What You Need to Know about Secure Act 2.0

New legislation passed late last year called Secure Act 2.0 and it could have a big impact on your retirement plans. On this week’s show, Erick and Randy will break down the details you need to know.

Call Erick today at 352-616-0511

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market update
inflation demonstration

2.10.23: Audio automatically transcribed by Sonix

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

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Take Point on Retirement with your host, Erick Arnett. Erick is a fiduciary and licensed financial advisor who always places your needs first. The experienced team at Take Point Wealth Management takes pride in knowing they've helped so many pursue the financial future of their dreams. And they can help you too. And now let's start the show. Here's Erick Arnett.

Erick Arnett:
So, hey, welcome, everybody, to Take Point on Retirement Radio. I'm your host, Erick Arnett. So great to be here with you today. I am a retirement planner. If you've heard the show before, you probably. I know that. But if you're new and you're tuning in, please tune in because I help build, protect and grow your retirement. So thanks for listening, guys. Up and down the Nature Coast, Port Charlotte, Sarasota, Tampa. North Port Punta Gorda, if you're all out there listening to my retirement words. Thank you so much. So great to have you guys here. If something makes sense today on today's show, please reach out and get a hold of me. Everything is completely complimentary. I'm. Willing to take some time and consult with you and talk specifically about what your concerns are, what your needs are, what your goals are. And so you can get a hold of me in a couple of different ways. One, the easiest way is just pick up your phone and write this number down. It's 352 616 0511. That's 352 616 0511. You can book your complimentary consultation right now. Today, we're standing by on the phone. Also, if you just want to go to my website, you can take your your phone out, you can Google, take point wealth and go to my website.

Erick Arnett:
In that upper right hand corner, you'll see a little link and it's you can click on there and get right on my calendar. You can leave me some notes about your specific concerns and we'll jump on about a 15, 20 minute chat session just to kind of learn a little bit about you and and talk a little bit about your concerns and see how you're doing with your retirement planning. And if you're on track for a stress free retirement plan. Also, we do this show once a week and we've been doing it for quite a while. If you want to catch us on your favorite podcast channel, please do. It's Take Point on Retirement Radio. You can listen to any of our past episodes. We also have a website for you. It's our podcast website. It's Take Point on Retirement Radio and we have all of our shows and podcasts there if you want to catch up. A lot of good information there. But with all that being said, we've got to introduce Mr. Matt McClure is here with us today, our deejay, radio producer extraordinaire. So great to have you here with us today. Matt. How's it going? Man?

Producer:
It's going great, Erick. I know it's been a busy time for you down there in Florida. I'm here in Atlanta, as Sam is as well. You know, he's usually kind of the the master of all things and pushing all the buttons here. But I hope to I hope to fill his shoes as much as I can today.

Erick Arnett:
Yeah, well, you guys are a great team. You always wrap the show up in a nice bow and get it out there to folks. And we appreciate that. So, so great. I think we've got a great show today. Just a little overview. Of course, we're going to get that quote of the week. And we always love to have those those those great quotes. And Matt's going to introduce that to us and we'll chat a little bit about that. Those are always fun. We're going to have a market update. We've had another interest rate hike. So what does that mean for you? And I really want to talk about the Secure Act 2.0 and do a little review of that. This is the new Secure Act. It does affect you listeners out there getting ready for retirement. There's some important retirement and tax changes that you need to know about. And then, of course, we always like to throw in our inflation demonstration. We're going to talk about how much Super Bowl tickets costs compared to 1967. So I'm sure that's going to be a little bit of a shocker and always got to plan for inflation. And that's one of the silent killers that we always talk about on this show. And then we're going to give you some real strategies, some real ideas. We're going to talk about the Smart Retirement Plan series. We're going to review that, talk about some rules to follow income. We don't want to run out of income, that's for sure. In retirement, that's our biggest fear is running out of money. And then this week in history, we'll talk a little bit about some famous birthdays happening this weekend and then talk about what's potentially coming up next week. So with that being said, we also have our CPA extraordinaire, Mr. Randy Woodruff just joined us. So it's always great to have Randy here with us for some insight.

Randy Woodruff:
Good morning, everyone. Erick, Thanks for having me on the show.

Erick Arnett:
Well, thank you for coming. Thank you. So Randy is also our CPA. 35 some odd years here at Take Point Wealth Management. So we wrap a bow, we wrap a team around our clients, and so we think that's super important and a great value to you to have your tax man and your investment advisor all in the same team.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Erick Arnett:
Matt, what's this financial wisdom quote of the week?

Producer:
Well, this one is well, they're always good, but this one's a really good one. And it comes from Will Robinson, not the one from Lost in Space. Just just got to put that out there, Not danger. Will Robinson Danger. This is the author, Will Robinson. And he said, quote, Financial fitness is not a pipe dream or a state of mind. It is a reality if you're willing to pursue it and embrace it. So I think that's a great one. It's like, you know, you've got to you can have that dream, but it's not a pipe dream. You just kind of got to work for it. You can make it real. Absolutely.

Erick Arnett:
Yeah, No, absolutely. I mean, that's something that we talk about all the time. You know, man, it's one of my biggest challenges, I think, as a financial and retirement planners, when you sit down with folks, you know, we talk about this all the time, though, spend a ton of time planning that vacation, planning that house remodel, you know, planning to buy that new car or whatever it may be, the fun stuff. But actually sitting down and having those difficult conversations, are we going to budget? How much are we putting away for retirement? Are we on pace with our goals? Do we have the right asset allocation? Are we engaging with the investment advisor or our CPA to talk about new strategies and techniques? Are we are we vigilant? Are we working towards that successful retirement? It's not something that we can kind of just hopefully it hopefully it works out. You know, we we know that when you're out there, you're out there listening, you're in your working stage, you've still got your head down, you're grinding, you're trying to make money, you're putting money away, you're paying bills. And and so sometimes retirement seems like a fantasy or something that's far off in the distance, a pipe dream.

Erick Arnett:
But it will always will be a fantasy and a pipe dream if you don't actually start disciplining yourself to sit down and to actively put together that plan and have a plan that can kind of help you and guide you throughout the years. You know, I don't care if you're five years away, ten years away, 20 years or one year, you've got to have that plan. It's got to constantly be evaluated. It's got to constantly be massaged. You know, there's always, you know, like today we're going to talk about the Secure Act 2.0. I mean, there's always changes. I mean, every day in the marketplaces, there's changes. So your your plan even has to be dynamic. It can't be static. You know, it's got to be flexible. It's got to be able to move. And so, you know, I love that quote. Just getting us focused up on if you really want to pursue something and you really want that successful retirement, then you absolutely have to embrace it and plan for it.

Randy Woodruff:
You got to be disciplined. You know, you mentioned earlier about people want to spend time buying that new car or building a new house, and it's all the fun stuff. But the stuff that I will say that really matters, of course, buying a new car and building a new house matter as well. But the stuff that typically matters long term sometimes isn't fun to do, like planning and budgeting. You know, nobody likes to. I mean, we're all human and we don't we don't like to do the sometimes the the difficult stuff, the painful stuff, if you will. Painful meaning you get you have to make choices of where you're going to spend your money or not spend your money. And so it's it's not easy. Even I'll say for myself, I don't like to make a budget. I don't like living within a budget. I've been doing it, you know, for years and years. And but even still, I don't like living within a budget. And so it just takes discipline over time. You don't want to say you go to like it, but you'll get more used to it, you'll get accustomed to it. I'll share with you a brief story and it goes back to when I was a kid.

Erick Arnett:
Please keep it brief.

Randy Woodruff:
Keep it.

Erick Arnett:
Brief. I'm just going.

Randy Woodruff:
When I was a kid, my, my, my parents would be like, okay, this is your your closed budget for the year for for all the clothes you want to have for the year. So if you want to go out and spend big dollars on a few items, guess what you're going to what you're going to do, what you're going to You're going to be wherever other clothing you want, you're not going to have are you going to go do extra chores, whatever, to pay for that? So so for me, budgeting, even as a when I was in my before I was ten years old, even though I wasn't doing it, budgeting was done for me, if you will, or I learned to appreciate the process. I was taught the process and I learned that if I didn't stay within my budget, then I had to make up for that and making up for the extra chores around the house. An extra chores for people in the neighborhood to get extra money, for thing, because I spent it here again as a kid. We make bad decisions as adults. We still make bad decisions sometimes, but I learned that if I make bad decisions, I have to make adjustments to overcome those. And so those lessons early in life have paid off for me later in life. And so I'm encourage all of our listening audience, you know, to if you have kids or grandkids, it's never too early to start teaching your children and grandchildren how to budget, how to manage money. It will definitely pay off for them later on in life.

Erick Arnett:
No, that's I have lots to say about that. But one thing they.

Randy Woodruff:
Brief I had a brief agave reef to.

Erick Arnett:
Yeah, I'll try to be brief, but that's not easy for me.

Randy Woodruff:
But.

Erick Arnett:
But yeah. No. Something exciting there to talk about. I wanted to announce on the show I'm super excited about this and it's thanks to all our listeners out there and the support that we get from you and the clients and everybody that helps us build our firm. We thank. You so much. And I know a lot of our existing clients listen to the show as well and have to give you a big thanks. And and because we were able to sponsor a program, it's it's a Dave Ramsey financial fiscal financial well being class in the local high school Hernando High so we're going to be sponsoring that for a year. It's a total curriculum that they bring into the school to teach our young kids and our young students how to be fiscally responsible. And so it's a personal financial class or course that we are sponsoring and we're super excited about that. And we hope and I know Hernando High, the folks out there super excited about is as well. And and so we're really excited to kind of see how that works out and how that goes for folks and the response that we get and and look forward to a really cool year in 2023. They're going to start that program in the fall there. So hopefully we can that program continues and continues to grow and and we'll even look at some other high schools. But thank you so much for supporting us out there, our Suncoast CPA clients, as well as our Take Point Wealth Management clients.

Erick Arnett:
Because with with your help, we are able to sponsor that and bring that into the school. So we're super excited about that. And Randy, I know you didn't even know about that, but I just told you so we got we got approved for that Ramsey program to get it in the high school there at Hernando High. And you know, over there at Hernando High, they definitely have some challenges and and some needs. And and so we're excited to help out over there. And I mean, nobody is out there teaching us how to balance a checkbook, right? So no one's teaching us about credit cards and and how to budget and all that kind of stuff. So I think it's super, super important. And I, I also just to bring an example of of a client story, if you're out there listening, you probably are in a similar situation. I know that most of us are. I even put myself in this category. It's difficult to talk about that budget and put that discipline plan in place like Randy spoke about. It's just kind of tough to have those conversations sometimes with your spouse or your partner or even even yourself if you're if you're a single person and, you know, maybe you're taking care of your your kids and your grandkids and and, you know, you just kind of going day by day and and, you know, that retirement thing out there is looming.

Erick Arnett:
But you don't quite understand or have a plan and know if you're on track for that. That's why we want to offer you today that free total retirement plan analysis. You will put together a complete plan for you. We'll test that plan to make sure that it's going to work for you. And then from that, we can decide on what kind of changes need to be made. You know, maybe you're right on track and there's no changes that need to be made. Maybe there's some small changes that need to be tweaked, or maybe you just really need a complete revamp. And I know that it's hard. I was sitting with this one couple that's really nice couple a few days back and, you know, some arguments almost ensued and we almost as financial advisors kind of become that, what do you call it, mediator or intermediary, you know, and and that's okay. I don't mind being put in that position. And, you know, sometimes maybe that's what you need if you're out there listening, you don't quite know how to go about this and communicate it with your spouse. And you know that sometimes arguments ensue and and all this kind of stuff and it's just a difficult situation to have. Then please give us a call, Bring us into the picture.

Erick Arnett:
We want to help you guys come together, build a really good, great plan and also be on the same page. Because what we find quite often, right, is, you know, couples, we typically look at money differently, you know, whether male or female or whatever it may be. Even just personalities, you know, you might look at money completely different than your spouse or your partner does. And so we want to make sure that we can kind of be that intermediary, that objective point of view, and get you guys on the right track. So but so jumping into kind of what's going on out there in the markets, we know that the Fed approved another 20 5.0.2 5% interest rate hike. And so they continue to increase rates. We believe that what we're hearing some of their rhetoric is that they will continue to raise rates here this year in 2023, maybe a fourth at a time. We're hoping that the Fed will kind of ease off here going into the second half of this year and the second quarter and maybe even potentially say that they're going to kind of halt interest rate increases for a while and see how the markets react. They are trying to bring the economy to a halt. One thing that is holding up right now is jobs, although we're starting to hear about more layoffs coming, it's quite you know, I mean, there could be a lot of companies that were over employed to during.

Erick Arnett:
During the economy when it was so overheated and was racing so high. And, you know, most every company out there couldn't even keep up with the demand. And so it could be that they're getting back to normal levels. But our national unemployment rate is still very, very strong. The job market is very, very strong. We have probably 4 million jobs open to fill and that's 4 million. That's 4 million more jobs open than people actually seeking jobs. So there's still a huge job surplus out there. So that's one thing that the Fed is kind of paying close attention to and they would like to see. I know it sounds crazy in order to help us long term, they want to bring short term pain and put people out of work. And that's, you know, it's kind of a bitter pill to swallow and it's hard to understand for sure. But that's kind of what they're focused on right now. Inflate. We have seen inflation kind of spike and we're kind of seeing some some data points. I mean, we look at hundreds of data points across the board and we pay close attention to kind of the inner metrics of everything inside the economy. And we're starting to see things kind of tip and pull back. We are seeing prices come down and certain parts of the economy, you know, certain industries, I know, you know, food is still probably pretty high.

Erick Arnett:
In fact, I've read some reports that farmers are even saying don't expect food decreases any time soon. However, I think that building costs home values are coming down a bit. We are seeing other areas of the economy come down a bit and kind of cool off. However, probably not at the pace that the Fed would need. And so in order to really, really, really tame and curb that, inflation would expect another couple of interest rate hikes here in 2023. So interest rates are moving higher. You know, there's also a lot of other things that can change interest rates other than just what the Fed does. There is a lot of other forces at work there that kind of move rates up and down. However, you know, we feel as though this is definitely something that unfortunately, although it's painful, it is necessary to get the economy back to a healthy stance and a manageable stance and one that's just not feverishly over overvalued. So continue to to watch that very closely. But, you know, a couple of things. You've got to be mindful in a rising interest rate environment. We've talked about this for years, is you've got to really take a close look at your portfolios and how they're allocated. You know, bonds will continue to see pressure as interest rates are rising and there's a lot of volatility in the bond market.

Erick Arnett:
So not so sure we should have large allocations to bonds and fixed income, which I know probably 95% of our listeners just by default inside their mutual funds or ETFs or their for one case, they probably do have quite a bit of exposure to fixed income. Kind of a tragic thing. I was I was actually shocked and perplexed when I was meeting with this one couple this past weekend. They they're in their 401. K and they kind of have a41k advisor attached to the account. And they just kind of blanketly put this this person into what's called a target return fund, a 2025 target return fund. And he couldn't understand why, you know, he was losing money in his portfolio and had a really bad year in 2022. And I pointed out to him that, well, you're in a target return fund where there's a heavy allocation to bonds and nobody's really watching that for you. So we've got to be able to tactically manage your portfolios, not passively manage them. And what I mean by that is, you know, you have to have someone physically hands on that portfolio on a daily basis making tweaks and changes and positioning it tactically, because wherever we are in the economic cycle, stocks, bonds, different industries in the stock market are going to act very differently. And so you've got to make some tweaks and some changes.

Erick Arnett:
And that's one thing that we do here at Take Point Wealth Management. We are tactical asset managers. We manage the money on a daily basis. We don't just set it and forget it. The majority, unfortunately, of folks out there listening, you know, you're kind of in that set up, forget it scenario and we've got to be actively managing that for you. You know, it's one thing when you're kind of young and you're out there working and you've got this long time horizon and you're just kind of putting money away out of your paycheck each month and which means your dollar cost averaging throughout the times and throughout the years. And so, you know, your portfolio's been slowly growing and building as you're adding to it. And that's okay when you're in that accumulation phase, we call it, right, that working accumulation phase. But if you're in that what we call retirement red zone, you're in that 55. I mean, I'm 52 and I feel like I'm in it because I'm getting a lot more. More serious about my retirement planning lately. I mean, one thing that I probably never did was sit down every year and do a budget and make sure that I'm on pace for my goals and tweak my plan however it need be to make sure I'm on pace to meet my retirement goals. And now that I'm in my fifties, I'm absolutely mindful of that and doing that on an annual basis because I feel like this is getting closer and closer.

Erick Arnett:
Right? So you may be feeling the same way out there if you're listening today. And and that's why here at Take Point Wealth Management, we're going to step up. We're going to do this complete retirement plan analysis for you. We're going to build you a solid retirement plan. We're going to get you to and through retirement successfully. And you really need to reach out and give us a shout. 352 616 0511. That's 352 616 0511. Let's get started today. I know it's January has already gone. It's February and I can't even believe that. But let's get going today, 2023 is the year. Let's you know, 2022 is kind of a crazy year. And, you know, we had a lot of shakeout and you're probably sitting there looking at your portfolios or your retirement plans, wondering what the heck went on. And now you're wondering, where do I go? Interest rates are higher. Do I you know, this is what we get every day. Should I just put my money in like a short term treasury or a CD at the bank because the rates are so much better now? Or, you know, should I be buying stocks here? Should I be selling stocks or vice versa? So let us let us let us handle that for you and answer those questions for you.

Randy Woodruff:
Erick, you mentioned some you mentioned the I'll say the phrase, set it and forget it. And so often we see people doing it doing that because when you're out in the workforce and you work at a company, they got a41k plan, there really isn't a financial advisor there. That's that's really giving you any kind of financial advice on what to invest in. There's usually 15 to 20 mutual funds and different levels of risk, and that's what you get to pick from and you probably get to rotate it once a year if that even depending on what their plan calls for And you're pretty much stuck. And so it's easy to to think retirement planning and investing where they set it and forget it mentality. But that's not the case. And you just think back, just think over your life and think about the things that are important to you. Do you take a set it and forget it, mindset or mentality, but the things that are important to you, you probably don't. And so retirement and consider you may spend 2030 years in retirement. It should be very it should be one of the most important things that you're thinking about, not just when you're in your forties and fifties, but even your twenties and thirties is probably going to be the in terms of the number of years you spend in retirement other than you're working years, you're going to spend more. Second, as can be the second number of years in terms of the number of years you spend is in retirement. So it definitely needs to be something that you're not setting and forgetting. It's constantly on your mind. You're thinking about it and you're planning for it and you're planning early, you know, and because we've all heard about the the effect of the compounding of interest and, you know, I can't I can't speak enough to that how important that is.

Randy Woodruff:
So whether you're in your fifties and you're listening or you're in your twenties and you're listening in, every can start soon enough, just like budgeting, you never can start soon enough and learning the the value of money, whether your parents are teaching your grandparents or teaching you when you're in your teens or pre teens, or even when you're in your forties and fifties. If you haven't ever had that kind of coaching or that kind of advice or education, there's plenty of resources out there to get it. And actually once you it's like anything I can think of so many things in my life that I didn't want to start because I didn't want to have to the first time I was doing it. Once I did it, that was like a big deal at all. Why did I put that off? You know, it's just the you know, it's just got to take that extra step of actually doing it. And and so I would encourage everybody out there to, again, not just retirement, don't just sit and forget it, but get actively involved and and come see us here, take points so we can actually put together a good plan for you. And like Erick said, we're tactical advisors. We're not just going to set it and forget it. We're going to be working with you on a regular basis to make sure that we're helping you reach those goals.

Erick Arnett:
Yeah, no. And I think a key theme that I'm hearing right now is from a lot of folks that been calling on the show or I've been meeting with that are looking for an advisor. I call them prospective clients across the board. I'm seeing the same thing is that this fear has been generated over the last year and they're just stuck in this fear mode and and they get into this market timing mode where they think that they're going to be able to all of a sudden put their money to work at the perfect time when they feel as though they feel warm and fuzzy inside. And let me tell you, folks, you're probably never, ever going to feel that warm, fuzzy feeling. You know, you can go back to the beginning of time and we are always facing something. You know, there's always some kind of chaos in the world. There's always recessions. There's always interest rates going up, down all around. But let me tell you something. Money is always moving. Going somewhere, folks? It's not just disappearing or evaporating. The money is moving. And that's why being with a tactical asset manager, you have to be in the game even in 2022. And we had probably one of the worst markets in the history of our country. And I'm talking about combined stock and bond portfolios. Take Point Wealth Management tactically still manage that risk exceptionally well. And even at this point in time over a 12 year period are looking at accounts that have positive returns.

Erick Arnett:
And that's because we were able to make tactical shifts throughout the year. So whether it's utilizing structured notes that are paying high yields, whether it's utilizing some short term treasuries, paying four and one half, 5% guaranteed migas, you know, multi year guaranteed annuities are paying almost over 5% right now for a three year multi year guaranteed annuity. Right. So there's all of these different types of assets out there. International stocks have been doing quite well. You know, dividend paying stocks, value stocks. I mean, I can show you stocks that are up 40, 50% last year. So the broad market got hit. Yes, but money is always moving somewhere. So you really need to reach out. Give us a shout. We need you to get back in the game. We need you to get back on pace. We need to we need to get your goals set and get in the game and get your retirement back on pace. So if you're fearful, I understand. That's because just because fear comes from a lack of knowledge, a lack of trust. And so we've got to we've got to get in the game and build that back up for you, because inflation probably isn't going to go away. It's probably is going to continue to eat you alive. We got increased taxes come in, inflation, all kinds of headwinds facing your folks. So that's our first segment. Matt, we're going to wrap this up and then I think we're coming back for another one.

Producer:
Yeah, we'll be right back. More Take Point on Retirement coming up after this.

Producer:
Miss. Part of today's show? Take point on retirement is available wherever you listen to podcasts and online at tech point on retirement dot com. Welcome back to Take point on retirement schedule your free financial consultation now at take point on retirement dot com.

Producer:
Welcome back this is Take Point on Retirement. I'm Matt McClure I'm in for Sam Davis who's the usual producer here. So if you're hearing a strange voice, it's not your imagination. It's not the voice in your head. It's only me. But I'm here with Erick Arnett, who is the host of Take Point on Retirement. And Erick, I know we've been talking a lot about interest rate increases and how that is going to potentially affect people's retirement. The inflation problem that that the interest rate increases are trying to tackle, how that is going to be something that's going to affect people's retirement. There's also this new piece of legislation that passed very late in the session last year, in late, late December, called the Secure Act 2.0. Talk about that because there's a lot there, too, that will really have an effect. Some good actually quite a few good things in there potentially for people and some kind of maybe not so good. So so run us through maybe some of the highlights here.

Erick Arnett:
Yeah, absolutely. I mean, obviously, you know, Washington is never short in words and and bills that they put together is probably 6000 pages. But we try to pull out what's important, what's going to affect our retirees and absolutely some big, big changes for our retirees and something that our folks need to be mindful of. So the big thing that jumps out to us is the required minimum distribution. So we talk about this all the time on the show. We talk about strategies to kind of combat those required minimum distributions because we feel as though that's kind of a burden for for our listeners and our clients when they have to take money out that they potentially don't even need to take out. And yet Uncle Sam wants you to have to take that out so they can tax it and that those taxes and that and that income that comes out also stacks on top of your Social Security, stacks on top of your Medicare stacks on top of your pensions, throws you up into higher tax brackets, which increase your cost across the board, increase your medical costs, increase your taxes. And so, you know, this is something that we have to be very, very mindful of and pay close attention to. And that's also why, you know, we've constantly added folks to the team here at take point wealth like Mr. Woodruff. You know, having that tax professional on board is super huge. We have Medicare experts standing by to answer all your questions about Medicare, life insurance, end of life planning, long term care, anything that potentially is on your mind.

Erick Arnett:
But just so you know, folks, I mean, there's a lot of stuff, right? We're just constantly blurting stuff out. But here at Take Point, we bring that all together for you in a clear, concise roadmap and retirement plan for you. So there's so many different things facing you folks out there coming at you. And so we want so we want to make sure you're prepared for all that. But yeah, the the big one, I think, is we kind of we kind of thought that the the that the Fed or the sorry the government would kind of push this upward. So 73 they're also now stating that in 2033 the required minimum distribution age will be 75. And so what does this really saying is? Yes, I mean, it's kind of a good thing they're letting us defer our money longer, but they also know that that money's not going anywhere. It's growing, it's deferred. Tax rates are going to go up. So they're just still creating that big tax bubble that they're going to hammer you with at some point. So and they're also probably trying to encourage people to work longer, you know, so they're also talking about potentially raising Social Security ages and whatnot. So but that's the big one, you know, requirement of distributions. If you're not sure about those and how they'll in your retirement impact your taxes, impact your Medicare, you know, they can impact your insurance premiums.

Erick Arnett:
So one thing that we talk about all the time here on the show, if you've listened before and you haven't acted, it's maybe time to do so and get more serious about it is coming in and sitting down with us and putting together that Roth conversion plan. You know, most everybody that we talk to has a majority of their money tied up into what we call qualified money or retirement money that's there for one K, your IRAs, maybe even an annuity. You know, that money's been allowed to grow tax free and you've got a tax deduction for the contribution. So when you go to take that out in retirement, Uncle Sam's going to tax it. And we also know that based on having, what is it, $34 trillion debt and running, that, you know, we're probably going to have increased taxes. I mean, there already, Randy, I mean, you can speak to this. I think they're already tweaking things a little bit in. Tax tables and stuff, just silently trying to increase taxes a little bit. I know my taxes have seemed to have gone up last year compared to this year, but what are some of the things that you're seeing there that are affecting the retirees and some of your clients? You know, are you seeing excessive taxation? Is it really impacting their their their their Social Security, Medicare and all that kind of stuff?

Randy Woodruff:
What are the things that sticks out in my mind as the biggest say, a disadvantage to people that to to seniors or retirees is the fact that everything else goes up for inflation. Every year. The the tax tables get indexed up for inflation, standard deductions get indexed up for inflation. But the amount of income that you can earn or have, whether it be earned income from a job in your own, you may still be on you may still work when you're on Social Security or you have other income from savings and interest and dividend income, rental income, whatever you have. But the amount of income that you can have before your Social Security becomes taxable. I've been doing this almost 30 years and that number has not been adjusted, adjusted at all for inflation, right? So every year, depending upon the year, inflation comes and goes. Right now it's been it's been a really big topic. And inflation shot up dramatically in the last year, year and a half, and probably going to be up there for a while, for quite a while to come. That number that that that you can earn and your Social Security doesn't get taxed has not it hasn't changed at all in at least 30 years. You know, so that's a we talk on this program about we call it the silent killers to your portfolio performance. You know, and that's I'll say that's a silent killer to your say retirement income is a little bit every year you're paying more and more tax on your Social Security because the government here again set these thresholds of what you could earn before they start taxing your Social Security. So that's the one thing that comes to mind that they haven't changed.

Randy Woodruff:
And I think it's unfair to seniors. And yet, if you if you belong to some say, AARP and other groups, then you should reach out to those groups and make sure that they're letting the politicians know that, hey, this needs to change. It hasn't changed in decades. It needs to change. These be getting indexed up every year. And other than that, there's there's always, you know, 2018 was the last big, big tax update. Of course, we had some tax changes with COVID. But those are more for you know, there's all these credits that came out. There was some legislation surrounding not taking RMDs and those kind of things, but the last major structural tax bill that impacted pretty much everybody in society was in 2018. Like I said, there are always tweaking and tuning and doing little things here and there, like the Secure Act. They just came out secure Act 2.0. That's going to help people push off their RMDs another year, which is great. And then then by 2033 they get to push it back initial two years. So so those are all we we talk about that with our show, with our clients about okay, we've got to start planning for these RMDs even though you don't need the money, maybe you don't need to take the money out of your IRA, but you have to take it. So we have to plan for that and it's going to cost money, taxes and taking that RMD may also cause a portion of your Social Security become taxable as well. So they're all those are all things we get a plan for. So pushing that back was a good benefit for seniors who don't need the money.

Erick Arnett:
And so yeah no I mean with the age of the RMDs increasing, we, we certainly suggest letting your money continue to grow if you can afford. You know, to postpone withdrawing from those accounts for for income needs. And also, I like it because it gives us more time to get get that money over to the Roth. You know, it gives us kind of typically what we do when we devise our Roth conversion schedule for our clients as we'll map out a certain time frame and have a goal of when we want to get there and have all the money converted to tax free money. And so this I love this because it gives us some more time to get there and kind of manage the taxes because I would love I mean, you know, my goal would be everybody, all my clients at some point, you know, if prior to their seventies or even sometime in their seventies, especially if they have longevity in their and their family and their and their healthy and everything, I'd love to see them be have all that money and tax free, you know, whether they're utilizing Roths or whether they're utilize utilizing life insurance, retirement plans. You know, I love to have build that tax free bucket because right now, you know, taxes are still on sale, folks.

Erick Arnett:
We're we're still even though taxes stink. And I wanted to say the same word, but I'm trying to clean up my mouth. But but, you know, taxes stink. I mean, we know that, right? But listen, they could get a lot worse because right now taxes are on sale because of what Randy was saying, that Tax Reform Act in 2018 actually did adjust taxes down and give us some breaks. And and we're at a historically low tax rates. If you look at a chart going back through time and through history, we are at historically low tax rates and that's going to change. If you think about it. I mean, the United States of America still has probably one of the lowest tax rates of out of all countries out there. And so that's going to change. It's definitely going to change. And I mean, just look at the current administration, you know, and kind of the the what what we say the momentum and changes there. You know, I mean, if I'm a betting man, I think that they're going to be raising taxes on our baby boomers and those retirement plans.

Randy Woodruff:
And take a look. If you get a chance and just go on Google and take a look at the history of our nation's debt. And we started having debt way back in probably the maybe the forties and fifties or before, but it was minimal. When you take a look at how much it's grown in the since the beginning of the 21st century, it's it's it really will cause you to pause and be like, wow, we are out of control in spending here in America. And, you know, part of that spending is has been good for all of us in this economy. We've all benefited from the government spending, whether they're building more infrastructure or just providing safety net benefits. There's still more money in the economy that gets spent and and companies that we all invest in and we get paid dividends from. So if taxes do start going up, if government spending does get cut, it's going to have an impact on our overall economy as it should. It makes sense is just basically it makes sense that that's going to have an impact on our economy. So if you're out there listening, that's another reason why you need to come see us here at Take Point, because we need to talk about that. And you need to make sure that as you put together your your retirement plan, that you have realistic goals and expectation of what your money is going to earn. If taxes do start going up and government spending does go down, that's going to there's going to be a lot less money in the economy to spend, a lot less money in the economy earn to pay dividends.

Randy Woodruff:
That's going to affect your retirement. So all those things are important things that you need to be thinking about and planning for. And that's why Erick says that our our models throw with it a thousand different different different tests at your portfolios to see how they're going to weather any storm that comes at you. So if you're listening, you definitely want to come in and see us and have us put together a plan for you that is realistic, you know, and not just especially if you have not waited or if you have waited until year later on in life and you realize that you are behind the eight ball in terms of how much money you need to actually have saved up for retirement, you're going to be tempted to change your potential amount of risk you're willing to take to achieve higher rates of return. And we're going to have a very serious conversation with you about that, about how realistic your rate of returns really are, based on based upon the amount of risk you're willing to take and also at your age. So here again, we come to that point. We want to have those conversations with you. We'll have those difficult conversations with you. We want to make sure your your plan is well grounded and has the best chance for success.

Erick Arnett:
Randi, we didn't we didn't even rehearse this, but. That was a that's a great dovetail into I actually wrote a book called What Is Your Financial Speed? It's available on my website. TakePointWealth.com. If you're listening and you want to go and grab that book, that e-book you can or if you need a if you need a copy or whatever it is, give me a shout. 352 616 0511. Or go to TakePointWealth.com but that that book that I wrote what is your financial speed. That's exactly what you're talking about I think that. So many people out there kind of just guessing. Right. And don't know exactly what that is. And what I mean by financial speed is what exactly is the pace that your money needs to be running at? What is the return that you need to be getting on your money in order to reach your retirement goals? Everybody is different. You know, It's not just, hey, I just you know, you don't just call up a broker and say, hey, just make me as much money as you can. That's not a goal, folks. And and and buying a bunch of mutual funds and just keep pumping money into it and hoping it works out. That's not a goal, folks. We're talking about getting a lot more into it here and diving into the details and really finding, you know, what kind of return do you need to be getting on your money. Also taking into account standard deviation, the measure of risk, your risk tolerance, you know, your goals.

Erick Arnett:
But everybody out there has a different financial speed. I might sit down with one family or one client and they might only need to get three 4% on their money and they're going to be fine. They're going to hit a home run and it's going to cover all their needs. I may sit down with another client and they might need to really average 8 to 10% on his money in order to reach their goals. And so that's the problem right there, is there's so many folks out there that are in the wrong investment vehicle or they're even sitting on the sidelines getting some kind of measly CD rate or they're fearful of doing anything. So they're just sitting there in their money's deteriorating based on inflation. You know, inflation's eating at seven, eight, 9% right now. So you're losing money, you're losing purchasing power. And so we've got to find through this retirement plan analysis and this free plan we put together for you, it all comes down to one page that I love and that one page kind of pulls out what your average return would be in a projected portfolio and what the average risk would be. And so how much risk are we having to take in order to get that return? And so we tweak that slowly to maximize returns with the least amount of risk that we can take in order to get you to your goals. You know, somebody might have a you might have a portfolio that's historically going to average 18%.

Erick Arnett:
Well, that's great, but it might have a standard deviation of 18, 20%. So you're going to have some big down years in that because it's too much risk. And as you're nearing retirement, you can't have big down years. It's too detrimental. So it's going to push you back. And so we've got to be very mindful of what your financial speed is. So you can go to my website and dive into that book or just give me a shout and we'll be happy to to walk you through how we find your true financial speed in order to for you to meet your goals. So getting back to the Secure Secure Act 2.0, some really good things there know the penalty for failing to take an RMD has decreased to 25% of the RMD amount. It used to be 50% and it even decreases to 10% if you correct your mistake on an amended return. So I know there's probably some folks out there maybe you forgot to take your RMD, maybe you have an inherited IRA. This is one thing that I see all the time. You inherited an IRA. You don't really know the rules around it and you've forgotten to take the RMD from the IRA that you inherited. So super important. If you have questions about that too, give us a shout. It's 352 616 0511. That's 352 616 0511. Give us a shout right now and we can answer those questions for you.

Randy Woodruff:
I want to comment real quick on those penalties. And they are they are they are real. And it does happen from time to time that people actually forget, especially that they've got multiple IRAs and they got multiple financial advisors. And then there's there's not a coordinated effort to make sure that that that the right amount of RMD comes out. And the IRS in the past I've had to deal with a few of these in the past for my clients who didn't we weren't their financial advisor here take point but they they had they forgot to take an R&D for a couple of years. The IRS is very this is a penalty that they're very lenient on and they've been they're very forgiving of this. So here again, if you haven't taken your RMD and you're panicking, don't panic. You come and see us, we'll get you. We'll get you the good. I'll figure it out for you. We'll get you to then returns, we'll get the returns amended. And I feel very confident that they will go ahead and forgive this penalty based on past experience with this.

Erick Arnett:
And so the IRS is forgiving.

Randy Woodruff:
Every now.

Erick Arnett:
And every now. You just used the word forgiving in IRS in the same sentence.

Randy Woodruff:
So hard to imagine. I know it does happen every now and again.

Erick Arnett:
Just I thought they just brought the pain all the time. But the IRS can be forgiving folks. We've heard that here from Mr. Randy Woodruff.

Producer:
Breaking news.

Erick Arnett:
That's great. That's breaking news, man. Breaking news. Hey, we've got about 10 minutes left and we didn't even get through half hour. I'm so much great stuff to really throw at you here today. But, you know, just I guess we'll just keep rolling kind of with the secure act. Another thing that's pretty cool about the Secure Act I think is super helpful for you folks out there listening is that catch up contributions they're going to increase in 2025 for your four one KS and your for all three BS and government plans if you're in your IRA account. So you're going to be able to catch up and make more and higher contributions in order to get you guys ready for retirement and catch up and save. So people always ask me, you know, sometimes I'll get a client or a prospective client and say, you know, I'm like 60, I'm in my sixties. I know it's too late. It's just too late for me. And I'm like, Listen, it's never too late, right? I mean, it's never too late. I could think of a million analogies to share with you right now, but we don't have time. But just know this. It's not too late, folks. I mean, you got you. It's certainly time to get in the game and to what we call it. Right. The course and get back on the right path.

Erick Arnett:
And hey, man, if you even saved another $50,000 prior to retirement, you know, it's going to be helpful. It's going to help out in a big way. You know, the average the average person, the average couple just in health care alone is going to be facing, you know, 18 to $30000 in health care costs and premiums. So just don't think because you're getting to that Medicare age that all of a sudden you're going to get all this free health care. No, no, no, no. We need to look at that for you and devise your own personal health care plan. We can do that here at Take Point. We'll take into account all of the health care costs that are facing you, what kind of plan that you're going to potentially need, where you're at geographically. And we can put together a cost analysis for you and actually show you, because I'm pretty I'm pretty fearful that this is one thing that folks are missing. How much health care is going to impact your retirement planning and your expenses? It's super expensive, folks, and it's based on your income and we've got to plan for it. We've got to got to plan for those increased costs. So so it's never too late. So catch up contributions. Super great. 529 College Savings Plans.

Randy Woodruff:
Pivot back to health care for.

Erick Arnett:
I want to.

Randy Woodruff:
Pivot. Pivot. Yes, please.

Erick Arnett:
We got we got, what, 5 minutes to 10 minutes.

Randy Woodruff:
Let's just be brief. You mentioned health care costs. I think you're you're spot on in terms of health care costs are going up. And also, people need to keep in mind to that managed care. And we've all been experiencing whether we work and we have a health care plan at work and or in retirement, you're going to get a medicare Advantage plan or supplement plan. You know, you probably have noticed that your access to health care that you may have had 20 years ago isn't as easy as it once was. You know, so managed care is supposed to help keep costs down. I mean, there is quite a bit of overutilization. There has been for years in the system in terms of people going for health care. It's really not necessary. You're going to the air when they could have went to a a walk in clinic or things like that. So but nonetheless, they're there. The system is trying to manage access to to care and your access to resources. And so just just make sure that there are if you have a medicare Advantage plan, you're probably going to have less access or restricted access compared to advantage to a supplement, which is more expensive, but it gets you a little bit better access. So here again, if you're someone that that has enjoyed pretty quick access to doctors and other services your entire life, as you get into retirement, you may find that that may not be so.

Randy Woodruff:
Of course, you've got more time to go to the doctor because you're retired. But nonetheless, when you if you need to get in and see somebody quickly, that may or may not happen as quick as you're used to. And just again, with COVID, there's been a lot of the medical community that have gotten burned out, and you're not seeing as many people enter the medical field. And so just kind of keep all that in mind that if you're even in retirement, you need to be planning for retirement, but you need to get a good handle on your health care, understand what's going on in your own body, Take good care of yourself. I'm not trying to say you should be self diagnosing, but you want to make sure that that you know what's going on with your body and your and your responding appropriately. And and also pay attention to what's going on when you when you go to the doctor, take somebody with you, take your spouse, take a good friend with you so they can hear what's going on as well and make sure that what you are hearing and the treatment that you're getting is going to be best for you.

Erick Arnett:
So, folks, let us help you navigate all these changes and all these challenges facing you. Medicare, we're a one stop shop. We can help you navigate all of those questions. We can help you shop supplemental plans. We can talk to you about the advantage plans we can talk to. You know, what's the best plan for you in your area. We have our Medicare experts standing by. We're ready to help you and we can get that. Place for you as well. So, you know, we always strive to help our prospects and our clients adapt to these ever changing landscape of taxes and public policy in rising rates, increasing rates, lowering rates, all the changes in health care. We've got the team in place here to navigate all these changes. Folks, thank you so much for listening today. To Take Point on Retirement Radio. As always, give us a shout of something today on today's show. Made sense to you or you just have some questions. You have some concerns. Please give us a shout at 352 616 0511. That's 352 616 0511. Or you can also just go right to my website TakePointWealth.com in the upper right hand corner. Click on my calendar and jump right in for a 15 to 20 minute chat session. We're looking forward to talking to you. We're standing by. This shows for you folks. It's an educational show. It's all for you and there's no obligation to do anything. It's not going to cost you a dime, just your time. So once again, thank you so much for listening. And we'll see you here next week on Take on Retirement Radio.

Producer:
Thanks for listening. To Take Point on Retirement, you deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets to schedule your free no obligation consultation visit to TakePointOnRetirement.com Or pick up the phone and call 352 616 0511. That's 352 616 0511.

Producer:
Investment Advisory Services offered through Brookstone Capital Management LLC BCM a registered Investment advisor BDSM and Take Point Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Do you have a vision for what you want your retirement to look like? I'm Matt McClure with a Retirement.Radio Network powered by AmeriLife planning for retirement can be overwhelming. A survey from Gobankingrates shows that one third of Americans don't think they know enough about retirement. And they're probably right. So if you fall into that category, how do you know where to begin? Well, you've got to know where you want to go before you start planning how to get there. That's where having a smart vision for your retirement comes in. Whether you want to be a jet setter during your retirement years. Want to take it easy in a quiet cabin in the woods or start a new adventure by opening your own business, you should set that goal and keep it in mind throughout your working years, retirement expert Dean Waggenspack said during a recent TEDx talk.

Dean Waggenspack:
I want to challenge all of.Us to redefine retirement away from depart, remove withdrawal to a new definition, a blending of pay, passion..

Producer:
Still, retirement looks different for everyone. Sit down with your spouse and talk about your retirement goals. That will make it easier to determine how fiscally responsible you need to be now and how much income you'll need to make it happen after you retire. That's right, I said. Income. More and more retirees are finding that cash flow is more important than one big nest egg number.

Lee Baker:
That's when you want to say, Hey, listen, I want to start thinking about all of this accumulation that I've done through these decades of working. How do I.Begin to think about turning what.I've saved and what I've accumulated into.Paychecks after I.

Producer:
That's Lee Baker, president of Apex Financial Services, speaking to CNBC. He says annuities are a great option for most retirees to generate an income you can never outlive. That's especially important since life expectancy has grown over the years. So you'll need to plan for a longer period of time than you may think. So do you have a smart vision for your retirement years? That's a key question to consider as you start planning how to get there with the Retirement.Radio Network powered by AmeriLife. I'm Matt McClure.

Producer:
At Take Point Wealth Management. We know you've worked hard to earn your money and you've worked even harder to save it When it comes to wealth management and planning for retirement. Trust Erick Arnett and his team of experts who have been helping individuals, families and business owners find financial freedom for more than 20 years. Let us help you protect and grow what you've worked so hard for. Schedule your free no obligation consultation now at TakePointWealth.com.

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