Discover the keys to a prosperous and fulfilling retirement with us, Todd Whatley and Ian Weiner, as we delve into the essence of what it takes to retire with confidence. Joined by seasoned experts, we'll unravel the complex tapestry of retirement preparation ensuring that your finances don't just last, but flourish during your golden years. Get ready to transform your approach to both life and money after a structured career, as we share vital strategies for utilizing your time with purpose and intention.
We tackle the pressing issue of knowing whether your nest egg can withstand the test of retirement, moving beyond the one-size-fits-all advice to a tailored strategy that respects the unique bell curve of retirement spending – from the 'go-go' years to the 'no-go' years. Our conversation casts a spotlight on the pivotal role of taxes and IRAs, revealing how the government becomes a ‘silent partner’ in your savings and why proactive planning is non-negotiable. Hear firsthand stories that bring to life the perils of ill-prepared investing and how an evidence-based investment philosophy could be the guardian of your wealth.
In our final chapter, we stress that a stitch in time saves nine when it comes to financial planning. We take you through the intricacies of long-term care, the benefits and pitfalls of insurance, and how crafting a plan for every dollar can make a significant difference in your life. Our experts elucidate the advantages of early consultation with a financial planner and offer insights into lifetime tax bill reduction, mapping out a pathway to a smoother, more secure financial future. Join us on this journey and equip yourself with the knowledge to navigate the seas of retirement with grace and savvy.
Discover the keys to a prosperous and fulfilling retirement with us, Todd Whatley and Ian Weiner, as we delve into the essence of what it takes to retire with confidence. Joined by seasoned experts, we'll unravel the complex tapestry of retirement preparation ensuring that your finances don't just last, but flourish during your golden years. Get ready to transform your approach to both life and money after a structured career, as we share vital strategies for utilizing your time with purpose and intention.
We tackle the pressing issue of knowing whether your nest egg can withstand the test of retirement, moving beyond the one-size-fits-all advice to a tailored strategy that respects the unique bell curve of retirement spending – from the 'go-go' years to the 'no-go' years. Our conversation casts a spotlight on the pivotal role of taxes and IRAs, revealing how the government becomes a ‘silent partner’ in your savings and why proactive planning is non-negotiable. Hear firsthand stories that bring to life the perils of ill-prepared investing and how an evidence-based investment philosophy could be the guardian of your wealth.
In our final chapter, we stress that a stitch in time saves nine when it comes to financial planning. We take you through the intricacies of long-term care, the benefits and pitfalls of insurance, and how crafting a plan for every dollar can make a significant difference in your life. Our experts elucidate the advantages of early consultation with a financial planner and offer insights into lifetime tax bill reduction, mapping out a pathway to a smoother, more secure financial future. Join us on this journey and equip yourself with the knowledge to navigate the seas of retirement with grace and savvy.
Welcome to Wealth for Generations, the podcast where you learn to grow, protect and preserve your wealth for generations. Our hosts on today's show are Todd Wattley, a certified elder law attorney, and Ian Weiner, a certified financial planner. Join us and our expert guests as we uncover the mindsets, tools and strategies to help you maximize your wealth and impact. Let's embark on this journey to secure your legacy. Please note this podcast is for informational purposes only and is not intended as financial or legal advice. Always consult with a professional regarding your specific situation.
Speaker 2:Welcome to the Wealth for Generations podcast. My name is Ian Weiner. I'm your host here with my co-host, todd Wattley. How are you? How are you Doing? Well, excited to talk about this today. Okay, this is a fun one, I guess. I think this episode if you do what we're telling you in this episode, you can set yourself up for success in retirement. Wow, that's a big claim. It's not terribly hard. You just got to do it. That's a lot of what we talk about Simple, not easy. In a lot of ways, we're going to talk about what are the questions that you need to ask and therefore answer, before you retire. This is sparked from some conversations we've had. In the last week conversation I had with an advisor colleague that's in a different area I thought, based on what we're seeing right now, let's get this one out, because I think this is going to be really helpful for a lot of people.
Speaker 3:When you say before I'm sure we need some timeframe, I'm pretty sure you're going to say the sooner the better. But give the people some kind of timeframe of optimally when should they ask these questions and start addressing this.
Speaker 2:I love that you asked that, because in a perfect world, I would love to be addressing these things at least five years before you retire. Before you freak out and go, you just want to collect fees or I don't have five, I'm already retired, it's okay. It's not too late to do some planning, but if I was designing a perfect retirement, whether it's for myself or anybody else, and I had the time to be able to do it?
Speaker 3:these are the questions I would want clarity in Five years, gives you a leisurely amount of time to implement what you're about to talk about.
Speaker 2:Yes, Really what we're going to talk about. What happens is, when you do these things, your picture of retirement might change a little bit. We want to create flexibility for you to be able to do that. Okay, let's jump into it. The first question this is number one, and whether you're retired already, or thinking about retiring, or you want to retire in 25 years, this is the question that you need to answer.
Speaker 3:That is, how will I spend my time Interesting You're not clocking in every day, you're not driving to the office and clocking in. What are you going to do once you wake?
Speaker 2:up. What are you going to do? I should preface everything in this episode with whether you consider it a traditional retirement or you just want to create financial independence and do what you want when you want. These are the same questions.
Speaker 3:Just for some people out there, I don't see myself ever not working as an attorney, as a financial advisor. I can do this until I'm dead, but I don't want to do it nine to five, Monday through Friday. I want some time off. I want to go do some things. I want to not have to come into the office.
Speaker 2:Some people may be surprised by this. I think that's an example of potentially a healthier path for retirement or financial independence than what a lot of folks see. My argument to you is that I don't think that humans are designed to not work in some capacity, not use our energy, our efforts, our skills, our talents in some way.
Speaker 3:I've seen a lot of people who worked 40 hours a week, a very industrial type job, nine to five, five days a week, and they've done this for 50-plus years. Then it's like, okay, I'm retiring Friday, they get the gold watch and they go home. Then Monday morning it's like what do I do? That's a lot of free time. Maybe for a week or two it's like, well, I've been meaning to clean out that closet or trim these bushes or something. After that's done, you've still got a lot of years to go, so what do you do? I think people need to think about that. I know a lot of people get part-time jobs. They volunteer. My mom was a nurse. She volunteered at the hospice. That kept her busy.
Speaker 2:You've got to be doing something. You've got to be doing something. It's funny. I actually talked to my dad about this. He was talking to one of his buddies who just retired. They were talking to each other and they said one of the things that I didn't realize is that the silence would be just deafening. Oh, hadn't thought about that. That's something I've heard in other conversations before. The argument here is look, your time is an asset, but it's a limited resource. At the same time, you get to spend it. We all have the same amount in a week, same amount in a month and a year, but how you spend it wisely or poorly is different for you and me and Todd. But you have to be thoughtful and intentional about it, or else it's just going to evaporate and next thing you know there's not going to be any time left.
Speaker 3:Ideally five years before, I can start thinking about that and start preparing for what you're going to do after retirement.
Speaker 2:And really think about what you want. I mean everything we talk about in estate planning, financial planning. It's really just about figuring out what you want and how to make sure that that happens. I don't want to over complicate it, it's really not.
Speaker 2:There's a lot of rules and stuff that goes into that. That's what a good advisor is going to come alongside you to help you do. But doing this exercise, thinking about what you want, what you want to spend your time doing is going to give you clarity and what the reason I like to say five years is. What you may find is the plan that you had before we started talking about it and going through this process is going to change by the end of it, and maybe you don't need to retire in the traditional sense, maybe you just need to take a vacation, maybe you just need to adjust the way that you work and what you work on Interesting. So that's number one, and we could spend so much time talking about that, and I think it's really important. But when you start to get some clarity about that, the next question that's going to come up is how will I create a paycheck or how will I create income Call it what you'd like paycheck income but I want to frame it in this way because humans are creatures of habit. We get conditioned to operate in a certain way, and the way that we're conditioned to operate is we go to work whatever that looks like and income comes in. Money comes in, a paycheck comes in. That's what handles the bills, and some of that maybe goes towards investing or the future or what have you. But there's a process there.
Speaker 2:And where I see a lot of retirees struggle is that transition from having money coming in to having to sell whatever it is that they own, whether it's rental houses, stocks, bonds, mutual funds. Sell assets to create income and not having a plan for that and ideally a plan for that that is designed well before you actually have to start selling, those things can cause disastrous consequences for people. Disastrous Because if you have to sell let's say you have to sell stocks when the market's down and that's your only option to do that you got to sell at a price that you don't like and if you've got to do that longer than a couple of times, all of a sudden the retirement plan could blow up pretty quickly. It's not working.
Speaker 3:So you may address this and for our listeners, I'm sitting here just like you are. This is the first time I've heard this and so I'm hopefully asking the questions you may ask or clarifying things. But if someone has five years, can you discuss with people about do they have enough money to retire? Absolutely, do they retire in five years, or should they think about?
Speaker 3:Oh goodness, I never thought about it and we did talk about this is one thing that I was told or thought about is when do you spend as you're working? You work Monday through Friday and you're thinking about retirement and what you'll be doing. It's like well, when do you spend the most money? During the week, you go to work, you come home, you eat dinner, you watch TV, you go to bed repeat five days and then on Saturdays and Sundays it's like, hey, let's go do something, let's do this, let's go out to eat, blah, blah, blah. And I spend more money on the weekends than I do during the week. And if I was retired, every day's a weekend, and so I think people may think that, oh, I've got X number of dollars, that should be fine. But if you really think about it and can you help them go through that process of question number one I'm sure is very important and then figure out should I actually retire now or should I work a few more years?
Speaker 2:That's a huge reason why we should start planning sooner, because there's really one of two scenarios when someone comes to me, typically they're either going to need to work a little bit longer or adjust their spending, or I'm gonna try to talk them into retiring as soon as possible because they've over-saved. They've saved to the point where they may never you know, they may never spend all of their money, and that's just as dangerous, I think, as not saving enough, and so that's what the question forces is okay, have I saved enough to retire? And that's a pretty straightforward calculation, frankly. But here's what happens. All of these sort of rules of thumb come into play that we've picked up, for whatever reason, from the financial media over the last 40 years, and what I want you to know is that the rules of thumb don't apply to you. You need a rule of view. You can do better than a rule of thumb, I guess is what I'm trying to say. And so you know, 80% of your pre-retirement income or 4% of your assets, or these are just generalizations that, frankly, are less than helpful for people. We want to customize this for you. What do you want to do, how are you going to spend your time, and what does that kind of cost?
Speaker 2:The other thing that a lot of folks don't realize is spending is not a straight line up in retirement.
Speaker 2:You know, I don't know where this originated from, but a lot of people talk about retirement's three phases the go-go years, the slow go years and then the no go years. Oh, I've never heard that. Okay, that's a fun one, you know, because when you're first retiring you know you theoretically are, you know, doing the trips, doing the stuff, spending more money. You've got time, you've got energy and you know, as you get a little bit older it gets a little bit harder to do those things. And then at a certain point you know the grandkids are coming to you, you're not going to them anymore, and so spending is not really a straight line up in retirement for most people. It's more of a. It's more of a kind of a bell curve. It kind of tapers off. At a certain point it comes back down. Now one of the things that could cause it to go straight up is if we don't plan for long-term care event, that can be a challenge for taxes.
Speaker 3:And then hockey sticks. I mean, it goes up quick.
Speaker 2:And you know, if we have a bunch of money in IRAs and we have to take RMDs and we don't plan for that and tax rates go up at the same time giving you a little hint here of you know what's coming for a lot of people that's not good. That could happen. And then spending drops down because there's no more money, right? So we've got to be thoughtful about that. But we can create a plan to you know, figure out what the optimal way to create that income that you need is, optimal for the type of things that you own, the assets that you own, and optimized for taxes. That's a big piece, that's a huge thing of what we deal with. We're not going to talk a ton about taxes today, but you need to understand that's part of the equation.
Speaker 3:Yeah, you look at a million-dollar IRA and think I've got a million bucks. No, you don't. You have about 600,000. Yeah, you know IRAs, no taxes been paid and you've got to take that into it. Don't look at that million-dollar IRA as a million bucks, because it's not.
Speaker 2:You've got a limited partner, which is the government making majority-partner decisions.
Speaker 3:Oh wow, I mean think about it.
Speaker 2:You know, when you save it in an IRA or 401K and this isn't wrong, this isn't wrong that you did this. This is just the way that the system worked. You made a deal and the deal was you would get a current year, so the year that you contributed you'd get a tax deduction in most cases for that contribution Right. But when you took it out, you'd pay ordinary income tax on it. If we rephrase that, imagine you came to me and you said hey, I need a loan for 100 grand. I said great, no problem. When do you need the money? Well, you know, year or two. Okay, I'll write you a check for it. Okay, great. Well, when am I going to pay back? What's the interest rate going to be? Don't worry about it, we'll deal with it later.
Speaker 1:You get a cash to check.
Speaker 2:I mean probably not, right. Right, the payment terms are unknown, then the rate is unknown. Wow, yeah, I mean that is what's happened. I see your point, you know, and so we've got to be. It's not. I don't want people to panic. If we plan, it can be a lot less than that, but what most people don't do is plan.
Speaker 3:IRAs drive me crazy in my legal practice, because when you're working it's a great idea. Put that money there that comes off your income tax. You don't pay tax on it. We'll deal with this someday. But that analogy of you know, yeah, we don't know what the rate will be. We don't know what the terms will be when someone comes to me needing nursing home care and they have a lot of IRAs.
Speaker 3:It's difficult and there have been some people that have chosen not to do Medicaid when normally, if it was $600,000 and just post-tax money, easy, I can get you on Medicaid boom quickly. But if it's $600,000 in IRAs, we have to calculate the tax hit on that of cashing it in immediately and that's going to be, you know, $250,000, probably $250,000 in taxes that are gone. Can we make that up with Medicaid money? And even at $8,000 or $9,000 a month, that's a lot of months that you've got to get a Medicaid benefit to offset that $250,000 tax hit and it's just ah. And people are like I don't think we should do this. I'm like I agree, you've just got to pay and so, yeah, iras are fantastic when you're working, but boy, they can blow up on you in retirement.
Speaker 2:The big key is, you know, what I'm hoping is, when people are hearing this last little exchange, that we had the power of having us as a team working together on this. I mean, that's huge. Yeah, these things, these are great tools if you plan for them. There are some of my clients who are younger, have businesses or, you know, are higher earners. They are contributing to traditional IRAs and 401ks because they're charitable inclined and we're going to convert those IRA dollars to Roth IRA dollars. They're going to pay 0%. They're going to get a tax deduction up front in the year that they make the contribution and then they're going to convert it to a tax-free account and pay 0 dollars in tax and it's 100% legal Because we have time to plan, because we're planning, and so I just want people to understand these are the kinds of things that we can do because we know how to play by the rules.
Speaker 2:So most people are on what's we would call like the default path. You know, the default path is how do we minimize taxes this year and we'll deal with that later. This is what I hear people tell me all the time from big firms. Those advisors tell them oh, just take RMDs, don't worry about it. You know you weren't out of money. We'll deal with that later. The deferred delay plan that's what it's called. That's the default plan.
Speaker 3:Who do you?
Speaker 2:think the deferred delay plan benefits.
Speaker 3:Uncle.
Speaker 2:Sam, uncle Sam and, arguably, the advisor. If the advisor is, you know their income is based on what percentage of assets they manage for you. Is it in their interest, if you need to keep it, for that pile of money to keep growing? Just something to think about. So that's, these are some of the considerations when it comes to creating income. Okay, so we need a plan for that. How are we going to create income Whether you're retiring at 40 or retiring at 68. Yeah, either way, we need to be able to create income. Okay, the next question, question number three what assets do I own and why? This is a fun one.
Speaker 3:This is a new concept that Ian has taught me about why you own something. Well, I own a four wheeler because I like to run through the woods.
Speaker 2:Okay, that makes sense. Yeah, that makes sense.
Speaker 3:That's a good reason to own it. Why do you own XYZ mutual fund? No idea, it's what the guy said I needed.
Speaker 2:Or it was one of the options in the 401k.
Speaker 3:Yeah.
Speaker 2:Or Mr Kramer on CNBC said it was a good buy. I mean so. I'm hoping that no one is taking offense to this, I'm poking line at this, but this is, by and large, the way that people make decisions. Or their brother or their neighbor down the street said it was a good buy.
Speaker 2:This is what happens all the time, and what I'm gonna suggest to you is that those are not good decision-making criteria. And here's how I'm gonna prove it to you. Over the past few years, we've had some kind of turbulent market conditions. I'll say it that way. We're recording this four years after COVID, essentially, and if the reason that you own something is because you got a stock tip from somebody or it was just one of the company offerings, what do you think the odds are gonna be? That you stick to your plan, when that asset just went down in value 35% in like two weeks? Yeah, what are the odds? What people do is this is a very common investor behavior they sell well, not at the top. Oops, that would be nice, right. They sell at the bottom and buy at the top, and they repeat until they're broke.
Speaker 3:And that's just the opposite of what you're supposed to be doing.
Speaker 2:You wanna buy low and sell high, but timing, that this is something we call the behavior gap. There's a gap between what the market returns and what the average investor gets, and it's really based on behavior.
Speaker 3:And that behavior has you doing exactly opposite of what you should be doing.
Speaker 2:Yep, and it's because what I argue. In many cases it's because you don't have a solid conviction of why you own what you own. In a lot of cases I would say probably 98% of the folks that I see they don't know what they actually own in their portfolio. I mean, these are people with sometimes multiple million dollars. They don't know what they own.
Speaker 3:It's not unusual. Should have asked that guy here today. So what are in these three million dollars worth of investments? I would be shocked if he could name three of them.
Speaker 2:I mean truly some of the smartest people that I've worked with, very educated folks. They at least 20 to 25% of their portfolio. They had no idea what it was. One of my favorites we had a family friend. We were reviewing his portfolio just as a favor to him. Guy Dunwell had worked with a big name advisor. Everyone would know and I said, hey, what was the process for selecting investments? He goes well, the home office. We get calls and they say, hey, do this, we're gonna rebalance this, that or the other way.
Speaker 1:Nice guy, really nice guy the advisor's a great guy.
Speaker 2:Oh, it's always a great guy. Everyone's advisor's always nice Dub right.
Speaker 3:Of course.
Speaker 2:And I said, okay, so do you know what kind of percentage you have in terms of stocks, bonds, like what's the asset mix? He goes, I should be 100% stocks. That's what I want to be. You know, I don't need he goes, I don't need he. Has he had a pension? Good social security, doesn't spend money just one of those kind of people.
Speaker 2:And I said I think that could potentially make sense. And I said would you be surprised to know that your portfolio is 20% bonds? And this is when we're literally in the worst bond market in history since we've been recording it. Sure, and he said what, right, right, right. I mean this is $500, $600,000 that was essentially unaccounted for in his portfolio. I mean he was there, but it was not. It was not what he thought it was Wow.
Speaker 2:And so I mean that's something that, if that is the case, if you don't know why you own what you own what's in your portfolio, if you don't have conviction about it, you cannot be expected to not panic, sell at the wrong time. You can't do it. And so you know that's one of the things that we try to do with our clients is you don't have to know all of the technical details about the portfolio, but you need to know some of the underlying reasons and really we have what we consider to be an evidence-based or data-driven investment philosophy. We base our portfolios on about 60 years of investment science done by a few folks who won a couple of Nobel Prizes for their work. That's good. We don't have a guy at the home office.
Speaker 2:You know that's like a stock analyst going hey, this one looks good this time. Or you know, we got to sell this to you know, get our additional commission up. That's not how it works. We follow the science that has worked for a long time and we keep it simple. But when you understand that, when you understand that data is driving your portfolio and your decision and it's not based on, you know, some really smart person at the home office or what an analyst says or any of those things, it's based on the cutting edge science of investing Like, oh okay, this has happened before and the portfolio has weathered it before. It will weather it again. It's a different thought process, okay, so what and why?
Speaker 3:What do you?
Speaker 2:own, and why? Yeah, okay, maybe that's real estate. Why do you own real estate? Is that optimal for your plan? Maybe, maybe, not yeah who knows? So we got to know what you own and why you own it, and the final piece I'll say on that is, if you wouldn't buy it today at the price that you own it at, you should own it, Okay interesting.
Speaker 2:So this is. You know, that's another thing to kind of think about, because we can get sentimental about the value of things and that can be a big costly thing in investing.
Speaker 3:I was shocked by that. In this line of work, when a wife comes in a husband's going into the nursing home and I'm like, okay, we need to sell this stock, oh, we can't sell. This was the company he worked for and this was the stock he got when he retired 30 years ago. And yeah, we can't sell this. Why? It's just it was like a precious gem. You know it was like a family heirloom that, oh, we can't get rid of this on wire because you know it's special to us and it's a stock and it's doing terrible. But oh, you know it's. Yeah, I've seen that they owned it because it was an heirloom, not because it was a good investment. It was literally something oh, dad got this and we can't sell it.
Speaker 2:This was. There was one with a very dear client of mine and she would tell this story. There was a similar situation and that stock had been passed down like two generations. And so I said you know, look, taking the name of the stock away, what is the purpose of this money? Because we gotta get clarity on it. What is this money for? Well, it's for the grandkids, it's to continue the legacy. That's what it's for. I said okay, let's dig into the stock a little bit. We talked about some of the concentration risk issues. Some of those challenges went wow, you know, it really makes sense to honor the purpose, the mission, the value of what this was to represent. It's about the intention, it's not about the actual stock. Sure, six months later stock was down 60%. Ouch, so we, but she took my advice oh, okay, I have a couple hundred thousand dollars.
Speaker 2:For the grandkids, so the impact to the grandkids was preserved. You look like a hero, didn't you? I mean, you know it's. I've never even thought of it that way.
Speaker 1:But I mean really it's.
Speaker 2:What I hope you're seeing in this episode is that the financial decisions and emotional decisions are very closely tied together, and we have to understand that so that we can address it. So, what are you owning and why? Okay, next, this is a good one. Everyone's advisor talks to them about this. What is my lifetime tax liability? What, what's that? So here's number four what is my lifetime tax liability?
Speaker 3:Hmm.
Speaker 2:It in some cases may not be much. If you haven't saved any money, you're not gonna owe very much money.
Speaker 3:I know some people like that they have zero tax liability.
Speaker 2:They got no issues, but some of these other things are a problem, right? Or you know we talked about we touched on this just a little bit, but you could have done everything right. You could have followed all of the you know the guidance from all of the financial news media and everything that was. You know, the best advice at the time, which we talked about, is to contribute to 401Ks, iras, those types of vehicles. But the rules of the game got changed on you.
Speaker 2:They continue to change. We'll do a whole episode on Secure Act one and two Most people don't know over the last five years it's huge, Like massive, absolutely massive changes to the way that these accounts are dealt with when you are taking money out or when you're passing on money to the next generation. I mean enormous changes.
Speaker 3:Uncle Sam needs some money. Yeah, and they did it.
Speaker 2:Yeah, and so you know, when you're getting ready to retire, you need to understand, todd, as you said, if you have a million dollars in IRAs, no, you don't. Yeah, it could be 600,000. I mean, it could be lower than that.
Speaker 3:Oh, it's $1 million in IRAs, but it's not real money. Spendable money is at most 600,000.
Speaker 2:Yeah, and that's something we've got to figure out. How we deal with that. Sure, and so you know understanding what you need to spend, understanding what you're going to do, but how you're going to take your assets that you own. Now you know why you own them at this point. How are you going to take those and turn those into income and what's it going to cost to do it?
Speaker 2:Just in terms of taxes, if you're listening to this and if you're not careful, taxes are going to be the number one expense in your retirement. That stinks, I mean. It would shock people, I think, how much if they stay on the current plan you know the deferred delay plan how much they'll end up paying in taxes. So, on one hand, you know most advisors that don't do tax planning will go look, you're not going to run out of money, just take your RMDs, don't worry about it. So what's the answer? Well, because you're not going to run out of money, don't worry about it. Wow, that might work right, but this is not good advice. I don't think it's good advice either.
Speaker 2:Let's rephrase it. Let's say you got 2 million bucks in IRAs. You're never going to spend it. Great, no big deal, you don't have to worry about running out of money. Fine, ok, so maybe you do. Ok, let me rephrase it to you you probably, over the next 20 years and we could get the exact numbers you're probably going to pay between $2 and $4 million in taxes on that $2 million in IRAs, because the account's going to grow and you're going to be forced to take money that you don't need to spend, and that money that you take out from those IRAs is at your highest marginal bracket. Oh, by the way, in 2026, taxes are going up, unless Congress gets excited, and then they might really go up. So you might not care that you're not going to run out of money and OK, the taxes are the taxes. But when you find out that you might be paying $3, $4, $5, $6 million in taxes over the rest of your life, is that a problem we're solving?
Speaker 3:That's less money going to the next generation, yeah, or?
Speaker 1:charity that you care about.
Speaker 3:Or charity.
Speaker 2:Or your own retirement. If you want the last check to bounce, great, let's quick cut and big checks to the IRS, right. So these are things you need to understand what your lifetime tax liability is going to be. Another one, this one you're going to love Todd, this is number. I don't know what number it is. That's fine. What's going to happen when I'm no longer here? This is one that everybody needs to ask sooner rather than later, whether you're getting ready for a time or not.
Speaker 3:That's a hard thought. It really is I deal with that every day with estate planning. And that's a hard thought for people. They don't want to think about them not being here.
Speaker 2:But it's going to happen. If you can just hang through for just a second with us, let that idea, let that question hang in your mind for just a second. It's not fun to think about it, but if you do, you can probably get what you want. Probably what you want to happen can happen if you take a little bit of action.
Speaker 3:Yeah. Would you give your 10-year-old grandchild his inheritance on his 18th birthday? No, absolutely not. Well then, if you don't do something, that's what's going to happen. Best case scenario. Best case scenario, yeah, if the person who does have it before they turn 18 doesn't spend it all. So, yeah, I mean, what do you want to do? What do you want to see happen when you're gone? We can put some parameters on that. We can put some guardrails up so that exactly what you want to see happen will happen.
Speaker 2:And if you're somebody who is interested in leaving a legacy, I want to challenge the language there just a little bit. Leaving a legacy is very passive, isn't it? What if you created a legacy? Ooh, what if you were intentional about that?
Speaker 3:Yeah.
Speaker 2:If you want to give money to the kids or the grandkids, what if you did it now and you got to help them spend it well? What if you got to enjoy their use of it? Would that be more meaningful Too? I think for a lot of people it would, and that's possible, and then in a lot of ways, it's probably good planning, yeah. So the reason I just say hey, let's change that language a little bit is because I want to build in this idea of being intentional about this, because if you're intentional about it, you're much more likely to succeed with what you want.
Speaker 3:Interesting.
Speaker 2:Otherwise it might just happen. But it might, it might not. Interesting so these are things that could be a whole podcast on it?
Speaker 3:I don't know about that.
Speaker 2:There's so much.
Speaker 3:Rather than leaving a legacy, let's create a legacy Be intentional.
Speaker 2:That's the headline of everything we're talking about. Just be a little bit intentional and your life is very likely to be much better. If you don't know what you want, it's hard to design a plan to get it. So we're talking about some work here that a lot of people don't do. They just go about life on autopilot. But if you don't want that to be you and you want to enjoy your time and use it well, these are good things to think about. Good idea.
Speaker 1:Good question.
Speaker 2:Another one is what am I going to do about health care? And then, really, the final one that we'll talk about, which is the second part of that, is how would I pay for long-term care? These are not necessarily fun things to think about, but these can be extraordinary expenses and these can blow up the rest of the plan if we're not careful. And so it's not like. These things are simple, sure.
Speaker 3:I mean what results in you going to a nursing home can come on very quickly. I mean, it's a car wreck, it's a stroke, it's missing the last step of the stairs and falling and hitting your head. You go from perfectly healthy to needing nursing home care in three seconds and we see it happen all the time. And if you don't have something in place, we can do tremendous things. Okay, a married couple I can do some amazing things. We've got to rearrange stuff but I can do some amazing things on almost everybody.
Speaker 3:But it's different and it takes work and it takes a little bit of time, but it's yeah, we can do it. But if you plan ahead, it's gonna be so much better, we can do so much better. And so long-term care insurance. I was just thinking I want to do a whole show on long-term care insurance when it's actually needed. I see people who own it who really don't need it.
Speaker 2:We saw somebody there two ago.
Speaker 3:Yeah, I'm not anti-long-term care insurance, I'm anti-anything that you don't need. Okay, and there are times there's been a lot of times people come to see me and after I explain how Medicaid works and how we would look at their situation without long-term care insurance, it's actually pretty good and they drop their insurance. I'm not telling you to do that. I did not tell them to do that. I just said here's with it, here's without it, and they're like I think we can do without it. I was like okay.
Speaker 2:These are things that you could potentially have to spend money on in retirement, and so we want to be thoughtful about that.
Speaker 2:We want to give every dollar a job. Ultimately, we want to give it a job and a use-by date. That's a simple way to think about it, right? But if you give let's say it's $50,000, $200,000, a job of covering long-term care, that could have gone to something else had we been proactive. Yeah, it was great that you had long-term care insurance, potentially, but what else could that money have done for you? What other job could that have had? So you want to be proactive about giving a job. Cash is interesting. We say cash flow. Cash flows like liquid. Right, Water is going to fill the container that it gets. Cash is very similar. If you don't corral it, it's going to figure out a way out. It's going to figure out something else. It flows very simply through your fingers, yep.
Speaker 2:And so we have to discipline it a little bit. We've got to give money a job and a use-by date, and if your money has a job right now and it's not the job that it should be doing, be open to changing that. If we can put that money elsewhere and it serves a better purpose for you, why not Interesting? Yeah. So these are some fun things to think about. Whether you're planning to become financially independent early, whether you are getting ready for what would be considered more traditional retirement, when you're thinking about those big life changes, ask these questions, get the answers to these questions, and if you do, I truly believe the odds of your success are going to be way, way higher. And there's nothing wrong with being informed and empowered Like worst case scenario. You make better decisions. I mean, I don't know anybody who doesn't want to make better decisions. Right.
Speaker 3:I think we can summarize this very quickly as be intentional and be early.
Speaker 2:Yeah, early, or the better, plan early the time to hire a lot of professionals. But the time to hire a financial planner is six months to a year before you think you need them. The reason is, if we're just getting to know each other and you have to make big, multi-million dollar decisions and we're just getting to know each other, I can give you good advice. But I can give you great advice if I've known you for six months or a year before that, because I know how you think, I know what's important to you. We've had time to make these decisions.
Speaker 2:Rush decisions aren't typically good ones, yeah, so plan ahead, plan early, ask these questions. We can help you answer some of these on the financial side, absolutely, and that's the reason that we're talking about this. If you're not sure what your lifetime tax bill is gonna be, we have a report that we'll create for you. The report will tell you, if things go well and they continue on the path that they're on, what you could expect to pay, and we'll show you the opportunity that you have to potentially save money on taxes. Could be a couple hundred thousand, could be a couple million dollars. Yeah, if that's a problem we're solving, we can have a conversation about it.
Speaker 3:Well and this all goes back to the root of why we teamed up and we've created this business is because you bring a very unique specialty. I bring a unique specialty that affects our people and I can't I mean I could probably eventually acquire all of your knowledge and you could eventually acquire all of mine, but here today you sit down with both of us and, man, we've got you covered from legal, long-term care, all of those issues, and then finances. I mean we can provide a really comprehensive plan for you that incorporates everything. Some of my biggest frustrations is what I see, as an elder law attorney, needs to be done. The financial advisor that I've never met and probably never will meet because they won't meet with me, throws a fit about it, and they've known the financial advisor more than me and so they kinda trust them more just from being familiar with them, and I just see horrible decisions being made. I'm like I could have.
Speaker 2:No, this is not a good idea but that's what your financial got to do. We're talking about these decisions that are costing people hundreds of thousands of dollars Absolutely, and so having two experts that have different backgrounds, different fields that overlap, that covers a lot of blind spots so many. We can do such good planning together.
Speaker 3:Yeah, so that's why we do what we do and we would love for you to call us and give us a chance to just look at your stuff and see what we say, see if you like us and see if you like our plan, and please give us a call so you can reach us at 479-601-4119. That is Generations Legal Group, but Ian is here with us in the office and you can set up an initial visit with our people or you can jump straight to Ian If you're pretty sure it's straight financial stuff, whatever. Give us a call, We'll sit down with you, we'll meet and I'm pretty sure we can give you a good idea of what you need to be doing.
Speaker 2:Any final words. Yeah, no matter what we can tell you, we will create an objective opinion of the work that you've done up until this point. What I think a lot of folks get concerned about is, or get afraid of is let's say, you've had someone you've worked with for 25 years, an advisor you've worked with for 25 years. Changing that relationship can be tricky and feel really tricky. You may not have to change that relationship. We can work with existing advisors if that makes sense. We are extremely innovative in the way that we can work with people. I have clients who they manage their own investments or they have other folks that manage investments. I have some clients that I manage investments and do planning for them. We can do both of those, but it is absolutely worth half an hour of your time to make sure that you're not overpaying and that what you want to happen is gonna happen.
Speaker 3:Yeah, very well said, all right, thank y'all. Please subscribe, tell your friends about us, send this episode to your friends and please give us a call 4709-601-4119. Thanks.
Speaker 2:Talk to you next time.
Speaker 1:Thank you for joining us on Wealth for Generations. We hope today's insights inspire and guide you in your financial journey. Remember, the path to wealth and legacy is unique for each of us and we're here to help illuminate your way. Before we part, a quick reminder this podcast does not provide financial or legal advice. The content discussed is for informational purposes only. Please consult a financial planner or legal advisor for advice specific to your situation. Visit us at wwwwealth-the-number-4-generationscom for more resources and don't forget to subscribe to Wealth for Generations. Until next time, keep building your legacy, one decision at a time.
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