TPWM 7-24-21.mp3: Audio automatically transcribed by Sonix

TPWM 7-24-21.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
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 leading you into retirement. Listen, Saturday mornings for an hour of simple retirement advice from your friends at take point to wealth management. Saturday mornings, seven thirty. I just want a reminder there of what you're listening to. It's take point on retirement brought to you from a take point. Wealth management, Nature Coast offices to serve you call them, they'll come to you. Education information is what it's all about. Judiciary services and so much more true. Take point wealth management. Give them a phone call. Now, if you're looking for somebody for your investments, your financial future, your retirement is important to take point wealth management. And they're standing by to take your call and help you with that stress free retirement. Three five to six one six zero five one one is the phone number three five to six one six zero five one one, a local number along the Nature Coast. Check them out online. Take point wealth management. And in the studios once again, Eric Arnet, lead advisor, retirement planner. Randy Wajeha, CPA, part of the Point Wealth Management Team. Good morning.

Speaker2:
Morning to all our retirement warriors out there. Beautiful weather. It's getting a little warmer, but still hanging on there. It's pretty nice and some nice days out there.

Speaker3:
And I actually got some rain this week out where I live.

Speaker2:
Yeah, but it looks like the summer patterns here, yet those rainstorms popping up. So that's exciting. Fish are biting. That's good stuff. A show about retirement and wealth management. So I talk about some of that stuff on the Today show. I want to go over some things a little bit about the market, what we see there and what's going on with inflation and all that good stuff. We're talking about some retirement milestones, some ages that you need to be aware of that are milestones in your lifetime when it comes to good retirement planning. And, of course, always going to talk about taxes with our good friend here, Randy Woodroofe, and some strategies that we feel very strongly about to potentially relieve some of that tax burden in the future. And we're not just talking about taxes and income taxes. We're talking about taxation on your Social Security, higher Medicare premiums. All this stuff was related. And that's why you want to come to a firm or practice that has a top notch CPA, sir, who is right on it with me every every step of the way, while we're reviewing your plans and reviewing your tax, know how efficient is that, having it all under one roof? It's good stuff. The real estate, for lack of better terms, boom. I mean, the real estate markets pretty hot. So we get a lot of questions every every week on. Do you think it's a good time, bad time to go in real estate? How can I finance this? I'm looking to maybe buy some rental properties.

Speaker2:
How does this enter into my retirement picture as far as taxation? And then can I get it done with my IRA? Even so, we're I want to talk a little bit about self directed IRAs, because it's been a popular topic and how we can show you here at take point wealth management how to utilize your IRA or even your 401k to be able to purchase a business, purchase real estate, any type of tangible assets. We're the experts there. We can sit down. We can go through all the rules are rules and conditions. And you've got to be careful as to what you're doing so you don't make any mistakes. But we want to help you through that to sort of try a little bit about that as well. And then we're going to get to our questions. We've got some great questions this week, folks calling in. Thank you to all our listeners out there. Response to the radio show has been overwhelming. We appreciate all the calls, appreciate the appointment. So we appreciate the trust that you've shown us to build your retirement plan and and hopefully more importantly, reach your successful retirement dreams and goals so you can create that tax efficient, be efficient, market efficient and that stress free retirement. That's what we aim for.

Speaker3:
Stress free is definitely what we're aiming for, for our clients. And that's what we wanted you to be able to enjoy.

Speaker1:
Yeah, you make it so easy there. Take point wealth management. I got to say, I'm so excited about today's show. Taxes, we know inflation. We're starting to see it already. You're going to talk about taxes, of course, the 401. KS and how we need to take care of those if we have some old ones laying around or if we're involved in a 401k now. And it looks to me I see in the news almost every day that they're going to attack those a one K plans. But the big thing that I'm looking forward to is counting down to our retirement because that's so important, especially starting at age 50. That's just incredible.

Speaker2:
Yeah. When you're young, you have plenty of milestone, turning ten, turning double digits, then the sweet sixteen and then can drive and then 21, the big one, like, hey, I can drink now legally. Right. Because we know nobody out there would drink under highly legal, highly, highly illegal fake ID, no fake I.D. please. But later on in life we have to be very cognizant. So let's break down and lists and celebrate some of those before we go online.

Speaker3:
Why is it the milestones that are early in life are very exciting and the milestones that we're.

Speaker2:
Yeah, well, most

Speaker3:
Of them aren't as exciting.

Speaker2:
We're going to show you today and talk about most of these start when you when you turn 50. And it just depends on your outlook. You can either be like, hey, I'm fifty. My life is probably more than. Half over or, hey, I'm 50, I've learned a lot, I'm smarter, and now I'm ready to enjoy the second half of my life.

Speaker3:
I lost years are ahead.

Speaker2:
Your glass is either half full or half empty. There I am. And I'll be honest with you, some days the glass is full and other days it's not so full time. And when that storm weather comes in, that low pressure, I feel like I'm 80 years old. And but when we have days like this, dry air, no humidity, I'm like I feel like I'm 21 years old. So I had

Speaker3:
Broken eight bones. No kidding. Yeah, eight bones. And so to your point, when the pressures come in, like everything starts to snap, crackle and pop. And so, yeah, I feel a bit more so a

Speaker2:
Little market update. Unemployment numbers are coming out and also our inflationary data is coming out, too. So some big numbers. Unemployment is improving. Hiring is on. We just got to get people to go fill out the applications, actually show up to the appointments and their interviews. We're actually hiring at take point and also Sanko. So we are and I know just about everybody I know who's in business is looking for help in hiring. We've got to get people back to work and get out there. That's going to help the economy tremendously, the market. So let's talk about the market. How relates to retirement planning. If you're close to 55, 60, 65, 70, you got to look at things a little bit differently. Let's let's face it, you don't have a lot of time to make up from a potential correction or you don't want a big hit or a correction to your retirement plan. You've worked way too hard for that. You had a million dollar portfolio. Twenty percent hit, which could happen pretty quickly is two hundred thousand dollars. That's a lot of money. Yes. But we've got to look at ways that we can design your retirement plan in your portfolio to get you to and through retirement in the safest way possible. What the markets are really focused on really over the last, I would say, a month or so, even getting more keen on it is a CPI that's inflationary. No, that's really the reason why you've seen a lot of volatility at the top here. The market's kind of flat to down, a little bit up. You know, it's kind of the market has no clear direction at this point because waiting to see how is inflation really impacting us. And one of those inflationary numbers, we know the job market's going to improve. Unemployment came in for on recovery there until we really get a handle and truly understand what inflation is going to do. Temporary inflation based on the current effect or inflation, that's more permanent. We're continuing to digest the data there and how it impacts your retirement and your assets.

Speaker3:
And we're going to talk about inflation is I think last year in Florida, we passed a constitutional amendment to increase minimum wage. Yeah. So I think that's going to go to ten dollars an hour sometime this summer or maybe it's eleven and give up a dollar a year. It'll get to fifteen dollars an hour for a minimum wage. So talking about inflation. Yeah. That's going to drive up prices for everything. Yeah. So yeah. You figured minimum wage I think is in the eighth or ninth right now. What it is is going to basically go up over 50 percent over the next five or six years. Yeah, that's a big, big deal. And so here in Hernando we have a economy that's driven a lot on services and service industries. All those minimum wages go to fifteen dollars an hour. I say here in Hernando, the Nature Coast in general can have that population area or other like a macro economy that is different, let's say, in Miami or Naples in terms of what things cost so far as you're listening to the show and thinking about the next several years, you'd be thinking about that, that you're going to be paying a little bit more to go to dinner, pay a little bit more for groceries, a bit more for gasoline, a little bit more for everything that you wind up buying going forward.

Speaker2:
Yeah. And that's why you have to put a plan together. So when we build our plan, we factor in three percent inflation, four percent inflation a year. We can factor in any number that we want to in our planning software to show you how is inflation going to impact your retirement, your cash flow over the long haul. So we're looking at 10, 20, 30 years when we're planning for your retirement. And inflation is a big one. It's a silent killer. It's it's very concerning at this point. Hopefully it's temporary and things kind of turn the other way. But for now, I mean, raising your labor costs is probably not the right thing to do at this point. But I've talked to several business owners. I have a friend that owns a pizza restaurant and delivery. He's like if they raise minimum wage to fifteen dollars, I'm going to be charging like forty dollars for a pizza. It's like by the time he pays his insurance for the drivers and by the time he pays that fifteen minimum wage and and all that stuff, he's going to be paying forty dollars for a cheese pizza

Speaker3:
And that trickles down from everywhere. So everybody that sells him all the ingredients for the pizzas, they're all paying more money. You know, his landlord is going to charge more money for rent because everybody that the landlord deals with is charging more money to consumers where it's all going to trickle down to their again, we're talking about inflation. Just just be ready. If you go to Dunkin Donuts and get a cup of coffee is going to go up 25 cents, nickels and dimes everywhere. But it's going to add up by the end of the month.

Speaker2:
Yeah. And this is all a lagging effect. I was listening to Mr. Donald Trump. He was on Fox Business. He showed concern for the markets. He showed concern for inflation and actually made a pretty bold statement what I thought would maybe hit the market, but it didn't as much or at all, I guess, because he's not the sitting president. But he said he would not be an investor in the stock market at this time. But how does inflation impact your retirement, folks? In a lot of ways, one is in the components of your portfolio, because if you're holding a lot of bonds in your portfolio, they're going to be highly sensitive to inflation, rising interest rates. We'll be paying close attention to the Fed and what they're going to be looking at and whether they're going to continue to have a policy of appeasement or if they're going to start raising rates and move rates higher to kind of put a slowdown and maybe to hopefully slow inflation down a little bit. We're not sure what's going to happen. So we're paying close attention for you and we'll have that information when it comes out. It's more important than ever to review your portfolio. You got to ask yourself, the market's up 12 percent already this year or halfway through the year.

Speaker2:
Is the market going to go up another 10, 12 percent from here? I highly doubt it. I think we're going to be in a sideways pattern. And if we eke out eight, 10 percent for the year, I think that would be pretty outstanding. But we're we've already got that. So you've already got the upside. And that's why the market has no clear direction that's kind of teetering here at the top waiting for some kind of catalyst to push it forward, which there isn't at this point. So we're talking about safe strategies, what you can do with your money to safely put it in an investment or plan that's going to give you unlimited upside if the markets continue to do well. But protect your principal. One hundred percent, I think at this point. That's a great strategist, also a great bond replacement tool, because if interest rates start moving up, which they have to, your bond portfolio is going to is going to go down. It's not a place to be in bonds right now for sure. So not to get a little more creative and throw conventional wisdom out here in the next segment. Let's dive into some of those numbers that are milestone's to you and your retirement.

Speaker1:
Look forward to that and so much more on today's show. Once again, those retirement related milestones. Coming up next, our sponsor Take Point Wealth Management is a show called Take Point on retirement every Saturday at this time and only on this station. In the meantime, write down this number. You're going to need it every five to six one six zero five one one. The reason for that is to give them a call today for your free financial analysis, evaluation, consultation. Fifteen hundred dollar value folks for our listeners to day three five to six one six zero five one one from our friends at point wealth management always here to educate us to take us back to school and lead us into that stress free retirement. That's what it's all about. By the way, there's a book called Stress Free Retirement. You can ask for that as well as Annuity 360. And of course, that book by Eric Barnett himself. What is your financial speed? You can request all those products in your free blueprint on retirement that take point, a blueprint on retirement. Everyone's talking about fifteen hundred dollar value or listening in on the program to day, but you're going to need the number to call three five to six one six zero five one one or go online. There's a simple form to fill out on their website. Take point wealth management dot com take point wealth. Just throw it in the old search engine. It'll bring you there to Eric Arnett and Randy Woodruff. We're going to go into those retirement related milestones. Looking forward to it.

Speaker2:
Yeah, awesome. Our Web site is a great way and it's exciting because people are starting to actually use it, which is exciting. We built this great Web site and you can actually just at the top right hand corner, there's two buttons, financial workbook and set an appointment. You can just click on set an appointment. It's going to offer you a free consultation and retirement blueprint. And all you got to do is enter in a little bit of information. You can actually select an appointment right there instantly. It shares our calendar and you can just click on there and select whatever date in time you want that's available. We'll get on the phone with you and just do a quick 15, 20 minute chat to see where you're at, where we think you need some help or even where you think you might need some help. Life insurance, annuities, wealth, Medicare's

Speaker3:
Long term care insurance,

Speaker2:
Estate planning, taxation, asset protection, real estate, real estate, passing on things to your to your beneficiaries. So if you have any questions, folks, or an open book laid back, no one is going to try to sell you whatever it may be that you have questions on. I've been in the industry 22 years right here in Hernando County for twenty. I don't know, Randy. I know 30 something years. Twenty seven, 27 years in the business. Twenty seven. Twenty seven happy.

Speaker3:
Twenty seven and seven years for me.

Speaker2:
Wow. So I only do the math there. That's like fifty years of experience leverage for you folks and all you gotta do is click a button and boom. We're there to answer your questions for you and the comfort of your own home.

Speaker3:
I want to circle back to the end of the last segment that we were talking about bonds and a bond replacement strategy. And then you made a comment which is associated now. Is that the time to be in bonds? And you're wondering why is it that kind of buying bonds if you haven't if you try to buy a house recently you bought a House race, you got your mortgage refinanced. You probably realize that rates are at historic lows. Interest rates on a on a on a 15 or 30 year mortgage. And so you're probably wondering how could the bank make any money as interest rates being? So low. Well, if you're a bondholder, guess what, you're the bank, you know, say you're the bank for the business, says borrowing that money, you should be asking yourself, you know, if I'm borrowing money to buy a new home at such low rates, why am I lending money to a business? That's exactly right. Now, kind of giving people a way to think about the concepts we're talking about and prove to them that it is true to your point right now that I had to have bonds in your portfolio. And that's the reason why, because rates are just so low and they're going to have to go up.

Speaker2:
I can hear somebody out there thinking right now as they're driving in their car and they're thinking to themselves, why I don't have any bonds in my portfolio or my 401K, my IRA, but I'm going to venture to guess that you do, because if you have mutual funds in your 401K, your IRA, your portfolio, you probably do more what you probably do, more than likely you have bond exposure in those mutual funds, which is going to cause quite a bit of a drag and also potential for a principal loss. Also, there's a lot of reinvestment risk there. Even so, there's a lot of things hitting your bond portfolio. That's just not a really great time to be in. Bonds are trading at 135 times earnings. Stocks are still trading about 22 times earnings. So extremely overvalued there. If interest rates move up, which they have to go up, they can't really go down anymore than bonds lose value. That's all you need to know. It's an inverse relationship. So we would love to talk to folks about a bond alternative for them in this time frame. So talking about those milestones, retirement milestones, the first one is turning

Speaker3:
50, turning 15, the big five.

Speaker2:
Oh, so what does that mean? That means catchup time, not the Heinz ketchup and catch up, meaning that you can catch up on your retirement savings if you need to show people 50 and older can actually contribute 60, 500 more to their 401. KS or 403. B's each year for total contribution of up to 26000 this year. So that's important. I don't think a lot of people know about that. So you want to be maximizing that 401k those contributions there and getting a match from your company. If they do provide that those 50 and older who contribute to an IRA or a Roth IRA can now throw an additional thousand dollars for a total maximum annual contribution of seven thousand dollars. So that's what we mean by catch up time. You want your 50, they allow you to sock more money away if you so choose and we can show you. Does it make sense to beef up your 401k or does it make sense to put a little in your form and put a little in a Roth spread it out? Because we know that Ross in the future are going to be tax free. Your fall falling K will not be to let us do that evaluation for you if you're still working. I don't care if you got another five years to work and you've got a 401k. Let's evaluate it for you and see if we can do any Roth conversion or if you need to maybe start contributing to a Roth instead of the 401K completely.

Speaker1:
And you don't even have to see that you can have it taken right out of your paycheck. Absolutely.

Speaker2:
Yeah.

Speaker1:
Yeah, absolutely. Thank you for one contribution.

Speaker2:
Absolutely. The next one is turning the big five five fifty five. Normally people have to pay a 10 percent federal penalty along with income taxes when they withdraw money from the retirement accounts before 59 and a half the penalty. But not the taxes disappear on the four one four for three withdrawals. If you're 55 or older, when you quit or get fired or retire, hope you don't get fired. But sometimes getting fired is a good thing. This is a separation from service. So rules apply during or after you turn 55. So that's kind of a cool thing because I know back in the day you had to wait to 59 and a half. They kind of they changed that law to where they're allowing people now at 55 to be able to start taking money from their IRAs. And we can show you how to do that.

Speaker3:
So if 55 or HSA catch up contributions as well, boom, they go next to thousand dollar, jump it into your HSA plan. So just keep that.

Speaker2:
It's very important thing

Speaker3:
About an HSA plan. I have one myself, as you can put in wherever the maximum in is every year. Take a tax deduction for the amount that you put put in, even if you don't spend all the money on health care costs that year. So allows you to continue to accumulate money inside that HSA plan, especially if you're younger. I highly recommend starting an HSA plan as soon as you possibly can, and you have to have a high deductible insurance plan to be able to do that as we all age, generally speaking, our health care costs go up. So if you had been putting money away for four years, when you do get to retirement or get older in life, you have a lot more money saved up. And then you can you take in a tax deduction every year for the money. You put that money into the HSA plan. As long as you pull the money out and spend it on health care costs, it comes out tax free. Great way to get a tax deduction. And here again, 55 catch up. That's pretty

Speaker2:
Powerful. Yeah. So if you're a couple, you can contribute up to seven two hundred a year. But if you're 55 and older, you can each do an additional thousand. So eighty two hundred. That's good. What does that do exactly. So I get this question all the time and you answer it pretty well, but I kind of fumble on it because you're the tax. Man, people ask me if I do this HSA account and I get the 80, 200 dollar contribution in there, which is a deduction, how much am I really going to save on my taxes?

Speaker3:
Great question. So it depends upon your marginal tax bracket. The tax brackets are what the IRS calls them, progressive. We call them oppressive because the more you make, the more you pay. But there's several different tax brackets. And so as your income increases, you keep jumping up into higher and higher tax brackets. Now, as your income goes up, you still get the benefit of the lower tax bracket. So I say you got somebody married couple making a quarter million dollars a year in income. You know, part of their income is taxed at 10 PARTIT 12, part a 22 and part of 24 percent. Just because you're in that tax bracket, let's say you make it a quarter million dollars and you moved into that twenty four percent bracket. Not all of your income is taxed 24 percent. So if you were making a million dollars and you're married and you're 55 and younger, you can put seventy one or seventy two hundred dollars into the HSA plan and that can run off your income and you can do it every year when you pull the money out. As long as it's spent on health care, related cost is not taxable at you.

Speaker2:
I'm going to put you on the spot here. Absolutely. You not even know what's coming right now. I don't. So get ready. So if our listeners are out there and taxes are so complicated, I'm an investment adviser retirement plan for like 22 years and it's confusing to me. And so I can't imagine how it is for folks out there listening in more times than not. When people bring in stuff, we tell them to bring in two years tax returns. I have you review them with me. I'm telling you, folks, it's like 99 percent of the time you find some something that's been missed. Even if you're going to another professional tax firm, I won't name any names out there. They've got tax enrolled agents or even just people popping in the data. One guy told me, wow, it's so cool. You know, they got my tax return done in like an hour. And I thought to myself, well, yeah, but was it done right? That's what I was thinking in the back of my head. Would you potentially, maybe for our listeners, offer them a free tax evaluation on what they're doing?

Speaker3:
Absolutely. OK, yeah, we we usually have a free consultation.

Speaker2:
You couldn't say no anyways.

Speaker3:
Exactly. So you're on the spot. I'm going to say, you see what I

Speaker2:
Do for you, you just put on the spot so

Speaker3:
We can take a look at a couple of years of tax returns. And you're right. You know, we do find white office situations in the past where especially I could get to even three years, but I did find when when when you're in particular, where someone had some large capital losses and they had moved here to Florida from another state, they had some six figures of capital losses. They were carrying forward on their tax return. And if I would not have got that third year back, I would not have seen that one hundred plus thousand dollars of losses because the firm admitted their tax returns, their first two years here in Florida. Miss that had no record of it. They didn't pick it up. So if I would not have looked back at three years and I was able to go back, pick it up, amend the two years that were done by somebody else and saved in one hundred thousand dollars in losses to allow them to carry it forward. So we always ask everybody to give us two or three years. That can be a hassle to dig up tax returns, bring them in. But we do find some things that are missed quite often.

Speaker2:
And then what's most impactful for our listeners and retirement warriors is how are those potential mistakes or things that are being done creating issues for our retirees with higher taxation on their Social Security, maybe higher Medicare premiums. But do I take my Social Security now? Do I wait? Does my husband take it? Do I defer it or do I take and have him file and suspend? We need to be able to look at that as well, because it's going to be hugely impactful long term on those numbers.

Speaker3:
One of the things that as we meet with clients, you, Eric, and I meet with clients is that especially when we're talking about some big events are going to have this year, we're going to do some portfolio reallocation or maybe they've got some real estate that they want to sell. It's got some is going to cost some capital gains, but for a good reason this time it may be time to sell that particular asset or that particular asset class. So one thing to keep in mind is, is that, you know, sometimes when you have a big spike in income, if your Social Security has not been taxable or maybe just slightly taxable, it may be up to 85 percent taxable. And also, depending upon how much your income is that year, it could have an impact on how much you pay in Medicare for the following year. So you may have as a surprise, you may be used to get that same check every month, especially when it comes to raising your Medicare costs for a year, maybe comfortable or used to getting that Social Security check deposited in your account every month all of a sudden because you had a good year when you're now age two or three hundred dollars less than wait for a whole year. So just keep that in mind. It that does surprise you quite a few people when they have a big event.

Speaker2:
Yeah. If you can save some bucks and only takes a quick little appointment and your returns, it's worth the effort, I think.

Speaker3:
Thank you. Yes, I agree.

Speaker1:
Well, it's all about simple safe investments, securities, returns. It's all about your financial stress free future in your retirement from your friends, my friends that take point wealth management within our listening area just reach out to them. They want to help you three five to six one six zero five one one. That's number to call this, a show called Take Point on Retirement. We're going to be back in just a bit after we hear from our sponsor take point to wealth management. In the meantime, that phone number once again, three five to six one six zero five one one. Check them out online. Take point. Well. Management in the Nature Coast here locally, folks, that we're going to continue talking about those retirement related milestones, you turned 50. Fifty five. Fifty nine and a half. Let's talk about turning 60, 62 and 65 when we return here. Garnette is an investment advisor, representative of Retirement Wealth Advisors, Inc. and says registered advisor Datapoint Wealth Management, this station in RWA are not affiliated. Exposure to ideals and financial vehicles discussed should not be considered investment advice or recommendation to buy or sell any financial vehicle. This information should not be considered tax or legal advice. And individuals should consult with professionals specialized in fields of tax, legal, accounting or investments regarding the applicability of this information for their situation.

Speaker1:
Past performance is not a guarantee of future results. Investments will fluctuate and, when redeemed, may be worth more or less than when originally invested. A little compliance disclosure there for your safety and ours and of course, your secure financial stress free future. We're talking about your retirement on take point on retirement, a show brought to you by Take Point Wealth Management every Saturday at this time and only on this station. In the meantime, you're looking for judiciary services. You need to make some changes in your plan. Maybe you need a portfolio built to your specific needs, your age appropriate portfolio. The folks can call or take point to wealth management. That's where I go. And I trust the folks that take point to wealth management to secure my financial future. How much better that makes your retirement? They will tell you how and when and what to do. So in the meantime, let's take a pause for station identification. You're listening to ninety nine nine FM, WACs, JBI, Homosassa, here to educate educated Eric Arnet, lead advisor, retirement planner Randy Woodroffe, certified public accountant.

Speaker2:
Getting back onto those milestones, one of the big milestones is fifty nine and a half. You've may have all heard that number before. Don't ask me why it's not 59. Don't ask me why it's not 60, but 59 and a half there for some particular reason.

Speaker3:
Yeah, it's crazy that they got the half by the half.

Speaker2:
Who the heck knows that comes from our lovely folks up in Washington this age. You can take withdrawals from your workplace plans or IRAs without penalty. That 10 percent penalty goes away. But keep in mind, you know, you're still going to pay tax on what you pull out. Also, some 420 plans allow workers who are at least 59 and a half to do in an in-service rollover. So what's the difference between a rollover and just a withdrawal rollover? You're actually able to move your money out of your for one, crawled into your IRA that there'll be a no tax on a non-taxable event. And then once it's in your IRA, it opens up so many more options for you to invest in and to do with your IRA. As an example, I want to just briefly touch on the self directed IRA, because we do a lot of them here take point in sunchokes. We help a ton of folks out with that. If they want to potentially buy a business or they want to invest in some type of tangible asset or they want to purchase real estate or set up a VR bio and so we can help you do all that soup to nuts.

Speaker2:
And now you're at the age where you can take some of that hard earned money out of your four one K and do some different things with it, because quite frankly, when you keep that money in your 401k, you're pretty limited as to what your choices are to invest in right now. You can gain control of your money and do what you want with it. Come in and see us and we'll go through all the options. Turning sixty. For most widows and widowers, age sixty is the earliest that they can begin Social Security survivor benefits. So survivor benefits are available starting at age 50 for survivors living with a disability or at any age if the survivor cares for the deceased spouses, children who are under 16 or disabled. So for most widows and widowers, age sixty is the earliest that you can begin collecting Social Security survivor benefits. So that's important. If you didn't know, I've had a lot of people sit in my office and had no idea they could start collecting something at six 60. Like what? What do you say? I say you better call your Social Security office right away because you can do it. And then most

Speaker3:
People don't know anything about that. They don't

Speaker2:
Know anything

Speaker1:
About it a little further than because I don't quite get it.

Speaker2:
Basically, if you've had a husband, ex-husband, ex wife, wife, whatever, who has passed, you can actually start collecting on their Social Security at age sixty. Oh, yeah, it's that simple. You don't collect your Social Security, you're going to collect on their benefits, right? Yeah. So there's some rules there. But give us a shout or we got some questions. Just click on the buttons there at the website and we'll get right, we'll get right with you. But OK, turning 62, that's a big number, right. This is the earliest age you can begin your Social Security, retirement or spousal benefits, but your checks will be permanently reduced if you start permanently reduced, if you start before your full retirement age, which ranges, you know, between 66 and 67 depends on your age. So you're going to get a reduced benefit for every year that you take it prior to your full retirement age, which is 66 or 67. Also, you'll face an earnings test, an earnings test. That reduces your benefit by one dollar or every two dollars you earn over a certain amount, which in twenty twenty one is eighteen thousand nine hundred sixty, the earnings test disappears once you reach your full retirement age. So that's really important because most people have no idea what I just said and they didn't know it existed. So, Randi, you can elaborate on that because you see that all the time.

Speaker3:
Yeah, we get this question a lot. People are thinking about whether they want to retire and can I do it at 62, 64, 67? And I want to do the things I want to make sure our audience understands very clearly is that when it says earnings test, this is earned income. So earned earned income is where you actually have a job or you have a you're self-employed and you're self-employed and income. It's basically, you know, your W-2 income. So earned income does not mean all the good job that Eric and I do, especially. Eric, take point, managing your money, all those earnings, dividends, capital gains, interest, that's that's earnings based on earned income for this test. And we have this happens quite often. We have people who want to retire and they're getting forced out of their company. Maybe they want to sell their business. It's the right time to sell, but they still need to make some money until they get the Medicare. They need three or four more years of earnings all the time. And health insurance gets a lot more expensive as you get older. It can be a thousand or more dollars per month. Basically, you have pre-existing conditions. So I'm saying people that want to sell their business or retire, but they have to worry about this earnings test because they can only earn, let's just say, nineteen thousand dollars a year. So it's very important that you're aware of that. And here again, if you get a large portfolio of stocks and other investments, annuities, or you've got a large real estate portfolio that's not earned income, you could retire at 62 years old and live off your investments and still take Social Security at 62 and not have to worry about the earnings test because you're not working.

Speaker1:
So that earnings test, that doesn't include your entire life earnings.

Speaker3:
So it's earnings that particular year. So you're

Speaker1:
Ok to change it, go up or down right

Speaker3:
Now. It's just if you were at 62, want to retire, would you still want to work a part time job, start taking Social Security, still working part time job to offset some personal expenses? You cannot make more than 19000 dollars a year or they will take back one dollar for every dollar that they give you.

Speaker2:
And that's if I'm doing my math right. That's a whopping 50 percent penalty. It's a big penalty. It's a big one. I've had people that are doing it and they just didn't know any better. So let us evaluate all that stuff. If you're in that 60 to 65 zone, so much to evaluate and go through to make sure you're not making any mistakes. And we see those mistakes every day. And all we're trying to do, folks, is just get in front of those mistakes for you and eliminate those at

Speaker3:
A conversation recently with a couple. Yeah, they're in their 50s, a conversation about retirement, and they want to retire at 62. They both aren't really in the best of health. So they're really paying a lot of money in health insurance. And I don't think 62 is going to be an option for them because, you know, they don't have enough retirement wealth built up and that they can live on their investment income and not significantly erode those retirement dollars, trying to pay the living expenses and pay the high cost of health insurance. And so they're going to have to work until they reach Medicare age. So it's important, like we say all the time, playing, playing, playing. And the earlier you play in, the more likely you have a stress free retirement.

Speaker2:
That's a big point because that's so important. The earlier, the better. In other words, if you're out there in your 50s or even late 40s or early 50s, just like, for instance, that health savings account, think about it. If you and your wife can get close to eight grand a year and then over the next 10 years, it's a tax deduction and we can actually invest that money, too, and get it working. And so you have like 80000 dollars in your health savings account by the time you're 60. Guess what? You're not have to worry about bridging that gap. Right? You could buy a high, high deductible plan with a low premium and have all that money sitting there to help you pay for any unforeseen medical costs over your deductibles. But when you wait till 60 years old to start thinking that, then it's almost too late to to get ahead of that problem. That's why I love the HSA, the health savings account. We can actually actively manage that for you in place and investments and get it to grow. So that's exciting, folks. We put that in our planning all the time. I try to always get people in their early ages to start socking that away because medical costs are just going to be crazy in the future. And that's something that I'm doing currently with my spouse, is that we're putting money away in that HSA every year because I do the math. I also need one hundred grandson in there. I'm fifty when I get to sixty. If I got one hundred grand in there, I don't have to worry about that. Bridging that gap from 60 to 65, waiting for Medicare. I've got plenty of money set aside to pay for that. Those medical costs and premiums.

Speaker3:
Yeah. If you're 60 or 65 and you're at this and you're wanting to start planning now, you're really not planning. You're basically crisis management or chaos management, you know, and you're planning means you're doing it well in advance. You plan on spending, let's say, twenty years in retirement. You probably need to be planning your retirement at least twenty years out from your retirement age. You know, we're more than that. You need to be saving as soon as you can in life, but you need to be seriously having a retirement plan, I think. Twenty years out and you're saving long before that, but you're twenty years out. You need to really have a good plan in place.

Speaker2:
Yeah, absolutely.

Speaker1:
As we always say, a failure to plan is a plan to fail.

Speaker2:
Boom. There it is. There's the J.W. words of wisdom. Well, I had a question that popped into mine, I hear this all the time, the earnings test going back to the earnings test real quick, does rental income, rental property income count? And that earnings test, it does not. OK, so that's considered passive nonsense. That's good. Yes. That might make having a rental property or two in your portfolio for the long haul might might be a good thing, correct? Yeah.

Speaker1:
Ok, awesome. And what about couples married? This is single based on single correct income. So it doesn't have anything to do with being married or we're not going to get penalized as a couple or. OK. Correct.

Speaker2:
So OK. Well good question. J.W., would that number 18000 960 is the earnings test, does that mean if you're married to each one of you can make eighteen 960?

Speaker3:
Great question. So what this is really talking about is you as the individual are the one getting Social Security, has got nothing to do with your taxation and what you're doing with the spouse or you if you're single, which is basically what are you specifically earning when you reach 62 or 63 before you reach full retirement age? It's got what are you earning? Going out and going going to work every day for OK.

Speaker2:
Awesome. All right. This is a big one. So we were actually pretty looting right up to this anyway. So turning 65 at age 65, most Americans are eligible for Medicare, the government health care program. Right. Typically, you want to sign up in the seven months. So I'm going to repeat that. Typically, you want to sign up in the seven months around your birthday, meaning the three months before the month you turn 65, the month you turn 65, and then three months after. So you kind of have that window of seven months around your sixty fifth birthday. Does that make sense? So delaying after that point can cause you to pay permanently increased premiums. So don't delay. Make sure if you're out there listening, put it on your calendar. Set a reminder on the iPhone. I don't even care if it's three years from now. Put it on there at your sixty fifth birthday either three months prior, three months after, you've got to sign up for Medicare or you're going to get penalized. OK, turning 66, 67. We talked about that. That's your full retirement age. 66 is for people born between 1943 and 1954. The age rises two months after each birthday, year after year after that, until it reaches 67 for people born in 1960 and later. So I guess I have to wait till 67 and hopefully they don't change that to like 70 or 72 or whatever. So I'm just going to keep working as youngins, I guess, before listening.

Speaker3:
Audience Don't be surprised if they do and not make any kind of prediction is if I get nothing to go on, then as we've talked on this show many, many times in the past and we do pretty much every week at your tax rates are going to have to go up.

Speaker2:
It's interesting to me that we can borrow all this money trillions, six trillion dollars or whatever that they wanted to do during just this year, just this year. It's just to me that they can borrow all that money for all intents and purposes, probably blow it, but they can't replenish the Social Security trust fund that's gone. I think that there's a lot of folks out there that are concerned about that, and I am as well. And the labor organizations have said that Social Security could run out. So they're going to have to change some things or raise the retirement age or reduce benefits or something. So let's get out ahead of that as well.

Speaker3:
We've talked on the show about tax rates going up. But here again, increasing the age when you can start taking Social Security isn't necessarily a tax increase, but a deferral of potential income if they make it 67 and half, 68, 69. And are they going to do that? I mean, they raise it from 65 to 67 not too long ago. We don't be naive to think they can't raise it even higher.

Speaker2:
Well, and that's why I like people always ask us when do I take Social Security? And we like that for retirement age because that's your full benefit. That's what you worked for. And if you can if you can get there to 66 or 67, keep deferring that, because from age 62 to age 67, your benefits are going to go up eight percent every year that you. So don't if you don't have to take it early, I wouldn't I would keep the Fernet because where can you get an eight percent increase in your income to Masr, you know, so that's good stuff. So at least waiting until full retirement age to start Social Security benefits means you won't have to settle for those smaller reduced checks turning 70. So a juicy benefit awaits those who can delay the start of their Social Security after full retirement age. Their benefit increases by eight percent annually until it maximizes out at age 70. This not only means more money for the rest of your life, but if you're the larger earner in a couple and also maximizes the survivor benefit for your spouse. And so that's a key thing that I think is most people are, oh, I'm going to go ahead and start my Social Security because, you know, I just want to take it because it's mine. Who knows what's going to happen.

Speaker2:
You have to keep your spouse in mind. Once your full retirement age, you could continue to delay yours in a go up eight percent every year. You get a much larger benefit, a seventeen. And the cool thing about that is if one of you passes away, the spouse is going to get that higher benefit, which is going to help with inflation and having that higher paycheck for life. So don't leave your spouse with. A small benefit, because remember, when you do pass away, your spouse loses that Social Security, which could greatly impact your lifestyle or her lifestyle or his lifestyle. However, the spouse may be so very, very important to do that planning, and it has to do with the assets you have, how much you save for retirement. You have pensions. How much is your Social Security? Are you still earning a little money on the side? So all of these factors come into play. Let us figure it out for you, because it can be so, so darn confusing. And then, of course, turning age 72, most retirement plan contributions reduce your taxes in the year you make them in your account grows tax deferred over the years. But eventually the government wants it cut. Right. And eventually they're going to stop that party. So you're required to start taking at least a minimum amount from most retirement plans beginning at age 72.

Speaker2:
It's called the required minimum distribution. It used to be age 70 and a half. They've raised it to 72. So that's great. It gives you a little more flexibility there. There are a couple of exceptions. If you continue to work, you can wait until you retire to start minimum distributions from your 401K or 403 b.. So that's a common question we get. If you're still working and you're in a 401k or for three B, you don't have to take those. AMD's minimum distributions are still required for traditional IRAs. Even if you're working and if you have a Roth IRA, however, you won't be required to take distributions at any age. So let me repeat that. That's why we love the Roth and we talk about it so much on the show. It's a huge tax saver and also gives you the control. You don't have to you're not forced to take money out of your IRA with a Roth. You can you don't have to. You don't have to ever take it out if you don't want to. And that's going to pass tax free to your heirs or beneficiaries as well. So super, super powerful. Let's talk about Roth conversions and all that good stuff. Give us a call. And so that's that's huge tax free withdrawals and tax free wealth transfer.

Speaker3:
Can we go back to the holding off on taking in R&D when you're still working for wound care for three B, that that's something I've been asked a few times and very interesting. So if someone's still working and they're seventy two, they can keep working and they're working. There's no requirement to take money out.

Speaker2:
Yeah, that's right. That's absolutely right. Not to be confused with the IRA, but the 401k. So that's good stuff. Right. I mean there's a lot of folks out there are going to continue to work past age 70. I mean we've been told several times like, hey, if I stop working and I go home, I don't know what the heck I'm going to do. That's part of people's retirement planning is, hey, you might still want to work in your retirement, and that's OK. Good stuff if you want to do that. So I think we're going to talk about some higher taxes and ways you can ease into that retirement and stick around. I think we've got some good tax tips here

Speaker1:
And a little bit. There you go. Retirement related milestones. I knew you'd like it because it's important to each and every one of us. Stick around. We'll be back with some more information of Americana that lead advisor, retirement planner, take point wealth management. Randy Woodruff, certified public accountant and two members of that point team ready to assist you into that stress free retirement. Whether you're turning 59 and a half, 65, 72 or even older, your stress free retirement is important to you. And take point wealth management. Any comments regarding safe and secure investments in guaranteed income string's refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance, an annuity. Product guarantees are subject to the claims paying ability of the issuing company and are not offered by Retirement Wealth Advisors, Inc.. These types of products are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the product contract. Well, just a quick time out to catch our breath and they give you time to take down those notes. If you missed anything, you can always catch up on take point on retirement online. That's take point. Wealth management is show called take point on retirement. It's heard every Saturday at this time and only on this station. By the way, if you have any questions, send those questions to info at take point on retirement dot com. That's info at take point on retirement dot com. And we'd always love to address those issues. When we have time, those questions will be answered on air. I'm allows. In the meantime, we're going to continue with our discussion today with lead advisor retirement planner Eric Arnet and certified public accountant Randy Woodroffe.

Speaker2:
Taxes, taxes, taxes. It's what's for dinner. But no. Let's talk about how we can help you create a tax efficient retirement where you can maximize deductions and credits while minimizing taxes. So get those deductions out there. We can help with those credits and we want to really minimize taxes. So here are four strategies to help you position yourself for tax efficiency and retirement. One, you may want to consider a partial in-service rollover from your 401k plan. So through this type of rollover, you can move some of your retirement funds out of your forward into an IRA with a multitude of. Ones to choose from before you retire and while you are working for your current employer, more than 70 percent of four one K plans out there allow for this type of rollover. And there's two distinct advantages to a partial and service rollover. One, you're diversifying your traditional stock and bond investments beyond what is allowed in most company sponsored retirement plans with the goal of seeking out more tax advantaged options. So inside those 401k plans, they're regulated the risks of laws. And they have they have a lot of restrictions and they're only going to they're going to kind of be limited as to what they're going to offer. And it's traditionally going to be those traditional stock and bond investments. And also adding an additional nontraditional retirement savings are such as a permanent life insurance are fixed indexed annuity. So it opens up your availability and what you can do. I like this as soon as you can get out of those four one K plans and start diversifying and opening up your options, it's going to help your portfolio be more efficient, better diversified, probably going to help you on fees quite a bit. And it's also going to just make you more tax efficient as well.

Speaker3:
So as you meet with clients, we're not a big fan of mutual funds at all. And typically they're working for a company, especially the bigger the companies you have, the H.R. director or somebody like that meet with you and you get a pick for maybe four or five different mutual funds in a aggressive or conservative or moderate risk strategy. And it's all you get.

Speaker2:
And guess what advice you get zero around the around the water cooler or at the coffee pot in the morning. Hey, what fun did you buy? This is unfortunately, it's something I hate. Why? I love doing 401k corporate plans is that I offer that level of service because I'll help guide the employer, employee and the employer through good options to invest and explain and educate, because unfortunately, H.R. comes to you and says, hey, you can now contribute to the four K, here's a list of funds to pick from and there's no one to help. And that's where, fortunately, we're happy to help you guys, even if you're still start a company for one. Can't give us a call or help you out. We're happy to do that. And you know, the big one that we always talk about that that allows you to be more free out of the four one K is consider a Roth IRA conversion, essentially by converting some of your 401K or traditional IRA into a Roth IRA, you can pay the taxes on that portion of your retirement account in advance of retirement itself. So leaving more available to you when you need it, your assets will grow tax free as you approach retirement without having to worry about potential taxes on the withdrawals in the future.

Speaker2:
So this is huge love for everybody out there that has a four one K is now fifteen and a half to really strongly consider this because, you know, if you're sixty, chances are you going to live for another 30 years. Imagine if we can convert some of that for one K and off pay the low taxes now because you're probably in one of the lowest tax brackets you'll ever be in based on what we see coming in the future with all the higher taxes and the trillions of dollars that are being spent, they've got to pay for it. Somehow, though, someone's going to get taxed more than likely. Tax rates are going to go up in the future. So now's the time to pay these lower taxes, make that conversion. Now your Roth is going to grow tax free and then you can take out money tax free in your retirement. So that's tax free retirement. Super, super

Speaker3:
Powerful. And having those tax free retirement dollars helps us is that's another bucket of income that as we manage portfolios for our clients in the future, we may need to you know, we may have some good positions in some pension stocks and other investments that we think, OK, now's the time to rotate the portfolio, to reallocate the portfolio, we need to take some gains. We need to recognize the harvest of gains. And so having a source of income where where you can take maybe for six months or a year money out of your Roth while we harvest those gains are going to be taxable. It kind of keeps you at a much lower tax bracket because you're still getting the same amount of cash flow. But your tax side will be

Speaker2:
Less guys, your advisory team, so many more options and flexibility, which we love. Let's face it, folks, historically, back in the day, I think it was FDR days and more war two days and even into the late 50s and 60s, tax rates were as high as 70, 80 percent on the wealthy. So this is powerful, powerful stuff. And to your point, planning early pay. So if you're 59 and a half, we can do this and let's let's get going on it. Another thing you can do is consider life insurance. So tapping the value of your life insurance through borrowing or withdrawing cash creates tax free income. So leveraging permanent life insurance premiums now for lower taxes in retirement can create more flexibility during retirement, especially if you've already maxed out the contributions you're making through your company sponsored retirement plan or IRA. Permanent life insurance policies come in several varieties. You got a variable, you got universal whole life. You have hybrid policies. There's all kinds of different policies out there. That's why you need to come sit down with us so we can explain the differences and which one is best for you. We can even tailor them and build one out for you in cases of health care emergencies. During a time at the hybrid policies especially stand out because the money they make available to you for your long term care can exceed the death benefit in many cases several times over. So these life insurance policies, his whole life policies that we build and we can tailor for you also has some great health care benefits for you longer later on in retirement and their tax free benefits that you can use to pay for your health care. This is huge, huge, huge. You've got a plan for this stuff early.

Speaker3:
And you mentioned life insurance. And I highly recommend everybody, if you've had a life insurance policy for probably you give me the number 10 years or more. If I were to take a look at a second look at it, because there's been so many changes to life insurance policies and annuity policies as well, that the amount of options and riders and other things that you can add on these policies, you have one policy that could cover a couple of three different risks. At the same time, it's very important. So just because here, again, just like we don't recommend you, you have an investment strategy and you said, forget it, you need to actually manage your investment. You did you did the same thing with your life insurance policy.

Speaker2:
Also, great point, because ten years ago when we were utilizing these products, they weren't as sophisticated and they had much lower interest rates and crediting strategies. Now there's ones that are these hybrid policies that have tremendous crediting strategies. And you can earn six, seven, eight percent on your cash with no risk. Some of them have an automatic up benefit where they're going to pay for long term care for you should you need it on super cool, great policies out there and easy ways to plan ahead for your future. So we've got a couple more that we want to get to. I think we'll be able to wrap up real quick. We've talked about consider fixed index annuities. You don't have indexed annuities available in your phone, but you can utilize those with a rollover or a Roth rollover. I mean, and these are great tools. We've talked about them so many times on the shows. Fixed income index annuities guarantee your principle, but they also offer you some level of income that's very competitive. And today's interest rate world, as well as they can also offer safe accumulations, safe growth. And we see great returns on those as well. And also these products you can offer long term care, Keri's that kick in should you become incapable of performing any of the five daily living activities.

Speaker2:
So if you're a single person, you know, and you got money surrounded for one K, you don't really have anybody to take care of in the future. Go ahead. And, you know, let's let's look at one of these policies that are going to give you a nice living benefit of long term health care. Good, good stuff. I mean, there's all kinds of great creative products out there. And all you got to do is go to take point wealth management, dotcom and click that button up there, set an appointment. Sure. Share a little information with us and we'll get on the phone with you and we'll get rolling housing your insurances or property taxes. I mean, all that stuff just keeps going up. So I was talking to some folks the other day and they're fearful of doing anything. Well, if your money just sitting there in the bank under the mattress, then you're definitely destined for failure. You can leave it there where it's hypothetically safe and you feel comfortable, but you're probably going to fail long term or you can apply some of these principles and be successful.

Speaker3:
We've all have heard the expression that it doesn't take long to get yourself in a bad situation, but takes a lot longer to get out than it did to get in. So I can mention on the show a couple of different times, 40 years ago, back in 1980, we had one trillion dollars in national debt. Now we're at 30, 40 years to go from one to 30, 40 years. It's been a long time to go from one to thirty trillion dollars of debt. And so basically trillion. And basically just to just to level that off, just to maintain. We have been maintaining that for decades. We have to get back to where we're maintaining and then hopefully one day paying it down. But doesn't matter whether it's taxes or whether it's debt or any other kind of situation you find yourself in. And when it comes to a building project going on in the community for a new non-profit or existing nonprofit, there's a new church construction project going on. The people reach out to the people that have money, kind of our mindset, whether it be for a philanthropy project. It's also going to be true when it comes to taxes. It is true when it comes to taxes. The wealthier people pay by far, the greater share the tax burden out there in the U.S. And as our debt grows and as our need for cash flow grows, they're going to be coming after us as citizens to pay more and more of that fair share.

Speaker3:
It's important that that as we plan that you think about taxes and taxes have been relatively low ever since. Basically, I say George Bush Jr., President number 43, got in office after the dotcom bubble burst in 9/11. There was some, you know, some good tax changes that happen in terms of Maisky for retirees or people with money that have investments, capital gains drop down significantly and tax on dividends dropped down significantly. So and we've kind of been in that situation for twenty years. So we've gotten used to it eventually. And they're already talking about it, that those that those tax favorable items are going to be going away. In fact, they're talking about, you know, one of the proposals that Biden has is to is for people making over a million dollars a year that that there there isn't going to be going to be no preferential capital gains treatment. That's going to be pretty ordinary income. So if you live in a a state that has a state tax as well, time you pay the federal income tax, there's an extra. Tax over certain dollar amount and you pay your state income tax, you're paying over 50 percent of your income is going to be going to taxes when you have a capital gain if you're making over a million dollars a year.

Speaker3:
That's a lot of money. It is in a lot of people think, well, I'm not making a million dollars, so that doesn't impact you. Well, we don't live in a vacuum as a society. So if something is impacting a group of folks somewhere else, it's going to eventually have an impact on us somehow, some way. So we all need to be concerned about that. It's not just a problem for the wealthy, it's a problem for all of us as America, our spending and our debt and how we're going to cope with it are all going to have to somehow deal with it. As soon as we deal with it, the sooner the better. But at the same time, if you're listening to the show here, again, if you plan for it and you know about it well in advance when it gets here, it's no big deal because you're ready for it. And so we were talking here on this show for months and months about taxes going up. We've had a lot of folks talk about Roth IRA conversions coming in the office, had some folks doing quite a bit of that. And it continue, folks, to continue to do that and talk to their younger folks out there listening, put money into a Roth IRA, start as early as you possibly can, because tax free income in the future is going to become more and more valuable.

Speaker1:
I agree. Yeah. And plus that annuities has been a hot topic as well lately.

Speaker3:
Annuities as as has life insurance. Yes. Yes. And here again, life insurance is another way to create some tax free income in retirement. So we talked about how we do have all these professionals. More reminds you that we have a broad range of professionals that are here to help you. So we want you to think of it. If you have a need in retirement, we want you to turn to us first and we can point you in the right direction to work with professionals that we work with, know and trust, and have had good success for our client.

Speaker2:
We had an overwhelming response. A lot of people wanted us to play this chapter again. Was Chapter six was the rule of 100. I think this is one of the most important ones to get right. Rule 100, folks. I think it's really important to get this right because a lot of folks were asking questions about the

Speaker4:
Rule of 100. Big idea. You want to risk less as you get older because you have less time to make up any big losses as you get closer to your golden years. Many financial professionals advise gradually reducing your risk. Retirees and pre retirees don't have the luxury of waiting for the market to bounce back after a dip. The dilemma is figuring out how safe you should be in certain stages of your life for years. A commonly cited rule of thumb has helped simplify asset allocation. This rule states that individuals should hold a percentage of their stocks. That is equal to one hundred minus your age. For example, a six year old would have 40 percent of their holdings in stocks and 60 percent in fixed income products like bonds or fixed indexed annuities. Why you should follow the rule of one hundred. Take our current example of a 60 year old at age 40. Your risk capacity is higher. You have more time to rebuild your wealth should you experience a dip in the market. However, at age 60, you can't afford to risk as much of your portfolio in the market because the time horizon to rebuild your wealth is much shorter. Rule of 120. Many financial advisers now advocate the rule of 120 so they can get a significant rate of return for their clients and maintain management of the portfolio. I disagree with today's market volatility. A retiree does not want to go back to work in a job making less than what they made before. They must consider following the rule of one hundred or at least a 50 50 smart financial plan that is built equally with smart risk and smart, safe investments.

Speaker1:
There you go. Some important information once again, as always, from your friends Hatake take point. Wealth management, check them out online. Take point wealth dotcom, their phone number three five to six one six zero five one one. If you recognize that area code. Yeah, there are local folks up and down the Nature Coast here to serve you locally. Give them a call, reach out to them. They'll reach out to you and take point on your stress free retirement. Folks, thanks for listening and a lot of important information. Once again, if you need to contact them, check them out online or send your questions to info info at take point on retirement. Dotcom will be back next week with Eric Arnett. Randy Woodruff, of course, yours truly, J.W. See you then.