The show that helps you maximize your wealth by turning complex financial situations into actionable advice. On Your Money. Your Mission., we answer the questions you’ve been asking about -- financial planning, investing, retirement and everything in between. Whether you’re navigating the complexities of the market or looking for the best ways to save or spend your money, tune in to hear from experienced financial advisors with JFG. Walk away from each episode with savvy tips and financial t ...
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Tony Mauro에서 제공하는 콘텐츠입니다. 에피소드, 그래픽, 팟캐스트 설명을 포함한 모든 팟캐스트 콘텐츠는 Tony Mauro 또는 해당 팟캐스트 플랫폼 파트너가 직접 업로드하고 제공합니다. 누군가가 귀하의 허락 없이 귀하의 저작물을 사용하고 있다고 생각되는 경우 여기에 설명된 절차를 따르실 수 있습니다 https://ko.player.fm/legal.
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1 Love Is Blind S8: Pods & Sober High Thoughts w/ Courtney Revolution & Meg 1:06:00
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Happy Valentine’s Day! You know what that means: We have a brand new season of Love Is Blind to devour. Courtney Revolution (The Circle) joins host Chris Burns to delight in all of the pod romances and love triangles. Plus, Meg joins the podcast to debrief the Madison-Mason-Meg love triangle. Leave us a voice message at www.speakpipe.com/WeHaveTheReceipts Text us at (929) 487-3621 DM Chris @FatCarrieBradshaw on Instagram Follow We Have The Receipts wherever you listen, so you never miss an episode. Listen to more from Netflix Podcasts.…
Plan With The Tax Man
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Tony Mauro에서 제공하는 콘텐츠입니다. 에피소드, 그래픽, 팟캐스트 설명을 포함한 모든 팟캐스트 콘텐츠는 Tony Mauro 또는 해당 팟캐스트 플랫폼 파트너가 직접 업로드하고 제공합니다. 누군가가 귀하의 허락 없이 귀하의 저작물을 사용하고 있다고 생각되는 경우 여기에 설명된 절차를 따르실 수 있습니다 https://ko.player.fm/legal.
Financial, tax and retirement planning guidance from Tony Mauro. Tony is the original Tax Doctor, serving central Iowa. We’ll teach you how to properly plan for retirement, minimize your tax burden and attain a successful financial future.
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98 에피소드
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Tony Mauro에서 제공하는 콘텐츠입니다. 에피소드, 그래픽, 팟캐스트 설명을 포함한 모든 팟캐스트 콘텐츠는 Tony Mauro 또는 해당 팟캐스트 플랫폼 파트너가 직접 업로드하고 제공합니다. 누군가가 귀하의 허락 없이 귀하의 저작물을 사용하고 있다고 생각되는 경우 여기에 설명된 절차를 따르실 수 있습니다 https://ko.player.fm/legal.
Financial, tax and retirement planning guidance from Tony Mauro. Tony is the original Tax Doctor, serving central Iowa. We’ll teach you how to properly plan for retirement, minimize your tax burden and attain a successful financial future.
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Plan With The Tax Man
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1 Built a Business, But Not a Retirement Plan? Here’s What to Do Now 12:09
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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.…
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Plan With The Tax Man
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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.…
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1 New Year, New Me: How To Change Your Money Attitude In 2025 15:17
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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.…
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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.…
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Plan With The Tax Man
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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.…
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Plan With The Tax Man
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1 Post-Election Conversation: The Future of the Tax Cuts and Jobs Act 18:18
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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.…
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Plan With The Tax Man
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1 Lindsay Lohan’s Advice Could Save Your Retirement: Unlikely Financial Wisdom 17:01
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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.…
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Plan With The Tax Man
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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.…
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Plan With The Tax Man
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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.…
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Plan With The Tax Man
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1 Handling Crisis: Financial Planning After a Tough Diagnosis 15:12
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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.…
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Plan With The Tax Man
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1 Tailoring Your Financial Jersey for a Perfect Retirement Fit 17:46
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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.…
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Plan With The Tax Man
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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.…
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Plan With The Tax Man
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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.…
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1 Combatting Popular Excuses For Poor Financial Decision-Making 16:18
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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: 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 here on Plan With The Tax Man. Hey, everybody. Welcome into the podcast. Tony, myself, here to talk investing, finance, and retirement. Tony and myself. I don't know why I can't talk this week. To have a conversation about popular excuses for poor financial decision-making. And really, Tony, I've just got five basic questions here. Look, we're all really good at saying, "Well, I did this because of that." and sometimes we know it's a bunch of BS, that we're just throwing some junk out there, because we didn't think it through or we rushed 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, 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. Tony Mauro: Okay. Yeah. I agree with it. Marc Killian: That makes sense? It makes your job easier, too, when we can get it right the first time, because it makes it easier for you to build that plan for us. 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 it on at 62 thing, the excuse being, "I want to get it back before it's gone," Or whatever thing you want to grab onto, other than just saying, "I truly need the money, and that's why I'm turning it on." Okay, that's a valid reason. But just saying, "They owe me. It's mine. Whatever. I'm turning it on." Well, fine, but you could be costing yourself a ton of money, if you do that. Tony Mauro: A ton of money. The other excuse that goes along with that is they're going broke. They won't get it. Blah. Blah. Blah. And I just had an email this morning from a tax client, asking this very question. And his email went, "My wife is 67. We're thinking about waiting until 70. I've asked different people. They all 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, 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 advisor should have this, is there is some sophisticated software that we can run and punch numbers in to show you basically, "Here's what you're going to get over your lifetime if you take it at 62. 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 to break even and 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're going to get the government. You're going to show them. Marc Killian: "I'm going to stick it to the man." Tony Mauro: And start taking the money. Marc Killian: Yeah, "I'm going to stick it to them." Yeah. No. And you're sticking it to yourself if you do this wrong. Right? Tony Mauro: You're sticking it to yourself, because every year 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." 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 show them all this other stuff. But, it's easy to show somebody, "If you wait until this, based on your average life, how much you actually could come out ahead." And then it's up to, of course, the client to decide. Marc Killian: Exactly. Tony Mauro: 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 going to say you can't do it. It just might be a bad decision. Marc Killian: Yeah. That's what the stress test is for, the social security Maximisation. Right? Tony: It is. Marc Killian: You guys can go through that and see where it stands, what makes the most sense. What is your breakeven point? So, don't just make that excuse. 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. I'm making up for lost time," which is normal. We all feel that way. We feel like we didn't get enough saved 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 working on building something with them. And you're like, "Oh, you're taking way more risks 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 in as bad a shape as you thought you were. Tony Mauro: That's right. And it all comes down to trying to figure that out and backing into it from a good plan, a good starting point, because it depends on what their goals are and whatnot. And if they haven't defined that and we sit down with them and come up with those goals and what they actually say their risk tolerance is, compared to what they're doing ... And I hear this all the time. We try to tell them, "Well, maybe we can get to these goals by you just saving a little more, because the risks you're taking might be far too large." And risk is a risk. If that risk does not pay off, you're 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 going to have something." That's what we try to go over there. Marc Killian: Yeah. Great point. So again, you want to make sure that if you're feeling behind, first find out if you truly are, before you start swinging for the fences. Tony Mauro: Right. Yeah. Marc Killian: And then your advisor's going to say, "Okay. Look, we are a little bit behind. Here's a couple of strategies that we may need to do to get you to your goal, versus just 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. They'll often explain it, "Well, I don't want to lose it like I lost last time 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, Tony, which is better, it still doesn't keep up with inflation. So, you've got to have some growth monies. Tony Mauro: You got to have some growth monies. And this is where a good plan comes into place, because hopefully, you can be diversified. Yes. You can keep some additional monies in cash, especially these days, because 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. It's a little different for retirees. But, at the same time, most of the time we'll ask them, "Well, if you lost all your money the 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 short-term fluctuation in the market. You panicked and sold everything?" So, we try to get them off of that, trying to time the market and not worry so much about that and base it off truly what their plan is. Marc Killian: Yeah. Definitely. And 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 if you are getting four or 5%, which is what we can see right now. Still not truly keeping up with what we know real inflation to be, not just CPI numbers. Okay. Number four, when someone has no idea what they're invested in or what their money's even doing for them, well, the excuse sometimes is, "I don't know. I picked this," or, "I did that, but it's not my thing. So, it's looked good." Whatever excuse you want to 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's going to help explain that to you, why they're recommending what they've recommended and what it's doing for you. Tony Mauro: That's exactly it. This is my favorite, especially when people come in and they have money in their 401k different investments, they have no idea what it is in, or even what it's done. And that, just like you said, that is where, 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: [inaudible 00:08:44] Well, think about it like this, Tony- Tony Mauro: This is our thing. Marc Killian: Yeah. Think about it like this. How many people get into a stock because they hear it's cool, or because their dad loved it, whatever. "Dad had Coke. I want Coke." That's not an endorsement for Coke, by the way, folks. Coca Cola. Coca Cola. Let me clarify. But, you know what I mean? Or GM, or whatever, right? "Well, Dad always drove a Chevy, so I love GM stock," or something like that. That's fine. But, is it really beneficial in your overall strategy? 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, because it's not helping you, or whatever the case is. Tony Mauro: Yeah. And we have clients that did want certain types of investments for sentimental reasons. Nothing's wrong with it, like you say, but it's just part of the overall plan. But, if you're just out there willy nilly and say, "Well, I've got this. I've got that, because of this," or your quote, "excuse," that may not be or have anything to do with getting you to where you need to be with your goals and then your plan. And so, that needs to be looked at. And again, that's where an advisor is going to help. Marc Killian: True. And sometimes we'll hear stuff like, "Well, I went to three different companies and bought three different mutual funds, so therefore I'm diversified. Because I don't really understand this, but I figured that has me covered. So, I 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. Tony Mauro: Yeah. With the same holdings. Yeah. Absolutely. Marc Killian: Exactly. All right. Last one, Tony. If you're working with a professional, an advisor, broker, whatever, and you're not sure that you want to move on, but you 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 some things' clearly bugging you, 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 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. You know what I mean? So, you need to see a doctor who's 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 the 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 look around for a new one. Tony Mauro: Yeah. And I think 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 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 bring it out into the open is talk to the advisor about it and just tell him or her that, "Hey, I think I should be doing this. Does this fit in what you do and how we're doing it?" And if not, don't be afraid to say, "Well, I think I need that and I may want to go to somebody else." That's the first thing, because obviously it's not going to get better unless something happens. Marc Killian: It gets addressed. Yeah. Tony Mauro: Yeah. 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 to do financial planning. All of a sudden he came in and, "Oh, yeah. All that's great." Blah. Blah. Blah. But, really all he wanted to do was, 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 could admit it. I'm not a stock picker. I'm a planner. And if you can- Marc Killian: You're not a day trader. You're not a day trader. You're a broker. Yeah. No. Tony Mauro: Yeah. That's just not where I want to be. And I tried several times to get him and his wife together to lead the plan. Didn't have any interest in that. Finally, I told him, I said, "You know what? I can't be of value to you. You need to go either do what you want to do on your own, or find another advisor because ... " So, I actually severed the relationship, because I said, "As a fiduciary ... " We talked about that a little bit earlier. "I can't provide you any value. You're paying me a fee and I can't give you what you want." Marc Killian: Right. No. And that's great. You've got to have the right relationship for what it is that you're looking for and being able to receive. So, even if you are older and you know, need a financial advisor who specializes in retirement or 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. So- Tony Mauro: And money. Marc Killian: Yeah. So, it's good to have an advisor that can give you ... Look, we all want to have our hand held from time to time, but you also need that person that gives it to you straight. Like, I changed my cardiologist after having heart surgery, because the other guy I had, while a fine doctor, his delivery style didn't work for me, Tony. It wasn't communicating well for me to do the things I needed to do 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. I needed someone to be a little bit more stern with me. You'd think that you would need someone to be stern with you when dealing with a heart situation, but I did. And so, therefore, I had to find the right doctor. Same thing. Same exact thing. Tony Mauro: Same thing. Absolutely. Obviously, everybody knows there's a lot of advisors out there. You've got to find somebody that is going to be your style, so to speak. Because otherwise, it's like any other relationship, just like you were saying, it doesn't work for you, Marc Killian: Doesn't work. Starts to fizzle. You dread going. You don't really follow through with things. Whatever. So, those are some things to think about folks on our conversation this week. Don't make excuses for yourself. We're humans, we do it pretty darn easily. But, when it comes to your finance, try to eliminate those, so you can get it right the first time and have that happy and 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 yourplanningpros.com, that's yourplanningpros.com. Tony's been doing this for 30-plus years, a great resource for you to tap into. He's a CPA, a CFP and an EA. And again, a great resource for you to reach out to at yourplanningpros.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. Tony Mauro: All right. We'll see you on the next episode. Marc Killian: Yes, sir. 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.…
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