RetireWire Retirement Podcast

Your 401(k) at work is one of the best ways—if not THE SINGLE best way—to save for retirement! The 401(k) makes it easy, quick, relatively painless, and forces you to “dollar cost average” into your investments over time. Your 401(k) may also provide employer matching contributions and lower costs than you’d be able to get on your own due to economies of scale!But, for all of their glory, the 401(k) can be difficult to navigate. There are rules and potential penalties. There are limits and restrictions on investments. Most importantly, most 401(k) plans today have the Roth or pre-tax option, making things even MORE confusing!This short video explains the differences between the Roth 401(k) and the pre-tax 401(k) and will guide you towards which one is best for you and your retirement planning needs.

In this episode, I dispel the general misconceptions about financial planning and explain all of the money challenges a real financial plan will help you solve. Real financial and retirement planning covers taxes, estate, insurance, debt and credit, investing, income planning, and more! But the Wall Street marketing machine has trained you to think financial planning is investment-focused. Unfortunately, for most "financial advisors", financial planning is just a watered-down pretty software proposal designed to encourage you to buy an insurance or investment product. Real comprehensive financial planning is all about solving problems, not selling products.

The pre-retirement checklist is something every nearly retired person should go through. There are tons of them out there, but my pre-retirement checklist breaks concepts down into three simple things - Learning About, Planning, and Trying Retirement. Learning - There are so many things we've learned over our lifetimes and retirement typically isn't one of them. You need to use the resources available and familiarize yourself with retirement concepts, dates, deadlines, expenses, and more!Planning - Retirement planning is the most important part of the process. Unfortunately, this really requires some sophisticated software and someone who knows not only how to use it, but your retirement finances as well.Trying - You should take a trial run at retirement. See how you like it! Use your vacation pay, stop putting money into your retirement plans at work, spend some quiet time on the couch AND some fun time on the golf course. Get a handle for how retirement will be for you.Download my FREE Retirement Mastery Toolkit for more information.

The rest of the country and most of the rest of the world will be fine as we exit the Coronavirus catastrophe, but Las Vegas? Not so much. It's going to take Las Vegas a tremendous amount of time and ingenuity to come back from COVID-19.

In this quick breakdown of my recent webinar on finding a financial advisor you can trust I discuss the 5 steps you need to be highly attentive to in order to find the best financial advisor for your situation. Before the 5 steps, however, I discuss how you really should raise the bar on what you expect from a financial advisor to make sure you get the best one for your unique situation.

In this episode I discuss 7 ways to make money during stressful financial times like the Coronavirus epidemic has caused. Most importantly, I explain these topics to help prepare you for the next stock market meltdown.

Mark MaurerWhat You Need to Know About Late in Life Healthcare Expenses One out of three men will end up in a nursing home, and two out of three women will require long-term care.  So many people purchase health and life insurance, but why do more not prepare financially for the extended care they’ll need in their final years?  Mark Maurer, President and CEO of LLiS, joins the Wealth Summit to discuss how you can reduce the financial burden of long-term care. KEY POINTS-What is long-term care insurance?-How much does long-term care insurance cost?-Who should consider buying long-term care insurance? While health insurance doesn’t prevent you from getting sick, it does provide a funding mechanism to pay for the things designed to treat you and expedite your recovery.  Long-term care insurance acts in much the same way.  While medical insurance is designed to cover things that will get you better, long-term care pertains to a chronic illness—something that probably isn’t going to go away.  As Social Security begins to dry up, paying less and less to retirees, we’re seeing more multigenerational households.  However, eventually most elders reach the point of needing expert care beyond what relatives can provide.  Contrary to popular belief, Medicare only covers 100 days of long-term care.  Once that time period expires, Medicaid will be able to cover some expenses, but you most likely won’t be able to choose the specific facility.  Mark presents a chart at the 10:30 mark in the video detailing the varying expenses associated with long-term care.  A long-term care insurance policy typically covers $3,000 per month, and it can be used for differing levels of care.  Where that care is given depends on the significance of the condition.  As previously mentioned, 2/3 of women will require long-term care, along with 1/3 of men.  Insurance companies have recognized that women have a longer life expectancy so they’ve boosted the rates for female premiums.  Long-term care policies are not inexpensive.  Mark recommends people who own a house and have less than a half a million in assets steer clear of long-term care policies.  The premiums could wipe out your assets, drastically changing the retirement lifestyle you’ve been planning for years.  A good time to start considering the policy is in your mid-50s.  While perhaps not as popular as health insurance or life insurance, long-term care insurance can prove to be just as valuable.  Like most financial decisions, the choice to get a policy depends on your individual situation—health, financial status, location, family factors, etc.  While the premiums can be costly, if you have a large enough portfolio of relatively liquid assets, a long-term care insurance policy could ease stress and provide comfort down the road for both you and your loved ones.

Dan Solin Video “6 Critical Investing Mistakes To Avoid At All Costs” Dan Solin is a New York Times best-selling author who specializes in helping investors avoid victimization by the securities industry.  A regular blogger for the Huffington Post, Dan empowers investors with information that helps them reach their retirement goals the right way.  In “6 Critical Investing Mistakes To Avoid At All Costs”, Dan and Greg discuss the following main points: -a “frenemy” is someone who poses as a trusted friend or ally, yet prioritize their own interests over your well-being-there are 6 “frenemies” in the financial industry we must be wary of-always lean towards passively managed mutual funds The financial industry—particularly the securities sector (think stocks, bonds, mutual funds, etc.)—is rife with advisors, brokers, and “experts” who use deception and a false sense of trust to mislead people in what is known as a wealth transfer scheme.  The economic interest of these crooks is often in direct conflict with yours.  MARKET-BEATING BROKERSDan defines a “market-beating broker” as someone who claims that they can pick the right stocks that will perform better than other stocks.  Because of his “expert prowess” at beating the market, he requires hefty commissions and fees, which he assures will be more than offset by the returns his algorithms, formulas, and strategies will produce.  An overwhelming amount of data shows that no one has the expertise to reliably and sensibly beat the market on a consistent basis. ACTIVE FUND MANAGEMENTMutual funds are managed one of two ways—actively or passively.  Passive funds such as index funds track a given index and have minimal human interference.  For example, the S&P 500 Fund tracks the S&P 500.  Fees and risk are typically very low.  Active fund managers, on the other hand, say that out of those 500 stocks, they can pick the 10 or 20 stocks that will outperform the others.  ALTERNATIVE INVESTMENTSHedge funds, private equity funds, master partnerships, and reinsurance funds are all examples of alternative investments, most of which are no better than actively managed funds.  Their draw is often their aura of exclusivity.  MONEY MEDIAMost financial media does a disservice to investors.  The media companies generate revenue by attracting viewers; therefore, they cater to those companies that pay their revenues—large brokerage firms, investment banks, and fund families.  The “gurus” who appear frequently on these shows usually work for one of the many companies in the securities industry trying to profit off of your money.  Therefore, these experts often try to steer viewers towards a product or sector that will make their company the most money—practically the definition of “conflict of interest.”  Dan strongly recommends you turn off CNBC, avoid the ticker tape, and stick with your globally diversified portfolio for the long term.  DIVIDEND STOCKSMany people think that dividend stocks offer an attractive additional stream of income and means of diversification.  However, in reality dividend stocks reduce diversification.  Furthermore, dividends are by no means guaranteed, as we saw with General Motors in 2008 when the auto manufacturer reduced dividend amounts during a company crisis.  INVESTMENT CLUBSWhile the number of investment clubs has decreased in the past few years, they are still a popular means of investing for many people.  An investment club typically consists of a group of like-minded individuals who get together and chat about stocks, collectively picking stocks that are likely to outperform the benchmarks.

I break down DFA mutual funds—specifically the US core equity strategies—which are tilted towards small cap investing and value investing in this webinar. If you've followed the stock market recently you've likely noticed that small cap investing and value investing has been out of favor. That being said the overall long term performance of the DFA mutual funds core equity 1 and 2 is very much on par with the Russell 3000. This is shocking considering the headwinds small cap investing and value investing have faced. I also explain the tilting concept and small cap investing long term premiums and value investing long term premiums. But these premiums don't always appear on a year to year basis! For that reason it's important to stay the course even against the headwinds we've faced.

Traditional IRA or Roth IRA? 401k or Roth 401k? With so many taxable retirement accounts out there, how do you know which one is best for you? Johanna Fox-Turner, a fee-only financial advisor with 35 years of experience, joins the Wealth Summit to tell us how valuable a Roth IRA can be to our retirement portfolio. KEY POINTS-Traditional vs. Roth IRA-How can I fund my Roth?-How to set up a Roth Depending on your income level, you might have the opportunity to deduct a traditional IRA on your tax form. However, the money does not grow tax-free, meaning when you take the money out all of the growth and income is taxable. A Roth IRA, on the other hand, grows tax-free throughout the entire lifespan of the account. Unlike the traditional IRA, you don’t get a deduction for contributing money to the account. Choose an account by deciding whether you want the tax break up front or later on in life. Many people say you should only fund a Roth if you’re in a low income tax bracket, but Johanna believes the extra bucket of tax-free income later in life is valuable to everyone. She also recommends placing more aggressive securities in the Roth account in order to take advantage of the higher returns over time. As retirees get older, they often get less interested in taking money out of their retirement accounts, electing instead to pass certain accounts on to the next generation. However, in a traditional IRA, you’re forced to take Required Minimum Distributions (RMDs) at the age of 70 1/2, which include tax payments. Roth IRAs, in contrast, do not have RMDs, allowing the money to be passed on to your heirs. While the maximum individual contribution to a Roth is $5,500, you have the option to convert your traditional IRA into a Roth, which has no amount limitations. It is best to do these conversions in either a low income year or a bear market. The down economy will allow you to convert the money at bargain prices. Johanna suggests setting a Roth IRA up through a financial advisor, but it is pretty easy to set up on your own as well through an online custodian or broker. E-Trade, Fidelity, and Schwab all have solid funds, but ultimately Johanna advises picking the account with the lowest fees. Anyone can benefit from a Roth IRA, regardless of the tax bracket. If you want to contribute more than the limits allow, consider a conversion, which will also enable you to escape RMDs. Finally, start early. The more time your account has to take advantage of compound interest the more money you’ll have at your disposal during retirement.  

Looking for a financial advisor? Watch this FIRST! Here's how to find a financial advisor you can trust . . . a FIDUCIARY financial advisor who will put your best interests first and foremost. You can find the full blog and links to downloads at RetireWire.com - just type in "how to find a financial advisor you can trust" in the search box. Finding a financial advisor is easy, learning how to find a financial advisor you can trust is not easy. In this webinar, I break down the 5 steps to finding a financial advisor you can trust. 1. Find a fiduciary financial advisor. A fiduciary standard of care is the gold standard. A suitability standard is a very low bar to cross. 2. Learn how are financial advisors paid. There are commission financial advisors and fee-only financial advisors. Fee-based financial advisors take fees AND commissions. 3. Expect the right credentials such as the CERTIFIED FINANCIAL PLANNER designation or the Personal Financial Specialist designation. Additionally, make sure you're working with a financial advisor that specializes in what you need for example college planning, or divorce planning. 4. Use resources like the National Association of Personal Financial Advisors or the Garrett Planning Network to search for qualified financial advisors. 5. Interview them! I list some financial advisor interview questions and link some great financial advisor questionnaires for you to take to the interview.

So just what is a reverse mortgage and how does a reverse mortgage work? Well, more technically referred to as a home equity conversion mortgage, Don Graves discusses what they are and how they work. The term “reverse mortgage” has been known to make retirees cringe at its mention, yet Don Graves, president and founder of HECM Institute for Housing Wealth Studies, says a reverse mortgage can serve as a valuable additional stream of income during the decumulation phase of life. If there were a proven resource that allowed you to increase cash flow, reduce your risk, preserve your assets, enhance your liquidity, and even add retirement dollars back into your savings account, wouldn’t you be interested? Don joins the Wealth Summit to show you how to utilize the reverse mortgage to accomplish these retirement objectives. KEY POINTS-What is a reverse mortgage?-How does a reverse mortgage work?-Home equity conversion mortgage synonym-Who can qualify? -How much money can you get?-How do you get the money? Widely known as a home equity conversion mortgage (HECM), a reverse mortgage is a federally insured home equity loan that allows those age 62 years or older to convert a portion of their mortgage to tax-free money. As the life expectancy of humans continues to increase, the initial 3 buckets of money—social security or pension income, investments, and insurances— aren’t lasting long enough to sustain the retired lifestyle many want and planned for. The reverse mortgage adds an extra asset retirees can draw money from to supplement their other 3 streams of wealth. To qualify for an HECM or reverse mortgage, you must be at least 62 years old and the house must be your primary residence. Additionally, you must take a financial assessment test to make sure you have good credit and enough money left over at the end of the month to cover property-related expenses. Once you get the loan, you must maintain the upkeep of the house, hazard insurance, and pay property-related taxes. The amount you receive depends on a triangle of factors: the age of the youngest borrower, the value of the property, and the interest rate. A typical 62 year old is eligible for about 50% of the value of the home, up to a home value of $636,150. This low interest rate environment we’re experiencing currently gives you more money with less interest, as opposed to a high interest rate environment which means more interest and less money. So if you’re considering taking the reverse mortgage route, now is the time. It’s important to receive the money in the manner that suits your situation the best. It can be distributed in a lump sum or through a line of credit. You can also get monthly tenure payments, which lend a certain amount of money every month as long as you live in the house, or you can elect to receive monthly term payments, which distribute a certain amount of money for a select period of time. Finally, you can choose a combination of the two monthly payment options. Unlike many common misconceptions, a reverse mortgage doesn’t mean you lose your home. The government doesn’t want your house—just repayment of the loaned money when the house is sold. The proceeds offered by the HECM’s line of credit give you an additional stream of money that will help you enjoy retirement the way you always planned.

From the Wealth Summit—September 2017—an interview with Dana Anspach regarding asset-liability matching for retirement income planning.Dana is an expert in asset-liability matching as a retirement income strategy. See more and a full transcript on www.RetireWire.comDana AnspachAsset-Liability Matching for Retirement Income PlanningIn an ideal world, we would all experience incredibly high investment returns while experiencing zero volatility and risk. However, the markets obviously do not operate in such a way, which is why Dana Anspach, CEO, and Founder of Sensible Money, LLC, joins the Wealth Summit to discuss an asset-liability matching strategy that can help prepare you for retirement.Key Points-The Perfect Investment-Accumulation vs. Decumulation-Asset-Liability Matching Compared to Other Retirement Income Planning Strategies-Other Retirement Income Strategies That May Make Sense-Time Segmentation ApproachThe perfect investment would accomplish the desired level of safety, income, and growth in a portfolio simultaneously, without having to sacrifice a portion of any category. This simply is not possible.The sooner you realize this, the better off you’ll be in retirement. However, Dana will discuss a few sufficient alternatives.The accumulation phase of your career follows the efficient frontier, which is the basis for how portfolios are structured. This frontier measures risk versus return.The more stocks you add to the portfolio, the more you increase your potential for both return and volatility. The typical portfolio will be structured to maximize growth while minimizing risk.One of the most important aspects of the decumulation phase is sequence risk, which depends on the time you withdraw your money from your portfolio. Dana’s graph stresses the importance of withdrawing money during an upturn in the market as opposed to during a downturn.How does asset-liability matching compare to other retirement strategies? The “total return” approach works well in bull markets but can be scary in down markets. This plan uses your typical 60/40 allocation model.The “income only” strategy focuses on high-yield dividend-paying hybrid investments. You only spend the divided. This plan experiences even more volatility during recessions than the “total return” strategy.The “guaranteed income” approach is for those who need as much income as possible and typically consists of buying annuities.Finally, the “asset-liability matching” approach matches investments to the point in time you’re going to need to use them.Dana describes the time segmentation of asset-liability matching as laying down a railroad track as you drive down it. Five percent should be kept in cash, while thirty-five percent is put into fixed-income bonds. This fixed income should be divided into chunks and staggered out to be paid overtime.The final sixty percent is in equities. As your equity portion experiences growth, the overflow of the equity bucket will pour into the fixed income bucket, adding an additional year or chunk of fixed income.“What got you here, won’t get you there.” Retirement requires a different portfolio situation. While you can’t control the outcome, you can manage the risks. The ideal time to start exploring this asset-liability matching strategy is 10 years prior to retirement.

If you’re planning for retirement right now, chances are you’ve never actually been through it. In fact, most financial advisors have never even experienced retirement. In this interview, you will learn how to prepare for retirement both mentally and financially.Benjamin Brandt, Founder and President of Capital City Wealth Management, teaches people how to retire. During his time as a fee-only financial planner, he’s observed that many people are disillusioned with how they will spend their time in retirement.In this video, Greg and Benjamin discuss the importance of having awareness about what retirement will look like and then having something to retire to.KEY TOPICS -What is a Retirement Rehearsal? -What is a Practice Retirement? -What is your Retirement Calling?WHY CONSIDER A RETIREMENT REHEARSAL?There is an intangibility about what retirement might look like. Many people think retirement is trips to Disney World with the grandkids, traveling around in an RV, and rounds of golf everyday, when in reality many retirees struggle to fill the 40 hour void left by the absence of a full-time job. Statistics show 52.4 billion dollars of unused vacation time is squandered every year—a 40 year high. While a few employers gift retirees vacation pay as they leave the workforce, it typically amounts to less than a fifth of the vacation pay that was actually earned. Wouldn’t it be helpful if we took advantage of this resource and used it to help us plan for retirement ahead of time? WHAT IS A RETIREMENT REHEARSAL? The first step is to make sure you have a written financial plan. The retirement rehearsal is useless if you can’t go back to a written plan and make the necessary adjustments. The retirement rehearsal is meant to give us a little dose of reality. Typically 2-5 years before retirement, Benjamin encourages his clients to use a few weeks of that valuable yet often underused vacation time to see what life after the 9-5 grind looks like. He encourages clients to stay at home and do absolutely nothing. You’ll see how your expenses during that time coincide with the amount your written financial plan has allotted. Boredom is the number one enemy of retirement, usually inciting an unplanned vacation or unnecessarily large purchase. Such an impulse move can drastically throw off your retirement plan. As Benjamin puts it, “you’re stealing from your 70, 80, and 90-year-old self.” Consider a retirement rehearsal so that you’ll head into retirement with a disciplined, prepared mindset about what the final phase of life looks like. WHAT IS A PRACTICE RETIREMENT? Many people conduct a retirement rehearsal and realize they’re not quite ready to fully retire yet. A “Practice Retirement” is phasing yourself out of your career in increments. A combination of retirement and career, either max out your vacation days or drop down to part-time work. You’ll begin to live like you’re retired, while still making contributions to your retirement accounts and allowing your portfolio to grow. WHAT IS YOUR RETIREMENT CALLING? Benjamin encourages his clients to create a lifestyle they do not want to retire from. If you have not already, figure out what you’re truly passionate about and begin to transition from your career to your calling. Often this is an excellent way to add an additional stream of income. Even though it might be minimal, it can do wonders to the size and longevity of your portfolio. If you’re passionate about playing guitar, consider teaching guitar lessons at a local music store. If you enjoy playing golf, consider giving lessons at the country club. Even if it’s just a few thousand dollars a year, when you take the phenomena of compound interest into account, this additional stream of income from pursuing your passion can either allow you to retire a little sooner or perhaps live a more opulent lifestyle throughout the next phase of your life. Retirement is full of unknowns, so do what you can in advance to prepare. A “Retirement Rehearsal” might be a good way to get a taste of what life will be like once you no longer work full-time. Once you conduct a retirement rehearsal, consider a “Practice Retirement” to help you phase into that next chapter of life. Finally, consider using your passions to create additional streams of income that will then add even more substance to your portfolio.

This episode of the RetireWire podcast is an interview with David Armes from Dover Healthcare Planning in Southern California. David was a Medicare counselor for several years before starting his own Medicare planning firm. He shares common pitfalls and mistakes retirees make when selecting and managing their Medicare plans and healthcare costs overall in retirement.

Ever wondered what is a structured note? How do structured notes work? In this episode of the RetireWire Podcast, I cover those to topics and share structured note examples from companies like Goldman Sachs, Barclays, and JP Morgan. Structured notes are a hybrid investment vehicle. They can have characteristics of bonds, stocks, or both! Most are tied to some equity index or basket of securities, and they all use derivative securities paired with a zero-coupon bond to accomplish a certain set of “bells and whistles”. Different types of structured notes can have call features, leverage, downside buffers, and even FDIC insurance on your principal. There’s virtually no limit to the types of structured notes you will find. Since structured notes are such a different and complex investment vehicle, I listed the 13 most important things to know in this webinar which I turned into a podcast. Most importantly, I spend a good deal of time on the pros and cons, risks and benefits of structured notes. Following that I discuss some good rules of thumb if you’re going to add structured notes to your retirement plan and portfolio. For my full webinar with accompanying slides, please visit www.retirewire.com and type “structured notes” in the search bar at the top. Enjoy!