Secure Act 2.0

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Secure Act 2.0 Transcript: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
The following paid program is prerecorded and sponsored by Take Point Wealth Management on the Nature Coast of Florida. Take Point on retirement, a well-rounded show from a well-rounded team of experts leading you into retirement. Listen Saturday mornings for an hour of simple retirement advice from your friends at Take Point Wealth Management. Joy, the music brought to you from my friends and yours that take point, wealth management, as we get into the show, a lot to talk about to day, including secure and safe retirements. We also have a giveaway, a call to action to all our retirement warriors. If it's about annuities, bonds, stocks, national international, universal portfolios, we're going to talk about it here on this program. Take point on retirement, that stress free retirement and what it's all about. Our friends are in the studio once again from point wealth management offices up and down the nature coast within our listening area. It is time for Lead Advisor Retirement Planner Eric Arnett, certified public accountant Randy Woodruff, Team Take point wealth management ready to lead you into that safe, secure retirement. Good morning, gentlemen.

Erick Arnett:
Hey, good morning.

Randy Woodruff:
Good morning, everyone.

Producer:
A good information. A lot of important information. As always, give it to us.

Erick Arnett:
Yeah, too much information. We're sitting here trying to go through the notes for the show and it's like, we've got too many and we try to get it all into a one hour show. Seems like it's not enough time. I thought looking through notes and putting together the show today. I think it's pretty important, randy, that we talk about this new Secure Act 2.0 and how it could affect planning for retirement. The short answer is is plenty. So on today's show, I wanted to try to break down the Secure Act 2.0 and really talk about how to secure a strong retirement in light of this bill. So listen up. A lot of good points in here, things that I like and I don't like, but it definitely is going to impact our retirement warriors and those planning for retirement at this time. It's not clear just what will be in the final bill, but most agree will be passed in some form by the end of this year. Another part of this is the Ways and Means Committee draft of a major tax bill major tax bill. We don't like the sound of that.

Randy Woodruff:
No, it's interesting that we've been talking on this show for probably pretty much since we started doing the show about tax rates are on sale. Tax rates are going to go up. And here it is. It's it's coming to coming to pass

Erick Arnett:
And they're kind of sneaky about it, aren't they? Oh yeah. And we have said this probably a hundred times on the show here and even in the seminars that we do, I show a big, big chart who in our country holds the majority of the wealth right now? Mm hmm. Retirees and yep, even even folks that are getting ready to for in that baby boomer class close to 60 billion, it's even larger. But a lot of money being held roughly 60 billion just in retirement assets. So if you think about that for a second, it's a big part of the market, all in qualified money. Uncle Sam current administration's thinking, Well, where are we going to find money to support all these crazy, you know, trillions and trillions of dollars that they're wanting to pass and pump into the economy? Well, guess who they're coming after? They're going to come after where the pot of money is. They're not stupid. They sit there and they look, OK, where are the pots of money that we can go after and tap into? And so our retirement warriors are definitely on the hit list.

Randy Woodruff:
Yeah, that boomer generation has the largest accumulation of wealth ever in American history captured in that. I'll say that segment, and there are some bleed over, maybe a little bit beyond the boomer generation, a little bit into the generation after the Boomers. But that segment of population, those people that are starting to get in retirement or they're close to getting retirement or in retirement, they've got a huge amount of wealth built up. And like you said, these politicians to pay for all of these. We're hearing a three point five trillion dollars spending plan. What are the spending plans? And I'm hearing that as you read into the plan, there's provisions in there that allow them for them to spend additional monies to get it up to five to six trillion dollars or whatever triggers additional spending ability when you inherit money, typically unless you're inheriting an IRA. Everything else you inherit, the taxes are paid. If there's any inheritance tax before you actually get the money to the beneficiaries that received that, well, they they got something that's better than getting nothing. So it's easy to take from in these tax bills. There's a lot of targeted language to go after some of the like step up basis. You know, those things that step up basis is a huge way to transfer a lot of wealth that has been used for generations to help people pass wealth onto next generation or generations and get that step up in basis. So if they sell it at a future time, their gains a whole lot less well. If they target step up in basis, which they're talking about doing it. I had a conversation with my father going back probably 25 years ago, and there were some tax legislation going on.

Randy Woodruff:
And my dad's like, if you if you follow along day by day with all of the crazy proposals of some of these people put out there and their ideas, you'll get yourself confused and worked up into a frenzy. So I'm not saying it's not good to follow along, but some of these people like to get on TV, get on the radio and see who can throw out the most outlandish idea to get airtime. It's not. It's not really good to focus too much on what's going to happen until it's actually passed. Houses of Congress and actually the president signs it because it's. Actually in law, but until it gets in to becoming law, there's so much horse trading going on as it gets closer and closer to if they've set a deadline to pass a bill that you can get yourself all wonder what is reality so the taxes and the accumulation of wealth in the boomer generation. And that is something that they're going to be targeting because the boomers have the by far the greatest amount of wealth in history built up in certain politicians. Certain elected officials in Congress and and other political entities want to grab that before it gets passed on to the next generation. So that's why we need to make sure our retirees have plan by that they take out. Currently, it's taking out tax efficient and the money that they want to lead the future generation they can generations. They can leave as much as they can to those. Well, yeah,

Erick Arnett:
And that's why on the show, we always and in our practice, we always preach and try to get out in front of this issue. We talk about Roth IRA the utilization of Roth Roth conversions. We had some clients and great example, a couple of hundred thousand sitting in qualified money IRAs who are also concerned about the potential tax changes that are coming. You know, if you're 60 sixty five and you're going to live to ninety five, that's 30 years of taxation you have to worry about. So it's important for us to plan for this and make your portfolio your retirement plan is tax efficient as possible. What we're seeing and what I see every day in our practice is people coming in and unfortunately, nobody got to them early enough. But they're accumulating all this, all this money and qualified money in retirement plans. And Uncle Sam's just like, OK, yeah, bring it on. This is great and we got growth in the markets. So guess what? We're about a 30, 20, 30, 40 percent partner in your 401K and IRA. And to allow the government to have that kind of control over your money is impactful and it's something that we can definitely plan for and we have to get out in front of now. Definitely some major provisions that would change your retirement planning in this in this bill. So we urge folks to get a hold of us. Go to our website. Take Point Wealth Management. Go to take point on retirement. Radio.com hit that little button up in the right hand corner.

Erick Arnett:
Get a hold of us. Set an appointment. Call us whatever you do. Let's talk about it. How it's going to impact your retirement. Most likely, you're going to see higher taxes and much higher taxes in your lifetime. They have to get it from somewhere. So there's some pros and cons to this potential tax bill. So I wanted to try to hit some of the highlights and the lowlights of of of both of these proposals. One proposed legislation would start new employees. This is a good one, I think, automatically at a three percent contribution rate to their employer sponsored retirement plans. Contributions would also increase one percent per year, up to 10 percent. So allowing more contribution, which is great employers, might not be too thrilled about it. I mean, it would have to actually change the RSA laws, but typically an employer has the ability to implement whatever they want to match their employees with, and they're trying to stay here. You have to be three percent as the minimum, so that could be good for folks. However, there is some concern that the federal mandate on private employers to offer plans would actually violate the original rules. So even with opt out provisions, automatic enrollment programs have been shown to dramatically increase participation, which is good. Social Security is getting impacted. I may not even be around someday, who knows or drastically reduced. So we've got to have people have got to find ways to secure and save for their own retirement. One of the big things here, which came about in the 2019 Secure Act, is the ability to delay your required minimum distribution.

Erick Arnett:
So we know that in the 2019 Secure Act, you could now defer to age seventy two. You wouldn't have to take your distributions until 70 to the new secure act that's being proposed would further delay the age several years until it reaches age seventy five. For people who reach age 74 after December 31st of twenty thirty one. So with most retirees needing to withdraw our retirement savings for support in retirement, some have questioned whether the delayed age primarily only helps wealthier retirees. Although not included in this act, some proposals would even limit the tax benefits for very large retirement accounts, exceeding $5 million. So they are going to go after, I think, the wealthier folks and the larger retirement plans. Like I said, I think they're just licking their chops and seeing this as a big pot of money. The Ways and Means Bill proposes an increase in RMDs with large accounts and high income earners. So if individuals combine traditional IRA and Roth IRA and defined contribution, retirement account balances exceed 10 million at the end of the prior year and has taxable income above four thousand for single. And for 50 for married filing jointly, then there would be a new RMD that is generally 50 percent. Listen to this 50 percent of the aggregate amount above 10 million, so if you had 16 million, you would have three million RMD since 15 percent of the six million is over 10 million is three million. So they're trying to anyways, they want to hit those big earners and those big retirement accounts.

Erick Arnett:
We have some clients that have large amounts in retirement accounts. So this is this is impactful. So we definitely got to keep a close eye on this. That's going after the wealthy pay more to pay more taxes. So but it doesn't mean that that's not going to trickle down to everybody, for sure. So catch up contributions. The sheer secured two point zero would increase catch up contributions for those age sixty two to sixty four by allowing an additional ten thousand per year contributed to for one K and four or three B plans and an additional five thousand to simple IRAs. These sums would also be adjusted for inflation. You notice how they don't put any language in there about Roths. They want people to still pump money into those qualified plans because it's like it's like a tax trap. So that's why we preach Roth, Roth, Roth, Roth, Roth life insurance, whole life. Wait, there's better ways to sock money away to get great returns, secure your money and also be able to draw that money out tax free throughout your retirement years so you can't just sit on the sidelines any longer. Folks, if you're out there listening and you've been thinking about doing something and getting in and seeing somebody and talking about some of these strategies that we've talked about on the radio for quite some time, it's now now's the time to act because this stuff is going to start getting implemented. It's not just smoking mirrors anymore,

Randy Woodruff:
And we've talked about the Roth IRA repeatedly on the show, and it's such a great tool. And now with some of these proposals in terms of what they're looking to do for inheritance and how they're going to limit step up in basis and potentially bring down the amount someone can pass away with in their estate before there's a tax liability at the estate level. Not touching the IRAS is a way to transfer wealth, so more and more so now than ever, the Roth IRA is a great way to transfer wealth to future generations. Tax free depends on what gets passed, and it's going to become more and more important than ever to really consider getting as much of your wealth into a Roth as you can. In fact, I spoke with the client. We're doing a big Roth conversion for them. They've got a significant amount of seven figure amount in their IRA, and we're continuing to move some over talking about as part of how they live out their retirement years. They're not going to touch their Roth at all. They don't need to touch their Roth, though, so that will entirely pass to their children. As we talked about in the show that Roth can grow in the kid's name until they retire, so who knows what it will be worth when the kids actually retire and start drawing upon? You've got, you know, potentially 30, 40 years of growth that can happen as well. And all that's tax free. So, you know, the Roth is and maybe the folks listening, you've heard us talk about the Roth before, but can't impress upon you enough how important it is to at least consider it.

Erick Arnett:
Yeah. And so lots more to talk about in our next segment. We've got to dove into this more. There's tons of information here, so stay tuned. Yeah.

Producer:
Secure Act 2.0. We've heard so much about it. We're hearing so much about it. We're going to hear more about it from our friends at Take Point Wealth Management there on top of it and all things to do with your retirement matter of fact, they're taking point on your stress free retirement. Give them a call today. Take Point Wealth Management (352) 616-0511 We're going to take a quick break here from our sponsor. Take Point Wealth Management, Google Home. Take Point Wealth. Check it out online. Take Point Wealth Management. We'll be back with Eric Arnett, Randy Woodruff. It's a call to order for all your retirement warriors after this. Eric Arnett is an investment adviser, representative of Retirement Wealth Advisors LLC, an SEC registered advisor, Point Wealth Management. This station and RWA are not affiliated exposure to ideas and financial vehicles discussed. It should not be considered investment advice or recommendation to buy or sell any financial vehicle. Any comments regarding safe and secure investments in guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by retirement wealth advisors.

Producer:
Look at that, we are back and so are you. Thanks for being with us. It's an hour long program called Take Point on Retirement from Take Point Wealth Management Services up and down the nature coast within our listening area. They can't help you if you don't reach out to them. (352) 616-0511 I'm GW, my friends. Eric Arnett, lead advisor, retirement planner and certified public accountant Randy Woodruff are here in our studios each and every weekend to give you all the updates, all the information and important stuff that you need to know to reach your goals in retirement. It's the stress free retirement. We've got a call to order for all you retirement warriors out there, call to action, take point will do that and more. Just rely on them, give them a call, take point, wealth management. And of course, we've got a giveaway we're going to talk about as well. So hang on, we've got more on that with Randy and Eric.

Erick Arnett:
So yeah, so the giveaway is, you know, throughout we've put together this really nice six to eight page report. And, you know, we've been talking about this stuff for a long time. So now we have it actually in a deliverable that report that folks can request and will email it out to them. We'll mail it to them. They can swing by and grab it. Whatever you can get a hold of us on our website, you can call us or email us to you, but it's called the bond replacement strategy. It's tremendous report. It's really well done as great comparisons. And really overall, what it is showing you is based right now. If you have bonds anywhere in your portfolio, it's really going to be a drag. And with interest rates so low, plus you're probably paying fees on it that you don't need to. Even if you have a mutual fund and they hold bonds or you have a bond mutual fund in your portfolio, you're holding vanguard funds. You probably have bonds in there. They're dragging on your portfolio, you're paying fees on them, they're not getting any return. And as interest rates increase, they'll actually lose value.

Erick Arnett:
And so we did a study and found that back 30 years and indexed annuities far outpace and crushed the bonds. And we'll show you that in those details in that report. So reach out to us. Click that little button up in the upper right hand corner of our website and go ahead and request that request a chat with me. Chat with Randy. Email us. However, it is that you like to communicate. Let's do it because much things that are so impactful here coming forward so so getting back to that secure 2.0 act looks like kind of a highlight. I guess a good thing. Student loan borrowers or employers who have employees who need to pay off student loans would be able to match that student loan payment with matching contributions to the employees retirement account up to a percentage of the employee's comp.. So instead of the employee maybe wanting to get compensation or matching for his 401k, he could say, Hey, I'd rather have that pay off my student loans and the employer would still get the tax deduction for contributing to that. So I think that's kind of cool. Yeah.

Producer:
Well, then we're talking about forgiveness, though at one point

Erick Arnett:
Free junior college loan forgiveness in certain situations based on income and things like that, those are still on the table and probably hidden pork and all of these bills and things that they're trying to get through here. The politicians are playing hardball with each other up there in Washington. This is an interesting one, folks. Listen to this one. This is a conservative radio talk show, right? It is. Ok, so interesting. You know, here's a here's a long reach, Uncle Sam. And if this isn't socialism or communism, I don't know what. But retirement plan lost and found the secure 2.0 would provide that where the owners of retirement plans cannot be located, the accounts will be maintained by the federal government until the owners can be found. So they're essentially going to start confiscating retirement funds if the owner can't be found. Isn't that interesting? I'm pretty sure there's a thing called probate, and if the owner can't be found, then the judge decides based on lineal descendants and family where that money should go. So how in the heck does Uncle Sam figure? Maybe I'm not understanding this, but this. This is an interesting one and a scary one. Not, not at all. Pleased by that little interesting tidbit there that we dug out of there.

Randy Woodruff:
I'm laughing along with you about that provision, but just the fact that they call this the secure act. I'm not. So what? I'm not so sure. So sure. I feel too secure with it.

Erick Arnett:
Well, yeah, the politicians are securing their their jobs and benefits, for sure, but interesting, interesting. So there has been some concern expressed that the provision only offers minimal earnings while held by the government, and it will be better to let the loss plans being maintained by private entities traditionally handling investments. So I'm pretty sure that the wealth management divisions and the financial companies are probably a lot better equipped and knowledgeable to handle these, you know, lost 401ks and IRAs than. Then the government probably just want to steal from it like they did Social Security, who knows the ways and means proposal would do away with? Listen to this, folks. Backdoor Roth conversions. This is impactful, so they're looking to do away with that backdoor Roth conversion. So we know there are income limits to contribute to a Roth IRA. However, one way around this income limit was to do an after tax contribution to an IRA or a 401K and then convert this over to a Roth IRA. This has often been referred to as the back door off as it went around the income limits to get money into a Roth. Mm hmm. Moving forward, this new provision would essentially end the backdoor Roth IRA by disallowing any after tax contributions to be converted or rolled into Roth accounts or Roth IRAs. So the provision would kick in for the tax year of twenty twenty two.

Erick Arnett:
So if passed, it would it would give people some opportunity to convert these after tax contributions contributions by the end of twenty twenty one into a Roth IRA. So, you know, we've been preaching this stuff for years and and we've been predicting that this was going to happen. And sure enough, here we are. We're coming up to, you know, this kind of stuff starting to really show its ugly head. So it's important to recognize that it would not end all conversions as tax deferred dollars could still be converted into a Roth IRA. So moving forward, that's kind of concerning to me. So I don't want this to be confused with if you have an IRA or for one K, once you leave your employer, you still can convert all of that regardless of income limits to a Roth. And of course, Uncle Sam doesn't mind you doing that because you he'll get his tax when you do that. But think about it, if you do it at today's current tax rates and you get that money moved over to the Roth and the Roth gets all that tax deferred growth, and then you avoid the taxes in your seventies and then you can pass that money to your heirs tax free. The Roth is still extremely, extremely important long term planning tool.

Randy Woodruff:
I'm going to go out on a limb here and this is totally share an opinion that I know that, yeah, they're going out on a limb here. But as we've talked on this show time and time again about, you know, taxes and and the need for the government to probably increase taxes. And we're seeing that now. We've talked on the show time and time again about how great the Roth is. You probably need to begin thinking about sooner rather than later converting your money over to a Roth because they're starting to shut down with this legislation. They're trying to pass now a lot of great ways to transfer wealth to future generations. As I mentioned earlier, step up in basis and other things. Don't be so sure that they will come after Roth IRA.

Erick Arnett:
This might be the next thing to come after.

Randy Woodruff:
So, yeah, so if you're thinking about doing a Roth, then you've heard us talk about time and time again, you probably need to get in and make an appointment and talk about how this can be an effective retirement tool for you and also wait to save money and pass wealth to future generations sooner rather than later. Because you never want to assume that that this is going to, that this Roth will be around forever as a tool to do that.

Erick Arnett:
Yeah, exactly. Just like I don't really think they'd ever go after that back door Roth conversion. But there again, that's typically high income, high earners. There's a there's an all out assault on those folks right now. If you're in that top earning over four hundred thousand, they're coming after you and everything that you saved and worked hard for, they feel as though that's just that's where the well, I mean, hey, if they're looking for a pocket to dig into, that's where where a lot of money is, you know, it's that's where they got to go. So in the next segment, I want to talk about if we often hear, if I only knew now what I didn't know then, right? It's something we often hear from those just getting into retirement. So when we come back, I want to go over some of the most common regrets when it comes to saving for retirement.

Producer:
No regrets, only rewards with your retirement through take point wealth management. It's a show called Take Point on Retirement. Your friends and mine here in the Nature Coast are ready and standing by to serve you. All you got to do is reach out to them. (352) 616-0511 is the phone number. Check it out online. Google Take Point Wealth It'll bring you to Eric Arnett, Lead Advisor, Retirement Planner, and Randy Woodruff. Part of that a local team here ready to assist you to that stress free retirement. All you got to do is ask and they've got that, of course, take point, a blueprint on retirement, standing by and waiting for you, as well as fifteen hundred dollar value, folks. No obligation. Just ask about that. They'll sit down with you, get all that straight so you don't have to worry about your golden years. We'll be back with a program called Take Point on retirement, aren't you? Every weekend here on the fine folks at Take Point Wealth Management after this? Past performance is not indicative of future results, which may vary the value of investments in the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Eric Arnett is an investment adviser, representative of Retirement Wealth Advisors LLC, an SEC registered advisor.

Producer:
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Producer:
Eric Arnett is an Investment Advisor Representative of Retirement Wealth Advisors LLC, an SEC registered advisor for Wealth Management. This station and RWA are not affiliated. Exposure to ideas and financial vehicles discussed should not be considered investment advice or recommendation to buy or sell any financial vehicle. Any comments regarding safe and secure investments in guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by retirement wealth advisors. Well, about halfway through the show, an hour, Chuck, full of the information you deserve and need for your stress free retirement brought to you from my friends and yours and take point. Wealth Management, a show called Take Point on retirement each and every weekend right here at this station. Only at this time as we continue with Lead Advisor Retirement Planner Eric Arnett, Randy Woodruff, part of that well-rounded team of professionals standing by to assist you into your golden years. A lot of mistakes have been made over the past the most common regrets when it comes to saving for retirement. Let's talk about that and more as we continue.

Erick Arnett:
Yeah, so we're super, super smart when we have hindsight, right?

Randy Woodruff:
Yeah, great.

Erick Arnett:
I always love it when clients my clients tell me a year later, Hey, we should have done or we could have done that one. Get a little smarter. Yeah. Well, if I had crystal balls and we'd all be in better shape anyways. But yeah, hindsight's 20 20. And so I think this is kind of a cool article that we pulled here, Poland retirees and some of the top regrets. And so one way that we help our folks is really is the, you know, I've been doing this two years, Randi, you've been doing it. You know, I think twenty seven years, so you know, 50 some odd years combined experience and really what we do a lot of times is we just implement things that we've seen other people, mistakes being made. And so we just try to help people avoid making mistakes. But a big one here, obviously very obvious, of course, not saving enough money, right? So so I think everybody, probably in one way or another, might have that kind of regret. But not saving enough money for retirement often goes hand in hand with not starting earlier with your savings. So you know the earlier you start, the better you'll be. Even if you start a little late, you can still have enough to get through retirement, and the key is just to start and never stop. So we are a wealth management firm. Take point wealth management. We work typically with high net worth clients, but when they bring a family member forward like a young person and say, Hey, can you know, can you help my child or friend or cousin or whatever get started? I love getting to that young person.

Erick Arnett:
I can think of a client offhand right now. They just referred their daughter to me, and you know, she's starting out as a as a nurse. And so and she's making good money. And so we started out a retirement plan for her, and she's only in her 20s and I thought, that is awesome, right? And I showed her the power that compounding. And so she's excited about saving. We got our set up with our four one K. We've got to set up with a Roth IRA. All that good stuff. But you know, obviously the younger you start, the better. That's one one regret that we probably all have and and and it's never too late. Right. So the I think the other key is just to start and to never stop. I'm 50 years old and, you know, I plan on saving for retirement all the way up till the day I stop working, which maybe never I don't know, you know, so I have a lot of friends and colleagues in this business that are still chugging along on it. Seventy five, eighty years old. So who knows? But, you know, just keep on save and do your best. You know, it's never too late.

Producer:
Let's take a pause for station identification. You're listening to ninety nine point nine FM JB Homosassa.

Erick Arnett:
One thing not making those catch up contributions, I think that's important thing that a lot of folks miss. A catch up contribution is a provision that allows people ages 50 and older over to contribute extra money to their retirement accounts each year to catch up on their savings. So great, you know, little tool that's out there for folks to get on top of things. The standard contribution for a four one K in twenty twenty one is nineteen thousand five hundred, while the catch up clause allows for an additional six thousand five hundred in savings for those ages 15 and above for a total contribution of twenty five thousand. So that's pretty good. If you can put twenty five grand away, you're going to be in good shape. So for a Roth IRA, the standard contribution is 6000, but the catch up limit is seven thousand. So I like those catch ups. And so if you're 50 years old out there, let's get caught up. Let's do

Randy Woodruff:
It. I think that most people, if they've actually sat down and done some retirement planning and they've been honest with themselves in terms of where they're at today, in terms of what they have and where they'd like to be in retirement, I think a lot of people need to do those catch up provisions.

Erick Arnett:
I mean, this

Randy Woodruff:
Is you can't miss those you

Erick Arnett:
Have yeah, you have to do those because these catch up contributions that you're now allowed to make at 50 and above are the most useful to those who did not save enough for retirement while they were younger. And we know how hard it is when you're younger, you know, just starting out. I mean, you're living pay. Check the paycheck, then you have kids and all their activities. I get it, it's not easy. Heck, we have folks still come to our office that are in their late 40s or early 50s, and I haven't saved a dime for retirement. What am I going to do? And it's typically because, you know, we're giving all our money away to our kids and college and all this kind of stuff. And I just look at them and say, Look, it's it's not too late, like, let's get going. Let's like, let's take advantage of every loophole that's out there and and let's start saving and tighten the belt, get a budget, you know, and let's do it because it's never too late, even if you think about it. If you saved one hundred grand and that doubled in 10 years, that's 200 grand. I mean that two hundred thousand dollars is going to be pretty helpful to you 10 years down the road. You know, rising health care costs, inflation. I mean, all these things that are taxes, yeah, taxes, all these things that are coming so important, it really important to get going on those catch ups.

Randy Woodruff:
On a little side note, when things I've mentioned to clients, you're not

Erick Arnett:
Going on a limb again.

Randy Woodruff:
No, no, no, no, no. I, you know, if I have live this time and when he's I mentioned declines to is, you know, some people are in careers where when they get to be a certain age like they can't work after a certain age because either what they do. Age limits the amount, you know, whatever. So I've talked to some of my clients about maybe thinking about another career, you know, as you, as you, if you if you started late, save for retirement and you're like, Hey, I've got to save a lot of money and I may not get there and I've got to be based on my age based on what I do for a living. I can't really work physically past a certain age. You may want to start thinking about having a second career when you're getting retirement because you, you might need that. Yeah, absolutely. As you're planning your retirement, as you plan to get there. You know, just don't think that once you reach a certain age that you know you're done, maybe think about a second career, a side job or something just to supplement your income in retirement.

Erick Arnett:
Yeah. And there's so many questions to be answered in that actual plan or context. And that's why we offer to our listeners and retirement orders that free, stress free retirement plan that encompasses everything. When do I take my Social Security? How will taxes impact my retirement? Should I? What kind of strategies could I be implementing to make my portfolio more tax efficient, more efficient, more risk adverse? You know, all these types of things? I mean, hey, if we can get you from point A to point B with lower risk and solid returns, then why not do that right? So all these questions can be answered in your free $1500 value retirement plan that we, we put together for you. And it's all encompassing full blown plan and it's yours to implement or not implement after it's all done. There's no there's no obligation. And when I say free, I mean free. And it's funny because most people come in my office and we do the plan like, Well, how much do I owe you for all this? I'm like, You don't owe me anything, you know, this is yours to take with you, and we certainly hope that you can implement it. That's just a free gift to our listeners and folks that call in.

Randy Woodruff:
So, you know, one of the things that I've noticed the most when we do these plans for clients is how much risk clients have in their portfolio and don't even realize it or how they think they're diversified because they hold, you know, different holdings like mutual funds over different fund companies. I mean, you dig into the funds, they're actually all the same, if not for nothing else. Just come in and let us measure your risk. Let us show how. Let us show you how you might think you're diversified, but you're really not that right. There is worth the time and effort, and

Erick Arnett:
We put that stress test on the plan. So we throw a thousand different scenarios at the plan and good markets, bad markets, higher rates, lower rates, inflation deflation like market crashes, great markets. We throw a thousand scenarios and combinations thereof at your portfolio and it's going to spit out a probability of success. It's going to show us where the weaknesses are, how we can improve, how we can strengthen it. So you don't have to make any changes. If there's no changes to be made, then that's fine. But if we can somehow implement changes that improve the plan, if we can do that for you, then why wouldn't you do it? And we say this all the time, what you were doing five years ago, 10 years ago. I don't even care what you were doing a year ago is not necessarily what's best going forward. So it may be time to make some changes and implement some new strategies, all these different things that are going on out there in this environment right now.

Randy Woodruff:
So one of the things I mentioned on the last show, I think it was, is that people have been kind of in this comfort zone of retirement. They've worked at a job where they've had access to forward and KS. And so there isn't any really planning process that yet. You get hired, you go through the onboarding process and you see it with HR and you pick some retirement funds to invest in and then you pretty much don't really do much with it after the fact. You just keep putting money out of your paycheck and keeps going into the market. You only have any control over it. You get limited funds. Limited options. That's not that doesn't have to be the case, you need to take a different approach as you start getting to retirement or in retirement, you need to be actively managing your portfolio to Eric's point. Don't care what you were doing 10 years ago, five years ago or last year, you know, things are changing and things are changing rapidly and you need to have a nimble portfolio so you can be responsive to what's going on in the market.

Erick Arnett:
Think about how dynamic everything is out there and all the changes. So if your portfolio is in dynamic as well and also moving with the changes, we're implementing changes and strategies all the time throughout the market cycle in our portfolios and our and our retirement plan. So this is a big regret and one of the number one regrets, and it's actually one of my biggest regrets for my clients and my prospects and often everybody that comes in. I see the same thing over and over again, and it's not diversifying their method of saving money. So there are different ways to go about saving for retirement. Most people are enrolled in that traditional four one K plan through their employer where they contribute that percentage of their paycheck before taxes are withheld with a four one K. You only pay taxes on withdrawals made in retirement. A Roth IRA, on the other hand, allows you to make after tax contributions to an account so you won't pay taxes on any withdrawals made in retirement. The difference in tax obligation really sets these two saving vehicles apart, and while having one is better than having none at all, it's best to diversify when you save and avoid putting all your money in just one basket. Opening a traditional IRA or a Roth IRA is actually quicker than you might think because it's not an employer sponsored account, you can set one up.

Erick Arnett:
Even if you're self-employed or don't work full time, your advisor can help you get the account set up and growing, so we can certainly set those up for you within five minutes or so and get you going. That's just it. I mean, unfortunately, most people were never encouraged or educated about the Roth early on, so all that money was growing and dumped in the 401K, and now they have this big tax bubble. So we like to see our clients diversify that methodist savings, which is going to help out a great deal in retirement. So think about it too. The big thing is with a 401k or a traditional IRA when you turn 70 to the government is going to make you start taking withdrawals. Are that whether you want to or not? So they can tax it, which is therefore going to also move your taxes even higher and all your other income? And so if we can find ways to avoid that down the road, then we have to do that and get on top of it. So what about this one retiring sooner rather than later? Around fifty one percent of Americans retire between the ages of sixty one and sixty five, though the average retirement age can vary by state because of different factors, such as cost of living.

Erick Arnett:
A few years may not seem like they make a difference. The fact is that those few years can provide a little extra financial security, and it can help you avoid running out of money and having to come out of retirement. So when it comes to figuring out when you should retire, it helps to have an idea of what your needs in retirement will be right. And it's interesting. Every time I sit down with folks, I say, OK, let's put this retirement plan together, or let's start talking about it. What's your budget? You know, how much do you spend per month? You know, what's it going to cost for you to live in retirement? And the record stops like and they look at each other and oh, we don't know. We don't haven't done that. We don't have a budget. We don't a budget, a budget. What's that? I don't have any idea what things are going to look like in retirement. Well, now is the time to get serious and to really think about that, because that's probably one of the most important things is what you're spending and what you're going to be spending and how and how we're going to maintain your lifestyle and what those costs each year are going to be in order to maintain that lifestyle.

Randy Woodruff:
So what do we say? Pretty much every show a failure to a failure to plan to plan to fail. And that's the same thing with a budget, you know, do a budget. That's part of that plan.

Erick Arnett:
This is interesting. Only 19 percent of workers actually have a written strategy for affording retirement. So 80 percent of America just isn't paying attention to it. I guarantee you if folks, one day there will be a time that comes where you're going to have to stop working and you're no longer going to be, or you might not be able to work for whatever reason. So not having that plan in place. And that's another one of the number one regrets is not having that plan in place.

Randy Woodruff:
So there's an expression I've heard often and that's it's what gets measured, gets done. You know, so if you have a written plan for retirement, you're monitoring on a regular basis. You have a written down. You have goals. You have plans. If you're ever if you're measuring it, you're working towards it, it will get done. Or at least you'll get close to getting done. You don't have any plan if you're not monitoring it and not paying attention to it. You're not going to achieve the. I'll say the stress free retirement that you deserve.

Erick Arnett:
So the number one take away from this is just, hey, get started and start as early as you can. And if you haven't started, it's not too late to start. Take advantage of those employer sponsored plans by all means. Also, if if your employer sponsored plan has a Roth IRA option, go ahead and take part in that as well. Or if not, get one open on the side on your own so you can diversify those saving methods. Really get out there and start talking about these things budgets, retirement plans and what that means to your stress free retirement. And what's it going to look like for you and your spouse or you as an individual? So let's let's get let's get going on that planning.

Producer:
Yeah, take some time to consider what's important to you and how you see those things fitting into your life when you're retired. And working with an independent advisor, of course, can help you make sure you continue on the right track to retirement. That's why take point wealth management is here in our studios each and every weekend. Take advantage of Take Point Wealth Management Fiduciary Services Up and down the Nature Coast (352) 616-0511 We're going to wrap up after a short break. We'll be back after this, folks. If you're wondering who a retirement warrior is it somebody who wants to enjoy a safe retirement, a tax efficient fee, efficient and market efficient portfolio? They want to keep growing their money. They don't want to keep cannibalizing their assets, somehow run out of money and end up with just Social Security and family to support them. Running out of money is actually the number one fear of retirees even more than death. By the way, if you're being asked to just hang in there with your investments, then I would encourage you to do more than that. Plan your work and work your plan. Do everything you can to understand the risks you're taking with your current portfolio. Let take point. Wealth management help you. They're available to our listeners with a free consultation about your retirement future.

Producer:
They are fiduciaries, by the way. They've got to put your needs ahead of their own, so schedule an appointment online at take point on retirement. (352) 616-0511 two point Wealth Management on the Nature Coast Standing by to assist you get started on your retirement future. Become that take point retirement warrior today for your future. Ok, we have returned, and I'm glad you're still with us because we're going to wrap up this program this weekend, of course, take point on retirement brought to you by Take Point, Wealth Management heard every weekend at this time and only on this station. So as we wrap up, remember to write down this number (352) 616-0511 you're going to want to call take point wealth management up and down the nature coast. They'll sit down with you. Yeah, actual people. They'll actually sit down with you. Believe it or not, they're right here on the nature coast and ready to assist you. (352) 616-0511 It's all the important information you need. You require and desire that's important to you. That, of course, stress free retirement. That's what we're talking about once again, Lead Advisor Retirement Planner Eric Arnett and Randy Woodruff.

Erick Arnett:
So I think it's important to talk about the market we've been talking about for quite a while that volatility was eventually going to pick up here. And sure enough, in September, it will probably continue in here to the rest of the year. So and I'm sure that folks out there listening have been experiencing the same in their portfolios or four one KS or IRAs. So once you see volatility, that usually is a sign of uncertainty. It's usually a sign that potentially the market is poised for a correction or there's no clear direction. It's more important than ever for our retirees and even our pre-retirees in those getting close to retirement, but to make sure your portfolio is protected. So I want to talk about three steps that you can take now to make sure your portfolio is protected if you're in your late fifties or early sixties. You may look back at steps you take now to protect your retirement portfolios some of the best moves you've ever made. So let's take a look at these three steps to make sure the transition and retirement is a smooth one. So real important step one is begin creating the income now that you'll need in retirement. So use some of your growth portfolio to set up a safe, stable income producing foundation for your portfolio. For most people, what you'll be receiving from Social Security is not going to be enough, right? So you'll have a gap between what's coming in and what you need to support your lifestyle.

Erick Arnett:
So we call this the income gap, and that's the very first thing that we solve for when we sit down with folks, and that's why we harp on it. We've harped on it about today's show. What is your budget? What are your expenses right now? What are your expenses going to be like in retirement? The very first question I asked folks when they sit down with me is What does retirement look like to you? What are you doing in retirement? We've got to figure out what that income gap is going to be. So if you have Social Security, maybe you're fortunate enough to have a pension when you add those two together. Those are the only two guaranteed, you know, income streams that you're going to have throughout your retirement. If your expenses are not covered by that guaranteed income stream, then first and foremost, we need to make changes now before the market gets too crazy to secure that income and protect that income gap in the future. So that's the number one thing we solve for now. You know, the market's gone straight up for 12 years, and now we're seeing it peak and we're seeing the volatility. And listen, folks, we've had the benefit of a huge, you know, opportunity where the governments and the world governments through all everything they could throw at this market to stimulate it.

Erick Arnett:
And it's had a nice run, but at some point in time, it's going to run out of gas. And so if you're if you're in your fifties, late fifties, early 60s, you're getting ready to retire or you're close to retirement. We've got to secure that income gap and we can build a pension for you and put your own pension in place. So now's a great time to reallocate a portion of your portfolio from growth into income. Not only will you reduce your portfolio's risk, but when the income you have in retirement will be that much more powerful if you start now and not at the last minute. So we did this for a gentleman, not to too long ago, and it was awesome. I met with him like ten years ago. We put together strategy and then boom, I show that we sat down and said, OK, now he's ready to retire and draw income. And he was like, Wow, I can't believe that that, you know, I have the ability to draw that much income now. So we've got to put that guaranteed another story. If if we need another source of guaranteed income, we've got to act now, we've got to get that in place now.

Randy Woodruff:
And one of the things I see more and more is just reiterating. Most everybody knows is, you know, pensions are going to say they're a thing of the past, but they're definitely not as common as they used to be, you know, starting in probably the 80s and 90s, while your larger companies, pretty much all your companies now no longer offer a pension, they offer a four one K plan. So it's up to you, the listener. Or to make sure you you save enough money so you can build this guaranteed income because the pension that you see in your parents and your grandparents getting from these larger companies, that's no longer available to us anymore. So more and more the responsibility is putting back has been put back on you to save for your own retirement. What it was generations ago. So it's more important than ever that you you know this you pay attention to it and you plan for it.

Erick Arnett:
Yeah, big time. Step two Once you have gotten your income in place, step two is manage the balance of your growth portfolio for protected growth. I say again, protected growth, the key word protected. So there's a difference between a 30 year old's growth portfolio and that of someone five to 10 years from retirement, right? So for a 30 year old who experienced a large loss, it's upsetting, but they have 20 years to make it up, right? So if you're in your late fifties or early sixties, you don't have 20 years to come back. A big loss now will affect the quality of your life and retirement. So this is key. And I love to send this chart in this study to whoever emails me or reaches out to me. If you experience a loss in your portfolio in the first five years of retirement. It's massively impactful to your overall retirement well-being in your latter years, so it's very important to get this right out of the box and to protect your portfolio from large losses. I mean, I'm talking even a 10 percent decline if you're pulling money out at the same time, think of how devastating that can be. So it's really important if you have losses later on in retirement, it's not as impactful as if you take those losses. If you if we have some market corrections, think about if the market goes down 10 percent. If your portfolio goes down 10 percent, you've now got to make twenty two percent to get back.

Erick Arnett:
If you go down 30 percent, you've got to make 60 percent to get back. So very difficult to do. Now is the time to manage your portfolio first to protect and then for growth. Ironically, you may experience some of the best returns of your life. Not having to dig into your portfolio out of huge holes like 2008 2001 2002 can do wonders for your overall return. Don't think that we can't have another 08 02 there looming. So if you're in your fifties, early 60s and you're close to retirement, we've got to get this right now. I've got to get a plan in place for you. Protect. Protect your portfolio. Get your income secured. And most importantly, right now, we have to draw a line in the sand. Step three is when you sit down with us, we are going to draw a line in the sand. You can decide right now what the maximum amount you are willing to lose if the markets continue to go downward. This is not market timing. This is simply taking responsibility for your own future and not relying on the opinion of the next talking head to appear on CNBC. You decide now how much more of your portfolio you're willing to risk and whether it's five percent, 10 percent or more. Write that number down. Ok. And so if you have a $500000 portfolio and you lose 10 percent, write down $50000 and look at that, how long did it take you to save that money? Mm hmm.

Erick Arnett:
And guess what? You know, a lot of you have been given a gift over the last five to 10 years with a good market. Remember, prior to those five to 10 years, like 08 and oh three, oh oh oh, twenty one ninety nine. My first few years in this business, we didn't. We had three consecutive negative down markets. Mm hmm. And think about if you're retiring then and you didn't have things right and you lost money, you were you were cooked, your retirement was cooked. That was a big mistake. I saw folks make 10, 15, 20 years ago. I don't want to see people make that same mistake. It's now time to rein it in. Take that risk off the table and secure that income and also protect the portfolio that you currently have. If your portfolio goes down to that point, you get out. Right. So if you go down fifty thousand, you get out getting back in as easy. So and I'm not talking about market timing, but this is important. This isn't like an investor that just has a couple of hundred grand. They're going for growth like this is retirement assets. We can't risk these retirement as we can't take any risk with those right now.

Randy Woodruff:
So it goes back to what I was saying earlier. People are just used to putting their money in their 401k and letting it ride, letting it roll with the market's not actively managing it. And what you're talking about is actively managing it. We can't stress enough how important it is as you near retirement in retirement, that you begin to work with professionals that are going to help you actively manage your portfolio. You don't have to ride the waves down or, you know, ride the slope down. As Eric mentioned, you can get out and get back in when the time is right.

Erick Arnett:
Yeah, you've got I mean, think about this. You've got to protect what you've worked so hard the last 30 or 40 years to accumulate. You're far better off to risk missing out on maybe a five percent upturn from here than participating in the next 40 percent drawdown. Right. And I think people have kind of fallen asleep here because we've had some good years. And I'm not trying to scare folks. That's not what I'm here to do. I'm not about scare tactics. I'm just about being real and talking about it with retirees and pre-retirees. As you can't, you cannot take a 10 percent, a 20 percent hit. You just can't do it. So let's get let's get this plan in place. A solid plan. We call it the stress free retirement plan. Whether you're working with an independent adviser or a broker or whoever you're working with, it's time to get in and get this plan put together and get you on the right track to retirement. The portfolio that you had through your working years cannot be the same portfolio you're going to have in retirement. Exactly. Cannot be. Exactly. And I see it every day. Everybody is like, Well, it's worked for me, you know, in the past.

Erick Arnett:
So I'm just going to keep rolling with this. No, no, no wrong answer. Wrong answer, Paul. I got to say about that. It's important. That's so important. Can't lose money and and think about it. If you watch these markets right now are extremely volatile, so it's important. Volatility is a silent killer, down five. Got to make 10. Down 10. Got to make 20. It's hard to make up when you write those dollars down. So if you have a $500000 portfolio and you lost 10 percent, you're down 50 10 percent. You've got to make 20 percent back to give back to where you were when you lost. That's a big percentage uptick. It's hard to do in real dollars. It's even harder to do with these low interest rates. I was listening to the late, great bill gross and he was saying this was years ago that his experts and all his analysts were saying the next 10 years, there's going to be at least two to three sizable market corrections. So we need we need to we need to protect that big time.

Producer:
So past performance is not indicative of future results, which may vary. The value of investments in the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur.

Erick Arnett:
Give us a call, folks, and I'm going to leave it to GW to get all that info out there.

Producer:
I've got the phone number right here. (352) 616-0511 Take Point Wealth Management Check it out online. Take Point Wealth Management. It's a show called Take Point on Retirement. My friends are standing by and ready to assist you into that stress free retirement. Those golden years are supposed to be golden for a reason. Reach out to take point. Wealth management. No fear, no more losing sleep. Just call Take Point Wealth Management (352) 616-0511 and of course, Eric Arnett, Randy Woodruff or in our studio each and every weekend they pass on that important information. In the meantime, give them a call and reach out because it's so important to you, and then they're here to help. (352) 616-0511 We'll see you next week. God bless you. Have a great weekend. Information provided is not intended as tax or legal advice and should not be relied on. As such, you are encouraged to seek tax or legal advice from an independent professional.

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