on the sale of your current place, depending on what kind of place you're moving into, you know, that may not be that big a difference. And then of course, you can always refi later on. So, again, just don't wholesale, check it as the at the end of the year here. If it was already on your you're on your radar, at least until you run the numbers again. So we're just wrapping that conversation. All right. From a technology standpoint, Tony? Probably not a lot here. But I think, again, end of the year, holiday shopping, the scammers are out in Megaforce. Right? So be real Cognizant here too, right.   Tony Mauro  14:44 I would say be very, very cognizant, you know, here because it's only getting worse. We see it so much with our clients, and in people scamming on payroll people scamming with credit cards. I've had several clients this year that have had that happened to them. You know, I think we still have a lot of people out there who are writing all their passwords on sticky notes and put them on the back of their computer, you really need to get to some sort of higher level Password Manager, if you will. There's tons of them out there that I think are very good. Yeah, they're not infallible, but they're much better than what you have. And you can you can create different passwords for different sites, and not have to remember them. Just be very, very cautious. I'll give you a perfect example. Although I'm always harping on my staff on this, but I just got an email yesterday in my work email, I get this, it said from a lady's name, that, hey, I need to change my direct deposit information and my payroll account. From I think her name was Wendy Hayward, and it said owner of the tax doctor, and it's like, we don't have any any employees here of that name. Right. I'm the owner of the tax collector. And so I mean, that's a pure scam. Yeah, you know, and they come in and I just had a, we had a payroll client, we do do some payrolls for small businesses. He got scammed off of one of his employees. And our client input A scammers direct deposit information into his employees accounts. He thought it was from his employee and paid out like $500 to a scam. There's no way to get that back. So I mean, it happens to it. It's really happening in a lot. Oh, it's so guy. Yeah. Oh, I just got to be careful. Yeah,   Marc Killian  16:32 my mom about two weeks ago, sent me a message and said, Hey, Amazon said that my my prime membership was going to end. And I was like, I've never seen or it was going to end it was, you know, something with renewal or whatever. I was like, I've never seen them, email me about that. Come to think of it. And that was like, can be a scam. Don't Don't, don't click on anything. If you're worried about it, contact them directly, right? And just make sure everything's groovy. So she did. And of course, it turned out to be a scam. And about the same time she messaged me to tell me that yeah, it was a scam. I had gotten a similar email, like the day before. And I was like, Yep, they're just out there trying to say, Oh, your prime memberships up. So click here to renew and, you know, the Nick just tried to get your information. So never click on anything, when you get those emails, even if it looks pretty legit, folks, if you're not quite 100%? Sure, just go directly to the horse's mouth and checking to make sure that sort of did reach out to you if so. All right, final one general wealth considerations, or excuse me, General, generational, say that three types, generational wealth considerations, anything to explore here, I know, we were talking about RMDs earlier, this could be where maybe the QCD comes into play for people like the qualifying charitable donation.   Tony Mauro  17:38 It does, you know, I think as you age, this becomes more and more important, you know, because you're seeing the potential and it can be anything about, you know, talking to your advisor, about maybe gifting you know, to your heirs, if that's what you want to do, I definitely think on a legal and estate planning standpoint, you should at least pull out your wills and some of your your documents, your legal documents, make sure they're in order at least once a year and make sure you know where they're at. And that your attorney has copies, you got the financial power of attorneys, that advanced directives, all of that kind of stuff. Because stuff does change, you know, and then you can easily update it and put that on the list for the next year, as is what I'll say. Yeah. And   Marc Killian  18:18 you just you just mentioned that yourself, right? People make you know, you had that conversation about your with your son, right, you had that own your own issue there. So and you do this all the time, so it's easy to forget. So bring it up, remind you know, your professional your visor, and don't forget to change them on all of the things to your point, right? There's so many little things you can we tend to think about it like what the will or something like that. But don't forget, there's all these little accounts that you need to change your beneficiaries on. If something changed. That's correct. Yeah. Yeah.   Tony Mauro  18:43 I mean, as long as you got a checklist, and you're getting better and better at it each year, and adding stuff to it, then you're going to be in really good shape. It's just you got to go through the exercise each year and start hitting some of this stuff. Hopefully, the advisors got a list for you, you know, and you can, you can basically just answer their questions, you know, and if there's something missing, and you fix it, it's and you move on.   Marc Killian  19:05 Yeah, absolutely. So if you got some questions, you need some help, definitely reach out to Tony and have a conversation for some end of the year planning items to consider. And of course, you can find them online at your planning proz.com That's your planning proz.com He has been helping folks for 30 years get two and three retirement. He's a CPA and a CFP, as well as an EA so reach out to them have a conversation of your own at tax Doctor Inc. And of course you can you can find them online at your planning proz.com Hit the subscribe button for Apple, Google or Spotify. Whichever podcasting app you'd like to use the plan with the taxman and you get new episodes as they come out. Tony my friend thanks for hanging out buddy. Have yourself a great Thanksgiving. And I look forward to talking to you in December. All right, you do the same Have a great one. Yes sir. And we'll catch you next time right here on playing with the text me and Happy Holidays everybody.   Walter Storholt  19:59 Security is offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency

“Learn from the mistakes of others. You can't live long enough to make them all yourself.” – Eleanor Roosevelt… Ever wish you could foresee financial missteps before they happen? In today's episode, explore some real-life stories of regret and arm yourself with the essential dos and don'ts to ensure your money works for you, not against you.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Marc Killian  00:00 Learn from the mistakes of others because you can't live long enough to make them all yourself a quote from Eleanor Roosevelt. And certainly we've all been in that place before where we wish we could see something coming down the road before we make that mistake and step into it. And that's what we're going to talk about this week here on plan with a tax man, we're going to share some conversation around real life stories or regrets of folks and when it comes to money, mistakes, and hopefully how to avoid them with Tony Morrow here on playing with the tax man.   00:28 Look up in the sky. It's a bird.   Announcer 2  00:30 It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man.   Marc Killian  00:45 Hey, everybody, welcome into the podcast. It is planned with the tax man with Tony Morrow and myself to talk money mistakes that you might regret and hopefully how to avoid them. So if you've got some questions, need some help reach out to Tony, he's been helping families for 27 plus years working his way towards 30 here. So been doing this a long time great resource for you to tap into. And if you've got those questions, find them online at your planning proz.com. That is your planning proz.com and get yourself a complimentary review and consultation underway with Tony and his team at tax doctoring. What's going on my friend? How are you?   Tony Mauro  01:18 I'm good. I'm enjoying the fall. And it's November. Yeah, be the holidays here before we know, I know. That's always fun time.   Marc Killian  01:26 I think October was like on. I don't know, okay. It's like us on speed dial or something that was like pure. October. Right, by right. And, and here we are into into November already. So yeah, you before you know it, the year will be over. And it's winding down fast. So yeah, it's that time of the year, right. What is one thing after the next, you know, next thing, it was Halloween, and it's gonna be Thanksgiving, man, it's gonna be Christmas, and New Year's, and boom, it's all done. So let's talk about some money mistakes. Because hey, I mean, this time of year, people also spend a little bit more too. So that can be one as well can be like a bonus one. But I'm gonna get a few I wanted to go through Tony, just share some of your experiences with some of these things and things that folks might be able to pick up some useful nuggets from here. So let's start with the IRA IRA withdrawals Say that three times fast is kind of hard, and maybe taking out money like early right. So I talked to many advisors, Tony, and a lot of them will say this, they almost all say the same thing. If you have to access some money for like an emergency, or something's going on the last place most of them recommend you do this is taking premature IRA withdrawals. Do you agree with that, and why?   Tony Mauro  02:37 I do agree with that I see it all the time, this is a big one. So I'm excited to talk about it, it's, it's definitely not a good idea to take money out of the IRA for most things, basically, you know, the easy ones are, well, you're gonna have to pay tax, and you're gonna have to pay the penalty in depending on your tax bracket that that could be big. But the bigger thing is, is what people don't think about is the last earnings. And I like to run right to the numbers, extrapolate out what they're going to take out over the next, you know, I don't know, 1015 20 years, however, however long they've got left. And say, besides all that, here's what you're going to, you know, you're going to miss out on and you're going to have to try to make this up. I have an example of a an accounting client, she makes a lot of money. She emailed me about a week ago and asked if my husband and they're in the 32% tax bracket. If my husband takes out 500,000 Out of our IRA, what kind of tax would we have? Okay, I talked to her right out of it. I said, Well, besides the big penalty, and taxes that you guys as income level, here's your 500,000. If we extrapolate that out to your 65 Here's what it would have been? How are you going to make that up? And what's this money for? And you know, what you said was, well, we're thinking about buying some rental properties. I   Marc Killian  03:54 said, but just you've got the means borrow the money, you know, and pay them off early. So because I mean, you're you're pulling it out of there, you're paying the tax, right? You're paying the penalty if you're not the right age, and you're taking it taking away the ability for that to continue to grow, right?   Tony Mauro  04:09 To tend to grow, you got to start over, right. And it's like, you know, Boy, that's a big hole to get into. Yeah, and I think people don't realize it, and I like to do that with them and try to I really strongly try to talk them out of it at the end of the day. Some of them do it. But I think part of it the penalty. You know, that's the big slap in the face right now, but the one they don't realize is now I don't have any you got to start over for retirement. I don't I don't like that at all. Yeah,   Marc Killian  04:35 yeah, it's a tough, you know, especially even when you think about the idea of, and I know there's different accounts for different rules for different accounts, but like even borrowing taking a loan against one of your retirement accounts, right? Yeah, take a loan against it. pay it back. But it's like, how often do we truly pay ourselves back on time, right, we'll find an excuse or there's a way easily for us to go well, this didn't happen. So I won't do that right now. Or and then what happens if you change jobs? While you've got that pullback, right, they treat it as a, they now treat it as a distribution, correct?   Tony Mauro  05:04 Yeah, they treat it as a distribution. I would say, you know, if I always tell people, let's stay away from the 401 K bar at   Marc Killian  05:11 all. Yeah, right, let's you have no other options. Right, exactly.   Tony Mauro  05:16 And then and then if take a loan out against the 401k, if you have that ability, rather than a withdrawal, because I just think there's too many negatives to that to make that worthwhile. Okay,   Marc Killian  05:27 fair enough. And again, so that's a money mistake that you might wind up regretting. So let's just try to avoid it. And there's a lot of options that we sometimes don't think of. And that's where a qualified Pro, like Tony can help you look at different avenues, like he just described, in ways to maybe, you know, take care of whatever the problem is that you need to access these funds for, alright, it's the number two, something called Lifestyle creep. And anybody who's ever worked on a project to home project or renovation, they're familiar with probably the term scope creep, which is the scope of the project, right? Got out of hand, like you said, Okay, we're gonna remodel this bathroom, it's gonna, we're gonna spend $5,000 on it. And the next thing, you know, you're like, Man, this is getting out of control, right? Especially if you do it yourself. And so the lifestyle creep Tony is and I know, you're familiar, this, but for our listeners, it's, you get into your, let's say, late 40s, early 50s, the kids are coming off the payroll, you're probably making the most money you've ever made. And you're starting to treat yourself a little bit, right, like, maybe you got the sports car, after all, or started to get me, you know, not necessarily waiting for full retirement, you're actually just kind of doing more things because you've got some extra income now that the kids are off the payroll. And that can be great. But just be careful that it doesn't creep out of control, right? Because there's the future you again, don't forget about future you stand and 20 years down the road waving at you going, Hey, don't spend all my money, right?   Tony Mauro  06:44 That's right. And everybody's guilty of it. And I think the biggest piece of advice I can offer it, and we've all been there. So you can't you can't change what happened yesterday, but you certainly can plan and the key word is plan, have a plan. And make sure if your lifestyle is getting out of control that you talk to an advisor about, you know, making sure that okay, I've got all my bases covered for the future you like talking about and make it as long as that's being addressed, whether it's retirement, emergency funds, some other things, and you still have some money. There's nothing wrong with you know, going out and enjoying yourselves by any means or exactly. I think the biggest thing that catches people is their lack of planning and thinking out toward the future. And that's, that's where they started getting rich   Marc Killian  07:30 indeed. And you know, you might even justify and say, hey, it's my money, I've earned it. You know, the kids are out of the house, everything said, I'm going to enjoy it while I can. Because I'm not going to necessarily wait until I'm old and feeble. Right? I've heard that said a ton of times by some friends. Yeah, that's like, okay, but old and feeble. You if you're convinced that that's happening, it's still coming and old and feeble, you is going to need money. Just to live, right? Yeah, just the same as you do right now. So just I'm not saying don't do it. I'm just simply saying, find the balance, and a good strategy and a good spending plan, whatever you want to call it, even in you're still working yours is a good idea, just so that you know that hey, I'm still paying future me a percentage, but then I'm still gonna have a little bit for this, you know, for fun now, too. That's all that's all we're asking is just to have a strategy. Yeah, yeah, have a strategy and a plan, because that is a money mistake that might bite you in the you know what, all right, number three, this one might bite a lot of people too. And we saw this get really bad for a while Tony, and it's probably still going on. And that's paying too much for the kids, you know, college education, and it comes back to bite us. We've gotten a ton of emails here on the program, where it's been, like, you know, through your website, where it's been, like, hey, I want to help my kids with college, but I don't want to sacrifice my retirement. And that's the right mindset to have. Don't sacrifice your time, but find that balance again.   Tony Mauro  08:47 It is, I think, too many 20 parents, I have some of my own family, and we all know him about and even, you know, I with my own son's education, you know, you spend a lot of money, if you're gonna pay for it for them on the education. And sometimes I get parents saying, Boy, I spent, you know, say $100,000 on my son's education. And he's not even using this degree. And, boy, I really made a mistake. I don't think it's your mistake, per se. Number one, maybe yeah, maybe you might have chose a different school or whatnot. But again, it's done. So you got to move forward. I think I hear a lot of parents to doing this. And, of course, this is all personal preference. But you know, you've got your son or daughter to 30 years old, and you're still paying for their rent or their car and their cell phone and it's all personal. So it's a tough conversation to have people because I'd like to just say, why are you doing that? You shouldn't do that. You know, because that to me, they're not gonna learn anything. They gotta learn what life's about and everything else but everybody has a really touchy opinion on this   Marc Killian  09:50 short so skin in the game. Yeah, skin in the game is not a bad idea. I think a lot of us can agree and even if you don't, even if you are your type of parents cuz I want to do everything for my kid that I can because I didn't get it or whatever. Hey, that's commendable. But do you really think I tried to frame it like this? I mean, with our daughter the same thing. It's like, you know, she got to a certain point, she was still here at home. And I was like, You have got to get off the couch and do something. Right. And she did. She's She joined the military. And she's doing great and couldn't be more proud of her. But I was like, because do you want us couch surfing on your couch when we're 65? Right? Because if we sacrifice too much for you, guess what's going to happen when you're now in your 40s. And you've got your family and you're trying to take care of the things you need. And here comes mom and dad that live on your couch or in your basement because they gave you everything they had when you were younger, right? Yeah, that's good point. It's a good point, it's a cyclical thing you got you got to find the balance. Otherwise, you're couchsurfing on their couch when you're old. And they're not going to want that any more than you are. So just be careful. Find the balance. Number four, oops, I did it again. That's Britney Spears. But I retired a bit too early, Tony. And it's costing me so longevity risk is something we've talked about many times on the program here, the longer we're on the earth, the more we're subject to different kinds of financial risk, right? tax risk, inflation risk, and so on and so forth. market risk, right? Well, if you retire early, that's even it's kind of like longevity risk on steroids. Because now we're retired even longer doesn't mean you can't retire early. But man, you really need to have a plan. If you're gonna,   Tony Mauro  11:23 you do. And it's another issue. And of course, I sound like a broken record and was saying you need to work on advisor because this is one area that if you retire early and you don't have a plan, then it could really come back and buy it. And then if you wait too long to catch it, you don't have the ability to maybe even work but I wouldn't say, you know, if you retire too early, and it's caution you work with your advisor again, you always have options, I'm sure, yeah, you're you're gonna have less soul security. And, you know, you're you might be living off savings. But if you have the ability to work or whatnot, you certainly can go back and, and work a little bit and change some things. So it's not the end of the world, if you don't let it get too far along, you know, and then yeah, you're unable to work.   Marc Killian  12:09 And that's totally fair, if you've got a strategy for it. But if you retire early, and just say, I'm living off, you know, the, you know, just gonna be living off the things that we've done. And so security, and then you realize it's not enough, yeah, your options do get a little dwindled. Yes, you can go back to work, but you're probably not getting the same exact job back and the same exact pay, right. So you know, maybe kick that one out of your head there a little bit. But just bear in mind that there's, there's a plan and an option if you have one. But if you just wing it, be careful, because you're going to have that lower level of accumulated savings, you're going to be starting to draw down those savings earlier, which means you got to live on them longer. And of course, to your point a second ago, you're taking the haircut on Social Security by taking it early, right, I just saw something somebody ran the math and was doing something the other day and said, just delaying retirement three years, like did like a huge number of difference to the retirement income was like some staggering like 40%, like, increase their chances like like 40% of reaching longevity and reaching the things that they were trying to accomplish with their plan. It was pretty staggering was pretty interesting, just three years.   Tony Mauro  13:13 So but and today with with advisors, you know, we have it as well as if we can gather a client's information about here's where they're at now, even if they're say they're in their, I don't know, late 50s, early 60s, and you know, use the software with what they have now. And basing that on, you know, if you delay it, say they want to retire 65 versus 68, or 69. And how much more money they would have. Yeah, how long that would last? And yeah, you can get that information extremely quickly. Yeah, you could   Marc Killian  13:43 run scenarios, right? You can, you can plug in a number of scenarios and go, Okay, I want to retire at 62. What happens? versus 67? Well, let's plug that stuff in and find out right, exactly, yeah. And then. Yeah, then you're armed with the information. And you can go all right, do we because what happens in many folks know this, right? Obviously, it's pretty common sense. As we go, we justify in our head, Tony, we go well, if we cut a little here and we cut a little there, we could still make this retirement early thing work. We just have to sacrifice a little bit for you know, it's like, Okay, fine. But really check in ask yourself and think about that. You want to do that before you actually put it to put pen to paper, right? You can't change it. I mean, advisors say, Hey, you want to try it live that way for a few months while you still got the job? And see how exactly, you see how it goes. Yeah, exactly. And that way you get a trial run. And you can go nude. That was a bad idea. Yeah, that's right. And you haven't made anything permanent. Alright, one more. We'll wrap it up here this week on some money, mistakes you might regret and how to avoid them. Many folks obviously frustrated with the fact that that we didn't take advantage of different kinds of tax buckets along the way. We talked on our last podcast in many times. Tony, one of the biggest things is we've been taught for years and years now to pump money in the 401k you and defer, defer defer. And that's fine. But at some point, people start to realize, oh, maybe some tax free options or some different taxable options may have been a good idea as well, right. So not just one or two income streams, but also one or two, or three, you know, kind of taxable buckets.   Tony Mauro  15:16 Yeah. And I think a lot of times people overlook, and they don't understand is the here's some terms, because it's starting to become a little bit better known. But depending on somebody's age, we talk a lot about, well, if you're not, you know, too close to retirement, you know, there are some options where we still can go back and capture some of this, we can, we can convert to Roth IRAs. And of course, they're going to pay some taxes now, but then you don't have that IOU later, you can start just contributing to a Roth IRA if you'd like. So, it's important to understand some of the ins and outs of those, especially if you've got large 401k balances, you can really do a lot with the backdoor Roth IRAs and filling up tax brackets and getting that stuff from a tax deferred bucket over to tax free bucket and makes a lot of sense. And a lot of cases. Yeah, for sure.   Marc Killian  16:08 And you know, if you're one of the things that doesn't get talked a lot about Tony, and then we'll wrap it up with this, but a lot of folks have been hearing about the conversion conversation, let's do some conversions. Let's get you know, pay the taxes now and grow it and fine. Just make sure you're doing it with money you don't need immediately, right? Because one of the things that doesn't get mentioned as often is that when you do that there is a five year hold correct. There is   Tony Mauro  16:29 a five year hold. So yeah, you got to make sure again, to not try to navigate this on your own and make a mistake, and you don't even know you made it till it's too late.   Marc Killian  16:37 So just to clarify that for folks to break it down. Let's say they converted $100,000 from a from a 401 k or a traditional IRA to a Roth. And they paid the taxes now, right? They did the conversion, they can't withdraw that 100,000 from the new Roth account for five years. That's correct. If they do they're gonna they're gonna have some issues. Okay. All right. So it's gotta be later money. So again, tax strategy, right? Just like your stock market stuff. It shouldn't you shouldn't have, you know, maybe too much in there. Depending on your age. You need now money's and later monies. And you also need that same kind of strategy with taxes, you need some maybe maybe some now taxes and some later taxes, right. So it's all a matter of having a good plan to get you to and through retirement. That's what Tony does day in, day out. For many, many years. Now a great resource to tap into. He is a CPA, a CFP, and an EA with tax, Dr. Inc. And if you need some help reach out to him. You're planning proz.com You're planning proz.com. He's got clients all over the country. But he co hosts he works out of the Iowa area and services folks right here in Iowa. But he's got clients all around. So if you need some help, and you checking out the podcast, don't forget to subscribe to us. And also reach out to him and ask him questions before you take any action on anything you hear on our show or any others see how it relates to your unique situation. So give him a call if you'd like 844-707-7381 or just stop by the website. You're planning proz.com And subscribe to plan with a tax man on Apple, Google and Spotify. Tony, thanks for hanging out, buddy. All right. We'll   Tony Mauro  18:03 see you later and have a great holiday.   Marc Killian  18:04 I always appreciate you my friend. We'll talk to you soon. I think I'll see you before right before Thanksgiving. So we'll probably do one more of these before the month ends. But you folks Yeah, have a great month and we'll see you here soon on plan with the tax man with Tony Morrow.   18:23 Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through a van tax advisory services insurance services offered through an event tax affiliated Insurance Agency

The retirement planning world is filled with plenty of advice and suggestions, but there are critical questions lurking in the shadows – the unasked, the overlooked. These are the questions that can help define the comfort and security of your retirement future. On this episode, we unearth and tackle these hidden, but essential questions about retirement. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Marc Killian  00:36 Hey, everybody, welcome into the podcast. Thanks for tuning in once again with Tony and myself as we talk investing finance and retirement here on plan with the tax man and Tony is the tax man at tax Doctor Inc, serving folks all around the area. So if you've got some questions, got some concerns, need some help? When it comes to all things with your retirement reached out to Tony, who is a CPA CFP and an EA of 27 plus years experience and a great resource for you to tap into it. You're planning proz.com? That's your planning proz.com? Tony, my friend what's going on, buddy? How are you?   Tony Mauro  01:08 I'm doing good. As we as we're taping this just kind of getting ready to wrap up the 2022 Filing Season, believe it or not so well upon the extension deadline.   Marc Killian  01:17 That's, that's so wild that is that that late, you know. Yeah. But hopefully you didn't have to struggle to hopefully, hopefully anyway.   Tony Mauro  01:25 Yeah, hopefully not. I mean, in, you know, a lot of people starting to think about, you know, you're in tax planning and next year. So this is a good, good time to talk about some of this stuff.   Marc Killian  01:34 Yeah. And, you know, I've got, we're kind of called this hidden questions or overlooked. And I think a lot of these that we're going to go through a couple of them here, Tony, I think people probably we all know a lot of this, but I think what happens is, we often tend to get our focus in one or two areas, sometimes when it comes to retirement planning, or whatever the case might be, we tend to often focus, you know, really on like this larger item, and then some of these smaller ones, while we are aware, they maybe don't get the attention that they should unless, of course, you're working with a financial professional. So let's talk about them a little bit, and just discuss it obviously, you know, as a tax practice, as that's a huge part of what you guys do as well, you know, a question might be eventually, hopefully, people realize, hey, you know, in the end, what's these tax deferred savings accounts going to actually cost me in taxes? Because at some point, you know, again, if you think about focus, it's easy to go, Well, hey, let's kick that tax burden down the road. So I don't get to deal with it for a while, but eventually, a while shows up, right? Eventually, you got to pay the piper. So   Tony Mauro  02:32 yeah, and, you know, this is the biggest question that we try to answer for people, and try to let them know that, you know, you have a partner it generally with with it with this handout, and I, you know, I we make fun of the government, because that's Uncle Sam, you know, so, you know, a lot of people don't realize that, you know, a part of this money you have, you have an IOU to the federal government. Well, in the States, maybe for that matter for   Marc Killian  02:56 this training, you know, and I think, Tony, I think we realize it, right, I think we just forget it, because if you spend 20 or 30 years, punting, you know, the tax ball, then you kind of go all the sudden one day you go, Ah, crap, right? Yeah, I forgot about then,   Tony Mauro  03:10 So what we try to do, though, is with our retirees, especially, is to let them know, if you do have tax money in tax deferred accounts, that there when you start pulling that money out, right, you know, some of it is going to be taxable. And what we try to work with them on is using other monies first, and then filling up the tax brackets that they're already in, and not jumping to the next one, because they've already got, you know, a tax issue. Let's not compound it and make it worse. And so I think that's important to work with your tax person or advisor, especially in retirement to make sure you're not just needlessly pulling money out. Yeah. So you can kind of control your tax bill a little bit, but there are, you know, for the younger people, the Roth and things like that Roth 401, K's where you're not going to have this issue, and so those will become attractive. But yeah, that's a whole nother conversation. Yeah,   Marc Killian  03:58 for sure. And, you know, if we kind of set this framework around the hypothetical numbers, we'll just go with the easy million dollar math, you know, million dollars in a 401. K, and we can kind of use this for a couple of these questions here. Yeah, you know, you sit there and say, and I get it, it's sexy. It's like, who I'm a millionaire, I can't wait to say that, or whatever. And you're not to your point, because you're really more like a 700,000 year or so. Because, you know, you gotta give Uncle Sam bell 30%, you know, or roughly right, depending on every situation can be different. So you don't really have the million and that leads to my second question, which is, you know, how much can I withdrawal from my savings each year? And if we're using that same million dollar analogy, Tony, a lot of people, they they hear the 4% rule, they think, Hey, that's a good place to start the conversation. And it can be it's a good place to start the chat. But that's, you know, if you go with 4%, you're talking about 40 grand a year off the million but as we just said, you may not have a full million because you got to still pay the taxes because you've been deferring. So now you got what 700 grand that's what 28,000 A year right. So I mean, it just starts To change all the numbers,   Tony Mauro  05:01 it does. And what we look at it when we're working with people is we either use the four, sometimes 5% rule, and just using the 40,000 a year because most people don't want to dip into their principal, they want to say, well, what can I earn? And, you know, if we if we get something conservative in urine and 4% of the 40? Well, we have to tell them again, you're not going to get 40, because we have to pay tax on that. And so it's going to be, you know, a little bit different. And that's when they get a little surprised. Like, what I didn't know that. And so we don't want what their first response is, is, like I said, they said, well, I'll just take out more say, Well, yeah, but then you're gonna have the next tax bracket potentially in kind of all kinds of issues. So it's important that where I think this is where the visor can really show their their value or worth is being able to work with this and keeping your taxes to a minimum.   Marc Killian  05:51 Yeah, I mean, because think about, you know, the future you right. So we often, you know, with these first two categories, Tony, we were kind of punting or wondering what we're going to do later on, don't forget that later, you is standing down the road somewhere waving at you going, hey, don't forget about me, you know, we got to be efficient with not only our spending and our budgeting and things of that nature, I know, everybody hates the B word, but still just having some sort of a, an incoming out, you know, outflow kind of projection is certainly important. So those are the first two. Number three is the life insurance question, right? So again, maybe not necessarily hidden. But if we've been trained, just like we have with the tax deferred accounts, to have life insurance, when we're in our 30s, or 40s. And our kids are younger, and, you know, case, something happens, income replacement, send   Tony Mauro  06:37 them to college, if I die, that kind of thing. We're trained on that we're also trained that, well, we probably don't need that when we're an older person, right, when we don't need it when we're over 70. But life insurance has changed so much that it could actually be a real swiss army knife for a lot of things. No, it could. And I think the question should be, you may not need the same type of insurance, that when you were young, but if you've got a policy that you know, you bought a long time ago, it's still viable, there may be some very useful uses for these policies. Because just because you have, like you said, everything paid off and kids out, you may still, like, in my own case, if my wife dies, you know, a big part of her retirement is IPERs. And which is a pension she can't outlive. But if she were to pre deceased me that I would get a payout on that. But that wouldn't really be enough to cover a lot of years in retirement for me. So for me life policy on her still makes sense. Even if she's retired, especially, you know, if I've got it, and it's doesn't cost a whole lot. Now, I think where people get a little confused is like, well, you know, I'm 65 years old or something, life's too expensive. It may be at that point. But we're talking more, you know, something you bought a while back. So I think in certain cases, again, another issue that you need to talk to your advisor about all of these, I think you should, but because it may not be Who've you just to cancel them all, especially depending on your situation. And then   Marc Killian  08:05 of course, if you if you did cancel something because you just under that old school mindset, and then you do need it, it's harder to get it back. Because your order and back. I mean, the insurance, right, we're all one blood test away from being uninsurable. Right. Yeah, exactly. Depending on what could happen there. And so lots of different ways to consider and again, I think, again, life insurance could be a real utility, Swiss Army Knife kind of thing for folks. There's the death benefits. Sure, there's still the living benefits, there's income replacement. I mean, you might still need income replacement in your seven you might Yeah, you know, tax free retirement, just lots of different things to at least have the conversation on. For sure. So number four, medical coverage. So a kind of a hidden question or might be alright, again, maybe not hidden, but just kind of we well, I got Medicare so groovy. I don't do any anything over and above that, though, in the answer is probably right. You're probably gonna need something. District Medicare. Yeah.   Tony Mauro  08:58 Yeah. I always tell clients Well, the short answer is yes. I said, but if you want to, don't want to take my word for it, let's the first time you're sick, wait till you get that bill, and watch what Medicare does not cover. So there's a lot of things. This is a whole profession. Now. I was gonna say to you and of itself. Yeah. Do you guys have somebody in house? Or do you refer people? A lot of advisors definitely suggest for folks to talk to Medicare specialists? Yes. I don't have anybody in house. I refer people out okay, to a local guy who's a Medicare specialist, you know, that can help them. Explain what Medicare covers and what it does and then all the different options they have because you can you can buy a lot of gap policies and supplements so that you can really feel good about okay, I'm pretty much covered for everything, but you obviously got to know the cost. Sure, because it does add up. Yeah, but yeah, I think Medicare for me, what I tell people is that's going to cover major things, and that's a good start. But, boy, if we're all living too long, we all hit you know, people start to get ailments. You're gonna We spend a lot of money quick on other types of medical care if you just have Medicare, so I strongly encourage them to visit with somebody.   Marc Killian  10:08 And if you think about, really what retirement can entail nowadays, depending on you know, the walk of life you're in or where you find yourself, you know, you almost really do truly need a team or a group of folks. You know, you need that financial professional, you need that CPA right. Now, if you're lucky, you might have somebody who's a CPA and a CFP on one like, Tony, right, but you need that tax person, you need that planning person. Elder Law, probably some sort of attorney. Yeah, right. And then maybe a Medicare specialist. So it's almost like, you know, it's part of the basketball, no pun here. But I was like the dream team, right? You need three or four players to help you out. You're the fifth, you go, that was four different categories. And we're the fifth. So there you go. There's our dream team. That's our basketball team. Alright, number five, how much am I really paying in those fees? And commissions? This is the only one probably that is truly a hidden question on this, that I think we, you know, most people just don't even realize how much stuff is actually hidden in the fine print. Because Tony, many people will go, Oh, my guy or gal charges me 1%. Right. And they think that's the end of it. So Tony charges me 1%. That's all I'm paying. Yeah, but what do you have? And what do those products have inside them?   Tony Mauro  11:19 That's right, because and we try to educate clients that Yeah, even though you're an advisor relationship with us, if we're managing assets for you, whether it's 1%, or three quarters of 1%, if you have funds or different things, outside of just plain old stocks, there are expenses inside those funds, you never see because they always, you know, basically take it off the return before anybody ever talks about returns. And so it's important to try to drill down and just make sure you understand, you know, all of the expenses you've got. And sometimes, you know, it's worth it. And sometimes it's not, we try to keep expenses low, because obviously at the end of the day, it cuts into your return, which means that, you know, less money for you. But at the same time, which I you know, I think we do a fairly good job of educating the client of, you know, nobody does anything for free, the mutual funds don't work for free, we don't work for free, right? Hopefully, you're getting some value out of this. But just so that they know, and the bad part is, is we have to re educate usually about every year, every other year, depending just to make sure that they haven't forgotten because they do they just they've completely started getting oblivious to it. Yeah, very true. Very true. But most of them, they always defer back and say, Well, you know, we just kind of hope you're gonna watch those fees for us, which we do. And we you know, but, you know, if you have concerns, I would definitely say, don't be afraid to ask your advisor, because if they're good, they're going to explain this to you and make sure that you understand how it works.   Marc Killian  12:52 Yeah, and have a fee analysis done, right. Because, you know, sometimes people will have that they get that delusion in their head, or whatever you want to call it, that they're paying, you know, the 1%. And, but then, you know, alright, I've got this, you know, Product X, and it's paying me, you know, 5%, and I'm only paying 1% to my guy or gal, so cool, I'm making four. And then you want to do an n Fe analysis and looking at what's inside that product X that you've got, and maybe there's another percent or percent in a quarter in there. And so now you're only making you know, 2.75, right, or something like that. So it which may be fine, but it may drive the vehicle, but it may not either, right? So find out and have that conversation. So that's why these are five questions that can get a little hidden or overlooked. You know, sometimes they straight up high. And other times, it's just we take our focus off of it. We take our focus off of the you know, the the money we've been saving for retirement if it's all tax deferred, because we forget, after so many years of doing it that eventually we got to pay Uncle Sam, we know it, but yet we tend to you know, look away from it. So lots of these reasons why these hidden questions can come back to bite us. And that's why it's important to talk with a qualified Pro. Like Tony, if you're not already working with him, or if you are and you've got somebody who might benefit from the podcast and maybe having a conversation. Often financial advisors do complimentary reviews and consultations just to see if it's the right fit. So reach out to get on his calendar. Have a conversation if you're planning proz.com It's your planning proz.com. And don't forget to subscribe to the podcast, very simple. Just hit the heart or the Follow button depending on what app you're using. Plan with the tax man is the name of it on all the major platforms Apple, Google Spotify, type that into the search box or just find that at Tony's website. You're planning proz.com Tony, my friend thanks for hanging out and breaking some of these questions down for me. All right, we'll   Tony Mauro  14:38 see you next time.   Marc Killian  14:39 I always appreciate you I know we're getting into the end of October here. So have yourself a happy and safe Halloween. And we will see you next time here on plan with taxpayer.   14:53 Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory serve Risk is offered through a VAT tax advisory services insurance services offered through an event tax affiliated Insurance Agency

Dave Ramsey is well known for his no-nonsense approach to personal finance, particularly in the areas of budgeting, debt management, and wealth-building. He has gained a significant following through various media platforms, including books, radio shows, podcasts, live events, and more recently, Tik Tok. Tune in as we peel back the layers of Dave's bite sized Tik Tok advice and share our thoughts beyond the clips. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Marc Killian  0:01   Dave Ramsey is well known for his no nonsense approach to personal finance, particularly in the areas of budgeting, debt management and wealth building. He's gained a significant following through various media platforms with books and radio shows, podcasts, live events, and now tick tock So, this week on the podcast, we're gonna peel back the layers of Dave's bite sized nuggets of Tiktok advice and share Tony's thoughts on those here on plan with the tax man. Announcer 2  0:27   Look up in the sky. It's a bird. It's a plane. No, it's the tax man. He may not be a superhero, but Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man. Marc Killian  0:44   Welcome into another edition of the podcast where we discuss a little Dave Ramsey advice this week with Tony Morrow once again here with us. Obviously Tony from tax Doctor Inc. and always chatting with us here on the podcast about getting to and through retirement. He's got 27 plus years in the industry. He's a CPA, a CFP and an EA. So certainly a great resource to tune into and talk with and so Tony with all that good stuff said I got to ask you first how you doing? And second, do I am I gonna see you on Tik Tok pretty soon or what we're going to catch Tony Mauro  1:14   up and doing good is rolling into fall. So that's good. And you know, I'm not a tick tock guy. Marc Killian  1:19   No, no tick tock dance craze for Tony and coming up saying no, no, Tony Mauro  1:23   no, I've looked at it a little bit. And I know that that's not for me. Yeah, I Marc Killian  1:28   mean, either, man. That sounds like either get it? I don't get it. But you know, Dave's got he does do a lot tour his some of his demographic definitely can be younger. So it certainly makes sense. Right? It does. Definitely runs on it. And I don't know, it seems a little too addictive for me. So I Yeah. Why should people make a fool of themselves? And I can do that, too. Yeah. The internet has definitely no shortage of places to watch people do goofy stuff on video. That is for sure. If you ever need if you ever need a laugh that can you can certainly get a laugh that way. But then you can also kind of go down that rabbit hole and go, Oh, my Lord, what have we turned into? Oh, yeah. So yeah, it's a very, it's a very slippery slope. But for fun today, on the podcast, let's talk a little bit about some of his advice. It's really more about the advice versus the tick tock, if not really be into the app or anything like that has nothing really to do with it. Just kind of more of a humorous anecdote to kind of bridge this gap. But it's really more than interesting advice that he has, some of these are pretty good. So I want to get your take on this. He said, Don't invest in anything, if you can't tell me how it works, and don't invest in something just because you're really excited about it. If it gets your pulse rate up, there's a chance you're getting conned. Yeah. Tony Mauro  2:37   And I think you know, all of these, we'll go through today, just a moment on Dave Ramsey himself. He, I generally agree with his general financial advice. And I mean, there's some things I don't agree with, and you know, type of thing. But overall, if you, in my opinion, follow some of his basic things, it's really going to at least set you on the on the stage to go down the right path, he's not going to give you specific advice. That's where I think you need an advisor to help you implement the plan. But anyway, back to topic. Number one, I do agree with him on this, because I generally, you know, if you have something you see, or someone you know, is trying to provide you with, generally it's an investment, and you don't understand it and you don't feel comfortable with it. Generally, my advice would be SCS, maybe back up a minute, maybe try to get some some additional info right info on it. Because in an ethic even Warren Buffett says that, you know, he doesn't invest in anything that he doesn't understand. I am sure. Peter Lynch used to say that and so really their their theme there is you want something that you can at least understand that a lot of people say, Well, I don't even understand how the stock market works. So are you saying never invest in the market? No. But you know, you can get some education, right? Simple. Yeah. And make sure your adviser is explaining, you know, what companies that you're in and or funds that you're in, right? Because you certainly don't want to have somebody come in and say, you know, something like, Well, I can make you X percentage, and we're going to do it safely in futures. And you know, that that's really not the case there. Yeah, Marc Killian  4:19   yeah. And so we tend to follow them that fear of missing out thing, right, we tend to fall for that, that moment, where people are like, it sounds really good. And I'm gonna be cautious, but boy, I don't want to miss out on that either. Right. So it's easy to kind of slide down that slope. Tony Mauro  4:34   Yes. I had a tax client several years back, he was very much into that fear of missing out and he he loved to, you know, just gather information that was coming in, whether it's from the internet, and he he spent a lot of money but is the culmination was as he went to some seminar. And these people, basically, I think, talked him into, you know, doing this options scheme. Yeah. You know, and they they said, if you do this, this is follow us, you know, you're gonna make a lot of money. And he ended up losing a lot of money on the out and, and it was 50 some at the time and he just it's like it was no talking him out of it. But I think that's one of those things where, you know, that allure of maybe the fast buck and and he didn't understand it and didn't understand the risks involved, which again, if you're going to do something like that, you need to talk to your advisor first, I guess. At the end of the day, that's what it comes down to. Marc Killian  5:31   Yep, for sure. All right. Well, that was the first one and I definitely agree with a lot that just be careful. Don't you know, I mean, obviously, crypto would be the one you could easily think about on that first quote, people were like, Oh, I don't want to miss out on and I want to be the crypto millionaire. And it's like, okay, well, then the next day your crypto ramen noodle eaten fool to right. So you're up down your UPS down, right? So just be careful. And yeah, to your point about Dave, just remember, he is a financial coach. I mean, he's got a great empire there. But he's not he's no longer if he ever was, I'm not sure. But an advisor or consultant, he's not really licensed that right now. Certifications are licensed at this point. He does not he might have at one point he might have. Yeah, I'm not sure. But I don't think he did. Yeah, he doesn't need to be licensed because he's not selling anything as far as mutual funds or insurance or, you know, securities, things of that nature. So just kind of bear that in mind. And I think a difference between someone like Dave, or even Suze Orman who may have been that way at one point as well, they no longer practice, right, they're no longer seeing clients on an active basis. So the advice can be very broad natured in general, where, you know, we're going to talk general nature and broad stuff here on the podcast. But then when you come in and sit down with Tony, that's when you're diving into the specifics, because again, you're active, right? You're doing this every day, taking care of your clients. You're a CFP, right, and a CPA, and an enrolled agent. So yeah, there's a little bit of a difference there, and how the messages could be perceived. So Tony Mauro  6:49   we, you know, fortunately, or unfortunately, have to follow some rules. And we have, you know, we have a fiduciary responsibility to put the client first we can a lot of trouble, you know, if we don't do that, and so we have to make sure we're covering all the bases where I think, you know, just general advice, which is really what we're doing here, but yeah, you know, doesn't have to kind of, you know, adhere to that kind Marc Killian  7:11   of, well, we always view the podcast is really a way to share some nuggets of information, but also personality that is you right, so that folks that are listening to maybe a currently our clients, they're, they're getting to kind of catch up on some things that, well, they don't have to always see you, right, they can tune in to the podcast and kind of just stay abreast of what's happening. It's a it's a great way to just kind of keep in touch with your clients outside of the normal review, but also for other potential folks who might, you know, benefit from the message or need to seek the advice of a professional in their area. That's the kind of the other reason of the podcast as well. So it kind of serves both purposes. But again, we do kind of keep the general information somewhat general until you sit down and really go through that planning process. But anyway, enough of that, let's go back into the Tick Tock here, I'm gonna go to the third 1x I'm gonna jump around in the interest of time, he says if you're not careful, you make short term decisions, which tend to keep you in the short term, if you make long term decisions, they can probably be well, they're almost always are painful now, but awesome later. So it's the concept, Tony of that delayed gratification. We're not good at that. Right? So for me, the first thing I think about here is clearly the traditional 401k we kick it down the road, so we don't have to deal with it. Right. But if you'd maybe look at maybe doing conversions or paying the taxes now. Yeah, it's painful, right? That's better because nobody wants to pay taxes. But it could be awesome later. Tony Mauro  8:32   Yeah, this one it's worded a little differently, but it's pretty much right out of his book, The Total Money Makeover, which and I still tell my son this is last words aren't you know, live like no other. So eventually, you can live like no other, which is this in a different way, basically saying, you know, put off some of the short term gratification, right for long term happiness. Marc Killian  8:53   Right, right. Tony Mauro  8:54   We as we as well, I can't speak for the whole world. But I think as as Americans for sure. Don't like, we want stuff to right gratification. And big picture. What he's saying is maybe you should think about your long term plan before you go out and blow $100,000 on a car, for example. Yeah, you know, that short term gratification. It's all cool and everything. But is that a wise move? But at same time, he talks a lot about, you know, don't don't plan so much for the future, that your whole life is miserable. It's moderation. We don't know you're gonna die. And yeah, and we don't want that either. So there's a happy medium in there. Exactly. He talks a lot about what you think Marc Killian  9:31   about our politicians. Great Ones. Yeah, I think about our politicians. We were just talking about that a little bit. Who is in our leaders? I think they're really guilty of this. They don't really look long term, right? They make so many short term decisions. They want to be knee jerk reactions, and then later on, they go well, we'll just deal with and figure it out later. Much like the situation right we were talking about. Yeah. So you know, there's there's got to be that happy medium. But I think in this context, like I said, I certainly took it as is the one for right now. What's going on is maybe it's a tax consequence. Maybe it's a tax situation, to take a look at for yourself and thinking, Okay, do I bite the tax bullet now and reap those rewards a little later on? Or do I keep deferring and kind of waiting, you know, to deal with that animal 30 years from now, you know, so, right. Lots of ways to go about Tony Mauro  10:17   it. I was just gonna say I think too with with us, we tend to try to get people to start at least thinking about putting some money away for retirement. Start small. It's a little pain. Let's Let's bite off a little bit bits of pain before you know and and get you used to it. Yeah, yeah. And then we can always increase. But yes, there's a little bit of sacrifice there. Yes. Marc Killian  10:37   Yes, sir. Indeed. All right. Well, let's do one more. And we'll wrap it up this week here. I love this one people that retire wealthy, it wasn't an accident. They didn't get to wealth, get to retirement and go, gee, hell that happened. Right? So unless you hit the lottery, or an inheritance from your Uncle Milton who left you $30 million, you had no idea about more than likely becoming wealthy in retirement did not just you didn't fall trip and fall into it. Right? Tony Mauro  11:03   That's right, I actually have a picture. In my home office, I have a lot of, I don't know, you know, just kind of pictures that depict, you know, good sayings. And one is got this is worn out guys at the top of this mountain, they it says the guy at the top of mountain just didn't fall there, you know, and he worked hard. And I think well, yeah, same thing. With you know, getting to your goals into retirement is it's a process, it's work at some sacrifice. And, you know, if, if you're one of those few that get lucky, great. But for most of us, that's not going to work. And so, you know, we've talked about it. A lot of times, you know, you have to have a plan. It's not fun at times, there's some sacrifice, but in the end, you're going to be very happy that you did it. I think Dave Ramsey talks a lot about that is trying to try to stay the course. Marc Killian  11:54   Yeah, yeah. And I think you know, that, to me, this also speaks to tried and true ways of going about it, Tony, right. So not trying to necessarily swing for the fences, not trying to jump into crypto, you know, back to that investments that you don't understand kind of thing, right? You know, making sure that it's fine to have some of that, but there's nothing also wrong with the things that the, you know, academics has proven to work for the last, you know, 100 years, there's some tried and true things that work, right. Tony Mauro  12:20   There is a fact, you know, going back to that I was gonna say, we were talking about the first topic, I actually had an accounting client today, email me, and he's a chiropractor. And he said, I've got people that want to pay me in Bitcoin. I don't know anything about it. Should I do it? And I told him, absolutely not. I said, you know, that's you don't know anything about it, it's hard to get your money out. It's not you know, I'm not saying bitcoin is bad, right. But you certainly don't want to take that as forms of payment, and when you need it for cash and your bills, I mean, so it's, you know, kind of what we talked about, you know, have a fear of missing out. I mean, it kind of wraps it all up, and he doesn't know anything about this. And Marc Killian  12:59   I mean, it's, I don't even know how to be awfully small fractions, I think, I mean, I go to a chiropractor, and it's not that much of a bill. I'm thinking man and one bitcoin is still what, six or 700 bucks or something like that, you know, so I don't know. Yeah, that would be I don't know, I mean, maybe like he could be sitting on a potential goldmine. Just gotta figure out how to actually work it. But But to your point, if you don't understand it, don't do it. Tony Mauro  13:21   You know, at least at least get yourself educated. So yeah, I think that it's all relative. And, you know, going back to our main, our main point here is a lot of what Ramsey talks about in his head talks about does make good financial sense. You know, you just got to take it to that next level, work with your advisor and implement, you know, what works for you. Marc Killian  13:40   Yeah, you know, it makes me think about that pizza story. Do you know that? You know, the Bitcoin pizza story from about, I don't know, 20 years ago, 13 years ago, something like that? No. So a guy named Laszlo I think something another paid another guy 10,000 bitcoins in 2010 for two Papa John pizzas to have delivered to his house, right? Because they didn't know what they had or what it was. So just think about that for a second 10,000 Bitcoin right? For two pizzas, you know what's its what's its price today at the time we're talking 25,980 Only that's all. So he paid 50 grand in today's dollars for two pizzas. fetus. Yeah, that's incredible. So you never because you don't know what's he didn't know what they had. Right? They didn't know what it didn't know what the deal was until 2010. So you just never know that I think that kind of wraps it up and illustrates our point of make sure you understand what it is that you're doing, what it why that you have, what you have, what it's doing for you what it's doing inside your retirement plan inside your portfolio, and get educated get some help plan with a tax man. That's why Tony is here. If you need some help reach out to him. You're planning proz.com That is your planning proz.com to speak with Tony Morrow at tax Doctor Inc. You can subscribe to the podcast on Apple, Google Spotify, which every platform you like using just type it into the search box, Oregon, stop by the website for all the information and details that you're planning. proz.com Tony, thanks for hanging out my friend. All right, we'll see you next time. Yes sir. And I look forward to seeing your next dance craze on Tik Tok. Yeah. We'll catch you later here on playing the tax man. Speaker 4  15:25   Securities offered through a van tax investment services SM Member FINRA SIPC investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency Transcribed by https://otter.ai Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated in

Are we on the brink of a retirement renaissance or stormy seas ahead? On this episode, we jump into the pressing issues of Social Security, healthcare, taxes, stock market trends, and long-term care. Whether you're an eternal optimist or cautious pessimist, this episode will equip you with perspectives to plan your retirement years with confidence as we ask the longstanding question, “is the glass half full or half empty”.   Important Links:  Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Marc: Are we on the brink of a retirement renaissance or stormy seas ahead? On this episode, we jump into the pressing issues of Social Security, health care, taxes, stock market trends, and long-term care. Whether you're an eternal optimist or cautious pessimist, this episode will equip you with perspectives to plan your retirement years with confidence, as we ask the longstanding question: Is the glass half full or half empty? Welcome this week to the podcast, folks. Thanks for tuning in with Tony Mauro and myself, here on Plan With The Tax Man. As we get into this week's conversation about the future of retirement America, is that glass half full or half empty? So we're going to dive into that with Tony this week. What's going on, my friend? How are you? Tony Mauro: I'm good. How are you? Marc: Doing pretty good. So did you like that little intro tease? That was pretty good, yeah? Tony Mauro: That's a good one. Marc: Yeah. Tony Mauro: Yeah, it's interesting because I tend to be on the more optimistic side, but I need to point out some of the other stuff too, today. Marc: Okay, well, I was getting ready to ask you. So yeah, I was going to say: Do you find yourself more of an optimist or a pessimist? And does it change on the topics? I think some of us can be optimistic about some things in life but pessimistic about others. Tony Mauro: True. Marc: So you never know, so yeah, I think that's a great point. Let's analyze both sides of it a little bit. I'll let you debate with me the pros and the cons or the hows and the whys or however we want to go, but we'll start with a biggie. The big ticket item that people often are concerned about, especially if you're getting near retirement age, and of course, our politicians and our lovely, lovely leaders do not do a whole lot to ease our woes about the stability of the Social Security program, right? Tony Mauro: Yes, as we're taping this, of course, the political season, it's going to be getting under way here in Iowa, I think, in January. Marc: It's under way. Tony Mauro: And so I'm sure this topic will come up, and it always does, and as it should, because the whole issue with Social Security is that it's slated to, depending on how you phrase it, run out of money or start paying more benefits than it's taking in at about, I think, 2033 or 5, somewhere right in there. So people are concerned that when they get to that point, "I keep paying in. Am I going to get any benefit out of this?" Marc: Yeah, for sure. Tony Mauro: And you ask the politicians. They tend to kick the can down the road. Marc: I was going to say, yeah, it's a hot potato they don't want to touch, right? Tony Mauro: No, they don't want to deal with it. Eventually, it will probably end up being like everything else they do, which is last-minute and patching. Marc: Of course. Tony Mauro: The optimistic view, in my view, is I don't see how they could let it fail. They may need to make some changes for the viability, because people are living longer, and we're all putting in the same, yes, but it isn't like there's the same amount that people that are drawing on it. But I believe that somehow they will end up with some kind of fix. Now, whether we're all happy with it or not, that's a different story. Marc: Yeah, of course, we're never going to all be happy with it, right? Tony Mauro: No. Marc: But I'm with you. I think the optimistic view is that they're not going to just let it die. They're going to keep it going in some fashion. I guess the pessimistic view would be that there's going to be changes, and what those changes look like could be different, depending on your age group. I feel fairly optimistic though, Tony, that people over 50, such as you and I, we're over that age group now, probably may not see any changes to it. They may grandfather that in, so to speak, but my daughter, at 25 or 26, the thing's going to change for those folks: 20s, 30s, 40s. Maybe they do something as simple as pushing it back. There's no early retirement at 62; they move it to 65. Who knows? Tony Mauro: Exactly, and there's a lot of studies and math going on out there, and by the way, I do think you're right, yes. My son is 27. It could look vastly different for them. I still don't think they'll take it away, but there's talk of, like you say, moving the retirement age, maybe either getting rid of that upper limit and/or that whole privatizing thing. There's goods and bads to all of that, which is a whole five-hour debate on its own, but I think that they do have options to keep it going. But I think with again, people living as long as they are, to me, I think they need to start working on this now and start coming up with some solutions. We don't want to go down the politics road, but you know how it is. They tend to not do that. Marc: Indeed. Well, Tony, I sat in with a interview with David Walker, who was the former Comptroller of the United States back in the '80s and the early '90s, I believe, and he talked about that issue. He was like, "Look, many people don't know, but there was a really close right there in the late '80s." Somewhere, I don't remember the exact date, but where people weren't going to get Social Security checks. He's like, "We waited until the absolute ninth hour," however that saying goes, before they fixed things. He says, "Because that's just how they operate." And he's like, "So I feel fairly strongly that they'll do something similar again." Now, granted, that was 35 years ago, so who knows how things change? But that points to that historical nature that they have, of the thing that they fear the most, they wait till the absolute last second to touch. Tony Mauro: Yeah, that's something, I mean, look at the debt ceiling talks every what, six months to 12 months? It's just crazy. How about we just figure something out? Marc: Stop spending. Tony Mauro: Again, yeah, stop spending. Do something. Marc: Put down the checkbook, man. Tony Mauro: And yeah, it's unfortunate they do that. It would be, I would think, better politics to tackle some of these problems, even if it takes them 12 years, 15 years. Marc: Just get started, like paying down your mortgage. Sometimes you think, "Boy, I wish I could pay this off sooner," and it's like, "Well, you can if you start applying yourself and putting a little bit more onto the mortgage and get it paid off sooner." But it's the principle of doing it, so it's hard, sometimes, to do that, and clearly, our government doesn't do a good job with that. All right, so that was the first one. Let's go to healthcare affordability in the future. All right, you're an optimist here, Tony, you said. So what's a half-full take on healthcare? Tony Mauro: Well, I think the optimistic view, basically, is as we advance technology and things get better in that respect, I think there's more and more talk these days of people trying to remain healthy into their 80s and beyond. And more people are cognizant of that, with the whole internet thing, as opposed to maybe 20, 30 years ago. Marc: Thinking about that, Tony, let me ask you this question. My wife and I will have on old TV shows, old sitcoms or something like that, and we've been just enjoying watching old reruns of The Golden Girls, for example. And they're in their 50s in that show. They're in their late 50s in that show, but at the time, when I'm in my 20s or whatever, I'm like, "Now, these people are old. They're in their 60s or whatever the case is, and they look old." And I'm 52, which is the age of one of them on the show, and I'm like, "I do not look like that." So what's that saying: 70 is the new 50, that kind of thing? So I think you're right. We are better, I think, societally. As we move through time, we tend to look younger and feel younger for longer. Tony Mauro: I think so, too. Looking at my own parents and my dad, who's now 82, who still is in pretty good shape. Marc: When he was 50, though, you thought he looked old, didn't you? Tony Mauro: Oh, yeah, yeah, he was old. So I think it's perspective. Now, to me, old is 90s, and I have an uncle who's still 92, and he's playing golf. So I think with what we're doing today, especially in the technological fields, we are, which I think is part of the negative, maybe living too long, and people are keeping us alive too long. Marc: That's true, yeah. Tony Mauro: If we can do it comfortably. Marc: Right, and that's definitely the half-empty side, is with living longer comes more healthcare costs. Tony Mauro: More healthcare, yeah. Marc: And it's not cheap. Tony Mauro: It's not cheap, and it seems like, again, pointing to my own father, it seems like he's in at the doctor literally non-stop. He's got to go in for a little hernia operation tomorrow, as a matter of fact, as we're taping this, yeah. It's supposed to be in and out, but it's just every five, six months, he's got some things. Marc: It seems like almost weekly. Yeah, my mom's like, "Well, going to another doctor appointment. Well, going to another doctor appointment." My brother goes, "Good Lord, how often do you go to the doctor?" She's like, "I'm 82. A lot." Tony Mauro: A lot, yeah. But my dad is getting to a point now where he thinks, and there might be a little bit of truth to this, but he is a pessimist, is they constantly just want to do stuff to him to make money. Marc: Oh, yeah, yeah, yeah. Let's test for this. Let's test for that. Yeah, I'm with you there, too. Tony Mauro: He's definitely a pessimist. Marc: That's okay. I'm with him on that one. I'm with you, Daddy Mauro. So all right, how about tax rates in the next decade? I don't know if we can find an optimistic view here, but maybe we can. The pessimistic view clearly is that the 32-trillion-dollar deficit, that tax rates more than likely have to ... We all feel pretty strongly, I think, that tax rates have to go up at some point, just because we've got to be able to pay for these things. We just talked about Social Security a minute ago, but is there an optimistic view on taxes? Tony Mauro: I tend to lean a little more pessimistic on this. I would say the only thing, potentially, is there could be some reforms, and I think it is occurring more at the state levels, at least it is here in Iowa, to benefit retirees by lowering their state taxes. Marc: Oh, okay. Okay, well, that's good. Tony Mauro: Just to keep people in the states and some different things, but I find it hard to believe that we are not going to have to be taxed in some way, because like I say, we've got a lot of stuff to pay for that we haven't. Marc: A lot of stuff. Tony Mauro: And I don't see how things can continue to go down. There's an argument out there about, "Well, if the economy grows at a certain clip, that it's going to be less reliance on taxation," but I don't know if I totally buy that. Marc: Yeah, yeah. Well, I'm glad you found a positive, though, so that is something to hopefully keep an eye on, especially at the state level, some tax reforms, especially benefiting retirees. That would be fantastic. That would be the silver lining in what is ultimately not a very pretty cloud, right? Tony Mauro: Right. Marc: Okay, long-term care options, excuse me, for Baby Boomers in general. Like the healthcare, definitely technology's got to be on the forefront here of the optimism side, right? Tony Mauro: Yeah, I think with the technology the way it's going and more and more people becoming cognizant of, "Hey, I'm going to need some sort of care, long-term," it doesn't necessarily mean nursing home. The insurance companies and everybody else are coming up with a lot of home healthcare solutions, which people tend to like. A lot of the assisted living facilities are using those progressive types of deals, where you go into assisted living. You're totally on your own, and as you need more care, you could advance along. But I think most people, most seniors, I know my dad's the same way. He wants to age in his home, and I think that with what he's got and what's available out there, a lot of these long-term care policies allow you to do that, as far as that goes. I think a little bit in the half-empty. At least here in Iowa, I had to mention it, is there's a shortage of healthcare pros, if you will. And I'll tell you, a lot of our Iowa nursing homes are in the news a lot for poor care and fines and all kinds of things. And so I think maybe that's because of the shortage for healthcare professionals, especially in that area. Maybe they're just not getting the type of people they need. I don't know. Marc: Unfortunately, needing workers, sometimes you change the criteria, and maybe you don't always get the cream of the crop. Tony Mauro: That could be, but I do think, too, on the negative pessimist side, is I still think there are way too many people that are unprepared and have not talked about this issue with their advisor or anybody else. And I think that's a huge part of a potential problem. Marc: Yeah, a huge disservice to yourself and your loved ones, for sure. All right, let's do the last one here, and we'll wrap it up, and we're doing, again, half-empty, half-full view on some of the big ticket items coming down the pike for us all as we get closer to retirement. The stock market over the next five or 10 years. It's certainly been tough to read it, Tony, because it's been all over the place, and there's historical trends, which I guess you could look at the full side of that, the half-full side of the glass over long periods of time. Again, tech here is probably also helpful, as well, but the market is still going to be what it is, which is volatile, and Lord knows the world is volatile right now. Tony Mauro: World's volatile, yeah, and I think I tend to take a little longer view. I am always an optimist when it comes to the market, long-term, and long-term for me is 10 and beyond. Over the five to 10, it is. It's going to be volatile. I think that this is where, especially as retirees need to have a plan, need to be working with an advisor, and discussing where they need to have their money. So based on whatever plan they have, they can earn a reasonable amount without too much risk and hopefully, tax efficiency, as well. But I think still, the market over all, if it's done right over the long term, is your best bet, especially in retirement and maximizing your income. But there are some, based on their risk assessment and some other things, that they may not be ready for that. And certainly, with all the uncertainty in the world and the negative news, I've actually gone myself to not watching news. I want to read it. Marc: Only when you have to. You have to not watch. Tony Mauro: But even it's so funny. With the negativity in the news, if you go to a search, and we're getting off-topic, and whatever's on there, and you read that article, it's amazing how many other articles start popping up wherever you're at, online, with the same negative news. It's just like everybody's got their slant on it, and you can get overstimulated, maybe, with negativity. Marc: Well, it's not even just watching it on the news now, because it stalks you in your social media things, all this stuff on your phone in general. There's a term for it now. It's called doom scrolling. Tony Mauro: Doom scrolling?. I never heard of that. Marc: Yeah, if you hadn't heard of that, it's doom scrolling, where you basically just go down this spiral of continuously scrolling through stuff. So you can't get out of the spiral, and often, it's negative, which does not do well for the psyche, so not a good place to be. So yeah, I think when it comes to the stock market, there's always going to be those pros and cons there. There's going to be bubbles. There's going to be over-valuations. There's going to be good periods, bad periods. So I think we got to take that with that grain of salt. And to your point, you got to work with a qualified professional to make sure that you're dealing with things as they come or as they're going to come, because there's a lot of things that happen to us all as we age, and we got to have a plan for that. So that's why you need to Plan with The Tax Man, so get on Tony's calendar, if you haven't done so yet, you would like to talk with him. He's a CPA, a CFP, and an EA-enrolled agent for 27-plus years, helping families get to and through retirement and a great resource for you to tap into at Tax Doctor Inc. You can find him online at yourplanningpros.com. That is yourplanningpros.com. Tony, thanks for hanging out, my friend. Tony Mauro: All right, we'll see you next time. Marc: Yeah, appreciate you, and keep that optimistic view, because we need more of that in the world, that's for sure. We'll catch you later here on Plan with the Tax Man with Tony Mauro from Tax Doctor Inc. Disclaimer:  Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

In this episode, we construct a helpful conversation about the role of real estate in a retirement strategy, exploring everything from rental income to reverse mortgages. Whether you're a pre-retiree with a portfolio of properties or just curious about leveraging your home equity, this discussion offers thoughtful insights for anyone navigating the crossroads of real estate and retirement.   Important Links:  Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Intro  0:00   Look Up in the sky. It's a bird. It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man. Marc Killian  0:17   Welcome into a another edition of the podcast in the September now here and is starting to cool off a little bit. And we're gonna have a conversation about brick and mortar retirement, some pros and cons of real estate investing for retirement. And, you know, Tony, before we get into this conversation this week, speaking of cooling off, you and the missus went for an Alaskan cruise that had to have been just Tony Mauro  0:40   awesome. It was it was absolutely fantastic. I'd recommend that to anybody to go up there and check that out. Because it's, I don't know, it's just like a different world. You know that I guess they call it the last frontier for a reason. Right? It is rugged, and it's amazing. It just does the wildlife. And the interesting thing about it, besides all of that, I didn't realize when I when I went up there that Alaska is way bigger than Texas as far as landmass. It's huge. And, and they only have 730,000 odd people. Yeah, if you can imagine. I mean, so it's sparsely populated up there. Yeah, you know, but it is so rugged, that it's not easy to live up there. Marc Killian  1:20   Yeah, my in laws live in Wyoming. And you know, it's a pretty big state too. Yeah. And there's like 500,000 people in Wyoming, right, same kind of thing. So it's harder, it's hard to live in. But you know, if you have that kind of temperament, for sure. But yeah, I've wanted to do the Alaskan trip myself, just, you know, love seeing wildlife and things of that nature. Obviously, go up to Wyoming and see the in laws. As I mentioned, I've got some amazing pictures of wildlife up there. But we'd love to do like the whales and things of that nature. So Tony Mauro  1:47   yeah, that I tell you the sights, the wildlife, the glaciers themselves, pictures, don't do them justice. Oh, I bet because they are so blue, you know, the pictures, a lot of times they look white, right, and you get up to them. And they're almost it feels like they're glowing. You know, it's just incredible. We saw a glacier feels about 65 miles deep. And it's interesting how fast they're receiving, you know, they're receiving so fast. I mean, the one a couple of weeks saw ever seen it like 12 miles in the last 30 years. You know, it's like, wow, that that is a lot. But it's cool to see. Yeah, I Marc Killian  2:24   mean, if you really like oh, that kind of stuff. I encourage everybody to get up there. Well, there you go. So I mean, one of the things that if you need to have a conversation with Tony on, on travels, he loves to travel, so Well, yeah, for your, for part of the retirement planning process is, you know, things to do in retirement. So definitely get a great resource to talk about some ideas there as well. So he's seen some very cool stuff over this week, let's go ahead and jump into a conversation about pros and cons of real estate. Tony, some people place more of an emphasis on acquiring real estate, you know, versus maybe funding accounts, like you might see this, especially depending on your type of work, right? A lot of times you'll see this with, you know, realtors or things of that nature. And I mean, it can be a great tool. But have you seen some people successful used rental properties to create the rental income or the retirement income? I should say that they need, Tony Mauro  3:07   by and large? I'd say no. And I say no. And we, as a caveat, have owned real estate for probably 2527 years. And we started out with that dream back. We started before before we started the firm, because we had nothing else to do. We had no clients, and we acquire single family homes, we thought, well, if we can do this, and this will be our retirement. But and we migrated away from those and started building apartment buildings. And we and we still have those and they are a good income stream. But a lot of people aren't going to aren't going to I guess probably own multi, you know, unit 50 buildings, they're more probably into duplexes, single family homes and whatnot. I say no, because I get a lot of a lot of things people will say why I don't really like stock market all invest in real estate. And you know, I think that's, you know, somewhat legitimate, I don't think you should put all your eggs there, though, for sure. Number one, and number two is real estate investing, while it can throw off some income, it's work. And I don't think a lot of people get into it and realize how much work it is. And if you get yourself highly leveraged in real estate, you're not making that much. And so I think you have to amass a large portfolio of homes or units to depending on what your retirement income you want it to be to, you know, to have that. So I think there's goods and Bad's of it. You know, I think it's good to have if you really like to diversify a little bit, but I think you you got to understand all the ins and outs, which is what we like to talk to people about, Marc Killian  4:38   right. So what that kind of said, if somebody came to you as a pre retiree with you know, maybe limited liquid assets, but a ton of real estate, is that something you would want to strategize with them on or maybe kind of paring some of that down so that they can build up that liquid side of the assets? Tony Mauro  4:53   I would you know, depending on we'd have to find out you know if they owned them all outright or if there's loans be paid And then, you know, compare that to the income that they're thrown off versus if you could invest it and say, you know, I don't know, get four or 5% out of it type thing. Or if it was big enough, you know, maybe you could just live off of, you know, off the principal. But, yeah, I would definitely take a look at that. And most of the time, when we've looked at that people aren't netting or the other cash flow coming out of them is not that much, because either have some loans, and then they've got turnover, and they got to put money back into them. And you know, at the end of the year, they didn't really cash flow that much. They do some and depreciation offsets some tax, but I definitely would want to take a look and probably have a conversation about if you're looking for more income, you may want to do something else, or at least partly do something else. Marc Killian  5:46   Yeah, definitely. You know, because you gotta have some liquidity, right? I mean, real estate can be can be a great tool, but I mean, you can't reach in the walls and just pull out some cash. Right, exactly. Tony Mauro  5:53   Right, y'all, you've got the rent income coming in, you know, and that's it. Marc Killian  5:57   Yeah. Do you ever see that? Generally, that TV show Arrested Development? You know, I Tony Mauro  6:01   never did watch that. No, Marc Killian  6:03   I don't I didn't watch much of it. But I know there's a funny scene about that, you know, that concept that works well for the conversation where I guess the father of the family goes to jail or whatever, for I don't know what for, but the sun keeps going and talking to him and saying that the family is struggling and needs money. And he's like, Well, there's always money in the banana Stan, because they have like a banana Stan is a business right? And so of course, the sun takes that is, you know, well, there's always money in you know, going to work and work in the business, right. But he gets so ticked off at the dad for whatever that he says the bananas stand on fire and burned to the ground. Basically, the longest sort of as the father says, you eat it, there was $250,000 stuffed in the walls of the banana Stan. So, you know, it's a funny way to think about it's obviously it's TV shows, it didn't really matter. It's fictional, right? But think about that concept that you just can't reach into your walls and pull money out in. So if you have too much real estate and not enough liquidity, you could be doing yourself a disservice. Right? So you could Yeah, so just kind of bear that in mind a little bit. What do you think about like home equity loans, or he locks in somebody's retirement strategy? Now, again, in the retirement strategy, Tony Mauro  7:06   it could be an option, it should they should they need it, I think most of the time, I'm of the belief, I don't like to, to see my clients having a lot of debt secured by their home. But if they need to, I don't think it's a bad idea to have a line of credit. And maybe, you know, you tap it and you're borrowing pretty low rates get to deduct a little bit of the interest, although I wouldn't do it just for that, and have that just in case, but I wouldn't rely on it for you know, month in month out cash flow type of thing, for sure. So I'm not a huge fan of that. I'm also not a huge fan of the reverse mortgages, which I know, will probably take a look at. But I think reverse mortgages, and maybe some of this makes sense. If you don't have any other sources of income, and it's all tied up in your own home, you know, and you, you have to take it out. Now, for real estate investors, it's not a bad idea if you've got some equity, because you could basically use that equity and maybe maybe help fund a down payment on another one, you know, or maybe use it for repairs, you know, things like that. But again, you got to watch it because it is debt at the end of the day. And even though you may not be saddled with it, you know, it, it could be something that your state has to deal with. Marc Killian  8:15   Yeah. What's your thoughts on REITs? Tony? Is REITs a part of the conversation? What should retirees and pre retirees know about those? Tony Mauro  8:22   Well, the REITs are these real estate investment trusts, you know, so they work similar to kind of a mutual fund, you know, where you put your money in a REIT and it's pooled together with other people and what they do is management company goes out and invests in a bunch of properties that could be shopping malls otherwise, they're probably not the not the thing right now or, you know, apartment complexes, things like that, they run the trust, and you've got more liquidity, and you have shares of that REIT and you can get in and out for the most part and you know, hopefully you're gonna earn you know, a good percentage of return without doing all the work of really investing in the real estate but I find that most people I kind of mentioned it, and they just get this blank stare in their eye they say, No, no, no, I want to I want to just own my own, you know, I want to I want to be on the ground and fixing things and but I think REITs truly have a place in a retirement strategy, especially if you're into real estate. Marc Killian  9:15   Yeah, great point for sure. tax considerations obviously that's something that you're very focused on with your practice how the tax considerations play into the decision Tony Mauro  9:24   well with with real estate you know, obviously you're only paying taxes on the the net rent income that you have every year and that might be enough at least on the books for taxes which make does make real estate appealing. So you're you haven't a positive cash flow but you're not really paying a lot of tax on it because of the depreciation that's a plus but the income is taxed at ordinary income rates. That's kind of a you know, depending on where you're at, maybe a negative I do like real estate in the fact of unlike an investment in a stock were talking losses now for just a minute. You know, if you lose you know money on a stock, you can only deduct up to 3000 bucks a year. You're against other income in real estate, you can deduct up to $25,000 of loss. So if you have a bad year, you know, you can take advantage of tax laws a little more more leniently than if you just sold a stock, but you go over to the investment side, just a stock and you sell it for a gain, you know, the max capital gains right now is 20 percents, a lot of them, depending on your income might be only 15. So you have a little bit of a tax advantage there. So a couple pluses and minuses on both sides. Marc Killian  10:29   Okay. All right. And then the final piece here to consider when we're, again, we're talking pros and cons of real estate, you mentioned earlier reverse mortgages. Now, once upon a time, like this is, you know, just like annuities, or even sometimes insurance, right, or even used cars, right? There's that kind of, oh, there's this kind of negative connotation to the people that maybe sell these types of things and the types of products that they are, but just like annuities in the last 10 years, they've made, you know, major changes. And so this could maybe be a potential, you know, idea for someone to use, depending on their scenario, their option. Like for me, Tony, we only have one child, and she's in the Navy. She says she has no plans to return here where she grew up, she has no plans to live here, you know, so what did we do with the place? Right? So maybe it's maybe it's worthwhile for us to do something like that, you know, and when we're both gone, so be it. So I don't know what your Tony Mauro  11:21   thoughts, I think, just like you said, they do have a place that was kind of like, you know, some of those other back in the day, they were kind of considered shady, you know, the back to back room deals, they have come a long way they are, you know, for the most part on on the up and up, I should say, I think they're more viable. Like you were talking about your situation, I had an aunt who was elderly, and she didn't have a lot of money just living on Social Security. And she did a reverse mortgage, and it worked well for her before she died because it gave her the income that she needed and desperately wanted, right, and that she didn't make those those loan payments, you know, because the reverse mortgage works, you don't have to pay it back until you die, you know, and they sell the house to recoup their their miles right? Now, they don't loan you 100% of the value, you only get a portion and there are some fees. So you want to make sure you look into that and make sure that you understand it all. But in certain cases, I wouldn't frown upon them. Now, I don't think they're right for everybody, you Marc Killian  12:18   know, right? Oh, yeah. Like yours. I mean, I think if you've done a good job saving for retirement, it may not even be something that's on your radar. But for those who maybe haven't, or maybe they even have, but they decided, you know, hey, due to our situation where nobody wants to place, you know, hey, maybe we can get some more equity out of this place and enjoy a little more fun in retirement. I mean, you never know, right? I mean, it's just multiple ways of looking at it. But I think the concept there is just like an annuity or just like possibly having insurance in your 70s when most of us think of it as something we only meet in our 30s 40s or 50s. When we still have growing children. It's don't shut it down until you understand. Is it useful for me or not? If it's not move on, right? But it's a product, you know, that serves a purpose. And if you fall into that, that range, and then it might make a hell of a lot of sense for you. Yeah, there you go. Exactly. Alright, well, that's gonna do it this week. For some pros and cons of real estate, investing for retirement. Again, if you've got some questions on how it's going to relate to your situation, as always, you know, when you listen to our podcasts, or any other kind of program or read some things, you want to see how it's going to translate to your specific situation, all these universal things that affect us all, are all well and good in, you know, in general conversation. But until you really dive in and see how it's going to relate to your unique scenario, you're not going to truly understand how it works. So if you're not working with a professional, and certainly if you're not working with Tony, consider reaching out to him and let him know that you need some help and get yourself on to the calendar for a complimentary review. Go to your planning proz.com Couple things with lots of stuff you can do. There's good tools, tips and resources. You can reach out to them schedule some time get on their calendar, subscribe to us on Apple, Google or Spotify. You can find the podcasting page there as well. Again, that's your planning proz.com You're planning proz.com Or just call him at 844-707-7381 Tony, thanks for hanging out my friend as always, I appreciate you breaking down some of these things for us. Good conversation. Tony Mauro  14:08   All right, we'll talk to you next time. Marc Killian  14:09   Yeah, man and I'm jealous. I want to go to Alaska. Thank you very much. So you gotta get there. I know. Right? So we got to put that on the radar as well. But you have a great week, my friend. We are in the September so hopefully you enjoy the the cooling off. And sports football season is back in if you're into that sort of thing. So folks, enjoy yourself out there be safe and we will see you next time here on playing with the tax man with 21. Disclaimer:  Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

In this episode, we're tackling some common complaints and fears that can arise during the retirement planning process. We'll discuss which concerns are well-founded, which are based on misconceptions, and offer insight on how retirees can best navigate their financial future. Important Links:  Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Speaker 1: Welcome in to another edition of the podcast. It's Plan With The Tax Man with Tony Mauro from Tax Doctor Inc. here to talk with me this week on the show. We're going to dive into exposing some retirement planning complaints, tackle some common complaints and fears people have about their financial situations during retirement, and which of these are kind of well-founded or maybe just full of misconceptions, things of that nature. So we'll have a good conversation with Tony this week on the podcast. Don't forget to subscribe to us at yourplanningpros.com. You can check out Tony's website at yourplanningpros.com, or type in Plan With The Tax Man in the search box of whatever podcasting app you like using like Apple, Google, or Spotify.   Tony, my friend, what's going on buddy? How are you?   Tony Mauro: I'm good. As we're recording this it's state fair time here, which usually signals toward the end of the summer.   Speaker 1: Well, it's-   Tony Mauro: It's the last hurrah.   Speaker 1: It's hot. It has been hot for sure.   Tony Mauro: It's hot. Yeah, it's been hot here too.   Speaker 1: Yeah, it was 98 like the last four days in a row, but they said it felt like 110 or something like that.   Tony Mauro: Wow. Yeah. We got that coming again next week, so it'll be interesting.   Speaker 1: Well drink plenty of water, right?   Tony Mauro: Yeah. That's right.   Speaker 1: So you don't overdo it, especially for a lot of our demographic that we talk to and listens to the show. Making sure that you have plenty of water and stay hydrated is important, that's for sure. My mom, she's 82, and she does these daily PSAs on Facebook. She's like, "Morning y'all, it's going to be real hot. Drink water."   Tony Mauro: Uh-huh. Yeah. That's nice.   Speaker 1: I'm like, "All right, well there you go." But anyway, we're going to talk about some retirement planning complaints this week. So I've got some pretty basic statements here that people say often, Tony. So we'll talk about whether, like I said, these are well-founded or just full of misconceptions and just offer some insight.   Tony Mauro: Mm-hmm.   Speaker 1: So let's start with the first one here. My advisor takes too much risk. Obviously this has been something that people have said for often when things are not going well you go, "Oh well my advisor takes too much risk." But I would challenge the question of why is that? Is that because they're taking the risk without talking to you? Or have you gone through some scenarios? What do you think?   Tony Mauro: I hear this sometimes as well, and these first two couple topics here I can relate back to this last weekend when I was out visiting my son and my new daughter-in-law. And they're very young, 27, but she had made a comment like this, and so I asked her, "Well why? Why do you think that?" And the answer is what I get a lot, and that is, "Well it seems like my account's not going up." So I hear that a lot. I hear the fact that I'm not making as much as my neighbor, things like that. Or, like you say, when things are going down they think there's a lot of risk. And it might be the case, but it's not always. And I think, as I told her, "Well you just need to talk to them and explain what you think." And in her case, she's 27 years old, she's investing for retirement, long timeline.   Speaker 1: She should be taking risks.   Tony Mauro: [inaudible 00:02:58] a lot risk over the last few years. Yeah. And I looked at the funds that she's in and really they're actually very good funds, they just haven't done much the last year and a half. But I told her, I said, "That's not unusual in the market we're in." And she's not real risk averse, so I think that's one thing... I think if you just communicate with your advisor, talk about that kind of stuff. Or if-   Speaker 1: If you're feeling like they're doing it right, you got to first of all find out why.   Tony Mauro: Yeah.   Speaker 1: Well, actually you mentioned account's not growing, so that's actually on my list, so I'm going to jump down to that one and pair these two together then.   Tony Mauro: Okay. Yeah.   Speaker 1: So they takes too much risk, or my accountant didn't grow much last year, and to me a lot of this seems like the same problem. And that problem is it's the highs and the lows. We all like the risk when it's up and nobody likes it when it's going down. And so last year obviously was a rough year '22, right? 2022 was a down year in the market. So this is probably your risk profile. To me this comes back to how are you allocated, right? So you hear somebody say, let's just make up a number, "The S&P was up 30%." All right?   Tony Mauro: Mm-hmm.   Speaker 1: And then you go, "But I only got 15, so my advisors not doing enough."   Tony Mauro: Right.   Speaker 1: Or then the inverse of that is, "The S&P was down 30%. Well phew, I only lost 15." Well, that's because of your risk portfolio, so you don't get all of it unless you're completely exposed.   Tony Mauro: And that's true. And with the whole "My accountant didn't grow last year", I got the same thing out of her. And I asked her the very same questions is, "Well, which accounts are we talking about here?" And of course it was the retirement accounts, and I quickly pointed out that, "You've got maybe 35, 40 years before you need this money." So it's easy for us as advisors, and I told her to say, "Don't worry about it." But in reality, you got to take a longer time horizon. And with your risk profile, like you said, and hers as being somewhat on the aggressive side, you can't let it be your main focus. She's focused on the wrong things. I think us as advisors got to remind them.   Speaker 1: Yeah, I was going to say, and like a quarterback on a football team you get all the credit or all the blame. Right?   Tony Mauro: Mm-hmm.   Speaker 1: So it's like, "Oh man, my advisor did a great job. I made a bunch of money this year", or something like that. Well because there was an up year on the market and your portfolio was allocated properly for your risk tolerance.   Tony Mauro: Yeah.   Speaker 1: Conversely, if that was the case and it was down, you'd also be happy because you didn't lose as much as your neighbor or whatever the case is.   Tony Mauro: Exactly.   Speaker 1: So it's all about that risk profile, making sure that you're taking the right amount for your situation versus the kind of generic common complaints.   All right, so that's two of them. So let's go to my fees are too high. And the statement here to me is always the same kind of thing. Nobody likes fees, we don't want to pay more than we have to. But what are you getting for the fees? Is that worth it?   Tony Mauro: And that's the question you have to ask, and it should be addressed when you start the relationship with your advisor, is understand how he or she's being compensated. Most are going to just be flat out and tell you, "This is how we do it." Some are asset based, which is a fancy term for taking a small percentage of the account value every year. Some are just regular fee based. It's X amount for me to help you every year, like a consulting fee, coaching fee, whatever you'd like to call it. And so as long as you feel like you're getting value for that fee that you're paying, I wouldn't tie it to investment returns. This is the fee, just like you'd pay an attorney, an accountant, anybody else to do things for you and keep you on track.   But on the flip side of that, if you're paying fees and you're not getting anything... Because one of my daughter-in-law's complaints was, "He never calls me." And I said, "Well, what would he call you about all the time? What do he want to talk about? Because you're not a stock picker, what do you want to talk about?" She just felt like, "Well, I think I should be getting talked to all the time." And I said, "Well, have you addressed that with them?" And she hadn't. I said, "Well, then they may not know that you want to do that. So your whole little fee that you're paying might be misaligned."   Speaker 1: Yeah.   Tony Mauro: So I think it's communication, and I think that you have to understand what you're paying for. And then the services that are provided... I mean we try to list them out in exact number of calls and what you can expect and things like that, because that way there it lessens the chance of miscommunication.   Speaker 1: Yeah, I think the first two to me are definitely misconceptions in how you're probably working with your advisor. And if they're not, they're just straight up taking too much risk or whatever the case is that we covered on that first part and not listening to you when you say you don't want to be that far into it, well then that's obviously a problem.   Tony Mauro: Yeah.   Speaker 1: With the fees are too high I feel like it's the same thing. It's probably based on misconceptions. It could be a little well-founded as well, but understanding what it is that you have, because certain products are going to have higher fees than others. So just making sure that you have that conversation point.   For the next one, social security won't be enough to cover my expenses. To me, this is totally a legitimate concern, because that's correct. It's not going to be enough to cover everything. It does a great job, but it's not everything.   Tony Mauro: No, it's not everything. And it is, that's a legitimate concern. And the easy answer to that is that's exactly why you A, need to plan, B, save and take the time. Like I said, as I told her, I keep going back to her, "You've got a lot of time, you just need to keep saving. Because a lot of people think that social security, if they haven't looked at it, is going to be enough." And like you said, it's nowhere near enough. It's a good start, good safety net, but you definitely need to plan and save. Otherwise it's going to be pretty paltry by the time you get to the end.   Speaker 1: Yeah. Yeah, for sure. And you've got to make sure that you realize that. And I think I've shared before my mom's in this situation where she's living on social security only and it's not the ideal situation that she wanted to find herself in. Through the course of decisions it's what's happened. So avoid that by doing some proper planning ahead of time and having the right pieces in the puzzle, and being aware that while it does a lot of things for you it's not going to cover everything. Now if you strategize right, maybe the social security is that income piece that takes care of the cost of living, let's say, and then you're pulling from your nest egg for the fun stuff. It just depends, right? It depends on how you structure your income strategy, and also depends on what you as a couple might be bringing in from that versus anything else.   Tony Mauro: Right.   Speaker 1: Yeah. Okay. I don't understand my financial plan. This one I think is a fairly well-founded concern because sometimes people just aren't getting it. And maybe they don't do themselves the advocacy service of saying, "Hey, you know what? I'm sorry, I know you explained this, but I'm just not getting it. Can you help me go through it again?"   Tony Mauro: Yeah, I think you need to do that if you truly don't understand your plan. I also think that if you're in a relationship with an advisor and they are charging you fees, you should have a plan. In other words, it may not be on paper, but it should be in your portal or somewhere where you can access it. That's what we do, is we put the plan in the portal and it's all electronic. But the client can actually see, "Here are the major steps you said you wanted to tackle. First, second, third, and on and on and on. And here's what the whole plan looks like based on when we did it." And obviously then we change it over time and move goals around, but you should have that. And then it should be laid out in a way that it's not too complicated so that it's full of graphs and charts and things like that. It really should be more of, "Here are the goals, here's what we're going to do right now to try to achieve those goals", and then the progress towards those goals. And I think if you're having trouble with that then, again, requires a conversation. Ask them to explain it because it's your plan, you're paying for it. And so it's like anything else, you want to know what you've got.   Speaker 1: Yeah. Yeah. An older gentleman, older advisor taught me this years ago. I thought it was funny, I may have shared it on here before or not. But he was like, "I like to subscribe to the rule of 11." And I was like, "I don't think I'm familiar with that one." The rule of four and rule of 72, all that kind of stuff. And he's like, "Yeah, if you get your financial plan and then you can't turn around and explain that plan to an 11-year-old, it's too complicated."   Tony Mauro: I would agree with that.   Speaker 1: And I love that, right? Because it's like you got to be able to re-talk it to someone else.   Tony Mauro: Yeah. And you should be able to at least know what your major goals are and what you're doing to accomplish them. Do you need to know what the mutual fund and your retirement plan is doing and what investments they have? Maybe not, unless you're really into it. But yeah, you need to know the basics and you need to be able to explain it. Absolutely.   Speaker 1: Yeah. Definitely. So I thought that was a cute saying. I definitely loved that one.   All right, last one here. I only hear from my advisor when they want me to buy or sell something, I don't really get advice on other things. Absolutely a legitimate concern here. But maybe you should ask yourself what kind of professional did you go to? Because they may just be doing what they do, they may not do these other pieces. And that's kind of on us, I think sometimes, by not vetting out or seeing the right kind of professional we should be working with for the time of life we're in.   Tony Mauro: We should. And what that question is to me is saying the old days where everybody was considered a "broker". And you would see that. You'd see TV shows and movies about that kind of stuff too, but a lot of that's been moving away from transactional and more into an advisory role. And you do need to ask that question of if you've just got a broker... And some people want to do that. Although I don't know if it's as prevalent today, simply because there's so many ways to trade securities yourself now that you may or may not need that. But who knows, maybe you've got somebody that's like that. I think that that's, for most, not what you want. I think you might want more of an advisor, but you definitely should know who you're working with. And I think in our case, one of the things we do before we even take a client on is we sit them down and have them go through a questionnaire and they kind of score themselves.   But one of the landmines that I look for before working with a client is... And you can usually tell this by the way they're talking to you. Is if you just want to sit and trade stocks and have me give you recommendations and/or be the facilitator, I'm not your person because that's not what we do. You don't need us for that. You can go do that on your own. All you're going to end up doing is I think spending extra money. And then on top of that you're going to want us to give you recommendations, and then as soon as give them a bad one the blame game comes out.   Speaker 1: Yeah.   Tony Mauro: So I don't even engage in that. That's not what we do. There might be some advisors that do that, but I'm more focused on the long-term.   Speaker 1: Well yeah, and to your point you're probably working with a broker only. You're working with someone who's a transactional based, commission based person. Now there's nothing wrong with that if you know what it is that you have and if that's what you're looking for. But part of this complaint is I don't get advice on other things, well then you're not probably working with an actual true planner and advisor that is talking about social security and taxation and legacy and so on and so forth. So again, part of that I think is legitimate, but I think it also is a misconception, or could be on our part, for just not finding the right professional to work with. Or not realizing that who we started with is maybe not who we need to end up with kind of thing.   Tony Mauro: That's right. Yeah.   Speaker 1: All right, well there you go. So that's our conversation and podcast this week with Tony Mauro on Plan With The Tax Man. Reach out to Tony if you've got some questions or concerns about your own situation and need to get down to the nitty-gritty and get on the right plan and strategy for yourself. Again, you can find him online at yourplanningpros.com for a consultation and review. Yourplanningpros.com. Tony, thanks for hanging out buddy.   Tony Mauro: All right, well see you next time.   Speaker 1: I'll see you next time right here on the show. This has been Plan With The Tax Man.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency

Almost everyone has made investment mistakes at some point. In this episode, we'll talk about how to bounce back from mistakes and avoid making them again in the future.   Important Links:  Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Speaker 1: ... Back here for another edition of Plan With The Tax Man, into the month of August here in 2023. And it's time to talk about overcoming investment setbacks, bouncing back really if we've had some issues in our financial lives. And that's what we're going to get into this episode and how to, hopefully, avoid some of these again in the future. Things happen, we all make missteps and mistakes, but there's no reason we can't try to correct those and course correct and keep ourselves on the right path to get to and through retirement. So we're going to have that chat with Tony this week here on the podcast. What is going on, my friend? How are you? Tony: I am good. Just still enjoying the summer. It's going to be over before we know it here. Speaker 1: Well, we're into August, so yes. Tony: It'll be state fair time. Speaker 1: There you go. Now I got a little weakness for the funnel cakes there, the elephant ears. Tony: For the [inaudible 00:00:48]. Speaker 1: Yes, whatever you want to call them. Some places they call them elephant ears, someplace they call them funnel cakes. It's the same thing, but at least I think it is anyway. Now I'll tell you something though, I've never had one of these before and I didn't even realize it was a thing until I tried it. Have you ever had what they call the walking taco? I believe that's what they call it, where it's basically all the taco stuff inside a like Doritos bag or a Frito bag. Tony: A chip bag. Speaker 1: Yes, a chip bag. Tony: I have had it. I haven't had it at the fair, but I have had them. That's what they are. Speaker 1: I never saw one before until I saw one at the fair and I was like, "Ooh, this is calling my name. This is incredibly not good for me, but I don't care. I'm going to eat it ..." And it was fantastic. Tony: It is good, yes. Our fair is so big. It's a big highlight around here. And every year they put out what's new at the fair for the food list because everybody goes for the junk food. Speaker 1: Sure. Tony: And it's just incredible what we have. Just weird stuff, like everything's on a stick here. Speaker 1: All right. Tony: And it's fried and it's just crazy, the foods. But I don't know if you guys have a big state fair or not?- Speaker 1: Yes. Tony: ... but ours is big and- Speaker 1: Interesting stuff. Tony: ... I'm actually looking online here. I don't even know what some of this stuff is. Speaker 1: Like snicker bar on a stick? Tony: Yes, deep-fried sweet corn nugget. Sweet corn fried?- Speaker 1: The sweet corn and you deep-fry it. We'll- Tony: Deep-fry it. Speaker 1: Humans will deep-fry anything, I think Tony: I know it. We're Americans. Yes, we do a lot. Speaker 1: That's for sure. But anyway, well, hopefully you guys will enjoy and you don't get too crazy, make yourself sick to your stomach, but- Tony: We'll be bouncing back from fair. Speaker 1: You'll be bouncing back. There you go. Nice segue. I like it. I like that. Tony: That'd be a mistake. Speaker 1: That's right. Well, let's get into some of these financial bounce backs we might need to do. First thing you need to do, if you do have a financial misstep, Tony, is just obviously determine the cause, right? Tony: Yes. Speaker 1: So what's some bullet points here to think about how you got there in the first place? Tony: Well, most people are going to look at this and say, "Well, I mistimed some stock or some investment." Speaker 1: True. Tony: And most of the time what we see is the mistakes themselves are really not starting soon enough. And that means saving, and that's the biggest one of all. Yes, you can miss time and do that, but you shouldn't be trying to time anyway. But really what you got to do is, whatever the mistake is, whether it's that or just not starting soon enough or something else, is- Speaker 1: Bad luck, whatever. Tony: ... Just figure out, say what caused it, what kind of spot I was in my life when it happened, what kind of information did I have available to me? Maybe you're one of those people that listened to everybody but the right people about everything. Speaker 1: I always refer to that as the cousin Eddie, if anybody who's ever- Tony: Cousin Eddie. Speaker 1: ... Watched any of the vacation movies, right? Tony: Yes. Speaker 1: The cousin Eddie moments because he's always doing something goofy or wrong or whatever. He tells you advise and it's usually not good. Tony: It's usually not good. No. And we get that out on the tax side. Clients will call and say, "Well, I heard from such and such." And my first question is, "What does such and such do for a living?" And they'll say, "Well, he's a barber." And I say, "Well, I don't know that's really his realm to be giving that kind of advice." Speaker 1: To give you tax advice, right? Tony: Yes. So you get a lot of that and it's proliferated with the internet. You got to watch you listen to. Speaker 1: Oh, of course, yes. And that's usually the number one source of bad advice any more is the internet. Because it's- Tony: It is. Speaker 1: ... Just so much on there. Tony: There is so much on there. It is. And so you got to watch what you're getting. That could be a whole conversation on its own. You Google a topic and you think it's right, and it may or may not be. There are probably elements that are correct. Speaker 1: Exactly. Tony: But it might not be all of that. Speaker 1: There's actually a whole industry, Tony sorry, wrapped around internet ads that are designed to look like news articles or news stories so that you feel like it has a bit more realism to it. "Oh, this is news related or newsworthy." But it really is just an ad. It's just a solicitation or a sales piece. So definitely easy. So determining the cause, I think, great place. You've got to figure that out. Did you get the right information? Did you get enough information? Was it just bad timing? It's okay, you've made the mistake. You mentioned savings, so now we need to make up that difference we've lost. So what are some things to do as far as increasing our savings rates? Tony: Well, once you've identified the mistake, and if you have lost some money, the easy thing is to increase the savings. That's really not really all that complex on how to do that, but it's easy to be able to increase it. Especially as you progress in life, some of your expenses start to decrease, and so you're going to have more disposable income that you can then take and increase the savings rate. Speaker 1: The government gives us some catch up contribution provisions in various different things. So there's some of that, right? Tony: Yes, you can do that. You pay off a car, continue making the payment, but make it to yourself and put it in your retirement account or your savings account. Speaker 1: As my dad used to call us, maybe get the little ankle biters off of your payroll. He used to call us ankle biters. Tony: When you were kids. Yes, you do. You get the kids out of the house and then all of a sudden you've got an instant raise. And so there's a lot of ways to increase the savings rate. I've seen people go get a second job and say they just want to save more [inaudible 00:06:09]. Speaker 1: Depending on the kind of damage that you've had to the setback. And I think most of the time, if we've just made a mistake, Tony, it's usually not super detrimental, but you do want to recalibrate your goals or recalibrate your plan because maybe you did make a bad investment. Well, let's do something recent, maybe you got on the crypto train or something, and you were a crypto millionaire one week and you were crypto broke the next, whatever it might be. But that's when you say, "So now I've identified the problem. I know what I did wrong. Now we're working towards making that shortfall back up by increasing our savings contributions to paying our future self, AKA retirement fund. So now let's recalibrate that plan or recalibrate the goals." Right? Tony: Yes. And it's easy to do because, again, it doesn't take a lot, especially if you're talking through it with somebody who, well, and say, in my case, we visit with this clients all the time. It could be as easy as maybe delaying retirement for a year, could mean, hey, we just change our lifestyle a little bit and reduce our expenses. It's not going to be something drastic, and maybe you're in a giant home that you need to downsize and you could save some money there. Speaker 1: Sure. Tony: Maybe it's just watching things a little bit more until you feel more comfortable. I think- Speaker 1: You don't get the muscle car you've been wanting, or you don't get the- Tony: No. Speaker 1: Maybe you get the muscle car, but you just don't do all the remodel on it just yet. You don't do all the- Tony: Repairs. Speaker 1: ... Repairs just yet, or... Little ways you can do stuff, right? Tony: Yes. I have a retiree client and she calls me, and really a lot of our conversations are based around, for lack of a better word, me talking her off the ledge because she likes to put money in her home, and she really likes to keep it spruced up and remodeled. And I'm there really more for the sounding board of, well... She's got plenty of money and she could do it, but it's like, "Well, do you really need it right now? Maybe you take it a little slower so it doesn't affect the other fun stuff you like to do." And many times listen to that and follow along on those lines. But I think if she was out on her own, she would probably be dipping into and probably taking much more than she needs. Speaker 1: A little more often. Tony: More often. And then I think she would be not happy with that because she does like to balance it and do other things in life. And- Speaker 1: That's a great point. Tony: Again, balance is the key because- Speaker 1: Well, to me, I don't know, Tony, with all the technology we have at our fingertips now, I think a big portion of what you guys do as financial professionals is what they call behavioral management, right? Tony: It is. Speaker 1: Because- Tony: And much more so than investment management, yes. Speaker 1: It can be, right? Because just about everybody's got the same software, just about everybody's got the same access to the various different things out there, depending on what kind of license that you have as a financial professional, but really it's relationship building and that behavioral management. To your point to that story you just told this client's comfortable calling you up and saying, "All right, I'm thinking about doing something silly. What do you think?" And then you talk through it and you go, "Based on where we're at, go ahead and go for it." Or "If you do, maybe we're going to make a change to that vacation that was planned for next year." Or something like that. Tony: Yes. And then that's all it comes down to is just some simple discussion. Speaker 1: And then rework the plan. Tony: And you got to rework the plan a little bit. It's funny because from our standpoint, we take a lot of notes so we can remind the clients like, "Well, last time we talked you said this, but you can change your mind. But that is what you said last time." It's a fun conversation. You can have fun with it. But it is interesting because I think clients, you could survive it, of course, yourself, but you may make bigger mistakes and take longer to recover- Speaker 1: Sure. Tony: ... Without some advice of some kind. Speaker 1: Well, and I think that's when getting a real plan in place certainly comes into play. So maybe if you're in a situation, Tony, where you've made a financial mistake and you haven't started working with a professional yet, now is the time to really do it. And often, it's like going to the dentist, I hate to equate what you do with going to the dentist, but it's the same kind of feeling sometimes where we're like, I just know he's going to say or she's going to tell me something bad and it's going to cost me pain. In this case, the dentist analogy, and then maybe you wind up going and it's not nearly as bad as you thought. And I think that's what happens with advisors a lot. People are like, "Oh no, I'm going to go in there and I'm going to have to tell them what I did, or I have to show them my stuff and it's going to be painful and they're going to tell me I can never retire." All those kinds of things. Tony: Oh, I know it. Speaker 1: And often it's not nearly as bad as we think that it is. I think as humans, we just do that naturally. Tony: We do. I've actually got a client, as you were saying, that in fact we're emailing back and forth this week, he's an accounting client, not a financial planning client. He's got an advisor. And I don't think the advisor's giving him bad advice, but what the client wants to do, and get this, he's about, I don't know 63, 64, he wants to pull a million dollars out of his retirement account because him and his wife found a little place and a little acreage, and they want to build a house on it. It's just south of where we're at. And he's a big outdoors guy. And so he's trying to rationalize this with me and his advisor as his tax account. And I'm saying, "Well, boy, you're going to owe a lot of tax on that. Maybe you want to split it up." The advisor's telling him, "Well, maybe you want to just go borrow because you're going to pull all this out, and then when you start to need this for income, it's tied up in your house." Which she's got a point too. Speaker 1: Well, she does have a point there, but borrowing right now, it is not a borrower's market. Tony: That's what the client's saying is, it's not a borrower's market. So we're trying to put some numbers together and say, well, if you borrowed, here's how much it's going to cost you, if you spread the tax out. And try to get the best scenario for him, and then he'll have to make that decision. But- Speaker 1: Exactly. Tony: And he's got me on the tax side, his advisor on the advisory side, both trying to help him make the right decision and whatnot. Speaker 1: And that's interesting. Tony: But that goes back to really maybe if he didn't have us, he would probably... Because what he wanted to do is just pull out all the money in one year and pay the taxes. And he thought that would be a better deal than spreading it out. And I said, "No. Here, here's the exact numbers because I've got them right off your tax check." Speaker 1: Going to kick you up a tax bracket and all sorts of stuff. Tony: It would've cost him like $75,000. And I said, at least spread it out to save 75,000. But it's just one of those things though, where even though he has a plan in place, he's changing his plan because he wants something in his life and hey, there's nothing wrong with it. But- Speaker 1: Exactly. They're modifying the plan, that's part of the process because they think life's going to happen, we're going to do different things. And me personally, I think kudos to you and him as well for doing that. But oftentimes many advisors, they struggle with that whole split thing where you're the tax person, the CPA, but you're also not doing the financial side because it is hard when you have two different people giving you, maybe, conflicting advice. So as the person in the middle, sometimes you wind up being in a tough spot, but at the same time, at least he does have those sounding boards. So I think- Tony: He's got that. And for me, if we have an accounting or tax relationship, if they've got an advisor- Speaker 1: Sure. Tony: ... Of course that they like, I like to think we're on the same team. Unless the person was completely crazed and- Speaker 1: Bad advice. Tony: ... Offering horrible advice, but try to be on the same team because- Speaker 1: Sure. Tony: ... I don't want to interfere with that relationship and you just don't know. But some accountants don't like it, some advisors don't like it. Speaker 1: I was going to say, it just depends on the relationship and again, kudos to everybody from making that work. But that's a great illustration though of why even if you make a mistake or have a looming mistake, having a financial team to help you out can go a long way towards hopefully staving off a financial mistake or bouncing back from one. So that was a topic this week. Hopefully that helps out a little bit. And if you have made a mistake and you're worried about going and seeing a finance professional, don't. The longer you procrastinate, just like that tooth, that dentist analogy I was going with, it's only going to hurt worse. It's only going to get worse if you ignore it. And when you finally do go to the dentist and then you maybe have to have a root canal and then it's all more expensive and more painful. So go find out what you need. Go get a plan together for where you're at in life, whether you've made any mistakes or not. And that way, even if the news is not great, at least you know what you now need to start doing in order to get yourself into that better spot. Sooner is always better than later. So get yourself onto the calendar. Reach out to Tony and his team at yourplanningpros.com. That's your planningpros.com. He is a CPA, a CFP, an EA of 27 plus years experience. So get onto the calendar today at yourplanningpros.com Tony, thanks for hanging out, buddy. Tony: We'll see you next time. Speaker 1: See you later on this month, in August, we'll be getting closer to football season for all you football bands. So we will catch you next time here on Plan With The Tax Man with Tony Mauro from Tax Doctor Inc. Don't forget to subscribe on Apple, Google, and Spotify.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Today's episode is all about understanding the crucial role of income analysis in retirement planning. We'll uncover the secrets of guaranteed income versus the uncertain stuff and shed light on the consequences of retiring without a clear income plan. Don't worry if you're feeling lost - we've got your back with practical solutions and expert guidance. Tune in and take charge of your retirement cash flow!   Important Links:  Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Speaker 1  0:00  Welcome into another edition of the podcast. It's playing with the tax man with Tony Mauro and myself here to talk about mastering some retirement cash flow really kind of understanding income is going to be the topic conversation on the podcast this week with Tony. Who is de Moines professional alternative at tax Doctor Inc. And you can find them online at your planning proz.com at your planning proz.com What's going on, buddy? How are you?   Speaker 2  0:25  I'm good enjoying the summer? How about you?   Speaker 1  0:27  Yeah, pretty much the same. It's been a bit of wet one, though. It's been a lot of lot of rain. Yeah, down here where we're at. It's been a lot of rain. So   Speaker 2  0:32  yeah, we have not had a lot of rain. And we just got some scoring well needed. Yeah, it's funny   Speaker 1  0:37  how the country does that Right? Talk to several people all the time every week. And it's, it's always a little something different. And then whatever neck of the woods you happen to be in. So right here lately, it's just been been really wet. So our Fourth of July got kind of rained out. But that's okay. We still had a good time and with family and friends. And so everybody out for everybody else that as well. We are back here. This is for our our later July edition here. So this is our second half of July. So let's get into understanding some income. Because you know, cash is king. We've heard that Tony a million times. But in retirement incomes King right? Income is always King in retirement. Absolutely. Yeah. I mean, I guess it is all the time. But it's really, it's really more important, or certainly critically important in retirement. So what's kind of some scenarios that some issues that you can be looking at, if you don't really have a good clear picture of your retirement income?   Speaker 2  1:33  If you're, you know, if you're kind of DIY, and you're thinking, well, I'll just figure it out when I get there. What are some of the issues you've seen people bump into, you know, I've seen, I've seen a lot of it up this way. And some of the people that own land, and farms and whatnot can probably relate to this. But I've seen, you know, retirees come in, and they'll say, you know, I'm ready to hang it up. But I've, I've got all this land, you know, but the land itself isn't really producing any income. So while they have a lot of assets, that that asset or assets isn't really throwing off any income? I see that a lot. Yeah, yeah, I see a lot of people trying to work their retirement income from a basket of, or a portfolio of securities that they had when they were younger, and trying to kind of make shift pull money out, you know, as they need it. Because they don't have a real clear picture. In other words, most of the time, it's, you know, not income generating stocks, and they're just going to wait for prices to go up. And, you know, hopefully sell and make gains and use that when that doesn't happen, or, or it takes longer than expected. They're stuck with out income. Well, I'd like to make life app,   Speaker 1  2:36  I guess what we should do is maybe identify some potential sources of income that people might have as a retired person. So what are some examples of different places that you know, you might be able to draw income from depending on obviously your life? Right? Well,   Speaker 2  2:51  I mean, the list is long, but the easy ones are, you know, your 401 K's pensions, if you have one, IRAs, of course, Social Security. Yeah, that's the big one. Everybody knows if you have some annuities, dividends and income and interest income from either investments, or bank accounts, CDs, things like that bonds, some of you could have some other type of income, you know, maybe you're working part time, maybe you are doing a little side hustle. And you've got some income coming from that. Yeah, yeah, sure. All of those things are potentials, but the three or four biggies prior Social Security, IRAs and 401 K's.   Speaker 1  3:29  So you know, we talk often about being diversified Tony in the realm of investments. And I think that's where people's mind goes to, okay, I need to be diversified and not have too much in large cap or, you know, or something like that. But you really also want diversification of income sources. So you're not relying overly heavily on just one. And obviously, the big one here to think about is if you've not done any planning, or you've not done any savings properly, or some things happen in your own social security, either completely, or it's making most of what you need to live on. And I'll throw my mom under the bus with this, because unfortunately, that's where she's at in her life in her 80s. Now, I help her out. But you know, from her own potential standpoint, that's where she got she lost just about everything in the Oh, eight downturn, and in addition to some bad choices and things of that nature. She's on Social Security only. And that is clearly not where we want to be.   Speaker 2  4:23  That's definitely not really where you want to be. And I've seen that too. And I've seen tax clients that get to the end. And that's really it. Because at that point, you are, it's impossible to try to generate other sources of income, you know, because your timetable it's got Yeah, it's just too late, you know, and so most of these sources need to be thought out along the way. And so which, again, begs the question of, you got to you got to get a plan and you got to work the plan, which we're always talking about. And, you know, that   Speaker 1  4:52  importance of saving, you know, paying your future self right, Exactly.   Speaker 2  4:57  Yeah, I mean, that's what it isn't, you know, it's hard for to take Get a 65 year old and even if they've got a large portfolio, say of of stocks or bonds or something like that and say, well, let's, let's let's diversify a little bit and go out and buy for rentals, you know, that might not be the wisest move, because, you know, they take, even though they could throw off some income, for example, well, you know, that's actually work, you know, and they may not be the wisest of choices. But you know, for a guy that's had rentals for a long time and wants to continue to have them in retirement, you know, it's a great another source. But I do think you're right, we're really trying to aim for before we even talk about what types of earnings you're getting on them or what the income is, but the different sources, the I think the more you different sources you have the more potential to really live the retirement you want.   Speaker 1  5:43  Exactly. And that way, you're not overly reliant on any one thing, which again, is that diversification key. So let's talk about the two kinds of income in the way that most advisors, I think, probably categorize this or people have heard it, which is going to be what, what are the two kind of ways we would think about income? Well, a lot of times people think about it as guaranteed versus not guaranteed. Right. And, you know, I like to phrase it a you know, on the guaranteed side is guaranteed for as long as you live. So security first. Yeah, that's the first security.   Speaker 2  6:19  yeah. If you have an annuity and you annuitize it, you know, it kind of becomes like a social security payment. It's annuitize.   Speaker 1  6:26  So security check even say annuity on the top of it, I think. I think it does, yeah, anyway.   Speaker 2  6:31  So those are the two, you know, and if you do and are lucky enough to have an old fashioned pension that works the same way, you know, it's a monthly income stream for life. So if you've got those, those are kind of, you can't make changes to them. You know, I mean, you get x and that's it. It's over when generally,   Speaker 1  6:49  yeah, whatever you like, whenever you turn on your Social Security, you know, that's your that's what you're locked into that kind of, that's what you're like, yeah, and you're not guaranteed is that's going to be the that's gonna be our personal stuff, right?   Speaker 2  7:00  As we all have personal stuff, your IRAs 401 K savings, you know, pretty much everything else that you're kind of hoping to use in retirement, and I say non guaranteed, because it you know, you have to initiate, I mean, even if the IRA or 401 K or your investments, you know, fully invested, you got to initiate Okay, and figure out how much is it going to earn? And how much can I take, and so in that could fluctuate a little bit. And that's why most advisors when they start talking about retirement, you know, and you hear a lot about, well, what's the sustainable rate? You know, is it 4%? Is it 3% 5% That I can take out month in month out every year, you know, and maybe not use my principal, or maybe some of my principal, but because retirees, you know, we're, again, we're thinking about that income of how much do I need every month? And then how much you know, above that? Do I do I want?   Speaker 1  7:52  Well, so if we're thinking about guaranteed versus non guaranteed now, balance was where I was going to go with this, I got ahead of myself. So you know, somebody might say, well, what's the proper balance? Like, I want more of the guaranteed many of us would just say that, because we feel like, okay, great, that means that we're covered. But often if you're thinking about this, okay, so if that's where the strategizing comes in, because let's say you've got your, your assets that you've built up of, let's just keep it an easy number, a million dollars, right? And a 401k, or whatever, you know, various different sources like that. And then you got your Social Security, your polling, and the balance that comes into play, Tony, when you're trying to figure out how much you need to pull from what place at what time to create that difference of that shortfall, but also not cause yourself taxation issues, correct?   Speaker 2  8:36  Correct. Yeah. And that's where the good planning comes in more for retirees. I think that even people, you know, just trying to get to the end, right. They're working because, yeah, yeah, in the working years, but it really comes down to, you know, sitting down and trying to analyze what your expenses are, so you can figure out what is covered what isn't, I think a lot of times, people don't realize that, even on the non guaranteed side, once you get this number, or your shortfall number. And depending on what you have, you know, it's fairly easily to predict, especially with today's software, where you can take a person's, let's say, let's say they had a million dollars, and we were going to assume a 4% withdrawal rate you can easily see based on different investments scenarios, how much predictability or what percentage of the time if they live to say 95 to 100? Would they absolutely run out of money and, and so then they could sit there and say, okay, so you know, there's a, for example, a 95% chance, if I have x amount of my guaranteed side, and I take my Million Dollar Portfolio invested in such a way that it's going to throw off X that I'm never going to run out of money and I I've already got everything covered, plus what I want to do and then they can feel good about that, you know, and that's, that's where the numbers come in.   Speaker 1  9:55  Well, now many of us have heard the term paycheck and play check. And if not, I think that was actually coined by Tom hegner, I believe, financial professional as well, you know, so typically, we might think of, okay, well, I need that guaranteed money. That's my quote unquote, paycheck, right? That's covering my must haves and must haves, or you know, the house, rent, or mortgage or food, right? You know, the things we have to have. And then the paycheck side, often people say, well, that's gonna be the non guaranteed and that's the fun stuff in retirement. Do you see that as kind of accurate? Or is that still a really is there other strategizing to where maybe we want to try to pay for everything out of those paychecks and then let the paychecks grow or be really special.   Speaker 2  10:40  you know, a one off kind of deals, I suggest that to some people that are in in the position where they're guaranteed side can cover everything. Right, you know, I don't have any clients right now that have taken me up on that, you know, that say, I want my my stash my paycheck side to just sit and grow for legacy for right. Yeah,   Unknown Speaker  11:00  I guess it depends on your what you want. Right? Legacy is a great, yeah.   Speaker 2  11:03  Yeah. But it is it is a point to consider. I mean, most of the people that we work with, even their you know, without increasing their, their lifestyle, the guaranteed side, the paycheck side is not generally fully covered by guaranteed stuff. Right. And so we all right, yeah, it's a shortfall. Yeah. And so we're kind of dipping into and then we got to show them. Well, you know, but you know, that shortfall could easily be covered by the other side of things. Yeah, the   Speaker 1  11:31  million bucks put away. Let's say that was the exam. Yeah. And that's I think that's where most of us go right, Tony, I mean, because unless you're lucky enough to have a pension. And so because, like the like the milking stool philosophy, right, the analogy, excuse me, were the three legs of a milking stool, right you so if you've got a pension and Social Security, usually a fairly modest or even or a good, you know, nest egg built of your own, you may not have to touch that nest egg very often, because the Social Security in the pension covers it. But most of us are not in that boat. So Right. So that shortfall is a little bigger, because we don't have that quote unquote, pension leg. That's true. Yes. And even,   Speaker 2  12:06  I mean, it's hard to to find these days, where they've got that, you know, because most people aren't in, you know, a place for 3540 years, most places don't have pensions, like government, right, or stay at, let's say, government. And so there is that shortfall. Now, in my own personal situation, my wife happens to be in a government spot. She's been there for 35 years. And so she has our IPERs, which, even though it's extremely good, you know, it doesn't replace 100% of her salary, but it replaces about 70%. And so the   Speaker 1  12:38  shortfall, you gotta kind of you may have to look at like your own personal nest egg, correct my own   Speaker 2  12:42  personal essay, and then she's gonna have Social Security on top of that. So I think with, like, in her case, about 80% of her pre retirement income is going to be covered. And so that's pretty pretty darn close, you know, and then with the other investments, you know, we have and whatnot that that's our play, check slash, fill in the gap money. And that's what you go with, you know, when you got to get engineering   Speaker 1  13:08  well, so and this is where I guess the strategizing of maximization for your income streams or sources, comes into play, right? So having a good conversation, having a good strategy, put together with an advisor, like yourself, so we can it cuz we hear like terms like, hey, get us Social Security Maximization, right? For example. What's the strategy for doing that? And that's really where working with a Pro comes into place is we talk all the time, Tony about the DIY movement of the last number of years has been very easy. It's in it's been easy for quite a while, let's be honest, to accumulate money, right? So if you do the basics, you can probably save, you know, for your future self. But the retirement aspect, that preservation distribution, and the little funky nuances of how to maximize this, what's the best strategy for that? How's it gonna affect tax aid, you know, taxation by taking this money out at this time, and so on. And so that's where the nitty gritty gets really tough for folks. And that's where, obviously, you know, folks like you come in   Speaker 2  14:05  it is and even with a Social Security, you know, planning for because everybody's got the question, Well, should I take it early? Or? I'm gonna take it a second I, you know, I for retirement benefits they owe me it's mine. Right? Yeah, it's mine, you know, and so I tried to talk to him about well, but if we do this, based on what you have, it might be better to wait, you know, type of thing. And I know, and big money that we're talking to, can be big money, big money. And in my own case, again, back to my wife's pension, you know, the, one of the decisions we'll have to make is, well, do we want to just take the straight pension and then when she dies, if she dies before me, I'm out, or do we want to make sure it takes a little less and so you know, if she dies before me, I've still got it till I die, you know, and then run that it's over. So it's those kinds of little decisions you got to put a pencil to and try to figure out what's best for your own situation.   Speaker 1  14:57  Yeah, and often you definitely want to make sure you're making the right one there. or because, depending again on the strategy, because some people might say, well, we're gonna take the bigger dollar option, which does eliminate the spousal often, right. And so if you do that you better have that backup plan in place to know that the spouse is still covered, once that pension runs out, so or the exactly person passes away prematurely, or, you know, whatever the case might be. So there's a lot of little nuances to that. So understanding your income is really important. So this is kind of a quick rundown of some of some different categories you might find. And, again, the guaranteed versus the non guaranteed and how they kind of all play together. And that's why it's important to get a plan and a strategy. So if you need some help, and you're not already working with Tony, reach out to him and have a conversation, hopefully this kind of sparked some interest for you to start thinking about, Yeah, where is my income sources coming from? Or how do I make my 401 K and income source, things like that? Reach out to Tony and his team at tax Doctor Inc. find them online at your planning proz.com That's you're planning proz.com or call him at 844-707-7381. And don't forget to subscribe to the podcast playing with the tax man on Apple, Google or Spotify. Alright, Tony, thanks for hanging out, buddy. I appreciate it.   Unknown Speaker  16:06  All right. We'll see you next time. Yeah,   Speaker 1  16:07  I'll see you in a couple of weeks and we'll be back in August with a new episode here on plan with the tax man   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

On this week's show, we'll answer some mailbag questions that have come in. We'll discuss if you should pay off your house, financially support adult children, and how often you should communicate with your advisor.   Important Links:  Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript:  Speaker 1: Back for another edition of Plan With The Tax Man, with Tony Mauro, from Tax Doctor Inc. We're going to talk, well, actually, email questions this week. We haven't done an email show for a while, so we're going to take some questions from folks that have sent stuff into the office, or the website at yourplanningpros.com. That's yourplanningpros.com. You can get your questions asked and answered, and get yourself some time on Tony's calendar to sit down and talk about your retirement situation, or your tax situation. Tony is a CPA, CFP and EA of over 27 years experience, and a great resource for you to tap into here. Well, he's got clients all over the place, but his office is in Des Moines, so reach out to him online at yourplanningpros.com. What's going on, my friend? How are you? Tony : I'm good. Enjoying the summer. How about you? Speaker 1: Doing the same. Hanging in there, rocking and rolling. Well, actually, about the time we're going to drop this, it's going to be probably right after 4th of July, so I hope that you had a good 4th of July. We're taping it ahead of 4th of July, but we're dropping it after, so hopefully you have a good one. Tony : Yeah, yeah. Hopefully everybody out there is going to get out and get a chance to enjoy the summertime. I like the summers the best. Speaker 1: Any 4th of July plans, both since we're ahead of time? Tony : Not much for us this year. Probably just relaxing around home a little bit. Maybe playing a little golf, and watch fireworks. Yeah. Speaker 1: There you go. Sounds like a plan. Yeah, we got some family coming in. We'll be around the pool, hot dogs and burgers, and all that good stuff. Classic 4th of July for us. Anyway, hope everybody has a good one, and had a good one, I should say by the time you're catching this podcast. But let's go ahead and take some email questions, Tony, from around the area, we'll have a fairly short podcast this week, but we'll see if we can help some folks out. We got an email from Tony, and it was not you. Tony : Yep. Speaker 1: But Tony did say, "Hey, Tony, I'm hesitant to pay off my house, because I don't have many other tax deductions at this point, but I do have a hundred grand on the bank, and only owe 45 grand on the house, so I'm really tempted to pay it off. What's your thoughts?" Tony : I'd tell Tony to pay it off. Speaker 1: Yeah? Tony : I'll tell you why. A lot of people get hung up on, "I don't have any other tax deductions," and they don't realize how, especially with only a $45,000 mortgage, how little their tax deduction really is, if even they can use it on the federal side, because they don't have a lot of other deductions. This particular deduction goes on a schedule A, and there's a threshold you have to get over, which is, for singles $12,000 and some change. If you don't have other deductions to get you over that, you won't even be able to use it. I would say that even if, let's say your mortgage interest, for example, is $2,000, $3,000 a year on that, probably even be [inaudible 00:02:37] by now, your tax savings, if you're in a 20% bracket, maybe $600 versus, I don't know how much you're spending on the mortgage, but let's say your mortgage payment's $800 a month, times 12, that's $9,600 a year. I'd rather have that in my cash flow, and build that a hundred thousand back up. Then keep letting that money grow. Speaker 1: Yeah. Tony : That's my philosophy. I'm not a big debt guy. Especially, I like to not have a lot of debt, and I advise people not to carry a lot of debt. Speaker 1: Now, the tax deduction- Tony : Obviously... Oh, go ahead. Speaker 1: Sorry, I didn't mean to cut you off there. The tax deduction part of this question is a moot point right now, correct? Tony : It is. Speaker 1: Yeah. Tony : Yeah, it is a moot point. I think that you're better off long-term, is snowballing your cash flow, and it won't take you long to recoup the money, the $45,000. Then it's just all gravy from there, and you're out of that debt. But obviously, you can't do that if you're a young person going out, and just buying their first home, generally. Speaker 1: Right, right. Tony : But you could try to pay it off early. Speaker 1: Well, this is always an interesting question, when we get something like this, Tony, because first of all, okay, he's probably still sitting on a pretty nice rate, right? Tony : Sure. Speaker 1: He's got a $100,000 in the bank, he owes $45,000, he's probably paying like 3%, is my guess. He's probably had this mortgage for a while. It's probably before the rates started going back up. Many people do find themselves wondering, "Well okay, right now, even at in a CD I could get 5%, is it worth doing a short-term CD, or something, and getting more than I'm losing on the house? But to your point, there's the emotional factor, and he's so close that it's like, "Well, all right, maybe this difference is not that massive," that it's not draining you down too much. I think that's always the math. Then you do all the math, and then you add in the tummy factor to go, "Just how much better would I feel not having the mortgage on my head?" Tony : That's right. Speaker 1: Yeah. Tony : That's right, and multiply that out over the number of years. But at the end of the day, yeah, it's the math, and it's pretty easy math to do, you just got to lay it all out. Speaker 1: Yeah, very true. All right, well great question, Tony. Thank you so much for listening to the podcast, and congratulations on being in such great shape as well. $45,000 on the house is, obviously, awfully fantastic. Whatever you do there, certainly kudos for that. Of course the team's going to reach out to you anyway, since you've submitted the email and has. But for other folks who are in a similar situation, that's why we share these emails, because if it's happening for one person, it's probably happening to another somewhere. That way, if you've got a similar question, you can run the numbers specifically for yourself by reaching out to Tony and his team at Tax Doctor Inc. You can find them online at yourplanningpros.com. All right, let's go to David. David says, "Tony, I'm positive that I have more than enough money saved to last the rest of my life. There's just no way I could spend it all. I'm not bragging, I just find myself to be in a blessed position. Is there any advice you'd give to someone like me, or can I just coast, financially speaking?" Tony : Yeah, I would say to David, not knowing any more than what you've submitted, I would say, and this is a little bit of a fun response, but prove it. What I mean by that is, congrats on the fact that you think you've saved enough, but maybe get some advice from your advisor, or someone else, put in some numbers to it just to see. Because one person might say, "I have enough to for the rest of my life," and that could be a million. Another person, it may take 10 million. You just don't know, because it depends on your spending habits, and what some of the things you want to do are. Then of course your longevity, and everything else. I would just maybe double check it. Get an opinion, and then if that verifies it, then I would say work the plan you've got, and then you could be, quote, on Easy Street the rest of your life. But maybe you might find something that you didn't think of, and you might have to rethink a couple of things there. Speaker 1: When it comes to situations like David's, always good just to find out for sure. He says he knows, and he's not bragging. I guess my first question, when I see stuff like this, Tony, is, well, how do you know for sure? Is it because you've done the math, and you've run it out? He may be right. Is it because you've sat down and talked with a professional, and you have a written plan and a strategy that you know you're fine? Or are you back of the napkin this? Now granted, I don't know David. If you're sitting on $40 million, you probably are good. Tony : Absolutely, yeah. Speaker 1: But if it's the age-old question of, "Hey, I've got 2 million bucks," or, "I've got a million bucks," or whatever, "I'm in great shape." Maybe, right? Tony : Maybe. Speaker 1: There's so many variables. I hope that you are in a great shape, and I would say, to find out if you could coast, just sit down and have a complimentary review done, and find out. Run the numbers, make sure. Stress test it for multiple scenarios, whether if you check out our prior podcast, whether something comes up like a medical issue, or something. There's just lots of things that could come up and derail you. Just have them stress test it, Tony. That's one of the things you guys do. You can run various scenarios in case he is incorrect or correct. Tony : We can, yeah. With today's software, on the financial planning side, you can easily take a portfolio, and run run the numbers, ask him a few easy questions on how long would you like to run this for, and your life expectancy type thing. Give me a rate, a good conservative rate, and the software is going to spit out and say, "Your chances of outliving your money are only 5%, or maybe it's 0%." In other words, you've got enough money, based on what you've told it, you are right, or maybe you aren't as as you thought. Speaker 1: Yeah, very true. Especially when it's complimentary, and it's easy to do, no reason not to get a second opinion on the strategy you have in place. Great question. Thanks so much for listening to the podcast. We certainly appreciate it. All right, let's go to Kate. Kate's got a tough one here. She says, "Tony, my son's 27 years old, hasn't landed a legitimate job since he finished college four years ago. We've been supporting him, car insurance, cell phone, that kind of thing. I'm not going to be able to continue to do this much longer; in a couple of years I plan to retire. How do I cut him off without making this a big problem?" That's a tough one, right, Tony? Because there's a fine line between helping and enabling. Tony : There is. That that's a tough one, and it comes a lot down to how you think. My personal opinion would be, well, a couple of things, I guess, is if he's 27, he's been out for four years. I don't know what legitimate job means. Is he working at all? But let's say that he is, or if he isn't, well then that that's a different problem, then you probably are enabling him, and not forcing him to find something. But if he just is working, and maybe not making the money he thought he was going to, or whatnot, then I think by helping him, maybe you're not enabling him, but at some point you have to have a tough conversation. Just explain it to him that we need to start weaning you off, or cutting this back. Maybe you do it in steps to help him out, rather than just pulling the rug out from under him. There are things that people can do. I tell my own son this is, there's easy ways to go make more money. One is just go work more, trade your time for money. If you have to do it to pay your bills, you'll find a way, generally. That's a little bit more of the tough love, I guess you could say. Speaker 1: I agree, Tony, and I think a lot of times, what happens to people in this situation is some people will come in to see you, and sit down for a planning process. They'll say, "Hey, we want to enjoy our retirement. Whatever's left over, the kids get." I think, to me, that's the healthiest approach. Others will say, "We want to leave them a bunch," and others will say, "We're doing something like Kate's doing, and we're doing a ton of helping." But at some point, you start to sacrifice your own retirement, and the success of your retirement plan. Maybe Kate's plan has gone from all this helping, has gone from 100% surety for her own retirement, her and maybe her spouse, down to 80%. Is 80% good enough for you? If you keep helping him, if it goes down to 70% chance that you're going to be okay in retirement, is that acceptable? At some point, we have to not help our kids to the detriment of our own life. Because what's going to happen is, Kate, you're going to end up on his couch at some point. It's going to flip. [inaudible 00:11:18] Right? Tony : Yeah, it's going to flip. Speaker 1: Then neither one of you're going to be happy. It's tough. Tony : It is. I've seen it. That happens, and I don't understand it. I see it with clients, and even some family members, that are still helping their kids, and they're 30 years old and married, and they both have jobs. It isn't like they're destitute. I could see if your child, and I would help my kid as well. Speaker 1: Yeah, we all- Tony : He falls on hard times, everybody's going to help him, but with some constraints, and some, maybe, rules, and whatnot. I don't think you want to let them get to a point where they know that, or maybe they don't know, but they just feel like, "Well, Mom and Dad's always going to be there, no matter what." Which we are, but most of us probably want to stay in the background, only help if you really fall on tough times. I think some of these young people, I don't know, I just feel like they're just freewheeling. I think they need to do a little bit more to help themselves. If, truly, he's in a profession, he's not making the money he wants. He's young enough, he certainly can go out and find something new, and maybe even retrain, go take some classes. Speaker 1: Yeah, and to your point, you started to touch on something there, and we'll move on to the next one. But also, does he know how badly he's affecting your retirement, Kate? If you're not being honest with him either, and you're just helping him, and not saying, "Hey, listen, we need to have a chat, because this is what it's doing to us." He may be, like, "Oh crap, I didn't mean to do that. Let's make some changes." Tony : Absolutely. Speaker 1: It's got to be communication in there, as well. Lots of things to think about. Great question. Tough spot to be in, Kate, but I think you're probably doing yourself, and him, a service by starting to cut this off, in some form or fashion. But anyway, always talk with the professional, make sure, also, again, another reason to run the review, Tony, to make sure that Kate's own retirement is not in bad peril from the help itself. Tony : Exactly. Yeah. Speaker 1: All right, final one this week. Laura says, "Tony, I like my financial advisor. I enjoy the podcast, so I've been listening. It's nice to listen to you guys. I'm reaching out because, well, they're hard to get in touch with. I rarely get phone calls returned, and I just wonder if my account is not large enough for him to pay attention to me. I've got about $350,000 with him, and I believe most of his clients are doing considerably better than I am. Is this a common problem within the industry?" Tony : In some cases it might be, but to dissect it a little bit for Laura, it depends on how much, since I don't know how much you're trying to get ahold of him, because some clients tend to think, in his corner on this, defending him a little bit. But just basically, if a client thinks that they need a call every week, every two weeks, just to discuss market conditions, that might be, and hopefully you're not that way, but generally, then they get mad when the advisor won't call them back. Speaker 1: Sure, that's a little unreasonable, because you've got tons of clients, but- Tony : It's unreasonable, yeah. But at the same time, he or she should, when you decide to work with them, be very upfront about the communication, how much of it is going to happen, and how often, because often that way everybody's on the same page. Speaker 1: How often you [inaudible 00:14:45] meetings and stuff like that, right? Tony : Yeah. You're just setting expectations. Speaker 1: Yup. Tony : If they haven't done that with you, or even if they have, and you're just talking about what I would consider probably once a quarter type of call, when you're getting together and reviewing things, even if it's every other quarter, so twice a year, then I think that they should at least be cordial, and prompt enough to, if not return the call, get your questions answered somehow, whether it be a quick Zoom call or email. Speaker 1: I would think, Tony, in a situation where, maybe the client's being a little unreasonable, and again, we don't know that Laura is, we're just talking speculation, but if a client is being unreasonable, someone on the staff is probably going to be reaching out anyway saying, "Look, we've addressed this conversation, or whatever. We just don't have the manpower, or whatever, to every single time. That's what the plan is for. We got to stick with the plan." If you want to schedule a review, that's a different conversation, I guess. But yeah, I think a lot of people find themselves in this situation with advisors, or they've been with a firm for a while, and unfortunately I think there is some truth to the size of the account. Sometimes it's not a big enough account for them to jump up when, maybe, a random call does come in, versus a scheduled one. Think about the size of the firm, Tony, you guys are what I would call a boutique firm, versus- Tony : I would say we're boutique firm. Speaker 1: Yeah, versus a giant big box with 35 advisors in a building, four story building, or something like that. Because that's what you choose. You want a small boutique firm. Some clients are looking for that, because there they do feel like they're a name, not a number. Maybe Laura's working at a firm where she feels more like a number. I don't know. Tony : She could be. If the financial advisor's doing, what I feel like they should be doing, is that when a client calls in, they may not be able to jump right on the call, but- Speaker 1: Of course not. Right. Yeah. Tony : But they should have a staff in place to say, "Okay, well, let's schedule a call for this date, and then let me know what we're going to be talking about." Then we jump on a call, and we do it. But I think some advisors, it is true out there, where they institute minimums, because it is a business at the end of the day. Some advisors have this stigma of, "I can't really make any legitimate living unless my clients have X with me." Speaker 1: Right. Tony : That, I think, is to the detriment of everybody. But I understand, because there are people out there that, and there's nothing wrong with it, because you got to start somewhere that, I want to open up a $2,000 IRA this year, and I want weekly meetings, and we want to discuss. Most advisors are going to say, "Well, that's just not profitable for me. Speaker 1: Yeah, that's not the right business model for- Tony : ... at the end of the day. Speaker 1: Yeah. Tony : Yeah. Speaker 1: That's the other piece of it too. That's the expectation conversation you brought up. Tony : Yes. Speaker 1: Not only when you go to sit down with someone is the expectations about the meetings, and how often you're getting together and discussing things, and the strategy and the plan, but also, is it a worthwhile business venture for both? I think a lot of times people are auditioning an advisor, they don't realize the advisor is auditioning them right back. It's got to be a good relationship both ways. Tony : It really does. When we interview clients, we basically, we'll sit them down in a room, by themselves, with a sheet of paper. It's got about 10 or 12 questions on it, and they'll just rate themselves, and we say, "We'll be back in 20 minutes." Then we come in, and start discussing, and I'm auditioning them as well. I'm looking for landmines. Speaker 1: Yeah. Tony : I'm looking for, "Do they really have some pain that they need help with, or want help versus I just want somebody to talk to, type of thing?" Speaker 1: Yeah. Yeah. Because at the end of the day, you can't help, literally, every person. Tony : You can't. Speaker 1: You'd love to, but at the same time, your business model is that boutique firm. There's only so many hours in a day that you can see people. Tony : That you can do it, yeah. Speaker 1: But I would say with Laura, $350,000 is not $3,500. Tony : No, not at all. Speaker 1: I would say it's a substantial amount of money, I think, to anybody. They should at least be getting back in touch with you somehow, and scheduling calls. Tony : Yeah. Speaker 1: Because I don't think that would be right. Okay. All right. Well, great questions and of course, obviously, Tony and his team are going to reach out to everyone, and have reached out to folks that sent these emails in. But if you've got similar questions, or you feel like you're in a similar boat, reach out to Tony and his staff, and have a conversation for yourself. Get set up with a time to come in for a complimentary review with the team at Tax Doctor Inc. You can find them online at yourplanningpros.com. Don't forget to subscribe to the podcast on Apple, Google, or Spotify, which you can find at the website as well. Again, it's yourplanningpros.com, and you can drop an email if you'd like as well. We take some from time to time, and ask him here on the show. But either way, reach out to a qualified professional, like Tony, he's been helping families for many, many, many years. He's a CPA, CFP, and an EA, and he's here to help. Tony, thanks for hanging out, buddy, and answering these questions. I always appreciate your time. Tony : All right, we'll see you next time. Speaker 1: Yep, absolutely. We'll see you a little later on, in July. In the meantime, enjoy the summer, and we'll catch you later on Plan With The Tax Man.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Are you ready to take control of your finances during life's most pivotal moments? In this episode, we dive into the complex world of financial decision-making during key life events. From the excitement of marriage and the joy of welcoming a new child to the challenges of divorce and the loss of a loved one, we'll provide practical tips and guidance to help you make informed decisions and maintain financial stability. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript Of Today's Show: Speaker 1: Welcome into this week's edition of the podcast folks. Thanks for tuning in to Plan With The Tax Man. Always glad to have you here as Tony and I talk investing, finance and retirement, and we're going to talk about some key financial decisions during major life events. So I've got several of these. We'll try to get to as many as we can, but it's always important to kind of try to keep a level head through major life events, and we know that's usually not possible in many cases. So that's where I think having an advisor in your corner, having a quality professional there can help you when dealing with some of these things. So we'll have Tony highlight some areas to think about from that financial standpoint during these. Tony, what's going on buddy? How are you?   Tony Mauro: I'm doing well, thank you. Summers in full swing and trying to enjoy it. Weather's good.   Speaker 1: Yeah, there you go. Exactly. I know that you've been doing this obviously a long time and you've seen lots of different scenarios and situations, so it'll work pretty well I think for you to kind of give us some things to think about, whether they're positives or negatives, right, some of these life events here, some are positives, some are negative, and just some financial highlights to make sure that we're thinking about should one of these things happen to us, because many of these on this list are going to happen to probably all of us along the way somewhere. And some of them hopefully will not, but it's possible. So let's go through and have you give us some highlights, shall we?   Tony Mauro: Okay. Sounds good.   Speaker 1: All right, let's jump in here. We'll start with me. I know you primarily are listening audiences, retirees, pre-retirees but you do have some younger clients as well, and so maybe it's a first marriage. Right. So let's start with marriage and just say there's definitely things you want to consider and think about when you're younger, even if you got married later in life. I was 33 before I got married, the first, well, I've only been married the one time, but started to say the first time, it's only been the one time, but I was 33. Right. So I was already fairly established. So there's things to think about whenever you're jumping into that.   Tony Mauro: There is. And marriage for a lot of us is, it is eyeopening, like you said, in a lot of ways and some of this financial stuff, nobody really talks to you about. And so I'm glad we starting with this one because my own son got married last year at 26,   Speaker 1: Okay.   Tony Mauro: And so he's had to go through some of the stuff and we had kind of some of the same conversations because there isn't just some book out there, you could just go read and have it all down, and none of this really is necessarily black and white, right or wrong. It's just different ways to do things. But one of the biggest ones, and one of the first ones is, is now you've got generally, especially if you're younger, you've got two people working. So you've got two sources of income. So it's all about the finances and what are you going to do. Now you've got one set of bills, who's going to pay them?   Are we combining our money and paying everything out and then we spend the rest, or that's what I get a lot. Others come to me and say, well, he's going to pay these bills, I'm going to pay these bills, and then the rest we'll decide what we want to do. So I think that's a big thing because that's hard for a lot of people whether you're going to, especially if you've, maybe you are a little older and you used to living on your own and just paying all your own bills.   Speaker 1: Yeah. Yep.   Tony Mauro: And do we have a joint account? Do we have two separate accounts? I think that's key. If you say, well, what's your opinion? If you asking me my opinion,   Speaker 1: Right.   Tony Mauro: I tend to lean towards the joint account because I think now you're one team, you're one. Right. And everybody needs to be involved. It's not like the old days where all the guys paid all the bills and the women stayed home and cooked type of thing. I mean,   Speaker 1: Yeah.   Tony Mauro: Both people are usually working.   Speaker 1: Yeah. They definitely are. I think the modern era too, though, it's definitely, so my wife an I, Tony, we are completely separate on everything. Now, both of our names are on the house, but I pay the mortgage, but she pays all the utilities and she pays the insurance. So I think you can do the, and again, I was 33. Right. And she was already 30. Right. So we had been paying our own bills and having our own life. So I think it's either scenario, if you're a younger couple, maybe the joint thing is probably the way to go because you're definitely combining, probably not making as much and so on and so forth. But I think as long as you're honest and talk with each other, you can find a balance with either system, but make sure you do find the one that's right for you. Right. So because we all know marriage is the number one, or I mean, money is the number one fight in a marriage, right?   Tony Mauro: It is.   Speaker 1: Yeah.   Tony Mauro: It is. And I'm not saying one's right or wrong.   Speaker 1: No, no, not at all. Just point counterpoint. Yeah.   Tony Mauro: Yeah. Yeah. And I think with either way you go after the bills are paid, however you're going to pay them, I still think it needs to be a team effort of sitting down saying, okay, hopefully you've got some left at the end of every month,   Speaker 1: Right.   Tony Mauro: You've got some positive cash flow.   Speaker 1: Yeah, exactly.   Tony Mauro: And then you both decide what to do with it rather than, and I've had a few couples fighting in my office through at tax time that don't do it that way.   Speaker 1: Yeah. Yeah.   Tony Mauro: That the guy makes a lot more than his wife and she wants stuff and he's saying, well, I already pay my share of the bills. That's your problem.   Speaker 1: Yeah, that's a tougher, yeah, that's a tougher road. Yeah.   Tony Mauro: Yeah. That's not the team approach. So,   Speaker 1: No.   Tony Mauro: Again, it takes some discussions, some maybe compromise and come up with something for you both because at the end of the day when we get back, because we've been talking a lot about retirement planning lately and decided to mix it up today.   Speaker 1: Sure. Yeah.   Tony Mauro: Hopefully you've got some money left. And so both can save for your goals I think.   Speaker 1: Yeah, and I think even for our strategy, we had those conversations going into it ahead of time, and we both for a while she made more than me. And then in the last 15 years we've pretty much just been right there neck and neck. One will go up a little bit, the next one will go up a little bit. So I think that can certainly lend a hand to that lack of frustration as well. But as long as you have those conversations that are honest with each other ahead of time, then hopefully you can work your way through that. And actually we'll go right into the second one because it's remarriage. Okay. So a lot of our audience is older, maybe retirees or pre-retirees and gray divorces have been a huge thing. So maybe you're getting remarried at a later stage in life. Certainly more challenges here because you do have more things to try to combine.   Tony Mauro: You do. There's a lot of big challenges here, unlike the first marriage with the younger people, so to speak. But just like you're saying, many of these people that are getting remarried have families, they have other concerns, especially the kids. And they've been through this before and now all of a sudden their needs are a little more, what I find with people coming in for remarriage is a little more self-focused, self-centered, if you will. It's like, well, my money's my money. We're getting remarried, but you have kids, maybe I have kids and I need to take care of these guys first and kind of then us. And so I think a lot of discussion needs to be made there about whose valuing what and how. And,   Speaker 1: Yep, great point.   Tony Mauro: Yeah. What kind of things you're bringing into the marriage too. A lot of people bring old tax debts into marriages, and so I think that needs to be discussed because obviously an innocent spouse may not want to be drug into a prior tax situation and have some of their money maybe taken for that.   Speaker 1: Especially if you didn't disclose it. Right.   Tony Mauro: If you didn't disclose it.   Speaker 1: That's not good.   Tony Mauro: That's not good. No. That's never a good recipe.   Speaker 1: That's right.   Tony Mauro: But there's things too, now you've got, again, second marriage, you definitely have to take a look at your own retirement plan. You might have two separate ones, beneficiaries, making sure those are updated, making sure insurance policies are updated properly. And then of course, the last thing is at the end with estate planning, which I've seen a lot of families get into huge fights about estates and whatnot. And potentially, for example, a gentleman that came in a couple years ago, he had remarried. His former wife died, remarried, but he was going to leave all his money to his new wife and the kids were just absolutely out of their minds with that. And,   Speaker 1: Yeah, that's tough.   Tony Mauro: Really caused a lot of animosity.   Speaker 1: Oh, yeah. It'll fractures some things, that's for sure.   Tony Mauro: Yes.   Speaker 1: So.   Tony Mauro: Yeah.   Speaker 1: There's some definitely good things to consider. Maybe a prenup is something that's worth having a conversation on either situation of those. And again, it's all about having those chats before you go through these major life events. So since we're in this realm, let's just go ahead and go with divorce next. As I mentioned, gray divorces, especially for our demographic is higher and higher on the rise, which is just kind of mind-boggling to me. But people over 50 are getting divorces more. And so what's some things to think of here? You touched on a couple, but give us some things to think about from a financial standpoint.   Tony Mauro: I think the one thing is, is in most states you're going to be dividing up your assets. And so that's a source of real contention in a lot of cases on how that's going to be done. And again, with divorce, I'd say with all of these, you should talk to some advisor. Divorce, obviously,   Speaker 1: You need a lawyer as well.   Tony Mauro: Yeah. You need an attorney,   Speaker 1: Yeah.   Tony Mauro: To protect your interests and then maybe your financial advisor. But in our realm on the financial side,   Speaker 1: I was going to say Tony, that's a good point though with the financial side too. Right. People might think about a divorce and they think, well, I just need a lawyer, right? Well, no, especially if you're older because now you're talking about dividing possibly retirement accounts, a 401ks, the home. I mean, maybe there's rental property. I mean, there's lots of stuff to have to divide.   Tony Mauro: There is. And on the finance area with us, a lot of people will say, well, since I'm getting the home, I had to give my now ex-spouse half of my retirement. Well, that comes back into our room a little bit. It's like, okay.   Speaker 1: Sure.   Tony Mauro: Well now you just half your retirement left. Yeah, you have a home, but you're going to have to live in that. That's not going to throw off any income. What are we going to do? How's our plan changed now going forward? And so you have to re kind of engineer the financial plan and maybe your goals need to be readjusted as well.   Speaker 1: Indeed. Yeah, I mean, because you're going to have to reset this up, you're going to have to look at, okay, what's the shortfall now that you've lost maybe half or whatever the case is, especially if you're getting closer to retirement so. And you'll want to make sure, just kind of like with the other one, you want to make sure that you've updated any kind of documents and paperwork that you need to do as well. Not leaving off, removing the old spouse or updating all the documents, powers of attorney, all that stuff. Right.   Tony Mauro: All that stuff. Yeah.   Speaker 1: Okay.   Tony Mauro: And again, a good attorney and your advisor's going to be able to help you a lot there.   Speaker 1: Yeah, definitely. All right, so let's go to a job change. How about this for a major life event, right, especially if we're getting closer to retirement and whether we are asked to step away, whether the job change is not our doing or it is our doing, give us some big things to think about here. And obviously a lot of this is going to come back to possibly being laid off or downsizing. This is the kind of thing that you guys typically see as financial professionals is in that scenario where someone's on that cusp of retirement and they're maybe looking at being laid off. And now they got to figure out, well, okay, should I just go into retirement early or do I need to find another job?   Tony Mauro: Right. And today, so many people don't stay like the old days, 30, 40 years at the same position. Everybody's moving around and the bigger companies consolidate so much that it's not uncommon. You're here one day and the next day ask you to leave just through cutting or whatever they're doing. But I think that on the financial side, a couple of things. One is if you're departing and getting a severance or some other large sum of money, how is that going to play out for taxes, number one.   And then how is your financial plan going to be affected by that? In other words, if you're out of work for a long time, do you have the necessarily emergency fund or you're going to have to use the severance for that? A lot of times people, and I've just had this with a friend of mine who he was actually asked to leave after many years and they gave him a huge severance, like $800,000, but he is mid 50s and he's scratching his head saying, well, I don't really want to retire, but I don't think I can go make the money I was making in my 50s.   Speaker 1: Right. Yeah.   Tony Mauro: And so he's kind of, well, what am I going to do with myself and what am I going to do for new opportunities type of thing. And so he's struggling a little bit with that and what he wants to do there. And then really too, the next one really is now you've got retirement accounts potentially at the old employer. What are you going to do with those? You're going to leave them. Maybe they'll force you to take them elsewhere. Talk to your advisor about that because you definitely want to explore that. And then I think that the toughest one, and I get this all the time as well, like you were saying earlier, I'll think I'll just call it quits now.   Speaker 1: Right.   Tony Mauro: I just had one of my business owners in last week and he's young, he's 51 and he thinks he can retire. And I said, well, let's look at the numbers because I said, I frankly, I don't think you can. I said, I do your finances. Unless you're thinking of maybe really cutting back, I think you're going to run out of money probably by the age of 75. And I don't think I've convinced him yet.   Speaker 1: Well, but that's a great point though, Tony. And that's what an advisor brings to the table. Right. So this is the guy's wish, this is his wants, he's on this cusp here, and it's your job to be that sounding board to go, okay, let's run these numbers and see. And I'm not going to sugar sugarcoat it. I don't think you're going to make it. So let's look at, we got to make some tweaks.   Tony Mauro: I got to make some tweaks. And I told him, you're going to have make some tweaks to your spending. And he is conservative, so I said, you probably can do it, but you've got to understand what you're going to have to cut and know that you may run out of money, which it doesn't seem to bother him. I like, well, I'll just go do some work. Okay, I'll run out of, if I do I do.   Speaker 1: That's a tough one though. Right. Because it's like, okay, I'm going to cut some things to make these numbers work to get into retirement early, and are you really going to be, like that feels like a shortsighted goal, right?   Tony Mauro: It does, yes.   Speaker 1: The first five years you might be totally like yes, I made the right decision, this is great, but as your quality of life stays diminished or you're not able to do some of the things you want to do, then now you've regretted this decision and you aren't, look like it or not, ageism happens out there in the workforce. Right. It's not supposed to, but it does. And it's going to be harder to get back in and maybe do the same exact thing or whatever. And I think you said he's self-employed. So maybe there's a difference there, but still.   Tony Mauro: Well, I think in his case, because he's self-employed the conversation I had with him is, if you have to go back to work, what are you going to be skilled enough to do at that point?   Speaker 1: Yeah. Unless it's the exact same thing he's doing now, right.   Tony Mauro: Yeah. Which I don't think he could do. And I just said, you got to think about these things.   Speaker 1: That's true.   Tony Mauro: And understand what you're getting yourself into.   Speaker 1: Well, and then medical. I'm 51 as well. I'm with him. I'd like, okay, cool. Let's do it.   Tony Mauro: You would like to retire, right?   Speaker 1: Yeah. But I mean, I've gotten some medical issues and that's 14 years before I can, is that right? 14 years before I can turn on social or,   Tony Mauro: Yeah, or Medicare.   Speaker 1: Medicare. Yeah. Right. So that's a big chunk of change too. Now maybe he's got a spouse that's going to have him covered, which this is my scenario as well. I'm covered by my wife's because I'm self-employed also, but still, that's something to consider. Right. How are you shoring up that gap medically?   Tony Mauro: Yep. Yep.   Speaker 1: Yeah.   Tony Mauro: I'm trying to talk to him a little bit about just maybe doing something, even if it's just for some mad money and doing something part-time and he's entertaining that.   Speaker 1: Pad the stats, so to speak. Yeah.   Tony Mauro: Yeah. Yeah.   Speaker 1: Well actually, speaking of medical, let's go to our next one then with that, Tony. And that's maybe a major life event, unfortunately, like a big medical issue or a disability. Right. So I had open heart surgery at 41. I mean, that could have gone a different way and I may have not been able to work ever again. Now luckily I've been able to. Right. But you just never know. Something could come back around or you never know what could happen, right? And so what are some things to think about if you get hit with a big medical issue or even a disability?   Tony Mauro: Well, on the financial side, it's one of the hugest issues, is really making sure that you've got to have your situation and enough control I guess I should say that if something major medical happens, number one, how's it going to impact your financial situation and what's your insurance going to pay, what's it not. If it's going to be something long term, how's it going to impact your daily life? Even your life expectancy could be cut well short if, depending on what it is. And you've got to have some plans in case that happens, and even some contingency plans in there in case you start going down a little bit more.   Speaker 1: Right.   Tony Mauro: And then on top of that, you've got the mental side and the fact you've got to update policies and documents. And I think sometimes when people get hit with this, they seem real rushed. And I think there should be some urgency,   Speaker 1: Sure. Yeah.   Tony Mauro: To get some of this done. But make sure that you're methodically going through it. Make sure you get some advice from your advisor and then your significant other or others to come up with the best plan to make your life as good as possible for while you're here.   Speaker 1: Yeah, definitely.   Tony Mauro: Which is hell, what we all want to do, right? I mean, medical issues or no medical issues.   Speaker 1: Right. And we got to definitely plan for this because like you said, there's lots of things. There's deterioration of the condition, there's updating the documents, there's even taking the time to see what kind of benefits or programs or assistance is out there to possibly help you. So lots of points to think about there, should you be going through a major life event is that. And let's do our last one, Tony. We'll wrap it up with just plain old retirement. It's like people sometimes I think forget and depending on how they're viewing it, we're so busy accumulating money to get to retirement. We forget that retirement in and of itself is a major life event. It's a total change.   Tony Mauro: It is. And my sister-in-law's going through it right now, we're helping her. And her last day of teaching was last Friday. And so all of a sudden she's entering this new phase, and when I saw her a couple weeks ago, she happened to say, I'm not going to have any money in June. And I said, you have a lot of money, you just don't have any money coming in from work. So you got to change your mindset a little bit. So she's coming in. We're developing an income plan for her so that she's got to develop this mindset of here's how much income I've got, just like a W2, but it's just coming from different places.   Speaker 1: Right.   Tony Mauro: And we've got to change her strategies a little bit. So it's much more income oriented. And then work with her budget. She's conservative as well. So she knows exactly how much she's spending on everything, but you've got to understand what your monthly bills are so you can make sure you have enough for them. And then she's got some health issues too. She's got lupus fairly badly and her life expectancy probably isn't all that long. And she knows that and she understands that. She wants to make sure everything is taken care of. And we just kind of talked about that in case her health goes bad, but it is a big mental change along with the financial change.   Speaker 1: Yeah. For sure. Yeah, I mean, there's.   Tony Mauro: So I think you got to think about it.   Speaker 1: Yeah, you definitely have to check all those things because it's a big gear shift. Right. So there's tons of stuff that you've got to go through when there's a major life event involved, and that's why having a qualified professional in your corner can certainly help you. So if you have not considered doing so, reach out to Tony and have a conversation about some things and get some stuff, some planning processes going with Your Planning Pros. You can find them online at yourplanningpros.com. It's yourplanningpros.com. Don't forget to subscribe to the podcast, Plan With The Tax Man. It's on Apple, Google, Spotify, all that good stuff. So you can simply type that into the search box of those apps, or again, find it at Tony's website, yourplanningpros.com. All right, my friend, thanks for breaking this down for me this week. I appreciate it. As always, have yourself a great week, and I'll see you soon.   Tony Mauro: All right, see you soon. Thanks.   Speaker 1: Thanks folks for listening. We appreciate your time here on the podcast. We'll catch you next time here on Plan With The Tax Man with Tony Mauro.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.    

In today's episode, we're going to focus on the three categories that many clients fall into when starting their retirement planning journey: The unsure, the confident, and the certain. Whether you have no idea whether you can retire or if you're positive that you have sufficient funds to retire, we'll cover some critical areas of retirement planning that you need to pay attention to. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Time for another edition of Plan With The Tax Man, with Tony Mauro and myself, to talk about being unsure, confident, or certain in retirement. And really it's retirement planning next steps if you find yourself in one of these three big categories. These are pretty wide, and obviously, you can apply many of the things to all three, but we'll go through and look at some bullet points for items if you find yourself, again, in the unsure category or the confident category. So we're going to break that down a little bit here with Tony this week on the podcast. Tony, what's going on, my friend? How are you?   Tony Mauro: Doing well, how about you?   Speaker 1: Doing pretty good. We are right here at the end of May, very beginning of June, so looking forward to the summer months being upon us and enjoying some sunshine and all that good stuff.   Tony Mauro: Yeah, summer of course, I think, like everybody, it's my favorite time. You get outside and doesn't rain, stops raining, I guess, around here. It gets hot and humid, but most people around here like it.   Speaker 1: Yeah, yeah. For sure. So it's that good time of the year. So let's keep this one short and sweet this week on the podcast. I got these three blanket categories, Tony, and just give me some bullet points, give some folks some bullet points to think about. If you find yourself, let's say, in this first category, which is, I have no idea if I can retire category, which probably if you say a hundred people are going to come in and see you, I would say, this is my guess. I'd say probably 35% probably fall into this category. Probably 60% will fall into our middle category, and then probably 5% into our last one. And we'll talk about that in a minute. But we'll see.   Tony Mauro: Interesting.   Speaker 1: How you feel about it. But anyway, the I have no idea?   Tony Mauro: Yeah, so in my practice, at least tax clients, I would say the percentages over a long time that I've seen is probably higher in this first category.   Speaker 1: Really? Okay.   Tony Mauro: I have no idea. I would say for our clients here, I'd say it's probably 50.   Speaker 1: Wow. Okay.   Tony Mauro: Percent. Yeah.   Speaker 1: People come in for the first time, they're just like, hey, I got no clue. Can I?   Tony Mauro: No, they used to come in for taxes. And of course, you could see what they've got and you could eyeball what they have for retirement and things and what's coming in for investment income, if anything.   Speaker 1: Right.   Tony Mauro: But you can very easily look at their W2s and see that they're not putting anything through their 401k. And so we would ask them, is when are you going to retire and start conversations? And they would say, "I have no idea."   Speaker 1: Okay.   Tony Mauro: And so when you fall into this category, obviously, you don't want to be in this category. You've got to get something else, and it's going to take a little work.   Speaker 1: Sure.   Tony Mauro: It's going to take some planning either with an advisor or on your own. But really, you have to start with just a few questions of, one would be, well, when do you want to retire? What do you want to do when you retire? In other words, what's it going to look like to you?   Speaker 1: Right. The lifestyle, right?   Tony Mauro: Yeah, it's just the lifestyle.   Speaker 1: Yeah. Do you want to sit on the porch or do you want to go whale watching? I know you and your wife are going to do some whale watching later this year.   Tony Mauro: Yeah.   Speaker 1: What kind of lifestyle are you looking at?   Tony Mauro: That kind of stuff, yeah. And then once they start talking about that and you get an idea, even if you're just talking to them about it is, well, with all that you want to do, and if all you have is social security, and of course, you start asking, well, what else do you have? And many times it's, well, I just have social security. And that's a real eye-opener for them when you just say something like, well, do you know how much your social security benefit is going to be because it's not going to be very much.   Speaker 1: Yeah.   Tony Mauro: And then the light starts to go on a little bit that, hey, maybe I need to start thinking about this because you don't want to be here at 65 or ... You know?   Speaker 1: What are my income streams and is it only social security ... that definitely there's problems. Right? So ...   Tony Mauro: There's problems. Yeah. So hopefully, you can get to this before you get too far or too close to retirement, so you've got time to fix it.   Speaker 1: Okay. All right. How about category number two here? And really, I'm surprised, but I guess every situation or every advisor is a little different depending on where they're at in the country. But I would think that most people fall into this category, which is, I think I have enough, but I'm really not sure because ... I think if most of us, if we go to work and we do the basics of ... If you just do the, it's not that hard to save for retirement, Tony, if you start working when you're in your 20s and you're working at a job and you are putting in the minimum into the 401k, even the two or 3% or whatever it might be, and you get that free money from the company match, and you do that for 40 years, you're probably in better shape than you realize. But again, people hear, well, I need a million dollars, or I need $2 million. And so they think: Do I have enough money to retire?   Tony Mauro: Yeah. And I would say for us, this is probably a close second. I'd say 40% of our clients.   Speaker 1: Okay, okay.   Tony Mauro: Probably are in this. But they think they do. And then we always ask them, "Well, what makes you think that?" Give me some reasons why. And if they can't tell us with any certainty, some of the things you just mentioned, then we start asking them some questions, basically is like, well, okay, what do you have? What are going to be your income sources? Where's this going to come from, type of thing? What rate of return are you going to be able to earn when you're in retirement?   Speaker 1: To make it go, right? To make the whole retirement ...   Tony Mauro: To make it go. And if they can't quite give us any types of answers, then we start to say, "Well, you really don't know if you have enough." You probably are closer than most, but you might need some help with really trying to put a plan together and making sure that you know you have enough with the time you have left.   Speaker 1: Yeah. I think more often than not, people are pleasantly surprised when they come in to see a financial advisor to find out ... Whether you don't have an idea if you can retire or you think you're close or whatever, I think most of the time people are pleasantly surprised to find out that they're in better shape than they realized. We tend to be more negative about it than we give ourselves credit for, I suppose, right? It's like going to the dentist. You don't go to the, you're like, oh, I know he is going to tell me bad news. I just know it. And then you get there and you're like, oh, it wasn't as bad as I thought, kind of thing.   Tony Mauro: Yeah, I think, with a lot of clients for us, they do. They're very negative. And once we run through numbers, we tell them, "Well, it's not that bad." You're going to be able to, for example, live on, you're going to have about 60, 70% of the income you have now. And while that's not a hundred percent, depending on what you want to do and other parts of the plan, you're going to have money to ... worst case scenario, to live the rest of your life and you're not going to have to worry about ...   Speaker 1: Well, and I think the great news about that, so if you say, okay, 60, 70%, you can go, okay, well cool. What tweaks do we need to make while we're still working? Or I'll work a few more years. I'm okay with doing a few more years if we can make some tweaks and get this up to 90, right, or whatever.   Tony Mauro: That's what makes it fun is when they know that and they say, well, gosh, that sounds all right, but I want to be at at a hundred percent.   Speaker 1: Yeah, let's make some changes.   Tony Mauro: We need a little more. What do we need to do?   Speaker 1: Yeah, exactly.   Tony Mauro: That's what a plan will help you with.   Speaker 1: Yeah. And that's a great point that you made. What kind of rates of return do you need to make it work? Do you have that emergency fund? Is it proper for the time of life that you're in? Lots of little things that you can start to tweak upon if you're in this category. And then we'll finally, we'll just go to that last broad one, and this is the person that's like, I know I have enough money to retire. Clearly, it's pretty obvious. They're confident. They know that they've got enough, but they're still looking for some extra help. They're still looking for, okay, how can I be even more efficient? Maybe they are already in that 90% category of my lifestyle's funded. I'm lucky enough to have two pensions, the wife and I, plus social security, plus we've saved a decent amount, that kind of thing, Tony, but they're looking for some extra icing on the cake, if you will.   Tony Mauro: Yeah. A lot of things will have them contemplate if they are in this area once we really verify that we think they do. We agree with that.   Speaker 1: Right, you know for certain, right.   Tony Mauro: We know for sure. But then we start if they want help, a lot of it has to do with tax planning as rates.   Speaker 1: That's big one.   Tony Mauro: Might fluctuate.   Speaker 1: Yeah. Yeah.   Tony Mauro: That's a biggie. Is the returns you're earning now or want to earn in retirement going to keep up or be a little ahead of inflation? And I think the biggest one that most clients would love to do if they're able is can they ... especially if they want to leave money for family, do they have enough to hit their goals and only live on the income sources and maybe not the principle?   Speaker 1: And then that way that's going to the legacy?   Tony Mauro: And that's going to the legacy because then that's the best of both worlds. But I'll get clients say, that's not important to me-   Speaker 1: Sure.   Tony Mauro: And I do want to spend some of my principle and that's fine too.   Speaker 1: I want to buy all the Tonka toys.   Tony Mauro: Yeah, yeah.   Speaker 1: I want the RV and the boat and whatever. Right?   Tony Mauro: Yeah. And really at that point, with any of them, we try to use, again, some modeling software based on what they have now, some reasonable rates of return, and then longevity so that we can give them those percentages of, if you lived to 95, you've got a 90%, a hundred percent, whatever that percentage is, chance of not running out of money. And if you can get that into the 90s, people feel very confident and secure that, okay, I'm all right now. And it's been explained to me, and as long as I keep on the plan and keep doing what I'm doing and make tweaks along the way, I'm going to be set.   Speaker 1: That's a good point. And no matter where you're at from a financial number, whether you are like, I've got 500,000 saved and I don't think that's enough, or I've got a million saved and I wonder if that's enough, or I've got $10 million and I know it's enough. Well, your lifestyle will also ... could put you into any of these categories. So that's why you need a strategy because you might have $10 million and somebody would say, 'Well, there's no way you couldn't enjoy retirement." But if your lifestyle is really extravagant, well, maybe $10 million is a problem.   Tony Mauro: It is. I actually have a client like that.   Speaker 1: Well, there you go.   Tony Mauro: The lifestyle is so extravagant. He's going to end up having about $20 million, but we really have to tone him down because if left to his own devices, he would go through it and then some.   Speaker 1: Yeah.   Tony Mauro: Which is ... And so yeah, it does depend on lifestyle. Yeah.   Speaker 1: Absolutely.   Tony Mauro: Because most of us, oh boy, you have $10 million, you could get ...   Speaker 1: Oh, if I, yeah, I'd be set, I'd be right as rain.   Tony Mauro: Yeah.   Speaker 1: But my lifestyle's pretty easy, right? So if ...   Tony Mauro: Yeah, your lifestyle's a lot different.   Speaker 1: Right. And there's nothing wrong with whatever category you find yourself in. It's just a matter of, okay, so once we've identified it, now let's get a good strategy in place to make sure that we lock it in, right? So if you're in the I have no idea, let's find out, let's run the strategy, and then let's get you to the I know I can retire, right? And if you're in the I think I have enough category, then let's just find out, make certain, so that we're putting, tweak and making some tweaks to guarantee that you have the lifestyle that you want through retirement. And then, of course, again, if you're in that I know I have enough, well, then let's just figure out how we can do the icing on the cake.   And maybe that's leaving a bigger legacy or leaving something to your community, charity, whatever the case might be. Lots of different options, whether you're unsure, confident or certain. It's always good to sit down with a qualified professional like the team at Tax Doctor Inc., Tony Mauro and his team, and get started with some of those conversations. So reach out to him. Your planningpros.com. Your planningpros.com. You can subscribe to us on Apple, Google, Spotify, or whatever platform you like using. Just hit the heart button, I believe, on most of those, and that way you catch future episodes as well as you could check out some past episodes. And Tony's been helping families get through retirement for 27-plus years. He's a CPA, a CFP and an EA. Tony, thanks for hanging out with me, buddy. I appreciate it.   Tony Mauro: All right, we'll see you next time.   Speaker 1: Yeah, I always appreciate your time, my friend, and have yourself a great couple of weeks. I'll see you a little later in June, and we'll catch you next time here.   Tony Mauro: Yes.   Speaker 1: On Plan With The Tax Man.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.    

From time to time, we like to look at issues faced by people in other professions outside of the financial world and see what kind of retirement planning lessons we can learn from these other professions. Today, we're seeing what we can learn from teachers and the issues they face. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Welcome into another edition of the podcast. It's Plan With The Tax Man with Tony Mauro and myself to talk investing, finance, and retirement, and we're going to retire with honors on this podcast. Basically, I want to do some financial planning lessons from the classroom, and we should probably insert a chorus of boos right here, because no one likes the classroom. I don't think many people do, anyway. But we always take these different analogies and ways to look at finance and retirement, and how we can draw parallels to other things in life, and so we thought why not do this? And school is kind of ending, although I guess it might have made more sense to do this when school is starting, but we're going to do it as school is ending and hang out with Tony a little bit. So, let's get into it. Tony, how are you, my friend?   Speaker 2: I'm fabulous. Early May, the weather's getting good, and like you said, the kids are getting out of school. I got a couple of in-laws that are retiring from teaching, so this is kind of appropriate.   Speaker 1: Oh, fantastic. That works out really well, then. Were you a good student or were you an average student? What kind of student were ... Elementary school, middle school Tony, what was going on there?   Speaker 2: Elementary school, middle school, and even some of high school, I always got good grades, but always wanted to do the minimum possible. I didn't really find out how I should have been doing things until college. And so, I was a good student and never had any problems, but always wanted to work ahead and basically, again, do as little as possible, which-   Speaker 1: Yeah, well, a lot of kids are that way, right? And you and I are, well, we're children of the '70s, I guess, but teenagers of the '80s, right?   Speaker 2: Yeah.   Speaker 1: And it was definitely a back and forth at that time period, for sure. Well, because that's our first one, Tony, is homework. Nobody likes homework, right? I mean, there's always maybe one kid that was like, "Oh, I love homework," but for the most part, nobody really liked homework. And some teachers, I know of several teachers, they don't necessarily enjoy giving it out either, but sometimes, it's a necessary evil. And if you think about what you guys do, you guys try to do most of the work, but sometimes you need the client or the potential client to do a little homework.   Speaker 2: Yeah, we do. And back in school, I mean even to this day, we always still talk, friends and I, of how we really wanted to work hard, so we never had homework. You always try to get it done-   Speaker 1: Just do it at school.   Speaker 2: Right, somewhere. But in the retirement planning area, in all financial planning areas, I mean, really, the people that are going to try to go at it themselves are going to be in for a lot of work, a lot of homework, and they're going to be-   Speaker 1: Oh yeah, especially the DIY, yeah.   Speaker 2: Yeah. The DIYers are going to be in for that, so you better just plan on it. Otherwise it's going to be painful. Or that's what leads, in my opinion, to a lot of people not doing anything, because they feel like it's too much work and they don't know where to start and they just don't do anything. But a good advisor basically is going to do most of the work for you, but you do have to help out some. It can't just be total hands-off, because then it's not your plan, then it's my plan. And so we want to try to make it fun and enjoyable so it's not work, and you have an interest in it, and not try to make it so complex that you feel like ... I mean, I was terrible in science and just didn't want to be there ever, and so we don't want to make it like that either. So you've got to try to think about it in those terms, especially when you're working with a advisor. They are going to take a lot of the work off of you.   Speaker 1: For sure. Yeah. They're going to try to take as much out of there as they can for you, but you've got to have that vested interest too, because let's be honest, if you're not putting in a little effort, are you even inclined to exact the plan, to go through it and follow the steps and do the things that you need to do if you don't have some buy-in? So, while we all hate homework, we certainly want to make sure that we're doing the things that we are being assigned by our financial professional, if you will, for lack of a better term. And usually that's some pretty easy low-hanging fruit, so it's not like it's a real big deal.   All right. Let's do number two here on the financial planning lessons from the classroom. Standardized testing, which has been a big topic of conversation for many years now, isn't always ideal, and I think I agree with that most of ... Overall, I think I agree with that. Not everybody learns the same way, so my wife's very analytical, I'm very visual, or whatever the case might be. And I think that's probably fairly similar in the financial world, when you think about ... To me, I guess my mind goes to the cookie-cutter, one-size-fits-all plan strategy in this regard.   Speaker 2: Yeah, I mean, it's another one. I always have to relate it back to my own experiences. I'll tell you, when I was a kid, I was like one of those guys, I hated these standardized tests. Back when I was a kid, it was called Iowa Basic Skills. Everybody had to take this, and I can't remember if it was a day or two, but literally, we were just filling out little bubbles on sheets and we didn't care. Well, if it was standardized, we always thought, "Well, we'll just make little designs and get through this," and not even really try, which is terrible. But I do think, getting back to the financial world, it's the same thing. If you just take some boilerplate financial plan, or you just take, say, one mutual fund, for example, and you're just going to put all your money in it, you're probably going to be okay. But probably, probably. There's really no plan there, and I don't think that people should just take a standard boilerplate type of plan and try to adapt it to what they're trying to do. I think it should be other way around. It should be custom to what you want to do, rather than some standardized thing. And that's where an advisor's going to be able to help you all along the way there, rather than just saying, "Here, do this. Here's a template, and if you do this, you should be fine," and never come back and see me [inaudible 00:05:57]   Speaker 1: And that's the thing, there's the operative term right there. "You should be fine," right?   Speaker 2: Yeah, you should. Yeah. Right.   Speaker 1: And it's like, "Well, I don't want to go with 'should.'" To me, that'd be like my mechanic fixing my car and saying, "Well, I put the tire back on. I think I did a good job. You should be fine."   Speaker 2: Yeah, you should be fine.   Speaker 1: Well, if I'm doing 70 miles an hour, I don't want to know that I should be fine. I want to know I am fine.   Speaker 2: That's right. And I do some flying on my own.   Speaker 1: Okay, there you go.   Speaker 2: I'm a private pilot, and boy, when it comes out of maintenance, it's like, I want to know that this thing, you didn't miss some screw on something or whatever, because I don't get a second chance, and-   Speaker 1: Right. Have you seen that meme, Tony? Well, it's a meme, it's a real picture, but they turned it into a meme where it's a guy on a ... I don't think it was Southwest. I can't remember which airline it was, but he's out there with duct tape, taping, I guess, part of the cover on one of the engines, part of the housing around it.   Speaker 2: Oh, right, yeah.   Speaker 1: And they're like, "Yeah, yeah, it'll be all right. It'll get to the next ..." and the person inside the plane that took that picture had to be terrified. Did they stay on the plane? Did they get off? Right? Be like, "Ah, duct ..." I mean, duct tape's great, but I don't know if I feel like airplane great.   Speaker 2: Yeah. When I was training, in the small plane, I walked out one day and we had duct tape on the wing.   Speaker 1: Okay. I guess it's a thing.   Speaker 2: It was a bird strike, and it cracked. And I went and asked, I said, "Geez, we got duct tape on this wing? I mean, am I going to be okay here?"   Speaker 1: Right.   Speaker 2: I mean, I'm sure I would.   Speaker 1: Well, you're a brave man if you did it, but still.   Speaker 2: I did it. I did it. He said, "No, no." He explained it all, but yeah, it is interesting because I don't think we want a lot of shoulds in retirement plan and probabilities. I mean, we want to be able to show people, based if you do this and this over this time period ... I like to use, and I don't like to share it with them, but I like to use a lot of analysis with the computer and say, "If you do this, you've got a 95% chance or 97% chance of never running out of money." That's something people can relate to, not, "Well, we hope you don't run out of money," type of thing. We want to give them some facts and things like that, so anyway, but-   Speaker 1: Yeah, some assurances are certainly ... No, that's a great point, though. It's a great analogy. All right, so number three on my list here is everything has pros and cons. Certainly that is definitely the case when it comes to education, or when it comes to what it is that you do. I mean, look, teaching, hats off to teachers. It's a tough gig. Teens and tweens are annoying, or they can be, right, because you're dealing with the unruliness and all that kind of stuff. And when you think about what it is that you guys do, whether it's a product or whether it's trying to just build a plan for someone, there's pros and cons to everything. Nothing is going to just be perfect. You've got to work your way through the situations.   Speaker 2: Yeah, and after we do a plan for somebody, and then you get to, of course the products area, how we're going to do this plan is, I like to explain that ... Obviously the pros are easy, but I like to say, "Look, everything's got a few downfalls, and here's what this is." I mean, it doesn't matter if it's a 401k, an IRA, a mutual fund, I don't like to spend two hours talking about each particular thing, but I like to point out the cons, so to speak. It's just like in work and everything else in life, there's some things about it you don't like, or may not be all that good. And then the client gets to decide, okay, well there's enough things here that I do like about this that this makes sense in my plan. Same way with our jobs. I mean, when we get kind of sick of them, just like in teaching, and I do give them a lot of credit, I do think it's a tough profession, and it seems like around here they're always cutting budgets and everything else, they just don't want to pay them, right? But that's a whole different story.   Speaker 1: Sure.   Speaker 2: But if you get sick of it, then in your job, you know, tend to leave. And obviously as an advisor, if the particular product portion of things, or the plan changes, it's up to us to advise a client, "Hey, this just doesn't work in your plan."   Speaker 1: It's just not working now. Right, yeah. And oftentimes, that's maybe an investment that's going to be with the dog investments, if you will. It's no longer performing adequately, or there's too much risk, or something like that. And that kind of walks in nicely to the strategy of laying things out ahead of time. Number four here, most teachers plan out, often they plan out, their lesson plans for the whole year. They have the guided curriculum, I suppose, from the school district, but they still kind of plan things out for the whole year. And if you think about your financial plan, that's similar fashion, right? I mean, you guys should be laying out a plan multiple years. Now, granted, you need to be flexible that it's going to change, because life's going to happen, but it's still the point of having a roadmap over, let's say, two to five years before retirement, and then the first couple years of retirement, and so on and so forth.   Speaker 2: Yeah, and today it's a lot easier than it used to be 10, 15, 20 years ago in the financial world. I remember when I was growing up with teachers, I didn't really realize why they stayed after school, and really they were working on their lesson plans and updating and things, and I'm sure they've got better tools now too, like we do. But yeah, these days I technically won't really get into a relationship with a client unless we do a financial plan beforehand. It's very easy. We can do it on the computer. At least we've got a starting point, because otherwise, it's really them just telling us facts and us just off-the-cuff giving advice, and it's like going to the doctor. I mean, there's all kinds of analogies out there, but they're not going to simply sit there and tell you what ... or how to treat you without knowing what's going on.   Speaker 1: Yeah, I mean, well, think about this. So for a doctor or even for yourself, kind of looking at the profession, you could probably walk in and say, "I've got a cough and I got this." And they probably have a pretty good idea of what's wrong with you, right?   Speaker 2: Yeah, they're going to give you something, yeah.   Speaker 1: I mean, they probably could tell you what they want you to take or whatever to get better, but to be on the safe side, they test it. They test you, they do some checks, or whatever. Well, I mean, you've been doing this a long time, Tony. When somebody comes in and they first lay out the information that they've got, what they've got saved and what different accounts, you've been doing this long enough, you could probably put together a plan on the spot. But that's not the smart move. That's not the prudent move. Your job is to really dig deep and find out and get the right plan, and I think maybe that goes back to that cookie-cutter thing. You can walk into someplace and get a cookie cutter because they've seen thousand versions of you, but yet at the same time, those are just those universal pieces that affect us all, like when to take social security. I have the 401k. How do I turn it on? That's all universal, but individually, Tony, you're different than I am, and so on and so forth.   Speaker 2: Yeah, and I think at the heart of it, if we as advisors, we're going to do that, I don't think the client's getting the value that they need, number one. And they're paying us to do this, whether it's in a fixed fee, asset-based type of thing, or even some advisors still charge commissions, but it behooves us to get to know the client and figure out really what they're trying to do rather than just blanketly advise them.   Speaker 1: I mean, you have the skillset. You certainly could identify that quickly.   Speaker 2: We could, absolutely.   Speaker 1: But that's not doing service, right, that's not providing good service, so maybe that's [inaudible 00:13:40]   Speaker 2: No. That's more of the dinner party chat. Somebody asks you something and you just throw something off-the-cuff and you're talking general.   Speaker 1: Yeah, okay.   Speaker 2: If you really want a plan, I think it has to go way deeper.   Speaker 1: Yeah. Okay. Well, let's do two more here on our retirement classroom analogy and then we'll wrap up. Age-appropriate instruction is important, certainly for teachers. You're not teaching calculus to first-graders unless they're a genius.   Speaker 2: That's right.   Speaker 1: But same thing, kind of, with you. There's different aspects of what you do where maybe not quite that diverse, but why talk about RMDs? Yes, you could can get into it a little bit and say, "Okay, we're going to put together a strategy for RMDs when you turn 75 based on the new Secure Act rules," let's say for you and I, it's 75. But if I'm only 55 and seeing you, that's probably not the main focus at that time.   Speaker 2: No, and really, a lot of the strategies that we use have to do with your age and where you're at in the whole process, because like you say, the easy part, no sense in talking to a young person about RMDs and like you said, and annuities or anything else like that. And at the same time, you get a little older, I think some of the retirees, you have to keep it basic, and you certainly don't want to be ... There's a lot of regulatory things where we have to go through of making sure that whatever we're recommending is appropriate for the client in their situation. That's on a regulatory aspect. But we should know better as advisors what a client can handle and whatnot. And you usually can tell from talking to them, and sometimes it's to their detriment. They want to be over analytical. But you want to make sure that you are being appropriate, not only for their age, but their investment knowledge, things like that, and it doesn't have to be overly complicated. I think sometimes we as advisors tend to get too much in the weeds with some of that.   Speaker 1: Mm-hmm. Yeah. No, I think that's a great point. And again, there's definitely age-related items when it comes to retirement planning, depending on how long you're ... Now, if you're walking in the door at 60 saying, "I want to retire at 62," then obviously you're going to get right into all of the stuff. But again, if you're starting with a financial professional at 45 or 48 or 50, we talked, Tony, often that we kind of ... Memorial Day's coming up, right? We're taping this in about the middle of May. Memorial Day's coming up, and it's not technically the kickoff to summer. It's technically not summer, but we all treat Memorial Day as the unofficial start to summer, right?   Speaker 2: Yeah, I do.   Speaker 1: Yeah. Everybody does, right? Well, 50 is kind of that unofficial start to retirement. We all start to get a little more serious about it when we get over 50, I think. Then our mind starts to go, "Eh, maybe I better start thinking about this stuff a little bit more heavily." So there's going to be age-appropriate instructions involved with working with a financial advisor depending on your age. Does that make sense?   Speaker 2: Yeah. I mean, it makes total sense. I think for people, especially now that I'm 55, you start really starting to think about, and so are our clients at this age, it's not only retirement, but when to call it quits? What's my monthly income going to be? And that essential question, are we going to be okay? In other words, am I going to have enough money at the end to basically do what I do now, and hopefully a little better?   Speaker 1: Yeah, there you go. All right, well, let's do the last one here, and this is just lifelong learning is a great habit to develop. All of my teachers, all the teachers I've ever come across, they're always like, "Hey, never stop learning. Never stop." And I think that's a folly of being young. We all know that. We were that way too. You see a 16 year old or a 17 year old or a 20 year old, and they think they know everything. How many of us have felt that way and said that about our own kids or grandkids or nephews or nieces or just in general? But I think a smart person, a truly smart person, realizes that life is always bringing us something to learn. And if we don't accept that and learn along the way, we probably don't grow very well as a person. And the same thing holds true with what you do. I mean, you continue to go to educational events and things. You've been doing this a long time and you pretty much know all the ins and outs, but there's always something new to learn.   Speaker 2: Always something. It always amazes me. My son has fallen into this group, although I think he's starting to get it now at 26, so hopefully, yeah, I think he listens to these sometimes, so I'll put them on the spot. But a lot of college students, they get out and say, "Well, I've got a four-year degree," or maybe even a master's, "and that's it for me. I've learned all I need to learn. I'm done with school," and they find out very quickly that I need to be learning something, depending on what type of profession you go into and whatnot. So I would say for all the young people listening, don't stop trying to learn, because in this day and age especially, life is just going to pass you by so quickly with technology and whatnot. But in the financial sector, same way. Even us, for me, unfortunately, I have a lot of masters in terms of continuing ed requirements and that kind of thing, so it's kind of forced upon me. But for clients, they need to really, at least not do too much homework on their own, because we were talking about that earlier.   Speaker 1: Sure.   Speaker 2: But if they're interested, they need to at least try to keep abreast of things and what's going on.   Speaker 1: Yeah, that cursory knowledge, for sure.   Speaker 2: Yeah, just some things. And if not, ask your advisor. That's what they're there for and that's what you're paying them for. They're going to have a lot of the answers, and if they don't, they're certainly going to be able to get it for you. We certainly want to be [inaudible 00:19:18]   Speaker 1: Yeah, we preach often here, Tony, know what it is that you have and why you have it, right?   Speaker 2: Yes.   Speaker 1: And that's still that lifelong learning, right? So, if you're thinking about getting into a particular investment, then know a little bit about it. Don't just want to jump into it because it's got a cool logo, right?   Speaker 2: That's right.   Speaker 1: You want to know a little bit about it, or whatever the case is. So that's the podcast this week. That's just kind of taking some analogies there, and I think we did a good job talking about, thinking about how we learn in the classroom, and teachers and applying that too, because really that's what you are as well, Tony. You're a teacher. It might be finance and taxes, but you're still teaching and educating.   Speaker 2: Yeah. That's what we're doing. I mean, we're basically taking the stuff we've learned over the years. It's in between our two years, and advising people, which is [inaudible 00:20:03]   Speaker 1: Yup, which is teaching, yup.   Speaker 2: Yeah, teaching.   Speaker 1: Coaching, teaching, whatever you want to call it, right?   Speaker 2: Yeah.   Speaker 1: Kind of falls in the same category. So, if you got some questions or concerns, get yourself onto the calendar, if you're not already working with Tony and his team at Tax Doctor Inc., and reach out to him, yourplanningpros.com. That's yourplanningpros.com. A lot of good tools, tips, and resources at the website there. You can reach out to them, subscribe to the podcast on Apple, Google, Spotify, all that good stuff. And we will see you next time here on Plan With The Tax Man. For Tony Mauro, I'm your host, Marc Killian. We'll catch you next time.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Are you preparing for retirement but feeling confident that you have covered all the expenses? Well, think again... It turns out that many retirees overlook some crucial expenses that can leave them financially vulnerable. In this episode, we explore the retirement expenses that most people tend to forget, including skyrocketing medical bills, unexpected travel costs, taxes, and much more. We'll discuss practical tips and strategies to help you plan for these expenses and ensure a secure and comfortable retirement. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Time for another edition of Plan With The Tax Man with Tony Mauro, from Tax Doctor Inc. I started to say Tony Mauro Tax Doctor, like that's your whole name or something, and myself to talk investing, finance, retirement, and retirement expenses, which we might forget to plan for. So we're just going to have a good conversation about some things to keep on the radar. Some of these seem like duh moments, but there's little ways we might think about this or forget about them, so that's going to be the topic of conversation. And Tony, how you doing, my friend? You doing all right?   Tony Mauro: I am well, yeah. Everything is going good.   Speaker 1: Well, good. So you do planning all the time. It's easy to forget stuff, right?   Tony Mauro: It is.   Speaker 1: I mean, you're a human being as well. You plan to take your own trips, you plan to go skiing or golfing or something, and you forget to take something. "Oh, man, I can't believe I forgot my glove," right? My golf glove or whatever it is. So it happens. But from a retirement standpoint, forgetting to do stuff can certainly wind up being a big pain in the you know what, especially depending on how it's affecting you. And it could be a little thing, it's not a big deal, but then there could be some big things. So on this episode, let's explore some of those expenses people tend to forget, and just kind of see if there's some tips or strategies we can talk through to see if that helps. Okay?   Tony Mauro: That sounds good.   Speaker 1: Medical expenses. Obviously, you can say, "Well, I'm not forgetting medical expenses, but how do I know they're going to show up? How do I plan for something that hasn't happened yet?" Well, that's true, and it is kind of hard to do, but that's when you've got to start thinking about where you're going to pull money from for these things. Because Tony, I think Fidelity's most recent number says like $315,000 out of pocket for people for ... that's not what the insurance is covering. That's out of pocket. That's hefty, man.   Tony Mauro: Yeah. And people were living a long time, and I think the biggest takeaway probably from this podcast on the tips area is as we talk about some of these things, is one, you need to develop a budget, and you need to work with your advisor on your own to get a budget, and budgets change, but at least you've got an idea, so you can start setting money site or plan to take it out of one of your pots. But the other thing too is you have to write stuff down too. As we age, I mean, if it's not on my calendar ... I don't try to commit everything to memory, so don't try to remember everything, write it down or get it in a plan of some kind, so it's a lot less burden on you. But yes, medical expenses, as we age, I mean, it's easy ... I mean, they go up. We could sit and talk about that all night long. There's other expenses too with medical. The little things, I think that's what pushes that out-of-pocket up so much. Everything from dental, to over-the-counter stuff, to stuff just for chronic ailments, things like that.   Speaker 1: Dental's is a good one, because that catches people off guard a lot.   Tony Mauro: It does. And a lot of that's not covered by insurance.   Speaker 1: Or Medicare.   Tony Mauro: It's best to track all ... yeah, or Medicare, for that matter. And it doesn't have to be sophisticated tracking. I mean, that's really good if you can go that far, but it's just something you've got to ... I think with medical, because it's so big, and it's going to be at the top of the list, especially as you age, it's one of the biggest things you spend money on.   Speaker 1: I think it's third. I think, if I'm not mistaken, Tony, I think housing is first for expenses, food second, medical's third.   Tony Mauro: Yeah. And so it's got to be tracked and kind of budgeted for. And then like you said, where are we going to take this money from these intended expenses? Obviously, if they don't occur, then you know, don't take the money out, but.   Speaker 1: Right, and then you got some extra money going on. But if you don't at least talk and discuss it, how are you going to have any kind of plan or options to dip into. You said budget earlier, Tony, and people go, "Oh, my God, I hate the B word." Well, fine, call it a spending plan, call it whatever the heck you want, but just some sort of cash flow analysis in and out, whatever the case is. And then that way you could maybe bump up some categories so that you don't have these unexpected expenses coming up like our next one. Unexpected travel, for example. Well, again, someone would go, "Well, how in the world am I supposed to know I'm going to need extra money for travel that it was unexpected," but you know you're going to want to do X number of travel, fine. You're planning for that, so why not ... and I'm asking you, but why not just going to bump that number up a little higher for things that might come up? What do you think there?   Tony Mauro: I think that's a great plan, and that's what we tell people to do. And we try to get them to put little kind of imaginary folders or the old envelope system, the Dave Ramsey stuff, even in retirement, not necessarily moving money there, but come up with our budget, and then bump it up a little bit.   Speaker 1: Pad the stats, so to speak, right?   Tony Mauro: Travel's one. Yeah, pad it, because besides your travel, you've got things like, I don't know, somebody asks you to go somewhere and you really weren't planning on it, but you've got the means, you're going to go do it. My father who now has grandkids getting married, and they don't live here, so he wants to go there, and make sure that he's there for that. You've got people spread out. You've got funerals, you've got maybe going out of state to see an elderly family member, all kinds of things that's not the funnest stuff you might want to do, and so it's not on the plan.   Speaker 1: That's a great point, because it could hit you off guard. You're thinking, "Okay, I'm kind of budgeting for the fact that mom's older, she lives in a different state. I'm going to go see her [inaudible 00:05:20], let's say, four times a year." But what happens if mom has to have a hip replacement that wasn't expected, which goes back to mom not planning for medical expenses. But let's just assume that something like that happens and you got to go stay with her for a month, and help take care of her, because she can't move, right? Well, that's unexpected travel, because you yourself are in retirement. Maybe mom's 85, and you're 60 or 65 or something like that. So I mean, it's easy to see where you can get some of these unexpected travel that takes longer. A, you weren't expecting it, and B, it's maybe a lengthier thing than you thought would even happen, period. And to your point about weddings, I mean, hey, it could be something as simple as you really want to pay for your granddaughter's wedding, and she decides she wants to have that in freaking Acapulco or something.   Tony Mauro: Well, right. Getting down there and dealing with all that.   Speaker 1: Or paying for it, and everything else, because you promised. "Oh, Papi, you promised that you'd pay for it." Oh, man. So again, planning just, I guess, pad the stats. Add a little extra in there for things that could come up so that you're not caught short.   Tony Mauro: That's right. And I'll tell you my own father, and sometimes he listens to these podcasts, but I already tell him that I talk about it. And he's one of those retirees that he's not comfortable if he has less than $80,000 in his checking account, but that's what he uses as his kind of padding besides everything else. And he's fine. He has plenty of money to live on and whatnot, and we budget, but that's what he kind of uses for unexpected, but at least he has it. It's just in his checking. So I kid him about it a little bit, but I understand why he has it, because he doesn't have to fear some of these things we're talking about.   Speaker 1: Well, I've got a couple big ones I want to tackle, so let me keep moving along here. I want to go to taxes, because you're the Tax Doctor, but are we seriously prepared for a tax hike in the future? I think everybody ... I mean we all know it. You have to know it. You cannot be an ostrich and not realize that all the spending we're doing, it's not going to be going up. And even if they do nothing, which Congress is great at doing, it's going to go up in '26. So regardless of whether they make a move, it's going up.   Tony Mauro: It's going up. If they don't do anything, it's going up, because I got to think they'll allow it to go back. Of course, as we're taping this, if there's going to be a showdown again in June about the debt ceiling, and the reason we have all this debt is because just like a business, we as a government or a nation, I should say, they spend more than we take in. So even if it's not just a, "Hey, this is a tax." They come up with things. They usually try to hide them, because they don't like to talk about them, but we have to be prepared for that. While I hate taxes, I got to think somehow they're going to go up some way in the future   Speaker 1: And think about the numbers, Tony. So if you're ... a lot of retirees right now, maybe, find themselves in the 22% tax bracket, right?   Tony Mauro: Yeah. 20, 22.   Speaker 1: Yeah. So let's just say, and I think that the 22 is when it sunsets in 2019, or excuse me, 2026, the 22% tax bracket, I believe goes back to 25. Might be 28.   Tony Mauro: It's 25, and then it goes real quick to 28.   Speaker 1: Okay.   Tony Mauro: That's what it's supposed to be now.   Speaker 1: So it's a more narrow bracket. So going from 22 to 28, that might only sound like ... I mean, 6%. Hello, right? I mean, that's going to get pretty hefty. Think about the interest rates that we've ... [inaudible 00:08:42] the interest rates, but the inflation rates we've been dealing with, and so on, and so forth, so it's going to be a little more costly than we realize, and if they do nothing. And then just what if they go, "Well, we actually need more money, so let's go ahead and make that 30%."   Tony Mauro: Yeah, it is. And even on a hundred thousand dollars of income, I mean, that's still a lot of money, and that's a $6,000 tax increase. And on a fixed income, people are like, "Well, wow, that kind of really cuts into [inaudible 00:09:08]."   Speaker 1: And over time. So again, you got to have that ... you plan for it. And again, tax efficiency and planning right there. This one's one that you maybe shouldn't forget, because right now everybody and their brother is talking about tax efficiency, because of the tax rates we're in, and that Roth conversions, obviously, are a huge topic of conversation, because you can kind of manage your taxes now versus what we expect to happen, let's say, 10 or 12 years from now.   Tony Mauro: Yeah. It's a big, big topic. Taxes.   Speaker 1: Maintenance, and repair on the home. I mentioned earlier that the home is usually the number one expense for people, at least, early on in retirement, as they're either finishing off the mortgage or maybe making some changes so that they can retire-proof it, that kind of stuff. This one I always find interesting. You were talking about your dad a second ago, and having a big chunk of cash there. People say, "Well, I got an emergency fund for if the HVAC dies." Okay, well fine. If the HVAC or the roof gets a hole in it, unexpectedly, that's one thing. Maybe that's where you tap the emergency fund. And tell me if I'm wrong here, Tony, but if not. Let's say you're 60, and you're going to retire in the next five years, and you know your roof is already 30 years old, why are you not strategizing and planning to replace that roof sometime in retirement versus getting caught off guard?   Tony Mauro: I agree. Our pre-retirees, we go over the whole home ownership thing, and if they own the home outright, what kind of condition is it in? Is it important to them that they keep it up, and start strategizing for some of these things even before retirement. Even if we're not going to set money aside for it just yet, but knowing that it's on the list, that a roof, for example. My roof's 30 years old. It's kind of falling apart. It's not leaking, but I'm going to need one at some point. Let's get that down, and try to figure that out in the big scheme of things. I think another one too is ... and most retirees homes are aging, because most of them have lived there for a long time, and most of them drive older cars. I mean, I have a love-hate relationship with cars. I like them, but at the same time, we're always having to buy new ones or do something, and you may need a new car in your retirement days at some point, and the last thing you might want to do is have a payment. And so maybe you want to strategize, and maybe save for it or use some money to buy one that could be maybe the last vehicle you'll need. But these are the questions that you need to tackle under this whole housing slash maintenance repair thing, for sure.   Speaker 1: Yeah, definitely. Some really good points there for sure, Tony. Thank you for those. And then, finally, let's talk about everybody's friend.   Tony Mauro: That's their friend.   Speaker 1: Mr. Inflation or Miss Inflation, or whatever you want to call it. Either way, it sucks.   Tony Mauro: It's high. [inaudible 00:11:48] likes it.   Speaker 1: But let's view it at this standpoint, not the current, whatever we're going through inflation, just regular inflation. I said this all the time, and I'll continue to say it, because I think it works well. Inflation is normally thought of like calories. You don't pay attention to it until it's really bothering you.   Tony Mauro: Yeah, that's right. That's right.   Speaker 1: When you're feeling overly pudgy, you pay attention to your calories, right? And when inflation's high, you finally pay attention to it. But when it's normal, you just don't pay attention to it. However, if you don't, let's say, it cost you five grand a month, and that's what your number, you've identified five grand a month for living expenses going into retirement at 65. Okay? Well, 15 years later, that five grand's now 10 grand a month it costs you. So do you have COLAs, cost a living adjustments, built into your plan?   Tony Mauro: Yeah, because that will happen. It will be exceedingly higher than the 5,000 that you just talked about. And people always ask me too, "Well, do you think it's ever going to go down?" I say, "Well, inflation, it bounces around. Of course, we can see that right now, but how many times?" I always ask, "How many times have you gone somewhere, and they say, "Well, our price is lower than it was five years ago." Boy, it's great for you, great for me." I mean, nothing goes down. So even in normal times, things tend to inch up and we aren't paying attention. And good for businesses, because they got to keep up too. But I'm saying, as a retiree, you have to pay attention to that. Because if you're thinking 5,000 today, like you said, it'll be 10,000 or so in 10, 15 years from now, and that will be the new norm. But nevertheless, you may not have the ... if you're not building this in, the same income or the same lifestyle you thought you were going to have.   Speaker 1: Yeah, I mean, you've got to address it. And it's easy to sneak up on you. Inflation is the thief of tomorrow kind of thing, so it's going to steal some stuff away. So you've got a plan for it. And hopefully, your advisor has strategized like Tony does with his plan, for inflation, even normal inflation rates. And I think that's where people also panic too, Tony, when we're thinking about where our money's at. The market's not doing well. I'm nervous. Let me maybe consider taking it out. Well, that's going to be ... it should be, anyway, your later monies that you need to keep up with inflation. So make sure you're not panicking in just wholesale. When the market does bad, that's what we do. We panic and we go, "Let me go take money out, because I don't want to lose anymore." But it's like that's your now money I think you're thinking about when it's really, truly your later money.   Tony Mauro: Exactly. Yeah. I mean, it is. I mean, you hit it right on the head. I can't even expand on that.   Speaker 1: Well, thanks. It's almost like I talk to you guys all the time.   Tony Mauro: Yeah. I think the important thing is getting back to talk with your advisor, and making sure that you're strategizing for this, because it will sneak up on you and it will get you.   Speaker 1: It will bite you, that's for sure. So hopefully that's some things that you are remembering to do. You're strategizing for retirement and you haven't forgotten these. But if you have and you need some help or you just haven't reached out to someone for help at all, then Tony and his team, of course, are here, yourplanningpros.com. That's yourplanningpros.com. I don't think families get [inaudible 00:14:56] retirement. Tony's been doing this for 27 plus years, so he's a great resource for you to tap into. He's a CPA, a CFP, an EA, all the alphabet soup of good stuff there. So reach out to him, get onto his calendar, have a conversation, and plan with the tax man. Don't forget to subscribe to us on Apple, Google, Spotify, whatever platform you like using. Tony, thanks for hanging out with us. As always, my friend, I appreciate you.   Tony Mauro: All right, we'll see you next time.   Speaker 1: We'll catch you next time right here on the podcast. Again, hit that subscribe button or heart button or whatever it is to catch new episodes, as well as check out past episodes on Plan with the Tax Man with Tony Mauro, from Tax Doctor Inc. Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Are you a golfer? Even if you're not, the game of golf can teach us valuable lessons about retirement planning. For example, hitting a hole-in-one might be thrilling, but it won't necessarily guarantee your overall success. And just like you need different clubs in your golf bag to play a round, you need a well-balanced approach to your investments in retirement. But perhaps the most important lesson from golf is the value of having a caddy. In retirement planning, a financial advisor can help you navigate the hazards and make the most of your financial "clubs." Tune in to this episode to learn more about how the game of golf can help you plan for a successful retirement. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: It's time to plan with the tax man once again here on the podcast. Tony Mauro from Tax Doctor Inc with me to talk golf. We're going to spend a little time talking what golf can teach us about our financial planning or financial strategy. We're calling this for your retirement, pun intended. F-O-R-E. So there you go. What's going on buddy? How are you?   Tony Mauro: I'm doing good. You're in the throws a tax season and as we were talking about earlier, thinking about golf, thinking about the spring.   Speaker 1: I know, right? It's like, yeah, well, it'd be nice to go play a little bit, but mother nature can't quite make up her mind if she's fully ready for spring or not. So it's like, all right, well while we're waiting, let's talk a little bit goof. And as my daughter and I like to call it, call it some goof. Of course, the way I play is probably is goofing. How about you? Are you a good player? I know you like to play.   Tony Mauro: Well, I like to play a lot. Everybody's got their own version of good, so wherever you're at, you think you should be better. Right?   Speaker 1: Right.   Tony Mauro: But yeah, I mean we play a lot and I've enjoyed it for a long time.   Speaker 1: Well, are you good enough to get a handicap?   Tony Mauro: I have a handicap. My handicap right now is 7.9.   Speaker 1: Well, then I would say that's good.   Tony Mauro: Call it eight.   Speaker 1: I would say that's good then. Yeah.   Tony Mauro: Well, like I say, it depends. Everybody, if you're an eight, you want to be a four. If you're a four, you want to be scratch.   Speaker 1: Right. Well, okay.   Tony Mauro: If you're a 20, you know.   Speaker 1: If I play 18, I'm shooting in the upper nineties, so you're better than me.   Tony Mauro: Well, I mean it's all about getting out there and having fun. And it's picked up a lot of popularity.   Speaker 1: Oh lord, yes. It's massive. Although pickleball is the thing that's took over everybody, I'm like, good lord. Pickleball's everywhere.   Tony Mauro: It really is. I can't believe the interest, even as people are getting a little older, they're wanting to go out and play pickleball just to get a little bit of an exercise in.   Speaker 1: Yeah. Oh yeah. No, they're digging it.   Tony Mauro: Yeah.   Speaker 1: Well, let's stick with golf for right now and we'll jump into it. And even if you're not a golfer, I think you can still enjoy the lessons. Most people have enough basic golf knowledge and of course, depending on the retirement. And of course it's perfect for retirement because how many retirees like to play golf. A lot. So let's start with just breaking down a couple points here. I got some fun ones. I want to chop them up and have a little fun with the analogies. And I'm going to tell a story along the way, Tony and I encourage you to do the same. I'm sure you've probably got several as well since you like to play. But we're going to start with hitting a hole in one and thinking about this from a financial standpoint. I mean, a hole in one is super exciting. I mean, even in putt putt we get...   Tony Mauro: It is.   Speaker 1: We're like, yeah, I got a hole in one. But here's kind of how I want to go with it. It has an interesting effect on it. So for example, I was playing golf a number of years ago with a couple, me and a friend of mine. We were in our early forties, I guess, maybe late thirties, and they were in their early seventies and we're on this par three. And he knocks the ball, he tees off, and lo and behold, he gets a hole in one. I'd never seen one live. It was awesome. And so I think it was maybe the third hole, it was a par three, something like that. And of course his wife and she was, the whole day, she was like 125 to 145 yards straight down the fairway. Every single shot she made, she'd chip up on one, she'd putt, she'd one putt, so on and so forth. But anyway, he makes this hole in one and for the rest of the day, the rest of the 18 holes, he is just super cocky, super arrogant. And this is a 70 year old guy. He's feeling it, right?   Tony Mauro: Yep.   Speaker 1: Well, my friend and I are terrible. We're all over the map. They're laughing. But at the end of the day, guess who won of the four?   Tony Mauro: One of you guys or his wife?   Speaker 1: His wife.   Tony Mauro: His wife. Yeah.   Speaker 1: Because she was slow and steady and rock solid the entire way, right?   Tony Mauro: Yeah.   Speaker 1: So, I thought that was an interesting lesson. And he got the hole in one. He was like, I am feeling it. I have got this game figured out today. And she was like, I'm going to go with the tried and true principles. And she ended up winning. And that made me think of financial planning, the hole in one, or I guess a big hit, I guess some sort of big windfall, picking a stock or something that does really well. It's exciting. But slow and steady or the tried and true principles is what's going to get you where you want to go.   Tony Mauro: No, it is. And I haven't had any hole in ones in my life. I know a lot of people that have, my father's had two, my brother Tim has had two, and I witnessed one of his. And it was the ugliest thing you've ever seen. It was a ground ball hole in one is what it was from tee to green. But it went in. But you ask the PGA players and they have multiple hole in ones, but they're out there playing for a living and doing it all their life. But like you were mentioning, I mean, even for them, most of the time you see it on TV, somebody will have one in one of those rounds on TV, but very seldom are they the winner at the end of the day. But they can control their games much more than the rest of us, obviously. But for us, I think as it pertains to financial planning, it is like that. Everybody's running around saying, I want the next big thing, or I want to really cash in on something. And every once in a while they'll get lucky and they'll make some money. But if they're going to follow that philosophy from start to finish until they retire, most of the time they're not going to end up very well off. And right now, it's even more prevalent. I mean, as we're taping, the Silicon Valley bank just went under and people were a little nervous and the markets haven't been doing very well lately again, and they're asking for the same thing. Now it's, well, what can we do that's safe? And I could still make money. Speaker 1: Yeah. Right. Well, yeah, that's an interesting point because the SVB thing, certainly a one-off and a unique situation I think. Do you see that as something systemic? No one's got a crystal ball. I don't think it will be. And they were not a traditional bank in the normal sense. They had a very select clientele, all tech heavy, tech companies laying off and they got into bond. They got... A lot of the stuff they did, it really burned them. And I think that's, actually, it's almost an interesting lesson in that itself, in still being diversified. They did, as a bank, they did a little too much of the same thing. And it bit them in the hind end. Right.   Tony Mauro: It did. And they did it probably at a bad time.   Speaker 1: Well, the perfect storm. Bad time. Yeah.   Tony Mauro: Scrap the fact that what were they doing and all that. I'm sure it'll all come out. But back to our analogy, I mean it really is the case for diversification and trying to develop an overall plan as we're talking about retirement planning and trying to stay the course and modify along the way, but not relying on hitting that long or in this case, the hole in one.   Speaker 1: Yeah, well I was going to say, yeah, you could jump metaphors here. We could go baseball. Same thing, right? The home run. The home run kings are also usually the strikeout kings.   Tony Mauro: It is. Yeah. So I mean, it's fun to play with. I think the lesson here is make sure that you're developing an overall strategy just like you would... As your golf game improves, you try to strategize your way around the course, not just try to knock it as far as you can. I think that it lends itself to a good plan.   Speaker 1: Exactly. Yeah. I mean, they're sexy. A hole in one is sexy, no doubt about it.   Tony Mauro: Oh it is.   Speaker 1: But hard to come by. And again, I love the lesson that I was taught that day. It was like, okay, you young bucks can hit the ball a mile. Of course you hit it in the wrong direction.   Tony Mauro: That's right.   Speaker 1: But she hits it nice and straight 130 yards and whipped our tails. So little fragile, little looking. She's a tiny little thing, little 70 year old lady. And she just beat us into the ground. If we'd have been playing for money, I'd have been broke because she didn't just beat us, she crushed us.   Tony Mauro: Yeah.   Speaker 1: All right. But so let's go on to number two here and what golf can teach us about financial planning. Unless you're Happy Gilmore, you probably want more than two clubs in your bag. You probably want more than just the driver and the putter because I think that's pretty much all he played with, if you've ever seen that movie.   Tony Mauro: Oh yeah.   Speaker 1: So you need that diversification of a couple of different kinds of clubs. So think about it in that same manner. You're probably not going to use your driver in the fairway, and you're certainly not going to use it in the rough.   Tony Mauro: Right. And I think too, and I've been through a lot of different clubs in my day, and remember when you first started golf, people can probably relate to this is you do only have a few clubs in your bag because you can't hit the other ones. And even now, depending on your handicap, some clubs are hard to hit. But nevertheless, if you're really going to get good, you have to have a full set to really bridge those gaps and distances. That's why we have 14 clubs and you see the really good players. I mean you could get a guy off PGA tour and probably beat me with two clubs. He probably could have two clubs and beat me.   Speaker 1: Oh sure. But he's a pro.   Tony Mauro: Yeah, he's a pro. But for most of us it's the game's not enjoyable, but tying it into the financial planning is, you need some diversification, as we just talked about. You need to make sure you're into different types of investments, generally speaking, not just all cash or all a bond. It serves it itself well with the overall plan, which is what we do with people is once we get all of their financial data, it is saying, okay, based on this and when you want to retire and what you want to do, here's some suggestions. And it's fairly well diversified. I mean, there's some different types of investments because as we see right now in the market, bonds, the rates are up a little bit, more than they ever have been. But that doesn't mean rush out as a 30 year old put all your money into long term bonds. Back to Silicon Valley.   Speaker 1: Back to Silicon Valley. Yeah, exactly.   Tony Mauro: Maybe that's not the best case. But I think that's the main lesson here is you got to have different asset classes, you got to have some different types of things and then monitor those classes because something's always going to be in and out of favor. But by doing that, you really can set yourself up well for a lot less headaches and a lot less tinkering down the road.   Speaker 1: And I've got some interesting stats here on the SVB while we're talking real quick on this. We can, and we'll jump right back in. And these come from bankrate.com and Bloomberg and New York Post. But it basically said, if you're, it's for people that are really worried, a couple of things to just keep in mind, especially with one of the bottom line pieces here, and this is actually from a CFO as well. This is just kind of remember that most large national banks deposits, they diversify their deposits. We were just talking about diversification. And they have kind of a more regulated system and less exposure to investments. And that's really what hurt SVB. They had roughly 56% of their deposits were locked up in securities compared to somebody like Bank of America who only runs it around 28%. So completely different risk profile.   Tony Mauro: Yeah.   Speaker 1: Right. And you could take that lesson to your individual self. So if you are putting way too much, like if you work for a company and you get your paycheck there and they give you stock options there and you have a bunch of invested in the company, and let's say you've got 70% of your life, your income tied up in this company. Well look, think about Enron from all those years ago. Same thing. You have way too much tied up in there and it goes under, guess what happens to you? You go under too.   Tony Mauro: Yeah. It's no different than us. I remember, this actually happened on the golf course. This was before the collapse of '08, '09. I was out golfing in Arizona and I happened to get paired up with a guy who seemed very high up on the chain at General Motors. I mean, flying in the corporate jet. And you can just tell this guy was high up.   Speaker 1: He was fancy. He was rolling.   Tony Mauro: Yeah. And he was mentioning at the time he had all of his retirement and he was probably in the sixties at the time, invested in General Motors stock. And when we got back, it wasn't a year and a half later, I don't know what ever happened to the guy. General Motors filed for bankruptcy. Maybe he got out and was given some things, but couldn't help but think of that guy that's like, because that happened and who knows what could have happened to him. But that could happen to you in any of these types of different types of investments, especially if you're just concentrated in one particular thing.   Speaker 1: Yeah, absolutely. So again, clubs in a bag, diversification, SVB, we're trying it all together today.   Tony Mauro: That's right.   Speaker 1: We're bringing it all full circle in here. So let's do the last one. Have you ever had the opportunity to play with a caddy?   Tony Mauro: I have when I've traveled and it's fantastic.   Speaker 1: Everybody I've talked to that's done it said, wow, it's really impressive. So this one's a pretty easy analogy, right? Because you're paired up with a guy or gal who's a pro and knows that course or whatever the case is, and they help you do all these little things, like reading your line and reading the green and how the putts could break and best choices for this, that, and the other. Well, that's what you do in a sense, Tony, right? As a financial professional, you help with the hazards.   Tony Mauro: We help with the hazards, I mean, we are the financial caddy. And when I played golf at some of the, you go to some of these travel resort type courses and some of them make you get a caddy. Obviously most of us don't play with a caddy in our everyday rounds. But it is a ton of fun because like you say, they know the course like the back of their hand, they're going to be able to tell you from watching you hit two swings, what you should hit on this particular thing. And most of the time they are correct. Every time you say, ah, this guy doesn't know what he's talking about, I'm just going to do what I always do. And then you don't turn out so well on the golf course. I think a lot of it is the same way in the financial area is that can you do it yourself? Can you play without a caddy? Sure. But you're generally going to end up much better off and much more at ease with someone helping you, coaching you around a little bit in your financial life, however that may look for you. So not that you can't do it yourself, but I definitely think you're going to be much more efficient. You're going to probably end up, some people equate it, well, can you get me a better return than I can by myself? That's not really the gist of it, because I can't answer that. It's more along the lines, can we maybe do it or do something good for you in a tax advantage status? Can we make sure that you're on track to hit the goals that you set out to get?   Speaker 1: Yeah, how's your income going to play with social security? What's the best social security strategy for you? How are you going to be tax efficient? Right? It's so much more than just, well, like I guess if you were playing with a caddy and you just wind up saying, Hey, what's the best club for me to use on this hole? Well, there's so much more he has to offer you than just that. If you ask him that same question every time, you're not really maximizing what that caddy can do.   Tony Mauro: No, absolutely not. And like I said, on the course, those guys are fantastic. Besides having a lot of fun, they know the game. They're in the game every day just like we are as planners rather than just guy coming out a couple, well, in my case, traveling.   Speaker 1: Yeah. It's not your cousin Eddie walking out with you going, all right, here's what you want to do.   Tony Mauro: Yeah, no, no, these guys know the game. And if you let them hit a ball for you, generally they're really good players. So I think it goes back to the financial case. It's just like everything else, the people that do it every day are probably going to be better at it than you. And it might be wise to listen and come up with a plan and to work with an advisor.   Speaker 1: Yeah, absolutely. So there you go. There's a little analogy with golf. We even touched on the SVB thing a little bit. And of course folks, if you do have concerns about what's happened this past week, the time we're taping this, we're in the middle of March, we'll be dropping this podcast here this week. With what's going on with these banks, before you take action, don't panic that. That's one thing we don't need to do is people start panicking and running and taking money out of any banks. And that can certainly be what causes issues. So make sure you reach out to your advisor and just make sure that things are okay and have a conversation. As always, there's no crystal ball, no one knows what the future holds, but we want to also not make things worse by creating more panic than it needs to be. I think that was also where they kind of shot themselves in the foot. The minute they reached out to their investors and different tech companies and said, don't panic, that's essentially the time to... That's when they panicked, right?   Tony Mauro: When they panicked. Yeah. And I've been telling all of our tax financial monthly accounting clients and wealth clients that same thing. Don't panic. I mean, yeah, everything's good until it's not. But most of us don't have, I mean, as an accountant, I like to look, but most consumers aren't going to go and review and understand the bank's financial statements. But I'm telling clients, talk to your banker. Just ask them, Hey, what do you think I should be doing to mitigate my risk if I've got over $250,000 or whatever. I don't know if you want to go in and say, explain all your financials to me, they're not going to have the time to do all that.   Speaker 1: Right. Right.   Tony Mauro: And even if they're not in good shape, they're probably not going to be, Hey, we're in real bad shape. But I think proactively, like you say, keep an eye on it, ask your advisor, ask your banker. And I don't think you should be running out and just pulling all your money out. Absolutely not.   Speaker 1: No. And I think based on, I've talked with a bunch of advisors already this week, Tony, and they've all said the same thing. There doesn't seem to be any evidence there that this is a systemic problem.   Tony Mauro: No, no.   Speaker 1: Yes. We've had two at the time we're doing this, one on the west coast, one on the east coast, but they are both very specific banks to very specific things. I think the New York Bank really being hurt by the crypto, being too heavily heavy leveraged in crypto. And of course, SVB wound up being too heavily leveraged in bonds they took out, and then they didn't have the stock assets to cover it. So.   Tony Mauro: Nope.   Speaker 1: Yeah, and bank failures, folks, they happen more often than you realize.   Tony Mauro: They do. They do.   Speaker 1: Yeah. It's an interesting chart. We've actually had like 300 plus since the great financial impact of '09. We've had about 300 plus bank failures, and you don't really hear about all of them. You only hear about a few at a time. Especially the really big... You heard it around the financial crisis, obviously in '08, '09, that's what most of them were.   Tony Mauro: Yeah.   Speaker 1: But I think there's been 12 since 2019, and I don't think you've heard about any but this one.   Tony Mauro: Yeah, I've only heard of one other one since and well, it's probably been, yeah, four or five years. And that was just a minuscule little thing. I mean, you could ask clients about it. They'd never heard of it.   Speaker 1: Yeah, exactly. So again, you never know. There's always chance for things to happen. We certainly want to keep our eyes and ears peeled, but we don't want to panic. So if you do have questions, definitely reach out to someone and have a conversation before you take any action. And of course, Tony's here to help, he and his team at Tax Doctor Inc. You can find them online at yourplanningpros.com. That's yourplanningpros.com. He's got 27 plus years of experience as a CPA, CFP, and an EA. And he is, well, he's a tax doctor. Tax Doctor Inc. So check him out online and we will see you next time here on Plan with the Tax Man. Thanks, Tony.   Tony Mauro: All right. We'll talk to you later.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Are you confident that your financial plan is complete? Many people believe they have a solid plan in place, only to realize later that they've missed important areas. From not accounting for long-term care expenses to overlooking the impact of taxes on retirement income, there are many ways a financial plan can be incomplete. On this episode, we'll be pointing out the most common areas people overlook when planning and provide actionable tips to ensure that your plan is as comprehensive as possible. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Welcome into another edition of Plan With The Tax, with Man Tony Mauro and myself here to talk about the incomplete financial plan. Are you confident that your financial plan is complete? Most people believe that they have a solid plan in place only to realize a little later on that maybe they've missed a few important areas. So that's what we're going to do in this episode. Point out some of the most common areas people overlook when planning and hopefully provide a few actionable tips to ensure that your plan is as comprehensive as possible. What's going on, Tony? How are you buddy?   Tony Mauro: Not too bad. Coming out of the busiest time of tax season. Still got some ways to go, but-   Speaker 1: It's early March, time we're dropping this. So you still got a few weeks, right?   Tony Mauro: We still got a few weeks left and we trickle into the summer months with some extensions and whatnot.   Speaker 1: You're right, and the heavy throes of it right this minute. So as always folks, do your CPA, and your financial professionals, and tax preparers a favor, try to get that stuff to them as early as possible. Don't be like me and wait till April the 12th or something. They don't like that so much. But if you need some help reach out to Tony and his team at yourplanningpros.com. They are obviously Tax Doctor Inc. Is the name of the company. They are a Des Moines professional alternative, and you can find them online yourplanningpros.com. So let's jump into a list here. I've got a few different things to run through, like I said. Maybe you have some of this going on and it might make your financial plan incomplete. So the downturn we've experienced in '22, that was a rough year obviously for the market. And when it's the early stages of retirement, Tony, it's more detrimental and people [inaudible 00:01:38] are aware of that and why that is something called sequence of return. So let's talk a little bit about why it is a bigger problem if you are retiring in a down year, like in the early days of your retirement versus later.   Tony Mauro: And in simple terms really, say you decided to retire at the end of '22. And we did have a down year, although years before, this is different because we've had such a run-up, but if you retire and in the early part of a long prolonged downturn, presumably you've generally got some years left to live and it's going to be very difficult, because you're going to need this money to supplement your living to make that up without taking a lot of risks. And so generally, you don't want to be overly aggressive, I would say. And obviously if you're 90 years old and you have a downturn, it's pretty easy to see. It's a lot different if you're than you're 65 or 70, because you're a little closer to the end. But really you want to make sure that, again, in these early years that you, as you're getting into retirement, even before that, you're switching things up. So number one, hopefully that doesn't happen or if it does not really going to affect you too negatively. But we do see that a lot.   Speaker 1: Oh, for sure. And so basically, because, correct me if I'm wrong on this, Tony, but it's like you're basically, if you're going through a major drop, if you're going through what, I don't know what we were doing, let's say 22% or 20% last year or whatever. In the early days of your retirement, it's really going to scramble up your picture, because you're tapping your portfolio as it's losing or after its lost value. And then you're having to sell more investments to possibly raise money to fund part of your lifestyle, whatever portion of your financial plan that needs to do. So it's this double whammy. So you're draining your savings more quickly, but you're also leaving fewer assets in those set accounts that can also regenerate more growth. So it's almost maybe even a triple whammy.   Tony Mauro: It is a little bit of that because, yes, with that, if you're already down say, I don't know, 15, 20%, then you're taking out 5 or 6% or whatever that might be, really starts to drain the portfolio quickly. And if that's your main source of retirement income, you have to make sure, well obviously the big one is you're not going to run out of money but it's, again, being different. If you're 90 and all of a sudden you have a little downturn that's not as detrimental.   Speaker 1: And downturns do happen. We can ride these out, but just something to be aware of, which again is where the planning comes into place. Because people sometimes will say, "Well, when you're setting up your income strategy, which horse are you going to ride first? The social security horse or your own horse." So some people will say, "Well, I want to wait social security to maximize it at 70," but maybe the strategy looks better depending again on the environment as you're getting close to retirement to maybe take social security a little earlier and right ease off of going into your own accounts until later. Again, it's all timing and it's all strategy.   Tony Mauro: It's all strategy especially with the incomes that you can't outlive, which are few and far between today. Social security and then some of us have pensions that we can't outlive, but most don't now. It's social security and whatever you've accumulated in your 401ks or savings. And so it takes a little more savviness to come up with a good plan.   Speaker 1: So sequence of return risk can certainly be a problem if you don't have that taken care of and you have it in complete financial plan. And then of course we can add to that conversation we just had by saying the lovely inflation effects over time, even normal inflation, Tony, let alone what we're dealing with right now.   Tony Mauro: So I think this is another bad whammy, if you will, especially as we're recording this, we all know what inflation has done for the last year and a half or so.   Speaker 1: I think it actually, if time we're taping this or we're just happened a little bit, I think the January, oh, that's right. It was January's numbers. We don't have March's yet. Oh, excuse me, February's yet. It was back up a half percent so.   Tony Mauro: It was just about, yeah. And it's trickling back down, but again, take the scenario of a retiree, they could be down 15, 20%, they're trying to take money out and by the way, now stuff costs a lot more.   Speaker 1: Yeah. So you're down 15, you're pulling out 4, let's say you're using the 4% rule or whatever, and then you're paying 7% more at the grocery store. It's just not-   Tony Mauro: It hurts you.   Speaker 1: And you wonder why people are stressed, right?   Tony Mauro: Yeah. This is why people are stressed and this is why, although I try to make a case for people that you got to try to outpace inflation a little bit, even when it's low and it's hard to do now and be conservative because it's kind of high.   Speaker 1: Trying to find some vehicles that'll help you do that for sure. So yeah, you've got to have it. So again, if you're putting a plan together, you've got to be working with an advisor who's taken into account normal inflation, just at least nothing else they're planning for. Because if we can go into that simple conversation of, hey, if it costs you $5,000 a month to get by now, and even in normal inflationary times, well in what? 12 years? That's going to double, right? 10, 12 years, that's going to double. So then if you have a 30-year retirement, that's going to triple. So you got to make sure that you've got something in there helping those accounts grow to deal with inflation. And then medical cost is going to be number three on there and that typically outpaces regular inflation. So you certainly got to have that accounted for.   Tony Mauro: Yeah, you do. And it seems like as I'm looking through the list here, nothing's good, but we'll talk about anyway, because I think it's important to people understand some of these potential things that could become quite catastrophic and medical I would think would be one of them. Obviously as you retire generally your medical costs are going to go up. People are living a long time today where they're keeping us alive. And even my own father, his medical costs are up, he takes a lot of pills and things and I still think he's fairly healthy at 81. And so his costs are up. And so that eats again into his disposable income or his monthly income coming in. And again, just pile that on with everything else we just talked about, which we've got more here. It's something that you got to start thinking about because, and that's not even including some of the people that are in poor health and whether it's hereditary or something else, it adds up quickly.   Speaker 1: Well, and then of course number four is the possibility of tax increases. So just like inflation or whatever, we want to be able to try to retire in any environment, because we just never know what's, again, if you live 20 years or 30 years in retirement, you're going to see multiple administrations, which means you may see multiple tax code changes and we all know we're broke, the country's broke and we're spending money like it's water. So the likelihood of tax, even if they do nothing, Tony, the taxes are going up '26. So if you're not addressing future tax increases with your financial strategy, you are leaving an incomplete plan on the table.   Tony Mauro: And I do think it'll be interesting, we're still a few years away from '26, but unlike you, if somebody's just going to ask me, I think that they'll let a lot of these things expire and taxes will be going up in some form or another. And like you say it and as the time we're taping this, they just have been fighting over and delayed till June or, I don't know if they delayed it, I can't remember on the debt ceiling, but I think it comes due again in June or something. And some people want to keep borrowing, some want to cut. Obviously we spend more as a country than we're taking in. And I think we've talked about it a little bit before, the politicians never want to talk about, hey, it's like any other business. We don't take in enough to pay our bills. We either need to stop spending, or we need to increase our cost, or tax us more. So I can't imagine them going down anymore, but I'm usually wrong whenever I say that, I got to think they're going up in the future. And like you say as retirees, or in the rest of us, it's going to hurt you, because again, there's another little piece coming off before you get to spend anything.   Speaker 1: Yep, absolutely. More than likely it's going to be the case probably for quite a while. So we may not see rates this low again for a very long time. So you want to take advantage of it, which leads into number five, because you may want to take advantage of the tax rates now because there are challenges that present themselves with RMDs. Obviously we've talked a little bit about the SECURE Act. We're going to do a bigger, more in depth one later on, but they've pushed the age back again, so now it's 73 for those of born before '59, those born after '59, it's going to be 75. But a lot of people are in good shape and they don't want to take these Tony, they're like, "Well, I don't want to have to take money out." But they require it to require minimum distribution, so maybe taking advantage of the tax rates and doing Roth conversions, which is why that's been a very popular conversation piece for the last two years.   Tony Mauro: It really has. And we're talking about that more and more with people that do have sizable amounts is going a little bit against the grain and saying, well, even though you don't have to do it until 73 or 5 now, maybe we want to, at least filling up the tax bracket you're in, so that you can pay it at a lower rate, because that way it's now already been taxed and we can figure out something else to do with it. But if taxes go up and then all of a sudden you got to start taking money out, well again, that that's less in your pocket. And I think that's a mistake if you just blindly say, well, I'm going to wait because I don't want to do it right now and pay taxes. Sometimes it's actually better to pay a little than more later.   Speaker 1: And the likelihood, number six, that we're going to have a long-term care event just continues to grow. Two out of every three people, seven out of every 10 are going to have some event. It doesn't mean a nursing home, Tony, but it certainly means some sort of an event. It could be a short-lived event, it could be a longer event. It could be someone just coming out to your house for a few weeks. But either way, you may have to look at some sort of coverage on that. And it is expensive. People start looking at different alternative life insurance policies or different kinds of ways to possibly fund this.   Tony Mauro: And this could be a whole topic in and of itself as many of these could. But I would say just off the cuff, the best way to do it is try to protect, depending on where you're at of the income spectrum, with some sort of insurance while you're young enough where it's still relatively affordable. If you're waiting until 70, 75, if you can even get longer term care types of insurance, it's going to be extremely expensive. But a lot of people buy it when they're young and a lot of people now are using it to stay out of the home, the nursing home that is, is assisted living, people coming into your house and at least providing some benefits there where they can at least age in place and hopefully stay there. But yeah, if you don't have this accounted for and you have to go in, even if you're coming out and we're not talking nursing home here, but just for some care, it's like the medical costs, extremely expensive to do. And a lot of times Medicare doesn't cover a lot of this, so they're going to be looking for other insurance policies or your pocket.   Speaker 1: Absolutely. So you got to have all these pieces in there to get that financial plan in a complete status versus having some of these little pockets or holes that can certainly derail things. And Tony, we were talking a little bit about inflation and we were talking about economic times that we're in right now, this is March's episode of '23. There's still a lot of conversation about tons of tech companies, Walmart, a lot of places have laid off, Amazon, I guess that's retail and or tech. They've let a lot of people go already in the first quarter of this year. So the possibility of a job loss and what it could do to your retirement plans, especially if you're a couple of years away, let's say you've got five years or left and you think, "Okay, hey, as long as I can hang on to this job for the next five years, we're [inaudible 00:13:41]. But you never know, something could happen.   Tony Mauro: Yeah, it could. I'm in agreement. The people listening to this from around here will know what I'm talking about. But we have a huge Wells Fargo presence here in Des Moines and I don't know, 18, 20,000 people here total. And they've always been downtown. Well, they just came out and said, "We're moving everybody out to the western suburb campus and we're getting rid of these buildings," but they are laying off a lot of people. And of course, it's like 4 or 500, which doesn't sound like that many if you're talking about these giant companies. But here in Des Moines it's anywhere, it's a lot of people that, like you say, if some of these people were five, eight years from retirement, then thinking they were going to have this, well, it's like, "Okay, now what do I do?" Yeah, 55 60, nobody wants to hire me and I don't have an income. Maybe my skillset newer employers want. And that poses a real, at least, concern. Best way to combat it is obviously keep your skillset up, assuming you still want to work and stay nimble enough where you know can get out and get something else, but I don't think it's easy. The other way to do it too is have the emergency fund. We talk a lot about in planning of three to six months, or maybe even a little more to help you decide, get you through paying the bills until you can at least find something. But...   Speaker 1: Definitely got to have that, you got to have that emergency fund in place. Hopefully, if nothing else, COVID maybe taught, hopefully, many folks that it was going to be important to have some emergency funds sitting there if they unexpectedly lost a job for 2, 3, 4 months. So definitely-   Tony Mauro: I got-   Speaker 1: Go ahead.   Tony Mauro: Sorry for the interruption, but I was going to say the other thing too, how many of us out there, probably a lot of people can resonate. I been on my own for so long, I've forgotten what it was like, but gone are the days that people go to work and can feel like, "Well, if I work hard here, I'm going to be here for 50 years and I'm going to ride off into the sunset," because a lot of times it's companies, they just say, "Well, you know what, we're all about the bottom dollar and well, we're going to cut that department, or we're going to consolidate and do this." It doesn't seem like people have that safety anymore that they used to, and-   Speaker 1: It's definitely more rare. Pensions have been dying since the early '00s, late '90s, early '00s. And I think longevity in corporations, 30 and 40 year jobs have been taking that kind of hit for the last 20 plus years as well. And it's a big jobs market or it has been. Emerging markets and industry and all different kinds of things, but we also like usual, we oversaturate in some areas, other areas get to suffer and then they start to balance out. But it's certainly something to think about. And I think one thing I tell people all the time is, if you're really worried about something and you have any mechanical inclination skills, we sorely are going to be in source or shape for electricians, and carpenters, and plumbers, and things. It may not be the sexiest sounding thing, but I tell young people all the time, "Hey, if you don't think college is right for you, pay attention to in that industry sector, because a good contractor's worth their weight in gold."   Tony Mauro: We have a lot of commercials airing right now. I know we're getting off the subject, but if you can come and work hard, I think it was for heating and air conditioning. You become a journeyman, you can make a good living, a real good living, and you're always going to be in demand. But I think that, yeah, you're right, here, these industries are suffering. They can't find people that want to go do it. Everybody gets-   Speaker 1: They don't want to get their hands dirty. There's a young gentleman here in my area, he's been doing concrete for about seven years and he's only like 27 years old and he is just killing it. He's just making money hand over fist, because he does a great job, he and his, team and they show up and they get the work done and he's like, "Yeah, I don't have student loan debt and I don't have all that stuff." As a matter of fact, he's living in a half a million-dollar house and he's 27 years old while his best friend has got $300,000 in school debt.   Tony Mauro: Yeah, I've always said there's a ton of different ways to make money, make a living. And if you're good at business, if you're good at that kind of stuff, and you can run a good business, you can make as much as, or probably more and have a different type and a great lifestyle than somebody works for corporate.   Speaker 1: But entrepreneurship is not for everybody.   Tony Mauro: Not for everybody.   Speaker 1: You got to know who you are. You got to certainly know who you. And that goes a long way towards a good complete financial plan, whether it's a financial strategy while you're still working or in retirement, knowing who you are and being honest about some of those things can certainly help you and your advisor plan accordingly. We got a little sidetracked, but I think it still brings back in the nature of the beast of just money and how we take care of ourselves and how we strategize for the future, so. Last one, we'll just do it real quick and just that's passing assets as smoothly as possible to future generations. That's really just being tax smart, tax efficient with whatever you've got. So if you're wanting to leave that 401(k) behind to your kids, well the Stretch IRA removal from the first SECURE Act may say that you need to change that strategy a little bit. Things like that.   Tony Mauro: And that area alone should be enough where you should be talking to your advisor, especially if you know want things to happen a certain way. And on top of that, you got taxation and some other things. So to go about that blindly, I think you're really, to make it short, going to be in for real surprise depending on how you do it. So please go out and get some advice on, well on all these, but that one for sure.   Speaker 1: Yeah, tax efficiency in retirement. Some people say, "Well, I'm going to leave my," joke and say, "I'm going to leave my kids a tax bill," or "I'm going to leave them a credit card statement," or something like that. But I think at the end of the day, we all truly just want to, if we're going to leave a legacy, we want to leave it as efficient as we can, because God willing, we lived a long life and by the time we're leaving something to our children, they might be grown adults in their prime earning years. They might be in their 40s or even 50s in their earning years. And so you don't want to hit them with putting them in a higher tax bracket if you can avoid it. So again, efficiency is the name of the game, strategy is the name of the game. So if you want that complete financial plan, make sure that you're checking off some of these items on today's list. And if you need help, as always, stop by Tony's website, get in touch with he and the team at Tax Dr. Inc. You can find them online at yourplanningpros.com. That is yourplanningpros.com. Don't forget to subscribe to the show on Apple, or Google, or Spotify, whatever podcasting platform app you like to use, you can find our show there, Plan with the Tax Man, and that just lets you catch future episodes as well as check out some past ones. Tony's been helping folks for 27 plus years, great resource. He's a CPA, CFP and an EA, so certainly got a lot of good skillset there to help you out. Tony, thanks my friend. As always, I appreciate you. I hope you have a lovely start to March and good luck with those taxes, bud.   Tony Mauro: All right, we'll talk to you next time.   Speaker 1: Yep. We'll see you in late March here on Plan with the Tax Man with Tony Mauro.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Retirement can come with a lot of tax questions and concerns. From understanding the tax implications of withdrawing from your retirement accounts to minimizing taxes on investment income, it can be overwhelming. On today's episode, we'll break down the top ten tax questions retirees are asking in 2023. Before you file your 2022 taxes and plan ahead for the rest of the year, make sure to listen to this episode as we'll discuss some important tax questions that retirees should ask themselves to ensure they're making the most of their retirement savings and minimizing their tax burden. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Welcome into another edition of Plan With The Tax Man with Tony Mauro and myself, here to talk about the top 10 tax questions for retirees, 10 or so, somewhere in that neighborhood, for 2023. I mean, hey, it makes sense to go ahead and have this conversation with Tony. It's Plan With The Tax Man for Pete's sake. We got to get into that conversation with him. Tony is a CPA and a CFP, an EA of 27 plus years in the industry. We're going to go through this. Right of fact, it's right in the middle of tax time. We're taping this on Valentine's Day. Hopefully everybody has a good Valentine's Day. It is getting ready for tax time, but Tony, let's break down a few of the top questions and just help folks with a few things to think about to get themselves ready for not just the annual tax prep, but also the actual year long tax planning and things as we move further through retirement, not just the history look of that thing. How you doing my friend?   Tony Mauro: I've been doing good. You say Valentine's Day today and-   Speaker 1: That's right.   Tony Mauro: Got a lot of people coming in, dropping off their taxes. Now that everybody's starting to get most of their documents, their focus is-   Speaker 1: Oh yeah.   Tony Mauro: And of course we just had the Super Bowl. With all the ads on the Super Bowl, everybody's thinking about it now all the sudden.   Speaker 1: Yeah. True. Very true.   Tony Mauro: Busy.   Speaker 1: And in what you do, because you have both sides of the coin really, because you are a financial planner as well as a CPA, you look at really this stuff through multiple lenses, which I think is a nice benefit as well. And tax prep is that annual thing, but most CPAs look at, that's history, right? It's like the year-   Tony Mauro: That's right.   Speaker 1: That was. Whereas I think working with someone who does financial planning and the CPA, they're not only taking care of the past year, but they're really looking at how things are going to affect future years. So let's dive in, talk about some of that from that aspect. Let you give us, 'cause there's a lot of them here so we'll see how many we can get through, but tax implications of withdrawing money is number one from different accounts. This is important because we talk about bucket strategies. People are used to hearing that. Well there's also kind of tax bucket strategies if you will.   Tony Mauro: Yeah there is and all of these things we're going to talk about I would caveat right off the bat is to make sure, especially as a retiree, you're talking to your advisor, whether it be your financial advisor, your tax advisor, or both.   Speaker 1: Right.   Tony Mauro: 'Cause all of this really can affect your taxes negatively if done improperly, which I have seen a lot, but taking money out of retirement plans, the IRS doesn't make it easy for us 'cause they have different rules for almost everything.   Speaker 1: Right.   Tony Mauro: And depending on which type of retirement plan you take it out of, for example, say you're starting to pull money out of your 401k and it's just a traditional 401k, that money's never been taxed. So that's going to be added to your taxable income, which you're probably not going to have any penalties on it if you're above 59 and a half, but you want to make sure that you're not just blanketly pulling a bunch of money out and then you've got other money coming in as well and all the sudden you got a huge tax bill. That's the other thing. A lot of this leads to surprises at tax time if not done properly. So you have to pay attention to that 'cause the 401ks are different than the roths. They're different from just pulling money out of a taxable type of investment account, things like that. All of this should be taken into account with some tax planning.   Speaker 1: Well how you, and where you, pull money from is going to affect number two, which is social security benefits being taxed. People still get very confused by this. So can you explain to us some of the rules on this, on how it works because this is a thing. It can happen.   Tony Mauro: It can happen and a lot of people get confused on them reducing your social security versus taxing your social security. And so if you are full retirement age, and it depends on all of us now or depending on when you were born, but once you're full retirement age, they can't reduce your benefits, but they can and will tax it depending on how much other income you have coming in from other sources like we just talked about in number one or maybe you're still working, things like that. So what happens is is in a nutshell, if you make a little too much money from other sources, then all the sudden they have this kind of backdoor tax, they start taxing your social security. They're not taking your social security, it's just like income. They're just taxing it. The tax is not 100%. So it isn't like you're being robbed completely, but it does make a difference because a lot of people aren't withholding anything from their social security benefits. And then if they add it to their income, then all of the sudden, again, they have that surprise tax bill and they're asking us, "Well, hey, what happened?" And then we say, "Well your social security, part of it's being taxed or they can tax all the way up to 85% of it."   Speaker 1: Yeah.   Tony Mauro: Again, people get confused, "Oh, my God. My tax rate's 85%." No. They're just taxing 85% of the benefit at whatever your tax rate is.   Speaker 1: Right. And so it's based on income. So how you're pulling money out of your other retirement accounts. So there's ways to be strategic so that we're not getting too crazy and not hitting that highest number on social security, right?   Tony Mauro: That's correct. There's different ways to pull money out and then at least fill up certain, well we call them tax brackets or buckets because-   Speaker 1: Yeah.   Tony Mauro: Unfortunately for us, there isn't just one tax rate. For every filing status there's five to seven. And so it's very easy to jump into the next one and then get a bunch of money taxed at a little higher rate. So-   Speaker 1: Yeah.   Tony Mauro: That's where the planning comes in is trying to maximize that.   Speaker 1: Yeah. I think most people still get confused by that too. If you're, let's say, in the 22% tax bracket, not every dollar you have coming in is at 22%.   Tony Mauro: It's not.   Speaker 1: It's incremental. Yeah.   Tony Mauro: Yeah. It's incremental. And so you got your marginal tax rate, which is the tax on the next dollar you receive. And then your effective tax rate's kind of the average. But even for somebody that's single, let's say, the top 22% rate's about 89,000 for '22, but anything over that, any dollar over that, then everything's 24 and then it jumps all the way up to 32.   Speaker 1: Yeah.   Tony Mauro: So it can get taxi in a hurry.   Speaker 1: Yeah. Gets heavy. Yeah. It starts to hurt.   Tony Mauro: Yeah.   Speaker 1: All right. Number three, taxation of pension. Is that different at all? Is there anything for folks to think about there or know there?   Tony Mauro: Well, again, it's a technical thing depending on what type of pension you have.   Speaker 1: And some states waive this, right? Depending on where you live, yeah.   Tony Mauro: Iowa now on the state level is not taxing pension income for retirees. Yeah. They just passed this, by the way, for '23 and beyond. I think it's a way to, because they always tax retiree income before maybe to try to keep people here in their retired years. But, some of it though is even taxable at the federal level. For a lot of our big pension, which here is IPERS, some of distribution is taxable at the federal level and some of it is exempt. And of course that's up to IPERS. They figure all that out for you, but if some of it's taxable at the federal level, again, you've got that same deal of now all the sudden we got to make sure that we're not getting a tax surprise and we don't have enough withheld from our pension incomes.   Speaker 1: Okay. All right. Number four, the Secure Act, the first time, and also the Secure Act 2.0 passing. Anything there that could affect income and taxes? Obviously they moved the RMD age so it does-   Tony Mauro: RMDs, yeah.   Speaker 1: Give you a little bit of wiggle room for some other strategizing. Anything there you want to enlighten us on?   Tony Mauro: Well, I've been talking to a lot of people about the RMDs with the Secure Act, which I think for a lot of my clients really is going to benefit them 'cause a lot of them don't really need or want to start taking the money out. And so if they can postpone it, I think that's an advantage, truly of course. I think too though, they've changed some things with the Roths and some incentives to participate, but as far as retirees go, I talk to them mostly about possibly deferring some of this and keeping it growing a little bit longer if they can.   Speaker 1: Yeah. I know there's lots of different little things in there. So it's certainly wise to. And since the Secure Act 2.0 is still pretty new and they're still trying to decipher a ton of what they put in there, it's certainly worth making sure that you talk with your financial professional and CPA as to anything that might change for your scenario. Any special tax deductions or credits that are available for retirees at all?   Tony Mauro: Well, they are and backing up to the Secure Act, I think we were talking about last time possibly doing a podcast on that 2.0 Later in March, April, once kind of some of this dust settles.   Speaker 1: Yeah, we can do that.   Tony Mauro: It can get technical, but we don't want to get too far off in the weeds with it, but something to think about, but tax deductions or credits for retirees, there are some. The tax deductions, of course, a lot of retirees, depending on what their other income is, they have a lot of out-of-pocket medical. They are paying for a lot of supplemental health insurance that we see, at least in our client base, is enough to trigger deductibility on some of that. So we always tell them to make sure that they're keeping track of that, where the younger people, they can't get over the thresholds very much. There's those. There's some credits if you're disabled. Oh, of course if you're blind and things like that that you might be able to take advantage of. Again, if you're even remotely asking, I wouldn't be afraid to ask your advisor. It doesn't matter if you think it's kind of ridiculous. There could be some deductibility there. So I would definitely ask if you've got some kind of situation.   Speaker 1: Yeah. And they increased the standard deduction, correct, for '22?   Tony Mauro: They did again based on inflation here, just looking at that. For married filing joint now it's up to 25,900. You do get an additional 1,404 if you're 65 or older. So that kind of bumps it up a little bit for you too.   Speaker 1: Gotcha.   Tony Mauro: It's theirs and same way with being blind, but I think the biggest thing that we see besides that of course would be the medical for most of them. Another one too, I don't even know if it's on our list. Let me look down. Yeah it is. It's actually number eight, but we could talk about it a little bit 'cause a lot of retirees like to make contributions to charity. It seems like moreso than maybe the younger people. And so I always encourage them to keep track of that, both cash and non-cash because-   Speaker 1: Yeah.   Tony Mauro: They do add up and a lot of them are very, very charitable.   Speaker 1: Yeah. Tax benefits for charitable contributions also. QCDs, which could help you with your RMD, satisfying that goal. So yeah. That was going to be on the list so that's good you touched on that one as well. So that's certainly something you could look at. How about moving? So that's another one to consider. So maybe if you're getting close to retirement or maybe this is the year you were going to retire and you're considering, or maybe it's next year, and you're considering moving, I don't know if I would let the ultimate decision be that I'm moving to, let's say, Florida just because the tax is different. I'd be going because I'm cold and the tax is different.   Tony Mauro: Right. And the tax. It's an added bonus.   Speaker 1: It's an added bonus, but it is something to consider.   Tony Mauro: It is. And again, Iowa is now, of course I've been here all my life, but now all the sudden it's a little more attractive as a retiree, other than the cold, is that you've got this non-taxability of retirement benefits, which for most retirees, it's like a state like Florida. Now the difference is any earned income in Iowa, if you're retired, you're still going to pay taxes on that. Whereas Florida and some of these states with no state income tax don't have that. So again, you got to kind of take a look, weigh all the options there.   Speaker 1: Okay.   Tony Mauro: Because I don't know. A lot of retirees in Iowa, they kind of just work for what I call mad money to have, and here that still is taxable, but without having their retirement income taxable and social security now they're still kind of elated, but it is important.   Speaker 1: Yeah.   Tony Mauro: Yeah.   Speaker 1: Yeah. Something to factor in there. I think they're going to get their dollars one way or another. You think it's like, "Hey, I'm moving to this state 'cause there's no income tax," but it may have a higher cost of living or it may have different kinds of things. A friend of mine moved to Colorado and he's like, "Wow. I can't believe how expensive it is out here." And it's just some of the little things that he was surprised by like tagging his vehicle and the insurance on the car. There's massive difference versus his prior state. So always little things to consider in there. Let's see. We're talking about charitable contributions. What about gifting money? Any tax considerations there if you want to gift money to kids or grandkids?   Tony Mauro: Yeah. This is an area another, just like social security, I think with a lot of confusion. People always ask, "How much can I gift to my kids without paying income tax?" And I say, "Well, if you really want to know, the threshold's extremely high," because they kind of confuse the gift tax exemption every year, which I believe is like 16,000, but I got to refer to my charts-   Speaker 1: I think it is. Yeah. I think it's either 16 or 17 that you can give per person. Yeah.   Tony Mauro: Yeah. So I tell them, I said, "Well, you can gift that much per person to avoid the have to file a gift tax return." But all the gift tax return really is is a filing of the return telling the government that you used up a little bit of your lifetime exemption, which I believe is for a married filing joint about 22 million.   Speaker 1: Yeah. It's crazy high right now. Yeah.   Tony Mauro: It's very, very high. And considering, yeah. Here it is. I finally found it. So the gift tax for '22 is 16, '23 it's 17,000 that is. So for most, what we tell them is that if you and your wife want to gift your son and his wife say money, you each could gift them, each one of them, 16,000 or 17,000, it's 34 a piece. So you're talking about a lot of money. A lot of people can't gift that much-   Speaker 1: Right. Yeah. That's pretty hefty. Yeah.   Tony Mauro: In one year. But even if you go over that, you've got some farmland or something like that, you want to gift them $200,000, you're not going to pay any gift tax on it. We just have to file a return to keep in the good graces of the government and tell them you used that much, but-   Speaker 1: This could be a nice future strategy though, Tony, if you're looking to bring down your complete total net worth because of, let's say, because of RMDs, because of maybe converting money or just reducing the estate size overall, if that's part of the strategy, this could be a nice way to do a little bit of that too.   Tony Mauro: It is. If you've got somebody with enough of an estate to possibly have estate taxes later on, the gifting and using the annual exclusion amount is a great idea along with some other things 'cause you got to get some of this money out of your estate in order to escape that and a lot of people are very content with just gifting the exemption amount every year.   Speaker 1: Yeah. There you go.   Tony Mauro: At least trying to get it out of there.   Speaker 1: Right. Okay. We talk about individuals a lot. Sometimes we should do probably more for businesses considering you are a business, but any tax things to discuss real fast for small, maybe not even a business, but maybe retirees who go into a small or a side hustle. So they're in a retirement and maybe they're selling paintings or they're selling arts and crafts that they've made. Whatever tax ramifications you'd like to share with us from a small business or side hustle kind of thing.   Tony Mauro: I would say for small business, I would keep it simple. I wouldn't go into incorporating things like that unless all of the sudden really started taking off. A lot of people confuse doing something for a hobby with trying to make money and have a profit motive. In other words, they'll come in and say, "Well I've got this business. Here's all my expenses." And we say, "Well, where's the income?" "Well I don't make any money." And I say, "Well, where's the sales?" "Well I don't even sell anything." "Well that's a hobby. You can't deduct that." So you got to have a profit motive. Not to say you can't lose money.   Speaker 1: Right.   Tony Mauro: And you can deduct that against other income, which is good. So if you are doing a side hustle, keep good records to see if you're making money or losing money. Obviously if you're losing money, it's a great tax deduction, but eventually if you're losing money, that's money going out the door.   Speaker 1: Right.   Tony Mauro: You certainly don't want to do that forever. But on the flip side, income-wise, it's going to be taxed and you will pay into social security, believe it or not, even if you're 75, 80 years old, you got to pay back in, which a lot of retirees don't like. You can escape it though with passive income like rentals.   Speaker 1: Okay. And speaking of, final one here, the number 10, any tax issues to discuss if you are looking, obviously a lot of people, the housing market went kind of crazy definitely last year. There was still a lot of things pretty high. Maybe if you sold your primary residence or something like that. Anything to consider or ponder?   Tony Mauro: Well I think the tax ramifications, here in Iowa for the most part, it may not be the same in some of the higher priced cities, but you can, for married filing joint, if you've lived in the home for the last five years, it's your primary residence, you can exclude up to $500,000 of capital gain before you have to start paying any long-term capital gains, which is still taxed better than income tax rates, but in Iowa, most people aren't making a $500,000 gain. And so they can get out of their home and take that gain and, well they can do whatever they want with it. The problem is now as prices are going up, when they move into something else, they kind of end up rolling the whole thing into something new, but at least you didn't pay tax. But, like you were saying though, if you're downsizing, that's when it's better. I sell my home for 700,000 and I paid 250 way back when-   Speaker 1: Right.   Tony Mauro: And all the sudden I got a $450,000 gain and I can go out, I got 700,000, and I can go out and buy something smaller for 350. Yeah. That extra money could go in my pocket and never pay taxes on it, which is a nice deal. That's been around, I don't know, maybe 10, 15, 20 years now, but that never used to be the case. You always had to pay tax when you sold something.   Speaker 1: Okay. So a lot of little things to think about. Again, it's all part of strategizing for just not only the past year, but also future years into retirement. So as usual, if you've got some questions and you need some help when it comes to how to get a tax strategy, to get a retirement strategy in place, make sure that you're reaching out to a qualified professional like Tony and his team. They are Des Moines Professional Alternative, excuse me, at Tax Dr. Inc. And you can find them online at yourplanningpros.com. That's yourplanningpros.com.   Don't forget to subscribe to the podcast Plan With The Tax Man on Apple, Google, Spotify, all that good stuff. And again, if you need some help, reach out to tony at yourplanningpros.com. Buddy, thanks for your time. Appreciate you.   Tony Mauro: Yeah.   Speaker 1: I'm going to let you go 'cause it is Valentine's Day, so I hope you guys have a great day.   Tony Mauro: All right. You guys do the same. Let's talk to you soon.   Speaker 1: We'll see you next time right here on Plan With The Tax Man, with Tony Mauro.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

A million dollars is a goal that many people strive to earn for their retirement nest egg, but how far can that lump sum actually carry you? Today we will be looking at an article that breaks down how far a million dollars go in various states. CNBC Article: https://www.cnbc.com/2022/12/17/states-where-1-million-dollars-retirement-savings-runs-out-fastest.html Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Back here for another edition of Plan with the Tax Man with Tony Morrow. We are into early February here on the podcast, and we are going to do a fun little episode here on where a million bucks runs out the fastest. We'll put a link to this article on the show notes, but this will be a fun episode to look at this article that was written just before it was written in 2020, and we'll take a look at how it breaks down different states for how far a million bucks will go. This is kind of a fun little exercise, especially for those folks who think, "Well, I need a million dollars, or if I don't get to the million, I can't retire." Well, a million might not get it done in some places, and it might be just fine in others. So that's the point of the conversation. Tony, what's going on, my friend? How are you?   Tony: I'm doing good. It's tax season here. February, always the coldest month for us, and so it's just kind of work.   Speaker 1: That's true. That is true. I teed up on our previous podcast we were going to get into the Secure Act 2.0 passing there on December the 30th, I believe is when it went through of '22. We still got some more stuff we're breaking down. We're going to talk about that probably on the next episode, next episode or two. So make sure you tune back in for all the changes there. Of course, as always, if you've heard some things about the Secure Act changes and you need to make sure you reach out to Tony and have a conversation with he and his team just to make sure, especially around the concept of RMDs. We'll touch on that. Just real quick, Tony, one of the big takeaways, there was a lot of stuff in the new Secure Act 2.0 changes, but they moved the age for required minimum distributions to 73. The short of it is if you've already started taking RMDs, you're stuck taking them, so just keep doing it. But if you were turning 72 in 2023, sometime early this year, you can now wait until you're 73. So you do have a little reprieve. But again, please double-check with your qualified professional before you take any action, and then we'll break down all the rest because eventually it's going to 75 and so on and so forth.   Tony: Yeah, it's going to be phased in. Yep.   Speaker 1: Yeah, so we'll talk about some more of the stuff on that, but I wanted to kind of share that with folks real quick. All right, so let's talk about this fun article here. This was done by... Who did this?   Tony: Well, CNBC put it out, but yeah.   Speaker 1: Yeah, CNBC put it out, but Go Banking did the analysis. Based off the US Department of Labor Statistics. This is a breakdown of where, and again, we'll put the link in there so you can kind of see the color coding, but how many years would a million dollars get you in retirement savings in certain states? I don't think the top three are really shocking that are the worst for how long it's going to last. I imagine anybody could interchange them and think, well, it's going to be Hawaii, New York, and California, and it is. The top three are those. Hawaii with a whopping 11 years, Tony. So if you got a million bucks and you want to retire in Hawaii, if you got a longevity ahead of you, the million dollars is not going to do it.   Tony: Not going to go very far. And I love Hawaii and I go there every five years, and I would love to retire there, but... Well-   Speaker 1: You're going to need a lot of money.   Tony: I need a lot. It's just not going to last that long. And I'd probably go crazy because I would go...the island. But it is interesting because I think that million dollars we talked about at last episode about that, that's kind of that sweet spot. Everybody always kind of shoots for sure. I'm a millionaire and I'm good now once I have a million. And I think if you read through this article, it really gives some eye-opening things. It depends a lot on where you live and-   Speaker 1: And how you live.   Tony: And how you live.   Speaker 1: Yeah.   Tony: So I do think that these top three on the highest side don't surprise me. I think some of the other ones that are especially like Alaska and then maybe the eastern [inaudible 00:03:42].   Speaker 1: I expected Alaska to be high too, because you got to import a lot of stuff, right?   Tony: That's true. You do. Yeah. Yeah, you do.   Speaker 1: It does tend to be coastal. So when looking at this map, folks, if those of you decide not to check this out, we'll just kind of talk you through it. Basically, most of the east coast and the west coast fall in that million dollars won't go so far category. I'm sorry, with Vermont being the best of the high side. And 18 years, a million dollars if you're out in Vermont, will last about 18 years according to this. What were you going to say?   Tony: Well, I was just going to say speaking of the coast and then Hawaii, I always kid people saying that that's the fun tax, the sun tax, but that's where people like to flock to.   Speaker 1: Sure.   Tony: And so a lot of population and tends to drive prices up. So there's some reality to that. I do want to jump to the other side because my infamous state, Iowa, is number five on the list of the lowest places or where the money will go the furthest.   Speaker 1: Almost 24 years. Pretty good,   Tony: Pretty good. But notice most of those states you got for those, just listening, you got Oklahoma, Kansas, Midwestern to Southern.   Speaker 1: The Heartland.   Tony: Indiana, the Heartland, Tennessee, Arkansas, I mean the best one of course. But I believe that's Mississippi, right? MS?   Speaker 1: Is that Mississippi or Missouri? I think it is. I think it's Mississippi. MO, that's right. Yeah, it's Mississippi.   Tony: But Mississippi, it's not a place that I would think of going, but I mean it's a pretty good sized state. But I think the point of all this really is that depending on where you decide to retire, it's going to last you a lot longer if you're just taking this million. Cause I think they based this on the state's cost of living expenses for housing. If you're going to take that money and live off of it it's going to last you for quite a while.   Speaker 1: I mean, I was pleasantly surprised to see Georgia so low down, if you will. So 24 years basically for Georgia, which is a hugely popular state. Atlanta is a massive city, obviously. And I imagine that states that are probably interesting, Tony, because Atlanta probably is more expensive than Marietta, right? So the further away from the metropolis as you are in some of these states, probably the more affordable it goes. Michigan was on the lower part at 23 and a half years. Again, a pretty populous state, a lot of heavy metro centers. Then the states that aren't mentioned, they kind of fall into this range of 19 to 23, 22-ish. And that's states, Texas, kind of surprising that Texas falls into that kind of 19, that right around 20 years. That's where my North Carolina, where I'm at, falls into place. The Carolinas both fall around 20 years. So Texas kind of surprised me a little bit because so many people have been moving there. Now granted this is two years old, this survey, and that doesn't probably take into account the inflation obviously that we saw happen in the last year.   Tony: I think Texas, even though it's not the considered the beach towns in the states, but it is so large and there's so much-   Speaker 1: Massive cities. I mean Houston and Dallas are just... San Antonio's not massive, but there's a lot of people and they're really... San Antonio's a great place to visit and live as well. I have some friends there. So when you're looking at this kind of thing, you're kind of saying, okay, I've got this retirement goal in mind. And we talked, I don't know, probably a few months back about does it make it sense to move to a state that's maybe tax advantaged or that the cost of living. If you live in New York, a lot of people moved to Florida. So Florida falls in that mid-category as well, folks around that 19, 20 year mark. There's a huge reason why people moved from New York to Florida. And it's not just the cold.   Tony: No, it's not. Because I was down in Arizona golfing in November, and a guy who's lived there a long time saying they get a lot of Californians selling these massive real estate places and taking a ton of cash and then moving to Arizona, which it's not on the lowest end of the spectrum-   Speaker 1: It's around the 19 years. Yeah,   Tony: Banking a lot of money, the cost to live is less. It's still got the warmth and you don't have the beaches. I think that makes a lot of sense. But I think another thing in this article is for those that click on the link and read down, CNBC's got a good little retirement planning tool and it's highlighted about halfway down that really you can click on it, punch in a few basic things. You don't even need to grab anything. You just right off the cuff, and it's going to tell you how much you're going to need in retirement. Now, there's a lot more to it than that. That's when you need to get with your advisor and figure out, well, I'm going to be well short, what do we do? But it's an interesting little tool that most advisors, I mean, we have more complex things, but those are more inputs and more time. But I'd check that out if I were you, and of course the biggest thing that stands out to me, which we recommend too, is it's right in about the middle of the article. It says most investors are recommended to say between 12 and 15% of their salary, and many do not. It's down around, well, I get the 4% because that's what my employer matches. Well, that's good that that's better than nothing, but you need to keep going. And it gives you some ideas there in the article as well to a couple of tips, because-   Speaker 1: That's a great point, Tony. That 12 to 15%, somebody hears that and goes, there's no way. I can't survive, especially right now with the inflation we've all been dealing with. I can't survive on putting away 15% for retirement. What are you crazy?   Tony: What I tell him, I get a little sassy with him and say, oh, you can do it. You just have to re-engineer what you're spending your money on. And as Dave Ramsey's saying goes, I think in his book he says have to live like no other. So someday you can live like no other, but you got to take that to heart. You have to put this first and then engineer the rest of your life. But I shouldn't say all, but a lot of people do the exact opposite to get their life all engineering. Now I only got this much to say for retirement. So that's all it gets.   Speaker 1: Yeah, no, that's some good points because it's certainly interesting to figure out what it is that you need to do, how you need to do it. And a lot of it comes back to, we talk a lot on here, Tony, about X's and O's and you like to make the joke that sometimes it's easy for advisors to say, well, it kind of depends and you don't get super specific because everybody's different. So we try to play devil's advocate and kind of go a little bit each way, but the concept of how much you needed a total nest egg really does play in the factor how you live and where you live. Because even if you're in the same area, so let's just go with a lower state, one of the states that was, let's say 23 years, you're in someplace like Indiana, for example, or whatever. And if you're living in Indianapolis and you're going out and doing a lot of things and you're very active in your lifestyle, it's going to be completely different than if you live in Terre Haute and you do virtually nothing, or you live in the middle of nowhere. Or even in my state here in North Carolina, living in Charlotte and doing a lot versus where I live in the country is completely different costs of living. So how you live and where you live plays a huge factor in how much you're going to need for retirement.   Tony: It sure does. And I'm going through it with really right now with my own son, because he's out in Denver and they're young, got married. Very, very pricey. And they're actually all of a sudden looking... Houses out there, I mean, for what they are making at the time, boy, they just don't get much. And they're looking at them back here in the Midwest where they're both from and they're scratching their heads saying, boy, may, maybe Iowa or South Dakota, somewhere a little closer to home in the Midwest, our dollar's are going to go a lot farther. And they're not even retired. I mean, they're 26, 27, they just turned 27. So it's not about just the retirees, it's about I'm not advocating moving and getting out of your state.   Speaker 1: Sure. Right.   Tony: It's something to think about.   Speaker 1: Yeah, you definitely got to factor all these things in there, and depending on where you live, the snowbird thing certainly plays into a factor, even people in Iowa. Sure. Right?   Tony: Oh yeah. Oh yeah, Carrie'd love to get out of here.   Speaker 1: Right? Oh, it's cold. So think about that. And that's one of the reasons why Texas, Florida, so Texas and Florida are in that kind of the same range on this particular article of around right around 19, 20 years, where Tennessee is around that 23 year mark. Those three states have been very, very popular the last couple of years because of the income tax.   Tony: Yes, correct.   Speaker 1: And of course, the temperature, the weather. And then now this, the million dollars, the length that goes, certainly makes it appealing.   Tony: It does. And what Iowa's done, because we're in retirees moving here, not that appealing, or even the ones that have been here all their lives and want to get out is Iowa's just passed a law saying that the retiree income, which is social security, and then pensions and stuff, is not taxable at the Iowa level.   Speaker 1: Oh, okay.   Tony: And Trying to keep people here a little bit.   Speaker 1: And some enticement. Yeah.   Tony: A little bit of enticement. I mean, the weather is a big one as you get older, to the negative, I might add. But all these states are trying to keep people and attract people for different reasons because as we all know, I mean, Iowa's going to get their money somehow. It's not income tax, it's somewhere else.   Speaker 1: That's the thing of if you were moving someplace like Tennessee just for the tax break, that's probably the wrong decision because they're going to get you. Or Florida even, so you moved to Florida, but just for the taxes, and you're like, okay the sun's a bonus. It's still expensive to live, and it's going to be more expensive to live in Miami than it is to live in Gainesville.   Tony: Right. Exactly.   Speaker 1: They're going to get you one way or the other, local level, salt taxes, as you know they're called. To your point about Colorado, a good friend of mine moved from North Carolina to Colorado, and he is like, oh, some things are really great. And he's like, he couldn't believe what it did to his car insurance and just tagging his vehicle. He was like, holy moley.   Tony: And that's the kind of stuff, I mean, that's direct cost of living stuff there.   Speaker 1: Exactly, and that affects your total income outcome.   Tony: It does. And that's the whole point of this article, and obviously it's a slant a little more to retire there, but it's something to think about. I mean, the retirees have a little more to think about than just like somebody my son's age who's just working there. But it is interesting.   Speaker 1: Well, and that's where a strategy and a plan comes into place. And of course, when you're putting that stuff together, you can strategize for some different things. You can say, you can sit down with your advisor, you can talk with your loved one and say, where do you want to retire? And we say, oh yeah, we don't want to live in Iowa. We do want to live in Florida, or whatever. Well, you can still work with Tony and start strategizing for that, because Tony, you got clients all over the country.   Tony: We do. Yeah.   Speaker 1: So it's possible to go through and start calculating and planning instead of just winging it. You don't want to just wing this kind of thing. So it's fun little article. Again, we'll link it into the show notes if you want to check it out. We covered most of it here, but certainly ask yourself that question, where do you want to tire?Where and how do you want to live in retirement can go a long way towards getting that whatever that total number is or that total goal. And as Tony and I said on the prior podcast, really the million dollars probably shouldn't be the concept. It should really probably be how much income do you need to afford the lifestyle you want? So as always, don't forget, subscribe to us on Apple, Google, Spotify, Plan with the Tax Man. You can type that into the search box at any of those apps, or you can just find all the information you're looking for at yourplanningpros.com. That is yourplanningpros.com, where you can check out the tools, tips, and resources Tony has on the website. Schedule some time to talk with he and his team and get started today. As I mentioned, he's a CFP, CPA and an EA with 27 plus years of experience, so great resource for you to tap into. If you need some help and you're not already working with him, reach out to Tony Morrow today. Tony, my friend, thanks for hanging out, have yourself a great day, and enjoy yourself. I'll talk to you in a couple weeks.   Tony: All right, we'll see you next month.   Speaker 1: All right, we'll talk to you next time here on Plan With the Tax Man, with Tony Morrow.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Another year is upon us and it's a great time to ask yourself 10 questions to assess how ready you are for retirement to kick off 2023. If you're retiring this year, it's essential to have some concrete answers to these questions. If you're still a few years from the milestone, tune in so you can start thinking about these critical conversations. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Hey everybody, welcome into another edition of the podcast, it's Plan With the Tax Man time with Tony Morrow and myself here to talk about a 10 point checklist for retirement preparedness, a 2023 edition, if you will, so going to get started. Another year is upon us, so it's a great time to ask ourselves these questions and assess how ready we are as we are rolling into the new year. We're about halfway through the month already, which is crazy fast, and so we're going to bring Tony in and get this thing started. Tony, what's going on buddy? How are you?   Tony Mauro: I'm doing fantastic. Just off the holidays as everybody is and trying to get back into the swing of things and it's going to be tax season before we know it as we record this.   Speaker 1: Right, yeah, exactly. I know we're already halfway through the month as I said, it's like, what in the world?   Tony Mauro: Yeah, it goes quick.   Speaker 1: You and I were just chatting that the holiday break did not seem like it was that long of a break. It was just quick, so lots of things going on and I guess it's just our fast paced world, I guess.   Tony Mauro: Yeah, it really is.   Speaker 1: Next thing you know, something new is going on, but we got 10 on here, Tony, so let's go ahead and start diving in, check to see if we can get these checked off, so we don't go too long with this podcast and talk about some of these. Most of these are pretty major indicators that you need to have on your strategy or plan, and I think that's going to be the overarching theme is, having a plan's going to help you get prepared for these things that are coming fast and furious. Number one, do you know exactly how much income you need every month in retirement? And I think there's two ways of looking at this for things, Tony. When they're coming to see a financial professional like yourself, if they're really anxious to get to retirement sooner than later, they maybe low ball this number because they want to make the math work, so that you'll say good things, "Yeah. You guys can retire." And when you do that, you really hurt yourself in case you're not being accurate or you truly just look at the big ticket items, mortgage, cars, utilities, and you don't truly realize how much... This is a nickel and dime world. We all spend money a lot more than we realize. Do you know how much income you're going to have? Probably not. You're probably wrong. What do you think?   Tony Mauro: Yeah, in general it is, and the whole reason that I even wanted to talk about this topic, this month is, starting a new year. I'm getting a lot of course, and I always do, especially tax clients, whether they're close to retirement or not, start asking some of these questions. Then, when you get in your fifties, you really start asking this.   Speaker 1: For sure. Yeah.   Tony Mauro: I think that most tend to focus on the nest egg and not how much that nest egg may or may not throw off every month and then they have no idea what their bills really are every month. And that's lack of really just trying to, paying attention as to, like you said, all the little nickel and dime stuff we all spend money on throughout the month. If you don't really have a good idea and they're tracking that, you probably should start because I generally like to start with people as to this question, how much are you going to need a month? Rather than, well, you have 500,000 or 700,000, to make this work. We got to start at the end and then work backwards to see if the numbers support that. And I think most planners are going to do this-   Speaker 1: I think that's a good point. I was just having this chat the other day with somebody. It's an interesting point, back in let's say the '50s or even the early '60s when most people had a pension, they weren't focused on a total asset number, it was about the income because you had a pension, you had Social Security, and so if you had a modest savings and somewhere along the way, probably the '80s, we started shifting gears from how much income it is, to how much is our nest egg worth.   Tony Mauro: Yeah, and I think a lot of that's because a lot of these pensions have gone by the wayside-   Speaker 1: Yeah, for sure.   Tony Mauro: ... because they're just too expensive-   Speaker 1: And the greed I think. Well, everybody wants to say, "Now, well, I'm a millionaire," because it sounds awesome and I agree and it doesn't take as much as we thought it used to, to be a millionaire. As a matter of fact, we're going to have fun on our next podcast about which dates a million dollars will go the farthest in, so check out that one as we come out. But I think that's what happens and we singularly focus on something, this big ticket number versus what do we need to just make this thing work, so we can be happy in retirement?   Tony Mauro: Yeah and I think sometimes when you sit people down and we say, "Okay, your nest egg is X, let's sit down and go through this," and they're just floored about, "Well, wow, that money, if I want to plan to leave some or all of it to somebody else or if I'm even spending the principle, then it's a crapshoot of when I'm going to die and hopefully I have enough left." So a lot of variables in that.   Speaker 1: Yep.   Tony Mauro: You got to ask the question right off the bat.   Speaker 1: Yeah, you got to focus that income down and you got to get the number by going through that process because again, most of us tend to low ball that figure and then that can bite us in the tush later on in retirement. All right, number two. You've got the collection of stuff, you've got the accounts. Which one do you pull from first and how much? So, that's number two on the checklist.   Tony Mauro: Yeah. And this makes a big difference tax wise because most of us have taxable accounts and then most of us have, if you've got 401ks and then you've even got Roth's and things like that, is the tax man is there with their handout saying, give me some tax. And you've got to decide and plan what's the most efficient way to take this out without increasing the tax bill. Because again, that cuts into the money that's available for you to go out and have fun with. And I think a lot of people don't give this much thought. They just say, "Well, I'll take out of my taxable one first and save the other for later." And then here come the RMDs when you get a little older and all kinds of things that could hit you if you're not at least talking about deciding which is the best and the least tax invasive I should say.   Speaker 1: Yeah, for sure. And so it is important to figure out which accounts to pull from and when and where because it's going to affect. And these first three really do play all in together, really, they all play together. But number three is Social Security. When do you take it? Well, that's going to maybe depend on how much income you need and which accounts you have and where you're pulling from. It all plays together because maybe it makes sense to delay Social Security and tap into your own buckets or maybe it makes more sense to take Social Security and delay your buckets, everybody's different.   Tony Mauro: Everybody's different. And you know what? I got to say too, people who listen to the podcast probably say, "He never really gives me any straight answers. He always just gives me a lot of options," but it's hard to give a straight answer because this like the other ones, is the same thing. I do a whole webinar on this, taking Social Security and it's about an hour long that I tend to get people on to really go in depth with this because there is some technical things to this, but in the big picture, if you've got money coming in from other sources are still working, it may behoove you to delay taking it, because the monthly benefit does go up. And if you calculate that out as a return, it's not a bad return. But a lot of it depends on longevity in your family, other income sources, just a lot of variables like you said. It's worth, again, spending time there as well. All of these is worth spending time on, but these first three especially.   Speaker 1: Well, and number four is the great multiplier to everything else that's on the list as well. And that's longevity, because unfortunately, it is what it is. Look at inflation right now, we've been dealing with this for the last half year or more, and the longer you live, the more everything gets compounded. And I realize we don't know exactly how long we're going to live, so that's why you've got to stress test your strategy and your plan to go, "Okay, well what if I'm 75? What if I'm 85?" So on and so forth.   Tony Mauro: Yeah. And fortunately now, most planning software has the modeling in it that can do a lot of these calculations extremely quickly to do worst case based on where you're at now and how much you're taking out to give you percentages of, "Well, if I do it this way, I've got an 80% or 90% chance of never outliving my money." And to you, that might make a lot of sense. Well, that covers a lot of scenarios, but if you run some scenarios and it only says 60 or 70% chance of never running out of money, well now it's a little more, well, I may need to adjust some things, but longevity is an important factor. I know with my own father whose now 81, he's concerned about, he's got plenty of money, but I always have to reassure him that his sustainable withdrawal rate, which he's taking, he's never going to run out of money and he could live to be 100 and he'll be totally fine, but a lot of people aren't thinking about this again in the plan. And you sure certainly hate to run out of money and only depend on Social Security for the last part of your life, at least in my opinion.   Speaker 1: Right. Ideally, that's not the situation we want to end up with, so you need to strategize so that you know how to handle that. And longevity, if we all came with an expiration date, it'd be super easy, but we don't.   Tony Mauro: Yeah, it would be super easy. Yeah, absolutely.   Speaker 1: Number five, market volatility. Look, are you prepared for it? Many people found out last year or got reminded, whoops, this happens, it goes both ways.   Tony Mauro: It does go both ways. And I was just on a call today with a wealth client, she's 76 and she's invested pretty conservatively with dividend paying things. But the son was on there with telling me, "Well, maybe we should look at something a little more growth oriented because the market is down." And I said, "Your mom's 76, she needs this money for retirement. The volatility, she may not be prepared for that." And of course she's immediately spoke up, "No, I don't want to do any of that." But I think that people tend to, especially of course the sons and younger people, "Well, let's go ahead and invest a little bit more aggressively," but we're talking more retiree end here, which you do have to pay attention to that, because even dividend paying stocks took a hit last year.   Speaker 1: Right. And of course, bonds didn't do well. Volatility, and as a retiree, you can't just throw volatility to the wind, right, Tony? I mean, you can't go, well, now that I'm 70, I never want to experience volatility again. Unfortunately, that's just not realistic either.   Tony Mauro: I don't think that's realistic in today's market because the next one I know we're talking about here is inflation, because that creeps into this because if inflation, and of course it's high now, we might as well just get into it is, inflation eats away at your purchasing power and you never really think about it as a younger person. But as you get older, you start seeing about, I remember the day when this cost only this, and you can see it. And if you're sitting there-   Speaker 1: We all love to do that little, "Oh God, I remember when a Snickers bar was this," or whatever, as we age. But at the same time, regular inflation, we also typically ignore it, even as we do age. This crazy inflation we've had for the last six, nine months, has certainly reminded everybody as well. It's like, "Oh..."   Tony Mauro: Yeah.   Speaker 1: This isn't cool.   Tony Mauro: No, if you don't have enough to outpace inflation on your earnings, that is, you're going backwards and over the course of 20, 25 years, and I always tell tax clients when they complain about taxes and we're in a historically low tax rate, but nothing generally goes down, that I see. If you're going to be in around in retirement for 20, 25 years, you got to think that things are going to cost more, especially health insurance and stuff like that. I think inflation needs to be a big part of the plan.   Speaker 1: It's got to be, and it's going to continue to be there as well, even in normal numbers. You've got to have some exposure to the market or some sort of a growth vehicle, if it's not the market, it's got to be something, that maybe is linked to the market, tied to the market, whatever the case is. You've got to have some growth in your accounts and you've got to have some safety, some liquidity, all these different pieces we need, that make up the retirement puzzle. And number seven is tax increases. Tony, as a tax professional, that's a big part of what you do as well. It doesn't matter what rules they put in place, yes, that affects everything. But you're still going to have to deal with taxes. And there's a good shot that we're going to go up. Even if they do nothing else, they are going to go up. In '26, they return back to the old prior administration.   Tony Mauro: Prior administration, yeah. And I've been preaching for a good 25 years that we're in a historically low tax rate compared to the '60s.   Speaker 1: So take advantage while you can.   Tony Mauro: Yeah. And of course I've been wrong, because I keep saying, "They got to go up," and I have been wrong. But what they do, the politicians are crafty, they engineer, and that's probably not the right thing to say, but they engineer tax increases, so the public doesn't figure them out because it's suicidal to come out and say, "Well, I'm just raising taxes." They'll cut this itemized deduction or put limits on this. And in effect, that's a tax hike. It affects certain people, people don't really realize it because it's buried in their tax return and they're out of sight out of mind. But tax increases, we see it every day, they can hardly fund the government, not even getting into where they spend it all, but it's going to be something that's always there and they tend to creep up over time, whether it's the federal level or the state level. And so I think that's got to be a part of the plan too.   Speaker 1: Yeah, and like I said, in '26, they're going back up to the Obama administration tax code, if they do nothing else. And I agree with you, sometimes you say, "They got to go up," and they do something, but I think we can all pretty much agree that in some form or fashion, which is why the Secure Act, passing, Secure Act 2.0 that just passed at the very, very end of '22, there's some things in there, there's a lot of helpfulness I think for getting prepared for retirement, which is great, but I think the message in that, Tony, and we'll probably do a podcast here probably very soon in the next couple of weeks on the Secure Act 2.0 and some of the changes, but I think the message in that was resoundingly, here's some more tools to get prepared for retirement. You better do it. You know what I mean? Because we're telling you ahead of time, this is going to get tougher, start strategizing and start doing some things. Here's some more tools to help you save for your own retirement because we're not going to be be able to help as much or something. It just seems like the focus is there to tell the American people, start taking this on, your responsibility for yourself because that's where it's going.   Tony Mauro: That's right on. And that was my take from it too, because we all know that I think in the year 2035 that the Social Security fund, it's not going to be totally broke, but they're going to be paying out well more, than they're taking in. They're going to have to try to fix it. I think this is Congress's message saying, "Guys, you're America, you need to start saving more. We're going to help you by trying to change some limits and whatnot because-"   Speaker 1: As we creep up to that number, yeah, to 2034. '25, '35.   Tony Mauro: I agree with that totally, that that's a hidden message.   Speaker 1: And some of the stuff in the Secure Act 2.0, Tony, I think also could pave the way for changes to Social Security. Somebody has to be the, I don't know, the bearer of the bad news or that stands up and says, "Okay, here's what we're going to do. It's political suicide. They're going to kick that can as much as they can.   Tony Mauro: Yeah, absolutely.   Speaker 1: But at some point, they will have to make some changes to Social Security. This could just be another stage of that and again, we'll do an episode coming up pretty soon on some of the breakdowns and some of the different things and how they might affect you. But for now, let's keep going. Number seven was, again, tax increases, future tax increases. You got to be able to retire in whatever economy, whether taxes are high or low or the market's high or low, so that's what a strategy is there to help you do. You also need to address healthcare costs on this 10 point checklist, this is number eight. Again, it's crazy expensive as well, but you got to do something, the longer you put it off, the more expensive it gets.   Tony Mauro: You do. And it's eight in the list, but it's as important as any of them because this is the one that goes up probably the most in your retirement days is this. And I don't see any end in sight for these things going down. And so you definitely, it's going to be part of how much you need every month. This is going to be a big part of it, and I don't think this should be ignored. And you certainly can't afford to go without, so you got to have something and Medicare provides a lot, but you are paying for it out of Social Security, they would withdraw that benefit or that premium, I should say, out of your Social Security. But there's gaps and you're going to need other things, that's not a catchall.   Speaker 1: Yeah, no, that's true. And you've got to look at different ways to fund it. Look at different concepts, not just any one particular thing. There's multiple ways to deal with it, but you've got to deal with it, that's the biggest thing is, you can't just keep avoiding it. Number nine, legacy plan. Have you got it nailed down? Do you have one? Do you want one? If you don't, the state will probably do it for you, and that may not be the best one for your heirs. And I get this, some people want to leave virtually nothing, and that's fine. Some people want to leave a ton and some want to leave something in the middle. But either way, address it, get a plan put, it's pretty easy to do.   Tony Mauro: It is easy to do. It just takes some time. And a little bit of advice from, well, the planner, possibly an attorney, just to make sure that even if you are willing or want to spend down everything or close to, you've got a plan at least, hopefully if you've got relatives to handle things when you're gone and make it a little easier for them. But if you are planning to leave some things depending on the size of your estate and whatnot, you want to make sure that that is nailed down. You don't want the state deciding that for you. And it could be as simple as just, I've got a good will and I've went over it and I keep it updated. And two more elaborate things like I want to trust for my son until a certain age or whatever the case may be. But I think this should not be overlooked, for sure. Should definitely be discussed with your planner.   Speaker 1: I agree. Number 10, we have multiple things we could go with. I think I'm going to go in the direction of this one, with this podcast, Tony, it's what do you want to do with your time in retirement? Everything else we did was about the X's and the O's. Number 10 on this retirement checklist for the new year could be, if retirement's coming up within the next year or so, have you sat down and really thought about how you want to spend it? If nothing else, many people, you can attest to this because obviously you do this for day in and day out. A lot of folks really struggle with, "Wow, I don't know what to do with myself. I can't party every day." Whether that retirement party is travel or taking the grandkids someplace fun or whatever the case is, you can't do it every day. You can't golf every single... You might for the first year or two.   Tony Mauro: Yeah. I agree. And when we sit people down and just say, "All right, let's just spend 15 minutes deciding what's going to fill up your day, each day and every day?" And I use myself an example, I like to golf. I said, "Even if I golf every day, okay, that's done by 10, 11 o'clock. Take yourself through a day. Now what? Okay, I go maybe do a little exercising. I'm done by one. Now what?" and all the way through. And then you're not going to do all that every day.   Speaker 1: No, exactly not.   Tony Mauro: I do think it makes some sense to try to figure out maybe what kind of purpose you might want to have, maybe it's getting a little part-time job, maybe it's volunteering, spending time with family. I do think you need to come up with a plan, that's something totally unrelated to money for the most part. But it's something to think about that you want to have some structure and some purpose still in life.   Speaker 1: And it adds some fun back into this checklist because some people may look at the checklist and go, "Ah, I don't want to figure out taxes. I don't want..."   Tony Mauro: That's a lot of work.   Speaker 1: Right and it's like, "But this is the point of it. This is the reason the other nine exists, is to help you enjoy number 10."   Tony Mauro: That's right, because by the end, this is the whole reason for all of this work, is to find something fun to do that maybe you've put off or just spend the last days of your life doing. To me, that's what this whole planning is for, because otherwise, you don't really need any of this, assuming you can pay your bills.   Speaker 1: Yeah, exactly. That's our 10 point checklist there. Anything on there that you need some help with or strike your fancy or hits a cord, whatever the case might be, definitely reach out and talk with your financial professional. If you don't have one, of course, Tony is here to help you. You may already be working with him or you may not be, but either way, you can reach out to him for a conversation at yourplanningpros.com. That is yourplanningpros.com. Tony is a COA, a CFP, and an EA with 27 years of experience in the industry, so a great resource for you to tap into. They are Des Moines Professional Alternative at Tax, Dr. Inc. And again, you can find them online at yourplanningpros.com. Don't forget to subscribe to us on Apple, Google, Spotify, all that good stuff. And thanks for hanging out with us here on Plan With the Tax Man. Tony, have yourself a great week. I'll talk to you soon.   Tony Mauro: All right, take care.   Speaker 1: We appreciate your time as always on the podcast, don't forget to hit that subscribe button on Apple, Google, Spotify or whatever platform you like to use, and we'll catch you next time here on Plan With the Tax Man.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.

Saving in your 401(k) can be an easy and painless way to build your retirement savings. But because it's so easy and painless, it can also be easy to ignore for long periods of time, which often leads to mistakes. We'll cover at least the top 5 mistakes people make in their 401(k)s. Important Links Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript Of Today's Show: Speaker 1: Welcome into another edition of Plan With The Tax Man, with Tony Mauro, certified financial planner, CPA and EA at Tax Doctor Inc, serving you here in the Iowa area. Of course, he's got clients all over. Thank you so much for hanging out on the podcast with us. As we're going to about today, the top five 401(k) mistakes that you need to avoid. We've got some good tips here for you to consume this go around on the podcast. Tony, welcome in my friend. How are you?   Tony Mauro: I'm good. How are you?   Speaker 1: Doing pretty good. Looking forward to having this conversation with you. We are into a new year. So amazingly enough. So thought this would be a good way to kind of kick things off because hey, the 401(k), it's a great financial vehicle. I mean it's very easy, it's painless, it's a fantastic tool to help build. And I think that's probably going to be the key word, Tony, help build retirement wealth or retirement savings, I should say. But because it's also so easy and painless, it also is easy to forget about it. That can lead us to mistakes. There's other probably ... there's easier ways, I think, to extract money than a 401(k). They have a few hoops sometimes that make it a little bit more complicated. So we're going to just talk about some of the mistakes to keep on the radar to hopefully avoid when dealing with a 401k. I don't want it to sound like we're bashing the 401k, because again I think it's a great vehicle.   Tony Mauro: It is. It's a great vehicle. It's probably for most, the most important retirement vehicle they're going to have.   Speaker 1: Yeah, yeah, absolutely. So, we don't want to beat it up, but we just want to highlight a few areas to pay attention to. Okay. So that's what we're going to do. So let's just jump right in. The first one is, just don't leave them behind. You often hear things like stray 401(k), just don't leave those behind. Because you give up control by leaving an old 401(k) at an old job.   Tony Mauro: You do. It's ironic because tonight I'm meeting with my sister-in-law, we're talking about this because her husband died a long time ago and so she's been a widow for a while, but she's getting ready to retire. But the company that she left it with is now been taken over by some other company and they're basically saying, get it out of here, or we're going to invest it in this new company's 401(k). And of course she doesn't know anything about the funds or anything. But it's this exact case of she's left it there in the old company for a long time. And the reason why you may not want to do that, I think a lot of times you don't want to do that is because like you were mentioning, if you get into a rollover IRA, you've got much more control, you've got much more options for your particular investments in it. And it's not under that little 10 and 12 funds that the company used to have and fees and everything else. But we see it a lot. I mean, people will ... I call them orphans. They bounce around so much, they get these little balances all over the place and they kind of forget about them.   Speaker 1: Yeah, no, and we do see that. And so you'll have to share the podcast with her after. Be like, "Hey, listen to this." Of course, you're going to talk to her anyway.   Tony Mauro: I don't have to tell her she was on.   Speaker 1: There you go. That's right.   Tony Mauro: I mentioned her.   Speaker 1: But yeah, it's very true. To your point, I mean typically there's not a lot of options in the 401(k). Of course you're no longer there to keep an eye on it. You're no longer putting money into it actively anyway. So it just makes more sense to get rid of that 401(k) and roll that over to an IRA where you do have more control, a bigger smorgasboard of options to go through. So that's the first one. Second one, and '22, we're now into the new year, but 2022 certainly taught us that failing to rebalance often enough could be problematic because '21, you were totally fine with things. Then if you didn't do any rebalancing going into '22, you might have paid for that last year.   Tony Mauro: That's right. And a lot of times people in 401(k)s at these bigger companies, there isn't an advisor in ... sometimes there is, they'll give you a little bit of help. But a lot of times they're not. You're just putting money in from your paychecks, probably not watching very close and all of a sudden, what you used to be invested in, because most people will pick more than one fund. It might be too heavily weighted based on, well number one, maybe your goals. But two is maybe that sector is all of a sudden out of favor and you may need to rebalance. But I suggest to people they should look at it once a year, rebalance one time a year. They kind of look at you look that odd look in their eyes and say, "Well, I don't even know what that is."   Speaker 1: And some of these, they will auto rebalance, right?   Tony Mauro: Yes. Some of them will. They will. If you've got a good one and you check the box, and then I would've recommend that too if they offer it, is to make sure it auto rebalances. Because then you don't have to worry about it while you're there. You still need to take a look and work with your advisor on if it still fits. But the key is, is you're still putting money in, it's just now you got to manage what's in there a little bit.   Speaker 1: Yeah, okay. Yeah, so definitely rebalancing is certainly a good idea, talking with your advisor just about doing that. Here's probably the biggest culprit in the reason why, Tony, which is number three on the list. Which is a target date fund. So it's the easy, low-hanging fruit that most of us wind up checking because we don't know a lot of things. So you go get the job, you've acquired the job, you're all happy, you're filling out the paperwork, it's HR day, they have you go online or whatever to do the 401(k) set up. And I don't know what to pick, say you pick the target date, oh, I'm going to retire in 2040. So I picked the 2040 fund, boom, now I've got me a customized plan. And that's the misnomer, you don't.   Tony Mauro: You really don't, no. And target date funds in them of themselves, I don't think are bad. But I think it's a misnomer to just, like you said, just pick that or have somebody tell you, "Well if you don't know, just pick the target day fund."   Speaker 1: It's better than nothing, but they have issues too.   Tony Mauro: They have issues. Yeah. And to me the biggest issue is I think if you really look inside the target day fund and how they're investing and as you get a little closer to retirement, to me, they get a little too conservative, I think.   Speaker 1: Okay, that's interesting. Yeah.   Tony Mauro: Yeah. I mean I just feel like they kind of do. If that's your investment makeup, then that's great. But if that's not you, then maybe the target fund ... I think it could be part of your 401(k). But I think you should have some other things besides that, for sure.   Speaker 1: Yeah, and typically they do have quite a bit of fees.   Tony Mauro: Yeah. They have fees is another one. You're right. Yeah. I missed the fees.   Speaker 1: They definitely have quite a bit on those ... oh sorry, go ahead.   Tony Mauro: Yeah. No, I was just going to say they do have quite a bit. That's another thing that nobody talks about that when you're going into the target date fund. But something to take a look at, especially if you can find it a lower net cost alternative.   Speaker 1: And it's kind of generalizing again, that customized portion is not really true. You think, well yeah, okay great. Because that's 2040, I'm going to retire in 2040. It's also a general wide smattering of people that are going to retire in 2040 versus just being customized to your specific needs. I find that interesting though that you said about getting conservative, because many will say the other thing with that because as they go down, as you get closer to the target date, they are supposed to get more conservative. I think the misnomer also is that people think that they go way, way down. But most of them don't drop below 50%.   Tony Mauro: No, they don't. They don't.   Speaker 1: So if you're thinking, okay, the risk, I'm at 70 and then I get closer and then it goes to 60 and then 50, 40. Most of them don't drop below 50% from the portfolio stance as far as risk versus safety. So yeah, I mean it's a nice simple idea. Again, we're not going to try to totally bash these. But there could be better options for you to do.   Tony Mauro: Yes, yes. True.   Speaker 1: And I think that's probably the end of the day. So you think about the 401(k), I think a lot of advisors, Tony, would say, "Look, definitely take advantage and get the match." Because that's what you're really after, is that free money. But then anything over and above that, maybe we should talk about something else that we have more control over.   Tony Mauro: Yeah. I know it's going to be one of my little bonus mistakes.   Speaker 1: Oh, okay. Yeah.   Tony Mauro: I guess what I see the most of is ... especially doing taxes, is I see people that they have 401(k)s at their work and they don't participate. I talk to them about it all time, I say, "That's the best deal on the street. You really need to throw some money in." If they start saying, "Well, I really can't afford." I said, "Then you've got a different problem we need to fix." And that's fixable.   Speaker 1: That's a great point. Yeah.   Tony Mauro: You've got to take advantage. But then the second one is they'll say, "Well yeah, I'm doing it." I'm putting in ... they'll just use a percent, "I'm putting in the max, I'm putting in 3%." And I said, "Well, that's not the maximum dollar amount, that's the maximum." I said, "That's for the match." And they said, "Oh yeah, yeah, that's for the match." I said, "And the match is great." But I always tell them, "Did you know you could put so much more in if you want to go past the match?" Because it's still tax deferred or if they're choosing the Roth option, there's all kinds of things. But I tell them, especially if you start doing some math with them, you're a little 3%, let's use a little future value calculator and figure out what that's going to be in 30 years. I show it to them and I say, "Well, is that going to be enough?"   Speaker 1: Or what's 6%? Yeah.   Tony Mauro: Yeah, then they start, "Well what's 6%?" I said, "Forget this percent, let's talk dollars."   Speaker 1: Oh okay.   Tony Mauro: And let's start getting some dollars in there and then we can have some fun with it. Then we just do that for tax clients just to show them. So even if they're not in a planning client, we could say, "You need to go talk to somebody." Or, "Hey, we're here for you, but this is the kind of stuff that we do."   Speaker 1: Yeah, no, those are great extra tips too. So thank you for pointing those out. Because the last two I had were a little bit ... they're not quite as ... well, the one is dramatic, I suppose. But this next one is just kind of not forgetting the fact that ultimately us, as the participant, we're not the client. So the plan administrator or the plan ... their client is your boss, is your employer. Whoever you're working for and getting the 401(k) from, that's really who their client is. So they're making decisions based on that relationship, more so than they are on us as the participant.   Tony Mauro: Well they are. And in most places, unless you have a really good HR, you're not getting the advice and help because the 401(k) itself is not going to help you. They'll defer to your employer, which is their client, like you said. The employer, a lot of times nowadays they don't want any liability either. They're saying, "Well, you need to talk to your financial advisor because we don't want to say anything that could get us into any kind of trouble." Then you're stuck with, well, if I don't have an advisor or-   Speaker 1: What do I do?   Tony Mauro: I just got to go out and do some research.   Speaker 1: And you're [inaudible 00:10:42]-   Tony Mauro: Try to figure this out.   Speaker 1: Yeah, exactly. So just keeping that one in mind. That's a little lesser mistake. But still something that sometimes people overlook. Then of course, we talk a little about fees, I won't beat it up too much. But just assuming that the fees and costs are minimal, especially when we don't see them. That's kind of the little trick too, is that unfortunately ... I mean, first of all, who reads the prospectus on a regular basis anyway? Most people don't. And some of them, they just don't have to disclose.   Tony Mauro: They don't. And yeah, people will ... from the 401(k)s that we have some people in, they'll call and say, "I got this prospectus, what does it say?" I always tell them, "Read it over, read it from cover to cover tonight, let me know." Most of them would rather set themselves on fire probably than to read through that.   Speaker 1: I made it through two paragraphs and they passed out.   Tony Mauro: Yeah, I'm out. But it's buried in there and it's all disclosed. Like you say, most people don't read that. They count on us to tell them that. We don't beat the fees up too much, but we like to let them know, here's what this is and here's how it's taken from you. Because they don't just send you a bill and have you pay it like your utility bill. So that's why it's kind of invisible, but it's still taken out [inaudible 00:11:52]-   Speaker 1: But it's worthwhile to find out how it's impacting your overall strategy. For sure.   Tony Mauro: It is. For sure.   Speaker 1: And finding out whether there's better options, if there are better things to do. That's really where it kind of comes back to the conversation and especially some of those extra ones that Tony just shared is finding out what's the best way to do. Definitely getting the free money is paramount, you need to do that. But then over and above that, have a conversation. Maybe it's worth doing six or 10% to Tony's point. Or maybe it's worth doing an IRA, getting the match and adding some money over there or a Roth. So just lots of ways to think about it when it comes to just 401(k), some little mistakes that can help us save some money. Okay. Anything else? Did we miss anything or are we good? I think we get it.   Tony Mauro: Well, we could talk about this topic for a long time, but those are the major ones. I think with everybody's New Year, New Year's resolutions, I'd say to everybody, one of them, make sure you take a look at your plan, make it a part of your life to say, this year I'm going to review the plan or I'm going to get a plan.   Speaker 1: There you go.   Tony Mauro: And get something started. Because you're doing it with everything else. The first part of the year, everybody does it. But at the end of the day, unfortunately, especially when we're talking about 401(k)s, nobody's going to do it for you now. The days defined benefit plans are gone for the most part, and it's all up to us.   Speaker 1: It is so easy to set it and forget it, as I kind of led off with. Instead of doing a resolution, make it a goal, folks. Because resolutions get thrown out the window pretty easy. So my goal is to get my finances straight, my goal is to shore up my 401(k) mistakes, whatever that might look like. Put that on your calendar for the beginning of this year. And that'll do it for the podcast. So thanks for hanging out with us. We certainly appreciate it. Hopefully you found this useful. And of course, if you need some help, reach out to Tony and his team at yourplanningpros.com. That's yourplanningpros.com. Again, Tony is a CPA, CFP, and an EA of 27 plus years helping folks get to and through retirement. Des Moines Professional Alternative at Tax Doctor inc is where you can find him. And of course, that's online at yourplanningpros.com. Don't forget to subscribe on Apple, Google, and Spotify, all that good jazz. You can find us on all those major platforms. Tony, thanks for hanging out and shedding some light on this topic with us.   Tony Mauro: All right, thank you. We'll see you next time.   Speaker 1: Yep. We'll catch you next time right here on Plan with the Tax Man with Tony Mauro.   Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.