SML Planning Minute

Nine Mistakes Wealthy People Make Episode 359 – A few weeks ago we took an in-depth look at some of the things wealthy people understand that the rest of us tend to miss. Today, we'll take a look at the opposite: some financial mistakes that even wealthy people tend to make, and how we can help avoid them. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 359 Hello, this is Bill Rainaldi, with another edition of Security Mutual's SML Planning Minute. In today's episode: nine mistakes wealthy people make. A few weeks ago, we took an in-depth look at some of the things affluent people understand that the rest of us seem to miss. But even successful, well-educated people do some dumb things. Today, we'll cover the exact opposite of what we did before: some financial mistakes that even wealthy people tend to make. Here are nine of them: Putting too much money into a single investment. Diversification is one of the cardinal rules of investing, but many wealthy people tend to break it. And it's understandable why. So many of the ultra-rich became that way by starting, or investing in, just one or a handful of companies. Elon Musk and Jeff Bezos are great examples of this. At some point, putting too much money into a single investment just creates unnecessary risk. Some employees at companies like Enron and Lehman Brothers put all their retirement savings in their company stock. It worked spectacularly—for a while—but it eventually became almost worthless in a very short time. [1] Very few investors enjoy the measure of success that Musk and Bezos experienced. They can be underinsured. It doesn't really matter how wealthy you are, people make mistakes with their insurance across the board. If you don't have enough homeowner's insurance, it could end up costing you millions if you live in a valuable home.[2] And if you're concerned about your children and grandchildren, life insurance can be an important and efficient way to transfer your wealth to future generations. They have too much personal real estate. Some wealthy people tend to have too many expensive homes in remote places that they rarely visit. And they can be a significant cash drain. If you don't use the place frequently, it may not be worth holding onto it. If you want to vacation in some unusual places, sometimes it may be better to rent.[3] Or if you insist on keeping the place, maybe you should consider renting it out when you're not using it. Trying to keep up with their peers. It's human nature, and the wealthy aren't exempt from keeping up with the Joneses. When we see our friends living it up, it tends to make us want to do the same. And if we're not careful, it could mean significantly less savings and too much debt.[4] Lack of liquidity. Private equity is all the rage these days, but there's a downside. Some people tend to be too optimistic when they buy into illiquid assets. The fact is that for a variety of reasons, most of them don't work out, even if it seems like a great idea. And if it doesn't work out, it can be a drag on your finances for years.[5] Fear of missing out, or “FOMO.” It seems that no one is exempt from this. Believe it or not, a recent study suggested that the wealthy are actually among the worst offenders.[6] Rich people may think they know better than the average investor. But they can be just as susceptible to media hype and/or greed. It pays to keep a long-term perspective and remember the fundamentals. Neglecting estate planning. What do Howard Hughes, Prince, Sonny Bono and Pablo Picasso have in common? They all died with a lot of money but without a will.[7] It seems that the wealthy should all have done at least some rudimentary estate planning. But that's not always the case.Whether you have a lot of money or not, you probably want to make sure it goes to the people or charitable organizations you care the most about. But if you don't have an estate plan, you give up your right to decide these things. And it's not just a will. It can be a succession plan for your business or an advance medical directive.[8] Lifestyle creep. There is a tendency among the wealthy: the more you make, the more you end up spending on things like travel, fancy meals and transportation. There are so many examples of people—such as Michael Jackson or Lindsay Lohan—who overdid it and paid the price later on. The truth is that it's easy to increase your lifestyle, but once you're there, it's much harder to bring it back down. If you're not careful, spending habits can become unsustainable for just about anybody.[9] Not understanding that wealth is about more than money. Newsflash: some of the richest people in the world are terribly unhappy. In the words of author Riley Clendenin, “True financial success isn't just about accumulating wealth—it's about using money as a tool to build a meaningful, balanced life. The smartest investors understand that their financial portfolio is only one part of their overall wealth, and they invest just as much in their health, personal growth, and happiness as they do in their bank accounts.”[10] The ultra-wealthy certainly have the benefit of a bigger cushion when they make a financial error. And they all make mistakes, some big, some little. But the rest of us can also learn something from the errors that wealthy people tend to make, and how to avoid them. [1] Clendenin, Riley. “Millionaire Blunders—13 Costly Mistakes Even Wealthy Investors Make.” Msn.com. https://www.msn.com/en-us/money/investment/millionaire-blunders-13-costly-mistakes-even-wealthy-investors-make/ss-AA1BaDTO#image=3 (accessed October 22, 2025). [2] Maranjian, Selena. “7 Financial and Retirement Mistakes Even the Wealthy Make.” fool.com. https://www.fool.com/retirement/2024/04/28/7-financial-mistakes-even-the-wealthy-make/ (accessed October 22, 2025). [3] Sergeant, Jacqueline. “The Mistakes Rich People Make–And How To Avoid Them.” www.fa-mag.com. https://www.fa-mag.com/news/how-to-avoid-these-common-mistakes-of-the-wealthy-83682.html (accessed October 22, 2025). [4] Maranjian, Selena. “7 Financial and Retirement Mistakes Even the Wealthy Make.” fool.com. https://www.fool.com/retirement/2024/04/28/7-financial-mistakes-even-the-wealthy-make/ (accessed October 22, 2025). [5] Sergeant, Jacqueline. “The Mistakes Rich People Make–And How To Avoid Them.” fa-mag.com. https://www.fa-mag.com/news/how-to-avoid-these-common-mistakes-of-the-wealthy-83682.html (accessed October 22, 2025). [6] Clendenin, Riley. “Millionaire Blunders—13 Costly Mistakes Even Wealthy Investors Make.” Msn.com. https://www.msn.com/en-us/money/investment/millionaire-blunders-13-costly-mistakes-even-wealthy-investors-make/ss-AA1BaDTO#image=3 (accessed October 22, 2025). [7] Phillips Erb, Kelly. “17 Famous People Who Died Without A Will.” Forbes.com. https://www.forbes.com/sites/kellyphillipserb/2016/04/27/17-famous-people-who-died-without-a-will/ accessed October 22, 2025). [8] Maranjian, Selena. “7 Financial and Retirement Mistakes Even the Wealthy Make.” fool.com. https://www.fool.com/retirement/2024/04/28/7-financial-mistakes-even-the-wealthy-make/ (accessed October 22, 2025). [9] Sergeant, Jacqueline. “The Mistakes Rich People Make–And How To Avoid Them.” fa-mag.com. https://www.fa-mag.com/news/how-to-avoid-these-common-mistakes-of-the-wealthy-83682.html (accessed October 22, 2025). [10] Clendenin, Riley. “Millionaire Blunders—13 Costly Mistakes Even Wealthy Investors Make.” Msn.com. https://www.msn.com/en-us/money/investment/millionaire-blunders-13-costly-mistakes-even-wealthy-investors-make/ss-AA1BaDTO#image=3 (accessed October 22, 2025). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual's legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you've enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we'll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person's needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraBlubrryby EmailTuneInDeezerRSSMore Subscribe Options

Should I Use My Savings to Delay Collecting Social Security? Episode 358 – Deciding when to collect Social Security is one of the most important financial decisions you'll ever make. Make a mistake there and you'll pay for it—every month for the rest of your life. But what if you want to retire early? That doesn't mean you also need to collect early. A “bridge” strategy can be an important tool to get you through those years between giving up your job and collecting Social Security. It could make you much better off in the long run. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 358 Hello, this is Bill Rainaldi, with another edition of Security Mutual's SML Planning Minute. In today's episode, should I use an annuity or my savings to delay collecting Social Security? So, you're getting near that age. You want to retire when you reach age 65 and become eligible for Medicare, and you're almost there. How are you going to finance it? There's no doubt you're going to miss having a steady paycheck. Should you file early for your Social Security benefit? That will replace at least some of your lost paycheck. You'll need to start by taking a look at some numbers. Let's say that, according to your statement from the Social Security Administration, your “Primary Insurance Amount,” or the benefit you would get at Full Retirement Age, which is age 67, is $3,000 per month. But if you collect at 65, you're starting two years early. Your benefit would be permanently reduced to $2,550 before annual cost of living adjustments.[1] It’s the permanent part that causes concern. If you live to age 85, you're giving up $450 per month for the 18 years between 67 and 85. On the other hand, if you were to wait until age 70 to collect, you would get $3,720 per month. You'd have to forego the five years of benefits, but your retirement from age 70 on is likely to be a bit more comfortable. And “longevity risk”—in other words, the possibility of outliving your money—is one of the biggest issues people face in retirement. Waiting until 70 helps minimize it. So, which option is better? It would be an easy choice if you knew exactly how long you're going to live. But of course, none of us do. If you end up dying at age 71, you would have been better off collecting early. If you end up living well into your eighties, you'll have more money overall if you choose to wait. And then there's the issue of the Social Security Trust Funds. They're running out of money, and expected to go bankrupt in the year 2034. But that doesn't mean your payment will disappear. If nothing is done between now and then, all payments will be reduced by approximately 19 percent. [2] This has caused some people to collect early.[3] But there is a reasonable chance that the people in Washington will “fix” Social Security before any payments are reduced.[4] That's what they've always done in past.[5] No guarantees, of course, but it seems highly unlikely politicians will allow benefits to be dramatically reduced. So, getting back to our original issue, what if you've got a good life expectancy? It would probably be best to wait until age 70 to collect, but you're planning on retiring at age 65. How are you going to get by for those five years in between, when you no longer have a paycheck, but haven't started collecting your Social Security? This is where you may want to look at some sort of “bridge” strategy. Mitigating longevity risk is a good reason to implement a bridge strategy, but there's more. According to a recent study, if you have the money to implement a bridge strategy, you can also meaningfully raise your standard of living without increasing your chance of running out of money in retirement.[6] The increased monthly Social Security benefit helps provide a dependable stream of income for the recipient which can allow for greater flexibility with remaining savings and investments. There are several possibilities when it comes to getting through that gap. If you're worried about no longer having a steady paycheck, one popular option is to purchase an annuity to provide you with the income you need to get you from 65 to 70. It can certainly help alleviate your anxiety. A single-premium immediate annuity is something that tends to work well with a Social Security bridge strategy.[7] But you need to shop around. And for the purposes of bridging the gap, you can get an annuity with a specific term. A five-year annuity would work well with the example we are using here. The other main bridging alternative is to use some of your accumulated savings. In a recent study, actuary and retirement specialist Ken Steiner concluded that using accumulated savings for Social Security bridge strategies can work well if: You expect to live longer You have enough assets that you can fund your bridge payments relatively easily You want to bolster what he calls your “floor portfolios,” that is, your less risky investments, and… You have other assets which can be invested in more risky places.[8] In the end, the financial decisions you make in your 60's are likely to have a huge impact on the rest of your life and deciding when to collect Social Security is one of the most important of those decisions. Make a mistake there and you'll pay for it every month for the rest of your life. Like so many other things, deciding when to collect Social Security can be complicated. It's best to have a skilled and trusted professional by your side to help you avoid any pitfalls. Your Security Mutual Life insurance agent can help. Your Security Mutual Life insurance agent will assemble your team and coordinate with your attorney and tax professional to review your situation and to determine the insurance plan that will best suit your needs and objectives. [1] Social Security Administration. “Early or Late Retirement?” SSA.gov. https://www.ssa.gov/oact/quickcalc/early_late.html (accessed October 9, 2025). [2] Social Security Administration. “Social Security Board of Trustees: Projection for Combined Trust Funds One Year Sooner than Last Year.” SSA.gov. https://blog.ssa.gov/social-security-board-of-trustees-projection-for-combined-trust-funds-one-year-sooner-than-last-year/ (accessed October 9, 2025). [3] Steiner, Ken. “Should Your Clients Use Savings to Defer Social Security?” Advisorperspectives.com. https://www.advisorperspectives.com/articles/2025/08/19/should-clients-use-savings-defer-social-security? (accessed October 8, 2025). [4] Horsley, Scott. “Social Security benefits face big cuts in 2033, unless Congress acts.” NPR.org. https://www.npr.org/2025/06/18/nx-s1-5436828/social-security-benefits-cut-congress (accessed October 9, 2025). [5] Social Security Administration. “SUMMARY of P.L. 98-21, (H.R. 1900) Social Security Amendments of 1983-Signed on April 20, 1983.” SSA.gov. https://www.ssa.gov/history/1983amend.html (accessed October 9, 2025). [6] Manganaro, John. “This Social Security Strategy Gives Retirees More to Spend.” ThinkAdvisor.com. https://www.thinkadvisor.com/2025/09/03/this-social-security-claiming-strategy-reliably-lifts-retirement-income/ (accessed October 8, 2025). [7] Christian, Rachel. “How an annuity can help you delay Social Security and retire early.” Bankrate.com. https://www.bankrate.com/retirement/bridging-the-gap-to-social-security-with-an-annuity/ (accessed October 8, 2025). [8] Steiner, Ken. “Should Your Clients Use Savings to Defer Social Security?” Advisorperspectives.com. https://www.advisorperspectives.com/articles/2025/08/19/should-clients-use-savings-defer-social-security? (accessed October 8, 2025). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual's legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you've enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we'll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person's needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraBlubrryby EmailTuneInDeezerRSSMore Subscribe Options

Episode 357 - Do the ultra-wealthy belong to some secret club that no one else knows about? Of course not. But it's safe to say that they do some things differently. And the rest of us could learn a few lessons from what they've figured out.

Episode 356 - 529 plans are certainly popular these days, and with good reason: high contribution limits and potentially tax-free growth. But they're not for everyone. Here are four other potential alternatives for funding a college education.

Episode 355 - Business owners selling a business are often worried about capital gains tax. There are several strategies that may help to minimize or avoid capital gains.

Episode 354 - Finding the right life insurance policy can be complicated, and it's easy to get confused. Here are ten common mistakes we see people making when they purchase life insurance.

Episode 353 - People might think that health care is cheaper once you're covered by Medicare. Maybe, but the cost of health care in retirement is higher than many people think. A recent study by Fidelity gives us some real numbers.

Episode 352 - Is it possible to save too much for retirement? Some have argued that the answer is yes, but with caveats.

Episode 351 - People make financial mistakes all the time, in good times and bad. What are some of the things that people get wrong when things are going well? In a recent article from ThinkAdvisor, author Bryce Sanders outlined what he believes are some of the errors people tend to make when things are looking rosy.

Episode 350 - Conservatorships have been in the news quite a bit over the last few years. What exactly is it, and how do you avoid having to deal with one?

Episode 349 - Being an optimist has been shown to increase your overall well-being. But in a recent article in Think Advisor, author Michael Finke suggests that optimism can also help with your retirement planning efforts.

Episode 348 - Are there things you wished you had learned about money when you were a kid? In today's episode, special guest Hannah Kesler talks about some of her ideas on how to raise children to become financially savvy adults.

Episode 347 - The U.S. Department of Labor's constantly changing rules on classifying workers as either independent contractors or employees is creating confusion among employers. What's the current status?

Episode 346 - Does it ever make sense to reject an inheritance? On some occasions, a “qualified disclaimer” can give you a chance to do the right thing, or to avoid a major headache.

Episode 345 - Just having a will is not enough. You need to get the details right. Here are 6 big mistakes we see people making when they structure their wills.

Episode 344 - The One Big Beautiful Bill, or OBBB, is now law. The OBBB extended many provisions created in the Tax Cuts and Jobs Act of 2017, or TCJA. We'll review and summarize some of the key aspects of the OBBB as it pertains to extended TCJA provisions impacting individuals, families and businesses.ration or LLC? What type is best for you?

Episode 343 - No one enjoys receiving a letter from the IRS, especially when they open it and realize that their return is being reviewed. The odds are longer than most people realize, but what should you do if this happens to you?

Episode 342 - Thinking of collecting your Social Security at age 62? Watch out for the “Excess Earnings Test.” It's a bit more complicated than you may realize.

Episode 341 - News flash: Estate planning is not for just the wealthy. Here are some ideas put forward in a recent article by renowned estate attorney Jonathan Blattmachr, especially for what he describes as “middle tier clients,” which he defines as people whose wealth does not exceed the available exemptions.

Episode 340 - Actively listening to what someone else is saying can be incredibly hard, but it comes with enormous benefits. How do effective leaders manage it?

Episode 339 - The rich and famous are prone to estate planning mistakes. Today we look at some real world examples, and the lessons we can all learn from all of them.

Episode 338 - Do single people really need life insurance? Here are six good reasons why they might.

Episode 337 - The rate of gray divorce—defined as divorce after the age of 50 following a long-term marriage—has increased in recent years. The financial impact can be especially difficult for women.

Episode 336 - Being an empty nester undoubtedly creates challenges you might never have thought of. Here are some tips about what you may encounter, and how to deal with them.

Episode 335 - Financial criminals are a crafty bunch. Just when you figure out what they are doing, they change tactics. Here are four trending scams to stay ahead of.

Episode 334 - Just starting a business? Do you understand the differences between a sole proprietorship, partnership, C corporation, S corporation or LLC? What type is best for you?

Episode 333 - Do young people need life insurance? Here are eight good reasons why they might.

Episode 332 - Most Americans are very concerned with the adequacy of their retirement savings, and whether rising health care costs and inflation will adversely affect their retirement. Many are also concerned with the availability of Social Security. There are many resources and tools available to help you plan.

Episode 331 - Opportunity cost is an often-overlooked factor that has an effect on every financial decision you make. Understanding this concept can have a significant impact on how you approach even the most basic of financial decisions.

Episode 330 - The prospect of increased longevity should make all of us smile, but it creates issues that prior generations rarely had to face. Are you ready to deal with the consequences?

Episode 329 - With retirement planning, as with most financial principles, every situation is different. That said, we all need a few guidelines to see if we are going in the right direction. But these basic ideas evolve over time as demographics, life expectancy, tax laws and available products all change. He are a few ideas that could use a good debunking.

Episode 328 - There are few things that create more fear and loathing than a so-called “exam letter” from the IRS. It means that you're likely looking at a significant time commitment just to put together the documentation they're looking for, along with potential new taxes, interest, penalties, and accounting fees. Here are a few things that may end up triggering a tax audit.

Episode 327 - Billionaires are considered role models by many and disliked by many others. Although relatively tiny in terms of numbers, they have an enormous influence on our economy. Where are they headed these days?

Episode 326 - There's been a lot of talk lately about making Social Security income tax-free. This would certainly be a popular move, especially for seniors. But doing so comes at a steep price.

Episode 325 - Should you buy a life insurance policy on your newborn or young child? Here are five things to consider.

Episode 324 - If your income goes up over time, it doesn't necessarily mean that you'll be able to save more. If you're not careful, “lifestyle creep” can make things worse. Here are a few ideas on how to fight back against lifestyle creep.

Episode 323 - The investment wisdom of Warren Buffett is well known through his annual letter to shareholders. But he has some unique ideas about estate planning as well. Here are six of Buffett's more important estate planning concepts.

Episode 322 - There's bad news everywhere you look. Political polarization in the USA, war in the Middle East, and natural disasters all over the place. But what if things are actually better than we realize? Here are some reasons to celebrate.

Episode 321 - Can money buy you a longer life? Surprisingly, in some cases it can.

Episode 320 - Financial infidelity is a real thing. And the problem may be worse than most people realize. Two new surveys provide us with some fascinating details.

Episode 319 - Life doesn't necessarily get easier when you accumulate wealth. There's always something to worry about, and at some point, if you're lucky, your worries evolve from accumulating your wealth to protecting it. If you're worried about future generations destroying the wealth you've worked to accumulate, a spendthrift clause could help ease your mind.

Episode 318 - Generation Z, born after 1996, is just getting started with their financial lives. How are they doing so far?

Episode 317 - Be on the lookout. Internet scams are getting more sophisticated. Here are five ways to help protect yourself.

Episode 316 - The process of getting life insurance is a lot easier than it used to be. In this podcast, we will learn why, with special guest Angela Thieschafer.

Episode 315 - Can you write your own will simply by recording a video with your cell phone? Not so fast, a Montana court has ruled. In many cases, it needs to be in writing

Episode 314 - The President is about to sign the Social Security Fairness Act into law. But is it really fair? And how does it affect Social Security's solvency?

Episode 313 - It's probably the last thing you want to think about if you've just lost your spouse. But no matter who you are, no matter what your situation, financial issues are always there, and no matter how difficult, you're going to have to address them.

Episode 312 - Do you have enough money to be considered wealthy? A recent survey by Charles Schwab and Company has the answer.

Episode 311 - There is so much that younger generations can learn from their elders. Not just from the things they got right, but from the things they got wrong. A recent study by the TransAmerica Center for Retirement Studies can help young people figure out some of the things they can do for their own future by avoiding the same mistakes.

Episode 310 - When you get past a certain age, downsizing always seems to sound like a good idea. But is it really? What are the really important considerations you need to keep in mind?

Episode 309 - According to a recent study, an astounding 36% of Americans have more credit card debt than emergency savings, and 27% have no emergency savings at all. These sobering statistics spotlight a glaring hole in many Americans' finances. If this is you, how do you start to climb out?